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City of Iloilo vs. Hon.

Contreras-Besana (RTC judge), Elpidio Javellana AUTHOR: Tristan

[G.R. No. 168967, Feb. 12, 2010] NOTES:
TOPIC: Expropriation PONENTE: Del Castillo
CASE LAW/ DOCTRINE: It is arbitrary and capricious for the government to initiate expropriation proceedings, seize a person’s property, allow the order of
expropriation to become final, but then fail to justly compensate the owner for over 25 years. This is government at its most high-handed and irresponsible, and
should be condemned in the strongest possible terms. For its failure to properly compensate the landowner, the City of Iloilo is liable for damages.
 SEPTEMBER 1981: City of Iloilo filed a Complaint for eminent domain against private respondent Elpidio T. Javellana (Javellana) and Southern Negros
Development Bank, the latter as mortgagee. The complaint sought to expropriate two parcels of land of Javellana to be used as a school site for Lapaz High

 Javellana admitted ownership of the Subject Property but denied the petitioners avowed public purpose of the sought-for expropriation, since the City of
Iloilo already had an existing school site for Lapaz High School.

 On May 17, 1983, the trial court issued an Order which granted petitioners Motion for Issuance of Writ of Possession and authorized the petitioner to take
immediate possession of the Subject Property. Petitioner was able to take physical possession of the properties sometime in the middle of 1985.

 Sixteen years later, on April 17, 2000, Javellana filed an Ex Parte Motion/Manifestation, where he alleged that when he finally sought to withdraw the
P40,000.00 allegedly deposited by the petitioner, he discovered that no such deposit was ever made. In support of this contention, private respondent
presented a Certification from the Philippine National Bank stating that no deposit was ever made for the expropriation of the Subject Property.

 Thereafter, on April 2, 2003, Javellana filed a Complaint against petitioner for Recovery of Possession, Fixing and Recovery of Rental and Damages. Javellana
alleged that since he had not been compensated for the Subject Property, petitioners possession was illegal, and he was entitled to recovery of possession
of his lots. He prayed that petitioner be ordered to vacate the Subject Property and pay rentals amounting to P15,000.00 per month together with moral,
exemplary, and actual damages, as well as attorneys fees.

 RTC issued the First Assailed Order, which nullified the Order dated May 17, 1983 (concerning the issuance of a writ of possession over the Subject Property)
and ordered Iloilo to immediately deposit with the PNB the 10% of the just compensation after the Commission shall have rendered its report and have
determined the value of the property not at the time it was condemned but at the time the complaint was filed in court.

 Hence this petition wherein Iloilo argued that: 1) the trial court gravely abused its discretion amounting to lack or excess of jurisdiction in overturning the
Order dated May 17, 1983, which was already a final order; and (2) just compensation for the expropriation should be based on the Subject Property’s fair
market value either at the time of taking or filing of the complaint.

ISSUE(S): 1.) WoN the order of expropriation became final. - YES

2.) WoN reckoning point for the determination of just compensation is the date of the filing of the complaint - YES
3.) WoN Javellana is entitled to damages. – YES

HELD: Petition is Granted.

1.) RE: Finality of the order of expropriation

Expropriation proceedings have two stages. The first phase ends with an order of dismissal, or a determination that the property is to be acquired for a public
purpose. Either order will be a final order that may be appealed by the aggrieved party. The second phase consists of the determination of just compensation. It
ends with an order fixing the amount to be paid to the landowner. Both orders, being final, are appealable.

An order of condemnation or dismissal is final, resolving the question of whether or not the plaintiff has properly and legally exercised its power of eminent domain.
Once the first order becomes final and no appeal thereto is taken, the authority to expropriate and its public use can no longer be questioned.

Javellana did not bother to file an appeal from the May 17, 1983 Order which authorized petitioner to take immediate possession of the Subject Property. Thus, it
has become final, and the petitioners right to expropriate the property for a public use is no longer subject to review.

2.) RE: Reckoning Point

Just compensation is to be ascertained as of the time of the taking, which usually coincides with the commencement of the expropriation proceedings. Where the
institution of the action precedes entry into the property, the just compensation is to be ascertained as of the time of the filing of the complaint.

When the taking of the property sought to be expropriated coincides with the commencement of the expropriation proceedings, or takes place subsequent to the
filing of the complaint for eminent domain, the just compensation should be determined as of the date of the filing of the complaint.

Under Sec. 4, Rule 67 of the 1964 Rules of Procedure, under which the complaint for expropriation was filed, just compensation is to be determined as of the date
of the filing of the complaint. The school was constructed and has been in operation since 1985. Petitioner and the residents of Iloilo City have long reaped the
benefits of the property. However, non-payment of just compensation does not entitle the private landowners to recover possession of their expropriated lot.

Concededly, Javellana also slept on his rights for over 18 years and did not bother to check with the PNB if a deposit was actually made by the petitioner. Evidently,
from his inaction in failing to withdraw or even verify the amounts purportedly deposited, private respondent not only accepted the valuation made by the
petitioner, but also was not interested enough to pursue the expropriation case until the end. As such, private respondent may not recover possession of the
Subject Property, but is entitled to just compensation. It is high time that private respondent be paid what was due him after almost 30 years.

3.) RE: Damages: In Manila International Airport Authority v. Rodriguez, The Court held that a government agency’s prolonged occupation of private property
without the benefit of expropriation proceedings undoubtedly entitled the landowner to actual/compensatory damages.