Consti_NAPOCOR vs Villamorconsti_NAPOCOR vs Villamorconsti_NAPOCOR vs Villamor

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NAPOCOR vs VILLAMORG.R. No. 160080 June 19, 2009

FACTS: Petitioner (NPC) is a government-owned andcontrolled corporation created for the development ofhydro-electric generation power and the productionof power from any other source. NPC has granted thepower to exercise the right of eminent domain. Dueto its Leyte-Cebu Interconnection Project, NPCstransmission lines and towers have to pass parcels of

land owned by respondent. NPC filed a complaint foreminent domain of Villamors lands. The trial courtrendered a decision fixing the just compensation atP450 per square meter and to pay the defendant thefair market value of all the improvements inside theaffected lots.

Petitioner contends that under Section 3A of itscharter, RA 6395, where private property will betraversed by transmission lines, NPC shall onlyacquire an easement of right of way since thelandowner retains ownership of the property and candevote the land to farming and other agriculturalpurposes. Moreover, in the present case, since thelands are agricultural with no sign of commercialactivity, the amount of P450 per square meterawarded by the trial court as market value of theproperty is excessive and unreasonable.

ISSUE: Whether or not the fair market value awardedby the trial court may be reduced

HELD: No. Easement of right of way falls within thepurview of the power of eminent domain. In installingthe transmission lines which traverse respondentslands, a permanent limitation is imposed bypetitioner against the use of the lands for anindefinite period. This deprives respondent of the

normal use of the lands. In fact, not only are theaffected areas of the lands traversed by petitionerstransmission lines but a portion is used as the site ofits transmission tower. Because of the danger to lifeand limbs that may be caused beneath the high-tension live wires, the landowner will not be able touse the lands for farming or any agriculturalpurposes.

Respondent is entitled to just compensation or thejust and complete equivalent of the loss which theowner of the thing expropriated has to suffer byreason of the expropriation. Since the determinationof just compensation in expropriation proceedings isessentially a judicial function, the Court finds theamount of P450 per square meter to be just andreasonable compensation for the expropriated landsof respondent.


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Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 160080 June 19, 2009

NATIONAL POWER CORPORATION, Petitioner,vs.CARLOS VILLAMOR, Respondent.

D E C I S I O N

CARPIO, J.:

The Case

Before the Court is a petition for review1assailing theDecision2 dated 19 August 2002 andResolution3dated 28 August 2003 of the Court ofAppeals in CA-G.R. CV No. 61749.

The Facts

Petitioner National Power Corporation (NPC) is agovernment-owned and controlled corporationcreated and existing by virtue of Republic Act No.6395 (RA 6395),4 as amended by Presidential DecreeNo. 938.5 The main objective of NPC is thedevelopment of hydro-electric generation power andthe production of power from any other source. Itscharter grants to NPC the power, among others, toexercise the right of eminent domain.6

Due to its Leyte-Cebu Interconnection Project, NPCs230 KV Talisay-Compostela transmission lines andtowers have to pass parcels of land in the City ofDanao and Municipality of Carmen, both situated inthe province of Cebu. Two of these lands situated inCantipay, Carmen, Cebu are owned by respondentCarlos Villamor (Villamor). On these lands stand fruit-bearing trees, such as mango, coconut, avocado,soursop or guyabano, jackfruit, tamarind, breadfruit,sugar apple or atis, Spanish plum or siniguelas andbanana; and non-fruit bearing trees, such asmahogany and gemilina.

On 22 July 1996, NPC filed with the Regional Trial

Court, Branch 25, Danao City, Cebu (trial court), acomplaint for eminent domain of Villamors lands,docketed as Civil Case No. DNA-389. The lands wereidentified as Lot 3, 6191 Cad. 1046-D with a totalarea of 5,590.76 square meters and covered byTransfer Certificate of Title (TCT) No. 11970 and Lot4, 6191 Cad. 1046-D with a total area of 3,134.53square meters and covered by TCT No. 15-12045.7

NPC deposited with the Philippine National Bank,Fuenta Osmea branch, P23,115.70, representing theassessed value on the tax declaration of the lands.The trial court, in its Order dated 14 July

1997,8ordered the issuance of the corresponding writof possession in favor of NPC.

In the course of the proceedings, several partiesintervened, namely Teodolo Villamor, Teofilo Villamorand Nunila Abellar. They were allegedly the siblingsof respondent Villamor and the heirs of the latespouses Jose and Dolores Villamor. The intervenorsclaimed that NPC violated their legal rights innegotiating only with Villamor, who is just one of

seven heirs. Villamor was allegedly not authorized bythe other legal heirs to negotiate and receivepayment for the land sought to be expropriated.

