National Power Corporation vs. Jocson

Under Presidential Decree No. 42, the provisional value that must be deposited to obtain a writ of possession in eminent domain is the assessed value of the property for taxation purposes as stated in the tax declaration; the court has no discretion to fix a different amount. Once the deposit is made, the condemnor is entitled as a matter of right to immediate possession, and the court cannot condition the issuance of the writ on the landowner’s acceptance of the deposit as final just compensation nor treat the provisional value as a conclusive settlement of compensation without observing the commissioner‑based procedure under Rule 67.

The National Power Corporation (NAPOCOR) needed a right‑of‑way easement over portions of several parcels of land in Bacolod City for the Bacolod‑Tomonton Transmission Line, part of its Negros‑Panay Interconnection Project. Despite repeated negotiations, the landowners and NAPOCOR failed to reach an agreement. NAPOCOR thereupon filed seven separate complaints for eminent domain in the Regional Trial Court of Bacolod City, uniformly praying for the fixing of provisional value, issuance of a writ of possession upon deposit, and eventual determination of just compensation through commissioners.

Nature: NAPOCOR, a government‑owned and controlled corporation authorized to exercise eminent domain, sought to acquire a right‑of‑way easement over portions of seven parcels of land in Bacolod City for its Negros‑Panay Interconnection Project (Bacolod‑Tomonton Transmission Line). The complaints uniformly alleged urgent public necessity, prior unsuccessful negotiations, and a prayer for the fixing of provisional value, issuance of a writ of possession upon deposit, and appointment of commissioners for final just compensation.

Initial Provisional Valuations: In the 25 June 1990 Order, respondent Judge fixed the provisional values based on two factors: the market value of the properties as reflected in tax declarations and notices of assessment, and what he described as the “daily opportunity profit” NAPOCOR would allegedly derive. The resulting figures far exceeded the assessed values. For instance, a 3,000‑square‑meter property with a market value of P668,700 was given a provisional value of P2,674,800; a 21,000‑square‑meter lot with a market value of P1,200,000 was valued at P4,800,000. The assessed values shown in the tax declarations ranged from P18,000 to P861,380—substantially lower. NAPOCOR deposited the total sum of P23,180,828 with the Philippine National Bank as ordered.

Ex‑Parte Increase of Provisional Values: Defendants Jesus Gonzaga, et al. (Civil Case No. 5938) and Luis Gonzaga, et al. (Civil Case No. 5939) filed motions for reconsideration. The motion in Civil Case No. 5938 lacked a notice of hearing. On 12 July 1990—one day after the motion in Civil Case No. 5938 was filed—respondent Judge issued an Order increasing the provisional values for the Gonzaga properties, citing post‑hoc awareness of subdivision character, proximity to memorial parks, golf courses, and commercial complexes. The increases were dramatic: a 7,050‑square‑meter lot from P180,000 to P6,000,000; another from P2,674,800 to P3,000,000; and the 23,400‑square‑meter Gonzaga property from P3,029,748 to P12,600,000. The Order directed deposit of the differential within 48 hours and held the issuance of the writ of possession in abeyance pending compliance. NAPOCOR deposited the additional sum of P22,866,860.

Mandatory Acceptance and Final‑Payment Orders: On 16 July 1990, respondent Judge mandatorily directed all defendants to state in writing within 24 hours whether they accepted and would withdraw the deposited amounts “as final and full satisfaction of the value of their respective property affected by expropriation,” and declared that the writ of possession would issue only after such acceptance and receipt. On 18 July 1990, relying on manifestations filed by several defendants, respondent Judge ordered NAPOCOR to release the specified amounts to the defendants within 24 hours as full payment for the expropriated property and reiterated that the writ of possession would issue only after receipt. The Order effectively treated the so‑called provisional values as final just compensation even for two cases where no manifestation had been filed.

