FIRST
DIVISION
FELICIANO
G. MANANSAN, G.R. No. 140091
Petitioner,
Present:
-
versus - PANGANIBAN, C.J., Chairperson,
YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO, JJ.
REPUBLIC OF THE
PHILIPPINE NATIONAL Promulgated:
BANK,
Respondents.
x - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - x
D E C I S I O N
CALLEJO, SR., J.:
This
is a Petition for Review on Certiorari
of the Decision[1] of the
Court of Appeals (CA) in CA-G.R. CV No. 52063 affirming with modification the decision
of the Regional Trial Court (RTC) of Manila in Civil Case No. 123003, granting
the complaint of the Republic of the Philippines, through the Department of
Education, Culture and Sports (DECS) (now DepEd), for the expropriation of the
property of Agus Development Corporation (ADC, for brevity) and Feliciano G.
Manansan.
On
April 17, 1979, the Republic, in behalf of the DECS, filed a complaint in the
RTC of Manila for the expropriation of two parcels of land with improvements
thereon located at Geronimo Street, Sampaloc, Manila: one consisted of 2,905.6
square meters owned by ADC and covered by Transfer Certificate of Title (TCT)
No. 104374; and the other 584.5 square meters owned by Manansan and covered by
TCT No. 132892. The property was to be used for the construction of the P884,830.00.
Plaintiff amended its complaint to implead
the Philippine National Bank (PNB) in whose favor ADC had mortgaged the property
as well as the occupants of the property. Plaintiff averred that the just
compensation for the property was P904,830.00.
On P90,483.00
representing 10% of the assessed value of the property had already been
deposited with the PNB. Manansan did not object to the motion. On
On
P90,483.00)
on P90,483.00 in
favor of the City Treasurer, and
not in favor of defendants as owners of the property.
Defendants
filed a motion to be restored to the possession of the subject properties. On P904,830.00 and required plaintiff to deposit
the whole amount.
On
On
P15,893,111.00. The valuation was based on the 1995 BIR Zonal Value, broken
down as follows:
Land Appraisal:
Lot 12 Blk. RP 37
Psd 47-Area - 1,122.90 sq. m.
Lot 13 Blk. RP 37
Psd 47-Area - 584.80 sq. m.
T o t a l -
3,490.10 sq. m.
1995 BIR Zonal
Value - P4,400.00 / sq. m.
Land Area - x
3,490.10 sq. m.
P15,356,440.00
Building
Appraisal:
Building 1 - P270,010.00
Building 2 - 144,014.00
Building 3 - 29,445.00
Building 4 - 39,690.00
Building 5 - 19,012.00
Perimeter Wall
Fence -
34,500.00
P536,671.00 -
Market value for
Building &
Fence
Total Market Value
of Land, Building
and Fence -
P15,893,111.00
On
the other hand, the AACI submitted two separate reports on the fair market
values of the subject properties, as of
1) Lots 6, 7, 12 & 13 (owned by Agus) –
2,905.60 sq. m.
P14,000.00 / sq.m. x 2,905.60
sq. m.
= P40,678,000.00
2) Lot 8 (owned by Feliciano Manansan) – 584.50
sq. m.
P14,000.00 / sq.m. x
584.50 sq. m.
= P8,183,000.00 (Emphasis supplied)[3]
The
appraisal of AACI was based on the extent, character and utility of the
property sales and holding prices of similar land, and the highest and best use
of the property as of P3,490.50
per square meter, while AACI fixed the value of the land at P14,000.00
per square meter.
On
P2,200.00 per square meter, or one-half of the
1995 BIR Zonal Value submitted by the City Treasurer and City Assessor. The fallo
of the decision reads:
WHEREFORE, judgment is hereby rendered for the plaintiff and against the defendants, as follows:
a) the lands (described as Lots 6, 7, 12 and 13 of Bk. RP 37) with an area of 2,905.6 sq. m. owned by defendant Agus Development Corporation and covered by TCT No. 104374 as well as the land (described as Lot 8 of Bk. RP 37) with an area of 584.5 sq. m. owned by defendant Feliciano Manansan and covered by TCT No. 132892 with the improvements erected thereon, located at Geronimo St., Sampaloc, Manila and declared expropriated to be used as a public school, the Trinidad Tecson Elementary School;
b) the fair market value of the lands of the
defendants is fixed at P2,200.00/sq. meter;
c) the fair market values of the buildings or
fence erected on the lands of Agus Development Corporation and Feliciano
Manansan are P250,163.00 and P18,172.50, respectively;
d) the Republic must pay the following defendants, to wit:
1) Agus Development Corporation, the sum of P6,642,483.00,
and from which amount, the indebtedness incurred by Agus Development Corporation
from the Phil. National Bank should first be liquidated and satisfied before
the remaining balance thereof shall be delivered/paid to defendant Agus
Development Corporation;
2) Feliciano Manansan, the sum of P1,304,072.50;
With costs against the plaintiff.
