NPC v. Ibrahim, et al.

, - Eminent Domain
G.R. No. 168732, June 29, 2007
Facts:
Ibrahim owns a parcel of land located in Lanao del Norte.
In 1978, NAPOCOR took possession of the sub-terrain area of the land and
constructed underground tunnels on the said property.
The tunnels were apparently being used by NAPOCOR in siphoning the water of
Lake Lanao and in the operation of NAPOCORs Agus projects.
In 1991, Maruhom (one of the co-heirs of Ibrahim) requested Marawi City Water
District for a permit to construct or install a motorized deep well on the parcel of
land but it was rejected on the grounds that the construction would cause
danger to lives and property by reason of the presence of the underground
tunnels.
Maruhom demanded NAPOCOR to pay damages and to vacate the sub-terrain
portion of the land.
Issue: WON Ibrahim is the rightful owner of the sub-terrain area of the land.
If yes, are they entitled to the payment of just compensation.
Held: YES. The sub-terrain portion of the property belongs to Ibrahim.
The Supreme Court cited Article 437 of the Civil Code which provides that: The
owner of a parcel of land is the owner of its surface and of everything under it,
and he can construct thereon any works or make any plantations and
excavations which he may deem proper, without detriment to servitudes and
subject to special laws and ordinances. xxx
Hence, the ownership of land extends to the surface as well as to the subsoil
under it. Therefore, Ibrahim owns the property as well as the sub-terrain area of
the land where the underground tunnels were constructed.
On the issue of just compensation, the Supreme Court also said that Ibrahim
should be paid a just compensation.
Ibrahim could have dug upon their property and built motorized deep wells but
was prevented from doing so by the authorities because of the construction of
the tunnels underneath the surface of the land.
Ibrahim still had a legal interest in the sub-terrain portion insofar as they could
have excavated the same for the construction of the deep wells. It has been
shown that the underground tunnels have deprived the plaintiffs of the lawful
use of the land and considerably reduced its value.
It was held that: If the government takes property without expropriation and
devotes the property to public use, after many years, the property owner may
demand payment of just compensation in the event restoration of possession is
neither convenient nor feasible. This is in accordance with the principle that

persons shall not be deprived of their property except by competent authority

and for public use and always upon payment of just compensation.
The NPC constructed underground tunnels on the property of the respondents
without their knowledge and consent and without any expropriation proceeding.
It contended that it constructed an easement on the property. Was there taking
of the property considering that the owners were deprived of their beneficial use
and enjoyment of the same, hence, entitled to just compensation?
Yes. The manner in which the easement was created by the NPC, violated the
due process rights of the owners as it was without notice and indemnity to them
and did not go through proper expropriation proceedings. NPC could have, at any
time, validly exercised the power of eminent domain to acquire the easement
over the property as this power encompasses not only the taking or
appropriation of title to and possession of the expropriated property but likewise
covers even the imposition of a mere burden upon the owner of the condemned
property. (Rep. v. PLDT, 136 Phil. 20 (1969)). Significantly, though, landowners
cannot be deprived of their right over their land until expropriation proceedings
are instituted in court. The court must then see to it that the taking is for pubic
use, that there is payment of just compensation and that there is due process of
law.
In disregarding this procedure and failing to recognize the owners ownership
of the sub-terrain portion, NPC took a risk and exposed itself to greater liability
with the passage of time. It must be emphasized that the acquisition of the
easement is not without expense. The underground tunnels imposed limitations
on the owners use of the property for an indefinite period and deprived them of
its ordinary use. The owners are clearly entitled to the payment of just
compensation. Notwithstanding the fact that NPC only occupied the sub-terrain
portion, it is liable to pay not merely an easement fee but rather the full
compensation for the land. This is so because, the nature of the easement
practically deprived the owners of its normal beneficial use. The owners, as the
owners of the property thus expropriated, are entitled to a just compensation
which should be neither more nor less, whenever it is possible to make the
assessment, than the money equivalent of said property. (NPC v. Ibrahim, et al.,
G.R. No. 168732, June 29, 2007).
Valuation of the property.
NPC contended that if ever it is liable, it should be made to pay the value of the
land from the time it constructed the tunnels. Is the contention correct? Why?
No. To it to use the date it constructed the tunnels as the date of valuation would
be grossly unfair. First, it did not enter the land under warrant or color of legal
authority or with intent to expropriate the same. It did not notify the owners and
wrongly assumed that it had the right to dig the tunnels under their property.
Secondly, the improvements introduced in no way contributed to an increase in
the value of the land. The valuation should be based at the time of the discovery
of the construction of the underground tunnels. (NPC v. Ibrahim, et al., G.R. No.

168732, June 29, 2007).

It is undisputed that there is a legal easement of right-of-way in favor of the
Republic. Andayas transfer certificates of title contained the reservation that the
lands covered thereby are subject to the provisions of the Land Registration Act
and the Public Land Act. Section 112 of the Public Land Act provides that land
granted by patent shall be subject to a right-of-way not exceeding 60 meters in
width for public highways, irrigation ditches, aqueducts, and other similar works
of the government or any public enterprise, free of charge, except only for the
value of the improvements existing thereon that may be affected. In view of this,
the Court of Appeals declared that all Republic needs to do is to enforce such
right without having to initiate expropriation proceedings and without having to
pay any just compensation. Hence, the Republic may appropriate the 701 square
meters necessary for the construction of the floodwalls without paying for it. Is
the Republic liable for just compensation if in enforcing the legal easement of
right-of-way on a property, the remaining area would be rendered unusable and
uninhabitable?
Yes, it is liable to pay consequential damages if in enforcing the legal easement
on Andayas property, the remaining area would be rendered unusable and
uninhabitable. Taking, in the exercise of the power of eminent domain, occurs
not only when the government actually deprives or dispossess the property
owner of his property or of its ordinary use, but also when there is a practical
destruction or material impairment of the value of his property. Using this
standard, there was undoubtedly a taking of the remaining area of Andayas
property. True, no burden was imposed thereon and Andaya still retained title
and possession of the property. But, the nature and the effect of the floodwalls
would deprive Andaya of the normal use of the remaining areas. It would
prevent ingress and egress to the property and turn it into a catch basin for the
floodwaters coming from the Agusan River.
For this reason, Andaya is entitled to payment of just compensation, which
must be neither more nor less than the monetary equivalent of the land. One of
the basic principles enshrined in our Constitution is that no person shall be
deprived of his private property without due process of law; and in expropriation
cases, an essential element of due process is that there must be just
compensation whenever private property is taken for public use. Noteworthy,
Section 9, Article III of our Constitution mandates that private property shall not
be taken for public use without just compensation. (Rep. v. Lim, G.R. No.
161656, June 29, 2005, 462 SCRA 265; Rep. v. Andaya, G.R. No. 160656, June
15, 2007).