Zonal valuation alone not sole basis of actual market value of land for just compensation – SC

Published March 7, 2021, 10:33 AM

by Rey Panaligan 

Zonal valuation of a piece of land set by the Bureau of Internal Revenue (BIR) “cannot be the sole basis of just compensation” in the government’s expropriation of privately-owned landholdings.

Supreme Court (SC)

It is “only one of the indices of the fair market value of a real estate,” the Supreme Court (SC) emphasized as it reiterated its previous rulings on the legal issue.

With its resolution released last March 2, the SC affirmed the Court of Appeals (CA) ruling which upheld the trial court’s decision that spouses Roger and Angelita Mirandilla should be paid P3,750,000 instead of only P575,000 for their 250 square-meter land in Valenzuela City.

Almost seven years have elapsed from the time the Valenzuela City regional trial court (RTC) handed down on June 26, 2014 its ruling in favor of the Mirandilla couple.

But the SC said: “The determination of just compensation is a judicial function because what is sought to be determined is a full, just, and fair value due to the owner…, with an equally important consideration that the payment of the same entails the expenditure of public funds, and this can only be attained by reception of evidence consisting of reliable and actual data, and the circumspect evaluation thereof.”

The SC resolution on the Mirandilla case denied the petition filed by the government through the Department of Public Works and Highways (DPWH) which was represented by the Office of the Solicitor General (OSG).

The DPWH sought the expropriation the Mirandilla property for the construction of the C-5 Northern Link Road Project from Mindanao Avenue in Quezon City to Luzon Expressway in Valenzuela City.

It offered the Mandilla couple P2,300 per square-meter for their property or a total of P575,000 for the 250 square-meter lot based on BIR’s zonal valuation. When the couple rejected the offer, the DPWH filed an expropriation case on Dec. 7, 2007.

The RTC took cognizance of the case and ordered DPWH to deposit to the court the P575,000 offer. It issued a writ of possession in favor of DPWH and created a board of commissioners to determine just compensation.

On March 6, 2014, the board recommended just compensation of P15,000 per square-meter. Among other considerations, the board took note of the increase in the market value when Valenzuela became a city, availability of utilities like water and electricity, and proximity to commercial establishments and to a previously expropriated property which the DPWH paid P15,000 per square-meter,

The RTC approved the recommendation and directed DPWH to pay P15,000 per square-meter for the Mirandilla property as just compensation.

The trial court noted that the purpose of the expropriation had already been completed and that the property had already been utilized by the motoring public.

It also said that the government had paid P15,000 per square-meter to a property which is 131.4 meters away from the Mirandilla lot and the SC had approved the payment.

DPWH elevated the issue to the CA and claimed that the just compensation fixed by the trial court was excessive and contrary to evidence, laws, and jurisprudence.

The CA did not agree except on the payment of interest on the balance of the balance of P3.175 million (after deducting the P575,000 deposited with the court) at 12 per cent yearly from Dec. 7, 2007 to July 1, 2013 and six per cent interest thereafter until fully paid.

Still undaunted, DPWH filed a petition with the SC assailing the CA’s decision handed down on Feb. 28, 2017.

The OSG claimed the CA-approved just compensation was excessive. It pointed out that the zonal valuation set by the BIR should prevail.

In resolving the issue, the SC said: “… an evaluation of the case and the issues presented leads this Court to the conclusion that it is unnecessary to deviate from the findings of fact of the RTC and the CA.”

It cited the relevant standards provided for in Republic Act No 8974 on right-of-way acquisition of private land for the government’s infrastructure projects.

Among these standards are the current selling price of similar lands in the vicinity, value declared by the owners, price of land based on ocular findings and on evidence presented, and facts and events as to enable the affected property owners to have sufficient funds to acquire a similarly situated land to rehabilitate themselves as early as possible.

“A review of the RTC’ s June 26, 2014 Decision would show that it carefully examined and applied these standards in arriving at the amount of Pl5,000.00 per square meter as just compensation, and that the valuation in other properties was just one of the many factors that it took into consideration,” the SC said.

“The CA, in turn, found the ruling of the RTC on the award of just compensation appropriate, and recognized the latter’s exercise of discretion to be absent of any abuse,” it said.

“WHEREFORE, the petition is DENIED. The February 28, 2017 Decision and August 11, 2017 Resolution of the Court of Appeals in CA-G .R. CV No. 103983 are AFFIRMED with MODIFICATION that the unpaid balance of just compensation amounting to Three Million One Hundred Seventy-Five Thousand Pesos (P3,l 75,000.00) shall earn interest at 12 percent per annum from the time of the taking on July 23, 2008 until June 30, 2013, and an interest of six percent per annum from July 1, 2013 until full payment,” the SC ruled.