This is a Petition for Review on
Certiorari[1] of the Decision
[2] dated June 28, 2018 and the Resolution
[3] dated March 5, 2019 of
the Court of Appeals (CA) in CA-G.R. CV No. 103874. The CA affirmed
with modification only as to the payment of legal interest the
Decision
[4] dated
September 18, 2014 of Branch 172, Regional Trial Court (RTC), Valenzuela
City in Civil Case No.
248-V-07.
The
Antecedents
On December 7,
2007, the Republic of the Philippines (petitioner) filed a verified
Complaint
[5] for
the expropriation of portions of the three parcels of land (subject
properties) located at
Brgy. Ugong, Valenzuela City
allegedly owned by spouses Luis J. Dela Cruz (Luis) and Imelda Reyes
(Imelda) (collectively, Spouses Dela Cruz). The subject properties were
described as follows:
[6] TCT No. | Area
(sq.m.) | Area Affected (sq.m.) | Zonal Value Per
sq.m. | Total Zonal
Value |
V-70921 (now
V-94768) | 92 | 23 | P2,750.00 | P63,250.00 |
V-68375 (now
V-97473) | 137 | 68 | P2,750.00 | P187,000.00 |
V-68373 (now
V-947772) | 58 | 9 | P2,750.00 | P24,750.00[7] |
Petitioner
alleged in the complaint the purpose of the expropriation, to
wit:
Pursuant to Sec. 7 of E.O. 1035, the
DPWH is implementing the construction of C-5 Northern Link Road Project,
Segment 8.1 from Mindanao Avenue in Quezon City to the Northern Luzon
Expressway, Valenzuela City, to provide faster and comfortable travel to
the motoring public going to, or coming from. Northern Luzon, thru
Metro Manila.[8]
Petitioner
manifested its willingness to pay the amount of P495,200.07 as just
compensation for the affected areas based on the zonal value of the
subject lots at P2,750.00 per square meter, as certified by the Bureau
of Internal Revenue (BIR).
[9]In their Answer,
[10] Spouses Dela Cruz
admitted ownership of the subject properties to be expropriated and
manifested support for the C-5 subject properties to be expropriated and
manifested support for the C-5 Northern Link Road Project. However,
while they conceded in the BIR's setting of the zonal value of the
subject properties, they prayed that petitioner should pay them the fair
market value instead of the zonal value considering that the subject
properties "
are already situated in the industrial site apart
from the fact that some nearby lots have been devoted to good business
ventures such as construction of warehouses."
[11]Spouses Dela Cruz further
alleged that the prevailing market value of similar properties within
the same location ranges from P8,000.00 to P10,000.00 per square
meter.
[12] Thus,
they reserved their right to recover the fair market value of the
subject properties before duly appointed commissioners pursuant to Rule
67 of the Rules of Court.
[13]On November 12, 2008, absent
any objection to petitioner's right of eminent domain, the RTC issued
the order of expropriation and writ of possession.
[14]The deposit of
P495,200.07 and transfer of possession of the subject properties were
successfully made.
[15]After ordering the
expropriation of the subject properties, the RTC proceeded to the second
stage of an action for expropriation,
i.e., the
determination of just compensation for the property sought to be taken.
It then constituted a Board of Commissioners (BOC) for that
purpose.
[16]In the meantime, Spouses
Dela Cruz were substituted by their heirs (respondents) as parties to
the case after the deaths of Imelda and Luis on July 10, 2005 and July
19, 2007, respectively.
[17]On February 21, 2014, the
BOC opined that the estimated value of the land was P15,000.00 per
square meter.
[18]
It explained that it could no longer conduct an ocular inspection of the
C-5 Northern Link Road Expressway, Valenzuela City because the project
already commenced; thus it used other bases for appraising the subject
properties.
[19]
The BOC explained:
Since we are no longer
conducted [sic] an ocular inspection, we have
considered the physical, functional and external value influences of the
neighborhood, and have noted and considered an approach of value and
analysis, taking into accounts [sic] the public use
and the value of allowable damages or enhancements to any remaining
property for determination of just compensation, if any. Also, taking
into account other properties previously subject of expropriation within
the immediate vicinity, which can be used as a precedent for this
particular case.[20]
The BOC further
explained that in determining just compensation, it took into
consideration the "sales comparison and cost approach" which is founded
on the principle of substitution where the value of a property is
indicative of the value of other similar properties.
[21] The BOC then based
its appraisal on the following factors: (a) the highest and best use of
the property in relation to the prevailing usage of the neighborhood and
immediate use at the time of taking,
i.e., mixed
residential and industrial; (b) the BIR zonal valuation,
i.e., P2,750.00 per square meter; (c) consequential
benefits which the owner may derive from the remainder of the
expropriated property; and (d) the analysis made in the Hobart case
under Civil Case No. 15-V-08-an expropriation case involving properties
within the same vicinity which was previously settled with finality and
which was determined as the one most similar to the instant case because
they involve properties near each other.
[22]After the parties filed
their respective Comments,
[23] the RTC rendered a
Decision.
RTC
Ruling
In the
Decision
[24] dated
September 18, 2014, the RTC ordered petitioner to pay Spouses Dela Cruz
just compensation fixed at P9,000.00 per square meter, less the
provisional deposit the petitioner previously made. The RTC also awarded
in favor of Spouses Dela Cruz interest on the unpaid balance of just
compensation at the rate of 12%
per annum from the
time of filing of the complaint until fully paid by petitioner.
