December 2009 - Philippine Supreme Court Decisions/Resolutions
G.R. No. 177404 and G.R. NO. 178097 - Land Bank of the Philippines v. Kumassie Plantation Company Incorporated
SPECIAL THIRD DIVISION
[G.R. NO. 177404 : December 4, 2009]
LAND BANK OF THE PHILIPPINES, Petitioner, v. KUMASSIE PLANTATION COMPANY INCORPORATED, Respondent.
[G.R. NO. 178097]
KUMASSIE PLANTATION COMPANY INCORPORATED, Petitioner, v. LAND BANK OF THE PHILIPPINES and THE SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, Respondents.
R E S O L U T I O N
For resolution is a Motion1 and Supplement to the Motion2 filed in these consolidated cases by Kumassie Plantation Co., Inc. (KPCI), seeking reconsideration of our Decision dated 25 June 2009, the dispositive part of which reads:
WHEREFORE, in view of the foregoing:
1) The Petition of Land Bank of the Philippines in G.R. No. 177404 is GRANTED. The Decision, dated 24 November 2005, and Resolution, dated 30 March 2007, of the Court of Appeals in CA-G.R. CV No. 65923, are REVERSED and SET ASIDE. The valuation of the subject land at
P41,792.94 per hectare, for a total of P19,140,965.91, by the Land Bank of the Philippines is APPROVED, and such amount is DECLARED PAID IN FULL; andcralawlibrary
2) The Petition of Kumassie Plantation Company Incorporated is DENIED. No costs.3
In the said Decision, we reversed the Court of Appeals' ruling on the amount of just compensation to be paid KPCI, pursuant to the compulsory acquisition of its 457-hectare landholding located in Basiawan, Santa Maria, Davao del Sur. We based our decision on the fact that the appellate court, as well as the Regional Trial Court (RTC), failed to consider the factors mentioned in Section 17 of Republic Act No. 6657, and to apply the formula stated in Department of Agrarian Reform Administrative Order (DAO) No. 6, Series of 1992, as amended by DAO No. 11, Series of 1994. In accordance with our rulings in Land Bank of the Philippines v. Banal4 and Land Bank of the Philippines v. Lim,5 we held that the factors laid down in Section 17 of Republic Act No. 6657 and the formula stated in DAO No. 6, Series of 1992, as amended, must be adhered to by courts in fixing the valuation of lands subject to acquisition under agrarian reform laws. These factors and formula are mandatory and not mere guides that the courts may disregard. Considering that the Land Bank of the Philippines (LBP) applied the factors and formula prescribed by law for the determination of just compensation, we rejected the RTC's valuation of KPCI's land at
P100,000.00 per hectare, and approved the valuation made by LBP in the amount of P41,792.94 per hectare.
KPCI is now before us pleading for reconsideration of our decision. It insists that the DAR valuation formula should not bind the courts, as the determination of just compensation is primarily a judicial function. It also claims that the LBP erred in its computation of the just compensation to be paid, since it did not include the cacao production of the property as part of its valuation. It further asserts that it should be compensated for the cacao trees planted on the land because, even if the same were planted by its lessee, the Philippine Cocoa Estates Corporation (PCEC), the same belong to KPCI under the terms of their lease contract. It prays for the reinstatement of the RTC and the Court of Appeals' decision in the present cases.
Anent the first ground cited by KPCI, suffice it to state that while the determination of just compensation involves the exercise of judicial discretion, such discretion must nonetheless be discharged within the bounds of law.6 It must be stressed that DAO No. 6, Series of 1992, as amended, partakes of the nature of a statute, as it was issued to carry out the provisions of Republic Act No. 6657. The DAR valuation formula embodied in the said administrative order was devised to implement Section 17 of Republic Act No. 6657. Thus, courts are bound by the formula unless and until the same is invalidated in appropriate proceedings.7
With respect to the second ground raised by KPCI, however, there is indeed a cogent reason to reconsider our earlier decision. We have taken a second hard look at the computation made by LBP and found that it mistakenly excluded figures pertaining to the land's cacao production.???ñr?bl?š