GR 197674; (September, 2020) (Digest)
G.R. No. 197674 September 23, 2020
Land Bank of the Philippines, Petitioner, vs. Esperanza M. Esteban, Respondent.
FACTS
Respondent Esperanza M. Esteban voluntarily offered to sell her untitled 6.1833-hectare land to the Department of Agrarian Reform (DAR) under the Comprehensive Agrarian Reform Program (CARP) for P370,998.00. Petitioner Land Bank of the Philippines (LBP), the financial intermediary for CARP, valued the land at P76,026.27 using a formula (LV = MV x 2). Respondent rejected this valuation and filed a Petition for judicial determination of just compensation with the Regional Trial Court (RTC). The RTC constituted a Board of Commissioners, which recommended a valuation of P267,907.88. The RTC fixed just compensation at this amount. LBP appealed, arguing the RTC violated the DAR Administrative Order formula. The Court of Appeals affirmed the RTC Decision, ruling the DAR formula is not mandatory and courts may exercise judicial discretion to set it aside. LBP filed the present Petition for Review on Certiorari.
ISSUE
Whether or not the Court of Appeals erred in affirming the Decision of the RTC which fixed just compensation at P267,907.83, deviating from the formula under DAR Administrative Order No. 5, series of 1998.
RULING
The Supreme Court DENIED the Petition. The Court ruled that while the factors in Section 17 of Republic Act No. 6657 and the resulting DAR formulas provide a uniform framework for computing just compensation and must be considered by courts, courts of law possess the power to make a final determination. Courts may, in the exercise of judicial discretion, relax the formula’s application when faced with situations that do not warrant its strict application, provided they clearly explain their reasons for the deviation based on the evidence on record. The Court found that the RTC’s valuation, based on the Board of Commissioners’ recommendation which considered the property’s location, land use, and current sale value of nearby properties, was a valid exercise of this judicial discretion.