G.R. No. L-35861. October 18, 1979
MUNICIPALITY OF DAET, PETITIONER, VS. COURT OF APPEALS AND LI SENG GIAP & CO., INC., RESPONDENTS.
GUERRERO, J.:
The judgment of the respondent Court of Appeals, subject of the instant
petition to review on certiorari, “fixing the fair market value of
the property sought to be expropriated at P200.00 per square meter or for a
total of FIVE HUNDRED FORTY THREE THOUSAND FOUR HUNDRED (P543,400.00) PESOS,
and the value of the improvement thereon at THIRTY SIX THOUSAND FIVE HUNDRED
(P36,500.00) PESOS, Philippine Currency, both amounts to bear legal interest
from and after the date of the actual taking of possession by the Municipality
of Daet, Camarines Norte
until the full amount is paid, with costs against plaintiff-appellant,”
must be affirmed in the light of the unusual, unique and abnormal circumstances
obtaining in this case where the complaint for condemnation was filed on August
9, 1962 or seventeen (17) years ago but up to the present, the petitioner
Municipality of Daet has failed to make the deposit
required to take possession of the property sought to be expropriated.
The Municipality of Daet instituted
condemnation proceedings against private respondent Li Seng
Giap & Co., Inc. on August 9, 1962 before the
Court of First Instance of Camarines Norte for the
purpose of acquiring and subsequently converting the following described
property owned by private respondent as a public park:
“A parcel of land (Lot No. 3 Plans PSU-57331 situated in the Poblacion, Municipality of Daet,
bounded on the North-East by a provincial road known as Vinzons
Avenue; on the South-East, by Felipe II Street; on the South, by Ildefonso Moreno Street, and on the West, by J. Lukban Street, covering an area of TWO THOUSAND SEVEN
HUNDRED AND SEVENTEEN (2,717 sq. meters) SQUARE METERS, more or less and
assessed at P54,370.00 under Tax Declaration No. 11683 and covered by TRANSFER
CERTIFICATE OF TITLE NO. 207 in the name of Li Seng Giap & Co.”[1]
On August 20, 1962,
private respondent, having been served with summons through counsel, filed a
“Motion to Dismiss” on the following grounds:
“1. The proposed expropriation has not been duly authorized as
provided by law, principally because it has not been approved by the Office of
the President as required by Section 2245 of the Revised Administrative Code;
2. There is no genuine necessity for the proposed expropriation of
the defendant’s property;
3. The proposed park could be put up in a different site which
would entail less expense to the plaintiff;
4. The present expropriation proceeding instituted by the herein
plaintiff against the defendant is discriminatory;
5. The plaintiff does not have sufficient funds to push through its
project of constructing a park and to allow the plaintiff to expropriate
defendant’s property this time would be only to needlessly deprive the latter
of the use of its property.”[2]
On February 8, 1963, the trial court rendered a decision
dismissing the expropriation proceedings mainly on the grounds that there is no
“genuine need” for the petitioner to convert the aforestated
lot into a park nor necessity to widen the streets and that even if there is
genuine necessity for the proposed expropriation, still the petitioner cannot,
in this case, exercise the power of eminent domain as it has no funds to pay
the reasonable value of the land and the building thereon.[3]
On February 12, 1963,
petitioner filed a motion for reconsideration which was denied on February 27, 1963. Petitioner then appealed to the Court of
Appeals, which appeal was docketed as CA-G.R. No. 32-259-R. On April
14, 1968, the Court of Appeals rendered a decision reÂversing the
trial court’s decision, the dispositive portion of
which is as follows:
“WHEREFORE, the appealed ‘decision’ (order) in Civil Case No.
1436 for expropriation is hereby reversed and set aside, and, in lieu thereof,
another one is hereby rendered denying defendant Li Seng
Giap & Company’s motion to dismiss; declaring
that plaintiff Municipality of Daet has a lawful
right to take the property sought to be condemned, for the public use described
in the complaint, upon payment of just compensation to be determined as of the
date of the filing of the complaint; directing the court a quo to
promptly fix the provisional value of the property sought to be conÂdemned for
the purpose of the motion of plaintiff Municipality of Daet
to take immediate possession of said property under Sec. 2 of Rule 67 (formerly
Sec. 3 of Rule 69) of the Rules of Court; and remanding the case to the court a
quo for further proceedings consistent with this decision, the costs in
this appeal to be taxed against plaintiff Municipality of Daet
in accordance with Sec. 12 of Rule 67 (formerly Sec. 13 of Rule 69) of the
Rules of Court; x x x“[4]
On March 20, 1969,
after the records of the case were remanded to the trial court, private
respondent filed a “Motion for Appointment of Commissioners to Fix Just
Compensation for the Property Sought to be Taken.”
