National Power Corporation v. Heirs of Serra Serra
REITERATIONFacts
The Antecedents: Petitioner National Power Corporation (NAPOCOR) filed a complaint for eminent domain to acquire an easement of right of way over portions of land owned by respondents for its Kabankalan-Maricalum 138KV Transmission Line Island Grid Project. NAPOCOR deposited P258,000.00 as provisional value and was placed in possession of the properties on August 3, 1999. The complaint was amended to include Lot 2747, increasing the total expropriation area. The case was initially dismissed for failure to prosecute but was later reinstated. A Board of Commissioners was constituted to determine just compensation. Procedural History: The Regional Trial Court (RTC) ordered the expropriation of the lands and fixed just compensation, considering zonal values, the actual use of the lots (sugarcane planting despite residential classification), and the disturbance caused. The RTC ordered NAPOCOR to pay P18,661,113.75 as the remaining balance of just compensation, with legal interest from the taking of possession until fully paid. The Court of Appeals (CA) affirmed the RTC decision with modification, specifying the legal interest as 12% per annum from the taking of possession until fully paid. Upon reconsideration, the CA amended the reckoning period for legal interest to commence from the filing of the complaint until fully paid. The Petition: NAPOCOR filed a Petition for Review, arguing that the just compensation should be based on the prevailing price and character of the property at the time of the filing of the complaint in 1998, and not on improvements as of 2006, as it alleged the courts a quo erroneously considered. Respondents argued that the RTC based its valuation on factors affecting the properties in 1998.
Issue(s)
Whether the just compensation awarded should be based on the prevailing price and character of the property at the time of the filing of the Complaint for eminent domain in 1998. Whether the legal interest on the difference between the final amount adjudged and the initial payment should accrue from the date of taking of possession, and what the applicable interest rates are.
Ruling
The Supreme Court affirmed the Decision of the Court of Appeals with modification regarding the computation of legal interest. The Court ruled that just compensation should be based on the value and character of the property at the time of the filing of the complaint in 1998. The Court modified the accrual of legal interest, stating it should commence from the date of taking of possession, not from the filing of the complaint, and adjusted the applicable interest rates over time.
Ratio Decidendi
On the determination of just compensation: The Supreme Court affirmed the appellate court's finding that the RTC properly ascertained the value and character of the property as of the time of the filing of the complaint in 1998, in accordance with Rule 67 of the Rules of Court and prevailing jurisprudence. The Court clarified that the trial court did not consider improvements as of 2006 in determining just compensation, contrary to NAPOCOR's assertion. The Court emphasized that it is not a trier of facts and would not disturb the factual findings of the trial and appellate courts unless there are exceptional circumstances, which were not present in this case. The RTC's valuation was independently arrived at after considering the commissioners' report and the parties' proposals, and it correctly disregarded respondents' proposal based on 2006 peripheral area values as it was based on generalities and not the relevant period. On the accrual of legal interest and applicable interest rates: The Supreme Court clarified that legal interest on the difference between the final amount adjudged as just compensation and the initial payment made by the government should accrue from the date of taking of possession, not from the date of filing of the complaint. This is because it is from the date of taking of possession that the fact of deprivation of property can be established. The Court cited Republic v. Macabagdal and Evergreen Manufacturing Corp. v. Republic to support this ruling. In this case, NAPOCOR was placed in possession on August 3, 1999, making this the proper starting point for the accrual of legal interest. The Supreme Court reiterated that the 12% per annum legal interest rate is applicable only until June 30, 2013, in line with Secretary of the Department of Public Works and Highways v. Spouses Tecson, which upheld the applicability of BSP-Monetary Board Circular No. 799, Series of 2013. Consequently, the applicable legal interest rate from July 1, 2013, until the finality of the resolution is 6% per annum. Thereafter, the total amount due shall earn legal interest of 6% per annum from the finality of the resolution until full payment.
Main Doctrine
The just compensation for expropriated property must be appraised as of the time of the filing of the complaint, and legal interest on the difference between the final adjudged amount and the initial payment accrues from the date of taking of possession until full payment, with the applicable interest rate changing over time.