G.R. No. 164964; October 17, 2008
NATIONAL POWER CORPORATION, petitioner, vs. MARIA BAGUI, VEDASTO BAGUI, FELICIANA BAGUI, EPIFANIA BAGUI, HEIRS OF MARGARITO MACARAIG and WIFE, represented by Dolores Macaraig, NIEVES VALDEZ and JAIME MARQUEZ, respondents.

FACTS

Petitioner National Power Corporation (NPC) filed a complaint for eminent domain before the Regional Trial Court (RTC) of Batangas City to acquire an easement of right-of-way over portions of respondents’ lands for its San Pascual Cogeneration Associated Transmission Line Project. NPC deposited the assessed values for taxation purposes. Respondents, whose properties were substantially affected, sought payment of just compensation equivalent to the full market value of their properties. The RTC appointed two sets of commissioners to determine fair market value. The first set recommended valuations for the Baguis’ property, while the second set recommended valuations for the properties of Macaraig, Valdez, and Marquez. The RTC adopted these valuations and ordered NPC to pay accordingly. NPC appealed to the Court of Appeals, which affirmed the RTC decision. NPC then filed this petition, arguing that just compensation should be based on Section 3-A(b) of Republic Act No. 6395 (limiting compensation for easement to not exceeding ten percent of market value) and that the commissioners’ valuations were speculative and based on hearsay.

ISSUE

1. Whether just compensation for the easement of right-of-way should be based on the full market value of the affected properties or limited by Section 3-A(b) of R.A. No. 6395.
2. Whether the factual determinations of just compensation by the trial and appellate courts, based on the commissioners’ reports, are correct.

RULING

1. On the legal issue, the Supreme Court ruled that just compensation must be based on the full market value of the properties affected by the transmission lines. The Court cited precedents (National Power Corporation v. Manubay Agro-Industrial Development Corporation, NPC v. Bongbong, NPC v. Purefoods) which held that the installation of power lines and the resulting indefinite limitations on land use deprive owners of the normal use of their properties, warranting full market value compensation. The Court emphasized that the determination of just compensation is a judicial function, and statutory valuations like Section 3-A(b) of R.A. No. 6395 serve only as guiding principles, not as binding substitutes for judicial judgment.
2. On the factual issue, the Supreme Court partially granted the petition. It upheld the valuation for the Baguis’ property (₱1,654.40 per square meter) by the first set of commissioners, finding no abuse of discretion as their report considered relevant factors like location, improvements, and comparable sales. However, it set aside the valuations for Macaraig (₱250/sq.m.) and Valdez (₱3,000/sq.m.) by the second set of commissioners. The Court found these valuations speculative and based on hearsay, as they relied on an unsolicited recommendation from a provincial assessor (for Macaraig) and an unsubstantiated opinion of a barangay chairman (for Valdez), without reference to actual sales transactions or sufficient factual basis. The case was remanded to the RTC for the reception of further evidence to determine the correct just compensation for the Macaraig and Valdez properties.