[25]The dispositive portion of
the Decision provides:
WHEREFORE, Judgment is
hereby rendered condemning the following lots of the
defendants:TCT
NO. | AREA AFFECTED (SQ.M.) | |
V-70921 (now
V-94768) | 23 | |
V-68375 (now
V-97473) | (undecipherable)
| |
V-68373 (now
V-947772) | 9 | |
all
located at Barangay Ugong, Valenzuela City, free from all liens and
encumbrances whatsoever, for the construction of C-5 Northern Link Road
Project Segment 8.1 from Mindanao Avenue in Quezon City to the North
Luzon Expressway, Valenzuela City, a public purpose, in favor of the
plaintiff, Republic of the Philippines, upon payment of just
compensation which is fixed at Php9,000.00/square meter or in the total
amount of Php9,000.00 (sic) (NINE HUNDRED THOUSAND
PESOS) (100 sq. m. x Php9,000.00) deducting the provisional deposit of
P275,000.00 previously made and subject to the payment of all unpaid
taxes and other relevant taxes by the defendants up to the filing of the
complaint, if there be any.
The plaintiff is ordered
to pay interest at the rate of 12% per annum on the unpaid balance of
just compensation of Php625,000.00 (SIX HUNDRED TWENTY-FIVE THOUSAND)
(Php900,000.00-Php275,000.00) computed from the time of the filing of
the complaint until plaintiff fully pays the
balance.
No additional amount for the improvement of
lot covered by TCT No. 68373 is awarded as the court considers the
amount of Php220,200.07 already paid by plaintiff to the defendants as
enough just compensation for the improvement.
Let a
certified true copy of this decision be forwarded to the Office of the
Register of Deeds of Valenzuela City for the latter to annotate this
decision in the Transfer Certificate of Title Nos. V-70921 (now
V-94768); V-68375 (now V-97473); and V-68373 (now V-947772) of the
Registry of Deeds of Valenzuela City.
SO
ORDERED.[26]
Aggrieved,
petitioner, through the Office of the Solicitor General (OSG), appealed
the RTC Decision to the CA.
[27]CA
Ruling
In the
Decision
[28] dated
June 28, 2018, the CA denied the appeal and affirmed the ruling of the
RTC with modification only as to the payment of interest.
[29]The CA first noted that the
directive of the RTC for the government to deposit the amount equivalent
to the zonal value of the subject properties and the value of the
improvements therein before the Acting Branch Clerk of Court runs
counter to Republic Act No. (RA) 8974.
[30] It explained that the Court, looking into the
Senate deliberations, construed that the intent of RA 8974 was to
supersede the system of deposit under Rule 67 of the Rules of Court with
the scheme of immediate payment in cases involving national government
infrastructure projects.
[31]As to the determination of
just compensation, the CA ruled that the RTC validly lowered the BOC's
recommended market value of P15,000.00 to P9,000.00.
[32]The CA refused to set the
just compensation at P2,750.00 per square meter. It explained that zonal
value could not be the lone basis for the determination of just
compensation as it is only one of the factors which should be considered
in computing just compensation under RA 8974.
[33]The CA further
ruled that courts are not strictly bound to mechanically follow each of
the standards in Section 5 of RA 8974 as the factors have been held to
be recommendatory in nature. Nevertheless, contrary to the OSG's claim,
the RTC referred to several factors enumerated in RA 8974 for the
assessment of the value of the land subject of expropriation
proceedings. The CA specifically explained that based on the records,
the RTC used the following relevant factors: (a) the BIR zonal
valuation; (b) the value declared by Spouses Dela Cruz, as owners, in
their Answer before the RTC; (c) the recommended value of the BOC which
was ultimately based on the value of the Hobart property which is a land
in the same general vicinity also expropriated for the similar purpose;
and (d) evidence describing the location, shape, and classification of
the subject properties. The CA further explained that while the RTC did
not assign values based on the location, shape, and classification of
the subject properties, the factors were nonetheless considered by both
the BIR zonal value and the BOC recommended value.
[34]In affirming the
RTC's determination of just compensation of P9,000.00 per square meter,
the CA emphasized the rule under Section 4, Rule 67 of the Rules of
Court that just compensation should be based on the value of the
property at the time of taking or filing of the complaint, whichever
came first. As in the case, the CA found that both the zonal and the
recommended values were pegged at, or near the time of the filing of the
complaint for expropriation in 2007 which preceded the taking of the
subject properties in 2008. The CA then considered the following: (1)
the zonal value of P2,750.00 per square meter which was based on the
schedule of zonal values issued by the Department of Finance in Order
No. 22-2003 that was certified by the BIR as applicable for the year
2007; and (2) the BOC recommended value of P15,000.00 per square meter
based on the Hobart case that was decided wit finality in 2010. Applying
by analogy the mode of computation by the Court in
Evergreen
Manufacturing Corp. v. Rep. of the Phils.[35] (
Evergreen),
the CA ruled that the mean of the zonal value and the BOC recommended
value will qualify as a full and fair equivalent of the subject
properties. The CA then determined the mean of the two values at
P8,875.00, which is approximately the same value determined by the RTC
and within the range of the owner's declared value at P8,000.00 to
P10,000.00.
