Case Digest: CAPITOL STEEL CORPORATION v. PHIVIDEC INDUSTRIAL AUTHORITY 510 SCRA 590 (2006)

CAPITOL STEEL CORPORATION v. PHIVIDEC INDUSTRIAL AUTHORITY 510 SCRA 590 (2006)

Upon compliance with the requirements for a valid expropriation, it becomes the ministerial duty of the trial court to issue a writ of possession. Capitol Steel Corporation (Capitol Steel) is a domestic corporation which owns 65 parcels of land located at the province of Misamis Oriental. Phividec Industrial Authority (PHIVIDEC) is a government owned and controlled corporation which is vested the power of eminent domain for the purpose of acquiring rights of way or any property for the establishment or expansion of the PHIVIDEC areas. PHIVIDEC filed an expropriation case for the properties of Capitol Steel because it was identified as the most ideal site for the project of PHIVIDEC. The trial court denied PHIVIDEC‘s issuance of a writ of possession, noting that the amount deposited was seemingly inadequate and was simply out of PHIVIDEC‘s interpretation of the prevailing zonal valuation and was not mutually agreed upon but it was finally granted by the trial court. On appeal, the appellate court ruled in favor of PHIVIDEC, ordering the RTC to issue a Writ of Possession. Hence, this present petition for review. 

ISSUE:

Whether or not the appellate court erred in ordering the RTC to issue a writ of possession in favor of PHIVIDEC

HELD:

Under R.A. 8974, the requirements for authorizing immediate entry in expropriation proceedings involving real property are: (1) the filing of a complaint for expropriation sufficient in form and substance; (2) due notice to the defendant; (3) payment of an amount equivalent to 100% of the value of the property based on the current relevant zonal valuation of the BIR including payment of the value of the improvements and/or structures if any, or if no such valuation is available and in cases of utmost urgency, the payment of the proffered value of the property to be seized; and (4) presentation to the court of a certificate of availability of funds from the proper officials. Upon compliance with the requirements, a petitioner in an expropriation case, in this case PHIVIDEC, is entitled to a writ of possession as a matter of right and it becomes the ministerial duty of the trial court to forthwith issue the writ of possession. No hearing is required and the court neither exercises its discretion or judgment in determining the amount of the provisional value of the properties to be expropriated as the legislature has fixed the amount under Section 4 of R.A. 8974. 

To clarify, the payment of the provisional value as a prerequisite to the issuance of a writ of possession differs from the payment of just compensation for the expropriated property. While the provisional value is based on the current relevant zonal valuation, just compensation is based on the prevailing fair market value of the property.