THIRD
DIVISION
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LAND BANK OF THE Petitioner, - versus - HEIRS OF Respondents. |
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G.R.
No. 179862 Present: YNARES-SANTIAGO, J.,
Chairperson, CHICO-NAZARIO, VELASCO, JR., NACHURA, and PERALTA,
JJ. Promulgated: September 3, 2009 |
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CHICO-NAZARIO, J.:
Before
Us is a Petition for Review on Certiorari
under Rule 45 of the Rules of Court[1]
seeking to reverse the Decision[2]
dated 17 April 2007 and Resolution[3]
dated 25 September 2007 of the Court of Appeals in CA-G.R. SP No. 90976, which
affirmed in toto the Decision[4]
dated 28 June 2005 and Order[5]
dated 28 July 2005 of the Regional Trial Court, acting as a Special Agrarian
Court (SAC), of Lucena City, in Case No. 98-68.
The
facts gathered from the records are as follows:
Respondents are the registered owners of 122.3408 hectares
of agricultural land located in Casay, Mulanay, Quezon, and covered by Transfer
Certificate of Title (TCT) No. T-209393.
In 1972, a portion of the said land, measuring 117.3854 hectares,
planted with corn (subject property), was placed by the Department of Agrarian
Reform (DAR) under its Operation Land Transfer Program, pursuant to
Presidential Decree No. 27.[6]
On
Thereafter,
from the years 1988 to 1990, DAR subdivided and distributed the subject
property to farmer-beneficiaries.[7]
Based on the formula for computation of just compensation
embodied in Executive Order No. 228,[8] P241,070.45. On P241,070.45
in the name and for the account of respondents on
On P19,717.50 per hectare,[10]
or a total of P2,314,546.62 for the entire 117.3854 hectares.
Subsequently, petitioner filed with the SAC its Answer
contending that since the subject property was acquired under Presidential Decree
No. 27, its valuation of the subject property was correct as it was based on
the formula prescribed by Executive Order No. 228. Thus, petitioner sought the dismissal of
respondents’ Complaint.[11]
After trial, the SAC rendered a Decision in Case No. 98-68
on P1,730,211.21.
In arriving at said valuation, the SAC considered the pertinent provisions of
the CARL, as well as the testimonial and documentary evidence presented by
respondents regarding the market value of the subject property, and the price of corn in the year 1990. Petitioner was ordered to pay the respondents
the just compensation of P1,730,211.21 in cash and bonds.[12]
The SAC denied the Motion for Reconsideration of petitioner
in an Order dated
In a Decision dated 17 April 2007, the Court of Appeals
dismissed the appeal of petitioner and affirmed in toto the SAC Decision dated 28 June 2005 and Order dated 28 July
2005 in Case No. 98-68. In a Resolution
dated
Hence, petitioner lodged the instant Petition before us
raising the following issues:
I.
WHETHER
OR NOT THE COURT OF APPEALS ERRED IN APPLYING [the CARL] IN THE DETERMINATION
OF JUST COMPENSATION OF RESPONDENTS’ CORNLAND COVERED AND ACQUIRED UNDER THE
OPERATION LAND TRANSFER PURSUANT TO PD [No.] 27 AND EO [No.] 228;
II.
WHETHER
OR NOT [the CARL] CAN BE GIVEN RETROACTIVE APPLICATION TO COVER PD [No.] 27
ACQUIRED RICE/CORN LAND TAKEN AS OF
III.
WHETHER
OR NOT THE COURT OF APPEALS ERRED IN SUSTAINING THE SAC THAT THE GSP FOR CORN
SHALL BE P225.00/CAVAN FOR THE YEAR 1990 IN LIEU OF THE LEGISLATED GSP
OF P31.00/CAVAN UNDER PD [No.] 27/EO [No.] 228 ON THE DATE OF TAKING IN
1972.[14]
Petitioner claims that the subject property was acquired
pursuant to Presidential Decree No. 27 and Executive Order No. 228. Hence, the just compensation for said
property should be computed in accordance with the formula prescribed in the same laws. Petitioner argues that the CARL is not
applicable in the present case because it operates distinctly from Presidential
Decree No. 27 and Executive Order No. 228. The CARL covers all public and private
agricultural lands suitable for agriculture, while Presidential Decree No. 27
and Executive Order No. 228 cover rice and corn lands tenanted as of
The instant Petition is bereft of merit.
