138. Iloilo vs.

Contreras-Besana

SECOND DIVISION

G.R. No. 168967               February 12, 2010

CITY OF ILOILO represented by HON. JERRY P. TREÑAS, City Mayor, Petitioner,
vs.
HON. LOLITA CONTRERAS-BESANA, Presiding Judge, Regional Trial Court,
Branch 32, and ELPIDIO JAVELLANA, Respondents.

DEL CASTILLO, J.:

Topic: Eminent Domain – Just Compensation:

Consequential Damages (6%-Actual or compensatory, exemplary & Attorney’s Fees)

FACTS:

In an expropriation case filed by petitioner against private respondent (Javellana), the

plaintiff was able to take possession of two parcels of land owned by Javellana for the
purpose of making the said lots the site for Lapaz High School. A writ of possession
was issued to plaintiff after it allegedly made a deposit of the amount of the value of
the said lots (Php 40,000). Such was issued by the trial court in an order dated May
17, 1983.

On April 2000, private respondent found out that the amount of Php 40,000 was not
deposited by the petitioner when he tried to withdraw the said amount (as proved by a
certification issued by the PNB). When no amicable resolution and a negotiated sale
was successful, he (Javellana) filed a complaint for Recovery of Possession, Fixing
and Recovery of Rental and Damages. Private respondent alleged that since he had
not been compensated for the Subject Property, petitioner's possession was illegal,
and he was entitled to recovery of possession of his lots. He prayed that petitioner be
ordered to vacate the Subject Property and pay rentals amounting to P15, 000.00 per
month together with moral, exemplary, and actual damages, as well as attorney's
fees. Also, since he was not compensated for the expropriation of his property, the
possession by the plaintiff was illegal. This argument was opposed by the petitioner,
claiming that Javellana can no longer file an action for the recovery of the possession
of the lots since the same was already utilized for public use, therefore can only
demand for the payment of just compensation.

The RTC then issued an order (2003 order) which nullified the 1983 order, ordering
the petitioner to immediately deposit the 10% of the just compensation after
determining the value of the property at thez time the complaint was filed. This was
amended six months later (2004 order), changing the reckoning point from the time of
the filing of the complaint to the date of the issuance of this order. A motion for
reconsideration was filed by the petitioner, arguing that there was no legal basis for its
issuance. This was denied by the trial court, ruling that since no deposit was made,
the reckoning point for the determination of the fair market value of the property

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 138. Iloilo vs. Contreras-Besana

should be the date of the issuance of the order.

Petitioner assailed the aforementioned orders claiming that the trial court gravely
abused its discretion in overturning the 1983 order which was already final and
executory, and that the just compensation for the expropriation should be based on
the fair market value of the property at the time of the taking or at the time of the filing
of the complaint. Private respondent argued that there was no error committed by the
trial court, and that the said orders were subject to amendment and nullification at the
court’s discretion.

ISSUE: Whether or not respondent is entitled to damages

HELD:

YES. The City of Iloilo should be held liable for damages for taking private
respondent's property without payment of just compensation. In Manila International
Airport Authority v. Rodriguez, the Court held that a government agency's prolonged
occupation of private property without the benefit of expropriation proceedings
undoubtedly entitled the landowner to damages:

Such pecuniary loss entitles him to adequate compensation in the form of actual
or compensatory damages, which in this case should be the legal interest (6%) on
the value of the land at the time of taking, from said point up to full payment by
the MIAA. 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 the taking.

For more than twenty (20) years, the MIAA occupied the subject lot without the benefit
of expropriation proceedings and without the MIAA exerting efforts to ascertain
ownership of the lot and negotiating with any of the owners of the property. To our
mind, these are wanton and irresponsible acts which should be suppressed and
corrected. Hence, the award of exemplary damages and attorneys fees is in
order. 

WHEREFORE, the petition is GRANTED. The Orders of the Regional Trial

Court of Iloilo City, Branch 32 in Civil Case No. 14052 and Civil Case No. 03-
27571 dated December 12, 2003, June 15, 2004, and March 9, 2005 are
hereby ANNULLED and SET ASIDE.

The Regional Trial Court of Iloilo City, Branch 32 is DIRECTED to immediately

determine the just compensation due to private respondent Elpidio T.
Javellana based on the fair market value of the Subject Property at the time
Civil Case No. 14052 was filed, or on September 18, 1981 with interest at the
legal rate of six percent (6%) per annum from the time of filing until full
payment is made.

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 138. Iloilo vs. Contreras-Besana

The City of Iloilo is ORDERED to pay private respondent the amount of

P200,000.00 as exemplary damages.