CASE DIGEST : HEIRS OF RAISA DIMAO v. NATIONAL GRID CORPORATION OF PHILIPPINES GR No. 254020, Mar 01, 2023 GAERLAN

 FACTS : The case arose from an expropriation complaint filed by the respondent to acquire 11,460 square meters of Lot No. 104 in Baloi, Lanao del Norte for the maintenance of the Baloi-Agus 2 138kV Transmission Line (BATL), which had been constructed by the National Power Corporation (NPC) in 1978. Pursuant to Republic Act No. 9136 (Electric Power Industry Reform Act of 2001), the transmission functions of the NPC were transferred to the National Transmission Corporation (TRANSCO), whose management, operation, and maintenance were later assumed by the respondent. To facilitate the maintenance of the transmission lines, the respondent initiated expropriation proceedings in 2014, deposited the amount equivalent to 100% of the Bureau of Internal Revenue (BIR) zonal value as required for the issuance of a writ of possession, and was subsequently placed in possession of the property. The petitioners, however, sought substantially higher just compensation, including accrued interest and rentals. After the parties failed to reach an amicable settlement, the Regional Trial Court (RTC), assisted by commissioners pursuant to the Rules of Court governing expropriation proceedings, granted the complaint and awarded just compensation amounting to ₱49,622,050.00, directing the respondent to pay the deficiency after deducting its initial deposit.

On appeal, the Court of Appeals (CA) affirmed the respondent's authority to expropriate the property but modified the RTC's ruling by deleting the additional award of ₱47,865,650.00 as just compensation. The CA held that because the property originated from a free patent, it was subject to the 60-meter legal easement of right-of-way in favor of the government under Section 112 of Commonwealth Act No. 141 (Public Land Act). Under this provision, the owner of the affected property is generally entitled only to compensation for the value of improvements situated within the easement. The CA further observed that the transmission lines had already been constructed in 1978, whereas the petitioners' predecessor-in-interest acquired title to the property only in 2012. Consequently, the petitioners could not claim actual loss arising from the existence of the transmission line because the easement had long been established before they acquired ownership. Moreover, the appellate court found no competent evidence showing the existence or value of improvements on the property at the time of the original taking in 1978, as the evidence presented referred only to improvements introduced during the filing of the expropriation case. For these reasons, the CA sustained the expropriation but deleted the RTC's award of additional just compensation.

ISSUE : WON petitioners are entitled to just compensation and correspondingly, the reckoning point for its computation.

HELD : The Supreme Court denied the petition and upheld the Court of Appeals' ruling that the petitioners were not entitled to just compensation for the portion of their property traversed by the Baloi-Agus 2 138kV Transmission Line (BATL). The Court first affirmed the respondent's authority to expropriate property, holding that while the power of eminent domain is an inherent attribute of State sovereignty, Congress may validly delegate its exercise to government agencies and quasi-public entities. Pursuant to Republic Act No. 9511, which granted the respondent its legislative franchise, the respondent was expressly authorized under Section 4 to exercise the power of eminent domain whenever reasonably necessary for the construction, expansion, operation, and maintenance of the national transmission system, subject to the constitutional and statutory requirements governing expropriation, including the payment of just compensation. This authority complements the respondent's functions under Republic Act No. 9136 (Electric Power Industry Reform Act of 2001), which transferred the transmission functions of the National Power Corporation (NPC) to the National Transmission Corporation (TRANSCO) and eventually to the respondent. Since the parties did not dispute the necessity of the expropriation or the public purpose it served, the only issue before the Court was whether the petitioners were entitled to just compensation.

The Court ruled that the reckoning point for determining just compensation was the date of the actual taking in 1978, when the NPC entered the property and constructed the transmission lines, and not the filing of the expropriation complaint in 2014. Citing Republic v. Vda. de Castellvi, National Transmission Corporation v. Oroville Development Corporation, National Power Corporation v. Vda. de Capin, National Power Corporation v. Manalastas, and Republic v. Heirs of Borbon, the Court reiterated that "taking" occurs when the government permanently enters private property under lawful authority for public use and substantially deprives the owner of its beneficial enjoyment. Applying these principles, the Court found that the BATL had occupied the property continuously since 1978, thereby constituting the actual taking contemplated under the law. Consequently, just compensation, if any, should be determined based on the property's condition and ownership at that time. The Court emphasized that just compensation is measured by the owner's loss rather than the government's gain, and therefore only the owner at the time of the taking is entitled to compensation.

