HEIRS OF BENITA YANZON CIPRIANO, REPRESENTED BY MA. DOROTHY ARLENE CIPRIANO, PETITIONERS, VS. NATIONAL TRANSMISSION CORPORATION (TRANSCO), RESPONDENT.

Heirs of Benita Yanzon Cipriano versus National Transmission Corporation

The Case

This is a petition for review on certiorari brought by the heirs of Benita Yanzon Cipriano against the National Transmission Corporation, known as TransCo, the successor to the electrical transmission functions of the National Power Corporation under Republic Act Number 9136. The heirs sued for inverse condemnation, that is, a claim for just compensation after transmission lines were built over their land without any expropriation case being filed. The case matters because it fixes the reckoning point of just compensation when a taking is visible and long known to the owner, and because it confirms that the present value formula now supplies the remedy for the delay in payment.

Procedural History

The heirs filed their complaint for inverse condemnation or claim for just compensation with damages before the Regional Trial Court of Legazpi City, Albay. The complaint was later amended upon the court's order after TransCo admitted occupying a larger portion of one lot than the heirs had described. The trial court appointed three commissioners, who submitted separate appraisal reports. The trial court ruled for the heirs, fixed just compensation at 700 pesos per square meter for the entire area of 6,494 square meters, awarded attorney's fees and exemplary damages, and imposed interest. TransCo moved for reconsideration, which was partially granted as to the reckoning of interest. TransCo then appealed to the Court of Appeals.

The Court of Appeals reversed the trial court. Relying on National Transmission Corporation versus Oroville Development Corporation, it held that no special circumstances existed to justify reckoning just compensation from the filing of the complaint, and that the value must instead be reckoned from the date of actual taking. It set aside the trial court's decision and order and remanded the case for proper determination of just compensation, exemplary damages, and attorney's fees. The heirs then filed the present petition for review on certiorari under Rule 45 of the Rules of Court.

Facts

Sometime in 1977, the National Power Corporation constructed high-tension transmission lines in Villahermosa, Daraga, Albay. Two transmission lines traversed the heirs' parcels of land, Lot Number 15870-B and Lot Number 15939, without the owners' consent and without any expropriation proceedings being initiated. The Daraga-Putiao 69 kilovolt transmission lines crossed 2,776 square meters of Lot Number 15870-B and 2,009 square meters of Lot Number 15939. Later, in 1994, the Daraga-Bacman 230 kilovolt transmission lines crossed the eastern portion of Lot Number 15939, occupying 1,709 square meters.

TransCo claimed that the entry was based on a grant of right of way given by Trinidad Vda. de Yanzon, the predecessor-in-interest of the heirs, for a consideration of 1,074.71 pesos covering the easement fee, pole and guy occupancies, and damaged improvements. TransCo also argued that the claim was barred by prescription and laches, and that just compensation should be reckoned from the time of taking. Despite a series of correspondence, the heirs' claim for just compensation remained unpaid.

On July 21, 2015, the heirs filed their complaint for inverse condemnation before the Regional Trial Court of Legazpi City. During pre-trial, it was established that TransCo occupied Lot Number 15870-B, and that it was necessary to determine whether it had also entered Lot Number 15939. The complaint was amended after TransCo admitted occupying a larger portion of that lot than the heirs had described.

Issues

• Whether or not the Court of Appeals erred in holding that the exception in the Oroville case does not apply, and in ruling that just compensation must be computed based on the value at the time of taking.
• Whether or not the Court of Appeals erred in not awarding consequential damages.
• Whether or not the Court of Appeals erred in not awarding costs of suit.

Applicable Provisions

Section 4 of Rule 67 of the Rules of Court provides:

The just compensation to be paid shall be determined as of the date of the taking of the property or the filing of the complaint, whichever came first.

This provision supplies the general rule on the reckoning point of just compensation, which the Court applies here in preference to the equitable exception recognized in earlier cases.

Ruling

On the first issue, the Court held that the general rule applies, and that just compensation should be reckoned from the time of actual taking. The Court agreed with the Court of Appeals that the transmission lines were visible, such that the heirs could not have been unaware of their construction. The Court distinguished the earlier rulings in Macabangkit Sangkay and Saludares, explaining that those cases rested on special circumstances, such as stealth in the construction of underground tunnels, or an outright refusal to acknowledge the claim, which are absent here. The Court quoted Oroville with approval:

The rulings in Macabangkit Sangkay and Saludares are more in consonance with the rules of equity than with the Rules of Court; specifically Rule 67 on expropriation. Indeed, the practice of construct first, expropriate later is reprehensible and must not be countenanced. The Court, however, must not lose sight of Section 4, Rule 67 which mandates that just compensation must be determined as of the date of the taking of the property or the filing of the complaint, whichever came first.

The Court also relied on National Transmission Corporation versus Religious of the Virgin Mary, quoting its observation that the very nature of transmission lines, running great distances and supported by towers extending several stories in height, precludes the expropriator's stealth and the owner's utter cluelessness. The Court stressed, however, that applying the general rule does not condone taking private property without first filing an expropriation case, and reminded TransCo that the practice of construct first, expropriate later must be put to a stop.

To address the injustice caused by non-payment over the years, the Court applied the present value formula for determining just compensation, as enunciated in Republic versus Spouses Nocom and applied in Heirs of Jose Mariano versus City of Naga. The Court explained that had the property owner been promptly paid, the amount could have earned interest, and non-payment deprived the owner of both the principal and its prospective fruits. The Court quoted the explanation of present value:

If the parties in an expropriation case would have perfect foresight, they would have known the amount of fair market value at the time of taking. If this amount of money was deposited in a bank pending expropriation proceedings, by the time proceedings are over, the property owner would be able to withdraw the principal and the interest earnings it has accumulated over the time of the proceedings.

On the second and third issues, the Court held that the award of consequential damages and costs of suit must await the proper determination of just compensation on remand, consistent with the Court of Appeals' order returning the case to the trial court.

Doctrine

Just compensation is reckoned from the date of actual taking or the filing of the complaint, whichever came first, as mandated by Section 4 of Rule 67. The equitable exception, which reckons compensation from the filing of the inverse condemnation suit, applies only where special circumstances exist, such as stealth in the taking or an outright refusal to acknowledge the claim. Where the taking is visible, as with high-tension transmission lines supported by tall towers, the owner cannot claim ignorance, and the general rule governs. To remedy the injustice of delayed payment, the present value formula is applied, so that the compensation reflects not only the value at the time of taking but also the opportunity loss suffered by the owner.

Disposition

The Court partially granted the petition, affirming that just compensation is reckoned from the time of actual taking but applying the present value formula, and remanding the case to the trial court for the proper determination of just compensation, exemplary damages, attorney's fees, and costs of suit.

Remember This

Memorize this line: just compensation is reckoned from the date of actual taking or the filing of the complaint, whichever came first, and the equitable exception applies only upon special circumstances such as stealth or outright refusal to pay. Examiners use this case to test the reckoning point of just compensation in inverse condemnation and the application of the present value formula.