NATIONAL GRID CORPORATION OF THE PHILIPPINES, PLAINTIFF-APPELLANT, VS. DOMINGO HIDALGO, DEFENDANT-APPELLEE.
DIMAAMPAO, J.:
This principium finds application in the instant Appeal.
Repugned in this Appeal is the Order[2] dated 6 May 2013 of the Regional Trial Court, Fifth Judicial Region, Naga City, Branch 27, in Civil Case No. RTC 2011-0140, which declared defendant-appellee Domingo Hidalgo entitled to just compen-sation in the amount of P1,500.00 per square meter or a total amount of P1,518,000.00 for his property impinged by plaintiff-appellant’s transmission line project. The fallo of the Order reads:
“WHEREFORE, the motion for reconsideration is PARTLY GRANTED. The Dispositive Portion of the assailed Decision dated March 7, 2013 is hereby modified as follows:
(1) Upholding plaintiff’s right, NGCP, to exercise the power of eminent domain over the subject property for public use;
(2) Declaring the subject property denominated as Lot/Survey No. 3429-A covered by Field Appraisal and Assessment Sheet (FAAS) No. 97-006-00009 with an area of 1,012 square meters as condemned or expropriated, for the price of Pesos: One Thousand Five Hundred per square meter, or the total amount of Pesos: One Million Five Hundred Eighteen Thousand (P1,518,000.00) with six (6%) percent interest per annum, from the time of taking – 18 September 2012. until fully paid;
(3) Ordering the plaintiff NGCP to pay commissioners fee of Pesos: Five Thousand (P5,000.00) each to Asst. City Prosecutor Apollo M. Abonal, Alejandro V. Arabia, Jr., and Joey E. Teope.
SO ORDERED.”[3]
The mise en scène of the case unfurls as follows:
Defendant-appellee Domingo Hidalgo (Domingo) is the declared owner of a parcel of land with a total area of 1,241 sq. m. located in Capucnasan, Milaor, Camarines Sur described as Lot/Survey No. 3429-A.[4] For the construction and maintenance of Luzon Substation Expansion Project 1, Naga Substation, plaintiff-appellant National Grid Corporation of the Philippines (National Grid) sought the acquisition of a portion of the said realty consisting of 1,012 sq. m.
National Grid is a private corporation which was granted a franchise to operate, manage and maintain the present nationwide transmission system of the Republic of the Philippines pursuant to Republic Act (R.A.) No. 9511. Under Section 4 of the same law, National Grid was granted the power of eminent domain, subject to the requirements of the Constitution and existing laws.
Eventually, a Complaint for Expropriation[5] was lodged by National Grid averring, inter alia, that due to the increasing demand of electricity, there was a need to enhance the reliability and stability of power supply to the Luzon Grid, thereby necessitating the expansion of the existing Naga City sub-station. The said expansion would cause the realignment of the Naga City-Labo, Camarines Norte 230 KV Transmission Line. Thus, it must immediately construct additional transmission towers to be able to transmit power to the distributor of electricity, for the use and benefit of the public. This undertaking would be known as the Luzon Substation Expansion Project 1, Naga Substation.
Domingo interposed no objection to the right of National Grid to expropriate his property for public use. Thence, the parties agreed on a sole issue, i.e., the determination of just compensation.
As it happened, the court a quo issued the corresponding Writ of Possession[6] after the amount of P44,836.00 was deposited[7] representing the full BIR zonal value of the property sought to be expropriated, plus the proffered value of the improvements. Accordingly, the court a quo appointed Commissioners to ascertain the fair market value of the property in question, namely: Prosecutor Apollo Abonal, as Chairman; Joey Teope; nominee of National Grid; and Alejandro Arabia, Jr., Domingo’s nominee, as members.8 Ensuingly, the appointed Commissioners submitted their Valuation Committee Report,[9] with the following recom-mendation—
“The Fair Market Value
of Lot 3429-A-1, the Subject Property
to be Expropriated
Using the foregoing findings, the Valuation Committee hereby arrives at the Fair Market Value of the subject expropriated lot, denominated as Lot 3429-A-1 with an area of ONE THOUSAND TWELVE SQUARE METERS (1,012 sq. ms.), as follows:ONE MILLION SIX HUNDRED EIGHTY NINE THOUSAND SEVEN HUNDRED FIFTY PESOS (P1,689,750.00).
x x x x x x
From the foregoing, therefore, the Valuation Committee respectfully concludes and hereby recommends to the Honorable Court that:
1. The property to be expropriated, which is denominated as Lot 3429-A-1, with an area of 1,012 square meters, is actually used and entirety suited for RESIDENTIAL.
