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REPUBLIC VS. VDA.

DE CASTELLVI
GR # L-20620 August 15, 1974 (Constitutional Law Eminent Domain, Elements of Taking)
FACTS: After the owner of a parcel of land that has been rented and occupied by the
government in 1947 refused to extend the lease, the latter commenced expropriation
proceedings in 1959. During the assessment of just compensation, the government argued that
it had taken the property when the contract of lease commenced and not when the proceedings
begun. The owner maintains that the disputed land was not taken when the government
commenced to occupy the said land as lessee because the essential elements of the taking of
property under the power of eminent domain, namely (1) entrance and occupation by
condemnor upon the private property for more than a momentary period, and (2) devoting it to a
public use in such a way as to oust the owner and deprive him of all beneficial enjoyment of the
property, are not present.

ISSUE: Whether or not the taking of property has taken place when the condemnor has entered
and occupied the property as lesse.

HELD: No, the property was deemed taken only when the expropriation proceedings
commenced in 1959.

The essential elements of the taking are: (1) Expropriator must enter a private property, (2) for
more than a momentary period, (3) and under warrant of legal authority, (4) devoting it to public
use, or otherwise informally appropriating or injuriously affecting it in such a way as (5)
substantially to oust the owner and deprive him of all beneficial enjoyment thereof.

In the case at bar, these elements were not present when the government entered and occupied
the property under a contract of lease.

CITY OF MANILA VS. CHINESE COMMUNITY OF MANILA


40 Phil. 349 (Constitutional Law Eminent Domain)

FACTS: Plaintiff sought to expropriate a part of a private cemetery devoted for public use to
make an extension of Rizal Avenue. Defendants contend that expropriation is not necessary
because it will disturb the remains of the dead. Moreover, adjoining and adjacent lots were
offered to the city free of charge for the planned public improvement.

ISSUE: Whether or not a private property devoted for public use can still be expropriated.

HELD: Yes, private property devoted for public use is still subject to expropriation, provided this
is done directly by the national legislature or under a specific grant of authority to the delegate.
In addition, there must be a necessity for the expropriation. In the case at bar, evidence shows
that there is no proof of the need of converting the cemetery.

REPUBLIC V. ANDAYA (REMEDIAL)


Issue: Is the Republic liable for just compensation if in enforcing the legal easement of right-of-
way on a property, the remaining area would be rendered unusable and uninhabitable?

It is undisputed that there is a legal easement of right-of-way in favor of the Republic. We are
unable t sustain Republic's argument that it is not liable to pay consequential damages if in
enforcing the legal easement of Andaya's property, the remaining area would be rendered
unusable and uninhabitable.

TAKING in the exercise of the power of eminent domain occurs not only when the government
actually deprives or dispossesses the property owner of his property or of its ordinary use, but
also when there is practical destruction or material impairment of the value of his property.
Using this standard, there was undoubtedly a taking of the remaining area of Andaya's property.

True, no burden was imposed thereon and Andaya still retained title and possession of the
property. But the nature and the effect of the floodwalls would deprive Andaya of the normal use
of the remaining areas. It would prevent ingress and egress to the property and turn it into a
catch basin for the floodwaters coming form the Agusan River.

For this reason, in our view, Andaya is entitled to payment of just compensation, which must be
neither more nor less that the monetary equivalent of the land.

JC (Just Compensation) = FMV (Fair Market Value) + CD(Consequential Damages)


- CB (Consequential Benefits) (CBshould not exceed CD)

Eminent Domain is the substantive law. Expropriation is the procedural law. Public use or public
purpose may cater only to a minority.

National Power Corporation V. Hon. Sylva G. Aguirre Paderanga, 464 Scra 481 (2005)

