National Power Corporation v. Henson
REITERATIONFacts
The Antecedents: The National Power Corporation (NPC) filed an action for eminent domain to expropriate five parcels of agricultural land totaling 58,311 square meters for the expansion of its Mexico Sub-Station. The respondents are the registered owners/claimants of these lands. Procedural History: The Regional Trial Court (RTC) initially fixed a provisional value of P100.00 per square meter, and subsequently issued a writ of possession. After appointing commissioners to determine just compensation, the RTC rendered judgment fixing the just compensation at P400.00 per square meter, with legal interest, attorney's fees, and costs. The Court of Appeals (CA) affirmed the RTC decision with modification, deleting the award of attorney's fees. The NPC appealed to the Supreme Court. The Petition: The NPC sought a review of the CA decision, primarily questioning the determination of just compensation.
Issue(s)
Whether the Court of Appeals erred in affirming the RTC's determination of just compensation. Whether the area of the communal irrigation canal should be excluded from the expropriation. Whether the RTC erred in ordering double payment for a portion of Lot 5. Whether the NPC is exempt from payment of costs, and the applicable legal interest on the compensation awarded.
Ruling
The Supreme Court modified the decision of the Court of Appeals. It fixed the just compensation at P375.00 per square meter for the five parcels of land, totaling 58,311 square meters. It excluded the communal irrigation canal from the expropriation and deleted the erroneous double payment for a portion of Lot 5. The Court also ruled that the NPC is exempt from payment of costs. Legal interest was ordered to be paid on the compensation awarded.
Ratio Decidendi
On the determination of just compensation: The Court held that the just compensation for expropriated property should be based on its nature and character at the time of taking. In this case, the subject parcels were undeveloped, raw agricultural land, although re-classified as residential. The trial court and the Court of Appeals fixed the value at P400.00 per square meter, which was the selling price of lots in an adjacent fully developed subdivision. The Supreme Court found this valuation unsupported by evidence and higher than the commissioners' recommendations. Applying the principle that the nature and character of the land at the time of taking is the principal criterion, the Court found Commissioner Atienza's recommendation of P375.00 per square meter to be the closest to the market value of raw land, considering its proximity to a developed subdivision. Therefore, the Court fixed P375.00 per square meter as just compensation. On the exclusion of the communal irrigation canal: The Court agreed with the petitioner that the area of the communal irrigation canal, consisting of 4,809 square meters, must be excluded from the land to be expropriated. This exclusion was already present in the amended complaint filed by the petitioner. Consequently, the trial court and the Court of Appeals erred in including this area in the expropriation. On the erroneous double payment: The Court found that the trial court erroneously ordered double payment for 3,611 square meters of Lot 5 in the dispositive portion of its decision. This error was ordered to be deleted. On exemption from costs and payment of legal interest: The Court ruled that, under its charter, the petitioner (NPC) is exempt from the payment of costs of the proceedings. The Court affirmed that the petitioner should pay legal interest on the compensation awarded. The interest is to be computed at six percent (6%) per annum from September 11, 1990, the date the petitioner was placed in possession of the land, until the finality of the decision. Thereafter, the unpaid amount shall bear interest at twelve percent (12%) per annum until full payment, less the amounts already withdrawn by the respondents from the provisional deposit.
Main Doctrine
The just compensation for expropriated property should be based on its nature and character at the time of taking, considering its market value, and not on the selling price of adjacent fully developed properties if the subject land is undeveloped and agricultural. The valuation should be supported by evidence, including reports from commissioners, and hearings should be conducted on such reports.