TOPIC Art. III – Sec.

9 Just Compensation
CASE NO. G.R. No.
CASE NAME Republic v BPI
PONENTE Carpio
PETITIONER Republic of the Philippines, represented by Dep’t of Public Works and Highways
RESPONDENT Bank of the Philippine Islands (BPI)
TYPE OF CASE Petition for Review
MEMBER Mitchell Yumul

DOCTRINE
1. Just Compensation – the just and complete equivalent of the loss which the owner of the thing
expropriated has to suffer by reason of the expropriation; it is the compensation given to the owner
if he receives for his property a sum equivalent to its market value.
2. Market value
- Fair value of the property as between one who desires to buy and one who desires to sell
- The current price
*General rule in ascertaining value: the value must be ascertained at the time of the filing of the complaint
for expropriation
3. Just compensation also includes consequential damages
- Consequential damages are damages to other interests of the owner that can be attributed to the
expropriation
- However, consequential benefits must be deducted from consequential damages, that is, the
increase in the value of other interests of the owner that can be attributed to the new use to
which his former property will be put by the expropriation authority
- No actual taking of the building is necessary to grant consequential damages.
Consequential damages are awarded if as a result of the expropriation, the remaining
property of the owner suffers from impairment or decrease in value.

RECIT-READY DIGEST
The nat’l government, through DPWH, filed an expropriation case against BPI, as DPWH needed
its lot for the construction of the Zapote-Alabang Flyover. BPI did not object to this, thus RTC constituted
a Board of Commissioners to determine the just compensation. The RTC set P11,240,000.00 as the just
compensation for BPI’s property computed based on the market value in the Commissioner’s report. BPI
filed a motion for new trial because it alleged that its building (demolished by DPWH) was not included in
the Decision that fixed the just compensation. RTC made an ocular inspection of the property to confirm
this. It held that just compensation for the building was due and ordered DPWH to pay BPI the amount of
P2,633,000.00. DPWH opposed, claiming that the original plan on the building never pushed through, but
RTC found that BPI never received a notice on this matter. It ruled that the demolition of the old building
of BPI can be construed as a consequential damage suffered by BPI as a result of the expropriation. A
new Board of Commissioner was constituted for both parties, and ultimately, DPWH was ordered to pay
BPI P1,905,600 as additional just compensation for the building.
At issue in the SC is whether the award of additional just compensation for BPI’s building in the
amount fixed is unfounded and without legal basis (No). Actual taking of the building is not necessary
to grant consequential damages. Consequential damages are awarded if as a result of the
expropriation, the remaining property of the owner suffers from an impairment or decrease in value.
The rules on expropriation (in the Rules of Court) clearly provide a legal basis for the award of
consequential damages.

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FACTS
- On 12 February 1998, the DPWH filed with the Las Pinas RTC an expropriation case against
portions of the properties of BPI and of Bayani Villanueva in Pamplona, Las Piñas City.
- DPWH needed 281sqm of BPI's lot and 177sqm of Villanueva's lot for the construction of
the Zapote-Alabang Fly-Over
- Neither BPI nor Villanueva objected; hence, RTC constituted a Board of Commissioners to
determine the just compensation.
- In their Sept 29 1998 Report, the Board recommended P40,000.00 per square meter as the fair
market value.
- On 25 November 1998, the trial court in its Decision set the fair market value at P40,000.00
per square meter:
o The affected property of BPI consists of 281sqm and that of Defendant Villanueva
consists of 177sqm
o Hence the amount to be awarded to the defendants shall be computed as follows:
▪ BPI — 281 sq. meters x P40,000.00 = P11,240,000.00
Considering that the DPWH has deposited the amount of P632,250.00 with respect
to the property of BPI, BPI should receive P10,607,750.00.
▪ Villanueva — 177sqm x P40,000.00 = P7,080,000.00
With respect to Defendant Villanueva, the plaintiff deposited the provisional
amount of P2,655,000.00, hence, the remaining amount to be paid is
P4,425,000.00.

