cases for eighth quiz

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SPECIAL SECOND DIVISION

[G.R. No. 156273. August 9, 2005]

HEIRS OF TIMOTEO MORENO and MARIA ROTEA, namely, ESPERANZAR. EDJEC, BERNARDA R. SUELA, RUBY C. ROTEA, BERNARDA R.ROTEA, ELIA R. VDA. DE LIMBAGA, VIRGINIA R. ARBON,ROSALINDA R. ARQUISOLA, CORAZON ROTEA, FE R. EBORA,CARIDAD ROTEA, ANGELES VDA. DE RENACIA, JORGE ROTEA,MARIA LUISA ROTEA-VILLEGAS, ALFREDO R. ROTEA, representedby his heirs, namely, LIZBETH ROTEA and ELEPETH ROTEA; LUISROTEA, represented by his heir JENNIFER ROTEA;and ROLANDO

R. ROTEA, represented by his heir ROLANDO R. ROTEA, JR., petitioners, vs. MACTAN-CEBU INTERNATIONAL AIRPORTAUTHORITY, respondent.

R E S O L U T I O N

CALLEJO, SR., J.:

This is a Motion for Reconsideration dated November 10, 2003 filed by respondentMactan-Cebu International Airport Authority (MCIAA), through the Office of the SolicitorGeneral (OSG), seeking the reversal of the Decision[1] dated October 15, 2003,[2] the

dispositive portion of which reads:

WHEREFORE, the instant Petition for Reviewis GRANTED. The Decision of the Courtof Appeals in CA-G.R. CV No. 64456 dated 20 December 2001 and its Resolution of 28November 2002, denying reconsideration of the Decision are REVERSED and SET ASIDE.

The Decision of RTC-Br. 19 of Cebu City dated 12 April 1999 in Civil Case No. CEB20015 is MODIFIED IN PART by

(a) ORDERING respondent Mactan-Cebu International Airport Authority (MCIAA) TORECONVEY to petitioner Heirs of Timoteo Moreno and Maria Rotea, namely: Esperanza R.Edjec, Bernarda R. Suela, Ruby C. Rotea, Bernarda R. Rotea, Elia R. Vda. de Limbaga,Virginia R. Arbon, Rosalinda R. Arquisola, Corazon Rotea, Fe R. Ebora, Caridad Rotea,

Angeles Vda. de Renacia, Jorge Rotea, Maria Luisa Rotea-Villegas, Alfredo R. Rotea,represented by his heirs, namely: Lizbeth Rotea and Elepeth Rotea; Luis Rotea, representedby his heir Jennifer Rotea; and Rolando R. Rotea, represented by his heir Rolando R.Rotea, Jr., Lot No. 916 with an area of 2,355 square meters and Lot No. 920 consisting of3,097 square meters in Lahug, Cebu City, with all the improvements thereon evolvingthrough nature or time, but excluding those that were introduced by third parties, i.e., DPWH,which shall be governed by existing contracts and relevant provisions of law;

(b) ORDERING petitioner Heirs of Timoteo Moreno and Maria Rotea TO PAYrespondent MCIAA what the former received as just compensation for the expropriation ofLot Nos. 916 and 920 in Civil Case No. R-1881, i.e., P7,065.00 for Lot No. 916 andP9,291.00 for Lot No. 920 with consequential damages by way of legal interest from 16

November 1947. Petitioners must likewise PAY respondent MCIAA the necessary expensesthat the latter may have incurred in sustaining the properties and the monetary value of itsservices in managing the properties to the extent that petitioners will secure a benefit fromsuch acts. Respondent MCIAA however may keep whatever income or fruits it may have
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obtained from the parcels of land, in the same way that petitioners need not account for theinterests that the amounts they received as just compensation may have earned in themeantime;

(c) ORDERING respondent MCIAA TO CONVEY to petitioners the improvements itmay have built on Lot Nos. 916 and 920, if any, in which case petitioners SHALL PAY forthese improvements at the prevailing free market price, otherwise, if petitioners do not wantto appropriate such improvements, or if respondent does not choose to sell them,respondent MCIAA SHALL REMOVE these improvements WITHOUT ANY OBLIGATIONon the part of petitioners to pay any compensation to respondent MCIAA from them;

(d) ORDERING petitioners TO PAY the amount so determined under letter (b) of thisdispositive portion as consideration for the reconveyance of Lot Nos. 916 and 920, as wellas the prevailing free market price of the improvements built thereon by respondent MCIAA,if any and desired to be bought and sold by the parties, in ready money or cash PAYABLEwithin a period of three hundred sixty-five (365) days from the date that the amount underletter (b) above is determined with finality, unless the parties herein stipulate a differentscheme or schedule of payment, otherwise, after the period of three hundred sixty-five (365)days or the lapse of the compromise scheme or schedule of payment and the amount sopayable is not settled, the right of repurchase of petitioners and the obligation of respondent

MCIAA to so reconvey Lot Nos. 916 and 920 and/or the improvements shall be DEEMEDFORFEITED and the ownership of those parcels of land shall VEST ABSOLUTELY uponthe respondent MCIAA;

(e) REMANDING the instant case to RTC-Br. 19 of Cebu City for purposes ofdetermining the amount of compensation for Lot Nos. 916 and 920 to be paid by petitionersas mandated in letter (b) hereof, and the value of the prevailing free market price of theimprovements built thereon by respondent MCIAA, if any and desired to be bought and soldby the parties, and in general, securing the immediate execution of this Decision under thepremises;

(f) ORDERING petitioners to respect the right of the Department of Public Works and

Highways to its lease contract until the expiration of the lease period; and(g) DELETING the award of P60,000.00 for attorneys fees and P15,000.00 for

litigation expenses against respondent MCIAA and in favor of petitioners.

This Decision is without prejudice to the claim of intervenor one Richard E. Enchuan onhis allegation that he acquired through deeds of assignment the rights of some of hereinpetitioners over Lot Nos. 916 and 920.

No costs.

SO ORDERED.[3]

A review of the factual milieu of the case reveals that in 1949, the National Airport

Corporation (NAC), as the predecessor of herein respondent MCIAA, sought to acquire LotNo. 916, having a total area of 2,355 square meters under Transfer Certificate of Title (TCT)No. RT-7543 (106) T-13694, and Lot No. 920 containing an area of 3,097 square meterscovered by TCT No. RT-7544 (107) T-13695 for the proposed expansion of the LahugAirport. The two parcels of land located in Lahug, Cebu City were owned by the spousesTimoteo Moreno and Maria Rotea.[4] The spouses refused to sell their properties because theproposed price was unacceptably way below the market value of the lands at that time. Asan incentive for the other owners to cede their lots adjoining the then existing Lahug Airport,NAC guaranteed them or their successors-in-interest the right to repurchase their propertiesfor the same price paid by the government in the event that these properties were no longerused for purposes of the airport. [5] Some landowners executed deeds of conveyance while

others who refused to cede their properties became defendants in an action for expropriationfiled by the Republic of the Philippines before the Court of First Instance (CFI) of Cebu,docketed as Civil Case No. R-1881. [6] Lot Nos. 916 and 920 were among those included inthe expropriation case.
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In a Decision[7] rendered by the trial court on December 29, 1961, Lot Nos. 916 and 920,along with the other adjoining lands, were condemned for public use after payment of justcompensation.[8] The trial court fixed the price at P3.00 per square meter for the two lots andordered the payment thereof to the owners in the sum of P7,065.00 for Lot No. 916 andP9,291.00 for Lot No. 920, with payment of consequential damages by way of legal interestfrom November 16, 1947.[9] Thereafter, the subject lands were transferred in the name of theRepublic of the Philippines under TCT No. 58691 [10] for Lot No. 916 and TCT No. 58692 [11] forLot No. 920 and subsequently turned over to MCIAA under Republic Act (Rep. Act) No. 6958in 1990.[12]

Subsequently, the Lahug Airport was abandoned and all its functions and operationswere transferred to the Mactan Airport. In two various letters sent on different dates, the heirsof Timoteo Moreno and Maria Rotea, the petitioners herein, wrote then President Fidel V.Ramos[13] and the MCIAA General Manager,[14] requesting for the exercise of their supposedright to repurchase Lot Nos. 916 and 920 considering that the said lots intended for theexpansion of the Lahug Airport were not utilized. Their written and verbal demands wereignored by the respondent.

