Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 186069

January 30, 2013

SPOUSES JESUS L. CABAHUG AND CORONACION M. CABAHUG, Petitioners,

vs.
NATIONAL POWER CORPORATION, Respondent.
DECISION
PEREZ, J.:
This Rule 45 Petition for Review on Certiorari seeks the reversal of (a) the 16 May 2007 Decision1 rendered by the
Eighteenth Division of the Court of Appeals (CA) in CA-G.R. CV No. 67331 which reversed the 14 March 2000
Decision rendered by the Regional Trial Court (RTC), Branch 17, Palompon, Leyte, in Civil Case No. PN-0213 and
ordered the dismissal of the complaint for just compensation tiled by petitioners Spouses Jesus L. Cabahug and
Coronacion M. Cabahug (Spouses Cabahug) against respondent National Power Corporation (NPC);2 and (b) the
CA's Resolution dated 9 January 2009, denying the motion for reconsideration of the 16 May 2007 Decision for lack
of merit.3
The facts are not in dispute.
The Spouses Cabahug are the owners of two parcels of land situated in Barangay Capokpok, Tabango, Leyte,
registered in their names under Transfer Certificate of Title (TCT) Nos. T-9813 and T-1599 of the Leyte provincial
registry.4 They were among the defendants in Special Civil
Action No. 0019-PN, a suit for expropriation earlier filed by NPC before the RTC, in connection with its Leyte-Cebu
Interconnection Project. The suit was later dismissed when NPC opted to settle with the landowners by paying an
easement fee equivalent to 10% of value of their property in accordance with Section 3-A of Republic Act (RA) No.
6395.5 In view of the conflicting land values presented by the affected landowners, it appears that the Leyte Provincial
Appraisal Committee, upon request of NPC, fixed the valuation of the affected properties at P45.00 per square
meter.6
On 9 November 1996, Jesus Cabahug executed two documents denominated as Right of Way Grant in favor of NPC.
For and in consideration of the easement fees in the sums of P112,225.50 and P21,375.00, Jesus Cabahug granted
NPC a continuous easement of right of way for the latters transmissions lines and their appurtenances over 24,939
and 4,750 square meters of the parcels of land covered by TCT Nos. T-9813 and T-1599, respectively. By said grant,
Jesus Cabahug agreed not to construct any building or structure whatsoever, nor plant in any area within the Right of
Way that will adversely affect or obstruct the transmission line of NPC, except agricultural crops, the growth of which
will not exceed three meters high. Under paragraph 4 of the grant, however, Jesus Cabahug reserved the option to
seek additional compensation for easement fee, based on the Supreme Courts 18 January 1991 Decision in G.R.
No. 60077, entitled National Power Corporation v. Spouses Misericordia Gutierrez and Ricardo Malit, et al.
(Gutierrez).7
On 21 September 1998, the Spouses Cabahug filed the complaint for the payment of just compensation, damages
and attorneys fees against NPC which was docketed as Civil Case No. PN-0213 before the RTC. Claiming to have
been totally deprived of the use of the portions of land covered by TCT Nos. T-9813 and T-1599, the Spouses
Cabahug alleged, among other matters, that in accordance with the reservation provided under paragraph 4 of the
aforesaid grant, they have demanded from NPC payment of the balance of the just compensation for the subject
properties which, based on the valuation fixed by the Leyte Provincial Appraisal Committee, amounted to
P1,202,404.50.8 In its answer, on the other hand, NPC averred that it already paid the full easement fee mandated
under Section 3-A of RA 6395 and that the reservation in the grant referred to additional compensation for easement
fee, not the full just compensation sought by the Spouses Cabahug.9
Acting on the motion for judgment on the pleadings that was filed by the Spouses Cabahug, the RTC went on to
render a Decision dated 14 March 2000. Brushing aside NPCs reliance on Section 3-A of RA 6395, the RTC applied
the ruling handed down by this Court in Gutierrez to the effect that NPCs easement of right of way which indefinitely
deprives the owner of their proprietary rights over their property falls within the purview of the power of eminent
domain.10 As a consequence, the RTC disposed of the complaint in the following wise:

WHEREFORE, premises considered, judgment is hereby rendered for the Spouses Cabahug and against NPC,
ordering NPC:
1. To pay the Spouses Cabahug the sum of ONE MILLION THREE HUNDRED THIRTY SIX THOUSAND
and FIVE PESOS (P1,336,005.00) together with the legal rate of interest thereon per annum reckoned from
January 3, 1997 less the amount previously paid by NPC to the Spouses Cabahug for easement fee only;
2. To pay the Spouses Cabahug the sum equivalent to FIVE (5%) PERCENT of the amount mentioned in
the next preceding paragraph for attorneys fees; and
3. To pay the Spouses Cabahug the sum of TWENTY THOUSAND (P20,000.00) PESOS for actual
damages and litigation expenses plus costs of the proceedings.
