G.R. No. 217985-86 - Apo Fruits Corp. vs. Land Bank of the Philippines

Title: Apo Fruits Corp. vs. Land Bank of the Philippines

Case: G.R. No. 217985-86

Decision Date: Mar 21, 2018

Apo Fruits contested DAR's low valuation of its land under CARP. Courts ruled just compensation at Php 130/sq.m., with 12% interest from 1996-2013, then 6%, plus attorney's fees.

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Case Digest (G.R. No. 217985-86)
Legal Reasoning Model

Facts:

Property and Voluntary Offer of Sale

Apo Fruits Corporation was the registered owner of a 115.2179-hectare land in San Isidro, Tagum City, Davao del Norte, covered by TCT No. T-113359.

On October 12, 1995, Apo voluntarily offered to sell the subject property to the government for the Comprehensive Agrarian Reform Program (CARP).

Initial Valuation and Government Actions

In processing the voluntary offer of sale, the case was referred to the Land Bank of the Philippines (LBP) for initial valuation.

On October 16, 1996, the Department of Agrarian Reform (DAR) Provincial Agrarian Reform Office valued the land at Php 16.5484 per square meter, or an aggregate of Php 165,484.47 per hectare.

Dissatisfied with the low valuation, Apo rejected the offer, while simultaneously DAR directed LBP to deposit an amount of Php 3,814,053.53 as an initial payment.

Following the directives from the DAR, the Register of Deeds of Tagum City cancelled TCT No. 113359 on December 9, 1996, and the title was transferred to the Republic of the Philippines with several Certificates of Land Ownership (CLOAs) issued in favor of farmer-beneficiaries.

Legal Proceedings for Just Compensation

Due to dissatisfaction with the initial valuation setup and subsequent actions by the government, Apo filed a complaint for the determination of just compensation with the DAR Adjudication Board, which remained pending for nearly six years.

Subsequently, on June 20, 2002, Apo filed a formal complaint before the Regional Trial Court (RTC) of Tagum City, Branch 2, docketed as Agrarian Case No. 77-2002, to ascertain the correct just compensation.

The RTC appointed a panel of commissioners—Atty. Susan L. Rivero, Mrs. Lydia Gonzales, and Mr. Alfredo Silawan—to evaluate the property. These commissioners conducted research, gathered primary data from concerned agencies, considered the Tax Declaration, nearby deeds of sale, and conducted an ocular inspection noting the commercial bamboo planting on the property.

Their report, submitted on April 24, 2004, concluded a valuation of Php 134.42 per square meter but recommended adopting a more conservative figure of Php 130.00 per square meter, resulting in a total just compensation of approximately Php 149,783,000.

RTC and Court of Appeals Decisions

On February 25, 2005, the RTC rendered a decision adopting the commissioners’ findings, ordering LBP and DAR to pay the just compensation of Php 149,783,000.27, along with legal interest computed from December 9, 1996, payment of commissioners’ fees, attorney’s fees of 10%, and the costs of the suit.

The RTC’s separate motions for reconsideration filed by LBP and DAR were later denied on September 7, 2005.

On September 25, 2012, the Court of Appeals (CA) rendered a decision which modified the RTC’s ruling by setting the just compensation at Php 103.33 per square meter, determining the interest period from December 9, 1996 to May 9, 2008, remanding issues on commissioners’ fees, and affirming LBP and DAR’s liability for attorney’s fees and costs.

The CA’s subsequent Resolution (April 21, 2015) denied motions for reconsideration by both parties and sustained these modifications, prompting the filing of the petitions for review in the Supreme Court by both Apo and LBP.

Petitions for Review and Consolidated Issues

Apo Fruits Corporation and LBP each filed separate petitions for review on certiorari before the Supreme Court challenging the CA’s modifications.

The issues raised pertained to the valuation of the property, the computation of legal interest, and procedural aspects regarding the delay and application of administrative formulas under the CARP.

Issue:

Issues Raised by Apo Fruits Corporation

Whether the Court of Appeals erred in disregarding the panel of commissioners’ valuation of Php 130.00 per square meter and instead adopting a valuation of Php 103.33 per square meter based on a previous jurisprudence in G.R. No. 164195.

Whether the CA correctly limited the computation of legal interest to the period between December 9, 1996 (when the property was taken) and May 9, 2008, instead of extending such interest until full payment of the just compensation.

Issues Raised by the Land Bank of the Philippines

Whether the CA abused its discretion in making an independent determination of just compensation contrary to the administrative formula mandated by law and consistent with the factual matrix of the case.

Whether the delay in resolving the parties’ motions for reconsideration was properly regulated and justified.

Whether the determination of just compensation should primarily reflect the agricultural nature of the land or its potential for residential or industrial conversion, given its location.

Whether LBP is liable to pay legal interest despite its initial deposit and is obligated to immediately release the valuation pending a final determination, as well as its liability for attorney’s fees, costs, and commissioners’ fees.

Ultimate Issues to Be Resolved by the Court

Whether the CA’s valuation of the property at Php 103.33 per square meter is sustainable in light of the evidence and the commissioners’ report recommending Php 130.00 per square meter.

Whether the accrual of legal interest should extend from the date of taking (December 9, 1996) until full payment is effected, or if it should cease on May 9, 2008 as determined by the CA.

Ruling:

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Ratio:

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Doctrine:

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