1. Hacienda Luisita, Inc.

(HLI), petitioner, versus Presidential Agrarian Reform Council

(PARC); Secretary Nasser Pangandaman of the Department of Agrarian Reform (DAR);
Alyansa ng mga Manggagawang Bukid ng Hacienda Luisita (AMBALA), Rene Galang,
Noel Mallari, and Julio Suniga and his Supervisory Group of the HLI and Windsor Andaya,
respondents.
2. SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS and
DISTRICT ENGINEER CELESTINO R. CONTRERAS, Petitioners, VERSUS SPOUSES
HERACLEO and RAMONA TECSON, Respondents.
3. PATRICIA I. TIONGSON VS NATIONAL HOUSING AUTHORITY (558 SCRA 56
(2008)
4. REPUBLIC OF THE PHILIPPINES THROUGH THE DEPARTMENT OF PUBLIC
WORKS AND HIGHWAYS, Petitioner, vs. COURT OF APPEALS and ROSARIO
RODRIGUEZ REYES, Respondents.
5. REPUBLIC OF THE PHILIPPINES THROUGH THE DEPARTMENT OF PUBLIC
WORKS AND HIGHWAYS, Petitioner, vs. COURT OF APPEALS and ROSARIO
RODRIGUEZ REYES, Respondents.
K. EMINENT DOMAIN
Hacienda Luisita, Inc. (HLI), petitioner, versus Presidential Agrarian Reform Council
(PARC); Secretary Nasser Pangandaman of the Department of Agrarian Reform (DAR);
Alyansa ng mga Manggagawang Bukid ng Hacienda Luisita (AMBALA), Rene Galang,
Noel Mallari, and Julio Suniga and his Supervisory Group of the HLI and Windsor Andaya,
respondents. (G.R. No. 171101)
FACTS:
On July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to dismiss the petition filed
by HLI and affirm with modifications the resolutions of the PARC revoking HLI’s Stock
Distribution Plan (SDP) and placing the subject lands in Hacienda Luisita under compulsory
coverage of the Comprehensive Agrarian Reform Program (CARP) of the government.
The Court however did not order outright land distribution. Voting 6-5, the Court noted that there
are operative facts that occurred in the interim and which the Court cannot validly ignore. Thus, the
Court declared that the revocation of the SDP must, by application of the operative fact principle,
give way to the right of the original 6,296 qualified farmworkers-beneficiaries (FWBs) to choose
whether they want to remain as HLI stockholders or [choose actual land distribution]. It thus
ordered the Department of Agrarian Reform (DAR) to “immediately schedule meetings with the
said 6,296 FWBs and explain to them the effects, consequences and legal or practical implications of
their choice, after which the FWBs will be asked to manifest, in secret voting, their choices in the
ballot, signing their signatures or placing their thumbmarks, as the case may be, over their printed
names.”
On November 22, 2011, the Court recalled and set aside the option to remain as
stockholders of HLI, while maintaining that all benefits received shall be respected with no
obligation to refund or return them.
On December 9, 2011, a Motion for Reconsideration/Clarification by private respondents Mallari,
Suniga, Supervisory Group of HLI, and Andaya (Mallari, et al.
On December 16, 2011, a Motion to Clarify and Reconsider Resolution of November 22, 2011 was
filed by HLI.
ISSUES:
A. Whether or not SC erred in determining just compensation by considering the date of taking as
November 21, 1989 when PARC approved the SDP (already revoked) since the Notice of Coverage
of January 2, 2006 may be considered as time FWBs owned and possess the agricultural lands of
Hacienda Luisita because it was the only time when the latter was placed under Compulsory
Acquisition in view of failure to perform their obligations under the SDP, or SDOA, when the
owner is ACTUALLY deprived or dispossessed of his property, and considering taking from
November 21, 1989 is a deprivation of landowner’s property WITHOUT due process of law; and
HLI is entitled to be paid interest on the just compensation.
B. Whether or not Just Compensation for the Homelots be given to FWBs as it does not form part
of the 4,915.75 hectares covered by the SDP, and hence, the value of these homelots should, with
the revocation of the SDP, be paid to Tadeco as the landowner.
HELD:
A.The Court stressed that “just compensation has been defined as the full and fair equivalent of the
property taken from its owner by the expropriator. The measure is not the takers gain, but the
owner’s loss. Hence, in determining just compensation, the price or value of the property at the time
it was taken from the owner and appropriated by the government shall be the basis. If the
government takes possession of the land before the institution of expropriation proceedings, the
value should be fixed as of the time of the taking of said possession, not of the filing of the
complaint.”
The SC, citing Land Bank of the Philippines v. Livioc, said that taking is when the landowner was
deprived of the use and benefit of his property, such as when the title is transferred to the Republic.
It also noted that taking also occurs when agricultural lands are voluntarily offered by a
landowner and approved by PARC for CARP coverage through the stock distribution scheme, as in
the case of HLI earlier decided. Thus, HLI submitting its SDP for approval is an acknowledgment
on its part that the agricultural lands of Hacienda Luisita are covered by CARP. However, the PARC
approval should be considered as the effective date of taking because it was only during that time
that the government officially confirmed the CARP coverage of these lands.
Accordingly, Stock distribution and compulsory acquisition are two modalities sharing the same end
goal of having a more equitable distribution of land ownership, without ignoring such right to just
compensation. Also, since it is only upon the approval of the SDP that the agricultural lands actually
came under CARP coverage, such approval operates and takes the place of a notice of coverage
ordinarily issued under compulsory acquisition.