2. The Fair Market Value of said RESIDENTIAL LOT, denominated as Lot 3429-A-1, subject of expropriation is ONE MILLION SIX HUNDRED EIGHTY NINE THOUSAND SEVEN HUDRED FIFTY PESOS (1,689,750.00) inclusive of the cost of the disturbance to the residual or remaining two (2) separate, nonadjacent, triangular or irregularly shaped properties, denominated as Lot 3429-A-2 and Lot 3429-A-3.”[10] (Emphases supplied)
Ploughing through the evidence on record, the court a quo rendered the impugned judgment upholding the public purpose for the expropriation of the subject property. Anent the issue of just compensation, the court a quo partly adopted the recommendations set forth in the Valuation Committee Report and awarded a just compensation in the amount of P1,500.00 per sq. m. or a total of P1,518,000. 00 with twelve percent (12%) interest instead of P1,689,750.00 as recommended by the Commissioners. The court a quo pro-nounced the amount to be just, equitable, fair and reasonable, ratiocinating in this wise—
“After carefully considering the Valuation Committee Report, specifically the factors that affect the price of the subject land in fixing the just compensation and the reasonable indices in arriving at the fair market value, this Court partly adopts the commissioners(‘) valuation contained in the report pegged at Pesos: One Thousand Five Hundred (P1,500.00) per square meter. The comprehensive report is well supported by evidence. The Court is convinced, by preponderance of evidence, that the above-mentioned valuation is correct. But the Court rejects the inclusion of the value of the two adjacent lots for the reason that these lots are not included in the property subject of this case and expropriation shall in no way affect the use of the said two lots. Hence, the two lots consisting of 229 square meters shall not be disturbed, and not included in this case.
WHEREFORE, Decision is hereby rendered as follows:
(1) Upholding plaintiff’s right, NGCP, to exercise the power of eminent domain over the subject property for public use;
(2) Declaring the subject property denominated as Lot/Survey No. 3429-A covered by Field Appraisal and Assessment Sheet (FAAS) No. 97-006-00009 with an area of 1,012 square meters as condemned or expropriated, for the price of Pesos: One Thousand Five Hundred per square meter, or the total amount of Pesos: One Million Five Hundred Eighteen Thousand (P1,518,000.00) with 12% interest per annum, from the time of taking – 18 September 2012, (Sheriff’s final report, Record, p(p). 92-93) until fully paid;
(3) Ordering the plaintiff NGCP to pay commissioners fee of Pesos: Five Thousand (P5,000.00) each to Asst. City Prosecutor Apollo M. Abonal, Alejandro V. Arabia, Jr., and Joey E. Teope.
SO ORDERED.”[11] (Emphasis Ours)
Nonplussed, National Grid moved for reconsideration. In the impugned Order, the court a quo partly modified its previous Order by reducing the legal interest from 12% to six percent (6%), explicating—
“Anent the imposition of interest of twelve percent (12%) per annum, the contention of plaintiff that it should be fixed at 6% per annum reckoned from the time of taking of property is meritorious. The case of National Power Corporation vs(.) Heirs of Macabangkit Sangkay which was cited by defendant does not, in anyway discuss the reason of imposing 12% per annum as interest rate. The issue in said case is whether the court acted with grave abuse of discretion when it ordered the execution of its Decision and Supplemental Decision pending appeal. What applies is the ruling in the case of National Power Corp. vs(.) Angas, where the Supreme Court held that the interest due the property owner is at the rate of 6% per annum, prescribed in Art. 2209 of the Civil Code, and not 12% per annum under Central Bank Circular No. 416, because the latter applies to loans or forbearance of money, goods or credits, or judgments involving such loans or forbearance of money, goods or credits. The kind of interest involved here is by way of damages, hence, Art. 2209 of the Civil Code applies.
