G.R. No. L-15654 - Delgado Brothers, Inc. vs. Court of Appeals

This is a petition for review of the Court of Appeals’ Decision dated November 15, 2002, and its Resolution dated September 17, 2003, in CA-G.R. CV No. 50358.
The case originated from a dispute over the expropriation of a portion of private respondent Rosario Rodriguez Reyes’ property by the petitioner, Republic of the Philippines through the Department of Public Works and Highways (DPWH).

Private Respondent: Rosario Rodriguez Reyes, the absolute owner of a parcel of land identified as Lot 849-B, covered by TCT No. T-7194, measuring 1,043 square meters and located along Claro M. Recto and OsmeAa Streets in Cagayan de Oro City.
Petitioner: Republic of the Philippines represented by the DPWH, which took possession of a significant portion of the property without initiating formal expropriation proceedings.

DPWH sent a letter requesting permission to enter into 663 square meters of the property for road construction (OsmeAa Street extension road).
Subsequently, on December 20, 1990, DPWH took possession of the property without following expropriation procedures.

Rosario Rodriguez Reyes sent letters on January 4 and 7, expressing her objection to the taking of her property.

On May 16, 1991, she sent a letter to the City Appraisal Committee (CAC) rejecting its appraisal and requested a reappraisal from the City Assessor, which was denied.

March 17, 1992 – Rosario filed a complaint with the Regional Trial Court (RTC) of Cagayan de Oro City for just compensation and damages.
June 30, 1993 – The RTC appointed three commissioners to determine the fair market value of the property and assess the damages resulting from the expropriation.

September 15, 1993 – One commissioner (Provincial Assessor Corazon Beltran) submitted a report recommending a market value of P4,000 per square meter (with an additional 5% for severance fee).
April 13, 1994 – The hearing was reset to May 19, 1994, to allow Rosario time to consider the petitioner’s offer of an amicable settlement at P3,200 per square meter for the 663 square meter portion.
May 16, 1994 – An “Urgent Motion to Deposit” was filed by Rosario, which was granted by the RTC on June 16, 1994.
October 21, 1994 – DPWH deposited a Landbank check of P2,121,600 as part of the just compensation.
Due to delays and non-submission of the first commissioners’ report, the RTC later appointed a new set of commissioners, who on October 11, 1994, submitted their valuation report dividing the property into three distinct lots with varying valuations.

June 2, 1995 – The RTC rendered its Decision awarding just compensation based on a particular valuation and directed the return of a portion of the taken land along with award of damages and attorney’s fees.
June 15, 1995 – An Amended Decision was issued, modifying the amount of compensation and the area of land to be returned.

On appeal, the Court of Appeals affirmed, with modifications, the RTC’s decision but noted that the valuation basis was unclear and that a reconvening or reappointment of commissioners was necessary

The appellate court upheld the award of consequential damages and attorney’s fees but removed the award for actual damages in respect of the remaining lot.

Whether the Court of Appeals erred in remanding the case to the RTC to reconvene or appoint new commissioners to determine the just compensation and consequential damages for the remaining 297-square meter lot.
Whether consequential damages can be awarded for a portion of the property that was not physically taken but suffered an impairment or decrease in value due to the expropriation.

Whether the Court of Appeals erred in ordering petitioner to pay attorney’s fees to private respondent, given the circumstances under which the expropriation was conducted and the subsequent litigation.