“Electricity is just organized lightning,” said comedian George Carlin, which may also be at the back of the minds of people living near (and in fear of) high-powered power posts and transmission lines, as in a case decided by the Supreme Court.
Schulze, Sr., et al. v. National Power Corporation and Philippine National Bank involved certain parcels of land owned by petitioners Jose Luis Valdez, and Spouses Antonio and Maria Elena Valdez. Respondents National Power Corporation (NPC) and Philippine National Bank filed a complaint for expropriation before the trial court against the Valdezes, seeking to acquire an easement of right of way over these properties upon paying a “simple easement fee.”
This easement would be utilized in relation to NPC’s construction and maintenance of its transmission lines for its Negros IV-Panay Project.
In their answer, the Valdezes alleged that: (a) the assessed and corresponding market values of their properties had significantly increased; and (b) the value of the remainder of their properties, which were not the subject of the instant complaint, would depreciate because of the installation of NPC’s posts, transmission lines, transformers, and other facilities, for which they would be entitled to consequential damages.
The trial court issued a writ of possession in favor of the NPC upon paying the Valdezes. It thereafter adopted its appointed board of commissioners’ assessment of just compensation, which both parties contested before the Court of Appeals.
The Court of Appeals upheld the board’s assessment since it was duly substantiated. Nevertheless, it remanded the case to the trial court for further reception of evidence since it found that the award of consequential damages was improper for being speculative.
This constrained the Valdezes to file the instant petition before the Supreme Court.
In reversing the Court of Appeals’ finding on the award of consequential damages, the Supreme Court held that where only a portion of the property is sought to be expropriated, the owner is entitled to just compensation equivalent to the fair market value of that portion, as well as consequential damages for the impairment or decrease in property value that may be suffered from the expropriation.
Pursuant to the procedural rules, court-appointed commissioners shall assess these consequential damages and deduct therefrom the consequential benefits to be derived by the owner from the public use or purpose of the property taken. In no case shall these benefits exceed these damages or the owner be deprived of the actual value of the property taken.
In this case, consequential damages were based on sufficient proof that the value of the affected lots would be impaired because of their close proximity to the power posts, transmission lines, and other facilities installed on the lots taken by NPC. This situation also constrained the use of the lots not taken, sowing fears of radiation, electrocution, and other health risks in prospective buyers. Moreover, the Supreme Court upheld the board’s finding of comparison of the depreciation in the property value to the effect of the presence of informal settlers, sidewalk vendors, railroad tracks, airport runway, noise, polluting factories, or heavy traffic.
While the Supreme Court affirmed the trial court’s finding that the Valdezes were entitled to consequential damages, it found that its award of 10 percent of the fair market value of the affected lots was baseless. It then reaffirmed its previous rulings that the award of consequential damages is limited to 50 percent of the affected property’s zonal valuation by the Bureau of Internal Revenue (BIR).
Moreover, consequential damages, being a component of just compensation, should be determined based on the value of the properties as of the date of the taking or the filing of the complaint for expropriation. In this case, the NPC’s filing of the complaint preceded its taking of the properties, which earlier point should be the proper basis in determining the BIR zonal valuation of the lots not taken.