National Transmission Corporation vs. Heirs of Teodulo Ebesa

Payment of full appellate docket fees within the reglementary period is mandatory and jurisdictional for the perfection of an appeal, and failure to pay—absent a justifiable excuse such as fraud, accident, mistake, or excusable negligence—renders the judgment final and executory. In expropriation cases where the possibility of separate or multiple appeals exists, a record on appeal is likewise a jurisdictional requisite for perfecting an appeal from the judgment on just compensation.

The National Transmission Corporation (NTC) is a government-owned and controlled corporation created under Republic Act No. 9136, which grants it the power of eminent domain. The respondents are the Heirs of Teodulo Ebesa—declared co-owners of Lot No. 18470 in Quiot, Pardo, Cebu City—and Atty. Fortunato Veloso, who occupies the property under an unregistered Deed of Sale. NTC sought to acquire an easement of right-of-way over a 1,479-square-meter portion of the property for the construction and maintenance of a 138KV transmission line as part of the Quiot (Pardo) 100MVA Substation Project.

In early 2005, the National Transmission Corporation (NTC) filed an expropriation case before the Regional Trial Court of Cebu City, Branch 21, to acquire an easement of right-of-way over a 1,479-square-meter portion of Lot No. 18470, situated in Quiot, Pardo, Cebu City. The property, covered by Original Certificate of Title No. 1852, has a total area of 6,014 square meters and is declared under the co-ownership of the Heirs of Teodulo Ebesa—Porferia, Efren, Dante, and Cynthia Ebesa Ramirez—but is occupied by Atty. Fortunato Veloso, who allegedly purchased the property under an unregistered Deed of Sale. NTC alleged that the easement was necessary for the construction and maintenance of the 138KV DC/ST Transmission Line of the Quiot (Pardo) 100MVA Substation Project, a public purpose undertaking.

Veloso, acting as his own counsel in collaboration with Atty. Nilo Ahat, conceded the project's public purpose but disputed its necessity and urgency. He contended that the project would affect not merely a portion but the entirety of the property, as the construction entailed the installation of huge permanent steel towers and the permanent occupation of the airspace above the property with transmission lines. He argued that NTC sought to acquire not merely an easement of right-of-way but a site location for permanent structures, seriously affecting the marketability of the remainder of the property, which was classified as residential.

On April 22, 2005, NTC filed an Urgent Motion for the Issuance of a Writ of Possession, alleging that it had deposited with the Land Bank of the Philippines the amount of ₱11,300.00, representing the assessed value of the subject property, and that it had served a Notice to Take Possession to interested parties. On July 15, 2005, the RTC issued an order of expropriation declaring NTC's lawful right to take the property for the intended public purpose, subject to payment of just compensation based on the property's value at the time of the filing of the complaint. A writ of possession was issued on July 21, 2005, after NTC filed a compliance informing the RTC that it had paid just compensation based on Bureau of Internal Revenue zonal valuation.

The RTC thereafter appointed three commissioners—Alfio Robles, Rodulfo Lafradez, Jr., and Wilfredo Muntuerto—to determine just compensation. On September 22, 2005, the Board of Commissioners submitted a report with a dissenting opinion. The majority, penned by Muntuerto and Lafradez, Jr., recommended a fair market value of ₱6,222.42 per square meter for 2005 and consequential damage equivalent to 70% of the fair market value of the remainder. Robles dissented, opining that the fair market value was ₱3,100.00 per square meter and that no consequential damage was suffered. Both NTC and Veloso submitted oppositions to the report.