SO ORDERED.11
Aggrieved by the foregoing decision, the NPC perfected the appeal which was docketed as CA-G.R. CV No. 67331
before the CA which, on 16 May 2007, rendered the herein assailed decision, reversing and setting aside the RTCs
appealed decision. Finding that the facts of a case are different from those obtaining in Gutierrez and that Section 3-A
of RA 6395 only allows NPC to acquire an easement of right of way over properties traversed by its transmission
lines,12 the CA succinctly ruled as follows:
Unfortunately, the Spouses Cabahug had already accepted the payment of easement fee, pursuant to R.A. 6395, as
amended, way back in 1996. Therefore, NPCs easement of right of way has for all legal intents and purposes, been
established as far back as 1996. Since vested right has already accrued in favor of NPC, to allow the Spouses
Cabahug to pursue this case when the easement of right of way had already been consummated would be in
violation of the contract. The contracting parties, the Spouses Cabahug and NPC had already conformed with the
terms and conditions of the agreement. To allow the Spouses Cabahug to again collect from NPC payment of just
compensation would amount to unjust enrichment at the expense of NPC and would sanction violation of the parties
contract, which the Spouses Cabahug cannot do in the case at bench. Further, the award of attorneys fees and
litigation expenses and the costs of suit in favor of the Spouses Cabahug cannot be justified in the case at bar since it
appears that the complaint actually has no legal basis.13
The Spouses Cabahugs motion for reconsideration of the 16 May 2007 Decision14 was denied for lack of merit in the
CAs Resolution dated 9 January 2009. Hence, this petition for review on certiorari.15 In urging the reversal of the CAs
assailed Decision and Resolution, the Spouses Cabahug argue that the CA erred: (a) in disregarding paragraph 4 of
the Grant of Right of Way whereby Jesus Cabahug reserved the right to seek additional compensation for easement
fee; and (b) in not applying this Courts ruling in Gutierrez case.16 In representation of NPC, on the other hand, the
Office of the Solicitor General (OSG) argues that the sums paid in 1996 by way of easement fees represent the full
amount allowed by law and agreed upon by the parties. Considering that Gutierrez concerned the payment of just
compensation for property expropriated by the NPC, the OSG maintains the CA did not err in according scant
consideration to the Spouses Cabahugs invocation of the ruling in said case.17
We find the petition impressed with merit.
The CA regarded the Grant of Right of Way executed by Jesus Cabahug in favor of NPC as a valid and binding
contract between the parties, a fact affirmed by the OSG in its 8 October 2009 Comment to the petition at
bench.18 Given that the parties have already agreed on the easement fee for the portions of the subject parcels
traversed by NPCs transmissions lines, the CA ruled that the Spouses Cabahugs attempt to collect further sums by
way of additional easement fee and/or just compensation is violative of said contract and tantamount to unjust
enrichment at the expense of NPC. As correctly pointed out by the Spouses Cabahug, however, the CAs ruling totally
disregards the fourth paragraph of the Grant executed by Jesus Cabahug which expressly states as follows:
That I hereby reserve the option to seek additional compensation for Easement Fee, based on the Supreme Court
Decision in G.R. No. 60077, promulgated on January 18, 1991, which jurisprudence is designated as "NPC vs.
