Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 164195 December 4, 2009
APO FRUITS CORPORATION and HIJO PLANTATION, INC. Petitioners,
vs.
THE HON. COURT OF APPEALS and LAND BANK OF THE PHILIPPINES, Respondents.
R E S O L U T I O N
BERSAMIN, J.:
This case originated from the Third Division, which rendered its decision on February 6, 2007 in favor of petitioners Apo Fruits Corporation (AFC) and Hijo Plantation, Inc. (HPI). On December 19, 2007, however, the Third Division modified its decision upon the motion for reconsideration of respondent Land Bank of the Philippines (Land Bank), deleting the award of interest and attorney’s fees.
For consideration and resolution is the second motion for reconsideration (with respect to the denial of the award of legal interest and attorney's fees) filed by AFC and HPI.
Antecedents
On October 12, 1995, AFC and HPI voluntarily offered to sell the lands subject of this case pursuant to Republic Act No. 6657 (Comprehensive Agrarian Reform Law, or CARL). The Department of Agrarian Reform (DAR) referred their voluntary-offer-to-sell (VOS) applications to Land Bank for initial valuation. Land Bank fixed the just compensation at ₱165,484.47/hectare, that is, ₱86,900,925.88, for AFC, and ₱164,478,178.14, for HPI. The valuation was rejected, however, prompting Land Bank, upon the advice of DAR, to open deposit accounts in the names of the petitioners, and to credit in said accounts the sums of ₱26,409,549.86 (AFC) and ₱45,481,706.76 (HPI). Both petitioners withdrew the amounts in cash from the accounts, but afterwards, on February 14, 1997, they filed separate complaints for determination of just compensation with the DAR Adjudication Board (DARAB).
When DARAB did not act on their complaints for determination of just compensation after more than three years, the petitioners filed complaints for determination of just compensation with the Regional Trial Court (RTC) in Tagum City, Branch 2, acting as a special agrarian court (SAC), docketed as Agrarian Cases No. 54-2000 and No. 55-2000. Summonses were served on May 23, 2000 to Land Bank and DAR, which respectively filed their answers on July 26, 2000 and August 18, 2000. The RTC conducted a pre-trial, and appointed persons it considered competent, qualified and disinterested as commissioners to determine the proper valuation of the properties.
Ultimately, the RTC rendered its decision on September 25, 2001, disposing thus:
WHEREFORE, consistent with all the foregoing premises, judgment is hereby rendered by this Special Agrarian Court where it has determined judiciously and now hereby fixed the just compensation for the 1,388.6027 hectares of lands and its improvements owned by the plaintiffs: APO FRUITS CORPORATION and HIJO PLANTATION, INC., as follows:
First – Hereby ordering after having determined and fixed the fair, reasonable and just compensation of the 1,338.6027 hectares of land and standing crops owned by plaintiffs – APO FRUITS CORPORATION and HIJO PLANTATION, INC., based at only P103.33 per sq. meter, ONE BILLION THREE HUNDRED EIGHTY-THREE MILLION ONE HUNDRED SEVENTY-NINE THOUSAND PESOS (P1,383,179,000.00), Philippine Currency, under the current value of the Philippine Peso, to be paid jointly and severally to the herein PLAINTIFFS by the Defendants-Department of Agrarian Reform and its financial intermediary and co-defendant Land Bank of the Philippines, thru its Land Valuation Office;
Second – Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay plaintiffs-APO FRUITS CORPORATION and HIJO PLANTATION, INC., interests on the above-fixed amount of fair, reasonable and just compensation equivalent to the market interest rates aligned with 91-day Treasury Bills, from the date of the taking in December 9, 1996, until fully paid, deducting the amount of the previous payment which plaintiffs received as/and from the initial valuation;
Third – Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally the Commissioners’ fees herein taxed as part of the costs pursuant to Section 12, Rule 67 of the 1997 Rules of Civil Procedure, equivalent to, and computed at Two and One-Half (2 ˝) percent of the determined and fixed amount as the fair, reasonable and just compensation of plaintiffs’ land and standing crops plus interest equivalent to the interest of the 91-Day Treasury Bills from date of taking until full payment;
Fourth - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally the attorney’s fees to plaintiffs equivalent to, and computed at ten (10%) Percent of the determined and fixed amount as the fair, reasonable and just compensation of plaintiffs’ land and standing crops, plus interest equivalent to the 91-Day Treasury Bills from date of taking until the full amount is fully paid;
Fifth - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office to deduct from the total amount fixed as fair, reasonable and just compensation of plaintiffs’ properties the initial payment paid to the plaintiffs;
Sixth - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay the costs of the suit; and
Seventh - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay all the aforementioned amounts thru The Clerk of Court of this Court, in order that said Court Officer could collect for payment any docket fee deficiency, should there be any, from the plaintiffs.
Upon Land Bank’s motion for reconsideration, the RTC modified the decision by promulgating its decision dated December 5, 2001, holding:
WHEREFORE, premises considered, IT IS HEREBY ORDERED that the following modifications as they are hereby made on the dispositive portion of this Court’s consolidated decision be made and entered in the following manner, to wit:
On the Second Paragraph of the Dispositive Portion which now reads as follows, as modified:
Second - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay plaintiffs-APO FRUITS CORPORATION and HIJO PLANTATION, INC., interest at the rate of Twelve (12%) Percent per annum on the above-fixed amount of fair, reasonable and just compensation computed from the time the complaint was filed until the finality of this decision. After this decision becomes final and executory, the rate of TWELVE (12%) PERCENT per annum shall be additionally imposed on the total obligation until payment thereof is satisfied, deducting the amounts of the previous payments by Defendant-LBP received as initial valuation;
On the Third Paragraph of the Dispositive Portion which Now Reads As Follows, As Modified:
Third - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally the Commissioners’ fees herein taxed as part of the costs pursuant to Section 12, Rule 67 of the 1997 Rules of Civil Procedure, equivalent to, and computed at Two and One-Half (2 ˝) percent of the determined and fixed amount as the fair, reasonable and just compensation of plaintiffs’ land and standing crops and improvements;
On the Fourth Paragraph of the Dispositive Portion which Now Reads As follows, As Modified:
Fourth - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally the attorney’s fees to plaintiffs equivalent to, and computed at ten (10%) Percent of the determined and fixed amount as the fair, reasonable and just compensation of plaintiffs’ land and standing crops and improvements.
Except for the above-stated modifications, the consolidated decision stands and shall remain in full force and effect in all other respects thereof.
Land Bank appealed by notice of appeal. The RTC denied due course to the appeal, however, holding that such mode was not proper in view of the ruling in Land Bank of the Philippines v. De Leon,1 which held that the correct mode of appeal from a decision of the RTC acting as SAC was by petition for review (Rule 43). The RTC denied Land Bank’s motion for reconsideration.1avvphi1
Land Bank was thus compelled to file in March 2003 a petition for certiorari in the Court of Appeals (CA) to assail the RTC’s order denying due course to its appeal and denying its motion for reconsideration.
The CA granted the petition for certiorari on February 12, 2004, and nullified the assailed orders of the RTC.
Following the CA’s denial of their joint motion for reconsideration on June 21, 2004, AFC and HPI appealed on certiorari, raising the following issues, to wit:
I.
WHETHER OR NOT THE QUESTIONED DECISION AND RESOLUTION ARE IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT?
II.
WHETHER OR NOT RESPONDENT LBP IS BOUND BY THE DECISION OF COURT OF APPEALS IN CA-G.R. SP NO. 74879 AND IS THEREFORE PRECLUDED FROM FILING CA-G.R. SP NO. 76222?
III.
WHETHER OR NOT THE FILING BY RESPONDENT LBP OF CA-G.R. SP NO. 76222 IS ALREADY BARRED BY RES JUDICATA?
IV.
WHETHER OR NOT THE RULING OF THE SUPREME COURT IN THE ARLENE DE LEON CASE, GIVING ONLY PROSPECTIVE EFFECT TO ITS EARLIER RESOLUTION AS TO THE PROPER MODE OF APPEAL FROM DECISIONS OF SPECIAL AGRARIAN COURTS IS APPLICABLE IN THE INSTANT CASE?
V.
WHETHER OR NOT RESPONDENT LBP WAS DEPRIVED OF DUE PROCESS AND/OR OF ITS RIGHT TO APPEAL?
VI.
WHETHER OR NOT THE SUBJECT PETITION (CA-G.R. SP NO. 76222) WAS MERELY INTERPOSED TO DELAY THE EXECUTION OF SPECIAL AGRARIAN COURT’S "DECISION" WHICH IS BASED ON EVIDENCE DULY PRESENTED AND PROVED?
AFC and HPI prayed that the decision and resolution of the CA be reversed and set aside, and that the RTC’s decision dated September 25, 2001 rendered in Agrarian Cases No. 54-2000 and No. 55-2000 be declared final and executory.
In its decision dated February 6, 2007, the Third Division decreed as follows:
WHEREFORE, premises considered, the instant Petition is PARTIALLY GRANTED. While the Decision, dated 12 February 2004, and Resolution, dated 21 June 2004, of the Court of Appeals in CA-G.R. SP No. 76222, giving due course to LBP’s appeal, are hereby AFFIRMED, this Court, nonetheless, RESOLVES, in consideration of public interest, the speedy administration of justice, and the peculiar circumstances of the case, to give DUE COURSE to the present Petition and decide the same on its merits. Thus, the Decision, dated 25 September 2001, as modified by the Decision, dated 5 December 2001, of the Regional Trial Court of Tagum City, Branch 2, in Agrarian Cases No. 54-2000 and No. 55-2000 is AFFIRMED. No costs.
SO ORDERED.
