G.R. No. 220367.  November 20, 2017.*

NATIONAL POWER CORPORATION, petitioner, vs. APOLONIO
V. MARASIGAN, FRANCISCO V. MARASIGAN, LILIA V.
MARASIGAN, BENITO V. MARASIGAN, JR., and ALICIA V.
MARASIGAN, respondents.

Eminent Domain; Expropriation Proceedings; Just Compensation; Sec.

4, Rule 67 lays down the basic rule that the value of the just compensation is
to be determined as of the date of the taking of the property or the filing of
the complaint, whichever came first.—The circumstances surrounding the
“taking” of property in the context of the State’s exercise of the power of
eminent domain has been jurisprudentially listed in the seminal case of
Republic v. Vda. de Castellvi, 58 SCRA 336 (1974), thus: First, the
expropriator must enter a private property. x  x  x Second, the entrance into
private property must be for more than a momentary period. x x x x x x x
Fourth, the property must be devoted to a public use or otherwise informally

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*  FIRST DIVISION.

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appropriated or injuriously affected. x  x  x Fifth, the utilization of the

property for public use must be in such a way as to oust the owner and
deprive him of all beneficial enjoyment of the property. x x x That there was
taking of the subject properties for purposes of expropriation is beyond
contest. What plagues the court and the parties is the date when such taking
is to be reckoned because this will, in turn, be determinative of the value of
the subject properties from which the amount of just compensation will be
based. Sec. 4, Rule 67 lays down the basic rule that the value of the just
compensation is to be determined as of the date of the taking of the property
or the filing of the complaint, whichever came first.
 Same; Same; Same; Judicial Review; Factual issues pertaining to the
value of an expropriated property is beyond the scope of judicial review
under a petition filed via Rule 45.—To begin with, factual issues pertaining
to the value of an expropriated property is beyond the scope of judicial
review under a petition filed via Rule 45. As such, factual findings of the
trial and appellate courts will not be disturbed by this Court unless any of
the recognized exceptions is present. No such exception obtains in the
instant case. The various provisions of the Constitution uniformly treat the
payment of just compensation as a limitation to the State’s exercise of
eminent domain. Just compensation likewise bears the consistent and settled
meaning as the full and fair equivalent of the property taken from its owner
by the expropriator, the measure is not the taker’s gain, but the owner’s loss.
The word “just” is used to qualify the meaning of the word “compensation”
and to convey thereby the idea that the amount to be tendered for the
property to be taken shall be real, substantial, full and ample.
Same; Same; Same; The determination of just compensation in
expropriation cases is a function addressed to the discretion of the courts
owing to the constitutional mandate that no private property shall be taken
for public use without payment of just compensation.—The determination of
just compensation in expropriation cases is a function addressed to the
discretion of the courts owing to the constitutional mandate that no private
property shall be taken for public use without payment of just
compensation. As such, legislative enactments, as well as executive
issuances, fixing or providing for the method of computing just
compensation are tantamount to impermissible encroachment on judicial
prerogatives. As such, they are not binding on courts and are treated as mere
guidelines in ascer-

 
 

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taining the amount of just compensation. Even the enumeration of the

standards for the assessment of the value of the land for purposes of
expropriation under Section 5 of Republic Act No. 8974 reflects the
nonexclusive, permissive and discretionary character thereof.
Same; Same; Same; The Supreme Court’s (SC’s) discretion in
classifying the expropriated land is only for the purpose of determining just
compensation and is not meant to substitute that of the local government’s
power to reclassify and convert lands through local ordinance.—The
insistence of NPC to base the value of the properties solely on the tax
declarations is misplaced considering that such is only one of the several
factors which the court may consider to facilitate the determination of just
compensation. Indeed, courts enjoy sufficient judicial discretion to
determine the classification of lands, because such classification is one of
the relevant standards for the assessment of the value of lands subject of
expropriation proceedings. It bears to emphasize, however, that the court’s
discretion in classifying the expropriated land is only for the purpose of
determining just compensation and is not meant to substitute that of the
local government’s power to reclassify and convert lands through local
ordinance. The subject properties in this case had been reclassified as
residential, commercial and industrial several years before the expropriation
complaint was filed. If NPC contests the reclassification of the subject
properties, the expropriation case is not the proper venue to do so. As such,
the RTC and the CA did not err in abiding by the classification of the subject
properties as residential, commercial and industrial as reclassified under
Sangguniang Bayan Resolution No. 17 and Municipal Ordinance No. 7
dated February 1, 1993 and as certified to by the Municipal Assessor of Pili,
Camarines Sur.
Same; Same; Same; As a rule, just compensation, to which the owner
of the property to be expropriated is entitled, is equivalent to the market
value.—As a rule, just compensation, to which the owner of the property to
be expropriated is entitled, is equivalent to the market value. The rule is
modified where only a part of a certain property is expropriated. In such a
case, the owner is not restricted to compensation for the portion actually
taken, he is also entitled to recover the consequential damages, if any, to the
remaining part of the property.

