5/26/2017 G.R.No.

188995

RepublicofthePhilippines
SupremeCourt
Manila
FIRSTDIVISION


EXPORTPROCESSINGZONE G.R.No.188995
AUTHORITY(NOWPHILIPPINE
EXPORTZONEAUTHORITY),
Petitioner, Present:


versus CORONA,C.J,Chairperson,
LEONARDODECASTRO,
BERSAMIN,
JOSEPULIDO,VICENTA DELCASTILLO,and
PANGANIBAN,RURALBANKOF VILLARAMA,JR.,JJ.
SALINAS,INC.,FRANCISCAM.
PRODIGALIDAD,ABELARDO
PRODIGALIDAD,CARMEN Promulgated:
PRECIOSA
TABLANTE,CARMENCITAM.
PRODIGALIDAD,MELVINJ.
BOUCHER,MARYLOUM. August24,2011
PRODIGALIDAD,SALVADOR
MENES,JR.,DELILAHM.
PRODIGALIDAD,NANNETTEM.
PRODIGALIDAD,ANSELMOM.
PRODIGALIDADIII,
GREGORIOM.PRODIGALIDAD,
ANDESTATEOFSALUD
JIMENEZ,
Respondents.
xx

DECISION


BERSAMIN,J.:

In this appeal, we heed the plea of the owner of expropriated property for the much
delayed payment of just compensation by affirming the decision promulgated on April 20,

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[1] [2]
2009 and the resolution dated July 20, 2009, whereby the Court of Appeals (CA)
respectivelyupheldthedecision rendered on September 19, 2005 by the Regional Trial Court
[3]
(RTC),Branch17,inCaviteCity, anddeniedthepetitionersmotionforreconsideration.

Antecedents

The controversy has its genesis in the action for the expropriation of three parcels of
irrigatedricelandsituatedinRosario,CavitethatthepetitionercommencedonMay15,1981in
[4]
the Court of First Instance of Cavite against the several individual owners. The parcels of
Riceland were: (a) Lot 1408, with an area of 31,426 square meters and covered by Transfer
CertificateofTitle(TCT)No.T2908oftheRegistryofDeedsofCaviteinthenamesofJose
Pulido and Vicenta Panganiban (b) Lot 1409B2, with an area of 32,907 square meters and
covered by TCT No. T70724 of the Registry of Deeds of Cavite coowned by Francisco
ProdigalidadandMedardoProdigalidadand(c)Lot1406,withanareaof26,008squaremeters
andcoveredbyTCTNo.T113498registeredinthenameofSaludJimenez.

Duringthependencyofthecase,Lot1406wassubdividedintoLot1406A(withanarea
of12,890squaremeters)and1406B(withanareaof13,118squaremeters).

On July 11, 1991, the RTC sustained the right of the petitioner to expropriate the three
parcelsofriceland,butlaterpartlyreconsideredandreleasedLot1406Afromexpropriation.

ThepetitionerappealedtotheCA.
OnJanuary4,1993,thepetitionerandtheEstateofSaludJimenez(duetoSaludJimenez
havingmeanwhilediedonOctober30,1984)enteredintoaCompromiseAgreement,stipulating
essentiallyasfollows:

(a) That the petitioner agrees to withdraw its appeal from the Order of the
Honorable Court dated October 25, 1991 which released lot 1406A from the
expropriation proceedings and the Estate of Jimenez, in turn, agrees to waive,
quitclaimandforfeititsclaimfordamagesandlossofincomewhichitsustained
by reason of the possession of [Lot 1406A] by [EPZA] from 1981 up to the
present

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(b)ThepartiesagreethattheEstateofSaludJimenezwouldtransferLot1406Bto
thepetitionerinexchangeforlot434withanareaof14,167squaremetersand
coveredbyTransferCertificateofTitleNo.14772oftheRegistryofDeedsof
Cavite

(c)Theswaparrangementrecognizesthefactthatthelot1406Bxxxisconsidered
expropriatedinfavorofthegovernmentandthepaymentforwhichbeingLot
434and

(d)Thepartiesagreethattheywillabidebythetermsoftheforegoingagreementin
good faith and the Decision to be rendered based on this Compromise
Agreementisimmediatelyfinalandexecutory.

