G.R. No. 227960 - Republic vs. Spouses Darlucio

On November 23, 2007, the Republic of the Philippines, through the Department of Public Works and Highways (DPWH), filed a complaint for expropriation against “John Doe GGGGG” for a parcel of land located in Barangay Ugong, Valenzuela City, measuring 527 square meters, covered by TCT No. B-26619.
The expropriation was to facilitate the construction of the C-5 Northern Link Road Project, Segment 8.1, extending from Mindanao Avenue, Quezon City to the North Luzon Expressway (NLEX), Valenzuela City.
The Republic alleged the land was unoccupied without improvements and that the owner was unidentifiable despite diligent efforts. The zonal valuation was P3,450.00 per square meter, and only 413 square meters were sought for expropriation.

On September 9, 2008, the trial court issued an order of expropriation and directed the Republic to deposit P1,424,850.00 (100% of zonal valuation) with the court, which it complied with.
Subsequently, Spouses Lorenzana Juan Darlucio and Cosme Darlucio were identified and named as owner-defendants.
In their Answer, respondents consented to the public purpose but contended that just compensation should be based on the prevailing market value of similarly situated properties, which, being industrial, ranged from P10,000.00 to P15,000.00 per square meter.
The trial court formed a Board of Commissioners to determine just compensation. After reviewing evidence and conducting research, the Board recommended P15,000.00 per square meter, citing the Hobart Realty case where properties in Hobart Village—adjacent to respondents’ land—were valued at P15,000.00.
The Republic opposed, arguing the recommendation ignored property classification, physical condition, and previous expropriation valuations (P2,000.00 per square meter for 80.50 square meters previously expropriated). It also cited the alleged presence of informal settlers nearby.

By Decision dated May 16, 2014, the trial court fixed just compensation at P15,000.00 per square meter, totaling P6,195,000.00 for the 413 square meters. It ordered:

Deduction of the provisional deposit of P1,424,850.00.
Payment of 12% interest per annum on the deposit from November 23, 2007 (date of complaint) until deposit date, and 12% interest on unpaid balance until fully paid.
Payment of commissioner’s fees (Php3,000.00 each), consequential damages (Php502,500.00), and attorney’s fees (Php50,000.00).
Allocation of capital gains tax payment to respondents and transfer taxes to the Republic.

The court took judicial notice of completed C-5 Northern Link Project and recognized the property’s residential classification, flat terrain, “L”-shaped lot, and proximity to Hobart Village property.
The court found no evidence of informal settlers on or near the property.

Interest on unpaid balance was set at 12% per annum from the taking date (Nov 23, 2007) to June 30, 2013, and 6% thereafter until full payment.
Interest on the deposit and award of attorney’s fees were deleted.

It agreed that the Hobart valuation of P15,000.00 was material given the proximity.
The court held the Republic’s reliance on 2003 zonal valuation was outdated and the presence of informal settlers was unproven.
The earlier expropriation at P2,000.00 per square meter in 1997 was no longer reflective of 2007 market values.

The Republic petitioned for review, urging that the Hobart precedent should not determine just compensation due to differences in factual circumstances.
It emphasized zonal valuation, property classification, and alleged informal settlers as relevant factors reducing compensation.
Respondents maintained the trial court correctly fixed just compensation based on proximity to Hobart and current market conditions.
The Republic also contended the Board of Commissioners did not conduct an ocular inspection and depended on unverified electronic data.

Whether the Court of Appeals erred in affirming the amount of P15,000.00 per square meter as just compensation for the expropriated land.
Whether the trial court and Board of Commissioners properly considered the relevant standards enumerated under Section 5 of Republic Act No. 8974 in determining just compensation.
Whether the petition raised any question of law properly reviewable by the Supreme Court under Rule 45.
Whether Hobart Realty case valuation can be applied as precedent in the determination of just compensation for the subject property.