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G.R. No. 184406
Present:
CARPIO,
J., Chairperson, BRION, PEREZ,
SERENO,
and REYES,
JJ. Promulgated:
March
14, 2012 |
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PEREZ, J.:
Before the Court is a Petition
for Review on Certiorari[1] of
the Decision[2] dated 31 January 2008 and
Resolution[3]
dated 8 September 2008 of the Ninth Division of the Court of Appeals (CA) in
CA-G.R. CV No. 69644, vacating the Decision of the Regional Trial Court (RTC)
of Naga City. The dispositive portion of the assailed
decision reads:
WHEREFORE,
the appealed decision of the Regional Trial Court of Naga City (Branch 21) is VACATED and SET ASIDE and a new one rendered fixing the just compensation for
the subject land at P371,015.20 and ordering the defendant-appellant Land Bank
of the Philippines to pay said amount to plaintiffs-appellants plus interest
thereon at the rate of 6% per annum,
compounded annually, from October 21, 1972 until fully paid.[4]
The facts as gathered by this Court
follow:
Pursuant to the Operation Land
Transfer (OLT) Program of Presidential Decree (P.D.) No. 27, an aggregate area
of 34.6958 hectares composing three parcels of agricultural land located at
Himaao, Pili, Camarines Sur owned by Perfecto, Nellie, OFe, Gil, Edmundo and
Nelly, all surnamed Obias, (landowners) were distributed to the farmers-beneficiaries
(farmers) namely: Victor Bagasina, Sr., Elena Benosa, Sergio Nagrampa, Claudio
Galon, Prudencio Benosa, Santos Parro, Guillermo Breboneria, Flora Villamer,
Felipe de Jesus, Mariano Esta, Benjamin Bagasina, Andres Tagum, Pedro Galon,
Clara Padua, Rodolfo Competente, Roberto Parro, Melchor Brandes, Antonio
Buizon, Rogelio Montero, Maria Villamer, Claudio Resari, Victor Bagasina, Jr.,
Francisco Montero and Pedro Montero.
As a result, the owners had to be
paid just compensation for the property taken.
The Department of Agrarian Reform (DAR), using the formula under P.D. 27
and Executive Order (E.O.) 228, came up with a computation of the value of the
acquired property at P1,397,578.72.
However, the amount was contested by the landowners as an inadequate
compensation for the land. Thus did they filed a complaint for determination of
just compensation before the RTC of Naga City, the assigned Special Agrarian
Court (SAC) which has jurisdiction over the complaint.
To ascertain the amount of just
compensation, a committee was formed by the trial court. The Provincial Assessor of Camarines Sur was
appointed as the Chairman and the representatives from the Land Bank of the
Philippines (LBP), DAR, the landowners and farmers, were appointed as the Members.
The Provincial
Assessor recommended the above average value of P40,065.31 per hectare
as just compensation; LBP Representative
Edgardo Malazarte recommended the amount of P38,533.577 per hectare; and the representative of the landowners, Atty.
Fe Rosario P. Bueva[5] submitted
a P180,000.00 per hectare valuation of the land.[6]
None of these recommendations was
adopted in the 3 October 2000 judgment[7] of
the trial court. The dispositive portion reads:
Wherefore,
judgment is rendered ordering the following:
(1) Fixing the Just Compensation of the 34.6958
[hectares] has to be at Ninety One Thousand Six Hundred Fifty Seven and 50/100
(P91,657.50) per hectare or in the total amount of Three Million One Hundred
Eighty Thousand One Hundred Thirty and 29/100 (P3,180,130.29);
(2) Directing
the Respondent Land Bank to pay the Plaintiffs the amount of Three Million One
Hundred Eighty Thousand One Hundred Thirty and 29/100 (P3,180,130.29) in the
manner provided for under R.A. 6657.
No
pronouncement as to costs.[8]
Both the landowners and LBP appealed the trial courts
decision before the CA.
On 31 January 2008, the appellate
court vacated the decision of the trial court.
It relied heavily on Gabatin v.
