Land Bank v. Dizon
REITERATIONFacts
The Antecedents: The respondent owned a 25.0-hectare unirrigated parcel covered by TCT No. 85458. On 1995-05-25 the Department of Agrarian Reform (DAR) served a Notice of Acquisition informing the owner that the property was to be taken for distribution under the Comprehensive Agrarian Reform Program and that the Land Bank of the Philippines (LBP) would determine the value pursuant to Executive Order No. 4054. Following ocular inspection, on 1995-09-19 the DAR sent a Notice of Land Valuation and Acquisition, and the LBP set a preliminary valuation of ₹24,638.09 per hectare for the CARP-covered portion based on DAR Administrative Order No. 11, series of 1994. The landowner rejected the valuation and elevated the matter to the Tarlac DAR Adjudication Board (DARAB). Procedural History: On 1999-03-24 the DARAB fixed just compensation at ₹163,911.65 per hectare based on a comparable farmholding. The LBP filed a petition before the Regional Trial Court, Branch 63, Tarlac City, acting as a Special Agrarian Court (RTC-SAC), docketed as Agrarian Case No. 156, on 1999-07-07. The RTC-SAC, without receiving evidence from the landowner, affirmed the DARAB ruling on 2000-07-20 and denied reconsideration on 2000-08-18. The Court of Appeals affirmed the RTC-SAC in a decision dated 2003-07-31 and denied LBP's motion for reconsideration on 2003-10-08. LBP filed a petition for review on certiorari before the Supreme Court, which rendered the present decision on 2009-11-27. The Petition: LBP assailed the CA decision on two main grounds: (1) that the RTC-SAC erred in relying on the DARAB decision instead of conducting its own independent evaluation of the facts and evidence; and (2) that there was no substantial evidence presented before the DARAB to determine the correct amount of just compensation.
Issue(s)
Whether the RTC-SAC erred in relying on the DARAB decision instead of conducting its own independent evaluation of the facts and evidence presented by the parties. Whether there was substantial evidence presented before the DARAB to determine the correct amount of just compensation.
Ruling
The petition is denied insofar as the Land Bank of the Philippines seeks to have its valuation sustained. The Court reversed and set aside the decision of the Court of Appeals dated 2003-07-31 and its resolution dated 2003-10-08 in CA-G.R. CV No. 68428 for lack of factual and legal basis, and remanded Agrarian Case No. 156 to the Regional Trial Court, Branch 63, Tarlac City, for trial on the merits using appropriate procedures and applying the mandated standards in the determination of just compensation.
Ratio Decidendi
On Whether the RTC-SAC erred in relying on the DARAB decision: The Court reaffirmed that under Section 57 of Republic Act No. 6657 the RTC, sitting as a Special Agrarian Court, has original and exclusive jurisdiction to determine just compensation; this means that the RTC-SAC is not merely an appellate tribunal reviewing DARAB findings. Applying Republic v. Court of Appeals and Philippine Veterans Bank v. Court of Appeals, the Court explained that preliminary administrative valuations by DAR adjudicators do not divest the RTC of its original authority to hear evidence, receive testimony, and make an independent determination on just compensation. The Court emphasized that the RTC-SAC should conduct a full-blown trial when necessary, including receiving evidence and appointing commissioners under Section 58, and should not simply adopt the DARAB's resolution. The failure of the RTC-SAC in this case to hold a proper hearing and to independently evaluate the evidence constituted a procedural lapse and a violation of due process. Therefore, the CA erred in affirming the RTC-SAC's wholesale adoption of the DARAB decision without independent consideration. On Whether there was substantial evidence before the DARAB to determine just compensation: The Court examined the evidentiary basis of the DARAB decision and found it insufficient to support the high valuation it awarded because DARAB relied principally on an allegation in the landowner's position paper regarding a comparable parcel, without independent proof of comparability. The LBP did present evidence before the RTC-SAC showing how it computed ₹24,638.09 per hectare, but that evidence was also inadequate because it relied only on two factors (average gross production and market value per tax declaration) and failed to take into account the full list of factors enumerated in Section 17 of RA 6657. The Court reiterated that DAR Administrative Order No. 5, series of 1998 provides the formula that must be considered in tandem with Section 17 factors and that both the DARAB and the RTC-SAC must respect these guidelines. Given the insufficiency of evidence from both sides and the RTC-SAC's procedural defects, the Supreme Court concluded that it could not, on the record presented, properly fix the just compensation and therefore remanded the case for a full trial on the merits applying the mandated standards and AO No. 5-98.
Main Doctrine
The RTC, sitting as a Special Agrarian Court (RTC-SAC), has original and exclusive jurisdiction to determine just compensation under RA 6657 and must conduct an independent, full hearing and make an independent determination of facts and law rather than merely adopting the preliminary valuation of the DAR Adjudication Board; determination of just compensation must apply the factors in Section 17 of RA 6657 and the formula in DAR Administrative Order No. 5, series of 1998.