TEODORO ALMIROL V.

REGISTER OF DEEDS OF AGUSAN

G.R. No. L-22486 March 20, 1968
FACTS:
On June 28, 1961 Teodoro Almirol purchased from Arcenio Abalo a parcel of land situated in the municipality of
Esperanza, province of Agusan, and covered by original certificate of title P-1237 in the name of "Arcenio Abalo, married
to Nicolasa M. Abalo." Sometime in May, 1962 Almirol went to the office of the Register of Deeds of Agusan in Butuan
City to register the deed of sale and to secure in his name a transfer certificate of title. Registration was refused by the
Register of Deeds upon the following grounds: 1.) That Original Certificate of Title No. P-1237 is registered in the name of
Arcenio Abalo, married to Nicolasa M. Abalo, and by legal presumption, is considered conjugal property; 2.) That in the
sale of a conjugal property acquired after the effectivity of the New Civil Code it is necessary that both spouses sign the
document; but 3.) Since, as in this case, the wife has already died when the sale was made, the surviving husband cannot
dispose of the whole property without violating the existing law. In view of such refusal, Almirol went to the Court of First
Instance of Agusan on a petition for mandamus to compel the Register of Deeds to register the deed of sale and to issue
to him the corresponding transfer certificate of title. In its resolution of October 16, 1963 the lower court, declaring that
"mandamus does not lie . . . because the adequate remedy is that provided by Section 4 of Rep. Act 1151", dismissed the
petition, with costs against the petitioner. Hence, this present appeal.

ISSUE:
Whether or not the Register of Deeds was justified in refusing to register the transaction appealed to by the
petitioner.

HELD:
No. Although the reasons relied upon by the respondent show a sincere desire on his part to maintain inviolate
the law on succession and transmission of rights over real properties, these do not constitute legal grounds for his refusal
to register the deed. Whether a document is valid or not, is not for the register of deeds to determine; this function belongs
properly to a court of competent jurisdiction. A register of deeds is entirely precluded by section 4 of Republic Act 1151
from exercising his personal judgment and discretion when confronted with the problem of whether to register a deed or
instrument on the ground that it is invalid. For under the said section, when he is in doubt as to the proper step to be taken
with respect to any deed or other instrument presented to him for registration, all that he is supposed to do is to submit
and certify the question to the Commissioner of Land Registration who shall, after notice and hearing, enter an order
prescribing the step to be taken on the doubtful question.
LBP vs Orilla
The Facts

This is an appeal via a petition
[2]
for review on certiorari under Rule 45 of the Rules of Court of the Decision
[3]
of the
Court of Appeals dated July 29, 2002 in CA-G.R. SP No. 63691 entitled Land Bank of the Philippines v. Hon. Venancio J.
Amila, in his capacity as Presiding Judge, Regional Trial Court, Branch 3, Tagbilaran City, Spouses Placido Orilla and
Clara Dy Orilla. Said Decision affirmed the Order
[4]
dated December 21, 2000 of the Regional Trial Court (RTC), Branch
3, Tagbilaran City, sitting as a Special Agrarian Court (SAC) in Civil Case No. 6085.

Spouses Placido and Clara Orilla (respondents) were the owners of Lot No. 1, 11-12706, situated in Bohol,
containing an area of 23.3416 hectares and covered by Transfer Certificate of Title No. 18401. In the latter part of
November 1996, the Department of Agrarian Reform Provincial Agrarian Reform Office (DAR-PARO) of Bohol sent
respondents a Notice of Land Valuation and Acquisition dated November 15, 1996 informing them of the compulsory
acquisition of 21.1289 hectares of their landholdings pursuant to the Comprehensive Agrarian Reform Law (Republic Act
[RA] 6657) for P371,154.99 as compensation based on the valuation made by the Land Bank of the Philippines
(petitioner).

Respondents rejected the said valuation. Consequently, the Provincial Department of Agrarian Reform
Adjudication Board (Provincial DARAB) conducted a summary hearing on the amount of just compensation. Thereafter,
the Provincial DARAB affirmed the valuation made by the petitioner.

Unsatisfied, respondents filed an action for the determination of just compensation before the Regional Trial Court
(as a Special Agrarian Court [SAC]) of TagbilaranCity. The case was docketed as Civil Case No. 6085 and was raffled to
Branch 3.

After trial on the merits, the SAC rendered a Decision
[5]
dated November 20, 2000, the dispositive portion of which
reads

WHEREFORE, judgment is hereby rendered fixing the just compensation of the land of petitioner
subject matter of the instant action at P7.00 per square meter, as only prayed for, which shall earn legal
interest from the filing of the complaint until the same shall have been fully paid. Furthermore,
respondents are hereby ordered to jointly and solidarily indemnify the petitioners their expenses for
attorneys fee and contract fee in the conduct of the appraisal of the land by a duly licensed real estate
appraiser Angelo G. Fajardo of which petitioner shall submit a bill of costs therefor for the approval of the
Court.

SO ORDERED.
[6]



On December 11, 2000, petitioner filed a Notice of Appeal.
[7]
Subsequently, on December 15, 2000, respondents
filed a Motion for Execution Pending Appeal
[8]
pursuant to Section 2, Rule 39 of the 1997 Rules of Civil Procedure and the
consolidated cases of Landbank of the Philippines v. Court of Appeals, et al.
[9]
and Department of Agrarian Reform v.
Court of Appeals, et al.
[10]
Respondents claimed that the total amount of P1,479,023.00 (equivalent to P7.00 per square
meter for 21.1289 hectares), adjudged by the SAC as just compensation, could then be withdrawn under the authority of
the aforementioned case.

Meanwhile, on December 18, 2000, the DAR filed its own Notice of Appeal
[11]
from the SAC Decision
dated November 20, 2000. The DAR alleged in its Notice that it received a copy of the SAC Decision only on December
6, 2000.

On December 21, 2000, the SAC issued an Order
[12]
granting the Motion for Execution Pending Appeal, the
decretal portion of which reads

WHEREFORE, the herein motion is granted and the petitioners are hereby ordered to post bond
equivalent to one-half of the amount due them by virtue of the decision in this case. The respondent Land
Bank of the Philippines, is therefore, ordered to immediately deposit with any accessible bank, as may be
designated by respondent DAR, in cash or in any governmental financial instrument the total amount due
the petitioner-spouses as may be computed within the parameters of Sec. 18(1) of RA
6657. Furthermore, pursuant to the Supreme Court decisions in Landbank of the Philippines vs. Court of
Appeals, et al. G.R. No. 118712, promulgated on October 6, 1995 and Department of Agrarian Reform
vs. Court of Appeals, et al., G.R. No. 118745, promulgated on October 6, 1995, the petitioners may
withdraw the same for their use and benefit consequent to their right of ownership thereof.
[13]



On December 25, 2000, respondents filed a Motion for Partial Reconsideration
[14]
of the amount of the bond to be
posted, which was later denied in an Order
[15]
datedJanuary 11, 2001.

Petitioner filed a Motion for Reconsideration
[16]
on December 27, 2000, which was likewise denied in an
Order
[17]
dated December 29, 2000.

On March 13, 2001, petitioner filed with the Court of Appeals a special civil action
[18]
for certiorari and prohibition
under Rule 65 of the Rules of Court with prayer for issuance of a temporary restraining order and/or preliminary
injunction. It questioned the propriety of the SAC Order granting the execution pending appeal. Respondents and the
presiding judge of the SAC, as nominal party, filed their respective comments
[19]
on the petition.

In its Decision dated July 29, 2002, the Court of Appeals dismissed the petition on the ground that the assailed SAC
Order dated December 21, 2000 granting execution pending appeal was consistent with justice, fairness, and equity, as
respondents had been deprived of the use and possession of their property pursuant to RA 6657 and are entitled to be
immediately compensated with the amount as determined by the SAC under the principle of prompt payment of just
compensation.

Petitioner filed a Motion for Reconsideration of the Court of Appeals Decision, but the same was denied in a
Resolution dated February 5, 2003. Hence, this appeal.

Petitioner anchors its petition on the following grounds:

I. THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE RESPONDENTS
WERE ENTITLED TO EXECUTION PENDING APPEAL OF THE COMPENSATION FIXED BY
THE SAC BASED ON THE PRINCIPLE OF PROMPT PAYMENT OF JUST COMPENSATION,
EVEN THOUGH THE PRINCIPLE OF PROMPT PAYMENT IS SATISFIED BY THE PAYMENT
AND IMMEDIATE RELEASE OF THE PROVISIONAL COMPENSATION UNDER SECTION
16(E) OF RA 6657, UPON SUBMISSION OF THE LEGAL REQUIREMENTS, IN ACCORDANCE
WITH THE RULING OF THIS HONORABLE COURT IN THE CASE OF LAND BANK OF THE
PHILIPPINES V. COURT OF APPEALS, PEDRO L. YAP, ET AL., G.R. NO. 118712, OCTOBER
6, 1995 AND JULY 5, 1996, AND NOT BY EXECUTION PENDING APPEAL OF THE
COMPENSATION FIXED BY THE SAC.

II. THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN UPHOLDING THE
SAC ORDER FOR EXECUTION PENDING APPEAL WHICH WAS ISSUED WITHOUT ANY
GOOD REASON RECOGNIZED UNDER EXISTING JURISPRUDENCE AND PROPER
HEARING AND RECEPTION OF EVIDENCE IN VIOLATION OF SECTION 2(A), RULE 39 OF
THE RULES OF COURT.


For its first ground, petitioner asserts that, according to our ruling in Land Bank of the Philippines v. Court of
Appeals,
[20]
the principle of prompt payment of just compensation is already satisfied by the concurrence of two (2)
conditions: (a) the deposits made by petitioner in any accessible bank, equivalent to the DAR/LBP valuation of the
expropriated property as provisional compensation, must be in cash and bonds as expressly provided for by Section 16(e)
of RA 6657, not merely earmarked or reserved in trust; and (b) the deposits must be immediately released to the
landowner upon compliance with the legal requirements under Section 16
[21]
of RA 6657, even pending the final judicial
determination of just compensation.

Anent the second ground, petitioner argues that the good reasons cited by the SAC, as affirmed by the Court of
Appeals, namely: (1) that execution pending appeal would be in consonance with justice, fairness, and equity considering
that the land had long been taken by the DAR; (2) that suspending the payment of compensation will prolong the agony
that respondents have been suffering by reason of the deprivation of their property; and (3) that it would be good and
helpful to the economy are not valid reasons to justify the execution pending appeal, especially because the execution
was granted without a hearing.

This appeal should be denied.

As the issues raised are interrelated, they shall be discussed jointly.

Execution of a judgment pending appeal is governed by Section 2(a) of Rule 39 of the Rules of Court, to wit:

SEC. 2. Discretionary execution.

(a) Execution of a judgment or a final order pending appeal. -- On motion of the prevailing party
with notice to the adverse party filed in the trial court while it has jurisdiction over the case and is in
possession of either the original record or the record on appeal, as the case may be, at the time of the
filing of such motion, said court may, in its discretion, order execution of a judgment or final order even
before the expiration of the period to appeal.

x x x x

Discretionary execution may only issue upon good reasons to be stated in a special order after
due hearing.


As provided above, execution of the judgment or final order pending appeal is discretionary. As an exception to the
rule that only a final judgment may be executed, it must be strictly construed. Thus, execution pending appeal should not
be granted routinely but only in extraordinary circumstances.

The Rules of Court does not enumerate the circumstances which would justify the execution of the judgment or
decision pending appeal. However, we have held that good reasons consist of compelling or superior circumstances
demanding urgency which will outweigh the injury or damages suffered should the losing party secure a reversal of the
judgment or final order. The existence of good reasons is what confers discretionary power on a court to issue a writ of
execution pending appeal. These reasons must be stated in the order granting the same. Unless they are divulged, it
would be difficult to determine whether judicial discretion has been properly exercised.
[22]


In this case, do good reasons exist to justify the grant by the SAC of the motion for execution pending appeal? The
answer is a resounding YES.

The expropriation of private property under RA 6657 is a revolutionary kind of expropriation,
[23]
being a means to
obtain social justice by distributing land to the farmers, envisioning freedom from the bondage to the land they actually
till. As an exercise of police power, it puts the landowner, not the government, in a situation where the odds are
practically against him. He cannot resist it. His only consolation is that he can negotiate for the amount of compensation
to be paid for the property taken by the government. As expected, the landowner will exercise this right to the hilt, subject
to the limitation that he can only be entitled to just compensation. Clearly therefore, by rejecting and disputing the
valuation of the DAR, the landowner is merely exercising his right to seek just compensation.
[24]


In this case, petitioner valued the property of respondents at P371,154.99 for the compulsory acquisition of 21.1289
hectares of their landholdings. This amount respondents rejected. However, the same amount was affirmed by the DAR
after the conduct of summary proceedings. Consequently, respondents brought the matter to the SAC for the
determination of just compensation. After presentation of evidence from both parties, the SAC found the valuation of the
LBP and the DAR too low and pegged the just compensation due the respondents at P7.00 per square meter, or a total
of P1,479,023.00 for the 21.1289 hectares. In determining such value, the SAC noted the following circumstances:

1. the nearest point of the land is about 1.5 kilometers from Poblacion Ubay;
2. the total area of the land based on the sketch-map presented by the MARO is 23.3416 hectares.
3. the land is generally plain, sandy loam, without stones, rocks or [pebbles];
4. the land is adjoining the National Highway of Ubay-Trinidad, Bohol;
5. 11.4928 hectares of the land is devoted to planting rice, which portion is rain-fed and produces 60-
80 cavans of rice per hectare with two (2) harvest seasons a year;
6. four (4) hectares is planted with 210 fruit-bearing coconut trees, which private respondents used to
receive a share of P1,500.00 per harvest four (4) times a year;
7. five (5) hectares is cogonal but now most area is planted with cassava;
8. the area is traversed with electricity providing electric power to some occupants;
9. across the National Highway, about 200 meters away from the landholding, is an irrigation canal of
the National Irrigation Administration (NIA);
10. the Ubay Airport is about two (2) kilometers from the landholding;
11. fruit trees like mangoes and jackfruits were also planted on the property;
12. north of the landholding, about a kilometer away, is the seashore;
13. the market value of the land per Tax Declaration No. 45-002-00084 is P621,310.00 for the entire
23.2416 hectares but representing only 48% of the actual value of the property;
14. that the real estate appraiser Angelo Z. Fajardo appraised the land at P80,000.00 per hectare for the
Riceland and P30,000.00 for all other portions thereof;
15. testimony of the representative from petitioner that the factors considered in the appraisal of land are
the cost of acquisition of the land, the current value, its nature, its actual use and income, the sworn
valuation of the owner, and the assessment by the government functionary concerned;
16. petitioners contention that the main basis for the valuation it made was the very low price that the
petitioners had paid for the land when they acquired it along with other parcels from the Development
Bank of the Philippines in a foreclosure sale;
17. the testimony of the Municipal Agrarian Reform Officer for DAR that it was contemplated that the
property be disposed to farmer-beneficiaries at a relatively higher price; and
18. the fact that Ubay town is a fast-growing municipality being a consistent recipient of government
projects and facilities in view of its natural resources and favorable geographical locationBohol
Circumferential Road Improvement Project Phase I, the Leyte-Bohol Interconnection Project Phase I,
the Ilaya Reservior Irrigation Project, the Metro San Pascual Rural and Waterworks System, the 250-
hectare Central Visayas Coconut Seeds Production Center, the Philippine Carabao Center at the
Ubay Stock Farm, and several other public and private business facilities.
[25]



In light of these circumstances, the SAC found that the valuation made by petitioner, and affirmed by the DAR,
was unjustly way below the fair valuation of the landholding at the time of its taking by the DAR. The SAC, mindful also of
the advanced age of respondents at the time of the presentation of evidence for the determination of just compensation,
deemed it proper to grant their motion for execution pending appeal with the objective of ensuring prompt payment of
just compensation.

Contrary to the view of petitioner, prompt payment of just compensation is not satisfied by the mere deposit with
any accessible bank of the provisional compensation determined by it or by the DAR, and its subsequent release to the
landowner after compliance with the legal requirements set by RA 6657.

Constitutionally, just compensation is the sum equivalent to the market value of the property, broadly described
as the price fixed by the seller in open market in the usual and ordinary course of legal action and competition, or the fair
value of the property as between the one who receives and the one who desires to sell, it being fixed at the time of the
actual taking by the government.
[26]
Just compensation is defined as the full and fair equivalent of the property taken from
its owner by the expropriator. It has been repeatedly stressed by this Court that the true measure is not the takers gain
but the owners 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.
[27]


The concept of just compensation embraces not only the correct determination of the amount to be paid to the
owners of the land, but also payment within a reasonable time from its taking. Without prompt payment, compensation
cannot be considered just inasmuch as the property owner is made to suffer the consequences of being immediately
deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to
cope with his loss.
[28]


Put differently, while prompt payment of just compensation requires the immediate deposit and release to the
landowner of the provisional compensation as determined by the DAR, it does not end there. Verily, it also encompasses
the payment in full of the just compensation to the landholders as finally determined by the courts. Thus, it cannot be said
that there is already prompt payment of just compensation when there is only a partial payment thereof, as in this case.

