exprop cases

THIRD DIVISION

[G.R. No. 146886. April 30, 2003]

DEVORAH E. BARDILLON, petitioner, vs. BARANGAY MASILI of Calamba, Laguna, respondent.

D E C I S I O N

PANGANIBAN, J.:

An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls within the jurisdiction of regional trial courts, regardless of the value of the subject property.

The Case

Before us is a Petition for Review1[1] under Rule 45 of the Rules of Court, seeking to set aside the January 10, 2001 Decision and the February 5, 2001 Resolution of the Court of Appeals2[2] (CA) in CA-GR SP No. 61088. The dispositive part of the Decision reads:

“WHEREFORE, premises considered, the present [P]etition for [C]ertiorari is hereby DENIED DUE COURSE and accordingly DISMISSED, for lack of merit.”3[3]

The assailed Resolution4[4] denied petitioner’s Motion for Reconsideration.

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The Facts

The factual antecedents are summarized by the CA as follows:

“At the root of this present [P]etition is the controversy surrounding the two (2) [C]omplaints for eminent domain which were filed by herein respondent for the purpose of expropriating a ONE HUNDRED FORTY FOUR (144) square meter-parcel of land, otherwise known as Lot 4381-D situated in Barangay Masili, Calamba, Laguna and owned by herein petitioner under Transfer Certificate of Title No. 383605 of the Registry of Deeds of Calamba, Laguna. Petitioner acquired from Makiling Consolidated Credit Corporation the said lot pursuant to a Deed of Absolute Sale which was executed by and between the former and the latter on October 7, 1996.

“The first [C]omplaint for eminent domain, docketed as Civil Case No. 3648 and entitled ‘Brgy. Masili, Calamba, Laguna v. Emelita A. Reblara, Eugenia Almazan & Devorah E. Bardillon,’ was filed before the Municipal Trial Court of Calamba, Laguna (‘MTC’) on February 23, 1998, following the failure of Barangay Masili to reach an agreement with herein petitioner on the purchase offer of TWO HUNDRED THOUSAND PESOS (P200,000.00). The expropriation of Lot 4381-D was being pursued in view of providing Barangay Masili a multi-purpose hall for the use and benefit of its constituents.

“On March 5, 1999, the MTC issued an order dismissing Civil Case No. 3648 ‘for lack of interest’ for failure of the [respondent] and its counsel to appear at the pre-trial. The MTC, in its Order dated May 3, 1999, denied [respondent’s] [M]otion for [R]econsideration thereof.

“The second [C]omplaint for eminent domain, docketed as Civil Case No. 2845-99-C and entitled ‘ Brgy. Masili, Calamba, Laguna v. Devorah E. Bardillon, ’ was filed before Branch 37 of the Regional Trial Court of Calamba, Laguna (‘RTC’) on October 18, 1999. This [C]omplaint also sought the expropriation of the said Lot 4381-D for the erection of a multi-purpose hall of Barangay Masili, but petitioner, by way of a Motion to Dismiss, opposed this [C]omplaint by alleging in

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the main that it violated Section 19(f) of Rule 16 in that [respondent’s] cause of action is barred by prior judgment, pursuant to the doctrine of res judicata .

“On January 21, 2000, [the] Judge issued an order denying petitioner’s Motion to Dismiss, holding that the MTC which ordered the dismissal of Civil Case No. 3648 has no jurisdiction over the said expropriation proceeding.

“With the subsequent approval of Municipal Ordinance No. 2000-261 on July 10, 2000, and the submission thereof in compliance with [the] Judge’s Order dated June 9, 2000 requiring herein respondent to produce the authority for the expropriation through the Municipal Council of Calamba, Laguna, the assailed Order dated August 4, 2000 was issued in favor of Barangay Masili x x x and, on August 16, 2000, the corresponding order for the issuance of the [W]rit of [P]ossession over Lot 4381-D.”5[5]

Ruling of the Court of Appeals

In dismissing the Petition, the CA held that the Regional Trial Court (RTC) of Calamba, Laguna (Branch 37)6[6] did not commit grave abuse of discretion in issuing the assailed Orders. It ruled that the second Complaint for eminent domain (Civil Case No. 2845-99-C) was not barred by res judicata. The reason is that the Municipal Trial Court (MTC), which dismissed the first Complaint for eminent domain (Civil Case No. 3648), had no jurisdiction over the action.

