Title
Republic vs. Barcelon
Case
G.R. No. 226021
Decision Date
Jul 24, 2019
DPWH expropriated a 52-sqm property for a road project; RTC fixed just compensation at P9,000/sqm, upheld by SC, with adjusted interest on unpaid balance.

Case Digest (G.R. No. 160827)

Facts:

  • Expropriation Complaint and Subject Property
    • On February 8, 2008, the Republic of the Philippines, represented by the Department of Public Works and Highways (DPWH), filed a complaint for expropriation before the Regional Trial Court (RTC) of Valenzuela, Branch 172.
    • The expropriation was for a parcel of land with its improvements owned by Gilda A. Barcelon, Harold A. Barcelon, and Hazel A. Barcelon, intended for the construction of the C-5 Northern Link Road Project (Segment 8.1).
    • The subject property is located in Barangay Ugong, Valenzuela City and is covered by Transfer Certificate of Title No. V-75179, with:
      • An area of 52 square meters.
      • A BIR zonal value of ₱2,750 per square meter.
      • A one-storey residential house improvement valued at ₱288,418.54.
  • Payment, Possession, and RTC Proceedings
    • A Development Bank of the Philippines (DBP) manager’s check dated November 20, 2008, in the amount of ₱413,418.54 was deposited and received by the respondents on November 21, 2008.
    • The RTC issued a writ of possession on December 2, 2008, despite the payment being short of ₱18,000 needed to meet 100% of the zonal value.
    • Upon the respondents’ motion, the RTC ordered the release of the ₱18,000 balance on March 9, 2010.
    • Pursuant to Section 5, Rule 67 of the Rules of Court, the RTC constituted a Board of Commissioners composed of:
      • Osita F. De Guzman, RTC, Branch 172, Branch Clerk of Court.
      • Atty. Ard Henry Binwag, City Assessor.
      • Atty. Engr. Pilar Morales.
  • Valuation Determination and Evidence Submitted
    • Before the Board of Commissioners, the petitioner (government) emphasized the BIR zonal valuation of ₱2,750 per square meter and claimed that the area was plagued by informal settlers, poor drainage, and lack of distinct vehicular pathways.
    • The respondents argued that the fair market value of the property should be within the range of ₱10,000 to ₱15,000 per square meter based on:
      • The prevailing market conditions.
      • The property's location in a high-intensity commercial zone.
    • After hearings and submission of position papers, the Board recommended:
      • ₱10,000 per square meter as just compensation for the land.
      • ₱288,418.54 as just compensation for the improvement.
  • RTC Decision and Subsequent Proceedings
    • On December 12, 2013, the RTC fixed the just compensation for the 52-square meter lot at:
      • ₱9,000 per square meter, amounting to ₱468,000 in total.
      • It authorized payment after deducting previous deposits and imposed interest on both the deposit and the unpaid balance.
      • It ruled that, due to respondents’ failure to substantiate replacement cost claims, no additional award was made for the improvements.
    • The petitioner questioned the computation, specifically the amount fixed as just compensation and the method of determining interest.
    • The petitioner appealed to the Court of Appeals (CA), challenging:
      • The reliance of the valuation on the distance from comparable properties (Hobart Realty and Spouses Serrano cases).
      • The purportedity of considering only the zonal value in the absence of sufficient evidence regarding the condition of the property and presence of informal settlers.
  • Court of Appeals (CA) Ruling and Further Developments
    • The CA found that:
      • The RTC’s determination of ₱9,000 per square meter was judicious, having taken into account the Board of Commissioners’ findings, the proper indices of market value, and evidence from comparable cases.
      • There was no proof to support the petitioner’s claim regarding the property being in an area infested with informal settlers.
      • Zonal valuation is merely one index among several factors in determining fair market value.
    • The CA modified the interest computation:
      • Interest on the deposit (₱143,000) was deleted.
      • The remaining balance (₱325,000) would earn:
        • 12% per annum from the filing of the complaint until June 30, 2013.
        • 6% per annum from July 1, 2013, until full payment.
    • Petitioner’s motion for reconsideration was denied in the CA’s July 21, 2016 Resolution.
  • Petitioner’s Substantive Argument on Just Compensation
    • The petitioner maintained that:
      • The RTC and CA erroneously relied primarily on the distance between the subject property and comparable properties.
      • The actual use, classification, size, area, and condition of the property were overlooked.
      • Since the property was close to areas inhabited by informal settlers, the just compensation should not exceed the zonal value.
    • The petitioner sought a reassessment of the methodological approach used in determining just compensation.

Issues:

  • Whether the CA erred in sustaining the RTC’s determination of just compensation at ₱9,000 per square meter.
    • Did the valuation properly consider all relevant factors including market value indices, property location, and comparable evidence?
  • Whether the CA correctly applied the legal standard in dismissing the petitioner’s reliance on zonal valuation as the sole basis for determining just compensation.
  • Whether the imposition and computation of legal interest on both the deposit and the remaining balance were proper.
    • Specifically, whether interest should be imposed on the initial deposit given there was no delay.
    • Whether the starting point for computing interest on the remaining balance should be the date of the filing of the complaint or the issuance of the writ of possession.
  • Whether the overall process of determining the just compensation and awarding interest adhered to established legal and doctrinal standards.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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