Consequently, the petitioners filed a complaint for reconveyance and damages with theRegional Trial Court of Cebu City docketed as Civil Case No. CEB-20015, against therespondent asserting their right to reacquire the subject properties. In the complaint, thepetitioners claimed that assurances were given by the NAC officials regarding the entitlementof the landowners to repurchase their properties for the same price paid by NAC in the eventthat the lots were no longer used for airport purposes.[15] The petitioners further added that theguaranty of right to repurchase was the propelling factor that persuaded the registeredowners to continue with the expropriation proceedings. The same reason was given by thepetitioners for not opposing and appealing the case later on.[16]

During the pendency of the case, one Richard E. Unchuan filed a Motion for Transfer ofInterest,[17] alleging that some of the petitioners had already assigned to him their respectiverights, interests, participation, and ownership over the subject properties. Thereafter, theDepartment of Public Works and Highways (DPWH), likewise, sought to intervene allegingthat it is the lessee of Lot No. 920 and would be adversely affected by the outcome of thelitigation.[18]

At the start of the trial, the petitioners presented two witnesses to support theirallegations in the complaint. The first witness was Esperanza Rotea Edjec, who testified thatwhen she was just 22 years old, the airport authority representatives called for a meetingwith the landowners affected by the expropriation. The witness was present during thegathering and attested that the registered owners of the lots were assured of the return of theexpropriated lands should the same be no longer utilized as an airport. [19]

The next witness was Asterio Uy, a retired government employee of the Civil AeronauticsAdministration (CAA), who attested that in 1957, he was sent as part of the legal team toMactan, Cebu City, tasked to acquire certain lots for the extension of the Lahug Airport. Headded that when the negotiations broke down, the legal contingent resorted to expropriationproceedings. Upon instructions from the central office of CAA in Manila, Atty. Ocampo, thehead of the legal corps which undertook the procurement of the subject lands, gave theassurance to the landowners that if the airport is transferred to Mactan, the lots will bereturned to their previous owners.[20]

The respondent, on the other hand, presented on the witness stand Michael M.Bacarisas, a legal assistant of the MCIAA. The witness testified that as a consequence ofthe expropriation proceedings, the TCTs of Lot Nos. 916 and 920 were cancelled and in lieuthereof, new ones were issued in the name of the Republic of the Philippines in 1962. Hepronounced that the decision in Civil Case No. R-1881 did not expressly impart that the
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landowners were guaranteed the reconveyance of the lots to them if the lands expropriatedwould not be used for the purpose. On cross-examination, the witness admitted that he hadno personal knowledge of any agreement between the airport officials and the previousregistered owners of the disputed properties. His research likewise revealed that a total of 65lots were expropriated by the government; 19 lots were the subject of court litigationsconcerning their reconveyance; and that out of the 19 lots, 15 lots were already returned totheir former owners. Moreover, Bacarisas alleged that some of the expropriated lots wererecovered by their previous landowners because they were acquired through negotiated salewherein the standard contract had an express provision that should the proposed expansionof the Lahug Airport not materialize, the landowners may recover their properties.[21]

On April 12, 1999, the trial court rendered judgment [22] in favor of the petitioners, grantingthem the right to repurchase the properties at the amount originally paid by the respondent inCivil Case No. R-1881, including consequential damages. The trial court ruled that the publicpurpose for which the lands were expropriated had ceased to exist, therefore, it is but logicaland in the higher interest of substantial justice to give back the right of ownership of thesubject lots to the former owners.

Aggrieved, the respondent appealed the decision to the Court of Appeals (CA). OnDecember 20, 2001, the CA reversed the trial courts decision on the premise that the judgment affirming the states right to exercise its power of eminent domain wasunconditional. In maintaining a contrary view, the CA cited Fery v. Municipality ofCabanatuan,[23] which held that when a land has been acquired for public use unconditionallyand in fee simple, the previous owner retains no right in the land and the title obtained willnot, in any way, be impaired. Another case relied upon by the appellate court was Mactan-Cebu International Airport Authority v. Court of Appeals [24] which is allegedly stare decisis tothe case to prevent the exercise of the right of repurchase as the former dealt with a parcel ofland similarly expropriated under Civil Case No. R-1881; hence, the same questions relatingto the same event have already been previously litigated and decided by a competent court.

On February 11, 2002, the petitioners filed a motion for reconsideration before the CA,which was denied in a Resolution dated November 28, 2002.

Expectedly, the petitioners filed before this Court a petition for review of the decision ofthe CA.

In reversing the decision of the CA, the Court ratiocinated that the attendance in the caseat bar of standing admissible evidence validating the claim of the petitioners right torepurchase the expropriated properties took away the instant case from the ambit ofMactan-Cebu International Airport Authority v. Court of Appeals, but still within the principlesenunciated in the Ferycase.[25] This Court moreover added:

Mactan-Cebu International Airport Authority is correct in stating that one would not findan express statement in the Decision in Civil Case No. R-1881 to the effect that the[condemned] lot would return to [the landowner] or that [the landowner] had a right torepurchase the same if the purpose for which it was expropriated is ended or abandoned orif the property was to be used other than as the Lahug Airport. This omissionnotwithstanding, and while the inclusion of this pronouncement in the judgment ofcondemnation would have been ideal, such precision is not absolutely necessary nor is itfatal to the cause of petitioners herein. No doubt, the return or repurchase of the condemnedproperties of petitioners could be readily justified as the manifest legal effect or consequenceof the trial courts underlying presumption that Lahug Airport will continue to be in operationwhen it granted the complaint for eminent domain and the airport discontinued its activities.

The predicament of petitioners involves a constructive trust, one that is akin to theimplied trust referred to in Art. 1454 of the Civil Code,If an absolute conveyance of propertyis made in order to secure the performance of an obligation of the grantor toward thegrantee, a trust by virtue of law is established. If the fulfillment of the obligation is offered by
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the grantor when it becomes due, he may demand the reconveyance of the property to him.In the case at bar, petitioners conveyed Lot Nos. 916 and 920 to the government with thelatter obliging itself to use the realties for the expansion of Lahug Airport; failing to keep itsbargain, the government can be compelled by petitioners to reconvey the parcels of land tothem, otherwise, petitioners would be denied the use of their properties upon a state ofaffairs that was not conceived nor contemplated when the expropriation was authorized.[26]

Respondent MCIAA filed a Motion for Reconsideration[27] dated November 10, 2003praying that the Courts decision be reconsidered and set aside. In the said motion, therespondent reiterated its earlier claim that: (a) the decision of the trial court in Civil Case No.R-1881, which granted to MCIAA the titles to Lot Nos. 916 and 920 in fee simple, has longbecome final and executory; (b) this Courts October 15, 2003 Decision, granting thepetitioners right of repurchase, effectively overturns the rulings in Fery v. Municipality ofCabanatuan,[28] MCIAA v. Court of Appeals,[29] and Reyes v. National Housing Authority;[30](c)the petitioners are not entitled to reconveyance or repurchase of the questioned lots after theclosure of the Lahug Airport; (d) Lot Nos. 916 and 920, which were expropriated in Civil CaseNo. R-1881, should not be treated like those lots sold through negotiated sale with astipulation for reconveyance or repurchase; and (e) granting arguendo that petitioners have a

right to repurchase Lot Nos. 916 and 920, the repurchase price should be the fair marketvalue of the lands.

Additionally, MCIAA filed a Motion to Resolve the Motion for Reconsideration by theHonorable Court En Bancdated November 11, 2003, alleging that the present case involvesnovel questions of law.

On November 20, 2003, the petitioners filed an Opposition to the respondents Motion forReconsideration stating that no new arguments have been proffered by the respondent towarrant the reversal of the Courts decision.

