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Pol - NPC vs. Bagui

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SECOND DIVISION

[G.R. NO. 164964 : October 17, 2008]

NATIONAL POWER CORPORATION, Petitioners, v. MARIA BAGUI, VEDASTO


BAGUI, FELICIANA BAGUI, EPIFANIA BAGUI, HEIRS OF MARGARITO
MACARAIG and WIFE, represented by Dolores Macaraig, NIEVES VALDEZ
and JAIME MARQUEZ, Respondents.

DECISION

TINGA, J.:

Subject of this Petition for Review1 is the Decision2 dated 16 August 2004 of the
Court of Appeals in CA-G.R. CV No. 72399, which affirmed in toto the 30 May 2001
Decision3 of the Regional Trial Court (RTC) of Batangas City, Branch 84 in the
expropriation case filed by the National Power Corporation (NPC).

Petitioner NPC is a government-owned and controlled corporation created and


existing by virtue of Republic Act (R.A.) No. 6395 for the purpose of undertaking the
development of hydroelectric generation of power and production of electricity from
any and all sources.4 Respondents are the owners of parcels of land situated in the
province of Batangas, particularly described below, to wit:

LOT/BLOCK NO. LOCATION OF TOTAL AREA


PROPERTY AREA AFFECTED
(in sq.m.) (in sq.m)
Maria, Vedasto, Feliciana and 4413-G-1 pt. Mahabang Parang 4275 427
Efipania Bagui (Baguis)
Heirs of Margarito Macaraig and 2110 Banaba San 8,0986 680
wife, represented by Dolores Pascual
Macaraig (Macaraig)
Nieves Valdez (Valdez) 2263 pt. (Lot 061) Banaba San 4507 256.75
Pascual
Jaime Marquez (Marquez) Lot 1-B-9-B Banaba San 3368 336
Pascual

Culled from the records are the following established facts:

On 10 March 2000, NPC filed a complaint for eminent domain against respondents
before the RTC.9 NPC sought to acquire an easement of right-of-way over portions of
the subject lots, including the properties of Adriana Belegal (Belegal), Spouses
Ernesto and Necitas Bool (Spouses Bool) and Spouses Geronimo and Teresita David
(Spouses David).10

The total area sought to be expropriated by NPC for the purpose of constructing and
maintaining its San Pascual Cogeneration Associated Transmission Line Project
covered 9,528 square meters. NPC expressed willingness to deposit the total amount
of P33,645.31 representing the assessed values for taxation purposes of the affected
portions of the subject lots.11

Belegal and Spouses David filed their answer12 wherein they contended that the
amount needed to be deposited before it could take or enter their properties should
be at least fifteen percent (15%) of the fair market value of the properties based on
the current tax declarations.13 Spouses Bool and respondents Baguis, whose
properties were substantially affected by the easement of right-of-way, were
represented by the Public Attorney's Office. They sought payment of just
compensation equivalent to the full market value of the properties sought to be
expropriated in their entirety.14

Upon deposit of the amount representing the provisional value of the subject
properties and service upon respondents of the Notice to Take Possession,15 NPC
filed an urgent ex-parte motion for the issuance of a writ of
possession.16 Respondents filed their opposition.17 In an Order dated 18 August
2000,18 the trial court directed both parties to submit the valuation of the
improvements on their properties, and specifically NPC alone to make a valuation of
the existing house of the Baguis.

Subsequently, in the order19 dated 1 September 2000, the trial court appointed a set
of three commissioners to determine the fair market value of the lands of Belegal,
Spouses Bool, Spouses David and respondents Baguis, and a second set of three
commissioners to ascertain the fair market value of the lands20 of respondents
Macaraig, Valdez and Marquez.21

The first set of commissioners submitted its initial Report22 recommending the
amounts of P1,162.00, P938.78, and P1,654.40 per square meter for the properties
of Belegal, Spouses David and respondents Baguis,23 respectively. The Report was
rectified24 and a new valuation was made only for the properties of Belegal and
Spouses David at P1,134.22 per square meter and P1,000.65 per square meter,
respectively. The valuation for respondents Baguis remained the same.25 The second
set of commissioners submitted its Appraisal Report setting the fair market value of
the lands of respondents Macaraig, Marquez and Valdez at P250.00, P350.00
and P3,000.00 per square meter, respectively.