[36]Thus, the CA found
petitioner liable to pay respondents the remaining balance of
P625,000.00 as just compensation which shall earn interest at: (1) 12%
per annum from the time of filing of the complaint
until June 30, 2013; and(2) 6%
per annum from July 1,
2013 until full payment of the remaining balance, in accordance with
Bangko Sentral ng Pilipinas (BSP) Circular No. 799.
[37]The dispositive
portion of the Decision provides:
WHEREFORE,
premises considered, the appeal of plaintiff-appellant Republic of the
Philippines is DENIED.
The Decision dated September
18, 2014 of the Regional Trial Court of Valenzuela City, Branch 172,
National Capital Judicial Region in Civil Case No. 248-V-07 is AFFIRMED
with MODIFICATION on the payment of
interest.
Plaintiff-Appellant Republic of the
Philippines is ordered to pay interest at the rate of: (1) twelve
per centum (12%) per annum on the
unpaid balance of Six Hundred Twenty Five Thousand Pesos (P625,000.00)
from the date of filing of the instant complaint until June 30, 2013;
and (2) six per centum (6%) per
annum from July 1, 2013 until full payment of said unpaid
balance.
SO ORDERED.[38]
Petitioner filed a
Motion for Reconsideration,
[39] but the CA denied it in its Resolution dated
March 5, 2019.
[40]
The CA ruled: (1) that the conduct of an ocular inspection is not
mandatory before the BOC can make a recommendation as it is merely a
factor to guide the commissioners in arriving at a just value for the
expropriated property; (2) that the OSG is correct in stating that the
BOC should not use the valuation awarded in previous expropriation cases
considering the valuation awarded in previous expropnat1on cases
considering the differences in the nature and condition of the
properties involved; thus the RTC, for that reason, precisely reduced
the BOC's recommended value, being well aware that there are other
factors which affect the proper valuation of the expropriated properties
other than the value of similarly situated properties; (3) that the
alleged presence of informal settlers near or within the vicinity of the
subject properties could not have reduced the RTC's determination of
just compensation,
i.e., P9,000.00 because of the
fact that the area was also devoted to commercial and industrial uses;
and (4) that zonal value cannot be the sole basis in determining just
compensation, but the RTC nevertheless considered zonal value as one of
the factors in determining the fair and full equivalent of the subject
properties.
[41]Hence, this Petition for
Review on
Certiorari.
The
Petition
Petitioner argues
that: (1) the CA erred in affirming the RTCs determination of the just
compensation award at P9,000.00 per square meter as it is excessive; (2)
the CA Decision is not supported by applicable laws and jurisprudence;
and (3) the CA Decision is contrary to the evidence presented.
[42]Specifically, petitioner
asserts that the CA accorded respect to the RTC Decision without due
ascertainment of the requirements set forth under Section 5 of RA 8974.
It maintains that the BIR zonal valuation is reflective of the fair
market value of real properties within a given area; thus, given the
significant process of arriving at the values indicated in the BIR Zonal
valuation, it should not be taken lightly and it would be highly
suspicious if the recommended just compensation is more than double the
BIR valuation.
[43]Petitioner further argues
that the RTC did not take into consideration its evidence showing the
actual use of the subject properties as undisputably residential and the
classification, size, area, and condition of the subject property; that
the BOC did not conduct an ocular inspection of the subject properties,
thereby gravely limiting their knowledge on the actual use,
classification, size, area, and condition of the subject property; and
on the contrary, it was able to present witnesses who were able to
accurately testify as to the actual condition of the properties,
i.e., the depressed and substandard state of the area
which was near or within the vicinity of the areas with colonies of
informal settler families.
[44]Petitioner furthermore
maintains that the RTC purportedly erred in relying on the
recommendation of the BOC considering that the latter's valuation took
into consideration as one of its factors the value of the properties
involved in the other expropriation cases; and that the value of the
other properties may have appreciated through the years instead of its
character and price at the time of taking.
[45]In their Comment to the
Petition,
[46]
respondents argue that the CA duly considered the factors enumerated in
Section 5 of RA 8974 in determining the just compensation for the
subject properties;
[47] that petitioner failed to present evidence that
the subject properties are found in the location where the informal
settlers are located;
[48] and that the appraisal of respondents'
expropriated lots is not limited to the zonal value by the BIR, but also
on the location, accessibility, selling prices of comparable
properties, the amenities present, and other factors which were duly
considered by the BOC and the RTC.
[49] However, they pray that because the petition is
intended for delay, the just compensation for the subject properties
should be valued at P15,000.00 per square meter.
[50]Petitioner then
manifested that it will no longer file a Reply as it had already
exhaustively discussed all issues and arguments in support of its
position.
[51]The
Issue
The main issue to be
resolved in this case is whether the CA erred in affirming the just
compensation award of the RTC at P9,000.00 per square
meter.
The Court's
Ruling
No modification of judgment can be granted
to respondents who did not appeal the RTC Decision as affirmed by the
CA. | |
At
the outset, the Court cannot entertain respondents' contention and
prayer in their Comment that the payment of just compensation should be
increased from P9,000.00 to P15,000.00. This is consistent with the well
settled procedural rule that no modification of judgment can be granted
to a party who did not appeal.
