just compensation & taxation cases

7/24/2019 Just Compensation & Taxation Cases

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JUST COMPENSATION

EXPORT PROCESSING ZONE AUTHORITY,petitioner,

vs.

HON. CEFERINO E. DULAY, in his capaci! as h" P#"si$in% J&$%", C' '( Fi#sInsanc" '( C")&, *#anch X+I, Lap&Lap& Ci!, an$ SAN ANTONIO DE+ELOPMENT

CORPORATION,respondents.

Elena M. Cuevas for respondents.

GUTIERREZ, JR., J.:

The question raised in this petition is whether or not Presidential Decrees Numbered 7, !!,

7"! and #$%% have repealed and superseded &ections $ to ' of (ule 7 of the (evised (ules of

Court, such that in determinin) the *ust compensation of propert+ in an epropriation case, the

onl+ basis should be its mar-et value as declared b+ the owner or as determined b+ the

assessor, whichever is lower.

n /anuar+ #$, #"7", the President of the Philippines, issued Proclamation No. #'##, reservin)

a certain parcel of land of the public domain situated in the Cit+ of 0apu10apu, 2sland of Mactan,

Cebu and coverin) a total area of #,#"%," square meters, more or less, for the establishment

of an eport processin) 3one b+ petitioner Eport Processin) 4one 5uthorit+ 6EP45.

Not all the reserved area, however, was public land. The proclamation included, amon) others,

four 6! parcels of land with an a))re)ate area of 88,%8' square meters owned and re)istered

in the name of the private respondent. The petitioner, therefore, offered to purchase the parcels

of land from the respondent in acccordance with the valuation set forth in &ection "8,

Presidential Decree 6P.D. No. !!, as amended. The parties failed to reach an a)reement

re)ardin) the sale of the propert+.

The petitioner filed with the then Court of 9irst 2nstance of Cebu, :ranch ;


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n 9ebruar+ #7, #"'#, the respondent *ud)e issued the order of condemnation declarin) the

petitioner as havin) the lawful ri)ht to ta-e the properties sou)ht to be condemned, upon the

pa+ment of *ust compensation to be determined as of the filin) of the complaint. The respondent

*ud)e also issued a second order, sub*ect of this petition, appointin) certain persons as

commissioners to ascertain and report to the court the *ust compensation for the properties

sou)ht to be epropriated.

n /une #", #"'#, the three commissioners submitted their consolidated report recommendin)

the amount of P#$.== per square meter as the fair and reasonable value of *ust compensation

for the properties.

n /ul+ 8", #"'#, the petitioner Med a Motion for (econsideration of the order of 9ebruar+ #",

#"'# and b*ection to Commissioner>s (eport on the )rounds that P.D. No. #$%% has

superseded &ections $ to ' of (ule 7 of the (ules of Court on the ascertainment of *ust

compensation throu)h commissioners? and that the compensation must not eceed the

maimum amount set b+ P.D. No. #$%%.

n November #!, #"'#, the trial court denied the petitioner>s motion for reconsideration and

)ave the latter ten 6#= da+s within which to file its ob*ection to the Commissioner>s (eport.

n 9ebruar+ ", #"'8, the petitioner flied this present petition for certiorari and mandamus with

preliminar+ restrainin) order, en*oinin) the trial court from enforcin) the order dated 9ebruar+

#7, #"'# and from further proceedin) with the hearin) of the epropriation case.

The onl+ issue raised in this petition is whether or not &ections $ to ', (ule 7 of the (evised

(ules of Court had been repealed or deemed amended b+ P.D. No. #$%% insofar as the

appointment of commissioners to determine the *ust compensation is concerned. &tated in

another wa+, is the eclusive and mandator+ mode of determinin) *ust compensation in P.D. No.

#$%% valid and constitutional@

The petitioner maintains that the respondent *ud)e acted in ecess of his *urisdiction and with

)rave abuse of discretion in den+in) the petitioner>s motion for reconsideration and in settin) the

commissioner>s report for hearin) because under P.D. No. #$%%, which is the applicable law

herein, the basis of *ust compensation shall be the fair and current mar-et value declared b+ the

owner of the propert+ sou)ht to be epropriated or such mar-et value as determined b+ the

assessor, whichever is lower. Therefore, there is no more need to appoint commissioners as

prescribed b+ (ule 7 of the (evised (ules of Court and for said commissioners to consider

other hi)hl+ variable factors in order to determine *ust compensation. The petitioner further

maintains that P.D. No. #$%% has vested on the assessors and the propert+ owners themselves

the power or dut+ to fi the mar-et value of the properties and that said propert+ owners are)iven the full opportunit+ to be heard before the 0ocal :oard of 5ssessment 5ppeals and the

Central :oard of 5ssessment 5ppeals. Thus, the vestin) on the assessor or the propert+ owner

of the ri)ht to determine the *ust compensation in epropriation proceedin)s, with appropriate

procedure for appeal to hi)her administrative boards, is valid and constitutional.

Prior to the promul)ation of P.D. Nos. 7, !!, 7"! and #$%%, this Court has interpreted the

eminent domain provisions of the Constitution and established the meanin), under the


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fundametal law, of *ust compensation and who has the power to determine it. Thus, in the

followin) cases, wherein the filin) of the epropriation proceedin)s were all commenced prior to

the promul)ation of the aforementioned decrees, we laid down the doctrine on*ust

compensationA

Municipality of Daet v. Court of Appeals6"% &C(5 $=%, $#,

B5nd in the case of /.M. Tuason Co., 2nc. v. 0and Tenure 5dministration, %# &C(5 !#%, the

Court, spea-in) thru now Chief /ustice 9ernando, reiterated the >well1settled 6rule that *ust

compensation means the equivalent for the value of the propert+ at the time of its ta-in).

5n+thin) be+ond that is more and an+thin) short of that is less, than *ust compensation. 2t

means a fair and full equivalent for the loss sustained, which is the measure of the indemnit+,

not whatever )ain would accrue to the epropriatin) entit+.B

Garcia v. Court ofappeals6#=8 &C(5 $"7, =',

Bence, in estimatin) the mar-et value, all the capabilities of the propert+ and all the uses to

which it ma+ be applied or for which it is adapted are to be considered and not merel+ the

condition it is in the time and the use to which it is then applied b+ the owner. 5ll the facts as

to the condition of the propert+ and its surroundin)s, its improvements and capabilities ma+

be shown and considered in estimatin) its value.B

Republic v. Santos6#!# &C(5 %=, %$1%,

B5ccordin) to section ' of (ule 7, the court is not bound b+ the commissioners> report. 2tma+ ma-e such order or render such *ud)ment as shall secure to the plaintiff the propert+

essential to the eercise of his ri)ht of condemnation, and to the defendant *ust

compensation for the propert+ epropriated. This Court ma+ substitute its own estimate of

the value as )athered from the record 6Manila (ailroad Compan+ v.


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P.D. No. 464:

B&ection "8. :asis for pa+ment of *ust compensation in epropriation proceedin)s. 2n

determinin) *ust compensation which private propert+ is acquired b+ the )overnment for

public use, the basis shall be the mar-et value declared b+ the owner or administrator or

an+one havin) le)al interest in the propert+, or such mar-et value as determined b+ the

assessor, whichever is lower.B

P.D. No. 74:

B&ection "8. :asis for pa+ment of *ust compensation in epropriation proceedin)s. 2n

determinin) *ust compensation when private propert+ is acquired b+ the )overnment for

public use, the same shall not eceed the mar-et value declared b+ the owner or

administrator or an+one havin) le)al interest in the propert+, or such mar-et value as

determined b+ the assessor, whichever is lower.B

P.D. No. !"##:

B&ection #. 2n determinin) *ust compensation for private propert+ acquired throu)h eminent

domain proceedin)s, the compensation to be paid shall not eceed the value declared b+ the

owner or administrator or an+one havin) le)al interest in the propert+ or determined b+ the

assessor, pursuant to the (eal Propert+ Ta Code, whichever value is lower, prior to the

recommendation or decision of the appropriate Fovernment office to acquire the propert+.B

Ge are constrained to declare the provisions of the Decrees on *ust compensation

unconstitutional and void and accordin)l+ dismiss the instant petition for lac- of merit.

The method of ascertainin) *ust compensation under the aforecited decrees constitutes

impermissible encroachment on *udicial prero)atives. 2t tends to render this Court inutile in a

matter which under the Constitution is reserved to it for final determination.

Thus, althou)h in an epropriation proceedin) the court technicall+ would still have the power to

determine the *ust compensation for the propert+, followin) the applicable decrees, its tas-

would be rele)ated to simpl+ statin) the lower value of the propert+ as declared either b+ the

owner or the assessor. 5s a necessar+ consequence, it would be useless for the court to

appoint commissioners under (ule 7 of the (ules of Court. Moreover, the need to satisf+ the

due process clause in the ta-in) of private propert+ is seemin)l+ fulfilled since it cannot be said

that a *udicial proceedin) was not had before the actual ta-in). owever, the strict application of

the decrees durin) the proceedin)s would be nothin) short of a mere formalit+ or charade as

the court has onl+ to choose between the valuation of the owner and that of the assessor, and

its choice is alwa+s limited to the lower of the two. The court cannot eercise its discretion orindependence in determinin) what is *ust or fair. Even a )rade school pupil could substitute for

the *ud)e insofar as the determination of constitutional *ust compensation is concerned.

