National Power Corporation vs. Diato-Bernal

A commissioners' report that is not based on documentary evidence is hearsay and must be disregarded in determining just compensation. Just compensation must be determined as of the time of the filing of the expropriation complaint, and a provincial appraisal committee resolution serves merely as a factor in the judicial evaluation of just compensation, not a substitute for the commissioners' report.

NAPOCOR, exercising its power of eminent domain under Republic Act No. 6395, filed an expropriation suit on January 8, 1997, to acquire an easement of right of way over respondent's 946 sq m property in Imus, Cavite, for its "Dasmariñas-Zapote 230 KV Transmission Line Project." The parties executed a partial compromise agreement settling the location and size of the pole site but left the determination of just compensation for trial.

• The Expropriation Suit: On January 8, 1997, NAPOCOR filed an expropriation suit against respondent to acquire an easement of right of way for its transmission line project. NAPOCOR alleged public purpose, failure of negotiation, and willingness to deposit the assessed value of the property for taxation purposes at ₱853.72. Respondent moved to dismiss, claiming the expropriation was improper and valuing her property at ₱20,000.00 and ₱18,000.00 per sq m for the front and rear portions, respectively.
• Partial Compromise Agreement: On September 25, 1998, the parties submitted a partial compromise agreement, approved by the RTC, fixing the location and size of Pole Site No. DZ-70 at 29.25 square meters on respondent's lot. The case proceeded to trial solely on the issue of just compensation.
• Commissioners' Report: The RTC appointed three commissioners who, on September 14, 1999, recommended a just compensation of ₱10,000.00 per sq m. The report based its valuation on the property's location, neighborhood description, and market data, claiming land values in the area ranged from ₱10,000.00 to ₱15,000.00 per sq m for residential lots and ₱10,000.00 to ₱20,000.00 per sq m for commercial lots.
• Lower Court Valuation: NAPOCOR opposed the report, arguing it was hearsay for lacking documentary evidence and that valuation should be based on the PAC-Cavite resolution pegging the value at ₱3,500.00 per sq m. The RTC adopted the commissioners' valuation by judicial notice of increasing land values in Cavite. The CA affirmed the RTC judgment.

• Hearsay Commissioners' Report: Petitioner argued that the commissioners' report was unsubstantiated by official documents or registered deeds of sale of neighboring lots, rendering it hearsay under Rep. of the Phil. v. Santos.
• PAC-Cavite Resolution: Petitioner maintained that just compensation should be pegged at ₱3,500.00 per sq m based on the 1995 resolution enacted by the Provincial Appraisal Committee of Cavite.
• Discrepancy in Valuation Timeline: Petitioner argued the CA failed to explain the nearly 200% increase in property value from ₱3,500.00 per sq m in 1995 to ₱10,000.00 per sq m at the time of the filing of the complaint in 1997.

• Procedural Impropriety: Respondent countered that the petition raises purely factual questions which are beyond the province of a Petition for Review on Certiorari under Rule 45 of the Rules of Court.

• Nature of the Issue: Whether the petition raises a question of law rather than a question of fact.
• Evidentiary Weight of Commissioners' Report: Whether a commissioners' report lacking documentary evidence may serve as the basis for fixing just compensation.
• Determinative Value of PAC Resolution: Whether the resolution of the Provincial Appraisal Committee should prevail over the commissioners' report.
• Point of Valuation: Whether just compensation should be pegged as of the date of the commissioners' report or the filing of the expropriation complaint.

• Nature of the Issue: A question of law was found to exist because the issue concerns the correct application of law and jurisprudence—specifically, whether the PAC resolution should prevail over the commissioners' report—rather than the recalibration of evidence.
• Evidentiary Weight of Commissioners' Report: The commissioners' report was deemed speculative and hearsay. Market values of neighboring lots were mere estimates unsupported by corroborative documents such as sworn declarations of realtors, tax declarations, or zonal valuations. The report also failed to append the alleged market sales data and price listings.
• Determinative Value of PAC Resolution: The PAC resolution cannot be substituted for the commissioners' report because the determination of just compensation is a judicial function. The resolution serves merely as one of the factors in the judicial evaluation of just compensation.
• Point of Valuation: Just compensation must be ascertained as of the time of the taking, which coincides with the commencement of the expropriation proceedings. The RTC erroneously adopted a valuation pegged as of September 10, 1999, more than two years after the complaint was filed on January 8, 1997.

• Question of Law vs. Question of Fact — A question of law exists when the doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts, or when the issue does not call for an examination of the probative value of the evidence. A question of fact exists when the doubt arises as to the truth or falsehood of facts or when the query invites calibration of the whole evidence. Applied to classify the issue of whether the PAC resolution should prevail over the commissioners' report as a question of law.
• Hearsay Commissioners' Report — A commissioners' report of land prices which is not based on any documentary evidence is manifestly hearsay and should be disregarded by the court. Applied to strike down the ₱10,000.00 per sq m valuation for lacking corroborative documents and unappended market data.
• Time of Taking for Just Compensation — 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, just compensation is determined as of the time of the filing of the complaint. Applied to reject the 1999 valuation date in favor of the 1997 filing date.
• Judicial Determination of Just Compensation — The determination of just compensation is a judicial function. A provincial appraisal committee resolution cannot be substituted for the report of court-appointed commissioners. Applied to hold that the PAC-Cavite resolution is merely a factor in judicial evaluation, not a controlling substitute.

• "A commissioners’ report of land prices which is not based on any documentary evidence is manifestly hearsay and should be disregarded by the court."
• "Just compensation is defined 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 intensify the meaning of the word 'compensation' and to convey thereby the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, and ample."

• Rep. of the Phil. v. Santos, 225 Phil. 29 (1986) — Followed as controlling precedent for the rule that a commissioners' report lacking documentary evidence is hearsay and should be disregarded.
• Santos v. Committee on Claims Settlement, G.R. No. 158071, April 2, 2009, 583 SCRA 152 — Followed to delineate the distinction between a question of law and a question of fact.
• National Power Corporation v. Dela Cruz, G.R. No. 156093, February 2, 2007, 514 SCRA 56 — Followed regarding the necessity of elaborating on how community facilities enhance property value.
• B.H. Berkenkotter & Co. v. Court of Appeals, G.R. No. 89980, December 14, 1992, 216 SCRA 584 — Followed for the rule that just compensation is ascertained as of the time of the filing of the complaint.
• Republic v. Libunao, G.R. No. 166553, July 30, 2009, 594 SCRA 363 — Followed for the definition of just compensation and the doctrine that PAC resolutions are merely factors, not substitutes, for judicial determination.

• Rule 45, Rules of Court — Governs the Petition for Review on Certiorari, limiting review to questions of law. Applied to determine the procedural propriety of the petition.
• Section 3(h), Republic Act No. 6395 — Authorizes NAPOCOR to exercise the power of eminent domain. Cited as the statutory basis for the expropriation suit.

Antonio T. Carpio, Diosdado M. Peralta, Roberto A. Abad, Jose Catral Mendoza