[52] Without a doubt, respondents are seeking a
modification not only of the CA Decision, but also of the RTC Decision
without filing the proper appeal.
The Court explained
in
Yano v. Sanchez:
[53]The
entrenched procedural rule in this jurisdiction is that a party who did
not appeal cannot assign such errors as are designed to have the
judgment modified. All that said appellee can do is to make a
counter-assignment of errors or to argue on issues raised at the trial
only for the purpose of sustaining the judgment in his favor, even on
grounds not included in the decision of the court a quo or raised in the
appellant's assignment of errors or
arguments.
This tenet is enshrined as one
of the basic principles in our rules of procedure, specifically to avoid
ambiguity in the presentation of issues, facilitate the setting forth
of arguments by the parties, and aid the court in making its
determinations. A party who fails to acquire complete relief
from a decision of the court has various remedies to correct an omission
by the court. He may move for a correction or clarification of
judgment, or even seek its modification through ordinary
appeal. There is thus no basis for the Court to skip the rule
and excuse herein respondents for failure to properly avail themselves
of the remedies in the face of the parties' contentions that have
remained disputed.[54] (Italics
supplied.)
Admittedly, the rule is subject
to exceptions. However, the established exceptions to this rule such as
"(1) errors affecting the lower court's jurisdiction over the subject
matter, (2) plain errors not specified, and (3) clerical errors" are not
present in the case.
[55]Thus, in the absence of any
of the exceptions which would warrant a relaxation of the rule, the
Court cannot address respondent's prayer to increase the valuation of
the subject properties to P15,000.00 per square
meter.
The Court now resolves the petition.
The Court affirms
the award of just compensation for the taking of the subject properties
valued at P9,000.00 per square
meter. | |
The
well settled rule is that only questions of law should be raised in a
petition for review on
certiorari under Rule 45 of
the Rules of Court.
[56] The Court is not a trier of facts and it is not
the Court's function to examine, review, or evaluate evidence all over
again.
[57] Thus,
as in expropriation cases, the Court may not delve into factual issues
pertaining to the value of the property expropriated.
[58] Further, the factual
findings of the trial court, when affirmed by the CA, are final and
conclusive and cannot be reviewed by the Court.
[59]While the Court
has recognized exceptions
[60] to this rule, the Court finds none which would
warrant the Court's deviation from the findings of fact of the RTC and
the CA.
The Court finds that the only legal issues
presented by petitioner are: (1) whether the RTC's determination of just
compensation is in accordance with Section 5 of RA 8974; and (2)
whether the RTC should have given weight to the BIR zonal value in
determining just compensation.
[61]The Court has defined just
compensation in this wise:
Constitutionally,
"just compensation" is the sum equivalent to the market value of the
property, broadly described as the price fixed by the seller in open
market in the usual and ordinary course of legal action and competition,
or the fair value of the property as between the one who receives and
the one who desires to sell, it being fixed at the time of the actual
taking by the government. Just compensation is defined as the full and
fair equivalent of the property taken from its owner by the propriator.
It has been repeatedly stressed by this Court that the true measure is
not the taker's gain but the owner's loss. The word "just" is used to
modify the meaning of the word "compensation" to convey the idea that
the equivalent to be given for the property to be taken shall be real,
substantial, full and ample.[62] (Emphasis
omitted.)
Section 5 of RA 8974 provides for
the standards that may be considered by the courts in determining just
compensation,
viz.:
SECTION 5.
Standards for the Assessment of the Value of the Land Subject
of Expropriation Proceedings or Negotiated Sale. - In order to
facilitate the determination of just compensation, the court may
consider, among other well-established factors, the following relevant
standards:
(a) | The classification and use for
which the property is suited; |
|
|
(b) | The developmental costs for improving the
land; |
|
|
(c) | The value declared by the
owners; |
|
|
(d) | The current selling price of similar lands in the
vicinity; |
|
|
(e) | The reasonable disturbance compensation for the
removal and/or demolition of certain improvement on the land and for the
value of improvements thereon; |
|
|
(f) | This size, shape or location, tax declaration and
zonal valuation of the land; |
|
|
(g) | The price of the land as manifested in the ocular
findings, oral as well as documentary evidence presented;
and |
|
|
(h) | Such facts and events as to enable the affected
property owners to have sufficient funds to acquire similarly situated
lands of approximate areas as those required from them by the government
and thereby rehabilitate themselves as early as
possible.
|
It
must be emphasized however that the determination of just compensation
in eminent domain cases is a judicial function. As such, legislative
enactments, as well as executive issuances, which fix or provide for the
method of computing just compensation are tantamount to impermissible
encroachment on judicial prerogatives.
[63] Hence, any valuation for just compensation
provided in statutes may serve only as a guiding principle but may not
supplant the court's own determination as to the amount that should be
awarded and how to arrive at such amount.
[64]Consistent with the
aforesaid principle, the CA aptly discussed that the courts are not
strictly bound to mechanically follow each of the standards enumerated
in Section 5 of RA 8974 as the factors have been held to be merely
recommendatory in nature.
