DIGEST: REPUBLIC VS. HOLY TRINITY DEVELOPMENT INC

 

FACTS:

The Republic of the Philippines, represented by the Toll Regulatory Board (TRB), filed with the RTC a Consolidated Complaint for Expropriation against landowners whose properties would be affected by the construction, rehabilitation, and expansion of the North Luzon Expressway.

The Holy Trinity Reality and Development Corporation was one of the affected landowners. TRB filed an Urgent Ex-Parte Motion for the Issuance of a Writ of Possession, manifesting that it deposited a sufficient amount to cover the payment of 100% of the zonal value of the affected properties (in the total amount of 28,406,700 pesos) with the Land Bank of the Philippines, South Harbor Branch (LBP-South Harbor), an authorized government depository. TRB maintained that since it had already complied with the provisions of Sec. 4 of RA 8974 in relation to Sec. 2 of Rule 67 of the Rules of Court, the issuance of the writ of possession becomes ministerial on the part of the RTC. RTC issued an Order for the Issuance of the Writ of

Possession as well as the Writ of Possession itself. Holy Trinity moved for reconsideration.

The Sheriff filed with the RTC a Report on Writ of

Possession stating that since none of the landowners voluntarily vacated the properties subject of the expropriation proceedings, the assistance of the PNP would be necessary in implementing the Writ of Possession. Accordingly, TRB, through OSG, filed with the RTC an Omnibus Motion praying for an Order directing the PNP to assist the Sheriff in the

Implementation of the Writ of Possession.

The Holy Trinity filed with the RTC a Motion to

Withdraw Deposit, praying that it be allowed to withdraw 22,968,000 out of 28,406,700, including the interest which accrued thereon. RTC granted the motion (except as to the interest) since Holy Trinity already proved its absolute ownership over the properties and paid the taxes due to the government. RTC conducted a hearing on the accrued interest, after which it directed the issuance of an Order of Expropriation, and granted TRB a period of 30 days to inquire from LBP-South Harbor whether the deposit made by DPWH with the bank relative to the expropriation proceedings is earning interest or not. TRB submitted a Manifestation to which was attached the letter by Atty. Osoteo stating that the DPWH Expropriation Account was an interest bearing current account. RTC resolved the issue by ruling that the interest earnings from the deposit of 22,968,000 (under the principle of accession) are considered as fruits and should properly pertain

to the property owner (in this case, Holy Trinity). Upon motion of TRB, it issued an Order of Expropriation. But later on, it reversed itself stating that the issue as to who is entitled to the

Payment of interest should be ventilated before the Board of Commissioners. The CA reversed.

ISSUE:

Whether or not Holy Trinity is only entitled to the amount equivalent to the zonal value of the expropriated property and not to the accrued interest?

RULING

RULING: TRB failed to distinguish between the expropriations procedures under RA 8974 and Rule 67. The former specifically governs expropriation proceedings for national government infrastructure projects. In the case of Republic vs. Gingoyon, the SC ruled that under RA 8974, the government is required to make immediate payment to the property owner upon the filing of the complaint to be entitled to a writ of possession, whereas in Rule 67, the government is authorized only to make an initial deposit with an authorized government depositary. In the case at bar, the proceedings deal with the expropriation of properties intended for a national government infrastructure project. Thus, the RTC was correct in applying the procedure laid out in RA 8974, by requiring the deposit of the amount equivalent to 100% of the zonal value of the properties sought to be expropriated.

 

The controversy though arises not from the amount of the deposit but as to the ownership of the interest that had since accrued on the deposited amount. The SC agrees with the ruling of the CA. The critical factor in the different modes of effecting delivery which gives legal effect to the act is the actual intention to deliver on the part of the party making such delivery. The intention of the TRB in depositing such amount through DPWH was clearly to comply with the requirement of immediate payment in RA 8974, so that it could already secure a writ of possession over the properties subject of the expropriation and commence implementation of the project. In fact, TRB did not object to Holy Trinity‘s Motion to Withdraw Deposit with the RTC, for as long as it shows (1) that the property is free from any lien or encumbrance and (2) that it is the absolute owner thereof. A close scrutiny of TRB's arguments would further reveal that it does not directly challenge the CA‘s determinative pronouncement that the interest earned by the amount deposited in the expropriation account accrues to Holy Trinity by virtue of accession. TRB only asserts that Holy Trinity is entitled only to an amount equivalent to the zonal value of the expropriated property, nothing more and nothing less. The SC agrees in TRB's statement since it is exactly how the amount of the immediate payment shall be determined in accordance with Sec4 of RA 8974, i.e., an amount equivalent to 100% of the zonal value of the expropriated properties. However, TRB already complied therewith by depositing the required amount in the expropriation account of DPWH with LBP-South Harbor. By depositing the said amount, TRB is already considered to have paid the same to Holy Trinity, and Holy Trinity became the owner thereof. The amount earned interest after the deposit; hence, the interest should pertain to the owner of the principal who is already determined as the Holy Trinity. The interest is paid by LBPSouth Harbor on the deposit, and TRB cannot claim that it paid an amount more than what it is required to do so by law. Nonetheless, the SC finds it necessary to emphasize that Holy Trinity is determined to be the owner of only a part of the amount deposited in the expropriation account, in the sum of P22,968,000.00. Hence, it is entitled by right of accession to the interest that had accrued to the said amount only.