G.R. No. 233988. November 15, 2021.
REPUBLIC OF THE PHILIPPINES REPRESENTED BY THE MANILA INTERNATIONAL AIRPORT AUTHORITY (MIAA), PETITIONER, VS. SPOUSES MARIANO NOCOM AND ANACORETA O. NOCOM AND SPOUSES SY KA KIENG AND ROSA CHAN, AND GORGONIA CRUZ, NORBERTO DE LEON, ALEJANDRIA DE LEON ESPIRITU, GREGORIO CRUZ DE LEON, ANGELINA CRUZ RAMOS, ANGELES CRUZ, AND THE REGISTER OF DEEDS OF PARAÑAQUE CITY, RESPONDENTS.

FACTS

On January 25, 1982, the Manila International Airport Authority (MIAA) instituted expropriation proceedings (Civil Case No. 9712-P) for lands, including Lots No. 2817, 2818, and 2819, for the Ninoy Aquino International Airport (NAIA) expansion program. The Regional Trial Court (RTC) of Pasay City issued a Writ of Possession on January 24, 1983. The case was later transferred to the RTC of Makati, which on June 21, 1991, confirmed the expropriation and ordered MIAA to pay just compensation of P552.00/sq.m. with 6% interest from 1983. MIAA appealed the amount. During the appeal, MIAA subdivided the lots and moved for the exclusion of Lots 2817-A, 2818-A, 2818-B, 2819-A, and 2819-B from the expropriation, which the Court of Appeals granted on July 21, 1992, leaving only Lot 2817-B subject to expropriation. Meanwhile, the RTC of Makati, acting as a land registration court, granted the registration of the subject lots in favor of the heirs of the original owner, Emiliano Cruz, and Original Certificates of Title were issued. The heirs subsequently sold the lots to Spouses Mariano and Anacoreta Nocom and Spouses Sy Ka Kieng and Rosa Chan, and Transfer Certificates of Title were issued. The Court of Appeals affirmed the just compensation on December 27, 1993, and the decision became final on January 29, 1994. On August 12, 2009, Spouses Nocom filed a Petition for Recovery of Possession and Accounting (Civil Case No. 09-0276) before the RTC of Parañaque, claiming MIAA never paid just compensation and remained in possession of Lots 2817-B, 2818-B, and 2819-B, and praying for payment of rentals. MIAA refused payment and filed a Petition for Annulment of Titles (Civil Case No. 10-0064). The cases were consolidated. The RTC, in a Decision dated May 11, 2015, denied the recovery of possession but ordered MIAA to pay rentals for the use of the three lots from December 19, 1995, until December 2014, plus interest, and monthly rentals thereafter. It also dismissed MIAA’s annulment complaint. The RTC partially granted MIAA’s motion for reconsideration in an Order dated August 7, 2015, excluding from the rental computation the portion of Lot 2817-B within a 150-meter clearance from a taxiway. The Court of Appeals, in a Decision dated April 19, 2017, affirmed the RTC with modifications, adjusting the rental period and amounts. MIAA’s motion for reconsideration was denied. MIAA then filed the present Petition for Review.

ISSUE

Whether the Court of Appeals erred in affirming the trial court’s decision ordering MIAA to pay rentals and interest to the Spouses Nocom for the use of the subject lots.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ Decision with modifications. The Court held that the government, in exercising eminent domain, must follow the proper expropriation proceedings to determine just compensation. Just compensation is based on the fair market value at the time of taking, but when there is a delay in payment, the difference between the property’s present value and its value at the time of taking must be considered to compensate the landowner for lost profit. The Court found that the Spouses Nocom, as registered owners, had a cause of action for recovery of possession and accounting against MIAA, which remained in possession of the lots without paying just compensation or rentals. The Court ruled that MIAA’s possession of Lots 2818-B and 2819-B was unlawful as these were excluded from expropriation, and its possession of Lot 2817-B was also unlawful due to non-payment of just compensation. The Court modified the computation of just compensation for Lot 2817-B, setting it at P552.00/sq.m. with 6% interest per annum from January 24, 1983, until full payment, and legal interest of 6% per annum on the just compensation from the finality of judgment until full payment. For Lots 2818-B and 2819-B, the Court affirmed the award of reasonable rentals from the time of unlawful taking (December 19, 1995) until they are vacated, with legal interest of 6% per annum from finality of judgment until full payment. The Court also ordered MIAA to immediately vacate Lots 2818-B and 2819-B and surrender possession to the registered owners.