G.R. No. 232169 , March 08, 2023
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, PETITIONER, VS. CASIMIRO TAMPARONG, JR., RESPONDENT.

FACTS

The Department of Public Works and Highways (DPWH) initiated expropriation proceedings on February 2, 1999, for a 7,555-square meter portion of land owned by Casimiro Tamparong, Jr. for the Cagayan de Oro Third Bridge and Approaches project. The Regional Trial Court (RTC) issued an Order of Expropriation on November 27, 2000, and an Order to place the Republic in possession of the property on November 29, 2000. On January 21, 2010, the RTC fixed the just compensation at PHP 3,500.00 per square meter, ordering payment with legal interest from the taking of possession until full payment, after deducting a provisional deposit of PHP 9,443,750.00 already paid by the Republic. This resolution became final and executory. At the execution stage, a dispute arose over the computation of the remaining balance, specifically regarding the applicable interest rate. The DPWH computed the balance using a 6% per annum interest from the time of taking and 12% from the finality of judgment. Tamparong, through counsel, initially requested immediate payment based on this computation due to his advanced age and medical condition, but payment was not made. Tamparong later filed a Motion for Recomputation, seeking interest at 12% per annum from the time of taking, consistent with jurisprudence. The RTC, in an Order dated June 25, 2014, fixed the legal interest at 12% per annum from the date of its January 21, 2010 Resolution. The Republic moved for reconsideration, arguing no delay in payment existed due to the provisional payments, making the 12% interest unwarranted. The motion was denied. The Court of Appeals affirmed the RTC’s order, prompting the Republic to file this Petition for Review on Certiorari.

ISSUE

Whether the imposition of 12% legal interest on the unpaid balance of just compensation is justified.

RULING

Yes, the imposition of 12% legal interest is justified. The constitutional mandate of “just compensation” requires payment of the full market value of the property from the time of its taking. When the government takes property before depositing compensation, legal interest accrues on the just value from the time of taking until actual payment to compensate the owner for the deprivation. The provisional payment made by the government does not excuse it from paying interest on the unpaid balance. The interest in just compensation cases is not consensual but is imposed by law due to the delay in payment, constituting a forbearance of money. Jurisprudence consistently holds that in expropriation cases where the government takes property before payment, the just compensation due includes legal interest at the rate of 12% per annum from the date of taking until June 30, 2013, and 6% per annum from July 1, 2013, until full satisfaction. In this case, the taking occurred on November 29, 2000, when the writ of possession was issued. Therefore, legal interest at 12% per annum is imposed on the unpaid balance from November 29, 2000, until June 30, 2013, and at 6% per annum from July 1, 2013, until full payment. The Court affirmed the CA Decision with modification, clarifying the applicable interest rates and periods.