31 Manila Railroad Co V Velasquez

5/28/2019 PHILIPPINE REPORTS ANNOTATED VOLUME 032
[No. 10278. November 23, 1915.]
THE MANILA RAILROAD COMPANY, plaintiff and

appellant, vs. ROMANA VELASQUEZ, MELECIO
ALLAREY and DEOGRACIAS MALIGALIG, defendants
and appellants.
1. EMINENT DOMAIN; VIEW BY THE COMMISSIONERS;

ITS PURPOSE AND EFFECT.—The view of the premises
made by the commissioners is for the purpose of better
enabling them to determine upon the weight of conflicting
evidence. Being disinterested landowners, selected for
their ability to arrive at a judicious decision in the
assessment of damages, and being allowed to view the
property, their report is entitled to greater weight than
that of an ordinary trier of facts.
287
VOL. 32, NOVEMBER 23, 1915. 287
Manila Railroad Co. vs. Velasquez.
2. ID.; COMPENSATION; ESTIMATE OF VALUE

CONFINED TO EVIDENCE OF RECORD.—
Notwithstanding the respect due the report of the
commissioners, their valuation of the property must be
supported by competent evidence of record, and in those
cases where the evidence as to value and damages is
conflicting, they should always set forth in full their
reasons for accepting certain evidence, especially in those
cases where a view of the premises has been made.
3. ID.; ID.; REPORT OF COMMISSIONERS; POWER OF

COURT TO SUBSTITUTE ITS OWN ESTIMATE OF
VALUE.—A Court of First Instance or, on appeal under
sections 496 and 497 of the Code of Civil Procedure, the
Supreme Court may substitute its own estimate of value
as gathered from the record submitted to it, in cases
where the only error of the commissioners is that they
have applied illegal principles to the evidence submitted to
central.com.ph/sfsreader/session/0000016afee035d220236e8b003600fb002c009e/t/?o=False 1/34
them; or that they have disregarded a clear preponderance

of the evidence; or that they have used an improper rule of
assessment in arriving at the amount of the award;
provided always that the evidence be clear and convincing
and the amount allowed by the commissioners is grossly
inadequate or excessive.
4. ID.; ID.; ID.; ID.—Adjudicated cases of this Supreme

Court and of courts of other jurisdictions having similar
procedure reviewed and found to support the power of the
court to thus modify the report of the commissioners.
5. ID.; ID.; EVIDENCE OF SALES OF NEARBY LAND;

WHEN ADMISSIBLE.— Evidence of bona fide sales of
other nearby parcels is competent if the character of such
parcels, as sites for business purposes, dwellings, or for
whatever use which enhances the pecuniary value of the
condemned land, is sufficiently similar to the latter that it
may be reasonably assumed that the price of the
condemned land would be approximately near the price
paid for the parcels sold. But to be admissible, the
property thus sold must be in the immediate
neighborhood, that is, in the zone of commercial activity
with which the condemned property is identified. The
sales must also be sufficiently near in point of time with
the date of the condemnation proceedings to exclude
general increases or decreases in property values due to
changed commercial conditions in the vicinity, and must
be made by one who is desirous but not obliged to sell, and
to one who is desirous but not obliged to buy.
6. ID,; JUST COMPENSATION.—"Compensation" means an

equivalent for the value of the land taken. Anything
beyond that is more and anything short of that is less than
compensation. The word "just" is used merely to intensify
the meaning of the word "compensation."
7. ID.; ID.; MARKET VALUE.—The market value of the

condemned
288
288 PHILIPPINE REPORTS ANNOTATED
land is all that the owner is entitled to. Evidence that the
locality may become a business or choice residential
district, when its history over a period of years shows that

there are large tracts of agricultural land in the vicinity,
including the condemned land, which have never been
appropriated for any of those purposes, does not justify
appraising such land at figures which it would be worth if
such development were an actual fact. Such evidence
amounts to a mere expectancy, the market value of which
is comparatively insignificant.
8. ID.; IMPROVEMENTS UNDERTAKEN WITH

KNOWLEDGE THAT EXPROPRIATION
PROCEEDINGS ARE CONTEMPLATED.—The owner of
property cannot. be divested of his title until
compensation is made or security given. Act No. 1258 as
amended affords a method whereby a railroad company
may, by the exercise of due diligence, protect itself from
the payment of damages for such improvements; and until
it takes a decisive step towards expropriating the land, the
owner cannot be estopped from claiming damages for such
improvements.
APPEAL from a judgment of the Court of First Instance of

Tayabas. Cui, J.
The facts are stated in the opinion of the court.
William A. Kincaid and Thomas L. Hartigan for
plaintiff.
Ledesma, Lim, & Irureta Goyena, for defendants.
TRENT, J.;
This action was instituted by the Manila Railroad

Company for the purpose of expropriating twelve small
parcels of land for a railroad station site at Lucena,
Province of Tayabas.
The original defendants were Romana Velasquez,
Melecio Allarey, and Deogracias Maligalig. After the filing
of the complaint Simeon Perez, Filemon Perez, and
Francisco Icasiano, having bought Romana Velasquez'
interest, were included as defendants. The commissioners
fixed the value of the twelve parcels at P81,412.75, and
awarded P600 to Simeon Perez as damages f or the
removal of an uncompleted camarín. Upon hearing, the
commissioners' report was approved and the plaintiff
directed to pay to the "Tayabas Land Company" the total
amount awarded, with. interest and costs. The plaintiff
company alleges that that amount
289
VOL. 32, NOVEMBER 23, 1915. 289

is grossly excessive, pointing out that the land has never

been used except f or rice culture.
Upon this appeal we are asked to review the evidence
and reduce the appraised value of the condemned land in
accordance with our findings rendering judgment
accordingly. Has this court, under the law, authority to
take such action? And along with this question it must be
decided whether the Courts of First Instance have such
power over the reports of commissioners. Section 246 of the
Code of Civil Procedure reads:
"Action of Court Upon Commissioners' Report.—Upon the filing of

such report in court, the court shall, upon hearing, accept the
same and render judgment in accordance therewith; or for cause
shown, it may recommit the report to the commissioners for f
urther report of facts; or it may set aside the report and appoint
new commissioners; or it may accept the report in part and reject
it in part, and may make such final order and judgment as shall
secure to the plaintiff the property essential to the execise of his
rights under the law, and to the defendant just compensation for
the land so taken; and the judgment shall require payment of the
sum awarded as provided in the next section, before the plaintiff
can enter upon the ground and appropriate it to the public use."
From this section it clearly appears that the report of the

commissioners on the value of the condemned land is not
final. The judgment of the court is necessary to give effect
to their estimated valuation. (Crawford vs. Valley R. R. Co.,
25 Grat, 467.) Nor is the report of the commissioners
conclusive, under any circumstances, so that the judgment
of the court is a mere detail or formality requisite to the
proceedings. The judgment of the court on the question of
the value of the land sought to be condemned is rendered
after a consideration of the evidence submitted to the
commissioners, their report, and the exceptions thereto
submitted upon the hearing of the report. By this judgment
the court may accept the commissioners' report
unreservedly; it may return the report for additional facts;
or it may set the
290

report aside and appoint new commissioners; or it may

accept the report in part or reject it in part, and "make
such final order and judgment as shall secure to the
plaintiff the property essential to the exercise of his rights
under the law, and to the defendant just compensation for
the land so taken." Any one of these methods of disposing of
the report is available to and may be adopted by the court
according as they are deemed suited to secure to the
plaintiff the necessary property and to the defendant just
compensation therefor. But can the latter method produce
a different result in reference to any part of the report from
that recommended by the commissioner ?
Section 246 expressly authorizes the court to "accept the
report in part and reject it in part." If this phrase stood
alone, it might be said that the court is only empowered to
accept as a whole certain parts of the report and reject as a
whole other parts. That is, if the commissioners fixed the
value of the land taken at P5,000, the improvements at
P1,000, and the consequential damages at P500, the court
could accept the report in full as to any one item and reject
it as to any other item, but could not accept or reject a part
of the report in such a way as to change any one of the
amounts. But the court is also empowered "to make such
final order and judgment as shall secure to the plaintiff the
property essential to the exercise of his rights under the
law, and to the defendant just compensation for the land so
taken." The court is thereby expressly authorized to issue
such orders and render such judgment as will produce
these results. If individual items which make up the total
amount of the award in the commissioners' report could
only be accepted or rejected in their entirety, it would be
necessary to return the case, so far as the rejected portions
of the report were concerned, for further consideration
before the same or new commissioners, and the court could
not make a "final order and judgment" in the cause until
the rejected portions of the report had been rereported to it.
Thus, in order to give the quotation from 246 its proper
meaning, it is obvious that the court may, in its discretion
291
VOL. 32, NOVEMBER 23, 1915. 291

correct the commissioners' report in any manner deemed

suitable to the occasion so that final judgment may be
rendered and thus end the litigation. The "final order and
judgment" are reviewable by this court by means of a bill of
exceptions in the same way as any other "action." Section

