G.R. No. L-4918. May 14, 1954

In January 1947, in the Court of First Instance of Rizal, the
Republic started this proceeding under Commonwealth Act No. 539 for the
purpose of expropriating an extensive tract of land—over 87
hectares—for resale to the tenants thereof. Situated within the Maysilo
Estate, Caloocan, and originally covered by Transfer Certificate of
Title No. 35486 the property is now represented by seven Transfer
Certificates of Title, numbered and owned respectively: 1373 by Jose
Leon Gonzalez; 1368 by Juan F. Gonzalez; 1369 by Maria C.
Gonzalez-Hilario; 1372 by Concepcion A. Gonzalez-Virata; 1370 by
Consuelo Gonzalez-Precilla; 1371 by Francisco Felipe Gonzalez; and 1374
by Jose Leon Gonzalez et al.

Eight kilometers north of Plaza Santa Cruz, 1.7 kilometers east of
Rizal Avenue, and 2 kilometers above Highway 54, the estate is bounded
by the Araneta Institute property, the Victoneta Inc., the Balintawak
Estate Subdivision, the Seventh Day Adventists’ land, and the Piedad
Estate. It lies within the sites of the University of the Philippines
and the Capitol and within the field of expansion of the City of Manila.

All the defendants at first opposed the compulsory sale; but
subsequently they waived the objection, recognizing the social-justice
aims of the Government, (there were about two hundred tenants) and
agreed to the designation of commissioners to determine the reasonable
market value of the property to be taken. Wherefore, in June 1948, the
court appointed the following commissioners: Atty. Erasmo R. Cruz,
recommended by defendants, Assistant Fiscal Sugeco, suggested by
plaintiff, and Deputy Clerk Benito Macrohon, selected by the judge.

In the performance of their duties, the Commissioners received oral
and documentary evidence, inspected the premises, and thereafter
submitted one majority report, plus one minority report by Commissioner
Sugeco. The first divided the property into two parts: one portion
previously occupied by the U. S. Army with roads, playground, water and
sewerage system, and valued at 5 pesos per square meter; and another
consisting of rolling lands and rice fields priced at fifteen centavos
per square meter. The report thereby fixed PI .75 per square meter as
the average compensation for the entire estate. On the other hand
Sugeco’s minority opinion rated the whole parcel at ten centavos per
square meter only.

The two reports provoked objections from both sides, whose
oppositions were seasonably filed in writing. On May 6, 1949, obeying
orders of the trial judge, Clerk of Court Severo Abellera repaired to
the premises, made inquiries, and reported afterwards that the realty
was fairly worth P1.90 per square meter.

Then on March 29, 1950, the Honorable Gavino Abaya, Judge, rendered
his decision appraising the estate at P1.50 per square meter. It should
be explained, in this connection, that all defendants agreed the entire
property should be evaluated as a whole, for the purpose of
facilitating the award.

The parties petitioned for reconsideration. Denial thereof motivated this appeal both by the plaintiff and by the defendants.

The plaintiff, in a series of assignments reaches the conclusion,
and submits the proposition, that “there is no reliable standard for
determining the reasonable worth of the defendants’ land except the tax
declaration Exhibit B which puts its value at P28,850. * * *. Taking
into account, however, that the assessed value is usually lower by 1/3
of 1/2 of the real market value, the defendants should be given an
additional 30 per cent of P28,850 or P8,655.”

Such position is clearly untenable. The declaration was made in
1927; and this Court can take judicial notice of the upward trend of
values, particularly of lands in or near Manila. As a matter of fact,
the revised assessment in 1948 valued the entire property at P366,150.
i.e., 0.42 per square meter—which is more than ten times the 1927
assessment. And in its motion for reconsideration submitted to the
lower court, plaintiff invoked, as “index of value” of the land, the
sale made to Francisco R. Aguinaldo, one month before the
expropriation, at one npeso per square meter—thus giving the lot in
question a total value of P871,982.

Another piece of evidence, indicative of prices in the vicinity, is
Exhibit M showing the Seventh Day Adventists purchased in 1927, at the
rate of P0.25 per square meter, a big lot adjoining the land to be
expropriated. After twenty years the prices should be much higher. Yet
the Government insists in compensating herein defendants at the rate of
P0.04 per square meter. Obviously unmeritorious contention.

