THIRD DIVISION
NATIONAL POWER
CORPORATION,
Petitioner,
G.R.
No.
150936
August 18, 2004
-versus-
MANUBAY
AGRO-INDUSTRIAL
DEVELOPMENT CORPORATION,
Respondent.
D E C I S I O N
PANGANIBAN,
J.:chanroblesvirtuallawlibrary
How much just compensation
should be paid for an easement of a right of way over a parcel of land
that will be traversed by high-powered transmission lines? Should
such compensation be a simple easement fee or the full value of the
property?
This is the question to be answered in this case.chanrobles virtual law library The Case
Before us is a petition
for review[1]
under Rule 45 of the Rules of Court, seeking to reverse and set aside
the
November 23, 2001 Decision[2]
of the Court of Appeals (CA) in CA-GR CV No. 60515. The CA
affirmed
the June 24, 1998 Decision[3]
of the Regional Trial Court[4]
(RTC) of Naga City (Branch 26), directing the National Power
Corporation
(NPC) to pay the value of the land expropriated from respondent for the
use thereof in NPC’s Leyte-Luzon HVDC Power Transmission Project.
The Facts
The CA summarized the
antecedents of the case as follows:
“In 1996, [Petitioner]
NATIONAL POWER CORPORATION, a government-owned and controlled
corporation
created for the purpose of undertaking the development and generation
of
hydroelectric power, commenced its 350 KV Leyte-Luzon HVDC Power
Transmission
Project. The project aims to transmit the excess electrical
generating
capacity coming from Leyte Geothermal Plant to Luzon and various load
centers
in its vision to interconnect the entire country into a single power
grid.
Apparently, the project is for a public purpose.cralaw:red
“In order to carry out
this project, it is imperative for the [petitioner’s] transmission
lines
to cross over certain lands owned by private individuals and
entities.
One of these lands, [where] only a portion will be traversed by the
transmission
lines, is owned by [respondent] MANUBAY AGRO-INDUSTRIAL DEVELOPMENT
CORPORATION.cralaw:red
“Hence, on 03 December
1996, [petitioner] filed a complaint for expropriation before the
Regional
Trial Court of Naga City against [respondent] in order to acquire an
easement
of right of way over the land which the latter owns. The said
land
is situated at Km. 8, Barangay Pacol, Naga City, Camarines Sur and
described
with more particularity, as follows:chanrobles virtual law library
TCT/OCT NO. TOTAL
AREA
AFFECTED AREA CLASS.
IN
SQ.M.
IN SQ.
M.
OF LAND
17795
490,232
21,386.16
Agri.cralaw:red
17797
40,848
1,358.17
Agri.cralaw:red
17798
5,279
217.38
Agri.cralaw:red
Total - 22,961.71
“On 02 January 1997,
[respondent] filed its answer. Thereafter, the court a quo issued
an order dated 20 January 1997 authorizing the immediate issuance of a
writ of possession and directing Ex-Officio Provincial Sheriff to
immediately
place [petitioner] in possession of the subject land.cralaw:red
“Subsequently, the court
a quo directed the issuance of a writ of condemnation in favor of
[petitioner]
through an order dated 14 February 1997. Likewise, for the
purpose
of determining the fair and just compensation due to [respondent], the
court appointed three commissioners composed of one representative of
the
petitioner, one for the respondent and the other from the court,
namely:
OIC-Branch Clerk of Court Minda B. Teoxon as Chairperson and Philippine
National Bank-Naga City Loan Appraiser Mr. Isidro Virgilio Bulao, Jr.
and
City Assessor Ramon R. Albeus as members.cralaw:red
“On 03 and 06 March
1997, respectively, Commissioners Ramon Albeus and Isidro Bulao, Jr.
