Case Summary (G.R. No. 168453)
Applicable Law
The applicable law includes Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, which governs the determination of just compensation for agricultural lands expropriated for agrarian reform purposes.
Background and Proceedings
In an Amended Petition for Fixing Just Compensation, Hernando T. Chico claimed that his property was taken without proper notice or payment of just compensation under the agrarian reform program, specifically after the issuance of Emancipation Patents to farmer-beneficiaries in 1994. The Department of Agrarian Reform (DAR) contended that proper notification was given and a compensation rate of P10,000 per hectare was agreed under a Landowner-Tenant Production Agreement (LTPA) executed between Chico and the farmer-beneficiaries. LBP maintained it had no obligation to cover the compensation costs due to the absence of a valid land transfer claim endorsed by the DAR.
Ruling of the Special Agrarian Court
On May 17, 2004, the Special Agrarian Court (SAC) concluded that the agreement of P10,000 per hectare could not be supported without evidence of mutual consent and noted that such a valuation seemed insufficient considering the property was a prime agricultural lot. Consequently, the SAC ordered the DAR and LBP to pay Chico P1,860,540.00 as just compensation, including 12% legal interest annually.
Motion to Correct Clerical Errors
An ex-parte motion was subsequently filed by Chico, leading to the SAC correcting the compensation amount to P1,660,540.00 for 8.3027 hectares, while maintaining the same interest terms. LBP's motion for reconsideration was denied as the SAC found no merit in their arguments regarding the means of determining just compensation.
Court of Appeals Ruling
On March 17, 2005, the Court of Appeals (CA) upheld the SAC's ruling, ruling against the LTPA's probative value due to lack of evidence supporting its existence and considering the petition for fixing just compensation. The CA reasoned that R.A. No. 6657 should govern cases of just compensation instead of prior laws like Presidential Decrees Nos. 27 or 228, although it did subtract prior lease payments collected from the farmer-beneficiaries as advances against compensation owed. The CA revised the compensation value to P1,482,340.00 and maintained a legal interest rate of 6% annually from the date of taking until full payment.
Grounds for the Petition
LBP's petition to the Supreme Court raised multiple issues, including the lack of a land transfer claim necessary for processing compensation, the erroneous application of R.A. No. 6657 over prior laws, and the inappropriate interest rate assigned to the compensation award.
Supreme Court's Position
The Supreme Court, while acknowledging the absence of claim folders or acknowledgments from the DAR, decided t
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Procedural Background
- The case involves a Petition for Review on Certiorari filed under Rule 45 of the Rules of Civil Procedure by the Land Bank of the Philippines (LBP) against Hernando T. Chico and Lorna Chico.
- The petition seeks to reverse the Decision of the Court of Appeals (CA) dated March 17, 2005, which modified the Decision of the Regional Trial Court (RTC) of Cabanatuan City, sitting as a Special Agrarian Court (SAC), dated May 17, 2004.
Facts of the Case
- The subject property pertains to an 8.3027-hectare portion of three parcels of irrigated rice land located in Quezon, Nueva Ecija, covered by Transfer Certificate of Title (TCT) No. N-18893.
- Hernando T. Chico (respondent) claimed that the property was taken by the Department of Agrarian Reform (DAR) and transferred to farmer-beneficiaries (FBs) without prior notice and without just compensation.
- The DAR contended that Chico was duly notified and that compensation was agreed upon at P10,000.00 per hectare via a Landowner-Tenant Production Agreement (LTPA) with the FBs.
- The LBP claimed it had no obligation to finance the transfer since the claim was never endorsed by the DAR.
Rulings of the Special Agrarian Court (SAC)
- The SAC ruled that the compensation of P10,000.00 per hectare could not be sustained due to lack of evidence proving voluntary agreement between the parties.
- The SAC awarded Hernando T. Chico P1,860,540.00 as just compensation, with 12% annual legal interest from the date of acquisition.