EPZA vs Dulay* The question raised in this petition is whether or not Presidential Decrees Numbered 76, 464, 794

and 1533 have repealed and superseded Sections 5 to 8 of Rule 67 of the Revised Rules of Court, such that in determining the just compensation of property in an expropriation case, the only basis should be its market value as declared by the owner or as determined by the assessor, whichever is lower. in the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31 SCRA 413, the Court, speaking thru now Chief Justice Fernando, reiterated the 'well-settled (rule) that just compensation means the equivalent for the value of the property at the time of its taking. Anything beyond that is more and anything short of that is less, than just compensation. It means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity. We are constrained to declare the provisions of the Decrees on just compensation unconstitutional and void and accordingly dismiss the instant petition for lack of merit. cdtai The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under the Constitution is reserved to it for final determination. Thus, although in an expropriation proceeding the court technically would still have the power to determine the just compensation for the property, following the applicable decrees, its task would be relegated to simply stating the lower value of the property as declared either by the owner or the assessor. As a necessary consequence, it would be useless for the court to appoint commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the taking of private property is seemingly fulfilled since it cannot be said that a judicial proceeding was not had before the actual taking. However, the strict application of the decrees during the proceedings would be nothing short of a mere formality or charade as the court has only to choose between the valuation of the owner and that of the assessor, and its choice is always limited to the lower of the two. The court cannot exercise its discretion or independence in determining what is just or fair. Even a grade school pupil could substitute for the judge insofar as the determination of constitutional just compensation is concerned. In the present petition, we are once again confronted with the same question of whether the courts under P.D. 1533, which contains the same provision on just compensation as its predecessor decrees, still have the power and authority to determine just compensation, independent of what is stated by the decree and to this effect, to appoint commissioners for such purpose. This time, we answer in the affirmative. In overruling the petitioner's motion for reconsideration and objection to the commissioner's report, the trial court said: "Another consideration why the Court is empowered to appoint commissioners to assess the just compensation of these properties under eminent domain proceedings, is the well-entrenched ruling that 'the owner of property expropriated is entitled to recover from expropriating authority the fair and full value of the lot, as of the time when possession thereof was actually taken by the province, plus consequential damages including attorney's fees from which the consequential benefits, if any should be deducted, with interest at the legal rate, on the aggregate sum due to the owner from and after the date of actual taking.' (Capitol Subdivision, Inc. v. Province of Negros Occidental, 7 SCRA 60). In fine, the decree only establishes a uniform basis for determining just compensation which the Court may consider as one of the factors in arriving at 'just compensation,' as envisage in the Constitution. In the words of Justice Barredo, 'Respondent court's invocation of General Order No. 3 of September 21, 1972 is nothing short of an unwarranted abdication of judicial authority, which no judge duly imbued with the implications of the paramount principle of independence of the judiciary should ever think of doing.' (Lina v. Purisima, 82 SCRA 344, 361; Cf. Prov. of Pangasinan v. CFI Judge of Pangasinan, Br. VIII, 80 SCRA 117) Indeed, where this Court simply follows PD 1533, thereby limiting the determination of just compensation on the value declared by the owner or administrator or as determined by the Assessor, whichever is lower, it may result in the deprivation of the landowner's right of due process to enable it to prove its claim to just compensation, as mandated by the Constitution. (Uy v. Genato, 57 SCRA 123). The tax declaration under the Real Property Tax Code is, undoubtedly, for purposes of taxation." We are convinced and so rule that the trial court correctly stated that the valuation in the decree may only serve as a guiding principle or one of the factors in determining just compensation but it may not substitute the court's own judgment as to what amount should be awarded and how to arrive at such amount. A return to the earlier well-established doctrine, to our mind, is more in keeping with the principle that the judiciary should live up to its mission "by vitalizing and not denigrating constitutional rights." (See Salonga v. Cruz Pao, 134 SCRA 438, 462; citing Mercado v. Court of First Instance of Rizal, 116 SCRA 93.) The doctrine we enunciated in National Housing Authority v. Reyes, supra , therefore, must necessarily be abandoned if we are to uphold this Court's role as the guardian of the fundamental rights guaranteed by the due process and equal protection clauses and as the final arbiter over transgressions committed against constitutional rights. The basic unfairness of the decrees is readily apparent. Just compensation means the value of the property at the time of the taking. It means a fair and full equivalent for the loss sustained. All the facts as to the condition of the property and its surroundings, its improvements and capabilities, should be considered. In this particular case, the tax declarations presented by the petitioner as basis for just compensation were made by the Lapu-Lapu municipal, later city assessor long before martial law, when land was not only much cheaper but when assessed values of properties were stated in figures constituting only a fraction of their true market value. The private respondent was not even the owner of the properties at the time. It purchased the lots for development purposes. To peg the value of the lots on the basis of documents which are out of date and at prices below the acquisition cost of present owners would be arbitrary and confiscatory. Various factors can come into play in the valuation of specific properties singled out for expropriation. The values given by provincial assessors are usually uniform for very wide areas covering several barrios or even an entire town with the exception of the poblacion. Individual differences are never taken into account. The value of land is based on such generalities as its possible cultivation for rice, corn, coconuts, or other crops. Very often land

described as "cogonal" has been cultivated for generations. Buildings are described in terms of only two or three classes of building materials and estimates of areas are more often inaccurate than correct. Tax values can serve as guides but cannot be absolute substitutes for just compensation. LLjur To say that the owners are estopped to question the valuations made by assessors since they had the opportunity to protest is illusory. The overwhelming mass of land owners accept unquestioningly what is found in the tax declarations prepared by local assessors or municipal clerks for them. They do not even look at, much less analyze, the statements. The idea of expropriation simply never occurs until a demand is made or a case filed by an agency authorized to do so. It is violative of due process to deny to the owner the opportunity to prove that the valuation in the tax documents is unfair or wrong. And it is repulsive to basic concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court promulgated only after expert commissioners have actually viewed the property, after evidence and arguments pro and con have been presented, and after all factors and considerations essential to a fair and just determination have been judiciously evaluated. As was held in the case of Gideon v. Wainwright (93 ALR 2d, 733, 742): "In the light of these and many other prior decisions of this Court, it is not surprising that the Betts Court, when faced with the contention that 'one charged with crime, who is unable to obtain counsel' must be furnished counsel by the State,' conceded that '[E]xpressions in the opinions of this court lend color to the argument . . .' 316 U.S., at 462, 463, 86 L ed. 1602, 62 S Ct. 1252. The fact is that in deciding as it did - that 'appointment of counsel is not a fundamental right, essential to a fair trial' the Court in Betts v. Brady made an abrupt brake with its own wellconsidered precedents. In returning to these old precedents, sounder we believe than the new, we but restore constitutional principles established to achieve a fair system of justice. . . .'. We return to older and more sound precedents. This Court has the duty to formulate guiding and controlling constitutional principles, precepts, doctrines, or rules. (See Salonga v. Cruz Pano, supra). The determination of "just compensation" in eminent domain cases is a judicial function. The executive department or the legislature may make the initial determinations but when a party claims a violation of the guarantee in the Bill of Rights that private property may not be taken for public use without just compensation, no statute, decree, or executive order can mandate that its own determination shall prevail over the court's findings. Much less can the courts be precluded from looking into the "just-ness" of the decreed compensation. We, therefore, hold that P.D. No. 1533, which eliminates the court's discretion to appoint commissioners pursuant to Rule 67 of the Rules of Court, is unconstitutional and void. To hold otherwise would be to undermine the very purpose why this Court exists in the first place. WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED. The temporary restraining order issued on February 16, 1982 is LIFTED and SET ASIDE. De Knecht vs. CA* In their Motion for Reconsideration in G.R. No. 108015, the Knechts reiterate that: "ITHE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF LAW IN HOLDING THAT THE PETITION FOR ANNULMENT OF JUDGMENT IS BARRED BY RES JUDICATA; IITHE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF LAW IN UPHOLDING THE DEFENSE OF RES JUDICATA EVEN AS ITS APPLICATION INVOLVES THE SACRIFICE OF JUSTICE TO TECHNICALITY." We rule against the petitioners. In its decision, the Court of Appeals held that the Knechts had no right to intervene in Civil Case No. 7327 for lack of any legal right or interest in the property subject of expropriation. The appellate court declared that Civil Case No. 7327 was not an expropriation proceeding under Rule 67 of the Revised Rules of Court but merely a case for the fixing of just compensation. 44 The Knechts' right to the land had been foreclosed after they failed to redeem it one year after the sale at public auction. Whatever right remained on the property vanished after Civil Case No. 2961-P, the reconveyance case, was dismissed by the trial court. Since the petitions questioning the order of dismissal were likewise dismissed by the Court of Appeals and this Court, the order of dismissal became final and res judicata on the issue of ownership of the land. 45 The Knechts urge this Court, in the interest of justice, to take a second look at their case. They claim that they were deprived of their property without due process of law. They allege that they did not receive notice of their tax delinquency and that the Register of Deeds did not order them to surrender their owner's duplicate for annotation of the tax lien prior to the sale. Neither did they receive notice of the auction sale. After the sale, the certificate of sale was not annotated in their title nor in the title with the Register of Deeds. In short, they did not know of the tax delinquency and the subsequent proceedings until 1983 when they received the orders of the land registration courts in LRC Cases Nos. 2636-P and 2652-P filed by the Babieras and Sangalangs. 46 This is the reason why they were unable to redeem the property. It has been ruled that the notices and publication, as well as the legal requirements for a tax delinquency sale, are mandatory; 47 and the failure to comply therewith can invalidate the sale. 48 The prescribed notices must be sent to comply with the requirements of due process. 49 The claim of lack of notice, however, is a factual question. This Court is not a trier of facts. Moreover, this factual question had been raised repeatedly in all the previous cases filed by the Knechts. These cases have laid to rest the question of notice and all the other factual issues they raised regarding the property. Res judicata had already set in. Res judicata is a ground for dismissal of an action. 50 It is a rule that precludes parties from relitigating issues actually litigated and determined by a prior and final judgment. It pervades every well-regulated system of jurisprudence, and is based upon two grounds embodied in various maxims of the common law one, public policy and necessity, that there should be a limit to litigation; 51 and another, the individual should not be vexed twice for the same cause. 52 When a right of fact has been judicially tried and determined by a court of competent jurisdiction, or an opportunity for such trial has been given, the judgment of the court, so long as it remains unreversed, should be conclusive upon the parties and those in privity with them in law or estate. 53 To follow a contrary doctrine would subject the public peace and quiet to the will and neglect of individuals and prefer the gratification of the litigious disposition of the parties to the preservation of the public tranquility. 54 Res judicata applies when: (1) the former judgment or order is final; (2) the judgment or order is one on the merits; (3) it was rendered by a court having jurisdiction over the subject matter and the parties; (4) there is between the first and second actions, identity of parties, of subject matter and of cause of action. 55 Petitioners claim that Civil Case No. 2961-P is not res judicata on CA-G.R. SP No. 28089. They contend that there was no judgment on the merits in Civil Case No. 2961-P , i.e., one rendered after a consideration of the evidence or stipulations submitted by the parties at the trial of the case.56 They stress that Civil Case No. 2961-P was dismissed upon petitioners' failure to appear at several hearings and was based on "lack of interest."

We are not impressed by petitioners' contention. "Lack of interest" is analogous to "failure to prosecute." Section 3 of Rule 17 of the Revised Rules of Court provides: "Section 3.Failure to Prosecute. If plaintiff fails to appear at the time of the trial, or to prosecute his action for an unreasonable length of time, or to comply with these rules or any order of the court, the action may be dismissed upon motion of the defendant or upon the court's own motion. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise provided by court." An action may be dismissed for failure to prosecute in any of the following instances: (1) if the plaintiff fails to appear at the time of trial; or (2) if he fails to prosecute the action for an unreasonable length of time; or (3) if he fails to comply with the Rules of Court or any order of the court. Once a case is dismissed for failure to prosecute, this has the effect of an adjudication on the merits and is understood to be with prejudice to the filing of another action unless otherwise provided in the order of dismissal. 57 In other words, unless there be a qualification in the order of dismissal that it is without prejudice, the dismissal should be regarded as an adjudication on the merits and is with prejudice.58 Prior to the dismissal of Civil Case No. 2961-P, the Knechts were presenting their evidence. They, however, repeatedly requested for postponements and failed to appear at the last scheduled hearing. This prompted Salem to move for dismissal of the case. The court ordered thus: "ORDER It appearing that counsel for the plaintiff has been duly notified of today's hearing but despite notice failed to appear and considering that this case has been pending for quite a considerable length of time, on motion of counsel for the defendant Salem Investment joined by Atty. Jesus Paredes for the defendant City of Pasay, for apparent lack of interest of plaintiffs, let their complaint be DISMISSED. LLcd As prayed for, let this case be reset to September 29, 1988 at 8:30 in the morning for the reception of evidence of defendant's Salem Investment on its counterclaim. SO ORDERED." 59 The order of dismissal was based on the following factors: (1) pendency of the complaint for a considerable length of time; (2) failure of counsel to appear at the scheduled hearing despite notice; and (3) lack of interest of the petitioners. Under Section 3, Rule 17, a dismissal order which does not provide that it is without prejudice to the filing of another action is understood to be an adjudication on the merits. Hence, it is one with prejudice to the filing of another action. The order of dismissal was questioned before the Court of Appeals and this Court. The petitions were dismissed and the order affirming dismissal became final in February 1990. Since the dismissal order is understood to be an adjudication on the merits, then all the elements of res judicata have been complied with. Civil Case No. 2961-P is therefore res judicata on the issue of ownership of the land. The Knechts contend, however, that the facts of the case do not call for the application of res judicata because this amounts to "a sacrifice of justice to technicality." We cannot sustain this argument. It must be noted that the Knechts were given the opportunity to assail the tax sale and present their evidence on its validity in Civil Case No. 2961-P, the reconveyance case. Through their and their counsel's negligence, however, this case was dismissed. They filed for reconsideration, but their motion was denied. The Court of Appeals upheld this dismissal. We affirmed the dismissal not on the basis of a mere technicality. This Court reviewed the merits of petitioners' case and found that the Court of Appeals committed no reversible error in its questioned judgment. 60 After years of litigation and several cases raising essentially the same issues, the Knechts cannot now be allowed to avoid the effects of res judicata. 61 Neither can they be allowed to vary the form of their action or adopt a different method of presenting their case to escape the operation of the principle. 62 To grant what they seek will encourage endless litigations and forum-shopping. Hence, the Court of Appeals correctly dismissed CA-G.R. SP No. 28089. We find, however, that the Court of Appeals erred in declaring that Civil Case No. 7327 was not an expropriation case. It was precisely in the exercise of the state's power of eminent domain under B.P. Blg. 340 that expropriation proceedings were instituted against the owners of the lots sought to be expropriated. B.P. Blg. 340 did not, by itself, lay down the procedure for expropriation. The law merely described the specific properties expropriated and declared that just compensation was to be determined by the court. It designated the then Ministry of Public Works and Highways as the administrator in the "prosecution of the project." Thus, in the absence of a procedure in the law for expropriation, reference must be made to the provisions on eminent domain in Rule 67 of the Revised Rules of Court. Section 1 of Rule 67 of the Revised Rules of Court provides: "Section 1.The complaint. The right of eminent domain shall be exercised by the filing of a complaint which shall state with certainty the right and purpose of condemnation, describe the real or personal property sought to be condemned, and join as defendants all persons owning or claiming to own , or occupying, any part thereof or interest therein, showing, so far as practicable, the interest of each defendant separately. If the title to any property sought to be condemned appears to be in the Republic of the Philippines, although occupied by private individuals, or if the title is otherwise obscure or doubtful so that the plaintiff cannot with accuracy or certainty specify who are the real owners, averment to that effect may be made in the complaint." The power of eminent domain is exercised by the filing of a complaint which shall join as defendants all persons owning or claiming to own, or occupying, any part of the expropriated land or interest therein. 63 If a known owner is not joined as defendant, he is entitled to intervene in the proceeding; or if he is joined but not served with process and the proceeding is already closed before he came to know of the condemnation, he may maintain an independent suit for damages. 64 The defendants in an expropriation case are not limited to the owners of the property condemned. They include all other persons owning, occupying or claiming to own the property. When a parcel of land is taken by eminent domain, the owner of the fee is not necessarily the only person who is entitled to compensation. 65 In the American jurisdiction, the term "owner" when employed in statutes relating to eminent domain to designate the persons who are to be made parties to the proceeding, refers, as is the rule in respect of those entitled to compensation, to all those who have lawful interest in the property to be condemned, 66 including a mortgagee, 67 a lessee 68 and a vendee in possession under an executory contract. 69 Every person having an estate or interest at law or in equity in the land taken is entitled to share in the award. 70 If a person claiming an interest in the land sought to be condemned is not made a party, he is given the right to intervene and lay claim to the compensation. 71

