National Power Corporation v. Spouses Zabala
REITERATIONFacts
The Antecedents: The National Power Corporation (Napocor) filed an eminent domain complaint against respondents Spouses Rodolfo Zabala and Lilia Baylon (Spouses Zabala) for an easement of right-of-way over a 6,820-square meter portion of their property for the 230 KV Limay-Hermosa Transmission Lines Project. Napocor failed to reach an agreement with the Spouses Zabala for the acquisition of the easement. Procedural History: The Spouses Zabala moved to dismiss, arguing that the property was needed for housing expansion, that the transmission lines would negatively impact their property's value and endanger inhabitants, and that Napocor did not exert earnest efforts to purchase the property directly. Commissioners were appointed, submitting reports recommending just compensation. Initially, a report recommended ₱150.00 per square meter, which Napocor questioned for lack of documentary evidence. The RTC recommitted the report. A Final Report recommended ₱500.00 per square meter, also lacking documentary support. The Regional Trial Court (RTC), Branch 2, Balanga City, in a Partial Decision, ordered Napocor to pay ₱150.00 per square meter as just compensation, citing the commissioners' initial recommendation and the deprivation of beneficial use. Napocor appealed to the Court of Appeals (CA), arguing the commissioners' reports lacked documentary evidence and that RA 6395, Section 3A, limiting liability to an easement fee not exceeding 10% of the market value, should apply. The CA affirmed the RTC's decision. The Petition: Napocor filed a Petition for Review on Certiorari, assailing the CA's affirmation of the RTC's Partial Decision. Napocor contended that the ₱150.00 per square meter valuation was not supported by documentary evidence and that RA 6395, Section 3A, should limit its liability to an easement fee of not more than 10% of the market value, as the property was classified as riceland and its primary purpose would not be impaired.
Issue(s)
Whether Section 3A of Republic Act No. 6395, limiting compensation for an easement of right-of-way to 10% of the market value, is binding on the courts in determining just compensation; and whether, given the perpetual deprivation of normal land use due to high-tension electric current, full market value is the appropriate measure of compensation. Whether the just compensation of ₱150.00 per square meter fixed by the RTC is supported by sufficient documentary evidence, and whether the Commissioners' reports, lacking such evidence, can form a sustainable basis for the RTC's valuation.
Ruling
The Supreme Court partially granted the petition, remanding the case to the RTC for the proper determination of just compensation. The Court held that Section 3A of RA No. 6395 cannot restrict the constitutional power of the courts to determine just compensation. However, the RTC's valuation of ₱150.00 per square meter was found to be unsupported by documentary evidence, as were the commissioners' reports.
Ratio Decidendi
On the binding effect of Section 3A of RA No. 6395 and the appropriate measure of compensation: The Court reiterated that legislative enactments or executive issuances fixing just compensation are not binding on courts. The determination of just compensation is a judicial function. Invoking Section 3A of RA 6395 was deemed an impermissible encroachment on judicial prerogatives. The Court emphasized that when high-tension electric current passing through transmission lines perpetually deprives property owners of the normal use of their land, it is just and proper to require the expropriator to recompense them for the full market value of their property, not merely an easement fee. On the evidentiary basis for just compensation: The Court found that the just compensation of ₱150.00 per square meter fixed by the RTC lacked evidentiary support. The Commissioners' reports were not substantiated by any documentary evidence, relying instead on ocular inspections, interviews, and comparisons without presenting concrete documents like tax declarations, zonal valuations, or sworn declarations from realtors. The Court cited previous rulings where commissioners' valuations not based on documentary evidence were disregarded as hearsay. Therefore, the RTC's adoption of the commissioners' flawed reports without requiring additional supporting evidence was deemed unsustainable.
Main Doctrine
Legislative enactments or executive issuances fixing or providing the method of computing just compensation are not binding on courts and are treated as mere guidelines. The determination of just compensation is a judicial function that cannot be usurped by any other branch or official of the government. Furthermore, commissioners' reports recommending just compensation must be supported by documentary evidence; otherwise, they are considered hearsay and should be disregarded.