NPC v. Ibrahim, et al., - Eminent Domain

G.R. No. 168732, June 29, 2007

The NPC constructed underground tunnels on the property of the respondents without their knowledge and consent and without any expropriation proceeding. It contended that it constructed an easement on the property. Was there taking of the property considering that the owners were deprived of their beneficial use and enjoyment of the same, hence, entitled to just compensation?

Yes. The manner in which the easement was created by the NPC, violated the due process rights of the owners as it was without notice and indemnity to them and did not go through proper expropriation proceedings. NPC could have, at any time, validly exercised the power of eminent domain to acquire the easement over the property as this power encompasses not only the taking or appropriation of title to and possession of the expropriated property but likewise covers even the imposition of a mere burden upon the owner of the condemned property. (Rep. v. PLDT, 136 Phil. 20 (1969)). Significantly, though, landowners cannot be deprived of their right over their land until expropriation proceedings are instituted in court. The court must then see to it that the taking is for pubic use, that there is payment of just compensation and that there is due process of law.

    In disregarding this procedure and failing to recognize the owners’ ownership of the sub-terrain portion, NPC took a risk and exposed itself to greater liability with the passage of time. It must be emphasized that the acquisition of the easement is not without expense. The underground tunnels imposed limitations on the owners’ use of the property for an indefinite period and deprived them of its ordinary use. The owners are clearly entitled to the payment of just compensation. Notwithstanding the fact that NPC only occupied the sub-terrain portion, it is liable to pay not merely an easement fee but rather the full compensation for the land. This is so because, the nature of the easement practically deprived the owners of its normal beneficial use. The owners, as the owners of the property thus expropriated, are entitled to a just compensation which should be neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said property. (NPC v. Ibrahim, et al., G.R. No. 168732, June 29, 2007).

Valuation of the property.

NPC contended that if ever it is liable, it should be made to pay the value of the land from the time it constructed the tunnels. Is the contention correct? Why?

No. To it to use the date it constructed the tunnels as the date of valuation would be grossly unfair. First, it did not enter the land under warrant or color of legal authority or with intent to expropriate the same. It did not notify the owners and wrongly assumed that it had the right to dig the tunnels under their property. Secondly, the improvements introduced in no way contributed to an increase in the value of the land. The valuation should be based at the time of the discovery of the construction of the underground tunnels. (NPC v. Ibrahim, et al., G.R. No. 168732, June 29, 2007).

It is undisputed that there is a legal easement of right-of-way in favor of the Republic. Andaya’s transfer certificates of title contained the reservation that the lands covered thereby are subject to the provisions of the Land Registration Act and the Public Land Act. Section 112 of the Public Land Act provides that land granted by patent shall be subject to a right-of-way not exceeding 60 meters in width for public highways, irrigation ditches, aqueducts, and other similar works of the government or any public enterprise, free of charge, except only for the value of the improvements existing thereon that may be affected. In view of this, the Court of Appeals declared that all Republic needs to do is to enforce such right without having to initiate expropriation proceedings and without having to pay any just compensation. Hence, the Republic may appropriate the 701 square meters necessary for the construction of the floodwalls without paying for it. Is the Republic liable for just compensation if in enforcing the legal easement of right-of-way on a property, the remaining area would be rendered unusable and uninhabitable?

Yes, it is liable to pay consequential damages if in enforcing the legal easement on Andaya’s property, the remaining area would be rendered unusable and uninhabitable. “Taking”, in the exercise of the power of eminent domain, occurs not only when the government actually deprives or dispossess the property owner of his property or of its ordinary use, but also when there is a practical destruction or material impairment of the value of his property. Using this standard, there was undoubtedly a taking of the remaining area of Andaya’s property.  True, no burden was imposed thereon and Andaya still retained title and possession of the property. But, the nature and the effect of the floodwalls would deprive Andaya of the normal use of the remaining areas. It would prevent ingress and egress to the property and turn it into a catch basin for the floodwaters coming from the Agusan River.

    For this reason, Andaya is entitled to payment of just compensation, which must be neither more nor less than the monetary equivalent of the land. One of the basic principles enshrined in our Constitution is that no person shall be deprived of his private property without due process of law; and in expropriation cases, an essential element of due process is that there must be just compensation whenever private property is taken for public use. Noteworthy, Section 9, Article III of our Constitution mandates that private property shall not be taken for public use without just compensation. (Rep. v. Lim, G.R. No. 161656, June 29, 2005, 462 SCRA 265; Rep. v. Andaya, G.R. No. 160656, June 15, 2007).