G.R. No. 254020 - Heirs of Dimao vs. National Grid Corporation of the Philippines

Case Summary (G.R. No. 254020)

Key Dates and Procedural Posture

Relevant factual and procedural milestones included: construction of the Baloi-Agus 2 138kV Transmission Line (BATL) in 1978; TRANSCO assumption of NPC transmission functions pursuant to R.A. No. 9136; NGCP’s assumption of TRANSCO’s management in 2009; NGCP’s expropriation filing (August 15, 2014); NGCP deposit with Land Bank of the Philippines of P1,756,400.00 (equal to the BIR zonal value); writ of possession issued September 2, 2014 and possession taken September 25–26, 2014; petitioners’ answer and demand for P113,552,000.00 (October 1, 2014); RTC Decision (April 16, 2018) granting expropriation and awarding P49,622,050.00; CA Decision (July 26, 2019) affirming expropriation but deleting the additional award of P47,865,650.00; petition for review to the Supreme Court resolved in the decision under discussion.

Applicable Law and Constitutional Basis

The decision was resolved under the 1987 Constitution, specifically Article III, Section 9 (no taking of private property for public use without just compensation). Statutory framework and authorities invoked include Commonwealth Act No. 141 (Public Land Law) §112 (right-of-way on patent lands), Presidential Decree No. 635 (amendment to §112), R.A. No. 9136 (EPIRA), R.A. No. 9511 (granting NGCP franchise and expressly authorizing NGCP to exercise eminent domain subject to legal limitations), R.A. No. 8974 and R.A. No. 10752 (laws facilitating acquisition of right-of-way), and civil law principle of solutio indebiti (Art. 2154, Civil Code).

Factual Background and Expropriation Proceedings

NPC constructed BATL in 1978. NGCP instituted expropriation over a portion of Lot No. 104 in 2014 to clear and maintain the transmission line right-of-way, deposited P1,756,400.00 (BIR zonal value) with LBP, and was granted a writ of possession by the RTC. Petitioners demanded a much larger amount as just compensation and the parties failed to settle, prompting the appointment of commissioners and adjudication of compensation.

RTC Ruling and Award

The RTC declared NGCP had lawful right to take 11,460 sq. m. of the subject lot, directed NGCP to deposit the deficiency over the initial deposit (P47,865,650.00) for a total just compensation of P49,622,050.00, and ordered annotation of the decision on the title and issuance of tax declaration in NGCP’s name for the expropriated portion. NGCP’s motion for partial reconsideration was denied, and NGCP appealed to the Court of Appeals.

Court of Appeals Ruling and Modification

The CA affirmed the RTC’s recognition of NGCP’s right to expropriate but deleted the additional award of P47,865,650.00. The CA relied on §112 of C.A. No. 141 to the effect that free-patent lands are subject to a 60-meter right-of-way for government and public or quasi-public enterprises, allowing compensation only for improvements. The CA also noted the BATL’s construction in 1978 and the fact that petitioners’ predecessor acquired title only in 2012, concluding petitioners could not claim actual loss attributable to the 1978 taking. The CA further found no evidentiary basis for compensation for preexisting improvements as of 1978.

Issues Presented to the Supreme Court

The Supreme Court framed the central issues as: whether petitioners are entitled to just compensation; and, if so, what the correct reckoning date for computing just compensation is. Petitioners challenged the validity and applicability of C.A. No. 141 §112, asserted that newer statutes (R.A. No. 8974 and R.A. No. 10752) superseded §112, contended the taking occurred only when NGCP filed suit in 2014 (not 1978), asserted continuous possession since 1955 (free patent issuance), and urged that NGCP’s internal valuation of improvements (P62,822,899.00) should control. NGCP defended application of §112, asserted its franchise and R.A. No. 9511 authorize eminent domain, maintained the taking occurred in 1978, and alleged that many improvements were planted after NGCP assumed operation and some were maliciously planted.

