Hacienda Luisita Incorporated vs Presidential Agrarian Reform

Council, et al., Case Digest G.R. No. 171101 November 22, 2011
Hacienda Luisita Incorporated vs Presidential Agrarian Reform
Council, et al.,

Facts:

The SC en banc voted 11-0 dismissing the petition filed by HLI Affirm
with modifications the resolutions of the Presidential Agrarian
Reform Council (PARC for brevity) revoking Hacienda Luisita Inc. (HLI
for brevity) Stock Distribution Plan (SDP) and placing the subject land in HL under
compulsory coverage of the CARP of the government.

Thereafter, the SC voting 6-5 averred that there are operative facts
that occurred in the premises. The SC thereat declared that the revocation of
the SDP shall, by application of the operative fact principle, give the 5296
qualified Farmworkers Beneficiaries (FWBs for brevity) to choose whether they
want to remain as HLI stockholders or choose actual land distribution.
Considering the premises, DAR immediately scheduled a meeting regarding the
effects of their choice and therefrom proceeded to secret voting of their choice.

The parties, thereafter, filed their respective Motion for
Reconsideration regarding the SCs decision.

Issue:

1) Whether or not operative fact doctrine is applicable in the said
case.

2) Whether or not Sec. 31 of R.A. 6657 unconstitutional.

3) Whether or not the 10-year period prohibition on the transfer of
awarded lands under RA 6657 lapsed on May 10, 1999, since Hacienda Luisita
were placed under CARP coverage through the SDOA scheme on May 11, 1989,
and thus the qualified FWBs should now be allowed to sell their land interests in
Hacienda Luisita to third parties, whether they have fully paid for the lands or
not?

4) Whether or not qualified FWBs shall be entitled to the option of
remaining as stockholder be reconsidered.

Ruling:

1) Operative Fact Doctrine is applicable to the instant case. The court
ruled that the doctrine is not limited only to invalid or unconstitutional law but
also to decisions made by the president or the administrative agencies that have
the force and effect of laws, especially if the said decisions produced acts and
consequences that must be respected. That the implementation of PARC
resolution approving SDP of HLI manifested such right and benefits favorable to
the FWBs;

2) The SC said that the constitutionality of Sec. 31 of R.A. 6657 is not
the lis mota of the case and it was not raised at the earliest opportunity and did
not rule on the constitutionality of the law;

3) The SC ruled that it has not yet lapsed on May 10, 1999, and
qualified FWBs are not allowed to sell their land interest in HL to third parties;
That the start of the counting of the prohibitive period shall be ten years from
the issuance and registration of the Emancipation Patent (EP for brevity) or
Certificate of Land Ownership Award (CLOA for brevity), and considering that the
EPs and CLOAs have not yet been issued, the prohibitive period has not started
yet.

4) The SC ruled in the affirmative, giving qualified FWBs the option
to remain as stockholder

YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be
given an option to remain as stockholders of HLI should be reconsidered.

[The Court reconsidered its earlier decision that the qualified FWBs
should be given an option to remain as stockholders of HLI, inasmuch as these
qualified FWBs will never gain control [over the subject lands] given the present
proportion of shareholdings in HLI. The Court noted that the share of the FWBs
in the HLI capital stock is [just] 33.296%. Thus, even if all the holders of this
33.296% unanimously vote to remain as HLI stockholders, which is unlikely,
control will never be in the hands of the FWBs. Control means the majority of
[sic] 50% plus at least one share of the common shares and other voting shares.
Applying the formula to the HLI stockholdings, the number of shares that will
constitute the majority is 295,112,101 shares (590,554,220 total HLI capital
shares divided by 2 plus one [1] HLI share). The 118,391,976.85 shares subject to
the SDP approved by PARC substantially fall short of the 295,112,101 shares
needed by the FWBs to acquire control over HLI.]

The SC PARTIALLY GRANTED the motions for reconsideration of
respondents PARC, et al., The 6,296 original FWBs shall forfeit and relinquish
their rights over the HLI shares of stock issued to them in favor of HLI. The HLI
Corporate Secretary shall cancel the shares issued to the said FWBs and transfer
them to HLI in the stocks and transfer book. The 4,206 non-qualified FWBs shall
remain as stockholders of HLI.


