Republic v. Heirs of Bonifacio
REITERATIONFacts
The Antecedents: The Republic of the Philippines, through the Department of Public Works and Highways (DPWH), filed an expropriation complaint in 2007 for a 913-square meter lot registered in the names of Spouses Valentina and Aurelio Bonifacio (Bonifacio Spouses) in Valenzuela City. The Republic offered to pay P2,282,500.00, equivalent to the zonal value and replacement cost of improvements. The heirs of the Bonifacio Spouses claimed the market value was between P10,000.00 to P15,000.00 per square meter, with a replacement cost for improvements of not less than P350,000.00. Procedural History: In 2009, the Regional Trial Court (RTC) issued a writ of possession and order of expropriation. A Board of Commissioners was formed, which recommended P10,000.00 per square meter as just compensation. In 2014, the RTC rendered a decision ordering the Republic to pay P9,130,000.00 (P10,000.00/sqm), deducting the provisional deposit of P2,282,500.00, and imposing 12% interest on the unpaid balance from the filing of the complaint until full payment. The RTC also ordered interest on the initial deposit from the filing of the complaint until its deposit, and awarded attorney's and commissioner's fees. The Court of Appeals (CA) affirmed the RTC decision. The Petition: The Republic filed a Petition for Review on Certiorari, arguing that the just compensation was arbitrary, the interest rate should be 6% per annum based on BSP Circular No. 799, and it is exempt from paying commissioner's fees.
Issue(s)
Whether the Regional Trial Court imposed the correct amount of just compensation. Whether the Regional Trial Court correctly imposed a 6% per annum interest rate. Whether the Regional Trial Court correctly ordered the petitioner Republic of the Philippines to pay the commissioner's fees. Whether the Regional Trial Court correctly awarded attorney's fees.
Ruling
The Petition for Review on Certiorari is PARTIALLY GRANTED. The Court modified the ruling of the Court of Appeals by adjusting the imposition of interest rates and deleting the awards for attorney's and commissioner's fees. The Republic is ordered to pay legal interest at 12% per annum on the unpaid balance of just compensation from the date of taking (February 24, 2009) until June 30, 2013; 6% per annum from July 1, 2013, until the finality of the Decision; and 6% per annum on the total amount of just compensation from the finality of the Decision until full payment. The awards of attorney's fees and commissioner's fees are deleted.
Ratio Decidendi
On the amount of just compensation: The determination of just compensation is a judicial function. The Court reiterated that factual findings of the trial court, when affirmed by the CA, are binding on the Supreme Court. The RTC, in accepting the commissioners' report recommending P10,000.00 per square meter, followed the procedure under Rule 67 of the Rules of Court. The petitioner failed to show any reversible error in the lower courts' findings on the just compensation award. The standards provided in Section 5 of RA 8974 are permissive, and courts are not bound to consider them, with the use of 'may' indicating discretion, which was not abused in this case. On the imposition of interest rate: The Court clarified that legal interest on the difference between the final amount of just compensation and the government's initial payment accrues from the time of taking. The applicable interest rate is 12% per annum from the time of taking until June 30, 2013, and 6% per annum from July 1, 2013, onwards, as per Bangko Sentral ng Pilipinas (BSP) Circular No. 799. The RTC erred in imposing a uniform 12% interest rate from the filing of the complaint, as the property was not yet taken at that time. The Court also noted that the total amount of just compensation earns 6% per annum interest from the finality of the decision until full payment. On the payment of commissioner's fees: The Court held that the Republic is exempt from paying commissioner's fees in expropriation cases, citing Rule 141, Section 16 of the Rules of Court and the ruling in Republic v. Garcia. Commissioner's fees are considered costs, and the government is not liable for costs unless provided by law. Therefore, the RTC's order for the petitioner to pay commissioner's fees was incorrect and deleted. On the award of attorney's fees: The Court deleted the award of attorney's fees, stating that the general rule is that attorney's fees cannot be recovered as part of damages. Entitlement to attorney's fees must be justified by the facts of the case and be reasonable, just, and equitable. In this case, there were insufficient factual and legal justifications for the award of attorney's fees in favor of the respondents.
Main Doctrine
Legal interest on the difference between the final amount of just compensation and the government's initial provisional deposit accrues from the time of taking, when the private owner was deprived of the property. The rate of legal interest is 12% per annum from the time of taking until June 30, 2013, and 6% per annum from July 1, 2013, until finality of the decision. The government is exempt from paying commissioner's fees and attorney's fees in expropriation cases unless otherwise provided by law.