Republic Of The Philippines vs. Carmen M. Vda. De Castellvi, et al.

G.R. No. L-20620
August 15, 1974

Facts

In 1947, the Republic, through the Armed Forces of the Philippines (AFP), entered into a lease agreement over a land in Pampanga with Castellvi on a year-to-year basis. In 1956, Castellvi gave notice not to continue with the lease, the AFP refused because of the permanent installations and other facilities worth almost P500,000.00 that were erected and already established on the property. She then instituted an ejectment proceeding against the AFP. The Republic had been illegally occupying her property since July 1, 1956, thereby preventing her from using and disposing of it, thus causing her damages by way of unrealized profit.

Castellvi alleged that the land under her administration, being a residential land, had a fair market value of P15.00 per square meter, so it had a total market value of P11,389,485.00. Defendant prayed that the Republic be ordered to pay her P15.00 per square meter, or a total of P11,389,485.00, plus interest thereon at 6% per annum from July 1, 1956. Moreover, she maintains that the “taking” of property under the power of eminent domain requires two essential elements, to wit: (1) entrance and occupation by condemnor upon the private property for more than a momentary or limited period, and (2) devoting it to a public use in such a way as to oust the owner and deprive him of all beneficial enjoyment of the property. She maintains that the requisites were not satisfied by the Republic.

The Republic argues that the “taking” should be reckoned from the year 1947 when by virtue of a special lease agreement between the Republic and appellee Castellvi, the former was granted the “right and privilege” to buy the property should the lessor wish to terminate the lease, and that in the event of such sale, it was stipulated that the fair market value should be as of the time of occupancy; and that the permanent improvements amounting to more than half a million pesos constructed during a period of twelve years on the land, subject of expropriation, were indicative of an agreed pattern of permanency and stability of occupancy by the Philippine Air Force in the interest of national security.

Issue/s

1. Whether or not the “taking” of the properties under expropriation commenced with the filing of the complaint in this case or in 1947?
2. When should the determination of just compensation be reckoned?
3. What is the just compensation for the lands in question?

Held

First Issue

Contentions

Republic	It has been exercising the right of eminent domain since 1947
Castevelli	The right to eminent domain commenced at the filing of the expropriation proceedings

Ruling

Yes. ‘Taking’ under the power of eminent domain may be defined generally as entering upon private property for more than a momentary period, and, under the warrant or color of legal authority, devoting it to a public use, or otherwise informally appropriating or injuriously affecting it in such a way as substantially to oust the owner and deprive him of all beneficial enjoyment thereof. (Penn. vs. Carolina Virginia Coastal Corporation, 57 SE 2d 817).

Requisites for taking property for the exercise of eminent domain

1. The expropriator must enter a private property.

• Present.
• Castevelli’s land is a private land entered into by the Republic under a lease agreement.

2. The entrance into private property must be for more than a momentary period.

• Absent.
• “Momentary” means “a limited period” — not indefinite or permanent. The entry on the property, under the lease, is temporary and considered transitory.

3. The entry into the property should be under warrant or color of legal authority.

• Present.
• Republic entered the Castellvi property as lessee.

4. The property must be devoted to a public use or otherwise informally appropriated or injuriously affected.

• Present
• The property was used by the air force of the AFP.

5. The utilization of the property for public use must be in such a way as to oust the owner and deprive him of all beneficial enjoyment of the property

• Absent.
• The entry of the Republic did not oust Castellvi. Neither was Castellvi deprived of all the beneficial enjoyment of the property, because the Republic was bound to pay, and had been paying the agreed monthly rentals until the time when it filed the complaint for eminent domain on June 26, 1959.

In this case, elements number 2 and 5 were not satisfied if the taking of the properties should be reckoned from 1947, considering that the entry on the property, under the lease, is temporary, and considered transitory and the entry of the Republic did not oust Castellvi and deprive her of all beneficial enjoyment of the property, respectively.

Therefore, the “taking” of Castellvi’s property for purposes of eminent domain cannot be considered to have taken place in 1947 when the Republic commenced to occupy the property as lessee thereof and that the just compensation to be paid for the Castellvi property should not be determined on the basis of the value of the property as of that year. In other words, taking of the lands have taken place at the filing of the expropriation proceedings.

Second Issue

Under Section 4 of Rule 67 of the Rules of Court, “just compensation” is to be determined as of the date of the filing of the complaint. This Court has ruled that 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. (Republic vs. Philippine National Bank, L-14158, April 12, 1961, 1 SCRA 957, 961-962).

In the instant case, it is undisputed that the Republic was placed in possession of the Castellvi property, by authority of the court, on August 10, 1959. The “taking” of the Castellvi property for the purposes of determining the just compensation to be paid must, therefore, be reckoned as of June 26, 1959 or when the complaint for eminent domain was filed.

Third Issue

In the case of City of Manila vs. Corrales (Phil. 82, 98), this Court laid down basic guidelines in determining the value of the property expropriated for public purposes. This Court said:

“In determining the value of land appropriated for public purposes, the same consideration are to be regarded as in a sale of property between private parties. The inquiry, in such cases, must be what is the property worth in the market, viewed not merely with reference to the uses to which it is at the time applied, but with reference to the uses to which it is plainly adapted, that is to say, What is it worth from its availability for valuable uses?”

In expropriation proceedings, therefore, the owner of the land has the right to its value for the use for which it would bring the most in the market.

In this case, the lands of Castavelli and Guzon are residential lands since (1) the evidence shows that Castellvi broached the idea of subdividing her land into residential lots as early as July 11, 1956 in her letter to the Chief of Staff of the Armed Forces of the Philippines; (2) the layout of the subdivision plan was tentatively approved by the National Planning Commission on September 7, 1956; (3) the land of Castellvi had not been devoted to agriculture since 1947 when it was leased to the Philippine Army; (4) the said land was classified as residential, and taxes based on its classification as residential had been paid since then; and (5) the location of the Castellvi land justifies its suitability for a residential subdivision. Hence, the owners of these lands have the right to their value for the use for which they would bring the most in the market at the time the same were taken from them and such value amounts to P5.00 per square meter.