Land Bank vs. Dumlao (2008)
FACTS
The DUMLAOS were co-owners of a 32 hectare rice lands in Nueva
Vizcaya which was placed under OLT by virtue of PD27 (note that actual date of
taking was not stated.)The DAR made a preliminary valuation on 16 hectares (2
lots) and payments were made to the DUMLAOs by Landbank. The DUMLAOs
filed a complaint before the RTC to determine just compensation, and requested
the appointment of 3 commissioners to make the determination. The DAR
moved to dismiss claiming that the RTC does not have jurisdiction. The RTC
eventually recognized the case and ordered payment at 6,912.50 per hectare for
one lot & to follow the amount provided for in the Land Valuation Summary and
Farmers Undertaking for the other lot. The DUMLAOs was claiming market value
of 109,000 per hectare. The DUMLAOs appealed to the CA which ruled in their
favor, which noted that the time of taking was not certain. The CA held that after
the passage of RA No. 6657, the formula relative to valuation under PD No.27 no
longer applies. Under PD 27 and EO No. 228, the formula for computing the Land
Value (LV) or Price Per Hectare(PPH) of rice and corn lands is:
2.5 x AGP x GSP = LV or PPH.
Under the CARL, it is provide:
Sec. 17. Determination of Just Compensation.

In determining just compensation, the cost of acquisition of the land,
the current value of the like properties, its nature, actual use and income, the
sworn valuation by the owner, the tax declarations, and the assessment made by
government assessors shall be considered. The social and economic benefits
contributed by the farmers and the farm workers and by the Government to the
property as well as the non-payment of taxes or loans secured from any
government financing institution on the said land shall be considered as
additional factors to determine its valuation.
ISSUE
Which law should be followed to determine just compensation.

HELD(1)

The just compensation due to respondents should be determined
under the provisions of RA No.6657.
The Court has repeatedly held that if just compensation was not
settled prior to the passage of RA No.6657, it should be computed in accordance
with said law, although the property was acquired under PD No.27. The latter
law, being the latest law in agrarian reform, should control, as held in
Land Bank of the Philippines v. Heirs of Angel T. Domingo .Section 75
of RA 6657 clearly states that the provisions of PD 27 and EO 228 shall only have
a suppletory effect. Section 7 of the Act also provides
Sec. 7. Priorities.

The DAR, in coordination with the PARC shall plan and program the
acquisition and distribution of all agricultural lands through a period of ten (10)
years from the effectivity of this Act. Lands shall be acquired and distributed as
follows:
Phase One: Rice and Corn lands under P.D. 27; all idle or abandoned
lands; all private lands voluntarily offered by the owners for agrarian reform; x x
x and all other lands owned by the government devoted to or suitable for
agriculture, which shall be acquired and distributed immediately upon the
effectivity of this Act, with the implementation to be completed within a period
of not more than four (4) years.
This demonstrates that RA 6657 includes PD 27 lands among the
properties which the DAR shall acquire and distribute to the landless.
DARs failure to determine the just compensation for a considerable
length of time makes it inequitable to follow the guidelines provided by PD No.
27 and EO No. 228. Hence, RA No. 6657 should apply. NOTE HOWEVER that the
CAs act of setting just compensation in the amount of P109,000.00 would have
been a valid exercise of this judicial function, had it followed the mandatory
formula prescribed by RA No. 6657. However, the appellate court merely chose
the lower of two (2) values specified by the commissioner as basis for
determining just compensation, namely: (a) P109,000.00 per hectare as the
market value
of first class un irrigated rice land in the Municipality of Villaverde;
and (b)P60.00 per square meter as the zonal value of the land in other
barangays in Villaverde.


This is likewise erroneous because it does not adhere to the formula
provided by RA No. 6657 underSection 17, as implemented through DAR Admin
Order No. 6 (1992) - LV = (CNI x 0.6) + (CS x 0.3) + (MV
x0.1),where: LV = Land ValueCNI = Capitalized Net IncomeCS = Comparable Sales
MV = Market Value per Tax Declaration
(2) The taking of the properties for the purpose of computing just
compensation should be
reckoned from the date of issuance of emancipation patents.
The nature of the land at that time determines the just compensation
to be paid.

(3) The DUMLAOs are entitled to payment of just compensation on
their entire landholdings covered by Operation Land Transfer, except for the
five hectares of retention area each of them are entitled to (RIGHT OF
RETENTION).
The determination of just compensation is judicial in nature. The
DARs land valuation is only preliminary and is not, by any means, final and
conclusive upon the landowner or any other interested party. In the exercise of
its functions, the courts still have the final say on what the amount of just
compensation will be .A reading of Section 18 of RA No. 6657 shows that it is the
courts, not the DAR, which make the final determination of just compensation.
Also, to wait for the DAR valuation despite its unreasonable neglect and delay in
processing the four properties claim folders is to violate the elementary rule
that payment of just compensation must be within a
reasonable period from the taking of property. While the DAR is
vested with primary jurisdiction to determine in a preliminary manner the
amount of just compensation, the circumstances of this case militate against the
application of the doctrine of primary jurisdiction.