While this decision does not finally resolve the propriety of the determination of just compensation by the SAC in
view of the separate appeal on the matter, we find no grave abuse of discretion on the part of the SAC judge in allowing
execution pending appeal. The good reasons cited by the SACthat it would be in consonance with justice, fairness, and
equity, and that suspending payment will prolong the agony of respondents suffered due to the deprivation of their land
are eloquently elucidated in the Comment filed by SAC Judge Venancio J. Amila, as nominal party, on the petition
for certiorari and prohibition of petitioner before the Court of Appeals, viz.:

In addition to the Comment of private respondents, through counsel Hilario C. Baril, which the
undersigned has just received a copy today, it is well to state here that respondent Placido Orilla is
already an old man just as his wife. The appealed Decision will show that Orilla was already 71 years old
at the time he testified in this case and the transcripts would further show that the money that he used in
buying the DBP foreclosed property herein subject of compulsory acquisition by the DAR came from his
retirement benefits evidently thinking that his investment would afford him security and contentment in his
old age. But, luckily or unluckily, the land was taken from him by the DAR at a price so low that he could
not swallow, thus, he brought the issue to court. Yet, all along, the land has been under the enjoyment of
farmer-beneficiaries without him yet being paid therefor. In the mind of the Court, if payment for the land
would be delayed further, it would not be long that death would overtake him. What a misfortune to his
long years of service to acquire that hard-earned savings only to be deprived therefrom at the time when
he needed it most.
[29]



The SAC, aware of the protracted proceedings of the appeal of its November 20, 2000 Decision, but without
imputing any dilatory tactics on the part of petitioner, thus deemed it proper, in its sound discretion, to grant the executi on
pending appeal. Moreover, the execution of the judgment of the SAC was conditioned on the posting of a bond by the
respondents, despite pleas to reduce the same, in the amount of one-half of the just compensation determined by the said
court or P739,511.50.

To reiterate, good reasons for execution pending appeal consist of compelling or superior circumstances
demanding urgency which will outweigh the injury or damages suffered should the losing party secure a reversal of the
judgment or final order. In the case at bar, even with the procedural flaw in the SACs grant of execution without a
hearing, the injury that may be suffered by respondents if execution pending appeal is denied indeed outweighs the
damage that may be suffered by petitioner in the grant thereof. As correctly pointed out by respondents, the reversal of
the November 20, 2000 SAC Decision, in the sense that petitioner will pay nothing at all to respondents, is an
impossibility, considering the constitutional mandate that just compensation be paid for expropriated property. The
posting of the required bond, to our mind, adequately insulates the petitioner against any injury it may suffer if the SAC
determination of just compensation is reduced.

Suffice it to say that, given the particular circumstances of this case, along with the considerable bond posted by
respondents, the assailed SAC Order of December 21, 2000 and the Decision of the Court of Appeals dated July 29,
2002 are justified.

WHEREFORE, the Decision of the Court of Appeals dated July 29, 2002 is AFFIRMED.

SO ORDERED.
LAND BANK OF THE PHILIPPINES, petitioner,
vs.
HEIRS OF ANGEL T. DOMINGO, namely MA. ALA F. DOMINGO and MARGARITA IRENE F. DOMINGO,respondents.
The Case
The Land Bank of the Philippines (LBP) filed this Petition for Review
1
to reverse the Court of Appeals Decision
2
dated 30
March 2005 in CA-G.R. SP No. 85510 as well as the Resolution dated 9 June 2005 denying the Motion for
Reconsideration. In the assailed decision, the Court of Appeals affirmed the Decision
3
dated 12 April 2004 of the Regional
Trial Court, Branch 33 (trial court) in Guimba, Nueva Ecija. The trial court, acting as a Special Agrarian Court, directed
LBP and the Department of Agrarian Reform (DAR) to pay P15,223,050.91 as just compensation for 262.2346 hectares of
land covered by Presidential Decree No. 27
4
(PD 27) as implemented in Executive Order No. 228
5
(EO 228).
The Facts
Angel T. Domingo (Domingo)
6
is the registered owner of a parcel of land with a total area of 300.4023 hectares covered
by Transfer Certificate of Title (TCT) Nos. NT-97436, NT-97437, NT-97438, NT-97439, and NT-97440, situated in
Guimba, Nueva Ecija.
7
This parcel of land was tilled by tenant farmers. Pursuant to PD 27 issued on 21 October 1972 and
EO 228 dated 17 July 1987, the actual tenant tillers are deemed full owners of the land they till.
8
Of the 300.4023 hectares,
262.2346 hectares of land (subject land) were taken by the government under its agrarian reform program and awarded to
the beneficiaries, who are tenant farmers (farmer-beneficiaries).
The subject land is situated about three kilometers from the town proper and accessible by a feeder road. Based on the
findings of the Officer-In-Charge, Branch Clerk of Court, Mr. Arsenio S. Esguerra, Jr., who conducted an ocular inspection
in compliance with the trial courts order, the subject land is irrigated with the use of water pumps installed by the farmer-
beneficiaries.
9
As per certification dated 27 February 1981 by the DAR Team Office of Guimba, Nueve Ecija, the average
gross production (AGP) is 91.42 cavans of palay per hectare
10
and the land is capable of 2 harvests in two
years.
11
However, as reflected in the records of this case, the AGP of 91.42 cavans is for TCT No. 97155 which is not
among the titles covered in this subject land. On the contrary, LBP alleged that the subject land was producing at most
only 41.42 cavans of palay per hectare as of 1972.
12

Several emancipation patents were issued and annotated on the TCTs, to wit:
13

TCT No. Number of
Emancipation
Patents Issued
Year
NT-97436 25 1990
NT-97436 1 2000
NT-97437 21 1988
NT-97437 21 1989
NT-97437 40 1992
NT-97437 22 1994
NT-97437 1 2000
NT-97438 67 1989
NT-97438 60 1993
NT-97438 10 1994
NT-97439 39 1990
NT-97440 42 1990
Using the guidelines for just compensation embodied in PD 27 and implemented in EO 228, the DAR fixed the value of
the subject land consisting of 262.2346 hectares at P2,086,735.09.
14
The formula used to compute the land value was:
Land value = Average Gross Production (AGP) x 2.5
x Government Support Price (GSP)
= 91.42 x 2.5 x 35
= P 7,999.25
The GSP for one cavan of 50 kilos palay in 21 October 1972 was P35.
15

Based on DAR Administrative Order No. 13 (DAR AO 13),
16
series of 1994, a 6% increment in the amount ofP627,456.28
was added to the original valuation.
17

In the Claims Processing Form dated 29 April 2002 and submitted by the LBP, the distribution of payment was as follows:
Cash Bonds Total
Net Land Value as
amended
208,735.09 1,878,000.00 2,086,735.09
Less: Payments 184,999.71 1,661,000.00 1,845,999.71
Net Amount due Landowner 23,735.38 217,000.00 240,735.38
Increment 627,456.28
Total Value of Claim P 868,191.66
Despite receipt of P1,845,999.71 as partial payment from LBP, Domingo rejected the final payment of P868,191.66. Thus,
LBP deposited this amount in cash and bonds and proceeded to distribute the subject land to various farmer-
beneficiaries.
On 31 July 2002, Domingo filed a Petition for Determination and Payment of Just Compensation in the trial court of
Guimba, Nueva Ecija.
In his Petition, Domingo prayed that the just compensation for the subject land be determined in accordance with the
formula in Section 17 of Republic Act No. 6657
18
(RA 6657) which would amount to P39,335,190.00 computed
at P150,000 per hectare.
19

In its Answer, LBP maintained that Domingos unirrigated land is covered by PD 27 and EO 228 being primarily devoted
to rice and tenanted as of 21 October 1972. LBP stated that the valuation formula found in PD 27 and EO 228 is the
applicable formula for computing just compensation.
20

On 12 April 2004, the trial court, after hearing the case, ruled that the subject lands date of taking is not 21 October 1972
when PD 27 took effect. Instead, the issuance dates of the emancipation patents should determine the date of taking
because these are when the ownership of a determinate portion of the subject land was transferred to the farmer-
beneficiaries. The trial court further stated that LBPs contention to compute just compensation based on the formula
prescribed in PD 27 and EO 228 cannot be sustained. These laws are only suppletory to RA 6657 which is the latest law
on agrarian reform. The trial court deemed it necessary to apply suppletorily the formula in PD 27 and EO 228. The trial
court computed just compensation as follows:
TCT No. Year of
Issuance
No. of
Hectares
Land Value (AGP x
2.5 x GSP
21
)
Sub-Total
NT-97436 1990 18.6291 91.42
22
x 2.5 x 300 1,277,304.24
NT-97436 2000 1.4168 91.42 x 2.5 x 500 161,904.82
NT-97437 1988 2.5631 91.42 x 2.5 x 175 102,514.38
NT-97437 1989 0.8074 91.42 x 2.5 x 175 32,292.97
NT-97437 1992 43.5805 91.42 x 2.5 x 300 2,288,096.98
23

NT-97437 1993 7.7330 91.42 x 2.5 x 300 530,213.14
NT-97437 1994 4.0186 91.42 x 2.5 x 300 275,535.30
NT-97437 2000 1.8482 91.42 x 2.5 x 450 190,082.74
NT-97438 1989 3.5594 91.42 x 2.5 x 175 142,362.65
NT-97438 1989 49.6899 91.42 x 2.5 x 250 2,839,156.66
NT-97438 1993 2.2853 91.42 x 2.5 x 300 156,691.59
NT-97438 1994 1.4511 91.42 x 2.5 x 300 99,494.67
NT-97439 1990 59.6399 91.42 x 2.5 x 250 3,407,674.78
NT-97439 1990 2.5119 91.42 x 2.5 x 250 143,523.68
NT-97440 1990 62.5019 91.42 x 2.5 x 250 3,571,202.31
Total 15,223,050.91
24

The trial court issued a decision which disposed of the present case as follows:
Wherefore, judgment is hereby rendered in favor of the plaintiff as follows:
1. Fixing the just compensation for plaintiffs 262.2346 hectare land covered by P.D. 27 atP15,223,050.91
inclusive of the increment provided for under DAR AO No. 13 computed from the time of taking up to the
date of this decision.
2. Directing defendants DAR and LBP to pay the plaintiff the above-mentioned amount of money as the
amount of just compensation for his land.
SO ORDERED.
25

Dissatisfied with the decision, LBP filed a Motion for Reconsideration stating that the trial court erred in adopting an AGP
of 91.42 cavans as certified by the DARs team leader in lieu of 41.67 cavans as established by the Barangay Committee
on Land Production (BCLP). LBP asserted that the trial court erred in using the issuance dates of the emancipation
patents as the date of taking instead of complying with the legal provision in PD 27 that the emancipation of all tenant
farmers was on 21 October 1972.
On 8 July 2004, the trial court issued an Order denying the motion for lack of merit. LBP filed a Petition for Review before
the Court of Appeals pursuant to Section 60 of RA 6657.
LBP argued that the trial court gravely erred in applying RA 6657 to determine just compensation for the subject land
acquired under PD 27 and EO 228 on the assumption that the former should prevail being the latest law on agrarian
reform. LBP further claimed that the trial court erred in relying on the certification, dated 27 February 1981 and issued by
the DARs Agrarian Reform Team at Guimba, Nueva Ecija, adopting an AGP of 91.42 cavans and disregarding 41.67
cavans as found by the BCLP.
Domingo contended that the trial court was correct in using the AGP of 91.42 cavans and the GSP prevailing as of the
years 1988 to 2000, pursuant to settled jurisprudence that just compensation should be reckoned as of the date of taking
of the expropriated property.
On 30 March 2005, the Court of Appeals affirmed the trial courts decision and dismissed the petition for lack of merit. LBP
filed a Motion for Reconsideration which the Court of Appeals denied.
Hence, the instant petition.
The Ruling of the Court of Appeals
The Court of Appeals affirmed the trial courts decision. It reasoned that RA 6657 covers all public and private agricultural
lands as provided in Proclamation No. 131 and Executive Order No. 229.
26
Phase one of RA 6657 includes the acquisition
and distribution of rice and corn lands under PD 27. The provisions in RA 6657 show that PD 27 lands are among the
properties which DAR shall acquire and distribute to the landless.
27
RA 6657 also states that the provisions of PD 27 and
EO 228 shall have suppletory effect.
The Court of Appeals pointed out that 21 October 1972 cannot be considered as the "date of taking" for the purpose of
determining just compensation. It ruled that it was only when the emancipation patents were issued to the farmer-
beneficiaries that Domingo recognized their ownership of the property. Hence, the issuance dates of the emancipation
patents should be considered as the date of taking.
The Court of Appeals also ruled that the AGP determined by the BCLP cannot prevail over the AGP of 91.42 cavans of
palay per hectare as testified by Domingo and his witness Patricio Mendoza, whose testimonies have been confirmed by
competent officials: DAR Team Leader, Warehouse Supervisor of National Food Authority, Senior Agrarian Reform
Technician, and the Collection Supervisor of the Bureau of Internal Revenue.
Moreover, the appellate court held that since the trial courts decision utilized the higher GSP, Domingo is no longer
entitled to the 6% incremental interest provided in DAR AO No. 13.
The Issues
LBP raises two issues
28
in this Petition:
1. Whether the taking of Domingos riceland should be reckoned from the issuance of emancipation patents or upon the
effectivity of PD 27 on 21 October 1972; and
2. Whether RA 6657 should apply in the determination of just compensation of riceland taken under PD 27 and EO 228.
The Ruling of the Court
The Tenant Emancipation Decree or PD 27 was anchored upon the fundamental objective of addressing legitimate
concerns of land ownership giving rise to social tension in the countryside. PD 27 also recognized the necessity to
encourage a more productive agricultural base of the countrys economy.
29
To address these concerns, PD 27 expressly
ordered the emancipation of the tenant farmer as of 21 October 1972 and declared that he shall "be deemed the owner"
of the portion of the land that he tills. Subsequently, EO 228 declared full land ownership to all qualified farmer
beneficiaries as of 21 October 1972 and gave the formula for land valuation.
On 15 June 1988, the Comprehensive Agrarian Reform Law (CARL) or RA 6657 was enacted to promote social justice to
the landless farmers and provide "a more equitable distribution and ownership of land with due regard to the rights of
landowners to just compensation and to the ecological needs of the nation."
30

Section 4 of RA 6657 provides that the CARL shall cover all public and private agricultural lands including other lands of
the public domain suitable for agriculture. Section 7 provides that rice and corn lands under PD 27, among other lands,
will comprise phase one of the acquisition plan and distribution program. Section 75 states that the provisions of PD 27
and EO 228 and 229,
31
and other laws not inconsistent with RA 6657 shall have suppletory effect.
In Paris v. Alfeche,
32
the Court ruled that RA 6657 includes PD 27 lands among the properties which the DAR shall
acquire and distribute to the landless. In Land Bank v. Court of Appeals,
33
the Court added that Sections 16, 17, and 18 of
RA 6657 should be followed in the acquisition and distribution of PD 27 lands.
Hence, the provisions of RA 6657 apply to the present case with PD 27 and EO 228 having suppletory effect.
J ust Compensation for PD 27 Lands
The crux of this controversy is to determine the proper land valuation to compute the just compensation for purposes of
agrarian reform under PD 27.
Section 9, Article III of the 1987 Constitution provides that no private property shall be taken for public use without just
compensation. As a concept in the Bill of Rights, just compensation is defined as the fair or market value of the property
as between one who receives, and one who desires to sell.
34

Section 4, Article XIII of the 1987 Constitution mandates that the redistribution of agricultural lands shall be "subject to the
payment of just compensation." The deliberations of the 1986 Constitutional Commission on this subject reveal that just
compensation should not do violence to the Bill of Rights but should also not make an insurmountable obstacle to a
successful agrarian reform.
35
Hence, the landowners right to just compensation should be balanced with agrarian reform.
In Land Bank v. Court of Appeals,
36
we declared that it is the duty of the court to protect the weak and the underprivileged,
but this duty should not be carried out to such an extent as to deny justice to the landowner whenever truth and justice
happen to be on his side.
In Land Bank v. Natividad,
37
the Court held that the determination of just compensation "in accordance with RA 6657, and
not PD 27 and EO 228, is especially imperative considering that just compensation should be the full and fair equivalent of
the property taken from its owner by the expropriator, the equivalent being real, substantial, full and ample." In this same
case, this Court also had the occasion to discuss the just compensation for PD 27 lands, thus:
"Land Banks contention that the property was acquired for purposes of agrarian reform on October 21, 1972, the
time of the effectivity of PD 27, ergo just compensation should be based on the value of the property as of that
time and not at the time of possession in 1993, is likewise erroneous. In Office of the President, Malacaang,
Manila v. Court of Appeals, we ruled that the seizure of the landholding did not take place on the date of effectivity
of PD 27 but would take effect on the payment of just compensation.
Under the factual circumstances of this case, the agrarian reform process is still incomplete as the just
compensation to be paid private respondents has yet to be settled. Considering the passage of Republic Act No.
6657 (RA 6657) before the completion of this process, the just compensation should be determined and the
process concluded under the said law. Indeed, RA 6657 is the applicable law, with PD 27 and EO 228 having only
suppletory effect, conformably with our ruling in Paris v. Alfeche.
Section 17 of RA 6657 which is particularly relevant, providing as it does the guideposts for the determination of
just compensation, reads as follows:
Sec. 17. Determination of Just Compensation. In determining just compensation, the cost of acquisition
of the land, the current value of the like properties, its nature, actual use and income, the sworn valuation
by the owner, the tax declarations, and the assessment made by government assessors shall be
considered. The social and economic benefits contributed by the farmers and the farmworkers and by the
Government to the property as well as the non-payment of taxes or loans secured from any government
financing institution on the said land shall be considered as additional factors to determine its valuation.
It would certainly be inequitable to determine just compensation based on the guideline provided by PD 27 and
EO 228 considering the DARs failure to determine the just compensation for a considerable length of time. That
just compensation should be determined in accordance with RA 6657, and not PD 27 or EO 228, is especially
imperative considering that just compensation should be the full and fair equivalent of the property taken from its
owner by the expropriator, the equivalent being real, substantial, full and ample."
38

