Constitutional Law II: Case No.

37

SECOND DIVISION
G.R. No. 166973 February 10, 2009
NATIONAL POWER CORPORATION, Petitioner,
vs.
BENJAMIN ONG CO, Respondent.
TINGA, J.:

TOPIC: Definition of EMINENT DOMAIN in this case - "is the inherent power of a sovereign
state to appropriate private property to particular use to promote public welfare." In the
exercise of its power of eminent domain, just compensation must be given to the property
owner to satisfy the requirements of Sec. 9, Art. III of the Constitution. Just compensation is
the fair market value of the property. Fair market value is that "sum of money which a
person desirous but not compelled to buy, and an owner willing but not compelled to sell,
would agree on as a price to be given and received therefor." Judicial determination is
needed to arrive at the exact amount due to the property owner.

I. FACTS:
On 27 June 2001, petitioner NAPOCOR (whose charter is vested with the power of eminent
domain) filed a complaint with the RTC of San Fernando, Pampanga, for the acquisition of an
easement of right-of-way over three (3) lots belonging to respondent, in connection with
the construction of its transmission lines.

On 25 March 2002, NAPOCOR obtained a writ of possession and on 15 April 2002 it took
possession of the property.

At the pre-trial conference, respondent Co conceded the necessity of expropriation. Thus,

the sole issue for litigation revolved around the determination of just compensation.

Under Sec. 3A of R.A. No. 6395 (law creating NAPOCOR), only an easement fee equivalent
to 10% of the market value shall be paid to affected property owners, computed from the
date of the taking of the property or the filing of the complaint, whichever came first.
NAPOCOR is willing to pay the said 10%.

However, the enactment of R.A. No. 8974 which took effect before the filing of the
expropriation complaint entitled "An Act To Facilitate The Acquisition Of Right-Of-Way, Site
Or Location For National Government Infrastructure Projects And For Other Purposes"
requires the payment to the respondent the full market value of the property.

The RTC rendered its Partial Decision, wherein it declared that the property must be paid in
full market value in accordance with R.A. No. 8974, with computation of the payment/just
compensation from the date of the actual possession of the property.

Not satisfied, petitioner filed an appeal with the Court of Appeals but the latter affirmed the
decision of the RTC. Hence, this petition which seeks the reversal of the Decision of the CA.

II. ISSUES:
1. WON the petitioner is liable to pay the full fair market value instead of only paying the
10% easement fee?
 Constitutional Law II: Case No. 37

2. WON the computation of the just compensation should start from the date of actual
taking of the property on 15 April 2002?

III. HELD:
1. YES the petitioner is liable to pay the full fair market value. R.A. No. 8974 superseded R.A.
No. 6395 (law creating NAPOCOR) which requires only the payment of 10% easement fee,
hence, the payment of full market value of expropriated properties to be used for
government infrastructure is required.

2. NO. Computation of just compensation should start from the date of filing of complaint
for acquisition of easement for right-of-way (June 27, 2001) and not from the date when the
NAPOCOR took possession of the property (April 15, 2002) due to the simple reason that the
filing of complaint came first.

Note that the two laws R.A. No. 6395 and R.A. No. 8974 must be harmonized with each
other. RA No. 8974, a newer law, shall govern as to the amount of just compensation while
RA No. 6935 (there being no superseding provision from R.A. No. 8974 as to the beginning
of the computation for just compensation) shall govern the date when the computation
must commence – from the date of taking possession or date of filing of complaint,
whichever comes first; in the instant case, the filing came first (June 27, 2001).

The determination of "just compensation" in eminent domain cases is a judicial function.

The executive department or legislature may make the initial determinations but when a
party claims a violation of the guarantee in the Bill of Rights that private property may not
be taken for public use without just compensation, no statute, decree, or executive order
can mandate its own determination shall prevail over the court's findings. Much less can the
courts be precluded from looking into the "just-ness" of the decreed compensation.

Thus, the lower court must use the standards set forth in R.A. No. 8974 to arrive at the
amount of just compensation.

WHEREFORE the petition is partially GRANTED. The Decision of the Court of Appeals is
AFFIRMED insofar as it ordered petitioner to pay the full amount of the fair market value of
the property involved as just compensation and is REVERSED insofar as it directed that such
compensation be computed as of the date of taking instead of earlier which is the date of
filing of the complaint.