Republic of
the Philippines
Supreme
Court
Manila
SECOND DIVISION
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CITY OF ILOILO represented by |
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G.R.
No. 168967 |
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HON. JERRY P. TREÑAS, |
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City Mayor, |
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Present: |
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Petitioner, |
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CARPIO,
J., Chairperson, |
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- versus - |
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BRION,
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DEL
CASTILLO, |
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HON. LOLITA CONTRERAS- |
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ABAD,
and |
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BESANA, Presiding Judge, Regional |
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PEREZ,
JJ. |
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Trial
Court, Branch 32, and |
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ELPIDIO
JAVELLANA, |
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Promulgated: |
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Respondents. |
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February
12, 2010 |
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D E C I S I O N
DEL CASTILLO, J.:
It is
arbitrary and capricious for the government to initiate expropriation
proceedings, seize a person’s property, allow the order of expropriation to
become final, but then fail to justly compensate the owner for over 25 years. This is government at its most high-handed and
irresponsible, and should be condemned in the strongest possible terms. For its
failure to properly compensate the landowner, the City of Iloilo is liable for
damages.
This Petition for Certiorari under Rule 65 of the Rules of Court
with a prayer for the issuance of a temporary restraining order seeks to
overturn the three Orders issued by Regional Trial Court (RTC) of Iloilo City,
Branch 32 on the following dates: December 12, 2003 (the First Assailed Order),[1] June 15,
2004 (the Second Assailed Order),[2] and March
9, 2005 (the Third Assailed Order) (the three aforementioned Orders are
collectively referred to as the Assailed Orders).[3]
Factual Antecedents
The essential facts are not in
dispute.
On September 18, 1981, petitioner filed a Complaint[4]
for eminent domain against private respondent Elpidio T. Javellana (Javellana) and
Southern Negros Development Bank, the latter as mortgagee. The complaint sought to expropriate two parcels
of land known as Lot Nos. 3497-CC and 3497-DD registered in Javellana’s name
under Transfer Certificate of Title (TCT) No. T-44894 (the Subject Property) to
be used as a school site for Lapaz High School.[5] Petitioner alleged that the Subject Property
was declared for tax purposes in Tax Declaration No. 40080 to have a value of P60.00
per square meter, or a total value of P43,560.00. The case was docketed as Civil Case No. 14052
and raffled to then Court of First Instance of Iloilo, Branch 7.
On December 9, 1981, Javellana filed his Answer[6] where he
admitted ownership of the Subject Property but denied the petitioner’s avowed public
purpose of the sought-for expropriation, since the City of Iloilo already had
an existing school site for Lapaz High School. Javellana also claimed that the true fair
market value of his property was no less than P220.00 per square meter. [7]
On May 11, 1982, petitioner filed a Motion
for Issuance of Writ of Possession, alleging
that it had deposited the amount of P40,000.00 with the
Philippine National Bank-Iloilo Branch.
Petitioner claimed that it was entitled to the immediate possession of
the Subject Property, citing Section 1 of Presidential Decree No. 1533,[8] after it
had deposited an amount equivalent to 10% of the amount of compensation. Petitioner attached to its motion a
Certification issued by Estefanio C. Libutan, then Officer-in-Charge of the
Iloilo City Treasurer’s Office, stating that said deposit was made.[9]
Javellana filed an Opposition to the Motion for the Issuance
of Writ of Possession[10] citing the same grounds he raised in his
Answer – that the city already had a vast tract of land where its existing
school site was located, and the deposit of a mere 10% of the Subject
Property’s tax valuation was grossly inadequate.
On May 17, 1983, the trial court issued an Order[11] which granted
petitioner’s Motion for Issuance of Writ of Possession and authorized
the petitioner to take immediate possession of the Subject Property. The court ruled:
Premises considered, the Motion for the
Issuance of a Writ of Possession dated May 10, 1982, filed by plaintiff is
hereby granted. Plaintiff is hereby allowed to take immediate possession,
control and disposition of the properties known as Lot Nos. 3497-CC and 3497-DD
x x x.[12]
Thereafter, a Writ of Possession[13] was
issued in petitioner’s favor, and petitioner was able to take physical
possession of the properties sometime in the middle of 1985. At no time has Javellana ever denied that the
Subject Property was actually used as the site of Lapaz National High School. Aside from the filing by the private
respondent of his Amended Answer on April 21, 1984,[14] the
expropriation proceedings remained dormant.