Hence, this Petition.7[7]

The Issues

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In her Memorandum, petitioner raises the following issues for our consideration:

“A. Whether or not, the Honorable Respondent Court committed grave abuse of discretion amounting to lack of jurisdiction when it denied and dismissed petitioner’s appeal;

“B. Whether or not, the Honorable Respondent Court committed grave abuse of discretion when it did not pass upon and consider the pending Motion for Reconsideration which was not resolved by the Regional Trial Court before issuing the questioned Orders of 4 and 16 August 2000;

“C. Whether or not, the Honorable Respondent Court committed grave abuse of discretion in taking the total amount of the assessed value of the land and building to confer jurisdiction to the court a quo;

“D. Whether or not, the Honorable Respondent Court committed grave abuse of discretion in ignoring the fact that there is an existing multi-purpose hall erected in the land owned by Eugenia Almazan which should be subject of expropriation; and

“E. Whether or not, the Honorable Respondent Court committed grave abuse of discretion in failing to consider the issue of forum shopping committed by Respondent Masili.”8[8]

Simply put, the issues are as follows: (1) whether the MTC had jurisdiction over the expropriation case; (2) whether the dismissal of that case before the MTC constituted res judicata; (3) whether the CA erred when it ignored the issue of entry upon the premises; and (4) whether respondent is guilty of forum shopping.

The Court’s Ruling

The Petition has no merit.


First Issue:Jurisdiction Over Expropriation

Petitioner claims that, since the value of the land is only P11,448, the MTC had jurisdiction over the case.9[9]

On the other hand, the appellate court held that the assessed value of the property was P28,960.10[10] Thus, the MTC did not have jurisdiction over the expropriation proceedings, because the amount involved was beyond the P20,000 jurisdictional amount cognizable by MTCs.

An expropriation suit does not involve the recovery of a sum of money. Rather, it deals with the exercise by the government of its authority and right to take property for public use.11[11] As such, it is incapable of pecuniary estimation and should be filed with the regional trial courts.12

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This was explained by the Court in Barangay San Roque v. Heirs of Francisco Pastor:13[13]

“It should be stressed that the primary consideration in an expropriation suit is whether the government or any of its instrumentalities has complied with the requisites for the taking of private property. Hence, the courts determine the authority of the government entity, the necessity of the expropriation, and the observance of due process. In the main, the subject of an expropriation suit is the government’s exercise of eminent domain, a matter that is incapable of pecuniary estimation.

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“True, the value of the property to be expropriated is estimated in monetary terms, for the court is duty-bound to determine the just compensation for it. This, however, is merely incidental to the expropriation suit. Indeed, that amount is determined only after the court is satisfied with the propriety of the expropriation.”

“Verily, the Court held in Republic of the Philippines v. Zurbano that ‘condemnation proceedings are within the jurisdiction of Courts of First Instance,’ the forerunners of the regional trial courts. The said case was decided during the effectivity of the Judiciary Act of 1948 which, like BP 129 in respect to RTCs, provided that courts of first instance had original jurisdiction over ‘all civil actions in which the subject of the litigation is not capable of pecuniary estimation.’ The 1997 amendments to the Rules of Court were not intended to change these jurisprudential precedents.”14[14]

To reiterate, an expropriation suit is within the jurisdiction of the RTC regardless of the value of the land, because the subject of the action is the government’s exercise of eminent domain -- a matter that is incapable of pecuniary estimation.

Second Issue:Res Judicata

Petitioner claims that the MTC’s dismissal of the first Complaint for eminent domain was with prejudice, since there was no indication to the contrary in the Order of dismissal. She contends that the filing of the second Complaint before the RTC should therefore be dismissed on account of res judicata.

Res judicata literally means a matter adjudged, judicially acted upon or decided, or settled by judgment.15[15] It provides that a final judgment on the merits rendered by a court of competent jurisdiction is conclusive as

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to the rights of the parties and their privies; and constitutes an absolute bar to subsequent actions involving the same claim, demand or cause of action.16[16]

The following are the requisites of res judicata: (1) the former judgment must be final; (2) the court that rendered it had jurisdiction over the subject matter and the parties; (3) it is a judgment on the merits; and (4) there is -- between the first and the second actions -- an identity of parties, subject matter and cause of action.17[17]

Since the MTC had no jurisdiction over expropriation proceedings, the doctrine of res judicata finds no application even if the Order of dismissal may have been an adjudication on the merits.

Third Issue:Legality of Entry Into Premises

Petitioner argues that the CA erred when it ignored the RTC’s Writ of Possession over her property, issued despite the pending Motion for Reconsideration of the ruling dismissing the Complaint. We are not persuaded.

