G.R. No. 155605 & G.R. No. 160179; September 27, 2006
LECA REALTY CORPORATION, petitioner, vs. REPUBLIC OF THE PHILIPPINES, Represented by the Department of Public Works and Highways, respondent. (Consolidated with REPUBLIC OF THE PHILIPPINES, Represented by the Department of Public Works and Highways, petitioner, vs. BANK OF THE PHILIPPINE ISLANDS, CITYLAND INCORPORATED, LECA REALTY CORPORATION, and LEELENG REALTY CORPORATION, respondents.)

FACTS

The Republic, through the DPWH, filed a complaint for eminent domain to acquire portions of properties owned by Leca Realty, Leeleng Realty, Metrobank, BPI, and Cityland for the EDSA-Shaw Boulevard flyover project. The City Appraisal Committee initially recommended zonal values of P35,000 and P45,000 per square meter. The trial court appointed commissioners who, after investigation, recommended significantly higher fair market values: P50,000/sq.m. for Leca and Leeleng; P125,000/sq.m. for Metrobank and BPI; and P137,500/sq.m. for Cityland. The trial court adopted this report.
The Republic appealed, arguing the commissioners’ valuations improperly exceeded the official zonal values. Leca also appealed, contending its property was undervalued compared to the other lots, despite all being in the same general vicinity for the same public project.

ISSUE

The core issues were: (1) whether zonal valuation is the sole determinant of just compensation in expropriation; and (2) whether the commissioners’ report, which set different values for different properties, was valid.

RULING

The Supreme Court ruled that zonal valuation is not conclusive for just compensation. It is merely one index for taxation, not the actual fair market value. The standard for just compensation is the owner’s loss, not the taker’s gain, and must be the full and fair equivalent of the property taken.
The Court upheld the commissioners’ report. Commissioners, as trial court aids, enjoy discretion in assessing value based on various factors like location, highest and best use, and comparable sales. The differing valuations for Leca/Leeleng versus BPI/Cityland were justified by specific findings: the latter’s properties were within the prime Ortigas Center, directly adjacent to major commercial establishments, while Leca’s was farther and in a less commercially developed segment of Shaw Boulevard. The commissioners’ factual findings, affirmed by the lower courts, are generally binding. Thus, the consolidated petitions were resolved by affirming the Court of Appeals’ decision which upheld the trial court’s adoption of the commissioners’ report.