LBP vs CA 256 scra 404
.
I. FACTSIn this agrarian dispute, it is once more imperative that the
aforestated principles be applied in its resolution. Separatepetitions for review
were filed by petitioners Department of Agrarian Reform (DAR) and Land Bank of
the following theadverse ruling by the Court of Appeals. Private respondents are
landowners whose landholdings were acquired by theDAR and subjected to
transfer schemes to qualified beneficiaries under the Comprehensive Agrarian
Reform Law. Aggrieved by the alleged lapses of the DAR and the Landbank with
respect to the valuation and payment of compensation for their land, they
sought to compel the DAR to expedite the pending summary administrative
proceedingsto finally determine the just compensation of their properties, and
the Landbank to deposit in cash and bonds the amountsrespectively
"earmarked", "reserved" and "deposited in trust accounts" for private
respondents, and to allow them towithdraw the same.DAR and Land Bank filed
for petitions but it was dismissed and they filed a Motion for Reconsideration.

II. ISSUESWhether or not the opening of "trust accounts" is within the
coverage of term "deposit.
III. HELDThe provision is very clear and unambiguous, foreclosing any
doubt as to allow an expanded construction that would
include the opening of "trust accounts" within the coverage of term
"deposit. Accordingly, we must adhere to the well
-settled rule that when the law speaks in clear and categorical
language, there is no reason for interpretation or construction, but only for
application. The validity of constituting trust accounts for the benefit of the
rejecting landowners and withholding immediate payment to them is further
premised on the latter's refusal to accept the offered compensation thereby
making it necessary that the amount remains in the custody of the LBP for
safekeeping and in trust for eventual payment to the landowners. As an exercise
of police power, the expropriation of private property under the CARP puts t he
landowner, and not the government, in a situation where the odds are already
stacked against his favor. He has no recourse but to allow it. His only consolation
is that he can negotiate for the amount of compensation to be paid for the
expropriated property. Unduly burdening the property owners from the
resulting flaws in the implementation of the CARP which was supposed to have
been a carefully crafted legislation is plainly unfair and unacceptable.


LAND BANK OF THE PHILIPPINES,
petitioner,vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F.
SANTIAGO, AGRICULTURAL MANAGEMENT& DEVELOPMENT CORP.,
respondents
.G.R. No. 118712October 6, 1995 (2D)DEPARTMENT OF AGRARIAN
REFORM, represented by the Secretary of Agrarian Reform,
petitioner,vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F.
SANTIAGO, AGRICULTURAL MANAGEMENT& DEVELOPMENT CORP., ET AL.,
respondents
.G.R. No. 118745October 6, 1995Facts:
Separate petitions for review were filed by petitioners Department of
Agrarian Reform (DAR)(G.R. No. 118745) and Land Bank of the Philippines (LBP)
(G.R. No. 118712) following the adverse rulingby the Court of Appeals, granting
private respondents' Petition for
Certiorari
and
Mandamus
. However,upon motion filed by private respondents, the petitions
were ordered consolidated. Likewise,petitioners seek the reversal of the
Resolution, denying their motion for reconsideration.Private respondents are
landowners whose landholdings were acquired by the DAR andsubjected to
transfer schemes to qualified beneficiaries under the Comprehensive Agrarian
Reform Law(CARL). Aggrieved by the alleged lapses of the DAR and LBP with
respect to the valuation and paymentof compensation for their land pursuant to
the provisions of RA 6657, private respondents filed with theCourt a Petition for
Certiorari
and
Mandamus
with prayer for preliminary mandatory injunction. Privaterespondents
argued that Administrative Order No. 9, Series of 1990 was issued without
jurisdiction andwith grave abuse of discretion because it permits the opening of
trust accounts by the LBP, in lieu of depositing in cash or bonds in an accessible
bank designated by the DAR, the compensation for the landbefore it is taken and
the titles are cancelled as provided under Section 16(e) of RA 6657.

Privaterespondents also assail the fact that the DAR and the LBP
merely "earmarked", "deposited in trust" or"reserved" the compensation in their
names as landowners despite the clear mandate that before takingpossession of
the property, the compensation must be deposited in cash or in bonds. The
respondentcourt rendered the assailed decision in favor of private respondents.

