CASE 2017-0030: EVERGREEN MANUFACTURING CORPORATION, PETITIONER, -VERSUS REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, RESPONDENT; REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS PETITIONER, -VERSUS EVERGREEN MANUF’ACTURING CORPORATION (G.R. NO. 218628/ G.R. NO. 218631, 06 SEPT 2017, CARPIO, ACTING C.J.) (SUBJECT/S: SC TACKLES FACTS WHEN RTC AND CA HAVE DIFFERENT DECISIONS; EXPROPRIATION; DETERMINATION OF JUST COMPENSATION; DETERMINATION OF INTEREST) (BRIEF TITLE: EVERGREEN VS. REPUBLIC)
DISPOSITIVE:
“WHEREFORE, premises considered, the Court resolves as follows:
- The petition in G.R. No. 218631 is PARTIALLY GRANTED. The assailed decisions of the Court of Appeals and Regional Trial Court are AFFIRMED with MODIFICATION that the just compensation for the 173 .08 square meters of the expropriated property is P33,050.00 per square meter, or a total of PS,720,294.00.
- The petition in G.R. No. 218628 is PARTIALLY GRANTED.
(a) The claim for legal interest on the difference between the final amount of just compensation of PS,720,294.00 and the initial deposit made by the Republic of the Philippines, represented by the Department of Public Works and Highways, in the amount of Pl,038,480.00 shall earn legal interest of 12% per annum from the date of taking or 21 April 2006 until 30 June 2013.
(b) The difference between the total amount of just compensation and the initial deposit shall earn legal interest of 6% per annum from 1 July 2013 until the finality of the Decision.
(c) The total amount of just compensation shall earn legal interest of 6% per annum from the finality of this Decision until full payment thereof.
SO ORDERED.”
SUBJECTS/DOCTRINES/DIGEST:
WHAT HAPPENED IN THIS CASE?
THIS CASE INVOLVES EXPROPRIATION OF LAND BELONGING TO EVERGREEN. RTC PASIG APPOINTED COMMISSIONERS TO DETERMINE THE JUST COMPENSATION. RTC RULED THAT JUST COMPENSATION IS P25,000.00 PER SQUARE METER. ON APPEAL, CA RULED THAT IT SHOULD BE P35,000.00 PER SQUARE METER. BECAUSE OF CONFLICT IN RTC AND CA RULINGS, SUPREME COURT SAID IT SHALL RESOLVE THE FACTUAL ISSUES. SUPREME COURT DECIDED ON THE JUST COMPENSATION AND ALSO ON THE INTEREST DUE.
WHAT SHOULD BE RAISED IN A PETITION FOR REVIEW ON CERTIORARI UNDER RULE 45?
ONLY QUESTIONS OF LAW SHOULD BE RAISED IN A PETITION FOR REVIEW ON CERTIORARI UNDER RULE 45. FACTUAL FINDINGS OF THE LOWER COURTS WILL GENERALLY NOT BE DISTURBED.
WHAT ARE THE EXCEPTIONS TO THIS RULE?
EXCEPTIONS TO THE RULE THAT FACTUAL FINDINGS OF THE COURT OF APPEALS ARE BINDING ON THE COURT ARE:
(1) WHEN THE FINDINGS ARE GROUNDED ENTIRELY ON SPECULATIONS, SURMISES OR CONJECTURES;
(2) WHEN THE INFERENCE MADE IS MANIFESTLY MISTAKEN, ABSURD OR IMPOSSIBLE;
(3) WHEN THERE IS GRAVE ABUSE OF DISCRETION;
(4) WHEN THE JUDGMENT IS BASED ON A MISAPPREHENSION OF FACTS;
(5) WHEN THE FINDINGS OF FACT ARE CONFLICTING;
(6) WHEN IN MAKING ITS FINDINGS THE COURT OF APPEALS WENT BEYOND THE ISSUES OF THE CASE, OR ITS FINDINGS ARE CONTRARY TO THE ADMISSIONS OF BOTH THE APPELLANT AND THE APPELLEE;
(7) WHEN THE FINDINGS ARE CONTRARY TO THAT OF THE TRIAL COURT;
(8) WHEN THE FINDINGS ARE CONCLUSIONS WITHOUT CITATION OF SPECIFIC EVIDENCE ON WHICH THEY ARE BASED;
(9) WHEN THE FACTS SET FORTH IN THE PETITION AS WELL AS IN THE PETITIONER’S MAIN AND REPLY BRIEFS ARE NOT DISPUTED BY THE RESPONDENT;
(10) WHEN THE FINDINGS OF FACT ARE PREMISED ON THE SUPPOSED ABSENCE OF EVIDENCE AND CONTRADICTED BY THE EVIDENCE ON RECORD; OR
(11) WHEN THE COURT OF APPEALS MANIFESTLY OVERLOOKED CERTAIN RELEVANT FACTS NOT DISPUTED BY THE PARTIES, WHICH, IF PROPERLY CONSIDERED, WOULD JUSTIFY A DIFFERENT CONCLUSION.18
WHAT IS THE EXCEPTION APPLICABLE TO THIS CASE?
