GR 190336; (June, 2012) (Digest)
G.R. No. 190336 ; June 27, 2012
LAND BANK OF THE PHILIPPINES, Petitioner, vs. PAZ O. MONTALVAN and JESUS J. MONTALVAN, Respondents.
FACTS
Respondents, spouses Montalvan, voluntarily offered their 162.9669-hectare property for sale under the Comprehensive Agrarian Reform Program (CARP). The Department of Agrarian Reform (DAR) initially focused on acquiring 147.6913 hectares but later reduced the intended acquisition to only 72 hectares, deeming the remaining 75.6913 hectares unsuitable for agriculture. The DAR offered ₱510,768.72 for the 72-hectare portion. The Montalvans rejected this valuation and, after no action from the DAR Adjudication Board (DARAB), filed a complaint for just compensation directly with the Regional Trial Court (RTC) sitting as a Special Agrarian Court (SAC). Notably, while the case was pending, the DAR caused the cancellation of the Montalvans’ title and issued a new one in the name of the Republic covering the entire 147.6913 hectares, despite its valuation being limited to 72 hectares.
ISSUE
Whether the SAC correctly assumed jurisdiction to determine just compensation for the entire 147.6913 hectares titled in the Republic’s name, and whether its valuation was proper.
RULING
Yes. The Supreme Court affirmed the Court of Appeals’ decision, which upheld the SAC’s jurisdiction and modified the compensation. The determination of just compensation for property taken under CARP is a judicial function vested exclusively in the SAC. The DARAB’s administrative valuation, which became final, pertained only to the 72-hectare portion. However, the act of titling the entire 147.6913 hectares in the Republic’s name constituted a taking of both the expropriated and excluded portions. Since the government effectively took possession of the whole area, the Montalvans were entitled to just compensation for all 147.6913 hectares. The SAC properly constituted a panel of commissioners to ascertain the fair market value. The Court found the commissioners’ valuation of ₱50,000 per hectare for the 72-hectare portion, totaling ₱3,600,000, to be supported by evidence. For the remaining 75.6913 hectares, the Court, applying equitable principles, set just compensation at ₱30,000 per hectare, or ₱2,270,739, considering its classification as unsuitable for agriculture. The total award was thus ₱5,870,739. The Court emphasized that the government cannot retain ownership of land without paying its full value, and the SAC’s factual findings, when affirmed by the CA, are conclusive.