notes on eminent domain

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We are therefore of the opinion and so hold that the plaintiff cannot compel the defendant city of Manila to purchase from him the street areas described in his complaint. Neither can he compelled to donate said land and transfer his title to the City so that the latter may build and maintain the streets. But as long as the plaintiff retains the title and ownership of said street areas, he is under obligation to pay to the land taxes thereon as well as to reimburse to the City the expenses of filing the same.

CARLOS YOUNG, plaintiff-appellant, vs.THE CITY OF MANILA; VICTOR ALFONSO, in his capacity as Treasurer of the City of Manila; and JOSE GARRIDO, in his capacity as Engineer of the City of Manila, defendants. THE CITY OF MANILA, appellant. EN BANCG.R. No. L-481943 December 27, 1941

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WOOLRIDGE:2007 CASE

In the case of Abellana, Sr. v. Court of Appeals,¹³ the Court held that "the road lots in a private subdivision are private property, hence, the local government should first acquire them by donation, purchase, or expropriation, if they are to be utilized as a public road."¹⁴ Otherwise, they remain to be private properties of the owner-developer.

Contrary to the position of petitioners, the use of the subdivision roads by the general public does not strip it of its private character. The road is not converted into public property by mere tolerance of the subdivision owner of the public's passage through it. To repeat, "the local government should first acquire them by donation, purchase, or expropriation, if they are to be utilized as a public road."¹⁵

Likewise, we hold the trial court in error when it ruled that the subject road is public property pursuant to Section 2 of Presidential Decree No. 1216.¹⁶ The pertinent portion of the provision reads:

Section 2. xxx xxx xxx

Upon their completion as certified to by the Authority, the roads, alleys, sidewalks and playgrounds shall be donated by the owner or developer to the city or municipality and it shall be mandatory for the local governments to accept them provided, however, that the parks and playgrounds may be donated to the Homeowners Association of the project with the consent of the city or municipality concerned…

The law is clear. The transfer of ownership from the subdivision owner-developer to the local government is not automatic but requires a positive act from the owner-developer before the city or municipality can acquire dominion over the subdivision roads. Therefore, until and unless the roads are donated,¹⁷ ownership remains with the owner-developer.¹⁸

Since no donation has been made in favor of any local government and the title to the road lot is still registered in the name of ARB, the disputed property remains private.

This is not to say that ARB may readily exclude petitioners from passing through the property. As correctly pointed out by the Court of Appeals, the circumstances clearly make out a case of legal easement of right of way. It is an easement which has been imposed by law and not by the parties and it has "for (its) object either public use or the interest of private persons."¹⁹

WOODRIDGE SCHOOL, INC., and MIGUELA JIMENEZ-JAVIER, Petitioners, vs.ARB CONSTRUCTION CO., INC., Respondent. FIRST DIVISION G.R. No. 157285             February 16, 2007

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White PLAINS case revisited: As long as title remains to owner, there should be just compensation. Owner cannot be compelled to executed a forced donation.

It may be noted that the respondent court called attention to the fact the dictum in White Plains Association, Inc. vs. Legaspi found in the published reports ²⁹ had been modified on the basis of a second motion for reconsideration. It is wrong to accept as settled the doctrine still not clearly resolved that a subdivision developer may be forced to donate a street to the city against the owner's will. Conclusively so, if the road to be donated was intended for a national highway which has been since abandoned. This is not what this Court finally promulgated in that case.

In the White Plains Association, Inc. vs. Legaspi case, the Court simply went back to the decision in the earlier case, G.R. No. 55868, which ordered title to remain in the name of QCDFC but with a lien or a reservation for the construction of a thoroughfare or highway. Permanent ownership was not resolved.

The ruling of the respondent court sustains the rejoinder of QCDFC which cites and then explains the law on subdivision streets donation:

(c) If Quezon City wants to use the 18 meter wide strip reserved for C-5 and to dedicate it to another public purpose it must institute eminent domain proceedings and pay just compensation. It cannot force a private citizen to donate to the city government something reserved for a specific purpose. And which purpose has been abandoned.

(d) In fact, Sec 31 of P.D. 957 provides:

The registered owner or developer of the subdivision or condominium project, upon completion or the development of said project, may at his option convey by way of donation the roads and open spaces found within the project to the city or municipality wherein the project is located. Upon acceptance of the donation by the city or municipality concerned, no portion of the area donated shall thereafter be converted to any other purpose or purposes unless, after hearing, the proposed conversion is approved by the (National Housing) Authority

Please note the phrase at his option. There is also the provision that any portion thus donated cannot be converted to a purpose other than the original purpose. The approval by the National Housing Authority is required only in genuine donations. Donation has an established meaning in law. Any change from the original purpose always results in reversion of the donated property to the donor or his heirs. At any rate, the law calls for a "donation."

(e) P.D. 1216. Section 2 gives the owner or developer the option of donation to either the Homeowners Association or the local government. There is nothing about forcible donation. What is mandatory is for the local government to accept a developed road or open space given as a donation. ³⁰

These provisions of the law are only a carryover from existing jurisprudence. In the early case of Young vs. City of Manila, ³¹ this Court ruled:

We are therefore of the opinion and so hold that the plaintiff cannot compel the defendant City of Manila to purchase from him the street areas described in his complaint. Neither can he be compelled to donate said land and transfer his title to the city so that the latter may build and maintain the streets. But as long as the plaintiff retains title and ownership of said street areas, he is under obligation to pay the land taxes thereon as well as to reimburse to the city the expenses of filling the same.

WHITE PLAINS HOMEOWNERS ASSOCIATION, INC., SYLVIA J. JAMORA, GLICERIO J. INTENGAN, MANUEL M. JASMINES, MANUEL M. CHING, RODOLFO M. PUNSALANG, ADEODATO DUQUE, JR., DAVID J. CRUZ, MA. ELENA C. SAMSON, VERONICA CATALAN, CARLOS TAN BON LIONG, ANTONIO RAMOS, CHOLLY ANTONIO, FELICITAS OCAMPO, ROGELIO A. VINLUAN and LUIS TERENCE, petitioners, vs.THE COURT OF APPEALS and THE QUEZON CITY DEVELOPMENT & FINANCING CORPORATION, respondents. SECOND DIVISIONG.R. No. 128131 October 8, 1998

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This Court has already resolved three interrelated White Plains Association cases:¹⁵ (1) G.R. No. 55685¹⁶ resolved in 1985; (2) G.R. No. 95522¹⁷ decided in 1991 and (3) G.R. No. 128131¹⁸ decided in 1998.

The ruling in the 1991 White Plains Association decision relied on by both the trial and appellate courts was modified by this Court in 1998 in White Plains Association v. Court of Appeals.¹⁹ Citing Young v. City of Manila,²⁰ this Court held in its 1998 decision that subdivision streets belonged to the owner until donated to the government or until expropriated upon payment of just compensation.

ANIANO A. ALBON, Petitioner, vs.BAYANI F. FERNANDO, City Mayor of Marikina, ENGR. ALFONSO ESPIRITO, City Engineer of Marikina, ENGR. ANAKI MADERAL, Assistant City Engineer of Marikina, and NATIVIDAD CABALQUINTO, City Treasurer of Marikina, Respondents. SECOND DIVISIONG.R. No. 148357             June 30, 2006

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A PRIVATE LAND TAKEN FOR ROAD PURPOSES, ANNOTATED AS SUCH, IS COMPENSABLE.

The provision of Section 39 of the Land Registration Act which states:

SEC. 39. Every person receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land who takes a certificate of title for value in good faith shall hold the same free of all encumbrances except those noted on said certificate, and any of the following encumbrances which may be subsisting namely:

x x x           x x x           x x x

Third. Any public highway, way, private way established by law or any Government irrigation canal or lateral thereof; where the certificate of title does not state that the boundaries of such highway, way, or irrigation canal or lateral thereof, have been determined.

has no application in this case for the reason that Mango Avenue was constructed subsequent to the acquisition of Lot No. 638 by Ruperta Cabucos. In other words, Mango Avenue is not an "encumbrance which may be subsisting" when Ruperta Cabucos purchased the land from the Government in 1909.

Furthermore, it would be unfair for the Government to invoke the above statutory reservations and take back from Ruperta Cabucos Lot No. 638-B without just compensation after selling it to her and collecting the full price therefor. To do so would abridge her individual right, guaranteed by the Constitution, to own private property and keep it, free from State appropriation without due process and without just compensation. Ours is a government dedicated to uphold and preserve the right of an individual, a fundamental concept in a democratic society which spells the big difference between democracy and totalitarianism. The Government must respect and observe individual rights for, otherwise, the citizenry would be liable to lose confidence in it. Said Mr. Justice Montemayor in the celebrated case of Herrera vs. Auditor General:²

Here before us is a case of law abiding citizen and taxpayer who as far back as 1934, realizing the need of the Government of his lot for road purposes, instead of compelling said Government to resort to expropriation proceedings, readily and in all ingenuousness allowed the Government to immediately occupy it. In his implicit trust in his Government, he did not even bother to require it to make a judicial deposit of the approximate value of his land, not even to make an offer of a price it would pay for it. But since then, he has continuously asked for the payment of said fair price as a condition precedent to his conveyance and sale of the property. But the Government neglected to make an offer, much less make payment, then evidently forgot all about, and now it flatly refuses to pay, evidently forgetting that it had also neglected to secure a conveyance of the property, so that Herrera, as already stated, is still the owner of the same. ... There is nothing that can more speedily and effectively embitter a citizen and tax-payer against his Government and alienate his faith in it, than an injustice and unfair dealing like the present case.

