GR 182431; (February, 2013) (Digest)
G.R. No. 182431 ; February 27, 2013
LAND BANK OF THE PHILIPPINES, Petitioner, vs. ESTHER ANSON RIVERA, ANTONIO G. ANSON AND CESAR G. ANSON, Respondents.
FACTS
Respondents are co-owners of agricultural land placed under Operation Land Transfer via Presidential Decree No. 27 in 1972. The Land Bank of the Philippines (LBP) approved compensation of ₱265,494.20, inclusive of a 6% increment per DAR Administrative Order No. 13, series of 1994. Dissatisfied, respondents filed for judicial determination of just compensation before the Regional Trial Court (RTC) acting as a Special Agrarian Court. The RTC fixed just compensation at ₱1,297,710.63 and ordered LBP to pay this amount plus 12% annual interest from October 7, 2004, until full payment.
The Court of Appeals modified the RTC decision, ordering LBP to pay a recomputed just compensation of ₱823,957.23 (inclusive of interests as of October 6, 2004) plus 12% annual interest from October 7, 2004. LBP elevated the case, contesting the imposition of 12% interest. The Supreme Court, in a November 17, 2010 Decision, affirmed the CA ruling on the 12% interest but exempted LBP from paying costs of suit. LBP filed this Motion for Reconsideration, arguing the 12% interest applies only in cases of undue delay, which it claims is absent here.
ISSUE
Whether the imposition of 12% annual interest on the determined just compensation from October 7, 2004, is legally correct.
RULING
The Supreme Court denied the Motion for Reconsideration and upheld the 12% interest. The legal logic is anchored on the principle that just compensation must be not only the correct amount but also paid without delay. The 12% interest is imposed in the nature of damages for the government’s delay in payment, transforming its obligation into one of forbearance. This compensates the landowner for the income foregone from the property from the time of taking until actual payment.
The Court rejected LBP’s argument that there was no undue delay. The taking occurred in 1972, but the final judicial determination of just compensation was rendered only in 2004. This protracted period itself constitutes delay. The 6% increment under DAR administrative orders is a separate statutory grant, not a substitute for the 12% interest imposed by the courts as a consequence of delayed payment. Following established jurisprudence, such as Apo Fruits Corporation v. Land Bank of the Philippines, the 12% interest runs from the date of finality of the court’s decision fixing just compensation (here, October 7, 2004) until full payment is made, ensuring the landowner is made whole. The Court clarified that the 6% statutory increment covers the period from the taking (1972) until a specified cutoff, while the 12% judicial interest runs from the finality of the judgment.