G.R. No. 94193-99 - National Power Corp. vs. Jocson

Case Summary (G.R. No. 94193-99)

Factual Background

NATIONAL POWER CORPORATION instituted seven eminent domain actions seeking right-of-way easements for its Negros-Panay Interconnection Project, specifically the Bacolod-Tomonton Transmission Line, alleging urgent public necessity and failed negotiations with owners. The complaints prayed that the trial court fix provisional values under Section 2, Rule 67, authorize entry and issuance of writs of possession upon deposit, appoint commissioners to determine just compensation, and ultimately render judgment of condemnation. The subject lots were largely classified in tax declarations as sugarlands, with assessed values reflected in the municipal records and assessor's notices.

Procedural History in the Trial Court

The seven cases were initially raffled among several branches, later consolidated and re-raffled until assigned to Branch 47. After preliminary hearings and oral arguments, the court below, through respondent Judge, on 25 June 1990 fixed provisional values for the affected parcels in amounts substantially higher than assessed tax values and ordered deposit with the Philippine National Bank in escrow. NAPOCOR deposited P23,180,828.00 in compliance. Subsequent motions for reconsideration filed by certain defendants prompted an order dated 12 July 1990 increasing provisional values for the Gonzaga parcels and directing deposit of the differential, which NAPOCOR likewise complied with by depositing an additional P22,866,680.00. Thereafter the court issued an order requiring defendants to state within twenty-four hours whether they would accept and withdraw the deposited amounts as full and final satisfaction, and finally ordered immediate payment to certain defendants and conditioned issuance of writs of possession upon their receipt of the funds.

Trial Court Orders Challenged

Petitioner sought relief by certiorari to annul four interlocutory orders of respondent Judge dated 25 June, 12 July, 16 July and 18 July 1990. Those orders (a) fixed provisional values at sums that petitioner alleged were grossly excessive and inconsistent with taxing assessment, (b) increased provisional values on motions for reconsideration without hearing, (c) required defendants to manifest within twenty-four hours whether they accepted the deposited amounts as full and final satisfaction, and (d) directed the immediate release of P43,016,960.00 to defendants and conditioned the issuance of writs of possession upon their receipt of those amounts.

Petitioner’s Contentions

NAPOCOR asserted that respondent Judge acted in excess of jurisdiction and with grave abuse of discretion by ignoring the mandatory deposit rule of P.D. No. 42, by fixing provisional values on bases foreign to the statute, by amending provisional valuations after deposit and without hearing, and by effectively converting provisional deposit into final payment and surrendering judicial determination of just compensation to the defendants. Petitioner maintained that after deposit in accordance with P.D. No. 42 it had a ministerial right to immediate possession under Section 2, Rule 67, and that respondent Judge’s subsequent actions violated the prescribed procedure in Sections 3 to 8, Rule 67 and impermissibly abridged the court’s judicial function.

Respondents’ Positions

Several private respondents supported respondent Judge’s exercise of discretion and opposed the petition. One respondent, Rosario P. Mendoza, informed the Supreme Court that she had moved for reconsideration of the 18 July 1990 order and agreed that commissioners should be appointed to determine just compensation. Other respondents argued that the trial court could abbreviate the Rule 67 procedure where rights were adequately protected, citing City Government of Toledo City v. Fernandos as precedent for judicial economy when parties submit on valuation at pre-trial.

Issues Presented

The principal issues were whether respondent Judge (a) exceeded his jurisdiction or committed grave abuse by fixing and later increasing provisional values contrary to P.D. No. 42, (b) violated the mandatory deposit-and-possession scheme of Section 2, Rule 67 and P.D. No. 42 by refusing immediate issuance of writs of possession after deposit, (c) erred in increasing provisional valuations without affording petitioner a hearing, and (d) unlawfully abdicated judicial determination of just compensation by conditioning possession and declaring provisional amounts final upon defendants’ acceptance.

Supreme Court’s Ruling (Disposition)

The Supreme Court granted the petition. The Court set aside the trial court’s Orders of 25 June, 12 July, 16 July and 18 July 1990 and made permanent the temporary restraining order previously issued on 31 July 1990. The Court directed respondent Judge to fix provisional values in accordance with P.D. No. 42, allowed NAPOCOR to retain in its PNB Savings Account No. 249-505865-7 an amount equivalent to the provisional value as thus fixed and to withdraw the balance, and ordered the trial court to proceed with the eminent domain cases without unnecessary delay pursuant to the procedure in Rule 67, Rules of Court. Costs were taxed against private respondents.

