Lloyds Richfield Industrial Corp. v.

National Power Corp,

G.R. Nos. 190207 & 190213
30 June 2021

Topic: Fundamental Powers of the State; Eminent Domain; Police Power

Keywords:

Facts:

The Court resolves the consolidated Petitions for Review on Certiorari of both parties assailing the
Decision and Resolution of the Court of Appeals, which affirmed the Regional Trial Court Decision
to condemn the 11 parcels of land of Lloyd Richfield in favour of the National Power Corporation, the
amount of the just compensation for the parcels of land, and deleted the award of just compensation
for the value of the limestone deposits.

NPC’s project is to construct transmission lines, and the project will affect the parcel of lands of
Lloyds Richfield. Hence, the two parties entered into negotiations.

However, the negotiations did not succeed that prompted NPC to file a complaint for expropriation
and ex parte motion before RTC, which later the Trial Court issued a Writ of Possession to take
immediate possessions of Lloyds Richfield’s properties.

Lloyds Richfield demanded by way of compulsory claim that the National Power Corporation Pay the
fair market value of the parcel of lands affected by the project of NPC. In addition, the same also
demands the NPC to pay the fair market value of the limestone deposits in the parcels of land.

On the other hand, the committee recommended an increase in the safety zone from the original 20
metres to 200 metres on each side, totaling 400 metres. From 7 lots to be expropriated to 11 parcels of
land, which was granted by the Regional Trial Court with the amount of P450.00 per square metre as
the just compensation for land and P26.00 per ton as the fair market value of the limestone deposits in
the properties.

The NPC contends that it may only acquire an easement of right of way over the parcels of land
pursuant to Republic Act No. 6395, and thus, may only pay an easement fee equivalent to 10% of the
market value of the lands to be expropriated.

Hence, this petition.

Issue:

Whether or not Lloyds Richfield is entitled to just compensation equivalent to the fair market value of
the properties being expropriated, and not to easement of right of way under RA 6395.
(YES)

Whether or not Lloyds Richfield is entitled to just compensation for the value of the limestone
deposits found in its lots. (NO)

Ruling:

Yes. Section 9 of the Bill of Rights provides that private property shall not be taken for public
use without just compensation. The said provision is not limited to expropriations or taking the
property with the corresponding transfer of title from the landowner to the expropriator, but also for
easement of right of way. Easement of right is allowed if the restrictions on the landowner’s
property rights are not perpetual or indefinite. In the case at bar, it is clear that constructing
transmission lines over the expropriated properties placed an indefinite and perpetual restriction on

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Lloyds Richfield’s proprietary rights because the latter has been perpetually prohibited from
conducting a dynamite blasting and quarrying activities, or else the transmission lines will be
damaged or destroyed. Hence, the NPC has no choice but to expropriate the lots and pay Lloyds
Richfield the full fair market value of the properties as just compensation. With respect to Section 3-
A of RA 6395, only a right-of-way easement thereon shall be acquired when the principal
purpose for which such land is actually devoted will not be impaired. Applying in this case,
construction of transmission lines will impair the principal purpose of the properties, namely:
dynamite blasting and quarrying activities.

No. In Lloyds Richfield’s assertion, his claim under Article 437 of Civil Code, it provides that the
owner of a parcel of land is the owner of its surface and everything under it. However, Article 437
itself provides that it is “subject to special laws and ordinances. Certainly, the Constitution can be
considered a special law, if not the fundamental law, to which all statutes must conform. Under
Article XII, Section 2 of the Constitution, the state owns all the minerals found in Philippine Soil. In
the case at bar, Lloyd Richfield is not entitled to just compensation for the mineral deposits found
underneath his property, as the state owns all the minerals found in Philippine soil.

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