There is no doubt that Domingos land was taken by the government under PD 27. However, it was only in 1994 when
LBP prepared the Land Transfer Payment Form which was superseded by a Claims Processing Form issued in 2002.
In Association of Small Landowners v. Secretary of Agrarian Reform,
39
the Court held that it is a recognized rule that title
to the property expropriated shall pass from the owner to the expropriator only upon full payment of just compensation.
The Court further held that:
"It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as [of] October 21, 1972 and
declared that he shall be deemed the owner of a portion of land consisting of a family-sized farm except that no
title to the land owned by him was to be actually issued to him unless and until he had become a full-fledged
member of a duly recognized farmers cooperative. It was understood, however, that full payment of just
compensation also had to be made first, conformably to the constitutional requirement."
40
(Underscoring supplied)
LBPs contention that the property was taken on 21 October 1972, the date of effectivity of PD 27, thus just compensation
should be computed based on the GSP in 1972, is erroneous. The date of taking of the subject land for purposes of
computing just compensation should be reckoned from the issuance dates of the emancipation patents. An emancipation
patent constitutes the conclusive authority for the issuance of a Transfer Certificate of Title in the name of the grantee.
41
It
is from the issuance of an emancipation patent that the grantee can acquire the vested right of ownership in the
landholding,
42
subject to the payment of just compensation to the landowner.
When RA 6657 was enacted into law in 1988, the agrarian reform process in the present case was still incomplete as the
amount of just compensation to be paid to Domingo had yet to be settled. Just compensation should therefore be
determined and the expropriation process concluded under RA 6657.
Guided by this precept, just compensation for purposes of agrarian reform under PD 27 should adhere to Section 17 of
RA 6657 which states:
Sec. 17. Determination of Just Compensation. - In determining just compensation, the cost of acquisition of the
land, the current value of the like properties, its nature, actual use and income, the sworn valuation by the owner,
the tax declarations, and the assessment made by government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farmworkers and by the Government to the property as well
as the non-payment of taxes or loans secured from any government financing institution on the said land shall be
considered as additional factors to determine its valuation.
In Land Bank v. Natividad,
43
the Court upheld the trial courts decision valuing the property on account of its nature,
location, market value, assessors value and volume and value of its produce.
In Land Bank v. Estanislao,
44
this Court upheld the just compensation of P20 per square meter which was determined in
accordance with Section 17 of RA 6657.
In Lubrica v. Land Bank,
45
the Court mandated that "Land Bank should compensate the landowner in such amount as
may be agreed upon by the landowner and the DAR and the LBP or as may be finally determined by the Court as the just
compensation."
In sum, we affirm the rulings of the trial court and the appellate court that the provisions of RA 6657 apply to the present
case and that the date of taking of Domingos riceland for purposes of computing just compensation should be reckoned
from the issuance dates of emancipation patents. However, the just compensation for the subject land in the present case
should be computed in accordance with Lubrica v. Land Bank.
46
The partial payment ofP1,845,999.71 should be deducted
from the computation.
WHEREFORE, we AFFIRM with MODIFICATION the assailed Decision dated 30 March 2005 of the Court of Appeals in
CA-G.R. SP No. 85510 and the Resolution dated 9 June 2005 denying the Motion for Reconsideration. We ORDER the
Regional Trial Court of Guimba, Nueva Ecija, Branch 33, acting as Special Agrarian Court, to proceed with deliberate
dispatch on the computation of the final valuation of the subject land in accordance with this Decision.
SO ORDERED.
LEE vs LBP
The antecedents follow.

On 7 August 2001, petitioners received a notice of coverage informing them that their landholding
[3]
is covered by
the governments compulsory acquisition scheme pursuant to the Comprehensive Agrarian Reform Law (R.A. No.
6657). On 1 June 2001, they received from the Department of Agrarian Reform (DAR) a copy of the notice of land
valuation and acquisition which contains an offer of P315,307.87
[4]
as compensation for 3.195 hectares of the
property. Petitioners rejected the offer.

Subsequently, a summary administrative proceeding was conducted by the Department of Agrarian Reform
Adjudication Board (DARAB) to determine the valuation and compensation of the subject property. On 27 September
2001, the DARAB issued a decision
[5]
declaring that the Land Bank of the Philippines (LBP) fully complied with the criteria
set forth in R.A. No. 6657 in determining the value of the land, and ordered the LBP to pay petitioners the original amount
offered by DAR. Petitioners sought reconsideration of the decision, but their motion was denied by the Provincial
Adjudicator on 6 December 2001.
[6]


Aggrieved, petitioners filed an original petition
[7]
for the determination of just compensation before
the Regional Trial Court of Balanga City, Bataan.
[8]
They offered the same exhibits and transcript of the oral testimonies
and the appraisal report presented in Civil Case No. 7171,
[9]
a prior just compensation case involving a parcel of land
adjacent to the property subject of this case, where the special agrarian court (SAC) pegged the value of the property
at P250.00 per square meter. LBP, for its part, presented the testimony of one Theresie P. Garcia, an agrarian affairs
specialist. The SAC, citing the appraisal report and its decision in Civil Case No. 7171, decided in favor of petitioners and
ordered LBP to pay them P7,978,750.00 as just compensation.
[10]


LBP filed a Petition for Review
[11]
before the Court of Appeals and argued that the SAC erred in giving considerable
weight on the appraisal report of the private appraisal firm thereby disregarding the provisions of R.A. No. 6657 and its
implementing regulations. The Court of Appeals ruled that the SAC should have refrained from taking judicial notice of its
own decision in Civil Case No. 7171 in resolving just compensation in the present case, especially because the values
rendered in the previous decision had not yet attained a final and executory character at
the time.
[12]
It found that the SAC made a wholesale adoption of the valuation of the appraisal company and did not
consider the other factors set forth in R.A. No. 6657 even though the appraisal company admitted that it did not consider
as applicable the CARP valuation of the property.
[13]


The Court of Appeals likewise found the value proposed by LBP to be extremely low considering the disparity
between the said amount and that suggested by the appraisal company. According to the Court of Appeals, the SAC
should have judiciously made an independent finding of fact and explained the legal basis thereof.
[14]


The Court of Appeals held that since the taking of private lands under the agrarian reform program partakes of the
nature of an expropriation proceeding, the SAC should have appointed competent and disinterested commissioners to
assist it in valuating the property in question, following Section 5, Rule 67 of the 1997 Rules of Civil Procedure.
[15]
It
remanded the case to the trial court for proper and judicious determination of just compensation, appointing for that
purpose a set of commissioners.
[16]


Before us, petitioners allege that it is no longer necessary to remand the case to the lower court because the
parties already had the chance before the SAC to present evidence on the valuation of the subject landholding. Petitioners
believe that the remand of the case would give LBP undue opportunity which it already had during the proceedings a quo,
and which opportunity it failed to take advantage of.
[17]


Petitioners also argue that the SAC may validly take judicial notice of its decision in the other just compensation
cases. They point out that they had offered in the present case both testimonial and documentary evidence adduced in
the previous case. Thus, the SACs decision in this case was based on the evidence presented during trial.
[18]


Finally, relying on the presumption of regularity, petitioners claim that the SAC had considered the criteria set forth
in the law for the determination of just compensation in computing the value of the subject landholding. In any case,
according to them, R.A. No. 6657 does not at all require the SAC to consider all the seven factors enumerated therein in
its determination of just compensation.
[19]

In its Comment,
[20]
LBP argues that the Supreme Court is not a trier of facts, and is not duty-bound to determine the
veracity of the factual allegations of petitioners.
[21]
Anent the issue of judicial notice, LBP posits that the reliance by the
SAC and petitioners on the valuation in Civil Case No. 7171 is misplaced because the said case is still on appeal and has
not yet attained finality.
[22]
Even if the evidence in the aforesaid case is presented in this case, the fact remains that the
valuation reached by the SAC is not in accord with R.A. No. 6657 as translated into a basic formula in DAR Administrative
Order No. 5, series of 1998 (AO No. 5).
[23]
In addition, LBP posits that the factors in determining just compensation, as
spelled out in Land Bank of the Philippines v. Spouses Banal
[24]
were not observed by the SAC in the instant case since it
relied merely on the alleged selling price of the adjoining lands in fixing the just compensation of the subject property
instead of following the formula under AO No. 5.
[25]
LBP adds that the subject property is being
acquired by the government pursuant to its land reform program, and
thus its potential for commercial, industrial or residential uses will not affect the compensation to be paid by the State as
its value is determined at the time of the taking.
[26]


There is no merit in the petition.


Judicial cognizance is based on considerations of expediency and convenience. It displaces evidence since,
being equivalent to proof, it fulfills the object which the evidence is intended to achieve.
[27]


The SAC may take judicial notice of its own decision in Civil Case No. 7171. It has been said that courts may
take judicial notice of a decision or the facts involved in another case tried by the same court if the parties introduce the
same in evidence or the court, as a matter of convenience, decides to do so.
[28]
Petitioners presented the same appraisal
report offered in Civil Case No. 7171, and there seems to be no objection on the part of LBP when they did so.


We note, however, that the SACs cognizance of its findings in Civil Case No. 7171 was not the sole reason for
its decision. A reading of its decision shows that the SAC considered the evidence presented by both petitioners and
LBP, i.e., the testimonies and report used in Civil Case No. 7171 proffered by petitioners, and the testimony
of LBPsagrarian affairs specialist. The SAC evidently found the testimony of the LBP officer unsatisfactory and LBPs
valuation improper, and thus relied on the evidence presented by petitioners. As the Court sees it, the decision in Civil
Case No. 7171 merely strengthened the case for petitioners.

Be that as it may, the SACs reliance on the valuation made by the appraisal company is misplaced, since the
valuation was not arrived at using the factors required by the law and prescribed by the AO No. 5.

Section 17 of R.A. No. 6657 which enumerates the factors to be considered in determining just compensation
reads:

SECTION 17. Determination of Just Compensation.In determining just compensation, the cost
of acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn
valuation by the owner, tax declarations, and the assessment made by government assessors shall be
considered. The social and economic benefits contributed by the farmers and the farmworkers and by the
Government to the property as well as the non-payment of taxes or loans secured from any government
financing institutions on the said land shall be considered as additional factors to determine its valuation.


These factors have already been incorporated in a basic formula by the DAR pursuant to its rule-making power
under Section 49 of R.A. No. 6657. AO No. 5 precisely filled in the details of Section 17, R. A. No. 6657 by providing a
basic formula by which the factors mentioned therein may be taken into account.
[29]
This formula has to be considered by
the SAC in tandem with all the factors referred to in Section 17 of the law. The administrative order provides:





A. There shall be one basic formula for the valuation of lands covered by VOS or CA:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

Where:
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration

The above formula shall be used if all three factors are present, relevant, and applicable.

A1. When the CS factor is not present and CNI and MV are applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)

A2. When the CNI factor is not present, and CS and MV are applicable, the formula shall be:
LV = (CS x 0.9) + (MV x 0.1)

A3. When both the CS and CNI are not present and only MV is applicable, the formula shall be:
LV = MV x 2

In no case shall the value of idle land using the formula MV x 2 exceed the lowest value of land
within the same estate under consideration or within the same barangay or municipality (in that order)
approved by LBP within one (1) year from receipt of claimfolder.

---

Where:

CNI= (AGPxSP) - CO
.12
AGP= Average Gross Production corresponding to the latest available 12 months gross
production immediately preceding the date of FI (field investigation) SP= Selling Price (the average of the
latest available 12 months selling prices prior to the date of receipt of the CF (claim folder) by LBP for
processing, such prices to be secured from the Department of Agriculture (DA) and other appropriate
regulatory bodies or, in their absence, from the Bureau of Agricultural Statistics. If possible, SP data shall
be gathered for the barangay or municipality where the property is located. In the absence thereof, SP
may be secured within the province or region.

CO = Cost of Operations

Whenever the cost of operations could not be obtained or verified, an assumed net income rate
(NIR) of 20% shall be used. Landholdings planted to coconut which are productive at the time of FI shall
continue to use the assumed NIR of 70 %. DAR and LBP shall continue to conduct joint industry studies to
establish the applicable NIR for each crop covered under CARP.

0.12 = Capitalization rate


We find that the factors required by the law and enforced by the DAR Administrative Order were not observed by
the SAC when it adopted wholeheartedly the valuation arrived at in the appraisal report. According to the appraisal
company, it personally inspected the property, investigated local market conditions, and have given consideration to the
extent, character and utility of the property; sales and holding prices of similar land; and highest and best use of the
property.
[30]
The value of the land was arrived at using the market data approach, which bases the value of the land on
sales and listings of comparable property registered within the vicinity.
[31]
In fact, as noted by the Court of Appeals, a
representative of the company admitted that it did not consider the CARP valuation to be applicable.
[32]


This is not to say that the Court favors the valuation given by LBP. While it presented a land valuation
worksheet
[33]
and a claims valuation and processing form,
[34]
which both value the land at P315, 307.87, we find that
LBPs valuation is too low vis--vis the value suggested by the
appraisal company. Moreover, we observe that the valuation was not
arrived at based on all the factors provided in the law. As admitted by its agrarian affairs specialist, she had not gone over
the property before she made the valuation, nor was she aware of adjacent properties/structures.
[35]
The LBP was not
thorough in its valuation of the subject property.

All told, we find that the remand of the case is in order to better determine the proper valuation of the subject
property.

We clarify, however, that we are not in accord with the declaration of the Court of Appeals on the appointment of
commissioners in the instant case. According to the appellate court:

x x x Consequently, when the Regional Trial Court acting as a Special Agrarian Court determines
just compensation, it is mandated to apply the Rules of Court.
[36]
The rules on expropriation, on the other
hand, specifically under Section 5 of Rule 67 of the 1997 Rules on Civil Procedure provides to wit:


SEC.5. Ascertainment of compensation. Upon the rendition of the order of
expropriation, the court shall appoint not more than three (3) competent and disinterested
persons as commissioners to ascertain and report to the court the just compensation for
the property sought to be taken. The order of appointment shall designate the time and
place of the first session of the hearing to be held by the commissioners and specify the
time within which their report is to be filed with the court.

x x x

Under the afore-quoted provision, it is clear that the SAC should have appointed
competent and disinterested commissioners to assist it in valuating the property in question.
(Emphasis supplied) x x x.
[37]


The Court of Appeals seems to imply that the appointment of commissioners is mandatory in agrarian reform
cases. We do not agree. While the Rules of Court provisions apply to proceedings in special agrarian courts,
[38]
it is clear
that unlike in expropriation proceedings under the Rules of Court the appointment of a commissioner or commissioners is
discretionary on the part of the court or upon the instance of one of the parties. And when the court does resort to the
commissioners-type of appraisal, it is not circumscribed to appoint three commissioners, unlike the modality under Rule
67. Section 58 of R.A. No. 6657 provides:

Sec. 58. Appointment of Commissioners.The Special Agrarian Courts, upon their own initiative
or at the instance of any of the parties, may appoint one or more commissioners to examine, investigate
and ascertain facts relevant to the dispute, including the valuation of properties, and to file a written report
thereof with the court.

With the remand of the case, it is now up to the SAC, or to the parties, to determine if there is a need to avail of
commissioners to arrive at the proper valuation of the subject land.


WHEREFORE, the petition is DENIED. The decision of the Court of Appeals is AFFIRMED with MODIFICATION
as above indicated. The case is REMANDED to the Regional Trial Court of Balanga, Bataan acting as a Special Agrarian
Court for the determination of just compensation in accordance with Section 17 of Republic Act No. 6657.

SO ORDERED.
LBP vs CRUZ

This is a Petition for Review on Certiorari
[1]
under Rule 45 of the 1997 Rules of Civil Procedure, assailing the
Decision
[2]
and Resolution
[3]
of the Court of Appeals (CA) in CA-G.R. SP No. 93207. The CA decision affirmed the
decision of the Regional Trial Court (RTC) of Tuguegarao City, Branch 1 sitting as a Special Agrarian Court (SAC), which
approved and ordered the payment of the amount of just compensation fixed by the Cagayan Provincial Agrarian Reform
Adjudicator (PARAD) in favor of herein respondents.
[4]
The CA resolution denied petitioners motion for reconsideration of
the decision.
[5]


The following factual antecedents are matters of record.

Petitioner Land Bank of the Philippines (LBP) is a government banking institution designated under Section 64 of
Republic Act (R.A.) No. 6654 as the financial intermediary of the agrarian reform program of the government.

Respondent Heirs of Eleuterio Cruz are Anicia Cruz-Papa, Resurreccion Cruz-Pagcaliwagan, Antonio D. Cruz,
Lourdes Cruz-Doma, Lorna Cruz-Felipe, Mamerto D. Cruz, Eduardo D. Cruz and Victoria Cruz-Dumlao. Eleuterio Cruz is
the registered owner of an unirrigated riceland situated in Lakambini, Tuao, Cagayan per Transfer Certificate of Title No.
T-368. Of the total 13.7320 hectares of respondents landholding, an area of 13.5550 hectares was placed by the
government under the coverage of the operation land transfer program under Presidential Decree (P.D.) No. 27.
[6]





Petitioner pegged the value of the acquired landholding at P106,935.76 based on the guidelines set forth under
P.D. No. 27
[7]
and Executive Order (E.O.) No. 228.
[8]
Respondents rejected petitioners valuation and instituted an action
for a summary proceeding for the preliminary determination of just compensation before the PARAD. On 23 November
1999, the PARAD rendered a decision fixing the just compensation in the amount of P80,000.00 per hectare.
[9]
Petitioner
sought reconsideration but was unsuccessful.