The Knechts insist that although they were no longer the registered owners of the property at the time Civil Case No. 7327 was filed, they still occupied the property and therefore should have been joined as defendants in the expropriation proceedings. When the case was filed, all their eight (8) houses were still standing; seven (7) houses were demolished on August 29, 1990 and the last one on April 6, 1991. They claim that as occupants of the land at the time of expropriation, they are entitled to a share in the just compensation. Civil Case No. 7327, the expropriation case, was filed on May 15, 1990. Four months earlier, in January 1990, Civil Case No. 2961-P for reconveyance was dismissed with finality by this Court and judgment was entered in February 1990. The Knechts lost whatever right or colorable title they had to the property after we affirmed the order of the trial court dismissing the reconveyance case. The fact that the Knechts remained in physical possession cannot give them another cause of action and resurrect an already settled case. The Knechts' possession of the land and buildings was based on their claim of ownership, 72 not on any juridical title such as a lessee, mortgagee, or vendee. Since the issue of ownership was put to rest in Civil Case No. 2961-P, it follows that their physical possession of the property after the finality of said case was bereft of any legality and merely subsisted at the tolerance of the registered owners. 73 This tolerance ended when Salem filed Civil Case No. 85-263 for unlawful detainer against the Knechts. As prayed for, the trial court ordered their ejectment and the demolition of their remaining house. Indeed, the Knechts had no legal interest in the property by the time the expropriation proceedings were instituted. They had no right to intervene and the trial court did not err in denying their "Motion for Intervention and to Implead Additional Parties." Their intervention having been denied, the Knechts had no personality to move for the inhibition of respondent Judge Sayo from the case. The Court of Appeals therefore did not err in dismissing CA-G.R. SP No. 27817. IN VIEW WHEREOF, the Petition in G.R. No. 109234 is dismissed and the Motion for Reconsideration in G.R. No. 108015 is denied. The decisions of the Court of Appeals in CA-G.R. SP No. 27817 and CA-G.R. SP No. 28089 are affirmed. NAPOCOR vs. CA MIAA* vs. Rodriguez The petition is partly meritorious. While the instant case stemmed from the accion reinvindicatoria that Rodriguez had filed, it essentially revolves around the taking of the subject lot by the MIAA. There is "taking" when the expropriator enters private property not only for a momentary period but for a more permanent duration, or for the purpose of devoting the property to a public use in such a manner as to oust the owner and deprive him of all beneficial enjoyment thereof. 19 In this context, there was taking when the MIAA occupied a portion thereof for its expanded runway. The instant case is certainly neither unique nor of first impression. Where actual taking was made without the benefit of expropriation proceedings, and the owner sought recovery of the possession of the property prior to the filing of expropriation proceedings, the Court has invariably ruled that it is the value of the property at the time of taking that is controlling for purposes of compensation. Thus, in Commissioner of Public Highways v. Burgos , 20 wherein it took the owner of a parcel of land thirty-five (35) years before she filed a case for recovery of possession taken by the local government unit for a road-right-of-way purpose, this Court held: . . . there being no other legal provision cited which would justify a departure form the rule that just compensation is determined on the basis of the value of the property at the time of the taking thereof in expropriation by the Government, the value of the property as it is when the Government took possession of the land in question, not the increased value resulting from the passage of time which invariably brings unearned increment to landed properties, represents the true value to be paid as just compensation for the property taken. 21 In Ansaldo v. Tantuico, Jr., 22 where the owners of two (2) lots used by the Government for road widening sought compensation twenty-six (26) years after the lots were taken, the Court ruled in the same vein, thus: The sole question thus confronting the Court involves the precise time at which just compensation should be fixed, whether as of the time of actual taking of possession by the expropriating entity or, as the Ansaldos maintain, only after conveyance of title to the expropriator pursuant to expropriation proceedings duly instituted since it is only at such a time that the constitutional requirements of due process aside from those of just compensation may be fully met. 23 xxx xxx xxx It is as of the time of such a taking, to repeat, that the just compensation for the property is to be established. As stated in Republic v. Philippine National Bank, ". . . (W)hen plaintiff takes possession before the institution of the condemnation proceedings, the value should be fixed as of the time of the taking of said possession, not of filing of the complaint and the latter should be the basis for the determination of the value, when the taking of the property involved coincides with or is subsequent to, the commencement of the proceedings. Indeed, otherwise, the provision of Rule 69, Section 3, directing that compensation 'be determined as of the date of the filing of the complaint' would never be operative. As intimated in Republic v. Lara (supra), said provision contemplates 'normal circumstances,' under which 'the complaint coincides or even precedes the taking of the property by the plaintiff.'" The reason for the rule, as pointed out in Republic v. Lara, is that ". . . (W)here property is taken ahead of the filing of the condemnation proceedings, the value thereof may be enchanced by the public purpose for which it is taken; the entry by the plaintiff upon the property may have depreciated its value thereby; or, there may have been a natural increase in the value of the property from the time the complaint is filed, due to general economic conditions. The owner of private property should be compensated only for what he actually loses; it is not intended that his compensation shall extend beyond his loss or injury. And what he loses is only the actual value of his property at the time it is taken. This is the only way that compensation to be paid can be truly just; i.e.,

'just not only to the individual whose property is taken,' 'but to the public, which is to pay for it.'" Clearly, then, the value of the Ansaldos' property must be ascertained as of the year 1947, when it was actually taken, and not at the time of the filing of the expropriation suit, which, by the way, still has to be done. It is as of that time that the real measure of their loss may fairly be adjudged. The value, once fixed, shall earn interest at the legal rate until full payment is effected, conformably with other principles laid down by case law. 24 The ruling was reiterated in Eslaban v. Vda. De Onorio. 25 There, a main irrigation canal was constructed over a piece of land by the National Irrigation Administration but the property owner filed the complaint seeking compensation only nine (9) years later. The Court declared: Thus, the value of the property must be determined either as of the date of the taking of the property or the filing of the complaint, "whichever came first." Even before the new rule, however, it was already held in Commissioner of Public Highways v. Burgos that the price of the land at the time of taking, not its value after the passage of time, represents the true value to be paid as just compensation. It was, therefore, error for the Court of Appeals to rule that the just compensation to be paid to respondent should be determined as of the filing of the complaint in 1990, and not the time of its taking by the NIA in 1981, because petitioner was allegedly remiss in its obligation to pay respondent, and it was respondent who filed the complaint. In the case of Burgos, it was also the property owner who brought the action for compensation against the government after 25 years since the taking of his property for the construction of a road. IcHTCS Indeed, the value of the land may be affected by many factors. It may be enhanced on account of its taking for public use, just as it may depreciate. As observed in Republic v. Lara: [W]here property is taken ahead of the filing of the condemnation proceedings, the value thereof may be enhanced by the public purpose for which it is taken; the entry by the plaintiff upon the property may have depreciated its value thereby; or there may have been a natural increase in the value of the property from the time it is taken to the time the complaint is filed, due to general economic conditions. The owner of private property should be compensated only for what he actually loses; it is not intended that his compensation shall extend beyond his loss or injury. And what he loses is only the actual value of his property at the time it is taken. This is the only way that compensation to be paid can be truly just, i.e., "just" not only to the individual whose property is taken, "but to the public, which is to pay for it" . . . . In this case, the proper valuation for the property in question is P16,047.61 per hectare, the price level for 1982, based on the appraisal report submitted by the commission (composed of the provincial treasurer, assessor, and auditor of South Cotabato) constituted by the trial court to make an assessment of the expropriated land and fix the price thereof on a per hectare basis. 26 Per the findings of the trial court, 27 the subject lot was occupied as a runway of the MIAA starting in 1972. Thus, the value of the lot in 1972 should serve as the basis for the award of compensation to the owner. However, said value does not appear in the record. Now, the question of actual damages for the occupation of the subject lot. Undeniably, the MIAA's illegal occupation for more than twenty (20) years has resulted in pecuniary loss to Rodriguez and his predecessors-in-interest. Such pecuniary loss entitles him to adequate compensation in the form of actual or compensatory damages, 28 which in this case should be the legal interest (6%) 29 on the value of the land at the time of taking, from said point up to full payment by the MIAA. 30 This is based on the principle that interest "runs as a matter of law and follows from the right of the landowner to be placed in as good position as money can accomplish, as of the date of the taking." 31 The award of interest renders unwarranted the grant of back rentals as extended by the courts below. In Republic v. Lara, et al., 32 the Court ruled that the indemnity for rentals is inconsistent with a property owner's right to be paid legal interest on the value of the property, for if the condemnor is to pay the compensation due to the owners from the time of the actual taking of their property, the payment of such compensation is deemed to retroact to the actual taking of the property; and, hence, there is no basis for claiming rentals from the time of actual taking. 33 More explicitly, the Court held in Republic v. Garcellano 34 that: The uniform rule of this Court, however, is that this compensation must be, not in the form of rentals, but by way of 'interest from the date that the company [or entity] exercising the right of eminent domain take possession of the condemned lands, and the amounts granted by the court shall cease to earn interest only from the moment they are paid to the owners or deposited in court . . . . 35 Petitioners claim that Rodriguez is a buyer in bad faith since prior to his purchase he was aware of the MIAA's occupation of the property and therefore proceeded with the purchase in anticipation of enormous profits from the subsequent sale to the MIAA. The point is irrelevant. Regardless of whether or not Rodriguez acted in bad faith, all that he will be entitled to is the value of the property at the time of the taking, with legal interest thereon from that point until full payment of the compensation by the MIAA. Besides, assuming the question is of any consequence, the circumstances surrounding Rodriguez's purchase may not even amount to bad faith. Bad faith has been defined as a state of mind affirmatively operating with furtive design or with some motive of self-interest or ill will or for an ulterior purpose, and implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity. 36 There is nothing wrongful or dishonest in expecting to profit from one's investment. However, Rodriguez can fault but only himself for taking an obvious risk in purchasing property already being used for a public purpose. It was a self-inflicted misfortune that his investment did not generate the windfall he had expected. For ostensibly little did he know that he could not acquire more rights than the previous owners had since the government taking had taken place earlier. SCIAaT For more than twenty (20) years, the MIAA occupied the subject lot without the benefit of expropriation proceedings and without the MIAA exerting efforts to ascertain ownership of the lot and negotiating with any of the owners of the property. To our mind, these are wanton and irresponsible acts which should be suppressed and corrected. Hence, the award of exemplary damages and attorneys fees is in order. However, while Rodriguez is entitled to

such exemplary damages and attorney's fees, the award granted by the courts below should be equitably reduced. We hold that Rodriguez is entitled only to P200,000.00 as exemplary damages, and attorney's fees equivalent to one percent (1%) of the amount due. The MIAA argues that it had already expropriated the subject lot back in the 1970s. However, the Court cannot pass upon this defense, it having been brought up for the first time. Points of law, theories, issues and arguments not adequately brought to the attention of the trial court need not be, and ordinarily will not be, considered by a reviewing court as they cannot be raised for the first time on appeal. 37 Moreover, this new theory of previous expropriation is negated by the fact that petitioners negotiated with Rodriguez when the latter offered the subject property for sale to the MIAA, as evidenced by the correspondence between the parties. 38 If the MIAA already owned the property, there would be no more need to negotiate with Rodriguez; petitioners would have asserted such fact as soon as Rodriguez had offered to sell the property to them. WHEREFORE, the petition is GRANTED IN PART. The Decision of the Court of Appeals is MODIFIED as follows: a.The MIAA is ordered to pay Joaquin Rodriguez just compensation for the subject lot, the portion actually occupied by the runway consisting of or based on the value thereof at the time of taking in 1972, with interest thereon at the legal rate of six percent (6%) per annum from the time of the taking until full payment is made. For the purpose of determining said value, the case is remanded to the lower court. Said court is ordered to make the determination with deliberate dispatch; b.The award of back rentals as damages is DELETED; c.The MIAA is ordered to PAY exemplary damages in the reduced amount of P200,000.00, and attorney's fees equivalent to one percent (1%) of the amount due. No pronouncement as to costs. Republic vs. Lim

The basic issue for our resolution is whether the Republic has retained ownership of Lot 932 despite its failure to pay respondent's predecessors-in-interest the just compensation therefor pursuant to the judgment of the CFI rendered as early as May 14, 1940. Initially, we must rule on the procedural obstacle. While we commend the Republic for the zeal with which it pursues the present case, we reiterate that its urgent motion for clarification filed on July 7, 2004 is actually a second motion for reconsideration. This motion is prohibited under Section 2, Rule 52, of the 1997 Rules of Civil Procedure, as amended, which provides: "Sec. 2.Second motion for reconsideration. No second motion for reconsideration of a judgment or final resolution by the same party shall be entertained." Consequently, as mentioned earlier, we simply noted without action the motion since petitioners' petition was already denied with finality. Considering the Republic's urgent and serious insistence that it is still the owner of Lot 932 and in the interest of justice, we take another hard look at the controversial issue in order to determine the veracity of petitioner's stance. One of the basic principles enshrined in our Constitution is that no person shall be deprived of his private property without due process of law; and in expropriation cases, an essential element of due process is that there must be just compensation whenever private property is taken for public use. 7 Accordingly, Section 9, Article III, of our Constitution mandates: "Private property shall not be taken for public use without just compensation ." The Republic disregarded the foregoing provision when it failed and refused to pay respondent's predecessors-in-interest the just compensation for Lots 932 and 939. The length of time and the manner with which it evaded payment demonstrate its arbitrary highhandedness and confiscatory attitude. The final judgment in the expropriation proceedings (Civil Case No. 781) was entered on April 5, 1948. More than half of a century has passed, yet, to this day, the landowner, now respondent, has remained empty-handed. Undoubtedly, over 50 years of delayed payment cannot, in any way, be viewed as fair. This is more so when such delay is accompanied by bureaucratic hassles. Apparent fromValdehueza is the fact that respondent's predecessors-in-interest were given a "run around" by the Republic's officials and agents. In 1950, despite the benefits it derived from the use of the two lots, the National Airports Corporation denied knowledge of the claim of respondent's predecessors-in-interest. Even President Garcia, who sent a letter to the Civil Aeronautics Administration and the Secretary of National Defense to expedite the payment, failed in granting relief to them. And, on September 6, 1961, while the Chief of Staff of the Armed Forces expressed willingness to pay the appraised value of the lots, nothing happened. aIcDCH The Court of Appeals is correct in saying that Republic's delay is contrary to the rules of fair play, as "just compensation embraces not only the correct determination of the amount to be paid to the owners of the land, but also the payment for the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered 'just.'" In jurisdictions similar to ours, where an entry to the expropriated property precedes the payment of compensation, it has been held that if the compensation is not paid in a reasonable time , the party may be treated as a trespasser ab initio. 8 Corollarily, in Provincial Government of Sorsogon vs. Vda. De Villaroya , 9 similar to the present case, this Court expressed its disgust over the government's vexatious delay in the payment of just compensation, thus: "The petitioners have been waiting for more than thirty years to be paid for their land which was taken for use as a public high school. As a matter of fair procedure, it is the duty of the Government, whenever it takes property from private persons against their will, to supply all required documentation and facilitate payment of just compensation. The imposition of unreasonable requirements and vexatious delays before effecting payment is not only galling and arbitrary but a rich source of discontent with government. There should be some kind of swift and effective recourse against unfeeling and uncaring acts of middle or lower level bureaucrats." We feel the same way in the instant case. More than anything else, however, it is the obstinacy of the Republic that prompted us to dismiss its petition outright. As early as May 19, 1966, in Valdehueza, this Court mandated the Republic to pay respondent's predecessors-in-interest the sum of P16,248.40 as "reasonable market value of the two lots in question." Unfortunately, it did not comply and allowed several decades to pass without obeying this Court's mandate. Such prolonged obstinacy bespeaks of lack of respect to private rights and to the rule of law, which we cannot countenance. It is tantamount to confiscation of private property. While it is true that all private properties are subject to the need of government, and the government may take them whenever the necessity or the exigency of the occasion demands, however, the Constitution guarantees that when this governmental right of expropriation is exercised, it

