Republic v. Spouses Jamandron

FIRST DIVISION

[G.R. No. 228293. * June 23, 2021.]

REPUBLIC OF THE PHILIPPINES [DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS], petitioner, vs.SPOUSES VICTOR JAMANDRON**AND GREGORIA MIGUEL, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedJune 23, 2021which reads as follows:

"G.R. No. 228293 (Republic of the Philippines [Department of Public Works and Highways] v. Spouses Victor Jamandron and Gregoria Miguel).

The Republic of the Philippines (petitioner) assails in this petition for review on certiorari the July 22, 2016 Decision 1 of the Court of Appeals (CA) in CA-G.R. CV No. 101605, which affirmed the January 28, 2013 Order 2 of the Regional Trial Court, Quezon City, Branch 215 (RTC), in Civil Case No. Q-04-52070, fixing the replacement cost of the improvement on the expropriated property at P2,685,642.60, and requiring petitioner to pay legal interest at six percent (6%) per annum on the unpaid balance of the amount from the time of taking until full payment.

On March 9, 2004, petitioner, through the Department of Public Works and Highways (DPWH), filed a Complaint 3 before the RTC, seeking to expropriate the lot registered in the name of the late Spouses Victor Jamandron and Gregoria Miguel under Transfer Certificate of Title (TCT) No. 61173, containing an area of 21.71 square meters located at B. Serrano Avenue (formerly, Santolan Road), Libis, Quezon City (subject property). 4 Petitioner sought the expropriation of a fourteen (14) sq. m. portion of the lot for the construction of the Marikina Bridge and Access Road Project, Package 3, under the Metro Manila Urban Transport Integration Project (MMUTRIP). 5

On July 6, 2005, petitioner filed a Motion for Issuance of Writ of Possession, 6 alleging that it had already deposited with the Land Bank of the Philippines, under respondents' names, the total amount of P1,664,680.00, broken down as follows: (a) P173,680.00 equivalent to 100% of the Bureau of Internal Revenue (BIR) zonal value of the subject property at P8,000.00 per square meter, and (b) P1,491,000.00 equivalent to the value of the three-storey residential house erected on the lot, based on replacement cost as determined by DPWH. 7 The motion was granted by the RTC in an Order dated February 14, 2006. 8

On September 25, 2008, respondents filed a motion for the creation of a board of commissioners to determine the reasonable just compensation for the expropriated property. On June 9, 2009, the RTC appointed the members of the Board of Commissioners 9(BOC) composed of the following: the City Assessor of Quezon City; Engineer Sonia B. Austria (Engr. Austria), respondents' nominee; and Engineer Purisima J. Canoneo (Engr. Canoneo) of the DPWH, the Republic's nominee. Engr. Canoneo was later replaced by Engineer Marivel Hilvano (Engr. Hilvano), also of the DPWH. On April 6, 2010, the RTC formally convened the BOC. 10

In the Commissioner's Report dated June 28, 2010, the BOC unanimously adopted the P20,500.00 per square meter valuation of the subject property. However, they disagreed on the amount of replacement cost of the improvement. Engr. Canoneo pegged the replacement cost at P1,491,000.00, while Engr. Austria recommended the amount of P3,880,285.20. The city assessor, on the other hand, did not submit any recommendation. 11

On June 13, 2011, the RTC issued an Order 12 fixing the amount of just compensation for the land at P20,500.00 per square meter, and replacement cost of the improvement at P1,491,000.00. CAIHTE

Feeling aggrieved, respondents filed a Motion for Partial Reconsideration 13 dated July 18, 2011, assailing among others, the award of replacement cost for the building. They pointed out that Engr. Hilvano failed to present evidence to support the valuation of P1,491,000.00. This amount was supposedly based on the appraisal report prepared by Value Specialists Property Appraisers, but this report was not presented in court. On the other hand, Engr. Austria, respondents' representative at the BOC, submitted a detailed computation and estimate of the building, and arrived at the replacement cost of P3,880,285.20. Thus, in order that they may not be unduly prejudiced, respondents prayed that the RTC uphold their submission to average the estimates of both Engr. Austria and DPWH and consequently order the latter to pay them the amount of P2,685,642.60 as replacement cost. 14 They also prayed for the imposition of six percent (6%) interest per annum on the just compensation for both the land and improvement from the time of taking until full payment of the balance on the principal amount, and payment of consequential damages. 15