On April 15, 1969, the trial court issued twin orders: (1) fixing the provisional value of the land
at P120.00 per square meter and the value of the improvement at P30,000.00
totaling P356,040.00 and require the Municipality to deposit with the
Provincial Treasurer in cash or in security which should be payable on demand
and upon deposit being effected, the Clerk of Court was ordered to issue the
necessary writ to place the Municipality in possession of the property; and (2)
appointing Atty. Ernesto de Jesus, Provincial Assessor, as chairman; Atty. Jose
V. Jamito, PNB Branch Attorney and Dr. Mateo Aquino, a resident of the municipality, as members of the
committee on appraisal. The committee
members proceeded to qualify by taking their oaths of office and then held
three sessions on May 10, May 17 and May
24, 1969. On May 28, 1969, the committee filed the
following report:
“COMMISSIONERS’
REPORT
In compliance with the order of this Honorable Court dated April
15, 1969, and pursuant to the provisions of Sec. 6, Rule 67 of the Rules of
Court, the undersigned commissioners, with due notice to the counsels of both
parties, convened in the morning of May 10, 1969, for the purpose of finding
ways and means by which the commissioners could ascertain the fair market value
of the property subject of this proceeding.
There are two basic approaches used in the appraisal of land sought to
be condemned – the sale approach, and the income approach. The commissioners as well as the counsels of
both parties agreed to use the sale approach.
In order to enable the counsels of both parties, as well as the
commissioners, to gather or secure documents regarding transactions of real property
which the commissioners might use as guide in determining the fair market
value, the parties agreed to postpone the hearing to May 17, 1969, at 6:30
in the morning.
Hearing was resumed in the morning of May 17, forthwith, the
counsel for the plaintiff presented documents which were submitted as Exhibits,
to wit:
1.
Exh.
“A” – Deed of absolute sale executed by Lydia Moreno in favor of
Jaime R. Alegre, entered as Doc. No. 160; Page No.
33; Book No. VI; Series of 1962. (The
consideration was about P13.00 per square meter).
2.
Exh.
“B” – Deed of absolute sale executed by Jesus Villafranca
y Aules in favor of Southern Products Import and
Export Corporation, entered as Doc. No. 314; Page No. 64; Book No. II; Series
of 1962. (The consideration was around
P14.00 per square meter).
3.
Exh.
“C” – Deed of absolute sale executed by Julio Curva,
et als. in favor of Felicidad
Vinzons Pajarillo, entered
as Doc. No. 186; Page No. 39; Book No. 1; Series of 1958. (The consideration was P15.00 per square
meter).
4.
Exh.
“D” – Deed of Absolute Sale executed by Clao
Dy Kim To in favor of Concepcion
Fonacier-Abaño, entered as Doc. No. 133; Page No. 88;
Book No. V; Series of 1948. (The
consideration was about P8.57 per square meter).
5.
Exh.
“E” – Deed of sale with mortÂgage executed by Dr. Agustin F. Cuevas
and Leticia Lopez, in favor of the Camarines Norte
Teachers Cooperative Credit Union, Inc., entered as Doc. No. 117; Page No. 56;
Book No. VIII; Series of 1961. (The
consideration was P57,000.00 – the lot with an area of 972 square meters, and a
three-storey concrete building assessed at P16,000.00 under Tax Dec. No.
7083. If we will exclude the value of
the buildÂing, the consideration for the land will be about P43.00 per square
meter).
After the submission
of the aforementioned exhibits, upon motion of the counsel for the defendant,
the hearing was postponed to May 24,
1969, at 8:30 in the
morning. Upon resumption of the hearing
on said hour and date, the counsel for the defendant presented Exh. 1, which is the deed of sale executed by the
Municipality of Daet in favor of the Development Bank
of the Philippines; the document was executed on January 30, 1969; Exh. “1-A”, the consideration in the amount of
P205,600.00; Exh. “1-B”, the area of 2,056
square meters; and Exh. “2”, the letter of
Tomas Cootauco to Li Seng Giap & Co., dated July 21, 1962. In
addition to the aforementioned evidence, the counsel for the defendant
presented as witness Lo Chin who testified that sometime in July, 1962 (after
the fire), he was instructed by his son-in-law, Mr. Jesus Ty
Poco, to see Mr. Jose Ong,
the representative of Mr. William Lee, for the purpose of making an offer to
buy the land subject of this proceeding for a price of P120.00 per square
meter, and P30,000.00 for the structure thereon; that he had talked with Mr.
Jose Ong, for the same purpose, on several occasions
5 or 6 times, the last was sometime in the first week of May, this year wherein
he offered to pay as high as P150.00 per square meter, and P50,000.00 for the
structure thereon; and that Mr. Ty Poco, having been born in Mercedes, and resided here since
birth, was desirous of buying said property because he intends to build a
memorial thereon. Counsel likewise
presented Mr. Jose Ong as witness to corroborate the
testimony of Lo Chin.
After the hearing
held by the commissioners, Atty. Ernesto de Jesus, who is the incumbent
provincial assessor, dig up the records in his office for the purpose of
finding, in addition to the exhibits already presented, other documents
covering transactions of properties located within the areas near the land
sought to be condemned, but failed to locate even a single document. Hence, the commissioners have no other
recourse but to base their appraisal of the value of the land under
consideration from the Exhibits submitted by the parties.
