Philippine Veterans Bank vs. Bases Conversion and Development Authority

A landowner whose property was taken under the CARP upon issuance of CLOAs to farmer-beneficiaries cannot claim just compensation from a subsequent expropriation of the same property by another government entity, because the "taking" already occurred under the first expropriation, and just compensation is measured solely by the owner's loss at the time of that taking; the farmer-beneficiaries, having acquired indefeasible Torrens titles, are the lawful owners entitled to compensation in the subsequent proceeding.

The Subject Properties — two parcels of land in Pampanga totaling approximately 4,015 square meters — were originally owned by Belmonte Agro-Industrial Development Corporation (BAIDECO), which mortgaged them to petitioner Philippine Veterans Bank (PVB) in 1976. PVB foreclosed on the mortgages, purchased the properties at public auction in 1982, and BAIDECO failed to redeem. PVB itself was placed under Central Bank liquidation from August 1984 to December 1991 and was rehabilitated on January 1, 1992. Meanwhile, Republic Act No. 6657, the Comprehensive Agrarian Reform Law (CARL), was enacted in 1988, under which the Subject Properties were placed under CARP coverage and distributed to the Saguns as farmer-beneficiaries. In 2005, BAIDECO ceded all its rights and interests over the Subject Properties to PVB by written agreement. The dispute arose from two separate expropriation proceedings — one under the CARP and another by the Bases Conversion and Development Authority (BCDA) for the Subic-Clark-Tarlac Expressway (SCTEX) Project — both involving the same properties.

The Subject Properties consist of two parcels of land in Barangay Planas, Porac, Pampanga: a 2,511-square-meter lot covered by CLOA No. 00604434 and TCT No. 15767 in the name of Marcelo Sagun, and a 1,504-square-meter lot covered by CLOA No. 00604433 and TCT No. 15762 in the name of Edner Sagun. These properties were originally owned by BAIDECO, which mortgaged them to PVB in 1976. PVB foreclosed on the mortgages and purchased the properties at public auction in 1982; BAIDECO failed to redeem. PVB was thereafter placed under Central Bank liquidation from August 1984 to December 1991 and was rehabilitated on January 1, 1992.

Meanwhile, the Subject Properties were placed under the coverage of the Comprehensive Agrarian Reform Program (CARP) pursuant to Republic Act No. 6657 and distributed to the Saguns, who are farmer-beneficiaries. The Land Bank of the Philippines (LBP) deposited advance payments for the registered landowner based on its own valuation. On September 25, 2001, the DAR issued CLOA No. 00604434 to Marcelo and CLOA No. 00604433 to Edner. Pursuant to the issuance of the CLOAs, the Register of Deeds of Pampanga issued TCT No. 15767 in favor of Marcelo and TCT No. 15762 in favor of Edner on November 21, 2001. Notably, LBP did not inform PVB regarding the expropriation of the Subject Properties prior to the issuance of the CLOAs and TCTs in favor of the farmer-beneficiaries.

When PVB attempted to consolidate its ownership over the Subject Properties, it discovered that the same had already been distributed to the farmer-beneficiaries, who already had CLOAs and TCTs issued in their favor. PVB filed a case for declaration of nullity of the Emancipation Patents and TCTs with the RTC against BAIDECO and others, on the ground that it was not notified of the DAR's action. However, PVB withdrew the case pursuant to this Court's ruling in Department of Agriculture vs. Cuenca that controversies on the implementation of CARP fall under the jurisdiction of the DAR. In 2002, PVB filed a petition for determination of just compensation before the Office of the Regional Agrarian Reform Adjudicator of San Fernando, Pampanga. In 2005, PVB and BAIDECO entered into a written agreement wherein BAIDECO ceded all its rights and interests over the Subject Properties to PVB. In 2006, PVB filed a petition before the RTC of Angeles City assailing the DARAB's determination of just compensation, docketed as Civil Case No. 13237, asserting that full payment for just compensation pursuant to the CARP coverage had not been made.

