G.R. No. 188243, January 24, 2018
Land Bank of the Philippines, Petitioner vs. Raul T. Manzano, et al., Respondents

FACTS

Respondents were the owners of four parcels of agricultural land in Basilan, with a total area of 88.5667 hectares planted with rubber trees, placed under the Comprehensive Agrarian Reform Program (CARP). They voluntarily offered their lands in 1998, proposing a selling price. Landbank, as the financial intermediary, made a counteroffer which respondents rejected. The matter was referred for administrative proceedings, and a revaluation was conducted, but respondents still found the valuation too low. They subsequently filed a petition for the determination of just compensation before the Regional Trial Court (RTC) sitting as a Special Agrarian Court (SAC).
The SAC rendered a decision fixing the just compensation. Landbank appealed to the Court of Appeals, which affirmed the SAC’s decision. During the pendency of its appeal, Landbank filed a motion for the execution of the SAC decision pending appeal, which the RTC granted. Landbank then partially complied with the writ of execution by depositing amounts with the court. It subsequently filed the present petition, challenging the SAC’s determination of just compensation and the grant of execution pending appeal.

ISSUE

The primary issues were: (1) whether the SAC correctly determined the just compensation for the subject lands; and (2) whether the RTC properly granted execution of the judgment pending appeal.

RULING

The Supreme Court denied the petition and affirmed the assailed judgments. On the first issue, the Court upheld the SAC’s determination of just compensation. It reiterated the settled doctrine that the determination of just compensation is a judicial function, and the RTC, acting as a SAC, has original and exclusive jurisdiction over such matters. The SAC is not bound by the valuation formulas issued by the Department of Agrarian Reform (DAR) but must consider them as guiding factors, alongside the specific criteria enumerated in Section 17 of Republic Act No. 6657. The Court found that the SAC correctly exercised its discretion by considering evidence on the lands’ nature, actual use, income, and sworn valuation, rather than relying solely on administrative formulas.
On the second issue, the Court ruled that the grant of execution pending appeal was proper. Execution pending appeal is allowed for good reasons under the Rules of Court. The Court found compelling reason in the government’s prolonged delay in paying just compensation for the expropriated lands, which amounted to a deprivation of property without due process. Allowing execution would prevent further prejudice to the landowners. Furthermore, the Court affirmed the imposition of legal interest on the just compensation at the rate of twelve percent (12%) per annum from the time of taking until June 30, 2013, and six percent (6%) per annum from July 1, 2013, until full payment. This interest is not for forbearance of money but is in the nature of damages for the delay in payment, which effectively deprived the landowners of their property and the income it could have generated.