G.R. No. 164079 ; April 4, 2007
NATIONAL POWER CORPORATION, Petitioner, vs. DR. ANTERO BONGBONG and ROSARIO BONGBONG, Respondents.

FACTS

Spouses Antero and Rosario Bongbong are the registered owners of a parcel of land in Leyte. In 1996, the National Power Corporation (NPC) negotiated to use a portion of the property for its Leyte-Cebu Interconnection Project. The spouses agreed, and NPC occupied 25,100 square meters. NPC paid ₱33,582 for damaged improvements and later tendered ₱163,150 as an easement fee pursuant to its charter, which the spouses accepted under protest. The spouses demanded full payment of the land’s value, alleging just compensation should be based on a market value of ₱250-₱350 per square meter, citing comparable sales by NPC to other landowners at ₱300 per square meter.
NPC refused, contending its obligation was extinguished by the payments made and that its charter limited compensation to a 10% easement fee based on the property’s market value at the time of taking. The spouses filed a complaint for just compensation before the Regional Trial Court (RTC). The RTC ruled in favor of the spouses, ordering NPC to pay ₱7,530,000, equivalent to ₱300 per square meter. The Court of Appeals affirmed the RTC decision, prompting NPC to elevate the case to the Supreme Court.

ISSUE

Whether the Court of Appeals erred in affirming the RTC’s determination of just compensation, specifically in using the market value at the time of payment instead of the time of taking and in awarding full market value instead of a mere easement fee.

RULING

The Supreme Court denied the petition and affirmed the decisions of the lower courts. The legal logic is anchored on the constitutional mandate that private property shall not be taken for public use without just compensation. The Court held that the taking in this case was not a mere easement but a permanent limitation on the landowner’s rights, effectively depriving them of its ordinary use. The transmission lines and towers permanently restricted the land’s utility for residential, agricultural, or commercial purposes, rendering it unsuitable for any foreseeable private use. Consequently, the compensation due is not the limited easement fee under NPC’s charter but the full market value of the property.
On the valuation date, the Court ruled that just compensation must be based on the market value at the time of payment, not at the time of taking. This principle ensures the owner receives the equivalent monetary value of the property at the time they are actually deprived of it, accounting for any appreciation. The Court found the RTC correctly relied on evidence of comparable sales (₱300/sq.m.) and the Provincial Appraisal Committee’s reappraisal, establishing a fair market value. The award of ₱7,530,000 represents the full and fair equivalent of the property taken, fulfilling the constitutional requirement of just compensation.