Notes On Just Compensation
Notes On Just Compensation
Notes On Just Compensation
The full and fair equivalent of the property taken; it is thefair market value of the
property. It is settled that the market value of the property is that sum of money which a
person, desirous but not compelled to buy, and an owner, willing but not compelled to
sell, would agree on as a price to be given and received therefor.
Note:
* Formula is only used for partial expropriation
* Fair Market Value to use for expropriation is when the time whatever comes first or
earlier, when the time of taking or the time the complaint for expropriation was filed,
because the owner may already suffered damages or the government may not benefit if
it is paid latter, when the value of money already appreciated.
Issues:
1. WON a resolution duly approved by the municipal council has the same force and
effect of an ordinance and will not deprive an expropriation case of a valid cause of
action.
2. WON the principle of res judicata as a ground for dismissal of case is
not applicable when public interest is primarily involved.
Ratio:
1. Petitioner contends that a resolution approved by the municipal council for the
purpose of initiating an expropriation case substantially complies with
the requirements of the law because the terms ordinance and resolution are
synonymous for the purpose of bestowing authority [on] the local government unit
through its chief executive to initiate the expropriation proceedings in court in the
exercise of the power of eminent domain.
To strengthen this point, the petitioner cited Article 36, Rule VI of the Rules and
Regulations Implementing the Local Government Code, which provides: If the LGU
fails to acquire a private property for public use, purpose, or welfare through purchase,
the LGU may expropriate said property through a resolution of the Sanggunian
authorizing its chief executive to initiate expropriation proceedings.
Court-No. The power of eminent domain is lodged in the legislative branch of
government, which may delegate the exercise thereof to LGUs, other public entities and
public utilities. An LGU may therefore exercise the power to expropriate private property
only when authorized by Congress and subject to the latters control and restraints,
imposed through the law conferring the power or in other legislations.
Sec 19, RA 7160
A local government unit may, through its chief executive and acting pursuant to an
ordinance, exercise the power of eminent domain for public use, or purpose, or welfare
for the benefit of the poor and the landless, upon payment of just compensation,
pursuant to the provisions of the Constitution and pertinent laws.
Thus, the following essential requisites must concur before an LGU can exercise the
power of eminent domain:
1. An ordinance is enacted by the local legislative council authorizing the local chief
executive, in behalf of the LGU, to exercise the power of eminent domain or pursue
expropriation proceedings over a particular private property.
2. The power of eminent domain is exercised for public use, purpose or welfare, or
for the benefit of the poor and the landless.
3. There is payment of just compensation, as required under Section 9, Article III of
the Constitution, and other pertinent laws.
4. A valid and definite offer has been previously made to the owner of the property
sought to be expropriated, but said offer was not accepted.
In the case at bar, the local chief executive sought to exercise the power of eminent
domain pursuant to a resolution of the municipal council. Thus, there was no
compliance with the first requisite that the mayor be authorized through an ordinance.
We are not convinced by petitioners insistence that the terms resolution and
ordinance are synonymous. A municipal ordinance is different from a resolution. An
ordinance is a law, but a resolution is merely a declaration of the sentiment or opinion of
a lawmaking body on a specific matter. An ordinance possesses a general and
permanent character, but a resolution is temporary in nature.
If Congress intended to allow LGUs to exercise eminent domain through a mere
resolution, it would have simply adopted the language of the previous Local
Government Code. But Congress did not. In a clear divergence from the previous
Local Government Code, Section 19 of RA 7160 categorically requires that the local
chief executive act pursuant to an ordinance.
Moreover, the power of eminent domain necessarily involves a derogation of a
fundamental or private right of the people.[35] Accordingly, the manifest change in the
legislative language -- from resolution under BP 337 to ordinance under RA 7160 --
demands a strict construction.
When the legislature interferes with that right and, for greater public purposes,
appropriates the land of an individual without his consent, the plain meaning of the law
should not be enlarged by doubtful interpretation.
Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a
resolution to authorize an LGU to exercise eminent domain. It is axiomatic that the
clear letter of the law is controlling and cannot be amended by a
mere administrative rule issued for its implementation.
Strictly speaking, the power of eminent domain delegated to an LGU is in reality not
eminent but inferior domain, since it must conform to the limits imposed by the
delegation, and thus partakes only of a share in eminent domain.
