REPUBLIC OF THE PHILIPPINES vs. HEIRS OF SATURNINO Q. BORBON

REPUBLIC OF THE PHILIPPINES vs. HEIRS OF SATURNINO Q. BORBON
 

FACTS: In 1993, NAPOCOR, a GOCC entered a property located in Batangas City in order to construct and maintain transmission lines. Respondents heirs of Saturnino Q. Borbon owned the property. On 1995, NAPOCOR filed a complaint for expropriation in the RTC in Batangas City seeking the acquisition of an easement of right of way over a portion of the property, alleging that it had negotiated with the respondents for the acquisition of the easement but they had failed to reach any agreement.
The respondents maintained that NAPOCOR had not negotiated with them before entering the property and that the entry was done without their consent. They tendered no objection to NAPOCOR’s entry provided it would pay just compensation not only for the portion sought to be expropriated but for the entire property whose potential was greatly diminished, if not totally lost, due to the project; and that their property was classified as industrial land.
The RTC ordered NAPOCOR to pay the respondent just compensation for the whole area, NAPOCOR appealed to CA, wherein the CA affirmed the order and decision of the RTC with modification that plaintiff-appellant shall pay only for the occupied portion. Hence, this appeal.
On 2012, during the pendency of the appeal, NAPOCOR filed a Manifestation and Motion to Discontinue Expropriation Proceedings, informing that the parties failed to reach an amicable agreement; that the property sought to be expropriated was no longer necessary for public purpose because of the intervening retirement of the transmission lines installed on the respondents’ property;that because the public purpose for which such property would be used thereby ceased to exist, the proceedings for expropriation should no longer continue, and the State was now duty bound to return the property to its owners; and that the dismissal or discontinuance of the expropriation proceedings was in accordance with Section 4, Rule 67 of the Rules of Court. 

ISSUE/S:
​Whether or not the expropriation proceedings should be discontinued or dismissed pending appeal.

RULING:
Yes. The dismissal of the proceedings for expropriation at the instance of NAPOCOR is proper, but, conformably with Section 4,36 Rule 67 of the Rules of Court, the dismissal or discontinuance of the proceedings must be upon such terms as the court deems just and equitable. The SC remind the parties about the nature of the power of eminent domain that the public use is fundamental basis for the action of expropriation, hence, NAPOCOR motion should be granted. 
The SC held that the very moment that it appears at any stage of the proceedings that the expropriation is not for a public use, the action must necessarily fail and should be dismissed, for the reason that the action cannot be maintained at all except when the expropriation is for some public use. That must be true even during the pendency of the appeal or at any other stage of the proceedings.
With regards to the NAPOCOR entered the property without the owners’ consent and without paying just compensation to the respondents. Neither did it deposit any amount as required by law prior to its entry. The Constitution is explicit in obliging the Government and its entities to pay just compensation before depriving any person of his or her property for public use.Considering that in the process of installing transmission lines, NAPOCOR destroyed some fruit trees and plants without payment, and the installation of the transmission lines went through the middle of the land as to divide the property into three lots, thereby effectively rendering the entire property inutile for any future use, it would be unfair for NAPOCOR not to be made liable to the respondents for the disturbance of their property rights from the time of entry until the time of restoration of the possession of the property. 
In light of these premises, the SC expressly hold that the taking of private property, consequent to the Government’s exercise of its power of eminent domain, is always subject to the condition that the property be devoted to the specific public purpose for which it was taken. Corollarily, if this particular purpose or intent is not initiated or not at all pursued, and is peremptorily abandoned, then the former owners, if they so desire, may seek the reversion of the property, subject to the return of the amount of just compensation received. In such a case, the exercise of the power of eminent domain has become improper for lack of the required factual justification.
This should mean that the compensation must be based on what they actually lost as a result and by reason of their dispossession of the property and of its use, including the value of the fruit trees, plants and crops destroyed by NAPOCOR’s construction of the transmission lines. Considering that the dismissal of the expropriation proceedings is a development occurring during the appeal, the Court now treats the dismissal of the expropriation proceedings as producing the effect of converting the case into an action for damages. For that purpose, the Court remands the case to the court of origin for further proceedings, with instruction to the court of origin to enable the parties to fully litigate the action for damages by giving them the opportunity to re-define the factual and legal issues by the submission of the proper pleadings on the extent of the taking, the value of the compensation to be paid to the respondents by NAPOCOR, and other relevant matters as they deem fit. Trial shall be limited to matters the evidence upon which had not been heretofore heard or adduced. The assessment and payment of the correct amount of filing fees due from the respondents shall be made in the judgment, and such amount shall constitute a first lien on the recovery. Subject to these conditions, the court of origin shall treat the case as if originally filed as an action for damages. 

WHEREFORE, the Supreme Court DISMISSED the expropriation proceedings due to the intervening cessation of the need for public use.