National Power Corporation vs. Spouses Asoque

A perpetual right-of-way easement for transmission lines that indefinitely deprives the owner of ordinary use and beneficial enjoyment is a taking under eminent domain compensable at full market value, and determination of just compensation is an exclusive judicial prerogative that legislation cannot curtail.

Spouses Margarito and Tarcinia Asoque are the registered owners of a 59,099-square-meter coconut land in Barangay Bugtong, Calbayog City covered by Original Certificate of Title No. 2376. The National Power Corporation is a government corporation vested with the power of eminent domain under Republic Act No. 6395, as amended by Presidential Decree No. 938. Section 3-A of its Charter purports to limit compensation for a right-of-way easement to 10% of market value where the principal purpose of the land is not impaired.

Spouses Margarito and Tarcinia Asoque owned a 59,099-square-meter coconut land in Barangay Bugtong, Calbayog City covered by Original Certificate of Title No. 2376. Sometime in November 1995, the National Power Corporation entered the land to install transmission lines for its 350 KV Leyte-Luzon HVDC Power Transmission Line Project and utilized 4,352 square meters for the project. According to Spouses Asoque, they were made beforehand to understand that NPC would pay the value of the portion used and all improvements destroyed.

During construction NPC cut coconut trees and other fruit- and non-fruit-bearing plants, and thereafter prohibited Spouses Asoque from introducing on the 4,352-square-meter area any improvement that could rise by a few meters from the ground. Upon demand for just compensation, NPC paid only for improvements destroyed and refused to pay the actual value of the area utilized, claiming liability only for right of way at 10% of market value under Section 3-A of Republic Act No. 6395, as amended. Because no payment for the land followed, Spouses Asoque filed on September 20, 1999 a Complaint for payment of just compensation and damages docketed as Civil Case No. 737 before the RTC of Calbayog City, Branch 31. In its Answer dated February 7, 2000, NPC denied illegal utilization, alleging entry with consent as shown by an acknowledgment receipt for P9,897.00 as payment for damaged improvements and a waiver of claims to improvements damaged, such that no expropriation proceeding was needed.

When the case was called for pre-trial on May 8, 2000, the RTC ordered it dismissed for non-appearance of both parties and counsel, but reinstated it after Spouses Asoque's counsel explained his late arrival and reset pre-trial to May 24, 2000. On May 24, 2000, noting the absence of NPC and its counsel, the RTC allowed Spouses Asoque to present evidence ex parte before RTC-appointed Commissioner Atty. Ferdinand S. Arpon, Branch Clerk of Court, and dismissed NPC's counterclaim. The RTC denied NPC's Urgent Manifestation and Motion to Reset Pre-trial on June 6, 2000 as filed out of time and moot, and denied reconsideration on June 21, 2000. On June 22, July 24 and August 28, 2000 Spouses Asoque presented evidence ex parte before the Commissioner, filed Formal Offer of Documentary Exhibits on September 6, 2000 over NPC's Comment/Objection filed October 13, 2000, and the Commissioner submitted his Report dated July 19, 2001 on July 20, 2001 recommending P800.00 per square meter and adoption of the Provincial Agriculturist schedule for trees and crops. After Comment/Opposition filed August 21, 2001, Rejoinder September 20, 2001, and memoranda filed February 5, 2002 and April 1, 2002, the case was submitted for decision.

The RTC found the Commissioner's P800.00 per square meter valuation reasonable and fairly based on evidence, citing comparative values in Western Samar and three 1997 expropriation cases in Catbalogan where NPC was adjudged to pay P2,000.00 to P2,200.00 per square meter, plus factors considered by the Commissioner. The CA affirmed the ex parte procedure and adoption of the report as comprehensive and supported by evidence, rejected the 10% easement-fee defense as an invasion of judicial function, and deleted only the P158,369.00 improvements award after finding Spouses Asoque already paid P17,133.50 per disbursement vouchers without competent proof of additional actual damages.

