Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 170846 February 6, 2007
NATIONAL POWER CORPORATION, Petitioner,
vs.
AURELLANO S. TIANGCO, LOURDES S. TIANGCO and NESTOR S. TIANGCO, Respondents.
D E C I S I O N
GARCIA, J.:
In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner National Power Corporation (NPC) seeks the annulment and setting aside of the Decision1 dated March 14, 2005 of the Court of Appeals (CA) in CA-G.R. CV No. 53576, as reiterated in its Resolution2 of December 2, 2005 which denied the petitioner’s motion for reconsideration. The assailed decision modified that of the Regional Trial Court (RTC) of Tanay, Rizal, Branch 80, by increasing the amount of just compensation due the respondents in an expropriation case filed against them by the petitioner.
The facts:
Herein respondents Aurellano, Lourdes and Nestor, all surnamed Tiangco, are the owners of a parcel of land with an area of 152,187 square meters at Barangay Sampaloc, Tanay, Rizal and registered in their names under TCT No. M-17865 of the Registry of Deeds of Rizal.
On the other hand, petitioner NPC is a government-owned and controlled corporation created for the purpose of undertaking the development and generation of power from whatever source. NPC’s charter (Republic Act No. 6395) authorizes the corporation to acquire private property and exercise the right of eminent domain.1awphi1.net
NPC requires 19,423 square meters of the respondents’ aforementioned property, across which its 500Kv Kalayaan-San Jose Transmission Line Project will traverse. NPC’s Segregation Plan3 for the purpose shows that the desired right-of-way will cut through the respondents’ land, in such a manner that 33,392 square meters thereof will be left separated from 99,372 square meters of the property. Within the portion sought to be expropriated stand fruit-bearing tress, such as mango, avocado, jackfruit, casuy, santol, calamansi, sintones and coconut trees.
On November 20, 1990, after repeated unsuccessful negotiations with the respondents, NPC filed with the RTC of Tanay, Rizal a complaint for expropriation4 against them. In time, the respondents filed their answer.
On March 14, 1991, the trial court issued a Condemnation Order, granting NPC the right to take possession of the area sought to be expropriated. In the same Order, the court directed the parties to nominate their respective commissioners, with a third member to be nominated and appointed by the court itself, to determine the proper amount of just compensation to be paid to the respondents. As constituted in the manner thus indicated, the board of commissioners was composed of the following: for NPC, Atty. Restituto Mallo of its Legal Department; for the respondents, Mr. Basilio Afuang, a geodetic engineer and a real estate broker by profession; and for the court, Clerk of Court V Ms. Amelia de Guzman Carbonell.
On April 5, 1991, the trial court issued an order directing NPC to pay and deposit with the Rizal Provincial Treasurer the amount of ₱81,204.00, representing the temporary provisional value of the area subject of the expropriation prior to the taking of possession thereof. On April 22, 1991, with NPC having complied with the deposit requirement, a writ of possession was issued in its favor.
Thereafter, an ocular inspection of the premises was conducted and hearings before the board of commissioners were held, during which the Municipal Assessor of Tanay, Rizal was presented. He submitted a record of the Schedule of Values for taxation purposes and a certification to the effect that the unit value of the respondents’ property is ₱21,000.00 per hectare.
On August 7, 1993, commissioner Basilio Afuang for the respondents filed his report. He pegged the price of the area sought to be expropriated at ₱30.00 per square meter or ₱582,690.005 in the aggregate; and for the improvements thereon, Afuang placed a valuation of ₱2,093,950.00. The figures are in contrast with the respondents’ own valuation of ₱600,600.00, for the area, and ₱4,935,500.00, for the improvements.
On September 14, 1993, NPC filed an amended complaint to acquire only 19,423 square meters of the respondents’ property. The original area of 20,220 square meters initially sought to be expropriated under the original complaint turned out to be in excess of the area required.
