GR 245266; (August, 2022) (Digest)
G.R. No. 245266. August 01, 2022
NATIONAL TRANSMISSION CORPORATION, PETITIONER, VS. RELIGIOUS OF THE VIRGIN MARY, REPRESENTED BY SIS. MA. TRANQUILINA T. YAMBAO, RESPONDENT.
FACTS
Respondent Religious of the Virgin Mary (RVM) is the registered owner of a parcel of land in Cagayan de Oro City. In 2006, RVM filed a Complaint for just compensation and damages against petitioner National Transmission Corporation (TransCo), alleging that TransCo constructed transmission lines on a portion of its property without consent and without initiating expropriation proceedings. TransCo, in its Answer, acknowledged the occupation but claimed it had acquired an easement by prescription, arguing the lines were constructed by its predecessor, the National Power Corporation (NAPOCOR), in 1966. The Regional Trial Court (RTC) commissioned a survey which determined the affected area to be 8,721 square meters. Commissioners were appointed to determine just compensation, with their reports varying on the valuation date: one recommended using 1994 zonal values, another suggested 2006 values, and a third proposed a rate without a clear basis.
The RTC, in a 2014 Order, adopted the recommendation to base just compensation on the 2006 zonal value of ₱200 per square meter, ordering TransCo to pay ₱1,744,200.00. It also imposed 12% annual interest on the total compensation from the 2006 filing of the complaint. TransCo appealed. The Court of Appeals remanded the case to the RTC to determine just compensation using 2014 valuations. TransCo elevated the case to the Supreme Court via a Petition for Review on Certiorari.
ISSUE
The core issue is the proper reckoning date for determining just compensation and the accrual of legal interest for the taking of the property for public use.
RULING
The Supreme Court granted the petition, reversing the Court of Appeals. The Court held that just compensation must be determined as of the time of the actual taking of the property. The factual record clearly established that the transmission lines were constructed and operational by 1966. Therefore, the actual taking occurred in 1966, not in 2006 when the complaint was filed. Consequently, the just compensation must be valued based on the property’s fair market value at the time of taking in 1966, not in 2006 or 2014. The RTC erred in using the 2006 zonal value simply because TransCo failed to specifically allege the 1966 date in its pleadings, as the evidence from the commissioners’ reports unequivocally established this fact.
Furthermore, the Court ruled that legal interest on the unpaid just compensation accrues from the date of actual taking, not from the filing of the judicial action. The imposition of interest is a compensatory mechanism for the property owner’s deprivation of the land and its potential income from the time it was taken. Since the taking occurred in 1966, the 12% interest ordered by the RTC should be computed from that year. The case was remanded to the RTC for the proper determination of just compensation based on the fair market value of the property as of 1966, with legal interest to be computed from that date until full payment. The Court emphasized that just compensation must be not only fair in amount but also prompt in payment to be truly “just.”