What the SC found notable, however, is that the divestment by Tadeco of the agricultural lands of
Hacienda Luisita and the giving of the shares of stock for free is nothing but an enticement or
incentive for the FWBs to agree with the stock distribution option scheme and not further push for
land distribution. And the stubborn fact is that the “man days” scheme of HLI impelled the FWBs
to work in the hacienda in exchange for such shares of stock.

The Court ruled that taking only when the landowner is deprived of the use and benefit of his
property is not incompatible with the earlier conclusion that taking took place on November 21,
1989, and since even from the start, TADECO seemed to already favour Stock Distribution Scheme
when complying with the CARP when it organized the HLI as its spin-off corporation which
facilitated stock acquisition of FWBs. Tadeco assigned and conveyed 4,915.75 has to HLI the
agricultural lands of Hacienda Luisita. These agricultural lands constituted as the capital contribution
of the FWBs in HLI. This, in effect, deprived TADECO itself of the ownership over these lands
when it transferred the same to HLI.

When the agricultural lands of Hacienda Luisita were transferred by Tadeco to HLI in order to
comply with CARP through the stock distribution option scheme under PARC Resolution No. 89-
12-2 dated November 21, 1989, Tadeco was consequently dispossessed of the ownership of the
same.

Furthermore, adherence to the suggestion of HLI that the Notice of Coverage issued on January 2,
2006 should be considered as date of taking would in effect penalize the qualified FWBs twice for
acceding to the Stock Distribution Scheme, (1) depriving them of the agricultural lands they should
have gotten earlier, if it were not for this SDP and (2) making them pay higher amortization for the
agricultural lands that should have been given to them decades ago.

The SC maintained that, as it has in fact already ruled on its reckoning date, that is, November 21,
1989, the date of issuance of PARC Resolution No. 89-12-2, based on the above-mentioned
disquisitions.

On side note, the SC added that “even though the compensation due to HLI will still be
preliminarily determined by DAR and LBP, subject to review by the RTC acting as a SAC, the fact
that the reckoning point of taking is already fixed at a certain date should already hasten the
proceedings and not further cause undue hardship on the parties, especially the qualified FWBs.”