took
their oath of office before OIC Branch Clerk of Court and Chairperson
Minda
B. Teoxon.chanrobles virtual law library
“Accordingly, the commissioners
submitted their individual appraisal/valuation reports. The
commissioner
for the [petitioner], Commissioner Albeus, finding the subject land
irregular
and sloppy, classified the same as low density residential zone and
recommended
the price of P115.00 per square meter. On the other hand,
Commissioner
Bulao, commissioner for the [respondent], recommended the price of
P550.00
per square meter. The court’s Commissioner and Chairperson of the
Board Minda Teoxon, on the other hand, found Commissioner Albeus’
appraisal
low as compared to the BIR Zonal Valuation and opted to adopt the price
recommended by Commissioner Bulao. On the assumption that the
subject
land will be developed into a first class subdivision, she recommended
the amount of P550.00 per square meter as just compensation for the
subject
property, or the total amount of P12,628,940.50 for the entire area
affected.”[5]
Taking into consideration
the condition, the surroundings and the potentials of respondent’s
expropriated
property, the RTC approved Chairperson Minda B. Teoxon’s recommended
amount
of P550 per square meter as just compensation for the property.
The
trial court opined that the installation thereon of the 350 KV
Leyte-Luzon
HVDC Power Transmission Project would impose a limitation on the use of
the land for an indefinite period of time, thereby justifying the
payment
of the full value of the property.cralaw:red
Further, the RTC held
that it was not bound by the provision cited by petitioner -- Section
3-A[6]
of Republic Act 6395[7],
as amended by Presidential Decree 938. This law prescribes as
just
compensation for the acquired easement of a right of way over an
expropriated
property an easement fee in an amount not exceeding 10 percent of the
market
value of such property. The trial court relied on the earlier
pronouncements
of this Court that the determination of just compensation in eminent
domain
cases is a judicial function. Thus, valuations made by the
executive
branch or the legislature are at best initial or preliminary only.
Ruling of the
Court
of Appeals
Affirming the RTC, the
CA held that RA 6395, as amended by PD No. 938, did not preclude
expropriation.
Section 3-A thereof allowed the power company to acquire not just an
easement
of a right of way, but even the land itself. Such easement was
deemed
by the appellate court to be a “taking” under the power of eminent
domain.cralaw:red
The CA observed that,
given their nature, high-powered electric lines traversing respondent’s
property would necessarily diminish - if not damage entirely - the
value
and the use of the affected property; as well as endanger lives and
limbs
because of the high-tension current conveyed through the lines.
Respondent
was therefore deemed entitled to a just compensation, which should be
neither
more nor less than the monetary equivalent of the property taken.
Accordingly, the appellate found the award of P550 per square meter to
be proper and reasonable.chanrobles virtual law library
Hence, this Petition.[8]
Issues
In its Memorandum, petitioner
submits this lone issue for our consideration:
“Whether or not the
Honorable Court of Appeals gravely erred in affirming the Decision
dated
June 24, 1998 of the Regional Trial Court, Branch 26, Naga City
considering
that its Decision dated November 23, 2001 is not in accord with law and
the applicable decisions of this Honorable Court.”[9]
The Court’s Ruling
The Petition is devoid
of merit.chanrobles virtual law library
Sole Issue:
Just Compensation
Petitioner contends
that the valuation of the expropriated property -- fixed by the trial
court
and affirmed by the CA -- was too high a price for the acquisition of
an
easement of a mere aerial right of way, because respondent would
continue
to own and use the subject land anyway. Petitioner argues that in
a strict sense, there is no “taking” of property, but merely an
imposition
of an encumbrance or a personal easement/servitude under Article 614[10]
of the Civil Code. Such encumbrance will not result in ousting or
depriving respondent of the beneficial enjoyment of the property.
And even if there was a “taking,” petitioner points out that the loss
is
limited only to a portion of the aerial domain above the property of
respondent.
