NGCP v. Gaite

The determination of just compensation is a judicial function that must be based on reliable and actual data, and a trial court errs when it fully adopts a commissioner's report that lacks factual or legal basis over a joint commissioners' report grounded on actual sales data and ocular inspections of comparable nearby properties. Dismissal of an appeal for failure to file an appellant's brief is discretionary, not mandatory, and may be relaxed in the interest of substantial justice where strong equitable considerations justify an exception.

National Grid Corporation of the Philippines (NGCP) is the entity tasked with constructing and maintaining the Abaga-Kirahon 230 kV Transmission Line Project. To build and maintain the project, NGCP needed to acquire, upon payment of just compensation, the agricultural properties owned by Getulia A. Gaite and the Heirs of Trinidad Gaite (respondents) located in Iligan City. The dispute arose from the divergent valuations recommended by the appointed commissioners and the RTC's adoption of the higher, but less substantiated, recommendation.

On April 15, 2010, NGCP filed a Complaint for Eminent Domain against respondents before the RTC of Iligan City, Branch 3, to acquire their property for the construction and maintenance of the Abaga-Kirahon 230 kV Transmission Line Project. The subject property consisted of two parcels: Lot No. 3366-A, d. 292 (6,246.26 sqm.) owned by Getulia Gaite, and Lot No. 5261-A, Cad. 292 (1,726.766 sqm.) owned by the Heirs of Trinidad Gaite. On August 24, 2010, NGCP filed an Urgent Ex-Parte Motion for Issuance of Writ of Possession, attaching a Landbank Certification showing it had paid P186,063.42, equivalent to 100% of the BIR zonal value, in compliance with Section 2, Rule 67 of the Rules of Court. The RTC issued the Writ of Possession on July 8, 2011, placing NGCP in actual possession of the subject property.

Sometime in September 2012, the RTC appointed a Board of Commissioners composed of Engr. Gil R. Balondo (City Development Planning Officer of Iligan City), Ma. Rodora Elena A. Gimena (City Assessor of Iligan City), and Atty. Raymundo C. Capistrano (a licensed real estate broker residing in Iligan City) to recommend the fair market value of the subject property. All three commissioners submitted and signed a Joint Commissioner's Report recommending P60.00 per sqm. as fair market value. The joint report was based on several factors: a Committee on Appraisal Resolution valuing a 12.2275-hectare agricultural lot at P47.23 per sqm.; two deeds of absolute sale executed in February 2009 between private sellers and the City Government of Iligan for agricultural lots at P47.30 per sqm.; the 2005 BIR zonal valuation of agricultural land at P70,000.00 per hectare; and a deed of absolute sale involving 300 sqm. of residential land at P133.33 per sqm. dated August 31, 2010.

On March 17, 2014, however, one commissioner — Atty. Capistrano — submitted a separate commissioner's report recommending P300.00 per sqm. as the fair market value, yielding a total of P2,391,910.80 for both lots. Atty. Capistrano justified the increase primarily on the ground that, pursuant to City Ordinance No. 3097, Resolution No. 900, and Resolution No. 00-1423, the land where the subject property is situated had been reclassified from open zone to "agri-industrial." He also cited a 2009 DPWH acquisition of a parcel of land from a certain Macapaar Panandigan at P250.00 per sqm. Notably, Atty. Capistrano himself acknowledged in his report that, according to the chairman of the City Development Office of Iligan City, the reclassification ordinance had not been approved by the Housing and Land Use Regulatory Board and had not yet been implemented.

On August 5, 2014, the RTC rendered its Decision fully adopting Atty. Capistrano's separate commissioner's report, fixing just compensation at P300.00 per sqm. (total P2,391,910.80, less the initial deposit of P186,063.42), with 6% per annum legal interest from the date of actual taking on May 16, 2011 until fully paid. NGCP's Motion for Reconsideration was denied by the RTC on June 17, 2015. NGCP then filed a Notice of Appeal on September 21, 2015, but the CA dismissed the appeal on October 27, 2016 for failure to file an Appellant's Brief. NGCP's Motion for Reconsideration with attached Appellant's Brief was denied by the CA on May 11, 2017. NGCP thereafter filed the instant Petition for Review on Certiorari before the Supreme Court.

