Professional Documents
Culture Documents
*
G.R. No. 179334. July 1, 2013.
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* THIRD DIVISION.
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of the taking, they would have used it for other profitable uses.
Hence, the failure of the State to have paid at the proper time
deprives the owners of the true value of the property that they
had. I am of the opinion that the proper way to resolve this would
be to use the economic concept of present value. This concept is
usually summarized this way: Money received today is more
valuable than the same amount of money tomorrow. By applying
this concept, we are able to capture just compensation in a more
holistic manner. We take into consideration the potential of
money to increase (or decrease) in value across time. If the parties
in an expropriation case would have perfect foresight,
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they would have known the amount of “fair market value at the
time of taking.” If this amount of money was deposited in a bank
pending expropriation proceedings, by the time proceedings are
over, the property owner would be able to withdraw the principal
(fair market value at the time of taking) and the interest earnings
it has accumulated over the time of the proceedings. Economists
have devised a simple method to compute for the value of money
in consideration of this future interest earnings.
PERALTA, J.:
This is a petition for review on certiorari under Rule 45
of the Rules of Court, assailing the Court of Appeals (CA)
Decision1 dated July 31, 2007 in CA-G.R. CV No. 77997.
The assailed decision affirmed with modification the
Regional Trial Court (RTC)2 Decision3 dated March 22,
2002 in Civil Case No. 208-M-95.
The case stemmed from the following factual and
procedural antecedents:
Respondent spouses Heracleo and Ramona Tecson
(respondents) are co-owners of a parcel of land with an area
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1 Penned by Associate Justice Lucas P. Bersamin (now a member of
this Court), with Associate Justices Portia Aliño-Hormachuelos and Estela
M. Perlas-Bernabe (now a member of this Court), concurring; Rollo, pp.
124-137.
2 Branch 80, Malolos, Bulacan.
3 Penned by Judge Caesar A. Casanova; Rollo, pp. 165-167.
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4 Records, p. 5.
5 Rollo, p. 125.
6 Records, p. 6.
7 Id., at p. 7.
8 Rollo, p. 125.
9 Records, pp. 1-4.
10 Id., at p. 3.
11 Id., at p. 2.
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the case was later referred to the PAC for the submission of
a recommendation report on the value of the subject
property.17 In
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12 Id., at pp. 17-19.
13 Id., at pp. 29-30.
14 The case was docketed as CA-G.R. CV No. 51454.
15 Embodied in a Decision dated February 11, 1999, penned by
Associate Justice Artemon D. Luna, with Associate Justices Delilah
Vidallon-Magtolis and Rodrigo V. Cosico, concurring; records, pp. 56-62.
16 Records, p. 104.
17 Id., at p. 116.
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18 Id., at p. 122.
19 Id., at pp. 150-152.
20 Id., at p. 152.
21 Supra note 1.
252
I.
THE COURT OF APPEALS GRAVELY ERRED IN GRANTING
JUST COMPENSATION TO RESPONDENTS CONSIDERING
THE HIGHLY DUBIOUS AND QUESTIONABLE
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22 Rollo, p. 108.
23 Id., at pp. 24-32.
24 Manila International Airport Authority v. Rodriguez, 518 Phil. 750,
757; 483 SCRA 619, 626-627 (2006).
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25 Rollo, p. 133.
26 Rules of Court, Rule 18, Sec. 7.
27 Republic v. Court of Appeals, G.R. No. 147245, March 31, 2005, 454
SCRA 516, 527.
28 Id.
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29 Eusebio v. Luis, G.R. No. 162474, October 13, 2009, 603 SCRA 576,
583; Republic v. Court of Appeals, supra note 27, at p. 528.
30 Republic v. Court of Appeals, supra note 27, at p. 532.
31 Eusebio v. Luis, supra note 29, at p. 584; Forfom Development
Corporation v. Philippine National Railways, G.R. No. 124795, December
10, 2008, 573 SCRA 350, 366-367.
