RE: the appointment of commissioners for the determination of just compensation for the property sought to be taken is a mandatory requirement

 RE: In expropriation cases, the appointment of commissioners for the determination of just compensation for the property sought to be taken is a mandatory requirement |

In Gingoyon, the government sought to expropriate only the improvements built on already government-owned land, and not a parcel of land. Particularly, it concerned the Ninoy Aquino International Airport International Passenger Terminal III (NAIA IPT III) facility built by Philippine International Air Terminals Co. Inc. (PIATCO) on government property. Since these properties were not land, they did not have a zonal valuation. Thus, its value was contested.⁴³

When the trial court in Gingoyon ordered the release of the amount of US$62.3 million to the property owners, the government objected, saying that the assessed value indicated in the complaint was only P3 Billion. It also insisted that Rule 67, and not Republic Act No. 8974, governed the proceedings.⁴⁴

In deciding the case, this Court noted the major difference between the proceedings under Rule 67 of the Rules of Court and under this law:

The most crucial difference between Rule 67 and Rep. Act No. 8974 concerns the particular essential step the Government has to undertake to be entitled to a writ of possession.

....

... Rule 67 merely requires the Government to deposit with an authorized government depositary the assessed value of the property for expropriation for it to be entitled to a writ of possession. On the other hand, Rep. Act No. 8974 requires that the Government make a direct payment to the property owner before the writ may issue. Moreover, such payment is based on the zonal valuation of the BIR in the case of land, the value of the improvements or structures under the replacement cost method, or if no such valuation is available and in cases of utmost urgency, the proffered value of the property to be seized.

....

It is the plain intent of Rep. Act No. 8974 to supersede the system of deposit under Rule 67 with the scheme of "immediate payment" in cases involving national government infrastructure projects....⁴⁵

The clarification in Gingoyon was necessary in view of the earlier but related case of Agan v. PIATCO⁴⁶ resolved by this Court (Agan Resolution). In the Agan Resolution, this Court stated that the government had to compensate PIATCO as builder of the structures comprising the NAIA IPT III facility, and that this "compensation must be just and in accordance with law and equity for the government [cannot] unjustly enrich itself at the expense of PIATCO and its investors."⁴⁷

Gingoyon was decided in the context of what "just compensation" meant considering the peculiar circumstances of the case and the differing requirements given by the Rules and Republic Act No. 8974. The government's insistence on Rule 67 was obvious to this Court, since under this Rule, "it would not be obliged to immediately pay any amount to PIATCO before it can obtain the writ of possession since all it [needs] do is to deposit the amount equivalent to the assessed value with an authorized government depositary."⁴⁸

In the end, Gingoyon decided that Republic Act No. 8974-direct payment to PIATCO-was more fitting to the situation because it complements the requirements of the Agan Resolution, as compared to the system of deposit in Rule 67.

Thus, Gingoyon's statement-that the appointment of commissioners may be resorted to, should not be interpreted to mean that it was merely optional. Such statement meant that the requirement by the Rules of appointing commissioners did not contradict Republic Act No. 8974 and was permissible. There was no conflict in this regard, in contrast with the patently different systems of deposit and direct payment.

Further, Gingoyon even referred to Section 14 of the Implementing Rules to show that the procedure under Rule 67 is applicable in expropriation cases initiated under Republic Act No. 8794. Thus, this Court holds that the appointment of commissioners is mandatory, if not necessary, in this case.⁴⁹

The Rules provide that the parties are given the opportunity to introduce evidence before commissioners, and that the commissioners are empowered to "assess the consequential damages to the property not taken[.]"⁵⁰

Indeed, Section 5(1) of Rule 67 requires the appointment of commissioners in the ascertainment of just compensation:

“SECTION 5. Ascertainment of compensation. - Upon the rendition of the order of expropriation, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken. The order of appointment shall designate the time and place of the first session of the hearing to be held by the commissioners and specify the time within which their report shall be submitted to the court[.]”

This Court has consistently characterized this procedure as mandatory. In Manila Electric Company v. Pineda:⁵¹

In an expropriation case such as this one where the principal issue is the determination of just compensation, a trial before the Commissioners is indispensable to allow the parties to present evidence on the issue of just compensation. Contrary to the submission of private respondents, the appointment of at least three (3) competent persons as commissioners to ascertain just compensation for the property sought to be taken is a mandatory requirement in expropriation cases.⁵²

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