Land Bank of the Philippines v. Court of Appeals
REITERATIONFacts
The Antecedents: Private respondent Jose Pascual owned three parcels of land subject to the Government's agrarian reform program under PD 27 and EO 228. The Department of Agrarian Reform (DAR) placed these lands under Operation Land Transfer (OLT). The Provincial Agrarian Reform Officer (PARO) recommended an Average Gross Production (AGP) for Parcels 1 and 2. Subsequently, the Office of the Secretary of Agrarian Reform (SAR) valued Parcel 1 based on a different AGP and directed the Land Bank of the Philippines (LBP) to pay. Private respondent Pascual, disagreeing with the PARO's recommended AGP, filed a petition with the Department of Agrarian Reform Adjudication Board (DARAB) to annul the recommendation. Pascual presented evidence, including an earlier OLT Valuation Form and Tax Declarations, to support his claim that the AGP was undervalued. Procedural History: The Provincial Agrarian Reform Adjudicator (PARAD) ruled in favor of Pascual, nullifying the PARO's AGP recommendation and applying the AGP from the 1976 OLT Valuation Form and Tax Declarations. The PARAD ordered LBP to pay Pascual a total of P1,961,950.00. Pascual accepted the valuation, and the judgment became final and executory. However, LBP refused to pay. The DAR Secretary directed LBP to pay, but LBP reiterated its stand that the PARAD lacked jurisdiction. Pascual then filed an action for Mandamus with the Court of Appeals to compel LBP to pay. The appellate court granted the Writ of Mandamus and ordered LBP to pay the amount with 6% compounded interest per annum. LBP's motion for reconsideration was denied. The Petition: LBP filed a petition with the Supreme Court, arguing that the Court of Appeals erred in issuing the Writ of Mandamus and imposing interest, primarily on the grounds that the PARAD lacked jurisdiction to value lands under PD 27, that LBP could not be compelled to perform an act beyond its legal duty without the farmer-beneficiary's consent, and that other adequate legal remedies were available to Pascual.
Issue(s)
Whether the Provincial Agrarian Reform Adjudicator (PARAD) has jurisdiction to determine the valuation of lands covered by Presidential Decree No. 27 (PD 27). Whether the consent of the farmer-beneficiary is indispensable for the Land Bank of the Philippines (LBP) to be legally bound to finance the land valuation. Whether a Writ of Mandamus is the proper remedy to compel LBP to pay the determined land valuation, considering the availability of other legal remedies, and the propriety of imposing 6% compounded interest.
Ruling
The Supreme Court affirmed the Decision of the Court of Appeals granting the Writ of Mandamus, directing LBP to pay Jose Pascual the total amount of P1,961,950.00. However, the Court modified the decision by deleting the 6% compounded interest per annum, as it was no longer applicable due to the higher Government Support Price (GSP) used in the valuation.
Ratio Decidendi
On the jurisdiction of the PARAD to determine land valuation under PD 27: The Court held that the contention of LBP that Section 12(b) of PD 946 remains in effect, vesting exclusive jurisdiction on the Secretary of Agrarian Reform for the valuation of lands under PD 27, is untenable. The Court clarified that Section 17 of Executive Order No. 229 and Section 50 of Republic Act No. 6657 (RA 6657) should be deemed to have repealed Section 12(a) and (b) of PD 946. Therefore, the DARAB, through the PARAD, has the authority to determine the initial valuation of lands involving agrarian reform, although such valuation is preliminary and the final determination of just compensation rests with the courts. The Secretary of Agrarian Reform's Memorandum Circular directing DARAB officials to refrain from hearing valuation cases involving PD 27 lands was deemed erroneous. On the necessity of farmer-beneficiary consent for LBP financing: The Court ruled that the consent of the farmer-beneficiary is not required under Section 18 of RA 6657 for the appraisal of land value. This section explicitly states that the LBP shall compensate the landowner in an amount agreed upon by the landowner and the DAR and LBP, or as finally determined by the court. The law does not mention the participation of the farmer-beneficiary in this agreement. The Court further emphasized that RA 6657 includes PD 27 lands among those to be acquired and distributed, and its provisions, including Sections 16, 17, and 18, should be adhered to. The argument that LBP's financing scheme under PD 251 requires the beneficiary's consent was dismissed, as the law does not mandate such concurrence for the establishment of the vinculum juris for proper compensation. On the availability of other legal remedies, the propriety of Mandamus, and the imposition of 6% compounded interest: The Court found that the remedies suggested by LBP were not plain, adequate, and complete. The writ of execution issued by the PARAD was not implemented due to LBP's refusal to pay, and attempts to seek assistance from the DAR Secretary were also unsuccessful. The Court reasoned that it would be redundant for Pascual to seek a final resolution from the DAR when the Secretary had already directed LBP to pay according to the PARAD's decision. Furthermore, filing a case with the Special Agrarian Court was deemed unnecessary because LBP never contested the PARAD's valuation, which had become final and executory. Given LBP's consistent refusal to comply with the final and executory judgment, Mandamus was deemed the appropriate remedy to compel LBP to perform its legal duty. The Court deleted the 6% compounded interest imposed by the Court of Appeals. It explained that DAR Administrative Order No. 13, Series of 1994, which prescribed this interest, was intended to compensate landowners for unearned interests had they been paid in 1972 using the GSP of P35.00 for palay and P31.00 for corn. However, the PARAD used a significantly higher GSP (P300.00 for palay and P250.00 for corn) in its valuation. Since the PARAD had already increased the GSP, applying the formula in AO No. 13, which includes a 6% compounded interest, would be redundant and would result in an overcompensation.
Main Doctrine
The Land Bank of the Philippines (LBP) cannot refuse to pay the determined valuation of land under Presidential Decree No. 27 (PD 27) and Executive Order No. 228 (EO 228) simply because the farmer-beneficiary has not explicitly consented to the valuation, as the consent of the farmer-beneficiary is not required under Section 18 of Republic Act No. 6657 (RA 6657) for the appraisal of land value. The LBP's agreement to the valuation, evidenced by its participation in the proceedings and failure to appeal, obligates it to finance the transaction.