shall be attended by compensation. 10 From the taking of private property by the government under the power of eminent domain, there arises an implied promise to compensate the owner for his loss. 11 Significantly, the above-mentioned provision of Section 9, Article III of the Constitution is not a grant but a limitation of power. This limiting function is in keeping with the philosophy of the Bill of Rights against the arbitrary exercise of governmental powers to the detriment of the individual's rights. Given this function, the provision should therefore be strictly interpreted against the expropriator, the government, and liberally in favor of the property owner. 12 Ironically, in opposing respondent's claim, the Republic is invoking this Court's Decision in Valdehueza, a Decision it utterly defied. How could the Republic acquire ownership over Lot 932 when it has not paid its owner the just compensation, required by law, for more than 50 years? The recognized rule is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation . Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions. In Association of Small Landowners in the Philippines, Inc. et al., vs. Secretary of Agrarian Reform , 13 thus: "Title to property which is the subject of condemnation proceedings does not vest the condemnor until the judgment fixing just compensation is entered and paid , but the condemnor's title relates back to the date on which the petition under the Eminent Domain Act, or the commissioner's report under the Local Improvement Act, is filed. . . . Although the right to appropriate and use land taken for a canal is complete at the time of entry, title to the property taken remains in the owner until payment is actually made. (Emphasis supplied.) In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to property does not pass to the condemnor until just compensation had actually been made. In fact, the decisions appear to be uniform to this effect. As early as 1838, in Rubottom v. McLure, it was held that 'actual payment to the owner of the condemned property was a condition precedent to the investment of the title to the property in the State ' albeit 'not to the appropriation of it to public use.' In Rexford v. Knight, the Court of Appeals of New York said that the construction upon the statutes was that the fee did not vest in the State until the payment of the compensation although the authority to enter upon and appropriate the land was complete prior to the payment. Kennedy further said that 'both on principle and authority the rule is . . . that the right to enter on and use the property is complete, as soon as the property is actually appropriated under the authority of law for a public use, but that the title does not pass from the owner without his consent, until just compensation has been made to him." Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that: 'If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute reassurance that no piece of land can be finally and irrevocably taken from an unwilling owner until compensation is paid . . .'" (Emphasis supplied.) Clearly, without full payment of just compensation, there can be no transfer of title from the landowner to the expropriator. Otherwise stated, the Republic's acquisition of ownership is conditioned upon the full payment of just compensation within a reasonable time. 14 Significantly, in Municipality of Bian v. Garcia 15 this Court ruled that the expropriation of lands consists of two stages, to wit: ". . . The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint" . . . ECDaTI The second phase of the eminent domain action is concerned with the determination by the court of "the just compensation for the property sought to be taken." This is done by the court with the assistance of not more than three (3) commissioners. . . . It is only upon the completion of these two stages that expropriation is said to have been completed. In Republic v. Salem Investment Corporation, 16 we ruled that, "the process is not completed until payment of just compensation." Thus, here, the failure of the Republic to pay respondent and his predecessors-in-interest for a period of 57 years rendered the expropriation process incomplete. The Republic now argues that under Valdehueza, respondent is not entitled to recover possession of Lot 932 but only to demand payment of its fair market value. Of course, we are aware of the doctrine that "non-payment of just compensation (in an expropriation proceedings) does not entitle the private landowners to recover possession of the expropriated lots." This is our ruling in the recent cases of Republic of the Philippines vs. Court of Appeals, et al., 17 and Reyes vs. National Housing Authority. 18 However, the facts of the present case do not justify its application. It bears stressing that the Republic was ordered to pay just compensation twice, the first was in the expropriation proceedings and the second, inValdehueza. Fifty-seven (57) years have passed since then. We cannot but construe the Republic's failure to pay just compensation as a deliberate refusal on its part. Under such circumstance, recovery of possession is in order. In several jurisdictions, the courts held that recovery of possession may be had when property has been wrongfully taken or is wrongfully retained by one claiming to act under the power of eminent domain 19 or where a rightful entry is made and the party condemning refuses to pay the compensation which has been assessed or agreed upon; 20 or fails or refuses to have the compensation assessed and paid. 21 The Republic also contends that where there have been constructions being used by the military, as in this case, public interest demands that the present suit should not be sustained. It must be emphasized that an individual cannot be deprived of his property for the public convenience. 22 In Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform, 23 we ruled: "One of the basic principles of the democratic system is that where the rights of the individual are concerned, the end does not justify the means. It is not enough that there be a valid objective; it is also necessary that the means employed to pursue

it be in keeping with the Constitution. Mere expediency will not excuse constitutional shortcuts. There is no question that not even the strongest moral conviction or the most urgent public need, subject only to a few notable exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that a person invoking a right guaranteed under Article III of the Constitution is a majority of one even as against the rest of the nation who would deny him that right. The right covers the person's life, his liberty and his property under Section 1 of Article III of the Constitution. With regard to his property, the owner enjoys the added protection of Section 9, which reaffirms the familiar rule that private property shall not be taken for public use without just compensation." The Republic's assertion that the defense of the State will be in grave danger if we shall order the reversion of Lot 932 to respondent is an overstatement. First, Lot 932 had ceased to operate as an airport. What remains in the site is just the National Historical Institute's marking stating that Lot 932 is the "former location of Lahug Airport." And second, there are only thirteen (13) structures located on Lot 932, eight (8) of which are residence apartments of military personnel. Only two (2) buildings are actually used as training centers. Thus, practically speaking, the reversion of Lot 932 to respondent will only affect a handful of military personnel. It will not result to "irreparable damage" or "damage beyond pecuniary estimation," as what the Republic vehemently claims. ETCcSa We thus rule that the special circumstances prevailing in this case entitle respondent to recover possession of the expropriated lot from the Republic. Unless this form of swift and effective relief is granted to him, the grave injustice committed against his predecessors-ininterest, though no fault or negligence on their part, will be perpetuated. Let this case, therefore, serve as a wake-up call to the Republic that in the exercise of its power of eminent domain, necessarily in derogation of private rights, it must comply with the Constitutional limitations. This Court, as the guardian of the people's right, will not stand still in the face of the Republic's oppressive and confiscatory taking of private property, as in this case. At this point, it may be argued that respondent Vicente Lim acted in bad faith in entering into a contract of mortgage with Valdehueza and Panerio despite the clear annotation in TCT No. 23934 that Lot 932 is "subject to the priority of the National Airports Corporation [to acquire said parcels of land] . . . upon previous payment of a reasonable market value ." The issue of whether or not respondent acted in bad faith is immaterial considering that the Republic did not complete the expropriation process. In short, it failed to perfect its title over Lot 932 by its failure to pay just compensation. The issue of bad faith would have assumed relevance if the Republic actually acquired title over Lot 932. In such a case, even if respondent's title was registered first, it would be the Republic's title or right of ownership that shall be upheld. But now, assuming that respondent was in bad faith can such fact vest upon the Republic a better title over Lot 932? We believe not. This is because in the first place, the Republic has no title to speak of. At any rate, assuming that respondent had indeed knowledge of the annotation, still nothing would have prevented him from entering into a mortgage contract involving Lot 932 while the expropriation proceeding was pending. Any person who deals with a property subject of an expropriation does so at his own risk, taking into account the ultimate possibility of losing the property in favor of the government. Here, the annotation merely served as a caveat that the Republic had a preferential right to acquire Lot 932 upon its payment of a "reasonable market value." It did not proscribe Valdehueza and Panerio from exercising their rights of ownership including their right to mortgage or even to dispose of their property. In Republic vs. Salem Investment Corporation, 24 we recognized the owner's absolute right over his property pending completion of the expropriation proceeding, thus: "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. 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. It bears emphasis that when Valdehueza and Panerio mortgaged Lot 932 to respondent in 1964, they were still the owners thereof and their title had not yet passed to the petitioner Republic. In fact, it never did. Such title or ownership was rendered conclusive when we categorically ruled in Valdehueza that: "It is true that plaintiffs are still the registered owners of the land, there not having been a transfer of said lots in favor of the Government ." For respondent's part, it is reasonable to conclude that he entered into the contract of mortgage with Valdehueza and Panerio fully aware of the extent of his right as a mortgagee. A mortgage is merely an accessory contract intended to secure the performance of the principal obligation. One of its characteristics is that it is inseparable from the property. It adheres to the property regardless of who its owner may subsequently be. 25 Respondent must have known that even if Lot 932 is ultimately expropriated by the Republic, still, his right as a mortgagee is protected. In this regard, Article 2127 of the Civil Code provides: "Art. 2127.The mortgage extends to the natural accessions, to the improvements, growing fruits, and the rents or income not yet received when the obligation becomes due, and to the amount of the indemnity granted or owing to the proprietor from the insurers of the property mortgaged, or in virtue of expropriation for public use, with the declarations, amplifications, and limitations established by law, whether the estate remains in the possession of the mortgagor or it passes in the hands of a third person. HcSDIE In summation, while the prevailing doctrine is that "the non-payment of just compensation does not entitle the private landowner to recover possession of the expropriated lots, 26 however, in cases where the government failed to pay just compensation within five (5) 27 years from the finality of the judgment in the expropriation proceedings , the owners concerned shall have the right to recover possession of their property. This is in consonance with the principle that "the government cannot keep the property and dishonor the judgment." 28 To be sure, the five-year period limitation will encourage the government to pay just compensation punctually. This is in keeping with justice and equity. After all, it is the duty of the government, whenever it takes property from private persons against their will, to facilitate the payment of just compensation. InCosculluela v. Court of Appeals, 29 we defined just compensation as not only the correct determination of the amount to be paid to the property owner but also the payment of the property within a reasonable time. Without prompt payment, compensation cannot be considered "just." WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No. 72915 is AFFIRMED in toto. The Republic's motion for reconsideration of our Resolution dated March 1, 2004 is DENIED with FINALITY. No further pleadings will be allowed. Land Bank of the Phils. Vs DAR*

Ruling of the Appellate Court By Decision dated December 14, 2007, as effectively reiterated in a Resolution of June 3, 2008, the CA found the allegations on grave abuse of discretion on the part of the DARAB to be baseless and accordingly denied the LBP's petition for certiorari, disposing:

the landowner, the LBP and other interested parties to submit evidence as to the just compensation for the land, within fifteen (15) days from the receipt of the notice. x x x (e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries. (Emphasis supplied.) Sec. 18. Valuation and Mode of Payment. - The LBP shall compensate the landowner the amount as may be agreed upon by the landowner and the DAR and the LBP in accordance [17] with the criteria provided for in Sections 16 and 17, and other provisions hereof or as may be finally determined by the court as the just compensation for the land. In Land Bank of the Philippines v. Court of Appeals , the Court stressed the need to allow the landowners to withdraw immediately the amount deposited in their behalf, pending final determination of what is just compensation for their land, thus:

WHEREFORE, the petition is DENIED. The assailed Orders of the DARAB dated January 2, 2006 and March 14, 2006 are hereby AFFIRMED in toto. Hence, this petition for review, on the following legal issue:

WHETHER OR NOT THE [DARAB] CAN ORDER THE RELEASE TO THE LANDOWNERS, BY WAY OF EXECUTION PENDING APPEAL, OF THE INCREMENTAL DIFFERENCE OF A LANDBANK RECOMPUTATION UPHELD IN A DECISION OF THE DAR ADJUDICATOR A QUO WITHIN THE PURVIEW OF SECTION 16, ET SEQ. OF THE CARP LAW (R.A. 6657) AND ITS IMPLEMENTING RULES. In the main, it is the LBP's posture that the DARAB cannot validly order the release of the incremental difference (amended valuation amount of PhP 3,426,153.80 - original valuation amount of PhP 786,564.46 = incremental amount or difference) by way of execution pending appeal inasmuch as the amended valuation has yet to be approved by DAR. Without such approval, so LBP's argument goes, there is really no amended valuation within the ambit of Sec. 16 of the CARP Law, which contemplates of a DAR-LBP valuation. In the absence, thus, of [11] a duly DAR-approved valuation, there is no subject for execution. And at any event, LBP also argues that it has no statutory duty to release any amount resulting from any subsequent reevaluation based on an order which is not yet final and executory. [12]

The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and determination of just compensation under Section 18 is unacceptable. To withhold the right of the landowners to appropriate the amounts already deposited in their behalf as compensation for their propertiessimply because they rejected the DAR's valuation, and notwithstanding that they have already been deprived of the possession of such properties is an oppressive exercise of eminent domain. The irresistible expropriation of private respondents' properties was painful enough. But DAR rubbed it in all the more by withholding that which rightfully belongs to private respondents in exchange for the taking x x x. This is misery twice bestowed on private respondents, which the Court must rectify. Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and final compensation under Section 18 for purposes of exercising the landowners' right to appropriate the same. The immediate effect in both situations is the same, the landowner is deprived of the use and possession of his property for which he should be fairly and immediately compensated.[18] (Emphasis ours.) The LBP, in a bid to stall further the Adazas' claim to the difference of the new and original valuation amounts, would foist the argument that the sum which the CARP Law requires it to set aside and which the landowner may withdraw is the amount corresponding to the LBPDAR valuation. LBP adds, however, that in the instant case, the DAR has yet to approve the new valuation. The Court may accord cogency to LBP's argument, but for the fact that the Provincial Adjudicator a quo and eventually the DARAB affirmed the new property valuation made by the LBP. By virtue of such affirmatory action, the DAR has, in effect, approved the PhP 3,426,153.80-LBP valuation, DARAB being the adjudicating arm of DAR. [19] Lest it be overlooked, the DARAB has primary jurisdiction to adjudicate all agrarian disputes, inclusive of controversies relating to compensation of lands under the CARP Law,[20] as the determination of just compensation is essentially a judicial function. [21] As aptly observed by the DARAB, there is no way that such amended valuation would go down as it is the landowners who have exhibited opposition to the valuation. The LBP's lament about the impropriety of what amounts to the DARAB allowing execution pending appeal without requiring the Adazas to post a bond does not persuade. Under Rule XX, Section 2 of the 2003 DARAB Rules of Procedure,[22] the DARAB may grant a motion to execute an order or decision pending appeal upon meritorious grounds. To the DARAB, "there is no more ground more meritorious than the [Adazas'] agony of waiting for a long period of time to have their properties properly valued."[23]We cannot agree more. The length of time that the Adazas have been deprived of their property without receiving their just due on a rather simple issue of just compensation will suffice to justify the exercise by DARAB of its discretion to allow execution pending appeal. To paraphrase what we said in Apo Fruits Corporation v. Court of Appeals ,[24]allowing the taking of the landowners' property and leaving them empty-handed while government withholds compensation are undoubtedly oppressive. On the matter of allowing execution pending appeal without requiring the Adazas to put up a bond, we cite with approval what the DARAB sensibly wrote on that regard:

Our Ruling The petition is without merit. Three points need to be emphasized at the outset. First, the amount of PhP 3,426,153.80 the Adazas want to be released pending appeal, or pending final determination of just compensation, to be precise, was arrived at by LBP, its re-evaluation efforts taken pursuant to Executive Order No. 405,[13] Series of 1990, Sec. 1 of which reads:

SECTION 1. The [LBP] shall be primarily responsible for the determination of the land valuation and compensation for all private lands suitable for agriculture under the Voluntary Offer to Sell (VOS) or Compulsory Acquisition (CA) arrangement as governed by [RA] 6657. The [DAR] shall make use of the determination of the land valuation and compensation by the [LBP] in the performance of functions. After effecting the transfer of titles from the landowner to the Republic of the Philippines, the [LBP] shall inform the DAR of such fact in order that the latter may proceed with the distribution of the lands to the qualified agrarian reform beneficiaries x x x. Second, the LBP, no less, had asked the PARAD to adopt LBP's recomputed value of PhP 3,426,153.80 as just compensation for the subject property. And third, the Adazas' landholding had already been distributed before full payment of just compensation could be effected. In fact, the Adazas have been deprived of the beneficial use and ownership of their landholding since 1992 and have received only PhP 786,564.46 for their 278.40-hectare CARP-covered lands.[14] In light of the foregoing considerations, it is but just and proper to allow, with becoming dispatch, withdrawal of the revised compensation amount, albeit protested. The concept of just compensation contemplates of just and timely payment; it embraces not only the correct determination of the amount to be paid to the landowner, but also the payment of the land within a reasonable time from its taking.[15] Without prompt payment, compensation cannot, as Land Bank of the Philippines v. Court of Appeals [16]instructs, be considered "just," for the owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for years before actually receiving the amount necessary to cope with his loss. The LBP's argument that by allowing withdrawal of the incremental amount, the government may be placed at a losing end, citing the possibility that the recomputed amount may be more than the just compensable value of the 278.40 hectares taken, is specious. For one, as an exercise of police power to complement eminent domain, the forced taking of private property under the CARP puts the landowners, and not the government, in a situation where the odds are already stacked against them. One thing going for the landowners, though, is that they cannot, as a matter of law, be compelled to accept the LBP's valuation of their expropriated land and/or accept DAR's offer by way of compensation. And for another, the stated risk which the DAR or the government will allegedly be exposed to if immediate withdrawal of the rejected compensation is allowed is at the moment pure speculation. The DARAB, with its presumptive expertise in agrarian land valuation, even dismissed as "very remote" the possibility of the LBP-amended valuation exceeding the value of the subject landholding using the valuation criteria and formulae prescribed under the law. It may be well to explicate at this juncture the nature of the right of landowners to the amount set aside for their land placed under CARP. Under the CARP Law, the landowners are entitled to withdraw the amount deposited in their behalf pending the final resolution of the case involving the final valuation of his property. This entitlement remains regardless of whether the amount is provisional, as contemplated in Sec. 16(d) and (e) of RA 6657 or the final compensation as provided under Sec. 18 of the same law. The provisions referred to respectively provide:

