G.R. No. 210422. September 07, 2022
LAND BANK OF THE PHILIPPINES, PETITIONER, VS. SPOUSES LYDIA G. CORTEZ AND CARLOS CORTEZ, RESPONDENTS.

FACTS

Respondent spouses owned a 16.5415-hectare coconut land in Albay. In 2000, they offered it for acquisition under the Comprehensive Agrarian Reform Program (CARP). After a field investigation, 6.0004 hectares were deemed suitable for compulsory acquisition. The Land Bank of the Philippines (LBP), using the formula in DAR Administrative Order (AO) No. 5, Series of 1998, valued the land at P106,542.98 based on production data and selling prices circa the year 2000. The spouses rejected this valuation.
The case was elevated to the Regional Trial Court (RTC), sitting as a Special Agrarian Court. The RTC, while also applying the AO No. 5 formula, modified the valuation by using June 30, 2009 as the presumptive date of taking for reckoning the Annual Gross Production (AGP) and Selling Price (SP), as suggested under a later issuance, DAR AO No. 1, Series of 2010. Using this later date, which reflected higher market values, the RTC fixed just compensation at P397,958.41. The Court of Appeals affirmed this decision.

ISSUE

Whether the RTC, in determining just compensation, correctly used June 30, 2009 as the reckoning date for production and price data instead of the dates prescribed under DAR AO No. 5, Series of 1998.

RULING

The Supreme Court ruled in the negative, reversed the assailed decisions, and remanded the case to the RTC for proper recomputation. The legal logic is anchored on the proper application of the law and relevant administrative issuances governing the date of taking for CARP coverage.
The Court held that the date of taking, which triggers the right to just compensation, is the time when the landowner was deprived of ownership and control over the property. Records show the property was transferred to the Republic via a new title on January 15, 2002. Therefore, the date of taking was January 15, 2002, not June 30, 2009. The RTC erred in applying the reckoning date under AO No. 1, Series of 2010, as that administrative order applies specifically to lands covered by the CARP extension under Republic Act No. 9700, which took effect only in 2009. The subject land was covered under the original CARP law (RA 6657) via a notice of coverage issued in 2000, long before the effectivity of RA 9700.
Consequently, the applicable formula and governing rules at the time of taking were those under DAR AO No. 5, Series of 1998. This order provides specific reckoning dates: the AGP should be based on the 12-month period preceding the date of field investigation (April 2000), and the SP should be based on the average for the calendar year preceding the date of receipt of the claim folder by LBP (September 2001). The RTC’s use of 2009 data was therefore baseless and constituted a reversible error. Just compensation must be determined as of the time of taking, not at a later, more advantageous date for the landowner.