Case Summary (G.R. No. 223366)
Procedural Posture and Trial Court Proceedings
Oroville filed suit on 20 April 2007 seeking injunctive relief and damages to enjoin construction of the new line. TransCo answered and agreed to convert the proceedings into expropriation; the parties agreed to a survey and the RTC directed a provisional deposit of P7,647,200.00 (for the 13,904 sq.m.). The trial court later appointed three commissioners to determine just compensation and, after setting aside the commissioners’ report, the RTC fixed just compensation at P1,520.00 per sq.m. reckoned from the filing date (20 April 2007) with 12% legal interest per annum.
Commissioners’ Valuations (Summary)
The three commissioners produced divergent valuations, each assuming the taking dated to 1983: (1) Engr. Legaspi (court-appointed) — P78.65/sq.m.; (2) Engr. Badelles (TransCo) — P1.20/sq.m.; (3) Atty. Pakino (Oroville) — P2,000/sq.m. The RTC ultimately disregarded the commissioners’ report and used municipal schedule-of-values-based figures to reach P1,520/sq.m. from 2007.
Court of Appeals Ruling
The Court of Appeals held that TransCo’s 1983 entry lacked warrant or color of authority and did not constitute an actual taking because the owners retained beneficial enjoyment and continued possession; it concluded there was no taking in 1983 and therefore reckoned just compensation as of the filing of Oroville’s complaint in 2007. The CA modified the RTC judgment and ordered TransCo to pay a stated unpaid balance with specified interest rates, directing both parties to pay commissioners’ fees.
Issues Presented to the Supreme Court
The Supreme Court identified the primary issues as: (1) whether just compensation should be based on the property’s value at the time of the taking; and (2) whether imposition of 12% legal interest was justified.
Legal Standard on Taking and Requisites
The Court reiterated established requisites for a taking derived from Republic v. Vda. de Castellvi: entry upon private property; duration beyond a momentary period; entry under warrant or color of legal authority; dedication to public use or injurious appropriation; and ouster or deprivation of beneficial enjoyment. The Court emphasized eminent domain’s constitutional limits — public purpose and payment of just compensation — under the 1987 Constitution and relevant statutes governing TransCo.
Supreme Court Finding on Actual Taking (1983)
Applying the requisites, the Supreme Court found that TransCo’s construction and occupation in 1983 satisfied the elements of a taking. The entry was for public use (transmission facilities), the occupation was indefinite, and the presence of high‑tension lines substantially deprived owners of normal and beneficial enjoyment of the land. The Court also recognized TransCo’s statutory authority to exercise eminent domain under Section 8 of R.A. No. 9136, but underscored that such power is subject to constitutional and legal safeguards.
Timing for Valuation: Rule 67 and Precedent
The Court applied Section 4, Rule 67 of the Rules of Court, which mandates that just compensation be determined as of the date of taking or the filing of the complaint, whichever is earlier. Relying on prior decisions (e.g., Tecson, Forlorn Development, Eusebio, MIAA, Republic v. Sarabia, Republic v. Lara), the Court held that where entry and taking precede the filing of expropriation proceedings, the controlling valuation date is the time of taking. The Court reasoned that valuation at the taking date properly compensates the owner for the actual loss suffered at the time of appropriation and prevents unjust enrichment of the expropriator.
Application to the Present Case: Valuation Date and Amount
Given the entry in 1983 and the similarity of facts to precedent where government agencies took possession without timely expropriation proceedings, the Supreme Court concluded that just compensation must be ascertained as of 1983. The Court adopted the commissioners’ court-appointed valuation of P78.65 per sq.m. as the fair market value at the time of taking and pegged the date of taking at January 1, 1983 for computation purposes, since the precise date could not be determined from the record.
Interest, Exemplary Damages, and Attorney’s Fees
To compensate for delay between the 1983 taking and actual provisional deposit, the Court awarded legal interest at 12% per annum on the total fair market value from January 1983 until January 21, 2011 (the date TransCo made the provisional deposit). The Court explained that interest serves to compensate owners for the income and benefit lost due to delayed payment and to place them in a position equivalent to that before the taking. Additionally, recognizing the prejudice caused by the government’s failure to initiate timely expropriation proceedings, the Court awarded exemplary damages in the amount of P1,000,000.00 and attorney’s fees of P200,000.00.