 
 

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Same; Same; Consequential Damages; If as a result of expropriation,

the remaining portion of the property suffers from impairment or decrease
in value, the award of consequential damages is proper.—Consequential
damages is specifically enunciated under Section 6 of Rule 67 as follows:
Section 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. Thus, if as a result of expropriation, the remaining portion of the
property suffers from impairment or decrease in value, the award of
consequential damages is proper.
Same; Same; Consequential Benefits; Consequential benefits refer to
the actual benefits derived by the landowner which are the direct and
proximate results of the improvements as a consequence of the expropriation
and not to the general benefits which the landowner may receive in common
with the community.—NPC’s contention that the consequential benefits
should have canceled the consequential damages likewise deserve no merit.
It is true that if the expropriation resulted in benefits to the remaining lot,
such consequential benefits may be deducted from the consequential
damages or from the value of the expropriated property. However, such
consequential benefits refer to the actual benefits derived by the landowner
which are the direct and proximate results of the improvements as a
consequence of the expropriation and not to the general benefits which the

 
 

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landowner may receive in common with the community. Here, it was

not shown by NPC how the alleged “tremendous increase” in the value of
the remaining portions of the properties could have been directly caused by
the construction of the transmission lines. If at all, any appreciation in the
value of the properties is caused by the consequent increase in land value
over time and not by the mere presence of the transmission lines.
Same; Same; Interest; The award of interest is imposed in the nature of
damages for delay in payment which, in effect, makes the obligation on the
part of the government one of forbearance to ensure prompt payment of the
value of the land and limit the opportunity loss of the owner.—The award of
interest is imposed in the nature of damages for delay in payment which, in
effect, makes the obligation on the part of the government one of
forbearance to ensure prompt payment of the value of the land and limit the
opportunity loss of the owner. Thus, the imposition of interest is justified
only in cases where delay has been sufficiently established. In this case,
NPC deposited the provisional value of the subject properties in the amount
of Php47,064,400 on May 19, 2006 which was days before the issuance of a
writ of possession. Considering NPC’s prompt payment, the imposition of
interest thereon is unjustified and should therefore be deleted.

PETITION for review on certiorari of a decision of the Court of

Appeals.
The facts are stated in the opinion of the Court.
    The Solicitor General for petitioner.
   Miriam O. Dipasupil-Gestiada for respondents.

 
TIJAM,  J.:
 
This Petition for Review1 on Certiorari under Rule 45 challenges
the Decision2 dated September 1, 2015 of the Court of

_______________

1  Rollo, pp. 32-63.

2   Id., at pp. 64-77; penned by Associate Justice Leoncia Real-Dimagiba, and
concurred in by Associate Justices Ramon R. Garcia and Zenaida T. Galapate-
Laguilles.

 
 

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Appeals (CA) in C.A.-G.R. CV No. 97640, which affirmed the
Decision3 dated December 20, 2010 of the Regional Trial Court
(RTC) of Pili, Camarines Sur, in the expropriation case commenced
by petitioner National Power Corporation (NPC) against
respondents as registered owners of the subject properties.
 
The Antecedents
For purposes of constructing and maintaining its steel
transmission lines and wooden electric poles for its Naga-Tiwi 230
KV (Single Bundle), Naga-Tiwi 230 KV (Double Bundle) and 69
KV Naga-Daraga Transmission Lines, NPC filed, on January 23,
2006, an expropriation complaint4 against respondents as registered
owners of the following four parcels of land located in Barangays
Sagurong, San Agustin and San Jose, Pili, Camarines Sur:
 

_____________

3   Id., at pp. 196-210.

 4   Id., at pp. 377-381.
5   Id., at pp. 384-386.
6   Id., at pp. 400-401.
7   Id., at pp. 387-392.
8   Id., at pp. 402-407.
9   Id., at pp. 393-395.
10   Id., at pp. 408-409.
11   Id., at pp. 396-399.
12   Id., at pp. 410-411.

 
 
 

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The total area over which NPC sought an easement of right of
way covers 49,173 square meters of the subject properties.13 Based
on the tax declarations allegedly classifying the properties as
agricultural and based on the corresponding Bureau of Internal
Revenue’s (BIR) zoning valuation therefor, NPC offered to pay
Php299,550.50.14
While interposing no objection to the expropriation, respondents
nevertheless opposed the classification of the properties as
agricultural on the ground that the same were classified as industrial,
commercial and residential since the year 1993 as shown by (1)
Sangguniang Bayan Resolution No. 17; (2) Municipal Ordinance
No. 7 dated February 1, 1993; (3) annotations on the memorandum
of encumbrances of the titles; (4) DARCO Conversion Order No.
050301016014-(300)-00, Series of 2000 issued by the Department
of Agrarian Reform; and (5) Certification issued by the Municipal
Assessor of Pili, Camarines Sur.15 Respondents thus claimed
Php47,064,400 for the affected 49,173 square meters. By way of
counterclaim, respondents sought payment of consequential
damages for the areas left in between each transmission line, like the
spaces underneath the infrastructure, commonly known as
“dangling” portions in the total area of 41,869 square meters.16
After the pretrial, the RTC issued an Order of Expropriation and
further fixed the provisional value of the properties at
Php47,064,400, which amount was eventually deposited by NPC
with Landbank of the Philippines.17 Accordingly, in an Omnibus
Order dated May 23, 2006, the RTC issued a writ of possession in
favor of NPC and ordered the LBP to release to respondents the
amount deposited.18 Meanwhile, an appraisal committee was formed
by the RTC for purposes of determin-
_______________

