2/15/2017 G.R.No.

170220

FIRSTDIVISION


JOSEFINAS.LUBRICA,inherG.R.No.170220
capacityasAssigneeofFEDERICO
C.SUNTAY,NENITASUNTAY
TAEDOandEMILIOA.M.
SUNTAYIII,
Petitioners,Present:
Panganiban,C.J.(Chairperson),
versusYnaresSantiago,
AustriaMartinez,
Callejo,Sr.,and
ChicoNazario,JJ.
LANDBANKOFTHEPHILIPPINES,
Respondent.Promulgated:

November20,2006
xx

DECISION

YNARESSANTIAGO,J.:


ThisPetitionforReviewonCertiorariunderRule45oftheRulesofCourtassailstheOctober27,
[1]
2005AmendedDecision oftheCourtofAppealsinCAG.R.SPNo.77530,whichvacatedits
May 26, 2004 Decision affirming (a) the Order of the Regional Trial Court of San Jose,
OccidentalMindoro,Branch46,actingasSpecialAgrarianCourt,inAgrarianCaseNos.R1339
andR1340,datedMarch31,2003directingrespondentLandBankofthePhilippines(LBP)to
deposit the provisional compensation as determined by the Provincial Agrarian Reform
Adjudicator (PARAD) (b) the May 26, 2003 Resolution denying LBPs motion for
reconsideration and (c) the May 27, 2003 Order requiring Teresita V. Tengco, LBPs Land
CompensationDepartmentManager,tocomplywiththeMarch31,2003Order.
Thefactsofthecaseareasfollows:

[2]
Petitioner Josefina S. Lubrica is the assignee of Federico C. Suntay over certain parcels of
agriculturallandlocatedatSta.Lucia,Sablayan,OccidentalMindoro,withanareaof3,682.0285
[3]
hectares covered by Transfer Certificate of Title (TCT) No. T31 (T1326) of the Registry of
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[3]
hectares covered by Transfer Certificate of Title (TCT) No. T31 (T1326) of the Registry of
DeedsofOccidentalMindoro. In 1972, a portion of the said property with an area of 311.7682
hectares,wasplacedunderthelandreformprogrampursuanttoPresidentialDecreeNo.27(1972)
[4] [5]
andExecutiveOrderNo.228(1987). Thelandwasthereaftersubdividedanddistributedto
farmerbeneficiaries.TheDepartmentofAgrarianReform(DAR)andtheLBPfixedthevalueof
thelandatP5,056,833.54whichamountwasdepositedincashandbondsinfavorofLubrica.

On the other hand, petitioners Nenita SuntayTaedo and Emilio A.M. Suntay III inherited from
FedericoSuntayaparcelofagriculturallandlocatedatBalansay,Mamburao,OccidentalMindoro
[6]
coveredbyTCTNo.T128 oftheRegisterofDeedsofOccidentalMindoro,consistingoftwo
lots, namely, Lot 1 with an area of 45.0760 hectares and Lot 2 containing an area of 165.1571
hectaresoratotalof210.2331hectares.Lot2wasplacedunderthecoverageofP.D.No.27but
only128.7161hectareswasconsideredbyLBPandvaluedthesameatP1,512,575.05.
Petitionersrejectedthevaluationoftheirproperties,hencetheOfficeoftheProvincialAgrarian
ReformAdjudicator(PARAD)conductedsummaryadministrativeproceedingsfordetermination
ofjustcompensation.OnJanuary29,2003,thePARADfixedthepreliminaryjustcompensation
atP51,800,286.43forthe311.7682hectares(TCTNo.T31)andP21,608,215.28forthe128.7161
[7]
hectares(TCTNo.T128).

[8]
Not satisfied with the valuation, LBP filed on February 17, 2003, two separate petitions for
judicial determination of just compensation before the Regional Trial Court of San Jose,
OccidentalMindoro,actingasaSpecialAgrarianCourt,docketedasAgrarianCaseNo.R1339
forTCTNo.T31andAgrarianCaseNo.R1340forTCTNo.T128,andraffledtoBranch46
thereof.

Petitioners filed separate Motions to Deposit the Preliminary Valuation Under Section 16(e) of
[9]
Republic Act (R.A.) No. 6657 (1988) and Ad Cautelam Answer praying among others that
LBPdepositthepreliminarycompensationdeterminedbythePARAD.

