Name of Student: ISRAEL S.

GARCIA (Constitutional Law 2, Section B)

CASE DIGEST (POWER OF IMMINENT DOMAIN)

1. FACTS:

1.1 Entry to the Property. In February 1993, NAPOCOR entered a property owned by the
heirs of Saturnino Q. Borbon located in Batangas City, to construct and maintain
transmission lines for a Power Transmission Project. The property has a total area of
14,257 square meters, and registered under Transfer Certificate of Title No. T-9696 of the
Registry of Deeds of Batangas.

1.2 Expropriation Complaint. On May 26, 1995, NAPOCOR filed an expropriation complaint
in the Regional Trial Court in Batangas City (RTC) seeking easement of right of way over
a portion of the property involving an area of 6,326 square meters, more or less and
requested writ of possession to commence construction. NAPOCOR claimed that they had
failed to reach any agreement with the heirs, and that it was willing to deposit ₱9,790.00
representing the assessed value of the portion sought to be expropriated.

1.3 Respondents’ Defense. The respondents argued that NAPOCOR entered the property
in 1993 without their consent and in the process, destroying some fruit trees without
payment, installed transmission line posts that passed through the center of the land and
rendered the entire property inutile for any future use and capabilities and that their
property was classified as industrial land. The respondents sought the dismissal of the
complaint, the payment of just compensation of ₱1,000.00/square meter, and attorney’s
fees.

1.4 Commissioners’ Report. The RTC constituted three commissioners. The two
commissioners (government officials) submitted a joint report indicating that the property
was reclassified from agricultural to industrial in 1994 and appraised the property at
₱550.00/square meter, while the third commissioner (private lawyer of the defendant)
recommended the payment of "an easement fee of at least ten percent (10%) of the
assessed value indicated in the tax declaration plus cost of damages in the course of the
construction, improvements affected and tower occupancy fee.

1.5 RTC Decision. The RTC adopted the joint report, ruling that just compensation be based
on the property’s value at the time of taking when it was already reclassified as industrial,
in this case it was resolved to be in May 05 1995, the date of filing of the case, as there
was no evidence as to when the plaintiff actually entered the property in question.
NAPOCOR was ordered to pay P550.00 per square meter for the entire 14,257 square
meters, plus legal interest from May 5, 1995, until full payment, and the costs of suit.

1.6 Court of Appeals Decision. The Court of Appeals (CA) AFFIRMED the RTC decision
with the MODIFICATION that plaintiff-appellant shall pay only for the occupied 6,326
square meters of the subject real property at the rate of ₱550.00 per square meter and to
pay legal interest therefrom until fully paid.

1.7 Motion to Discontinue Expropriation. During the pendency of the appeal, NAPOCOR
filed a Manifestation and Motion to Discontinue Expropriation Proceedings, informing that
the parties failed to reach an amicable agreement; that the public purpose of the property
sought to be expropriated had ceased because of the intervening retirement of the
transmission lines installed on the respondents’ property. It sought to return the property
to the respondents and pay just compensation for the period of possession.
2. ISSUES:

Whether or not the expropriation proceedings should be discontinued or dismissed pending

3. RULING:

YES, the expropriation proceedings should be discontinued or dismissed even with the pending
appeal.

Legal Basis: The law provides that the fundamental basis then of all actions brought for the
expropriation of the lands, under the power of imminent domain, is public use, notwithstanding
the requirement to pay just compensation to the private owner. That being true, the very moment
that it appears at any stage of the proceedings that the expropriation is not for a public use, the
action must necessarily fail and should be dismissed.

In this case, the essential element of public use was not maintained by NAPOCOR in its motion
to discontinue the proceedings with contention that the expropriation has become without basis
for the public purpose for which such property would be used thereby ceased to exist as a result
of the retirement of the transmission lines. Hence, the Supreme Court dismissed the expropriation
proceedings and requires the return of the property to the respondents.

The Supreme Court also ruled that NAPOCOR should compensate the respondents for the
disturbance of their property rights from the time of entry in March 1993 until the time of
restoration of the possession by paying to them actual or other compensatory damages,
converting the case into an action for damages.

4. RATIONALE:

The law provides that exercise of the Government’s power of imminent domain or power of
expropriation has mandatory requisites, namely, (1) that it is for a particular public purpose; and
(2) that just compensation be paid to the property owner.

If the public purpose for which the property was taken is abandoned or ceased to exist, the
expropriation proceeding shall be aborted, the property must be returned to the owner and the
expropriator shall compensate the owner for the disturbance of property rights and any
consequential damages by the reason of expropriation.

The reckoning point for compensation is the time of actual taking, not the filing of the expropriation
complaint. In this case, the taking occurred in March 1993 when NAPOCOR entered the property
without the consent of the heirs. The discontinuance of the expropriation proceedings converts
to proceedings into an action for damages.