Thus, on 28 January 2000, petitioner filed a petition for the determination of just compensation before the RTC
of Tuguegarao City.
[10]
The petition was docketed as Agrarian Case No. 0058 and entitled Land Bank of the Philippines v.
Heirs of Eleuterio Cruz, represented by Lorna Cruz, et al.
[11]


Petitioners evidence consisted of the testimonies of Benedicta Simon, head of the LBP Evaluation Division of
Land Owners Compensation Department, and Francisco de la Cruz, Chief, PARAD, Cagayan. Simon testified that as the
officer charged with reviewing claims under the agrarian reform program, she computed the valuation of respondents
landholdings based on the formula set forth in P.D. No. 27, E.O. No. 228 and Administrative Order (A.O.) No. 13, series of
1994 and arrived at the value ofP106,935.76. As the PARAD Chief tasked to oversee the implementation of the agrarian
reform program, De la Cruz testified that the subject landholding was tenanted and covered by production agreements
between the owner and various tenants.
[12]
Petitioner offered in evidence Exhibit H to prove that the subject landholding
had an average production of 25 and 40 cavans per hectare annually.

For their part, respondents presented Lorna Cruz Felipe, who testified that as one of the heirs of Eleuterio Cruz,
she knew that the subject landholding was planted with rice two or three times a year and had a production capacity of 80
to 100 cavans per hectare. Felipe also claimed that the current market value of the property was betweenP150,000.00
to P200,000.00 per hectare.
[13]


On 07 December 2005, the RTC, sitting as an Special Agrarian Court (SAC), rendered a decision, the dispositive
portion of which reads:


WHEREFORE, in the light of the foregoing ratiocination, judgment is hereby rendered fixing the
amount of P80,000.00 to be the just compensation of the land subject of this case with an area of
13.7320 hectares situated at Lakambini, Tuao, Cagayan and covered under TCT No. T-368 and ordering
Land Bank of the Philippines to pay respondent represented by Lorna Cruz-Felipe the amount
of P1,098,560.00 in the manner provided by R.A. No. 6657 by way of full payment of the said just
compensation.

SO DECIDED.
[14]



The SAC held that the value of P80,000.00 per hectare fixed by the PARAD should be accorded weight and
probative value and that the SAC is guided by the various factors enumerated in Section 17
[15]
of R.A. No. 6657 in
determining just compensation. It disregarded respondents claim that the valuation should be based on the current
market value of the landholding since no evidence was adduced in support of the claim. The SAC also did not accept
petitioners valuation as it was based on P.D. No. 27, in which just compensation was determined at the time of the taking
of the property.
[16]


Petitioner filed a motion for reconsideration, which was denied in a Resolution dated 26 January
2006,
[17]
prompting petitioner to elevate the matter to the CA. In its petition for review,
[18]
petitioner questioned the total
land area as well as the amount of just compensation adjudged by the SAC.
[19]


On 17 August 2006, the CA rendered the assailed decision partly granting petitioners appeal.
[20]
The appellate
court ruled that the total area covered by the agrarian reform program as was duly established before the PARAD and
expressly stated in the pre-trial order was only 13.5550 hectares and not 13.7320 hectares as was stated in the
dispositive portion of the decision of the SAC.
[21]
However, the appellate court affirmed the SAC decision fixing just
compensation at P80,000.00 per hectare. Petitioner sought consideration but was denied in the assailed Resolution dated
30 October 2006.
[22]


Hence, the instant petition, arguing that the formula set forth in P.D. No. 27/E.O. No. 228 should be applied in
fixing just compensation since respondents landholding was acquired under P.D. No. 27. Citing Section 2
[23]
of E.O. No.
228 and LBP v. Hon. David C. Naval,
[24]
petitioner posits that the correct formula in determining the just compensation
should be Land Value = (2.5 x AGP x P35) x A, where AGP is the Average Gross Production per hectare; P35.00 is the
Government Support Price for palay in 1972; and A is the total land area.

Petitioner insists that the values in E.O. No. 228 are applicable to lands acquired under P.D. No. 27 in cognizance
of the well-settled rule that just compensation is the value of the property at the time of the taking on 21 October 1972,
when the ownership of the subject property was transferred from the landowner to the farmers-beneficiaries and when the
former was effectively deprived of dominion and possession over said land.

The petition lacks merit.

The Court laid down in Paris v. Alfeche
[25]
the applicability of P.D. No. 27 and E.O. No. 228 in relation to R.A. No.
6657 in the matter of the payment of just compensation. There the Court explained that while under P.D. No. 27 tenant
farmers are already deemed owners of the land they till, they are still required to pay the cost of the land before the title is
transferred to them and that pending the payment of just compensation, actual title to the tenanted land remains with the
landowner.

In Paris, the application of the process of agrarian reform was still incomplete thus, the Court held therein that
with the passage of R.A. No. 6657 before its completion, the process should now be completed under R.A. No. 6657, with
P.D. No. 27 and E.O. No. 228 applying only suppletorily.
[26]


In Land Bank of the Philippines v. Natividad,
[27]
the Court explained why the guidelines under P.D. No. 27 and
E.O. No. 228 are no longer applicable to the delayed payment of lands acquired under P.D. No. 27, to wit:

It would certainly be inequitable to determine just compensation based on the guideline provided
by PD No. 27 and EO 228 considering the DARs failure to determine the just compensation for a
considerable length of time. That just compensation should be determined in
accordance with RA 6657, and not PD 27 or EO 228, is especially imperative considering that just
compensation should be the full and fair equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and ample.
[28]



The decisive backdrop of the instant case coincides with that in Paris, that is, the amount of just compensation
due to respondents had not yet been settled by the time R.A. No. 6657 became effective. Following the aforementioned
pronouncement in Paris, the fixing of just compensation should therefore be based on the parameters set out in R.A. No.
6657, with P.D. No. 27 and E.O. No. 228 having only suppletory effect.

Section 17 of R.A. No. 6657 states:

SEC. 17. Determination of Just Compensation. In determining just compensation, the cost of
acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn
valuation by the owner, the tax declarations, and the assessment made by government assessors, shall
be considered. The social and economic benefits contributed by the farmers and the farmworkers and by
government to the property as well as the non-payment of taxes or loans secured from any government
financing institution on the said land shall be considered as additional factors to determine its valuation.


In Land Bank of the Philippines v. Celada,
[29]
the Court ruled that the factors enumerated under Section 17, R.A.
No. 6657 had already been translated into a basicformula by the Department of Agrarian Reform (DAR) pursuant to its
rule-making power under Section 49 of R.A. No. 6657. Thus, the Court held in Celada that the formula outlined in DAR
A.O. No. 5, series of 1998
[30]
should be applied in computing just compensation.

Likewise, in Land Bank of the Philippines v. Sps. Banal,
[31]
the Court ruled that the applicable formula in fixing just
compensation is DAR A.O. No. 6, series of 1992, as amended by DAR A.O. No. 11, series of 1994, then the governing
regulation applicable to compulsory acquisition of lands, in recognition of the DARs rule-making power to carry out the
object of R.A. No. 6657. Because the trial court therein based its valuation upon a different formula and did not conduct
any hearing for the reception of evidence, the Court ordered a remand of the case to the SAC for trial on the merits.

The mandatory application of the aforementioned guidelines in determining just compensation has been reiterated
recently in Land Bank of the Philippines v. Lim,
[32]
where the Court also ordered the remand of the case to the SAC for the
determination of just compensation strictly in accordance with DAR A.O. No. 6, series of 1992, as amended.

A perusal of the PARADs Decision dated 23 November 1999, which mandated payment of just compensation in
the amount of P80,000.00 per hectare, reveals that the PARAD did not adhere to the formula prescribed in any of the
aforementioned regulations issued by the DAR or was at least silent on the applicability of the aforementioned DAR
regulations to the question of just compensation. The PARAD decision also did not refer to any evidence in support of its
finding.

The SAC, meanwhile, referred to DAR A.O. No. 6, series of 1992, as amended, as the controlling guideline in
fixing just compensation. Pertinently, to obtain the land value, the formula
[33]
under said regulation requires that the values
for the Capitalized Net Income, Comparable Sales and Market Value based on the tax declaration must be shown.
Moreover, said formula has been superseded by DAR A.O. No. 05, series of 1998, which also requires values for
Capitalized Net Income, Comparable Sales and Market Value, the same parameters laid down in the prior regulation.

Stating that no evidence was presented by respondents on the aforementioned parameters, the SAC ruled that it
was constrained to adopt the finding of the PARAD, which fixed the value of the land at P80,000.00 per hectare. On
appeal, the CA adopted the same finding.

The general rule is that factual findings of the trial court, especially when affirmed by the CA, are binding and
conclusive on the Court. However, the rule admits of exceptions, as when the factual findings are grounded entirely on
speculation, surmises, or conjectures or when the findings are conclusions without citation of specific evidence on which
they are based.
[34]


A perusal of the PARAD decision, which was adopted by both the SAC and the CA, shows that its valuation
of P80,000.00 per hectare is sorely lacking in any evidentiary or legal basis. While the Court wants to fix just
compensation due to respondents if only to write finis to the controversy, the evidence on record is not sufficient for the
Court to do so in accordance with DAR A.O. No. 5, series of 1998.

WHEREFORE, the instant petition for review on certiorari is DENIED and the decision and resolution of the Court
of Appeals in CA-G.R. SP No. 93207 areREVERSED and SET ASIDE. Agrarian Case No. 0058 is REMANDED to the
Regional Trial Court, Branch 1, Tuguegarao City, Cagayan, which is directed to determine with dispatch the just
compensation due respondents strictly in accordance with DAR A.O. No. 5, series of 1998.

SO ORDERED.
LAND BANK OF THE PHILIPPINES, petitioner, vs. HON. ELI G. C. NATIVIDAD, Presiding Judge of the Regional
Trial Court, Branch 48, San Fernando, Pampanga, and JOSE R. CAGUIAT represented by Attorneys-in-fact
JOSE T. BARTOLOME and VICTORIO MANGALINDAN, respondents.
D E C I S I O N
TINGA, J .:
This is a Petition for Review
[1]
dated December 6, 1996 assailing the Decision
[2]
of the Regional Trial Court
[3]
dated
July 5, 1996 which ordered the Department of Agrarian Reform (DAR) and petitioner Land Bank of the Philippines (Land
Bank) to pay private respondents the amount of P30.00 per square meter as just compensation for the States acquisition
of private respondents properties under the land reform program.
The facts follow.
On May 14, 1993, private respondents filed a petition before the trial court for the determination of just compensation
for their agricultural lands situated in Arayat, Pampanga, which were acquired by the government pursuant to Presidential
Decree No. 27 (PD 27). The petition named as respondents the DAR and Land Bank. With leave of court, the petition
was amended to implead as co-respondents the registered tenants of the land.
After trial, the court rendered the assailed Decision the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of petitioners and against respondents, ordering respondents,
particularly, respondents Department of Agrarian Reform and the Land Bank of the Philippines, to pay these lands owned
by petitioners and which are the subject of acquisition by the State under its land reform program, the amount of THIRTY
PESOS (P30.00) per square meter, as the just compensation due for payment for same lands of petitioners located at
San Vicente (or Camba), Arayat, Pampanga.
Respondent Department of Agrarian Reform is also ordered to pay petitioners the amount of FIFTY THOUSAND PESOS
(P50,000.00) as Attorneys Fee, and to pay the cost of suit.
SO ORDERED.
[4]

DAR and Land Bank filed separate motions for reconsideration which were denied by the trial court in
its Order
[5]
dated July 30, 1996 for being pro forma as the same did not contain a notice of hearing. Thus, the prescriptive
period for filing an appeal was not tolled. Land Bank consequently failed to file a timely appeal and the
assailed Decision became final and executory.
Land Bank then filed a Petition for Relief from Order Dated 30 July 1996,
[6]
citing excusable negligence as its ground
for relief. Attached to the petition for relief were two affidavits of merit claiming that the failure to include in the motion for
reconsideration a notice of hearing was due to accident and/or mistake.
[7]
The affidavit of Land Banks counsel of record
notably states that he simply scanned and signed the Motion for Reconsideration for Agrarian Case No. 2005, Regional
Trial Court of Pampanga, Branch 48, not knowing, or unmindful that it had no notice of hearing
[8]
due to his heavy
workload.
The trial court, in its Order
[9]
of November 18, 1996, denied the petition for relief because Land Bank lost a remedy in
law due to its own negligence.
In the instant petition for review, Land Bank argues that the failure of its counsel to include a notice of hearing due to
pressure of work constitutes excusable negligence and does not make the motion for reconsideration pro
forma considering its allegedly meritorious defenses. Hence, the denial of its petition for relief from judgment was
erroneous.
According to Land Bank, private respondents should have sought the reconsideration of the DARs valuation of their
properties. Private respondents thus failed to exhaust administrative remedies when they filed a petition for the
determination of just compensation directly with the trial court. Land Bank also insists that the trial court erred in declaring
that PD 27 and Executive Order No. 228 (EO 228) are mere guidelines in the determination of just compensation, and in
relying on private respondents evidence of the valuation of the properties at the time of possession in 1993 and not on
Land Banks evidence of the value thereof as of the time of acquisition in 1972.
Private respondents filed a Comment
[10]
dated February 22, 1997, averring that Land Banks failure to include a
notice of hearing in its motion for reconsideration due merely to counsels heavy workload, which resulted in the motion
being declared pro forma, does not constitute excusable negligence, especially in light of the admission of Land Banks
counsel that he has been a lawyer since 1973 and has mastered the intricate art and technique of pleading.
Land Bank filed a Reply
[11]
dated March 12, 1997 insisting that equity considerations demand that it be heard on
substantive issues raised in its motion for reconsideration.
The Court gave due course to the petition and required the parties to submit their respective memoranda.
[12]
Both
parties complied.
[13]

The petition is unmeritorious.
At issue is whether counsels failure to include a notice of hearing constitutes excusable negligence entitling Land
Bank to a relief from judgment.
Section 1, Rule 38 of the 1997 Rules of Civil Procedure provides:
Sec. 1. Petition for relief from judgment, order, or other proceedings.When a judgment or final order is entered, or any
other proceeding is thereafter taken against a party in any court through fraud, accident, mistake, or excusable
negligence, he may file a petition in such court and in the same case praying that the judgment, order or proceeding be
set aside.
As can clearly be gleaned from the foregoing provision, the remedy of relief from judgment can only be resorted to on
grounds of fraud, accident, mistake or excusable negligence. Negligence to be excusable must be one which ordinary
diligence and prudence could not have guarded against.
[14]

Measured against this standard, the reason profferred by Land Banks counsel, i.e., that his heavy workload
prevented him from ensuring that the motion for reconsideration included a notice of hearing, was by no means
excusable.
Indeed, counsels admission that he simply scanned and signed the Motion for Reconsideration for Agrarian Case
No. 2005, Regional Trial Court of Pampanga, Branch 48, not knowing, or unmindful that it had no notice of hearing
speaks volumes of his arrant negligence, and cannot in any manner be deemed to constitute excusable negligence.
The failure to attach a notice of hearing would have been less odious if committed by a greenhorn but not by a lawyer
who claims to have mastered the intricate art and technique of pleading.
[15]

Indeed, a motion that does not contain the requisite notice of hearing is nothing but a mere scrap of paper. The clerk
of court does not even have the duty to accept it, much less to bring it to the attention of the presiding judge.
[16]
The trial
court therefore correctly considered the motion for reconsideration pro forma. Thus, it cannot be faulted for denying Land
Banks motion for reconsideration and petition for relief from judgment.
It should be emphasized at this point that procedural rules are designed to facilitate the adjudication of cases. Courts
and litigants alike are enjoined to abide strictly by the rules. While in certain instances, we allow a relaxation in the
application of the rules, we never intend to forge a weapon for erring litigants to violate the rules with impunity. The liberal
interpretation and application of rules apply only in proper cases of demonstrable merit and under justifiable causes and
circumstances. While it is true that litigation is not a game of technicalities, it is equally true that every case must be
prosecuted in accordance with the prescribed procedure to ensure an orderly and speedy administration of justice. Party
litigants and their counsel are well advised to abide by, rather than flaunt, procedural rules for these rules illumine the path
of the law and rationalize the pursuit of justice.
[17]

Aside from ruling on this procedural issue, the Court shall also resolve the other issues presented by Land Bank,
specifically as regards private respondents alleged failure to exhaust administrative remedies and the question of just
compensation.
Land Bank avers that private respondents should have sought the reconsideration of the DARs valuation instead of
filing a petition to fix just compensation with the trial court.
The records reveal that Land Banks contention is not entirely true. In fact, private respondents did write a letter
[18]
to
the DAR Secretary objecting to the land valuation summary submitted by the Municipal Agrarian Reform Office and
requesting a conference for the purpose of fixing just compensation. The letter, however, was left unanswered prompting
private respondents to file a petition directly with the trial court.
At any rate, in Philippine Veterans Bank v. Court of Appeals,
[19]
we declared that there is nothing contradictory
between the DARs primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original
jurisdiction over all matters involving the implementation of agrarian reform, which includes the determination of questions
of just compensation, and the original and exclusive jurisdiction of regional trial courts over all petitions for the
determination of just compensation. The first refers to administrative proceedings, while the second refers to judicial
proceedings.
In accordance with settled principles of administrative law, primary jurisdiction is vested in the DAR to determine in a
preliminary manner the just compensation for the lands taken under the agrarian reform program, but such determination
is subject to challenge before the courts. The resolution of just compensation cases for the taking of lands under agrarian
reform is, after all, essentially a judicial function.
[20]

