**Facts:**
In 1940, the Department of Public Works and Highways (DPWH) took possession of a parcel of land owned by the Spouses Heracleo and Ramona Tecson for the construction of the MacArthur Highway. This was done without any expropriation proceedings. Years later, on December 15, 1994, the Tecsons demanded fair compensation for their land. The DPWH, through District Engineer Celestino R. Contreras, offered P0.70 per square meter, based on a 1950 Provincial Appraisal Committee resolution.
Unsatisfied, the Tecsons sought either the return of their property or compensation based on the current market value. They initiated a complaint for recovery of possession with damages. They won favorable decisions both in the Regional Trial Court (RTC) and the Court of Appeals (CA), which pegged the land value at P1,500.00 per square meter, with a 6% interest per annum.
Upon the DPWH’s appeal, the Supreme Court, in its July 1, 2013 Decision, partially granted the petition, modifying the CA’s decision. It set the compensation based on the 1940 land value at P0.70 per square meter, but with interest commencing from 1940 until full payment. Displeased with the Supreme Court decision, the Tecsons filed a Motion for Reconsideration, imploring the Court to reassess the compensation deemed just.
The contrasting opinions within the Third Division of the Supreme Court on the motion prompted the referral of the issue to the En Banc. Citing significant historical and procedural nuances, the Supreme Court reviewed its July 1, 2013 Decision.
**Issues:**
1. Whether the valuation for just compensation should be based on the land value at the time of taking in 1940 or at a later time considering the prolonged period before compensation.
2. Whether the awarded amount of P0.70 per square meter from 1940, with a 6% per annum interest, constitutes just compensation.
3. Whether the DPWH’s lack of formal expropriation proceedings and delayed compensation constitutes a violation of the Tecsons’ rights, warranting reconsideration of the compensation amount.
**Court’s Decision:**
The Supreme Court, after reviewing the various legal and equitable considerations, decided to maintain its conclusions on the amount of just compensation with modifications concerning the interest awarded and granted additional compensation in the form of exemplary damages and attorney’s fees. The Court reiterated that compensation should be based on the property’s value at the time of taking in 1940, emphasizing legal precedents supporting this principle. Moreover, it recognized the DPWH’s overreach in taking the property without proper expropriation proceedings as a basis for awarding exemplary damages and attorney’s fees.
**Doctrine:**
This case reiterates the doctrine that just compensation for expropriated property is to be based on the value at the time of taking. Additionally, it underscores the principle that the lack of timely expropriation proceedings and compensation can lead to additional damages beyond the property’s market value to address the property owner’s loss of beneficial use.
**Class Notes:**
1. In cases of expropriation, *just compensation* is determined based on the property’s fair market value at the time of taking.
2. The Supreme Court may grant exemplary damages and attorney’s fees in cases where property is taken without proper expropriation proceedings and just compensation.
3. Legal Interest is applicable from the time of taking until full payment to compensate for the loss of property use.
4. When legal and equitable considerations appear divergent, the Supreme Court’s decision can reflect a nuanced approach to ensure fairness both to the property owner and the public interest.
**Historical Background:**
This case illustrates the evolving interpretation of “just compensation” in the context of eminent domain in the Philippines. It exemplifies the Supreme Court’s balancing act between strict legal interpretations and equitable considerations, especially in cases involving protracted delays in compensation for expropriated property. The decision also reflects the judicial system’s adaptability in addressing complex issues of fairness and legal precedence in the modern context of property rights and state infrastructure development.
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