Legal Principles on Eminent Domain and Reckoning Point

The Court reiterated that eminent domain is a sovereign power that may be delegated by statute to government agencies or quasi-public entities, and that such delegation must be rooted in law and exercised within its limits. Under prevailing doctrine, just compensation is measured as the full and fair equivalent of the property taken and is determined as of the earlier of the date of actual taking or the filing of the complaint. The Court reviewed jurisprudence holding that the installation of transmission lines and the consequent permanent burdens on land constitute a taking at the time of construction and that owners are entitled to compensation measured at that time.

Application to the Present Case — Date of Taking

Applying these principles, the Court concluded the taking occurred in 1978 when the BATL was constructed and NGCP’s predecessor entered and devoted the land to public use, permanently affecting beneficial enjoyment. Petitioners themselves treated 1978 as the reckoning point in their pleadings by demanding interest and rents from that year; the existence of the line since 1978 was stipulated and corroborated by the commissioners’ report and RTC findings. Because petitioners were not the registered owners at the time of construction, they cannot claim just compensation measured from 1978.

Application of C.A. No. 141 §112 and Patent Status

The Court held §112 of C.A. No. 141 applicable to lands derived from a free patent, which subjects such lands to a right-of-way not exceeding 60 meters for public and certain quasi-public uses, allowing damages only for improvements. Petitioners’ title stems from a homestead (free) patent issued in 2012; thus the area traversed by the BATL (30 meters wide) fell within the 60-meter right-of-way. The Court found that petitioners’ free patent application constituted an acknowledgment of the land’s public nature and noted that mere long possession does not convert public land to private ownership for purposes of compensation. The Court also stressed that collateral attack on a presumptively valid statute (§112) is impermissible absent direct invalidation.

Interaction with R.A. Nos. 8974 and 10752

The Court r

Case Syllabus (G.R. No. 254020)

Case Caption, Court, and Deciding Justice

Supreme Court, Third Division, G.R. No. 254020, March 01, 2023.
Petition for Review on Certiorari filed by petitioners: Heirs of Raisa Dimao — Elias D. Comagul, Edres D. Comagul, Sapia D. Comagul, Rasmia D. Dimacaling, Salem Rascal, Saidamen D. Comagul, and Raihani D. Mangadira.
Respondent: National Grid Corporation of the Philippines (NGCP).
Decision penned by Justice Gaerlan; concurrence by Caguioa (Chairperson), Inting, Dimaampao, and Singh, JJ.

Antecedents and Background Facts

In 1978, the National Power Corporation (NPC) constructed the Baloi-Agus 2 138kV Transmission Line (BATL).
Under R.A. No. 9136 (Electric Power Industry Reform Act of 2001), the National Transmission Corporation (TRANSCO) assumed NPC’s high-voltage transmission functions; in turn, respondent NGCP assumed management, operation, and maintenance of TRANSCO’s nationwide transmission business on January 15, 2009.
NGCP required clearance and cutting of tall vegetation and other hazardous improvements within the transmission line right-of-way corridors to perform its mandate.
On August 15, 2014, NGCP instituted expropriation proceedings involving 11,640 square meters of Lot No. 104, Gss-10-000286, Barangay Basagad, Baloi, Lanao del Norte, covered by Katibayan ng Orihinal na Titulo (KOT) Blg. P-19-080, registered in the name of the late Raisa A. Dimao ("Subject Property").
NGCP prayed for a writ of possession authorizing entry and possession of the subject property for maintenance of the BATL.
NGCP deposited P1,756,400.00 with the Land Bank of the Philippines (LBP), representing 100% of the Bureau of Internal Revenue (BIR) Zonal Value of the subject property.
On September 2, 2014, the Regional Trial Court (RTC), Lanao del Norte, Branch 4, issued a writ of possession; NGCP was placed in possession on September 25 and 26, 2014.
On October 1, 2014, petitioners filed an Answer demanding just compensation of P113,552,000.00 with accrued interest and rentals from the time of taking.
Parties failed to settle; RTC appointed a panel of commissioners to determine just compensation.

