Hacienda Luisita vs PARC
||And since it is only upon the approval of the SDP that
Basically, the issues raised by HLI and Mallari, et al. boil down to
the following: (1) determination of the date of "taking"; and (2) just
compensation for the homelots given to the FWBs.
HLI maintains that the Notice of Coverage issued on January 2,
2006 may, at the very least, be considered as the date of "taking"
as this was the only time that the agricultural lands of Hacienda
Luisita were placed under compulsory acquisition in view of its
failure to perform certain obligations under the SDP.
Mallari, et al. are of a similar view. They contend that Tarlac
Development Corporation (Tadeco), having as it were majority
control over HLI, was never deprived of the use and benefit of the
agricultural lands of Hacienda Luisita. Upon this premise, Mallari, et
al. claim the "date of taking" could not be at the time of the approval
of the SDP|||
Alyansa ng mga Manggagawang Bukid sa Hacienda Luisita
(AMBALA) alleges that HLI should no longer be paid just
compensation for the agricultural land that will be distributed to the
FWBs, since the Manila Regional Trial Court (RTC) already
rendered a decision ordering the Cojuangcos to transfer the control
of Hacienda Luisita to the Ministry of Agrarian Reform. In the event,
however, that this Court will rule that HLI is indeed entitled to
compensation, AMBALA contends that if HLI or Tadeco is, at all,
entitled to just compensation, the "taking" should be reckoned as of
November 21, 1989, the date when the SDP was approved, and the
amount of compensation should be PhP40,000 per hectare as this
was the same value declared in 1989 by Tadeco to ensure that the
FWBs will not control the majority stockholdings in HLI
HLI shall be paid just compensation for the remaining agricultural
land that will be transferred to DAR for land distribution to the
FWBs. We find that the date of the "taking" is November 21, 1989,
when PARC approved HLIs SDP per PARC Resolution No. 89-12-
2. DAR shall coordinate with LBP for the determination of just
compensation. We cannot use May 11, 1989 when the SDOA was
executed, since it was the SDP, not the SDOA, that was approved
by PARC.
We maintain that the date of "taking" is November 21, 1989, the
date when PARC approved HLI's SDP per PARC Resolution No.
89-12-2, in view of the fact that this is the time that the FWBs were
considered to own and possess the agricultural lands in Hacienda
Luisita. To be precise, these lands became subject of the agrarian
reform coverage through the stock distribution scheme only upon
the approval of the SDP, that is, November 21, 1989. Thus, such
approval is akin to a notice of coverage ordinarily issued under
compulsory acquisition. Further, any doubt should be resolved in
favor of the FWBs
In determining just compensation, the price or value of the property
at the time it was taken from the owner and appropriated by the
government shall be the basis.
It should be noted, however, that "taking" does not only take place
upon the issuance of title either in the name of the Republic or the
beneficiaries of the Comprehensive Agrarian Reform Program
(CARP). "Taking" also occurs when agricultural lands are voluntarily
offered by a landowner and approved by PARC for CARP coverage
through the stock distribution scheme, as in the instant case. Thus,
HLI's submitting its SDP for approval is an acknowledgment on its
part that the agricultural lands of Hacienda Luisita are covered by
CARP. However, it was the PARC approval which should be
considered as the effective date of "taking" as it was only during this
time that the government officially confirmed the CARP coverage of
these lands.
the agricultural lands actually came under CARP coverage, such
approval operates and takes the place of a notice of coverage
ordinarily issued under compulsory acquisition. These agricultural
lands constituted as the capital contribution of the FWBs in HLI. In
effect, Tadeco deprived itself of the ownership over these lands
when it transferred the same to HLI.||Notably, Tadeco and HLI are
two different entities with separate and distinct legal personalities.
Ownership by one cannot be considered as ownership by the
other.|||
Landbank vs Dumlao
In determining just compensation for lands covered by the
government's Operation Land Transfer, which law applies
Presidential Decree (PD) No. 27 or Republic Act (RA) No.
6657 known as the Comprehensive Agrarian Reform (CARP)
Law?
Respondents, heirs of the deceased Florentino G. Dumlao, were
the co-owners of several parcels of agricultural land at Nueva
Vizcaya.
The properties were placed under Operation Land Transfer by
the Department of Agrarian Reform (DAR). However, the definite
time of actual taking was not stated.
Pursuant to PD No. 27 and Executive Order (EO) No. 228, a
preliminary valuation was made by the DAR on the landholdings.