Thus, the trial did not err in taking cognizance of the case as the determination of just compensation is a function
addressed to the courts of justice.
Land Banks contention that the property was acquired for purposes of agrarian reform on October 21, 1972, the time
of the effectivity of PD 27, ergo just compensation should be based on the value of the property as of that time and not at
the time of possession in 1993, is likewise erroneous. In Office of the President, Malacaang, Manila v. Court of
Appeals,
[21]
we ruled that the seizure of the landholding did not take place on the date of effectivity of PD 27 but would take
effect on the payment of just compensation.
Under the factual circumstances of this case, the agrarian reform process is still incomplete as the just compensation
to be paid private respondents has yet to be settled. Considering the passage of Republic Act No. 6657 (RA
6657)
[22]
before the completion of this process, the just compensation should be determined and the process concluded
under the said law. Indeed, RA 6657 is the applicable law, with PD 27 and EO 228 having only suppletory effect,
conformably with our ruling in Paris v. Alfeche.
[23]

Section 17 of RA 6657 which is particularly relevant, providing as it does the guideposts for the determination of just
compensation, reads as follows:
Sec. 17. Determination of Just Compensation.In determining just compensation, the cost of acquisition of the land, the
current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations,
and the assessment made by government assessors shall be considered. The social and economic benefits contributed
by the farmers and the farm-workers and by the Government to the property as well as the non-payment of taxes or loans
secured from any government financing institution on the said land shall be considered as additional factors to determine
its valuation.
It would certainly be inequitable to determine just compensation based on the guideline provided by PD 27 and EO
228 considering the DARs failure to determine the just compensation for a considerable length of time. That just
compensation should be determined in accordance with RA 6657, and not PD 27 or EO 228, is especially imperative
considering that just compensation should be the full and fair equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and ample.
[24]

In this case, the trial court arrived at the just compensation due private respondents for their property, taking into
account its nature as irrigated land, location along the highway, market value, assessors value and the volume and value
of its produce. This Court is convinced that the trial court correctly determined the amount of just compensation due
private respondents in accordance with, and guided by, RA 6657 and existing jurisprudence.
WHEREFORE, the petition is DENIED. Costs against petitioner.
SO ORDERED.
MARIA PAZ V. NEPOMUCENO, joined by her husband, FERMIN A. NEPOMUCENO, Petitioners,
vs.
CITY OF SURIGAO and SALVADOR SERING in his capacity as City Mayor of Surigao, Respondents.
D E C I S I O N
CORONA, J .:
Petitioners assail the February 29, 2000 decision
1
and October 12, 2000 resolution of the Court of Appeals (CA) in CA-
G.R. CV No. 56461 affirming with modification the decision of the Regional Trial Court (RTC) of Surigao City, Branch 32,
in Civil Case No. 4570.
Civil Case No. 4570 was a complaint for "Recovery of Real Property and/or its Market Value" filed by petitioner Maria Paz
Nepomuceno to recover a 652 sq. m. portion
2
of her 50,000 sq. m. lot
3
which was occupied, developed and used as a city
road by the city government of Surigao. Maria Paz alleged that the city government neither asked her permission to use
the land nor instituted expropriation proceedings for its acquisition. On October 4, 1994, she and her husband, co-
petitioner, Fermin A. Nepomuceno, wrote respondent (then Surigao City Mayor) Salvador Sering a letter proposing an
amicable settlement for the payment of the portion taken over by the city. They subsequently met with Mayor Sering to
discuss their proposal but the mayor rebuffed them in public and refused to pay them anything. In a letter dated January
30, 1995, petitioners sought reconsideration of the mayors stand. But again, the city mayor turned this down in his reply
dated January 31, 1995. As a consequence, petitioners claimed that they suffered mental anguish, embarrassment,
disappointment and emotional distress which entitled them to moral damages.
In their answer, respondents admitted the existence of the road in question but alleged that it was constructed way back in
the 1960s during the administration of former Mayor Pedro Espina. At that time, the lot was owned by the spouses
Vicente and Josefa Fernandez who signed a road right-of-way agreement in favor of the municipal government. However,
a copy of the agreement could no longer be found because the records were completely destroyed and lost when the
Office of the City Engineer was demolished by typhoon Nitang in 1994.
After hearing the parties and evaluating their respective evidence, the RTC rendered its decision
4
and held:
WHEREFORE, premises considered, judgment is hereby rendered ordering the City of Surigao to pay to Maria Paz V.
Nepomuceno and her husband, Fermin Nepomuceno, the sum of P5,000.00 as attorneys fees, and the further sum
of P3,260.00 as compensation for the portion of land in dispute, with legal interest thereon from 1960 until fully paid, and
upon payment, directing her to execute the corresponding deed of conveyance in favor of the said defendant. The Clerk of
Court shall execute the necessary instrument in the event of her failure to do so.
The claims for moral and exemplary damages are denied for lack of basis. No pronouncement as to costs.
SO ORDERED.
5

Unsatisfied with that decision, the petitioners appealed to the CA. As stated earlier, the CA modified the RTC decision and
held that petitioners were entitled to P30,000 as moral damages for having been rebuffed by Mayor Sering in the
presence of other people. It also awarded petitioners P20,000 as attorneys fees and litigation expenses considering that
they were forced to litigate to protect their rights and had to travel to Surigao City from their residence in Ormoc City to
prosecute their claim. The CA affirmed the decision of the trial court in all other respects. Petitioners filed a motion for
reconsideration but it was denied. Hence, this petition.
Petitioners claim that, in fixing the value of their property, justice and equity demand that the value at the time of actual
payment should be the basis, not the value at the time of the taking as the RTC and CA held. They demandP200/sq. m. or
a total sum of P130,400 plus legal interest. In the alternative, petitioners pray for the re-examination of the meaning of just
compensation and cite the separate concurring opinion of Justice Antonio Barredo inMunicipality of La Carlota v. Spouses
Gan.
6

Petitioners also assert that the CA decision in Spouses Mamerto Espina, Sr. and Flor Espina v. City of Ormoc
7
should be
applied to this case because of the substantial factual similarity between the two cases. In that case, the City of Ormoc
was directed to institute a separate expropriation proceeding over the subject property.
Moreover, petitioners maintain that exemplary damages should be awarded because respondent City of Surigao illegally
took their property.
Petitioners arguments are without merit.
In a long line of cases, we have consistently ruled that where actual taking is made without the benefit of expropriation
proceedings and the owner seeks recovery of the possession of the property prior to the filing of expropriation
proceedings, it is the value of the property at the time of taking that is controlling for purposes of compensation.
8
As
pointed out in Republic v. Lara,
9
the reason for this rule is:
The owner of private property should be compensated only for what he actually loses; it is not intended that his
compensation shall extend beyond his loss or injury. And what he loses is only the actual value of his property at
the time it is taken. This is the only way the compensation to be paid can be truly just; i.e., "just" not only to the individual
whose property is taken, "but to the public, which is to pay for it."
Thus, the value of petitioners property must be ascertained as of 1960 when it was actually taken. It is as of that time that
the real measure of their loss may fairly be adjudged. The value, once fixed, shall earn interest at the legal rate until full
payment is effected, conformably with other principles laid down by case law.
10

Regarding petitioners contention on the applicability of Article 1250 of the Civil Code,
11
Republic v. CA
12
is enlightening:
Article 1250 of the Civil Code, providing that, in case of extraordinary inflation or deflation, the value of the currency at
the time of the establishment of the obligation shall be the basis for the payment when no agreement to the contrary is
stipulated, has strict application only to contractual obligations. In other words, a contractual agreement is needed for
the effects of extraordinary inflation to be taken into account to alter the value of the currency. (emphasis
supplied)1avvphi1
Since there was never any contractual obligation between the parties in this case, Article 1250 of the Civil Code finds no
application.
Moreover, petitioners cannot properly insist on the application of the CA decision in Spouses Mamerto Espina, Sr. and
Flor Espina v. City of Ormoc.
13
A decision of the CA does not establish judicial precedent. A ruling of the CA on any
question of law is not binding on this Court.
14
In fact, the Court may review, modify or reverse any such ruling of the CA.
Finally, we deny petitioners prayer for exemplary damages. Exemplary damages may be imposed by way of example or
correction for the public good.
15
The award of these damages is meant to be a deterrent to socially deleterious
actions.
16
Exemplary damages would have been appropriate had it been shown that the city government indeed misused
its power of eminent domain.
17
In this case, both the RTC and the CA found there was no socially deleterious action or
misuse of power to speak of. We see no reason to rule otherwise.
WHEREFORE, the petition is hereby DENIED.
Costs against petitioners.
SO ORDERED.
NATIONAL POWER CORPORATION, petitioners,
vs.
ANGEL SUAREZ, CARLOS SUAREZ, MARIA THERESA SUAREZ, AND ROSARIO SUAREZ, respondents.
D E C I S I O N
CARPIO MORALES, J .:
In issue in the present petition is whether petitioner, the National Power Corporation, in its acquisition of an easement of
right of way (aerial) over a parcel of land, only a fee, not the full value of the land, must be paid.
In order to implement its 350 KV Leyte Luzon HDVC Power Transmission Project which aims to transmit the excess
electrical generating capacity from the Leyte Geothermal Plant to Luzon and various load centers, petitioner filed before
the Regional Trial Court (RTC) of Sorsogon, Sorsogon, a complaint on August 23, 1996
1
for expropriation of a parcel of
land (the property) in Brgy. Bibincahan, Sorsogon, Sorsogon registered in the names of Angel Suarez, Carlos Suarez, Ma.
Teresa Suarez and Rosario Suarez (respondents).
In accordance with Section 2 of Presidential Decree No. 42,
2
petitioner deposited with the Philippine National Bank,
Legazpi City Branch the amount of P7,465.71 "representing the provisional value" of the property,
3
alleged to cover an
area of 24,350 square meters. On September 23, 1996, it served a Notice to Take Possession of the property to
respondents.
On petitioners Ex-Parte Motion, Branch 52 of the Sorsogon RTC issued a Writ of Possession.
Respondents filed on May 5, 1997 their Answer with Counterclaim, alleging that the property covers an area of 34,950,
not 24,350 square meters, and that petitioner had already constructed two transmission towers in the middle of the
property, cut down more or less 737 trees of different varieties (169 fruit bearing coconut trees, 11 coconut trees seven
years old and below, 36 various species of fruit trees, 89 bamboo trees, 77 banana trees, 39 shade trees and 50 madre
de cacao trees)
4
and an estimated 562.86 board feet of hardwood trees and 706.80 board feet of softwood trees.
5
They
thus moved for the determination of just compensation which was granted by the court which appointed commissioners
for the purpose.
From the Commissioners Report
6
dated September 11, 1997, the commissioners determined the just compensation by
using "Market Data Analysis, Income Productivity and Zonal Valuation" of the property and arrived at the following:
FINAL VALUE:
Since the subject land is surrounded by residential subdivisions, and the development thereof to a residential subdivision
is what the owners thereof are mulling, the following computation was arrived to reflect said consideration, to wit:
MARKET DATA
ANALYSIS
P990,071.00 (70%)
=
P693,049.70
INCOME
PRODUCTIVITY
P335,481.44 (20%)
=
P 67,096.28
ZONAL
VALUATION
P237,144.88 (10%)
=
P23,714.48
P783,860.46
After considering all the limitations, the herein undersigned commissioners respectfully manifest that the just
compensation of the land in question is in the amount of P783,860.46. (Emphasis supplied)
In its Manifestation/Comments by way of Opposition to the Commissioners Report,
7
petitioner assailed the report as
bereft of legal basis, the Market Data Analysis and Income Productivity approaches being mere assumptions, whereas the
Zonal Valuation approach is being used only for real estate tax purposes.
By Decision of April 15, 1999,
8
the trial court adopted as basis for determining just compensation the recommendation of
the Commissioners. Thus it disposed:
WHEREFORE, premises considered, judgment is hereby rendered to wit:
a. Fixing the just compensation of the entire 24, 350 sq.m. taken by the plaintiff as right-of-way easement from the
defendants in the total amount of Seven Hundred Thousand Eight Hundred Three (sic) and Eight Hundred Sixty Pesos &
46/100 (P783, 860.46) Philippine Currency.
b. Ordering the plaintiff National Power Corporation (NPC) to pay the defendants the amount of P783, 860.46 as the just
compensation for the property taken less the amount of P7,465.71 representing the provisional value of the property
which was deposited at the Philippine National Bank and other sums due the Government for unpaid real estate taxes and
other imposts.
c. Ordering the dismissal of the counterclaim.
d. Without pronouncement as to cost.
SO ORDERED. (Underscoring supplied)
The Court of Appeals affirmed the trial courts decision, hence petitioners present Petition for Review.
Petitioner contends that since it merely seeks an aerial easement over the property, the decision of the appellate court
affirming the trial courts order for the payment of just compensation in the amount of P783, 860.46 representing the total
value of the property and excluding the application of Section 3A (b) of RA 6395
9
is erroneous.
Petitioners plea for the application of Section 3A(b) of RA 6395 which directs the payment of an amount equivalent to
only 10% of the market value of the property as just compensation for an easement of right of way does not lie.
Granting arguendo that what petitioner acquired over respondents property was purely an easement of a right of way,
still, we cannot sustain its view that it should pay only an easement fee and not the full value of the property. The
acquisition of such an easement falls within the purview of the power of eminent domain. This conclusion finds support in
similar cases in which the Supreme Court sustained the award of just compensation for private property condemned for
public use. x x x
True, an easement of right of way transmits no rights except the easement itself, and respondent retains full ownership of
the property. The acquisition of such easement is, nevertheless, not gratis. As correctly observed by the CA, considering
the nature and the effect of the installation of power lines, the limitations on the use of the land for an indefinite
period would deprive respondent of normal use of the property. For this reason, the latter is entitled to payment of a
just compensation, which must be neither more nor less than the monetary equivalent of the land.
10
(Emphasis and
underscoring supplied).
Petitioners assertion that respondents can still make use of the property by planting corn, rice, root crops and similar
plants
11
fails to consider that the property was originally tilled and suited for, as reflected in the Commissioners Report,
234 fruit bearing coconut trees, 617 abaca plants, 50 madre de cacao and 23 jackfruit trees.
12
That petitioner prohibited
respondents from planting trees higher than three meters clearly shows that the easement had impaired respondents
beneficial enjoyment of their property to warrant the imposition of payment of its full value.
The measure is thus not the takers gain but the owners loss. The word "just" is used to intensify the meaning of the word
"compensation" and to thereby convey the idea that the equivalent to be rendered for the property to be taken shall be
real, substantial, full and ample.
13

The nature, as well as the character of the land at the time of taking is thus the principal criterion in determining just
compensation. All the facts as to the condition of the property and its surroundings, as well as its improvements and
capabilities, must thus be considered.
14

WHEREFORE, the Petition is DENIED.
SO ORDERED.
NATIONAL POWER CORPORATION, Petitioner,
vs.
PUREFOODS CORPORATION, VELASCO, JR., and SOLID DEVELOPMENT CORPORATION, JOSE ORTEGA, JR.,
SILVESTRE BAUTISTA, ALFREDO CABANDE, HEIRS OF VICTOR TRINIDAD, and MOLDEX REALTY
INCORPORATED,, Respondents.
D E C I S I O N
TINGA, J .:
This is a petition for review on certiorari
1
under Rule 45 of the 1997 Rules of Civil Procedure assailing the Decision
2
dated
07 November 2003 of the Court of Appeals in CA-G.R. CV No. 73460 which affirmed with modification the
Decision
3
dated 17 September 2001 of the Regional Trial Court (RTC) of Malolos, Bulacan, Branch 18 in Civil Case No.
915-M-97 for eminent domain.
The following factual antecedents are undisputed and are matters of record.
Petitioner National Power Corporation (NAPOCOR) is a government-owned and controlled corporation created by virtue
of Republic Act (R.A.) No. 6395,
4
as amended, for the purpose of undertaking the development of hydroelectric power
generation, the production of electricity from nuclear, geothermal and other sources, and the transmission of electric
power on a nationwide basis. It is also empowered to acquire property incident to or necessary, convenient or proper to
carry out the purposes for which it was created,
5
enter private property in the lawful performance of its business purposes
provided that the owners of such private property shall be indemnified for any damage that may be caused thereby, and
exercise the right of eminent domain.
To construct and maintain its Northwestern Luzon Project, or particularly the the San Jose-San Manuel 500 KV
Transmission Line Project, NAPOCOR had to acquire an easement of right-of-way over certain parcels of land situated in
the towns of Angat, San Rafael and San Ildefonso and in the city of San Jose del Monteall in the province of Bulacan.
On 5 November 1997, NAPOCOR filed a special civil action for eminent domain
6
before the RTC of Malolos, Bulacan.
Named defendants were the vendors and vendees of the affected parcels of land, namely, Arcadio T. Cruz, Calixto Cruz,
Deogracias C. Mendoza, Hacienda Sapang Palay, and herein respondents Purefoods Corporation (Purefoods), Solid
Development Corporation (SDC), Jose Ortega, Jr., Silvestre Bautista, Alfredo Cabande, the Heirs of Victor Trinidad (Heirs
of Trinidad) and Moldex Realty Incorporated (Moldex).
The complaint alleged that the defendants were either the registered owners or the claimants of the affected pieces of
property described as follows:
Owner/
Claimant
Lot/
Blk.
No.
Tax
Dec.
No.
Title
No.
Total
Area
Area
Affected
In Sq.
Assessed
Value
P
Classifi-cation
Of Land
In Sq.
M.
M.
1. Arcadio
T. Cruz/
Purefoods
Corp.
2965 95-
01010-
01090
RT-
73-
15217
246,061 11,083 P3,324.90 Cogon land
2. Calixto
Cruz/
Purefoods
Corp.
1948 97-
01010-
00153
T-278-
287
(M)
27,981 4,161 14,979.60 Poultry/ Piggery/
Livestock Site
3.
Deogracias
C. Mendoza/
Moldex
Realty Corp.
1258 94-
21011-
02796
- 18,992 3,387.50 7,398.31 Agri-cultural
4. Hacienda
Sapang
Palay/Moldex
Realty
Corporation
1255 96-
21017-
00134
- 1,450,810 25,170 77,669.12 Agri-cultural
5. Solid
Devt. Corp.
rep. by
Domingo P.
Gaw
1889 93-
020-
00171
CLOA-
T-
2322
21,743 6,871 8,039.00 Riceland
6. Jose
Ortega, Jr.
2186-
C
00027 T-
50926
12,060 2,471 4,293.27 Riceland/Pasture
7. Silvestre
Bautista/
Alfredo
Cabande
rep. by
Temestocles
Cabande, Jr.
1981-
B
93-
020-
00564
- 7,785 5,927 6,934.70 Agri-cultural
8. Heirs of
Lucia Vda.
de Trinidad/
Alfredo
Cabande
rep. by
Temestocles
Cabande, Jr.
1981-
A
93-
020-
00563
CLOA-
T-
6359
13,200 3,356 3,926.52 Agri-cultural
[Total] 62,426.50 sq. m. P126,565.42
7

