On the case of appropriated land

(Conclusion)

In Republic v. Espina & Madarang Co. (EMC) and Makar Agricultural Corp. (MAC), the Philippine government expropriated three parcels of land (collectively, “subject land”), which the estate of Insolvencia Voluntaria de Olarte Hermanos y Cia (“Olartes”) had claimed to own.

The Department of Public Works and Highways (DPWH) had been paying Olartes the Road Right of Way (RROW) compensation in installments.

This constrained respondents EMC and MAC to file against Olartes, her heirs, the DPWH, and the Register of Deeds a complaint before the Regional Trial Court (RTC).

In their complaint, EMC and MAC alleged that the subject land had been mortgaged to El Hogar Filipino to secure a loan. Upon Olartes’ failure to pay the loan, the subject land was sold at public auction to sisters Salud, Soledad, Mercedes, and Asuncion Espina (collectively, “Espina sisters”). The Espina sisters sold the subject land to MAC, which then sold a portion thereof to EMC.

Upon EMC and MAC’s motion, the RTC dismissed their complaint for being moot and academic, considering the Court of Appeals’ decision in an earlier case, which affirmed their ownership over the subject land.

The RTC favorably ruled on EMC and MAC’s motion. Moreover, it issued a supplemental order clarifying the amount to be paid by the DPWH to EMC and MAC.

The DPWH, represented by the Republic, appealed before the Supreme Court the RTC’s relevant order, directing its sheriff to immediately implement the writ of execution it had issued in relation to this case.

The Supreme Court ruled in favor of EMC and MAC, but directed them to file instead the necessary money claim before the COA, which jurisdiction was only confined to the execution stage since it had no power or authority to overturn a court’s final and executory judgment against the State.

Thus, EMC and MAC filed the instant motion, seeking for the Supreme Court to partially reconsider its decision.

Here, they referred to COA Resolution No. 2021-008 (the “Resolution”), stating that the COA would not have original jurisdiction over payments of just compensation based on a court judgment in expropriation proceedings and that it would only conduct post-audit.

Meanwhile, the Republic argued that the Resolution did not squarely apply in this case. Moreover, it could not be interpreted as to sanction the disbursement of public funds without the COA’s approval.

The Supreme Court granted EMC and MAC’s motion. At the outset, it has held that just compensation, as a requirement for the State’s exercise of its power to expropriate, includes determining the correct amount to be paid to the affected property owner and paying this amount within reasonable time from the taking of the property.

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Without prompt payment, compensation cannot be considered “just” because the owner is made to suffer the consequence of being immediately deprived of his land, while having to wait for a long period before actually receiving the amount necessary to cope with this loss.

In this regard, the Supreme Court condemned the government agencies’ supposed practice of initiating expropriation proceedings, only to thereafter refuse to pay just compensation after a final and executory judgment had been rendered in the property owner’s favor.

Here, EMC and MAC had been waiting to be paid their RROW for more than 15 years. While this delay warrants that the expropriated land be returned to them, it would be physically impossible to do so since it is now being used as part of a national highway.

Furthermore, while the COA is an independent constitutional body that possesses administrative or quasi-judicial functions in relation to its general audit power, this power is limited in that it can alter a court or tribunal’s final, favorable judgment on a money claim against the government.

The COA’s Resolution, as amended, seems to confirm this long-standing ruling, such that the COA’s approval is not necessary for every disbursement of public funds, such as in this case; and any such disbursement will be subject instead to the COA’s post-audit.