G.R. No. 196264 - Land Bank of the Philippines vs. Navarro

Case Summary (G.R. No. 196264)

Background and Initial Proceedings

Lina B. Navarro, daughter of Antonio Buenaventura and stepdaughter of Jovita Buenaventura (75% co-owner), owned a 25% pro-indiviso share of agricultural land under the estate of Antonio. The government expropriated 21.890 hectares of the property pursuant to PD 27 under the agrarian reform program. The Department of Agrarian Reform (DAR) valued the expropriated land at P49,025.15, based on the Landowner-Tenant Production Agreement and Farmer’s Undertaking (LTPA-FU). Jovita received payment for 75% share, but Lina rejected the tender for her 25% pro-indiviso share of P12,256.29, alleging it was confiscatory and violative of her rights to just compensation and due process.

Lina filed a petition with the Special Agrarian Court (SAC) seeking the fixing of just compensation. She challenged the valuation, asserting it was below market value and urged the court to consider comparable sales nearby.

Issues Raised by Parties

Lina argued the valuation of P0.17 per square meter was unreasonably low and did not reflect fair market value.
LBP and DAR contended the valuation followed PD 27 and Executive Order No. 228, and that the property was not physically subdivided to identify Lina's portion.
DAR also raised the failure to exhaust administrative remedies, which Lina disputed.

Stipulation of Facts and Findings of SAC

The parties stipulated that the total agrarian reform coverage was 21.890 hectares. Jovita received 75%, Lina 25%, equating Lina’s share to 5.4725 hectares. The SAC found the actual land taken was 21.8005 hectares, confirmed through Emancipation Patents (EPs), thus adjusting Lina’s share to 5.4501 hectares.

The SAC determined the date of taking as June 13, 1988 (issuance of EPs). It rejected the valuation formula under PD 27 and fixed just compensation at P10.00 per square meter based on a market value approach, supported by local real estate conditions. The SAC also imposed 12% per annum interest on the compensation from date of taking until full payment.

Appeals and Court of Appeals (CA) Ruling

The LBP appealed the SAC’s ruling on the date of taking, the valuation method, and the imposition of interest. Lina also appealed, claiming the valuation was still low.

The CA denied the appeal with modification. It confirmed Lina’s compensable area is 5.4501 hectares, based on the total land covered by agrarian reform and the stipulated 25% share, rejecting LBP’s claim that Lina only had compensable rights over 3.8249 hectares.

The CA ruled that just compensation should be determined under Section 17 of RA 6657, not under PD 27, given that RA 6657 became applicable before payment was made. The issuance of Emancipation Patents marked the date of taking.

The CA maintained the SAC's valuation of P10.00 per square meter, despite it being half the amount recommended by commissioners, reasoning that commissioners’ reports are advisory and not binding. The CA also upheld the interest imposition.

Contested Issues on Hectarage and Valuation

LBP contested the compensable hectarage, invoking Article 493 of the Civil Code on pro-indiviso shares, arguing that since partition had not been made, the exact portions were undefined and the 6.5006 hectares paid directly to Jovita could not be excluded from Lina’s share. LBP also argued it could not be bound by the stipulation if it contradicts law, alleging inadmissibility of judicial admissions made in violation.

The Court disagreed, noting that judicial admissions during pre-trial are binding unless shown to have been made through palpable mistake or not made at all. Reviewing the Emancipation Patents and relevant documents, the Court found a clerical or typographical error in the stipulated area, and accepted Lina’s correction to 21.8005 hectares total, validating that Lina’s 25% share corresponds to 5.4501 hectares. It explained that the stipulation referred to Lina's undivided interest (proportionate share), not a specific physical portion.

Regarding LBP’s claim that Jovita could not transfer 6.5006 hectares directly to tenants without including Lina's share, the Court found that a co-owner can alienate their undivided share without consent from co-owners, per Article 493 of the Civil Code. Thus, Jovita’s transfer of her 75% undivided interest to tenants was valid and Lina’s 25% share is unaffected.

