G.R. No. 177190 ; February 23, 2011
LAND BANK OF THE PHILIPPINES, Petitioner, vs. HON. ERNESTO P. PAGAYATAN, in his capacity as Presiding Judge of the Regional Trial Court, Branch 46, San Jose, Occidental Mindoro; and JOSEFINA S. LUBRICA, in her capacity as Assignee of Federico Suntay, Respondents.

FACTS

A portion (300 hectares) of the 3,682.0286-hectare Suntay Estate in Sablayan, Occidental Mindoro, originally placed under Presidential Decree No. 27’s Operation Land Transfer, was instead subjected to the Comprehensive Agrarian Reform Program (CARP). Certificates of Landownership Award were issued to farmer-beneficiaries. The landowner’s assignee, Josefina S. Lubrica, filed a Petition for Summary Determination of Just Compensation with the Provincial Agrarian Reform Adjudicator (PARAD) due to non-payment. The PARAD fixed preliminary just compensation at PhP 166,150.00 per hectare, totaling PhP 71,634,027.30, and directed Land Bank of the Philippines (LBP) to pay said amount. LBP’s motion for reconsideration was denied.
LBP appealed to the Regional Trial Court (RTC), acting as a Special Agrarian Court, arguing the petition was premature pending G.R. No. 108920 (involving the propriety of CARP coverage), and that the PARAD could only award up to PhP 5 million. LBP also contended it could not process payment as the necessary claim folder from the Department of Agrarian Reform (DAR) was not submitted. Lubrica filed a Motion to Deposit the Preliminary Valuation under Section 16(e) of Republic Act No. 6657 . The RTC granted the motion, ordering LBP to deposit the PARAD-determined amount. LBP’s omnibus motion for reconsideration, to implead DAR, and to issue summons was denied. The Court of Appeals affirmed the RTC’s orders. LBP elevated the case via Petition for Review on Certiorari.

ISSUE

What is the proper amount to be deposited under Section 16 of Republic Act No. 6657 ? Is it the PARAD/DARAB determined valuation or the preliminary valuation as determined by the DAR/LBP?

RULING

The Supreme Court granted the petition. The proper amount to be deposited under Section 16(e) of R.A. No. 6657 is the preliminary valuation determined by the DAR and LBP, not the valuation fixed by the PARAD in an administrative proceeding. The Court held that the deposit requirement is triggered by the government’s taking of the property for agrarian reform, which occurs when the DAR takes possession pursuant to its acquisition process under Sections 16(a) to (d) of the law. This process involves the DAR’s issuance of a notice of coverage, land valuation by the LBP, and an offer to the landowner. The amount to be deposited is the value offered by the DAR and LBP as stated in the notice sent to the landowner. The PARAD’s valuation in a summary administrative proceeding is not the “provisional” or “preliminary” compensation contemplated by Section 16(e) for deposit. The Court annulled and set aside the PARAD Decision dated March 21, 2003 and the RTC Order dated March 4, 2005. The RTC was directed to determine just compensation in accordance with applicable laws and formulas. The DAR and LBP were ordered to determine the initial valuation and deposit it within three months from finality of the decision. The Court also ruled that the principles of res judicata and stare decisis did not apply, as there was no identity of parties or causes of action with a prior case (Lubrica v. Land Bank) cited by the respondent.