FIRST DIVISION

NATIONAL POWER CORPORATION, Petitioner, - versus - CARLOS VILLAMOR, Respondent.

G.R. No. 160080 Present: PUNO, C.J., Chairperson, CARPIO, CORONA, LEONARDO-DE CASTRO, and BERSAMIN, JJ. Promulgated: June 19, 2009

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DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review[1] assailing the Decision[2] dated 19 August 2002 and Resolution[3] dated 28 August 2003 of the Court of Appeals in CA-G.R. CV No. 61749.

The Facts

Petitioner National Power Corporation (NPC) is a government-owned and controlled corporation created and existing by virtue of Republic Act No. 6395 (RA 6395),[4] as amended by Presidential Decree No. 938.[5] The main objective of NPC is the development of hydro-electric generation power and the production of power from any other source. Its charter grants to NPC the power, among others, to exercise the right of eminent domain.[6]

Due to its Leyte-Cebu Interconnection Project, NPC’s 230 KV Talisay-Compostela transmission lines and towers have to pass parcels of land in the City of Danao and Municipality of Carmen, both situated in the province of Cebu. Two of these lands situated in Cantipay, Carmen, Cebu are owned by respondent Carlos Villamor (Villamor). On these lands stand fruit-bearing trees, such as mango, coconut, avocado, soursop or guyabano, jackfruit, tamarind, breadfruit, sugar apple or atis, Spanish plum or siniguelas and banana; and non-fruit bearing trees, such as mahogany and gemilina.

On 22 July 1996, NPC filed with the Regional Trial Court, Branch 25, Danao City, Cebu (trial court), a complaint for eminent domain of Villamor’s lands, docketed as Civil Case No. DNA-389. The lands were identified as Lot 3, 6191 Cad. 1046-D with a total area of 5,590.76 square meters and covered by Transfer Certificate of Title (TCT) No. 11970 and Lot 4, 6191 Cad. 1046-D with a total area of 3,134.53 square meters and covered by TCT No. 15-12045.[7]

NPC deposited with the Philippine National Bank, Fuenta Osmeña branch, P23,115.70, representing the assessed value on the tax declaration of the lands. The trial court, in its Order dated 14 July 1997,[8] ordered the issuance of the corresponding writ of possession in favor of NPC.

In the course of the proceedings, several parties intervened, namely Teodolo Villamor, Teofilo Villamor and Nunila Abellar. They were allegedly the siblings of respondent Villamor and the heirs of the late spouses Jose and Dolores Villamor. The intervenors claimed that NPC violated their legal rights in negotiating only with Villamor, who is just one of seven heirs. Villamor was allegedly not authorized by the other legal heirs to negotiate and receive payment for the land sought to be expropriated.

The only issue between NPC and Villamor involves the reasonableness and adequacy of the just compensation of the properties.

The trial court created a board of three commissioners to determine the just compensation for the lands and improvements. As approved by the trial court, the following formed the board of commissioners: Sebastian C. Ocon, the Right-of-Way Supervisor of NPC; Nicolas Capoy, a collection agent of the Bureau of Internal Revenue; and Fortunato C. Ligutom (Ligutom), the Municipal Assessor of Carmen, Cebu. Ligutom was appointed as Chairman.

In the Joint Commissioners’ Report[9] submitted to the trial court, the board of commissioners recommended the amount of P433 per square meter as the fair market value of Villamor’s lands. The board based the formulation on the following: (1) the inspection report made by representatives of the court, (2) list of documentary exhibits, (3) opinion values of the different agencies submitted to the Provincial Appraisal Committee, (4) certification from the different government agencies, and (5) the owner’s proposal. The amount of P290 per square meter was the average value submitted by the (1) Regional Investors, Inc., (2) Fil-Asia Agent, (3) International Exchange Bank, (4) Rural Bank of Carmen, (5) Municipal Assessor of Carmen, and (6) the owner’s proposal. Also, the proposed fair market value of P350 per square meter was taken into consideration since the affected lands were identified as part of the industrial zone per Regional Development Council Resolution No. 38, series of 1993[10] dated 17 September 1993. Likewise included in the report were the respective values of the fruit bearing and non-fruit bearing trees planted on Lots 3 and 4.

