G.R. No. 221890 , December 10, 2019
Land Bank of the Philippines, Petitioner, v. Heirs of Spouses Eustaquio and Petra Sambas, Respondents.

FACTS

The subject properties are two parcels of land owned by the respondents, with areas of 10.3668 and 11.0763 hectares, covered by CARP. The respondents offered the land at P150,000 per hectare. The petitioner, Land Bank of the Philippines, valued the properties at P508,943.41 and P547,156.72, respectively, which the respondents refused. The petitioner deposited this amount. After a summary administrative proceeding adopted the petitioner’s valuation, the respondents filed a petition for determination of just compensation before the RTC-SAC, seeking a valuation of P80,000 to P140,000 per hectare based on comparable properties. The petitioner countered with a valuation of P49,000 per hectare. The RTC-SAC, in a Decision dated September 29, 2008, fixed just compensation at P80,000 per hectare, considering the petitioner’s valuation as a starting point and other factors like the nature of the land and comparable sales. The petitioner’s motion for reconsideration was denied. The petitioner elevated the case to the CA via a petition for review. The CA, in its Decision dated January 23, 2015, reversed the RTC-SAC and remanded the case for proper determination of just compensation, finding both the petitioner’s and the RTC-SAC’s valuations flawed. The CA faulted the petitioner for using only the Capitalized Net Income (CNI) formula and the RTC-SAC for using a different formula than that prescribed under DAR Administrative Order No. 5, series of 1998. The CA’s resolution denying reconsideration was dated December 3, 2015. The petitioner filed the instant petition, contending the CA erred in remanding the case.

ISSUE

Which valuation shall prevail — that assessed by the RTC-SAC or that of the petitioner?

RULING

The Supreme Court DENIED the petition and AFFIRMED the CA Decision and Resolution remanding the case to the RTC-SAC. The Court held that both the petitioner’s and the RTC-SAC’s valuations were deficient. The petitioner failed to prove the accuracy of the factors used in computing the CNI, particularly as the Field Investigation Report did not precisely reflect the Average Gross Production because the investigator did not make an actual headcount of coconut trees. Conversely, the RTC-SAC’s valuation of P80,000 per hectare could not be sanctioned because it failed to sufficiently explain its deviation from the formula prescribed under DAR Administrative Order No. 5, series of 1998. While courts may depart from the DAR formula, they must clearly explain the reasons for such deviation. The RTC-SAC merely relied on the properties’ proximity to the provincial capitol, their nature, and data from the petitioner without such justification. Therefore, the remand to the RTC-SAC for proper determination of just compensation in accordance with Section 17 of Republic Act No. 6657 and DAR Administrative Order No. 5, series of 1998, with the assistance of commissioners, was deemed proper.