Sixteen years later, on April 17, 2000, Javellana filed an Ex Parte Motion/Manifestation, where he alleged that when he
finally sought to withdraw the P40,000.00 allegedly deposited by the
petitioner, he discovered that no such deposit was ever made. In support of
this contention, private respondent presented a Certification from the
Philippine National Bank stating that no deposit was ever made for the
expropriation of the Subject Property.[15] Private respondent thus demanded his just
compensation as well as interest. Attempts
at an amicable resolution and a negotiated sale were unsuccessful. It bears
emphasis that petitioner could not present any evidence – whether documentary
or testimonial – to prove that any payment was actually made to private
respondent.
Thereafter, on April 2, 2003, private respondent filed a Complaint[16] against petitioner for Recovery of
Possession, Fixing and Recovery of Rental and Damages. The case was docketed as Civil Case No.
03-27571, and raffled to Branch 28 of the Iloilo City Regional Trial Court. Private respondent alleged that since he had
not been compensated for the Subject Property, petitioner’s possession was
illegal, and he was entitled to recovery of possession of his lots. He prayed that petitioner be ordered to vacate
the Subject Property and pay rentals amounting to P15,000.00 per month
together with moral, exemplary, and actual damages, as well as attorney’s fees.
On May 15, 2003, petitioner filed its Answer,[17] arguing
that Javellana could no longer bring an action for recovery since the Subject
Property was already taken for public use. Rather, private respondent could only demand
for the payment of just compensation. Petitioner also maintained that the
legality or illegality of petitioner’s possession of the property should be
determined in the eminent domain case and not in a separate action for recovery
of possession.
Both parties jointly
moved to consolidate the expropriation case (Civil Case No. 14052) and the case
for recovery of possession (Civil Case No. 03-27571),[18] which motion
was granted by the trial court in an Order dated August 26, 2003.[19] On November 14, 2003, a commission was created
to determine the just compensation due to Javellana.[20]
On November 20, 2003, private respondent filed a Motion/Manifestation dated November 19, 2003 claiming that before a
commission is created, the trial court should first order the condemnation of
the property, in accordance with the Rules of Court. Javellana likewise insisted that the fair
market value of the Subject Property should be reckoned from the date when the
court orders the condemnation of the property, and not the date of actual taking,
since petitioner’s possession of the property was questionable.[21] Before petitioner could file its Comment, the RTC
issued an Order dated November 21, 2003 denying the Motion.[22]
Undeterred, Javellana filed on November 25, 2003, an Omnibus Motion to Declare Null and Void the
Order of May 17, 1983 and to Require Plaintiff to Deposit 10% or P254,000.00. Javellana claimed that the amount is equivalent
to the 10% of the fair market value of the Subject Property, as determined by
the Iloilo City Appraisal Committee in 2001, at the time when the parties were
trying to negotiate a settlement.[23]
First Assailed Order
On December 12, 2003, the RTC issued the First Assailed Order, which nullified
the Order dated May 17, 1983 (concerning the issuance of a writ of possession
over the Subject Property). The trial court ruled:
x x x the Order dated May 17, 1983 is hereby
declared null and void and the plaintiff [is] hereby ordered to immediately
deposit with the PNB the 10% of the just compensation after the Commission shall have rendered its report and have
determined the value of the property not at the time it was condemned but at
the time the complaint was filed in court.[24]
(Emphasis ours)
Second Assailed Order
Neither party sought reconsideration of this Order.[25] Nonetheless, about six months later, the RTC
issued the Second Assailed Order, which it denominated as an “Amended Order”. The Second Assailed Order was identical to the
first, except that the reckoning point for just compensation was now the “time
this order was issued,” which is June 15, 2004.
x x x the Order dated May 17, 1983 is hereby
declared null and void and the plaintiff [is] hereby ordered to immediately
deposit with the PNB the 10% of the just compensation after the Commission
shall have rendered its report and have determined the value of the property
not at the time it was condemned but at the time this order was issued.