As [regards] the posting of bond, the office of bond is for the payment of damages which the aggrieved party may suffer in the event the final order or decision is reversed on appeal. As stated in the preceding paragraph the possibility of having the LBP amended valuation be reversed is very remote. Thus, this Board is of the opinion that posting of bond is not necessary for the execution pending appeal of the 23 May 2005 decision. Besides the amount to be released is the amount computed by LBP itself. WHEREFORE, this petition is hereby DENIED. Hon. Eusebio vs. Luis Hence, this petition where it is alleged that: I.PUBLIC RESPONDENT COURT ERRED IN UPHOLDING THE RULING OF THE LOWER COURT DESPITE THE APPARENT LACK OF JURISDICTION BY REASON OF PRESCRIPTION OF PRIVATE RESPONDENTS' CLAIM FOR JUST COMPENSATION; II.PUBLIC RESPONDENT COURT ERRED IN FIXING THE FAIR AND REASONABLE COMPENSATION FOR RESPONDENTS' PROPERTY AT P5,000.00 PER SQUARE METER DESPITE THE GLARING FACT THAT AT THE TIME OF TAKING IN THE YEAR 1980 THE FAIR MARKET VALUE WAS PEGGED BY AN APPRAISAL COMMITTEE AT ONE HUNDRED SIXTY PESOS (PHP160.00); III.PUBLIC RESPONDENT COURT ERRED IN UPHOLDING THE JUDGMENT OF THE LOWER COURT AWARDING THE AMOUNT OF P793,000.00 AS REASONABLE RENTAL FOR THE USE OF RESPONDENTS' PROPERTY IN SPITE OF THE FACT THAT THE SAME WAS CONVERTED INTO A PUBLIC ROAD BY A PREVIOUSLY ELECTED MUNICIPAL MAYOR WITHOUT RESPONDENTS' REGISTERING ANY COMPLAINT OR PROTEST FOR THE TAKING AND DESPITE THE FACT THAT SUCH TAKING DID NOT PERSONALLY BENEFIT THE PETITIONERS BUT THE PUBLIC AT LARGE; AND IV.PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE P200,000.00 AWARD FOR ATTORNEY'S FEES TO THE PRIVATE RESPONDENTS' COUNSEL DESPITE THE ABSENCE OF NEGLIGENCE OR

Sec. 16. Procedure for Acquisition of Private Lands. - For purposes of acquisition of private lands, the following procedures shall be followed: x x x x

(d) In case of rejection [of the offer of DAR to pay a corresponding value in accordance with the valuation set forth in Section 17 and 18] or failure to reply, the DAR shall conduct summary administrative proceedings to determine the compensation for the land requiring

INACTION ON THE PART OF PETITIONERS RELATIVE TO THE INSTANT CLAIM FOR JUST COMPENSATION. At the outset, petitioners must be disabused of their belief that respondents' action for recovery of their property, which had been taken for public use, or to claim just compensation therefor is already barred by prescription. In Republic of the Philippines v. Court of Appeals, 5 the Court emphasized "that where private property is taken by the Government for public use without first acquiring title thereto either through expropriation or negotiated sale, the owner's action to recover the land or the value thereof does not prescribe". The Court went on to remind government agencies not to exercise the power of eminent domain with wanton disregard for property rights as Section 9, Article III of the Constitution provides that "private property shall not be taken for public use without just compensation". 6 The remaining issues here are whether respondents are entitled to regain possession of their property taken by the city government in the 1980's and, in the event that said property can no longer be returned, how should just compensation to respondents be determined. SHADEC These issues had been squarely addressed in Forfom Development Corporation v. Philippine National Railways, 7 which is closely analogous to the present case. In said earlier case, the Philippine National Railways (PNR) took possession of the private property in 1972 without going through expropriation proceedings. The San Pedro-Carmona Commuter Line Project was then implemented with the installation of railroad facilities on several parcels of land, including that of petitioner Forfom. Said owner of the private property then negotiated with PNR as to the amount of just compensation. No agreement having been reached, Forfom filed a complaint for Recovery of Possession of Real Property and/or Damages with the trial court sometime in August 1990. In said case, the Court held that because the landowner did not act to question the lack of expropriation proceedings for a very long period of time and even negotiated with the PNR as to how much it should be paid as just compensation, said landowner is deemed to have waived its right and is estopped from questioning the power of the PNR to expropriate or the public use for which the power was exercised. It was further declared therein that: . . . recovery of possession of the property by the landowner can no longer be allowed on the grounds of estoppel and, more importantly, of public policy which imposes upon the public utility the obligation to continue its services to the public. The non-filing of the case for expropriation will not necessarily lead to the return of the property to the landowner. What is left to the landowner is the right of compensation. . . . It is settled that non-payment of just compensation does not entitle the private landowners to recover possession of their expropriated lot. 8 Just like in the Forfom case, herein respondents also failed to question the taking of their property for a long period of time (from 1980 until the early 1990's) and, when asked during trial what action they took after their property was taken, witness Jovito Luis, one of the respondents, testified that "when we have an occasion to talk to Mayor Caruncho we always asked for compensation". 9 It is likewise undisputed that what was constructed by the city government on respondents' property was a road for public use, namely, A. Sandoval Avenue in Pasig City. Clearly, as inForfom, herein respondents are also estopped from recovering possession of their land, but are entitled to just compensation. Now, with regard to the trial court's determination of the amount of just compensation to which respondents are entitled, the Court must strike down the same for being contrary to established rules and jurisprudence. The prevailing doctrine on judicial determination of just compensation is that set forth in Forfom. 10 Therein, the Court ruled that even if there are no expropriation proceedings instituted to determine just compensation, the trial court is still mandated to act in accordance with the procedure provided for in Section 5, Rule 67 of the 1997 Rules of Civil Procedure, requiring the appointment of not more than three competent and disinterested commissioners to ascertain and report to the court the just compensation for the subject property. The Court reiterated its ruling in National Power Corporation v. Dela Cruz 11 that "trial with the aid of commissioners is a substantial right that may not be done away with capriciously or for no reason at all". 12 It was also emphasized therein that although ascertainment of just compensation is a judicial prerogative, the commissioners' findings may only be disregarded or substituted with the trial court's own estimation of the property's value only if the commissioners have applied illegal principles to the evidence submitted to them, where they have disregarded a clear preponderance of evidence, or where the amount allowed is either grossly inadequate or excessive. Thus, the Court concluded in Forfom that: cda The judge should not have made a determination of just compensation without first having appointed the required commissioners who would initially ascertain and report the just compensation for the property involved. This being the case, we find the valuation made by the trial court to be ineffectual, not having been made in accordance with the procedure provided for by the rules. 13 Verily, the determination of just compensation for property taken for public use must be done not only for the protection of the landowners' interest but also for the good of the public. In Republic v. Court of Appeals, 14 the Court explained as follows: The concept of just compensation, however, does not imply fairness to the property owner alone. Compensation must be just not only to the property owner, but also to the public which ultimately bears the cost of expropriation . 15 It is quite clear that the Court, in formulating and promulgating the procedure provided for in Sections 5 and 6, Rule 67, found this to be the fairest way of arriving at the just compensation to be paid for private property taken for public use. With regard to the time as to when just compensation should be fixed, it is settled jurisprudence that where property was taken without the benefit of expropriation proceedings, and its owner files an action for recovery of possession thereof before the commencement of expropriation proceedings, it is the value of the property at the time of taking that is controlling. 16 Explaining the reason for this rule in Manila International Airport Authority v. Rodriguez, 17 the Court, quoting Ansaldo v. Tantuico, Jr., 18 stated, thus: The reason for the rule, as pointed out in Republic v. Lara, is that . . . [w]here property is taken ahead of the filing of the condemnation proceedings, the value thereof may be enchanced by the public purpose for which it is taken; the entry by the plaintiff upon the property may have depreciated its value thereby; or, there may have been a natural increase in the value of the property from the time the complaint is filed, due to general economic conditions. The owner of private property should be compensated only for what he actually loses; it is not intended that his compensation shall extend beyond his loss or injury. And what he loses is only the actual value of his property at the time it is taken. This is the only way that compensation to

be paid can be truly just; i.e., 'just not only to the individual whose property is taken', 'but to the public, which is to pay for it'. 19 In this case, the trial court should have fixed just compensation for the property at its value as of the time of taking in 1980, but there is nothing on record showing the value of the property at that time. The trial court, therefore, clearly erred when it based its valuation for the subject land on the price paid for properties in the same location, taken by the city government only sometime in the year 1994. DEHaTC However, in taking respondents' property without the benefit of expropriation proceedings and without payment of just compensation, the City of Pasig clearly acted in utter disregard of respondents' proprietary rights. Such conduct cannot be countenanced by the Court. For said illegal taking, the City of Pasig should definitely be held liable for damages to respondents. Again, in Manila International Airport Authority v. Rodriguez,20 the Court held that the government agency's illegal occupation of the owner's property for a very long period of time surely resulted in pecuniary loss to the owner. The Court held as follows: Such pecuniary loss entitles him to adequate compensation in the form of actual or compensatory damages, which in this case should be the legal interest (6%) on the value of the land at the time of taking, from said point up to full payment by the MIAA. This is based on the principle that interest "runs as a matter of law and follows from the right of the landowner to be placed in as good position as money can accomplish, as of the date of the taking". The award of interest renders unwarranted the grant of back rentals as extended by the courts below. In Republic v. Lara, et al., the Court ruled that the indemnity for rentals is inconsistent with a property owner's right to be paid legal interest on the value of the property, for if the condemnor is to pay the compensation due to the owners from the time of the actual taking of their property, the payment of such compensation is deemed to retroact to the actual taking of the property; and, hence, there is no basis for claiming rentals from the time of actual taking. More explicitly, the Court held in Republic v. Garcellano that: The uniform rule of this Court, however, is that this compensation must be, not in the form of rentals, but by way of 'interest from the date that the company [or entity] exercising the right of eminent domain take possession of the condemned lands, and the amounts granted by the court shall cease to earn interest only from the moment they are paid to the owners or deposited in court . . . . xxx xxx xxx For more than twenty (20) years, the MIAA occupied the subject lot without the benefit of expropriation proceedings and without the MIAA exerting efforts to ascertain ownership of the lot and negotiating with any of the owners of the property. To our mind, these are wanton and irresponsible acts which should be suppressed and corrected. Hence, the award of exemplary damages and attorneys fees is in order. However, while Rodriguez is entitled to such exemplary damages and attorney's fees, the award granted by the courts below should be equitably reduced. We hold that Rodriguez is entitled only to P200,000.00 as exemplary damages, andattorney's fees equivalent to one percent (1%) of the amount due. 21 Lastly, with regard to the liability of petitioners Vicente P. Eusebio, Lorna A. Bernardo, and Victor Endriga all officials of the city government the Court cannot uphold the ruling that said petitioners are jointly liable in their personal capacity with the City of Pasig for payments to be made to respondents. There is a dearth of evidence which would show that said petitioners were already city government officials in 1980 or that they had any involvement whatsoever in the illegal taking of respondents' property. Thus, any liability to respondents is the sole responsibility of the City of Pasig. ADHcTE IN VIEW OF THE FOREGOING, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals dated November 28, 2003 is MODIFIED to read as follows: 1.The valuation of just compensation and award of back rentals made by the Regional Trial Court of Pasig City, Branch 155 in Civil Case No. 65937 are hereby SET ASIDE. The City of Pasig, represented by its dulyauthorized officials, is DIRECTED to institute the appropriate expropriation action over the subject parcel of land within fifteen (15) days from finality of this Decision, for the proper determination of just compensation due to respondents, with interest at the legal rate of six (6%) percent per annum from the time of taking until full payment is made. 2.The City of Pasig is ORDERED to pay respondents the amounts of P200,000.00 as exemplary damages and P200,000.00 as attorney's fees. Apo Fruits Corp*. vs. Land Bank The Court's Ruling We find the petitioners' arguments meritorious and accordingly GRANT the present motion for reconsideration. Just compensation a Basic Limitation on the State's Power of Eminent Domain At the heart of the present controversy is the Third Division's December 19, 2007 Resolution which held that the petitioners are not entitled to 12% interest on the balance of the just compensation belatedly paid by the LBP. In the presently assailed December 4, 2009 Resolution, we affirmed the December 19, 2007 Resolution's findings that: (a) the LBP deposited "pertinent amounts" in favor of the petitioners within fourteen months after they filed their complaint for determination of just compensation; and (b) the LBP had already paid the petitioners P411,769,168.32. We concluded then that these circumstances refuted the petitioners' assertion of unreasonable delay on the part of the LBP. A re-evaluation of the circumstances of this case and the parties' arguments, viewed in light of the just compensation requirement in the exercise of the State's inherent power of eminent domain, compels us to re-examine our findings and conclusions. Eminent domain is the power of the State to take private property for public use. 3 It is an inherent power of State as it is a power necessary for the State's existence; it is a power the State cannot do without. 4 As an inherent power, it does not need at all to be embodied in the Constitution; if it is mentioned at all, it is solely for purposes of limiting what is otherwise an unlimited power. The limitation is found in the Bill of Rights 5 that part of the