SO ORDERED.[6]
The trial court declared that the joint
assessment of the City Treasurer and City Assessor recommended that defendants
be paid P15,893,111.00 as just compensation for the properties. However,
the joint assessment was based on the BIR Zonal Value of the property as of 1995 instead of 1979 when the
complaint was filed. Moreover, instead of directing the commissioners to revise
their valuation reports and base the just compensation of the property on their
market value as of 1979, the court merely
resolved to cut in half the BIR Zonal Value of P4,400.00 to P2,200.00
per square meter, and declare that the fair market value of Manansan’s lot was P1,285,900.00,
or a total of P1,304,072.50 including the value of the improvements
thereon.
The RTC declared that it was not
bound by the report of the commissioners, which was merely advisory in
character. However, no attorney’s fees were
awarded to defendants.[7]
Manansan
and ADC thereafter appealed the decision to the CA. In his brief as appellant, Manansan alleged the
following:
A. THE P7,946,555.55
WHICH IS HALF THE VALUE SET BY THE CITY TREASURER AND ASSESSOR.
B. THE
C. THE
On
the issue of just compensation, Manansan alleged that the amount of P7,946,555.55
was not the fair and full equivalent for the loss sustained by him which is the
measure of the indemnity. He pointed out that there was a blatant admission
that the supposed 1979 valuations were taken or arrived at through the 1995
market values as submitted by the City Treasurer and City Assessor. Thus, he insisted, the halved amount of P7,946,555.55
is not the “fair and full equivalent for the loss sustained which is the
measure of the indemnity.”[9]
Manansan
asserted that the trial court should have adopted the appraisal of AACI which
determined the fair market value of his property at P8,183,000.00. After all, the market data approach was used,
and the court based its valuation on the sales and listings of comparable property
registered within the immediate vicinity. He emphasized that the records of
recent sales and offerings of similar land were analyzed, and comparison made
for such factors as size, characteristics of the property, location, quality
and prospective use. He averred that the valuation of the City Treasurer and City
Assessor, which the lower court considered in arriving at the median sum of P7,946,555.55,
should not have been given the weight it was accorded in the assailed decision,
as it is certainly and evidentially inferior to that of the determination made by
the AACI. Manansan maintained that this fact can be deduced from the rejection
of the mode of determining just compensation based on the valuation of the
assessor, made by no less than the Supreme Court in Export Processing Zone Authority v. Dulay.[10]
On
the issue of attorney’s fees, Manansan averred that conformably with the ruling
of this Court in Capitol Subdivision,
Inc. v. Province of Negros Occidental,[11]
he is entitled to attorney’s fees. Thus, he prayed that the decision of the RTC
be affirmed with modification, to wit:
WHEREFORE, premises considered, it is respectfully prayed of this Honorable Court that the Decision appealed from be modified and plaintiff-appellee ordered to pay defendant-appellant Feliciano Manansan the following:
1. P4,091,500.00
(median of the appraisal of Asian Appraisal Company for lot 8: 584.50 sq. m. x P14,000/sq.
m.);
2. Reasonable attorney’s fees equivalent to 10% of the amount involved;
3. Legal
interest on the sum awarded (P4,091,500.00) as just compensation
computed from 1979 up to the date of finality of judgment;
4. The costs of suit.[12]
On
the other hand, the Republic, through the Office of the Solicitor General,
averred that what should apply is the ruling of this Court in Export Processing Zone Authority v. Dulay.[13]
The valuation report of AACI recommending P40,678,000.00 for Manansan’s land
only is too much to be deemed credible by the trial court. It was stressed that
it took possession of the property only on
On
WHEREFORE, the judgment herein
appealed from is hereby AFFIRMED, with the MODIFICATION that the
plaintiff-appellee is hereby ordered to pay the defendants-appellants legal
interest (6% per annum) on the amounts of P6,642,483.00 and P1,304,072.50
due them, from January 16, 1981 until the said amounts are fully paid.
