G.R. No. 106804 ; August 12, 2004
NATIONAL POWER CORPORATION, petitioner, vs. COURT OF APPEALS and ANTONINO POBRE, respondents.

FACTS

Petitioner National Power Corporation (NPC), a public corporation vested with the power of eminent domain, sought to expropriate portions of private respondent Antonino Pobre’s 68,969-square meter property in Tiwi, Albay, which Pobre had developed into the “Tiwi Hot Springs Resort Subdivision.” NPC’s involvement with the property occurred in three phases. First, it leased eleven lots in 1972. Second, it filed an expropriation case in 1977 for an 8,311.60-square meter portion, which was granted. During this period, NPC’s drilling operations and unauthorized dumping of waste materials altered the property’s topography. Third, in 1979, NPC filed a second expropriation case for an additional 5,554 square meters, immediately took possession via a writ, but later abandoned the project in 1981.
In 1984, Pobre moved to dismiss the second complaint, asserting that NPC’s actions had damaged his entire property and claiming just compensation and damages. NPC also moved to dismiss in 1985, citing it had found an alternative site. The trial court granted NPC’s motion but allowed Pobre to present evidence on his damage claims. After NPC failed to present counter-evidence, the case was submitted for decision.

ISSUE

Whether NPC is liable to pay just compensation for Pobre’s entire property, not merely the areas formally expropriated, due to the permanent damage caused by its operations.

RULING

Yes. The Supreme Court affirmed the Court of Appeals’ decision, holding NPC liable for the full market value of the entire 68,969-square meter property. The legal logic rests on the constitutional guarantee of just compensation, which extends beyond formal expropriation proceedings when the government’s actions result in a practical “taking” of property. NPC’s operations—including construction, drilling, and dumping of waste materials—caused permanent and severe injury to the land. The pollution, topographic changes, and environmental damage rendered the entire resort-subdivision non-viable, effectively depriving Pobre of all beneficial use of his property.
The Court ruled that this constituted a de facto taking of the whole property for public use. Since NPC’s actions directly and proximately caused the destruction of the property’s economic value as a resort, just compensation is measured by the fair market value of the entire parcel at the time of taking, not merely the smaller portions subject to the expropriation suits. The dismissal of the second expropriation complaint did not absolve NPC, as the right to compensation for the de facto taking had already vested. The award represents the full indemnity for the property’s loss, with legal interest from the date NPC took possession in 1979 until full payment.