On December 4, 2003, BCDA instituted two expropriation proceedings seeking to expropriate the Subject Properties for the SCTEX Project, docketed as Civil Case Nos. 11267 and 11273 and raffled to RTC Angeles City, Branch 59. Summons were duly served on the Saguns, who were eventually declared in default upon BCDA's motion. Upon BCDA's motion and payment of deposit, the RTC issued a Writ of Possession on March 24, 2004, and actual possession was delivered to BCDA on April 20, 2004. After learning of the expropriation cases, PVB filed motions to intervene, which the RTC admitted. On July 11, 2005, the trial court issued an order of expropriation declaring that BCDA had the lawful right to take the Subject Properties. BCDA subsequently filed an Omnibus Motion with an Amended Complaint impleading LBP as mortgagee. LBP asserted that it had already made payments through the deposits required by law and that a mortgage in its favor was annotated on the titles; it noted that PVB's claim of non-payment may pertain to the fact that compensation was still deposited with LBP and not yet withdrawn, since PVB had yet to comply with documentary requirements for release.

The RTC rendered its Decision on August 5, 2011, finding that BCDA had the lawful right to the Subject Properties and ordering BCDA to deposit the remainder of just compensation, which would answer for the satisfaction of LBP's mortgage lien, with the balance to be paid to the Saguns. The trial court observed that while the Saguns' TCTs were improvidently issued in view of lapses in procedure under the CARL, PVB no longer contested such improvident issuance or the rightfulness of the CARP expropriation, the only remaining issue being how much compensation PVB should receive. The RTC opined that PVB, which stands to receive just compensation from the CARP, can no longer claim an interest to protect in the case, and that awarding PVB just compensation would amount to unjust enrichment to the prejudice of the Saguns. On November 28, 2011, the RTC modified its Decision upon LBP's oral motion to be dropped as defendant, which was granted since the Saguns had already paid their obligation to LBP. The modified order directed BCDA to pay the Saguns the entire just compensation directly.

• Ownership and Entitlement to Just Compensation: PVB argued that as the owner of the Subject Properties, it is entitled to receive just compensation either pursuant to the SCTEX expropriation or the CARP expropriation.
• Retention of Ownership Absent Payment: PVB anchored its claim on the doctrine that a landowner retains ownership of its property prior to the payment of just compensation, asserting that since it had yet to receive just compensation for the CARP taking, it remained the owner and was entitled to the SCTEX proceeds.
• Non-Payment Under CARP: PVB asserted that full payment for just compensation pursuant to the CARP coverage had not been made, and that the requirement of just compensation is not satisfied by the mere deposit of provisional compensation with LBP.

• Saguns as Lawful Owners: BCDA maintained that the CA correctly ruled that the Subject Properties were owned by the Saguns, the farmer-beneficiaries of the CARP expropriation who already had EPs, CLOAs, and TCTs issued in their favor.
• Unjust Enrichment: BCDA contended that grave injustice and unjust enrichment would result should the compensation in the SCTEX expropriation be paid to PVB rather than the Saguns, as it would result in double compensation by the State.

• Entitlement to Just Compensation: Whether PVB, as the landowner entitled to just compensation in the CARP expropriation but who has yet to receive payment, is entitled to receive just compensation in the SCTEX expropriation instead of the Saguns.

• Entitlement to Just Compensation: No. PVB is not entitled to just compensation in the SCTEX expropriation; the "taking" of PVB's property occurred by virtue of the CARP expropriation upon issuance of CLOAs to the Saguns in 2001, not by the SCTEX expropriation initiated in 2003. The Saguns, as registered owners with indefeasible CLOAs and TCTs, are the lawful owners entitled to the SCTEX compensation.