Treatment of Jurisprudential Exceptions (Macabangkit Sangkay and Saludares)
The Court acknowledged decisions (Macabangkit Sangkay, Saludares) that valued properties at the time of the landowners’ judicial demand rather than the taking date, but characterized those cases as exceptions driven by special equities — e.g., stealthy, undisclosed takings (underground tunnels) or a government’s deliberate refusal to acknowledge claims. The Court distinguished the present case, noting the transmission lines were visible in 1983 and thus Oroville could not plausibly claim ignorance, and therefore adherence to Rule 67 and controlling precedent mandated valuation at the 1983 taking date.
Final Disposition
The Supreme Court granted TransCo’s petition for review, reversed and set aside the Court of Appeals’ September 18, 2015 Decision and January 2
...continue readingCase Syllabus (G.R. No. 223366)
Antecedents and Procedural History
- The dispute concerns two parcels of land in Puerto, Cagayan de Oro City originally owned by Alfredo Reyes (OCT No. P-3) and Grace Calingasan (OCT No. P-13).
- In 1983, petitioner National Transmission Corporation (TransCo) constructed the Tagoloan–Pulangi 138 kV transmission line traversing those properties.
- Reyes sold his lot to Antonio Navarette, who later sold it to respondent Oroville Development Corporation (Oroville); the lot is now under Transfer Certificate of Title (TCT) No. T-85121.
- Calingasan sold her lot to Oroville, now registered under TCT No. T-104365.
- By 1995 Oroville was the registered owner of both properties, totaling 13,904 square meters, traversed by the Tagoloan–Pulangi transmission line.
- On November 17, 2006, TransCo offered to purchase Oroville’s properties to construct the Abaga–Kirahon 230 kV transmission line; Oroville requested rerouting because the 138 kV line already traversed the lots and asserted it had not been paid just compensation for that earlier construction.
- TransCo refused to reroute and intended to construct the Abaga–Kirahon line parallel to the existing line.
- On April 20, 2007, Oroville filed a complaint for injunction and damages with prayer for TRO to enjoin construction of the Abaga–Kirahon 230 kV line.
- TransCo answered on May 9, 2007, denying allegations and manifesting intent to file expropriation proceedings to acquire Oroville’s properties for the project.
- The trial court ordered survey of the subject properties and suspended proceedings; parties agreed to conversion into expropriation proceedings via Oroville’s omnibus motion (to which TransCo made no objections).
- On May 17, 2010, the trial court ordered TransCo to make a provisional deposit of P7,647,200.00 as just compensation for the 13,904 sqm; TransCo complied.
- On February 4, 2011, the trial court directed the Land Bank of the Philippines, NAPOCOR Branch, to release the deposit to Oroville’s representative Antonio Tiu.
- On March 21, 2011, the trial court issued a writ of possession directing Oroville to surrender possession to TransCo.
- On August 8, 2011, the trial court appointed three commissioners (court-appointed Engr. Marilyn P. Legaspi; TransCo’s Engr. Norberto Badelles; Oroville’s Atty. Avelino Pakino) to determine just compensation.
- The RTC rendered its Decision on December 12, 2012; TransCo appealed to the Court of Appeals (CA).
- The CA issued its Decision on September 18, 2015 (modified RTC decision) and denied TransCo’s motion for reconsideration in a Resolution dated January 25, 2016.
- TransCo filed a petition for review on certiorari to the Supreme Court; the issues were taken up and decided by the Supreme Court on August 1, 2017.
Factual Findings (Key Dates, Titles, Physical Facts)
- Properties: two contiguous parcels in Barangay Puerto, Cagayan de Oro City; total area: 13,904 square meters.
- Titles and transfers: original OCT Nos. P-3 (Reyes) and P-13 (Calingasan); subsequently TCT Nos. T-85121 (Reyes’ lot) and T-104365 (Calingasan’s lot) in Oroville’s name by 1995.