[65]Specifically, in
Rep. of the Phils. v. Heirs of Sps. Pedro Bautista and
Valentina Malabanan,
[66] the Court ruled that the courts are not bound
to consider the standards under Section 5 of RA 8974 considering the
exact wording of the provision,
i.e., "in order to
facilitate the determination of just compensation, the courts may
consider" them. The Court explained that the use of the word "may" in
the provision is construed as permissive and operating to confer
discretion.
[67]Nevertheless, contrary to
petitioner's assertion, and as aptly observed by the CA, the RTC
considered the factors enumerated in Section 5 of RA 8974 in arriving at
the just compensation to be paid to respondents. Notably, the RTC,
while giving weight to the findings of the BOC, adjusted the latter's
recommended valuation and lowered the amount from P15,000.00 per square
meter to P9,000.00 per square meter.
The RTC's
consideration of the factors in Section 5 of RA 8974 is evident in its
Decision dated September 18, 2014,
thus:
There is no dispute that the subject
lots were classified as residential by the Bureau of Internal Revenue
(BIR). The lots are located at Barangay Ugong, Valenzuela City. All the
lots are irregular in shape. They are however, located in high intensity
commercial zone. The place where the lots are located has amenities
like water, electricity, transportation and communication. Per BIR zonal
valuation, the lots have a zonal valuation of Php2,750.00 per square
meter.
The subject property is 442.14 meters more or
less away from the property (residential) of Hobart Realty Development
Corporation, which was expropriated by the plaintiff and in which the
just compensation was pegged by this court in the amount of
Php15.000.00/sq.m. The Hobart property is located near Mindanao Avenue,
Quezon City. The expropriation case involving Hobart Realty Development
Corporation had long become final and executory. The property subject of
expropriation is considered within high intensity commercial zone as it
is located near the industrial and commercial zone in Valenzuela City
were several business establishments and warehouses had increased
considerably by virtue of its proximity to C-5 Road, North Luzon
Expressway and Mindanao Ave., Quezon City.
Plaintiff
tried to lower the value of the subject property by claiming that the
subject property is near or within the vicinity of the areas with
colonies of informal settlers, which were relocated. Plaintiff, however,
failed to prove that the properties of the defendants were occupied by
squatters or near the vicinity occupied by the alleged
squatters.
x x x x
Taking the
average [of] the BIR zonal valuation recommended as appearing in the
complaint of P2,750.00 per square meter, the value declared by the
defendants in their answer in the amount between
Php8,000.00-Php10,000.00 per square meter, the recommendation of the
Board of Commissioners and this court's observations on the location,
the shape, the classification of the lots, the Court rules that the just
compensation for the defendants' lots sought to be taken in this case
is fixed at Php9,000.00 per square meter.
The
construction of C-5 Northern Link Road Project, Segment 8.1 from
Mindanao Avenue in Quezon City to the North Luzon Expressway, Valenzuela
City could not be said to have benefited the defendants for it is
common knowledge that expressways are being fenced, so that inhabitants
could not just cross over the highway to go to the other side or to
utilize the said highway as pedestrian, as the highway was made
precisely for the motoring public who has to pass through the toll
gates. In short, defendants were actually isolated because of the fence
made on the sides of the highways.[68] (citations
omitted)
Evidently, in pegging the just
compensation that should be awarded to respondents at P9,000.00 per
square meter, the RTC considered the following factors: (a) the BIR
zonal valuation; (b) the value declared by Spouses Dela Cruz, as owners,
in their Answer before the trial court; (c) the recommended value of
the BOC which was ultimately based on the value of the Hobart property, a
land in the same general vicinity also expropriated for the similar
purpose;
[69] and
(d) evidence describing the location, shape, and classification of the
subject properties. Specifically, the RTC noted that the subject
properties were irregular in shape and were classified as residential,
but were located in a high-intensity commercial zone.
[70]As
to the absence of an ocular inspection, there is nothing anomalous in
the process by which the BOC and subsequently, the RTC adjusted the
BOC's recommendation and arrived at the full and fair equivalent of the
subject properties. Ocular inspection is only one of the means in the
ascertainment of just compensation. The BOC and the courts are not
precluded from relying on other evidence to arrive at a full and fair
value of the property subject of expropriation
proceedings.
Further, it must be emphasized that RA
8974, in relation to Rule 67 of the Rules of Court, creates a possible
scenario wherein the government has already taken possession of the
property
and commenced works on it even before the
commissioners were appointed and allowed to conduct an ocular inspection
of the property sought to be taken. Specifically, under Section
4
[71] of RA 8974,
the court shall issue to the implementing agency of the government an
order to take possession of the property and start the implementation of
the project upon the filing of the complaint with due notice to the
defendant and payment of 100% of the value of the property based on the
current relevant BIR zonal valuation. At this stage, the government may
already commence works on the property even if there is yet no
appointment of commissioners under Section 5, Rule 67 of the Rules of
Court.
Here, as explained by the BOC, they had no
opportunity to inspect the subject properties considering that at the
time of the appointment of the commissioners, the C-5 Northern Link Road
Project, Segment 8.1 from Mindanao Avenue in Quezon City to the North
Luzon Expressway Valenzuela City Project had already commenced. Thus, as
already discussed, the BOC and thereafter, the RTC, considered other
factors in determining the full and fair equivalent of the subject
properties.
