LLOYDS RICHFIELD INDUSTRIAL vs.

NATIONAL POWER
CORPORATION, respondent.

DECISION

LEONEN, J : p

A true easement of right of way imposes burdens on another's property without

depriving the owner of its use and enjoyment. When the burden is too cumbersome as to
indefinitely restrict the owner from using the property, the easement is considered a
taking within the meaning of Constitution — in which case, full just compensation, not just
an easement fee, must be paid.
This Court resolves the consolidated Petitions for Review on Certiorari 1 both partly
assailing the Decision 2 and Resolution 3 of the Court of Appeals, which affirmed the
Regional Trial Court Decision 4 to condemn 11 parcels of land owned by Lloyds Richfield
Industrial Corporation (Lloyds Richfield) in favor of the National Power Corporation.
However, the Court of Appeals remanded the case for the trial court to redetermine the
just compensation, and deleted the award of just compensation for the value of the
limestone deposits.
Lloyds Richfield is a cement manufacturing corporation. With a plant site in Danao
City, it purchased parcels of land within its vicinity and quarried limestones from these
areas, which would then be used to manufacture cement. 5
Among those parcels of land it purchased were adjoining lots in Dawis Norte and
Dawis Sur, Carmen, Cebu. 6 These properties were covered by Tax Declaration Nos.
1501100012, 150110001, 1501100039, 15001100038, 1500110042, 151100041, and
1501100005. 7
Sometime before June 25, 1996, 8 the National Power Corporation entered into
negotiations with Lloyds Richfield to create an easement of right of way over the parcels
of land. Transmission lines would be constructed over the parcels of land for the 230 KV
Leyte-Cebu Interconnection Project. 9 A location map drawn by the National Power
Corporation depicted the lots that would be affected by the project, with the lots owned
by Lloyds Richfield denominated as Lot Nos. 1859, 1861, 1860, 1833, 1832, 1830, and
1829. 10 CAIHTE

When negotiations failed, the National Power Corporation filed a Complaint 11 for
expropriation before the Regional Trial Court of Danao City. It also filed an ex
parte motion, upon which the trial court issued a Writ of Possession allowing it to take
immediate possession of Lloyds Richfield's properties. 12
Lloyds Richfield initially moved to dismiss the case, but the trial court denied it. 13 It
then filed its Answer, 14 demanding by way of compulsory claim that the National Power
Corporation pay the fair market value of the parcels of land, since the construction of
transmission lines over its properties would render the properties useless to it. It also
demanded to be paid the fair market value of the limestone deposits in the parcels of
land. 15
A Committee on Appraisal was then convened to determine the just compensation
for the parcels of land and the limestone deposits. Alexander G. Parilla, Sr. (Parilla), the
Danao City assessor, was appointed as the committee chair, while Sebastian Ocon
(Ocon) and Henry Gallego (Gallego), representatives of the National Power Corporation
and Lloyds Richfield, respectively, served as members. 16
Upon the Committee's motion, the Department of Environment and Natural
Resources, through its geodetic engineer, was ordered to survey the lots and determine
the approximate value of the limestones extractable from them. It was also ordered to
determine the safety zone, or the distance from the properties where dynamite blasting
may be safely conducted to quarry the limestones. 17
The Committee on Appraisal later submitted a Report to the trial court, and the
parties were directed to comment on it. 18
As Lloyds Richfield noted, the Committee recommended an increase in the safety
zone from the original 20 meters to 200 meters on each side, totaling 400 meters. This
increase would require the National Power Corporation to expropriate four more lots that
were not originally cited in the Complaint. 19
The Report, however, did not delineate the boundaries of the areas affected by the
increased safety zone. It also did not contain annexes, such as documents supporting its
recommendations on the value of the limestones in the property. Thus, Lloyds Richfield
moved to require the commissioners to amend the Report, which the trial court granted. 20
In its Amended Commissioners' Report, the Committee on Appraisal
recommended P450.00 per square meter as the just compensation for the lands
expropriated. It also recommended P26.00 per ton as the fair market value of the
limestone deposits in the properties. 21
In addition, the Committee recommended to increase the number of lots to be
expropriated from seven to 11, to include Lot Nos. 1824, 1831, 1862, and 1863 as
depicted in the location map. 22 As to the total volume of the limestones extractable from
the lots, it arrived at 3,651,092.40 tons. 23
Only Parilla and Gallego signed the Amended Commissioners' Report. Ocon, the
National Power Corporation's representative, filed a dissenting opinion. 24
The National Power Corporation opposed the Amended Commissioners' Report. It
insisted that expropriating 11 lots would be improper since, as it had said in its Complaint,
only seven were needed to build the transmission lines. It added that it could not be made
to pay just compensation for the limestone deposits as these were minerals, which were
owned not by Lloyds Richfield, but by the State. Lastly, it contended that it may only
acquire an easement of right of way over the parcels of land pursuant to Republic Act
No. 6395, and thus, may only pay an easement fee equivalent to 10% of the market value
of the lands to be expropriated. 25
In its December 13, 1999 Decision, 26 the Regional Trial Court ordered the 11 lots
condemned in favor of the National Power Corporation. DETACa

The trial court said Lloyds Richfield was entitled to an amount equivalent to the fair
market value of the lands to be expropriated, not just an easement fee. Citing National
Power Corporation v. Gutierrez, 27 it said the easement the National Power Corporation
sought was not an easement at all, because the restrictions on the property would totally
deprive Lloyds Richfield of the use of its lands. Once the transmission lines have been
constructed, Lloyds Richfield would be perpetually deprived of its proprietary rights over
the lands, specifically, of quarrying for limestones used in its cement manufacturing
business. Consequently, declared the trial court, a mere easement fee would not
suffice. 28
 The trial court added that the National Power Corporation must pay just
compensation for all of Lloyds Richfield's 11 lots, not just the original seven prayed for in
the Complaint. With the safety zone increased based on the Amended Commissioners'
Report, not only would Lloyds Richfield be deprived of conducting blasting works in the
seven lots, but also in the other four lots, namely, Lot Nos. 1824, 1831, 1862, and 1863. 29
The trial court also noted that the National Power Corporation may not refuse to
expropriate these four additional lots, considering that it had been given several chances
to present evidence controverting the safety zone increase, but still failed to do so. 30
As to whether the National Power Corporation should pay just compensation for
the limestone deposits, the trial court said that while the State owned minerals found in
Philippine soil, it allowed Lloyds Richfield to quarry the limestones found in the parcels of
land to be expropriated. Since, if not for the transmission lines, it would not have to
acquire limestones from some other source, Lloyds Richfield was deemed indefinitely
deprived of its right over the limestone deposits in its properties, for which it must be
compensated. The trial court cited Benguet Consolidated Mining v. Republic, 31 where
this Court would have allegedly allowed the payment of just compensation for the gold
deposits in Benguet Consolidated had they been found of commercial value. 32
On the value of just compensation, the trial court determined that the
recommended P450.00 per square meter for the 11 parcels of land and P26.00 per ton
for the limestone deposits were fair and reasonable. It noted that the P450.00 valuation
was based on the previous purchases made by the National Power Corporation, while
the P26.00 valuation was based on the recommended value by the Regional Director of
the Mines and Geosciences Bureau in Region VII. 33
The dispositive portion of the trial court's Decision reads:
WHEREFORE, facts and law considered, the Court hereby renders
judgment condemning [Lloyds Richfield]'s lot Nos. 1859, 1863, 1862, 1861, 1860,
1833, 1832, 1831, 1830, 1829, and 1824 in favor of the [National Power
Corporation]; ordering [the National Power Corporation] to pay [Lloyds Richfield]
the fair market value of aforesaid lots condemned by this expropriation proceedings
at P450.00 per square meter, and P26.00 per ton for the value of the limestone
deposits found thereon, computed as follows:
1. P39,628,800.00 or P450.00 per square meter as just compensation for the
total area of 88,064 square meters covered by the aforestated lots; and
2. P94,928,402.40 as just compensation for the value of the limestone
deposits on the said lots, computed at P26.00 per ton at the determined
volume of 3,651,092.40 tons. aDSIHc

SO ORDERED. 34
The Court of Appeals agreed that just compensation must be paid for all 11 parcels
of land, not just an easement fee. It cited a long line of cases 35 in striking down the
argument that the National Power Corporation was only allowed to acquire easements.
It similarly cited Gutierrez and held that "[i]f the easement is intended
to perpetually or indefinitely deprive the owner of his proprietary rights through the
imposition of conditions that affect the ordinary use, free enjoyment and disposal of the
property . . . then the owner should be compensated for the monetary equivalent of the
land" 36 — as in Lloyds Richfield's case. 37
The Court of Appeals likewise agreed with the trial court that the number of parcels
of land to be expropriated was properly increased from seven to 11. As the National
Power Corporation failed to rebut the recommendation to increase the safety zone, the
Court of Appeals said it was "left with no other logical conclusion but to accept the
same." 38
However, unlike the trial court, the Court of Appeals held that Lloyds Richfield was
not entitled to just compensation for the value of the limestone deposits. Regardless of
the Mineral Production Sharing Agreement entered into between Lloyds Richfield and the
Republic of the Philippines, the Court of Appeals emphasized that minerals such as
limestones are owned by the State. More, it noted that per the agreement, Lloyds
Richfield could "only acquire land or surface rights over the mining area but not any title
over the contract or mining area itself." 39
The Court of Appeals discussed how Lloyds Richfield's right over the limestone
deposits, if any, was in the concept of an income or opportunity loss. It explained that the
limestone deposits were merely "indispensable product cost." 40 This, to the Court of
Appeals, meant that Lloyds Richfield was forced to source its limestones elsewhere
because expropriation was not compensable, since the increase in the cost of acquiring
limestones was a business risk inherent in its business. The Court of Appeals opined that
to compensate Lloyds Richfield for its production cost would unjustly enrich it. 41
The Court of Appeals then explained at length how Lloyds Richfield may not rely
on Benguet Consolidated to claim compensation for the limestone deposits. It said the
issue of State ownership over the minerals was never raised in Benguet Consolidated,
and the issue only came about because the properties' valuation there was ridiculously
low. Here, the P450.00 valuation was based on the fair market value of the properties,
and hence, was just compensation. Further, it noted that the valuation of the limestone
deposits here was suspect, as the Committee on Appraisal had inappropriately requested
a fee contingent on the amount of just compensation for Lloyds Richfield. Finally, at the
time of the taking, Benguet Consolidated's mining claim was an established fact, unlike
here, where Lloyds Richfield's mining claim was belated, made three years after the
taking. 42
As to the P450.00 per square meter valuation, the Court of Appeals said the trial
court erred in affirming this value. It said the Committee on Appraisal arrived at this
amount based solely on the deeds of sale of other lots that were of considerable distance
and of a different nature from the properties here. 43 Noting that it was "apparently
inadequate" 44 to make the deeds the lone basis for just compensation, the Court of
Appeals remanded the case to the trial court to reevaluate the just compensation payable
to Lloyds Richfield. 45
The dispositive portion of the Court of Appeals' December 3, 2008
Decision 46 reads:
WHEREFORE, in view of all the foregoing, the appeal is PARTIALLY
GRANTED.
The order of the trial court in Civil Case No. DNA-384 condemning [Lloyds
Richfield's] Lot Nos. 1859, 1863, 1862, 1861, 1860, 1833, 1832, 1831, 1830, 1829,
and 1824; and payment of just compensation thereof in favor of [the National
Power Corporation] is AFFIRMED.
Accordingly, the records of this case is REMANDED to the Regional Trial
Court, 7th Judicial Region, Branch 25 of Danao City for the proper determination
of just compensation, in conformity with this Decision. To forestall any further delay
in the resolution of this case, the trial court is hereby ordered to fix the just
compensation within six (6) months from its receipt of this Decision; and afterwards
to report to this Court its compliance.ETHIDa
 The finding of the trial court awarding just compensation for the value of the
limestone deposits of the aforesaid lots is hereby DELETED.
No pronouncement as to costs.
SO ORDERED. 47 (Emphasis in the original)
The National Power Corporation and Lloyds Richfield each moved for
reconsideration, but both of them were denied in the Court of Appeals' October 16, 2009
Resolution. 48
The first to file its Petition for Review on Certiorari before this Court was Lloyds
Richfield, with its Petition 49 docketed as G.R. No. 190207. The National Power
Corporation followed suit, with its Petition 50 docketed as G.R. No. 190213. Since the
Petitions assail the same Court of Appeals Decision and Resolution, they were
consolidated through a September 27, 2010 Resolution. After the filing of Comments and
Replies, the parties were ordered to file their respective Memoranda.
Lloyds Richfield argues that it is entitled to an amount equivalent to the fair market
value of its properties expropriated by the National Power Corporation. It points out that
this Court has long rejected the 10% easement fee argument, more recently in the cases
of National Power Corporation v. Santa Loro vda. de Capin 51 and National Power
Corporation v. Villamor. 52 In these cases also involving the construction of transmission
lines for the 230 KV Leyte-Cebu Interconnection Project, this Court said the owners of
the lands expropriated must be paid the full amount of just compensation as they would
be indefinitely deprived of the use and enjoyment of their properties, not to mention the
danger to their life and limb. 53
Lloyds Richfield adds that the four lots affected by the increased safety zone were
correctly added to the lots to be expropriated. It says the lower courts' rulings on this
issue "conforms to [this Court's] observations in [Santa Loro vda. de Capin and Villamor]
that [the National Power Corporation's] transmission lines are dangerous." 54 It adds that
"simple common sense is enough" to determine that dynamite blasting cannot be done
too close to the transmission lines. 55
Lloyds Richfield contends that the Court of Appeals erred in deleting the award of
just compensation for the limestone deposits. The ruling that the State owns all minerals
in Philippine soil is allegedly contrary to Article 437 56 of the Civil Code, which states that
the owner of a parcel of land is the owner of its surface and everything under it. 57 It then
cites Benguet Consolidated, where this Court held that the filing of an expropriation
proceeding means that the property is no longer part of the public domain but private
property. 58
Lloyds Richfield refutes the Court of Appeals' ruling on the supposed distinctions
between Benguet Consolidated and this case, saying these distinctions are without basis
in fact and contrary to law and jurisprudence. It argues that in Benguet Consolidated,
there was indeed an attempt to resolve the mineral claims, only that the value could not
be determined because the gold deposits there were not of commercial value. Here, the
value of the mineral deposits was determined, which meant they had commercial value,
for which just compensation should be paid. 59
Finally, Lloyds Richfield maintains that the P450.00 per square meter and P26.00
per ton of limestone deposits was based not only on the deeds of sale covering the lots
adjacent to the ones owned by Lloyds Richfield, but also those paid by the National Power
Corporation for other lot owners affected by the transmission lines. Lloyds Richfield points
out that the case has been pending for too long, making a case remand unnecessary. It
argues that this Court can take judicial notice of the just compensation paid in Santa Loro
vda. de Capin and Villamor, also pegged at P450.00 per square meter, as the properties
involved there were also in Dawis Sur, Carmen, Cebu and were expropriated for the 230
KV Leyte-Cebu Interconnection Project. 60 cSEDTC

