Department of Agrarian Reform v. Goduco
REITERATIONFacts
The Antecedents: Manolo Goduco (Goduco) was the heir of Illuminada Villanueva Vda. De Goduco, the registered owner of several parcels of land. These lands were placed under the Operation Land Transfer Program of the government pursuant to Presidential Decree (P.D.) No. 27 and distributed to farmer-beneficiaries. The Land Bank of the Philippines (LBP) fixed the value of the land for just compensation, which Goduco found to be inadequate. Goduco filed a Petition for Determination of Just Compensation before the Regional Trial Court (RTC) of Cabanatuan City, designated as the Special Agrarian Court (SAC), alleging that the valuation was fixed without his or his mother's knowledge and was confiscatory. Procedural History: The SAC ordered DAR and LBP to pay Goduco P496,140.00 with 6% legal interest per annum from the date of taking on May 24, 1995. The Department of Agrarian Reform (DAR) and LBP appealed to the Court of Appeals (CA). The CA, in two separate divisions, affirmed the SAC's decision but modified it by deleting the 6% interest. DAR and LBP filed separate Petitions for Review on Certiorari before the Supreme Court. The Petition: Petitioners DAR and LBP argued that P.D. No. 27 and Executive Order (E.O.) No. 228, not Republic Act (R.A.) No. 6657, should govern the valuation of the land. They also contended that the date of taking should be October 21, 1972, and that interest should not have been imposed.
Issue(s)
Whether Republic Act No. 6657 governs the valuation of land covered by emancipation patents issued under Presidential Decree No. 27, or if Presidential Decree No. 27 and Executive Order No. 228 should apply; and what is the reckoning date for determining just compensation. Whether interest should be imposed on the just compensation from the date of taking.
Ruling
The Supreme Court denied both appeals, ordered the remand of the case to the trial court for the computation of just compensation based on the formula under Administrative Order No. 05, Series of 1998, and deleted the interest imposed on the just compensation.
Ratio Decidendi
On the applicable law, reckoning date for just compensation: The Court reiterated its standing jurisprudence that the agrarian reform process is considered incomplete until just compensation is paid. Therefore, if R.A. No. 6657 was enacted during the pendency of the process and before payment of just compensation, it becomes the applicable law for determining such compensation. The Court held that R.A. No. 6657 did not repeal P.D. No. 27 and E.O. No. 228 but gave them suppletory effect. This principle was established in cases like Land Bank of the Philippines v. Natividad and Paris v. Alfeche. The Court emphasized that the "seizure" of the landholding under P.D. No. 27 takes effect upon payment of just compensation, not on the decree's effectivity date. Consequently, when R.A. No. 6657 is the applicable law, the determination of just compensation must be concluded under its provisions. The Court clarified that unlike cases where only R.A. No. 6657 applied from acquisition to payment, this case involved a choice between an earlier law (P.D. No. 27) and a later law (R.A. No. 6657) due to the uncompleted process. On the imposition of interest: The Court ruled that when just compensation is determined under R.A. No. 6657, no incremental, compounded interest of six percent (6%) per annum shall be assessed. The Court clarified that the 12% interest sometimes granted in expropriation cases is a penalty for damages due to delay in payment, not on the computed just compensation itself. The Court cited Land Bank of the Philippines v. Chico in support of this ruling, stating that the interest applies only to lands taken under P.D. No. 27 and E.O. No. 228, pursuant to Administrative Order No. 13, Series of 1994, and not under Section 26 of R.A. No. 6657.
Main Doctrine
The agrarian reform process is considered incomplete until just compensation is paid. Consequently, Republic Act No. 6657, which was enacted during the pendency of the process, governs the determination of just compensation, with Presidential Decree No. 27 and Executive Order No. 228 having suppletory effect. Interest is not imposed on awards determined under R.A. 6657.