13  Id., at p. 78.
14  Id., at p. 79.
15  Id., at p. 198.
16  Id., at pp. 197-198.
17  Id., at p. 198.
18  Id., at p. 200.

 
 

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ing just compensation,19 which thereafter submitted a Consolidated
Report dated August 10, 2006.20 A reversed trial thereafter ensued.
Respondents presented the Chairman21 of the appraisal
committee who testified that the appraisal committee
recommended22 the total valuation of Php49,064,400 based on the
assessor’s data and the BIR zonal valuations as indicated on the
1997 tax declarations.23 Also presented was the succeeding
Chairman24 of the appraisal committee who testified that the
properties suffered consequential damages which the appraisal
committee recommended to be computed at 50% of the BIR zonal
value per square meter or for a total amount of Php22,227,800.25 On
ocular inspection, the appraisal committee found that the existence
of the transmission lines hampered the properties’ potential use such
that while the areas before and after the transmission lines could still
be used, the areas in between could no longer be utilized. The
appraisal committee also noted that the transmission lines produced
considerable noise making the area unsuitable for residential
purposes.26
NPC, on the other hand, presented its right-of-way officers whose
testimonies sought to establish that the lots being claimed by
respondents as “dangling” areas were classified as agricultural under
the tax declarations and that NPC negotiated with respondents for
purposes of installing the transmission lines in 199627 and that NPC
took the subject properties

_______________

19  Id.
20  Id.
21  Atty. Eli Posugac, Clerk of Court VI, OCC of RTC, Pili, Camarines Sur.
22  Consolidated Report dated August 9, 2006.
23  Rollo, pp. 200-201.
24  Atty. Rizza E. Ballebar, Branch Clerk of Court V.
25  Rollo, p. 204.
 26  Id.
27  Id.

 
 

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in between the years 1996 to 1998.28 The right-of-way officer further
testified that the “dangling” areas could still be used for agricultural
purposes but nevertheless agreed that the presence of the
transmission lines may endanger the people and animals therein if in
case they fell.29 On cross-examination, the right-of-way officer
admitted that the properties were classified as agro-industrial as
stated in the 1998 tax declarations. He admitted that the
classification of the properties as agricultural which was used as
basis for computing its value was erroneous.30
The RTC rendered its Decision dated December 20, 2010
affirming the recommendation of the appraisal committee for the
payment of just compensation and fixed the amount of
Php47,064,400 for the 49,173 square meters based on the BIR zonal
valuation of the properties classified as residential, commercial and
industrial as of the time of the filing of the complaint on January 23,
2006. The RTC rejected NPC’s claim that it took possession of the
property in 1972 and 1974 when respondents allegedly allowed NPC
to construct the transmission lines for lack of proof. In addition, the
RTC held that had the properties been taken on said years, such
taking was without color of legal authority. The RTC likewise
adopted the recommendation of the appraisal committee for the
payment of Php22,227,800 as consequential damages for the 41,867
square meters portion of the properties which were rendered useless
or no longer fit for its intended use due to the construction of the
transmission lines.31
In disposal, the RTC held:

Wherefore, judgment is hereby rendered:

_______________

28  Id.
29  Id., at pp. 205-206.
30  Id., at p. 206.
31  Id., at pp. 208-209.

 
 

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National Power Corporation vs. Marasigan

1.  Approving and adopting the Commissioner’s Report dated

August 9, 2006 and November 24, 2008;
2.  The payment of the provisional value (on May 19, 2006 when
plaintiff made the deposit) of P47,064,400.00 as just compensation
for the 49,173 square meters area directly affected by the
transmission lines is the payment for the just compensation with 12%
interest per annum (Marina Z. Reyes, et al. v. National Housing
Authority, G.R. No. 147511, January 20, 2003), from the date of
filing of this case until paid;
3.  Condemning plaintiff to pay defendants the amount of
P22,227,800.00 as consequential damages with interest at 12% per
annum from January 23, 2006 until fully paid;
4.  To pay P20,000.00 attorney’s fees.
SO ORDERED.32

 
NPC’s motion for reconsideration was denied by the RTC in its
Order dated May 2, 2011.33 However, the RTC modified the
imposition of interest as follows:
 

