Tinio v. NPC (G.R. No. 160923; Jan. 24, 2011)

CASE DIGEST: MOISES TINIO, JR. and FRANCIS TINIO, petitioners, vs. NATIONAL POWER CORPORATION, respondent. Consolidated with NPC v. Tinio (G.R. No. 161093; January 24, 2011). Tinio v. NPC (G.R. No. 160923; January 24, 2011).

FACTS: The National Power Corporation (NPC) is a government-owned and controlled corporation created and existing by virtue of Republic Act No. 6395, as amended by Presidential Decree No. 938. The main purpose of the NPC, as stated in its charter, is to undertake the development of hydroelectric generation of power and the production of electricity from nuclear, geothermal and other sources, as well as the transmission of electric power on a nationwide basis. In order to accomplish its objectives, the NPC is granted the power, among others, to exercise the right of eminent domain.

The NPC filed a complaint for eminent domain with the RTC of Urdaneta against the Tinios for the purpose of expropriating the said land in order to construct and maintain its San Roque Multi-Purpose Project. However, prior to filing its complaint, it took possession of the subject land by virtue of a Permit to Enter signed by Moises Tinio. During the pre-trial conference the only issue left for determination was the just compensation to be paid to the Tinios.

Appointed Commissioners were then appointed to appraise the value. The Court ordered the NPC to pay the Tinios 12,850,400.00 plus legal interest until fully paid. NPC filed a motion for reconsideration but the RTC denied it. The CA modified the RTC's decision and changed the just compensation to P2,343,900 with legal interest of 6 percent per annum.

The Tinios argue that the CA erred in arriving at a lower amount of just compensation than that arrived at by the RTC on the ground that before the NPC made improvements on the subject property, the same was already classified as industrial or commercial land.The Tinios claim that in 1997, the NPC declared its properties inBarangaySan Roque, San Manuel, Pangasinan, as commercial lands with a value ofP250.00 per square meter. They aver that the subject lot is within the vicinity of the NPC properties. As such, any increase in the value of the NPC properties should also redound to the benefit of the lands which are located within the same locality.

ISSUE: Did the CA err in its determination of just compensation as based on its findings on the time of taking of the subject property and the nature and character of the subject property at the time of such taking?

HELD: A perusal of the disputed decision of the CA would clearly show that the appellate court's determination of just compensation is based on its finding that 12,710 square meters of the subject property was considered residential and that the remaining 40,000 square meter portion thereof was classified as agricultural land at the time of taking of the said lot. This finding is based on a certification dated March 10, 1998 issued by the Municipal Assessor of San Manuel, Pangasinan, attesting to the fact that the disputed property was indeed partly residential and largely agricultural prior to its possession by the NPC.

It is settled that the nature and character of the land at the time of its taking is the principal criterion for determining how much just compensation should be given to the landowner.

Hence, the argument of the Tinios that the subject property should benefit from the subsequent classification of its adjoining properties as industrial lands is, likewise, untenable. The Court, in a number of cases, has enunciated the principle that it would be injustice on the part of the expropriator where the owner would be given undue incremental advantages arising from the use to which the government devotes the property expropriated.

Stated differently, to allow the Tinios to ask compensation on the basis of the subsequent classification of the contested lot as industrial would be to allow them to recover more than the value of the land at the time when it was taken, which is the true measure of the damages or just compensation.