Case Summary (G.R. No. 104662)
Nature and Scope of the Expropriation
NIA filed an expropriation complaint seeking portions of three parcels totaling the area ultimately treated as 18,930 square meters (initially pleaded area figures and later refined). The parcels included Lot No. 3080 (TCT No. T-61963, registered in the name of Rural Bank of Kabacan), Lot No. 455 (TCT No. T-74516, registered to persons surnamed Lao), and Lot No. 3039 (registered to Littie Sarah Agdeppa, later amended to include Leosa Nanette Agdeppa and Marcelino Viernes). NIA sought immediate possession upon depositing a provisional amount with a bank.
Respondents’ Pleadings and Counterclaims
Respondents filed affirmative and special defenses and a counterclaim: they contested NIA’s authority and necessity to expropriate; asserted that there existed alternative government property for the project; challenged ownership assertions (including alleged transfer of Lot No. 3080 from the Rural Bank); disputed NIA’s valuation and claimed the presence of valuable improvements on the land raising the valuation to approximately P5,000,000; and alleged lack of negotiation and resultant damages claimed at P250,000.
Appointment and Findings of Commissioners
Under Rule 67 the RTC appointed a commissioners’ committee to determine fair market value. The first committee (including party-nominated members) conducted an ocular inspection, documented the area occupied, and enumerated improvements (gmelina trees of differing ages, banana clumps, coconut trees). The first committee could not agree on valuation and the court replaced party members with independent assessors (Assistant Provincial Assessor Renato Zambrano and Jack Tumacmol of Land Bank). The new committee performed a second ocular inspection, used BIR zonal valuations (recommending P65 per square meter), consulted the provincial assessor for improvement valuations, and considered factors such as distance to poblacion and highway; they also referenced Provincial Ordinance No. 173 in their computations. A subsequent committee report added the value of earthfill (excavated soil) to the compensation computation.
Trial Court Judgment
The RTC adopted the commissioners’ findings and, by its judgment, ordered the expropriation of 18,930 square meters and assessed specific compensation amounts for land and identified improvements. The RTC also ordered payment for removed earthfill (large sums were awarded to owners of Lot Nos. 3080 and 3039) and directed that payments intended for the Rural Bank of Kabacan be given to respondents and intervenors who claimed to have acquired ownership over the bank-titled land.
Court of Appeals Decision
The CA affirmed the trial court’s adoption of the commissioners’ process and valuations as properly performed and supported by ocular inspections, BIR zonal valuations, and provincial assessor inputs. The CA, however, deleted the inclusion of the value of excavated soil from the just compensation award, reasoning that excavations necessary for irrigation works are integral to the land taking and the soil cannot be valued separately; NIA, as acquirer, would have the right to use the soil and the land’s market value at time of taking already compensates the owner. The CA also affirmed the trial court’s recognition of defendants-intervenors as owners of Lot No. 3080 based on the Rural Bank’s non-participation and its manifestation that it no longer owned the lot.
Issues Brought to the Supreme Court
Two principal issues were presented: (1) whether the CA erred in affirming the trial court’s finding of just compensation based on the commissioners’ report; and (2) whether the CA erred in ruling that payment of just compensation for Lot No. 3080 should be made to respondents-intervenors (rather than to the Rural Bank or otherwise held pending proof of ownership).
Supreme Court: Standard for Just Compensation and Review of Commissioners’ Determination
The Supreme Court affirmed the CA on the first issue. It reiterated the constitutional principle that just compensation is the full and fair equivalent of the property taken, measured by market value at the time of taking. The Court found that the RTC followed Rule 67 procedures in appointing competent and disinterested commissioners who conducted ocular inspections, used reliable documentary sources (BIR zonal valuations, provincial assessor inputs, and Provincial Ordinance No. 173), and considered relevant factors (location, proximity to town and highway, age and productivity of improvements). The Court emphasized that the commissioners’ recommendations were supported by actual and reliable data and that NIA had the opportunity to rebut but failed to present contrary evidence during trial. The Court also noted the general principle of deference to CA factual findings unless contradicted by the record; no such contradiction arose here.
Supreme Court: Excavated Soil Excluded from Separate Compensation
The Supreme Court agreed with the CA’s deletion of compensation for excavated soil. The Court reasoned that the value of soil excavated as a necessary step in constructing irrigation canals is not separable from the value of the land taken; just compensation compensates for the owner’s loss measured at the time of taking, and paying separately for excavated earth would overcompensate the owner and discourage public works. The Court relied on the indivisibility of land rights (Article 437, Civil Code) and pertinent precedent recognizing ownership extends to subsoil but that compensation is measured by the loss of the land as a whole.
