The main petition in this case is for determination of just compensation for the expropriation of lands under B.P. Blg. 340. Alfredo Guerrero intervened in this proceeding arguing that, instead of the De la Ramas, he should receive the just compensation for the subject land. The trial court and the Court of Appeals declared him the rightful recipient of the amount. This is an appeal from the decision1 [Per Justice Emeterio C. Cui, concurred in by Justices Ramon A. Barcelona and Demetrio G. Demetria.] of the Court of Appeals. We affirm.

The facts are as follows:

On February 17, 1983, Batas Pambansa Blg. 340 was passed authorizing the expropriation of parcels of lands in the names of defendants in this case, including a portion of the land, consisting of 1,380 square meters, belonging to Milagros and Inocentes De la Rama covered by TCT No. 16213.

On December 14, 1988, or five years thereafter, Milagros and Inocentes De la Rama entered into a contract2 [Rollo, pp. 80-82.] with intervenor Alfredo Guerrero whereby the De la Ramas agreed to sell to Guerrero the entire property covered by TCT No. 16213, consisting of 4,075 square meters for the amount of P11,800,000.00. The De la Ramas received the sum of P2,200,000.00 as partial payment of the purchase price, the balance thereof to be paid upon release of the title by the Philippine Veterans Bank.

On November 3, 1989, Guerrero filed in the Regional Trial Court in Pasay City a complaint for specific performance (Civil Case No. 6974-P) to compel the De la Ramas to proceed with the sale.

On July 10, 1990, while this case for specific performance was pending, the Republic of the Philippines filed the present case (Civil Case No. 7327) for expropriation pursuant to B.P. Blg. 340.3 [Id., at 83-104.] Among the defendants named in the complaint were Milagros and Inocentes De la Rama as registered owners of Lot 834, a portion of which (Lot 834-A) was part of the expropriated property. Upon the deposit of P12,970,350.00 representing 10 percent of the approximate market value of the subject lands, a writ of possession4 [RTC Records, p. 612.] was issued on August 29, 1990 in favor of the government.

On May 2, 1991, Guerrero filed a motion for intervention5 [Rollo, pp. 164-166.] alleging that the De la Ramas had agreed to sell to him the entire Lot 834 (TCT No. 16213) on December 14, 1988 and that a case for specific performance had been filed by him against the De la Ramas.

On September 9, 1991, based on the report of the committee on appraisers appointed by the court and the submissions of defendants, the trial court approved payment to the De la Ramas at the rate of P23,976.00 per square meter for the taking of 920 square meters out of the 1,380 square meters to be expropriated under B.P. Blg. 340.6 [RTC Records, p. 15.]

Meanwhile, on September 18, 1991, the trial court rendered a decision in the case for specific performance (Civil Case No. 6974-P)7 [Rollo, p. 105.] upholding the validity of the contract to sell and ordering the De la Ramas to execute the corresponding deed of sale covering the subject property in favor of Guerrero. The De la Ramas appealed to the Court of Appeals (CA-G.R. No. CV-35116) but their petition was dismissed on July 28, 1992. They tried to appeal to this Court (G.R. No. 106488) but again they failed in their bid as their petition for review was denied on December 7, 1992.

Meanwhile, on October 2, 1991, Guerrero filed an Omnibus Motion8 [RTC Records, p. 759.] praying that the just compensation for the land be deposited in court pursuant to Rule 67, §9 of the Rules of Court. As his motion for intervention and omnibus motion had not yet been resolved, Guerrero filed with the Court of Appeals a petition for mandamus, certiorari, and injunction with temporary restraining order9 [Rollo, p. 195.] (C.A.-G.R. SP No. 28311) to enjoin the Republic from releasing or paying to the De la Ramas any amount corresponding to the payment of the expropriated property and to compel the trial court to resolve his two motions.

On January 12, 1993, the Court of Appeals rendered a decision granting the writ of mandamus.10 [Id., at 195-204.]

Nonetheless, the De la Ramas filed on March 17, 1993 a Motion for Authority to Withdraw11 [RTC Records, p. 1287.] the deposit made by the Republic in 1991. This motion was denied as the trial court, on May 7, 1993, allowed the intervention of Guerrero and ordered the Republic to deposit the amount of just compensation with the Clerk of Court of RTC, Pasay City.12 [Id., at 1296-1297.]

On June 16, 1993, the De la Ramas filed a Motion for Execution13 [Id., at 1448-1451.] again praying that the court’s order dated September 9, 1991, approving the recommendation of the appraisal committee, be enforced. This was duly opposed by Guerrero.14 [Id., at 1460-1463.]

