In the case of Republic of the Philippines vs. Leodigario Sarabia, et al., the Supreme Court addressed the critical issue of determining just compensation in expropriation cases. The Court ruled that just compensation for expropriated property should be based on its fair market value at the time the government took possession, not at the time of the expropriation proceedings. This decision reinforces the principle that landowners should be compensated fairly for the actual loss they incurred when their property was taken for public use, aligning with established jurisprudence on eminent domain.

The Government’s Delayed Action: When Does ‘Taking’ Truly Occur in Expropriation?

This case revolves around a parcel of land in Aklan, a portion of which was taken by the Air Transportation Office (ATO) in 1956. The ATO used the 4,901 square-meter portion of Lot 6068 for airport facilities, including a control tower and rescue station. While the government assured the landowners, the heirs of Segundo De la Cruz, that they would be compensated, no formal expropriation proceedings were initiated for many years. Decades later, in 1998, the Republic filed an action for expropriation, leading to a dispute over the proper valuation date for just compensation.

The central legal question was whether just compensation should be fixed at the time of the actual taking in 1956, as argued by the Republic, or at the time of the issuance of the writ of possession in 1999, as determined by the lower courts. The resolution of this issue has significant implications for landowners whose properties are taken by the government for public use.

The Court of Appeals affirmed the trial court’s decision, emphasizing that the Republic had not sufficiently proven that a “taking” in the sense of expropriation occurred in 1956. The appellate court stated that the physical entry and occupation of the property in 1956 should include all the rights that may be exercised by an owner of the subject property. The Republic, according to the Court of Appeals, failed to show that it intended to acquire not only physical possession but also the legal right to possess and ultimately to own the subject property.

However, the Supreme Court disagreed with the Court of Appeals’ finding that there was insufficient evidence of the taking in 1956. The Court highlighted critical admissions made by the respondents in their Answer and Pre-Trial Brief. For example, in their Answer, the respondents stated:

1. That they admit each and every allegation in paragraphs 1,2,3,4,5 and 6 of the complaint. They admit that the portion of the land sought to be expropriated which is indicated by the white shaded of the sketch plan which is attached as ANNEX “B” of the complaint with an area of 4,901 square meters, more or less, has been in the possession of the plaintiff since 1956 up to the present.

Paragraph 6 of the complaint, also admitted by the respondents, further elaborated on the Republic’s use of the property since 1956. Building on this, the Supreme Court emphasized that these admissions were judicial admissions, which are conclusive and do not require further proof. According to established legal principles, a judicial admission is an admission made by a party in the course of the proceedings in the same case, for purposes of the truth of some alleged fact, which said party cannot thereafter disprove.

Based on these judicial admissions, the Supreme Court concluded that the taking of the 4,901 square-meter portion of Lot 6068 occurred in 1956. The Court then addressed the issue of when just compensation should be reckoned. The Republic argued, consistent with established jurisprudence, that just compensation should be based on the market value of the property when the government took possession, not after the commencement of the expropriation proceedings. The Supreme Court agreed with this argument, citing a long line of cases supporting the principle that compensation for expropriated property must be determined as of the time the expropriating authority takes possession thereof and not as of the institution of the proceedings.

In line with this principle, the Court referenced its earlier ruling in Republic vs. Lara, et al, which quoted from Provincial Government vs. Caro:

The value of the property should be fixed as of the date when it was taken and not the date of the filing of the proceedings. For where property is taken ahead of the filing of the condemnation proceedings, the value thereof may be enhanced by the public purpose for which it is taken; the entry by the plaintiff upon the property may have depreciated its value thereby; or, there may have been a natural increase in the value of the property from the time it is taken to the time the complaint is filed, due to general economic conditions. The owner of private property should be compensated only for what he actually loses; it is not intended that his compensation shall extend beyond his loss or injury. And what he loses is only the actual value of his property at the time it is taken. This is the only way the compensation to be paid can be truly just; i.e., “just” not only to the individual whose property is taken, “but to the public, which is to pay for it” xxx.

Furthermore, the Court stated that when the government takes possession of a property before initiating condemnation proceedings, the property’s value should be determined at the time of taking possession, not when the complaint is filed. This approach contrasts with situations where the taking coincides with or follows the commencement of proceedings, in which case the filing date serves as the basis for valuation.

However, the Supreme Court clarified that its ruling applied only to the 4,901 square-meter portion of Lot 6068 that the Republic had actually occupied since 1956. There was no evidence that the Republic occupied the remaining portion of the lot, nor did it demonstrate that this unoccupied portion was necessary for public use. In the absence of such evidence, the Court declined to extend the valuation based on the 1956 market value to the entire lot.

FAQs

What was the key issue in this case?	The central issue was determining the correct valuation date for just compensation in an expropriation case where the government took possession of the property long before initiating formal expropriation proceedings.
When should just compensation be reckoned?	The Supreme Court ruled that just compensation should be based on the property’s fair market value at the time the government took possession, not when the expropriation proceedings began.
What constitutes a “taking” in expropriation?	A “taking” occurs when the owner is actually deprived or dispossessed of his property, when there is a practical destruction or material impairment of its value, or when the owner is deprived of its ordinary use.
What was the basis for the Supreme Court’s decision?	The Court relied on established jurisprudence, judicial admissions made by the respondents, and the principle that landowners should be compensated for their actual loss at the time of taking.
Did the ruling apply to the entire property?	No, the ruling applied only to the portion of the property that the government had actually occupied since 1956, not to the remaining unoccupied portion.
What is a judicial admission?	A judicial admission is an admission made by a party during legal proceedings that is considered conclusive and does not require further proof.
What is the significance of judicial admissions in this case?	The respondents’ admissions that the government had been in possession of the property since 1956 were crucial in establishing the date of taking.
What happens if the government takes possession before filing expropriation?	The value is fixed as of the time of the taking of possession, not of filing the complaint.

The Supreme Court’s decision in Republic of the Philippines vs. Leodigario Sarabia, et al. reinforces the importance of timely and fair compensation in expropriation cases. It serves as a reminder that the government must compensate landowners based on the property’s value at the time of taking, ensuring that landowners are justly compensated for their loss.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Republic of the Philippines, vs. Leodigario Sarabia, G.R. No. 157847, August 25, 2005