32 Republic v. Court of Appeals, supra note 27, at p. 534. (Emphasis
supplied.)
33 Supra note 31.
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34 Forfom Development Corporation v. Philippine National Railways,
supra note 31, at p. 366.
35 Supra note 29.
36 Supra note 24.
37 G.R. No. 157847, August 25, 2005, 468 SCRA 142.
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38 96 Phil. 170 (1954).
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39 Republic v. Lara, et al., supra, at pp. 177-178.
40 Rollo, p. 44.
41 Republic v. Court of Appeals, supra note 27, at p. 536.
42 Eusebio v. Luis, supra note 29, at p. 587.
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43 Id., at pp. 587-588; Forfom Development Corporation v. Philippine
National Railways, supra note 31, at p. 373; Manila International Airport
Authority v. Rodriguez, supra note 24, at p. 761. (Citations omitted).
44 Manila International Airport Authority v. Rodriguez, supra note 24,
at p. 761; p. 631. (Citation omitted).
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The Case
Before the Court is a Petition for Review on Certiorari
under Rule 45 assailing the July 31, 2007 Decision1 of the
Court of Appeals (CA) in CA-G.R. CV No. 77997, affirming
with modification the March 22, 2002 Decision2 of the
Regional Trial Court (RTC) of Malolos City, Bulacan.
The Facts
Respondent spouses Heracleo and Ramona Tecson
(respondents) are the co-owners of a 7,268-square meter lot
located in San Pablo, Malolos, Bulacan, and covered by
Transfer Certificate of Title (TCT) No. T-43006.3 This
parcel of land is among the private properties traversed by
the MacArthur Highway, a government project undertaken
sometime in 1940. The taking appears to have been made
absent the requisite expropriation proceedings and without
respondents’ consent.4
After the lapse of more than forty (40) years,
respondents, in a Letter5 dated December 15, 1994,
demanded payment equivalent to the fair market value of
the subject property from the Department of Public Works
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1 Rollo, pp. 37-50. Penned by Associate Justice (now a member of this
Court) Lucas P. Bersamin and concurred in by Associate Justices Portia
Aliño Hormachuelos and Estela M. Perlas-Bernabe (also now a member of
this Court).
2 Id., at pp. 78-80.
3 Id., at pp. 37-38.
4 Id., at p. 38.
5 Records, p. 6.
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6 Rollo, p. 38.
7 Id., at p. 38.
8 Id., at pp. 37-38.
9 Id., at pp. 51-54.
10 Records, p. 5.
11 Rollo, pp. 56-58.
12 Id., at pp. 60-61.
13 Id., at pp. 38-39.
14 Id., at p. 68.
15 Id., at pp. 62-68.
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16 Id., at p. 39.
17 Id., at p. 39.
18 Id., at p. 39.
19 Id., at p. 40.
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20 Id., at p. 40.
21 Id., at pp. 78-80.
22 Id., at p. 80.
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I
THE CA GRAVELY ERRED IN GRANTING JUST
COMPENSATION TO RESPONDENTS CONSIDERING THE
HIGHLY DUBIOUS AND QUESTIONABLE CIRCUMSTANCES
OF THEIR ALLEGED OWNERSHIP OF THE SUBJECT
PROPERTY.
II
THE CA GRAVELY ERRED IN AWARDING JUST
COMPENSATION TO RESPONDENTS BECAUSE THEIR
COMPLAINT FOR RECOVERY OF POSSESSION AND
DAMAGES IS ALREADY BARRED BY PRESCRIPTION AND
LACHES.
III
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23 Id., at p. 49.
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24 Id., at p. 22.
25 Id., at pp. 62-68.
26 Id., at p. 68.
27 G.R. Nos. 178158 & 180428, December 4, 2009, 607 SCRA 413.
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28 Cimafranca v. Intermediate Appellate Court, G.R. No. 68687,
January 31, 1987, 147 SCRA 611.