Finding the valuation to be correct, petitioner bank informed
respondents of the said valuation. Payments were then
deposited in the name of the landowners. Respondents filed a
Complaint before the Regional Trial Court (RTC) for
determination of just compensation for their properties. It was
claimedthat they were not paid their just compensation for the
properties despite issuance of certificates of land transfer to
farmer-beneficiaries by the DAR. They prayed for the
appointment of three (3) competent and disinterested
commissioners who would determine and report to the court the
just compensation of their landholdings based on their current fair
market value.
The RTC then appointed Atty. John D. Balasya, Clerk of Court,
as commissioner. He was mandated to "receive, examine, and
ascertain valuation of the properties". Believing that the valuation
of the properties is not commensurate to their true value and,
hence, not a "just" compensation.
Instead of adducing additional evidence, respondents filed a
motion for reconsideration of the trial court's order. Positing that
the additional evidence required by the court pertains to the
formula under PD No. 27, respondents insisted on P109,000.00
per hectare, the market value of the properties, as just
compensation.
The CA declared that the definite time of the actual taking of the
subject properties is not certain. Further, there is no doubt that
the transfer of the subject landholdings is governed by PD No.
27. However, after the passage of RA No. 6657, the formula
relative to valuation under PD No. 27 no longer applies.
Relying on the Commissioner's Report, the CA assigned the
lower value of P109,000.00 per hectare as just compensation for
the subject properties.
We rejected the DAR's valuation of just compensation based on the
formula provided by PD No. 27 and EO No. 228. We held then that
Section 17 of RA No. 6657 is applicable. The latter law, being
the latest law in agrarian reform, should control.|||PD27 only has
suppletory effect
Needless to say, respondents have already been deprived of the
use and dominion over their landholdings for a substantial period
of time (26 yrs). In the interim, petitioner bank has abjectly failed
to pay, much less to determine, the just compensation due to
respondents. Petitioner's gross failure to compensate
respondents for loss of their land, while transferring the same to
the farmer-beneficiaries, make it unjust to determine just
 compensation based on the guidelines provided by PD No.
27 and EO No. 228. Accordingly, just compensation should be
computed in accordance with RA No. 6657 in order to give full
effect to the principle that the recompense due to the landowner
should be the full and fair equivalent of the property taken from
the owner by the expropriator. The word "just" is used to intensify
the meaning of the word "compensation" to convey the idea that
the equivalent to be rendered for the property to be taken shall
be real, substantial, full, and ample.
Landbank vs Soriano
Domingo and Mamerto Soriano (respondents) are the registered
owners of rice land situated in Oas, Albay. 18.2820 hectares
were placed under the Operations Land Transfer and
the CARP pursuant to Presidential Decree No. 27 and Republic
Act No. 6657, otherwise known as the Comprehensive Agrarian
Reform Law.
Not satisfied with the LBPs valuation, respondents, instituted a
Complaint for judicial determination of just compensation with the
Regional Trial Court of Legazpi City, sitting as a Special Agrarian
Court (SAC). They alleged that they are entitled to an amount of
not less than P4,500,000 as just compensation.
SAC rendered a judgment, ordering LBP to pay the respondents
P894,584.94 applying the formula prescribed under Executive
Order No. 228 in determining the valuation of the property. It
likewise granted compounded interest pursuant to DAR Admin
Order. The appellate court, affirmed the judgment of the trial
court.
With the passage of Republic Act (R.A.) No. 6657 or the CARL in
1988, new guidelines were set for the determination of just
compensation.
Consequently, two divergent formulae arose which prompted the
Court to come up with a categorical pronouncement that, if just
compensation is not settled prior to the passage of Republic Act
No. 6657, it should be computed in accordance with the said law,
although the property was acquired under Presidential Decree
No. 27. The fixing of just compensation should therefore be
based on the parameters set out in Republic Act No. 6657,
with Presidential Decree No. 27 and Executive Order No.
228 having only suppletory effect.
In the instant case, while the subject lands were acquired
under Presidential Decree No. 27, the complaint for just
compensation was only lodged long after the passage
of Republic Act No. 6657. Therefore, Section 17 of Republic Act
No. 6657 should be the principal basis of the computation for just
compensation. As a matter of fact, the factors enumerated
therein had already been translated into a basic formula by the
DAR pursuant to its rule-making power. The formula outlined in
DAR Administrative Order No. 5, series of 1998 should be
applied in computing just compensation, thus: aDHScI
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
As much as this Court would like to determine the proper
valuation based on the formula cited above, the records of this
case are bereft of adequate data. To write finis to this case, we
uphold the amount derived from the old formula. However, since
the application of the new formula is a matter of law and thus,
should be made applicable, the parties are not precluded from
asking for any additional amount as may be warranted by the
new formula.
