Commissioner of Public Highways vs Hon. Burgos G.R. No. L-36706 March 31, 1980 De Castro, J.

: FACTS: Plaintiff Victoria Amigable was the owner of a parcel of land in Cebu City with an area of 6,167 square meters taken by the Government in 1924 for road-right of way purpose. She filed a complaint in 1959 for the recovery of the said lot to the CFI Cebu to which it rendered favorable decision to the adverse party, the Commissioner of Public Highways. The plaintiff then appealed this decision to the Supreme Court which reversed the lower courts ruling. The Supreme Court also directed that the determination of the just compensation of the plaintiff for the said lots should be based on the price or value thereof at the time of taking. Respondent court in the capacity of Hon. Burgos then rendered judgment on 1973 directing the Republic of the Philippines to pay Amigable a total of P214,356.75 based on the dollar current dollar exchange rate causing the Solicitor General to file a petition for review on certiorari. ISSUE: WON the provision of Article 1250 of the New Civil Code regarding extra-ordinary inflation applicable in determining the just compensation of Amigable. HELD:

No. Article 1250 provides that, In case extra-ordinary inflation or deflation of the currency
stipulated should supervene, the value of the currency at the time of the establishment of the obligation shall be the basis of payment, unless there is an agreement to the contrary. The Court held that based on the import of the law, it is clear that the said provision applies only to cases where a contract or agreement is involved. It does not apply where the obligation to pay arises from law, independent of contract. The taking of private property by the Government in the exercise of its power of eminent domain does not give rise to a contractual obligation. This was expressed in the case of Velasco vs. Manila Electric Co. Moreover, the law clearly provides that the value of the currency at the time of the establishment of the obligation shall be the basis of payment which, in cases of expropriation, would be the value of the peso at the time of the taking of the property when the obligation of the Government to pay arises.