Legal Basis and Reasoning

The Court found that respondent Judge committed grave abuse of discretion amounting to lack of jurisdiction by disregarding P.D. No. 42, which prescribes that, upon filing of the complaint and after due notice, the plaintiff shall deposit with the Philippine National Bank an amount equivalent to the assessed value for taxation purposes, thereby removing the court’s discretionary role in fixing the provisional deposit. The Court explained that while Section 2, Rule 67 historically allowed judicial discretion to fix a provisional deposit, P.D. No. 42 repealed that discretion insofar as the amount to be deposited and the depository were concerned; no hearing is required to make the P.D. No. 42 deposit effective. Citing precedent including Manila Railroad Company v. Paredes and the Court’s prior rulings, the Court held that once the deposit required by law is made, the depositor acquires the right to immediate possession and the trial court loses plenary control to modify the amount in substance pending the condemnation proceedings. The Court further held that respondent Judge erred in increasing provisional values on motions for reconsideration filed without hearing and in less than twenty-four hours, actions which contravened the ministerial and summary nature of the deposit-and-possession scheme. The Court condemned respondent Judge’s order directing defendants to accept the deposited amounts as final and to receive immediate payment, reasoning that determination of just compensation is a judicial function that cannot be abdicated to parties and that the trial court must follow Sections 3 to 8, Rule 67 in appointing commissioners, receiving reports, and conducting hearings before fixing just compensation. The Court

Case Syllabus (G.R. No. 94193-99)

Parties and Procedural Posture

National Power Corporation filed a special civil action for certiorari seeking annulment of four orders issued by Hon. Enrique T. Jocson in seven eminent domain cases before the Regional Trial Court, Sixth Judicial Region, Branch 47, Bacolod City.
The private respondents consisted of landowners who were defendants in the consolidated eminent domain actions, including the Gonzaga groups, Rosario P. Mendoza, Celsoy Agro-Ind. Corp., the Ano family, Mayo L. Lacson, and Lucia Gosiengfiao.
The petition challenged orders fixing and later increasing provisional values, requiring defendants to accept deposits within twenty-four hours, withholding writs of possession, and directing payment of provisional sums to defendants.
This Court issued a temporary restraining order on 31 July 1990 and later resolved the petition after receiving answers, memoranda, and supplemental pleadings from the parties.

Key Factual Allegations

On 30 March 1990 National Power Corporation filed seven eminent domain complaints to acquire right-of-way easements for its Negros-Panay Interconnection Project, specifically the Bacolod-Tomonton Transmission Line.
The cases were consolidated and raffled among trial court branches and were ultimately assigned and re-raffled several times before landing in Branch 47 and subsequently Branch 48 for interim proceedings.
On 25 June 1990 the respondent trial court issued an Order fixing provisional values for the parcels and directed deposit of the total sum of P23,180,828.00 with the Philippine National Bank.
Some defendants filed motions for reconsideration claiming much higher valuations and the respondent trial court issued an Order on 12 July 1990 increasing provisional values for certain Gonzaga properties without a hearing.
National Power Corporation deposited an additional P22,866,680.00 in compliance with the 12 July 1990 Order as certified by the bank on 13 July 1990.
On 16 July 1990 the respondent trial court directed defendants to state within twenty-four hours whether they would accept the deposited amounts as final and full satisfaction, and on 18 July 1990 ordered payment to certain defendants and conditioned issuance of writs of possession upon their receipt of the amounts.

Procedural History

The seven eminent domain complaints were initially raffled to different branches and later consolidated by Executive Judge Ramos for joint hearing.
Re-raffles were requested because of judicial absences, and in the interim Branch 48 conducted a hearing on provisional values and returned the cases to Branch 47 pursuant to internal pairing rules.
Motions to dismiss were filed in three of the cases pursuant to Section 3, Rule 67, but the respondent court proceeded to fix provisional values and to find that the petitioning entity had the lawful right to expropriate.
Petitioner filed the present certiorari petition on 24 July 1990 and this Court required comments, entertained answers and memoranda, and issued a TRO on 31 July 1990 which it later made permanent.

Issues Presented

Whether the respondent trial court acted in excess of jurisdiction or with grave abuse of discretion in fixing provisional values contrary to P.D. No. 42 and Rule 67.
Whether the respondent court erred in increasing provisional values by order on 12 July 1990 without affording the petitioner notice and hearing.
Whether the respondent court exceeded judicial authority by conditioning issuance of writs of possession on defendants' written acceptance of deposited amounts and by declaring provisional deposits as final compensation.
Whether the petitioner was entitled as a matter of law to immediate possession after depositing the required provisional amount.

Statutory Framework

Republic Act No. 6395 was the charter creating the petitioner and authorizing it to exercise the power of eminent domain.
Rule 67,