• Grave Abuse of Discretion in Fixing Provisional Value: Petitioner argued that respondent Judge fixed provisional values at excessive and unconscionable amounts based on market value and imaginary opportunity profit, in complete disregard of P.D. No. 42, which mandates that the amount to be deposited is the assessed value of the property for taxation purposes only. The assessed values in the tax declarations were a fraction of the amounts ordered.

• Denial of Due Process in Increasing Values: Petitioner maintained that the 12 July 1990 Order increasing the provisional values was issued without hearing on the motions for reconsideration, in violation of procedural due process. The motion in Civil Case No. 5938 lacked even a notice of hearing, rendering it a mere scrap of paper.

• Unlawful Withholding of Writ of Possession: Petitioner contended that despite having deposited both the original and increased amounts, respondent Judge unlawfully withheld the writ of possession. Under Section 2, Rule 67 and P.D. No. 42, the issuance of the writ upon deposit is a ministerial duty; the judge had no discretion to condition it on defendants’ acceptance of the money.

• Abdication of Judicial Function: Petitioner asserted that the 16 July 1990 Order surrendered the judicial prerogative to determine just compensation to the defendants, allowing them to decide whether the deposit constituted final and full satisfaction. This contravened the Constitution and the doctrine in Export Processing Zone Authority vs. Dulay.

• Premature Termination and Violation of Rule 67 Procedure: Petitioner argued that by treating the provisional values as final and directing payment, respondent Judge effectively terminated the cases without following the mandatory procedure under Sections 3 to 8 of Rule 67—particularly the appointment of commissioners, their report, and the opportunity for parties to object—thereby depriving NAPOCOR of the right to contest the valuation.

• Discretion to Fix Provisional Value: Respondent Mayo Lacson argued that the trial court possessed discretion to determine the provisional value and that the procedure under Rule 67 may be abbreviated as long as the rights of the parties are adequately protected, citing City Government of Toledo vs. Fernandos, where the Supreme Court sustained a judgment based on what transpired at a pre‑trial conference.

• Support for Trial Court Orders: The other private respondents generally supported the actions of respondent Judge, asserting that the valuations were justified by the characteristics of the property and that the Orders were within the bounds of judicial discretion. Respondent Rosario P. Mendoza, while agreeing that commissioners should be appointed to determine just compensation, did not fully endorse the shortcut taken by the judge but nonetheless sought dismissal of the petition.

• Provisional Value under P.D. No. 42: Whether respondent Judge acted with grave abuse of discretion in fixing the provisional values of the expropriated properties based on market value and alleged opportunity profit, instead of the assessed value for taxation purposes as mandated by P.D. No. 42.

• Due Process in Amending Provisional Value: Whether the 12 July 1990 Order increasing the provisional values without hearing the motions for reconsideration violated the petitioner’s right to due process.

• Writ of Possession: Whether respondent Judge unlawfully withheld the issuance of the writ of possession despite the petitioner’s deposit of the amounts fixed, and whether he could condition the writ on the defendants’ acceptance of the deposit as final just compensation.

• Judicial Abdication: Whether the Orders of 16 July and 18 July 1990 constituted an impermissible delegation of the judicial function of determining just compensation to the defendants.

• Applicability of Toledo City Doctrine: Whether the abbreviated procedure sanctioned in City Government of Toledo vs. Fernandos justified the respondent Judge’s actions.

• Provisional Value under P.D. No. 42: Grave abuse of discretion was committed. P.D. No. 42 expressly repealed the inconsistent provisions of Section 2, Rule 67 insofar as the determination of the provisional value, the form of payment, and the depository are concerned. It removed the court’s discretion entirely: the deposit must be “an amount equivalent to the assessed value of the property for purposes of taxation.” The assessed value is the figure appearing in the tax declaration, not a judicially divined market value or speculative opportunity profit. Respondent Judge either deliberately disregarded P.D. No. 42 or was entirely unaware of its existence and the jurisprudence applying it.