Secondly, laches and prescription cannot deprive Ruperta Cabucos of her ownership over Lot No. 638-B nor would they dispossess her of her right to demand compensation due for its taking. The land being registered under the Torrens System the Government cannot acquire ownership over the same by prescription in derogation of the registered owner.³ Such was the ruling of this Court in Herrera vs. Auditor General,⁴ whose facts are very similar to the instant case. There the Government took a registered property for road purposes sometime in 1934 without prior expropriation proceedings or payment of compensation. The owner, who executed no formal deed of conveyance in favor of the Government, filed his claim for compensation only in 1955.

This case would be resolved differently from Jaen vs. Agregado,⁵ cited by the Government, where the landowner had formally conveyed the property to the Government but did not file his claim for the price therefor until after 33 years later. Jaen's claim being merely one for a sum of money rather than one involving a question on acquisitive prescription, the some was found and declared to have prescribed. Such is not the nature of the claim instituted in this case.

It is not so clear as to what measures Ruperta Cabucos took to prosecute her claim against the municipal government of Cebu. But the allegation is to the effect that she in fact filed a claim which, since no payment has yet been made, was probably simply ignored or lost in the malestrom of official red tape. It should be borne in mind that as of today her heirs are still the registered owners of lot in question. Their title is clean and they have not transferred it in favor of the Government thru any instrument or verbal agreement. Their right cannot be more aptly stated than in Alfonso vs. City of Pasay, L-12754, January 30, 1960, where this Court, through Mr. Justice Montemayor, said:

. . . As registered owner, he could bring an action to recover possession at any time because possession is one of the attributes of ownership of land. However, said restoration of possession by the City of Pasay is neither convenient nor feasible because it is now and has been used for road purposes. So, the only relief available is for the City of Pasay to make due compensation, which it could and should have done years ago since 1925.

Mindful as we are that said right is guaranteed by paragraph (2), Section 1, Article III of the Constitution, which reads:

(2) Private property shall not be taken for public use without just compensation.

and by Article 435 of the Civil Code, we see no reason why petitioner's claim should not be sustained.

With respect to the contention that petitioner lost her right to demand compensation for Lot No. 638-B because she failed to register her claim in 1946 with the Claims Committee created by Administrative Order No. 6 of July 29, 1946, suffice it to state that said committee was created only for the purpose of determining the obligations of the National Government and failure to register any claim with it did not bar such claim inasmuch as Administrative Order No. 6 did not so provide.

Having actually appealed from the decision signed by the Deputy Auditor General of February 18, 1963, petitioner is estopped from maintaining that said decision is not the one appealable under Section 1 of Rule 45 of the Rules of Court. Nonetheless, it may be worth pointing out that the Deputy Auditor General, being the next highest official in the General Auditing Office, has charge of said office in the absence of the Auditor General⁶ and as such performs the functions of the latter, e.g., signing decisions on money claims. That the Deputy Auditor General regularly performed his duties when he signed the decision appealed from is presumed in the absence — as herein — of a contrary showing.

The authorities are agreed that the owner of the land expropriated for public use is entitled to recover the fair market value of the property at the time of taking plus interest at the legal rate.⁷ However, only the fair market value of Lot No. 638-B as of August 1961, the date the amended claim was filed with the City Engineer of Cebu, is disclosed by the records. In fairness to the heirs of Ruperta Cabucos who have been deprived of the use of the lot in question for quite a long time, this Court is inclined under the circumstances to award as reasonable compensation the amount of P13,245.00 fixed by the Cebu Appraisal Committee.

Wherefore, the decision appealed from is reversed. Petitioner-appellant Raymunda S. Digran, as administratrix of the estate of Ruperta Cabucos, is hereby ordered to execute a formal deed of conveyance on Lot No. 638-B in favor of the Republic of the Philippines for which the Republic of the Philippines shall pay, as it is hereby ordered to pay, petitioner-appellant Raymunda S. Digran the sum of P13,245.00 plus interest at the legal rate from the date of filing of her claim on April 20, 1961 until the full amount is paid and attorney's fees in the amount of P1,500.00. No costs. So ordered.

RAYMUNDA S. DIGRAN, in her capacity as Administratrix of Estate of Deceased Ruperta Cabucos, petitioner, vs.AUDITOR GENERAL, DEPUTY AUDITOR GENERAL, COMMISSIONER OF PUBLIC HIGHWAYS and CITY ENGINEER OF CEBU CITY, respondents. EN BANC G.R. No. L-21593 April 29, 1966

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NAVARRO LOT IS A SUBDIVISION LOT NOT A ROAD LOT

Navarro instituted this action, on July 13, 1950, to recover said sum of P9,765, as the value of Subdivision Lot 861-A of the Cadastral Survey of Zamboanga, which had been taken in 1930 by the Municipality of Zamboanga, now City of Zamboanga, and converted into a road formerly Buenavista St. Extension, now Governor Agustin L. Alvarez Avenue — as well as the sum of P11,425, as rentals for the use thereof since 1930.

ADOLFO C. NAVARRO, plaintiff-appellee, vs.THE CITY OF ZAMBOANGA, defendant-appellant. EN BANC G.R. No. L-24493 ,August 14, 1968

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ROAD LOTS ARE NOT COMPENSABLE

Subdivision owners are mandated to set aside such open spaces before their proposed subdivision plans may be approved by the government authorities, and that such open spaces shall be devoted exclusively for the use of the general public and the subdivision owner need not be compensated for the same. A subdivision owner must comply with such requirement before the subdivision plan is approved and the authority to sell is issued.

Considering that the said Road Lot 1 had been withdrawn from the commerce of man, thus constituting part of mandatory open space reserved for public use to be improved into the widened Katipunan Avenue, the public respondent, should proceed with the ongoing widening work of said road and the petitioner is entitled to an injunction against any obstacle to the continuation of this public improvement. Respondent QCDFC has no right whatever to demand compensation from the government for the use of the unimproved portion of said Road Lot 1. To repeat, when it was withdrawn from the commerce of man as the open space required by law to be devoted for the use of the general public, its ownership was automatically vested in the Quezon City government and/or the Republic of the Philippines, without need of paying any compensation to respondent QCDFC, although it is still registered in the latter's name. Its donation by the owner/developer to the government is a mere formality. Indeed, the standard practice and requirement is that a developer must, among its mandatory obligations, develop the road lots in its subdivision at its own expense, before it can turn over the same to the government by way of a donation.

While it may be true that the developed portion of said Road Lot 1 had already been donated by respondent QCDFC to the Quezon City government, it did not thereby follow that it was thus relieved of its obligation to develop the remaining portion of said road lot and thereafter, as a formality, donate the same to the said local government. Respondent QCDFC should be gratified that the government had opted to proceed with the widening of the Katipunan Road at its own expense. The least respondent QCDFC should do is to cooperate by executing the deed of donation of said remaining 18 meters width undeveloped portion, which is nominally registered in its name, to the government. The manifestation of respondent QCDFC that it is entitled to the payment of just compensation for the same is without lawful basis and is to say the least absurd.

WHITE PLAINS ASSOCIATION, INC., petitioner, vs.HON. GODOFREDO L. LEGASPI, in his capacity as Presiding Judge of RTC, Quezon City, Branch 79, QUEZON CITY DEVELOPMENT AND FINANCING CORPORATION, HON. FIORELLO ESTUAR, in his capacity as Secretary of Public Works and Highways, HON. CONRADO DANGANAN, in his capacity as District Engineer of Quezon City, SPRAGUE CONSTRUCTION and M.E. APO CONSTRUCTION, respondents FIRST DIVISION G.R. No. 95522, February 7, 1991.

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“Taking” under the power of eminent domain means entering upon private property for more than a momentary period, and under the warrant or color of legal authority, devoting it to public use, or otherwise informally appropriating or injuriously affecting it in such a way as substantially to oust the owner and deprive him of all beneficial enjoyment thereof.[1]

“Taking” of property takes place when: (1) the owner is actually deprived or dispossessed of his property; (2) there is a practical destruction or a material impairment of the value of his property; (3) the owner is deprived of the ordinary use of the property, or (4) when he is deprived of the jurisdiction, supervision and control of his property.[2]

The taking of property is different from the transfer of the property title from the private owner to the Government. Under Rule 67 of the Rules of Court, there are two phases of expropriation: (a) the condemnation of the property after it is determined that its acquisition will be for a public purpose or public use; and (b) the determination of just compensation to be paid for the taking of private property to be made by the court with the assistance of not more than three commissioners.

The first phase is concerned with the determination of the Government’s authority to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. The court declares that the Government has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint.

The second phase relates to the just amount that the Government shall compensate the property owner.[3] Whenever the court affirms the condemnation of private property in the first phase of the proceedings, it merely confirms the Government’s lawful right to take the private property for public purpose or public use. The court does not necessarily rule that the title to the private property likewise vests on the Government.

The transfer of property title from the property owner to the Government is not a condition precedent to the taking of property. The State may take private property prior to the eventual transfer of title of the expropriated property to the State.In fact, there are instances when the State takes the property prior to the filing of the complaint for expropriation or without involving the transfer of title.[4] In People v. Fajardo,[5] the Court ruled that the municipal mayor’s refusal to give the property owner the permission to build a house on his own land on the ground that the structure would destroy the beauty of the public plaza amounts to the taking of the property requiring just compensation.

