G. R. No. 148223 - November 25, 2004
FERNANDO GABATIN, JOSE GABATIN AND ALBERTO GABATIN, Petitioners, vs. LAND BANK OF THE PHILIPPINES, Respondent.
D E C I S I O N
Before us is a petition for Review on Certiorari under Rule 45 of the Rules of Court seeking to set aside the Decision and Resolution dated 15 September 2000 and 03 May 2001, respectively, of the Court of Appeals in CA-G.R. CV No. 61240, entitled, "Fernando Gabatin, Alberto Gabatin and Jose Gabatin, petitioners-appellees v. Department of Agrarian Reform, respondent." The Decision set aside the order of the Special Agrarian Court (SAC) dated 04 May 1998, and the Resolution denied petitioners' motion for reconsideration.
Petitioners Fernando, Alberto, and Jose, all surnamed Gabatin, were registered owners of three parcels of rice land situated in Sariaya, Quezon, under separate certificates of title, namely: Transfer Certificate of Title (TCT) No. T-107863 (0.3965 hectare),1 TCT No. T-107864 (1.4272 hectares)2 and TCT No. T-107865 (1.4330 hectares).3 In 1989, the properties, pursuant to the Land Reform Program of the Government as defined under Presidential Decree (P.D.) No. 274 and Executive Order (E.O.) No. 228,5 were placed by the Department of Agrarian Reform (DAR) under its Operation Land Transfer (OLT). The properties were distributed to deserving farmer beneficiaries through the issuance of emancipation patents.6
The formula prescribed under P.D. No. 27 and E.O. No. 2287 for computing the Land Value (LV) of rice lands is 2.5 x Average Gross Production (AGP) x Government Support Price (GSP). Otherwise stated, the formula is as follows:
LV = 2.5 x AGP x GSP
The AGP for the lots covered under TCTs No. T-107863 and No. T-107864 was at 94.64 cavans per hectare while that of TCT No. T-107865 was at 118.47.8 The DAR and respondent Land Bank of the Philippines (Land Bank), fixed the GSP at P35 which was the price of each cavan of palay in 1972, when the lots were deemed taken for distribution. Hence, respondent's valuation of the properties:
Petitioners rejected the valuation.
On 16 April 1996, petitioners filed a case for the determination of just compensation of their lands with the Regional Trial Court (RTC) of Lucena City, naming the DAR and Land Bank as respondents.10 The case was docketed as Civil Case No. 96-57 and raffled to Branch 56, the designated Special Agrarian Court (SAC). Petitioners prayed that the just compensation be fixed in accordance with the formula in P.D. No. 27, with 6% compounded annual interest to be paid based on the price of palay at the time of payment and not at the time of taking. The SAC, in its order,11 fixed the GSP of palay at the current price of P400 as basis for the computation of the payment, and not the GSP at the time of taking, thus:
Respondent Land Bank filed a motion for reconsideration13 dated 04 June 1998 which was denied by the trial court in its Order14 dated 23 July 1998. Of the two respondents in the trial court, only Land Bank appealed to the Court of Appeals under Rule 41 of the Rules of Court.15
On 10 July 2000, petitioners filed a motion to remand the records to the SAC and to dismiss the appeal on the grounds that the decision of the SAC became final and executory, and that the appeal raised issues involving purely questions of law. They maintained that the appeal of respondent, not being an indispensable party, did not stop the running of the period to appeal, thereby making the decision final. They also claimed that the appeal should be dismissed because the proper venue is the Supreme Court via a petition for review under Rule 45, and not the Court of Appeals.16
On 15 September 2000, the Court of Appeals rendered a decision denying the motion to dismiss and reversing the decision of the SAC. It ruled it has jurisdiction over the appeal reasoning that its jurisdiction over appeals from RTCs cannot simply be disregarded on the submission that the issues presented before it are purely legal in nature. As to the personality of Land Bank to file the said appeal, the Court of Appeals made a finding that respondent was a necessary party; hence, it had a personality to appeal the SAC decision. It also fixed the GSP at the time of taking of the land in 1972, instead of the GSP at the time of payment. Thus:
Based on the foregoing, the appropriate land valuation formula for the appellees' property should be two and a half (2) multiplied by the average gross production multiplied by the price of palay (P35.00), (P.D. No. 27). In addition, the said amount shall accumulate compounded interest at 6% per annum, pursuant to A.O. No. 13, (1994) (supra) computed from the time of taking, i.e., when P.D. No. 27 came into effect in October, 1972, until the full amount is paid.
