DECISION

PERLAS-BERNABE, J.:

Before the Court is a petition for review on certiorari1 assailing the Decision2 dated September 18, 2017
and the Resolution3 dated February 26, 2019 of the Court of Appeals (CA) in CA-G.R. CV No. 03574,
which affirmed with modification the Decision4 dated January 18, 2010 of the Regional Trial Court of
Bacolod City, Branch 49 (RTC) in Civil Case No. 01-11529, and (a) fixed the just compensation for the
subject lots at P593.86/square meter (sq. m.); (b) deleted the award of attorney's fees; (c) remanded the
case to the RTC for the determination of any consequential damages for the remainder of the
properties; and (d) ordered the segregation, transfer and registration of the subject lots after payment
of the just compensation and consequential damages, if any.

The Facts

On September 7, 2001, respondent National Power Corporation (NAPOCOR)5 filed a complaint6 for
expropriation against petitioner Ricardo S. Schulze, Sr.,7 in his capacity as then President of Elaris
Investment Co., Inc. and Judicial Guardian of petitioner Jose Luis S. Valdes, petitioners Spouses Antonio
and Maria Elena S. Valdes (collectively, petitioners), and respondent Philippine National Bank (PNB)8
before the RTC, seeking the acquisition of an easement of right of way over cet1ain portions of land
located in Barangay Granada, Bacolod City, Negros Occidental (subject lots), with an aggregate area of
23,563 sq. m., for the construction and maintenance of its 138 KV Bacolod-Cadiz Transmission Line for
the Negros IV-Panay Project.9 The subject lots each formed part of five (5) large tracts of land,10 with an
aggregate area of 470,443 sq. m.11 NAPOCOR asked to pay a simple easement fee.12

In their Answer,13 petitioners contended that: (a) the assessed and corresponding market values of
their lands have already increased several folds; and (b) apart from the area sought to be expropriated,
the remainder14 of their lots (affected lots) will suffer a reduction in value due to the installation of
NAPOCOR's posts, transmission lines, transformers, and other facilities, for which they are entitled to
consequential damages.15

NAPOCOR was eventually granted a Writ of Possession,16 after petitioners received the amount of
P519,851.47,17 representing 100% of the Bureau of Internal Revenue (BIR) zonal valuation of the
subject lots, i.e., P400,571.0018 plus the value of the improvements built thereon valued in the amount
of P119,280.47.19 NAPOCOR was able to obtain possession of the subject lots on December 19, 2003
(date of actual taking).20
The RTC appointed a Board of Commissioners to determine the just compensation for the properties21
which, thereafter, submitted a Court Commission's Report22 dated October 13, 2008, recommending
that the subject lots be valued at P593.86/sq. m.,23 based on the market value of similar properties in
the years 2002 and 2003, as well as other factors, such as: property location, desirability, neighborhood,
utility, and size.24 NAPOCOR objected to the findings of the commissioners, arguing that the
commissioners erred in valuing the properties based on market data for the years 2002 and 2003,
instead of the year 2001, when the complaint was filed.25

The RTC Ruling

In a Decision26 dated January 18, 2010, the RTC adopted the findings of the commissioners and fixed
the just compensation for the subject lots at P13,993,260.00.27 It held that the recommended valuation
rate of P593.86/sq. m. was their approximate market value since they are located in an area where land
development is changing from general agricultural use to residential development. It also found it
proper to award the amount of P26,538,415.68 as consequential damages,28 representing 10% of the
fair market value of the affected lots, considering that their values were impaired because of the
presence of NAPOCOR's posts and high tension transmission lines on the subject lots. It likewise
awarded P100,000.00 attorney's fees in favor of petitioners who were forced to hire the services of a
lawyer in order to protect their rights.29

Dissatisfied, NAPOCOR appealed30 to the CA. On the other hand, petitioners, in their appellee's brief,31
claimed that the trial court erred in failing to impose legal interest on the monetary awards.32

The CA Ruling

In a Decision33 dated September 18, 2017, the CA upheld the just compensation fixed for the subject
lots for being duly supported by uncontroverted facts confirmed by ocular inspection, and found no
cogent reason to disturb the same.34 However, it found the award of consequential damages to be
improper for being speculative, and remanded the case back to the trial court for further reception of
evidence.35 It likewise deleted the award of attorney's fees in the absence of showing of any irregularity
in the expropriation proceedings.36 On the other hand, it denied petitioners' claim of interest
considering their failure to appeal the RTC Decision which was silent on any award of legal interest.37

Undaunted, petitioners moved for partial reconsideration38 of the CA Decision, which was denied in a
Resolution39 dated February 26, 2019. Hence, the instant petition.