2n the case of National $ousin% Aut&ority v. Reyes 6#8% &C(5 8!$, this Court upheld P.D. No.

!!, as further amended b+ P.D. Nos. 7"!, #88! and #8$". 2n this case, the petitioner National

ousin) 5uthorit+ contended that the owner>s declaration at P#,!==.== which happened to be

lower than the assessor>s assessment, is the *ust compensation for the respondent>s propert+


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under section "8 of P.D. No. !!. n the other hand, the private respondent stressed that while

there ma+ be basis for the alle)ation that the respondent *ud)e did not follow the decree, the

matter is still sub*ect to his final disposition, he havin) been vested with the ori)inal and

competent authorit+ to eercise his *udicial discretion in the li)ht of the constitutional clauses on

due process and equal protection.

To these opposin) ar)uments, this Court ruled ihat under the conceded facts, there should be a

reco)nition that the law as it stands must be applied? that the decree havin) spo-en so clearl+

and unequivocabl+ calls for obedience? and that on a matter where the applicable law spea-s in

no uncertain lan)ua)e, the Court has no choice ecept to +ield to its command. Ge further

stated that Bthe courts should reco)ni3e that the rule introduced b+ P.D. No. 7 and reiterated in

subsequent decrees does not upset the established concepts of *ustice or the constitutional

provision on *ust compensation for, precisel+, the owner is allowed to ma-e his own valuation of

his propert+.B

Ghile the Court +ielded to eecutive prero)ative eercised in the form of absolute law1ma-in)

power, its members, nonetheless, remained uncomfortable with the implications of the decision

and the abuse and unfairness which mi)ht follow in its wa-e. 9or one thin), the Presidenthimself did not seem assured or confident with his own enactment. 2t was not enou)h to la+

down the law on determination of *ust compensation in P.D. 7. 2t had to be repeated and

reiterated in P.D. !!, P.D. 7"!, and P.D. #$%%. The provision is also found in P.D. #88!, P.D.

#8$" and P.D. #%#%. 2nspite of its effectivit+ as )eneral law and the wide publicit+ )iven to it, the

questioned provision or an even stricter version had to be embodied in cases of specific

epropriations b+ decree as in P.D. #" epropriatin) the Tambuntin) Estate and P.D. #7=

epropriatin) the &uno) 5po) area in Tondo, Manila.

2n the present petition, we are once a)ain confronted with the same question of whether the

courts under P.D. #$%%, which contains the same provision on *ust compensation as its

predecessor decrees, still have the power and authorit+ to determine *ust compensation,independent of what is stated b+ the decree and to this effect, to appoint commissioners for

such purpose.

This time, we answer in the affirmative.

2n overrulin) the petitioner>s motion for reconsideration and ob*ection to the commissioner>s

report, the trial court saidA

B5nother consideration wh+ the Court is empowered to appoint commissioners to assess the

*ust compensation of these properties under eminent domain proceedin)s, is the well1

entrenched rulin) that >the owner of propert+ epropriated is entitled to recover fromepropriatin) authorit+ the fair and full value of the lot, as of the time when possession

thereof was actuall+ ta-en b+ the province, plus consequential dama)es includin)

attorne+>s fees from which the consequential benefits, if an+ should be deducted, with

interest at the le)al rate, on the a))re)ate sum due to the owner from and after the date of

actual ta-in).> 6Capitol &ubdivision, 2nc. v. Province of Ne)ros ccidental, 7 &C(5 =. 2n

fine, the decree onl+ establishes a uniform basis for determinin) *ust compensation which

the Court ma+ consider as one of the factors in arrivin) at >*ust compensation,> as envisa)e in

the Constitution. 2n the words of /ustice :arredo, B(espondent court>s invocation of Feneral


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rder No. % of &eptember 8#, #"78 is nothin) short of an unwarranted abdication of *udicial

authorit+, which no *ud)e dul+ imbued with the implications of the paramount principle of

independence of the *udiciar+ should ever thin- of doin).B 60ina v. Purisima, '8 &C(5 %!!,

%$#? Cf. Prov. of Pan)asinan v. C92 /ud)e of Pan)asinan, :r.


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To sa+ that the owners are estopped to question the valuations made b+ assessors since the+

had the opportunit+ to protest is illusor+. The overwhelmin) mass of land owners accept

unquestionin)l+ what is found in the ta declarations prepared b+ local assessors or municipal

cler-s for them. The+ do not even loo- at, much less anal+3e, the statements. The 2dea of

epropriation simpl+ never occurs until a demand is made or a case filed b+ an a)enc+

authori3ed to do so.

2t is violative of due process to den+ to the owner the opportunit+ to prove that the valuation in

the ta documents is unfair or wron). 5nd it is repulsive to basic concepts of *ustice and fairness

to allow the hapha3ard wor- of a minor bureaucrat or cler- to absolutel+ prevail over the

*ud)ment of a court promul)ated onl+ after epert commissioners have actuall+ viewed the

propert+, after evidence and ar)uments pro and con have been presented, and after all factors

and considerations essential to a fair and *ust determination have been *udiciousl+ evaluated.

5s was held in the case of Gi(eon v. *ain+ri%&t 6"% 50( 8d,7%%,7!8A

B2n the li)ht of these and man+ other prior decisions of this Court, it is not surprisin) that the

:etts Court, when faced with the contention that >one char)ed with crime, who is unable to

obtain counsel must be furnished counsel b+ the &tate,> conceded that >JEKpressions in the

opinions of this court lend color to the ar)ument. . .> %# H.&., at !8, !%, ' 0 ed. #=8, 8 &

Ct. #8$8. The fact is that in decidin) as it did1that Bappointment of counsel is not a fundamental

ri)ht, essential to a fair trialB the Court in :etts v. :rad+ made an ubrupt bra-e with its own

well1considered precedents. 2n returnin) to these old precedents, sounder we believe than the

new, we but restore constitutional principles established to achieve a fair s+stem of *ustice. . .B

Ge return to older and more sound precedents. This Court has the dut+ to formulate )uidin)

and controllin) constitutional principles, precepts, doctrines, or rules. 6&ee &alon)a v. Cru3

Pano, supra,.

The determination of B*ust compensationB in eminent domain cases is a *udicial function. The

eecutive department or the le)islature ma+ ma-e the initial determinations but when a part+

claims a violation of the )uarantee in the :ill of (i)hts that private propert+ ma+ not be ta-en for

public use without *ust compensation, no statute, decree, or eecutive order can mandate that

its own determination shall prevail over the court>s findin)s. Much less can the courts be

precluded from loo-in) into the B*ust1nessB of the decreed compensation.

Ge, therefore, hold that P.D. No. #$%%, which eliminates the court>s discretion to appoint

commissioners pursuant to (ule 7 of the (ules of Court, is unconstitutional and void. To hold

otherwise would be to undermine the ver+ purpose wh+ this Court eists in the first place.

GE(E9(E, 2N


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MOISES TINIO, JR. an$ FRANCIS TINIO, Petitioners,

vs.

NATIONAL PO-ER CORPORATION,(espondent.

D E C 2 & 2 N

PERALTA, J.:

:efore the Court are two consolidated petitions for review on certiorari under (ule !$ of the

(ules of Court both see-in) the reversal and settin) aside of the Decision#of the Court of

5ppeals 6C5 in C51F.(. C< No. 7=8$8, dated November #", 8==%. The assailed C5 Decision

modified the (esolution8dated /anuar+ 88, 8==#, of the (e)ional Trial Court 6(TC of Hrdaneta,

Pan)asinan, :ranch !' in Civil Case No. H1"%'.

The pertinent factual and procedural antecedents of the case are as followsA

The National Power Corporation 6NPC is a )overnment1owned and controlled corporation

created and eistin) b+ virtue of (epublic 5ct No. %"$, %as amended b+ Presidential DecreeNo. "%'. The main purpose of the NPC, as stated in its charter, is to underta-e the development

of h+droelectric )eneration of power and the production of electricit+ from nuclear, )eothermal

and other sources, as well as the transmission of electric power on a nationwide basis. 2n order

to accomplish its ob*ectives, the NPC is )ranted the power, amon) others, to eercise the ri)ht

of eminent domain.

9or purposes of constructin) and maintainin) its &an (oque Multi1Purpose Pro*ect, which is one

of the ma*or underta-in)s of the )overnment for North 0u3on, the NPC filed on ctober #%,

#""" a complaint for eminent domain with the (TC of Hrdaneta, Pan)asinan a)ainst Moises

Tinio, /r. and 9rancis Tinio 6hereafter collectivel+ referred to as the Tinios for the purpose of

epropriatin) a parcel of land owned b+ the Tinios. The sub*ect propert+, consistin) of $8,7#=square meters, denominated as 0ot #!$$15 and covered b+ Transfer Certificate of Title 6TCT

No. T1$77$, is located at :aran)a+ &an (oque, &an Manuel, Pan)asinan.

Prior to filin) its complaint, the NPC too- possession of the sub*ect land on 9ebruar+ ", #""' b+

virtue of a Permit to Enter si)ned b+ Moises.

Durin) the pre1trial conference, one of the stipulations proposed b+ the NPC and admitted b+

the Tinios is the authorit+ of the NPC to epropriate the sub*ect lot. Thus, the parties a)reed that

the onl+ issue left for determination b+ the trial court is the *ust compensation to be paid to the

Tinios.

