Republic v. Manotok Estate Corp.

THIRD DIVISION

[G.R. No. 214221. September 29, 2021.]

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE TOLL REGULATORY BOARD, petitioner, vs.MANOTOK ESTATE CORPORATION, MANOTOK REALTY, INCORPORATED, PHIL-VILLE DEVELOPMENT AND HOUSING CORPORATION, FRANCISCO GUY CO CHIA, JAIME C. CASTILLO, AND CLT REALTY DEVELOPMENT CORPORATION, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution datedSeptember 29, 2021, which reads as follows:

"G.R. No. 214221 (Republic of the Philippines, represented by the Toll Regulatory Board v. Manotok Estate Corporation, Manotok Realty, Incorporated, Phil-Ville Development and Housing Corporation, Francisco Guy Co Chia, Jaime C. Castillo, and CLT Realty Development Corporation). — This resolves the petition for review on certiorari1 under Rule 45 of the Rules of Court, assailing the Decision 2 dated March 6, 2013 and Resolution 3 dated September 9, 2014 of the Court of Appeals (CA) in CA-G.R. CV No. 93419.

The Antecedents

On August 23, 2001, the Republic of the Philippines (Republic), represented by the Toll Regulatory Board (TRB), filed a complaint for expropriation with the Regional Trial Court (RTC) of Caloocan City, seeking to expropriate lands for the rehabilitation and expansion of the North Luzon Expressway (NLEX). 4

Respondents Manotok Estate Corporation (Manotok Estate), Manotok Realty, Incorporated (Manotok Realty), Phil-Ville Development and Housing Corporation (Phil-Ville), Francisco Guy Co Chia (Chia), and Jaime C. Castillo (Castillo), are the registered owners of the properties sought to be expropriated (subject properties). 5

CLT Realty was impleaded because it was involved in two cases against Manotok Realty and Phil-Ville concerning the ownership of certain portions of the subject properties. 6

The Republic subsequently amended its complaint to reflect the zonal value of the subject properties, which was set at Php900.00 per square meter. This amount was based on the zonal valuation of the properties in the locality pursuant to Department Order No. 8-97 dated October 31, 1996 issued by the Bureau of Internal Revenue (BIR). 7 CAIHTE

On March 28, 2002, the RTC issued a writ of possession after the Republic deposited with the Land Bank of the Philippines an amount equal to the zonal value of the subject properties. 8

The RTC subsequently issued an Order of Expropriation dated July 29, 2002 vis-à-vis the properties of Manotok Estate and Manotok Realty. The trial court also appointed three commissioners to determine just compensation for the subject properties. 9

A year later, the trial court issued another Order of Expropriation dated July 29, 2003, this time covering the properties of Phil-Ville, Chia, and Castillo. 10

Trial on the amount of just compensation ensued.

In a Decision 11 dated April 30, 2008, the RTC ruled in favor of respondents. The RTC gave credence to the valuation of respondents' expert witness, Engr. Victor Salinas, Jr. (Engr. Salinas), whom the trial court found to be a credible witness. Consequently, the RTC fixed the amount of just compensation at Php7,500.00 per square meter as recommended by Engr. Salinas. The dispositive portion of the RTC Decision reads:

WHEREFORE, premises considered, the Court accordingly determines the just compensation to be paid by plaintiff to be Php7,500.00 per square meter.

SO ORDERED. 12

The Republic filed a motion for reconsideration but it was denied by the trial court in an Order 13 dated October 22, 2008 for lack of merit.

Undeterred, the Republic appealed the case to the CA.