Under Sec. 4, Rule
67, of the Rules of Court, just compensation is to be determined as of the date
of the filing of the complaint. The
above-entitled complaint was filed in August, 1962; hence, Exh.
“1”, Exh. “1-B” and Exh. “1-C” could not be taken into consideration,
the same having been executed in the year 1969 – seven years after the filing
of the complaint. The offer of Mr. Jesus
Ty Poco could not also be
considered because the same was made by one who was under an imperative
necessity of buying the property.
After all the
exhibits submitted by the plaintiff had been examined by the commissioners, and
upon a conscientious and analytical study of the sales of land near the land
subject of this proceeding, and after serious deliberations on the matter, the
commissioners agreed that, in the year 1962, the reasonable or fair market
value of the land subject of this proÂceeding should be P60.00 per square
meter; and the structure remaining thereon at P15,000.00.
Attached hereto is
the map of the commercial center of Daet wherein the
land subject of this case is shown. The
lands described in the Exhibits submitted by the plaintiff are also indicated
thereon.
Daet, Camarines Norte, May
28, 1969.
Respectfully
submitted,
(Sgd.) Ernesto de Jesus
Commissioner
(Sgd.) Jose V. Jamito
Commissioner
(Sgd.)
Mateo D. Aquino
Commissioner”[5]
Private respondent, having received copy of the commissioners’
report, filed a “Motion to Admit Additional Evidence” which was
opposed by petitioner but the same was granted by the Court provided that the
additional evidence consisted of the expert testiÂmony of a duly licensed
broker. On August 20, 1969, the municipality manifested its
conformity to the comÂmissioners’ report.
Meanwhile, on July 23,
1969, Judge Gabriel V. Valero, the Presiding Judge at Branch I,
issued an order transÂferring this case to Judge Isidoro
Vera of Branch II, who proceeded to take the additional evidence of private
respondent. Said evidence consisted of
the testimony of Engineer Aurelio B. Aquino, who
appraised the land involved herein at P200.00 per square meter and the improveÂment
thereon at P36,500.00 in 1969.
On December 2, 1969,
after submission of evidence for both parties, the trial court rendered a
decision disregarding the valuation made by the commissioners and using the
appraisal of Engineer Aurelio B. Aquino in 1969 as
the basis in determining the value of the land in 1962. The dispositive
portion of said decision is quoted herein as follows:
“WHEREFORE, the Court renders judgment fixing the reasonable
value of the property sought to be expropriated at P117.00 per square meter or
for a total amount of Three Hundred Seventeen Thousand Eight Hundred Eighty
Nine Pesos (P317,889.00), and the value of the improvement at Thirty Six
Thousand Five Hundred Pesos (P36,500.00), this amount to bear interest at the
legal rate from the filing of the complaint until paid with costs against the
plaintiff.
SO ORDERED.”[6]
Both petitioner and private respondent filed their respective
motions for reconsideration, the former praying that the trial court give due
course to the commissioners’ report while the latter insisting that the market
value of the land be fixed at P200.00 per square meter. Upon denial of the said motions, both parties
then appealed to the Court of Appeals.
On October 18, 1972,
respondent Court of Appeals rendered a decision sustaining the valuation of the
property in 1969, declaring the municipality to have a lawful right to
expropriate and modified the judgment of the trial court with respect to the
interest that can be recovered which should be from and after the date of
actual taking.
Petitioner’s motion for reconsideration having been denied, the
instant petition for review on certiorari was filed and the following
assignment of errors raised:
I.
Contrary to law and jurisprudence,
the Court of Appeals erred in the interpretation and application of Section 4,
Rule 67 of the Rules of Court by determining the value of the property in
condemnation proceedings at the time of the rendition of the judgment of the
trial court and not at the date of the filing of the complaint.
II.
Contrary to the principle of res judicata, the Court of
Appeals gravely abused its power in modifying, disregarding and amending its
own decision which has long become final and executory
(in CA-G.R. No. 32259-R).
III.
Without regard to the guidelines
set forth by procedural laws and jurisprudence, the Court of Appeals erred in
giving credence to an appraiser under the employ of the private respondent and
totally disregarded the findings of the commissioners appointed by the Court
and by not declaring that the trial judge of Branch II of the Court of First
Instance of Camarines Note has gravely abused his
discretion in taking cognizance of the condemnation case.
IV.
In any event, by virtue of the
Presidential Decree No. 42 issued on November 9, 1972, private respondent is estopped from claiming a valuation higher than the assessed
value of the property sought to be condemned.[7]
The first assignment of error assails the respondent Court’s
application of Section 4, Rule 67 of the Revised Rules of Court which states
the time when the value of the land should be determined in condemnation
proceedings. The Rule provides thus:
“Sec. 4. Order of
condemnation.? When such a motion is overruled or when any party fails to
defend as required by this rule, the court may enter an order of condemnation
declaring that the plaintiff has a lawful right to take the property sought to
be condemned, for the public use or purpose described in the complaint, upon
payment of just compensation to be determined as of the date of the filing of
the complaint. x x
x“
A look into the origin of this provision reveals that it is a
reproduction of Section 5, Rule 69 of the Rules of Court of July 1, 1940. In turn, the said provision in the Rules of
1940 appears to have been taken from the ruling in Manila Railroad Company
vs. Caligsihan,[8] a
1919 case, where the rule that “the value of the property taken should be
fixed as of the date of the proceedings” was enunciated.
