Case Summary (G.R. No. 6250)
Key Dates and Applicable Law
- Expropriation complaint filed by NPC on January 23, 2006.
- Regional Trial Court (RTC) of Pili, Camarines Sur issued its decision on December 20, 2010.
- Court of Appeals (CA) affirmed the RTC decision on September 1, 2015.
- Supreme Court decision rendered on November 20, 2017.
The 1987 Philippine Constitution governs the case, particularly provisions on just compensation for expropriated private property, including Article III, Section 9. Republic Act No. 8974 on acquisition of right-of-way also applies.
Subject of Expropriation
NPC sought to acquire easement of right-of-way over four parcels with a total area of 49,173 square meters, portions of which were to be occupied for steel transmission lines and wooden electric poles as part of the Naga-Tiwi and Naga-Daraga transmission lines projects. The nature of the taking was for public use as mandated under the Constitution.
Disputed Classification and Valuation of Property
The respondents contested NPC’s classification of the land as agricultural per the tax declarations, arguing the properties had been reclassified several years earlier as residential, commercial, and industrial. Reclassification was evidenced by municipal resolutions and ordinances, Department of Agrarian Reform conversion orders, and certifications by the Municipal Assessor. This reclassification substantially increased the zonal valuation and, consequently, just compensation, from the basis proposed by NPC.
Initial Proceedings and Lower Courts’ Findings
The RTC issued an expropriation order, accepted the appraisal committee’s findings, and fixed just compensation at PhP 47,064,400 based on the reclassified values. It also recognized the respondents’ claim for consequential damages totaling PhP 22,227,800 for “dangling” portions—land between transmission lines rendered unusable. NPC’s assertion that it had taken possession in the 1970s was rejected for lack of proof and legal authority. The RTC awarded interest at 6% per annum on just compensation and 12% on consequential damages, plus attorney’s fees. The CA affirmed these rulings.
Issues on Appeal
NPC raised mainly the following issues:
- Whether the valuation date for just compensation should be reckoned at the time of alleged actual taking in the 1970s rather than the 2006 filing of the expropriation complaint.
- Whether just compensation should be based solely on the agricultural classification and corresponding BIR zonal valuation under the tax declarations.
- Whether the award of consequential damages for the dangling portions was proper.
Legal Principles Governing Expropriation and Valuation
The Court reasserted established criteria to determine a “taking” under the power of eminent domain, referencing the seminal Republic v. Vda. De Castellvi case. The date for reckoning just compensation is generally the earlier of the actual taking or the filing of the complaint (Rule 67, Sec. 4). The Court recognized exceptions when prior taking without formal proceedings unlawfully deprived the owner of compensation, justifying valuation as of the inverse condemnation filing date, but found such exceptional circumstances absent here.
Rejection of NPC’s Claim of Early Taking and Valuation Date
NPC’s claim of actual taking in the 1970s was unsubstantiated in the complaint or at trial. NPC’s prior negotiations related to different transmission lines and did not establish formal possession or taking over the subject land. Accordingly, the Court held the taking occurred upon filing of the complaint on January 23, 2006, making that date the proper baseline for valuation.
Just Compensation and Land Classification
Under the Constitution, just compensation means the full and fair equivalent of the property taken, reflecting the owner’s loss, not the taker’s gain. The valuation includes consideration of factors such as land classification, current market value, developmental costs, tax declarations, and zoning valuations (RA 8974, Sec. 5). Classification for valuation purposes is a discretionary judicial function, separate from the local government’s power to reclassify land for land use. The Court held that the trial and appellate courts properly adopted the land classification as residential, commercial, and industrial based on legislative enactments by the local government and certified assessments, despite conflicting earlier tax declarations.
Award of Consequential Damages for “Dangling” Land
The Court upheld the award of consequential damages under Rule 67, Section 6, recognizing that where only part of a property is expropriated, the owner is entitled to damages for harm to the remaining property. “Dangling” areas rendered unusable by the high-voltage transmission lines suffered loss in value due to physical impracticality and hazardous conditions. The appraisal committee’s ocular findings and valuation were accorded probative weight over NPC’s assertion that agricultural use was still possible, given the dangers posed by the infrastructure.
Rejection of NPC’s Claim for Deduction of Consequential Benefits
NPC argued that any consequential benefits to the remaining properties from the transmi
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Facts and Antecedents
- National Power Corporation (NPC) filed an expropriation complaint on January 23, 2006 against the Marasigan respondents, owners of four parcels of land in Barangays Sagurong, San Agustin and San Jose, Pili, Camarines Sur.
- The expropriation aimed to acquire an easement of right-of-way for constructing and maintaining transmission lines: Naga-Tiwi 230 KV (Single Bundle), Naga-Tiwi 230 KV (Double Bundle), and 69 KV Naga-Daraga Transmission Lines.
- The total area NPC sought easement for was 49,173 square meters from the subject lands, portions of which were claimed to be agricultural based on tax declarations.
- NPC offered PhP 299,550.50 based on tax declaration classification and BIR zonal valuation as agricultural properties.
- Respondents did not oppose expropriation but contested the agricultural classification, asserting reclassification to industrial, commercial, and residential since 1993, evidenced by local resolutions, municipal ordinances, title annotations, DARCO conversion order, and certification by the Municipal Assessor.
- Respondents claimed PhP 47,064,400 as just compensation for the affected area.
- They also counterclaimed for consequential damages covering "dangling" portions (areas between transmission lines) measuring 41,869 square meters, pleading these suffered diminished utility and value.
- RTC issued an Order of Expropriation, fixed provisional compensation at PhP 47,064,400 which NPC deposited, and issued writ of possession in favor of NPC.
- An appraisal committee was formed by the RTC, performing ocular inspection and submitting a consolidated report recommending total just compensation and consequential damages.
- A reversed trial ensued where respondents presented testimony supporting property classification, valuation, and consequential damages based on diminished usability and noise disturbance.
- NPC presented right-of-way officers who testified on prior negotiations, agricultural classification of lands, and usability of dangling areas, but conceded errors in classification and admitted agro-industrial classification in 1998 tax declarations.
RTC Decision and Proceedings
- RTC, on December 20, 2010, adopted the appraisal committee's recommendations and fixed just compensation at PhP 47,064,400 for the 49,173 sq.m. area based on residential, commercial, and industrial classification at the time of filing.
- RTC rejected NPC’s claim of possession dating back to 1972-74 for lack of proof and ruled such taking, if any, without color of legal authority.
- RTC awarded consequential damages of PhP 22,227,800 for the 41,867 sq.m. dangling areas that were rendered unusable due to transmission lines.
- RTC also ordered PhP 20,000 as attorney’s fees and imposed interest at 12% per annum on the just compensation from filing date until payment.
- NPC moved for reconsideration but was denied; the RTC modified the interest rates to 6% per annum on just compensation and differentiated interest rates on consequential damages.
- Upon execution and garnishment, NPC appealed to the Court of Appeals (CA), contesting the quantum of just compensation and consequential damages.
Court of Appeals Decision
- On September 1, 2015, the CA denied NPC's appeal and affirmed the RTC d