Commissioners were then appointed to appraise the value of the sub*ect propert+ and,

thereafter, to ma-e a recommendation to the (TC. &ubsequentl+, the commissioners made

separate reports and recommendations.

n /anuar+ 88, 8==#, the trial court issued a (esolution disposin) of the case as followsA

GE(E9(E, P(EM2&E& CN&2DE(ED, the Court hereb+ orders the National Power

Corporation to pa+ defendants Moises Tinio, /r. and 9rancis Tinio the amount
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of P#8,'$=,!==.==, plus le)al interest until full+ paid as *ust compensation for 0ot No. #!$$

under TCT No. T1$77$ with a total area of $8,7#= sq.m.

Costs a)ainst the plaintiff.

& (DE(ED.

!

NPC filed a Motion for (econsideration,$but the same was denied b+ the (TC in an

rderdated 9ebruar+ 8=, 8==#.

Thereafter, the NPC appealed the /anuar+ 88, 8==# (esolution and 9ebruar+ 8=, 8==# rder of

the (TC with the C5.

n November #", 8==%, the C5 rendered its presentl+ assailed Decision, with the followin)

dispositive portionA

2n view of the 9ore)oin), the resolution appealed from is MD292ED, in that the NPC is ordered

to pa+ the defendants as *ust compensation for the land ta-en from them, the amount

of P8,%!%,"== with le)al interest of percent JperK annum from 9ebruar+ ", #""' until paid.

& (DE(ED.7

9eelin) a))rieved, both the NPC and the Tinios are now before this Court ar)uin) that the C5

committed error in its *ud)ment.

Pra+in) that the *ud)ment of the (TC be reinstated, the Tinios contend that the C5 erred in

affirmin) the findin)s of the (TC that the NPC too- possession of, or entered upon, the sub*ect

propert+ on 9ebruar+ ", #""'.

The+ also ar)ue that the C5 erred in arrivin) at a lower amount of *ust compensation than that

arrived at b+ the (TC on the )round that before the NPC made improvements on the sub*ect

propert+, the same was alread+ classified as industrial or commercial land. The Tinios claim that

in #""7, the NPC declared its properties in :aran)a+ &an (oque, &an Manuel, Pan)asinan, as

commercial lands with a value of P8$=.== per square meter. The+ aver that the sub*ect lot is

within the vicinit+ of the NPC properties. 5s such, an+ increase in the value of the NPC

properties should also redound to the benefit of the lands which are located within the same

localit+.

n its part, the NPC>s main asseveration is that the C5 erred in rel+in) on the present state and

character of the sub*ect land as commercial in determinin) *ust compensation. 2t pra+ed for thereduction of the *ust compensation awarded b+ the C5.

The issues raised b+ the parties boil down to the question of whether the C5 was correct in its

determination of *ust compensation as based on its findin)s on the time of ta-in) of the sub*ect

propert+ and the nature and character of the sub*ect propert+ at the time of such ta-in).

The Court finds no error in the assailed Decision of the C5.
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Gith respect to the time of the ta-in) of the sub*ect propert+, the findin)s of fact of the C5 and

the (TC with respect to this issue shall no lon)er be disturbed. 2t is aiomatic that this Court will

not review, much less reverse, the factual findin)s of the C5, especiall+ where, as in this case,

such findin)s coincide with those of the trial court and that these findin)s are supported b+

sufficient evidence. :oth the (TC and the C5 are one in findin) that the NPC too- possession of

the sub*ect lot on 9ebruar+ ", #""' as evidenced b+ a Permit to Enter 0andLPropert+'si)ned b+

Moises on even date. Ghile the Tinios aver that Moises was deceived into si)nin) the said

permit, no evidence was presented to prove this alle)ation.

5s to the nature and character of the sub*ect lot at the time of its ta-in), the Court ta-es

eception to the contention of the NPC that the C5 determined the value of *ust compensation

on the basis of the sub*ect lot>s classification as industrial.

5 perusal of the disputed decision of the C5 would clearl+ show that the appellate court>s

determination of *ust compensation is based on its findin) that #8,7#= square meters of the

sub*ect propert+ was considered residential and that the remainin) !=,=== square meter portion

thereof was classified as a)ricultural land at the time of ta-in) of the said lot. This findin) is

based on a certification dated March #=, #""' issued b+ the Municipal 5ssessor of &an Manuel,Pan)asinan, attestin) to the fact that the disputed propert+ was indeed partl+ residential and

lar)el+ a)ricultural prior to its possession b+ the NPC. 2n this respect, the Court a)rees with the

followin) findin)s of the C5A

The four )overnment offices which )ave their contemporaneous findin)s at the time were

one in sa+in) that of the total area of $.8 hectares, ! were for a)ricultural use. 5bout #.8

hectares had been traversed b+ the h+dro hi)hwa+, and an area of this si3e was specificall+

determined b+ the municipal assessor to be residential in character. "

2n fact, an eamination of the evidence on record, to witA a subsequent certification issued b+

the Municipal 5ssessor, dated 5u)ust ##, #""', and the Tinios> Ta Declaration for #""", wouldshow that the sub*ect lot was classified as industrial onl+ after si months upon the NPC>s entr+

into and development of the said land.

2t is settled that the nature and character of the land at the time of its ta-in) is the principal

criterion for determinin) how much *ust compensation should be )iven to the landowner.#=

ence, the ar)ument of the Tinios that the sub*ect propert+ should benefit from the subsequent

classification of its ad*oinin) properties as industrial lands is, li-ewise, untenable. The Court, in a

number of cases,##has enunciated the principle that it would be in*ustice on the part of the

epropriator where the owner would be )iven undue incremental advanta)es arisin) from the

use to which the )overnment devotes the propert+ epropriated.!-+p&i!

2n the instant case, it cannot be denied that prior to the NPC>s introduction of improvements in

the area where the sub*ect parcel of land is located, the properties therein, includin) the

disputed lot, remained a)ricultural and residential. 2t was onl+ upon entr+ of the NPC in

:aran)a+ &an (oque, and after constructin) buildin)s and other facilities and brin)in) in

various equipment for its multi1purpose pro*ect, that the lands in the said localit+ were later

classified as commercial or industrial.
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&tated differentl+, to allow the Tinios to as- compensation on the basis of the subsequent

classification of the contested lot as industrial would be to allow them to recover more than the

value of the land at the time when it was ta-en, which is the true measure of the dama)es or

*ust compensation.

GE(E9(E, the petitions are DEN2ED. The Decision of the Court of 5ppeals, dated

November #", 8==%, in C51F.(. C< No. 7=8$8, is 5992(MED.

& (DE(ED.

-HEN SHOULD JUST COMPENSATION *E FIXED

&5NT25F E&05:5N, /(., in his capacit+ as Pro*ect Mana)er of the National 2rri)ation

5dministration, petitioner,

vs.CLARITA +DA. DE ONORIO,respondent.

MENDOZA, J.:

This is a petition for review of the decision#of the Court of 5ppeals which affirmed the decision

of the (e)ional Trial Court, :ranch 8, &urallah, &outh Cotabato, orderin) the National 2rri)ation

5dministration 6N25 for brevit+ to pa+ respondent the amount of P#=7,$#7.= as *ust

compensation for the ta-in) of the latters propert+.

The facts are as followsA

(espondent Clarita


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amounts as ma+ be determined b+ the implementin) a)enc+Linstrumentalit+ concerned in

consultation with the Commission on 5udit and the assessors office concerned.

(espondent demanded pa+ment for the ta-in) of her propert+, but petitioner refused to pa+.

5ccordin)l+, respondent filed on December #=, #""= a complaint a)ainst petitioner before the

(e)ional Trial Court, pra+in) that petitioner be ordered to pa+ the sum of P###,8"".$$ as

compensation for the portion of her propert+ used in the construction of the canal constructed b+

the N25, liti)ation epenses, and the costs.

Petitioner, throu)h the ffice of the &olicitor1Feneral, filed an 5nswer, in which he admitted that

N25 constructed an irri)ation canal over the propert+ of the plaintiff and that N25 paid a certain

landowner whose propert+ had been ta-en for irri)ation purposes, but petitioner interposed the

defense thatA 6# the )overnment had not consented to be sued? 68 the total area used b+ the

N25 for its irri)ation canal was onl+ 8.87 hectares, not 8!,== square meters? and 6%

respondent was not entitled to compensation for the ta-in) of her propert+ considerin) that she

secured title over the propert+ b+ virtue of a homestead patent under C.5. No. #!#.

5t the pre1trial conference, the followin) facts were stipulated uponA 6# that the area ta-en was8!,= square meters? 68 that it was a portion of the land covered b+ TCT No. T188#8# in the

name of respondent and her late husband 6Eh. 5? and 6% that this area had been ta-en b+ the

N25 for the construction of an irri)ation canal.8

n ctober #', #""%, the trial court rendered a decision, the dispositive portion of which readsA

2n view of the fore)oin), decision is hereb+ rendered in favor of plaintiff and a)ainst the

defendant orderin) the defendant, National 2rri)ation 5dministration, to pa+ to plaintiff the

sum of ne undred &even Thousand 9ive undred &eventeen Pesos and &it+ Centavos

6P#=7,$#7.= as *ust compensation for the questioned area of 8!,= square meters of land

owned b+ plaintiff and ta-en b+ said defendant N25 which used it for its main canal pluscosts.%

n November #$, #""%, petitioner appealed to the Court of 5ppeals which, on ctober %#,

8===, affirmed the decision of the (e)ional Trial Court. ence this petition.