On the other hand, the issue of whether
the subject properties are near, or within the vicinity of the areas
occupied by informal settlers is factual in nature. Notably, petitioner
explained that it presented evidence as to the actual condition of the
subject properties and that it presented Ms. Fe Pesebere and Ms. Zenaida
Galvez, both of the National Housing Authority (NHA) to prove that: (1)
based on the NHA's census and tagging operations from November 2006 to
January 2007, informal settlers were found in
scattered
areas of Brgy. Ugong and in concentrated areas in Brgy. Gen.
T. de Leon; and (2) from November 29, 2007 to February 16, 2010, the NHA
relocated all the informal settlers located in the areas affected by
the C-5 Northern Link Road Project, Segment 8.1, including those found
in Brgy. Ugong and Brgy. Gen. T. de Leon.
[72] However, this is not sufficient to
contravene the RTC's finding that petitioner failed to prove its
allegation that the subject properties were occupied or
near the vicinity occupied by the alleged informal
settlers. Nevertheless, the Court finds that petitioner failed to
provide a compelling reason for the Court to deviate from the CA's
conclusion that even if the alleged presence of informal settlers is
factored in, it cannot reduce the RTC's recommended valuation. To
reiterate, the CA considered that the area is also devoted to commercial
and industrial uses. Notably, the valuation at P9,000.00 per square
meter for the subject properties is substantially lower than the
recommended value of the BOC at P15,000.00 per square
meter.
Petitioner submits that the BIR zonal
valuation reflects the fair market value of real property within a given
area and must not be taken lightly given the tedious process by which
the government determines it and that it is highly suspicious if the
recommended just compensation is more than double the BIR
valuation.
Petitioner's contention is without
merit.
It is well settled in jurisprudence that the
zonal valuation is just one of the indices of the fair market value of
real estate.
[73]
It cannot be the sole basis of just compensation in expropriation cases
since the standard is not the taker's gain but the owner's loss.
[74]Also, the courts are not to
be limited by a certain numerical threshold relative to the BIR zonal
value in the determination of just compensation. Ultimately, in arriving
at the full and fair equivalent of the property subject of
expropriation, the courts are guided by certain standards for valuation
such as those mentioned in Section 5 of RA 8974. Thus, the Court will
sustain the lower courts determination of just compensation even if it
is higher than, or more specifically, as in this case, double the BIR
zonal value as long as such determination is justified as the full and
fair equivalent of the property.
As in the case, the
Court finds as reasonable the RTC's determination of just compensation
that was affirmed by the CA. This is considering that as already
discussed, the RTC referred to several factors in Section 5 of RA 8974
in making such determination.
The award of legal
interest on just compensation must be modified such that legal interest
must accrue from the time the Government took possession of the
property. | |
The
Court deems it proper to modify the award of interest by the CA. To
recall, the CA modified the RTC's award of interest in favor of
respondents and ordered petitioner to pay interest "at the rate of (1)
twelve
per centum (12%)
per annum
on the unpaid balance of P625,000.00 from the date of filing of the
instant complaint until June 30, 2013; and (2) six
per
centum (6%)
per annum from July 1, 2013
until full payment of said unpaid balance."
[75]It must be
emphasized that expropriation proceedings for national infrastructure
projects are governed by Rule 67 of the Rules of Court and RA
8974.
[76]
Particularly, Section 10, Rule 67 provides that the legal interest on
the just compensation shall run from the time of taking of possession of
the property. Section 10, Rule 67
provides:
Section 10. Rights of
plaintiff after judgment and payment. - Upon payment
by the plaintiff to the defendant of the compensation fixed by the
judgment, with legal interest thereon from the taking of the possession
of the property, or after tender to him of the amount so fixed
and payment of the costs, the plaintiff shall have the right to enter
upon the property expropriated and to appropriate it for the public use
or purpose defined in the judgment, or to retain it should he have taken
immediate possession thereof under the provisions of section 2 hereof.
If the defendant and his counsel absent themselves from the court, or
decline to receive the amount tendered, the same shall be ordered to be
deposited in court and such deposit shall have the same effect as actual
payment thereof to the defendant or the person ultimately adjudged
entitled thereto. (Italics supplied.)
In
Evergreen, the Court explained that just compensation
should be made at the time of taking; and the rationale for imposing
interest on just compensation is to compensate the property owners for
the income that they would have made if they had been properly
compensated,
i.e., they had been paid the full amount
of just compensation, at the time of taking when they were deprived of
their property.
[77]Thus, premised on the facts
in
Evergreen, the Court ruled that while the just
compensation shall be appraised as of the date of filing of the
expropriation complaint as it preceded the actual taking of the
property, the legal interest shall run from the time that the government
took possession of the property and not from the time of filing of the
expropriation complaint.
[78]It also bears emphasis that
the Court had already recognized that the just compensation due to the
landowners for their expropriated property amounts to an effective
forbearance.
[79]
Thus, pursuant to the Court's pronouncement in
Eastern Shipping
Lines, Inc. v. Court of Appeals,
[80] the imposable interest on the
difference between the final amount adjudged by the Court and the
initial payment made shall be 12%
per annum from the
time of taking of the property. However, consistent with the Court's
ruling in
Nacar v. Gallery Frames, et al.,
[81] such interest rate
shall apply only until June 30, 2013 in view of BSP Circular No. 799
which took effect on July 1, 2013 and which reduced the legal interest
on loans and forbearance of money from 12% to 6%
per
annum. Thus, from July 1, 2013 onwards, the legal interest on
the difference between the final amount adjudged by the Court and the
initial payment made shall be 6%
per annum.