Valuation Standards and Remand

LBP abandoned its PD 27 valuation argument after RA 9700 became effective but argued that the SAC did not properly apply Section 17 of RA 6657 and DAR AO No. 5 valuation guidelines, relying instead on market value.

The Court noted that applying the valuation formula under Section 17 as translated into DAR administrative orders is mandatory, especially following the ruling in Alfonso v. Land Bank of the Philippines. The SAC's use of the market value approach without applying the DAR formula was erroneous.

Since the SAC and CA did not apply or assess the required valuation factors and formulas as mandated, the Court rejected their valuation and remanded the case to allow the SAC to recompute just compensation in accordance with Section 17, RA 6657, and the applicable DAR AO rules. The Court emphasized that it could not act as fact-finder or accept new evidence.

Interest on Just Compensation

LBP contested the imposition of the 12% legal interest on grounds that

Case Syllabus (G.R. No. 196264)

Facts of the Case

The case arose from the expropriation of agricultural land covered by Lot No. 6561, Cad-174 of the Guianga Cadastre located in Catalunan Grande, Davao City, originally owned by Antonio Buenaventura and Jovita Buenaventura.
Upon Antonio's death, Jovita was appointed administratix of his estate. The property was partitioned: Jovita held a 75% pro-indiviso share and Lina, Antonio’s daughter and Jovita’s stepdaughter, held 25%.
In 1988, pursuant to PD 27, the government expropriated 21.890 hectares for agrarian reform. The Department of Agrarian Reform (DAR) valued the land at P49,025.15 based on the Landowner-Tenant Production Agreement and Farmer's Undertaking (LTPA-FU).
Jovita accepted payment amounting to P36,768.86, but Lina rejected the tender of P12,256.29 corresponding to her 25% share, contending it was confiscatory and violated her rights to just compensation.
Lina filed a petition before the Special Agrarian Court (SAC) to fix just compensation, arguing the DAR's valuation at P0.17 per sq. m. was unreasonably low.
The SAC ruled in favor of Lina, valuing the land at P10.00 per sq. m. and fixing her compensable area at 5.4725 hectares (later corrected to 5.4501 hectares).
The Land Bank of the Philippines (LBP) appealed, disputing the date of taking, valuation methodology, and the area to be compensated.
The Court of Appeals (CA) affirmed the SAC decision with modification, settling Lina’s share at 5.4501 hectares and ordering payment plus 12% interest.
The present petition challenges the CA’s rulings on compensable area, valuation, and interest.

Issues Presented

Whether Lina’s compensable share in the property is 5.4725 hectares or should be limited to 3.8249 hectares as contended by LBP.
Whether the just compensation fixed by the SAC at P10.00 per sq. m., affirmed by the CA, is correct.
Whether the CA erred in imposing 12% per annum interest on the awarded just compensation.

Judicial Admission and Hectarage Determination

The parties stipulated facts during pre-trial, including that 21.890 hectares was covered by DAR under PD 27 through Emancipation Patents (EPs) 221-234.
Lina later argued a typographical error: the actual area covered by the EPs is 21.8005 hectares as confirmed by summing the land areas in the EPs.
The CA agreed that Lina’s 25% share should be based on 21.8005 hectares, amounting to 5.4501 hectares.
The Court recognized that judicial admissions in stipulated facts are binding unless established as a palpable mistake or no such admission was made.
In this case, the mathematical error in recording area constituted a palpable mistake warranting correction.
The LBP did not contest the corrected hectarage, tacitly acknowledging Lina’s 25% share based on 21.8005 hectares.

Pro-Indiviso Ownership and Alienation Rights

LBP challenged the binding effect of the stipulation on Lina’s compensable share, invoking Article 493 of the Civil Code which provides that pro-indiviso shares are determined by partition, thus specific areas cannot be awarded before partition.
The Court clarified that the stipulated share represented the undivided interest or abstract quota Lina held, not a definite portion with metes and bounds.
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