The Court held that the petitioners were not entitled to just compensation because they and their predecessor-in-interest acquired ownership of the property only in 2012, or thirty-four years after the transmission line had already been constructed. At the time of the taking in 1978, ownership of the land remained with the government, as the petitioners' predecessor acquired the property only through a free patent issued decades later. The Court explained that an application for a free patent constitutes recognition that the land is public land, citing Yabut v. Alcantara, and that mere possession, even for several decades, does not automatically convert public land into private property. Moreover, the petitioners failed to prove ownership or lawful possession prior to 1978 and never questioned the NPC's occupation of the property or sought compensation through inverse condemnation, circumstances that further weakened their claim. The Court also stressed that the petitioners purchased or acquired the property with full knowledge that the transmission line had long existed, meaning they suffered no compensable injury from its installation.

The Court further ruled that the property remained subject to the 60-meter statutory right-of-way easement under Section 112 of Commonwealth Act No. 141 (Public Land Act), as amended by Presidential Decree No. 635, because it originated from a homestead or free patent. Since the transmission corridor occupied only 30 meters, it fell squarely within the statutory easement, under which the landowner may recover only damages for existing improvements and not the value of the land itself. The Court rejected the petitioners' argument that Republic Act No. 8974 and Republic Act No. 10752 (The Right-of-Way Act) had impliedly repealed Section 112, emphasizing that repeals by implication are disfavored and that Section 4 of R.A. No. 10752 expressly recognizes the continued applicability of Section 112 of C.A. No. 141 to lands acquired through free patents. The Court likewise found no factual basis for awarding damages for improvements because the records contained no competent evidence that improvements existed at the time of the taking in 1978. Instead, the evidence showed that most trees were planted only a few years before the filing of the complaint, indicating an attempt to increase the value of the claim.

Finally, the Court held that the ₱1,756,400.00 previously deposited by the respondent, representing 100% of the property's BIR zonal value, was mistakenly paid under the erroneous belief that the petitioners were legally entitled to just compensation. Applying the doctrine of solutio indebiti under Article 2154 of the Civil Code, which requires the return of money or property unduly delivered through mistake when the recipient has no legal right thereto, the Court ordered the petitioners to return the entire amount to the respondent. Accordingly, while the Court affirmed the respondent's authority to expropriate the property for public use, it held that the petitioners had no legal entitlement to compensation because they were not the owners at the time of the taking, the property remained subject to the statutory easement under Commonwealth Act No. 141, and no compensable improvements existing in 1978 had been proven. Consequently, the petition was denied, the Court of Appeals' decision was affirmed with modification, and the petitioners were ordered to refund the amount previously deposited by the respondent.

CASE DIGEST : CORAZON C. REYES v. OFFICE OF DEPUTY OMBUDSMAN FOR LUZON GR No. 230704, Mar 15, 2023 GAERLAN

FACTS : The Office of the Ombudsman filed criminal and administrative complaints against the members of the Bids and Awards Committee (BAC) of the Municipality of Palauig, Zambales, including petitioner Corazon C. Reyes, based on the findings of a COA post-audit of the municipality's 2006 procurement of office supplies. The COA found that the municipality procured supplies worth ₱804,678.00 through shopping/canvassing, allegedly without an Annual Procurement Plan (APP), using a procurement method not authorized by law, and favoring Tabing Daan Mart, whose owner was petitioner's sister. The Ombudsman alleged that the BAC violated Section 3(e) and (i) of R.A. No. 3019 (Anti-Graft and Corrupt Practices Act) and committed administrative offenses, asserting that Tabing Daan Mart should have been disqualified under Section 47 of the Implementing Rules and Regulations (IRR) of R.A. No. 9184 (Government Procurement Reform Act) because of its relationship with a BAC member.

