GR 184719; (March, 2012) (Digest)
G.R. No. 184719-20, March 21, 2012
LAND BANK OF THE PHILIPPINES and DEPARTMENT OF AGRARIAN REFORM, Petitioners, vs. HEIRS OF JESUS S. YUJUICO, MARIETTA V. YUJUICO AND DR. NICOLAS VALISNO, SR., Respondents.
FACTS
Respondents were the registered owners of eight parcels of agricultural land in Nueva Ecija. The Department of Agrarian Reform (DAR) placed portions of the property under the Operation Land Transfer (OLT) program of Presidential Decree No. 27 and other portions under the Comprehensive Agrarian Reform Law (CARL). The Land Bank of the Philippines (LBP) offered ₱2,422,883.88 as total compensation. Dissatisfied, respondents filed a complaint for determination of just compensation before the DAR Adjudication Board but later filed a similar complaint before the Regional Trial Court (RTC) sitting as a Special Agrarian Court (SAC). The RTC fixed just compensation at ₱150,000 per hectare for all lands, irrespective of the law covering them. The Court of Appeals affirmed this valuation. Petitioners LBP and DAR assailed the decision, arguing the RTC erred in not applying the specific valuation formulas under PD 27 and the CARL.
ISSUE
Whether the RTC, as a Special Agrarian Court, correctly determined just compensation by disregarding the formula-based frameworks under PD 27/EO 228 and the CARL and setting a uniform rate of ₱150,000 per hectare.
RULING
The Supreme Court granted the petitions and remanded the case to the SAC for proper determination of just compensation. The Court held that while the RTC, acting as a SAC, has original and exclusive jurisdiction to determine just compensation, it is not freed from the duty to consider the factors and guidelines provided by law. For lands covered under PD 27 and EO 228, the formula (Average Gross Production x 2.5 x Government Support Price) is mandatory as a starting point. For lands covered under the CARL, the factors enumerated in Section 17 of RA 6657 and the formulas in pertinent DAR administrative orders must be applied as guiding principles. The RTC’s uniform valuation of ₱150,000 per hectare, made without reference to these legal parameters and without explaining its factual basis (e.g., evidence on the land’s nature, use, income, and comparable sales), constituted a reversible error. The Court emphasized that just compensation must be based on all statutory criteria and supported by substantial evidence, not merely an arbitrary figure. The case was remanded to the SAC for reception of evidence and recalculation of just compensation in strict accordance with the governing laws for each landholding.