Constitution whose provisions all aim at the protection of individuals against the excessive exercise of governmental powers. Section 9, Article III of the 1987 Constitution (which reads "No private property shall be taken for public use without just compensation.") provides two essential limitations to the power of eminent domain, namely, that (1) the purpose of taking must be for public use and (2) just compensation must be given to the owner of the private property. cCSDaI It is not accidental that Section 9 specifies that compensation should be "just" as the safeguard is there to ensure a balance property is not to be taken for public use at the expense of private interests; the public, through the State, must balance the injury that the taking of property causes through compensation for what is taken, value for value. Nor is it accidental that the Bill of Rights is interpreted liberally in favor of the individual and strictly against the government. The protection of the individual is the reason for the Bill of Rights' being; to keep the exercise of the powers of government within reasonable bounds is what it seeks. 6 The concept of "just compensation" is not new to Philippine constitutional law, 7 but is not original to the Philippines; it is a transplant from the American Constitution. 8 It found fertile application in this country particularly in the area of agrarian reform where the taking of private property for distribution to landless farmers has been equated to the "public use" that the Constitution requires. In Land Bank of the Philippines v. Orilla, 9a valuation case under our agrarian reform law, this Court had occasion to state: Constitutionally, "just compensation" is the sum equivalent to the market value of the property, broadly described as the price fixed by the seller in open market in the usual and ordinary course of legal action and competition, or the fair value of the property as between the one who receives and the one who desires to sell, it being fixed at the time of the actual taking by the government. Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. It has been repeatedly stressed by this Court that the true measure is not the taker's gain but the owner's loss. The word "just" is used to modify the meaning of the word "compensation" to convey the idea that the equivalent to be given for the property to be taken shall be real, substantial, full and ample. 10 [Emphasis supplied.] In the present case, while the DAR initially valued the petitioners' landholdings at a total of P251,379,104.02, 11 the RTC, acting as a special agrarian court, determined the actual value of the petitioners' landholdings to be P1,383,179,000.00. This valuation, a finding of fact, has subsequently been affirmed by this Court, and is now beyond question. In eminent domain terms, this amount is the "real, substantial, full and ample" compensation the government must pay to be "just" to the landowners. Significantly, this final judicial valuation is far removed from the initial valuation made by the DAR; their values differ by P1,131,799,897.00 in itself a very substantial sum that is roughly four times the original DAR valuation. We mention these valuations as they indicate to us how undervalued the petitioners' lands had been at the start, particularly at the time the petitioners' landholdings were "taken". This reason apparently compelled the petitioners to relentlessly pursue their valuation claims all they way up to the level of this Court. While the LBP deposited the total amount of P71,891,256.62 into the petitioners' accounts (P26,409,549.86 for AFC and P45,481,706.76 for HPI) at the time the landholdings were taken, these amounts were mere partial payments that only amounted to 5% of the P1,383,179,000.00 actual value of the expropriated properties. We point this aspect out to show that the initial payments made by the LBP when the petitioners' landholdings were taken, although promptly withdrawn by the petitioners, could not by any means be considered a fair exchange of values at the time of taking; in fact, the LBP's actual deposit could not be said to be substantial even from the original LBP valuation of P251,379,103.90.IaEASH Thus, the deposits might have been sufficient for purposes of the immediate taking of the landholdings but cannot be claimed as amounts that would excuse the LBP from the payment of interest on the unpaid balance of the compensation due. As discussed at length below, they were not enough to compensate the petitioners for the potential income the landholdings could have earned for them if no immediate taking had taken place. Under the circumstances, the State acted oppressively and was far from "just" in their position to deny the petitioners of the potential income that the immediate taking of their properties entailed. Just Compensation from the Prism of the Element of Taking. Apart from the requirement that compensation for expropriated land must be fair and reasonable, compensation, to be "just," must also be made without delay. 12 Without prompt payment, compensation cannot be considered "just" if the property is immediately taken as the property owner suffers the immediate deprivation of both his land and its fruits or income. This is the principle at the core of the present case where the petitioners were made to wait for more than a decade after the taking of their property before they actually received the full amount of the principal of the just compensation due them. 13 What they have not received to date is the income of their landholdings corresponding to what they would have received had no uncompensated taking of these lands been immediately made. This income, in terms of the interest on the unpaid principal, is the subject of the current litigation. We recognized in Republic v. Court of Appeals 14 the need for prompt payment and the necessity of the payment of interest to compensate for any delay in the payment of compensation for property already taken. We ruled in this case that: The constitutional limitation of "just compensation" is considered to be the sum equivalent to the market value of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal action and competition or the fair value of the property as between one who receives, and one who desires to sell, i[f] fixed at the time of the actual taking by the government. Thus, if property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interest[s] on its just value to be computed from the time the property is taken to the time when compensation is actually paid or deposited with the court. In fine, between the taking of the property and the actual payment, legal interest[s] accrue in order to place the owner in a position as good as (but not better than) the position he was in before the taking occurred. 15 [Emphasis supplied.] Aside from this ruling, Republic notably overturned the Court's previous ruling in National Power Corporation v. Angas 16 which held that just compensation due for expropriated properties is not a loan or forbearance of money but indemnity for damages for the delay in payment; since the interest involved is in the nature of damages rather than earnings from loans, then Art. 2209 of the Civil Code, which fixes legal interest at 6%, shall apply. In Republic, the Court recognized that the just compensation due to the landowners for their expropriated property amounted to an effective forbearance on the part of the State. Applying the Eastern Shipping Lines ruling, 17 the Court fixed the applicable interest

rate at 12% per annum, computed from the time the property was taken until the full amount of just compensation was paid, in order to eliminate the issue of the constant fluctuation and inflation of the value of the currency over time. In the Court's own words: The Bulacan trial court, in its 1979 decision, was correct in imposing interest[s] on the zonal value of the property to be computed from the time petitioner instituted condemnation proceedings and "took" the property in September 1969. This allowance of interest on the amount found to be the value of the property as of the time of the taking computed, being an effective forbearance, at 12% per annum should help eliminate the issue of the constant fluctuation and inflation of the value of the currency over time. 18 [Emphasis supplied.] CAIHTE We subsequently upheld Republic's 12% per annum interest rate on the unpaid expropriation compensation in the following cases: Reyes v. National Housing Authority, 19 Land Bank of the Philippines v. Wycoco, 20 Republic v. Court of Appeals , 21 Land Bank of the Philippines v. Imperial, 22 Philippine Ports Authority v. Rosales-Bondoc, 23 and Curata v. Philippine Ports Authority. 24 These were the established rulings that stood before this Court issued the currently assailed Resolution of December 4, 2009. These would be the rulings this Court shall reverse and deestablish if we maintain and affirm our ruling deleting the 12% interest on the unpaid balance of compensation due for properties already taken. Under the circumstances of the present case, we see no compelling reason to depart from the rule that Republic firmly established. Let it be remembered that shorn of its eminent domain and social justice aspects, what the agrarian land reform program involves is the purchase by the government, through the LBP, of agricultural lands for sale and distribution to farmers. As a purchase, it involves an exchange of values the landholdings in exchange for the LBP's payment. In determining the just compensation for this exchange, however, the measure to be borne in mind is not the taker's gain but the owner's loss 25 since what is involved is the takeover of private property under the State's coercive power . As mentioned above, in the value-for-value exchange in an eminent domain situation, the State must ensure that the individual whose property is taken is not shortchanged and must hence carry the burden of showing that the "just compensation" requirement of the Bill of Rights is satisfied. The owner's loss, of course, is not only his property but also its income-generating potential. Thus, when property is taken, full compensation of its value must immediately be paid to achieve a fair exchange for the property and the potential income lost. The just compensation is made available to the property owner so that he may derive income from this compensation, in the same manner that he would have derived income from his expropriated property. If full compensation is not paid for property taken, then the State must make up for the shortfall in the earning potential immediately lost due to the taking, and the absence of replacement property from which income can be derived; interest on the unpaid compensation becomes due as compliance with the constitutional mandate on eminent domain and as a basic measure of fairness. In the context of this case, when the LBP took the petitioners' landholdings without the corresponding full payment, it became liable to the petitioners for the income the landholdings would have earned had they not immediately been taken from the petitioners. What is interesting in this interplay, under the developments of this case, is that the LBP, by taking landholdings without full payment while holding on at the same time to the interest that it should have paid, effectively used or retained funds that should go to the landowners and thereby took advantage of these funds for its own account. From this point of view, the December 19, 2007 Resolution deleting the award of 12% interest is not only patently and legally wrong, but is also morally unconscionable for being grossly unfair and unjust. If the interest on the just compensation due in reality the equivalent of the fruits or income of the landholdings would have yielded had these lands not been taken would be denied, the result is effectively a confiscatory action by this Court in favor of the LBP. We would be allowing the LBP, for twelve long years, to have free use of the interest that should have gone to the landowners. Otherwise stated, if we continue to deny the petitioners' present motion for reconsideration, we would illogically and without much thought to the fairness that the situation demands uphold the interests of the LBP, not only at the expense of the landowners but also that of substantial justice as well. Lest this Court be a party to this monumental unfairness in a social program aimed at fostering balance in our society, we now have to ring the bell that we have muted in the past, and formally declare that the LBP's position is legally and morally wrong. To do less than this is to leave the demands of the constitutional just compensation standard (in terms of law) and of our own conscience (in terms of morality) wanting and unsatisfied. The Delay in Payment Issue Separately from the demandability of interest because of the failure to fully pay for property already taken, a recurring issue in the case is the attribution of the delay. ITSCED That delay in payment occurred is not and cannot at all be disputed. While the LBP claimed that it made initial payments of P411,769,168.32 (out of the principal sum due of P1,383,179,000.00), the undisputed fact is that the petitioners were deprived of their lands on December 9, 1996 (when titles to their landholdings were cancelled and transferred to the Republic of the Philippines), and received full payment of the principal amount due them only on May 9, 2008. In the interim, they received no income from their landholdings because these landholdings had been taken. Nor did they receive adequate income from what should replace the income potential of their landholdings because the LBP refused to pay interest while withholding the full amount of the principal of the just compensation due by claiming a grossly low valuation. This sad state continued for more than a decade. In any language and by any measure, a lengthy delay in payment occurred. An important starting point in considering attribution for the delay is that the petitioners voluntarily offered to sell their landholdings to the government's land reform program; they themselves submitted their Voluntary Offer to Sell applications to the DAR, and they fully cooperated with the government's program. The present case therefore is not one where substantial conflict arose on the issue of whether expropriation is proper; the petitioners voluntarily submitted to expropriation and surrendered their landholdings, although they contested the valuation that the government made. Presumably, had the landholdings been properly valued, the petitioners would have accepted the payment of just compensation and there would have been no need for them to go to the extent of filing a valuation case. But, as borne by the records, the petitioners' lands were grossly undervalued by the DAR, leaving the petitioners with no choice but to file actions to secure what is justly due them. The DAR's initial gross undervaluation started the cycle of court actions that followed, where the LBP eventually claimed that it could not be faulted for seeking judicial recourse to defend the government's and its own interests in light of the petitioners' valuation claims. This LBP claim, of course, conveniently forgets that at the root of all these valuation claims and counterclaims was the initial gross undervaluation by DAR that the LBP stoutly defended. At the end, this undervaluation was proven incorrect by no less than this Court; the petitioners were proven correct in their claim, and the correct valuation more than five-fold the initial DAR valuation was decreed and became final. All these developments cannot now be disregarded and reduced to insignificance. In blunter terms, the government and the LBP cannot now be heard to claim that they were simply protecting their interests when they stubbornly defended their undervalued positions before

the courts. The more apt and accurate statement is that they adopted a grossly unreasonable position and the adverse developments that followed, particularly the concomitant delay, should be directly chargeable to them. To be sure, the petitioners were not completely correct in the legal steps they took in their valuation claims. They initially filed their valuation claim before the DARAB instead of immediately seeking judicial intervention. The DARAB, however, contributed its share to the petitioners' error when it failed or refused to act on the valuation petitions for more than three (3) years. Thus, on top of the DAR undervaluation was the DARAB inaction after the petitioners' landholdings had been taken. This Court's Decision of February 6, 2007 duly noted this and observed: EIDaAH It is not controverted that this case started way back on 12 October 1995, when AFC and HPI voluntarily offered to sell the properties to the DAR. In view of the failure of the parties to agree on the valuation of the properties, the Complaint for Determination of Just Compensation was filed before the DARAB on 14 February 1997. Despite the lapse of more than three years from the filing of the complaint, the DARAB failed to render a decision on the valuation of the land. Meantime, the titles over the properties of AFC and HPI had already been cancelled and in their place a new certificate of title was issued in the name of the Republic of the Philippines, even as far back as 9 December 1996. A period of almost 10 years has lapsed. For this reason, there is no dispute that this case has truly languished for a long period of time, the delay being mainly attributable to both official inaction and indecision, particularly on the determination of the amount of just compensation, to the detriment of AFC and HPI, which to date, have yet to be fully compensated for the properties which are already in the hands of farmer-beneficiaries, who, due to the lapse of time, may have already converted or sold the land awarded to them. Verily, these two cases could have been disposed with dispatch were it not for LBP's counsel causing unnecessary delay. At the inception of this case, DARAB, an agency of the DAR which was commissioned by law to determine just compensation, sat on the cases for three years, which was the reason that AFC and HPI filed the cases before the RTC. We underscore the pronouncement of the RTC that "the delay by DARAB in the determination of just compensation could only mean the reluctance of the Department of Agrarian Reform and the Land Bank of the Philippines to pay the claim of just compensation by corporate landowners." To allow the taking of landowners' properties, and to leave them empty-handed while government withholds compensation is undoubtedly oppressive. [Emphasis supplied.] These statements cannot but be true today as they were when we originally decided the case and awarded 12% interest on the balance of the just compensation due. While the petitioners were undisputedly mistaken in initially seeking recourse through the DAR, this agency itself hence, the government committed a graver transgression when it failed to act at all on the petitioners' complaints for determination of just compensation. In sum, in a balancing of the attendant delay-related circumstances of this case, delay should be laid at the doorsteps of the government, not at the petitioners'. We conclude, too, that the government should not be allowed to exculpate itself from this delay and should suffer all the consequences the delay caused. The LBP's arguments on the applicability of cases imposing 12% interest The LBP claims in its Comment that our rulings in Republic v. Court of Appeals, 26 Reyes v. National Housing Authority, 27 and Land Bank of the Philippines v. Imperial , 28 cannot be applied to the present case. According to the LBP, Republic is inapplicable because, first, the landowners in Republic remained unpaid, notwithstanding the fact that the award for just compensation had already been fixed by final judgment; in the present case, the Court already acknowledged that "pertinent amounts" were deposited in favor of the landowners within 14 months from the filing of their complaint. Second, while Republic involved an ordinary expropriation case, the present case involves expropriation for agrarian reform. Finally, the just compensation in Republic remained unpaid notwithstanding the finality of judgment, while the just compensation in the present case was immediately paid in full after LBP received a copy of the Court's resolution. We find no merit in these assertions. SHECcD As we discussed above, the "pertinent amounts" allegedly deposited by LBP were mere partial payments that amounted to a measly 5% of the actual value of the properties expropriated. They could be the basis for the immediate taking of the expropriated property but by no stretch of the imagination can these nominal amounts be considered "pertinent" enough to satisfy the full requirement of just compensation i.e., the full and fair equivalent of the expropriated property, taking into account its income potential and the foregone income lost because of the immediate taking. We likewise find no basis to support the LBP's theory that Republic and the present case have to be treated differently because the first involves a "regular" expropriation case, while the present case involves expropriation pursuant to the country's agrarian reform program. In both cases, the power of eminent domain was used and private property was taken for public use. Why one should be different from the other, so that the just compensation ruling in one should not apply to the other, truly escapes us. If there is to be a difference, the treatment of agrarian reform expropriations should be stricter and on a higher plane because of the government's societal concerns and objectives. To be sure, the government cannot attempt to remedy the ills of one sector of society by sacrificing the interests of others within the same society. Finally, we note that the finality of the decision (that fixed the value of just compensation) in Republic was not a material consideration for the Court in awarding the landowners 12% interest. The Court, in Republic, simply affirmed the RTC ruling imposing legal interest on the amount of just compensation due. In the process, the Court determined that the legal interest should be 12% after recognizing that the just compensation due was effectively a forbearance on the part of the government. Had the finality of the judgment been the critical factor, then the 12% interest should have been imposed from the time the RTC decision fixing just compensation became final. Instead, the 12% interest was imposed from the time that the Republic commenced condemnation proceedings and "took" the property. The LBP additionally asserts that the petitioners erroneously relied on the ruling in Reyes v. National Housing Authority. The LBP claims that we cannot apply Reyes because it involved just compensation that remained unpaid despite the finality of the expropriation decision. LBP's point of distinction is that just compensation was immediately paid in the present case upon the Court's determination of the actual value of the expropriated properties. LBP claims, too, that in Reyes, the Court established that the refusal of the NHA to pay just compensation was unfounded and unjustified, whereas the LBP in the present case clearly demonstrated its