Wherefore, judgment is hereby rendered:

1.  Approving and adopting the Commissioner’s Report dated
August 9, 2006 and November 24, 2008;
2.  The payment of the provisional value (on May 19, 2006 when
plaintiff made the deposit) of P47,064,400.00 as just compensation
for the 49,173 square meters area directly affected by the
transmission lines is the payment for the just compensation with
interest at 6% per annum from the date of filing of the case until full
payment less the interest collected by the defendants from the bank
deposit;
3.  Condemning plaintiff to pay defendants the amount of
P22,227,800.00 as consequential damages with inter-

_______________

32  Id., at pp. 209-210.

33  Id., at p. 68.

 
 

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est at 6% per annum from January 23, 2006 and at 12% per
annum from the date of finality of this decision until fully paid;
4.  To pay P20,000.00 attorney’s fees.
SO ORDERED.34

Consequently, NPC interposed its appeal before the CA raising as

issues the alleged erroneous award of just compensation and
consequential damages. Specifically, NPC argued that the award was
based on the premise that it sought to acquire ownership over the
properties when it merely seeks to acquire a right-of-way thus
necessitating the payment of a mere easement fee equivalent to 10%
of the market value of the properties. Further, it argued that the
award is contrary to the zonal valuation of the property classified as
agricultural and erroneously reckoned as of the time of the filing of
the complaint instead as of the time of taking.
On the other hand, respondents moved for the execution of the
award pending appeal which the RTC granted.35 A writ of execution
and a notice of garnishment were thereafter issued.36
On September 1, 2015, the CA rendered its Decision denying
NPC’s appeal. Contrary to NPC’s claim, the CA held that the just
compensation to be paid for an easement of a right-of-way over
lands that would be traversed by high-powered transmission lines
should be the full value of the subject property.37
The CA likewise found no merit in NPC’s argument that the fair
market value of the properties should have been based on the BIR
zonal valuation at the time of its supposed taking of the property in
the 1970s and on the basis of its classification as agricultural land as
stated in the tax declarations. The CA reasoned that NPC failed to
allege the issue of

_______________

34  Id.
35  Id., at p. 69.
36  Id.
37  Id., at p. 71.

 
 

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taking in its complaint nor was such raised during pretrial or proven
during trial. The CA also held that to base the fair market value of
the property during the alleged actual taking in the 1970s is to
compound the injustice caused to respondents as the expropriation
complaint was filed more than 30 years after NPC allegedly took
respondents’ properties.38 As regards to the proper classification of
the properties, the CA noted that these were already reclassified as
residential, commercial and industrial by the municipality of Pili,
Camarines Sur even prior to the filing of the expropriation
complaint.39
Finally, the CA found no reason to disturb the RTC’s award of
consequential damages as testimony to that effect was presented by
respondents while NPC, on the other hand, failed to prove the
alleged consequential benefits.
The CA thus disposed:
 

WHEREFORE, the foregoing considered, the appeal is hereby

DENIED and the decision of the trial court [dated] December 20,
2010, as modified by its Order dated May 2, 2011, is AFFIRMED in
toto.
SO ORDERED.40
Upon denial of its motion for reconsideration, NPC filed the
present petition.

The Issues
Reiterating its arguments before the lower courts, NPC interposes
the following issues for resolution: (1.) should the value of the
property be reckoned at the time of the taking in the 1970s; (2.)
should the amount of just compensation be based on the properties’
BIR zonal valuation corresponding to

_______________

38  Id., at p. 73.
39  Id., at p. 75.
40  Id., at p. 77.

 
 

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its classification as agricultural in the tax declarations; and (3.) is the
award of consequential damages for the “dangling” area proper.41
Essentially, NPC contests the amount of just compensation and
the award of consequential damages.
 
The Ruling
We deny the petition.
 
Reckoning point of
the market value of
the properties
The circumstances surrounding the “taking” of property in the
context of the State’s exercise of the power of eminent domain has
been jurisprudentially listed in the seminal case of Republic v. Vda.
de Castellvi,42 thus:

First, the expropriator must enter a private property. x x x

Second, the entrance into private property must be for more than a
momentary period. x x x
x x x x
Fourth, the property must be devoted to a public use or otherwise
informally appropriated or injuriously affected. x x x
Fifth, the utilization of the property for public use must be in such
a way as to oust the owner and deprive him of all beneficial
enjoyment of the property. x x x43

_______________

41  Id., at p. 44.
42  157 Phil. 329, 345-347; 58 SCRA 336, 350 (1974).
43  Id., at pp. 345-346; pp. 350-352.

 
 
