Case Summary (G.R. No. 175176)
Properties, Permits, and Construction
Respondent Santa Loro’s lot: 16,193 sq. m. (Tax Declaration No. 15-22196, 1994). Respondent Spouses Quimco’s lot: 3,298 sq. m. (Tax Declaration No. 31376, 1996). NAPOCOR obtained written “Permission to Enter for Construction of Transmission Line Project” from respondents (14 June 1994 and 11 December 1996) after representing that it would pay just compensation. Construction proceeded and was completed in 1996; the combined area of respondents’ land affected by the project was agreed to be 3,199 sq. m.
Restrictions Imposed and Economic Impact on Respondents
After construction, NAPOCOR imposed restrictions (e.g., prohibition on planting or erecting structures higher than three meters beneath the lines) and barred quarry operations near towers. These restrictions curtailed respondents’ use of the affected land and reduced income, particularly impacting the Quimcos’ small-scale quarry business.
Initial Compensation Paid by Petitioner
NAPOCOR paid nominal amounts as easement fees: P8,015.90 to Santa Loro and P5,350.49 to the Spouses Quimco. Respondents later learned that other landowners whose properties were similarly affected and who resisted or litigated received payments in the range of P448.30–P450.00 per square meter.
Procedural History — Trial Court and Parties’ Positions
Respondents filed a Complaint for rescission of agreement, recovery of possession, removal of towers and lines, damages and other reliefs (Civil Case No. DNA-547). NAPOCOR answered, asserting that Section 3-A of its Charter limits compensation for right-of-way easements to not more than 10% of market value (as declared or as assessed). At pre-trial the parties conceded that only the amount of just compensation for the 3,199 sq. m. was in dispute; respondents moved for summary judgment.
Trial Court Orders, Summary Judgment Process, and Petitioner’s Inaction
The RTC ordered respondents to file a motion for summary judgment and gave NAPOCOR opportunities to oppose and to verify the area taken. NAPOCOR sought, and received, extensions but ultimately did not file opposition or submit the results of its verification. The RTC deemed the motion submitted and, on 16 April 2001, rendered judgment awarding P448.33 per sq. m. (total P1,434,207.67) with interest, later modified by order of 24 August 2001 to reduce interest to 6% per annum from filing and 12% per annum post-judgment.
Appellate Proceedings and Supreme Court Review
The Court of Appeals affirmed the RTC decision (21 April 2006) and denied reconsideration (27 October 2006). NAPOCOR filed a Rule 45 petition to the Supreme Court, raising four primary issues: (1) whether summary judgment was proper for determining just compensation; (2) whether the 3,199 sq. m. area finding was correctly affirmed; (3) whether reliance on an earlier RTC decision (Civil Case No. DNA-379, based on DNA-373) provided a sufficient basis for the P448.33 per sq. m. valuation; and (4) whether Section 3-A of R.A. No. 6395 limits respondents to easement fees only.
Legal Standard for Summary Judgment and Its Application Here
Under Rule 35 (Sections 1 and 3) of the Revised Rules of Civil Procedure, summary judgment requires that (a) no genuine issue as to any material fact exists except as to the amount of damages, and (b) the movant is entitled to judgment as a matter of law. The Court emphasizes that the transition to summary judgment is appropriate where affidavits, admissions, and documents show that factual disputes are not genuine. Here, NAPOCOR admitted taking portions of respondents’ lands but contested only compensation and purportedly the exact area; it failed to present opposition or evidence to create a genuine factual issue despite multiple extensions. The Supreme Court therefore found the RTC’s resort to summary judgment proper because, except for the quantum of damages, no genuine issue of material fact remained.
Area of Land Affected and Timeliness of Contest
The Court held NAPOCOR’s belated contest of the 3,199 sq. m. area was procedurally defective. NAPOCOR had ample opportunity to verify and submit contrary evidence but remained silent. Documents proffered by respondents (including sketch plans) were unrebutted; petitioner’s late contentions and unsigned plans lacked credibility. The Court endorsed the appellate court’s finding that petitioner’s inaction constituted a dilatory tactic and precluded relitigation of the area issue at this stage.
Reliance on Prior RTC Decisions to Fix Valuation
The RTC fixed P448.33 per sq. m. based on an earlier RTC decision in Civil Case No. DNA-379, which itself adopted the Commissioners’ Report in DNA-373 that had recommended P448.333 per sq. m. The Supreme Court accepted that the prior RTC decision, involving adjacent and similarly situated lots affected at roughly the same time, constituted a logical and reasonable evidentiary basis for fixing fair market value in the present case, especially since the valuation was presented to and relied upon by the trial court and petitioner failed to controvert it.
Nature of Taking — Easement vs. Expropriation and Constitutional Just Compensation
Although NAPOCOR argued it acquired only a right-of-way easement and thus was limited by Section 3-A of its Charter to pay up to 10% of market value, the Court treated the right-of-way easement as a taking under the power of eminent domain because the imposed restrictions (indefinite prohibition on certain uses, risk to life and limb, and ongoing tax burden on respondents) effectively and perpetually deprived respondents of ordinary use of the affected land. Citing established jurisprudence, the Court held that such an easement may amount to an expropriation and that constitutional protections under the 1987 Constitution (applicable to this decision) require payment of just compensation equal to the owner’s loss, not merely
Case Syllabus (G.R. No. 175176)
Case Caption, Citation, and Panel
- Supreme Court decision reported at 590 Phil. 665, Third Division, G.R. No. 175176, dated October 17, 2008.
- Decision authored by Justice Chico-Nazario (noted as CHICO-NAZARIO, J.).
- Justices Ynares‑Santiago (Chairperson), Carpio, Austria‑Martinez, and Azcuna concurred. Justice Antonio T. Carpio sat as additional member replacing Justice Nachura; Associate Justice Adolfo S. Azcuna replaced Justice Ruben T. Reyes by special order for this case.
