Republic v. Sabino

FIRST DIVISION

[G.R. No. 230017. July 6, 2022.]

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH), petitioner,vs. LEONIZA AMANTILLO SABINO, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution dated July 6, 2022, which reads as follows:

"G.R. No. 230017 (Republic of the Philippines, represented by the Department of Public Works and Highways (DPWH) v. Leoniza Amantillo Sabino). — This Petition for Review on Certiorari 1 (petition) seeks to reverse and set aside the Decision 2 dated 13 July 2016 and the Resolution 3 dated 15 February 2017 of the Court of Appeals (CA) in CA-G.R. CV No. 102435, partially granting the appeal of herein petitioner Republic of the Philippines (Republic) in Civil Case No. 179-V-12.

Antecedents

Leoniza Amantillo Sabino 4 (respondent) is the registered owner of a 700 square meter parcel of land located at G. Marcelo Street, Maysan, Valenzuela City. On 30 October 2012, the Republic, through the Department of Public Works and Highways, filed a Complaint 5 for expropriation against respondent. Petitioner alleged that the parcel of land sought to be expropriated would be used in the construction of the C-5 Northern Link Road Project Phase 2 (Segment 9) from North Luzon Expressway (NLEX) to MacArthur Highway, Valenzuela City, to provide an efficient, fast, and safe road network and spur national economic development. It was also alleged that the zonal value per square meter of the subject lot was P5,500.00 or a total zonal value of P3,850,000.00. 6

Instead of filing an answer, respondent filed a Manifestation 7 stating that she was not contesting the State's exercise of its power of eminent domain to acquire private property but that petitioner's offer was not commensurate to the true value of the subject property. After due hearing and payment of the provisional value of the land, the Regional Trial Court (RTC) of Valenzuela City, Branch 270, issued on 01 April 2013 a Writ of Possession 8 in the Republic's favor. 9

Upon the parties' agreement, the RTC created the Board of Commissioners (Board) to determine the value of the subject lot. The Board was composed of City Engineer Praceli S. Nelson, Assistant City Assessor Danilo Crespo, and Atty. Maribel Fernandez, Branch Clerk of Court of the RTC. 10

In its Report, 11 the Board recommended the amount of just compensation to be P5,500.00 per square meter, corresponding to the Bureau of Internal Revenue zonal valuation of the subject property, plus legal interest at the time of taking. The Board took note that the subject property is an idle land. Among the documents the Board gathered were the tax declaration and photographs. 12

Both parties were given time to file their Comments on the said Report. 13 At the scheduled hearing on 12 July 2013, respondent and her counsel failed to appear. The Republic, through its counsel, manifested in open court that it had no objection to the recommended offer of P5,500.00. Its motion that respondent be considered to have waived her right to file her comment to the Board's Report was granted, as the period afforded her to file the same had already lapsed. 14

During the Judicial Dispute Resolution (JDR) hearing on 19 September 2013, the parties failed to reach an amicable settlement. Hence, the JDR was declared to have failed and was ordered terminated. Since both parties manifested to the court that they would like the trial to proceed, the case continued for trial. The testimony of Victor Nuqui (Nuqui), respondent's appraiser, was dispensed with after the parties stipulated (a) on the existence of the Appraisal Report made by Nuqui and (b) that if ever Nuqui will testify, he could identify the aid Appraisal Report. Thereafter, the case was submitted for resolution. 15

Ruling of the RTC

On 20 November 2013, the RTC rendered its Decision, 16 the dispositive portion of which reads: CAIHTE

WHEREFORE, with the foregoing, judgment is hereby rendered:

1. Declaring plaintiff to have a lawful right to acquire possession of and title to Seven Hundred Square Meters (700 sq. m.) of defendant Leoniza Amantillo Sabino's parcel of land covered by TCT V-86409 necessary for the construction of the C-5 Northern Link Road Project Phase 2 (Segment 9) from NLEX to [MacArthur] Highway, Valenzuela City;

2. Condemning portions to the extent of Seven Hundred Square Meters (700 [sq. m.]) of the above-described parcel of land including improvements thereon, if there be any, free from all liens and encumbrances;

3. Ordering the plaintiff to pay defendant Leoniza Amantillo Sabino the amount of Ten Thousand Pesos (Php10,000.00) per square meter or the total amount of Seven Million Pesos (Php7,000,000.00) for the Seven Hundred Square Meters (700 sq. m.) as fair, equitable and just compensation with legal interest at 12% per [annum] from the taking of the possession of the property and after deducting the provisional deposit of Php3,850,000.00, subject to the payment of all unpaid real property taxes and other relevant taxes, if there be any.