Induetime,theCAremandedthecasetotheRTCfortheconsiderationandapprovalof
theCompromiseAgreement.

OnAugust23,1993,theRTCapprovedtheCompromiseAgreement.

Contrary to its express undertaking under the Compromise Agreement, the petitioner
failedtotransferthetitleofLot434totheEstateofSaludJimenezbecausetheregisteredowner
wasProgressiveRealtyEstate,Inc.,notthepetitioner.Asaresult,onMarch13,1997,theEstate
ofSaludJimenezfiledaMotiontoPartiallyAnnultheOrderdatedAugust23,1993.

On August 4, 1997, the RTC annulled the Compromise Agreement and directed the
petitionertopeacefullyreturnLot1406BtotheEstateofSaludJimenez.

The petitioner went to the CA by petition for certiorari and prohibition, essentially to
nullifytheorderdatedAugust4,1997.

InitsdecisionpromulgatedonMarch25,1998,theCApartiallygrantedthepetitionfor
certiorari and prohibition set aside the order of the RTC on the return of Lot 1406B to the
Estate of Salud Jimenez and directed that the RTC determine the just compensation for Lot
1406B.

Upon the CAs denial of its Motion for Reconsideration, the Estate of Salud Jimenez
[5]
appealedtotheCourt(G.R.No.137285).

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[6]
On January 16, 2001, the Court promulgated its decision in G.R. No. 137285,
disposing:

WHEREFORE,theinstantpetitionisherebydenied.TheRegionalTrialCourtofCavite
City is hereby ordered to proceed with the hearing of the expropriation proceedings,
docketed as Civil Case No. N4029, regarding the determination of just compensation for
Lot 1406B, covered and described in TCT No. T113498Cavite, and to resolve the same
withdispatch.

SOORDERED.

The Court explained in G.R. No.137285 that the Estate of Salud Jimenez had already
acknowledgedtheproprietyoftheexpropriationofLot1406BbyenteringintotheCompromise
AgreementandthattheprovisionsoftheCompromiseAgreementhadconsequentlyrelatedonly
totheformormodeofpaymentofthejustcompensationforLot1406B,thatis,inlieuofcash,
anotherlot(Lot434)wastobedeliveredasjustcompensationtotheEstateofSaludJimenez,
stating:
xxxTheonlyissueforconsiderationisthemannerandamountofpaymentdueto[theEstateof
Salud Jimenez]. In fact, aside from the withdrawal of [PEZAs] appeal to the Court of Appeals
concerningLot1406A,thematterofpaymentofjustcompensationwastheonlysubjectofthe
compromiseagreementdatedJanuary4,1993.Underthecompromiseagreement,[theEstateof
Salud Jimenez] was supposed to receive [PEZAs] Lot No. 434 in exchange for Lot 1406B.
When[PEZA]failedtofulfilitsobligationtodeliverLot434,[theEstateofSaludJimenez]can
again demand for the payment but not the return of the expropriated Lot 1406B. This
interpretationbytheCourtofAppealsisinaccordancewithSections4to8,Rule67oftheRules
[7]
ofCourt.

Considering that the decision in G.R. No.137285 became final and executory, the RTC
conducted proceedings to determine the just compensation for Lot 1406B. During the trial,
however,thepetitionerraisedtheissueofwhetherthejustcompensationshouldbebasedonthe
valueorassessmentrateprevailingin1981orin1993,insistingthatthejustcompensationfor
Lot 1406B should be equivalent to its fair market value in 1981, the time of the filing of its
expropriation complaint, which was the time of the taking. The Estate of Salud Jimenez
contended, in contrast, that the just compensation should be reckoned as of August 4, 1997,
whentheCompromiseAgreementwasannulledandsetaside.

