GR 175422; (March, 2009) (Digest)
G.R. No. 175422, March 13, 2009
Allied Banking Corporation, Petitioner, vs. The Land Bank of the Philippines and the Secretary of the Department of Agrarian Reform, Respondents.
FACTS
Petitioner Allied Banking Corporation owned two abutting parcels of land in Mabiga, Hermosa, Bataan, compulsorily acquired by the Department of Agrarian Reform (DAR) under the Comprehensive Agrarian Reform Law. The Land Bank of the Philippines (Landbank), using the formula under DAR Administrative Orders, initially valued the lands at approximately ₱57,151.12 and ₱66,735.13 per hectare. Allied rejected this valuation, insisting on ₱180,000.00 per hectare. After the Provincial Agrarian Reform Adjudicator upheld Landbank’s valuation, Allied filed a Petition for Just Compensation with the Regional Trial Court (RTC) acting as a Special Agrarian Court. The RTC appointed commissioners. Only the commissioner nominated by Allied submitted a report, which used the “Market Data Approach” and valued the lands at ₱15.00 per square meter (₱150,000.00 per hectare). The RTC adopted this valuation in its decision. Landbank and DAR appealed. The Court of Appeals nullified the RTC Decision and remanded the case, finding that the RTC failed to observe basic procedural rules and fundamental requirements in determining just compensation, such as relying solely on one commissioner’s unsubstantiated report and using a valuation method not sanctioned by pertinent DAR administrative orders.
ISSUE
Whether the Court of Appeals erred in annulling the RTC Decision and remanding the case for the proper determination of just compensation.
RULING
No, the Court of Appeals did not err. The Supreme Court affirmed the Court of Appeals’ decision. The RTC, acting as a Special Agrarian Court, is not bound by the valuation formulae of the DAR administrative orders, as these are merely mandatory initial guidelines. However, in determining just compensation, the RTC is strictly required to consider the factors enumerated in Section 17 of Republic Act No. 6657 and to explain its basis, especially when it deviates from the DAR formula. The RTC’s decision in this case was flawed because it relied solely on the ex parte report of Allied’s nominated commissioner without considering the required factors under Section 17. The report itself was not supported by competent evidence and used a “Market Data Approach” based on listings and opinions, not actual sales data. Furthermore, the other nominated commissioners failed to submit their reports without explanation, and there was no showing that Landbank and DAR were notified of the filing of Allied’s commissioner’s report, depriving them of the opportunity to object. Therefore, the case was correctly remanded to the RTC for the proper determination of just compensation in strict compliance with the law and the Rules of Court.