Case Summary (G.R. No. L-12300)
Case Background and Factual Antecedents
Napocor filed a complaint for eminent domain on October 27, 1994, against the spouses Zabala and other defendants to acquire a right-of-way easement for its 230 KV Limay-Hermosa Permanent Transmission Lines Project, traversing a portion of the spouses’ 6,820-square meter property in Balanga City, Bataan. Napocor alleged the need for a public use of the property and claimed to have made repeated but unsuccessful attempts to negotiate with the owners for acquisition. It sought the issuance of a writ of possession and appointment of commissioners to determine just compensation.
The spouses Zabala moved to dismiss, citing the urban expansion needs of Balanga City and alleged that the installation of transmission lines through their property would adversely affect its value and usability. They proposed alternative sites for the transmission lines, which they argued would cause less private injury. They also contended that the assessed value in the tax declaration was outdated and did not reflect the current or prospective higher value of their property.
Proceedings and Commissioner's Reports
The trial court appointed commissioners who initially fixed just compensation at ₱150.00 per square meter without considering consequential damages. Both parties filed comments: Napocor questioned the lack of documentary evidence to support this valuation, and the spouses Zabala argued for a higher compensation amount of ₱250.00 per square meter. The lower court recommitted the report for further evaluation.
On August 20, 2003, the commissioners submitted a final report recommending an increased compensation of ₱500.00 per square meter, based primarily on ocular inspection, interviews with the owners, and observations of comparable sales in the vicinity. However, this final report still lacked documentary evidence substantiating these claims.
Trial Court and Court of Appeals Decisions
On June 28, 2004, the RTC rendered a partial decision ruling that Napocor lawfully exercised its power of eminent domain and fixed just compensation at ₱150.00 per square meter for the portion of the spouses’ property taken. The RTC reasoned that the spouses were deprived of the beneficial use of their land and thus entitled to actual or basic value. Napocor appealed to the CA, contesting the valuation's lack of documentary support and the trial court’s failure to apply Section 3A of Republic Act No. 6395, which limits liability to an easement fee not exceeding 10% of the market value in cases where the principal use of the land is not impaired.
The CA affirmed the RTC’s decision on July 10, 2006.
Issue on Appeal
Whether the CA erred in upholding the RTC’s fixation of ₱150.00 per square meter as just compensation despite absence of documentary evidence and failure to apply Section 3A of RA No. 6395, which purportedly limits compensation to an easement fee when the land’s principal use is unimpaired.
Applicable Law and Legal Principles
The Constitution (1987), Article III, Section 9, guarantees the right to just compensation for private property taken for public use. Just compensation is defined as the full and fair equivalent of the property taken, reflecting the owner’s loss, not the expropriator’s gain.
Section 3A of RA No. 6395 provides that when the land is only traversed by transmission lines and the principal use is unimpaired, only a right-of-way easement shall be acquired, and compensation for this easement shall not exceed 10% of the market value as declared or assessed.
However, this statutory limitation does not bind the courts in their constitutional duty to determine just compensation. Legislative or executive measures fixing or prescribing methods to compute just compensation serve only as guidelines and cannot supplant judicial determination.
Court’s Ruling on Section 3A of RA No. 6395
The Supreme Court held that Section 3A cannot restrict the courts’ constitutional power to determine just compensation. The right to just compensation is judicial in nature and must be safeguarded against legislative or executive encroachments. The Court reaffirmed that the provision in RA No. 6395 is not binding on courts but may only be considered as one factor in the overall determination.
Precedents consistently rejected similar claims by Napocor that just compensation should be limited to an easement fee when high-tension transmission lines cause permanent deprivation of normal property use. Such circumstances warrant payment of full market value.
Court’s Analysis on Just Compensation Amount and Evidence
The just compensation fixed by the RTC at ₱150.00 per square meter was set aside due to lack of documentary support. The commissioners’ reports relied chiefly on ocular inspections, interviews, and hearsay statements about adjacent property values, but lacked corroborating documentary evidence such as affidavits, sworn declarations, tax declarations, or actual sales data.
Supreme Court jurisprudence holds that a commissioner's valuation unsupported by documentary evidence is hearsay and is
...continue readingCase Syllabus (G.R. No. L-12300)
Case Citation and Overview
- Decided on January 30, 2013, under G.R. No. 173520 by the Second Division of the Supreme Court of the Philippines.
- Petition filed by National Power Corporation (Napocor) challenging the Court of Appeals (CA) Decision affirming the Regional Trial Court’s (RTC) Partial Decision on just compensation in an eminent domain case.
- The property subject to the case was a 6,820-square meter portion owned by spouses Rodolfo Zabala and Lilia Baylon, traversed by Napocor's 230 KV Limay-Hermosa Permanent Transmission Lines Project.
- The RTC fixed just compensation at P150.00 per square meter, a ruling upheld by the CA but contested by Napocor on the ground of lack of documentary evidence and improper application of statutory limitations on compensation.
Factual Background
- On October 27, 1994, Napocor filed an eminent domain complaint before the RTC, Balanga City, seeking right of way easements over various properties, including those of spouses Zabala, essential for its transmission line project.
- Napocor asserted the parcels were not previously expropriated and that it negotiated for right of way easement but failed to reach an agreement with the owners.
- Napocor claimed lawful entry was permissible under Presidential Decree No. 42 upon the filing of the complaint and deposit of assessed value with the Philippine National Bank.
- Spouses Zabala filed a motion to dismiss citing the potential negative impacts of the transmission lines—including hindrance to housing expansion, danger to inhabitants, and diminished property value.
- They argued the transmission line could be relocated more economically and that Napocor did not exert earnest effort to directly purchase the property portion before filing the case.
- The Commissioners initially recommended just compensation of P150.00 per square meter without considering consequential damages; Napocor requested modification supported by documentary evidence, while spouses Zabala demanded P250.00 per square meter.
- After recommittal, the Commissioners submitted a Final Report recommending P500.00 per square meter, acknowledging the lapse of time and increased valuations in the vicinity.
- The RTC granted the petition, ordering Napocor to pay just compensation fixed at P150.00 per square meter. Napocor appealed, contesting both the valuation and the application of Section 3A of Republic Act No. 6395 limiting easement fees.
Issue Presented
- Whether the Court of Appeals erred in affirming the RTC’s fixing of just compensation at P150.00 per square meter despite the lack of documentary evidence supporting the valuation.
- Whether Section 3A of RA No. 6395, which limits compensation for right-of-way easements to not exceeding 10% of the market value of the property, should apply to Napocor’s liability in paying just compensation.
Petitioner's Arguments
- Napocor asserted that under Section 3A of RA No. 6395, it is only required to pay an easement fee capped at 10% of the market value when the principal use of the land is unimpaired.
- It