Title
Republic, Represented by the Toll Regulatory Board vs. Spouses Roberto and Rosemarie Roxas and Export and Industry Bank
Case
G.R. No. 253069
Decision Date
Jun 26, 2023
Case involves expropriation of land by TRB for the SLTE project; Ruling upheld RTC’s compensation for Roxas spouses at PHP 1,019,300.00.
expropriation
just compensation
eminent domain

Case Summary (G.R. No. 253069)

Nature of the Petition and Decisions Reviewed

The TRB assailed the Decision dated May 23, 2019 and the Resolution dated June 30, 2020 of the Court of Appeals (CA) in CA-G.R. CV No. 108464, which affirmed with modification the RTC’s Decision dated December 7, 2015. The RTC had ordered the payment of just compensation of PHP 213,300.00 (at PHP 2,700.00 per sqm) for the expropriated land, plus PHP 806,000.00 for improvements, for a total of PHP 1,019,300.00, and it also ordered payment of legal interest and certain commissioner’s fees. The CA modified the RTC decision by deleting the directive for the Republic to pay commissioner’s fees, citing procedural rules exempting the Republic in expropriation proceedings.

Factual Background: The Expropriation and the Property

The TRB filed the expropriation complaint on August 3, 2005. In the course of implementing the SLTE Project, the government sought to expropriate a seventy-nine (79) square meter parcel of land in Barangay San Rafael, Sto. Tomas, Batangas. The property was covered by TCT No. T-49561 with a zonal value of PHP 475.00 per sqm, and it was owned by the spouses Roxas along with an improvement thereon, estimated at PHP 463,600.18.

The title carried an annotation of a mortgage in favor of Export and Industry Bank in the amount of PHP 47,250.00. The government alleged that the property was indispensable to implement the SLTE Project and that it was selected using a method intended to serve the greatest public good with the least injury to private property.

Respondents’ Answer and Prayer

In their Answer, the respondents did not challenge the government’s right to expropriate the land. However, they denied the existence of the mortgage executed in favor of Export and Industry Bank. They further claimed that the market value of the land was PHP 3,500.00 per sqm and that the improvement was valued at PHP 1,500,000.00. They thus requested, among others, payment of just compensation under Section 4(a) of R.A. No. 8974, the determination of PHP 3,500.00 per sqm as just compensation, and payment of the difference after deducting amounts already paid.

RTC Proceedings: Order of Expropriation, Deposit, and Writ of Possession

Upon motion of the petitioner, the RTC issued an Order of expropriation and appointed multiple commissioners, namely the Register of Deeds of Tanauan City (Atty. Abraham N. Vermudez), the Municipal Assessor (Municipal Assessor Ester Francisco), and the Municipal Engineer (Nolando B. Sanchez) to aid the court in ascertaining just compensation.

On September 7, 2007, the petitioner deposited with the Clerk of Court a DBP Manager’s Check dated August 15, 2007, for PHP 501,125.18, representing one hundred percent (100%) of the zonal value of the property and the value of the house, to allow withdrawal by the spouses Roxas. The RTC later issued a Writ of Possession on September 24, 2007.

Commissioners’ Recommendations and the Basis Used

The commissioners recommended that just compensation for the land be set at PHP 3,500.00 per sqm (or PHP 1,500,000.00 for the land) plus an additional PHP 806,000.00 for the reproduction cost of the improvements, and other related expenses including miscellaneous expenses, disturbance compensation, attorney’s fees, and appraiser’s fees. The commissioners’ recommendation relied significantly on a certificate from the punong barangay that reflected a range of current selling prices of PHP 3,500.00 to PHP 4,000.00, supported further by a deed of sale showing a selling price four years earlier at PHP 2,600.00 per sqm, and by the appraised value from an independent appraisal which placed the land at PHP 3,500.00 per sqm. The commissioners also referenced the property’s proximity to the industrial park and its access via the national road toward Manila.

As to improvements, the independent appraiser’s report identified reproduction cost and related costs for building a similar structure, including disturbance compensation, attorney’s fees, and appraiser’s fees.

RTC’s Evaluation of Evidence and Determination of Just Compensation

The petitioner opposed the commissioners’ recommendation, arguing that it was grounded on the personal opinion of the punong barangay and on an independent appraiser. The RTC then conducted hearings and received testimony from Engr. Allan Plete of the South Luzon Tollway Corporation as an expert. He testified that the property sat in a low-cost housing subdivision for low to middle income families, and that the market value ranged from PHP 1,300.00 to PHP 1,500.00 per sqm.