No pronouncement as to costs.
SO ORDERED.[14]
In
affirming the just compensation fixed by the trial court, the appellate court declared
that the City Treasurer and City Assessor submitted a second report on
September 11, 1995 recommending a value of only P1,065,283.22 for the
land and P536,671.00 for the building plus accumulated legal interest in
the amount of P1,633,993.30, or in the total amount of P3,235,947.52. It ratiocinated that the appraisals of AACI were
also based on estimates of market values as of
In
the instant petition for review on certiorari,
Manansan (now petitioner) raises the following issues:
1. WHETHER OR NOT EVIDENCE NOT FORMALLY OFFERED NOR FORMALLY ADMITTED MAY BE CONSIDERED BY THE COURT OF APPEALS IN DETERMINING THE DATE WHEN JUST COMPENSATION SHOULD BE BASED;
2. WHETHER OR NOT THE JUST COMPENSATION FOR A PROPERTY MAY BE BASED ONLY ON THE TRIAL COURT’S EXERCISE OF MERE HALVING A 1993 BIR ZONAL VALUATION AS THE BASIS OF JUST COMPENSATION AS APPROXIMATE VALUATION IN 1979, DATE OF USURPATION;
3. WHETHER OR NOT ATTORNEY’S FEES IS ALLOWED IN
EXPROPRIATION PROCEEDINGS IN THE LIGHT OF THE CIRCUMSTANCES OF THIS CASE.[17]
On
the first issue, petitioner avers that the public respondent failed to prove
that it deposited 10% of the assessed value of the property on P90,483.00
had been deposited as directed by the RTC. Considering that it was not admitted in
evidence by the trial court, such certification cannot be considered as proof that
the said amount had been deposited by public respondent.
On
the second issue, petitioner insists that the halving of the valuation of the
City Treasurer and City Assessor of P15,893,111.00 made by the trial and
appellate courts is not based on competent evidence; it was merely based on the
trial court’s belief that one-half of the amount or P7,946,555.55
appears adequate to be paid to petitioner and ADC. Petitioner maintains that the
trial court’s formulation of the fair market value of the property must be
based on competent evidence and not on speculations or surmises. To bolster his
claim, petitioner cited the ruling of the Court in Manila Railway Company v. Fabie.[18]
On
the last issue, petitioner posits that he was constrained to engage the
services of counsel for the case, which has been pending for more than
20 years. The granting of his plea for attorney’s fees does not even compensate
his expenses in litigating this case. Petitioner prays that judgment be
rendered in his favor ordering the public respondent to pay him the sum of P2,571,800.00
(584.50 sq.m. x P4,400.00 per square meter based on Bureau of Internal
Revenue Zonal Valuation as of 1995) plus legal interest (at 6% per annum) from
January 16, 1981 until fully paid; reasonable attorney’s fees equivalent to 10%
of the total award; and cost of suit.[19]
By
way of comment, public respondent avers that it had deposited P90,483.00
representing 10% of the just compensation as alleged in the complaint pursuant
to Presidential Decree (P.D.) No. 1533, and that on January 16, 1981, the trial
court issued an order for the issuance of a writ of possession and that a writ
of possession was issued on January 23, 1981.
On the strength of said writ, respondent took possession of the
property, caused the demolition of the improvements on the property, and had a
school building constructed thereon. It insists that under Section 2 of P.D.
No. 1533, it is not required that the deposit be in the name and for the
account of the owners of the property to be expropriated; the certification of
the City Treasurer of Manila is not the only evidence to prove the 10% deposit;
and the order of the trial court for the issuance of a writ of possession
presupposes that the alleged 10% deposit had been complied with.
