G.R. No. 215290 - Heirs of Feliciano, Jr. vs. Land Bank of the Philippines

Composed of the heirs of Pablo Feliciano, Jr.—Lourdes Feliciano Tudla, Gloria Feliciano Caudal, Gabriela Feliciano Bautista, Angela Feliciano Lucas, Donna Celeste Feliciano-Gatmaitan, Cynthia Celeste Feliciano, and Hector Reuben Feliciano.
Represented by their assignee, Victoria Alda Reyes Espiritu.

The subject property is a 300-hectare agricultural land situated at F. Simeon, Ragay, Camarines Sur.
The property is covered by Transfer Certificate of Title (TCT) No. RT 3080 (4120).
In 1972, a portion amounting to 135.2583 hectares was classified as unirrigated riceland and placed under Presidential Decree (PD) No. 27.
The issuance of Certificates of Land Transfer to 84 tenant-beneficiaries, later confirmed through Emancipation Patents in 1989, further colored the factual matrix.

In 1997, the claim folder for the subject land was received by the LBP from the Department of Agrarian Reform (DAR).
DAR valued the subject land at P1,301,498.09, which the Feliciano heirs rejected.
Consequently, the LBP deposited and later released the amount in the heirs’ name (January 26, 1998, and March 24, 2000, respectively).

The Office of the Provincial Agrarian Reform Adjudicator of Camarines Sur rendered a Decision on September 28, 2001, fixing the value at P4,641,080.465 (averaging P34,302.375 per hectare).
On November 22, 2001, the LBP initiated proceedings before the Regional Trial Court (RTC) in Naga City, Branch 23, Civil Case No. 2001-0359, for the determination of just compensation; the case was briefly dismissed and then reinstated.
The Feliciano heirs, in the interim, assigned their acquired rights over the just compensation claims to Espiritu.

In an Order dated May 4, 2011, the RTC directed the LBP to revalue the subject land in accordance with DAR Administrative Order (AO) No. 1, Series of 2010.
The LBP complied by revaluing the land at P7,725,904.05.
Espiritu accepted the new valuation but insisted on a twelve percent (12%) annual interest on the revalued amount based on the alleged unreasonable delay in payment.

On September 19, 2011, the RTC set the just compensation at P7,725,904.05 and ordered that the LBP pay the amount less payments already made.
It also directed the payment of 12% interest per annum on the unpaid balance from January 1, 2010, until full payment.

On March 17, 2014, the CA affirmed the just compensation figure and legal interest at 12% per annum, computed from July 1, 2009, until the decision’s finality, resulting in a total interest of P1,892,471.01.
The CA further observed that the revaluation was based on DAR AO 1, Series of 2010, thereby excluding the application of previous DAR AOs prescribing 6% interest.
In an Amended Decision dated October 24, 2014, the CA clarified that the LBP had already paid P7,725,904.05 on December 13, 2011, making it liable only for the computed interest, with additional interest at 6% per annum from the finality of that decision until full payment.

Key events span from the classification of land in 1972, issuance of Emancipation Patents in 1989, claim folder receipt in 1997, and various stages of judicial revaluation (2000, 2001, 2011).
The dispute eventually reached the CA, and subsequently, the Supreme Court entertained the petition for review on certiorari.

Whether the application of DAR AO 1, Series of 2010 was proper given that the claim folder was received by the LBP on December 2, 1997—well before the cut-off date of July 1, 2009.
Whether the RTC and CA properly adhered to Section 17 of RA 6657, as originally prescribed before its subsequent amendment by RA 9700.

Whether the imposition of 12% per annum interest from July 1, 2009, is legally justified given the circumstances of delayed payment.
Whether the subsequent modification to a 6% interest rate from the decision’s finality until full payment aligns with existing jurisprudence and applicable law.

The extent to which judicial discretion allows deviation from the DAR-prescribed formulas in determining just compensation.
The requirement for courts to clearly explain any departure from the administrative guidelines set forth under Section 17 of RA 6657 prior to RA 9700.