G.R. No. 253069, June 26, 2023
Republic of the Philippines, represented by the Toll Regulatory Board (TRB), Petitioner, vs. Spouses Roberto and Rosemarie Roxas and Export and Industry Bank

FACTS

This case originated from a Complaint for expropriation filed on August 3, 2005 by the Republic, through the Toll Regulatory Board (TRB), to implement the South Luzon Tollway Extension Project. The property sought to be expropriated was a 79-sqm parcel of land in Sto. Tomas, Batangas, covered by TCT No. T-49561, owned by respondents Spouses Roberto and Rosemarie Roxas, with an improvement thereon. The property had a zonal value of PHP 475.00 per sqm, and the improvement was estimated at PHP 463,600.18. The title bore a mortgage annotation in favor of Export and Industry Bank. The spouses did not dispute the government’s right to expropriate but claimed the market value of the land was PHP 3,500.00 per sqm and the improvement was valued at PHP 1,500,000.00. The RTC issued an Order of expropriation and appointed commissioners. Petitioner deposited PHP 501,125.18 (representing 100% of the zonal value and the value of the house), and a Writ of Possession was issued. The commissioners recommended just compensation at PHP 3,500.00 per sqm for the land (PHP 276,500.00 total) plus PHP 806,000.00 for the improvement. The RTC, in its Decision dated December 7, 2015, fixed just compensation at PHP 2,700.00 per sqm for the land (PHP 213,300.00 total) plus PHP 806,000.00 for the improvement, for an aggregate of PHP 1,019,300.00. It ordered petitioner to pay the balance after deducting the initial deposit, plus legal interest from the filing of the complaint, and to pay commissioners’ fees. The CA, in its Decision dated May 23, 2019, affirmed the RTC’s determination of just compensation but deleted the order for petitioner to pay commissioners’ fees, citing the exemption of the Republic under Rule 141, Section 22 of the Rules of Court. Petitioner’s motion for reconsideration was denied.

ISSUE

Whether the Court of Appeals erred in affirming the amount of just compensation granted by the trial court and the imposition of legal interest thereon.

RULING

The Petition is partly meritorious. The Supreme Court modified the CA decision regarding the imposition of interest. The Court upheld the determination of just compensation by the RTC, as affirmed by the CA, at PHP 213,300.00 for the land (PHP 2,700.00 per sqm) and PHP 806,000.00 for the improvements, totaling PHP 1,019,300.00. The Court found that the RTC correctly considered various factors under Section 5 of Republic Act No. 8974 and relevant jurisprudence, such as the property’s classification and use, current selling prices of similar lands, and the reproduction cost of improvements, rather than relying solely on zonal valuation. However, the Court modified the imposition of interest. It ruled that legal interest should be imposed only on the unpaid balance of the just compensation. Since petitioner made an initial deposit of PHP 501,125.18, interest should run only on the unpaid balance of PHP 518,174.82. Furthermore, the interest rate should be 12% per annum from the date of taking (August 3, 2005, the filing of the complaint) until June 30, 2013, and 6% per annum from July 1, 2013, until full payment. The total just compensation of PHP 1,019,300.00 shall earn 6% interest per annum from the finality of the Supreme Court’s decision until full payment. The Court affirmed the CA’s deletion of the commissioners’ fees.