TRADITIONAL

JUST COMPENSATION DEFINITION

In Republic v. Asia Pacific Integrated Steel Corporation, the Court defined

just compensation "as the full and fair equivalent of the property taken from
its owner by the expropriator. The measure is not the taker's gain, but
the owner's loss. The word 'just' is used to intensify the meaning of the
word 'compensation' and to convey thereby the idea that the equivalent to be
rendered for the property to be taken shall be real, substantial, full, and ample.
Such 'just'-ness of the compensation can only be attained by using reliable and
actual data as bases in fixing the value of the condemned property. Trial
courts are required to be more circumspect in its evaluation of just
compensation due the property owner, considering that eminent domain cases
involve the expenditure of public funds."

Bantayan only recognizes three types of lands in the island: residential,

industrial and commercial. The target property, a 50 hectares or 500000
square meters of residential land, is owned by Mr. Francisco Yu. To render the
proper just compensation, the case of The Manila Banking Corporation
vs. Bases Conversion and Development Authority cited Sec. 17 of R.A.
6657.

Sec. 17 of R.A 6657 provides as follows:

Sec. 17. Determination of Just Compensation. In

determining just compensation, the cost of acquisition of the
land, the current value of like properties, its nature, actual use
and income, the sworn valuation by the owner, the tax
declarations, and assessments made by the government
assessors, should be considered. The social and economic
benefits contributed by the farmers and the farm workers and by
the Government to the property as well as the non-payment of
taxes or loans secured from any government financing
institution on the said land, shall be considered as additional
factors to determine its valuation.

To determine the valuation of the expropriated land, Sections 4 and 5 of

R.A. 8974 should be considered.

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 above mentioned, 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.

Section 5. Standards for the Assessment of the Value of the

Land Subject of Expropriation Proceedings or Negotiated
Sale. - In order to facilitate the determination of just compensation,
the court may consider, among other well-established factors, the
following relevant standards:

(a) The classification and use for which the property is suited;

(b) The developmental costs for improving the land;

 (c) The value declared by the owners;

(d) The current selling price of similar lands in the vicinity;

(e) The reasonable disturbance compensation for the removal and/or

demolition of certain improvement on the land and for the value of
improvements thereon;

(f) This size, shape or location, tax declaration and zonal valuation of
the land;

(g) The price of the land as manifested in the ocular findings, oral as
well as documentary evidence presented; and

(h) Such facts and events as to enable the affected property owners to
have sufficient funds to acquire similarly-situated lands of
approximate areas as those required from them by the government,
and thereby rehabilitate themselves as early as possible.

FORMULA IN COMPUTING VALUATION OF LAND

In the case of the Land Bank of the Philippines vs. Eugenio Dalauta,
the Special Agrarian Court used the basic formula for the valuation of lands
covered by Voluntary Offer to Sell and Compulsory Acquisition.

LV = (CNI x o.6) + (CS x 0.3) + (MV x 0.1)

Where: LV =Land Value

CNI =Capitalized Net Income

CS = Comparable Sales

MV =Market Value per Tax Declaration

The above formula is used if all the three (3) factors are present, relevant and
applicable. In any case, the resulting figure in the equation is always
multiplied to the number of area or hectarage of land valued for just
compensation.

Whenever one of the factors in the general formula is not available, the
computation of land value will be any of the three (3) computations or
formulae:

LV = (CNI x 0.9) + (MV x 0.1)

(If the comparable sales factor is missing)

LV = (CS x 0.9) + (MV x 0.1)

(If the capitalize net income is unavailable)

LV = MV x 2 (If only the market value factor is available)

(Agrarian Law and Jurisprudence as compiled by DAR and UNDP pp. 94-95)

This formula is not applicable in our situation because the expropriated lands
are not agrarian lands but residential lands.

WHO SHOULD DETERMINE JUST COMPENSATION?

In Export Processing Zone Authority v. Dulay, the Court ruled that the
valuation of property in eminent domain is essentially a judicial
function which cannot be vested in administrative agencies. "The
executive department or the legislature may make the initial determination,
but when a party claims a violation of the guarantee in the Bill of Rights that
private property may not be taken for public use without just compensation,
no statute, decree, or executive order can mandate that its own determination
shall prevail over the court's findings. Much less can the courts be precluded
from looking into the 'justness' of the decreed compensation. " Any law or rule
in derogation of this proposition is contrary to the letter and spirit of the
Constitution, and is to be struck down as void or invalid.

Under R.A. 7691, if the value of the property is less than 20,000, the case should be
filed with the MTC and MTCC. If the property is more than 20,000, the proper court
is the RTC. In our case, the value of our property is more than 20,000 and considering
the size of the expropriated land, the case should be filed with the RTC.

WHEN IS JUST COMPENSATION COMPUTED?

In the case of National Transmission Corporation vs. Oroville Development

Corporation:

Section 4, Rule 67 of the Rules of Court provides:

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.

As further pointed out in Republic v. Lara, et al.,24 thus:

x x x "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.

INTEREST IN CASE FULL PAYMENT WAS NOT RENDERED

In the case of Evergreen Manufacturing Corp. vs. Republic of the

Philippines, Evergreen argues that it is entitled to legal interest on the
balance of the just compensation, computed from the time of the filing of the
complaint until the judgment attains finality.

Section 9, Article III of the 1987 Constitution provides that "no private
property shall be taken for public use without just compensation." Just
compensation in expropriation cases has been held to contemplate just and
timely payment, and prompt payment is the payment in full of the just
compensation as finally determined by the courts.35 Thus, just compensation
envisions a payment in full of the expropriated property. Absent full payment,
interest on the balance would necessarily be due on the unpaid amount.
In Republic v. Mupas,36 we held that interest on the unpaid compensation
becomes due if there is no full compensation for the expropriated property, in
accordance with the concept of just compensation. We held:

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.

Ideally, just compensation should be immediately made available to the

property owner so that he may derive income from this compensation, in the
san1e 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.

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."

In Republic, the Court recognized that the just compensation due to the
landowners for their expropriated property amounted to an
effective forbearance on the part of the State. Applying the Eastern
Shipping Lines ruling, the Court fixed the applicable interest rate at 12% per
annum, computed from the time the property was taken until the full amount
of just compensation was paid, in order to eliminate the issue of the constant
fluctuation and inflation of the value of the currency over time.

FORM OF COMPENSATION

Through cash following the computation for valuation and the necessary data
about the expropriated land.