January 2012 - Philippine Supreme Court Resolutions
Philippine Supreme Court Resolutions
[G.R. No. 190274 : January 18, 2012]
LAND BANK OF THE PHILIPPINES VS. HEIRS OF LORETO LAZATIN NAMELY: CARMELO F. LAZATIN AND VICTORIA L. ANGELES
G.R. No. 190274 � (Land Bank of the Philippines vs. Heirs of Loreto Lazatin namely: Carmelo F. Lazatin and Victoria L. Angeles)
RESOLUTION
This Petition for Review on Certiorari[1] assails the June 23, 2009 Decision[2] and November 11, 2009 Resolution[3] of the Court of Appeals (CA) in CA-G.R. C.V. No. 85417, which set aside the October 27, 1999 Decision of the Regional Trial Court (RTC) of Angeles Pampanga, Branch 56, and remanded the case to the court a quo for reception of evidence and final determination of the just compensation due to respondents.
The Factual Antecedents
Loreto Lazatin (Loreto) was the owner of two (2) parcels of agricultural land covered by Transfer Certificate of Title (TCT) Nos. 16364 and 16365, with an aggregate area of 61.4493 hectares (has.) out of which 4.6119 has. were compulsorily acquired under P.D. No. 27 (Tenants Emancipation Decree). The remaining 56.8374 has. were voluntarily offered for sale (VOS) to the government under R.A. No. 6657 (Comprehensive Agrarian Law of 1988) but only 50.5947 has. were acquired by the latter.
Petitioner Land Bank of the Philippines (LBP) initially valued the area subject of VOS at P1,651,749.06, which amount was deposited in trust. Pending summary administrative proceedings for determination of final valuation (docketed as LVC VOS Case No. 046-P�92] by the Department of Agrarian Reform - Regional Agrarian Reform Adjudicator (DAR-RARAD), the DAR took possession of the land. On June 20, 1994, the RARAD rendered a Decision fixing just compensation at P2,872,207.00 using the formula provided under DAR Administrative Order No. 6. Series of 1992 (AO6-9T)[4], as well as the data on LBP's valuation sheet. However, Loreto's motion to deposit the corresponding amount was denied.
On September 6, 1994, Loreto's heirs, respondents herein, filed a petition for determination of just compensation with the court a quo.
The RTC Ruling
On October 27, 1999, the court a quo rendered a Decision fixing the just compensation of the property subject of VOS at P6,222,612.16[5] for 54.3640 has. In arriving at said amount, the court divided the estimated net income of the property (63.59 piculs/hectare x P540.00/picul x 20%) by the capitalization rate[6] of 6%, as applied by the Special Agrarian Court of Camarines Norte in the case of Luz Rodriguez vs. DAR, et al. (Luz Rodriguez case). On the other hand, it valued the 4.6119 has. compulsorily acquired under P.D. No. 27 at P410,742.50 using the formula: LV = (2.5 x Average Gross Production x Government Support Price for 1 cavan of palay in 1972 @ P500.00) multiplied by the total area of the land, plus compounded 6% incremental annual interest thereon in the amount of P1,457,880.00.
LBP appealed to the CA arguing that the area acquired under the VOS was only 50.5947 has., not 54.3640 has., and that the court a quo erred in taking judicial notice of the capitalization rate used in the Luz Rodriguez case without hearing the parties thereon, and in fixing the just compensation without considering the factors provided under Section 17 of R.A. No. 6657. It also faulted the court a quo for disregarding the basic formula prescribed under P.D. No. 27 and Executive Order No. 228[7], series of 1987, in valuing the area which was compulsorily acquired.
The CA Ruling
In a Decision[8] dated June 23, 2009, the CA found the evidence on record insufficient to justify the computation of just compensation by the court a quo. Taking into consideration that the landowner has not been paid for the land compulsorily acquired under P.D. No. 27 even after the enactment of R.A. No. 6657, the appellate court held that the provisions of the latter law should apply. Accordingly, the case was remanded to the court a quo for reception of evidence and final determination of just compensation pursuant to Section 17 of R.A. No. 6657 and the formula under DAR AO 6-92, as amended by AO 11-94.