In National Power Corporation (NPC) v. Spouses Malit, [6]the NPC’s transmission lines had to pass the Spouses Malit’s property. The Court ruled that the NPC’s easement of right-of-way on the land was equivalent to the taking of property. The limitation imposed by the NPC against the use of the land for an indefinite period deprived the Spouses Malit of the lot’s ordinary use. Consequently, the NPC shall give the Spouses Malit just compensation.

The reckoning period, however, of the valuation of just compensation is the date of taking or the filing of the complaint for expropriation, whichever is earlier. In either case, it is only after the finality of the second stage and after the payment of just compensation that the title shall pass to the Government. As we have ruled in Gingoyon, the title to the property does not pass to the condemnor until just compensation is paid.

PAYMENT OF INTEREST

To avoid confusion in computing interests, we first distinguish three interrelated concepts in just compensation: (1) the valuation period of just compensation under Rule 67 of the Rules of Court; (2) the reckoning period of interest in eminent domain cases pursuant to Section 9, Article 3 of the 1987 Constitution; and (3) the initial and final payments of just compensation under RA 8974.

Under Section 4, Rule 67 of the Rules of Court, the property sought to be expropriated shall be appraised as of the date of taking of the property or the filing of the complaint for expropriation, whichever is earlier, thus:

Section 4. Order of expropriation. — If the objections to and the defenses against the right of the plaintiff to expropriate the property are overruled, or when no party appears to defend as required by this Rule, the court may issue an order of expropriation declaring that the plaintiff has a lawful right to take the property sought to be expropriated, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the taking of the property or the filing of the complaint, whichever came first.

A final order sustaining the right to expropriate the property may be appealed by any party aggrieved thereby. Such appeal, however, shall not prevent the court from determining the just compensation to be paid.

After the rendition of such an order, the plaintiff shall not be permitted to dismiss or discontinue the proceeding except on such terms as the court deems just and equitable. (4a) (Emphasis supplied)

On the other hand, Section 9, Article 3 of the 1987 Constitution provides that “[n]o private property shall be taken for public use without just compensation.” The 1987 Constitution thus commands the condemnor to pay the property owner the full and fair equivalent of the property from the date of taking. This provision likewise presupposes that the condemnor incurs delay if it does not pay the property owner the full amount of just compensation on the date of taking.[338]

The reason is that just compensation would not be “just” if the State does not pay the property owner interest on the just compensation from the date of the taking of the property. Without prompt payment, the property owner suffers the immediate deprivation of both his land and its fruits or income. The owner’s loss, of course, is not only his property but also its income-generating potential.[339]

Ideally, just compensation should be immediately made available to the property owner so that he may derive income from this compensation, in the same manner that he would have derived income from his expropriated property.

However, if full compensation is not paid for the property taken, then the State must pay for the shortfall in the earning potential immediately lost due to the taking, and the absence of replacement property from which income can be derived. Interest on the unpaid compensation becomes due as compliance with the constitutional mandate on eminent domain and as a basic measure of fairness.[340]

Thus, interest in eminent domain cases “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 taking.”[341]

Lastly, RA 8974 requires the Government to pay just compensation twice: (1) immediately upon the filing of the complaint, when the amount to be paid is 100% of the value of the property based on the current relevant zonal valuation of the BIR, and the value of the improvements and/or structures sought to be expropriated (initial payment); and (2) when the decision of the court in the determination of just compensation becomes final and executory, in which case the implementing agency shall pay the owner the difference between the amount already paid and the just compensation as determined by the court (final payment).

In case the completion of a government infrastructure project is of utmost urgency and importance, and there is no existing valuation of the area concerned, the initial payment shall be the proffered value of the property. Section 4 of RA 8974 also states that the initial payment of just compensation is a prerequisite for the trial court’s issuance of a writ of possession, to wit:

Section 4. Guidelines for Expropriation Proceedings. – Whenever it is necessary to acquire real property for the right-of-way or location for any national government infrastructure project through expropriation, the appropriate implementing agency shall initiate the expropriation proceedings before the proper court under the following guidelines:

(a) Upon the filing of the complaint, and after due notice to the defendant, the implementing agency shall immediately pay the owner of the property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of the property based on the current relevant zonal valuation of the Bureau of Internal Revenue (BIR); and (2) the value of the improvements and/or structures as determined under Section 7 hereof;

(b) In provinces, cities, municipalities and other areas where there is no zonal valuation, the BIR is hereby mandated within the period of sixty (60) days from the date of the expropriation case, to come up with a zonal valuation for said area; and

(c) In case the completion of a government infrastructure project is of utmost urgency and importance, and there is no existing valuation of the area concerned, the implementing agency shall immediately pay the owner of the property its proffered value taking into consideration the standards prescribed in Section 5 hereof.

Upon compliance with the guidelines abovementioned, the court shall immediately issue to the implementing agency an order to take possession of the property and start the implementation of the project.

Before the court can issue a Writ of Possession, the implementing agency shall present to the court a certificate of availability of funds from the proper official concerned.

In the event that the owner of the property contests the implementing agency’s proffered value, the court shall determine the just compensation to be paid the owner within sixty (60) days from the date of filing of the expropriation case. When the decision of the court becomes final and executory, the implementing agency shall pay the owner the difference between the amount already paid and the just compensation as determined by the court. (Emphasis supplied)

The Government’s initial payment of just compensation does not excuse it from avoiding payment of interest on the difference between the adjudged amount of just compensation and the initial payment.

The initial payment scheme as a prerequisite for the issuance of the writ of possession under RA 8974 only provides the Government flexibility to immediately take the property for public purpose or public use pending the court’s final determination of just compensation. Section 4 (a) of RA 8974 only addresses the Government’s need to immediately enter the privately owned property in order to avoid delay in the implementation of national infrastructure projects.

Otherwise, Section 4 of RA 8974 would be repugnant to Section 9, Article 3 of the 1987 Constitution which mandates that private property shall not be taken for public use without just compensation. To reiterate, the Constitution commands the Government to pay the property owner no less than the full and fair equivalent of the property from the date of taking.

XX X X X

Contrary to the Government’s opinion, the interest award is not anchored either on the law of contracts or damages; it is based on the owner’s constitutional right to just compensation. The difference in the amount between the final payment and the initial payment – in the interim or before the judgment on just compensation becomes final and executory – is not unliquidated damages which do not earn interest until the amount of damages is established with reasonable certainty. The difference between final and initial payments forms part of the just compensation that the property owner is entitled from the date of taking of the property.

Thus, when the taking of the property precedes the filing of the complaint for expropriation, the Court orders the condemnor to pay the full amount of just compensation from the date of taking whose interest shall likewise commence on the same date. The Court does not rule that the interest on just compensation shall commence the date when the amount of just compensation becomes certain, e.g., from the promulgation of the Court’s decision or the finality of the eminent domain case.

With respect to the amount of interest on just compensation, we decisively ruled in Republic v. Court of Appeals^[342] that the just compensation due to the property owner is effectively a forbearance of money, and not indemnity for damages.^[343] Citing Eastern Shipping Lines, Inc. v. Court of Appeals,^[344] we awarded a legal interest of 12% per annum on just compensation. The Court upheld the imposition of the 12% interest rate in just compensation cases, as ruled in Republic, in Reyes v. National Housing Authority,^[345] Land Bank of the Philippines v. Wycoco,^[346] Republic v. Court of Appeals,^[347] Land Bank of the Philippines v. Imperial,^[348] Philippine Ports Authority v. Rosales-Bondoc,^[349] and Curata v. Philippine Ports Authority.^[350] The Court reiterated the Republic ruling in Apo Fruits Corporation and Hijo Plantation, Inc. v. Land Bank of the Philippines,^[351] Land Bank of the Philippines v. Rivera,^[352] Department of Agrarian Reform v. Goduco,^[353] and Land Bank of the Philippines v. Santiago, Jr.^[354]

On June 21, 2013, the BSP issued Circular No. 799,^[355] pursuant to MB Resolution No. 796 dated May 16, 2013, reducing the legal interest on loans and forbearance of money from 12% to 6% per annum. BSP Circular No. 799 took effect on July 1, 2013.

In the present case, the Government filed a complaint for expropriation of the NAIA-IPT III on December 21, 2004. On the same day, the RTC issued a writ of possession in favor of the Government upon the deposit of P3,002,125,000.00 with the Land Bank. In Gingoyon, the Court held in abeyance the implementation of the writ of possession pending the direct payment of the proffered value of P3,002,125,000.00 to PIATCO.

On September 11, 2006, the RTC reinstated the writ of possession after the Government tendered PIATCO a check in this amount.

On April 11, 2012, the MIAA and the Land Bank entered into an escrow agreement in the amount of $82,157,716.73. On the same date, the MIAA and the DBP likewise executed an escrow agreement in the amount of $34,190,924.59.

Based on these factual circumstances, interest shall accrue as follows:

1. The principal amount of just compensation shall be appraised on the date of the filing of the complaint for expropriation or on December 21, 2004. The just compensation shall not earn interest from December 21, 2004, until September 10, 2006, since the Government did not take possession of the NAIA-IPT III during this period.

2. The difference between the principal amount of just compensation and the proffered value of P3,002,125,000.00 shall earn legal interest of 12% per annum from the date of taking or September 11, 2006 until June 30, 2013.

3. The difference between the principal amount of just compensation and the proffered value of P3,002,125,000.00 shall earn legal interest of 6% per annum from July 1, 2013, until the finality of the Court’s ruling.

