Export Processing Zone Authority v. Pulido
REITERATIONFacts
The Antecedents: The Export Processing Zone Authority (EPZA) initiated an expropriation action in 1981 for three parcels of irrigated riceland in Rosario, Cavite. During the proceedings, Lot 1406-A was released from expropriation, and a Compromise Agreement was entered into on January 4, 1993, between EPZA and the Estate of Salud Jimenez regarding Lot 1406-B. The agreement stipulated a land swap: Lot 1406-B for Lot 434. EPZA failed to transfer Lot 434 as its registered owner was not EPZA. Procedural History: The Regional Trial Court (RTC) approved the Compromise Agreement on August 23, 1993. However, on August 4, 1997, the RTC annulled the agreement due to EPZA's failure to deliver Lot 434 and ordered the return of Lot 1406-B. The Court of Appeals (CA) partially granted EPZA's petition, setting aside the order for the return of Lot 1406-B and directing the RTC to determine just compensation. This Court, in G.R. No. 137285, denied EPZA's petition, ordering the RTC to proceed with determining just compensation for Lot 1406-B with dispatch. The RTC determined just compensation based on 1993 values and awarded ₱6,200.00/square meter, with interest from August 23, 1993. The CA affirmed this decision. The Petition: EPZA sought review, arguing that just compensation should be based on the 1981 zonal valuation, not the escalated 1993 value, to prevent unjust enrichment. The Estate of Salud Jimenez contended that the 1993 value was equitable due to the prolonged delay and EPZA's profitable use of the property.
Issue(s)
Whether just compensation for Lot 1406-B should be based on its value in 1981 (time of taking) or 1993 (time of compromise agreement). Whether the determined just compensation of ₱6,200.00/square meter is proper. Whether the Estate of Salud Jimenez is entitled to legal interest and at what rate.
Ruling
The petition for review is denied. The decision of the Court of Appeals is affirmed, with the modification that the legal interest is 12% per annum from August 23, 1993, on the unpaid just compensation.
Ratio Decidendi
On the reckoning point for just compensation: The Court held that just compensation for Lot 1406-B must be based on the value prevailing in 1993, the year the parties entered into the Compromise Agreement. The Court emphasized that the decision in G.R. No. 137285 established the "law of the case," which upheld the annulment of the Compromise Agreement but recognized that the agreement related to the mode of payment and implicitly settled the amount of just compensation based on the value at the time of the agreement. The petitioner's attempt to revert to the 1981 valuation was deemed an insincere effort to delay payment. The Court reiterated that by agreeing to a land swap in 1993, EPZA impliedly agreed to using the market values of that year. The RTC's observation that the parties had settled the question of just compensation based on prevailing values at the time of the agreement was fully agreed upon. On the determined just compensation: The Court affirmed the RTC's finding of ₱6,200.00/square meter as just compensation for Lot 1406-B. This valuation was supported by clear and convincing evidence, including a deed of sale for a similar lot in 1994 for ₱6,395.00/square meter, zonal valuations from 1998 showing residential and commercial properties at ₱4,000.00/square meter and ₱8,000.00/square meter respectively, an appraisal report valuing nearby properties at ₱7,500.00/square meter in 1997, and other documents showing PEZA's payments for adjacent expropriated properties. The uniform findings of fact by the RTC and CA on the question of just compensation were given great respect and were deemed conclusive. On entitlement to interest: The Court ruled that the Estate of Salud Jimenez is entitled to legal interest at 12% per annum on the unpaid just compensation. The Court noted the significant delay in payment, caused solely by the petitioner's actions, including the failed compromise agreement and subsequent legal maneuvers. The Court condemned the "cavalier attitude" of government officials in delaying payment for expropriated property. Therefore, 12% interest per annum was imposed on the unpaid gross value of ₱81,331,600.00 from August 23, 1993, the date of the compromise agreement's approval, until full payment, to ensure that the compensation was just.
Main Doctrine
Just compensation for expropriated property must be based on the value prevailing at the time of the compromise agreement or the annulment thereof, not at the time of the taking, especially when the expropriator caused the delay in payment. The owner is also entitled to legal interest at 12% per annum from the date of the compromise agreement's approval until full payment.