The petitioners' motion for reconsideration was likewise denied.18
Hence, this petition for review. The following issues were raised:
In the case of Land Bank v. De Leon19 (hereinafter referred to as Decision), we made the definitive pronouncement that a petition for review under Rule 42, and not an ordinary appeal under Rule 41, is the appropriate mode of appeal on the decisions of the RTCs acting as SACs. In the said case, Land Bank filed a motion for reconsideration. In a resolution20 dated 20 March 2003 (hereinafter referred to as Resolution), we resolved the Motion for Reconsideration in this wise:
Herein petitioners assailed the Resolution. It is the remonstration of the petitioners that since the notice of appeal filed by respondent under Rule 41 was incorrect, the same did not stop the running of the reglementary period to file a petition for review under Rule 42. The decision, therefore, of the SAC became final and executory and, consequently, respondent had completely lost the remedy of appeal. In effect, petitioners contended that the Resolution, when it prescribed for the prospective application of the Decision, took away their vested rights to immediate payment of just compensation and created a second right to appeal in favor of the respondent.
On the other hand, respondent asseverates that since its appeal of the decision of the SAC, via notice of appeal under Rule 41, was perfected prior to the promulgation of the Resolution, the same cannot be dismissed outright since the Resolution applies prospectively.22
We do not agree with the petitioners.
It bears noting that the Decision, which prescribed for Rule 42 as the correct mode of appeal from the decisions of the SAC, was promulgated by this Court only on 10 September 2002, while the Resolution of the motion for reconsideration of the said case giving it a prospective application was promulgated on 20 March 2003. Respondent appealed to the Court of Appeals on 31 July 1998 via ordinary appeal under Rule 41 of the Rules of Court. Though appeal under said rule is not the proper mode of appeal, said erroneous course of action cannot be blamed on respondent. It was of the belief that such recourse was the appropriate manner to question the decisions of the SAC. In Land Bank v. De Leon,23 we held:
Thus, while the rule is that the appropriate mode of appeal from the decisions of the SAC is through petition for review under Rule 42, the same rule is inapplicable in the instant case. The Resolution categorically stated that said ruling shall apply only to those cases appealed after 20 March 2003.24
It is beyond cavil, therefore, that since this Court had already ruled on the prospective application of the Land Bank v. De Leon decision, said issue must be laid to rest and must no longer be disturbed in this decision. Stare decisis et non quieta movere.25 Stand by the decisions and disturb not what is settled. It is a very desirable and necessary judicial practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases where the facts are substantially the same, absent any countervailing considerations.26 An in-depth study of the case at bar clearly shows that it does not fall under the exception of the stare decisis rule.
Petitioners find fault in the decision of the Court of Appeals which ruled that Land Bank has the right to appeal on the ground that it is a necessary party. It is argued that DAR, being the only agency authorized by law to represent the Republic of the Philippines in the acquisition of private agricultural lands for agrarian reform, as stated under Section 51(1) of Republic Act No. 3844 and amended by Rep. Act No. 6389, is an indispensable party in expropriation proceedings. Petitioners allege that Land Bank is only a necessary party, thus, the Court of Appeals should have dismissed the appeal pursuant to MWSS v. Court of Appeals27 which states that "when indispensable parties are not before the courts, the action should be dismissed." Hence, petitioners concluded that the Court of Appeals acted without jurisdiction when it gave due course and decided the appeal filed by Land Bank, a necessary party, without being joined by the DAR, the indispensable party.
Respondent answered that it can file an appeal independently of the DAR in land valuation or in just compensation cases arising from the agrarian reform program. In support of its argument, respondent avers that it is an agency created primarily to provide financial support in all phases of agrarian reform pursuant to Section 74 of Rep. Act No. 3844 and Section 64 of Rep. Act No. 6657. It is also vested with the primary responsibility and authority in the valuation and compensation of covered landholdings to carry out the full implementation of the Agrarian Reform Program.28 It may agree with the DAR and the landowner as to the amount of just compensation to be paid to the latter and may also disagree with them and bring the matter to court for judicial determination.29
Respondent cited jurisprudence pronouncing that it is not just a "mere rubber stamp" but a "necessary cog"30 in agrarian reform as it does not just exercise a ministerial function but has an "independent discretionary role"31 in the valuation process of the land covered by land reform. Respondent further stressed that this Court, in the Decision, has recognized its right to appeal from an adverse decision in a just compensation case.
We agree with the respondent.
The Rules of Court provides that parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants.32 In BPI v. Court of Appeals,33 this Court explained:
Without the presence of indispensable parties to a suit or proceeding, judgment of a court cannot attain real finality. (emphasis supplied)
It must be observed that once an expropriation proceeding for the acquisition of private agricultural lands is commenced by the DAR, the indispensable role of Land Bank begins.
Even in the preliminary stage of the valuation and the determination of just compensation, the respondent's task is inseparably interwoven with that of the DAR, thus:
E.O. No. 405 provides that the DAR is required to make use of the determination of the land valuation and compensation by the Land Bank as the latter is primarily responsible for the determination of the land valuation and compensation for all private lands under Rep. Act No. 6657.35
In Sharp International Marketing v. Court of Appeals,36 this Court even went on to say that without the Land Bank, there would be no amount to be established by the government for the payment of just compensation, thus:
More telling is the fact that Land Bank can disagree with the decision of the DAR in the determination of just compensation, and bring the matter to the RTC designated as a SAC for final determination of just compensation.37
The foregoing clearly shows that there would never be a judicial determination of just compensation absent respondent Land Bank's participation. Logically, it follows that respondent is an indispensable party in an action for the determination of just compensation in cases arising from agrarian reform program.
