Secretary Of Dpwh V Tecson (2013)

[03.1] SECRETARY OF THE DERPARTMENT OF PUBLIC WORKS AND HIGHWAYS v SPS. TECSON G.R. No. 179334 | July 1, 2013 | Justice Peralta | Freya Patron

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PETITIONERS: Secretary of the Department of Public Works and Highways and District Engineer Celestino Contreras RESPONDENTS: Sps. Heracleo and Ramona Tecson TOPIC: Eminent Domain CASE SUMMARY: Sps. Tecson are co-owners of a parcel of land in Maloloas, Bulacan. This was among the properties taken by the government sometime in 1940 without the owners’ consent and without the necessary expropriation proceedings and used for the construction of the MacArthur Highway. The spouses demanded payment of the FMV of the land, but was offered another amount which the spouses did not approve of. Their demand went unheeded, so they filed a complaint for recovery of possession with damages against petitioners. Instead of filing an answer, they moved for dismissal of the complaint. Among the grounds is prescription. The amount of the compensation owed them was also disputed. The Court held that the issues of prescription and laches are not proper issues for resolution because they were not part of the pre-trial brief. But even if they were, the action would still not barred because where private property is taken for public use without first acquiring title thereto either through expropriation or negotiated sale, the owner’s action to recover the land or the value does not prescribe. As to the issue on just compensation, the Court held that it should be fixed at the time of the actual taking by the government. Therefore, the just compensation should be based on the value in 1940. Even if the amount is little compared to the value at present, that is what the rule says. Nevertheless, they are entitled to damages since their property was taken without the benefit of expropriation proceedings. DOCTRINE: Just compensation is “the fair value of the property as between one who receives, and one who desires to sell, x x x fixed at the time of the actual taking by the government.” This rule holds true when the property is taken before the filing of an expropriation suit, and even if it is the property owner who brings the action for compensation. FACTS:  Spouses Tecson are co-owners of a parcel of land with an area of 7,268 sq. m. located in San Pablo, Malolos, Bulacan and covered by TCT. The parcel of land was among the properties taken by the government sometime in

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1940 without the owners’ consent and without the necessary expropriation proceedings and used for the construction of the MacArthur Highway. In a letter, Sps. Tecson demanded the payment of the FMV of the land. Contreras, then District Engineer of the First Bulacan Engineering District of DPWH, offered to pay the land at P0.70/sq. m. per Resolution of the Provincial Appraisal Committee of Bulacan. Unsatisfied with the offer, respondents demanded for the return of their property or the payment of compensation at the current FMV. Their demand remained unheeded. Respondents filed a Complaint for recovery of possession with damages against petitioners, praying that they be restored to the possession of the land + attorney’s fees. Respondents claimed that the land was assessed at P2,543,800. Instead of filing their Answer, petitioners moved for the dismissal of the complaint on the ff. grounds: o The suit is against the State which may not be sued without its consent o The case has already prescribed o Respondents have no COA for failure to exhaust administrative remedies o Respondents are entitled to compensation. They should be paid only the value of the property in 1940 or 1941. The RTC issued an Order granting respondents’ MTD based on the doctrine of state immunity from suit. Upon appeal to the CA, the CA found that the doctrine did not apply because the recovery of compensation is the only relief available to the landowner. Contreras also earlier offered the payment of compensation to which respondents are entitled to recover for the government. The decision became final and trial proceeded in the RTC. The Branch COC was initially appointed as the Commissioner and designated as the Chairman of the Committee that would determine just compensation, but the case was referred to the Provincial Appraisal Committee (PAC). The PAC recommended the amount of P1,500 per sq.m as just compensation. RTC rendered a Decision – DPWH directed to pay P1,500/sq.m. On appeal, CA affirmed with modification that the just compensation stated should earn 6% interest from filing of action until full payment. In its appeal before the CA, petitioners raised the issues of prescription and laches, but CA brushed these issues aside. Before the SC, the petitioners insist that the action is barred by prescription since it had been filed 54 years after the accrual of the action in 1940. They also allege that just compensation should be based on the value of the property at the time of taking in 1940 and not at the time of payment.

ISSUE and RULING: WON the action is barred by prescription or laches. (NO)  The case stemmed from an action for recovery of possession with damages filed by respondents against petitioners. But it revolves around the taking of the lot by petitioners for the construction of the MacArthur Highway. There is taking when the expropriator enters private property not only for a momentary period but for a permanent duration, or for the purpose of devoting the property to public use in such a manner as to oust the owner and deprive him of all beneficial employment thereof.  The property was taken by petitioners without the benefit of expropriation proceedings for the construction of the MacArthur Highway. After the lapse of more than 50 years, the property owners sought recovery of possession of their property.  But the issues of prescription and laches are NOT proper issues for resolution because they were not included in the pre-trial order. However, even if these issues were dealt with, they will still fail. Laches is principally a doctrine of equity which is applied to avoid recognizing a right when to do so would result in a clearly inequitable situation or an injustice. There is nothing inequitable in giving due course to respondents’ claim. Both equity and law direct that a property owner should be compensated if his property is taken for public use. Neither shall prescription bar respondents’ claim following the long-standing rule “that where private property is taken by the Government for public use without first acquiring title thereto either through expropriation or negotiated sale, the owner’s action to recover the land or the value thereof does not prescribe”

is taken before the filing of an expropriation suit, and even if it is the property owner who brings the action for compensation.  The RTC and CA found that the FMV of the property in 1940 was P0.70/sq.m. Therefore it should be used in determining the amount due respondents instead of the higher value which is P1,500. While disparity in the amounts is obvious and may appear inequitable to respondents as they would be receiving such outdated valuation after a very long period. It is equally true that they are also remiss in guarding against the cruel effects of belated claim. The concept of just compensation DOES NOT imply fairness to the property owner alone. Compensation must be just not only to the property owner, but also to the public which ultimately bears the cost of expropriation.  Petitioners had been occupying the property for more than 50 years without the benefit of expropriation proceedings. In taking respondents’ property without the benefit of expropriation proceedings and without payment of just compensation, petitioners acted in disregard of respondents’ proprietary rights which cannot be allowed by the Court. For this they are entitled to compensation in the form of actual/compensatory damages (6% on value of land at the time of taking in 1940 until full payment).