- BPI filed a Motion for New Trial to determine the just compensation of its building, which
was not included in the Decision that fixed the just compensation for the parcels of land.
- The trial court allowed BPI to present its evidence ex parte, since DPWH’s counsel failed to
appear
o After an ocular inspection conducted by the Commissioner, it found:
▪ That a new building was constructed
▪ That the building was moved back when it was constructed to conform with
the requirement of the Building Code
▪ Improvements were introduced around the building
- In its Decision dated 10 September 1999, the trial court held that just compensation for the
building was due and ordered DPWH to pay BPI the amount of P2,633,000.00
- DPWH moved for reconsideration of the 10 September 1999 Decision, on the ground that the
proceeding that fixed the just compensation was null and void for failure to comply with the
Rules of Court, which RTC granted—ordering for such decision to be set aside and vacated
- BPI also filed a motion for reconsideration stating that it substantially complied with the Rules,
but the RTC denied it
- RTC appointed the branch Clerk of court as the chairman of the Board of Commissioners, and
gave DPWH and BPI 10 days to submit their respective nominees and their oaths of office
- BPI complied, while DPWH submitted a Manifestation and Motion instead, objecting to the
propriety of paying just compensation for BPI’s building and praying that BPI’s claim for
additional just compensation be denied, since the government never took BPI’s building
o In its letter to the SolGen, it claimed:
▪ that the original plan subjecting the property was never implemented
▪ that the width of the sidewalk was reduced (from 2.50 to 2.35)…to avoid the costly
structure of that bank.
- BPI opposed
o claiming it was not aware that the original plan was not implemented, receiving
no correspondence from DPWH on the matter, except for a letter stating in part:

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 ▪ “We regret to inform you that adjustment of the RROW limit of our project along this
section is not possible as it will affect the effective width of the sidewalk designated
at 2.50 m. wide.”
o that even "if a 3-meter setback is observed, only 75% of the old building could be
utilized . . . [and] cutting the support system of the building . . . would affect the
building's structural integrity."
- RTC denied DPWH’s motion, and ruled that the demolition of the old building of BPI can
be construed as a consequential damage suffered by BPI as a result of the expropriation.
DPWH was thus ordered to submit its nominee to the Board of Commissioners.
- The Commissioners for both parties submitted its recommendation:
o Commissioner for DPWH recommended: P1,905,600, the market value indicated on
the tax declaration of said building
o Commissioner for BPI recommended: P2,633,000, based on the appraisal conducted
by an independent property consultant
- RTC adopted the recommendation by the Commissioner, and ordered DPWH to pay
accordingly
- DPWH filed an appeal with the CA, which CA dismissed, affirming the RTC’s order

ISSUE/S and HELD

1. W/N the award of additional just compensation for BPI’s building in the amount fixed is unfounded
and without legal basis – NO
RATIO
- Eminent domain is the authority and right of the State to take private property for public use
upon observance of due process of law and payment of just compensation. The State's power
of eminent domain is limited by the constitutional mandate that private property shall not be
taken for public use without just compensation.
- Just compensation is the full and fair equivalent of the property sought to be expropriated.
o The general rule is that the just compensation to which the owner of the condemned
property is entitled to is the market value.
▪ Market value is that sum of money which a person desirous but not compelled
to buy, and an owner willing but not compelled to sell, would agree on as a
price to be paid by the buyer and received by the seller.
▪ The general rule, however, is modified where only a part of a certain property
is expropriated. In such a case, the owner is not restricted to compensation for
the portion actually taken, he is also entitled to recover the consequential
damage, if any, to the remaining part of the property. 49
- In this case, petitioner questions the appellate court's Decision affirming the trial court's Order
granting additional just compensation for consequential damages for BPI's building
- Petitioner contends that BPI's building was "never taken" by petitioner, and that to award
consequential damages for the building was unfounded and without legal basis. In support of
its contention, petitioner relies on the letter of the DPWH to the SolGen stating that the
proposed sidewalk of 2.50 meters was reduced to 2.35 meters, thus leaving BPI's building
intact.
o The Court would like to stress that there is a stark absence in the records of any proof
that DPWH communicated its amended plan to BPI or to the trial court. On the other
hand, the trial court found that BPI was not notified of the reduction and had relied
only on the DPWH letter saying that it was not possible to reduce the width of the
sidewalk
- No actual taking of the building is necessary to grant consequential damages.
Consequential damages are awarded if as a result of the expropriation, the remaining

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 property of the owner suffers from an impairment or decrease in value. The rules on
expropriation clearly provide a legal basis for the award of consequential damages.
o Section 6 of Rule 67 of the Rules of Court provides:
. . . The commissioners shall assess the consequential damages to the property not taken and
deduct from such consequential damages the consequential benefits to be derived by the owner
from the public use or public purpose of the property taken, the operation of its franchise by the
corporation or the carrying on of the business of the corporation or person taking the property.
But in no case shall the consequential benefits assessed exceed the consequential damages
assessed, or the owner be deprived of the actual value of his property so taken.

DISPOSTIVE PORTION
WHEREFORE, we DENY the petition. We AFFIRM the Court of Appeals' Decision
dated 14 September 2011 and Resolution dated 06 August 2012 in CA-G.R. CV No. 79843.