Public respondent also points out
that petitioner never questioned the 10% deposit it made with the PNB, or
requested the City Treasurer to comply with P.D. No. 1533, or attempted to
withdraw the deposit; it was all along, the ADC which questioned the deposit
for allegedly being defective. Thus, the trial court did not err in basing the
valuation of the property as of 1981, the time public respondent took possession
of the property, and in reducing in half the valuation report submitted by the
City Treasurer and Assessor, considering further that P7,946,555.55 is
the amount nearest to the
original value of P904,830.00. It insists that the amount of P1,334,580.00
arrived at by the trial court and affirmed by the CA is reasonable.
Petitioner
counters that while a writ of possession was issued by the trial court on
January 23, 1981, it cannot thereby be concluded that the required 10% deposit
had been complied with by public respondent. It insists that the alleged PNB
Check No. 330334 representing the supposed 10% deposit had not been offered and
admitted in evidence which is required under Section 2, Rule 67 of the Rules of
Court, which reads:
SEC. 2. Entry
of plaintiff upon depositing value with authorized government depositary. –
Upon the filing of the complaint or at any time thereafter and after due notice
to the defendant, the plaintiff shall have the right to take or enter upon the
possession of the real property involved if he deposits with the authorized
government depositary an amount equivalent to the assessed value of the
property for purposes of taxation to be held by such bank subject to the orders
of the court. Such deposit shall be in
money, unless in lieu thereof the court authorizes the deposit of a certificate
of deposit of a government bank of the Republic of the
If personal property is involved, its value shall be provisionally ascertained and the amount to be deposited shall be promptly fixed by the court.
After such deposit is made, the
court shall order the sheriff or other proper officer to forthwith place the
plaintiff in possession of the property involved and promptly submit a report
thereof to the court with service of copies to the parties.
Petitioner
claims that public respondent’s reliance on the ruling of this Court in B.H. Berkenkotter & Co. v. Court of
Appeals[20] is
misplaced. To sustain public respondent’s
contention that the just compensation may be determined as of the filing of the
complaint for expropriation is to condone the usurpation by the government of
private property by the simple expedient of filing a complaint even if the latter
is not prepared to allocate the requisite funds therefor.
The
petition is partially granted.
On
the first issue, we agree with the submission of public respondent that
petitioner never raised the inadmissibility and lack of probative weight of the
certification of the City Treasurer (on the ground that it was never offered in
evidence) in the trial court; neither was the issue of public respondent’s
failure to offer said certification in evidence to prove that the P90,483.00
was deposited with the PNB raised in the appellate court. The issue was raised for the first time only in
this Court, and the well-entrenched rule is that a party is proscribed from
raising in this Court an issue which was never raised in the trial court.[21]
Moreover,
there is no dispute that public respondent deposited P90,483.00 with the
PNB on December 19, 1979, except that the deposit was in the name of the City
Treasurer and not in the names of petitioner and ADC as owners of the
expropriated property. There was a hearing on public respondent’s motion for the
issuance of a writ of possession during which the matter of the regularity and
validity of the deposit must have been discussed by the parties. The RTC found
the motion in order and granted the same in its Order dated
It must be stressed that petitioner never
assailed the order of the trial court in the CA and in this Court; he never
bothered to file any motion for the remittance of his share of the 10% deposit
in the court a quo, neither did he
file a motion for the reconsideration of the trial court’s January 10, 1981
Order. While ADC sought the repossession
of the property on account of public respondent’s alleged failure to deposit
the just compensation of the property as provisionally fixed by the trial
court, petitioner failed to do so.
On
the second issue, we agree with petitioner’s contention that the trial court
erred in reducing in half the assessment of the City Treasurer and
City Assessor (P15,893,111.00) based on the BIR Zonal Value as of 1995, and consequently fixing the
fair market value of the subject property at P7,946,555.55. There is no evidence on record that the fair
market value of the property, as of 1979 when public respondent filed its
complaint for expropriation in the RTC, was P7,946,555.55. The trial
court merely indulged in speculations and surmises when it declared that the
fair market value of the property in 1979 was P7,946,555.55.
