PHILIPPINE JURISPRUDENCE - FULL TEXT The Lawphil Project - Arellano Law Fo n!

ation "#R# No# L-$%&'% (arch $)* )+,' C-((ISSI-NER -F PU.LIC Hl"H/A0S 12# FRANCISC- P# .UR"-S Republic of the Philippines

SUPRE(E C-URT
Manila

FIRST DIVISION

"#R# No# L-$%&'% (arch $)* )+,' C-((ISSI-NER -F PU.LIC Hl"H/A0S* petitioner, vs. H-N# FRANCISC- P# .UR"-S* in hi2 capacit3 a2 J !4e o5 the Co rt o5 Fir2t In2tance o5 Ce6 Cit3* .ranch ))* an! 7ictoria A8i4a6le* respondents. Quirico del Mar & Domingo Antiquera for respondent. Office of the Solicitor General for petitioner.

DE CASTR-* J.: Victoria !i"able is the o#ner of parcel of land situated in $ebu $it% #ith an area of &,'&( s)uare !eters. So!eti!e in '*+,, the -overn!ent too. this land for road/ri"ht/of/#a% purpose. The land had since beco!e streets .no#n as Man"o venue and -orordo venue in $ebu $it%. On Februar% &, '*0*, Victoria !i"able filed in the $ourt of First Instance of $ebu a co!plaint, #hich #as later a!ended on pril '(, '*0* to recover o#nership and possession of the land, and for da!a"es in the su! of P01,111.11 for the alle"ed ille"al occupation of the land b% the -overn!ent, !oral da!a"es in the su! of P+0,111.11, and attorne%2s fees in the su! of P0,111.11, plus costs of suit. The co!plaint #as doc.eted as $ivil $ase No. R/ 0*(( of the $ourt of First Instance of $ebu, entitled 3Victoria !i"able vs. Nicolas $uenca, in his capacit% as $o!!issioner of Public 4i"h#a% and Republic of the Philippines. ) In its ans#er, 9 the Republic alle"ed, a!on" others, that the land #as either donated or sold b% its o#ners to the province of $ebu to enhance its value, and that in an% case, the ri"ht of the o#ner, if an%, to recover the value of said propert% #as alread% barred b% estoppel and the statute of li!itations, defendants also invo.in" the non/suabilit% of the -overn!ent. In a decision rendered on 5ul% +*, '*0* b% 5ud"e !ador 6. -o!e7, the plaintiff2s co!plaint #as dis!issed on the "rounds relied upon b% the defendants

therein. $ The plaintiff appealed the decision to the Supre!e $ourt #here it #as reversed, and the case #as re!anded to the court of ori"in for the deter!ination of the co!pensation to be paid the plaintiff/appellant as o#ner of the land, includin" attorne%2s fees. : The Supre!e $ourt decision also directed that to deter!ine 8ust co!pensation for the land, the basis should be the price or value thereof at the ti!e of the ta.in". ; In the hearin" held pursuant to the decision of the Supre!e $ourt, the -overn!ent proved the value of the propert% at the ti!e of the ta.in" thereof in '*+, #ith certified copies, issued b% the 9ureau of Records Mana"e!ent, of deeds of conve%ance e:ecuted in '*+, or thereabouts, of several parcels of land in the 9anilad Friar ;ands in #hich the propert% in )uestion is located, sho#in" the price to be at P+.<( per s)uare !eter. For her part, Victoria !i"able presented ne#spaper clippin"s of the Manila Ti!es sho#in" the value of the peso to the dollar obtainin" about the !iddle of '*(+, #hich #as P&.((0 to a dollar. =pon consideration of the evidence presented b% both parties, the court #hich is no# the public respondent in the instant petition, rendered 8ud"!ent on 5anuar% *, '*(< directin" the Republic of the Philippines to pa% Victoria !i"able the su! of P,*,,0*.<, as the value of the propert% ta.en, plus P',0,,'1.,, representin" interest at &> on the principal a!ount of P,*,,0*.<, fro! the %ear '*+, up to the date of the decision, plus attorne%2s fees of '1> of the total a!ount due to Victoria !i"able, or a "rand total of P+',,<0&.(0. % The aforesaid decision of the respondent court is no# the sub8ect of the present petition for revie# b% certiorari, filed b% the Solicitor -eneral as counsel of the petitioner, Republic of the Philippines, a"ainst the lando#ner, Victoria !i"able, as private respondent. The petition #as "iven due course after respondents had filed their co!!ent thereto, as re)uired. The Solicitor -eneral, as counsel of petitioner, #as then re)uired to file petitioner2s brief and to serve copies thereof to the adverse parties. & Petitioner2s brief #as dul% filed on 5anuar% +*, '*(,, , to #hich respondents filed onl% a 3co!!ent.3 + instead of a brief, and the case #as then considered sub!itted for decision. )' '. The issue of #hether or not the provision of rticle '+01 of the Ne# $ivil $ode is applicable in deter!inin" the a!ount of co!pensation to be paid to respondent Victoria !i"able for the propert% ta.en is raised because the respondent court applied said rticle b% considerin" the value of the peso to the dollar at the ti!e of hearin", in deter!inin" due co!pensation to be paid for the propert% ta.en. The Solicitor -eneral contends that in so doin", the respondent court violated the order of this $ourt, in its decision in -.R. No. ;/+&,11, Februar% +*, '*(+, to !a.e as basis of the deter!ination of 8ust co!pensation the price or value of the land at the ti!e of the ta.in".