Prior to the promulgation of the Rules of 1940, however, there is
another case that touched on the question of time when valuation of the
property taken should be fixed. This is
the case of Provincial Government of Rizal vs. Caro de Araullo,[9] a
1938 case, where the value of the property therein involved was fixed as of the
date when it was taken in 1927 and not at the time of the filing of the
complaint in 1928. This ruling was
reiterated in Republic vs. Lara,[10]
a 1954 case, where it was held that the value of the lands expropriated must be
reckoned as of the time of the actual possession by the Government in 1946 and
not as of the time of the filing of the complaint in 1949. Such was the ruling notwithstanding the fact
that the Rules of 1940 was alÂready in force and effect. In explaining the ruling, the Court therein
held:
“x x x Ordinarily,
inquiry is limited to actual market values at the time of the institution of
the condemnation proceedings because under normal circumstances, the filing of
the complaint coincides or even precedes the taking of the property by the
plaintiff; and Rule 69 simply fixes this convenient date for the valuation of
property sought to be expropriated.
Where, however, the actual taking or occupation by the plaintiff, with
the consent of the landowner long precedes the filing of the complaint for
expropriation the rule to be followed must still be that enunciated by us in
Provincial Government of Rizal vs. Caro, supra, that ‘that value of the proÂperty
should be fixed as of the date when it was taken and not of the date of the
filing of the proceedings.’ For where property is taken ahead of the filing of
the condemnation proceedings, the value thereof may be enhanced by the public
purpose for which it is taken, the entry of the plaintiff upon the property may
have depreciated its value thereby, or there may have been a natural increase
in the value of the property from the time it is taken to the time the
complaint is filed, due to general economic conditions. The owner of the private property should be
compensated only for what he actually loses, it is not intended that his
compensation shall extend beyond his loss or injury. And what he loses is only the actual value of
his property at the time it is taken.
This is the only way the compensation to be paid can be truly just,
i.e., ‘just’ not only to the individual whose property is taken, ‘but to the
public, which is to pay for it.’ (18 Am. Jur. 873,
874)”
Subsequent cases where the taking preceded the filing of the
expropriation proceedings followed the doctrine in the Caro
case. These cases were: Republic vs. Garcellano,
et al.;[11]
Municipal Government of Sagay vs. Jison,
et al.;[12]
and Alfonso vs. Pasay
City.[13]
However, in the case of Republic vs. Narciso, et al.,[14]
where the expropriation proceeding preceded the taking, it was held that the
value of “the property to be considered are those at the beginning
of the expropriation” and not accordingly at the time of the taking of
said property. For this reason, this
Court fittingly saw the need to clarify the departure of some cases from the
mandate of Section 5, Rule 69 of the Rules of Court of 1940 (now Section 4,
Rule 67 of the Revised Rules of Court) in the case of Republic of the
Philippines vs. Philippine National Bank,[15]
where it was held:
“It is apparent from the foregoing that, when plaintiff takes
possession before the institution of the condemnation proceedings, the
value should be fixed as of the time of the taking of the said possession not
the filing of the complaint, and the latter should be the basis for the
determination of the value, when the taking of the property involved coincides
with or is subsequent to, the commencement of the proceedings. Indeed, otherwise, the provision of Rule 69,
Section 5, directing that compensation “be determined as of the date of
the filing of the complaint,” would never be operative.”
In Capitol Subdivision, Inc. vs. Province of Negros Occidental, 7 SCRA 60, the Court said that
“Since the right of the Province of Negros
Occidental to expropriate the lot in question in the present case is not
contested, the owner of said lot is entitled to recover from said province the
fair and full value of the lot, as of the time when possession thereof was
actually taken by the province, plus consequential damages – including
attorney’s fees – from which the consequential benefits, if any, should be
deducted with interest at the legal rate, on the aggregate sum due to the owner
from and after the date of actual taking.” And in the case of J.M. Tuason & Co., Inc.
vs. Land Tenure Administration, 31 SCRA 413, the Court, speaking thru now Chiep Justice Fernando, reiterated the “well-settled
(rule) that just compensation means the equivalent for the value of the
property at the time of its taking.
Anything beyond that is more and anything short of that is less, than
just compensation. It means a fair and
full equivalent for the loss sustained, which is the measure of the indemnity,
not whatever gain would accrue to the exproÂpriating entity.”