Land Bank sought reconsideration upon the following grounds, viz:
A. THE HONORABLE COURT RULED IN THE FAIRLY RECENT CASE OF LAND BANK OF THE PHILIPPINES v. CELADA, G.R. NO. 164876 THAT SPECIAL AGRARIAN COURTS ARE NOT AT LIBERTY TO DISREGARD THE FORMULA DEVISED TO IMPLEMENT SECTION 17 OF REPUBLIC ACT NO. 6657 OTHERWISE KNOWN AS THE COMPREHENSIVE AGRARIAN REFORM LAW OF 1988.
B. RESPONDENT LBP SATISFIED OR COMPLIED WITH THE CONSTITUTIONAL REQUIREMENT ON PROMPT AND FULL PAYMENT OF JUST COMPENSATION.
C. RESPONDENT LBP ENSURED THAT THE INTERESTS ALREADY EARNED ON THE BOND PORTION OF THE REVALUED AMOUNTS WERE ALIGNED WITH 91-DAY TRASURY BILL (T-BILL) RATES AND ON THE CASH PORTION THE NORMAL BANKING INTEREST RATES.
D. PETITIONERS ARE NOT ENTITLED TO AN AWARD OF ATTORNEY’S FEES AND COMMISSIONERS’ FEES.
E. RESPONDENT LBP’S COUNSEL DID NOT UNNECESSARILY DELAY THE PROCEEDINGS.
F. THE IMMINENT MODIFICATION, IF NOT THE REVERSAL, OF THE SUPREME COURT RULINGS IN BANAL AND CELADA BY THE QUESTIONED DECISION NECESSITATES A REFERRAL OF THE INSTANT CASE TO THE HONORABLE COURT SITTING EN BANC.
On December 19, 2007, the Third Division partially granted Land Bank’s motion for reconsideration, ruling thus:
WHEREFORE, premises considered, the Motion for Reconsideration is partially granted as follows:
(1) The award of 12% interest rate per annum in the total amount of just compensation is DELETED.
(2) This case is ordered remanded to the RTC for further hearing on the amount of Commissioners’ Fees.
(3) The award of attorney’s fees is DELETED.
(4) The Motion for Referral of the case to the Supreme Court sitting En Banc and the request or setting of the Omnibus Motion for Oral Arguments are all DENIED for lack of merit. In all other respects, our Decision dated 6 February 2007 is MAINTAINED.
SO ORDERED.
Dissatisfied, the parties filed their respective motions for reconsideration, but the Third Division denied their motions on December 19, 2007. Upon finality of the resolution, the entry of judgment was issued on May 16, 2008.
Notwithstanding the issuance of the entry of judgment, AFC and HPI still filed on May 28, 2008 several motions, namely: (1) motion for leave to file and admit second motion for reconsideration; (2) second motion for reconsideration (with respect to the denial of the award of legal interest and attorney's fees); and (3) motion to refer the second motion for reconsideration to the Honorable Court en banc.
The case was thereafter referred by the Third Division to the Court en banc. Hence, this resolution.
Ruling
The second motion for reconsideration (with respect to the denial of the award of legal interest and attorney's fees) is denied, because, firstly, to grant it is to jettison the immutability of a final decision – a matter of public policy and public interest, as well as a time-honored principle of procedural law; and secondly, to award interest and attorney’s fees despite the fact that Land Bank paid the just compensation without undue delay is legally and factually unwarranted.
Immutability of Judgment
The main role of the courts of justice is to assist in the enforcement of the law and in the maintenance of peace and order by putting an end to judiciable controversies with finality.2 Nothing better serves this role than the long established doctrine of immutability of judgments.
It is never a small matter to maintain that litigation must end and terminate sometime and somewhere, even at the risk of occasional errors.3 A judgment that has acquired finality becomes immutable and unalterable, and may no longer be modified in any respect even if the modification is meant to correct erroneous conclusions of fact or law and whether it will be made by the court that rendered it or by the highest court of the land.4 The reason for the rule is that if, on the application of one party, the court could change its judgment to the prejudice of the other, it could thereafter, on application of the latter, again change the judgment and continue this practice indefinitely.5 The equity of a particular case must yield to the overmastering need of certainty and unalterability of judicial pronouncements.6
The doctrine of immutability and inalterability of a final judgment has a two-fold purpose: (1) to avoid delay in the administration of justice and thus, procedurally, to make orderly the discharge of judicial business and (2) to put an end to judicial controversies, at the risk of occasional errors, which is precisely why courts exist. Controversies cannot drag on indefinitely. The rights and obligations of every litigant must not hang in suspense for an indefinite period of time.7 The doctrine is not a mere technicality to be easily brushed aside, but a matter of public policy as well as a time-honored principle of procedural law.
The foregoing considerations show that granting the second motion for reconsideration (with respect to the denial of the award of legal interest and attorney's fees) absolutely risks the trivialization of the doctrine of immutability of a final and executory judgment, and, therefore, the motion should be rejected.
Although the immutability doctrine admits several exceptions, like: (1) the correction of clerical errors; (2) the so-called nunc pro tunc entries that cause no prejudice to any party; (3) void judgments; and (4) whenever circumstances transpire after the finality of the decision rendering its execution unjust and inequitable,8 none of the exceptions applies herein, simply because the matters involved herein are plainly different from those involved in the exceptional cases.
A sampling of decided cases that illustrate what the Court has heretofore recognized as exceptional circumstances warranting the reopening of final and immutable judgments is proper to be made.
In Tan Tiac Chiong v. Cosico,9 the Court, in dismissing the administrative complaint filed against CA Justice Rodrigo Cosico, necessarily sustained the recall of the entry of judgment made by Justice Cosico, as ponente, in a criminal case appealed to the CA. The Court explained that the recall of entry of judgment might have been an error of judgment, for which no judge should be administratively charged, in the absence of showing of any bad faith, malice, or corrupt purpose. It noted that Justice Cosico had recalled the entry of judgment to afford due process to the accused, because the CA decision had been sent to the house of the counsel of the accused but had been returned with the notation "Moved Out." The CA was thus prompted to resend the decision to the counsel’s new address, thereby allowing the accused to file a motion for reconsideration.
In De Guzman v. Sandiganbayan,10 the Court had previously denied with finality the petitioner’s motion for reconsideration of its decision affirming his conviction by the Sandiganbayan of a violation of Section 3 (e) of Republic Act No. 3019. The petitioner nonetheless took a novel recourse by filing a so-called omnibus motion for leave to vacate first motion for reconsideration in the light of the present developments and to consider evidence presented herein and to set aside conviction. Citing a transcendental reason, that the accused was then about to lose his liberty simply because his former lawyers had pursued a "carelessly contrived procedural strategy of insisting on what has already become an imprudent remedy" that had forbade him from offering his evidence although all the while available for presentation, the Court used its pervasive and encompassing power to alter even that which it had already declared final, and directed the remand of the case to the Sandiganbayan, to allow the evidence of the accused to be received and appreciated, holding that:
xxx To cling to the general rule in this case is only to condone rather than rectify a serious injustice to petitioner whose only fault was to repose his faith and entrust his innocence to his previous lawyers. xxx
In Barnes v. Padilla,11 the Court reinstated the petition despite the judgment having become final and executory due to the counsel’s filing in the CA of a motion for extension of time to file motion for reconsideration (which was not allowed under the internal rules of the CA), instead of a timely motion for reconsideration. Aside from observing that the petitioner, although bound by the mistakes or neglect of his counsel, should not be allowed to suffer serious injustice from such mistakes or neglect of counsel, the Court decided to rescind the assailed decision of the CA, and to direct the Regional Trial Court to proceed with the hearing of the action for specific performance that had been erroneously dismissed on the ground of forum-shopping in view of a previously filed case for ejectment, considering that the ejectment action did not bar the action for specific performance.
In Manotok IV v. Heirs of Homer L. Barque,12 the Court set aside the entry of judgment to reopen the case on the merits, because "the militating concern for the Court en banc in accepting these cases is not so much the particular fate of the parties, but the stability of the Torrens system of registration by ensuring clarity of jurisprudence on the field."
In contrast, the matter involved herein concerns only the petitioners’ mere private claim for interest and attorney’s fees, which cannot even be classified as unprecedented. Even worse is that the petitioners’ private claim does not qualify either as a substantial or transcendental matter, or as an issue of paramount public interest, for no special or compelling circumstance has been present to warrant the relaxation of the doctrine of immutability in favor of the petitioners. That the Third Division might have erred in deleting the award of interest is neither a special nor a compelling reason to have the Court en banc favor the petitioners with a modification of the resolution dated December 19, 2007, after it became final and immutable on May 16, 2008.
No Interest is Due Unless There is Delay
In Payment of Just Compensation
Even assuming, for the sake of argument, that the Court allows the reopening of a final judgment, AFC and HPI are still not entitled to recover interest on the just compensation and attorney’s fees.
The taking of property under CARL is an exercise by the State of the power of eminent domain. A basic limitation on the State’s power of eminent domain is the constitutional directive that private property shall not be taken for public use without just compensation.13 Just compensation refers to 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 is fixed at the time of the actual taking by the State. 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 up to the time when compensation is actually paid or deposited with the court.14
In Philippine Railway Company v. Solon,15 decided in 1909, the Court treated interest as part of just compensation when the payment to the owner was delayed. There, the Court, relying heavily on American jurisprudence, declared:
Our attention has not been called to any Act of the Commission relating to the matter of interest. But that the owner is entitled to interest from the time when the company took possession of the property on the second day of February, 1907, until the decision of the court on the 16th day of June, 1908, we think is clear. The statute requires just compensation to be made to the owner for his property taken, and section 246 above cited requires the court to make such final order and judgment as shall secure to the plaintiff the property essential to the exercise of his rights under the law, and to the defendant just compensation for the land so taken. The defendant, the owner, was deprived of the use of his property from the 2d day of February, 1907, until the 19th day of July, 1908. He lost the use of it for this time, and it cannot be said that he has received just compensation for it if he is not allowed interest upon the value of the property during that time. In the case of The Pennsylvania Railroad Co. vs. Cooper (58 Penn. St., 408), the court said at page 409:
It can hardly be made a question that the plaintiff below was entitled to recover interest upon the value of his property taken by the company defendants and appropriated for the purposes of their road, from the time that it was taken. He is in the position of a vendor of land, who has always been held to have a right to interest on the purchase-money where possession has been delivered to the vendee.