Facts:
The Court of Appeals Decision dated June 6, 2002, as well as its Resolution dated August 30,
2002, affirming the decision of the Regional Trial Court of Danao City, Branch 25 which granted
the complaint for expropriation filed by herein petitioner National Power Corporation (NPC)
against herein respondents "Petrona Dilao et al." are being assailed in the present Petition for
Review on Certiorari. To implement its Leyte-Cebu Interconnection Project, the NPC filed on
March 19, 1996 before the Regional Trial Court of Danao City a complaint for expropriation of
parcels of land situated at Baring and Cantumog, Carmen, Cebu against Dilao and siblings, and
Enriquez. The complaint covers 7,281 square meters of land co-owned Petrona O. Dilao (Dilao)
and siblings, and 7,879 square meters of land owned by Estefania Enriquez (Enriquez). A day
after the complaint was filed or on March 20, 1996, NPC filed an urgent ex parte motion for the
issuance of writ of possession of the lands. Dilao filed her Answer with Counterclaim on April 19,
1996. Enriquez did not. On May 9, 1996, Branch 25 of the RTC Danao, issued an Order
granting NPCs motion for the issuance of writ of possession. It then appointed a Board of
Commissioners to determine just compensation.
Issue: Whether or not the just compensation for right-of-way easement being expropriated is
proper.

Ruling:
There are two stages in every act of expropriation. 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. 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. The order fixing the just compensation on the basis of the
evidence before the commissioners would be final. In the case at bar, the easement of right-of-
way is definitely a taking under the power of eminent domain. Considering the nature and effect
of the installation of the transmission lines, the limitation imposed by NPC against the use of the
land for an indefinite period deprives private respondents of its ordinary use. It cannot be
opposed that NPCs complaint merely involves a simple case of mere passage of transmission
lines over Dilao et. Als sproperty. Aside from the actual damage done to the property
transversed by the transmission lines, the agricultural and economic activity normally
undertaken on the entire property is unquestionably restricted and perpetually hampered as the
environment is made dangerous to the occupants life and limb.

The appeal sought by NPC does not stand on both procedural and substantive grounds. The
just compensation recommended, which was approved by the trial court, to be just and
reasonable compensation for the expropriated property of Dilao and her siblings.

REPUBLIC VS. GINGOYON


GR # 166429, December 19, 2005 (Constitutional Law Eminent Domain, Expropriation, Just
Compensation)
FACTS: NAIA 3, a project between the Government and the Philippine International Air
Terminals Co., Inc (PIATCO) was nullified.
Planning to put NAIA 3 facilities into immediate operation, the Government, through
expropriation filed a petition to be entitled of a writ of possession contending that a mere
deposit of the assessed value of the property with an authorized government depository is
enough for the entitlement to said writ (Rule 67 of the Rules of Court).
However, respondents avers that before an entitlement of the writ of possession is issued, direct
payment of just compensation must be made to the builders of the facilities, citing RA No. 8974
and a related jurisprudence (2004 Resolution).
ISSUE: WON expropriation can be conducted by mere deposit of the assessed value of the
property.
HELD: No, in expropriation proceedings, entitlement of writ of possession is issued only after
direct payment of just compensation is given to property owner on the basis of fairness. The
same principle applied in the 2004 Jurisprudence Resolution and the latest expropriation law
(RA No. 8974).
Kelo v. City of New London

Brief Fact Summary. In 2000, the city of New London approved a development plan that, in the
words of the Supreme Court of Connecticut, was projected to create in excess of 1,000 jobs, to
increase tax and other revenues, and to revitalize an economically distressed city, including its
downtown and waterfront areas. The city purchased property and seeks to enforce eminent
domain to acquire the remaining parcels from unwilling owners.

Synopsis of Rule of Law. The court had previously held in the Midkiff case that such economic
development qualified as a valid public use under both the Federal and State Constitutions.
The court has to meet two burdens for eminent domain- (1) that the takings of the particular
properties at issue were reasonably necessary to achieve the Citys intended public use and
(2) that the takings were for reasonably foreseeable needs. Facts. In 2000, the city of New
London approved a development plan that, in the words of the Supreme Court of Connecticut,
was projected to create in excess of 1,000 jobs, to increase tax and other revenues, and to
revitalize an economically distressed city, including its downtown and waterfront areas. The
city purchased property and seeks to enforce eminent domain to acquire the remaining parcels
from unwilling owners. The City did not plan to open the condemned land to the general public,
nor were the private lessees of the land required to operate like common carriers.

Issue. Whether the citys proposed disposition of this property qualifies as a public use within
the meaning of the Takings Clause of the Fifth Amendment.

Held. The citys proposed disposition of petitioners property qualifies as a public use within
the meaning of the Takings Clause. Public use in this case was broadly interpreted to mean
public purpose.