496 provides that the Supreme Court may, in the exercise
of its appellate jurisdiction, affirm, reverse, or modify any
final judgment, order, or decree of the Court of First
Instance, and section 497, as amended by Act No. 1596,
provides that if the excepting party filed a motion in the
Court of First Instance for a new trial upon the ground that
the evidence was insufficient to justify the decision and the
judge overruled such motion and due exception was taken
to his ruling, the Supreme Court may review the evidence
and make such findings upon the facts by a preponderance
of the evidence and render such final judgment as justice
and equity may require, So it is clear from these provisions
that this court, in those cases where the right of eminent
domain has been exercised and where the provisions of the
above section have been complied with, may examine the
testimony and decide the case by a preponderance of the
evidence; or, in other words, retry the case upon the merits
and render such order or judgment as justice and equity
may require. The result is that, in our opinion, there is
ample authority in the statute to authorize the courts to
change or modify the report of the commissioners by
increasing or decreasing the amount of the award, if the
facts of the case will justify such change or modification. As
it has been suggested that this conclusion is in conflict with
some of the former holdings of this court upon the same
question, it might be well to briefly review the decisions to
ascertain whether or not, as a matter of f act, such conflict
exists.
In City of Manila vs. Tuason (R. G. No. 3367, decided
March 23, 1907, unreported), the Court of First Instance
modified the report of the commissioners as to some of the
items and confirmed it as to others. On appeal, the
Supreme Court remanded the cause, apparently for the
reason that
292

the evidence taken by the commisioners and the lower

court was not before it, and perhaps also because the
commissioners adopted a wrong principle of assessing
damages.
In Manila Railway Co. vs. Fabie (17 Phil. Rep., 206) the
majority report of the commissioners appraised the land at
P56,337.18, while a dissenting commissioner estimated it
at P27,415.92. The Court of First Instance, after taking

additional evidence upon the consequential benefits to the
remainder of defendants' land by the construction of the
railroad, and also as to the rental value of various pieces of
land in the locality, fixed the value of the land at the sum
estimated by the dissenting commissioner. The defendants
appealed to this court. This court remarked that the only
evidence tending to support the ,majority report of the
commissioners consisted of deeds of transfer of real estate
between parties in that community showing the prices paid
by the vendees in such conveyances. It was held that
without its being shown that such transfers had been made
in the ordinary course of business and competition, and
that the parties therein stated were not fictitious, such
deeds were incompetent as evidence of the value of the
condemned land. As to the action of the court in fixing the
price of the land at P27,415.92, the court said:
"Conceding, without deciding, that he also had the right to

formulate an opinion of his own as to the value of the land in
question, nevertheless, if he formulate such an opinion, he must
base it upon competent evidence. The difficulty with the case is
that it affirmatively appears from the record on appeal that there
is an entire absence of competent evidence to support the finding
either of the commissioners or of the court, even if the court had a
right to make a finding of his own at all under the circumstances."
In Manila Railroad Co. vs. Attorney-General (22 Phil. Rep.,

192) the only question raised was the value of certain
improvements on the condemned portion of a hacienda,
such improvements consisting mainly of plants and trees
and belonging to a lessee of the premises. The total
damages claimed were P24,126.50. The majority report of
the com-
293
VOL. 32, NOVEMBER 23, 1915. 293

mission allowed P19,478, which amount was reduced by

the Court of First Instance to P16,778. The plaintiff
.company, upon appeal to this court, alleged that the
damages allowed were grossly excessive and that the
amount allowed by the commissioners should have been
reduced by at least P17,000; while the defendant urged
that the damages as shown by the record were much
greater than those allowed, either by the commissioners or

by the court. In disposing of the case this court said:
"The only ground upon which the plaintiff company
bases its contention that the valuations are excessive is the
minority report of one of the commissioners. The values
assigned to some of the improvements may be. excessive
but we are not prepared to say that such is the case.
Certainly there is no evidence in the record which would
justify us in holding these values to be grossly excessive.
The commissioners in their report go into rather minute
detail as to the reasons for the conclusions reached and the
valuations fixed for the various items included therein.
There was sufficient evidence before the commissioners to
support the valuations fixed by them except only those
later modified by the court below. The trial court was of
opinion that the price of P2 each which was fixed for the
orange trees (naranjitos) was excessive, and this was
reduced to P1.50 for each tree; this on the ground that the
evidence discloses that these trees were comparatively
young at the time of the expropriation, and that the value
fixed by the majority report of the commissioners was that
of full-grown or nearly full-grown trees. We are of opinion
that this reduction was just and reasonable. Aside from the
evidence taken into consideration by the trial judge we find
no evidence in the record in support of the contention of the
railroad plaintiff that the valuations fixed in the majority
report of the commissioners and by the trial court are
grossly excessive, and plaintiff company having wholly
failed to offer evidence in support of its allegations in this
regard when the opportunity so to do was provided in
accordance with law, it has no standing in this court
294

to demand a new trial based on its unsupported allegations

of grossly excessive valuation of the property by the
commissioners and the court below."
This court affirmed the finding of damages made by the
trial court with the exception of an item for damages
caused by fire to improvements on lands adjoining those
condemned, which. was held not to be a proper matter to be
considered in condemnation proceedings. The court here
approved of the action of the Court of First Instance in
reducing the amount of damages fixed by the
commissioners as to the value of the young orange trees on

the strength of the evidence of record.
In Manila Railroad Company vs. Caligsihan (R. G. No.
7932, decided March 25, 1913, unreported), it appears that
the lower court approved in toto the report of the
commissioners. On appeal, this Supreme Court reversed
the lower court and remanded the case with orders to
appoint new commissioners, saying:
"Under the evidence in this case the award is excessive. Section

246 of the Code of Civil Procedure giving to the court the power to
'make such final order and judgment as shall secure to the party
the property essential to the exercise of his rights under the law,
and to the defendant just compensation for the land so taken,' we
exercise that right in this case for the purpose of preventing the
defendants from obtaining that which would be more than 'just
compensation' under all the evidence of the case.
"The judgment is reversed and the cause remanded, with
instructions to the lower court to appoint a new commission and
to proceed from that point de novo."
We will now examine the case (Philippine Railway Co. vs.