However, in a Decision 14 dated March 6, 2013, the CA affirmed the RTC in full. The CA found that the Republic's proposed valuation of Php900.00 per square meter did not reflect the value of the subject properties on August 23, 2001, the date when the expropriation case was filed. According to the CA, the documentary evidence adduced by the Republic were all obsolete. The appellate court also agreed with the RTC that the recommendation of Engr. Salinas was more in accord with the fair market value of the subject properties in 2001. The dispositive portion of the CA Decision reads:

WHEREFORE, the appeal is DENIED and the Decision dated April 30, 2008 and the Order dated October 22, 2008 of the Regional Trial Court, Branch 121, Caloocan City in Civil Case No. C-668 are AFFIRMED.

SO ORDERED. 15

The Republic moved for reconsideration but the same was denied in a Resolution 16 dated September 9, 2014.

Hence, this petition.

In essence, the Republic assails the credibility of Engr. Salinas and faults the RTC and the CA for accepting his recommendation. According to the Republic, Engr. Salinas is a biased witness, having worked for Manotok Realty on several occasions. In addition, the Republic insists that just compensation for the expropriated property should be fixed at Php900.00 per square meter.

Respondents take exception and argue that the petition presents factual issues which are beyond the ambit of a Rule 45 petition. At any rate, they contend that the RTC and CA did not err in relying on the report and testimony of Engr. Salinas. According to respondents, Engr. Salinas duly considered the factors enumerated in RA No. 8974. 17

Our Ruling

We deny the petition.

The credibility of a witness is one of those quintessentially factual issues that are not reviewable by this Court. 18 Indeed, it is the trial court that can authoritatively rule on such issue as it has unmatched opportunity to observe the comportment of the witness and receive evidence that may impugn his credibility. 19

Moreover, retaining the services of expert witnesses does not automatically make them biased. Ultimately, the assessment of the probative weight accorded to expert testimony is best left to the discretion of the trial court. As we explained in People v. Baid: 20

The fact that Dr. Salangad was hired by the family of complainant to give expert testimony as a psychiatrist did not by that fact alone make her a biased witness and her testimony unworthy of consideration. As has been said:

. . . Although courts are not ordinarily bound by expert testimonies, they may place whatever weight they choose upon such testimonies in accordance with the facts of the case. The relative weight and sufficiency of expert testimony is peculiarly within the province of the trial court to decide, considering the ability and character of the witness, his actions upon the witness stand, the weight and process of the reasoning by which he has supported his opinion, his possible bias in favor of the side for whom he testifies, the fact that he is a paid witness, the relative opportunities for study and observation of the matters about which he testifies, and any other matters which deserve to illuminate his statements. The opinion of the expert may not be arbitrarily rejected; it is to be considered by the court in view of all the facts and circumstances in the case and when common knowledge utterly fails, the expert opinion may be given controlling effect (20 Am. Jur., 1056-1058). The problem of the credibility of the expert witness and the evaluation of his testimony is left to the discretion of the trial court whose ruling thereupon is not reviewable in the absence of an abuse of that discretion. 21 (Emphasis supplied.)

On this very issue, the RTC was convinced that Engr. Salinas is a credible witness. According to the trial court, the Republic failed to present any evidence that would cast aspersions on the expertise and integrity of Engr. Salinas. In addition, the trial court found that the recommendations of Engr. Salinas were sound and in conformity with the factors prescribed by Section 5 22 of RA No. 8974. On appeal, the CA completely agreed with the RTC. As such, the matter is beyond our review.

The Republic next assails the amount of just compensation arrived at by the RTC and the CA. It insists that just compensation should be set at Php900.00 per square meter, citing as its basis the following documentary evidence: (a) zonal valuation of the subject properties as of 1996; (b) tax declarations pursuant to Revenue Code of Caloocan City, which was approved on February 11, 1993, and the BIR zonal valuations as of 1996; and (c) a 1998 Deed of Absolute Sale. 23

We are not convinced. DETACa

Just compensation has been defined as the fair and full equivalent of the loss. 24 In determining what constitutes just compensation, we use the standard of fair market value of the property at the time of the filing of the complaint for expropriation or at the time of the taking of property, whichever is earlier. 25

