Correct Value of Property in Determining Just Compensation

DOJ OPINION NO. 074, s. 2008 November 21, 2008 Hon. Leandro R. Mendoza Secretary Department of Transportation and Communications 17/F The Columbia Tower Brgy. Wack-Wack, Ortigas Avenue 1555 Mandaluyong City Dear Secretary Mendoza : This has reference to your letter requesting for legal opinion/guidance on what should be the proper amount of just compensation which the government should pay the claimant. Is it the value of the property at the time it was taken by the government for public use or the current zonal value as set by the Bureau of Internal Revenue pursuant to Republic Act No. 8974? 1 As a backgrounder, you state that the runway of Cauayan Airport in Cauayan, Isabela, which was constructed in the early part of 1970, was extended in 1993 by the DPWH Regional Office No. 2 based in Tuguegarao City, Province of Cagayan. It asserted that the lots affected by the construction of the runway extension were duly acquired and properly compensated. However, subsequently, a claimant filed with the DOTC, thru Air Transportation Office (ATO), a claim for compensation for the value of her lot, as an unpaid registered owner of a lot affected by the extension. Upon verification, DPWH Regional Office No. 2 confirmed that said lot has been traversed by the construction of runway extension sometime in May, 1993. Based on the records of DPWH, it appears that the lot belonging to the claimant was indeed encroached upon by the extension of runway of Cauayan Airport in 1993 and that, for unknown reasons, the lot owner was excluded from the list of other affected lot owners who were duly compensated by DPWH. You further aver that claimant contends that "just compensation" for the property should be the current zonal value, anchoring his contention in the Supreme Court case of Heirs of Mateo Pidacan vs. ATO. 2 acCTIS Hence, you now seek opinion from this Department on what is the correct value of the property that should be considered in determining just compensation of the claimant. At the outset, it appears that the instant request involves the substantive rights of a private party and since the opinion of the Secretary of Justice is merely advisory in nature, such opinion would not be binding upon said private party who, if adversely affected by such opinion, may take issue therewith and contest it before the courts. As a matter of policy, therefore, this Department has consistently refrained from rendering opinion on questions which are justiciable in nature or those which may be the subject of litigation before the courts. 3 Nonetheless, solely for your information and proper guidance, we invite attention that in a long line of cases, 4 the Supreme Court has enunciated that the determination of just compensation in eminent domain cases is reckoned from the time of taking. We quote the following jurisprudence which is in point: "As to the value of the property, although the plaintiff claims the present market value thereof, the rule is that to determine due compensation for lands appropriated by the Government, the basis should be the price or value at the time that it was taken from the owner and appropriated by the Government. . . . Inasmuch as the City of Pasay has not been paying rent for the use of the land since 1925, thereby causing damages in favor of the owner, said damages may be assessed in the form of legal interest on the price since 1925 [when the registered owner of the parcel of land had lost possession thereof because it was taken by the municipal corporation for road purposes] up to the time when payment is made by the City of Pasay". ( Alfonso vs. Pasay City, 106 Phil. 1017) "The constitutional limitation of 'just compensation' is considered to be the sum equivalent to the market value of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal action and competition or the fair value of the property as between one who receives, and one who desires to sell, it being fixed at the time of the actual taking by the government. Thus, if property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interests on its just value to be computed from the time the property is taken to the time when compensation is actually paid or deposited with the court. In fine, between the taking of the property and the actual payment, legal interests accrue in order to place the owner in a position as good as (but not better than) the position he was in before the taking occurred. ( Reyes vs. NHA, Jan. 20, 2003 ) HDCTAc Very truly yours, (SGD.) RAUL M. GONZALEZ Secretary Footnotes 1. An Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National Government Infrastructure Projects and for Other Purposes. 2. 524 SCRA 679, June 15, 2007. 3. Secretary of Justice Opinion No. 3, s. 1999; Nos. 31, 45 and 76, s. 1997; No. 46, s. 1981. 4. NPC vs. CA (254 SCRA 577); Panes vs. Visayas State College of Agriculture (264 SCRA 758); Republic vs. IAC (185 SCRA 572); Ansaldo vs. Tantuico, Jr. (188 SCRA 300); EPZA vs. Dulay (149 SCRA 305); Mun. Govt. of Sagay vs. Jison (104 Phil. 1026); MERALCO vs. Tuason (60 Phil. 663). cACEHI