Metropolitan Water District vs. Sixto de los Angeles

An expropriation proceeding must be dismissed at any stage—even on appeal—once the condemnor admits the taking is not for a public use, but the dismissal shall be without prejudice to the landowner’s right to recover all damages occasioned by the proceeding.

Metropolitan Water District, a public corporation created under Act No. 2832 to supply water to Manila and neighboring municipalities, sought to acquire a parcel of land in Montalban, Rizal, owned by Sixto de los Angeles and others. The land, measuring 171.8861 hectares, was allegedly necessary for the construction of the Angat Waterworks System, specifically as a watershed. The District deposited ₱2,000 as provisional value and took immediate possession.

• Nature of the Action: Metropolitan Water District, a public corporation created under Act No. 2832, filed a complaint for expropriation of 171.8861 hectares of land belonging to Sixto de los Angeles et al., located in Montalban, Rizal. The stated purpose was the construction of the Angat Waterworks System, with the land intended as a watershed.

• Provisional Possession and Answer: On the same day the complaint was filed (October 27, 1926), the trial court fixed the provisional value at ₱2,000 and allowed the plaintiff to take possession upon deposit of that amount. Defendants answered with a general and specific denial and prayed for dismissal.

• Commissioners’ Proceedings and Conflicting Valuations: On April 27, 1927, three commissioners were appointed. On May 10, 1929, the majority (Jose M. Perez and Facundo San Agustin) submitted a report fixing the land value at ₱58,750.60 and improvements at ₱15,510 — a total of ₱74,260.60 — with a recommendation for 6% damages on the total value and 6% annual interest. Commissioner Emilio de la Paz filed a separate report valuing the land at ₱79,717.25 and improvements at ₱21,825, for a total of ₱101,542.25.

• Trial Court Judgment and Appeal: On January 6, 1930, the Court of First Instance adopted the majority report and ordered plaintiff to pay the defendants ₱74,260.60 with 6% interest per annum from the date of taking, plus costs. Plaintiff appealed on the ground that the award was grossly excessive; defendants appealed, arguing the award was below actual value and that they were entitled to an additional 6% damages on the total value.

• Motion to Discontinue on Appeal: While the appeal was pending, the Metropolitan Water District Board passed Resolution No. 38 on July 14, 1930, stating that the land was “not indispensably necessary in the maintenance and operation of its system of waterworks.” The Attorney-General moved on July 18, 1930, to discontinue the proceedings and dismiss the complaint. At oral argument, the Attorney-General disclosed that the board considered the trial court’s total assessment “excessive and exorbitant thereby rendering the investment too heavy for a reasonable return,” and concluded it could do away with the necessity for the property.

• Defendants’ Opposition: Defendants vigorously opposed discontinuance. They argued that after nearly five years of litigation, during which plaintiff had possessed the land, destroyed improvements, and caused them to incur substantial expenses including attorney’s fees, it would be unjust to permit withdrawal at this stage. They insisted that after judgment and perfected appeal, the right to dismiss no longer existed. In the alternative, they prayed that the record be remanded for determination of all damages suffered by reason of the proceedings.

• Valuation on Appeal: Plaintiff-appellant maintained that the values fixed by the lower court for the land and improvements were grossly excessive, exorbitant, unreasonable, and unjust.

• Right to Discontinue: Through the Attorney-General, plaintiff invoked the universally recognized right of a plaintiff to dismiss an action with court consent when the necessity or advisability of the remedy no longer exists. It argued that because the land was no longer indispensably necessary for the waterworks system, the proceeding should be discontinued and the complaint dismissed.

• Inadequate Award: Defendants-appellants argued that the trial court’s valuation was less than the actual value of the land and improvements, and that they were entitled to an additional 6% damages on the total value.

• Impropriety of Discontinuance: Defendants opposed the motion to dismiss, contending that after nearly five years of litigation, after they had been dispossessed, after incurring heavy litigation expenses, and after both parties had perfected an appeal, it was too late for the plaintiff to withdraw.

• Alternative Prayer for Damages: Should dismissal be granted, defendants urged the court to remand the record to the trial court for the determination of all damages they suffered by reason of the condemnation proceedings.

• Right to Discontinue on Appeal: Whether the condemnor may discontinue an expropriation proceeding and have the complaint dismissed after judgment has been rendered and an appeal perfected, on the ground that the land is no longer necessary for public use.

• Conditions of Dismissal: Whether the landowner is entitled to recover all damages occasioned by the proceeding, and what elements of damage are recoverable upon such dismissal.

• Right to Discontinue on Appeal: The motion to dismiss was granted. The fundamental basis of all expropriation proceedings is public use. The moment it appears at any stage of the proceedings—even during appeal—that the taking is not for a public use, the action must fail and must be dismissed. The admission by the condemnor that the land is not necessary for public use dispenses with the need for any motion; dismissal becomes obligatory. The right of a plaintiff to dismiss an action with court consent is universally recognized, subject to well-defined exceptions, and courts should not compel litigation when the plaintiff no longer desires to pursue it; however, the court must always consider the effect of dismissal upon the rights of the defendant.