The only issue between NPC and Villamor involvesthe reasonableness and adequacy of the justcompensation of the properties.

The trial court created a board of threecommissioners to determine the just compensationfor the lands and improvements. As approved by thetrial court, the following formed the board ofcommissioners: Sebastian C. Ocon, the Right-of-WaySupervisor of NPC; Nicolas Capoy, a collection agent

of the Bureau of Internal Revenue; and Fortunato C.Ligutom (Ligutom), the Municipal Assessor ofCarmen, Cebu. Ligutom was appointed as Chairman.

In the Joint Commissioners Report9 submitted to thetrial court, the board of commissioners recommendedthe amount of P433 per square meter as the fairmarket value of Villamors lands. The board basedthe formulation on the following: (1) the inspectionreport made by representatives of the court, (2) listof documentary exhibits, (3) opinion values of thedifferent agencies submitted to the ProvincialAppraisal Committee, (4) certification from thedifferent government agencies, and (5) the owners

proposal. The amount of P290 per square meter wasthe average value submitted by the (1) RegionalInvestors, Inc., (2) Fil-Asia Agent, (3) InternationalExchange Bank, (4) Rural Bank of Carmen, (5)Municipal Assessor of Carmen, and (6) the ownersproposal. Also, the proposed fair market valueof P350 per square meter was taken intoconsideration since the affected lands were identifiedas part of the industrial zone per RegionalDevelopment Council Resolution No. 38, series of199310 dated 17 September 1993. Likewise includedin the report were the respective values of the fruitbearing and non-fruit bearing trees planted on Lots 3and 4.

On 24 November 1997, Villamor filed his Comment tothe Commissioners Report.11 Villamor exhibited asimilar expropriation case, Civil Case No. DNA-426,filed by NPC against Francisco Villamor, involving alot, designated as Lot 2 of 6191, Cad. 1046-D,adjoining the lands of Villamor. In said case, the trialcourt rendered a decision fixing the justcompensation at P600 per square meter. However,upon motion of NPC, the amount was reducedtoP450.12Villamor prayed that the trial court considerthe same amount of just compensation as thatawarded to the landowner adjacent to his lands.Further, Villamor stated that a small portion of Lot 4
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consisting of an area of 15.23 square meters hadbeen separated from the remaining unaffectedportion of the total area and would not be used byVillamor for any productive purposes. Thus, Villamorprayed that such small portion be included as part ofthe total area that should be compensated by NPC.

On 22 December 1997, the trial court rendered adecision in favor of Villamor.13 The dispositive portionstates:

WHEREFORE, facts and law considered, the Courthereby renders judgment condemning propertysubject of expropriation in favor of plaintiff; declaringin favor of the defendants for plaintiff to pay the fairmarket value of the portions of the lots condemnedby this expropriation proceedings at P450.00 persquare meter and to pay to defendant CarlosVillamor, the following amounts:

1. P2,515,842.00 for the 5,590.76 sq. mts. asthe total affected area of Lot 3 of 6191, Cad.1046-D;

2. P1,410,538.50 for the 3,134.53 sq. mts. asthe total affected area of Lot 4 of 6191, Cad.1046-D;

or the total amount of Three Million Nine HundredTwenty-Six Thousand Three Hundred Eighty Pesosand 50/100 (P3,926,380.50);

Declaring that the fair market value of all theimprovements inside the affected lots to be in theamounts recommended in the Commissioners UnitBase Market Value of the Land and ImprovementsOwned by Carlos Villamor attached to theCommissioners Report and ordering the Plaintiff

National Power Corporation to pay to the defendantCarlos Villamor the following amounts:

1. P648, 932.00 for the total fair market valueof the improvements in Lot 3, of 6191, Cad.1046-D;

2. P372,968.00 for the total fair market valueof the improvements in Lot 4, of 6191, Cad.1046-D.

or the total amount of One Million Twenty OneThousand Nine Hundred Pesos (P1,021,900.00).

Ordering the amount of One Million Seven HundredEighty Three Thousand Five Hundred Six Pesos and50/100 (P1,783,506.50) representing justcompensation of Lot 4 and improvements describedin the Amended Complaint, to be divided among theHrs. of Jose and Dolores Villamor, or to be awardedsolely to defendant Carlos Villamor, whichever isfavored by the decision of the case pending litigationand under appeal with the Court of Appeals.