- 1983: TransCo constructed the Tagoloan–Pulangi 138 kV transmission line that traversed the subject lots.
- 2006–2007: TransCo proposed the Abaga–Kirahon 230 kV transmission line; negotiations and dispute ensued leading to Oroville’s April 20, 2007 complaint.
- Provisional deposit: P7,647,200.00 (ordered May 17, 2010; deposited and released per court orders in 2011).
- Writ of possession: issued March 21, 2011, directing Oroville to surrender possession to TransCo.
Commissioners’ Valuations (Report Summary)
- Engr. Marilyn P. Legaspi (court-appointed Commissioner)
- Date of taking: 1983 (per transmission line data)
- Valuation: P78.65 per square meter
- Total (inclusive of interests as reported): P5,924,772.48
- Engr. Norberto Badelles (engaged by TransCo)
- Date of taking: 1983 (per transmission line data)
- Valuation: P1.20 per square meter
- Total (inclusive of interests as reported): P45,716.35
- Atty. Avelino Pakino (nominated by Oroville)
- Date of taking: 1983 (per transmission line data)
- Valuation: P2,000.00 per square meter
- Total (inclusive of interests as reported): P27,808,000.00
RTC Ruling (Regional Trial Court, Branch 17) — December 12, 2012
- The trial court set aside the Commissioners’ report and fixed just compensation at P1,520.00 per square meter for 13,904 sqm, reckoned from April 20, 2007 (date of filing of Oroville’s complaint).
- The RTC imposed legal interest at 12% per annum from April 20, 2007 until full payment.
- Basis for valuation: fair market value of lots along the national highway of Barangay Puerto per City Ordinance No. 10425-2006 (Revised Schedule of Fair Market Values of Real Property in Cagayan de Oro) and BIR Comparative Zonal Values.
- The RTC reasoned that just compensation should not be reckoned from 1983 (time of TransCo’s initial entry/construction) because landowners established that the entry into property occurred without their knowledge.
- RTC’s dispositive orders included offsetting the provisional deposit of P7,647,200.00 and ordering Commissioners’ fees of P10,000.00 each.
Court of Appeals Ruling — September 18, 2015 (with January 25, 2016 Resolution denying reconsideration)
- The CA ruled that TransCo’s entry in 1983 was made without warrant or color of authority and without intent to expropriate; TransCo constructed the 138 kV line without negotiating to purchase or expropriate the lots.
- The CA held that the construction did not oust or deprive Oroville (or prior owners) of beneficial enjoyment because the owners retained possession and were able to sell the properties and pursue plans for development; the lots were later classified as agricultural under CARP.
- Conclusion: there was no actual taking in 1983; just compensation should be reckoned from the filing of the complaint on April 20, 2007.
- Dispositive relief (as modified): TransCo ordered to pay Oroville unpaid balance of just compensation in the sum of P13,486,880.00 with legal interest at 12% per annum from March 21, 2011 to June 30, 2013, and 6% per annum from July 1, 2013 until full payment; Commissioners’ fees P10,000.00 each.
- TransCo’s motion for reconsideration was denied by CA on January 25, 2016; TransCo petitioned to the Supreme Court.
Issues Presented to the Supreme Court
- Whether the computation of just compensation for the expropriated property should be based on its value at the time of the taking.
- Whether the imposition of legal interest at 12% per annum is unjustified.
Parties’ Contentions (as presented to the Supreme Court)
- Petitioner (TransCo)
- Argues Section 4, Rule 67 and jurisprudence mandate that just compensation be determined by fair market value at the time of taking.
- Contends Oroville could not reasonably claim lack of knowledge of the 1983 construction given the visibility, height, and space occupied by the transmission line.
- Asserts Oroville should not benefit from its long delay in asserting claims.
- Argues 12% legal interest is improper in nature of damages because TransCo complied with RTC’s provisional deposit directive.
- Respondent (Oroville)
- Argues applying TransCo’s position would cause inju