G.R. No. L-5080 - Republic vs. Lara

The Republic of the Philippines initiated expropriation proceedings against 187 parcels of land in Lipa City for the construction and operation of the Fernando Air Base.
The land, prior to its expropriation, had a dual history of residential and agricultural uses before being transformed for military purposes.
The Armed Forces of the Philippines later took possession of this vast area after the U.S. government handed it over on July 4, 1946, following its occupation by the U.S. Army.

During the latter part of 1943, in the Japanese occupation period, the enemy forces occupied the land, converting it into a campsite and airfield.
The transformation included the destruction of houses along the National Highway and provincial roads, removal of fruit trees, orchards, and sugar crops, and the erection of concrete airstrips, taxi-ways, ramps, dug-outs, canals, ditches, and air raid shelters.
The devastation was compounded by the battles for liberation, leaving the area considerably damaged before military reoccupation.

Post-liberation, the Philippine Army attempted to negotiate the purchase of the land, appointing a committee to appraise the parcels.
While some landowners agreed to sell at fixed prices by the Appraisal Committee, the majority rejected the offered prices, prompting the filing of a complaint for expropriation on July 9, 1949, in the Court of First Instance of Batangas (Civil Case No. 43).
On August 5, 1949, the lower court fixed the provisional value of the land at P117,097.52, which the Republic deposited with the Philippine National Bank.

The court-appointed three commissioners conducted an on-site inspection, classifying the properties into residential and agricultural (further divided into “Group A” and “Group B”).
For valuation purposes, the commissioners recommended:

Residential lands at P1.00 per square meter.
Agricultural lands in “Group A” (within 500 meters from public roads) at P2,500 per hectare (or P0.25 per square meter).
Agricultural lands in “Group B” (beyond 500 meters) at P2,000 per hectare (or P0.20 per square meter).

Payment of 6% interest per annum on the awarded amounts computed from November 17, 1949.
A sum of P200 on each parcel partially expropriated as consequential damages.
Reimbursement for expenses related to subdividing and issuing new certificates of title and, in some instances, indemnification for the loss of fruit trees.

The lower court accepted most of the commissioners’ recommendations but rejected compensation for concrete improvements (e.g., airstrip, taxi-way, ramp) and denied the award for certain additional claims.
Both parties, except a few named landowners, perfected their joint appeal to the higher court, presenting contrasting arguments on:

The classification of the parcels (residential vs. agricultural, and within agricultural, the distinction between “Group A” and “Group B”).
The appropriate valuation date (the actual taking in 1946 versus the filing date in 1949).
Compensation for consequential damages and the computation of interest.

Evidence included various sales transactions of nearby parcels (e.g., Exhibits “B” to “M”, “T” to “T-4”, and exhibits from Lingao and Reyes) used to establish comparable market values despite the post-war inflation and war-induced damages.

Whether the 187 parcels should be classified as residential, agricultural “Group A”, or agricultural “Group B”, considering their pre-war use and post-war conditions.
The proper valuation standard to adopt: the market value as of the actual possession date in 1946 versus the filing date of expropriation proceedings in 1949.

Whether the concrete improvements (airstrip, taxi-way, ramp) constructed by the Japanese forces should be compensated as part of the expropriated property.
Whether owners whose parcels were only partially expropriated are entitled to additional compensation (P200 per parcel) for the damage to the remaining portions of their lands.

Determining the proper date from which interest should accrue: whether the accrual begins on the filing date of the complaint (November 17, 1949) or from the time the plaintiff took actual possession of the lands in 1946.
How the provisional deposit made by the government affects the computation of interest for the expropriated amount.

The relevance and admissibility of nearby property sales (pre-war, pre-occupation, and post-war transactions) in determining the fair market value despite the significant disruption caused by the war and occupation.
The weight to be given to tax declarations and appraisal committee evidence versus actual sales evidence from the post-war period.