Title
Land Bank of the Philippines vs. Ferrer
Case
G.R. No. 172230
Decision Date
Feb 2, 2011
Landowners contested low compensation for land under agrarian reform; SC ruled R.A. No. 6657 governs just compensation, affirming equitable valuation over outdated 1972 rates.
A

Case Summary (G.R. No. 172230)

Applicable Law

The primary legal provision in question is Republic Act No. 6657, known as "The Comprehensive Agrarian Reform Law," which governs the determination of just compensation for properties affected by agrarian reform in the Philippines. The contention is whether this law applies, rather than Presidential Decree No. 27 (P.D. No. 27), which established the initial agrarian reform program applicable to certain tenanted lands.

The Facts of the Case

On October 11, 2000, the Ferrers filed a petition for the determination and payment of just compensation for an 11.7297-hectare agricultural land located in San Jose, Nueva Ecija, which they inherited. They asserted that an Emancipation Patent was issued without just compensation to a third party and contested the low valuation of the land by the LBP. The Ferrers maintained that the land should be valued significantly higher based on its condition and location. Conversely, the LBP and DAR argued that P.D. No. 27 should apply as the land was part of the Operation Land Transfer (OLT) program.

Ruling from the Regional Trial Court

The Regional Trial Court (RTC) appointed three commissioners to determine just compensation, which resulted in a valuation of P208,000.00 per hectare. The LBP and DAR's motions for reconsideration were denied, prompting them to appeal to the Court of Appeals (CA), which affirmed the RTC's decision, asserting that R.A. No. 6657 was applicable.

Decisions of the Court of Appeals

The CA, in decisions dated August 30, 2005, and January 24, 2007, respectively, reiterated that R.A. No. 6657 governed the evaluation of just compensation, emphasizing that just compensation should be determined at the time of payment, not based on historical costs or valuations under earlier laws.

Positions of the Parties

The LBP and DAR insisted on the applicability of P.D. No. 27, arguing that it regulated just compensation for lands tenanted before October 21, 1972, while the Ferrers maintained that R.A. No. 6657 superseded P.D. No. 27 in determining just compensation for properties that had not yet been compensated.

The Supreme Court's Ruling

The Supreme Court affirmed that the agrarian reform process regarding the subject land was incomplete because the just compensation had not been paid. The Court held that since R.A. No. 6657 was enacted after the initiation of the agrarian reform

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