Land Bank v. Bona
REITERATIONFacts
1. The Antecedents: Rokaya Narrazid-Bona owned a 338.2826-hectare property in Bataraza, Palawan. Between December 1989 and November 1990, the Department of Agrarian Reform (DAR) issued emancipation patents under the Operation Land Transfer (OLT) program, covering 76.2380 hectares of her land, without her alleged consent or knowledge, asserting the beneficiaries were not her tenants but squatters. Concurrently, the DAR sent a Notice of Acquisition to Rokaya's mother, placing 168.8379 hectares under the Comprehensive Agrarian Reform Program (CARP) with a proposed compensation of P3,866.36 per hectare. Rokaya objected to this valuation and later filed a complaint, which was dismissed. Subsequently, a DAR Regional Adjudicator fixed the compensation for a 121.5212-hectare portion at P14,084.50 per hectare. Rokaya eventually agreed to a higher valuation of P98,633.00 per hectare for this portion, totaling P11,986,001.00, and later filed another complaint seeking a higher compensation for the 76.2380-hectare portion, arguing it should be valued no less than the 121.5212-hectare portion. 2. Procedural History: Rokaya Narrazid-Bona initially filed a complaint in October 1993 before the Regional Trial Court (RTC) of Puerto Princesa City, Palawan, which was dismissed. Following this, a DAR Regional Adjudicator fixed the just compensation for a portion of the land. Rokaya later filed another complaint in July 2000 before the same RTC, seeking a higher compensation for the 76.2380-hectare portion. The RTC, on October 11, 2004, fixed the just compensation for this portion at P56,250.00 per hectare, totaling P4,288,387.05, and awarded attorney's fees. The RTC ruled that this portion was acquired under Presidential Decree No. 27 (P.D. No. 27) and recomputed the value using the formula based on the Land Bank v. Court of Appeals ruling. The Land Bank of the Philippines (LBP) appealed this decision to the Court of Appeals (CA). The CA reversed the RTC's decision, finding that the lands were not acquired under P.D. No. 27 but under Republic Act No. 6657 (R.A. 6657), and remanded the case for further proceedings. 3. The Petition: The Land Bank of the Philippines (LBP) filed a Petition for Review on Certiorari with the Supreme Court, challenging the Court of Appeals' decision. LBP argued that the appellate court erred in reversing the RTC's finding that the land was under the coverage of R.A. 6657 and not P.D. No. 27. LBP insisted that the lands were covered by the OLT Program under P.D. No. 27, not compulsory acquisition under R.A. 6657, presenting Orders of Placement and a Deed of Assignment, Warranties and Undertaking (DAWU) signed by Rokaya as evidence of her assent to the OLT program. LBP contended that applying R.A. 6657 to properties acquired under P.D. No. 27 would result in retroactive application of the law. The Supreme Court, however, partially denied the appeal, agreeing that the land was acquired under P.D. No. 27 but ruling that the determination of just compensation should be completed under R.A. 6657, as the agrarian reform process was incomplete due to unpaid compensation. The case was remanded to the trial court for computation of just compensation based on Section 17 of R.A. 6657 and DAR Administrative Order No. 5, Series of 1998.
Issue(s)
Whether the 76.2380 hectare-portion of land was acquired under P.D. No. 27 or R.A. No. 6657. Whether the just compensation for the 76.2380 hectare-portion should be computed under P.D. No. 27 or R.A. No. 6657. Whether the application of R.A. No. 6657 to lands acquired under P.D. No. 27 constitutes retroactive application.
Ruling
The Supreme Court affirmed the Court of Appeals' decision to remand the case to the Regional Trial Court for further proceedings, but clarified the applicable law for the computation of just compensation. The Court ruled that while the land was acquired under P.D. No. 27, the just compensation must be determined in accordance with R.A. No. 6657 because the agrarian reform process remained incomplete upon the effectivity of R.A. No. 6657. The Court ordered the remand of the case to the trial court for the computation of just compensation based on the formula under Section 17 of R.A. No. 6657 and DAR Administrative Order No. 5, Series of 1998.
Ratio Decidendi
On whether the 76.2380 hectare-portion of land was acquired under P.D. No. 27 or R.A. No. 6657: The Court found that the 76.2380 hectare-portion was indeed acquired under P.D. No. 27. This was evidenced by Rokaya's own complaint, which contained contradictory prayers for fixing just compensation and for the cancellation of Emancipation Patents/OLT if the higher valuation was not applied, thereby admitting the acquisition under P.D. No. 27. Furthermore, the Orders of Placement issued by the DAR, dated June 16, 1984, proved that the portion was acquired during the effectivity of P.D. No. 27. The Court also took judicial notice of these orders as issued pursuant to DAR Memorandum Circular No. 2, Series of 1978, concerning the inclusion of landholdings tenanted after October 21, 1972, within the coverage of P.D. No. 27. Finally, the Deed of Assignment, Warranties and Undertaking (DAWU) signed by Rokaya explicitly acknowledged the transfer of the area to tenant farmers pursuant to P.D. No. 27 and its subject status for Land Transfer Claim settlement with LBP. On whether the just compensation for the 76.2380 hectare-portion should be computed under P.D. No. 27 or R.A. No. 6657: The Court held that the acquisition of the property under P.D. No. 27 does not preclude the determination of just compensation under R.A. No. 6657, especially if the agrarian reform process remained incomplete upon the effectivity of R.A. No. 6657 on June 15, 1988. The Court reiterated its ruling in Paris v. Alfeche and Land Bank of the Philippines v. Natividad, stating that if just compensation remains unpaid by June 15, 1988, the agrarian reform process is considered incomplete, and R.A. No. 6657 becomes the applicable law for compensation, with P.D. No. 27 having suppletory effect. The Court emphasized that the "time of taking" for lands acquired under P.D. No. 27 is upon the payment of just compensation, not the initial issuance of emancipation patents. Therefore, since the payment of just compensation for the 76.2380 hectare-portion was not settled before the passage of R.A. No. 6657, the latter law governs the computation. On whether the application of R.A. No. 6657 to lands acquired under P.D. No. 27 constitutes retroactive application: The Court clarified that applying R.A. No. 6657 to lands acquired under P.D. No. 27, where the agrarian reform process remains incomplete, does not constitute retroactive application. Instead, it is a matter of determining the applicable law for the completion of the process. The Court cited numerous previous decisions, including Land Bank of the Philippines v. Estanislao, Land Bank of the Philippines v. Heirs of Eleuterio Cruz, and DAR v. Manuel Goduco, which consistently held that R.A. No. 6657 is the applicable law for determining just compensation when the process initiated under P.D. No. 27 is still pending upon the effectivity of R.A. No. 6657. The Court reiterated that the seizure of landholdings under P.D. No. 27 is completed only upon payment of just compensation, and if this payment occurs after R.A. No. 6657 has taken effect, then R.A. No. 6657 governs the valuation.
Main Doctrine
While lands acquired under Presidential Decree No. 27 (P.D. No. 27) are covered by the Comprehensive Agrarian Reform Program (CARP), the determination of just compensation for such lands, if the agrarian reform process remains incomplete upon the effectivity of Republic Act No. 6657 (R.A. 6657), must be computed in accordance with R.A. 6657, with P.D. No. 27 having suppletory effect.