G.R. No. 211731 & G.R. No. 211818, December 7, 2016
NATIONAL POWER CORPORATION, PETITIONER, V. SPOUSES CONCHITA MALAPASCUA-MALIJAN AND LAZARO MALIJAN, RESPONDENTS. [G.R. No. 211818] CONCHITA MALAPASCUA-MALIJAN AND HEIRS OF LAZARO MALIJAN, PETITIONERS, V. NATIONAL POWER CORPORATION, RESPONDENT.

FACTS

The National Power Corporation (NAPOCOR) filed an expropriation case to acquire a 3,907-square-meter portion of a property owned by the Spouses Malijan in Sto. Tomas, Batangas. The spouses did not oppose the expropriation, leaving the determination of just compensation as the sole issue. A Board of Commissioners recommended compensation at ₱3,500 per square meter, totaling ₱13,674,500, based on a current appraisal considering the property’s commercial potential and its use as an access road to NAPOCOR’s power plant.
NAPOCOR opposed this valuation, arguing that just compensation should be based on the property’s value in 1972, the year it allegedly entered and began using the property. It invoked Section 4, Rule 67 of the Rules of Court, which states compensation is determined as of the date of taking or the filing of the complaint, whichever is earlier. The Regional Trial Court (RTC) rejected NAPOCOR’s argument and adopted the commissioners’ recommended value. The Court of Appeals (CA) reversed the RTC, ruling that just compensation must be based on the 1972 value since the “taking” occurred then, and ordered the RTC to determine that value.

ISSUE

Whether just compensation for the expropriated property should be based on its market value at the time of the filing of the complaint or at the time of the alleged taking in 1972.

RULING

The Supreme Court ruled in favor of the Spouses Malijan, reinstating the RTC decision. The Court held that just compensation must be based on the property’s value at the time of the filing of the expropriation complaint, not in 1972. The legal logic is anchored on the principle that the owner is entitled to the full and fair equivalent of the property at the time of its taking, which coincides with the commencement of the expropriation proceedings when the State formally exercises its power of eminent domain.
The Court found NAPOCOR’s claim of a 1972 “taking” unsubstantiated. A mere entry or occupancy, without the owner being deprived of all beneficial use and without the expropriator’s acts being under warrant or color of legal authority, does not constitute a “taking” in the legal sense that would fix the valuation date. NAPOCOR failed to prove it possessed the property under valid authority in 1972. The filing of the complaint in 2006 was the operative act that formally initiated the expropriation. Therefore, the property’s value at that time, as determined by the commissioners considering its highest and best use, governs. The award of exemplary damages and attorney’s fees by the CA was also deleted for lack of basis.