In the case of Warren vs. First Division of the St. Paul & Pacific Railroad Co. (21 Minn., 424), the court said at page 427:
If, therefore, the allowance of interest upon the amount of the assessment shall be necessary to make the compensation just, we have no doubt of authority in the court to make it; and we think that, generally, it is necessary to allow interest from the date of the award to give to the owner just compensation. While the assessed value, if paid at the date taken for the assessment, might be just compensation, it certainly would not be, if payment be delayed, as might happen in many cases, and as did happen in this case, till several years after that time. The difference is the same as between as between a sale for cash in hand and sale on time.
In the case of Philipps vs. The South Park Commissioners (119 Ill. 626), the court said at page 645:
The court allowed interest on the amount decreed Mrs. Philipps, from the 27th day of August, 1870, the time when the commissioners took possession of the land, and this is relied upon as error. Lands cannot be taken and appropriated to public use without just compensation is made to the owner; and we think our law of eminent domain requires the payment of the compensation, or a tender, or deposit of the same with the county treasurer, before possession of the land shall be taken. This seems manifest from section 10 of the Eminent Domain Act, which, in substance, provides that, when the report of the jury is brought in, the court or judge shall make such order as to right and justice shall pertain, ordering that petitioner enter upon such property, and the use of the same, upon payment of full compensation, as ascertained as aforesaid. The payment of the compensation, or the deposit of the same, seems to be a condition precedent to the taking of possession. When, therefore, the possession of the land is taken, the compensation is due; and if due and payable, it, in justice, ought to draw interest from that time.
But it is said that when the company took possession on the 2d day of February, 1907, it deposited with the Insular Treasurer the value of the land and therefore ought not to pay interest on that amount.
The order made on that date was at the request of the company and in accordance with the provisions of section of Act No. 1592, which is as follows:
When condemnation proceedings are brought by any railway corporation, in any court of competent jurisdiction in the Philippine Islands, for the purpose of the expropriation of land for the proper corporate use of such railway corporation, said corporation shall have the right to enter immediately upon the possession of the land involved, after and upon the deposit by ascertained and fixed by the court having jurisdiction of the proceedings, said sum to be held by the Treasurer subject to the orders and final disposition of the court: Provided, however, That the court may authorize the deposit with the Insular Treasurer of a certificate of deposit of any depository of the Government of the Philippine Islands in lieu of cash, such certificate to be payable to the Insular Treasurer on demand in the amount directed by the court to be deposited. The certificate and the moneys represented thereby shall be subject to the orders and final disposition of the court. And in case suit has already been commenced on any land and the money deposited with the Insular Treasurer at the date of the passage of this Act, the said money may, upon proper order of the court, be withdrawn from the Treasury by the railway corporation which deposited the same, and a certificate of deposit, as above described may be deposited in lieu thereof. And the court is empowered and directed, by appropriate order and writ if necessary, to place the railway corporation in possession of the land, upon the making of the deposit.
The defendant having claimed that his damages would amount to P19,398.42, the company deposited this sum, but it is very evident from the terms of the Act that this deposit was in no sense a payment nor an offer of payment by the company for the land. It simply guaranteed that the plaintiff would pay whatever sum might eventually be awarded to the defendant. The defendant had no right to withdraw this money on the 3d day of February, 1907, nor did he acted upon the report of the commissioners and entered its judgment, which it did on the 16th day of June, 1908. We therefore hold that the defendant would not secure just compensation for the property taken unless he received interest on its value from the 2d day of February, 1907, until the 16th day of June, 1908.
Solon soon became the basis for the award of interest in expropriation cases, until the payment of interest became an established part of every case in which the taking and payment were not contemporaneously made.16
In Land Bank of the Philippines v. Wycoco,17 however, the Court came to explicitly rule that interest is to be imposed on the just compensation only in case of delay in its payment, which fact must be sufficiently established. Significantly, Wycoco was moored on Article 2209, Civil Code, which provides:
Article 2209. If the obligation consists in the payment of money and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six per cent per annum. (1108)
`The history of this case proves that Land Bank did not incur delay in the payment of the just compensation. As earlier mentioned, after the petitioners voluntarily offered to sell their lands on October 12, 1995, DAR referred their VOS applications to Land Bank for initial valuation. Land Bank initially fixed the just compensation at P165,484.47/hectare, that is, P86,900,925.88, for AFC, and P164,478,178.14, for HPI. However, both petitioners rejected Land Bank’s initial valuation, prompting Land Bank to open deposit accounts in the petitioners’ names, and to credit in said accounts the amounts equivalent to their valuations. Although AFC withdrew the amount of P26,409,549.86, while HPI withdrew P45,481,706.76, they still filed with DARAB separate complaints for determination of just compensation. When DARAB did not act upon their complaints for more than three years, AFC and HPI commenced their respective actions for determination of just compensation in the Tagum City RTC, which rendered its decision on September 25, 2001.
It is true that Land Bank sought to appeal the RTC’s decision to the CA, by filing a notice of appeal; and that Land Bank filed in March 2003 its petition for certiorari in the CA only because the RTC did not give due course to its appeal. Any intervening delay thereby entailed could not be attributed to Land Bank, however, considering that assailing an erroneous order before a higher court is a remedy afforded by law to every losing party, who cannot thus be considered to act in bad faith or in an unreasonable manner as to make such party guilty of unjustified delay. As stated in Land Bank of the Philippines v. Kumassie Plantation:18
The mere fact that LBP appealed the decisions of the RTC and the Court of Appeals does not mean that it deliberately delayed the payment of just compensation to KPCI. x x x It may disagree with DAR and the landowner as to the amount of just compensation to be paid to the latter and may also disagree with them and bring the matter to court for judicial determination. This makes LBP an indispensable party in cases involving just compensation for lands taken under the Agrarian Reform Program, with a right to appeal decisions in such cases that are unfavorable to it. Having only exercised its right to appeal in this case, LBP cannot be penalized by making it pay for interest.
The Third Division justified its deletion of the award of interest thuswise:
AFC and HPI now blame LBP for allegedly incurring delay in the determination and payment of just compensation. However, the same is without basis as AFC and HPI’s proper recourse after rejecting the initial valuations of respondent LBP was to bring the matter to the RTC acting as a SAC, and not to file two complaints for determination of just compensation with the DAR, which was just circuitous as it had already determined the just compensation of the subject properties taken with the aid of LBP.
In Land Bank of the Philippines v. Wycoco, citing Reyes v. National Housing Authority and Republic v. Court of Appeals, this Court held that the interest of 12% per annum on the just compensation is due the landowner in case of delay in payment, which will in effect make the obligation on the part of the government one of forbearance. On the other hand, interest in the form of damages cannot be applied, where there was prompt and valid payment of just compensation. Thus:
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.
xxx This allowance of interest on the amount found to be the value of the property as of the time of the taking computed, being an effective forbearance, at 12% per annum should help eliminate the issue of the constant fluctuation and inflation of the value of the currency over time. Article 1250 of the Civil Code, providing that, in case of extraordinary inflation or deflation, the value of the currency at the time of the establishment of the obligation shall be the basis for the payment when no agreement to the contrary is stipulated, has strict application only to contractual obligations. In other words, a contractual agreement is needed for the effects of extraordinary inflation to be taken into account to alter the value of the currency.
It is explicit from LBP v. Wycoco that interest on the just compensation is imposed only in case of delay in the payment thereof which must be sufficiently established. Given the foregoing, we find that the imposition of interest on the award of just compensation is not justified and should therefore be deleted.
It must be emphasized that "pertinent amounts were deposited in favor of AFC and HPI within fourteen months after the filing by the latter of the Complaint for determination of just compensation before the RTC". It is likewise true that AFC and HPI already collected ₱149.6 and ₱262 million, respectively, representing just compensation for the subject properties. Clearly, there is no unreasonable delay in the payment of just compensation which should warrant the award of 12% interest per annum in AFC and HPI’s favor.
The foregoing justification remains correct, and is reiterated herein.
Lastly, approving the second motion for reconsideration will surely produce more harm than good. In addition to the costly sacrifice of the long-standing doctrine of immutability, we will thereby be sending the wrong impression that a private claim had primacy over public interest. There are many other landowners already paid their just compensation by virtue of final judgments, but who may believe themselves still entitled also to claim interest based on the supposed difference between the desired valuations of their properties and the amounts of just compensation already paid to them. To reopen their final judgments will definitely open the floodgates to petitions for the resurrection of litigations long ago settled. This Court cannot allow such scenario to happen.
WHEREFORE, the Court denies the petitioners’ second motion for reconsideration (with respect to the denial of the award of legal interest and attorney's fees), and reiterates the decision dated February 6, 2007 and the resolution dated December 19, 2007 of the Third Division.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
ANTONIO T. CARPIO
Associate Justice |
RENATO C. CORONA
Associate Justice |
CONCHITA CARPIO MORALES
Associate Justice |
MINITA V. CHICO-NAZARIO
Associate Justice |
PRESBITERO J. VELASCO, JR.
Associate Justice |
ANTONIO EDUARDO B. NACHURA
Associate Justice |
TERESITA J. LEONARDO-DE CASTRO
Associate Justice |
ARTURO D. BRION
Associate Justice |
DIOSDADO M. PERALTA
Associate Justice |
MARIANO C. DEL CASTILLO
Associate Justice |
ROBERTO A. ABAD
Associate Justice |
MARTIN S. VILLARAMA, JR.
Associate Justice |
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court.
REYNATO S. PUNO
Chief Justice
Footnotes
1 G.R. No. 143275, September 10, 2002, 388 SCRA 537.
2 Fariscal Vda. De Emnas v. Emnas, L-26095, January 28, 1980, 95 SCRA 470.
3 Gallardo-Corro v. Gallardo, G.R. No. 136228, January 30, 2001, 350 SCRA 568, 578; Gomez v. Presiding Judge, RTC Br. 15, Ozamis City, 249 SCRA 432, 438-439.
