National Transmission Corporation v. Lacson-De Leon
REITERATIONFacts
The Antecedents: National Power Corporation (NAPOCOR), now National Transmission Corporation (petitioner), filed a complaint for expropriation to acquire an easement of right-of-way for a transmission line project over a 39,347 square meter parcel of land, part of a larger 874,450 square meter lot owned by respondents. Initially, the complaint impleaded Maria Teresa Lacson De Leon, who was later dropped as a party. Respondents argued that the property was classified as residential by national and local governments, not agricultural as suggested by tax declarations, and that the expropriation was confiscatory. Procedural History: The trial court ordered NAPOCOR to amend its complaint to implead the real parties-in-interest. After summons by publication and an Answer filed by Jose Ma. Leandro L. De Leon, other respondents adopted the same. The trial court issued a Writ of Possession upon deposit by NAPOCOR of 100% of the property's value based on BIR zonal valuation. A board of commissioners recommended just compensation based on residential classification, citing city planning certifications and resolutions, and recommended consequential damages due to the perceived risks of high-tension transmission lines. The trial court adopted these findings, ordering NAPOCOR to pay just compensation, consequential damages, and attorney's fees. NAPOCOR appealed to the Court of Appeals (CA) solely on the issue of just compensation. The CA affirmed with modification, deleting attorney's fees and imposing a 12% per annum interest on the just compensation from the date of possession until full payment. The CA later granted the substitution of NAPOCOR with petitioner. The Petition: Petitioner assails the CA's decision on the determination of just compensation, the amount of consequential damages, and the imposition of interest.
Issue(s)
Whether the determination of just compensation has factual basis. Whether the amount of consequential damages is justified. Whether the imposition of interest on the just compensation and consequential damages is proper.
Ruling
The petition is partly meritorious. The Supreme Court modified the awards for just compensation and consequential damages, and clarified the applicable interest rates.
Ratio Decidendi
On the determination of just compensation: The Court reiterated that just compensation must be determined as of the date of taking or filing of the complaint, whichever is earlier. In this case, it was the filing of the complaint on February 28, 2002. While the commissioners' valuation was made later, the Court found no significant change in fair market value within the less than three-year period. The Court affirmed the lower courts' reliance on the city's classification of the property as residential over tax declarations classifying it as agricultural, citing NAPOCOR v. Marasigan which clarified that while courts have discretion in classifying lands for just compensation purposes, this does not substitute the local government's power to reclassify lands. However, the Court found the commissioners' method of averaging values from dissimilar subdivisions (one purely residential, others mixed residential/commercial) to be without basis. Consequently, the Court fixed just compensation at PhP600.00 per square meter, based on the raw land value of the adjacent Montinola Subdivision, which is purely residential. On the award of consequential damages: The Court agreed that consequential damages are proper when the remaining property suffers impairment or decrease in value due to the expropriation. It noted that the commissioners estimated about one-third of the total area was prejudiced. The trial court awarded PhP22,463,103.00, representing 10% of the fair market value of the 310,908-square meter western portion allegedly rendered useless by the transmission lines. The Court found this 10% calculation without basis. Citing NAPOCOR v. Marasigan, the Court held that the more reasonable computation is 50% of the BIR zonal valuation of the affected property. Given the BIR zonal valuation of PhP17.50 per square meter, the Court limited consequential damages to PhP2,720,445.00 (50% of the value of the 310,908-square meter area). On the imposition of interest: The Court ruled that the delay in the payment of just compensation constitutes a forbearance of money, entitling it to legal interest. Following Evergreen Manufacturing Corporation v. Republic, the Court held that the legal interest rate is 12% per annum from the date of actual taking (February 2, 2004) until June 30, 2013. Thereafter, the rate is reduced to 6% per annum from July 1, 2013, until full payment. The same interest rates apply to the award of consequential damages.
Main Doctrine
The determination of just compensation in expropriation cases is a judicial function, and while local government classifications are given weight, the court retains discretion. The rate of interest on unpaid just compensation follows BSP Circular No. 799, with 12% applicable until June 30, 2013, and 6% thereafter.