G.R. No. 160080 - National Power Corp. vs. Villamor

NPC is a government-owned and controlled corporation created by Republic Act No. 6395, as amended by Presidential Decree No. 938.
Its primary objective is to develop hydro-electric power and produce electricity from various sources, with the explicit power to exercise eminent domain.

As part of its Leyte-Cebu Interconnection Project, NPC required the installation of 230 KV Talisay-Compostela transmission lines traversing parcels in Danao City and Carmen, Cebu.
Two specific parcels located in Cantipay, Carmen, Cebu, owned by respondent Carlos Villamor, contained various fruit-bearing trees (e.g., mango, coconut, avocado) and non-fruit bearing trees (e.g., mahogany).
On 22 July 1996, NPC filed a complaint for eminent domain before the Regional Trial Court (RTC), Branch 25, Danao City, Cebu, under Civil Case No. DNA-389.
The lands involved were:

NPC deposited an amount with the Philippine National Bank equal to the assessed value on the tax declaration.
The court created a board of three commissioners to determine just compensation:

Sebastian C. Ocon, Right-of-Way Supervisor of NPC.
Nicolas Capoy, Collection Agent of the Bureau of Internal Revenue.
Fortunato C. Ligutom, Municipal Assessor of Carmen, Cebu, who served as Chairman.

The board issued a Commissioners’ Report recommending P433 per square meter based on:

Inspection reports.
Documentary exhibits.
Valuation opinions submitted by various agencies (including Regional Investors, Inc., Fil-Asia Agent, International Exchange Bank, Rural Bank of Carmen, Municipal Assessor of Carmen, and the owner's own proposal).
Consideration of an alternative proposed value of P350 per square meter due to the lands’ classification as part of an industrial zone (per RDC Res. No. 38, s. 1993) and an average appraisal value of P290 per square meter.

Villamor filed his Comment to the Commissioners’ Report on 24 November 1997, highlighting:

A similar adjacent expropriation case (Civil Case No. DNA-426) where just compensation was initially fixed at P600 per square meter and later reduced to P450.
The existence of a 15.23 square meter portion of Lot 4 that, due to isolation from the remainder, would not be used productively unless included in the area for compensation.

A just compensation of P450 per square meter for the affected portions of Lot 3 and Lot 4.
Specific monetary awards for the total areas:

Villamor subsequently filed a Motion for Reconsideration to include the small 15.23 square meter portion of Lot 4, which led the court on 22 January 1998 to issue a Resolution amending its decision and awarding an extra P6,853.50.

NPC appealed the RTC decision (docketed as CA-G.R. CV No. 61749).
On 19 August 2002, the Court of Appeals dismissed NPC’s appeal and affirmed the RTC’s decision.
NPC’s subsequent Motion for Reconsideration before the Court of Appeals was denied by a Resolution dated 28 August 2003.

NPC contended that under Section 3A of its charter, when a transmission line traverses private property, only an easement of right-of-way is acquired, not full ownership, allowing the landowner to continue agricultural use.
Villamor countered that:

A portion of the affected land is used as the site for a transmission tower.
The permanent limitations imposed by the transmission lines effectively deprive him of the full functional use of his land.
Similar cases had already set the compensation rate at P420 to P450 per square meter.

Whether the fair market value determined at P450 per square meter should be reduced on the basis that NPC is only acquiring an easement of right-of-way rather than full ownership of the property.
Whether the classification of the affected lands as agricultural warrants a lesser just compensation.
Whether NPC’s reliance on Section 3A of RA 6395 is applicable in this case to limit its obligation to compensate only a right-of-way easement fee.