It is to be noted that respondent 8ud"e did consider the value of the propert% at the ti!e of the ta.in", #hich as proven b% the petitioner #as P+.<( per s)uare !eter in '*+,. 4o#ever, appl%in" rticle '+01 of the Ne# $ivil $ode, and considerin" that the value of the peso to the dollar durin" the hearin" in '*(+ #as P&.((0 to a dollar, as proven b% the evidence of the private respondent Victoria !i"able the $ourt fi:ed the value of the propert% at the deflated value of the peso in relation, to the dollar, and ca!e up #ith the su! of P,*,,0*.<, as the 8ust co!pensation to be paid b% the -overn!ent. To this action of the respondent 8ud"e, the Solicitor -eneral has ta.en e:ception. rticle '+01 of the Ne# $ivil $ode see!s to be the onl% provision in our statutes #hich provides for pa%!ent of an obli"ation in an a!ount different fro! #hat has been a"reed upon b% the parties because of the supervention of e:tra/ordinar% inflation or deflation. Thus, the rticle provides?
RT. '+01. In case e:tra/ordinar% inflation or deflation of the currenc% stipulated should supervene, the value of the currenc% at the ti!e of the establish!ent of the obli"ation shall be the basis of pa%!ent, unless there is an a"ree!ent to the contrar%.

It is clear that the fore"oin" provision applies onl% to cases #here a contract or a"ree!ent is involved. It does not appl% #here the obli"ation to pa% arises fro! la#, independent of contract. The ta.in" of private propert% b% the -overn!ent in the e:ercise of its po#er of e!inent do!ain does not "ive rise to a contractual obli"ation. @e have e:pressed this vie# in the case of Velasco vs. Manila Electric o.! et al.! ;/'*<*1, Dece!ber +*, '*('. )) Moreover, the la# as )uoted, clearl% provides that the value of the currenc% at the ti!e of the establish!ent of the obli"ation shall be the basis of pa%!ent #hich, in cases of e:propriation, #ould be the value of the peso at the ti!e of the ta.in" of the propert% #hen the obli"ation of the -overn!ent to pa% arises. )9 It is onl% #hen there is an 3a"ree!ent to the contrar%3 that the e:traordinar% inflation #ill !a.e the value of the currenc% at the ti!e of pa%!ent, not at the ti!e of the establish!ent of the obli"ation, the basis for pa%!ent. In other #ords, an a"ree!ent is needed for the effects of an e:traordinar% inflation to be ta.en into account to alter the value of the currenc% at the ti!e of the establish!ent of the obli"ation #hich, as a rule, is al#a%s the deter!inative ele!ent, to be varied b% a"ree!ent that #ould find reason onl% in the supervention of e:traordinar% inflation or deflation. @e hold, therefore, that under the la#, in the absence of an% a"ree!ent to the contrar%, even assu!in" that there has been an e:traordinar% inflation #ithin the !eanin" of rticle '+01 of the Ne# $ivil $ode, a fact @e decline to declare cate"oricall%, the value of the peso at the ti!e of the establish!ent of the obli"ation, #hich in the instant case is #hen the propert% #as ta.en possession of b% the -overn!ent, !ust be considered for the purpose of deter!inin" 8ust co!pensation. Obviousl%, there can be no 3a"ree!ent to the contrar%3 to spea.

