Art. 430.

Every owner may enclose or fence his land or tenements by means of walls, ditches, live or
dead hedges, or by any other means without detriment to servitudes constituted thereon.
171352, September 16, 2015)
Q: The Republic of the Philippines filed before the RTC a complaint against an unknown owner for the
expropriation of a lot located in Barangay Ugong, Valenzuela City for the construction of the C-5
Northern Link Road Project, otherwise known as North Luzon Expressway (NLEX) Segment 8.1,
traversing from Mindanao Avenue in Quezon City to the NLEX in Valenzuela City. Petitioner applied
for a writ of possession over the subject lot on May 5, 2008, which was granted, and was required to
deposit with the court the amount of P550,000.00 (i.e., at P2,750.00/sq. m.) as provisional deposit.
However, respondent Macabagdal was substituted as party-defendant upon sufficient showing that
the subject lot is registered in her name under the Transfer Certificate Title of the lot. Respondent did
not oppose the expropriation, and received the provisional deposit. The RTC appointed a board of
commissioners to determine the just compensation for the subject lot, which thereafter submitted
report dated May 23, 2014, recommending a fair market value of P9,000.00/sq. m. as the just
compensation for the subject lot, taking into consideration its location, neighborhood and land
classification, utilities, amenities, physical characteristics, occupancy and usage, highest and best
usage, current market value offerings, as well as previously decided expropriation cases of the same
RTC involving properties similarly situated in the same barangay. The Court of Appeals affirmed this
decision, which brought up the that the CA did not rule on the issue of the applicable rate of interest
which, in this case, should be at twelve percent (12%) per annum. from the filing of the complaint
until June 30, 2013, and thereafter, at six percent (6%) per annum until full payment. Is the 12% per
annum interest on the unpaid balance, computed from the time of the taking of the subject lot until
full payment, valid?
A: No. The value of the landholdings should be equivalent to the principal sum of the just compensation due,
and interest is due and should be paid to compensate for the unpaid balance of this principal sum after taking
has been completed. From the date of the taking of the subject lot on May 5, 2008 when the RTC issued a writ
of possession in favor of petitioner, until the just compensation therefor was finally fixed at P9,000.00/sq. m.,
petitioner had only paid a provisional deposit in the amount of P550,000.00 (i.e., at P2,750.00/sq. m.). Thus,
this left an unpaid balance of the "principal sum of the just compensation," warranting the imposition of
interest. It is settled that the delay in the payment of just compensation amounts to an effective forbearance
of money, entitling the landowner to interest on the difference in the amount between the final amount as
adjudged by the court and the initial payment made by the government. It bears to clarify that legal interest
shall run not from the date of the filing of the complaint but from the date of the issuance of the Writ of
Possession on May 5, 2008, since it is from this date that the fact of the deprivation of property can be
established. As such, it is only proper that accrual of legal interest should begin from this date. (Republic v.
Leonor Macabagdal, G.R. No. 227215, January 10, 2018)
Q: On February 12, 2013, DPWH, led before the RTC a complaint against respondent Belly, seeking to
expropriate the lots registered in the name of respondent under Transfer Certificate of Title (TCT)
Nos. V-92188 8 and V-92191 9 with a total area of 1,671 sq. m. (subject lots), together with the
improvements thereon with an aggregate surface area of 2,121.7 sq. m. (collectively, subject
properties), located in Kowloon Industrial Compound, Tatalon Street, Brgy. Ugong, Valenzuela City,
for the construction of the Mindanao Avenue Extension Project, Stage II-C (Valenzuela City to Caloocan
City). DPWH manifested that it is able and ready to pay Belly the amounts of P6,684,000.00 (i.e., at
P4,000.00/sq. m.) and P11,138,362.74, representing the combined relevant zonal value of the subject
lots and the replacement cost of the improvements thereon, respectively.
In her answer, Belly contended that the offer price is unreasonably low, and that she should be
compensated the fair market value of her properties at the time of taking, estimated to be at
P25,000.00/sq. m. Moreover, the fair and just replacement cost of the improvements on the subject
lots should be in the amount of P22,276,724.00, pursuant to Section 10 of the Implementing Rules and
Regulations of Republic Act No. (RA) 8974. DPWH was eventually granted a Writ of Possession, after
Belly received the amount of P17,822,362.74, representing 100% of the zonal value of the subject
properties. CIVIL LAW
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The RTC appointed a board of commissioners to determine the just compensation for the properties
which, thereafter, submitted its Commissioner's Report dated June 10, 2013, recommending the
amounts of P7,000.00/sq. m. and P12,000.00/sq. m. as the just compensation for the subject lots and
the improvements thereon, respectively, and the payment of six percent (6%) legal interest therefor,
reckoned from the time of taking.
A: No. The construction of the Mindanao Avenue Extension Project, Stage II-C (Valenzuela City to Caloocan
City) involves the implementation of a national infrastructure project. Thus, for purposes of determining the
just compensation, RA 8974 and its implementing rules and regulations (IRR), which were effective at the
time of the filing of the complaint, shall govern
The replacement cost method is premised on the principle of substitution, which means that "all things being
equal, a rational, informed purchaser would pay no more for a property than the cost of building an
acceptable substitute with like utility."
The case of Republic v. Mupas (Mupas) instructs that in using the replacement cost method to ascertain the
value of improvements, the courts may also consider the relevant standards provided under Section 5 of RA
8974, as well as equity consistent with the principle that eminent domain is a concept of equity and fairness
that attempts to make the landowner whole. Thus, it is not the amount of the owner's investment, but the
"value of the interest" in land taken by eminent domain, that is guaranteed to the owner.
While there are various methods of appraising a property using the cost approach, Mupas declared that the
use of the depreciated replacement cost method is consistent with the principle that the property owner shall
be compensated for his actual loss, bearing in mind that the concept of just compensation does not imply
fairness to the property owner alone, but must likewise be just to the public which ultimately bears the cost
of expropriation. The property owner is entitled to compensation only for what he actually loses, and what he
loses is only the actual value of the property at the time of the taking. Hence, even as undervaluation would
deprive the owner of his property without due process, so too would its overvaluation unduly favor him to
the prejudice of the public.
It must be emphasized that in determining just compensation, the courts must consider and apply the parameters
set by the law and its implementing rules and regulations in order to ensure that they do not arbitrarily fix an
amount as just compensation that is contradictory to the objectives of the law. Be that as it may, when acting
within the parameters set by the law itself, courts are not strictly bound to apply the formula to its minutest detail,
particularly when faced with situations that do not warrant the formula's strict