G.R. No. L-10278; November 23, 1915
THE MANILA RAILROAD COMPANY, plaintiff-appellant, vs. ROMANA VELASQUEZ, MELECIO ALLAREY and DEOGRACIAS MALIGALIG, defendants-appellants.

FACTS:
The Manila Railroad Company instituted an action to expropriate twelve parcels of land in Lucena, Tayabas, for use as a railroad station site. The defendants were the original owners and subsequent purchasers of the land. Commissioners appointed by the court fixed the total value of the land at P81,412.75 and awarded P600 to defendant Simeon Perez as damages for the removal of an uncompleted camarin. The Court of First Instance approved the commissioners’ report and ordered the plaintiff to pay the total award. The plaintiff appealed, contending that the valuation was grossly excessive, as the land had only been used for rice cultivation. The plaintiff asked the Supreme Court to review the evidence and reduce the compensation.

ISSUE:
1. Whether the Supreme Court and the Courts of First Instance have the authority to review and modify the commissioners’ report on the valuation of expropriated property, including increasing or decreasing the award.
2. Whether the compensation awarded by the commissioners in this specific case was excessive and should be reduced.

RULING:
1. On the Authority to Modify the Commissioners’ Report: The Supreme Court held that both the Court of First Instance and the Supreme Court possess the authority to review and modify the commissioners’ report. Section 246 of the Code of Civil Procedure authorizes the court to “accept the report in part and reject it in part” and to “make such final order and judgment as shall secure to the plaintiff the property… and to the defendant just compensation.” This power includes the discretion to correct the report by increasing or decreasing the award to ensure just compensation. Furthermore, on appeal, under Sections 496 and 497 of the Code of Civil Procedure, the Supreme Court may review the evidence and render such final judgment as justice and equity require. This power is not in conflict with prior jurisprudence, which primarily addressed issues of competent evidence or procedural remands.

2. On the Propriety of the Award in this Case: The Supreme Court found the commissioners’ valuation of P81,412.75 to be excessive. The Court determined that a prior sale by defendant Romana Velasquez of a 16,094-square-meter parcel (constituting nearly half the station site) for P6,500, executed with knowledge of the impending expropriation, provided the most reliable criterion for the land’s market value. This sale reflected the land’s potential value as a station site and residential area, free from speculative inflation. Using this sale as a benchmark, the Court reduced the award for that specific parcel to P6,500 and proportionately reduced the compensation for the remaining parcels. The award of P600 to Simeon Perez for the removal of the unfinished building was upheld, as the commissioners were in the best position to assess the actual expenses, and no evidence showed the amount to be grossly excessive.

DISPOSITIVE PORTION:
The judgment of the lower court was MODIFIED. The award for the 16,094-square-meter parcel was reduced to P6,500, and the damages for the remaining parcels were fixed proportionately. The award of P600 for the removal of the building was affirmed. The total modified award, with interest, was to be deposited with the Clerk of the Court of First Instance of Tayabas. No costs were awarded on appeal.