• Due Process: Petitioner argued that it was denied reasonable opportunity to be heard because only very short notice was given for the May 24, 2000 pre-trial, with its Cebu-based lawyers receiving the May 8, 2000 Order by registered mail only on May 22, 2000 while both lawyers were out of town on official business, and the RTC refused reconsideration despite explanation in the Urgent Manifestation and Motion to Reset and Motion for Reconsideration.
• Authority of Commissioner: Petitioner argued that appointment of the Branch Clerk of Court as Commissioner and his appraisal were defective and ultra vires because Rule 18, Section 2(f) merely allows assistance in defining issues, the May 8, 2000 Order only designated a commissioner to receive evidence, and no oath was shown to have been taken.
• Easement Fee Only: Petitioner argued that it acquired only a right-of-way easement and is liable only under Section 3-A of its Charter for 10% of fair market value based on Tax Declaration No. 96-03023-00104 valuation of P3.31 per square meter.
• Valuation: Petitioner argued that the P800.00 per square meter valuation was unreliable because the three 1997 Catbalogan RTC expropriation cases involved lands in other barangays without proof of finality, and the City Assessor's tax declaration valuation should prevail over a clerk without appraisal expertise required under Rule 67, Section 5.

• Due Process: Respondents argued that ex parte presentation was justified because petitioner and counsel failed to appear on May 24, 2000 and the motion to postpone dated May 24, 2000 was filed late on May 25, 2000, and due process was satisfied since petitioner was afforded fair opportunity to defend, move for reconsideration, and object to evidence and the report.
• Appointment of Commissioner: Respondents argued that appointment of the Branch Clerk of Court as Commissioner was proper and sanctioned by the Rules, his preliminary determination was merely recommendatory and did not invalidate ex parte proceedings, and final determination of just compensation rests with the RTC judge.
• Judicial Determination of Taking: Respondents argued that Section 3-A of Republic Act No. 6395 cannot defeat the RTC's determination, determination of just compensation is a judicial function, and acquisition of right-of-way easement is a taking under eminent domain entitling the owner to the monetary equivalent of the property.

• Due Process: Whether petitioner was deprived of due process when respondents were allowed to present evidence ex parte after petitioner's failure to appear at pre-trial.
• Commissioner Authority: Whether the appraisal was valid or the RTC-appointed Commissioner exceeded authority in appraising the property and recommending just compensation valuation.
• Nature of Taking: Whether petitioner should pay only a simple easement fee under Section 3-A of Republic Act No. 6395 or full just compensation for the land traversed by transmission lines.
• Amount of Just Compensation: Whether the RTC erred in fixing just compensation at P800.00 per square meter or P3,481,600.00 for the 4,352-square-meter portion.

• Due Process: No. Ex parte presentation was expressly allowed under Rule 18, Section 5 after defendant's failure to appear, and petitioner had reasonable opportunity but missed both pre-trials without valid cause.
• Commissioner Authority: No. Designation of the Branch Clerk of Court to receive and report evidence with recommendatory valuation is sanctioned by Rule 32, and Rule 67 commissioners were waived because NPC filed no expropriation case.
• Nature of Taking: Full compensation is due. The indefinite right-of-way easement that restricts use, bars improvements, and exposes life and limb to danger is a taking under eminent domain, and its value is for the SC's judiciary to fix despite Section 3-A.
• Amount of Just Compensation: No error. The P800.00 per square meter valuation, affirmed by the CA, is a factual finding supported by evidence on accessibility, services, valuation trends, and comparable sales inquiry, and is beyond Rule 45 review.

