GR L 10598; (March, 1917)

EN BANC

G.R. No. L-10598; March 20, 1917

THE MANILA RAILROAD COMPANY, plaintiff-appellant,

vs.
ANASTASIO ALANO, ET AL., defendants-appellees.
FILOMENA MARTINEZ, ET AL., defendants-appellants.

William A. Kincaid and Thos. L. Hartigan for plaintiff-appellant.
Salvador Barrios for defendants-appellants.
P. Joya Admana, and Platon and Lopez for defendants-appellees.

CARSON, J.:

The plaintiff railroad company and some of the defendants in condemnation proceedings had in the Court of First Instance of Batangas, appealed from the decree entered therein, and the case is now before us on their respective bills of exceptions.

The land included in the amended complaint is a narrow strip some 6 kilometers in length, running between Batangas and Bauan, divided into 97 distinct parcels, and 153,397.31 square meters in extent. Of this land 27,265 square meters were brought by plaintiff out of court, leaving for expropriation 126,713.31 square meters, or a little over 12 ½ hectares.

Commissioners to appraise the land and assess damages, were appointed and rendered separate reports. The court below accepted the report of the commissioner who placed the lowest valuation on the land and rendered judgment in conformity therewith. In the report of this commissioner the lands in question are classified as first-class, second-class, and third-class. First-class lands, without improvements, are given a valuation of 70 centavos the square meter, or P7,000 the hectare; second-class lands are given a valuation of 50 centavos the square meter, or P5,000 the hectare; and third-class a valuation of 30 centavos the square meter or P3,000 the hectare.

The judgment entered in the court below further provides for the payment of compensation to the land owners for mejoras (improvements) consisting of growing crops, plants, and trees, fixing the value of a square meter of planted rice at 5 centavos; a square meter of planted corn at 10 centavos; and so on through the list of vegetables, plants, and threes which defendants alleged were growing on the land when the plaintiff railroad took possession. No attempt was made to fix the total value of these crops, but the plaintiff company is ordered to pay the various defendants the amount which may appear to be due them as a result of an estimate based upon memoranda prepared by the company’s engineers as to the crops, plants and trees growing on the land at the time when possession was taken.

The judgment further provides, in a few instances, for consequential damages to lands not taken by the railroad company, in accord with the report of the commissioners.

The total amount allowed by the court as compensation for the taking of the 12 ½ hectares of land, not including improvements (crops, plants, and trees) is P68,088.68, that is to say, an average of P5,447.09 the hectare; and counsel for plaintiff asserts that the estimated amount which the railroad company would be required to pay, under the decree, for so-called mejoras (improvements), consisting of crops, plants, and trees, is not less than P24,000 or an average of P1,620 the hectare. If this estimate be accepted as correct the effect of the judgment entered in the court below would be to require the plaintiffs to pay for the 12 1/2 hectares of land together with the crops, plants and trees growing thereon, at the rate of P7,067.09 the hectares.

The land was dedicated exclusively to agricultural purposes and planted for the most part in rice and zacate, with some corn and sugar cane and a few coconut trees. It has no special advantages of location which tend to enhance its market value, or give it any present or future value for other than agricultural purposes. There is nothing in the record which would justify us in believing that as agricultural land it is notably superior to other agricultural lands lying in the same province, or elsewhere throughout the Island of Luzon; and a substantial part of it is unwatered (terreno secano), and as such, not very valuable even for agricultural purposes. We are convinced, therefore, that the market value placed upon it and upon the so-called mejoras, consisting of growing crops, plants, bushes, and trees, by the commissioners and by the court below is exorbitant and unreasonable, and so exorbitant and unreasonable as to leave no room for doubt that the separate reports filed by the commissioners as to the amount of compensation to which the owners of the land are entitled should be and must be rejected.

Following the precedents established by this court, we have examined the evidence upon which the reports of the commissioners and the judgment entered in the court below are based, and we think there is enough evidence before us to justify us in entering final judgment disposing of all the contentions of the parties as to the value which should be set upon the lands actually taken by the railroad company. (City of Manila vs. Estrada and Estrada, 25 Phil, Rep., 208; Manila Railroad Co. vs. Velazquez, 32 Phil. Rep., 286; Manila Railroad Co. vs. Aguilar, 35 Phil. Rep., 118.)

The testimony of the defendant land owners themselves, and of the witnesses called by them, as to the value of the lands in question, is so manifestly partial, and so evidently intended grossly to exaggerate the market value of these lands, as to render it practically worthless. Many of these claimants and their witnesses solemnly swore that their lands, used solely for agricultural purposes, are worth P10,000 and more the hectare, although the record quite clearly indicates that agricultural lands, in the section of the province wherein the lands in question are located, have rarely, if ever, brought a price upon the open market as high as 8 centavos a meter, or P800 the hectare; and the extracts from the public records of the sale of agricultural lands in that province submitted by the plaintiff would seem to indicate that the average price at which such lands have changed hands in recent years is less, rather than more, than half that amount.