4. The total amount of just compensation shall earn legal interest of 6% per annum from the finality of the Court’s ruling until full payment.

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY EXECUTIVE SECRETARY EDUARDO R. ERMITA, THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, AND MANILA INTERNATIONAL AIRPORT AUTHORITY, PETITIONERS, VS. HON. JESUS M. MUPAS, IN HIS CAPACITY AS ACTING PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, NATIONAL CAPITAL JUDICIAL REGION, BRANCH 117, PASAY CITY, AND PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC., RESPONDENTS. ENBANC[ G.R. No. 181892, September 08, 2015 ]

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Petitioners as plaintiffs in a complaint filed with the Court of First Instance of Cebu, dated April 13, 1966, sought the payment of just compensation for a registered lot, containing an area of 1045 square meters, alleging that in 1927 the National Government through its authorized representatives took physical and material possession of it and used it for the widening of the Gorordo Avenue, a national road, Cebu City, without paying just compensation and without any agreement, either written or verbal. There was an allegation of repeated demands for the payment of its price or return of its possession, but defendants Public Highway Commissioner and the Auditor General refused to restore its possession. It was further alleged that on August 25, 1965, the appraisal committee of the City of Cebu approved Resolution No. 90, appraising the reasonable and just price of Lot No. 647-B at P50.00 per square meter or a total price of P52,250.00. Thereafter, the complaint was amended on June 30, 1966 in the sense that the remedy prayed for was in the alternative, either the restoration of possession or the payment of the just compensation.

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 "It is uncontroverted that the land in question is used by the City of Dipolog for road purposes. No evidence was presented whether or not there was an agreement or contract between the government and the original owner and whether payment was paid or not to the original owner of the land. It is not disputed that when the land was taken for road purposes for the use of the general public, no compensation was given to the owner of the land. There is no doubt that the case is against the city government of Dipolog for compensation of a private land that is taken for public use.

The City is hesitant to pay, arguing that it did not undertake any expropriation proceeding, neither did it use its delegated power of eminent domain.

On the other hand, Plaintiff argues that if the City does not pay for the land which it took from them, then it prays in the alternative cause for the recovery of the possession of the disputed lots, since no proceeding for eminent domain, as required in the Code of Civil Procedure, was instituted.

 However, as noted in Alfonso v. Pasay City, ¹⁰ this Court speaking through Justice Montemayor, restoration would be "neither convenient nor feasible because it is now and has been used for road purposes." ¹¹ The only relief, in the opinion of this Court, would be for the government "to make due compensation, ..." ¹² It was made clear in such decision that compensation should have been made "as far back as the date of the taking."

If the argument of the City were to be upheld that it should not pay as it did not expropriate, then the Plaintiff would be absolutely without any remedy. If the constitutional mandate that the owner be compensated for property which is taken for public use were to be respected, as it should be, the Court should apply the law, and order the payment of just compensation. A city cannot take land, and not pay, by simply saying that it is not interested to expropriate it. That would not just be absurd, but also unjust.

The discretion not to expropriate cannot serve as an instrument for perpetrating an injustice to its own citizen.

 Had the city government followed the procedure indicated by the governing law at the time, a complaint would have been filed by it, and only upon payment of the compensation fixed by the judgment, or after tender to the party entitled to such payment of the amount fixed, may it "have the right to enter in and upon the land so condemned" to appropriate the same to the public use defined in the judgment." ¹⁴

 If there were an observance of procedural regularity, Plaintiffs would not be in the sad plight that they are now. It is unthinkable then that precisely because there was a failure to abide by what the law requires, the city government would stand to benefit. It is just as important, if not more so, that there be fidelity to legal norms on the part of officialdom if the rule of law were to be maintained. It is not too much to say that when the government takes any property for public use, which is conditioned upon the payment of just compensation, to be judicially ascertained, it makes manifest that it should obey the sovereign law, that no private property shall be taken, unless just compensation should be paid.

Accordingly then, it is now the duty of the court, pursuant to its vested judicial power, to determine just compensation to which plaintiffs are entitled. Taking into account the Alfonso case, "As to the value of the property, although the plaintiff claims the present market value thereof, the rule is that to determine due compensation for lands appropriated by the Government, the basis should be the price or value at the time that it was taken from the owner and appropriated by the Government." [7]

ANGEL MINISTERIO and ASUNCION SADAYA, petitioners, vs.THE COURT OF FIRST INSTANCE OF CEBU, Fourth Branch, Presided by the Honorable, Judge JOSE C. BORROMEO, THE PUBLIC HIGHWAY COMMISSIONER, and THE AUDITOR GENERAL, EN BANCG.R. No. L-31635 August 31, 1971respondents.

Petitioners as plaintiffs in a complaint filed with the Court of First Instance of Cebu, dated April 13, 1966, sought the payment of just compensation for a registered lot, containing an area of 1045 square meters, alleging that in 1927 the National Government through its authorized representatives took physical and material possession of it and used it for the widening of the Gorordo Avenue, a national road, Cebu City, without paying just compensation and without any agreement, either written or verbal. There was an allegation of repeated demands for the payment of its price or return of its possession, but defendants Public Highway Commissioner and the Auditor General refused to restore its possession. It was further alleged that on August 25, 1965, the appraisal committee of the City of Cebu approved Resolution No. 90, appraising the reasonable and just price of Lot No. 647-B at P50.00 per square meter or a total price of P52,250.00. Thereafter, the complaint was amended on June 30, 1966 in the sense that the remedy prayed for was in the alternative, either the restoration of possession or the payment of the just compensation.

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This is a case where a registered owner of a parcel of land has lost possession way back in 1925 because it was taken by a municipal corporation (Municipality of Pasay) for road purposes. It was never paid for, and so the ownership thereof remained in the name of the registered owner. No annotation on said title was made as to any right, say easement of right of way, which the City of Pasay might have acquired over the land. There is some doubt as to whether Estanislao Alfonso ever made demands for the payment of his property which was taken away from him without the benefit of either expropriation proceedings or a negotiated sale. However, there is reason to believe that Alfonso has made such demands as any owner of a valuable registered property would do, but as usually the case, perhaps the demands were either ignored or action thereon was postponed and perhaps forgotten with the charges of administration in Pasay that occurred since 1925 up to 1954 when Alfonso finally brought the present action to recover either the possession of the parcel or its value.

The present case finds it parallel in the recent case of Herrera vs. Auditor General, 102 Phil., 875, decided by this Tribunal on January 23, 1958, where a registered owner of land in Quezon City was deprived of its possession when it taken over by the city government for road purposes. The owner thereof made demands for the payment of his land, and although the City Attorney of Quezon City indorsed favorable action on the claim, however, the Auditor General rejected said claim on the ground of prescription. There, we held that registered lands are not subject to prescription,, and that on grounds of equity, the government should pay for private property which it appropriates, though for the benefit of the public, regardless of the passing of time. This Tribunal does not look with favor on the practice of the Government or any of its branches, of taking away property from a private landowner, especially a registered one, without going through the legal process of expropriation or a negotiated sale and paying for said property without delay. the private owner is usually at a great and distinct disadvantage. He has against him the whole Government, central or local, that has occupied and appropriated his property, summarily and arbitrarily, sometimes, if not more often, against his consent. There is no agreement as to its price or its rent. In the meantime, the landowner makes requests for payment, rent, or even some understanding, patiently waiting and hoping that the Government would soon get around to hearing and granting his claim. The officials concerned may promise to consider his claim and come to an agreement as to the amount and time for compensation, but with the not infrequent government delay and red tape, and with the change in administration, specially local, the claim is pigeon holed and forgotten and the papers lost, mislaid, or even destroyed as happened during the last war. And when finally losing patience and hope, he brings a court action and hires a lawyer to represent him in the vindication of his valid claim, he faces the government represented by no less than the Solicitor General or the Provincial Fiscal or City Attorney, who blandly and with self-assurance, invokes prescription. The litigation sometimes drags on for years. In our opinion, that is neither just nor fair. When a citizen, because of this practice loses faith in the government and its readiness and willingness to pay for what it gets and appropriates, in the future said citizen would not allow the Government to even enter his property unless condemnation proceedings are first initiated, and the value of the property, as provisionally ascertained by the Court, is deposited, subject to his disposal. This would mean delay and difficulty for the Government, but all of its own making.

In the case of Herrera vs. Auditor General, supra, we said:

Here before us is a case of a law abiding citizen and taxpayer who as far back as 1934, realizing the need of the Government of his lot for road purposes, instead of compelling said Government to resort to expropriation proceedings, readily and in all ingeniousness allowed the Government to immediately occupy it. In his implicit trust in his Government, he did not even bother to require it to make a judicial deposit of the approximate value of his land, not even to make an offer of a price it would pay for it. But since then, he has continuously asked for the payment of said fair price as a condition precedent to his conveyance and sale of the property. But the government neglected to make an offer, much less make payment, then evidently forgetting that it had also neglected to secure a conveyance of the property, so that Herrera, as already stated, is still the owner of the same. In other words, there has never been a sale by Herrera to the Government. To legalize its possession of the lot, the Government must buy it from Herrera and pay him reasonable compensation. The very Constitution enjoins it. As already said, the Government, through the City Engineer, has made an offer of an amount, not of the lot's value in the open market, but only of its assessed value, which as everyone knows, is usually much below its real value. Herrera either tired of waiting for payment, or in spirit of cooperation with this Government, agreed to the amount of said assessed value as the purchase price, and formally accepted the offer in 1955, and yet the same Government apparently ignoring all these facts and repudiating its offer, refuses to make and form a pretty and edifying spectacle which could be presented to the citizens and taxpayers for their contemplation and inspiration. The only bright spots in the otherwise somber picture are the attitude and actions taken by the District Engineer, the Quezon City Engineer, and the City Attorney, who after due investigation, upheld the valid claim of Herrera, and recommend that he be paid just compensation. There is nothing that can more speedily and effectively embitter a citizen and taxpayer against his Government and alienate his faith in it, than an injustice and unfair dealing like the present case.

