Case Summary (G.R. No. 168732)
NAPOCOR’s Plea and Counterarguments
NAPOCOR denied material allegations, argued respondents never possessed the sub-terrain portions and thus could not seek damages for deprivation, contested respondents’ proof of ownership, and characterized the tunnels as government works serving public use that either created an easement or otherwise subjected private lands to necessary burdens for a public project. NAPOCOR also raised procedural defenses in the course of appeal and post-judgment motions.
RTC Judgment (August 7, 1996): Findings and Awards
The Regional Trial Court found for respondents and ordered NAPOCOR to pay just compensation for 48,005 sq. m. at P1,000 per sq. m. (total P48,005,000.00) with 6% interest per annum from filing, reasonable monthly rentals computed at P0.68 per sq. m., P200,000.00 as moral damages, and P200,000.00 as attorney’s fees and costs. The RTC expressly denied respondents’ prayer to dismantle the underground tunnels.
Post-Judgment Proceedings and Modified Judgment (September 8, 1997)
Following execution pending appeal and disputes over appeal filings, certain respondents filed for relief from judgment asserting mistake and excusable negligence regarding the nature of the decree (they believed initially the judgment awarded only rentals and fees, not just compensation). The RTC granted relief, reduced the monetary awards by specified amounts, ordered certain rentals as deductible, and left a balance subject to later execution, while maintaining awards for moral damages and attorney’s fees as modified.
Appeals and Court of Appeals Disposition (June 8, 2005)
Both sides appealed to the Court of Appeals. The CA set aside the RTC’s modified judgment, reinstated the original August 7, 1996 decision, and further modified it by deleting the award of moral damages and reducing rentals and attorney’s fees (reduced attorney’s fees to P50,000.00 and rentals to a revised figure). The CA also directed reassessment of additional filing fees.
Issues Raised in the Supreme Court Petition
NAPOCOR’s petition for review on certiorari presented two principal contentions: (a) respondents were not deprived of beneficial use of their properties and therefore were not entitled to just compensation; and (b) even if entitled, the award was improperly computed because the valuation should be as of 1978 (time of alleged taking) and petitioner challenged the P1,000 per sq. m. figure and the propriety of awarding back rentals.
Standard of Review and Scope of Supreme Court Review
The Supreme Court reiterated the well-settled limitation on Rule 45 review: it does not generally revisit factual findings of the lower courts absent grave abuse of discretion. Jurisprudence limits the Court’s review of factual determinations made by trial and appellate courts; petitioner failed to demonstrate any grave abuse of discretion by the RTC or CA. Thus, the CA’s and RTC’s factual findings on ownership, possession, and the existence and effect of the tunnels were treated as conclusive.
Ownership of Sub-Terrain and Legal Foundation
The Court affirmed the principle in Civil Code Art. 437 that ownership of land extends to the surface and everything under it. Citing prior decisions, the Court rejected any doctrine that divides surface and subsoil ownership into distinct, separable rights that would permit a conflicting practical regime. Accordingly, the lower courts’ findings that respondents owned the surface and that petitioner occupied the substrata since 1978 were sustained; respondents therefore had ownership rights over the sub-terrain.
Taking, Eminent Domain, and Due Process Considerations
The Court analyzed whether NAPOCOR’s subterranean works amounted to a taking that required due process and payment of just compensation. It held that even if the occupation could be characterized as an easement, NAPOCOR violated respondents’ due process rights because the easement was imposed without notice, indemnity, or formal expropriation proceedings. The power of eminent domain — when properly invoked — covers both complete takings and impositions of burdens (easements) and requires that takings for public use be accompanied by payment of just compensation and compliance with due process. Because NAPOCOR did not follow such procedure, it risked liability and could be required to pay full compensation where the imposed burden practically deprived owners of normal beneficial use.
Practical Effect of the Tunnels on Use and Value
The trial court found and the CA sustained that the underground tunnels materially interfered with respondents’ use of the land: refusal of a deep-well permit, denial of bank loan collateral acceptance, and evident danger due to geologic instability were concrete examples. That interference amounted to deprivation of ordinary use and significant diminution in value, supporting the conclusion that respondents were entitled to just compensation comparable to full land value rather than a mere easement fee.
Date of Taking and Valuation Rule
The Court reiterated the governing rule on valuation in expropriation: the general rule fixes just compensation as of the date of filing of the complaint (Rule 67, Sec. 4), but recognized exceptions where valuation as of the date of actual taking is appropriate if justified. The Court applied the principles from precedents (including Mangondato) to determine the date relevant for valuation. It found that NAPOCOR’s initial entrance
...continue readingCase Syllabus (G.R. No. 168732)
Case Caption and Nature of the Proceeding
- Petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul the Court of Appeals (CA) Decision dated June 8, 2005 in C.A.-G.R. CV No. 57792.
- Petitioner: National Power Corporation (NAPOCOR).
- Respondents/Plaintiffs below: Lucman G. Ibrahim (in his personal capacity and in behalf of his co-heirs Omar G. Maruhom, Elias G. Maruhom, Bucay G. Maruhom, Mamod G. Maruhom, Farouk G. Maruhom, Hidjara G. Maruhom, Rocania G. Maruhom, Potrisam G. Maruhom, Lumba G. Maruhom, Sinab G. Maruhom, Acmad G. Maruhom, Solayman G. Maruhom, Mohamad M. Ibrahim and Caironesa M. Ibrahim).
- Relief sought below: recovery of possession of land and damages; in this Court, annulment of CA decision restoring RTC original decision (with modifications by CA) awarding just compensation and other sums.
Factual Background
- On November 23, 1994, respondents instituted an action against NAPOCOR before the Regional Trial Court (RTC) of Lanao del Sur.
