Sec 17

2. Land Bank v. Dumlao

FACTS
The DUMLAOS were co-owners of a 32 hectare ricelands 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 farmworkers
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.
DAR’s 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 CA’s 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 unirrigated
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 under Section
17, as implemented through DAR Admin Order No. 6 (1992) - 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

(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 DAR’s 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’ claimfolders 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.

6. Lubrica v Land Bank

G.R. No. 170220 November 20, 2006
 JOSEFINA S. LUBRICA, in her capacity as Assignee of FEDERICO C.
SUNTAY, NENITA SUNTAY TAÑEDO

and EMILIO A.M. SUNTAY III, Petitioners, 
 vs.
 LAND BANK OF THE PHILIPPINES, Respondent.

2
FACTS:
 Petitioner Josefina S. Lubrica is the assignee of Federico C. Suntay over certain parcels of agricultural
land located at Sta. Lucia, Sablayan, Occidental Mindoro, with an area of 3,682.0285 hectares covered by Transfer
Certificate of Title (TCT).
 In 1972, a portion of the said property with an area of 311.7682 hectares, was placed
4 5
under the land reform program pursuant to Presidential Decree No. 27 (1972) and Executive Order No. 228 (1987).
The land was thereafter subdivided and distributed to farmer beneficiaries. The Department of Agrarian Reform
(DAR) and the LBP fixed the value of the land at P5,056,833.54 which amount was deposited in cash and bonds in
favor of Lubrica.
 Nenita Suntay-Tañedo and Emilio A.M. Suntay III inherited from Federico Suntay a parcel of
agricultural land consisting of two lots, namely, Lot 1 with an area of 45.0760 hectares and Lot 2 containing an area
of 165.1571 hectares or a total of 210.2331 hectares. Lot 2 was placed under the coverage of P.D. No. 27 but only
128.7161 hectares was considered by LBP and valued the same at P1,512,575.05.
 Petitioners rejected the valuation
of their properties, hence the Office of the Provincial Agrarian Reform Adjudicator (PARAD) conducted summary
administrative proceedings for determination of just compensation.

ISSUE: WON the determination of just compensation should be based on the value of the expropriated properties at
the time of payment.

HELD: Yes.
 Petitioners were deprived of their properties without payment of just compensation which, under the
27
law, is a prerequisite before the property can be taken away from its owners. The transfer of possession and
ownership of the land to the government are conditioned upon the receipt by the landowner of the corresponding
payment or deposit by the DAR of the compensation with an accessible bank. Until then, title remains with the
landowner.
 The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation
in cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. No outright change
of ownership is contemplated either.
 Petitioners were deprived of their properties way back in 1972, yet to date, they
have not yet received just compensation. Thus, it would certainly be inequitable to determine just compensation based
on the guideline provided by P.D. No. 227 and E.O. No. 228 considering the failure to determine just compensation
for a considerable length of time. That just compensation should be determined in accordance with R.A. No. 6657 and
not P.D. No. 227 or E.O. No. 228, is important considering that just compensation should be the full and fair equivalent
of the property taken from its owner by the expropriator, the equivalent being real, substantial, full and ample.

8. LANDBANK vs. COLARINA, GR 176410

FACTS:

Respondent is the registered owner of three (3) parcels of agricultural land which he acquired from their
former owner, Damiana Arcega. The parcels of land have a total area of 972,047 square meters. Upon
acquisition thereof, respondent manifested his voluntary offer to sell the properties to the DAR for coverage
under R.A. No. 6657. Respondent’s assessment value of the properties was P45,000.00 per hectare.

The DAR, through petitioner LBP assessed the properties and offered to purchase only 57.2047 hectares
out of the 97.2047 hectares voluntarily offered for sale by respondent. The excluded area (40 hectares) fell
under the exemptions and exclusions provided in Section 10 of the CARL, i.e., all lands with eighteen
percent (18%) slope and over.

As the LBP’s assessment and valuation of the properties was unacceptable to, and rejected by, respondent,
he elevated the determination of just compensation of the properties to the Provincial Agrarian Reform
Adjudicator (PARAD). Unfortunately for respondent, the PARAD affirmed the valuation set forth by the LBP.

Disappointed with the low valuation by petitioner and the DAR, respondent filed a Complaint before the
RTC, for the judicial determination of just compensation. During pre-trial, LBP manifested that the subject
properties may be reassessed and revaluated based on the new guidelines set forth in DAR A.O. No. 11,
Series of 1994. Intent on finding a common ground between petitioner and respondent and to amicably
settle the case, the SAC ordered the revaluation. However, the valuation was still rejected by respondent.
Hence, trial ensued.