In the present case, Alfonso up to now the owner of the land in question, Lot No. 4368 of the Cadastral Survey of Pasay, because being registered land, the City of Pasay or its predecessor, Municipality of Pasay, did not and could not acquire it thru prescription. As registered owner, he could bring an action to recover possession at any time because possession is one of the attributes of ownership of land. However, said restoration of possession by the City of Pasay is neither convenient nor feasible because it is now and has been used for road purposes. So, the only relief available is for the City of Pasay to make due compensation, which it could and should have done years ago since 1925.

As to the value of the property, although the plaintiff claims the present market value thereof, the rule is that to determine due compensation for lands appropriated by the Government, the basis should be the price or value at the time it was taken from the owner and appropriated by the Government. According to the stipulation of facts, the value of the land in 1925 was P1.25 per square meter. So, for the area of 719.92 square meters, the value will be said area multiplied by P1.25. Inasmuch as the City of Pasay has not been paying rent for the use of the land since 1925, thereby causing damages in favor of the owner, said damages may be assessed in the form of legal interest on the price since 1925, up to time when payment is made by the City of Pasay. In our opinion, the defendant city would also pay for attorney's fees which we fix in the amount of P400.00.

ESTANISLAO ALFONSO, plaintiff-appellant, vs.PASAY CITY, defendant-appellee.ENBANCG.R. No. L-12754   January 30, 1960

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The ably written brief of petitioner, represented by City Fiscal Aquilino P. Bonto, "emphasized that the land in dispute is now a public road (Quezon Avenue) making up one of the vital arteries of commerce and trade in Legaspi City. It is the principal outlet to and from the Pier Area where vessels both coastwise and unload their cargoes; from the Pier Area it leads to the market and the commercial sector of the City; and from various points it is the most convenient road to the Post Office, the frontage of which abuts the land in litigation. Ordering the petitioner to vacate the property would in effect cut off access to the areas of trade and commerce, thereby adversely affecting the economic potential of petitioner and its inhabitants. Generally the closing of the road would otherwise create serious inconvenience to vehicular pedestrian traffic to which Quezon Avenue has been devoted since 1947, or a period of seventeen years."⁶

Such a problem thus gives rise to a matter of public interest. Fortunately, it is not a new one in this jurisdiction. The appropriate solution was indicated in the leading case of Alfonso v. Pasay City where this Court, through Justice Montemayor, held: "In the present case, Alfonso remains up to now the owner of the land in question, Lot No. 4368 of the Cadastral Survey of Pasay, because being registered land, the City of Pasay or its predecessor, Municipality of Pasay, did not and could not acquire it thru prescription. As registered owner, he could bring an action to recover possession at any time because possession is one of the attributes of ownership of land. However, said restoration of possession by the City of Pasay is neither convenient nor feasible because it is now and has been used for road purposes. So, the only relief available is for the City of Pasay to make due compensation, which it could and should have done years ago since 1925."⁷

MUNICIPALITY (now CITY) OF LEGASPI, petitioner, vs.A. L. AMMEN TRANSPORTATION CO., INC., respondent.          EN BANC G.R. No. L-22377      November 29, 1968

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There is all the more reason to adhere to the Alfonso doctrine considering that when it was enunciated in 1960, this Court did not blaze a new trail but did travel a well-worn path. The Court of Appeals itself noted that as early as 1933 in Province of Rizal v. Araullo, there was the categorical pronouncement "that the owner shall receive the market value of this property at the time of the taking ... ." In 1954 came Republic v. Lara, ¹⁷ where there was a reiteration of the view that where the actual taking or occupation did precede the filing of the complaint for expropriation, it was the former date, not that of the filing of the proceeding that should be the basis for the determination of the amount to be awarded the owner as to the compensation due him. There being an apparent conflict between such a principle and the provision in the Rules of Court ¹⁸ as to the time that is decisive in ascertaining compensation due the owner, the then Justice, now Chief Justice, Concepcion, speaking for the Court in Republic v. Philippine National Bank, ¹⁹ clarified matters thus: "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 said possession, not of filing of the complaint, and that 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 3, directing that compensation 'be determined as of the date of the filing of the complaint,' would never be operative. As intimated in Republic v. Lara ..., said provision contemplates 'normal circumstances,' under which 'the complaint coincides or even precedes the taking of the property by the plaintiff.' In fact, the complaint, normally, precedes, and does not coincide with such taking of the property, for 'upon the filing of the complaint or at any time thereafter' plaintiff can not, over the defendant's objection — and the institution of the proceedings generally indicates an issue between the parties — take possession of said property without an order of the court fixing provisionally its value and without depositing the same (Rule 69, section 3, Rules of Court)." ²⁰ It is thus apparent how far the Court of Appeals was not at all mindful of what has so long and so consistently been announced by this Court.

3. Even if the question presented were novel, our conclusion would not be any different. With the expanding role of government, including all its branches and subdivisions, municipal corporations not excepted, reliance on the power of eminent domain far from diminishing will continue to manifest itself. This is an assertion confirmed by history. Outside of the aforesaid City of Manila v. Chinese Community of Manila, ²¹ there were only four other reported cases dealing with condemnation proceedings by local governments, ²² before World War II. It was not so after liberation. At least fifteen decisions have dealt with exercise of such power by such units. ²³ Nor is it to be wondered at. Things that were formerly of private concern have, under this era of fostering social and economic rights, assumed a public aspect. Such being the case, the entry of government, whether national or local, in such field cannot legitimately be resisted. What is more appropriate then than that an attribute inherent in government, whether national or local, of expropriation, like taxation and the police power, would be utilized. This is the more so, considering that it is now a well-settled doctrine that public use can be identified with public purpose, public interest and public convenience. ²⁴

It is of course to be expected that the procedural steps set forth in the Rules of Court will be strictly followed by municipal corporations. In the event however that such is not the case, as did happen in this instance, the Alfonso ruling certainly affords an equitable solution. The expropriation stands, and the owner as is the constitutional intent, is paid what he is entitled to according to the value of the property so devoted to public use as of the date of the taking. From that time, he had been deprived thereof. He had no choice but to submit. He is not, however, to be despoiled of such a right. No less than the fundamental law guarantees just compensation. It would be an injustice to him certainly if from such a period, he could not recover the value of what was lost. There could be on the other hand, injustice to the expropriator if by a delay in the collection, the increment in price would accrue to the owner. The doctrine to which this Court has been committed is intended precisely to avoid either contingency fraught with unfairness. The Court of Appeals, as well as the lower court, should not have decided then the case as they did. There can be no affirmance of what was done.

WHEREFORE, the decision of the Court of Appeals of December 23, 1966 is reversed and a new judgment entered awarding respondent-spouses Felicidad Baltazar and Vicente Gan, the amount due them computed as of the time of the taking, with legal interest from said date until the sum is paid in full by petitioner, now La Carlota City. The case is remanded to the Court of First Instance of Negros Occidental for the fixing of such money judgment in accordance with this decision. Without pronouncement as to costs.

MUNICIPALITY OF LA CARLOTA, petitioner, vs.THE SPOUSES FELICIDAD BALTAZAR AND VICENTE GAN, respondents EN BANC G.R. No. L-30138 May 30, 1972

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Considering that no annotation in favor of the government appears at the back of her certificate of title and that she has not executed any deed of conveyance of any portion of her lot to the government, the appellant remains the owner of the whole lot. As registered owner, she could bring an action to recover possession of the portion of land in question at anytime because possession is one of the attributes of ownership. However, since restoration of possession of said portion by the government is neither convenient nor feasible at this time because it is now and has been used for road purposes, the only relief available is for the government to make due compensation which it could and should have done years ago. To determine the due compensation for the land, the basis should be the price or value thereof at the time of the taking. ²

As regards the claim for damages, the plaintiff is entitled thereto in the form of legal interest on the price of the land from the time it was taken up to the time that payment is made by the government. ³ In addition, the government should pay for attorney's fees, the amount of which should be fixed by the trial court after hearing.

VICTORIA AMIGABLE, plaintiff-appellant, vs.NICOLAS CUENCA, as Commissioner of Public Highways and REPUBLIC OF THE PHILIPPINES, defendants-appellees. EN BANC G.R. No. L-26400 February 29, 1972

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Section 46 of the Land Registration Law, now section 47 of the Property Registration Decree (PD No. 1529 effective June 11, 1978), provides that "no title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession" (Corporacion de PP. Agustinos Recoletos vs. Crisostomo, 32 Phil. 427, 439; Estella vs. Register of Deeds of Rizal, 106 Phil. 911, 914; Santiago vs. J.M. Tuason & Co., Inc., 110 Phil. 16, 22; Manila Electric Co. and Sheriff of Quezon City vs. Enriquez and Espinosa, 110 Phil. 499, 504).