The requirements for the issuance of a writ of possession in an expropriation case are expressly and specifically governed by Section 2 of Rule 67 of the 1997 Rules of Civil Procedure.18[18] On the part of local government units, expropriation is also governed by Section 19 of the Local Government Code.19[19] Accordingly, in expropriation proceedings, the requisites for authorizing immediate entry are as follows: (1) the filing of a complaint for expropriation sufficient in form and substance; and (2) the deposit of the amount equivalent to 15

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percent of the fair market value of the property to be expropriated based on its current tax declaration.20[20]

In the instant case, the issuance of the Writ of Possession in favor of respondent after it had filed the Complaint for expropriation and deposited the amount required was proper, because it had complied with the foregoing requisites.

The issue of the necessity of the expropriation is a matter properly addressed to the RTC in the course of the expropriation proceedings. If petitioner objects to the necessity of the takeover of her property, she should say so in her Answer to the Complaint.21[21] The RTC has the power to inquire into the legality of the exercise of the right of eminent domain and to determine whether there is a genuine necessity for it.22[22]

Fourth Issue:Forum Shopping

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Petitioner claims that respondent is guilty of forum shopping, because it scouted for another forum after obtaining an unfavorable Decision from the MTC.

The test for determining the presence of forum shopping is whether the elements of litis pendentia are present in two or more pending cases, such that a final judgment in one case will amount to res judicata in another.23[23]

Be it noted that the earlier case lodged with the MTC had already been dismissed when the Complaint was filed before the RTC. Even granting arguendo that both cases were still pending, a final judgment in the MTC case will not constitute res judicata in the RTC, since the former had no jurisdiction over the expropriation case.

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioner.

SO ORDERED.

Puno, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

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[G.R. No. 135866. June 28, 1999]

BARANGAY DUYAN-DUYAN vs. MANUEL PEREZ, et al.

FIRST DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated JUN 28, 1999.

G.R. No. 135866 (Barangay Duyan-Duyan vs. Manuel Perez, et al.)

Petitioner filed the present petition for review on certiorari assailing the Decision of the Court of Appeals in CA G.R. CV No. 50194 dated June 5, 1998 and the corresponding Resolution dated October 5, 1998.


As antecedents, defendants/respondents Manuel Perez and Mercedes Perez are owners of a parcel of land covered by TCT No. RT-41127 situated in Quirino District, quezon City. Said parcel of land is registered in the name of respondent spouses. However, said lot has bee in possession of herein petitioner Barangay Duyan-Duyan since June 11, 1978.\Upon discovery that barangay hall was built on their property, private respondent filed an ejectment case against the petitioner which was successful. However, while the ejectment case was on appeal before the Regional Trial Court petitioner Barangay Duyan-Duyan filed an action for Expropriation and/or Eminent Domain before the Regional Trial Court of Quezon City. Whereupon both cases were consolidated. The Regional Trial Court resolved in favor of the petitioner, to wit:

WHEREFORE, in view of the foregoing, judgment is hereby rendered, ordering the condemnation of the property covered by TCT No. 41127 for purposes of expropriation and that the plaintiff Barangay Duyan-Duyan has the lawful right to take possession of the above described property for public use and purpose upon payment of just compensation to the defendants to be determined from the time this complaint was filed.

SO ORDERED.1 [Rollo, p. 22.]

On appeal, the Court of Appeals reversed the decision on the ground that the expropriation procedure was not properly complied with by the petitioner. Thus:

The Local Government Code refers to an offer which is made prior to at action to improve and use the property as a public facility. However, the fact herein is clear that there has been no offer previously made before the property was actually expropriated for public use sometime in 1988. In fact, the ejectment case was successfully pursued as

the barangay hall was built without even the knowledge much less the consent of the owners thereof. No building permit was ever presented. What may pass for an offer was embodied in a resolution made only in 1993, while the discovered building was admittedly built and was in use since 1988. The act of expropriation by the barangay officials was thus clearly an ultra vires act for being contrary to the legal guidelines therefor.

Moreover, the validity of the Offer embodied in the Resolution can also be faulted raised (sic) on two points: First, the questioned fair market value as submitted was more than One Million pesos while the offer was an arbitrary sum of One Hundred Twenty Five Thousand Pesos only. While expropriation is not intended to equal the fair market value of property, there has to be "reasonable" compensation to be determined by the court. it is notable though that the Offer covers only about ten per cent of the appraised market value. This is further aggravated by a latter deposit of P37,560.00, being the assessed value of the property for purposes of taxation. Secondly, the procedure was not followed in the passage of the Barangay Resolution which was not submitted to the City Council for review as mandated in the Local Government Code. In effect, the same was merely a pro forma offer to gloss over the usurpation of private property by the barangay.2 [Id., at 15.]

