Case Summary (G.R. No. 205193)
Applicable Law
The legal provisions relevant to the case are primarily found in the Electric Power Industry Reform Act of 2001 (EPIRA), Presidential Decree No. 1445 (Government Auditing Code), and Republic Act No. 8974, which governs expropriation proceedings.
Facts of the Case
Felisa Agricultural Corporation filed an inverse condemnation case against NPC, asserting a claim for just compensation due to the occupation of its property by NPC for transmission lines since 1978, without payment. In 2010, a Regional Trial Court ordered NPC to pay Felisa Agricultural Corporation a provisional just compensation of PHP 7,845,000. Following the enactment of EPIRA in 2001, which reorganized the electric power industry and transferred various responsibilities from NPC to PSALM and TRANSCO, Felisa Agricultural Corporation sought execution against these corporations to satisfy the judgment.
Proceedings in Lower Courts
After the Regional Trial Court ordered the issuance of a Writ of Execution against NPC, TRANSCO, and PSALM, PSALM contested the issuance of the writ and related Notices of Garnishment, arguing there was grave abuse of discretion. The Court of Appeals subsequently dismissed PSALM's petition for certiorari, affirming the trial court's orders.
Legal Issues
The primary legal issues include:
- Whether PSALM is liable for the payment of the provisional just compensation and related right-of-way claims.
- Whether PSALM was deprived of due process when the Writ of Execution was issued against it despite not being a defendant in the inverse condemnation case.
- Whether PSALM's properties can be subjected to execution.
Supreme Court's Ruling
The Supreme Court ruled in favor of PSALM, finding it was not liable for the compensation. The Court determined that the responsibility fell on TRANSCO, which had assumed ownership and the right of eminent domain over the transmission towers after the enactment of EPIRA. The Court reiterated that PSALM and TRANSCO are separate entities, and thus, PSALM should not be held liable for obligations incurred by TRANSCO.
Due Process Violation
The Court held that PSALM was deprived of due process because a writ of execution can only be issued against parties to the case, not against those who weren’t defendants. Since PSALM had not been impleaded in the original inverse condemnation case, the issuance of the Writ of Execution against it was improper.
Execution of a Writ Against PSALM's Assets
The Court declared that the garnishment of PSALM’s properties was unlawful because it is not the judgment obligor in the inverse condemnation case. The garnishment procedure requires that it only target the assets of the actual debtor, which in this case was NPC, and not the separate entity of PSALM.
Government Funds and Execution
The Supreme Court acknowledged that while g
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Case Overview
- This case involves a Petition for Review on Certiorari filed by the Power Sector Assets and Liabilities Management Corporation (PSALM) contesting the decisions and resolutions of the Court of Appeals.
- The Court of Appeals upheld a Writ of Execution against the National Power Corporation (NPC), PSALM, and the National Transmission Corporation (TRANSCO) for the payment of provisional just compensation to Felisa Agricultural Corporation.
- The key legal question revolves around the liability for just compensation and the validity of the execution against PSALM and TRANSCO.
Background of the Parties
- National Power Corporation (NPC): Established in 1936, tasked with generating and supplying electricity in the Philippines. It was granted the right of eminent domain to fulfill its corporate purpose.
- Power Sector Assets and Liabilities Management Corporation (PSALM): Created under the Electric Power Industry Reform Act of 2001 (EPIRA) to manage the assets and liabilities of NPC, including ownership of NPC's generation assets.
- National Transmission Corporation (TRANSCO): Assumed NPC's transmission functions and has the authority to exercise eminent domain as per the EPIRA.
- Felisa Agricultural Corporation: Filed an inverse condemnation case against NPC for compensation related to property occupied by NPC since 1978.
Procedural History
- Felisa Agricultural Corporation initiated inverse condemnation proceedings against NPC in 2001, leading to a ruling that ordered NPC to pay the provisional amount of P7,845,000.00.
- Following the enactment of EPIRA