National Transmission Corporation vs. Oroville Development Corporation
**Facts**:
In Puerto, Cagayan de Oro City, two parcels of land originally owned by Alfredo Reyes and Grace Calingasan were erected with the Tagoloan-Pulangi 138 kV transmission line by the National Transmission Corporation (TransCo) in 1983. Both parcels were eventually sold to Oroville Development Corporation (Oroville) and were covered with their respective Transfer Certificate of Titles.
In 2006, negotiations broke down between TransCo and Oroville over TransCo’s offer to buy the properties for another transmission line project. Oroville sought to private reroute the proposed powerline and claimed they weren’t compensated for the existing one. TransCo refused and proceeded with their plans. Consequently, Oroville filed for an injunction and damages to halt the construction.
TransCo opposed Oroville’s claims and announced intentions to file expropriation proceedings. The trial ensued, and both parties agreed to survey the properties for just compensation assessment, leading to a motion to convert the case into expropriation and to establish a provisional deposit for the property value. The court ordered TransCo to deposit P7,647,200.00 and issued a writ of possession to TransCo upon compliance. Commissioners were appointed to determine just compensation leading to vastly diverse valuations.
The RTC ruled in favor of Oroville, setting just compensation based on the fair market value at the time of the complaint filing in 2007. TransCo appealed, but the Court of Appeals affirmed the RTC decision with modifications, compelling TransCo to pay the balance of the just compensation.
**Issues**:
a) Should just compensation for expropriated property be based on the value at the time of taking or the time of filing the expropriation complaint?
b) Is the imposition of a 12% legal interest justified?
**Court’s Decision**:
The Supreme Court granted TransCo’s petition, reversed and set aside the Court of Appeals decision, and established the just compensation at P78.65 per square meter based on the 1983 value when the property was first taken and imposed a 12% interest per annum from 1983 up to the payment date. It also awarded Oroville exemplary damages and attorney’s fees.
**Doctrines**:
– The computation of just compensation in expropriation proceedings must be based on the fair market value at the time of the property’s taking.
– Due process requires that expropriation proceedings be filed before property is taken for public use.
– Imposition of interest is to fully compensate the landowner for income lost due to the taking.
**Class Notes**:
– Just compensation is based on the market value at the first instance of taking.
– The concept of taking includes five elements: entry, period of stay, under warrant, devoted for public use, and deprivation of owner’s enjoyment.
– Due process requires proper and timely expropriation actions before taking property.
– Legal interest is applicable from the time of taking until compensation is paid to place the owner in as good a position as before the taking.
**Historical Background**:
This case presents a historically-rooted conflict between private property rights and the state’s power of eminent domain. The improper practice of “construct first, expropriate later” demonstrates a tension between government infrastructure development and preserving constitutionally-protected due process rights. The Supreme Court’s decision reiterates the legal processes required to make the exercise of eminent domain just, affirming a historical commitment to constitutional supremacy and rule of law in the Philippines.
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