Schulze v. National Power Corporation
REITERATIONFacts
The Antecedents: Respondent National Power Corporation (NAPOCOR) filed a complaint for expropriation against petitioners seeking to acquire an easement of right of way over certain portions of land for the construction of its transmission line. Petitioners contended that the assessed values of their lands had increased and that the remainder of their lots would suffer a reduction in value due to the installation of NAPOCOR's facilities, for which they are entitled to consequential damages. Procedural History: NAPOCOR was granted a Writ of Possession after depositing 100% of the BIR zonal valuation of the subject lots plus the value of improvements. The RTC appointed a Board of Commissioners which recommended a valuation of P593.86/sq. m. The RTC adopted this valuation for just compensation and awarded consequential damages and attorney's fees. The CA affirmed the just compensation but deleted the award for consequential damages and attorney's fees, remanding the case for further reception of evidence on consequential damages. The CA also denied petitioners' claim for legal interest. The Petition: Petitioners seek review of the CA's decision, arguing that the CA erred in remanding the case for determination of consequential damages and in failing to impose legal interest on the award of just compensation.
Issue(s)
Whether the Court of Appeals erred in remanding the case to determine the proper amount of consequential damages. Whether the Court of Appeals erred in failing to impose legal interest on the award of just compensation.
Ruling
The petition is partly meritorious. The Court ruled that the CA erred in deleting the award for consequential damages and in remanding the case. However, the Court found the RTC's computation of consequential damages to be speculative. The Court applied the formula from previous cases, awarding consequential damages equivalent to 50% of the BIR zonal valuation of the affected property. The Court also ruled that legal interest should be imposed on the unpaid balance of just compensation and consequential damages.
Ratio Decidendi
On the issue of consequential damages: The Court held that the CA erred in deleting the award for consequential damages. Case law recognizes that where only a portion of a property is expropriated, the owner is entitled to consequential damages for the impairment of the remainder. The records showed that the value of the affected lots was impaired due to their proximity to power posts and transmission lines, creating fear of health risks and constraining property use. The Court, however, found the RTC's award of 10% of the fair market value to be speculative and without basis. Citing NAPOCOR v. Marasigan and National Transmission Corporation v. Lacson-De Leon, the Court adopted the more reasonable computation of 50% of the BIR zonal valuation of the affected property. This formula was applied to the undisputed BIR zonal valuation of P17.00/sq. m. for the affected lots at the time of the complaint's filing, resulting in an award of P3,798,480.00. On the issue of legal interest: The Court found merit in petitioners' contention that legal interest should be imposed. While the CA denied the claim based on the finality of the RTC decision, the Court relaxed the doctrine of immutability of judgment in exceptional cases to serve substantial justice, particularly concerning the constitutional right to just compensation. Citing Apo Fruits Corporation v. Land Bank of the Philippines and Republic v. Court of Appeals, the Court emphasized that just compensation must be paid without delay, and interest accrues to compensate for the delay between the taking of the property and the actual payment. Therefore, legal interest at the rate of 12% per annum from the time of actual taking until June 30, 2013, and thereafter at 6% per annum until full payment, was imposed on the unpaid balance of just compensation and the consequential damages.
Main Doctrine
In expropriation cases, consequential damages are recoverable for the impairment of the value of the remainder of the property not taken, provided such fact is proven by sufficient evidence. The computation of consequential damages should be based on the BIR zonal valuation of the affected property at the time of the filing of the complaint or actual taking, whichever came first. Legal interest is also imposable on the unpaid balance of just compensation and consequential damages to compensate for delay in payment.