In the case at bar, it is a fact that there has been no taking of
the property prior to the institution of the condemnation proceedings. And it cannot even be said that the filing of
the complaint coincided with the taking of the property by the plaintiff
because the latter did not enter into possession of the property since it
failed or did not comply with the order of the Court requiring the municipality
to make the necessary deposit of the provisional value as fixed by the Court in
its Order of April 15, 1969. Petitioner
did not even move for a reconsideration of said Order. The trial proceeded and after hearing and
submission of evidence for both parties, the trial court rendered on December
2, 1969 its decision “fixing the reasonable value of the property sought
to be expropriated at P117.00 per square meter or for a total amount of Three
Hundred Seventeen Thousand Eight Hundred Eighty Nine Pesos (P317,889.00), and
the value of the improvement at Thirty Six Thousand Five Hundred Pesos
(P36,500.00), said amount x x x
to bear interest at the legal rate from the date of the filing of the complaint
until paid.”
Still questioning the value determined by the trial court,
petitioner appealed to the Court of Appeals and on October 8, 1972, the appellate court in its judgment
fixed the value of the property at P200.00 per square meter and P36,500.00 for
the improvement. Not yet satisfied, the
municipality appealed to the Supreme Court and meantime took no step to take
possession of the land. While petitioner
submitted a Manifestation on September 15, 1977 to this Court invoking
Presidential Decree No. 42 dated November 9, 1972 and manifesting that it had
made a deposit to the Philippine National Bank in the amount of P54,370.00 as
per PNB Certificate No. 9381 dated February 9, 1973, We hold that petitioner
has not made the correct and proper deposit of the provisional value as fixed
by the trial court. It is elementary
that Presidential Decree No. 42 of November 9, 1972 which grants the right to
take or enter upon the possession of the property sought to be expropriated if
he deposits with the Philippine National Bank an amount equivalent to the
assessed value of the property for purposes of taxation has no application to
the case at bar where the Court of Appeals had already fixed the value of the
property at P200.00 per square meter and P36,500.00 for the improvement in its
decision promulgated on October 18, 1972 about three weeks earlier than the
issuance of the Presidential Decree No. 42.
By not complying with the orders of the trial court and the
appellate court, petitioner would benefit by its non-compliance and
dilly-dallying in taking possesÂsion of the property which We will not sanction
or allow to the prejudice of the private respondent landowner who should not be
penalized by the protracted delay of petitioner in taking over the property
over a period of seventeen (17) years during which time private respondent was
deprived of the beneficial use of the land and the improvement thereon. Petitioner upon filing the complaint has the
duty to make the deposit in the amount provisionally ascertained and fixed by
the court (Sec. 2, Rule 67, Rules of Court), which deposit serves the double
purpose of pre-payment of the property if the same is finally expropriated and
of an indemnity for damages if the proceedings are dismissed. (Visayan Refining
Co. vs. Camus, 40 Phil. 550; Republic of the
Philippines vs. Baylosis, L-13582, Sept. 30, 1960)
The records disclose that petitioner filed a Motion for Authority
to Demolish Building of Private Respondent dated June 27, 1974 for reasons therein alleged which private
respondent opposed as not being the proper procedure under the law to abate a
nuisance unless petitioner deposits the amount of P36,500.00 which is the value
of the improvement. The Court reÂsolved
to deny the motion without prejudice to petitioner’s taking the proper
proceedings for the abatement of the alleged nuisance pursuant to the
provisions of the new Civil Code in its Resolution of July 24, 1974.
The records further disclose that in the Petition to Cite the Mayor
of the Municipality of Daet (Herein Petitioner) in
Contempt of Court filed by private respondent on February 14, 1978, this Court
was informed that the petitioner acting thru its Mayor, Engineer Jose P. Timoner, started to demolish on February 6, 1978 the
building of the private respondent, attaching thereto photographs marked
Annexes 1 and 2 showing the building before and during the demolition. Private respondent prayed that the Mayor be
cited for contempt or alternatively, that the petitioner be ordered to deposit
with the PhilipÂpine National Bank the amount of P36,500.00 instead of
P28,830.00 to await the final outcome of this case.
Commenting on the petition to cite the Mayor in contempt of
court, petitioner again relies on Presidential Decree No. 42 alleging that the
assessed value of the property for taxation purposes is only P18,250.00 which
is less than the amount of P28,830.00 it had already deposited with the
Philippine National Bank.
The above antecedent facts and circumstances of this case are
unusual, unique and abnormal such that by reason thereof, We agree with the
judgment of the Court of Appeals fixing the fair market value of the property
sought to be expropriated at P200.00 per sq. meter or for a total of FIVE
HUNDRED FORTY THREE THOUÂSAND FOUR HUNDRED (P543,400.00) PESOS, and the value
of the improvement thereon at THIRTY SIX THOUSAND FIVE HUNDRED (P36,500.00)
PESOS, Philippine Currency, both amounts to bear legal interest from and after
the date of the actual taking of possession by the Municipality of Daet, Camarines Norte until the
full amount is paid, with costs against plaintiff-appellant.
We hold that the decision of the Court of Appeals fixing the
market value of the property to be that obtaining, at least, as of the date of the
rendition of the judgment on December 2, 1969 as prayed by private respondent,
which the Court fixed at P200.00 per square meter is in conformity with
doctrinal rulings herein-above cited that the value should be fixed as of the
time of the taking of the possession of the property because firstly, at the
time judgment was rendered on December 2, 1969, petitioner had not actually
taken possession of the property sought to be expropriated and secondly, We
find the valuation determined by the Court of Appeals to be just, fair and
reasonable.
