43. Npc v. Manalastas Case DigesT

NATIONAL POWER CORPORATI COR PORATION ON vs. ELIZABETH MANALASTAS and BEA CASTILLO G.R. No. 196140, Janua! "#, "016 PERALTA, J. PERALTA, J.  Just Compensation The formula for determination of just compensation to landowners does not include the factor for inflation rate, as inflation is properly accounted for through payment of interest interest on the amount due to the landowner, and through the award of exemplary damages and attorney's fees in cases where there was irregularity irregularity in the taking of property.  Estoppel inoperative against Government   Estoppel generally finds no application against the State when it acts to rectify mistakes, errors, irregularities, irregularities, or  illegal acts, of its officials and agents, irrespective of rank. This ensures efficient conduct of the affairs of the State without any hindrance on the part of the government from implementing laws and regulations, despite prior  mistakes or even illegal acts of its agents shackling government operations and allowing others, some by malice, to  profit from official official error error or misbehavior. misbehavior. $ACTS% Petitioner, Petitioner, a government-owned and controlled corporation involved in the development of hydro-electric generation of power power and produc productio tion n of electr electrici icity ty,, and the constr construct uction ion,, operat operation ion and mainte maintenan nance ce of power power plants plants,, transmission lines, power stations and substations, on respondents' parcel of land affecting an area of 26,919 suare meters. Petitioner entered said land without the !nowledge or consent of respondents, without properly initiating e"propriation proceedings, and without any compensation to respondents-landowners. #ecause of said transmission lines, respondents alleged that they could no longer use their land as part of a subdivision pro$ect as originally intended, intended, which ultimate ultimately ly caused caused financia financiall loss to their their family. family. %hus, respondents respondents filed filed a complaint complaint against  petitioner and its officers with the &egional %rial %rial ourt. &espondents &espondents demanded the removal of the power lines and its accessories and payment of damages, or in the alternative, payment of the fair mar!et value of the affected areas totalling 26,((( suare meters of respondents' land at P)((.(( per suare meter.

&% issued a *ecision ordering defendant +P& to pay plaintiffs the amount of P92,)2,/01.((, by way of   $ust compensation compensation and to pay an ttorney's ttorney's fees. n appeal to the , herein petitioner argued that the &% erred in factoring the devaluation of the peso in the computation of the fair mar!et value of respondents' land. Petitioners maintain that such inclusion of the inflation rate in arriving at the value of $ust compensation has no legal basis. +one of the parties contest the finding that the fair mar!et value of the property at the time of ta!ing was Php1(.(( per suare meter. %he  affirmed the &% $udgment with modification, reducing the award to P1,6),9().((. %he  ruled that  petitioner could no longer assail the valuation that petitioner itself recommended, the same being a $udicial admission. ISS&ES% 1. *oes the ourt ourt committe committed d an error when it includes includes the inflatio inflation n rate of the Philippine Philippine Peso Peso in determining determining the $ust compensation due to respondents 2. s estoppel estoppel operative operative against against the 3overnme 3overnment nt rendering rendering it unable to assail assail the valuatio valuation n it recommended recommended,, the same being a $udicial admission admission HEL'% 1. 4es. %he formula for determination of $ust compensation to landowners does not include the factor for inflation rate, as inflation is properly accounted for through payment of interest on the amount due to the landowner, and through the award of e"emplary damages and attorney's fees in cases where there was irregularity in the ta!ing of   property.

5ust compensation is the value of the property at the time of ta!ing that is controlling for purposes of compensation. %he tate is not obliged to pay premium to the property owner for appropriating the latter's property7 it is only bound to ma!e good the loss sustained by the landowner, with due consideration of the circumstances availing at the time the property was ta!en. 8ore, ()* +on+*( o- u/( +o*n/a(on do*/ no( 2! -an*// (o ()* o*(! o3n*

a2on*. Co*n/a(on u/( a2/o * u/( (o ()* u2+, 3)+) u2(a(*2! *a/ ()* +o/( o- *5oa(on . %he ourt recognie that the owner's loss is not only his property but also its income-generating potential. %hus, when  property is ta!en, full compensation of its value must immediately be paid to achieve a fair e"change for the  property and the potential income lost. T)* a(ona2* -o o/n ()* n(**/( / (o +o*n/a(* ()* *((on*/ -o ()* n+o* ()*! 3ou2d )a7* ad* )ad ()*! **n o*2! +o*n/a(*d -o ()* o*(*/ a( ()* (* o-  ()* (a8n.