4 Siy v. National Labor Relations Commission, G..R. No. 158971, August 25, 2005, 468 SCRA 154, 161-162.
5 Kline v. Murray, 257 P. 465, 79 Mont. 530.
6 Flores v. Court of Appeals, G.R. No. 97556 & 101152, July 29, 1996.
7 Land Bank of the Philippines v. Arceo, G.R. No. 158270, July 21, 2008, 559 SCRA 85.
8 Temic Semiconductors, Inc. Employees Union (TSIEU)-FFW v. Federation of Free Workers (FFW), G..R. No. 160993, May 20, 2008, 554 SCRA 122, 134.
9 A.M. No. CA-02-33, July 31, 2002, 385 SCRA 509.
10 G..R. No. 103276, April 11, 1996, 256 SCRA 171.
11 G..R. No. 160753, September 30, 2004, 439 SCRA 675.
12 G..R. Nos. 162335 & 162605, December 18, 2008, 574 SCRA 468.
13 Article III, Section 9 of the 1987 Constitution.
14 Republic v. Court of Appeals, G..R. No. 146587, July 2, 2002, 383 SCRA 611, 622-623.
15 13 Phil. 34.
16 Republic v. Juan, 92 SCRA 26, 57-58, G.R. No. L-24740, July 30, 1979..
17 G.R. No. 140160, January 13, 2004, 419 SCRA 67.
18 G.R. No. 177404, June 25, 2009.
The Lawphil Project - Arellano Law Foundation
DISSENTING OPINION
CHICO-NAZARIO, J.:
For resolution by the Court En Banc are the (1) the Motion for Leave to File and Admit Second Motion for Reconsideration, and (2) Second Motion for Reconsideration filed by Apo Fruits Corporation (AFC) and Hijo Plantation, Inc. (HPI).
To recall, the present Petition for Review on Certiorari originated from Agrarian Cases No. 54-2000 and No. 55-2000, instituted by AFC and HPI, respectively, before the Regional Trial Court (RTC), Branch 2, Tagum City (acting as a Special Agrarian Court), praying for the determination and payment of just compensation for their land, taken and distributed by the Government under the Comprehensive Agrarian Reform Program (CARP).
On 25 September 2001, the RTC rendered its Decision, substantially adopting the appraisal made by the court-appointed commissioners, thus, decreeing:
WHEREFORE, consistent with all the foregoing premises, judgment is hereby rendered by this Special Agrarian Court where it has determined judiciously and now hereby fixed the just compensation for the 1,388.6027 hectares of lands and its improvements owned by the plaintiffs: APO FRUITS CORPORATION and HIJO PLANTATION, INC., as follows:
First – Hereby ordering after having determined and fixed the fair, reasonable and just compensation of the 1,338.6027 hectares of land and standing crops owned by plaintiffs – APO FRUITS CORPORATION and HIJO PLANTATION, INC., based at only P103.33 per sq. meter, ONE BILLION THREE HUNDRED EIGHTY-THREE MILLION ONE HUNDRED SEVENTY-NINE THOUSAND PESOS (₱1,383,179,000.00), Philippine Currency, under the current value of the Philippine Peso, to be paid jointly and severally to the herein PLAINTIFFS by the Defendants-Department of Agrarian Reform and its financial intermediary and co-defendant Land Bank of the Philippines, thru its Land Valuation Office;
Second – Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay plaintiffs-APO FRUITS CORPORATION and HIJO PLANTATION, INC., interests on the above-fixed amount of fair, reasonable and just compensation equivalent to the market interest rates aligned with 91-day Treasury Bills, from the date of the taking in December 9, 1996, until fully paid, deducting the amount of the previous payment which plaintiffs received as/and from the initial valuation;
Third – Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally the Commissioners’ fees herein taxed as part of the costs pursuant to Section 12, Rule 67 of the 1997 Rules of Civil Procedure, equivalent to, and computed at Two and One-Half (2 ˝) percent of the determined and fixed amount as the fair, reasonable and just compensation of plaintiffs’ land and standing crops plus interest equivalent to the interest of the 91-Day Treasury Bills from date of taking until full payment;
Fourth - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally the attorney’s fees to plaintiffs equivalent to, and computed at ten (10%) Percent of the determined and fixed amount as the fair, reasonable and just compensation of plaintiffs’ land and standing crops, plus interest equivalent to the 91-Day Treasury Bills from date of taking until the full amount is fully paid;
Fifth - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office to deduct from the total amount fixed as fair, reasonable and just compensation of plaintiffs’ properties the initial payment paid to the plaintiffs;
Sixth - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay the costs of the suit; and
Seventh - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay all the aforementioned amounts thru the Clerk of Court of this Court, in order that said Court Officer could collect for payment any docket fee deficiency, should there be any, from the plaintiffs.1
Acting on the Motion for Reconsideration of the Land Bank of the Philippines (LBP), the RTC issued an Order dated 5 December 2001, modifying its earlier Decision, as follows:
WHEREFORE, premises considered, IT IS HEREBY ORDERED that the following modifications as they are hereby made on the dispositive portion of this Court’s consolidated decision be made and entered in the following manner, to wit:
On the Second Paragraph of the Dispositive Portion which now reads as follows, as modified:
Second - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay plaintiffs-APO FRUITS CORPORATION and HIJO PLANTATION, INC., interest at the rate of Twelve (12%) Percent per annum on the above-fixed amount of fair, reasonable and just compensation computed from the time the complaint was filed until the finality of this decision. After this decision becomes final and executory, the rate of TWELVE (12%) PERCENT per annum shall be additionally imposed on the total obligation until payment thereof is satisfied, deducting the amounts of the previous payments by Defendant-LBP received as initial valuation;
On the Third Paragraph of the Dispositive Portion which Now Reads As Follows, As Modified:
Third - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally the Commissioners’ fees herein taxed as part of the costs pursuant to Section 12, Rule 67 of the 1997 Rules of Civil Procedure, equivalent to, and computed at Two and One-Half (2 ˝) percent of the determined and fixed amount as the fair, reasonable and just compensation of plaintiffs’ land and standing crops and improvements;
On the Fourth Paragraph of the Dispositive Portion which Now Reads As follows, As Modified:
Fourth - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally the attorney’s fees to plaintiffs equivalent to, and computed at ten (10%) Percent of the determined and fixed amount as the fair, reasonable and just compensation of plaintiffs’ land and standing crops and improvements.
Except for the above-stated modifications, the consolidated decision stands and shall remain in full force and effect in all other respects thereof.2
LBP filed its Notice of Appeal with the RTC. In an Order dated 4 November 2002, the RTC refused to give due course to the Notice of Appeal of LBP since ordinary appeal was not the proper remedy from a decision on the determination of just compensation, rendered by a special agrarian court, based on Land Bank of the Philippines v. De Leon.3 The RTC, instead, ordered LBP to file a Petition for Review within the reglementary period.
This prompted LBP to file a Petition for Certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 76222. In its Decision4 dated 12 February 2004, the appellate court granted the Petition of LBP, finding that the RTC committed grave abuse of discretion in refusing to give due course to the Notice of Appeal of LBP. It ratiocinated that De Leon should not be given retroactive effect so as to prejudice the remedy still available to LBP under the law at the time it filed its appeal.
AFC and HPI then sought recourse from this Court by filing the instant Petition for Review on Certiorari. On 6 February 2007, the Third Division of this Court promulgated its Decision, partially granting the Petition for Review of AFC and HPI, at the same time, resolving the case on the merits by affirming the Decision dated 12 February 2004 and Resolution dated 21 June 2004 of the RTC. According to the dispositive portion of the Decision of the Third Division of this Court:
WHEREFORE, premises considered, the instant Petition is PARTIALLY GRANTED. While the Decision, dated 12 February 2004, and Resolution, dated 21 June 2004, of the Court of Appeals in CA-G.R. SP No. 76222, giving due course to LBP’s appeal, are hereby AFFIRMED, this Court, nonetheless, RESOLVES, in consideration of public interest, the speedy administration of justice, and the peculiar circumstances of the case, to give DUE COURSE to the present Petition and decide the same on its merits. Thus, the Decision, dated 25 September 2001, as modified by the Decision, dated 5 December 2001, of the Regional Trial Court of Tagum City, Branch 2, in Agrarian Cases No. 54-2000 and No. 55-2000 is AFFIRMED. No costs.5
From the foregoing Decision, LBP filed an Omnibus Motion for (a) reconsideration of the said decision; (b) referral of the case to the Supreme Court sitting En Banc; and (c) setting of its motion for oral argument.6
In its Resolution dated 19 December 2007, the Third Division of the Court partially granted the Motion for Reconsideration of LBP and accordingly made the following modifications of its previous Decision:
WHEREFORE, premises considered, the Motion for Reconsideration is partially granted as follows:
(1) The award of 12% interest rate per annum in the total amount of just compensation is DELETED.
(2) This case is ordered remanded to the RTC for further hearing on the amount of Commissioners’ Fees.
(3) The award of attorney’s fees is DELETED.
(4) The Motion for Referral of the case to the Supreme Court sitting En Banc and the request or setting of the Omnibus Motion for Oral Arguments are all DENIED for lack of merit. In all other respects, our Decision dated 6 February 2007 is MAINTAINED.7
The Third Division of this Court deleted the award for interest on the just compensation due AFC and HP, based on the finding that petitioners were not entitled to interest because there was no delay on the part of LBP.
The Third Division likewise deleted the award for attorney’s fees, holding that:
Contracts for attorney’s services in this jurisdiction stand upon an entirely different footing from contracts for the payment of compensation for any other service.
x x x [A]n attorney is not entitled in the absence of express contract to recover more than a reasonable compensation for his services; and even when an express contract is made, the court can ignore it and limit the recovery to reasonable compensation if the amount of the stipulated fee is found by the court to be reasonable.