Petitioners filed a motion forreconsideration but respondent court
denied the same, hence, the instant petitions.
Issue:
Whether or not the deposit may be made in other forms besides cash
or LBP bonds
Held:
In the present suit, the DAR clearly overstepped the limits of its
power to enact rules andregulations when it issued Administrative Circular No. 9.
There is no basis in allowing the opening of atrust account in behalf of the
landowner as compensation for his property because Section 16(e) of RA6657 is
very specific that the deposit must be made only in "cash" or in "LBP bonds". If it
were theintention to include a "trust account" among the valid modes of deposit
that should have been madeexpress, or at least, qualifying words ought to have
appeared from which it can be fairly deduced that a"trust account" is
allowed.The ruling in the "Association" case merely recognized the extraordinary
nature of theexpropriation to be undertaken under RA 6657 thereby allowing a
deviation from the traditional modeof payment of compensation and recognized
payment other than in cash. It did not, however, dispense

with the settled rule that there must be full payment of just
compensation before the title to theexpropriated property is transferred.
Issue:
Whether or not there should be a distinction the deposit of
compensation and determination of just compensation
Held:
To withhold the right of the landowners to appropriate the amounts
already deposited in theirbehalf as compensation for their properties simply
because they rejected the DAR's valuation, andnotwithstanding that they have
already been deprived of the possession and use of such properties is
anoppressive exercise of eminent domain. It is unnecessary to distinguish
between deposit of compensation (provisional) under Section 16(e) and
determination of just compensation (final) underSection 18 for purposes of
exercising the landowners' right to appropriate the same. The immediateeffect
in both situations is the same the landowner is deprived of the use and
possession of his propertyfor which he should be fairly and immediately
compensated

G.R. No. 167735 April 18, 2012
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
HEIRS OF SALVADOR ENCINAS and JACOBA
DELGADO, Respondents.
D E C I S I O N
BRION, J .:
We resolve the petition for review on certiorari,
1
filed by the Land Bank of
the Philippines (petitioner), that challenges the July 22, 2004 decision
2
and
the April 6, 2005 resolution
3
of the Court of Appeals (CA) in CA-G.R. SP
No. 78596. The CA decision dismissed the petitioners petition for review
for lack of merit. The CA resolution denied the petitioners subsequent
motion for reconsideration.
The Factual Antecedents
The late Spouses Salvador and Jacoba Delgado Encinas were the
registered owners of a 56.2733-hectare agricultural land in Tinago, Juban,
Sorsogon, under Original Certificate of Title (OCT) No. P-058. When
Republic Act No. (RA) 6657
4
took effect,
5
the heirs of the spouses
Encinas, Melchor and Simon (respondents), voluntarily offered to sell the
land to the government through the Department of Agrarian Reform
(DAR).
On August 21, 1992, the DAR conducted a field investigation of the
land.
6
On October 27, 1997, the DAR submitted the respondents
claimfolder to the petitioner for computation of the lands valuation.
7
The
petitioner valued the land at P819,778.30 (or P22,718.14 per hectare) for
the acquired area of 35.9887 hectares (subject land).
8

Upon the DAR's application, accompanied by the petitioners certification
of deposit of payment,
9
the Register of Deeds of Sorsogon partially
cancelled OCT No. P-058 corresponding to the 35.9887-hectare covered
area, and issued Transfer Certificate of Title Nos. 49948 and 49949 in the
name of the Republic of the Philippines on December 5, 1997.
10

Meanwhile, since the respondents rejected the petitioners valuation of
P819,778.30, the DAR Adjudication Board (DARAB) undertook a
summary administrative proceeding for the determination of just
compensation.
11
On February 6, 2001, Adjudicator Manuel M. Capellan
fixed the value of just compensation at P3,590,714.00, adopting the
DARABs valuation on the property of Virginia Balane in Rangas, Juban,
Sorsogon that fixed the just compensation at P99,773.39 per hectare.
12

Following the denial of its motion for reconsideration,
13
the petitioner filed
on September 26, 2003 a petition for determination of just compensation
with the Regional Trial Court (RTC) of Sorsogon City, Branch 52, sitting as
a Special Agrarian Court (SAC).
14

At the trial, the petitioners witnesses
15
testified on the condition of the
subject land when the DAR conducted the field investigation in
1992,
16
and that the petitioner based its P819,778.30 valuation on DAR
AO No. 11, series of 1994. The petitioner offered as documentary
evidence the DAR field investigation report,
17
the claims and processing
form, a copy of DAR AO No. 11, series of 1994, and the field investigation
report on Balanes property.
18