On 24 November 1997, Villamor filed his Comment to the Commissioners’ Report.[11] Villamor exhibited a similar expropriation case, Civil Case No. DNA-426, filed by NPC against Francisco Villamor, involving a lot, designated as Lot 2 of 6191, Cad. 1046-D, adjoining the lands of Villamor. In said case, the trial court rendered a decision fixing the just compensation at P600 per square meter. However, upon motion of NPC, the amount was reduced to P450.[12] Villamor prayed that the trial court consider the same amount of just compensation as that awarded to the landowner adjacent to his lands. Further, Villamor stated that a small portion of Lot 4 consisting of an area of 15.23 square meters had been separated from the remaining unaffected portion of the total area and would not be used by Villamor for any productive purposes. Thus, Villamor prayed that such small portion be included as part of the total area that should be compensated by NPC.

On 22 December 1997, the trial court rendered a decision in favor of Villamor.[13] The dispositive portion states:

WHEREFORE, facts and law considered, the Court hereby renders judgment condemning property subject of expropriation in favor of plaintiff; declaring in favor of the defendants for plaintiff to pay the fair market value of the portions of the lots condemned by this expropriation proceedings at P450.00 per square meter and to pay to defendant Carlos Villamor, the following amounts:

1. P2,515,842.00 for the 5,590.76 sq. mts. as the total affected area of Lot 3 of 6191, Cad. 1046-D;

2. P1,410,538.50 for the 3,134.53 sq. mts. as the total affected area of Lot 4 of 6191, Cad. 1046-D;

or the total amount of Three Million Nine Hundred Twenty-Six Thousand Three Hundred Eighty Pesos and 50/100 (P3,926,380.50);

Declaring that the fair market value of all the improvements inside the affected lots to be in the amounts recommended in the Commissioners’ Unit Base Market Value of the Land and Improvements Owned by Carlos Villamor attached to the Commissioners’ Report and ordering the Plaintiff National Power Corporation to pay to the defendant Carlos Villamor the following amounts:

1. P648, 932.00 for the total fair market value of the improvements in Lot 3, of 6191, Cad. 1046-D;

2. P372,968.00 for the total fair market value of the improvements in Lot 4, of 6191, Cad. 1046-D.

or the total amount of One Million Twenty One Thousand Nine Hundred Pesos (P1,021,900.00).

Ordering the amount of One Million Seven Hundred Eighty Three Thousand Five Hundred Six Pesos and 50/100 (P1,783,506.50) representing just compensation of Lot 4 and improvements described in the Amended Complaint, to be divided among the Hrs. of Jose and Dolores Villamor, or to be awarded solely to defendant Carlos Villamor, whichever is favored by the decision of the case pending litigation and under appeal with the Court of Appeals.

SO ORDERED.

Villamor filed a Motion for Reconsideration praying that the trial court’s decision be reviewed by ordering NPC to likewise pay for the small isolated portion of Lot 4, consisting of 15.23 square meters.[14]

On 22 January 1998, the trial court, acting on Villamor’s motion, rendered a Resolution amending its earlier decision.[15] The dispositive portion of the resolution states:

WHEREFORE, Motion for Reconsideration is given due course.

Let therefore the dispositive portion of the Decision in the last paragraph be amended by adding the following:

Ordering the plaintiff to pay the sum of P6,853.50 to defendant Carlos Villamor, same amount to be included in the deposit for valid claimants as proceeds of Lot 4, described in the complaint.

SO ORDERED.[16]

NPC filed an appeal with the Court of Appeals, docketed as CA-G.R. CV No. 61749.

The Ruling of the Court of Appeals

On 19 August 2002, the Court of Appeals dismissed the petition and affirmed the decision of the trial court.[17] The relevant portions of the decision state:

A perusal of the decision rendered by the trial court will show that before the trial court arrived at the amount of P450.00 per square meter as just compensation for the expropriated property, the court a quo considered the following factors:

“The Committee on Appraisal through its Chairman, Mr. Fortunato Ligutom, submitted the Commissioner’s Report.

