Republic vs Castellvi

G.R. No. L-20620 August 15, 1974

Facts:

 Petitioner, as a lessee, occupied the property of Castellvi in 1947 on a year to year basis (from July 1 of
each year to June 30 of the succeeding year.) Before the expiration of the contract of lease on June 30,
1956 the Republic sought to renew the same but Castellvi refused. When the AFP refused to vacate the
leased premises after the termination of the contract, on July 11, 1956, Castellvi wrote to the Chief of
Staff, AFP, informing the latter that the heirs of the property had decided not to continue leasing the
property. Lieutenant General Alfonso Arellano, Chief of Staff, answered the letter of Castellvi, saying
that it was difficult for the army to vacate the premises in view of the permanent installations and
other facilities worth almost P500,000.00 that were erected and already established on the property,
and that, there being no other recourse, the acquisition of the property by means of expropriation
proceedings would be recommended to the President.

Petitioner Republic stated that the “taking ” of Castellvi’s property should be deemed as of the year
1947 by virtue of the lease agreement.

During the assessment of just compensation, the government argued that it had taken the property
when the contract of lease commenced and not when the proceedings begun. The owner maintains that
the disputed land was not taken when the government commenced to occupy the said land as lessee
because respondent argued that the two essential elements in the “taking” of property under the power
of eminent domain, namely: (1) that the entrance and occupation by the condemnor must be for a
permanent, or indefinite period, and (2) that in devoting the property to public use the owner was
ousted from the property and deprived of its beneficial use, were not present when the Republic
entered and occupied the Castellvi property in 1947.

Issue: Whether or not the compensation should be determined as of 1947 or 1959.

Ruling:

The Supreme Court ruled that the taking should not be reckoned as of 1947, and that just compensation
should not be determined on the basis of the value of the property that year .

The requisites for taking are:

1. The expropriator must enter a private property;

2. The entry must be for more than a momentary period;

3. It must be under warrant or color of authorities;

4. The property must be devoted for public use or otherwise informally appropriated or injuriously
affected; and
5. The utilization of the property for public use must be such a way as to oust the owner and deprive
him of beneficial enjoyment of the property.

Only requisites 1, 3 and 4 are present. It is clear, therefore, that the “taking” of Castellvi’s property for
purposes of eminent domain cannot be considered to have taken place in 1947 when the republic
commenced to occupy the property as lessee thereof.

Requisite number 2 is not present according to the Supreme Court, “momentary” when applied to
possession or occupancy of real property should be construed to mean “a limited period” -- not
indefinite or permanent. The aforecited lease contract was for a period of one year, renewable from
year to year. The entry on the property, under the lease, is temporary, and considered transitory. The
fact that the Republic, through AFP, constructed some installations of a permanent nature does not alter
the fact that the entry into the lant was transitory, or intended to last a year, although renewable from
year to year by consent of the owner of the land. By express provision of the lease agreement the
republic, as lessee, undertook to return the premises in substantially the same condition as at the time
the property was first occupied by the AFP. It is claimed that the intention of the lessee was to occupy
the land permanently, as may be inferred from the construction of permanent improvements. But this
“intention” cannot prevail over the clear and express terms of the lease contract.

The 5th requirement is also lacking. In the instant case the entry of the Republic into the property and
its utilization of the same for public use did not oust Castellvi and deprive her of all beneficial enjoyment
of the property. Cstellvi remained as owner, and was continuously recognized as owner by the Republic,
as shown by the renewal of the lease contract from year to year, and by the provision in the lease
contract whereby the Republic undertook to return the property to Castellvi when the lease was
terminated. Neither was Castellvi deprived of all the beneficial enjoyment of the property, because the
Republic was bound to pay, and had been paing, Castellvi the agreed monthly rentals until the time
when it filed the complaint for eminent domain on June 26, 1959.

It is clear, therefore, that the “taking” of Castellvi’s property for purposes of eminent domain cannot be
considered to have taken place in 1947 when the Republic commenced to occupy the property as lessee
thereof, and that the just compensation to be paid for the Castellvi’s property should not be determined
on the basis of the value of the property as of that year. The lower court did not commit an error when
it held that the “taking” of the property under expropriation commenced with the filing of the complaint
in this case.

Under Sec. 4, Rule 67 of the Rules of Court, “just compensation” is to be determined as of the date of
the filing of the complaint. The Supreme Court has ruled that when the taking of the property sought to
be expropriated coincides with the commencement of the expropriation proceedings, or takes place
subsequent to the filing of the complaint for eminent domain, the just compensation should be
determined as of the date of the filing of the complaint.

 In the instant case, it is undisputed that the Republic was placed in possession of the Castellvi property,
by authority of the court, on August 10, 1959. The “taking” of the Castellvi property for the purposes of
determining the just compensation to be paid must, therefore, be reckoned as of June 26, 1959 when
the complaint for eminent domain was filed.