G.R. No. 136171 ; July 2, 2002
Republic of the Philippines, petitioner, vs. Ker and Company Limited, respondent.

FACTS

The Republic of the Philippines, through the DPWH, filed a petition for expropriation of portions of two adjacent parcels of land owned by Ker and Company Limited in Davao City for a road-widening project. The properties were designated as Site I (1,186 sq. m.) and Site II (1,035 sq. m.). The government initially offered a provisional value of P1,000 per square meter. The respondent claimed a higher value, and the court-appointed commissioners submitted an appraisal report valuing Site I at P8,788.70/sq. m. and Site II at P5,423.48/sq. m. The trial court, however, fixed just compensation at P6,000/sq. m. for Site I and adopted the commissioner’s valuation of P5,423.48/sq. m. for Site II.
The petitioner appealed, arguing the valuation for Site I was excessive. It relied on the property’s tax declaration showing a lower assessed value, a prior court decision (Republic v. Laong) fixing values in the same vicinity at P4,000/sq. m., and the assertion that the lots being adjacent warranted identical valuations. The Court of Appeals affirmed the trial court’s decision in full, rejecting the arguments based on tax declarations and the Laong case.

ISSUE

Whether the Court of Appeals erred in affirming the valuation of just compensation for Site I at P6,000 per square meter.

RULING

The Supreme Court partially granted the petition, modifying the compensation for Site I. The Court upheld the appellate court’s rejection of the petitioner’s primary arguments. It reiterated that while tax declarations may be considered, they do not control over a judicial determination based on commissioner reports and full adversarial proceedings. Furthermore, the Court agreed that the Laong case was not controlling, as just compensation must be determined as of the time of taking or filing of the complaint, not by a prior judicial valuation for a different property.
However, the Court found merit in the petitioner’s final contention regarding the adjacency of the lots. It ruled that since Sites I and II are adjacent parcels affected by the same project and the appraisal report indicated they shared similar characteristics and access problems, there was no substantial distinction to justify a higher valuation for Site I. The commissioners provided no explanation for the disparity. Consequently, the Court held it just and reasonable to apply the undisputed valuation for Site II (P5,423.48/sq. m.) to Site I as well. The decision was thus affirmed with modification, setting a uniform rate of P5,423.48 per square meter for both expropriated portions.