Republic of the
SUPREME COURT
SECOND DIVISION
NATIONAL POWER CORP., G.R. No. 156093
Petitioner,
Present:
QUISUMBING,
J., Chairperson,
- versus - CARPIO,
CARPIO
MORALES,
TINGA,
and
VELASCO,
JR., JJ.
SPOUSES NORBERTO AND
JOSEFINA DELA CRUZ,
METROBANK, Dasmariñas,
FERRER, and S.K. DYNAMICS
MANUFACTURER CORP., February
2, 2007
Respondents.
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D E C I S I
O N
VELASCO, JR., J.:
The Case
In this petition for review under Rule 45 of
the Rules of Court, petitioner National Power Corporation (NAPOCOR) seeks to
annul and set aside the November 18, 2002 Decision[1] of
the Court of Appeals (CA) in CA-G.R. CV No. 67446, which affirmed the December
28, 1999 Order[2] of the Imus,
Cavite Regional Trial Court (RTC), Branch XX in Civil Case No. 1816-98, which
fixed the fair market value of the expropriated lots at PhP 10,000.00 per
square meter.
The Facts
Petitioner
NAPOCOR is a government-owned and controlled corporation created under Republic
Act No. 6395, as amended, with the mandate of developing hydroelectric power,
producing transmission lines, and developing hydroelectric power throughout the
On
After
respondents filed their respective answers to petitioner’s Complaint,
petitioner deposited PhP 5,788.50 to cover the provisional value of the land in
accordance with Section 2, Rule 67 of the Rules of Court.[5] Then,
on February 25, 1999, petitioner filed an Urgent Ex-Parte Motion for the
Issuance of a Writ of Possession, which the trial court granted in its March 9,
1999 Order. The trial court issued a
Writ of Possession over the lots owned by respondents spouses de la Cruz and
respondent Ferrer on
However, the trial court dropped the
Dela Cruz spouses and their mortgagee, Metrobank, as parties-defendants in its
May 11, 1999 Order,[6] in view
of the Motion to Intervene filed by respondent/intervenor Virgilio M. Saulog,
who claimed ownership of the land sought to be expropriated from respondents
spouses Dela Cruz.
On June 24, 1999, the trial court terminated
the pre-trial in so far as respondent Ferrer was concerned, considering that
the sole issue was the amount of just compensation, and issued an Order
directing the constitution of a Board of Commissioners with respect to the
property of respondent S.K. Dynamics. The trial court designated Mr. Lamberto
C. Parra, Cavite Provincial Assessor, as chairman, while petitioner nominated
the Municipal Assessor of Dasmariñas, Mr. Regalado T. Andaya, as member. Respondent S.K. Dynamics did not nominate any
commissioner.
As to the just compensation for the
property of Saulog, successor-in-interest of the Dela Cruz spouses, the trial
court ordered the latter and petitioner to submit their compromise agreement.
The commissioners conducted an ocular
inspection of S.K. Dynamics’ property, and on
In arriving our [sic] estimate of values our studies and analysis include the following:
I. PROPERTY LOCATION
As shown to us on-site during our ocular inspection, the appraised property is land only, identified as the area affected by the construction of the National Power Corporation (NPC) Dasmariñas-Zapote 230KV Transmission Lines Project, located within Barangay Salitran, Dasmariñas, Cavite registered in the name of S.K. Dynamic[s] Manufacture[r], Corp., under Transfer Certificate of Title No. T-454278.
II. NEIGHBORHOOD DESCRIPTION
The neighborhood particularly in the
immediate vicinity is within a mixed residential and commercial area, situated
in the northern section of the
Considered as some of the important improvements [on] the vicinity are (within 1.5 radius)
Orchard Golf and Country Club
Arcontica Sports Complex
Max’s Restaurant
Waltermart Shopping Mall
Several savings and Commercial Banks as well as several Gasoline stations.
Community centers such as, [sic] churches, public markets, shopping malls, banks and gasoline stations are easily accessible from the subject real properties.