Supreme Court: Ownership of Lot No. 3080 and Proper Disposition of Compensation
On the second issue the Supreme Court found error in the CA’s affirmation of the trial court’s order to pay the compensation for Lot No. 3080 to defendants-intervenors. The Court underscored the public-fund nature of eminent domain proceedings and the need for courts to be circumspect in awarding just compensation. Because Lot No. 3080 remained registered in the name of the Rural Bank of Kabacan (TCT No. T-61963), there was no proof in the record of a valid conveyance to the intervenors (no public document of transfer and no registration of any conveyance in the Register of Deeds). The Rural Bank’s “manifestation” of non-ownership and non-participation was insufficient to extinguish the legal presumption attached to the registered title. Accordingly, the Court invoked Rule 67, Section 9 (uncertain ownership; conflicting claims) which permits the court to order award sums to be paid into court for the benefit of the person later adjudged entitled. The Court remanded the case to the trial court to receive evidence establishing the present owner of Lot No. 3080 who is legally entitled to the compensation.
Disposition
The Supreme Court partly granted the petition: it affirmed the CA decision insofar as it adopted the commissioners’ determinations of just compensation for land and improvements and insofar as it deleted the inclusion of
Case Syllabus (G.R. No. 104662)
Nature of the Case and Relief Sought
- Petition for Review on Certiorari under Rule 45 of the Rules of Court filed with the Supreme Court seeking reversal of the Court of Appeals (CA) Decision of 12 August 2008 and Resolution of 22 October 2008 in CA-G.R. CV No. 65196.
- The petition assails the CA’s affirmation with modification of the Regional Trial Court (RTC), Branch 22, Kabacan, Cotabato, 31 August 1999 “Judgment” awarding just compensation for lands and improvements expropriated by petitioner NIA, but excluding compensation for excavated soil.
- Petitioner (Republic of the Philippines represented by the National Irrigation Administration, NIA) challenges: (1) the RTC’s adoption of the commissioners’ report fixing just compensation for the land and improvements; and (2) the CA’s ruling that payment for Lot No. 3080 should be made to respondents-intervenors Margarita Tabaoda and Portia Charisma Ruth Ortiz.
Parties
- Petitioner: Republic of the Philippines, represented by the National Irrigation Administration (NIA).
- Respondents: Rural Bank of Kabacan, Inc.; Littie Sarah A. Agdeppa; Leosa Nanette Agdeppa and Marcelino Viernes; Margarita Taboada; Portia Charisma Ruth Ortiz (represented by Lina Erlinda A. Ortiz and Mario Ortiz); Juan Mamac; Gloria Matas.
- NIA was represented before the Supreme Court by the Office of the Solicitor General (OSG) as appearing from the record.
Statutory and Charter Authority Cited
- NIA’s creation and functions: Republic Act No. 3601 (22 June 1963) and amendments by Presidential Decrees P.D. 552 (11 September 1974) and P.D. 1702 (17 July 1980).
- P.D. 552 specifically empowered NIA to exercise the right of eminent domain "in the manner provided by law for the institution of expropriation proceedings."
- Relevant procedural rules cited: Rule 67 (Expropriation procedure) of the 1997 Rules of Civil Procedure; Rule 45 (petition before the Supreme Court) invoked for the present petition.
- Civil Code Article 437 referenced in related jurisprudence quoted by the Court concerning ownership of surface and subsoil.
- Rule on uncertain ownership in expropriation: Rule 67, Section 9 of the 1997 Rules of Court (quoted and applied regarding payment where ownership is uncertain).
- Conveyancing formalities referenced: Civil Code Art. 1358 and P.D. 1529 provisions regarding public documents and registration.
Facts — Project and Properties Expropriated
- Purpose: NIA required parcels of land to construct the Malitubog-Marigadao Irrigation Project.
- Complaint for expropriation filed with RTC of Kabacan, Cotabato on 8 September 1994; docketed as Special Civil Case No. 61, assigned to RTC-Branch 22.
- Total area sought: portion of three parcels covering 14,497.91 square meters; specific take later identified as 18,930 square meters (per committee/RTC findings).
- Affected parcels:
- Lot No. 3080 — covered by Transfer Certificate of Title (TCT) No. T-61963 — registered under Rural Bank of Kabacan.
- Lot No. 455 — covered by TCT No. T-74516 — registered under names RG May, Ronald and Rolando Lao.