We remain unpersuaded by the respondents assertions. The merits of the case havealready been discussed at length in the challenged decision and to linger further on themherein would be inordinate. Suffice it to say that the Court considered the rulings in Fery v.Municipality of Cabanatuan and Mactan-Cebu International Airport Authority v. Court ofAppeals which defined the rights and obligations of landowners, whose properties wereexpropriated, when the publicpurpose for which the eminent domain was exercised nolonger subsists.[31]

The respondent insists that the decision effectively overturned the ruling in the Ferycasewhich requires that for an expropriation to be conditional, the judgment must clearly spell outsaid condition. The respondent is mistaken. We reiterate what we stated in our decision, towit:

In Fery, which was cited in the recent case ofReyes v. National Housing Authority,we declared that the government acquires only such rights in expropriated parcels of land asmay be allowed by the character of its title over the properties

If x x x land is expropriated for a particular purpose, with the condition thatwhen that purpose is ended or abandoned the property shall return to its formerowner, then, of course, when the purpose is terminated or abandoned the formerowner reacquires the property so expropriated. If x x x land is expropriated for apublic street and the expropriation is granted upon condition that the city can onlyuse it for a public street, it returns to the former owner, unless there is somestatutory provision to the contrary x x x x If, upon the contrary, however, the decreeof expropriation gives to the entity a fee simple title, then, of course, the landbecomes the absolute property of the expropriator, whether it be the State, aprovince, or municipality, and in that case the non-user does not have the effect ofdefeating the title acquired by the expropriation proceedings x x x x When land hasbeen acquired for public use in fee simple, unconditionally, either by the exercise of
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eminent domain or by purchase, the former owner retains no rights in the land, andthe public use may be abandoned, or the land may be devoted to a different use,without any impairment of the estate or title acquired, or any reversion to the formerowner x x x x[32]

It must be pointed out that nothing in the Fery case bespeaks that there shouldforemost be an express condition in the dispositive portion of the decision before the

condemned property can be returned to its former owner after the purpose for its taking hasbeen abandoned or ended. The indisputable certainty in the present case is that there was aprior promise by the predecessor of the respondent that the expropriated properties may berecovered by the former owners once the airport is transferred to Mactan, Cebu. In fact, thewitness for the respondent testified that 15 lots were already reconveyed to their previousowners. Intervenor DPWH, likewise, manifested that Lot No. 920 is the subject of amemorandum of agreement[33] with the respondents predecessor-in-interest wherein theproperty was leased to DPWH. This belated news further bolsters the fact that the purposefor which the properties were condemned has been abandoned.

A more pressing discovery unearthed by this Court is that a significant portion of thesubject properties had been purchased by the Cebu Property Ventures, Inc. for thedevelopment of a commercial complex.[34] The respondent, in its answer, did not deny thisallegation in the petitioners complaint. Section 10, Rule 8 of the Revised Rules of Courtprovides:

Specific denial. A defendant must specify each material allegation of fact the truth ofwhich he does not admit and, whenever practicable, shall set forth the substance of thematters upon which he relies to support his denial. Where a defendant desires to deny onlya part of an averment, he shall specify so much of it as is true and material and shall denyonly the remainder. Where a defendant is without knowledge or information sufficient to forma belief as to the truth of a material averment made in the complaint, he shall so state, andthis shall have the effect of a denial.

Section 11 of the same Rule likewise states that [m]aterial averment in the complaint, shall be deemed admitted when not specifically denied. The predominant precept is thatupon abandonment of real property condemned for public purpose, the party who originallycondemned the property recovers control of the land if the condemning party continues touse the property for public purpose; however, if the condemning authority ceases to use theproperty for a public purpose, property reverts to the owner in fee simple. [35] The governmentstaking of private property, and then transferringit to private persons under the guise of publicuse or purpose is the despotism found in the immense power of eminent domain.[36]

Moreover, the direct and unconstitutional states power to oblige a landowner to renounce hisproductive and invaluable possession to another citizen, who will use it predominantly for hisown private gain, is offensive to our laws.[37]

Next, the respondent asseverates that the Court departed from the ruling enunciated inMactan-Cebu International Airport Authority v. Court of Appeals. We are not convinced.Clearly, the respondents contention can prevail only if the facts of the present case areaccurately in point with those in the other case. We recapitulate our rulings that in MCIAA v.CA, respondent Virginia Chiongbian proffered inadmissible and inconclusive evidence, whilein the present case we have preponderant proof as found by the trial court of the existence ofthe right of repurchase in favor of the petitioners. No less than Asterio Uy, one of themembers of the CAA Mactan Legal Team, which interceded for the acquisition of the lots forthe Lahug Airports expansion, affirmed that persistent assurances were given to thelandowners to the effect that as soon as the Lahug Airport is abandoned or transferred to

Mactan, the lot owners would be able to reacquire their properties. Unlike in the case ofMCIAA v. CA, where respondent Chiongbian offered inadmissible evidence for beinghearsay in nature, the petitioners in this case presented a witness whose testimony wasbased on his own personal knowledge. Surely, Uy is a credible witness inasmuch as he was
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even tasked by the negotiating panel to directly communicate to the landowners theinstructions from the CAA main office that the properties will be returned to the originalowners once the Lahug Airport is transferred to Mactan. Likewise, he cannot be consideredas a biased witness as he was a former employee of the respondents predecessor-in-interest and was merely recalling and informing the court of the events that transpired duringthe negotiations for the expropriations of the lots. Part of Uys testimony is as follows:

Atty. Jacinto

Q: Lahug Airport. In what capacity or what position were you holding at the time when youwere assigned to Cebu for the purpose of conducting negotiations with the landowners?

Witness

A: I was a member of the CAA Legal Team.

Q: I see, CAA Legal Team. Can you tell the court who were the members, if you stillremember, of that team?

A: I will mention Atty. Ocampo, Atty. Lansang, Atty. Sarigumba and myself.

Q: You stated that you were sent to Cebu as a member of the CAA Legal Team tonegotiate with the landowners for the acquisition of lots for purposes, for airportpurposes, you are referring of course to the acquisition of lot in Mactan?

A: Yes, sir.

Q: Now what was the purpose of your negotiations also in Lahug, what was the purpose ofthose negotiations?

A: The purpose there was to purchase or buy the property affected by the Lahugextension.

Q: When you say affected, did you have any specific instructions as to what Lahug airportwould be devoted to? I will reform Your Honor. Since Lahug airport was already inexistence, why did you still have to negotiate with the adjacent landowners?

A: For the Lahug airport expansion.

Q: Now, how did you conduct the negotiations, in what manner?

A: We convinced the landowners affected by the expansion to sell their properties and ifthey refuse, there is another right of eminent domain of the government to acquire theproperties through expropriation. And with the assurance that these properties, I amreferring to the properties in Lahug, as soon as Lahug airport will be transferred toMactan, that will be the time that these properties will be returned to the landowners at

the same price.Q: Why do you say that there was an assurance given, how did you come to know about

this?

A: The assurance was from the Chief of the team, Atty. Ocampo, through him andaccordingly per instruction from the Central Office in Manila.

Q: As a member of the legal team, did you gave [sic] the assurance to the landowners orwas it Atty. Ocampo?

A: We, because I was made as the spokesman considering that I am a Boholano whoknows the dialect, Cebuano, and my companions were Tagalogs, they dont knowCebuano so I participated in the negotiations.

Q: In short, you were the one who conducted the negotiations?

A: Together with the members of the team, I was there assisting.[38]
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Moreover, we do not subscribe to the respondents contention that since the possibility ofthe Lahug Airports closure was actually considered by the trial court, a stipulation onreversion or repurchase was so material that it should not have been discounted by the courta quo in its decision in Civil Case No. R-1881, if, in fact, there was one. We find it proper tocite, once more, this Courts ruling that the fallo of the decision in Civil Case No. R-1881must be read in reference to the other portions of the decision in which it forms a part. Areading of the Courts judgment must not be confined to the dispositive portion alone; rather,it should be meaningfully construed in unanimity with the ratio decidendithereof to grasp thetrue intent and meaning of a decision.[39]

On the other hand, we agree with the respondent in asserting that Lot Nos. 916 and 920should not be treated like those lands acquired through negotiated sale with a proviso in theircontracts for reconveyance or repurchase. Be that as it may, we however find that there ishistoric as well as rational bases for affording the petitioners the right of repurchase. We arecognizant of the incontestable fact that some landowners immediately sold their propertiesupon the assurance that they could repurchase them at the cessation of the Lahug Airportsoperations. And, indeed, these landowners who chose to cede their properties were fortunateto have a stipulation in their contract of sale vouching for their right of repurchase.