In accordance with the trial court's orders26 directing the issuance of writs of
possession for the subject properties, on 19 December 2000, the clerk of court
issued a writ of possession in favor of NPC.27

Finding the appraisal valuations of the two sets of commissioners as reasonable and
fair, the trial court, in its Decision dated 30 May 2001, ordered NPC to pay
compensation to respondents at the stated fair market values per square meter of
their respective lots.28

NPC appealed the decision of the trial court to the Court of Appeals.29

During the pendency of the appeal, partial compromise agreements were entered
into by NPC and respondents Belegal, Spouses David and Spouses Bool.30 The
appellate court admitted these agreements, thus making the judgment final and
executory between them.31 Respondent Marquez also entered into an amicable
settlement with NPC.32
On 16 August 2004, the appellate court promulgated its decision affirming the trial
court's judgment in favor of respondents Baguis, Macaraig, Valdez and Marquez
against NPC.33 The decision is now before this Court.

Through the Office of the Solicitor General,34 NPC makes a three-pronged challenge
to the valuations submitted by the commissioners in determining the amount of just
compensation. First, it argues that the computation of just compensation should
have been based on Section 3-A(b) of R.A. No. 6395, as amended by Presidential
Decree No. 938,35 the governing law on eminent domain complaints for easement of
right-of-way. Second, it impugns the rectified report of the first set of
commissioners in giving weight to "Opinion Value." Third, it avers that the appraisal
report of the second set of commissioners relied on hearsay evidence, consisting of
the opinion of the barangay chairman and the estimate of the provincial assessor.

In sum, the NPC faults the appellate court in upholding the trial court's decision,
which, according to it, is based on speculative and baseless recommendations of the
commissioners.36

In their comment,37 respondents counter that Section 3-A(b) of R.A. No. 6395, as
amended, does not apply. They contend that the use of the lands to be expropriated
is not limited to "easement of right-of-way" purposes, stressing that the nature and
effect of the construction and maintenance of the San Pascual Cogeneration
Associated Transmission Line Project have effectively deprived them of the ordinary
use of their lands. On that basis, they justify the recommended valuation of the
property, which also took into account the nature and consequential damages
incurred by the affected properties.38

The instant petition essentially brings forth two issues, one of law and the other of
fact. The legal issue is whether NPC should be made to pay just compensation in
terms of the full market value of the properties traversed by the transmission lines.
This matter has long been decided by this Court in a plethora of cases and must now
be laid to rest.

In National Power Corporation v. Manubay Agro-Industrial Development


Corporation39 involving an easement of a right-of-way over a parcel of land that
would be traversed by high-powered transmission lines, the Court held that the
nature and effect of the installation of power lines and the limitations on the use of
the land for an indefinite period would deprive the owners of the normal use of their
properties. Thus, just compensation must be based on the full market value of the
affected properties.40 This ruling was reiterated in NPC v. Bongbong41 which also
pertained to the acquisition of a simple right-of-way easement for the passage of
overhead transmission lines.

In the case of NPC v. Purefoods,42 NPC had to acquire an easement of right-of-way


over certain parcels of land in Bulacan for the construction and maintenance of the
San Jose-San Manuel 500 KV Transmission Line Project. The Court,
invoking National Power Corporation v. Aguirre-Paderanga,43 also sustained the
affected property owner's right to recover consequential damages in addition to the
market value, in cases where only a part of a certain property is expropriated.44

Moreover, Section 3A - (b) of R.A. No. 6395, as amended, is not binding on the
Court. It has been repeatedly emphasized that the determination of just
compensation in eminent domain cases is a judicial function45 and that any valuation
for just compensation laid down in the statutes may serve only as a guiding principle
or one of the factors in determining just compensation but it may not substitute the
court's own judgment as to what amount should be awarded and how to arrive at
such amount.46

On the other hand, the factual issue is whether the determinations of just
compensation made by the trial court, as affirmed by the Court of Appeals, are
correct.