B. The court ruled in the negative. As reiterated in the earlier decision, the distribution of homelots
is required under RA 6657 only for corporations or business associations owning or operating farms
which opted for land distribution. Corporations are not obliged to provide for homelots.
Nonetheless, HLI undertook to subdivide and allocate for free and without charge among the
qualified family-beneficiaries 240 sq. m. of homelots to some, if not all of the qualified beneficiaries.
The Supreme Court, by a unanimous vote, resolved to maintain its ruling that the FWBs
shall retain ownership of the homelots given to them with no obligation to pay for the value of said
lots. Also, since the SDP was already revoked with finality in th earlier discussion of the decision, the
Court directs the government through the DAR to pay HLI the just compensation for said homelots
in consonance with Sec. 4, Article XIII of the 1987 Constitution that the taking of land for use in
the agrarian reform program is subject to the payment of just compensation.
The Motions of both parties were DENIED with qualification. The July 5, 2011, Decision
was modified by the November 21, 2011 Resolution which ordered the government, through the
DAR, to pay just compensation for the 240 sq. m. homelots distributed to FWBs. This
RESOLUTION is now declared FINAL and EXECUTORY.
SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS and
DISTRICT ENGINEER CELESTINO R. CONTRERAS, Petitioners, VERSUS SPOUSES
HERACLEO and RAMONA TECSON, Respondents.
PERALTA, J.:
2013 DECISION
FACTS:
Respondent spouses Heracleo and Ramona Tecson (respondents) are co-owners of a parcel of land
with an area of 7,268 square meters located in San Pablo, Malolos, Bulacan and covered by Transfer
Certificate of Title (TCT) No. T-43006of the Register of Deeds of Bulacan. Said parcel of land was
among the properties taken by the government sometime in 1940 without the owners consent and
without the necessary expropriation proceedings and used for the construction of the MacArthur
Highway.
In 1940, the Department of Public Works and Highways (DPWH) took respondents-movants'
subject property without the benefit of expropriation proceedings for the construction of the
MacArthur Highway. In a letter dated December 15, 1994,respondents-movants demanded the
payment of the fair market value of the subject parcel of land. Celestino R. Contreras (Contreras),
then District Engineer of the First Bulacan Engineering District of the DPWH, offered to pay for
the subject land at the rate of Seventy Centavos (P0.70) per square meter, per Resolution of the
Provincial Appraisal Committee (PAC) of Bulacan. Unsatisfied with the offer, respondents-movants
demanded the return of their property, or the payment of compensation at the current fair market
value. Hence, the complaint for recovery of possession with damages filed by respondents-movants.
Respondents-movants were able to obtain favorable decisions in the Regional Trial Court (RTC) and
the Court of Appeals (CA), with the subject property valued at One Thousand Five Hundred Pesos
(₱1,500.00) per square meter, with interest at six percent (6%) per annum. Aggrieved, petitioners
come before the Court assailing the CA decision.
ISSUE:
Whether or not the just compensation should be based on the value of the property at the time of
taking in 1940 and not at the time of payment?
HELD: Court of Appeals decision is modified.The instant case stemmed from an action for
recovery of possession with damages filed by respondents against petitioners. It, however, revolves
around the taking of the subject lot by petitioners for the construction of the MacArthur Highway.
There is taking when the expropriator enters private property not only for a momentary period but
for a permanent duration, or for the purpose of devoting the property to public use in such a
manner as to oust the owner and deprive him of all beneficial enjoyment thereof.
When a property is taken by the government for public use, jurisprudence clearly provides for the
remedies available to a landowner. The owner may recover his property if its return is feasible or, if
it is not, the aggrieved owner may demand payment of just compensation for the land taken.For
failure of respondents to question the lack of expropriation proceedings for a long period of time,
they are deemed to have waived and are estopped from assailing the power of the government to
expropriate or the public use for which the power was exercised. What is left to respondents is the
right of compensation.The trial and appellate courts found that respondents are entitled to
compensation. The only issue left for determination is the propriety of the amount awarded to
respondents.
Just compensation is "the fair value of the property as between one who receives, and one who
desires to sell, fixed at the time of the actual taking by the government." This rule holds true when
the property is taken before the filing of an expropriation suit, and even if it is the property owner
who brings the action for compensation.
The Court in the several cases was confronted with common factual circumstances where the
government took control and possession of the subject properties for public use without initiating
expropriation proceedings and without payment of just compensation, while the landowners failed
for a long period of time to question such government act and later instituted actions for recovery of
possession with damages. The Court thus determined the landowners right to the payment of just
compensation and, more importantly, the amount of just compensation. The Court has uniformly
ruled that just compensation is the value of the property at the time of taking that is controlling for
purposes of compensation As in said cases, just compensation due respondents in this case should,
therefore, be fixed not as of the time of payment but at the time of taking, that is, in 1940.
The reason for the rule has been clearly explained in Republic v. Lara, et al.,and repeatedly held by
the Court in recent cases, thus:
"The value of the property should be fixed as of the date when it was taken and not the date of the
filing of the proceedings." For where property is taken ahead of the filing of the condemnation
proceedings, the value thereof may be enhanced by the public purpose for which it is taken; the
entry by the plaintiff upon the property may have depreciated its value thereby; or, there may have
been a natural increase in the value of the property from the time it is taken to the time the
complaint is filed, due to general economic conditions. The owner of private property should be
compensated only for what he actually loses; it is not intended that his compensation shall extend
beyond his loss or injury. And what he loses is only the actual value of his property at the time it is
taken.
Both the RTC and the CA recognized that the fair market value of the subject property in 1940
wasP0.70/sq m. Hence, it should, therefore, be used in determining the amount due respondents
instead of the higher value which isP1,500.00. While disparity in the above amounts is obvious and
may appear inequitable to respondents as they would be receiving such outdated valuation after a
very long period, it is equally true that they too are remiss in guarding against the cruel effects of
belated claim. The concept of just compensation does not imply fairness to the property owner
alone. Compensation must be just not only to the property owner, but also to the public which
ultimately bears the cost of expropriation.
Clearly, petitioners had been occupying the subject property for more than fifty years without the
benefit of expropriation proceedings. In taking respondents property without the benefit of
expropriation proceedings and without payment of just compensation, petitioners clearly acted in
utter disregard of respondents proprietary rights which cannot be countenanced by the Court.For
said illegal taking, respondents are entitled to adequate compensation in the form of actual or
compensatory damages which in this case should be the legal interest of six percent (6%) per annum
on the value of the land at the time of taking in 1940 until full payment. This is based on the