Meanwhile, the landowners who found it burdensomely difficult to part with their cherishedlands underwent the costly expropriation proceedings which lasted for a number of years.Inevitably, justice and equity dictates the reconveyance of the expropriated lots to theirprevious owners. One must never fail to overlook the reality that the power to condemnproperty is an awesome power of the State[40] and that to compel a citizen to forciblysurrender his precious property to the enormous governmental power is too much a sacrificewhich deserves more consideration than those landowners, who, from the very beginningvoluntarily relinquished their ownership.

We now come to the discussion of the amount of repurchase price. The respondentmaintains that the sum to be paid by the petitioners for Lot Nos. 916 and 920 should be their

prevailing market price, and not the expropriation price which would be grossly unfairconsidering that the petitioners were paid just compensation and the lots are now millions ofpesos in value. Our stand on the amount of repurchase price remains unperturbed. When theState reconveys land, it should not profit from sudden appreciations in land values. Anyincrease or decrease in market value due to the proposed improvement may not beconsidered in determining the market value. Thus, reconveyance to the original owner shallbe for whatever amount he was paid by the government, plus legal interest, whether or notthe consideration was based on the lands highest and best use when the sale to the Stateoccurred.[41]

WHEREFORE, the motion for reconsideration is DENIED.

SO ORDERED.
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[G.R. No. 146587. July 2, 2002]

REPUBLIC OF THE PHILIPPINES, represented by the General Manager ofthe PHILIPPINE INFORMATION AGENCY (PIA), petitioner, vs. THEHONORABLE COURT OF APPEALS and the HEIRS OF LUISSANTOS as herein represented by DR. SABINO SANTOS andPURIFICACION SANTOS IMPERIAL, respondents.

D E C I S I O N

VITUG, J.:

Petitioner instituted expropriation proceedings on 19 September 1969 before theRegional Trial Court ("RTC") of Bulacan, docketed Civil Cases No. 3839-M, No. 3840-M, No.3841-M and No. 3842-M, covering a total of 544,980 square meters of contiguous land

situated along MacArthur Highway, Malolos, Bulacan, to be utilized for the continuedbroadcast operation and use of radio transmitter facilities for the Voice of the Philippinesproject. Petitioner, through the Philippine Information Agency (PIA), took over the premisesafter the previous lessee, the Voice of America, had ceased its operations thereat.Petitioner made a deposit of P517,558.80, the sum provisionally fixed as being thereasonable value of the property. On 26 February 1979, or more than nine years after theinstitution of the expropriation proceedings, the trial court issued this order -

"WHEREFORE, premises considered, judgment is hereby rendered:

"Condemning the properties of the defendants in Civil Cases Nos. 3839-M to 3842-Mlocated at KM 43, MacArthur Highway, Malolos, Bulacan and covered by several transfer

certificates of title appearing in the Commissioners Appraisal Report consisting of the totalarea of 544,980 square meters, as indicated in plan, Exhibit A, for plaintiff, also marked asExhibit I for the defendants, and as Appendix A attached to the Commissioners AppraisalReport, for the purpose stated by the plaintiff in its complaint;

"Ordering the plaintiff to pay the defendants the just compensation for said propertywhich is the fair market value of the land condemned, computed at the rate of six pesos(P6.00) per square meter, with legal rate of interest from September 19, 1969, until fullypaid; and

"Ordering the plaintiff to pay the costs of suit, which includes the aforesaid fees ofcommissioners, Atty. Victorino P. Evangelista and Mr. Pablo Domingo."i[1]

The bone of contention in the instant controversy is the 76,589-square meter propertypreviously owned by Luis Santos, predecessor-in-interest of herein respondents, which formspart of the expropriated area.

It would appear that the national government failed to pay to herein respondents thecompensation pursuant to the foregoing decision, such that a little over five years later, or on09 May 1984, respondents filed a manifestation with a motion seeking payment for theexpropriated property. On 07 June 1984, the Bulacan RTC, after ascertaining that the heirsremained unpaid in the sum of P1,058,655.05, issued a writ of execution served on theplaintiff, through the Office of the Solicitor General, for the implementation thereof. When theorder was not complied with, respondents again filed a motion urging the trial court to directthe provincial treasurer of Bulacan to release to them the amount of P72,683.55, a portion ofthe sum deposited by petitioner at the inception of the expropriation proceedings in 1969,corresponding to their share of the deposit. The trial court, in its order of 10 July 1984,granted the motion.


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In the meantime, President Joseph Ejercito Estrada issued Proclamation No. 22, ii[2]

transferring 20 hectares of the expropriated property to the Bulacan State University for theexpansion of its facilities and another 5 hectares to be used exclusively for the propagation ofthe Philippine carabao. The remaining portion was retained by the PIA. This factnotwithstanding, and despite the 1984 court order, the Santos heirs remained unpaid, and noaction was taken on their case until 16 September 1999 when petitioner filed itsmanifestation and motion to permit the deposit in court of the amount of P4,664,000.00 byway of just compensation for the expropriated property of the late Luis Santos subject tosuch final computation as might be approved by the court. This time, the Santos heirs,opposing the manifestation and motion, submitted a counter-motion to adjust thecompensation from P6.00 per square meter previously fixed in the 1979 decision to itscurrent zonal valuation pegged at P5,000.00 per square meter or, in the alternative, to causethe return to them of the expropriated property. On 01 March 2000, the Bulacan RTC ruled infavor of respondents and issued the assailed order, vacating its decision of 26 February1979 and declaring it to be unenforceable on the ground of prescription -

"WHEREFORE, premises considered, the court hereby:

"1) declares the decision rendered by this Court on February 26, 1979 no longerenforceable, execution of the same by either a motion or an independent action havingalready prescribed in accordance with Section 6, Rule 39 of both the 1964 Revised Rules ofCourt and the 1997 Rules of Civil Procedure;

"2) denies the plaintiffs Manifestation and Motion to Permit Plaintiff to Deposit inCourt Payment for Expropriated Properties dated September 16, 1999 for the reason statedin the next preceding paragraph hereof; and

"3) orders the return of the expropriated property of the late defendant Luis Santos tohis heirs conformably with the ruling of the Supreme Court in Government of Sorsogon vs.Vda. De Villaroya, 153 SCRA 291, without prejudice to any case which the parties maydeem appropriate to institute in relation with the amount already paid to herein oppositors

and the purported transfer of a portion of the said realty to the Bulacan State Universitypursuant to Proclamation No. 22 issued by President Joseph Ejercito."iii[3]

Petitioner brought the matter up to the Court of Appeals but the petition was outrightlydenied. It would appear that the denial was based on Section 4, Rule 65, of the 1997 Rulesof Civil Procedure which provided that the filing of a motion for reconsideration in due timeafter filing of the judgment, order or resolution interrupted the running of the sixty-day periodwithin which to file a petition for certiorari; and that if a motion for reconsideration wasdenied, the aggrieved party could file the petition only within the remaining period, but whichshould not be less than five days in any event, reckoned from the notice of such denial. Thereglementary period, however, was later modified by A.M. No. 00-2-03 S.C., now reading

thusly:Sec. 4. When and where petition filed. --- The petition shall be filed not later than sixty

(60) days from notice of the judgment, order or resolution. In case a motion forreconsideration or new trial is timely filed, whether such motion is required or not, the sixty(60) day period shall be counted from notice of the denial of said motion.

The amendatory provision, being curative in nature, should be made applicable to all casesstill pending with the courts at the time of its effectivity.

