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PHILIPPINE SUPREME COURT DECISIONS

SECOND DIVISION

[G.R. No. 152436. June 20, 2003.]

NATIONAL POWER CORPORATION, Petitioner, v. SPOUSES IGMEDIO and LIWAYWAY CHIONG and the HEIRS OF AGRIFINA ANGELES, represented by FRANCISCO MERCURIO, Respondents.

D E C I S I O N


QUISUMBING, J.:


This is a petition for review of the decision 1 of the Court of Appeals, dated October 26, 2001, in CA-G.R. SP No. 60716, affirming the Order of the Regional Trial Court (RTC) of Iba, Zambales, Branch 71, dated June 7, 2000 in Civil Case No. 1442-1. The trial court directed petitioner National Power Corporation (NPC) to pay the value of the land expropriated from respondents herein for use in NPC’s Northwestern Luzon Transmission Line Project. Likewise assailed in this petition is the resolution 2 of the appellate court, dated February 26, 2002, denying herein petitioner’s motion for reconsideration.chanrob1es virtua1 1aw 1ibrary

The undisputed facts of this case are as follows:chanrob1es virtual 1aw library

Petitioner is a government owned and controlled corporation, created and existing pursuant to Republic Act No. 6395, 3 as amended, for the purpose of undertaking the development of hydroelectric power, the production of electrical power from any source, particularly by constructing, operating, and maintaining power plants, auxiliary plants, dams, reservoirs, pipes, mains, transmission lines, power stations, and similar works to tap the power generated from any river, creek, lake, spring, or waterfall in the country and supplying such power to the inhabitants thereof. In order to carry out said purposes, NPC is authorized to exercise the power of eminent domain.

On February 19, 1998, NPC filed a complaint for eminent domain with the RTC of Iba, Zambales. It sought the acquisition of an easement of right-of-way and certain portions of agricultural lands owned by Igmedio and Liwayway Chiong and the Heirs of Agrifina 4 Angeles, as represented by Francisco Mercurio, to be used in its Northwestern Luzon Transmission Line Project. The complaint, which was docketed as Civil Case No. 1442-I, prayed for the issuance of a writ of possession and an order of expropriation, the appointment of three (3) commissioners to determine the just compensation, and to adjudge NPC as having a lawful right to enter, take, and acquire an easement of right-of-way over portions of the properties owned by herein respondents.

In their answer, the Heirs of Agrifina Angeles did not dispute the purpose of NPC in instituting the expropriation proceedings. However, they pointed out that NPC had already entered and taken possession of a portion of their realty with an area of 4,000 square meters, more or less (Lot "A") and wanted to occupy another 4,000 square meters of the adjacent property (Lot "B"). Respondents averred that the fair market value for both properties was P1,100.00 per square meter or a total of P8,800,000.00 and prayed that the trial court direct NPC to pay them said amount.

On March 31, 1998, NPC filed an ex parte motion for the issuance of a writ of possession, which the trial court granted.

At the pre-trial conference, the parties agreed that the controversy would be limited to determining the actual land area taken by NPC and the just compensation to be paid by petitioner.chanrob1es virtua1 1aw 1ibrary

On September 28, 1999, the trial court appointed as commissioners, Atty. Henry P. Alog, Atty. Regalado Castillo, and Ms. Roselyn B. Ragadio, Legal Researcher of the trial court, to determine the fair market value of the land, as well as the total area taken by NPC from respondents.

On March 9, 2000, Atty. Castillo and Ms. Ragadio submitted their report to the court finding that the property classified as "unirrigated riceland shall have a fair market value of P500.00 per square meter" 5 considering that "the property is situated at Baytan, Babali, Lomboy, Sta. Cruz, Zambales which is more than 900 meters from the town proper." 6

On May 5, 2000, Atty. Alog submitted his report recommending that NPC pay the Heirs of Agrifina Angeles an easement fee of P20,957.88 and the Spouses Chiong be paid total easement fees of P9,187.05. 7 The affected properties of the Heirs of Agrifina Angeles were assessed by Atty. Alog to have a fair market value of P22.50 per square meter, while those of the Spouses Chiong were assigned a fair market value of P15.75 per square meter. 8

After considering the reports of the Commissioners, the trial court on June 7, 2000 decreed as follows:chanrob1es virtual 1aw library

The Commissioner’s Report dated March 9, 2000 filed by Commissioner Roselyn B. Ragadio and Atty. Regalado Castillo is given due course.

WHEREFORE, the plaintiff is directed to pay the defendants Mercurio their land containing an area of 4,000 square meters at P500.00 per square meter and an interest of six (6%) percent per annum from April 16, 1998 until fully paid.

