ANNOTATION

OURS FOR THE TAKING:

JUST COMPENSATION IN EMINENT DOMAIN

By

DAVID ROBERT C. AQUINO, CSEE*

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§ 1. Nature of compensation, p. 871
§ 2. Determination of Value, p. 873
§ 3. Judicial Function, p. 875

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Just compensation sits at the core of every eminent

domain proceedings. Rightly so because without the
concept of just compensation, the process of appropriating
private property for public use translates to a tyrannical
act by the state devoid of any rule of law.
The case under annotation—Land Bank of the
Philippines vs. Emiliano Santiago1—provides us with the
opportunity to examine this concept of just compensation
and how it snugly fits into the entire scheme of due
process.
Yet the concept of just compensation, according to a
study made by William Michael Treanor in his Treatise2—
The Ori-

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*  Atty. Aquino is a practicing lawyer and law book author. Prior to
private practice, he served in Director-level positions in various
government offices and was a member of the Sub-Committee on the
Revision of the Rules on Criminal Procedure.
1 G.R. No. 182209, October 3, 2012, 682 SCRA 264.
2 http://scholarship.law.georgetown.edu/facpub/1051.

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gins and Original Significance of the Just Compensation
Clause of the Fifth Amendment—was nowhere to be found
in the early constitutions. According to this scholarly work,
the concept of receiving compensation from the state for the
taking of one’s private property was never an issue and
such taking was always premised on the prerogative of the
state for the common good of the many—“that property
right could be compromised in order to advance the
common good.”
For a short while, this policy of non-compensated taking
by the state served the public good. Lands that were not
developed by its owners were transferred to those who
tilled or developed it for good use. Most of the time property
was taken for use as public roads which spurred economic
and social development at low cost to the government. It
was only through the Vermont charter of 1777, that the
concept of just compensation took its first real
constitutional footing. With new focus on private rights,
other states followed suit.
This concept thereafter found its way into our
fundamental law which was largely copied from our
American counterpart. Note, however, that Section 6 of
Article II, of the 1973 Constitution, which is a modified
version of the original provision of the 1935 Constitution,
“emphasizes the stewardship concept, under which private
property is supposed to be held by the individual only as a
trustee for the people in general, who are its real owners. As
a mere steward, the individual must exercise his rights to
the property not for his own exclusive and selfish benefit but
for the good of the entire community or nation”3 In our
current constitution, it now carries the concept we are now
familiar—providing that private property shall not be
taken for public use without just compensation.4

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3  Mataas na Lupa Tenants Association vs. Aglabay, 130 SCRA 30
[1984], citing Philippine Political Law by Justice Isagani Cruz.
4 Article III, Section 9, 1987 Philippine Constitution.

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§ 1. Nature of compensation
 The power of eminent domain is the inherent right of
the State to condemn private property for public use upon
payment of just compensation. Thus, for expropriation to be
valid, the following requirements must be met: (1) the
taking must be for public use and (2) just compensation
must be paid to the owner of the private property.5  
It is well-settled that the taking of private property by
the Government’s power of eminent domain is subject to
two mandatory requirements: (1) that it is for a particular
public purpose; and (2) that just compensation be paid to
the property owner. These requirements partake of the
nature of implied conditions that should be complied with
to enable the condemnor to keep the property
expropriated.6
In expropriation proceedings, just compensation is
defined as the full and fair equivalent of the property taken
from its owner by the expropriator. The measure is not the
taker’s gain, but the owner’s loss. The word “just” is used to
intensify the meaning of the word “compensation” and to
convey thereby the idea that the equivalent to be rendered
for the property to be taken shall be real, substantial, full
and ample. The constitutional limitation of “just
compensation” is considered to be a sum equivalent to the
market value of the property, broadly defined as 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. The “just”-ness of the compensation
could only be attained by using reliable and

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5 Asia’s Emerging Dragon Corporation vs. DOTC, 552 SCRA 59 [2008].
6 Mactan-Cebu International Airport vs. Lozada, 613 SCRA 618 [2010].