[10]
OnMarch31,2003,thetrialcourtissuedanOrder grantingpetitionersmotion,thedispositive
portionofwhichreads:

WHEREFORE, Ms. Teresita V. Tengco, of the Land Compensation Department I (LCD I), Land
Bank of the Philippines, is hereby ordered pursuant to Section 16 (e) of RA 6657 in relation to
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Section2,AdministrativeOrderNo.8,Seriesof1991,todeposittheprovisionalcompensationas
determinedbythePARADincashandbonds,asfollows:

1.InAgrarianCaseNo.R1339,theamountofP51,800,286.43,minustheamountreceivedbythe
Landowner
2.InAgrarianCaseNo.R1340,theamountofP21,608,215.28,lesstheamountofP1,512,575.16,
theamountalreadydeposited.

SuchdepositmustbemadewiththeLandBankofthePhilippines,Manilawithinfive(5)daysfrom
receiptofacopyofthisorderandtonotifythiscourtofhercompliancewithinsuchperiod.

LetthisorderbeservedbytheSheriffofthisCourtattheexpenseofthemovants.

[11]
SOORDERED.

[12]
LBPsmotionforreconsiderationwasdeniedinaResolution datedMay26,2003.The
[13]
followingday,May27,2003,thetrialcourtissuedanOrder directingMs.TeresitaV.Tengco,
LBPsLandCompensationDepartmentManager,todeposittheamounts.

Thus, on June 17, 2003, LBP filed with the Court of Appeals a Petition for Certiorari and
ProhibitionunderRule65oftheRulesofCourtwithapplicationfortheissuanceofaTemporary
[14]
RestrainingOrderandWritofPreliminaryInjunctiondocketedasCAG.R.SPNo.77530.

[15]
On June 27, 2003, the appellate court issued a 60day temporary restraining order and on
[16]
October6,2003,awritofpreliminaryinjunction.

[17]
OnMay26,2004,theCourtofAppealsrenderedaDecision infavorofthepetitioners,the
dispositiveportionofwhichreads:

WHEREFORE,premisesconsidered,therebeingnograveabuseofdiscretion,theinstantPetition
for Certiorari and Prohibition is DENIED. Accordingly, the Order dated March 31, 2003,
Resolution dated May 26, 2003, and Order dated May 27, 2003 are hereby AFFIRMED. The
preliminaryinjunctionWepreviouslyissuedisherebyLIFTEDandDISSOLVED.

[18]
SOORDERED.

The Court of Appeals held that the trial court correctly ordered LBP to deposit the amounts
provisionallydeterminedbythePARADasthereisnolawwhichprohibitsLBPtomakeadeposit
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pendingthefixingofthefinalamountofjustcompensation.Italsonotedthatthereisnoreason
for LBP to further delay the deposit considering that the DAR already took possession of the
propertiesanddistributedthesametofarmerbeneficiariesasearlyas1972.

LBP moved for reconsideration which was granted. On October 27, 2005, the appellate court
[19]
renderedtheassailedAmendedDecision, thedispositiveportionofwhichreads:

Wherefore,inviewoftheprescriptionofadifferentformulainthecaseofGabatinwhichWehold
as cogent and compelling justification necessitating Us to effect the reversal of Our judgment
herein sought to be reconsidered, the instant Motion for Reconsideration is GRANTED, and Our
May26,2004DecisionisherebyVACATEDandABANDONEDwiththeendinviewofgiving
waytoandactinginharmonyandincongruencewiththetenoroftherulinginthecaseofGabatin.
Accordingly,theassailedrulingsoftheSpecialAgrarianCourtis(sic)commandedtocomputeand
fix the just compensation for the expropriated agricultural lands strictly in accordance with the
modeofcomputationprescribed(sic)OurMay26,2004judgmentinthecaseofGabatin.

[20]
SOORDERED.

