Heirs of Raisa Dimao vs. National Grid Corporation of the Philippines

The Court held that just compensation is not due to a subsequent titleholder who acquires ownership of land after the State has already appropriated the property for public use, particularly when the title is derived from a free patent subject to a statutory right-of-way easement. The governing principle is that just compensation compensates the owner’s loss at the time of taking; where the taking predates the issuance of title and the property is encumbered by a statutory easement limiting compensation to improvements only, the subsequent owner cannot claim damages for the land’s value.

In 1978, the National Power Corporation constructed the Baloi-Agus 2 138kV Transmission Line over a parcel of land in Baloi, Lanao del Norte. The land remained unregistered until October 2, 2012, when Raisa Dimao obtained a free patent and corresponding title. Following the passage of Republic Act No. 9511, the National Grid Corporation of the Philippines assumed management of the transmission network in 2009 and required clearance of vegetation within the right-of-way corridor. In 2014, the respondent initiated expropriation proceedings to secure legal authority over the affected area, deposited the zonal value with the Land Bank, and obtained a writ of possession. The dispute centered on the entitlement to and computation of just compensation for the right-of-way traversing the titled lot.

• In 1978, the National Power Corporation constructed the Baloi-Agus 2 138kV Transmission Line over a 30-meter wide corridor traversing a parcel of land in Barangay Basagad, Baloi, Lanao del Norte. The land remained part of the public domain until October 2, 2012, when Raisa Dimao, petitioners’ predecessor-in-interest, secured a free patent and corresponding title over the 48,470-square-meter lot.
• Pursuant to Republic Act No. 9511, the National Grid Corporation of the Philippines assumed operation of the transmission system in 2009 and required clearance of hazardous vegetation within the right-of-way. On August 15, 2014, respondent filed expropriation proceedings for 11,640 square meters of the titled property, deposited P1,756,400.00 representing 100% of the BIR zonal value, and secured a writ of possession on September 2, 2014.
• Petitioners filed an answer demanding P113,552,000.00 as just compensation. The RTC appointed commissioners to assess the property’s value. On April 16, 2018, the RTC confirmed respondent’s right to expropriate and ordered payment of P49,622,050.00. The CA affirmed the expropriation but deleted the compensation award, reasoning that the taking occurred in 1978, the property was subject to a statutory easement, and petitioners failed to prove the existence or value of improvements at the time of construction.
• The commissioner’s report indicated that most trees and improvements were planted compactly within the right-of-way corridor only four to nine years prior to the 2014 complaint, suggesting intentional cultivation to inflate compensation claims.

• Petitioners maintained that Section 112 of Commonwealth Act No. 141 applies exclusively to government entities and cannot be invoked against quasi-public corporations like the respondent.
• Petitioners argued that Section 112 is unconstitutional and confiscatory for permitting the taking of private property without just compensation, and that it was impliedly repealed by Republic Act Nos. 8974 and 10752.
• Petitioners contended that the taking occurred upon the filing of the expropriation complaint in 2014, not in 1978, because the National Power Corporation’s original entry was unauthorized and petitioners’ predecessors retained beneficial enjoyment of the property.
• Petitioners asserted continuous possession since 1955, evidenced by the issuance of the free patent, and demanded compensation based on the respondent’s own valuation of improvements amounting to P62,822,899.00.

• Respondent countered that Section 112 of C.A. No. 141 expressly covers quasi-public entities and applies to all lands granted under free patents, limiting compensation to improvements only.
• Respondent argued that the validity of Section 112 cannot be collaterally attacked and that no implied repeal occurred under subsequent right-of-way statutes.
• Respondent maintained that the taking was consummated in 1978 during the construction of the transmission lines, a fact petitioners implicitly acknowledged by claiming interest and rentals from that year.
• Respondent asserted that petitioners’ predecessors lacked proof of ownership or possession prior to 1978, and that the dense planting of crops beneath the transmission lines constituted a malicious attempt to manufacture compensable improvements.

• Procedural Issues: Whether the constitutionality and applicability of Section 112 of C.A. No. 141 may be collaterally attacked in an expropriation proceeding, and whether Republic Act Nos. 8974 and 10752 impliedly repealed said provision.
• Substantive Issues: Whether petitioners are entitled to just compensation for the expropriated right-of-way, and if so, what constitutes the proper reckoning point for its computation.

