G.R. No. 240720 - Spouses Buot vs. National Transmission Corp.

Case Summary (G.R. No. 240720)

Facts and Procedural Background

Spouses Buot own approximately 117,850 square meters of agricultural land granted originally by free patent, with annotations containing legal easements as prescribed by law, particularly pursuant to Commonwealth Act No. 141 (The Public Land Act). Transco filed a complaint for expropriation to acquire a 196-square-meter portion of the land plus to enforce an easement of right-of-way over 7,382 square meters for the construction and installation of transmission lines and towers. The Spouses opposed, contending that the danger and adverse impacts of the transmission lines and towers rendered the property practically useless, thus seeking just compensation for a larger total affected area of 7,578 square meters, which includes existing transmission lines occupying 5,420 square meters.

Trial Court Findings and Orders

The Regional Trial Court (RTC) appointed a Panel of Commissioners to appraise the property and improvements. The RTC allowed expropriation and awarded just compensation of ₱1,000 per square meter for the 7,578 square meter expropriated portion, totaling ₱7,578,000 plus ₱567,500 for improvements, amounting to ₱8,145,500. The court further ordered transfer of title and payment proceedings accordingly. A writ of possession was issued after the Spouses encashed a provisional payment check.

Court of Appeals Decision and Remand

The Court of Appeals (CA), however, set aside the RTC’s decision, ruling that power and transmission lines fall under the "similar works" as mentioned in Section 112 of Commonwealth Act No. 141. The CA held that NGCP is entitled to a legal easement of right-of-way not exceeding 60 meters width free of charge, save for payment of improvements. The CA directed the RTC to determine the actual area for expropriation after deducting the 60-meter legal easement and to assess consequential damages for portions outside the easement made unusable ("dangling areas"). The CA remanded the case for fresh valuation of the property, improvements, and for NGCP to obtain a quitclaim from Spouses Buot over the 60-meter right-of-way. It found that the RTC’s valuation at ₱1,000 per square meter lacked sufficient basis and that the assessment of improvements did not properly consider trees.

Issues on Appeal

The issues raised were: (a) whether transmission lines qualify as "similar works" under Section 112 of CA No. 141, and (b) whether the CA erred in remanding the case to the RTC to determine just compensation including consequential damages.

Arguments of the Parties

Spouses Buot argued that Section 112 excludes power or transmission lines, which should be strictly construed to avoid diminishing proprietary rights. They contended expressio unius est exclusio alterius applies due to specific enumerations in law. They insisted the RTC’s valuation of ₱1,000 per square meter was based on comparable valuations within the same municipality and thus valid.

NGCP maintained that by law the corporation is exempt from paying just compensation for the 60-meter right-of-way granting free use of land for transmission facilities. It argued the CA erred in ordering a remand as the issue of "dangling areas" was not raised at trial. NGCP questioned the RTC’s reliance on valuations higher than BIR zonal and assessed values.

Legal Basis and Statutory Interpretation of Section 112 of CA No. 141

The Court recognized that the subject property, originally public land granted by free patent, is subject to the legal easement of right-of-way under Section 112 of The Public Land Act. This section authorizes a right-of-way not exceeding 60 meters free of charge for government infrastructure projects and similar works, with payment due only for damages to improvements.

The Court rejected Spouses Buot’s argument for strict exclusion of power lines based on expressio unius est exclusio alterius. Instead, the principle of ejusdem generis applies, where the general phrase “and similar works” following specific enumerations (public highways, irrigation ditches, telegraph and telephone lines, airport runways) should be interpreted to include government or quasi-government infrastructure projects of the same kind, which includes power and transmission lines. This interpretation aligns with the public purpose of such infrastructure.

Nature of Power and Transmission Lines as Infrastructure Projects

Based on the Implementing Rules and Regulations of Republic Act No. 8974 and the Anti-Obstruction of Power Lines Act (RA 11361), transmission lines and related facilities are national government infrastructure projects intended for public use. Their installation is essential for national economic growth and public service. NGCP possesses the franchise and eminent domain power to establish such facilities.

Application of Easement and Effects on Property Owners

The land is subject to a 60-meter wide legal easement right-of-way enforceable by NGCP. The expropriated portion for the tower and transmission lines (7,382 square meters, 30 meters wide) falls within this threshold and is to be used free of charge, except for damages to existing improvements. Only areas outside the 60-meter easement that are rendered unusable or unsafe ("dangling areas") are entitled to consequential damages or just compensation.