Gutierrez" case.19
From the foregoing reservation, it is evident that the Spouses Cabahugs receipt of the easement fee did not bar them
from seeking further compensation from NPC. Even by the basic rules in the interpretation of contracts, we find that
the CA erred in holding that the payment of additional sums to the Spouses Cabahug would be violative of the parties
contract and amount to unjust enrichment. Indeed, the rule is settled that a contract constitutes the law between the
parties who are bound by its stipulations20 which, when couched in clear and plain language, should be applied
according to their literal tenor.21 Courts cannot supply material stipulations, read into the contract words it does not
contain22 or, for that matter, read into it any other intention that would contradict its plain import.23 Neither can they
rewrite contracts because they operate harshly or inequitably as to one of the parties, or alter them for the benefit of

one party and to the detriment of the other, or by construction, relieve one of the parties from the terms which he
voluntarily consented to, or impose on him those which he did not.24
Considering that Gutierrez was specifically made the point of reference for Jesus Cabahugs reservation to seek
further compensation from NPC, we find that the CA likewise erred in finding that the ruling in said case does not
apply to the case at bench. Concededly, the NPC was constrained to file an expropriation complaint in Gutierrez due
to the failure of the negotiations for its acquisition of an easement of right of way for its transmission lines. The issue
that was eventually presented for this Courts resolution, however, was the propriety of making NPC liable for the
payment of the full market value of the affected property despite the fact that transfer of title thereto was not required
by said easement. In upholding the landowners right to full just compensation, the Court ruled that the power of
eminent domain may be exercised although title is not transferred to the expropriator in an easement of right of way.
Just compensation which should be neither more nor less than the money equivalent of the property is, moreover,
due where the nature and effect of the easement is to impose limitations against the use of the land for an indefinite
period and deprive the landowner its ordinary use.
Even without the reservation made by Jesus Cabahug in the Grant of Right of Way, the application of Gutierrez to this
case is not improper as NPC represents it to be. Where the right of way easement, as in this case, similarly involves
transmission lines which not only endangers life and limb but restricts as well the owner's use of the land traversed
thereby, the ruling in Gutierrez remains doctrinal and should be applied.25 It has been ruled that the owner should be
compensated for the monetary equivalent of the land if, as here, the easement is intended to perpetually or
indefinitely deprive the owner of his proprietary rights through the imposition of conditions that affect the ordinary use,
free enjoyment and disposal of the property or through restrictions and limitations that are inconsistent with the
exercise of the attributes of ownership, or when the introduction of structures or objects which, by their nature, create
or increase the probability of injury, death upon or destruction of life and property found on the land is
necessary.26 Measured not by the takers gain but the owners loss, just compensation is defined as the full and fair
equivalent of the property taken from its owner by the expropriator.271wphi1
Too, the CA reversibly erred in sustaining NPCs reliance on Section 3-A of RA 6395 which states that only 10% of the
market value of the property is due to the owner of the property subject to an easement of right of way. Since said
easement falls within the purview of the power of eminent domain, NPCs utilization of said provision has been
repeatedly struck down by this Court in a number of cases.28 The determination of just compensation in eminent
domain proceedings is a judicial function and no statute, decree, or executive order can mandate that its own
