G.R. No. 222551, June 19, 2019
Republic of the Philippines, represented by the Department of Public Works and Highways, Petitioner, vs. Spouses Pedro Goloyuco and Zenaida Goloyuco, Respondents.

FACTS

The Republic, through the DPWH, filed a complaint for expropriation on December 7, 2007, against the respondent spouses to acquire a 50-square-meter parcel of land in Valenzuela City for the C-5 Northern Link Road Project. The RTC issued a writ of possession after the petitioner deposited ₱137,500.00, representing the BIR zonal valuation. In the second stage to determine just compensation, the commissioners submitted divergent recommendations: one proposed ₱12,250.00 per square meter, while two others recommended ₱10,000.00 per square meter.
The RTC fixed just compensation at ₱8,300.00 per square meter, or ₱415,000.00 total, after considering the commissioners’ reports, the BIR zonal valuation, the property’s location and characteristics, and valuations from prior expropriation cases for the same project. It ordered the petitioner to pay 12% interest per annum on the unpaid balance from the time of taking. The CA affirmed the compensation rate but modified the interest computation, ruling that 12% interest should run from the filing of the complaint until June 30, 2013, and 6% thereafter.

ISSUE

Whether the courts correctly determined the amount of just compensation and the applicable legal interest.

RULING

The Supreme Court affirmed the findings on just compensation but modified the interest rulings. On compensation, the Court upheld the RTC’s valuation of ₱8,300.00 per square meter. It emphasized that the determination of just compensation is a judicial function, and the trial court correctly exercised its discretion by conducting an independent assessment. The RTC did not rely solely on the commissioners’ reports but also considered the property’s nature, location, zonal valuation, and comparable sales from similar expropriation proceedings, which aligns with the principles of fairness and indemnity to the owner.
Regarding interest, the Court clarified the applicable rules. Citing Evergreen Manufacturing Corporation v. Republic, it held that the unpaid balance of just compensation—the difference between the final adjudged amount and the initial deposit—shall earn 12% interest per annum from the date of taking (September 24, 2008, when the writ of possession was issued) until June 30, 2013. From July 1, 2013, following BSP Circular No. 799, the interest rate on this unpaid balance is reduced to 6% per annum until the decision’s finality. Furthermore, the total just compensation awarded shall earn an additional 6% interest per annum from the finality of judgment until full payment to ensure the owner is fully indemnified for the delay. This structured interest imposition balances the constitutional requirement of just compensation with prevailing monetary policy.