Convenience facilities such as
electricity, telephone service as well as pipe potable water supply system are
all available along
Public transportation consisting of passenger jeepneys and buses as well taxicabs are [sic] regularly available along Gen. E. Emilio Aguinaldo Highway [sic].
x x x x
IV. HIGHEST AND MOST PROFITABLE USE
x x x x
The subject property is situated within the residential/commercial zone and considering the area affected and taking into consideration, their location, shape, lot topography, accessibility and the predominant uses of properties in the neighborhood, as well as the trend of land developments in the vicinity, we are on the opinion that the highest and most profitable use of the property is good for residential and commercial purposes.
V. VALUATION OF LAND MARKET DATA
x x x x
Based on the analysis of data gathered and making the proper adjustments with respect to the location, area, shape, accessibility, and the highest and best use of the subject properties, it is the opinion of the herein commissioners that the fair market value of the subject real properties is P10,000.00 per square meter, as of this date, October 05, 1999.[7]
Thus,
both commissioners recommended that the property of S.K. Dynamics to be
expropriated by petitioner be valued at PhP 10,000.00 per square meter.
The records show that the
commissioners did not afford the parties the opportunity to introduce evidence in
their favor, nor did they conduct hearings before them. In fact, the commissioners did not issue
notices to the parties to attend hearings nor provide the concerned parties the
opportunity to argue their respective causes.
Upon the submission of the commissioners’
report, petitioner was not notified of the completion or filing of it nor given
any opportunity to file its objections to it.
On
Incidentally,
on
On
the same date, the Imus, Cavite RTC granted S.K. Dynamics’ motion to have the
8.55-square meter portion of its property included in the computation of just
compensation.
The Ruling of the Regional Trial
Court
As previously stated, in its
On
“Based on the analysis of data gathered and making the proper adjustments with respect to location, area, shape, accessibility, and the highest and best use of the subject properties, it is the opinion of herein commissioners that the fair market value of the subject real properties is ₧10,000.00 per square meter, as of this date, October 05, 1999.”
Finding the opinion of the Commissioners to be in order, this Court approves the same. Accordingly, the Motion filed by [respondent] Reynaldo Ferrer adopting said valuation report is granted.
SO ORDERED. [9]
On
The
basis of [petitioner] in seeking to set aside the Order dated
By
way of opposition, [respondent] Dynamics countered that the valuation of a lot
under expropriation is reckoned at the time of its taking by the government. And
since in the case at bar, the writ of possession was issued on
We find for the defendant.
The PAR Resolution alluded to by [petitioner] was passed in 1995 or four (4) years [before] the lot in question was taken over by the government. This explains why the price or cost of the land has considerably increased. Besides, the valuation of P10,000.00 per sq.m. was the one recommended by the commissioner designated by [petitioner] itself and concurred in by the Provincial Assessor of Cavite.
Be that as it may, the Motion for Reconsideration is denied.
SO ORDERED.[10]
The Ruling
of the Court of Appeals
Unsatisfied with the amount of just
compensation, petitioner filed an appeal before the CA. In resolving the appeal, the CA made the
following findings:
We
find nothing on record which would warrant the reversal of the Order dated
[Petitioner] submits that the order of the court a quo adopting the Commissioners [sic] Valuation Report, fixing the just compensation for the subject lots in the amount of P10,000.00 per square meter is exhorbitant [sic], highly speculative and without any basis. In support thereto, [petitioner] presented before the court a quo the Provincial Appraisal Committee of Cavite Resolution No. 08-95 x x x which fixed the fair market value of lots located along Gen. Aguinaldo Highway, Dasmariñas, Cavite, which incidentally includes the lots subject of this proceedings [sic], in the amount of P3,000.00 per square meter.
We do not agree.
“The nature and character of the land at the time of its taking is the principal criterion to determine just compensation to the land owner.” (National Power Corporation vs. Henson, 300 SCRA 751-756).
