G.R. No. L-4918; May 14, 1954
Republic of the Philippines, plaintiff-appellant, vs. Jose Leon Gonzales, et al., defendant-appellants.

FACTS

The Republic of the Philippines initiated expropriation proceedings under Commonwealth Act No. 539 in January 1947 to acquire over 87 hectares of land within the Maysilo Estate, Caloocan, Rizal, for resale to its approximately two hundred tenants. The property, originally under Transfer Certificate of Title No. 35486, was subdivided and held under seven titles by the defendants (the Gonzales family). The defendants initially opposed but later waived objection, agreeing to the appointment of commissioners to determine the property’s reasonable market value. In June 1948, the court appointed commissioners who submitted conflicting reports: a majority report valuing the property at an average of P1.75 per square meter (dividing it into an improved portion at P5/sq.m. and an agricultural portion at P0.15/sq.m.) and a minority report valuing it at P0.10 per square meter. The Clerk of Court, after a new inspection, recommended P1.90 per square meter. On March 29, 1950, the trial court rendered a decision fixing the compensation at P1.50 per square meter. Both parties appealed: the plaintiff argued for a value based on a 1927 tax declaration (P28,850 for the entire property, suggesting an additional 30%), and the defendants sought P2.50 per square meter.

ISSUE

What constitutes the just compensation to be paid to the defendants for the expropriated property?

RULING

The Supreme Court affirmed the trial court’s valuation of P1.50 per square meter as just compensation. It rejected the plaintiff’s proposition as untenable, noting the 1927 tax declaration was obsolete and that a 1948 revised assessment valued the property much higher. It also found the defendants’ claim for P2.50 per square meter unfounded, as the comparable sales they relied upon involved properties with advantages (like subdivision improvements, highway frontage, or closer proximity to Manila) not fully shared by the subject property. The Court examined the evidence, including bona fide sales of nearby large parcels (Exhibits 3-M and 3-N) at prices from P0.85 to P1.60 per square meter in 1947, and considered the advantages of the defendants’ land (such as its topography, access via Reparo Street, and permanent improvements made by the U.S. Army on one-third of the area). It found no abuse of discretion in the trial judge’s determination. The Court modified the decision to award legal interest at six percent per annum on the compensation from January 25, 1947 (the date the government took possession) until full payment, and ordered the plaintiff to pay the costs.