determination shall prevail over the court's findings.29 Any valuation for just compensation laid down in the statutes
may serve only as a guiding principle or one of the factors in determining just compensation, but it may not substitute
the court's own judgment as to what amount should be awarded and how to arrive at such amount.30 Hence, Section
3A of R.A. No. 6395, as amended, is not binding upon this Court.31
In this case, the Leyte Provincial Appraisal Committee fixed the valuation of the affected properties at P45.00 per
square meter at the instance of NPC. Considering that the installation of the latters transmission lines amounted to
the taking of 24,939 and 4,750 square meters from the parcels of land covered by TCT Nos. T-9813 and T-1599 or a
total of 29,689 square meters, the RTC correctly determined that the Spouses Cabahug are entitled to P1,336,005.00
(29,689 x P45.00) by way of just compensation for their properties. Inasmuch as NPC had already paid the sums of
P112,225.50 and P21,375.00 as easement fee, the sum of P133,600.50 should be deducted from P1,336,005.00 for
a remaining balance of P1,202,404.50. To this latter sum, the RTC also correctly imposed legal interest since the
Spouses Cabahug, as landowners, are entitled to the payment of legal interest on the compensation for the subject
lands from the time of the taking of their possession up to the time that full payment is made by petitioner. In
accordance with jurisprudence, the legal interest allowed in payment of just compensation for lands expropriated for
public use is six percent (6%) per annum.32
For want of a statement of the rationale for the award in the body of the RTCs 14 March 2000 Decision, we are
constrained, however, to disallow the grant of attorneys fees in favor of the Spouses Cabahug in an amount
equivalent to 5% of the just compensation due as well as the legal interest thereon. Considered the exception rather
than the general rule, the award of attorneys fees is not due every time a party prevails in a suit because of the policy
that no premium should be set on the right to litigate.33 The RTC's award of litigation expenses should likewise be
deleted since, like attorney's fees, the award thereof requires that the reasons or grounds therefor must be set forth in
the decision of the court.34 This is particularly true in this case where the litigation expenses awarded were
alternatively categorized by the RTC as actual damages which, by jurisprudence, should be pleaded and adequately
proved. Time and again, it has been ruled that the fact and amount of actual damages cannot be based on
speculation, conjecture or guess work, but must depend on actual proof.35
WHEREFORE, premises considered, the petition is GRANTED and the CA's assailed 16 May 2007 Decision and 9
January 2009 Resolution are, accordingly, REVERSED and SET ASIDE. In lieu thereof, another is entered
REINSTATING the RTC's 14 March 2000 Decision, subject to the MODIFICATION that the awards of attorney's fees,
actual damages and/or litigation expenses are DELETED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 173520

January 30, 2013

NATIONAL POWER CORPORATION, Petitioner,

vs.
SPOUSES RODOLFO ZABALA and LILIA BAYLON, Respondents.
DECISION
DEL CASTILLO, J.:
Legislative enactments, as well as executive issuances, fixing or providing fix the method of computing just
compensation are tantamount to impermissible encroachment on judicial prerogatives.1 Thus they are not binding on
courts and, at best, are treated as mere guidelines in ascertaining the amount of just compensation.2
This Petition for Review on Certiorari3 assails the July 10, 2006 Decision4 of the Court of Appeals (CA) in CA-G.R. CV
No. 85396 which affirmed the June 28, 2004 Partial Decision5 of the Regional Trial Court (RTC), Branch 2, Balanga
City in an eminent domain case,6 ordering petitioner National Power Corporation ( Napocor) to pay respondents
spouses Rodolfo Zabala and Lilia Baylon (spouses Zabala) just compensation ofP-150.00 per square meter for the
6,820-square meter portion of the spouses' property which was traversed by transmission lines of Napocor under its