The
CA then cited Section 4, Rule 67 of the 1997 Rules of Civil Procedure[11]
to explain why Resolution No. 08-95 could not “be used as [a] basis for
determining the just compensation of the subject lots, which by reason of the
changed commercial conditions in the vicinity, could have increased its value
greater than its value three (3) years ago.” The said resolution, which fixed the fair
market value of the lots, including that of the disputed lots along Gen.
Aguinaldo Highway, was approved on October 25, 1995, while petitioner filed the
Complaint for the expropriation of the disputed lots on November 27, 1998, or
more than three (3) years had elapsed after said resolution was approved. Reflecting
on the commissioners’ report, the CA noted that since the property underwent
important changes and improvements, “the highest and most profitable use of the
property is good for residential and commercial purposes.”
As regards the commissioners’ failure
to conduct a hearing “to give the parties the opportunity to present their
respective evidence,” as alleged by petitioner, the CA opined that “[t]he
filing by [petitioner] of a motion for reconsideration accorded it ample
opportunity to dispute the findings of the commissioners, so that [petitioner]
was as fully heard as there might have been hearing actually taken place x x
x.”
The CA ultimately rendered its
judgment, as follows:
WHEREFORE,
premises considered, the present appeal is hereby DISMISSED for lack of merit.
The Order dated
SO ORDERED.[12]
Significantly, petitioner did not
file a Motion for Reconsideration of the CA
The Issues
In
this petition for review, the issues are the following:
PETITIONER WAS
DENIED DUE PROCESS WHEN IT WAS NOT ALLOWED TO PRESENT EVIDENCE ON THE
REASONABLE VALUE OF THE EXPROPRIATED PROPERTY BEFORE THE BOARD OF
COMMISSIONERS.
THE VALUATION OF
JUST COMPENSATION HEREIN WAS NOT BASED FROM THE EVIDENCE ON RECORD AND OTHER
AUTHENTIC DOCUMENTS.[13]
The Court’s Ruling
We find this petition meritorious.
It
is beyond question that petitions for review may only raise questions of law
which must be distinctly set forth;[14] thus,
this Court is mandated to only consider purely legal questions in this petition,
unless called for by extraordinary circumstances.
In
this case, petitioner raises the issue of denial of due process because it was
allegedly deprived of the opportunity to present its evidence on the just
compensation of properties it wanted to expropriate, and the sufficiency of the
legal basis or bases for the trial court’s Order on the matter of just
compensation. Unquestionably, a petition
for review under Rule 45 of the Rules of Court is the proper vehicle to raise
the issues in question before this Court.
In
view of the significance of the issues raised in this petition, because this
case involves the expenditure of public funds for a clear public purpose, this
Court will overlook the fact that petitioner did not file a Motion for Reconsideration
of the CA November 18, 2002 Decision, and brush aside this technicality in
favor of resolving this case on the merits.
First Issue: Petitioner was deprived of due process
when it was not given the opportunity to present evidence before the
commissioners
It is undisputed that the
commissioners failed to afford the parties the opportunity to introduce
evidence in their favor, conduct hearings before them, issue notices to the
parties to attend hearings, and provide the opportunity for the parties to argue
their respective causes. It is also undisputed that petitioner was not notified
of the completion or filing of the commissioners’ report, and that petitioner
was also not given any opportunity to file its objections to the said
report.
A re-examination of the pertinent
provisions on expropriation, under Rule 67 of the Rules of Court, reveals the
following:
SEC. 6. Proceedings by commissioners.—Before entering upon the performance of their duties, the commissioners shall take and subscribe an oath that they will faithfully perform their duties as commissioners, which oath shall be filed in court with the other proceedings in the case. Evidence may be introduced by either party before the commissioners who are authorized to administer oaths on hearings before them, and the commissioners shall, unless the parties consent to the contrary, after due notice to the parties to attend, view and examine the property sought to be expropriated and its surroundings, and may measure the same, after which either party may, by himself or counsel, argue the case. The commissioners shall assess the consequential damages to the property not taken and deduct from such consequential damages the consequential benefits to be derived by the owner from the public use or purpose of the property taken, the operation of its franchise by the corporation or the carrying on of the business of the corporation or person taking the property. But in no case shall the consequential benefits assessed exceed the consequential damages assessed, or the owner be deprived of the actual value of his property so taken.