The National Power Corporation counters that under its charter, it may only acquire
easements of right of way for its transmission lines since title to the property expropriated
remains with the landowner. Thus, it says it only needs to pay an easement fee equivalent
to 10% of the market value of the land expropriated. 61
The National Power Corporation cites an ongoing World Health Organization study,
which says that "scientific evidence is still inconclusive on the [adverse] effect on human
health of exposure to electric fields generated by transmission lines[.]" 62 It then argues
that with no conclusive evidence as to the alleged danger to life and limb caused by the
transmission lines, it cannot be compelled to acquire ownership of Lloyds Richfield's
properties and pay the full amount of just compensation. 63
As to the additional four lots, the National Power Corporation argues that their
inclusion is "without legal basis since it springs from the mistaken notion that [Lloyds
Richfield] is entitled to payment of just compensation for the mineral deposits found below
the surface area traversed by [the] transmission lines." 64
The National Power Corporation heavily cites the Court of Appeals Decision on
deleting the award of just compensation for the limestone deposits, implying that Lloyds
Richfield has no right to just compensation as the State owns these limestone deposits. 65
Lastly, the National Power Corporation agrees with the Court of Appeals that the
P450.00 per square meter valuation was erroneous for being exclusively based on the
deeds of sale of the properties not of the same nature and location as those of Lloyds
Richfield's. It thus calls for the case's remand for a reevaluation. 66
The issues for this Court's resolution are:
First, whether or not Lloyds Richfield Industrial Corporation is entitled to just
compensation equivalent to the fair market value of the properties expropriated, not just
a 10% easement fee;
Second, whether or not the four other lots covered by the increased safety zone
was properly included in the properties to be expropriated;
Third, whether or not Lloyds Richfield Industrial Corporation is entitled to just
compensation for the value of the limestone deposits found in its lots; and
Finally, whether or not the Court of Appeals erred in remanding the case to the
Regional Trial Court to determine anew the amount of just compensation payable to
Lloyds Richfield Industrial Corporation.
The Petition in G.R. No. 190207, filed by Lloyds Richfield Industrial Corporation, is
partly granted. On the other hand, the Petition in G.R. No. 190213, filed by the National
Power Corporation, is denied.
I
No less than the Constitution mandates the payment of just compensation for the
taking of private property for public use. Section 9 of the Bill of Rights provides:
SECTION 9. Private property shall not be taken for public use without just
compensation.
Just compensation is "the full and fair equivalent of the property taken from its
owner by the expropriator." 67 "Just" means the compensation given to the owner for the
taking of the property must be "real, substantial, full and ample." 68 In monetary terms,
just compensation is the fair market value of the property taken. 69 It 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 for such
property." 70
Expropriation, however, is not limited to the taking of property with the
corresponding transfer of title from the landowner to the expropriator. Easements of right
of way fall within the purview of expropriation, allowed when the restrictions on the
landowner's property rights are not perpetual or indefinite. 71 In such a case, a mere
easement fee may suffice. SDAaTC

Here, expropriation by creating an easement of right of way is impossible.

Constructing transmission lines over the expropriated properties placed an indefinite and
perpetual restriction on Lloyds Richfield's proprietary rights. This is especially true since
Lloyds Richfield has been perpetually prohibited from conducting dynamite blasting and
quarrying activities in the properties expropriated, or else the transmission lines would be
damaged or completely destroyed, endangering lives and properties. Therefore, the
National Power Corporation has no choice but to expropriate the properties in the
traditional sense — to take the properties and acquire title, for which it must pay the full
market value of the properties as just compensation.
The National Power Corporation's oft-cited basis for refusing to pay the full market
value as just compensation — Section 3A of Republic Act No. 6395 — has long been
rejected by this Court. 72 Section 3A of the law 73 states:
SECTION 3A. 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 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 to 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 case 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. (Emphasis supplied)
Section 3A provides that "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[.]"
Here, constructing transmission lines over Lloyds Richfield's properties impairs the
principal purpose for which the parcels of expropriated land were actually devoted:
quarrying activities. Consequently, a right-of-way easement will not suffice. This Court
similarly said so in National Power Corporation v. Gutierrez, 74 which also involved
constructing transmission lines over expropriated properties: acEHCD

The trial court's observation shared by the appellate court show that ". . .
While it is true that plaintiff are (sic) only after a right-of-way easement, it
nevertheless perpetually deprives defendants of their proprietary rights as
manifested by the imposition by the plaintiff upon defendants that below said
transmission lines no plant higher than three (3) meters is allowed. Furthermore,
because of the high-tension current conveyed through said transmission lines,
danger to life and limbs that may be caused beneath said wires cannot altogether
be discounted, and to cap it all, plaintiff only pays the fee to defendants once, while
the latter shall continually pay the taxes due on said affected portion of their
property."
The foregoing facts considered, the acquisition of the right-of-way easement
falls within the purview of the power of eminent domain. Such conclusion finds
support in similar cases of easement of right-of-way where the Supreme Court
sustained the award of just compensation for private property condemned for
public use[.] The Supreme Court, in Republic of the Philippines vs. PLDT, thus held
that:
"Normally, of course, the power of eminent domain results in the
taking or appropriation of title to, and possession of, the expropriated
property; but no cogent reason appears why said power may not be
availed of to impose only a burden upon the owner of condemned
property, without loss of title and possession. It is unquestionable that
real property may, through expropriation, be subjected to an
easement of right-of-way."
In the case at bar, the easement of right-of-way is definitely a taking under
the power of eminent domain. Considering the nature and effect of the installation
of the 230 KV Mexico-Limay transmission lines, the limitation imposed by NPC
against the use of the land for an indefinite period deprives private respondents of
its ordinary use.
For these reasons, the owner of the property expropriated is entitled to a
just compensation, which should be neither more nor less, whenever it is possible
to make the assessment, than the money equivalent of said property. Just
compensation has always been understood to be the just and complete equivalent
of the loss which the owner of the thing expropriated has to suffer by reason of the
expropriation[.] The price or value of the land and its character at the time it was
taken by the Government are the criteria for determining just compensation[.] The
above price refers to the market value of the land which may be the full market
value thereof. According to private respondents, the market value of their lot is
P50.00 per square meter because the said lot is adjacent to the National and super
highways of Gapan, Nueva Ecija and Olongapo City.
Private respondents recognize the inherent power of eminent domain being
exercised by NPC when it finally consented to the expropriation of the said portion
of their land, subject however to payment of just compensation. No matter how
laudable NPC's purpose is, for which expropriation was sought, it is just and
 equitable that they be compensated the fair and full equivalent for the loss
sustained, which is the measure of the indemnity, not whatever gain would accrue
to the expropriating entity[.] 75 (Citations omitted)
Reiterating Gutierrez, this Court in National Power Corporation v.
Villamor 76 succinctly stated:
[The National Power Corporation] contends that under Section 3A of its
charter, RA 6395, where private property will be traversed by transmission lines,
[it] shall only acquire an easement of right of way since the landowner retains
ownership of the property and can devote the land to farming and other agricultural
purposes. . .
xxx xxx xxx
[The National Power Corporation's] reliance on Section 3A of RA 6395 has
been struck down by this Court in a number of cases. Easement of right of way
falls within the purview of the power of eminent domain. In installing the 230 KV
Talisay-Compostela transmission lines which traverse respondent's lands, a
permanent limitation is imposed by petitioner against the use of the lands for an
indefinite period. This deprives respondent of the normal use of the lands. In fact,
not only are the affected areas of the lands traversed by petitioner's transmission
lines but a portion is used as the site of its transmission tower. Because of the
danger to life and limbs that may be caused beneath the high-tension live wires,
the landowner will not be able to use the lands for farming or any agricultural
purposes. 77 (Citations omitted)
All told, Lloyds Richfield is entitled to the full market value of the properties as just
compensation, not just an easement fee, for the taking of its properties. SDHTEC