For its part, NPC made it clear that it is interested only in acquiring an easement of right-of-way over the respondents’ property and that ownership of the area over which the right-of-way will be established shall remain with the respondents. For this reason, NPC claims that it should pay, in addition to the agreed or adjudged value of the improvements on the area, only an easement fee in an amount equivalent to ten per cent (10%) of the market value of the property as declared by the respondents or by the Municipal Assessor, whichever is lower, as provided for under Section 3-A of Republic Act No. 6395, as amended by Presidential Decree 938.6
The court-appointed commissioner, Ms. Amelia de Guzman Carbonell, found that the risk and dangerous nature of the transmission line project essentially deprive the respondents of the use of the area. Nonetheless, she recommended that the determination of just compensation should be relegated to "expert appraisers."7
From the evidence before it, the trial court made a determination that the market value of the property is ₱2.09 per square meter, or ₱40,594.07 for the entire 19,423 square meters needed by NPC, and not the ₱30.00 per square meter claimed by the respondents. Neither did the trial court consider NPC’s reliance on Section 3-A of Republic Act No. 6395, as amended by Presidential Decree 938, the court placing more weight on the respondents’ argument that expropriation would result in the substantial impairment of the use of the area needed, even though what is sought is a mere aerial right-of-way. The court found as reasonable the amount of ₱324,750.00 offered by NPC for the improvements, as the same is based on the official current schedule of values as determined by the Municipal Assessor of Tanay, Rizal.
Hence, in its decision8 of February 19, 1996, the trial court rendered judgment as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered:
1. Expropriating in favor of [NPC] a parcel of land covering a total area of 19,423 sq.m. covered by TCT No. M-17860 owned by the [respondents];
2. Ordering the amount of P40,594.07 as just compensation for the 19,423 square meters of land affected by the expropriations; and the amount of P324,750.00 as reasonable compensation for the improvements on the land expropriated with legal interest from the time of possession by the plaintiff. No pronouncement as to costs.
SO ORDERED. (Words in brackets supplied.)
The respondents moved for reconsideration, presenting for the first time a document entitled "Bureau of Internal Revenue Circular of Appraisal," which shows that for the year 1985, lands in Barangay Sampaloc were valued at ₱30.00 per square meter; for the year 1992, at ₱80.00 per square meter; and for year 1994, at ₱100.00 per square meter. Respondents maintain that the price of ₱30.00 per square meter for the needed area of 19,423 square meters is the reasonable amount and should be the basis for fixing the amount of just compensation due them. The trial court denied the motion, stating that the BIR circular in question was belatedly filed and therefore NPC could not have opposed its presentation.
From the aforesaid decision of the trial court, both NPC and the respondents went on appeal to the CA whereat the separate appeals were consolidated and docketed as CA-G.R. CV No. 53576. The appellate court found merit in the respondents’ appeal, and disregarded the ₱2.09 per square meter valuation of the trial court, which was based on a 1984 tax declaration. Instead, the CA placed reliance upon a 1993 tax declaration, "being only two years removed from the time of taking."9 The appellate court determined the time of taking to be in 1991. Thus, the greater value of ₱913,122.00 as declared in Tax Declaration No. 011-2667 dated July 23, 1993 should be the basis for determining just compensation. With regard to the value of improvements, the appellate court found NPC’s valuation more favorable, being based on the current (1991) schedule of values for trees in the provinces of Rizal and Laguna. Hence, in its decision10 of March 14, 2005, the CA rendered judgment, to wit:
WHEREFORE, the instant Appeal is GRANTED. The decision of the Regional Trial Court of Tanay, Rizal, Branch 80 dated February 19, 1996 is hereby MODIFIED and the compensation awarded for the 19,423 square meters of land affected is increased to ₱116,538.00, and the reasonable compensation for the improvements thereon is likewise increased to P325,025.00, with legal interest from the time of possession by the plaintiff-appellee NAPOCOR. No pronouncement as to costs.