Prescription is unavailing not only against the registered owner but also against his hereditary successors because the latter merely step into the shoes of the decedent by operation of law and are merely the continuation of the personality of their predecessor-in-interest (Barcelona vs. Barcelona, 100 Phil. 251, 257).

As stated by Justice Johnson in the 1915 case of Legarda vs. Saleeby, 31 Phil. 590 the real purpose of the Torrens system is to quiet title to land and to stop forever any question as to its legality. "Once a title is registered, the owner may rest secure, without the necessity of waiting in the portals of the court, or sitting in the 'mirador de sucasa', to avoid the possibility of losing his land."

Thus, a registered owner of land who lost possession thereof in 1925, when it was taken by the municipality of Pasay for road purposes, is not barred from recovering compensation for said land in 1958 or 33 years later. The reason is that registered land are not subject to prescription. It was an error to dismiss the landowner's complaint on the ground of laches and prescription (Alfonso vs. Pasay City, 106 Phil. 1017; Herrera vs. Auditor General, 102 Phil. 875).

Adverse, notorious and continuous possession under a claim of ownership for the period fixed by law is ineffective against a Torrens title (Tuason vs. Bolaños, 95 Phil. 106; 111; Vda. de Recinto vs. Inciong, L-26083, May 31, 1977, 77 SCRA 196; J.M. Tuason & Co., Inc. vs. Court of Appeals, L-23480, September 11, 1979,93 SCRA 146).

Una posesion adversa, exclusiva, publica y continuada a titulo de dueno por el tiempo fijado por la ley es ineficaz contra un titulo Torrens. El titulo de propiedad expedido de acuerdo con la Ley del Registro de la Propiedad es imprescriptible. (Valiente vs. Court of First Instance, 80 Phil. 415, 417; J.M. Tuason & Co., Inc. vs. Macalindong, 116 Phil. 1227; J.M. Tuason & Co., Inc. vs. Santiago, 99 Phil. 615.)

Title to land can no longer be acquired by prescription after a Torrens title has been issued for it (Dimson vs. Rural Progress Administration, 90 Phil. 714, 717; Fernandez vs. Aboratigue, L-25313, December 28, 1970, 36 SCRA 476).

TEOFISTO, FELICISIMO and MAXIMO, all surnamed UMBAY and FILOMENA, FRANCISCO, SUSANA, CELERINA and JOSEFA, all surnamed ENANORIA, petitioners vs.PLACIDO ALECHA, NICOLASA LABAJO and INTERMEDIATE APPELLATE COURT, respondents. SECOND DIVISION G.R. No. L-67284 March 18, 1985

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 Owners whose properties were taken for public use are entitled to just compensation.

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In any event, we resolve the substantive issue on whether respondent Ortigas may not sell and may only donate its property to the government in accordance with Section 50 of Presidential Decree No. 1529.

Section 50 of Presidential Decree No. 1529 does not apply in a case that is the proper subject of an expropriation proceeding

Respondent Ortigas may sell its property to the government. It must be compensated because its property was taken and utilized for public road purposes.

Petitioner Republic of the Philippines insists that the subject property may not be conveyed to the government through modes other than by donation. It relies on Section 50 of the Property Registration Decree, which provides that delineated boundaries, streets, passageways, and waterways of a subdivided land may not be closed or disposed of by the owner except by donation to the government. It reads:

Section 50. Subdivision and consolidation plans. Any owner subdividing a tract of registered land into lots which do not constitute a subdivision project as defined and provided for under P.D. No. 957, shall file with the Commissioner of Land Registration or the Bureau of Lands a subdivision plan of such land on which all boundaries, streets, passageways and waterways, if any, shall be distinctly and accurately delineated.

If a subdivision plan, be it simple or complex, duly approved by the Commissioner of Land Registration or the Bureau of Lands together with the approved technical descriptions and the corresponding owner’s duplicate certificate of title is presented for registration, the Register of Deeds shall, without requiring further court approval of said plan, register the same in accordance with the provisions of the Land Registration Act, as amended: Provided, however, that the Register of Deeds shall annotate on the new certificate of title covering the street, passageway or open space, a memorandum to the effect that except by way of donation in favor of the national government, province, city or municipality, no portion of any street, passageway, waterway or open space so delineated on the plan shall be closed or otherwise disposed of by the registered owner without the approval of the Court of First Instance of the province or city in which the land is situated. (Emphasis supplied)

Petitioner Republic of the Philippines’ reliance on Section 50 of the Property Registration Decree is erroneous. Section 50 contemplates roads and streets in a subdivided property, not public thoroughfares built on a private property that was taken from an owner for public purpose. A public thoroughfare is not a subdivision road or street.

More importantly, when there is taking of private property for some public purpose, the owner of the property taken is entitled to be compensated.48

There is taking when the following elements are present:

1. The government must enter the private property;

2. The entrance into the private property must be indefinite or permanent;

3. There is color of legal authority in the entry into the property;

4. The property is devoted to public use or purpose;

5. The use of property for public use removed from the owner all beneficial enjoyment of the property.49

All of the above elements are present in this case. Petitioner Republic of the Philippines’ construction of a road — a permanent structure — on respondent Ortigas’ property for the use of the general public is an obvious permanent entry on petitioner Republic of the Philippines’ part. Given that the road was constructed for general public use stamps it with public character, and coursing the entry through the Department of Public Works and Highways gives it a color of legal authority.

As a result of petitioner Republic of the Philippines’ entry, respondent Ortigas may not enjoy the property as it did before. It may not anymore use the property for whatever legal purpose it may desire. Neither may it occupy, sell, lease, and receive its proceeds. It cannot anymore prevent other persons from entering or using the property. In other words, respondent Ortigas was effectively deprived of all the bundle of rights50 attached to ownership of property.

It is true that the lot reserved for road widening, together with five other lots, formed part of a bigger property before it was subdivided. However, this does not mean that all lots delineated as roads and streets form part of subdivision roads and streets that are subject to Section 50 of the Property Registration Decree. Subdivision roads and streets are constructed primarily for the benefit of the owners of the surrounding properties. They are, thus, constructed primarily for private use — as opposed to delineated road lots taken at the instance of the government for the use and benefit of the general public.

In this case, the lot was reserved for road widening at the instance of petitioner Republic of the Philippines. While the lot segregated for road widening used to be part of the subdivided lots, the intention to separate it from the delineated subdivision streets was obvious from the fact that it was located at the fringes of the original lot51 — exactly at petitioner Republic of the Philippines’ intended location for the road widening project. Moreover, petitioner Republic of the Philippines’ intention to take the property for public use was obvious from the completion of the road widening for the C-5 flyover project and from the fact that the general public was already taking advantage of the thoroughfare.

Delineated roads and streets, whether part of a subdivision or segregated for public use, remain private and will remain as such until conveyed to the government by donation or through expropriation proceedings.52 An owner may not be forced to donate his or her property even if it has been delineated as road lots because that would partake of an illegal taking.53 He or she may even choose to retain said properties.54 If he or she chooses to retain them, however, he or she also retains the burden of maintaining them and paying for real estate taxes.

An owner of a subdivision street which was not taken by the government for public use would retain such burden even if he or she would no longer derive any commercial value from said street. To remedy such burden, he or she may opt to donate it to the government. In such case, however, the owner may not force the government to purchase the property. That would be tantamount to allowing the government to take private property to benefit private individuals. This is not allowed under the Constitution, which requires that taking must be for public use.55

Further, since the Constitution proscribes taking of private property without just compensation,56 any taking must entail a corresponding appropriation for that purpose. Public funds, however, may only be appropriated for public purpose.57 Employment of public funds to benefit a private individual constitutes malversation.58 Therefore, private subdivision streets not taken for public use may only be donated to the government.

In contrast, when the road or street was delineated upon government request and taken for public use, as in this case, the government has no choice but to compensate the owner for his or her sacrifice, lest it violates the constitutional provision against taking without just compensation, thus:

Section 9. Private property shall not be taken for public use without just compensation.59

As with all laws, Section 50 of the Property Registration Decree cannot be interpreted to mean a license on the part of the government to disregard constitutionally guaranteed rights.

The right to compensation under Article III, Section 9 of the Constitution was put in place to protect the individual from and restrain the State’s sovereign power of eminent domain,60 which is the government’s power to condemn private properties within its territory for public use or purpose.61 This power is inherent and need not be granted by law.62 Thus, while the government’s power to take for public purpose is inherent, immense, and broad in scope, it is delimited by the right of an individual to be compensated. In a nutshell, the government may take, but it must pay.

Respondent Ortigas, immediately upon the government’s suggestion that it needed a portion of its property for road purposes, went so far as to go through the process of annotating on its own title that the property was reserved for road purposes. Without question, respondent Ortigas allowed the government to construct the road and occupy the property when it could have compelled the government to resort to expropriation proceedings and ensure that it would be compensated. Now, the property is being utilized, not for the benefit of respondent Ortigas as a private entity but by the public. Respondent Ortigas remains uncompensated. Instead of acknowledging respondent Ortigas’ obliging attitude, however, petitioner Republic of the Philippines refuses to pay, telling instead that the property must be given to it at no cost. This is unfair.