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29 Rollo, p. 46.
30 Eusebio v. Luis, G.R. No. 162474, October 13, 2009, 603 SCRA 576,
583; Republic v. Court of Appeals, G.R. No. 147245, March 31, 2005, 454
SCRA 516, 528.
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31 Ponencia, p. 9.
32 96 Phil. 170 (1954).
33 Id., at pp. 177-178; ponencia, p. 10.
34 Forfom Development Corporation v. Philippine National Railways,
G.R. No. 124795, December 10, 2008, 573 SCRA 350; Eusebio v. Luis, G.R.
No. 162474, October 13, 2009, 603 SCRA 576; Manila International
Airport Authority v. Rodriguez, G.R. No.
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161836, February 28, 2006, 483 SCRA 619; Republic v. Sarabia, G.R.
No. 157847, August 25, 2005, 468 SCRA 142.
35 See National Power Corporation v. Heirs of Macabangkit Sangkay,
G.R. No. 165828, August 24, 2011, 656 SCRA 60.
36 Concurring Opinion of Justice Presbitero J. Velasco, Jr. in Mactan-
Cebu International Airport v. Tudtud, G.R. No. 174012, November 14,
2008, 571 SCRA 165.
37 Id.
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38 Eusebio v. Luis, G.R. No. 162474, October 13, 2009, 603 SCRA 576.
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39 Rollo, p. 40; CA Decision, p. 4.
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SEPARATE OPINION
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LEONEN, J.:
I agree with the ponencia of Justice Peralta in so far as
the fair market value of a property subjected to
expropriation must be the value of the property at the time
of the actual taking by the government, at the moment that
the owner is unable to have beneficial use (see Republic v.
Vda. de Castellvi).1
However, I also agree with Justice Velasco that gross
injustice will result if the amount that will be awarded
today will be based simply on the value of the property at
the time of the actual taking. Should the value of the
property been awarded to the owners at the time of the
taking, they would have used it for other profitable uses.
Hence, the failure of the State to have paid at the proper
time deprives the owners of the true value of the property
that they had.
I am of the opinion that the proper way to resolve this
would be to use the economic concept of present value.2
This concept is usually summarized this way: Money
received
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1 G.R. No. L-20620, August 15, 1974, 58 SCRA 336, 352.
2 Present value (of an asset) is defined as “the value for an asset that
yields a stream of income over time.” PAUL A. SAMUELSON AND WILLIAM
D. NORDHAUS, ECONOMICS, p. 748 (Eighteenth Edition).
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3 N. GREGORY MANKIW, ESSENTIALS OF ECONOMICS, p. 414 (2007
Edition).
4 Interest rates are dependent on risk, inflation and tax treatment. See
PAUL A. SAMUELSON AND WILLIAM D. NORDHAUS, ECONOMICS, p. 269
(Eighteenth Edition). Actual interest rate to be applied should be
computed reasonably according to historical epochs in our political
economy. For example, during the war, we have experienced
extraordinary inflation. This extraordinary inflation influenced adversely
interest rates of financial investments. The period of martial law is
another example of a historical epoch that influenced interest rates.
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PV1 = V*(1+r)
PV1 = P100 (1 + 0.05)
PV1 = P105
So if AA were to be paid in Year 1 instead of in Year 0, it
is only just that he be paid P105 to take into account the
interest earnings he has foregone due to the expropriation
proceedings. If he were to be paid in Year 2, we should take
into consideration not only the interest earned of the
principal, but the fact that the interest earned in Year 1
will also be subject to interest earnings in Year 2. This
concept is referred to as compounding interest rates. So our
formula becomes:
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5 N. GREGORY MANKIW, ESSENTIALS OF ECONOMICS, pp. 414-415 (2007
Edition).
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PV2 = PV1*(1+r) or
PV2 = [V*(1+r)]*(1+r)
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