brgy. matictic vs. elbinias

8/13/2019 BRGY. Matictic vs. Elbinias

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THE CITY OF ILOILO, Represented by HON. JERRY P. TREAS, City Mayor, petitioner,

vs.HON. JUDGE EMILIO LEGASPI, Presiding Judge, RTC, Iloilo City, Branch 22, and HEIRS OF MANUELA

YUSAY, Represented by SYLVIA YUSAY DEL ROSARIO and ENRIQUE YUSAY, JR.,respondents. G.R. No. 154614 November 25, 2004

FACTS:

The Sangguniang Panlungsod of the City of Iloilo on March 7, 2001 enacted regulation ordinancegranting umbrella authority to then Mayor Mansueto A. Malabor to institute expropriationproceedings on Lot No. 935, registered in the name of Manuela Yusay, located at barangay Sto.Nio Norte, Arevalo, Iloilo City. On March 14, 2001, Mayor Malabor wrote Mrs. Sylvia Yusay del Rosario, administration of theestate , making formal offer to purchase the property for the purpose of converting the same as anon-site relocation for the poor and landless resident of the city. With apparent refusal to sellthe property, the city represented by Mayor Jerry P. Treas filed an expropriation case based onthe Power of State on Eminent Domain. Upon the strict compliance to the governing rules onexpropriation, the city of Iloilo argued that it is entitled to an immediate issuance of a writof possession.

ISSUES: 1. When does a court order become final and executory? 2. What is the legal basis of the Local Government Unit to exercise power of eminentdomain? 3. What are the requisites in issuance of Writ of Possession?

RULING: A. Time-honored and of constant observance is the principle that no order dictated in open court

had no juridical existence before it is set in writing, signed, promulgated and served on theparties. Since the order orally pronounced in court had no juridical existence yet, the periodwithin which to file a motion for reconsideration cannot be reckoned therefrom, but from the timethe same was received in writing. Petitioner had fifteen (15) days from its receipt of the writtenorder within which to file a motion for reconsideration.

B. Petitioner has the irrefutable right to exercise its power of eminent domain. It being a localgovernment unit, the basis for its exercise is granted under Section 19 of Rep. Act No. 7160 , towit: Sec. 19 Eminent Domain. - A local government unit may, through its chief executive and actingpursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, orwelfare for the benefit of the poor and the landless, upon payment of just compensation, pursuantto the provisions of the Constitution and pertinent laws.

C. For a writ of possession to issue, only two requirements are required: the sufficiency in formand substance of the complaint and the required provisional deposit. Section 19 of Rep. Act No.7160 provides that the local government unit may take immediate possession of the property uponthe filing of the expropriation proceedings and upon making a deposit of at least fifteen percent(15%) of the fair market value of the property based on its current tax declaration. As long asthe expropriation proceedings have been commenced and the deposit has been made, the localgovernment unit cannot be barred from praying for the issuance of a writ of possession. Petition is hereby GRANTED.

Republic vs. Judge GingoyonG.R. No. 166429 (E)December 19, 2005

FACTSThe present controversy has its roots with the promulgation of theCourts decision in Agan v. PIATCO, promulgated in2003 (2003 Decision). This decision

nullified the Concession Agreement for the Build -Operate-and-Transfer Arrangementof the NinoyAquino Inter national Airport Passenger Terminal III entered into between the Philippine

Government (Government) and the Philippine International Air Terminals Co., Inc. (PIATCO), aswell as the amendments and supplements thereto. The agreement had authorized PIATCO to build anew international airport terminal (NAIA 3), as well as a franchise to operate and maintain thesaid terminal during the concession period of 25 years. The contracts were nullified and that theagreement was contrary to public policy. At the time of the promulgation of the 2003 Decision,the NAIA 3 facilities had already been built by PIATCO and were nearing completion. However, theponencia was silent as to the legal status of the NAIA 3 facilities following the nullificationof the contracts, as well as whatever rights of PIATCO for reimbursement for its expenses in theconstruction of the facilities. After the promulgation of the rulings in Agan, the NAIA 3facilities have remained in the possession of PIATCO, despite the avowed intent of the Governmentto put the airport terminal into immediate operation. The Government and PIATCO conducted severalrounds of negotiation regarding the NAIA 3 facilities. In 2004, the Government filed a Complaint


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for expropriation with the Pasay RTC. The Government sought upon the filing of the complaint theissuance of a writ of possession authorizing it to take immediate possession and control over theNAIA 3 facilities. The Government also declared that it had deposited the amount ofP3,002,125,000.00 (3 Billion) in Cash with the Land Bank of the Philippines, representing theNAIA 3 terminal s assessed value for taxation purposes. The Government insists that Rule 67 ofthe Rules of Court governs the expropriation proceedings in this case to the exclusion of allother laws. On the other hand, PIATCO claims that it is Rep. Act No. 8974 which does apply.

ISSUE

Whether or not Rule 67 of the Rules of Court or Rep. Act No. 8974 governs the expropriationproceedings in this case?HELDThe 2004 Resolution in Agan sets the base requirement that has to be observed before the

Government may take over the NAIA 3, that there must be payment to PIATCO of just compensation inaccordance with law and equity. Any ruling in the present expropriation case must be conformableto the dictates of the Court as pronounced in the Agan cases. Rule 67 outlines the procedureunder which eminent domain may be exercised by the Government. Rep. Act No. 8974, which coversexpropriation proceedings intended for national government infrastructure projects. Rep. Act No.8974, which provides for a procedure eminently more favorable to the property owner than Rule 67,inescapably applies in instances when the national government expropriates property for nationalgovernment infrastructure projects. Thus, if expropriation is engaged in by the nationalgovernment for purposes other than national infrastructure projects, the assessed value standardand the deposit mode prescribed in Rule 67 continues to apply. Rep. Act No. 8974 applies in thiscase, particularly insofar as it requires the immediate payment by the Government of at least theproffered value of the NAIA 3 facilities to PIATCO and provides certain valuation standards ormethods for the determination of just compensation. Applying Rep. Act No. 8974, the

implementation of Writ of Possession in favor of the Government over NAIA 3 is held inabeyance until PIATCO is directly paid the amount of P3 Billion, representing the proffered valueof NAIA 3 under Section 4(c) of the law.

REPUBLIC VS. HOLY TRINITY

D E C I S I O N

CHICO-NAZARIO, J .:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seekingto set aside the Decisio n [1] dated 21 April 2006 of the Court of Appeals in CA-G.R. SP No. 90981which, in turn, set aside two Order s [2] dated 7 February 200 5 [3] and 16 May 200 5 [4] of the RegionalTrial Court (RTC) of Malolos, Bulacan, in Civil Case No. 869-M-2000.

