Land Bank v. Heirs of Alsua
REITERATIONFacts
The Antecedents: Respondents, Heirs of Fernando Alsua, owned coconut lands (Lot Nos. 5114 and 5362) placed under the Comprehensive Agrarian Reform Program (CARP) through the Voluntary Offer to Sell (VOS) scheme. Petitioner Land Bank of the Philippines (LBP) conducted a field investigation and, along with the Department of Agrarian Reform (DAR), determined the areas fit for acquisition. New titles were issued in the name of the Republic of the Philippines. LBP valued the acquired portions using the two-factor formula under DAR Administrative Orders (A.O.) No. 6, series of 1992, as amended by A.O. No. 11, series of 1994. Respondents rejected the offered compensation, which was deposited as provisional compensation and later released to them. Procedural History: After summary administrative proceedings, the Office of the Provincial Adjudicator fixed the just compensation at higher amounts. LBP filed a petition for determination of just compensation with the Regional Trial Court (RTC), acting as a Special Agrarian Court (SAC). The RTC ordered a re-investigation on annual gross production and selling price data. LBP sought reconsideration, arguing that RA 9700 and DAR A.O. No. 1, series of 2010, were inapplicable as claim folders were received prior to July 1, 2009, and valuation should follow DAR A.O. No. 5, series of 1998. The RTC denied the motion. LBP filed a Petition for Certiorari and Prohibition with the Court of Appeals (CA), which issued a Temporary Restraining Order (TRO). After the TRO lapsed, the RTC rendered a Decision fixing just compensation, applying RA 9700 and DAR A.O. No. 1, series of 2010, using production data preceding June 30, 2009, and employing specific formulae. LBP's motion for reconsideration was denied. The Petition: The CA set aside the RTC Decision, finding that the RTC failed to consider the factors enumerated under Section 17 of RA 6657, as amended, and remanded the case for proper determination. The CA ruled that DAR A.O. No. 1, series of 2010, was inapplicable as it pertains to tenanted rice and corn lands acquired under PD 27 and EO 228, and that the RTC failed to establish consideration of Section 17 factors. The CA directed the RTC to determine just compensation based on the time of taking (issuance of TCTs in the Republic's name), using evidence conforming to Section 17 of RA 6657 prior to RA 9700, and to impose legal interest. Aggrieved, LBP filed the instant Petition for Review on certiorari.
Issue(s)
Whether the Court of Appeals erred in setting aside the Regional Trial Court Decision and remanding the case for proper determination of just compensation. Whether the Land Bank of the Philippines established that it considered the factors under Section 17 of RA 6657, as amended, in computing just compensation. Whether the Special Agrarian Court is strictly bound by the different formulae under DAR A.O. No. 5, series of 1998.
Ruling
The petition is denied. The Court affirmed the Court of Appeals' Decision, upholding the remand of the case to the Regional Trial Court for the proper determination of just compensation in accordance with the guidelines set forth.
Ratio Decidendi
On the issue of whether the Court of Appeals erred in remanding the case: The Court ruled that the CA did not err in remanding the case. For purposes of determining just compensation, the fair market value of an expropriated property is determined by its character and its price at the time of taking, which is when the landowner was deprived of the use and benefit of the property, such as when the title is transferred to the Republic. In this case, the time of taking was pegged to the issuance of the Transfer Certificates of Title (TCTs) in the name of the Republic, specifically June 28, 1996 for Lot No. 5362 and February 13, 2001 for Lot No. 5114. The Court reiterated that while RA 9700 amended Section 17 of RA 6657, its implementing rules clarified that RA 9700 shall not apply to claims where claim folders were received by LBP prior to July 1, 2009. Since the claim folders were received in October 1995, just compensation must be determined in accordance with Section 17 of RA 6657, as amended, prior to its further amendment by RA 9700. On the issue of whether LBP established consideration of Section 17 factors: The Court found that LBP failed to establish that it considered all the factors under Section 17 of RA 6657, as amended. While LBP claimed to have used DAR A.O. No. 5, series of 1998, a perusal of the records revealed that it failed to show that the economic and social benefits of the subject lands, and the current value of like properties were considered in arriving at its valuation. The Court noted that the veracity of the facts and figures used in arriving at the amount of just compensation involves questions of fact, which are generally improper in a petition for review on certiorari. Therefore, the LBP's valuation could not be upheld. On the issue of whether the SAC is strictly bound by DAR formulae: The Court affirmed that the RTC, acting as a SAC, is not strictly bound by the different formulae created by the DAR. The determination of just compensation is essentially a judicial function vested with the courts, not administrative agencies. However, the Court emphasized that if the RTC finds the DAR guidelines inapplicable, it must clearly explain the reasons for deviating therefrom and for using other factors or formulae in arriving at the reasonable just compensation. The Court also clarified that the RTC should impose legal interest on the unpaid balance at the rate of twelve percent per annum from the time of taking until June 30, 2013, and henceforth, at six percent per annum until fully paid, in line with BSP-MB Circular No. 799, Series of 2013.
Main Doctrine
The Court affirmed the Court of Appeals' decision to remand the case for proper determination of just compensation, emphasizing that valuation must be based on the time of taking and consider all factors under Section 17 of RA 6657, as amended, prior to RA 9700. The RTC, as a Special Agrarian Court (SAC), is not strictly bound by DAR formulae but must justify any deviation.