The general rule is that attorney’s fees cannot be recovered as part of damages because of the policy that no premium should be placed on the right to litigate. They are not to be awarded every time a party wins a suit. The power of the court to award attorney’s fees under Article 2208 of the Civil Code demands factual, legal and equitable justification. A perusal of Article 2208 of the Revised Civil Code will reveal that the award of attorney’s fees in the form of damages is the exception rather than the rule for it is predicated upon the existence of exceptional circumstances.
In all cases, it must be reasonable, just and equitable if the same is to be granted. It is necessary for the court to make findings of fact and law to justify the grant of such award. The matter of attorney’s fees must be clearly explained and justified by the trial court in the body of its decision.
In this case, the RTC failed to substantiate its award of attorney’s fees which amounts to ten percent (10%) of the award of ₱1,383,179,000 and is equivalent to ₱138,317,900.00.8
Dissatisfied with the aforementioned Resolution, all the parties filed their respective Motions for Reconsideration.
In its Resolution dated 30 April 2008, the Third Division of the Court refused to reconsider its earlier Resolution of 19 December 2007.
Entry of Judgment was made in this case on 16 May 2008.9
Despite the entry of judgment, AFC and HPI submitted the following pleadings on 28 May 2008: (1) Motion for Leave to File and Admit Second Motion for Reconsideration; (2) Second Motion for Reconsideration, with respect to the denial of the award of legal interest and attorney’s fees; and (3) Motion to Refer the Second Motion for Reconsideration to the Honorable Court En Banc. 10
AFC and HPI maintained that there were meritorious and compelling reasons to grant all three of their Motions. AFC and HPI basically argued in their Second Motion for Reconsideration that:
I
WITH ALL DUE RESPECT, THE HONORABLE COURT SHOULD RECONSIDER AND SET ASIDE ITS RESOLUTION DATED 30 APRIL 2008 INSOFAR AS IT DELETED THE AWARD OF LEGAL INTEREST AT THE RATE OF TWELVE PERCENT (12%) PER ANNUM ON THE UNPAID PORTION OF THE AMOUNT DETERMINED BY THE HONORABLE COURT TO BE THE FAIR, REASONABLE AND JUST COMPENSATION FOR MOVANTS AFC AND HPI’S PROPERTIES TO BE CONSISTENT WITH THE RULINGS OF THE HONORABLE COURT IN A NUMBER OF CASES THAT IF THERE IS DELAY IN THE PAYMENT OF JUST COMPENSATION, IT WILL RESULT IN THE IMPOSITION OF TWELVE PERCENT (12%) LEGAL INTEREST PER ANNUM.
II
WITH ALL DUE RESPECT, MOVANTS AFC AND HPI WERE NOT THE REASON FOR THE DELAY IN THE DETERMINATIION OF THE JUST COMPENSATION FOR ITS PROPERTIES BECAUSE WHEN THEY FILED THE CASE BEFORE THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD ("DARAB") IN 1997, THEY WERE MERELY AVAILING OF THE ADMINISTRATIVE REMEDIES UNDER THE COMPREHENSIVE AGRARIAN REFORM LAW ("CARL"). AT ANY RATE, EVEN IF ASSUMING THAT MOVANTS AFC AND HPI WERE WRONG IN RESORTING TO THE DARAB AND SHOULD HAVE GONE DIRECTLY TO THE REGIONAL TRIAL COURT ACTING AS A SPECIAL AGRARIAN COURT FOR THE DETERMINATION OF JUST COMPENSATION, THEN LEGAL INTEREST IS STILL DUE FROM THE DATE OF THE FILING BY THE MOVANTS AFC AND HPI OF THE COMPLAINT BEFORE THE REGIONAL TRIAL COURT IN TAGUM CITY, DAVAO DEL NORTE ON 17 MAY 2000.
III
WITH ALL DUE RESPECT, THE HONORABLE COURT SHOULD RECONSIDER ITS RESOLUTION DATED 30 APRIL 2008 INSOFAR AS IT REMOVED THE AWARD OF ATTORNEY’S FEES NOTWITHSTANDING THE FACT THAT MOVANTS AFC AND HPI HAVE SUFFICIENTLY SHOWN THAT THEY ARE ENTITLED TO THE SAID AWARD.11
AFC and HPI vigorously protested the deletion by the Third Division of the Court, in the Resolution dated 19 December 2007, of the award for interest, contending that in doing so, the Third Division departed from the well-settled ruling in Philippine Railway Company v. Solon,12 Republic v. Court of Appeals,13 Land Bank of the Philippines v. Wycoco,14 and Land Bank of the Philippines v. Imperial,15 which clearly recognized the entitlement of the landowner to legal interest of twelve percent (12%) in cases of just compensation.16 Even assuming that AFC and HPI were mistaken in resorting to the Department of Agrarian Reform Adjudication Board instead of raising the issue of just compensation directly before the RTC, acting as Special Agrarian Court, they should, at the very least, be awarded legal interest from the filing of the Complaint on 17 May 2000 until full payment on 16 May 2008.17
AFC and HPI asserted that the Third Division of the Court also gravely erred in deleting the award for attorney’s fees, insisting that they were able to establish their entitlement to the same. Thus, AFC and HPI prayed in their Second Motion for Reconsideration that the Court En Banc:
(1) Award legal interest at the rate of twelve percent (12%) per annum from the time of the taking on 09 December 1996 until respondent LBP’s payment on 09 May 2008 or alternatively, from the time of judicial demand on 17 May 2000 until respondent LBP’s payment on 09 May 2008; and
(2) Award attorney’s fees of ten percent (10%) or such amount as the Honorable Court may deem justified, reasonable and appropriate.18
In a Resolution19 dated 2 June 2008, the Third Division of the Court noted without action the three Motions of AFC and HPI in view of its earlier Resolution dated 19 December 2007, denying with finality the Motion for Partial Reconsideration of all parties.
Extremely assiduous, AFC and HPI still filed on 2 February 2009 an Urgent Motion to Resolve,20 prodding anew the Third Division of this Court to reconsider its deletion of the awards for legal interest and attorney’s fees.
For its part, LBP filed a Manifestation21 with the following contents:
RESPONDENT LAND BANK OF THE PHILIPPINES (LBP, for brevity), by counsel and to this Honorable Court, respectfully manifests that on 22 July 2008, it received a copy of the Entry of Judgment in the above-captioned case, stating inter alia that the Decision dated 06 February 2007 and the Resolution dated 19 February 2007 became final and executory on 16 May 2008.
In view of the foregoing, no further action can be taken on the Urgent Motion to Resolve dated 19 January 2009 which movants Apo Fruits Corporation and Hijo Plantation, Inc. filed with the Honorable Court.
WHEREFORE, it is respectfully prayed of this Honorable Court that this Manifestation be duly NOTED.
Upon closer scrutiny, the Third Division of the Court found ample basis for the motion of AFC and HPI to have their Motion for Leave to File and Admit Second Motion for Reconsideration and Second Motion for Reconsideration referred to the Court En Banc. Subsequently, the Court En Banc accepted the referral on 8 September 2009.
MAJORITY OPINION
The Majority opinion raised the following arguments for the denial of the second motion for reconsideration of AFC and HPI, to wit:
1) immutability of judgments, and
2) absence of delay does not entitle AFC and HPI to be awarded legal interest.
As to immutability of judgment, the majority opinion insists that although the immutability doctrine admits several exceptions, like: (1) the correction of clerical errors; (2) the so-called nunc pro tunc entries that cause no prejudice to any party; (3) void judgments; and (4) whenever circumstances transpire after the finality of the decision rendering its execution unjust and inequitable,22 none of the exceptions applies herein, simply because the matters involved herein are plainly different from those involved in the exceptional cases.
The matter involved herein concerns only AFC and HPI’s mere private claim for interest, which cannot even be classified even be classified as unprecedented. Even worse is that AFC and HPI’s private claim does not qualify either as a substantial or transcendental matter, or as an issue of paramount public interest, for no special or compelling circumstance has been present to warrant the relaxation of the doctrine of immutability in their favor.
The majority next argue that AFC and HPI are not entitled to interest on the ground that no interest is due unless there is delay in payment of just compensation. They underscored that AFC and HPI were paid about the time of the taking of the properties. Any delay in the resolution of the case is attributable to them. The fixing of just compensation could have been speeded up had AFC and HPI immediately brought the complaints for that purpose to the proper RTC, acting as SAC. Nonetheless, AFC and HPI have not assailed the RTC’s handling of their action for judicial determination of just compensation.
In all, the majority stress that LBP could not be held responsible for any delay in the payment of just compensation due to AFC and HPI which would justify the payment of legal interest to the latter.
DISSENTING OPINION
On the propriety of reopening this case, the Court is well aware of the fact that the Decision dated 6 February 2007 of the Third Division already became final and executory with the entry of judgment on 16 May 2008.23 Public policy and sound practice demand that, at the risk of occasional errors, judgments of courts should become final at some definite date fixed by law. When judgments gain finality, they become inviolable and impervious to modification. They may no longer be reviewed or in any way modified directly or indirectly, even by this Court.24
Nonetheless, the recall of entries of judgment, albeit rare, is not a novelty.25 In Tan Tiac Chiong v. Hon. Cosico,26 this Court already denied with finality two successive motions for reconsideration of the judgment it earlier rendered; yet, it still recalled the Entry of Judgment in the interest of substantial justice. The Court had also sanctioned the recall of entries of judgment in cases such as Manotok IV v. Barque27 and Barnes v. Padilla,28 again, on the ground of substantial justice. Particularly, in Barnes, the Court justified the relaxation of the procedural rule on finality of judgment, thus:
However, this Court has relaxed this rule in order to serve substantial justice considering (a) matters of life, liberty, honor or property, (b) the existence of special or compelling circumstances, (c) the merits of the case, (d) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules, (e) a lack of any showing that the review sought is merely frivolous and dilatory, and (f) the other party will not be unjustly prejudiced thereby.