230 KV Limay-Hermosa Permanent Transmission Lines Project.
Factual Antecedents
The facts of this case as found by the CA and adopted by Napocor are as follows:
On October 27, 1994, plaintiff-appellant National Power Corporation ("Napocor" x x x) filed a complaint for Eminent
Domain against defendants-appellees Sps. R. Zabala & L. Baylon, Tomas Aguirre, Generosa de Leon and Leonor
Calub ("Spouses Zabala", "Aguirre" "de Leon", and "Calub," respectively x x x) before the Regional Trial Court,
Balanga City, Bataan alleging that: defendants-appellees Spouses Zabala and Baylon, Aguirre, de Leon, and Calub
own parcels of land located in Balanga City, Bataan; it urgently needed an easement of right of way over the affected
areas for its 230 KV Limay-Hermosa Transmission Line[s]; the said parcels of land have neither been applied nor
expropriated for any public use, and were selected in a manner compatible with the greatest public good and the
least private injury; it repeatedly negotiated with the defendants-appellees for the acquisition of right of way easement
over the said parcels of land but failed to reach an agreement with the latter; it has the right to take or enter upon the
possession of the subject properties pursuant to Presidential Decree No. 42, which repealed Section 2, Rule 67 of the
Rules of Court upon the filing of the expropriation complaint before the proper court or at anytime thereafter, after due
notice to defendants-appellees, and upon deposit with the Philippine National Bank of the amount equal to the
assessed value of the subject properties for taxation purposes which is to be held by said bank subject to the orders

and final disposition of the court; and it is willing to deposit the provisional value representing the said assessed value
of the affected portions of the subject property x x x. It prayed for the issuance of a writ of possession authorizing it to
enter and take possession of the subject property, to demolish all the improvements x x x thereon, and to commence
with the construction of the transmission lines project on the subject properties, and to appoint not more than three
(3) commissioners to ascertain and report the just compensation for the said easement of right of way.
xxxx
On January 11, 1995, defendant-appellee Spouses Zabala moved to dismiss the complaint averring that: the Balanga
City proper is already crowded and x x x needs additional space to meet the housing requirements of the growing
population; the only direction the city proper could expand is the side where their subject property is located; they
incurred a considerable expense in the preparatory development of the subject property into a subdivision to serve
the interest and well being of the growing population of Balanga; the said growing need for housing and said
preparatory development would necessarily increase the value of the said property; the just compensation would be
higher if the proposed transmission lins of plaintiff-appellant Napocor is installed or made to pass or traverse through
their property rather than through the parcels of land farther from the existing city proper and away from their property
which was tapped to meet the expansion requirements of the Balanga City proper; the transfer of the proposed
transmission lines from their property to a farther location is more economical and less expensive to plaintiff-appellant
Napocor and it would better serve the interest of the people of Balanga because said location is less developed, not
needed for the expansion requirements of Balanga City proper, the lots that would be traversed command a lower
price and less compensation would be paid by plaintiff-appellant Napocor; the traversing of the transmission lines
through their property would impact negatively on the housing expansion in Balanga, the high tension wires would
endanger the life and limb of the inhabitants within the area, and decrease the value of their subject property; the
complaint does not show that the installation of the proposed transmission wires on their property is the most direct,
practical and least burdensome means to achieve public good; the assessed value of P1,636.89 stated in Tax
Declaration No. 1646 is insufficient because it has been revised and cancelled by Tax Declaration No. 11052 which
shows a higher assessment value for the said property; and plaintiff-appellant Napocor did not exert earnest efforts
toward the direct purchase of the needed portion of their property before filing a complaint before the lower court.
On March 4, 1996 and March 7, 1996 plaintiff-appellant Napocor and defendants-appellees Spouses Zabala filed
their respective Pre-Trial Briefs.
On December 4, 1997, the Commissioners submitted their Report/Recommendation fixing the just compensation for
the use of defendants-appellees Spouses Zabalas property as easement of right of way at P150.00 per square meter
without considering the consequential damages.
Plaintiff-appellant Napocor prayed in its Comment to the commissioners report, that the report be recommitted to the
commissioners for the modification of the report and the substantiation of the same with reliable and competent
documentary evidence based on the value of the property at the time of its taking. On their part, defendantsappellees Spouses Zabala prayed, in the Comments, for the fixing of the just compensation atP250.00 per square
meter.
On February 25, 1998, the lower court recommitted the report to the Commissioners for further report on the points
raised by the parties.