The Issue Before the Court

The Court's Ruling

The petition is partly meritorious.

At the outset, it bears stressing that only questions of law may be raised and resolved by this Court on
petitions brought under Rule 45 of the Rules of Court, and that, as a rule, factual findings of the lower
courts are generally considered final and binding on this Court.41 As an exception, however, when there
is a misapprehension of facts or when inferences drawn from the facts are manifestly mistaken, the
Court is empowered to pass upon factual issues,42 as in this case.

Guided by the foregoing considerations, the Court finds that the CA erred in ruling that the award of
consequential damages was not supported by evidence.43 Case law provides that the amount of just
compensation an owner is entitled to receive is equivalent to the fair market value of the property to be
expropriated. Nevertheless, where only a portion of a certain property is to be acquired, the owner is
not restricted only to compensation for the part actually taken, but is likewise entitled to recover
consequential damages for the remainder of the property, which may suffer an impairment or decrease
in value as an incidental result of the expropriation, provided such fact is proven by sufficient
evidence.44 The award of consequential damages is recognized under Section 6, Rule 67 of the Rules of
Court, which reads:

Section 6. Proceedings by Commissioners. - Before entering upon the performance of their duties, the
commissioners shall take and subscribe an oath that they will faithfully perform their duties as
commissioners, which oath shall be filed in court with the other proceedings in the case. Evidence may
be introduced by either party before the commissioners who are authorized to administer oaths on
hearings before them, and the commissioners shall, unless the parties consent to the contrary, after due
notice to the parties to attend, view and examine the property sought to be expropriated and its
surroundings, and may measure the same, after which either party may, by himself or counsel, argue
the case. The commissioners shall assess the consequential damages to the property not taken and
deduct from such consequential damages the consequential benefits to be derived by the owner from
the public use or purpose of the property taken, the operation of its franchise by the corporation or the
carrying on of the business of the corporation or person taking the property. But in no case shall the
consequential benefits assessed exceed the consequential damages assessed, or the owner be deprived
of the actual value of his property so taken. (Emphasis supplied)
In this case, records45 show that the value of the affected lots was impaired on account of their close
proximity to the power posts, transmission lines, and other facilities installed on the subject lots, which
constrained the use of the properties, and created a perceived fear of radiation, electrocution, and
other health risks in the minds of prospective buyers.46 Notably, the RTC observed that "given their
nature, high powered transmission lines would necessarily diminish - if not entirely damage - the value
and use of the property as well as endanger lives and limbs[,]"47 and "the existence of [NAPOCOR'S]
posts and high tension transmission lines which traversed [petitioners'] properties would impair their
prices or value to some extent."48 This finds support in the Court Commission's Report49 dated October
13, 2008, which was quoted and adopted by the RTC, viz.:

Based upon an analysis of the prevailing land usage in the neighborhood and the property itself, we are
of the opinion that the following land use would represent the highest and best use of the property:

Before the taking - the whole property could be developed to a pleasant residential subdivision with a
view of the adjoining properties.

After the taking - portions of the property have been occupied, segregated and affected by power
transmission lines that deprived the property owners from developing the whole property to a pleasant
residential subdivision without any eye sore or danger of being affected by the radiation emitted by the
power lines. The damage caused to the adjoining area affected by the power lines is due to the fear in
the marketplace or the external obsolescence caused by the proximity to the power lines and not due to
corona ions that can risk causing childhood leukemia and other illnesses like cancer to both children and
adults.50

xxxx

x x x [S]everance damage is the decrease in market value of the remaining property of an owner caused
by the taking of the part of his property. In this exercise, severance damage is noted on the remaining
land area.

