3. Just Compensation

Eminent domain

It is the right of the State to acquire private property for public use upon the payment of just compensation (Brgy. Sinadalan v. CA, G.R. No. 150640, 2007)

Guidelines for Expropriation Proceedings of National Government Infrastructure Projects (R.A. No. 8974, Sec. 4)

Sec. 4. Guidelines for Expropriation Proceedings. - Whenever it is necessary to acquire real property for the right-of-way or location for any national government infrastructure project through expropriation, the appropriate implementing agency shall initiate the expropriation proceedings before the proper court under the following guidelines:

• Upon the filing of the complaint, and after due notice to the defendant, the implementing agency shall immediately pay the owner of the property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of the property based on the current relevant zonal valuation of the Bureau of Internal Revenue (BIR); and (2) the value of the improvements and/or structures as determined under Section 7 hereof;
• In provinces, cities, municipalities and other areas where there is no zonal valuation, the BIR is hereby mandated within the period of sixty (60) days from the date of the expropriation case, to come up with a zonal valuation for said area; and
• In case the completion of a government infrastructure project is of utmost urgency and importance, and there is no existing valuation of the area concerned, the implementing agency shall immediately pay the owner of the property its proffered value taking into consideration the standards prescribed in Section 5 hereof. Upon compliance with the guidelines above-mentioned, the court shall immediately issue to the implementing agency an order to take possession of the property and start the implementation of the project. Before the court can issue a writ of possession, the implementing agency shall present to the court a certificate of availability of funds from the proper official concerned. In the event that the owner of the property contests the implementing agency’s proffered value, the court shall determine the just compensation to be paid the owner within sixty (60) days from the date of filing of the expropriation case. When the decision of the court becomes final and executory, the implementing agency shall pay the owner the difference between the amount already paid and the just compensation as determined by the court. (R.A. 8974, Sec. 4)

Sec. 6. Guidelines for Negotiated Sale. - Should the implementing agency and the owner of the property agree on a negotiated sale for the acquisition of right-of-way, site or location for any national government infrastructure project, the standards prescribed under Section 5 hereof shall be used to determine the fair market value of the property, subject to review and approval by the head of the agency or department concerned. (R.A. No. 8974, Sec. 6)

NEW SYSTEM OF IMMEDIATE PAYMENT OF INITIAL JUST COMPENSATION

For the acquisition of right-of-way, site or location for any national government infrastructure project through expropriation, upon the filing of the filing of the complaint, and after due notice to the defendant, the implementing agency shall immediately pay the owner of the property the amount equivalent to the sum of:

• 100% of the value of the property based on the current relevant zonal valuation of the BIR; and
• The value of the improvements and/or structures as determined under Sec. 7, R.A. 8974. (R.A. 8974, Sec. 4)

A negotiated sale may be entered into instead of expropriation proceedings. (Sections 3, 5 & 6 of R.A 8974, and Sections 6 & 13 of E.O. 1035) For negotiated sale, payment must be effected within 90 days from submission of all documents and authorization of sale, while for expropriation, it is 90 days from finality of the decision rendered by the court.

The solicitor general is wrong in asserting that section 50 of PD 1529 (property registration decree) applies in the sense that the property utilized and taken by the government may only be conveyed by donation to the government. There is nothing that can more speedily and effectively embitter a citizen and taxpayer against his government and alienate his faith in it, than an injustice in unfair dealing. The government must effect payment in the form of just compensation, and it may be done through a negotiated sale, as granted by the RTC to the respondent by virtue of RA 8974 and EO 1035. (Republic v. Ortigas, G.R. No. 171496, 2014)

Failure to File Answer - Defendant NOT in Default

Note: Failure to file an answer does not produce the consequences of default in ordinary civil actions; the defendant may nonetheless appear at the trial to present evidence as to the just compensation of the claims and, thereafter, share in the judicial award.

Just Compensation

It is full and fair equivalent of the property taken from its owner by the expropriator. The measure is not just the taker’s gain, but the owner’s loss.

Just compensation means not only the correct determination of the amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking.

Without prompt payment, compensation cannot be considered "just" for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss. (Coscoluela v. Court of Appeals, G.R. No. 77765, 1988)

Just compensation is not only the correct determination of the amount to be paid to the owner, but also the payment of the property within a reasonable time, i.e. payment within 5 years from finality of judgment (Republic v. Lim, G.R. No. 161656, 2005)

Value of the Property as Basis for Just Compensation

• As of the date of filing of the complaint; or
• Upon taking of the property, whichever comes first. (Sec. 4, Rule 67)

Formula for Determining Just Compensation

VL – Value of the property (see above);

JC – Just Compensation;

CB – Consequential Benefits;

CD – Consequential Damages.

Where consequential benefits are less than consequential damages:

ASCERTAINMENT OF JUST COMPENSATION

APPOINTMENT OF COMMISSIONERS; COMMISSIONERS’ REPORT; COURT ACTION UPON COMMISSIONERS’ REPORT

Appointment

Upon the rendition of the order of expropriation, the court shall appoint not more than 3 competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken. (Sec. 5, Rule 67)

Remedies of a Property Owner for Non-Payment of the Just Compensation for the Taking of his Property:

General rule: The private landowner cannot execute on the judgment or recover the property. Non-payment merely entitles the private landowner to interest on the just compensation, until fully paid.

Exceptions:

• If the expropriated property earns income or the government has allocated/appropriated funds for the just compensation, the landowner may execute on such funds within five (5) years from finality of the decision. (Coscolluela v. CA, G.R. No. 77765, August 15, 1988)
• An action for reconveyance or recovery of possession, if payment of just compensation has not been made after the lapse of five (5) years from finality of the judgment fixing just compensation, under special circumstances, including the fact that the property taken is no longer devoted to public use. (Republic v. Lim, G.R. No. 161656, June 29, 2005)