COMMISSIONER OF PUBLIC HIGHWAYS v HON. FRANCISCO BURGOS, as Judge of CFI Cebu, Branch II, and Victoria Amigable.

COMMISSIONER OF PUBLIC HIGHWAYS V. HON. FRANCISCO R. BURGOS

MARCH 31, 1980 | DE CASTRO, J.
Payment or Performance
dms

CASE SUMMARY: A parcel of land owned by Victoria Amigable was taken by the government for right of way purpose. Amigable filed a complaint to recover
ownership + damages. Upon the Supreme Court ’s order to remand the case in order to determine the amount to be paid to Amagible, the Republic showed that the
value of the property at the time of the taking of the property (1924) was P2.37 per square meter. Amagible showed that in 1972, the inflation now caused the value of
the peso to be P6.775 to a dollar. The respondent court ruled that the Republic should give to Amagible a total of P214,356.75. However the Court ruled that the value
of the property, in absence of a contrary agreement should be the one at the time of the taking of the property and thus lowered the amount to P2.37 per square meter.

FACTS:
o Victoria Amigable is owner of parcel of land situated in Cebu with area of 6k sqm the Government took this land in 1924 for road-right-of
way purpose. The streets have now become Mango Ave and GOrrordo Avenue.

o Victoria Amigable filed complaint to recover ownership and possession of the land, and damages for the alleged illegal occupation by Government.
o Republic countered land was either donated or sold by its owners to province of Cebu to enhance its value, and that owner cannot recover value of property due
to estoppel and statute of limitations
o TC: dismissed complaint on grounds relied upon by Govt.
o SC: reversed, and case was remanded for the determination of just compensation to be paid to Amigable as owner of land

o TC: rendered judgment directing Republic of the Philippines to pay Amigable the sum of P214,356.75 (49k + 145k interest 6% int from 1924)
o In the hearing, the Government proved value of property to be at P2.37 per square meter in 1924 when property was taken.
o Amigable presented newspaper clippings of Manila Times where value of peso to the dollar obtaining about the middle of 1972, which was P6.775 to a
dollar
o Commissioner of Public Highways filed petition for review by certiorari, questioning decision of TC.

ISSUE:
WoN the provision of Article 1250 of the New Civil Code is applicable in determining the amount of compensation to be paid to respondent Amigable. -- NO

RULING:
Commissioner of Public Highways (RP) averred: basis of just compensation should be value of property in 1924 at 2.37 p sqm
Amigable averred: amount of just compensation/payment should be adjusted pursuant to Art 1250 of extraordinary deflation of peso to dollar (value of peso to dollar
at time of hearing should be considered)
Court ruled (with RP):
 NCC 1250. In case an extraordinary inflation or deflation of the currency stipulated should supervene, the value of the currency at the time of the
establishment of the obligation shall be the basis of payment, unless there is an agreement to the contrary.
 Art 1250 the foregoing provision applies only to cases where a contract or agreement is involved. It does not apply where the obligation to pay arises from
law, independent of contract.
 The law as quoted, clearly provides that the value of the currency at the time of the establishment of the obligation shall be the basis of payment which, in cases
of expropriation, would be the value of the peso at the time of the taking of the property when the obligation of the Government to pay arises

 IN this case, The taking of private property by the Government in the exercise of its power of eminent domain does not give rise to a contractual obligation
 An agreement is needed for the effects of an extraordinary inflation to be taken into account to alter the value of the currency at the time of the
establishment of the obligation
 There can be no “agreement to the contrary” to speak of because the obligation of the Government sought to be enforced in the present action does not
originate from contract.
 The correct amount of compensation due private respondent for the taking of her land for a public purpose would not be P49,459.34, as fixed by the respondent
court, but only P14,615.79 at P2.37 per square meter, the actual value of the land of 6,167 square meters when it was taken in 1924.

 Moreover, the unusually long delay of private respondent in bringing the present action—a period of almost 25 years—which a stricter application of the law on
estoppel and the statute of limitations and prescription may have divested her of rights over the property in question. Her inaction militates against payment to her
of an amount bigger.
 Respondent should have commenced proper action soon after she had been deprived of her right of ownership and possession over the land a deprivation she
knew was permanent in character, for the land was intended for, and had become, avenues in the City of Cebu.

TEEHANKEE Concurring:
I concur in the result, with the observation that the statements in the main opinion re the applicability or nonapplicability of Article 1250 of the Civil Code should be
taken as obiter dicta, since said article may not be invoked nor applied without a proper declaration of extraordinary inflation or deflation of currency by the
competent authorities the Court’s judgment is that respondent is entitled to the value of the land at the time of its taking in 1924 with interest thereon at the legal rate
of six (6%) percent per annum (which for a period of 56 years since 1924 to the present amount to a total of 336% interest on the principal due) and reasonable
attorney’s fees of P5,000.00 in consonance with the earlier decision of the Court in Victoria Amigable vs. Cuenca
The judgment at bar is merely an implementation of the said earlier decision which remanded the case to the Court a quo for determination of the compensation
to be paid by the government