GR 213199; (March, 2019) (Digest)
G.R. No. 213199 March 27, 2019
LAND BANK OF THE PHILIPPINES, Petitioner vs. ESPERANZA BRIONES-BLANCO, ET AL., Respondents
FACTS
Respondents were co-owners of a 55.9729-hectare agricultural land in Misamis Occidental placed under compulsory agrarian reform coverage. The Department of Agrarian Reform (DAR) and petitioner Land Bank, applying the formula under DAR Administrative Order (AO) No. 5, series of 1998, valued the land at an average of about ₱1.80 per square meter. Dissatisfied, respondents filed a petition for judicial determination of just compensation before the Regional Trial Court (RTC), sitting as a Special Agrarian Court (SAC). A Board of Commissioners was constituted, but its members submitted divergent valuation reports.
The RTC fixed just compensation at ₱4.00 per square meter. In doing so, the trial court did not apply the DAR AO No. 5 formula but instead found a median of figures from the Agrarian Reform Operations Center, a private appraiser, and local brokers. The Court of Appeals affirmed the RTC decision, holding that strict adherence to the DAR formula was not mandatory and that relevant evidence and reasonable factors could be used.
ISSUE
Whether the RTC, acting as a Special Agrarian Court, erred in disregarding the valuation formula prescribed under DAR Administrative Order No. 5 in determining just compensation.
RULING
The Supreme Court ruled in favor of the petitioner, reversed the assailed CA decision, and remanded the case to the RTC for proper determination. The Court emphasized that while the determination of just compensation is a judicial function, courts are not at liberty to disregard the factors and formula laid down in Section 17 of Republic Act No. 6657 and the implementing DAR administrative orders.
The formula in DAR AO No. 5 provides a uniform framework to ensure that compensation is not arbitrary and aligns with agrarian reform objectives. Courts must consider these guidelines as they partake of the nature of statutes and carry a presumption of legality. Judicial discretion allows a relaxation of the formula’s strict application only when justified by the evidence on record, and any deviation must be clearly explained in the decision. Here, the RTC failed to explain its disregard of the statutory formula and merely averaged figures from sources without a clear factual or legal basis. Consequently, a remand was necessary for a proper determination anchored on the mandated factors and formula.