Republic of the Philippines vs. Vda. De Castellvi (G.R. No. L-20620)

Facts:

In 1947, the republic, through the Armed Forces of the Philippines (AFP), entered into a lease agreement over a land in Pampanga with Castellvi on a year-to-year basis. When Castellvi gave notice to terminate the lease in 1956, the AFP refused because of the permanent installations and other facilities worth almost P500,000,00 that were erected and already established on the property. She then instituted an ejectment proceeding against the AFP. In 1959, however, the republic commenced the expropriation proceedings for the land in question.

Issue: 

Whether or not the compensation should be determined as of 1947 or 1959.

Ruling:

The Supreme Court ruled that the taking should not be reckoned as of 1947, and that just compensation should not be determined on the basis of the value of the property that year .

The requisites for taking are:

1. The expropriator must enter a private property;

2. The entry must be for more than a momentary period;

3. It must be under warrant or color of authorities;

4. The property must be devoted for public use or otherwise informally appropriated or injuriously affected; and

5. The utilization of the property for public use must be such a way as to oust the owner and deprive him of beneficial enjoyment of the property.

Only requisites 1, 3 and 4 are present. It is clear, therefore, that the “taking” of Castellvi’s property for purposes of eminent domain cannot be considered to have taken place in 1947 when the republic commenced to occupy the property as lessee thereof.

Requisite number 2 is not present according to the Supreme Court, “momentary” when applied to possession or occupancy of real property should be construed to mean “a limited period” -- not indefinite or permanent. The aforecited lease contract was for a period of one year, renewable from year to year. The entry on the property, under the lease, is temporary, and considered transitory. The fact that the Republic, through AFP, constructed some installations of a permanent nature does not alter the fact that the entry into the lant was transitory, or intended to last a year, although renewable from year to year by consent of the owner of the land. By express provision of the lease agreement the republic, as lessee, undertook to return the premises in substantially the same condition as at the time the property was first occupied by the AFP. It is claimed that the intention of the lessee was to occupy the land permanently, as may be inferred from the construction of permanent improvements. But this “intention” cannot prevail over the clear and express terms of the lease contract.

The 5th requirement is also lacking. In the instant case the entry of the Republic into the property and its utilization of the same for public use did not oust Castellvi and deprive her of all beneficial enjoyment of the property. Cstellvi remained as owner, and was continuously recognized as owner by the Republic, as shown by the renewal of the lease contract from year to year, and by the provision in the lease contract whereby the Republic undertook to return the property to Castellvi when the lease was terminated. Neither was Castellvi deprived of all the beneficial enjoyment of the property, because the Republic was bound to pay, and had been paying Castellvi the agreed monthly rentals until the time when it filed the complaint for eminent domain on June 26, 1959.

It is clear, therefore, that the “taking” of Castellvi’s property for purposes of eminent domain cannot be considered to have taken place in 1947 when the Republic commenced to occupy the property as lessee thereof, and that the just compensation to be paid for the Castellvi’s property should not be determined on the basis of the value of the property as of that year. The lower court did not commit an error when it held that the “taking” of the property under expropriation commenced with the filing of the complaint in this case.

Under Sec. 4, Rule 67 of the Rules of Court, “just compensation” is to be determined as of the date of the filing of the complaint. The Supreme Court has ruled that when the taking of the property sought to be expropriated coincides with the commencement of the expropriation proceedings, or takes place subsequent to the filing of the complaint for eminent domain, the just compensation should be determined as of the date of the filing of the complaint.