21 NPC v CA - Soriano By Renie Jay Soriano in 1st yr 2nd Sem CASE DIGEST POOL · Edit Doc · Delete G.R.

No. 113194 March 11, 1996 NATIONAL POWER CORPORATION, petitioner, vs. COURT OF APPEALS and
MACAPANTON MANGONDATO, respondents. Facts: In 1978, National Power Corporation (NAPOCOR),
took possession of a 21, 995 sq.m land, a portion of Lot 1 of the subdivision plan situated in Marawi City,
owned by Mangondato, under the mistaken belief that it forms part of the public land reserved for use
of the NAPOCOR for hydroelectric power purposes under Proclamation No. 1354 of the President of the
Philippines dated Dec. 3, 1974. NAPOCOR alleged that the subject land was until then possessed and
administered by Marawi City so that in exchange for the city‘s waiver and quitclaim of any right over the
property, NAPOCOR had paid the city a ―financial assistance‖ of P40.00 per sq.m. Mangondato claimed
that the subject land is his duly registered private property and that he is not privy to any agreement
between NAPOCOR and Marawi City and that any payment to the city cannot be considered as payment
to him. Later NAPOCOR acceded to the fact that the subject property belongs to Mangondato. CONSTI II
– Atty. Rovynne Jumao-as 1-Manresa-SanchezRoman Team Digest ©2011-2012 Page | 15 On July 13,
1990, NAPOCOR‘s National Power Board (NAPOCOR‘s board) passed Resolution No. 90-225 resolving to
pay Mangondato P100.00 per sq.m for only a 12, 132 sq.m portion of the property plus 12% interest per
annum from 1978. However, said resolution was deferred to allow the NAPOCOR‘s regional legal
counsel to determine whether P100.00 per sq.m is the fair market value. On August 14, 1990,
NAPOCOR‘s board passed Resolution No. 90-316 resolving that Mangondato be paid the base price of
P40.00 per sq.m plus 12% from 1978 pending the determination whether P100.00 per sq.m is the fair
market value. NAPOCOR‘s regional legal counsel‘s findings state that Mandondato‘s property is classified
as industrial which has a fair market value of P300.00 for those along the national highway and on the
basis of recent Supreme Court decisions, NAPOCOR has to pay not less than P300.00 per sq.m.
NAPOCOR‘s board on May 17, 1991 passed Resolution No. 91-247 resolving to pay Mangondato P100.00
per sq.m for the property excluding 12% interest per annum. In a letter dated December 17, 1991 and
February 4, 1992, Mandondato disagreed with Resolution No. 91-247. At the same time, to get partial
payment, he asked that he be paid in the meantime, P100.00 per sq.m without prejudice to pursuing his
claim for the proper and just compensation plus interest thereon. On February 12, 1992, NAPOCOR‘s
general counsel filed a memorandum for its president finding no legal impediment if they, in the
meantime were to pay Mangondato P100.00 per sq.m without prejudice to the final determination of
the proper and just compensation. On March, 1991, the parties executed a Deed of Sale where
NAPOCOR paid Mangondato P100.00 per sq.m excluding interest and without prejudice to
Mandondato‘s pursuance of claims for just compensation and interest. In a letter dated April 20, 1992,
Mangondato asked for the payment of P300.00 per sq.m plus 12% interest per annum from 1978.
However, NAPOCOR‘s board passed Resolution No. 92-121 granting its president the authority to
negotiate for the payment of P100.00 per sq.m for the land plus 12% interest per annum from 1978 less
payments already made. On July 7, 1992, Mangondato filed before the lower court Civil case against
NAPOCOR seeking to recover the possession of the property described in the complaint as Lots 1 and 3
of the subdivision plan, the payment of a monthly rent of P15,000.00 from 1978 until the surrender of
the property, and other related costs. On the other hand, NAPOCOR filed before the lower court a Civil
Case which is a Complaint for eminent domain against Mangondato over the subject property. Upon
agreement of the parties, the two cases were ordered consolidated and appointed Atty. Saipal Alawi
representing the lower court, Atty. Connie Doromal for NAPOCOR and Atty. Alimbsar Ali from City
Assessor‘s Office to ascertain and report to the court the just compensation. On July 28, 1992,
Commissioner Doromal filed his report recommending a fair market value of P300.00 per sq.m as of
November 23, 1978. On August 6, 1992, Commissioners Alawi and Ali filed their joint report
recommending a fair market value of P1000.00 per sq.m as of 1992. After receiving the reports and
comments from the parties, the court denied Mangondato‘s request for recovery of possession of the
property but ordering NAPOCOR to pay monthly rent of P15,000.00 from 1978 up to July 1992 with 12%
interest per annum and condemning the property in favor of NAPOCOR effective July, 1992 upon
payment of P1000.00 per sq.m as a just compensation. Two issued raised by the petitioner: 1) THE
RESPONDENT COURT ERRED IN AFFIRMING THAT THE JUST COMPENSATION FOR THE PROPERTY IS ITS
VALUE IN 1992, WHEN THE COMPLAINT WAS FILED, AND NOT ITS VALUE IN 1978, WHEN THE PROPERTY
WAS TAKEN BY PETITION. 2) THE COURT ERRED IN FIXING THE VALUE OF JUST COMPENSATION AT
P1,000.00 PER SQUARE METER INSTEAD OF P40.00 PER SQUARE METER. Issues: 1) At what point in time
should the value of the land subject of expropriation be computed: at the date of ―taking‖ or the date
of filing of the complaint for eminent domain? Side issue: When is there ―Taking‖ of Property? 2) What
is the fair market value of the property? Rulings: 1) The general rule in determining "just compensation"
in eminent domain is the value of the property as of the date of the filing of complaint, as follows: Sec.