The issues in this case areA

#. GETE( ( NT TE PET2T2N 2& D2&M2&&2:0E 9( 9520H(E T CMP0 G2T

TE P(


13/62

!. GETE( TE 5992D5


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Cotabato on Ma+ #%, #"7. This land was ori)inall+ covered b+ ri)inal Certificate of Title No.

6P18$$"8 P1"'== which was issued pursuant to a homestead patent )ranted on 9ebruar+ #',

#"=. Ge have heldA

Ghenever public lands are alienated, )ranted or conve+ed to applicants thereof, and the

deed )rant or instrument of conve+ance Jsales patentK re)istered with the (e)ister of Deeds

and the correspondin) certificate and owners duplicate of title issued, such lands are

deemed re)istered lands under the Torrens &+stem and the certificate of title thus issued is

as conclusive and indefeasible as an+ other certificate of title issued to private lands in

ordinar+ or cadastral re)istration proceedin)s.$

The &olicitor1Feneral contends, however, that an encumbrance is imposed on the land in

question in view of %" of the 0and (e)istration 5ct 6now P.D. No. #$8", !! which providesA

Ever+ person receivin) a certificate of title in pursuance of a decree of re)istration, and ever+

subsequent purchaser of re)istered land who ta-es a certificate of title for value in )ood faith

shall hold the same free from all encumbrances ecept those noted on said certificate, and

an+ of the followin) encumbrances which ma+ be subsistin), namel+A

. . . .

/&ir(. 5n+ public hi)hwa+, wa+, private wa+ established b+ law, or an+ )overnment irri)ation

canal or lateral thereof, where the certificate of title does not state that the boundaries of

such hi)hwa+, wa+, irri)ation canal or lateral thereof, have been determined.

5s this provision sa+s, however, the onl+ servitude which a private propert+ owner is required to

reco)ni3e in favor of the )overnment is the easement of a Bpublic hi)hwa+, wa+, private wa+

established b+ law, or an+ )overnment canal or lateral thereof where the certificate of title does

not state that the boundaries thereof have been pre1determined.B This implies that the same

should have beenpre0e1istin%at the time of the re)istration of the land in order that the

re)istered owner ma+ be compelled to respect it. Conversel+, where the easement is not pre0

e1istin%and is sou)ht to be imposed onl+ after the land has been re)istered under the 0and

(e)istration 5ct, proper epropriation proceedin)s should be had, and *ust compensation paid

to the re)istered owner thereof.

2n this case, the irri)ation canal constructed b+ the N25 on the contested propert+ was built onl+

on ctober , #"'#, several +ears after the propert+ had been re)istered on Ma+ #%, #"7.

5ccordin)l+, prior epropriation proceedin)s should have been filed and *ust compensation paid

to the owner thereof before it could be ta-en for public use.

2ndeed, the rule is that where private propert+ is needed for conversion to some public use, thefirst thin) obviousl+ that the )overnment should do is to offer to bu+ it.72f the owner is willin) to

sell and the parties can a)ree on the price and the other conditions of the sale, a voluntar+

transaction can then be concluded and the transfer effected without the necessit+ of a *udicial

action. therwise, the )overnment will use its power of eminent domain, sub*ect to the pa+ment

of *ust compensation, to acquire private propert+ in order to devote it to public use.


15/62

Thi#$.Gith respect to the compensation which the owner of the condemned propert+ is entitled

to receive, it is li-ewise settled that it is the mar-et value which should be paid or Bthat sum of

mone+ which a person, desirous but not compelled to bu+, and an owner, willin) but not

compelled to sell, would a)ree on as a price to be )iven and received therefor.B'9urther, *ust

compensation means not onl+ the correct amount to be paid to the owner of the land but also

the pa+ment of the land within a reasonable time from its ta-in). Githout prompt pa+ment,

compensation cannot be considered B*ustB for then the propert+ owner is made to suffer the

consequence of bein) immediatel+ deprived of his land while bein) made to wait for a decade

or more before actuall+ receivin) the amount necessar+ to cope with his loss. "Nevertheless, as

noted inAnsal(o v. /antuico' 2r.,#= there are instances where the epropriatin) a)enc+ ta-es

over the propert+ prior to the epropriation suit, in which case *ust compensation shall be

determined as of the time of ta-in), not as of the time of filin) of the action of eminent domain.

:efore its amendment in #""7, (ule 7, ! providedA

3r(er of con(enation. Ghen such a motion is overruled or when an+ part+ fails to defend

as required b+ this rule, the court ma+ enter an order of condemnation declarin) that the

plaintiff has a lawful ri)ht to ta-e the propert+ sou)ht to be condemned, for the public use orpurpose described in the complaint upon the pa+ment of *ust compensation to be determined

as of the date of the filin) of the complaint. . . .

2t is now provided that O

&EC. !. 3r(er of e1propriation. O 2f the ob*ections to and the defense a)ainst the ri)ht of the

plaintiff to epropriate the propert+ are overruled, or when no part+ appears to defend as

required b+ this (ule, the court ma+ issue an order of epropriation declarin) that the plaintiff

has a lawful ri)ht to ta-e the propert+ sou)ht to be epropriated, for the public use or

purpose described in the complaint, upon the pa+ment of *ust compensation to be

determined as of the date of the ta-in) of the propert+ or the filin) of the complaint,

whichever came first.

5 final order sustainin) the ri)ht to epropriate the propert+ ma+ be appealed b+ an+ part+

a))rieved thereb+. &uch appeal, however, shall not prevent the court from determinin) the

*ust compensation to be paid.

5fter the rendition of such an order, the plaintiff shall not be permitted to dismiss or

discontinue the proceedin) ecept on such terms as the court deems *ust and equitable.

6Emphasis added

Thus, the value of the propert+ must be determined either as of the date of the ta-in) of the

propert+ or the filin) of the complaint, Bwhichever came first.B Even before the new rule,however, it was alread+ held in Coissioner of Public $i%&+ays v. ur%os##that the price of

the land at the time of ta-in), not its value after the passa)e of time, represents the true value to

be paid as *ust compensation. 2t was, therefore, error for the Court of 5ppeals to rule that the

*ust compensation to be paid to respondent should be determined as of the filin) of the

complaint in #""=, and not the time of its ta-in) b+ the N25 in #"'#, because petitioner was

alle)edl+ remiss in its obli)ation to pa+ respondent, and it was respondent who filed the

complaint. 2n the case of ur%os,#8it was also the propert+ owner who brou)ht the action for


16/62

compensation a)ainst the )overnment after 8$ +ears since the ta-in) of his propert+ for the

construction of a road.

2ndeed, the value of the land ma+ be affected b+ man+ factors. 2t ma+ be enhanced on account

of its ta-in) for public use, *ust as it ma+ depreciate. 5s observed in Republic v. 5araA#%

JGKhere propert+ is ta-en ahead of the filin) of the condemnation proceedin)s, the value

thereof ma+ be enhanced b+ the public purpose for which it is ta-en? the entr+ b+ the plaintiff

upon the propert+ ma+ have depreciated its value thereb+? or there ma+ have been a natural

increase in the value of the propert+ from the time it is ta-en to the time the complaint is filed,

due to )eneral economic conditions. The owner of private propert+ should be compensated

onl+ for what he actuall+ loses? it is not intended that his compensation shall etend be+ond

his loss or in*ur+. 5nd what he loses is onl+ the actual value of his propert+ at the time it is

ta-en. This is the onl+ wa+ that compensation to be paid can be trul+ *ust, i.e., B*ustB not onl+

to the individual whose propert+ is ta-en, Bbut to the public, which is to pa+ for itB . . . .

2n this case, the proper valuation for the propert+ in question is P#,=!7.# per hectare, the

price level for #"'8, based on the appraisal report submitted b+ the commission 6composed ofthe provincial treasurer, assessor, and auditor of &outh Cotabato constituted b+ the trial court to

ma-e an assessment of the epropriated land and fi the price thereof on a per hectare basis.#!

F'h.Petitioner finall+ contends that it is eempt from pa+in) an+ amount to respondent

because the latter eecuted an 5ffidavit of Gaiver of (i)hts and 9ees of an+ compensation due

in favor of the Municipal Treasurer of :aran)a+ &to. NiIo, &outh Cotabato. owever, as the

Court of 5ppeals correctl+ heldA

J2Kf N25 intended to bind the appellee to said affidavit, it would not even have bothered to )ive

her an+ amount for dama)es caused on the improvementsLcrops within the appellees

propert+. This, apparentl+ was not the case, as can be )leaned from the disbursement

voucher in the amount of P!,#'=.== 6pa)e #= of the 9older of Ehibits in Civil Case %"

issued on &eptember #7, #"'% in favor of the appellee, and the letter from the ffice of the

&olicitor Feneral recommendin) the )ivin) of Bfinancial assistance in the amount

of P%$,===.==B to the appellee.

Thus, Ge are inclined to )ive more credence to the appellees eplanation that the waiver of

ri)hts and fees Bpertains onl+ to improvements and crops and not to the value of the land

utili3ed b+ N25 for its main canal.B#$

GE(E9(E, premises considered, the assailed decision of the Court of 5ppeals is hereb+

5992(MED with MD292C5T2N to the etent that the *ust compensation for the contested

propert+ be paid to respondent in the amount of P#,=!7.# per hectare, with interest at thele)al rate of si percent 6S per annum from the time of ta-in) until full pa+ment is made.

