CASE DIGEST: Republic v. Asia Pacific Integrated Steel

G.R. No. 192100 March 12, 2014




Asia Pacific Integrated Steel Corporation (respondent) is the registered owner of a 17,175-square meter property situated in Barangay Sta. Monica, Municipality of San Simon, Province of Pampanga. On March 1, 2002, the Republic of the Philippines (petitioner) through the Toll Regulatory Board (TRB) instituted expropriation proceedings against the respondent over a portion of their property. The affected area, consisting of 2,024 square meters, shall be traversed by the expansion of the San Simon Interchange, an integral component of the construction, rehabilitation and expansion of the North Luzon Expressway (NLEX Project).

In its decision, the trial court ruled that although there was no documentary evidence attached to substantiate the opinions of the banks and the realtors indicated in the Commissioners Report, the Court finds the commissioner's recommendation of the valuation of industrial lands atP1,000.00 toP1,500.00 to be fair, absent any showing that the valuation is exorbitant or otherwise unjustified. Using the recommendation of the three (3) commissioners as guide, the Court finds the amount of ONE THOUSAND THREE HUNDRED PESOS (Php1,300.00) per square meter as just compensation for the property subject of expropriation.

Petitioner appealed to the CA, arguing that the just compensation should not be more thanP300.00 per square meter. After examining the records, the CA found no reversible error in the trial courts determination of just compensation and held that the valuation ofP1,500.00 per square meter is more in consonance with the concept of just compensation based upon due consideration of all evidence.

Petitioner argues that the evidence for determining the amount of just compensation in expropriation cases should be on those factors provided in Section 5 of R.A. 8974. Considering such factors and the evidence submitted by the parties before the trial court, petitioner maintains that just compensation for the subject property should be no more than the zonal valuation (P300.00 per square meter), and in no case should it amount to the market value ofP1,300.00 per square meter adjudged by the trial and appellate courts.

ISSUE: Whether or not the CA erred in affirming the trial court's decision

HELD: Yes. Case remanded to trial court for the proper determination of just compensation.

Political Law - Determination of just compensation

Section 5 of R.A. 8974 enumerates the standards for assessing the value of expropriated land taken for national government infrastructure projects.

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 improvements on the land and for the value of the 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.

In this case, the trial court considered only (a) and (d). It also found the commissioners recommended valuation ofP1,000.00 toP1,500.00 per square to be fair and just despite the absence of documentary substantiation as said prices were based merely on the opinions of bankers and realtors.

In National Power Corporation v. Manubay Agro-Industrial Development Corporation, the recommended price of the city assessor was rejected by this Court. The opinions of the banks and the realtors as reflected in the computation of the market value of the property and in the Commissioners Report, were not substantiated by any documentary evidence.

Similarly, in National Power Corporation v. Diato-Bernal, this Court rejected the valuation recommended by court-appointed commissioners whose conclusions were devoid of any actual and reliable basis. The market values of the subject property's neighboring lots were found to be mere estimates and unsupported by any corroborative documents, such as sworn declarations of realtors in the area concerned, tax declarations or zonal valuation from the BIR for the contiguous residential dwellings and commercial establishments.

The trial court did not judiciously determine the fair market value of the subject property as it failed to consider other relevant factors such as the zonal valuation, tax declarations and current selling price supported by documentary evidence. Indeed, just compensation must not be arrived at arbitrarily, but determined after an evaluation of different factors.

Nonetheless, petitioners argument that just compensation for the subject property should not exceed the zonal valuation of P300.00 per square meter is not correct. The constitutional limitation of "just compensation" is considered to be the sum equivalent to the market value of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal action and competition or the fair value of the property as between one who receives, and one who desires to sell, it fixed at the time of the actual taking by the government. The zonal value may be one, but necessarily the sole index of the value of a realty.

It is settled that the final conclusions on the proper amount of just compensation can only be made after due ascertainment of the requirements set forth under R.A. 8974 and not merely based on the declarations of the parties. Since these requirements were not satisfactorily complied with, and in the absence of reliable and actual data as bases in fixing the value of the condemned property, remand of this case to the trial court is in order.