On June 22, 1993, the trial court denied the motion of the De la Ramas holding that there had been a change in the situation of the parties, therefore, making the execution of the September 9, 1991 Order inequitable, impossible, or unjust.15 [Id., at 1480-1482.]

As if to further delay the proceedings of this case, the De la Ramas then filed an Omnibus Motion seeking clarification of the September 18, 1991 decision of the trial court in the case for specific performance, upholding the validity of the contract to sell, insofar as the area covered by the contract was concerned, and asking that a restraining order be issued until this motion was granted.

In its order dated October 7, 1993, the trial court clarified that the area of land covered by the contract to sell included the portion expropriated by the Republic. It stated:

The decision in the action for specific performance in Civil Case No. 6974-P having become final, an order of execution17 [Id., at 121-123.] was issued by the Pasay City RTC, and as a result of which, a deed of absolute sale18 [Id., at 124.] was executed by the Branch Clerk of Court on March 8, 1994 in favor of Guerrero upon payment by him of the sum of P8,808,000.00 on January 11, 1994 and the further sum of P1,608,900.00 on February 1, 1994 as full payment for the balance of the purchase price under the contract to sell of December 14, 1988. The entire amount was withdrawn and duly received by the De la Ramas.19 [RTC Records, p. 1928.]

Thereafter, the De la Ramas sought the nullification of the June 22, 1993 order of the trial court in this case, denying their motion for execution of the order approving the recommendation of the appraisal committee, by filing a petition for certiorari and mandamus in the Court of Appeals. This petition was, however, dismissed in a decision dated July 29, 1994 of the appellate court.20 [Rollo, pp. 206-212.]

On April 5, 1995, the Pasay City Regional Trial Court, Branch 111, declared Guerrero the rightful owner of the 920-square meter expropriated property and ordered payment to him of just compensation for the taking of the land. The dispositive portion of its decision reads:

This decision was subsequently affirmed by the Court of Appeals.22 [Id., pp. 43-47.] Hence, this petition.

The De la Ramas contend:

As already stated, the De la Ramas and Guerrero entered into a contract to sell with respect to Lot 834. This lot has an area of 4,075 square meters. This contract was executed on December 14, 1988, after B.P. Blg. 340 was passed authorizing the expropriation of a portion of the land, consisting of 1,380 square meters, of the De la Ramas. The only issue in this case is who, between the De la Ramas and Guerrero, is/are entitled to receive payment of just compensation for the taking of 920 square meters of the land in question?

The De la Ramas claim that they should receive the amount of just compensation because when they agreed to sell Lot 834 in 1988 to Guerrero, it did not include the portion expropriated by the Republic since, at that time, such portion had been expropriated by the government by virtue of B.P. Blg. 340, which took effect on February 17, 1983. They state:

On the other hand, Alfredo Guerrero argues that the title to the expropriated portion of Lot 834 did not immediately pass to the government upon the enactment of B.P. Blg. 340 in 1983, as payment of just compensation was yet to be made before ownership of the land was transferred to the government. As a result, petitioners still owned the entire Lot 834 at the time they agreed to sell it to Guerrero. Therefore, since Guerrero obtained ownership of Lot 834, including the 920 square meters expropriated by the government, he has the right to receive the just compensation over the said property.

We find the De la Ramas’ contention without merit. We hold that Guerrero is entitled to receive payment of just compensation for the taking of the land.

The power of eminent domain is an inherent power of the State. No constitutional conferment is necessary to vest it in the State. The constitutional provision on eminent domain, Art. III, §9, provides a limitation rather than a basis for the exercise of such power by the government. Thus, it states that "Private property shall not be taken for public use without just compensation."

Expropriation may be initiated by court action or by legislation.25 [Republic v. De Knecht, 182 SCRA 142 (1990)] In both instances, just compensation is determined by the courts.26 [Export Processing Zone Authority v. Dulay, 149 SCRA 305 (1987)]

The expropriation of lands consists of two stages. As explained in Municipality of Biñan v. Garcia:27 [180 SCRA 576, 583-584 (1989), reiterated in National Power Corp. v. Jocson, 206 SCRA 520 (1992)]

It is only upon the completion of these two stages that expropriation is said to have been completed. Moreover, it is only upon payment of just compensation that title over the property passes to the government.28 [Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 343 (1989)] Therefore, until the action for expropriation has been completed and terminated, ownership over the property being expropriated remains with the registered owner. Consequently, the latter can exercise all rights pertaining to an owner, including the right to dispose of his property, subject to the power of the State ultimately to acquire it through expropriation.

