G.R. No. 222551 - Republic vs. Spouses Goloyuco

Case Summary (G.R. No. 222551)

Factual Background

The subject is a 50-square meter parcel in Barangay Ugong, Valenzuela City, sought to be expropriated for the C-5 Northern Link Road Project. Petitioner filed the expropriation complaint on December 7, 2007 and later sought a writ of possession. The trial court ordered payment of a provisional amount based on zonal valuation, and the spouses received DBP Manager’s Check No. 615039 dated September 16, 2008 in the amount of P137,500.00. The trial court issued the writ of possession on September 24, 2008 and then proceeded to the determination of just compensation through appointed commissioners. One commissioner recommended P12,250.00 per sq m while two others recommended P10,000.00 per sq m as the fair market value.

RTC Ruling

The Regional Trial Court found the lot to be residential per BIR classification with a zonal valuation of P2,750.00 per sq m but, after considering the property’s shape, terrain, locality, and comparable expropriation awards in related cases, fixed just compensation at P8,300.00 per sq m, for a total of P415,000.00. The trial court deducted the provisional deposit of P137,500.00 and ordered payment of interest at 12% per annum on the unpaid balance of P277,500.00 from the time of taking until full payment. The trial court apportioned taxes and costs for transfer accordingly.

Court of Appeals Ruling

The Court of Appeals affirmed the RTC decision with modification limited to the computation of interest. The CA held that the RTC did not rely solely on the commissioners’ reports but made an independent assessment guided by the standards under Section 5 of R.A. No. 8974, including zonal valuation, comparable expropriation awards, location, shape, and use. The CA ordered that legal interest run at 12% per annum from December 7, 2007 until June 30, 2013 and at 6% per annum thereafter pursuant to BSP Circular No. 799.

Issues Presented and Parties’ Contentions

Petitioner argued that the BIR zonal valuation of P2,750.00 per sq m should govern and that reliance on higher market valuations produced unfair results and possible unjust enrichment of the landowners, given lower taxes historically paid. Petitioner contended the zonal valuation is essentially reflective of fair market value for expropriation purposes. The spouses Goloyuco countered that prevailing selling prices and comparable sales in the vicinity supported a market value substantially higher than the zonal valuation, that commissioners’ reports recommended P10,000.00 to P12,250.00 per sq m, and that the appraisal for expropriation must consider location, accessibility, and comparable sales, not zonal valuation alone.

Standard of Review and Scope of Review

The Supreme Court reiterated that under Rule 45 only questions of law are proper in a petition for review on certiorari and that factual findings of lower courts are generally not disturbed. The Court observed that petitioner did not allege or prove exceptional circumstances sufficient to warrant overturning the factual determinations regarding valuation. Thus the Court confined its review to legal issues and the proper application of established standards for just compensation.

Legal Basis for Valuation

The Court explained the nature of just compensation as the full and fair equivalent of the property taken and recited the standards enumerated in Section 5 of R.A. No. 8974. The Court held that zonal valuation is only one of several factors and cannot alone determine just compensation. The Court relied on precedent to distinguish a provisional deposit based on zonal value from the final determination of just compensation, citing Capitol Steel Corporation v. PHIVIDEC Industrial Authority for the proposition that the provisional payment required for a writ of possession serves a distinct, preliminary purpose and may not equal prevailing fair market value.

Interest and Its Computation

The Court accepted that delay in payment of just compensation warrants interest as forbearance of money. It adopted the CA’s use of 12% per annum up to the effective date of BSP Circular No. 799 and 6% per annum thereafter, but modified the reckoning of the 12% period. The Court held that legal interest at 12% shall accrue on the unpaid difference between the final adjudged amount (P415,000.00) and the provisional deposit (P137,500.00) from the date of payment of the initial deposit, that is, September 24, 2008, until June 30, 2013. From July 1, 2013 until finality of the decision the difference shall earn 6% per annum. Thereafter the total amount of just compensation, inclusive of accrued interest and the unpaid principal, shall earn 6% per annum from finality until full payment.

Supreme Court Disposition and Reasoning

The Supreme Court denied the petition for

Case Syllabus (G.R. No. 222551)

Parties and Procedural Posture

Republic of the Philippines, as represented by the Department of Public Works and Highways filed a complaint for expropriation before the Regional Trial Court, Valenzuela City, Branch 172, against Spouses Pedro and Zenaida Goloyuco.
The subject property comprised a fifty square meter lot in Barangay Ugong, Valenzuela City sought for the C-5 Northern Link Road Project.
The trial court issued a writ of possession after petitioner deposited a provisional payment based on zonal valuation, and thereafter conducted the second stage proceedings to determine just compensation.
Spouses Pedro and Zenaida Goloyuco received DBP Manager’s Check No. 615039 dated September 16, 2008 in the amount of P137,500.00 as the provisional deposit.
Petitioner appealed the trial court decision to the Court of Appeals, which affirmed with modification, and the petitioner sought review by this Court under Rule 45, Rules of Court.

Key Facts

The lot subject of expropriation measured fifty square meters and was described as rectangular with generally flat terrain within the vicinity of residential and some industrial properties.
The Bureau of Internal Revenue zonal valuation for the property was P2,750.00 per square meter and the property was classified residential by the BIR.
Three commissioners reported differing recommendations for fair market value, namely P12,250.00 per square meter from one commissioner and P10,000.00 per square meter from two commissioners.
The trial court considered prior expropriation awards involving adjacent or nearby parcels in the same project, including the cases of Mapalad, Hobart, Garcia, and Liao Chin Guat Balisbis and Edna Lim.
The trial court fixed just compensation at P8,300.00 per square meter for a total adjudged amount of P415,000.00 and ordered interest at 12% per annum on the unpaid balance.

Trial Court Ruling

The trial court found the subject lot residential in classification and observed its location in an area with both residential and industrial uses.
The trial court relied on the commissioners’ reports, BIR zonal valuation, comparable expropriation awards, and the lot’s physical characteristics in independently assessing the fair market value.
The trial court adjudged just compensation at P8,300.00 per square meter for a total of P415,000.00 and ordered the Republic to pay interest at 12% per annum on the unpaid balance from the time of taking.
The trial court directed appropriations for taxes and expenses incident to transfer and ordered annotation of the decision on the Transfer Certificate of Title.

Court of Appeals Ruling

The Court of Appeals affirmed the trial court’s valuation of P8,300.00 per square meter but modified the period for legal interest.
The Court of Appeals held that the trial court made an independent assessment and properly considered the factors enumerated under Section 5 of R.A. No. 8974.
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