Republic of the Philippines vs. Villao and Javier

Just compensation for expropriation of land for a national infrastructure project must be the full and fair equivalent of the owner's loss determined as of the filing of the complaint or taking, whichever came first, proved by evidence of value at that time and not by undated market data or wholesale adoption of another case's valuation.

The Republic, acting through the DPWH, exercised eminent domain to acquire private land for the Manila-Cavite Tollways Expressway Project, R-1 Extension Expressway, Segment 4. Pacita Villao was the registered owner of the lot to be condemned, while Carmienett Javier was impleaded as owner of improvements standing thereon. At the time expropriation was commenced, Republic Act No. 8974 governed acquisition of right-of-way for national government infrastructure projects and prescribed standards for assessment of land value.

Pacita Villao was the registered owner of a 550-square meter parcel in Barrio Binakayan, Kawit, Cavite, covered by Transfer Certificate of Title No. T-35696. On March 18, 2004, the Republic through the DPWH filed a complaint to expropriate the lot for the Manila-Cavite Tollways Expressway Project, R-1 Extension Expressway, Segment 4, later amending the complaint to implead Carmienett Javier as owner of a one-storey semi-concrete house and a one-storey wooden house built thereon.

To obtain possession, the Republic deposited with Land Bank of the Philippines, South Harbor Branch, P1,045,000.00 for the land based on the Bureau of Internal Revenue zonal valuation of P1,900.00 per square meter, plus P81,868.50 and P186,343.30 for the two houses. The Regional Trial Court of Imus issued the writ of possession in its Order dated November 25, 2004, and in its Order dated June 23, 2005 authorized Villao to withdraw P1,045,000.00 and Javier to withdraw the two improvement deposits.

Thereafter a Board of Commissioners was constituted to ascertain just compensation. In its Report submitted August 15, 2011, the Board recommended P9,000.00 per square meter as the most reasonable fair market value after considering location, neighborhood and classification, utilities and amenities, physical characteristics, occupancy and usage, and highest and best use. Using the market data approach, it noted inquiries showing mixed commercial-residential lots at P12,000.00 to P14,000.00 per square meter and listings of an 11,000-square meter lot along CEPZA Road at around P60,500.00 and a 706-square meter fishpond along Covelandia Road at around P14,200.00, but ultimately pegged compensation at P9,000.00 on the basis of the April 21, 2008 Decision of the Regional Trial Court of Dasmariñas, Branch 90 in Civil Case No. 0009-04, Republic vs. Tapawan, involving property described as residential and in the immediate vicinity and likewise affected by the same expressway project.

The trial court adopted the recommendation in its October 24, 2011 Decision, finding the standards under Republic Act No. 8974 satisfied, and fixed total compensation at P4,950,000.00. After crediting the P1,045,000.00 deposit, an additional P3,905,000.00 with 6% legal interest from taking until full payment was ordered payable to Villao through her attorney-in-fact, with annotation on the title and P10,000.00 fees to each commissioner chargeable to respondents. The Court of Appeals affirmed, crediting the commissioners' personal verification, ocular inspections, and consideration of surrounding properties and developments.

• Hearsay and Lack of Documentary Support: Petitioner argued that the Commissioners' Report was manifestly hearsay, bereft of documentary support, and should have been disregarded pursuant to National Power Corporation vs. YCLA Sugar Development Corporation and National Power Corporation vs. Diato-Bernal.
• No Bona Fide Valuation; Improper Reliance on Tapawan: Petitioner maintained that there was no bona fide valuation because the Report hinged completely on the BOC valuation in Tapawan, whose just compensation was a result of deliberation on the evidence in that case and was not intended to become precedent to be applied invariably in other expropriation cases.
• Wrong Temporal Basis — Current Offering vs. Value at Filing: Petitioner argued that the recommended compensation was based on purported current market offerings and not the price in June 2004 or at the time the complaint was filed, as required by law and jurisprudence.

• Substantiated Report, Not Hearsay: Respondents countered that the Commissioners' Report was substantiated by evidence, pointing out that the commissioners relied on documentary evidence, conducted ocular inspection of the subject property, and made verifications with the proper offices.
• Proper Consideration of Statutory Factors: Respondents argued that the commissioners correctly considered surrounding properties, character, location, identification of the neighborhood, facilities and utilities therein, and varying developments in the immediate vicinity.

• Sufficiency and Basis of Commissioners' Report: Whether the P9,000.00 per square meter valuation, derived principally from the Tapawan valuation and undocumented market data, constitutes a valid determination of just compensation.
• Reckoning Date for Just Compensation: Whether just compensation must be reckoned as of the filing of the complaint on March 18, 2004 and supported by market values as of that date.

• Sufficiency and Basis of Commissioners' Report: No. The P9,000.00 valuation lacked sufficient legal basis, having been adopted without proof that Tapawan values or cited offerings reflected 2004 fair market value and without adequate documentary support.
• Reckoning Date for Just Compensation: Yes. Just compensation must be reckoned from the March 18, 2004 filing of the original complaint, there being no showing of earlier taking, pursuant to Section 4 of Rule 67.