Based on the opinion values of the different agencies, namely, Regional Investors, Inc., Fil Asia Agent, International Exchange Bank, Rural Bank of Carmen, Municipal Assessor of Carmen and Owner’s Proposal, the Committee in computing the average value per square meter appraised P290.00 per square meter. Pursuant however to RDC Res. No. 38, s. 1993, the area under expropriation is covered by the industrial zone to which the proposed market value of the land per square meter is P350.00 more or less.

Opinion values submitted by the different agencies, namely, the Municipal Agriculturist Officer of Sogod, Cebu of Carmen, Cebu, Mandaue City, and the new schedule of market values from Provincial Assessor of Cebu, for mango trees and coconut trees, the Committee reached by average computation per tree at P22,756.00 for mango tree and P2,310 per coconut tree. The land on which the improvements grow is classified as first class, it being a fertile land and trees growing thereon produce plenty of fruits.

x x x

The Commissioner’s Report did not consider the fact that in expropriating that portion of Lot 4 of 6191, Cad. 1046-D, a small dangling portion of the said lot consisting of 15.23 square meters is left out and separated from the remaining portion of said Lot 4. Considering that the 15.23 square meters cannot anymore be used by defendant Carlos Villamor for any productive purposes and the same will cease to have commercial value to the defendant Carlos Villamor, said dangling area should also be paid by plaintiff NPC.

Moreover, appellee has shown to this Court that in other expropriation proceedings filed by appellant, involving lands which are likewise affected by the transmission lines of NPC’s Leyte-Cebu Interconnection Project, National Power Corporation executed several Deeds of Absolute Sale with the respective owners of the lots expropriated where NPC agreed to pay the owners of the lands P450.00 per square meter as just compensation. And two Compromise Agreements were likewise entered into by NPC with the respective owners of the lands where NPC agreed to pay P420.00 as just compensation for the lots expropriated. In all these cases, National Power Corporation did not invoke Sec. 3-A of the Revised Charter of the National Power Corporation.

WHEREFORE, in view of the foregoing, the instant appeal is hereby DISMISSED. The decision dated 22 December 1997 rendered by the Regional Trial Court of Danao City, Branch 25, is hereby AFFIRMED.

SO ORDERED.[18]

NPC filed a Motion for Reconsideration. This was denied by the appellate court in a Resolution dated 28 August 2003.[19]

Hence, this petition.

The Issue

The issue for our resolution is whether the fair market value awarded by the trial court may be reduced taking into account that petitioner is allegedly acquiring only an easement of right of way and that the lands affected are classified as agricultural.

The Court’s Ruling

The petition lacks merit.

Petitioner contends that under Section 3A of its charter, RA 6395, where private property will be traversed by transmission lines, NPC shall only acquire an easement of right of way since the landowner retains ownership of the property and can devote the land to farming and other agricultural purposes. Moreover, in the present case, since the lands are agricultural with no sign of commercial activity, the amount of P450 per square meter awarded by the trial court as market value of the property is excessive and unreasonable.

Respondent, on the other hand, maintains that the affected portions of the lands are not only traversed by petitioner’s transmission lines but a portion is also used as the site of its transmission tower. He asserts that petitioner cannot hide behind the provisions of Section 3A and claim that it may only pay landowners an easement fee not exceeding 10% of the market value of the property. Further, respondent points out that other landowners similarly affected by the Leyte-Cebu Interconnection Project were compensated in the amount of P420 to P450 per square meter as shown by deeds of absolute sale[20] and compromise agreements[21] executed by petitioner in other expropriation cases.