Land Bank of the Philippines[9] ruling
wherein this Court fixed the rate of the government support price (GSP) for one
cavan of palay at P35.00, the price of the palay at the time of the
taking of the land. Following the
formula, Land Value= 2.5 multiplied by
the Average Gross Production (AGP) multiplied by the Government Support Price
(GSP), provided by P.D. No. 27 and E.O. 228, the value of the total area
taken will be P371,015.20 plus interest thereon at the rate of 6%
interest per annum, compounded annually, starting 21 October 1972, until fully paid. [10]
The Courts Ruling
In their petition, LBP does not contest the valuation of the
property and the amount to be paid as just compensation. It raised only the issue of Whether or not
the provisions of DAR Administrative Order (A.O.) No. 13,[11]
series of 1994, as amended by DAR A.O. No. 2, series of 2004, as further
amended by DAR A.O. No. 6, series of 2008, are mandatory insofar as the computation
of interest for P.D. 27-acquired properties is concerned.[12]
To put it
simply, LBP is alleging error on the part of the appellate court when it ruled
that the payment of interest shall be made until full payment thereof. The bank contends that it should have been
until the time of actual payment as defined by the DAR A.O. No. 13, as amended.
LBPs
main contention rests upon the strict application of Item III, No. 3 of DAR A.O.
No. 13, series of 1994, as amended, by A.O. No. 2, series of 2004 as further
amended by A.O. No. 6, series of 2008, with regard to the extent of the period
of application of the incremental interest.
We quote the relevant portion of
the Administrative Order, as amended:
3. The grant of six percent (6%) yearly interest
compounded annually shall be reckoned as follows:
3.1 Tenanted as of 21 October 1972 and covered
under OLT
- From 21 October 1972 up to the time of actual payment but not later than December 2009.
3.2 Tenanted after 21 October 1972 and covered
under OLT
-From the date when the land was actually tenanted
(by virtue of Regional Order of Placement issued prior to August 18, 1987) up
to the time of actual payment but not later than December 2009.
Time of actual payment is the date when the Land Bank of the
Philippines (LBP) approves payment of the land transfer claim and deposits the
compensation proceeds in the name of the landowner (LO) in cash and in
bonds. The release of payment can be claimed by the landowner upon
compliance with the documentary requirements for release of payment.
This case does not present a novel issue.
It is correct that rules and regulations issued by
administrative bodies to interpret the law which they are entrusted to enforce,
have the force of law, and are entitled to great respect. Administrative issuances partake of the
nature of a statute and have in their favor a presumption of legality.[13] And a
literal reading of A.O. No. 13, as amended, will be in favor of the LBP.
However,
these administrative issuances or orders, though they enjoy the presumption of legalities,
are still subject to the interpretation by the Supreme Court pursuant to its
power to interpret the law. While rules
and regulation issued by the administrative bodies have the force and effect of
law and are entitled to great respect, courts interpret administrative
regulations in harmony with the law that authorized them and avoid as much as
possible any construction that would annul them as invalid exercise of
legislative power.[14]
The rationale for the interpretation that the payment of interest shall
be up to the time of full payment and not up to actual payment as defined by
the Administrative Order is well pronounced in the case of Land
Bank of the Philippines v. Soriano,[15] we
quote:
The concept of just compensation embraces not only
the correct determination of the amount to be paid to the owners of the land,
but also payment within a reasonable time from its taking. Without prompt
payment, compensation cannot be considered just inasmuch as the property
owner is made to suffer the consequences of being immediately deprived of his
land while being made to wait for a decade or more before actually receiving
the amount necessary to cope with his loss.[16]
To condition the payment upon LBPs approval and
its release upon compliance with some documentary requirements would render
nugatory the very essence of prompt payment. Therefore, to expedite the payment of just compensation, it is logical
to conclude that the 6% interest rate be imposed from the time of taking up to
the time of full payment of just compensation. (Emphasis supplied)[17]
The LBP sought support in the 19 December 2007
Resolution of the Court in the case of APO
Fruits Corporation v. Court of Appeals[18] wherein the Court declared that the payment
of interest for delay of payment cannot be applied where there is prompt and
valid payment of just compensation even if the amount of just compensation was
later on increased pursuant to the Courts judgment.[19] A review of this Resolution will reveal that
this Court, through the Third Division, deleted the 12% interest on the
balance of the awarded just compensation due to the finding that the LBP did
not delay the payment of just compensation as it had deposited the pertinent
amounts due to AFC and HPI within fourteen months after they filed their
complaints for just compensation with the RTC.