SO ORDERED.

Villamor filed a Motion for Reconsideration prayingthat the trial courts decision be reviewed by orderingNPC to likewise pay for the small isolated portion ofLot 4, consisting of 15.23 square meters.14

On 22 January 1998, the trial court, acting onVillamors motion, rendered a Resolution amendingits earlier decision.15The dispositive portion of theresolution states:

WHEREFORE, Motion for Reconsideration is given duecourse.

Let therefore the dispositive portion of the Decision inthe last paragraph be amended by adding thefollowing:

Ordering the plaintiff to pay the sum of P6,853.50 todefendant Carlos Villamor, same amount to beincluded in the deposit for valid claimants asproceeds of Lot 4, described in the complaint.

SO ORDERED.16

NPC filed an appeal with the Court of Appeals,docketed as CA-G.R. CV No. 61749.

The Ruling of the Court of Appeals

On 19 August 2002, the Court of Appeals dismissedthe petition and affirmed the decision of the trialcourt.17 The relevant portions of the decision state:

A perusal of the decision rendered by the trial courtwill show that before the trial court arrived at theamount ofP450.00 per square meter as justcompensation for the expropriated property, the

court a quo considered the following factors:

"The Committee on Appraisal through its Chairman,Mr. Fortunato Ligutom, submitted the CommissionersReport.

Based on the opinion values of the different agenciesnamely, Regional Investors, Inc., Fil Asia Agent,International Exchange Bank, Rural Bank of Carmen,Municipal Assessor of Carmen and Owners Proposal,the Committee in computing the average value persquare meter appraised P290.00 per square meter.Pursuant however to RDC Res. No. 38, s. 1993, thearea under expropriation is covered by the industrialzone to which the proposed market value of the landper square meter is P350.00 more or less.

Opinion values submitted by the different agencies,namely, the Municipal Agriculturist Officer of Sogod,Cebu of Carmen, Cebu, Mandaue City, and the newschedule of market values from Provincial Assessor ofCebu, for mango trees and coconut trees, theCommittee reached by average computation per treeat P22,756.00 for mango tree and P2,310 per coconuttree. The land on which the improvements grow isclassified as first class, it being a fertile land andtrees growing thereon produce plenty of fruits.
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x x x

The Commissioners Report did not consider the factthat in expropriating that portion of Lot 4 of 6191,Cad. 1046-D, a small dangling portion of the said lotconsisting of 15.23 square meters is left out andseparated from the remaining portion of said Lot 4.Considering that the 15.23 square meters cannotanymore be used by defendant Carlos Villamor forany productive purposes and the same will cease to

have commercial value to the defendant CarlosVillamor, said dangling area should also be paid byplaintiff NPC.

Moreover, appellee has shown to this Court that inother expropriation proceedings filed by appellant,involving lands which are likewise affected by thetransmission lines of NPCs Leyte-CebuInterconnection Project, National Power Corporationexecuted several Deeds of Absolute Sale with therespective owners of the lots expropriated where NPCagreed to pay the owners of the lands P450.00 persquare meter as just compensation. And twoCompromise Agreements were likewise entered intoby NPC with the respective owners of the lands whereNPC agreed to pay P420.00 as just compensation forthe lots expropriated. In all these cases, NationalPower Corporation did not invoke Sec. 3-A of theRevised Charter of the National Power Corporation.

WHEREFORE, in view of the foregoing, the instantappeal is hereby DISMISSED. The decision dated 22December 1997 rendered by the Regional Trial Courtof Danao City, Branch 25, is hereby AFFIRMED.

SO ORDERED.18

NPC filed a Motion for Reconsideration. This was

denied by the appellate court in a Resolution dated28 August 2003.19

Hence, this petition.

The Issue

The issue for our resolution is whether the fair marketvalue awarded by the trial court may be reducedtaking into account that petitioner is allegedlyacquiring only an easement of right of way and thatthe lands affected are classified as agricultural.

The Courts Ruling

The petition lacks merit.

Petitioner contends that under Section 3A of itscharter, RA 6395, where private property will betraversed by transmission lines, NPC shall onlyacquire an easement of right of way since thelandowner retains ownership of the property and candevote the land to farming and other agriculturalpurposes. Moreover, in the present case, since thelands are agricultural with no sign of commercialactivity, the amount of P450 per square meter

awarded by the trial court as market value of theproperty is excessive and unreasonable.

