NAPOCOR vs PUREFOODS
G.R. No. 160725
September 12, 2008
National Power Corporation, Petitioner, vs PUREFOODS
Corporation, Solid Development Corporation, Jose Ortega Jr., Silvestre
Bautista, Alfredo Cabande, Heirs of Victor Trinidad and Moldex Reality Incorporated,
Respondents
Facts:
NAPOCOR,
a government-owned and controlled corporation created for the purpose of
undertaking development of hydroelectric power generation, the production of
electricity from nuclear, geothermal and other sources and the transmission of
electric power on a nationwide basis, is also empowered to acquire property
incident to or necessary, convenient or proper to carry out its purpose. It is
also empowered to enter private property in the lawful performance of its
business purposed provided that the
owners of such private property shall be indemnified for any damage that may be
caused thereby and exercise the right of eminent domain.
In
order to construct and maintain its Northwestern Luzon Project , NAPOCOR had to
acquire an easement if right-of-way over certain parcels of land situated in
the towns of Angat, San Rafael and San Ildefonso and in the city of San Jose
del Monte ---- all in the province of Bulacan.
On
November 5, 1997, NAPOCOR filed a special civil action for eminent domain
before the RTC of Malolos, Bulacan. The defendants were the vendors and vendees
of the affected parcels of land.
The complaint alleged that the
defendants were either the registered owners or the claimants of the affected
pieces of properties. It also alleged that the public purpose of the
Northwestern Luzon Project, as well as the urgency and necessity of acquiring
easements of right-of-way over the said parcels of land consisting of 62,426.50
sq.m. It also averred that the affected properties were selected by NAPOCOR in
a manner compatible with the greatest public good and the least private injury
and had not been expropriated for public use and that the negotiations between
the NAPOCOR and the defendants failed. The complaint prayed, among others, that
the RTC issue a writ of possession in favor of the NAPOCOR in the event that it
would be refused entry to the affected properties. Only the defendants herein
filed their respective answers.
Respondents Heirs of Trinidad
claimed that they should be indemnified for the value of the affected property
based on the prevailing market purchase price of P 750/sq.m. They also added
that there are other parcels of land within the area which are more suitable
for NAPOCOR’s project.
Respondent Moldex, alleged that the
expropriation of part if the landholding in which it has propriety interest
would divest the peripheral area of its value and render the same totally
useless and thus must be compensated for the loss of the peripheral area as
well.
Purefoods Corporation and SDC prayed
for the dismissal of the complaint. SDC averred that the taking would not serve
any public purpose and that the selection of its property for expropriation
would not be compatible with the greatest public good and the least private injury.
Purefoods who also prayed for the dismissal of the complaint argued that
NAPOCOR failed to append copies of the pertinent Torrens titles to the
complaint. It also averred that NAPOCOR’s offer was excessively low,
undervalued and obsolete and that its action had caused extreme prejudice to
its investment and further delay in the construction and development of its
piggery business, thereby adversely affecting its operation.
On December 19, 1997, NAPOCOR filed
its Urgent Ex Parte Motion for the Issuance of Writ of Possession wherein it
alleged that it had deposited with the Land Bank of the Philippines the amount
of P 126, 565.42 as provisional valuation of the properties sought to be
expropriated and that it had sent a Notice to Take Possession of the said
properties. The RTC directed the clerk of court to issue a writ of possession
on January 6, 1998.
The RTC issued an order dated June
14, 1999, after the pre-trial conference, reflecting he parties’ agreement to
limit the issues to the amount of just compensation and to whether respondent
Moldex was entitles to just compensation on the devaluation of the peripheral
area within its property.
