Full Market Value, Not a 10% Cap, Is Just Compensation for Power-Line Easements
In NPC v. Purefoods, the Court held that a transmission-line easement that cripples normal use must be paid at full market value, not 10%.
When the government takes only an easement of right-of-way over private land—for example, to string high-voltage transmission lines—can it limit payment to 10% of market value because it did not take title? The Supreme Court says no. In National Power Corporation v. Purefoods Corporation (G.R. No. 160725, September 12, 2008), the Court ruled that where the easement effectively deprives the owner of the normal use of the property for an indefinite period, just compensation must be based on the full market value of the affected land.
The Case: Power Lines Across Bulacan Properties
The National Power Corporation (NAPOCOR) needed an easement of right-of-way for its San Jose–San Manuel 500 KV Transmission Line Project. It filed an eminent domain action to acquire easements over a total of 62,426.50 square meters in Angat, San Rafael, San Ildefonso, and San Jose del Monte, Bulacan.
The Regional Trial Court appointed commissioners to determine just compensation. Based on their reports, the RTC fixed the compensation at P600 per square meter for Moldex Realty Corporation and P400 per square meter for the other respondents, including Purefoods Corporation. The Court of Appeals affirmed, with a modification on the period for interest. NAPOCOR appealed to the Supreme Court.
The Issue: Does an Easement Fee of 10% Suffice?
NAPOCOR argued that because it was acquiring only an easement of right-of-way—not the land itself—the affected owners should receive only an easement fee. It cited Section 3A of Republic Act No. 6395, as amended by Presidential Decree No. 938, and the implementing rules of Republic Act No. 8974, which cap the compensation for a right-of-way easement at not exceeding 10% of the market value of the property.
The respondents countered that the transmission lines would severely restrict their use of the land. The case thus presented a question of law: whether the statutory 10% limit could override the constitutional guarantee of just compensation.
The Ruling: Compensation Is a Judicial Function
The Supreme Court denied NAPOCOR’s petition and affirmed the lower courts’ valuation. It held that the statutory 10% cap is not binding on the courts.
Citing National Power Corporation v. Manubay Agro-Industrial Development Corporation (G.R. No. 150936, August 18, 2004), the Court explained that an easement of right-of-way for transmission lines transmits no title but is nonetheless not gratis. The installation of power lines, and the resulting limitations on use for an indefinite period, deprive the owner of the normal use of the property. For
Have a question about this topic?
This article is general information, not legal advice. Ask ASG Legal AI for a cited, plain-language answer on your own situation — free, no sign-up.