principle that interest runs as a matter of law and follows from the right of the landowner to be
placed in as good position as money can accomplish, as of the date of taking.
2015 DECISION
For resolution is the Motion for Reconsideration1 filed by respondents-movants spouses Heracleo
and Ramona Tecson imploring the Court to take a second look at its July 1, 2013 Decision, the
dispositive portion of which reads:
WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The Court of
Appeals Decision dated July 31, 2007 in CAG.R. CV No. 77997 is MODIFIED, in that the
valuation of the subject property owned by respondents shall be P0.70 instead of ₱1,500.00 per
square meter, with interest at six percent (6%) per annum from the date of taking in 1940 instead of
March 17, 1995, until full payment.
In view of the contrasting opinions of the members of the Third Division on the instant motion,
and the transcendental importance of the issue raised herein, the members of the Third Division
opted to refer the issue to the En Banc for resolution.
ISSUES:
Whether or not the taking of private property without due process should be nullified?
No. The government’s failure to initiate the necessary expropriation proceedings prior to actual
taking cannot simply invalidate the State’s exercise of its eminent domain power, given that the
property subject of expropriation is indubitably devoted for public use, and public policy imposes
upon the public utility the obligation to continue its services to the public. To hastily nullify said
expropriation in the guise of lack of due process would certainly diminish or weaken one of the
State’s inherent powers, the ultimate objective of which is to serve the greater good. Thus, the non-
filing of the case for expropriation will not necessarily lead to the return of the property to the
landowner. What is left to the landowner is the right of compensation.
While it may appear inequitable to the private owners to receive an outdated valuation, the long-
established rule is that the fair equivalent of a property should be computed not at the time of
payment, but at the time of taking. This is because the purpose of ‘just compensation’ is not to
reward the owner for the property taken but to compensate him for the loss thereof. The owner
should be compensated only for what he actually loses, and what he loses is the actual value of the
property at the time it is taken. The Court must adhere to the doctrine that its first and fundamental
duty is the application of the law according to its express terms, interpretation being called for only
when such literal application is impossible. To entertain other formula for computing just
compensation, contrary to those established by law and jurisprudence, would open varying
interpretation of economic policies – a matter which this Court has no competence to take
cognizance of. Equity and equitable principles only come into full play when a gap exists in the law
and jurisprudence.
Velasco Dissent:
The State’s power of eminent domain is not absolute; the Constitution is clear that no person shall
be deprived of life, liberty and property without due process of law. As such, failure of the
government to institute the necessary proceedings should lead to failure of taking an individual’s
property. In this case, since the property was already taken, the complainants must be equitably
compensated for the loss thereof.
For purposes of “just” compensation, the value of the land should be determined from the time the
property owners filed the initiatory complaint, earning interest therefrom. To hold otherwise would
validate the State’s act as one of expropriation in spite of procedural infirmities which, in turn,
would amount to unjust enrichment on its part. To continue condoning such acts would be licensing
the government to continue dispensing with constitutional requirements in taking private property.
PATRICIA I. TIONGSON VS NATIONAL HOUSING AUTHORITY (558 SCRA 56
(2008)
FACTS:
The present Petition for Review on Certiorari raises the question of from what date should just
compensation of the subject properties sought to be expropriated be reckoned - whether it is from
the taking of the property or on the filing of the complaint.
Respondent National Housing Authority (NHA) took possession in 1978, for purposes of
expropriation, of properties belonging to petitioners Patricia L. Tiongson, et al. pursuant to P.D.
Nos. 1669 and 1670. "An Act Providing for the Expropriation of the Property Known as the
'Tambunting Estate' Registered Under TCT Nos. 119059, 122450, 122459, 122452 And Lot Nos. 1-
A, 1-C, 1-D, 1-E, 1-F, 1-G And 1-H Of (LRC) PSD-230517 (Previously Covered By TCT No.
119058) of the Register of Deeds of Manila and for The Sale at Cost of the Lots Therein to the
Bona Fide Occupants and Other Squatters Families and to Upgrade the Same, and Authorizing the
Appropriation of Funds For The Purpose" (underscoring supplied), and of properties belonging to
Patricia Tiongson, et al. pursuant to P.D. No. 1670, "An Act Providing For The Expropriation of
the Property Along the Estero De Sunog-Apog Formerly Consisting of Lots Nos. 55-A, 55-B And
55-C, Block 2918 of the Subdivision Plan Psd-11746, Covered by TCT Nos. 49286, 49287 and
49288, Respectively, of the Register of Deeds of Manila and for The Sale at Cost of the Lots Therein
to the Bona Fide Occupants and Other Squatter Families and to Upgrade The Same, and
Authorizing The Appropriation of Funds For The Purpose". The two P.D.’s were thereafter
declared unconstitutional by the Supreme Court they being violative of the therein petitioners' right
to due process of law. On September 14, 1987, the NHA filed before the Regional Trial Court
(RTC) a complaint against Tiongson, et al. for expropriation of parcels of land which were covered
by P.D. Nos. 1669 and 1670.
The RTC held that the determination of just compensation of the properties should be reckoned
from the date of filing of NHA’s petition or on September 14, 1987. However, on appeal, the Court
of Appeals reversed and set aside the trial court’s orders and held that the just compensation should
be based on the actual taking of the property in 1978. Hence, this petition.
ISSUE:
Whether or not just compensation should be reckoned from the time of the taking of the property
or on the filing of the complaint
HELD:
In several aforementioned cases, in a situation where a government agency, in this case the National
Housing Authority, took possession of properties belonging to private individuals for purposes of
expropriation and the laws by virtue of which such government agency expropriated the subject
properties were subsequently declared to be unconstitutional by the Supreme Court, the
determination of just compensation should be reckoned from the date of filing the complaint for
expropriation and not from the time of actual taking of the properties.
In declaring, in its challenged Decision, that the determination of just compensation should be
reckoned from NHA’s taking of the properties in 1978, the appellate court simply relied on Annex
―C of NHA’s petition before it, the Order dated June 15, 1988 of the then Presiding Judge of the
trial court, and thus concluded that ―the parties admitted that [NHA] took possession of the subject
properties as early as 1978. The appellate court reached that conclusion, despite its recital of the
antecedents of the case including Tiongson, sustained moves, even before the trial court, in
maintaining that the reckoning of just compensation should be from the date of filing of the petition
for expropriation on September 14, 1987.
The earlier-quoted allegations of the body and prayer in NHA’s Petition for Expropriation filed
before the RTC constitute judicial admissions of NHA—that it possessed the subject properties
until this Court’s declaration, in its above-stated Decision in G.R. No. L-55166 promulgated on May
21, 1987, that P.D. No. 1669 pursuant to which NHA took possession of the properties of
petitioners in 1978 was unconstitutional and, therefore, null and void. These admissions, the
appellate court either unwittingly failed to consider or escaped its notice.
Following then Rule 67, Section 4 of the Rules of Court reading:
SEC. 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.