SO ORDERED. 9

Dissatisfied, NPC filed a special civil action for certiorari with the appellate court, docketed as CA-G.R. SP No. 60716. NPC averred that the trial court committed grave abuse of discretion amounting to excess or want of jurisdiction when it: (a) directed NPC to pay just compensation for the land taken without first issuing an order of expropriation; (b) adopted the compensation recommended by the two commissioners without a hearing; and (c) directed petitioner to pay the full market value of the property instead of a mere easement fee.chanrob1es virtua1 1aw 1ibrary

On October 26, 2001, the appellate court decided CA-G.R. SP No. 60716 as follows:chanrob1es virtual 1aw library

WHEREFORE, in view of the foregoing, the instant petition is hereby DISMISSED for lack of merit.

SO ORDERED. 10

In holding that NPC was not entitled to a writ of certiorari, the Court of Appeals found that the trial court did not commit a grave abuse of discretion when it failed to issue an expropriation order. The appellate court pointed out that as early as the pre-trial, respondents did not question NPC’s right to expropriate their properties. Hence, the only matter to be addressed by the trial court was the amount of just compensation to be paid. Second, NPC could not claim that it was denied due process because the trial court issued the order without first conducting a hearing on the commissioners’ report. The court a quo noted that formal-type hearings are not necessary in expropriation proceedings, as long as the parties are afforded a fair and reasonable opportunity to be heard before the order to pay compensation is issued. NPC was afforded ample time or opportunity to object to the commissioners’ report before said order was issued. This it failed to do. It likewise failed to move for reconsideration or to appeal the trial court’s order. Hence, NPC was now estopped from claiming that it had been denied due process. The appellate court likewise found the assessed value of P500.00 per square meter to be fair as opposed to the NPC-appointed commissioner’s valuation of P22.50 per square meter. Finally, the CA held that as NPC failed to appeal the trial court’s order, certiorari could not be a substitute for a lost or lapsed right to appeal.

NPC moved for reconsideration, but this was denied by the appellate court in its resolution of February 26, 2002.

Hence, the instant recourse to this Court, with petitioner submitting the following issues for our resolution:chanrob1es virtual 1aw library

I


WHETHER OR NOT THE COURT OF APPEALS COMMITTED A GRAVE ERROR IN UPHOLDING THE DECISION OF THE COURT A QUO IN DIRECTING THE PETITIONER TO PAY THE COMPENSATION FOR THE LAND SOUGHT TO BE EXPROPRIATED WITHOUT FIRST ORDERING ITS EXPROPRIATION.

II


WHETHER OR NOT THE COURT OF APPEALS COMMITTED A GRAVE ERROR WHEN IT UPHELD THE DECISION OF THE TRIAL COURT ADOPTING IN TOTO THE UNSUBSTANTIATED REPORT OF THE APPOINTED COMMISSIONERS MS. REGARDIO AND ATTY. CASTILLO, WITHOUT CONSIDERING THE THIRD COMMISSIONER, ATTY. ALOG AND WITHOUT CONDUCTING A HEARING.chanrob1es virtua1 1aw 1ibrary

III


WHETHER OR NOT THE COURT OF APPEALS COMMITTED A GRAVE ERROR WHEN IT UPHELD THE DECISION OF THE TRIAL COURT IN DIRECTING PETITIONER TO PAY THE FULL MARKET VALUE OF THE LAND INSTEAD OF THE EASEMENT FEE AS PRAYED FOR IN THE COMPLAINT AND PROVIDED UNDER REPUBLIC ACT NO. 6395 AS AMENDED, WHICH IS OTHERWISE KNOWN AS THE REVISED NPC CHARTER. 11

In sum, we find that the pertinent issues before us are the following: (1) whether petitioner NPC was deprived of due process; and (2) whether the Court of Appeals erred in sustaining the Order of the RTC of Iba, Zambales, dated June 7, 2000, by dismissing NPC’s petition for certiorari.

On the first issue, petitioner contends that the appellate court gravely erred in affirming the trial court’s order directing it to pay the respondent the compensation recommended by the majority report of the commissioners. Petitioner points out that there were two reports submitted by the commissioners, with conflicting findings as to the market values of the expropriated properties. It insists that, given said situation, the trial court should have conducted hearings on the two reports, as required by Rule 67, Sections 7 12 and 8 13 of the 1997 Rules of Civil Procedure, before accepting the majority report. In failing to do so, the trial court not only blatantly violated the Rules; it likewise denied petitioner due process, as the latter was not afforded a chance to raise its objections to the majority report in a hearing held for that purpose. It was, thus, grievous error for the appellate court to have sustained the trial court.

