Case Summary (G.R. No. 179334)
Petitioner
Secretary of the DPWH and District Engineer Contreras, representing DPWH’s interest in disputing the amount and basis of compensation.
Respondent
Spouses Heracleo and Ramona Tecson, seeking full just compensation for the taking of their property.
Key Dates
• 1940 – DPWH takes respondents’ land without expropriation proceedings.
• December 15, 1994 – Respondents demand payment of fair market value.
• March 17, 1995 – Complaint for recovery of possession with damages filed in RTC.
• March 22, 2002 – RTC rules in favor of respondents, valuing land at ₱1,500/sqm.
• July 31, 2007 – CA affirms RTC’s valuation, adds 6% interest from filing date.
• July 1, 2013 – SC Third Division reduces valuation to ₱0.70/sqm, applies 6% interest from 1940.
• April 21, 2015 – En banc Resolution denies respondents’ motion for reconsideration.
Applicable Law
• 1987 Constitution, Art. III, Secs. 1 (due process) and 9 (just compensation).
• Rule 67, Sec. 4, Rules of Court (valuation “as of the date of taking or filing, whichever is earlier”).
• Civil Code provisions on expropriation damages and legal interest (Arts. 1250, 2212).
• Central Bank/BSP Circulars (Circulars 416, 905, 799) and Act No. 2655 on legal interest rates.
• Republic Act No. 8974 (guidelines for prompt expropriation proceedings and payment).
Factual Background
In 1940 DPWH occupied the Tecsons’ land without initiating expropriation or paying compensation. After decades of nonpayment, the Tecsons demanded ₱0.70/sqm based on a 1950 PAC resolution, refused, then sued for full market value or return of possession.
Procedural Posture
• RTC values land at ₱1,500/sqm plus 6% from 1995.
• CA affirms with 6% interest from filing.
• Third Division SC reduces compensation to the 1940 value (₱0.70/sqm) with 6% interest from taking.
• Respondents move for reconsideration; en banc denies.
Issue
Whether just compensation must be measured at the time of taking (1940 value) or at a later valuation date, and how interest should run.
Majority Holding (En banc)
Just compensation is the fair market value at the time of taking (₱0.70/sqm) with 6% per annum legal interest from 1940 until full payment. The motion for reconsideration is denied.
Majority Reasoning
- Constitution and jurisprudence fix the reckoning date at actual taking for fair market value.
- Prompt payment requirement is satisfied by awarding legal interest on the “forbearance” from 1940.
- Central Bank/BSP Circulars and Act No. 2655 prescribe 6%–12% rates; as of July 1, 2013 the legal rate is 6%.
- RA 8974 demonstrates legislative intent to expedite expropriation proceedings, but cannot be retroactive.
- Equity and public interest cannot override clear constitutional and statutory mandates.
Separate Concurring Opinion (Justice Brion)
• Emphasizes the Court’s role as a court of law, not equity or economics.
• Rejects use of economic theories (e.g., present value) in place of established legal rules.
• Advocates application of statutory and Central Bank/BSP rates in segments:
– 6% from taking until judicial demand (1995),
– 12% compounded until BSP’s 2013 rate change,
– then 6% compounded from mid-2013 to resolution,
– and 6% simple interest from finality until
Case Syllabus (G.R. No. 179334)
Factual Background
- In 1940, the Department of Public Works and Highways (DPWH) took possession of respondents’ 7,268-sqm parcel in San Pablo, Malolos, Bulacan, for MacArthur Highway without initiating expropriation proceedings or paying just compensation.
- Respondents Heracleo and Ramona Tecson only learned of the taking decades later and, by letter dated December 15, 1994, demanded fair-market‐value payment.
- DPWH-First Bulacan District Engineer Celestino R. Contreras offered Seventy Centavos (P0.70) per sqm pursuant to a 1950 Provincial Appraisal Committee (PAC) resolution.
- Unwilling to accept P0.70, respondents counter-demanded either the return of the land or compensation at its current value (P2,543,800 based on 1994 tax declaration).
Procedural History
- March 17, 1995: Respondents filed a complaint for recovery of possession with damages against DPWH and Engineer Contreras in RTC Branch 80, Malolos City (Civil Case No. 208-M-95).
- June 28, 1995: RTC granted motion to dismiss as a suit against the State, but on appeal the CA reversed.
- February 11, 1999: CA ruled government’s immunity inapplicable when property was taken sans expropriation, remanding for valuation.
- March 22, 2002: RTC commissioners, adopting PAC’s P1,500/sqm finding, held respondents entitled to P1,500 per sqm plus interest at 6% p.a. from complaint.
- July 31, 2007: CA affirmed RTC valuation and added 6% interest per annum from filing date until full payment.
- July 1, 2013: SC Third Division, on petition for review, reduced valuation to P0.70 per sqm and shifted 6% interest to run from date of taking in 1940.
- September 10, 2013: Respondents moved for reconsideration, urging the Court to revisit the “miserable” award and adopt a “happy middle ground.”
Issues
- Whether just compensation must be measured by the property’s fair-market value at the time of taking (1940) or at a more current date.
- Whether the award of P0.70 per sqm, after seventy-plus years of government use, violates the constitutional guarantee of “just compensation.”
- Whether this Court sho