In Narzoles vs. NLRC,iv[4] the Court has said:

The Court has observed that Circular No. 39-98 has generated tremendous confusionresulting in the dismissal of numerous cases for late filing. This may have been because,historically, i.e., even before the 1997 revision to the Rules of Civil Procedure, a party had afresh period from receipt of the order denying the motion for reconsideration to file a petitionfor certiorari. Were it not for the amendments brought about by Circular No. 39-98, the casesso dismissed would have been resolved on the merits. Hence, the Court deemed it wise to


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revert to the old rule allowing a party a fresh 60-day period from notice of the denial of themotion for reconsideration to file a petition for certiorari. x x x

The latest amendments took effect on September 1, 2000, following its publication inthe Manila Bulletin on August 4, 2000 and in the Philippine Daily Inquirer on August 7, 2000,two newspapers of general circulation.

In view of its purpose, the Resolution further amending Section 4, Rule 65, can only be

described as curative in nature, and the principles governing curative statutes areapplicable.

Curative statutes are enacted to cure defects in a prior law or to validate legalproceedings which would otherwise be void for want of conformity with certain legalrequirements. (Erectors, Inc. vs. National Labor Relations Commission, 256 SCRA 629[1996].) They are intended to supply defects, abridge superfluities and curb certain evils.They are intended to enable persons to carry into effect that which they have designed orintended, but has failed of expected legal consequence by reason of some statutorydisability or irregularity in their own action. They make valid that which, before theenactment of the statute was invalid. Their purpose is to give validity to acts done thatwould have been invalid under existing laws, as if existing laws have been complied with.

(Batong Buhay Gold Mines, Inc. vs. Dela Serna, 312 SCRA 22 [1999].) Curative statutes,therefore, by their very essence, are retroactive. (Municipality of San Narciso, Quezon vs.Mendez, Sr., 239 SCRA 11 [1994].)v[5]

At all events, petitioner has a valid point in emphasizing the "public nature" of theexpropriated property. The petition being imbued with public interest, the Court has resolvedto give it due course and to decide the case on its merits.

Assailing the finding of prescription by the trial court, petitioner here posited that a motionwhich respondents had filed on 17 February 1984, followed up by other motions subsequentthereto, was made within the reglementary period that thereby interrupted the 5-yearprescriptive period within which to enforce the 1979 judgment. Furthermore, petitioner

claimed, the receipt by respondents of partial compensation in the sum of P72,683.55 on 23July 1984 constituted partial compliance on the part of petitioners and effectively estoppedrespondents from invoking prescription expressed in Section 6, Rule 39, of the Rules ofCourt.vi[6]

In opposing the petition, respondents advanced the view that pursuant to Section 6, Rule39, of the Rules of Court, the failure of petitioner to execute the judgment, dated 26 February1979, within five years after it had become final and executory, rendered it unenforceable bymere motion. The motion for payment, dated 09 May 1984, as well as the subsequentdisbursement to them of the sum of P72,683.55 by the provincial treasurer of Bulacan, couldnot be considered as having interrupted the five-year period, since a motion, to be

considered otherwise, should instead be made by the prevailing party, in this case bypetitioner. Respondents maintained that the P72,683.55 paid to them by the provincialtreasurer of Bulacan pursuant to the 1984 order of the trial court was part of the initial depositmade by petitioner when it first entered possession of the property in 1969 and should not beso regarded as a partial payment. Respondents further questioned the right of PIA totransfer ownership of a portion of the property to the Bulacan State University even while thejust compensation due the heirs had yet to be finally settled.

The right of eminent domain is usually understood to be an ultimate right of thesovereign power to appropriate any property within its territorial sovereignty for a publicpurpose.vii[7] Fundamental to the independent existence of a State, it requires no recognitionby the Constitution, whose provisions are taken as being merely confirmatory of its presenceand as being regulatory, at most, in the due exercise of the power. In the hands of thelegislature, the power is inherent, its scope matching that of taxation, even that of policepower itself, in many respects. It reaches to every form of property the State needs for public


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use and, as an old case so puts it, all separate interests of individuals in property are heldunder a tacit agreement or implied reservation vesting upon the sovereign the right toresume the possession of the property whenever the public interest so requires it. viii[8]

The ubiquitous character of eminent domain is manifest in the nature of the expropriationproceedings. Expropriation proceedings are not adversarial in the conventional sense, for thecondemning authority is not required to assert any conflicting interest in the property. Thus,

by filing the action, the condemnor in effect merely serves notice that it is taking title andpossession of the property, and the defendant asserts title or interest in the property, not toprove a right to possession, but to prove a right to compensation for the taking.ix[9]

Obviously, however, the power is not without its limits: first, the taking must be for publicuse, and second, that just compensation must be given to the private owner of the property. x[10] These twin proscriptions have their origin in the recognition of the necessity for achievingbalance between the State interests, on the one hand, and private rights, upon the otherhand, by effectively restraining the former and affording protection to the latter.xi[11] Indetermining public use, two approaches are utilized - the first is public employment or theactual use by the public, and the secondis public advantage or benefit.xii[12] It is also useful to

view the matter as being subject to constant growth, which is to say that as societyadvances, its demands upon the individual so increases, and each demand is a new use towhich the resources of the individual may be devoted.xiii[13]

The expropriated property has been shown to be for the continued utilization by the PIA,a significant portion thereof being ceded for the expansion of the facilities of the BulacanState University and for the propagation of the Philippine carabao, themselves in line with therequirements of public purpose. Respondents question the public nature of the utilization bypetitioner of the condemned property, pointing out that its present use differs from thepurpose originally contemplated in the 1969 expropriation proceedings. The argument is ofno moment. The property has assumed a public character upon its expropriation. Surely,petitioner, as the condemnor and as the owner of the property, is well within its rights to alterand decide the use of that property, the only limitation being that it be for public use, which,decidedly, it is.

In insisting on the return of the expropriated property, respondents would exhort on thepronouncement in Provincial Government of Sorsogon vs. Vda. de Villaroya xiv[14] where theunpaid landowners were allowed the alternative remedy of recovery of the property there inquestion. It might be borne in mind that the case involved the municipal government ofSorsogon, to which the power of eminent domain is not inherent, but merely delegated and oflimited application. The grant of the power of eminent domain to local governments underRepublic Act No. 7160xv[15] cannot be understood as being the pervasive and all-encompassing power vested in the legislative branch of government. For local governments

to be able to wield the power, it must, by enabling law, be delegated to it by the nationallegislature, but even then, this delegated power of eminent domain is not, strictly speaking, apower of eminent, but only of inferior, domain or only as broad or confined as the realauthority would want it to be.xvi[16]

Thus, in Valdehueza vs. Republicxvii[17]where the private landowners had remained unpaidten years after the termination of the expropriation proceedings, this Court ruled -

The points in dispute are whether such payment can still be made and, if so, in whatamount. Said lots have been the subject of expropriation proceedings. By final andexecutory judgment in said proceedings, they were condemned for public use, as part of anairport, and ordered sold to the government. x x x It follows that both by virtue of the

judgment, long final, in the expropriation suit, as well as the annotations upon their titlecertificates, plaintiffs are not entitled to recover possession of their expropriated lots - whichare still devoted to the public use for which they were expropriated - but only to demand thefair market value of the same.


