Jella Capadocia

41. Napocor vs Heirs of Sangkay (Inverse Condemnation) GR. 165828

FACTS: National Power Corporation (NPC) undertook the Agus River Hydroelectric
Power Plant Project to generate electricity for Mindanao. It included the construction
of several underground tunnels to be used in diverting the water flow from the Agus
River to the hydroelectric plants.

On 1997, Respondents sued NPC for recovery of damages of the property and a prayer
for just compensation. They alleged that the tunnel deprived them of the agricultural,
commercial, industrial and residential value of their land; and that their land had also
become an unsafe place for habitation, forcing them and their workers to relocate to
safer grounds.

ISSUE: Whether the Heirs of Sangkay have the right to just compensation

RULING: Just compensation is the full and fair equivalent of the property taken from
its owner by the expropriator. It has the objective to recover the value of property taken
in fact by the governmental defendant, even though no formal exercise of the power of
eminent domain has been attempted by the taking agency.

The underground tunnels impose limitations on respondents’ use of the property for an
indefinite period and deprive them of its ordinary use. Hence, respondents are clearly
entitled to the payment of just compensation.

Notwithstanding the fact that petitioner only occupies the sub-terrain portion, it is
liable to pay not merely an easement fee but rather the full compensation for land. It is
settled that the taking of private property for public use, to be compensable, need not
be an actual physical taking or appropriation. This is so because in this case, the nature
of the easement practically deprives the owners of its normal beneficial use.
Compensable taking includes destruction, restriction, diminution, or interruption of
the rights of ownership or of the common and necessary use and enjoyment of the
property in a lawful manner, lessening or destroying its value.

42. Meralco v Pineda 206 SCRA 196 (1992)

FACTS: MERALCO wanted to construct a 230 KV Transmission line from Barrio Malaya to Tower at
Pililla, Rizal in the reat estate property of Teofilo Arayon Sr., Gil de Guzman, Lucito Santiago and Teresa
Bautista. Parties attempt negotiations but failed to reach an agreement and offers to pay compensation.
Respondents then filed a complaint for eminent domain with the trial court and won the case granting
them rights to expropriate the property needed. Unfortunately, the petitioner sold to NAPOCOR its power
plant and transmission lines including the property disputed herein. The court then ordered the appraisal
of the land in answer for the motion for withdrawal of deposit which respondents were entitled to.
However, the apprisal by the commissioners were never completed due to the suspension when
petitioners filed a Motion to Dismiss due to the said sale to NAPOCOR. Later, respondents file another
motion for for payment and the court granted them another sum for the compensation. Petitioner then
filed a Motion for Reconsideration that at this stage the respondents are not yet entitled to payment of just
compensation as there is no appraisal yet and that court, upon awarding a fraction of sum, based it only on
 a witness of a credible realestate broker instead of employing the assistance of three commissioners to
determine just compensation.

ISSUE: W/N the employment of three commissioners in the ascertainment of just compensat
ion is dispensable

RULING: The judge's act of determining and ordering the payment of just compensation without the
assistance of a Board of Commissioners is a flagrant violation of MERALCO's constitutional right to
due process and is a gross violation of the mandated rule established by the Revised Rules of Court.In an
expropriation case where the principal issue is the determination of just compensation, a trial before the
Commissioners is indispensable to allow the parties to present evidence on the issue of just
compensation. The appointment of at least 3 competent persons as commissioners to ascertain just
compensation for the property sought to be taken is a mandatory requirement in expropriation cases.
While it is true that the findings of commissioners may be disregarded and the court may substitute its
own estimate of the value, the latter may only do so for valid reasons:

1. where the Commissioners have applied illegal principles to the evidence submitted to them;
2. where they have disregarded a clear preponderance of evidence;
3. where the amount allowed is either grossly inadequate or excessive.

Thus, trial with the aid of the commissioners is a substantial right that may not be done away with
capriciously or for no reason at all. Moreover, in such instances, where the report of the commissioners
may be disregarded, the trial court may make its own estimate of value from competent evidence that may
be gathered from the record.

43. NPC v. Henson GR NO. 129998

FACTS:
On 21 March 1990, the National Power Corporation (NAPOCOR) originally instituted
with the Regional Trial Court (RTC), Third Judicial District, Branch 46, San Fernando,
Pampanga a complaint for eminent domain, later amended on 11 October 1990, for the
taking for public use of 5 parcels of land, owned or claimed by Lourdes Henson
(married to Eugenio Galvez), Josefina Henson (married to Petronio Katigbak, Jesusa
Henson, Corazon Henson (married to Jose Ricafort), Alfredo Tanchiatco, Bienvenido
David, Maria Bondoc Capili (married to Romeo Capili), and Miguel Manoloto, with a
total aggregate area of 58,311 square meters, for the expansion of the NAPOCOR
Mexico Sub-Station.

