G.R. No. 193455 - National Power Corp. vs. Heirs of Ramoran

The petitioner, National Power Corporation (NPC), is a government-owned and controlled corporation established under Republic Act No. 6395.
NPC initiated expropriation proceedings by filing a Complaint in the Regional Trial Court (RTC) on 10 February 1995 against respondents, who were the heirs of Gregorio Ramoran and other claimants.
The subject property, covered by Original Certificate of Title (OCT) No. P-8665, was originally recorded as having an area of 91,212 square meters, although the expropriation proceedings initially sought only 67,984 square meters.

On 23 February 1995, NPC sent a Notice to Take Possession to the respondents, announcing that an assessed value deposit of ₱2,030 had been made with the Philippine National Bank in Lingayen, Pangasinan.
NPC filed an Urgent Ex-Parte Motion for the issuance of a Writ of Possession on 27 February 1995, which culminated in the issuance of the writ on 2 March 1995, establishing the starting date for possession.

Several parties, including Spouses Arnulfo and Priscilla Versoza, Spouses Domingo and Dominga Gomez, and Erlinda Gomez-Ocay (on her own behalf and that of several other Gomez family members), filed motions for intervention asserting their legal interest over the property.
The intervenor-respondents argued that the property area should reflect the full 91,212 square meters as evidenced by the certificate of title, rather than the 67,984 square meters initially claimed by NPC.
Despite the discrepancy, NPC did not dispute that it had taken possession of the entire area indicated by the title.

On 24 October 1995, the RTC issued an order for the creation of a committee to determine the amount of just compensation.
On 18 May 1998, the trial court adopted a recommendation fixing the compensation rate at ₱10 per square meter, yielding a total sum of ₱1,029,840 for the 67,984-square-meter portion.
Subsequent compromise agreements were made:

On 30 May 2000, a partial compromise agreement was reached regarding the 67,984-square-meter portion.
On 3 October 2000, a further compromise agreement was executed to determine the shares for the remaining 23,228 square meters.

On 2 May 2007, the RTC ordered NPC to pay the amount of ₱1,675,290 for the remaining portion of the property, with legal interest stipulated to accrue at the rate of 12% per annum from the filing of the Complaint until full payment.

NPC, in its Motion for Partial Reconsideration, contended that the applicable legal interest should be only 6% per annum rather than the imposed 12%, citing the decision in National Power Corporation v. Angas.
The petitioner’s argument further emphasized that no unjustified delay occurred since it only depended on the available (albeit incorrect) tax declaration, and that the proceedings’ delays were attributable to factors external to its control, including interventions by other parties and administrative delays by court-appointed commissioners.
Prior decisions and precedents, including those cited by the Court of Appeals (CA), supported the imposition of 12% legal interest on the premise that the expropriation amounts to an effective forbearance of money.

Whether the Court of Appeals properly sustained the application of 12% legal interest on the unpaid just compensation for the remaining portion of the property instead of the 6% rate proposed by the petitioner.

The contention centers on the nature of the transaction in expropriation cases—whether it is akin to a loan or forbearance of money causing a justification for 12% interest.
A related issue is the appropriate date from which the accrual of legal interest should commence, given that NPC took possession via a Writ of Possession issued on 2 March 1995, rather than from the date of filing the Complaint.