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"Said relief may be granted under plaintiffs' prayer for: `such other remedies, which maybe deemed just and equitable under the premises'."xviii[18]

The Court proceeded to reiterate its pronouncement in Alfonso vs. Pasay Cityxix[19]where therecovery of possession of property taken for public use prayed for by the unpaid landownerwas denied even while no requisite expropriation proceedings were first instituted. Thelandowner was merely given the relief of recovering compensation for his property computed

at its market value at the time it was taken and appropriated by the State.The judgment rendered by the Bulacan RTC in 1979 on the expropriation proceedings

provides not only for the payment of just compensation to herein respondents but likewiseadjudges the property condemned in favor of petitioner over which parties, as well as theirprivies, are bound.xx[20] Petitioner has occupied, utilized and, for all intents and purposes,exercised dominion over the property pursuant to the judgment. The exercise of such rightsvested to it as the condemnee indeed has amounted to at least a partial compliance orsatisfaction of the 1979 judgment, thereby preempting any claim of bar by prescription ongrounds of non-execution. In arguing for the return of their property on the basis of non-payment, respondents ignore the fact that the right of the expropriatory authority is far fromthat of an unpaid seller in ordinary sales, to which the remedy of rescission might perhapsapply. An in rem proceeding, condemnation acts upon the property.xxi[21] After condemnation,the paramount title is in the public under a new and independent title; xxii[22] thus, by givingnotice to all claimants to a disputed title, condemnation proceedings provide a judicialprocess for securing better title against all the world than may be obtained by voluntaryconveyance.xxiii[23]

Respondents, in arguing laches against petitioner did not take into account that the sameargument could likewise apply against them. Respondents first instituted proceedings forpayment against petitioner on 09 May 1984, or five years after the 1979 judgment hadbecome final. The unusually long delay in bringing the action to compel payment againstherein petitioner would militate against them. Consistently with the rule that one should take

good care of his own concern, respondents should have commenced the proper action uponthe finality of the judgment which, indeed, resulted in a permanent deprivation of theirownership and possession of the property.xxiv[24]

The constitutional limitation of just compensation is considered to be the sumequivalent to the market value of the property, broadly described to be the price fixed by theseller in open market in the usual and ordinary course of legal action and competition or thefair value of the property as between one who receives, and one who desires to sell, it fixedat the time of the actual taking by the government.xxv[25] Thus, if property is taken for public usebefore compensation is deposited with the court having jurisdiction over the case, the finalcompensation must include interests on its just value to be computed from the time the

property is taken to the time when compensation is actually paid or deposited with thecourt.xxvi[26] In fine, between the taking of the property and the actual payment, legal interestsaccrue in order to place the owner in a position as good as (but not better than) the positionhe was in before the taking occurred.xxvii[27]

The Bulacan trial court, in its 1979 decision, was correct in imposing interests on thezonal value of the property to be computed from the time petitioner instituted condemnationproceedings and took the property in September 1969. This allowance of interest on theamount found to be the value of the property as of the time of the taking computed, being aneffective forbearance, at 12% per annumxxviii[28] should help eliminate the issue of the constantfluctuation and inflation of the value of the currency over time. xxix[29] Article 1250 of the Civil

Code, providing that, in case of extraordinary inflation or deflation, the value of the currencyat the time of the establishment of the obligation shall be the basis for the payment when noagreement to the contrary is stipulated, has strict application only to contractual obligations. xxx[30] In other words, a contractual agreement is needed for the effects of extraordinary inflation


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to be taken into account to alter the value of the currency.xxxi[31]

All given, the trial court of Bulacan in issuing its order, dated 01 March 2000, vacating itsdecision of 26 February 1979 has acted beyond its lawful cognizance, the only authority leftto it being to order its execution. Verily, private respondents, although not entitled to thereturn of the expropriated property, deserve to be paid promptly on the yet unpaid award ofjust compensation already fixed by final judgment of the Bulacan RTC on 26 February 1979

at P6.00 per square meter, with legal interest thereon at 12% per annum computed from thedate of "taking" of the property, i.e., 19 September 1969, until the due amount shall havebeen fully paid.

WHEREFORE, the petition is GRANTED. The resolution, dated 31 July 2000, of theCourt of Appeals dismissing the petition forcertiorari,as well as its resolution of 04 January2001 denying the motion for reconsideration, and the decision of the Regional Trial Court ofBulacan, dated 01 March 2000, are SET ASIDE. Let the case be forthwith remanded to theRegional Trial Court of Bulacan for the proper execution of its decision promulgated on 26February 1979 which is hereby REINSTATED. No costs.

SO ORDERED.


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xxxSECOND DIVISION

PATRICIA L. TIONGSON, SPS. EDUARDO GO and PACITA GO, ROBERTO LAPERAL

III, ELISA MANOTOK, MIGUEL A.B. SISON, ET AL.,

Petitioners,

- versus -

NATIONAL HOUSING AUTHORITY,*

Respondent.G.R. No. 140377

Present:

QUISUMBING,J., Chairperson,

CARPIO MORALES,

TINGA,


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VELASCO, JR., and

BRION,JJ.

Promulgated:

July 14, 2008x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N

CARPIO MORALES, J.:

The present petition for review on certiorari raises the question of from what date should just

compensation of the subject properties sought to be expropriated be reckoned whether it is from

the taking of the property or on the filing of the complaint.

Respondent National Housing Authority (NHA) took possession in 1978 of properties belonging topetitioners Patricia L. Tiongson, et al. pursuant to P.D. No. 1669, "An Act Providing for the

Expropriation of the Property Known as the Tambunting Estate Registered Under TCT Nos.

119059, 122450, 122459, 122452 And Lot Nos. 1-A, 1-C, 1-D, 1-E, 1-F, 1-G And 1-H Of (LRC)

PSD-230517 (Previously Covered By TCT No. 119058) of the Register of Deeds of Manila and for

The Sale at Cost of the Lots Therein to the Bona Fide Occupants and Other Squatters Families and

to Upgrade the Same, and Authorizing the Appropriation of Funds For The Purpose" (underscoring

supplied), and of properties belonging to Patricia Tiongson, et al. pursuant to P.D. No. 1670, "An

Act Providing For The Expropriation of the Property Along the Estero De Sunog-Apog Formerly

Consisting of Lots Nos. 55-A, 55-B And 55-C, Block 2918 of the Subdivision Plan Psd-11746,

Covered by TCT Nos. 49286, 49287 and 49288, Respectively, of the Register of Deeds of Manila

and for The Sale at Cost of the Lots Therein to the Bona Fide Occupants and Other Squatter

Families and to Upgrade The Same, and Authorizing The Appropriation of Funds For The Purpose"

(underscoring supplied).

In G.R. Nos. L-55166, "Elisa R. Manotok, et al.v. National Housing Authority et al.," and 55167,

"Patricia Tiongson et al. v. National Housing Authority, et al.," this Court, by Decision of May 21,

1987,1held that "Presidential Decree Numbers 1669 and 1670, which respectively proclaimed the

Tambunting Estate and

the Estero de Sunog-Apoy area expropriated, are declared unconstitutional and, therefore, null and

void," they being violative of the therein petitioners right to due process of law. The decision hadbecome final and executory.

Subsequently or on September 14, 1987, NHA filed before the Regional Trial Court of Manila a

complaint against petitioners, docketed as Civil Case No. 87-42018, which was later amended, for

expropriation of parcels of land part of those involved in G.R. No. L-55166.

By Order of April 29, 1997,2 Branch 41 of the Manila RTC3 to which the complaint for

expropriation was raffled brushed aside a previous order dated June 15, 1988 of the then Presiding

Judge of said branch of the RTC4and held that the determination of just compensation of the

properties should be reckoned from the date of filing of NHAs petition or on September 14, 1987.

The NHA moved to reconsider the said April 29, 1997 Order of the trial court, contending that thedetermination of the just compensation should be reckoned from the time it took possession of the

properties in 1978. The trial court, by Order of August 5, 1997,5 denied NHAs motion for
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reconsideration.

The NHA assailed the above-stated trial courts Orders of April 29, 1997 and August 5, 1997 via

petition for certiorari before the Court of Appeals. The appellate court, by the challenged Decision

of June 16, 1999,6reversed and set aside the trial courts orders and held that the just compensation

should be "based on the actual taking of the property in 1978." Thus it disposed:

WHEREFORE, the lower courts Order dated April 29, 1997 ruling that the amount of just

compensation should be based on the date of the filing of the complaint in 1987, as well as the

Order dated August 5, 1997 denying the motion for reconsideration are hereby set aside and the

appointed commissioners are ordered to re-convene and submit to the court a recommendation on

the amount of just compensation of subject property based on the actual taking of the property in

1978. (Underscoring supplied)

Petitioners moved for a reconsideration of the appellate courts decision but the same was denied by

Resolution of October 7, 1999,7 hence, the present petition for review on certiorari.

