Heirs of Picadan v. ATO Digest

TOPIC
Value for Just Compensation

CASE NO. G.R. No. 162779
CASE NAME Heirs of Picadan v. ATO
MEMBER Robyn Bangsil

DOCTRINE
General Rule: The determination of just compensation in eminent domain cases is reckoned from the
time of taking.
Exception: When the application of the said rule would lead to grave injustice.

RECIT-READY DIGEST
Upon the death of Spouses Picadan, the ATO constructed a new terminal building on the spouses’
property and used it as an airport. The spouses' heirs demanded payment from the ATO amounting to
the value of the property and rentals for using the premises. Because of ATO’s refusal to pay, the heirs
filed with the RTC a complaint for payment of the value of the property and rentals. The trial court
ordered the ATO to pay rentals and the value of the land at P304.00 per square meter. The ATO
appealed this decision and the CA ruled that just compensation should be determined as of the time the
property was taken for public use. The heirs moved for reconsideration but it was denied. Aggrieved,
they filed the instant petition. The issue is which price must be used to determine the appropriate value
of just compensation? (See doctrine!)

SC ruled that applying the general rule in this case would lead to grave injustice because the ATO
had been using petitioners' property as an airport since 1948 without instituting the proper
expropriation proceedings. We cannot allow the ATO to invoke the right of eminent domain to take
advantage of the low value of the property at the time of taking that it arbitrarily chooses to the
prejudice of petitioners. In this particular case, justice and fairness dictate that the appropriate
reckoning point is when the trial court made its order of expropriation in 2001.

FACTS
- Spouses Mateo Pidacan and Romana Eigo acquired a parcel of land and Original Certificate of Title
(OCT) No. 2204 was issued in their names.
- Air Transportation Office (ATO) used a portion of the said property as an airport. Upon the death of
the Pidacan spouses in 1974, the ATO constructed a new terminal building on the property.
- The spouses' heirs (Pacita Pidacan Vda. de Zubiri and Adela Pidacan Vda. de Robles) demanded
payment from the ATO amounting to the value of the property and rentals for the using the
premises.
o However, payment could not be made because the property was still in their parents' name.
- OCT No. 2204 was cancelled and Transfer Certificate of Title (TCT) No. T-7160 was issued in favor of
the heirs. The heirs presented TCT No. T-7160 and the death certificates of their parents to the ATO,
but the latter still refused to pay them.
- Because of this, the heirs filed with the RTC a complaint for payment of the value of the property
and rentals against the ATO.
o The ATO filed a complaint for expropriation à Dismissed because it’s absurd for the ATO to
expropriate a parcel of land it considered its own.
- ATO was ordered to pay plaintiffs the amounts of :
o P304.00 per square meter for the area expropriated which totals P65,584,048 with
§ Interest of 12% per annum from February 1, 2001, until fully paid.
1
o Rental payments (Amount is not relevant but I’ll put the whole dispositive portion of this
decision in the notes just in case you want to know)
- The ATO appealed to the CA, who reversed the decision. Then, the heirs moved for reconsideration,
but it was denied. Aggrieved, the heirs filed this petition.
- Petitioners’ argument: The reckoning point for taking cannot be 1948 as the elements necessary to
constitute taking were not present at that time.
- Respondents’ argument: the fact of taking has been established by the Court of Appeals and
admitted by petitioners.
o The ATO stresses that for the purpose of fixing just compensation, the only issue is the time
of taking, which it maintains was in 1948 when an airport was constructed on the property.

ISSUE/S and HELD
1. WoN there was taking of the subject property? YES
2. Which amount must be used to determine the appropriate value of just compensation? Value at
Time of Taking, except when it would result to grave injustice (like in this case)

RATIO
1. On the issue of taking, eminent domain or expropriation is the inherent right of the state to
condemn private property to public use upon payment of just compensation.
- A number of circumstances must be present in the taking of property for purposes of eminent
domain:
§ the expropriator must enter a private property;
§ the entrance into private property must be for more than a momentary period;
§ the entry into the property should be under warrant or color of legal authority;
§ the property must be devoted to a public use or otherwise informally
appropriated or injuriously affected; and
§ the utilization of the property for public use must be in such a way as to oust
the owner and deprive him of all beneficial enjoyment of the property.
- When private property is rendered uninhabitable by an entity with the power to exercise
eminent domain, the taking is deemed complete.
- Taking occurs not only when the government actually deprives or dispossesses the property
owner of his property or of its ordinary use, but also when there is a practical destruction or
material impairment of the value of his property.
- In this case, it is the petitioners' private property was converted into an airport by respondent
ATO. As a consequence, petitioners were completely deprived of beneficial use and enjoyment
of their property.
o Clearly, there was taking as early as 1948 when the airport was constructed on
petitioners' private land.

