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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Private property shall not be taken for public use without just compensation. (Section 9, Article III, 1987 Constitution)
Just compensation is the full and fair equivalent of the property taken from its owner by the expropriator.
It must be the value of the property at the time of taking. (Evergreen Manufacturing Corporation v. Republic of the Philippines, G.R. No. 218628, September 6, 2017)
Just compensation in expropriation cases is constitutionally-enshrined. Section 9, Article III of the 1987 Constitution provides that:
“Private property shall not be taken for public use without just compensation.”
Just compensation has been defined as the fair and full equivalent of the loss. In the case of Evergreen Manufacturing Corporation v. Republic of the Philippines (G.R. No. 218628, September 6, 2017), just compensation is defined as “the full and fair equivalent of the property taken from its owner by the expropriator. The Court repeatedly stressed that the true measure is not the taker’s gain but the owner’s loss. The word ‘just’ is used to modify the meaning of the word ‘compensation’ to convey the idea that the equivalent to be given for the property to be taken shall be real, full, and ample.”
It is the final determination of the fair market value of the property. It is described as “the just cause and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of expropriation. (Republic of the Philippines v. Sps. Goloyuco, G.R. No. 222551, June 19, 2019)
Jurisprudence says:
“When the State appropriates private property for public use, it must compensate the owner of the property so taken. For compensation to by just, the government must not only reimburse the owner with the property’s fair value, it must also do so in a timely manner.” (Republic of the Philippines represented by DPWH v. Estate of Juan Maria Posadas III, G.R. No. 214310, February 24, 2020)
Section 5 of Rule 67 of the Revised Rules of Court provides that:
“Upon the rendition of the order of expropriation, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken. The order of appointment shall designate the time and place of the first session of the hearing to be held by the commissioners and specify the time within which their report shall be submitted to the court.
Copies of the order shall be served on the parties. Objections to the appointment of any of the commissioners shall be filed with the court within ten (10) days from service, and shall be resolved within thirty (30) days after all the commissioners shall have received copies of the objections.
In order to determine just compensation, the trial court should first ascertain the market value of the property by considering the cost of acquisition, the current value of like properties, its actual or potential uses, and in the particular case of lands, their shape, location, and tax declarations thereon. (Republic of the Philippines v. Sps. Salvador, G.R. No. 205428, June 7, 2017)
If, as a result of the expropriation, the remaining lot suffers from an impairment or decrease in value, consequential damages may be awarded by the trial court, provided that the consequential benefits which may arise from the expropriation do not exceed said damages suffered by the owner of the property. (Republic of the Philippines v. Sps. Salvador, Id.)
What is the rule in the determination of just compensation?
The general rule is that just compensation is determined as of the date of the taking of the property, or the filing of the complaint, whichever came first.
Section 4, Rule 67 of the Revised Rules of Court provides that:
“If the objections to and the defenses against the right of the plaintiff to expropriate the property are overruled, or when no party appears to defend as required by this Rule, the court may issue an order of expropriation declaring that the plaintiff has a lawful right to take the property sought to be expropriated, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the taking of the property or the filing of the complaint, whichever came first.” (Emphasis supplied.)
If the filing of the complaint takes place at the same time as the taking or entry therein, it is computed at the time of the filing. (City of Iloilo v. Hon. Lolita Contreras-Besana, G.R. No. 168967, February 12, 2010)
Jurisprudence says:
“When the taking of the property sought to be expropriated coincides with the commencement of the expropriation proceedings, or takes place subsequent to the filing of the complaint for eminent domain, the just compensation should be determined as of the date of the filing of the complaint.” (City of Iloilo v. Hon. Lolita Contreras-Besana, Id.)
Is there an exception to this general rule that just compensation is determined as of the date of the taking or property or filing of a complaint?
Yes. When the property is taken before the filing of the complaint, the assessment should be made as of the time of taking or entry.
Jurisprudence provides that:
“Where actual taking was made without the benefit of expropriation proceedings, and the owner sought recovery of the possession of the property prior to the filing of expropriation proceedings, the Court has invariably ruled that it is the value of the property at the time of taking that is controlling for purposes of compensation.” (Republic of the Philippines v. Sps. Mariano Nocom, et al., G.R. No. 233988, November 15, 2021)
Can zonal valuation be the basis of determination of just compensation?
No. in the case of Republic of the Philippines v. Estrella Decena, et al. (G.R. No. 212786, July 30, 2018), it was ruled that in determining the just compensation for a property subject of expropriation case, the BIR zonal valuation cannot be taken into consideration as the same is always relatively less than the fair market value.
In the case of Republic of the Philippines v. Sps. Goloyuco (G.R. No. 222551, June 19, 2019), it was ruled that time and again, the Court has held that zonal valuation, although one of the indices of the fair market value of real estate, cannot, by itself, be the sole basis of just compensation in expropriation cases.
Did you know that in expropriation cases involving land, just compensation is generally set on a per square meter basis? Without knowing the precise area taken by the State, there is no way of definitively setting the amount payable as just compensation. (National Power Corporation v. De Veyra, G.R. No. L-15763, December 22, 1961)
Just compensation, is, as a general rule, based on the price or value of the property at the time the complaint for expropriation was filed. By way of exception, when the government takes the property before initiating the expropriation case, the property’s value at the time of the prior taking must be used as the basis for determining just compensation. (Republic of the Philippines represented by DPWH v. Estate of Juan Maria Posadas III, G.R. No. 214310, February 24, 2020)
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