On the other hand, the respondents witnesses
19
testified on the current
number of trees in the subject land and the estimated board feet each tree
could produce as lumber,
20
the cost of each fruit-bearing tree,
21
and the
previous offer to sell the land.
22
The respondents offered as documentary
evidence the recent private field investigation report of their witness,
Wilfredo Embile, and the Commissioners Report of Provincial Assessor
Florencio Dino in Civil Case No. 6331 (Vivencio Mateo, et al. v. DAR, et
al.) on the just compensation involving another property.
The RTC Ruling
In its April 23, 2003 decision,
23
the RTC fixed the just compensation at
P4,470,554.00, based on: (1) comparable transactions in the nearby
locality; (2) the DARABs valuation on Balanes property; (3) the updated
schedule of fair market value of real properties in the Province of
Sorsogon (Sanggunian Panlalawigan Resolution No. 73-99); (4) the value
and the produce of coconuts, fruits, narra, and other trees, and the
number of board feet extractable from said trees; and (5) the lands
current condition and potential productivity, thus:
Taking into consideration x x x the comparable sale transactions of similar
nearby places as admissible in evidence (MRR vs. Velasco case), the
decision of the DARAB on VOS of Virginia Balane located at Rangas,
Juban, Sorsogon whereby the Board fixed the valuation at P99,773.39 per
hectare, the number of nuts produced from the 1500 coconut trees found
by the representative of the Petitioner Land Bank as per Field
Investigation Report (Exh. "B") so that after ten years since its inspection
on August 21, 1992 all coconut trees are fruit bearing now and granting
that each tree can produce nuts per 45 days, then 45 nuts can be
produced per tree per year, 1500 trees can produce 67,500 nuts in eight
harvest per year and when converted to copra can produce 16,750 kilos,
540,000 nuts per year for the 1500 coconut trees on the 35,9887 hectares
equals 108,000 kilos at P8.00 per kilo, the land can get P864,000.00
yearly and one/half of that shall go to landowner which is P432,000.00, the
Court also considers the value of the fruit bearing trees consisting of 6
guava trees for a total value of P34,000.00, 3 avocado trees for a total
value of P6,000.00, 10 langka trees for a total value of P4,000.0 and 300
banana hills for the total value of P78,000.00, and or a grand total of
P194,880.00 and the timber producing trees consisting of 100 narra trees
with an extractable lumber of no less 5,000 bd. ft at P55.00 per bd. ft or a
total value of P275,000.00 and other trees with a total bd. ft. of 2,700 bd. ft
at P27.00 per bd. ft or a total value of P172,900.00. The Field
Investigation Report (Exh. "B") state also that in the portion for acquisition,
there is a hectare of Nipa and according to the Sanggunian Panlalawigan
Provincial Ordinance No. 73-99, Sec. 10-Valuation of Perennial Trees,
Plants and Other Improvements on Agricultural Land, the value of Nipa
Improvement in a 5th class Municipality is P13,400.00 per hectare and
summing all of the valuation on the above improvements, the Court
hereby fixes the just compensation for the area of 35.9887 hectares
subject for acquisition in the total value of P4,470,554.00.
24

The RTC did not consider the petitioners P819,778.30 valuation because
it was "unrealistically low,"
25
based on a field investigation report made 11
years ago, compared to the report of the respondents representative on
the current condition of the property.
26

With the denial
27
of its motion for reconsideration,
28
the petitioner elevated
its case to the CA via a petition for review under Rule 42 of the Rules of
Court.
29

The CA Ruling
In its July 22, 2004 decision, the CA dismissed the petition for review for
lack of merit, recognizing the jurisdiction and supposed expertise of the
DARAB and the RTC, as a SAC.
30
It found that the petitioners
P819,778.30 valuation for 35.9887 hectares was unconscionably
low
31
and that the RTCs P4,470,554.00 valuation substantially complied
with the factors prescribed by Section 17 of RA 6657.
32

After the denial
33
of its motion for reconsideration,
34
the petitioner came to
this Court.
The Petition
The petitioner argues that the RTC failed to use the formula provided by
Section 17 of RA 6657 in fixing the lands valuation at P4,470,554.00; the
RTC erroneously considered the lands potential, not actual, use, as well
as the lands condition in 2003, many years after the DAR conducted the
field investigation in 1992.
The Case for the Respondents
The respondents, invoking the RTCs judicial discretion in the
determination of just compensation, submit that the RTCs valuation is
reasonable, based on the guidelines set by Section 17 of RA 6657.
The Issue
The core issue boils down to whether the CA erred in affirming the RTC
decision fixing the just compensation at P4,470,554.00 for the
respondents 35.9887-hectare agricultural land.
Our Ruling
We find merit in the petition.
The "taking of private lands under the agrarian reform program partakes of
the nature of an expropriation proceeding."
35
In computing the just
compensation for expropriation proceedings, the RTC should take into
consideration the "value of the land at the time of the taking, not at the
time of the rendition of judgment."
36
"The time of taking is the time when
the landowner was deprived of the use and benefit of his property, such as
when title is transferred to the Republic."
37

