Secretary of DPWH vs Heracleo

Case Digest GR 179334 Apr 21 2015

Facts:

Spouses Heracleo are the co-owners of a land which is among the

private properties traversed by MacArthur Highway in Bulacan, a
government project undertaken sometime in 1940. The taking was taken
without the requisite expropriation proceedings and without their consent.
In 1994, Heracleo demanded the payment of the fair market value of the
property. The DPWH offered to pay 0.70 centavos per sqm., as
recommended by the appraiser committee of Bulacan. Unsatisfied,
Heracleo filed a complaint for recovery of possession with damages.
Favorable decisions were rendered by the RTC and the CA, with valuation
of P 1,500 per sqm and 6% interest per annum from the time of filing of
the until full payment. The SC Division reversed the CA ruling and held
that computation should be based at the time the property was taken in
1940, which is 0.70 per sqm. But because of the contrasting opinions of
the members of the Division and transcendental importance of the issue,
the case was referred to the En Banc for resolution.

Issue 1: W/N the taking of private property without due process should be
nullified

No. The governments failure to initiate the necessary expropriation

proceedings prior to actual taking cannot simply invalidate the States
exercise of its eminent domain power, given that the property subject of
expropriation is indubitably devoted for public use, and public policy
imposes upon the public utility the obligation to continue its services to the
public. To hastily nullify said expropriation in the guise of lack of due
process would certainly diminish or weaken one of the States inherent
powers, the ultimate objective of which is to serve the greater good.

Thus, the non-filing of the case for expropriation will not necessarily lead
to the return of the property to the landowner. What is left to the landowner
is the right of compensation.

Issue 2: W/N compensation is based on the market value of the property

at the time of taking

Yes. While it may appear inequitable to the private owners to receive an

outdated valuation, the long-established rule is that the fair equivalent of a
property should be computed not at the time of payment, but at the time of
taking. This is because the purpose of just compensation is not to reward
the owner for the property taken but to compensate him for the loss
thereof. The owner should be compensated only for what he actually
loses, and what he loses is the actual value of the property at the time it is
taken.

Issue 3: W/N the principle of equity should be applied in this case

No. The Court must adhere to the doctrine that its first and fundamental
duty is the application of the law according to its express terms,
interpretation being called for only when such literal application is
impossible. To entertain other formula for computing just compensation,
contrary to those established by law and jurisprudence, would open
varying interpretation of economic policies a matter which this Court has
no competence to take cognizance of. Equity and equitable principles
only come into full play when a gap exists in the law and jurisprudence.

Velasco Dissent:

The States power of eminent domain is not absolute; the Constitution is

clear that no person shall be deprived of life, liberty and property without
due process of law. As such, failure of the government to institute the
necessary proceedings should lead to failure of taking an individuals
property. In this case, since the property was already taken, the
complainants must be equitably compensated for the loss thereof.

For purposes of just compensation, the value of the land should be

determined from the time the property owners filed the initiatory complaint,
earning interest therefrom. To hold otherwise would validate the States
act as one of expropriation in spite of procedural infirmities which, in turn,
would amount to unjust enrichment on its part. To continue condoning
such acts would be licensing the government to continue dispensing with
constitutional requirements in taking private property.