Title
Republic vs. Sinense
Case
G.R. No. 240957
Decision Date
Feb 14, 2022
The Philippines expropriated land for a flood control project, with disputes over just compensation. Courts upheld P1.92B, including damages, with interest, based on multiple valuation factors.
expropriation
just compensation
interest rates
A

Case Summary (G.R. No. 240957)

Factual Background

REPUBLIC OF THE PHILIPPINES filed an amended complaint for expropriation seeking to acquire eleven parcels totaling 84,925 square meters, with improvements valued at P35,448,599.55, located in Barangays Balabago and Buhang, Jaro, Iloilo City, to construct the Iloilo Flood Control Project II and the Jaro Floodway. The subject parcels were registered in the names of the respondents and others, and formed part of the Jaro Grand Estates development. The RTC issued a Writ of Possession after the Republic deposited P188,313,599.55 based on BIR zonal valuation and provisional valuation of affected improvements. The RTC appointed a three‑member BOC, which conducted ocular inspection and hearings, and initially recommended P1,920,374,374.00 as just compensation in its August 29, 2007 Report and reaffirmed that amount in a revised Report dated April 19, 2011. The BOC based its valuation on factors including comparable selling prices in the vicinity, the highest and best use of the properties as residential and commercial, accessibility, and the Project’s consequential damages to the integrated township plan. The Republic objected and maintained the BIR zonal valuation of P1,800.00 per square meter as the appropriate basis; respondents PACIFIC REHOUSE CORPORATION and PHILIPPINE ESTATES CORPORATION claimed P2,598,661,687.00 as just compensation. The RTC found that respondents Sinense and Diana had already sold their affected properties to PRC and PEC.

Trial Court Proceedings

The RTC, by Decision dated November 13, 2012, accepted and adopted the BOC’s Report and ordered the Republic to pay P1,920,374,373.00 as just compensation, noting a minor numerical discrepancy in the commissioners’ figures. The RTC explained that the BOC’s valuation was supported by testimony of experts, ocular inspection, documentary evidence, and the established status of the properties as part of a planned township with existing subdivisions and improvements; the court therefore found no cogent reason to set aside the Report. On May 22, 2013, the RTC denied the parties’ motions for reconsideration but modified the decision by deleting the payment of value‑added tax.

Court of Appeals Ruling

The CA, in its December 18, 2017 Decision, affirmed the RTC’s acceptance of the BOC’s recommendation and the award of consequential damages. The CA held that while the RTC was not bound by the BOC, the court properly adopted the Report because the commissioners applied the standards under RA 8974, conducted hearings, examined witnesses and evidence, and performed an ocular inspection. The CA emphasized that the Republic failed to proffer a detailed computation or factors to rebut the BOC’s valuation and reiterated that zonal valuation alone cannot constitute the sole basis of just compensation. The CA also imposed interest at 12% per annum from the taking of the properties until June 30, 2013, and 6% per annum thereafter until full payment pursuant to BSP Circular No. 799, Series of 2013. The CA denied motions for reconsideration on July 23, 2018.

Issue before the Supreme Court

The sole issue presented by the Republic was whether the CA erred in fixing just compensation in the aggregate amount of P1,920,374,373.00 by allocating P791,689,947.00 for 99,866 square meters of land and P1,128,684,426.00 for improvements, opportunity losses, VAT, and consequential damages, instead of limiting compensation to the BIR zonal valuation of P1,800.00 per square meter. The Republic argued that the BOC’s Report was speculative, based on unsubstantiated evidence, and that the RTC and CA failed to consider pertinent factors required for ascertaining just compensation.

The Court’s Disposition

The Supreme Court denied the petition for review and affirmed the CA Decision with a modification concerning post‑finality interest. The Court upheld the total just compensation of P1,920,374,374.00 and affirmed the imposition of legal interest at 12% per annum from the taking of the properties until June 30, 2013, and 6% per annum from July 1, 2013 until the finality of the decision, in accordance with BSP Circular No. 799, Series of 2013; the Court further ordered that the total amount due shall earn legal interest at 6% per annum from the finality of the decision until full payment.

Legal Basis and Reasoning

The Court explained that challenges to the quantum of just compensation principally raise questions of fact, which ordinarily are beyond the scope of a petition under Rule 45 of the Rules of Court, and may not be reviewed absent a showing that the case falls within the limited exceptions permitting factual re‑examination. The Court reiterated that appointment of commissioners to determine just compensation is mandatory and that the BOC’s findings carry great weight; the BOC’s report may be set aside only if the commissioners applied illegal principles, disregarded a clear preponderance of evidence, or the award was grossly inadequate or excessive. The Court found that the BOC’s valuation conformed to the standards enumerated in Section 5 of RA 8974, including consideration of classification and use, comparable selling prices, size and location, improvements, and factors necessary to enable owners to rehabilitate by acquiring similarly situated lands. The BOC had co

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