Costs a)ainst petitioner.!-+p&i!.nt

& (DE(ED.

JULITA P. TAN, Petitioner,

vs.


17/62

THE REPU*LIC OF THE PHILIPPINES, R"p#"s"n"$ )! h" PU*LIC ESTATES

AUTHORITY,(espondent.

D E C 2 & 2 N

SANDO+ALGUTIERREZ,J.:

9or our resolution is the Petition for (eview on Certiorariassailin) the Decision#of the Court of

5ppeals 6Thirteenth Division, &pecial Division of 9ive dated /ul+ , 8==$ in C51F.(. &P No.

'!7.

The undisputed facts of the case areA

/ulita P. Tan, petitioner herein, is the re)istered owner of a parcel of land consistin) of 7,##

square meters located at the southern ban- of the 4apote (iver in &itio Gawa, Pulan) 0upa,

0as PiIas Cit+. er ownership is evidenced b+ Transfer Certificate of Title 6TCT No. 7'#'' of

the (e)istr+ of Deeds, same cit+. &he acquired this propert+ from the &an 5ntonio Development

Corporation 6&5DC as shown b+ a document denominated B2rrevocable and Eclusive &pecial

Power of 5ttorne+B dated 5pril , 8==#, whereb+ she assumed &5DCs Bobli)ation of pa+in) all

imposable taes due said land.B 2n consideration of such assumption and Bfor valueB she

Bstepped into the shoesB of &5DC Bfree to eercise such ri)hts and prero)atives as owner of the

sub*ect propert+, includin) the ri)ht to collect and demand pa+ment for the sale andLor use of

the sub*ect land or an+ portion thereof, b+ and from an+ person or entit+.B

The Public Estates 5uthorit+ 6PE5 is a )overnment1owned and controlled corporation,

or)ani3ed and eistin) pursuant to Presidential Decree 6P.D. No. #='! representin) in this case

the (epublic of the Philippines, herein respondent. 5mon) the properties PE5 mana)es is

the Mani/aCa0i" C'asa/ R'a$ 6Coastal (oad, also -nown as the (1# Epresswa+.

Prior to the transfer of the propert+ to petitioner b+ &5DC, or on March 8", #"'$, PE5 wrote

&5DC requestin) permission to enter the latters propert+, then covered b+ TCT No. !%"#=#, for

the purpose of constructin) thereon the southern abutment of the 4apote :rid)e at the Coastal

(oad. PE5 also proposed to &5DC to start their ne)otiation for its acquisition of the latters

propert+.

n 5pril ##, #"'$, &5DC replied authori3in) PE5 to enter the propert+, sub*ect to the condition

that the latter should pa+ a monthl+ rental of P#=,===.==. PE5 then directed its contractor, the

Philippine National Construction Corporation, to enter the propert+ and be)in the necessar+

en)ineerin) wor-s on the Coastal (oad.

2n a letter dated Ma+ 8', #"'$, PE5 requested &5DC either to donate or sell the propert+ to the

)overnment.

n ctober 88, #"'$, &5DC replied b+ offerin) to sell the propert+ to PE5. &5DCs as-in) price

was P#,8'',"'=.== plus P!==,===.== as compensation for the house and other improvements

thereon that were destro+ed durin) the construction of the Coastal (oad.
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n /anuar+ 7, #"'7, PE5 informed &5DC it has no plan to bu+ the whole lot, but onl+ the #,#%#

square meter portion above sea level. PE5 then as-ed &5DC to submit proofs of ownership and

costs of the improvements which were demolished.

Ne)otiations then ensued between the parties. owever, for the past twent+ 68= +ears, the+

failed to reach an a)reement.

n ctober 8, 8===, &5DC as-ed PE5 to pa+ compensation equivalent to the current 3onal

value plus interest of ten percent 6#=S per annum and a monthl+ rental of P#=,===.==, also

with the same interest. These sums, accordin) to &5DC, could be considered *ust

compensation for the )overnments use of the propert+ since #"'$ until &eptember 8=== and

thereafter.

The followin) month, PE5 inquired from the :ureau of 2nternal (evenue 6:2( District $%,

5laban), Muntinlupa Cit+ the 3onal value of the &5DC propert+. 2t submitted to the :2( the

appraisal reports prepared b+ two 68 independent licensed appraisers.

On Ap#i/ 1, 2334, p"ii'n"# J&/ia Tan ac5&i#"$ h" p#'p"#! (#'6 SADC.!a89p&i!.net

n /ul+ #8, 8==#, the :2( sent a letter to PE5 statin) that the 3onal value of the propert+

is P8,"==.== per square meter, with the caveat that the said assessment is sub*ect to review

and approval b+ hi)her ta authorities.

n ctober ", 8==#, the :2( informed PE5 that the c#"n 7'na/ 0a/&" of the propert+

is P8=,===.== per square meter.

2n the meantime, the construction of the Coastal (oad was completed. PE5 entered into a /oint


19/62

others, that its liabilit+ for *ust compensation is based on the 3onal value of the land at the time

of the ta-in) in #"'$. Thus, it is liable for onl+ P'$8,""%.$# for the !,7#" square meter portion.

2n her answer, petitioner claimed that PE5 should pa+ for the whole area consistin) of 7,##

square meters at P8=,===.== per square meter, the 3onal value set b+ the :2( pursuant to

(epublic 5ct No. '"7!.!&he then pra+ed that she be paid P#!%,8==,===.== plus interest of

twelve percent 6#8S per annum, aside from theP#=,===.== monthl+ rental with #8S interest

per annum for the occupanc+ and use of the propert+ since 5pril #"'$ up to the present.

n ctober 8=, 8==%, petitioner filed with the (TC a motion to order PE5 to immediatel+ pa+

her *ust compensation based on the 3onal valuation of the :2(. This was opposed b+ PE5.

n December #, 8==%, the trial court issued the followin) rder$A

GE(E9(E, findin) merit to the BMotion To rder the Plaintiff to 2mmediatel+ Pa+ Defendant

er Epropriated Propert+,B dated ctober 8=, 8==%, the same is hereb+ F(5NTED.

5ccordin)l+, plaintiff, throu)h PE5, is hereb+ ordered to immediatel+ pa+ defendant the sum

of P"!,%'=,===.== 6ninet+1four million, three hundred ei)ht+ thousand pesos representin) the

*ust compensation for the !,7#" square meters of defendants propert+ covered b+ TCT No.

7'#'' of the (e)istr+ of Deeds of 0as PiIas based on P8=,===.== per square meter 3onal

valuation of the :ureau of 2nternal (evenue.

& (DE(ED.

PE5 timel+ filed a motion for reconsideration but it was denied b+ the trial court in its

rderdated 5pril #!, 8==!.

PE5 then elevated the matter to the Court of 5ppeals b+ wa+ of a petition

for certiorari'prohibition, and mandamus.

n /ul+ , 8==$, the Court of 5ppeals rendered its Decision, the dispositive portion of which

readsA

GE(E9(E, the instant petition for certiorari and prohibition is hereb+ F(5NTED while that

of mandamus is hereb+ DEN2ED 6sic. 5ccordin)l+, the assailed rders, dated December #,

8==% and 5pril #!, 8==!, are hereb+ (E


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The first issue involves the nature of the two rders of the trial court dated December #, 8==%

and 5pril #!, 8==!. The rder of December #, 8==% directed PE5 to pa+ petitioner *ust

compensation in the sum of P"!,%'=,===.==. The rder of 5pril #!, 8==! denied PE5s motion

for reconsideration. 5re these orders final or interlocutor+@

&ec. #, (ule !# of the #""7 (ules of Civil Procedure, as amended, partl+ providesA

&EC. #. Sub;ect of appeal. 5n appeal ma+ be ta-en from a *ud)ment or final order that

completel+ disposes of the case, or of a particular matter therein when declared b+ these (ules

to be appealable.

No appeal ma+ be ta-en fromA

6c an interlocutor+ order.

5 final order is one that disposes of the sub*ect matter in its entiret+ or terminates a particular

proceedin) or action, leavin) nothin) else to be done but to enforce b+ eecution what has been

determined b+ the court, while an interlocutor+ order is one which does not dispose of the case

completel+ but leaves somethin) to be decided upon.7

Hnder (ule 7 of the same (ules, there are two 68 sta)es in a condemnation proceedin)A'

6# Determination of the authorit+ of the plaintiff to eercise the power of eminent domain and

the propriet+ of its eercise in the contet of the facts involved in the suit. 2t ends with an

order, if not of dismissal of the action, with condemnation declarin) that the plaintiff has alawful ri)ht to ta-e the propert+ sou)ht to be condemned for the public use or purpose

described in the complaint, upon pa+ment of *ust compensation. 5n order of epropriation is

final."5n order of dismissal, if this be ordained, would be a final one, as it finall+ disposes of

the action and leaves nothin) more to be done b+ the court on the merits.#=The order of

epropriation would also be a final one for after its issuance, no ob*ection to the ri)ht of

condemnation shall be heard. The order of epropriation ma+ be app"a/"$b+ an+ part+

a))rieved thereb+ b+ filin) a record on appeal.##

68 Determination b+ the court of the *ust compensation for the propert+ sou)ht to be ta-en

with the assistance of not more than three 6% commissioners. Th" '#$"# (i8in% h" 9&s

c'6p"nsai'n 'n h" )asis '( h" "0i$"nc" before the courtan$ (in$in%s '( h"

c'66issi'n"#s would li-ewise bea (ina/ 'n", as it would leave nothin) more to be done b+

the court re)ardin) this issue. 5 second and separate appeal ma+ be ta-en from this order

fiin) the *ust compensation.