In the parallel case of Alfonso v. Pasay City63 wherein Alfonso was deprived of his property for road purposes, was uncompensated, and was left without any expropriation proceeding undertaken, this court said:

When a citizen, because of this practice loses faith in the government and its readiness and willingness to pay for what it gets and appropriates, in the future said citizen would not allow the Government to even enter his property unless condemnation proceedings are first initiated, and the value of the property, as provisionally ascertained by the Court, is deposited, subject to his disposal. This would mean delay and difficulty for the Government, but all of its own making.64

"There is nothing that can more speedily and effectively embitter a citizen and taxpayer against his Government and alienate his faith in it, than an injustice and unfair dealing like the present case."65

Title to the subject lot remains under respondent Ortigas’ name. The government is already in possession of the property but is yet to acquire title to it. To legitimize such possession, petitioner Republic of the Philippines must acquire the property from respondent Ortigas by instituting expropriation proceedings or through negotiated sale, which has already been recognized in law as a mode of government acquisition of private property for public purpose.66

In a negotiated sale, the government offers to acquire for public purpose a private property, and the owner may accept or reject it. A rejection of the offer, however, would most likely merely result in the commencement of an expropriation proceeding that would eventually transfer title to the government. Hence, the government's offer to acquire for public purpose a private property may be considered as an act preparatory to an expropriation proceeding. Therefore, a private owner's initiative to segregate a property to accommodate government needs saves the government from a long and arduous expropriation proceeding. This is a commendable act on the part of the owner. It must be encouraged, not dampened by threats of property deprivation without compensation.

Respondent Ortigas, which merely accommodated petitioner Republic of the Philippines' request, remains uncompensated for the taking of its property. Respondent Ortigas could have brought action to recover possession of the property, but it instead chose to sell its property to petitioner Republic of the Philippines. This is both fair and convenient as the road construction had long been completed, and the road is already being utilized by the public.

Taking of private property without just compensation is a violation of a person's property right. In situations where the government does not take the trouble of initiating an expropriation proceeding, the private owner has the option to compel payment of the property taken, when justified. The trial court should continue to proceed with this case to determine just compensation in accordance with law.

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In a long line of cases, we have consistently ruled that where actual taking is made without the benefit of expropriation proceedings and the owner seeks recovery of the possession of the property prior to the filing of expropriation proceedings, it is the value of the property at the time of taking that is controlling for purposes of compensation.⁸ As pointed out in Republic v. Lara,⁹ the reason for this rule is:

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."

Thus, the value of petitioners’ property must be ascertained as of 1960 when it was actually taken. It is as of that time that the real measure of their loss may fairly be adjudged. The value, once fixed, shall earn interest at the legal rate until full payment is effected, conformably with other principles laid down by case law

(MARIA PAZ V. NEPOMUCENO, joined by her husband, FERMIN A. NEPOMUCENO, Petitioners, vs.CITY OF SURIGAO and SALVADOR SERING in his capacity as City Mayor of Surigao, Respondents. .¹⁰FIRST DIVISION G.R. No. 146091, July 28, 2008)

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For this matter, in Alfonso vs. Pasay City, L-12754, January 30, 1960, where there was even no expropriation proceedings, this Court denied recovery of possession by the registered owner of a portion of a private lot taken by Pasay City and used for road purposes, and instead decreed payment of its market value at the time it was taken and appropriated. With more reason, therefore, applying the rule in expropriation proceedings, should the registered owners in this case be held entitled to get, not their lots, but their lots' fair market value.
As to the matter of rentals, the claim for the same cannot be sustained, in view of our rulings, penned by Justice J.B.L. Reyes, in the following two cases: In Republic vs. Lara, 96 Phil. 170, 184-185, this Court ruled that indemnity for rentals is inconsistent with the owner's right to be paid legal interest on the value of their properties from the time of their actual taking; for if the Government is to pay on the compensation due to the owners from the time of the actual taking of their property, the payment of such compensation is deemed to retroact to the actual taking of the property; and, hence, there is no basis for claiming rentals from the time of actual taking. And in Republic vs. Garcellano ¹² the rule was restated that in expropriation, the compensation for the use of the land after it is taken by the Government —

x x x must be, not in the form of rentals but by way of interest from the date that the company [or entity] exercising the right of eminent domain takes possession of the condemned lands, and the amounts granted by the court shall cease to earn interest only from the moment they are paid to the owners or deposited in court. ... .

FRANCISCA GALEOS-VALDEHUEZA, ANGEL VALDEHUEZA, JOSEFINA GALEOS-PANERIO, PABLO PANERIO and JOSE GALEOS, plaintiffs and appellants, vs.REPUBLIC OF THE PHILIPPINES AND/OR CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES, COMMANDING GENERAL, PHILIPPINE ARMY, COMMANDING GENERAL, 3RD MILITARY AREA and ADMINISTRATOR, CIVIL AERONAUTICS ADMINISTRATION, defendants and appellees. EN BANC G.R. No. L-21032    May 19, 1966

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The petitioner’s claim that, under Article 620 of the Civil Code, it had already acquired by prescription the easement of right-of-way over that portion of the subject property where its wooden electric posts and transmission lines were erected is untenable. Article 620 of the Civil Code provides that:

Art. 620. Continuous and apparent easements are acquired either by virtue of a title or by prescription of ten years.

Prescription as a mode of acquisition requires the existence of the following: (1) capacity to acquire by prescription; (2) a thing capable of acquisition by prescription; (3) possession of the thing under certain conditions; and (4) lapse of time provided by law.¹² Acquisitive prescription may either be ordinary, in which case the possession must be in good faith and with just title,¹³ or extraordinary, in which case there is neither good faith nor just title. In either case, there has to be possession which must be in the concept of an owner, public, peaceful and uninterrupted.¹⁴ As a corollary, Article 1119 of the Civil Code provides that:

Art. 1119. Acts of possessory character executed in virtue of license or by mere tolerance of the owner shall not be available for the purposes of possession.

In this case, the records clearly reveal that the petitioner’s possession of that portion of the subject property where it erected the wooden posts and transmission lines was merely upon the tolerance of the respondents. Accordingly, this permissive use by the petitioner of that portion of the subject property, no matter how long continued, will not create an easement of right-of-way by prescription. The case of Cuaycong vs. Benedicto¹⁵ is particularly instructive. In that case, the plaintiffs for more than twenty years made use of the road that passed through the hacienda owned by the defendants, being the only road that connected the plaintiff’s hacienda to the public road. The defendants closed the road in question and refused the use of the same unless a toll was paid. The plaintiffs therein brought an action to enjoin the defendants from interfering with the use of the road. In support of their action, the plaintiffs presented evidence tending to show that they have acquired the right-of-way through the road by prescription. This Court rejected the contention, holding as follows:

Had it been shown that the road had been maintained at the public expense, with the acquiescence of the owners of the estates crossed by it, this would indicate such adverse possession by the government as in course of time would ripen into title or warrant the presumption of a grant or of a dedication. But in this case there is no such evidence, and the claims of plaintiffs, whether regarded as members of the public asserting a right to use the road as such, or as persons claiming a private easement of way over the land of another must be regarded as resting upon the mere fact of user.

If the owner of a tract of land, to accommodate his neighbors or the public in general, permits them to cross his property, it is reasonable to suppose that it is not his intention, in so doing, to divest himself of the ownership of the land so used, or to establish an easement upon it, and that the persons to whom such permission, tacit or express, is granted, do not regard their privilege of use as being based upon anything more than the mere tolerance of the owner. Clearly, such permissive use is in its inception based upon an essentially revocable license. If the use continues for a long period of time, no change being made in the relations of the parties by any express or implied agreement, does the owner of the property affected lose his right of revocation? Or, putting the same question in another form, does the mere permissive use ripen into title by prescription?

It is a fundamental principle of the law in this jurisdiction concerning the possession of real property that such possession is not affected by acts of a possessory character which are "merely tolerated" by the possessor, which are or due to his license (Civil Code, arts. 444 and 1942). This principle is applicable not only with respect to the prescription of the dominium as a whole, but to the prescription of right in rem. In the case of Cortes vs. Palanca Yu-Tibo (2 Phil. Rep., 24, 38), the Court said:

The provision of article 1942 of the Civil Code to the effect that acts which are merely tolerated produce no effect with respect to possession is applicable as much to the prescription of real rights as to the prescription of the fee, it being a glaring and self-evident error to affirm the contrary, as does the appellant in his motion papers. Possession is the fundamental basis of prescription. Without it no kind of prescription is possible, not even the extraordinary. Consequently, if acts of mere tolerance produce no effect with respect to possession, as that article provides, in conformity with article 444 of the same Code, it is evident that they can produce no effect with respect to prescription, whether ordinary or extraordinary. This is true whether the prescriptive acquisition be of a fee or of real rights, for the same reason holds in one and the other case; that is, that there has been no true possession in the legal sense of the word. (Citations omitted)

Possession, under the Civil Code, to constitute the foundation of a prescriptive right, must be possession under claim of title (en concepto de dueño), or to use the common law equivalent of the term, it must be adverse. Acts of possessory character performed by one who holds by mere tolerance of the owner are clearly not en concepto de dueño, and such possessory acts, no matter how long so continued, do not start the running of the period of prescription.¹⁶

Following the foregoing disquisition, the petitioner’s claim that it had acquired the easement of right-of-way by prescription must perforce fail. As intimated above, possession is the fundamental basis of prescription, whether ordinary or extraordinary. The petitioner never acquired the requisite possession in this case. Its use of that portion of the subject property where it erected the wooden poles and transmission lines was due merely to the tacit license and tolerance of the respondents. As such, it cannot be made the basis of the acquisition of an easement of right-of-way by prescription.