• Relaxation of Procedural Rules: NGCP argued that its case warrants the relaxation of procedural rules because it was in good faith and did not deliberately intend to delay the proceedings and resolution of the case, and that the CA erred in not exercising its discretion in favor of substantial justice by admitting its Appellant's Brief.
• Lack of Factual or Legal Basis for P300.00/sqm Valuation: NGCP maintained that Atty. Capistrano's separate commissioner's report, which the RTC fully adopted, is bereft of any factual or legal basis. It argued that the joint commissioner's report, submitted and signed by all three commissioners, is more credible because the fair market valuation therein is based on ocular inspections and actual sales data — specifically, deeds of sale executed in favor of the Iligan City Government valuing similar agricultural properties at P47.30 per sqm.
• Unfair and Unreasonable RTC Valuation: NGCP contended that the RTC decision fixing just compensation at P300.00 per sqm. is grossly unfair and unreasonable, and that if not reviewed or reversed, injustice would triumph against what is right and legal, sacrificing substantial justice in favor of technicalities.

• No Error by the CA: Respondents alleged that the CA did not commit any error when it dismissed NGCP's appeal.

• Discretionary Dismissal of Appeal: Whether the Court of Appeals erred in not reviewing on the merits the appeal of the petitioner, considering that the RTC decision fixing just compensation at P300.00 per sqm. is grossly unfair and unreasonable.
• Admission of Appellant's Brief: Whether the Court of Appeals erred in not exercising its discretion, in favor of substantial justice, by admitting the petitioner's Appellant's Brief, taking into consideration that petitioner in good faith filed the necessary explanations for failing to file the brief within the reglementary period.

• Discretionary Dismissal of Appeal: Yes. The CA erred in outrightly dismissing the appeal without exercising its sound discretion, because the dismissal of an appeal for failure to file an appellant's brief is discretionary, not mandatory, under Section 1, Rule 50 of the Rules of Court. The circumstances warranted relaxation of procedural rules in the interest of substantial justice.
• Admission of Appellant's Brief: Yes. The CA should have admitted the Appellant's Brief, as the guidelines in Beatingo vs. Bu Gasis require consideration of whether strong equitable considerations justify an exception to the procedural rule, and here, no material injury was suffered by respondents by the delay and the interest of substantial justice required review of the grossly unsubstantiated P300.00 per sqm. valuation.

• Discretionary Dismissal of Appeal: Section 1(e) of Rule 50 of the Rules of Court provides that failure of the appellant to file the required brief within the time provided is a ground for dismissal of an appeal. However, the word "may" is used in the provision, which implies that dismissal is not mandatory but only discretionary. The failure to file an appellant's brief within the reglementary period does not automatically result in the outright dismissal of the appeal; the CA is bound to exercise its sound discretion whether to allow the appeal to proceed, with due regard to justice and fair play. In Beatingo vs. Bu Gasis, the Court enumerated guidelines for determining whether a case should be dismissed for failure to file an appellant's brief, including: (1) the general rule is for the CA to dismiss; (2) the power is discretionary and directory, not ministerial; (3) failure does not cause automatic dismissal; (4) in case of late filing, the appellate court may still allow the appeal if the circumstances warrant liberality, strong considerations of equity justify an exception, no material injury has been suffered by the appellee, there is no contention that the appellee's cause was prejudiced, and at least there is no motion to dismiss filed; (5) any delay must be for a reasonable period; and (6) inadvertence of counsel is not an adequate excuse except where reckless or gross negligence deprives the client of due process, where application of the rule will result in outright deprivation of liberty or property, or where the interests of justice so require. In this case, the Court found sufficient reason to relax procedural rules in the interest of substantial justice, given the grossly unsubstantiated valuation adopted by the RTC.