of because the obli"ation of the -overn!ent sou"ht to be enforced in the present action does not ori"inate fro! contract, but fro! la# #hich, "enerall% is not sub8ect to the #ill of the parties. nd there bein" no other le"al provision cited #hich #ould 8ustif% a departure fro! the rule that 8ust co!pensation is deter!ined on the basis of the value of the propert% at the ti!e of the ta.in" thereof in e:propriation b% the -overn!ent, the value of the propert% as it is #hen the -overn!ent too. possession of the land in )uestion, not the increased value resultin" fro! the passa"e of ti!e #hich invariabl% brin"s unearned incre!ent to landed properties, represents the true value to be paid as 8ust co!pensation for the propert% ta.en. )$ In the present case, the unusuall% lon" dela% of private respondent in brin"in" the present action/period of al!ost +0 %ears #hich a stricter application of the la# on estoppel and the statute of li!itations and prescription !a% have divested her of the ri"hts she see.s on this action over the propert% in )uestion, is an added circu!stance !ilitatin" a"ainst pa%!ent to her of an a!ount bi""er/!a% three/fold !ore than the value of the propert% as should have been paid at the ti!e of the ta.in". For confor!abl% to the rule that one should ta.e "ood care of his o#n concern, private respondent should have co!!enced proper action soon after she had been deprived of her ri"ht of o#nership and possession over the land, a deprivation she .ne# #as per!anent in character, for the land #as intended for, and had beco!e, avenues in the $it% of $ebu. penalt% is al#a%s visited upon one for his inaction, ne"lect or laches in the assertion of his ri"hts alle"edl% #ithheld fro! hi!, or other#ise trans"ressed upon b% another. Fro! #hat has been said, the correct a!ount of co!pensation due private respondent for the ta.in" of her land for a public purpose #ould be not P,*,,0*.<,, as fi:ed b% the respondent court, but onl% P',,&'0.(* at P+.<( per s)uare !eter, the actual value of the land of &,'&( s)uare !eters #hen it #as ta.en in '*+,. The interest in the su! of P',0,,'1.,, at the rate of &> fro! '*+, up to the ti!e respondent court rendered its decision, as #as a#arded b% the said court should accordin"l% be reduced. In Our decision in -.R. No. ;/+&,11, Februar% +*, '*(+, ): @e have said that Victoria !i"able is entitled to the le"al interest on the price of the land fro! the ti!e of the ta.in". This holdin" is ho#ever contested b% the Solicitor -eneral, citin" the case of "a#munda S. Digsan vs. Auditor General! et al.! ); alle"ed to have a si!ilar factual environ!ent and involvin" the sa!e issues, #here this $ourt declared that the interest at the le"al rate in favor of the lando#ner accrued not fro! the ta.in" of the propert% in '*+, but fro! pril +1, '*&' #hen the clai! for co!pensation #as filed #ith the uditor -eneral. @hether the rulin" in the case cited is still the prevailin" doctrine, #hat #as said in the decision of this $ourt in the abovecited case involvin" the sa!e on the instant !atter, has beco!e the 3la# of the case3, no !otion for its reconsideration havin" been filed b% the Solicitor -eneral before the decision beca!e final. ccordin"l%, the interest to be paid private respondent, Victoria !i"able, shall co!!ence fro!

