Republic v. Sinense
REITERATIONFacts
The Antecedents: The Republic of the Philippines, represented by the Department of Public Works and Highways (DPWH), filed an amended complaint for expropriation to acquire 11 parcels of land covering 84,925 square meters for the Iloilo Flood Control Project II. The Project aimed to address flooding and improve urban living conditions in Iloilo City. The Republic deposited P188,313,599.55 for the BIR zonal valuation and provisional value of improvements. A Board of Commissioners (BOC) was constituted to determine just compensation. The BOC, after ocular inspection and hearings, submitted a report recommending P1,920,374,374.00 as just compensation, considering factors like developmental costs, current selling prices of similar lands, and consequential damages. The Republic objected, proposing P1,800.00 per square meter based on BIR zonal valuation, while respondents Pacific Rehouse Corporation (PRC) and Philippine Estates Corporation (PEC) claimed P2,598,661,687.00. Procedural History: The Regional Trial Court (RTC) adopted the BOC's recommendation and ordered the Republic to pay P1,920,374,373.00 as just compensation to PRC and PEC, later modifying the decision by deleting the payment of value-added tax. The Court of Appeals (CA) affirmed the RTC decision with modification, imposing interest at 12% per annum from the time of taking until June 30, 2013, and 6% per annum thereafter until full payment. The CA found that the RTC considered all parameters under RA 8974 and that the Republic failed to present a detailed computation for its proposed compensation. The CA also affirmed the award of consequential damages due to the Project bisecting the Jaro Grand Estates. Both parties filed motions for reconsideration, which were denied by the CA. The Petition: The Republic filed a Petition for Review on Certiorari, assailing the CA's decision and resolution, primarily questioning the pegged amount of just compensation and arguing that the CA erred in adopting the BOC's report, which it deemed speculative and unsubstantiated. The Republic maintained that the just compensation should be P1,800.00 per square meter.
Issue(s)
Whether the Court of Appeals erred in affirming the amount of just compensation fixed by the RTC and the Board of Commissioners. Whether the Court of Appeals erred in imposing legal interest on the just compensation.
Ruling
The Supreme Court DENIED the petition, AFFIRMED the Decision dated December 18, 2017, and the Resolution dated July 23, 2018 of the Court of Appeals in CA-G.R. CEB CV No. 05070, with MODIFICATION that an interest at the rate of 6% per annum shall be imposed on the total amount due from the finality of the Decision until full payment. The Court upheld the just compensation for the subject properties in the total amount of P1,920,374,374.00 with legal interest at the rate of 12% per annum from the taking of the properties until June 30, 2013, and 6% per annum from July 1, 2013, until the finality of the Decision. The total amount due shall also earn legal interest at the rate of 6% per annum from the finality of the Decision until full payment.
Ratio Decidendi
On the Issue of Just Compensation: The Court held that the issues pertaining to the just compensation for expropriated properties involve factual matters, which are generally beyond the scope of a petition for review on certiorari under Rule 45. The Supreme Court, not being a trier of facts, accords respect to the uniform factual findings of the RTC and the CA, especially in the absence of a showing that they erred. The Court emphasized that the determination of just compensation is essentially within the court's power, but the appointment of commissioners is mandatory. While the court may set aside the BOC's findings, it requires valid grounds such as the application of illegal principles, disregard of a clear preponderance of evidence, or grossly inadequate or excessive amounts. In this case, the BOC's report was found to be pursuant to the relevant factors set forth under Section 5 of RA 8974, including the classification and use of the property, developmental costs, current selling prices of similar lands, consequential damages, size, shape, location, tax declaration, zonal valuation, and other relevant evidence. The BOC exerted serious efforts, including ocular inspections, interviews with experts, and issuing a revised report, to ascertain just compensation. The Court reiterated that zonal valuation is only one of several factors and cannot be the sole basis for just compensation. Therefore, the adoption of the BOC's recommendation by the RTC and CA was not arbitrary but supported by evidence and relevant factors. On the Imposition of Legal Interest: The Court affirmed the CA's imposition of legal interest, citing the constitutional requirement for prompt and full payment of just compensation. The delay in payment constitutes a forbearance of money, thus earning legal interest. The Court applied BSP Circular No. 799, Series of 2013, mandating 12% per annum interest from the taking of the properties until June 30, 2013, and 6% per annum thereafter until the finality of the decision. Furthermore, the Court imposed an additional 6% per annum interest on the total amount due from the finality of the decision until full payment, in conformity with prevailing jurisprudence, to compensate for the continued deprivation of the property and its fruits or income.
Main Doctrine
The determination of just compensation in expropriation cases involves factual matters, and the findings of the lower courts, particularly when they adopt the recommendations of the Board of Commissioners based on relevant factors under RA 8974, are generally binding on the Supreme Court. The imposition of legal interest on unpaid just compensation is a measure of fairness and adherence to the constitutional requirement of prompt and full payment.