Now as to defendants’ appeal. Although they took the view—in the
court below—that the land’s value could be reasonably fixed at P1.75
per square meter^[1] the defendants here maintain they should
be compensated at the rate of P2.50 per square meter. They quote with
approval His Honor’s summary of their own evidence as follows:

“On November 28, 1945, Lorenzo Buenaventura bought
and paid at P2 per square meter a lot which is almost adjoining the
lands in question—it being separated only by a street called Sta.
Quitoria (Exhibit “2”); that on July 29, 1949, the Balintawak Estate
Inc., sold to Narciso T. Reyes a parcel of land at the rate of P2.84
per square meter (Exhibit “3-K”); that on December 29,1946, Concepcion
Andrea Gonzalez sold to Francisco R. Aguinaldo a portion of the
property in question at Pl per square meter (Exhibit “3-L”); that on
November 13, 1947, Jose M. Rato sold to the Araneta Institute of
Agriculture 373,377 (3,730) square meters at the rate of P1 and P1.60
per square meter (Exhibit “3-N”); that on May 14, 1948, Ambrosio Pablo
and Sons sold to Cromwell Cosmetic Export Company 20,764 square meters
at the rate of P2.50 per square meter (Exhibit “3-0”); that on November
14, 1947, the Manila Golf Club sold to the Ayala & Company 367,817
square meters at the rate of P1.08 per square meter (Exhibit “3-P”);
that on April 26, 1948, Ayala & Company sold to J. M. Tuason &
Company the property described in Exhibit “3-P” at the rate of P2.50
per square meter; Julian Encarnacion, secretary of the Balintawak
Estate Inc., subdivision, which adjoins the property in question,
declared that the lots of said subdivision are sold from P6 to P12 per
square meter in cash and from P9 to P15 per square meter by
installment.”

And they rely principally on the prices in Exhibits 3-K, 3-O and 3-Q
because they “were sufficiently near in point of time with the date of
condemnation proceedings” to reflect true land values in the locality.

However such Exhibits cannot be taken as conclusive valuation. In
Exhibit 3-K, the parcel was purchased from the Balintawak Estate Inc. a
real estate subdivision corporation. Prices in realty subdivisions are
necessarily higher, because of improvements therein, such as roads,
bridges, curbs, etc. The sale in Exhibit 3-O, though exhibiting a
higher valuation, cannot be literally followed because it refers to a
much smaller lot on the provincial highway. The prices in 3-Q of the
Manila Golf Club, refer to a lot nearer Manila by a kilometer. Hence
defendants-appellants’ demand for P2.50 per square meter may not be
upheld.

Now having found plaintiff’s proposition as unreasonable, and
defendants’ claim for P2.50 as unfounded, we may proceed to examine
whether the trial court’s determination of the market value should be
modified, on the basis of the evidence of record. It is needless to
repeat that the Government, in eminent domain proceedings, must pay
just compensation or the fair market value, that such value represents
the price which the property will bring when offered for sale by one
who desires, but is not obliged, to sell and is bought by one who is
under no imperative necessity of having it^[2] and that in
determining such value, evidence is competent of bona fide sales of
other nearby parcels at times sufficiently near to the proceedings to
exclude general changes of values due to new conditions in the vicinity.^[3]

Parenthetically, in expropriations like this—for the benefit of
other individuals, not directly benefiting the public—it might be
interesting to inquire whether a more liberal interpretation of “just
compensation” should be adopted in favor of the owner who is compelled to
part with his private property for the exclusive benefit of a few.
Consider that unlike other eminent domain proceedings, this does not
directly benefit him as a part of the “public.”

However, this is unnecessary, for the record yields, sufficient elements of decision to make a just and equitable award,

The majority commissioners,^[4] rejecting the plaintiff’s
evidence, took into account the bona fide sales of nearby parcels and,
aided by personal knowledge they gained thru inspection, arrived at the
conclusion that the reasonable market value of the entire property was
P1.75 per square meter. The dissenting commissioner’s report, based
mainly on the 1927 assessment values, proved too conservative to be of
any help.

The Clerk of Court was specifically instructed to make a new
assessment, in view of conflicting reports and the objections of the
parties. This officer after conducting an ocular inspection of the
place and gathering information from people residing in the vicinity
recommended P1.90 per square meter. After hearing the parties, the
trial judge, in his discretion, estimated that under the circumstances,
one peso and fifty centavos per square meter was reasonable
compensation for the hacienda.

