Romonafe Corp. v. National Power Corp.
REITERATIONFacts
The Antecedents: Respondent National Power Corporation (NPC) initiated an eminent domain case against petitioner Romonafe Corporation and Vine Development Corporation for the acquisition of substantial land parcels in Dasmariñas, Cavite. The complaint was filed on July 12, 1995, with the Regional Trial Court (RTC) of Imus, Cavite. Following the filing, the RTC issued a writ of possession, granting NPC the authority to take possession of the properties on February 12, 1996. Commissioners were appointed to determine just compensation, recommending P3,500 per square meter for Romonafe's property. NPC contested this valuation, arguing it should be based on the market value at the time of the complaint's filing in 1995, not the later 1997 appraisal. Procedural History: The trial court, by decision dated September 5, 1997, ordered NPC to pay Romonafe P168,360,920.00 and Vine Development Corporation P339,371,830.00, at P3,500 per square meter, plus legal interest from the date of taking possession. NPC appealed this decision to the Court of Appeals (CA). During the appeal, NPC and Romonafe entered into a compromise agreement, which the Office of the Solicitor General (OSG) questioned. The CA dismissed NPC's appeal due to issues concerning the authority of its lawyers to appear before the appellate court. NPC's motion for reconsideration was denied, leading to a petition for review to the Supreme Court (G.R. No. 137785). The Supreme Court remanded the case to the CA for disposition on the merits, having previously invalidated the compromise agreement between NPC and Romonafe. Subsequently, the CA, by decision of November 10, 2004, nullified the compromise agreement and fixed the market value of Romonafe's property at P1,500 per square meter. The Petition: Romonafe Corporation, after its motion for reconsideration of the CA's November 10, 2004 decision was denied, filed the instant Petition for Review on Certiorari with the Supreme Court. Romonafe argues that the CA committed grave error in nullifying the compromise agreement between NPC and Romonafe, in refusing to rule on all issues presented by the OSG on appeal (specifically concerning the compromise agreement between NPC and Vine Development Corporation), and in refusing to reconsider its resolution, which Romonafe characterizes as undue discrimination and partiality by the OSG in favor of Vine Development Corporation. NPC, in its comment, notes the CA's failure to pass on the appeal regarding Vine's property and the Partial Compromise Agreement between NPC and Vine, requesting the Court to consider this agreement.
Issue(s)
Whether the Court of Appeals erred in nullifying the Compromise Agreement between NPC and Romonafe. Whether the Court of Appeals erred in failing to pass on the merits of NPC's appeal concerning Vine Development Corporation's property and the Partial Compromise Agreement between NPC and Vine.
Ruling
The petition is DENIED. The records of the case are remanded to the Court of Appeals for it to pass on the merits of the appeal of the National Power Corporation from the trial court’s decision respecting Vine Development Corporation and the Partial Compromise Agreement subsequently forged during the pendency of the appeal between the National Power Corporation and Vine Development Corporation.
Ratio Decidendi
On the issue of the Compromise Agreement between NPC and Romonafe: The Court of Appeals correctly nullified the Compromise Agreement dated June 8, 1998, between the National Power Corporation (NPC) and Romonafe Corporation. This agreement was found to be contrary to established jurisprudence, specifically the ruling in B.H. Berkenkotter & Co. v. Court of Appeals, which mandates that just compensation in eminent domain cases should be determined as of the date of the filing of the complaint or the date of the taking of the property, whichever comes first. The CA also correctly found the agreement to be disadvantageous to the government, thereby violating public policy. The valuation of P3,500 per square meter used in the compromise agreement was based on a 1997 appraisal, which was significantly later than the filing of the complaint on July 12, 1995. The Provincial Appraisal Committee's (PAC) Resolution No. 08-95 dated October 25, 1995, which assessed Romonafe's property at P1,500 per square meter, was the appropriate basis for valuation at the time of filing. Romonafe's contention that a later PAC Resolution (No. 07-97) assessed its property at P3,500 per square meter was unmeritorious, as this resolution was issued long after the filing of the complaint and the subsequent delay in seeking reconsideration of the 1995 assessment further weakened its claim. The commissioners' valuation report, which also used P3,500 per square meter, was similarly based on a later appraisal date (January 10, 1997) and thus did not reflect the value at the time of taking. On the issue of the Court of Appeals' failure to pass on the merits of NPC's appeal concerning Vine Development Corporation and the Partial Compromise Agreement: The Court notes that the appellate court failed to pass on NPC's appeal with respect to the property of Vine. Furthermore, as both NPC and Romonafe manifested, the appellate court failed to consider the Partial Compromise Agreement between NPC and Vine in its assailed Decision. Therefore, a remand of the case to the appellate court is in order to address these matters. The Court of Appeals must pass on the merits of the appeal of the National Power Corporation from the trial court’s decision respecting Vine Development Corporation. Additionally, the appellate court must consider the Partial Compromise Agreement subsequently forged during the pendency of the appeal between the National Power Corporation and Vine Development Corporation.
Main Doctrine
Just compensation in eminent domain cases must be determined as of the date of the filing of the complaint or the date of the taking of the property, whichever comes first. Compromise agreements that deviate from this principle and are disadvantageous to the government may be nullified.