Case Digest (G.R. No. 204530)
Facts:
The Republic of the Philippines, represented by the Department of Public Works and Highways, filed on September 15, 1999 a complaint for expropriation of portions of parcels of land owned by Potenciano A. Larrazabal, Sr., Victoria Larrazabal Locsin, and Betty Larrazabal Macatual to implement a Malbasag River flood mitigation project in Ormoc City. The RTC of Ormoc City, Branch 12 fixed just compensation based on the commissioners’ report: P10,000.00 per square meter for Potenciano’s property, P4,000.00 per square meter for Victoria’s property, and P4,000.00 per square meter for Betty’s property, plus interest, and the CA affirmed.
After the RTC’s valuation was anchored mainly on comparative sales made on November 14, 1997, December 28, 1995, and July 10, 2000, the petitioner sought review, insisting that Republic Act (RA) No. 8974 and its implementing rules should govern the determination of just compensation. The Supreme Court granted the petition in part, but remanded for proper determination.
Issues:
- Whether RA No. 8974 applies to the determination of just compensation when the expropriation complaint was filed on September 15, 1999.
- Whether the CA correctly affirmed the RTC’s determination of just compensation.
Ruling:
The Court held that RA No. 8974 applies only prospectively and therefore was not applicable because the complaint was filed before its effectivity on November 26, 2000.
However, the Court found reversible error in the RTC and CA valuation. It ruled that the RTC relied on sales not properly anchored to the time of taking and failed to consider required valuation factors, prompting the Court to set aside the CA and RTC decisions and remand the case to the RTC for the proper determination of just compensation.
Ratio:
The Court reiterated its ruling in Spouses Arrastia v. National Power Corporation that RA No. 8974 cannot be applied retroactively absent clear legislative intent, and thus the standards under RA 8974 were inapplicable when the complaint was filed on September 15, 1999.
As to the amount, the Court held that just compensation should be ascertained as of the time of taking, which in cases where the action precedes entry usually coincides with the filing of the complaint. The RTC’s reliance on comparative sales made in 1995 and 1997, and its partial reliance on a sale in 2000, was improper for determining compensation as of September 15, 1999. Further, the RTC’s determination was deemed arbitrary because it failed to consider and explain valuation factors such as acquisition cost, current market value of like properties, tax value, and the properties’ size, shape, and location, and because resolution-based appraisal standards cannot substitute for the judicial determination of just compensation supported by reliable evidence.
Doctrine:
- RA No. 8974 applies prospectively only and cannot govern just compensation when the expropriation complaint was filed before its effectivity.
- (Get Pro to unlock 7 more doctrines)