Case Summary (G.R. No. 182209)
Legal Framework and Historical Background
LBP serves as the financial intermediary under Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988. The land was evaluated for compensation based on a formula established by both Presidential Decree No. 27 and Executive Order No. 228. These laws stipulate that land valuation shall be determined by considering the average harvest over preceding years, with compensation rates tied to government support prices set in 1972.
Initial Valuation and Payment to Heirs
The LBP and DAR determined the just compensation for the property using the mandated formula, concluding that the compensation should amount to One Hundred Thirty-Five Thousand Four Hundred Eighty-Two Pesos (₱135,482.12). This amount was reserved for the heirs and later released in 1998 following prior judicial decisions that validated LBP's compensation computations.
Petition for Appraisal of Just Compensation
Following this payment, Emiliano R. Santiago, Jr. filed a petition for the approval and appraisal of just compensation, asserting that the figure ascribed by LBP was inadequate. Santiago claimed the compensation method should utilize the 1998 prevailing government support price (GSP) per cavan of palay, which he argued should be calculated at ₱400.00, rather than the ₱35.00 utilized in earlier assessments.
Regional Trial Court Decisions
The Regional Trial Court’s Special Agrarian Court (SAC) initially sided with Santiago, mandating LBP to pay over a million pesos as just compensation, including legal and incremental interest. Subsequent motions from both parties spurred a reevaluation of the compensation rate and interest, reflecting ongoing disputes about appropriate compensation frameworks following the enactment of RA 6657.
Appeal and Court of Appeals Ruling
LBP sought to challenge the rulings of the SAC, contending that the court deviated from established formulae under Presidential Decree No. 27 and Executive Order No. 228 in its assessment of just compensation. On appeal, the Court of Appeals ruled against LBP, affirming that Santiago was entitled to just compensation based on the higher GSP while ruling out incremental interest due to the application of a higher base.
Supreme Court’s Decision on Just Compensation
The Supreme Court of the Philippines reviewed the decisions and sided with the application of Republic Act No. 6657 in determining just compensation, emphasizing that the law mandates a broader evaluation formula than earlier decrees. It determined that since compensation calculations were still pending after the requirement of RA 6657 was enacted, just compensation should be computed based on current market factors and economic conditions.
Legal Interest and Compounding Dispute
The Court addressed the ap
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Case Overview
- Petitioner: Land Bank of the Philippines (LBP), a government financial institution designated as the financial intermediary for the agrarian reform program.
- Respondent: Emiliano R. Santiago, Jr., heir of Emiliano F. Santiago, the registered owner of an 18.5615-hectare parcel of land in Laur, Nueva Ecija.
- Case Reference: G.R. No. 182209, decided on October 3, 2012.
- Legal Context: The case revolves around the computation of just compensation for land acquired under the agrarian reform program, specifically under Presidential Decree No. 27 and Executive Order No. 228.
Background Facts
- The subject property was partially acquired by the Department of Agrarian Reform (DAR) under the Operation Land Transfer Program.
- The DAR and LBP computed the just compensation based on the average harvest of the three normal crop years preceding the promulgation of Presidential Decree No. 27.
- The land value was initially pegged at a compensation of P135,482.12 based on the yield of 3,915 cavans of palay, with the government support price (GSP) set at P35.00 per cavan.
- The payment was released to the heirs on April 28, 1998, along with an additional sum representing incremental interest.
Procedural History
- On November 20, 1998, Santiago Jr. filed a petition for approval and appraisal of just compensation, agreeing to the land valuation but arguing for a revised GSP of P400