City of Manila v. Prieto: Strict Limits on Local Government Expropriation Powers

The power of eminent domain is one of the most formidable tools available to government, allowing it to take private property for public use. When exercised by local government units (LGUs), however, this power is not absolute. In City of Manila v. Prieto (G.R. No. 221366, July 8, 2019), the Supreme Court reminded LGUs that their delegated expropriation powers come with strict conditions that must be proven with evidence, not mere assertions.

The Case Background

The City of Manila enacted Ordinance No. 8070 in 2004 to acquire private lands for its "Land-for-the-Landless Program." The city offered P2,000 per square meter to the property owners, who rejected the offer as too low. Instead of renegotiating, the city immediately filed an expropriation complaint and sought a writ of possession.

The Regional Trial Court granted the expropriation, accepting the city's claim that an on-site development program was the most practicable option. The Court of Appeals reversed, finding the city failed to prove compliance with legal requirements. The Supreme Court affirmed the appellate court's ruling.

The Nature of Delegated Power

The Court emphasized that LGUs have no inherent power of eminent domain. This power belongs to the legislature and is merely delegated to LGUs through Section 19 of the Local Government Code. As the Court explained, a delegated power is inferior to the principal's power since it must conform to the limits imposed by the delegating authority.

Section 19 requires: (1) an ordinance authorizing the exercise; (2) public use or benefit for the poor and landless; (3) payment of just compensation; and (4) a valid and definite offer that was rejected. Additionally, the exercise must comply with "pertinent laws," which in this case included Republic Act No. 7279 (Urban Development and Housing Act of 1992).

Compliance with RA 7279

RA 7279 imposes two critical limitations on expropriation for socialized housing. First, Section 9 establishes a priority list for land acquisition, with privately-owned lands last. The list may be bypassed only when on-site development is found more practicable and advantageous to the beneficiaries—a finding that requires actual evidence.

Second, Section 10 provides that expropriation may be resorted to only when other modes of acquisition have been exhausted. The city failed on both counts.

The Court found no evidence supporting the city's claim that an on-site development study was conducted. There was no showing that the city attempted to acquire government-owned or other priority lands first. The city also failed to prove the properties were "blighted" as defined by RA 7279—areas with dilapidated structures that prevent normal development.

The Duty to Renegotiate

Perhaps most significantly, the Court held that when a property owner rejects an offer but indicates willingness to negotiate, the government must renegotiate rather than immediately file suit. The city's failure to do so meant there was no valid and definite offer as required by law.

The Court cited Article 35 of the Implementing Rules of the Local Government Code, which requires the local chief executive to call a conference when owners are willing to sell at a higher price. The government must make a reasonable offer in good faith, not merely a pro forma offer.

Practical Takeaways

• Evidence matters: LGUs must present actual studies, surveys, and documentation proving compliance with legal requirements—bare allegations will not suffice.
• Exhaust alternatives first: Before resorting to expropriation, LGUs must genuinely attempt other acquisition modes, including renegotiation after an initial offer is rejected.
• Know the priority list: For socialized housing, private lands are last in the acquisition priority order under RA 7279, and bypassing this list requires proof.
• Verify beneficiary status: Expropriation for housing must benefit the "underprivileged and homeless" as defined by law, not individuals who can afford to purchase property.
• Strict scrutiny applies: Courts must carefully examine whether LGUs complied with all conditions before allowing them to take private property.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.