National Power Corp. v. Macabangkit
REITERATIONFacts
The Antecedents: The Heirs of Macabangkit Sangkay (Heirs) sued the National Power Corporation (NPC) for damages and recovery of property, or alternatively, for just compensation. They alleged that an underground tunnel constructed by NPC for its Agus River Hydroelectric Power Plant Project traversed their land (221,573 sq. meters) in Iligan City without their knowledge or consent. They discovered this in 1995, which led to the rejection of their land for development projects due to safety concerns and the land's diminished value. Procedural History: The Regional Trial Court (RTC), Branch 1, Iligan City, ruled in favor of the Heirs, ordering NPC to pay just compensation for the land at ₱500.00 per square meter, monthly rentals from 1979, moral damages, exemplary damages, and attorney's fees. A supplemental decision condemned the land in favor of NPC upon payment. The Court of Appeals (CA) affirmed the RTC decision. NPC appealed to the Supreme Court, arguing that the tunnel did not traverse their property, or if it did, the claim had prescribed, and that Section 3(i) of Republic Act No. 6395 should apply. The Petition: The Supreme Court reviewed the case, focusing on whether the CA and RTC erred in holding that an underground tunnel traversed the Heirs' land and whether the Heirs' right to claim just compensation had prescribed.
Issue(s)
Whether the Court of Appeals and the Regional Trial Court erred in holding that there was an underground tunnel traversing the Heirs of Macabangkit’s land constructed by NPC, and whether NPC's construction constituted a 'taking' of the land, thereby entitling the Heirs to just compensation, and the proper determination thereof, including awards for rentals, moral, and exemplary damages, and attorney's fees. Whether the Heirs of Macabangkit’s right to claim just compensation had prescribed under Section 3(i) of Republic Act No. 6395, or, alternatively, under Articles 620 and 646 of the Civil Code.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals, with modifications. NPC is liable to pay just compensation to the Heirs of Macabangkit. The awards for rentals, moral damages, and exemplary damages were deleted. Interest at 12% per annum was imposed on the principal amount of just compensation, reckoned from the filing of the complaint. The award of attorney's fees to the Heirs was deleted, and attorney's fees were fixed on a quantum meruit basis for the respective counsels.
Ratio Decidendi
On the existence of the underground tunnel, whether NPC's construction constituted a 'taking', the determination of just compensation, and the awards for damages and fees: The Court held that the factual findings of the RTC, as affirmed by the CA, are binding on the Supreme Court regarding the existence of the tunnel. Evidence sufficiently established the tunnel's existence. The Court affirmed that NPC's construction without formal expropriation constituted a 'taking,' depriving the owners of beneficial use. The Court upheld the RTC's valuation of ₱500.00 per square meter, finding it just and equitable due to NPC's denial of due process. The Court deleted awards for rentals, moral, and exemplary damages as the just compensation covered the loss, and the RTC/CA lacked justification for the damages. The Court deleted the 15% attorney's fees and fixed it on a quantum meruit basis, awarding 10% to Atty. Dibaratun and a minimal amount to Atty. Ballelos. On the prescription of the claim for just compensation: The Court ruled that the five-year prescriptive period under Section 3(i) of Republic Act No. 6395 applies only to actions for damages, not to actions for just compensation. The Court distinguished between an action for damages and an action for just compensation (inverse condemnation), which is based on the constitutional prohibition against taking private property for public use without just compensation. The latter is not subject to statutory prescription, as it stems from a constitutional mandate.
Main Doctrine
The five-year prescriptive period under Section 3(i) of Republic Act No. 6395 applies only to actions for damages, not to actions for just compensation for property taken for public use. The construction of an underground tunnel by the National Power Corporation (NPC) without formal expropriation proceedings or consent constitutes a 'taking' of private property, entitling the owners to just compensation based on the fair market value at the time of the filing of the complaint.