2. As correctly found by the Court of Appeals and the trial court, all the requisites for
the application of res judicata are present in this case. There is a previous final
judgment on the merits in a prior expropriation case involving identical interests, subject
matter and cause of action, which has been rendered by a court having jurisdiction over
it. Be that as it may, the Court holds that the principle of res judicata, which
finds application in generally all cases and proceedings, cannot bar the right of the State
or its agent to expropriate private property.
Eminent Domain can reach every form of property which the State might need for public
use whenever they need it. While the principle of res judicata does not denigrate the
right of the State to exercise eminent domain, it does apply to specific issues decided in
a previous case. In Republic vs De Knecht, the Court ruled that the power of the State
or its agent to exercise eminent domain is not diminished by the mere fact that a prior
final judgment over the property to be expropriated has become the law of the case as
to the parties. The State or its authorized agent may still subsequently exercise its right
to expropriate the same property, once all legal requirements are complied with.
Note:
* A resolution does not have an effect the same as an ordinance.
* The question on necessity is always a judicial question that only the courts can rule in
a matter of evidence.
* A city filed a complaint for expropriation without ordinance only a resolution, so the
RTC dismissed the case. After one month, the city again filed a complaint for
expropriation, with now a valid ordinance on the same property and the same project.
Will the doctrine of res judicata be apply?
- The doctrine of res judicata will not apply, or if it will, it would need to be
qualified. The State or its authorized agent cannot be forever barred from
exercising said right by reason alone of previous non-compliance with any
legal requirement. The State or its authorized agent may still subsequently
exercise its right to expropriate the same property, once all legal requirements
are complied with. To rule otherwise will not only improperly diminish the power
of eminent domain, but also clearly defeat social justice.
Issue:
Whether or not Filstream was deprived of due process on the ground of non-compliance
with priority in expropriation?
Decision:
There is no dispute as to the existence of a final and executory judgment in favor of
petitioner Filstream ordering the ejectment of private respondents from the properties.
The City of Manila has an undeniable right to exercise its power of eminent domain
within its jurisdiction specifically in pursuit of its urban land reform and housing program.
Very clear from the provisions are the limitations with respect to the order of priority in
acquiring private lands and in resorting to expropriation proceedings as a means to
acquire the same. Private lands rank last in the order of priority for purposes of
socialized housing. In the same vein, expropriation proceedings are to be resorted to
only when the other modes of acquisition have been exhausted. Compliance with these
conditions must be deemed mandatory because these are the only safeguards in
securing the right of owners of private property to due process when their property is
expropriated for public use.
RA 7279 Urban Development Housing Act of 1992
Sec. 9. Priorities in the acquisition of Land. Lands for socialized housing shall be
acquired in the following order:
(a) Those owned by the Government or any of its subdivisions, instrumentalities, or
agencies, including government-owned or controlled corporations and their
subsidiaries;
(b) Alienable lands of the public domain;
(c) Unregistered or abandoned and idle lands;
(d) Those within the declared Areas for Priority Development, Zonal Improvement
sites, and Slum Improvement and Resettlement Program sites which have not yet
been acquired;
(e) Bagong Lipunan Improvement of Sites and Services or BLISS sites which have
not yet been acquired; and
(f) Privately-owned lands.
Where on-site development is found more practicable and advantageous to the
beneficiaries, the priorities mentioned in this section shall not apply. The local
government units shall give budgetary priority to on-site development of government
lands.
(Ejectment Case: Can be either Forcible Entry or Unlawful Detainer. Forcible entry is
when the possession is thru the use of force or stealth, Unlawful Detainer when there is
legal possession but became illegal in the end. The only issue on ejectment is
possession. The court will only rule in ownership (probationary) to judge on legal
possession. Parties should go the RTC/MTC for recovery of ownership, for Writ of
Execution)
Eminent Domain is greater than the Final Judgement of in the Ejectment Case, but
Filstream WON because the requisite to follow the special law on Urban Housing was
not followed.
