REPUBLIC OF THE PHILIPPINES vs.

BANK OF THE PHILIPPINE ISLANDS (BPI)

FACTS:

Petitioner filed with the trial court1 a case for expropriation against portions of the properties of Bank of the Philippine
Islands (BPI) and Bayani Villanueva (Villanueva) situated in Pamplona, Las Piñas City for the construction of the
Zapote-Alabang Fly-Over. Since none of the owners contested to the expropriation, the trial court constituted a Board of
Commissioners to determine the just compensation. The Board of Commissioners recommended the amount of
P40,000.00 per square meter as the fair market value. On 25 November 1998, the trial court adopted the recommendation
of the Commissioners.

On 15 December 1998, the acting branch clerk of court issued a Certification stating that the decision has become
“FINAL, EXECUTORY and UNAPPEALABLE as of December 11, 1998 considering that the Office of the Solicitor
General failed to file any Notice of Appeal or Motion for Reconsideration despite receipt of a copy thereof on November
26, 1998.”

On 16 December 1998 BPI filed a Motion for Partial New Trial to determine the just compensation of its building, not
included in the trial court’s Decision. 25 November 1998 Decision only included the just compensation for the parcels of
land. Additionally, BPI claimed that its motion was timely filed since it only received a copy of the Decision on 01
December 1998. The trial court granted the partial new trial.

The Trial Court allowed BPI to present its evidence ex-parte because of petitioner’s failure to appear during the
scheduled hearing. The trial court admitted the exhibits presented by BPI and appointed Leticia B. Agbayani (Agbayani)
as commissioner. Agbayani was ordered to conduct an ocular inspection. In her Report, Agbayani adopted the following
findings:
1. That the undersigned found out that a new building was constructed and a picture of said building is hereto
attached and made as an integral part hereof as Annex "A" and;
2. That the building was moved back when it was constructed to conform with the requirement of the Building
Code; and
3. Improvements were introduced around the building.

On 10 September 1999, trial court held that just compensation for the building was due and ordered petitioner to pay
BPI the additional amount of P2,633,000.00. Petitioner filed a Motion for Reconsideration on the ground that the
proceeding fixing the just compensation of the building is null and void for not complying with the mandatory procedure
set forth in Sections 5 to 8 of Rule 67 of the Rules of Court. The trial court granted petitioner’s MR and ordered that the
Decision dated 10 September 1999 be set aside and vacated. BPI filed a motion for reconsideration, assailing that there
was substantial compliance with the Rules. The trial court, however, denied BPI’s motion for reconsideration.

On 19 September 2000, the trial court appointed Atty. Edgar Allan C. Morante, the branch clerk of court, as the chairman
of the Board of Commissioners, and gave petitioner and BPI ten days to submit their respective nominees and their oaths
of office. BPI nominated Roland Savellano (Savellano) and submitted his oath of office. Instead of submitting its
nominee, petitioner filed a Manifestation and Motion objecting to the propriety of paying just compensation for BPI’s
building and praying that BPI’s claim for additional just compensation be denied. Petitioner claimed that the building
was never taken by the government. In support, petitioner attached a letter dated 12 September 2000 from the DPWH,
addressed to the Solicitor General. The letter states, in part:
x x x the original plan affecting the subject property was not implemented. The width of the sidewalk at the premises under
consideration was actually reduced from 2.50 m to 2.35 m x x x to avoid the costly structure of that bank.

In its opposition, BPI claimed that it was not aware that the original plan was not implemented. It received no
correspondence from the DPWH on the matter, except for the letter dated 12 August 1997 from DPWH addressed to
BPI, stating in part that:
We regret to inform you that adjustment of the RROW limit of our project along this section is not possible as it will affect
the effective width of the sidewalk designated at 2.50 m. wide.

1
Regional Trial Court, National Capital Region, Las Piñas City, Branch 275
BPI also argued that even "if a 3-meter setback is observed, only 75%of the old building could be utilized x x x and
cutting the support system of the building x x x would affect the building’s structural integrity."

On 07 May 2001, the trial court denied petitioner’s motion dated 09 October 2000, and ruled that the demolition of the
old building of BPI can be construed as a consequential damage suffered by BPI as a result of the expropriation.
Petitioner was thus ordered to submit its nominee to the Board of Commissioners. Petitioner nominated Romulo C.
Gervacio (Gervacio)2. The Board thus constituted, the trial court ordered the Commissioners to submit their
recommendation.

Savellano recommended the amount of P2,633,000.00, based on the appraisal conducted by an independent professional
business and property consultant. Gervacio recommended the amount of P1,905,600.00, which was the market value
indicated on the tax declaration of said building. On 03 February 2003, the trial court adopted the recommendation of
Gervacio of P1,905,600.00 as the just compensation of the BPI building.

Petitioner then filed an appeal with the Court of Appeals. However, the CA dismissed said appeal and affirmed the order
of the trial court.