willingness to pay just compensation. Lastly, in Reyes, the records showed that there was an outstanding balance that ought to be paid, while the element of an outstanding balance is absent in the present case. Contrary to the LBP's opinion, the imposition of the 12% interest in Reyes did not depend on either the finality of the decision of the expropriation court, or on the finding that the NHA's refusal to pay just compensation was unfounded and unjustified. Quite clearly, the Court imposed 12% interest based on the ruling in Republic v. Court of Appeals that ". . . if property is taken for public use before compensation is deposited with the court having jurisdiction over the case,the final compensation must include interest[s] on its just value to be computed from the time the property is taken to the time when compensation is actually paid or deposited with the court. In fine, between the taking of the property and the actual payment, legal interest[s] accrue in order to place the owner in a position as good as (but not better than) the position he was in before the taking occurred." 29 This is the same legal principle applicable to the present case, as discussed above. While the LBP immediately paid the remaining balance on the just compensation due to the petitioners after this Court had fixed the value of the expropriated properties, it overlooks one essential fact from the time that the State took the petitioners' properties until the time that the petitioners were fully paid, almost 12 long years passed. This is the rationale for imposing the 12% interest in order to compensate the petitioners for the income they would have made had they been properly compensated for their properties at the time of the taking. DaScAI Finally, the LBP insists that the petitioners quoted our ruling in Land Bank of the Philippines v. Imperial out of context. According to the LBP, the Court imposed legal interest of 12% per annum only after December 31, 2006, the date when the decision on just compensation became final. The LBP is again mistaken. The Imperial case involved land that was expropriated pursuant to Presidential Decree No. 27, 30 and fell under the coverage of DAR Administrative Order (AO) No. 13. 31 This AO provided for the payment of a 6% annual interest if there is any delay in payment of just compensation. However, Imperial was decided in 2007 and AO No. 13 was only effective up to December 2006. Thus, the Court, relying on our ruling in the Republic case, applied the prevailing 12% interest ruling to the period when the just compensation remained unpaid afterDecember 2006. It is for this reason that December 31, 2006 was important, not because it was the date of finality of the decision on just compensation. The 12% Interest Rate and the Chico-Nazario Dissent To fully reflect the concerns raised in this Court's deliberations on the present case, we feel it appropriate to discuss the Justice Minita Chico-Nazario's dissent from the Court's December 4, 2009 Resolution. While Justice Chico-Nazario admitted that the petitioners were entitled to the 12% interest, she saw it appropriate to equitably reduce the interest charges from P1,331,124,223.05 to P400,000,000.00. In support of this proposal, she enumerated various cases where the Court, pursuant to Article 1229 of the Civil Code, 32 equitably reduced interest charges. We differ with our esteemed colleague's views on the application of equity. While we have equitably reduced the amount of interest awarded in numerous cases in the past, those cases involved interest that was essentially consensual in nature, i.e., interest stipulated in signed agreements between the contracting parties. In contrast, the interest involved in the present case "runs as a matter of law and follows as a matter of course from the right of the landowner to be placed in as good a position as money can accomplish, as of the date of taking." 33 Furthermore, the allegedly considerable payments made by the LBP to the petitioners cannot be a proper premise in denying the landowners the interest due them under the law and established jurisprudence. If the just compensation for the landholdings is considerable, this compensation is not undue because the landholdings the owners gave up in exchange are also similarly considerable AFC gave up an aggregate landholding of 640.3483 hectares, while HPI's gave up 805.5308 hectares. When the petitioners surrendered these sizeable landholdings to the government, the incomes they gave up were likewise sizeable and cannot in any way be considered miniscule. The incomes due from these properties, expressed as interest, are what the government should return to the petitioners after the government took over their lands without full payment of just compensation. In other words, the value of the landholdings themselves should be equivalent to the principal sum of the just compensation due; interest is due and should be paid to compensate for the unpaid balance of this principal sum after taking has been completed. This is the compensation arrangement that should prevail if such compensation is to satisfy the constitutional standard of being "just." TEAcCD Neither can LBP's payment of the full compensation due before the finality of the judgment of this Court justify the reduction of the interest due them. To rule otherwise would be to forget that the petitioners had to wait twelve years from the time they gave up their lands before the government fully paid the principal of the just compensation due them. These were twelve years when they had no income from their landholdings because these landholdings have immediately been taken; no income, or inadequate income, accrued to them from the proceeds of compensation payment due them because full payment has been withheld by government. If the full payment of the principal sum of the just compensation is legally significant at all under the circumstances of this case, the significance is only in putting a stop to the running of the interest due because the principal of the just compensation due has been paid. To close our eyes to these realities is to condone what is effectively a confiscatory action in favor of the LBP. That the legal interest due is now almost equivalent to the principal to be paid is not per se an inequitable or unconscionable situation, considering the length of time the interest has remained unpaid almost twelve long years. From the perspective of interest income, twelve years would have been sufficient for the petitioners to double the principal, even if invested conservatively, had they been promptly paid the principal of the just compensation due them. Moreover, the interest, however enormous it may be, cannot be inequitable and unconscionable because it resulted directly from the application of law and jurisprudence standards that have taken into account fairness and equity in setting the interest rates due for the use or forebearance of money. If the LBP sees the total interest due to be immense, it only has itself to blame, as this interest piled up because it unreasonably acted in its valuation of the landholdings and consequently failed to promptly pay the petitioners. To be sure, the consequences of this failure i.e., the enormity of the total interest due and the alleged financial hemorrhage the LBP may suffer should not be the very reason that would excuse it from full compliance. To so rule is to use extremely flawed logic. To so rule is to disregard the question of how the LBP, a government financial institution that now professes difficulty in paying interest at 12% per annum, managed the funds that it failed to pay the petitioners for twelve long years. It would be utterly fallacious, too, to argue that this Court should tread lightly in imposing liabilities on the LBP because this bank represents the government and, ultimately, the public interest. Suffice it to say that public interest refers to what will benefit the public, not necessarily the government and its agencies whose task is to contribute to the benefit of the public. Greater public benefit will result if government agencies like the LBP are conscientious in undertaking its tasks in order to avoid the situation facing it in this case. Greater public

interest would be served if it can contribute to the credibility of the government's land reform program through the conscientious handling of its part of this program. As our last point, equity and equitable principles only come into full play when a gap exists in the law and jurisprudence. 34 As we have shown above, established rulings of this Court are in place for full application to the present case. There is thus no occasion for the equitable consideration that Justice Chico-Nazario suggested. The Amount Due the Petitioners as Just Compensation As borne by the records, the 12% interest claimed is only on the difference between the price of the expropriated lands (determined with finality to be P1,383,179,000.00) and the amount of P411,769,168.32 already paid to the petitioners. The difference between these figures amounts to the remaining balance of P971,409,831.68 that was only paid on May 9, 2008. DITEAc As above discussed, this amount should bear interest at the rate of 12% per annum from the time the petitioners' properties were taken on December 9, 1996 up to the time of payment. At this rate, the LBP now owes the petitioners the total amount of One Billion Three Hundred Thirty-One Million One Hundred Twenty-Four Thousand Two Hundred Twenty-Three and 05/100 Pesos (P1,331,124,223.05), computed as follows: Just CompensationP971,409,831.68 Legal Interest from 12/09/1996 To 05/09/2008 @ 12%/annum 12/09/1996 to 12/31/199623 days7,345,455.17 01/01/1997 to 12/31/200711 years1,282,260,977.82 01/01/2008 to 05/09/2008130 days41,517,790.07 P1,331,124,223.05 35 ============= The Immutability of Judgment Issue As a rule, a final judgment may no longer be altered, amended or modified, even if the alteration, amendment or modification is meant to correct what is perceived to be an erroneous conclusion of fact or law and regardless of what court, be it the highest Court of the land, rendered it. 36 In the past, however, we have recognized exceptions to this rule by reversing judgments and recalling their entries in the interest of substantial justice and where special and compelling reasons called for such actions. Notably, in San Miguel Corporation v. National Labor Relations Commission , 37 Galman v. Sandiganbayan, 38 Philippine Consumers Foundation v. National Telecommunications Commission, 39 and Republic v. de los Angeles, 40 we reversed our judgment on the second motion for reconsideration, while in Vir-Jen Shipping and Marine Services v. National Labor Relations Commission , 41 we did so on a third motion for reconsideration. In Cathay Pacific v. Romillo 42 and Cosio v. de Rama, 43 we modified or amended our ruling on the second motion for reconsideration. More recently, in the cases of Muoz v. Court of Appeals, 44 Tan Tiac Chiong v. Hon. Cosico, 45 Manotok IV v. Barque, 46 andBarnes v. Padilla, 47 we recalled entries of judgment after finding that doing so was in the interest of substantial justice. In Barnes, we said: . . . Phrased elsewise, a final and executory judgment can no longer be attacked by any of the parties or be modified, directly or indirectly, even by the highest court of the land. However, this Court has relaxed this rule in order to serve substantial justice considering (a) matters of life, liberty, honor or property, (b) the existence of special or compelling circumstances, (c) the merits of the case, (d) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules, (e) a lack of any showing that the review sought is merely frivolous and dilatory, and (f) the other party will not be unjustly prejudiced thereby. Invariably, rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must always be eschewed. Even the Rules of Court reflects this principle. The power to suspend or even disregard rules can be so pervasive and compelling as to alter even that which this Court itself had already declared to be final. 48 [Emphasis supplied.] That the issues posed by this case are of transcendental importance is not hard to discern from these discussions. A constitutional limitation, guaranteed under no less than the allimportant Bill of Rights, is at stake in this case: how can compensation in an eminent domain be "just" when the payment for the compensation for property already taken has been unreasonably delayed? To claim, as the assailed Resolution does, that only private interest is involved in this case is to forget that an expropriation involves the government as a necessary actor. It forgets, too, that under eminent domain, the constitutional limits or standards apply to government who carries the burden of showing that these standards have been met. Thus, to simply dismiss this case as a private interest matter is an extremely shortsighted view that this Court should not leave uncorrected. CaTSEA As duly noted in the above discussions, this issue is not one of first impression in our jurisdiction; the consequences of delay in the payment of just compensation have been settled by this Court in past rulings. Our settled jurisprudence on the issue alone accords this case primary importance as a contrary ruling would unsettle, on the flimsiest of grounds, all the rulings we have established in the past. More than the stability of our jurisprudence, the matter before us is of transcendental importance to the nation because of the subject matter involved agrarian reform, a societal objective that the government has unceasingly sought to achieve in the past half century. This reform program and its objectives would suffer a major setback if the government falters or is seen to be faltering, wittingly or unwittingly, through lack of good faith in implementing the needed reforms. Truly, agrarian reform is so important to the national agenda that the Solicitor General, no less, pointedly linked agricultural lands, its ownership and abuse, to the idea of revolution. 49 This linkage, to our mind, remains valid even if the landowner, not the landless farmer, is at the receiving end of the distortion of the agrarian reform program. As we have ruled often enough, rules of procedure should not be applied in a very rigid, technical sense; rules of procedure are used only to help secure, not override, substantial justice. 50 As we explained in Ginete v. Court of Appeals: 51 Let it be emphasized that the rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must always be eschewed. Even the Rules of Court reflect this principle. The power to suspend or even disregard rules can be so pervasive and compelling as to alter even that which this Court itself has already declared to be final, as we are now constrained to do in the instant case. xxx xxx xxx

The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities. Time and again, this Court has consistently held that rules must not be applied rigidly so as not to override substantial justice. 52 [Emphasis supplied.] Similarly, in de Guzman v. Sandiganbayan, 53 we had occasion to state: The Rules of Court was conceived and promulgated to set forth guidelines in the dispensation of justice but not to bind and chain the hand that dispenses it, for otherwise, courts will be mere slaves to or robots of technical rules, shorn of judicial discretion. That is precisely why courts in rendering justice have always been, as they ought to be, conscientiously guided by the norm that when on the balance, technicalities take a backseat against substantive rights, and not the other way around. Truly then, technicalities, in the appropriate language of Justice Makalintal, "should give way to the realities of the situation". 54 [Emphasis supplied.] We made the same recognition in Barnes, 55 on the underlying premise that a court's primordial and most important duty is to render justice; in discharging the duty to render substantial justice, it is permitted to re-examine even a final and executory judgment. aSTHDc Based on all these considerations, particularly the patently illegal and erroneous conclusion that the petitioners are not entitled to 12% interest, we find that we are duty-bound to reexamine and overturn the assailed Resolution. We shall completely and inexcusably be remiss in our duty as defenders of justice if, given the chance to make the rectification, we shall let the opportunity pass. Attorney's Fees We are fully aware that the RTC has awarded the petitioners attorney's fees when it fixed the just compensation due and decreed that interest of 12% should be paid on the balance outstanding after the taking of the petitioners' landholdings took place. The petitioners, however, have not raised the award of attorney's fees as an issue in the present motion for reconsideration. For this reason, we shall not touch on this issue at all in this Resolution. WHEREFORE, premises considered, we GRANT the petitioners' motion for reconsideration. The Court En Banc's Resolution dated December 4, 2009, as well as the Third Division's Resolutions dated April 30, 2008 and December 19, 2007, are hereby REVERSED and SET ASIDE. The respondent Land Bank of the Philippines is hereby ORDERED to pay petitioners Apo Fruits Corporation and Hijo Plantation, Inc. interest at the rate of 12% per annum on the unpaid balance of the just compensation, computed from the date the Government took the properties on December 9, 1996, until the respondent Land Bank of the Philippines paid on May 9, 2008 the balance on the principal amount. Unless the parties agree to a shorter payment period, payment shall be in monthly installments at the rate of P60,000,000.00 per month until the whole amount owing, including interest on the outstanding balance, is fully paid. Costs against the respondent Land Bank of the Philippines. Land Bank of the Phils.* Vs. Esther Anson Rivera We agree with the Court of Appeals. In Republic v. Court of Appeals, 19 we affirmed the award of 12% interest on just compensation due to the landowner. The court decreed: The constitutional limitation of "just compensation" is considered to be the sum equivalent to the market value of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal action and competition or the fair value of the property as between one who receives, and one who desires to sell, if fixed at the time of the actual taking by the government. Thus, if property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interest on its just value to be computed from the time the property is taken to the time when compensation is actually paid or deposited with the court. In fine, between the taking of the property and the actual payment, legal interests accrue in order to place the owner in a position as good as (but not better than) the position he was in before the taking occurred. The Bulacan trial court, in its 1979 decision, was correct in imposing interest on the zonal value of the property to be computed from the time petitioner instituted condemnation proceedings and "took" the property in September 1969. This allowance of interest on the amount found to be the value of the property as of the time of the taking computed, being an effective forbearance, at 12% per annum should help eliminate the issue of the constant fluctuation and inflation of the value of the currency over time. 20 We similarly upheld Republic's 12% per annum interest rate on the unpaid expropriation compensation in the following cases: Reyes v. National Housing Authority, 21 Land Bank of the Philippines v. Wycoco, 22 Republic v. Court of Appeals, 23 Land Bank of the Philippines v. Imperial, 24Philippine Ports Authority v. Rosales-Bondoc, 25 Nepomuceno v. City of Surigao, 26 and Curata v. Philippine Ports Authority. 27 Conformably with the foregoing resolution, this Court rules that a 12% interest per annum on just compensation, due to the respondents, from the finality of this decision until its satisfaction, is proper. 28 We now proceed to the issue of whether or not the Court of Appeals correctly adjudged LBP liable to pay the cost of suit. According to LBP, it performs a governmental function when it disburses the Agrarian Reform Fund to satisfy awards of just compensation. Hence, it cannot be made to pay costs in eminent domain proceedings. LBP cites Sps. Badillo v. Hon. Tayag, 29 to further bolster its claim that it is exempt from the payment of costs of suit. The Court in that case made the following pronouncement: On the other hand, the NHA contends that it is exempt from paying all kinds of fees and charges, because it performs governmental functions. It cites Public Estates Authority v. Yujuico, which holds that the Public Estates Authority (PEA), a government-owned and controlled corporation, is exempt from paying docket fees whenever it files a suit in relation to its governmental functions. ETHIDa We agree. People's Homesite and Housing Corporation v. Court of Industrial Relations declares that the provision of mass housing is a governmental function: Coming now to the case at bar, We note that since 1941 when the National Housing Commission (predecessor of PHHC, which is now known as the National Housing Authority [NHA] was