Solon, 13 Phil. Rep., 34) relied upon to support the
proposition that the courts should not interfere with the
report of the commissioners to correct the amount of
damages except in cases of gross error, showing prejudice
or corruption.
In that case the property belonging to the appellant
which the company sought to appropriate was his interest
as tenant in a tract of land belonging to the Government,
295
VOL. 32, NOVEMBER 23, 1915. 295

together with a house standing thereon and other property

belonging to him. He asked that he be awarded f or all the
property taken P19,398.42. The commissioners allowed him
P10,745.25. At the hearing had upon the report, the court
reduced this amount and allowed the appellant P9,637.75.
The commissioners took a large amount of evidence relative
to the amount of damages. The testimony was conflicting
as to the value of the house, two witnesses fixing it at over
P12,000; another at over P14,000; one at P8,750; another at
P6,250; and another at P7,050.95. The commissioners fixed
the value of the house alone at P9,500, and the court at
P8,792.50, This court said:
"Nor do we decide whether, in a case where the damages

awarded by the commissioners are grossly excessive or
grossly insufficient, the court can, upon the same evidence
presented bef ore the commissioners, itself change the
award. We restrict ourselves to deciding the precise
question presented by this case, in which it is apparent
that, in the opinion of the court below, the damages were
not grossly excessive, for its own allowance was only
P1,000 less than the amount allowed by the commissioners,
and the question is whether in such a case the court can
substitute its own opinion upon the evidence presented
before the commissioners for the opinion which the
commissioners themselves formed, not only from that
evidence but also from a view of the premises which by law
they were required to make/' Referring to the manner in
which the trial court arrived at its valuation of the various
items, including the house, this court said:
"Without considering the correctness of the rule adopted
by the court for determining the value of the property it is
sufficient to say that the evidence before the cominissioners
as to the value of the property taken was contradictory and
that their award was not palpably excessive or inadequate.
Under such circumstances, we are of the opinion that the
court had no right to interfere with it."
From the foregoing it is clear that (1) the testimony was
conflicting; (2) that the award as allowed by the com-
296

missioners was well within the amounts fixed by the

witnesses; and (3) that the award was not grossly
excessive. That it was not grossly excessive is shown by the
difference between the amount fixed by the commissioners
and that fixed by the court, this difference being P1,117.50,
a reduction of a little over 10 per cent,
In City of Manila vs. Estrada (25 Phil. Rep., 208), the
city sought to expropriate an entire parcel of land with its
improvements for use in connection with a public market.
The commissioners, after viewing the premises and
receiving evidence, being unable to agree, submitted two
reports to the court. In the majority report the value of the
land was fixed at P20 per square meter and in the minority
report at P10. The Court of First Instance fixed the value
at P15 per square meter. Upon appeal this court, after
reviewing the evidence, held that P10 per square meter
was a just compensation for the land taken and rendered

judgment accordingly, saying:
"After a careful examination of the entire record in this case and

the law applicable to the questions raised therein, we are of the
opinion that P10 per square meter is a just compensation for the
land taken."
From the above review of the cases it will be seen that this
court has not only not decided that the courts cannot
interfere with the report of the commissioners unless
prejudice or fraud has been shown, but the decisions, aside
from the case of the City of Manila vs. Estrada, tend to
show the contrary; that is, an award which is grossly
excessive or grossly insufficient in the opinion of the court
can be increased or decreased, although there be nothing
which tends to indicate prejudice or fraud on the part of the
commissioners. The case of the City of Manila vs. Estrada
is direct authority supporting the conclusions which we
have reached in the case at bar. And we are not without
authority outside of this jurisdiction which supports the
view we have taken in the case under consideration. In
Morgan's Louisiana & Texas R. R. Co. vs. Barton
297
VOL. 32, NOVEMBER 23, 1915. 297

(51 La. Ann., 1338), the court, in considering a procedural

law similar to our own, stated:
"On the question of the value of the land, 8.34 acres, the
commissioners have allowed $2,500, or $300 per acre. The
def endant has put in the record the testimony of witnesses
claimed to support the allowance. Without disregarding
this testimony, it is sufficient to say that the opinions of the
witnesses do not seem to be based on any f act calculated to
show the value of the land. * * * On the other hand the
plaintiff has placed bef ore us the titles of def endant of
recent date showing the price paid by him (the defendant) f
or the entire body of land of which the 8 acres are part; the
acts of sale of land in the same neighborhood, and of the
same quality; the assessment of defendant's property, and
other testimony on this issue of value. * * * Giving all
possible weight, or rather restricting the testimony of the
plaintiffs' witnesses to its due influence, and giving, we
think, necessary effect to the acts by which defendant
purchased, the acts of sale of other land, the assessment of
value, with due allowance for under assessment, and the

other testimony of record, we reach the conclusion that the
award gives two-thirds more than the value of the land. We
fix the value of the land at $833.33."
See also T. & P. R. R. Co. vs. Southern Develop. Co. (52
La. Ann., 535), where the court held the appraisement too
low and after discussing the evidence, increased the
amount of the award accordingly. A similar case is Abney
vs. Railroad Co. (105 La., 446). See also T. & P. R. R. Co. vs.
Wilson (108 La., 1; 32 So., 173); and Louisiana Western R.
Co. vs. Crossman's Heirs (111 La., 611; 35 So., 784), where
the point is touched upon.
In Missouri the statute' (1 Mo. Ann. Stat, sec. 1268)
directs that "the court shall make such order therein as
right and justice may require, and may order a new
appraisement, upon good cause shown." Owing to a
constitutional restriction, this provision has been construed
to apply only to damages and benefits resulting to land
owners
298

Manila. Railroad Co. vs. Velasquez,
in consequence of proposed improvements, the cash value

of property expropriated being an issue triable, at the
instance of either party by a jury subsequent to the
findings of the commissioners. Subject to this restriction,
however, it has been held that the above provision of law
gives the court the right to increase or decrease the amount
awarded by the commissioners. In the late case of Tarkio
Drainage District vs. Richardson (237 Mo., 49), the court
presents a lengthy review of its decisions on this subject.
The question now arises, when may the courts, with
propriety, overrule the award of the commissioners in
whole or in part, and substitute their own valuation of the
condemned property? We shall consider this question in
two ways: first, as one of procedure under section 246,
above quoted; and second, as to the evidence which must
appear in the record in order to justify such action.
From a mere reading of section 246 and the remarks just
made, it should be clear that the court is permitted to act
upon the commissioners' report in one of several ways, at
its own discretion. The whole duty of the court in
considering the commissioners' report is to satisfy itself
that just compensation will be made to the defendant by its
final judgment in the matter, and in order to fulfill its duty
in this respect the court will be obliged to exercise its

discretion in dealing with the report as the particular
circumstances of the case may require. But generally
speaking, when the commissioners' report cannot with
justice be approved by the court, one of three or four
circumstances will usually present itself, each of which has
for its antidote one of the methods of dealing with the
report placed at the disposal of the court by section 246.
Thus, if it be successfully established that the
commissioners refused to hear competent evidence
material to the case, then all the evidence in the case would
not be bef ore the court. The court could not, with reason,
attempt to either approve or change the report, as it stood,
for the reason that all the evidence of the case would not
have been considered by the commissioners nor have been
presented to the court; and the remedy
299
VOL, 32, NOVEMBER 23, 1915. 299

would be to "recommit the report of the commissioners for

further report of facts." Again, if improper conduct, fraud,
or prejudice be charged against the commissioners and this
charge be sustained it would be safer to set aside the award
thus vitiated and "appoint new commissioners" who could
render a report not tainted by these things. But when the
only error of the commissioners is that they have applied
illegal principles to the evidence submitted to them; or that
they have disregarded a clear preponderance of the
evidence; or that they have used an improper rule of
assessment in arriving at the amount of the award, then, in
such a case, if the evidence be clear and convincing, the
court should ordinarily be able, by the use of those correct
legal principles which govern the case, to determine upon
the amount which should be awarded without returning
the report to the commissioners. When the matter stands
in this light, it becomes the duty of the court to make "final
order and judgment" in which the proper award will be
made and thus end the litigation between the parties.
Now, what evidence as to value must the record contain
in order to justify the court in disregarding the valuation
fixed upon the condemned property by the commissioners
and substituting therefor its own finding of value? It is
almost a universal practice in the United States to submit
the question of value in expropriation cases to a jury or
commission, usually of local property owners, and one of
the things they are specially instructed to do is to view or

inspect the condemned property. The purpose of this view
and the additional weight which should be given to the
award of the appraisers because of the view are questions
often discussed. After a careful examination of a number of
adjudicated cases, we have concluded that the following
cases, all agreeing in principle, correctly state the purpose
of the view.
In Denver Co. vs. Howe (49 Colo., 256; 112 P., 779), it
was said: "The jury viewed the premises and were better
able to judge of the number of acres in each, as well as
other conditions affecting the land. The facts ascertained
300