The severance damage on the remaining land area is based on the reduction of value in the highest and
best use of that portion of the property that has been segregated from the main parcel of land thus
making it less desirable to develop to a residential subdivision.
The external obsolescence on the adjoining property is based on the fear in the market place due to the
proximity of the power transmission lines. This is depreciation on property values similar to the effect of
the presence of a squatter colony, sidewalk vendors, railroad tracks, airport runway, noise or polluting
factory or heavy traffic.51

In previous cases, the Court has recognized the payment of consequential damages to compensate
property owners - as petitioners in this case - for the adverse effect caused by power transmission lines
to "the market value of the land x x x [considering that] potential buyers x x x would shy away from
building their houses in the proximity of such high voltage transmission lines."52 Accordingly, the
payment of consequential damages in favor of petitioners is in order.

This notwithstanding, the Court agrees with the CA in holding that the consequential damages in an
amount equivalent to 10% of the fair market value of the affected lots are speculative and without basis.
As the CA correctly held, there appears to be no reliable and actual data supporting the estimated
valuation fixed by the RTC. Thus, the award of consequential damages in the amount of P26,538,415.68
must be set aside.

However, the Court finds it unnecessary to order the remand of the case to determine the proper
amount of consequential damages since jurisprudence has already provided for a reasonable basis to
compute the same in similar cases. In NAPOCOR v. Marasigan53 (Marasigan), the Court had fixed the
amount of consequential damages at the rate of 50% of the BIR zonal valuation of the affected property.
Notably, Marasigan similarly involved the expropriation of an easement of right of way brought about by
the installation of transmission lines, as in this case. As observed by the Court, the said amount was
derived from the recommendation of the appraisal committee which, after ocular inspection, had
evaluated the effects of installing transmission lines to the value of the properties, i.e., that they may no
longer be used either for commercial or residential purposes, viz.:

Respondents in this case claim consequential damages for the areas in between the transmission lines
which were rendered unfit for use. "Dangling" areas, as defined under National Power Board Resolution
No. 94-313, refer to those remaining small portions of the land not traversed by the transmission line
project but which are nevertheless rendered useless in view of the presence of the transmission lines.
The appraisal committee determined the total dangling area to be 41,867 square meters and
consequently recommended the payment of consequential damages equivalent to 50% of the BIR zonal
value per square meter or for a total amount of P22,227,800.

In arriving at its recommendation to pay consequential damages, the appraisal committee conducted an
ocular inspection of the properties and observed that the areas before and behind the transmission lines
could no longer be used either for commercial or residential purposes. Despite this determination, NPC
insists that the affected areas cannot be considered as "dangling" as these may still be used for
agricultural purposes. In so arguing, NPC loses sight of the undisputed fact that the transmission lines
conveying high-tension current posed danger to the lives and limbs of respondents and to potential farm
workers, making the affected areas no longer suitable even for agricultural production. Thus, the Court
finds no reason to depart from the assessment of the appraisal committee, as affirmed and adopted by
the RTC.54

The foregoing formula was then adopted in the fairly recent case of National Transmission Corporation
v. Lacson-De Leon55 (Lacson-De Leon), wherein it was held that "the in ore reasonable computation is
the one laid down in NAPOCOR v. Marasigan, which is 50% of the BIR zonal valuation of the affected
property,"56 viz.:

The award of consequential damages is limited to 50% of the BIR zonal valuation of the property
segregated by the electric transmission lines

xxxx

x x x In NAPOCOR v. Marasigan, the Court awarded consequential damages equivalent to 50% of the BIR
zonal valuation of the property segregated by the electric transmission lines, thus:

xxxx

Respondents in this case claim consequential damages for the areas in between the transmission lines
which were rendered unfit for use. "Dangling" areas, as defined under National Power Board Resolution
No. 94-313, refer to those remaining small portions of the land not traversed by the transmission line
project but which are nevertheless rendered useless in view of the presence of the transmission lines.
The appraisal committee determined the total dangling area to be 41,867 square meters and
consequently recommended the payment of consequential damages equivalent to 50% of the BIR zonal
value per square meter or for a total amount of P22,227,800. (Emphasis in the original)