Dissent. OConnor, J., filed a dissenting opinion, in which Rehnquist, C. J., and Scalia and
Thomas, JJ., joined. Thomas, J., filed a dissenting opinion. The three dissenting justices would
have imposed a heightened standard of judicial review for takings justified for economic
development.
Concurrence Kennedy, J., filed a concurring opinion adding that even with a deferential
standard of review, a taking should not survive the public use test if there is a clear showing that
its purpose is to favor a particular private party, with only incidental or pretextual public
benefits.

Discussion. This jurisprudence has long recognized the needs of society vary greatly between
different parts of the Nation. Earlier cases embodied a strong theme of federalism, emphasizing
the great respect owed to state legislatures and state courts in discerning local public needs.
Public needs used to be according to rigid formulas and intrusive scrutiny in favor of affording
legislatures broad latitude in determining what public needs justified the use of the takings
power. The court must look to the entire Plans importance and the Citys overall interest in the
economic benefits derived from the development.
NATIONAL POWER CORPORATION, Petitioner, v. SPOUSES RODOLFO ZABALA and LILIA
BAYLON, Respondents.

FACTS:
On October 27, 1994, plaintiff-appellant National Power Corporation (Napocor) filed a complaint
for Eminent Domain against defendants-appellees Sps. R. Zabala & L. Baylon, before the RTC,
Balanga City, Bataan alleging that Spouses Zabala and Baylon own parcels of land located in
Balanga City, Bataan and that it urgently needed an easement of right of way over the affected
areas for its 230 KV Limay-Hermosa Transmission Lines. The Commissioners submitted their
Report/ Recommendation fixing the just compensation at P150.00 per square meter. Napocor
prayed that the report be recommitted to the commissioners for the modification of the report
and the substantiation of the same with reliable and competent documentary evidence based on
the value of the property at the time of its taking. The Commissioners submitted their Final
Report fixing the just compensation at P500.00 per square meter.

On June 28, 2004, the RTC rendered its Partial Decision and ordered Napocor to pay
Php150.00 per square meter for the 6,820 square meters determined as of the date of the
taking of the property.

Napocor appealed to the CA arguing that the Commissioners reports are not supported by
documentary evidence. Napocor argued that the RTC did not apply Section 3A of R.A. No. 6395
which limits its liability to easement fee of not more than 10% of the market value of the property
traversed by its transmission lines. CA affirmed the RTCs Partial Decision.

ISSUE: Whether or not the RTC erred in fixing the amount of Php150.00 per square meter as
the fair market value of the property subject of the easement right of way of Napocor?

HELD: The petition is partially meritorious.

CONSTITUTIONAL LAW: just compensation

Sec. 3A of RA No. 6395 cannot restrict the constitutional power of the courts to determine just
compensation. The payment of just compensation for private property taken for public use is
guaranteed no less by our Constitution and is included in the Bill of Rights. As such, no
legislative enactments or executive issuances can prevent the courts from determining whether
the right of the property owners to just compensation has been violated. It is a judicial function
that cannot be usurped by any other branch or official of the government. Statutes and
executive issuances fixing or providing for the method of computing just compensation are not
binding on courts and, at best, are treated as mere guidelines in ascertaining the amount
thereof.

The Supreme Court has held in a long line of cases that since the high- tension electric current
passing through the transmission lines will perpetually deprive the property owners of the
normal use of their land, it is only just and proper to require Napocor to recompense them for
the full market value of their property.

REMEDIAL LAW: commissioners report

The just compensation of P150.00 per square meter as fixed by the RTC is not supported by
evidence. Just compensation cannot be arrived at arbitrarily. Several factors must be
considered, such as, but not limited to, acquisition cost, current market value of like properties,
tax value of the condemned property, its size, shape, and location. But before these factors can
be considered and given weight, the same must be supported by documentary evidence.

Under Section 8, Rule 67 of the Rules of Court, the trial court may accept or reject, whether in
whole or in part, the commissioners report which is merely advisory and recommendatory in
character. It may also recommit the report or set aside the same and appoint new
commissioners. In this case, however, in spite of the insufficient and flawed reports of the
Commissioners and Napocors objections thereto, the RTC eventually adopted the same. It
shrugged off Napocors protestations and limited itself to the reports submitted by the
Commissioners.