4. Plaintiff is likewise ordered to pay the defendant consequential damages which shall include the value of the transfer tax necessary for the transfer of the subject property from the name of the defendant to that of the plaintiff and attorney's fees in the amount of 10% of defendant's total claim for just compensation but not less than Php30,000.00.

5. The Office of the Register of Deeds of Valenzuela City, Metro Manila is directed to annotate this Decision in Transfer Certificate of Title No. V-86409 registered under the name of Leoniza Amantillo Sabino.

Let a certified true copy of this decision be recorded in the Registry of Deeds of Valenzuela City.

SO ORDERED. 17

The RTC found the amount of P5,500.00 per square meter as compensation to be too low. Hence, it fixed the amount of just compensation at P10,000.00 per square meter on the basis of the following circumstances: (a) respondent never intended to sell the subject property; (b) the subject property was a residential lot within the immediate vicinity of Manila; (c) if ever respondent would buy a parcel of land with the same land area and within the neighborhood of the subject property, she could no longer buy the same in the same amount being offered by the respondent; and (d) the subject property was near educational institutions, markets, churches, shopping centers, and telecommunications establishments. 18

The Republic subsequently moved for reconsideration, 19 which the RTC partially granted through its Order 20 dated 10 March 2014, the dispositive portion of which states:

WHEREFORE, premises considered, the Motion for Reconsideration is PARTIALLY GRANTED. Applying Art. 2209 of the Civil Code, the legal interest of 12% per [annum]is hereby reduced to 6%, and plaintiff Republic of the Philippines represented by the DPWH is hereby directed to pay defendant Leoniza Amantillo Sabino six percent (6%) legal interest per [annum] on the balance of the just compensation of the subject property from the time of taking until full payment.

SO ORDERED. 21

Aggrieved, petitioner appealed to the CA. 22

Ruling of the CA

On 13 July 2016, the CA rendered its Decision, 23 the dispositive portion of which reads:

WHEREFORE, the present Appeal is PARTIALLY GRANTED. The assailed Decision dated November 20, 2013, and Order dated March 10, 2014 of the Regional Trial Court, Branch 270, Valenzuela City are AFFIRMED with the MODIFICATION that plaintiff-appellant Republic of the Philippines is ordered to pay just compensation to defendant-appellee Leoniza Amantillo Sabino at the rate of P6,500.00 per square meter of the subject 700-square meter lot. The rest of the trial court's adjudications shall remain.

SO ORDERED. 24

The CA noted that the RTC's determination of just compensation was not adequately supported by competent and convincing evidence. It explained that the trial court did not cite any comparative studies of the market value of similar properties in the vicinity or refer to any document showing the subject lot's current market value. It also fixed the amount of just compensation without considering the differences in the nature, character, and condition of the subject lot compared to other properties in the area. The size, shape, location, cost of acquisition, and current value of like properties, which were important factors in arriving at the fair market value of the subject lot, were sorely absent from the records of this case. The CA likewise did not find that the zonal valuation of P5,500.00 per square meter reflected the real fair market value of the property. 25

In the assailed Decision, the CA reduced the amount of just compensation from P10,000.00 to P6,500.00 per square meter based on Nuqui's appraisal report. The CA considered Nuqui's determination to be in accord with the subject lot's reasonable value, more so because there was no showing that petitioner exerted vehement objections thereto. 26

The Republic subsequently moved for reconsideration, 27 but the CA denied the Motion in its Resolution 28 dated 15 February 2017. Hence, the filing of the instant Petition before this Court.

On 06 September 2017, the Court required respondent to comment on the Petition within 10 days from notice. 29 Respondent's counsel, however, failed to file the required Comment. 30

Issues

The issues in this case are whether or not the CA correctly ruled in (a) fixing the just compensation of the subject lot at P6,500.00 per square meter; (b) affirming the award of attorney's fees; and (c) ordering petitioner to pay capital gains tax.