In arriving at its recommendation to pay consequential damages, the appraisal committee conducted an
ocular inspection of the properties and observed that the areas before and behind the transmission lines
could no longer be used either for commercial or residential purposes. Despite this determination, NPC
insists that the affected areas cannot be considered as "dangling" as these may still be used for
agricultural purposes. In so arguing, NPC loses sight of the undisputed fact that the transmission lines
conveying high-tension current posed danger to the lives and limbs of respondents and to potential farm
workers, making the affected areas no longer suitable even for agricultural production. Thus, the Court
finds no reason to depart from the assessment of the appraisal committee, as affirmed and adopted by
the RTC.

xxxx

While the award of consequential damages is proper, the Court finds the amount of 10% of the fair
market value of the segregated property without basis. Rather, the more reasonable computation is the
one laid down in NAPOCOR v. Marasigan, which is 50% of the BIR zonal valuation of the affected
property.57

To note, Lacson-De Leon involved the same 138 KV Bacolod-Cadiz Transmission Line for the Negros IV-
Panay Project, as in this case. Also, similar to this case, the Court had set aside exactly the same
valuation of 10% of the properties' fair market value for being without basis. Hence, finding no cogent
reason to the contrary, the formula set by these cases is herein adopted.

Applying the foregoing, the award of consequential damages should therefore yield an amount of
P3,798,480.00,58 taking into consideration the undisputed BIR zonal valuation of P17.00/sq. m.59 for
the affected lots60 at the time the complaint was filed on September 7, 2001. In this regard, it bears
pointing out that consequential damages, being a component of just compensation,61 should be
determined based on the value of the properties "as of the date of the taking x x x or the filing of the
complaint for expropriation, whichever came first."62 Here, the filing of the expropriation complaint
evidently preceded the actual taking of the properties on December 19, 2003. Therefore, the BIR zonal
valuation prevailing at such earlier point in time should be the proper basis in determining the amount
of consequential damages.

For another, petitioners contend that the CA erred in failing to impose legal interest on the award of just
compensation. To recount, the CA held that since petitioners failed to appeal the RTC Decision which
was silent on legal interest, the same was already final as to them. While it is a basic rule that "a decision
that has acquired finality becomes immutable and unalterable[,] and may no longer be modified in any
respect even if the modification is meant to correct erroneous conclusions of fact or law,"63 the Court
has, in exceptional and compelling cases,64 relaxed its rigid application to serve substantial justice.65
Among others, in the case of Apo Fruits Corporation v. Land Bank of the Philippines,66 the Court relaxed
the doctrine of immutability of judgment and ordered the imposition of legal interest on the just
compensation award. The Court reasoned that despite the immutability doctrine, the award of legal
interest remains warranted in deference to the constitutional right of owners to receive the fair and full
amount of "just" compensation for property taken by the State, viz.:
Apart from the requirement that compensation for expropriated land must be fair and reasonable,
compensation, to be "just," must also be made without delay. Without prompt payment, compensation
cannot be considered "just" if the property is immediately taken as the property owner suffers the
immediate deprivation of both his land and its fruits or income.

xxxx

We recognized in Republic v. Court of Appeals [433 Phil. 106 (2002)] the need for prompt payment and
the necessity of the payment of interest to compensate for any delay in the payment of compensation
for property already taken. We ruled in this case that:

The constitutional limitation of "just compensation" is considered to be the sum equivalent to the
market value of the property, broadly described to be the price fixed by the seller in open market in the
usual and ordinary course of legal action and competition or the fair value of the property as between
one who receives, and one who desires to sell, i[f] fixed at the time of the actual taking by the
government. Thus, if property is taken for public use before compensation is deposited with the court
having jurisdiction over the case, the final compensation must include interest[s] on its just value to be
computed from the time the property is taken to the time when compensation is actually paid or
deposited with the court. In fine, between the taking of the property and the actual payment, legal
interest[s] accrue in order to place the owner in a position as good as (but not better than) the position
he was in before the taking occurred.67

