G.R. No. 166973 ; February 10, 2009.
NATIONAL POWER CORPORATION, Petitioner, vs. BENJAMIN ONG CO, Respondent.

FACTS

Petitioner National Power Corporation (NPC), established under R.A. No. 6395 with the power of eminent domain, filed a complaint on June 27, 2001, with the RTC of San Fernando, Pampanga, to acquire an easement of right-of-way over three lots owned by respondent Benjamin Ong Co for the construction of transmission lines for its Lahar Affected Transmission Line Project (Lahar Project). Petitioner obtained a writ of possession on March 25, 2002, and took possession of the property on April 15, 2002. The sole issue for litigation was the determination of just compensation. The RTC appointed commissioners who submitted differing valuations. The RTC rendered a Partial Decision adopting the valuation of ₱1,179,000.00 (₱1,900.00 per square meter) with 6% interest per annum from April 15, 2002. The Court of Appeals affirmed the liability to pay the full fair market value as of the date of actual taking but ordered the RTC to appoint new commissioners for valuation. Petitioner filed a motion for partial reconsideration, questioning the order to pay the full fair market value, which was denied, leading to the present petition.

ISSUE

1. Whether Republic Act No. 8974 is applicable to expropriation proceedings filed by NPC for constructing power transmission lines.
2. Assuming R.A. No. 8974 is applicable:
a. What are its effects on the determination of provisional value and final just compensation, including the reckoning date?
b. Is the 10% limit on just compensation for right-of-way easements under Section 3-a(b) of NPC’s charter still effective in light of R.A. No. 8974 ?

RULING

1. Yes, R.A. No. 8974 is applicable. The Lahar Project is a national government infrastructure project, as defined under R.A. No. 8974 , which includes power generation, transmission, and distribution projects undertaken by government-owned and controlled corporations like NPC. The law governs substantive matters in such expropriation cases, superseding relevant provisions of Rule 67 of the Rules of Court.
2. a. Under R.A. No. 8974 , the government agency must comply with its guidelines, including immediate payment of just compensation. However, for the reckoning date, Rule 67 applies procedurally, stating that just compensation shall be determined as of the date of the taking of the property or the filing of the complaint, whichever came first. In this case, the filing of the complaint on June 27, 2001, preceded the actual taking on April 15, 2002; thus, just compensation should be reckoned from June 27, 2001.
b. The 10% limit under Section 3A of R.A. No. 6395 , as amended, is not applicable. The Supreme Court has repeatedly ruled that when NPC takes private property for transmission lines, it is liable to pay the full market value, not merely an easement fee. The construction of transmission lines imposes significant limitations on the use of the property, indefinitely depriving the owner of its normal use. Therefore, NPC must pay the full market value of the property as determined by the courts.