Title
Land Bank of the Philippines vs. Santos
Case
G.R. No. 213863
Decision Date
Jan 27, 2016
Edgardo Santos contested DAR's land valuation under CARP; SC ruled LBP must release initial payment, allowed RTC to determine just compensation, and imposed 12% interest on unpaid amounts.

Case Digest (G.R. No. 213863)
Expanded Legal Reasoning Model

Facts:

  • Ownership and Agrarian Reform Background
    • Santos was the owner of three agricultural lands (Lands 1, 2, and 3) used for corn production in Sagnay, Camarines Sur.
      • Lands 1 and 2 were covered by Tax Declarations, while Land 3 was evidenced by a Transfer Certificate of Title (TCT No. 5717).
    • In 1984, these lands were included in the government’s Operation Land Transfer Program under Presidential Decree (PD) No. 27 and distributed to farmer-beneficiaries through issuance of Emancipation Patents.
    • The Department of Agrarian Reform (DAR) determined the just compensation for the lands using the formula provided under Executive Order (EO) No. 228, Series of 1987, fixing:
      • Land 1 at ₱164,532.50
      • Land 2 at ₱39,841.93
      • Land 3 at ₱66,214.03
  • Valuation Process and Initial Compensation
    • On May 25, 2000, the Land Bank of the Philippines (LBP) received Santos’ claim folder covering the subject lands and allowed him to collect the initial valuation for Land 3.
    • The release of the initial valuations for Lands 1 and 2 was withheld pending submission of the certificates of title because these lands were found to be covered by specific Decrees.
    • Subsequent to documentary issues, on August 30, 2000 and December 17, 2003, Santos was issued Agrarian Reform Bonds representing:
      • The initial valuation amount for Land 3 (₱11,674.59)
      • A six percent (6%) increment pursuant to PD 27 and EO 228 (₱30,428.83)
    • Despite payment of a partial cash amount (₱4,678.16) by Santos, he contested the valuations as being unreasonable.
  • Administrative and Judicial Proceedings on Just Compensation
    • Santos initiated administrative petitions for summary proceedings before the Provincial Adjudicator (PARAD) in multiple DARAB cases, resulting in distinct valuations:
      • Land 1: ₱510,034.29
      • Land 2: ₱2,532,060.31
      • Land 3: ₱1,147,466.73
    • The DAR’s computation was based on a formula utilizing the average gross production (AGP), a multiplication factor of 2.5, and the Government Support Price (GSP) for corn, but used a GSP (P300.00/cavan) different from that prescribed under EO 228 (P31.00/cavan).
    • Santos unconditionally accepted the valuations for Lands 2 and 3 in a letter dated September 5, 2001.
    • The LBP, disputing the PARAD’s computation, filed separate complaints before the Regional Trial Court (RTC) for determination of just compensation for Land 1 (Civil Case No. 2001-0299) and for Lands 2 and 3 (Civil Case No. 2001-0315).
    • Santos moved to dismiss these cases on grounds including:
      • Lack of legal personality of the LBP to institute such action
      • Finality of the PARAD’s decision being an obstacle
    • Initially, the RTC dismissed the complaints; however, after recalibration of jurisdiction, the RTC (acting as a Special Agrarian Court) later allowed and ordered:
      • The conditional release of the initial valuation for Lands 1 and 2 (Order dated July 9, 2009) upon compliance with documentary requirements (submission of valid IDs, current community tax certificate, execution of a Deed of Assignment, Warranties and Undertaking)
      • A revaluation of the subject lands pursuant to Republic Act (RA) No. 6657, as directed in the RTC Order dated March 17, 2010
    • For Land 3, the RTC’s judgment (June 22, 2011) adopted the LBP’s uncontested revaluation amount (₱1,155,223.41) and ordered its payment, subject to deductions of previously paid initial valuation.
    • Santos contested that the RTC should have ordered the payment of twelve percent (12%) interest from the date of taking until full payment, leading to modified orders (August 31, 2011 and later October 10, 2011) awarding such interest from January 1, 2010 until full payment.
    • The LBP sought review and elevation of the matter to the Court of Appeals (CA) through consolidated petitions (CA-G.R. SP Nos. 110779 and 121813).
  • The Court of Appeals and Issues on Interest Computation
    • In its December 4, 2013 decision, the CA:
      • Dismissed the petitions on points including the alleged abuse of discretion by the RTC in the release conditions of the initial valuation for Lands 1 and 2, and the issue of res judicata barring the RTC from determining further just compensation.
      • Upheld the conditional release of the initial valuation for Lands 1 and 2.
    • In the matter of Santos’ entitlement to twelve percent (12%) interest for Land 3:
      • The CA affirmed the RTC’s ruling awarding said interest from January 1, 2010 until full payment, although this computation was later modified.
    • The CA ordered that the final computation of the twelve percent interest be subject to evidence regarding the issuance date of emancipation patents, which was essential to determine the proper reckoning point for the interest from the time of taking until payment.
  • Remand and Final Disposition
    • The Supreme Court ultimately denied the petitions, affirming the CA’s decisions with the modification that:
      • The twelve percent (12%) annual interest shall be computed from the date of taking until full payment of just compensation for Land 3.
    • The records were remanded to the RTC for receipt of evidence regarding the emancipation patent dates to establish the correct start date for the interest computation.

Issues:

  • Questions Raised by the Land Bank of the Philippines (LBP)
    • Whether the RTC abused its discretion in releasing the initial valuation for Lands 1 and 2 without requiring the full set of documentary requirements dictated by DAR Administrative Order (AO) No. 2, Series of 2005.
    • Whether the final decision in CA-G.R. CV No. 75010 precluded (by res judicata) the RTC from further proceedings in determining the just compensation for Lands 2 and 3.
    • Whether the RTC and subsequently the CA erred in ordering the award of twelve percent (12%) interest on the unpaid just compensation for Land 3, particularly regarding its computation period.
  • Question Raised by Santos
    • Whether the CA erred in ruling that the award of twelve percent (12%) interest on the unpaid compensation for Land 3 should be calculated from January 1, 2010 until full payment, despite arguments that such delay stretched back to the date of taking.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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