ISSUE:

How should the value of “just compensation” be computed?

HELD:

Citing Land Bank of the Philippines v. Celada, the Court declared:

 While SAC is required to consider the acquisition cost of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the owner, the tax declaration
and the assessments made by the government assessors to determine just compensation, it is
equally true that these factors have been translated into a basic formula by the DAR pursuant to its
rule-making power under Section 49 of RA No. 6657. As the government agency principally tasked
to implement the agrarian reform program, it is the DAR’s duty to issue rules and regulations to
carry out the object of the law. DAR AO No. 5, s. of 1998 precisely “filled in the details” of Section
17, RA No. 6657 by providing a basic formula by which the factors mentioned therein may be taken
into account. The SAC was at no liberty to disregard the formula which was devised to implement
the said provision.
It is elementary that rules and regulations issued by administrative bodies to interpret the law which
they are entrusted to enforce, have the force of law, and are entitled to great respect. Administrative
issuances partake of the nature of a statute and have in their favor a presumption of legality. As
such, courts cannot ignore administrative issuances especially when, as in this case, its validity
was not put in issue. Unless an administrative order is declared invalid, courts have no option but
to apply the same.

While the Court commends respondent in readily participating in the government’s agrarian reform program,
our previous rulings preclude us from validating the valuation of the subject properties proffered to, and
affirmed by, the SAC. The government cannot be forced to purchase land which it finds no need for,
regardless of Oliva’s unschooled opinion. Considering respondent’s belief that the properties are worth
more than the valuation made by the DAR, he can proceed to develop the land excluded by the DAR from
expropriation into its potential use as assessed by Oliva.

11. Land Bank v CA and Jose Pascual

Facts:

Private respondent Jose Pascual owned three parcels of land located in Guttaran, Cagayan. Pursuant to the Land
Reform Program of the Government under PD 27 and EO 228, the Department of Agrarian Reform placed these lands
under its Operation Land Transfer. After receiving notice of the decision of the PARAD regarding the value of just
compensation, private respondent accepted the valuation. However, when the judgment became final and executory,
petitioner LBP as the financing arm in the operation of PD 27 and EO 228 refused to pay thus forcing private
respondent to apply for a Writ of Execution with the PARAD which the latter issued on 24 December 1992. Still,
petitioner LBP declined to comply with the order. Private respondent filed an action for Mandamus in the Court of
Appeals to compel petitioner to pay the valuation determined by the PARAD which the appellate court granted.

Issue:
 Whether or not the LBP can refuse to pay the landowner of the value of just compensation Held:

Once the Land Bank agrees with the appraisal of the DAR, which bears the approval of the landowner, it becomes its
legal duty to finance the transaction. In the instant case, petitioner participated in the valuation proceedings held in
the office of the PARAD through its counsel, Atty. Eduard Javier. It did not appeal the decision of PARAD which
became final and executory. As a matter of fact, petitioner even stated in its Petition that it is willing to pay the value
determined by the PARAD provided that the farmer beneficiaries concur thereto. These facts sufficiently prove that
petitioner LBP agreed with the valuation of the land. The only thing that hindered it from paying the amount was the
non-concurrence of the farmer-beneficiary. But as we have already stated, there is no need for such concurrence.
Without such obstacle, petitioner can now be compelled to perform its legal duty through the issuance of a writ of
mandamus.

