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98 Phil. 218

[ G.R. No. L-7260, January 21, 1956 ]




This is an appeal from a decision in an expropriation proceeding  commenced in  the  Court of First Instance of Pangasinan by  the  Socilitor General  (in behalf of  the Philippine  Executive Commission,  now the  Republic  of the Philippines, plaintiff-appellant) on May 5, 1943.  The. defendant-appellee,   Proceso  Estacio (owner of  40,400 square meters of the  land expropriated),  was  one  of the many defendants.  The appellant was placed in possession of the land after depositing  the provisional value of P10,199.17  with the court. The  representative of  the Government destroyed the standing crops on appellee's land to carry  out the purpose of the expropriation. In 1947, by agreement between appellant and appellee, the value of the latter's land was paid, leaving only  the matter of the damages to his crops.

On October 1, 1949, appellee, among other owners, wrote the Project Engineer of the Agno River Control stating that they "are  agreeable to the proposition of your office that damage be assessed at the rate of P0.05  per  square meter." Payment of  appellee's  claim  was  accordingly recommended,  but due to lack of funds nothing was done.

On July 28,  1950,  appellee filed a motion praying for payment of his claim for damages with legal interest from the date of the filing of the complaint.  The Court of First Instance of Pangasinan rendered  a decision ordering appellant, through the Agnot Eiver Control Project, to pay the appellee the sum of P2,020 with legal interest from the date of occupancy by appellant of appellee's land (May 13,  ,1943). Appellant paid only  P2.020, but  refused  to pay the interest awarded.  Indeed, appellant moved for a reconsideration, alleging that "the government is not bound to pay interest except when it has expressly agreed to do so by contract or when the statute so provides." As this was denied, the  plaintiff appealed, contending  that the lower court erred in ordering the payment of legal interest on the  amount of P2.020 from May 13, 1943, and in ruling that after appellant had chosen  to pay P2,020,  it accepted the entire Judgment which thereby became final.

In the case of Republic of the  Philippines, vs. Lara et al., 50 Off. Gaz., 5778, we held that the owners of appropriated land are entitled  to recover  interest from the  date the Government takes possession of the condemned land, and the amounts granted by the court  shall cease to earn interest only from the moment they are paid to the owners or deposited in, court.  In Manila Railroad  vs. Attorney General, 41 Phil., 163, this Court held that the value  of the land  includes  also  that of the  crops.  Accordingly, appellant was  correctly  held liable  for the payment of interest.  However, as appellant deposited the provisional value of P10,199.17 upon  taking possession, and the sum of  P1,616  corresponded  to appellee, appellant's liability for interest  should be only  on  the  difference  between P2,020 and P1.616, or P404.

We cannot agree with appellant's contention that it is not liable for interest  because there was  a settlement as to the amount of damages.   It is noteworthy that  said amount was  arrived at long  after the institution of the expropriation  proceeding,  and  payment  was not made until  the court issued the corresponding order in  said proceeding nearly two years  after the determination of the value.

Appellant's  argument that  its payment of the sum of P2,020 as damages,  did not render the appealed decision final, is correct. Obviously appellant had to pay to prevent the running of interest; and its opposition to the award of interest,  was timely registered by the  filing of  its motion for reconsideration.

Wherefore, the  appealed decision is hereby modified in the sense that appellant  shall pay  interest only  on  the amount of P404.   So ordered  without costs.

Padilla, Montemayor, Reyes,  A., Bautista Angelo,  Labrador, Concepcion,  and Reyes, J.  B. L.,, JJ., concur.