DALMACIO URTULA, ET AL., PLAINTIFFS-APPELLANTS, VS. REPUBLIC OF THE PHILIPPINES, (REPRESENTED BY THE LAND TENURE ADMINISTRATION), DEFENDANT-APPELLANT.

Direct appeals, by both the plaintiffs Dalmacio
Urtula, et al. and the defendant Republic of the
Philippines, represented by the Land Tenure Administration, now Land Authority,
from a judgment of the Court of First Instance of Camarines
Sur, in its Civil Case No. 5306, ordering the
defendant to pay interest upon a sum determined by final judgment as
compensation for the property expropriated in a previous case of eminent domain
between the same parties, Civil Case No. 3837 of the same court.

The facts, as stipulated by the parties, and as found by the
court a quo are as follows:

The Court of First Instance had rendered judgment on 16 November 1957 in its Civil Case
No. 3837, for the expropriation of the Hacienda Quitang,
owned by Dalmacio Urtula by
the Republic of the Philippines,
for the sum of P213,094.00, “and upon making the payment the plaintiff
shall take full possession of the land.” The Republic appealed the
decision to the Court of Appeals, raising the sole issue of whether the amount
fixed by the trial court was a just compensation for the property.  While the appeal was pending before the Court
of Appeals, the Republic of the Philippines deposited on 29 July 1958, with the
Philippine National Bank the sum of P117,690.00 as provisional value of the land,
in accordance with an order of the trial court dated 3 January 1958, and this
deposit was withdrawn by Dalmacio Urtula
in August of 1958.

Thereafter, on 10
September 1958, the Court of Appeals granted the Republic’s
petition to be placed in possession of the property; and under a writ of
possession issued by the provincial sheriff of the province, the Land Tenure
Administration took actual physical possession of the land on 11 October 1958.

Subsequently, the Court of Appeals found that the issue between
the parties was purely one of law and thereby elevated the appeal to the
Supreme Court.  This Court rendered
judgment thereon on 29 November 1960
in case No. L-16028, affirming the appealed judgment of the Court of First
Instance, without modification.

The Supreme Court had affirmed, as aforesaid, the decision of the
trial court fixing the amount of just compensation for P213,094.00; thus, at
the time the decision became final, the balance still due was P95,404.00.  Of this balance, the Republic paid Dalmacio Urtula the sum of
P5,404.00 on 17 April 1961; but on the same day, Urtula
deposited same amount with the Land Tenure Administration in payment of taxes
and penalties for prior years up to 1958 on the expropriated land and for the
surveyor’s fee for segregating one hectare donated by condemnee
Urtula for a school site.  On liquidation at a later date, an excess in
the amount of P423.38 was found, and the Republic refunded this excess to Urtula on 25
September 1961.  On 3 May 1961, the Republic paid the
remaining balance of P90,000.00.

The taxes due and unpaid, including penalties, on the land for
the years 1959, 1960 and 70% of 1961 were computed at a total of P3,534.23 as
of 28 February 1962.  The interest of 6% on P95,404.00 from 11 October 1958, the date when the condemnor Republic
took possession of the land to May 1961, when the final balance was paid to Urtula was also computed at a total of P14,633.52.

On 26 January 1961,
the plaintiff demanded payment of the said interest (P14,633.52) but the defendant
Republic refused, on the ground
that no payment of interest had been ordered in the decision in Civil Case No.
3837, the expropriation proceedings, or in the affirmatory
decision of the Supreme Court in G. R. No. L-16028.

The parties further stipulated as a fact that the plaintiff had
agreed to pay his counsel 10% of the amount recoverable from the defendant, as
attorney’s fees.

Upon the foregoing stipulated facts, the trial court rendered
judgment for plaintiff Urtula and ordered the defendant
Republic to pay P14,633.52 as
interest on the balance of P95,404.00 from 11 October 1958 to 3
May 1961 and to pay the costs, but denied the plaintiff’s claims on
the land taxes^[1]
and attorney’s fees.

Both parties were not satisfied with the decision; hence, both
appealed to this Court.

Against the defendant Republic’s
defense that the final judgment in the expropriation case, which did not
provide for interest, operates to bar the present case, by res
judicata, the theory of plaintiff Urtula is that there is no identity of causes of action in
the said cases.

