NATIONAL POWER CORPORATION, PLAINTIFF-APPELLANT, VS. SPOUSES PRIMITIVA GENER & MARCOS GUMASING, SPOUSES ESPIRIDION & LOURDES POLICARPIO, SPOUSES ALFREDO & GERTUDES MATEO, HEIRS …

National Power Corporation versus Spouses Gumasing

The Case

This is an appeal in an eminent domain case. The National Power Corporation sued several landowners in Bulacan to acquire portions of their land for a transmission line project. The dispute that reached the Supreme Court concerns one lot only, owned by Lourdes Pascual, and it raises two questions every expropriation lawyer must know: from what date is just compensation computed, and how much weight does the trial court give to the report of the commissioners it appointed? The case matters because it fixes the general rule on the reckoning point of just compensation and marks the narrow exception carved out in the Pidacan case.

Procedural History

The National Power Corporation filed its complaint for eminent domain before the Regional Trial Court of Malolos City, Bulacan, Branch 76. The trial court issued an order of condemnation declaring that the plaintiff had the lawful right to take the affected portions, and it directed the parties to submit a list of appraisers from which it would appoint three commissioners. The commissioners conducted ocular inspections and submitted a report on just compensation recommending a valuation of 100 pesos per square meter, reckoned from the filing of the complaint in 1997, with legal interest of six percent per annum.

The trial court rendered a partial judgment rejecting the commissioners' recommendation. It held that the valuation should be computed not from the filing of the complaint but from the date of the order of expropriation, treating the case as an exception in the manner of the Pidacan case. It fixed just compensation at 4,000 pesos per square meter, with legal interest of six percent per annum commencing on 7 September 2007. Both the plaintiff and the defendant Lourdes Pascual moved for reconsideration, and both motions were denied. The plaintiff then appealed to the Supreme Court under Rule 41.

Facts

To construct its Northwestern Luzon Project, the San Jose to San Manuel 500 kilovolt transmission line, the National Power Corporation filed a complaint for eminent domain on 17 December 1997 against numerous landowners in Norzagaray, San Rafael, San Jose del Monte, and San Miguel, all in Bulacan. Among the defendants was Lourdes Pascual, the registered owner of a lot covered by a transfer certificate of title, with a total area of 92,524 square meters, of which 16,500 square meters were sought to be expropriated.

The plaintiff deposited the assessed value of the affected portions for taxation purposes, amounting to 1,285,177 pesos and 70 centavos, with the Land Bank of the Philippines. On 27 July 1998, the trial court directed the sheriff to place the plaintiff in possession of the property covered by Pascual's title, and a writ of possession was issued against her. The plaintiff entered into compromise agreements with several other defendants, which the trial court approved in partial judgments and a partial decision that became final. The case against Pascual and a few others, however, had not yet passed the first stage.

Pascual conceded the public purpose of the expropriation but disputed the amount of just compensation, insisting that her property was a prime lot along the highway. The trial court eventually issued its order of expropriation on 7 September 2007, declaring that the plaintiff had the lawful right to take the affected portions upon payment of just compensation, and appointed commissioners to ascertain that compensation. The commissioners recommended 100 pesos per square meter, valued as of 1997. The trial court rejected this and fixed 4,000 pesos per square meter, reckoned from the date of the order of expropriation, prompting the appeal.

Issues

• Whether or not the trial court erred in ruling that the valuation of the property subject of the expropriation should be computed from the date the order of expropriation was issued on 7 September 2007.
• Whether or not the trial court erred in fixing the amount of just compensation at 4,000 pesos per square meter.

Applicable Provisions

Rule 67, Section 5 of the Rules of Court, on the appointment of commissioners, provides:

Upon the filing of the answer, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken.

This provision supplies the mechanism by which the commissioners ascertain just compensation, and it frames the question of how far their report binds the trial court.

Ruling

On the first issue, the Court ruled in favor of the plaintiff. The determination of just compensation must reckon from the date of taking or the filing of the complaint, whichever came first. The complaint against Pascual was filed on 17 December 1997, while the plaintiff took possession of the property on 27 July 1998. The reckoning point is therefore the filing of the complaint. The Court explained that expropriation has two stages: the first determines that the property is to be acquired for a public purpose, and the second determines just compensation. The order of expropriation dated 7 September 2007 was not appealed by the defendants, so it is no longer subject to review. The Pidacan case, which the trial court relied upon, is an exception to the general rule and does not apply here, because in this case the complaint was filed and possession was taken long before the order of expropriation was issued.

On the second issue, the Court held that the trial court erred in fixing just compensation at 4,000 pesos per square meter. The commissioners' report recommended 100 pesos per square meter, and the trial court disregarded it without adequate basis. The Court emphasized that the findings of the commissioners are merely advisory and not conclusive upon the court, but the court must still support its own valuation with evidence. The case was therefore remanded to the trial court for a proper determination of just compensation, reckoned from the filing of the complaint.

Doctrine

Just compensation in expropriation is computed from the date of taking or the filing of the complaint, whichever came first. This is the general rule, and the exception recognized in the Pidacan case applies only where the proceedings were delayed for an unreasonable period without fault on the part of the landowner. The two stages of expropriation must be kept distinct: the first determines the right to take for a public purpose, and the second determines the amount of compensation. The report of the commissioners appointed under Rule 67, Section 5 is merely advisory; the trial court may adopt or reject it, but it must base its own valuation on the evidence. An order of expropriation that is not appealed becomes final and is no longer subject to review.

Disposition

The Supreme Court granted the appeal, set aside the trial court's valuation reckoned from the order of expropriation, and remanded the case to the trial court for a proper determination of just compensation computed from the filing of the complaint.

Remember This

Memorize the rule: just compensation is reckoned from the date of taking or the filing of the complaint, whichever came first, and the Pidacan exception applies only where the delay is unreasonable and not attributable to the landowner. Examiners like to test this case on the reckoning point of just compensation and on the advisory nature of the commissioners' report.