Sec. 18
1. Association of Small Landowners v. Sec. of Agrarian Reform

175 SCRA 343 – Political Law – Constitutional Law – Bill of Rights – Equal Protection – Valid Classification
Eminent Domain – Just Compensation
These are four consolidated cases questioning the constitutionality of the Comprehensive Agrarian Reform
Act (R.A. No. 6657 and related laws i.e., Agrarian Land Reform Code or R.A. No. 3844).
Brief background: Article XIII of the Constitution on Social Justice and Human Rights includes a call for the adoption
by the State of an agrarian reform program. The State shall, by law, undertake an agrarian reform program founded
on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till
or, in the case of other farmworkers, to receive a just share of the fruits thereof. RA 3844 was enacted in 1963. P.D.
No. 27 was promulgated in 1972 to provide for the compulsory acquisition of private lands for distribution among
tenant-farmers and to specify maximum retention limits for landowners. In 1987, President Corazon Aquino issued
E.O. No. 228, declaring full land ownership in favor of the beneficiaries of PD 27 and providing for the valuation of
still unvalued lands covered by the decree as well as the manner of their payment. In 1987, P.P. No. 131, instituting
a comprehensive agrarian reform program (CARP) was enacted; later, E.O. No. 229, providing the mechanics for its
(PP131’s) implementation, was also enacted. Afterwhich is the enactment of R.A. No. 6657, Comprehensive
Agrarian Reform Law in 1988. This law, while considerably changing the earlier mentioned enactments,
nevertheless gives them suppletory effect insofar as they are not inconsistent with its provisions.
[Two of the consolidated cases are discussed below]
G.R. No. 78742: (Association of Small Landowners vs Secretary)
The Association of Small Landowners in the Philippines, Inc. sought exception from the land distribution scheme
provided for in R.A. 6657. The Association is comprised of landowners of ricelands and cornlands whose
landholdings do not exceed 7 hectares. They invoke that since their landholdings are less than 7 hectares, they
should not be forced to distribute their land to their tenants under R.A. 6657 for they themselves have shown
willingness to till their own land. In short, they want to be exempted from agrarian reform program because they
claim to belong to a different class.
G.R. No. 79777: (Manaay vs Juico)
Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228, and 229) on the ground that
these laws already valuated their lands for the agrarian reform program and that the specific amount must be
determined by the Department of Agrarian Reform (DAR). Manaay averred that this violated the principle in
eminent domain which provides that only courts can determine just compensation. This, for Manaay, also violated
due process for under the constitution, no property shall be taken for public use without just compensation.
Manaay also questioned the provision which states that landowners may be paid for their land in bonds and not
necessarily in cash. Manaay averred that just compensation has always been in the form of money and not in bonds.
ISSUE:
1. Whether or not there was a violation of the equal protection clause.
2. Whether or not there is a violation of due process.
3. Whether or not just compensation, under the agrarian reform program, must be in terms of cash.
HELD:
1. No. The Association had not shown any proof that they belong to a different class exempt from the agrarian
reform program. Under the law, classification has been defined as the grouping of persons or things similar to each
other in certain particulars and different from each other in these same particulars. To be valid, it must conform to
the following requirements:
(1) it must be based on substantial distinctions;
(2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class.
Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights
conferred and the liabilities imposed. The Association have not shown that they belong to a different class and
entitled to a different treatment. The argument that not only landowners but also owners of other properties must
be made to share the burden of implementing land reform must be rejected. There is a substantial distinction
between these two classes of owners that is clearly visible except to those who will not see. There is no need to
elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a valid classification.
Its decision is accorded recognition and respect by the courts of justice except only where its discretion is abused to
the detriment of the Bill of Rights. In the contrary, it appears that Congress is right in classifying small landowners
as part of the agrarian reform program.
2. No. It is true that the determination of just compensation is a power lodged in the courts. However, there is no
law which prohibits administrative bodies like the DAR from determining just compensation. In fact, just
compensation can be that amount agreed upon by the landowner and the government – even without judicial
intervention so long as both parties agree. The DAR can determine just compensation through appraisers and if the
landowner agrees, then judicial intervention is not needed. What is contemplated by law however is that, the just
compensation determined by an administrative body is merely preliminary. If the landowner does not agree with
the finding of just compensation by an administrative body, then it can go to court and the determination of the
latter shall be the final determination. This is even so provided by RA 6657:
Section 16 (f): Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for
final determination of just compensation.
3. No. Money as [sole] payment for just compensation is merely a concept in traditional exercise of eminent domain.
The agrarian reform program is a revolutionary exercise of eminent domain. The program will require billions of
pesos in funds if all compensation have to be made in cash – if everything is in cash, then the government will not
have sufficient money hence, bonds, and other securities, i.e., shares of stocks, may be used for just compensation.

2. Santos v Land Bank

Facts:

The lands of petitioner were taken by DAR under P.D. No. 27 in 1972. Regional Trial Court, sitting as an Agrarian
Court rendered judgment fixing the amount of P49, 241,876.00 to be the just compensation for the irrigated and
unirrigated ricelands of the petitioner. A preliminary valuation in the amount of P3, 543,070.66 had in fact been
previously released by the Land Bank in cash and bond; thus deducting it from the total amount adjudged, the balance
unpaid amounted to P45, 698,805.34 which was ordered by the Regional Trial Court to be paid in accordance with
RA 6657. Petitioner claimed that the payment of P41, 128,024.81 in Land Bank Bonds was not acceptable to him and
that the said amount should be paid in cash or certified check. Initially, the RTC ruled in favour of the petitioner but
on motion for reconsideration it ruled otherwise and declared that the unpaid balance should be paid in accordance
with RA 6657. On appeal to the CA, the ruling of the trial court was upheld.