On January 9, 2006, the RTC rendered a Decision upholding the majority opinion, fixing just compensation at ₱35,179,984.88, directing NTC to pay legal interest from the time the writ of possession was issued until full payment, and declaring the expropriation valid upon full payment. NTC filed a Motion for Reconsideration on January 24, 2006, which the RTC denied on February 14, 2006. NTC then appealed to the Court of Appeals. On July 31, 2006, the CA directed NTC to submit proof of payment of appeal fees within ten days. On August 18, 2006, NTC filed a Manifestation stating that it could not comply because it had not paid appeal docket fees, asseverating that the RTC receiving clerk refused to accept payment on the ground that NTC, as a GOCC, was exempt. On September 14, 2006, respondents filed a Motion to Dismiss, arguing that the RTC Decision had become final and executory due to non-payment of docket fees, which is mandatory and jurisdictional, and further citing NTC's failure to file a record on appeal as required under Section 2, Rule 41. NTC eventually paid the appeal fees on September 18, 2006—six months after the period to appeal had prescribed—and submitted the official receipts. The RTC, however, denied NTC's belated tender of payment. On January 14, 2009, the CA granted the respondents' motion to dismiss.

• Non-Payment of Docket Fees as Discretionary, Not Automatic Dismissal: Petitioner argued that failure to pay appeal docket fees does not automatically cause dismissal of the appeal but lies within the discretion of the court. It maintained that since its failure was not willful and deliberate, the omission could be excused in the interest of justice and equity, as it was prepared to pay but was misled by the receiving clerk's advice that payment was unnecessary for a GOCC.
• Record on Appeal Not Required: Petitioner contended that Section 1, Rule 50 of the Rules of Court confers only discretionary, not mandatory, power upon the CA to dismiss for failure to file a record on appeal, as indicated by the use of the word "may." It argued that the record on appeal was unnecessary because the first stage of expropriation—the order of condemnation—had already concluded and become final, leaving only the issue of just compensation on appeal.

• Finality of Judgment Due to Non-Payment of Docket Fees: Respondents argued that the RTC Decision dated January 9, 2006 had become final and executory because payment of docket fees is mandatory and jurisdictional, and non-payment does not toll the running of the appeal period.
• Failure to File Record on Appeal: Respondents further pointed out NTC's failure to file a record on appeal as required under Section 2, Rule 41 of the 1997 Rules of Civil Procedure, providing an additional ground for dismissal.

• Payment of Docket Fees: Whether the failure to pay appeal docket fees within the reglementary period, attributed to the receiving clerk's erroneous advice that NTC was exempt as a GOCC, constitutes excusable negligence warranting relaxation of the rule on perfection of appeal.
• Record on Appeal: Whether a record on appeal is required in an expropriation case where only the second phase—the judgment on just compensation—is being appealed, and the first phase—the order of condemnation—has already become final.

• Payment of Docket Fees: No. The payment of appeal docket fees is mandatory and jurisdictional; NTC's failure to pay was not excusable negligence, as its unthinking reliance on the receiving clerk's advice was irresponsible and could have been avoided through the exercise of ordinary diligence.
• Record on Appeal: No. A record on appeal is required in expropriation cases where the possibility of separate or multiple appeals exists, as the Heirs of Ebesa, though they did not file objections to the order of condemnation, retained interests in the property and could file separate appeals from the just compensation award.

• Payment of Docket Fees: The right to appeal is a mere statutory privilege that must be exercised strictly in accordance with the Rules. Three requisites must be satisfied to perfect an appeal: (1) filing of a notice of appeal, (2) payment of docket and other legal fees, and (3) in some cases, filing of a record on appeal—all within the prescribed period. Payment of full docket fees is a sine qua non for perfection of appeal; the court acquires jurisdiction over the case only upon such payment. While the Court has relaxed the rule in certain cases—such as La Salette College vs. Pilotin, Mactan Cebu International Airport Authority vs. Mangubat, and Yambao vs. Court of Appeals—those cases involved justifiable reasons: in Mactan Cebu, the petitioner took the initiative to verify and paid albeit six days late; in Yambao, the petitioner paid within the period but was deficient by ₱20.00 due to the clerk's erroneous assessment. In the present case, NTC did not pay at all, paid only six months after the appeal period prescribed, and solely blamed the receiving clerk's advice despite circumstances that should have prompted second thoughts. NTC received the RTC Decision on January 10, 2006, and the order denying reconsideration on February 17, 2006, giving it until March 6, 2006 to file the notice of appeal and pay the fees. Its counsel filed the notice on February 17, 2006, but did not pay the fees. NTC, as a GOCC maintaining a pool of lawyers experienced in expropriation cases, could easily have confirmed the necessity of paying docket fees. Its omission was inexcusable negligence, not the type of fraud, accident, mistake, or supervening casualty that would justify relaxation of the rule.

