Policy Guidelines on Determination of Just Compensation

(Culled from the OSG General Guidelines on Expropriation)

I THE VALUE OF THE PROPERTY MUST BE DETERMINED EITHER AS OF THE DATE OF THE TAKING OF THE PROPERTY OR THE FILING OF THE COMPLAINT WHICHEVER COMES FIRST;

Manansan vs. Republic, 498 SCRA 348 [2006] Tan vs. Republic, 523 SCRA 203 [2007]

Manansan vs. Republic, 498 SCRA 348 [2006]

The rule is that the value of the property must be determined either as of the date of the taking of the property or the filing of the complaint, whichever comes first.[22] In this case, the complaint was filed on April 17, 1979, and the trial court issued the writ of possession on January 10, 1981. The City Treasurer, City Assessor and the AACI based their assessment reports as of 1995 and not as of 1979 or a difference of 16 years. Indeed, the fair market value of the property in 1979 cannot be fixed by the mere expedient of cutting in half the assessment made by the City Treasurer and City Assessor or AACI for that matter as of 1997. Such a process is arbitrary and a grave abuse of the trial courts discretion.

Tan vs. Republic, 523 SCRA 203 [2007]

Section 2, Rule 67 (on Expropriation) of the same Rules provides, among others, that upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property. It bears reiterating that in Republic v. Vda. de Castellvi,[17] we ruled that just compensation is determined as of the date of the taking of the property or the filing of the complaint, whichever came first.

II. COMPENSATION FOR PROPERTY EXPROPRIATED MUST BE DETERMINED AS OF THE TIME THE EXPROPRIATING AUTHORITY TAKES POSSESSION THEREOF AND NOT AS OF THE INSTITUTION OF PROCEEDINGS;

Republic vs. Sarabia, GR. No. 157847, 2005

Republic vs. Sarabia, GR. No. 157847, 2005

The value of the property should be fixed as of the date when it was taken and not 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 by 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 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

III. WHEN THE TAKING OF THE PROPERTY SOUGHT TO BE EXPROPRIATED COINCIDES WITH THE COMMENCEMENT OF THE EXPROPRIATION PROCEEDINGS, OR TAKES PLACE SUBSEQUENT TO THE FILING OF THE COMPLAINT FOR EMINENT DOMAIN, THE JUST COMPENSATION SHOULD BE DETERMINED AS OF THE DATE OF THE FILING OF THE COMPLAINT;

City of Iloilo vs. Besana, 612 SCRA 458 (2010)

City of Iloilo vs. Besana, 612 SCRA 458 (2010)

When the taking of the property sought to be expropriated coincides with the commencement of the expropriation proceedings, or takes place subsequent to the filing of the complaint for eminent domain, the just compensation should be determined as of the date of the filing of the complaint.39 Even under Sec. 4, Rule 67 of the 1964 Rules of Procedure, under which the complaint for expropriation was filed, just compensation is to be determined "as of the date of the filing of the complaint." Here, there is no reason to depart from the general rule that the point of reference for assessing the value of the Subject Property is the time of the filing of the complaint for expropriation.

IV.

BECAUSE OF EJECTMENT/RECOVERY OF POSSESSION CASE, TRANSCO WAS CONSTRAINED TO INSTITUTE EXPROPRIATION PROCEEDINGS, PROVISIONAL DEPOSIT IS MADE UNDER RA 8974. FINAL JUST COMPENSATION BEING INSISTED ON TIME OF TAKING RULE;

The general rule is determination of just compensation at the time of filing. However, this admits of exceptions:

EXCEPTIONS TO THE GENERAL RULE:

GRAVE INJUSTICE TO THE PROPERTY OWNER

(Heirs of Pidacan vs. Air Transportation Office, 2007)

As a rule, the determination of just compensation in

eminent domain cases is reckoned from the time of taking.[14] In this case, however, application of the said rule would lead to grave injustice. Xxx xxx justice and fairness dictate that the appropriate reckoning point for the valuation of petitioners property is when the trial court made its order of expropriation in 2001

EXCEPTIONS TO THE GENERAL RULE:

THE TAKING DID NOT HAVE COLOR OF LEGAL

AUTHORITY (NPC vs. Lucman Ibrahim, et al., 2007)

xxx to allow petitioner to use the date it constructed the

tunnels as the date of valuation would be grossly unfair. First, it did not enter the land under warrant or color of legal authority or with intent to expropriate the same. xxx The trial court, therefore, as affirmed by the CA, rightly computed the valuation of the property as of 1992, when respondents discovered the construction of the huge underground tunnels beneath their lands and petitioner confirmed the same and started negotiations for their purchase but no agreement could be reached.

EXCEPTIONS TO THE GENERAL RULE:

THE TAKING OF THE PROPERTY WAS NOT INITIALLY

FOR EXPROPRIATION(Tan vs. Republic, 2007)

when PEA entered petitioners land in 1985, it was not for the

purpose of expropriating it. We stress that after its entry, PEA wrote SADC requesting to donate or sell the land to the government. Indeed, there was no intention on the part of PEA to expropriate the subject property. xxx" xxx The trial court, therefore, was correct in ordering respondent, through PEA, upon the filing of its complaint for expropriation, to pay petitioner just compensation on the basis of the BIR zonal valuation of the subject property at P20,000.00 per square meter.

EXCEPTIONS TO THE GENERAL RULE:

THE OWNER WILL BE GIVEN UNDUE INCREMENT

ADVANTAGES BECAUSE OF THE EXPROPRIATION (Provincial Government of Rizal vs. Araullo, 1933)
the owners of the land have no right to recover damages

for this unearned increment resulting from the construction of the public improvement for which the land was taken. xxx" xxx the property is to be considered in its condition and situation at the time it is taken, and not as enhanced by the purpose for which it is taken.

