When the taking of private property is no longer for a public purpose, the expropriation complaint should be disMissed by the trial court. The case will proceed only if the trial court's order of expropriation became final and executory and the expropriation causes prejudice to the property owner.

Expropriation proceedings for national infrastructure projects are governed by Rule 67 of the Rules of Court and Republic Act No. 8974.44

The power of eminent domain is an inherent competence of the state. It is essential to a sovereign. Thus, the Constitution does not explicitly define this power but subjects it to a limitation: that it be exercised only for public use and with payment of just compensation.45 Whether the use is public or whether the compensation is constitutionally just will be determined finally by the courts.

However, the manner of its exercise such as which government instrumentality can be delegated with the power to condemn, under what conditions, and how may be limited by law. Republic Act No. 8974 does these, but it should not be read as superseding the power of this court to promulgate rules of procedure. Thus, our existing rules should be read in conjunction with the law that limits and conditions the power of eminent domain.

Expropriation, the procedure by which the government takes possession of private property, is outlined primarily in Rule 67 of the Rules of Court. It undergoes two phases. The first phase determines the propriety of the action. The second phase determines the compensation to be paid to the landowner. Thus:

There are two (2) stages in every action for expropriation. The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint." An order of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action and leaves nothing more to be done by the Court on the merits. So, too, would an order of condemnation be a final one, for thereafter, as the Rules expressly state, in the proceedings before the Trial Court, "no objection to the exercise of the right of condemnation (or the propriety thereof) shall be filed or heard.["]

The second phase of the eminent domain action is concerned with the determination by the Court of "the just compensation for the property sought to be taken." This is done by the Court with the assistance of not more than three (3) commissioners. The order fixing the just compensation on the basis of the evidence before, and findings of, the commissioners would be final, too. It would finally dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding the issue. Obviously, one or another of the parties may believe the order to be erroneous in its appreciation of the evidence or findings of fact or otherwise. Obviously, too, such a dissatisfied party may seek a reversal of the order by taking an appeal therefrom.46 (Emphasis supplied, citations omitted)

The first phase of expropriation commences with the filing of the complaint. It ends with the order of the trial court to proceed with the expropriation and determination of just compensation. During the pendency of the complaint before the trial court, the state may already enter and possess the property subject to the guidelines in Rule 67 of the Rules of Court.

Rule 67 of the Rules of Court, however, is not the only set of rules that governs the first phase of expropriation. On November 7, 2000, Congress enacted Republic Act No. 8974 to govern the expropriation of private property for national government infrastructure projects. The law qualifies the manner by which the government may enter and take possession of the property to be expropriated.

Rule 67, Section 2 of the Rules of Court states:

Sec. 2. Entry of plaintiff upon depositing value with authorized government depositary. — Upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court. Such deposit shall be in money, unless in lieu thereof the court authorizes the deposit of a certificate of deposit of a government bank of the Republic of the Philippines payable on demand to the authorized government depositary. (Emphasis supplied)

Section 4 of Republic Act No. 8974,on the other hand, mandates: Section 4. Guidelines for Expropriation Proceedings.- Whenever it is necessary to acquire real property for the right-of-way or location for any national government infrastructure project through expropriation, the appropriate implementing agency shall initiate the expropriation proceedings before the proper court under the following guidelines:

(a) Upon the filing of the complaint, and after due notice to the defendant, the implementing agency shall immediately pay the owner of the property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of the property based on the current relevant zonal valuation of the Bureau of Internal Revenue (BIR); and (2) the value of the improvements and/or structures as determined under Section 7 hereof;

. . . .

Upon compliance with the guidelines abovementioned, the court shall immediately issue to the implementing agency an order to take possession of the property and start the implementation of the project. (Emphasis supplied)

As stated in Gingoyon, Republic Act No. 8974 "provides for a procedure eminently more favorable to the property owner than Rule 67"47 since it requires the immediate payment of the zonal value and the value of the improvements on the land to the property owner before the trial court can allow the government to take possession. In contrast, Rule 67 only requires the government to deposit the assessed value of the property for it to enter and take possession.

In its Petition, the National Power Corporation argues that the amount of just compensation at ₱2,000.00 per square meter is excessive since the zonal valuation of the Bureau of Internal Revenue classifies the property as cocoland48pegged at 4.15 per square meter, and the commissioners merely "engaged in speculation and guess-work"49 when they arrived at the amount.50

The National Power Corporation argues that the Writ of Possession should not have been recalled because it already deposited ₱580,769.93, the provisional amount required by Republic Act No. 8974. It argues that the amount ordered by the trial court to be paid to respondents was the amount of just compensation, which should have been distinguished from the provisional amount required for the issuance of a Writ of Possession. The deposit of the provisional amount was sufficient to be granted a Writ of Possession and to take possession of the property.51

In their Comment, respondents argue that the Court of Appeals did not err in sustaining the amount of just compensation determined by the trial court since the value was based on location, costs of improvements, prevailing market values of the properties similarly located, and opinions of the residents in the area.52

Respondents also argue that the Court of Appeals correctly upheld the trial court’s recall of the Writ of Possession because there was no showing that any payment was made to respondents, as required by Gingoyon.53

The purpose for the taking of private property was for the construction of the National Power Corporation’s Substation Island Grid Project. According to the Implementing Rules and Regulations of Republic Act No. 8974, projects related to "power generation, transmission and distribution"54 are national infrastructure projects covered by the law. The National Power Corporation must first comply with the guidelines stated in Republic Act No. 8974 before it can take possession of respondents’ property.

The trial court allowed the National Power Corporation to take possession of the properties because of its deposit with Land Bank of the Philippines of the alleged provisional value. However, the trial court recalled the Writ of Possession because the National Power Corporation failed to deposit the additional amount.

ECOND DIVISION

G.R. No. 191945               March 11, 2015

NATIONAL CORPORATION, Petitioner,
vs.
SOCORRO T. POSADA, RENATO BUENO, ALICE BALIN, ADRIAN TABLIZO, TEOFILO TABLIZO, and LYDIA T. OLIVO, substituted by her heirs, ALFREDO M. OLIVO, ALICIA O. SALAZAR, ANITA O. ORDONO, ANGELITA O. LIM, AND ADELFA O. ESPINAS, Respondents.