The undisputed factual and procedural antecedents of this case are as follows:

On 29 December 2000, petitioner Republic of the Philippines, represented by the TollRegulatory Board (TRB), filed with the RTC a Consolidated Complaint for Expropriation againstlandowners whose properties would be affected by the construction, rehabilitation and expansionof the North Luzon Expressway. The suit was docketed as Civil Case No. 869-M-2000 and raffled toBranch 85, Malolos, Bulacan. Respondent Holy Trinity Realty and Development Corporation (HTRDC)was one of the affected landowners.

On 18 March 2002, TRB filed an Urgent Ex-Parte Motion for the issuance of a Writ ofPossession, manifesting that it deposited a sufficient amount to cover the payment of 100% of thezonal value of the affected properties, in the total amount of P28,406,700.00, with the Land Bankof the Philippines, South Harbor Branch (LBP-South Harbor), an authorized governmentdepository. TRB maintained that since it had already complied with the provisions of Section 4of Republic Act No. 897 4 [5] in relation to Section 2 of Rule 67 of the Rules of Court, theissuance of the writ of possession becomes ministerial on the part of the RTC.

The RTC issued, on 19 March 2002, an Order for the Issuance of a Writ of Possession, aswell as the Writ of Possession itself. HTRDC thereafter moved for the reconsideration of the 19March 2002 Order of the RTC.

On 7 October 2002, the Sheriff filed with the RTC a Report on Writ of Possession stating,among other things, that since none of the landowners voluntarily vacated the properties subjectof the expropriation proceedings, the assistance of the Philippine National Police (PNP) would benecessary in implementing the Writ of Possession. Accordingly, TRB, through the Office of theSolicitor General (OSG), filed with the RTC an Omnibus Motion praying for an Order directing thePNP to assist the Sheriff in the implementation of the Writ of Possession. On 15 November 2002,the RTC issued a n Order directing the landowners to file their comment on TRBs Omnibus Motion.
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On 3 March 2003, HTRDC filed with the RTC a Motion to Withdraw Deposit, praying that therespondent or its duly authorized representative be allowed to withdraw the amountof P 22,968,000.00, out of TRBs advance deposit of P28,406,700.00 with LBP-South Harbor,including the interest which accrued thereon. Acting on said motion, the RTC issued an Orderdated 21 April 2003, directing the manager of LBP-South Harbor to release in favor of HTRDC theamount ofP22,968,000.00 since the latter already proved its absolute ownership over the subjectproperties and paid the taxes due thereon to the government. According to the RTC, (t)he issuehowever on the interest earned by the amount deposited in the bank, if there is any, should stillbe threshed out. [6]

On 7 May 2003, the RTC conducted a hearing on the accrued interest, after which, it

directed the issuance of an order of expropriation, and granted TRB a period of 30 days toinquire from LBP- South Harbor whether the deposit made by DPWH with said bank relative to theseexpropriation proceedings is earning interest or not. [7]

The RTC issued an Order, on 6 August 2003, direct ing the appearance of LBP AssistantVice-President Atty. Rosemarie M. Osoteo and Department Manager Elizabeth Cruz to testify onwhether the Department of Public Works and Highways (DPWHs) expropriation account with the bankwas earning interest. On 9 October 2003, TRB instead submitted a Manifestation to which wasattached a letter dated 19 August 2003 by Atty. Osoteo stating that the DPWH ExpropriationAccount was an interest bearing current account.

On 11 March 2004, the RTC issued an Order resolving as follows the issue of ownership ofthe interest that had accrued on the amount deposited by DPWH in its expropriation currentaccount with LBP-South Harbor:

WHEREFORE, the interest earnings from the deposi t of P22,968,000.00respecting one hundred (100%) percent of the zonal value of the affectedproperties in this expropriation proceedings under the principle of accession areconsidered as fruits and should properly pertain to the herein defendant/propertyowner [HTRDC]. Accordingly, the Land Bank as the depositary bank in thisexpropriation proceedings is (1) directed to make the necessary computation of theaccrued interest of the amount of P22,968,000.00 from the time it was deposited upto the time it was released to Holy Trinity Realty and Development Corp. andthereafter (2) to release the same to the defendant Holy Trinity DevelopmentCorporation through its authorized representative . [8]

TRB filed a Motion for Reconsideration of the afore-quoted RTC Order, contending that thepayment of interest on money deposited and/or consigned for the purpose of securing a writ ofpossession was sanctioned neither by law nor by jurisprudence.

TRB filed a Motion to Implement Order dated 7 May 2003, which directed the issuance of anorder of expropriation. On 5 November 2004, the RTC issued an Order of Expropriation.

On 7 February 2005, the RTC likewise granted TRBs Motion for Reconsideration. The RTCruled that the issue as to whether or not HTRDC is entitled to payment of interest should beventilated before the Board of Commissioners which will be created later for the determination ofjust compensation.

Now it was HTRDCs turn to file a Motion for Reconsideration of the latest Order of theRTC. The RTC, however, denied HTRDCs Moti on for Reconsideration in an Order dated 16 May 2005.

HTRDC sought recourse with the Court of Appeals by filing a Petitionfor Certiorari , docketed as CA-G.R. SP No. 90981. In its Decision, promulgated on 21 April2006, the Court of Appeals vacated the Orders dated 7 February 2005 and 16 May 2005 of the RTC,and reinstated the Order dated 11 March 2004 of the said trial court wherein it ruled that theinterest which accrued on the amount deposited in the expropriation account belongs to HTRDC byvirtue of accession. The Court of Appeals thus declared:

WHEREFORE, the foregoing premises considered, the assailed Orders dated 07February and 16 May 2005 respectively of the Regional Trial Court of Malolos,Bulacan (Branch 85) are hereby VACATED and SET ASIDE. Accordingly, the Orderdated 11 March 2004 is hereby reinstated . [9]

From the foregoing, the Republic, represented by the TRB, filed the present Petition forReview on Certiorari , steadfast in its stance that HTRDC is entitled only to an amountequivalent to the zonal value of the expropriated property, nothing more and nothingless. [10] According to the TRB, the owner of the subject properties is entitled to an exactamount as clearly defined in both Section 4 of Republic Act No. 8974, which reads:
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Section 4 . Guidelines for Expropriation Proceedings . Whenever it is

necessary to acquire real property for the right-of-way, site or location for anynational government infrastructure project through expropriation, the appropriateimplementing agency shall initiate the expropriation proceedings before the propercourt under the following guidelines:

(a) Upon the filing of the complaint, and after due notice to the

defendant, the implementing agency shall immediately pay the owner of the propertythe amount equivalent to the sum of (1) one hundred (100%) percent of the value ofthe property based on the current relevant zonal valuation of the Bureau ofInternal Revenue (BIR) ; and (2) the value of the improvements and/or structures asdetermined under Section 7 hereof.

and Section 2, Rule 67 of the Rules of Court, which provides:

Sec. 2. Entry of plaintiff upon depositing value with authorizedgovernment depositary . Upon the filing of the complaint or at anytimethereafter and after due notice to the defendant, the plaintiff shall have theright to take or enter upon the possession of the real property involved if hedeposits with the authorized government depositary an amount equivalent to theassessed value of the property for purposes of taxation to be held by such banksubject to the orders of the court. Such deposit shall be in money, unless inlieu thereof the court authorizes the deposit of a certificate of deposit of a

government bank of the Republic of the Philippines payable on demand to theauthorized government depositary.

