Case Digest: NPC v. Diato-Bernal (G.R. No. 180979, December 15, 2010)

NATIONAL POWER CORPORATION, Petitioner, v. TERESITA DIATO-BERNAL, Respondent. (G.R. No. 180979, December 15, 2010)

FACTS: Respondent Teresita Diato-Bernal is the registered owner of a parcel of land. In order to complete the construction of structures and steel posts for NAPOCORs Dasmaris-Zapote 230 KV Transmission Line Project, it had to acquire an easement of right of way over respondents property. NAPOCOR filed an expropriation suit against respondent, alleging, inter alia, that: the project is for public purpose; NAPOCOR negotiated with respondent for the price of the property, as prescribed by law, but the parties failed to reach an agreement; and NAPOCOR is willing to deposit the amount representing the assessed value of the property for taxation purposes.With the first phase of the expropriation proceedings having been laid to rest by the partial compromise agreement, the RTC proceeded to determine the amount of just compensation. To assist in the evaluation of the fair market value of the subject property, the RTC appointed three (3) commissioners, viz.:(1) the Provincial Assessor of Cavite; (2) the Municipal Assessor of Imus, Cavite, upon recommendation of NAPOCOR; and (3) Soledad Zamora, respondents representative. The commissioners submitted their report to the RTC on September 14, 1999. In the main, they recommended that the just compensation due from NAPOCOR be pegged atP10,000.00 per sq m, based on the property's fair market value.

NAPOCOR filed an Opposition to the Commissioners Valuation Report, asserting that it was not substantiated by any official documents or registered deeds of sale of the subject propertys neighboring lots. The RTC issued an Order adopting the recommendation of the commissioners. On appeal, the CA rendered its Decision affirming the RTCs judgment.

ISSUE: Whether or not the CA erred in relying on the unsubstantiated and insufficient findings contained in the commissioners report.

HELD: Court of Appeals decision is reversed.

The CA and the RTC erred in relying on the unsubstantiated and insufficient findings contained in the commissioners report. First, the market values of the subject property's neighboring lots were mere estimates and unsupported by any corroborative documents, such as sworn declarations of realtors in the area concerned, tax declarations or zonal valuation from the Bureau of Internal Revenue for the contiguous residential dwellings and commercial establishments. The report also failed to elaborate on how and by how much the community centers and convenience facilities enhanced the value of respondents property. Finally, the market sales data and price listings alluded to in the report were not even appended thereto.

As correctly invoked by NAPOCOR, a commissioners report of land prices which is not based on any documentary evidence is manifestly hearsay and should be disregarded by the court. The trial court adopted the flawed findings of the commissioners hook, line, and sinker. It did not even bother to require the submission of the alleged market sales data and price listings. Further, the RTC overlooked the fact that the recommended just compensation was gauged as of September 10, 1999 or more than two years after the complaint was filed on January 8, 1997. It is settled that just compensation is to be ascertained as of the time of the taking, which usually coincides with the commencement of the expropriation proceedings. Where the institution of the action precedes entry into the property, the just compensation is to be ascertained as of the time of the filing of the complaint. Clearly, the recommended just compensation in the commissioner’s report is unacceptable.

Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. The measure is not the takers gain, but the owners loss. The word just is used to intensify the meaning of the word compensation and to convey thereby the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, and ample. Indeed, the just-ness of the compensation can only be attained by using reliable and actual data as bases in fixing the value of the condemned property.

The trial court should have been more circumspect in its evaluation of just compensation due the property owner, considering that eminent domain cases involve the expenditure of public funds. Hence, the legal basis for the determination of just compensation being insufficient, the ruling of the RTC and the affirming Decision and Resolution of the CA ought to be set aside. The petition for review on certiorari is GRANTED.

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