The complaint also alleged the public purpose of the Northwestern Luzon Project, as well as the urgency and necessity of
acquiring easements of right-of-way over the said parcels of land consisting of 62,426.50 square meters. It also averred
that the affected properties had not been expropriated for public use and were selected by NAPOCOR in a manner
compatible with the greatest public good and the least private injury and that the negotiations between NAPOCOR and
the defendants had failed.
8
The complaint prayed, among others, that the RTC issue a writ of possession in favor of
NAPOCOR in the event that it would be refused entry to the affected properties.
9

Among the several defendants, only herein respondents Heirs of Trinidad,
10
SDC,
11
Moldex
12
and Purefoods
13
filed their
respective answers.
For their part, respondent Heirs of Trinidad claimed that they should be indemnified for the value of the affected property
based on the prevailing market purchase price of P750.00/sq m and that co-defendant Alfredo Cabande, not being the
owner of any of the affected properties, should not be compensated. They added that there are other parcels of land
within the area which are more suitable for NAPOCORs project.
Respondent Moldex, for its part, alleged that the expropriation of part of the landholding in which it has a propriety interest
would divest the peripheral area of its value and render the same totally useless; thus, it should be compensated for the
loss of the peripheral area as well.
14

In praying for the dismissal of the complaint, respondent SDC averred that the taking would not serve any public purpose
and that the selection of its property for expropriation would not be compatible with the greatest public good and the least
private injury.
15

Respondent Purefoods similarly prayed for the dismissal of the complaint on the ground of the failure of NAPOCOR to
append copies of the pertinent Torrens titles to the complaint. It also averred that co-defendants Arcadio and Calixto Cruz
had no rights or interests in the affected properties as they both had already sold the properties to it. As to the amount of
just compensation, it averred that NAPOCORs offer was excessively low, undervalued and obsolete and that its action
had caused extreme prejudice to its investment and further delay in the construction and development of its piggery
business, thereby adversely affecting its operation.
16

Meanwhile, NAPOCOR filed its Urgent Ex Parte Motion for the Issuance of Writ of Possession
17
on 19 December 1997
wherein it alleged that it had deposited with the Land Bank of the Philippines, NPC Branch, Diliman, Quezon City the
amount of P126,565.42 as provisional valuation of the properties sought to be expropriated and that it had sent a Notice
to Take Possession
18
of said properties. On 06 January 1998, the RTC directed the clerk of court to issue a writ of
possession.
19

After the pre-trial conference, the RTC issued an Order
20
dated 14 June 1999, reflecting the parties agreement to limit the
issues to the amount of just compensation and to whether respondent Moldex was entitled to just compensation on the
devaluation of the peripheral area within its property.
When the first set of appointed commissioners failed to discharge their duties, the RTC appointed a second set of
commissioners namely, Ret. General Juanito Malto, Atty. Emmanuel Ortega and Atty. Antonio V. Magdasocwho took
their oaths of office and forthwith conducted a hearing.
21
On 18 May 2001, the commissioners submitted separate reports
to the RTC which formed part of the case records.
22
In the main, the commissioners recommended that the compensation
due from NAPOCOR be based on the fair market value of P600.00/sq m for properties belonging to respondent Moldex
and P400.00/sq m for the undeveloped or underdeveloped properties belonging to the rest of the respondents.
23
The case
was then submitted for decision.
24

On 17 September 2001, the RTC rendered a Decision,
25
the dispositive portion of which reads:
WHEREFORE, in view of the foregoing premises, Judgment is hereby rendered as follows:
1. Ordering the expropriation of:
a. 3,305 square meters portion of 18,992 square meters of land of Lot 1258-A, situated in San Jose del
Monte, Bulacan, described and covered by Tax Declaration No. 94-21011-02796 issued by then
Municipal Assessor of San Jose del Monte, Bulacan, owned by/registered in the name of MOLDEX
REALTY INCORPORATED;
b. 24,180 square meters portion of 1,450,810 square meters of land (Lot 2A-1, formerly Lot 1255),
situated in San Jose del Monte, Bulacan, described in and covered by Tax Declaration No. 96-21017-
00134 by then Municipal Assessor of San Jose del Monte, Bulacan, owned by/registered in the name of
MOLDEX REALTY INCORPORATED;
c. 11,083 square meters portion of 246,061 square meters of land (Lot 2965), situated in Angat, Bulacan,
described in and covered by TCT No. RT-73-15217 (T-274516-M) issued by the Register of Deeds of
Bulacan, owned by/registered in the name of PUREFOODS CORPORATION;
d. 4,161 square meters portion of 27,981 square meters of land (Lot 1948), situated in Angat, Bulacan
described in and covered by TCT No. T-278287 (M) issued by the Register of Deeds of Bulacan, owned
by/registered in the name of PUREFOODS CORPORATION;
e. 6,871 square meters portion of 27,743 square meters of land (Lot 1889), situated in San Idelfonso,
Bulacan, described in and covered by CLOA T-2322, issued by the Register of Deeds of Bulacan, owned
by/registered in the name of SOLID DEVELOPMENT CORPORATION;
f. 2,471 square meters portion of 12,060 square meters of land (Lot 2186-C), situated in San Rafael,
Bulacan, described in and covered by TCT No. T-50926, issued by the Register of Deeds of Bulacan,
owned by/registered in the name of Jose Ortega, Jr.;
g. 5,927 square meters portion of 7,785 square meters of land (Lot 1981-B), situated in San Idelfonso,
Bulacan, described in and covered by Tax Declaration No. 93-020-00564, issued by the Municipal
Assessor of San Ildefonso, Bulacan, owned by/registered in/claimed by Silvestre Bautista/Alfredo
Cabande;
h. 3,356 square meters portion of 13,200 square meters of land (Lot 1981-A), situated in San Ildefonso,
Bulacan, described in and covered by CLOA T-6359, issued by the Register of Deeds of Bulacan, owned
by/registered in/claimed by the Heirs of Victor Trinidad/Alfredo Cabande,
all in favor of plaintiff NATIONAL POWER CORPORATION and against above-named defendants, for the
public use or purpose described in the Complaint and in this Decision;
2. fixing the amount of Six Hundred Pesos (P600.00) per square meter for 27,485 square meters of land of
MOLDEX REALTY INCORPORATED as just compensation and fixing the amount of Four Hundred Pesos
(P400.00) per square meter for 15,244 square meters of land of PUREFOODS CORPORATION, 6,871 square
meters of land of SOLID DEVELOPMENT CORPORATION, 2,471 square meters of land of JOSE ORTEGA, JR.,
5,927 square meters of land of SILVESTRE BAUTISTA/ALFREDO CABANDE and 3,356 square meters of land
of the HEIRS OF VICTOR TRINIDAD/ALFREDO CABANDE, as just compensation, to be paid by plaintiff
NATIONAL POWER CORPORATION to said defendants/claimants or their representatives, deducting therefrom
any unpaid and overdue real estate taxes due to the Government;
3. ordering payment of said just compensation by plaintiff NATIONAL POWER CORPORATION to named
defendants or the latters representatives with legal interest at 6% per annum from January 6, 1998 until finality of
this Decision and at 12% per annum from its finality until full payment thereof.
Let each copy of this DECISION be furnished to and recorded in the Office of the Register of Deeds of Bulacan, Municipal
Assessor of Angat, Bulacan, City Assessor of City of San Jose del Monte, Bulacan, Municipal Assessor of San Ildefonso,
Bulacan and Municipal Assessor of San Rafael, Bulacan.
No costs is hereby ordered since plaintiff NATIONAL POWER CORPORATION is, under its Charter, exempt from
payment of costs of the proceedings.
SO ORDERED.
26

Respondent Moldex sought reconsideration of the aforesaid decision
27
but the same was denied by the RTC in its
Order
28
dated 07 December 2001. Both NAPOCOR and respondent Moldex filed separate appeals before the Court of
Appeals.
Respondent Moldex argued that the RTC erred in the following instances: (1) in ruling that just compensation should be
paid at P600.00/sq m and not P1,600.00/sq m; (2) in not imposing an interest of 12% per annum reckoned from the taking
until the finality of the decision; and (3) in not ordering the payment of just compensation for the peripheral portion of the
affected property.
For its part, NAPOCOR assailed the RTCs valuations of the properties at P600.00/sq m and P400.00/sq m, contending
that the same are not based on the value of the properties at the time of taking when the properties were still agricultural
in nature. It claimed that only an easement fee, which should not exceed 10% of the declared market value, should be
paid to respondents. It also questioned the award of interest of 12% per annum from the finality of the decision until the
full payment of the amount adjudged.
On 7 November 2003, the Court of Appeals rendered the assailed decision, affirming the RTC decision in all respects
except for the period during which the interest of 12% per annum would accrue.
29

Only respondent Moldex sought reconsideration of the 07 November 2003 Decision of the Court of Appeals.
30

NAPOCOR, through the Office of the Solicitor General (OSG), elevated the case to this Court via a petition for review on
certiorari.
31
Respondent Moldex nonetheless filed a comment on the petition, stating that its motion for reconsideration of
the 7 November 2003 Decision of the Court of Appeals was still pending and that hence taking cognizance of the petition
would be premature.
32
Respondents Heirs of Trinidad,
33

Purefoods
34
and SDC
35
likewise filed separate comments on NAPOCORs petition.
However, on 12 April 2004, NAPOCOR filed an Omnibus Motion To Withdraw Petition For Review On Certiorari And To
Remand The Case To The Court Of Appeals,
36
informing the Court of the compromise agreement forged on 19 March
2004 between NAPOCOR and respondent Moldex. NAPOCOR subsequently filed a Manifestation and Motion,
37
praying
that the case be remanded to the Court of Appeals for proper disposition only insofar as respondent Moldex is concerned.
Attached to the said pleading is a copy of the compromise agreement
38
dated 19 March 2004 and a copy of NAPOCOR
Board Resolution No. 2003-13,
39
evincing that the proposed compromise settlement submitted by respondent Moldex has
been duly approved.
In a Resolution
40
dated 2 June 2004, the Court resolved to defer action on NAPOCORs omnibus motion and instead
require respondent Moldex to comment thereon. On 7 July 2004, respondent Moldex filed a Comment,
41
confirming the
existence of the compromise agreement and manifesting its conformity with the omnibus motion filed by the OSG. On 18
August 2004, the Court issued a Resolution granting the withdrawal of the petition only as regards respondent Moldex.
42

In the instant petition, NAPOCOR is assailing the Court of Appeals reliance on the commissioners report in fixing just
compensation based on the full market value of the affected properties. NAPOCOR contends that only an easement of
right-of-way for the construction of the transmission line project is being claimed, thus, only an easement fee equivalent to
10% of the fair market value of the properties should be paid to the affected property owners. NAPOCOR cites Section
3A, R.A. 6395, as amended
43
and the implementing regulation of R.A. No. 8974
44
in support of this argument.
Respondent Purefoods counters that the appellate courts determination of just compensation is a factual finding, which
may be reviewed by this Court only when the case falls within the recognized exceptions to the prohibition against factual
review. Since the instant case does not fall under any of the exceptions, it argues that the issue of just compensation may
not be reviewed in the instant proceeding.
On the other hand, there is a question of law when the issue does not call for an examination of the probative value of the
evidence presented, the truth or falsehood of facts being admitted and the doubt concerns the correct application of law
and jurisprudence on the matter. On the other hand, there is a question of fact when the doubt or controversy arises as to
the truth or falsity of the alleged facts. When there is no dispute as to fact, the question of whether or not the conclusion
drawn therefrom is correct is a question of law.
45
In the instant case, NAPOCOR is raising a question of law, that is,
whether or not only an easement fee of 10% of the market value of the expropriated properties should be paid to the
affected owners. This issue does not call for the reevaluation of the probative value of the evidence presented but rather
the determination of whether the pertinent laws cited by NAPOCOR in support of its argument are applicable to the instant
case.
Now, to the core issue of just compensation.
The question of just compensation for an easement of right-of-way over a parcel of land that will be traversed by
NAPOCORs transmission lines has already been answered in National Power Corporation v. Manubay Agro-Industrial
Development Corporation.
46
In that case, the Court held that because of the nature of the easement, which will deprive
the normal use of the land for an indefinite period, just compensation must be based on the full market value of the
affected properties. The Court explained, thus:
Granting arguendo that what petitioner acquired over respondents property was purely an easement of a right of way,
still, we cannot sustain its view that it should pay only an easement fee, and not the full value of the property. The
acquisition of such an easement falls within the purview of the power of eminent domain. This conclusion finds support in
similar cases in which the Supreme Court sustained the award of just compensation for private property condemned for
public use. Republic v. PLDT held thus:
"x x x. Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession
of, the expropriated property; but no cogent reason appears why the said power may not be availed of to impose only a
burden upon the owner of condemned property, without loss of title and possession. It is unquestionable that real property
may, through expropriation, be subjected to an easement of right of way."
True, an easement of a right of way transmits no rights except the easement itself, and respondent retains full ownership
of the property. The acquisition of such easement is, nevertheless, not gratis. As correctly observed by the CA,
considering the nature and the effect of the installation power lines, the limitations on the use of the land for an indefinite
period would deprive respondent of normal use of the property. For this reason, the latter is entitled to payment of a just
compensation, which must be neither more nor less than the monetary equivalent of the land.
47

Also, in National Power Corporation v. Aguirre-Paderanga,
48
the Court noted that the passage of NAPOCORs
transmission lines over the affected property causes not only actual damage but also restriction on the agricultural and
economic activity normally undertaken on the entire property. While NAPOCOR in that case was seeking to acquire only
an easement of right-of-way, the Court nonetheless ruled that the just compensation in the amount of only 10% of the
market value of the property was not enough to indemnify the incursion on the affected property.
The Court explained therein that expropriation is not limited to the acquisition of real property with a corresponding
transfer of title or possession. The right-of-way easement resulting in a restriction or limitation on property rights over the
land traversed by transmission lines, as in the present case, also falls within the ambit of the term "expropriation."
49
In
eminent domain or expropriation proceedings, the general rule is that the just compensation to which the owner of the
condemned property is entitled 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 given and received
therefor. The aforementioned 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.1wphi1 In addition to the market value of
the portion taken, he is also entitled to recover the consequential damage, if any, to the remaining part of the property. At
the same time, from the total compensation must be deducted the value of the consequential benefits."
50

While Section 3(a) of R.A. No. 6395, as amended, and the implementing rule of R.A. No. 8974 indeed state that only 10%
of the market value of the property is due to the owner of the property subject to an easement of right-of-way, said rule is
not binding on the Court. Well-settled is the rule that the determination of "just compensation" in eminent domain cases is
a judicial function.
51
In Export Processing Zone Authority v. Dulay,
52
the Court held that any valuation for just
compensation laid down in the statutes may serve only as guiding principle or one of the factors in determining just
compensation but it may not substitute the courts own judgment as to what amount should be awarded and how to arrive
at such amount.
53
The executive
department or the legislature may make the initial determinations but when a party claims a violation of the guarantee in
the Bill of Rights that private property may not be taken for public use without just compensation, no statute, decree, or
executive order can mandate that its own determination shall prevail over the courts findings. Much less can the courts be
precluded from looking into the "just-ness" of the decreed compensation.
54

NAPOCOR argues that the Court of Appeals should not have adopted the commissioners report hook, line and sinker
because the same was based exclusively on relative prices of adjoining lots without showing evidence on their proximity
and of the sales of similar classification.
The duty of the court in considering the commissioners report is to satisfy itself that just compensation will be made to the
defendant by its final judgment in the matter, and to fulfill its duty in this respect, the court will be obliged to exercise its
discretion in dealing with the report as the particular circumstances of the case may require. Rule 67, Section 8 of the
1997 Rules of Civil Procedure clearly shows that the trial court has the discretion to act upon the commissioners report in
any of the following ways: (1) it may accept the same and render judgment therewith; or (2) for cause shown, it may [a]
recommit the report to the commissioners for further report of facts; or [b] set aside the report and appoint new
commissioners; or [c] accept the report in part and reject it in part; and it may make such order or render such judgment
as shall secure to the plaintiff the property essential to the exercise of his right of expropriation, and to the defendant just
compensation for the property so taken.
55

