G.R. No. 188670 ; March 7, 2012
DEPARTMENT OF AGRARIAN REFREFORM, represented by OIC-Secretary JOSE MARI B. PONCE, now by Secretary NASSER C. PANGANDAMAN, Petitioner, vs. HEIRS OF ANGEL T. DOMINGO, Respondents.

FACTS

The late Angel T. Domingo owned a 70.3420-hectare rice land in Nueva Ecija. Pursuant to Presidential Decree No. 27 (P.D. No. 27), 34.9128 hectares were placed under the land transfer program and awarded to tenant farmers, with Emancipation Patents issued on various dates from 1988 to 2001. Domingo filed a complaint for determination of just compensation, arguing valuation should follow Republic Act No. 6657 (Comprehensive Agrarian Reform Law) at not less than ₱150,000.00 per hectare. The Land Bank of the Philippines (LBP) and the Department of Agrarian Reform (DAR) countered that P.D. No. 27 and Executive Order No. 228 (E.O. No. 228) governed, using a formula based on a fixed 1972 government support price, valuing the land at ₱459,091.60.
The Regional Trial Court (RTC), acting as a Special Agrarian Court, fixed compensation at ₱3,709,999.49. It applied the P.D. No. 27/E.O. No. 228 formula but used the government support price at the time of each patent’s issuance and added a 6% annual compounding interest, later deleted on reconsideration. The Court of Appeals (CA) affirmed the RTC’s authority to determine compensation but remanded the case for recomputation, directing the application of R.A. No. 6657 ’s factors and the formula from DAR Administrative Order No. 05, Series of 1998.

ISSUE

Whether the Court of Appeals erred in ruling that just compensation for lands taken under P.D. No. 27 should be computed in accordance with R.A. No. 6657 and its implementing guidelines, rather than solely under the formula provided in P.D. No. 27 and E.O. No. 228.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic is anchored on the principle that just compensation must be the full and fair equivalent of the property taken at the time of its taking. While the taking of the land was initiated under P.D. No. 27, the issuance of the Emancipation Patents, which conferred ownership to the farmer-beneficiaries, constituted the actual taking for which compensation is due. Since these patents were issued years after the effectivity of R.A. No. 6657 in 1988, the just compensation should be determined pursuant to this later law.
R.A. No. 6657 provides a more comprehensive framework for valuation, considering factors like the land’s cost, current value, nature, actual use, income, and sworn valuation, as outlined in its Section 17. The Court has consistently held in jurisprudence, such as Lubrica v. Land Bank of the Philippines and Land Bank of the Philippines v. Celada, that for properties where the process of acquisition and valuation remains pending after R.A. No. 6657 ’s effectivity, the just compensation must adhere to its provisions and the formula in DAR Administrative Order No. 05, Series of 1998. This ensures the compensation reflects the land’s value at the time of actual taking, not an outdated 1972 benchmark, thereby upholding constitutional guarantees. The remand to the RTC for proper computation using this standard was therefore correct.