SO ORDERED.
NPC moved for reconsideration, but its motion was denied by the appellate court in its resolution11 of December 2, 2005.
Hence, NPC’s instant petition for review, submitting for our resolution only the following issues with respect to the amount of just compensation that must be paid the respondents for the expropriated portion (19,423 square meters) of their property:
1. Is it to be based on the 1984 or the 1993 valuation?
2. Should NPC pay for the value of the land being taken, or should it be limited to what is provided for under P.D. 938, that is, ten per cent (10%) of its market value as declared by the owner or the assessor (whichever is lower), considering that the purpose for which the property is being taken is merely for the establishment of a safe and free passage for its overhead transmission lines?
There is no issue as to the improvements. Since the ₱325,025.00 valuation therefor is the very price set by the NPC commissioner, to which the corporation did not object but otherwise adopts, the Court fixes the amount of ₱325,025.00 as just compensation for the improvements.
We now come to the more weighty question of what amount is just by way of compensation for the 19,423 square-meter portion of the respondents’ property.
In eminent domain cases, the time of taking is the filing of the complaint, if there was no actual taking prior thereto. Hence, in this case, the value of the property at the time of the filing of the complaint on November 20, 1990 should be considered in determining the just compensation due the respondents. So it is that in National Power Corporation v. Court of Appeals, et al.,12 we ruled:
Normally, the time of the taking coincides with the filing of the complaint for expropriation. Hence, many rulings of this Court have equated just compensation with the value of the property as of the time of filing of the complaint consistent with the above provision of the Rules. So too, where the institution of the action precedes entry into the property, the just compensation is to be ascertained as of the time of the filing of the complaint.
The trial court fixed the value of the property at its 1984 value, while the CA, at its 1993 worth. Neither of the two determinations is correct. For purposes of just compensation, the respondents should be paid the value of the property as of the time of the filing of the complaint which is deemed to be the time of taking the property.
It was certainly unfair for the trial court to have considered a property value several years behind its worth at the time the complaint in this case was filed on November 20, 1990. The landowners are necessarily shortchanged, considering that, as a rule, land values enjoy steady upward movement. It was likewise erroneous for the appellate court to have fixed the value of the property on the basis of a 1993 assessment. NPC would be paying too much. Petitioner corporation is correct in arguing that the respondents should not profit from an assessment made years after the taking.
The expropriation proceedings in this case having been initiated by NPC on November 20, 1990, property values on such month and year should lay the basis for the proper determination of just compensation. In Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform,13 the Court ruled that the equivalent to be rendered for the property to be taken shall be substantial, full, ample and, as must apply to this case, real. This must be taken to mean, among others, that the value as of the time of taking should be the price to be paid the property owner.
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. In this case, this simply means the property’s fair market value at the time of the filing of the complaint, or "that sum of money which a person desirous but not compelled to buy, and an owner willing but not compelled to sell, would agree on as a price to be given and received therefor."14 The measure is not the taker’s gain, but the owner’s loss.
In the determination of such value, the court is not limited to the assessed value of the property or to the schedule of market values determined by the provincial or city appraisal committee; these values consist but one factor in the judicial valuation of the property.15 The nature and character of the land at the time of its taking is the principal criterion for determining how much just compensation should be given to the landowner16 All the facts as to the condition of the property and its surroundings, as well as its improvements and capabilities, should be considered.17
Neither of the two determinations made by the courts below is therefore correct. A new one must be arrived at, taking into consideration the foregoing pronouncements.
Now, to the second issue raised by petitioner NPC.