In its Decision dated December 7, 2015, the RTC set the just compensation for the land at PHP 2,700.00 per sqm, totaling PHP 213,300.00, and set the cost of improvements at PHP 806,000.00, producing a total award of PHP 1,019,300.00. The RTC ordered the petitioner to pay the spouses Roxas the balance of the total just compensation after deducting the initial deposit of PHP 501,125.18, or PHP 518,174.82, plus legal interest from the filing of the complaint on August 3, 2005 until full payment. The RTC also ordered payment of commissioner’s fees to the appointed commissioners.

In arriving at these amounts, the RTC explained that it could not adopt the commissioners’ recommendation for the land because it found insufficient supporting evidence, aside from the punong barangay’s certification. The RTC nevertheless found that the land was classified and actually used for residential purposes and had access to social institutions and basic amenities, while also being proximate to an established industrial zone. It therefore relied on a provincial appraisal committee valuation approximating the 2006 value at PHP 2,700.00 per sqm, and on a 2003 sale transaction within the same area with a selling price of PHP 2,616.00 per sqm, which the RTC considered as the transactions nearest to the 2005 date of taking. It added that it took into account natural appreciation, the land’s location, and the area’s course of development.

For improvements, the RTC found the amount of PHP 806,000.00 proper and reasonable as reproduction cost based on the testimony and knowledge of the municipal engineer commissioner, who assessed prevailing construction materials and costs and the make-up of the building to be replaced.

CA Ruling: Affirmation with Modification on Commissioner’s Fees

On appeal, the CA in its Decision dated May 23, 2019 affirmed the RTC’s determination of just compensation with modification. It deleted the RTC’s directive ordering the Republic to pay commissioner’s fees. The CA cited Rule 141, Section 22 of the Rules of Court, which exempts the Republic and its agencies and instrumentalities from paying commissioner’s fees in expropriation proceedings.

On the substantive issue, the CA held that the RTC’s valuation approach was not erroneous despite the RTC’s consideration of several factors beyond those specifically enumerated in R.A. No. 8974, including: the property’s classification and suited use; the current selling price of similar lands in the vicinity; the size, shape, location, tax declaration, and zonal valuation; documented manifestations of price; and reasonable disturbance compensation for the improvement. The CA reasoned that while R.A. No. 8974 provides relevant standards, the court retains the power to judicially determine just compensation. It also referred to Rule 67, Section 8 of the Rules of Court, which authorizes the RTC, after hearing, to accept the commissioner’s report and render judgment accordingly. The CA further emphasized that commissioner recommendations carry due weight, and that zonal valuation is only one index of fair market value and cannot serve as the sole basis for just compensation. It likewise affirmed that just compensation, being a forbearance of money, should earn interest.

Issues Raised in the Supreme Court

The Supreme Court was tasked with resolving whether the CA erred in affirming the amount of just compensation fixed by the trial court and in imposing legal interest thereon. The petition argued that the RTC’s valuation was flawed, and that certain documents relied upon were not reliable and other valuation factors should have led to a lower just compensation.

Parties’ Contentions in the Supreme Court

The TRB contended that the RTC did not judiciously determine just compensation for the land. It argued that the Provincial Appraisal Committee Resolution (PAC Resolution) No. 02-2001 and the Deed of Absolute Sale dated September 13, 2003 could not support a valuation of PHP 2,700.00 per sqm, and it raised several specific objections. It claimed the PAC Resolution lacked evidentiary basis beyond general conclusions. It argued that the deed of absolute sale was executed four years before the expropriation case and thus did not reflect the real value at the relevant time. It further asserted that the RTC’s finding that the land was near industrial and residential properties was speculative because it failed to identify which industrial and residential properties were referenced. It also challenged the RTC’s conclusion that the land’s value increased over time.

The petitioner also assailed the valuation of the improvement, contending that a certification issued by Engr. Sanchez was unsubstantiated and uncorroborated, and it maintained that the land value should not exceed PHP 1,500.00 per sqm based on the testimony of Engr. Plete, previous transactions affected by the SLTE Project, the BIR zonal value, and tax declarations. It further asserted that the improvement value should reflect the total replacement cost of PHP 463,600.18, taking into account current market prices and related construction and contractor costs.

Governing Standards: Just Compensation Under Eminent Domain and R.A. No. 8974

The Court reiterated that under the power of eminent domain, the owner may not be deprived of property without payment of just compensation. It quoted its definition in Republic v. Spouses Bunsay, describing just co

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