Lastly, it should be borne in mind that just compensation should be computed based on the fair
value of the subject property at the time of its taking or the filing of the complaint, whichever
came first. Since in this case the filing of the eminent domain case came ahead of the taking,
just compensation should be based on the fair market value of spouses Zabalas property at the
time of the filing of Napocors Complaint on October 27, 1994 or thereabouts.

Petition is PARTIALLY GRANTED. Case is REMANDED to the RTC for the proper
determination of just compensation.

APO Fruits Corp vs CA, Land bank of the Philippines

514 SCRA 537 Civil Law Property Eminent Domain Determination of Just Compensation

APO Fruits Corporation, Inc. (AFC) and Hijo Plantation Inc. (HPI) were owners of 5 parcels of
land (1338.60 has.) located in San Isidro, Tagum, Davao. On 12 October 1995, the two
voluntarily offered to sell the properties to the DAR. DAR offered P86.9 million for AFCs land
and P164.40 million for HPIs land (total of about P251.3 million). AFC, HPI and DAR cannot
agree on a price hence the Complaint for Determination of Just Compensation was filed before
the DAR Adjudication Board on 14 February 1997. The DARAB failed to render a decision on
the valuation of the land for three years. But nevertheless, the government, through the Land
Bank of the Philippines, deposited P26M into AFCs account and P45M into HPIs account as
down payment in 1996. The DAR also caused the titling of the land in the name of the Republic
of the Philippines in December 1996. Later, titles were given to farmers under the CARP
(Comprehensive Agrarian Reform Program).

Due to DARABs failure to adjudicate, AFC and HPI filed a complaint for determination of just
compensation before the RTC of Davao which rendered a decision in favor of AFC and HPI. The
RTC ruled, based on the reports it gathered from assessors, that the purchase price should be
higher than what was offered by DAR; that the purchase price should be at P103.33/ sq. m; that
DAR is to pay AFC and HPI a total of P1.38 billion. DAR appealed to the CA, the CA reversed
the RTC.

ISSUE: Whether or not there was just compensation.

HELD: No. AFCs and HPIs land were taken in 1996 without just compensation. 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.
The RTCs finding is to be sustained as it based its ruling on evidence. DAR was given chance
to support its ruling on why the purchase price should be at a lower amount but DAR failed to
present such evidence. To allow the taking of landowners properties, and to leave them empty-
handed while government withholds compensation is undoubtedly oppressive.

The concept of just compensation embraces not only the correct determination of the amount to
be paid to the owners of the land, but also the payment of the land within a reasonable time
from its taking. Without prompt payment, compensation cannot be considered just inasmuch
as the property owner is being made to suffer the consequences of being immediately deprived
of his land while being made to wait for a decade or more before actually receiving the amount
necessary to cope with his loss.

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 measure is not the
takers gain but the owners loss. The word just is used to intensify the meaning of the word
compensation to convey the idea that the equivalent to be rendered for the property to be
taken shall be real, substantial, full, and ample.

The power of expropriation is by no means absolute (as indeed no power is absolute). The
limitation is found in the constitutional injunction that private property shall not be taken for
public use without just compensation and in the abundant jurisprudence that has evolved from
the interpretation of this principle. Basically, the requirements for a proper exercise of the power
are:

(1) public use and

(2) just compensation.

Section 57 of Republic Act No. 6657 (Comprehensive Agrarian Reform Law) provides:

SEC. 57. Special Jurisdiction. The Special Agrarian Courts shall have original and exclusive
jurisdiction over all petitions for the determination of just compensation to landowners, and the
prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all
proceedings before the Special Agrarian Courts, unless modified by this Act

Section 17 of Republic Act No. 6657, which is particularly relevant, providing as it does the
guideposts for the determination of just compensation, reads, as follows:

Sec. 17. Determination of Just Compensation. In determining just compensation, the cost of
acquisition of the land, the current value of like properties, its nature, actual use and income,
the sworn valuation by the owner, the tax declarations, and the assessment made by
government assessors shall be considered. The social and economic benefits contributed by
the farmers and the farm-workers and by the Government to the property as well as the non-
payment of taxes or loans secured from any government financing institution on the said land
shall be considered as additional factors to determine its valuation.

Note should be taken that in said Appraisal Report, permanent improvements on AFCs and
HPIs lands have been introduced and found existing, e.g., all weather-road network, airstrip,
pier, irrigation system, packing houses, among others, wherein substantial amount of capital
funding have been invested in putting them up.