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That there was taking of the subject properties for purposes of
expropriation is beyond contest. What plagues the court and the
parties is the date when such taking is to be reckoned because this
will, in turn, be determinative of the value of the subject properties
from which the amount of just compensation will be based.
Sec. 4,44 Rule 67 lays down the basic rule that the value of the
just compensation is to be determined as of the date of the taking of
the property or the filing of the complaint, whichever came first.
The case of National Transmission Corporation v. Oroville
Development Corporation,45 settles that just compensation should be
reckoned from the date of actual taking when such preceded the
filing of the complaint for expropriation. In Oroville, the Court
explains that the State is only obliged to make good the loss
sustained by the landowner and considering the circumstances
availing at the time the property was taken. Deviation from this
general rule was permitted in the cases of National Power
Corporation v. Heirs of Macabangkit Sang-

_______________
 44   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.
                     A final order sustaining the right to expropriate the property may be
appealed by any party aggrieved thereby. Such appeal, however, shall not prevent the
court from determining the just compensation to be paid.
                                      After the rendition of such an order, the plaintiff shall not be
permitted to dismiss or discontinue the proceeding except on such terms as the court
deems just and equitable.
45  G.R. No. 223366, August 1, 2017, 833 SCRA 575.

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kay46 and National Power Corporation v. Spouses Saludares47 due to
special circumstances48 therein obtaining which necessitated a
valuation of just compensation at the time the landowners initiated
inverse condemnation proceedings notwithstanding that taking of
the properties occurred first.

_______________

46  671 Phil. 569; 656 SCRA 60 (2011).

47  686 Phil. 967; 671 SCRA 266 (2012).
48   As cited in  National Transmission Corporation v. Oroville, these special
circumstances are as follows:
In Macabangkit Sangkay:
“Compensation that is reckoned on the market value prevailing at the time either
when NPC entered or when it completed the tunnel, as NPC submits, would not be
just, for it would compound the gross unfairness already caused to the owners by
NPC’s entering without the intention of formally expropriating the land, and without
the prior knowledge and consent of the Heirs of Macabangkit. NPC’s entry denied
elementary due process of law to the owners since then until the owners commenced
the inverse condemnation proceedings. The Court is more concerned with the
necessity to prevent NPC from unjustly profiting from its deliberate acts of denying
due process of law to the owners. As a measure of simple justice and ordinary
fairness to them, therefore, reckoning just compensation on the value at the time the
owners commenced these inverse condemnation proceedings is entirely warranted.”
In Saludares:
“x  x  x To reiterate, NAPOCOR should have instituted eminent domain
proceedings before it occupied respondent spouses’ property. Because it failed to
comply with this duty, respondent spouses were constrained to file the instant
Complaint for just compensation before the trial court. From the 1970s until the
present, they were deprived of just compensation, while NAPOCOR continuously
burdened their property with its transmission lines. This Court cannot allow petitioner
to profit from its failure to comply with the mandate of the law. We therefore rule that,
to adequately compensate respondent spouses from the decades of burden on their
property, NAPOCOR should be made to pay the value of the property at the time of
the filing of the instant Complaint when respondent spouses made a judicial demand
for just compensation.”

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The peculiarity of the instant case is that NPC insists that it took
the subject properties in the 1970s despite having initiated the
expropriation complaint only on January 23, 2006. Following the
general rule, NPC thus reasons that the value of the properties
should be reckoned in the 1970s. However, NPC’s expropriation
complaint and the very testimonial evidence it offered strongly
militate against such proposition.
NPC’s expropriation complaint filed on January 23, 2006 clearly
sought “to acquire an easement of right-of-way over portions of the
[subject properties]”49 to enable it “to construct and maintain its
steel transmission lines and wooden electric poles for its Naga-Tiwi
230 KV (Single Bundle), Naga-Tiwi 230 KV (Double Bundle) and
69 KV Naga-Daraga Transmission Lines.”50 NPC’s action relative to
the acquisition of an easement of right-of-way made prior to the
filing of its expropriation complaint was limited only to the conduct
of negotiations with respondents. Even then, such negotiations
pertained to the construction of HVDC 350 KV transmission lines
which was not among the transmission lines subject of the
expropriation complaint. This, as much, was alleged by NPC itself
in its expropriation complaint51 and was testified to by NPC’s right-
of-way officer who conducted the negotiations in 1996.52 The lower
courts were thus correct in disregarding NPC’s claim of actual
taking in the 1970s as such was not alleged in the expropriation
complaint nor was it successfully proven during the trial.
There being no sufficient proof that NPC actually took the
subject properties at a date preceding the filing of the expropriation
complaint, the time of the taking should be taken to mean as
coinciding with the commencement of the expropriation proceedings
on January 23, 2006. Hence, the value at the
 

_______________

49  See paragraph 5 of the Complaint; Rollo, p. 378.

50  Id.
51  See paragraph 7 of the Complaint; id., at p. 379.
 52  Rollo, p. 204.

 
 

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time of the filing of the complaint should be the basis for the
determination of the value when the taking of the property involved
coincides with or is subsequent to the commencement of the
proceedings.53
 
Amount of just
compensation

To begin with, factual issues pertaining to the value of an

expropriated property is beyond the scope of judicial review under a
petition filed via Rule 45.54 As such, factual findings of the trial and
appellate courts will not be disturbed by this Court unless any of the
recognized exceptions is present.55 No such exception obtains in the
instant case.