II
Furthermore, the four additional lots covered by the increased safety zone were
properly included in the lots condemned in favor of the National Power Corporation. While
the National Power Corporation only sought to expropriate Lot Nos. 1859, 1861, 1860,
1833, 1832, 1830, and 1829, the construction of the transmission lines would likewise
render Lot Nos. 1824, 1831, 1862, and 1863 useless to Lloyds Richfield. As the Mines
and Geosciences Bureau in Region VII had recommended, a 200-meter safety zone
around the transmission lines must be maintained. Lloyds Richfield may not conduct
dynamite blasting or quarrying activities within these lots, restricting its proprietary rights,
for which it must be paid just compensation.
In any case, the National Power Corporation cannot assail the increase in the
number of lots it must expropriate. Given that the Committee on Appraisal, in its Amended
Commissioners' Report, recommended an increase in the safety zone, the trial court gave
the National Power Corporation several opportunities, even continuances, to present
evidence on why the four additional lots need not be expropriated. Despite these, it still
failed to present any evidence to refute the recommendation. 78
On this score, Rule 10, Section 5 of the 1997 Rules of Civil Procedure, before its
latest amendment, provides:
RULE 10
Amended and Supplemental Pleadings
SECTION 5. Amendment to conform to or authorize presentation of
evidence. — When issues not raised by the pleadings are tried with the
express or implied consent of the parties they shall be treated in all respects
as if they had been raised in the pleadings. Such amendment of the pleadings
as may be necessary to cause them to conform to the evidence and to raise these
 issues may be made upon motion of any party at any time, even after judgment;
but failure to amend does not effect the result of the trial of these issues. If evidence
is objected to at the trial on the ground that it is not within the issues made by the
pleadings, the court may allow the pleadings to be amended and shall do so with
liberality if the presentation of the merits of the action and the ends of substantial
justice will be subserved thereby. The court may grant a continuance to enable the
amendment to be made. (Emphasis supplied)
Under Rule 10, Section 5, therefore, the issue of whether the four lots should be
included in the properties to be expropriated is deemed to have been tried with the
National Power Corporation's consent.
III
Lloyds Richfield, however, is not entitled to just compensation for the limestone
deposits in its properties.
Under Article XII, Section 2 79 of the Constitution, the State owns all minerals found
in Philippine soil. While Lloyds Richfield has title to the properties, it does not own the
minerals underneath them, as shown by the permits and the Mineral Production Sharing
Agreement it had to secure from the government to conduct quarrying activities in its
properties.
Article 437 80 of the Civil Code, which provides that the owner of a parcel of land is
the owner of its surface and everything under it, is not without limitations. For one, it is a
statute that cannot trump a constitutional provision. Article 437 itself provides that it is
"subject to special laws and ordinances." Certainly, the Constitution can be considered a
special law, if not the fundamental law, to which all statutes must conform. AScHCD

Furthermore, in Republic v. Court of Appeals, 81 this Court held that an owner of a

parcel of land may even be ousted of ownership of their land should minerals be found
underneath it, in which case, they shall be paid just compensation for the taking of the
land — not for the taking of the minerals underneath it. Said this Court:
The rule simply reserves to the State all minerals that may be found in public and
even private land devoted to "agricultural, industrial, commercial, residential or (for)
any purpose other than mining." Thus, if a person is the owner of agricultural land
in which minerals are discovered, his ownership of such land does not give him the
right to extract or utilize the said minerals without the permission of the State to
which such minerals belong.
. . . [O]nce minerals are discovered in the land, whatever the use to which it
is being devoted at the time, such use may be discontinued by the State to enable
it to extract the minerals therein in the exercise of its sovereign prerogative. The
land is thus converted to mineral land and may not be used by any private party,
including the registered owner thereof, for any other purpose that will impede the
mining operations to be undertaken therein. For the loss sustained by such owner,
he is of course entitled to just compensation under the Mining Laws or in
appropriate expropriation proceedings. 82 (Emphasis supplied, citation omitted)
It is true that this Court, in National Power Corporation v. Ibrahim, 83 applied Article
437 of the Civil Code to order the National Power Corporation to pay just compensation
to the property owners. In that case, a tunnel was built underneath the owners' property
without their knowledge.
Ibrahim, however, does not apply here. There was no extraction of minerals
conducted in Ibrahim, unlike here, which involved the quarrying of limestones, a mineral.
 Even Benguet Consolidated Mining v. Republic 84 cannot be made basis for the
award of just compensation for the limestone deposits. Unlike Lloyds Richfield's mineral
claim, which was made in 1993 — under the regime of 1987 Constitution — Benguet
Consolidated's mineral claim was made as early as 1909, under the Philippine Bill of
1902. The organic act stated that minerals may still be claimed by private individuals. 85 In
other words, Benguet Consolidated's mining claim had become a vested right. 86 But
even then, as Lloyds Richfield pointed out, no just compensation was ultimately given to
Benguet Consolidated because the gold deposits were not of commercial value.
Therefore, the Court of Appeals correctly deleted the award of just compensation
for the limestone deposits.
IV
Finally, as Lloyds Richfield argued, there is no need to remand the case for the trial
court to redetermine the value of just compensation. This order was based on the
erroneous finding that the P450.00 per square meter valuation was, in turn, based solely
on the deeds of sale of other lots of considerable distance from Lloyds Richfield's
properties, allegedly without regard to other factors like land classification and location.
Lloyds Richfield correctly pointed out that the P450.00 fair market value was also
based, among others, on the fair market value arrived at in other expropriation cases,
such as National Power Corporation v. Santa Loro vda. de Capin 87 and National Power
Corporation v. Carlos Villamor. 88 These cases likewise involved parcels of land in Dawis
Sur expropriated for the 230 KV Leyte-Cebu Interconnection Project. There is also no
reason to not rely on the deeds of sale of the other properties near Lloyds Richfield, as
the amount of just compensation approved in Santa Loro vda. de Capin and Villamor was
likewise based on these deeds of sale. AcICHD

With no sufficient reason to remand the case, we affirm the P450.00 per square
meter valuation arrived at by the trial court as the value of just compensation.
WHEREFORE, the Petition for Review on Certiorari in G.R.
No. 190207 is PARTLY GRANTED, while that in G.R. No. 190213 is DENIED. The Court
of Appeals' December 3, 2008 Decision and October 16, 2009 Resolution in CA-G.R. CV
No. 66804 are AFFIRMED with MODIFICATION.
Lot Nos. 1859, 1863, 1862, 1861, 1860, 1833, 1832, 1831, 1830, 1829, and 1824,
all owned by Lloyds Richfield Industrial Corporation, are ordered CONDEMNED in favor
of the National Power Corporation. In turn, the National Power Corporation
is ORDERED to pay Lloyds Richfield Industrial Corporation the fair market value of the
11 condemned lots as just compensation, valued at P450.00 per square meter or
P39,628,800.00 for the total area of 88,064 square meters.
The Court of Appeals' deletion of the award of just compensation for the value of
limestone deposits is AFFIRMED.
Finally, the Court of Appeals' order remanding the case to the Regional Trial Court
of Danao City, Branch 25, for the proper determination of just compensation
is DELETED. caITAC

SO ORDERED.
(Lloyds Richfield Industrial Corp. v. National Power Corp., G.R. Nos. 190207 & 190213,
|||

[June 30, 2021])

 SPOUSES HERBERT E. BUOT and OPHELIA R.
COMPLETO, petitioners, vs. NATIONAL TRANSMISSION
CORPORATION, now substituted by NATIONAL GRID CORPORATION
OF THE PHILIPPINES, respondent.

DECISION

INTING, J : p

Before the Court is a Petition for Review on Certiorari 1 filed by Spouses Herbert
E. Buot and Ophelia R. Completo (Spouses Buot) seeking to reverse and set aside the
Decision 2 dated February 9, 2018 and the Resolution 3 dated June 18, 2018 of the Court
of Appeals (CA) in CA-G.R. CEB CV No. 05483.
The CA set aside the Decision dated September 21, 2011 of Branch 26, Regional
Trial Court (RTC), Argao, Cebu in Civil Case No. AV-1437, and remanded the case to
the trial court for: (1) determination of just compensation for the expropriated property
and the affected improvements; and (2) the execution of a quitclaim on the property
covered by the legal easement of right-of-way. 4
The Antecedents
Spouses Buot are the registered owners of a parcel of land located in Abugon,
Sibonga, Cebu, denominated as Lot No. 1415, CAD. 315-D, covered by Transfer
Certificate of Title No. P-2260, and classified as "Agri" in its tax declaration (subject
property). 5 The land has an area of approximately 117,850 square meters. It was
originally registered pursuant to a grant by free patent carrying a general reservation for
all conditions, public easements and servitudes as recognized and prescribed by law. 6
The present case arose when National Transmission Corporation (TransCo) filed
a complaint for expropriation with the RTC against Spouses Buot for the acquisition of a
196-square-meter portion of the subject property and the enforcement of an casement of
right-of-way over 7,382 square meters thereof for its Naga-Suba 138KV T/L Upgrading
Project. 7CAIHTE

Spouses Buot opposed the complaint and countered that the danger, hazard, and
adverse effects on the safety and health of persons posed by the tower would
consequently render the subject property useless. Thus, they sought just compensation
for their entire lot because the already existing transmission lines traversing and
occupying a 5,420-square-meter portion of their land, plus the present proposed area for
Transco's Naga-Suba 138KV T/L Upgrading Project, would affect a bigger area of 7,578
square meters. 8
In its Order dated August 3, 2007, the RTC appointed a Panel of Commissioners
to determine the fair market value of the property, as follows: (1) Genoveva R. Vasquez,
as Chairperson; (2) Nathaniel A. Baluyo, as Member for Transco; and (3) Tomasito Z.
Academia, as Member for Spouses Buot. 9
Transco thereafter filed a motion for the issuance of a writ of possession and
furnished Spouses Buot a notice to take possession. Thus, the RTC, in its Order dated
February 12, 2008, directed Transco to pay Spouses Buot the amount of P4,546,800.00
for the value of the land and P567,500.00 for the improvements thereon, or a total of
P5,114,300.00. 10
 On July 31, 2008, the RTC issued an Order for the issuance of a writ of possession
in Transco's favor considering Spouses Buot's encashment of a check in the amount of
P5,114,300.00 constituting the former's payment of the provisional value as fixed by the
trial court. 11
In their Consolidated Report, the Panel of Commissioners recommended P600.00
per square meter as the least/minimum/lowest valuation that could be given to the subject
property, which is classified as agricultural land. 12
Meanwhile, during the pendency of the case, the National Grid Corporation of the
Philippines (NGCP) took over the operations of Transco. 13 Consequently, on June 22,
2011, Transco and NGCP jointly moved for the former's substitution as plaintiff. The RTC
granted the motion in its Order dated June 29, 2011. 14
Ruling of the RTC
In its Decision dated September 21, 2011, the RTC ruled that the amount of just
compensation to be paid by NGCP shall be P1,000.00 per square meter for the
expropriated portion of the subject property measuring a total of 7,578 square meters,
which amounted to P7,578,000.00, plus P567,500.00 as payment for the improvements
thereon, or a total of P8,145,500.00.
The dispositive portion of the Decision reads:
"WHEREFORE, premises considered, the complaint for expropriation is
GRANTED and a Decision is hereby rendered directing the parties to do the
following acts, to wit:
1. Plaintiff shall pay the defendants the amount of THREE MILLION THIRTY-
ONE THOUSAND TWO HUNDRED PESOS (P3,031,200.00) as
balance of the just compensation for the affected area consisting of
7,578 square meters to be taken from Lot No. 1145, Cad. 315-D, Title
No. P-2260. TD-ARP No. 9142-007274, located in Abugon, Sibonga,
Cebu; DETACa

2. That for and in consideration of the sum of P8,145,500.00, the defendants

shall cede, sell, transfer and convey to the plaintiff that portion of land
measuring 7,578 square meters to be taken from Lot No. 1415, Cad.
315-D, covered by Title No. P-2260 and by TD/ARP No. 9142-007274;
3. Plaintiff shall pay to the defendants the aforementioned balance of
P3,031,200.00 in full after the new Tax Declaration for the 7,578
square meter-portion of Lot No. 1415 is issued in the name of the
plaintiff.
The Register of Deeds of the Province of Cebu is directed to cancel Certificate of
Title No. P-2260 and to issue a new Certificate of Title in the name of the plaintiff
National Grid Corporation of the Philippines for the expropriated area of 7,578
square meters as well as to issue another Certificate of Title in the name of the
defendants for the remaining area of 110,272 square meters.
The Provincial Assessor of Cebu and/or the Municipal Assessor of Sibonga, Cebu,
is directed to cancel Tax Declaration/ARP No. 9142-007274 and to issue a new
Tax Declaration for the expropriated area of 7,578 square meters in the name of
the National Grid Corporation of the Philippines as well as to issue a new Tax
Declaration for the remaining area of 110,272 square meters in the name of
defendants.
SO ORDERED." 15
Ruling of the CA
 On February 9, 2018, the CA rendered the assailed Decision declaring that a
remand of the case to the RTC is proper for the determination of the actual area for
expropriation, after deduction of the 60-meter wide reservation provided by law. 16 It
further directed that after such determination, NGCP shall obtain a quitclaim from
Spouses Buot over the appropriated 60-meter wide portion, 17 pursuant to Section 5 of
the Implementing Rules and Regulations (IRR) of Republic Act No. (RA) 8974. 18
The CA ruled as follows:
First, power and transmission lines are deemed subsumed under Section 112
of Commonwealth Act (CA) No. 141, as amended by Presidential Decree No. (PD)
635 19 and further amended by PD 1361, 20 as regards the legal easement of right-of-way
not exceeding 60 meters in width on lands granted by patent by virtue of the principle
of ejusdem generis. The phrase "other similar works as the Government or any public or
quasi-public service or enterprise" in Section 112 clearly covers projects that are intended
for public use, including power and transmission lines. 21
Second, NGCP, by virtue of the franchise granted to it by the government which
necessarily includes the exercise of the right of eminent domain, may appropriate a 60-
meter wide area for the construction of a tower and the installation of transmission lines
on the subject property without paying for it, save for the value of the improvements
thereon that may have been damaged as a result, pursuant to Section 112 of CA No.
141. 22 However, if after appropriation or deduction of the 60-meter wide reservation in
favor of the government, a portion of the subject property is left dangling making it no
longer beneficial or safe for use by the property owners, that portion shall be subject to
the payment of just compensation which, under Section 6 of Rule 67 of the Rules of Court,
is referred to as consequential damages. 23 ATICcS

