Dajao v. Court of Appeals
REITERATIONFacts
The Antecedents: The municipality of Tudela, Misamis Occidental expropriated 35,400 square meters of land belonging to the Dajao spouses, which was formerly forestal land located near the national road. In 1969, barrio officials constructed a school on this land. The landowner prevented occupation from late December 1975 to early January 1976, prompting the municipality to file an eminent domain proceeding on January 24, 1977. Procedural History: The Court of First Instance (CFI) allowed the municipality to take possession upon depositing P2,120, the assessed value, for school grounds, pilot rice culture, and pilot fishpond culture. After hearing, the CFI ordered the municipality to pay P3,178 as just compensation, allowed the spouses to withdraw the deposit, and required them to execute a deed of conveyance. The Court of Appeals affirmed the CFI's decision. The Petition: The Dajao spouses appealed to the Supreme Court, contending that the just compensation should be P177,000 (P5 per square meter) instead of P5,298, the market value indicated in Tax Declaration No. 45366.
Issue(s)
Whether the just compensation for the expropriated land should be P177,000 or P5,298. Whether the trial court erred in requiring the Dajao spouses to execute a deed of conveyance.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals. The just compensation was fixed at P5,298, and the Dajao spouses were required to execute the necessary deed of conveyance.
Ratio Decidendi
On the issue of just compensation: The Court held that the contention of the Dajao spouses is untenable. The trial court did not err in holding that the just compensation should be P5,298, which was the market value of the land in 1977, the year the expropriation case was filed, as shown in Tax Declaration No. 45366. Although the market value was later increased to P11,626 effective in 1978, this increase was based on the assumption that the land was residential, which the lower court found to be untrue as the area was devoid of residential houses. The trial court noted that Dajao acted in bad faith in securing the increased assessment because the land was agricultural. The Court applied Section 92 of Presidential Decree No. 464, as amended by Presidential Decree No. 794, which states that in determining just compensation, the same shall not exceed the market value declared by the owner or assessor, whichever is lower. This provision is designed to prevent the practice of underdeclaring properties for taxation while inflating their value when acquired by the government. The Court also held that the respondent municipality is liable to pay interest at the legal rate from the time it took possession of the land until the sum of P3,178 is paid, and the interest on the deposit of P2,120 should be paid to the Dajao spouses. On the issue of the deed of conveyance: The Court found no error in the trial court's requirement for the Dajao spouses to execute a proper deed of conveyance, considering that the land involved was unregistered land. The Court made a reference to Presidential Decree No. 1529 for registered land.
Main Doctrine
In expropriation proceedings, just compensation shall not exceed the market value declared by the owner or assessor, whichever is lower, as provided by Presidential Decree No. 464, as amended by Presidential Decree No. 794.