• Record on Appeal: Expropriation proceedings have two stages: the first concerns the authority to exercise eminent domain and ends with an order of condemnation; the second concerns the determination of just compensation with the assistance of commissioners. NTC contended that because the first phase had concluded and no appeal was taken therefrom, a record on appeal was unnecessary. This argument was rejected in National Power Corporation vs. Judge Paderanga, where the Court held that even if a defendant did not file an answer, Section 3 of Rule 67 allows that defendant to present evidence on just compensation and to appeal from the trial court's determination. Because multiple or separate appeals are existent in expropriation cases, a record on appeal is required. In the present case, Veloso's co-defendants, the Heirs of Ebesa, did not file objections to the order of condemnation but retained interests in the property—the unregistered sale to Veloso was of unspecified extent, and the Heirs remained the declared owners on title. The probability that they would file a separate appeal was not remote. A record on appeal was therefore required, and NTC's insistence that it was dispensable lacked factual and legal basis.

• Perfection of Appeal — The right to appeal is a mere statutory privilege that must be exercised only in the manner prescribed by law. Three requisites must be satisfied to perfect an appeal: (1) filing of a notice of appeal, (2) payment of docket and other legal fees, and (3) in some cases, filing of a record on appeal, all within the prescribed period. Failure to observe any of these requirements is fatal to the appeal and renders the judgment final and executory.

• Payment of Docket Fees as Mandatory and Jurisdictional — Payment in full of appellate docket fees within the prescribed period is mandatory and jurisdictional. It is an essential requirement without which the decision appealed from becomes final and executory as if no appeal had been filed. Failure to pay or even partial payment does not toll the running of the prescriptive period. The court acquires jurisdiction over the appeal only upon payment of the prescribed docket fees.

• Relaxation of the Docket Fee Rule — Notwithstanding the mandatory nature of the requirement, strict application is qualified by two principles: first, failure to pay within the reglementary period allows only discretionary, not automatic, dismissal; second, such power should be exercised with sound discretion in accordance with justice and fair play, considering all attendant circumstances. Relaxation is warranted only where the appellant shows a justifiable reason for the failure—such as fraud, accident, mistake, excusable negligence, or a similar supervening casualty—without fault on the appellant's part.

• Two Stages of Expropriation — There are two stages in every action of expropriation. The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise, ending with an order of condemnation. The second is concerned with the determination by the court of just compensation, done with the assistance of not more than three commissioners.

• Record on Appeal in Expropriation Cases — A record on appeal is required in expropriation cases because multiple or separate appeals may arise. Even defendants who did not file an answer or object to the order of condemnation may, under Section 3 of Rule 67, present evidence on just compensation and appeal from the trial court's determination thereof. The possibility of separate appeals from the just compensation award necessitates the filing of a record on appeal.

• "The payment of the full amount of the docket fee is a sine qua non requirement for the perfection of an appeal. The court acquires jurisdiction over the case only upon the payment of the prescribed docket fees." — This passage articulates the canonical formulation of the jurisdictional nature of docket fee payment, frequently cited in subsequent jurisprudence on perfection of appeal.

• "Failure to perfect an appeal within the reglementary period is not a mere technicality but jurisdictional and failure to perfect an appeal renders the judgment final and executory." — This formulation distinguishes the jurisdictional character of appeal perfection from mere procedural technicalities, establishing that non-compliance deprives the appellate court of jurisdiction.

• "Multiple or separate appeals being existent in the present expropriation case, NPC should have filed a record on appeal within 30 days from receipt of the trial court's decision." — This passage, quoted from National Power Corporation vs. Judge Paderanga, establishes the rule that a record on appeal is required in expropriation cases due to the possibility of separate appeals from the just compensation determination.

