Land Bank v. Ferrer
REITERATIONFacts
The Antecedents: Respondents, the Ferrers, were the owners of an agricultural land. They discovered that an Emancipation Patent was issued for a portion of their land without just compensation. The Land Bank of the Philippines (LBP) fixed the just compensation at a low amount, which the Ferrers alleged violated Republic Act (R.A.) No. 6657. The LBP and the Department of Agrarian Reform (DAR) contended that Presidential Decree (P.D.) No. 27 and Executive Order (E.O.) No. 228 should apply, as the land was covered by the Operation Land Transfer (OLT) Program. Procedural History: The Regional Trial Court (RTC), after appointing commissioners, fixed the just compensation at P208,000.00 per hectare. The RTC denied the motions for reconsideration filed by the LBP and DAR. Both the LBP and DAR appealed to the Court of Appeals (CA). The CA affirmed the RTC decision, ruling that R.A. No. 6657, not P.D. No. 27, should govern the determination of just compensation because the agrarian reform process was incomplete, with payment of just compensation being the act that completes the process. The CA reasoned that R.A. No. 6657 was the primary law, and P.D. No. 27 and other agrarian laws would only apply suppletorily. The Petition: The LBP and DAR filed separate petitions for review before the Supreme Court, which were consolidated. They argued that P.D. No. 27 and E.O. No. 228 should apply, as the land was tenanted in 1972. They also questioned the appointment of commissioners. The Ferrers adopted the CA's ruling.
Issue(s)
Whether the Court of Appeals erred in ruling that R.A. No. 6657, rather than P.D. No. 27/E.O. No. 228, is the law that should apply in the determination of just compensation for the subject agricultural land. Whether the appointment of commissioners was proper.
Ruling
The Supreme Court denied the petitions for review on certiorari. It affirmed the ruling of the Court of Appeals that Republic Act No. 6657 governs the determination of just compensation in this case. The Court also found the appointment of commissioners to be proper.
Ratio Decidendi
On the applicable law for just compensation: The Court reiterated its established jurisprudence that when the agrarian reform process, particularly the determination and payment of just compensation, remains incomplete upon the effectivity of Republic Act No. 6657, then R.A. No. 6657 shall govern the conclusion of the process. The Court emphasized that it would be inequitable to determine just compensation based on the guidelines of P.D. No. 27 and E.O. No. 228, especially when the DAR failed to determine the just compensation for a considerable length of time. The Court stressed that just compensation must be the full and fair equivalent of the property taken, and R.A. No. 6657 provides the necessary guideposts for such determination. The Court cited previous cases such as Land Bank of the Philippines v. Hon. Eli G. C. Natividad, Paris v. Alfeche, and Land Bank of the Philippines v. Manuel O Gallego, Jr., which consistently held that R.A. No. 6657 applies suppletorily to lands covered by P.D. No. 27 if the process was not completed before R.A. No. 6657's effectivity. The Court further explained that R.A. No. 6657 explicitly includes lands under P.D. No. 27 among those to be acquired and distributed, necessitating adherence to its provisions for just compensation. The Court also highlighted the equitable consideration that landowners should not be prejudiced by the delay in payment, especially when the land has already been distributed to farmer-beneficiaries. On the appointment of commissioners: The Court held that the issue of the appointment of commissioners was not properly raised and ventilated in the trial courts and was only brought up for the first time on appeal. Nevertheless, the Court found the appointment to be proper, particularly because the applicable law is R.A. No. 6657, which provides for the determination of just compensation, implying the need for expert assistance if required.
Main Doctrine
When the agrarian reform process, specifically the determination and payment of just compensation, remains incomplete upon the effectivity of Republic Act No. 6657 (Comprehensive Agrarian Reform Law), the said law, not Presidential Decree No. 27 or Executive Order No. 228, shall govern the determination and conclusion of the process, with PD 27 and EO 228 having only suppletory effect.