[8]
Initsdecision, theRTCresolvedthat:

(a) The just compensation for Lot 1406B should be based on the value or
assessment rate prevalent in 1993, the year the parties entered into the
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CompromiseAgreement and thereby agreed that the just compensation for Lot
1406BwasLot434

(b) The just compensation of Lot 1406B was P6,200.00/square meter as
substantiatedbytheseveraldocumentspresentedtoshowthevalueofproperties
adjacenttoLot1406B,namely:(1)theDeedofSaleofLot1406Aexecutedin
1994, whereby one of the heirs of Salud Jimenez sold the lot to the Manila
ElectricCompany(MERALCO)forP6,395.00/squaremeter(2)acertifiedtrue
copyofthe1998zonalvaluationofpropertiesalongthePEZARoad,Barangay
Tejero, Cavite City, containing the zonal valuations of residential and
commercial properties in the area to be, respectively, P4,000.00/square meter
and P8,000.00/square meter (3) an appraisal report on Lot 1406B by an
independentappraiserstatingthatthevalueofpropertiesinthevicinityofLot
1406BwasP7,500.00/squaremeterin1997and(4)otherdocumentsshowing
payment of just compensation by PEZA to the owners of previously
expropriatedpropertiesadjacenttoornearLot1406Band

(c)Thetotalcompensationtobepaidshouldbearinterestatthelegalratereckoned
fromAugust23,1993.

[9]
On appeal, the CA affirmed the decision of the RTC. Hence, the petitioner comes to
theCourttoseekafurtherreview.

Issue

ThepetitionernowsubmitsthatjustcompensationforLot1406BwasonlyP41,610.00,
theequivalentofthezonalvaluationofLot1406BunderTaxDeclarationNo.7252issuedin
1981thatanyamountaboveLot1406Bs1981zonalvaluationwouldunjustlyenrichtheEstate
ofSaludJimenezduetotheescalatedpriceoftheexpropriatedpropertyandthattheEstateof
SaludJimenezwasentitledonlytocompensationforthelossofitsvacantandidlelandatthe
timeoftakingand/orfilingofthecomplaint,whichevercamefirst,andnottotheincremental
benefitthathasbeenderivedtherefromaftertheintroductionofimprovementstheretoby[the
[10]
petitioner].

Ontheotherhand,theEstateofSaludJimenezmaintainsthatjustcompensationforLot
1406B must be based on the value of the property (and of other properties adjacent to it) in
1993 when the parties entered into the Compromise Agreement and agreed that the just

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compensationforLot1406BwasLot434,orLot434sequivalentvalue.TheEstateofSalud
JimenezarticulatesthereasoninitsComment,thuswise:

[T]heperemptoryexercisebythestateofitspowertoexpropriatethesubjectlothasbeen
extremelypainfultotheoriginalowner,SaludJimenez,whoalreadyexpiredonOctober30,1984
withoutanymoreenjoyingthefruitsofherproperty.Thereafter,herheirslikewisefailedtosavor
the produce or income of the land for twenty eight (28) long years up to the present time. In
contrast,petitionerwithoutpayingasinglecentavofortheland,hascollectedmillionsofpesos
from the lessee banks and bus and jitney operators and continue to reap a bounty from the
property. It cannot be gainsaid that petitioner [PEZA] has been unfairly harsh to herein
respondentwhenitfoistedalanduponwhichithasnolegaltitle.Inthisfactualmilieu,justice
and equity demand that an equitable relief be granted to herein respondent to fix the just
compensationasof1993andnotonMay15,1981whichisthedateoffilingofthecomplaint.
[11]

TheissueissimplywhetherornotjustcompensationshouldbebasedonthevalueofLot
1406Bprevailingin1981orin1993.

Ruling

Thepetitionforreviewlacksmerit.

