Land Bank of the Philippines v. Navarro
REITERATIONFacts
The Antecedents: Lina B. Navarro, as respondent, is the daughter and heir of Antonio Buenaventura, who co-owned Lot No. 6561 with his second wife, Jovita Buenaventura. The property, an agricultural land with an area of 29.0772 hectares, was partitioned such that Jovita received a 75% pro-indiviso share and Lina received a 25% pro-indiviso share. In 1988, pursuant to Presidential Decree No. 27 (PD 27), the government expropriated 21.890 hectares of the lot. The Department of Agrarian Reform (DAR) valued this portion at P49,025.15. Jovita received P36,768.86 for her share, but Lina rejected a tender of P12,256.29 for her 25% share, deeming it confiscatory and unrealistic. Procedural History: Lina filed a petition with the Special Agrarian Court (SAC) for the fixing of just compensation, alleging the DAR's valuation was too low. The Land Bank of the Philippines (LBP) and DAR argued that the valuation was in accordance with PD 27 and its amendments, and that Lina's share could not be identified as the property was not physically subdivided. The parties submitted a Stipulation of Facts. The SAC ruled in favor of Lina, fixing the compensation at P10.00 per square meter, considering the market value approach and setting the date of taking as June 13, 1988. Both parties appealed. The Court of Appeals (CA) affirmed the SAC's ruling with modification, determining Lina's compensable area to be 5.4501 hectares and directing LBP to pay the value of the remaining portion at P10.00 per square meter plus 12% interest from the date of taking. LBP's motion for reconsideration was denied. The Petition: The LBP filed a petition for review on certiorari before the Supreme Court, assailing the CA's decision and resolution. The LBP raised issues concerning the hectarage of Lina's compensable share, the correctness of the just compensation fixed, and the imposition of 12% interest.
Issue(s)
Whether the Court of Appeals erred in holding that Lina's compensable share in the property is 5.4725 hectares. Whether the just compensation fixed by the SAC and affirmed by the CA is correct. Whether the Court of Appeals erred in upholding the imposition of 12% interest over the compensation awarded.
Ruling
The petition is partly meritorious. The Supreme Court affirmed the Court of Appeals' finding that Lina's compensable area is equivalent to 5.4501 hectares. However, the Court reversed and set aside the lower courts' valuation of the just compensation and remanded the case to the SAC for recomputation in accordance with Section 17 of Republic Act No. 6657, as amended, and pertinent DAR regulations. The Court also affirmed the imposition of legal interest but modified the rates.
Ratio Decidendi
On the hectarage of Lina's compensable share: The Supreme Court affirmed the Court of Appeals' finding that Lina is entitled to 5.4501 hectares. The Court held that while the parties entered into a Stipulation of Facts stating the total area covered by DAR was 21.890 hectares, evidence showed a palpable mistake in the arithmetical computation. The aggregate land area covered by the Emancipation Patents (EPs) issued to tenant-farmers was only 21.8005 hectares. The Court reiterated that facts stipulated during pre-trial are judicial admissions binding on the parties, but this rule admits exceptions, such as when a palpable mistake is committed. The Court found that the discrepancy between the stipulated area and the sum of areas in the EPs indicated a clerical oversight, and LBP itself recognized the correct hectarage in its memorandum. On the correctness of the just compensation: The Supreme Court found that both the SAC and the CA erred in fixing the just compensation. The LBP argued that the SAC did not apply Section 17 of Republic Act No. 6657 (RA 6657) and its implementing DAR regulations, but instead relied on the market value approach. The Court agreed, noting that the SAC decided the case before the passage of RA 9700 and DAR AO No. 7 (2011), but RA 6657 and DAR AO No. 5 (1998) were already in effect. The SAC should have considered these guidelines in determining valuation. The Court emphasized that courts must consider the factors in Section 17 of RA 6657, as translated into applicable DAR formulas, and any deviation must be supported by a reasoned explanation. Since the SAC and CA failed to observe these statutory guidelines, their valuation was rejected. The Court noted insufficient data to arrive at a valuation and thus remanded the case to the SAC for recomputation. On the imposition of 12% legal interest: The Supreme Court disagreed with the LBP's contention that the imposition of 12% legal interest was erroneous. The Court noted that the LBP did not dispute the date of taking as June 13, 1988, and admitted that payment was only offered on March 11, 1993, five years later. This constituted a delay in payment without just compensation. The Court cited National Power Corporation v. Manalastas and Republic v. Court of Appeals, stating that if property is taken without prompt payment of compensation, the final compensation must include interest to compensate for the delay. The award of interest is in the nature of damages for delay. The Court affirmed the CA's imposition of interest but modified the rates in accordance with Nacar v. Gallery Frames, specifying 12% per annum from June 13, 1988, to June 30, 2013, and 6% per annum thereafter until full payment.
Main Doctrine
Courts must consider the factors stated in Section 17 of Republic Act No. 6657, as amended, and as translated into a basic formula by the Department of Agrarian Reform (DAR) in their determination of just compensation for properties covered by the said law. A palpable mistake in a stipulation of facts may be corrected by the court.