The TRB reminds us that there are two stages [11] in expropriation proceedings, thedetermination of the authority to exercise eminent domain and the determination of justcompensation. The TRB argues that it is only during the second stage when the court will appointcommissioners and determine claims for entitlement to interest, citing Land Bank of thePhilippines v. Wycoc o [12] and National Power Corporation v. Angas . [13]

The TRB further points out that the expropriation account with LBP-South Harbor is not inthe name of HTRDC, but of DPWH. Thus, the said expropriation account includes the compensationfor the other landowners named defendants in Civil Case No. 869-M-2000, and does not exclusivelybelong to respondent.

At the outset, we call attention to a significant oversight in the TRBs line ofreasoning. It failed to distinguish between the expropriation procedures under Republic Act No.

8974 and Rule 67 of the Rules of Court. Republic Act No. 8974 and Rule 67 of the Rules of Courtspeak of different procedures, with the former specifically governing expropriation proceedingsfor national government infrastructure projects. Thus, in Republic v. Gingoyon , [14] we held:

There are at least two crucial differences between the respectiveprocedures under Rep. Act No. 8974 and Rule 67. Under the statute, the Governmentis required to make immediate payment to the property owner upon the filing of thecomplaint to be entitled to a writ of possession, whereas in Rule 67, theGovernment is required only to make an initial deposit with an authorizedgovernment depositary. Moreover, Rule 67 prescribes that the initial deposit beequivalent to the assessed value of the property for purposes of taxation, unlikeRep. Act No. 8974 which provides, as the relevant standard for initialcompensation, the market value of the property as stated in the tax declaration orthe current relevant zonal valuation of the Bureau of Internal Revenue (BIR),whichever is higher, and the value of the improvements and/or structures using thereplacement cost method.

x x x x

Rule 67 outlines the procedure under which eminent domain may be exercisedby the Government. Yet by no means does it serve at present as the solitaryguideline through which the State may expropriate private property. For example,Section 19 of the Local Government Code governs as to the exercise by localgovernment units of the power of eminent domain through an enabling ordinance. Andthen there is Rep. Act No. 8974, which covers expropriation proceedings intendedfor national government infrastructure projects.

Rep. Act No. 8974, which provides for a procedure eminently more favorableto the property owner than Rule 67, inescapably applies in instances when the
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national government expropriates property for national government infrastructureprojects. Thus, if expropriation is engaged i n by the national government forpurposes other than national infrastructure projects, the assessed value standardand the deposit mode prescribed in Rule 67 continues to apply.

There is no question that the proceedings in this case deal with the expropriation ofproperties intended for a national government infrastructure project. Therefore, the RTC

correctly applied the procedure laid out in Republic Act No. 8974, by requiring the deposit ofthe amount equivalent to 100% of the zonal value of the properties sought to be expropriatedbefore the issuance of a writ of possession in favor of the Republic.

The controversy, though, arises not from the amount of the deposit, but as to theownership of the interest that had since accrued on the deposited amount.

Whether the Court of Appeals was correct in holding that the interest earned by thedeposited amount in the expropriation account would accrue to HRTDC by virtue of accession,hinges on the determination of who actually owns the deposited amount, since, under Article 440of the Civil Code, the right of accession is conferred by ownership of the principal property:

Art. 440. The ownership of property gives the right by accession toeverything which is produced thereby, or which is incorporated or attached thereto,either naturally or artificially.

The principal property in the case at bar is part of the deposited amount in theexpropriation account of DPWH which pertains particularly to HTRDC. Such amount, determined tobe P22,968,000.00 of the P28,406,700.00 total deposit, was already ordered by the RTC to bereleased to HTRDC or its authorized representative. The Court of Appeals further recognized thatthe deposit of the amount was already deemed a constructive delivery thereof to HTRDC:

When the [herein petitioner] TRB deposited the money as advance paymentfor the expropriated property with an authorized government depositary bank forpurposes of obtaining a writ of possession, it is deemed to be a constructivedelivery of the amount c orresponding to the 100% zonal valuation of theexpropriated property. Since [HTRDC] is entitled thereto and undisputably theowner of the principal amount deposited by [herein petitioner] TRB, conversely,the interest yield, as accession, in a bank deposit should likewise pertain to theowner of the money deposited . [15]

Since the Court of Appeals found that the HTRDC is the owner of the deposited amount,

then the latter should also be entitled to the interest which accrued thereon.

We agree with the Court of Appeals, and find no merit in the instant Petition.

The deposit was made in order to comply with Section 4 of Republic Act No. 8974, whichrequires nothing less than the immediate payment of 100% of the value of the property, based onthe current zonal valuation of the BIR, to the property owner. Thus, going back to our rulingin Republic v. Gingoyo n [16] :

It is the plain intent of Rep. Act No. 8974 to supersede the system ofdeposit under Rule 67 with the scheme of immediate payment in cases involvingnational government infrastructure projects. The following portion of the Senatedeliberations, cited by PIATCO in its Memorandum, is worth quoting to cogitate onthe purpose behind the plain meaning of the law:

THE CHAIRMAN (SEN. CAYETANO). x x x Because the Senatebelieves that, you know, we have to pay the landowners immediately

not by treasury bills but by cash.

Since we are depriving them, you know, upon payment, no, ofpossession, we might as well pay them as much, no, hindi lang 50percent.

x x x x

THE CHAIRMAN (REP. VERGARA). Accepted.

x x x x
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THE CHAIRMAN (SEN. CAYETANO). Oo. Because this is reallyin favor of the landowners, e.

THE CHAIRMAN (REP. VERGARA). Thats why we need to reallysecure the availability of funds.

x x x x

THE CHAIRMAN (SEN. CAYETANO). No, no.Its the same. It

says here: iyong first paragraph, diba ? Iyong zonal talagangmagbabayad muna . In other words, you know, there must be apayment kaagad . (TSN, Bicameral Conference on the DisagreeingProvisions of House Bill 1422 and Senate Bill 2117, August 29,2000, pp. 14-20)

x x x x

THE CHAIRMAN (SEN. CAYETANO). Okay, okay, no. Unang-una ,it is not deposit, no. Its payment.

REP. BATERINA. Its payment, ho, payment.