On the second assignment of error, petitioner faults the
respondent court in modifying, disregarding and amending its own decision in
CA-G.R. No. 32259-R which directed payment of just compensation to be determined
as of the date of the filing of the complaint.
Petitioner claims that this decision has long become final and executory and it would be contrary to the doctrine of res judicata to
modify, disregard and amend said decision.
In order that there may be res judicata, the following requisites must be
present: (a) the former judgment must be
final; (b) it must have been rendered by a court having jurisdiction of the
subject-matter and of the parties; (c) it must be a judgment on the merits; and
(d) there must be, between the first and second actions, identity of parties,
of subject matter, and of cause of action.[16]
When, between the first case where the judgment was rendered, and
the second case where such judgment is invoked, the three identities mentioned
in paragraph (a), above, are present, the judgment on the merits rendered in
the first case constitutes an absolute bar to the subsequent action. It is final as to the claim or demand in the
controversy, including the parties and those in privity
with them, not only as to every matter which was offered and received to
sustain or defeat the claim or demand, but as to any other admissible matter
which might have been offered for that purpose and of all matters that could
have been adjudged in that case.[17]
This is, however, not the situation in the case at bar. The only question drawn in issue before the
Court of Appeals in CA-G.R. No. 32259-R was whether petitioner had the
authority to exercise the right of eminent domain. The question regarding the amount of just compensation
was expressly reserved by the Court of Appeals for the trial court to
determine. Perforce, between the first
case wherein the judgment is rendered, and the second case wherein such
judgment is invoked, there is identity of parties but there is no identity of
causes of action. In such a situation,
the judgment is conclusive in the second case only to those matters actually
and directly controverted and determined, and not as
to matters merely involved therein. To
constitute res judicata,
the right to relief in one suit must rest upon the same question which in
essence and substance was litigated and determined in the first suit.[18]
That phrase in the dispositive portion
of the decision of the Court of Appeals in CA-G.R. No. 32259-R referring to the
time that should be considered in reckoning the just compensation, to wit –
“declaring that plaintiff Municipality of Daet
has the lawful right to stake the property sought to be condemned, for the
public use described in the complaint, upon payment of just compensation to
be determined as of the date of the filing of the complaint” – cannot
likewise constiÂtute the Iaw of the case, which is a
doctrine closely akin to res judicata. The law of the case, as applied to a former
decision of an appellate court, merely expresses the practice of the courts in
refusing to reopen what has been decided.[19]
It differs from res judicata
in that the conclusiveness of the first judgment is not dependent upon its
finality. The first judgment is
generally, if not universally, not final.[20]
It relates entirely to questions of law, and is confined in its operation to
subsequent proceedings in the same case.[21]
While it is conclusive as to all matters within its scope, it cannot be invoked,
except as to questions as have been actually considered and determined in the
first appeal. In the application of this
rule, courts will take cognizance of such points only as affirmatively appears
in the last to have been decided in the former appeal.[22]
Moreover, this case is before the Supreme Court and being the
Court of last resort, it is the final arbiter of all legal questions properly
brought before it and its decision in any given case constitutes the law of
this particular case. Once Our judgment
becomes final, it is binding on all inferior courts, and hence beyond their
power and authority to alter or modify.
(Kabigting vs. Acting Director of Prisons, 6
SCRA 281, 286). Petitioner’s second
assignment of error is, therefore, without merit.
The first part of the third assignment of error hinges on what is
the proper procedure in determining the just compensation in expropriation
proceedings.
Section 5, Rule 67 of the Revised Rules of Court calls for the
appointment of not more than three (3) competent and disinterested persons as
commissioners to ascertain and report to the court the just compensation for
the property sought to be taken. As to
the extent of this function and power of the commissioners, this Court held in
Manila Railroad Company vs. Velasquez[23]
that the commissioners’ power is limited to assessing the value and determining
the amount of damages. There it stops;
they can go no farther. The value and
damages awarded must be a just compensation and no more and no less. But in fixing these amounts, the
commissioners are not to act ad libitum. They are to discharge the trust reposed in
them according to well-established rules and form their judgment upon correct
legal principles. To deny this is to
place them where no one else in this country is placed, above the law and
beyond accountability.
Corollary to this limitation, it has been held that reports
submitted by commissioners of appraisals in condemnation proceedings are not
binding, but merely advisory in character, as far as the court is concerned.[24]
An early case enunciated the rule that a Court of First Instance has the
undoubted right to reject the report of the commissioners as to the value of
the land, if the report is not founded upon legal evidence. The judge has the undoubted right also to
discharge the commission and appoint a new one.
