Apo Fruits Corporation and Hijo Plantation, Inc. v. Land Bank of the Philippines
MODIFICATIONFacts
1. The Antecedents: This case concerns the just compensation owed to petitioners Apo Fruits Corporation and Hijo Plantation, Inc. for lands expropriated by the government for agrarian reform. The core dispute revolves around the valuation of these lands and the subsequent delay in payment, which petitioners argue should include 12% interest per annum. The government, represented by the Land Bank of the Philippines (LBP), initially valued the properties significantly lower than the Regional Trial Court (RTC) and the Supreme Court eventually determined. 2. Procedural History: The case has a lengthy procedural history. After the LBP's initial low valuation and partial payments, the RTC determined a much higher just compensation and awarded 12% interest. The Supreme Court's Third Division initially affirmed this but later deleted the interest on reconsideration. Despite entry of judgment, petitioners filed a second motion for reconsideration, leading to the case being referred to the Court en banc. The en banc initially denied this motion. However, petitioners filed a third motion for reconsideration, which the en banc, on October 12, 2010, granted, restoring the 12% interest. The LBP then filed the present second motion for reconsideration, which is the subject of this resolution. 3. The Petition: The respondent, Land Bank of the Philippines, filed a second motion for reconsideration, arguing that the test of "transcendental importance" does not apply, that the doctrine of immutability of judgment should be upheld, and that the Court ignored constitutional deliberations on just compensation. They also argued that only 6% interest is permissible. The Office of the Solicitor General sought to intervene on behalf of the Republic. The Supreme Court, in this resolution, denies the LBP's second motion for reconsideration and the OSG's intervention, reiterating that the case involves overriding public interest and that the delay in payment warrants the 12% interest previously awarded.
Issue(s)
Whether the October 12, 2010 Resolution is void for failing to secure a two-thirds vote to 'entertain' a second motion for reconsideration as required by the Internal Rules of the Supreme Court. Whether the doctrine of immutability of judgment prevents the Court from restoring the 12% interest after an entry of judgment had been made. Whether the 12% interest rate is justified despite the LBP's claim that it acted in good faith and that the delay was procedural.
Ruling
The Supreme Court DENIED the Land Bank of the Philippines' second motion for reconsideration and the motion for oral arguments with ABSOLUTE FINALITY. The motion for intervention by the Office of the Solicitor General was likewise DENIED. The Court reiterated that no further pleadings shall be entertained.
Ratio Decidendi
On Issue 1: The Court ruled that while Section 3, Rule 15 of the Internal Rules of the Supreme Court (IRSC) requires a two-thirds vote to 'entertain' a second motion for reconsideration, this procedural rule must be read in harmony with Article VIII, Section 4(2) of the 1987 Constitution. The Constitution requires only a majority of the members who took part in the deliberations to decide a case En Banc. Since twelve members participated in the October 12, 2010 Resolution and eight voted to grant the motion, the constitutional requirement for a valid decision was met. The Court's act of voting on the merits of the motion itself demonstrated its collective decision to 'entertain' the motion, even without a separate, express vote on the procedural hurdle. Therefore, the resolution was not void, as the constitutional mandate on voting takes precedence over internal procedural rules. On Issue 2: The Court held that the doctrine of immutability of judgment is subject to exceptions in the 'higher interest of justice.' This case involves the constitutional right to just compensation, which is a matter of public interest and transcendental importance because it affects the integrity of the agrarian reform program. The Court clarified that 'transcendental importance' is not limited to questions of legal standing but serves to highlight the overriding public interest in ensuring that constitutional standards are met by the government. To allow a patently unjust deletion of interest to stand would result in an unconstitutional taking of property without just compensation. Thus, the Court has the inherent power to suspend its own rules or create exceptions to finality to prevent a miscarriage of justice. On Issue 3: The Court found that the 12% interest was necessary because the Land Bank of the Philippines (LBP) was guilty of gross negligence and unconscionable delay. The LBP's initial valuation was only about 19% of the actual value determined by the courts, which the Court characterized as a lack of good faith. The landowners were deprived of their property and its fruits for twelve years (1996 to 2008) while receiving only a 'trifling' initial payment. The Court emphasized that just compensation must be paid in full and without delay; otherwise, the government is unjustly enriched by the income earned on the withheld funds. The 12% interest rate serves as a compensatory measure for the loss of the use of the money and the fruits of the land during the period of the government's default.
Main Doctrine
The Supreme Court En Banc may entertain a second (or even third) motion for reconsideration in the 'higher interest of justice' to correct a patently unjust decision, even after an entry of judgment has been made. While the Internal Rules of the Supreme Court require a two-thirds vote to 'entertain' such a motion, the Constitutional requirement of a simple majority concurrence for a decision on the merits remains the ultimate standard for the validity of the resulting resolution. In the context of agrarian reform, just compensation necessarily includes the prompt payment of the full value of the land, and any significant delay attributable to the government's gross undervaluation justifies the imposition of 12% interest per annum to prevent unjust enrichment by the State and to indemnify the landowner for the loss of the property's fruits.