On to the more pertinent issue, LBP assails the imposition of 6%
interest rate. It avers that the incremental interest due to the
respondents should be computed from the date of taking on 21
October 1972, not up to full payment of just compensation but up
to the time LBP approved the payment of their just
compensation claim and a corresponding deposit of the
compensation proceeds was made by the bank.
Respondents counter that the award of interest until full payment
of just compensation was correctly adhered to ensure prompt
payment. Moreover, respondents claim that the date LBP
approves the payment of the land transfer claim and deposits the
proceeds in the name of the landowner is not tantamount to
actual payment because on said date, the release of the amount
is conditioned on certain requirements. 18
At any rate, we cannot subscribe to the arguments of LBP.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. 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.
Landbank vs Orillo
Spouses Placido and Clara Orilla (respondents) were the owners
of a land situated in Bohol. DAR-PARO of Bohol sent
respondents a Notice of Land Valuation and Acquisition informing
them of the compulsory acquisition of their landholdings pursuant
to the Comprehensive Agrarian Reform Law for P371,154.99 as
compensation based on the valuation made by the Land Bank of
the Philippines (petitioner).
Respondents rejected the said valuation. Consequently, the
Provincial Department of Agrarian Reform Adjudication Board
(Provincial DARAB) conducted a summary hearing on the
amount of just compensation. Thereafter, the Provincial DARAB
affirmed the valuation made by the petitioner.
Unsatisfied, respondents filed an action for the determination of
just compensation before the Regional Trial Court (as a Special
Agrarian Court [SAC]) of Tagbilaran City. SAC rendered a
decision modifying the amount. Petitioner filed a Notice of
Appeal. Subsequently, respondents filed a Motion for Execution
Pending Appeal. Respondents claimed that the total amount of
P1,479,023.00 (equivalent to P7.00 per square meter for 21.1289
hectares), adjudged by the SAC as just compensation, could then
be withdrawn. SAC issued an Order granting the Motion for
Execution Pending Appeal, the decretal portion of which reads
Petitioner filed with the Court of Appeals a special civil
action for certiorari and prohibition. It questioned the propriety of
the SAC Order granting the execution pending appeal. The Court
of Appeals dismissed the petition on the ground that respondents
had been deprived of the use and possession of their property
pursuant to R.A. 6657 and are entitled to be immediately
compensated with the amount as determined by the SAC under
the principle of "prompt payment" of just compensation.
Petitioner asserts that, the principle of "prompt payment" of just
compensation is already satisfied by the concurrence of two (2)
conditions: (a) the deposits made by petitioner in any accessible
bank, equivalent to the DAR/LBP valuation of the expropriated
property as provisional compensation, must be in cash and
bonds as expressly provided for by Section 16 (e) of R.A. 6657,
not merely earmarked or reserved in trust; and (b) the deposits
must be immediately released to the landowner upon compliance
with the legal requirements under Section 16 of R.A. 6657, even
pending the final judicial determination of just compensation.
This appeal should be denied.
Do good reasons exist to justify the grant by the SAC of the
motion for execution pending appeal? The answer is a
resounding YES.
The expropriation of private property under R.A.
6657 is a revolutionary kind of expropriation, being a means to
obtain social justice by distributing land to the farmers,
envisioning freedom from the bondage to the land they actually
till. As an exercise of police power, it puts the landowner, not
the government, in a situation where the odds are practically
 against him. He cannot resist it. His only consolation is that he
can negotiate for the amount of compensation to be paid for
the property taken by the government. As expected, the
landowner will exercise this right to the hilt, subject to the
limitation that he can only be entitled to "just compensation".
Clearly therefore, by rejecting and disputing the valuation of
the DAR, the landowner is merely exercising his right to seek
just compensation.
Contrary to the view of petitioner, "prompt payment" of just
compensation is not satisfied by the mere deposit with any
accessible bank of the provisional compensation determined
by it or by the DAR, and its subsequent release to the
landowner after compliance with the legal requirements set
by R.A. 6657.
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.