The rule is that the value of the
property must be determined either as of the date of the taking of the property
or the filing of the complaint, whichever comes first.[22] In this case, the complaint was filed on
It bears stressing that just
compensation means a fair and full equivalent for the loss sustained. All the facts as to the condition of the
property and its surroundings, its improvements and capabilities should be
considered.[23]
We
agree with the contention of the Office of the Solicitor General that the trial
court was not bound by the assessment report of the commissioners and that it
had the discretion to reject the same and substitute its own judgment on its value
as gathered from the record. The court
may accept the report/recommendation of the commissioners in toto and base its judgment thereon.[24] However, the decision of the court must be
based on all established rules, upon correct legal principles and competent
evidence. The court is proscribed from
basing its judgment on speculations or surmises.[25] While tax values can serve as guide, the same
cannot be absolute substitutes for just compensation.[26]
Just compensation is the just and complete equivalent of the loss that the owner
of the thing expropriated has to suffer by reason of the expropriation. The court should thus insist that the owner
of private property should be compensated only for what he actually loses; it is
not intended that the compensation shall extend beyond the loss or injury.[27]
Since
the commissioners failed to base their assessment of the property as of 1979
and relied solely on data as of 1995
instead of 1979, it behooved the trial court to direct them to revise their
assessment, or to discharge them and appoint new ones, or to require the
parties to adduce competent evidence to prove the fair market value of the
property as of 1979. The trial court failed
to do so. Worse, the CA condoned the
lapse of the trial court. Considering
all the foregoing, the Court has no other recourse but to remand the case to
the trial court.
On
the last issue, the Court affirms the following ratiocination of the CA:
We cannot say the same about the appellants’ claims for attorney’s fees. There appears to be no basis for the same. Attorney’s fees are not automatically awarded in every action for expropriation. The case of National Power Corp. v. Court of Appeals, supra, relied upon by appellant Agus Development Corporation, does not even award attorney’s fees. It only refers to the case of Amigable v. Cuenca where the Supreme Court held that the government should pay attorney’s fees which should be fixed by the trial court after hearing. But the facts in that case are different from the case at bench. In that case, the government simply occupied the plaintiff-appellant’s property without benefit of expropriation.[28]
IN LIGHT OF ALL THE FOREGOING, the
petition is GRANTED. The Decision of the Court of Appeals in
CA-G.R. CV No. 52063 is AFFIRMED WITH
MODIFICATION. The trial court is ORDERED to RECONSTITUTE the commissioners or designate a panel of new
commissioners who will assess the fair market value of the petitioner’s property
as of 1979, and to render judgment on the just compensation for the property in
due course. No costs.
SO ORDERED.
ROMEO J.
CALLEJO, SR.
Associate Justice
WE CONCUR:
ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson
CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
Associate Justice
MINITA V. CHICO-NAZARIO
Associate
Justice
Pursuant to Section 13, Article VIII of the
Constitution, it is hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
ARTEMIO
V. PANGANIBAN
Chief
Justice
[1] Penned by Associate Justice Hector L.
Hofileńa, with Associate Justices Jorge S. Imperial and Omar U. Amin,
concurring; rollo, pp. 26-35.
[2]
Rollo, p. 28.
[3]
CA rollo, pp. 76-77.
[4] Rollo,
p. 32.
[5] CA rollo,
pp. 73-79.
[6]
[7]
[8]
[9]
[10]
[11] 117 Phil. 59, 71 (1963).
[12] CA rollo, p. 70.
[13] G.R.
No. L-59603,
[14] Rollo, pp. 34-35.
[15]
[16]
[17]
[18] 17 Phil. 206 (1910).
[19] Rollo, p. 21.
[20] G.R.
No. 89980,
[21] National Power Corporation v. Gutierrez,
G.R. No. 60077,
[22] Eslaban, Jr. v. De Onorio, 412 Phil.
667, 678 (2001); Ansaldo v. Tantuico,
G.R. No. 50147, August 3, 1990, 188 SCRA 300; National Power Corporation v. Court of Appeals, 325 Phil. 29, 44
(1996); Berkenkotter & Co. v. Court of Appeals, G.R. No.
89980, December 14, 1992, 216 SCRA 584; Republic
v. Philippine National Bank, 111 Phil. 572, 577 (1961).
[23] Export Processing Zone Authority v. Dulay,
supra note 9, at 314-315.
[24] Republic v. Intermediate Appellate Court,
G.R. No. 71176,
[25] Manila Railway Company v. Fabie, supra
note 17.
[26] Export Processing Zone Authority v. Dulay,
supra note 9, at 315.
[27] Ansaldo v. Tantuico, supra note 21.
[28] Rollo, p. 34.