WON the just compensation should be fixed at the time of the actual taking by the government. (YES)  When a property is taken by the government for public use, jurisprudence provides for the remedies available to a landowner. The owner may recover his property if its return is feasible or, if it is not, the aggrieved owner may demand payment of just compensation for the land taken. For failure of respondents to question the lack of expropriation proceedings for a long period of time, they are deemed to have waived and are estopped form assailing the power of the government to expropriate or the public use for which the power was exercised. What is left to respondents is the right of compensation. The RTC and CA found that respondents are entitled to compensation. The only issue left is the propriety of the amount awarded to respondents. Just compensation is the fair value of the property as between one who receives, and one who desires to sell, fixed at the time of the actual taking by the government. This rule is true when the property

DISSENTING AND CONCURRING OPINION – JUSTICE VELASCO  Expropriation is an exercise of the government’s power of eminent domain. As an inherent attribute of the government, this power is fundamentally limitless if not restrained by the Bill of Rights. Without the limitations thus imposed, the exercise of the power of eminent domain can become repressive. Thus, the Bill of Rights should always be a measure and guarantee of protecting certain areas of a person’s life, liberty, and property against the government’s abuse of power.  In the instant case, it is not disputed that DPWH illegally took the subject lot without the consent of respondents and the necessary expropriation proceedings. To make matters worse, almost 55 years have already passed from the time of taking, yet DPWH still failed to institute condemnation proceedings. This is clearly indicative of DPWH’s lack of intention to formally expropriate the subject property and consequently deny respondents of the elementary due process of law. Thus, when respondents were constrained to file a complaint before the trial court, they were the ones who, in effect,

DISPOSITIVE: WHEREFORE, the petition is PARTIALLY GRANTED. The CA Decision is MODIFIED, in that the valuation of the subject property owned by respondents shall be P0.70 instead of P1,500 per sq.m. with interest at 6% per annum from date of taking in 1940 instead of March 17, 1995 until full payment.

commenced the inverse condemnation proceedings, which is ironic. The prevalence of the taking of a subject property without the owner’s consent and the necessary expropriation proceedings does not, and should not, cure its illegality.  If the Court is to peg the reckoning value of the just compensation to PhP 0.70, it would, in effect, be condoning the wrongful act of DPWH in taking the subject property in utter disregard of respondents’ property rights and violation of the due process of laws. Thus, while this Court has previously ruled, in a number of cases, that the value of the property at the time of the taking which is controlling in the determination of the value of just compensation, it is my submission that an exception to the foregoing ruling must be made in cases where no condemnation proceedings were instituted after a substantial period of time from the time of illegal taking. Pertinently, there is “illegal taking” when there is taking of a property without the benefit of expropriation proceedings and without payment of just compensation, as in the instant case. When the illegal taking is compounded with the failure of the condemnor to institute condemnation proceedings after a substantial period of time, i.e., 55 years from the time of taking, then it is not really hard to grasp why pegging the basis for valuation of just compensation at the time of illegal taking is erroneous, if not utterly reprehensible.  The Court cannot reluctantly close its eyes to the likelihood that the invariable application of the determination of just compensation at the time of the actual taking, as in the cases cited in the ponencia, will grant government agencies and instrumentalities the license to disregard the property rights of landowners, violate the Constitution’s proviso on due process of laws, and render nugatory statutory and procedural laws on expropriation proceedings of private properties for public use. Both the RTC of Malolos City and the CA were, therefore, correct in granting just compensation to respondents in the amount of PhP 1,500 per square meter, as recommended by the PAC. This way, government agencies and instrumentalities would think twice before taking any unwarranted short cuts in condemning private properties that violate the owners’ right to due process of laws as enshrined in the Bill of Rights. SEPARATE OPINION – JUSTICE LEONEN  Gross injustice will result if the amount that will be awarded today will be based simply on the value of the property at the time of the actual taking. Should the value of the property been awarded to the owners at the time of the taking, they would have used it for other profitable uses. Hence, the failure of the State to have paid at the proper time deprives the owners of the true value of the property that they had. The proper way to resolve this would be to use the economic concept of present value. This concept is

usually summarized this way: Money received today is more valuable than the same amount of money tomorrow. By applying this concept, we are able to capture just compensation in a more holistic manner. We take into consideration the potential of money to increase (or decrease) in value across time. If the parties in an expropriation case would have perfect foresight, they would have known the amount of FMV at the time of taking.  If this amount of money was deposited in a bank pending expropriation proceedings, by the time proceedings are over, the property owner would be able to withdraw the principal (fair market value at the time of taking) and the interest earnings it has accumulated over the time of the proceedings. Economists have devised a simple method to compute for the value of money in consideration of this future interest earnings.