xxxx

As a rule, a final judgment may no longer be altered, amended or modified, even if the alteration,
amendment or modification is meant to correct what is perceived to be an erroneous conclusion of fact
or law and regardless of what court, be it the highest Court of the land, rendered it. In the past,
however, we have recognized exceptions to this rule by reversing judgments and recalling their entries
in the interest of substantial justice and where special and compelling reasons called for such actions.68

xxxx

That the issues posed by this case are of transcendental importance is not hard to discern from these
discussions.(awÞhi( A constitutional limitation, guaranteed under no less than the all-important Bill of
Rights, is at stake in this case: how can compensation in an eminent domain be "just" when the payment
for the compensation for property already taken has been unreasonably delayed?69
Further, in the same case, the Court discussed that a contrary ruling denying interest in the just
compensation award would not only be an aberration of our settled jurisprudence on the matter but
also run counter to the societal objective of agrarian reform:

As duly noted in the above discussions, this issue is not one of first impression in our jurisdiction; the
consequences of delay in the payment of just compensation have been settled by this Court in past
rulings. Our settled jurisprudence on the issue alone accords this case primary importance as a contrary
ruling would unsettle, on the flimsiest of grounds, all the rulings we have established in the past.

More than the stability of our jurisprudence, the matter before us is of transcendental importance to
the nation because of the subject matter involved - agrarian reform, a societal objective that the
government has unceasingly sought to achieve in the past half century. This reform program and its
objectives would suffer a major setback if the government falters or is seen to be faltering, wittingly or
unwittingly, through lack of good faith in implementing the needed reforms. Truly, agrarian reform is so
important to the national agenda that the Solicitor General, no less, pointedly linked agricultural lands,
its ownership and abuse, to the idea of revolution. This linkage, to our mind, remains valid even if the
landowner, not the landless farmer, is at the receiving end of the distortion of the agrarian reform
program.

xxxx

x x x [R]ules of procedure should be viewed as mere tools designed to facilitate the attainment of
justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather
than promote substantial justice, must always be eschewed. Even the Rules of Court reflects this
principle. The power to suspend or even disregard rules can be so pervasive and compelling as to alter
even that which this Court itself had already declared to be final.70

Thus, in light of the foregoing, legal interest at the rate of 12% per annum (p.a.) from the time of actual
taking, i.e., December 19, 2003, up to June 30, 2013, and thereafter, at 6% p.a. until full payment71
should be imposed on the unpaid balance of the just compensation in the amount of P13,473,408.53,72
as well as on the consequential damages in the amount of P3,798,480.00. To be sure, the delay in the
payment of just compensation amounts to an effective forbearance of money on the part of the State73
that "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."74 Hence, the award of
legal interest is but proper in this case.
WHEREFORE, the petition is PARTLY GRANTED. The Decision dated September 18, 2017 and the
Resolution dated February 26,2019 of the Court of Appeals in CA-G.R. CV No. 03574 are hereby
AFFIRMED with MODIFICATION. Accordingly, respondent National Power Corporation is hereby
ORDERED to pay petitioners Ricardo S. Schulze, Sr., substituted by his wife, Ana Maria L. Schulze as
President of Elaris Investment Co., Inc., Jose Luis S. Valdes, Spouses Antonio and Maria Elena S. Valdes,
and Elaris Investment Co., Inc., and respondent Philippine National Bank, according to their respective
interests, the following amounts:

(1) The unpaid balance of the just compensation in the amount of P13,473,408.53 for the taking of the
subject lots with an aggregate area of 23,563 square meters (sq. m.);

(2) The amount of P3,798,480.00 representing the consequential damages equivalent to 50% of the
Bureau of Internal Revenue zonal valuation of the affected lots, with a net area of 446,880 sq. m., as of
the date of the filing of the complaint; and

(3) Legal Interest on the total amount of just compensation, i.e., the unpaid balance plus consequential
damages, at the rate of 12% per annum (p.a.) from the time of actual taking on December 19, 2003, up
to June 30, 2013, and thereafter, at 6% p.a. until full payment.

SO ORDERED.

Hernando, Inting, Lopez,* and Gaerlan,** JJ., concur.