SEC. 7. Report by commissioners and judgment thereupon.—The court may order the commissioners to report when any particular portion of the real estate shall have been passed upon by them, and may render judgment upon such partial report, and direct the commissioners to proceed with their work as to subsequent portions of the property sought to be expropriated, and may from time to time so deal with such property. The commissioners shall make a full and accurate report to the court of all their proceedings, and such proceedings shall not be effectual until the court shall have accepted their report and rendered judgment in accordance with their recommendations. Except as otherwise expressly ordered by the court, such report shall be filed within sixty (60) days from the date the commissioners were notified of their appointment, which time may be extended in the discretion of the court. Upon the filing of such report, the clerk of the court shall serve copies thereof on all interested parties, with notice that they are allowed ten (10) days within which to file objections to the findings of the report, if they so desire.
SEC. 8. Action upon commissioners’ report.—Upon the expiration of the period of ten (10) days referred to in the preceding section, or even before the expiration of such period but after all the interested parties have filed their objections to the report or their statement of agreement therewith, the court may, after hearing, accept the report and render judgment in accordance therewith; or, for cause shown, it may recommit the same to the commissioners for further report of facts; or it may set aside the report and appoint new commissioners; or it may accept the report in part and reject it in part; and it may make such order or render such judgment as shall secure to the plaintiff the property essential to the exercise of his right of expropriation, and to the defendant just compensation for the property so taken.
Based on these provisions, it is
clear that in addition to the ocular inspection performed by the two (2) appointed
commissioners in this case, they are also required to conduct a hearing or
hearings to determine just compensation; and to provide the parties the
following: (1) notice of the said hearings and the opportunity to attend them; (2)
the opportunity to introduce evidence in their favor during the said hearings;
and (3) the opportunity for the parties to argue their respective causes during
the said hearings.
The appointment of commissioners to
ascertain just compensation for the property sought to be taken is a mandatory
requirement in expropriation cases. In the instant expropriation case, where
the principal issue is the determination of just compensation, a hearing before
the commissioners is indispensable to allow the parties to present evidence on
the issue of just compensation. While it is true that the findings of
commissioners may be disregarded and the trial court may substitute its own
estimate of the value, the latter may only do so for valid reasons, that is,
where the commissioners have applied illegal principles to the evidence
submitted to them, where they have disregarded a clear preponderance of
evidence, or where the amount allowed is either grossly inadequate or
excessive. Thus, “trial with the aid of the
commissioners is a substantial right that may not be done away with
capriciously or for no reason at all.”[15]
In this case, the fact that no trial
or hearing was conducted to afford the parties the opportunity to present their
own evidence should have impelled the trial court to disregard the commissioners’
findings. The absence of such trial or
hearing constitutes reversible error on the part of the trial court because the
parties’ (in particular, petitioner’s) right to due process was violated.
The Court of Appeals erred in ruling
that the petitioner was not deprived of due process when it was able to file a
motion for reconsideration
In
ruling that petitioner was not deprived of due process because it was able to
file a Motion for Reconsideration, the CA had this to say:
[Petitioner],
further, asserts that “the appointed commissioners failed to conduct a hearing
to give the parties the opportunity to present their respective evidence. According to [petitioner], the Commissioners Valuation
Report was submitted on
We are not persuaded.
The filing by [petitioner] of a motion for reconsideration accorded it ample opportunity to dispute the findings of the commissioners, so that [petitioner] was as fully heard as there might have been hearing actually taken place. “Denial of due process cannot be successfully invoked by a party who has had the opportunity to be heard on his motion for reconsideration.” (Vda. De Chua vs. Court of Appeals, 287 SCRA 33, 50).[16]
In
this respect, we are constrained to disagree with the CA ruling, and therefore,
set it aside.
