GR L 23766; (April, 1967) (Digest)
G.R. No. L-23766; April 27, 1967
Republic of the Philippines, plaintiff-appellant, vs. Jose C. Tayengco and Alicia Schmid-Echols, defendants-appellees.
FACTS
On April 17, 1957, the Republic of the Philippines filed a complaint for expropriation of parcels of land owned by Jose C. Tayengco and Alicia Schmid-Echols, needed for the widening and improvement of the Iloilo South Road, and simultaneously took possession of the properties. The defendants did not contest the right to expropriate but disputed the compensation, contending it should be P60.00 instead of P17.00 per square meter. On January 17, 1958, the plaintiff deposited the sum of P12,149.22 with the City Treasurer. The trial court authorized the defendants to withdraw this amount on January 25, 1958. The court later fixed the reasonable value at P35.00 per square meter and ordered the plaintiff to pay Tayengco P4,360.30 and Echols P20,652.80, with legal interest at 6% per annum from April 17, 1957, but crediting the amounts already withdrawn by the defendants as partial payments. The plaintiff moved for reconsideration, arguing that interest should be imposed only on the balance after deducting the deposit from the total compensation. Upon denial, it appealed.
ISSUE
Whether the legal interest on the compensation for expropriated properties should be computed on the total award from the date of taking, with the deposited amount ceasing to earn interest only from the date of its deposit, or whether interest should be computed only on the balance after deducting the deposit from the total award.
RULING
The Supreme Court affirmed the trial court’s decision. It ruled that the owners of expropriated lands are entitled to recover legal interest from the date the condemnor takes possession of the lands. The amounts granted shall cease to earn interest only from the moment they are paid to the owners or deposited in court. Applying this doctrine, the defendants are entitled to legal interest on their respective awards from April 17, 1957. However, the amount of P12,149.22 deposited on January 17, 1958, shall cease to bear interest as of that deposit date. The Court clarified that the plaintiff’s reliance on Republic vs. Lara was partially incorrect because, in the present case, the deposit was made nine months after the filing of the complaint and taking of possession, whereas in Lara, the deposit was made at the commencement of the proceedings.