GR 167735; (April, 2012) (Digest)
G.R. No. 167735; April 18, 2012
LAND BANK OF THE PHILIPPINES, Petitioner, vs. HEIRS OF SALVADOR ENCINAS and JACOBA DELGADO, Respondents.
FACTS
The respondents, heirs of the late Spouses Encinas, voluntarily offered their 56.2733-hectare agricultural land for sale under the Comprehensive Agrarian Reform Program. The Land Bank of the Philippines (LBP) valued the acquired portion of 35.9887 hectares at P819,778.30 based on a 1992 field investigation and DAR Administrative Order (AO) No. 11, series of 1994. The respondents rejected this valuation. The DAR Adjudication Board (DARAB) subsequently fixed just compensation at P3,590,714.00, adopting its prior valuation of a nearby property.
Dissatisfied, the LBP filed a petition for determination of just compensation with the Regional Trial Court (RTC) sitting as a Special Agrarian Court (SAC). The RTC, considering evidence on the land’s current condition, comparable sales, and the value of standing crops and trees, fixed just compensation at P4,470,554.00. The Court of Appeals (CA) dismissed LBP’s petition for review, affirming the RTC’s decision.
ISSUE
Whether the RTC, acting as a SAC, erred in determining just compensation by allegedly disregarding the formula prescribed under DAR administrative orders.
RULING
The Supreme Court denied the petition and affirmed the CA decision. The Court held that the determination of just compensation is a judicial function vested in the RTC acting as a SAC. While DAR administrative orders provide a framework and guide for valuation, the SAC is not strictly bound by their formulaic prescriptions. The Court emphasized that just compensation must be the full and fair equivalent of the property taken, payable to the owner at the time of taking, and based on all relevant factors enumerated in Section 17 of Republic Act No. 6657.
The RTC correctly exercised its discretion by considering various factors beyond the LBP’s outdated computation. It took into account the property’s nature, actual use, income, comparable transactions, the current condition and productivity of the land, and the value of improvements like fruit-bearing and timber trees. The RTC’s comprehensive approach, which aimed to arrive at a realistic and equitable valuation reflective of the property’s fair market value at the time of taking, aligns with the constitutional and statutory mandate for just compensation. The LBP’s rigid reliance on an old field report and a specific administrative formula, to the exclusion of other pertinent factors, was properly rejected.