• Admission of Appellant's Brief: The determination of just compensation is a judicial function, usually aided by the appointment of commissioners. While the trial court may disregard the commissioners' findings and substitute its own estimate, it may only do so for valid reasons — where commissioners applied illegal principles, disregarded a clear preponderance of evidence, or where the amount allowed is grossly inadequate or excessive. Here, three commissioners submitted and signed a joint report recommending P60.00 per sqm., but the RTC disregarded it and adopted Atty. Capistrano's separate report recommending P300.00 per sqm. The separate report had no factual or legal basis: the city ordinances cited had not been approved or implemented; City Ordinance No. 3097 did not specifically reclassify the subject property as agri-industrial but merely reclassified the "open zone" of entire barangays; NGCP presented tax declarations and a BIR certification showing the property was agricultural; the DPWH sale cited by Atty. Capistrano involved land nowhere near the subject property per the vicinity map; and the deeds of sale relied upon in the joint report clearly involved lots located near and similarly situated to the subject property. Just compensation must be based on reliable and actual data, as the word "just" conveys that the equivalent rendered must be real, substantial, full, and ample. The joint commissioners' report was more credible because it was based on actual ocular inspections and records of recent sales of similar properties situated close to the subject property. Rather than remand for further reception of evidence — which would unnecessarily delay payment and increase interest — the Court adopted the joint report's recommendation of P60.00 per sqm.

• Discretionary Dismissal of Appeal — Under Section 1, Rule 50 of the Rules of Court, the failure of an appellant to file the required brief within the reglementary period is a ground for dismissal of an appeal, but such dismissal is discretionary, not mandatory. The use of the word "may" in the rule signifies that the CA is bound to exercise sound discretion whether to allow the appeal to proceed, with due regard to justice and fair play. The Court applied this doctrine by reversing the CA's outright dismissal and holding that the circumstances warranted relaxation in the interest of substantial justice.

• Beatingo Guidelines on Non-Filing of Appellant's Brief — The Court enumerated six guidelines: (1) the general rule is for the CA to dismiss; (2) the power is discretionary and directory, not ministerial or mandatory; (3) failure does not cause automatic dismissal; (4) in case of late filing, the appellate court may still allow the appeal if (a) circumstances warrant liberality, (b) strong considerations of equity justify an exception, (c) no material injury has been suffered by the appellee, (d) no contention that the appellee's cause was prejudiced, and (e) at least no motion to dismiss was filed; (5) any delay must be for a reasonable period; and (6) inadvertence of counsel is not an adequate excuse except where reckless or gross negligence deprives the client of due process, where application of the rule results in outright deprivation of liberty or property, or where the interests of justice so require.

• Judicial Function of Determining Just Compensation — The determination of just compensation is a judicial prerogative, though aided by the appointment of commissioners. The appointment of commissioners is a mandatory requirement in expropriation cases. While the trial court may disregard the commissioners' findings and substitute its own estimate, it may only do so for valid reasons: where commissioners applied illegal principles, disregarded a clear preponderance of evidence, or where the amount allowed is grossly inadequate or excessive. Trial with the aid of commissioners is a substantial right that may not be done away with capriciously.

• Reliable and Actual Data Requirement for Just Compensation — Just compensation is the full and fair equivalent of the property taken, measured not by the taker's gain but the owner's loss. The "just"-ness of compensation can only be attained by using reliable and actual data as bases in fixing the value of the condemned property. Trial courts are required to be more circumspect in evaluating just compensation, considering that eminent domain cases involve the expenditure of public funds.

• Interest on Just Compensation as Forbearance — The just compensation due to landowners amounts to an effective forbearance on the part of the State, a proper subject of interest computed from the time the property was taken until full payment, to compensate for the income-generating potential lost and to eliminate the issue of the constant fluctuation and inflation of currency value over time. The applicable rate is 12% per annum from the date of taking until June 30, 2013, and 6% per annum from July 1, 2013 until full satisfaction, pursuant to BSP-Monetary Board Circular No. 799, Series of 2013. An additional 6% per annum legal interest on the total monetary award runs from the finality of the decision until full payment.

