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RICARDO S. SCHULZE v. NATIONAL POWER CORPORATION

FACTS:

Respondent National Power Corporation (NAPOCOR) filed a complaint for expropriation seeking the acquisition of an easement of right of way over certain portions of land located in Bacolod City. Petitioners, who are the owners of the affected lots, contended that apart from the area sought to be expropriated, the remainder of their lots will suffer a reduction in value due to the installation of NAPOCOR's facilities, for which they are entitled to consequential damages.

NAPOCOR was granted a Writ of Possession, and petitioners received the amount of P519,851.47 as compensation. The RTC appointed a Board of Commissioners to determine the just compensation for the properties, which recommended a valuation rate of P593.86/sq. m. NAPOCOR objected, arguing that the valuation should be based on market data for the year 2001 instead of 2002 and 2003.

The RTC adopted the findings of the commissioners and fixed the just compensation for the subject lots at P13,993,260.00. It also awarded consequential damages and attorney's fees to the petitioners. NAPOCOR appealed the decision, and the CA affirmed the just compensation but deleted the award of consequential damages and attorney's fees. The CA remanded the case to the RTC to determine the proper amount of consequential damages. Petitioners filed a motion for partial reconsideration, which was denied. Hence, the present petition.

ISSUES:

  1. Whether the award of consequential damages in the amount of 10% of the fair market value of the affected lots is supported by sufficient evidence and legal basis.

  2. Whether the award of consequential damages in the amount of P26,538,415.68 should be set aside due to the lack of reliable and actual data supporting the estimated valuation fixed by the RTC.

  3. Whether the proper amount of consequential damages can be determined without remanding the case for further proceedings.

  4. Whether the BIR zonal valuation prevailing at the filing of the expropriation complaint should be the proper basis in determining the amount of consequential damages.

  5. Whether legal interest should be imposed on the award of just compensation.

  6. Whether legal interest should be imposed on the unpaid balance of just compensation and consequential damages.

  7. What is the proper rate of legal interest to be applied.

RULING:

  1. The award of consequential damages is supported by sufficient evidence and legal basis. However, the amount of consequential damages should not be equivalent to 10% of the fair market value of the affected lots as it is speculative and without basis.

  2. The Court agrees with the CA's ruling that the award of consequential damages in the amount of P26,538,415.68 must be set aside due to the lack of reliable and actual data supporting the estimated valuation fixed by the RTC.

  3. The Court finds it unnecessary to remand the case to determine the proper amount of consequential damages. The Court relies on previous jurisprudence in NAPOCOR v. Marasigan and National Transmission Corporation v. Lacson-De Leon, which have established a reasonable basis for computing consequential damages in similar cases. It is determined that the proper amount of consequential damages should be 50% of the BIR zonal valuation of the affected property.

  4. Yes, the BIR zonal valuation prevailing at the filing of the expropriation complaint should be the proper basis in determining the amount of consequential damages.

  5. Yes, legal interest should be imposed on the award of just compensation.

  6. Yes, legal interest should be imposed on the unpaid balance of just compensation and consequential damages. The delay in the payment of just compensation constitutes an effective forbearance of money on the part of the State.

  7. The rate of legal interest is 12% per annum from the time of actual taking until June 30, 2013, and thereafter, 6% per annum until full payment.

PRINCIPLES:

  • Only questions of law may be raised and resolved in petitions brought under Rule 45 of the Rules of Court. Factual findings of the lower courts are generally considered final and binding, except when there is a misapprehension of facts or manifestly mistaken inferences drawn from the facts.

  • The amount of just compensation for expropriated property is equivalent to the fair market value of the property. However, if only a portion of the property is acquired, the owner is entitled to consequential damages for the remainder of the property, provided it is proven by sufficient evidence.

  • Consequential damages can be awarded to compensate property owners for the adverse effect caused by power transmission lines. This is based on the decrease in market value of the remaining land area and the fear in the market place caused by the proximity to the power lines.

  • Consequential damages should be proven by sufficient evidence and should not be speculative or without basis. The amount awarded should be reasonable and supported by the evidence presented.

  • Consequential damages can be awarded in cases of easement of right of way brought about by the installation of transmission lines. The affected areas that are rendered unfit for use, even for agricultural purposes, may be considered as "dangling" areas and are entitled to consequential damages. (NAPOCOR v. Marasigan)

  • Consequential damages should be based on the assessment of an appraisal committee, which conducts an ocular inspection of the properties to determine the effects of installing transmission lines on their value. (NAPOCOR v. Marasigan)

  • The proper amount of consequential damages is determined as 50% of the BIR zonal valuation of the affected property. (NAPOCOR v. Marasigan; National Transmission Corporation v. Lacson-De Leon)

  • Compensation for expropriated land must be fair and reasonable, and must be made without delay.

  • Between the taking of the property and the actual payment, legal interests accrue to place the owner in a position as good as the position he was in before the taking occurred.

  • A final judgment may no longer be altered, amended, or modified, except in exceptional and compelling cases to serve substantial justice.

  • Rules of procedure should be viewed as tools designed to facilitate the attainment of justice and their strict and rigid application must be eschewed when it frustrates rather than promotes substantial justice.

  • The delay in the payment of just compensation amounts to an effective forbearance of money on the part of the State.

  • Legal interest accrues as a matter of law and follows as a matter of course from the landowner's right to be placed in as good a position as money can accomplish, as of the date of taking.