The determination of just compensation is an inherently judicial function. 26 To arrive at the amount that is full, just, and fair value due to the owner, evidence consisting of reliable and actual data should be duly evaluated. 27

Accordingly, issues pertaining to the value of the property expropriated are questions of fact. 28 Such issues therefore are beyond the scope of a Rule 45 petition, which generally deals with purely legal questions. 29 This rule applies with equal force to expropriation cases. 30

Here, the RTC set the amount of just compensation at Php7,500.00 per square meter. On appeal, the CA affirmed the trial court in full. The consistent findings of the lower courts are thus binding on us. In Republic v. Heirs of Spouses Bautista, 31 we ruled:

This Court is not a trier of facts. Questions of fact may not be raised in a petition brought under Rule 45, as such petition may only raise questions of law. This rule applies in expropriation cases. Moreover, factual findings of the trial court, when affirmed by the CA, are generally binding on this Court. An evaluation of the case and the issues presented leads the Court to the conclusion that it is unnecessary to deviate from the findings of fact of the trial and appellate courts. 32 (Emphasis supplied.)

At any rate, there is nothing in the ruling of the lower courts that merits our reversal. The CA rejected the Republic's proposed valuation because the documentary evidence adduced in support thereof were obsolete and failed to capture the fair market value of the subject properties in 2001. 33

We agree with the CA.

The Republic's evidence all preceded the material date of August 23, 2001 by several years. This gap was too substantial to be ignored and disregarded.

In particular, the 1996 zonal valuation, which was set at Php900.00 per square meter, was clearly dated. The complaint for expropriation was filed in 2001, five years after the zonal valuation was issued. Certainly, for compensation to be just, it cannot be based on the valuation of the subject properties in 1996. The lower courts were thus correct to disregard the zonal valuation as basis for just compensation.

The same can be said for the tax declarations, which reflected assessed values of the subject properties in 1993 or 1996. We also ruled in Export Processing Zone Authority v. Dulay34 that tax declarations should not be accepted hook, line, and sinker in determining just compensation:

Various factors can come into play in the valuation of specific properties singled out for expropriation. The values given by provincial assessors are usually uniform for very wide areas covering several barrios or even an entire town with the exception of the poblacion. Individual differences are never taken into account. x x x Tax values can serve as guides but cannot be absolute substitutes for just compensation.

To say that the owners are estopped to question the valuations made by assessors since they had the opportunity to protest is illusory. The overwhelming mass of land owners accept unquestioningly what is found in the tax declarations prepared by local assessors or municipal clerks for them. They do not even look at, much less analyze, the statements. The idea of expropriation simply never occurs until a demand is made or a case filed by an agency authorized to do so.

It is violative of due process to deny to the owner the opportunity to prove that the valuation in the tax documents is unfair or wrong. And it is repulsive to basic concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court promulgated only after expert commissioners have actually viewed the property, after evidence and arguments pro and con have been presented, and after all factors and considerations essential to a fair and just determination have been judiciously evaluated. 35 (Emphasis supplied.)

As to the 1998 Deed of Sale, we agree with the CA that the Republic failed to contextualize the transaction and show how it was similarly situated with the subject properties. As the CA aptly ruled:

While it is true that the current selling price of similar lands in the vicinity should be taken as one of the relevant standards in determining just compensation, We agree with the court a quo that [the Republic] could not capitalize on the alleged sale executed by a certain Juanita Santos Proximo. Evidently, the alleged sale took place in 1998 and did not involve [the] properties for expropriation. The transaction sale was different for which neither the court nor [the Republic] could probe into the mindset and motivation of the seller when she agreed to sell her land at Php900.00 per square meter. 36

By contrast, the rulings of the RTC and CA relied on the appraisal of Engr. Salinas, who in turn considered the following factors, among others: (a) the plan to develop the subject properties into a memorial park; (b) the subject properties' proximity to an adjacent memorial park, whose lots were almost sold out; (c) the fact that the subject properties are located in a densely populated area and near a developed community in Baesa, ensuring demand for a new memorial park; and (d) the view of the place, considering that the North Diversion Road Luzon Expressway is adjacent to the subject properties. 37 aDSIHc