In its Petition for Expropriation filed before the RTC on September 14, 1987, the NHA alleged,

inter alia, that:

x x x x

9. Pursuant to Presidential Decree No. 1669 providing for the expropriation of the subject properties

and granting the plaintiff the authority to immediately take possession, control and disposition, with

power of demolition of the subject properties, plaintiff took and had been in possession of the

subject properties, until Presidential Decree No. 1669 was declared unconstitutional by the Supreme

Court in the case entitled Patricia Tiongson, et al. vs. National Housing Authority and Republic of

the Philippines, G.R. No. 5516[6].8(Emphasis and underscoring supplied) x x x,

and prayed as follows:

WHEREFORE, it is respectfully prayed of this Honorable Court that:

1. An order be issued provisionally fixing the value of said properties in the amount equal to the

assessed value of the same and authorizing the plaintiff to enter or take possession and/or placing

the plaintiff in possession of the parcels of land described above; (Emphasis and underscoring

supplied)

x x x x

In the present petition, petitioners argue that since P.D. No. 1669 pursuant to which NHA took

possession of their properties in 1978 was declared unconstitutional, "[n]ecessarily, in thereafter

resurrecting the filing of another (sic) complaint for expropriation of the same properties," it would

be unlawful . . . to fix the reckoning period for purposes of computing the just compensation . . .

based on [NHAs] previous unlawful taking of said properties in 1978." They thus maintain that the

trial courts Order of April 29, 1997 holding that the determination of the just compensation of their

properties should be reckoned from the date NHA filed the petition before the RTC on September

14, 1987 is in order.

The petition is impressed with merit.
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In declaring, in its challenged Decision, that the determination of just compensation should be

reckoned from NHAs taking of the properties in 1978, the appellate court simply relied on Annex

"C" of NHAs petition before it, the Order dated June 15, 1988 of the then Presiding Judge of the

trial court reading:

In this condemnation proceedings, by agreement of the parties, the total value of the properties to becondemned is hereby fixed at P14,264,465.00, provisionally, and considering the admission of the

parties that plaintiff has taken possession of the properties in question sometime in 1978, or long

before the complaint in this case was filed, plaintiff is hereby authorized to retain possession thereof

upon its depositing with the City Treasurer of Manila the aforesaid sum of P14,264,465.00 subject

to the Orders of this Court and forthwith submit the Official Receipt of the said deposit to this

Court,9 (Emphasis and underscoring supplied),

and thus concluded that "the parties admitted that [NHA] took possession of the subject properties

as early as 1978." The appellate court reached that conclusion, despite its recital of the antecedents

of the case including herein petitioners sustained moves, even before the trial court, in maintaining

that the reckoning of just compensation should be from the date of filing of the petition forexpropriation on September 14, 1987.

The earlier-quoted allegations of the body and prayer in NHAs Petition for Expropriation filed

before the RTC constitute judicial admissions10of NHA that it possessed the subject properties

until this Courts declaration, in its above-stated Decision in G.R. No. L-55166 promulgated on

May 21, 1987, that P.D. No. 1669 pursuant to which NHA took possession of the properties of

petitioners in 1978 was unconstitutional and, therefore, null and void. These admissions, the

appellate court either unwittingly failed to consider or escaped its notice.

Petitioners even brought to the appellate courts attention, in their Motion for Reconsideration11of

its Decision of June 16, 1999, the fact that they had called the trial courts attention to NHAs

allegation-admissions in the body and prayer of its petition. But the appellate court, by Resolution

of October 7, 1999,12denied petitioners motion upon the ground that it raised substantially the

same issues that were already considered and passed upon in arriving at its decision. The appellate

courts June 16, 1999 decision glaringly shows, however, that the matter of judicial admissions of

NHA in the body and prayer in its petition were not considered by it.

Following then Rule 67, Section 4 of the Rules of Court reading:

SEC. 4. Order of expropriation. If the objections to and the defenses against the right of the

plaintiff to expropriate the property are overruled, or when no party appears to defend as requiredby this Rule, the court may issue an order of expropriation declaring that the plaintiff has a lawful

right to take the property sought to be expropriated, for the public use or purpose described in the

complaint, upon the payment of just compensation to be determined as of the date of the taking of

the property or the filing of the complaint, whichever came first.

x x x x (Emphasis and underscoring supplied),

vis a vis the factual backdrop of the case, the just compensation of petitioners properties must be

determined "as of the date of . . . the filing of [NHAs] complaint" on September 14, 1987."

WHEREFORE, the challenged June 16, 1999 Decision of the Court of Appeals is REVERSED andSET ASIDE and the April 29, 1997 Order of Branch 41 of the Regional Trial Court of Manila in

Civil Case No. 87-42018 is REINSTATED.
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SO ORDERED.

xxxiG.R. No. 166553 July 30, 2009

REPUBLIC OF THE PHILIPPINES represented by the NATIONAL POWERCORPORATION, Petitioner,

vs.

SPOUSES RUPERTO LIBUNAO and SONIA P. SANOPO & HEIRS OF BENITA

DOMINGO, Respondents.

D E C I S I O N

DEL CASTILLO, J.:

Assailed in this petition for review on certiorari filed by the petitioner National Power Corporation

is the Decision1 dated April 30, 2004 and the Resolution2 dated January 3, 2005 of the Court ofAppeals (CA) in CA-G.R. CV No. 70582 entitled, "National Power Corporation v. Spouses Ruperto

Libunao and Sonia P. Sanopo and Heirs of Benita Domingo.

The antecedents, as summarized by the Regional Trial Court (RTC) and adopted by the CA, are as

follows:

This is an action for Eminent Domain filed by the plaintiff National Power Corporation, a

government-owned and controlled corporation, created and existing by virtue of Rep. Act No. 6395,

as amended, against the defendants spouses Ruperto Libunao and Sonia P. Sanopo, and the

defendants heirs of Benita Domingo, namely: spouses Antonio Apacible & Clarita Sioson and

spouses Eligio Garcia & Salud Sioson, represented by Clarita S. Apacible.

The plaintiff is seeking to expropriate the following properties:

1. Lot No. 1277-A-3-A covered by Transfer Certificate of Title 52726, under Tax

Declaration No. 05203-00456, located at Sumacab Norte, Cabanatuan City, with an area of

1,212 square meters registered in the name of Sonia P. Sanopo, married to Ruperto Libunao,

issued by the Register of Deeds of Cabanatuan City;

2. A portion of 4,380 square meters of Lot No. 1236 covered by Transfer Certificate of Title

No. 889 issued by the Register of Deeds of Cabanatuan City, with a total area of 113,745square meters in the name of Heirs of Benita Domingo, namely: Clarita Sioson, married to

Antonio Apacible, and Salud Sioson, married to Eligio Garcia, covered by Tax Declaration

No. 05201-00207, located at Sumacab Norte, Cabanatuan City;

in order to construct and maintain its Cabanatuan-Talavera 69 KV Transmission Line Project for

public purpose, hence, the need to acquire an easement of right- of- way over the affected portions

of the above-described parcels of land.

The defendants, through their lawyers filed their answers to the plaintiff's complaint.

Upon motion of the plaintiff, a writ of possession was issued by the court and on January 7 and 8,1998, the plaintiff was placed in possession of the properties in question.
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Upon motion of Atty. Marianito Bote, Reynaldo Joson, Pablo Mamaclay and Clodualdo Adao were

allowed to intervene by the Court.

This Court, upon motion of the parties and pursuant to Sec. 5, Rule 67 of the Rules of Court created

a Commission or Committee composed of a Chairman and two members. The City Assessor of

Cabanatuan, Lorenza Esguerra, was appointed as Chairwoman and the members are Oligario B.Enrile for the defendants and Atty. Manuel Bugayon and Atty. Henry Alog for the plaintiff. The

Chairman and the members took their oaths of office.

A City Appraisal Committee was likewise formed composed of City Assessor Lorenza Esguerra as

Chairwoman and City Treasurer Bernardo C. Pineda and City Engineer Mac Arthur S. Yap, all of

Cabanatuan City as members.

