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PHILIPPINE VETERANS BANK, PETITIONER, VS. BASES CONVERSION AND DEVELOPMENT AUTHORITY, MARCELO SAGUN, AND EDNER SAGUN, RESPONDENTS.
FACTS
The subject properties, originally owned by Belmonte Agro-Industrial Development Corporation (BAIDECO), were mortgaged to Philippine Veterans Bank (PVB) in 1976. PVB foreclosed and bought them at auction in 1982. Subsequently, the properties were placed under the coverage of the Comprehensive Agrarian Reform Program (CARP) and distributed to farmer-beneficiaries Marcelo Sagun and Edner Sagun (the Saguns). The Land Bank of the Philippines (LBP) deposited advance payments, and CLOAs and TCTs were issued in the Saguns’ names in 2001 without prior notice to PVB. PVB later discovered this and filed, then withdrew, a case for nullity of the titles. PVB also filed a petition for determination of just compensation under CARP. Meanwhile, in 2003, the Bases Conversion and Development Authority (BCDA) instituted expropriation proceedings for the Subic-Clark-Tarlac Expressway (SCTEX) project covering the same properties, now registered in the Saguns’ names. The Saguns were declared in default, and a Writ of Possession was issued. PVB intervened in these expropriation cases. The Regional Trial Court (RTC) ruled that BCDA had a lawful right to expropriate and ordered it to pay just compensation directly to the Saguns (after satisfying LBP’s mortgage lien), not to PVB. The Court of Appeals affirmed this decision.
ISSUE
Whether the RTC and the CA erred in awarding the just compensation for the expropriated properties to the Saguns instead of to PVB.
RULING
No. The Supreme Court affirmed the award of just compensation to the Saguns. The Court held that the issuance of the CLOAs and TCTs to the Saguns, despite procedural lapses and lack of notice to PVB, transferred ownership to them as farmer-beneficiaries under the CARP. The CARP’s primary purpose is to award land to landless farmers, and ownership is vested upon the issuance of the CLOA. Therefore, at the time of the SCTEX expropriation in 2003, the Saguns were already the registered owners of the properties. Consequently, as the owners at the time of the taking, they are entitled to the just compensation for the expropriation. PVB’s remedy lies in pursuing its claim for the correct just compensation value through the proper CARP proceedings against the DAR and LBP, not in claiming the payment from BCDA. The Court also modified the interest rate on the just compensation to be 6% per annum from April 20, 2004, until full payment.