Presidential Decree No. 27 proclaimed the
“emancipation of all tenant-farmers from the bondage of the soil and
transferring to them the land they were tilling effective
P31.00
Where:
AGP = Average Gross Production in cavan of 50 kilos in
accordance with DAR Memorandum Circular No. 26, Series of 1973,
P31.00 = Government Support Price for corn on
On the other hand, the CARL was enacted to
promote social justice to the landless farmers and provide “a more equitable
distribution and ownership of land with due regard to the rights of the
landowners to just compensation and to the ecological needs of the nation.”[17] The CARL shall cover public and private
agricultural lands including other lands of the public domain suitable for
agriculture,[18]
which, as we have explained in Land
Bank of the Philippines v. Court of Appeals,[19] embrace
even rice and corn lands under Presidential Decree No. 27:
We
cannot see why Sec. 18 of RA 6657 should not apply to rice and corn lands under
PD 27. Section 75 of RA 6657 clearly
states that the provisions of PD 27 and EO 228 shall only have a suppletory
effect. Section 7 of the Act also
provides -
Sec.
7. Priorities. - The DAR, in
coordination with the PARC shall plan and program the acquisition and
distribution of all agricultural lands through a period of (10) years from the
effectivity of this Act. Lands shall be acquired and distributed as follows:
Phase
One: Rice and Corn lands under P.D. 27;
all idle or abandoned lands; all private lands voluntarily offered by the
owners for agrarian reform; x x x and all other lands owned by the government
devoted to or suitable for agriculture, which shall be acquired and distributed
immediately upon the effectivity of this Act, with the implementation to be
completed within a period of not more than four (4) years.
This
eloquently demonstrates that RA 6657 includes PD 27 lands among the properties
which the DAR shall acquire and distribute to the landless. And to facilitate the acquisition and
distribution thereof, Secs. 16, 17 and 18 of the Act should be adhered to. In Association
of Small Landowners of the Philippines v. Secretary of Agrarian Reform this
Court applied the provisions of RA 6657 to rice and corn lands when it upheld
the constitutionality of the payment of just compensation for PD 27 lands
through the different modes stated in Sec. 18.
In several cases, we have, for reason of equity, applied the
CARL in determining just compensation for lands acquired under Presidential Decree
No. 27 and before the effectivity of CARL on
In Land Bank of the
Philippines v. Natividad,[20]
the parcels of agricultural land were acquired from their owners for purposes
of agrarian reform on
Land
Bank’s contention that the property was acquired for purposes of agrarian
reform on October 21, 1972, the time of the effectivity of PD 27, ergo just compensation should be based
on the value of the property as of that time and not at the time of possession
in 1993, is likewise erroneous. In Office
of the President, Malacañang,
Under the factual circumstances of this case, the
agrarian reform process is still incomplete as the just compensation to be paid
private respondents has yet to be settled. Considering the passage of
Republic Act No. 6657 (RA 6657) before the completion of this process, the just
compensation should be determined and the process concluded under the said
law. Indeed, RA 6657 is the applicable law, with PD 27 and EO 228 having
only suppletory effect, conformably with our ruling in Paris v. Alfeche.
x x x x
It would
certainly be inequitable to determine just compensation based on the guideline
provided by PD 27 and EO 228 considering the DAR’s failure to determine the
just compensation for a considerable length of time. That just
compensation should be determined in accordance with RA 6657,
and not PD 27 or EO 228, is especially imperative considering that just
compensation should be the full and fair equivalent of the property taken from
its owner by the expropriator, the equivalent being real, substantial, full and
ample.