The aforesaid City Appraisal Committee of Cabanatuan issued Resolution No. 07-[S]-2000 dated

March 22, 2000 whereby it resolved that Lot No. 1277-A-3-A with an area of 1,212 square meters

registered in the name of defendant Sonia Sanopo, married to Ruperto Libunao has a current and

fair market value which may be appraised at P2,200 per square meter.

Likewise, said Appraisal Committee issued Resolution No. 08-[S]-2000 dated March 22, 2000

whereby it resolved that a portion of 4,480 square meters of Lot 1236 registered in the name of the

Heirs of Benita Domingo has a current and fair market value which may be appraised at P1,200 per

square meter.

Atty. Henry P. Alog, appointed Commissioner of the National Power Corporation submitted his

Commissioner's Report dated June 7, 2000 and made the following recommendations:

1. For plaintiff NPC to pay defendants for those areas affected that is classified and is

actually devoted for agricultural purposes, an easement fee equivalent to 10% of the market

value of the agricultural lots based on the area covered by the right-of-way clearance;

2. For plaintiff NPC to acquire and pay defendant Libunao the full market value of his

property (174.00 sq. m.) that is classified as residential lot.

The plaintiff NPC paid all the defendants and intervenors the damages to improvements existing on

their lands such as palay crops, fruit, trees, etc.

On August 29, 1997, the City Appraisal Committee of Cabanatuan composed of City Assessor

Engr. Norberto P. Cajucom, as Chairman and City Treasurer Bernardo C. Pineda and City EngineerMac Arthur S. Yapas, members, issued Resolution No. 03-[S]-97 recommending that the current

and fair market value of the lots in question be appraised at P700.00 per square meter for residential

lot and P460.00 per square meter for agricultural lot. Hence, the said committee recommended the

total amount of P122,919.61 as payment for the 1,212.00 square meters of the land owned by the

defendant Sonia P. Sanopo, married to Ruperto Libunao and the total amount of P204,480.00 as

payment for the 4,380 square meters of land owned by the defendants heirs of Benita Domingo.3

On January 5, 2001, the RTC, taking into consideration the Commissioners' Reports, issued its

Decision,4 the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered:
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1. Upholding the right of the plaintiff to expropriate the properties of the defendants which

are particularly described below for public use or purpose as stated in the complaint;

2. Ordering the plaintiff National Power Corporation to pay the defendants spouses Ruperto

Libunao and Sonia P. Sanopo the total sum of P1,818,000.00 at the rate of P1,500.00 per

square meter of Lot 1277-A-3-A covered by Transfer Certificate of Title No. T-52726issued by the Register of Deeds of Cabanatuan City in the name of Sonia P. Sanopo, married

to Ruperto Libunao, located at Sumacab Norte, Cabanatuan City with an area of 1,212

square meters covered by Tax Declaration No. 05203-00456;

3. Ordering the plaintiff to pay the defendants heirs of Benita Domingo the total sum of

P2,628,000.00 at the rate of P600.00 per square meter of a portion of 4,380 square meters of

Lot 1236 covered by Transfer Certificate of Title No. T-889 issued by the Register of Deeds

of Cabanatuan City in the names of the heirs of Benita Domingo, namely: spouses Antonio

Apacible and Clarita Sioson, and Spouses Eligio Garcia and Salud Sioson, located in

Sumacab Norte, Cabanatuan City, covered by Tax Declaration No. 05201-00207;

4. Ordering the plaintiff to pay the said defendants the legal rate of interest of the said

amounts of compensation fixed by this Court from the taking of the possession of the

properties in question by the plaintiff on January 7 and 8, 1998, until fully paid;

5. Ordering the plaintiff to pay the costs of this suit;

6. Ordering a certified copy of this judgment or decision to be recorded in the Office of the

Register of Deeds of Cabanatuan City upon its finality.

SO ORDERED.5

In so ruling, the RTC considered the 3 recommendations/resolutions of different dates submitted to

it by the City Appraisal Committee (CAC) of Cabanatuan City for the purpose of ascertaining the

just compensation for the subject properties to wit: Resolution No. 03-S-97 dated August 29, 1997,

and Resolution Nos. 07-S-2000 and 08-S-2000 both dated March 22, 2000, and the Report

submitted by Commissioner Henry P. Alog for petitioner. It ruled that the amount of just

compensation should be based on the value of the property as of the date of its taking or the filing

of the complaint, whichever came first; that petitioner's complaint was filed on October 30, 1997

and petitioner's taking of the properties was made on January 7 and 8, 1998, thus, the just

compensation for the expropriated property should be reckoned from October 30, 1997.

The RTC did not give its approval to CAC's recommended appraised value of P2,200 per sq. meter

for respondents Spouses Libunao's property and P1,200 per sq. meter for the property of

respondents Heirs of Domingo, because the appraisals were determined in 2000 and not on October

30, 1997 when the complaint was filed. The RTC then fixed the value of the properties of

respondents Spouses Libunao at P1,500 per sq. meter and of respondents Heirs of Domingo at

P600.00 per sq. meter.

Dissatisfied, petitioner and respondents Heirs of Domingo separately appealed the RTC Decision to

the CA.

On April 30, 2004, the CA issued its assailed Decision, the dispositive portion of which reads:
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WHEREFORE, the appealed Decision dated January 5, 2001 is MODIFIED. The amount of just

compensation to be paid to the Sps. Libunao and to the Heirs of Domingo for NPC's taking of their

properties with an area of 1,212 square meters and 4,380 square meters described in TCT No.

52776 and T-889, respectively, is hereby fixed at P700.00 per square meter for residential land and

P460.00 per square meter for agricultural land. The costs of suit awarded in favor of the Sps.

Libunao and the Heirs of Benita Domingo are deleted.6

Anent petitioner's appeal assailing the amounts fixed by the RTC as the fair market value for the

subject properties, the CA found that CAC Resolution No. 03-S-97 dated August 29, 1997,

recommending the rates of P700.00 per sq. meter for residential lot and P460.00 per sq. meter for

agricultural lot was the most reliable proof of valuation; that, as between the valuation based on the

prevailing market value on March 22, 2000, or almost three years after the filing of the complaint,

and another based on the appraisal made on August 29, 1997, or two months prior to the filing of

the complaint, the latter was considered as the just and equitable basis for compensation being the

closest assessment of the market value of the properties to the time the expropriation complaint was

filed.

The CA found no reversible error committed by the RTC in ordering the acquisition of the entire

1,212 sq. meters of land owned by respondents Spouses Libunao, since in the document entitled

DATA OF LOT EXPROPRIATED, which was attached to Commissioner Alog's Report, it was

admitted that the total land area affected was 1,212 sq. meters for respondents Spouses Libunao and

4,380 sq. meters for respondents Heirs of Domingo.

The CA upheld the RTC's award of legal interest on the amount of compensation since a judgment

in expropriation proceedings must provide for the payment of legal interest as a matter of law from

the time the government took over the land until it paid the owners thereof, thus, the government is

liable to pay 6% if no immediate payment was made for the value of the property at the time of

actual taking. It found that the amount which petitioner allegedly deposited in a bank merely

represented the provisional value of the properties sought to be expropriated to enable it to take

possession of the land; that the amount withdrawn by the property owners corresponded to the

consequential loss or damage to improvements suffered by the owners due to the installation of the

transmission lines. The RTC's award of the cost of the suit was deleted since petitioner's charter

exempts it from the obligation to pay the costs of the proceedings.

The CA found no merit on the appeal of respondents Heirs of Domingo and ruled that the valuation

embodied in Resolution No. 03-S-97 dated August 29, 1997 be also made applicable to them.

Petitioner moved for a partial reconsideration of the Decision, which the CA denied in itsResolution7 dated January 3, 2005.

Hence, herein petition assigning the following errors committed by the CA:

THE COURT OF APPEALS SERIOUSLY ERRED IN PRONOUNCING THAT THE

EXPROPRIATION SHOULD COVER THE ENTIRE AREA OF RESPONDENTS'

PROPERTIES, ALTHOUGH ONLY A RIGHT-OF-WAY EASEMENT THEREON WAS

ACTUALLY TAKEN AND BEING USED BY PETIT

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