IN THIS CASE, GIVEN THAT THE FINDINGS ON THE AMOUNT OF JUST COMPENSATION OF THE RTC AND CA DIFFER, SC FIND THAT A REVIEW OF THE FACTS IS IN ORDER.
WHAT IS THE DEFINITION OF JUST COMPENSATION?
IT IS FAIR AND FULL EQUIVALENT OF THE LOSS.
IN EXPROPRIATION CASES IT IS DEFINED “AS THE FULL AND FAIR EQUIVALENT OF THE PROPERTY TAKEN FROM ITS OWNER BY THE EXPROPRIATOR.
WHAT IS THE TRUE MEASURE OF JUST COMPENSATION?
THE TRUE MEASURE IS NOT THE TAKER’S GAIN BUT THE OWNER’S LOSS. THE WORD ‘JUST’ IS USED TO MODIFY THE MEANING OF THE WORD ‘COMPENSATION’ TO CONVEY THE IDEA THAT THE EQUIVALENT TO BE GIVEN FOR THE PROPERTY TO BE TAKEN SHALL BE REAL, SUBSTANTIAL, FULL AND AMPLE.”20
SINCE ASCERTAINMENT OF JUST COMPENSATION IS A JUDICIAL PREROGATIVE CAN THE COURT DISPENSE WITH THE APPOINTMENT OF COMMISSIONERS?
THE APPOINTMENT OF COMMISSIONERS TO ASCERTAIN JUST COMPENSATION FOR THE PROPERTY SOUGHT TO BE TAKEN IS A MANDATORY REQUIREMENT IN EXPROPRIATION CASES.
CAN THE FINDINGS OF THE COMMISSIONERS BE DISREGARDED?
YES, FOR VALID REASONS; THAT IS, WHERE THE COMMISSIONERS HAVE· APPLIED ILLEGAL PRINCIPLES TO THE EVIDENCE SUBMITTED TO THEM, WHERE THEY HAVE DISREGARDED A CLEAR PREPONDERANCE OF EVIDENCE, OR WHERE THE AMOUNT ALLOWED IS EITHER GROSSLY INADEQUATE OR EXCESSIVE.
AT WHAT POINT IN TIME SHOULD THE VALUE OF COMPENSATION BE DETERMINED?
AT THE TIME OF THE TAKING. IN THIS CASE IN 2004. TWO COMMISSIONERS CONSIDER DATA EXISTING IN 2000. THUS THEIR FIGURE IS WRONG.
SHOULD THE COMMISSIONERS CONFINE THEMSELVES TO DOCUMENTARY EVIDENCE?
NO.
THEY MAY CONSIDER THE THE LOCATION OF THE SUBJECT PREMISES, AS WELL AS ITS SIZE AND PROSPECTIVE USES, THE NEIGHBORHOOD, AND THE NEARBY ESTABLISHMENTS.
THE REPUBLIC INSISTS THAT THE ZONAL VALUE OF THE PROPERTY AT THE TIME OF THE TAKING IS SUFFICIENT? IS THIS CORRECT?
NO. ZONAL VALUATION, ALTHOUGH ONE OF THE INDICES OF THE FAIR MARKET VALUE OF REAL ESTATE, CANNOT BY ITSELF BE THE SOLE BASIS OF JUST COMPENSATION IN EXPROPRIATION CASES.31
NOW THAT THE TRIAL COURT ERRED IN DETERMINING JUST COMPENSATION, IS IT PROPER TO JUST REMAND THE CASE TO THE TRIAL COURT?