The exercise of the power of eminent domain is clearly superior tothe final and
executory judgment rendered by the court in an ejectment case
Held:
(1) The decision dated 18 September 1991 has long become final and executory. The
decision therein ordered the De la Ramas to pay Guerrero, among others, the legal
interest of the amount of P2,200,000.00 from 2 August 1989 until the deed of absolute
sale is executed in favor of Guerrero. Specifically, the court therein rationalized that (1)
the legal rate of interest for damages, and even for loans where interest was not
stipulated, is 6% per annum (Article 2209, Civil Code); that (2) the rate of 12% per
annum was established by the Monetary Board when, under the power vested in it by
PD 116 to amend Act 2655 (more commonly known as the Anti Usury Law), it amended
Section 1 by increasing the rate of legal interest for loans, renewals and forbearance
thereof, as well as for judgments, from 6% per annum to 12% per annum; and that (3)
inasmuch as the Monetary Board may not repeal or amend the Civil Code, in the face of
the apparent conflict between Article 2209 and Act 2655 as amended, the ruling of the
Monetary Board applies only to banks, financing companies, pawnshops and
intermediaries performing quasi-banking functions, all of which are under the control
and supervision of the Central Bank and of the Monetary Board. Thus, the court held
therein that (1) the interest rate on the P2,200,000.00 paid to the de la Ramas by
Guerrero at the inception of the transactions should be only 6% per annum from 2
August 1989, and as of 2 January 1994 this amounts to the sum of P583,000.00 and
P11,000.00 every month thereafter until the deed of absolute sale over the property
subject matter of this case is executed; that (2) the amounts payable by the de la
Ramas to Guerrero therefore stands at a total of P1,383,000.00. Offsetting this amount
from the balance of P8,800,000.00, Guerrero must still pay to the De la Ramas the sum
of P7,417,000.00; and that (3) since Guerrero has already deposited with the Clerk of
Court of the court the sum of P5,808,100.00 as of 11 January 1994; he should add to
this the sum of Pl,608,900.00. The De la Ramas can no longer question a judgment
which has already become final and executory. Hence, they are already barred from
questioning it in a proceeding before the Supreme Court.
(2) Since the De la Ramas have the ownership of the property, they can exercise all
rights pertaining to an owner, including the right to dispose of his property, subject to the
power of the State ultimately to acquire it through expropriation.
The nature of contract to sell is not the consummation of the sale. Therefore the owners
still has the ownership of the property.
The first is concerned with the determination of the authority of the plaintiff to exercise
the power of eminent domain and the propriety of its exercise in the context of the facts
involved in the suit. It ends with an order, if not dismissal of the action, "of
condemnation declaring that the plaintiff has a lawful right to take the property sought to
be condemned, for the public use or purpose declared in the complaint, upon the
payment of just compensation to be determined as of the date of the filing of the
complaint"xxx.
The second phase of the eminent domain action is concerned with the determination by
the court of "the just compensation for the property sought to be taken." This is done by
the court with the assistance of not more than three (3) commissionersxxx
It is only upon the completion of these two stages that expropriation is said to have
been completed. Moreover, it is only upon payment of just compensation that title over
the property passes to the government. Therefore, until the action for expropriation has
been completed and terminated, ownership over the property being expropriated
remains with the registered owner.
The recognized rule, indeed, is that title to the property expropriated shall pass from the
owner to the expropriator only upon full payment of the just
compensation. Jurisprudence on this settled principle is consistent both here and in
other democratic jurisdictions.
It is true that the contract to sell did not convey to Guerrero the subject parcel of land
described therein. However, it created an obligation on the part of the De la Ramas to
convey the land, subject to the fulfillment of the suspensive conditions therein stated.
The declaration of this contract's validity, which paved the way for the subsequent
execution of the Deed of Absolute Sale on March 8, 1994, following the order of the
Regional Trial Court for its execution, by the Clerk of Court, Branch 113, Pasay City,
effectively conveyed ownership of said parcel of land to Guerrero, buying the entire
property free from all claims of third persons except those of the government. Evidently,
Lot 834 was conveyed in 1994 to Guerrero by virtue of the Deed of Absolute Sale. This
contract was registered in the Register of Deeds and, accordingly, a new transfer
certificate of title was issued to Guerrero. Pursuant thereto, and by virtue of subrogation,
the latter became the rightful owner entitled to receive the just compensation from the
Republic.