• "While every litigant must be given the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities, the failure to perfect an appeal within the reglementary period is not a mere technicality. It raises jurisdictional problem, as it deprives the appellate court of its jurisdiction over the appeal." — This passage balances the policy of liberal construction with the jurisdictional necessity of timely appeal perfection, underscoring that the winning party's right to enjoy the finality of the decision is correlative to the losing party's right to appeal.

• M.A. Santander Construction, Inc. vs. Villanueva, 484 Phil. 500 (2004) — Cited for the rule that payment of docket fees is mandatory and jurisdictional; the mere filing of a notice of appeal is insufficient without payment of the correct appellate docket fees.

• La Salette College vs. Pilotin, 463 Phil. 785 (2003) — Cited for the doctrine qualifying the strict application of the docket fee rule: failure to pay allows only discretionary dismissal, and the court should exercise sound discretion considering all attendant circumstances.

• Mactan Cebu International Airport Authority vs. Mangubat, 371 Phil. 393 (1999) — Distinguished. In that case, the petitioner took the initiative to verify the necessity of paying docket fees and paid albeit six days late, justifying relaxation. NTC, by contrast, never acted until required by the CA and paid only six months after the appeal period prescribed.

• Yambao vs. Court of Appeals, 399 Phil. 712 (2000) — Distinguished. In that case, the petitioner paid within the appeal period but was deficient by ₱20.00 due to the clerk's erroneous assessment. NTC did not pay at all and solely blamed the receiving clerk's advice.

• National Power Corporation vs. Judge Paderanga, 502 Phil. 722 (2005) — Controlling precedent on the requirement to file a record on appeal in expropriation cases. The Court held that because multiple or separate appeals are existent in expropriation proceedings, a record on appeal must be filed within 30 days from receipt of the trial court's decision.

• Municipality of Bihan vs. Judge Garcia, 259 Phil. 1058 (1989) — Cited for the doctrine on the two stages of expropriation proceedings: the first concerning the authority to exercise eminent domain, and the second concerning the determination of just compensation.

• Gonzales, et al. vs. Pe, 670 Phil. 597 (2011) — Cited for the principle that failure to perfect an appeal within the reglementary period raises a jurisdictional problem, depriving the appellate court of jurisdiction, and that the winning party has a correlative right to enjoy the finality of the decision.

• Section 2, Rule 41, 1997 Rules of Civil Procedure — Requires the filing of a record on appeal in cases where multiple or separate appeals are taken. Applied to hold that NTC was required to file a record on appeal because the possibility of separate appeals from the just compensation award existed in the expropriation case.

• Section 1, Rule 50, 1997 Rules of Civil Procedure — Governs dismissal of appeals by the Court of Appeals, including for failure to file a record on appeal. NTC argued the use of "may" renders dismissal discretionary, but the Court found the requirement jurisdictional given the existence of multiple appeals.

• Section 3, Rule 67, 1997 Rules of Civil Procedure — Provides that even a defendant who has not previously appeared or answered may present evidence as to the amount of compensation and may share in the distribution of the award. Applied to demonstrate that the Heirs of Ebesa, though they did not object to the order of condemnation, could participate in the just compensation trial and appeal therefrom, making a record on appeal necessary.

• Section 2, Rule 67, 1997 Rules of Civil Procedure — Governs the plaintiff's right to retain possession of expropriated property upon payment of just compensation. Referenced in the RTC's dispositive portion directing NTC to either pay the fixed just compensation or return possession to Veloso.

• Section 10, Rule 67, 1997 Rules of Civil Procedure — Provides that the plaintiff's right to retain possession is predicated upon payment of just compensation as fixed in the judgment. Referenced in the RTC Decision.

• Republic Act No. 9136 — The statute creating the National Transmission Corporation as a government-owned and controlled corporation and granting it the authority to exercise the power of eminent domain.

Velasco, Jr. (Chairperson), Peralta, Perez, Reyes, and Jardeleza, JJ., concurred. No separate concurring opinions were written.