Respondent, on the other hand, maintains that theaffected portions of the lands are not only traversedby petitioners transmission lines but a portion is alsoused as the site of its transmission tower. He assertsthat petitioner cannot hide behind the provisions ofSection 3A and claim that it may only pay landownersan easement fee not exceeding 10% of the market

value of the property. Further, respondent points outthat other landowners similarly affected by the Leyte-Cebu Interconnection Project were compensated inthe amount of P420 to P450 per square meter asshown by deeds of absolute sale20 and compromiseagreements21 executed by petitioner in otherexpropriation cases.

Petitioners reliance on Section 3A22 of RA 6395 hasbeen struck down by this Court in a number ofcases.23Easement of right of way falls within thepurview of the power of eminent domain. In installingthe 230 KV Talisay-Compostela transmission lineswhich traverse respondents lands, a permanentlimitation is imposed by petitioner against the use ofthe lands for an indefinite period. This deprivesrespondent of the normal use of the lands. In fact, notonly are the affected areas of the lands traversed bypetitioners transmission lines but a portion is used asthe site of its transmission tower. Because of thedanger to life and limbs that may be caused beneaththe high-tension live wires, the landowner will not beable to use the lands for farming or any agriculturalpurposes.

Further, the trial and appellate courts fixed thevaluation of the lands at P450 per square meter. Thecourts considered not only the CommissionersReport and the opinion values of different agencies

submitted to the trial court but also the several deedsof absolute sale and compromise agreementsentered into by petitioner with landowners adjacentto respondents lands.

As shown in the records of the case, petitioner freelyand voluntarily entered into several deeds of absolutesale with other landowners affected by the Leyte-Cebu Interconnection Project for a P450 per squaremeter selling price from the years 1996 to 1997.These deeds were identified as: (1) a 3,659 squaremeter parcel of land (Lot No. 4387-A) situated inBarangay Tuburan Sur, Danao City, Cebu sold on 15September 1997 pursuant to Resolution No. 02-97

dated 1 March 1997 of the Danao City AppraisalCommittee;24 (2) a 1,607.13 square meter parcel ofland (Lot No. 3527-A) situated in Maslog, Danao Citysold on 10 November 1997 pursuant to ResolutionNo. 09-96, series of 1996 dated 28 August 1996 ofthe Danao City Appraisal Committee;25 (3) a 3,350square meter parcel of land (Lot No. 3525, Case 4,Cad. 681-D), 1,391.33 square meter land (Lot No.3813-A), 4,905.22 square meter land (Lot No. 3164-A), and 222.81 square meter land (Lot No. 3165-A),all situated in Maslog, Danao City, sold in 1996pursuant to Resolution No. 07-96 dated 23 October1996 of the Danao City Appraisal Committee;26 (4) a2,898.72 square meter parcel of land (Lot No. 6609-
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A) situated in Barangay Taboc, Danao City sold on 20January 1997 pursuant to Resolution No. 09-97 dated1 August 1997 of the Danao City AppraisalCommittee;27 and (5) a 4,354 square meter parcel ofland (Lot No. 4139-A) situated in Barangay TuburanSur, Danao City sold on 12 September 1997 pursuantto Resolution No. 08-97 dated 11 July 1997 of theDanao City Appraisal Committee.28

Moreover, petitioner entered into two compromise

agreements29

dated 26 May 1999, duly approved bythe trial court, which fixed the valuation of the landsat P420 per square meter based on the previousvaluation fixed and approved by petitioner and thetrial court on three other expropriation cases: (1)DNA-426 entitled "National Power Corporation v.Francisco Villamor, Sr."; (2) DNA-389 entitled"National Power Corporation v. Carlos Villamor"; and(3) DNA-373 entitled "National Power Corporation v.Francisco Camara, et al." These compromiseagreements consisted of an 11,700 square meterparcel of land situated in Baring and Cantipay,Carmen, Cebu and a 1,675.80 square meter landsituated in Cantipay, Carmen.

Thus, we see no reason to disturb the findings of thetrial and appellate courts. Indeed, respondent isentitled to just compensation or the just andcomplete equivalent of the loss which the owner ofthe thing expropriated has to suffer by reason of theexpropriation.30Since the determination of justcompensation in expropriation proceedings isessentially a judicial function, this Court finds theamount of P450 per square meter to be just andreasonable compensation for the expropriated landsof respondent.

WHEREFORE, we DENYthe petition.We AFFIRM the 19 August 2002 Decision and 28

August 2003 Resolution of the Court of Appeals in CA-G.R. CV No. 61749.

SO ORDERED.
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