G.R. No. 171836 & G.R. No. 195213, October 2, 2017
DEPARTMENT OF AGRARIAN REFORM, represented by HON. NASSER C. PANGANDAMAN, in his capacity as DAR-OIC Secretary, Petitioner, vs. SUSIE IRENE GALLE, Respondent. x—————————————-x LAND BANK OF THE PHILIPPINES, Petitioner, vs. SUSIE IRENE GALLE, substituted by her heirs, namely HANS PETER, CARL OTTO, FRITZ WALTER, and GEORGE ALAN, all surnamed RIETH, Respondents.

FACTS

The consolidated cases involve the determination of just compensation for the 1993 expropriation of Susie Irene Galle’s agricultural land under the Comprehensive Agrarian Reform Program (CARP). The Department of Agrarian Reform Adjudication Board (DARAB) fixed compensation based on outdated 1991 valuation data. Galle challenged this, and the Court of Appeals (CA) ruled in her favor. The Supreme Court, in a 2014 Decision, affirmed the CA, declared the DARAB decision void for using incorrect data, and remanded the case to the CA for proper computation based on Section 17 of R.A. No. 6657 and applicable DAR Administrative Orders (AOs). It also ordered Land Bank of the Philippines (LBP) to pay Galle’s heirs a provisional amount of ₱7,534,063.91.
Both the Department of Agrarian Reform (DAR) and LBP filed Motions for Reconsideration. DAR argued the 1991 valuation was correct as the “taking” commenced with the 1991 Notice of Coverage and that the DARAB decision was final. LBP contended the Court could not nullify a final DARAB decision via a Rule 45 petition and, alternatively, that the newer DAR AO No. 2, Series of 2009, should govern the computation, not AO No. 6 (1992), as amended.

ISSUE

The primary issue is whether the Supreme Court correctly denied the motions for reconsideration and upheld its prior ruling, particularly on the applicable valuation formula and the propriety of nullifying the final DARAB decision.

RULING

The Supreme Court denied the motions for reconsideration and affirmed its 2014 Decision. The legal logic is multi-faceted. First, the Court reiterated that the DARAB decision, though final, was void for having been rendered with grave abuse of discretion. It used 1991 data for a 1993 taking, violating the fundamental rule that just compensation must be based on the property’s value at the time of actual taking. A void judgment never attains finality and can be assailed at any time.
Second, the Court upheld the use of DAR AO No. 6 (1992), as amended by AO No. 11 (1994), as the applicable formula. It rejected LBP’s belated shift to AO No. 2 (2009). The Court found that AO No. 2 (2009) was intended for lands acquired under the CARP extension law (R.A. No. 9700) and was not retroactively applicable to properties taken in 1993. LBP’s sudden change of theory, after consistently advocating for AO No. 6 throughout the litigation, constituted bad faith and a violation of due process. The CA, in its Report on remand, correctly applied the factors under AO No. 6, as amended, considering the property’s nature, location near economic zones, and the non-compliance of DAR and LBP with mandatory acquisition procedures. The provisional cash payment ordered was affirmed as an immediate relief, subject to the final computation by the CA.