• "The word 'may' is used in Section 1 of Rule 50 which implies that the dismissal of the appeal due to the grounds stated therein is not mandatory but only discretionary. This means that the failure to file appellant's brief within the reglementary period would not automatically result in the outright dismissal of the appeal as the CA is bound to exercise its sound discretion whether to allow the appeal to proceed or not." — This passage articulates the ratio decidendi on the discretionary nature of appeal dismissal, distinguishing mandatory from directory application of Rule 50.

• "Such 'just'-ness of the compensation can only be attained by using reliable and actual data as bases in fixing the value of the condemned property. Trial courts are required to be more circumspect in its evaluation of just compensation due the property owner, considering that eminent domain cases involve the expenditure of public funds." — This passage defines the standard for evaluating just compensation and the heightened circumspection required of trial courts in expropriation cases.

• "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." — This passage provides the canonical formulation of just compensation, frequently cited in eminent domain jurisprudence.

• "the just compensation due to the landowners amounts to an effective forbearance on the part of the State-a proper subject of interest computed from the time the property was taken until the full amount of just compensation is paid-in order to eradicate the issue of the constant variability of the value of the currency over time." — This passage establishes the rationale for awarding interest on just compensation, characterizing the State's obligation as a forbearance of money.

• Liao Sen Ho vs. Philippine Savings Bank, G.R. No. 219810, May 12, 2021 — Followed. Cited for the proposition that dismissal of an appeal for failure to file an appellant's brief is discretionary, not mandatory, under Section 1, Rule 50 of the Rules of Court.
• Beatingo vs. Bu Gasis, 657 Phil. 552 (2011) — Followed. Cited for the enumerated guidelines on whether to sustain the dismissal of an appeal due to non-filing of an appellant's brief, including the six-part framework and the exceptions for inadvertence of counsel.
• Spouses Ortega vs. City of Cebu, 617 Phil. 817 (2009) — Followed. Cited for the doctrine that the ascertainment of just compensation is a judicial prerogative aided by the mandatory appointment of commissioners, and that trial courts may disregard commissioners' findings only for valid reasons.
• Republic of the Philippines vs. Asia Pacific Integrated Steel Corp., 729 Phil. 402 (2014) — Followed. Cited for the principle that just compensation must be based on reliable and actual data, and that trial courts must be circumspect in evaluating just compensation because eminent domain cases involve the expenditure of public funds.
• Secretary of the Department of Public Works and Highways vs. Spouses Tecson, 758 Phil. 604 (2015) — Followed. Cited for the doctrine that interest on just compensation is due because the government's obligation constitutes an effective forbearance, warranting 12% per annum interest.
• Republic vs. Estate of Posadas III, G.R. No. 214310, February 24, 2020 — Followed. Cited for the proposition that interest on just compensation constitutes a forbearance of money, with 12% per annum from the date of taking until June 30, 2013, and 6% per annum thereafter pursuant to BSP Circular No. 799.
• National Power Corporation vs. Manalastas, 779 Phil. 510 (2016) — Followed. Cited through Estate of Posadas III for the rule that interest accrues on just compensation from the time of taking to the time of actual payment, to place the owner in as good a position as before the taking.

• Section 1(e), Rule 50, Rules of Court — Provides that failure of the appellant to serve and file the required number of copies of his brief within the time provided by the Rules is a ground for dismissal of an appeal. Applied to hold that dismissal is discretionary, not mandatory, the word "may" signifying directory rather than ministerial application.
• Section 2, Rule 67, Rules of Court — Governing the issuance of a writ of possession in expropriation cases upon deposit of an amount equivalent to 100% of the BIR zonal value. NGCP complied by depositing P186,063.42, entitling it to possession as a matter of right.
• Bangko Sentral ng Pilipinas — Monetary Board Circular No. 799, Series of 2013 — Reduced the legal interest rate from 12% to 6% per annum effective July 1, 2013. Applied to fix the interest rate on just compensation at 12% per annum from May 16, 2011 to June 30, 2013, and 6% per annum from July 1, 2013 until full satisfaction.

Caguioa, Inting, Dimaampao, and Singh, JJ., concurred.