IntheAmendedDecision,theCourtofAppealsheldthattheimmediatedepositofthepreliminary
value of the expropriated properties is improper because it was erroneously computed. Citing
[21]
Gabatin v. Land Bank of the Philippines, it held that the formula to compute the just
compensation should be: Land Value = 2.5 x Average Gross Production x Government Support
Price. Specifically, it held that the value of the government support price for the corresponding
agricultural produce (rice and corn) should be computed at the time of the legal taking of the
subjectagriculturalland,thatis,onOctober21,1972whenlandownerswereeffectivelydeprived
ofownershipovertheirpropertiesbyvirtueofP.D.No.27.AccordingtotheCourtofAppeals,the
PARAD incorrectly used the amounts of P500 and P300 which are the prevailing government
supportpriceforpalayandcorn,respectively,atthetimeofpayment,insteadofP35andP31,the
prevailinggovernmentsupportpriceatthetimeofthetakingin1972.

Hence,thispetitionraisingthefollowingissues:

A.THECOURTAQUOHASDECIDEDTHECASEINAWAYNOTINACCORDWITHTHE
LATEST DECISION OF THE SUPREME COURT IN THE CASE OF LAND BANK OF THE
PHILIPPINESVS.HON.ELIG.C.NATIVIDAD,ETAL.,G.R.NO.127198,PROM.MAY 16,
[22]
2005and

B. THE COURT A QUO HAS, WITH GRAVE GRAVE ABUSE OF DISCRETION, SO FAR
DEPARTEDFROMTHEACCEPTEDANDUSUALCOURSEOFJUDICIALPROCEEDINGS,
DECIDINGISSUESTHATHAVENOTBEENRAISED,ASTOCALLFORANEXERCISEOF
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[23]
THEPOWEROFSUPERVISION.

Petitionersinsistthatthedeterminationofjustcompensationshouldbebasedonthevalueofthe
expropriatedpropertiesatthetimeofpayment.Respondent LBP, on the other hand, claims that
thevalueoftherealtiesshouldbecomputedasofOctober21,1972whenP.D.No.27tookeffect.
Thepetitionisimpressedwithmerit.

[24]
InthecaseofLandBankofthePhilippinesv.Natividad, theCourtruledthus:

Land Banks contention that the property was acquired for purposes of agrarian reform on
October21,1972,thetimeoftheeffectivityofPD27,ergojustcompensationshouldbebasedon
the value of the property as of that time and not at the time of possession in 1993, is likewise
erroneous. In OfficeofthePresident, Malacaang, Manila v. Court of Appeals, we ruled that the
seizure of the landholding did not take place on the date of effectivity of PD 27 but would take
effectonthepaymentofjustcompensation.

The Natividad case reiterated the Courts ruling in Office of the President v. Court of
[25]
Appeals thattheexpropriationofthelandholdingdidnottakeplaceontheeffectivityofP.D.
No.27onOctober21,1972butseizurewouldtakeeffectonthepaymentofjustcompensation
judiciallydetermined.

[26]
Likewise,intherecentcaseofHeirsofFranciscoR.Tantoco,Sr.v.CourtofAppeals,
we held that expropriation of landholdings covered by R.A. No. 6657 take place, not on the
effectivityoftheActonJune15,1988,butonthepaymentofjustcompensation.

In the instant case, petitioners were deprived of their properties in 1972 but have yet to
receive the just compensation therefor. The parcels of land were already subdivided and
distributed to the farmerbeneficiaries thereby immediately depriving petitioners of their use.
Underthecircumstances,itwouldbehighlyinequitableonthepartofthepetitionerstocompute
thejustcompensationusingthevaluesatthetimeofthetakingin1972,andnotatthetimeofthe
payment, considering that the government and the farmerbeneficiaries have already benefited
fromthelandalthoughownershipthereofhavenotyetbeentransferredintheirnames.Petitioners
weredeprivedoftheirpropertieswithoutpaymentofjustcompensationwhich,underthelaw,isa

[27]
prerequisitebeforethepropertycanbetakenawayfromitsowners. Thetransferofpossession
andownershipofthelandtothegovernmentareconditioneduponthereceiptbythelandownerof
thecorrespondingpaymentordepositbytheDARofthecompensationwithanaccessiblebank.
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thecorrespondingpaymentordepositbytheDARofthecompensationwithanaccessiblebank.
[28]
Untilthen,titleremainswiththelandowner.