Invariably, rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must always be eschewed. Even the Rules of Court reflects this principle. The power to suspend or even disregard rules can be so pervasive and compelling as to alter even that which this Court itself had already declared to be final. (Emphases ours.)
Indeed, the Court reserves the power to suspend procedural rules and technicalities when they tend to defeat, rather than serve, the interest of substantial justice. In Ginete v. Court of Appeals,29 the Court expounded:
For when the operation of the Rules will lead to an injustice we have, in justifiable instances, resorted to this extraordinary remedy to prevent it. The rules have been drafted with the primary objective of enhancing fair trials and expediting justice. As a corollary, if their application and operation tend to subvert and defeat, instead of promote and enhance it, their suspension is justified. In the words of Justice Antonio P. Barredo in his concurring opinion in Estrada v. Sto Domingo, "[T]his Court, through the revered and eminent Mr. Justice Abad Santos, found occasion in the case of C. Viuda de Ordoveza v. Raymundo, to lay down for recognition in this jurisdiction, the sound rule in the administration of justice holding that `it is always in the power of the court (Supreme Court) to suspend its own rules or to except a particular case from its operation, whenever the purposes of justice require it x x x."
The Rules of Court were conceived and promulgated to set forth guidelines in the dispensation of justice but not to bind and chain the hand that dispenses it, for otherwise, courts will be mere slaves to or robots of technical rules, shorn of judicial discretion. That is precisely why courts, in rendering justice have always been, as they in fact ought to be, conscientiously guided by the norm that on the balance, technicalities take a backseat to substantive rights, and not the other way around. As applied to instant case, in the language of Justice Makalintal, technicalities "should give way to the realities of the situation."
There are special circumstances in this case which convince the Court to recall the Entry of Judgment made herein, take a second hard look at the positions espoused by AFC and HPI in their Second Motion for Reconsideration30 and act accordingly.
AFC and HPI are entitled to interest in the payment of just compensation.
Nature of expropriation proceedings
Public use and just compensation are the bedrock of eminent domain.
Republic v. Court of Appeals31 very well enucleated the nature of expropriation proceedings:
Expropriation proceedings are not adversarial in the conventional sense, for the condemning authority is not required to assert any conflicting interest in the property. Thus, by filing the action, the condemnor in effect merely serves notice that it is taking title and possession of the property, and the defendant asserts title or interest in the property, not to prove a right to possession, but to prove a right to compensation for the taking. (citing US vs. Certain Lands in Highlands (DY NY) 48 F Supp 306; San Bernardino Valley Municipal Water District vs. Gage Canal Co. (4th Dist.), 226 Cal App 2d 206, 37 Cal Rptr 856.)
Obviously, however, the power is not without its limits: first, the taking must be for public use, and second, that just compensation must be given to the private owner of the property. These twin proscriptions have their origin in the recognition of the necessity for achieving balance between the State interests, on the other hand, and private rights, upon the other hand, by effectively restraining the former and affording protection to the latter. x x x.
When the state wields its power of eminent domain, there arises a correlative obligation on its part to pay the owner of the expropriated property just compensation. If it fails, there is a clear case of injustice that must be redressed.32 Though it is the duty of the court to protect the weak and the underprivileged, this duty shall not be carried out as to deny justice to the landowner.33
The Court was even more emphatic in Barangay Sindalan, San Fernando Pampanga v. Court of Appeals34 when it reiterated that the power of eminent domain can only be exercised for public use and with just compensation. It cautioned that taking an individual’s private property is a deprivation which can only be justified by a higher good – which is public use – and can only be counterbalanced by just compensation. Without these safeguards, the taking of property would not only be unlawful, immoral and null and void, but would also constitute a gross and condemnable transgression of an individual’s basic right to property as well.1avvphi1
Stated otherwise, the immediate taking of the property of the landowner, which immediately deprives him of the possession of the same and its use, highlights the exercise of the state’s power of eminent domain.
In this case, AFC and HPI voluntarily offered to sell their properties to the DAR on 12 October 1995. Titles over the properties of AFC and HPI were cancelled not very long after, and in their place a new certificate of title was issued in the name of the Republic of the Philippines on 9 December 1996. After the issuance of the Certificate of Title in the name of the Republic, the Register of Deeds of Davao, upon the request of the DAR, issued transfer certificates of title and Certificate of Land Ownership Awards to qualified farmer-beneficiaries. The farmer-beneficiaries took possession of the properties on 2 January 1997.35 By this time, AFC and HPI had already been deprived of the use and fruits of their property.36 They also lost control of the property as of that date.37
JUST COMPENSATION; ACCRUAL OF LEGAL INTEREST
While it is true that all private properties are subject to the need of the government, and the government may take them whenever the necessity or exigency of the occasion demands, however, the Constitution guarantees that when this governmental right of expropriation is exercised, it shall be attended by just compensation.38
From the taking of private property by the government under the power of eminent domain, there arises an implied promise to compensate the owner for his loss.
Significantly, the above-mentioned provision of Section 9, Article III of the Constitution is not a grant but a limitation of power. This limiting function is in keeping with the philosophy of the Bill of Rights against the arbitrary exercise of governmental powers to the detriment of the individual’s rights. Given this function, the provision should therefore be strictly interpreted against the expropriator, the government, and liberally in favor of the property owner.39
In our Decision, we have provided an elucidation on what constitutes just compensation, thus:
The concept of just compensation embraces not only the correct determination of the amount to be paid to the owners of the land, but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered "just" inasmuch as the property owner is being made to suffer the consequences of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss.40 Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator.41 It has been repeatedly stressed by this Court that the measure is not the taker’s gain but the owner’s loss.42 The word "just" is used to intensify the meaning of the word "compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, and ample.43 (Emphases supplied.)
Republic v. Court of Appeals,44 further broadened the concept of "just compensation" when it underscored that:
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 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. (Emphasis supplied.)
Just compensation, thus, must embrace not only the correct (real, substantial, full and ample) determination of the amount to be paid to the owners of the land but also its payment within a reasonable time from the taking of the land to enable the landowners to cope with the loss; otherwise, interest in the nature of damages from the time of the taking of the property up to the actual payment of just compensation, is in order.45
Verily, jurisprudence has justifiably, wisely and correctly regarded the transaction between the landowners and the government in expropriation proceedings, under the foregoing circumstances, as one of loan or forbearance of money,46 which carries payment of interest in case of delay in payment.
The legal interest for loan or forbearance of money is 12% per annum, citing Central Bank Circular No. 416 dated 29 July 1974.47 However, Santos Ventura Hocorma Foundation, Inc. succinctly emphasized that the 12% per annum applies only to loans or forbearance of money.48
The Court further explained, in Reyes v. National Housing Authority,49 that 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. The allowance of interest – computed at 12% per annum -- on the amount found to be the value of the property as of the time of the taking, being an effective forbearance, should help eliminate the issue of the constant fluctuation and inflation of the value of the currency over time. Such is the true role or nature of interest in expropriation cases.
Said interest runs as a matter of law and follows as a matter of course from the right of the landowner, to be placed in as good a position as money can accomplish, as of the date of the taking.50 Under this view, the interest awarded is deemed part of the just compensation required to be paid to the owner.51
Republic v. Juan, 52 very succinctly synthesized our adherence to the prevailing view when it expostulated:
In this jurisdiction, a study of the cases decided by this Court with respect to the award of interest to the condemnee where there is a gap of time between the taking and the payment, shows that We tend to follow the view just discussed. The first case – it would appear – where the question of interest arose in this jurisdiction was the Philippine Railway Co. vs. Solon, February 20, 1909, 13 Phil. 35-45. The two issues taken there in connection with interest were: (1) From what time should interest be reckoned, from time of the taking possession of the property by the government or from judgment of the trial court; and (2) whether on appeal, appellant-condemnee is entitled to interest during the pendency of the appeal. In disposing of the issues, the Court, relying heavily on American jurisprudence, appears to treat interest as part of just compensation and as an additional amount sufficient to place the owner "in as good a position as money can accomplish, as of the date of the taking." Thus, the Court declared:
"It remains to consider what interest the defendant is entitled to from the last named date. It appears from the record that the company opposed the confirmation of the award. Its objections were so far successful that the court reduced the amount awarded by the commissioners. The owner was compelled to appeal and in his appeal has been so far successful as to reverse the action of the court below. Under these circumstances we think he is entitled to interest on the award until the final determination of this proceeding. What the result would be if he had failed in his appeal, we do not decide. The interest thus allowed will be interest upon the amount awarded by the commissioners from the 2nd day of February 1907, until payment" (13 Phil. 40-44, italics supplied.)
The Solon case thereafter became the basis of award of interest on expropriation cases like Philippine Railway v. Duran, 33 Phil. 159 [1916]; Manila Railroad Co. v. Alano, 36 Phil. 501 [1917]; Manila Railroad Co. v. Attorney General, 41 Phil. 177 [1920]; Alejo v. Provincial Government of Cavite, 54 Phil. 304 [1930]; Tayabas v. Perez, 66 Phil. 470 [1938]; Republic v. Gonzales, 94 Phil. 957 [1954]; Republic v. Lara, 96 Phil. 172 [1954]; Phil. Executive Commission v. Estacio, 98 Phil. 219 [1956]; Republic of the Philippines v. Deleste, 46 al., 99 Phil. 1035 [1956]; Republic v. Garcellano, 103 Phil. 237 [1958]; Yaptinchay, 108 Phil. 1053 [1960]; Republic v. Tayengco, 19 SCRA 900 [1967], and many others, until the matter of payment of interest became an established part of every case where taking and payment were not contemporaneously made.
Hence, in Republic v. Court of Appeals,53 the Court simply imposed legal interest of 12% per annum in the just compensation.
In Land Bank of the Philippines v. Imperial,54 12% legal interest was awarded in favor of the landowner as damages for the delay in the payment of the just compensation.