by the view of the premises are not in the record, whether

they were regarded as so much additional evidence, or were
used to better understand and apply the evidence adduced
at the trial. Keeping in view the evidence relating to the
special value of the building site, the value of
improvements and of the ground, it will be found that the
verdict is within and supported by the values as testified
to, and these values, as fixed by the several witnesses,
represented to each the market value, as conceded by
appellants. The verdict is supported by the evidence of
market value and on that ground would have to be
sustained if the matter complained of in the instruction
had been entirely omitted."
In Gorgas vs. Railroad Co. (114 Pa., 1; 22 Atl., 715), it
was said: "A view may sometimes be of the highest
importance, where there is a conflict of testimony. It may
enable the jurors to see on which side the truth lies, And if
the witnesses on the one side or the other have testified to
a state of facts which exists only in their imagination, as to
the location of the property, .the manner in which it is cut
by the road, the character of the improvements, or any
other physical fact bearing upon the case, they surely
cannot be expected to ignore the evidence of their senses
and give weight to testimony which their view shows to be
false. * * * The true rule in such cases is believed to be that
the jury in estimating the damages shall consider the
testimony as given by the witnesses, in connection with the
f acts as they appear upon the view; and upon the whole
case, as thus presented, ascertain the difference between
the market value of the property immediately bef ore and
immediately after the land was taken. This difference is

the proper measure of damages."
In Close vs. Samm (27 lowa, 503), subsequently
approved in Guinn vs. Railway Co. (131 lowa, 680, 683; 109
N. W., 209), it was said: "The question then arises as to the
purposes and intent of this statute. It. seems to us that it
was to enable the jury, by the view of the premises or place
to better understand and comprehend the testimony of the
witnesses respecting the same, and thereby the more
301
VOL. 32, NOVEMBER 23, 1915. 301

intelligently to apply the testimony to the issues on trial

before them, and not to make them silent witnesses in the
case, burdened with testimony unknown to both parties,
and in respect to which no opportunity f or cross-
examination or correction of error, if any, could be afforded
either party. If they are thus permitted to include their
personal examination, how could a court ever properly set
aside their verdict as being against the evidence, or even
refuse to set it aside without knowing the facts ascertained
by such personal examination by the jury ? It is a general
rule certainly, if not universal, that the jury must base
their verdict upon the evidence delivered to them in open
court, and they may not take into consideration facts
known to them personally, but outside of the evidence
produced before them in court. If a party would avail
himself of the facts known to a juror, he must have him
sworn and examined as other witnesses."
In C. K. & W. R. Co. vs. Mouriquand (45 Kan., 170), the
court approved of the practice of instructing the jury that
their view of the premises was to be used. in determining
the value of conflicting testimony, saying: "Had the jury
disregarded all the sworn evidence, and returned a verdict
upon their own view of the premises, then it might be said
that the evidence which the jurors acquired f rom making
the view had been elevated to the character of exclusive
and predominating evidence. This is not allowable. The
evidence of the witnesses introduced in the court on the
part of the landowner supports fully the verdict. If the
verdict was not supported by substantial testimony given
by witnesses sworn upon the trial, we would set it aside,
but as the jury only took into consideration the result of
their view of the premises, in connection with the sworn
evidence produced before them, to determine between
conflicting evidence, the instruction was not so erroneous

as to require a new trial."
In Postal Telegraph-Cable Co. vs. Peyton (124 Ga., 746}
52 S. E., 803 ; 3 L, R. A., N. S., 333), it was said: "A jury
cannot be lef t to roam without any evidence in the
ascertain-
302

ment and assessment of damages. The damages which the

law allows to be assessed in favor of a landowner whose
property has been taken or damaged under the right of
eminent domain are purely compensatory. The land
actually appropriated by the telegraph company amounted
to only a fraction of an acre; and while it appeared that the
construction and maintenance of the telegraph line would
cause consequential damages to the plaintiff, no proof was
offered from which any fair and reasonable estimate of the
amount of damages thereby sustained could be made. The
jury should have been supplied with the data necessary in
arriving at such an estimate. In the absence of this
essential proof, a verdict many times in excess of the
highest proved value of the land actually taken must
necessarily be deemed excessive. Judgment reversed."
In New York, where the question has doubtless been
raised more often than anywhere else, the late cases
illustrate the rule, perhaps the most clearly. The appellate
division, supreme court, in In re Titus Street in City of New
York (123 N. Y. S., 1018), where it appeared that the city's
witnesses testified that the property was worth $9,531 and
the commissioners awarded $2,000 less, said:
"We do not think that this is meeting the requirements
of the law; we do not believe that it is within the province
of commissioners to arbitrarily set up their own opinion
against that of the witnesses called by the city, and to
award damages largely below the figure to which the
moving party is committed, without something appearing
in the record to justify such action. When a party comes
into court and makes an admission against his interest, no
court or judicial tribunal is justified in assuming that the
admission is not true without at least pointing out the
reason for discrediting it; it carries with it the presumption
of truth, and this presumption is not to be overcome by the
mere fact that the commissioners might themselves have
reached a different conclusion upon the viewing of the
premises. * * * This view of the commissioners, it seems to

us, is for the purpose of enabling the commissioners to
303
VOL. 32, NOVEMBER 23, 1915. 303

Manila, Railroad Co. vs. Velasquez,.
give proper weight and effect to the evidence before them,

and it might justify them in giving larger damages than
some of the witnesses thought proper, or even less than
some of them declared to be sustained, but where the
evidence produced by the moving party in a proceeding for
taking property for public purposes fixes a sum, without
any disagreement in the testimony on that side, we are of
the opinion that the cases do not justify a holding that the
commissioners are authorized to ignore such testimony and
to substitute their own opinion, in, such a manner as to
preclude the supreme court from reviewing the
determination. That is not in harmony with that due
process of law which is always demanded where rights of
property are involved, and would make it possible for a
corrupt commission to entirely disregard the rights of the
individual to the undisturbed enjoyment of his property, or
its equivalent."
From these authorities and keeping in mind the local
law on the subject, we think the correct rule to be that, if
the testimony of value and damages is conflicting, the
commissioners may resort to their knowledge of the
elements which affect the assessment and which were
obtained from a view of the premises, in order to determine
the relative weight of conflicting testimony, but their
award must be supported by the evidence adduced at their
hearings and made of record, or it cannot stand; or, in other
words, the view is intended solely for the purpose of better
understanding the evidence submitted. To allow the
commissioners to make up their judgment on their own
individual knowledge of disputed facts material to the case,
or upon their private opinions, would be most dangerous
and unjust. It would deprive the losing party of the right of
cross-examination and the benefit of all the tests of
credibility which the law affords. It would make each
commissioner the absolute judge of the accuracy and value
of his own knowledge or opinions and compel the court to
affirm the report on the facts when all of such facts were
not before it. The evidence of such knowledge or of the
grounds of such opinions could not be preserved in a bill of
exceptions or
304

questioned upon appeal. It is no hardship upon any of the

parties to require that the award must be based upon the
evidence. It is the duty of each party to submit what
evidence of value he has and if he fails to do so he can not
complain if the appraisement is kept within the bounds of
the evidence presented to the commissioners.
" In those cases where the testimony as to value and
damages is conflicting the commissioners should always set
forth in full their reasons for accepting the testimony of
certain witnesses and rejecting that of others, especially in
those cases where a view of the premises has been made.
The commissioners are required by law to be
disinterested landowners of the province, selected by the
court with a view to their ability to arrive at a judicious
decision in the assessment of damages. The judgment of
men with these qualifications upon the price of real
property is entitled to some considerable weight. Being
local men, it may be assumed that they are familiar with
the local land values, the needs of the community in that
line, and the adaptability of particular sites to commercial
purposes. Then, too, their view of the premises enables
commissioners to better understand the evidence
submitted to them, as we have said above. The declarations
of witnesses as to the value of the land, as to its condition,
or the conditions of improvements which may be located
upon it, and comparisons made between the condemned
land and other land in the vicinity may all be better
understood by the commissioners if they have viewed the
premises. It is, therefore, no slight divergence from the
seeming preponderance of the evidence of record, as viewed
by the court, which will justify the court in brushing aside
the commissioners' report and appraising the property
itself, based only upon a perusal of the evidence which was
submitted to them. It is in those cases where the evidence
submitted to the commissioners as to value varies greatly
that the real difficulty lies. In these cases it is clear that
some of the evidence must be untrustworthy, Hence, it is
necessary to reject that evidence which shows the price to
be greatly higher or lower than the just compensa-
305
VOL. 32, NOVEMBER 23, 1915. 305