_______________

53   Municipality of La Carlota v. Spouses Felicidad Baltazar and Vicente Gan,

150-A Phil. 588, 594; 45 SCRA 235, 240-242 (1972).
54   National Power Corporation v. Asoque, G.R. No. 172507, September 14,
2016, 802 SCRA 582.
55  In Westmont Investment Corporation v. Francia, Jr., 678 Phil. 180, 191; 661
SCRA 787, 797 (2011), the Court reiterates the following exceptions:
                    “While it goes without saying that only questions of law can be raised
in a petition for review on certiorari under Rule 45, the same admits of exceptions,
namely: (1) when the findings are grounded entirely on speculations, surmises, or
conjectures; (2) when the inference made is manifestly mistaken, absurd, or
impossible; (3) when there is a grave abuse of discretion; (4) when the judgment is
based on misappreciation of facts; (5) when the findings of fact are conflicting; (6)
when in making its findings, the same are contrary to the admissions of both appellant
and appellee; (7) when the findings are contrary to those of the trial court; (8) when
the findings are conclusions without citation of specific evidence on which they are
based; (9) when the facts set forth in the petition as well as in the petitioner’s main
and reply briefs are not disputed by the respondent; and (10) when the findings of fact
are premised on the supposed absence of evidence and contradicted by the evidence
on record.”

 
 
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The various provisions of the Constitution56 uniformly treat the
payment of just compensation as a limitation to the State’s exercise
of eminent domain. Just compensation likewise bears the consistent
and settled meaning as the full and fair equivalent of the property
taken from its owner by the expropriator, the measure is not the
taker’s gain, but the owner’s loss. The word “just” is used to qualify
the meaning of the word “compensation” and to convey thereby the
idea that the amount to be tendered for the property to be taken shall
be real, substantial, full and ample.57

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56  Article  III.  Bill of Rights
Section  9.  Private property shall not be taken for public use without just
compensation.
Article  XII.  National Economy and Patrimony
Section  18.  The State may, in the interest of national welfare or defense,
establish and operate vital industries and,  upon payment of just
compensation, transfer to public ownership utilities and other private
enterprises to be operated by the Government.
Article  XIII.  Social Justice and Human Rights
Section  4.  The State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular farmworkers who are
landless, to own directly or collectively the lands they till or, in the case of
other farmworkers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural
lands, subject to such priorities and reasonable retention limits as the
Congress may prescribe, taking into account ecological, developmental, or
equity considerations, and subject to the payment of just compensation. In
determining retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary land-
sharing. (Emphasis supplied)
57  National Power Corporation v. Zabala, 702 Phil. 491; 689 SCRA 554 (2013),
citing  Republic v. Rural Bank of Kabacan, Inc., 680 Phil. 247; 664 SCRA 233
(2012); National Power Corporation v.
 

 
 

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 Further, the determination of just compensation in expropriation
cases is a function addressed to the discretion of the courts owing to
the constitutional mandate that no private property shall be taken for
public use without payment of just compensation.58 As such,
legislative enactments, as well as executive issuances, fixing or
providing for the method of computing just compensation are
tantamount to impermissible encroachment on judicial prerogatives.
As such, they are not binding on courts and are treated as mere
guidelines in ascertaining the amount of just compensation.59 Even
the enumeration of the standards for the assessment of the value of
the land for purposes of expropriation under Section 5 of Republic
Act No. 897460 reflects the nonexclusive, permissive and
discretionary character thereof.61
 

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Manubay Agro-Industrial Development Corporation, 480 Phil. 470, 479; 437

SCRA 60, 68 (2004).
58  National Power Corporation v. Tuazon, 668 Phil. 301; 653 SCRA 84 (2011).
59  Supra note 57.
60  Section 5 of Republic Act No. 8974 otherwise known as An Act to Facilitate
the Acquisition of Right-of-Way, Site or Location for National Government
Infrastructure Projects and Other Purposes, enumerates the standards that assist in the
determination of just compensation, as follows:
SEC.  5.  Standards for the Assessment of the Value of the Land
Subject of Expropriation Proceedings or Negotiated Sale.—In order to
facilitate the determination of just compensation, the court may
consider, among other well-established factors, the following
relevant standards:
         (a)  The classification and use for which the property  is
suited;
         (b)  The developmental costs for improving the land; 
          (c)  The value declared by the owners;
                   (d)  The current selling price of similar lands in the vicinity;

 
 

