G.R. No. L-21528 - Reyes vs. People

The case involves a parcel of land covered by Transfer Certificate of Title No. T-101793, approximately 7,420 square meters in size, located in Barangay Barrera, Cabanatuan City, and registered in the name of the respondents.
The property was taken by the Sanggunian in 1989 for road-right-of-way and road widening projects, yet no just compensation was rendered at the time despite the completion of the projects.

Upon request by Lourdes Melencio S. Grecia, the Sanggunian formed an appraisal committee headed by City Assessor Lorenza L. Esguerra, with City Treasurer Bernardo C. Pineda and City Engineer Mac Arthur C. Yap as members, to determine the proper just compensation.
The committee issued Resolution No. 20-S-2001 recommending compensation of P2,295.00 per square meter.
Subsequently, the Sanggunian, via Resolution No. 148-2000, authorized Mayor Vergara to negotiate and acquire properties needed for its project.

On December 4, 2001, Mayor Vergara signed a Memorandum of Agreement with Lourdes (acting as attorney-in-fact for the respondents) wherein the Sanggunian obligated itself to pay P17,028,900.00 in 12-year installments (P1,419,075.00 annually starting in the first quarter of 2002) as just compensation for the taken land.
More than four years after the execution of the MOA, no payment was made despite the fact that the petitioners had already taken possession of and were using the land.

Despite repeated personal and written demands, the petitioners (Mayor Vergara in his capacity and the Sangguniang Panlungsod of Cabanatuan) failed to remit the court-determined just compensation.
On November 18, 2005, Mayor Vergara claimed that the Sanggunian’s Resolution No. 129-2002, which denied the ratification of the MOA on grounds of fiscal restraint, rendered the MOA unenforceable.
On December 29, 2005, the respondents filed a petition for mandamus before the RTC of Cabanatuan City, Branch 86, compelling the payment of just compensation together with attorney’s fees and actual expenses.

On September 18, 2006, RTC-Branch 86 issued an Order in favor of the respondents ordering the payment of P17,028,900.00 plus accrued interest and additional sums for attorney’s fees and damages.
Subsequently, a Motion for Partial Execution was filed by the respondents, and on November 8, 2006, the RTC-Branch 86 granted this motion, ordering the petitioners to pay P10,000,000.00 as partial execution.

The petitioners then filed motions for inhibition and reconsideration; the motion for inhibition resulted in the assignment of the case to RTC-Branch 30, which on January 30, 2007, denied the petitioners’ subsequent motions.
Writs of execution and notices of garnishment followed, prompting the petitioners to file a Petition for Certiorari with an urgent Motion for a Temporary Restraining Order and a writ of preliminary injunction before the Court of Appeals.

In its Decision dated August 8, 2008, and a Resolution dated December 5, 2008, the CA modified the trial court’s order, reducing the amount payable by the petitioners to P2,554,335.00 – representing 15% of the appraised total value of the subject property.
The petitioners then sought further remedies, including a motion for reconsideration, which was denied, leading to the elevation of the case to the Supreme Court via petition for review on certiorari.

The petitioners argued that the subject land is a subdivision road, one “beyond the commerce of man” under Section 50 of Presidential Decree No. 1529, thereby rendering the MOA void and negating any obligation to pay compensation.
They also raised issues on estoppel, the authority of Mayor Vergara to sign the MOA without Sanggunian approval, and the basis for awarding attorney’s fees and damages.

Whether the partial execution of the judgment pending appeal is proper under the circumstances.
Whether the petitioners are liable to pay just compensation for the taken property given that the land is argued to be “beyond the commerce of man” under Section 50 of P.D. No. 1529.
Whether the MOA executed by Mayor Vergara binds the petitioners given the alleged lack of authority and failure of the Sanggunian to ratify it.
Whether the awarding of exemplary damages and attorney’s fees is justified in light of the petitioners’ oppressive delay in compensating the respondents.