Case Digest (G.R. No. 210669)
Facts:
Hi-Lon Manufacturing, Inc. v. Commission on Audit, G.R. No. 210669, August 01, 2017, the Supreme Court En Banc, Peralta, J., writing for the Court.The dispute arose from COA Legal and Adjudication Office–National Legal and Adjudication Section (LAO‑N) Notice of Disallowance (ND) No. 2004‑032 dated January 29, 2004 which disallowed P9,937,596.20 as the alleged excess payment by the Department of Public Works and Highways (DPWH) to Hi‑Lon Manufacturing, Inc. (HI‑LON) for supposed just compensation for a 29,690‑sq.m. portion of an 89,070‑sq.m. parcel that had been used as a road right‑of‑way (RROW) since 1978. LAO‑N concluded the auditor’s valuation at P523,741.80 and sought recovery of the difference from the P10,461,338.00 partial payment made by DPWH.
Chronology of ownership and transfers: the parcel was originally registered to Commercial and Industrial Real Estate Corporation (CIREC) (TCT No. T‑40999), later acquired by Philippine Polymide Industrial Corporation (PPIC) (TCT No. T‑120988), foreclosed and acquired by the Development Bank of the Philippines (DBP) (TCT No. T‑151837), then transferred to the national government via the Asset Privatization Trust (APT) pursuant to Administrative Order No. 14 (Proclamation No. 50). APT conducted a public bidding on June 30, 1987; Fibertex Corp. emerged as the highest bidder for a bundle of assets. APT executed two deeds of sale in 1987 — to TG Property, Inc. (TGPI) for the land portion (Deed dated October 29, 1987 for P2,222,967.00, describing the “total usable area of 59,380 sq. m.”) and to Fibertex for improvements (Deed dated August 19, 1987). The Register of Deeds issued TCT No. T‑158786 in TGPI’s name on December 9, 1987 covering the entire 89,070 sq.m. parcel, and TGPI paid real property taxes on the whole parcel until 1996. TGPI then sold the parcel to HI‑LON by Deed of Absolute Sale dated April 16, 1995; HI‑LON registered the transfer (TCT No. 383819).
In 1998 HI‑LON sought payment of just compensation from DPWH for the RROW; DPWH’s Ad Hoc Committee used a 1999 BIR zonal valuation (P2,500/sq.m.) and DPWH executed a Deed of Sale with HI‑LON covering the 29,690 sq.m. parcel on December 21, 2001; DPWH made a partial payment of P10,461,338.00 on January 23, 2002. A DPWH post audit (Audit Observation Memorandum dated April 2, 2003) concluded valuation should be measured at the time of actual taking (1978) and recommended recovery of excess payments; LAO‑N issued ND No. 2004‑032 accordingly.
LAO‑N affirmed the ND (Decision No. 2004‑172, May 12, 2004; Decision No. 2008‑172‑A, June 25, 2008, denying motions for reconsideration), finding valuation should be based on the date of taking and later applying interest. HI‑LON sought review before the Commission on Audit (COA). COA deferred resolution and constituted a Special Audit Team; after investigation COA Commission Proper issued Decision No. 2011‑003 (Jan. 20, 2011) denying HI‑LON’s petition and affirming ND No. 2004‑032 with modification (ordering an ND for the P523,741.80 not covered by ND No. 2004‑032). HI‑LON’s motion for reconsideration was denied by COA Decision No. 2013‑212 (Dec. 3, 2013), which required HI‑LON to refund the P10,461,338.00 payment.
HI‑LON filed a Petition for Certiorari under Rule 64 in relation to Rule 65 of the 1997 Rules of Civil Procedure before the Supreme Court, contending COA committed grave ...(Subscriber-Only)
Issues:
- Did the Commission on Audit commit grave abuse of discretion in sustaining the Notice of Disallowance and denying HI‑LON’s claim for just compensation?
- Was COA permitted to examine and rule on HI‑LON’s ownership of the 29,690 sq.m. RROW notwithstanding the existence of Torrens titles issued to TGPI/HI‑LON?
- Is HI‑LON entitled to just compensation for the 29,690 sq.m. RROW and, if not, must it refund ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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