• Conditions of Dismissal: Because the defendants had been dispossessed, deprived of rents and profits, and had incurred expenses and suffered destruction of improvements, dismissal was conditioned upon the plaintiff answering for all damages occasioned to the defendants. The record was ordered returned to the lower court with a directive that a writ of possession issue immediately restoring the land to defendants. The lower court was instructed to determine damages—whether in the same or a separate action—taking into account: (1) loss resulting from dispossession; (2) loss of use and occupation; (3) expenses incurred during the pendency of the action, including attorney’s fees; (4) destruction of buildings, canals, and growing crops at the time of occupation; and (5) all other damages of whatever kind or character that the defendants proved were occasioned by the institution of the action. The claim for damages was to be presented within thirty days from return of the record.

• Public Use as the Foundation of Eminent Domain — The power of eminent domain is the right of the state to reassert dominion over private property for public use. Because public use is the fundamental basis of every expropriation action, the moment it appears, at any stage, that the taking is not for a public use, the action fails and must be dismissed. This is true even if no motion is filed; the court must act sua sponte.

• Right to Dismiss with Court Consent — A plaintiff may dismiss an action with the consent of the court when the necessity or benefit that prompted suit no longer exists, or when the result would differ from what was intended. Courts should discourage, not encourage, litigation. In granting dismissal, however, the court must always take into account the effect on the rights of the defendant. (Citing City of Manila vs. Ruymann, 37 Phil. 421.)

• Damages Upon Discontinuance of Expropriation — When a condemnor discontinues an expropriation proceeding after taking possession, the landowner is entitled to recover all damages resulting from the proceeding. The recoverable items include loss of possession, loss of use and occupation, litigation expenses including attorney’s fees, destruction of improvements, and any other damage occasioned by the action. The trial court must determine these damages either in the original action or in a separate action filed within the period set.

• “The right of the plaintiff to dismiss his action with the consent of the court is universally recognized with certain well-defined exceptions. If the plaintiff discovers that the action which he commenced was brought for the purpose of enforcing a right or a benefit, the advisability or necessity of which he later discovers no longer exists, or that the result of the action would be different from what he had intended, then he should be permitted to withdraw the same, subject to the approval of the court. … Courts, in granting permission to dismiss an action, of course, should always take into consideration the effect which said dismissal would have upon the rights of the defendants.”

• “The fundamental basis then of all actions brought for the expropriation of lands, under the power of eminent domain, is public use. That being true, the very moment that it appears at any stage of the proceedings that the expropriation is not for a public use, the action must necessarily fail and should be dismissed, for the reason that the action cannot be maintained at all except when the expropriation is for some public use. That must be true even during the pendency of the appeal or at any other stage of the proceedings.”

• “It now appearing positively, by resolution of the plaintiff, that the expropriation is not necessary for public use, the action should be dismissed even without a motion on the part of the plaintiff. The moment it appears in whatever stage of the proceedings that the expropriation is not for a public use the complaint should be dismissed and all the parties thereto should be relieved from further annoyance or litigation.”

• City of Manila vs. Ruymann, 37 Phil. 421 — Followed as controlling on the principle that a plaintiff has a right to dismiss an action with court consent, subject to consideration of the defendant’s rights, when the necessity for the suit no longer exists.

• Section 63, Act of Congress of July 1, 1902 (Philippine Bill) — Authorized the Government of the Philippine Islands to exercise the right of eminent domain to acquire real estate for public uses. Conferred the foundational sovereign power upon which the expropriation rested.

• Section 28, Act of Congress of August 29, 1916 (Jones Law) — Continued the power of eminent domain in the Philippine Government. Cited to show the uninterrupted authority of the government to condemn private property for public use.

• Section 241, Act No. 190 (Code of Civil Procedure) — Provided that the government, its subdivisions, and any person or corporation having the right to condemn property for public use shall exercise that right in the manner prescribed by law.

• Section 2, paragraph (k), Act No. 2832 — Charter of the Metropolitan Water District, expressly granting it the power to exercise eminent domain for its waterworks system.

Avanceña, C.J., Street, Ostrand, Romualdez, and Villa-Real, JJ., concurred.

• Malcolm, Villamor, and Johns, JJ., dissenting — The dissent argued that the motion to discontinue came too late and should have been denied. Nearly five years after the case was commenced, after the condemnor had taken possession and a final judgment of the trial court had been appealed, the right to discontinue was lost and the landowner’s right to just compensation had vested. The condemning authority admitted it sought dismissal because the award was “excessive and exorbitant,” which the dissent characterized as an impermissible “experimental suit” — a speculation on the result of the litigation. Relying on Drath vs. Burlington & Missouri R.R. Co., 15 Neb. 367, the dissent maintained that a condemnor cannot, after an appeal and judgment fixing compensation, abandon the proceeding to escape paying the award. The dissent would have denied the motion and proceeded to review the case to determine just compensation.