G.R. No. 160923 & G.R. No. 161093; January 24, 2011
Case Parties/Title: MOISES TINIO, JR. and FRANCIS TINIO, Petitioners, vs. NATIONAL POWER CORPORATION, Respondent. (G.R. No. 160923) and NATIONAL POWER CORPORATION, Petitioner, vs. MOISES TINIO, JR. and FRANCIS TINIO, Respondents. (G.R. No. 161093)

FACTS

The National Power Corporation (NPC) filed a complaint for eminent domain on October 13, 1999, against Moises Tinio, Jr. and Francis Tinio (the Tinios) to expropriate a 52,710-square-meter parcel of land (Lot 14556-A) in San Manuel, Pangasinan, for its San Roque Multi-Purpose Project. NPC took possession of the land on February 9, 1998, by virtue of a Permit to Enter signed by Moises Tinio, Jr. During pre-trial, the parties stipulated NPC’s authority to expropriate, leaving only the determination of just compensation for the trial court. Commissioners were appointed to appraise the property. The Regional Trial Court (RTC) ordered NPC to pay ₱12,850,400.00 plus legal interest as just compensation. NPC appealed. The Court of Appeals (CA) modified the RTC’s resolution, ordering NPC to pay ₱2,343,900.00 with 6% legal interest per annum from February 9, 1998. Both parties filed petitions before the Supreme Court: the Tinios sought reinstatement of the RTC award, arguing the land was already commercial/industrial before NPC’s improvements and that the date of taking was incorrect. NPC sought a reduction of the CA’s award, arguing the CA erroneously relied on the land’s commercial classification.

ISSUE

Whether the Court of Appeals was correct in its determination of just compensation based on its findings regarding the time of taking and the nature and character of the subject property at the time of such taking.

RULING

The Supreme Court DENIED both petitions and AFFIRMED the Decision of the Court of Appeals.
1. On the Time of Taking: The Court upheld the concurrent factual findings of the RTC and CA that the taking occurred on February 9, 1998, as evidenced by the Permit to Enter signed on that date. The Tinios’ claim of deception was unsupported by evidence.
2. On the Nature and Character of the Land at the Time of Taking: The Court agreed with the CA that the principal criterion for just compensation is the land’s nature and character at the time of taking. The CA’s determination was based on a March 10, 1998, Municipal Assessor’s certification showing the property was partly residential (12,710 sq.m.) and largely agricultural (40,000 sq.m.) prior to NPC’s possession. Evidence showed the land was classified as industrial only six months after NPC’s entry and development.
3. On the Tinios’ Claim for Higher Valuation Based on Subsequent Classification: The Court rejected the Tinios’ argument that the property should be valued as industrial because adjoining NPC properties were later classified as such. It is settled that a landowner cannot benefit from undue incremental value arising from the expropriator’s use of the property. To compensate based on the subsequent industrial classification would allow recovery of more than the land’s value at the time of taking, which is the true measure of just compensation.
Thus, the CA correctly determined just compensation based on the property’s residential/agricultural classification as of February 9, 1998.