GR 143276; (July, 2004) (Digest)
G.R. No. 143276. July 20, 2004.
LANDBANK OF THE PHILIPPINES, petitioner, vs. SPOUSES VICENTE BANAL and LEONIDAS ARENAS-BANAL, respondents.
FACTS
Respondents Spouses Banal owned 19.3422 hectares of agricultural land. A 6.2330-hectare portion was compulsorily acquired by the DAR under the Comprehensive Agrarian Reform Law (R.A. No. 6657). Petitioner Landbank valued the property at P173,918.55 using the formula in DAR Administrative Orders. Respondents rejected this valuation. The Provincial Agrarian Reform Adjudicator (PARAD) affirmed Landbank’s valuation. Respondents then filed a petition for determination of just compensation with the Regional Trial Court (RTC), sitting as a Special Agrarian Court, praying for P623,000.00.
During pre-trial, the parties submitted admissions regarding the applicability of R.A. 6657, distribution to beneficiaries, and Landbank’s provisional deposit. The RTC dispensed with a hearing and directed the submission of memoranda. The RTC rendered a Decision valuing the land at P703,137.00, plus compounded interest, using formulas derived from a separate pending case (Luz Rodriguez vs. DAR) instead of the DAR formula. The Court of Appeals affirmed the RTC Decision in toto.
ISSUE
Whether the Court of Appeals erred in sustaining the trial court’s valuation of the land.
RULING
Yes. The Supreme Court reversed the decisions of the Court of Appeals and the RTC. The RTC committed a grave abuse of discretion in determining just compensation without conducting a trial or receiving evidence, and by applying a valuation formula from an unrelated, pending case. The determination of just compensation is a judicial function. While the RTC, as a Special Agrarian Court, has original and exclusive jurisdiction over such determinations, it must still adhere to basic procedural due process and consider the specific factors mandated by Section 17 of R.A. 6657. These factors include the land’s cost, nature, actual use, income, sworn valuation, tax declarations, and the current value of like properties. The RTC cannot arbitrarily adopt a formula from another case without a proper hearing where the parties can present evidence on these statutory factors. The case was remanded to the RTC for proper reception of evidence and determination of just compensation in accordance with Section 17 of R.A. 6657 and applicable jurisprudence.