• Entitlement to Just Compensation: The concept of "taking" in eminent domain is central to the resolution. Taking occurs where the owner is actually deprived or dispossessed of his property, where there is practical destruction or material impairment of the value of his property, or when he is deprived of the ordinary use thereof; taking may be deemed to occur at the time EPs or CLOAs are issued by the government. Here, it was undisputed that prior to the SCTEX expropriation initiated in 2003, PVB was already deprived of use and possession of the Subject Properties when CLOAs were awarded and TCTs issued in favor of the Saguns in 2001. Thus, the taking of PVB's property was by virtue of the CARP expropriation, not the SCTEX expropriation. Just compensation refers to the full and fair equivalent of the loss the owner suffers by reason of the expropriation, determined by the value of the land at the time it was taken; the measure is the owner's loss, not the taker's gain. The State's obligation to compensate arises only if the owner suffered a loss, and compensation must not extend beyond that loss. Since PVB's loss occurred under the CARP expropriation, just compensation must be paid by LBP under that proceeding. PVB may recover only from the proceeding that resulted in the taking; to rule otherwise — allowing PVB to choose either proceeding or claim from both — would result in unjust enrichment. Moreover, PVB had already withdrawn its action for declaration of nullity of the EPs and TCTs and was contesting only the amount of CARP compensation, thereby effectively conceding the propriety of the CARP coverage and the distribution to the Saguns. On the other hand, the Saguns had fully paid LBP for the Subject Properties, and the records showed no pending violations or noncompliance with CARP conditions. Their CLOAs and TCTs, issued in 2001, became irrevocable and indefeasible after one year pursuant to Section 24 of the CARL as amended by RA 9700, which affords CLOAs the same indefeasibility and security as all titles under the Torrens system. As registered property owners, the Saguns are entitled to the protection given to every Torrens title holder, their rights being forfeitable only for violations of agrarian laws. PVB did not even contest the transfer of title to the Saguns and had withdrawn its nullification action. Accordingly, the Saguns were the lawful owners when the SCTEX expropriation began and are entitled to receive just compensation therefor.

• Doctrine of "Taking" in Eminent Domain — Taking occurs where the owner is actually deprived or dispossessed of his property, where there is practical destruction or material impairment of the value of his property, or when he is deprived of the ordinary use thereof. Taking may be deemed to occur at the time Emancipation Patents or CLOAs are issued by the government. The Court applied this doctrine to determine that the taking of PVB's property occurred under the CARP expropriation in 2001, when CLOAs and TCTs were issued to the Saguns, and not under the SCTEX expropriation initiated in 2003.

• Just Compensation as the Owner's Loss — Just compensation is the just and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the expropriation, ordinarily determined by the value of the land at the time it was taken. The measure of just compensation is not the taker's gain but the owner's loss; anything beyond that is more, and anything short of that is less, than just compensation. The Court applied this principle to confine PVB's compensable claim to the CARP proceeding, where its loss actually occurred, and to preclude a second recovery under the SCTEX expropriation.

• Indefeasibility of CLOAs Under the Torrens System — CLOAs and other titles issued under agrarian reform programs enjoy the same indefeasibility and security afforded to all titles under the Torrens system, as provided in Section 24 of the CARL as amended by RA 9700. After one year from registration with the Registry of Deeds, CLOAs become irrevocable and indefeasible, subject to the conditions, limitations, and qualifications of the CARL, the Property Registration Decree, and other pertinent laws. The Court relied on this doctrine to uphold the Saguns' ownership of the Subject Properties and their entitlement to the SCTEX compensation.

• Prohibition Against Unjust Enrichment — Under Article 22 of the Civil Code, there is unjust enrichment when a person unjustly retains a benefit at the expense of another. The Court invoked this principle to preclude PVB from recovering just compensation from both the CARP and SCTEX expropriations, or from choosing either at its option, as such would result in double compensation by the State to the prejudice of the Saguns.

• "In fine, just compensation is the 'equivalent for the value of the property at the time of its taking. Anything beyond that is more and anything short of that is less, than just compensation. It means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating authority.' In other words, the measure of just compensation 'is not the taker's gain but the owner's loss.'" — This passage articulates the canonical formulation of just compensation as the owner's loss, which the Court used to confine PVB's compensable claim to the CARP proceeding and to deny recovery under the SCTEX expropriation.

• "Here, it is undisputed that prior to the SCTEX expropriation initiated in 2003, PVB was already deprived of use and possession of the Subject Properties when CLOAs were awarded and TCTs were issued in favor of the Saguns in 2001. Thus, the taking of PVB's property was by virtue of the CARP expropriation, and not the SCTEX expropriation." — This passage states the ratio decidendi: the temporal identification of the "taking" as occurring under the CARP, not the SCTEX expropriation, which determines which proceeding generates the obligation to pay just compensation to PVB.

