Romonafe vs. National Power Corporation

Just compensation in expropriation proceedings must be determined as of the date of the filing of the complaint (or the date of taking, whichever comes first), not as of the date of the commissioners' valuation or the trial court decision; consequently, a compromise agreement fixing compensation based on a valuation date subsequent to the filing of the complaint is void as contrary to law and public policy when disadvantageous to the government.

The National Power Corporation, a government-owned and controlled corporation, initiated expropriation proceedings to acquire parcels of land in Barangay San Agustin, Dasmariñas, Cavite for public purpose. The proceedings gave rise to disputes regarding the proper valuation date for determining just compensation, the validity of compromise agreements entered into during the pendency of appeals, and the authority of government counsel to bind the corporation in such agreements.

• NPC filed a complaint for eminent domain on July 12, 1995 covering 48,103.12 square meters belonging to Romonafe and 96,963.38 square meters belonging to Vine, all located in Barangay San Agustin, Dasmariñas, Cavite.
• The RTC issued a writ of possession on January 26, 1996, pursuant to which NPC took physical possession of the properties on February 12, 1996.
• The trial court designated commissioners on December 3, 1996 to determine just compensation.
• The commissioners submitted their first valuation report on February 18, 1997 recommending P3,500 per square meter for Romonafe's property based on the "prevailing market value at the time of the appraisal" (1997).
• NPC filed an opposition citing Provincial Appraisal Committee (PAC) Resolution No. 08-95 dated October 25, 1995, which assessed Romonafe's property at P1,500 per square meter and Vine's property at P2,000 per square meter.
• The commissioners submitted a second report on July 11, 1997 assessing Vine's property at P3,500 per square meter as of June 1, 1997.
• Romonafe filed a reply citing PAC Resolution No. 07-97 dated June 9, 1997, which amended Resolution No. 08-95 and assessed Romonafe's property at P3,500 per square meter after reconsideration.
• The RTC rendered judgment on September 5, 1997 ordering NPC to pay P3,500 per square meter for both properties plus 6% legal interest from the time of possession until full payment.
• During the pendency of NPC's appeal to the Court of Appeals, NPC and Romonafe executed a Compromise Agreement on June 8, 1998 whereby NPC agreed to pay P3,500 per square meter and Romonafe agreed to sell an additional 27,293.88 square meters and grant a discount of P4,092,810.40.
• The Office of the Solicitor General (OSG) filed a Comment questioning the Romonafe compromise as contrary to decisional law and a Supplemental Comment alleging that the NPC lawyers lacked authority to sign the agreement.
• The Court of Appeals dismissed the appeal on January 19, 1999 on the ground that NPC lawyers had no authority to appear before the appellate court without the Solicitor General.
• During the pendency of the Supreme Court case (G.R. No. 137785), the OSG submitted a Partial Compromise Agreement between NPC and Vine dated June 9, 1999, reducing the value to P3,400 per square meter, granting a 20% discount on interest, and including an additional area of 5,499.62 square meters.
• The Supreme Court rendered decision on September 4, 2000 invalidating the signatures of NPC lawyers in the Romonafe compromise and remanding the case to the Court of Appeals.
• The Court of Appeals rendered decision on November 10, 2004 nullifying the Romonafe compromise and fixing the value at P1,500 per square meter but remained silent on the Vine compromise and the Partial Compromise Agreement.

• The Court of Appeals committed grave error in nullifying and declaring void the Compromise Agreement between NPC and Romonafe.
• The Court of Appeals committed grave error in refusing to render a decision on all issues presented by the Solicitor General on appeal, which includes a determination of the Compromise Agreement between NPC and Vine Development Corporation.
• The Court of Appeals committed grave abuse of discretion in refusing to reconsider its resolution, which refusal amounts to a condonation of the undue discrimination and partiality of the Solicitor General in favor of Vine Development Corporation.