The CA further held that the incremental interest on the property [acquired under P.D. No. 27 should be computed from October 21, 1972 up to the actual payment but not later than December 31, 2009 in accordance with DAR AO No. 6, series of 2008.
In the instant petition for review, the LBP contends that the CA erred in imposing incremental compounded interest of 6% per annum on the compensation for the property acquired under P.D. No. 27 because such is not due if compensation is determined pursuant to Section 17 of R.A. No. 6657, invoking the case of LBP vs. Chico.[9]
After a perusal of the records, the Court sustains the order remanding the case to the court a quo for reception of evidence and final determination of just compensation taking into account the factors under Section 17 of R.A. No. 6657 and the formula prescribed under AO 6-92, as amended by AO 11-94. It is settled that if payment of just compensation for property acquired under P.D. No. 27 has not been completed prior to the passage of R.A. No. 6657, as in this case, just compensation should be computed based on the parameters prescribed under R.A. No. 6657, with P.D. No. 27 and E.O. No. 228 having only suppletory effect.[10]
However, the incremental compounded interest of 6% per annum imposed by the RTC and the CA should be deleted in accordance with our ruling in LBP vs. Chico that when just compensation is determined under R.A. No. 6657, no incremental, compounded interest of six percent (6%) per annum shall be assessed.cralaw
WHEREFORE, the assailed June 23, 2009 Decision and November 11, 2009 Resolution in CA-G.R. C.V. No. 85417 are hereby AFFIRMED with MODIFICATION deleting the incremental compounded interest of six percent (6%) per annum on the just compensation due to respondents.
SO ORDERED.
Very truly yours,
(Sgd.) LUCITA ABJELINA-SORIANO
Division Clerk of Court
Endnotes:
[1] Under Rule 45 of the Rules of Court.[2] Rollo, pp. 32-48.
[3] Id. at 49-51.
[4] LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
| Where: | LV = Land Value | |||
| CNI = Capitalized Net Income | ||||
| CS = Comparative Sales | ||||
| MV = Market Value per Tax Declaration | ||||
| CNI = | (AGP x SP)-CO I2 | |||
| Where: | CNI | = | Capitalized Net Income | |
| AGP | = | Latest available 12-month�s gross production immediately preceding the date of offer in case of VOS or date of notice of coverage in case of CA | ||
| SP | = | The average of the latest available 12-month's selling prices prior to the date of notice of coverage in case of CA | ||
| CO | = | Cost of operations | ||
| Whenever the cost of operations could not be obtained or verified, an assumed net income rate (NIR) of 20% shall be used, xxx | ||||
| I2 | = | Capitalization Rate | ||
[5] Computed as follows:
gross product selling price net income capitalization rate land value per hectare land acquired land value [6] The capitalization rate under R.A. No. 3844
[7] Declaring Full Land Ownership to Qualified Farmer-Beneficiaries covered by Presidential Decree No. 27; Determining the Value of Remaining Unvalued Rice and Corn Lands Subject of P.D. No. 27; and Providing for the Manner of Payment by the Farmer-Beneficiary and Mode of Compensation to the Landowner.
[8] Rollo, pp. 32-18. Penned by Justice Ramon M. Bato, Jr., and concurred by Justices Conrado M. Vasquez, Jr. and Arturo G. Tayag.
[9] G.R. No. 168453, March 13, 2009.
[10] Land Bank of the Philippines v. Barrido, G.R. No. 183688, August 18, 2010; Land Bank of the Philippines v. Domingo and Mamerto Soriano, G.R. Nos. 180772 and 180776, May 6, 2010; Land Bank of the Philippines v. J.L. Jocson and Sons, G.R. No. 180803, October 23, 2009.
