Primary Holding

The Supreme Court held that the "taking" of the properties occurred upon the filing of the expropriation complaint in 1959, not in 1947 when the Republic initially leased Castellvi's land. The just compensation for the expropriated lands, classified as residential, was fixed at P5.00 per square meter. The Republic was ordered to pay interest on the compensation from the time of deposit of provisional value and from the actual taking in possession.

Background

The Republic needed to expand the Basa Air Base and initiated expropriation proceedings against Carmen M. Vda. de Castellvi and Maria Nieves Toledo-Gozun, landowners of adjacent properties. The Republic had previously leased Castellvi’s land since 1947. Disagreement arose over the just compensation, with landowners claiming a much higher value (P15.00 per square meter) compared to the Republic's initial valuation (P0.20 per square meter).

Facts

• 1. The Republic of the Philippines sought to expropriate three parcels of land in Floridablanca, Pampanga: one owned by the estate of Alfonso de Castellvi and two owned by Maria Nieves Toledo-Gozun.
• 2. The land was needed for the expansion of Basa Air Base and was adjacent to the existing base.
• 3. The Republic had leased Castellvi's land since 1947, renewing the lease annually until 1956 when Castellvi refused renewal and demanded the Republic vacate.
• 4. Despite lease termination, the Republic continued to occupy Castellvi's land, constructing permanent installations.
• 5. Toledo-Gozun's lands were never leased by the Republic.
• 6. The lands were classified as residential and were in proximity to residential areas, roads, and infrastructure.
• 7. Commissioners appointed by the court recommended a price of P10.00 per square meter.
• 8. The trial court adopted the Commissioners' recommendation.
• 9. The Republic argued for a much lower price (based on 1949 value) while the landowners sought a higher price (P15.00 per square meter).

Arguments of the Petitioners

• 1. The "taking" of Castellvi's property should be reckoned from 1947 when the Republic first occupied it under a lease agreement, thus the valuation should be based on 1947 prices.
• 2. The price of P10.00 per square meter set by the lower court was exorbitant; a fair market value was P0.20 per square meter, based on the 1949 Narciso case involving adjacent land.
• 3. The lower court erred in ordering interest payment for Castellvi from July 1, 1956, as the continued occupation was not illegal but covered by implied lease while negotiations were ongoing, and Castellvi agreed to receive rent for the period.
• 4. Newly discovered evidence (sales of sugarlands) justified a new trial.

Arguments of the Respondents

• 1. The "taking" occurred only when the expropriation complaint was filed in 1959, and the valuation should be based on the market value at that time.
• 2. The lands were residential and had a fair market value of P15.00 per square meter, considering their location and potential for subdivision.
• 3. Castellvi argued that the Republic’s occupation after the lease was illegal, justifying interest payment from July 1, 1956.

Issues

• 1. When did the "taking" of Castellvi's property occur for purposes of determining just compensation? (1947 lease commencement or 1959 expropriation filing?)
• 2. What is the fair market value of the expropriated lands as of the date of taking? (P0.20, P10.00, or P15.00 per square meter?)
• 3. Was the lower court correct in ordering the Republic to pay interest to Castellvi from July 1, 1956 to July 10, 1959?
• 4. Did the lower court err in denying the Republic’s motion for a new trial based on newly discovered evidence?

Ruling

• 1. Taking Date: The Supreme Court ruled against the Republic, holding that the "taking" occurred when the expropriation complaint was filed in 1959. The lease agreement did not constitute a taking, as it was temporary and did not deprive Castellvi of beneficial ownership. Essential elements of "taking" for eminent domain were not present during the lease.
• 2. Just Compensation: The Court found the P10.00 per square meter price set by the lower court too high and adjusted it to P5.00 per square meter, considering the evidence, Commissioners' report, and prevailing market conditions in 1959, as well as the decline in the peso's value since then. While lands were residential, P10.00 was still considered excessive in the context of the evidence.
• 3. Interest Payment: The Court modified the interest payment for Castellvi. Interest is to be paid from July 10, 1959 (when the provisional value was deposited) and not from July 1, 1956, as Castellvi agreed to receive rent until August 10, 1959, implying consent to lease until then.
• 4. Motion for New Trial: The Court upheld the denial of the motion for new trial, finding that the "newly discovered evidence" was not truly new and could have been discovered with due diligence before or during the trial.

