Just compensation, in expropriation cases, is defined as the full and fair equivalent of the loss of the property taken from its owner by the expropriator. Its true measure is not the taker's gain, but the owner's loss. The word "just" is used to modify the meaning of the word "compensation" to convey the idea that the equivalent to be given for the property to be taken shall be real, substantial, full and ample.[15]It has been consistently held, moreover, 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."[16] Evidently, the recommendations of the BOC carry with it great weight and value insofar as the determination of just compensation is concerned.
Here, it was precisely the findings of the BOC that the courts below adopted. In its assailed Decision, the CA affirmed the RTC ruling when it held that the BOC properly took into consideration the relevant factors in arriving at its recommendation of just compensation. In fact, these relevant factors were based not on mere conjectures and plain guesswork of the BOC, but on the statutory guidelines set forth in Section 5 of R.A. No. 8974, to wit:
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:
In view of the foregoing, the Court finds no error on the part of the courts below in finding that there was nothing arbitrary about the pegged amount of P5,000.00 per square meter, recommended by the BOC, as it was reached in consideration of the property's size, location, accessibility, as well as the BIR zonal valuation, among other things. We quote, with approval, the words of the appellate court:
Firstly, the BOC significantly noted that the subject property has a residential classification and is similarly situated [within] the Mapalad Serrano property (similarly affected by the Northern Link Road Project), which was earlier expropriated by the government in Civil Case No. 52-V-08. The Decision dated 22 August 2012, the RTC-Branch 172 fixed the amount of just compensation at P5,000.00 per square meter. Per Entry of Judgment, such Decision became final and executory on 08 March 2013. In the said Decision, the Mapalad Serrano property was described as having mixed residential and industrial use. In conformity with the standards set forth in Section 5, the two properties can be said to be similarly-situated as would reasonably lead to the conclusion that they have the same market value.
Secondly, the BOC took note of the existing business establishments (Foton Philippines, Inc., Shell gasoline station, Seven Eleven Convenient Store, Banco de Oro, Allied Bank and Eastwest Bank), educational institutions (St. Mary's School, Gen. T. de Leon National High School, Our Lady of Lourdes School), Parish of the Holy Cross Church, subdivisions (Bernardino Homes and Miguelito Subdivision) near the vicinity of appellee's property.
Thirdly, as reasonable basis for comparison, the BOC took into consideration the Deed of Absolute Sale executed by and between PBCOM Finance Corporation and Francisco Erwin D. & Imelda F[.] Bernardo covering a property similarly situated with the subject property where the fair market value was pegged at P8,484.85 per square meter. This comparison made by the BOC finds support in Section 5 (d) which provides that "[t]he current selling price of similar lands in the vicinity" may [be] considered as a factor in determining just compensation.[17] (Citations omitted.)
Thus, the Court cannot subscribe to the Republic-DPWH's plain and simplistic assertions that the subject property must be valued at a significantly lower price due to the presence of informal settlers, as well as the opinion of a certain Fe Pesebre. It is clear, from the records, that the BOC endeavored painstaking efforts in determining just compensation. From court promulgations on similarly situated lands to the numerous commercial establishments within the property's vicinity and even sales contracts covering nearby lots, the BOC obviously took the statutory guidelines to heart and considered several factors in arriving at its recommendation.
As for the contention of the Republic-DPWH that it is the value indicated in the property's tax declaration, as well as its zonal valuation that must govern, the Court adopts the findings of the BOC, the RTC, and the CA in ruling that the same are not truly reflective of the value of the subject property, but is just one of the several factors to be considered under Section 5 of R.A. No. 8974. Time and again, the Court has held that zonal valuation, although one of the indices of the fair market value of real estate, cannot, by itself, be the sole basis of just compensation in expropriation cases.[18]
In fine, the Court finds no cogent reason to reverse the findings of the CA, insofar as the amount of just compensation is concerned. In the absence, moreover, of any legal basis to the contrary, or any objection from the parties, the Court further affirms the appellate court's imposition of legal interest, as well as its deletion of the payment of commissioner's fee and the award of attorney's fees for being in accord with applicable law and recent jurisprudence.
Indeed, the delay in the payment of just compensation is a forbearance of money and, as such, is necessarily entitled to earn interest. Thus, the difference in the amount between the final amount as adjudged by the Court, which in this case is P15,225,000.00, and the initial payment made by the government, in the amount of P3,654,000.00 — which is part and parcel of the just compensation due to the property owner — should earn legal interest as a forbearance of money. Moreover, with respect to the amount of interest on this difference between the initial payment and the final amount of just compensation, as adjudged by the Court, we have upheld, in recent pronouncements, the imposition of 12% interest rate from the time of taking, when the property owner was deprived of the property, until July 1, 2013, when the legal interest on loans and forbearance of money was reduced from 12% to 6% per annum by Bangko Sentral ng Pilipinas Circular No. 799. Accordingly, from July 1, 2013 onwards, the legal interest on the difference between the final amount and initial payment is 6% per annum.[19]
Here, the Republic-DPWH filed the expropriation complaint on October 11, 2007. But it was able to take possession of the property on May 5, 2008, when the RTC issued the writ of possession prayed for by the Republic-DPWH following its ability and readiness to pay 100% of the property's zonal value. Thus, a legal interest of 12% per annum shall accrue from May 5, 2008 until June 30, 2013 on the difference between the final amount adjudged by the Court and the initial payment made. From July 1, 2013 until the finality of the Decision of the Court, the difference between the initial payment and the final amount adjudged by the Court shall earn interest at the rate of 6% per annum. Thereafter, the total amount of just compensation shall earn legal interest of 6% per annum from the finality of this Decision until full payment thereof.
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