• Sufficiency and Basis of Commissioners' Report: Although current selling price of similar lands is a factor under Section 5 of R.A. No. 8974, the cited prices were not shown to represent 2004 market values of comparable lots. The Report failed to indicate the date of the current market offerings, so the data could not accurately gauge fair market value in 2004. Wholesale adoption of Tapawan was erroneous because that decision disclosed no filing or taking date for comparison, and reliance on another case's deliberation without the underlying evidence cannot substitute for independent valuation. The situation was controlled by National Power Corporation vs. Diato-Bernal and National Power Corporation vs. YCLA Sugar Development Corporation, where valuations were set aside for lack of documentary support and for using values prevailing years after filing.
• Reckoning Date for Just Compensation: Determination as of taking or filing, whichever came first, is mandated by Section 4 of Rule 67, applied together with R.A. No. 8974 for national infrastructure. Because no actual taking before March 18, 2004 was indicated, valuation must be fixed as of the original complaint date, not the later amended complaint, consistent with Republic vs. Castillo citing National Power Corporation vs. Tiangco. Remand was therefore ordered, with the unpaid balance to bear 12% per annum from the November 25, 2004 writ of possession until June 30, 2013, 6% from July 1, 2013 until finality of the decision fixing compensation, and 6% thereafter until full payment.

• Just compensation — Defined as the full and fair equivalent of the property taken, measured by the owner's loss rather than the taker's gain, which must be real, substantial, full, and ample. Applied to reject a speculative P9,000.00 valuation that did not establish the owner's loss as of the constitutionally and procedurally required date.
• Time of determination of just compensation under Section 4, Rule 67 — Compensation is determined as of the date of taking or filing of the complaint, whichever came first. Applied to fix the reckoning date at March 18, 2004, the filing of the original complaint, there being no earlier taking, and to require remand for valuation as of that date.
• Standards for assessment under Section 5, R.A. No. 8974 — The court may consider classification and use, developmental costs, owner's declared value, current selling price of similar lands in the vicinity, disturbance compensation and improvements, size, shape, location, tax declaration and zonal valuation, ocular and documentary evidence, and rehabilitation needs. Applied to hold that while similar sales may be considered, undated offerings and a borrowed valuation from Republic vs. Tapawan did not satisfy the statute.
• Legal interest on unpaid just compensation — The unpaid balance earns legal interest from deprivation, established from issuance of the writ of possession, at 12% per annum until June 30, 2013 and 6% thereafter until finality of the fixing decision, then 6% until full payment. Applied to direct that interest scheme on the difference between the amount to be fixed on remand and the P1,045,000.00 initial payment.

• "Just compensation has been defined as the full and fair equivalent of the property taken from its owner by the expropriator. The measure is not the taker's gain, but the owner's loss. The word 'just' is used to intensify the meaning of the word 'compensation' and to convey thereby the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, and ample." — States the canonical definition of just compensation that frames the requirement of real and ample equivalence for the owner's loss.
• "Private property shall not be taken for public use without just compensation." — Recites the constitutional eminent-domain guarantee under Article III, Section 9 that controls the entire expropriation analysis.
• "not from the date of the filing of the complaint but from the date of the issuance of the Writ of Possession, since it is from this date that the fact of the deprivation of property can be established." — Defines the starting point for legal interest on the unpaid balance, adopted from Republic vs. Macabagdal.

• National Power Corporation vs. Diato-Bernal, 653 Phil. 345 (2010) — Followed as controlling; valuation set aside where commissioners' report lacked documentary support and used 1999 values though complaint was filed in 1997.
• National Power Corporation vs. YCLA Sugar Development Corporation, 723 Phil. 616 (2013) — Followed as controlling; valuations using 2001 and 2003 values for a 1997 filing were rejected for not being gauged as of filing.
• Republic vs. Macabagdal, 823 Phil. 477 (2018) — Followed on interest; legal interest runs from issuance of writ of possession when deprivation is established.
• Republic vs. Castillo, G.R. No. 190453, February 26, 2020, citing National Power Corporation vs. Tiangco, 543 Phil. 637 (2007) — Followed to reckon compensation from original rather than amended complaint absent earlier taking.
• National Power Corporation vs. Posada, 755 Phil. 613 (2015) — Cited for the proposition that Rule 67 and R.A. No. 8974 govern expropriation for national infrastructure projects.
• Republic vs. Heirs of Spouses Valentina Juan Bonifacio and Aurelio Bonifacio, G.R. No. 226734, May 10, 2021; Evergreen Manufacturing Corporation vs. Republic, 817 Phil. 1048 (2018); Felisa Agricultural Corporation vs. National Transmission Corporation, 834 Phil. 861 (2018); National Power Corporation vs. Heirs of Ramoran, 787 Phil. 77 (2016); Republic vs. Heirs of Andres Francisco, G.R. No. 244115, February 3, 2021 — Cited on imposition and computation of legal interest on just compensation, including remand cases.

• Article III, Section 9, Constitution — Provides no taking of private property for public use without just compensation; applied as the constitutional basis for requiring full and fair equivalence.
• Section 4, Rule 67, Rules of Court — Provides that just compensation is determined as of taking or filing of complaint, whichever came first; applied to set March 18, 2004 as reckoning date.
• Section 5, R.A. No. 8974 — Enumerates standards for assessment including classification and use, developmental costs, declared value, current selling price of similar lands, disturbance and improvement values, size, shape, location, tax declaration, zonal valuation, ocular and documentary evidence, and rehabilitation; applied to test the sufficiency of the Board's valuation.
• R.A. No. 8974; R.A. No. 10752 — R.A. No. 8974, to facilitate acquisition of right-of-way for national infrastructure, governed the proceedings commenced in 2004; R.A. No. 10752, the Right-of-Way Act, later repealed it.

Hernando, J., Acting Chairperson, Zalameda, J., and Marquez, J., concur.