However,
this Resolution has already been overturned by an En Banc ruling of the Court
in its 12 October 2010 Resolution.[20] The dispositive portion states:
WHEREFORE, premises considered, we GRANT the petitioners motion for
reconsideration. The Court En Bancs Resolution dated December 4, 2009, as well
as the Third Divisions Resolutions
dated April 30, 2008 and December 19, 2007,
are hereby REVERSED and SET ASIDE. (Emphasis supplied)
The respondent Land Bank of the Philippines is hereby ORDERED to pay
petitioners Apo Fruits Corporation and Hijo Plantation, Inc. interest at the
rate of 12% per annum on the unpaid balance of the just compensation, computed
from the date the Government took the properties on December 9, 1996, until the
respondent Land Bank of the Philippines paid on May 9, 2008 the balance on the
principal amount.[21]
To
answer the contention of LBP that there should be no payment of interest when
there is already a prompt payment of just compensation, the High Court
discussed that even though the LBP immediately paid the remaining balance on
the just compensation due to the petitioners after this Court had fixed the
value of the expropriated properties, it overlooks one essential fact from
the time that the State took the petitioners properties until the time that
the petitioners were fully paid, almost 12 long years passed. This is the
rationale for imposing the 12% interest in order to compensate the
petitioners for the income they would have made had they been properly
compensated for their properties at the time of the taking.
This Court is not oblivious of the
purpose of our agrarian laws particularly P.D. No. 27,[22]
that is, to emancipate the tiller
of the soil from his bondage; to be
lord and owner of the land he tills.
Further, the deliberations of the
1986 Constitutional Commission on this subject reveal that just compensation
should not do violence to the Bill of Rights, but should also not make an
insurmountable obstacle to a successful agrarian reform program. Hence,
the landowner's right to just compensation should be balanced with agrarian
reform.[23]
The mandate of determination of just compensation
is a judicial function,[24]
hence, we exert all efforts to consider and interpret all the applicable laws
and issuances in order to balance the right of the farmers to own a land
subject to the award the proper and just compensation due to the landowners.
WHEREFORE,
the appeal is DENIED. The 31 January 2008 Decision of the
Court of Appeals in CA-G.R. CV No. 69644, vacating the Decision of the Regional Trial
Court of Naga City acting as Special Agrarian Court is
hereby AFFIRMED. No cost.
SO ORDERED
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JOSE PORTUGAL PEREZ Associate Justice |
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WE CONCUR: ANTONIO T.
CARPIO Associate Justice Chairperson |
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ARTURO
D. BRION Associate Justice |
MARIA Associate Justice |
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BIENVENIDO L. REYES Associate Justice |
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A T T E S T A T I O N
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Courts Division.
ANTONIO
T. CARPIO
Associate Justice
Chairperson
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII
of the Constitution and the Division Chairpersons Attestation, I certify that
the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice
[1] Rollo, pp. 19-36.
[2] Id. at 42-51. Penned by Associate Justice Edgardo
P. Cruz with Associate Justices Fernanda Lampas Peralta and Normandie B.
Pizarro concurring.
[3] Id.
at 52-54.
[4] Id. at 50.
[5] Records,
p. 139. As per Order dated 3 October 1995.
[6] Rollo, p. 44. CA Decision.
[7] Records, pp. 381-391
[8] Id. at 391.
[9] G.R.
No. 148223, 25 November 2004, 444 SCRA 176, 178.
[10] Rollo, p. 50
[11] Rules and Regulations Governing the Grant of Increment of Six Percent (6%) Yearly Interest Compounded Annually on Lands Covered by Presidential Decree No. 27 and Executive Order No. 228.
[12] Rollo, pp. 26-27.
[13] Allied Banking Corporation v. Land Bank of the
Philippines, G.R. No. 175422, 13
March 2009, 581 SCRA 301, 314.
[14] Philippine
Bank of Communications v.
Commissioner of Internal Revenue, G.R. No. 112024,
28 January 1999, 302 SCRA 241, 252.
[15] G.R.
Nos. 180772 and 180776, 6 May 2010, 620 SCRA 347.
[16] Id. at 356 citing Land
Bank of the Philippines v. Orilla, G.R. No. 157206, 27 June 2008,
556 SCRA 103, 117.
[17] Id. at 356-357.
[18] G.R.
No. 164195, 19 December 2007, 541 SCRA 117.
[19] Rollo, p. 31. Petition for Review on Certiorari of
Land Bank of the Philippines.
[20] APO Fruits
Corporation v. Land Bank of the Philippines, 12 October 2010, 632 SCRA 727.
[21] Id. at 764.
[22] Entitled, DECREEING THE EMANCIPATION
OF TENANTS FROM THE BONDAGE OF
THE SOIL, TRANSFERRING TO THEM THE OWNERSHIP OF THE LAND THEY TILL AND PROVIDING THE INSTRUMENTS AND
MECHANISM THEREFOR, October 21,
1972.
[23] Land
Bank of the Philippines v. Soriano, supra
note 15 at 355.
[24] Heirs of Lorenzo and Carmen Vidad and Agvid Construction
Co., Inc. v. Land Bank of the Philippines, G.R. No. 166461, 30 April 2010, 619 SCRA 609,
630.