In this case, the trial court arrived at the just
compensation due private respondents for their property, taking into account
its nature as irrigated land, location along the highway, market value,
assessor’s value and the volume and value of its produce. This Court is
convinced that the trial court correctly determined the amount of just
compensation due private respondents in accordance with, and guided by, RA 6657
and existing jurisprudence. (Emphasis
ours.)
In Lubrica v. Land
Bank of the Philippines,[21]
the lands were acquired from their owners on
Petitioners insist that the
determination of just compensation should be based on the value of the
expropriated properties at the time of payment. Respondent LBP, on the other
hand, claims that the value of the realties should be computed as of
The petition is impressed with merit.
x x x x
The Natividad case
reiterated the Court's ruling in Office of the President v. Court of Appeals
that the expropriation of the landholding did not take place on the effectivity
of P.D. No. 27 on
Likewise, in the recent case
of Heirs of Francisco R. Tantoco, Sr. v. Court of Appeals, we held that
expropriation of landholdings covered by R.A. No. 6657 take place, not on the
effectivity of the Act on
In the instant case, petitioners were deprived of their properties in 1972 but have yet to receive the just compensation therefor. The parcels of land were already subdivided and distributed to the farmer-beneficiaries thereby immediately depriving petitioners of their use. Under the circumstances, it would be highly inequitable on the part of the petitioners to compute the just compensation using the values at the time of the taking in 1972, and not at the time of the payment, considering that the government and the farmer-beneficiaries have already benefited from the land although ownership thereof have not yet been transferred in their names. Petitioners were deprived of their properties without payment of just compensation which, under the law, is a prerequisite before the property can be taken away from its owners. The transfer of possession and ownership of the land to the government are conditioned upon the receipt by the landowner of the corresponding payment or deposit by the DAR of the compensation with an accessible bank. Until then, title remains with the landowner.
x x x x
We also note that the expropriation proceedings in the instant
case was initiated under P.D. No. 27 but the agrarian reform process is still
incomplete considering that the just compensation to be paid to petitioners has
yet to be settled. Considering the passage of R.A. No. 6657 before the
completion of this process, the just compensation should be determined and the
process concluded under the said law. Indeed, R.A. No. 6657 is the applicable
law, with P.D. No. 27 and E.O. No. 228 having only suppletory effect.
x x x x
Petitioners were deprived of their properties way
back in 1972, yet to date, they have not yet received just compensation. Thus, it would
certainly be inequitable to determine just compensation based on the guideline
provided by P.D. No. 227 and E.O. No. 228 considering the failure to determine
just compensation for a considerable length of time. That just compensation
should be determined in accordance with R.A. No. 6657 and not P.D. No. 227 or
E.O. No. 228, is important considering that just compensation should be the
full and fair equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and ample. (Emphases
ours.)
The case before us involves circumstances closely similar
to Natividad and Lubrica. The DAR acquired
the subject property in 1972 under the Operation Land Transfer Program of Presidential
Decree No. 27. The subject property was already divided and distributed to the
farmer-beneficiaries from 1988-1990, thereby depriving respondents of its use.
Withal, the full payment of just compensation due respondents was yet to be
made by petitioner. As we found in Natividad and Lubrica, the CARL is the applicable law in the present case, with Presidential
Decree No. 27 and Executive Order No. 228 having only suppletory effect. Equity precludes us from computing just
compensation for the subject property, using the values at the time of its taking
in 1972, as prescribed by Presidential Decree No. 27 and Executive Order No. 228,
given that the just compensation was left undetermined and unpaid for a
considerable length of time since then. The agrarian reform process remains incomplete
until payment of just compensation. Taking
into account the passage of the CARL before the completion of said process, the
just compensation should be determined and the process concluded under the said
law. This is
in keeping with the dictate that just compensation should be the full and fair
equivalent of the property taken from its owner by the expropriator, the
equivalent being real, substantial, full and ample.[22]
Section 18 of the CARL mandates that petitioner
shall compensate the landowner in such amount as may be agreed upon by the
landowner, DAR, and petitioner, or as may be finally determined by the court,
as the just compensation for the land. In
determining just compensation, Section 17 of the CARL enumerates the factors to
be considered in the determination of just compensation, namely, the cost of
acquisition of the land; the current value of like properties; its nature,
actual use and income; the sworn valuation by the owner; the tax declarations;
and the assessment made by government assessors. The social and economic benefits contributed by the farmers and
the farm workers and by the government to the property, as well as the
non-payment of taxes or loans secured from any government financing institution
on the said land, shall be considered as additional factors to determine its
value.