created, the Philippine government has pursued a mass housing and resettlement program to meet the needs of Filipinos for decent housing. The agency tasked with implementing such governmental program was the PHHC. These can be gleaned from the provisions of Commonwealth Act 648, the charter of said agency. We rule that the PHHC is a governmental institution performing governmental functions. This is not the first time We are ruling on the proper characterization of housing as an activity of the government. In the 1985 case ofNational Housing Corporation v. Juco and the NLRC (No. L-64313, January 17, 1985, 134 SCRA 172), We ruled that housing is a governmental function. While it has not always been easy to distinguish governmental from proprietary functions, the Court's declaration in the Decision quoted above is not without basis. Indeed, the characterization of governmental functions has veered away from the traditional constituent-ministrant classification that has become unrealistic, if not obsolete. Justice Isagani A. Cruz avers: "[I]t is now obligatory upon the State itself to promote social justice, to provide adequate social services to promote a rising standard of living, to afford protection to labor to formulate and implement urban and agrarian reform programs, and to adopt other measures intended to ensure the dignity, welfare and security of its citizens . . . These functions, while traditionally regarded as merely ministrant and optional, have been made compulsory by the Constitution." 30 We agree with the LBP. The relevant provision of the Rules of Court states: Rule 142 Costs Section 1.Costs ordinarily follow results of suit. Unless otherwise provided in these rules, costs shall be allowed to the prevailing party as a matter of course but the court shall have power, for special reasons adjudge that either party shall pay the costs of an action, or that the same be divided, as may be equitable. No costs shall be allowed against the Republic of the Philippines unless otherwise provided by law. In Heirs of Vidad v. Land Bank of the Philippines, 31 this Court extensively discussed the role of LBP in the implementation of the agrarian reform program. LBP is an agency created primarily to provide financial support in all phases of agrarian reform pursuant to Section 74 of Republic Act (RA) No. 3844 and Section 64 of RA No. 6657. It is vested with the primary responsibility and authority in the valuation and compensation of covered landholdings to carry out the full implementation of the Agrarian Reform Program. It may agree with the DAR and the land owner as to the amount of just compensation to be paid to the latter and may also disagree with them and bring the matter to court for judicial determination. cCAIDS xxx xxx xxx To the contrary, the Court had already recognized in Sharp International Marketing v. Court of Appeals that the LBP plays a significant role under the CARL and in the implementation of the CARP, thus: As may be gleaned very clearly from EO 229, the LBP is an essential part of the government sector with regard to the payment of compensation to the landowner. It is, after all, the instrumentality that is charged with the disbursement of public funds for purposes of agrarian reform. It is therefore part, an indispensable cog, in the governmental machinery that fixes and determines the amount compensable to the landowner. Were LBP to be excluded from that intricate, if not sensitive, function of establishing the compensable amount, there would be no amount "to be established by the government" as required in Sec. 6, EO 229. This is precisely why the law requires the [Deed of Absolute Sale (DAS)], even if already approved and signed by the DAR Secretary, to be transmitted still to the LBP for its review, evaluation and approval. It needs no exceptional intelligence to understand the implications of this transmittal. It simply means that if LBP agrees on the amount stated in the DAS, after its review and evaluation, it becomes its duty to sign the deed. But not until then. For, it is only in that event that the amount to be compensated shall have been "established" according to law. Inversely, if the LBP, after review and evaluation, refuses to sign, it is because as a party to the contract it does not give its consent thereto. This necessarily implies the exercise of judgment on the part of LBP, which is not supposed to be a mere rubber stamp in the exercise. Obviously, were it not so, LBP could not have been made a distinct member of [Presidential Agrarian Reform Council (PARC)], the super body responsible for the successful implementation of the CARP. Neither would it have been given the power to review and evaluate the DAS already signed by the DAR Secretary. If the function of the LBP in this regard is merely to sign the DAS without the concomitant power of review and evaluation, its duty to "review/evaluate" mandated in Adm. Order No. 5 would have been a mere surplus age, meaningless, and a useless ceremony. xxx xxx xxx Even more explicit is R.A. 6657 with respect to the indispensable role of LBP in the determination of the amount to be compensated to the landowner. Under Sec. 18 thereof, "the LBP shall compensate the landowner in such amount as may be agreed upon by the landowner and the DAR and LBP, in accordance with the criteria provided in Secs. 16 and 17, and other pertinent provisions hereof, or as may be finally determined by the court, as the just compensation for the land." xxx xxx xxx It must be observed that once an expropriation proceeding for the acquisition of private agricultural lands is commenced by the DAR, theindispensable role of Land Bank begins. xxx xxx xxx

It is evident from the afore-quoted jurisprudence that the role of LBP in the CARP is more than just the ministerial duty of keeping and disbursing the Agrarian Reform Funds. As the Court had previously declared, the LBP is primarily responsible for the valuation and determination of compensation for all private lands. It has the discretion to approve or reject the land valuation and just compensation for a private agricultural land placed under the CARP. In case the LBP disagrees with the valuation of land and determination of just compensation by a party, the DAR, or even the courts, the LBP not only has the right, but the duty, to challenge the same, by appeal to the Court of Appeals or to this Court, if appropriate. 32 CSIDTc It is clear from the above discussions that since LBP is performing a governmental function in agrarian reform proceeding, it is exempt from the payment of costs of suit as provided under Rule 142, Section 1 of the Rules of Court. WHEREFORE, premises considered, the petition is GRANTED. The decision of the Court of Appeals in CA G.R. SP No. 87463 dated 9 October 2007 is AFFIRMED with the MODIFICATION that LBP is hereby held exempted from the payment of costs of suit. In all other respects, the Decision of the Court of Appeals is AFFIRMED. No costs. UPDATE The Computation The purpose of A.O. No. 13 is to compensate the landowners for unearned interests. Had they been paid in 1972 when the Government Support Price (GSP) for rice and corn was valued at P35.00 and P31.00, respectively, and such amounts were deposited in a bank, they would have earned a compounded interest of 6% per annum. Thus, if the [Provincial Agrarian Reform Adjudicator] [(]PARAD[)] used the 1972 GSP, then the product of (2.5 x Average Gross Production (AGP) x P35.00 or P31.00) could be multiplied by (1.06) to determine the value of the land plus the additional 6% compounded interest it would have earned from 1972. 30 cIHDaE Following A.O. 13-94, the 6% yearly interest compounded annually shall be reckoned from 21 October 1972 up to the effectivity date of this Order which was on 21 October 1994. However, A.O. 02-04 31 extended the period of application of 6% interest from 21 October 1972 up to the time of actual payment but not later than December 2006. Then, under A.O. 06-08, 32 the application of 6% interest was further until 31 December 2009. It must be noted that the term "actual payment" in the administrative orders is to be interpreted as "full payment" pursuant to the ruling in Land Bank of the Philippines v. Obias 33 and Land Bank of the Philippines v. Soriano. 34 The amount of land value of P164,059.26 was already settled before the lower courts. 35 There is no need for a new computation. Applying the rules under A.O. 13-94, A.O. 02-04 and A.O. 06-08 the formula to determine the increment of 6% interest per annum compounded annually beginning 21 October 1972 up to 31 December 2009 is: CI = P (1 + R) n (CI as compounded interest; P as the Principal; R is the Rate of 6% and n = number of years from date of tenancy starting from.) Where: P = P164,059.26 R = 6% n = 37 years COMPUTATION: CI = P (1 + R) n = P164,059.26 (1 + 6%) 37 years = P164,059.26 (1.06) 37 years = P1,252,770.80 Then we add the compounded interest to the land value P164,059.26: Compounded Amount = Land Value + Compounded Interest = P164,059.26 + P1,252,770.80 = P1,416,830.06 To compute the compounded amount to be paid, we subtract the amount of lease rental of P75,415.88 as adjudged by the appellate court to the compounded amount: 36 HAcaCS Compounded Amount = P1,416,830.06 less P75,415.88 = P1,341,414.18 We add a simple interest of 12% to the compounded amount from 31 December 2009 until the promulgation of this decision due to the delay incurred by LBP in not paying the full just compensation to the Spouses: aSTECI I=PxRxT (I = Interest, R = Rate, T = Time) Where: P = Compounded Amount R = 12% T = 31 December 2009 to 31 December 2012 1.COMPUTATION: 31 December 2009 to 31 December 2012 I=PxRxT I = (Compounded Amount) (.12) (3 years) I = P1,341,414.18 (.12) (3years) I = P482,909.1048 2.COMPUTATION: 31 December 2012 to 20 February 2013 I= P x R x T (Compounded Amount) (12% interest) x No. of Days = 365 days (Compounded Amount) (.12) x 50 days = 365 days (P1,341,414.18) (.12) x 50 days = 365 days P160,969.69 x 50 days = 365 days = P441.01 x 50 days

P22,050.50

========= Final Just Compensation

= Compounded Amount + Interest = P1,341,414.18 + P482,909.1048+ P22,050.50 = P1,846,373.70 WHEREFORE, premises considered, we PARTIALLY GRANT the petitioner's Motion for Reconsideration. The Decision dated 17 November 2010 of the Court's First Division is hereby MODIFIED. aSTECA The petitioner Land Bank of the Philippines is hereby ORDERED to pay Esther Anson Rivera, Antonio G. Anson and Cesar G. Anson P1,846,373.70 as final just compensation plus interest at the rate of 12% per annum from the finality of this decision until full payment. Secretary of DPWH vs. Sps. Tecson Aggrieved, petitioners come before the Court assailing the CA decision based on the following grounds: I. THE COURT OF APPEALS GRAVELY ERRED IN GRANTING JUST COMPENSATION TO RESPONDENTS CONSIDERING THE HIGHLY DUBIOUS AND QUESTIONABLE CIRCUMSTANCES OF THEIR ALLEGED OWNERSHIP OF THE SUBJECT PROPERTY. II. THE COURT OF APPEALS GRAVELY ERRED IN AWARDING JUST COMPENSATION TO RESPONDENTS BECAUSE THEIR COMPLAINT FOR RECOVERY OF POSSESSION AND DAMAGES IS ALREADY BARRED BY PRESCRIPTION AND LACHES. III. THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL COURT'S DECISION ORDERING THE PAYMENT OF JUST COMPENSATION BASED ON THE CURRENT MARKET VALUE OF THE ALLEGED PROPERTY OF RESPONDENTS. 22 Petitioners insist that the action is barred by prescription having been filed fifty-four (54) years after the accrual of the action in 1940. They explain that the court can motu proprio dismiss the complaint if it shows on its face that the action had already prescribed. Petitioners likewise aver that respondents slept on their rights for more than fifty years; hence, they are guilty of laches. Lastly, petitioners claim that the just compensation should be based on the value of the property at the time of taking in 1940 and not at the time of payment. 23 The petition is partly meritorious. ATHCDa The instant case stemmed from an action for recovery of possession with damages filed by respondents against petitioners. It, however, revolves around the taking of the subject lot by petitioners for the construction of the MacArthur Highway. There is taking when the expropriator enters private property not only for a momentary period but for a permanent duration, or for the purpose of devoting the property to public use in such a manner as to oust the owner and deprive him of all beneficial enjoyment thereof. 24 It is undisputed that the subject property was taken by petitioners without the benefit of expropriation proceedings for the construction of the MacArthur Highway. After the lapse of more than fifty years, the property owners sought recovery of the possession of their property. Is the action barred by prescription or laches? If not, are the property owners entitled to recover possession or just compensation? As aptly noted by the CA, the issues of prescription and laches are not proper issues for resolution as they were not included in the pre-trial order. We quote with approval the CA's ratiocination in this wise: Procedurally, too, prescription and laches are no longer proper issues in this appeal. In the pre-trial order issued on May 17, 2001, the RTC summarized the issues raised by the defendants, to wit: (a) whether or not the plaintiffs were entitled to just compensation; (b) whether or not the valuation would be based on the corresponding value at the time of the taking or at the time of the filing of the action; and (c) whether or not the plaintiffs were entitled to damages. Nowhere did the pre-trial order indicate that prescription and laches were to be considered in the adjudication of the RTC. 25 To be sure, the pre-trial order explicitly defines and limits the issues to be tried and controls the subsequent course of the action unless modified before trial to prevent manifest injustice. 26 ICAcTa Even if we squarely deal with the issues of laches and prescription, the same must still fail. Laches is principally a doctrine of equity which is applied to avoid recognizing a right when to do so would result in a clearly inequitable situation or in an injustice. 27 This doctrine finds no application in this case, since there is nothing inequitable in giving due course to respondents' claim. Both equity and the law direct that a property owner should be compensated if his property is taken for public use. 28 Neither shall prescription bar respondents' claim following the long-standing rule "that where private property is taken by the Government for public use without first acquiring title thereto either through expropriation or negotiated sale, the owner's action to recover the land or the value thereof does not prescribe." 29 When a property is taken by the government for public use, jurisprudence clearly provides for the remedies available to a landowner. The owner may recover his property if its return is feasible or, if it is not, the aggrieved owner may demand payment of just compensation for the land taken. 30 For failure of respondents to question the lack of expropriation proceedings for a long period of time, they are deemed to have waived and are estopped from assailing the power of the government to expropriate or the public use for which the power was exercised. What is left to respondents is the right of compensation. 31 The trial and appellate courts found that respondents are entitled to compensation. The only issue left for determination is the propriety of the amount awarded to respondents. Just compensation is "the fair value of the property as between one who receives, and one who desires to sell, . . . fixed at the time of the actual taking by the government." This rule holds true when the property is taken before the filing of an expropriation suit, and even if it is the property owner who brings the action for compensation. 32 The issue in this case is not novel. TaCDcE In Forfom Development Corporation [Forfom] v. Philippine National Railways [PNR] , 33 PNR entered the property of Forfom in January 1973 for public use, that is, for railroad tracks, facilities and appurtenances for use of the Carmona Commuter Service without initiating expropriation proceedings. 34 In 1990, Forfom filed a complaint for recovery of possession of real property and/or damages against PNR. In Eusebio v. Luis, 35respondent's parcel of land was taken in 1980 by the City of Pasig and used as a municipal road now known as A. Sandoval Avenue in Pasig City without the appropriate expropriation proceedings. In 1994, respondent demanded payment of the value of the property, but they could not agree on its valuation prompting respondent to file a complaint for reconveyance and/or damages against the city government and the mayor. In Manila International Airport Authority v. Rodriguez, 36 in the early 1970s, petitioner implemented expansion programs for its runway necessitating the acquisition and occupation of some of the properties surrounding its

premises. As to respondent's property, no expropriation proceedings were initiated. In 1997, respondent demanded the payment of the value of the property, but the demand remained unheeded prompting him to institute a case for accion reivindicatoria with damages against petitioner. In Republic v. Sarabia , 37 sometime in 1956, the Air Transportation Office (ATO) took possession and control of a portion of a lot situated in Aklan, registered in the name of respondent, without initiating expropriation proceedings. Several structures were erected thereon including the control tower, the Kalibo crash fire rescue station, the Kalibo airport terminal and the headquarters of the PNP Aviation Security Group. In 1995, several stores and restaurants were constructed on the remaining portion of the lot. In 1997, respondent filed a complaint for recovery of possession with damages against the storeowners where ATO intervened claiming that the storeowners were its lessees. The Court in the above-mentioned cases was confronted with common factual circumstances where the government took control and possession of the subject properties for public use without initiating expropriation proceedings and without payment of just compensation, while the landowners failed for a long period of time to question such government act and later instituted actions for recovery of possession with damages. The Court thus determined the landowners' right to the payment of just compensation and, more importantly, the amount of just compensation.The Court has uniformly ruled that just compensation is the value of the property at the time of taking that is controlling for purposes of compensation . In Forfom, the payment of just compensation was reckoned from the time of taking in 1973; in Eusebio, the Court fixed the just compensation by determining the value of the property at the time of taking in 1980; in MIAA, the value of the lot at the time of taking in 1972 served as basis for the award of compensation to the owner; and in Republic, the Court was convinced that the taking occurred in 1956 and was thus the basis in fixing just compensation. As in said cases, just compensation due respondents in this case should, therefore, be fixed not as of the time of payment but at the time of taking, that is, in 1940. The reason for the rule has been clearly explained in Republic v. Lara, et al., 38 and repeatedly held by the Court in recent cases, thus: . . . "[T]he value of the property should be fixed as of the date when it was taken and not the date of the filing of the proceedings." For where property is taken ahead of the filing of the condemnation proceedings, the value thereof may be enhanced by the public purpose for which it is taken; the entry by the plaintiff upon the property may have depreciated its value thereby; or, there may have been a natural increase in the value of the property from the time it is taken to the time the complaint is filed, due to general economic conditions. The owner of private property should be compensated only for what he actually loses; it is not intended that his compensation shall extend beyond his loss or injury. And what he loses is only the actual value of his property at the time it is taken . . . . 39 Both the RTC and the CA recognized that the fair market value of the subject property in 1940 was P0.70/sq m. 40 Hence, it should, therefore, be used in determining the amount due respondents instead of the higher value which is P1,500.00. While disparity in the above amounts is obvious and may appear inequitable to respondents as they would be receiving such outdated valuation after a very long period, it is equally true that they too are remiss in guarding against the cruel effects of belated claim. The concept of just compensation does not imply fairness to the property owner alone. Compensation must be just not only to the property owner, but also to the public which ultimately bears the cost of expropriation. 41 SHDAEC Clearly, petitioners had been occupying the subject property for more than fifty years without the benefit of expropriation proceedings. In taking respondents' property without the benefit of expropriation proceedings and without payment of just compensation, petitioners clearly acted in utter disregard of respondents' proprietary rights which cannot be countenanced by the Court. 42 For said illegal taking, respondents are entitled to adequate compensation in the form of actual or compensatory damages which in this case should be the legal interest of six percent (6%) per annum on the value of the land at the time of taking in 1940 until full payment. 43 This is based on the principle that interest runs as a matter of law and follows from the right of the landowner to be placed in as good position as money can accomplish, as of the date of taking. 44 WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The Court of Appeals Decision dated July 31, 2007 in CA-G.R. CV No. 77997 is MODIFIED , in that the valuation of the subject property owned by respondents shall be P0.70 instead of P1,500.00 per square meter, with interest at six percent (6%) per annum from the date of taking in 1940 instead of March 17, 1995, until full payment. EPZA vs Estate of Salud Jimenez The issue is simply whether or not just compensation should be based on the value of Lot 1406B prevailing in 1981 or in 1993. The petition for review lacks merit. Just compensation for Lot 1406-B must be based on value of property prevailing in 1993 What would have been an easy and straightforward implementation of the decision promulgated on January 16, 2001 in G.R. No. 137285 was delayed by the petitioner's interposition of the issue on the proper reckoning point for computing the just compensation for Lot 1406-B. A reading of the decision in G.R. No. 137285 exposes the interposition as nothing more than an insincere attempt of the petitioner to delay the inevitable performance of its obligation to pay just compensation for Lot 1406-B. Indeed, the Court pronounced there that "the compromise agreement was only about the mode of payment by swapping of lots . . ., only the originally agreed form of compensation that is by [lot] 12payment, was rescinded." 13 TCDHaE That pronouncement became the law of the case, anything to the contrary of which the petitioner could not validly rely upon. The doctrine of the law of the case means that whatever is irrevocably established as the controlling legal rule between the same parties in the same case, whether correct on general principles or not, continues to be the law of the case for as long as the facts on which the legal rule was predicated continue to be the facts of the case before the court. 14 It applies in a situation where an appellate court has made a ruling on a question on appeal and thereafter remands the case to the lower court for further proceedings; the question then settled by the appellate court becomes the law of the case binding the lower court and any subsequent appeal, 15 and questions necessarily involved and dealt with in a former appeal will be regarded as the law of the case in a subsequent appeal, although the questions are not expressly treated in the opinion of the court, inasmuch as the presumption is that all the facts in the case bearing on the point decided have received due consideration whether all or none of them are mentioned in the opinion. 16 To reiterate, in G.R. No. 137285, the Court upheld the annulment of the Compromise Agreement and recognized that the agreed upon mode of payment of the just compensation for Lot 1406-B with Lot 434 was cancelled. It is notable that the Court mentioned nothing therein about the invalidation of the amount of just compensation corresponding to the mode of payment, which was the value of Lot 434 at the time, which silence was the Court's acknowledgment that the parties understood and accepted, by entering into the Compromise

