G.R. No. 213863 & G.R. No. 214021, January 27, 2016
LAND BANK OF THE PHILIPPINES, Petitioner, vs. EDGARDO L. SANTOS, represented by his assignee, ROMEO L. SANTOS, Respondent. (Consolidated Cases)

FACTS

Edgardo L. Santos owned three parcels of agricultural land in Camarines Sur placed under the Operation Land Transfer Program in 1984 pursuant to P.D. No. 27. The Department of Agrarian Reform (DAR) fixed the just compensation using the formula under E.O. No. 228. Santos received the initial valuation for Land 3 but the Land Bank of the Philippines (LBP) withheld payment for Lands 1 and 2 pending submission of certificates of title, as they were discovered to be covered by decrees in another’s name. Dissatisfied with the valuation, Santos filed administrative cases before the Provincial Agrarian Reform Adjudicator (PARAD), which fixed higher compensation using a different government support price for corn. Santos accepted the valuations for Lands 2 and 3. The LBP filed complaints for determination of just compensation before the Regional Trial Court (RTC), acting as a Special Agrarian Court (SAC). The RTC initially dismissed the complaints, but the Court of Appeals remanded the cases. Santos moved for the release of the initial valuation for Lands 1 and 2. The RTC granted the motion, ordering release upon Santos’ submission of specific documents (valid IDs, pictures, community tax certificate, and a Deed of Assignment), rejecting LBP’s additional requirements like proof of ownership and tax clearance. The LBP complied under protest. Subsequently, the RTC directed the LBP to revalue all lands under R.A. No. 6657 . The LBP submitted a recomputed valuation, which Santos accepted. For Land 3, the RTC issued a judgment adopting the LBP’s revaluation. Santos moved for reconsideration, seeking 12% interest from the time of taking in 1972. The RTC modified its order, awarding 12% interest on the unpaid balance for Land 3 from January 1, 2010, until full payment, reasoning that the revaluation already included the 6% annual incremental interest mandated for P.D. No. 27 lands up to December 31, 2009. Both parties assailed the CA’s affirmance of the RTC’s orders.

ISSUE

1. Whether the RTC acted without jurisdiction or with grave abuse of discretion in ordering the release of the initial valuation for Lands 1 and 2 to Santos upon submission of specified documents, overriding the LBP’s additional documentary requirements.
2. Whether the RTC correctly imposed a 12% per annum interest on the unpaid just compensation for Land 3, reckoned from January 1, 2010.

RULING

1. On the release of initial valuation: The Supreme Court upheld the RTC’s orders. The LBP’s duty to release the initial valuation due to a landowner is ministerial once the DAR has made its determination. The RTC did not act without jurisdiction, as the SAC has original and exclusive jurisdiction over all petitions for the determination of just compensation. The RTC did not gravely abuse its discretion in limiting the requirements to those specified in its order (IDs, pictures, tax certificate, and Deed of Assignment), as these were sufficient to establish Santos’ identity and effect the transfer. The LBP’s additional demands (proof of ownership via title surrender and tax clearance) were correctly deemed unnecessary for the release of the initial valuation, as ownership was not in serious dispute—the LBP itself had admitted in its petitions that Santos was the owner of the untitled lands. The release was without prejudice to the final determination of just compensation.
2. On the imposition of interest: The Supreme Court modified the CA’s decision. The award of 12% interest on the unpaid just compensation for Land 3 was proper. However, the reckoning date should be the time of “taking” or the date when the landowner was deprived of the property. For lands acquired under P.D. No. 27, “taking” occurs when the land is placed under the agrarian reform program and possession is transferred to the farmer-beneficiary. In this case, the taking happened in 1984. Therefore, the 12% interest should be imposed on the total just compensation (P1,155,223.41) from 1984 until full payment. The RTC and CA erred in reckoning interest only from January 1, 2010. The Court clarified that the 6% annual incremental interest prescribed for P.D. No. 27 valuations is distinct from, and should not bar, the imposition of the 12% legal interest for the delay in payment of the final just compensation as determined by the courts. The initial valuation paid (P46,781.58) should be deducted from the principal amount due, and the 12% interest should run on the remaining unpaid balance.
The consolidated petitions were PARTIALLY GRANTED. The RTC’s orders for the release of initial valuation were affirmed. The imposition of 12% interest on the just compensation for Land 3 was upheld, but the interest is to be computed from 1984, the time of taking, until full payment.