Doctrines

• 1. Eminent Domain/Taking: Defined as entering upon private property for more than a momentary period under legal warrant, devoting it to public use, and substantially ousting the owner of beneficial enjoyment. This doctrine was used to determine when the taking occurred in this case.
• 2. Just Compensation: In expropriation, the owner is entitled to the fair market value of the property at the time of taking, considering its best use. The Court used this doctrine to determine the appropriate price per square meter.
• 3. Advisory Nature of Commissioners' Report: Reports of commissioners in expropriation cases are not binding but advisory and can be modified by the court based on evidence. This was invoked to justify the Court's adjustment of the price from P10.00 to P5.00 per square meter.
• 4. Requisites for New Trial Based on Newly Discovered Evidence: Evidence must be discovered after trial; could not have been discovered with due diligence; and must alter the outcome of the case. This was applied to deny the Republic’s motion for a new trial.

Key Excerpts

• 1. "Taking' under the power of eminent domain may be defined generally as entering upon private property for more than a momentary period, and, under the warrant or color of legal authority, devoting it to a public use, or otherwise informally appropriating or injuriously affecting it in such a way as substantially to oust the owner and deprive him of all beneficial enjoyment thereof." (Definition of "taking")
• 2. "In expropriation proceedings, therefore, the owner of the land has the right to its value for the use for which it would bring the most in the market." (Principle of valuation)
• 3. "Forgotten evidence, however, is not newly-discovered evidence." (Regarding the denial of motion for new trial)

Precedents Cited

• 1. City of Manila vs. Rizal Park Co., Inc. (53 Phil. 515, 525): Used to support the principle that intent in contracts is deduced from language used, not external presumptions.
• 2. Magdalena Estate, Inc. vs. Myrick (71 Phil. 344, 348): Reinforced the interpretation of contracts based on language and contemporaneous acts.
• 3. Republic vs. Baylosis, et al. (96 Phil. 461, 484): Cited to emphasize that expropriation must be formally commenced in court.
• 4. City of Manila vs. Corrales (32 Phil. 82, 98): Established guidelines for determining the value of expropriated property.
• 5. Republic vs. Narciso, et al. (L-6594): Referenced by the Republic for the P0.20/sqm value, but distinguished by the Court due to different time period and land classification.
• 6. Manila Railroad Co. vs. Caligsihan (40 Phil. 326, 328): Affirmed the court's power to modify Commissioners' report.
• 7. Republic vs. Philippine National Bank (L-14158): Established that just compensation is determined as of the date of filing of the complaint.
• 8. Republic of the Philippines vs. Urtula (110 Phil. 262-264): Case law relevant to valuation and expropriation.
• 9. Manila Railroad Company vs. Velasquez (32 Phil. 286): Supported court’s authority to modify commissioner’s report.
• 10. City of Manila vs. Estrada (25 Phil. 208): Supported court’s authority to modify commissioner’s report.
• 11. City of Cebu vs. Ledesma (14 SCRA 666, 669): Confirmed advisory nature of commissioners' report.
• 12. Miranda vs. Legaspi, et al (92 Phil. 299, 293-294): Regarding discretionary power in granting or denying new trial motions.
• 13. Penn. vs. Carolina Virginia Estate Corp. (57 SE 2d 817): Cited in American Jurisprudence, used for definition of "taking".
• 14. King vs. Mineapolis Union Railway Co. (32 Minn. 224): Authority for considering the property's best use in valuation.
• 15. Little Rock Junction vs. Woodruff (49 Ark. 381; 5 SW 792): Authority for considering the property's best use in valuation.
• 16. Rothnam vs. Commonwealth (406 Pa. 376): Authority for considering potential subdivision value.
• 17. Wichita Falls and N.W. Ry. Co. vs. Holloman (28 Okla. 419, 114 P 700, 701): Authority for considering potential subdivision value.
• 18. Republic vs. Venturanza, et al. (L-20417): Similar case involving valuation in expropriation.

Statutory and Constitutional Provisions

• 1. Article 1371, Civil Code: Interpretation of contemporaneous and subsequent acts in contracts.
• 2. Article 1372, Civil Code: Interpretation of general contract terms not to include distinct cases.
• 3. Article 1669, Civil Code: Lease for a determinate time ceases without demand upon expiry.
• 4. Section 1, Rule 67, Rules of Court: Exercise of eminent domain not through lease.
• 5. Section 4, Rule 67, Rules of Court: Determination of just compensation at the time of complaint filing.
• 6. Section 12, Rule 67, Rules of Court: Payment of costs in expropriation.
• 7. Section 13, Rule 141, Rules of Court: Payment of costs in general.
• 8. Section 1 (b), Rule 37, Rules of Court: Grounds for new trial based on newly discovered evidence.