The agricultural properties of AFC and HPI are just a stones throw from the residential and/or
industrial sections of Tagum City, a fact DAR should never ignore. The market value of the
property (plus the consequential damages less consequential benefits) is determined by such
factors as the value of like properties, its actual or potential use, its size, shape and location.
Therefore, AFC and HPI is entitled to the amount of just compensation (Php 1.38 billion) as
computed with 12% interest per annum plus attorneys fees amounting to 10% of the just
compensation or P138 million.

Read full text (February 6, 2007)

xx

541 SCRA 117 Civil Law Damages Attorneys Fees Interest

Land Bank filed a motion for reconsideration averring, among others, that the award of
attorneys fees and interest is not proper because (1) it did not delay payment as proven by the
fact that they already deposited payment into the accounts of AFC and HPI (see facts above),
and (2) theres no substantial factual basis for the award of the 10% attorneys fees (P138
million in total for attorneys fees!).

Land Bank, in the same motion, also prayed that the case be referred to the Supreme Court en
banc.

ISSUE: Whether or not Land Bank is correct as far as the interest and attorneys fees are
concerned.

HELD: Yes. The Supreme Court agreed that indeed there was no delay in payment. It was just
that there was no proper computation of the amount of just compensation. Anent the issue of
attorneys fees, Land Bank is also correct. Attorneys fees as a rule is not recoverable except if
so alleged in the complaint and properly justified. In this case, AFCs and HPIs allegation that
they were constrained to go to court because of the delay of payment entitled them to receive
attorneys fees is not tenable. The SC determined that the delay in payment was not the fault of
Land Bank but rather it was the fault of AFC and HPI for failing to follow the proper procedure in
filing cases. What AFC/HPI should have done was when they did not agree with Land Banks
valuation they should not have filed two complaints with DAR and waited for three years they
should have filed the complaint directly with the RTC which will sit as a Special Agrarian Court
and should not have waited for three years. Hence, the delay and the expenses AFC/HPI
incurred were a result of their own actions.

Land Banks prayer to refer the case to the SC en banc was denied by the SC 3rd Division.
Read full text (December 19, 2007)

xx

April 30, 2008 Remedial Law Prohibited Pleading (Second Motion for Reconsideration in the
SC level)
Political Law Constitutional Law Division Cases vs En Banc Cases

Not satisfied with the decision (above), Land Bank filed an Omnibus Motion for Reconsideration.
It avers that that this case should be referred to the Supreme Court sitting en banc because the
decision on just compensation which was promulgated by the Third Division of the Supreme
Court will practically reverse a doctrine handed down by another division and that as a rule no
doctrine or principle of law laid down by the court in a decision rendered en banc or in
division may be modified or reversed except by the court sitting en banc.

On the other hand, AFC and HPI also filed their (first) MFR contesting the deletion of the award
of interest and attorneys fees.

ISSUE: Whether or not Land Bank is correct.

HELD: No. In the first place, the Omnibus Motion for Reconsideration should be denied
because it is already a second motion for reconsideration which is a prohibited pleading and
against the Internal Rules of the SC. Second, this decision of the third division is different to the
other cases cited by Land Bank as these other cases have different factual background, hence,
the rule that only the SC en banc may reverse a doctrine or principle is not violated.

The MFR by AFC and HPI was denied.

NOTE: This ruling became final on May 16, 2008 (Read digest below)

Read full text (April 30, 2008)

xx

607 SCRA 200 Remedial Law Second Motion for Reconsideration Immutability of
Judgment

Not satisfied, on May 28, 2008, AFC and HPI filed a Motion for Leave to file and admit a Second
Motion for Reconsideration (unlike Land Bank which filed a 2nd MFR without asking for leave of
court first). This is notwithstanding the fact that the decision of the Thrid Division already
became final on May 16, 2008. AFC and HPI readily attached their MFR.

AFC and HPI are assailing the deletion of the award of interest and attorneys fees.
This time also, the Third Division of the Supreme Court referred this case to the Supreme Court
en banc.

ISSUE: Whether or not the motion for leave should be granted.

HELD: No. The Supreme Court, via majority decision, reiterated the ruling of the Third Division
of the Supreme Court that AFC/HPI are not entitled to the award of interest and attorneys
fees.