RTC Disposition

On April 16, 2018, the RTC rendered a Decision granting the complaint for expropriation and awarding just compensation of P49,622,050.00.
RTC declared NGCP had lawful right to take 11,460 square meters of the subject lot and directed NGCP to deposit the deficiency of P47,865,650.00 to the account of Rasmia D. Dimaciling as representative of petitioners, noting NGCP had only deposited P1,756,400.00.
RTC ordered annotation of its Decision on KOT Blg. P-19,080 and directed the Municipal Assessor of Balo-i, Lanao del Norte to issue a tax declaration in NGCP’s name for the portion subject to the case.
NGCP’s motion for partial reconsideration was denied by RTC on August 9, 2018.

Court of Appeals Disposition

NGCP appealed to the Court of Appeals (CA) under Rule 41.
On July 26, 2019, CA rendered Decision affirming RTC’s determination of NGCP’s right to take the subject property but modified RTC by deleting the additional award of P47,865,650.00 as just compensation.
CA noted the expropriated area was only 30 meters in width and that petitioners’ property originated from a free patent, making it subject to a 60-meter easement of right-of-way in favor of the government under Section 112 of Commonwealth Act No. 141.
CA reasoned that under Section 112, the owner may claim only for the value of improvements on the subject property; CA observed the taking occurred in 1978 and petitioners’ predecessor-in-interest only acquired title in 2012, precluding petitioners from claiming actual loss for land value.
CA found no evidentiary basis for awarding compensation for improvements as to existence of improvements in 1978; evidence only pertained to improvements planted at time of filing complaint.
CA’s decretal portion: appeal partially granted; CA affirmed RTC Decision with modification deleting the award of Php47,865,650.00 and retained directions to annotate the KOT and issue tax declaration in NGCP’s name for the subject portion.

Issues Presented to the Supreme Court

Whether petitioners are entitled to just compensation.
If so, what is the correct reckoning point for computation of just compensation.

Petitioners’ Contentions (as presented)

Section 112 of C.A. No. 141 applies only when the expropriator is a government entity; it is inapplicable to NGCP.
Section 112, insofar as it allows taking of private property by mere notice without payment of just compensation, is oppressive, confiscatory, and unconstitutional.
Section 112 has been superseded by R.A. No. 8974 and later by R.A. No. 10752; Section 2 of R.A. No. 10752 obligates the State to ensure owners are promptly paid just compensation for acquisition for national government infrastructure projects.
The taking occurred at the time of filing of the Complaint in 2014, not in 1978; NPC’s 1978 entry was without warrant or color of legal authority, and NPC never sought predecessor’s permission nor instituted expropriation proceedings.
Petitioners’ occupation preceded NPC’s entry by 23 years; issuance of free patent to their predecessor constitutes proof of continuous, open, exclusive, and notorious possession since July 5, 1955.
NGCP must abide by valuation of improvements determined by NGCP’s own guidelines, which amounted to P62,822,899.00 in the Approved Unified Valuation of Crops, Plants and Trees.

Respondent’s Contentions (as presented)

Section 112 of C.A. No. 141 applies to petitioners because their title stemmed from a free patent, making property subject to 60-meter easement of right-of-way in favor of government.
The validity of Section 112 cannot be collaterally attacked by petitioners.
NGCP’s status as a quasi-public entity does not prevent application of Section 112, which applies to projects undertaken by quasi-public entities.
The taking of the subject property occurred in 1978, not in 2014; petitioners admitted this when they demanded legal interest and rents reckoned from 1978; Commissioner Gary M. Salomon’s Report substantiated construction of BATL in 1978.
Petitioners’ claim of ownership since 1955 lacks proof; predecessor’s application for a free patent acknowledges the property’s public-domain character.
Petitioners malicio