G.R. No. 60225-26 - National Power Corp. vs. Angas

On April 13 and December 3, 1974, the National Power Corporation (NPC) filed Civil Case Nos. 2248 and 2277 in the Court of First Instance of Lanao del Sur to expropriate parcels of land in Limogao, Saguiaran, Lanao del Sur for a hydro-electric power project and related constructions.
After joint trial and hearings before court-appointed commissioners, on June 15, 1979, the lower court rendered a consolidated decision condemning the lands and awarding just compensation “with legal interest thereon … until fully paid.”

NPC filed two motions for reconsideration of the June 15, 1979 decision; both were denied and the decision became final and executory.
On May 16, 1980, private respondent Sittie Sohra Batara filed an ex parte motion for execution, computing legal interest at 6% per annum. The court granted the motion, directed NPC to deposit the awarded sums plus interest at 6%, and NPC complied.
On February 10, 1981, private respondent Pangonatan Cosna Tagol moved for recomputation of interest at 12% per annum pursuant to Central Bank Circular No. 416; on February 11, 1981, the court granted the motion. Similar motions by other respondents resulted in orders dated March 10 and August 28, 1981, applying 12% interest.
NPC filed a motion for reconsideration alleging that Article 2209 of the Civil Code (6% interest) applied and that the final decision could not be modified. On January 25, 1982, the lower court denied the motion, holding that Circular 416 (12% interest) was applicable under Presidential Decree 116.

NPC filed an original action for certiorari and mandamus before the Supreme Court to determine the correct legal interest rate for just compensation and sought a writ of preliminary injunction to enjoin enforcement of the lower court’s orders awarding 12% interest.

Whether the legal rate of interest on just compensation for expropriated lands is governed by Article 2209 of the Civil Code (6% per annum) or by Central Bank Circular No. 416 (12% per annum).
Whether the lower court erred in modifying its final and executory judgment by recomputing interest at 12% per annum.