The BAC members denied the allegations, claiming that the municipality had an approved Annual Procurement Plan (APP) authorizing shopping as an alternative procurement method and that Tabing Daan Mart was selected because it offered the lowest and most advantageous prices, benefiting the government. They further argued that the disclosure of relationship under Section 47 of the IRR of R.A. No. 9184 applies only to competitive bidding and not to shopping. Nevertheless, the Ombudsman found probable cause to indict the BAC members for violating Section 3(e) of R.A. No. 3019, holding that they acted with manifest partiality and evident bad faith by awarding the contracts to a supplier owned by the petitioner's sister despite the prohibition against relatives within the third civil degree participating in procurement. However, it dismissed the charge under Section 3(i) of R.A. No. 3019 for lack of evidence that respondents had any financial interest in or personally benefited from the transactions. Petitioner's motion for reconsideration was subsequently denied.

ISSUE : WON Ombudsman gravely abused its discretion in finding probable cause against petitioner for violation of Section 3(e) of R.A. No. 3019

HELD : The Supreme Court granted the petition and held that the Office of the Ombudsman committed grave abuse of discretion in finding probable cause against the petitioner for violation of Section 3(e) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act). While the Court reiterated that the Ombudsman enjoys broad discretion in determining probable cause pursuant to the 1987 Constitution and Republic Act No. 6770 (The Ombudsman Act of 1989), such discretion remains subject to judicial review through a petition for certiorari when exercised in a capricious or arbitrary manner amounting to grave abuse of discretion. Upon review, the Court found that the Ombudsman erred in concluding that the petitioner and the other members of the Bids and Awards Committee (BAC) violated Section 47 of the Implementing Rules and Regulations (IRR) of Republic Act No. 9184 (Government Procurement Reform Act) by failing to require the supplier to disclose its relationship with a BAC member. The Court clarified that although Section 47 of the IRR was already in force in 2006, its disclosure requirement applies only to procurements conducted through competitive public bidding and not to Shopping, which is an authorized alternative mode of procurement under Sections 48 and 52 of R.A. No. 9184. After examining the provisions of the law and its 2003 IRR, the Court found no legal basis requiring bidders in Shopping procurements to submit a sworn affidavit disclosing relationships with BAC members. It emphasized that Shopping is governed by its own statutory requirements, including procurement within an approved Annual Procurement Plan (APP) under Section 7 of R.A. No. 9184, prior approval of the Head of the Procuring Entity, observance of procurement thresholds, obtaining at least three price quotations from qualified suppliers, compliance with posting requirements under Sections 21 and 54 of the IRR, and the prohibition against splitting contracts. The records showed that the Municipality substantially complied with these requirements by having an approved APP, obtaining the mayor's approval, canvassing fifteen suppliers, and selecting the supplier offering the lowest and most advantageous price. Although the BAC admittedly failed to comply with the posting requirements under Section 54.2 of the IRR, the Court agreed with the Ombudsman that such lapse constituted, at most, an administrative infraction and did not establish criminal liability.

The Court further ruled that the essential elements of Section 3(e) of Republic Act No. 3019 were not established. Citing Sistoza v. Desierto, Sabaldan, Jr. v. Ombudsman, Duque v. Ombudsman, and Martel v. People, it reiterated that violations of procurement laws or procurement irregularities do not automatically constitute a violation of the Anti-Graft and Corrupt Practices Act. To sustain criminal liability, the prosecution must prove not only a breach of procurement rules but also that the public officer acted with manifest partiality, evident bad faith, or gross inexcusable negligence, and that such acts caused undue injury to the government or conferred unwarranted benefits, advantage, or preference upon a private party. The Court found these elements absent. It held that the BAC lawfully resorted to Shopping, complied with the applicable procurement requirements, obtained quotations from fifteen suppliers, and awarded the procurement to Tabing Daan Mart because it offered the lowest price, possessed sufficient inventory, and was willing to extend credit to the municipality. Since the disclosure requirement under Section 47 of the IRR of R.A. No. 9184 did not apply to Shopping, the supplier's familial relationship with the petitioner did not automatically disqualify it nor establish favoritism or bad faith. Accordingly, the Court found no evidence of manifest partiality, evident bad faith, gross negligence, undue injury to the government, or unwarranted benefit to the supplier. Consequently, the Ombudsman's finding of probable cause was declared tainted with grave abuse of discretion, and the criminal complaint for violation of Section 3(e) of Republic Act No. 3019 was dismissed for lack of probable cause.