'*+,, #hen the ta.in" of the propert% too. place, co!puted on the basis of P',,&'0.(*, the value of the land #hen ta.en in said %ear '*+,. +. On the a!ount of attorne%2s fees to be paid private respondent, about #hich the Solicitor -eneral has ne:t ta.en issue #ith the respondent court because the latter fi:ed the sa!e at P'*,,A&.*(, #hile in her co!plaint, respondent !i"able had as.ed for onl% P0,111.11, the a!ount as a#arded b% the respondent court, #ould be too e:horbitant based as it is, on the inflated value of the land. n attorne%2s fees of P0,111.11, #hich is the a!ount as.ed for b% private respondent herself in her co!plaint, #ould be reasonable. @46R6FOR6, the 8ud"!ent appealed fro! is hereb% reversed as to the basis in the deter!ination of the price of the land ta.en as 8ust co!pensation for its e:propriation, #hich should be the value of the land at the ti!e of the ta.in", in '*+,. ccordin"l%, the sa!e is hereb% fi:ed at P',,&'0.(* at P+.<( per s)uare !eter, #ith interest thereon at &> per annu!, fro! the ta.in" of the propert% in '*+,, to be also paid b% -overn!ent to private respondent, Victoria !i"able, until the a!ount due is full% paid, plus attorne%2s fees of P0,111.11. SO ORD6R6D. Ma$asiar! %ernande&! Guerrero and Melencio'(errera! )).! concur.

Separate -pinion2

TEEHAN<EE* Acting C.J., concurin"? I concur in the result, #ith the observation that the state!ents in the !ain opinion re the applicabilit% or non/applicabilit% of rticle '+01 of the $ivil $ode should be ta.en as o*iter dicta, since said article !a% not be invo.ed nor applied #ithout a proper declaration of e:traordinar% inflation or deflation of currenc% b% the co!petent authorities. The $ourt has thus set aside respondent 8ud"e2s raisin" of the a!ount of co!pensation for the land ta.en fro! P',,&'0.(* Bat P+.<( per s)uare !eterC as properl% deter!ined to be its value at the ti!e of its ta.in" in '*+, to P,*,,0*.<, purportedl% because of the deflated value of the peso in relation to the dollar. The ratio decidendi of the $ourt2s 8ud"!ent is that respondent is entitled to the value of the land at the ti!e of its ta.in" in '*+, #ith interest thereon at the le"al rate of si: B&>C percent per annu! B#hich for a period of 0& %ears since '*+, to the present a!ount to a total of <<&> interest on the principal dueC and reasonable attorne%2s fees of P0,111.11 in consonance

#ith the earlier decision of the $ourt in Victoria Amiga*le vs. uenca, ,< S$R <&1 BFebruar% +*, '*(+C #hich is the la# of the case. The 8ud"!ent at bar is !erel% an i!ple!entation of the said earlier decision #hich re!anded the case to the $ourt a )uo for deter!ination of the co!pensation to be paid b% the "overn!ent, includin" attorne%2s fees, #ith le"al interest on the deter!ined price or value of the land at the ti!e of its ta.in" in '*+, 3fro! the ti!e it #as ta.en up to the ti!e that pa%!ent s !ade b% the "overn!ent.3

Separate -pinion2 TEEHAN<EE* Acting C.J., concurin"? I concur in the result, #ith the observation that the state!ents in the !ain opinion re the applicabilit% or non/applicabilit% of rticle '+01 of the $ivil $ode should be ta.en as o*iter dicta, since said article !a% not be invo.ed nor applied #ithout a proper declaration of e:traordinar% inflation or deflation of currenc% b% the co!petent authorities. The $ourt has thus set aside respondent 8ud"e2s raisin" of the a!ount of co!pensation for the land ta.en fro! P',,&'0.(* Bat P+.<( per s)uare !eterC as properl% deter!ined to be its value at the ti!e of its ta.in" in '*+, to P,*,,0*.<, purportedl% because of the deflated value of the peso in relation to the dollar. The ratio decidendi of the $ourt2s 8ud"!ent is that respondent is entitled to the value of the land at the ti!e of its ta.in" in '*+, #ith interest thereon at the le"al rate of si: B&>C percent per annu! B#hich for a period of 0& %ears since '*+, to the present a!ount to a total of <<&> interest on the principal dueC and reasonable attorne%2s fees of P0,111.11 in consonance #ith the earlier decision of the $ourt in Victoria Amiga*le vs. uenca, ,< S$R <&1 BFebruar% +*, '*(+C #hich is the la# of the case. The 8ud"!ent at bar is !erel% an i!ple!entation of the said earlier decision #hich re!anded the case to the $ourt a )uo for deter!ination of the co!pensation to be paid b% the "overn!ent, includin" attorne%2s fees, #ith le"al interest on the deter!ined price or value of the land at the ti!e of its ta.in" in '*+, 3fro! the ti!e it #as ta.en up to the ti!e that pa%!ent s !ade b% the "overn!ent.