Land Bank v. Heirs of Domingo
REITERATIONFacts
The Antecedents: Angel T. Domingo was the registered owner of 300.4023 hectares of land. Pursuant to PD 27 and EO 228, 262.2346 hectares were taken by the government for agrarian reform and awarded to tenant farmers. The Department of Agrarian Reform (DAR) fixed the land value at P2,086,735.09 based on PD 27 and EO 228 guidelines, which Domingo rejected. Land Bank of the Philippines (LBP) deposited P1,845,999.71 as partial payment, and the remaining P868,191.66 was also deposited. Procedural History: Domingo filed a petition for determination of just compensation, praying for P39,335,190.00 based on RA 6657. The Regional Trial Court (RTC), acting as a Special Agrarian Court, ruled that the date of taking should be the issuance dates of the emancipation patents, not October 21, 1972. It computed just compensation at P15,223,050.91 using a modified formula and directed LBP and DAR to pay this amount. LBP's motion for reconsideration was denied. The Court of Appeals affirmed the RTC's decision. The Petition: LBP filed a Petition for Review before the Supreme Court, questioning the Court of Appeals' rulings on the date of taking and the applicability of RA 6657 for determining just compensation for lands acquired under PD 27 and EO 228.
Issue(s)
Whether the taking of Domingo’s riceland should be reckoned from the issuance of emancipation patents or upon the effectivity of PD 27 on October 21, 1972. Whether RA 6657 should apply in the determination of just compensation of riceland taken under PD 27 and EO 228, and how just compensation should be computed.
Ruling
The Supreme Court affirmed with modification the decision of the Court of Appeals. It ordered the RTC to proceed with the computation of the final valuation of the subject land in accordance with its Decision, deducting the partial payment already made.
Ratio Decidendi
On the applicability of RA 6657 and the date of taking: The Court reiterated that Republic Act No. 6657 (RA 6657), the Comprehensive Agrarian Reform Law, covers rice and corn lands under Presidential Decree No. 27 (PD 27) and that the provisions of PD 27 and Executive Order No. 228 (EO 228) have suppletory effect. The Court emphasized that the determination of just compensation should be in accordance with Section 17 of RA 6657, which provides a more comprehensive guide for valuation, ensuring that just compensation is the full and fair equivalent of the property taken. This is particularly imperative because the agrarian reform process remained incomplete, with just compensation yet to be settled when RA 6657 was enacted. The Court clarified that the seizure of the landholding does not take place on the date of effectivity of PD 27 but rather upon the payment of just compensation. Therefore, the date of taking for the purpose of computing just compensation should be reckoned from the issuance dates of the emancipation patents, as these patents signify the transfer of ownership to the farmer-beneficiaries and vest them with a right to ownership, subject to the landowner's right to just compensation. The Court found LBP's contention that the taking occurred on October 21, 1972, to be erroneous, as title to the property only passes to the expropriator upon full payment of just compensation. On the computation of just compensation: The Court affirmed the lower courts' findings that the Average Gross Production (AGP) of 91.42 cavans per hectare, as certified by DAR officials, should prevail over the lower figure proposed by LBP. However, the Court modified the ruling by stating that the just compensation should be computed in accordance with Lubrica v. Land Bank, and the partial payment of P1,845,999.71 should be deducted from the final computation. The Court also noted that since the trial court's decision utilized a higher Gross Selling Price (GSP), Domingo would no longer be entitled to the 6% incremental interest provided under DAR Administrative Order No. 13.
Main Doctrine
The determination of just compensation for lands acquired under Presidential Decree No. 27 (PD 27) should be in accordance with Section 17 of Republic Act No. 6657 (RA 6657), and the date of taking for purposes of computing just compensation is reckoned from the issuance dates of the emancipation patents, not from the effectivity of PD 27.