The SC noted the fact that the De la Ramas have withdrawn and appropriated for
themselves the amount paid by Guerrero. This amount represented the purchase price
of the entire 4,075 square meters of land, including the expropriated portion, which was
the subject of their agreement. The payment, therefore, to them of the value of the
expropriated portion would unjustly enrich them.
The Republic deposited P9,500 in the PNB then took possession of the lots. Thereafter,
on May 1940, the CFI rendered its Decision ordering the Republic to pay the Denzons
the sum of P4,062.10 as just compensation. The Denzons appealed to the CA but it
was dismissed onMarch11, 1948. An entry of judgment was made on April5, 1948.
In 1950, one of the heirs of the Denzons, filed with the National Airports Corporation a
claim for rentals for the two lots, but it "denied knowledge of the matter. On September
6, 1961, Lt. Cabal rejected the claim but expressed willingness to pay the appraised
value of the lots within a reasonable time.
For failure of the Republic to pay for the lots, on September 20, 1961, the Denzons'
successors-in-interest, Valdehueza and Panerio, filed with the same CFI an action for
recovery of possession with damages against the Republic and AFP officers in
possession of the property.
On November 1961, titles of the said lots were issued in the names of Valdehueza and
Panerio with the annotation "subject to the priority of the National Airports Corporation to
acquire said parcels of land, Lots 932 and 939 upon previous payment of a reasonable
market value".
On July 1962, the CFI promulgated its Decision in favor of Valdehueza and Panerio,
holding that they are the owners and have retained their right as such over lots because
of the Republic's failure to pay the amount of P4,062.10 adjudged in the expropriation
proceedings. However, in view of the annotation on their land titles, they were ordered to
execute a deed of sale in favor of the Republic.
They appealed the CFI's decision to the SC. The latter held that Valdehueza and
Panerio are still the registered owners of Lots 932 and 939, there having been no
payment of just compensation by the Republic. SC still ruled that they are not entitled to
recover possession of the lots but may only demand the payment of their fair market
value.
Meanwhile, in 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente Lim,
herein respondent, as security for their loans. For their failure to pay Lim despite
demand, he had the mortgage foreclosed in 1976. The lot title was issued in his name.
On1992, respondent Lim filed a complaint for quieting of title with the RTC against the
petitioners herein. On 2001, the RTC rendered a decision in favor of Lim, declaring that
he is the absolute and exclusive owner of the lot with all the rights of an absolute owner
including the right of possession. Petitioners elevated the case to the CA. In its Decision
dated September 18, 2003, it sustained the RTC Decision saying:" ...This is contrary to
the rules of fair play because the concept of just compensation embraces not only the
correct determination of the amount to be paid to the owners of the land, but also the
payment for the land within a reasonable time from its taking. Without prompt payment,
compensation cannot be considered "just"..."
Petitioner, through the OSG, filed with the SC a petition for review alleging that they
remain as the owner of Lot 932.
ISSUE:
Whether or not the expropriation made against the property of the respondent was valid
and that the owner of said property is the Republic.
HELD:
No, the expropriation was not valid because there was no payment of just
compensation. Hence, the Republic does not own the property.
One of the basic principles of the democratic system is that where the rights of the
individual are concerned, the end does not justify the means. It is not enough that there
be a valid objective; it is also necessary that the means employed to pursue it be in
keeping with the Constitution. Mere expediency will not excuse constitutional shortcuts.
There is no question that not even the strongest moral conviction or the most urgent
public need, subject only to a few notable exceptions, will excuse the bypassing of an
individual's rights. It is no exaggeration to say that a person invoking a right guaranteed
under Article III of the Constitution is a majority of one even as against the rest of the
nation who would deny him that right.
The right covers the persons life, his liberty and his property under Section 1 of Article
III of the Constitution. With regard to his property, the owner enjoys the added
protection of Section 9, which reaffirms the familiar rule that private property shall not be
taken for public use without just compensation.
Justice is the first virtue of social institutions.[1] When the state wields its power of
eminent domain, there arises a correlative obligation on its part to pay the owner of the
expropriated property a just compensation. If it fails, there is a clear case of injustice
that must be redressed. In the present case, fifty-seven (57) years have lapsed from
the time the Decision in the subject expropriation proceedings became final, but still the
Republic of the Philippines, herein petitioner, has not compensated the owner of the
property. To tolerate such prolonged inaction on its part is to encourage distrust and
resentment among our people the very vices that corrode the ties of civility and tempt
men to act in ways they would otherwise shun.
