TL;DR

In expropriation cases for power transmission lines, the Supreme Court clarified that landowners are entitled to just compensation based on the full market value of the land affected, even if only an easement of right-of-way is sought. This means the compensation should reflect the land’s highest and best use at the time of the expropriation complaint, not its value decades prior when the lines were initially constructed without proper legal process. Landowners are also entitled to consequential damages for portions of their property rendered unusable due to the power lines, ensuring fair compensation for the true impact of expropriation.

Power Lines and Property Rights: Ensuring Just Compensation

The case of National Power Corporation v. Apolonio V. Marasigan et al. revolves around a fundamental question of fairness in the exercise of eminent domain: When the government needs private land for public infrastructure, particularly for easements like power lines, how should ‘just compensation’ be calculated? This case highlights the complexities of valuing property rights when the government seeks not full ownership, but a perpetual easement that significantly restricts land use. At its core, the dispute is about whether landowners should receive the full market value for the land affected by high-power transmission lines, or a lesser amount because the government technically only acquires an easement.

National Power Corporation (NPC) filed an expropriation complaint in 2006 to formalize its easement of right-of-way for transmission lines constructed on the Marasigans’ land in Camarines Sur. NPC argued that just compensation should be based on the land’s agricultural classification and its value in the 1970s when the lines were allegedly first installed. They proposed paying only 10% of the market value, typical for easements, and using outdated agricultural land values. The Marasigans countered that their land had been reclassified as residential, commercial, and industrial since 1993 and demanded full market value based on this current classification at the time of the complaint in 2006. They also sought consequential damages for the areas rendered unusable by the power lines. The Regional Trial Court (RTC) and the Court of Appeals (CA) sided with the Marasigans, prompting NPC to elevate the case to the Supreme Court.

The Supreme Court affirmed the CA’s decision, emphasizing that for high-power transmission lines, the concept of an easement of right-of-way is not a mere partial taking. The Court reasoned that the presence of these lines severely restricts and even eliminates the normal beneficial use of the land beneath and around them. Quoting previous jurisprudence, the Court reiterated that in such cases, the landowner effectively loses the ordinary use of their property. Therefore, just compensation must equate to the full market value of the affected land, not just a percentage. The Court underscored the constitutional principle that just compensation must be ‘just,’ meaning a ‘full and fair equivalent’ of the property, measured by the owner’s loss, not the taker’s gain.

Regarding the valuation date, the Court firmly rejected NPC’s attempt to use 1970s values. It clarified that the reckoning point for just compensation is either the date of taking or the filing of the expropriation complaint, whichever comes first. Since NPC’s complaint was filed in 2006 and they failed to prove a prior ‘taking’ in the 1970s through proper legal channels, the Court ruled that the valuation should be based on the land’s market value in 2006. The Court also upheld the land’s reclassification to residential, commercial, and industrial, as this was legally established by local ordinances years before the expropriation case. The Supreme Court underscored that tax declarations are not the sole determinant of land classification and that courts have the discretion to determine the proper classification for just compensation purposes.

Furthermore, the Supreme Court upheld the award of consequential damages. These damages compensate landowners for losses to the remaining portions of their property due to the expropriation. In this case, the ‘dangling areas’ – the land between transmission lines – were deemed unusable due to safety concerns and noise. The Court agreed with the lower courts and the appraisal committee that these areas suffered a significant decrease in value and warranted consequential damages, calculated at 50% of the BIR zonal value. The Court clarified that consequential benefits, if any, must be directly caused by the expropriation to offset consequential damages, and general community benefits do not qualify.

Finally, the Supreme Court addressed the issue of interest. While it deleted the interest on the principal just compensation amount because NPC had promptly deposited the provisional value, it maintained interest on the consequential damages. The Court clarified that interest serves as damages for delayed payment, ensuring landowners are fully compensated for the time value of their money. Interest was imposed at 12% per annum from the complaint filing in 2006 to June 30, 2013, and then at 6% per annum from July 1, 2013, until full payment, aligning with prevailing legal interest rates.

FAQs

For inquiries regarding the application of this ruling to specific circumstances, please contact Atty. Gabriel Ablola through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: National Power Corporation v. Marasigan, G.R. No. 220367, November 20, 2017