• "To rule otherwise, i.e., to find that PVB is entitled to compensation from either proceeding at its choosing, or worse, to find that PVB can claim compensation from both proceedings, would result in unjust enrichment on the part of PVB." — This passage defines the outer boundary of the holding: a landowner may recover just compensation only from the proceeding that resulted in the taking, not from a subsequent expropriation of the same property by another authority.

• Department of Agriculture vs. Cuenca, 482 Phil. 208 (2004) — Cited for the proposition that controversies on the implementation of the CARP fall under the jurisdiction of the DAR, which prompted PVB to withdraw its earlier case for declaration of nullity of EPs and TCTs from the RTC.

• Land Bank of the Philippines vs. Barrido, G.R. No. 198478, March 6, 2019 — Cited for the principle that the requirement of just compensation is not satisfied by the mere deposit of provisional compensation determined by LBP or DAR; what is material is that the landowner remains unpaid notwithstanding the taking.

• Philippine National Oil Company vs. Maglasang, 591 Phil. 534 (2008) — Cited for the definition of "taking" in eminent domain: there is taking where the owner is deprived or dispossessed of his property, where there is practical destruction or material impairment of value, or when he is deprived of the ordinary use thereof.

• Land Bank of the Phils. vs. Lajom, 741 Phil. 655 (2014) — Cited for the proposition that taking may be deemed to occur at the time Emancipation Patents are issued by the government.

• National Power Corp. vs. Ibrahim, 553 Phil. 136 (2007) — Cited for the definition of just compensation as the full and fair equivalent of the loss the owner suffers, determined by the value of the land at the time it was taken.

• Alfonso vs. Land Bank of the Philippines, 801 Phil. 217 (2016) — Cited for the formulation that the measure of just compensation is not the taker's gain but the owner's loss, and that compensation must not extend beyond the property owner's loss or injury.

• Estribillo vs. Department of Agrarian Reform, 526 Phil. 700 (2006) — Cited for the principle that certificates of title issued in administrative proceedings, such as EPs and CLOAs, are as indefeasible as those issued in judicial proceedings.

• Nacar vs. Gallery Frames, 716 Phil. 267 (2013) — Cited for the applicable interest rates on monetary judgments: 12% per annum until June 30, 2013, and 6% per annum thereafter.

• Section 16, Republic Act No. 6657 (Comprehensive Agrarian Reform Law) — Prescribes the procedure for acquisition of private lands under CARP, including notice to the landowner, valuation, deposit, and redistribution. The Court noted that there were lapses in compliance with this provision, as CLOAs and TCTs were issued in favor of the Saguns without DAR or LBP notifying PVB, the owner of the property, of the proceedings.

• Section 24, Republic Act No. 6657, as amended by Republic Act No. 9700 — Provides that the rights and responsibilities of farmer-beneficiaries commence from receipt of a duly registered CLOA, and that CLOAs and other titles issued under agrarian reform programs shall be indefeasible and imprescriptible after one year from registration with the Registry of Deeds, enjoying the same indefeasibility and security afforded to all titles under the Torrens system pursuant to Presidential Decree No. 1529. The Court relied on this provision to uphold the Saguns' indefeasible ownership of the Subject Properties.

• Section 4, Article XIII, 1987 Constitution — Mandates that the State shall undertake an agrarian reform program founded on the right of farmers and regular farmworkers who are landless to own directly or collectively the lands they till, subject to the payment of just compensation. The Court invoked this provision to underscore the constitutional policy favoring the welfare of landless farmers and farmworkers.

• Article 22, Civil Code of the Philippines — Proscribes unjust enrichment. The Court applied this provision to preclude PVB from recovering just compensation from both the CARP and SCTEX expropriations, as such would unjustly enrich PVB at the expense of the Saguns.

Perlas-Bernabe, S.A.J. (Chairperson), Lazaro-Javier, Inting, and Dimaampao, JJ., concurred.