Nepomuceno v. City of Surigao55 and Ansaldo v. Tantuico, Jr.56 invoked by AFC/HPI contain the declaration that "the value of the property expropriated shall earn interest at the legal rate until full payment is effected."
All given, it now becomes clear that the Court has consistently awarded the landowner legal interest of 12% per annum from the time of the taking of the property until fully paid of his just compensation which must be "real, substantial, full and ample."57 We have constantly accentuated that the property owner is made to suffer the consequences of being immediately deprived of his land. Worse still, he is being made to wait before actually receiving the just amount extremely necessary to cope with his loss.
Applying the 12% rate on the balance of just compensation due AFC and HPI, from the taking of their properties on 9 December 1996, until the full payment of said balance by the LBP on 9 May 2008, AFC and HPI claim interest in the total amount of ₱1,331,124,223.05, computed as follows:
| Just Compensation |
₱971,409,831.68 |
Legal Interest from 12/09/1996
To 05/09/2008 @ 12% per annum |
| 12/09/1996 to 12/31/1996 23 days |
7,345,455.17 |
|
| 01/01/1997 to 12/31/2007 11 years |
1,282,260,977.82 |
|
| 01/01/2008 to 05/09/2008 130 days |
41,517,790.07 |
1,331,124,223.0558 |
Law and jurisprudence empower courts to equitably reduce interest rates59 and penalty charges. Under Article 1229 of the Civil Code, "[t]he judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor." Article 1229 of the Civil Code provides that the court shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. And, even if there has been no performance, the penalty may also be reduced if it is iniquitous or leonine. While there may be no more ceiling on interest rates on obligations, it does not mean that creditors have carte blanche authority to impose interest rates to levels which will either enslave the debtors or lead to a hemorrhaging of the latter’s assets.60
In the following cases, the court saw it fit to reduce interest charges.
In Palmares v. Court of Appeals,61 the Court found that the penalty charge of 3% per month and attorney’s fees equivalent to 25% of the total amount due are highly inequitable and unreasonable, considering that from the principal loan of ₱30,000.00, the amount of ₱16,300.00 had already been paid even before the filing of the case.
Similarly, in Asia Trust Development v. Concept Trading Corporation,62 the Court, given that the principal obligation had been partially complied with by the respondent, affirmed the reduction of the penalty charges from 36% to 3% per annum. The Court, in Filinvest v. Court of Appeals,63 deemed that the penalty of ₱15,000.00 per day, resulting in the aggregate amount of ₱3,990,000.00, was steep and excessive, and reduced it to ₱1,881,867.66, considering that there had been substantial compliance in good faith on the part of the party obliged to pay penalty.
The Court decreased the 3% monthly or 36% annual interest penalty in Segovia Development Corporation v. J.L. Dumatol,64 to 12% interest per annum, consistent with fairness and equity, taking into account that J.L. Dumatol had already substantially complied with its contractual obligation.
In Patron v. Union Bank of the Philippines,65 the Court found the 2% monthly or 24% annual penalty charge unconscionable under the circumstances attendant to the case; i.e., the spouses Patron had made partial payments on their loan and had requested the restructuring of the same. Consequently, the Court fixed the interest rate in the case at 12% per annum.
In Diño v. Jardines,66 the Court found that 9% and 10% monthly interest rates (or 108% and 120% annual interest rates) on the principal loan of ₱165,000.00 are void for being clearly excessive, iniquitous, unconscionable and exorbitant. The Court brushed aside the fact that Jardines agreed to the said rates, although she knew the same to be exorbitant, and considered that she was constrained to do so, as she was badly in need of money at that time. The Court reduced the exorbitant rates to the 12% legal interest rate.
In the exercise of its sound discretion, this Court, in Florentino v. Supervalue, Inc.,67 tempered the penalty for the breaches committed by Florentino to 50% of the amount of the security deposits. The forfeiture of all the security deposits, in the sum of ₱192,000.00, was clearly a usurious and iniquitous penalty for the transgressions committed by petitioner therein. Supervalue, Inc. was, therefore, obligated to return 50% of ₱192,000.00 to the petitioner.
The Court likewise equitably reduced, in Bulos, Jr. v. Yasuma,68 the excessive and unconscionable interest rate of 48% per annum to 12% per annum.69
In Barons Marketing Corporation v. Court of Appeals,70 the 12% annual interest alone amounted to ₱4,500,000.00, exceeding the principal debt of ₱2,000,000.00. On top of the interest, Barons Marketing Corp. was also held liable by the Court of Appeals for attorney’s fees and collection fees equivalent to 25% of the total amount due, which included interest. Finding the attorney’s fees and collection fees manifestly exorbitant, the Court reduced the same to 10% of the principal. The same situation was extant in Development Bank of the Philippines v. Court of Appeals.71 The Court noted therein that the interests paid by debtor spouses De la Peña, which amounted to ₱233,361.50,30 inclusive of the regular interest, additional interest, penalty charges, and interest on advances, were already more than their principal obligation in the amount of ₱207,000.00. The additional interest of 18% alone amounted to ₱106,853.45,31 which was almost half of what was already paid by the spouses De la Peña. Thus, the Court reduced the additional interest of 18% per annum to 10% per annum.
In Lo v. Court of Appeals,72 the stipulated penalty in the lease agreement for failure by the lessee National Onion Growers Cooperative Marketing Association, Inc. (NOGCMAI) to pay the rent on the leased property was ₱5,000.00 for each day of delay or ₱150,000.00 per month, an amount five times the monthly rent. This penalty was not only exorbitant but also unconscionable, since NOGCMAI was delayed in surrendering the leased property because of its well-founded belief that its right of preemption to purchase the said property had been violated. Considering further that NOGCMAI was an agricultural cooperative, collectively owned by farmers with limited resources, ordering it to pay a penalty of ₱150,000.00 per month on top of the monthly rent of ₱30,000.00 would seriously deplete its income and drive it to bankruptcy. Consequently, the Court reduced the reward of penalty damages from ₱5,000.00 to ₱1,000.00 for each day of delay.
Of the same tenor is Rizal Commercial Banking Corporation v. Court of Appeals.73 The factory of therein debtor, Goyu & Sons, Inc. (GSI), was gutted in a fire. Its creditors, including the Rizal Banking Insurance Corporation (RCBC), filed their respective claims upon the proceeds of the insurance policies of GSI. Taking into account the pitiful financial condition of GSI, the Court ruled the surcharge rate ranging anywhere from 9% to 27%, plus the penalty charge of 36%, to be definitely iniquitous and unconscionable. The Court tempered these rates to 2% and 3%, respectively.
In all the aforementioned, the Court, in the exercise of its equity jurisdiction, reduced interest rates on penalty charges with due regard to the particular circumstances of each case.
We recognize that we are not at liberty to overlook settled jurisprudence on the appropriate amount of legal interest to be awarded in just compensation which is due AFC and HPI, but for several reasons which we have taken stock of, it would be unconscionable to apply the full force of the law on LBP.
We award on the basis of fairness and equity a reduced amount of legal interest, considering the following circumstances:
(1) Given that the LBP already fully paid a considerable amount of just compensation to AFC and HPI, even prior to the finality of the judgment against it, a reduced amount of legal interest would be consistent with fairness and equity.74 Jus respicit acquitatem. Law regards equity. In this case, LBP already made a full payment of just compensation to AFC and HPI on 9 May 2008 in the amount of ₱1,383,179,00 even before the decision of this court became final and executory on 16 May 2008.
(2) Even if there has been no performance, the penalty may also be reduced by the courts if it is iniquitous or unconscionable. Whether an interest rate is reasonable or iniquitous is addressed to the sound discretion of the Court, depending on the circumstances of each case. Given that the legal interest which AFC and HPI seek to recover amounts to ₱1,331,124,223.05, which amount is almost equal to the cost of just compensation,75 legal interest may be reduced on this ground, as the Court has previously reduced interest rates in cases where these were equal to or exceeded the principal amount of the debt.76
(3) Iniquitous and unconscionable interest rates are contrary to morals.77
(4) Interest rates should not be leonine or result in a hemorrhaging of assets of the LBP.78
Thus, given the particular circumstances of the instant petition, legal interest should be awarded to AFC and HPI pro hac vice,79 in the amount of ₱400,000,000.00. To the Court, 30% more or less of the total amount of legal interest that the parties seek to recover is already a fair and just amount.
In view of all the foregoing, LBP should be directed to pay AFC and HPI the legal interest due the latter upon finality of this resolution within a period of six (6) months.
As to the issue of attorney’s fees, the minority finds no reason to reverse its findings as stated in the Resolution dated 19 December 2007, that AFC and HPI failed to substantiate their entitlement to such an award.
The foregoing considered, I dissent from the view of the majority.
I therefore vote to PARTIALLY GRANT the Second Motion for Reconsideration of AFC and HPI, on the resolution of this Court dated 19 December 2007 in that Land Bank of the Philippines be ORDERED to pay AFC and HPI the amount of ₱400,000,000.00 as interest to the principal amount of ₱971,409,831.68 due the latter upon finality of this Resolution within a period of six (6) months.
MINITA V. CHICO-NAZARIO
Associate Justice
Footnotes
1 CA rollo, pp. 131-133.
2 Id. at 158-160.
3 437 Phil. 347 (2002).
4 Rollo, p. 51.
5 Id. at 440.
6 Id. at 442-488.
7 Id. at 621.
8 Apo Fruits Corporation v. Court of Appeals, G.R. No. 164195, 19 December 2007, 541 SCRA 117, 145-146.
9 Rollo, p. 1362.
10 Id. at 1322, 1329.
11 Id. at 1339-1331.
12 13 Phil. 34 (1909). The Supreme Court held in this case that the defendant, the owner, was deprived of the use of his property from the 2nd day of February 1907, until the 19th day of July 1908. He lost the use of it for this time, and it cannot be said that he received just compensation for it if he was not allowed interest upon the value of the property during that time.
