G.R. No. 203039; September 11, 2013
REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH), Petitioner, vs. BANK OF THE PHILIPPINE ISLANDS (BPI), Respondent.

FACTS

On 12 February 1998, the DPWH filed a case for expropriation against portions of properties owned by BPI and Bayani Villanueva in Las Piñas City for the construction of the Zapote-Alabang Fly-Over. The parties did not object to the propriety of the expropriation. The trial court constituted a Board of Commissioners, which recommended a fair market value of ₱40,000.00 per square meter. In a Decision dated 25 November 1998, the trial court adopted this valuation and ordered the Republic to pay BPI ₱10,607,750.00 (after deducting a prior deposit) and Villanueva ₱4,425,000.00 as just compensation for their lands. On 15 December 1998, the acting branch clerk of court issued a Certification stating that this Decision had become final and executory as of 11 December 1998.
Meanwhile, on 16 December 1998, BPI filed a Motion for Partial New Trial to determine the just compensation for its building on the expropriated lot, which was not included in the 25 November 1998 Decision. The trial court granted the motion. After ex-parte proceedings and an ocular inspection, the trial court, in a Decision dated 10 September 1999, ordered the Republic to pay BPI ₱2,633,000.00 for the building. The Republic moved for reconsideration, arguing the proceeding was void for non-compliance with Rule 67 of the Rules of Court. The trial court granted the motion, set aside the 10 September 1999 Decision, and subsequently constituted a new Board of Commissioners.
The Republic then filed a Manifestation and Motion objecting to paying compensation for the building, claiming it was never taken by the government as the original plan was not implemented to avoid the costly structure. BPI opposed, stating it was unaware of any plan change and argued the building suffered consequential damage. The trial court denied the Republic’s motion, ruling the building’s demolition was a consequential damage, and ordered the Board to proceed.
The Board’s report presented two recommendations: BPI’s commissioner recommended ₱2,633,000.00, while the Republic’s commissioner recommended ₱1,905,600.00 based on the building’s tax declaration. In an Order dated 03 February 2003, the trial court adopted the lower amount of ₱1,905,600.00 as just compensation for the building. The Republic appealed to the Court of Appeals, which dismissed the appeal and affirmed the trial court’s order. The Republic then filed this petition for review.

ISSUE

Whether the trial court’s Order dated 03 February 2003, fixing the just compensation for BPI’s building at ₱1,905,600.00, is valid despite the finality of the 25 November 1998 Decision that determined just compensation for the land.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals’ Decision.
The Court held that the 25 November 1998 Decision, which became final and executory, pertained solely to the compensation for the land taken. It did not include compensation for the building, as BPI’s claim for the structure was the subject of a separate and timely Motion for Partial New Trial. The trial court validly granted this motion and properly conducted further proceedings to determine the building’s just compensation. The Republic’s argument that the finality of the land compensation judgment barred the claim for the building is incorrect. Just compensation must cover both the land and the improvements thereon. The subsequent proceedings for the building did not alter or reopen the final judgment regarding the land value.
Furthermore, the Court found that the Republic’s claim—that the building was not taken because the original plan was modified—was unsubstantiated. The evidence showed the building had to be demolished and relocated due to the expropriation project, constituting a consequential damage for which compensation is due. The trial court did not err in appointing commissioners and adopting the valuation based on the tax declaration, as this is one of the recognized methods for determining just compensation. Therefore, the Order dated 03 February 2003 is valid.