1.
JustcompensationforLot1406Bmustbe
basedonvalueofpropertyprevailingin1993

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 petitioners
interpositionoftheissueontheproperreckoningpointforcomputingthejustcompensationfor
Lot1406B.AreadingofthedecisioninG.R.No.137285exposestheinterpositionasnothing
more than an insincere attempt of the petitioner to delay the inevitable performance of its
obligationtopayjustcompensationforLot1406B.Indeed,theCourtpronouncedtherethatthe
compromiseagreementwasonlyaboutthemodeofpaymentbyswappingoflotsxxx,onlythe
[12] [13]
originallyagreedformofcompensationthatisby[lot ]payment,wasrescinded.

That pronouncement became the law of the case, anything to the contrary of which the
petitionercouldnotvalidlyrelyupon.Thedoctrineofthelawofthecasemeansthatwhateveris
irrevocablyestablishedasthecontrollinglegalrulebetweenthesamepartiesinthesamecase,
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whethercorrectongeneralprinciplesornot,continuestobethelawofthecaseforaslongas
thefactsonwhichthelegalrulewaspredicatedcontinuetobethefactsofthecasebeforethe
[14]
court. Itappliesinasituationwhereanappellatecourthasmadearulingonaquestionon
appealandthereafterremandsthecasetothelowercourtforfurtherproceedingsthequestion
thensettledbytheappellatecourtbecomesthelawofthecasebindingthelowercourtandany
[15]
subsequentappeal, andquestionsnecessarilyinvolvedanddealtwithinaformerappealwill
be regarded as the law of the case in a subsequent appeal, although the questions are not
expresslytreatedintheopinionofthecourt,inasmuchasthepresumptionisthatallthefactsin
the case bearing on the point decided have received due consideration whether all or none of
[16]
themarementionedintheopinion.

To reiterate, in G.R. No. 137285, the Court upheld the annulment of the Compromise
Agreementandrecognizedthattheagreeduponmodeofpaymentofthejustcompensationfor
Lot1406BwithLot434wascancelled.ItisnotablethattheCourtmentionednothingtherein
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 Courts
acknowledgment that the parties understood and accepted, by entering into the Compromise
Agreementin1993,thatthejustcompensationforLot1406BwasLot434(orthevalueofLot
434,whichatthetimeoftheswapin1993wasdefinitelymuchhigherthanLot434svaluein
1981).

Accordingly,wecompletelyagreewiththeRTCsobservationthatwhenthepartiessigned
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
defendantwouldbecompensatedonthebasisofprevailingvaluesatthetimeoftheagreement.
[17]
We further completely agree with the CAs conclusion that by agreeing to a land swap in
1993 in the illfated compromise agreement, [PEZA] had impliedly agreed to paying just
[18]
compensationusingthemarketvaluesin1993.

2.
P6,200.00/squaremeteristhecorrect
justcompensationforLot1406B

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WiththeannulmentoftheCompromiseAgreement,thepaymentofjustcompensationfor
Lot1406Bnowhastobemadeincash.Inthatregard,theorderoftheCourttoremandtothe
RTC for the determination of just compensation was indubitably for the sole objective of
ascertainingtheequivalentmonetaryvaluein1993ofLot1406BorLot434.

Induecourse,theRTCfoundthatjustcompensationofLot1406BwasP6,200.00/square
meter.Suchfinding,whichtheCAupheld,tookintodueconsiderationtheclearandconvincing
evidenceprovingthefairvaluationofpropertiessimilarandadjacenttoLot1406Batornear
1993,thetimeinquestion,namely:

(a)Thedeedofsaleexecutedin1994byoneoftheheirsofthelateSaludJimenez
tosellLot1406AtoMERALCOforP6,395.00/squaremeter

(b)Acertifiedtruecopyofthe1998zonalvaluationofpropertiesalongthePEZA
Road,BarangayTejero,CaviteCityshowingthezonalvaluationsofresidential
andcommercialpropertiesinthevicinityofLot1406BtobeP4,000.00/square
meterandP8,000.00/squaremeter,respectively

(c)AnappraisalreportdoneonLot1406Bbyanindependentappraiserstatingthat
thevalueofpropertiesinthevicinityofLot1406BwentforP7,500.00/square
meterin1997and

(d) Other documents showing payments of just compensation by PEZA to the
ownersofotherpreviouslyexpropriatedpropertiesadjacenttoornearLot1406
B.