Third, the RTC's valuation of the expropriated property at P1,000.00 per square
meter is without sufficient basis. The trial court, among others, erroneously relied on the
valuation of P1,000.00 per square meter in the Judgment (based on Compromise
Agreement) in evidence, which pertained to a land located in Naga and Sibonga, Cebu,
but not within the vicinity of the subject property. 24
And fourth, as to the improvements on the property, the RTC merely adopted the
valuation recommended by Commissioner Tomasito Z. Academia at P600.00 per square
meter. This valuation, however, failed to take into consideration the trees actually growing
on the affected property. Without the correct names or species, the just valuation of these
trees cannot be properly determined. 25
The CA thus concluded that the case should be remanded to the RTC for the
proper determination of just compensation for the expropriated property and the value of
the affected improvements pursuant to the requirements as set forth under RA 8974. 26
Thus, the dispositive portion of the assailed Decision reads:
WHEREFORE, the appeal is GRANTED in part, the Decision dated 21
September 2011 of the Regional Trial Court, 7th Judicial Region, Branch 26,
Argao, Cebu, in Civil Case No. AV-1437, is SET ASIDE. The case is REMANDED
to the said court for assessment of the fair market value of the defendants-
appellees' property as of 2007, including the improvements affected by the
construction and installation of the plaintiff-appellant's tower and transmission
lines, and to render judgment on the just compensation for the property and such
improvements with dispatch.
 Further, the plaintiff-appellant is DIRECTED to obtain from the defendants-
appellees a quit claim over the appropriated 60-meter width portion of the subject
property.
No pronouncement as to costs.
SO ORDERED. 27
Spouses Buot moved for reconsideration wherein they argued that the 'taking' of
the affected portions of their land would effectively result in their outright deprivation
thereof, and prayed for the payment of the fair market value of the entirety of their
117,850-square-meter property. For its part, NGCP, in its Comment to the motion,
likewise sought the modification of the CA Decision, questioning the remand of the case
to the RTC on the 'mere possibility' that there could be an area beyond the 60-meter wide
easement which must be expropriated and compensated. 28
The CA, however, denied Spouses Buot's motion and NGCP's prayer for
modification of the Decision in the assailed Resolution. 29
Hence, this petition.
Issues before the Court
The issues presented in this case are: (a) whether the CA gravely erred in ruling
that power and transmission lines fall under "similar works" under Section 112 of CA No.
141; and (b) whether the CA gravely erred in remanding the case to the RTC for
determination of just compensation, among others.
Arguments of Spouses Buot
Spouses Buot posit that Section 112 of CA No. 141 excludes power or
transmission lines, asserting that the provision should be read together with Sections 113
and 114 of the same law which pertain exclusively to water power rights and privileges,
as well as right-of-way for specific projects. 30 They seek the application of the principle
of expressio unius est exclusio alterius instead of ejusdem generis. 31 For Spouses Buot,
the technical characteristics, peculiar attributes, and features of power or transmission
lines are distinctively atypical to the government projects as enumerated under CA No.
141. In addition, with Section 112 being a limitation upon proprietary rights, Spouses Buot
emphasize that the provision should be strictly construed so as not to deny the exercise
of a right which is not clearly intended to be restricted or withheld. 32TIADCc

Spouses Buot also contend that the annotation on their title covered only legal
easements for highways, right-of-way for railroads, irrigation systems, telegraph and
telephone lines, airport runways and terminal buildings, and other government structures
needed for full operation of the airport. 33
As to the amount of just compensation, Spouses Buot argue that there is no abuse
of authority in the RTC's valuation of the expropriated property at P1,000.00 per square
meter. They assert that the Judgment on Compromise Agreement dated May 14, 2008
in the Lamacan and Candaguit properties in Sibonga, Cebu, which pertained to more
isolated and outlying properties, is a reliable basis for just compensation, being a certified
recorded sale and an established valuation for properties in Sibonga, Cebu taken by
Transco in 1993. 34
Arguments of NGCP
NGCP asserts that it is not liable to pay just compensation for the area traversed
by the transmission lines on the subject property pursuant to Section 112 of CA No. 141,
as amended. It disagrees with the CA that there is a need to determine the dangling areas
which should be compensable as this was never put in issue before the RTC. 35
NGCP also maintains that there is an erroneous land classification in this case as
the subject property's tax declaration indicated "agricultural," in addition to the admissions
made by Spouses Buot that the property was planted with trees. NGCP further argues
that the declared value of the owner should be that as reflected in the tax declaration. 36
Moreover, NGCP questions the RTC's adoption of the valuations in two different
cases for properties located in the same municipality of Sibonga, Cebu. For NGCP, the
Bureau of Internal Revenue (BIR) zonal valuation at P1.50 per square meter and the
assessed value at P2.80 per square meter are more reliable data for the determination
of just compensation, which were ignored by the RTC. 37
Our Ruling
The petition is partly meritorious.
Power and transmission lines
are "similar works" under
Section 112 of CA No. 141.
Under Section 112 of CA No. 141, or The Public Land Act, as amended, lands
granted by patent shall be subject to a legal easement of right-of-way not exceeding 60
meters in width, which may be enforced by the government free of charge, save for the
value of the existing improvements thereon, for its infrastructure projects such as public
highways, irrigation ditches, aqueducts, and other similar works, viz.:
SEC. 112. Said land shall further be subject to a right-of-way not exceeding
sixty (60) meters on width for public highways, railroads, irrigation ditches,
aqueducts, telegraph and telephone lines, airport runways, including sites
necessary for terminal buildings and other government structures needed for full
operation of the airport, as well as areas and sites for government buildings for
Resident and/or Project Engineers needed in the prosecution of government-
infrastructure projects, and similar works as the Government or any public or quasi-
public service or enterprise, including mining or forest concessionaires, may
reasonably require for carrying on their business, with damages for the
improvements only.
Government officials charged with the prosecution of these projects or their
representatives are authorized to take immediate possession of the portion of the
property subject to the lien as soon as the need arises and after due notice to the
owners. It is however, understood that ownership over said properties shall
immediately revert to the title holders should the airport be abandoned or when the
infrastructure projects are completed and buildings used by project engineers are
abandoned or dismantled, but subject to the same lien for future improvements.
(Italics supplied)
SDAaTC

From the proceedings before the lower courts, it was established that the Torrens
title covering the subject property contained the following annotations:
"7. That pursuant to the pertinent provisions of Commonwealth Act No. 141, it
provides, Thus,
'IT IS HEREBY CERTIFIED that certain land situated in the MUNICIPALITY
OF SIBONGA, PROV. OF CEBU, more particularly bounded and described
as follows:
LOT NO. 1415, Cad. 315-D
xxx xxx xxx
 is registered in accordance with the provisions of Section 122 of the Land
Registration Act in the name of HERBERT BUOT, of legal age, Filipino,
married to Ophelia Completo subject to the provisions of the said Land
Registration Act and the Public Land Act, as well as to those of the Mining
Laws, if the land is mineral, and subject, further, to such conditions contained
in the original title as may be subsisting, and to the prov. of Sections 109, 110,
111, 112, 113, 114, 118, 121, 122 and 124 of Com. Act 141, as amended.
IT IS FURTHER CERTIFIED that said land was originally registered on the
9th day of DECEMBER, in the year nineteen hundred and Sixty-Nine in
Registration Book No. 21, page 156, of the Office of the Register of Deeds of
Province of Cebu, as Original Certificate of Title No. 4156, pursuant to a free
patent granted by the President of the Philippines, on the 18th day of April, in
the year nineteen hundred and sixty-nine under Act No. 496.'" 38 (Emphasis
omitted; italics and underscoring supplied.)
The importance of the easement of right-of-way in the case is rooted in the nature
and classification of the subject property, which was originally a public land prior to the
grant of a free patent in favor of Spouses Buot.
In De Leon v. De Leon-Reyes 39 (De Leon), the Court discussed that under The
Public Land Act, "there are two modes of disposing public lands through confirmation of
imperfect or incomplete titles: (1) by judicial confirmation; and (2) by administrative
legalization, otherwise known as the grant of free patents." 40
Specifically, Section 44 of CA No. 141, as amended RA 6940, 41 provides:
SEC. 44. Any natural-born citizen of the Philippines who is not the owner of
more than twelve (12) hectares who, for at least thirty (30) years prior to the
effectivity of this amendatory Act, has continuously occupied and cultivated, either
by himself or through his predecessors-in-interest a tract or tracts of agricultural
public lands subject to disposition, who shall have paid the real estate tax thereon
while the same has not been occupied by any person shall be entitled, under the
provisions of this Chapter, to have a free patent issued to him for such tract or
tracts of such land not to exceed twelve (12) hectares. 42
In De Leon, the Court emphasized that a free patent is a recognition that the land
applied for belongs to the government. 43 "A patent, by its very definition, is a
governmental grant of a right, a privilege, or authority." 44 Here, the government, through
the issuance of a free patent, conveyed a grant of public land to Spouses Buot, subject
to the property encumbrances laid out in Sections 112, 113, 114, 118, 121, 122, and 124
of CA No. 141, among others. 45
Spouses Buot assert that power or transmission lines are expressly excluded from
the list of projects specifically enumerated in Section 112 by the principle of expressio
unius est exclusio alterius, which means "the express mention of one person, thing, or
consequence implies the exclusion of all others." 46
This contention is without merit. acEHCD