On January 28, 2013, the RTC issued an Order 16 disposing of respondents' motion as follows:

WHEREFORE, foregoing premises considered and as prayed for by the [spouses], the Motion for Partial Reconsideration is GRANTED in PART. The Order dated June 13, 2012 (sic) is hereby AFFIRMED with the following MODIFICATIONS:

The Court resolves to determine the just compensation of the land and improvement subject of this case as follows:

a. P20,500.00 per square meter as the value of the lot with legal interest at the rate of 6% per annum from the time of taking until full payment of the balance on the principal amount[; and]

b. P2,685,642.60 as replacement cost for the improvement with legal interest at the rate of 6% per annum from the time of taking until fully paid;

The prayer for consequential damages is hereby DENIED.

SO ORDERED.17

Petitioner filed a motion for reconsideration, to no avail. Hence, it sought recourse from the CA on the following grounds: (1) Respondents are entitled to replacement cost in the amount of P1,491,000.00 only; and (2) If the courts determine with finality that respondents are entitled to the higher amount of P2,685,642.60 as replacement cost, interest at six percent (6%) per annum should apply only on the unpaid balance of P1,194,482.60. 18

As mentioned, the CA rendered the assailed Decision on July 22, 2016, affirming the RTC Order which set the replacement cost of the improvement on the subject property at P2,685,642.60, and ordering petitioner to pay legal interest at six percent (6%) per annum on the unpaid balance of the amount from the time of taking until full payment. 19 The CA noted that the Appraisal Report dated July 2003, on which petitioner's computation of replacement cost is based, was never presented and formally offered as evidence before the RTC. On the other hand, Engr. Austria based her recommended amount of P3,880,285.20 "on a detailed enumeration and computation of 'the kinds and quantities of materials/equipment used, the location, configuration and other physical features of the properties, and prevailing construction prices,' pursuant to Section 10 of the Implementing Rules and Regulations (IRR) of Republic Act (R.A.) No. 8974." Hence, the CA concluded that the amount of P2,685,642.60 20 is a fair and reasonable replacement cost for the improvement, being a compromise amount between the amounts submitted by the parties. 21 Moreover, it held that legal interest should apply only on the unpaid balance of the replacement cost from the time of taking until the same is fully paid. 22 The dispositive portion of the CA decision reads:

WHEREFORE, the Orders dated January 28, 2013 and August 22, 2013 of Branch 215 of the Regional Trial Court of Quezon City in Civil Case No. Q-04-52070 are hereby MODIFIED in that the legal interest of six percent (6%) per annum on the replacement cost of improvements on subject property shall be imposed only on the unpaid balance thereof, from the time of taking until the same is fully paid.

In all other respects, the assailed Orders are hereby AFFIRMED.

SO ORDERED. 23 aScITE

Petitioner's motion for reconsideration having been denied, 24 it filed the present petition insisting that respondents are entitled to the replacement cost of only P1,491,000.00. Moreover, if the Court will determine with finality that it should pay the higher amount of P2,685,642.60, petitioner prayed that the interest of six percent (6%) per annum be applied on the unpaid balance only from the date the amount is determined with finality. 25

The issue thus posed for the Court's consideration is whether the CA erred in sustaining the RTC's finding on the replacement cost of the three-storey building erected on the expropriated land, and in requiring petitioner to pay legal interest on the unpaid balance from the time of taking until full payment.

The Court's Ruling

We DENY the petition.

The gist of petitioner's objection to the replacement cost approved by the RTC, and later by the CA, is that it is excessive. However, a decision on the proper amount of replacement cost would entail a re-examination and re-calibration of evidence. Such re-examination and re-calibration, being of a factual nature, lie beyond the purview of the Court's authority in this petition. 26 Settled is the rule that this Court is not a trier of facts, and it is not its function to examine, review, or evaluate the evidence all over again. A petition for review on certiorari under Rule 45 of the Rules of Court should cover only questions of law, which rule equally applies in expropriation cases. 27

Moreover, factual findings of the trial court, when affirmed by the CA, are conclusive upon this Court. While there are recognized exceptions to this rule, none of them are present in this case. 28

Even we consider the merits of the petition, it still would have met the same fate.