• Due Process: Rule 18, Section 4 makes appearance of parties and counsel at pre-trial mandatory, excusable only for valid cause or fully authorized representative, while Section 5 allows plaintiff to present evidence ex parte if defendant fails to appear. The SC held petitioner defaulted twice: it missed May 8, 2000 despite a motion for postponement that is never presumed granted, then missed May 24, 2000 and filed the postponement motion only on May 25, 2000, out of time, without sending any representative though notice was received May 22, 2000. Postponement is discretionary absent grave abuse, parties are presumed to know governing rules, and due process as reasonable opportunity to be heard was satisfied because petitioner moved for reconsideration, objected to exhibits and the Commissioner's report, and participated before judgment, following Air Philippines Corporation vs. International Business Aviation Services Philippines, Inc.
• Commissioner Authority: Rule 32, Sections 2, 3 and 9 sanction reference to a Commissioner to receive and report evidence only, regulate proceedings, rule on admissibility unless limited, and file a written report with findings of fact and conclusions of law when powers are not specified or limited. The CA correctly observed the valuations were merely recommendatory and final determination remained with the RTC, so absent express limitation Branch Clerk of Court Atty. Ferdinand S. Arpon could make factual findings and recommendations. Moreover, the case was inverse condemnation for recovery of just compensation and damages initiated by owners, not expropriation by NPC, so under Republic of the Philippines vs. Court of Appeals and National Power Corporation vs. Court of Appeals and Antonino Pobre, NPC's failure to file under Rule 67 waived Rule 67, Section 5 procedure including three commissioners, and trial before commissioners was dispensable.
• Nature of Taking: Eminent domain may impose only a burden without loss of title under Republic vs. PLDT, but taking exists when (1) expropriator enters private property, (2) entry is indefinite or permanent, (3) with color of legal authority, (4) property devoted to public use, and (5) owner removed from all beneficial enjoyment, per Republic vs. Vda. de Castellvi. A right-of-way becomes a taking when there is material impairment, prevention of ordinary uses for an indefinite period, or direct subtraction from full enjoyment, as in Republic vs. Andaya, National Power Corporation vs. Heirs of Sangkay, National Power Corporation vs. Spouses Gutierrez, National Power Corporation vs. Judge Paderanga, and National Power Corporation vs. Tiangco. Here the 4,352 sqm is perpetually burdened by high-tension lines, barred from improvements rising a few meters, and rendered dangerous, with NPC paying once while owners continually pay taxes, so full market value is due and Section 3-A's 10% cap cannot curtail the judicial prerogative under Export Processing Zone Authority vs. Dulay.
• Amount of Just Compensation: Factual valuation is generally beyond Rule 45 review and undisturbed unless grounded on speculation, which the SC did not find. Just compensation is the fair and full equivalent of loss or market value at taking, considering condition, surroundings, improvements, capabilities, acquisition cost, current value of like properties, actual or potential uses, size, shape, location, and tax declarations, with Section 5 of Republic Act No. 8974 merely recommendatory. The Commissioner found no Bugtong or adjacent Tinaplacan and Caglanipao Sur transfers from January 1998 to December 2000, rejected Exhibits F and G as distant and differently classified, noted the tax declaration as very low per City Assessor personnel, and considered accessibility, basic services, Calbayog trend of P600.00 to P3,000.00 per sqm, and interviews that adjacent owners would not sell below P500.00 per sqm. The RTC independently found P800.00 reasonable alongside 1997 Catbalogan awards of P2,000.00 to P2,200.00, and the SC found no showing it was grossly exorbitant.

• Just compensation as judicial function — Determination of just compensation in eminent domain is an exclusive judicial prerogative; the executive or legislature may make initial determinations but no statute can mandate that its determination prevail over the SC's findings on just-ness. Applied to strike down NPC's reliance on Section 3-A's 10% easement cap.
• Taking under eminent domain — Taking exists when (1) the expropriator enters private property, (2) entry is indefinite or permanent, (3) under color of legal authority, (4) property is devoted to public use, and (5) use for public purpose removes all beneficial enjoyment. Applied to hold the indefinite transmission-line easement a compensable taking.
• Right-of-way easement as expropriation — An easement that perpetually or indefinitely deprives the owner of proprietary rights through restrictions inconsistent with ownership, or introduces structures creating danger to life and property, requires payment of monetary equivalent of the land. Applied because NPC barred improvements above a few meters and high-tension current endangered occupants while owners kept paying taxes.
• Inverse condemnation procedure — When the state takes without filing expropriation under Rule 67, the owner may file inverse condemnation for just compensation, governed by appointment of commissioners under Rule 32, not Rule 67 Sections 5, 6, 7 or 8. Applied to sustain a single Branch Clerk of Court as Commissioner.
• Waiver of Rule 67 procedure — A government agency that violates procedural requirements by taking without filing expropriation waives usual Rule 67 procedure including three commissioners. Applied because NPC never filed expropriation and claimed none was needed.
• Due process as opportunity to be heard — Procedural due process is satisfied by reasonable opportunity to be heard through arguments or pleadings and to present one's side, not by guaranteed favorable action on postponement. Applied where NPC missed two pre-trials yet filed reconsideration and objections before judgment.
• Mandatory pre-trial and ex parte evidence — Appearance at pre-trial is mandatory under Rule 18, Section 4, and if defendant fails to appear the plaintiff may present evidence ex parte for judgment on that basis under Section 5. Applied to validate the May 24, 2000 ex parte order.
• Just compensation valuation standards — Just compensation is fair market value at taking considering classification and use, developmental costs, declared value, current selling price of similar lands, disturbance compensation, size, shape, location, tax declaration, zonal valuation, and ocular and documentary evidence, with Republic Act No. 8974 Section 5 standards merely recommendatory. Applied to affirm P800.00 per sqm based on accessibility, services, trends, and interviews.