A simple reading of Section 112 shows that Spouses Buot had conveniently
ignored the phraseology of the right-of-way easement under the provision which made
use at first, of terms referring to an enumeration of a specific class of works, i.e., "public
highways, railroads, irrigation ditches, aqueducts, telegraph and telephone lines," and
thereafter, interconnected it to the phrase, "and similar works as the Government or any
public or quasi-public service or enterprise" that is clearly
of extensive and general signification.
 Contrary to Spouses Buot's assertions, the phraseology in the statute precisely
calls for the application of the principle of ejusdem generis, which means "of the same
kind, class or nature," in that when general words follow a listing of particular cases, such
words are deemed to apply only to cases of the same kind as
those expressly mentioned. 47 "Thus, when broad expressions are used, such as, 'and
all others,' or 'any others' these are usually to be restricted to persons or things of the
same kind or class with those specifically named in the preceding words." 48
The purpose of the rule on ejusdem generis is to give effect to both the
particular and general words, by treating the particular words as indicating the class
and the general words as including all that is embraced in said class, although not
specifically named by the particular words. This is justified on the ground that if the
lawmaking body intended the general terms to be used in their unrestricted sense,
it would have not made an enumeration of particular subjects but would have used
only general terms. 49 (Citations omitted.)
Consequently, under the principle of ejusdem generis, the phrase "and similar
works as the Government or any public or quasi-public service or enterprise" applies to
works or projects of the kind specifically enumerated under Section 112, which obviously
pertain to government infrastructure projects intended for public use, with "power lines"
or "transmission lines" falling within the general clause.
As such, the CA correctly applied the principle of ejusdem generis in bringing life
to the phrase "and similar works as the Government or any public or quasi-public service
or enterprise." After all, "[i]t is a rule of legal hermeneutics that where general words follow
an enumeration of persons or things, by words of a particular or specific meaning, such
general words are not to be construed in their widest extent, but are to be held as applying
only to persons or things of the same general class as those specifically mentioned." 50
The nature of power or transmission lines 51 as a national government
infrastructure project intended for public use was aptly expounded by the CA in the
assailed Decision. As the CA correctly observed, the IRR of RA 8974, too, explicitly
includes power generation, transmission, and distribution projects among the national
government projects covered by the law. 52 As it stands, there is no doubt that the
installation of transmission lines is important to the continued growth of the country as
electricity moves our economy, making it a national concern. 53
This interpretation of the provision to include the installation of "power lines" or
"transmission lines" within the coverage of Section 112 of The Public Land Act is in
congruence with its undeniable public purpose. More importantly, it is reinforced by the
very fact that the power of eminent domain is vested by law upon a power line owner with
a franchise to operate, manage, or maintain the electric power lines 54 such as NGCP in
this case.
Spouses Buot's property is
subject to a legal easement of
right-of-way under Section 112
of The Public Land Act.
Based on these considerations, it is clear that there is a legal easement of right-of-
way in favor of the State over the subject property. The Torrens title of Spouses Buot
contained the express reservation that the land in question is covered by the provisions
of CA No. 141 or The Public Land Act. Thus, in accordance with Section 112, the property
is subject to a right-of-way not exceeding 60 meters in width, which NGCP may
appropriate for its Naga-Suba 138KV T/L Upgrading Project free of charge, with
the exception of the value of the improvements existing thereon that may be affected.
 Here, the width appropriated for NGCP's tower and overhead transmission lines
measures only 30 meters in width, with a total area of 7,382 square meters, 55 which is
well within the 60-meter wide threshold under Section 112. Consequently, NGCP may
indeed utilize the 7,382-square-meter portion of the subject property, plus the remaining
30-meter wide reservation or any part thereof, without any cost save for damages in
relation to the affected existing improvements thereon. In other words, only the portion of
the subject property that is not within the 60-meter wide easement shall be subject to just
compensation.
Pursuant to the Court's pronouncement in Republic of the Philippines v.
Andaya 56 (Andaya), a property owner is entitled to consequential damages if in
enforcing the legal easement under Section 112 of The Public Land Act on his/her
property, the remaining area would be rendered unusable and uninhabitable, viz.:
x x x "Taking," in the exercise of the power of eminent domain, occurs not
only when the government actually deprives or dispossesses the property owner
of his property or of its ordinary use, but also when there is a practical destruction
or material impairment of the value of his property. Using this standard, there was
undoubtedly a taking of the remaining area of Andaya's property. True, no burden
was imposed thereon and Andaya still retained title and possession, of the
property. But, as correctly observed by the Board and affirmed by the courts a quo,
the nature and the effect of the floodwalls would deprive Andaya of the normal use
of the remaining areas. It would prevent ingress and egress to the property and
turn it into a catch basin for the floodwaters coming from the Agusan River.
For this reason, in our view, Andaya is entitled to payment of just
compensation, which must be neither more nor less than the monetary equivalent
of the land. One of the basic principles enshrined in our Constitution is that no
person shall be deprived of his private property without due process of law; and in
expropriation cases, an essential element of due process is that there must be just
compensation whenever private property is taken for public use. Noteworthy,
Section 9, Article III of our Constitution mandates that private property shall not be
taken for public use without just compensation. 57 HSAcaE

The Court reiterated the Andaya doctrine in the case of Bartolata v. Rep. of the
Phils., 58 wherein it listed the two elements that must concur before a property owner can
become entitled to just compensation for the remaining property under Section 112 of
The Public Land Act: "(1) that the remainder is not subject to the statutory lien of right-of-
way; and (2) that the enforcement of the right-of-way results in the practical destruction
or material impairment of the value of the remaining property, or in the property owner
being dispossessed or otherwise deprived of the normal use of the said remainder." 59
The Court is mindful of the fact that the construction of power or transmission lines
would inevitably impose limitations on the land, which would, in turn, indefinitely deprive
the property owners of its normal use. 60 The presence of transmission lines, too, would
undoubtedly restrict the property owner's use of the property, 61 and it may even
endanger lives and limbs because of the high-tension electric current conveyed through
the lines.
To illustrate further, it should be emphasized that the property would also be
subject to the provisions of RA 11361, or the Anti-Obstruction of Power Lines Act. In
particular, Section 6 of the law prohibits any person, whether natural or juridical, public
or private, to:
(a) Plant or cause to be planted tall growing plants, including plants of whatever kind,
variety, or height within the power line corridor;
 (b) Construct or erect any hazardous improvements within the power line corridor;
(c) Conduct or perform any hazardous activities within the power line corridor;
(d) Prevent or refuse duly authorized agents of the owner or operator of power lines,
entry to the property in the performance of acts enumerated under Section
7: Provided, That such entry is in accordance with the provisions of Section
8; and
(e) Perform other analogous acts or activities, which will impair the conveyance of
electricity and cause damage to power lines.
Taking these factors into serious consideration, there is no question that Spouses
Buot are entitled to consequential damages for the areas before and in between the
transmission lines that lie outside the 60-meter wide easement, if any, which would be
rendered unusable or uninhabitable because of the traversing transmission lines.
Under National Power Board Resolution No. 94-313, "dangling" areas "refer to
those remaining small portions of the land not traversed by the transmission line project
but which are nevertheless rendered useless in view of the presence of the transmission
lines." 62 Therefore, a determination of the total dangling area is material in this case in
order to resolve the matter of consequential damages given that the 7,382-square-meter
portion subject of the easement of right-of-way is but a part and parcel of Spouses Buot's
117,850-square-meter property.
In summary, per the Andaya doctrine, NGCP is under no legal obligation to pay
just compensation for utilizing the 7,382-square-meter portion of the subject property,
which, as earlier discussed, is well within the 60-meter wide threshold provided under
Section 112 of The Public Land Act. Nevertheless, Spouses Buot may be awarded
consequential damages for the dangling areas affected by NGCP's transmission lines, if
any, that do not fall inside the coverage of the unutilized area of the 60-meter wide legal
easement on the subject property. As the Court clarified in Andaya, such area, though
unutilized, is still covered by Section 112, which limits the property owner's compensation
to the value of the affected improvements thereon, and not the value of the land per
se. 63AcICHD

Thus, the Court deems it proper to remand the case to the RTC for a thorough
determination of:
(1) The actual area of the 60-meter wide easement of right-of-way on the subject
property, which includes both the utilized and unutilized portion thereof;
(2) The dangling areas before and in between NGCP's transmission lines, which
are not within the 60-meter wide threshold under Section 112, if any, for
which consequential damages may be awarded; and
(3) The value of the improvements on the 7,382-square-meter portion of the
property corresponding to the total area of the 30-meter wide easement
actually utilized by NGCP, if there are any.
As regards the proper valuation of the improvements on the affected property, the
Court agrees with the CA that the amount of P567,500.00 awarded by the RTC to
Spouses Buot is not only provisional, but, more importantly, it lacked sufficient basis. This
is easily gleaned from the fact that the amount was determined by the RTC in its Order
dated February 12, 2008, which fixed the provisional value of the property and the
improvements thereon for the purpose of the issuance of a writ of possession in Transco's
favor. 64 Hence, this, too, must be reevaluated by the RTC for the award of the correct
amount of damages in compliance with Section 112 of The Public Land Act.
 The Court shall now discuss the matter of just compensation at P1,000.00 per
square meter for the 196-square-meter portion of the subject property acquired by NGCP.
Just compensation was properly
pegged at P1,000.00 per square
meter.
The only legal issue as to just compensation presented by Spouses Buot is
whether the CA erred in ruling that the RTC's determination of just compensation was not
in accordance with Section 5 of RA 8974.
Just compensation is defined in this wise:
Constitutionally, "just compensation" is the sum equivalent to the market
value of the property, broadly described as the price fixed by the seller in open
market in the usual and ordinary course of legal action and competition, or the fair
value of the property as between the one who receives and the one who desires
to sell, it being fixed at the time of the actual taking by the government. Just
compensation is defined as the full and fair equivalent of the property taken from
its owner by the expropriator. It has been repeatedly stressed by this Court that the
true measure is not the taker's gain but the owner's loss. The word "just" is used
to modify the meaning of the word "compensation" to convey the idea that the
equivalent to be given for the property to be taken shall be real, substantial, full
and ample. 65
Section 5 of RA 8974 provides for the standards that may be considered by the
courts in determining just compensation for national government infrastructure
projects, viz.:
SECTION 5. Standards for the Assessment of the Value of the Land Subject
of Expropriation Proceedings or Negotiated Sale. — In order to facilitate the
determination of just compensation, the court may consider, among other well-
established factors, the following relevant standards:
(a) The classification and use for which the property is suited;
(b) The developmental costs for improving the land;
(c) The value declared by the owners;
(d) The current selling price of similar lands in the vicinity;
(e) The reasonable disturbance compensation for the removal and/or
demolition of certain improvement on the land and for the value of
improvements thereon; TAIaHE

(f) This size, shape or location, tax declaration and zonal valuation of the land;
(g) The price of the land as manifested in the ocular findings, oral as well as
documentary evidence presented; and
(h) Such facts and events as to enable the affected property owners to have
sufficient funds to acquire similarly-situated lands of approximate areas
as those required from them by the government, and thereby
rehabilitate themselves as early as possible.
The Court, in Republic v. Cebuan, 66 notably described the enumeration in Section
5 of RA 8974 to be non-exclusive, permissive, and discretionary in character. 67 Simply
put, the courts are not strictly bound to mechanically follow each of these standards as
they are merely recommendatory in nature. 68 The determination of just compensation in
expropriation cases, after all, is a judicial function by constitutional mandate. As such,
any legislative enactment or executive issuance that aims to fix or provide a strict method
of computing just compensation would be tantamount to an impermissible encroachment
on judicial prerogatives. 69
To recall, the CA remanded the case to the RTC for the determination of the proper
amount of just compensation, among others, opining that the trial court's P1,000.00 per
square meter valuation of the expropriated property was unsupported by evidence.
The Court disagrees.
Contrary to NGCP's assertion, the RTC considered some of the factors
enumerated in Section 5 of RA 8974 in arriving at the just compensation to be paid to
Spouses Buot. In particular, these factors are: (a) the value declared by Spouses Buot
as the property owners; (b) the value of similar properties in the vicinity likewise
expropriated by NGCP for power or transmission lines; (c) the classification and use for
which the property is suited; (d) the property's location and current value; and (e) the
Commissioners' Report. 70
In fact, the RTC took into account not only NGCP's proposed valuation at the
measly amounts of P2.80 per square meter as the assessed value, P1.30 per square
meter as the zonal value, and P300.00-P500.00 per square meter as relative sales data
of adjacent lots, 71 but also the Commissioners' assessment of the subject property fixing
its minimum valuation at P600.00 per square meter. 72 The RTC, however, gave more
weight to the valuation at P1,000.00 per square meter of similarly situated properties that
were also expropriated by NGCP for the purpose of constructing transmission lines in the
same municipality. 73
Under these circumstances, the Court finds no cogent reason to annul and set
aside the RTC's valuation of the expropriated property. Upon review, it does not appear
that the RTC acted capriciously or arbitrarily in fixing the amount of just compensation for
the 196-square-meter portion of the subject property at P1,000.00 per square meter.
NGCP also assails the RTC's valuation of the subject property for being contrary
to its alleged classification as agricultural land as appearing in its tax declaration.
Moreover, it advances a computation of just compensation based on the meager zonal
and assessed values as shown in the property's tax declaration.
These contentions, however, are devoid of merit. cDHAES