[82]As
in the case, the date of taking of the subject properties is November
12, 2008 when the RTC issued a writ of possession in favor of
petitioner.
[83]
Thus, a legal interest of 12%
per annum on the
difference between the final amount adjudged by the Court and the
initial payment made shall accrue from November 12, 2008 until June 30,
2013. From July 1, 2013 until the finality of the Decision of the Court,
the difference between the final amount adjudged by the Court and the
initial payment made shall earn interest at the rate of 6%
per
annum. Thereafter, the total amount of just compensation shall
earn legal interest at the rate of 6%
per annum from
the finality of this Decision until full
payment.
WHEREFORE, the petition
is
DENIED The Decision dated June 28, 2018 and the
Resolution dated March 5, 2019 of the Court of Appeals in CA-G.R. CV No.
103874 are
AFFIRMED with
MODIFICATION only as to the reckoning period of the
payment of legal interest.
Petitioner Republic of the
Philippines is ordered to pay interest at the rate of: (1) 12%
per annum on the unpaid balance of P625,000.00 from
November 12, 2008, the date of taking of the properties until June 30,
2013; and (2) 6%
per annum from July 1, 2013 until
full payment of the unpaid
balance.
SO
ORDERED.Leonen, (Chairperson),
Delos Santos, and
J. Lopez, JJ.,
concur.
Hernando, J., on official
leave.
[1] Rollo, pp.
11-29.
[2] Id. at 34-53; penned by
Associate Justice Pablito A. Perez with Associate Justices Ramon M.
Bato, Jr. and Ramon A. Cruz, concurring.
[3] Id.
at 55-57.
[4] Records, pp. 515-520; penned by Judge Nancy
Rivas-Palmones.
[5] Id. at
1-8.
[6] Rollo, p.
35.
[7]
Id.[8]
Id.[9] Id. at
35-36.
[10] Records, pp. 37-43.
[11]
Id. at 38.
[12]
Id.[13] Id. at
40.
[14] Rollo, pp.
36-37.
[15] Id. at
38.
[16]
Id.[17]
Id.[18]
Id.[19] See Commissioners' Report dated February
21, 2014 of Branch 172, Regional Trial Court, Valenzuela City signed by
the Board of Commissioners, records, p. 495.
[20]
Id. at 496.
[21] Id. at
497-498.
[22]
Id.[23] Id. at 502-504,
507-512.
[24] Id. at
515-520.
[25] Id. at
519-520.
[26]
Id.[27] Rollo, p.
42.
[28] Id. at
34-53.
[29] Id. at
52-53.
[30] Entitled. "An Act to Facilitate the Acquisition
of Right-Of-Way, Site or Location for National Government
Infrastructure Projects and For Other Purposes," approved on November 7,
2000.
[31] Rollo, pp. 43-44, citing
Republic of the Philippines v. Judge Gingoyon, 514
Phil. 657 (2005).
[32] Id. at
46.
[33] Id. at
48.
[34] Id. at 46-47,
49-50.
[35] 817 Phil. 1048
(2017).
[36] Rollo, pp.
50-51.
[37] Id. at
51-52.
[38] Id. at
52-53.
[39] Id. at
58-72.
[40] Id. at
55-57.
[41] Id. at
56-57.
[42] Id. at
17-18.
[43] Id. at 21,
23-24.
[44] Id. at
18-20.
[45] Id. at
20.
[46] Id. at
137-152.
[47] Id. at
161.
[48] Id. at
159.
[49] Id. at
171.
[50] Id. at
152.
[51] Id. at
181.
[52] Yano v. Sanchez, G.R. No.
186640, February 11, 2020, citing
Loy, Jr., et al. v. San
Miguel Corp. Employees Union-Phil. Transport and General Workers
Organization (SMCEU-PTGWO), et al., 620 Phil. 220, 238
(2009).
[53] G.R. No. 186640, February 11,
2020.
[54] Id., Citations
omitted.
[55] Teodoro, et al. v. Continental Cement
Corporation, 695 Phil. 803, 819 (2012), citing
Real
v. Belo, 542 Phil. 109, 123-124 (2017) and
Santos v.
Court of Appeals, 293 Phil. 45, 49
(1993).
[56] Evergreen Manufacturing Corp. v. Rep.
of the Phils., supra note 35 at
1057.
[57] Rep. of the Phils. v. Heirs of Eladio
Santiago, et al., 808 Phil. 1, 9
(2017).
[58] Evergreen Manufacturing Corp. v. Rep.
of the Phils., supra note 35 at
1057.
[59] Rep. of the Phils. v. Heirs of Eladio
Santiago, et al., supra note 57.
[60] In
DBP v.