Ruling of the Court

The Petition is partly meritorious. DETACa

Just compensation means the full and fair equivalent of the property taken from its owner by the expropriator. It is that sum of money which a person desirous but not compelled to buy, and an owner willing but not compelled to sell, would agree on as price to be given and received therefor. The measure is not the taker's gain, but the owner's loss. 31

The Republic contends that Nuqui's Appraisal Report cannot be used as basis for the determination of just compensation on the following grounds: (a) it was not furnished a copy of the Report during trial; (b) the Report was not formally offered as evidence; and (c) the Board never considered Nuqui's report in the preparation of its Report. 32

Both the RTC and the CA did not adopt the Board's recommendation of P5,500.00 per square meter as just compensation. Instead, the RTC and the CA fixed the just compensation for the subject lot at P10,000.00 and P6,500.00 per square meter, respectively.

The courts a quo erred, as the valuation they made lacked evidentiary basis. While the CA, in its assailed Decision, observed that the RTC's award of just compensation lacked any basis, it proceeded to fix the value of just compensation sans evidentiary support.

A perusal of the records will show that Nuqui's Appraisal Report was never formally offered in evidence. As a general rule, courts cannot consider evidence which has not been formally offered. Parties are required to inform the courts of the purpose of introducing their respective exhibits to assist the latter in ruling on their admissibility in case an objection thereto is made. Without a formal offer of evidence, courts are constrained to take no notice of the evidence even if it has been marked and identified. However, the Court has relaxed the foregoing rule and allowed evidence not formally offered to be admitted and considered by the trial court provided these twin requisites are present: (1) the evidence must have been identified by testimony duly recorded; and (2) the same must have been incorporated in the records of the case. 33

The instant case, however, does not fall under the exception. While the parties have stipulated on the existence of the Appraisal Report, the same was never incorporated in the records of the case. Absent one of the aforementioned requisites, the exception to the rule where evidence not formally offered can be considered will not apply. Resultantly, the CA should not have given any weight or evidentiary value to the said Appraisal Report. 34

Further, there is nothing in the CA Decision from which it can be inferred that Nuqui's Appraisal Report took into account the standards set forth in Section 5 35 of Republic Act (RA) No. 8974, 36 the applicable law in this case, in determining just compensation. The CA merely stated that Nuqui's determination is more in tune with the subject lot's reasonable value, without explaining any further. The Court cannot rely on guesswork as to what relevant factors were considered by Nuqui, and sustained by the CA, in fixing the amount of just compensation. Thus, the amount of P6,500.00 determined by the CA as the just compensation for the subject property has no basis, there being no other evidence presented to support the said amount.

It has been consistently held that though the determination of just compensation in expropriation proceedings is essentially a judicial prerogative, the appointment of commissioners to ascertain just compensation for the property sought to be taken is a mandatory requirement, nonetheless. Thus, while it is true that the findings of commissioners may be disregarded and the trial court may substitute its own estimate of the value, it may only do so for valid reasons; that is, where the commissioners have applied illegal principles to the evidence submitted to them, where they have disregarded a clear preponderance of evidence, or where the amount allowed is either grossly inadequate or excessive. As such, "trial with the aid of the commissioners is a substantial right that may not be done away with capriciously or for no reason at all." 37 Apparently, the recommendations of the Board carry with it great weight and value insofar as the determination of just compensation is concerned. 38

There being no showing that the commissioners have applied illegal principles to the evidence submitted to them, that they have disregarded a clear preponderance of evidence, or that the amount allowed is either grossly inadequate or excessive, We approve the amount of P5,500.00 per square meter as just compensation or a total amount of P3,850,000.00, as recommended by the Board.

Anent the award of attorney's fees and consequential damages in the form of payment of necessary taxes for the transfer of the subject land's title to the government (i.e., capital gains tax), We agree with the CA when it declared that "it is now too late for the Republic to assail the [same] considering that it did not question [them] before the trial court when it filed its motion for reconsideration." 39 It is worth stressing that issues raised for the first time on appeal and not raised timely in the proceedings in the lower court are barred by estoppel. 40 To consider those issues would be offensive to the basic rules of fair play, justice, and due process. 41

However, considering that the total amount of just compensation, i.e., P3,850,000.00, is equivalent to the partial and provisional just compensation paid by the Republic to respondent, the imposition of legal interest is hereby deleted. In Republic v. Soriano, 42 the Court deleted the RTC's imposition of interest at 12% per annum for being unjustified considering that the Republic therein "did not delay in its payment of just compensation as it had deposited the pertinent amount in full due to respondent x x x." There being no unpaid balance of the just compensation, the Court ruled therein that the award of legal interest is unwarranted.

