Commissioner of Public Highways v. Burgos
REITERATIONFacts
The Antecedents: Victoria Amigable was the owner of a parcel of land in Cebu City with an area of 6,167 square meters. In 1924, the Government took this land for road-right-of-way purposes, which became Mango Avenue and Gorordo Avenue. Procedural History: On February 6, 1959, Amigable filed a complaint for recovery of ownership and possession, and for damages, alleging illegal occupation. The Republic argued that the land was donated or sold, and that the claim was barred by estoppel and statute of limitations, also invoking the non-suability of the government. The Court of First Instance dismissed the complaint. The Supreme Court reversed and remanded the case for determination of just compensation, directing that the basis be the price or value at the time of taking. The Petition: In the subsequent hearing, the Government presented deeds showing the land's value in 1924 was P2.37 per square meter. Amigable presented newspaper clippings showing the value of the peso to the dollar in 1972. The respondent court awarded Amigable P49,459.34 as compensation, plus P145,410.44 in interest, and attorney's fees, totaling P214,356.75. The Commissioner of Public Highways filed a petition for review, questioning the application of Article 1250 of the Civil Code by the respondent court.
Issue(s)
Whether Article 1250 of the New Civil Code is applicable in determining the amount of compensation for the property taken. Whether the respondent court correctly determined the just compensation, interest, and attorney's fees.
Ruling
The judgment of the respondent court is reversed. The just compensation is fixed at P14,615.79, representing the value of the land at P2.37 per square meter at the time of taking in 1924. Interest at 6% per annum from 1924 until fully paid is awarded, along with attorney's fees of P5,000.00.
Ratio Decidendi
On the applicability of Article 1250 of the New Civil Code: The Court held that Article 1250 of the New Civil Code, which provides for payment based on the value at the time of the establishment of the obligation in case of extraordinary inflation or deflation, applies only to obligations arising from contracts. The obligation of the Government to pay just compensation in expropriation cases arises from law, not from contract. Therefore, Article 1250 is not applicable. The Court reiterated that in expropriation cases, the basis for just compensation is the value of the property at the time of the taking. The obligation to pay arises from law, and there can be no 'agreement to the contrary' as contemplated by Article 1250, as the law itself dictates the basis of compensation. The Court cited Velasco vs. Manila Electric Co., et al. and Republic vs. Philippine National Bank to support this principle. The principle that the value of the currency at the time of the establishment of the obligation shall be the basis of payment is fundamental in expropriation, and this value is determined at the time of taking. On the determination of just compensation, interest, and attorney's fees: The Court found that the respondent court erred in applying Article 1250 and considering the value of the peso in relation to the dollar in 1972. The Supreme Court had previously directed that the basis for just compensation should be the price or value at the time of the taking. The Government proved the value in 1924 to be P2.37 per square meter. Based on this, the total value of the 6,167 square meter property was P14,615.79. The Court also noted the unusually long delay of almost 25 years by the private respondent in bringing the action, which militated against payment of a larger amount, emphasizing the principle that one should take care of their own concerns and that inaction or laches can penalize the assertion of rights. The Court concluded that the correct compensation should be P14,615.79. The Court affirmed its previous ruling in G.R. No. L-26400 that Victoria Amigable is entitled to legal interest on the price of the land from the time of the taking. However, it clarified that this interest should be computed on the correct principal amount of P14,615.79, and it shall accrue from 1924, the time of taking, until fully paid. The Court distinguished this from the case of Raymunda S. Digsan vs. Auditor General, et al., where interest accrued from the filing of the claim, stating that in this case, the prior Supreme Court decision established the commencement of interest from the taking. The Court found the attorney's fees awarded by the respondent court to be exorbitant, being based on the inflated value of the land. Considering that the private respondent herself asked for P5,000.00 in her complaint, the Court deemed this amount to be reasonable and awarded P5,000.00 as attorney's fees.
Main Doctrine
In expropriation cases, just compensation is determined by the value of the property at the time of the taking, and Article 1250 of the Civil Code on extraordinary inflation or deflation does not apply as the obligation arises from law, not contract, unless there is an agreement to the contrary.