Th" #ia/ c':s O#$"#s in Ci0i/ Cas" N'. 3;3223 #"5&i#"$ PEA ' pa!

p"ii'n"# P3,333.33 #"p#"s"nin% h" 9&s c'6p"nsai'n ('# h"# =,?4< s5&a#" 6""#

/' )as"$ 'n h" *IR 7'na/ 0a/&ai'n '(P23,333.33 p"# s5&a#" 6""#. Clearl+, the rders are

final, hence, appealable. owever, instead of appealin) from the said rders within the
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re)lementar+ period, PE5 resorted to certiorari, prohibition and mandamus. 2t is basic that the

remed+ of certiorariis not a substitute for a lost appeal, as in this case.

n the second issue, &ection ", 5rticle 222 of the Constitution specificall+ mandates that BPrivate

propert+ shall not be ta-en for public use without *ust compensation.B

2n City of Manila v. .#!Then

in Manila Railroa( Co. v. Cali%sa&an,#$we held that Bto be eactl+ *ust, the compensation should

be estimated at the time of the ta-in).B &ubsequentl+, in Republic v. =(a. (e Castellvi,#we ruled

that9&s c'6p"nsai'n is $""#6in"$ as '( h" $a" '( h" a@in% '( h" p#'p"#! '# h"

(i/in% '( h" c'6p/ain, hich"0"# ca6" (i#s.

The Court of 5ppeals, in its challen)ed Decision, held that PE5s ta-in) of petitioners propert+

occurred in #"'$. Even if PE5 requested permission to enter the sub*ect propert+ and petitioner

)ranted such request on condition that PE5 should pa+ a monthl+ rental of P#=,===.==, Bit does

not chan)e the fact that there was Uta-in) of the propert+ for public use.B Consequentl+, the

compensation should be computed on the basis of the 3onal value of the propert+ at that time

6#"'$ which was P8,"==.== per square meter per letter dated /ul+ #8, 8==# of the :2( to PE5.

The Court of 5ppeals is wron). PE5s entr+ into the propert+ with the permission of &5DC, its

previous owner, was not for the purpose of epropriatin) the propert+. (ecords show and as

stressed b+ Mr. /ustice (enato C. Dacudao of the Court of 5ppeals in his Dissentin) pinion,

&5DC allowed PE5 to enter the land on condition that it should pa+ a monthl+ rental

of P#=,===.==. Thereafter, PE5, in a letter dated Ma+ 8', #"'$, requested &5DC to donate or

sell the land to the )overnment. n ctober 88, #"'$, &5DC responded, offerin) to sell the landto PE5 forP#,8'',"'=.==, plus P!==,===.== representin) the value of the improvements

destro+ed b+ PE5 when it entered the propert+. owever, since #"'$ up to the present, no

a)reement has been reached between PE5 and &5DC or herein petitioner who acquired the

propert+ from the latter.

Ghile PE5 has been earnin) hu)e toll fees, it has refused to pa+ petitioner an+ compensation

for the use of her propert+ in violation of her ri)ht as an owner.

The above circumstances clearl+ show that when PE5 entered petitioners land in #"'$, it was

not for the purpose of epropriatin) it. Ge stress that after its entr+, PE5 wrote &5DC requestin)

to donate or sell the land to the )overnment. 2ndeed, there was no intention on the part of PE5to epropriate the sub*ect propert+. Gh+ did it as- permission from &5DC to enter the propert+@

Thereafter, wh+ did it request &5DC to donate or sell the land to the )overnment@ 2t could have

simpl+ eercised its power of eminent domain.

&ection 8, (ule 7 6on Epropriation of the same (ules provides, amon) others, that upon the

filin) of the complaint or at an+ time thereafter and after due notice to the defendant, the plaintiff

shall have the ri)ht to ta-e or enter upon the possession of the real propert+ involved if he
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deposits with the authori3ed )overnment depositar+ an amount equivalent to the assessed

value of the propert+. 2t bears reiteratin) that in Republic v. =(a. (e Castellvi,#7we ruled that *ust

compensation is determined as of the date of the ta-in) of the propert+ or the filin) of the

complaint, whichever came first.

Ge have made it clear that there was no ta-in) of the propert+ in #"'$ b+ PE5 for purposes of

epropriation. 5s shown b+ the records, PE5 filed with the (TC its petition for epropriation on

&eptember 88, 8==%. The trial court, therefore, was correct in orderin) respondent, throu)h

PE5, upon the filin) of its complaint for epropriation, to pa+ petitioner *ust compensation on the

basis of the :2( 3onal valuation of the sub*ect propert+ at P8=,===.== per square meter.

2n sum, we rule that the Court of 5ppeals erred 6# in not dismissin) PE5s petition for certiorari,

prohibition and mandamus? and 68 in rulin) that PE5s ta-in) of the propert+ occurred in #"'$

and that the compensation should be based on the :2( 3onal valuation in that +ear.

-HEREFORE,the assailed Decision of the Court of 5ppeals dated /ul+ , 8==$, in C51F.(. &P

No. '!7 isRE+ERSED. The Decision of the (TC, :ranch 8=8, 0as PiIas Cit+ is AFFIRMED.

& (DE(ED.

HEIRS OF MATEO PIDACAN AND ROMANA EIGO, Bna6"/! PACITA PIDACAN +DA. DE

ZU*IRI $"c"as"$, si0"$ )! JOSE *ELLO *ATINA, +ICY *ELLO *ATINA, RO*ERTO

*ELLO *ATINA, +ILMA *ELLO *ATINA, an$ FRANCISCO N. *ATINA an$ ADELA

PIDACAN +DA. DE RO*LES,Petitioners,

vs.

AIR TRANSPORTATION OFFICE ATO, #"p#"s"n"$ )! is Acin% Di#"c'# *IEN+ENIDO

MANGA,(espondent.

D E C 2 & 2 N

UISUM*ING, J.:

9or review on certiorari are the Decision#dated 5u)ust 8=, 8==% and the (esolution dated

March #7, 8==! of the Court of 5ppeals in C51F.(. C< No. 78!=!, which reversed the

Decision8dated 9ebruar+ #, 8==# of the (e)ional Trial Court 6(TC of &an /ose, ccidental

Mindoro, :ranch ! in Civil Case No. (1'==.

The facts, summari3ed b+ the Court of 5ppeals and borne b+ the records, are as followsA

&ometime in #"%$, spouses Mateo Pidacan and (omana Ei)o acquired under the homesteadprovision of 5ct No. 8'7!%a parcel of land consistin) of about 88 hectares situated in &an /ose,

ccidental Mindoro. Patent No. %%''% and ri)inal Certificate of Title 6CT No. 88=! were

issued on the land, in the names of the Pidacan spouses.

2n #"!', the Civil 5eronautics 5dministration 6now 5ir Transportation ffice or B5TB used a

portion of the said propert+ as an airport. Hpon the death of the Pidacan spouses in #"7!, the
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5T constructed a perimeter fence and a new terminal buildin) on the propert+. The 5T also

len)thened, widened, and cemented the airports runwa+.

The spouses heirs namel+, Pacita Pidacan


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#. Epropriatin) the actual area occupied b+ the defendant 5ir Transportation ffice of the

plaintiffs propert+ covered b+ Transfer Certificate of Title No. T17#=, totalin) Two undred

9ifteen Thousand &even undred Thirt+ &even 68#$,7%7 square meters, in favor of defendant?

8. rderin) defendant 5ir Transportation ffice to pa+ plaintiffs the amount of Three undred

9our 66P%=!.== Pesos per square meter for the area herein epropriated which totals to &it+

9ive Million 9ive undred Ei)ht 6sic 9our Thousand 9ort+ Ei)ht 6P$,$'!,=!'.== Pesos with

interest thereon at the rate of #8S per annum from 9ebruar+ #, 8==#, until the same is full+

paid.

%. rderin) defendant 5ir Transportation ffice to pa+ plaintiffs monthl+ rentals for the use and

occupation of the sub*ect propert+ cited in item No. # above, computed as followsA

a Three Thousand 9ift+ Ei)ht Pesos and 9ort+ Centavos 6P%,=$'.!= from #"$7 to #"77?

b 9our Thousand Twent+ Two Pesos and &it+ five Centavos 6P!,=88.= from #"7' to #"7"?

c &i Thousand Thirt+ 9our Pesos and 9ift+ Centavos 6P,=%!.$= from #"'= to #"'!?

d Nine Thousand &i undred Ninet+ Nine Pesos and &it+ Centavos 6P","".= from #"'$ to

#""#?

e &eventeen Thousand Nine undred thirteen Pesos and &it+ Centavos 6P#7,"#%.= from

#""8 to #""!?

f Thirt+ &even Thousand ne undred Ei)ht+ ne Pesos and Ei)ht+ Centavos 6P%7,#'#.'=

from #""$ to #""7?

) 9ift+ 9our Thousand &i undred 9ift+ Ei)ht Pesos and &it+ Centavos 6P$!,$'.= from#""' to /anuar+ %#, 8==#?

or a total monthl+ rentals, from /anuar+ #, #"$7 to /anuar+ %#, 8==#, of &i Million Two hundred

9ort+ Nine Thousand &i undred 9ort+ 9ive Pesos and 9ort+ Centavos 6P,8!",!$.!= with

interest thereon at the rate of #8S per annum, until the same is full+ paid?