It also emphasized that the parties cannot be allowed to file a second motion for reconsideration
because of the doctrine of immutability of judgment. A judgment that has acquired finality
becomes immutable and unalterable, and may no longer be modified in any respect even if the
modification is meant to correct erroneous conclusions of fact or law and whether it will be made
by the court that rendered it or by the highest court of the land. In this case, the judgment
already became final on May 16, 2008. Sure there are exceptions to this rule, to wit:

(1) the correction of clerical errors;

(2) the so-called nunc pro tunc entries that cause no prejudice to any party;

(3) void judgments; and

(4) whenever circumstances transpire after the finality of the decision rendering its execution
unjust and inequitable.

But none of these exceptions are applicable in this case. In fact, the private claim by AFC and
HPI does not even qualify either as a substantial or transcendental matter, or as an issue of
paramount public interest, for no special or compelling circumstance has been presented to
warrant the relaxation of the doctrine of immutability in their favor.

Read full text (December 4, 2009)

xx

632 SCRA 727 Civil Law Award of Interest


Political Law Constitutional Law Eminent Domain Just Compensation Doctrine of
Transcendental Importance

Still not satisfied with the December 4, 2009 Resolution, AFC and HPI filed a motion for
reconsideration on the said Resolution. (Note: This is the third MFR but is technically
the first MFR filed by AFC/HPI concerning the December 4, 2009 Resolution). In their Motion,
AFC and HPI pointed out that the principle of immutability of judgment cannot be applied
because in the first place, the entry of judgment of the April 30, 2008 Resolution was made on
May 16, 2008 which was still within the prescriptive period for them to file their MFR (though it
was not indicated what date AFC and HPI received the April 30, 08 Resolution); and second,
this case involves a paramount public concern hence it should be taken as an exception to the
rule (Doctrine of Transcendental Importance).

AFC and HPI invoked their right for their claim of interest and did not invoke anymore their claim
for attorneys fees.

ISSUE: Whether or not AFCs and HPIs motion for reconsideration should be granted.

HELD: Yes. AFC and HPI is correct in asserting their right to interest. They rightfully argued
that the interest is part of just compensation. Hence, the earlier Decision by the SC which
states that there was no delay on the part of Land Bank because it actually made a
downpayment, albeit for the wrongfully computed amount of just compensation, is wrong. In
fact, there is actually delay in payment.

It is to be noted that the government immediately took over the property of AFC and HPI without
the full payment. In fact, AFC and HPI were immediately deprived of their property. And for 12
years, they were deprived of the payment of the correct amount of just compensation. It is
therefore proper to award interest in this case. The rate of interest should be 12% per annum
(legal rate, but note that we now have a new legal rate, see Nacar vs Gallery Frames) to be
computed from the day the downpayment was made in 1996 until full payment of the just
compensation. This is justified because when the land was taken away from AFC and HPI
without being paid the proper amount, they were not only deprived of the land but were also
deprived of the rightful profit and gains they would have had from their property and were made
to wait for a long time just so to be paid the proper amount of just compensation.

So as a rule, 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 this case since downpayment was made, reckoning point shall be the day
when downpayment was made; interest to be computed against unpaid balance).

Read full text (October 12, 2010)

Note: Land Bank filed another Motion for Reconsideration which was denied by the Supreme
Court on November 23, 2010 (see the full text of the Resolution here).

xx

647 SCRA 207 Political Law Doctrine of Transcendental Importance Eminent Domain

Still not satisfied, Land Bank filed a second motion for reconsideration with request for oral
arguments. The Solicitor General also sought to intervene (rightly so because of the amount
involved). Land Bank assails the applicability of the Doctrine of Transcendental Importance as
applied by the SC in awarding interest in favor of AFC and HPI. Land Bank argues that the said
doctrine cannot be applied because neither life nor liberty is involved in this case. Land Bank
insisted that the real issue in this case is the mere payment of money, a private claim, which in
no way affects public interest.

ISSUE: Whether or not Land Bank is correct.

HELD: No. This case goes beyond the private interests involved; it involves a matter of public
interest the proper application of a basic constitutionally-guaranteed right, namely, the right of
a landowner to receive just compensation when the government exercises the power of eminent
domain in its agrarian reform program. A proper computation of just compensation will
encourage more people to participate in the land reform program of the government.

