Wednesday, September 14, 2011

Just compensation in expropriation - G.R. No. 188995

G.R. No. 188995
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"x x x.

The issue is simply whether or not just compensation should be based on the value of Lot 1406-B prevailing in 1981 or in 1993.


The petition for review lacks merit.


Just compensation for Lot 1406-B must be

based on value of property prevailing in 1993

What would have been an easy and straightforward implementation of the decision promulgated on January 16, 2001 in G.R. No. 137285 was delayed by the petitioner’s interposition of the issue on the proper reckoning point for computing the just compensation for Lot 1406-B. A reading of the decision in G.R. No. 137285 exposes the interposition as nothing more than an insincere attempt of the petitioner to delay the inevitable performance of its obligation to pay just compensation for Lot 1406-B. Indeed, the Court pronounced there that “the compromise agreement was only about the mode of payment by swapping of lots xxx, only the originally agreed form of compensation that is by [lot[12]] payment, was rescinded.”[13]

That pronouncement became the law of the case, anything to the contrary of which the petitioner could not validly rely upon.The doctrine of the law of the case means that whatever is irrevocably established as the controlling legal rule between the same parties in the same case, whether correct on general principles or not, continues to be the law of the case for as long as the facts on which the legal rule was predicated continue to be the facts of the case before the court.[14] It applies in a situation where an appellate court has made a ruling on a question on appeal and thereafter remands the case to the lower court for further proceedings; the question then settled by the appellate court becomes the law of the case binding the lower court and any subsequent appeal,[15] andquestions necessarily involved and dealt with in a former appeal will be regarded as the law of the case in a subsequent appeal, although the questions are not expressly treated in the opinion of the court, inasmuch as the presumption is that all the facts in the case bearing on the point decided have received due consideration whether all or none of them are mentioned in the opinion.[16]

To reiterate, in G.R. No. 137285, the Court upheld the annulment of the Compromise Agreement and recognized that the agreed upon mode of payment of the just compensation for Lot 1406-B with Lot 434 was cancelled. It is notable that the Court mentioned nothing therein about the invalidation of the amount of just compensation corresponding to the mode of payment, which was the value of Lot 434 at the time, which silence was the Court’s acknowledgment that the parties understood and accepted, by entering into the Compromise Agreement in 1993, that the just compensation for Lot 1406-B was Lot 434 (or the value of Lot 434, which at the time of the swap in 1993 was definitely much higher than Lot 434’s value in 1981).

Accordingly, we completely agree with the RTC’s observation that “when the parties signed the compromise agreement and the same was approved, they had in fact settled between themselves the question of what is just compensation and that both of them had intended that defendant would be compensated on the basis of prevailing values at the time of the agreement.”[17] We further completely agree with the CA’s conclusion that “by agreeing to a land swap in 1993 in the ill-fated compromise agreement, [PEZA] had impliedly agreed to paying just compensation using the market values in 1993.”[18]


P6,200.00/square meter is the correct

just compensation for Lot 1406-B

With the annulment of the Compromise Agreement, the payment of just compensation for Lot 1406-B now has to be made in cash. In that regard, the order of the Court to remand to the RTC for the determination of just compensation was indubitably for the sole objective of ascertaining the equivalent monetary value in 1993 of Lot 1406-B or Lot 434.

In due course, the RTC found that just compensation of Lot 1406-B was P6,200.00/square meter. Such finding, which the CA upheld, took into due consideration the clear and convincing evidence proving the fair valuation of properties similar and adjacent to Lot 1406-B at or near 1993, the time in question, namely:

(a) The deed of sale executed in 1994 by one of the heirs of the late Salud Jimenez to sell Lot 1406-A to MERALCO for P6,395.00/square meter;

(b) A certified true copy of the 1998 zonal valuation of properties along the PEZA Road, Barangay Tejero, Cavite City showing the zonal valuations of residential and commercial properties in the vicinity of Lot 1406-B to beP4,000.00/square meter and P8,000.00/square meter, respectively;

(c) An appraisal report done on Lot 1406-B by an independent appraiser stating that the value of properties in the vicinity of Lot 1406-B went for P7,500.00/square meter in 1997; and

(d) Other documents showing payments of just compensation by PEZA to the owners of other previously expropriated properties adjacent to or near Lot 1406-B.

The uniform findings of fact upon the question of just compensation reached by the CA and the RTC are entitled to the greatest respect. They are conclusive on the Court in the absence of a strong showing by the petitioner that the CA and the RTC erred in appreciating the established facts and in drawing inferences from such facts. We concur with the findings.


Estate of Salud Jimenez entitled to

Interest of 12% per annum

The power of eminent domain is not an unlimited power. Section 9, Article III of the 1987 Constitution sets down the essential limitations upon this inherent right of the State to take private property, namely: (a) that the taking must be for a public purpose; and (b) that just compensation must be paid to the owner. The State must first establish that the exercise of eminent domain is for a public purpose, which, here, is already settled. What remains to be determined is the just compensation. In Apo Fruits Corporation v. Land Bank,[19] the Court has held that compensation cannot be just to the owner in the case of property that is immediately taken unless there is prompt payment, considering that the owner thereby immediately suffers not only the loss of his property but also the loss of its fruits or income. Thus, in addition, the owner is entitled to legal interest from the time of the taking of the property until the actual payment in order to place the owner in a position as good as, but not better than, the position he was in before the taking occurred.[20]

It is undeniable that just compensation was not promptly made to the Estate of Salud Jimenez for the taking of Lot 1406-B by the petitionerThe move to compensate through the swap arrangement under the Compromise Agreement was aborted or amounted to nothing through no fault of the Estate of Salud Jimenez. The petitioner, which should have known about the inefficacy of the swapping of Lot 434 for Lot 1406-B, could even be said to have resorted to the swapping for the purpose of delaying the payment. Thus, it was solely responsible for the delay. In fact, the Estate of Salud Jimenez was compelled to seek the rescission of theCompromise Agreement, a process that prolonged even more the delay in the payment of just compensation. . In view of this, the CA’s fixing of legal interest at only 6% per annum cannot be upheld and must be corrected, for that rate would not ensure that compensation was just in the face of the long delay in payment.

Already in G.R. No. 137285, the Court noted the long delay in payment and was naturally prompted to strongly condemn “the cavalier attitude of government officials who adopt such a despotic and irresponsible stance,” quoting from Cosculluela v. Court of Appeals,[21] that:

[I]t is high time that the petitioner be paid what was due him eleven years ago. It is arbitrary and capricious for a government agency to initiate expropriation proceedings, seize a person’s property, allow a judgment of the court to become final and executory and then refuse to pay on the ground that there are no appropriations for the property earlier taken and profitably used. We condemn in the strongest possible terms the cavalier attitude of government officials who adopt such a despotic and irresponsible stance.[22]

Accordingly, we hereby impose 12% interest per annum on the unpaid gross value of P81,331,600.00 for Lot 1406-B (i.e., 13,118 square meters x P6,200.00/square meter) from August 23, 1993, the date of the approval of the failed Compromise Agreement, until the full amount of the just compensation is paid, as a way of making the compensation just. This accords with a long line of pertinent jurisprudence,[23] whereby the Court has imposed interest at 12% per annum in eminent domain whenever the expropriator has not immediately delivered the just compensation.

x x x."