PAFC v NGCP (GR 224936; September 4, 2019)

 PNOC Alternative Fuels Corporation v. National Grid Corporation of the Philipines

G.R. No. 224936, September 4, 2019

Caguioa, J.

Facts:

    NGCP needed to expropriate a parcel of land in Bataan and Batangas to construct Mariveles-Limay 230 kV Transmission Line Project. 

    The lot is part of the Petrochemical Industrial Park. This Park was originally part of the public domain reserved by the government for the Lamao Horticultural Experiment Station in 1919. The area's administration was finally transferred to PNOC (PD 949). 

  In 2011, NGCP filed a complaint against PAFC to expropriate the land, exercising its right of eminent domain (Section 4, RA 9511). PAFC argued that the land is already used for a public purpose. 

Issue:

(1) W/N PAFC was correct in filing its Rule 45 Petition directly before the Court

(2) W/N NGCP is empowered to expropriate the subject property under R.A. No. 9511.

Held: Petition is denied and NGCP is allowed to expropriate the subject property.

(1) PAFC did not commit a procedural error in filing the instant appeal via a Rule 45 petition directly before the Court. PAFC raises the argument that the expropriation of the subject property by respondent NGCP is invalid because such exercise of eminent domain was neither done directly by Congress nor pursuant to a specific grant of authority. It is readily apparent that this primary argument is legal in nature. The instant Petition may be decided by dealing purely with questions of law.

(2) The Congress may delegate the exercise of the power to government agencies, public officials and quasi-public entities. Section 4 of R.A. No. 9511 is clear, plain, and free from any ambiguity. Respondent NGCP is allowed to exercise the right of eminent domain only with respect to private property. 

Is the subject lot private property? The Civil Code (A419) provides that there are two types of property either public domain (dominio publico) or private ownership (propiedad privado).

Public domain has the following characteristics: 

- outside the commerce of man and, thus, cannot be leased, donated, sold, or be the object of any contract.

- inalienable (cannot be appropriated or alienated)

 Properties of the State which do not have these characteristics are patrimonial properties of the State, that is, owned by the State in its private capacity. It is property held by the State in its private and proprietary capacity, and not in its public capacity, in order to attain economic ends.

The Civil Code also provides three classifications of private property:

1. patrimonial property of the State (Articles 421 and 422)

2.  patrimonial property of Local Government Units (Article 424)

3.  property belonging to private individuals (Article 425)

If land owned by the State is considered patrimonial property, then such land assumes the nature of private property. The Petrochemical Industrial Park is intended and accordingly devoted by law as a commercial and business venture. Under P.D. No. 949, the Petrochemical Industrial Park was explicitly made alienable and disposable for lease, sale, and conveyance to private entities or persons for the conduct of related industrial activities. As such, it is a patrimonial property with the nature of private property and may be expropriated.

Important:

- NGCP's franchise and powers and functions are contained in RA 9511

- Land of the public domain is outside the commerce of man and, thus, cannot be leased, donated, sold, or be the object of any contract, except insofar as they may be the object of repairs or improvements and other incidental things of similar character. Hence, they cannot be appropriated or alienated. Inalienability is an inherent characteristic of property of the public dominion. They cannot be acquired through prescription and cannot be registered under the Land Registration Law and be the subject of a Torrens Title.