Hence, the latter should be compensated only for what it would actually
lose.cralaw:red
We are not persuaded.cralaw:red
Petitioner averred in
its Complaint in Civil Case No. RTC 96-3675 that it had sought to
acquire
an easement of a right of way over portions of respondent’s land -- a
total
area of 22,961.71 square meters.[11]
In its prayer, however, it also sought authority to enter the property
and demolish all improvements existing thereon, in order to commence
and
undertake the construction of its Power Transmission Project.chanrobles virtual law library
In other words, the
expropriation was not to be limited to an easement of a right of
way.
In its Answer, respondent alleged that it had already authorized
petitioner
to take possession of the affected portions of the property and to
install
electric towers thereon.[12]
The latter did not controvert this material allegation.cralaw:red
Granting arguendo that
what petitioner acquired over respondent’s property was purely an
easement
of a right of way, still, we cannot sustain its view that it should pay
only an easement fee, and not the full value of the property. The
acquisition of such an easement falls within the purview of the power
of
eminent domain. This conclusion finds support in similar cases in
which the Supreme Court sustained the award of just compensation for
private
property condemned for public use.[13]
Republic v. PLDT[14]
held thus:
“x
x x. Normally, of course, the power of eminent
domain results in the taking or appropriation of title to, and
possession
of, the expropriated property; but no cogent reason appears why the
said
power may not be availed of to impose only a burden upon the owner of
condemned
property, without loss of title and possession. It is
unquestionable
that real property may, through expropriation, be subjected to an
easement
of right of way.”[15]
True, an easement of
a right of way transmits no rights except the easement itself, and
respondent
retains full ownership of the property. The acquisition of such
easement
is, nevertheless, not gratis. 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.[16]chanrobles virtual law library
Just compensation is
defined as the full and fair equivalent of the property taken from its
owner by the expropriator. The measure is not the taker’s gain,
but
the owner’s loss. The word “just” is used to intensify the
meaning
of the word “compensation” and to convey thereby the idea that the
equivalent
to be rendered for the property to be taken shall be real, substantial,
full and ample.[17]
In eminent domain or
expropriation proceedings, the just compensation to which the owner of
a condemned property is entitled is generally the market value.
Market
value is “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.”[18]
Such amount 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. However, these values may serve as factors to be
considered
in the judicial valuation of the property.[19]
The parcels of land
sought to be expropriated are undeniably undeveloped, raw agricultural
land. But a dominant portion thereof has been reclassified by the
Sangguniang Panlungsod ng Naga -- per Zoning Ordinance No. 94-076 dated
August 10, 1994 -- as residential, per the August 8, 1996 certification
of Zoning Administrator Juan O. Villegas Jr.[20]
The property is also covered by Naga City Mayor Jesse M. Robredo’s
favorable
endorsement of the
issuance of a
certification
for land use conversion by the Department of Agrarian Reform (DAR) on
the
ground that the locality where the property was located had become
highly
urbanized and would have greater economic value for residential or
commercial
use.[21]chanrobles virtual law library
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 landowner.[22]
All the facts as to the condition of the property and its surroundings,
as well as its improvements and capabilities, should be considered.[23]
In fixing the valuation
at P550 per square meter, the trial court had considered the Report of
the commissioners and the proofs submitted by the parties. These
documents
included the following: (1) the established fact that the property of
respondent
was located along the Naga-Carolina provincial road; (2) the fact that
it was about 500 meters from the Kayumanggi Resort and 8 kilometers
from
the Naga City Central Business District; and a half kilometer from the
main entrance of the fully developed Naga City Sports Complex -- used
as
the site of the Palarong Pambansa -- and the San Francisco Village
Subdivision,
a first class subdivision where lots were priced at P2,500 per square
meter;
(3) the fair market value of P650 per square meter proffered by
respondent,
citing its recently concluded sale of a portion of the same property to
Metro Naga Water District at a fixed price of P800 per square meter;
(4)
the BIR zonal valuation of residential lots in Barangay Pacol, Naga
City,
fixed at a price of P220 per square meter as of 1997; and (5) the fact
that the price of P430 per square meter had been determined by the RTC
of Naga City (Branch 21)[24]
as just compensation for the Mercados’ adjoining property, which had
been
expropriated by NPC for the same power transmission project.cralaw:red
The chairperson of the
Board of Commissioners, in adopting the recommendation of Commissioner
Bulaos, made a careful study of the property. Factors considered
in arriving at a reasonable estimate of just compensation for
respondent
were the location; the most profitable likely use of the remaining
area;
and the size, shape, accessibility as well as listings of other
properties
within the vicinity. Averments pertaining to these factors were
supported
by documentary evidence.cralaw:red
On the other hand, the
commissioner for petitioner -- City Assessor Albeus -- recommended a
price
of P115 per square meter in his Report dated June 30, 1997. No
documentary
evidence, however, was attached to substantiate the opinions of the
banks
and the realtors, indicated in the commissioner’s Report and
computation
of the market value of the property.cralaw:red
The price of P550 per
square meter appears to be the closest approximation of the market
value
of the lots in the adjoining, fully developed San Francisco Village
Subdivision.