The respondents, Heirs of Agrifina Angeles, point out that the petitioner’s contentions are without basis, since it was given ample time and/or opportunity by the trial court to object to the questioned order. The respondents assert that the petitioner, had it been so minded, could have moved for reconsideration or filed an appeal therefrom within the reglementary period, but it did not. Instead, it opted for the wrong remedy by filing a special civil action for certiorari with the Court of Appeals, after the period to appeal had lapsed. Having made an erroneous choice in its remedies, petitioner cannot now come to this Tribunal crying that it was denied due process.chanrob1es virtua1 1aw 1ibrary

On record we find that the majority report of Commissioners Ragadio and Atty. Castillo was submitted to the trial court on March 9, 2000, while the minority report of Commissioner Atty. Alog, was submitted on May 5, 2000. It is not disputed that petitioner was furnished copies of said reports. After petitioner NPC obtained its copy of the majority report, it did nothing. The records do not disclose any objection thereto or any comment opposing the findings and recommendations of the two commissioners in their report.

The majority report was submitted on March 9, 2000. The trial court issued its order adopting the majority report on June 7, 2000. Clearly, petitioner had ample time to make its objections or ventilate its opposition to the majority report before the trial court. A formal hearing or trial was not required for the petitioner to avail of its opportunity to object and oppose the majority report. Petitioner could have filed a motion raising all possible grounds for objecting to the findings and recommendations of the commissioners. It could have moved the trial court to remand the report to the commissioners for additional facts. Or it could have moved to expunge the majority report, for reasons petitioner could muster. Petitioner, however, failed to seize the opportunity to register its opposition or objections before the trial court. It is a bit too late in the day now to be asking for a hearing on the pretext that it had not been afforded due process.

The elements of due process are well established, viz:chanrob1es virtual 1aw library

(1) There must be a court or tribunal clothed with judicial power to hear and determine the matter before it;

(2) Jurisdiction must be lawfully acquired over the person of the defendant or property which is the subject of the proceedings;

(3) The defendant must be given an opportunity to be heard; and

(4) Judgment must be rendered upon lawful hearing. 14

What is repugnant to due process is the denial of the opportunity to be heard. 15 As pointed out that the petitioner was afforded this opportunity is beyond question. Having failed to make use of this opportunity, the petitioner cannot justifiably claim now that its right to due process has been violated.

The duty of the court in considering the commissioners’ report is to satisfy itself that just compensation will be made to the defendant by its final judgment in the matter, and in order to fulfill its duty in this respect, the court will be obliged to exercise its discretion in dealing with the report as the particular circumstances of the case may require. 16 Rule 67, Section 8, of the 1997 Rules of Civil Procedure clearly shows that the trial court has the discretion to act upon the commissioners’ report in any of the following ways: (1) it may accept the same and render judgment therewith; or (2) for cause shown, it may: [a] recommit the report to the commissioners for further report of facts; or [b] set aside the report and appoint new commissioners; or [c] accept the report in part and reject it in part; and it may make such order or render such judgment as shall secure to the plaintiff the property essential to the exercise of his right of expropriation, and to the defendant just compensation for the property so taken. 17

From March 9, 2000 to June 7, 2000, petitioner did not object to the majority report. On record, it did not, at the time, signify its opposition thereto, or specify that not all of the evidence, pertinent and material thereto, had been considered by the commissioners or presented to the court. The option of recommitting the report of the commissioners, which petitioner now claims, was not ventilated before the trial court. No claim appears on record that fraud or prejudice tainted the majority report. When it still had the opportunity below, herein petitioner did not challenge the majority report on the ground that the commissioners concerned disregarded the evidence before them, or used an improper rule of assessment, in their submission to the trial court. As previously held, where there was no opposition filed to the Commissioners’ Report in the lower court, the findings in said Report will not be disturbed. 18 Absent the objections raised by the petitioner, it became the duty of the trial court to make a final order and judgment in which the proper award will be made and thus end the controversy.chanrob1es virtua1 law library

Moreover, after its receipt of the trial court’s order dated June 7, 2000, which decided the issue of compensation as delineated at the pre-trial, petitioner resorted to a special civil action, rather than an appeal before the Court of Appeals. As aptly pointed out, petitioner could not utilize certiorari as a substitute for its lost right of appeal. We also agree that the trial court did not abuse its discretion in ruling on the very issue of just compensation for the land taken, as delineated by the party themselves at the pre-trial.

Nevertheless, we shall now take up the matter of valuation and just compensation if only to avoid any further delay in its resolution.