Following the doctrine in Republic v. Andaya, “taking” includes practical destruction or material impairment rendering the remainder of the property incapable of normal use. Accordingly, for such dangling areas, just compensation must be awarded as consequential damages.

Valuation of Compensation for Improvements and Property

The Court agreed with the CA that the valuation of the improvements (trees, structures) at ₱567,500 by the RTC was provisional and lacked sufficient basis; thus, reevaluation is necessary.

Regarding the just compensation of ₱1,000 per square meter for the 196-square-meter portion expropriated, the Court upheld the RTC’s valuation. The trial court considered multiple factors under Section 5 of RA 8974, including owner-declared value, similar property sales, land classification suitability (residential/industrial rather than purely agricultural), property location, and the Commissioners’ valuation report.

The Court emphasized the discretion of the courts in determining just compensation, noting the non-exclusive and permissive nature of factors under RA 8974, and that zonal valuation or assessed value alone is insufficient. The standard remains the owner’s loss, not taker’s gain. Judicial discretion in valuation for expropriation cannot be supplanted by rigid legislative or administrative formulas.

Court’s Final Ruling and Remand Instructions

The Supreme Court partly granted

Case Syllabus (G.R. No. 240720)

Background and Procedural History

Spouses Herbert E. Buot and Ophelia R. Completo (“Spouses Buot”) are registered owners of a parcel of agricultural land in Abugon, Sibonga, Cebu with an area of approximately 117,850 square meters.
The property is covered by Transfer Certificate of Title No. P-2260, originally registered pursuant to a free patent with reservations including public easements and servitudes under Section 112 of Commonwealth Act No. 141 (“Public Land Act”).
The National Transmission Corporation (“Transco”), later substituted by National Grid Corporation of the Philippines (“NGCP”), filed a complaint for expropriation to acquire a 196-square-meter portion and enforce an easement of right-of-way over 7,382 square meters for its Naga-Suba 138KV Transmission Line (T/L) Upgrading Project.
Spouses Buot opposed, seeking just compensation not only for the expropriated lands but also for the larger affected area due to dangers posed by transmission towers and existing structures on approximately 7,578 square meters.
The Regional Trial Court (RTC), Branch 26, Argao, Cebu, after appointing a Panel of Commissioners, initially fixed just compensation including improvements and ruled in favor of NGCP in a decision dated September 21, 2011, awarding Php 8,145,500.00.
The Court of Appeals (CA), in its February 9, 2018 decision, set aside the RTC decision and remanded the case for determination of the proper just compensation and for NGCP to obtain a quitclaim for the legal easement under RA 8974.
Both parties sought reconsideration; the CA denied these motions, prompting the Spouses Buot to file a Petition for Review on Certiorari before the Supreme Court.

Issues Presented for Resolution

Whether power and transmission lines fall under “similar works” under Section 112 of Commonwealth Act No. 141, thereby being subject to a legal easement of right-of-way without payment of land compensation.
Whether the CA erred in remanding the case to the RTC for the determination of just compensation for the expropriated land and affected improvements.
The proper valuation of just compensation including consequential damages and improvements on the property.

Facts as Determined by the Lower Courts

The subject property is agricultural land with a historical annotation indicating it is subject to various provisions of the Public Land Act including legal easements for right-of-way.
The easement covers a right-of-way not exceeding 60 meters in width for infrastructure projects, including power and transmission lines as later interpreted.
NGCP utilized a 30-meter part of this 60-meter corridor for towers and transmission lines, totaling 7,382 square meters for the project.
The RTC valued the expropriated land at Php 1,000 per square meter, relying on comparable property valuations and the Panel of Commissioners’ findings.
The CA found factual and legal gaps, notably a lack of sufficient basis for RTC’s valuation and the need for clarifying the exact area of expropriated land after deducting the 60-meter legal easement.

Legal Framework: Section 112 and Right-of-Way Easements

Section 112 of CA No. 141 provides that land granted by patent is subject to a legal easement of right-of-way not exceeding 60 meters for national government infrastructure projects such as highways, railroads, irrigation ditches, aqueducts, telegraph and telephone lines, airport runways, and “similar works” by public or quasi-public enterprises.
The provision allows appropriation of land under such easements free of charge, except for compensation for damaged improvements.
The “ejusdem generis” rule applies in interpreting “similar works” so that power and transmission lines—being integral infrastructure projects—are included within this easem