Municipality of Daet v. Li Seng Giap & Co.
REITERATIONFacts
The Antecedents: The Municipality of Daet filed an expropriation complaint on August 9, 1962, to acquire a 2,717 sq. meter parcel of land for a public park. The private respondent, Li Seng Giap & Co., Inc., filed a Motion to Dismiss, citing lack of authorization, genuine necessity, discriminatory proceedings, and insufficient funds. The trial court initially dismissed the case, finding no genuine need and insufficient funds. The Court of Appeals reversed this, declaring the Municipality's right to take the property upon payment of just compensation and remanding the case for determination of compensation and provisional value. Procedural History: The trial court fixed a provisional value and appointed commissioners. The commissioners, using the sale approach and considering exhibits from both parties, recommended P60.00 per square meter for the land and P15,000.00 for improvements as of 1962. The trial court, however, disregarded the commissioners' report and, based on an expert appraisal in 1969, fixed the land value at P117.00 per square meter and improvements at P36,500.00. Both parties appealed to the Court of Appeals. The Court of Appeals modified the trial court's decision, fixing the property value at P200.00 per square meter and improvements at P36,500.00, with legal interest from the date of actual taking. The Municipality appealed to the Supreme Court. The Petition: The Municipality of Daet filed a petition for review on certiorari, assailing the Court of Appeals' decision on several grounds, including errors in determining the valuation date, grave abuse of discretion in modifying its own prior decision, giving undue credence to the private respondent's appraiser over the commissioners, and the applicability of Presidential Decree No. 42.
Issue(s)
Whether the Court of Appeals erred in determining the value of the property at the time of the rendition of the trial court's judgment and not at the date of the filing of the complaint. Whether the Court of Appeals gravely abused its power in modifying its own prior decision, violating the principle of res judicata. Whether the Court of Appeals erred in giving credence to the private respondent's appraiser and disregarding the commissioners' report. Whether Presidential Decree No. 42 estops the private respondent from claiming a valuation higher than the assessed value.
Ruling
The Supreme Court affirmed the judgment of the Court of Appeals in toto. The Court fixed the fair market value of the property at P200.00 per square meter, totaling P543,400.00, and the value of the improvement at P36,500.00, both amounts to bear legal interest from the date of actual taking of possession until fully paid. The Court clarified that the demolition of the building by the Municipal Mayor on February 14, 1978, constituted the actual taking of possession, and interest shall accrue from that date.
Ratio Decidendi
On the valuation date: The Court reiterated the principle that just compensation should be fixed as of the date of the actual taking of the property. While Section 4, Rule 67 of the Rules of Court generally provides for valuation as of the date of filing the complaint, exceptions exist where the taking precedes the filing or where the plaintiff fails to take possession. In this case, the Municipality failed to make the required deposit for possession for seventeen years. The Court of Appeals' decision fixing the value as of the time of the rendition of the trial court's judgment (December 2, 1969) and subsequently, the Supreme Court's determination of the actual taking on February 14, 1978, aligns with jurisprudence that prioritizes the actual loss sustained by the owner. The Court cited Provincial Government of Rizal vs. Caro de Araullo and Republic vs. Lara to support the rule that when taking precedes filing, valuation is as of the taking date, ensuring compensation for what the owner actually loses. On res judicata and law of the case: The Court held that the principle of res judicata did not apply because the prior decision of the Court of Appeals in CA-G.R. No. 32259-R only determined the Municipality's right to exercise eminent domain. The issue of just compensation was expressly reserved for the trial court. Therefore, there was no identity of the cause of action between the two proceedings. Similarly, the doctrine of the law of the case, which applies to subsequent proceedings in the same case, was not violated as the prior decision did not definitively rule on the compensation amount. The Supreme Court, as the court of last resort, has the final say on legal questions, and its decisions bind all inferior courts. On the commissioners' report and expert testimony: The Court affirmed the Court of Appeals' decision to give credence to the expert testimony of Engineer Aurelio B. Aquino, a licensed real estate broker and appraiser, over the commissioners' report. The Court emphasized that commissioners' reports are merely advisory and not binding on the court. The trial court has the right to disregard such reports if not founded on legal evidence or if they apply illegal principles. Engineer Aquino's qualifications and the fact that his appraisal was based on universally applied criteria for land valuation justified the court's reliance on his testimony, even if he did not have an office or prior transactions in Daet. On Presidential Decree No. 42: The Court found Presidential Decree No. 42 inapplicable to the case. This decree, issued on November 9, 1972, allows immediate possession upon depositing the assessed value for taxation purposes. However, the Court of Appeals had already fixed the property's value on October 18, 1972, prior to the decree's issuance. Furthermore, the Court clarified that PD 42, and even PD 76, establish only a provisional value and do not limit just compensation to the assessed value, which is only a percentage of the fair market value. The Municipality's subsequent deposits under PD 42 were deemed insufficient and not in compliance with the court's orders.
Main Doctrine
In eminent domain proceedings, the just compensation should be fixed as of the date of the actual taking of the property, especially when the taking precedes the filing of the expropriation complaint or when the plaintiff fails to make the required deposit for immediate possession. The commissioners' report is merely advisory, and the court may disregard it if not based on legal evidence or if it applies illegal principles.