While it is true that there is
jurisprudence supporting the rule that the filing of a Motion for Reconsideration
negates allegations of denial of due process, it is equally true that there are
very specific rules for expropriation cases that require the strict observance
of procedural and substantive due process,[17] because
expropriation cases involve the admittedly painful deprivation of private
property for public purposes and the disbursement of public funds as just
compensation for the private property taken.
Therefore, it is insufficient to hold that a Motion for Reconsideration
in an expropriation case cures the defect in due process.
As
a corollary, the CA’s ruling that “denial of due process cannot be successfully
invoked by a party who has had the opportunity to be heard on his motion for
reconsideration,” citing Vda. de Chua v.
Court of Appeals, is not applicable to the instant case considering that
the cited case involved a lack of notice of the orders of the trial court in
granting letters of administration. It
was essentially a private dispute and therefore, no public funds were involved. It is distinct from this expropriation case
where grave consequences attached to the orders of the trial court when it
determined the just compensation.
The
Court takes this opportunity to elucidate the ruling that the opportunity to
present evidence incidental to a Motion for Reconsideration will suffice if
there was no chance to do so during the trial.
We find such situation to be the exception and not the general
rule. The opportunity to present
evidence during the trial remains a vital requirement in the observance of due
process. The trial is materially and
substantially different from a hearing on a Motion for Reconsideration. At the trial stage, the party is usually
allowed several hearing dates depending on the number of witnesses who will be
presented. At the hearing of said motion,
the trial court may not be more accommodating with the grant of hearing dates
even if the movant has many available witnesses. Before the decision is rendered, a trial
court has an open mind on the merits of the parties’ positions. After the decision has been issued, the trial
court’s view of these positions might be inclined to the side of the winning
party and might treat the Motion for Reconsideration and the evidence adduced
during the hearing of said motion perfunctorily and in a cavalier fashion. The incident might not receive the evaluation
and judgment of an impartial or neutral judge.
In sum, the constitutional guarantee of due process still requires that
a party should be given the fullest and widest opportunity to adduce evidence
during trial, and the availment of a motion for reconsideration will not
satisfy a party’s right to procedural due process, unless his/her inability to
adduce evidence during trial was due to his/her own fault or negligence.
Second Issue: The legal basis for the determination of
just compensation was insufficient
In this case, it is not disputed that
the commissioners recommended that the just compensation be pegged at PhP 10,000.00
per square meter. The commissioners
arrived at the figure in question after their ocular inspection of the
property, wherein they considered the surrounding structures, the property’s
location and, allegedly, the prices of the other, contiguous real properties in
the area. Furthermore, based on the
commissioners’ report, the recommended just compensation was determined as of
the time of the preparation of said report on
In B.H. Berkenkotter & Co. v. Court of
Appeals, we held, thus:
Just compensation is defined as the full and fair equivalent of the property sought to be expropriated. The measure is not the taker’s gain but the owner’s loss. The compensation, to be just, must be fair not only to the owner but also to the taker. Even as undervaluation would deprive the owner of his property without due process, so too would its overvaluation unduly favor him to the prejudice of the public.
To determine just compensation, the
trial court should first ascertain the market value of the property, to which
should be added the consequential damages after deducting therefrom the
consequential benefits which may arise from the expropriation. If the consequential benefits exceed the
consequential damages, these items should be disregarded altogether as the
basic value of the property should be paid in every case.
The
market value of the property is the price that may be agreed upon by parties
willing but not compelled to enter into the contract of sale. Not unlikely, a buyer desperate to acquire a piece
of property would agree to pay more, and a seller in urgent need of funds would
agree to accept less, than what it is actually worth. x x x
Among
the factors to be considered in arriving at the fair market value of the
property are the cost of acquisition, the current value of like properties, its
actual or potential uses, and in the particular case of lands, their size,
shape, location, and the tax declarations thereon.