In several cases, the Court struck down NPC’s consistent reliance on Section 3-A of Republic Act No. 6395, as amended by Presidential Decree 938.18 True, an easement of a right-of-way transmits no rights except the easement itself, and the respondents would retain full ownership of the property taken. Nonetheless, the acquisition of such easement is not gratis. The limitations on the use of the property taken for an indefinite period would deprive its owner of the normal use thereof. For this reason, the latter is entitled to payment of a just compensation, which must be neither more nor less than the monetary equivalent of the land taken.19
While the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated property, no cogent reason appears why said power may not be availed of to impose only a burden upon the owner of the condemned property, without loss of title and possession.20 However, if the easement is intended to perpetually or indefinitely deprive the owner of his proprietary rights through the imposition of conditions that affect the ordinary use, free enjoyment and disposal of the property or through restrictions and limitations that are inconsistent with the exercise of the attributes of ownership, or when the introduction of structures or objects which, by their nature, create or increase the probability of injury, death upon or destruction of life and property found on the land is necessary, then the owner should be compensated for the monetary equivalent of the land, in accordance with our ruling in NPC v. Manubay Agro-Industrial:
As correctly observed by the CA, considering the nature and the effect of the installation power lines, the limitations on the use of the land for an indefinite period would deprive respondent of normal use of the property. For this reason, the latter is entitled to payment of a just compensation, which must be neither more nor less than the monetary equivalent of the land.21
The evidence suggests that NPC’s transmission line project that traverses the respondents’ property is perpetual, or at least indefinite, in nature. Moreover, not to be discounted is the fact that the high-tension current to be conveyed through said transmission lines evidently poses a danger to life and limb; injury, death or destruction to life and property within the vicinity. As the Court held in NPC v. Chiong,22 it is not improper to assume that NPC will erect structures for its transmission lines within the property. What is sought to be expropriated in this case is, at its longest extent, 326.34 meters, and through it may be built several structures, not simply one. Finally, if NPC were to have its way, respondents will continue to pay the realty taxes due on the affected portion of their property, an imposition that, among others, merits the rejection of NPC’s thesis of payment of a mere percentage of the property’s actual value.
WHEREFORE, the instant petition is GRANTED in part in that the decision of the Court of Appeals dated March 14, 2005 vis a vis the award of ₱116,538.00, as and by way of just compensation for the 19,423 square meters of the respondents’ property, is SET ASIDE, and the case is ordered REMANDED to the court of origin for the proper determination of the amount of just compensation for the portion thus taken, based on our pronouncements hereon. The same decision, however, is AFFIRMED, insofar as it pertains to the award of ₱325,025.00 for the improvements, with legal interest from the time of actual possession by the petitioner.
No pronouncement as to costs.
SO ORDERED.
CANCIO C. GARCIA
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
Chairperson
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice |
RENATO C. CORONA
Asscociate Justice |
ADOLFO S. AZCUNA
Associate Justice
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
Footnotes
1 Penned by Associate Justice Vicente Q. Roxas, with Associate Justices Portia Aliňo-Hormachuelos and Juan Q. Enriquez, concurring; Rollo, pp. 23-32.
2 Id. at 38.
3 Id. at 57.
4 The complaint was later amended because it failed to state the true area that was required for the project, which is 19,423 square meters. Supra note 6.
5 The total amounts stated in the records (the commissioners’ reports included) are inaccurate, for they are based on the original area of 22,200 square meters that NPC originally sought for the project; a resurvey was conducted, and it was found that only 19,423 square meters was required therefor. The complaint was amended accordingly, but only after the commissioners have prepared and submitted their respective reports.
6 P.D. 938, "An Act Further Amending Certain Sections of Republic Act Numbered Sixty-Three Hundred Ninety-Five Entitled, ‘An Act Revising the Charter of the National Power Corporation’," as amended by Presidential Decrees Nos. 380, 395 and 758 provides:
"Section 4. A new section shall be inserted to be known as Section 3A of the same Act to read as follows:
Sec. 3A. In acquiring private property or private property rights through expropriation proceedings where the land or portion thereof will be traversed by the transmission lines, only a right-of-way easement thereon shall be acquired when the principal purpose for which such land is actually devoted will not be impaired, and where the land itself or portion thereof will be needed for the projects or works, such land or portion thereof as necessary shall be acquired.