tion to which the defendant owner is entitled. If, after

making due allowance for the superior facilities which the
commissioners had for arriving at the correct value of the
property, the court is clearly of the opinion that the
evidence relied upon by them is untrustworthy, and that
other evidence rejected by the commission and which fixes
the value of the property at a figure greatly at variance
with their valuation of the property bears the earmarks of
truth, then it becomes the duty of the court to substitute
for the commissions' award the amount indicated by such
evidence. That the estimated value made by the appraisers
is to be given "great weight;" that such valuation is not to
be "lightly set aside;" that it will not be set aside "if there is
substantial testimony to support it," unless error is "plainly
manifest;" "unless it is apparent that injustice has been
done;" "unless the commissioners have clearly gone astray
or adopted erroneous principles;" "unless the
commissioners acted upon wrong principles, or their award
is grossly inadequate;" unless the award is "palpably
excessive or inadequate;" unless it is "grossly inadequate or
unequal," is the burden of all the cases.
Let us now examine the evidence, keeping these legal
principles in mind. The only discussion of the evidence of
value made by the lower court was as f ollows:
"To determine this question (the value of the land) the court
abides by and ref ers to the report of the commissioners dated
July 10, 1913, because it understands that it must accept this
report in all its parts for the reason that the prices fixed in the
said report of P3.75 per square meter for parcel 21-B, that of
P3.50 per square meter for parcel 21-A, and that of P2 per square
meter for the rest of the parcels (naming them) are reasonable
and just; the compensation which is made in the said report for
the damages occasioned to the defendant Simeon Perez being also
reasonable and just."
It will be seen that the lower court relied entirely upon the
findings of the commissioners. The commissioners justified
their appraisement of the land at a price so greatly
306

Manila Railroad Co, vs. Velasquez.
in excess of its value as agricultural land upon the

following considerations. First, the construction of the
provincial building and the high school had increased the
price of land in their vicinity. Second, the neighborhood of
these buildings had become a choice residential district.
Third, the population in the vicinity had increased since it
became known that the condemned property had been
selected as a station site by the railroad company. We
propose to discuss the evidence of value precisely along
these lines, starting first, however, with its value as
agricultural land, the only use to which it has ever been
put.
The condemned land is not located in the commercial
district of the town of Lucena, but is located near the
provincial building and the high school. The land has been
used from time out of mind solely for the cultivation of rice.
Deogracias Maligalig, one of the defendants, testified that
rice land in the municipality of Lucena was worth P500 per
cavan (hectare). Melecio Allarey, another defendant,
testified that such land was worth from P300 to P400 per
hectare. Agustin testified that such land was worth
between ?400 and P500 per hectare if not under irrigation,
and if under irrigation, more than P1,000. Ambrosio
Zaballero, owner of more than 30 parcels of land in the
municipality of Lucena, said that the site of the railroad
station was nothing but a rice field prior to the coming of
the railroad, worth f rom P300 to P400 per hectare. Cayo
Alzona, the only witness for the plaintiff, testified that, in
Candelaria, rice land was worth between P200 and P250
per hectare, he having purchased an uncleared parcel of
rice land for P150 per hectare. It seems fair to accept the
statement of the two defendants, Maligalig and Allarey,
and fix the price of the condemned land for agricultural
purposes at P500 per hectare.
Witnesses for the defendants, including three of the
latter, fixed the value of the condemned land at prices
ranging from P5 to P8 per square meter. The remaining
defendant, Icasiano, did not testify before the
commissioners. But in his answer filed about seven months
after purchasing the land for P0.81 per square meter, he
alleged that his
307
VOL. 32, NOVEMBER 23, 1915. 307

parcel was worth P5 per square meter. So that we have all

of the def endants and several other witnesses estimating
the value of the condemned land at about the same figure,
or from P50,000 to P80,000 per hectare.
The defendant, Melecio Allarey, testified that he owned
30,000 square meters of land in the vicinity of the railroad
station site, 2,895 square meters of which was wanted by
the plaintiff company. Upon being asked what the value of
his land was, he promptly replied that it was worth P5.50
per square meter. Asked if he were making his will
whether he would list this property at a total value of
P150,000, he evaded a direct reply by saying that he would
divide it among his children. Asked if he considered himself
the owner of land valued at P150,000, he replied that for
his purpose he figured on that price. Asked if he would
declare the land to be worth that sum in his sworn tax
declaration, he replied that he would accept the figures
fixed upon by the tax appraisers. His testimony shows
clearly that he did not desire to commit himself positively
to the assertion that his three hectares of land was worth
P150,000. His ambiguous and evasive replies on cross-
examination do not at all harmonize with his unequivocal
statement in his direct examination that his land was
worth P5.50 per square meter. Apparently, when
confronted with the price per hectare, which this estimate
would put upon his land, he was somewhat astounded.
Indeed, we are inclined to believe that one of the reasons
for the high Value placed upon the condemned land by all
the witnesses is that they were estimating the price per
square meter instead of per hectare, which is the customary
method of fixing the price of agricultural land. A perusal of
the remainder of the testimony of defendant Allarey shows
that he is paying annual taxes on his 30,000 square meters
of land amounting to between P12 and P13. He also naively
informs us that he has not been able to till the land lately
because he has no carabaos or other work animals.
Several of the witnesses for the defendants testified to
having purchased land in the vicinity of the station site
308

for residential purposes. Thus, Edard testified that he paid

P1,400 for 220 square meters in 1910. Andres Dinlasan
sold 119 square meters for P10 per square meter on June 6,
1912. He could give no reason why the purchaser had paid
so much for the land, but in response to a question said the

purchaser had some more land joining it. Agustin bought
1,900 square meters in 1910 for P2 per square meter.
Esteban Lagos paid P1,000 for a plot 16 by 18 meters in
1911. A most remarkable thing about these purchases is
that, as choice residential sites, they are so extremely
small. With the possible exception of the parcel purchased
by Agustin, the parcels in question are hardly generous
enough to permit of the construction of even a modest
mansion. Cayo Alzona testified that he purchased 2,200
square meters in 1906 for P350, and that he purchased a
little less than one hectare in 1912, all in the vicinity of the
station site, for which he paid P1,500. It will be noted that
there is considerable difference between these figures and
the prices at which the other witnesses testified they
purchased land in that neighborhood. That the evidence of
sales of nearby land was competent, there can be no doubt.
In Aledo Terminal Ry. Co. vs. Butler (246 111., 406; 92
N. E., 909), the court said: "Evidence of voluntary sales of
other lands. in the vicinity and similarly situated is
admissible in evidence to aid in estimating the value of the
tract sought to be condemned, but the value of such
testimony depends upon the similarity of the land to that
in question and the time when such sales were made and
the distance such lands are from those the value of which is
the subject of inquiry."
In an earlier case, the supreme court of Illinois stated
the rule as follows: "The theory upon which evidence of
sales of other similar property in the neighborhood, at
about the same time, is held to be admissible is that it
tends to show the fair market value of the property sought
to be condemned. And it can not be doubted that such sales,
when made in a free and open market, where a fair
opportunity for competition has existed, become material
and
309
VOL. 32, NOVEMBER 23, 1915. 309

often very important factors in determining the value of the

particular property in question." (Peoria Gas Light Co. vs.
Peoria Term. Ry. Co., 146 111., 372; 21 L. R. A., 373; 34 N.
E. 550.)
The supreme court of Massachusetts, in Fourth National
Bank vs. Com. (212 Mass., 66; 98 N. E., 86), affirms the
rule as follows: "It long has been settled that in the
assessment of damages where lands are acquired by