The fair market value of the 4,000 square meters occupied by the petitioner was fixed by the trial court in its order of June 7, 2000 at P500.00 per square meter. The appellate court affirmed the said valuation.

In contesting the valuation, petitioner argues now that the Court of Appeals gravely erred in upholding the RTC order requiring it to pay the full market value of the expropriated properties, notwithstanding the fact that the petitioner was only acquiring an easement of right-of-way. The petitioner points out under Section 3-A 19 of RA No. 6395, where only an easement of right-of-way shall be acquired, with the principal purpose for which the land is actually devoted is unimpaired, the compensation should not exceed ten percent (10%) of the market value of the property. Thus, in sustaining the order of the lower court directing the petitioner to pay the respondents the full recommended value of their properties, the Court of Appeals completely violated and disregarded RA No. 6395, as amended.

Petitioner averred in its complaint in Civil Case No. 1442-I, that it sought to acquire "an easement of right-of-way" over portions of the properties owned by respondents, for a total of 10,950 square meters. 20 However, a perusal of its complaint shows that petitioner also stated that it would erect structures for its transmission lines on portions of the expropriated property. In other words, the expropriation was not to be limited for the purpose of "easement of right-of-way." In fact, in their Answer, the Heirs of Agrifina Angeles, alleged that petitioner had actually occupied an area of 4,000 square meters wherein it constructed structures for its transmission lines and was seeking to occupy another 4,000 square meters. 21 Petitioner failed to controvert this material allegation. Justifiably, the market value of these 4,000 square meters allegedly occupied by the petitioner has became the very crux of the present case.chanrob1es virtua1 1aw 1ibrary

In eminent domain or expropriation proceedings, the general rule is that the just compensation to which the owner of condemned property is entitled to is the market value. 22 Market value is "that sum of money which a person desires but not compelled to buy, and an owner willing but not compelled to sell, would agree on as a price to be given and received therefor." 23 The aforementioned rule, however, is modified where only a part of a certain property is expropriated. In such a case the owner is not restricted to compensation for the portion actually taken. In addition to the market value of the portion taken, he is also entitled to recover for the consequential damage, if any, to the remaining part of the property. At the same time, from the total compensation must be deducted the value of the consequential benefits. 24

In fixing the valuation at P500.00 per square meter, the Court of Appeals noted that the trial court had considered the reports of the commissioners and the proofs submitted by the parties. This included the fair market value of P1,100.00 per square meter proferred by the respondents. 25 This valuation by owners of the property may not be binding upon the petitioner or the court, although it should at least set a ceiling price for the compensation to be awarded. 26 The trial court found that the parcels of land sought to be expropriated are agricultural land, with minimal improvements. It is the nature and character of the land at the time of its taking that is the principal criterion to determine just compensation to the landowner. 27 Hence, the trial court accepted not the owner’s valuation of P1,100 per square meter but only P500 as recommended in the majority report of the commissioners.

As to the price of P22.50 per square meter recommended by the minority report of Commissioner Atty. Alog, the Court of Appeals found it unconscionably inadequate. It was rightly rejected by the trial court.

In finding that the trial court did not abuse its authority in evaluating the evidence and the reports placed before it nor did it misapply the rules governing fair valuation, the Court of Appeals found the majority report’s valuation of P500 per square meter to be fair. Said factual finding of the Court of Appeals, absent any showing that the valuation is exorbitant or otherwise unjustified, is binding on the parties as well as this Court.

WHEREFORE, the instant petition is DENIED for lack of merit. The decision of the Court of Appeals, dated October 26, 2001 as well as its resolution of February 26, 2002, denying the petitioner’s motion for reconsideration, in CA-G.R. SP No. 60716 are AFFIRMED. Costs against petitioner.chanrob1es virtua1 1aw 1ibrary

SO ORDERED.

Bellosillo and Callejo, Sr., JJ., concur.

Austria-Martinez, J., on official leave.

Endnotes:



1. CA Rollo, pp. 113–124. Penned by Tria Tirona, J., with Abesamis and Barcelona, JJ., concurring.

2. Id. at 184.

3. Entitled "An Act Revising the Charter of the National Power Corporation."cralaw virtua1aw library

4. Also spelled as "Agripina" in other part of the records.

5. Supra, note 1 at 61.

6. Id. at 62.

7. Id. at 69–70.

8. Ibid.

9. Id. at 23.

10. Id. at 123.

11. Rollo, pp. 18–19.

12. SEC. 7. Report by commissioners and judgment thereupon. — The court may order the commissioners to report when any particular portion of the real estate shall have been passed upon by them, and may render judgment upon such partial report, and direct the commissioners to proceed with their work as to subsequent portions of the property sought to be expropriated, and may from time to time so deal with such property. The commissioners shall make a full and accurate report to the court of all their proceedings, and such proceedings shall not be effectual until the court shall have accepted their report and rendered judgment in accordance with their recommendations. Except as otherwise expressly ordered by the court, such report shall be filed within sixty (60) days from the date the commissioners were notified of their appointment, which time may be extended in the discretion of the court. Upon the filing of such report, the clerk of court shall serve copies thereof on all interested parties, with notice that they are allowed ten (10) days from which to file objections to the findings of the report, if they so desire.