x x x x x x
WHEREFORE, the motion for reconsideration is PARTLY GRANTED. The Dispositive Portion of the assailed Decision dated March 7, 2013 is hereby modified as follows:1) Upholding plaintiff’s right, NGCP, to exercise the power of eminent domain over the subject property for public use;
2) Declaring the subject property denominated as Lot/Survey No. 3-429-A covered by Field Appraisal and Assessment Sheet (FAAS) No. 97-006-00009 with an area of 1,012 square meters as condemned or expropriated, for the price of Pesos: One Thousand Five Hundred per square meter, or the total amount of Pesos: One Million Five Hundred Eighteen Thousand (P1,518,000.00) with six (6%) percent interest per annum, from the time of taking – 18 September 2012, until fully paid;
3) Ordering the plaintiff NGCP to pay commissioners fee of Pesos: Five Thousand (P5,000.00) each to Asst. City Prosecutor Apollo M. Abonal, Alejandro V. Arabia, Jr., and Joey E. Teope.
SO ORDERED.”[12] (Italics Ours)
Expostulating against the adverse judgment, National Grid (now, appellant) now comes to Us ascribing a solitary error—
THE COURT A QUO ERRED WHEN IT FIXED THE VALUATION OF THE AFFECTED PORTION OF THE SUBJECT PROPERTY AT ONE THOUSAND FIVE HUNDRED PESOS (PHP1,500.00) PER SQUARE METER WITHOUT FACTUAL OR LEGAL BASES.
The Appeal is barren of merit.
First. Appellant intransigently asserts that the realty subject of expropriation is residential and agricultural, and not purely residential as erroneously held by the court a quo.
Appellant’s assertion does not hold sway.
Quite telling is the Letter dated 5 August 2011 wherein appellant itself, through one Hernando Santos, Division Head, South Luzon Projects-Planning and Engineering, admitted that the land sought to be expropriated is a residential property, viz—
“Domingo Hidalgo/SLPE-11-594
05 August 2011MR. DOMINGO HIDALGO
Del Rosario, Milaor, Camarines Sur
Subject: Letter Offer for the Acquisition of Land and Land Rights Re: LUZON SUBSTATION EXPANSION PROJECT (NAGA SUBSTATION) Sir:
This is to inform you that the National Grid Corporation of the Philippines (NGCP) has been awarded the national franchise to operate and maintain the transmission assets and facilities of the government-owned and controlled National Transmission Corporation (TransCo), by virtue of Republic Act 9511, otherwise known as “An Act Granting the National Grid Corporation of the Philippines a Franchise to Engage in the Business of Conveying or Transmitting Electricity through High Voltage Backbone System of Interconnected Transmission Lines, Substations and Related Facilities, and for other purposes.’
Currently NGCP is undertaking expansion activities within the existing Naga Substation, which aims to enhance the reliability and stability of power supply of the Luzon Grid.
Your residential lot as per actual use designated as Lot/ Survey No. 3429-A, situated at Capucnasan, Milaor, Camarines Sur covered by Tax Declaration/ARP No. 97-006-00009, is among those properties to be affected by the realignment of the Naga – Labo Transmission Line for said expansion project and shall be paid just compensation based on the approved valuation of land. Accordingly, we are pleased to offer you the total compensation for the acquisition of your property, computed as follows:
Total Compensation =Lot Area x Approved Land Valuation = 1,012 sq. m. x P1,000.00/sq.m. = P1,012,000.00 x x x x x x
Very truly yours,(Sgd)
Hernando B. Santos
Division Head
South Luzon Projects – Planning & Engineering”[13] (Emphasis Ours)
In actual fact, the Commissioners conducted an ocular inspection on the premises as well as the adjoining lots and found that the disputed property is predominantly used for residential purposes—
“Land Data.
