114.

EPZA v. PULIDO, ESTATE OF SALUD JIMENEZ (TLR)

G.R. No. 188995 | 24 August 2011

The controversy has its genesis in the action for the expropriation of three parcels of irrigated
riceland situated in Rosario, Cavite that the petitioner commenced on May 15, 1981 in the Court of
First Instance of Cavite against the several individual owners: Lot 1408, covered by a TCT in the
names of Jose Pulido and Vicenta Panganiban, Lot 1409-B-2, co-owned by Francisco Prodigalidad and
Medardo Prodigalidad, and Lot 1406, with an area of 26,008 sqm. and covered by TCT No. T113498
registered in the name of Salud Jimenez.

During the pendency of the case, Lot 1406 was subdivided into Lot 1406-A (with an area of 12,890
square meters) and 1406-B (with an area of 13,118 square meters). The RTC sustained the right of
the petitioner to expropriate the three parcels of riceland, but later partly reconsidered and released
Lot 1406-A from expropriation. The petitioner appealed to the CA.

Later, the petitioner and the Estate of Salud Jimenez (due to Salud Jimenez having meanwhile died
on October 30, 1984) entered into a Compromise Agreement: (1) That the petitioner "agrees to
withdraw its appeal from the expropriation proceedings", (2) The parties agree that the Estate of
Salud Jimenez would transfer Lot 1406-B to the petitioner in exchange for "lot 434 with an area of
14,167 square meters, among others.

In due time, the CA remanded the case to the RTC for the consideration and approval of the
Compromise Agreement. The RTC approved the Compromise Agreement.

Contrary to its express undertaking under the Compromise Agreement, the petitioner failed to
transfer the title of Lot 434 to the Estate of Salud Jimenez because the registered owner was
Progressive Realty Estate, Inc., not the petitioner. As a result, the Estate of Salud Jimenez filed a
motion to partially annul the order.

The RTC annulled the compromise agreement and directed the petitioner to peacefully return the lot
to the estate. The CA partially granted the petition for certiorari and prohibition; set aside the order
of the RTC on the return of Lot 1406-B to the Estate of Salud Jimenez; and directed that the RTC
determine the just compensation for Lot 1406-B.

Considering that the court’s decision has become final and executory, the RTC conducted
proceedings to determine the just compensation for Lot 1406-B. During the trial, however, the
petitioner raised the issue of whether the just compensation should be based on the value or
assessment rate prevailing in 1981 or in 1993, insisting that the just compensation for Lot 1406-B
should be equivalent to its fair market value in 1981, the time of the filing of its expropriation
complaint, which was the time of the taking.

ISSUE: W/N just compensation should be based on the value of Lot 1406-B prevailing in 1981 or in
1993.

EPZA’s submission: That the just compensation for Lot 1406-B was only P41,610.00, the equivalent
of the zonal valuation of Lot 1406-B under Tax Declaration No. 7252 issued in 1981; that any amount
above Lot 1406-B's 1981 zonal valuation would unjustly enrich the Estate of Salud Jimenez due to
the escalated price of the expropriated property; and that the Estate of Salud Jimenez was entitled
only to compensation for the loss of its "vacant and idle land at the time of taking and/or filing of the
complaint, whichever came first, and not to the incremental benefit that has been derived
therefrom after the introduction of improvements thereto by [the petitioner]."

Estate of Salud Jimenez’s submission: t just compensation for Lot 1406-B must be based on the
value of the property (and of other properties adjacent to it) in 1993 when the parties entered into
the Compromise Agreement and agreed that the just compensation for Lot 1406-B was Lot 434, or
Lot 434's equivalent value.

SC RULING: Just compensation for Lot 1406-B must be based on value of property prevailing in 1993.

To reiterate, in G.R. No. 137285, the Court upheld the annulment of the Compromise Agreement
and recognized that the agreed upon mode of payment of the just compensation for Lot 1406-B with
Lot 434 was cancelled. It is notable that the Court mentioned nothing therein about the invalidation
of the amount of just compensation corresponding to the mode of payment, which was the value of
Lot 434 at the time, which silence was the Court's acknowledgment that the parties understood and
accepted, by entering into the Compromise Agreement in 1993, that the just compensation for Lot
1406-B was Lot 434 (or the value of Lot 434, which at the time of the swap in 1993 was definitely
much higher than Lot 434's value in 1981).

Accordingly, we completely agree with the RTC's observation that "when the parties signed the
compromise agreement and the same was approved, they had in fact settled between themselves
the question of what is just compensation and that both of them had intended that defendant would
be compensated on the basis of prevailing values at the time of the agreement." 17 We further
completely agree with the CA's conclusion that "by agreeing to a land swap in 1993 in the ill-fated
compromise agreement, [PEZA] had impliedly agreed to paying just compensation using the market
values in 1993."