In ascertaining the amount of just compensation, the courts enjoy sufficient judicial
discretion to determine the classification of lands as this is one of the relevant standards
for the assessment of the value of properties subject of expropriation proceedings. Still,
it must be stressed that the court's exercise of discretion in such cases is limited only for
the purpose of the proceedings, and is not meant to substitute the local government's
power to reclassify and convert lands through local ordinance. 74
Here, the Court notes the Commissioners' observation that the highest and best
use for the subject property is residential and, at the very least, industrial. 75 Thus, despite
the subject property's zonal classification as agricultural land in its tax declaration, what
is essential is the use to which the property is suited. The condition of the property and
its surroundings, as well as its improvements and capabilities, must be considered in
determining just compensation. 76
Moreover, it is settled that the courts are not limited to a certain numerical threshold
relative to the BIR zonal valuation of an expropriated property in the determination of just
compensation. "Zonal valuation is simply one of the indices of the fair market value of
real estate." 77 By itself, this index cannot be used as the sole basis to ascertain just
 compensation in expropriation cases because the standard is not the taker's gain, but the
owner's loss. 78
The insistence of NGCP, therefore, to base the value of the subject property solely
on its BIR zonal valuation at P1.50 per square meter or P2.80 per square meter as
assessed value is misplaced considering that these are only two of the several factors
which the court may consider to facilitate the determination of just compensation. To
reiterate, "[t]he zonal value alone of the properties in the area whether of recent or vintage
years does not equate to just compensation." 79 Otherwise, the determination of just
compensation would cease to be judicial in nature, which would, in turn, totally negate
the exercise of judicial discretion. 80
Ultimately, in expropriation cases, the courts are guided by certain standards for
valuation such as those mentioned in Section 5 of RA 8974. Thus, the Court is bound to
uphold the RTC's determination of just compensation, even if it is higher than the BIR
zonal value or assessed value of the expropriated property, for as long as the amount
fixed by the trial court is justified as the full and fair equivalent of the property, as in this
case.
Simply put, the RTC's valuation of the expropriated property, which the trial court
only determined after an evaluation of various factors, is more in accord with the principle
that the amount to be tendered as payment for the property to be taken for public use
shall be real, substantial, full, and ample, as guaranteed no less by the Constitution itself
and is included in the Bill of Rights. 81
WHEREFORE, the instant petition is PARTLY GRANTED. The Decision dated
February 9, 2018 and the Resolution dated June 18, 2018 of the Court of Appeals in CA-
G.R. CEB CV No. 05483 are AFFIRMED with MODIFICATION in that the case
is REMANDED to the Regional Trial Court for further proceedings, but only insofar as the
determination of consequential damages and damages in relation to the value of
improvements on the property affected by the legal easement of right-of-way are
concerned. ASEcHI

SO ORDERED.
||| (Spouses Buot v. National Transmission Corp., G.R. No. 240720, [November 17, 2021])
 UNITED BF HOMEOWNERS' ASSOCIATIONS, INC., ROMEO T.
VILLAMEJOR, RAUL S. LANUEVO, ROBERTO ARNALDO, FLORENTINO
CONCEPCION, BF NORTHWEST HOMEOWNERS’ ASSOCIATION, INC.,
KK HOMEOWNERS’ ASSOCIATION, INC.,
and BF (CRAB) HOMEOWNERS’ ASSOCIATION, INC., petitioners, vs.
THE (MUNICIPAL) CITY MAYOR, THE (MUNICIPAL) CITY PLANNING
AND DEVELOPMENT COORDINATING OFFICER OR ZONING
ADMINISTRATOR, THE (MUNICIPAL) CITY ENGINEER AND/OR
BUILDING OFFICIAL, THE CHIEF OF THE PERMITS AND LICENSES
DIVISION, THE SANGGUNIANG (BAYAN) PANGLUNGSOD, and
BARANGAY BF HOMES, ALL OF PARAÑAQUE CITY, METRO
MANILA, respondents.

EL GRANDE AGUIRRE COMMERCE AND TRADE ASSOCIATION (EL

ACTO), respondent-intervenor.

DECISION

CARPIO, J :p

The Case
This is a petition for review 1 of the 28 June 1999 Decision 2 and the 16 November
1999 Resolution 3 of the Court of Appeals in CA-G.R. SP No. 46624. The Court of Appeals
held that Municipal Ordinance No. 97-08 is a valid exercise of police power by the
Municipality of Parañaque. 4
The Facts
BF Homes Parañaque Subdivision (BF Homes Parañaque), with a land area
straddling the cities of Parañaque, Las Piñas, and Muntinlupa, is the largest subdivision in
the country.
On 11 November 1997, the Municipal Council of Parañaque enacted Municipal
Ordinance No. 97-08 5 entitled, "An Ordinance Prescribing the Comprehensive Land Use
Plan & Zoning of the Municipality of Parañaque Pursuant to the Local Government Code of
1991 and Other Pertinent Laws." Sections 11.5 and 11.6 of Municipal Ordinance No. 97-08,
reclassifying El Grande and Aguirre Avenues in BF Homes Parañaque from residential to
commercial areas, read:
11.5 C-1 LOW INTENSITY COMMERCIAL ZONES
xxx xxx xxx
BARANGAY BF HOMES
Lot deep both side[s] along Aguirre Avenue from Governor A. Santos Street
eastward to Gng. Elsie Gatches Street
Lot deep both side[s] along El Grande Avenue from Lopez Avenue gate southward
to corner Aguirre Avenue
xxx xxx xxx
11.6 C-2 MAJOR COMMERCIAL ZONES
 xxx xxx xxx
BARANGAY BF HOMES
Lot deep both side[s] along Aguirre Avenue from Dallas to El Grande Avenue
Lot deep both side[s] along Aguirre Avenue from El Grande Avenue to Gov. A.
Santos Street
BF Parañaque Commercial Plaza
Area bounded on the
North - Pres. Quezon Street
South - A. Aguirre Avenue
East - President's Avenue
West - MMP, Creek along BF Homeowner's Association
clubhouse
Lot deep east side along President's Avenue from Mac Donald southward to M.
Rufino Street
Area bounded on the
North - A. Aguirre Avenue
South - A. Soriano Sr. & M. Rufino Street
East - President's Avenue
West - Gng. Elsie Ga[t]ches Street
xxx xxx xxx. 6
On 27 January 1998, the United BF Homeowners' Associations, Inc.
(UBFHAI), 7 several homeowner's associations, and residents of BF Homes Parañaque
(collectively petitioners) filed with the Court of Appeals a petition for prohibition with an
application for temporary restraining order and preliminary injunction. Petitioners questioned
the constitutionality of Sections 11.5, 11.6, 15, 8 17, 9 and 19.6 10 of Municipal Ordinance
No. 97-08.
Petitioners alleged that the reclassification of certain portions of BF Homes
Parañaque from residential to commercial zone is unconstitutional because it amounts to
impairment of the contracts between the developer of BF Homes Parañaque and the lot
buyers. Petitioners cited the annotation on the lot buyers' titles which provides that "the
property shall be used for residential purposes only and for no other purpose."
On the other hand, public respondents alleged that the passage of Municipal
Ordinance No. 97-08 is a valid exercise of police power by the Municipal Council of
Parañaque and that such ordinance can nullify or supersede the contractual obligations
entered into by the petitioners and the developer.
Meanwhile, El Grande Aguirre Commerce and Trade Organization (EL ACTO), a non-
stock, non-profit corporation, intervened as respondent. EL ACTO claimed that its members
are lot owners, residents, and operators of commercial establishments along El Grande and
Aguirre Avenues in BF Homes Parañaque, who will be affected if Municipal Ordinance No.
97-08 is declared unconstitutional. EL ACTO asserted that Municipal Ordinance No. 97-08
is a valid exercise of police power and that petitioners are guilty of estoppel since petitioners
endorsed the opening of many of these commercial establishments in BF Homes
Parañaque. EL ACTO further alleged that the instant petition should have been initially filed
with the Regional Trial Court in accordance with the principle of hierarchy of courts.
On 28 June 1999, the Court of Appeals dismissed the petition. Petitioners moved for
reconsideration, which the Court of Appeals denied.
Hence, this petition.
The Ruling of the Court of Appeals
Citing the General Welfare Clause 11 of Republic Act No. 7160 (RA 7160), the Court
of Appeals held that the enactment of Municipal Ordinance No. 97-08 which, among others,
reclassified El Grande and Aguirre Avenues in BF Homes Parañaque as commercial zones,
was a valid exercise of police power by the Municipality of Parañaque.
The Court of Appeals took judicial notice of the fact that El Grande and Aguirre
Avenues are main streets of BF Homes Parañaque which have long been commercialized,
thus:
The declaration of El Grande and Aguirre Avenues as commercial zones
through Municipal Ordinance No. 97-08 is an exercise of police power. HcSaTI

