GR 161836; (February, 2006) (Digest)
G.R. No. 161836 February 28, 2006
Manila International Airport Authority and Francisco E. Atayde, Petitioners, vs. Joaquin Rodriguez, Respondent.
FACTS
In the early 1970s, petitioner Manila International Airport Authority (MIAA) expanded its runway, occupying a portion of land without formal expropriation. Respondent Joaquin Rodriguez purchased the entire lot, which included the occupied portion, in 1996. He was aware of the airport’s occupation at the time of purchase. Rodriguez then demanded payment from MIAA for the occupied land and back rentals. Upon failure to reach an agreement, he filed an accion reinvindicatoria with damages. The trial court ruled in his favor, ordering MIAA to pay back rentals, the current market value of the land, exemplary damages, and attorney’s fees. The Court of Appeals modified this, limiting back rentals to the period after Rodriguez acquired ownership.
ISSUE
The core issues were: (1) whether Rodriguez, a purchaser with knowledge of the occupation, was entitled to compensation and damages; (2) the proper valuation date for just compensation; and (3) the propriety of awarding exemplary damages and attorney’s fees.
RULING
The Supreme Court ruled that the government’s occupation constituted a taking for public use, obligating it to pay just compensation. The right to compensation is an incident of ownership; thus, Rodriguez, as the registered owner, was entitled to it despite his knowledge of the occupation at the time of purchase. However, the Court held that just compensation must be based on the property’s value at the time of the taking in the 1970s, not its current market value, to prevent unjust enrichment. The award of back rentals as damages was deleted, as the proper remedy for the taking is the payment of just compensation with legal interest, not rentals. The Court found MIAA’s occupation without expropriation proceedings to be a wanton disregard of Rodriguez’s rights, warranting exemplary damages, which were reduced to ₱200,000. Attorney’s fees were also reduced to one percent of the amount due. The case was remanded to the trial court to determine the value at the time of taking.