Considering that the parcels of land in question are still undeveloped
raw land, it appears to the Court that the just compensation of P550
per
square meter is justified.cralaw:red
Inasmuch as the determination
of just compensation in eminent domain cases is a judicial function,[25]
and the trial court apparently did not act capriciously or arbitrarily
in setting the price at P550 per square meter -- an award affirmed by
the
CA -- we see no reason to disturb the factual findings as to the
valuation
of the property. Both the Report of Commissioner Bulao and the
commissioners’
majority Report were based on uncontroverted facts supported by
documentary
evidence and confirmed by their ocular inspection of the
property.
As can be gleaned from the records, they did not abuse their authority
in evaluating the evidence submitted to them; neither did they
misappreciate
the clear preponderance of evidence. The amount fixed and agreed
to by the trial court and respondent appellate court has not been
grossly
exorbitant or otherwise unjustified.[26]chanrobles virtual law library
Majority Report
of Commissioners Sufficient
Deserving scant consideration
is petitioner’s contention that the Report adopted by the RTC and
affirmed
by the CA was not the same one submitted by the board of commissioners,
but was only that of its chairperson. As correctly pointed out by
the trial court, the commissioner’s Report was actually a decision of
the
majority of the board. Note that after reviewing the Reports of
the
other commissioners, Chairperson Teoxon opted to adopt the
recommendation
of Commissioner Bulao. There has been no claim that fraud or
prejudice
tainted the majority Report. In fact, on December 19, 1997, the
trial
court admitted the commissioner’s Report without objection from any of
the parties.[27]chanrobles virtual law library
Under Section 8 of Rule
67 of the Rules of Court, the court may “accept the report and render
judgment
in accordance therewith; or for cause shown, it may recommit the same
to
the commissioners for further report of facts, or it may set aside the
report and appoint new commissioners, or it may accept the report in
part
and reject it in part; x x
x.”
In other words, the reports of commissioners are merely advisory and
recommendatory
in character, as far as the courts are concerned.[28]
Thus, it hardly matters
whether the commissioners have unanimously agreed on their recommended
valuation of the property. It has been held that the report of only two
commissioners may suffice, even if the third commissioner dissents.[29]
As a court is not bound by commissioners’ reports it may make such
order
or render such judgment as shall secure for the plaintiff the property
essential to the exercise of the latter’s right of condemnation; and
for
the defendant, just compensation for the property expropriated.
For
that matter, the court may even substitute its own estimate of the
value
as gathered from the evidence on record.[30]
WHEREFORE, the Petition
is DENIED, and the assailed Decision AFFIRMED. No pronouncement
as
to costs.cralaw:red
SO ORDERED.
Corona, and
Carpio-Morales,
JJ., concur.
Sandoval-Gutierrez,
J., on official leave.
____________________________
Endnotes:
[1]
Rollo, pp. 8-32.
