Case No.

85
FIRST DIVISION
[G.R. No. 106804. August 12, 2004.]
NATIONAL POWER CORPORATION, petitioner, vs. COURT OF APPEALS and
ANTONINO POBRE, respondents.
CARPIO, J p:

TOPIC: EMINENT DOMAIN – GOVERNMENT WITHDRAWAL

DOCTRINES/PRINCIPLES:
 The Court has ruled 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. This principle is in accord with the constitutional mandate that private property shall not
be taken for public use without just compensation.
 The lesson in this case must not be lost on entities with eminent domain authority. Such entities
cannot trifle with a citizen’s property rights. The power of eminent domain is an extraordinary power
they must wield with circumspection and utmost regard for procedural requirements. The Court held
NPC liable for exemplary damages of P100,000. Exemplary damages or corrective damages are
imposed, by way of example or correction for the public good, in addition to the moral, temperate,
liquidated or compensatory damages.
 Eminent domain is the authority and right of the state, as sovereign, to take private property for public
use upon observance of due process of law and payment of just compensation. The power of eminent
domain may be validly delegated to the local governments, other public entities and public utilities such
as NPC.
 Expropriation is the procedure for enforcing the right of eminent domain. "Eminent Domain" was the
former title of Rule 67 of the 1964 Rules of Court. In the 1997 Rules of Civil Procedure, which took
effect on 1 July 1997, the prescribed method of expropriation is still found in Rule 67, but its title is now
"Expropriation."
 Ordinarily, the dismissal of the expropriation case restores possession of the expropriated land
to the landowner. However, when possession of the land cannot be turned over to the landowner
because it is neither convenient nor feasible anymore to do so, the only remedy available to the
aggrieved landowner is to demand payment of just compensation.
 Section 1, Rule 17 of the 1964 Rules of Court provided the exception to the general rule that the
dismissal of the complaint is addressed to the sound discretion of the court. For as long as all of
the elements of Section 1, Rule 17 were present the dismissal of the complaint rested exclusively on
the plaintiff’s will. The defending party and even the courts were powerless to prevent the dismissal.
The courts could only accept and record the dismissal.
 Section 1, Rule 17 of the 1964 Rules of Court was not intended to supplement Rule 67 of the same
Rules. Section 1, Rule 17 of the 1964 Rules of Court, provided that:
SECTION 1. Dismissal by the plaintiff. — An action may be dismissed by the plaintiff without order of
court by filing a notice of dismissal at any time before service of the answer or of a motion for summary
judgment. Unless otherwise stated in the notice, the dismissal is without prejudice, except that a notice
operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in a
competent court an action based on or including the same claim. A class suit shall not be dismissed or
compromised without approval of the court.
 Section 3 of Rule 67 required the defendant to file a single motion to dismiss where he should present
all of his objections and defenses to the taking of his property for the purpose specified in the
complaint. In short, in expropriation cases under Section 3 of Rule 67, the motion to dismiss took the
place of the answer.
 The exceptional right that Section 1, Rule 17 of the 1964 Rules of Court conferred on the plaintiff
must be understood to have applied only to other civil actions. The 1997 Rules of Civil
Procedure abrogated this exceptional right.

 In expropriation cases, there is no such thing as the plaintiff’s matter of right to dismiss the
complaint precisely because the landowner may have already suffered damages at the start of
the taking. The plaintiff’s right in expropriation cases to dismiss the complaint has always been
subject to court approval and to certain conditions.
 The power of eminent domain is subject to limitations. A landowner cannot be deprived of his right over
his land until expropriation proceedings are instituted in court.
 Case No. 85
The court must then see to it that
1. the taking is for public use;
2. there is payment of just compensation; and
3. there is due process of law.
If the propriety of the taking of private property through eminent domain is subject to judicial scrutiny,
the dismissal of the complaint must also pass judicial inquiry because private rights may have
suffered in the meantime.
 The dismissal, withdrawal or abandonment of the expropriation case cannot be made arbitrarily.
If it appears to the court that the expropriation is not for some public use, then it becomes the
duty of the court to dismiss the action. However, when the defendant claims that his land
suffered damage because of the expropriation, the dismissal of the action should not foreclose
the defendant’s right to have his damages ascertained either in the same case or in a separate
action.

FACTS:
 Petitioner National Power Corporation ("NPC") is a public corporation created to generate geothermal,
hydroelectric, nuclear and other power and to transmit electric power nationwide. NPC is authorized
by law to acquire property and exercise the right of eminent domain.
 Private respondent Antonino Pobre ("Pobre") is the owner of a 68,969 square-meter land ("Property")
located in Barangay Bano, Municipality of Tiwi, Albay. The Property is covered by TCT No. 4067 and
Subdivision Plan 11-9709.
 In 1963, Pobre began developing the Property as a resort-subdivision. On 4 August 1965, the
Commission on Volcanology certified that thermal mineral water and steam were present beneath the
Property. The Commission on Volcanology found the thermal mineral water and steam suitable for
domestic use and potentially for commercial or industrial use.
 NPC then became involved with Pobre’s Property in three instances.
1. Pobre leased to NPC for one year eleven lots from the approved subdivision plan.
2. The first time that NPC filed its expropriation case against Pobre to acquire an 8,311.60 square-
meter portion of the Property. On 23 October 1979, the trial court ordered the expropriation of the
lots upon NPC’s payment of P25 per square meter or a total amount of P207,790. NPC began
drilling operations and construction of steam wells. While this first expropriation case was pending,
NPC dumped waste materials beyond the site agreed upon by NPC with Pobre. The dumping of
waste materials altered the topography of some portions of the Property. NPC did not act on
Pobre’s complaints and NPC continued with its dumping.
3. NPC filed its second expropriation case against Pobre to acquire an additional 5,554 square meters
of the Property. This is the subject of this petition. NPC needed the lot for the construction and
maintenance of Naglagbong Well Site F-20, pursuant to Proclamation No. 739 and Republic Act No.
5092.
 NPC immediately deposited P5,546.36 with the Philippine National Bank. The deposit represented 10%
of the total market value of the lots covered by the second expropriation. On 6 September 1979, NPC
entered the 5,554 square-meter lot upon the trial court’s issuance of a writ of possession to NPC.