• Just compensation should be determined as of July 12, 1995 (the time of the filing of the complaint), not the 1997 valuation used in the compromise agreement, citing B.H. Berkenkotter & Co. v. Court of Appeals.
• The appellate court failed to pass on NPC's appeal with respect to Vine's property and failed to consider the Partial Compromise Agreement between NPC and Vine submitted during the pendency of G.R. No. 137785.
• The 1995 PAC Resolution No. 08-95 correctly assessed Romonafe's property at P1,500 per square meter, while Resolution No. 07-97 (1997) was issued almost two years after the filing of the complaint and after the commissioners' valuation, making it improper to use the 1997 value.
• The delay in Romonafe's seeking reconsideration of Resolution No. 08-95 (filed June 9, 1997, almost 20 months after the October 25, 1995 resolution) indicates that the 1995 valuation was correct and the 1997 valuation merely reflected market appreciation.

• Procedural Issues:
  • Whether the Court of Appeals erred in refusing to render a decision on the Partial Compromise Agreement between NPC and Vine Development Corporation and the appeal regarding Vine's property.
  • Whether the Court of Appeals committed grave abuse of discretion in refusing to reconsider its decision allegedly showing partiality toward Vine Development Corporation.
• Substantive Issues:
  • Whether the Court of Appeals correctly nullified the Compromise Agreement between NPC and Romonafe Corporation.
  • Whether the determination of just compensation should be based on the 1995 valuation (P1,500 per square meter) or the 1997 valuation (P3,500 per square meter).

• Procedural:
  • The Court of Appeals committed error in failing to pass on NPC's appeal with respect to Vine Development Corporation's property and the Partial Compromise Agreement between NPC and Vine; the case is remanded to the appellate court for resolution of these pending matters.
• Substantive:
  • The Compromise Agreement between NPC and Romonafe is null and void as it fixed just compensation based on the 1997 valuation (P3,500 per square meter) rather than the value at the time of filing of the complaint on July 12, 1995.
  • Just compensation is determined as of the date of the taking of the property or the filing of the complaint, whichever comes first; in this case, July 12, 1995.
  • The 1995 PAC Resolution No. 08-95 assessing Romonafe's property at P1,500 per square meter is the correct basis, not Resolution No. 07-97 (1997) which was issued almost two years after the filing and after the commissioners' valuation.
  • The appellate court correctly fixed the fair market value of Romonafe's property at P1,500 per square meter as of the date of the filing of the complaint.

• Determination of Just Compensation in Eminent Domain — Just compensation must be determined as of the date of the taking of the property or the filing of the complaint, whichever comes first, based on the value of the property at that time, not on subsequent appreciation in value during the pendency of proceedings.
• Void Compromise Agreements Contrary to Law — A compromise agreement fixing just compensation based on a valuation date later than the filing of the complaint is void as contrary to law and public policy when it results in disadvantage to the government and contravenes the principle that just compensation should not be determined by events occurring after the taking.
• Authority of Government Counsel — Lawyers of government-owned and controlled corporations require specific authority from the Office of the Solicitor General to enter into compromise agreements and to appear in appellate courts; unauthorized compromises are invalid.

• "Just compensation is to be determined as of the date of the taking of the property or the filing of the complaint whichever comes first."
• "The Compromise Agreement dated 08 June 1998 [between National Power Corporation and Romonafe] is also decreed NULL and VOID for being disadvantageous to the Government, thus, against public policy."

• B.H. Berkenkotter & Co. v. Court of Appeals — Controlling precedent establishing that just compensation in expropriation proceedings must be ascertained at the time of the filing of the complaint.
• Bank of the Philippine Islands v. Court of Appeals — Cited for the rule that just compensation is determined as of the date of taking or filing of complaint, whichever comes first.
• National Power Corporation v. Vine Development Corporation (G.R. No. 137785) — Prior decision in the same case invalidating the signatures of NPC lawyers in the Romonafe compromise agreement for lack of authority and remanding the case to the Court of Appeals.

• Rule 67, Section 4 of the Rules of Court — Provides that just compensation shall be determined as of the date of the taking of the property or the filing of the complaint, whichever comes first.
• Section 35(1), Chapter 12, Title III, Book IV of the Administrative Code — Cited regarding the authority of special attorneys of the Solicitor General being limited to cases before lower courts (RTCs and MTCs) unless specifically authorized to appear before appellate courts.