13 433 Phil. 106 (2002). This Court held:
If property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interest on its just value, to be computed from the time property is taken to the time when compensation is actually paid or deposited with the court.
14 464 Phil. 83 (2004). In this case the Supreme Court held that the imposition of interest is in the nature of damages for delay in payment, which in effect makes the obligation on the part of the government one of forbearance.
15 G.R. No. 157753, 12 February 2007, 515 SCRA 449. The Supreme Court held in this case that just compensation embraces not only the correct determination of the amount to be paid to the owner, but also its payment within a reasonable time from taking. Legal interest of 12% per annum in the nature of damages is proper.
16 Rollo, p. 1326.
17 Id. at 1350.
18 Id. at 1354-1355.
19 Id. at 1360.
20 Id. at 1398.
21 Id. at 1411.
22 Temic Seiconductories, Inc., Employees Union v. Federation of Free Workers, G.R. No. 160993, 20 May 2008, 554 SCRA 122, 134.
23 Rollo, p. 1362.
24 Ang v. Republic, G.R. No. 175788, 30 June 2009; Vios v. Pantangco, Jr., G.R. No. 163103, 6 February 2009.
25 Tan Tiac Chiong v. Hon. Cosico, 434 Phil. 753, 762 (2002).
26 Id., citing Muñoz v. Court of Appeals, 379 Phil. 809 (2000).
27 G.R. No. 162335 and No. 162605, 18 December 2008, 574 SCRA 468.
28 482 Phil. 903, 915 (2004).
29 357 Phil. 36, 52 (1998).
30 The grant of a second or further motion for reconsideration by this court in meritorious cases is not without precedents. The Court reversed its judgment on a second motion for reconsideration in San Miguel Corporation v. National Labor Relations Commission, G.R. No. 82467, 29 June 1989, 174 SCRA 510; Galman v. Sandiganbayan, 228 Phil. 42 (1986); Philippine Consumers Foundation, Inc. v. National Telecommunications Commission, 216 Phil. 185 (1984); Republic v. De Los Angeles, 148-B Phil. 902 (1971) and on a third motion for reconsideration in Vir-Jen Shipping and Marine Services, Inc. v. National Labor Relations Commission, 210 Phil. 482 (1983), the Court modified or amended on a second motion for reconsideration its ruling in Cathay Pacific Airways, Ltd. v. Romillo, Jr., G.R. No. L-64276, 12 August 1986, 143 SCRA 396; Cosio v. Palilio, G.R. No. L-18452, 20 May 1966, 17 SCRA 207.
31 Supra note 13 at 118-119.
32 Republic v. Lim, G.R. No. 161656, 29 June 2005, 462 SCRA 271, 278.
33 Land Bank of the Philippines v. Heirs of Angel T. Domingo, G.R. No. 168533, 4 February 2008, 543 SCRA 627, 640.
34 G.R. No. 150640, 22 March 2007, 518 SCRA 649, 666.
35 Apo Fruits Corporation v. Court of Appeals, G.R. No. 164195, 6 February 2007, 514 SCRA 537, 542.
36 Land Bank of the Philippines v. Chico, 13 March 2009.
37 Republic v. Gonzales, 94 Phil. 956, 963 (1954).
38 Republic v. Lim, supra note 32.
39 Id. at 280.
40 Estate of Salud Jimenez v. Philippine Export Processing Zone, 402 Phil. 271 (2001); Land Bank of the Philippines v. Court of Appeals, 327 Phil. 1047, 1054 (1996), quoting Municipality of Makati v. Court of Appeals, G.R. Nos. 89898-99, 1 October 1990, 190 SCRA 207, 213.
41 Manila Railroad Co. v. Velasquez, 32 Phil. 286, 313 (1915).
42 Province of Tayabas v. Perez, 66 Phil. 467, 469 (1938); J.M. Tuason & Co., Inc. v. Land Tenure Administration, G.R. No. L-21064, 18 February 1970, 31 SCRA 413, 432; Manotok v. National Housing Authority, G.R. Nos. L-55166-67, 21 May 1987, 150 SCRA 89.
43 Apo Fruits Corporation v. Court of Appeals, supra note 35 at 557-558.
44 Supra note 13 at 122-123.
45 Estate of Salud Jimenez v. Philippine Export Processing Zone, G.R. No. 137285, 16 January 2001, 349 SCRA 240; Land Bank of the Philippines v. Imperial, supra note 15; Barangay Sindalan, San Fernando, Pampanga v. Court of Appeals, supra note 33; Republic v. Court of Appeals, supra note 13; Land Bank of the Philippines v. Lim, G.R. No. 171941, 2 August 2007, 529 SCRA 129, 136.
46 Santos Ventura Hocorma Foundation, Inc. v. Santos, 484 Phil. 447, 456 (2004); Land Bank of the Philippines v. Wycoco, supra note 14; Reyes v. National Housing Authority, 443 Phil. 603 (2003).
47 Santos Ventura Hocorma Foundation, Inc. v. Santos, id.; Land Bank of the Philippines v. Imperial, supra note 15.
48 In Sigaan v. Villanueva, G.R. No. 173227, 20 January 2009, citing Eastern Shipping Lines v. Court of Appeals, G.R. No. 97412, 12 July 1994, 234 SCRA 78, 96-97, this Court declared that when the judgment of the court awarding a sum of money becomes final executory, the rate of legal interest, whether it is a loan/forbearance of money or not shall be 12% per annum from such finality until its satisfaction, this interim period being deemed equivalent to a forbearance of credit.
49 Supra note 46.
50 30 CJS 230, cited in Benguet Consolidated, Inc. v. Republic, 227 Phil. 422, 436 (1986), citing Republic v. Juan, 180 Phil. 398 (1979).
51 27 Am Jur. 112; National Housing Authority v. Heirs of Isidro Guivelondo, G.R. No. 166518, 16 June 2009, Urtula v. Republic, 130 Phil. 449, 458 (1968).
52 Supra note 50 at 426-427.
53 Supra note 13.
54 Supra note 15.
55 G.R. No. 146091, 28 July 2008, 560 SCRA 41.
56 G.R. No. 50147, 2 August 1990, 188 SCRA 300.
57 Id.
58 Rollo, p. 1337.
59 Land Bank of the Philippines v. David, G.R. No. 176344, 22 August 2008, 563 SCRA 172, 178.
60 See Spouses Solangon v. Salazar, 412 Phil. 816, 822 (2001).
61 G.R. No. 126490, 31 March 1998, 288 SCRA 422, 445.
62 G.R. No. 130759, 20 June 2003, 404 SCRA 449, 461.
63 Filinvest v. Court of Appeals, G.R. No. 138980, 20 September 2005, 470 SCRA 260, 274.
64 416 Phil. 528, 541 (2001).
65 G.R. No. 177348, 17 October 2008, 569 SCRA 738, 746.
66 G.R. No. 145871, 31 January 2006, 481 SCRA 226, 238.
67 G.R. No. 172384, 12 September 2007, 533 SCRA 156, 167-168.
68 G.R. No. 164159, 17 July 2007, 527 SCRA 727, 742.
69 Ruiz v. Court of Appeals, 449 Phil. 419, 433-434 (2003), which, in turn, cited Medel v. Court of Appeals, 359 Phil. 820, 829-830 (1998); Garcia v. Court of Appeals, G.R. Nos. L-82282-83, 24 November 1988, 167 SCRA 815, 830-831; Spouses Bautista v. Pilar Development Corporation, 371 Phil. 533, 543-544 (1999); Spouses Solangon v. Salazar, supra note 59 at 822-823.
70 349 Phil. 769, 779 (1998).
71 398 Phil. 413 (2000).
72 458 Phil. 414 (2003).
73 352 Phil. 101 (1998).
74 Spouses Jose T. Valenzuela and Gloria Valenzuela v. Kalayaan Development and Industrial Corporation, G.R. No. 163244, 22 June 2009.
75 Total amount of just compensation is ₱1,383,179,00.
76 Barons Marketing Corporation v. Court of Appeals, supra note 70; Development Bank of the Philippines v. Court of Appeals, supra note 71.
77 Dino v. Jardines, G.R. No. 145871, 31 January 2006, 481 SCRA 226, 238.
78 Spouses Solangon v. Salazar, supra note 60.
79 Republic v. Hidalgo, G.R. No. 161657, 4 October 2007, 534 SCRA 619; Land Bank of the Philippines v. Chico, supra note 36.
The Lawphil Project - Arellano Law Foundation
CONCURRING OPINION
ABAD, J.:
I fully concur with Justice Lucas P. Bersamin’s ponencia but wish to add a few of my own thoughts.
First. The Third Division of the Court that originally decided the case purposely deleted the lower court’s award of interest because of a finding that respondent Land Bank of the Philippines (Land Bank) was not guilty of delay in trying to come to a settlement with petitioners Apo Fruits Corp. and Huo Plantation, Inc. on the compensation due the latter. Courts have invariably adjusted or deleted the interest on the judgment debt as the circumstances and equity dictates.
Here, the Third Division consciously deleted the award of interest for a stated reason. The delay in payment, the Third Division found, was not Land Bank’s fault. It would, therefore, be unreasonable to restore such award of interest in a second motion for reconsideration, after entry of judgment had been made, when there is no showing that the Third Division’s factual findings are incorrect.
Second. Not only has the judgment of this Court become final and executory and an entry of judgment made, Land Bank already complied with the same by paying the judgment amounts. Of course, on occasions, the Court has resorted to the extreme measure of reopening final and executory judgments. But those are extreme cases where the issues have a telling impact on jurisprudence or the public interest. The one before the Court is not an extreme case. It involves no life or liberty, only the respondent companies’ pockets. What is more, the farmers will ultimately shoulder this huge and fantastic additional cost. Yet, like Land Bank, they did nothing to delay payment.
ROBERTO A. ABAD
Associate Justice
The Lawphil Project - Arellano Law Foundation