eminent domain evidence is admissible of the price received
from sales of land similar in character, and situated in the
vicinity, if the transactions are not so remote in point of
time that a fair comparison practically is impossible."
In Hewitt vs. Price (204 Mo., 31), it was said: "It is
sufficient to say upon this proposition that the law is well
settled in this State upon that subject, and while the value
or selling price of similar property may be taken into
consideration in determining the value of the piece of
property in litigation, it is equally true that the location
and character of such property should be similar and the
sale of such other property should at least be reasonably
near in point of time to the time at which the inquiry of the
value of the property in dispute is directed."
In Laing vs. United New Jersey R. R. & C. Co. (54 N. J.
L., 576; 33 Am. St. Rep., 682; 25 AM 409), it was said:
"Generally in this and other states evidence of sales of land
in the neighborhood is competent on an inquiry as to the
value of land, and if the purchases or sales were made by
the party against whom the evidence was offered it might
stand as an admission. But such testimony is received only
upon the idea that there is substantial similarity between
the properties. The practice does not extend, and the rule
should not be applied, to cases where the conditions are so
dissimilar as not easily to admit of reasonable comparison,
and much must be left to the discretion of the trial judge in
the determination of the preliminary question whether the
conditions are fairly comparable."
Evidence of other sales made in good faith is competent
if the character of such parcels as sites for business pur-
310

poses, dwellings, or for whatever other use which enhances

the pecuniary value of the condemned land is sufficiently
similar to the latter that it may be reasonably assumed
that the price 'of the condemned land would be
approximately near the price brought by the parcels sold.
The value of such evidence, of course, diminishes as the
differences between the property sold and the condemned
land increase. The property must be in the immediate
neighborhood, that is, in the zone of commercial activity
with which the condemned property is identified, and the
sales must be sufficiently near in point of time with the
date of the condemnation proceedings as to exclude general

increases or decreases in property values due to changed
commercial conditions in the vicinity. No two estates are
ever exactly alike, and as the differences between parcels
sold and the land condemned must necessarily be taken
into consideration in comparing values, we think it much
better that those differences should be shown as part of the
evidence of such sales, as is the practice in lowa. (Town of
Cherokee vs. S. C. & I. F. Town Lot and Land Co., 52 lowa,
279; 3 N. W., 42.) And where these differences are so great
that the sales in question can form no reliable standard for
comparison, such evidence should not be admitted.
(Presbrey vs, Old Colony & Newport R. Co., 103 Mass., 1.)
Aside from the bare fact that the real estate transactions
referred to by the witnesses were somewhere in the vicinity
of the condemned land, there is nothing to guide us as to
the relative value of the condemned land. The differences
which must have existed between the various parcels of
land in the vicinity we are left to imagine. And while the
commissioners' view of the condemned land undoubtedly
assisted them in forming their estimate of value, still
counsel should not have relied upon their astuteness to
discover differences in -values, but should have brought
them specifically to the attention of the commissioners. It
seems rather unusual, also, that the bare statements of
witnesses should be accepted as to the prices which nearby
parcels brought, in view of the insistence of counsel that
the condemned land is
311
VOL. 32, NOVEMBER 23, 1915. 311

nothing more than agricultural land. These sales should

have been thoroughly investigated to determine whether
they were made bona fide and, if so, whether they were not
attended by unusual circumstances which materially
increased the purchase price.
But while these transfers of nearby land are interesting
as bearing upon the value of the condemned land, the
record also shows several transfers of the latter itself after
it became generally known that it had been selected by the
railroad company as the site for its Lucena station. We
take it that these transactions, in which the def endants
were themselves parties, offer a far more certain basis for
estimating the value of the land than do their testimony
before the commissioners or the testimony of other
witnesses as to fancy prices paid for neighboring parcels.

Romana Velasquez, who owned the major portion of the
condemned land, disposed of hers to her nephews
surnamed Perez. Her first sale was on July 21, 1912. This
parcel contained 16,094 square meters and brought at this
time P6,500, or a little more than P0.40 per square meter.
A month later Perez sold this parcel to one Icasiano for
P13,000, or a little less than P0.81 per square meter. Sra.
Velasquez' next sale was of three parcels, the first two of
which contained approximately 23,000 square meters,
while the area of the third was described as three gantas of
rice. The total price of the three parcels was P2,500 or a
little over P0.10 per meter. In one of these parcels was
located approximately 8,700 square meters of the
condemned land which the commissioners reported at a
price higher than any of the rest.
On May 26, 1913, Icasiano, the then owner of the parcel
containing 16,094 square meters, sold it to the Tayabas
Land Company for P18,000; and on July 1, 1913, some
twenty days after the commissioners had rendered their
report, all of the remaining owners of the condemned land
sold their holdings, parcel by parcel, as it had been
assessed by the commissioners, to the same company for
P1.05 per square meter, with the exception of Simeon Perez
who sold the two parcels owned by him at P2.27 and P2.11,
respec-
312

tively. Here is the most convincing argument that all the

witnesses who placed values on the condemned property,
ranging from P5 per square meter to P8 per meter, were
seriously in error. After all the speculation concerning the
land, after the commissioners had reported its value at
prices ranging- from P2 to P3.75 per square meter, the
owners sold the land, parcel by parcel, as it had been
assessed by the commissioners for a little more than P1 per
meter, with the exception of Simeon Perez who accepted
P2.11 and 92.21 for the two parcels which the
commissioners had appraised at P3.50 and P3.75 per
meter, respectively. It is unfortunate that the
commissioners.did not have an opportunity to consider the
deeds executed by the defendants in favor of the Tayabas
Land Company. With the commissioners' valuation of the
land before them, the Tayabas Land Company was actually
able to purchase from the defendant all of the condemned

land at a greatly inferior price. The defendants were not
able to resist an offer of P1 and P2 per meter for their
holdings, notwithstanding their fervid declarations
before.the commissioners that their property was worth P5
per meter, and notwithstanding the official report by a
board composed of local men that it was worth from P2 to
P3,75 per meter. This, of course, does not include the
defendant Icasiano who sold out to the land company after
the commission had been appointed but before it had begun
its labors. It is to be remembered, however, that he both
bought and sold the land after the railroad company had
made known its intention of expropriating it, and that in
his answer to the complaint he alleged his land to be worth
P5 per meter.
Now, what was the object of the Tayabas Land Company
in purchasing the land? Evidently it was not with the
intention of making any use of it, for the railroad company
had long since taken possession. They, as well as the
owners, were simply speculating on the 'probability that
the award of the commissioners would be approved by the
court. It was little more than a sporty guess on each side as
to what would be allowed for the land by the final judg-
313
VOL. 32, NOVEMBER 23, 1915. 313

ment of the court. The company believed the award would

exceed P1.05 per meter, and the defendants thought the
risk that the award would be in a lesser amount was so
great that they let the land go for the price the company
offered them. Nor is it at all certain that the prices inserted
in these deeds of sale were not fictitiously inflated. The
circumstances under which the sales were made would
readily suggest the expediency of inserting fictitious prices
in the deeds.
The moment a parcel of land is wanted by a public
service corporation the price, for some occult reason,
immediately soars far beyond what the owner would think
of asking or receiving in the open market. Owners ask
fabulous prices for it and neighbors look on with an
indulgent smile or even persuade themselves that the land
is worth the price f or which the owner holds out—in. view
of the fact that it is wanted by a corporation, whose
financial resources are popularly supposed to be
inexhaustible. The resultant good to a community due to
the investment of new capital, the increased employment of

labor, and the services the corporation will render are for
the moment forgotten; and persons called upon for opinions
as to the price of the desired property, unconsciously
perhaps, relax from that sound business acumen which
guides them in their daily affairs, while they are
considering, not the price which they would care to pay if
they wanted the land, but the price which the corporation
ought to pay in view of the fact that it is a corporation.
The owner of condemned land is entitled to just
compensation. That is all the law allows him.
"Compensation" means an equivalent for the value of the
land (property) taken. Anything beyond that is more and
anything short of that is less than compensation. To
compensate is to render something which is equal in value
to that taken or received. The word "just" is used to
intensify the meaning of the word "compensation;" to
convey the idea that the equivalent to be rendered for the
property taken shall be real, substantial, full, ample. "Just
compensation,"
314