Petitioner’s reliance on Section 3A[22] of RA 6395 has been struck down by this Court in a number of cases.[23] Easement of right of way falls within the purview of the power of eminent domain. In installing the 230 KV Talisay-Compostela transmission lines which traverse respondent’s lands, a permanent limitation is imposed by petitioner against the use of the lands for an indefinite period. This deprives respondent of the normal use of the lands. In fact, not only are the affected areas of the lands traversed by petitioner’s transmission lines but a portion is used as the site of its transmission tower. Because of the danger to life and limbs that may be caused beneath the high-tension live wires, the landowner will not be able to use the lands for farming or any agricultural purposes.

Further, the trial and appellate courts fixed the valuation of the lands at P450 per square meter. The courts considered not only the Commissioners’ Report and the opinion values of different agencies submitted to the trial court but also the several deeds of absolute sale and compromise agreements entered into by petitioner with landowners adjacent to respondent’s lands.

As shown in the records of the case, petitioner freely and voluntarily entered into several deeds of absolute sale with other landowners affected by the Leyte-Cebu Interconnection Project for a P450 per square meter selling price from the years 1996 to 1997. These deeds were identified as: (1) a 3,659 square meter parcel of land (Lot No. 4387-A) situated in Barangay Tuburan Sur, Danao City, Cebu sold on 15 September 1997 pursuant to Resolution No. 02-97 dated 1 March 1997 of the Danao City Appraisal Committee;[24] (2) a 1,607.13 square meter parcel of land (Lot No. 3527-A) situated in Maslog, Danao City sold on 10 November 1997 pursuant to Resolution No. 09-96, series of 1996 dated 28 August 1996 of the Danao City Appraisal Committee;[25] (3) a 3,350 square meter parcel of land (Lot No. 3525, Case 4, Cad. 681-D), 1,391.33 square meter land (Lot No. 3813-A), 4,905.22 square meter land (Lot No. 3164-A), and 222.81 square meter land (Lot No. 3165-A), all situated in Maslog, Danao City, sold in 1996 pursuant to Resolution No. 07-96 dated 23 October 1996 of the Danao City Appraisal Committee;[26] (4) a 2,898.72 square meter parcel of land (Lot No. 6609-A) situated in Barangay Taboc, Danao City sold on 20 January 1997 pursuant to Resolution No. 09-97 dated 1 August 1997 of the Danao City Appraisal Committee;[27] and (5) a 4,354 square meter parcel of land (Lot No. 4139-A) situated in Barangay Tuburan Sur, Danao City sold on 12 September 1997 pursuant to Resolution No. 08-97 dated 11 July 1997 of the Danao City Appraisal Committee.[28]

Moreover, petitioner entered into two compromise agreements[29] dated 26 May 1999, duly approved by the trial court, which fixed the valuation of the lands at P420 per square meter based on the previous valuation fixed and approved by petitioner and the trial court on three other expropriation cases: (1) DNA-426 entitled “National Power Corporation v. Francisco Villamor, Sr.”; (2) DNA-389 entitled “National Power Corporation v. Carlos Villamor”; and (3) DNA-373 entitled “National Power Corporation v. Francisco Camara, et al.” These compromise agreements consisted of an 11,700 square meter parcel of land situated in Baring and Cantipay, Carmen, Cebu and a 1,675.80 square meter land situated in Cantipay, Carmen.

Thus, we see no reason to disturb the findings of the trial and appellate courts. Indeed, respondent is entitled to just compensation or the just and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the expropriation.[30] Since the determination of just compensation in expropriation proceedings is essentially a judicial function, this Court finds the amount of P450 per square meter to be just and reasonable compensation for the expropriated lands of respondent.

WHEREFORE, we DENY the petition. We AFFIRM the 19 August 2002 Decision and 28 August 2003 Resolution of the Court of Appeals in CA-G.R. CV No. 61749.

SO ORDERED.

ANTONIO T. CARPIO

Associate Justice

WE CONCUR:

REYNATO S. PUNO

Chief Justice

Chairperson

RENATO C. CORONA TERESITA J. LEONARDO-DE CASTRO

Associate Justice Associate Justice

LUCAS P. BERSAMIN

Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO

Chief Justice

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[1] Under Rule 45 of the 1997 Revised Rules of Civil Procedure.

