NPC v.

CA
254 SCRA 577 | March 11, 1996
PANGANIBAN, J.

Payment of just compensation to be determined as of the date of the filing of the complaint,
not at the time of taking.

FACTS

Petition for review on certiorari the decision of Court of Appeals affirming the trial courts
judgment on the expropriation proceedings.

In 1978, National Power Corporation (NPC) took possession of a lot in Marawi City owned by
Mangondatu, under the mistaken belief that is was public property. Despite Mangondatus
protests, NPC defended its actions by claiming that it was already paying financial assistance
to the city in exchange for the citys waiver of right over the property.

More than a decade later, NPC finally recognized that the lot was private property belonging to
Mangondatu and entered into a deed of sale with him. The fair market value of the property was
determined by Marawi Citys appraisal committee. A first resolution was issued by the NPC
Board, fixing the amount at P100/m2 for the 12,000m2 portion of the lot, plus 12% interest per
annum from 1978.

When NPCs regional counsel reclassified the lot to industrial, they issued two memoranda
declaring the value of the property at P300/m2. Despite the increase in the value of the property,
NPC resolved to pay Mangondatu P100/m2 without interest. Mangondatu demanded for the
P300/m2 price, and during the pendency of the final value, he demanded to be paid P100/m2.

In 1992, Mangondatu filed a civil case before the lower court to recover his property from NPC,
and demanded a monthly rent instead at P15,000/month from 1978. He also filed a TRO against
the company. It was only during this time that NPC filed a complaint for eminent domain against
Mangondatu over the subject property.

According to Mangondatu, NPCs actions amounted to an unauthorized taking and continued

possession of his property since 1978, and that damages must be awarded to him for being
deprived of its use for more than a decade. He requested that just compensation for the land be
reckoned at the time of the filing of expropriation case. NPC opposed Mangondatus terms,
stating that the assessed value of the property should be computed from the time of the taking in
1978.

At the time of filing of complaint in 1992, the fair market value of the property was already at
P1000/m2. The lower court decided to condemn the property in favor of NPC and declared the
fair market value to be computed from the time the complaint was filed, which led to a total of
P21,995,000 as just compensation.

The Court of Appeals affirmed the lower courts decision.

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ISSUES AND HOLDING

1. Whether the value of just compensation for the property was to be computed in 1992
when the complaint was filed instead of in 1978 when the taking of the property was
done. YES.

The general rule in determining just compensation in eminent domain proceedings is found in
Section 4, Rule 67 of the Revised Rules of Court, which stats that in an Order of Condemnation,
the plaintiff has a lawful right to take the property upon payment of just compensation to be
determined as of the date of the filing of the complaint. Normally, the time of the taking
coincides with the filing of the complaint for expropriation.

The exception to this general rule is where the owner would be given undue incremental
advantages from the use of the expropriated property. Petitioner NPC has not established any
proof that the increase of P1000 was due to increments caused by petitioners use of the land.
The present price can be attributed to ordinary inflation and increase in land values from 1978 to
1992. Therefore, petitioner can not invoke the exception to Section 4 of Rule 67.

The taking did not take place in 1978, because petitioners entrance in 1978 was not legal. It was
without intent to expropriate nor was it made under a warrant or color of legal authority.
Petitioner believed that the property was owned by the City of Marawi, and when private
respondent claimed ownership of the land in 1979, petitioner flatly refused the claim and thought
that the city had already conferred upon it rights over the property. After a decade of beneficial
use was only when petitioner recognized private respondent as the private owner and negotiated
for a voluntary purchase of the property.

The acts of petitioner do not constitute the intent of expropriation nor the exercise of eminent
domain as contemplated by law. It was only in 1992 when private respondent filed a civil case
against petitioner that it decided to file its own complaint for eminent domain.

2. Whether the value for just compensation should be P1000/m2 rather than P40/m2. YES.

The value of just compensation should be P1000/m2. The Court finds no reason to disturb the
factual findings of the appointed commissioners who determined the price of the property. These
people are considered experts in their field, and were not shown to have abused their authority in
evaluating the evidence.

Petition DISMISSED. Decision of respondent court is AFFIRMED. 12% interest per

annum is reduce to the legal rate of 6% per annum.

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