Agreement in 1993, that the just compensation for Lot 1406-B was Lot 434 (or the value of Lot
434, which at the time of the swap in 1993 was definitely much higher than Lot 434's value in 1981). Accordingly, we completely agree with the RTC's observation that "when the parties signed the compromise agreement and the same was approved, they had in fact settled between themselves the question of what is just compensation and that both of them had intended that defendant would be compensated on the basis of prevailing values at the time of the agreement." 17 We further completely agree with the CA's conclusion that "by agreeing to a land swap in 1993 in the ill-fated compromise agreement, [PEZA] had impliedly agreed to paying just compensation using the market values in 1993." 18 2. P6,200.00/square meter is the correct just compensation for Lot 1406-B With the annulment of the Compromise Agreement, the payment of just compensation for Lot 1406B now has to be made in cash. In that regard, the order of the Court to remand to the RTC for the determination of just compensation was indubitably for the sole objective of ascertaining the equivalent monetary value in 1993 of Lot 1406-B or Lot 434. In due course, the RTC found that just compensation of Lot 1406-B was P6,200.00/square meter. Such finding, which the CA upheld, took into due consideration the clear and convincing evidence proving the fair valuation of properties similar and adjacent to Lot 1406-B at or near 1993, the time in question, namely: (a)The deed of sale executed in 1994 by one of the heirs of the late Salud Jimenez to sell Lot 1406-A to MERALCO for P6,395.00/square meter; (b)A certified true copy of the 1998 zonal valuation of properties along the PEZA Road, Barangay Tejero, Cavite City showing the zonal valuations of residential and commercial properties in the vicinity of Lot 1406-B to be P4,000.00/square meter and P8,000.00/square meter, respectively; HAEDCT (c)An appraisal report done on Lot 1406-B by an independent appraiser stating that the value of properties in the vicinity of Lot 1406-B went for P7,500.00/square meter in 1997; and (d)Other documents showing payments of just compensation by PEZA to the owners of other previously expropriated properties adjacent to or near Lot 1406-B. The uniform findings of fact upon the question of just compensation reached by the CA and the RTC are entitled to the greatest respect. They are conclusive on the Court in the absence of a strong showing by the petitioner that the CA and the RTC erred in appreciating the established facts and in drawing inferences from such facts. We concur with the findings. 3. Estate of Salud Jimenez entitled to Interest of 12% per annum The power of eminent domain is not an unlimited power. Section 9, Article III of the 1987 Constitution sets down the essential limitations upon this inherent right of the State to take private property, namely: (a) that the taking must be for a public purpose; and (b) that just compensation must be paid to the owner. The State must first establish that the exercise of eminent domain is for a public purpose, which, here, is already settled. What remains to be determined is the just compensation. In Apo Fruits Corporation v. Land Bank, 19 the Court has held that compensation cannot be just to the owner in the case of property that is immediately taken unless there is prompt payment, considering that the owner thereby immediately suffers not only the loss of his property but also the loss of its fruits or income. Thus, in addition, the owner is entitled to legal interest from the time of the taking of the property until the actual payment in order to place the owner in a position as good as, but not better than, the position he was in before the taking occurred. 20 It is undeniable that just compensation was not promptly made to the Estate of Salud Jimenez for the taking of Lot 1406-B by the petitioner. The move to compensate through the swap arrangement under the Compromise Agreement was aborted or amounted to nothing through no fault of the Estate of Salud Jimenez. The petitioner, which should have known about the inefficacy of the swapping of Lot 434 for Lot 1406-B, could even be said to have resorted to the swapping for the purpose of delaying the payment. Thus, it was solely responsible for the delay. In fact, the Estate of Salud Jimenez was compelled to seek the rescission of the Compromise Agreement, a process that prolonged even more the delay in the payment of just compensation. In view of this, the CA's fixing of legal interest at only 6% per annum cannot be upheld and must be corrected, for that rate would not ensure that compensation was just in the face of the long delay in payment. Already in G.R. No. 137285, the Court noted the long delay in payment and was naturally prompted to strongly condemn "the cavalier attitude of government officials who adopt such a despotic and irresponsible stance," quoting from Cosculluela v. Court of Appeals, 21 that: [It] is high time that the petitioner be paid what was due him eleven years ago. It is arbitrary and capricious for a government agency to initiate expropriation proceedings, seize a person's property, allow a judgment of the court to become final and executory and then refuse to pay on the ground that there are no appropriations for the property earlier taken and profitably used. We condemn in the strongest possible terms the cavalier attitude of government officials who adopt such a despotic and irresponsible stance. 22 Accordingly, we hereby impose 12% interest per annum on the unpaid gross value of P81,331,600.00 for Lot 1406-B (i.e., 13,118 square meters x P6,200.00/square meter) from August 23, 1993, the date of the approval of the failed Compromise Agreement, until the full amount of the just compensation is paid, as a way of making the compensation just. This accords with a long line of pertinent jurisprudence, 23 whereby the Court has imposed interest at 12% per annum in eminent domain whenever the expropriator has not immediately delivered the just compensation. WHEREFORE, we DENY the petition for review on certiorari filed by Philippine Export Zone Authority, and AFFIRM the decision promulgated by the Court of Appeals on April 20, 2009, subject to the MODIFICATION that the legal interest chargeable on the unpaid just compensation for Lot 1406-B is 12% per annum reckoned from August 23, 1993 on the unpaid gross value of P81,331,600.00 for Lot 1406-B. This decision is immediately final and executory, and no further pleadings shall be allowed. The petitioner shall pay the costs of suit. Municipa;ity of Bian* vs. Garcia

thereto entitled of their just share in the rents and profits of the real estate in question. 31 Such an order is, to be sure, final and appealable. Now, this Court has settled the question of the finality and appealability of a decision or order decreeing partition or recovery of property and/or accounting. In Miranda v. Court of Appeals, decided on June 18, 1986, 32 the Court resolved the question affirmatively, and expressly revoked the ruling in Zaldarriaga v. Enriquez 33 that a decision or order of partition is not final because it leaves something more to be done in the trial court for the complete disposition of the case, i.e, the appointment of commissioners, the proceedings for the determination by said commissioners of just compensation, the submission of their reports, and hearing thereon, and the approval of the partition and inFuentebella vs. Carrascoso 34 that a judgment for recovery of property with accounting is not final, but merely interlocutory and hence not appealable until the accounting is made and passed upon. As pointed out in Miranda, imperative considerations of public policy, of sound practice and adherence to the constitutional mandate of simplified, just, speedy and inexpensive determination of every action require that judgments for recovery (or partition) of property with accounting be considered as final judgments, duly appealable. This, notwithstanding that further proceedings will still have to be rendered by the party required to do so, it will be ventilated and discussed by the parties, and will eventually be passed upon by the Court. It is of course entirely possible that the Court disposition may not sit well with either the party in whose favor the accounting is made, or the party rendering it. In either case, the Court's adjudication on the accounting is without doubt a final one, for it would finally terminate the proceedings thereon and leave nothing more to be done by the Court on the merits of the issue. And it goes without saying that any party feeling aggrieved by that ultimate action of the Court on the accounting may seek reversal or modification thereof by the Court of Appeals or the Supreme Court. 35 The Miranda doctrine was reiterated in de Guzman v. C.A.; 36 Valdez v. Bagaso; 37 Lagunzad v. Gonzales; 38 Cease v. C.A.; 39 Macadangdang v. CA.; 40 and Hernandez v. C.A.; 41 Gabor v. C.A. 42 Fabrica v. C.A. 43 No reason presents itself for different disposition as regards cases of eminent domain. On the contrary, the close analogy between the special actions of eminent domain and partition already pointed out, argues for the application of the same rule to both proceedings. The Court therefore holds that in actions of eminent domain, as in actions for partition, since no less than two (2) appeals are allowed by law, the period for appeal from an order of condemnation 44 is thirty (30) days counted from notice of order and not the ordinary period of fifteen (15) days prescribed for actions in general, conformably with the provision of Section 39 of Batas Pambansa Bilang 129, in relation to paragraph 19 (b) of the Implementing Rules to the effect that in "appeals in special proceedings in accordance with Rule 109 of the Rules of Court andother cases wherein multiple appeals are allowed, the period of appeal shall be thirty (30) days, a record of appeal being required." 45 The municipality's motion for reconsideration filed on August 17, 1984 was therefore timely presented, well within the thirty-day period laid down by law therefor; and it was error for the Trial Court to have ruled otherwise and to have declared that the order sought to be considered had become final and executory. 2.As already observed, the Municipality's complaint for expropriation impleaded eleven (11) defendants. A separate trial was held on motion of one of them, Erlinda Francisco, 46 it appearing that she had asserted a defense personal and peculiar to her, and inapplicable to the other defendants, supra. Subsequently, and on the basis of the evidence presented by her, the Trial Court promulgated a separate Order dismissing the action as to her, in accordance with Section 4, Rule 36 of the Rules of Court reading as follows: Sec. 4.Several judgments. In an action against several defendants, the court may, when a several judgment is proper, render judgment against one or more of them, leaving the action to proceed against the others. It is now claimed by the Municipality that the issuance of such a separate, final order or judgment had given rise "ipso facto to a situation where multiple appeals became available." The Municipality is right. In the case at bar, where a single complaint was filed against several defendants having individual, separate interests, and a separate trial was held relative to one of said defendants after which a final order or judgment was rendered on the merits of the plaintiff's claim against that particular defendant, it is obvious that in the event of an appeal from that separate judgment, the original record cannot and should not be sent up to the appellate tribunal. The record will have to stay with the trial court because it will still try the case as regards the other defendants. As the rule above quoted states, "In an action against several defendants, the court may, when a several judgment is proper, render judgment against one or more of them, leaving the action to proceed against the others." 47 In lieu of the original record, a record on appeal will perforce have to be prepared and transmitted to the appellate court. More than one appeal being permitted in this case, therefore, "the period of appeal shall be thirty (30) days, a record of appeal being required," as provided by the Implementing Rules in relation to Section 39 of B.P. Blg. 129,supra. 48 3.Erlinda Francisco filed a "motion to dismiss" in traverse of the averments of the Municipality's complaint for expropriation. That "motion to dismiss" was in fact the indicated responsive pleading to the complaint, "in lieu of an answer." 49 Now, the Trial Court conducted a separate trial to determine whether or not, as alleged by Francisco in her "motion to dismiss," she had a "vested right via a pre-existing approved Locational Clearance from the HSRC," making the expropriation suit premature. 50 While such a separate trial was not improper in the premises, 51 and was not put at issue by the Municipality, the latter did protest against the Trial Court's (a) reversing the order of trial and receiving first, the evidence of defendant Francisco, and (b) subsequently rendering its order sustaining Francisco's defense and dismissing the action as to her, solely on the basis of said Francisco's evidence and without giving the plaintiff an opportunity to present its own evidence on the issue. The Trial Court was clearly wrong on both counts. The Court will have to sustain the Municipality on these points. prLL Nothing in the record reveals any valid cause to reverse the order of trial. What the Trial Court might have had in mind was the provision of Section 5, Rule 16 of the Rules of Court allowing "any of the grounds for dismissal" in Rule 16 to "be pleaded as an affirmative defense," and authorizing the holding of a "preliminary hearing . . . thereon as if a motion to dismiss had been filed." Assuming this to be the fact, the reception of Francisco's evidence first was wrong, because obviously, her asserted objection or defense that the locational clearance issued in her favor by the HSRC was a legal bar to the expropriation suit was not a ground for dismissal under Rule 16. She evidently meant to prove the Municipality's lack of cause of action; but lack of cause of action is not a ground for dismissal of an action under Rule 16; the ground is the failure of the complaint to state a cause of action, which is obviously not the same as plaintiff's not having a cause of action. Nothing in the record, moreover, discloses any circumstances from which a waiver by the Municipality of the right to present contrary proofs may be inferred. So, in deciding the issue without according the Municipality that right to present contrary evidence, the Trial Court had effectively denied the Municipality due process and thus incurred in another reversible error. 4.Turning now to the locational clearance issued by the HSRC in Francisco's favor on May 4, 1983, it seems evident that said clearance did become a "worthless sheet of paper," as averred by the Municipality, upon the lapse of one (1) year from said date in light of the explicit condition in the clearance that it "shall be considered automatically revoked if not used within a period of one (1) year from date of issue," and the unrebutted fact that Francisco had not really made use of it within that period. The failure of the Court to consider these facts, despite its attention having been drawn to them, is yet another error which must be corrected. prcd WHEREFORE, the challenged Order issued by His Honor on July 24, 1984 in Civil Case No. 8-1960 is ANNULLED AND SET ASIDE, and the case is remanded to the Trial Court for the reception of the evidence of the plaintiff Municipality of Bian as against defendant Erlinda Francisco, and for subsequent proceedings and judgment in accordance with the Rules of Court and the law. Costs against private respondent.

A similar two-phase feature is found in the special civil action of partition and accounting under Rule 69 of the Rules of Court. 24 The first phase of a partition and/or accounting suit is taken up with the determination of whether or not a co-ownership in fact exists, and a partition is proper (i.e., not otherwise legally proscribed) and may be made by voluntary agreement of all the parties interested in the property. 25 This phase may end with a declaration that plaintiff is not entitled to have a partition either because a co-ownership does not exist, or partition is legally prohibited. 26 It may end, on the other hand, with an adjudgment that a co-ownership does in truth exist, partition is proper in the premises and an accounting of rents and profits received by the defendant from the real estate in question is in order. 27 In the latter case, "the parties may, if they are able to agree, make partition among themselves by proper instruments of conveyance, and the court shall confirm the partition so agreed upon. 28 In either case i.e., either the action is dismissed or partition and/or accounting is decreed the order is a final one, and may be appealed by any party aggrieved thereby. 29 The second phase commences when it appears that "the parties are unable to agree upon the partition" directed by the court. In that event partition shall be done for the parties by the Court with the assistance of not more than three (3) commissioners. 30 This second stage may well also deal with the rendition of the accounting itself and its approval by the Court after the parties have been accorded opportunity to be heard thereon, and an award for the recovery by the party or parties