The critical factor in the different modes of effecting delivery which gives legal effectto the act is the actual intention to deliver on the part of the party making such

delivery .[17]

The intention of the TRB in depositing such amount through DPWH was clearly tocomply with the requirement of immediate payment in Republic Act No. 8974, so that it couldalready secure a writ of possession over the properties subject of the expropriation and commenceimplementation of the project. In fact, TRB did not object to HTRDCs Motion to Withdraw Depositwith the RTC, for as long as HTRDC shows (1) that the property is free from any lien orencumbrance and (2) that respondent is the absolute owner thereof . [18]

A close scrutiny of TRBs arguments would further reveal that it does not directlychallenge the Court of Appeals determinati ve pronouncement that the interest earned by theamount deposited in the expropriation account accrues to HTRDC by virtue of accession. TRB onlyasserts that HTRDC is entitled only to an amount equivalent to the zonal value of theexpropriated property, nothing more and nothing less.

We agree in TRBs statement since it is exactly how the amount of the immediate paymentshall be determined in accordance with Section 4 of Republic Act No. 8974, i.e. , an amountequivalent to 100% of the zonal value of the expropriated properties. However, TRB alreadycomplied therewith by depositing the required amount in the expropriation account of DPWH

with LBP-South Harbor. By depositing the said amount, TRB is already considered to have paid thesame to HTRDC, and HTRDC became the owner thereof. The amount earned interest after the deposit;hence, the interest should pertain to the owner of the principal who is already determined asHTRDC. The interest is paid by LBP-South Harbor on the deposit, and the TRB cannot claim that itpaid an amount more than what it is required to do so by law.

Nonetheless, we find it necessary to emphasize that HTRDC is determined to be the ownerof only a part of the amount deposited in the expropriation account, in the sumof P22,968,000.00 . Hence, it is entitled by right of accession to the interest that had accruedto the said amount only.

We are not persuaded by TRBs citation of National Power Corporation v. Angas and LandBank of the Philippines v. Wycoco , in support of its argument that the issue on interest ismerely part and parcel of the determination of just compensation which should be determined inthe second stage of the proceedings only. We find that neither case is applicable herein.

The issue in Angas is whether or not, in the computation of the legal rate of interest on

just compensation for expropriated lands, the applicable law is Article 2209 of the Civil Codewhich prescribes a 6% legal interest rate, or Central Bank Circular No. 416 which fixed the legalrate at 12% per annum. We ruled in Angas that since the kind of interest involved therein isinterest by way of damages for delay in the payment thereof, and not as earnings from loans orforbearances of money, Article 2209 of the Civil Code prescribing the 6% interest shallapply. In Wycoco , on the other hand, we clarified that interests in the form of damages cannotbe applied where there is prompt and valid payment of just compensation.

The case at bar, however, does not involve interest as damages for delay in payment ofjust compensation. It concerns interest earned by the amount deposited in the expropriationaccount.
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Under Section 4 of Republic Act No. 8974, the implementing agency of the government paysjust compensation twice: (1) immediately upon the filing of the complaint, where the amount to bepaid is 100% of the value of the property based on the current relevant zonal valuation of theBIR ( initial payment ); and (2) when the decision of the court in the determination of justcompensation becomes final and executory, where the implementing agency shall pay the owner thedifference between the amount already paid and the just compensation as determined by the court( final payment ) . [19]

HTRDC never alleged that it was seeking interest because of delay in either of the twopayments enumerated above. In fact, HTRDCs cause of action is based on the prompt initialpayment of just compensation, which effectively transferred the ownership of the amount paid toHTRDC. Being the owner of the amount paid, HTRDC is claiming, by the right of accession, theinterest earned by the same while on deposit with the bank.

That the expropriation account was in the name of DPWH, and not of HTRDC, is of nomoment. We quote with approval the following reasoning of the Court of Appeals:

Notwithstanding that the amount was deposited under the DPWH account,ownership over the deposit transferred by operation of law to the [HTRDC] andwhatever interest, considered as civil fruits, accruing to the amount ofPhp22,968,000.00 should properly pertain to [HTRDC] as the lawful owner of theprincipal amount deposited following the principle of accession. Bank interestpartake the nature of civil fruits under Art. 442 of the New Civil Code. Andsince these are considered fruits, ownership thereof should be due to the owner ofthe principal. Undoubtedly, being an attribute of ownership, the [HTRDCs] right

over the fruits ( jus fruendi ), that is the bank interests, must be respected .[20]

Considering that the expropriation account is in the name of DPWH, then, DPWH should atmost be deemed as the trustee of the amounts deposited in the said accounts irrefragably intendedas initial payment for the landowners of the properties subject of the expropriation, until saidlandowners are allowed by the RTC to withdraw the same.

As a final note, TRB does not object to HTRDCs withdrawal of the amountof P22,968,000.00 from the expropriation account, provided that it is able to show (1) that theproperty is free from any lien or encumbrance and (2) that it is the absolute ownerthereof . [21] The said conditions do not put in abeyance the constructive delivery of the saidamount to HTRDC pending the latters compliance therewith. Article 118 7 [22] of the Civil Codeprovides that the effects of a conditional obligation to give, once the condition has beenfulfilled, shall retroact to the day of the constitution of the obligation. Hence, when HTRDCcomplied with the given conditions, as determined by the RTC in its Orde r [23] dated 21 April 2003,the effects of the constructive delivery retroacted to the actual date of the deposit of the

amount in the expropriation account of DPWH.

WHEREFORE, the Petition is DENIED. The Court of Appeals Decision dated 21 April 2006 inCA-G.R. SP No. 90981, which set aside the 7 February 2005and 16 May 2005 Orders of the RegionalTrial Court of Malolos, Bulacan, is AFFIRMED . No costs.

BANK OF THE PHILIPPINE ISLANDS, petitioner, vs . COURT OF APPEALS and NATIONAL POWERCORPORATION, respondents .

D E C I S I O NYNARES-SANTIAGO, J .:

This is a petition for review under Rule 45 of the Rules of Court, assailing the Decisiondated August 30, 2002 of the Court of Appeals in CA-G.R. CV No. 69402 , [1] which reversed theDecision of the Regional Trial Court of Imus, Cavite, Branch 21 , [2] reducing from P10,000.00 toP3,000.00 the amount of just compensation for the expropriated land of petitioner; and decreasingfrom P10,000.00 to P3,000.00 the commissioners fee for each of the three commissioners.

On April 15, 1996, private respondent National Power Corporation (NAPOCOR) filed a Complaintfor Eminent Domain, seeking to expropriate a portion of petitioner Bank of the Philippine

Islands (BPI) property located in Barrio Bucal, Dasmarias, Cavite, for the purpose ofconstructing and maintaining its Dasmarias-Zapote 230 KV Transmission Line Project.