The CA also cited Resolution No. 35-2003 dated June 26, 2003 issued by the BIR Technical Committee on Real Property Valuation, which declared that the fair and realistic value of the subject properties was Php7,500.00 per square meter. While this was issued in 2003, the CA observed that no significant improvements were introduced to the subject properties from 2001 to 2003. 38

In fine, considering that the amount of just compensation is fully supported by the evidence on record, we see no cogent reason to disturb the findings of the RTC, as wholly affirmed by the CA.

On a final note, however, we observe that the RTC and CA were silent on the issue of interest. When owners are deprived of their property, they are also deprived of income that could have accrued thereon had it not been expropriated. 39 Thus, for compensation to be truly full and fair, interest should be imposed on the unpaid balance of the just compensation finally adjudicated by the courts, to be reckoned from the time of actual taking. 40

In Evergreen Manufacturing Corporation v. Republic, 41 we explained:

[T]he rationale for imposing interest on just compensation is to compensate the property owners for the income that they would have made if they had been properly compensated — meaning if they had been paid the full amount of just compensation — at the time of taking when they were deprived of their property. x x x

xxx xxx xxx

The delay in the payment of just compensation is a forbearance of money. As such, this is necessarily entitled to earn interest. The difference in the amount between the final amount as adjudged by the court and the initial payment made by the government — which is part and parcel of the just compensation due to the property owner — should earn legal interest as a forbearance of money. x x x

xxx xxx xxx

With respect to the amount of interest on the difference between the initial payment and final amount of just compensation as adjudged by the court, we have upheld in Eastern Shipping Lines, Inc. v. Court of Appeals, and in subsequent cases thereafter, the imposition of 12% interest rate from the time of taking when the property owner was deprived of the property, until 1 July 2013, when the legal interest on loans and forbearance of money was reduced from 12% to 6% per annum by BSP Circular No. 799. Accordingly, from 1 July 2013 onwards, the legal interest on the difference between the final amount and initial payment is 6% per annum. 42 (Emphasis supplied.)

Here, the Republic deposited an amount equivalent to the zonal value of the subject properties in support of its application for the issuance of a writ of possession. Since we ruled that just compensation should be set at Php7,500.00 per square meter, which is greater than the zonal value of the subject properties, the balance should earn legal interest at the rate of 12% per annum. The legal interest accrued from the time the writ of possession was issued since it was at this moment that respondents have been deprived of their property.

However, the 12% per annum interest rate is applicable only up to June 30, 2013. Pursuant to Bangko Sentral ng Pilipinas-Monetary Board (BSP-MB) Circular No. 799, Series of 2013, the legal interest has been reduced to 6% per annum. In several cases, 43 we recognized the applicability of BSP-MB Circular No. 799, Series of 2013 to the unpaid balance of the just compensation in expropriation cases.

To summarize, the unpaid portion of the just compensation shall earn legal interest at the rate of 12% per annum from the date of the issuance of the writ of possession up to June 30, 2013; and 6% per annum from July 1, 2013 until fully paid.

WHEREFORE, the petition is DENIED. The Decision dated March 6, 2013 and Resolution dated September 9, 2014 of the Court of Appeals are AFFIRMED with MODIFICATION. Petitioner Republic of the Philippines, represented by the Toll Regulatory Board, is ORDERED to pay respondents Manotok Estate Corporation, Manotok Realty, Incorporated, Phil-Ville Development and Housing Corporation, Francisco Guy Co Chia, and Jaime C. Castillo, in accordance with their respective interests, the following amounts:

(a) The unpaid balance of the just compensation, which shall be fixed at Php7,500.00 per square meter; and

(b) Legal interest on the unpaid balance at the rate of 12% per annum from the date the writ of possession was issued until 30 June 2013 and thereafter, at the rate of 6% per annum until full payment. ETHIDa

SO ORDERED." (Leonen, J., on official leave; Dimaampao, J., designated additional Member per Special Order No. 2839 dated September 16, 2021.)

