G.R. No. 173520 - National Power Corp. vs. Spouses Zabala

The petitioner, National Power Corporation (Napocor), filed a complaint for eminent domain on October 27, 1994, against respondents Spouses Rodolfo Zabala and Lilia Baylon (Spouses Zabala) and others before the Regional Trial Court (RTC), Balanga City, Bataan.
Napocor sought to acquire a right-of-way easement over portions of the respondents’ properties for the construction of the 230 KV Limay-Hermosa Permanent Transmission Lines Project.
The property affected included a 6,820-square meter portion of the Spouses Zabala’s land traversed by Napocor’s transmission lines.

Napocor alleged it had an urgent need for the easement to construct transmission lines and that the parcels selected were compatible with the greatest public good and least private injury.
It claimed to have negotiated with the landowners but failed to reach an agreement.
Napocor invoked its right under Presidential Decree No. 42 to enter and take possession of the properties upon the filing of the complaint and after deposit of the assessed value for taxation purposes.
Napocor prayed for a writ of possession, authority to demolish any improvements on the property, and appointment of commissioners to determine just compensation.

The Spouses moved to dismiss the complaint on grounds that their property was needed for the expansion of Balanga City, was under preparatory development as a subdivision, and accordingly had increased value.
They argued that the transmission lines’ installation would negatively impact housing expansion, endanger residents, and depreciate their property’s value.
They also asserted that the proposed transmission line route was not the most practical or least burdensome alternative and that the assessed value was incorrect and revised to a higher amount.
They pointed out that Napocor did not make earnest direct purchase attempts before filing the complaint.

The appointed commissioners initially fixed just compensation at ₱150.00 per square meter based on ocular inspection and neighborhood inquiry but without documentary evidence.
Napocor objected to the report for lack of documentary support and requested modification with substantiation. The Spouses proposed ₱250.00 per square meter instead.
The RTC recommitted the report for further consideration.
The commissioners submitted a supplemental and final report recommending ₱500.00 per square meter, citing increases in nearby subdivision lot values, yet still lacking documentary evidence.

On June 28, 2004, the RTC rendered a Partial Decision ruling that Napocor lawfully exercised its eminent domain power and ordered payment of just compensation of ₱150.00 per square meter to the Spouses Zabala.
The RTC held that since the Spouses were deprived of the beneficial use of their land, they were entitled to the actual or basic value of the property.
Napocor appealed to the Court of Appeals (CA), arguing that the compensation amount lacked documentary support and that Section 3A of Republic Act (RA) No. 6395 limited its liability to only 10% of market value as easement fee.
On July 10, 2006, the CA affirmed the RTC’s Partial Decision.

Napocor filed a Petition for Review on Certiorari before the Supreme Court arguing:

The CA erred in affirming the ₱150.00 per square meter valuation as it was not supported by documentary evidence.
Section 3A of RA No. 6395 applies, limiting compensation to an easement fee not exceeding 10% of the land's market value.
The land was riceland devoted to palay cultivation at the time of taking, so the transmission lines would not impair its principal use.
Thus, full market value compensation was not warranted.

Whether legislative or executive rules, specifically Section 3A of RA No. 6395 limiting compensation to a maximum easement fee of 10% of market value, can bind the courts or restrict judicial determination of just compensation.

Whether the just compensation amount of ₱150.00 per square meter fixed by the RTC and affirmed by the CA is supported by adequate documentary evidence.

What is the proper basis for determining just compensation for the expropriated property traversed by high-voltage transmission lines.