Put differently, while prompt payment of just compensation
requires the immediate deposit and release to the landowner
of the provisional compensation as determined by the DAR, it
does not end there. Verily, it also encompasses the payment in
full of the just compensation to the landholders as finally
determined by the courts. Thus, it cannot be said that there is
already prompt payment of just compensation when there is
only a partial payment thereof, as in this case.
We find no grave abuse of discretion on the part of the SAC
judge in allowing execution pending appeal. The good reasons
cited by the SAC that it would be in consonance with
justice, fairness, and equity, and that suspending payment will
prolong the agony of respondents suffered due to the
deprivation of their land proper
The injury that may be suffered by respondents if execution
pending appeal is denied indeed outweighs the damage that
may be suffered by petitioner in the grant thereof.
Landbank vs Court of Appeals
Petitioners DAR and LBP, filed their respective motions for
reconsideration contending mainly that, contrary to the Court's
conclusion, the opening of trust accounts in favor of the rejecting
landowners is sufficient compliance with the mandate of Republic
Act 6657. Moreover, it is argued that there is no legal basis for
allowing the withdrawal of the money deposited in trust for the
rejecting landowners pending the determination of the final
valuation of their properties.
Petitioner DAR, maintains that "the deposit contemplated by Section
16(e) of Republic Act 6657, absent any specific indication, may
either be general or special, regular or irregular, voluntary or
involuntary (necessary) or other forms known in law, and any
thereof should be, as it is the general rule, deemed complying."
We reject this contention. Section 16(e) of Republic Act 6657 was
very specific in limiting the type of deposit to be made as
compensation for the rejecting landowners, that is in "cash" or in
"LBP bonds
The provision is very clear and unambiguous, foreclosing any doubt
as to allow an expanded construction that would include the
opening of "trust accounts" within the coverage of term "deposit".
The validity of constituting trust accounts for the benefit of the
rejecting landowners and withholding immediate payment to them is
further premised on the latter's refusal to accept the offered
compensation thereby making it necessary that the amount remains
in the custody of the LBP for safekeeping and in trust for eventual
payment to the landowners. Additionally, it is argued that the
release of the amount deposited in trust prior to the final
determination of the just compensation would be premature and
expose the government to unnecessary risks and disadvantages,
citing the possibility that the government may subsequently decide
to abandon or withdraw from the coverage of the CARP certain
portions of the properties that it has already acquired. Petitioner
DAR maintains that under these conditions, the government will be
forced to institute numerous actions for the recovery of the amounts
that it has already paid in advance to the rejecting landowners. 7
We are not persuaded. As an exercise of police power, the
expropriation of private property under the CARP puts the
landowner, and not the government, in a situation where the odds
are already stacked against his favor. He has no recourse but to
allow it. His only consolation is that he can negotiate for the amount
of compensation to be paid for the expropriated property. Clearly
therefore, by rejecting and disputing the valuation of the DAR, the
landowner is merely exercising his right to seek just compensation.
If we are to affirm the withholding of the release of the offered
compensation despite depriving the landowner of the possession
and use of his property, we are in effect penalizing the latter for
simply exercising a right afforded to him by law.
Obviously, this would render the right to seek a fair and just
compensation illusory as it would discourage owners of private
lands from contesting the offered valuation of the DAR even if they
find it unacceptable, for fear of the hardships that could result from
long delays in the resolution of their cases. Without prompt
payment, compensation cannot be considered "just" for the property
owner is made to suffer the consequence 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.
It is significant to note that despite petitioner's objections to the
immediate release of the rejected compensation, petitioner LBP,
taking into account the plight of the rejecting landowners, has
nevertheless allowed partial withdrawal through LBP Executive
Order No. 003, limited to fifty (50) per cent of the net cash
proceeds. This is a clear confirmation that petitioners themselves
realize the overriding need of the landowners' immediate access to
the offered compensation despite rejecting its valuation
Anent the aforecited risks and disadvantages to which the
government allegedly will be unnecessarily exposed if immediate
withdrawal of the rejected compensation is allowed, suffice it to say
that in the absence of any substantial evidence to support the
same, the contemplated scenarios are at the moment nothing but
speculations. Withholding of the payment then is undoubtedly an
oppressive exercise of eminent domain that must never be
sanctioned. Unduly burdening the property owners from the
resulting flaws in the implementation of the CARP which was
supposed to have been a carefully crafted legislation is plainly
unfair and unacceptable.