On August 1, 1996, pursuant to Section 2 of Rule 67 of the Rules of Court , [3] NAPOCORdeposited with the Philippine National Bank, NPC Branch, in Quezon City, the amount of P3,013.60,equivalent to the assessed value of the property. On August 15, 1996, NAPOCOR notified BPI,through registered mail, of its intention to take possession of the property. Thereafter, thetrial court granted their urgent ex-parte motion for the issuance of a writ of possession andauthorized them to enter and take possession of the premises . [4]

Previously, petitioner BPI filed a motion for bill of particulars which the trial courtdenied . [5] Consequently, BPI moved for the dismissal of the case and the same was granted withoutprejudice to its reinstatement . [6] Private respondent NAPOCOR filed a motion forreconsideration. The trial court granted the motion and reinstated the case . [7]
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In its Order dated November 28, 1997 , [8] the trial court designated three commissioners todetermine the just value of the property subject of the expropriation in this case, namely: Mr.Lamberto C. Parra, Provincial Assessor of Cavite; Mr. Regalado Andaya, Municipal Assessor ofDasmarias, Cavite; and Mr. Rodolfo D. Leonen, Defendants Representative.

Accordingly, on February 26, 1999, the Commissioners submitted its Report which assessed thesum of the area of the property taken and the estimated value of just compensation at 75.34square meters x P10,000.00 = P753,400.00, and recommended an additional payment of P524,660.00 asseverance damage, or a total of P1,278,060.00 . [9] Likewise, they submitted an undatedCommissioners Valuation Report citing the Market Data Approach as the method used in arrivingat the amount of P10,000.00 per square meter as just compensation, whereby the value of the landis based on sales and listing of comparable property registered within the immediate vicinity. [10]

On August 5, 1999, the trial court rendered judgment in favor of BPI, the dispositiveportion of which reads:WHEREFORE, judgment is hereby rendered declaring that the portion of the parcel of land situatedin Bucal, Dasmarias, Cavite, embraced in, and covered by, Transfer Certificate of Title No. T-292517 of the Registry of Deed of Cavite consisting of 75.34 square meters to have been lawfullyexpropriated and now belongs to the plaintiff to be used for the construction and maintenance ofits Dasmarias-Zapote 230 KV Transmission Line Project.The plaintiff is hereby ordered to pay to the defendant, through the Branch Clerk of this Court,the fair market value of the property at P10,000.00 per square meter or a total sum ofP753,400.00 with legal rate of interest reckoned from the date of possession by the plaintiff.The commissioners fee is hereby fixed at P10,000.00 each to be paid by the plaintiff through theBranch Clerk of this Court.The Clerk of this Court is ordered to have a certified copy of this decision be registered in theoffice of the Register of Deeds of Cavite.

SO ORDERED .[11]

After the denial of its motion for reconsideration, NAPOCOR appealed to the Court ofAppeals, which ruled as follows:WHEREFORE, the appealed judgment is hereby REVERSED. A new one is entered ordering plaintiff-appellant NAPOCOR to pay defendant-appellant BPI the amount of P3,000.00 per square meter as justcompensati on for the expropriated land; and P3,000.00 commissioners fee to each of the three (3)commissioners.SO ORDERED . [12]

Petitioner BPI moved for the reconsideration of the decision of the Court of Appeals, butthe same was denied for lack of merit.

Hence, this petition for review based on the sole issue of whether the Court of Appealsgravely abused its discretion and seriously erred in fixing the just compensation for the subjectproperty at P3,000.00 per square meter.

In petitions for review on certiorari under Rule 45 of the Rules of Court, the general ruleis that only questions of law may be raised by the parties and passed upon by this Court.However, this rule admits of exceptions, to wit:(a) where there is grave abuse of discretion; (b) when the finding is grounded entirely on

speculations, surmises or conjectures; (c) when the inference made is manifestly mistaken, absurdor impossible; (d) when the judgment of the Court of Appeals was based on a misapprehension offacts; (e) when the factual findings are conflicting; (f) when the Court of Appeals, in makingits findings, went beyond the issues of the case and the same are contrary to the admissions ofboth appellant and appellee; (g) when the Court of Appeals manifestly overlooked certain relevantfacts not disputed by the parties and which, if properly considered, would justify a differentconclusion; and, (h) where the findings of fact of the Court of Appeals are contrary to those ofthe trial court, or are mere conclusions without citation of specific evidence, or where thefacts set forth by the petitioner are not disputed by the respondent, or where the findings offact of the Court of Appeals are premised on the absence of evidence and are contradicted by theevidence on record . [13] (Emphasis provided)

The case at bar falls under one of the exceptions, i.e. , where the findings of fact of theCourt of Appeals are contrary to those of the trial court.

Petitioner asserts that the finding of just compensation by the court-appointedcommissioners was based on clear evidence of prior sales and acceptable market valuationmethods. Petitioner likewise avers that the valuation made by the commissioners must be accordedweight. Likewise it argues that NAPOCOR is estopped from questioning the valuation of the land

considering that its own nominee concurred with the findings of the other commissioners.Just compensation is defined as the full and fair equivalent of the property taken from its

owner by the expropriator. The measure is not the takers gain, but the owners loss . [14] Tocompensate is to render something which is equal in value to that taken or received. The wordjust is used to intensify the meaning of the word compensation; to convey the idea that theequivalent to be rendered for the property taken shall be real, substantial, full, ample. [15]

In eminent domain or expropriation proceedings, the general rule is that the justcompensation which the owner of condemned property is entitled to is the market value. Marketvalue is that sum of money which a person desirous but not compelled to buy, and an ownerwilling but not compelled to sell, would agree on as a price to be given and receivedtherefor. [16]
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After a careful perusal of the records, we find no reason to disturb this finding of fact bythe Court of Appeals, sufficiently supported as it is, by the evidence on record . [17]

We find that the rate imposed by the Commissioners is unsubstantiated. No officialdocuments were presented to reflect the true market value of the subject lots in the surroundingarea. The Commissioners Report merely states that the value of the land is based on sales andlistings of comparable property registered within the immediate vicinity without any evidence tosupport the market data provided.

In this instance, we accord more weight to Resolution No. 08-95 promulgated by the

Provincial Appraisal Committee of Cavite held at the Office of the Provincial Assessor on October25, 1995 . [18] Said Resolution pegs as fair and reasonable the value of P3,000.00 per square meterof all the lots in the Municipality of Dasmarias, specifically along General Aguinaldo Highway.

The just compensation is determined as of the date of the taking of the property or thefiling of the complaint whichever came first . [19] NAPOCOR filed the complaint on April 15, 1996. Aperiod of 6 months has elapsed from the valuation of the Provincial Assessors and the filing ofthe complaint. We note the considerable discrepancy between the valuation of the former and thatof the Commissioners. Indeed, the appellate court computed the increase of the valuation to be233%.

The Court of Appeals pointed out that more than 70% of the 200 lot owners have entered intocompromise agreements and accepted the price set by the Provincial Appraisal Committee ofCavite. It is also worthy to note that one of the Commissioners in this case, Mr. Lamberto C.Parra, was the Chairman Provincial Assessor and signatory of the same Resolution.