• Procedural: The Court ruled that collateral attacks on the constitutionality of Section 112 of C.A. No. 141 are impermissible, as the provision enjoys a presumption of validity absent a direct proceeding for annulment. The Court further held that Republic Act Nos. 8974 and 10752 did not impliedly repeal Section 112, noting that repeals by implication are disfavored and that Section 4 of R.A. No. 10752 expressly harmonizes with the Public Land Act by recognizing distinct acquisition modes for patent lands.
• Substantive: The Court ruled that petitioners are not entitled to just compensation because the taking occurred in 1978 when the State retained ownership of the land. Since petitioners’ predecessor acquired title via a free patent only in 2012, the property remained subject to a 60-meter statutory easement under Section 112 of C.A. No. 141, which restricts compensation to improvements only. Petitioners failed to present evidence of pre-1978 improvements and acquired the land with full knowledge of the existing transmission lines, thereby suffering no actual deprivation of beneficial enjoyment. Consequently, the initial P1,756,400.00 deposit was unduly received and must be returned under the principle of solutio indebiti.

• Requisites of Taking — Jurisprudence establishes five elements for a compensable taking: (1) the expropriator must enter a private property; (2) the entry must be for more than a momentary period; (3) the entry must be under warrant or color of legal authority; (4) the property must be devoted to a public use or informally appropriated; and (5) the utilization must oust the owner and deprive him of all beneficial enjoyment. The Court applied these requisites to conclude that the physical construction of the transmission lines in 1978 satisfied all elements, thereby fixing the date of taking decades before petitioners acquired title.
• Solutio Indebiti — Enshrined in Article 2154 of the Civil Code, this doctrine imposes an obligation to return anything received without right or by mistake. The Court invoked this principle to mandate the return of the P1,756,400.00 deposit, holding that respondent paid the amount under the mistaken belief that petitioners held valid ownership at the time of taking and were legally entitled to compensation.
• Effect of Free Patent Application — The filing of a homestead or free patent application constitutes a formal admission that the subject land is part of the public domain. The Court relied on this doctrine to reject petitioners’ claim of ownership or compensable possession dating back to 1955, emphasizing that mere possession does not automatically divest public land of its character.

• "The true measure is not the taker's gain but the owner's loss." — The Court invoked this principle to emphasize that just compensation requires actual deprivation of property rights. Because petitioners acquired title only after the transmission lines were permanently installed, they sustained no compensable loss from the 1978 taking.
• "There is a 'taking' in this sense when the expropriator enters private property not only for a momentary period but for a more permanent duration, for the purpose of devoting the property to a public use in such a manner as to oust the owner and deprive him of all beneficial enjoyment thereof." — Cited to establish that the installation of high-voltage lines constitutes a permanent appropriation, fixing the reckoning point at the date of construction rather than the filing of the expropriation suit.

• Republic v. Vda. De Castellvi — Cited as controlling precedent for the five requisites of a compensable taking, which the Court applied to determine that the 1978 construction satisfied all elements of expropriation.
• National Transmission Corp. v. Oroville Development Corp. — Followed to establish that the date of taking in transmission line cases coincides with the physical construction of the infrastructure, not the subsequent filing of eminent domain proceedings.
• Yabut v. Alcantara — Relied upon to support the ruling that a free patent application constitutes an admission that the land is public, thereby negating claims of prior compensable ownership.
• Republic v. Heirs of Borbon — Applied to affirm that when an expropriating agency takes possession prior to filing suit, just compensation is reckoned from the actual date of taking, not the filing date.

• Section 112, Commonwealth Act No. 141 (Public Land Act) — Provides for a 60-meter right-of-way easement for government and quasi-public infrastructure on patent lands, limiting compensation to improvements only. The Court applied this provision to bar petitioners from claiming land value.
• Section 4, Republic Act No. 9511 — Grants the respondent the franchise and delegated power of eminent domain necessary for the operation and maintenance of the national transmission grid.
• Section 4, Republic Act No. 10752 — Governs modes of acquiring real property for national infrastructure. The Court cited this to demonstrate legislative intent to harmonize with, rather than repeal, Section 112 of C.A. No. 141.
• Article 2154, Civil Code — Codifies the principle of solutio indebiti, serving as the legal basis for ordering petitioners to return the erroneously deposited compensation amount.