[2]
Id., pp. 33-41. Fourteenth Division. Penned by Justice Romeo A. Brawner
(Division chair) and concurred in by Justices Elvi John S. Asuncion and
Juan Q. Enriquez Jr. (members).
[3]
Id., pp. 42-46.chanrobles virtual law library
[4]
Presided by Judge Edgar S. Surtida.chanrobles virtual law library
[5]
CA Decision, pp. 2-4; rollo, pp. 34-36.chanrobles virtual law library
[6]
“SEC. 3-A. 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 a portion
thereof
will be needed for the projects or works, such land or portion thereof
as necessary shall be acquired.chanrobles virtual law library
“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.chanrobles virtual law library
(b)
With respect to the acquired right-of-way easement over the land or
portion
thereof, not 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.chanrobles virtual law library
“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]
Entitled “An Act Revising the Charter of the National Power
Corporation.”chanrobles virtual law library
[8]
This case was deemed submitted for decision on May 9, 2003, upon this
Court’s
receipt of respondent’s Memorandum, signed by Atty. Michael G.
Jornales.
Petitioner’s Memorandum, signed by Solicitors Renan E. Ramos and Arleen
Q. Tadeo-Reyes of the Office of the Solicitor General (OSG), was
received
by this Court on April 30, 2003.
[9]
Petitioner’s Memorandum, p. 5; rollo, p. 123. Original in upper case.chanrobles virtual law library
[10]
Art. 614. Servitudes may also be established for the benefit of a
community, or of one or more persons to whom the encumbered estate does
not belong.
[11]
Records, p. 2.chanrobles virtual law library
[12]
Id., p. 20.chanrobles virtual law library
[13]
National Power Corporation v. Chiong, 404 SCRA 527, June 20, 2003;
Eslaban
Jr. v. Vda de Onorio, 360 SCRA 230, June 28, 2001; Camarines Norte
Electric
Cooperative, Inc. v. Court of Appeals, 345 SCRA 85, November 20, 2000
(citing
National Power Corporation v. Gutierrez, 193 SCRA 1, January 18, 1991;
National Power Corporation v. Court of Appeals, 325 Phil. 29, March 11,
1996).
[14]
136 Phil. 20, January 27, 1969.chanrobles virtual law library
[15]
Id., pp. 29-30, per Reyes, J.B.L., J.chanrobles virtual law library
[16]
Camarines Norte Electric Cooperative, Inc. v. Court of Appeals, supra.
[17]
Association of Small Landowners in the Philippines, Inc. v. Secretary
of
Agrarian Reform, 175 SCRA 343, July 14, 1989.
[18]
National Power Corporation v. Chiong, supra, per Quisumbing, J.;
Eslaban
Jr. v. Vda. de Onorio, supra.
[19]
Republic v. Ker and Company Limited, 383 SCRA 584, July, 2, 2002;
Republic
v. Court of Appeals, 154 SCRA 428, September 30, 1987.
[20]
Records, pp. 134-136.chanrobles virtual law library
[21]
Id., p. 137.chanrobles virtual law library
[22]
National Power Corporation v. Chiong, supra.
[23]
Export Processing Zone Authority v. Dulay, 149 SCRA 305, April 29, 1987.
[24]
Records, pp. 146-151.chanrobles virtual law library
[25]
National Power Corporation vs. CA, supra, (citing National Power
Corporation
v. Jocson, 206 SCRA 520, February 25, 1992).
[26]
Ibid. Manila Electric Company v. Pineda, 206 SCRA 196, February
13,
1992.
[27]
Records, p. 180.chanrobles virtual law library
[28]
Republic v. Intermediate Appellate Court, 185 SCRA 572, May 21, 1990.
[29]
National Power Corporation v. Chiong, supra; Republic v. Intermediate
Appellate
Court, supra.
[30]
Republic v. Intermediate Appellate Court, supra; Republic v. Santos,
141
SCRA 30, January 8, 1986. |