Nature of the Case and Relief Sought
- Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure.
- Petitioner (National Power Corporation, NAPOCOR) sought review, reversal, and setting aside of the Court of Appeals Decision dated April 21, 2006 and Resolution dated October 27, 2006 in CA‑G.R. CV No. 73656.
- Relief sought: reversal of appellate affirmation of RTC rulings awarding damages to respondents for land taken by petitioner’s transmission line project, reduction of compensation and modification of interest rates.
Parties, Ownership, and Locales
- Petitioner: National Power Corporation (NAPOCOR), a government‑owned and controlled corporation organized under Philippine law, vested with eminent domain powers under R.A. No. 6395 as amended by P.D. No. 938.
- Respondents: Santa Loro Vda. de Capin; spouses Julito Quimco and Gloria Capin (collectively “respondents”).
- Affected properties located in Dawis Sur, Municipality of Carmen and City of Danao, Province of Cebu.
Property Descriptions and Tax Declarations
- Santa Loro Vda. de Capin’s lot: 16,193 square meters; covered by Tax Declaration No. 15‑22196 (1994).
- Spouses Quimco’s lot: 3,298 square meters; covered by Tax Declaration No. 31376 (1996).
- Combined area affected by petitioner’s Interconnection Project: 3,199 square meters (portion traversed and affected by transmission towers and lines).
Project, Entry Permits, and Construction Timeline
- Project: 230 KV Leyte‑Cebu Interconnection Project (Interconnection Project).
- Respondents signed Permission to Enter for Construction: Santa Loro (dated 14 June 1994); Spouses Quimco (dated 11 December 1996).
- Petitioner represented to respondents that just compensation would be paid for intrusion and thereafter constructed the transmission towers and lines; construction completed in 1996.
Restrictions Imposed and Economic Impact on Respondents
- Post‑construction restrictions included prohibition against planting or building anything higher than three meters below the area traversed by the transmission lines due to danger from high‑tension currents.
- Spouses Quimco, holders of a Small Scale Quarry Permit (Series of 1995), were prohibited from continuing quarry operations near petitioner’s transmission towers due to risk of weakening tower foundations.
- Result: respondents suffered substantial loss of income and deprivation of ordinary use of affected portions of their properties.
Initial Payments Made by Petitioner
- Petitioner paid Santa Loro Vda. de Capin P8,015.90 (disbursement voucher dated 27 June 1996).
- Petitioner paid Spouses Quimco P5,350.49 (disbursement voucher dated 27 December 1996).
- Respondents later discovered that other landowners within the area who resisted or litigated were paid P448.30 to P450.00 per square meter for similarly affected property portions.
Proceedings Below — Complaint and Trial Court Docketing
- Respondents filed Complaint for Rescission of Agreement, Recovery of Possession, Removal of Tower and Transmission Lines, Damages and Other Reliefs; docketed as Civil Case No. DNA‑547 in RTC, 7th Judicial Region, Branch 25, Danao City.
- Petitioner’s Answer: contended respondents’ claim for full property value was repugnant to Section 3‑A of its Charter (R.A. No. 6395), which, petitioner argued, limited compensation to easement fee equivalent to 10% of market value plus cost of damaged improvements.
- At Pre‑trial, parties conceded petitioner had taken portions of respondents’ land (3,199 sq. m.) and agreed the sole issue to resolve was amount of just compensation.
Procedural Motions, Summary Judgment, and RTC Orders
- RTC Order dated 4 September 2000: respondents given 30 days to file Motion for Summary Judgment; petitioner given 20 days from receipt of motion to oppose.
- Respondents filed Motion for Summary Judgment on 10 October 2000 with documentary evidence and affidavits; RTC Order dated 17 November 2000 gave petitioner 15 days to file opposition or comment.
- Petitioner filed Motion for Extension of Time on 21 December 2000, stating its Right of Way Officers were verifying the 3,199 sq. m. figure and that it would join respondents’ motion if area confirmed; RTC granted 15‑day extension by Order dated 29 December 2000.
- Petitioner failed to file any Opposition or Comment; RTC deemed respondents’ Motion for Summary Judgment submitted for resolution by Order dated 23 February 2001.
RTC Resolution and Order on Damages and Interest
- RTC Resolution dated 16 April 2001: judgment for respondents ordering petitioner to pay P448.33 per square meter, total P1,434,207.67 for 3,199 sq. m., with interest at 14% per annum computed since 1996 (when petitioner took the portions).
- Petitioner filed Motion for Reconsideration seeking reduction to P25.00 per square meter and Supplemental Motion seeking reduction of interest from 14% to 6% per annum.
- RTC Order dated 24 August 2001: affirmed 16 April 2001 Resolution with modification of interest — imposable rate adjusted to 6% per annum from filing of complaint and 12% per annum from finality of judgment until fully satisfied, using adjudged amount as computation base.
Appellate Proceedings and Court of Appeals Disposition
- Petitioner appealed RTC decisions to the Court of Appeals (CA‑G.R. CV No. 73656).
- Court of Appeals Decision dated 21 April 2006: affirmed RTC Resolution dated 16 April 2001 as modified by RTC Order dated 24 August 2001.
- Petitioner’s motion for reconsideration at the Court of Appeals was denied in Resolution dated 27 October 2006.
Issues Raised in the Supreme Court Petition
- Whether the Court of Appeals erred in upholding trial court’s resort to summary judgment to determine just compensation.
- Whether the Court of Appeals erred affirming the RTC finding that total area affected was 3,199 sq. m.
- Whether the Court of Appeals erred in using Civil Case No. DNA‑379 as sufficient basis for fixing fair market va