Hence, the present petition.

The petition is bereft of merit.

Section 19 of the Local Government Code 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 precisely made to the owner, and 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 (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.

In the exercise of this power, the State must at all times abide by the requirements of due process. The above-quoted provisions clearly outlines the steps to be taken before a local government unit may exercise its power of eminent domain. A valid offer must first be made to the owners of the property, and it is only when the offer is rejected that expropriation proceedings may be instituted. In the instant case, no valid offer was first made to the owner of the property before the complaint for expropriation was filed. Moreover, as the Court of Appeals found, petitioner took possession of the property ahead of the filing of the expropriation proceedings. This act is clearly incompatible with the procedure for expropriation required by law.

IN VIEW OF THE FOREGOING, the Court Resolved to DENY the petition.

Very truly yours,

(Sgd.) VIRGINIA ANCHETA-SORIANO

Clerk of Court

Republic of the Philippines

Supreme Court

Manila

THIRD DIVISION

HON. VICENTE P. EUSEBIO, LORNA A. BERNARDO, VICTOR ENDRIGA, and the CITY OF PASIG,

Petitioners,

G.R. No. 162474

Present:

CARPIO, J., Chairperson,


- versus -

JOVITO M. LUIS, LIDINILA LUIS SANTOS, ANGELITA CAGALINGAN, ROMEO M. LUIS, and VIRGINIA LUIS-BELLESTEROS,*

Respondents.

CHICO-NAZARIO,

VELASCO, JR.,

NACHURA, and

PERALTA, JJ.

Promulgated:

October 13, 2009

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D E C I S I O N

PERALTA, J.:

This resolves the Petition for Review on Certiorari under Rule 45 of

the Rules of Court, praying that the Decision24[1] of the Court of Appeals

(CA) dated November 28, 2003, affirming the trial court judgment, and the

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CA Resolution25[2] dated February 27, 2004, denying petitioners’ motion for

reconsideration, be reversed and set aside.

The antecedent facts are as follows:

Respondents are the registered owners of a parcel of land covered by

Transfer Certificate of Title Nos. 53591 and 53589 with an area of 1,586

square meters. Said parcel of land was taken by the City of Pasig sometime

in 1980 and used as a municipal road now known as A. Sandoval Avenue,

Barangay Palatiw, Pasig City. On February 1, 1993, the Sanggunian of Pasig

City passed Resolution No. 15 authorizing payments to respondents for said

parcel of land. However, the Appraisal Committee of the City of Pasig, in

Resolution No. 93-13 dated October 19, 1993, assessed the value of the land

only at P150.00 per square meter. In a letter dated June 26, 1995, respondents

requested the Appraisal Committee to consider P2,000.00 per square meter as

the value of their land.

One of the respondents also wrote a letter dated November 25, 1994

to Mayor Vicente P. Eusebio calling the latter’s attention to the fact that a

property in the same area, as the land subject of this case, had been paid for

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by petitioners at the price of P2,000.00 per square meter when said property

was expropriated in the year 1994 also for conversion into a public road.

Subsequently, respondents’ counsel sent a demand letter dated August 26,

1996 to Mayor Eusebio, demanding the amount of P5,000.00 per square

meter, or a total of P7,930,000.00, as just compensation for respondents’

property. In response, Mayor Eusebio wrote a letter dated September 9, 1996

informing respondents that the City of Pasig cannot pay them more than the

amount set by the Appraisal Committee.

Thus, on October 8, 1996, respondents filed a Complaint for

Reconveyance and/or Damages (Civil Case No. 65937) against herein

petitioners before the Regional Trial Court (RTC) of Pasig City, Branch 155.

Respondents prayed that the property be returned to them with payment of

reasonable rental for sixteen years of use at P500.00 per square meter, or

P793,000.00, with legal interest of 12% per annum from date of filing of the

complaint until full payment, or in the event that said property can no longer

be returned, that petitioners be ordered to pay just compensation in the

amount of P7,930,000.00 and rental for sixteen years of use at P500.00 per

square meter, or P793,000.00, both with legal interest of 12% per annum from

the date of filing of the complaint until full payment. In addition, respondents

prayed for payment of moral and exemplary damages, attorney’s fees and

costs.