therefore, as used in section 246 of the Code of Civil

Procedure, means a fair and full-equivalent for the loss
sustained.
"The exercise of the power being necessary for the public
good, and all property being held subject to its exercise
when, and as the public good requires it, it would be unjust
to the public that it should be required to pay the owner
more than a fair indemnity for such loss. To arrive at this
fair indemnity, the interests of the public and of the owner
and all the circumstances of the particular appropriation
should be taken into consideration." (Lewis on Eminent
Domain, sec. 462.)
The compensation must be just to the public as well as
to the owners. (Searl vs. School District, 133 U. S., 533; 33
L. ed. 740.) Section 244 of our code says that:
"The commissioners shall assess the value of the
property taken and used, and shall also assess the
consequential damages to the property not taken and
deduct f rom such consequential damages the
consequential benefits to be derived by the owners from the
public use of the land taken."
"To assess" is to perform a judicial act. The

commissioners' power is limited to assessing the value and
to determining the amount of the damages. There it stops;
they can go no farther. The value and damages awarded
must be a just compensation and no more and no less. But
in fixing these amounts, the commissioners are not to act
ad libitum. They are to discharge the trust reposed in them
according to well established rules and form their judgment
upon correct legal principles. To deny this is to place them
where no one else in this country is placed, above the law
and beyond accountability.
There is no question but that the compensation to which
a defendant owner is entitled is the market value of the
condemned property, to which of course, must be added his
consequential damages- if any, or from which must be
deducted his consequential benefits, if any. Such was our
holding in Manila Railway Co. vs. Fabie (17 Phil. Rep.,
206). But, as stated in Packard vs. Bergen Neck Ry. Co. (54
N. J. L., 553; 23 A., 506) :
315
VOL. 32, NOVEMBER 23, 1915. 315

"The difficulty is not with the rule, but with its application.
For the determination of the market value of land, which is
that sum of money which a person, desirous but not
compelled to buy and an owner willing but not compelled to
sell, would agree on as a price to be given and received
therefor, is beyond doubt difficult. The test is logically and
legally correct, but is cannot be applied to land with the
accuracy with which it can be applied to stocks, bonds and
personal property generally. Still it is this test which
admittedly must be applied, even when the value of the
land and the damages are found in separate sums."
It is a very difficult matter to limit the scope of the
inquiry as to what the market value of condemned property
is. The market value of a piece of land is attained by a
consideration of all those facts which make it commercially
valuable. Whether evidence considered by those whose
duty it is to appraise the land is of that nature is often a
very difficult matter to decide. The Supreme Court of the
United States, in a carefully worded statement, marks out
the scope of the inquiry as follows:
"In determining the value of land appropriated for public
purposes, the same considerations are to be regarded as in
a sale of property between private parties. The inquiry in
such cases must be: What is the property worth in the

market, viewed not merely with reference to the uses to
which it is at the time applied, but with reference to the
uses to which it is plainly adapted; that is to say, what is it
worth from its availability for valuable uses? * . * * As a
general thing, we should say that the compensation to the
owner is-to be estimated by reference to the uses for which
the property is suitable, having regard to the existing
business or wants of the community, or such as may be
reasonably expected in the immediate future." (Boom Co.
vs. Patterson, 98 U. S., 403.)
This passage is quoted with approval in the late case of
St. Louis L M. & S. R. Co. vs. Theodore Maxfield Co. .(94
Ark., 135; 26 L. R. A., N. S., 1111; 126 S. W., 83), a very
well considered case.
316

The supreme court of Missouri has also formulated an

exceedingly clear statement of the matter in the Stock
Yards Case (120 Mo., 541) :
"The market value of the property means its actual
value, independent of the location of plaintiff's road
thereon, that is, the fair value of the- property as between
one who wants to purchase and one who wants to sell it;
not what could be obtained for it in peculiar circumstances
when greater than its fair price could be obtained; nor its
speculative value; nor the value obtained through the
necessities of another.- Nor, on the other hand, is it to be
limited to that price which the property would bring when
forced off at auction under the hammer. The question is, if
the defendant wanted to sell its property, what could be
obtained for it upon the market from parties who wanted to
buy and would give its full value."
These views are practically in accord with Lewis on
Eminent Domain (2d ed.), section 478, where the rule is
stated as follows:
"The market value of property is the price which it will
bring when it is offered for sale by one who desires, but is
not obliged to sell it, and is bought by one who is under no
necessity of having it. In estimating its value all the
capabilities of the property, and all the uses to which it
may be applied or for which it is adapted are to be
considered, and not merely the condition it is in at the time
and the use to which it is then applied by the owner. It is
not a question of the value of the property to the owner.

Nor can the damages be enhanced by his unwillingness to
sell. On the other hand, the damages cannot be measured
by the value of the property to the party condemning it, nor
by its need of the particular property. All the facts as to the
condition of the property and its surroundings, its
improvements and capabilities, may be shown and
considered in estimating its value." (Approved in Seaboard
Air Line vs. Chamblin, 108 Va., 42.)
Now, what was the utility of the land condemned? So far
as the record shows, its possible uses were, first, for the
317
VOL. 32, NOVEMBER 23, 1915. 317

cultivation of rice; second, as a residential site owing to its

proximity to the provincial building and the high school;
and third, as a railroad station site.
Its location f rom a farmer's point of view would
doubtless enhance its value, since it was so close to the
town of Lucena that the marketing of crops was a decidedly
simple matter. For this reason it was more valuable as
agriculture land than other farms farther away from town.
As a residential site it seems to have been -so far a
complete failure. How long the high school had stood there
the record does not state. But although the provincial
building had stood near it for several years, not a single
homebuilder had selected any portion of the condemned
land as a site for his residence. We note that all those who
testified at the hearing before the commissioners to having
purchased land in the vicinity for home sites, purchased
other land than that condemned. Nor does the record
contain any intimation that any of the owners of the land
'had ever attempted to dispose of any part of it as building
lots. As a residential site, therefore, its value was decidedly
problematical. Possibly, in the next dozen years a few
houses might have been built upon the land, but, judging
by the past record, its development along this line would
have been extremely slow.
As a railroad station site, the record gives no indication
that it is the sole possible location for that purpose in
Lucena. It is not shown that its location for that purpose is
at all superior to other possible locations. Indeed, it seems
that the railroad company at first selected another site f or
its station on the other side of town, Hence, possessing no
exclusive natural advantages for this purpose, it is a
foregone conclusion that the railroad company would not

willingly pay P81,000 for such a site when it could have
purchased another site for, say, P1,500.
Here it seems proper to say that the appearance of the
railroad in the town of Lucena was the occasion for an
incipient real estate boom in the vicinity of the provincial
building and the high school. Several of the witnesses for
318

the defendants testified what they would offer, if they were

in the market for land in the vicinity of the station site, and
the witness Alzona, the single witness who testified for the
plaintiff, testified that some owners of land near the
provincial building were asking between P500 and P700 for
lots of 400 square meters. It is clear that these hypothetical
purchases and sales do not offer any reliable basis upon
which to calculate the actual market value of the land. The
fond dreams of the owners of a sudden shift of the business
center of the town of Lucena to their vicinity, or of its
becoming a choice residential district, are not capital in
hand.
"Proof must be limited to showing the present condition
of the property and the uses to which it is naturally
adapted. It is not competent for the owner to show to what
use he intended to put the property, nor what plans he had
for its improvement, nor the probable future use of the
property. Nothing can be allowed for damages to an
intended use." (Lewis on Eminent Domain, 2d ed., sec.
709.)
From the evidence we have discussed above, it is
apparent that a good price for rice land in the vicinity of
Lucena is P500 per hectare. With this as a basis, at what
would the prospective buyer estimate the possibility of the
land being used as a residential site sometime in the future
and its possible advantages as a railroad site? Certainly at
nothing like the estimates contained in the report of the
commissioners. To secure an adequate return on such a
large investment as P80,000, every meter of the land would
have to be put to immediate use as residential sites,
supposing that people could be induced to buy it for that
purpose at such figures or to pay the necessarily large rent
therefor based on such a valuation. And to hold out for such
a figure in case a railroad company wanted the land as a
depot site would mean that the company would locate its
depot at some other place. It seems to us that, either as a

