Thursday, May 10, 2012

Expropriation by NAPOCOR; how to determine JUST COMPENSATION - G. R. No. 189127

G. R. No. 189127

"x x x.

The demand for payment of just compensation
has not prescribed

         Petitioner maintains that, in the event respondent spouses have not been adequately compensated for the entry into their property, their claim for just compensation would have already prescribed,[26] pursuant to Section 3 (i) of R.A. No. 6395, as amended by Presidential Decrees Nos. 380, 395, 758, 938, 1360 and 1443. This provision empowers the NAPOCOR to do as follows:

x x x [E]nter upon private property in the lawful performance or prosecution of its business or purposes, including the construction of the transmission lines thereon; Provided, that the owner of such private property shall be paid the just compensation therefor in accordance with the provisions hereinafter provided; Provided, further, that any action by any person claiming compensation and/or damages shall be filed within five (5) years after the right-of-way, transmission lines, substations, plants or other facilities shall have been established; Provided, finally, that after the said period no suit shall be brought to question the said right-of-way, transmission lines, substations, plants or other facilities nor the amounts of compensation and/or damages involved. (Emphasis supplied.)

          NAPOCOR’s reliance on this provision is misplaced.

          The right to recover just compensation is enshrined in no less than our Bill of Rights, which states in clear and categorical language that “[p]rivate property shall not be taken for public use without just compensation.”[27] This constitutional mandate cannot be defeated by statutory prescription.[28] Thus, we have ruled that the prescriptive period under Section 3 (i) of R.A. No. 6395 does not extend to an action to recover just compensation.[29] It would be a confiscatory act on the part of the government to take the property of respondent spouses for a public purpose and deprive them of their right to just compensation, solely because they failed to institute inverse condemnation proceedings within five years from the time the transmission lines were constructed. To begin with, it was not the duty of respondent spouses to demand for just compensation. Rather, it was the duty of NAPOCOR to institute eminent domain proceedings before occupying their property. In the normal course of events, before the expropriating power enters a private property, it must first file an action for eminent domain[30] and deposit with the authorized government depositary an amount equivalent to the assessed value of the property.[31] Due to its omission, however, respondents were constrained to file inverse condemnation proceedings to demand the payment of just compensation before the trial court. We therefore rule that NAPOCOR cannot invoke the statutory prescriptive period to defeat respondent spouses’ constitutional right to just compensation. 

NAPOCOR is liable to pay the full market value
of the affected property

NAPOCOR submits that it should pay for only ten percent (10%) of the fair market value of the landowners’ property because, under its Charter,[32] it is only authorized to acquire easements of right-of-way over agricultural lands.[33]

Petitioner’s arguments fail to convince.

We have ruled that “when petitioner takes private property to construct transmission lines, it is liable to pay the full market value upon proper determination by the courts.”[34]

In National Power Corporation v. Gutierrez,[35] the petitioner likewise argued that it should only be made to pay easement fees instead of the full market value of the land traversed by its transmission lines. In striking down its argument and ruling that the property owners were entitled to the full market value of the land in question, we ruled:

x x x While it is true that plaintiff [is] only after a right-of-way easement, it nevertheless perpetually deprives defendants of their proprietary rights as manifested by the imposition by the plaintiff upon defendants that below said transmission lines no plant higher than three (3) meters is allowed. Furthermore, because of the high-tension current conveyed through said transmission lines, danger to life and limbs that may be caused beneath said wires cannot altogether be discounted, and to cap it all, plaintiff only pays the fee to defendants once, while the latter shall continually pay the taxes due on said affected portion of their property.[36]

Similarly, in this case, while respondent spouses could still utilize the area beneath NAPOCOR’s transmission lines provided that the plants to be introduced underneath would not exceed three meters,[37] danger is posed to the lives and limbs of respondents’ farm workers, such that the property is no longer suitable for agricultural production.[38]Considering the nature and effect of the Davao-Manat 138 KV transmission lines, the limitation imposed by NAPOCOR perpetually deprives respondents of the ordinary use of their land.

Moreover, we have ruled that Section 3A of R.A. No. 6395, as amended, is not binding upon this Court.[39] “[T]he determination of just compensation in eminent domain cases is a judicial function and . . . any valuation for just compensation laid down in the statutes may serve only as a guiding principle or one of the factors in determining just compensation but it may not substitute the court's own judgment as to what amount should be awarded and how to arrive at such amount.”[40]

We therefore rule that NAPOCOR is liable to pay respondents the full market value of the affected property as determined by the court a quo.

The trial court did not err in awarding just compensation based on the Approved Schedule of Market Values for
Real Property for the Year 2000

         As its final argument, petitioner contends that the amount of just compensation fixed by the trial court is unjust, unlawful and contrary to existing jurisprudence, because just compensation in expropriation cases must be determined from the time of the filing of the complaint or the time of taking of the subject property, whichever came first.[41] It therefore posits that since the taking of the property happened in the 1970s, the trial court erred in fixing the amount of just compensation with reference to real property market values in the year 2000.[42]

         Petitioner’s contention holds no water.

         We have ruled in National Power Corporation v. Heirs of Macabangkit Sangkay[43] that the reckoning value of just compensation is that prevailing at the time of the filing of the inverse condemnation proceedings for the following reason:

[c]ompensation that is reckoned on the market value prevailing at the time either when NPC entered x x x would not be just, for it would compound the gross unfairness already caused to the owners by NPC's entering without the intention of formally expropriating the land x x x. NPC's entry denied elementary due process of law to the owners since then until the

owners commenced the inverse condemnation proceedings. The Court is more concerned with the necessity to prevent NPC from unjustly profiting from its deliberate acts of denying due process of law to the owners. As a measure of simple justice and ordinary fairness to them, therefore, reckoning just compensation on the value at the time the owners commenced these inverse condemnation proceedings is entirely warranted.

Indeed, respondent spouses would be deprived of their right to just compensation if the value of the property is pegged back to its value in the 1970s. To reiterate, NAPOCOR should have instituted eminent domain proceedings before it occupied respondent spouses’ property. Because it failed to comply with this duty, respondent spouses were constrained to file the instant Complaint for just compensation before the trial court. From the 1970s until the present, they were deprived of just compensation, while NAPOCOR continuously burdened their property with its transmission lines. This Court cannot allow petitioner to profit from its failure to comply with the mandate of the law. We therefore rule that, to adequately compensate respondent spouses from the decades of burden on their property, NAPOCOR should be made to pay the value of the property at the time of the filing of the instant Complaint when respondent spouses made a judicial demand for just compensation.
 x  x x."