• Due Process in Amending Provisional Value: The increase was void. The motion for reconsideration in Civil Case No. 5938 contained no notice of hearing, rendering it a mere scrap of paper that presented no question for the court’s consideration; the clerk of court had no right to receive it. More fundamentally, once a trial court fixes the amount of the deposit and the condemnor makes that deposit, the court loses plenary control over the order and may not annul, amend, or modify it in matters of substance pending the condemnation proceedings, as held in Manila Railroad Company vs. Paredes. A contrary rule would defeat the summary purpose of the deposit mechanism.

• Writ of Possession: The refusal to issue the writ despite full deposit was unlawful. Under both Section 2, Rule 67 and P.D. No. 42, the condemnor who deposits the required amount is entitled as a matter of right to be placed in possession immediately; the court’s corresponding duty to order the sheriff to do so is ministerial. Respondent Judge had no authority to condition the writ on the defendants’ prior acceptance of the deposit as final satisfaction, much less to hold it in abeyance after compliance with the deposit requirement.

• Judicial Abdication: The 16 July and 18 July Orders impermissibly delegated the judicial determination of just compensation to the defendants. The determination of just compensation in eminent domain is an exclusively judicial function, as definitively ruled in Export Processing Zone Authority vs. Dulay. To allow the property owners to decide whether the deposit constitutes full and final payment effectively subordinates the court’s judgment to the will of the defendants and renders the court inutile in a matter reserved to it by the Constitution.

• Applicability of Toledo City Doctrine: City Government of Toledo vs. Fernandos did not apply. In that case, a pre‑trial conference was conducted during which the condemnor submitted to judicial discretion on valuation, the landowners accepted a per‑square‑meter price, and the parties presented documentary exhibits; the abbreviated judgment thus rested on the parties’ agreement. Here, no pre‑trial was held, the proceedings had not progressed beyond the provisional‑value stage, and no agreement on just compensation existed. Respondent Judge concocted a procedure of his own design in violation of Rule 67.

• P.D. No. 42 Deposit Rule — In eminent domain, the provisional value that must be deposited to obtain a writ of possession is the assessed value of the property for taxation purposes as shown in the tax declaration. P.D. No. 42 repealed the inconsistent portion of Section 2, Rule 67 that granted the court discretion to fix a different amount. No hearing is required for the fixing of this amount; only notice to the defendant is necessary. The court applied this doctrine to strike down the excessive provisional values fixed by respondent Judge.

• Irrevocability of Provisional Deposit Order — Once a court fixes the amount of the deposit in an eminent domain proceeding and the condemnor makes the deposit, the court loses plenary control over that order and cannot annul, amend, or modify it in matters of substance pending the condemnation proceedings. Any contrary ruling would defeat the summary nature of the deposit mechanism and delay the peaceable possession of the property. The Court relied on Manila Railroad Company vs. Paredes to invalidate the ex‑parte increase of the provisional values.

• Judicial Determination of Just Compensation — The determination of just compensation in eminent domain is a judicial function that cannot be delegated to the property owner, the legislature, or the executive. Any method that makes the owner’s acceptance the final determinant of compensation is an unconstitutional encroachment on judicial prerogative. The Court applied Export Processing Zone Authority vs. Dulay to nullify the Order requiring defendants to accept the deposit as final satisfaction.

• Two‑Stage Nature of Eminent Domain — An eminent domain action has two distinct phases: (1) the determination of the authority to expropriate and the propriety of its exercise, culminating in an order of condemnation, and (2) the determination of just compensation through the appointment of commissioners under Rule 67, Sections 5 to 8. The trial court cannot collapse the two stages into a single shortcut procedure that deprives the condemnor of its right to contest valuation.

• Motion Without Notice of Hearing — A motion that does not contain a notice of hearing is a mere scrap of paper; it presents no question that merits the court’s attention, and the clerk of court has no right to receive it. The Court applied this rule to the defective motion for reconsideration in Civil Case No. 5938.

• “P.D. No. 42, however, effectively removes the discretion of the court in determining the provisional value. What is to be deposited is an amount equivalent to the assessed value for taxation purpose. No hearing is required for that purpose. All that is needed is notice to the owner of the property sought to be condemned.” — The central holding defining the mandatory nature of the deposit under P.D. No. 42.