He also has the right to formulate an opinion of his own as to the value
of the land in question, nevertheless, if he formulates such an opinion, he
must base it upon competent evidence.[25]
When the commissioners’ report is not in accordance with the law on the matter,
another case ruled that it cannot serve as the basis of the judicial decision
but must be annulled and set aside, and the case remanded to the court below
for reopening of trial.[26]
Then, in still other cases, it was held that a Court of First Instance or on
appeal, the Supreme Court may substitute its own estimate of value as gathered
from the record submitted to it, in cases where the only error of the
commissioners is that they have applied illegal principles to the evidence
submitted to them; or that they have disregarded a clear preponderance of
evidence; or that they have used an improper rule of assessment in arriving at
the amount of the award; provided always that the evidence be clear and
convincing and the amount allowed by the commissioners is grossly inadequate or
excessive.[27]
That the commissioners’ report is not final and conclusive, but
merely recommendatory is bolstered by the requirement in Section 8, Rule 67 of
the Revised Rules of Court of conducting a hearing thereon. Otherwise stated, said provision requires
that upon the expiration of the period of ten (10) days within which all
interested parties may file their objects to the report, or even before the
expiration of such period if all interested parties have filed their objections
to the report or their statement of agreement therewith, the court must conduct
a hearing on the report.
In view of these basic provisions of the Rules of Court on
eminent domain and various jurisprudence on the function of the commissioners
as limited by the Court, We hold that the respondent Court of Appeals did not
err in giving credence to the appraiser employed by private respondent and in
disregarding the commissioners’ report.
Respondent court found that aside from being a civil engineer,
Aurelio B. Aquino is a licensed real estate broker
and appraiser of long standing, being one of the incorporators of C.M. Hoskins
and Co., Inc., a corporation engaged in real estate brokerage since October,
1938 and of which firm he is presently the Chairman of the board of
directors. With these qualifications,
respondent court committed no error in concluding that he was comÂpetent to
make the appraisal of the fair market value of the parcel of land under
consideration. Although he does not
maintain an office in Daet nor does he appear to have
had any transactions in said locality, he is competent since a commercial
parcel of land retains the same characteristics whether it is located in Manila
or Daet, and the criterion for making an appraisal of
a parcel of land is universally applied, irrespective of the locality where it
is situated. And since the value of a
parcel of land taken by eminent domain is always a matter of opinion, the same
may be proved by opinion evidence of the real estate appraiser.[28]
Hence, We find substantial basis for the court to fix the value of the land at
P200.00 per square meter and the building at P36,500.00 as testified to by the
broker.
Petitioner assails the transfer of the case from Branch I of the
Court of First Instance of Camarines Norte to Branch
II thereof, claiming that the jurisdiction of the respective branches are
delineated by a controlling department circular and thereby concluding that
Branch II has no legal and valid authority to take over said expropriation
case.
We do not agree. Where a
court of first instance is divided into several branches, each of the branches
is not a court distinct and separate from the others. Jurisdiction is vested in the court, not in
the judges, so that when a complaint or information is filed before one branch
or judge, jurisdiction does not attach to said branch or judge alone, to the
exclusion of the others. Trial may be
had or proceedings may continue by and before another branch or judge. It is for this reason that Section 57 of the
Judiciary Act, expressly grants the Minister of Justice, upon recommendation of
the district Judge, the administrative right or power to apportion the cases
among the different branches, both for the convenience of the parties and the
coordination of the work by the different branches, and the judges presiding
each branch. The apportionment does not
involve a grant or limitation or jurisdiction; this continues to be vested in
the court of first instance of the province as a whole, and trial may be had by
any judge or branch of the court.[29]
We do agree, however, that the apportionment of cases must be
respected by the judges in the interest of order and coordination in the
dispatch of cases. But the question of
whether Branch II took cognizance of a case properly belonging to another
branch is negated by the fact, pointed out by respondents, that Administrative
Order No. 472 of the Secretary of Justice dividing the Province of Camarines Norte betÂween Branch I and Branch II took effect
on January 1, 1971 long after Branch II had disposed of the case at bar because
said case was decided on December 2, 1969.
The fourth assignment of error is clearly untenable. Presidential Decree No. 42 issued on November 9, 1972 does not limit the
just compensation in expropriation proceedings to the assessed value of the
value sought to be condemned. By its
title alone, i.e., “Authorizing the Plaintiff in Eminent Domain
Proceedings to Take Possession of the Property Involved Upon Depositing the
Assessed Value for Purposes of Taxation,” it can already be gleaned that
said decree fixes only the provisional value of the property. As a provisional value, “it does not
necessarily represent the true and correct value of the land. The value is only ‘provisional’ or
‘tentative’ to serve as the basis for the immediate occupancy of the property
being expropriated by the condemnor.”[30]
This decree repealed Section 2, Rule 67 of the Revised Rules of
Court which imposed upon the court having jurisdiction of the proceeding with
the duty of ascertaining and fixing the provisional value of the property. As stated in the said decree itself, the
repeal was necessary inasmuch as the “existing procedure for the exercise of
the right of eminent domain is not expeditious enough to enable the plaintiff
to take possession of the real property involved as soon as possible, when
needed for public purposes.”