- Lot No. 3039 — registered under Littie Sarah Agdeppa; NIA later amended complaint to include Leosa Nanette A. Agdeppa and Marcelino Viernes as registered owners.
- NIA sought immediate possession upon depositing provisional value of P19,246.58 with Philippine National Bank (Second Amended Complaint, 25 Sept 1995).
Procedural Chronology (Key Dates)
- 8 Sep 1994 — NIA filed expropriation Complaint.
- 11 Jul 1995 — Amended Complaint adding owners of Lot No. 3039.
- 25 Sep 1995 — Second Amended Complaint alleging precise areas and praying for immediate possession upon deposit.
- 31 Oct 1995 — Respondents filed Answer with Affirmative and Special Defenses and Counterclaim.
- 11 Sep 1996 — RTC formed a committee (commissioners) to determine fair market value/just compensation.
- 20 Sep 1996 — Answers-in-intervention filed by certain respondents-intervenors (Margarita Tabaoda, Portia Ortiz, et al.).
- 15 Oct 1996 — First Commissioners’ Report submitted (ocular observations; lack of agreement on market value).
- 21 Oct 1996 — RTC issued Writ of Possession in favor of NIA.
- 22 Oct 1996 — RTC revoked initial party-appointed commissioners and appointed independent appraisers (Renato Zambrano and Jack Tomacmol).
- 25 Nov 1996 — New committee submitted report recommending land value at P65/m² (BIR zonal valuation) and specific unit values for improvements.
- 3 Dec 1997 — Committee submitted another report adding value of earthfill excavated from Lots 3039 and 3080.
- 31 Aug 1999 — RTC promulgated “Judgment” adopting commissioners’ findings and awarding specified compensation amounts.
- 12 Aug 2008 — Court of Appeals promulgated Decision in CA-G.R. CV No. 65196 (affirming with modification the RTC Decision).
- 11 Sep 2008 — NIA filed Motion for Reconsideration before CA (denied).
- 25 Jan 2012 — Supreme Court Decision (Sereno, J.) resolving the Petition for Review; partly granting petition and remanding limited issue.
Commissioners, Ocular Findings and Valuation Recommendations
- First committee (appointed by RTC): Chair Atty. Hermenegildo Marasigan (Branch Clerk of Court, RTC Br. 22); members Atty. Littie Sarah Agdeppa (respondent) and Engr. Abdulasis Mabang (for NIA).
- First committee ocular observations (15 Oct 1996 Report):
- Area already occupied: 6 x 200 meters = 1,200 m².
- Area to be occupied: approximately 18,930 m².
- Area to be occupied fully planted with gmelina trees spaced 1x1 meters.
- Gmelina trees in area already occupied (road) planted at 2x2 spacing and approx. one year old.
- Gmelina trees in area to be occupied about four years old.
- Banana clumps counted at 220.
- Coconut trees counted at 15.
- First committee members could not agree on market value; recommended appointment of independent commissioners.
- Second committee (appointed 22 Oct 1996): Renato Zambrano (Assistant Provincial Assessor, Cotabato) and Jack Tumacmol (Division Chief, Land Bank of the Philippines — Kidapawan Branch), with Atty. Marasigan still chair.
- Second committee (25 Nov 1996 Report) recommendations:
- Fair market value of land: P65 per square meter (based on BIR zonal valuation).
- Improvements valuation schedule:
- P200 for each gmelina tree over four (4) years old.
- P150 for each gmelina tree more than one (1) year old.
- P164 for each coco tree.
- P270 for each banana clump.
- 3 Dec 1997 committee report adopted the earlier reports and added valuation for earthfill excavated from portions of Lot Nos. 3039 and 3080 (inclusion contested by NIA).
Trial Court (RTC) Judgment — 31 August 1999 (Dispositive and Awards)
- RTC adopted commissioners’ findings and ordered expropriation of 18,930 m² in favor of the Republic of the Philippines through NIA.
- Ordered payments:
- P1,230,450 for the 18,930 m² expropriated (in proportion to areas expropriated).
- P5,128,375.50 to defendant-intervenors (owners of Lot No. 3080) representing removed earthfill.
- P1,929,611.30 to defendants (owners of Lot No. 3039) representing earthfill.
- P60,000 for destroyed gmelina trees (1 year old).
- P3,786,000 for the 4-year old gmelina trees.
- P2,460 for coconut trees.
- RTC ordered that all payments intended for the Rural Bank of Kabacan be given to defendants and intervenors who had already acquired ownership over the land titled in the name of the Bank.
Trial and Appellate Contentions
- Respondents’ allegations in Answer and Counterclaim included conte