FACTS:

Manuel Diaz owned tenanted agricultural land in Nueva Ecija. In 1972, the National Irrigation Administration (NIA) bulldozed a portion of the land to build two irrigation canals. The entire area became prone to flooding because of the construction method used by NIA. NIA completed the canals without expropriation proceedings or compensating the landowner. Respondent, Francisco Diaz, sought compensation from NIA for the affected land and unrealized profits. In 1980, NIA offered to buy the portions of the land occupied by the canals but the sale was not implemented. In 1993, respondent filed an action for damages and just compensation against NIA. The trial court found that NIA took around 9 to11 hectares of land and awarded respondent P4 million for the occupied land and P6,679,200 for the lost crops. NIA appealed to the Court of Appeals.

The case involves a dispute over just compensation for the taking of private property for public use. The respondent is claiming compensation for the land taken by the National Irrigation Administration (NIA) for the construction of canals in 1972. The Regional Trial Court awarded the respondent P6,679,200 for lost earnings and attorney's fees, but the Court of Appeals struck down the award for lack of sufficient proof. The Court of Appeals affirmed the trial court's decision but deleted the award for loss of earnings and attorney's fees. NIA raised several issues, including the computation of just compensation, the basis for the award, and the appointment of commissioners to assess the amount for just compensation. NIA also argued that respondent's claim is barred by laches, but the Court held that the principle of laches does not apply in this case. The Court ruled that the claim for compensation is not barred by the delay in pursuing the claim and that respondent has steadfastly pursued his claim since 1972. NIA was also partly to blame for the delay in the case. The Court partially granted the petition and remanded the case to the trial court for the appointment of commissioners to assess the amount of just compensation.

The National Irrigation Administration (NIA) failed to compensate the respondent for the private property it took for public purpose. The respondent had been occupying the canals on the property for over three decades, but had not received any compensation from NIA. Despite not compensating the property owners, NIA charged the respondent and other farmers in the area irrigation fees for the use of the canals. NIA's actions were deemed a disregard for the rights of the property owners and its own duties under the law. According to Section 2(e) of RA 3601, as amended by PD 552, NIA should have followed the necessary proceedings to acquire the private property and compensate the owners. Failure to do so violates the requirement of just compensation in the exercise of eminent domain.

ISSUES:

1. Whether laches bars respondent's claim.

2. Whether this case should be remanded to the trial court for the appointment of commissioners.

3. Whether the Court of Appeals erred in affirming the award of P4 million to respondent.

RULING:

1. Laches

   • The respondent's action is not barred by laches. The principle of laches finds no application in this case as both equity and law direct that a property owner should be compensated if his property is taken for public use. According to established jurisprudence, actions to recover the value of privately taken land by the government for public use do not prescribe.

2. Remand to Trial Court

   • The case should not be remanded to the trial court for the appointment of commissioners. The usual procedure for determining just compensation is waived when the government initially violates procedural requirements. There was no necessity for commissioners as NIA failed to comply with the proper expropriation procedures.

3. Award of Just Compensation

   • The Court of Appeals erred in affirming the award of P4 million. The just compensation due for the 22,073 square meter Canal Sites is to be computed at P1.39 per square meter, as agreed in 1980, with legal interest of 12% per annum from 1972 until fully paid. The trial court's computation was based on incorrect premises, necessitating adjustments in the award given to the respondent.

PRINCIPLES:

1. Just Compensation

   • Just compensation is the fair value of the property at the time of taking, even if the property owner brings an action for compensation.

2. Power of Eminent Domain

   • The exercise of eminent domain entails payment of just compensation, without which title over the expropriated property cannot pass to the government.

3. Laches

   • Laches is a doctrine of equity that does not apply when the property owner consistently pursues their claim, and especially when actions to recover the value of land taken by the government for public use do not prescribe.

4. Due Process

   • Taking one's property without due process and without compensation constitutes a denial of the equal protection of the laws.

5. Exceptions in Judicial Procedure

   • Procedural requirements may be waived when violated by the government itself, as seen in the waiver of the necessity for appointment of commissioners when the government fails to comply with proper expropriation processes.

6. Legal Interest

• Legal interest at 12% per annum is applicable from the time of taking to address the issue of currency value fluctuation over time.

13. Damages

• Temperate and exemplary damages are awarded when a government agency exhibits a flagrant disregard for property rights and due process.

15. Recovery of Possession

• The property may be returned to the aggrieved landowner if feasible, especially when the government has not pursued necessary expropriation proceedings or if the land serves no ongoing public purpose.