In the case at bar, the SAC arrived at the just
compensation due respondents for their subject property by taking into account
the market value of the subject property, the tax declaration of respondents,
the actual use of and income from the subject property, the assessor’s
valuation, and the volume and value of its produce;[23]
and factors specifically mentioned under Section 17 of the CARL. The Court of Appeals affirmed in toto the determination of just
compensation by the SAC. There being no
allegation or evidence that the determination of just compensation for the
subject property by the SAC, as affirmed by the appellate court, was not in
conformity with or was in violation of the provisions of the CARL, the
applicable law, then we have no reason to disturb the same.
WHEREFORE, the
instant Petition is hereby DENIED. The Decision
dated
SO ORDERED.
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MINITA V. CHICO-NAZARIOAssociate
Justice |
WE
CONCUR:
Associate
Justice
Chairperson
PRESBITERO J. VELASCO, JR.Associate
Justice |
ANTONIO EDUARDO B. NACHURA Associate
Justice |
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DIOSDADO M.
PERALTA
Associate
Justice
I attest that the conclusions in the
above Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
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CONSUELO YNARES-SANTIAGO Associate
Justice Chairperson,
Third Division |
Pursuant to Article VIII, Section 13
of the Constitution, and the Division Chairman’s Attestation, it is hereby
certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
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REYNATO S. PUNO
Chief Justice |
[1] Rollo,
pp. 25-65.
[2] Penned
by Associate Justice Josefina Guevara-Salonga with Associate Justices Vicente
Q. Roxas and Ramon R. Garcia concurring; rollo,
pp. 66-77.
[3] Rollo, pp. 79-80.
[4]
[5]
[6] Entitled
as “DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF SOIL,
TRANSFERRING TO THEM THE OWNERSHIP OF THE LAND THEY TILL AND PROVIDING THEM THE
INSTRUMENTS AND MECHANISM THEREFOR,” and took effect on
[7]
[8] Entitled
“DECLARING FULL LAND OWNERSHIP TO QUALIFIED FARMER-BENEFICIARIES COVERED BY PD
27; DETERMINING THE VALUE OF REMAINING UNVALUED RICE AND CORN LANDS SUBJECT OF
PD 27; AND PROVIDING FOR THE MANNER OF
PAYMENT BY THE FARMER-BENEFICIARY AND MODE OF COMPENSATION TO THE LANDOWNER,”
and signed into law on 17 July 1987; EO 228, SEC. 2. – Henceforth, the valuation
of rice and corn lands covered by PD 27 shall be based on the average gross
production determined by the Barangay Committee on Land Production in accordance
with Department Memorandum Circular No. 26, series of 1973 and related
issuances and regulation of the Department of Agrarian Reform. The average
gross production per hectare shall be multiplied by two and a half (2.5), the
product of which shall be multiplied by
Thirty–Five Pesos (P35.00), the government support price for one cavan
of 50 kilos of palay on October 21, 1972, or Thirty-One Pesos (P31.00), the government support price for one
cavan of 50 kilos of corn on October 21, 1972, and the amount arrived at shall
be the value of the rice and corn land, as the case may be, for the purpose of
determining its cost to the farmer and compensation to the landowner.
[9] Rollo,
pp. 31-33, 135-153.
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17] Republic
Act No. 6657, Section 2.
[18] Section
4.
[19] 378
Phil. 1248, 1260-1261 (1999).
[20] 497
Phil. 738, 746-748 (2005).
[21] G.R.
No. 170220,
[22] Land Bank of the
[23] Rollo, pp. 189-193.