Obviously, because of the rapid and tremendous increase in population, the

needs of the homeowners in the BF Parañaque Subdivision grew. The commercial
zones in the area proved inadequate to service the needs of its residents. There was
therefore a need to open more commercial districts. In fact, records show that
several homeowners along El Grande and Aguirre Avenues converted their
residences into business establishments. El Acto's members are among them.
Aside from the increasing number of commercial establishments therein,
judicial notice may be taken of the fact that El Grande and Aguirre Avenues are main
thoroughfares of BF Homes Parañaque which have long been commercialized. The
local government therefore responded to these changes in the community by
enacting Ordinance No. 97-08 . . . 12
The Issues
Petitioners raise the following issues:
1. Whether R.A. 7160, the Local Government Code of 1991 has repealed PD 957,
the Subdivision and Condominium Buyer's Protective Decree;
2. Whether the power of local government units to enact comprehensive zoning
ordinances has legal limitations;
3. Whether Municipal Ordinance No. 97-08 is a legitimate exercise of police power;
4. Whether Municipal Ordinance No. 97-08 is constitutional considering that it
impairs a contractual obligation annotated in homeowners' titles and violates
the doctrine of separation of powers;
5. Whether Municipal Ordinance No. 97-08 is enforceable pending review by the
MMDA, the Metro Manila Mayor's Council and the HLURB. 13
The resolution of these issues turns on the validity of Municipal Ordinance No. 97-08.
The Ruling of the Court
The petition is without merit.
Power to Enact Zoning Ordinances
 The Municipal Council of Parañaque enacted Municipal Ordinance No. 97-08
pursuant to the provisions of RA 7160 and Executive Order No. 72. 14
Under Section 447 of RA 7160, the Sangguniang Bayan or the Municipal Council, as
the legislative body of the municipality, has the power to enact ordinances for the general
welfare of the municipality and its inhabitants.
Among the functions of the Sangguniang Bayan enumerated under Section 447 of RA
7160 are:
(2) Generate and maximize the use of resources and revenues for the development
plans, program objectives and priorities of the municipality as provided for
under Section 18 of this Code with particular attention to agro-industrial
development and countryside growth and progress, and relative thereto, shall:
xxx xxx xxx
(vii) Adopt a comprehensive land use plan for the
municipality: Provided, That the formulation, adoption, or
modification of said plan shall be in coordination with the approved
provincial comprehensive land use plan;
(viii) Reclassify land within the jurisdiction of the municipality subject to
the pertinent provision of this Code;
(ix) Enact integrated zoning ordinances in consonance with the
approved comprehensive land use plan, subject to existing
laws, rules and regulations; establish fire limits or zones, particularly
in populous centers; and regulate the construction, repair or
modification of buildings within said fire limits or zones in accordance
with the provisions of the Fire Code; (Emphasis supplied)
On the other hand, Executive Order No. 72 provides:
SECTION 1. Plan formulation or updating. — (a) Cities and municipalities
shall continue to formulate or update their respective comprehensive land use
plans, in conformity with the land use planning and zoning standards and
guidelines prescribed by the HLURB pursuant to national policies.
As a policy recommending body of the LGU, the city or municipal
development council (CDC/MDC) shall initiate the formulation or updating of its land
use plan, in consultation with the concerned sectors in the community. For this
purpose, the CDC/MDC may seek the assistance of any local official or field officer
of NGA's operation in the LGU.
The city or municipal planning and development coordinator (CPDC/MPDC)
and/or the city or municipal agriculturist, if there is any, shall provide the technical
support services and such other assistance as may be required by the CDC/MDC to
effectively carry out this function.
The comprehensive land use plan prepared by the CDC/MDC shall be
submitted to the sangguniang panglungsod or sangguniang bayan, as the
case may be, for enactment into a zoning ordinance. Such ordinance shall be
enacted and approved in accordance with Articles 107 and 108 of the Implementing
Rules and Regulations (IRR) of the LGC.
(b) The comprehensive land use plans of component cities and municipalities
shall be formulated, adopted, or modified in accordance with the approved provincial
comprehensive land use plans.
 (c) Cities and municipalities of metropolitan Manila shall continue to formulate
or update their respective comprehensive land use plans, in accordance with the
land use planning and zoning standards and guidelines prescribed by the HLURB
pursuant to EO 392, S. of 1990, and other pertinent national policies.
xxx xxx xxx (Emphasis supplied)
Under Section 3 (m), Rule 131 of the Rules of Court, there is a presumption that official
duty has been regularly performed. Thus, in the absence of evidence to the contrary, there
is a presumption that public officers performed their official duties regularly and legally and
in compliance with applicable laws, in good faith, and in the exercise of sound judgment. 15
We find no sufficient evidence disputing the regularity of the enactment of Municipal
Ordinance No. 97-08. Before the Municipal Council of Parañaque passed Municipal
Ordinance No. 97-08, 16 it has been the subject of barangay consultations and committee
hearings in accordance with Executive Order No. 72.
Reclassification of El Grande and Aguirre Avenues
Contrary to petitioners' allegations, we find Municipal Ordinance No. 97-08 reasonable
and not discriminating or oppressive with respect to BF Homes Parañaque. As held by the
Court of Appeals, the increasing number of homeowners in BF Homes Parañaque
necessitated the addition of commercial areas in the subdivision to service the needs of
the homeowners. In fact, several homeowners along El Grande and Aguirre Avenues
already converted their residences into business establishments. Furthermore, as found by
the Court of Appeals, El Grande and Aguirre Avenues are main thoroughfares in BF Homes
Parañaque which have long been commercialized.
Even petitioner UBFHAI, the recognized umbrella organization of all homeowners'
associations in BF Homes Parañaque, acknowledged the need for additional commercial
area. Records reveal that as early as 30 July 1989, UBFHAI recommended for approval an
"Amended Integrated Zoning Policies and Guidelines for BF Homes Parañaque." 17 UBFHAI
proposed another commercial zone in BF Homes Parañaque to accommodate the growing
needs of the residents, thus:
Subject to the approval of BF Homes, Inc., the Local Zoning Official/Planning
Officer of Parañaque and the Metro Manila Commission and in recognition of the
fact that the subdivision has tremendously grown in size and population since
1983 when the above-mentioned guidelines of the MMC [Ordinance 81-01]
were promulgated, such that one commercial zone for the entire subdivision
is now inadequate vis-a-vis the needs of the residents, the UBFHAI is
proposing another commercial zone in Phase III of the Subdivision, in the
vicinity of the Parish of the Presentation of the Child Jesus as follows:
One lot deep along Aguirre Avenue from Gov. Santos St., to the end of
Aguirre Avenue and two lots deep along El Grande from where it
intersects Aguirre Avenue.
Pending approval of the aforesaid proposal, commercial buildings
constructed and existing in the aforesaid area will be given temporary-use
permits good for five (5) years from December 31, 1986 or until December 31,
1991, after which, the same must revert to residential status, unless, in the meantime
the proposal is approved, provided all such buildings must comply with the set-back
and parking provision of the Metro Manila Commission Ordinance 81-01; I.M. 09-83.
xxx xxx xxx
The term for temporary use permits of the designated commercial area
shall be considered extended for 8 years from December 31, 1991 to December
 31, 1998; without prejudice to the official conversion of the area under existing
MMA/LGC guidelines to commercial. 18 (Emphasis supplied)
Thus, UBFHAI's proposed new commercial area, encompassing El Grande and
Aguirre Avenues, is substantially the same area, which Municipal Ordinance No. 97-08 later
reclassified as a commercial zone.
Furthermore, in the subsequent years, UBFHAI and its member homeowners'
associations endorsed the issuance of municipal and barangay permits for commercial
establishments along El Grande and Aguirre Avenues. Contrary to petitioners' allegations,
the commercial establishments endorsed by UBFHAI were not mere convenience stores,
which Metro Manila Commission Ordinance No. 81-01 19 and Municipal Ordinance No. 97-
08 allow in residential areas. Among the commercial establishments which UBFHAI
endorsed were a trading business, 20 electronics repair shop, 21 mini-grocery store, 22 beauty
salon, 23 school, 24 dress shop, 25 and consultancy or management services business. 26
Clearly, the reclassification of El Grande and Aguirre Avenues in BF Homes
Parañaque as commercial area was reasonable and justified under the circumstances.
Non-Impairment of Contract
Petitioners invoke Presidential Decree No. 957 (PD 957), 27 otherwise known as
the Subdivision and Condominium Buyers' Protective Decree. Petitioners maintain that PD
957 is intended primarily to protect the buyers and to ensure that subdivision developers
keep their promises and representations. Petitioners allege that one of the promises of the
developer of BF Homes Parañaque is that the property shall be used for residential purposes
only. Petitioners assert that the reclassification of certain portions of BF Homes Parañaque
from residential to commercial zone is unconstitutional because it impairs the contracts
between the developer of BF Homes Parañaque and the lot buyers.
The Court has upheld in several cases the superiority of police power over the non-
impairment clause. 28 The constitutional guaranty of non-impairment of contracts is limited
by the exercise of the police power of the State, in the interest of public health, safety, morals
and general welfare. 29
In Ortigas & Co., Limited Partnership v. Feati Bank and Trust Co., 30 the Court held
that contractual restrictions on the use of property could not prevail over the reasonable
exercise of police power through zoning regulations. The Court held:
With regard to the contention that said resolution cannot nullify the contractual
obligations assumed by the defendant-appellee — referring to the restrictions
incorporated in the deeds of sale and later in the corresponding Transfer Certificates
of Title issued to defendant-appellee — it should be stressed, that while non-
impairment of contracts is constitutionally guaranteed, the rule is not
absolute, since it has to be reconciled with the legitimate exercise of police
power, i.e., "the power to prescribe regulations to promote the health, morals,
peace, education, good order or safety and general welfare of the people."
Invariably described as "the most essential, insistent, and illimitable of
powers" and "in a sense, the greatest and most powerful attribute of
government," the exercise of the power may be judicially inquired into and
corrected only if it is capricious, whimsical, unjust or unreasonable, there
having been a denial of due process or a violation of any other applicable
constitutional guarantee. As this Court held through Justice Jose P. Bengzon
in Philippine Long Distance Company v. City of Davao, et al., police power "is elastic
and must be responsive to various social conditions; it is not confined within narrow
circumscriptions of precedents resting on past conditions; it must follow the legal
progress of a democratic way of life." We were even more emphatic in Vda. De
 Genuino v. The Court of Agrarian Relations, et al., when We declared: "We do not
see why the public welfare when clashing with the individual right to property
should not be made to prevail through the state's exercise of its police
power." aSCHcA

Resolution No. 27. s-1960 declaring the western part of Highway 54, now E.
de los Santos Avenue (EDSA, for short) from Shaw Boulevard to the Pasig River as
an industrial and commercial zone, was obviously passed by the Municipal Council
of Mandaluyong, Rizal in the exercise of police power to safeguard or promote the
health, safety, peace, good order and general welfare of the people in the locality.
Judicial notice may be taken of the conditions prevailing in the area, especially where
Lots Nos. 5 and 6 are located. The lots themselves not only front the highway;
industrial and commercial complexes have flourished about the place. EDSA, a main
traffic artery which runs through several cities and municipalities in the Metro Manila
area, supports an endless stream of traffic and the resulting activity, noise and
pollution are hardly conducive to the health, safety or welfare of the residents in its
route. Having been expressly granted the power to adopt zoning and subdivision
ordinances or regulations, the municipality of Mandaluyong, through its Municipal
Council, was reasonably, if not perfectly, justified under the circumstances, in
passing the subject resolution. 31 (Emphasis supplied)
Likewise, in Sangalang v. Intermediate Appellate Court, 32 the Court upheld Metro
Manila Commission Ordinance No. 81-01, which reclassified Jupiter Street in Makati into a
high-density commercial zone, as a legitimate exercise of police power. The Court held that
the power of the Metro Manila Commission and the Makati Municipal Council to enact zoning
ordinances for the general welfare prevails over the deed restrictions on the lot owners in
Bel-Air Village which restricted the use of the lots for residential purposes only. The Court
held:
It is not that we are saying that restrictive easements, especially the
easements herein in question, are invalid or ineffective. As far as the Bel-Air
subdivision itself is concerned, certainly, they are valid and enforceable. But they
are, like all contracts, subject to the overriding demands, needs, and interests of the
greater number as the State may determine in the legitimate exercise of police
power. Our jurisdiction guarantees sanctity of contract and is said to be the
"law between the contracting parties," but while it is so, it cannot contravene
"law, morals, good customs, public order, or public policy." Above all, it
cannot be raised as a deterrent to police power, designed precisely to promote
health, safety, peace, and enhance the common good, at the expense of
contractual rights, whenever necessary. . . . 33 (Emphasis supplied)
Similarly, in this case, Municipal Ordinance No. 97-08 is a legitimate exercise of police
power and the reclassification of El Grande and Aguirre Avenues in BF Homes Parañaque
is not arbitrary or unreasonable.
WHEREFORE, we AFFIRM the Decision dated 28 June 1999 and the Resolution
dated 16 November 1999 of the Court of Appeals in CA-G.R. SP No. 46624.
SO ORDERED
(United BF Homeowners' Association, Inc. v. The (Municipal) City Mayor, Parañaque City,
|||

G.R. No. 141010, [February 7, 2007], 543 PHIL 684-700)

 NATIONAL POWER CORPORATION, petitioner, vs. HEIRS OF
SALVADOR SERRA SERRA, HEIRS OF GREGORIO SERRA SERRA,
MARGARITA SERRA SERRA, FRANCISCA TERESA SERRA SERRA,
FRANCISCO JOSE SERRA SERRA, SPOUSES PRIMITIVO HERNAEZ and
PAZ BACOL, SPOUSES BERNARDINO MONCERA and ROGACIANA
HERNAEZ, SPOUSES AMBROSIO FORTALIZA AND LUISA HERNAEZ;
BANK OF THE PHILIPPINE ISLANDS, represented by its Manager, LUIS
A. PUENTEVELLA and ARSENIO AL ACUÑA, respondents.