• "The determination of "just compensation" in eminent domain cases is a judicial function." — States the controlling rule that voids NPC's invocation of the 10% statutory easement formula.
• "The essence of due process is to be found in the reasonable opportunity to be heard and submit any evidence one may have in support of one's defense." — Defines the due process test applied to reject NPC's claim after two pre-trial absences yet full opportunity to object and seek reconsideration.
• "Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why the said power may not be availed of to impose only a burden upon the owner of condemned property, without loss of title and possession." — Establishes that a right-of-way easement can be exercised through eminent domain and thus require compensation.
• "We have held that the usual procedure in the determination of just compensation is waived when the government itself initially violates procedural requirements" — Justifies dispensing with Rule 67 three-commissioner procedure when NPC took without filing expropriation.

• Export Processing Zone Authority vs. Dulay, 233 Phil. 313 (1987) — Controlling precedent that just compensation is a judicial function no statute can preclude.
• Republic vs. PLDT, 136 Phil. 20 (1969) — Followed for the rule that eminent domain may impose only a burden or easement without taking title.
• Republic vs. Vda. de Castellvi, 157 Phil. 329 (1974) — Source of the five elements of taking applied to find compensable taking.
• Republic of the Philippines vs. Court of Appeals, 494 Phil. 494 (2005) — Followed to hold NIA/NPC waived Rule 67 by taking without filing expropriation, making trial before commissioners unnecessary.
• Air Philippines Corporation vs. International Business Aviation Services Philippines, Inc., 481 Phil. 366 (2004) — Analogous precedent affirming ex parte evidence and judgment after repeated pre-trial defaults as no denial of due process.
• National Power Corporation vs. Spouses Gutierrez, 271 Phil. 1 (1991) — Followed to reject easement-fee-only defense and award full market value where transmission lines perpetually deprive proprietary rights.
• National Power Corporation vs. Tiangco, 543 Phil. 637 (2007) — Followed for the rule that indefinite easement with use restrictions and danger requires monetary equivalent of land.
• National Power Corporation vs. Heirs of Sangkay, 671 Phil. 569 (2011) — Followed for the rule that compensable taking includes restriction or diminution without complete dispossession.

• Section 9, Article III, Constitution — Guarantees private property shall not be taken for public use without just compensation; basis for requiring NPC to pay full value for the 4,352 sqm taken for the Leyte-Luzon project.
• Section 3-A, Republic Act No. 6395, as amended by Presidential Decree No. 938 — Limits easement compensation to 10% of market value where principal purpose is unimpaired; invoked by NPC but held not binding on the SC's judicial determination.
• Sections 4 and 5, Rule 18, 1997 Rules of Civil Procedure — Make pre-trial appearance mandatory and allow plaintiff to present evidence ex parte upon defendant's failure to appear; basis for sustaining the May 24, 2000 ex parte order.
• Sections 2, 3 and 9, Rule 32, 1997 Rules of Civil Procedure — Authorize reference to a Commissioner to receive and report evidence and file findings and conclusions when not limited; basis for sustaining the Branch Clerk of Court's recommendatory appraisal.
• Section 5, Republic Act No. 8974 — Lists recommendatory standards for assessing land value such as classification, use, selling price of similar lands, size, shape, location, tax declaration, and zonal valuation; held not mandatory on the RTC.