Philippine Supreme Court Resolutions

G.R. No. 171684 (Land Bank of the Philippines vs. Lourdes Sabater, et al.). - The present case is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by petitioner Land Bank of the Philippines (LBP), praying for the review and partial reversal of the Decision dated November 9, 2005^[1]  and the Resolution dated February 28, 2006^[2] of the Court of Appeals (CA) in CA-G.R. SP No. 87554.

The facts:

Respondent Lourdes Sabater (Sabater) was the owner of a landholding with total area of approximately 15.1788 hectares, covered by Tax Declaration No. 99-024-00212 and located at Lidong, Polangui, Albay. Considering that the subject landholding was an agricultural land, it was placed under the coverage of the Comprehensive Agrarian Reform Program Law (CARP Law) of 1988 or Republic Act (R.A.) No. 6657. Eventually, the said landholding was expropriated under the compulsory acquisition by the State, pursuant to Section 16 of R.A. 6657.

However, after the Department of Agrarian Reform (DAR) and the LBP conducted an ocular inspection and field verification, only 14.5767 hectares (which was in fact the actual area of the subject landholding) was acquired under the CARP. Consequently, per DAR-LAND BANK Valuation or computation, the subject landholding was valued in the total amount of P460,109.75.

Respondent Sabater rejected the said DAR-LAND BANK Valuation. She then sought at the Department of Agrarian Reform Adjudication Board a summary administrative just compensation proceedings where the handling provincial adjudicator of Albay, Virgilio Sorita, set aside the DAR-LAND BANK Valuation and fixed the value of the subject landholding in the total amount of P1,679,934.76.

Petitioner LBP brought the case to the Regional Trial Court (RTC) of Legaspi City, Branch 3, then designated Special Agrarian Court, pursuant to Sections 56 and 57 of the CARP Law. However, respondent Sabater failed to file Answer to the Complaint. Thus, the RTC declared the respondent in default, allowing petitioner LBP to present its evidence ex-parte.

The evidence presented ex parte is reproduced in the decision of the RTC, as follows: 

  Land Bank's evidence showed: 

1. The land was acquired on September 28, 1997;
   
   
2. The main land use is corn - a big area is planted to corn and only a small area is planted to coconuts and the residential area being planted with assorted fruit bearing trees is considered agricultural land;
   
   
3. The average gross production of corn per year/crop cycle/hectare is 20 cavans and coco - 4 nuts/tree/hectare (1 cavan is 50 kilograms);
   
   
4. There is no comparative sale or land sale transaction in the municipality/province; and
   
   
5.  There is no evidence of acquisition cost.^[3]

The RTC on October 18, 2004 issued a decision, holding that "the just compensation of the property is P460,109.75 with interest of 6% per annum beginning September 28, 1997 (actual taking of the property) until the value is fully paid x x x."^[4]

Aggrieved with the trial court's decision, petitioner LBP filed a Petition for Review before the OA. The CA then issued the assailed November 9, 2005 Decision and February 28, 2006 Resolution, which both affirmed the trial court's October 18, 2004 Decision; hence this petition.

Petitioner LBP argued that the imposition of additional 6% interest on top of the amount adjudged as just compensation for the subject landholding and its computation from the time of the land's taking are not in accordance with the CARP Law.

After perusal of the records of the case, we resolve to deny the petition.

In Land Bank of the Philippines v. Domingo and Mamerto Soriano,^[5] this Court was confronted with the same issue as this instant case. In the said case, the Court disagreed with LBP's contention that imposition of the 6% interest rate on the land's valuation should be computed from the date of the taking up to the time LBP approved the payment of their just compensation claim and a corresponding deposit of the compensation proceeds of the bank. The Court raciocinated in this wise: 

However, as embodied in its Prefatory Statement, the intent of the Administrative Order was precisely to address a situation "where a number of landholdings remain unpaid in view of the non-acceptance by the landowners of the compensation due to low valuation. Had the landowner been paid from the time of taking his land and the money deposited in a bank, the money would have earned the same interest rate compounded annually as authorized under banking laws, rules and regulations." 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. To condition the payment upon LBP�s 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.^[6]  (emphasis supplied)

Considering the above jurisprudence, we find the decisions of the trial court and the CA, fixing the just compensation of the subject landholding to P460,109.75 with interest of 6% per annum beginning September 28, 1997 until the value is fully paid, in accordance with law and existing jurisprudence.

The computation of just compensation simply followed LBP's formula, which reflects what is provided for under Section 17, R.A. 6657 and DAR Administrative Order No. 05, Series of 1988. The imposition of the 6% interest is consistent to this Court's ruling in Land Bank of the Philippines v. Domingo and Mamerto Soriano,^[7] and Apo Fruits Corporation, et al. v. Court of Appeals, et al.^[8]  where it was held that the interest on just compensation is proper considering the delay in its payment and considering that 6% is the legal interest provided for under Article 2209 of the Civil Code. Furthermore, the running of the period on interest payment starts from September 28, 1997 since it was the time of the taking as shown in petitioner LBP's own evidence.

Respondent Sabater in the letter/comment to this court dated September 5, 2008 proposed a compromise where she suggested that petitioner LBP return to her the subject landholding so that she may distribute for free 33% of the land area to the farmers who cultivate them. While this may be laudable, the same may complicate all the more the distribution of said landholding and may not be in accordance with law.

It must also be noted that herein respondent is in advance age. She claimed that the land subject of CARP was a product of honest labor. Thus, it would be the height of injustice if she fails to receive what is due her as just compensation. Immediate payment of the just compensation plus 6% interest at the time of taking on September 28, 1997 should be done if justice must be served. The petitioner is enjoined then not to further delay payment of the just compensation as soon as this Decision becomes final and executory. If the petitioner fails to immediately pay herein respondent, the interest due shall itself earn 12% interest from the time it is judicially demanded.^[9]cralaw

WHEREFORE, the Petition is DENIED. The Decision dated November 9, 2005 and the Resolution dated February 28, 2006 of the CA in CA-G.R. SP No. 87554 are hereby AFFIRMED  in its entirety.

No cost.

SO ORDERED.

Very truly yours,

MA. LUISA L. LAUREA
Division Clerk of Court

By:

(Sgd.) TERESITA AQUINO TUAZON
Deputy Division Clerk of Court

Endnotes:

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^[1] Penned by Associate Justice Arturo G. Tayag, with Associate Justices Jose L. Sabio, Jr. and Jose C. Mendoza (now a member of this Court), concurring; rollo, pp. 58-66.

^[2] Id. at 88-92.

^[3] Id. at 28-29.

^[4] Id. at 30.

^[5] G.R. Nos. 180772 and 180776, May 6, 2010, 620 SCRA 347.

^[6] Id. at 356-357.

^[7] Supra note 5.

^[8] G.R. No. 164195, December 19, 2007, 541 SCRA 117.

^[9] Id. at 140.