On 28 March 1990, NAPOCOR filed an urgent motion to fix the provisional value of the
subject parcels of land. On 20 April 1990, Henson, et. al. filed a motion to dismiss. They
did not challenge NAPOCOR's right to condemn their property, but declared that the
fair market value of their property was from P180.00 to P250.00 per square meter.
On 10 July 1990, the trial court denied Henson, et. al.'s motion to dismiss, but the court
did not declare that NAPOCOR had a lawful right to take the property sought to be
expropriated. However, the court fixed the provisional value of the land at P100.00 per
square meter, for a total area of 63,220 square meters of Henson, et. al.'s property, to
be deposited with the Provisional Treasurer of Pampanga. NAPOCOR deposited the
amount on 29 August 1990.
On 5 September 1990, the trial court issued a writ of possession in favor of NAPOCOR,
and, on 11 September 1990, the court's deputy sheriff placed NAPOCOR in possession
of the subject land. On 22 November 1990, and 20 December 1990, the trial court
granted the motions of Henson, et. al. to withdraw the deposit made by NAPOCOR of
the provisional value of their property amounting to P5,831,100.00, with a balance of
P690,900.00, remaining with the Provisional Treasurer of Pampanga.
On 5 April 1991, the trial court issued an order appointing 3 commissioners to aid the
in the reception of evidence to determine just compensation for the taking of subject
property. After receiving the evidence and conducting an ocular inspection, the
commissioners submitted to the court their individual reports. However, the trial court
did not conduct a hearing on any of the reports.
On 19 May 1993, the trial court rendered judgment fixing the amount of just
compensation to be paid by the NAPOCOR for the taking of the entire area of 63,220
squares meters at P400.00 per square meter, with legal interest thereon computed
from 11 September 1990, when NAPOCOR
was placed in possession of the land, plus attorney's fees of P20,000.00, and costs of
the proceedings. In due time, NAPOCOR appealed to the Court of Appeals. On 23 July
1997, the Court of Appeals rendered decision affirming that of the Regional Trial Court,
except that the award of P20,000.00 as attorney's fees was deleted. NAPOCOR filed a
petition for review before the Supreme Court.

ISSUE: Whether the determination of the court would be valid without hearing on
the report of the Commissioners.

RULING: The trial court and the Court of Appeals fixed the value of the land at
P400.00 per square meter, which was the selling price of lots in the adjacent fully
developed subdivision, the Santo Domingo Village Subdivision. The parcels of land
sought to be expropriated, however, are undeniably idle, undeveloped, raw agricultural
land, bereft of any improvement. Except for the Henson family, all the other
landowners were admittedly farmer beneficiaries under operation land transfer of the
Department of Agrarian Reform.

However, the land has been reclassified as residential. The nature and character of the
land at the time of its taking is the principal criterion to determine just compensation
to the landowner. Unfortunately, the trial court, after creating a board of
commissioners to help it determine the market value of the land did not
conduct a hearing on the report of the commissioners. The trial court fixed the fair
market value of subject land in an amount equal to the value of lots in the adjacent fully
developed subdivision. This finds no support in the evidence. The valuation was even
higher than the recommendation of anyone of the commissioners
(Commissioner Mariano C. Tiglao fixed the fair market value at P350.00 per square
meter, while Commissioner Arnold P. Atienza fixed it at P375.00 per square meter, and
Commissioner Victorino Oracio fixed it at P170.00 per square meter). Commissioner
 Atienza's recommendation appears to be the closest valuation to the market value of
lots in the adjoining fully developed subdivision. Considering that the subject parcels of
land are undeveloped raw land, the price of P375.00 per square meter would appear to
the Court as the just compensation for the taking of such raw land.