(Underscoring in original text)
This time, petitioner filed a Motion for Reconsideration claiming
that there was no legal basis for the issuance of the Second Assailed Order.[26] Javellana opposed, arguing that since the May
17, 1983 Order and the Second Assailed Order were interlocutory in character,
they were always subject to modification and revision by the court anytime.[27]
Third Assailed Order
After the parties were able to fully ventilate their respective
positions,[28]
the public respondent issued the Third Assailed Order, denying the Motion for
Reconsideration, and ruling as follows:
The
Order dated June 15, 2004 among other things stated that parties and counsels
must be bound by the Commissioner’s Report regarding the value of the property not at the time it was condemned but at
the time this order was issued.
This
is true inasmuch as there was no deposit at the PNB and their taking was
illegal.
The
plaintiff thru [sic] Atty. Laurea alleged that this Court had a change of heart
and issued an Amended Order with the same wordings as the order of December 12,
2003 but this time stated not at the time it was condemned but at the time the
order was issued. Naturally, this
Court in the interest of justice, can amend its order because there was no deposit
by plaintiff.
The
jurisprudence cited by plaintiff that the just compensation must be determined as of the date of the filing of
the complaint is true if there was a deposit. Because there was none the filing
was not in accordance with law, hence, must be at the time the order was
issued.
The
allegation of defendant thru [sic] counsel that the orders attacked by
plaintiff thru [sic] counsel saying it has become final and executory are
interlocutory orders subject to the control of the Judge until final judgment
is correct. Furthermore, it is in the interes[t] of justice to correct errors.[29]
In the meantime, on
April 15, 2004, the Commission submitted its Report, providing the following
estimates of value, but without making a proper recommendation:[30]
|
Reckoning Point |
Value per square meter |
Fair Market Value |
Basis |
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1981 - at the time the complaint was filed |
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based on three or more recorded sales of
similar types of land in the vicinity in the same year |
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1981 – at the time the complaint was filed |
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Appraisal by Southern Negros Development Bank
based on market value, zonal value, appraised value of other banks, recent
selling price of neighboring lots |
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2002 |
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Appraisal by the City Appraisal Committee,
Office of the City Assessor |
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2004 |
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Private Appraisal Report (Atty. Roberto Cal
Catolico dated April 6, 2004) |
Hence, the present petition.
Petitioner’s Arguments
Petitioner is before us claiming that (1) the trial court gravely abused
its discretion amounting to lack or excess of jurisdiction in overturning the
Order dated May 17, 1983, which was already a final order; and (2) just
compensation for the expropriation should be based on the Subject Property’s
fair market value either at the time of taking or filing of the complaint.
Private Respondent’s Arguments
Private respondent
filed his Comment on October 3, 2005,[31] arguing
that (1) there was no error of jurisdiction correctible by certiorari;
and (2) that the Assailed Orders were interlocutory orders that were subject to
amendment and nullification at the discretion of the court.
Issues
There are only two questions we need answer, and they are not at all
novel. First, does an order of
expropriation become final? Second,
what is the correct reckoning point for the determination of just compensation?
Our Ruling
Expropriation proceedings have two stages. The first phase ends with an order of
dismissal, or a determination that the property is to be acquired for a public
purpose.[32] Either order will be a final order that may be
appealed by the aggrieved party.[33]
The second phase consists of the determination of just compensation. [34]
It ends with an order fixing the amount to be paid to the landowner. Both orders, being final, are appealable.[35]
An
order of condemnation or dismissal is final, resolving the question of whether
or not the plaintiff has properly and legally exercised its power of eminent
domain.[36] Once
the first order becomes final and no appeal thereto is taken, the authority to
expropriate and its public use can no longer be questioned.[37]
Javellana did
not bother to file an appeal from the May 17, 1983 Order which granted
petitioner’s Motion for Issuance of Writ of Possession and which authorized
petitioner to take immediate possession of the Subject Property. Thus, it has become final, and the
petitioner’s right to expropriate the property for a public use is no longer
subject to review. On the first
question, therefore, we rule that the trial court gravely erred in nullifying
the May 17, 1983 Order.
We now turn to the reckoning date for the determination of just
compensation. Petitioner claims that the computation should be made as of September
18, 1981, the date when the expropriation complaint was filed. We agree.
