GR 187307; (October, 2020) (Digest)
G.R. No. 187307, October 14, 2020
LAND BANK OF THE PHILIPPINES, PETITIONER, VS. DEL MORAL, INC., RESPONDENT.
FACTS
Respondent Del Moral, Inc. owned 125.2717 hectares of land in Pangasinan, of which 102.9766 hectares were placed under the agrarian reform program under Presidential Decree No. 27 in 1972. The Department of Agrarian Reform (DAR), pursuant to Executive Order No. 228, computed just compensation at P342,917.81, which Land Bank of the Philippines (LBP) informed Del Moral of in 1992. Del Moral rejected this valuation as grossly inadequate.
Del Moral filed a petition for determination of just compensation before the Regional Trial Court (RTC), sitting as a Special Agrarian Court (SAC). The RTC, in 2006, computed just compensation based on the property’s fair market value at the time of its decision, applying DAR Administrative Order No. 5, Series of 1998, and arrived at P216,104,385.00. It also awarded damages. Both the DAR and LBP appealed to the Court of Appeals (CA). The CA, in a related case involving the DAR, affirmed the RTC’s computation method but reduced the damages. The DAR’s petition to the Supreme Court was denied for procedural defects.
ISSUE
Whether the Special Agrarian Court correctly computed just compensation based on the fair market value of the property at the time of payment, rather than its value at the time of taking in 1972.
RULING
Yes. The Supreme Court denied LBP’s petition and affirmed the CA’s decision. The legal logic centers on the application of the principle that just compensation must be equivalent to the full and fair equivalent of the property taken from its owner. Citing established jurisprudence, such as Land Bank of the Philippines v. Natividad and Lubrica v. Land Bank of the Philippines, the Court held that when there is a significant delay between the taking of the property and the actual payment of just compensation, it is inequitable to peg the value at the time of taking.
The taking occurred in 1972 under P.D. No. 27, but the compensation process remained incomplete and unresolved for decades. The initial valuation by the DAR was deposited only in 1992, and judicial determination occurred over 30 years after the taking. This constituted an unreasonable delay. Therefore, to fulfill the constitutional guarantee of just compensation, the valuation must reflect the current and fair market value at the time of payment to adequately indemnify the landowner. The SAC correctly applied the formula under the Comprehensive Agrarian Reform Law (R.A. No. 6657) and prevailing administrative orders, as the agrarian process was still ongoing when the law took effect. The computation based on contemporary values rectifies the injustice caused by the prolonged deprivation.