G.R. No. 167809 ; July 23, 2009
LANDBANK OF THE PHILIPPINES, Petitioner, vs. JOSEFINA R. DUMLAO, et al., Respondents.

FACTS

Petitioner Land Bank of the Philippines filed a Motion for Reconsideration seeking to overturn this Court’s Decision dated November 27, 2008, which affirmed the Court of Appeals’ ruling. The underlying case involves the determination of just compensation for agricultural lands owned by respondents and acquired under the agrarian reform program initiated by Presidential Decree (PD) No. 27. The central dispute revolves around the applicable legal formula for computing the land value.
Land Bank insists that the formula prescribed under PD No. 27 and Executive Order (EO) No. 228, as applied in the case of Gabatin v. Land Bank of the Philippines, should govern the computation. It argues that the Court’s previous decision effectively gave retroactive effect to Republic Act (RA) No. 6657 (Comprehensive Agrarian Reform Law of 1988) in determining compensation for lands covered by PD No. 27, which was issued earlier.

ISSUE

Whether the Motion for Reconsideration presents new and substantial grounds to warrant a reversal of the Court’s Decision affirming the use of RA No. 6657 , and not PD No. 27 and EO No. 228, for computing just compensation for the subject properties.

RULING

The Motion for Reconsideration is denied. The Court found that petitioner merely reiterated arguments already passed upon and raised no cogent reason for reversal. The reliance on Gabatin is misplaced, as that case involved different factual issues, specifically the applicable Government Support Price for palay and its pegging date, and did not question the applicability of the PD No. 27/EO No. 228 formula itself, unlike the respondents in the instant case.
The Court clarified that the determination of just compensation is a judicial function. While PD No. 27 and EO No. 228 provide initial administrative formulae, the courts are not precluded from examining whether such decreed compensation is “just” under the constitutional guarantee. The Court’s previous pronouncement did not give RA No. 6657 a general retroactive effect. Rather, it consistently held that if just compensation for lands acquired under PD No. 27 remains unsettled by the time RA No. 6657 took effect, the factors and guidelines in Section 17 of the latter law shall apply for its final judicial determination. This limited application ensures that the compensation is truly just and considers contemporary valuation factors. The case is remanded to the trial court for the final computation of just compensation due to respondents.