In determining the just compensation of the property or property sought to be acquired through expropriation proceedings, the same shall
(a) With respect to the acquired land or portion thereof, not exceed the market value declared by the owner or administrator or anyone having legal interest in the property, or such market value as determined by the assessor, whichever is lower.
With respect to the acquired right-of-way easement over the land or portion thereof, not to exceed ten percent (10%) of the market value declared by the owner or administrator or anyone having legal interest in the property, or such market value as determined by the assessor whichever is lower.
In addition to the just compensation for easement of right-of-way, the owner of the land or owner of the improvement, as the case may be, shall be compensated for the improvements actually damaged by the construction and maintenance of the transmission lines, in an amount not exceeding the market value thereof as declared by the owner or administrator, or anyone having legal interest in the property, or such market value as determined by the assessor whichever is lower; Provided, that in cases any buildings, houses and similar structures are actually affected by the right-of-way for the transmission lines, their transfer, if feasible, shall be effected at the expense of the Corporation; Provided, further, that such market value prevailing at the time the Corporation gives notice to the landowner or administrator or anyone having legal interest in the property, to the effect that his land or portion thereof is needed for its projects or works shall be used as basis to determine the just compensation therefor."
7 Report of Commissioner Amelia de Guzman Carbonell, Clerk of Court V, Rollo, pp.73-75.
8 Id. at 76-81.
9 Id. at 30.
10 Supra note 1.
11 Supra note 2.
12 G.R. No. 113194, March 11, 1996, 254 SCRA 577.
13 G.R. No. 78742, July 14, 1989, 175 SCRA 343.
14 National Power Corporation v. Chiong, G.R. No. 152436, June 20, 2003, 404 SCRA 527.
15 Republic v. Ker and Company Limited, G.R. No. 136171, July 2, 2002, 383 SCRA 584; Republic v. Court of Appeals, G.R. No. L-44222, September 30, 1987, 154 SCRA 428.
16 National Power Corporation v. Chiong, G.R. No. 152436, June 20, 2003, 404 SCRA 527.
17 Export Processing Zone Authority v. Dulay, G.R. No. L-59603, April 29, 1987, 149 SCRA 305.
18 Didipio Earth-Savers’ Multi-Purpose Association, Inc. (DESAMA) v. Gozun, G.R. No. 157882, March 30, 2006, 485 SCRA 587; NPC v. Paderanga, G.R. No. 155065, July 28, 2005, 464 SCRA 481; National Power Corporation v. Chiong, G.R. No. 152436, June 20, 2003, 404 SCRA 527; NPC v. Gutierrez, G.R. No. 60077, January 18, 1991, 193 SCRA 1; Camarines Norte Electric Cooperative, Inc. (CANORECO) v. Court of Appeals, G.R. No. 109338, November 20, 2000, 345 SCRA 85.
19 NPC v. Manubay Agro-Industrial Development Corporation, G.R. No. 150936, August 18, 2004, 437 SCRA 60.
20 NPC v. Gutierrez, supra.
21 NPC v. Manubay Agro-Industrial Development Corporation, supra.
22 Supra. Therein the Court declared:
Petitioner averred in its complaint in Civil Case No. 1442-I, that it sought to acquire "an easement of right-of-way" over portions of the properties owned by respondents, for a total of 10,950 square meters. However, a perusal of its complaint shows that petitioner also stated that it would erect structures for its transmission lines on portions of the expropriated property. In other words, the expropriation was not to be limited for the purpose of "easement of right-of-way." In fact, in their Answer, the Heirs of Agrifina Angeles, alleged that petitioner had actually occupied an area of 4,000 square meters wherein it constructed structures for its transmission lines and was seeking to occupy another 4,000 square meters. Petitioner failed to controvert this material allegation. Justifiably, the market value of these 4,000 square meters allegedly occupied by the petitioner has become the very crux of the present case.
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