44. Napocor v. Sps. De La Cruz GR. No. 156093

FACTS: Petitioner NAPOCOR is a government-owned and controlled corporation created under

Republic Act No. 6395, as amended, with the mandate of developing hydroelectric power, producing
transmission lines, and developing hydroelectric power throughout the Philippines. NAPOCOR decided
to acquire an easement of right-of-way over portions of land within the areas of Dasmariñas and Imus,
Cavite for the construction and maintenance of the proposed Dasmariñas-Zapote 230 kV Transmission
Line Project. On November 27, 1998, petitioner filed a Complaint for eminent domain and expropriation
of an easement of right-of-way against respondents as registered owners of the parcels of land sought to
be expropriated. The aff ected areas were 51.55, 18.25, and 14.625 square meters, respectively, or a total
of 84.425 square meters. After respondents filed their respective answers to petitioner’s Complaint,
petitioner deposited PhP 5,788.50 to cover the provisional value of the land in accordance with Section 2,
Rule 67 of the Rules of Court. Then, on February 25, 1999, petitioner filed an Urgent Ex-Parte Motion for
the Issuance of a Writ of Possession, which the trial court granted in its March 9, 1999 Order However,
the trial court dropped the Dela Cruz spouses and their mortgagee, Metrobank, as parties-defendants in its
May 11, 1999 Order, 6 in view of the Motion to Intervene filed by respondent/intervenor Virgilio M.
Saulog, who claimed ownership of the land sought to be expropriated from respondents spouses Dela
Cruz.The trial court terminated the pre-trial in so far as respondent Ferrer was concerned, considering that
the sole issue was the amount of just compensation. As to the just compensation for the property of
Saulog, successor-in- interest of the Dela Cruz spouses, the trial court ordered the latter and petitioner to
submit their compromise agreement. The commissioners conducted an ocular inspection of S.K.
Dynamics’ property, and on October 8, 1999, they submitted a report to the trial court and recommended
that the property of S.K. Dynamics to be expropriated by petitioner be valued at PhP 10,000.00 per square
meter.
The records show that the commissioners did not aff ord the parties the opportunity to introduce evidence
in their favor, nor did they conduct hearings before them. In fact, the commissioners did not issue notices
to the parties to attend hearings nor provide the concerned parties the opportunity to argue their respective
causes. Upon the submission of the commissioners’ report, petitioner was not notified of the completion
or filing of it nor given any opportunity to file its objections to it. On December 1, 1999, respondent
Ferrer filed a motion adopting in toto the commissioners’ report with respect to the valuation of his
property. On December 28, 1999, the trial court consequently issued the Order approving the
commissioners’ report, and granted respondent Ferrer’s motion to adopt the subject report. Subsequently,
the just compensation for the disparate properties to be expropriated by petitioner for its project was
uniformly pegged at PhP 10,000.00 per square meter.
Incidentally, on February 11, 2000, respondent S.K. Dynamics filed a motion informing the trial court
that in addition to the portion of its property covered by TCT No. T-454278 sought to
be expropriated by petitioner, the latter also took possession of an 8.55-square meter portion of S.K.
Dynamics’ property covered by TCT No. 503484 for the same purpose––to acquire an easement of right-
of-way for the construction and maintenance of the proposed Dasmariñas- Zapote 230 kV Transmission
Line Project. Respondent S.K. Dynamics prayed that said portion be included in the computation of the
just compensation to be paid by petitioner.The Imus, Cavite RTC granted S.K. Dynamics’ motion to have
the 8.55-square meter portion of its property included in the computation of just compensation. The
Regional Trial Court fixed the just compensation to be paid by petitioner at PhP 10,000.00 per square
meter. On January 20, 2000, petitioner filed a Motion for Reconsideration of the above mentioned Order,
but said motion was denied in the trial court’s March 23, 2000 Order. Unsatisfied with the amount of just
compensation, petitioner filed an appeal before the CA. The Court of Appeals affirmed the decision of
RTC.

ISSUE: Whether or not the valuation of just compensation herein was not based from the evidence on
record and other authentic documents.

RULING: The legal basis for the determination of just compensation was insufficient
In this case, it is not disputed that the commissioners recommended that the just compensation be pegged
at PhP 10,000.00 per square meter. The commissioners arrived at the figure in question after their ocular
inspection of the property, wherein they considered the surrounding structures, the property’s location
and, allegedly, the prices of the other, contiguous real properties in the area. Furthermore, based on the
commissioners’ report, the recommended just compensation was determined as of the time of the
preparation of said report on October 5, 1999.

