G.R. No. 175863 February 18, 2015
NATIONAL POWER CORPORATION, Petitioner, vs. LUCMAN M. IBRAHIM, ATTY. OMAR G. MARUHOM, ELIAS G. MARUHOM, BUCAY G. MARUHOM, MAMOD G. MARUHOM, FAROUK G. MARUHOM, HIDJARA G. MARUHOM, ROCANIA G. MARUHOM, POTRISAM G. MARUHOM, LUMBA G. MARUHOM, SINAB G. MARUHOM, ACMAD G. MARUHOM, SOLAYMAN G. MARUHOM, MOHAMAD M. IBRAHIM, CAIRONESA M. IBRAHIM and MACAPANTON K. MANGONDATO, Respondents.

FACTS

In 1978, petitioner National Power Corporation (NPC) took possession of a 21,995 square meter parcel of land in Marawi City for its Agus 1 hydroelectric power plant project. The land was registered under Transfer Certificate of Title (TCT) No. 378-A in the name of respondent Macapanton K. Mangondato, but NPC occupied it under the mistaken belief it was part of public land reserved for its use. Mangondato discovered the occupation in 1979 and began demanding compensation. In 1992, Mangondato filed a complaint for reconveyance (Civil Case No. 605-92), while NPC filed an expropriation complaint (Civil Case No. 610-92). The cases were consolidated. On August 21, 1992, the Regional Trial Court (RTC) Branch 8 of Marawi City upheld NPC’s right to expropriate, condemned the land in favor of NPC effective July 1992, ordered NPC to pay just compensation of ₱21,995,000.00, and ordered NPC to pay Mangondato monthly rentals of ₱15,000.00 from 1978 to July 1992 with 12% interest per annum. NPC appealed. The Court of Appeals affirmed the decision, and the Supreme Court, in G.R. No. 113194 (March 11, 1996), modified it by reducing the interest on rentals to 6% per annum. This decision became final and executory on May 13, 1996.
Meanwhile, on March 29, 1993, respondents Ibrahims and Maruhoms filed a complaint (Civil Case No. 967-93) before RTC Branch 10 of Marawi City against Mangondato and NPC, claiming they are the real owners of the lands covered by TCT No. 378-A as heirs of Datu Magayo-ong Maruhom, and that Mangondato held the title merely in trust for them. They sought to be declared the rightful owners and to receive any compensation or indemnity for the land. The RTC Branch 10 issued a writ of preliminary injunction enjoining NPC from making any payments to Mangondato concerning expropriation indemnity.
Despite the injunction, upon finality of G.R. No. 113194 , RTC Branch 8 issued a writ of execution and a notice of garnishment against NPC’s bank accounts for ₱21,801,951.00, which was paid to Mangondato in full satisfaction of the judgment debt.
On April 16, 1998, RTC Branch 10 decided Civil Case No. 967-93, declaring the Ibrahims and Maruhoms as the true owners of the land and ordering Mangondato to reconvey the title to them. It also ordered NPC to pay the Ibrahims and Maruhoms the amount already paid to Mangondato, plus interest. NPC and Mangondato appealed to the Court of Appeals, which affirmed the RTC decision on June 24, 2005. NPC’s motion for reconsideration was denied on December 5, 2006, prompting this petition.

ISSUE

Whether petitioner NPC is liable to pay respondents Ibrahims and Maruhoms the expropriation compensation already paid to respondent Mangondato.

RULING

No. The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The Court held that NPC’s payment to Mangondato, made after the finality of the expropriation judgment and pursuant to a writ of execution issued by RTC Branch 8, was valid and in good faith. NPC was legally bound to comply with the final and executory judgment in the expropriation case. The subsequent decision in Civil Case No. 967-93, which declared the Ibrahims and Maruhoms as the true owners, did not invalidate NPC’s prior payment to the registered owner (Mangondato) under a final judgment. NPC’s obligation to pay just compensation was extinguished by its payment to Mangondato, the judgment obligee. The Ibrahims and Maruhoms’ remedy is to seek reimbursement from Mangondato, who was unjustly enriched by receiving payment for land he did not own. The Court emphasized that NPC, as a condemnor in an expropriation case, is not required to look beyond the certificate of title and ascertain the true ownership of the property; it may rely on the registered owner. Therefore, NPC is not liable to pay the compensation again to the Ibrahims and Maruhoms.