G.R. No. 172507 , September 14, 2016
National Power Corporation, Petitioner, vs. Sps. Margarito Asoque and Tarcinia Asoque, Respondents.

FACTS

Spouses Asoque are the registered owners of a 59,099-square-meter parcel of land in Calbayog City. In November 1995, the National Power Corporation (NPC) entered their property to install transmission lines for its Leyte-Luzon HVDC Power Transmission Line Project, utilizing 4,352 square meters. The NPC cut down trees and prohibited the spouses from building any structures on the affected area. The spouses demanded just compensation for the land itself, but NPC only paid for the damaged improvements, citing its charter ( Republic Act No. 6395 , as amended) which it claimed limited its liability to a right-of-way easement at 10% of market value. Consequently, the spouses filed a complaint for payment of just compensation and damages before the Regional Trial Court (RTC).
The RTC, after the NPC failed to appear at pre-trial, allowed the spouses to present evidence ex parte before a court-appointed commissioner. The commissioner recommended compensation based on a fair market value of P800 per square meter for the land. The RTC adopted this, ordering NPC to pay just compensation for the 4,352-square-meter area plus compensation for damaged improvements. The Court of Appeals affirmed the RTC decision with modification, deleting the award for improvements as it was subsumed in the just compensation for the land. NPC elevated the case to the Supreme Court, arguing it was only liable for an easement fee.

ISSUE

Whether the NPC is liable to pay the full market value of the land taken for its transmission lines, or merely a right-of-way easement fee.

RULING

The Supreme Court denied NPC’s petition and affirmed the appellate court’s decision. The Court held that the NPC’s act of entering the property and installing permanent structures constitutes a taking under the power of eminent domain, requiring payment of just compensation. The constitutional guarantee of just compensation is not negated by the NPC’s charter. The Court clarified that when the state’s power of eminent domain is exercised through a “taking” without initiating formal expropriation proceedings, the property owner may file an action for inverse condemnation. In such a case, the valuation is not limited to a mere easement fee if the government’s use deprives the owner of the property’s normal use and benefit. Here, the installation of transmission lines, which imposed restrictions against any construction and necessitated the cutting of trees, effectively deprived the owners of ordinary use of the land. Therefore, the taking was not a simple easement but a limitation equivalent to a full taking, warranting compensation based on the fair market value of the affected area. The Court found the commissioner’s report, which considered factors like the property’s classification, location, and current selling prices of similar lands, provided a sufficient basis for determining just compensation at P800 per square meter. The legal interest imposed from the time of taking in 1995 until full payment is proper.