In B.H. Berkenkotter & Co. v. Court of Appeals, we held, thus:

Just compensation is defined as the full and fair equivalent of the property sought to be expropriated. The
measure is not the taker’s gain but the owner’s loss. The compensation, to be just, must be fair not only to
the owner but also to the taker. Even as undervaluation would deprive the owner of his property without
due process, so too would its overvaluation unduly favor him to the prejudice of the public. To determine
just compensation, the trial court should first ascertain the market value of the property, to which should
be added the consequential damages after deducting therefrom the consequential benefits which may arise
from the expropriation. If the consequential benefits exceed the consequential damages, these items
should be disregarded altogether as the basic value of the property should be paid in every case.
The market value of the property is the price that may be agreed upon by parties willing but not
compelled to enter into the contract of sale. Not unlikely, a buyer desperate to acquire a piece of property
would agree to pay more, and a seller in urgent need of funds would agree to accept less, than what it is
actually worth. x x x

Among the factors to be considered in arriving at the fair market value of the property are the cost of
acquisition, the current value of like properties, its actual or potential uses, and in the particular case of
lands, their size, shape, location, and the tax declarations thereon. It is settled that just compensation is to
be ascertained as of the time of the taking, which usually coincides with the commencement of the
expropriation proceedings. Where the institution of the action precedes entry into the property, the just
compensation is to be ascertained as of the time of the filing of the complaint. We note that in this case,
the filing of the complaint for expropriation preceded the petitioner’s entry into the property.
Therefore, it is clear that in this case, the sole basis for the determination of just
compensation was the commissioners’ ocular inspection of the properties in question, as gleaned from the
commissioners’ October 5, 1999 report. The trial court’s reliance on the said report is a serious error
considering that the recommended compensation was highly speculative and had no strong factual
moorings. For one, the report did not indicate the fair market value of the lots occupied by the Orchard
Golf and Country Club, Golden City
Subdivision, Arcontica Sports Complex, and other business establishments cited.
Furthermore, the commissioners’ report itself is flawed considering that its recommended just
compensation was pegged as of October 5, 1999, or the date when the said report was issued, and not the
just compensation as of the date of the filing of the complaint for expropriation, or as of November 27,
 1998.
Clearly, the legal basis for the determination of just compensation in this case is
insufficient as earlier enunciated.

45. Leca Realty v. Republic GR No. 155605

FACTS: On 18 March 1996, the Republic of the Philippines, represented by the

Department of Public Works and Highways (DPWH), filed a complaint for eminent
domain for the taking of some portions of the properties of Leca Realty Corp. (Leca),
Leeleng Realty Inc. (Leeleng), Metropolitan Bank and Trust Co. (Metrobank), Bank of
the Philippine Islands (BPI), and Cityland Inc. (Cityland). The said properties would be
affected by the construction of the EDSA-Shaw Boulevard Overpass Project in Shaw
Boulevard, Mandaluyong City, a public purpose to be undertaken by the DPWH.
Attached to the complaint is, among other things, Resolution No. 94-1 of the City
Appraisal Committee of Mandaluyong, which was created to appraise the properties that
would be affected by the construction of the project in question. In the said resolution,
the City Appraisal Committee fixed the fair market values of defendants' properties, as
follows:
'1. All lots situated along Shaw Boulevard from Edsa going westward towards
Manila up to Samat Street, that City, at THIRTY FIVE THOUSAND PESOS
(P35,000) per square meter[.]
The property of defendant-appellant Leca is approximately 297.00 meters from the
intersection of Shaw Boulevard and EDSA
On October 7, 1997, the court a quo appointed three (3) competent and disinterested
persons; namely, Atty. Benjamin C. Angeles, Mr. Joselito E. Gunio and Mr. Melchor
Savillo as commissioners to ascertain and report the just compensation of the properties
sought to be taken. On January 9, 1998, the commissioners submitted their report dated
January 8, 1998, and recommended the fair market value of the subject properties as
follows:
'1. Properties of Leca Realty Corporation and Leeleng Realty Inc.: P50,000 per
sq.m.
In arriving at the said Report, the Commissioners took into consideration the following
factors: property location, identification[,] neighborhood data, community facilities and
utilities, highest and best use, valuation and reasonable indication of land values within
the vicinity.
ISSUE:
 WON the Commissioner’s report with regards to the valuation of the properties of
Leca Realty Corp is valid.
RULING: No. The values arrived at in the Commissioners' Report were not supported
by sufficient evidence. Moreover, they were allegedly based on newspaper listings of
advertisements, which the commissioners deemed to be reasonable indices of the fair
29

market value. Further, mere offers of sale -- not consummated transactions

In expropriation proceedings in general, the market value is the just compensation to
which the owner of a condemned property is entitled. More precisely, market value is
"that sum of money which a person desirous 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. The Commissioners' Report relied heavily on newspaper advertisements of
offers of sale of properties in the vicinity. Clearly, these offers were merely asking prices.
By their very nature, they are subject to negotiations in which a buyer may ask for a
lower price; understandably, it is customary for the owner to raise the price offer.