G.R. No. 165354; January 12, 2015
Republic of the Philippines, represented by the National Power Corporation, Petitioner, vs. Heirs of Saturnino Q. Borbon, and Court of Appeals, Respondents.

FACTS

The National Power Corporation (NAPOCOR) entered a property owned by the heirs of Saturnino Q. Borbon in February 1993 to construct transmission lines for a power project. On May 26, 1995, NAPOCOR filed a complaint for expropriation, seeking an easement of right of way over a portion (6,326 sq. m.) of the 14,257 sq. m. property. The heirs, in their answer, alleged NAPOCOR entered without prior negotiation, destroyed fruit trees, and installed transmission posts, rendering the entire property inutile due to the high-tension lines passing through its center. They demanded compensation for the entire property at ₱1,000/sq. m. Commissioners were appointed; a joint report dated April 8, 1999, appraised the property, classified as industrial land, at ₱550/sq. m., while a minority report recommended payment of only 10% of the assessed value as an easement fee. The Regional Trial Court (RTC), in its November 27, 2000 judgment, adopted the joint report and ordered NAPOCOR to pay just compensation for the entire 14,257 sq. m. at ₱550/sq. m. The Court of Appeals (CA), in its April 29, 2004 decision, modified the RTC ruling, ordering payment only for the occupied 6,326 sq. m. at ₱550/sq. m. During the pendency of NAPOCOR’s appeal before the Supreme Court, and after failed settlement negotiations, NAPOCOR filed a Manifestation and Motion to Discontinue Expropriation Proceedings on January 3, 2014, stating that the transmission lines on the property had been retired, and the property was no longer necessary for public purpose.

ISSUE

Whether or not the expropriation proceedings should be discontinued or dismissed pending appeal.

RULING

Yes, the dismissal of the proceedings for expropriation at the instance of NAPOCOR is proper. However, conformably with Section 4, Rule 67 of the Rules of Court, the dismissal or discontinuance must be upon such terms as the court deems just and equitable. The Court ruled that the expropriator who has taken possession of the property is obliged to pay reasonable compensation to the landowner for the period of such possession, even if the proceedings are discontinued on the ground that the public purpose has ceased. The power of eminent domain requires that the taking be for a particular public purpose and that just compensation be paid. Since the public purpose (the transmission line project) had ceased due to the retirement of the lines, NAPOCOR could seek discontinuance. Citing Metropolitan Water District v. De los Angeles, the Court affirmed that the government is not obliged to appropriate property when it is no longer needed for public use. Nevertheless, NAPOCOR, having taken possession of the property, must pay the heirs reasonable compensation for its use and occupation from the time of taking until it vacates the property. The case was remanded to the trial court to determine the reasonable compensation due for NAPOCOR’s possession.