G.R. Nos. 140160 & 146733; January 13, 2004
LAND BANK OF THE PHILIPPINES, petitioner, vs. FELICIANO F. WYCOCO, respondent. FELICIANO F. WYCOCO, petitioner, vs. THE HONORABLE RODRIGO S. CASPILLO, et al., respondents.

FACTS

Respondent Feliciano Wycoco owned a 94-hectare rice land in Nueva Ecija. Under the Comprehensive Agrarian Reform Program (CARP), he voluntarily offered to sell it to the government. The Department of Agrarian Reform (DAR), through the Land Bank of the Philippines (LBP), offered compensation amounting to approximately P2.2 million. Wycoco rejected this valuation. The DAR then endorsed the case to the DAR Adjudication Board (DARAB) for a summary administrative proceeding to fix just compensation. While this administrative proceeding was pending, Wycoco filed a petition for determination of just compensation directly with the Regional Trial Court (RTC) of Cabanatuan City, acting as a Special Agrarian Court (SAC). The DARAB subsequently dismissed its case to give way to the SAC.
The SAC, after a pre-trial where the sole issue was the determination of just compensation, rendered a decision without conducting a formal trial. It took judicial notice of the alleged prevailing market value of land in the area and fixed compensation at P13.4 million. It also awarded unrealized profits and interest. The Court of Appeals modified this decision, deleting the awards for damages and unrealized profits but affirming the valuation. Both parties elevated the case to the Supreme Court via consolidated petitions.

ISSUE

The primary issues were: (1) Whether the SAC correctly determined just compensation by taking judicial notice of market value without receiving evidence; and (2) Whether the awards for unrealized profits and interest were proper.

RULING

The Supreme Court partially granted the petitions. It held that the SAC committed a grave error in determining just compensation based solely on judicial notice. The determination of just compensation is a judicial function that requires the examination of the specific factors enumerated in Section 17 of Republic Act No. 6657 and its implementing rules. These factors include the land’s cost, nature, actual use, income, sworn valuation, tax declarations, and the current value of like properties. The court cannot simply rely on general knowledge or “public knowledge” of land prices. This process is evidentiary and must be based on evidence formally offered by the parties.
Consequently, the Supreme Court nullified the SAC’s valuation and remanded the case for proper reception of evidence and recalculation of just compensation in strict compliance with the law’s mandated formula. Furthermore, the Court affirmed the deletion of the awards for unrealized profits and interest. In agrarian reform, just compensation is not the market value but the full and fair equivalent of the property taken, anchored on the specific statutory factors. Awards for consequential damages like unrealized profits are not permitted, as just compensation is intended to be the sole relief. The petition for mandamus to compel execution was dismissed as moot due to the remand.