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actual data as bases for fixing the value of the condemned

property.7
Moreover, the payment of just compensation is the
requirement or action needed before ownership of the
appropriated property can rightfully be transferred to the
government.
 Thus, in the case of Heirs of Deleste vs. Land Bank of the
Philippines,8 which dealt with the emancipation program of
the government of tenant-farmers, the High Court had the
occasion to declare that certain requirements must also be
complied with, such as payment of just compensation,
before full ownership is vested upon the tenant-farmers.
It further noted that while the law expressly ordered the
emancipation of tenant-farmer and declared that he shall
“be deemed the owner” of a portion of land consisting of a
family-sized farm except that “no title to the land owned by
him was to be actually issued to him unless and until he
had become a full-fledged member of a duly recognized
farmers’ cooperative compliance with the prescribed
requirements, tenant-farmers have, at most, an inchoate
right over the land they were tilling. In recognition of this,
a CLT is issued to a tenant-farmer to serve as a
“provisional title of ownership over the landholding while
the lot owner is awaiting full payment of or for as long as
the tenant-farmer is an ‘amortizing owner.’” This certificate
“proves inchoate ownership of an agricultural land
primarily devoted to rice and corn production. It is issued in
order for the tenant-farmer to acquire the land” he was
tilling.   It was understood, however, that full payment of
the just compensation also had to be made first,
conformably to the constitutional requirement.

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7 Republic vs. Rural Bank of Kabacan, Inc., 664 SCRA 233 [2012].
8 651 SCRA 352 [2011] citing Association of Small Landowners in the
Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA 343 [1989].

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§ 2. Determination of Value
Just compensation is the fair market value of the
property. Fair market value is that “sum of money which a
person desirous but not compelled to buy, and an owner
willing but not compelled to sell, would agree on as a price
to be given and received therefor.”9 Just compensation is to
be ascertained as of the time of the taking which usually
coincides with the commencement of the expropriation
proceedings. Where the institution of the action precedes
entry into the property, the just compensation is to be
ascertained as of the time of the filing of the complaint.10
For purposes of just compensation, the fair market value of
an expropriated property is determined by its character
and its price at the time of taking.11
What is illuminating in the case under annotation is
that the Supreme Court had the opportunity to delve into
several issues as to the determination of the value and its
attendant concerns. It held that when the agrarian reform
process is still incomplete as the just compensation due the
landowner has yet to be settled, such just compensation
should be determined and the process concluded under
Republic Act No. 6657. The ruling it applied in Land Bank
of the Philippines v. Natividad was likewise applied in
Land Bank of the Philippines v. Heirs of Angel T. Domingo,
when the landowner filed a Petition for the Determination
and Payment of Just Compensation despite his receipt of
LBP’s partial payment. The High Court held that since the
amount of just compensation to be paid had yet to be
settled, then the agrarian reform process was still
incomplete; thus, it should be completed under Republic
Act No. 6657.
Based on the foregoing, when the agrarian reform
process is still incomplete as the just compensation due the
land-

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9 National Power Corporation vs. Co, 578 SCRA 234 [2009].
10 City of Iloilo vs. Contreras-Besana, 612 SCRA 458 [2010].
11 Land Bank of the Philippines vs. Livioco, 631 SCRA 86 [2010].