NO. REMANDING THE CASE WOULD UNNECESSARILY DELAY THE PAYMENT OF JUST COMPENSATION DUE TO EVERGREEN, AND IT WOULD ALSO INCREASE THE AMOUNT OF INTEREST THAT WOULD ACCRUE AGAINST REPUBLIC-DPWH.
IS INTEREST DUE ON THE BALANCE OF THE UNPAID COMPENSATION?
YES COMPUTED FROM THE TIME OF FILING OF THE CASE UNTIL JUDGMENT ATTAINED FINALITY BECAUSE JUST COMPENSATION MEANS JUST AND TIMELY PAYMENT.
PROMPT PAYMENT MEANS THE PAYMENT IN FULL OF THE JUST COMPENSATION AS FINALLY DETERMINED BY THE COURTS.
ABSENT FULL PAYMENT, INTEREST ON THE BALANCE WOULD NECESSARILY BE DUE ON THE UNPAID AMOUNT.
INTEREST ON THE UNPAID COMPENSATION BECOMES DUE IF THERE IS NO FULL COMPENSATION FOR THE EXPROPRIATED PROPERTY, IN ACCORDANCE WITH THE CONCEPT OF JUST COMPENSATION.
WITHOUT PROMPT PAYMENT, THE PROPERTY OWNER SUFFERS THE IMMEDIATE DEPRIVATION OF BOTH HIS LAND AND ITS FRUITS OR INCOME. THE OWNER’S LOSS, OF COURSE, IS NOT ONLY HIS PROPERTY BUT ALSO ITS INCOME-GENERATING POTENTIAL.
IF FULL COMPENSATION IS NOT PAID. FOR THE PROPERTY TAKEN, THEN THE STATE MUST PAY FOR THE SHORTFALL IN THE EARNING POTENTIAL IMMEDIATELY LOST DUE TO THE TAKING, AND THE ABSENCE OF REPLACEMENT PROPERTY FROM WHICH INCOME CAN BE DERIVED.
INTEREST ON THE UNPAID COMPENSATION BECOMES DUE AS COMPLIANCE WITH THE CONSTITUTIONAL MANDATE ON EMINENT DOMAIN AND AS A BASIC MEASURE OF FAIRNESS.
THUS, INTEREST IN EMINENT DOMAIN CASES “RUNS AS A MATTER OF LAW AND FOLLOWS AS A MATTER OF COURSE FROM THE RIGHT OF THE LANDOWNER TO BE PLACED IN AS GOOD A POSITION AS MONEY CAN ACCOMPLISH, AS OF THE DATE OF TAKING.
IN THE CASE OF UNLIQUIDATED DAMAGES, THESE DO NOT EARN INTEREST UNTIL THE AMOUNT IS ASCERTAINED. CAN THIS PRINCIPLE BE NOT APPLIED?
NO BECAUSE INTEREST AWARD IS NOT ANCHORED ON LAW OF CONTRACTS BUT ON THE OWNER’S CONSTITUTIONAL RIGHT TO JUST COMPENSATION.
WHAT INTEREST RATES SHALL APPLY?
WITH RESPECT TO THE AMOUNT OF INTEREST ON THE DIFFERENCE BETWEEN THE INITIAL PAYMENT AND FINAL AMOUNT OF JUST COMPENSATION AS ADJUDGED BY THE COURT, WE HAVE UPHELD IN EASTERN SHIPPING LINES, INC. V. COURT OF APPEALS, 45 AND IN SUBSEQUENT CASES THEREAFTER,46 THE IMPOSITION OF 12% INTEREST RATE FROM THE TIME OF TAKING WHEN THE PROPERTY OWNER WAS DEPRIVED OF THE PROPERTY, UNTIL 1 JULY 2013, WHEN THE LEGAL INTEREST ON LOANS AND FORBEARANCE OF MONEY WAS REDUCED FROM 12% TO 6% PER ANNUM BY BSP CIRCULAR NO. 799. ACCORDINGLY, FROM 1 JULY 2013 ONWARDS, THE LEGAL INTEREST ON THE DIFFERENCE BETWEEN THE FINAL AMOUNT AND INITIAL PAYMENT IS 6% PER ANNUM.
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