Case Summary (G.R. No. 196140)
Petitioner
National Power Corporation (NPC), through its officers and legal representatives, responsible for the unauthorized entry and occupation of respondents’ land and the computation of just compensation.
Respondents
Elizabeth Manalastas and Bea Castillo (landowners and plaintiffs), joined below by Celedonia and Enrico Mariano, who filed suit to remove the lines or obtain just compensation for the affected 26,000 sqm.
Key Dates
– 1977–1978: Construction and occupation of respondents’ land by NPC.
– July 2000: Filing of complaint in the Regional Trial Court (RTC) of Naga City.
– November 17, 2006: RTC Decision awarding just compensation and damages.
– September 9, 2010: Court of Appeals (CA) Decision affirming with modification.
– March 14, 2011: CA Resolution denying NPC’s motion for reconsideration.
– January 27, 2016: Supreme Court Decision under the 1987 Constitution.
Applicable Law
1987 Philippine Constitution, Article III, Section 9(3) (guaranteeing just compensation at fair market value when private property is taken for public use); Civil Code Articles 2208 (attorney’s fees) and 2229 (exemplary damages); jurisprudence on valuation, interest, and estoppel against the State.
Facts
Respondents alleged that NPC entered and appropriated a portion of their land for transmission lines without initiating expropriation proceedings or paying compensation. The RTC found the fair market value at Php 170.00 per sqm and awarded respondents Php 92.8 million plus attorney’s fees. The CA affirmed but reduced co-plaintiffs’ award.
Issues
- Whether the inflation rate of the peso may be included in computing just compensation.
- Whether NPC is estopped from challenging a valuation it had recommended.
- Whether the award unjustly enriched respondents.
Supreme Court’s Analysis on Inflation vs. Interest
The Court underscored that just compensation is pegged to the property’s fair market value at the time of taking and that any delay in payment is remedied by statutory interest. Inclusion of an inflation factor is redundant and unsupported by law, as the payment of interest functions as an effective forbearance remedy that accounts for currency variability.
Estoppel Inoperative Against the Government
Citing Secretary of Finance v. Oro Maura Shipping Lines and Republic v. Bacas, the Court reiterated that estoppel does not bind the State or its instrumentalities when rectifying mistakes of officials. NPC may challenge its own counsel’s erroneous recommendation, as it is the judiciary’s duty to correct legal and factual errors.
Interest and Compensation Framework
In line with Secretary of DPWH v. Spouses Tecson and Republic v. Court of Appeals, just compensation must include interest from the time of taking until full payment to place the landowner in the position held prior to expropriation. The rate was set at 12% per annum from 1978 to June
Case Syllabus (G.R. No. 196140)
Facts
- Petitioner National Power Corporation (NAPOCOR) is a government-owned and controlled corporation engaged in hydro-electric generation, power production, and construction, operation and maintenance of power infrastructure.
- Between 1977 and 1978, NAPOCOR constructed a 230 KV transmission line (Naga-Tiwi) and a 69 KV transmission line (Naga-Tinambac) on respondents’ land (TCT No. 26263), affecting some 26,919 sqm, without respondents’ knowledge or consent and without expropriation proceedings or compensation.
- Respondents Elizabeth Manalastas and Bea Castillo alleged that the presence of the power lines frustrated their intended subdivision project and caused financial loss.
- In July 2000, respondents (then joined by their mother, Celedonia, and brother, Mariano) filed a complaint in the Regional Trial Court (RTC) of Naga City seeking removal of the facilities and payment of damages, or alternatively, just compensation for 26,000 sqm at ₱800.00 per sqm.
- Celedonia and Mariano were later dismissed from the petition when the CA decision as to them attained finality.
RTC Decision
- On November 17, 2006, the RTC ordered NAPOCOR to pay just compensation totaling ₱92,827,351.00, broken down as follows:
- For Elizabeth Manalastas and Bea Castillo:
- Value of land: ₱32,033,610.00
- Interest at 6% per annum for 28 years: ₱53,816,461.00
- Total: ₱85,850,071.00
- For Celedonia Mariano and Enrico Mariano:
- Value of land: ₱1,000,200.00
- Interest at 6% per annum for 9 years: ₱5,887,080.00
- Total: ₱6,977,280.00
- Attorney’s fees: ₱100,000.00
- Costs against NAPOCOR
- For Elizabeth Manalastas and Bea Castillo:
CA Decision and Motion for Reconsideration
- On September 9,