Buot v. National Transmission Corp.
REITERATIONFacts
The Antecedents: Spouses Herbert E. Buot and Ophelia R. Completo (Spouses Buot) are the registered owners of a 117,850-square-meter agricultural lot. National Transmission Corporation (Transco), later substituted by National Grid Corporation of the Philippines (NGCP), filed a complaint for expropriation to acquire a 196-square-meter portion and enforce an easement of right-of-way over 7,382 square meters for its Naga-Suba 138KV T/L Upgrading Project. Spouses Buot opposed, claiming the project would render their entire lot useless and sought just compensation for the whole property, considering an existing 5,420-square-meter easement. The Regional Trial Court (RTC) appointed commissioners and later ordered Transco to pay Spouses Buot P5,114,300.00 as provisional compensation. The Panel of Commissioners recommended P600.00 per square meter as the minimum valuation. NGCP took over Transco's operations. Procedural History: The RTC, in its Decision dated September 21, 2011, granted the expropriation and fixed just compensation at P1,000.00 per square meter for the 7,578-square-meter affected area, totaling P7,578,000.00, plus P567,500.00 for improvements, for a total of P8,145,500.00. The Court of Appeals (CA), in its Decision dated February 9, 2018, set aside the RTC Decision and remanded the case for: (1) determination of just compensation for the expropriated property and affected improvements, considering a 60-meter legal easement of right-of-way under Section 112 of Commonwealth Act (CA) No. 141; and (2) execution of a quitclaim over the property covered by the legal easement. The CA ruled that power and transmission lines fall under "similar works" in Section 112 of CA No. 141, and that NGCP may appropriate a 60-meter wide area without payment, except for improvements. However, if the remaining portion becomes unusable, it is subject to consequential damages. The CA found the RTC's P1,000.00 per square meter valuation and the P567,500.00 for improvements to be without sufficient basis. Spouses Buot's motion for reconsideration was denied, leading to the present petition. The Petition: Spouses Buot seek to reverse the CA's ruling, arguing that power and transmission lines are excluded from Section 112 of CA No. 141 and that the RTC's valuation was proper. NGCP, in its comment, questioned the remand for determination of dangling areas.
Issue(s)
Whether power and transmission lines fall under "similar works" under Section 112 of Commonwealth Act No. 141. Whether the Court of Appeals erred in remanding the case to the Regional Trial Court for determination of just compensation, consequential damages, and value of improvements, specifically regarding the application of the 60-meter easement and the potential for consequential damages to 'dangling' areas.
Ruling
The petition is partly meritorious. The Supreme Court affirmed the Court of Appeals' ruling that power and transmission lines are "similar works" under Section 112 of Commonwealth Act No. 141. However, the Court modified the CA's decision by remanding the case to the Regional Trial Court for further proceedings, specifically for the determination of consequential damages and the value of improvements on the property affected by the legal easement of right-of-way. The Court upheld the RTC's valuation of P1,000.00 per square meter for the expropriated portion of the property.
Ratio Decidendi
On the issue of whether power and transmission lines fall under "similar works" under Section 112 of Commonwealth Act No. 141: The Court ruled in the affirmative. It explained that Section 112 of CA No. 141, as amended, enumerates specific public works and then includes "and similar works as the Government or any public or quasi-public service or enterprise." The Court applied the principle of ejusdem generis, stating that the general words "similar works" should be interpreted to include projects of the same kind or nature as those specifically enumerated, which are intended for public use. Power and transmission lines, being national government infrastructure projects for public use, fall within this general clause. The Court noted that the Implementing Rules and Regulations (IRR) of Republic Act No. (RA) 8974 also explicitly include power generation, transmission, and distribution projects. Furthermore, the power of eminent domain is vested by law upon entities like NGCP that have a franchise to operate power lines, reinforcing the public purpose of such projects. The Court concluded that the CA correctly applied the principle of ejusdem generis. On the issue of whether the Court of Appeals erred in remanding the case to the Regional Trial Court for determination of just compensation, consequential damages, and value of improvements: The Court found merit in the remand, but with specific modifications. The Court reiterated that under Section 112 of CA No. 141, lands granted by patent are subject to a legal easement of right-of-way not exceeding 60 meters in width, which the government or its entities may enforce free of charge, except for the value of existing improvements. The Court found that the 7,382-square-meter portion appropriated by NGCP was within the 60-meter threshold, thus NGCP is not obligated to pay for the land itself, only for affected improvements. However, applying the doctrine in Republic of the Philippines v. Andaya, the Court held that property owners are entitled to consequential damages if the enforcement of the easement renders the remaining area unusable or materially impairs its value. The Court emphasized that "dangling" areas, which are rendered useless due to the presence of transmission lines but are outside the 60-meter easement, may be subject to consequential damages. Therefore, the case was remanded to the RTC for a thorough determination of the actual area of the 60-meter easement, the dangling areas outside this easement for which consequential damages may be awarded, and the value of improvements on the utilized portion of the easement. The Court also agreed with the CA that the RTC's provisional valuation of improvements was not sufficiently based and needed reevaluation.
Main Doctrine
Lands granted by patent are subject to a legal easement of right-of-way not exceeding 60 meters in width for government infrastructure projects, including power and transmission lines, under Section 112 of Commonwealth Act No. 141. Compensation is generally limited to the value of affected improvements, but consequential damages may be awarded for remaining areas rendered unusable.