Assuming arguendo that respondent is not an indispensable party but only a necessary party as is being imposed upon us by the petitioners, we find the argument of the petitioners that only indispensable parties can appeal to be incorrect.
There is nothing in the Rules of Court that prohibits a party in an action before the lower court to make an appeal merely on the ground that he is not an indispensable party. The Rules of Court does not distinguish whether the appellant is an indispensable party or not. To avail of the remedy, the only requirement is that the person appealing must have a present interest in the subject matter of the litigation and must be aggrieved or prejudiced by the judgment.38 A party, in turn, is deemed aggrieved or prejudiced when his interest, recognized by law in the subject matter of the lawsuit, is injuriously affected by the judgment, order or decree.39 The fact that a person is made a party to a case before the lower court, and eventually be made liable if the judgment be against him, necessarily entitles him to exercise his right to appeal. To prohibit such party to appeal is nothing less than an outright violation of the rules on fair play.
To determine the land value under P.D. No. 27 and E.O. No. 228, the following formula is used:
LV (land value) = 2.5 x AGP x GSP
Petitioners argue that the GSP be fixed at the time of payment by SAC which was then at P400. In support thereof, they cited the case of Land Bank v. Court of Appeals,40 wherein Land Bank was ordered to pay the land value based on the GSP at the time the Provincial Agrarian Reform Adjudicator's (PARAD) decision was rendered, and not at the time of the taking of the property. Petitioners also made reference to Article 1958 of the Civil Code which provides for the appraisal of an interest payable in kind at the current price of the product at the time and place of payment.41
Respondent counters that in keeping with settled jurisprudence, the determination of compensation for lands covered by P.D. No. 27 is reckoned from the time of the taking of the same.42 Under E.O. No. 228, 21 October 1972 was the time of taking for this was when the landowner was effectively deprived of possession and dominion over his landholding.43
In the case at bar, parties are in harmony as to the AGP of the lots under consideration. The AGP for the lots covered under TCTs No. T-107863 and No. T-107864 was at 94.64 cavans per hectare, and that for the lot under TCT No. T-107865 was at 118.47.44
The pith of the controversy is the determination of the GSP for one cavan of palay. Should the same be based on the price at the time of taking or at the time of payment as ordered by the SAC?
We must stress, at the outset, that the taking of private lands under the agrarian reform program partakes of the nature of an expropriation proceeding.45 In a number of cases, we have stated that in computing the just compensation for expropriation proceedings, it is the value of the land at the time of the taking, not at the time of the rendition of judgment, which should be taken into consideration.46 This being so, then in determining the value of the land for the payment of just compensation, the time of taking should be the basis. In the instant case, since the dispute over the valuation of the land depends on the rate of the GSP used in the equation, it necessarily follows that the GSP should be pegged at the time of the taking of the properties.
In the instant case, the said taking of the properties was deemed effected on 21 October 1972, when the petitioners were deprived of ownership over their lands in favor of qualified beneficiaries, pursuant to E.O. No. 22847 and by virtue of P.D. No. 27. 48 The GSP for one cavan of palay at that time was at P35.49 Prescinding from the foregoing discussion, the GSP should be fixed at said rate, which was the GSP at the time of the taking of the subject properties.
Petitioners are not rendered disadvantaged by the computation inasmuch as they are entitled to receive the increment of six percent (6%) yearly interest compounded annually pursuant to DAR Administrative Order No. 13, Series of 1994.50 As amply explained by this Court:51
Petitioners' reliance on Land Bank v. Court of Appeals52 where we ordered Land Bank to pay the just compensation based on the GSP at the time the PARAD rendered the decision, and not at the time of the taking, is not well taken. In that case, PARAD, in its decision, used the GSP at the time of payment in determining the land value. When the decision became final and executory, Land Bank, however, refused to pay the landowner arguing that the PARAD's valuation was null and void for want of jurisdiction. We ruled therein that the PARAD has the authority to determine the initial valuation of lands involving agrarian reform. Thus, the decision of the PARAD was binding on Land Bank. Land Bank was estopped from questioning the land valuation made by PARAD because it participated in the valuation proceedings and did not appeal the said decision. Hence, Land Bank was compelled to pay the land value based on the GSP at the time of payment.
The factual milieu of the case relied upon by petitioners is different from the case at bar. In the case on hand, respondent insisted from the very start that the land valuation be based on the GSP at the time of the taking - 1972. It stood firm on that ground. When SAC ordered Land Bank to pay petitioners the land value based on the GSP at the time of payment, respondent vehemently disagreed and questioned the valuation before the Court of Appeals.
WHEREFORE, we DENY the instant petition. The Decision of the Court of Appeals dated 15 September 2000 and its Resolution dated 03 May 2001 in CA-G.R. CV No. 61240 are hereby AFFIRMED. No costs.
Puno, (Acting C.J.) Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
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