!. rderin) defendant 5ir Transportation ffice to pa+ plaintiffs ten 6#=S per cent of the

amount involved as and for attorne+s fees and epenses of liti)ation? and

$. rderin) defendant 5ir Transportation ffice to pa+ the costs of suit.

& (DE(ED.7

The 5T once a)ain appealed to the Court of 5ppeals, which in its assailed Decision reversed

the trial courts rulin), thusA

-HEREFORE,premises considered, the assailed Decision dated 9ebruar+ #, 8==# of the

(e)ional Trial Court of &an /ose, ccidental Mindoro in Civil Case No. (1'== is
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hereb+ RE+ERSED AND SET ASIDEand a new one entered remandin) the instant case to the

court a )uofor the determination of *ust compensation on the basis of the mar-et value

prevailin) in #"!'. No pronouncement as to costs.

SO ORDERED.'

The heirs moved for reconsideration but it was denied. 5))rieved, the heirs filed the instant

petition alle)in) thatA

2

TE N(5:0E CH(T 9 5PPE50& CMM2TTED F(5


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n the first issue, we are unable to consider the parties bare alle)ation that there was a

contract of lease or a contract of sale between the 5T and the Pidacan spouses, for lac- of

competent evidence adduced to prove either claim. n the contrar+, preponderance of evidence

on record stron)l+ indicates that the 5Ts conversion of the propert+ into an airport in #"!'

comes within the purview of eminent domain.

Eminent domain or epropriation is the inherent ri)ht of the state to condemn private propert+ to

public use upon pa+ment of *ust compensation.#=5 number of circumstances must be present in

the ta-in) of propert+ for purposes of eminent domainA 6# the epropriator must enter a private

propert+? 68 the entrance into private propert+ must be for more than a momentar+ period? 6%

the entr+ into the propert+ should be under warrant or color of le)al authorit+? 6! the propert+

must be devoted to a public use or otherwise informall+ appropriated or in*uriousl+ affected? and

6$ the utili3ation of the propert+ for public use must be in such a wa+ as to oust the owner and

deprive him of all beneficial en*o+ment of the propert+.##

Ghen private propert+ is rendered uninhabitable b+ an entit+ with the power to eercise eminent

domain, the ta-in) is deemed complete.#8Ta-in) occurs not onl+ when the )overnment actuall+

deprives or dispossesses the propert+ owner of his propert+ or of its ordinar+ use, but also whenthere is a practical destruction or material impairment of the value of his propert+.#%

2n this case, it is undisputed that petitioners private propert+ was converted into an airport b+

respondent 5T. 5s a consequence, petitioners were completel+ deprived of beneficial use and

en*o+ment of their propert+. Clearl+, there was ta-in) in the concept of epropriation as earl+ as

#"!' when the airport was constructed on petitioners private land.

5s a rule, the determination of *ust compensation in eminent domain cases is rec-oned from the

time of ta-in).#!2n this case, however, application of the said rule would lead to )rave in*ustice.

Note that the 5T had been usin) petitioners propert+ as airport since #"!' without havin)

instituted the proper epropriation proceedin)s. To pe) the value of the propert+ at the time ofta-in) in #"!', despite the eponential increase in its value considerin) the lapse of over half a

centur+, would be iniquitous. Ge cannot allow the 5T to convenientl+ invo-e the ri)ht of

eminent domain to ta-e advanta)e of the ridiculousl+ low value of the propert+ at the time of

ta-in) that it arbitraril+ chooses to the pre*udice of petitioners.

2n this particular case, *ustice and fairness dictate that the appropriate rec-onin) point for the

valuation of petitioners propert+ is when the trial court made its order of epropriation in 8==#.

5s for the fair value of the sub*ect propert+, we believe that the amount arrived at b+ the

commissioners appointed b+ the trial court, P%=!.%" per square meter, constitutes *ust

compensation to petitioners.#$

owever, the trial courts award of rental pa+ments to petitioners is not supported b+ evidence

on record and must be deleted. To *ustif+ such award, the purported contract of lease must first

be proven b+ competent evidence. The letter#of one Director Nabor C. Faviola of the

Department of Transportation and Communications endorsin) the appeal of a certain erminia

(. Parales for the immediate pa+ment of rentals is plain hearsa+ and does little to prove the

eistence of a contract of lease between the parties.
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0astl+, the interest accruin) fied b+ the trial court at the rate of #8S per annum is not

consistent with law and should be reduced to the le)al interest rate of S per annum.#7

-HEREFORE, the petition is GRANTED. The assailed Decision dated 5u)ust 8=, 8==% and the

(esolution dated March #7, 8==! of the Court of 5ppeals in C51F.(. C< No. 78!=! are SET

ASIDE. The Decision dated 9ebruar+ #, 8==# of the (e)ional Trial Court of &an /ose,

ccidental Mindoro, :ranch ! in Civil Case No. (1'== is AFFIRMED ih MODIFICATION, as

followsA

#. The actual area occupied b+ respondent 5T covered b+ Transfer Certificate of Title No. T1

7#=, totalin) 8#$,7%7 square meters is declared epropriated in favor of the 5T.

8. The 5T is ordered to pa+ petitioners the amount of P%=!.%" per square meter for the area

epropriated, or a total of P$,',#'$.!% with interest at the rate of S per annum from

9ebruar+ #, 8==#, until the same is full+ paid.

No pronouncement as to costs.

SO ORDERED.

FORM OF PAYMENT

EDGARDO SANTOS, #"p#"s"n"$ )! his a'#n"!in(ac ROMEO L. SANTOS, petitioner,vs.LAND *AN OF THE PHILIPPINES, JESUS DIAZ, RO*ERTO ONG an$ AUGUSTOAUINO, respondents.

D E C 2 & 2 N

PANGANI*AN, J.:

The Comprehensive 5)rarian (eform 0aw 6(5 $7 provides that *ust compensation tolandowners shall be paid in cash and bonds. ence, a trial court decision directin) the pa+mentof such compensation Bin the manner provided b+ (.5. $7B is not ille)all+ amended but ismerel+ clarified b+ an order, issued durin) the eecution proceedin)s, that such amount shall bepaid in cash and bonds.

The Case

:efore the Court is a Petition for (eview on Certiorariof the December ', #""' Decision#andthe 9ebruar+ 8, #""" (esolution8of the Court of 5ppeals 6C5%in C51F( &P No. !'$#7, whichhad respectivel+ dismissed the Petition for Certiorariand Man(aus, filed b+ petitioner, anddenied reconsideration.

The decretal part of the assailed Decision readsA

BGE(E9(E, the petition is D2&M2&&ED. The rder of 5pril 8!, #""' is 5992(MED.B !
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The 9acts

The antecedents of the case are adequatel+ summari3ed in the assailed Decision, as followsA

B2t appears that petitioner Ed)ardo &antos is the plaintiff in 5)rarian Case No. (TC "!1%8= forthe determination of *ust compensation re)ardin) properties which were ta-en b+ D5( underP.D. No. 87 in #"78. n 5u)ust #8, #""7, the (e)ional Trial Court, sittin) as an 5)rarian Courtrendered *ud)ment, the dispositive portion of which readsA

*$


29/62

BThe (e)ional Trial Court issued an rder on March 8=, #""' for the 0and :an- to release thebalance of P!#,#8',=8!.'# from the )arnished amount in cash or certified chec-.

BThe 0and :an- moved for a reconsideration of the said rder, maintainin) that the pa+mentwas properl+ made in 0and :an- :onds.

Bn March 8$, #""', petitioner filed a motion to hold the 0and :an- in contempt for its refusal torelease the balance of the )arnished amount in cash or certified chec-.

B(espondent (e)ional Trial Court presided over b+ a new *ud)e, resolved the two motions on5pril 8!, #""'. 2t held that the pa+ment of *ust compensation must be computed in the mannerprovided for in &ection #', (epublic 5ct No. $7. Thus, it ruled thatA

BTo summari3e, the ver+ issue to be resolved in the instant case is to determine how muchshould be paid in cash and how much also should be paid in bonds, to full+ satisf+ the *ud)mentherein rendered in the amount of P!",8!#,'7.==, the computation of which is as followsA

Total land value per *ud)ment P!",8!#,'7.==

5mount pa+able in bondsA

7=S 6$= has P88,%8%,"%8.7$

7$S 6ecess P#%,=#8,"=7.!# %$,%%,'!=.#

5mount pa+able in cashA

%=S 6$= has P",$7,%"".7$

%$S 6ecess !,%%7,%$.'# #%,"=$,=%$.$

0essA

Preliminar+ valuationA P%,$!%,=7=.

Commissioner>s 9eeA "!','$7.$8

Pa+ment to plaintiff on

#818!1"7 %,8#,=8%.=# P ',##8,"$#.#"

VVVVVVVVVVVVVV

P $,7"8,='!.%7

Conse)uently' not only ust t&e 3r(er of Marc& F' !7 be reconsi(ere(' but by iplication't&e 3r(er of t&is Court (ate( Deceber ' !7 is lie+ise (eee( reconsi(ere(. Jt %oes+it&out sayin% t&at t&e payent of ;ust copensation ust be a(e in accor(ance +it& Sec.


30/62

!E' Republic Act No. 66"7 in relation to Section ' Rule # of t&e !7 Rules of Civil Proce(ureinsofar as it (oes not contravene 1 1 1 t&e forer.

