G.R. No. 75979 ; January 17, 1990
Raymundo Marabeles and Paciano Delalamon, petitioners, vs. Court of Appeals and the Republic of the Philippines, represented by Leyte Sab-a Basin Development Authority, respondents.

FACTS

The Leyte Sab-a Basin Development Authority initiated an expropriation proceeding to acquire land for an industrial estate in Isabel, Leyte, pursuant to Letter of Instructions No. 962. The Regional Trial Court of Ormoc City issued an order of condemnation and appointed commissioners under Rule 67 of the Rules of Court to determine just compensation. The commissioners submitted their report, and while most defendants acquiesced, petitioners Raymundo Marabeles and Paciano Delalamon contested it, presenting their own evidence. The trial court rendered a decision ordering the Authority to pay Marabeles P45,000 and Delalamon P19,000 for their respective properties.
On appeal, the Court of Appeals not only affirmed the trial court’s reliance on the commissioners’ report but also modified and reduced the compensation amounts. Applying Presidential Decree No. 464, as amended, the appellate court held that just compensation should not exceed the market value declared by the owner in the tax declaration or the assessor’s value, whichever is lower. Since the values in the petitioners’ tax declarations (P6,470 for Marabeles and P10,310 for Delalamon) were lower than the commissioners’ valuations, the Court of Appeals adopted these lower figures as the just compensation.

ISSUE

Whether the Court of Appeals erred in applying Presidential Decree No. 464, as amended, to determine the just compensation for the expropriated properties.

RULING

Yes, the Court of Appeals committed reversible error. The Supreme Court reversed the appellate court’s decision and reinstated the trial court’s judgment. The legal logic is anchored on the constitutional principle that the determination of just compensation in eminent domain cases is a judicial function. In the landmark case of Export Processing Zone Authority v. Dulay, the Court had already declared the pertinent provision of P.D. No. 464 unconstitutional and void. This decree prescribed that just compensation shall be the lower value between the owner’s declared market value and the assessor’s determined market value.
The Court ruled that such a statutory formula constitutes an impermissible encroachment on judicial prerogatives. It reduces the court’s role to a mere ministerial act of selecting the lower of two values, thereby rendering the judicial proceeding a mere formality. This violates the constitutional guarantee that private property shall not be taken for public use without just compensation, as it deprives the courts of their discretionary power to independently ascertain what is fair and just based on evidence. The proper mode for determining just compensation is through judicial proceedings with the aid of commissioners, as provided under Rule 67 of the Rules of Court, which the trial court correctly followed. The factual findings of the commissioners, as approved by the trial court, were not modified by the Court of Appeals and there was no compelling reason for the Supreme Court to review them. Consequently, the compensation originally awarded by the trial court was reinstated.