Note:
* It is only upon the completion of these two stages that expropriation is said to have
been completed. In Republic v. Salem Investment Corporation, the SC ruled that, "the
process is not completed until payment of just compensation." Thus, here, the failure of
the Republic to pay respondent and his predecessors-in-interest for a period of 57 years
rendered the expropriation process incomplete. The Republic argues that respondent is
not entitled to recover possession of lot but only to demand payment of its fair market
value. However, the facts of the present case do not justify its application. SC cannot
but construe the Republics failure to pay just compensation as a deliberate
refusal on its part. Under such circumstance, recovery of possession is in order. In
several jurisdictions the courts held that recovery of possession may be had when
property has been wrongfully taken or is wrongfully retained by one claiming to act
under the power of eminent domain or where a rightful entry is made and the party
condemning refuses to pay the compensation which has been assessed or
agreed upon; or fails or refuses to have the compensation assessed and paid.
* The five (5) year period will be the reckoning point just so it can determine if
there is delay already on part of the government to pay the just compensation
and the owner can now demand for the recovery of the property.
* The general rule is the doctrine that "non-payment of just compensation (in an
expropriation proceedings) does not entitle the private landowners to recover
possession of the expropriated lots", but when there is a delay of 5 years on
payment of just compensation, the owner may now demand for the recovery of
the property.
* In cases where the government failed to pay just compensation within five (5) years
from the finality of the judgment in the expropriation proceedings, the owners
concerned shall have the right to recover possession of their property.
Note:
Can the judge dismiss the case when the Republic held the expropriation proceedings?
The resolution of dismissal is a matter of discretion, because dismissing the case right
away may cause the owner loss if there are damages in the property already.
AMIGABLE VS. CUENCA [43 SCRA 360; G.R. No. L-26400; 29 Feb. 1972]
Fact:
Victoria Amigable is the registered owner of a particular lot. At the back of her Transfer
Certificate of Title (1924), there was no annotation in favor of the government of any
right or interest in the property. Without prior expropriation or negotiated sale, the
government used a portion of the lot for the construction of the Mango and Gorordo
Avenues. On 1958, Amigables counsel wrote the President of the Philippines,
requesting payment of the portion of the said lot. It was disallowed by the Auditor
General in his 9th Endorsement. Petitioner then filed in the court a quo a complaint
against the Republic of the Philippines and Nicolas Cuenca, in his capacity as
Commissioner of Public Highways for the recovery of ownership and possession of the
lot. According to the defendants, the action was premature because it was not filed first
at the Office of the Auditor General. According to them, the right of action for the
recovery of any amount had already prescribed, that the Government had not given its
consent to be sued, and that plaintiff had no cause of action against the defendants.
Issue:
Whether or Not, under the facts of the case, appellant may properly sue the
government.
Held:
In the case of Ministerio v. Court of First Instance of Cebu, it was held that when the
government takes away property from a private landowner for public use without going
through the legal process of expropriation or negotiated sale, the aggrieved party may
properly maintain a suit against the government without violating the doctrine of
governmental immunity from suit without its consent. In the case at bar, since
no annotation in favor of the government appears at the back of the certificate of title
and plaintiff has not executed any deed of conveyance of any portion of the lot to the
government, then she remains the owner of the lot. She could then bring an action to
recover possession of the land anytime, because possession is one of the attributes of
ownership.
The doctrine of immunity from suit cannot serve as an instrument for perpetrating an
injustice to a citizen. However, since such action is not feasible at this time since the lot
has been used for other purposes, the only relief left is for the government to make due
compensationprice or value of the lot at the time of the taking.
Note:
Mr. X asked you, if he can demand for just compensation for the land acquired by the
city for public highway ten (10) years ago?
- Mr. X can still demand for the just compensation because the law is silent with
regard to the prescription period for recovery of just compensation, because just
compensation is a constitutional right, and could perpetrate injustice.
What if the state said that they have not waived their immunity to be sued.