RESOLUTION

J.C. REYES, JR., J :p

This is a Petition for Review filed under Rule 45 of the Rules of Court against the
Decision 1 dated October 29, 2014 and Resolution 2 dated April 8, 2016 of the Court of
Appeals-Cebu City (CA-Cebu City) in CA-G.R. CV No. 04256, which affirmed with
modification the Decision 3 dated May 26, 2011 of the Regional Trial Court (RTC) of
Kabankalan City, Branch 61, in a case for eminent domain.
The pertinent facts follow.
Petitioner National Power Corporation (NAPOCOR) is a government-owned and
controlled corporation, created and existing by virtue of Republic Act No. 6395, as
amended. 4
On October 16, 1998, NAPOCOR filed a Complaint for eminent domain before the
RTC of Kabankalan City against the Heirs of Salvador Serra Serra, Heirs of Gregorio
Serra Serra, Margarita Serra Serra, Francisca Teresa Serra Serra, Francisco Jose Serra
Serra, Spouses Primitivo Hernaez and Paz Bacol, Spouses Bernardino Moncera and
Rogaciana Hernaez, Spouses Ambrosio Fortaliza and Luisa Hernaez, Arsenio Al Acuña
and the Bank of the Philippine Islands, represented by its Manager, Luis A. Puentevella
(respondents). 5 The complaint alleges that to enable NAPOCOR to construct and
maintain its Kabankalan-Maricalum 138KV Transmission Line Island Grid Project, a
project for public purpose, it is both necessary and urgent to acquire easement of right of
way over portions of parcels of land, particularly Lot Numbers 2746 and 1316, owned and
possessed by the respondents, consisting of more or less a total area of 54,060 square
meters. 6
After depositing the amount of P258,000.00 with the Philippine National Bank,
Kabankalan Branch (PNB-Kabankalan), representing the provisional and assessed value
of the property affected, NAPOCOR was placed in possession of the subject properties
on August 3, 1999. 7
Due to the need to include Lot 2747 and its improvements, considering NAPOCOR
has also taken possession of the property, NAPOCOR was directed to amend its
complaint on March 10, 2000. 8 Thus, the Amended Complaint included Lot 2747 and
increased the total area for expropriation to more or less 60,526.50 sq. meters. 9
In an Order dated April 29, 2003, the RTC dismissed the case without prejudice,
for failure to prosecute for an unreasonable length of time, which was reconsidered and
set aside on October 15, 2003. 10 It then constituted a Board of Commissioners to
determine the just compensation for the affected properties, which submitted its report
on October 25, 2007. 11
 Eventually, on May 26, 2011, the RTC rendered its Decision ordering the
expropriation of the lands in question. 12 In determining just compensation, the RTC took
into account and gave weight to the empirical data provided by Department of Finance
Department Order No. 60-97, which assigned zonal values for 1997. 13 It also considered
the fact that the lots were planted with sugarcane despite its residential classification, as
well as the extent of disturbance that the expropriation would cause to the
respondents. 14 As disposed:
WHEREFORE, premises considered, in the interest of justice, judgment is
hereby rendered in favor of [NAPOCOR] as follows:
(a) An order of expropriation is hereby issued declaring x x x NAPOCOR to
have the lawful right to take the properties of the [respondents] as
alleged in the amended complaint particularly in Lot(s) No. 1316 with
an affected area of 16,560 sq. meters, more or less; Lot Nos. 2746
(717-A) with an affected area of 37,500 sq. meters more or less and
Lot No. 2747 (717-B) with an affected area of 6,466.50 more or less,
as shown by the respective sketch plans for the areas affected as
annexed to the complaint, for the purpose of the operation of
[NAPOCOR's] Kabankalan-Maricalum 138 KV Transmission Island
Grid Project. [NAPOCOR] having been installed in the possession of
the areas expropriated shall continue to possess the same.
(b) x x x NAPOCOR is hereby ordered to pay the Estate of Primitivo Hernaez,
Luisa Hernaez and Rogaciana Hernaez, through its Judicial
Administrators, just compensation for the properties expropriated as
follows:
1) P9,356,400.00 representing just compensation for Lot 1316 with an
affected area of 16,560 sq. meters more or less;
2) P8,156,250.00 representing just compensation for Lot 2746 (717-A) with
an affected area of 37,500 sq. meters more or less;
3) P1,406,463.75 representing just compensation for Lot 2747 (717-B) with
an affected area of 6,466.50 sq. meters more or less;
(c) The amount of P258,000.00 earlier deposited with the Philippine National
Bank shall be deducted from the total amount of just compensation of
the subject properties and thus the remaining balance to be paid by
[NAPOCOR] to [respondents] as just compensation shall be
P18,661,113.75 with legal interest from taking of possession until fully
paid.
SO ORDERED. 15
On appeal, the CA-Cebu City rendered the assailed Decision dated October 29,
2014, affirming with modification the decision of the RTC. 16 It found the trial court's
reliance on other indices of the value of the properties, including but not limited to their
actual use and potential, proper and well founded. 17 Thus:
WHEREFORE, premises considered, the appeal is DENIED. The [May 26,
2011] Decision of the Regional Trial Court (RTC), [6th] Judicial Region, Branch [61]
of [Kabankalan City], in Civil Case No. [861] is AFFIRMED, with MODIFICATION,
in that paragraph (c) thereof should read:
(c) the amount of [P]258,000.00 earlier deposited with the Philippine National
Bank shall be deducted from the total amount of just compensation of
the subject properties and thus the remaining balance to be paid by
[NAPOCOR] to [respondents] as just compensation shall be
 P18,661,113.75 with legal interest of 12% per annum from taking of
possession until fully paid.
SO ORDERED. 18
On April 8, 2016, the CA denied NAPOCOR's Motion for Reconsideration, but
amended its dispositive portion in the assailed decision on account of errors. 19 The
amended portion presently reads:
WHEREFORE, premises considered, the appeal is DENIED. The May 26,
2011 Decision of the Regional Trial Court (RTC), 6th Judicial Region, Branch 61
of Kabankalan City, in Civil Case No. 861 is AFFIRMED, with MODIFICATION, in
that paragraph (c) thereof should read:
(c) the amount of [P]258,000.00 earlier deposited with the Philippine National
Bank shall be deducted from the total amount of just compensation of
the subject properties and thus the remaining balance to be paid by
[NAPOCOR] to [respondents] as just compensation shall be
P18,661,113.75 with legal interest of 12% per annum from the time
of the filing of the complaint until fully paid.
SO ORDERED. 20
Undeterred, NAPOCOR filed this petition, raising the lone issue of whether or not:
The amount of just compensation awarded to respondents should be based on the
prevailing price and character of the property at the time [of] filing of the Complaint
for eminent domain [in] 1998. 21
NAPOCOR submits that the court a quo erred by considering the improvements
on the property as of 2006 in fixing the amount of just compensation. 22 On the other
hand, respondents argue that NAPOCOR misleads us by contending that the RTC
erroneously determined just compensation which the RTC based on established factors
affecting the value of the properties in 1998 conformably with Rule 67 of the Rules of
Court. 23
Upon careful review of the petition, we find no need to remand this case for a re-
determination of just compensation.
As correctly noted by the CA-Cebu City, the RTC properly ascertained the value
and character of the property as of the time of the filing of the complaint (the year 1998),
pursuant to the appropriate period under the Rules of Court and jurisprudence. 24 The
appellate court observed that the trial court did not consider the improvements on the
subject properties as of 2006, which is certainly not the proper period for the correct
determination of just compensation in this case. The assailed decision partly reads:
Though the trial court made mention of the observations of the Commissioners,
particularly the improvements had on the subject properties, after the year 1998 or
after the filing of the original expropriation complaint thereon; a closer scrutiny of
the ratiocinations of the trial court reveals, that it did not take into consideration
these improvements in determining just compensation. 25
"Factual findings of the trial and appellate courts will not be disturbed by this Court
unless they are grounded entirely on speculations, surmises, or conjectures, among
others." 26 NAPOCOR's submission raises a new factual allegation. As a rule, this Court
is not a trier of facts. Only questions of law distinctly set forth in the petition ought to be
raised before this Court. 27 The petition now refers to a particular period — that is, the
year 2006 — on which allegedly, the trial court erroneously based its determination. This
strains the Court to review the evidence. We, however, find no valid ground that would
warrant a reversal of the factual findings of the appellate court or any reasonable basis
to treat this case as an exception.
In the first place, the allegation does not hold. NAPOCOR either misconstrues the
ruling of the appellate court or makes it appear that in determining just compensation, the
courts a quo recognized the improvements in the year 2006. As alleged in NAPOCOR's
petition:
The trial court fixed the assailed amount of just compensation of the subject
properties taking into consideration the fact that there were existing improvements
within the vicinity of these properties. x x x This ruling was affirmed by the Court of
Appeals, ruling that the values proposed by respondents were "based on a
comparative analysis of the fair market value of the properties' peripheral area in
the year 2006."
It is respectfully submitted that the courts a quo erred in considering said
improvements as of the year 2006 in fixing the amount of just compensation.
(Underscoring supplied) 28
The portion of the decision from which the quoted phrase was lifted reveals that
the statement refers to respondents' proposal, which the court a quo expressly did not
take into account because it was "based on generalities" and "not hinged upon the
relevant period." The relevant portion, in fact, reads:
From the foregoing, it is therefore beyond cavil that the amounts arrived at
by the court deserve more merit, than the figures proposed by either [NAPOCOR
or respondents] before it. It is worth mentioning that the values proposed by
[NAPOCOR] in the complaint were solely based on the tax declarations of the
subject properties issued in 1996. The values proposed by [respondents] were, on
the other hand, "based on a comparative analysis of the fair market value of the
properties' peripheral area in the year 2006." While [NAPOCOR's] tax declaration,
cannot, by and of itself, be an absolute substitute to just compensation. The
comparative analysis of [respondents] is to Us plainly based on generalities and
not hinged upon the relevant period. (Underscoring supplied) 29
A complete textual reading does not in any way show that the RTC, as affirmed by
the CA, adopted respondents' proposal in arriving at the fair market value of the subject
properties. The RTC properly based its valuation on the year 1998, and not 2006. It plainly
arrived at the disputed amount independently, after considering the commissioners'
report and both parties' respective proposals.
Having addressed the RTC's ascertainment of the value and character of the
properties, we now tackle the interest rate imposed on the amount to be paid to the
respondents. It is settled that "the difference in the amount between the final amount as
adjudged by the court and the initial payment made by the government — which is part
and parcel of the just compensation due to the property owner — should earn legal
interest as a forbearance of money." 30 Here, the amount deposited by NAPOCOR with
PNB-Kabankalan constitutes the initial payment that was accordingly deducted by the
RTC from the final amount adjudged as just compensation.
To recall, in the RTC's May 26, 2011 Decision, it ordered the payment of legal
interest on the balance of the just compensation computed from the taking of possession
of the properties until fully paid. When the CA-Cebu City sustained the RTC's valuation
of the properties, it specified the legal interest as 12% per annum, still computed from
taking of possession until fully paid. However, in the CA-Cebu City's subsequent
resolution on reconsideration, it modified the reckoning period to commence from the
time of the filing of the complaint until fully paid. It appears that the reckoning point in
 Rule 67 for the valuation of expropriated property was similarly applied by the appellate
court to the interest rate imposable on the just compensation.
In Republic v. Macabagdal, 31 we had occasion to point out that accrual of legal
interest should begin "not from the date of the filing of the complaint but from the date of
the issuance of the Writ of Possession x x x, since it is from this date that the fact of the
deprivation of property can be established."
In Evergreen Manufacturing Corp. v. Republic, 32 the filing of the expropriation
complaint also preceded the actual taking of the property and we ruled that "the just
compensation shall be appraised as of [the date of filing of the complaint]," and clarified
that "no interest shall accrue as the government did not take possession of the subject
premises." We then held that the legal interest, on the difference between the final
amount adjudged by the Court and the initial payment made, shall accrue from when the
government was able to take possession of the property. Here, it was established that
the amount deposited by NAPOCOR with PNB-Kabankalan caused it to be placed in
possession of the expropriated properties on August 3, 1999. Hence, it is from this date
that legal interest should begin to run.
As to the applicable interest rate specified by the CA-Cebu City as 12% p.a., this
is applicable only until June 30, 2013, in line with Secretary of the Department of Public
Works and Highways v. Spouses Tecson, 33 which upheld the applicability of Bangko
Sentral ng Pilipinas-Monetary Board Circular No. 799, Series of 2013 to forbearances of
money in expropriation cases. Accordingly, the applicable legal interest is 6% per annum
from July 1, 2013 until the finality of this resolution. 34 Thereafter, the total amount due
shall earn legal interest of 6% per annum from finality of the Court's resolution until full
payment. 35
WHEREFORE, the Decision dated October 29, 2014 and Resolution dated April 8,
2016 of the Court of Appeals-Cebu City in CA-G.R. CV No. 04256 are AFFIRMED
subject to the MODIFICATION imposing legal interest at the rate of 12% per annum on
the difference between the total amount of just compensation and the initial deposit,
which is PhP18,661,113.75, computed from August 3, 1999 until June 30, 2013.
Thereafter, the remaining balance of the just compensation shall earn legal interest of
6% per annum from July 1, 2013 until the finality of this resolution. Moreover, the total
amount of just compensation shall earn legal interest of 6% per annum from the finality
of this resolution until full payment.
SO ORDERED.
(National Power Corp. v. Heirs of Serra Serra, G.R. No. 224324 (Resolution), [January
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22, 2020])