Del Valle Vda. de Ortiz v. Land Bank of the Philippines
REITERATIONFacts
The Antecedents: Ildefonso Ortiz owned parcels of land affected by Presidential Decree No. 27 (PD 27), which mandated the emancipation of tenants and transfer of land ownership. Under PD 27, tenants were to pay landowners directly. However, Presidential Decree No. 251 (PD 251) was later promulgated, stipulating that the Land Bank of the Philippines (Land Bank) would pay landowners, and tenants would then pay the Land Bank. Ortiz elected to be paid under the first mode of settlement: 10% cash and the balance in 25-year tax-free 6% Land Bank bonds. The Land Bank paid Ortiz P1,564,359.00 on April 1, 1974, after deducting P11,141.00 representing rentals paid by tenants from October 21, 1972. Ortiz executed deeds of assignment of rights in favor of the Land Bank. Procedural History: On October 24, 1975, Ortiz filed a complaint against the Land Bank, alleging entitlement to 6% interest per annum from October 21, 1972. The Court of First Instance of Manila, Branch XXII, dismissed the complaint on November 23, 1976. The Petition: The heirs of Ildefonso Ortiz appealed the dismissal, contending that PD 27, PD 85, and PD 251 obliged the Land Bank to pay 6% interest from October 21, 1972.
Issue(s)
Whether the Land Bank is obligated to pay 6% interest on the acquisition price of Ortiz's lands from October 21, 1972, to April 1, 1974. Whether the deduction of P11,141.00 for rentals paid by tenants from October 21, 1972, was proper.
Ruling
The Supreme Court affirmed the decision of the Court of First Instance of Manila, dismissing the complaint. The Court held that the Land Bank is not obligated to pay interest for the period between October 21, 1972, and April 1, 1974, and that the deduction for rentals was proper.
Ratio Decidendi
On the issue of the Land Bank's obligation to pay interest: The Court ruled that Presidential Decree No. 27 and Presidential Decree No. 85, cited by the petitioners, primarily deal with the relationship between the tenant-farmer and the landowner, specifically concerning the manner of payment by the tenant in 15 equal annual amortizations and the guarantee of such payment. These decrees do not mention the Land Bank nor impose an obligation on it to pay interest from October 21, 1972. Presidential Decree No. 251 is the law that empowers the Land Bank to finance and/or guarantee the acquisition of farm lots under PD 27. Section 7 of PD 251 enumerates the modes of payment by which the Land Bank shall finance the acquisition, and Ortiz elected the first mode, which involved cash and Land Bank bonds that would earn 6% interest per year. The Court emphasized that the law is clear and categorical, and there is no provision or hint of an obligation for the Land Bank to pay interest from the promulgation date of PD 27. The subrogation clause in PD 251, where the Bank is subrogated to the landowner's right to collect amortizations from tenant-farmers, does not imply an obligation for the Land Bank to pay interest to the landowner from the decree's promulgation date. The Court also noted that Ortiz, in his executed affidavits, agreed that bond certificates would earn interest only from the date of approval of his claim for payment, not earlier. On the issue of the deduction for rentals: The Court found no error in the Land Bank's deduction of P11,141.00, which represented rentals paid by the tenant-farmers to Ortiz from October 21, 1972. This deduction was made in compliance with Department Memorandum Circular No. 8 issued by the Department of Agrarian Reform in 1974. The Court reiterated that the law is clear and does not warrant interpretation beyond its plain meaning.
Main Doctrine
The Land Bank is not obligated to pay interest on the acquisition price of lands covered by Presidential Decree No. 27 for the period between the promulgation of the decree and the actual payment, as the law does not explicitly provide for such an obligation, and the landowner's election of payment modes and execution of affidavits affirming the commencement of interest accrual upon claim approval negate the claim for back interest.