Note: Motion for oral arguments was denied. Sol-Gens motion to intervene was likewise denied
because SC said the government was already well represented by Land Bank. Finally, SC ruled
no further pleading on this case shall be entertained and parties may be subjected to
disciplinary actions if further pleadings are filed.

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 179334 July 1, 2013

SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS and DISTRICT


ENGINEER CELESTINO R. CONTRERAS, Petitioners,
vs.
SPOUSES HERACLEO and RAMONA TECSON, Respondents.

DECISION

PERALTA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Court
of Appeals (CA) Decision1 dated July 31, 2007 in CA-G.R. CV No. 77997. The assailed decision
affirmed with modification the Regional Trial Court (RTC)2 Decision3 dated March 22, 2002 in
Civil Case No. 208-M-95.

The case stemmed from the following factual and procedural antecedents:

Respondent spouses Heracleo and Ramona Tecson (respondents) are co-owners of a parcel of
land with an area of 7,268 square meters located in San Pablo, Malolos, Bulacan and covered
by Transfer Certificate of Title (TCT) No. T-430064 of the Register of Deeds of Bulacan. Said
parcel of land was among the properties taken by the government sometime in 1940 without the
owners consent and without the necessary expropriation proceedings and used for the
construction of the MacArthur Highway.5

In a letter6 dated December 15, 1994, respondents demanded the payment of the fair market
value of the subject parcel of land. Petitioner Celestino R. Contreras (petitioner Contreras), then
District Engineer of the First Bulacan Engineering District of petitioner Department of Public
Works and Highways (DPWH), offered to pay the subject land at the rate of P0.70 per square
meter per Resolution of the Provincial Appraisal Committee (PAC) of Bulacan.7 Unsatisfied with
the offer, respondents demanded for the return of their property or the payment of compensation
at the current fair market value.8

As their demand remained unheeded, respondents filed a Complaint9 for recovery of possession
with damages against petitioners, praying that they be restored to the possession of the subject
parcel of land and that they be paid attorneys fees.10 Respondents claimed that the subject
parcel of land was assessed at P2,543,800.00.11

Instead of filing their Answer, petitioners moved for the dismissal of the complaint on the
following grounds: (1) that the suit is against the State which may not be sued without its
consent; (2) that the case has already prescribed; (3) that respondents have no cause of action
for failure to exhaust administrative remedies; and (4) if respondents are entitled to
compensation, they should be paid only the value of the property in 1940 or 1941.12
On June 28, 1995, the RTC issued an Order13 granting respondents motion to dismiss based on
the doctrine of state immunity from suit. As respondents claim includes the recovery of
damages, there is no doubt that the suit is against the State for which prior waiver of immunity is
required. When elevated to the CA,14 the appellate court did not agree with the RTC and found
instead that the doctrine of state immunity from suit is not applicable, because the recovery of
compensation is the only relief available to the landowner. To deny such relief would undeniably
cause injustice to the landowner. Besides, petitioner Contreras, in fact, had earlier offered the
payment of compensation although at a lower rate.Thus, the CA reversed and set aside the
dismissal of the complaint and, consequently, remanded the case to the trial court for the
purpose of determining the just compensation to which respondents are entitled to recover from
the government.15 With the finality of the aforesaid decision, trial proceeded in the RTC.

The Branch Clerk of Court was initially appointed as the Commissioner and designated as the
Chairman of the Committee that would determine just compensation,16 but the case was later
referred to the PAC for the submission of a recommendation report on the value of the subject
property.17 In PAC Resolution No. 99-007,18the PAC recommended the amount of P1,500.00 per
square meter as the just compensation for the subject property.

On March 22, 2002, the RTC rendered a Decision,19 the dispositive portion of which reads:

WHEREFORE, premises considered, the Department of Public Works and Highways or its duly
assigned agencies are hereby directed to pay said Complainants/Appellants the amount of One
Thousand Five Hundred Pesos (P1,500.00) per square meter for the lot subject matter of this
case in accordance with the Resolution of the Provincial Appraisal Committee dated December
19, 2001.