In a long line
of cases, we have constantly affirmed that:
x x x just compensation is to be ascertained as of the time of the
taking, which usually coincides with the commencement of the expropriation
proceedings. Where the institution of the action precedes entry into the
property, the just compensation is to be ascertained as of the time of the
filing of the complaint.[38]
When the taking of the property sought to be expropriated coincides with
the commencement of the expropriation proceedings, or takes place subsequent to
the filing of the complaint for eminent domain, the just compensation should be
determined as of the date of the filing
of the complaint.[39]
Even under Sec. 4, Rule 67 of the 1964
Rules of Procedure, under which the complaint for expropriation was filed, just
compensation is to be determined “as of the date of the filing of the
complaint.” Here, there is no reason to
depart from the general rule that the point of reference for assessing the
value of the Subject Property is the time of the filing of the complaint for
expropriation.[40]
Private
respondent claims that the reckoning date should be in 2004 because of the
“clear injustice to the private respondent who all these years has been
deprived of the beneficial use of his properties.”
We
commiserate with the private respondent. The school was constructed and has
been in operation since 1985. Petitioner
and the residents of Iloilo City have long reaped the benefits of the property.
However, non-payment
of just compensation does not entitle the private landowners to recover
possession of their expropriated lot.[41]
Concededly, Javellana also slept on his rights for over 18 years and did
not bother to check with the PNB if a deposit was actually made by the
petitioner. Evidently, from his inaction in failing to withdraw or even verify
the amounts purportedly deposited, private respondent not only accepted the
valuation made by the petitioner, but also was not interested enough to pursue
the expropriation case until the end. As
such, private respondent may not recover possession of the Subject Property,
but is entitled to just compensation.[42] It is high time that private respondent be
paid what was due him after almost 30 years.
We stress,
however, that the City of Iloilo should be held liable for damages for taking
private respondent’s property without payment of just
compensation. In Manila International Airport Authority v. Rodriguez,[43]
the Court held that a government agency’s prolonged occupation of private
property without the benefit of expropriation proceedings undoubtedly entitled
the landowner to damages:
Such pecuniary loss entitles him to adequate
compensation in the form of actual or compensatory damages, which in
this case should be the legal interest (6%) on the value of the land at the
time of taking, from said point up to full payment by the MIAA.
This is based on the principle that interest “runs as a matter of law and
follows from the right of the landowner to be placed in as good position as
money can accomplish, as of the date of the taking x x x.
x x x x
For more than twenty (20) years,
the MIAA occupied the subject lot without the benefit of expropriation
proceedings and without the MIAA exerting efforts to ascertain ownership of the
lot and negotiating with any of the owners of the property. To our mind, these
are wanton and irresponsible acts which should be suppressed and
corrected. Hence, the award of exemplary damages and attorneys fees is
in order. x x x.[44] (Emphasis supplied)
WHEREFORE, the
petition is GRANTED. The Orders of the Regional Trial Court of Iloilo City, Branch 32 in
Civil Case No. 14052 and Civil Case No. 03-27571 dated December 12, 2003, June 15,
2004, and March 9, 2005 are hereby ANNULLED and SET ASIDE.
The Regional Trial Court of Iloilo City, Branch 32 is DIRECTED to immediately determine the just compensation due to
private respondent Elpidio T. Javellana based on the fair market value of the
Subject Property at the time Civil Case No. 14052 was filed, or on September
18, 1981 with interest at the legal rate of six percent (6%) per annum from the
time of filing until full payment is made.
The City of Iloilo is ORDERED to pay private respondent the
amount of P200,000.00 as exemplary damages.
SO ORDERED.
MARIANO
C. DEL CASTILLO
Associate Justice
WE
CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
|
ARTURO D. BRION Associate Justice |
ROBERTO A. ABAD Associate Justice |
JOSE P. PEREZ
Associate Justice
ATTESTATION
I attest that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
ANTONIO T.
CARPIO
Associate Justice
Chairperson, Second Division
C E R T I F I C A T I O N
Pursuant to Section 13,
Article VIII of the Constitution, and the Division Chairperson’s attestation,
it is hereby certified that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
[1] Rollo,
pp. 44-45.
[2] Id. at 46-47.
[3] Id. at 48-49.
[4] Id. at 50-52.