WHEREFORE, the petition for review on certiorari is DENIED. The Decision of the Court ofAppeals in CA-G.R. CV No. 69402, which reversed the decision of the Regional Trial Court of Imus,Cavite, Branch 21 in Civil Case No. 1298-96, is AFFIRMED in toto .

SO ORDERED.

Davide, Jr., C.J., ( Chairman ), Quisumbing, Carpio, and Azcuna, JJ., concur.

FERNANDO GABATIN, JOSE GABATIN AND ALBERTO GABATIN, petitioners, vs . LAND BANK OF THEPHILIPPINES, respondents .

D E C I S I O NCHICO-NAZARIO, J .:

Before Us is a petition for Review on Certiorari under Rule 45 of the Rules of Court seekingto set aside the Decision and Resolution dated 15 September 2000 and 03 May 2001, respectively,of the Court of Appeals in CA- G.R. CV No. 61240, entitled, Fernando Gabatin, Alberto Gabatin andJose Gabatin, petitioners-appellees v. Department of Agrarian Reform, respondent . The Decisionset aside the order of the Special Agrarian Court (SAC) dated 04 May 1998, and the Resolutiondenied petitioners motion for reconsideration.

Petitioners Fernando, Alberto, and Jose, all surnamed Gabatin, were registered owners ofthree parcels of rice land situated in Sariaya, Quezon, under separate certificates of title,namely: Transfer Certificate of Title (TCT) No. T-107863 (0.3965 hectare) , [1] TCT No. T-107864(1.4272 hectares ) [2] and TCT No. T-107865 (1.4330 hectares) . [3] In 1989, the properties, pursuantto the Land Reform Program of the Government as defined under Presidential Decree (P.D.) No.

2 7[4]

and Executive Order (E.O.) No. 228 ,[5]

were placed by the Department of Agrarian Reform (DAR)under its Operation Land Transfer (OLT). The properties were distributed to deserving farmerbeneficiaries through the issuance of emancipation patents. [6]

The formula prescribed under P.D. No. 27 and E.O. No. 22 8 [7] for computing the Land Value (LV)of rice lands is 2.5 x Average Gross Production (AGP) x Government Support Price (GSP).Otherwise stated, the formula is as follows:

LV = 2.5 x AGP x GSPThe AGP for the lots covered under TCTs No. T-107863 and No. T-107864 was at 94.64 cavans

per hectare while that of TCT No. T-107865 was at 118.47 . [8] The DAR and respondent Land Bank ofthe Philippines (Land Bank), fixed the GSP at P35 which was the price of each cavan of palay in1972, when the lots were deemed taken for distribution. Hence, respondents valuation of theproperties:

Acquired Property Area in hectares Land Value TCT No. T-107864 1.4272 P 11,818.47TCT No. T-107865 1.4330 14,854.66TCT No. T-107863 .39653,283.4 1 [9]

= == = = =

TOTAL P29,956.54

Petitioners rejected the valuation.On 16 April 1996, petitioners filed a case for the determination of just compensation of

their lands with the Regional Trial Court (RTC) of Lucena City, naming the DAR and Land Bank asrespondents . [10] The case was docketed as Civil Case No. 96-57 and raffled to Branch 56, thedesignated Special Agrarian Court (SAC). Petitioners prayed that the just compensation be fixedin accordance with the formula in P.D. No. 27, with 6% compounded annual interest to be paidbased on the price of palay at the time of payment and not at the time of taking. The SAC, in
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its order , [11] fixed the GSP of palay at the current price of P400 as basis for the computation ofthe payment, and not the GSP at the time of taking, thus:

TCT T-107863 P 37,524.76TCT T-107864 P 135,070.20TCT T-107865 P 169,767.50

= = = = = = =TOTAL P 342,362.4 6 [12]

Respondent Land Bank filed a motion for reconsideratio n [13] dated 04 June 1998 which was

denied by the trial court in its Orde r[14]

dated 23 July 1998. Of the two respondents in thetrial court, only Land Bank appealed to the Court of Appeals under Rule 41 of the Rules ofCourt . [15]

On 10 July 2000, petitioners filed a motion to remand the records to the SAC and to dismissthe appeal on the grounds that the decision of the SAC became final and executory, and that theappeal raised issues involving purely questions of law. They maintained that the appeal ofrespondent, not being an indispensable party, did not stop the running of the period to appeal,thereby making the decision final. They also claimed that the appeal should be dismissed becausethe proper venue is the Supreme Court via a petition for review under Rule 45, and not the Courtof Appeals . [16]

On 15 September 2000, the Court of Appeals rendered a decision denying the motion to dismissand reversing the decision of the SAC. It ruled it has jurisdiction over the appeal reasoningthat its jurisdiction over appeals from RTCs cannot simply be disregarded on the submission thatthe issues presented before it are purely legal in nature. As to the personality of Land Bank tofile the said appeal, the Court of Appeals made a finding that respondent was a necessary party;hence, it had a personality to appeal the SAC decision. It also fixed the GSP at the time oftaking of the land in 1972, instead of the GSP at the time of payment. Thus:

Based on the foregoing, the appropriate land valuation formula for the appellees property shouldbe two and a half (2) multiplied by the average gross production multiplied by the price ofpalay (P35.00), (P.D. No. 27). In addition, the said amount shall accumulate compounded interestat 6% per annum, pursuant to A.O. No. 13, (1994) (supra) computed from the time of taking, i.e. ,when P.D. No. 27 came into effect in October, 1972, until the full amount is paid.. . .WHEREFORE, premises considered, the instant appeal is hereby GRANTED. The appealed order of theRegional Trial Court below is hereby REVERSED and SET ASIDE. In lieu thereof, judgment is herebyrendered fixing the just compensation due to the petitioners-appellees based on the price ofpalay per cavan at the time the subject properties were taken, under the formula abovementioned,with interest at 6% per annum, compounded annually, starting October, 1972 until the full amountis paid . [17]

The petitioners motion for reconsideration was likewise denied . [18] Hence, this petition for review. The following issues were raised:

FIRST: Is the special mode of appeal by petition for review from a decision of the SpecialAgrarian Court (SAC) pursuant to Section 60 of R.A. 6657 still effective as the only mode ofappeal from decisions of the SAC?

SECOND: May the Court of Appeals give due course to the appeal filed by a necessary party without being joined by the indispensable party which did not appeal the decision?

