G.R. No. L-57524 January 8, 1986
REPUBLIC OF THE PHILIPPINES, petitioner, vs. MAURA SANTOS, et al., and COURT OF APPEALS, respondents.

FACTS

This case involves the expropriation by the Republic in 1969 of 66,096 square meters of land in Parañaque and Muntinlupa for the widening of the Manila South Diversion Road. The provincial Appraisal Committee fixed the provisional value at P40 per square meter, totaling P2,641,190, which the government deposited. Fourteen claimants, including several corporations, accepted this valuation and were paid accordingly, with their portions of the proceeding deemed terminated. The remaining claimants contested the price. The trial court appointed commissioners who, in a 1970 report, recommended a just compensation of P100 per square meter for most lots, and P60 per square meter for a portion owned by respondent Maura Santos. The trial court adopted a uniform rate of P100, which the Court of Appeals later affirmed, modifying it only to add legal interest.

ISSUE

Whether the Court of Appeals erred in affirming the trial court’s determination of just compensation at P100 per square meter, instead of the P40 per square meter accepted by fourteen other claimants and initially set by the Appraisal Committee.

RULING

Yes. The Supreme Court reversed the decisions of the lower courts and fixed just compensation at P40 per square meter. The legal logic rests on the requirement that just compensation must be based on the fair market value at the time of the taking, supported by trustworthy evidence. The commissioners’ report recommending a higher valuation was flawed. First, it relied on an appraisal of a comparable lot (Alcaraz) made eight months after the expropriation complaint was filed, which did not reflect the value at the correct time. Second, its findings regarding prices ranging from P150 to P200 were based on hearsay statements from owners and lacked documentary substantiation. Third, it improperly disregarded the compelling contemporaneous sales evidence: fourteen other claimants had willingly sold their lands to the government at P40 per square meter, which constituted strong, objective evidence of the fair market value at the time of expropriation. The Court, citing its authority under Rule 67 to disregard the commissioners’ report and establish value based on the record, emphasized that prices often become inflated once condemnation begins. The sales at P40 were the most reliable indicator of value. For respondent Maura Santos, the Court also noted the expropriation increased the value of her remaining adjacent land. Therefore, just compensation was correctly pegged at the Appraisal Committee’s initial valuation of P40 per square meter.