G.R. No. 172230 - Land Bank of the Philippines vs. Ferrer

On October 11, 2000, Magin V. Ferrer, Antonio V. Ferrer, and Ramon V. Ferrer (the Ferrers), through their attorney-in-fact Rafael Villarosa, filed a Petition for Determination and Payment of Just Compensation against the Land Bank of the Philippines (LBP) before the Regional Trial Court (RTC) in Guimba, Nueva Ecija, docketed as Agrarian Case No. 1142-G.
The Ferrers later amended their petition to implead the Department of Agrarian Reform (DAR) and alleged that they were the absolute owners pro-indiviso of an 11.7297-hectare parcel of agricultural land inherited from their deceased mother.

The property in question was part of a family inheritance that also included properties partitioned extra-judicially among the Ferrers and other relatives, notably involving their deceased grandfather Gonzalo F. Villarosa and deceased aunt Matilde Villarosa.
An Emancipation Patent covering 3.5773 hectares of this agricultural land was allegedly issued in the name of Alfredo Carbonel without payment of just compensation.

The Ferrers contended that the LBP’s appraisal of the land at approximately P12,050.00 per hectare, amounting to a total of P132,685.67 for part of the property, was significantly undervalued.
They argued that, due to the land being irrigated and strategically located, the just compensation should be computed at a rate of at least P250,000.00 per hectare, or a total of approximately P2,930,000.00 for the entire parcel.
The LBP, in contrast, fixed the just compensation on a lower valuation in line with guidelines they claimed were provided under Presidential Decree (P.D.) No. 27 and Executive Order (E.O.) No. 228.

The RTC appointed three commissioners to determine the appropriate just compensation.
On September 27, 2004, the RTC rendered its decision, whereby the just compensation for 4.6203 hectares was fixed at P208,000.00 per hectare, totaling P961,022.50.
Motions for reconsideration filed by the LBP and the DAR were subsequently denied by the RTC.

The LBP and the DAR filed separate petitions for review before the Court of Appeals (CA), which were docketed as CA-G.R. SP No. 88012 and CA-G.R. SP No. 88008, respectively.
The CA decisions, rendered on August 30, 2005, and January 24, 2007, affirmed the RTC’s ruling, holding that Republic Act (R.A.) No. 6657, not P.D. No. 27/E.O. No. 228, should govern the determination of just compensation.
The LBP and the DAR subsequently filed motions for reconsideration with the CA, which were denied.
Finally, the LBP (G.R. No. 172230) and the DAR (G.R. No. 179421) filed their respective petitions before the Supreme Court; these were eventually consolidated into a single case due to the identical subject matter and legal issues.

The LBP and the DAR maintained that the subject agricultural property, being tenanted and devoted to rice production in 1972, should have its just compensation determined under the framework of P.D. No. 27 and E.O. No. 228, which fix the values based on conditions prevailing at that time.
They contended that R.A. No. 6657 applies exclusively to ricelands and cornlands not tenanted as of October 21, 1972 and that lands under the Operation Land Transfer (OLT) program governed by P.D. No. 27 should be treated separately.
Conversely, the Ferrers supported the CA ruling, arguing that since the agrarian reform process was incomplete due to non-payment of just compensation, the provisions of R.A. No. 6657 should govern the determination.

Whether the just compensation for the subject agricultural land should be computed pursuant to the provisions of R.A. No. 6657 (the Comprehensive Agrarian Reform Law) or under the framework of P.D. No. 27 and E.O. No. 228.
Whether the valuation of the property should reflect current conditions at the time of payment rather than the historical values of 1972.

Whether the RTC’s appointment of commissioners to determine just compensation was appropriate, given that the law provided a formula under P.D. No. 27/E.O. No. 228.
Whether there were sufficient grounds or “difficult questions of fact” justifying the expertise of the appointed commissioners.

Whether the agrarian reform process was complete or still pending due to the outstanding payment of just compensation.
The necessity to conclude the process by determining and paying the full, fair, and ample just compensation as mandated by law.