In the instant case, the Court finds no reversible error in the RTCs determination of just compensation even if the same
was based on the commissioners report, there being no showing that said report was tainted with irregularity, fraud or
bias. Noteworthy are the following observations made by the Court of Appeals on the RTCs assessment of the
commissioners report:
In the case at bar, the trial court based its determination of just compensation on the reports and proceedings made by
the Commissioners, by adopting the findings of Commissioners Ortega and Magdasoc who made a Joint Commissioners
Report. The aforesaid report has also taken into consideration the report made by the other Commissioner B/G Malto. In
their joint report, the commissioners recommended that the fair market value of the property subject of the expropriation
proceedings, owned by Moldex is P700.00 per square meter while other properties at P400.00. In the separate report of
Commissioner Malto, at first it valued the subject properties atP700.00 per square meter and subsequently, it made an
amended report, taking into account the Discovery of the Contracts to Sell during the year 1996 showing that the value of
the property of Moldex was P1,600 per square meter and another in the year 1999 that shows that its value was P1,800
per square meter. x x x However, there was no evidence that such lands subject of the aforesaid contracts to sell is
sufficiently similar to the properties subject of expropriation owned by appellant Moldex. x x x It cannot be said that all
properties in this area have the same market value nor do the contracts to sell conclusive as to the fair market price of a
parcel of land because it may be above its fair market value. Appellant Moldex did not present evidence showing that the
lots subject of contracts to sell is similar to the lands subject of expropriation. Thus, evidence presented by appellant
Moldex cannot be a basis in determining the real fair market value of the properties subject of expropriation. x x x
x x x It should be observed in the report made by the Commissioners that they made an ocular inspection of the area and
they found that the property is semi-cogonal and agricultural in character and that during their inspection they noticed
trace of old rice stalks that marked the surrounding [e]specially under the transmission lines of the plaintiff-appellant NPC.
Since the Commissioners are disinterested persons who made the ocular inspection and report, their report is entitled to
great weight.
x x x It can be clearly deduced from the report of the Commissioners that although the report was made in year 2001, they
considered other facts which were reflective of the value of the subject properties even before such time. x x x they also
considered the Deeds of Sale execute[d] in 1996 and they also inquired with the Office of the Provincial Assessors to aid
them in arriving at the fair market value of the subject lands. x x x n the joint report of Commissioners Ortega and
Magdasoc, it was reflected that the value of the property ranged from P500.00 toP1,000.00 if the property is developed
and improved and in the report of Commissioner Malto, from an appraisal of Cuervo Appraisers, Inc. and Asian Appraisal
Co. the developed lots in the area could be valued at P525.00 toP700.00 per square meter. x x x Thus, from this [sic]
facts, it could be clearly shown that in recommending the valuation of the subject properties, allowance was made taking
into consideration the time of taking of the property subject of expropriation and the filing of complaint. x x x
56

Based on the foregoing elucidation, the Court of Appeals affirmed the RTCs finding of the value of just compensation
based on the majority reports valuation of P400.00 per square meter for the properties belonging to respondents with the
exception of respondent Moldex. Both the Court of Appeals and the RTC were convinced that the commissioners
recommendation was arrived at after a judicious consideration of all factors. Absent any showing that said valuation is
exorbitant and unjustified, the same is binding on this Court.
WHEREFORE, the instant petition for review on certiorari is DENIED and the Decision of the Court of Appeals in CA-G.R.
CV No. 73460 is AFFIRMED. Costs against petitioner.
SO ORDERED.
FORFOM DEVELOPMENT CORPORATION, petitioner,
vs.
PHILIPPINE NATIONAL RAILWAYS, respondent.
D E C I S I O N
CHICO-NAZARIO, J .:
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court which seeks to set aside the
Decision
1
of the Court of Appeals dated 24 April 1996.
Petitioner Forfom Development Corporation (Forfom) is a domestic corporation duly organized and existing under the
laws of the Philippines with principal office at Cabuyao, Laguna, while respondent Philippine National Railways (PNR) is a
government corporation engaged in proprietary functions with principal office at the PNR Railway Station, C.M. Recto
Avenue, Tutuban, Binondo, Manila.
The facts, stripped of the non-essentials, are as follows:
Forfom is the registered owner of several parcels of land in San Vicente, San Pedro, Laguna under Transfer Certificates
of Title (TCT) Nos. T-34384, T-34386 and 34387, all of the Registry of Deeds of Laguna. Said parcels of land were
originally registered in the name of Felix Limcaoco, predecessor-in-interest of Forfom, under Original Certificates of Title
(OCT) Nos. (0-326) 0-384 and (0-328) 0-386.
In a cabinet meeting held on 1 November 1972, then President Ferdinand E. Marcos approved the Presidential Commuter
Service Project, more commonly known as the Carmona Project of the President. Per Resolution No. 751 dated 2
November 1972 of the PNR Board of Directors, its General Manager was authorized to implement the project. The San
Pedro-Carmona Commuter Line Project was implemented with the installation of railroad facilities and appurtenances.
During the construction of said commuter line, several properties owned by private individuals/corporations were
traversed as right-of-way. Among the properties through which the commuter line passed was a 100,128 square-meter
portion owned by Forfom covered by TCT Nos. T-34384, T-34386 and T-34387.
On 24 August 1990, Forfom filed before the Regional Trial Court (RTC) of Binan, Laguna a complaint
2
for Recovery of
Posssession of Real Property and/or Damages. It alleged that PNR, with the aid of military men, and without its consent
and against its will, occupied 100,128 square meters of its property located in San Pedro, Laguna and installed thereon
railroad and railway facilities and appurtenances. It further alleged that PNR rented out portions of the property to
squatters along the railroad tracks. Despite repeated verbal and written demands for the return of the property or for the
payment of its price, PNR failed to comply. It prayed that PNR be ordered to vacate the property and to cause the eviction
of all shanties and squatters that PNR had taken in as lessees, and that it be restored to the peaceful occupation and
enjoyment thereof. It likewise asked that Forfom be ordered to pay (a) P1,000.00 per month per hectare from occupation
of the property until the same is vacated as rentals plus interest at 24% per annum; (b) P1,600,000.00 as unrealized
income from occupation of the property up to the present plus 12% interest per annum until fully paid; (c) P150,000.00 for
actual damages on account of the destruction of crops and improvements on the property when the occupation of the
property commenced plus 12% interest per annum until fully paid; (d) at least P100,000.00 as exemplary damages;
(e) P100,000.00 plus 15% of the amount and properties to be recovered as attorney's fees; and (f) costs of the suit.
3

In its Amended Answer,
4
PNR alleged that, per authority granted by law (Presidential Decree No. 741), it acquired parcels
of land used in the construction of the railway track to Carmona, Cavite. It, however, denied that the property acquired
from Forfom was leased to tenants. It likewise denied that the acquisition of Forfom's property was made without the
consent of Dr. Felix Limcaoco, the former owner of the property. It stressed that the acquisition of the properties used in
the project was done through negotiations with the respective owners. It asserted that no crop was damaged when it
acquired the property subject of the case. Further, it denied liability for unrealized income, exemplary damages and
attorney's fees.
PNR explained that former President Ferdinand E. Marcos approved what was known to be the Carmona Project -- a 5.1
kilometer railroad extension line from San Pedro, Laguna to San Jose, Carmona, Cavite to serve the squatters'
resettlement area in said localities. It claimed that it negotiated with the respective owners of the affected properties and
that they were paid just compensation. Dr. Felix Limcaoco, it said, was not paid because he failed to present the
corresponding titles to his properties. It claimed that the right to and just compensation for the subject property was the
declared fair market value at the time of the taking which was P0.60 per square meter. It disclosed that in a meeting with
the representatives of Dr. Limcaoco, the price agreed upon was P1.25 per square meter, the amount the adjoining owners
was paid. It prayed that the instant complaint be dismissed, and that the owner of the properties involved be compelled to
accept the amount of P1.25 per square meter as price for the properties.
In an Order dated 29 October 1990, the pre-trial conference on the case was set.
5
On 13 March 1991, for failure of the
parties to reach any agreement, pre-trial was terminated and trial of the case scheduled.
6
Thereafter, trial on the merits
ensued.
The following witnesses testified for Forfom: (1) Leon Capati; (2) Marites Dimaculangan; (3) Marilene L. de Guzman; (4)
Gavino Rosas de Claro; and (5) Jose Elazegui.
Mr. Leon Capati,
7
employee of Forfom, testified that he knew Dr. Felix Limcaoco, Sr. because he worked for him since
1951 until his death. He knew Forfom Development Corporation to be a corporation formed by the children of Dr.
Limcaoco and owner of the properties left behind by said doctor. He said he worked as overseer in Hacienda Limcaoco in
San Pedro, Laguna owned by Dr. Limcaoco. Said hacienda was converted to the Olympia Complex Subdivision now
owned by Forfom. Being a worker of Forfom, he disclosed that in 1972, the PNR forcibly took portions of the property of
Forfom. Armed men installed railroads and even used bulldozers which caused the destruction of around eleven hectares
of sugar land. Since 1972, he said PNR used the property for its benefit and even leased part of it to people living near the
railroad. At that time, he claimed that the value of sugarcane wasP200.00 per piko and that the plantation harvested sixty
(60) tons annually worth P224,000.00. In all, from 1972 to 1985, he claimed Forfom lost P2,917,200.00 in ruined sugar,
unrealized harvest, excluding unrealized harvest for nine mango trees which yielded 60 kaings per tree per harvest.
Ms. Marites Dimaculangan,
8
an officer of Forfom, corroborated the testimony of Mr. Leon Capati. She presented
documents
9
showing that Hacienda Limcaoco was previously owned by Dr. Felix Limcaoco, then the ownership was
transferred to Forfom. As proof that Hacienda Limcaoco was converted into a low-cost housing subdivision known as the
Olympia Complex Subdivision, she presented permits from the Human Settlements Regulatory Commission and from the
Municipality of San Pedro.
10
She also adduced in evidence several letters
11
allegedly showing that PNR occupied the
property owned by the Limcaocos. As a result, around eleven hectares of the sugar cane plantation were
destroyed.
12
From 1972 to 1985, she claimed that part of the property taken by PNR was leased to squatters beside the
railroad tracks. She added that Forfom incurred a loss totaling P2,917,200.00. She claimed that the current price of land
contiguous to the parcels taken by PNR was P1,000.00 per square meter.
Ms. Marilene L. De Guzman,
13
Executive Vice-President of Forfom and daughter of the Late Dr. Felix Limcaoco,
corroborated the testimonies of Mr. Capati and Ms. Dimaculangan. She disclosed that his father died on 25 March 1973.
She learned from her father and from Mr. Leon Capati that when the armed men took a portion of their property, the
armed men did not show any court order or authority from any agency of the government. The armed men used
bulldozers destroying 11 hectares of sugarcane and some mango trees. She said those taken over were used as railroad
tracks and a portion beside the tracks were being leased to squatters. She revealed that the present fair market value of
land at Olympia Complex is P1,400.00 per square meter.
14
If the land is not developed, same can be sold for P800.00 per
square meter. She said from the time their property was taken over by PNR, her family has been writing to PNR regarding
compensation for their land.
15

Ms. De Guzman said the property was still in the name of Dr. Felix Limcaoco, Sr. and Mrs. Olympia Limcaoco when the
PNR took over a portion of their properties. She said she was not informed by Mr. Capati that the PNR took the said
property over pursuant to a Presidential Mandate in order to provide transportation for relocated squatters. She explained
that her father and Mr. Capati were not advised to harvest their crops and were surprised by the taking over of the land.
Mr. Gavino Rosas de Claro,
16
Land Register Examiner of the Register of Deeds of Calamba, Laguna, testified as
representative of the Register of Deeds. He brought in Court the originals of TCT Nos. T-34384
17
and T-34386,
18
both in
the name of Forfom Development Corporation and OCT Nos. (O-326) O-384
19
and (O-328) O-386, both in the name of
Dr. Felix Limcaoco, Sr.
20
Thereafter, photocopies thereof were compared with the originals which were found to be faithful
reproductions of the same.
Jose Elazegui,
21
Supervisor, Southern Tagalog Facoma, Inc. was presented to show the production of sugar and
molasses on the property of Forfom. He presented duplicate original copies of Tuos ng inaning Tubo for the years 1984-
1985, 1985-1986, 1986-1987 and 1987-1988.
22
The documents showed the production (average yield per area per picul)
in other properties owned by Forfom other than the properties subject matter of this case.
For the defendant, Mrs. Edna Ramos, Department Manager of the Real Estate Department of the PNR, took the
stand.
23
She testified that she was familiar with the acquisition by the PNR of the right of way for the San Pedro-Carmona
Commuter Line. It was acquired and established by Presidential Mandate and pursuant to the authority of the PNR to
expropriate under its charter (Presidential Decree No. 741).
24
She explained that President Ferdinand E. Marcos
authorized the PNR to acquire said right of way in a Cabinet Meeting on 1 November 1972 as evidenced by an excerpt of
the minutes of the meeting of the PNR Board of Directors on Resolution No. 751.
25
The right of way was acquired to
provide a cheap, efficient and safe means of transportation to the squatters who were relocated in Cavite. The commuter
line, she said, was primarily for service rather than profit. As shown by the letter
26
dated 30 April 1974 of Nicanor T.
Jimenez, former General Manager of the PNR, to Mrs. Olympia Hemedes Vda. de Limcaoco, the acquisition of the right of
way was with the knowledge and consent of Dr. Felix Limcaoco, Sr.
Mrs. Ramos disclosed that the total area acquired by the PNR for the San Pedro-Carmona Commuter Line was 15.7446
hectares or sixteen (16) lots in all owned by seven (7) private landowners and three (3) corporations. Among the private
landowners were Isabel Oliver, Leoncia Blanco, Catalina Sanchez, Tomas Oliver, Alejandro Oliver and Antonio Sibulo.
Per record of PNR, they were paid P1.25 per square meter for their lands. They executed Absolute Deeds of Sale in favor
of the PNR, as a result of which, titles to the lands were transferred to PNR.
27
The remaining 9 lots belonging to the three
private corporations - Forfom Development Corporation, Alviar Development Manufacturing & Trading Supply Corp. and
Life Realty Development Corporation - were not paid for because these corporations were not able to present their
respective titles, which had been used as loan collaterals in the Philippine National Bank and the Government Service
Insurance System.
28
The unit price per square meter, which the negotiating panel of the PNR and the representatives of
the three corporations was considering then, wasP1.25. In a letter dated 3 October 1975, Mr. Felix Limcaoco, Jr. of
Forfom was asking for P12.00 per square meter for their land and P150,000.00 for damaged sugar crops and mango
trees.
29
She likewise said she had the minutes of the conference between Mr. Limcaoco and the PNR Chief Construction
Engineer held at the PNR General Manager's Office on 24 July 1979.
30

Mrs. Ramos clarified that as a matter of policy, PNR employees and other persons were not allowed to settle on the
PNR's right of way. Squatting along the right of way had never been encouraged. To prevent its proliferation, special
contracts were entered into with selected parties under strict conditions to vacate the property leased upon notice. She
explained that the leasing of PNR's right of way was an incidental power and was in response to the government's social
housing project.
In its decision dated 29 October 1992, the trial court ruled generally in favor of plaintiff, the dispositive portion reading:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff and against defendant
ordering the latter to pay the former the following:
1. Just compensation of the subject real properties consisting of 100,128 square meters and covered by
TCT Nos. T-34387, T-34384 and T-34386 at P10.00 per square meter, with legal interest from the time of
actual taking of plaintiff's real properties until payment is made by the defendant;
2. The amount of P4,480,000.00 as unearned income of plaintiff from 1972 up to the current year, and
thereafter, the amount of P224,000 yearly, with legal interest until payment is made;
3. Actual damages in the amount of P150,000 corresponding to sugarcane crops and mango trees
destroyed or damaged as a result of the unlawful taking of plaintiff's real properties, with legal interest
until payment is made;
4. The amount of P100,000 as and for attorney's fees;
5. The amount of P150,000 for litigation expenses plus the costs of this suit.
Plaintiff's claim for recovery of possession and the other prayers in the complaint are hereby dismissed for want of
merit.
31

The trial court found that the properties of Forfom were taken by PNR without due process of law and without just
compensation. Although the power of eminent domain was not exercised in accordance with law, and PNR occupied
petitioner's properties without previous condemnation proceedings and payment of just compensation, the RTC ruled that,
by its acquiescence, Forfom was estopped from recovering the properties subject of this case. As to its right to
compensation and damages, it said that the same could not be denied. The trial court declared that P10.00 per square
meter was the fair and equitable market value of the real properties at the time of the taking thereof.
Not contented with the decision, both parties appealed to the Court of Appeals by filing their respective Notices of
Appeal.
32
PNR questioned the trial court's ruling fixing the just compensation at P10.00 per square meter and not the
declared value of P0.60 per square meter or the fair market value of P1.25 paid to an adjacent owner. It likewise
questioned the award of actual damages and unearned income to Forfom.
On 24 April 1996, the appellate court disposed of the case as follows:
WHEEFORE, the decision appealed from is hereby AFFIRMED insofar as (1) it denies plaintiff's claim for
recovery of possession and (2) it awards just compensation at the rate of P10.00 per square meter which
defendant must pay to plaintiff, but with legal rate of interest thereon hereby specifically fixed at six (6) percent per
annum starting from January of 1973 until full payment is made. However, the appealed decision is MODIFIED in
the sense that plaintiff's claim for damages is DENIED for lack of merit.
No pronouncement as to costs.
33