In determining the just compensation, the RTC is also required to consider
the following factors enumerated in Section 17
38
of RA 6657: (1) the
acquisition cost of the land; (2) the current value of the properties; (3) its
nature, actual use, and income; (4) the sworn valuation by the owner; (5)
the tax declarations; (6) the assessment made by government assessors;
(7) the social and economic benefits contributed by the farmers and the
farmworkers, and by the government to the property; and (8) the non-
payment of taxes or loans secured from any government financing
institution on the said land, if any.1wphi1
Pursuant to its rule-making power under Section 49 of RA 6657, the DAR
translated these factors into the following basic formula in computing just
compensation:
39

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
We have repeatedly stressed
40
that these factors and formula are
mandatory and not mere guides that the SAC may disregard. "While the
determination of just compensation is essentially a judicial function vested
in the RTC acting as a [SAC], the judge cannot abuse his discretion by not
taking into full consideration the factors specifically identified by law and
implementing rules. [SACs] are not at liberty to disregard the formula
laid down [by the DAR], because unless an administrative order is
declared invalid, courts have no option but to apply it. The [SAC] cannot
ignore, without violating the agrarian law, the formula provided by the DAR
for the determination of just compensation."
41

In this case, we cannot accept the RTCs P4,470,554.00 valuation for the
respondents 35.9887-hectare agricultural land as it failed to comply with
the mandated requirements of the law and applicable DAR regulation on
the fixing of just compensation.1wphi1
Instead of taking into account the condition of the subject land at the time
of taking n December 5, 1997 when the title was transferred to the
Republic of the Philippines,
42
the RTC considered the respondents
evidence on the condition of the subject land at the time of rendition of the
judgment, as well the updated schedule of fair market value of real
properties in the Province of Sorsogon (Sanggunian Panlalawigan
Resolution No. 73-99). The RTC made use of no computation or formula
to arrive at the P4,470,554.00 figure. In fact, it simply enumerated the
respondents evidence and plucked out of thin air the amount of
P4,470,554.00.
In the same vein, we cannot accept the petitioners P819,778.30 valuation
since it was based on the condition of the subject land at the time of the
field investigation in 1992, not at the time of the taking of the subject land
in 1997. Besides, the petitioner offered no testimony to show how the
P819,778.30 figure was arrived at; its witness merely stated that the
P819,778.30 valuation was based on DAR AO No. 11, series of 1994.
43

In the absence of sufficient evidence for the determination of just
compensation, we are constrained to remand the present case to the SAC
for the determination of just compensation, in accordance with Section 17
of RA 6657 and DAR AO No. 02-09 dated October 15, 2009, the latest
DAR issuance on fixing just compensation.
WHEREFORE, the petition is GRANTED. The July 22, 2004 decision and
the April 6, 2005 resolution of the Court of Appeals in CA-G.R. SP No.
78596 are hereby REVERSED and SET ASIDE. The case
is REMANDEDto the Regional Trial Court of Sorsogon City, Branch 52 to
determine the just compensation in Civil Case No. 2001-6911, strictly in
accordance with Section 17 of Republic Act No. 6657 and Department of
Agrarian Reform Administrative Order No. 02-09 dated October 15, 2009.
G.R. No. 157206
TheFacts

This is an appeal via a petition
[2]
for review on certiorari under Rule 45 of
the Rules of Court of the Decision
[3]
of the Court of Appeals dated July 29, 2002
in CA-G.R. SP No. 63691 entitled Land Bank of the Philippines v. Hon.
Venancio J. Amila, in his capacity as Presiding Judge, Regional Trial Court,
Branch 3, Tagbilaran City, Spouses Placido Orilla and Clara Dy Orilla. Said
Decision affirmed the Order
[4]
dated December 21, 2000 of the Regional Trial
Court (RTC), Branch 3, Tagbilaran City, sitting as a Special Agrarian Court
(SAC) in Civil Case No. 6085.