THIRD: Whether just compensation in kind (palay) at the time of the taking of the propertiesshall be appraised at the price of the commodity at the time of the taking or at the time it wasordered paid by the SAC? FIRST ISSUE

In the case of Land Bank v. De Leon [19] (hereinafter referred to as Decision), we made thedefinitive pronouncement that a petition for review under Rule 42, and not an ordinary appealunder Rule 41, is the appropriate mode of appeal on the decisions of the RTCs acting as SACs. Inthe said case, Land Bank filed a motion for reconsideration. In a resolutio n [20] dated 20 March2003 (hereinafter referred to as Resolution), we resolved the Motion for Reconsideration in thiswise:WHEREFORE, the motion for reconsideration dated October 16, 2002 and the supplement to the motionfor reconsideration dated November 11, 2002 are PARTIALLY GRANTED. While we clarify that theDecision of this Court dated September 10, 2002 stands, our ruling therein that a petition forreview is the correct mode of appeal from decisions of Special Agrarian Courts shall apply onlyto cases appealed after the finality of this Resolution . [21] (Emphasis supplied)

Herein petitioners assailed the Resolution. It is the remonstration of the petitioners thatsince the notice of appeal filed by respondent under Rule 41 was incorrect, the same did not stopthe running of the reglementary period to file a petition for review under Rule 42. Thedecision, therefore, of the SAC became final and executory and, consequently, respondent hadcompletely lost the remedy of appeal. In effect, petitioners contended that the Resolution, whenit prescribed for the prospective application of the Decision, took away their vested rights toimmediate payment of just compensation and created a second right to appeal in favor of therespondent.

On the other hand, respondent asseverates that since its appeal of the decision of theSAC, via notice of appeal under Rule 41, was perfected prior to the promulgation of theResolution, the same cannot be dismissed outright since the Resolution applies prospectively . [22]

We do not agree with the petitioners.
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It bears noting that the Decision, which prescribed for Rule 42 as the correct mode ofappeal from the decisions of the SAC, was promulgated by this Court only on 10 September 2002,while the Resolution of the motion for reconsideration of the said case giving it a prospectiveapplication was promulgated on 20 March 2003. Respondent appealed to the Court of Appeals on 31July 1998 via ordinary appeal under Rule 41 of the Rules of Court. Though appeal under said ruleis not the proper mode of appeal, said erroneous course of action cannot be blamed onrespondent. It was of the belief that such recourse was the appropriate manner to question thedecisions of the SAC. In Land Bank v. De Leon , [23] we held:

On account of the absence of jurisprudence interpreting Sections 60 and 61 of RA 6657 regardingthe proper way to appeal decisions of Special Agrarian Courts as well as the conflictingdecisions of the Court of Appeals thereon, LBP cannot be blamed for availing of the wrong mode.Based on its own interpretation and reliance on the Buenaventura ruling, LBP acted on themistaken belief that an ordinary appeal is the appropriate manner to question decisions ofSpecial Agrarian Courts.

Thus, while the rule is that the appropriate mode of appeal from the decisions of the SAC isthrough petition for review under Rule 42, the same rule is inapplicable in the instant case.The Resolution categorically stated that said ruling shall apply only to those cases appealedafter 20 March 2003 . [24]

It is beyond cavil, therefore, that since this Court had already ruled on the prospectiveapplication of the Land Bank v. De Leon decision, said issue must be laid to rest and must nolonger be disturbed in this decision. Stare decisis et non quieta movere . [25] Stand by thedecisions and disturb not what is settled. It is a very desirable and necessary judicialpractice that when a court has laid down a principle of law as applicable to a certain state offacts, it will adhere to that principle and apply it to all future cases where the facts aresubstantially the same, absent any countervailing considerations. [26] An in-depth study of the

case at bar clearly shows that it does not fall under the exception of the stare decisis rule.SECOND ISSUEPetitioners find fault in the decision of the Court of Appeals which ruled that Land Bank

has the right to appeal on the ground that it is a necessary party. It is argued that DAR, beingthe only agency authorized by law to represent the Republic of the Philippines in the acquisitionof private agricultural lands for agrarian reform, as stated under Section 51(1) of Republic ActNo. 3844 and amended by Rep. Act No. 6389, is an indispensable party in expropriationproceedings. Petitioners allege that Land Bank is only a necessary party, thus, the Court ofAppeals should have dismissed the appeal pursuant to MWSS v. Court of Appeals [27] which statesthat when indispensable parties are not before the courts, the action should be dismissed.Hence, petitioners concluded that the Court of Appeals acted without jurisdiction when it gavedue course and decided the appeal filed by Land Bank, a necessary party, without being joined bythe DAR, the indispensable party.

Respondent answered that it can file an appeal independently of the DAR in land valuation orin just compensation cases arising from the agrarian reform program. In support of its argument,respondent avers that it is an agency created primarily to provide financial support in allphases of agrarian reform pursuant to Section 74 of Rep. Act No. 3844 and Section 64 of Rep. Act

No. 6657. It is also vested with the primary responsibility and authority in the valuation andcompensation of covered landholdings to carry out the full implementation of the Agrarian ReformProgram . [28] It may agree with the DAR and the landowner as to the amount of just compensation tobe paid to the latter and may also disagree with them and bring the matter to court for judicialdetermination . [29]

Respondent cited jurisprudence pronouncing that it is not just a mere rubber stamp but anecessary cog [30] in agrarian reform as it does not just exercise a ministerial function but hasan independent discretionary role [31] in the valuation process of the land covered by landreform. Respondent further stressed that this Court, in the Decision, has recognized its rightto appeal from an adverse decision in a just compensation case.

We agree with the respondent.The Rules of Court provides that parties in interest without whom no final determination can

be had of an action shall be joined either as plaintiffs or defendants . [32] In BPI v. Court ofAppeals , [33] this Court explained:. . . An indispensable party is one whose interest will be affected by the courts action in thelitigation, and without whom no final determination of the case can be had. The partys interestin the subject matter of the suit and in the relief sought are so inextricably intertwined with

the other parties that his legal presence as a party to the proceeding is an absolutenecessity. In his absence there cannot be a resolution of the dispute of the parties before thecourt which is effective, complete, or equitable.Conversely, a party is not indispensable to the suit if his interest in the controversy orsubject matter is distinct and divisible from the interest of the other parties and will notnecessarily be prejudiced by a judgment which does complete justice to the parties in court. Heis not indispensable if his presence would merely permit complete relief between him and thosealready parties to the action or will simply avoid multiple litigation.Without the presence of indispensable parties to a suit or proceeding, judgment of a court cannotattain real finality. (emphasis supplied)

It must be observed that once an expropriation proceeding for the acquisition of privateagricultural lands is commenced by the DAR, the indispensable role of Land Bank begins.
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Even in the preliminary stage of the valuation and the determination of just compensation,the respondents task is inseparably int erwoven with that of the DAR, thus:. . . under the law, the Land Bank of the Philippines is charged with the initial responsibilityof determining the value of lands placed under agrarian reform and compensation to be paid fortheir taking (Section 1, E.O. 405). Through the notice sent to the landowner pursuant to 16(a)of R.A. No. 6657, the DAR makes an offer. In case the landowner rejects the offer, a summaryadministrative proceeding is held and afterward, the provincial (PARAD), the regional (RARAD) orthe central (DARAB) adjudicator as the case maybe, depending on the value of the land, fixes the

price to be paid for the land. If the landowner does not agree to the price fixed, he may bringthe matter to the RTC acting as Special Agrarian Court . [34] E.O. No. 405 provides that the DAR is required to make use of the determination of the land

valuation and compensation by the Land Bank as the latter is primarily responsible for thedetermination of the land valuation and compensation for all private lands under Rep. Act No.6657 . [35]