4. Order of Condemnation. When such a motion is overruled or when any party fails to defend as
required by this rule, the court may enter an order of condemnation declaring that the plaintiff has a
lawful right to take the property sought to be condemned, 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 filing of the
complaint… The general rule however, admits of an exception where this Court fixed the value of the
property as of the date it was taken and not at the date of the commencement of the expropriation
proceedings. In Provincial Government of Rizal vs. Caro de Araullo, the Court ruled that ". . . the owners
of the land have no right to recover damages for this unearned increment resulting from the
construction of the public improvement (lengthening of Taft Avenue from Manila to Pasay) for which the
land was taken. To permit them to do so would be to allow them to recover more than the value of the
land at the time when it was taken, which is the true measure of the damages, or just compensation,
and would discourage the construction of important public improvements." Following the above
doctrine, in the case of Municipality of La Carlota vs. The Spouses Felicidad Baltazar and Vicente Gan,
said, ". . . the owner as is the constitutional intent, is paid what he is entitled to according to the value of
the property so devoted to public use as of the date of the taking. From that time, he had been deprived
thereof. He had no choice but to submit. He is not, however, to be despoiled of such a right. No less
than the fundamental law guarantee's just compensation. It would be an injustice to him certainly if
from such a period, he could not recover the value of what was lost. There could be on the other hand,
injustice to the expropriator if by a delay in the collection; the increment in price would accrue to the
owner. The doctrine to which this Court has been committed is intended precisely to avoid either
contingency fraught with unfairness." Simply stated, the exception finds application where the owner
would be given undue incremental advantages arising from the use to which the government devotes
the property expropriated — as for instance, the extension of a main thoroughfare as was the case in
Caro de Araullo. In the instant case, however, it is difficult to conceive of how there could have been an
extra-ordinary increase in the value of the owner's land arising from the expropriation, as indeed the
records do not show any evidence that the valuation of P1,000.00 reached in 1992 was due to
increments directly caused by petitioner's use of the land. Since the petitioner is claiming an exception
to Rule 67, Section 4, 17 it has the burden of proving its claim that its occupancy and use — not ordinary
inflation and increase in land values — was the direct cause of the increase in valuation from 1978 to
1992. Side issue: This Court has defined the elements of ―taking‖ as the main ingredient in the exercise
of power of eminent domain, in the following words: A number of circumstances must be present in the
"taking" of property for purposes of eminent domain: (1) the expropriator must enter a private
property; (2) the entrance into private property must be for more than a momentary period; (3) the
entry into the property should be under warrant or color of legal authority; (4) the property must be
devoted to a public use or otherwise informally appropriated or injuriously affected; and (5) the
utilization of the property for public use must be in such a way to oust the owner and deprive him of all
beneficial enjoyment of the property. In this case, the petitioner‘s entrance in 1978 was without intent
to expropriate or was not made under warrant or color of legal authority, for it believed the property
was public land covered by Proclamation No. 1354. 2) The fair market value as held by the respondent
court is the amount of P1000.00 per sq.m. In an expropriation case where the principal issue is the
determination of just compensation, a trial before the Commissioners is indispensable to allow the
parties to present the evidence on the issue of just compensation. Inasmuch as determination of just
compensation in eminent domain cases is a judicial function and factual findings of the Court of Appeals
are conclusive on the parties and reviewable only when the case falls within the recognized exceptions,
which is not the situation in this petition, we see no reason to disturb the factual findings as to valuation
of the subject property. In sum, we agree with the Court of Appeals that petitioner has failed to show
why it should be granted an exemption from the general rule in determining just compensation
provided under Section 4 of Rule CONSTI II – Atty. Rovynne Jumao-as 1-Manresa-SanchezRoman Team
Digest ©2011-2012 Page | 16 67. On the contrary, private respondent has convinced us that, indeed,
such general rule should in fact be observed in this case. WHEREFORE, the petition is hereby DISMISSED
and the judgment appealed from AFFIRMED, except as to the interest on the monthly rentals. which is
hereby reduced from twelve percent to the legal rate of six percent (6%)per annum. Costs against the
petitioner. SO ORDERED.