TL;DR

In cases of double expropriation, just compensation for a later public project (like a highway) goes to the landowners at the time of the second taking, not to a previous landowner who was already compensated (or should have been) under an earlier agrarian reform program. The Supreme Court ruled that farmer-beneficiaries, who legally owned land under the Comprehensive Agrarian Reform Program (CARP) and possessed titles, were entitled to just compensation when their land was subsequently expropriated for the Subic-Clark-Tarlac Expressway (SCTEX) project. The Philippine Veterans Bank (PVB), the previous landowner dispossessed under CARP, was not entitled to SCTEX compensation, preventing unjust enrichment and affirming the rights of agrarian reform beneficiaries.

Clash of Public Interests: CARP Beneficiaries or Prior Landowner – Who Deserves Highway Compensation?

This case delves into a complex scenario involving two government expropriations affecting the same land. The central legal question is: when land is taken for public use twice – first under agrarian reform and then for infrastructure development – who is entitled to just compensation for the second taking? Philippine Veterans Bank (PVB), the original landowner, argued they should receive compensation for the SCTEX project, even though the land was already distributed to farmer-beneficiaries, the Saguns, under CARP. The Supreme Court had to determine whether PVB, despite the prior CARP expropriation, still held a compensable interest in the land when the Bases Conversion and Development Authority (BCDA) initiated the SCTEX project. This decision clarifies the principles of ‘taking’ and ‘just compensation’ in the context of overlapping exercises of eminent domain, particularly when agrarian reform is involved.

The narrative begins with PVB’s predecessor-in-interest, BAIDECO, mortgaging the subject properties to PVB, which later foreclosed and acquired the land. However, before PVB could consolidate ownership, the Comprehensive Agrarian Reform Law (CARL) intervened. The subject properties fell under CARP, and farmer-beneficiaries Marcelo and Edner Sagun were awarded Certificates of Land Ownership Award (CLOAs) and Transfer Certificates of Title (TCTs) in 2001. Crucially, PVB was not notified of these CARP proceedings. Subsequently, in 2003, BCDA initiated expropriation for the SCTEX project, targeting the same parcels of land now titled to the Saguns.

PVB, claiming ownership, intervened in the SCTEX expropriation case, seeking just compensation. They argued that since they were not compensated for the CARP taking, they remained the rightful owners for compensation purposes in the SCTEX case. The Regional Trial Court (RTC) and the Court of Appeals (CA) both ruled against PVB, awarding compensation to the Saguns. These courts reasoned that the Saguns were the registered owners at the time of the SCTEX taking and that PVB’s claim should be directed towards the CARP expropriation proceedings. The Supreme Court affirmed this, emphasizing that the “taking” relevant to PVB occurred under CARP when they were dispossessed and the land was awarded to the Saguns.

The Supreme Court underscored the concept of “taking” in eminent domain, defining it as the point when an owner is deprived of property use or possession. In this case, the taking from PVB occurred in 2001 with the CARP distribution, not in 2003 with the SCTEX project. Just compensation, therefore, must relate to the loss suffered at the time of taking. As the Court stated, “just compensation is the ‘equivalent for the value of the property at the time of its taking. Anything beyond that is more and anything short of that is less, than just compensation. It means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating authority.’” The Court clarified that compensation aims to indemnify the owner for their loss at the time of taking, not to provide additional gains from subsequent expropriations.

The Court rejected PVB’s argument that they were entitled to compensation in the SCTEX case because they had not yet received CARP compensation. The proper recourse for PVB, the Court explained, was to pursue just compensation within the CARP framework. Awarding SCTEX compensation to PVB would constitute unjust enrichment, as they would be compensated twice for the same land – once potentially under CARP and again under SCTEX. Conversely, denying compensation to the Saguns, the legitimate landowners under Torrens titles at the time of the SCTEX expropriation, would be inequitable and contrary to the principles of agrarian reform.

The decision also highlighted the indefeasibility of CLOAs and TCTs issued under CARP after one year from registration. Section 24 of the CARL, as amended, explicitly grants CLOAs the same legal security as Torrens titles:

Section 24. Award to beneficiaries. — The rights and responsibilities of the beneficiaries shall commence from their receipt of a duly registered emancipation patent or certificate of land ownership award and their actual physical possession of the awarded land. Such award shall be completed in not more than one hundred eighty (180) days from the date of registration of the title in the name of the Republic of the Philippines: Provided, That the emancipation patents, the certificates of land ownership award, and other titles issued under any agrarian reform program shall be indefeasible and imprescriptible after one (1) year from its registration with the Office of the Registry of Deeds, subject to the conditions, limitations and qualifications of this Act, the property registration decree, and other pertinent laws.

The Saguns’ titles, issued in 2001, were valid and indefeasible by 2003 when the SCTEX expropriation began, solidifying their right to compensation. The Supreme Court thus reinforced the primacy of agrarian reform beneficiaries’ rights when land is subjected to subsequent public use projects.

Finally, the Court modified the interest rate on the just compensation, applying 12% per annum from the taking in 2004 until June 30, 2013, and 6% per annum from July 1, 2013, until finality, and 6% per annum thereafter until full payment, aligning with prevailing jurisprudence on legal interest.

FAQs

For inquiries regarding the application of this ruling to specific circumstances, please contact Atty. Gabriel Ablola through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Philippine Veterans Bank v. Bases Conversion and Development Authority, G.R. No. 217492, October 4, 2021