G.R. No. L-60077; January 18, 1991
NATIONAL POWER CORPORATION, petitioner, vs. SPS. MISERICORDIA GUTIERREZ and RICARDO MALIT and THE HONORABLE COURT OF APPEALS, respondents.

FACTS

The National Power Corporation (NPC) initiated eminent domain proceedings to acquire a right-of-way easement over a 760-square-meter portion of land owned by spouses Misericordia Gutierrez and Ricardo Malit for the construction of its 230 KV Mexico-Limay transmission lines. The trial court authorized NPC’s immediate possession upon deposit of a provisional value of P973.00. To determine just compensation, three commissioners were appointed. The NPC’s commissioner recommended payment of P1.00 per square meter as an easement fee, the court’s commissioner recommended P5.00, and the spouses’ commissioner recommended P10.00.
The trial court initially adopted the P10.00 recommendation but, upon NPC’s motion for reconsideration and the judge’s personal ocular inspection, amended its decision to P5.00 per square meter, classifying the land as partly commercial and partly agricultural. The Court of Appeals affirmed this amended decision. NPC elevated the case to the Supreme Court, arguing the compensation was excessive and that payment of the full market value for a mere easement was improper.

ISSUE

Whether the compensation of P5.00 per square meter awarded to the landowners for the right-of-way easement constitutes just compensation.

RULING

The Supreme Court affirmed the decision of the Court of Appeals, upholding the award of P5.00 per square meter as just compensation. The Court clarified that the exercise of eminent domain, even when only seeking an easement, obligates the expropriator to pay the full equivalent of the property’s loss in value to the owner. Just compensation is defined as the fair and full monetary equivalent of the loss sustained by the owner, measured by the market value of the property at the time of its taking.
The Court rejected NPC’s argument that a mere easement warrants only nominal payment. It emphasized that the criterion is the owner’s loss, not the expropriator’s gain or the technical nature of the interest acquired. The trial court’s determination, based on commissioner reports and an ocular inspection classifying the land as partly commercial and partly agricultural, was not found to be capricious or arbitrary. Furthermore, the Court noted that NPC’s belated claim of seeking full ownership, not just an easement, was raised for the first time on appeal and could not be entertained, as the petition and proceedings consistently involved a right-of-way grant.