Land Bank of the Philippines v. Del Moral
REITERATIONFacts
The Antecedents: Respondent Del Moral, Inc. (Del Moral) owned several parcels of land, 102.9766 hectares of which were placed under the agrarian reform program pursuant to Presidential Decree (P.D.) No. 27. The Department of Agrarian Reform (DAR) computed the just compensation at P342,917.81. Del Moral found this valuation grossly inadequate and filed a petition for proper determination of just compensation. Procedural History: The Regional Trial Court (RTC), acting as a Special Agrarian Court (SAC), computed the just compensation at P216,104,385.00, based on the recent fair market value, and awarded temperate and nominal damages. The Court of Appeals (CA) affirmed the RTC's computation but reduced the damages. The DAR's petition for review to the Supreme Court was denied. The Land Bank of the Philippines (LBP) also appealed to the CA, which affirmed the RTC's computation. The LBP's motion for reconsideration was denied. The RTC granted Del Moral's motion for execution, which the LBP sought to enjoin. The Petition: The LBP challenged the CA's Decision and Resolution, arguing that the computation of just compensation was improper, and that it should not be bound by the final judgment against the DAR. The LBP also contended that the enactment of Republic Act (R.A.) No. 9700 mooted the issue of which formula to use and that its actions were not in bad faith.
Issue(s)
Whether the LBP is bound by the final and executory judgment against the DAR regarding the computation of just compensation and the award for temperate and nominal damages. Whether the just compensation to be paid to Del Moral was properly computed. Whether the awards for temperate and nominal damages, as well as the legal interest imposed, are proper.
Ruling
The Petition is DENIED. The Decision dated May 9, 2008 and Resolution dated March 26, 2009 of the Court of Appeals in CA-G.R. SP No. 98033 are AFFIRMED with MODIFICATION in that the nominal damages in the amount of P1 million is DELETED. All monetary awards are subject to interest at the rate of six percent (6%) per annum from the finality of this Decision until fully paid.
Ratio Decidendi
On the issue of whether the LBP is bound by the final and executory judgment against the DAR: The Court ruled that the principle of res judicata applies. The elements of res judicata were found to be present: a final judgment on the merits by a court of competent jurisdiction, and identity of parties, subject matter, and causes of action. Although the LBP filed a separate appeal, it had a community of interest with the DAR as both represented the government's interest in the expropriation. The prior final judgment in the DAR's appeal became the law of the case, barring relitigation of the same issues. On the issue of whether the just compensation was properly computed: The Court affirmed the RTC and CA's computation based on the current fair market value at the time of payment, not the time of taking in 1972. This was based on jurisprudence, particularly Lubrica v. Land Bank of the Philippines, which held that in cases of long delay in payment, just compensation must be computed based on the market value prevailing at the time of payment. The RTC, as a Special Agrarian Court, is not strictly bound by DAR formulas and can exercise judicial discretion, provided it is supported by reasoned explanation and evidence. The RTC's reliance on the expert appraisal report was deemed proper. On the issue of whether the awards for temperate and nominal damages, and legal interest are proper: The Court held that temperate damages were reasonable given the inability to precisely quantify Del Moral's losses due to the prolonged deprivation of its land. However, nominal damages were deleted as they are incompatible with temperate damages. The imposition of legal interest at six percent (6%) per annum from the finality of the judgment until full payment was affirmed, as is standard in such cases.
Main Doctrine
The principle of res judicata bars the relitigation of issues already passed upon and determined by a court of competent jurisdiction in a prior case. When the determination of just compensation has been unduly delayed, it must be computed based on the market value prevailing at the time of payment, not at the time of taking.