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owner has yet to be settled, such just compensation should

be determined and the process concluded under Republic
Act No. 6657. It also declared under the case being
annotated that the interest imposed in case of delay in
payments in agrarian cases is 12% per annum and not 6%
as the imposition 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. Moreover, the Court
has allowed the grant of interest in expropriation cases
where there is delay in the payment of just compensation.
As to the interest of such amount in the event it is held in
deposit, the High Court had the occasion to state that the
owner of the deposited amount is the one entitled to the
interest which accrue thereon.12
As to the efficacy of Republic Act No. 6657, it should be
remembered that the High Court had already resolved this
issue and declared that if just compensation is not settled
prior to the passage of this law, it should be computed in
accordance with the said law, although the property was
acquired under Presidential Decree No. 27.13 The taking of
private lands under the agrarian reform program partakes
of the nature of an expropriation proceeding.
In computing just compensation for expropriation
proceedings, the RTC should take into consideration the
value of the land at the time of taking, not at the time of
the rendition of judgment. The time of taking is the time
when the landowner was deprived of the use and benefit of
his property, such as when the title is transferred to the
Republic.14 Note, however, that the Court has also declared
in no uncertain terms that R.A. No. 6657 is the relevant
law for determining just compensation after noting several
decided cases where the Court found it more equitable to
determine just compensation based

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12 Republic vs. Holy Trinity Realty Development.
13 Land Bank of the Philippines vs. Barrido, 628 SCRA 454 [2010].
14  Land Bank of the Philippines vs. Heirs of Salvador Encinas, G.R.
No. 167735, 670 SCRA 52 [2012].

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on the value of the property at the time of payment. This

was a clear departure from the Court’s earlier stance in
Gabatin vs. Land Bank of the Philippines where it declared
that the reckoning period for the determination of just
compensation is the time when the land was taken
applying P.D. No. 27 and E.O. No. 228.15
§ 3. Judicial Function
The mandate of just compensation is a judicial
function.16
The determination of just compensation is a judicial
function; hence, courts cannot be unduly restricted in their
determination thereof. To do so would deprive the courts of
their judicial prerogatives and reduce them to the
bureaucratic function of inputting data and arriving at the
valuation. While the courts should be mindful of the
different formulae created by the DAR in arriving at just
compensation, they are not strictly bound to adhere thereto
if the situation before them do not warrant it.17
Judicial determination is needed to arrive at the exact
amount due to the property owner.18 The valuation of
property or determination of just compensation in eminent
domain proceedings is essentially a judicial function which
is vested with the courts and not with the administrative
agencies.19 It is also interesting to note that courts may
take judicial notice of a decision or the facts involved in
another case tried by the

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15  Land Bank of the Philippines vs. Jocson, G.R. No. 180803, 604
SCRA 373 [2009].
16 Land Bank of the Philippines vs. Obias, 668 SCRA 265 [2012].
17 Land Bank of the Philippines vs. Heirs of Maximo Puyat, G.R. No.
175055, 675 SCRA 233 [2012].
18 National Power Corporation vs. Co, 578 SCRA 234 [2009].
19 Land Bank of the Philippines vs. Belista, 591 SCRA 137 [2009].

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same court if the parties introduce the same in evidence or

the court as a matter of convenience.20
In sum, just compensation is simply the mechanism that
prevents the state from overstepping its constitutional
bounds and keeps it at bay from any abuse of its powers. It
ensures that people’s rights in general, and their right to
own property in particular are protected from arbitrary and
whimsical taking. That private property may only be taken
subject to the condition that it shall be for a public purpose
and with just compensation.
After all, the taking of private property and the
deprivation of its rightful owners of the benefit and use
thereof, may only be justified if the taking is for a purpose
higher than individual benefit and comfort. That the taking
be for purposes that best serve the greater good and for a
higher purpose. Nor should the government resort to
underhanded methods in order to deprive its citizens of
 their use of property under the guise of regulation. As held
in one case—private property which is not noxious nor
intended for noxious purposes may not, by zoning, be
destroyed without compensation. Such principle finds no
support in the principles of justice as we know them. The
police powers of local government units which have always
received broad and liberal interpretation cannot be
stretched to cover this particular taking. Distinction should
be made between destruction from necessity and eminent
domain.21
——o0o——

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20 Lee vs. Land Bank of the Philippines, 548 SCRA 52 [2008].
21 City of Manila vs. Laguio, 455 SCRA 308 [2005].

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