Records show that the RTC initially upheld petitioner's recommendation to peg replacement cost at P1,491,000.00. 29 However, after respondents brought to the RTC's attention that the basis for this amount is not extant on the record, the RTC reconsidered and upheld respondents' proposition to average the amounts respectively recommended by the parties to come up with the final replacement cost. Petitioner cannot fault the RTC, and later the CA, for considering the only available set of facts on which the determination of replacement cost can be made, i.e., the "detailed estimate" submitted by respondents' representative, Engr. Austria, 30 since petitioner had already demolished the building prior to the ocular inspection of the BOC. 31

Petitioner could have placed itself in a better position if it offered in evidence the appraisal report on which it based its recommendation of replacement cost. Sec. 34, Rule 132 of the Revised Rules on Evidence clearly states that courts shall consider no evidence which has not been formally offered. A formal offer is necessary because judges are mandated to rest their findings of fact and their judgment only and strictly upon the evidence offered by the parties at the trial. On the other hand, this allows opposing parties to examine the evidence and object to its admissibility. To consider a party's evidence which was not formally offered during trial would deprive the other party of due process. 32

To advance its position, petitioner, through the Office of the Solicitor General, further submits that the valuation of replacement cost is a matter of judicial admission that does not require proof. 33 This is utterly erroneous. The determination of the replacement cost, or just compensation for that matter, is not a proper subject of a judicial admission by the implementing agency in an expropriation proceeding. Rather, it requires evidence. Otherwise, there would not have been any rationale for the law, particularly R.A. No. 8974 34 and its IRR, to provide for standards in assessing the value of the land subject of expropriation, as well as the improvements or structures thereon. There would have been no justification for the creation of a BOC that will aid the court in determining just compensation under Rule 67 of the Rules of Court. Surely, the law could not have intended an absurdity.

Petitioner's argument that the law vests upon the implementing agency the sole authority to determine that replacement cost 35 is equally misplaced. To be sure, the determination of just compensation in eminent domain cases is a judicial function. Any valuation for just compensation laid down in the statutes may serve only as a guiding principle, but it may not substitute the court's own judgment as to what amount should be awarded and how to arrive at such amount. In the absence of a finding of arbitrariness, abuse or serious error, the exercise of such discretion may not be interfered with. 36 In this case, the Court finds no such arbitrariness, abuse or serious error in the findings of the RTC. Considering that the replacement cost determined by the RTC was affirmed by the CA, the Court sees no reason to disturb such finding.

Coming now to the issue on legal interest, petitioner submits that legal interest should run only from the finality of the judgment declaring a higher amount of replacement cost, rather than from the time of taking, as held by the CA. 37 This argument is unmeritorious.

Ideally, just compensation should be made at the time of the taking, and the amount of payment should be the fair and equivalent value of the property. However, the law allows the government to take possession of the property even before the court's determination of the amount of just compensation by giving an initial payment equivalent to 100% of the value of the land based on the BIR zonal valuation, and the replacement cost for the improvements or structures thereon, pursuant to Sec. 8 of the IRR of R.A. No. 8974, in relation to Sec. 10 thereof. This initial payment, however, is not the full, fair, and equivalent value of the property as the same, at this stage, is still for the court's determination. When the decision of the court as to the proper amount of just compensation becomes final and executory, the implementing agency shall pay the owner the difference between the amount already paid and the just compensation as determined by the court. The difference between the final and initial payments forms part of the just compensation that the property owner is entitled to reckoned from the date of the taking of the property. As the owners were already deprived of their property before receipt of the full just compensation, there was already a delay in the payment of the remaining balance. The remaining balance should, therefore, earn legal interest as a forbearance of money. 38

Indeed, the delay in the payment of just compensation is a forbearance of money and, as such, is necessarily entitled to earn interest. 39 In this case, the difference between the final amount adjudged by the courts, which is P2,685,642.60, and the initial payment made by petitioner in the amount of P1,491,000.00 — which is part and parcel of the just compensation due to the property — should earn legal interest as a forbearance of money.

