G.R. No.

170685 September 22, 2010 Land Bank of the Philippines vs Enrique Livioco FACTS: Enrique Livioco was the registered owner of a sugarland located in Mabalacat, Pampanga. Sometime between 1987 and 1988, Livioco offered his sugarland to the DAR for acquisition. The voluntary-offer-to-sell form he submitted indicated that his property is adjacent to residential subdivisions and an international paper mill.The DAR referred Liviocos offer to the Land Bank of the Philippines for valuation. Livioco was then informed of the valuation and that the cash portion of the claim proceeds have been kept in trust pending his submission of ownership documents. It appears, however, that Livioco did not act upon the notices given by both agencies. LBP issued a certification to the Register of Deeds of Pampanga as compensation for Liviocos sugarland. It was only after two years that Livioco requested for a revaluation of the compensation on the ground that it has already appreciated from the time it was offered for sale. The request was denied by the Regional Director Antonio Nuesa on the ground that there was already a perfected sale. The DAR proceeded to take possession of Liviocos property. The DAR awarded Certificates of Land Ownership Award (CL OAs) covering Liviocos property to 26 farmer-beneficiaries. Livioco filed separate complaints to cancel the CLOAs and to recover his property but the same proved to be futile. Unable to recover his property but unwilling to accept what he believes is an outrageously low valuation of his property, Livioco filed for a determination of just compensation against the DAR, LBP, and CLOA holders before the RTC of Angeles City. He maintained that the area where his property is located has become predominantly residential, hence, he should be paid for his propertys value as such. To prove that his property is residential, Livioco presented a certification from the Office of Municipal Planning and Development Coordinator of the Mabalacat, Pampanga that, per zoning ordinance, Liviocos land is located in an area where the dominant land use is residential. ISSUE: Whether or not the compensation for respondents property was in accordance with the law? RULING: For purposes of just compensation, the fair market value of an expropriated property is determined by its character and price at the time of taking. There are three important concepts in this definition of taking the character of the property, its price, and the time of actual taking. The lower courts erred in ruling that the character or use of the property has changed from agricultural to residential because there is no allegation or proof that the property was approved for conversion to other uses by the DAR. it is the DAR that is mandated by law to evaluate and to approve land use conversion to prevent fraudulent evasion from the agrarian reform coverage. Reclassification and plans by the local governments do not ipso facto convert an agricultural property to residential, commercial or industrial. In the absence of approval for conversion from the DAR or actual expropriation by the LGU, the character of respondents property has not ceased to be agricultural and should be valued as such. The trial and appellate courts also erred in disregarding Sec 17 of RA 6657 in their determination of just compensation. The trial court revealed the importance of said section and recognized insufficiency of evidence to arrive at a just compensation; however, it still proceeded to rule on the case without receiving such relevant evidence. The trial court, as affirmed by the CA, ruled in favour of the respondent based on preponderance of evidence, regardless of the fact the evidence presented was not relevant to the factors mentioned in Sec 17 of RA 6657 namely, 1) cost of acquisition, 2) nature of the property, 3) current value of like properties, and 4) actual use and income of property. The valuation of the lower court is not acceptable for irrelevant evidence; however, the valuation of LBP is also not acceptable for lack of proper substantiation. Since both parties failed to adduce evidence of the propertys value as an agricultural land at the time of the taking, it is premature for the Court to make a final decision on the matter. Not being a trier of facts, the Court cannot also receive new evidence from the parties to aid in the resolution of the case. Thus, the case must be remanded to the trial court for reception of evidence and determination of just compensation in accordance with Sec 17 of RA 6657.