TheuniformfindingsoffactuponthequestionofjustcompensationreachedbytheCA
andtheRTCareentitledtothegreatestrespect.TheyareconclusiveontheCourtintheabsence
of a strong showing by the petitioner that the CA and the RTC erred in appreciating the
establishedfactsandindrawinginferencesfromsuchfacts.Weconcurwiththefindings.

3.
EstateofSaludJimenezentitledto
Interestof12%perannum

Thepowerofeminentdomainisnotanunlimitedpower.Section9,ArticleIIIofthe1987
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

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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
[19]
determinedisthejustcompensation.InApoFruitsCorporationv.LandBank, theCourthas
heldthatcompensationcannotbejusttotheownerinthecaseofpropertythatisimmediately
taken unless there is prompt payment, considering that the owner thereby immediately suffers
notonlythelossofhispropertybutalsothelossofitsfruitsorincome.Thus,inaddition,the
owner is entitled to legal interest from the time of the taking of the property until the actual
paymentinordertoplacetheownerinapositionasgoodas,butnotbetterthan,thepositionhe
[20]
wasinbeforethetakingoccurred.

It is undeniable that just compensation was not promptly made to the Estate of Salud
Jimenez for the taking of Lot 1406B by the petitionerThe move to compensate through the
swap arrangement under the Compromise Agreement was aborted or amounted to nothing
throughnofaultoftheEstateofSaludJimenez.Thepetitioner,whichshouldhaveknownabout
theinefficacyoftheswappingofLot434forLot1406B,couldevenbesaidtohaveresortedto
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..Inviewofthis,theCAsfixingoflegalinterestatonly6%perannumcannotbe
upheldandmustbecorrected,forthatratewouldnotensurethatcompensationwasjustinthe
faceofthelongdelayinpayment.

AlreadyinG.R.No.137285,theCourtnotedthelongdelayinpaymentandwasnaturally
prompted to strongly condemn the cavalier attitude of government officials who adopt such a
[21]
despoticandirresponsiblestance,quotingfromCosculluelav.CourtofAppeals, that:

[I]tishightimethatthepetitionerbepaidwhatwasduehimelevenyearsago.Itis
arbitrary and capricious for a government agency to initiate expropriation proceedings,
seizeapersonsproperty,allowajudgmentofthecourttobecomefinalandexecutoryand
thenrefusetopayonthegroundthattherearenoappropriationsforthepropertyearlier
takenandprofitablyused.Wecondemninthestrongestpossibletermsthecavalierattitude
[22]
ofgovernmentofficialswhoadoptsuchadespoticandirresponsiblestance.

Accordingly, we hereby impose 12% interest per annum on the unpaid gross value of
P81,331,600.00 for Lot 1406B (i.e., 13,118 square meters x P6,200.00/square meter) from

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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
[23]
accordswithalonglineofpertinentjurisprudence, wherebytheCourthasimposedinterest
at12%perannumineminentdomainwhenevertheexpropriatorhasnotimmediatelydelivered
thejustcompensation.

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
April20,2009,subjecttotheMODIFICATIONthatthelegalinterestchargeableontheunpaid
just compensation for Lot 1406B is 12% per annum reckoned from August 23, 1993 on the
unpaidgrossvalueofP81,331,600.00forLot1406B.


This decision is immediately final and executory, and no further pleadings shall be
allowed.

Thepetitionershallpaythecostsofsuit.

SOORDERED.



LUCASP.BERSAMIN
AssociateJustice

WECONCUR:

RENATOC.CORONA
ChiefJustice
Chairperson




TERESITAJ.LEONARDODECASTROMARIANOC.DELCASTILLO
AssociateJusticeAssociateJustice

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MARTINS.VILLARAMA,JR.
AssociateJustice


CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the
aboveDecisionhadbeenreachedinconsultationbeforethecasewasassignedtothewriterof
theopinionoftheCourtsDivision.