In sum, the difference between the foregoing figures in the amount of P1,194,482.60, should earn legal interest at twelve percent (12%) per annum from the time of taking until June 30, 2013, when the legal interest on loans and forbearance of money was reduced by Bangko Sentral ng Pilipinas Circular No. 799 from twelve percent (12%) to six percent (6%) per annum. From July 1, 2013 until the finality of this resolution, the legal interest on the said amount should be at six percent (6%) per annum. Thereafter, the total amount of just compensation shall earn legal interest of six percent (6%) per annum from the finality of this resolution until full payment thereof.

WHEREFORE, the petition is DENIED. The assailed Court of Appeals' July 22, 2016 Decision is AFFIRMED with MODIFICATION. The replacement cost for the demolished building on the expropriated property is fixed at P2,685,642.60. Hence, the following amounts are due to respondents:

1. The unpaid portion of the replacement cost, which is the difference between the adjudged replacement cost of P2,685,642.60 and the initial deposit of P1,491,000.00 made by petitioner, or the amount of P1,194,642.60; and

2. Interest, which shall accrue as follows: HEITAD

i. The unpaid portion of P1,194,642.60 shall earn legal interest of twelve percent (12%) per annum from the date of taking until June 30, 2013.

ii. Thereafter, the said unpaid portion of P1,194,642.60 shall earn legal interest of six percent (6%) per annum from July 1, 2013 until the finality of this Resolution.

iii. The sum of legal interest in items i and ii above, plus the unpaid amount of P1,194,642.60 shall earn legal interest of six percent (6%) per annum from the finality of this Resolution until full payment.

SO ORDERED."Lopez, J., J., Additional Member vice Zalameda, J., per Raffle dated June 9, 2021.

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

By:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

* Part of the Supreme Court Case Decongestion Program.

** Referred to as "Jamadron" and "Jamondron" in other parts of the records.

1.Rollo, pp. 9-17; penned by Associate Justice Sesinando E. Villon, with Associate Justices Rodil V. Zalameda (now a Member of this Court) and Pedro B. Corales, concurring.

2.Id. at 122-127; penned by Acting Presiding Judge Ma. Rita A. Bascos Sarabia.

3.Id. at 85-90.

4.Id. at 10 and 86.

5.Id. at 10.

6.Id. at 96-100.

7.Id. at 97.

8.Id. at 10.

9.Id. at 104-107; the heirs of respondent spouses filed a Notice of Death and Substitution of Heirs with Motion to Withdraw the Preliminary Deposit of Plaintiff Republic of the Philippines dated August 18, 2006, informing the RTC of the death of respondent spouses and asking that they be substituted as defendants in the expropriation proceeding. Since the present petition was filed against the deceased spouses nonetheless, actions that their heirs have undertaken in the courts a quo will be referred as undertaken by respondent spouses for ease of reference.

10.Id. at 10-11.

11.Id. at 11.

12.Id. at 113-114.

13.Id. at 115-120.

14.Id. at 116-118; respondent spouses arrived at the amount of P2,685,642.60 by averaging the estimates of DPWH and Engr. Austria, as follows: (P1,491,000.00 + P3,880,285.20)/2 = P2,685,642.60.

15.Id. at 119-120.

16.Id. at 122-127.

17.Id. at 126-127.

18.Id. at 13.

19.Supra note 1.

20. Referred to as "P2,685,642.20" in some parts of the rollo.

21.Id. at 16.

22.Id. at 16-17.

23.Id. at 17.

24.Id. at 43.

25.Id. at 54.

26.Mega Magazine Publications, Inc. v. Defensor, 736 Phil. 342, 353 (2014).

27.Republic v. Heirs of Eladio Santiago, 808 Phil. 1, 9 (2017).

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

29.Rollo, p. 114.

30.Id. at 124-125.

31.Id. at 117.

32.Republic v. Gimenez, 776 Phil. 233, 256-257 (2016).

33.Rollo, p. 48.

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

35.Rollo, pp. 46-47.

36.Republic v. Heirs of Eladia Santiago, supra note 27 at 12.

37.Rollo, pp. 52-54.

38.Republic v. Barcelon, supra note 28.

39.Republic v. Spouses Silvestre, G.R. No. 237324, February 6, 2019.