In the case at hand, the first stage of expropriation was completed when B.P. Blg. 340 was enacted providing for the expropriation of 1,380 square meters of the land in question. The constitutionality of this law was upheld in the case of Republic v. De Knecht.29 [182 SCRA 142 (1990)] In 1990, the government commenced the second stage of expropriation through the filing of a petition for the determination of just compensation. This stage was not completed, however, because of the intervention of Guerrero which gave rise to the question of ownership of the subject land. Therefore, the title to the expropriated property of the De la Ramas remained with them and did not at that point pass to the government.

The De la Ramas are mistaken in arguing that the two stages of expropriation cited above only apply to judicial, and not to legislative, expropriation. Although Congress has the power to determine what land to take, it can not do so arbitrarily. Judicial determination of the propriety of the exercise of the power, for instance, in view of allegations of partiality and prejudice by those adversely affected,30 [See J.M. Tuazon & Co., Inc. v. Land Tenure Admin., 31 SCRA 413 (1970)] and the just compensation for the subject property is provided in our constitutional system.

We see no point in distinguishing between judicial and legislative expropriation as far as the two stages mentioned above are concerned. Both involve these stages and in both the process is not completed until payment of just compensation is made. The Court of Appeals was correct in saying that B.P. Blg. 340 did not effectively expropriate the land of the De la Ramas. As a matter of fact, it merely commenced the expropriation of the subject property.

Thus, in 1988, the De la Ramas still had authority to transfer ownership of their land and convey all rights, including the right to receive just compensation, to Guerrero.

The contract to sell between the De la Ramas and Guerrero, executed on December 14, 1988, reads:

The land, as described above in the Contract to Sell, includes the land expropriated under B.P. Blg. 340, to wit:

As the trial court in the case for specific performance ruled, the contract to sell covered the entire Lot 834, including the expropriated area, which was then owned by the De la Ramas.

It is true that the contract to sell did not convey to Guerrero the subject parcel of land described therein. However, it created an obligation on the part of the De la Ramas to convey the land, subject to the fulfillment of the suspensive conditions therein stated. The declaration of this contract’s validity, which paved the way for the subsequent execution of the Deed of Absolute Sale on March 8, 1994, following the order of the Regional Trial Court for its execution, by the Clerk of Court, Branch 113, Pasay City, effectively conveyed ownership of said parcel of land to Guerrero.

The contention that the Deed of Absolute Sale excluded the portion expropriated by the government is untenable. The Deed of Absolute Sale reads in pertinent parts:

The underscored phrase does not say that the expropriated portion of the lot was excluded from the sale. Rather, it states that the entire property, consisting of 4,075 square meters, was being sold free from all liens and encumbrances except the lien in favor of the government over the portion being expropriated by it. Stated in another way, Guerrero was buying the entire property free from all claims of third persons except those of the government.

Evidently, Lot 834 was conveyed in 1994 to Guerrero by virtue of the Deed of Absolute Sale. This contract was registered in the Register of Deeds and, accordingly, a new transfer certificate of title was issued to Guerrero.34 [Id., p. 265.] Pursuant thereto, and by virtue of subrogation, the latter became the rightful owner entitled to receive the just compensation from the Republic.

The De la Ramas make much of the fact that ownership of the land was transferred to the government because the equitable and the beneficial title was already acquired by it in 1983, leaving them with only the naked title. However, as this Court held in Association of Small Landowners in the Phil., Inc. v. Secretary of Agrarian Reform:35 [175 SCRA 343, 389 (1989)]

Lastly, the De la Ramas contend that Guerrero only paid P7,417,000.00 and not P8,800,000.00 as stipulated in the contract to sell. However, Guerrero explained in his comment in this case:

The De la Ramas question this ruling of the lower court. They say:

Petitioners can no longer question a judgment which has already become final and executory. The order of the Regional Trial Court on the payment of legal interest was issued on September 18, 1991 in the case for specific performance against the De la Ramas (Civil Case No. 6974-P). Hence, they are already barred from questioning it now in this proceeding.

Finally, we take note of the fact that the De la Ramas have withdrawn and appropriated for themselves the amount paid by Guerrero. This amount represented the purchase price of the entire 4,075 square meters of land, including the expropriated portion, which was the subject of their agreement. The payment, therefore, to them of the value of the expropriated portion would unjustly enrich them.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED.

Bellosillo, (Chairman), Quisumbing, Buena, and De Leon, Jr., JJ., concur.