Delay in payment of land expropriated by gov’t an ‘injustice’ — SC

The Supreme Court (SC) stressed that an “injustice” is committed when the payment of just compensation to a landowner whose property is expropriated by the government for public use is delayed for many years.

The SC lamented: “What more injustice can be caused to a landowner who, up to the time of his death, was not able to fully enjoy the benefits of the land taken from him by the government than to shortchange him with the delay in the payment of just compensation.”

“Time, indeed, is costly to squander. Delays, justified or otherwise, have irreversible consequences,” the SC stressed in a decision written by Associate Justice Mario V. Lopez.

Case records show that in 1999 the Department of Public Works and Highways (DPWH) initiated expropriation proceedings over 7,555 square meters of land owned by Casimiro Tamparong Jr. in barangay Kauswagan in Cagayan de Oro City.

On Nov. 27, 2000, the regional trial court (RTC) issued an order of expropriation declaring the government’s lawful right to expropriate the property to be used for the Cagayan de Oro Third Bridge and Approaches project of the DPWH.

On Nov. 29, 2000, the RTC ordered the government’s takeover of Tamparong’s property.

“Years of laborious hearings and exchange of pleadings, however, ensued for the determination of the just compensation,” the records show.

Tamparong died on Dec. 3, 2018.  The just compensation for his land has not been fully paid until the time of his death.

The DPWH had initially paid P9.4 million as provisional deposit. After 10 years on Jan. 21, 2010, the RTC determined the just compensation for the land at P3,500 per square-meter and ordered the payment of legal interest until fully paid.

With no motion for reconsidered filed by either party, the Jan. 21, 2010 decision became final.  On March 7, 2013, the court issued a writ of execution indicating P27.6 million, based on Tamparong’s computation,  as the remaining amount to be paid.

On DPWH’s motion, the RTC issued an amended writ of execution which deleted the exact amount previously indicated as it reiterated its Jan. 21, 2010 resolution.

On Jan. 13, 2014, the DPWH communicated to Tamparong and indicated the remaining balance to be paid at P17.2 million including the interest of six percent annually from the time of the taking of the land until Dec. 11, 2013.

Tamparong’s lawyer Joseph M. Baduel responded as he pleaded the payment of the balance with interest at six percent per annum from the taking of the property and 12 percent annually from finality of judgment until Dec. 11, 2013.

Baduel sought the immediate payment since Tamparong, who was already over 80 years old, had a medical condition.

On June 25, 2014, the RTC issued an order.  It said: “Considering that the (Republic thru the DPWH) has been delayed in the payment of the just compensation of the property subject of this expropriation proceedings, the Court hereby ordered that the legal interest is thus fixed at 12 percent per annum and hereby orders the Republic to pay Tamparong the amount of the just compensation reckoned from the date of resolution of the Court dated Jan. 21, 2010 at 12 percent interest rate per annum less the amount already paid and received by Tamparong.”

Again, the DPWH moved for reconsideration as it insisted that the 12 percent legal interest is imposed only “in the nature of damages for delay in payment” of the just compensation. It claimed there was no delay since it had already made substantial provisional payments. Hence, it posited that the imposition of the legal interest at the rate

With its motion denied by the RTC, the DPWH elevated the issue before the Court of Appeals (CA) which affirmed the ruling of the trial court in a decision issued on May 30, 2017. DPWH filed a petition before the SC assailing the CA’s decision.

In resolving the issue, the SC said:

“Section 9, Article III of the 1987 Constitution provides that ‘no property shall be taken for public use without just compensation.’ This presupposes that the condemnor incurs delay if it does not pay the landowner the full amount of just compensation on the date of the taking.

“Ideally, thus, just compensation means full payment of the value of the property immediately upon its taking. However, the determination of just compensation is determined judicially, which more often than not, takes time after the government had already taken possession of the property.

“Consequently, in the interim, the property owner suffers, not only the deprivation of their land, but also its use, fruits, or income. To remedy the impasse, applicable laws or rules on expropriation require a provisional payment upon the date of the taking or the filing of the complaint.

“The difference then between the court-determined final amount and the provisional payment incurs legal interest in line with the constitutional mandate on eminent domain and as a basic measure of fairness, otherwise, the compensation would not be ‘just.’

“In Republic vs CA (a previous decided case), We underscored the need for the prompt payment of just compensation, including the payment of interest to compensate for any delay in giving full payment for the land already taken.

“It is undisputed that Tamparong has not yet been fully paid his just compensation because the parties are still in disagreement as to the proper computation of the remaining balance. For this reason, Tamparong is entitled to the legal interest on the unpaid balance.

“The delay in the payment of just compensation is a forbearance of money and, as such, is necessarily entitled to earn interest. Thus, the difference between the final amount as adjudged by the Court, and the initial payment made by the government — which is part and parcel of the just compensation due to the property owner – should earn legal interest as a forbearance of money.

“With respect to the amount of interest on this difference between the initial payment and the final amount of just compensation, as adjudged by the Court, we have upheld, in recent pronouncements, the imposition of 12 percent interest rate from the time of the taking, when the property owner was deprived of the property, until July 1, 2013, when the legal interest on loans and forbearance of money was reduced from 12 percent to six percent per annum by the Bangko Sentral ng Pilipinas [BSP] Circular No. 799. Accordingly, from July 1, 2013 onwards, the legal interest on the difference between the final amount and initial payment is six percent per annum.

“At this juncture, We stress that the delayed full payment cannot be blamed on Tamparong only because he insists on the computation of the remaining balance based on prevailing jurisprudence. Rather, it is the Republic ‘s intransigence that caused the delay, warranting the imposition of legal interest.

“All given, the RTC, as affirmed by the CA, did not err or gravely abuse its discretion in fixing the interest to be included in the just compensation at the prevailing legal rate of 12% per annum from the taking of the property.

“For these reasons, the Petition for Review on Certiorari is denied. The Decision dated May 30, 2017 of the Court of Appeals in CA G.R. SP No. 06537-MIN, which affirmed the Order dated June 25, 2014 of the Regional Trial Court of Cagayan de Oro City, Branch 20 (RTC) in Civil Case No. 99-074 is affirmed with modification in that legal interest at the rate of 12 percent per annum is imposed upon the unpaid balance of the just compensation as determined by the RTC in its Resolution dated Jan. 21, 2010 from Nov. 29, 2000 up to June 30, 20 13, and six percent per annum from July I, 20 13 until full satisfaction.

“The case is remanded to the RTC for the proper determination of the amount of remaining balance to be executed in accordance with this Decision. So ordered.” — Rey G. Panaligan