G.R. No. 160725 September 12, 2008
NATIONAL POWER CORPORATION, Petitioner, vs. PUREFOODS CORPORATION, VELASCO, JR., and SOLID DEVELOPMENT CORPORATION, JOSE ORTEGA, JR., SILVESTRE BAUTISTA, ALFREDO CABANDE, HEIRS OF VICTOR TRINIDAD, and MOLDEX REALTY INCORPORATED, Respondents.

FACTS

Petitioner National Power Corporation (NAPOCOR) filed a special civil action for eminent domain before the Regional Trial Court (RTC) of Malolos, Bulacan to acquire an easement of right-of-way over several parcels of land in Bulacan for its San Jose-San Manuel 500 KV Transmission Line Project. The defendants were the owners or claimants of the affected properties, including respondents Purefoods Corporation, Solid Development Corporation, Jose Ortega, Jr., Silvestre Bautista, Alfredo Cabande, Heirs of Victor Trinidad, and Moldex Realty Incorporated. NAPOCOR alleged the public purpose of the project, the failure of negotiations, and deposited a provisional valuation of P126,565.42. The RTC issued a writ of possession. The parties later agreed to limit the issues to the amount of just compensation and whether Moldex was entitled to compensation for the devaluation of the peripheral area of its property. Commissioners recommended compensation at P600.00/sq m for Moldex’s properties and P400.00/sq m for the other respondents’ properties. The RTC rendered a decision ordering expropriation and fixing just compensation at P600.00/sq m for Moldex’s 27,485 sq m and P400.00/sq m for the other respondents’ aggregate 33,869 sq m, with legal interest. NAPOCOR appealed, arguing it should only pay a 10% easement fee based on its charter. The Court of Appeals affirmed the RTC decision but deleted the award of legal interest. NAPOCOR filed a petition for review.

ISSUE

Whether the Court of Appeals erred in affirming the RTC’s determination of just compensation, which awarded full market value for the affected areas instead of limiting compensation to a 10% easement fee as provided under NAPOCOR’s charter.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision with modification. The Court held that the taking of a right-of-way easement falls within the purview of the power of eminent domain. However, when the easement imposed deprives the owner of the normal use of his property, it is tantamount to a taking of the property itself, requiring full compensation. In this case, the transmission lines, with their dangerous high voltage and mandatory safety restrictions (45-meter lateral clearance from the line’s center), perpetually deprived the landowners of any normal use or economic benefit from the affected areas, rendering them practically useless. This constituted a taking of the property, not a mere limitation on its use. Therefore, the just compensation must be the full market value of the affected areas, not merely a 10% easement fee. The Court found the compensation rates of P600.00/sq m and P400.00/sq m, based on commissioner recommendations and evidence, to be reasonable. The Court reinstated the RTC’s award of legal interest at 6% per annum from the date of taking (January 6, 1998) until finality of judgment, and 12% per annum from finality until full payment, to compensate for the delay in payment.