REPUBLIC OF THE PHILIPPINES THROUGH THE DEPARTMENT OF PUBLIC

WORKS AND HIGHWAYS, Petitioner, vs. COURT OF APPEALS and ROSARIO
RODRIGUEZ REYES, Respondents.
CARPIO, J.:
FACTS:
Private respondent Rosario Rodriguez Reyes is the absolute owner of a parcel of land identified as
Lot 849-B and covered by TCT No. T-7194. The 1,043-square meter lot is situated on Claro M.
Recto and Osmeña Streets, Cagayan de Oro City.
On 6 November 1990, private respondent received a letter from petitioner Republic of the
Philippines, through the Department of Public Works and Highways (DPWH), requesting
permission to enter into a portion of private respondent’s lot consisting of 663 square meters, and to
begin construction of the Osmeña Street extension road.
On 20 December 1990, petitioner took possession of private respondent’s property without
initiating expropriation proceedings. Consequently, on 4 and 7 January 1991, private respondent sent
letters to the DPWH stating her objection to the taking of her property. Private respondent sent a
letter to the City Appraisal Committee (CAC) rejecting the latter’s appraisal of the subject property.
In the same letter, private respondent requested the City Assessor for a reappraisal of her property,
but said request was denied.
On 17 March 1992 , private respondent filed with the Regional Trial Court (RTC) of Cagayan de
Oro City a complaint claiming just compensation and damages against petitioner.
On 30 June 1993, the RTC appointed three commissioners to determine the subject property’s fair
market value, as well as the consequential benefits and damages of its expropriation. The RTC
deemed it just, fair and reasonable to adopt the market value of FOUR THOUSAND PESOS
(₱4,000.00) per square meter as the highest price obtaining and prevailing in 1990, the time of the
taking of the property.
On 13 April 1994, the scheduled hearing was reset to 19 May 1994, to give private respondent
(plaintiff) time to consider the offer of petitioner (defendant) to amicably settle the case and to
accept the just compensation of ₱3,200 per square meter, or a total of ₱2,212,600, for the 663-
square meter portion of private respondent’s lot. On 16 May 1994, private respondent filed with the
RTC an "Urgent Motion to Deposit The Amount of ₱2,121,600 in Court. RTC ordered the
commissioners to submit their report as soon as possible, but until the scheduled hearing on 15 July
1994, the commissioners still failed to submit their report. Upon motion of private respondent, the
RTC issued an order appointing a new set of commissioners.
On 11 October 1994, the new commissioners submitted their report, the pertinent facts are as
follows:
Taking into consideration, among others, the location of the property and a research of the
prevailing prices of lots proximate to and/or near the vicinity of plaintiff's property, the undersigned
Commissioners respectfully recommend to the Honorable Court the following valuation, to wit:
1. Front portion along Recto Avenue with a measurement of 21.52 meters from south to north with
an area of 347.66 square meters at ₱18,000.00 to ₱20,000.00 per square meter;
2. Middle portion with a measurement of 21.52 meters containing an area of 347.66 square meters at
₱16,000.00 to ₱18,000.00 per square meter;