[5] The
expropriation was authorized by Resolution No. 96 dated April 25, 1978 issued
by the Sangguiniang Panglungsod of Iloilo entitled “Authorizing the City Legal
Officer to initiate the expropriation of Lot No. 180 of Arevalo and Lot Nos. 3497-CC
and 3497-DD at La Paz for School Site Purposes”. Id. at 50-51.
[6]
Id. at
53-56.
[7] Id.
[8] Presidential Decree No. 1533, Establishing A Uniform Basis For Determining
Just Compensation And The Amount Of Deposit For Immediate Possession Of The
Property Involved In Eminent Domain Proceedings (1978).
Section 1. In determining just
compensation for private property acquired through eminent domain proceedings,
the compensation to be paid shall not exceed the value declared by the owner or
administrator or anyone having legal interest in the property or determined by
the assessor, pursuant to the Real Property Tax Code, whichever value is lower,
prior to the recommendation or decision of the appropriate Government office to
acquire the property.
Section 2. Upon the filing of the
petition for expropriation and the deposit in the Philippine National Bank at its
main office or any of its branches of an amount equivalent to ten per cent
(10%) of the amount of compensation provided in Section 1 hereof, the
government or its authorized instrumentality agency or entity shall be entitled
to immediate possession, control and disposition of the real property and the
improvements thereon, including the power of demolition if necessary,
notwithstanding the pendency of the issues before the courts.
[9] Rollo, p. 59
[10] Id. at 60-61.
[11] Id. at 62-64.
[12] Id. at 63-64.
[13] Id. at 65-66. Private respondent filed a
Motion for Reconsideration against the trial court’s Order, id. at 67-68;
petitioner opposed, id. at 69-70. The trial court denied private respondent’s
Motion in an Order dated January 10, 1984, id. at 71.
[14] Id. at 74-77.
[15] Id. at 88.
[16] Id. at 78-87.
[17] Id. at 89-93.
[18] Records, p.
88.
[19] Id. at 89.
[20] Rollo, p. 94
[21] Id. at 95-96.
[22] Id. at 97.
[23] Petitioner
first claimed that it never received a copy of this Motion, however, private
respondent presented its file copy of the Motion, duly received by the City
Legal Office of Iloilo City.
[24] Rollo,
p. 45.
[25] Petitioner
claims that it never received a copy of the Order.
[26] Rollo, pp. 105-114.
Petitioner also claimed that it had not been furnished
with a copy of the First Assailed Order, although this was disproved by the
lower court. Records, p. 48.
[27] Rollo, pp. 115-122.
[28] Petitioner
filed a Rejoinder on August 12, 2004; id at 123-126. Private respondent filed a
Reply dated August 17, 2004; id at 127-129.
[29] Id.
at 48-49.
[30] Records, pp.
124-155.
[31] Id. at 132-145.
[32] Estate of
Salud Jimenez v. Philippines Export Processing Zone,
402 Phil. 271, 284 (2001).
[33] Municipality of Biñan v.
Garcia, G.R.
No. 69260, December 22, 1989, 180 SCRA 576, 584-585.
[34] City of Manila v. Serrano, 411 Phil. 754, 765 (2001).
[35] National Housing Authority v.
Heirs of Guivelondo, 452 Phil. 483, 492 (2003).
[36] Heirs of Alberto Suguitan v.
City of Mandaluyong, 384 Phil. 676, 692 (2000).
[37] Estate of Salud Jimenez v.
Philippine Export Processing Zone, supra note 32 at 288.
[38] B.H. Berkenkotter & Co. v. Court of
Appeals, G.R. No. 89980, December 14, 1992, 216 SCRA 584, 587. See also Rules of Court, Rule 67, Sec. 4:
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 required by 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 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.
[39] Republic of the Philippines v.
Vda. De Castellvi, 157 Phil. 329, 349 (1974).
[40] National Power Corporation v.
Co, G.R. No.
166973, February 10, 2009, 578 SCRA 235, 246.
[41] Forfom Development Corporation v. Philippine National Railways, G.R. No. 124795, December 10,
2008. 573 SCRA 350, 369.
[42] Eusebio v. Luis, G.R. No. 162474, October 13,
2009.
[43] G.R. No. 161836, February 28,
2006, 483 SCRA 619, 630-632.
[44] See also Forfom Development Corporation v. Philippine National Railways, supra.