Spouses Placido and Clara Orilla (respondents) were the owners of Lot No.
1, 11-12706, situated in Bohol, containing an area of 23.3416 hectares and
covered by Transfer Certificate of Title No. 18401. In the latter part of November
1996, the Department of Agrarian Reform Provincial Agrarian Reform Office
(DAR-PARO) of Bohol sent respondents a Notice of Land Valuation and
Acquisition dated November 15, 1996 informing them of the compulsory
acquisition of 21.1289 hectares of their landholdings pursuant to the
Comprehensive Agrarian Reform Law (Republic Act [RA] 6657) for P371,154.99
as compensation based on the valuation made by the Land Bank of the Philippines
(petitioner).

Respondents rejected the said valuation. Consequently, the Provincial
Department of Agrarian Reform Adjudication Board (Provincial DARAB)
conducted a summary hearing on the amount of just compensation. Thereafter,
the Provincial DARAB affirmed the valuation made by the petitioner.

Unsatisfied, respondents filed an action for the determination of just
compensation before the Regional Trial Court (as a Special Agrarian
Court [SAC]) of Tagbilaran City. The case was docketed as Civil Case No. 6085
and was raffled to Branch 3.

For its first ground, petitioner asserts that, according to our ruling in Land
Bank of the Philippines v. Court of Appeals,
[20]
the principle of prompt payment
of just compensation is already satisfied by the concurrence of two (2) conditions:
(a) the deposits made by petitioner in any accessible bank, equivalent to the
DAR/LBP valuation of the expropriated property as provisional compensation,
must be in cash and bonds as expressly provided for by Section 16(e) of RA 6657,
not merely earmarked or reserved in trust; and (b) the deposits must be
immediately released to the landowner upon compliance with the legal
requirements under Section 16
[21]
of RA 6657, even pending the final judicial
determination of just compensation.

Anent the second ground, petitioner argues that the good reasons cited by
the SAC, as affirmed by the Court of Appeals, namely: (1) that execution
pending appeal would be in consonance with justice, fairness, and equity
considering that the land had long been taken by the DAR; (2) that suspending the
payment of compensation will prolong the agony that respondents have been
suffering by reason of the deprivation of their property; and (3) that it would be
good and helpful to the economy are not valid reasons to justify the execution
pending appeal, especially because the execution was granted without a hearing.

This appeal should be denied.

As the issues raised are interrelated, they shall be discussed jointly.
As provided above, execution of the judgment or final order pending appeal is
discretionary. As an exception to the rule that only a final judgment may be
executed, it must be strictly construed. Thus, execution pending appeal should
not be granted routinely but only in extraordinary circumstances.

The Rules of Court does not enumerate the circumstances which would
justify the execution of the judgment or decision pending appeal. However, we
have held that good reasons consist of compelling or superior circumstances
demanding urgency which will outweigh the injury or damages suffered should
the losing party secure a reversal of the judgment or final order. The existence of
good reasons is what confers discretionary power on a court to issue a writ of
execution pending appeal. These reasons must be stated in the order granting the
same. Unless they are divulged, it would be difficult to determine whether
judicial discretion has been properly exercised.
[22]


In this case, do good reasons exist to justify the grant by the SAC of the
motion for execution pending appeal? The answer is a resounding YES.

The expropriation of private property under RA 6657 is a revolutionary
kind of expropriation,
[23]
being a means to obtain social justice by distributing
land to the farmers, envisioning freedom from the bondage to the land they
actually till. As an exercise of police power, it puts the landowner, not the
government, in a situation where the odds are practically against him. He cannot
resist it. His only consolation is that he can negotiate for the amount of
compensation to be paid for the property taken by the government. As expected,
the landowner will exercise this right to the hilt, subject to the limitation that he
can only be entitled to just compensation. Clearly therefore, by rejecting and
disputing the valuation of the DAR, the landowner is merely exercising his right
to seek just compensation.
[24]


In this case, petitioner valued the property of respondents at P371,154.99
for the compulsory acquisition of 21.1289 hectares of their landholdings. This
amount respondents rejected. However, the same amount was affirmed by the
DAR after the conduct of summary proceedings. Consequently, respondents
brought the matter to the SAC for the determination of just compensation. After
presentation of evidence from both parties, the SAC found the valuation of the
LBP and the DAR too low and pegged the just compensation due the
respondents at P7.00 per square meter, or a total of P1,479,023.00 for the 21.1289
hectares. In determining such value, the SAC noted the following circumstances:
n light of these circumstances, the SAC found that the valuation made
by petitioner, and affirmed by the DAR, was unjustly way below the fair
valuation of the landholding at the time of its taking by the DAR. The SAC,
mindful also of the advanced age of respondents at the time of the presentation of
evidence for the determination of just compensation, deemed it proper to grant
their motion for execution pending appeal with the objective of ensuring prompt
payment of just compensation.