[2] Rollo, pp. 64-71. Penned by Justice Perlita J. Tria Tirona with Justices Buenaventura J. Guerrero and Rodrigo V. Cosico, concurring.

[3] Id. at 73-74.

[4] An Act Revising the Charter of the National Power Corporation. Made effective on 10 September 1971.

[5] An Act Further Amending Certain Sections of Republic Act Numbered Sixty-Three Hundred Ninety-Five entitled, ‘An Act Revising the Charter of the National Power Corporation,’ as amended by Presidential Decree Nos. 380, 395 and 758. Effective on 27 May 1976.

[6] Sec. 3. Powers and General Functions of the Corporation. The powers, functions, rights and activities of the Corporation shall be the following:

x x x

(j) To exercise the right of eminent domain for the purpose of this Act in the manner provided by law for instituting condemnation proceedings by the national, provincial and municipal governments; x x x

[7] Records, p. 105.

[8] Id. at 182.

[9] Id. at 402-407.

[10] Id. at 383.

[11] Id. at 219- 223.

[12] Id. at 225.

[13] Id. at 228-234.

[14] Id. at 235-237.

[15] Id. at 240-241.

[16] Id. at 241.

[17] Rollo, pp. 64-71.

[18] Id. at 70-71.

[19] Id. at 73-74.

[20] CA rollo, pp. 60-70.

[21] Id. at 71-76.

[22] Sec. 3A. In acquiring private property or private property rights through expropriation proceedings where the land or portion thereof will be traversed by the transmission lines, only a right-of-way easement thereon shall be acquired when the principal purpose for which such land is actually devoted will not be impaired, and where the land itself or portion thereof will be needed for the projects or works, such land or portion thereof as necessary shall be acquired.

In determining the just compensation of the property or property sought to be acquired through expropriation proceedings, the same shall

(a) With respect to the acquired land or portion thereof, not exceed the market value declared by the owner or administrator or anyone having legal interest in the property, or such market value as determined by the assessor, whichever is lower.

With respect to the acquired right-of-way easement over the land or portion thereof, not to exceed ten percent (10%) of the market value declared by the owner or administrator or anyone having legal interest in the property, or such market value as determined by the assessor whichever is lower.

In addition to the just compensation for easement of right-of-way, the owner of the land or owner of the improvement, as the case may be, shall be compensated for the improvements actually damaged by the construction and maintenance of the transmission lines, in an amount not exceeding the market value thereof as declared by the owner or administrator, or anyone having legal interest in the property, or such market value as determined by the assessor whichever is lower; Provided, that in cases any buildings, houses and similar structures are actually affected by the right-of-way for the transmission lines, their transfer, if feasible, shall be effected at the expense of the Corporation; Provided, further, that such market value prevailing at the time the Corporation gives notice to the landowner or administrator or anyone having legal interest in the property, to the effect that his land or portion thereof is needed for its projects or works shall be used as basis to determine the just compensation therefor. (Emphasis supplied)

[23] National Power Corporation v. Tiangco, G.R. No. 170846, 6 February 2007, 514 SCRA 674; National Power Corporation v. San Pedro, G.R. No. 170945, 26 September 2006, 503 SCRA 333; Didipio Earth-Savers’ Multi-Purpose Association, Inc. (DESAMA) v. Gozun, G.R. No. 157882, 30 March 2006, 485 SCRA 586; National Power Corporation v. Aguirre-Paderanga, G.R. No. 155065, 28 July 2005, 464 SCRA 481; National Power Corporation v. Chiong, 452 Phil. 649 (2000); Camarines Norte Electric Cooperative, Inc. (CANORECO) v. Court of Appeals, 398 Phil. 886 (2000); National Power Corporation v. Gutierrez, G.R. No. 60077, 18 January 1991, 193 SCRA 1.

[24] CA rollo, pp. 60-61.

[25] Id. at 62-63.

[26] Id. at 64-66.

[27] Id. at 67-68.

[28] Id. at 69-70.

[29] Id. at 71-76.

[30] The Province of Tayabas v. Perez, 66 Phil. 467 (1938).