The award of interest is imposed in the nature of damages for delay in payment which, in effect, makes the obligation on the part of the government one of forbearance to ensure prompt payment of the value of the land and limit the opportunity loss of the owner. The imposition of interest is justified only in cases where delay has been sufficiently established. 43

In this case, the Republic promptly paid the provisional deposit, which is likewise the full amount of just compensation as judicially determined, before the taking of the subject property. Respondent was duly paid before her property was taken. We, thus, find that the imposition of interest is unjustified and should be deleted.

WHEREFORE, the instant petition is PARTIALLY GRANTED. The Decision dated 13 July 2016 and Resolution dated 15 February 2017 of the Court of Appeals in CA-G.R. CV No. 102435 are AFFIRMED with MODIFICATION in that the just compensation for the seven hundred (700)-square meter expropriated property is fixed at Five Thousand Five Hundred Pesos (P5,500.00) per square meter, or a total of Three Million Eight Hundred Fifty Pesos (P3,850,000.00). The legal interest imposed is DELETED. The CA Decision is affirmed in all other respects.

The filing of the respondent's comment on the Petition for Review on Certiorari required in the Resolution dated 06 September 2017, is DISPENSED WITH.

SO ORDERED."

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

by:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

Footnotes

1. Rollo, pp. 13-30.

2. Id. at 36-43; penned by Associate Justice Zenaida T. Galapate-Laguilles and concurred in by Associate Justices Mariflor P. Punzalan Castillo and Florito S. Macalino.

3. Id. at 45-46; penned by Associate Justice Zenaida T. Galapate-Laguilles and concurred in by Associate Justices Mariflor P. Punzalan Castillo and Florito S. Macalino.

4. Referred to as Leoniza Amantillo-Sabino in some parts of the rollo (see rollo, pp. 8, 13, 15, 73-75, 81).

5. Records, pp. 1-13.

6. Id. at 37-38.

7. Records, pp. 37-46.

8. Id. at 129-130.

9. Rollo, p. 38.

10. Id. at 38; records, p. 66.

11. Records, pp. 72-73.

12. Rollo, p. 38; records, pp. 72-73.

13. Records, p. 104.

14. Id. at 115.

15. Id. at 154-155.

16. Rollo, pp. 49-56; penned by Presiding Judge Evangeline M. Francisco.

17. Id. at 55-56.

18. Id. at 54-55.

19. Id. at 57.

20. Id. at 57-58.

21. Rollo, p. 58; records, p. 183.

22. Rollo, p. 18.

23. Id. at 36-43.

24. Id. at 42-43.

25. Id. at 41-42.

26. Id. at 42.

27. Id.

28. Id. at 45-46.

29. Id. at 65.

30. Id. at 75.

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

32. Rollo, p. 21.

33. Heirs of Tabuena v. Land Bank of the Phils., 588 Phil. 233, 241 (2008); David v. Bank of the Philippine Islands, G.R. No. 251157, 29 September 2021.

34. See Westmont Investment Corp. v. Francia, Jr., 678 Phil. 180, 193-194 (2011).

35.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) The 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.

36. Entitled "AN ACT TO FACILITATE THE ACQUISITION OF RIGHT-OF-WAY, SITE OR LOCATION FOR NATIONAL GOVERNMENT INFRASTRUCTURE PROJECTS AND FOR OTHER PURPOSES." Approved: 07 November 2000.

37. Spouses Ortega v. City of Cebu, 617 Phil. 817, 826 (2009).

38. Republic v. Spouses Silvestre, G.R. No. 237324, 06 February 2019.

39. Rollo, p. 42.

40. Bernas v. Estate of Felipe Yu Han Yat, 838 Phil. 710, 744 (2018).

41. Republic v. Estate of Posadas III, G.R. No. 214310, 24 February 2020.

42. 755 Phil. 187, 200 (2015).

43. Republic v. Heirs of Francisco, G.R. No. 244115, 03 February 2021.