Issue:
 Whether or not the petitioner can refuse the LBP Bonds as payment of just compensation Held:

RA 6657 is clear and leaves no doubt as to its interpretation regarding the manner of payment of just compensation.
The provision allows the landowner to choose the manner of payment from the list provided therein, but since plaintiff
had obviously wanted payment to be made in cash, then the trial court had only to apply Section 18 of R.A. 6657
which provides for the payment of a percentage thereon in cash and the balance in bond.

Sec. 24

4. MAGO vs. BARBIN, GR 173923

FACTS:

Respondent filed with the PARAD of Camarines Norte an action for Cancellation of Emancipation Patents,
Disqualification of Tenant-Beneficiary, Repossession and Damages, alleging that she is the owner in fee
simple of the subject irrigated Riceland, with an area of 4.7823 hectares, and that petitioners were tenants
of the subject landholding. Respondent further alleged that petitioners violated the terms of their leasehold
contracts when they failed to pay lease rentals for more than two years, which is a ground for their
dispossession of the landholding. On the other hand, petitioners alleged that the subject landholding was
placed under the Operation Land Transfer program of the government pursuant to PD 27. Respondent’s
original title was then cancelled and the subject landholding was transferred to petitioners who were issued
Emancipation Patents by the DAR. The Transfer Certificates of Title issued to petitioners emanating from
the Emancipation Patents were registered with the Registry of Deeds. Petitioners averred that prior to the
issuance of the Emancipation Patents, they already delivered their lease rentals to respondent. They further
alleged that after the issuance of the Emancipation Patents, the subject landholding ceased to be covered
by any leasehold contract.

DARAB held that when the subject landholding was placed under the Operation Land Transfer, the tenancy
relationship between the parties ceased and the tenant-beneficiaries were no longer required to pay lease
rentals to the landowner. However, when petitioners entered into an agreement with respondent for a direct
payment scheme embodied in the Deeds of Transfer, petitioners obligated themselves to pay their
amortizations to respondent who is the landowner. CA held that the mere issuance of an Emancipation
Patent to a qualified farmer-beneficiary is not absolute and can be attacked anytime upon showing of any
irregularity in its issuance or non-compliance with the conditions attached to it. The Emancipation Patent is
subject to the condition that amortization payments be remitted promptly to the landowner and that failure
to comply with this condition is a ground for cancellation.

ISSUE:

Whether or not herein petitioners violated the emancipation patent.

HELD:

The Court has already ruled that the mere issuance of an emancipation patent does not put the ownership
of the agrarian reform beneficiary beyond attack and scrutiny. Emancipation patents issued to agrarian
reform beneficiaries may be corrected and cancelled for violations of agrarian laws, rules and regulations.
In fact, DAR Administrative Order No. 02, series of 1994, which was issued in March 1994, enumerates the
grounds for cancellation of registered Emancipation Patents or Certificates of Landownership Award. There
is no substantial evidence on record that the petitioners had remitted the amortizations due to the landowner
in accordance with their agreed direct payment scheme embodied in their deeds of transfer. In view thereof,
the Court has no recourse but to sustain the findings of fact of the agency below.

Well-settled is the rule that only questions of law can be raised in a petition for review under Rule 45 of the
Rules of Civil Procedure. The factual findings of the Court of Appeals are conclusive and cannot be reviewed
on appeal, provided they are based on substantial evidence. More so in this case where the findings of the
Court of Appeals coincide with those of the DARAB, an administrative body with expertise on matters within
its specific and specialized jurisdiction.

In the first place, the Emancipation Patents and the Transfer Certificates of Title should not have been
issued to petitioners without full payment of the just compensation. Under Section 2 of Presidential Decree
No. 266, the DAR will issue the Emancipation Patents only after the tenant-farmers have fully complied with
the requirements for a grant of title under PD 27. Although PD 27 states that the tenant-farmers are already
deemed owners of the land they till, it is understood that full payment of the just compensation has to be
made first before title is transferred to them. Thus, Section 6 of EO 228 provides that ownership of lands
acquired under PD 27 may be transferred only after the agrarian reform beneficiary has fully paid the
amortizations. In this case, both the Court of Appeals and the DARAB found that petitioners have not fully
paid the amortizations for the land granted to them. The PARAD had a similar finding when it recommended
that the proper recourse of respondent is to file a claim for just compensation. Clearly, the cancellation of
the Emancipation Patents issued to petitioners is proper under the circumstances.