Our ruling in Association of Small Landowners in the Philippines, Inc. v. Secretary of
[29]
AgrarianReform isinstructive,thus:

ItistruethatP.D.No.27expresslyorderedtheemancipationoftenantfarmerasOctober
21,1972anddeclaredthatheshallbedeemedtheownerofaportionoflandconsistingofafamily
sizedfarmexceptthatnotitletothelandownedbyhimwastobeactuallyissuedtohimunlessand
until he had become a fullfledged member of a duly recognized farmers cooperative. It was
understood, however, that full payment of the just compensation also had to be made first,
conformablytotheconstitutionalrequirement.

WhenE.O.No.228,categoricallystatedinitsSection1that:

All qualified farmerbeneficiaries are now deemed full owners as of October 21,
1972of thelandtheyacquired by virtue of Presidential Decree No. 27 (Emphasis
supplied.)

it was obviously referring to lands already validly acquired under the said decree, after proof of
fullfledgedmembershipinthefarmerscooperativesandfullpaymentofjustcompensation.xxx

TheCARPLaw,foritspart,conditionsthetransferofpossessionandownershipoftheland
tothegovernmentonreceiptbythelandownerofthecorrespondingpaymentorthedepositbythe
DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also
remainswiththelandowner.Nooutrightchangeofownershipiscontemplatedeither.

WealsonotethattheexpropriationproceedingsintheinstantcasewasinitiatedunderP.D.
No.27buttheagrarianreformprocessisstillincompleteconsideringthatthejustcompensationto
bepaidtopetitionershasyettobesettled.ConsideringthepassageofR.A.No.6657beforethe
completionofthisprocess,thejustcompensationshouldbedeterminedandtheprocessconcluded
underthesaidlaw.Indeed,R.A.No.6657istheapplicablelaw,withP.D.No.27andE.O.No.
[30]
228havingonlysuppletoryeffect.

[31]
InLandBankofthePhilippinesv.CourtofAppeals, weheldthat:

RA 6657 includes PD 27 lands among the properties which the DAR shall acquire and
distributetothelandless.Andtofacilitatetheacquisitionanddistributionthereof,Secs.16,17and
18oftheActshouldbeadheredto.

Section 18 of R.A. No. 6657 mandates that the LBP shall compensate the landowner in
suchamountasmaybeagreeduponbythelandownerandtheDARandtheLBPorasmaybe
finally determined by the court as the just compensation for the land. In determining just
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compensation, the cost of the acquisition of the land, the current value of like properties, its
nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the
assessmentmadebygovernmentassessorsshallbeconsidered.Thesocialandeconomicbenefits
contributedbythefarmersandthefarmworkersandbythegovernmenttothepropertyaswellas
thenonpaymentoftaxesorloanssecuredfromanygovernmentfinancinginstitutiononthesaid
[32]
landshallbeconsideredasadditionalfactorstodetermineitsvaluation.

[33]
Corollarily,weheldinLandBankofthePhilippinesv.Celada thattheaboveprovision
wasconvertedintoaformulabytheDARthroughAdministrativeOrderNo.05,S.1998,towit:

LandValue(LV)=(CapitalizedNetIncomex0.6)+(ComparableSalesx0.3)+(Market
ValueperTaxDeclarationx0.1)

Petitioners were deprived of their properties way back in 1972, yet to date, they have not yet
received just compensation. Thus, it would certainly be inequitable to determine just
compensationbasedontheguidelineprovidedbyP.D.No.227andE.O.No.228consideringthe
failuretodeterminejustcompensationforaconsiderablelengthoftime.Thatjustcompensation
shouldbedeterminedinaccordancewithR.A.No.6657andnotP.D.No.227orE.O.No.228,is
importantconsideringthatjustcompensationshouldbethefullandfairequivalentoftheproperty
taken from its owner by the expropriator, the equivalent being real, substantial, full and ample.
[34]

WHEREFORE, premises considered, the petition is GRANTED. The assailed Amended
Decision dated October 27, 2005 of the Court of Appeals in CAG.R. SP No. 77530 is
REVERSED and SET ASIDE. The Decision dated May 26, 2004 of the Court of Appeals
affirming (a) the March 31, 2003 Order of the Special Agrarian Court ordering the respondent
Land Bank of the Philippines to deposit the just compensation provisionally determined by the
PARAD(b)theMay26,2003ResolutiondenyingrespondentsMotionforReconsiderationand
(c) the May 27, 2003 Order directing Teresita V. Tengco, respondents Land Compensation
DepartmentManagertocomplywiththeMarch31,2003Order,isREINSTATED.TheRegional

