G.R. No. 212786 . July 30, 2018.
Republic of the Philippines, represented by the Department of Public Works and Highways (DPWH), Petitioner, vs. Estrella R. Decena, Marieta Decena Brazil, Noland D. Brazil, Heirs of Edita R. Decena, as represented by Virgilio C. Brazil, Sr., Respondents.

FACTS

The petitioner, Republic of the Philippines through the DPWH, filed five consolidated complaints for expropriation against the respondents to acquire their properties in Old Balara, Quezon City, for the C5 Road Extension Road Widening Project. After failed negotiations, the petitioner deposited amounts based on the BIR zonal valuation with the Land Bank and obtained a writ of possession. The Regional Trial Court (RTC) issued an order of condemnation and created a Board of Commissioners (BOC) to determine just compensation. The BOC submitted a report recommending a valuation of P17,893.33 per square meter, considering the BIR zonal value, average recorded sales, and the highest recorded sale for adjacent properties. The respondents, however, submitted a private appraisal report from the Philippine Appraisal Company, Inc. (PACI) recommending P30,000.00 per square meter based on a market data approach using comparable properties.
The RTC, in a Resolution dated July 5, 2012, fixed just compensation at P25,000.00 per square meter. It rejected the BOC’s valuation for relying too heavily on the BIR zonal valuation and averaging sales data, and found the PACI report more comprehensive but still excessive. The Court of Appeals affirmed the RTC’s decision in toto. The petitioner elevated the case to the Supreme Court, arguing the valuation was not based on competent evidence and that just compensation should be determined as of the date of taking.

ISSUE

Whether the Court of Appeals erred in affirming the RTC’s determination of just compensation at P25,000.00 per square meter.

RULING

The Supreme Court denied the petition and affirmed the assailed CA decision. The Court held that the determination of just compensation is a judicial function, and the trial court’s findings, especially when affirmed by the CA, are generally binding if supported by substantial evidence. The RTC correctly exercised its discretion by not adopting the BOC’s valuation wholesale, as it was anchored on the outdated BIR zonal valuation and a simple average of sales, which did not reflect the property’s full market value. The RTC also properly considered, but did not fully adopt, the PACI report, finding its P30,000.00 valuation too high.
The Court emphasized that just compensation must be the full and fair equivalent of the property taken, considering factors like the property’s classification, use, and potential. The RTC’s final figure of P25,000.00 was a reasoned estimate based on the evidence on record, including the highest adjacent sale of P25,190.00 noted by the BOC. Furthermore, the Court clarified that for purposes of interest computation, the “date of taking” is the date the petitioner was placed in possession via the writ, which was June 17, 2011. Consequently, legal interest of 12% per annum (from June 17, 2011, until June 30, 2013) and 6% per annum (from July 1, 2013, until full payment) on the unpaid balance of the just compensation is imposed, as the initial deposits based on zonal value were manifestly low.