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VICENTE P. EUSEBIO v. JOVITO M. LUIS

FACTS:

The registered owners of a parcel of land filed a complaint against the City of Pasig, alleging that their land was taken and used as a road without their consent and without the benefit of an expropriation proceeding. The Sanggunian of Pasig City authorized payments to the owners for the land, but the Appraisal Committee assessed the value of the land at a lower amount than what the owners requested. The owners requested reconsideration, but the city refused to pay more than the amount set by the Committee. The owners then filed a complaint seeking the return of the property with payment of reasonable rental for its use or, in the alternative, payment of just compensation. The RTC rendered a decision in favor of the owners, upheld by the CA. The city filed a petition for review, arguing that the owners' claim for just compensation was barred by prescription, that the compensation amount was excessive, that the rental award was improper, and that the attorney's fees were unwarranted. The court ruled that the owners' action for recovery of their property and just compensation was not barred by prescription. The court also discussed the case of Forfom Development Corporation v. Philippine National Railways, which held that failure to question the lack of expropriation proceedings and negotiation for just compensation for a long time constituted waiver and estopped the right to question the power of expropriation.

ISSUES:

  1. Whether the landowner is estopped from questioning the power of the PNR to expropriate or the public use for which the power was exercised.

  2. Whether the landowner is entitled to recover possession of the property.

  3. Whether the trial court's determination of just compensation is valid.

  4. Whether the trial court erred in basing the valuation of just compensation for the subject land on the price paid for properties taken by the city government in 1994, instead of as of the time of taking in 1980.

  5. Whether the City of Pasig should be held liable for damages to respondents for the illegal taking of their property without the benefit of expropriation proceedings and without payment of just compensation.

  6. Whether the award of interest on the value of the land from the time of taking, as well as the award of exemplary damages and attorney's fees, is warranted.

RULING:

  1. The landowner is estopped from questioning the power of the PNR to expropriate or the public use for which the power was exercised because the landowner did not act to question the lack of expropriation proceedings for a very long period of time and even negotiated with PNR as to how much it should be paid as just compensation.

  2. The landowner is not entitled to recover possession of the property as the non-payment of just compensation does not entitle the private landowner to do so.

  3. The trial court's determination of just compensation is invalid because it was not made in accordance with the procedure provided for in the Rules of Civil Procedure, specifically the appointment of competent and disinterested commissioners to ascertain and report the just compensation for the subject property.

  4. The trial court erred in basing the valuation of just compensation on the price paid for properties taken in 1994. The proper valuation should have been based on the value of the property at the time of taking in 1980.

  5. The City of Pasig should be held liable for damages to respondents for the illegal taking of their property without expropriation proceedings and without payment of just compensation.

  6. The respondents are entitled to interest at the rate of 6% per annum on the value of the land at the time of taking, to be calculated from the time of taking until full payment is made. The award of exemplary damages is justified, but the amount should be reduced to P200,000. Also, the attorney's fees awarded should be reduced to 1% of the amount due.

PRINCIPLES:

  • Landowners are estopped from questioning the power of condemnation or the public use for which the power was exercised if they did not question the lack of expropriation proceedings for a long period of time and negotiated for just compensation.

  • Non-payment of just compensation does not entitle the landowner to recover possession of the expropriated property, but only the right to compensation.

  • The determination of just compensation for property taken for public use must be done in accordance with the procedure provided in the Rules of Civil Procedure.

  • The value of the property at the time of taking is controlling if the property was taken without the benefit of expropriation proceedings.

  • Just compensation for expropriation should be fixed based on the value of the property at the time of taking.

  • The government agency's illegal occupation of the owner's property entitles the owner to adequate compensation in the form of actual or compensatory damages.

  • Interest runs as a matter of law on the value of the property from the time of taking until full payment.

  • Indemnity for rentals is inconsistent with the property owner's right to be paid legal interest on the value of the property.

  • Exemplary damages and attorney's fees may be awarded in cases of illegal taking of property.

  • Personal liability of government officials for payments to be made to respondents can only be established with sufficient evidence of their involvement in the illegal taking.