Trial Court of San Jose, Occidental Mindoro, Branch 46, acting as Special Agrarian Court is
ORDEREDtoproceedwithdispatchinthetrialofAgrarianCaseNos.R1339andR1340,and
tocomputethefinalvaluationofthesubjectpropertiesbasedontheaforementionedformula.

SOORDERED.
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SOORDERED.


CONSUELOYNARESSANTIAGO
AssociateJustice

WECONCUR:



ARTEMIOV.PANGANIBAN
ChiefJustice
Chairperson


MA.ALICIAAUSTRIAMARTINEZROMEOJ.CALLEJO,SR.
AssociateJusticeAssociateJustice



MINITAV.CHICONAZARIO
AssociateJustice



CERTIFICATION


PursuanttoSection13,ArticleVIIIoftheConstitution,itisherebycertifiedthattheconclusions
intheaboveDecisionwerereachedinconsultationbeforethecasewasassignedtothewriterof
theopinionoftheCourtsDivision.



ARTEMIOV.PANGANIBAN
ChiefJustice

[1]
Rollo,pp.3035.PennedbyAssociateJusticeRosmariD.CarandangandconcurredinbyAssociateJusticesGodardoA.Jacintoand
ElviJohnS.Asuncion.
[2]
CArollo,p.157.
[3]
Id.at6588.
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[3]
Id.at6588.
[4]
DECREEINGTHEEMANCIPATIONOFTENANTSFROMTHEBONDAGEOFTHESOIL,TRANSFERRINGTOTHEMTHE
OWNERSHIPOFTHELANDTHEYTILLANDPROVIDINGTHEINSTRUMENTSANDMECHANISMTHEREFOR.
[5]
DECLARING FULL LAND OWNERSHIP TO QUALIFIED FARMER BENEFICIARIES COVERED BY PRESIDENTIAL
DECREENO.27:DETERMININGTHEVALUEOFREMAININGUNVALUEDRICEANDCORNLANDSSUBJECTTOP.D.NO.
27ANDPROVIDINGFORTHEMANNEROFPAYMENTBYTHEFARMERBENEFICIARYANDMODEOFCOMPENSATION
TOTHELANDOWNER.
[6]
CArollo,pp.8995.
[7]
Id.at96118.
[8]
Id.at119133.
[9]
ComprehensiveAgrarianReformLawof1988.
[10]
CArollo,pp.5154.PennedbyJudgeErnestoP.Pagayatan.
[11]
Id.at5354.
[12]
Id.at5562.
[13]
Id.at6364.
[14]
Id.at250.
[15]
Id.at220222.
[16]
Id.at355356.
[17]
Id.at481491.
[18]
Id.at490491.
[19]
Id.at514518.
[20]
Rollo,p.34.
[21]
G.R.No.148223,November25,2004,444SCRA176.
[22]
Rollo,p.18.
[23]
Id.at22.
[24]
G.R.No.127198,May16,2005,458SCRA441,451.
[25]
413Phil.711(2001).
[26]
G.R.No.149621,May5,2006,SCELibrary.
[27]
Id.
[28]
Roxas&Co.,Inc.v.CourtofAppeals,378Phil.727,755(1999).
[29]
G.R.Nos.78742,79310,79744&79777,July14,1989,175SCRA343,390391.
[30]
LandBankofthePhilippinesv.Natividad,supranote24at451452Parisv.Alfeche,416Phil.473,488(2001)LandBankofthe
Philippinesv.CourtofAppeals,378Phil.1248,12601261.
[31]
Id.at1261.
[32]
RepublicActNo.6657(1988),Sec.17.
[33]
G.R.No.164876,January23,2006,479SCRA495,508509.
[34]
LandBankofthePhilippinesv.Natividad,supranote24at452,citingAssociationofSmallLandownersinthePhilippines,Inc.v.
SecretaryofAgrarianReform,supranote29.

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