Constitutional Law 2: Due Process and Eminent Domain

Case: City of Iloilo v. Contreras-Besana and Javellana, 612 SCRA 458 [2010]
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. He alleged that 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 the
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 should be the date of the issuance of the order.
On April 15, 2004, the commission created for this case submitted a report determining estimates of the
fair market value of the properties in question in different reckoning points, as shown in the table below.
Reckoning Point

Value per
square meter

Fair Market Value

Basis

1981 - at the time

the complaint was
filed

P110.00/sqm

P79,860.00

based on three or more recorded sales

of similar types of land in the vicinity in
the same year

1981 at the time

the complaint was
filed

P686.81/sqm

P498,625.22

Appraisal by Southern Negros

Development Bank based on market
value, zonal value, appraised value of
other banks, recent selling price of
neighboring lots

2002

P3,500.00/sqm

P2,541,000.00

Appraisal by the City Appraisal

Committee, Office of the City Assessor

2004

P4,200.00/sqm

PhP3,049,200.00

Private Appraisal Report (Atty. Roberto

Cal Catolico dated April 6, 2004)

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 courts discretion.
ISSUES:
(1) W/N an expropriation order becomes final (W/N the trial court erred in overturning the 1983
Order).
(2) W/N the reckoning point of the determination of just compensation is the time of the taking or
the time of the filing of the complaint.
HELD:
(1) YES. The Court, in its ruling, defined the two stages in an expropriation proceeding. The first stage
ends in an order of dismissal or a determination that the property in question is to be acquired
for public use. These orders are deemed final but appealable by the aggrieved party. The second
phase is the determination of just compensation, which ends in an order fixing the amount to be
paid to the landowner. This order is also a final one, but appealable.
In the case at bar, private respondent did not file an appeal assailing the 1983 order. Therefore,
the said order had become final, and the petitioners right to expropriate is no longer subject to
review. The trial court therefore erred in issuing the orders which nullified the 1983 Order.
(2) NO. As established in a long line of cases, the Court constantly affirmed that:
x x x just compensation is to be ascertained as of the time of the taking, which usually coincides
with the commencement of the expropriation proceedings. Where the institution of the action
precedes entry into the property, the just compensation is to be ascertained as of the time of the
filing of the complaint.
It is also provided in Section 4, Rule 67 of the Rules of Procedure that just compensation is to be
determined as of the date of the filing of the complaint. In the case at bar, no exception was
found based on the pertinent facts.
The Court also held that since the expropriation proceedings are final, and no appeal was made,
the said legality of the petitioners possession of the lots in question can no longer be subject to
review, hence, private respondent cannot re-claim the said lots. However, he is still subject to just
compensation. Additionally, since he was not paid for just compensation by the petitioner, he is
also entitled to exemplary damages.