On August 20, 2003, the Commissioners submitted their Final Report fixing the just compensation at P500.00 per
square meter.7
Since the Commissioners had already submitted their Final Report8 on the valuation of the subject property, spouses
Zabala moved for the resolution of the case insofar as their property was concerned. Thus, on June 28, 2004, the
RTC rendered its Partial Decision,9 ruling that Napocor has the lawful authority to take for public purpose and upon
payment of just compensation a portion of spouses Zabalas property. The RTC likewise ruled that since the spouses
Zabala were deprived of the beneficial use of their property, they are entitled to the actual or basic value of their
property. Thus, it fixed the just compensation at P150.00 per square meter. The dispositive portion of the RTCs
Partial Decision reads:
WHEREFORE, premises considered, the Court having determined that Napocor has a lawful right to take the subject
properties in the exercise of the power of eminent domain upon payment of just compensation, the petition is hereby
granted.
Accordingly, Napocor is hereby ordered to pay defendant Spouses Rodolfo Zabala and Lilia Baylon the amount of
Php 150.00 per square meter for the 6,820 square meters taken from the latters property, as the just compensation
fixed and recommended by the commissioners determined as of the date of the taking of the property.

As regards x x x the properties of the other defendants, the determination of x x x just compensation is hereby held in
abeyance until the submission of the commissioners report.
SO ORDERED.10
Napocor appealed to the CA. It argued that the Commissioners reports upon which the RTC based the just
compensation are not supported by documentary evidence. Necessarily, therefore, the just compensation pegged by
the RTC at P150.00 per square meter also lacked basis. Napocor likewise imputed error on the part of the RTC in not
applying Section 3A of Republic Act (RA) No. 639511 which limits its liability to easement fee of not more than 10% of
the market value of the property traversed by its transmission lines.
On July 10, 2006, the CA rendered the assailed Decision affirming the RTCs Partial Decision.
Issue
Hence, this Petition anchored on the ground that:
THE COURT OF APPEALS ERRED IN AFFIRMING THE PARTIAL DECISION DATED JUNE 28, 2004 AND THE
ORDER DATED FEBRUARY 7, 2005 OF THE TRIAL COURT FIXING THE AMOUNT OF P150.00 PER SQUARE
METER AS THE FAIR MARKET VALUE OF THE SUBJECT PROPERTY SINCE THE SAME IS NOT SUPPORTED
BY DOCUMENTARY EVIDENCE.12
Napocor contends that under Section 3A of RA No. 6395, it is not required to pay the full market value of the property
when the principal purpose for which it is actually devoted will not be impaired by its transmission lines. It is enough
for Napocor to pay easement fee which, under the aforementioned law, should not exceed 10% of the market value of
the affected property. Napocor argues that when it installed its transmission lines, the property of spouses Zabala
was classified as riceland and was in fact devoted to the cultivation of palay. Its transmission lines will not, therefore,
affect the primary purpose for which the subject land is devoted as the same only pass through it. The towers to
which such lines are connected are not even built on the property of spouses Zabala, who will remain the owner of
and continue to enjoy their property. Hence, the RTC and the CA, according to Napocor, both erred in not applying
Section 3A of RA No. 6395.
Napocor further argues that even assuming that spouses Zabala are entitled to the full market value of their property,
the award of P150.00 per square meter as just compensation lacks basis because the recommendation of the
Commissioners is not supported by documentary evidence.
Our Ruling
The petition is partially meritorious.
Section 3A of RA No. 6395 cannot
restrict the constitutional power of the
courts to determine just compensation.
In insisting that the just compensation cannot exceed 10% of the market value of the affected property, Napocor
relies heavily on Section 3A of RA No. 6395, the pertinent portions of which read:
Sec. 3A. In acquiring private property or private property rights through expropriation proceedings where the land or
portion thereof will be traversed by the transmission lines, only a right-of-way easement thereon shall be acquired
when the principal purpose for which such land is actually devoted will not be impaired, and where the land itself or
portion thereof will be needed for the projects or works, such land or portion thereof as necessary shall be acquired.