The subject lot of this appraisal engagement is designated as Lot/Survey No. 3429-A, covered only by Tax Declaration No. 97-06-00907, revised on 02/28/12 (formerly TD#97-006-00009), & PIN NO. 026-21-006-01-008 (as NO TCT been issued yet for this lot), classified therein as follows: 941 sq.m. – Banana Land & 400 sq.m. RESIDENTIAL LAND, or a total area of 1,241 square meters, although per ocular inspection of subject lot and the adjoining lots in the vicinity reveals an actual and predominant use as residential.”[14] (Emphasis supplied)
Second. The valuation of P1,500.00 per sq. m. was determined before the taking of the realty, and not eight months after the filing of the Complaint as claimed by appellant. The Valuation Committee Report speaks volumes—
As to the Fair Market Value
The Committee hereby adopts the findings of Mr. Arabia in his Appraisal Report, dated August 28, 2012. His findings are based on a sound theory of valuation, which is the Market Data Approach or “Sales Comparison Approach”.
In coming up with a fair market value of the property, Mr. Arabia correlated the relevant location of the property and the highest and best use of the property with the prevailing market data within the vicinity. He also considered the appraisals or valuation of several practicing and licensed real estate appraiser(s) and brokers. Finally, his findings are supported by evidence.
The findings, which the Valuation Committee hereby adopts, are the following, to wit:
1. The Fair Market Value of the entire Lot 3429-A BEFORE THE TAKING at ONE THOUSAND FIVE HUNDRED PESOS PER SQUARE METER (P1,500.00/SQ.M.) is ONE MILLION EIGHT HUNDRED SIXTY-ONE THOUSAND FIVE HUNDRED PESOS (P1,861.500.00).
x x x x x x”[15]
Third. Appellant bemoans that the Valuation Committee Report is devoid of factual and legal bases. Likewise, the amount of P1,500 per sq. m. fixed by the court a quo as just compensation for the realty in dispute is grossly excessive and exorbitant. It claims that the fair market value of the property of Domingo (now, appellee) is only P400.00 per sq. m. for residential and P20.00 per sq. m. for agricultural.
Appellant’s thesis lacks legal mooring.
The court a quo’s disquisition, in partly adopting the findings and recommendations contained in the Valuation Committee Report with respect to the nature and character of the land and the fair value thereof, finds a textual hook in Section 8, Rule 67 of the 1997 Rules of Civil Procedure. It explicitly provides that the trial court has the discretion to act upon the commissioners’ report in any of the following ways: (1) it may accept the same and render judgment therewith; or (2) for cause shown, it may: (a) recommit the report to the commissioners for further report of facts; or (b) set aside the report and appoint a new commissioners; or (c) accept the report in part and reject it in part; and it may make such order or render such judgment as shall secure to the plaintiff the property essential to the exercise of his right of expropriation, and to the defendant just compensation for the property taken.
Taking Our bearings from the foregoing procedural edict, We hold and so rule that the court a quo unerringly adopted the evaluation and recommendation of the Commissioners. The trial court sitting as an expropriation court may, after hearing, accept the commissioner’s report and render judgment in accordance therewith.[16] In the case at bench, the records evince that the Valuation Committee Report was based on uncontroverted facts supported by documentary evidence. Ergo, the court a quo committed no reversible error in adopting the same.
In précis, We discern no cogent reason to deviate from the factual findings of the court a quo in ascertaining an equitable and fair amount of just compensation as it is congruous with applicable law and settled jurisprudence.
WHEREFORE, the Appeal is hereby DENIED. The Order dated 6 May 2013 of the Regional Trial Court, Fifth Judicial Region, Naga City, Branch 27, in Civil Case No. RTC 2011-0140 is AFFIRMED.
SO ORDERED.
Ybañez, and Manahan, JJ., concur.
[1] Republic v. Lim, 462 SCRA 265, 271 (29 June 2005). Italics Ours.
[2] Original Records, pp. 120-123.
[3] Original Records, p. 123.
[4] Id., pp. 75; See Valuation Committee Report, pp. 72-85.
[5] Original Records, pp. 14-20.
[6] Id., p. 42.
[7] Id., pp. 32, 34-36.
[8] Id., pp. 65-66.
[9] Id., pp. 72-85.
[10] Original Records, pp. 81 and 84.
[11] Original Records, pp. 13.
[12] Original Records, p. 122-123.
[13] Original Records, p. 27.
[14] See RTC Decision, Id., p. 11.
[15] Original Records, p. 81.
[16] See Republic v. Heirs of Spouses Pedro Bautista and Valentina Malabanan, 689 SCRA 349, 362-363 (8 January 2013).