After trial, the RTC rendered a Decision26[3] dated January 2, 2001,

the dispositive portion of which reads as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the plaintiffs and against the defendants:

1. Declaring as ILLEGAL and UNJUST the action of the defendants in taking the properties of plaintiffs covered by Transfer Certificates of Title Nos. 53591 and 53589 without their consent and without the benefit of an expropriation proceedings required by law in the taking of private property for public use;

2. Ordering the defendants to jointly RETURN the

subject properties to plaintiffs with payment of reasonable rental for its use in the amount of P793,000.00 with legal interest at the rate of 6% per annum from the filing of the instant Complaint until full payment is made;

3. In the event that said properties can no longer be returned to the plaintiffs as the same is already being used as a public road known as A. Sandoval Avenue, Pasig City, the defendants are hereby ordered to jointly pay the plaintiffs the fair and reasonable value therefore at P5,000.00 per square meter or a total of P7,930,000.00 with payment of reasonable rental for its use in the amount of P500.00 per square meter or a total of P793,000.00, both with legal interest at the rate of


6% per annum from the filing of the instant Complaint until full payment is made; and

4. Ordering the defendants to jointly pay the plaintiffs attorney’s fees in the amount of P200,000.00.

No pronouncement as to costs.

SO ORDERED.

Petitioners then appealed the case to the CA, but the CA affirmed the

RTC judgment in its Decision dated November 28, 2003.

Petitioners’ motion for reconsideration of the CA Decision was

denied per Resolution dated February 27, 2004.

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 INACTION ON THE PART OF PETITIONERS RELATIVE TO THE INSTANT CLAIM FOR JUST COMPENSATION.27[4]

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,28[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.” 29[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

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and, in the event that said property can no longer be returned, how should just

compensation to respondents be determined.

These issues had been squarely addressed in Forfom Development

Corporation v. Philippine National Railways,30[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:


x x x 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.

x x x It is settled that non-payment of just compensation does not entitle the private landowners to recover possession of their expropriated lot.31[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.”32[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 in Forfom, herein

respondents are also estopped from recovering possession of their land, but

are entitled to just compensation.

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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.33[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 Cruz34[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.”35[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

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is either grossly inadequate or excessive. Thus, the Court concluded in

Forfom that:

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.36[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,37[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.38

[15]

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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.39[16]

Explaining the reason for this rule in Manila International Airport Authority

v. Rodriguez,40[17] the Court, quoting Ansaldo v. Tantuico, Jr.,41[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

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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.’42[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.

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

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respondents. Again, in Manila International Airport Authority v.

Rodriguez,43[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 x x x.

x x x x

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 P 200,000.00 as exemplary damages , and attorney’s fees equivalent to one percent (1%) of the amount due.44[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.

44

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 duly-authorized 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.

No costs.

SO ORDERED.


DIOSDADO M. PERALTA

Associate Justice

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-56540 October 31, 1984

COSME LACUESTA, plaintiff-appellant, vs.BARANGAY CASABAAN, MUNICIPALITY OF CABANGAN, PROVINCE OF ZAMBALES, and TEOFILO RONQUILLO, defendants-appellees.

MELENCIO-HERRERA, J.:ñé+.£ªwph!1

This is an appeal certified to us by the then Court of Appeals as involving a pure question of law.

Plaintiff-appellant, Cosme Lacuesta, was the agricultural lessee of a landholding consisting of 1.6610 hectares, situated in Barangay Casabaan, Cabangan, Zambales. He was devoting a 5,000 square meter portion thereof to the planting of palay.

By virtue of expropriation proceedings against the land-owners instituted by defendant-appellee, Barangay Casabaan (the Barangay, for short), before the Court of First Instance of Zambales ( the Expropriation Case), the said Barangay was placed in possession of the same 5,000 square meter portion. Lacuesta was not a party in that case. The Barangay thereafter started converting the area into a public plaza and constructed a basketball court, a rural health center, a barangay hall and a stage.