The CA ruled that respondent timely filed their 16 December 1998 Motion for Partial New Trial since they only
received the trial court’s decision on 1 December 1998.3 Thus, the trial court did not lose its jurisdiction when it
conducted subsequent proceedings determining just compensation for the building not originally included in the
assessment for just compensation.

The CA also did not agree with petitioner’s argument that the award of additional just compensation for the building is
erroneous and without legal basis because the building was never taken by the government in the expropriation
proceeding conducted by the trial court nor was it affected by the construction of the Zapote-Alabang Flyover. The Court
adopted the ruling of Republic of the Philippines through the DPWH vs. CA and Rosario R. Reyes4 in dismissing the
petitioner’s appeal.

Petitioner filed a Motion for Reconsideration which the appellate court denied on 06 August 2012.

ISSUE:
1. W/N the trial court’s 25 November 1998 Decision had become final and executory before BPI filed its motion for
partial new trial? NO
2. W/N the award of additional just compensation for BPI’s building in the amount fixed therefor is
unfounded and without legal basis? NO

HELD:

On whether BPI’s motion for partial new trial was filed out of time

A careful review of the record shows the absence of any proof that the Decision of 25 November 1998 was served upon
BPI. Hence, the Court of Appeals correctly held that absent any proof of service to BPI of the Decision, the period of 15
days within which to file its motion for partial new trial did not begin to run against BPI.5 However, BPI’s admission that
it received a copy of the Decision on 01 December 1998 is binding on it, and was correctly considered by the Court of
Appeals as the reckoning date to count the 15-day period.

On whether the award of additional just compensation and the amount fixed therefor was unfounded and without legal
basis

Eminent domain is the authority and right of the State, as sovereign, to take private property for public use upon
observance of due process of law and payment of just compensation. The State’s power of eminent domain is limited by

2
Officer-In-Charge of the City Assessor’s Office in Las Piñas City
3
The Rules of Court requires that the said Motion should be filed within 15 days upon the receipt of the Order.
4
Please see Ratio for the quoted portion of the RP vs CA and Reyes case
5
However, the reglementary period already ran against petitioner (Republic)
the constitutional mandate that private property shall not be taken for public use without just compensation. Just
compensation is the full and fair equivalent of the property sought to be expropriated.

The general rule is that the just compensation to which the owner of the condemned property is entitled to is the market
value. 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 paid by the buyer and received by the seller. The general rule,
however, is modified where only a part of a certain property is expropriated. In such a case, the owner is not restricted
to compensation for the portion actually taken, he is also entitled to recover the consequential damage, if any, to the
remaining part of the property.

No actual taking of the building is necessary to grant consequential damages. Consequential damages are awarded if
as a result of the expropriation, the remaining property of the owner suffers from an impairment or decrease in value. The
rules on expropriation clearly provide a legal basis for the award of consequential damages. Section 6 of Rule 67 of the
Rules of Court provides:

x x x The commissioners shall assess the consequential damages to the property not taken and deduct from such
consequential damages the consequential benefits to be derived by the owner from the public use or public purpose of the
property taken, the operation of its franchise by the corporation or the carrying on of the business of the corporation or person
taking the property. But in no case shall the consequential benefits assessed exceed the consequential damages assessed,
or the owner be deprived of the actual value of his property so taken.

Additionally, in B.H. Berkenkotter & Co. v. Court of Appeals, the Court ruled:

To determine just compensation, the trial court should first as certain the market value of the property, to which should
be added the consequential damages after deducting therefrom the consequential benefits which may arise from the
expropriation. If the consequential benefits exceed the consequential damages, these items should bed is regarded altogether
as the basic value of the property should be paid in every case.

We quote with approval the ruling of the Court of Appeals:

Lastly, as to the argument of plaintiff-appellant that the award of additional just compensation for the building of defendant-
appellee is erroneous and without legal basis because the building was never taken by the government in the expropriation
proceeding conducted by the trial court nor was it affected by the construction of the Zapote-Alabang Flyover, We find the
ruling of Republic of the Philippines through the DPWH vs. CA and Rosario R. Reyes appropriate to apply in this case, to
wit:

Petitioner contends that no consequential damages may be awarded as the remaining lot was not "actually taken" by the
DPWH, and to award consequential damages for the lot which was retained by the owner is tantamount to unjust enrichment
on the part of the latter.

Petitioner’s contention is unmeritorious.

No actual taking of the remaining portion of the real property is necessary to grant consequential damages. If as a
result of the expropriation made by petitioner, the remaining lot (i.e., the 297-square meter lot) of private respondent
suffers from an impairment or decrease in value, consequential damages may be awarded to private respondent.

Petitioner would also have us review the bases of the courts below in awarding just compensation for the building for
consequential damages. The uniform findings of the trial court and the appellate court are entitled to the greatest respect.
They are binding on the Court in the absence of a strong showing by petitioner that the courts below erred in appreciating
the established facts and in drawing inferences from such facts. We find no cogent reason to deviate from this.

Petition denied.