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REPUBLIC v. SPS. SENANDO F. SALVADOR

FACTS:

The Republic of the Philippines filed a complaint for the expropriation of a parcel of land owned by respondents in Valenzuela City. The purpose of the expropriation was for the construction of a road project. The Republic offered and respondents accepted the compensation for the property, and the RTC issued a writ of possession in favor of the Republic. The RTC later rendered a decision condemning the property for expropriation and ordered the Republic to pay respondents consequential damages, including the value of the capital gains tax and other taxes necessary for the transfer of the property. The Republic filed a motion for partial reconsideration, but it was denied by the RTC. The Republic then filed a petition for review before the Supreme Court, raising the issues of the timeliness of the motion and the propriety of awarding capital gains tax as consequential damages.

ISSUES:

  1. Whether the RTC correctly denied the Republic's Motion for Partial Reconsideration for having been filed out of time.

  2. Whether the capital gains tax on the transfer of the expropriated property can be considered as consequential damages that may be awarded to respondents.

RULING:

  1. The RTC erred in denying the Republic's Motion for Partial Reconsideration for having been filed out of time. The pleading was filed via registered mail within the reglementary period of 15 days to file said motion.

  2. The RTC committed a serious error when it directed the Republic to pay respondents consequential damages equivalent to the value of the capital gains tax and other taxes necessary for the transfer of the subject property. Capital gains tax on the transfer of property in expropriation proceedings is a liability of the seller, not the buyer. No evidence was presented to prove any impairment or decrease in value of the remaining property, and the payment of capital gains tax has no effect on the increase or decrease in value of the remaining property. Therefore, the capital gains tax cannot be considered as consequential damages that may be awarded to respondents.