G.R. No. 170846 - National Power Corporation vs. Tiangco

Case Digest (G.R. No. 170846)
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Facts:

Background of the Parties and Property

Respondents: Aurellano, Lourdes, and Nestor Tiangco, registered owners of a 152,187-square-meter parcel in Barangay Sampaloc, Tanay, Rizal under TCT No. M-17865.
Petitioner: National Power Corporation (NPC), a government-owned and controlled corporation authorized under Republic Act No. 6395 to acquire private property through eminent domain for power development projects.
NPC’s project: The 500Kv Kalayaan-San Jose Transmission Line Project, which required a right-of-way over a portion of the respondents’ property totaling 19,423 square meters.

Initiation of the Expropriation Proceedings

NPC filed a complaint for expropriation on November 20, 1990, after unsuccessful negotiations with the respondents.
Respondents filed their answer to the complaint.
The Regional Trial Court (RTC) of Tanay, Rizal issued a Condemnation Order on March 14, 1991, granting NPC the right to take possession of the indicated area.
The RTC also mandated the nomination of commissioners by both parties and the appointment of a third commissioner by the Court to determine just compensation.

Proceedings and Determination of Valuation

Composition of the Board of Commissioners:

NPC’s representative: Atty. Restituto Mallo.
Respondents’ representative: Mr. Basilio Afuang, a geodetic engineer and real estate broker.
Court’s representative: Clerk of Court V, Ms. Amelia de Guzman Carbonell.

Pre-possession provisional measures:

On April 5, 1991, the RTC directed NPC to deposit P81,204.00, representing the provisional value, with the Rizal Provincial Treasurer.
NPC complied, leading to the issuance of a writ of possession on April 22, 1991.

Valuation Reports:

Commissioner Basilio Afuang submitted a report on August 7, 1993, pegging the land at P30.00 per square meter, aggregating P582,690.00, and valuing improvements at P2,093,950.00.
Respondents disputed Afuang’s valuation, offering their own assessment of P600,600.00 for the land and P4,935,500.00 for improvements.

Amended Complaint and Clarification of Project Scope:

On September 14, 1993, NPC filed an amended complaint clarifying that only 19,423 square meters were required, not the initial 20,220 square meters.
NPC clarified that it sought only an easement of right-of-way, leaving ownership of the property with the respondents.

Trial Court Judgment (February 19, 1996):

Determined a market value of P2.09 per square meter for the 19,423 square meters, set at P40,594.07 in total for the land.
Awarded P324,750.00 as just compensation for the improvements based on the Municipal Assessor’s schedule of values.

Respondents’ Reconsideration:

Respondents introduced a "Bureau of Internal Revenue Circular of Appraisal" indicating varying land values over the years (1985: P30.00/sqm; 1992: P80.00/sqm; 1994: P100.00/sqm).
Their contention: The valuation should be based on the lower figure of P30.00 per square meter.

Appeal and Appellate Court Findings

Both parties appealed, and the separate appeals were consolidated in CA-G.R. CV No. 53576.
The Court of Appeals (CA) found merit in the respondents’ arguments and rejected the trial court's 1984-based valuation.
The CA relied on a 1993 tax declaration, fixing the land’s value at P913,122.00 in total, and concluded that this higher valuation should determine the just compensation.
With regard to the improvements, the CA agreed with the trial court’s valuation of P324,750.00, later modified to P325,025.00 with legal interest from the time of possession.
NPC’s subsequent motion for reconsideration in the CA was denied by resolution on December 2, 2005.

Issues Raised on Review

NPC petitioned for review on certiorari, questioning the basis for determining just compensation.
NPC’s main arguments:

The just compensation for the 19,423 square-meter portion should be based on the property value at the time of the filing of the complaint (November 20, 1990), not on assessments conducted several years later (1984 or 1993).
The determination should align with the provisions of Section 3-A of Republic Act No. 6395 (as amended by P.D. 938), which contemplates that for easement purposes only a fee equivalent to ten percent (10%) of the market value should be paid, given that the property owner retains title.

Issues:

Determination of the Time of Taking and Appropriate Valuation

Whether the just compensation should be computed on the basis of the property’s market value as of 1984 (trial court basis) or as of 1993 (appellate court basis), or rather as of the time of filing the expropriation complaint (November 20, 1990).

Scope of Expropriation and Determination of Compensation

Whether NPC should pay for the land taken based on its full market value or only for the easement, which is capped at ten percent (10%) of the property’s market value as provided under Section 3-A of Republic Act No. 6395, considering that the acquisition pertains to a right-of-way rather than outright ownership.
The issue of whether respondents should be compensated for the full monetary equivalent of the land that is subject to limitations imposed by the transmission line project, given its potential to impair the normal use and enjoyment of the property.

Ruling:

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Ratio:

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Doctrine:

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