The defendants introduced no evidence of transactions in agricultural lands in the vicinity of the land in question, and relied, for the most part, upon the manifestly partial and interested expressions of opinions by themselves and their witnesses as to the market value of the land taken by the railroad. It is fair to presume that if there had been any transactions in lands in the vicinity in which the defendants lived which would tend to rebut the evidence of the plaintiff, or to sustain the contentions of the defendants, it would have been introduced.

There is some evidence in the record disclosing that the railroad company itself paid as high as 30 centavos a meter for certain lands purchased by it from some of the original defendants in these proceedings. The trial judge lays considerable stress upon this fact; and, in support of his conclusions drawn therefrom, says that this court has held that the true market value of lands may be taken as the amount agreed upon “between one who desires to sell and another who desires to purchase.” (Manila Railway Co. vs. Fabie, 17 Phil. Rep., 206.) But it is not to be forgotten that there are various limitations controlling this general statement, among others, those set out in our opinion in the case of City of Manila vs. Estrada and Estrada (supra), wherein we said that “the market value of property is the price which it will bring when it is offered for sale by one who desires, but is not obliged to sell it, and is bought by one who is under no necessity of having it.” Manifestly offers to purchase made to some of the defendants in these proceedings, or purchases actually made from others by private treaty and out of court, furnish no sound criterion as to the true market value of the lands in question, such purchases and offers to purchase having been made by the railroad company while under a practical “necessity of having” the lands along its right of way; and, for the further reason, that the transactions in these cases were had by way of compromise of questions in the course of litigation.

J. D. Crowe, provincial treasurer of the Province of Batangas, was called by the railroad and testified, in substances, that the market value of the lands in question is about double their assessed value, that is to say: first-class watered lands, about P660 the hectare; second-class watered lands, about P400 the hectare; and sugar-cane lands from P284 to P352 the hectare.

Pedro Pastor, the clerk of the court, a large land owner in the Province of Batangas, was called by railroad, and testifying as to the value of agricultural lands such as those taken by the railroad, said that first-class watered lands are worth from P1,000 to P1,500 the hectare; second-class watered lands from P800 to P1,000 the hectare; and sugar-cane lands from P300 to P400 the hectare.

These witnesses would seem to have been wholly disinterested and their experience as men of affairs in the Province of Batangas, whose official duties could not fail to have given them some special knowledge as to land valuations in that province, lends great weight to their expressions of opinion as to land values in the province in which they live, and justifies us in the belief that their estimates of the true market value of the land in question are not far astray. It is true that they do not claim to have any special knowledge of the various parcels of land in course of condemnation in these proceedings, but a review of all the evidence of record leaves no room for doubt in our minds that the true market value of these land is not much, if any, greater than the average market value of lands of the same class in the section of the Province of Batangas wherein they are located.

As observed by the court below, the assessed valuation of lands in course of condemnation cannot be taken as conclusive as to the market value of such lands and, as a rule, such assessed values are considerably below the true market valuation; but when, as in the case at bar, it appears that the assessed valuations are based, in large part, upon the sworn statements of the owners, evidence as to such assessed valuations is competent and admissible and may be taken into consideration for what it is worth, in determining whether the values claimed by the owners is condemnation proceedings are grossly excessive and exorbitant and wholly beyond the bounds of reason; and in some cases as an element, though by no means a controlling one, in determining the real market value of the land taken. (Tenorio vs. Manila Railroad Co., 22 Phil. Rep., 411; City of Manila vs. Estrada and Estrada, 25 Phil Rep., 208; Manila Railroad Co. vs. Velasquez, 32 Phil. Rep., 286.)

Having in mind the assessed valuation of the lands sought to be appropriated, the prices at which similar lands in the vicinity have changed hands in recent years, the estimate of the value of these lands set forth in the testimony of the witnesses Crowe and Pastor and in the testimony of the claimants and their witnesses, we are of opinion that the compensation allowed by the court below, in conformity with the report of the commissioners, is grossly excessive and exorbitant and must be set aside; and giving all the evidence in the record the consideration to which it is entitled, and making a liberal estimate of the values in view of the fact that the wishes and desires of the owners of the land in question have not been, and cannot be consulted in the determining the amount and location of the lands taken and whether or not they should part with them, we are of opinion that just compensation for the lands described and classified in the opinion of the trial judge, including the so-called mejoras (improvements) thereon, consisting of growing crops, plants, bushes, trees and the like, other than fruit bearing coconut trees, should be fixed as follows:

For terrenos regadios con agua propia (first-class lands watered by springs), 12 centavos the square meter, or P1,200 the hectare; for terrenos regadios sin agua propia (second-class watered lands, not furnished with water from springs located on the land), 9 centavos the square meter, or P900 the hectare; and for all other lands, including the lands referred to in the decision as terrenos secanos (unwatered lands), 6 centavos the square meter, or P600 the hectare.

