GR L 59603; (April, 1987) (Digest)
G.R. No. L-59603; April 29, 1987
EXPORT PROCESSING ZONE AUTHORITY, petitioner, vs. HON. CEFERINO E. DULAY, in his capacity as the Presiding Judge, Court of First Instance of Cebu, Branch XVI, Lapu-Lapu City, and SAN ANTONIO DEVELOPMENT CORPORATION, respondents.
FACTS
The President issued Proclamation No. 1811, reserving land in Mactan, Cebu, for an export processing zone to be established by petitioner Export Processing Zone Authority (EPZA). The reserved area included four parcels of land owned by private respondent San Antonio Development Corporation. EPZA offered to purchase the land based on the valuation method under Presidential Decree (P.D.) No. 464, which pegs compensation to the lower of the owner’s declared value or the assessor’s market value. The parties failed to agree, prompting EPZA to file an expropriation complaint.
The trial court issued a writ of possession and, after pre-trial, appointed commissioners to ascertain just compensation. The commissioners recommended a value of P15.00 per square meter. EPZA moved for reconsideration, arguing that P.D. No. 1533 had superseded the Rules of Court provisions on appointing commissioners. It contended that just compensation must be determined exclusively by the formula under the decree, not by judicial commissioners. The trial court denied the motion, leading EPZA to file this petition for certiorari and mandamus.
ISSUE
Whether Presidential Decree No. 1533, which prescribes an exclusive formula for determining just compensation based on the lower of the owner’s declared value or the assessor’s market value and eliminates the court’s discretion to appoint commissioners, is constitutional.
RULING
The Supreme Court ruled that P.D. No. 1533 is unconstitutional. The determination of just compensation in eminent domain cases is a judicial function. The constitutional guarantee that private property shall not be taken for public use without just compensation requires that the owner be given full opportunity to be heard and to present evidence on the property’s fair market value at the time of taking. The decree’s rigid formula, which ties compensation solely to tax declarations or assessor’s valuations, effectively precludes this judicial determination and violates due process.
The Court emphasized that tax values, often set for revenue purposes, are not conclusive indicators of fair market value in expropriation. They may be arbitrary or outdated. To allow an administrative valuation to absolutely prevail over a court’s judgment, made after commissioners’ views, evidence, and careful evaluation, is repugnant to justice and fairness. While the executive or legislative branches may make initial determinations, the final arbiter of just compensation, especially when a constitutional right is invoked, must be the courts. Therefore, the provisions of Rule 67 of the Rules of Court regarding the appointment of commissioners remain valid and operative. The petition was dismissed, and the temporary restraining order was lifted.