ADDITIONAL EXCEPTION TO THE GENERAL RULE: (BASED ON CA DECISION IN TRANSCO VS. BERMUDA CASE

TIME OF TAKING IS THE TIME WHEN THE

LANDOWNER WAS DEPRIVED OF THE USE AND BENEFIT OF HIS PROPERTY (TransCo vs. Bermuda Devt. Corp. CA-GR No. 96092, Nov. 2011)
Bermuda became the owner of the subject property only in

1992. It was only from this year up the present that BERMUDAs proprietary rights over the subject property was restricted or limited due to TRANSCOs continued utilization of its transmission lines. Thus, the reckoning date for the determination of just compensation to be paid is 1992, xxx and not 1979 as it was only then the latter acquired proprietary interest over the subject property. To claim just compensation even prior to 1992 would amount to unjust enrichment on the part of BERMUDA which was not yet then the owner of the same.

End of Part 1

Recent Jurisprudence on Expropriation

Republic vs. Mangotara, GR. No. 170375, 2010

The owner of the property is not an indispensable party in an action for expropriation. When the property already appears to belong to the Republic, there is no sense in the Republic instituting expropriation proceedings against itself.

Curata vs. Philippine Ports Authority, GR. No. 15421112, 2009

In Republic v. Gingoyon,[109] on the issue of how much must the government pay by way of initial deposit, the Court, after positing the applicability of RA 8974 to the expropriation of NAIA Passenger Terminal III (NAIA III), stated the observation that the appropriate standard of just compensationinclusive of the manner of payment thereof and the initial compensation to the lot ownersis a substantive, not merely a procedural, matter. In Lintag v. National Power Corporation,[110] we reiterated that RA 8974 is a substantive law that cannot be applied retroactively

Tinio vs. NPC, GR. No. 160923, 2011

It is settled that the nature and character of the land at the time of its taking is the principal criterion for determining how much just compensation should be given to the landowner.[10] Hence, the argument of the Tinios that the subject property should benefit from the subsequent classification of its adjoining properties as industrial lands is, likewise, untenable. The Court, in a number of cases,[11] has enunciated the principle that it would be injustice on the part of the expropriator where the owner would be given undue incremental advantages arising from the use to which the government devotes the property expropriated.[10]

NPC vs. Teresita Diato-Bernal, GR. No. 180979, 2010

It is evident that the above conclusions are highly speculative and devoid of any actual and reliable basis. First, the market values of the subject propertys neighboring lots were mere estimates and unsupported by any corroborative documents, such as sworn declarations of realtors in the area concerned, tax declarations or zonal valuation from the Bureau of Internal Revenue for the contiguous residential dwellings and commercial establishments. The report also failed to elaborate on how and by how much the community centers and convenience facilities enhanced the value of respondents property.[23] Finally, the market sales data and price listings alluded to in the report were not even appended thereto. As correctly invoked by NAPOCOR, a commissioners report of land prices which is not based on any documentary evidence is manifestly hearsay and should be disregarded by the court.[23]

NPC vs. Sps. Zabala, GR. No. 173520, 2013

It has likewise been our consistent ruling that just compensation cannot be arrived at arbitrarily. Several factors must be considered, such as, but not limited to, acquisition cost, current market value of like properties, tax value of the condemned property, its size, shape, and location. But before these factors can be considered and given weight, the same must be supported by documentary evidence.

In Republic v. Santos,29 we ruled that a commissioners land valuation which is not based on any documentary evidence is manifestly hearsay and should be disregarded by the court,

NPC vs. Tuazon, et al, GR. No. 193023, 2011

In sum, we categorically hold that private land taken for the installation of transmission lines is to be paid the full market value of the land as just compensation. We so ruled in National Power Corporation v. Benjamin Ong Co,[40] and we reiterate this ruling today:
As earlier mentioned, Section 3A of R.A. No. 6395, as amended, substantially provides that properties which will be traversed by transmission lines will only be considered as easements and just compensation for such right of way easement shall not exceed 10 percent of the market value. However, this Court has repeatedly ruled that when petitioner takes private property to construct transmission lines, it is liable to pay the full market value upon proper determination by the courts.

NPC vs. Heirs of Makabangkit Sangkay, GR. No. 165828, 2011

We rule that the prescriptive period provided under Section 3(i) of Republic Act No. 6395 is applicable only to an action for damages, and does not extend to an action to recover just compensation like this case. Consequently, NPC cannot thereby bar the right of the Heirs of Macabangkit to recover just compensation for their land. The action to recover just compensation from the State or its expropriating agency differs from the action for damages. The former, also known as inverse condemnation, has the objective to recover the value of property taken in fact by the governmental defendant, even though no formal exercise of the power of eminent domain has been attempted by the taking agency.

Republic vs. Hon. Judge Samson-Tatad, GR. No. 187677, 2013

The sole issue in this case, i.e., whether or not the court that hears the expropriation case has also jurisdiction to determine, in the same proceeding, the issue of ownership of the land sought to be condemned, must be resolved in the affirmative. That the court is empowered to entertain the conflicting claims of ownership of the condemned or sought to be condemned property and adjudge the rightful owner thereof, in the same expropriation case, is evident from Section 9 of the Revised Rule 69, xxx If at all, this situation is akin to ejectment cases in which a court is temporarily authorized to determine ownership, if only to determine who is entitled to possession. This is not conclusive, and it remains open to challenge through proper actions.

End of Part 2
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