The RTC appointed a second set of
commissioners after the first set of appointed commissioners failed to discharge
their duties. On May 18, 2001, the commissioners submitted separate reports to
the RTC which formed part of the case records. The commissioners recommended
that the compensation due from NAPOCOR be based on the fair market value of P
600.00/sq.m. for the properties belonging to Moldex and P 400.00/sq.m. for the undeveloped
and underdeveloped properties belonging to the rest of the respondents. In the
rendered decision of the RTC dated December 17, 2001, it fixed the amount of
P600.00/sq.m. for the land of Moldex as just compensation and P400.00/sq.m. for
the properties of the other respondents and payment of interest of 12% per
annum from the finality of its decision until full payment thereof.
Moldex sought for reconsideration of
the said decision but was denied by the RTC in its Order dated December 7,
2001. Both Moldex and NAPOCOR filed separate appeals before the Court of
Appeals.
Moldex argues that the RTC erred in
the following instances: (1) in ruling that just compensation should be paid at
P600/sq.m. and not P1,600/sq.m; (2) in not imposing interest of 12% per annum
reckoned from the taking until the finality of the decision and; (3) in not
ordering the payment of just compensation for the peripheral portion of the
affected property.
NAPOCOR assailed the RTC’s
valuations of the properties at P600/sq.m and P400/sq.m, contending that the
same are not based on the value of the properties at the time of the taking
when the properties were still agricultural in nature. It claimed that only an
easement fee, which should not exceed 10% of the declared market value, should
be paid to the respondents. It also questioned the awared of interest of 12%
per annum from the finality of the decision until the full payment of the
amount adjudged.
On November 7, 2003, the CA affirmed
the RTCs decision in all respect except for the period during which the
interest of 12% per annum would accrue.
Moldex sought the reconsideration of
the November 7, 2003 decision of the CA while NAPOCOR, through the OSG,
elevated the case to the SC via petition for review of certiorari.
ISSUE:
Whether
or not only the easement fee of 10% of the market value of the expropriated
properties should be paid for the affected owners.
RULING:
No.
The question of just compensation for an easement of right-of-way over a parcel
of land that will be traversed by NAPOCOR’s transmission lines has already been
answered in the case of NAPOCOR vs Manubay Agro-Industrial Development
Corporation. In the said case, it was held that because of the nature of the
easement, which will deprive normal use of ther land for an indefinite period,
just compensation must be based on the full market value of the affected
properties. Also in the case of NAPOCOR vs Aguirre-Paderanga, the court noted
that the passage of NAPOCOR’s transmission lines over the affected property
causes not only actual damage but also restriction on the agricultural and
economic activity normally undertaken on the entire property. While in the said
case NAPOCOR was seeking to acquire only an easement of the right-of-way, the
court nonetheless rules that the just compensation in the amount of only 10% of
the market value of the property was not enough to indemnify the incursion of
the affected property.
The
Court explained therein that expropriation is not limited to the acquisition of
real property with corresponding transfer of title or possession. The
right-of-way easement resulting in a restriction or limitation on property
rights over the land traversed by transmission lines, as in the present case,
also falls within the ambit of the terms “expropriation”. In eminent domain or
expropriation proceedings, the general rule is that the just compensation to
which the owner of the condemned property is entitles is the market value and
market value is the “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 receive therefor. The aforementioned rule, however, is modified
where only a part of a certain property is expropriated. In such case the owner
is not restricted to compensation for the portion actually taken. In addition
to the market value of the portion taken, he is also entitled to recover the
consequential damage, if any, to the remaining part of the property. At the
same time, from the total compensation must be deducted the value of the
consequential benefits.”
While
section 3(a) of R.A. No. 6395, as amended, and the implementing rule of R.A.
No. 8974 indeed state that only 10% of the market value of the property is due
to the owner of the property subject to an easement of right-of-way, said rule
is not binding on the court. Well-settled is the rule that the determination of
“just compensation” in eminent domain cases is a judicial function.
Thus,
the decision of the RTC and CA with regard to the value of just compensation of
P 400/sq.m. of the properties of the respondents except for Moldex which is
P600/sq.m. is affirmed.