GR 215234; (June, 2020) (Digest)
G.R. No. 215234, June 23, 2020
Land Bank of the Philippines, Petitioner, vs. Spouses Juancho and Myrna Nasser, Respondents.
FACTS
Spouses Juancho and Myrna Nasser owned a 3.8885-hectare parcel of land planted with coconut trees and 7-year-old mahogany trees. The property was placed under CARP coverage on May 10, 1999, and the respondents voluntarily offered to sell. Petitioner Land Bank initially valued the land at P181,177.04 using the formula LV = (MV x 0.1) + (CNI x 0.9) + CDC. Respondents rejected this valuation. The DARAB Regional Adjudicator initially sustained Land Bank’s valuation but later, in a Decision dated October 15, 2001, adjusted the just compensation to P1,645,586.89 using the formula LV = (CNI x 0.9) + (MV x 0.1) for the coconut land and again LV = (CNI x 0.9) + (MV x 0.1) for the mahogany trees, in the absence of Comparable Sales. The RTC-SAC upheld this valuation. The Court of Appeals affirmed the RTC-SAC, ruling that the Capitalized Net Income (CNI) factor, not the Cumulative Development Cost (CDC), was applicable for the mahogany trees intercropped with coconuts, as CDC under DAR A.O. No. 5 (1998) applies only to permanent or fruit-bearing crops. Land Bank filed this petition, insisting its formula using CDC was correct.
ISSUE
Is the valuation of just compensation by the Court of Appeals proper?
RULING
Yes. The Supreme Court denied the petition and affirmed the CA Decision and Resolution. The determination of just compensation is a judicial function guided by Section 17 of R.A. No. 6657 and the formulae in DAR A.O. No. 5 (1998). The Court held that Land Bank’s proposed formula LV = (CNI x 0.90) + (MV x 0.10) + CDC is not sanctioned by DAR A.O. No. 5 (1998). Using the CDC variable to represent the mahogany trees alone disregards the value of the land on which they are planted. The applicable formulae, in the absence of Comparable Sales, are LV = (CNI x 0.90) + (MV x 0.10) for the coconut land plus LV = (CNI x 0.90) + (MV x 0.10) for the property with standing mahogany trees, as correctly applied by the lower courts. Joint Memorandum Circular No. 11, series of 2003, cited by Land Bank, is inapplicable because the Memorandum of Valuation was forwarded to DAR prior to its effectivity. The just compensation of P1,645,586.89 shall earn legal interest from the time of taking at 12% per annum until June 30, 2013, and 6% per annum thereafter until full payment.