- Respondents claimed ownership of parcels described in Survey Plan FP (VII-5) 2278 totaling 70,000 square meters, divided into: Lot 1 — 31,894 sq.m.; Lot 2 — 14,915 sq.m.; Lot 3 — 23,191 sq.m.
- Allegation: in or about 1978, NAPOCOR, through alleged stealth and without respondents’ knowledge or consent, took possession of the sub-terrain area of the lands and constructed underground tunnels.
- Discovery and confirmation:
- The existence of the tunnels was discovered by respondents sometime in July 1992.
- Confirmed on November 13, 1992 by NAPOCOR via a memorandum from its Acting Assistant Project Manager.
- Uses of the tunnels: allegedly employed by NAPOCOR in siphoning water of Lake Lanao and in operation of Agus II, III, IV, V, VI, VII projects located in Saguiaran, Lanao del Sur; Nangca and Balo-i in Lanao del Norte; and Ditucalan and Fuentes in Iligan City.
- Attempts to use surface rights: on September 19, 1992, respondent Omar G. Maruhom requested a permit from Marawi City Water District to construct/install a motorized deep well in Lot 3; request denied because deep well construction would cause danger to lives and property due to underground tunnels.
- Respondents’ demands and claimed injuries:
- October 7, 1992: respondents demanded NAPOCOR pay damages and vacate the sub-terrain portion; NAPOCOR refused.
- Respondents claimed tunnels endangered lives and property given Marawi City’s local volcanic and tectonic activity; alleged sleeplessness, serious anxiety, and shock entitling them to moral damages and exemplary damages.
- NAPOCOR’s position in answer and counterclaim:
- Denied material allegations.
- Affirmative/special defenses: (1) failure to state a cause of action because respondents allegedly never possessed the sub-terrain portion; (2) respondents failed to show proof of ownership; (3) the tunnels are a government project for the benefit of all and private lands are subject to such easement as may be necessary.
RTC Decision — August 7, 1996 (Decretal Portion)
- Court rendered judgment with the following principal orders:
- Denied plaintiffs’ prayer for NAPOCOR to dismantle underground tunnels in Lots 1, 2, and 3.
- Ordered NAPOCOR to pay plaintiffs the fair market value of the 70,000 sq.m. covering Lots 1, 2, and 3 less area of 21,995 sq.m. at P1,000.00 per sq.m., or a total of P48,005,000.00 for remaining unpaid portion of 48,005 sq.m., with 6% interest per annum from the filing of the case until paid.
- Ordered NAPOCOR to pay plaintiffs a reasonable monthly rental of P0.68 per sq.m. on total area of 48,005 sq.m. effective from its occupancy in 1978, amounting to P7,050,974.40.
- Ordered NAPOCOR to pay P200,000.00 as moral damages.
- Ordered NAPOCOR to pay P200,000.00 as attorney’s fees and costs.
Post-Trial Motions, Execution Pending Appeal, and Procedural Developments
- August 15, 1996: Ibrahim and co-heirs filed an Urgent Motion for Execution of Judgment Pending Appeal.
- NAPOCOR filed Notice of Appeal by registered mail on August 19, 1996.
- NAPOCOR later filed opposition to execution and a motion for reconsideration of the RTC Decision received August 9, 1996.
- August 26, 1996: NAPOCOR filed a Manifestation and Motion withdrawing its Notice of Appeal to allow hearing of motion for reconsideration.
- August 28, 1996: RTC issued Order granting execution pending appeal and denying NAPOCOR’s motion for reconsideration; NAPOCOR received the Order on September 6, 1996.
- September 9, 1996: NAPOCOR filed Notice of Appeal by registered mail which RTC denied as filed out of time.
- Execution pending appeal was implemented and NAPOCOR funds were garnished by respondents.
Petition for Relief from Judgment and RTC Modified Judgment — September 8, 1997
- October 4, 1996: Several co-heirs filed a Petition for Relief from Judgment asserting:
- They believed in good faith the decision awarded only damages, rentals, and attorney’s fees as prayed in complaint, and did not realize the award effectively decreed payment of just compensation (i.e., alienation of property).
- Learned on August 26, 1996 that award included fair market value and thus alienation; by then appeal period had expired.
- They were prevented by fraud, mistake, accident, or excusable negligence from appealing within the reglementary period.
- They would not have agreed to alienation of inherited land.
- RTC granted the petition and rendered a modified judgment dated September 8, 1997 ordering:
- Reduction of the judgment award for fair market value of P48,005,000.00 by P9,526,000.00 or difference by P38,479,000.00 and by further sum of P33,603,500.00 subject of the execution pending appeal, leaving a difference of P4,878,500.00 which may be subject of execution upon finality of the modified judgment, with 6% interest per annum from filing of the case until paid.
- Awarding P1,476,911.00 to petitioners (the co-heirs who filed the petition) as reasonable rental deductible from awarded sum of P7,050,974.40 pertaining to plaintiffs.
- Ordering defendant to pay plaintiffs P200,000.00 as moral damages and a further sum of P200,000.00 as attorney’s fees and costs.
Appeals to the Court of Appeals and CA Decision — June 8, 2005
- Both respondent Ibrahim and NAPOCOR appealed the RTC modified judgment to the CA.
- CA Decision dated June 8, 2005:
- Set aside the RTC modified judgment and reinstated the original RTC Decision dated August 7, 1996.
- Further modified the original decision by deleting the award of moral damages and reducing the amounts of rentals and attorney’s fees to P6,888,757.40 and P50,000.00, respectively.
- Directed the Clerk of Court of RTC Lanao del Sur to reassess and determine additional filing fee to be paid by Plaintiff-Appellant Ibrahim based on total amount of damages s