G.R. No. 189127, April 25, 2012
NATIONAL POWER CORPORATION, Petitioner, vs. SPOUSES BERNARDO AND MINDALUZ SALUDARES, Respondents.

FACTS

In the 1970s, petitioner National Power Corporation (NAPOCOR) constructed high-tension transmission lines for the Davao-Manat 138 KV Transmission Line Project, which traversed a portion of land covered by TCT No. T-15343, then owned by the Pereyras family. In 1981, NAPOCOR commenced expropriation proceedings (National Power Corporation v. Pereyras) over that land, resulting in a final decision ordering it to pay ₱300,000 as just compensation. The trial court later subrogated Tahanan Realty Development Corporation to the rights of the Pereyras defendants, and NAPOCOR paid the corporation the ₱300,000 award. Tahanan Realty then executed a Deed of Absolute Sale in favor of NAPOCOR covering Lot 481-B, Psd-11012718, a portion of Lot 481, Cad. 276 in Barrio Magugpo, Tagum, Davao.
Respondent spouses Bernardo and Mindaluz Saludares are the registered owners of a 6,561-square-meter parcel of land covered by TCT No. T-109865, described as Lot 15, Pcs-11-000704, Amd., a portion of Lots 481-D, Psd-11-012718; 480-B, Psd-51550; H-148559 & 463-A-2 (LRC) Psd-150796, situated in Barrio Magugpo, Tagum, Davao. On August 19, 1999, respondents filed a complaint against NAPOCOR demanding payment of just compensation, alleging that NAPOCOR had entered and occupied their property by erecting high-tension transmission lines without reasonable compensation.
NAPOCOR argued that it had already paid just compensation via the Pereyras case and that, assuming respondents were not compensated, any claim had prescribed under Section 3(i) of Republic Act No. 6395, which requires filing within five years after the facilities are established. The Regional Trial Court (RTC) ruled in favor of the spouses, ordering NAPOCOR to pay ₱4,920,750 as just compensation plus interest and attorney’s fees. The Court of Appeals (CA) affirmed the RTC decision but reduced the interest rate. NAPOCOR elevated the case via a Rule 45 petition.

ISSUE

1. Whether NAPOCOR had previously compensated the spouses for establishing transmission lines over their property.
2. Whether the demand for payment of just compensation had prescribed.
3. Whether NAPOCOR is liable for only ten percent of the fair market value of the property or for the full value thereof.
4. Whether the trial court properly awarded ₱4,920,750 as just compensation based on the 2000 Schedule of Market Values for Tagum City.

RULING

1. No, NAPOCOR failed to prove previous compensation. The Supreme Court held that NAPOCOR did not establish that the land in the Pereyras case and the land in this case are identical. The Pereyras case involved Lot 481-B, Psd-11012718, a portion of Lot 481, Cad. 276. The present case involves Lot 15, Pcs-11-000704, Amd., a portion of different lots (481-D, 480-B, etc.). The mere fact that one source title of respondents’ TCT was indirectly derived from TCT No. T-15343 (the subject in Pereyras) does not prove identity of the properties. Thus, NAPOCOR’s payment in the earlier case did not cover respondents’ land.
2. No, the demand has not prescribed. The Court rejected NAPOCOR’s reliance on the five-year prescriptive period under Section 3(i) of R.A. No. 6395. The right to just compensation is a constitutional right under the Bill of Rights. The filing of an expropriation case or the payment of just compensation is a prerequisite for the lawful taking of property. Where no compensation was paid, as here, the landowner’s action to recover just compensation does not prescribe. The five-year period in R.A. No. 6395 applies only to claims for damages arising from the exercise of NAPOCOR’s right-of-way, not to the fundamental right to just compensation for the taking of property.
3. NAPOCOR is liable for the full market value, not just a 10% easement fee. The Court ruled that the provision in R.A. No. 6395 limiting compensation to not exceeding 10% of the market value for a right-of-way easement applies only when the landowner’s principal use of the land is not impaired. In this case, respondents presented evidence that the transmission lines rendered their entire property unsafe and unsuitable for residential use, effectively depriving them of its beneficial use. Therefore, the taking was not a mere easement but a deprivation of property, warranting payment of the full market value as just compensation.
4. Yes, the award of ₱4,920,750 was proper. The Court upheld the valuation based on the Commissioners’ recommendation of ₱750 per square meter, which was derived from the Schedule of Market Values of Real Properties in Tagum City effective in the year 2000. The Commissioners’ report, adopted by the RTC, enjoys respect absent any showing of arbitrariness. The total compensation for 6,561 square meters at ₱750/sq.m. is ₱4,920,750. The CA correctly modified the interest to 6% per annum from January 1, 1982, until full payment.
The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals Decision with MODIFICATION, upholding the award of just compensation and the 6% interest rate.