As a general rule, the Court will not disturb the factual findings of the trial and
appellate courts unless they are grounded entirely on speculations, surmises or
conjectures,47 among others.48 The aforecited exception partly obtains in this case.

Challenged by the NPC are the reports submitted by two separate sets of
commissioners. The first set of commissioners' report deals with the property of the
Baguis while the second set of commissioners' report covers the properties of
respondents Macaraig and Valdez.

The trial court found the appraisal valuations reasonable and fair. The appellate
court saw no basis to disturb these valuations, thus:

As can be gleaned from the Records, the lower court and the groups of
Commissioners did not abuse their authority in evaluating the evidence submitted to
them nor misappreciate the clear preponderance of evidence. The amount fixed by
the court a quo is not grossly exorbitant. Be it reminded that the Commissioners are
considered as experts, with general knowledge of the appraisal of land and the
prevailing prices of land in the vicinity of the land in question so that their opinion on
the valuation of the property cannot be lightly brushed aside. The prevailing market
value of the land in the present case were clearly shown, hence, We find no ground
to depart from the lower court's findings. (citations omitted)49

Just compensation is defined as the full and fair equivalent of the property taken
from its owner by the expropriator. In this case, this simply means the property's
fair market value at the time of the filing of the complaint, or that sum of money
which a person desirous but not compelled to buy, and an owner willing but not
compelled to sell, would agree on as price to be given and received therefor. The
measure is the not the taker's gain, but the owner's loss.50

While market value may be one of the bases of determining just compensation, the
same cannot be arbitrarily arrived at without considering the factors to be
appreciated in arriving at the fair market value of the property, e.g., the cost of
acquisition, the current value of like properties, its size, shape, location, as well as
the tax declarations thereon.51

The first set of commissioners' report covering the property of respondent Baguis
has a recommended valuation of P1,654.40 per square meter. NPC questions the
factors considered by the commissioners in arriving at their valuation. It assails the
employment of opinions which were not supported by actual sales transactions.
Moreover, it also disputes the usage of the CALABARZON value in that none of the
affected lots lie along the stretch of the CALABARZON road. chanrobles v irt ual law li bra ry

Incidentally, the opinion and CALABARZON values were relatively high52 . However,
these were only two of the many factors that were looked into by the commissioners
in their valuation. They also considered the average sales data, zonal valuation, and
loan value in coming up with a reasonable estimate of just compensation. The
valuation was arrived at after carefully weighing in all these factors and should thus
be upheld.

A different valuation treatment was accorded by the second set of commissioners to


the properties of respondents Macaraig and Valdez. As argued by the NPC, the
condition of the properties was not considered, instead the commissioners relied
solely on the assessment made by the Provincial Appraisal Committee in Resolution
No. 03-99 involving a property similarly situated.53

Section 4, Rule 67 of the 1997 Rules of Civil Procedure provides that just
compensation is to be determined as of the date of the taking or the filing of the
complaint whichever came first. In this case, the complaint for expropriation was
filed on 10 March 2000 while the trial court issued a writ of possession on 19
December 2000. Resolution No. 03-99 setting the fair market value of the property
in Banaba, San Pascual, Batangas at P250.00 per square meter was issued on 2
March 1999. Clearly, the market value could no longer be accurate as prices might
have been distorted after a year. Furthermore, the commissioners did not bother to
explain the similarities in the nature, character or condition between the properties
of respondents and the properties subject of the resolution.

Worse, the commissioners' valuation of the Valdez' property was based only on an
information that a similar lot in the same subdivision was sold at P350.00. The
source of that information was not stated. Being unsubstantiated, the valuation
cannot support the compensation award.

WHEREFORE, the petition is PARTLY GRANTED. The assailed Decision of the


Court of Appeals in CA-G.R. CV No. 72399 is AFFIRMED insofar as it refers to the
properties of the Baguis. This case is REMANDED to the trial court for the proper
determination of the amount of just compensation with respect to the properties of
respondents Macaraig and Valdez. No costs.

SO ORDERED.

Endnotes:

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