Even in Presidential Decree No. 76, “Requiring All Persons,
Natural or Juridical, Owning or Administering Real Property, Including the
Improvements Thereon, to File Sworn Statement of the True Value of Such
Property,” issued on December 6,
1972, it is clearly stated that the just compensation is based on
the current and fair market value and not on the assessed value. The pertinent provisions state as follows:
“For purposes of just compensation in cases of private
property acquired by the government for public use, the basis shall be the
current and fair market value as declared by the owner or administrator or such
market value as determined by the assessor, whichever is lower.
“Under this Decree, the assessed valuation which shall be the
basis for payment of real property tax beginning the calendar year 1974 shall
be fifty per centum of the current fair market value, as determined by the
assessor, in case of commercial, industrial or mineral lands; forty per centum
in the case of agricultural lands and thirty per centum in the case of lands
for purely residential purposes.”
Clearly, therefore, the assessed value of
a property constitutes only a percentage of its current fair market value. It cannot, thus, be the direct basis of just
compensation in expropriation proceedings.
But more importantly, this assignment of error is bereft of merit
because Presidential Decree No. 42 is inapplicable in the case at bar. As pointed out by private respondent, it is a
cardinal rule of statutory construction that laws shall have only prospective
effect. The provisional value of the
property in this case having already been fixed, the deposit on February 9,
1973 of the amount of P54,370.00 representing the assessed value of the land
and the deposit on October 21, 1977 of the amount of P25,830.00 representing
the assessed value of the improvement, both pursuant to the said decree, are
not sufficient. Nevertheless, said
amounts should be deducted from the total amount due to private respondent.
To elucidate and clarify the judgment of this Court in affirming
the decision appealed from, We consider and hold that the demolition of the
building of private respondent standing on the land by the Municipal Mayor, Engr. Jose P. Timoner on February
14, 1978 constituted the actual taking of possession of the property sought to
be expropriated by the Municipality of Daet.
And from said date, February
14, 1978, interest at the legal rate shall be paid by the
municipality until the full amount is paid.
IN VIEW OF ALL THE FOREGOING, the judgment under review is
hereby AFFIRMED in toto.
SO ORDERED.
Makasiar, Fernandez, De Castro, and Melencio-Herrera,
JJ., concur.
Teehankee, Acting Chief Justice,
(Chairman), no part.
[1]
Record on Appeal, pp. 2-3.
[2] Ibid.,
pp. 5-6.
[3] Ibid.,
p. 50.
[4] Ibid.,
pp. 79-80.
[5] Ibid.,
pp. 80-85.
[6] Ibid.,
pp. 103-104.
[7]
Brief for Petitioner, pp. 1-3.
[8]
40 Phil. 326.
[9]
58 Phil. 308.
[10]
96 Phil. 170.
[11]
103 Phil. 231.
[12]
104 Phil. 1026.
[13]
106 Phil. 1017.
[14]
L-6594, May 18, 1956.
[15]
1 SCRA 957.
[16] Alejandrino vs. Cardona, 70 Phil. 281; Vda. de Nator vs. Court of
Industrial Relations, 4 SCRA 727; Suzara vs. Caluag, 4 SCRA 1060; Philippine Farming Corporation, Ltd. vs.
Llanos, 14 SCRA 949; Malvar vs. Palligayan, 18 SCRA 121; Suarez vs. Municipality of Naujan, 18 SCRA 682.
[17]
Sec. 49 (c), Rule 39, Revised Rules of Court; Aguila vs.
J.M. Tuason & Co., 22 SCRA 690; Gonzales vs.
Gonzales, 26 SCRA 72.
[18]
In re Aktiebolaget Kreuger & Toll,
D.C. N.Y., 20 F. Supp. 964, 968.
[19]
See Great Western Tel. Co. vs. Burham (1895),
162 U.S., 339,
343; Robert vs. Cooper (1857), 20 How. 467, 481; Messinger
vs. Anderson (1912) 225 U.S.
436.
[20]
Steinman vs. Clinchfield Coal Corp., 121 VA.
611, 620, 93 SE 684.
[21]
30 Am. Jur. 913-914.
[22] Alerding vs. Allison, 170 Ind.,
252, 258, 83 NE, 1006, 17 Am. Jur. SR, 363, (aff. CA) 32 NE, 934.
[23]
32 Phil. 286, 314.
[24]
City of Cebu
vs. Ledesma, 14 SCRA 666.
[25]
Manila Railroad Company vs. Fabie, 17 SCRA
206.
[26] Province
of Tayabas
vs. Perez, 56 Phil. 257.
[27]
Manila Railroad Company vs. Velasquez, 32 Phil. 286; see also City of
Manila vs. Neal, 33 Phil. 291; Manila Railroad Co vs. Aguilar, 36
Phil. 118; Manila Railroad Co. vs. Alano, 36
Phil. 500.
[28]
18 Am. Jur. 999.
[29] Lumpay, et al. vs. Hon. Moscoso,
105 Phil. 968; Bacalso vs. Ramolete,
21 SCRA 519.
[30]
Republic vs. Vda. de Castelvi,
58 SCRA 336.