Heirs of Dimao v. National Grid Corporation
REITERATIONFacts
The Antecedents: In 1978, the National Power Corporation (NPC) constructed the Baloi-Agus 2 138kV Transmission Line (BATL). Following the Electric Power Industry Reform Act of 2001 (R.A. No. 9136), the National Transmission Corporation (TRANSCO) assumed the NPC's transmission functions. Subsequently, the National Grid Corporation of the Philippines (NGCP) took over the management, operation, and maintenance of TRANSCO's nationwide transmission business. To fulfill its mandate, NGCP required access to clear vegetation and hazardous improvements within the transmission line right-of-way corridors. This led to the institution of expropriation proceedings concerning a 11,640 square meter portion of Lot No. 104 in Lanao del Norte, registered in the name of the late Raisa A. Dimao. Procedural History: NGCP initiated expropriation proceedings on August 15, 2014, depositing P1,756,400.00 as initial compensation. A writ of possession was issued on September 2, 2014, granting NGCP entry to the property. The Heirs of Raisa Dimao (petitioners) filed an Answer on October 1, 2014, demanding P113,552,000.00 in just compensation. After settlement failed, a panel of commissioners was appointed. The Regional Trial Court (RTC) of Lanao Del Norte, Branch 4, ruled on April 16, 2018, granting the expropriation and awarding P49,622,050.00 in just compensation, directing NGCP to deposit the deficiency. NGCP's motion for partial reconsideration was denied. NGCP appealed to the Court of Appeals (CA) under Rule 41. The Appeal: The CA, in its July 26, 2019 Decision and August 4, 2020 Resolution, affirmed the expropriation right but deleted the award of additional just compensation. The CA reasoned that the property was subject to a 60-meter easement of right-of-way under Commonwealth Act (C.A.) No. 141, and petitioners could only claim compensation for improvements. However, it noted that the taking occurred in 1978, before petitioners' predecessor-in-interest acquired title in 2012, and found no evidentiary basis for improvements existing in 1978. The petitioners are now before the Supreme Court, arguing that Section 112 of C.A. No. 141 is invalid and unconstitutional, superseded by R.A. No. 8974 and R.A. No. 10752, and that the taking occurred in 2014. They also claim entitlement to compensation based on their alleged prior possession and the valuation of improvements.
Issue(s)
Whether petitioners are entitled to just compensation for the expropriated property. Whether the taking of the property occurred in 1978 or 2014. Whether Section 112 of Commonwealth Act No. 141 is applicable and constitutional. Whether Republic Acts No. 8974 and 10752 superseded Section 112 of Commonwealth Act No. 141. Whether petitioners are entitled to compensation for improvements on the property.
Ruling
The petition is denied. The Court affirmed the Court of Appeals' decision with modification, ordering petitioners to return the amount of ₱1,756,400.00 to respondent.
Ratio Decidendi
On the entitlement to just compensation: The Court held that petitioners are not entitled to just compensation. The Baloi-Agus 2 138kV Transmission Line (BATL) was constructed in 1978, but petitioners' predecessor-in-interest, Raisa Dimao, obtained a free patent over the subject property only on October 2, 2012. At the time of construction, the government was the owner. Furthermore, Dimao's application for a free patent acknowledged the public nature of the property, and such patents are subject to a 60-meter easement of right-of-way under Section 112 of Commonwealth Act (C.A.) No. 141. Petitioners failed to present proof of ownership or possession prior to 1978, and their prolonged silence regarding the NPC's entry in 1978 casts doubt on their claims. The Court also noted that the portion traversed by the BATL (30 meters) is within the 60-meter easement. On the reckoning point for the date of taking: The Court affirmed that the taking of the subject property occurred in 1978, during the construction of the BATL. This was supported by petitioners' own demand for legal interest and rents from 1978, the stipulation of parties during pre-trial, and the confirmation in Commissioner Salomon's Report and the RTC Decision. The requisites of taking, as established in jurisprudence, were met: entry into private property, more than momentary period, under color of legal authority (even if later formalized), devotion to public use, and ousting the owner of beneficial enjoyment. The Court cited cases like National Transmission Corporation v. Oroville Development Corporation and National Power Corp. v. Vda. De Capin where the construction of power lines was deemed the date of taking. On the applicability and constitutionality of Section 112 of C.A. No. 141: The Court upheld the applicability of Section 112 of C.A. No. 141, which subjects lands granted through free patents to a 60-meter easement of right-of-way for public and quasi-public projects, with damages only for improvements. The Court found that the 30-meter width of the BATL corridor was within this easement. Petitioners' collateral attack on the validity and constitutionality of Section 112 was disallowed, as laws are presumed valid unless annulled in a direct proceeding. The Court also clarified that R.A. No. 8974 and R.A. No. 10752 did not repeal Section 112 by implication, as repeals by implication are disfavored and efforts should be made to harmonize laws. Section 4(b) of R.A. No. 10752 explicitly recognizes the provisions of C.A. No. 141 regarding acquisition of right-of-way on patent lands. On whether Republic Acts No. 8974 and 10752 superseded Section 112 of Commonwealth Act No. 141 AND On the return of the deposited amount (Solutio Indebiti): The Court clarified that R.A. No. 8974 and R.A. No. 10752 did not repeal Section 112 by implication, as repeals by implication are disfavored and efforts should be made to harmonize laws. Section 4(b) of R.A. No. 10752 explicitly recognizes the provisions of C.A. No. 141 regarding acquisition of right-of-way on patent lands. The Court applied the principle of solutio indebiti (Article 2154 of the Civil Code). Respondent deposited ₱1,756,400.00 under the mistaken belief that petitioners were entitled to it. However, petitioners had no right to this amount because they were not the registered owners at the time of taking and the property was subject to an easement. Therefore, petitioners were ordered to return the deposited amount to respondent, as no one should be unjustly enriched at another's expense. On compensation for improvements: The Court found no evidentiary basis for awarding compensation for improvements. The CA correctly noted that the evidence on record pertained to improvements planted after the filing of the complaint, not those existing in 1978. Furthermore, the Court gave credence to reports suggesting that trees were planted compactly and recently within the right-of-way corridor, indicating a malicious attempt by petitioners to earn from improvements. Even if compensation for improvements were considered, the lack of proof of their existence in 1978 barred such an award.
Main Doctrine
Petitioners, who acquired title to the property after the construction of the transmission lines and the imposition of an easement of right-of-way, are not entitled to just compensation for the expropriated portion. The taking occurred in 1978, and their predecessor-in-interest acknowledged the public nature of the property by applying for a free patent, which is subject to a 60-meter easement under Commonwealth Act No. 141. Furthermore, the initial deposit made by the respondent was unduly delivered, giving rise to an obligation to return the amount under the principle of solutio indebiti.