Thus, Urtula relates his predicaments
as follows:  that while the expropriation
case was pending before the trial court, he could not claim interest because
the Republic had not as yet taken posses­sion of the land and the rule is that
interest accrues from the time of such taking; but when the Republic took
possession, the case was already on appeal and he could not ask relief because
he was not an appellant nor could he raise the issue of interest for the first
time on appeal, aside from his being impeded by the rule that proof with
respect to the taking of possession had to be adduced before the trial court,
not the appellate court.

Urtula’s dilemma lies in his mistaken
concept of the nature of the interest that he failed to claim in the
expropriation case and which he now claims in this separate case.  Said interest is not contractual, nor based
on delict or quasi-delict,
but one that –

“runs as a matter of law and follows
as a matter of course from the right of the landowner to be placed in as good a
position as money can accomplish, as of the date of the taking” (30 C.J.S.
230)

Understood as such, Urtula, as
defendant in the expropriation case, could have raised the matter of interest
before the trial court even if there had been no actual taking yet by the
Republic and the said court could have included the payment of interest in its
judgment but conditioned upon the actual taking,
because the rate of interest upon the amount of just compensation (6%) is a
known factor, and it can reasonably be expected that at some future time, the
expropriator would take possession of the property, though the date be not
fixed.  In this way, multiple suits would
be avoided.  Moreover, nothing prevented appellee from calling the attention of the appellate courts
(even by motion to reconsider before judgment became final) to the subsequent
taking of possession by the condemnor, and asking for
allowance of interest on the indemnity, since that followed the taking as a
matter of course, and raised no issue requiring remand of the records to the
Court of origin.

As the issue of interest could have been raised in the former
case but was not raised, res judicata blocks the recovery of interest in the
present case.  (Tejedor
vs. Palet, 61 Phil. 494; Phil. Engineering Corp., et
al. vs. Ceniza, etc., et al., L-17834, 29 Sept. 1962)
It is settled that a former judgment constitutes a bar, as between the parties,
not only as to matters expressly adjudged, but all matters that could have been
adjudged at the time (Rule 39, sec. 49; Corda vs. Maglinti, L-17476, Nov.
30, 1961; Rodriguez vs. Tan, 48 Off. Gaz.
3330) It follows that interest upon the unrecoverable interest, which plaintiff
also seeks, cannot, likewise, be granted.

It is not amiss to note that Section 3 of Rule 67 of the Revised
Rules of Court (Sec. 4, Rule 69 of the old Rules), in fact, directs the
defendant in an expropriation case to “present in a single motion to
dismiss or for other appropriate relief, all of his objections
and defenses x x x”
and if not so presented “are waived.” (emphasis supplied)^[2]
As it is, the judgment allowing the collection of interest, now under appeal,
in effect amends the final judgment in the expropriation case, a procedure
abhorrent to orderly judicial proceedings.

The Republic took possession on 11 October 1958. 
From this date, therefore, the owner, while retaining the naked title,
was deprived of the benefits from the land and it is just and fair that the
realty taxes for the years 1959 and onward should be borne by the entity
exercising the right of eminent domain. 
(City of Manila vs. Roxas, 60 Phil. 215).

Costs in cases of eminent domain, except those of rival claimants
litigating their claims, are charged against the plaintiff.  (Sec. 12, Rule 67, Rules of Court; Sec. 13,
Rule 67 of the old Rules) But the present case is not one of eminent domain but
an ordinary civil action where the Republic of the Philippines
is a party.  Section 1 of Rule 142
provides that no costs shall be allowed against it, unless otherwise provided
by law.  No provision of law providing
the contrary has been cited; hence, costs should be charged against plaintiff Urtula.

FOR THE FOREGOING REASONS, the appealed judgment is
reversed and the case dismissed, with costs against the plaintiffs Dalmacio Urtula, et al.

Concepcion, C.J., Dizon,
Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro, Angeles, and Fernando, JJ., concur.

^[1]
The defendant Republic
was the one that prayed, in a counterclaim, for the payment of land taxes.  (Rec. on App., pp. 21-23)

^[2]
Such a provision was not provided in the old Code of Civil Procedure, Act 190.