• “After having fixed these provisional values, albeit erroneously, and upon deposit by petitioner of the said amounts, respondent Judge lost, as was held in Manila Railroad Company vs. Paredes, ‘plenary control over the order fixing the amount of the deposit, and has no power to annul, amend or modify it in matters of substance pending the course of the condemnation proceedings.’” — The irrevoca­bility doctrine that prohibited the ex‑parte increase.

• “The determination of just compensation in eminent domain cases is a judicial function; … it would be far more objectionable and impermissible for respondent Judge to grant the defendants in an eminent domain case such power and authority.” — The core of the judicial abdication ruling, echoing Export Processing Zone Authority vs. Dulay.

• “He should administer his office with a due regard to the integrity of the system of the law itself, remembering that he is not a depositary of arbitrary power, but a judge under the sanction of law.” — Canon 18 of the Canons of Judicial Ethics, invoked to admonish the respondent Judge.

• _Manila Railroad Company, et al. vs. Paredes, et al., 31 Phil. 118 (1915) — Controlling precedent; held that the statute’s summary deposit procedure is intended to avoid delay, and that once the court fixes the deposit and it is made, the court loses power to amend the order substantively. Followed to nullify the 12 July 1990 increase.

• _Export Processing Zone Authority vs. Dulay, et al., 149 SCRA 305 (1987) — Controlling precedent; declared unconstitutional the legislative prescription of just compensation formulas and affirmed that the determination is a strictly judicial function. Applied to strike down the delegation to defendants to accept the deposit as final.

• _Municipality of Biñan vs. Hon. Jose Mar Garcia, et al., 180 SCRA 576 (1989) — Cited to explain the two‑stage nature of eminent domain proceedings and the finality of each stage’s order, providing the procedural framework.

• _City Government of Toledo vs. Fernandos, et al., 160 SCRA 285 (1988) — Distinguished; an abbreviated procedure was upheld only because a pre‑trial conference was held and the parties agreed to submit to judicial determination of just compensation. Not applicable where no pre‑trial was conducted and no agreement existed.

• _Haguisan vs. Emilia, et al., 131 SCRA 517 — Cited in support of the rule that the assessed value under P.D. No. 42 is the amount to be deposited.

• _Bank of the Philippine Islands vs. Far East Molasses, Corp., 198 SCRA 689 (1991) — Cited for the rule that a motion without notice of hearing is a mere scrap of paper.

• Presidential Decree No. 42 — The decree provides that upon filing of the complaint or at any time thereafter, and after due notice to the defendant, the plaintiff shall have the right to take possession of the real property if it deposits with the Philippine National Bank “an amount equivalent to the assessed value of the property for purposes of taxation.” It repealed the inconsistent provisions of Rule 67 concerning the determination of the provisional value, the form of payment, and the depository. The Court applied this provision to hold that respondent Judge had no discretion to fix a provisional value higher than the assessed value.

• Rule 67, Section 2, Rules of Court — Pre‑P.D. No. 42 provision granting the court discretion to fix the provisional value and requiring the sheriff to place the plaintiff in possession after deposit. The Court read this section in light of P.D. No. 42, retaining the ministerial duty to issue the writ upon deposit while recognizing the repeal of the discretionary valuation aspect.

• Rule 67, Sections 3‑8, Rules of Court — The procedural framework for the second stage of expropriation: ruling on defenses, order of condemnation, appointment of commissioners, their report, period for objections, and judgment. Respondent Judge’s orders bypassed this entire scheme, which the Court held he was duty‑bound to follow.

• Canon 18, Canons of Judicial Ethics — Invoked to remind respondent Judge that a judge’s duty is to apply the general law to particular instances, not to impose personal notions of substantial justice in disregard of binding law.

Narvasa, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Griño-Aquino, Medialdea, Regalado, Romero, and Nocon, JJ.