ISSUES:
Whether the Court of Appeals erred in affirming the decision of the trial court that NPC was in bad
faith and it employed dilatory tactics to prolong this case and imposed legal interest.

RULING:
The Court DENIED the petition for lack of merit. The appealed Decision of the Court of Appeals
dated 30 March 1992 in CA-G.R. CV No. 16930 was AFFIRMED with MODIFICATION. National Power
Corporation was ordered to pay Antonino Pobre P3,448,450 as just compensation for the 68,969 square-
meter Property at P50 per square meter. National Power Corporation was directed to pay legal interest at
6% per annum on the amount adjudged from 6 September 1979 until fully paid. Upon National Power
Corporation’s payment of the full amount, Antonino Pobre was ordered to execute a Deed of Conveyance
of the Property in National Power Corporation’s favor. National Power Corporation was further ordered to
pay temperate and exemplary damages of P50,000 and P100,000, respectively. No costs.

 It is not Section 1, Rule 17 of the 1964 Rules of Court that is applicable to this case but Rule 67 of the
same Rules, as well as jurisprudence on expropriation cases. Rule 17 referred to dismissal of civil
actions in general while Rule 67 specifically governed eminent domain cases.
 Case No. 85

 Rules of fair play, justice and due process dictate that parties cannot raise an issue for the first time on
appeal.

 NPC’s theory that the dismissal of its complaint carried with it the dismissal of Pobre’s claim for
damages is baseless. There is nothing in Rule 67 of the 1964 Rules of Court that provided for the
dismissal of the defendant’s claim for damages, upon the dismissal of the expropriation case.

 Case law holds that in the event of dismissal of the expropriation case, the claim for damages
may be made either in a separate or in the same action, for all damages occasioned by the
institution of the expropriation case. The dismissal of the complaint can be made under certain
conditions, such as the reservation of the defendant’s right to recover damages either in the same or in
another action. 36 The trial court in this case reserved Pobre’s right to prove his claim in the same
case, a reservation that has become final due to NPC’s own fault.

 The trial and appellate courts held that even before the first expropriation case, Pobre had already
established his Property as a resort-subdivision. NPC had wrought so much damage to the Property
that NPC had made the Property uninhabitable as a resort/subdivision. NPC’s facilities such as steam
wells, nag wells, power plants, power lines, and canals had hemmed in Pobre’s Property. NPC’s
operations of its geothermal project also posed a risk to lives and properties.

 The Court upheld the factual findings of the trial and appellate courts. Questions of facts are beyond
the pale of Rule 45 of the Rules of Court as a petition for review may only raise questions of law.
Moreover, factual findings of the trial court, particularly when affirmed by the Court of Appeals,
are generally binding on this Court.

 In National Housing Authority v. Heirs of Isidro Guivelondo, the Court pointed out that a government
agency could not initiate expropriation proceedings, seize a person’s property, and then just
decide not to proceed with the expropriation. Such a complete turn-around is arbitrary and
capricious and was condemned by the Court in the strongest possible terms. NHA was held liable to
the landowners for the prejudice that they had suffered.

 In this case, NPC appropriated Pobre’s Property without resort to expropriation proceedings. NPC
dismissed its own complaint for the second expropriation. At no point did NPC institute expropriation
proceedings for the lots outside the 5,554 square-meter portion subject of the second expropriation.
The only issues that the trial court had to settle were the amount of just compensation and damages
that NPC had to pay Pobre.

 This case ceased to be an action for expropriation when NPC dismissed its complaint for expropriation.
Since this case has been reduced to a simple case of recovery of damages, the provisions of the Rules
of Court on the ascertainment of the just compensation to be paid were no longer applicable. A trial
before commissioners, for instance, was dispensable.

 The Court held that the usual procedure in the determination of just compensation is waived
when the government itself initially violates procedural requirements. NPC’s taking of Pobre’s
property without filing the appropriate expropriation proceedings and paying him just compensation is a
transgression of procedural due process. From the beginning, NPC should have initiated expropriation
proceedings for Pobre’s entire 68,969 square-meter Property. NPC did not. Instead, NPC embarked on
a piecemeal expropriation of the Property. Even as the second expropriation case was still pending,
NPC was well aware of the damage that it had unleashed on the entire Property.

 The landowner is entitled to legal interest on the price of the land from the time of the taking up to the
time of full payment by the government. In accord with jurisprudence, we fix the legal interest at six per
cent (6%) per annum. The legal interest should accrue from 6 September 1979, the date when the trial
court issued the writ of possession to NPC, up to the time that NPC fully pays Pobre.

 NPC’s abuse of its eminent domain authority is appalling. However, the Court cannot award moral
damages because Pobre did not assert his right to it as well as the attorney’s fees in Pobre’s favor
since he did not appeal from the decision of the Court of Appeals denying recovery of attorney’s fees.