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Here, NPC assails the valuation assigned to the subject properties
for being contrary to its alleged classification as agricultural as
appearing on the tax declarations attached to its expropriation
complaint.
However, the insistence of NPC to base the value of the
properties solely on the tax declarations is misplaced considering
that such is only one of the several factors which the court may
consider to facilitate the determination of just compensation. Indeed,
courts enjoy sufficient judicial discretion to determine the
classification of lands, because such classification is one of the
relevant standards for the assessment of the value of lands subject of
expropriation proceedings. It bears to emphasize, however, that the
court’s discretion in classifying the expropriated land is only for the
purpose of determining just compensation and is not meant to
substitute that of the local government’s power to reclassify and
convert lands through local ordinance.62
 

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      (e)  The reasonable disturbance compensation for the removal
and/or demolition of certain improvements on the land and for the
value of improvements thereon;
          (f)  The size, shape or location,  tax declaration  and  zonal
valuation of the land;
             (g)  The price of the land as manifested in the ocular findings,
oral as well as documentary evidence presented; and
                    (h)  Such facts and events as to enable the affected property owners
to have sufficient funds to acquire similarly-situated lands of approximate areas as
those required from them by the government, and thereby rehabilitate themselves as
early as possible. (Emphasis supplied)
61  Republic v. C.C. Unson Company, Inc., G.R. No. 215107, February 24, 2016,
785 SCRA 202, citing  Republic v. Heirs of Spouses Pedro Bautista and Valentina
Malabanan, 702 Phil. 284; 689 SCRA 349 (2013).
62  Republic v. Far East Enterprises, Inc., 613 Phil. 436; 597 SCRA 75 (2009).

 
 

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The subject properties in this case had been reclassified as
residential, commercial and industrial several years before the
expropriation complaint was filed. If NPC contests the
reclassification of the subject properties, the expropriation case is
not the proper venue to do so. As such, the RTC and the CA did not
err in abiding by the classification of the subject properties as
residential, commercial and industrial as reclassified under
Sangguniang Bayan Resolution No. 17 and Municipal Ordinance
No. 7 dated February 1, 1993 and as certified to by the Municipal
Assessor of Pili, Camarines Sur.
In any case, reliance on the tax declarations attached to NPC’s
expropriation complaint to classify the properties as purely
agricultural is inaccurate as these very same tax declarations reveal
that portions of the expropriated Lot No. 4237 and Lot No. 2870 are
in fact classified as residential and commercial.63
 
Award of consequential
damages
As a rule, just compensation, to which the owner of the property
to be expropriated is entitled, is equivalent to the market value.64
The rule is modified where only a part of a certain property is
expropriated. In such a case, the owner is not restricted to
compensation for the portion actually taken, he is also entitled to
recover the consequential damages, if any, to the remaining part of
the property.
Consequential damages are specifically enunciated under Section
6 of Rule 67 as follows:

_______________

 
63  Rollo, pp. 402-409.
64   “Market value” is that sum of money which a person desirous but not
compelled to buy, and an owner willing but not compelled to sell, would agree on as a
price to be paid by the buyer and received by the seller;  Republic v. Bank of the
Philippine Islands (BPI), 717 Phil. 809, 821-822; 705 SCRA 650, 664-665 (2013).
 

 
 

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Section  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. (Emphasis supplied)

 
Thus, if as a result of expropriation, the remaining portion of the
property suffers from impairment or decrease in value, the award of
consequential damages is proper.65
Respondents in this case claim consequential damages for the
areas in between the transmission lines which were rendered unfit
for use. “Dangling” areas, as defined under National Power Board
Resolution No. 94-313, refer to those remaining small portions of
the land not traversed by the transmission line project but which are
nevertheless rendered useless in view of the presence of the
transmission lines. The appraisal committee determined the total
dangling area to be

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65  Republic v. Court of Appeals, 612 Phil. 965; 596 SCRA 57 (2009).

 
 
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270 SUPREME COURT REPORTS ANNOTATED

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41,867 square meters66 and consequently recommended the payment
of consequential damages equivalent to 50% of the BIR zonal value
per square meter or for a total amount of Php22,227,800.
In arriving at its recommendation to pay consequential damages,
the appraisal committee conducted an ocular inspection of the
properties and observed that the areas before and behind the
transmission lines could no longer be used either for commercial or
residential purposes. Despite this determination, NPC insists that the
affected areas cannot be considered “dangling” as these may still be
used for agricultural purposes.67 In so arguing, NPC loses sight of
the undisputed fact that the transmission lines conveying high-
tension current posed danger to the lives and limbs of respondents
and to potential farmworkers, making the affected areas no longer
suitable even for agricultural production. Thus, the Court finds no
reason to depart from the assessment of the appraisal committee, as
affirmed and adopted by the RTC.
NPC’s contention that the consequential benefits should have
canceled the consequential damages likewise deserve no merit. It is
true that if the expropriation resulted in benefits to the remaining lot,
such consequential benefits may be deducted from the consequential
damages or from the value of the expropriated property.68 However,
such consequential benefits refer to the actual benefits derived by the
landowner which are the direct and proximate results of the
improvements as a consequence of the expropriation and not to the
general benefits which the landowner may receive in common with
the community.69 Here, it was not shown by NPC how the alleged
“tremendous increase” in the value of the remaining portions of the
properties could have been directly caused

_______________

66  Rollo, p. 204.
67  Id., at p. 205.
68  Id.
69  Regalado, Remedial Law Compendium, Vol. I, p. 746.

 
 

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by the construction of the transmission lines.70 If at all, any
appreciation in the value of the properties is caused by the
consequent increase in land value over time and not by the mere
presence of the transmission lines.
 
