Eminent domain; NPC's power lines

In National Power Corporation v. Manubay Agro-Industrial Development Corporation, a case involving an easement of a right-of-way over a parcel of land that would be traversed by high-powered transmission lines, just like the situation obtaining in Republic v. Libunao, the Supreme Court held that the nature and effect of the installation of power lines and the limitations on the use of the land for an indefinite period should be considered, as the owners of the properties would be deprived of the normal use of their properties. For this reason, the property owners are entitled to the payment of just compensation based on the full market value of the affected properties. The Court explained:

Granting arguendo that the National Power Corporation acquired over the landowner's property was purely an easement of a right of way, still, the view cannot be sustained 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. Republic v. PLDT held thus:

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.

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. Considering the nature and the effect of the installation of power lines, the limitations on the use of the land for an indefinite period would deprive the landowner 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.

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.

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." 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. This ruling has been repeatedly reiterated in subsequent cases and continues to be the controlling doctrine.

In its complaint for expropriation, the expropriator seeks authority to enter and take possession and control over the subject properties, together with the improvements, and to demolish all improvements existing thereon to commence and undertake the construction of its transmission line project.

In Republic v. Libunao, at the time of the filing of the complain for expropriation, the expropriator had already taken possession of the subject properties and had demolished the plants, trees and crops found in the subject properties as evidenced by checks payments for the damaged improvements. The overhead transmission lines which traverse the landowner's properties could be considered indefinite in nature. Moreover, the high-tension electric current passing through the transmission line would expose the landowners' lives and limbs to danger. Thus, the expropriation would in fact not be limited to an easement of right-of-way only.

In National Power Corporation v. Aguirre-Paderanga, the Supreme Court said:

[I]t cannot be gainsaid that NPC’s complaint merely involves a simple case of mere passage of transmission lines over Dilao, et al.’s property. Aside from the actual damage done to the property traversed by the transmission lines, the agricultural and economic activity normally undertaken on the entire property is unquestionably restricted and perpetually hampered as the environment is made dangerous to the occupant’s life and limb.

National Power Corporation's allegation that it had conducted relevant studies and initiated safety nets to guarantee that the transmission lines are technically safe and would cause least injury to the affected areas was not raised at all in the RTC as correctly argued by respondents Heirs of Domingo, thus, could no longer be considered on appeal. QUESTION: Does this mean that the expropriator can prove that the transmission lines are NOT dangerous to life and limb, thereby affecting the Court's decision as to whether payment for the entire parcel of land traversed should be made? This is NOT clear from the text of the case in Republic v. Libunao.

National Power Corporation's reliance on Section 3-A of R.A. 6395, as amended, is misplaced. While Section 3-A of R.A. 6395 indeed states 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 Supreme Court. It has been reiterated that the determination of "just compensation" in eminent domain cases is a judicial function. 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.

Another issue is interest. Should the National Power Corporation be ordered to pay interest to be reckoned from the date of taking until the full payment of the value of the subject properties? Section 10, Rule 67 of the Rules of Court answers this question.

SEC. 10. Rights of plaintiff after judgment and payment. - Upon payment by the plaintiff to the defendant of the compensation fixed by the judgment, with legal interest thereon from the taking of the possession of the property, or after tender to him of the amount so fixed and payment of the costs, the plaintiff shall have the right to enter upon the property expropriated and to appropriate it for the public use or purpose defined in the judgment, or to retain it should he have taken immediate possession thereof under the provision of section 2 hereof. x x x.

Clearly, landowners are entitled to the payment of legal interest on the compensation for the subject lands from the time of the taking of their possession up to the time that full payment is made by petitioner. In accordance with jurisprudence, the legal interest allowed in payment of just compensation for lands expropriated for public use is six percent (6%) per annum.

Finally, the Supreme Court found no merit in the National Power Corporation's claim that the amount of ₱5,196.58 which it deposited in a bank to be able to obtain the issuance of the writ of possession was already withdrawn by landowners. A perusal of the records does not show any evidence that they had withdrawn such amount. On the contrary, it appears that the amount withdrawn by the landowners corresponds to the consequential loss or damages to improvements suffered by them by reason of petitioner's installation of its transmission lines. (REPUBLIC OF THE PHILIPPINES represented by the NATIONAL POWER CORPORATION, Petitioner, vs. SPOUSES RUPERTO LIBUNAO and SONIA P. SANOPO & HEIRS OF BENITA DOMINGO, Respondents. G.R. No. 166553. July 30, 2009)