It
is settled that just compensation is to be ascertained as of the time of the
taking, which usually coincides with the commencement of the expropriation
proceedings. Where the institution of
the action precedes entry into the property, the just compensation is to be
ascertained as of the time of the filing of the complaint.[18]
We note that in this case, the filing
of the complaint for expropriation preceded the petitioner’s entry into the
property.
Therefore, it is clear that in this
case, the sole basis for the determination of just compensation was the commissioners’
ocular inspection of the properties in question, as gleaned from the
commissioners’
Moreover, the trial court did not
amply explain the nature and application of the “highest and best use” method
to determine the just compensation in expropriation cases. No attempt was made to justify the
recommended “just price” in the subject report through other sufficient and
reliable means such as the holding of a trial or hearing at which the parties could
have had adequate opportunity to adduce their own evidence, the testimony of
realtors in the area concerned, the fair market value and tax declaration,
actual sales of lots in the vicinity of the lot being expropriated on or about
the date of the filing of the complaint for expropriation, the pertinent zonal
valuation derived from the Bureau of Internal Revenue, among others.
More so, the commissioners did not
take into account that the Asian financial crisis in the second semester of
1997 affected the fair market value of the subject lots. Judicial notice can be taken of the fact that
after the crisis hit the real estate market, there was a downward trend in the
prices of real estate in the country.
Furthermore, the commissioners’
report itself is flawed considering that its recommended just compensation was
pegged as of
Clearly, the legal basis for the
determination of just compensation in this case is insufficient as earlier enunciated. This being so, the trial court’s ruling in
this respect should be set aside.
WHEREFORE, the petition is GRANTED. The
SO ORDERED.
PRESBITERO
J. VELASCO, JR.
Associate Justice
WE CONCUR:
LEONARDO A.
QUISUMBING
Associate Justice
Chairperson
ANTONIO T.
CARPIO CONCHITA
CARPIO MORALES
Associate Justice Associate Justice
DANTE O. TINGA
Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
C E R T I F
I C A T I O N
Pursuant to Section 13, Article VIII of the
Constitution, and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
[1] Rollo, pp. 31-37. The Decision was penned by Associate Justice B.A. Adefuin-Dela Cruz, and concurred in by Associate Justices Mercedes Gozo-Dadole and Mariano C. Del Castillo.
[2]
[3]
[4]
[5]
SEC. 2. Entry of plaintiff upon
depositing value with authorized government depositary.––Upon the filing of
the complaint or at any time thereafter and after due notice to the defendant,
the plaintiff shall have the right to take or enter upon the possession of the
real property involved if he deposits with the authorized government depositary
an amount equivalent to the assessed value of the property for purposes of
taxation to be held by such bank subject to the orders of the court. Such deposit shall be in money, unless in
lieu thereof the court authorizes the deposit of a certificate of deposit of a
government bank of the Republic of the
If personal property is involved, its value shall be provisionally ascertained and the amount to be deposited shall be promptly fixed by the court.
After such deposit is made the court shall order the
sheriff or other proper officer to forthwith place the plaintiff in possession
of the property involved and promptly submit a report thereof to the court with
service of copies to the parties.
[6] Rollo, p. 60.
[7]
[8]
[9] Supra note 2.
[10] Rollo, pp. 75-76.
[11] SEC. 4. Order of expropriation.––If the objections to and the defenses against the right of the plaintiff to expropriate the property are overruled, or when no party appears to defend as required by this Rule, the court may issue an order of expropriation declaring that the plaintiff has a lawful right to take the property sought to be expropriated, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the taking of the property or the filing of the complaint, whichever came first (emphasis supplied).
[12] Supra note 1, at 37.
[13] Rollo, p. 18.
[14] Rules of Court, Rule 45, Sec. 1.
[15] Manila Electric Company v. Pineda, G.R.
No. 59791,
[16] Supra note 1, at 37.
[17] Supra note 16.
[18]
G.R. No. 89980,