Apo Fruits Corp. vs.

Court of Appeals December 4, 2009 | Bersamin | MR of the Decision of the SC Third Division

Facts: Apo Fruits Corp. (AFC) and Hijo Plantation Inc. (HPI) were owners of 5 parcels of land (1338.60 has.) located in San Isidro, Tagum, Davao. On 12 October 1995, the two voluntarily offered to sell the properties to the DAR. DAR offered P86.9M for AFCs land and P164.40 for HPIs land. AFC, HPI and DAR cannot agree on a price hence the Complaint for Determination of Just Compensation was filed before the DAR Adjudication Board on 14 February 1997. The DARAB failed to render a decision on the valuation of the land for three years. But nevertheless, the government deposited P26M into AFCs account and P45M into HPIs account as down payment in 1996. The DAR also caused the titling of the land in the name of the Republic of the Philippines. Later, titles were given to farmers under the CARP. Due to DARABs failure to adjudicate, AFC and HPI filed a complaint for determination of just compensation before the RTC of Davao which rendered a decision in favor of AFC and HPI. The RTC ruled, based on the reports it gathered from assessors, that the purchase price should be higher than what was offered by DAR; that the purchase price should be at P103.33/ sq. m; that DAR is to pay AFC and HPI a total of P1.38B. Upon MR, the RTC modified its earlier ruling and added that the DAR should, in addition to the amount of just compensation, pay AFC and HPI interest at a rate of 12% per annum computed from the time the complaint was filed until the finality of the decision. DAR appealed to the CA, the CA reversed the RTC. The case was then elevated to the SC Third Division where the Court reversed the CA ruling and affirmed the RTC decision with a slight modification that the order to pay interest at 12% per annum be deleted in its entirety. Hence this Motion for Reconsideration.

fair value of the property as between one who receives and one who desires to sell. It is fixed at the time of the actual taking by the State. Thus, if property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interests on its just value, to be computed from the time the property is taken up to the time when compensation is actually paid or deposited with the court. In fine, between the taking of the property and the actual payment, legal interests accrue in order to place the owner in a position as good as (but not better than) the position he was in before the taking occurred. In the American case of Warren vs. St. Paul & Pacific Railroad Co., the US Supreme Court held that while the assessed value, if paid at the date taken for the assessment, might be just compensation, it certainly would not be, if payment be delayed, as might happen in many cases, and as did happen in this case, till several years after that time. The difference is the same as between as between a sale for cash in hand and sale on time. It is explicit from the case of LBP vs. Wycoco that interest on the just compensation is imposed only in case of delay in the payment thereof which must be sufficiently established. Given the foregoing, we find that the imposition of interest on the award of just compensation is not justified and should therefore be deleted. It must be emphasized that "pertinent amounts were deposited in favor of AFC and HPI within fourteen months after the filing by the latter of the Complaint for determination of just compensation before the RTC". It is likewise true that AFC and HPI already collected P149.6 and P262 million, respectively, representing just compensation for the subject properties. Clearly, there is no unreasonable delay in the payment of just compensation which should warrant the award of 12% interest per annum in AFC and HPIs favor.

Issue/Held: WoN AFC and HPI were entitled to the payment of interest in addition to the amount of just compensation that is due them. NO. Ratio: The taking of property under the CARL is an exercise by the State of the power of eminent domain. A basic limitation on the States power of eminent domain is the constitutional directive that private property shall not be taken for public use without just compensation. Just compensation refers to the sum equivalent to the market value of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal action and competition, or the