GR 229335; (November, 2017) (Digest)

G.R. No. 229335 November 29, 2017
Republic of the Philippines, represented by the Department of Public Works and Highways (DPWH), Petitioner vs. Belly H. Ng, represented by Annabelle G. Wong, Respondent

FACTS

The Republic, through the DPWH, filed a complaint to expropriate respondent Belly H. Ng’s industrial lots and improvements in Valenzuela City for the Mindanao Avenue Extension Project. The petitioner offered compensation based on a zonal value of ₱4,000/sq.m. for the land and a specific amount for improvements. Respondent rejected the offer as too low, contending the fair market value was ₱25,000/sq.m. and claiming a higher replacement cost for improvements. The RTC granted a writ of possession after petitioner deposited 100% of the initial valuation. A board of commissioners was appointed, which recommended just compensation of ₱7,000/sq.m. for the land and ₱12,000/sq.m. for the improvements.
Respondent objected to the land valuation, arguing it was insufficient and pointing to a prior case where the same RTC fixed compensation at ₱15,000/sq.m. for a nearby property expropriated for a related project. She accepted the ₱12,000/sq.m. valuation for improvements but insisted on a 12% legal interest rate. Petitioner did not object to the commissioners’ recommended land value and the 6% interest rate.

ISSUE

The core issue is whether the courts correctly determined the just compensation for the expropriated properties and the applicable legal interest rate.

RULING

The Supreme Court affirmed the CA decision with modification on the interest computation. It upheld the just compensation of ₱15,000/sq.m. for the land. The Court emphasized that just compensation is the full and fair equivalent of the property taken, contemporaneous with its actual taking. The RTC correctly considered relevant factors, including the property’s classification, location, and the market value of comparable properties within the area, particularly the valuation in a prior, related expropriation case for the C-5 Northern Link Project. This use of a relevant comparator was a valid exercise of judicial discretion in determining fair market value.
The Court also sustained the replacement cost of ₱12,000/sq.m. for the improvements. It noted respondent’s acceptance of this figure and petitioner’s failure to substantively object, deeming the amount reasonable compared to current construction costs. The award of consequential damages was correctly deleted as the entire property was taken, leaving no remainder that could suffer impairment in value.
Regarding interest, the Court ruled that the legal rate should be six percent (6%) per annum, consistent with prevailing jurisprudence (Nacar v. Gallery Frames). This interest is imposed to compensate the owner for the income foregone from the property from the time of taking until full payment. The Court clarified that interest should be computed from the date of actual taking or filing of the complaint, whichever is earlier, until full satisfaction, not merely from the date of the RTC decision. Thus, the CA’s ruling was modified to reflect this proper reckoning point for the interest computation.