(NATIONAL POWER CORPORATION, petitioner, vs.SPS. JOSE C. CAMPOS, JR. and MA. CLARA LOPEZ-CAMPOS, res SECOND DIVISION G.R. No. 143643  ,June 27, 2003)

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The First Issue: Date of Taking or Date of Suit?

The general rule in determining "just compensation" in eminent domain is the value of the property as of the date of the filing of complaint, as follows ¹²:

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 the payment of just compensation to, be determined as of the date of the filing of the complaint. . . . (Emphasis supplied).

Normally, the time of the taking coincides with the filing of the complaint for expropriation. Hence, many rulings of this Court have equated just compensation with the value of the property as of the time of filing of the complaint consistent with the above provision of the Rules. So too, where the institution of the action precedes entry into the property, the just compensation is to be ascertained as of the time of the filing of the complaint. ¹³
The general rule, however, admits of an exception where this Court fixed the value of the property as of the date, it was taken and not at the date of the commencement of the expropriation proceedings.
In the old case of Provincial Government of Rizal vs. Caro de
Araullo ¹⁴, the Court ruled that ". . . the owners of the land have no right to recover damages for this unearned increment resulting from the construction of the public improvement (lengthening of Taft Avenue from Manila to Pasay) for which the land was taken. To permit them to do so would be to allow them to recover more than the value of the land at the time when it was taken, which is the true measure of the damages, or just compensation, and would discourage the construction of important public improvements."
In subsequent cases ¹⁵ the Court, following the above doctrine, invariably held that the time of taking is the critical date in determining lawful or just compensation. Justifying this stance, Mr. Justice (later Chief Justice) Enrique Fernando, speaking for the Court in Municipality of La Carlota vs. The Spouses Felicidad Baltazar and Vicente Gan ¹⁶, said, ". . . the owner as is the constitutional intent, is paid what he is entitled to according to the value of the property so devoted to public use as of the date of the taking. From that time, he had been deprived thereof. He had no choice but to submit. He is not, however, to be despoiled of such a right. No less than the fundamental law guarantee's just compensation. It would be an injustice to him certainly if from such a period, he could not recover the value of what was lost. There could be on the other hand, injustice to the expropriator if by a delay in the collection, the increment in price would accrue to the owner. The doctrine to which this Court has been committed is intended precisely to avoid either contingency fraught with unfairness."
Simply stated, the exception finds application where the owner would be given undue incremental advantages arising from the use to which the government devotes the property expropriated — as for instance, the extension of a main thoroughfare as was the case in Caro de Araullo. In the instant case, however, it is difficult to conceive of how there could have been an extra-ordinary increase in the value of the owner's land arising from the expropriation, as indeed the records do not show any evidence that the valuation of P1,000.00 reached in 1992 was due to increments directly caused by petitioner's use of the land. Since the petitioner is claiming an exception to Rule 67, Section 4, ¹7 it has the burden of proving its claim that its occupancy and use — not ordinary inflation and increase in land values — was the direct cause of the increase in valuation from 1978 to 1992.

Side Issue: When is There, "Taking" of Property?

But there is yet another cogent reason why this petition should be denied and why the respondent Court should be sustained. An examination of the undisputed factual environment would show that the "taking" was not really made in 1973.
This Court has defined the elements of ''taking" as the main ingredient in the exercise of power of eminent domain, ¹⁸ in the following words:

A number of circumstances must be present in the "taking" of property for purposes of eminent domain: (1) the expropriator must enter a private property; (2) the entrance into private property must be for more than a momentary period; (3) the entry into the property should be under warrant or color of legal authority; (4) the property must be devoted to a public use or otherwise informally appropriated or injuriously affected; and (5) the utilization of the property for public use must be in such a way to oust the owner and deprive him of all beneficial enjoyment of the property. (Emphasis supplied)

In this case, the petitioner's entrance in 1978 was without intent to expropriate or was not made under warrant or color of legal authority, for it believed the property was public land covered by proclamation No. 1354. When the private respondent raised his claim of ownership sometime in 1979, the petitioner flatly refused the claim for compensation, nakedly insisted that the property was public land and wrongly justified its possession by alleging it had already paid "financial assistance" to Marawi City in exchange for the rights over the property. Only in 1990, after more than a decade of beneficial use, did the petitioner recognize private respondent's ownership and negotiate for the voluntary purchase of the property. A Deed of Sale with provisional payment and subject to negotiations for the correct price was then executed. Clearly, this is not the intent nor the expropriation contemplated by law. This is a simple attempt at a voluntary purchase and sale. Obviously, the petitioner neglected and/or refused to exercise the power of eminent domain.
Only in 1992, after the private respondent sued to recover possession and petitioner filed its Complaint to expropriate, did petitioner manifest its intention to exercise the power of eminent domain. Thus, the respondent Court correctly held: ¹⁹

If We decree that the fair market value of the land be determined as of 1978, then We would be sanctioning a deceptive scheme whereby NAPOCOR, for any reason other than for eminent domain would occupy another's property and when later pressed for payment, first negotiate for a low price and then conveniently expropriate the property when the landowner refuses to accept its offer claiming that the taking of the property for the purpose of eminent domain should be reckoned as of the date when it started to occupy the property and that the value of the property should be computed as of the date of the taking despite the increase in the meantime in the value of the property.

In Noble vs. City of Manila, ²⁰ the City entered into a lease-purchase agreement of a building constructed by the petitioner's predecessor-in-interest in accordance with the specifications of the former. The Court held that being bound by the said contract, the City could not expropriate the building. Expropriation could be reported to "only when it is made necessary by the opposition of the owner to the sale or by the lack of any agreement as to the price". Said the Court:

The contract, therefore, in so far as it refers to the purchase of the building, as we have interpreted it, is in force, not having been revoked by the parties or by judicial decision. This being the case, the city being bound to buy the building at an agreed price, under a valid and subsisting contract, and the plaintiff being agreeable to its sale, the expropriation thereof, as sought by the defendant, is baseless. Expropriation lies only when it is made necessary by the opposition of the owner to the sale or by the lack of any agreement as to the price. There being in the present case a valid and subsisting contract, between the owner of the building and the city, for the purchase thereof at an agreed price, there is no reason for the expropriation. (Emphasis supplied).

In the instant case, petitioner effectively repudiated the deed of sale it entered into with the private respondent when it passed Resolution No. 92-121 on May 25, 1992 authorizing its president to negotiate, inter alia, that payment" shall be effected only after Agus I HE project has been placed in operation". It was only then that petitioner's intent to expropriate became manifest as private respondent disagreed and, barely a month after, filed suit.

The Second Issue: Valuation

We now come to the issue of valuation.
The fair market value as held by the respondent Court, is the amount of P1,000.00 per square meter. In an expropriation case where the principal issue is the determination of just compensation, as is the case here, a trial before Commissioners is indispensable to allow the parties to present the evidence on the issue of just compensation. ²¹ Inasmuch as determination of just compensation in eminent domain cases is a judicial function ²² and factual findings of the Court of Appeals are conclusive on the parties and reviewable only when the case falls within the recognized exceptions ²³, which is not the situation obtaining in this petition, we see no reason to disturb the factual findings as to valuation of the subject property. As can be gleaned from the record, the court-and-the-parties-appointed commissioners did not abuse their authority in evaluating the evidence submitted to them nor misappreciate the clear preponderance of evidence. The amount fixed and agreed to by the respondent appellate Court is not grossly exorbitant. ²⁴ To quote: ²⁵

Commissioner Ali comes from the Office of the Register of Deeds who may well be considered an expert, with a general knowledge of the appraisal of real estate and the prevailing prices of land in the vicinity of the land in question so that his opinion on the valuation of the property cannot be lightly brushed aside.

The prevailing market value of the land is only one of the determinants used by the commissioners' report the others being as herein shown:

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Commissioner Doromal's report, recommending P300.00 per square meter, differs from the 2 commissioners only because his report was based on the valuation as of 1978 by the City Appraisal Committee as clarified by the latter's chairman in response to NAPOCOR's general counsel's query (id., pp. 128-129).

In sum, we agree with the Court of Appeals that petitioner has failed to show why it should be granted an exemption from the general rule in determining just compensation provided under Section 4 of Rule 67. On the contrary, private respondent has convinced us that, indeed, such general rule should in fact be observed in this case.
WHEREFORE, the petition is hereby DISMISSED and the judgment appealed from AFFIRMED, except as to the interest on the monthly rentals. which is hereby reduced from twelve percent to the legal rate of six percent (6%) per annum. Costs against the petitioner.

NATIONAL POWER CORPORATION, petitioner, vs.COURT OF APPEALS and MACAPANTON MANGONDATO, respondent THIRD DIVISION G.R. No. 113194 March 11, 1996

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[1]  Republic v. Castelvi, 157 Phil. 344 (1974).

[2]  Sy v. Local Government of Quezon City, G.R. No. 202690, June 5, 2013, 297 SCRA 622-623, 634; and Republic of the Philippines v. Sarabia, 505 Phil. 254, 262 (2005).

[3] Republic of the Philippines v. Legaspi, Sr., G.R. No. 177611, April 18, 2012, 670 SCRA 120-121, citing Municipality of Biñan v. Judge Garcia, 259 Phil. 1058, 1068-1069 (1989).

[4]  Bernas, J., THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES: A COMMENTARY, pp. 421-422 (2003 Ed.)

[5]  104 Phil. 443 (1958).

[6]  271 Phil. 1-8 (1991).

[7] Alfonso v. Pasay City, 106 Phil. 1017, 1022-1023 (1960).