13. SEC. 8. Action upon commissioners’ report. — Upon the expiration of the period of ten (10) days referred to in the preceding section, or even before the expiration of such period but after all the interested parties have filed their objections to the report or their statement of agreement therewith, the court may, after hearing, accept the report and render judgment in accordance therewith; or for cause shown, it may recommit the same to the commissioners for further report of facts; or it may set aside the report and appoint new commissioners; or it may accept the report in part and reject it in part; and it may make such order or render such judgment as shall secure to the plaintiff the property essential to the exercise of his right of expropriation; and to the defendant just compensation for the property so taken.

14. Banco Español-Filipino v. Palanca, 37 Phil. 921, 934 (1918).

15. Garments and Textile Export Board v. Court of Appeals, 335 Phil. 723, 765 (1997) citing Korean Airlines Co., Ltd. v. Court of Appeals, G.R. No. 114061, 23 August 1995, 247 SCRA 599, Bermejo v. Barrios, G.R. No. L-23614, 27 February 1970, 31 SCRA 764, and Caltex Phil., Inc. v. Castillo, G.R. No. L-24657, 27 November 1967, 21 SCRA 1071.

16. Manila Railroad Co. v. Velasquez, 32 Phil. 286, 298 (1915).

17. City of Manila v. Battle, 27 Phil. 34, 38 (1914).

18. See Benguet Consolidated, Inc. v. Republic, G.R. No. L-71412, 15 August 1986, 143 SCRA 466, 477478.

19. SEC. 3-A. In acquiring private property or private property rights through expropriation proceedings where the land or portion thereof will be traversed by the transmission lines, only a right-of-way easement thereon shall be acquired when the principal purpose for which such land is actually devoted will not be impaired, and where the land itself or a portion thereof will be needed for the projects or works, such land or portion thereof as necessary shall be acquired.

In determining the just compensation of the property or property sought to be acquired through expropriation proceedings, the same shall —

(a) With respect to the acquired land or portion thereof, not exceed the market value declared by the owner or administrator or anyone having legal interest in the property, or such market value as determined by the assessor, whichever is lower.

(b) With respect to the acquired right-of-way easement over the land or portion thereof, not exceed ten percent (10%) of the market value declared by the owner or administrator or anyone having legal interest in the property, or such market value as determined by the assessor, whichever is lower.

In addition to the just compensation for easement of right-of-way, the owner of the land or owner of the improvement, as the case may be, shall be compensated for the improvements actually damaged by the construction and maintenance of the transmission lines, in an amount not exceeding the market value thereof as declared by the owner or administrator, or anyone having legal interest in the property, or such market value as determined by the assessor whichever is lower; Provided, That in cases any buildings, houses, and similar structures are actually affected by the right-of-way for the transmission lines, their transfer, if feasible, shall be effected at the expense of the Corporation: Provided, further, That such market value prevailing at the time the Corporation gives notice to the landowner or administrator or anyone having legal interest in the property, to the effect that his land or portion thereof is needed for its projects or works shall be used as basis to determine the just compensation therefor.

20. CA Rollo, p. 26.

21. Id. at 36.

22. Metropolitan Water District v. Director of Lands, 57 Phil. 293, 294–295 (1932); Municipality of Tarlac v. Besa, 55 Phil 423, 425 (1930); Manila Railroad Co. v. Caligsihan, 40 Phil. 326, 328–329 (1919); Manila Railroad Co. v. Velasquez, supra, at 314; City of Manila v. Corrales, 32 Phil. 85, 92 (1915); City of Manila v. Estrada, 25 Phil. 208, 214 (1913); Manila Railway Co. v. Fabie, 17 Phil. 206, 208 (1910).

23. City of Manila v. Estrada, supra, at 215.

24. Republic v. Lara, 96 Phil. 170, 177–178 (1954).

25. CA Rollo, p. 36.

26. Republic v. Narciso, G.R. No. L-6594, 18 May 1956 (Unreported). See 99 Phil. 1031 (1956) for synopsis of the decision.

27. National Power Corporation v. Henson, G.R. No. 129998, 29 December 1998, 300 SCRA 751, 756.

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