Imposition of interest
 
Notwithstanding the foregoing, We find the need to modify the
imposition of interest.
The award of interest is imposed in the nature of damages for
delay in payment which, in effect, makes the obligation on the part
of the government one of forbearance to ensure prompt payment of
the value of the land and limit the opportunity loss of the owner.71
Thus, the imposition of interest is justified only in cases where delay
has been sufficiently established.72
In this case, NPC deposited the provisional value of the subject
properties in the amount of Php47,064,400 on May 19, 2006 which
was days before the issuance of a writ of possession. Considering
NPC’s prompt payment, the imposition of interest thereon is
unjustified and should therefore be deleted.
However, interest should be imposed on the award of
consequential damages as it is a component of just compensation. To
emphasize, in order 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

_______________
 70  Rollo, p. 54.
71  Land Bank of the Philippines v. Rivera, 705 Phil. 139; 692 SCRA 148 (2013),
citing Land Bank of the Philippines v. Celada, 515 Phil. 467, 484; 479 SCRA 495,
512 (2006); Land Bank of the Philippines v. Wycoco, 464 Phil. 83, 100; 419 SCRA
67, 80 (2004);  Reyes v. National Housing Authority, 443 Phil. 603; 395 SCRA 494
(2003).
72  Land Bank of the Philippines v. Escandor, 647 Phil. 20, 30; 632 SCRA 504,
516 (2010), citing  Land Bank of the Philippines v. Celada, id.; see also  Apo Fruits
Corporation v. Court of Appeals, 622 Phil. 215, 238; 607 SCRA 200, 240-241 (2009).

 
 

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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.73 Here, when the RTC pegged the amount of
Php47,064,400 for the expropriated 49,173 square meters, the
consequential damages was not yet included. The total just
compensation should therefore be the total of Php47,064,400 and
Php22,227,800. Considering that the amount of Php22,227,800 as
consequential damages was not yet paid, such amount should earn
interest at the rate of 12% per annum from January 23, 2006 until
June 30, 201374 and the interest rate of 6% per annum is imposed
from July 1, 2013 until fully paid.75
 
 

_______________

 
73  B.H. Berkenkotter & Co. v. Court of Appeals, 290-A Phil. 371; 216 SCRA 584
(1992).
74  CB Circular No. 905 which took effect on December 22, 1982, particularly
Section 2 thereof states:
               Sec.  2.  The rate of interest for the loan or forbearance of any money,
goods or credits and the rate allowed in judgments, in the absence of express contract
as to such rate of interest, shall continue to be twelve percent (12%) per annum.
75  In line with the recent circular of the Monetary Board of the Bangko Sentral ng
Pilipinas (BSP-MB) No. 799, Series of 2013, effective July 1, 2013, the pertinent
portion of which reads:
                   The Monetary Board, in its Resolution No. 796 dated 16 May 2013,
approved the following revisions governing the rate of interest in the absence of
stipulation in loan contracts, thereby amending Section 2 of Circular No. 905, Series
of 1982:
                        Section  1.  The rate of interest for the loan or forbearance of any
money, goods or credits and the rate allowed in judgments, in the absence of an
express contract as to such rate of interest, shall be six percent (6%) per annum.
                    Section  2.  In view of the above, Subsection X305.1 of the Manual
of Regulations for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual
of Regulations for Non-Bank Financial Institutions are hereby amended accordingly.
 

 
 

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WHEREFORE, the Petition is DENIED. The Decision dated
September 1, 2015 of the Court of Appeals, which affirmed the
Decision dated December 20, 2010 of the Regional Trial Court of
Pili, Camarines Sur, is AFFIRMED with MODIFICATION such
that the interest imposed on the amount of Php47,064,409 is
DELETED and that the award of consequential damages in the
amount of Php22,227,800 shall earn interest at the rate of 12% per
annum from January 23, 2006 until June 30, 2013 and the interest
rate of 6% per annum is imposed from July 1, 2013 until fully paid.
SO ORDERED.

Sereno (CJ., Chairperson), Leonardo-De Castro, Del Castillo

and Caguioa,** JJ., concur.

Petition denied, judgment affirmed with modification.

In an expropriation case, an essential element of due process is

that there must be just compensation whenever private property is to
be taken for public use. (Republic vs. Limbonhai and Sons, 809
SCRA 243 [2016])

——o0o——

_______________

* * Designated additional member per Raffle dated March 29, 2017 vice Associate

Justice Francis H. Jardeleza.

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