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GARCIA V.

COURT OF APPEALs

FACTS: A lot had been registered and sold to SPS. LUISITO & MA. LUISA MAGPAYO by
Luisa’s father Atty. Pedro Garcia along with the consent on his wife, Remedio Garcia.
Subsequently, said spouses entered the aforementioned lot into mortgage by Philippine Bank
of Communications (PBCom) to secure a loan.

Consequently, spouses had failed to pay the loan upon its maturity and PBCom ordered the
mortgaged lot to be extrajudicially foreclosed and entered into auction where they were the
highest bidders.

Later on, the lot was issued under PBCom. PBCom then filed for a writ of possession against
Jose Garcia, Luisa Magpayo’s brother, who was currently in possession of the land. Jose
assailed that he was the true owner of the land as he inherited it from his mother Remedio
Garcia and he then filed for a suit for realty and damages.

PBCom, however, averred that the land was not among those listed in Remedio’s Intestate of
Estate and was therefore not inherited by Jose. The lower court ruled in favor of Jose and
declared the subsequent mortgage of the lot null and void.

However, the decision was reversed by the Court of Appeals asserting that at the time of the
transfer and registration of the land to Magpayo, Remedio Garcia and Pedro Garcia were the
true owners and could therefore enjoy the right to dispose of such.

Though Jose Garcia was in possession of the land time after that is of no hindrance to the
ownership truly belonging to the Magpayo’s who then later on enjoyed their right to mortgage
said land.

ISSUE: Whether or not The Court of Appeals erred in resolving the issues of “ownership” and
“possession”.

RULING: No. The Supreme Court held that where there is no taking of property for purposes
of neither eminent domain nor condemnation proceedings instituted, the basis for
determination of just compensation is the time when the trial court made its order of
expropriation; Factors to be considered in estimating market value of property for purposes of
compensation.

By virtue of the special and peculiar circumstances of the case at bar, there being no taking of
the property in question for purposes of eminent domain nor condemnation proceedings
instituted over the same to speak of, the time as of which the market value should be fixed is
the time when the trial court made its order of expropriation.

It is the date of appropriation or the investing date which as everyone knows required more
than a day, sometimes weeks to carry through as would an ordinary real estate purchase and
sale. Hence, in estimating the market 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 the time and the use to which it is then applied by the owner.

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. 

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