National Transmission Corporation v. Untiveros
REITERATIONFacts
The Antecedents: Respondents, owners of seven parcels of land in Batangas City, filed a complaint for inverse condemnation against the National Transmission Corporation (TRANSCO) under Rule 67 of the Rules of Court and Republic Act No. 10752. They alleged that TRANSCO encroached upon their properties in early 2017, removed structures and trees, and asserted ownership, claiming it was necessary for improving the electricity transmission system. The respondents sought to compel TRANSCO to exercise its power of eminent domain and pay just compensation. Procedural History: The Regional Trial Court (RTC) granted the respondents' motion to require TRANSCO to deposit provisional just compensation equivalent to 100% of the zonal valuation, amounting to PHP 138,448,000.00. TRANSCO subsequently filed motions to archive the case and to implead the National Grid Corporation of the Philippines (NGCP) as an indispensable party, arguing that NGCP assumed the operation and maintenance of the transmission system. The RTC denied both motions, finding that NGCP was not an indispensable party and that the ground for archiving was not met. TRANSCO's motion for reconsideration was also denied. Aggrieved, TRANSCO filed a Petition for Certiorari before the Court of Appeals (CA). The Petition: The CA dismissed TRANSCO's Petition for Certiorari on procedural grounds, including belated filing, failure to pay docket fees in full, omission to serve copies to the adverse party, and failure to attach certified true copies of the RTC resolutions. TRANSCO's motion for reconsideration was denied. Hence, TRANSCO filed a Petition for Review on Certiorari before the Supreme Court, arguing that the CA erred in strictly applying procedural rules and seeking leniency due to exceptional circumstances, including the COVID-19 pandemic, and highlighting the substantial merit of its claim that NGCP is an indispensable party.
Issue(s)
Whether the Court of Appeals erred in strictly applying the procedural rules in dismissing TRANSCO's Petition for Certiorari. Whether the Regional Trial Court committed grave abuse of discretion in denying TRANSCO's Motion to Archive. Whether the Regional Trial Court committed grave abuse of discretion in denying TRANSCO's Motion for Leave to Implead Indispensable Party and whether the National Grid Corporation of the Philippines (NGCP) is an indispensable party in the inverse condemnation case.
Ruling
The Petition is GRANTED. The Resolutions of the Court of Appeals are REVERSED. The case is REMANDED to the court of origin for the inclusion of the National Grid Corporation of the Philippines as an indispensable party, and to proceed with the case with dispatch.
Ratio Decidendi
On the issue of whether the Court of Appeals erred in strictly applying procedural rules: The Supreme Court found merit in the petition, acknowledging that while adherence to procedural rules is paramount, it may relax these rules for compelling reasons to serve substantive justice. Considering the exceptional circumstances brought about by the pandemic and the substantial merits of the case, the Court deemed it proper to relax the rules and resolve the case on its merits. The Court emphasized that strict adherence to procedural rules should not hinder the administration of justice, especially when circumstances warrant the application of equity jurisdiction to alleviate a litigant from disproportionate injustice due to procedural lapses. On the denial of the Motion to Archive: The Court affirmed the RTC's denial of TRANSCO's Motion to Archive. Citing OCA Circular No. 89-2004, which reiterates guidelines for archiving cases, the Court noted that the ground raised by TRANSCO – the pending inclusion of an indispensable party – is not among the instances that warrant the archiving of civil cases. Therefore, the RTC's observation that the ground was not meritorious was concurred with by the Supreme Court. On the denial of the Motion for Leave to Implead Indispensable Party and whether NGCP is an indispensable party: The Court found that NGCP is indeed an indispensable party. An indispensable party is one whose legal presence is so necessary that the action cannot be finally determined without them, as their interests are so bound up with the other parties. The Court explained that an action for inverse condemnation is a recourse to recover the value of property taken by the government without formal expropriation, anchored on the constitutional prohibition against taking private property without just compensation. The entity ultimately accountable for the taking must be the defendant. In this case, the encroachment occurred in 2017, after the Concession Agreement transferred the operation and maintenance of the transmission assets to NGCP on January 15, 2009. Under the Concession Agreement and Republic Act No. 9511, NGCP assumed responsibilities as if it were the owner of the transmission assets and was granted the authority to exercise the power of eminent domain. Since the cause of action accrued after the commencement date, NGCP is accountable. The joinder of an indispensable party is a mandatory and jurisdictional requirement, and its absence renders all subsequent rulings and actions of the court void. Therefore, the case must be remanded for the inclusion of NGCP.
Main Doctrine
The National Grid Corporation of the Philippines (NGCP) is an indispensable party in an inverse condemnation case involving claims related to transmission lines that arose after the commencement date of the Concession Agreement, as NGCP assumed the operation and maintenance of the transmission assets and possesses the authority to exercise the power of eminent domain.