G.R. No. 210105, September 2, 2019
LAND BANK OF THE PHILIPPINES, PETITIONER, VS. MA. AURORA [RITA] DEL ROSARIO AND IRENE DEL ROSARIO, RESPONDENTS.

FACTS

Respondents Ma. Aurora and Irene del Rosario owned a 39.1248-hectare agricultural land in Ligao City, Albay. In October 2000, a team recommended placing 36.3168 hectares under the Comprehensive Agrarian Reform Program (CARP). On October 5, 2001, petitioner Land Bank of the Philippines (Land Bank) received the Claim Folder from the Department of Agrarian Reform (DAR) and appraised the property at Php34,994.36 per hectare under DAR Administrative Order (AO) No. 5, series of 1998, but applied this only to 33.5017 hectares, deducting a 2.8151-hectare legal easement. The DAR offered Php1,172,369.21 as just compensation, which respondents rejected. The Provincial Agrarian Reform Adjudicator (PARAD) fixed just compensation at Php6,766,000.00. Land Bank filed a petition before the Regional Trial Court (RTC), sitting as a Special Agrarian Court. The RTC fixed just compensation at Php3,829,514.29, applying DAR AO No. 2, series of 2009 and No. 1, series of 2010, and reckoning the time of taking as June 30, 2009 (the enactment of Republic Act No. 9700 or the CARPER Law). The Court of Appeals modified the decision, fixing just compensation at Php2,176,571.58, applying DAR AO No. 5, series of 1998, and reckoning the time of taking as 2001. Land Bank appealed, contesting the valuation of copra produce and the imposition of interest.

ISSUE

Did the Court of Appeals err when it computed the amount of just compensation for the property at Php2,176,571.58, plus twelve percent (12%) interest per annum?

RULING

The petition is partly meritorious. The Supreme Court modified the Court of Appeals’ decision. It held that the time of taking was November 26, 2001, when the title was transferred to the Republic, making Republic Act No. 6657 (prior to its amendment by Republic Act No. 9700) and DAR AO No. 5, series of 1998 applicable. The Court corrected the computation of the average selling price of copra, using the six-year average from 1998-2003 (Php1,195.45 per 100 kilos) as upheld by the Court of Appeals, but adjusted other components. It computed just compensation using the formula: Land Value = (Capitalized Net Income x 90%) + (Market Value per Tax Declaration x 10%). The Capitalized Net Income was derived from (Annual Gross Production x Average Selling Price x Net Income Rate). Using the data: Annual Gross Production of 975 kilos/hectare, Average Selling Price of Php1,195.45/100 kilos (Php11.9545/kilo), and Net Income Rate of 70%, the CNI per hectare was Php8,157.74. The Market Value per Tax Declaration was Php31,560.00 per hectare. The Land Value per hectare was (Php8,157.74 x 0.9) + (Php31,560.00 x 0.1) = Php10,857.97. For 33.5017 hectares (excluding the legal easement), the total Land Value was Php363,730.21. Adding the value of standing trees (Php61,025.00) and the 10% increment under DAR AO No. 5, series of 1998, the total just compensation was Php1,310,563.37. The Court affirmed the imposition of legal interest on the balance of Php138,194.16 (after deducting the provisional payment of Php1,172,369.21) at twelve percent (12%) per annum from November 26, 2001 until June 30, 2013, and six percent (6%) per annum from July 1, 2013 until full payment.