CASE DIGEST

Title: National Power Corporation v. Honorable Zain B. Angas, et al. (G.R. Nos. 60225-26)

Date: May 8, 1992

Facts:

The National Power Corporation (NPC), a government-owned and controlled corporation responsible for
infrastructure and development projects, filed two complaints for eminent domain against private
landowners in Lanao del Sur. The purpose was to expropriate certain parcels of land for hydro-electric
power development and electricity production.

The lower court rendered a consolidated decision, confirming the lawful condemnation and
expropriation of the lands and ordering NPC to pay just compensation "with legal interest thereon . . .
until fully paid." NPC deposited the compensation with 6% interest per annum, but private landowners
sought a 12% interest rate citing Central Bank Circular No. 416.

The lower court granted the landowners' request, and NPC appealed, arguing that Article 2209 of the
Civil Code should apply, which prescribes a 6% legal interest rate for obligations involving payment of
money.

Issue:

Whether or not the legal rate of interest on just compensation for expropriated lands should be
determined based on Article 2209 of the Civil Code (6% interest rate).

Ruling:

Yes, the legal rate of interest on just compensation for expropriated lands should be determined based
on Article 2209 of the Civil Code (6% interest rate).

The court found that Central Bank Circular No. 416 applied only to loans or forbearance of money,
goods, or credits, and judgments related to such transactions.

In the case at bar, the Supreme Court ruled in favor of the National Power Corporation (NPC) and held
that Article 2209 of the Civil Code should apply since the case involved expropriation of land for public
use, with no stipulation regarding interest.

The interest in this case was considered an indemnity for damages due to the delay in payment, making
Article 2209 of the Civil Code applicable. The court rejected the argument that Central Bank Circular No.
416 impliedly repealed or modified Article 2209, as the two laws applied to different situations and
transactions that could be reconciled without conflict.

Therefore, the correct and valid legal interest rate for just compensation for expropriated lands in this
case was 6% per annum, and the 12% interest rate imposed by the lower court was annulled and set
aside. The injunction against enforcing the 12% interest rate was made permanent.

DISCUSSION:

The case of National Power Corporation v. Honorable Zain B. Angas, et al. (G.R. Nos. 60225-26) is
relevant to statutory construction for several reasons:
Interpretation of Legal Provisions: The case involves the interpretation of two legal provisions, Article
2209 of the Civil Code and Central Bank Circular No. 416, to determine which provision applies in a
specific context. This requires the court to engage in statutory construction to ascertain the legislative
intent behind these provisions.

Application of Ejusdem Generis: The case illustrates the application of the ejusdem generis rule in
statutory construction. The court used this rule to narrow down the scope of Central Bank Circular No.
416, concluding that it applied only to loans or forbearance of money, goods, or credits and judgments
related to such transactions. This narrowing of the scope is a common technique in statutory
construction.

Avoiding Conflict Between Laws: The case highlights the principle that in statutory construction, courts
are generally reluctant to find that one law has repealed or modified another law by implication. Instead,
they seek to reconcile conflicting laws if possible. In this case, the court avoided a conflict by finding that
the two laws (Article 2209 of the Civil Code and Central Bank Circular No. 416) applied to different
situations and transactions.

Determination of Legislative Intent: Statutory construction involves determining the legislative intent
behind a law or provision. In this case, the court analyzed the purpose and scope of both Article 2209
and Central Bank Circular No. 416 to determine which one should govern the interest rate on just
compensation for expropriated lands. This process reflects a key aspect of statutory construction.

In summary, the case is relevant to statutory construction because it showcases how the court interprets
and applies legal provisions, resolves conflicts between laws, and seeks to determine legislative intent
when addressing complex legal issues.

The phrase "The term 'judgments' as used in Section 1 of the Usury Law" is also relevant to statutory
construction in the case of National Power Corporation v. Honorable Zain B. Angas, et al. (G.R. Nos.
60225-26). Here's why:

Contextual Interpretation: This phrase highlights the importance of examining the specific language used
in a statute or law (in this case, Section 1 of the Usury Law) to determine the scope and meaning of the
terms used. It underscores the need for courts to consider the context in which words or phrases are
used within a statute.

Statutory Definitions: In statutory construction, courts often look for explicit definitions or
interpretations of terms within the law itself. In this instance, the court is examining the term
"judgments" within the Usury Law to determine its precise meaning and application in the context of
interest rates.

Principle of Ejusdem Generis: The phrase indirectly relates to the principle of ejusdem generis, which
was applied in the case. The court had to determine whether the term "judgments" in Section 1 of the
Usury Law included judgments related to expropriation cases or only those related to loans or
forbearance of money, goods, or credits.

In essence, the phrase underscores the need for courts to closely analyze and interpret specific terms
within a statute to ascertain their intended meaning and applicability, which is a fundamental aspect of
statutory construction.