Land Bank v. Wycoco
REITERATIONFacts
The Antecedents: Feliciano F. Wycoco was the registered owner of a 94.1690-hectare unirrigated and untenanted rice land. He voluntarily offered to sell the land to the Department of Agrarian Reform (DAR) for P14.9 million. The Land Bank of the Philippines (LBP) evaluated the land and determined the just compensation. DAR sent Wycoco a notice of intention to acquire 84.5690 hectares for P1,342,667.46, which was later modified to P2,280,159.82. Wycoco rejected the offer. The DAR indorsed the case to the Department of Agrarian Reform Adjudication Board (DARAB) for fixing just compensation. DARAB requested LBP to open a trust account in Wycoco's name and deposited the offered compensation. The property was distributed to farmer-beneficiaries. Procedural History: Wycoco, instead of filing a memorandum before DARAB, filed a case for determination of just compensation with the Regional Trial Court (RTC) of Cabanatuan City, Branch 23, acting as a Special Agrarian Court (SAC). DAR and LBP filed their answers, contending that the RTC lacked jurisdiction due to failure to exhaust administrative remedies and that the valuation was lawful. DARAB dismissed its administrative case to give way to the SAC's determination. The RTC, after pre-trial, allowed parties to submit memoranda. The RTC, taking judicial notice of the prevailing market value of agricultural lands in Licab, Nueva Ecija, fixed the compensation at P142,500.00 per hectare, totaling P13,428,082.00, and awarded actual damages for unrealized profits plus legal interest. DAR and LBP appealed. The Court of Appeals (CA) modified the RTC decision by deducting the value of a portion of the land previously sold by Wycoco to the Republic. The Petition: Land Bank of the Philippines (LBP) filed a petition for review, assailing the CA's decision on issues of jurisdiction, evidentiary basis for compensation, inclusion of unacquired portions, award of interest and damages, and execution pending appeal. Wycoco filed a petition for mandamus to compel the execution of the RTC decision and the inhibition of the judge.
Issue(s)
Whether the Regional Trial Court, acting as Special Agrarian Court, validly acquired jurisdiction over the case for determination of just compensation. Whether the compensation determined by the trial court was supported by substantial evidence. Whether Wycoco can compel the DAR to purchase the entire land subject of the voluntary offer to sell. Whether the awards of interest and damages for unrealized profits were valid.
Ruling
The petition in G.R. No. 140160 is PARTIALLY GRANTED. Agrarian Case No. 91 (AF) is REMANDED to the Regional Trial Court of Cabanatuan City, Branch 23, for the determination of just compensation. The petition for mandamus in G.R. No. 146733 is dismissed.
Ratio Decidendi
On the issue of jurisdiction: The Regional Trial Court, acting as a Special Agrarian Court (SAC), has original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, as provided by Section 57 of Republic Act No. 6657. This jurisdiction is not undermined by administrative proceedings, and direct resort to the SAC by a landowner is valid. In this case, the trial court properly acquired jurisdiction. Furthermore, DAR and LBP's conformity to the pre-trial order, which limited the issue to the determination of just compensation, estopped them from questioning the jurisdiction. The DARAB's dismissal of the administrative case also rendered the issue of exhaustion of administrative remedies moot. On the evidentiary basis for compensation: The trial court erred in taking judicial notice of the prevailing market value of agricultural lands in Licab, Nueva Ecija without apprising the parties and allowing them to present evidence on valuation factors. The determination of just compensation requires consideration of factors such as cost of acquisition, current value of like properties, size, shape, location, and tax declarations. Since these factors were not considered, a remand of the case for proper determination of just compensation is necessary. The power to take judicial notice must be exercised with caution, and personal knowledge of the judge is not a substitute for judicial knowledge of the court. On compelling DAR to purchase the entire land: The DAR cannot be compelled to purchase the entire property voluntarily offered by Wycoco. The determination of whether a parcel of land falls within the coverage of the Comprehensive Agrarian Reform Program (CARP) is lodged with the DAR. Wycoco's claim of damages due to the non-acquisition of a portion of the land not suitable for agriculture does not justify compelling the DAR to acquire the whole area. On the awards of interest and damages for unrealized profits: The claim for actual damages for unrealized profits was deleted for lack of competent proof. The amount of loss must be proven with reasonable certainty, supported by receipts or other documentary proof, which were not presented. However, the award of interest is partly meritorious. The trust account opened by LBP in Wycoco's name should be converted to a deposit account, retroactive in application. The just compensation due Wycoco should bear 12% interest per annum from the time LBP opened the trust account until the account was converted to cash and LBP bonds deposit accounts. The basis for this interest would be the just compensation determined by the SAC upon remand. The interest earnings on cash and bond deposits would also apply from the time of taking up to actual payment.
Main Doctrine
The Regional Trial Court, acting as a Special Agrarian Court, has original and exclusive jurisdiction over petitions for the determination of just compensation, and direct resort to such court is valid even without prior completion of administrative proceedings. However, the determination of just compensation cannot be based solely on judicial notice without affording parties the opportunity to present evidence on valuation factors, necessitating a remand for proper determination.