G.R. No. 21390 - People vs. Francisco

The case involves a petition for review on certiorari by the Land Bank of the Philippines (LBP) challenging the decision and resolution of the Court of Appeals (CA) in a case stemming from the Special Agrarian Court (SAC) proceedings.
The subject matter centers on the determination of just compensation under the Comprehensive Agrarian Reform Law (CARL) for agricultural lands voluntarily offered for sale by Metraco Tele-Hygienic Services Corporation (METRACO).

Private respondent METRACO is the registered owner of three parcels of agricultural land with a combined area of 33.5917 hectares, located in San Antonio, Ramon, Isabela.
The properties are fully irrigated by the National Irrigation Administration (NIA) and are planted with rice, bearing Transfer Certificate of Title (TCT) Nos. T-291208, T-291209, and T-291210.

In July and December 2000, METRACO voluntarily offered to sell its lands under Republic Act No. 6657 (CARL). The initial bid from the landowner was P300,000.00 per hectare.
On February 8, 2001, the offer was referred to LBP for valuation. On June 6, 2001, LBP fixed the value based on its appraisal employing guidelines under DAR Administrative Order (AO) No. 5, series of 1998.
The computed valuation by LBP was detailed per TCT, amounting to a total of P4,669,259.92 for the three parcels.
METRACO rejected LBP’s valuation, after which LBP deposited an amount that was accepted by METRACO without prejudice to further revaluation.

METRACO proceeded with its claim for just compensation before the Department of Agrarian Reform Adjudication Board (DARAB) and secured its own valuation through summary proceedings.
On December 3, 2001, DARAB set aside LBP’s valuation and fixed compensation at P180,000.00 per hectare for the lands, deducting payments already made.
The Special Agrarian Court (SAC) took cognizance of the dispute following DARAB’s denial of petitioner's motion for reconsideration and recalculated the just compensation using additional evidence, including:

Testimonies on the field investigation and ocular inspection conducted by LBP appraisers and representatives.
Discrepant data regarding the selling price (SP) of palay provided by the Municipal Agrarian Reform Office (MARO) versus that provided by government certification (NFA) and receipts from private entities.

The SAC also addressed the inclusion of 1.1173 hectares (comprising a drainage canal and road), deeming these parts indispensable to the whole landholding.

LBP’s appraisal was based on a formula that involved determining the Capitalized Net Income (CNI) by multiplying the Annual Gross Production (AGP) with an average selling price of palay.
Discrepancies arose when petitioner relied on MARO data (suggesting a lower selling price of P6.75 per kilogram) while respondent and the SAC favored data from the National Food Authority (NFA) and private receipts indicating P9.00 per kilogram.
The SAC and later the CA adopted the latter, aided by the provision in DAR AO No. 5 that allowed for data from other government and private entities where local data were inconsistent or affected by temporary conditions (e.g., typhoons).

Whether the SAC and CA erred in adopting a selling price of palay of P9.00 per kilogram rather than petitioner’s lower figure derived from MARO data.
Whether the use of industry data from the National Food Authority (NFA) and private receipts, instead of the MARO’s average selling price, is compliant with the guidelines of DAR AO No. 5.
Whether the exclusion or inclusion of the 1.1173 hectares occupied by an irrigation canal and road from the compensable land area is proper under the applicable rules.
Whether the entire process of revaluation, including the formulas and adjustments under DAR AO No. 5, has been correctly applied in determining just compensation in accordance with Section 17 of RA No. 6657.