While there is not sufficient credible evidence in the record upon which to base a finding as to the amounts which should be allowed the various claimants by way of compensation for alleged consequential damages, a review of the whole record satisfies us that the findings of the commissioners and of the court below as to the amount of these damages are exorbitant and unreasonable, and so much so that the decree must be set aside in so far as it provides for compensation thereof. Aside from any question as to the impartially of the commissioners in determining the facts as to the nature and extent of these damages, it is manifest that their estimate of the amount of compensation which should be allowed therefor is based on a like exorbitant and extravagant valuation placed upon the lands which are alleged to have been damaged, as appears to have been placed on the lands actually taken.

No question is raised in this court as to the extent and location of the lands actually taken, nor as to the classification of these lands set forth in the decree as terrenos regadios con agua propia (first-class watered lands), terrenos regadios sin agua propia (second-class watered lands), and terrenos secanos (third-class unwatered lands), nor as to the right of the railroad company to a decree for the condemnation of these lands.

We conclude, therefore, that the disposing part of the decree entered in the court below should be affirmed except in so far as it fixes the amounts to be allowed the owners of the lands taken, by way of compensation for their lands and the so-called mejoras (improvements) thereon, consisting of growing crops, plants, bushes and trees, and except in so far as it determines the nature and extent of the alleged consequential damages and the amounts which should be allowed by way of compensation therefor; that the excepted portions of the decree should be reversed; and that the record should be returned to the court below where an appropriate decree will be entered fixing the amount of compensation to be allowed the owners of the lands taken as heretofore indicated, that is to say, for both the lands and the so-called mejoras thereon, other than fruit bearing coconut trees, at the rate of 12 centavos the square meter for all lands which were found to be terrenos regadios con agua propia in the decree of the court below; at the rate of 9 centavos the square for all lands which were found in the decree of the court below to be terrenos regadios sin agua propia; and at the rate of 6 centavos the square meter for all other lands taken, including the lands found to be terrenos secanos in the decree of the court below; and such further proceedings will be taken as may be necessary to ascertain the compensation which should be allowed the various claimants for fruit bearing coconut trees on any of the lands actually taken and for alleged consequential damages, including the appointment for new commissioners duly authorized to report thereon, after which the appropriate decree will be entered in the court below fixing the amount of the compensation to which the various claimants may be found to be entitled. So ordered.

Torres, Trent and Araullo, JJ., concur.
Moreland, J., did not sign.

DECISION ON MOTION FOR RULING.

CARSON, J.:

Counsel representing all the parties to the above entitled proceedings appear somewhat informally and ask for a ruling as to the rights of the lands owners to interest upon the amount of compensation fixed by the judgment in the above-entitled cause heretofore entered by this court, stating that a difference of opinion having arisen in this regard, the parties had agreed to submit the question to the court and accept its ruling thereon.

Assuming, without deciding, that the question is properly before us, we proceed to dispose of it in accord with the prayer of the parties, treating it as substantially equivalent to a request for instructions to the sheriff where a dispute arises as to the amount under a judgment for which execution should be levied.

The question submitted by the parties at this time is whether our judgment carried with it interest upon the amount fixed by way of compensation for the lands taken. It is suggested that in condemnation proceedings such as there now under consideration, the lands owner is entitled to interest upon the amount actually by the final judgment of the court, or at least upon the excess of that amount over the amount deposited at the time when the proceedings were instituted, from the time when possession was taken, until paid. But without stopping to consider what action the court would have taken had its attention been called to the omission in the judgment of any express provision for the payment of interest, before the judgment became final, it is sufficient at this time to say that an examination of the terms of the decision filed by this court on appeal discloses that it does not definitely determine the basis upon which the interest prior to the date of the judgment should or can be calculated, and, in fact, makes no provision for the payment of such interest. It follows, as of course, that the recovery of interest upon the amount of the judgment or of any part thereof, prior to the date of the judgment, cannot be enforced by execution, nor can interest be recovered by the land owners under the terms of the judgment.

Arellano, C.J., Araullo, Street and Malcolm, JJ., concur.
Johnson, J., took no part.

Batas Pinas