Philippine National Oil Company v. Maglasang
REITERATIONFacts
1. The Antecedents: The Philippine National Oil Company (PNOC) filed two separate eminent domain complaints against Oscar S. Maglasang (Civil Case No. 3267-O) and Leonilo A. Maglasang (Civil Case No. 3273-O) for the expropriation of two parcels of land (Lot No. 11900 and Lot No. 11907, respectively) located in Kananga, Leyte, to be used for the construction and operation of the 125MW Upper Mahiao Geothermal Power Plant Project. Writs of possession were issued after PNOC posted the required provisional deposit. Subsequently, commissioners were appointed to determine just compensation. 2. Procedural History: The Regional Trial Court (RTC) appointed commissioners who submitted varying valuations. The RTC, considering the Commissioners' Report and documentary evidence, fixed the just compensation at P700.00 per square meter, applying an "inflation factor" and "adjustment factor" based on the time elapsed since the filing of the complaints in 1994, citing Cosculluela v. Court of Appeals. Both parties appealed to the Court of Appeals (CA). The CA modified the RTC decision, reducing the just compensation to P300.00 per square meter and disallowing the "inflation factor" and "adjustment factor," stating that only legal interest for delay in payment is permissible. The CA ruled that just compensation should be based on the value at the time of taking in 1994. PNOC's motion for reconsideration was denied. 3. The Petition: PNOC filed a petition for review on certiorari before the Supreme Court, assailing the CA's decision, arguing that the P300.00 per square meter valuation was not supported by evidence and that the subject properties were agricultural, not industrial, at the time of taking.
Issue(s)
Whether the Court of Appeals erred in reducing the just compensation fixed by the trial court. Whether the "inflation factor" and "adjustment factor" applied by the trial court are proper considerations in determining just compensation. Whether the time of taking for the purpose of determining just compensation should be reckoned from the date of the lease agreement (1992) or the filing of the expropriation complaints (1994). Whether the subject properties were agricultural or industrial at the time of taking.
Ruling
The petition is DENIED. The assailed decision and resolution of the Court of Appeals are AFFIRMED.
Ratio Decidendi
On Factual Findings and Just Compensation: The Court reiterated that in petitions for review on certiorari under Rule 45, only questions of law may be raised, and the factual findings of the CA, affirming those of the trial court, are final and conclusive. The Court found no reason to deviate from the lower courts' appreciation of the evidence regarding the just compensation for the expropriated lots. On the "inflation factor" and "adjustment factor": The Court affirmed the CA's ruling that the trial court erred in applying an "inflation factor" and "adjustment factor" in determining just compensation. The Court reiterated that just compensation means the owner is compensated only for what is actually lost, which is the actual value of the property at the time it is taken. The CA correctly pointed out that the trial court misapplied the ruling in Cosculluela v. Court of Appeals by substituting these factors for the legally mandated interest on the price to be paid as just compensation. The de facto devaluation of the peso is not a factor in land valuation for expropriation, and compensation should not extend beyond the owner's loss or injury. The price level at the time of taking is the proper valuation. On the Time of Taking: The Court sustained the trial court's and CA's determination that the time of taking should be reckoned from the filing of the expropriation complaints in 1994, not from the earlier lease agreement in 1992. The Court clarified that "taking" in the context of eminent domain occurs when the owner is deprived of his property, its value is materially impaired, or he is deprived of its ordinary use. A lease agreement, especially one for a determinate period, does not constitute a taking in the constitutional sense, as the owner is not deprived of the ordinary and beneficial use of his property. The intention to expropriate was manifested only upon the filing of the complaint, aligning with jurisprudence that the filing of the complaint precedes entry into the property. On the Classification of the Land: The Court agreed with the CA that the petitioner's belated objection to the classification of the lots as industrial, rather than agricultural, could no longer be entertained. The Commissioners' Report, the schedule of values prepared by the municipal assessor classifying the lots as industrial, and the trial court's consideration of this classification were all part of the proceedings. No objection was raised by PNOC during the trial court proceedings. The Court emphasized that issues raised for the first time on appeal are barred by estoppel and violate principles of fair play, justice, and due process. The lower courts properly appreciated the evidence presented regarding the nature of the expropriated lots.
Main Doctrine
Just compensation in expropriation cases is determined as of the time of the taking of the property, and the owner is compensated only for what is actually lost, without consideration of inflation or adjustment factors beyond legal interest for delay in payment. Factual findings of lower courts on the nature and value of the property are generally binding on the Supreme Court.