residential site or as a railroad station site, its value should
be principally regulated by the value of other agricultural
land on the outskirts of the town. In other words,
319
VOL. 32, NOVEMBER 23, 1915. 319

the chance that it would be wanted for either of these

purposes owing to its superior location was but slightly
greater than that of other agricultural land adjacent to the
town. We are, therefore, led to the conclusion that the price
at which practically half of the condemned land was sold by
Romana Velasquez to the defendant, Filemon Perez, is a
most liberal estimate of its value. We refer to her sale of
the parcel of 16,094 square meters .for P6,500. This parcel
comprises practically one-half of the entire station site and
no outside land was included In the transaction. The sale
was made after it became known that the land sold was to
be part of the station site, and a statement to this effect
was included in the deed. Both parties being aware that
the land was to be condemned by the plaintiff company, it
cannot be said that they were not aware of all the latent
utility of the land. For these reasons, the price which this
parcel brought should serve as an excellent criterion of the
value of the entire station site. And while no explanation is
given of why the sale occurred, since, of course, no one
would buy it with the expectation of using it himself when
he knew that it would shortly be occupied by the railroad
company, still there is not sufficient indication that it was
sold for speculative purposes or that the element of
speculation entered into the transaction to enable us to say
that the price was inflated and exceeded the actual market
value of the condemned land as agricultural land to be
worth P500 per hectare, and leaves a little more than
P3,500 for its potential value as a residential district and
as a railroad station site. This is, furthermore,
approximately 400 per cent higher than Sra. Velasquez'
second sale (some four months later) to Simeon Perez,
when she sold about 23,000 square meters in the same
neighborhood for a little over P1,000 per hectare.
It is to be f urther noted that the average assessed
valuation of the condemned property is somewhat less than
P0.08 per square meter, while the highest assessed
valuation of any of it is only P0.23 per square meter, which
is carried by some 5,973 square meters, or less than one-

sixth of the
320

whole. It is also to be noted that these 5,978 square meters

were appraised by the commissioners as being worth
exactly what the 16,094 square meters were worth, the
latter being assessed for taxation purposes at only P0.03
per square meter.
At the price we have fixed, we are of the opinion that
any consequential damages which may have been
occasioned to any of the defendants by the condemnation
proceedings is amply cared for.
The defendant, Simeon Perez, was awarded P600
damages by the commissioners for being compelled to
remove a building in course of construction at the time the
expropriation proceedings were started. This building was
designed to serve partly as a warehouse and partly f or
stores. He commenced its construction about the middle of
December, 1912, after it became known that the plaintiff
company wanted the land for a railroad station.
Construction work was ordered stopped by the court. From
the vague description of this order in the record, we
presume it was the order of the court of date of January 22,
1913, placing the plaintiff in possession of the land under
the provisions of Act No. 1258 as amended by Act No. 1592.
Until such action was taken by the railroad company, or
until the commissioners were appointed and had appraised
the land, we know of no legal provision which would
prohibit the owner from doing with the land what he
pleased. The Act in question gives to the company "the
right to enter immediately upon the possession of the land
involved." (Sec. 3.) This amendment to Act No. 1258 was
enacted especially for the benefit of railroad companies,
and affords f ull protection to them if they act with due
diligence. Until some such positive assertion of its desire to
expropriate the land, no reason is seen why the company
might not ask for a dismissal of the proceedings in
accordance with section 127 of the Code of Civil Procedure.
The right of the owner to the enjoyment of his property
ought not to be made to depend so entirely upon the whims
of a third party. No
321
VOL. 32, NOVEMBER 24, 1915. 321

United States vs. Evangelista and Bandillo.
attempt was made to meet the statement of Perez that he

had expended a large sum of money on the construction of
the building. The commissioners probably saw the
structure or some of the materials which entered into it
and are in a much better position to judge of the amount
expended upon the work than are we. They have fixed that
amount at P600. In the absence of positive evidence in the
record showing this finding to be grossly excessive, we
must accept it as correct.
For the foregoing reasons, the judgment of the court
below is modified by reducing the award for the parcel
containing 16,094 square meters to the sum of P6,500. The
damages f or the remaining parcels will be fixed at the
same proportionate amount. As thus modified the
judgment appealed from is affirmed. No costs will be
allowed on this appeal. The amount as herein fixed,
together with interest, will be deposited with the clerk of
the Court of First Instance of Tayabas, subject to the rights
of the defendants and the Tayabas Land Company. So
ordered.
Arellano, C. J., Torres, Carson, and Araullo, JJ.,

concur.
Judgment modified.
__________
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5/28/2019 PHILIPPINE REPORTS ANNOTATED VOLUME 032

[No. 10278. November 23, 1915.]

THE MANILA RAILROAD COMPANY, plaintiff and

1. EMINENT DOMAIN; VIEW BY THE COMMISSIONERS;

VOL. 32, NOVEMBER 23, 1915. 287

Manila Railroad Co. vs. Velasquez.

2. ID.; COMPENSATION; ESTIMATE OF VALUE

3. ID.; ID.; REPORT OF COMMISSIONERS; POWER OF

them; or that they have disregarded a clear preponderance

4. ID.; ID.; ID.; ID.—Adjudicated cases of this Supreme

5. ID.; ID.; EVIDENCE OF SALES OF NEARBY LAND;

6. ID,; JUST COMPENSATION.—"Compensation" means an

7. ID.; ID.; MARKET VALUE.—The market value of the

288 PHILIPPINE REPORTS ANNOTATED

Manila Railroad Co. vs. Velasquez.

district, when its history over a period of years shows that

8. ID.; IMPROVEMENTS UNDERTAKEN WITH

APPEAL from a judgment of the Court of First Instance of

This action was instituted by the Manila Railroad

VOL. 32, NOVEMBER 23, 1915. 289

is grossly excessive, pointing out that the land has never

"Action of Court Upon Commissioners' Report.—Upon the filing of

From this section it clearly appears that the report of the

290 PHILIPPINE REPORTS ANNOTATED

report aside and appoint new commissioners; or it may

VOL. 32, NOVEMBER 23, 1915. 291

correct the commissioners' report in any manner deemed

exceptions in the same way as any other "action." Section

292 PHILIPPINE REPORTS ANNOTATED

the evidence taken by the commisioners and the lower

at P27,415.92. The Court of First Instance, after taking

"Conceding, without deciding, that he also had the right to

In Manila Railroad Co. vs. Attorney-General (22 Phil. Rep.,

VOL. 32, NOVEMBER 23, 1915. 293

mission allowed P19,478, which amount was reduced by

greater than those allowed, either by the commissioners or

294 PHILIPPINE REPORTS ANNOTATED

to demand a new trial based on its unsupported allegations

commissioners as to the value of the young orange trees on

"Under the evidence in this case the award is excessive. Section

We will now examine the case (Philippine Railway Co. vs.

VOL. 32, NOVEMBER 23, 1915. 295

together with a house standing thereon and other property

"Nor do we decide whether, in a case where the damages

296 PHILIPPINE REPORTS ANNOTATED

missioners was well within the amounts fixed by the

was a just compensation for the land taken and rendered

"After a careful examination of the entire record in this case and

VOL. 32, NOVEMBER 23, 1915. 297

(51 La. Ann., 1338), the court, in considering a procedural

value, with due allowance for under assessment, and the

298 PHILIPPINE REPORTS ANNOTATED

in consequence of proposed improvements, the cash value

in this respect the court will be obliged to exercise its

VOL, 32, NOVEMBER 23, 1915. 299

would be to "recommit the report of the commissioners for

the things they are specially instructed to do is to view or

300 PHILIPPINE REPORTS ANNOTATED

by the view of the premises are not in the record, whether