Traders Royal Bank, et al., 642 Phil. 547, 556 (2010), as
quoted in
Evergreen Manufacturing Corp. v. Rep. of the Phils.,
supra note 35 at 1058, the Court enumerated the following
exceptions to the rule that factual findings of the Court of Appeals are
binding on the Court: (1) when the findings are grounded entirely on
speculations, surmises or conjectures; (2) when the inference made is
manifestly mistaken, absurd or impossible; (3) when there is grave abuse
of discretion: (4) when the judgment is based on a misapprehension of
facts; (5) when the findings of fact are conflicting; (6) when in making
its findings the Court of Appeals went beyond the issues of the case,
or its findings are contrary to the admissions of both the appellant and
the appellee; (7) when the findings are contrary to that of the trial
court; (8) when the findings are conclusions without citation of
specific evidence on which they are based; (9) when the facts set forth
in the petition as well as in the petitioner's main and reply briefs are
nor disputed by the respondent; (10) when the findings of fact are
premised on the supposed absence of evidence and contradicted by the
evidence on record; or (11) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties which, if
properly considered, would justify a different conclusion. See also
Republic v. Barcelon, G.R. No. 2260 1, July 24,
2019.
[61] See
Rep. of the Phils. v. Asia Pacific
Integrated Steel Corp., 729 Phil. 402 (2014);
Rep.
of the Phils. v. C. C. Unson Company, Inc., 781 Phil. 770
(2016).
[62] Land Bank of the Philippines v.
Orilla, 578 Phil. 663 (2008) as quoted in
Apo Fruits
Corp., et al. v. Land Bank of The Phil., 647 Phil. 251
(2010).
[63] Rep. of the Phils. v. Cebuan, et
al., 810 Phil. 767 (2017).
[64] Rep. of the
Phils. v. Heirs of Eladio Santiago, et al., supra note 57 at
11, citing
National Power Corporation v. Tuazon, et
al., 668 Phil. 301, 313 (2011);
National Power Corp.
v. Bagui, et al., 590 Phil. 424, 432
(2008).
[65] Rollo, p. 47, citing
Rep. of the Phils. v. Cebuan, et al., supra note
63.
[66] 702 Phil. 284
(2013).
[67] Id. at 298, citing
Office of the Ombudsman v. De Sahagun, et al., 584
Phil. 119, 127 (2008).
[68] Records, pp.
518-519.
[69] In
Rep. of the Phils. v. Ng,
821 Phil. 1070 (2017), the Court explained by way of a footnote that in
the case of
Republic v. Hobart Realty and Development
Corporation which involved a residential property, the Court
upheld the just compensation of P15,000.00/square meter
via a Minute Resolution dated July 9, 2012 in G.R.
No. 201136 which attained finality on January 7,
2013.
[70] Records, pp.
518-519.
[71] Section 4 of Republic Act No. 8974
provides:
SECTION 4.
Guidelines for
Expropriation Proceedings. - Whenever it is necessary to
acquire real property for the right-of-way or location for any national
government infrastructure project through expropriation, the appropriate
implementing agency shall initiate the expropriation proceedings before
the proper court under the following
guidelines:
(a) Upon the filing of the
complaint, and after due notice to the defendant, the implementing
agency shall immediately pay the owner of the property the amount
equivalent to the sum of (1) one hundred percent (100%) of the value of
the property based on the current relevant zonal valuation of the Bureau
of Internal Revenue (BIR); and (2) the value of the improvements and/or
structures as determined under Section 7
hereof;(b) In provinces, cities,
municipalities and other areas where there is no zonal valuation, the
BIR is hereby mandated within the period of sixty (60) days from the
date of the expropriation case, to come up with a zonal valuation for
said area; and
(c) In case the completion of a
government infrastructure project is of utmost urgency and importance,
and there is no existing valuation of the area concerned, the
implementing agency shall immediately pay the owner of the property its
proffered value taking into consideration the standards prescribed in
Section 5 hereof.
Upon compliance with the
guidelines abovementioned, the court shall immediately issue to the
implementing agency an order to take possession of the property and
start the implementation of the
project.Before the court can issue a Writ
of Possession, the implementing agency shall present to the court a
certificate of availability of funds from the proper official
concerned.
In the event that the owner of the
property contests the implementing agency's proffered value, the court
shall determine the just compensation to be paid the owner within sixty
(60) days from the date of filing of the expropriation case. When the
decision of the court becomes final and executory, the implementing
agency shall pay the owner the difference between the amount already
paid and the just compensation as determined by the court. (italics
supplied.)
[72] Rollo, p.
19.
[73] National Grid Corporation of the
Philippines v. Bautista, G.R. No. 232120, September 30, 2020,
citing
Leca Realty Corp. v. Rep. of the Phils., 534
Phil. 693, 696 (2006).
[74]
Id.[75] Rollo, p.
52.
[76] National Power Corporation v. Posada,
et al., 755 Phil. 613 (2015).
[77] Evergreen
Manufacturing Corp. v. Rep. of the Phils., supra note 35 at
1068.
[78] Id. at
1070-1071.
[79] Republic of the Phils. v. Court of
Appeals, 433 Phil. 106 (2002) as cited in
Apo Fruits
Corp., et al. v. Land Bank of the Phil., 647 Phil. 251
(2010).
[80] 304 Phil. 236
(1994).
[81] 716 Phil. 267
(2013).
[82] See also
Rep. of the Phils. v. Ng,
supra note 69.
[83] See
Rep. of the Phils. v.
Macabagdal, 823 Phil. 477 (2018), citing
Rep. of the
Phil., et al. v. Mupas, et al., 769 Phil. 21, 199-200, 223
(2015).