RENATOC.CORONA
ChiefJustice

[1]
Rollo,pp.3352pennedbyAssociateJusticeRomeoF.Barza,andconcurredinbyAssociateJusticeBienvenidoL.Reyesand
AssociateJusticeArcangelitaM.RomillaLontok(retired).
[2]
Id.,pp.5455.
[3]
Id.,pp.6270.
[4]
Id.,pp.7481.
[5]
Id.,pp.150199.
[6]
349SCRA240.
[7]
Id.,p.258.
[8]
Rollo,pp.6270.
[9]
Supra,note1.
[10]
Rollo,p.23.
[11]
Id.,p.310.
[12]
Thewordcashwaserroneouslyused.
[13]
EstateofSaludJimenezv.PhilippineExportProcessingZone,supra,note6,p.259.
[14]
Vios, et al. v. Pantangco, Jr., G.R. No. 163103, February 6, 2009, 578 SCRA 129 citing Baes v. Lutheran Church in the
Philippines G.R. No. 142308, November 15, 2005, 475 SCRA 13, 3031United Overseas Bank of the Philippines v. Rose Moor
Mining and Development Corporation, G.R. No. 172651, October 2, 2007, 534 SCRA 528, 542543 citing Padillo v. Court of
Appeals,G.R.No.119707,November29,2001,371SCRA27,4143.
[15]
Viosv.Pantangco,Jr.,G.R.No.163103,February6,2009,578SCRA129.
[16]
Peoplev.Pinuila,103Phil.992,999(1958).
[17]
Supra,note3.
[18]
Supra,note1.
[19]
G.R.No.164195,October12,2010,632SCRA727.
[20]
Republicv.CourtofAppeals,G.R.No.146587,July2,2002,383SCRA611,wheretheCourtopines:

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The constitutional limitation of just compensation is considered to be the sum equivalent to the market value of the
property,broadlydescribedtobethepricefixedbythesellerinopenmarketintheusualandordinarycourseoflegalaction
andcompetitionorthefairvalueofthepropertyasbetweenonewhoreceives,andonewhodesirestosell,itfixedatthetime
oftheactualtakingbythegovernment.Thus,ifpropertyistakenforpublicusebeforecompensationisdepositedwiththe
courthavingjurisdictionoverthecase,thefinalcompensationmustincludeinterestsonitsjustvaluetobecomputedfrom
thetimethepropertyistakentothetimewhencompensationisactuallypaidordepositedwiththecourt.Infine,between
thetakingofthepropertyandtheactualpayment,legalinterestsaccrueinordertoplacetheownerinapositionasgood
as(butnotbetterthan)thepositionhewasinbeforethetakingoccurred.
[21]
G.R.No.L77765,August15,1988,164SCRA393,401.
[22]
Seenote6atpp.264265.
[23]
Apo Fruits Corporation v. Land Bank of the Philippines, G.R. No. 164195, October 12, 2010, 632 SCRA 727 Curata v.
PhilippinePortsAuthority,G.R.No.15421112,June22,2009,590SCRA214PhilippinePortsAuthorityv.RosalesBondoc,G.R.
No. 173392, August 24, 2007, 531 SCRA 198 Land Bank v. Imperial, G.R. No. 157753, February 12, 2007, 515 SCRA 449
Republicv.CourtofAppeals,G.R.No.147245,March31,2005,454SCRA516LandBankv.Wycoco,G.R.No.140160,January
13, 2004, 419 SCRA67Reyes v. National Housing Authority, G.R. No. 147511, January 20, 2003, 395 SCRA 494 Republic v.
CourtofAppeals,G.R.No.146587,July2,2002,383SCRA611EasternShippingLines,Inc.v.CourtofAppeals,G.R.No.97412,
July12,1994,234SCRA78.

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