In Sharp International Marketing v. Court of Appeals , [36] this Court even went on to say thatwithout the Land Bank, there would be no amount to be established by the government for thepayment of just compensation, thus:As may be gleaned very clearly from EO 229, the LBP is an essential part of the government sectorwith regard to the payment of compensation to the landowner. It is, after all, theinstrumentality that is charged with the disbursement of public funds for purposes of agrarianreform. It is therefore part, an indispensable cog, in the governmental machinery that fixes anddetermines the amount compensable to the landowner. Were LBP to be excluded from that intricate,if not sensitive, function of establishing the compensable amount, there would be no amount tobe established by the government as required in Section 6 of EO 229. (emphasis supplied)

More telling is the fact that Land Bank can disagree with the decision of the DAR in the

determination of just compensation, and bring the matter to the RTC designated as a SAC for finaldetermination of just compensation . [37] The foregoing clearly shows that there would never be a judicial determination of just

compensation absent respondent Land Banks participation. Logically, it follows that respondentis an indispensable party in an action for the determination of just compensation in casesarising from agrarian reform program.

Assuming arguendo that respondent is not an indispensable party but only a necessary partyas is being imposed upon us by the petitioners, we find the argument of the petitioners that onlyindispensable parties can appeal to be incorrect.

There is nothing in the Rules of Court that prohibits a party in an action before the lowercourt to make an appeal merely on the ground that he is not an indispensable party. The Rules ofCourt does not distinguish whether the appellant is an indispensable party or not. To avail ofthe remedy, the only requirement is that the person appealing must have a present interest in thesubject matter of the litigation and must be aggrieved or prejudiced by the judgment. [38] A party,in turn, is deemed aggrieved or prejudiced when his interest, recognized by law in the subjectmatter of the lawsuit, is injuriously affected by the judgment, order or decree . [39] The fact thata person is made a party to a case before the lower court, and eventually be made liable if the

judgment be against him, necessarily entitles him to exercise his right to appeal. To prohibitsuch party to appeal is nothing less than an outright violation of the rules on fair play.THIRD ISSUE

To determine the land value under P.D. No. 27 and E.O. No. 228, the following formula isused:

LV (land value) = 2.5 x AGP x GSPPetitioners argue that the GSP be fixed at the time of payment by SAC which was then at

P400. In support thereof, they cited the case of Land Bank v. Court of Appeals , [40] wherein LandBank was ordered to pay the land value based on the GSP at the time the Provincial AgrarianReform Adjudicators (PARAD) decision was render ed, and not at the time of the taking of theproperty. Petitioners also made reference to Article 1958 of the Civil Code which provides forthe appraisal of an interest payable in kind at the current price of the product at the time andplace of payment . [41]

Respondent counters that in keeping with settled jurisprudence, the determination ofcompensation for lands covered by P.D. No. 27 is reckoned from the time of the taking of thesame . [42] Under E.O. No. 228, 21 October 1972 was the time of taking for this was when thelandowner was effectively deprived of possession and dominion over his landholding . [43]

In the case at bar, parties are in harmony as to the AGP of the lots under consideration.The AGP for the lots covered under TCTs No. T-107863 and No. T-107864 was at 94.64 cavans perhectare, and that for the lot under TCT No. T-107865 was at 118.47 . [44]

The pith of the controversy is the determination of the GSP for one cavan of palay . Shouldthe same be based on the price at the time of taking or at the time of payment as ordered by theSAC?

We must stress, at the outset, that the taking of private lands under the agrarian reformprogram partakes of the nature of an expropriation proceeding . [45] In a number of cases, we havestated that in computing the just compensation for expropriation proceedings, it is the value ofthe land at the time of the taking, not at the time of the rendition of judgment, which should betaken into consideration . [46] This being so, then in determining the value of the land for thepayment of just compensation, the time of taking should be the basis. In the instant case, since
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the dispute over the valuation of the land depends on the rate of the GSP used in the equation,it necessarily follows that the GSP should be pegged at the time of the taking of the properties.

In the instant case, the said taking of the properties was deemed effected on 21 October1972, when the petitioners were deprived of ownership over their lands in favor of qualifiedbeneficiaries, pursuant to E.O. No. 22 8 [47] and by virtue of P.D. No. 27. [48] The GSP for one cavanof palay at that time was at P35 . [49] Prescinding from the foregoing discussion, the GSP should befixed at said rate, which was the GSP at the time of the taking of the subject properties.

Petitioners are not rendered disadvantaged by the computation inasmuch as they are entitled

to receive the increment of six percent (6%) yearly interest compounded annually pursuant to DARAdministrative Order No. 13, Series of 1994 . [50] As amply explained by this Court : [51] The purpose of AO No. 13 is to compensate the landowners for unearned interests. Had they beenpaid in 1972 when the GSP for rice and corn was valued at P35.00 and P31.00, respectively, andsuch amounts were deposited in a bank, they would have earned a compounded interest of 6% perannum. Thus, if the PARAD used the 1972 GSP, then the product of (2.5 x AGP x P35.00 or P31.00)could be multiplied by (1.06) to determine the value of the land plus the additional 6%compounded interest it would have earned from 1972.

Petitioners reliance on Land Bank v. Court of Appeals [52] where we ordered Land Bank to paythe just compensation based on the GSP at the time the PARAD rendered the decision, and not atthe time of the taking, is not well taken. In that case, PARAD, in its decision, used the GSP atthe time of payment in determining the land value. When the decision became final and executory,Land Bank, however, refused to pay the landowner arguing that the PARADs valuation was null andvoid for want of jurisdiction. We ruled therein that the PARAD has the authority to determinethe initial valuation of lands involving agrarian reform. Thus, the decision of the PARAD wasbinding on Land Bank. Land Bank was estopped from questioning the land valuation made by PARADbecause it participated in the valuation proceedings and did not appeal the said decision.

Hence, Land Bank was compelled to pay the land value based on the GSP at the time of payment.The factual milieu of the case relied upon by petitioners is different from the case atbar. In the case on hand, respondent insisted from the very start that the land valuation bebased on the GSP at the time of the taking - 1972. It stood firm on that ground. When SACordered Land Bank to pay petitioners the land value based on the GSP at the time of payment,respondent vehemently disagreed and questioned the valuation before the Court of Appeals.

WHEREFORE, we DENY the instant petition. The Decision of the Court of Appeals dated 15September 2000 and its Resolution dated 03 May 2001 in CA-G.R. CV No. 61240 are hereby AFFIRMED.No costs.

SO ORDERED.Puno, (Acting C.J.) Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
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brgy. matictic vs. elbinias

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