3. Rear/back portion measuring 21.52 meters with an area of 347.66 square meters at ₱14,000.00 to
₱16,000.00 per square meter;
On the other hand, the remaining portion left to the plaintiff, Lot No. 849-B-3 will not actually be
297 square meters. If we deduct the setback area from Osmeña Extension Street, the
usable/buildable area left to the plaintiff would only be a little over 50 square meters. This portion
would not command a good price if sold. Neither is it ideal for purposes of any building
construction because aside from its being a very small strip of land, the shape is triangular.
On 2 June 1995, the RTC rendered a decision in favor of the plaintiff and against the defendants,
declaring the former as having the right to retain 590 square meters of the property covered by TCT
No. T-7194, and ordering the latter to return 293 square meters of the 746 square meters taken.
Plaintiff herein is ordered to forthwith defray the expenses to be incurred in undertaking the road
construction of the 293 square meters which the defendants will later on provide along the right
portion of her property.
On appeal by petitioner, the Court of Appeals rendered judgment affirming with modifications the
decision of the RTC. The Court of Appeals found that the commissioners’ recommendations on just
compensation were not supported by valid documents. Also, it was unclear in the RTC decision
whether the trial court merely adopted the commissioners’ recommendations or the court made its
own independent valuation of the subject property. Thus, the Court of Appeals held that a
reconvening of the commissioners or an appointment of new commissioners to determine just
compensation was necessary. The appellate court further held that the trial court’s order for
petitioner’s return of the 293-square meter lot had no legal basis and was no longer feasible since the
lot was already part of the completed Sergio Osmeña extension road. Moreover, consequential
damages should be awarded in lieu of actual damages for private respondent’s alleged loss of income
from the remaining 297-square meter lot.
The case is remanded to the trial court which is ordered to reconvene the commissioners or appoint
new commissioners to determine, in accordance with this Decision, the amount of just
compensation due to plaintiff-appellee Rosario Rodriguez Reyes for the 746 square meters of land
taken from her and consequential damages to the 297-square meter portion left. Hence, this appeal.
ISSUES:
A. Whether the Court of Appeals erred in ordering the remand of the case to the trial court, to order
the reconvening of the commissioners or appointment of new commissioners to determine the
consequential damages for the remaining 297- square meter lot; and
B. Whether or not the Court erred in awarding consequential damages.
HELD:
A. On whether the Court of Appeals erred in ordering the remand of the case to the trial court to
order the reconvening of the commissioners or appointment of new commissioners to determine
the consequential damages for the remaining 297-square meter lot
Eminent domain is the authority and right of the State, as sovereign, to take private property for
public use upon observance of due process of law and payment ofjust compensation. The
Constitution provides that, "[p]rivate property shall not be taken for public use without just
compensation."
Just compensation is the full and fair equivalent of the property sought to be expropriated. Among
the factors to be considered in arriving at the fair market value of the property are the cost of
acquisition, the current value of like properties, its actual or potential uses, and in the particular case
of lands, their size, shape, location, and the tax declarations thereon. The measure is not the taker’s
gain but the owner’s loss. To be just, the compensation must be fair not only to the owner but also
to the taker.
Just compensation is based on the price or value of the property at the time it was taken from the
owner and appropriated by the government. However, if the government takes possession before
the institution of expropriation proceedings, the value should be fixed as of the time of the taking of
said possession, not of the filing of the complaint. The value at the time of the filing of the
complaint 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.
However, we held in Republic v. Court of Appeals that Rule 67 presupposes a prior filing of
complaint for eminent domain with the appropriate court by the expropriator. If no such complaint
is filed, the expropriator is considered to have violated procedural requirements, and hence, waived
the usual procedure prescribed in Rule 67, including the appointment of commissioners to ascertain
just compensation.
In National Power Corporation v. Court of Appeals, we clarified that when there is no action for
expropriation and the case involves only a complaint for damages or just compensation, the
provisions of the Rules of Court on ascertainment of just compensation (i.e., provisions of Rule 67)
are no longer applicable, and a trial before commissioners is dispensable.
In this case, petitioner took possession of the subject property without initiating expropriation
proceedings. Consequently, private respondent filed the instant case for just compensation and
damages. To determine just compensation, the trial court appointed three commissioners pursuant
to Section 5 of Rule 67 of the 1997 Rules of Civil Procedure. None of the parties objected to such
appointment.
The trial court’s appointment of commissioners in this particular case is not improper. The
appointment was done mainly to aid the trial court in determining just compensation, and it was not
opposed by the parties. Besides, the trial court is not bound by the commissioners’ recommended
valuation of the subject property. The court has the discretion on whether to adopt the
commissioners’ valuation or to substitute its own estimate of the value as gathered from the records.
However, we agree with the appellate court that the trial court’s decision is not clear as to its basis