We have not been shown wherein the trial judge abused his discretion
in reducing the prices recommended by the court’s referees. Two
purchases-and sale transactions impartial in 1947, about neighboring
realty may shed favorable light upon His Honor’s valuation.

In August 1947 Jose Ma. Rato sold to Victoneta Inc. 581,872 square
meters of adjoining land at P0.85 per square meter (Exhibit 3-M).

In July 1947 Jose Ma. Rato sold to Araneta Institute of Agriculture
four parcels of land totalling 373,377 square meters adjoining the land
sold by Exhibit 3-M at prices ranging from ¥1 to 11.60 per square
meter. No improvements were included in both sales.

These two parcels, being sufficiently large and located within the
vicinity may afford some adequate bases of comparison. It is
unimportant that the sales were consummated several months after these
proceedings had begun, because unlike other eminent domain proceedings
for public use—roads, bridges, canals, markets, etc.—these do not tend
to inflate prices of adjoining properties.

These two sales were made by a Spaniard residing in Madrid, thru a
local agent. He was obviously anxious to liquidate his affairs here, as
shown by the circumstance that in two months he disposed of two sizable
parcels of real estate. Such disposition and such absence must have
given him a natural disadvantage in the bargaining, so that a discount
of 10 or 20 per cent was not improbable.

The topographical features of Rato’s land do not appear. It probably
is agricultural—sold to an agricultural institute. On the other hand,
the defendants’ hacienda is mostly high ground, rolling hills (p. 206
Record on Appeal) which, subdivided into residential lots, would
command higher prices.

Another thing: whereas defendants’ land is served by Reparo Street,
the Victoneta Inc. lot does not enjoy that advantage (Exhibit 3).

But most significant is the admitted fact that one-third of
defendants’ land has permanent improvements, made by the U. S. Army,
consisting of good paved roads, playgrounds, water system, sewerage and
general levelling of the land suitable for residential lots (p. 214
Record on Appeal) together with electric installations and buildings
(p. 206 Record on Appeal).

Considering the above circumstances, in relation to the price of
P2.50 paid for the Manila Golf Club by J. M. Tuason & Co., we do
not feel justified to declare that the price of P1.50 is excessive.
Neither is it too tow. Two defendants, at least, admitted it was just
and reasonable. (p. 274 Record on Appeal).

Wherefore, on the question of just compensation, the trial judge’s assessment has to be approved.

Yet there is one point on which defendants’ appeal should be heeded.
The Government deposited P28,850 and entered the premises by virtue of
a court order, under Act No. 2826. The Rural Program Administration
took possession on or about January 25, 1947. Defendants lost the
control and use of their property as of that date. Their counsel now
claim legal interest on the amount of compensation; and the plaintiff
agrees, as it has to. In Philippines Railway vs. Solon, 13
Phil., 34 we held that in condemnation proceedings “the owner of the
land is entitled to interest, on the amount awarded, from the time the
plaintiff takes possession of the property.”

Another assignment of error of the defendants is that the lower
court failed to make the plaintiff pay the costs. The plaintiff
appellee acknowledges this, in view of section 13 Rule 69. The last
part of the section is not applicable, because the plaintiff appealed
and lost.

Wherefore the decision of the court a quo will be affirmed
as to the value to be paid by the plaintiff for the expropriated land.
It is” of course understood that the money already deposited and taken
by defendants should be discounted. Said decision, however, will be
modified by awarding interest to the defendants at six per cent from
January 25, 1947 until the date of payment. Costs will be chargeable to
the plaintiff. So ordered.

Paras, C. J., Pablo, Montemayor, Reyes, Jugo, Bautista Angelo, Labrador, and Concepcion, JJ., concur.

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^[1] They said: “Wherefore, the herein defendants
respectfully pray that the decision in question be reconsidered and
amended by fixing the value for the purpose of compensation at an
amount ranging from P1.75 to P2.50 per square meter * * *.” Such
language means the property could be bought at P1.75 per square meter.
Some of defendants asserted P2 was just payment.

^[2] Manila Railroad Co. vs. Alar, 36 Phil., 500; Manila Railroad Co. vs. Caligrihan, 40 Phil., 326.

^[3] Manila Railroad Co. vs. Velasquez, 32 Phil., 286.

^[4] One of them appointed by the court, and therefore presumably