Except for the deletion of the award of damages, attorney's fees and litigation expenses, the appellate court agreed the
with trial court. We quote:
There is no dispute that defendant neither commenced an expropriation proceedings nor paid just compensation
prior to its occupation and construction of railroad lines on the subject property. Nevertheless, plaintiff's prayer to
recover the property cannot be granted. Immediately after the occupation, or within a reasonable time thereafter,
there is no showing that the same was opposed or questioned by plaintiff or its representatives on the ground that
defendant never filed an expropriation proceedings and that no just compensation was ever paid. Neither is there
a showing that plaintiff sought to recover the property because the taking was done forcibly with the aid of armed
men. Instead, and this is borne out by certain communications between the parties through their respective
officers or representatives, what plaintiff actually did was to negotiate with defendant for the purpose of fixing the
amount which the latter should pay as just compensation and, if there be any, damages. x x x.
x x x x
Clearly, a continuing negotiation between the parties took place for the purpose only of fixing the amount of just
compensation and not because plaintiff wanted to recover the subject property. Thus, the failure of defendant to
first file an expropriation proceedings and pay just compensation is now beside the point. And even if the
contention of plaintiff that defendant used force is true, the former can no longer complain at this time. What
controls now is the fact that by its own act of negotiating with defendant for the payment of just compensation,
plaintiff had in effect made representations that it acquiesced to the taking of its property by defendant. We
therefore agree with the lower court that plaintiff, by its acquiescence, waived its right, and is thus estopped, from
recovering the subject property or from challenging any supposed irregularity in its acquisition.
x x x x
Plaintiff's right to recover just compensation, however, remains. On this matter, we agree with the P10.00 per
square meter valuation fixed by the trial court x x x.
x x x x
With the long delay in the payment of just compensation however, defendant should pay interest thereon at the
legal rate of six (6) percent per annum from the time of occupation until payment is made. x x x.
34

Still unsatisfied with the decision, Forfom filed the instant petition for review on certiorari raising the following issues:
A. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER CANNOT RECOVER
POSSESSION OF ITS LAND DESPITE THE ADMISSION THAT IT WAS FORCIBLY TAKEN (DURING THE
MARTIAL LAW ERA) WITHOUT ANY EXPROPRIATION PROCEEDING OR PAYMENT OF COMPENSATION
SIMPLY BECAUSE PETITIONER DID NOT OPPOSE THE ARMED AND FORCIBLE TAKING THEREOF:
B. THE HONORABLE COURT OF APPEALS EMPLOYED DOUBLE STANDARD OF JUSTICE IN ADMITTING
HEARSAY EVIDENCE OF PNR YET REJECTING THAT OF PETITIONER WHICH IS PROPERLY IDENTIFIED
WITH ABUNDANT CROSS EXAMINATION CONDUCTED ON THE BASIS OF PETITIONER'S REJECTED
EVIDENCE:
C. THE HONORABLE COURT OF APPEALS ERRED GRIEVOUSLY IN HOLDING THAT IN THIS ACTION "THE
FAILURE OF DEFENDANT TO FIRST FILE AN EXPROPRIATION PROCEEDINGS AND PAY JUST
COMPENSATION (FOR THE PROPERTY OF PETITIONER FORCIBLY TAKEN BY PRIVATE RESPONDENT)
IS (NOW) BESIDE THE POINT."
D. THE HONORABLE COURT OF APPEALS ERRED IN AGREEING WITH THE RTC IN FIXING THE
COMPENSATION FOR THE LAND FORCIBLY TAKEN BY PNR AT A RIDICULOUS, OUTRAGEOUS, AND
ABSURD PRICE OF P10.00 PER SQUARE METER DESPITE THE EVIDENCE SHOWING THAT THE PRICE
OF LAND IN THE ADJACENT AND SURROUNDING AREAS IS MORE THAN P1,500.00 PER SQUARE
METER:
E. THE HONORABLE COURT OF APPEALS ERRED IN IGNORING THE EVIDENCE ESTABLISHING THE
RIGHT OF THE PETITIONER TO BE AWARDED ACTUAL OR COMPENSATORY DAMAGES, ATTORNEY'S
FEES, AND UNREALIZED INCOME:
F. THE HONORABLE COURT OF APPEALS ERRED IN AND ABUSED ITS DISCRETION IN ADOPTING
DOUBLE STANDARD IN ITS EVALUATION OF THE EVIDENCE AND IN ADMITTING PNR's PATENTLY
HEARSAY EVIDENCE WHILE REJECTING PETITIONER'S RELEVANT - MATERIAL AND ADMISSIBLE
EVIDENCE:
G. THE HONORABLE COURT OF APPEALS DEVIATED FROM ESTABLISHED JURISPRUDENCE IN
UNJUSTIFIABLY IGNORING AND SETTING ASIDE THE FINDINGS OF FACTS OF THE TRIAL COURT THAT
ARE IN FACT SUPPORTED BY ABUNDANT EVIDENCE:
H. THE HONORABLE COURT OF APPEALS APPARENTLY SUPPRESSED THE EVIDENCE THAT PRIVATE
RESPONDENT PNR APART FROM FORCIBLY TAKING THE LAND OF PETITIONER WITH THE
EMPLOYMENT OF ARMED MEN, RENTED OUT PORTIONS OF SAID LAND TO ITS TENANTS WHO PAID
HEFTY RENTALS FOR THE USE OF THE SAME AS RESIDENTIAL LOTS (AND NOT FOR PUBLIC
PURPOSES).
35

On the other hand, PNR accepted the decision of the Court of Appeals and no longer appealed.
The primary question to be resolved is: Can petitioner Forfom recover possession of its property because respondent
PNR failed to file any expropriation case and to pay just compensation?
The power of eminent domain is an inherent and indispensable power of the State. Being inherent, the power need not be
specifically conferred on the government by the Constitution.
36
Section 9, Article III states that private property shall not be
taken for public use without just compensation. The constitutional restraints are public use and just compensation.
37

The fundamental power of eminent domain is exercised by the Legislature. It may be delegated by Congress to the local
governments, other public entities and public utilities.
38
In the case at bar, PNR, under its charter,
39
has the power of
expropriation.
A number of circumstances must be present in the taking of property for purposes of eminent domain: (1) the expropriator
must enter a private property; (2) the entrance into private property must be for more than a momentary period; (3) the
entry into the property should be under warrant or color of legal authority; (4) the property must be devoted to a public
purpose or otherwise informally, appropriately or injuriously affected; and (5) the utilization of the property for public use
must be in such a way as to oust the owner and deprive him of all beneficial enjoyment of the property.
40

In the case at bar, the expropriator (PNR) entered the property of Forfom, a private land. The entrance into Forfom's
property was permanent, not for a fleeting or brief period. PNR has been in control, possession and enjoyment of the
subject land since December 1972 or January 1973. PNR's entry into the property of Forfom was with the approval of then
President Marcos and with the authorization of the PNR's Board of Directors. The property of Forfom measuring around
eleven hectares was devoted to public use - railroad tracks, facilities and appurtenances for use of the Carmona
Commuter Service. With the entrance of PNR into the property, Forfom was deprived of material and beneficial use and
enjoyment of the property. It is clear from the foregoing that there was a taking of property within the constitutional sense.
Forfom argues that the property taken from it should be returned because there was neither expropriation case filed by
PNR nor just compensation paid for the same.
It can be gathered from the records that Forfom accepted the fact of the taking of its land when it negotiated with PNR for
just compensation, knowing fully well that there was no expropriation case filed at all. Forfom's inaction for almost
eighteen (18) years to question the absence of expropriation proceedings and its discussions with PNR as to how much
petitioner shall be paid for its land preclude it from questioning the PNR's power to expropriate or the public purpose for
which the power was exercised. In other words, it has waived its right and is estopped from assailing the takeover of its
land on the ground that there was no case for expropriation that was commenced by PNR.
In Manila Railroad Co. v. Paredes,
41
the first case in this jurisdiction in which there was an attempt to compel a public
service corporation, endowed with the power of eminent domain, to vacate the property it had occupied without first
acquiring title thereto by amicable purchase or expropriation proceedings, we said:
x x x whether the railroad company has the capacity to acquire the land in dispute by virtue of its delegated power
of eminent domain, and, if so, whether the company occupied the land with the express or implied consent or
acquiescence of the owner. If these questions of fact be decided in the affirmative, it is uniformly held that an
action of ejectment or trespass or injunction will not lie against the railroad company, but only an action for
damages, that is, recovery of the value of the land taken, and the consequential damages, if any. The primary
reason for thus denying to the owner the remedies usually afforded to him against usurpers is the irremedial injury
which would result to the railroad company and to the public in general. It will readily be seen that the interruption
of the transportation service at any point on the right of way impedes the entire service of the company and
causes loss and inconvenience to all passengers and shippers using the line. Under these circumstances, public
policy, if not public necessity, demands that the owner of the land be denied the ordinarily remedies of ejectment
and injunction. The fact that the railroad company has the capacity to eventually acquire the land by expropriation
proceedings undoubtedly assists in coming to the conclusion that the property owner has no right to the remedies
of ejectment or injunction. There is also something akin to equitable estoppel in the conduct of one who stands
idly by and watches the construction of the railroad without protest. x x x. But the real strength of the rule lies in
the fact that it is against public policy to permit a property owner, under such circumstances, to interfere with the
service rendered to the public by the railroad company. x x x. (I)f a landowner, knowing that a railroad company
has entered upon his land and is engaged in constructing its road without having complied with a statute requiring
either payment by agreement or proceedings to condemn, remains inactive and permits it to go on and expend
large sums in the work, he is estopped from maintaining either trespass or ejectment for the entry, and will be
regarded as having acquiesced therein, and will be restricted to a suit for damages.
Further, in De Ynchausti v. Manila Electric Railroad & Light Co.,
42
we ruled:
The owner of land, who stands by, without objection, and sees a public railroad constructed over it, can not, after
the road is completed, or large expenditures have been made thereon upon the faith of his apparent
acquiescence, reclaim the land, or enjoin its use by the railroad company. In such a case there can only remain to
the owner a right of compensation.
x x x x
One who permits a railroad company to occupy and use his land and construct its roads thereon without
remonstrance or complaint, cannot afterwards reclaim it free from the servitude he has permitted to be imposed
upon it. His acquiescence in the company's taking possession and constructing its works under circumstances
which made imperative his resistance, if he ever intended to set up illegality, will be considered a waiver. But
while this presumed waiver is a bar to his action to dispossess the company, he is not deprived of his action for
damages for the value of the land, of for injuries done him by the construction or operation of the road.
x x x x
We conclude that x x x the complaint in this action praying for possession and for damages for the alleged
unlawful detention of the land in question, should be dismissed x x x but that such dismissal x x x should be
without prejudice to the right of the plaintiff to institute the appropriate proceedings to recover the value of the
lands actually taken, or to compel the railroad corporation to take the necessary steps to secure the
condemnation of the land and to pay the amount of the compensation and damages assessed in the
condemnation proceedings.
In Ansaldo v. Tantuico, Jr.,
43
a case involving the takeover by the Government of two private lots to be used for the
widening of a road without the benefit of an action for expropriation or agreement with its owners, we held that the owners
therein, having been silent for more than two decades, were deemed to have consented to such taking -- although they
knew that there had been no expropriation case commenced -- and therefore had no reason to impugn the existence of
the power to expropriate or the public purpose for which that power had been exercised. In said case, we directed the
expropriator to forthwith institute the appropriate expropriation action over the land, so that just compensation due the
owners may be determined in accordance with the Rules of Court.
From the afore-cited cases, it is clear that recovery of possession of the property by the landowner can no longer be
allowed on the grounds of estoppel and, more importantly, of public policy which imposes upon the public utility the
obligation to continue its services to the public. The non-filing of the case for expropriation will not necessarily lead to the
return of the property to the landowner. What is left to the landowner is the right of compensation.
Forfom argues that the recovery of its property is justified because PNR failed to pay just compensation from the time its
property was taken. We do not agree. It is settled that non-payment of just compensation does not entitle the private
landowners to recover possession of their expropriated lot.
44

Forfom contends that since there is enormous proof that portions of the property taken by PNR were being leased to third
parties there was enough justification for the Court of Appeals to order the return to petitioner of the leased portions as
well as the rents received therefrom.
We find such contention to be untenable. As ruled above, Forfom's inaction on and acquiescence to the taking of its land
without any expropriation case being filed, and its continued negotiation with PNR on just compensation for the land,
prevent him from raising any issues regarding the power and right of the PNR to expropriate and the public purpose for
which the right was exercised. The only issue that remains is just compensation. Having no right to further question PNR's
act of taking over and the corresponding public purpose of the condemnation, Forfom cannot now object to PNR's lease
of portions of the land to third parties. The leasing out of portions of the property is already a matter between PNR and
third persons in which Forfom can no longer participate. The same no longer has any bearing on the issue of just
compensation.
Forfom further avers that the leasing out of portions of the property to third persons is beyond the scope of public use and
thus should be returned to it. We do not agree. The public-use requisite for the valid exercise of the power of eminent
domain is a flexible and evolving concept influenced by changing conditions. At present, it may not be amiss to state that
whatever is beneficially employed for the general welfare satisfies the requirement of public use.
45
The term "public use"
has now been held to be synonymous with "public interest," "public benefit," "public welfare," and "public
convenience."
46
It includes the broader notion of indirect public benefit or advantage.
47
Whatever may be beneficially
employed for the general welfare satisfies the requirement of public use.
48

In the instant case, Mrs. Ramos of the PNR explains that the leasing of PNR's right of way is an incidental power and is in
response to the government's social housing project. She said that to prevent the proliferation of squatting along the right
of way, special contracts were entered into with selected parties under strict conditions to vacate the property leased upon
notice. To the court, such purpose is indeed public, for it addresses the shortage in housing, which is a matter of concern
for the state, as it directly affects public health, safety, environment and the general welfare.
Forfom claims it was denied due process when its property was forcibly taken without due compensation for it. Forfom is
not being denied due process. It has been given its day in court. The fact that its cause is being heard by this Court is
evidence that it is not being denied due process.
We now go to the issue of just compensation.
Under Section 5 of the 1997 Rules of Civil Procedure, the court shall appoint not more than three competent and
disinterested persons as commissioners to ascertain and report to the court the just compensation for the property.
Though the ascertainment of just compensation is a judicial prerogative,
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the appointment of commissioners to ascertain
just compensation for the property sought to be taken is a mandatory requirement in expropriation cases. While it is true
that the findings of commissioners may be disregarded and the trial court may substitute its own estimate of the value, it
may only do so 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. Thus, "trial with the aid of the commissioners is a substantial right that may not be
done away with capriciously or for no reason at all."
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In the case before us, the trial court determined just compensation, but not in an expropriation case. Moreover, there was
no appointment of commissioners as mandated by the rules. The appointment of commissioners is one of the steps
involved in expropriation proceedings. What the judge did in this case was contrary to what the rules prescribe. The judge
should not have made a determination of just compensation without first having appointed the required commissioners
who would initially ascertain and report the just compensation for the property involved. This being the case, we find the
valuation made by the trial court to be ineffectual, not having been made in accordance with the procedure provided for by
the rules.
The next issue to be resolved is the time when just compensation should be fixed. Is it at the time of the taking or, as
Forfom maintains, at the time when the price is actually paid?
Where actual taking was made without the benefit of expropriation proceedings, and the owner sought recovery of the
possession of the property prior to the filing of expropriation proceedings, the Court has invariably ruled that it is the value
of the property at the time of taking that is controlling for purposes of compensation.
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In the case at bar, the just
compensation should be reckoned from the time of taking which is January 1973. The determination thereof shall be
made in the expropriation case to be filed without delay by the PNR after the appointment of commissioners as required
by the rules.
Admittedly, the PNR's occupation of Forfom's property for almost eighteen (18) years entitles the latter to payment of
interest at the legal rate of six (6%) percent on the value of the land at the time of taking until full payment is made by the
PNR.
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For almost 18 years, the PNR has enjoyed possession of the land in question without the benefit of expropriation
proceedings. It is apparent from its actuations that it has no intention of filing any expropriation case in order to formally
place the subject land in its name. All these years, it has given Forfom the runaround, failing to pay the just compensation
it rightly deserves. PNR's uncaring and indifferent posture must be corrected with the awarding of exemplary damages,
attorney's fees and expenses of litigation. However, since Forfom no longer appealed the deletion by both lower courts of
said prayer for exemplary damages, the same cannot be granted. As to attorney's fees and expenses of litigation, we find
the award thereof to be just and equitable. The amounts of P100,000.00 as attorney's fees and P50,000.00 as litigation
expenses are reasonable under the premises.
As explained above, the prayer for the return of the leased portions, together with the rental received therefrom, is denied.
Unearned income for years after the takeover of the land is likewise denied. Having turned over the property to PNR,
Forfom has no more right to receive any income, if there be any, derived from the use of the property which is already
under the control and possession of PNR.
As to actual damages corresponding to the sugarcane and mango trees that were allegedly destroyed when PNR entered
and took possession of the subject land, we find that the same, being a question of fact, is better left to be determined by
the expropriation court where the PNR will be filing the expropriation case. Evidence for such claim may be introduced
before the condemnation proceedings.
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WHEREFORE, the instant petition is PARTIALLY DENIED insofar as it denies Forfom Development Corporation's prayer
for recovery of possession (in whole or in part) of the subject land, unearned income, and rentals. The petition
is PARTIALLY GRANTED in that attorney's fees and litigation expenses in the amounts of P100,000.00 andP50,000.00,
respectively, are awarded. The Philippine National Railways is DIRECTED to forthwith institute the appropriate
expropriation action over the land in question, so that just compensation due to its owner may be determined in
accordance with the Rules of Court, with interest at the legal rate of six (6%) percent per annum from the time of taking
until full payment is made. As to the claim for the alleged damaged crops, evidence of the same, if any, may be presented
before the expropriation court. No costs.
SO ORDERED.