for ascertaining just compensation. The trial court mentioned in its decision the valuations in the
reports of the City Appraisal Committee and of the commissioners appointed pursuant to Rule 67.
But whether the trial court considered these valuations in arriving at the just compensation, or the
court made its own independent valuation based on the records, was obscure in the decision. The
trial court simply gave the total amount of just compensation due to the property owner without
laying down its basis. Thus, there is no way to determine whether the adjudged just compensation is
based on competent evidence.
For this reason alone, a remand of the case to the trial court for proper determination of just
compensation is in order. In National Power Corporation v. Bongbong, we held that although the
determination of just compensation lies within the trial court’s discretion, it should not be done
arbitrarily or capriciously. The decision of the trial court must be based on all established rules,
correct legal principles, and competent evidence. The court is proscribed from basing its judgment
on speculations and surmises.
B. Petitioner contends that no consequential damages may be awarded as the remaining lot was "not
actually taken" by the DPWH, and to award consequential damages for the lot which was retained
by the owner is tantamount to unjust enrichment on the part of the latter. Petitioner’s contention is
unmeritorious.
No actual taking of the remaining portion of the real property is necessary to grant consequential
damages. If as a result of the expropriation made by petitioner, the remaining lot (i.e., the 297-square
meter lot) of private respondent suffers from an impairment or decrease in value, consequential
damages may be awarded to private respondent. On the other hand, if the expropriation results to
benefits to the remaining lot of private respondent, these consequential benefits36 may be deducted
from the awarded consequential damages, if any, or from the market value of the expropriated
property. We held in B.H. Berkenkotter & Co. v. Court of Appeals that:
To determine just compensation, the trial court should first ascertain the market value of the
property, to which should be added the consequential damages after deducting therefrom the
consequential benefits which may arise from the expropriation. If the consequential benefits exceed
the consequential damages, these items should be disregarded altogether as the basic value of the
property should be paid in every case.
Section 6 of Rule 67 of the Rules of Civil Procedure provides:
x x x The commissioners shall assess the consequential damages to the property not taken and
deduct from such consequential damages the consequential benefits to be derived by the owner
from the public use or purpose of the property taken, the operation of its franchise by the
corporation or the carrying on of the business of the corporation or person taking the property. But
in no case shall the consequential benefits assessed exceed the consequential damages assessed, or
the owner be deprived of the actual value of his property so taken.
An award of consequential damages for property not taken is not tantamount to unjust enrichment
of the property owner. There is unjust enrichment "when a person unjustly retains a benefit to the
loss of another, or when a person retains money or property of another against the fundamental
principles of justice, equity and good conscience."38 Article 22 of the Civil Code provides that
"[e]very person who through an act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the latter without just or legal ground, shall
return the same to him." The principle of unjust enrichment under Article 22 requires two
conditions: (1) that a person is benefited without a valid basis or justification, and (2) that such
benefit is derived at another’s expense or damage.39 There is no unjust enrichment when the person
who will benefit has a valid claim to such benefit. As stated, consequential damages are awarded if as
a result of the expropriation, the remaining property of the owner suffers from an impairment or
decrease in value. Thus, there is a valid basis for the grant of consequential damages to the property
owner, and no unjust enrichment can result therefrom.
NATIONAL POWER CORPORATION, Petitioner vs. APOLONIO V. MARASIGAN,
FRANCISCO V. MARASIGAN, LILIA V. MARASIGAN, BENITO V. MARASIGAN, JR.,
and ALICIA V. MARASIGAN, Respondents (November 20, 2017 Tijam J)
Facts: NPC filed an expropriation committee against Marasigan in order to construct Steel
Transmission Lines and Wooden electric poles. NPC sought an easement of right of way over the
subject properties. Based on the tax declaration which classified the properties as agricultural and
based on the BIR zoning valuations, NPC offered to pay Php 299,550.50
Marasigan did not object to the expropriation but opposed the classification since they allege that it
is classified as industrial, commercial, and residential since 1993. They then claim Php 47,064,400 for
the affected properties. As counterclaim, they also seek payment of consequential damages for the
areas in between the transmission lines (dangling portions). RTC issued an Expropriation order and
fixed the value of the properties at Php 47,064,400 which was deposited by NPC with Landbank.
RTC then issued a writ of possession in favor of NPC . An appraisal committee was formed by the
RTC for purposes of determining just compensation. A reverse trial thereafter ensued.
Marasigan presented the Chairman of the appraisal committee who testified that the appraisal
committee recommended the total valuation of PhP 49,064,400 based on the assessor's data and the
BIR zonal valuations as indicated on the 1997 tax declarations. Also presented was the succeeding
Chairman of the appraisal committee who testified that the properties suffered consequential
damages which the appraisal committee recommended to be computed at 50% of the BIR zonal
value per square meter or for a total amount of PhP 22,227,800.

