G.R. No. 183297 - National Power Corp. vs. Maruhom

Case Summary (G.R. No. 183297)

Factual Background

Respondents owned a 70,000-square meter lot in Saduc, Marawi City. Sometime in 1978, National Power Corporation entered and constructed subterranean tunnels beneath the lot without respondents’ knowledge or consent to serve NPC hydroelectric projects and to siphon waters of Lake Lanao. Respondents discovered the tunnels in July 1992. On October 7, 1992 they demanded that NPC vacate and pay damages; when NPC did not comply, respondents sued on November 23, 1994 for recovery of possession and damages before the Regional Trial Court of Lanao del Sur in Civil Case No. 1298-94.

Trial Court Judgment

After trial the RTC rendered judgment that denied respondents’ prayer to dismantle the tunnels but ordered NPC to pay the fair market value of the 70,000 square meters less 21,995 square meters, fixing the unpaid portion of 48,005 square meters at P1,000.00 per square meter for a total of P48,005,000.00 with interest; ordered monthly rental at P0.68 per square meter for the 48,005 square meters from 1978; and awarded P200,000.00 as moral damages and P200,000.00 as attorney’s fees and costs.

Execution Pending Appeal and Petition for Relief from Judgment

Respondents moved for execution pending appeal. NPC initially filed a notice of appeal but withdrew it on August 26, 1996 to pursue reconsideration. The RTC granted execution pending appeal on August 28, 1996. Thereafter respondents garnished funds of NPC. On October 4, 1996 Lucman Ibrahim and NPC filed a Petition for Relief from Judgment alleging excusable ignorance and mistake because they believed the decision concerned only damages and rentals and not an award amounting effectively to transfer of ownership; they asserted prevention by mistake or excusable negligence in taking timely appeal or reconsideration.

RTC Modified Judgment and Further Appeals

On September 8, 1997 the RTC granted the petition for relief and issued a modified judgment that reduced the award for fair market value, adjusted the rental amounts deductible from the award, and left a balance subject to execution only upon finality of the modified judgment. Lucman Ibrahim and NPC separately appealed to the Court of Appeals in CA-G.R. CV No. 57792.

Court of Appeals and This Court in G.R. No. 168732

On June 8, 2005 the Court of Appeals set aside the modified judgment, restored the original August 7, 1996 decision, deleted the award of moral damages, and reduced rentals and attorney’s fees. This Court, in G.R. No. 168732, affirmed the CA Decision on June 29, 2007. NPC’s motion for reconsideration before this Court was denied on August 29, 2007.

Post-Finality Execution and CA Special Proceedings

To satisfy the judgment, respondents filed a motion for execution of the August 7, 1996 decision as modified by the CA. The RTC granted the motion and issued a writ of execution on November 13, 2007. A notice of garnishment issued against NPC’s depositary bank. NPC then filed a Petition for Certiorari with the Court of Appeals in CA-G.R. SP No. 02065-MIN, arguing that the RTC gravely abused its discretion by allowing execution that would result in payment of just compensation without an order transferring title to NPC. The CA issued a temporary restraining order on November 29, 2007 enjoining execution. On May 30, 2008 the CA dismissed NPC’s petition and ordered NPC to pay its admitted obligation to respondents amounting to P36,219,887.20.

Petition to the Supreme Court and Interim Relief

NPC filed a Petition for Review on Certiorari before this Court seeking nullification of the May 30, 2008 CA Decision and a temporary restraining order to enjoin its execution. This Court granted a TRO on July 9, 2008. The present petition challenged the CA’s dismissal of certiorari and reasserted the contention that payment of full just compensation must carry with it the correlative right to obtain title and ownership of the land taken, and that allowing respondents to retain title after payment constituted unjust enrichment.

Issues Presented

The central issues were whether the RTC and the Court of Appeals acted in grave abuse of discretion in granting execution and ordering garnishment without requiring respondents to transfer title to NPC upon payment of full fair market value; and whether payment of full compensation without transfer of title amounted to unjust enrichment in the circumstances of an easement by NPC that deprived respondents of the ordinary use of the land.

The Supreme Court’s Disposition

The Supreme Court denied the petition. The Court held that the writ of execution must conform strictly to the dispositive portion of the final judgment and that here the dispositive portions of the RTC decision, the CA decision, and this Court’s affirmance did not order transfer of title upon payment. Because the writ did not vary from the dispositive language of the final judgment, the writ and the notice of garnishment were valid. The Court lifted the TRO and affirmed the assailed CA Decision in CA-G.R. SP No. 02065-MIN.

Legal Basis and Reasoning

The Court observed that the dispositive portions of the judgments did not direct conveyance of title and thus execution could not be extended to effect a transfer that the judgment did not order. The Court reaffirmed the established doctrine that an easement of right-of-way falls within the power of eminent domain and that where an easement indefeasibly or indefinitely deprives the owner of ordinary use, the owner is entitled to just compensation equal to the full and fair equiva

Case Syllabus (G.R. No. 183297)

Parties and Procedural Posture

NATIONAL POWER CORPORATION filed a Petition for Review on Certiorari from the Court of Appeals Decision in CA-G.R. SP No. 02065-MIN.
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, CAIRORONESA M. IBRAHIM, AND LUCMAN IBRAHIM, REPRESENTED BY HIS HEIRS ADORA B. IBRAHIM, NASSER B. IBRAHIM, JAMALODIN B. IBRAHIM, RAJID NABBEL B. IBRAHIM, AMEER B. IBRAHIM AND SARAH AIZAH B. IBRAHIM were the respondents in the petition and the owners of the subject land.
The petition assailed the CA Decision dated May 30, 2008 and sought nullification of an RTC writ of execution and notice of garnishment executed pursuant to an August 7, 1996 RTC decision as modified by the CA.
The case reached this Court as G.R. No. 183297 with this Court issuing a temporary restraining order on July 9, 2008 and resolving the petition by final Decision dated December 23, 2009.

Key Factual Allegations

Respondents owned a 70,000-square meter lot in Saduc, Marawi City that NPC entered without respondents' knowledge in 1978 to construct subterranean tunnels.
NPC used the tunnels to siphon water from Lake Lanao and to operate the Agus II through VII projects and other facilities in surrounding localities.
Respondents discovered the tunnels in July 1992 and made a demand for damages and vacation of the subterranean portion on October 7, 1992, which NPC ignored.
Respondents filed Civil Case No. 1298-94 in the RTC of Lanao del Sur on November 23, 1994 seeking recovery of possession and damages.
The RTC initially awarded respondents the fair market value of 48,005 square meters at P1,000.00 per square meter totaling P48,005,000.00 plus 6% interest, monthly rentals, moral damages, attorney's fees, and costs.

Lower Court Decisions

The RTC rendered its Decision awarding just compensation, rentals, moral damages, attorney's fees, and costs and later granted execution pending appeal on August 28, 1996.
Petition for Relief from Judgment by NPC and Lucman Ibrahim led the RTC to render a modified judgment on September 8, 1997 that reduced the award and deferred execution on certain sums until finality.
The CA, in CA-G.R. CV No. 57792, set aside the modified judgment on June 8, 2005 and restored the original RTC decision with the deletion of moral damages and reduction of rentals and attorney's fees.
This Court denied the petition for review in G.R. No. 168732 on June 29, 2007 and denied reconsideration on August 29, 2007.
The RTC issued a writ of execution on November 13, 2007 and garnishment followed, whereupon NPC filed a petition for certiorari with the CA and obtained a TRO on November 29, 2007.
The CA dismissed NPC's certiorari petition on May 30, 2008 and ordered NPC to pay the a