SO ORDERED.20

On appeal, the CA affirmed the above decision with the modification that the just compensation
stated above should earn interest of six percent (6%) per annum computed from the filing of the
action on March 17, 1995 until full payment.21

In its appeal before the CA, petitioners raised the issues of prescription and laches, which the
CA brushed aside on two grounds: first, that the issue had already been raised by petitioners
when the case was elevated before the CA in CA-G.R. CV No. 51454. Although it was not
squarely ruled upon by the appellate court as it did not find any reason to delve further on such
issues, petitioners did not assail said decision barring them now from raising exactly the same
issues; and second, the issues proper for resolution had been laid down in the pre-trial order
which did not include the issues of prescription and laches. Thus, the same can no longer be
further considered. As to the propriety of the propertys valuation as determined by the PAC and
adopted by the RTC, while recognizing the rule that the just compensation should be the
reasonable value at the time of taking which is 1940, the CA found it necessary to deviate from
the general rule. It opined that it would be obviously unjust and inequitable if respondents would
be compensated based on the value of the property in 1940 which is P0.70 per sq m, but the
compensation would be paid only today. Thus, the appellate court found it just to award
compensation based on the value of the property at the time of payment. It, therefore, adopted
the RTCs determination of just compensation of P1,500.00 per sq m as recommended by the
PAC. The CA further ordered the payment of interest at the rate of six percent (6%) per annum
reckoned from the time of taking, which is the filing of the complaint on March 17, 1995.

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 COURTS


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.

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 CAs
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

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 owners
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, x x x 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.

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,35 respondents 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 respondents property,
no expropriation proceedings were initiated.1wphi1 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:

x x x "The 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 x x x.39
Both the RTC and the CA recognized that the fair market value of the subject property in 1940
was P0.70/sq m.40Hence, 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

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 pet1t10n is PARTIALLY GRANTED. The Court of


Appeals Decision dated July 31, 2007 in CAG.R. CV No. 77997 is MODIFIED, in that the
valuation of the subject property owned by respondents shall be F0.70 instead of P1,500.00 per
square meter, with interest at six percent ( 6o/o) per annum from the date of taking in 1940
instead of March 17, 1995, until full payment.

SO ORDERED.
AMOS P. FRANCIA JR., et. al. v. MUNICIPALITY OF MERCAUAYAN

G.R. No. 170432, 24 March 2008, First Division, (Corona, J.)

Before a local government unit may enter into the possession of the property
sought to be expropriated, it must (1) file a complaint for expropriation sufficient in
form and substance in the proper court and (2) deposit with the said court at least
15% of the property's fair market value based on its current tax declaration. The
law does not make the determination of a public purpose a condition precedent to
the issuance of a writ of possession.

A Complaint for expropriation was filed by respondent Municipality of Meycauayan,


Bulacan against the property of petitioners Amos Francia, Cecilia Francia and
Benjamin Francia. The Municipality of Meycauayan seeks to use the said property in
order to establish a common public terminal for all public utility vehicles. The
Regional Trial Court (RTC) ruled that the expropriation was for public purpose and
issued an Order of Expropriation.

On appeal, the Court of Appeals partially granted the petition. It nullified the Order
of Expropriation except with regard to the writ of possession. It upheld the decision
of the RTC that in issuance of writ of possession, prior determination of the
existence of public purpose is necessary.

ISSUE:

Whether or not prior determination of existence of public purpose is necessary


before the issuance of writ of possession

HELD:

Petition denied.

Section 19 of Republic Act 7160 provides:

Section 19. Eminent Domain. A local government unit may, through its chief
executive and acting pursuant to an ordinance, exercise the power of eminent
domain for public use, or purpose, or welfare for the benefit of the poor and the
landless, upon payment of just compensation, pursuant to the provisions of the
Constitution and pertinent laws; Provided, however, That the power of eminent
domain may not be exercised unless a valid and definite offer has been previously
made to the owner, and that such offer was not accepted; Provided, further, That
the local government unit may immediately take possession of the property upon
the filing of the expropriation proceedings and upon making a deposit with the
proper court of at least fifteen percent (15%) of the fair market value of the property
based on the current tax declaration of the property to be expropriated; Provided,
finally, That, the amount to be paid for the expropriated property shall be
determined by the proper court, based on the fair market value at the time of the
taking of the property.

Before a local government unit may enter into the possession of the property
sought to be expropriated, it must (1) file a complaint for expropriation sufficient in
form and substance in the proper court and (2) deposit with the said court at least
15% of the property's fair market value based on its current tax declaration. The law
does not make the determination of a public purpose a condition precedent to the
issuance of a writ of possession.