%he constitutional limitation of :$ust compensation: is considered to be the sum euivalent to the mar!et value of  the property, broadly described to be the price fi"ed by the seller in open mar!et in the usual and ordinary course of  legal action and competition or the fair value of the property as between one who receives, and one who desires to sell, i;f< fi"ed at the time of the actual ta!ing by the government. %hus, - o*(! / (a8*n -o u2+ u/* *-o* +o*n/a(on / d*o/(*d 3() ()* +ou( )a7n u/d+(on o7* ()* +a/*, ()* -na2 +o*n/a(on u/( n+2ud* n(**/(/: on (/ u/( 7a2u* (o * +ou(*d -o ()* (* ()* o*(! / (a8*n (o ()* (* 3)*n +o*n/a(on / a+(ua22! ad o d*o/(*d 3() ()* +ou(. In -n*, *(3**n ()* (a8n o- ()* o*(! and ()* a+(ua2 a!*n(, 2*a2 n(**/(/: a++u* n od* (o 2a+* ()* o3n* n a o/(on a/ ood a/ ;u( no( *((* ()an< ()* o/(on )* 3a/ n *-o* ()* (a8n o++u*d. %he $ust compensation due to the landowners amounts to an effective forbearance on the part of the tate=a proper sub$ect of interest computed from the time the property was ta!en until the full amount of $ust compensation is paid=in order to eradicate the issue of the constant variability of the value of the currency over time. n the ourt's own words> %he #ulacan trial court, in its 199 decision, was correct in imposing interests on the onal value of the property to  be computed from the time petitioner instituted condemnation proceedings and :too!: the property in eptember  1969. This allowance of interest on the amount found to be the value of the property as of the time of the taking  computed, being an effective forbearance, at 1! per annum should help eliminate the issue of the constant   fluctuation and inflation of the value of the currency over time 5 5 5. %he foregoing clearly dictates that valuation of the land for purposes of determining $ust compensation should not include the inflation rate of the Philippine Peso because the delay in payment of the price of e"propriated land is sufficiently recompensed through payment of interest on the mar!et value of the land as of the time of ta!ing from the landowner.

2. +o. ?stoppel generally finds no application against the tate when it acts to rectify mista!es, errors, irregularities, or illegal acts, of its officials and agents, irrespective of ran!. %his ensures efficient conduct of the affairs of the tate without any hindrance on the part of the government from implementing laws and regulations, despite prior  mista!es or even illegal acts of its agents shac!ling government operations and allowing others, some by malice, to  profit from official error or misbehavior. %he rule holds true even if the rectification pre$udices parties who had meanwhile received benefits. ?ven granting that the persons representing the government were negligent, the doctrine of estoppel cannot be ta!en against the &epublic.

%he fact that it was petitioner's own counsel below that recommended the inclusion of the inflation rate in the determination of $ust compensation should not be ta!en against petitioner. fter all, it is ultimately the courts' mandated duty to ad$udge whether the parties' submissions are correct. t is the courts, not the litigants, who decide on the proper interpretation or application of the law and, thus, only the courts may determine the rightful compensation in accordance with the law and evidence presented by the parties. t is incongruous for the court  below to uphold a proposition merely because it was recommended by a party, despite the same being erroneous.

%he cases cited by the lower court to $ustify its ruling that petitioner is bound by the recommendation made by its counsel before the trial court, are all inapplicable to the present case as said cases do not involve agencies or  instrumentalities of the tate.