By authority of the Court:

(SGD.) MISAEL DOMINGO C. BATTUNG IIIDivision Clerk of Court

 

Footnotes

1.Rollo, pp. 12-32.

2.Id. at 53-64. The CA Decision was penned by Associate Justice Franchito N. Diamante, with the concurrence of Associate Justices Mario V. Lopez (now a Member of the Court) and Melchor Q.C. Sadang.

3.Id. at 65-66. The CA Resolution was penned by Associate Justice Franchito N. Diamante, with the concurrence of Associate Justices Mario V. Lopez (now a Member of this Court) and Melchor Q.C. Sadang.

4.Id. at 54.

5.Id.

6.Id.

7.Id.

8.Id. at 19.

9.Id. at 55.

10.Id.

11.Id. at 137-146. The RTC Decision was penned by Judge Adoracion G. Angeles.

12.Id. at 146.

13.Id. at 147-148. The RTC Order was penned by Judge Adoracion G. Angeles.

14.Supra note 2.

15.Rollo, p. 63.

16.Supra note 3.

17. An Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National Government Infrastructure Projects and for Other Purposes.

18. See People v. Lagangga, G.R. No. 207633, December 9, 2015, 775 Phil. 335, 341 (2015).

19. See People v. Lalican, 659 Phil. 591, 592 (2011).

20. 391 Phil. 552 (2000).

21.Id. at 553.

22. RA No. 8974, Section 5 provides:

Section 5. Standards for the Assessment of the Value of the Land Subject of Expropriation Proceedings or Negotiated Sale. — In order to facilitate the determination of just compensation, the court may consider, among other well-established factors, the following relevant standards:

(a) The classification and use for which the property is suited;

(b) The developmental costs for improving the land;

(c) The value declared by the owners;

(d) The current selling price of similar lands in the vicinity;

(e) The reasonable disturbance compensation for the removal and/or demolition of certain improvement on the land and for the value of improvements thereon;

(f) This size, shape or location, tax declaration and zonal valuation of the land;

(g) The price of the land as manifested in the ocular findings, oral as well as documentary evidence presented; and

(h) Such facts and events as to enable the affected property owners to have sufficient funds to acquire similarly-situated lands of approximate areas as those required from them by the government, and thereby rehabilitate themselves as early as possible.

23.Rollo, pp. 55-56.

24.Evergreen Manufacturing Corp. v. Republic, 817 Phil. 1048, 1058 (2017).

25.Republic v. Mupas, 769 Phil. 21, 31 (2015).

26.Export Processing Zone Authority v. Dulay, 233 Phil. 313, 326 (1987).

27.Republic v. Barcelon, G.R. No. 226021, July 24, 2019.

28.Id.

29.National Transmission Corp. v. Spouses Taglao, G.R. No. 223195, January 29, 2020.

30.Id.

31. 702 Phil. 284 (2013).

32.Id. at 297.

33.Rollo, p. 60.

34. 233 Phil. 313 (1987).

35.Id. at 326.

36.Rollo, p. 63.

37.Id. at 61-62.

38.Id. at 62.

39. See Land Bank of the Philippines v. Heirs of Barrameda, G.R. No. 221216, July 13, 2020.

40.Id.

41. 817 Phil. 1048 (2017).

42.Id. at 1068-1070.

43. See, e.g., Republic v. Macabagdal, 823 Phil. 477, 478 (2018); Evergreen Manufacturing Corp. v. Republic, 817 Phil. 1048, 1070 (2017); and Republic v. Mupas, 769 Phil. 21, 199-200 (2015).