3n t&e basis of t&e fore%oin% (iscussion' t&is Court fin(s no erit ?i@n t&e otion to cite in conteptof court t&e 5an( an of t&e P&ilippines.

e it also note( t&at Defen(ant 5an( an' t&rou%& counsel' &as subitte( a re0coputation of t&ecopensation in accor(ance +it& &er anifestation on oral ar%uent ?+it&@ +&ic& t&is court be%s to(isa%ree.

*$


31/62

BThe )arnishment, on the other hand, of the amount of P!$,"','=$.%! from the 0and :an- ofthe Philippines does not affect the eecution of the *ud)ment in the case. 5s above1epounded,the *ud)ment was to be full+ eecuted in accordance with the provisions of (.5. $7 whichallows the landowner to have the compensation be paid in cash and in bond, but not full+ incash, as herein petitioner would li-e to maintain. Technicall+, the )arnishment which was madein this case pursuant to the order of eecution b+ /ud)e Naval shall etend onl+ to the cash

portion of the *ud)ment amount. n the other hand, with respect to the amount to be issued inbonds, the onl+ *urisdiction of the trial court is to order the 0and :an- of the Philippines to issuethe correspondin) bonds and deliver the same to herein petitioners.

ence, this Petition.

2ssues

2n his Memorandum,7petitioner submits the followin) issues for resolutionA

B#. Did respondent *ud)e act without *urisdiction when she issued the rder dated 8! 5pril #""'amendin) the final /ud)ment dated #8 5u)ust #""7@

B8. 2s it a ministerial dut+ of the respondent *ud)e to order the release and of the 0and :an- torelease the )arnished amount under &ection " 6c of (ule %" of the (ules of Court@

B%. Ma+ respondent 0and :an- question the le)alit+ of its own compliance with the Grit ofEecution@

B!. 5re the respondent *ud)e and the respondent 0and :an- and its officials liable for dama)esunder &ection % of (ule $ of the (ules of Court@B '

2n short, the main issue is whether the 5pril 8!, #""' rder of /ud)e 0la)uno was proper.

The Court>s (ulin)

Ge find no merit in this Petition.

Main 2ssueA Propriety an(


32/62

did not revise, correct, or alter the Decision. (ather, the rder iterate(and a(e cleartheessence of the final *ud)ment.

The 5u)ust #8, #""7 *ud)ment mandated compensation to the petitioner Bin the mannerprovided b+ (.5. $7.B"There is certitude with re)ard to this assertion. The confusion in thepresent case, which required the issuance of the assailed rder, arose from petitioner>s belief

that the 0and :an- had obli)ated itself to pa+ in cash the compensation due him. This fact canalle)edl+ be )leaned from its compliance with the December !, #""7 Grit of Eecution andDecember #", #""7 Notice of Farnishment.

Copensation Due Petitioner to e Pai( Pursuant to RA 66"7

owever, it is clear from the 5u)ust #8, #""7 *ud)ment that the compensation was to be paid Binthe manner provided b+ (5 $7.B#=Pursuant to &ection #' of the same law, pa+ment was to bein cash an(bonds, as indicated belowA

B&ection #'. =aluation an( Mo(e of Copensation. 11 The 0:P shall compensate the landownerin such amount as ma+ be a)reed upon b+ the landowner and the D5( and 0:P, in accordancewith the criteria provided for in &ections # and #7, and other pertinent provisions hereof, or asma+ be finall+ determined b+ the court, as the *ust compensation for the land. !-+p&i!

BThe compensation shall be paid in one of the followin) modes, at the option of the landownerA

6# Cash pa+ment, under the followin) terms and conditions

6a

9orlands

abov

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fift+6$

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36/62

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:e that as it ma+, petitioner contends that the ban- is estopped from questionin) its alle)edunderta-in) to pa+ him in cash. This contention was purportedl+ manifested in its letter1compliance with the Grit of Eecution and the Notice of Farnishment. 2n the letter, respondentsaid that it was se)re)atin) a specified amount from the 5)rarian (eform 9und, in order to pa+him. e insists that such amount was )arnished in accordance with &ection #, (ule %" of the(ules of Court, and should have been delivered to him pursuant to &ection " of the same (ule.

Ge disa)ree. (espondent ban- was obli)ed to follow the mandate of the 5u)ust #8, #""7*ud)ment. ence, its compliance with the Grit of Eecution and the Notice ofFarnishment##ou)ht to have been construed as an a)reement to pa+ petitioner in the mannerset forth in (epublic 5ct No. $7. 2ts compliance was not an underta-in) to pa+ in cashbecause such act would have been a deviation from the dictum of the final *ud)ment, to whicheecution must conform.#8Pa+in) in cash, as petitioner demands, is not compatible with such

*ud)ment.

Misplaced is petitioner>s reliance on &ection ", (ule %" of the (ules of Court, because the final*ud)ment decrees pa+ment in cash and bonds. 2ndeed, this provision must be ta-en incon*unction with (5 $7. &ince respondent ban- had alread+ )iven petitioner the entiread*ud)ed amount in the required proportion of cash and bonds, it must be deemed to havecomplied with its dut+ under (ule %".

Ge understand petitioner>s desire to be paid in cash? after all, his compensation was lon)overdue. owever, we cannot )rant his Petition because it is not sustained b+ the law. 2n this


37/62

re)ard, we recall the Court>s eplanation inAssociation of Sall 5an(o+ners in t&e P&ilippines'Jnc. v. Secretary of A%rarian ReforA#%

B2t cannot be denied from these cases that the traditional method for the pa+ment of *ustcompensation is mone+ and no other. 5nd so, conformabl+, has *ust compensation been paid inthe past solel+ in that medium. owever, we do not deal here with the traditional eercise of the

power of eminent domain. This is not an ordinar+ epropriation where onl+ a specific propert+ ofrelativel+ limited area is sou)ht to be ta-en b+ the &tate from its owner for a specific andperhaps local purpose. Ghat we deal with here is a revolutionary -ind of epropriation.

BGith these assumptions, the Court hereb+ declares that the content and manner of the *ustcompensation provided for in the afore1quoted &ection #' of the C5(P 0aw is not violative ofthe Constitution. Ge do not mind admittin) that a certain de)ree of pra)matism has influencedour decision on this issue, but after all this Court is not a cloistered institution removed from therealities and demands of societ+ or oblivious to the need for its enhancement. The Court is asacutel+ anious as the rest our people to see the )oal of a)rarian reform achieved at last afterthe frustrations and deprivations of our peasant masses durin) all these disappointin) decades.Ge are aware that invalidation of the said section will result in the nullification of the entirepro)ram, -illin) the farmer>s hopes even as the+ approach reali3ation and resurrectin) thespecter of discontent and dissent in the restless countr+side. That is not in our view the intentionof the Constitution, and that is not what we shall decree toda+.

B5cceptin) the theor+ that pa+ment of the *ust compensation is not alwa+s required to be madefull+ in mone+, we find further that the proportion of cash pa+ment to the other thin)s of valueconstitutin) the total pa+ment, as determined on the basis of the areas of the landsepropriated, is not undul+ oppressive upon the landowner. 2t is noted that the smaller the land,the bi))er the pa+ment in mone+, primaril+ because the small landowner will be needin) it morethan the bi) landowners, who can afford a bi))er balance in bonds and other thin)s of value. Noless importantl+, the )overnment financial instruments ma-in) up the balance of the pa+mentare >ne)otiable at an+ time.> The other modes, which are li-ewise available to be landowner athis option, are also not unreasonable because pa+ment is made in shares of stoc-, 0:P bonds,other properties or assets, ta credits, and other thin)s of value equivalent to the amount of *ustcompensation.

B5dmittedl+, the compensation contemplated in the law will cause the landowners, bi) andsmall, not a little inconvenience. 5s alread+ remar-ed, this cannot be avoided. Nevertheless, itis devoutl+ hoped that these countr+men of ours, conscious as we -now the+ are of the need fortheir forbearance and even sacrifice, will not be)rud)e us their indispensable share in theattainment of the ideal of a)rarian reform. therwise, our pursuit of this elusive )oal will be li-ethe quest for the ol+ Frail.B

5ll told, we hold that the appellate court was correct in sustainin) the propriet+ and the efficac+of the 5pril 8!, #""' rder of /ud)e 0la)uno. 2n the eercise of her supervisor+ powers over theeecution of a final and eecutor+ *ud)ment,#!such as her 5u)ust #8, #""7 Decision, specialcircumstances attendin) its eecution impelled her to issue the rder clarif+in) the termsthereof.


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Petitioner>s claim for dama)es a)ainst the ban- must li-ewise be denied because, as alread+eplained, it was well within its ri)hts in resistin) the former>s claim.

-HEREFORE, the Petition is hereb+ D


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The Den3ons interposed an appeal to the Court of 5ppeals but it was dismissed on March ##,

#"!'. 5n entr+ of *ud)ment was made on Ap#i/ , 4.

2n #"$=, /ose Faleos, one of the heirs of the Den3ons, filed with the National 5irports

Corporation a claim for rentals for the two lots, but it Bdenied -nowled)e of the matter.B 5nother

heir, Nestor :elocura, brou)ht the claim to the ffice of then President Carlos Farcia who wrote

the Civil 5eronautics 5dministration and the &ecretar+ of National Defense to epe

just compensation & taxation cases

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