While the Expropriation Case was pending, a claiming that he had been illegally deprived of the right to cultivate the portion expropriated, Lacuesta, litigating as a pauper, filed before the Court of Agrarian Relations of Zambales (CAR, for short), a Complaint for Reinstatement and Damages against the Barangay, represented by its Captain, Teofilo Ronquillo. Lacuesta claimed that the entry of the Barangay into the litigated portion without his consent was illegal as its deprived average annual income of 17.5 cavans of palay or its money equivalent, and that by reason he suffered moral damages of P2,000.00

In its Answer, the Barangay contended that the 5,000 square meter portion was upland, not suited for the planting of palay or corn, but for sugar cane, as shown by the Tax Declaration


covering it; that it was awarded possession by virtue of a lawful Court Order in the Expropriation Case, and that Lacuesta's claim of an annual palay harvest of 17.5 cavans of palay is unfounded.

On July 17, 1980, the CAR rendered judgment dismissing the case essentially on the ground that for reasons of comity, it may not interfere in the acts of another Court of equal rank, and who has first acquired jurisdiction over the expropriation case." The CAR further held that Lacuesta was not entitled to actual damages since the palay had already been harvested at the time of expropriation, nor to disturbance comp ensation since dispossession was not due to the causes enumerated in Section 36(l) of the Code of Agrarian Reforms (R.A. No. 3844). 1

Lacuesta assailed that judgment before the then Court of Appeals claiming that it is the CAR "which has jurisdiction to determine whether (he) ha(d) the right to be reinstated in the cultivation of the landholding. 2 He also cited Section 12(n) of P.D. No. 946, roviding that the Court of Agrarian Relations has original and exclusive jurisdiction over: têñ.£îhqwâ£

xxx xxx xxx

(n) Expropriation proceedings for public purpose of all kinds of tenanted agricultural land, whether instituted by the State, its political subdivisions and instrumentalities, or corporations and entities authorized by law to expropriate.

The legal poser is, as between the Court of First Instance (CFI) and the Court of Agrarian Relations (CAR), which Court has jurisdiction over the expropriation of a tenanted landholding?

Although the abovequoted provision of P.D. No. 946 explicitly vests jurisdiction in the CAR, it should be noted that P.D. No. 946 became effective only on June 17, 1976 or posterior to the Expropriation Case instituted on October 8, 1975. Jurisdiction, therefore, vested in the Court of First Instance where we find that no irregularity had been satisfactorily established.

The reinstatement prayed for by Lacuesta is obviously impossible of accomplishment because the public plaza had been constructed and there is no longer any area he could still cultivate.

On the issue of damages, procedurally, that should have been more properly raised in the Expropriation Case, since it was the case first instituted and it was the CFI that had first acquired jurisdiction. The Barangay had raised that point in its "Opposition to Motion for Issuance of Restraining Order and/or Issuance of Preliminary Injunction" but it evoked no reaction from Lacuesta. On the other hand, the Barangay, too, can be faulted for not having included Lacuesta as a party in the Expropriation Case as required by Section 1, Rule 67 of the Rules of Court.

But procedural lapses should not prejudice Lacuesta, whose right to security of tenure as a tenant is, in our opinion, also entitled to protection even where the power of eminent domain is exercised. Although Lacuesta admits that he is not entitled to disturbance compensation because that is only granted to a tenant-agricultural lessee whose landholding has been converted by his landowner/lessor for non-agricultural purposes and not where a tenanted farmholding is expropriated, yet, it is our opinion that Lacuesta should be entitled to some compensation for the deprivation of his farmholding. Since the amount Lacuesta claimed as damages in the Complaint has not been satisfactorily rebutted, he may be awarded 17.5 cavans of palay or its money equivalent, for a period of five years, applying by analogy the same period granted in cases where payment of disturbance compensation is warranted. 3

Lacuesta is not entitled to the moral damages that he prays for since it cannot be said that the Barangay had acted with malice and in bad faith.

WHEREFORE, the appealed judgment is hereby modified in that defendants-appellees shall pay plaintiff-appellant damages of 17.5 cavans of palay or its money equivalent in 1975, the year that expropriation took place, for a period of five years. No costs.

SO ORDERED.1äwphï1.ñët

Teehankee (Chairman), Plana, Relova, Gutierrez, Jr., and De la Fuente, JJ., concur.

Footnotes

1 Sec. 36. Possession of Landholding; Exceptions. — Notwithstanding any agreement as to the period or future surrender, of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding except when


his dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that: têñ.£îhqwâ£

(1) The landholding is declared by the department head upon recommendation of the National Planning Commission to be suited for residential, commercial, industrial or some other urban purposes: Provided, That the agricultural lessee shall be entitled to disturbance compensation equivalent to five times the average of the gross harvest of his landholding during the last five preceding calendar years.

2 Memorandum, P. 2

3 Section 36(1), R.A. 3844, supra.


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