In determining the just compensation of the property or property sought to be acquired through expropriation
proceedings, the same shall:
(a) With respect to the acquired land or portion thereof, not to exceed the market value declared by the
owner or administrator or anyone having legal interest in the property, or such market value as determined
by the assessor, whichever is lower.

(b) With respect to the acquired right-of-way easement over the land or portion thereof, not to exceed ten
percent (10%) of the market value declared by the owner or administrator or anyone having legal interest in
the property, or such market value as determined by the assessor whichever is lower.
xxxx
Just compensation has been defined as "the full and fair equivalent of the property taken from its owner by the
expropriator. The measure is not the taker's gain, but the owners loss. The word just is used to qualify the meaning
of the word compensation and to convey thereby the idea that the amount to be tendered for the property to be
taken shall be real, substantial, full and ample."13 The payment of just compensation for private property taken for
public use is guaranteed no less by our Constitution and is included in the Bill of Rights.14 As such, no legislative
enactments or executive issuances can prevent the courts from determining whether the right of the property owners
to just compensation has been violated. It is a judicial function that cannot "be usurped by any other branch or official
of the government."15 Thus, we have consistently ruled that statutes and executive issuances fixing or providing for
the method of computing just compensation are not binding on courts and, at best, are treated as mere guidelines in
ascertaining the amount thereof.16 In National Power Corporation v. Bagui,17 where the same petitioner also invoked
the provisions of Section 3A of RA No. 6395, we held that:
Moreover, Section 3A-(b) of R.A. No. 6395, as amended, is not binding on the Court. It has been repeatedly
emphasized that the determination of just compensation in eminent domain cases is a judicial function and that any
valuation for just compensation laid down in the statutes may serve only as a guiding principle or one of the factors in
determining just compensation but it may not substitute the courts own judgment as to what amount should be
awarded and how to arrive at such amount.18
This ruling was reiterated in Republic v. Lubinao,19 National Power Corporation v. Tuazon20 and National Power
Corporation v. Saludares21 and continues to be the controlling doctrine. Notably, in all these cases, Napocor likewise
argued that it is liable to pay the property owners for the easement of right-of-way only and not the full market value
of the land traversed by its transmission lines. But we uniformly held in those cases that since the high-tension
electric current passing through the transmission lines will perpetually deprive the property owners of the normal use
of their land, it is only just and proper to require Napocor to recompense them for the full market value of their
property.
The just compensation of P150.00 per
square meter as fixed by the RTC is not
supported by evidence.
It has likewise been our consistent ruling that just compensation cannot be arrived at arbitrarily. Several factors must
be considered, such as, but not limited to, acquisition cost, current market value of like properties, tax value of the
condemned property, its size, shape, and location. But before these factors can be considered and given weight, the
same must be supported by documentary evidence.
In the case before us, it appears that the Commissioners November 28, 1997 Report/Recommendation22 is not
supported by any documentary evidence. There is nothing therein which would show that before arriving at the
recommended just compensation of P150.00, the Commissioners considered documents relevant and pertinent
thereto. Their Report/Recommendation simply states that on November 17, 1997, the Commissioners conducted an
ocular inspection; that they interviewed persons in the locality; that the adjacent properties have market value
of P150.00 per square meter; and, that the property of Nobel Philippine which is farther from the Roman Expressway
is being sold for P200.00 per square meter. No documentary evidence whatsoever was presented to support their
report that indeed the market value of the adjacent properties are P150.00 and that of Nobel Philippine is P200.00.