Contrary to the view of petitioner, prompt payment of just
compensation is not satisfied by the mere deposit with any accessible bank of the
provisional compensation determined by it or by the DAR, and its subsequent
release to the landowner after compliance with the legal requirements set by RA
6657.

Constitutionally, just compensation is the sum equivalent to the
market value of the property, broadly described as the price fixed by the seller in
open market in the usual and ordinary course of legal action and competition, or
the fair value of the property as between the one who receives and the one who
desires to sell, it being fixed at the time of the actual taking by the
government.
[26]
Just compensation is defined as the full and fair equivalent of the
property taken from its owner by the expropriator. It has been repeatedly stressed
by this Court that the true measure is not the takers gain but the owners
loss. The word just is used to modify the meaning of the word compensation
to convey the idea that the equivalent to be given for the property to be taken shall
be real, substantial, full, and ample.
[27]


The concept of just compensation embraces not only the correct
determination of the amount to be paid to the owners of the land, but also
payment within a reasonable time from its taking. Without prompt payment,
compensation cannot be considered just inasmuch as the property owner is
made to suffer the consequences of being immediately deprived of his land while
being made to wait for a decade or more before actually receiving the amount
necessary to cope with his loss.
[28]


Put differently, while prompt payment of just compensation requires
the immediate deposit and release to the landowner of the provisional
compensation as determined by the DAR, it does not end there. Verily, it also
encompasses the payment in full of the just compensation to the landholders as
finally determined by the courts. Thus, it cannot be said that there is already
prompt payment of just compensation when there is only a partial payment
thereof, as in this case.

While this decision does not finally resolve the propriety of the
determination of just compensation by the SAC in view of the separate appeal on
the matter, we find no grave abuse of discretion on the part of the SAC judge in
allowing execution pending appeal. The good reasons cited by the SACthat it
would be in consonance with justice, fairness, and equity, and that suspending
payment will prolong the agony of respondents suffered due to the deprivation of
their landare eloquently elucidated in the Comment filed by SAC Judge
Venancio J. Amila, as nominal party, on the petition for certiorari and prohibition
of petitioner before the Court of Appeals, viz.:

In addition to the Comment of private respondents,
through counsel Hilario C. Baril, which the undersigned
has just received a copy today, it is well to state here that
respondent Placido Orilla is already an old man just as his
wife. The appealed Decision will show that Orilla was
already 71 years old at the time he testified in this case and
the transcripts would further show that the money that he
used in buying the DBP foreclosed property herein subject
of compulsory acquisition by the DAR came from his
retirement benefits evidently thinking that his investment
would afford him security and contentment in his old
age. But, luckily or unluckily, the land was taken from him
by the DAR at a price so low that he could not swallow,
thus, he brought the issue to court. Yet, all along, the land
has been under the enjoyment of farmer-beneficiaries
without him yet being paid therefor. In the mind of the
Court, if payment for the land would be delayed further, it
would not be long that death would overtake him. What a
misfortune to his long years of service to acquire that hard-
earned savings only to be deprived therefrom at the time
when he needed it most.
[29]



The SAC, aware of the protracted proceedings of the appeal of its
November 20, 2000 Decision, but without imputing any dilatory tactics on the
part of petitioner, thus deemed it proper, in its sound discretion, to grant the
execution pending appeal. Moreover, the execution of the judgment of the SAC
was conditioned on the posting of a bond by the respondents, despite pleas to
reduce the same, in the amount of one-half of the just compensation determined
by the said court or P739,511.50.

To reiterate, good reasons for execution pending appeal consist of
compelling or superior circumstances demanding urgency which will outweigh
the injury or damages suffered should the losing party secure a reversal of the
judgment or final order. In the case at bar, even with the procedural flaw in the
SACs grant of execution without a hearing, the injury that may be suffered by
respondents if execution pending appeal is denied indeed outweighs the damage
that may be suffered by petitioner in the grant thereof. As correctly pointed out
by respondents, the reversal of the November 20, 2000 SAC Decision, in the
sense that petitioner will pay nothing at all to respondents, is an impossibility,
considering the constitutional mandate that just compensation be paid for
expropriated property. The posting of the required bond, to our mind, adequately
insulates the petitioner against any injury it may suffer if the SAC determination
of just compensation is reduced.

Suffice it to say that, given the particular circumstances of this case,
along with the considerable bond posted by respondents, the assailed SAC Order
of December 21, 2000 and the Decision of the Court of Appeals dated July 29,
2002 are justified.