On ocular inspection, the appraisal committee found that the existence of the transmission lines
hampered the properties' potential use such that while the areas before and after the transmission
lines could still be used, the areas it between could no longer be utilized. The appraisal committee
also noted that the transmission lines produced considerable noise making the area unsuitable for
residential purposes. NPC, presented its right-of-way officers whose testimonies sought to establish
that the lots being claimed by Marasigan as dangling areas were classified as agricultural under the
tax declarations and that NPC negotiated with Marasigan, and that NPC took the properties
between 1996 and 1998. NPC’s officers alleged that the dangling areas could still be used for
agricultural purposes but agreed that the lines may endanger people and animals.

On cross-examination, the right of way officer admitted that the properties were classified as agro
industrial as stated in the 1998 tax declarations. He admitted that the classification of the properties
as agricultural which was used as basis for computing its value was erroneous.

RTC affirmed the recommendation of the appraisal committee for payment of the Just
compensation in the amount of 47,064,400 based on the BIR zonal valuation as of the time of the
filing of the complaint on Jan 23, 2006. It also affirmed that payment of the consequential damages
for the properties that were rendered useless. RTC rejected NPC’s claim that it took the properties
in 1972 when NPC was allegedly allowed by Marasigan to construct the lines. NPC’s MR was
denied by RTC but the court made modifications by including interest (6%, 12%) On their appeal to
the CA, they alleged that the award was based on the premise that it sought to acquire ownership
when it merely sought to acquire right-of-way; the payment of which is only 10% of the market-
value of the properties. The CA held that payment of the full value was Just Compensation. It was
also held that NPC failed to allege the issue of taking in its complaint nor was it raised during pre-
trial or even proved during trial. The CA denied their appeal and affirmed the RTC decision.
ISSUE:
Whether or not the reckoning point of the market value of the properties was during the taking of
the property
HELD:
The court ruled in the affirmative. The general rule is that it should be reckoned at the time of actual
taking when it preceded the filing of the complaint. Under Rule 67, Sec 4; the value of just
compensation is to be determined as of the date of the taking of the property or the filing of the
complaint, whichever came first. In NTC v. Oroville: it was settled that just compensation should be
reckoned from the date of actual taking when such preceded the filing of the complaint for
expropriation. The State is only obliged to make good the loss sustained by the landowner and
considering the circumstances availing at the time the property was taken In some cases, there were
deviations from the general rule due to special circumstances as it necessitated a valuation at the
time the landowners initiated proceedings after the taking of the properties.

In the case at bar, NPC insists that it took the properties in the 1970s despite initiating the
complaint only on Jan 23, 2006 which is why they allege that it should be reckoned in the 1970s.
NPC's action relative to the acquisition of an easement of right-of-way made prior to the filing of its
expropriation complaint was limited only to the conduct of negotiations with respondents. The
negotiations pertained to the construction of transmission lines not among the transmission lines
subject of the complaint. This was alleged by NPC and was testified to by their right-of-way officer.
There being no sufficient proof that NPC actually took the subject properties at a date preceding the
filing of the expropriation complaint, the time of the taking should be taken to mean as coinciding
with the commencement of the expropriation proceedings on January 23, 2006.

The determination of just compensation in expropriation cases is a function addressed to the

discretion of the courts owing to the constitutional mandate that no private property shall be taken
for public use without payment of just compensation. As such, legislative enactments, as well as
executive issuances, fixing or providing for the method of computing just compensation are
tantamount to impermissible encroachment on judicial prerogatives. As such, they are not binding
on courts and are treated as mere guidelines in ascertaining the amount of just compensation The
tax declarations presented by NPC is only of of the several factors which the court may consider to
facilitate the determination of just compensation as they enjoy judicial discretion to determine the
classification of lands. The court's discretion in classifying the expropriated land is only for the
purpose of determining just compensation and is not meant to substitute that of the local
government's power to reclassify and convert lands through local ordinance