2. On the issue of when to determine the appropriate value to be paid for just compensation, the rule
is determination of just compensation in eminent domain cases is reckoned from the time of taking.
- In this case, however, application of the said rule would lead to grave injustice.
o Note that the ATO had been using petitioners' property as airport since 1948 without
having instituted the proper expropriation proceedings.
o We cannot allow the ATO to conveniently invoke the right of eminent domain to take
advantage of the ridiculously low value of the property at the time of taking that it
arbitrarily chooses to the prejudice of petitioners.
2
- In this particular case, justice and fairness dictate that the appropriate reckoning point is when
the trial court made its order of expropriation in 2001.
- For the fair value of the subject property, we believe that the amount arrived at by the
commissioners appointed by the trial court, P304.39 per square meter, constitutes just
compensation to petitioners.
- However, the trial court's award of rental payments to petitioners is not supported by evidence
on record and must be deleted.
o To justify such award, the purported contract of lease must be proven by competent
evidence.

DISPOSTIVE PORTION
WHEREFORE, the petition is GRANTED. The assailed Decision dated August 20, 2003 and the Resolution
dated March 17, 2004 of the Court of Appeals in CA-G.R. CV No. 72404 are SET ASIDE. The Decision
dated February 1, 2001 of the Regional Trial Court of San Jose, Occidental Mindoro, Branch 46 in Civil
Case No. R-800 is AFFIRMED with MODIFICATION, as follows:
1. The actual area occupied by respondent ATO covered by Transfer Certificate of Title No. T-
7160, totaling 215,737 square meters is declared expropriated in favor of the ATO.
2. The ATO is ordered to pay petitioners the amount of P304.39 per square meter for the area
expropriated, or a total of P65,668,185.43 with interest at the rate of 6% per annum from
February 1, 2001, until the same is fully paid.

NOTES
RTC JUDGMENT
WHEREFORE, in view of all the foregoing, judgment is hereby rendered:
1. Expropriating the actual area occupied by the defendant Air Transportation O ce of the plaintiff's property
covered by Transfer Certificate of Title No. T-7160, totaling Two Hundred Fifteen Thousand Seven
Hundred Thirty Seven (215,737) square meters, in favor of defendant;
2. Ordering defendant Air Transportation Office to pay plaintiffs the amount of Three Hundred Four
(P304.00) Pesos per square meter for the area herein expropriated which totals to Sixty Five Million Five
Hundred Eight (sic) Four Thousand Forty Eight (P65,584,048.00) Pesos with interest thereon at the rate of
12% per annum from February 1, 2001, until the same is fully paid.
3. Ordering defendant Air Transportation Office to pay plaintiffs monthly rentals for the use and occupation
of the subject property cited in item No. 1 above, computed as follows:
a) Three Thousand Fifty Eight Pesos and Forty Centavos (P3,058.40) from 1957 to 1977;
b) Four Thousand Twenty Two Pesos and Sixty Five Centavos (P4,022.60) from 1978 to 1979;
c) Six Thousand Thirty Four Pesos and Fifty Centavos (P6,034.50) from 1980 to 1984;
d) Nine Thousand Six Hundred Ninety Nine Pesos and Sixty Centavos (P9,699.60) from 1985 to
1991;
e) Seventeen Thousand Nine Hundred thirteen Pesos and Sixty Centavos (P17,913.60) from 1992 to
1994;
f) Thirty Seven Thousand One Hundred Eighty One Pesos and Eighty Centavos (P37,181.80) from
1995 to 1997;
g) Fifty Four Thousand Six Hundred Fifty Eight Pesos and Sixty Centavos (P54,658.60) from 1998 to
January 31, 2001; or a total monthly rentals, from January 1, 1957 to January 31, 2001, of Six
Million Two hundred Forty Nine Thousand Six Hundred Forty Five Pesos and Forty Centavos
(P6,249,645.40) with interest thereon at the rate of 12% per annum, until the same is fully paid;
4. Ordering defendant ATO to pay plaintiffs ten (10%) per cent of the amount involved as and for attorney's
fees and expenses of litigation; and
5. Ordering defendant Air Transportation Office to pay the costs of suit.

Heirs of Picadan v. ATO Digest

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TOPIC

Value for Just Compensation

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