Napocor objected to the Report/Recommendation of the Commissioners and pointed out that the same is not
supported by documentary evidence.23 spouses Zabala likewise commented thereon and argued that their property
should be valued at P250.00 per square meter.24 Accordingly, the RTC recommitted the Report/Recommendation to
the Commissioners for further evaluation of the points raised by the parties.25
In April 1998, the Commissioners submitted a Supplemental Report.26 Then on August 20, 2003, the Commissioners
submitted their Final Report27 recommending a compensation of P500.00 per square meter. But like their earlier
reports, the Commissioners Final Report lacks documentary support. It reads:
1. Further ocular inspection was conducted on the property under consideration of the Honorable Court.
2. To date the land is properly secured, contained and fenced with concrete hollow blocks.

3. The property is not tenanted and the area covered and affected by the transmission lines has not been
tilled and planted x x x.
4. Upon inquiry from the landowners, the Sps. Rodolfo and Lilia Zabala, they intimated that they are
proposing to develop the property into a subdivision, as they already fenced and contained the area.
5. At present, another property which is very far from the Roman Expressway was subdivided, known as the
St. Elizabeth Country Homes. Lots are being sold there at P1,700.00 per square meter.
6. The property of the Sps. Zabala is only some meters away from the Roman Expressway compared to the
St. Elizabeth Country Homes which is very far from the highway.
7. Moreover, the other subdivisions, Maria Lourdes and Vicarville which are within the vicinity sell their lots
now ranging from P1,800.00 per square meter to P2,500.00.
8. As already stated, the property of the Sps. Zabala is within the built-up area classified as residential,
commercial and industrial.
9. In its earlier reports in 1998, the commission recommended a just compensation of P150.00 per square
meter.
10. But considering the considerable lapse of time and increase in the valuation of the properties within the
area, the commissioners are impelled to increase the recommended valuation to P500.00 per square meter.
WHEREFORE, it is recommended to the Honorable Court that the owners of the property affected and traversed by
the transmission lines of the NPC be compensated at P500.00 per square meter.28
In Republic v. Santos,29 we ruled that a commissioners land valuation which is not based on any documentary
evidence is manifestly hearsay and should be disregarded by the court, viz:
The statement in the 1970 report of the commissioners that according to the owners of adjoining lots the prices per
square meter ranged from P150 to P200 and that subdivision lots in the vicinity were being sold at P85 toP120 a
square meter was not based on any documentary evidence. It is manifestly hearsay. Moreover, those prices refer to
1970 or more than a year after the expropriation was effected.30
The same ruling was arrived at in National Power Corporation v. Diato-Bernal,31 where we overturned the ruling of the
trial court and the CA adopting the findings of the commissioners sans supporting documentary evidence therefor.
Thus:
It is evident that the above conclusions are highly speculative and devoid of any actual and reliable basis. First, the
market values of the subject propertys 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.32
Under Section 8,33 Rule 67 of the Rules of Court, the trial court may accept or reject, whether in whole or in part, the
commissioners report which is merely advisory and recommendatory in character. It may also recommit the report or
set aside the same and appoint new commissioners. In the case before us, however, in spite of the insufficient and
flawed reports of the Commissioners and Napocors objections thereto, the RTC eventually adopted the same. It
shrugged off Napocors protestations and limited itself to the reports submitted by the Commissioners. It neither
considered nor required the submission of additional evidence to support the recommended P150.00 per square
meter just compensation. Ergo, insofar as just compensation is concerned, we cannot sustain the RTCs Partial
Decision for want of documentary support.1wphi1
Lastly, it should be borne in mind that just compensation should be computed based on the fair value of the subject
property at the time of its taking or the filing of the complaint, whichever came first.34 Since in this case the filing of the
eminent domain case came ahead of the taking, just compensation should be based on the fair market value of
spouses Zabalas property at the time of the filing of Napocors Complaint on October 27, 1994 or thereabouts.
WHEREFORE, the instant Petition is PARTIALLY GRANTED. This case is REMANDED to the Regional Trial Court,
Branch 2, Balanga City for the proper determination of just compensation.

SO ORDERED.