LBP vs Puyat

LAND BANK OFTHE PHILIPPINES, Petitioner,
vs.
Heirs of MAXIMO PUYAT and GLORIA PUYAT, represented by

Attorney-in-Fact Marissa Puyat, Respondent.

G.R. No. 175055               June 27, 2012

(Supreme Court, First Division)

Facts:

Gloria and Maximo Puyat (deceased) owns a parcel of riceland consisting of 46.8731 hectares. The said land was subjected to acquisition pursuant to PD 27 but the records does not show when the DAR acquired the same. Sometime in December 1989 DAR then, issued several emancipation patents in favor of various farm-beneficiaries. The Puyat's however, did not receive any compensation for the acquisition.

Sometime in September 1992 LBP received DAR's instruction to pay the just compensation to the Puyats. The LBP made its evaluation, but the heirs of the Puyat rejected the valuation and filed a complaint for determination of just compensation with the RTC. The following are the valuation of the property:

1. LBP = P 92,752.10 @ P 2,012.50 per hectare (in compliance with the formula under PD 27 and EO 228. LBP also contended that the valuation should be done at the time of the taking (1976));

2. RTC = P 4,430,900.00 @ P 100,000.00 per hectare since 44.3090 hectares were distributed to farmer-beneficiaries  and 6% legal interest from the date of taking until the amount is fully paid (due to delay in payment);

3. CA = same as RTC but modified the legal interest not from 1990 but from March 20, 1990 for precision.

Issue:

• Whether or not lands acquired pursuant to PD 27 be valued using the factors in Sec. 17 of RA 6657.

• Whether or not the 6% legal interest proper in this case.

Held:

RA 6657 should govern, in catena of decided cases of the Supreme Court it has been held that, when the government takes property pursuant to PD 27, but does not pay the landowner his just compensation until after the affectivity of RA 6657, it becomes more equitable to determine the just compensation using RA 6657.

The SC finds that there is no need to disturb the legal interest issue since there is no current jurisprudence to substantiate such change, and the respondents (Heirs of Maximo and Gloria Puyat) did not contest the interest awarded by the lower courts.

Thus, there is no need to remand the case to the lower court for the determination of just compensation, during the pendency of the case, Congress enacted RA 9700 further amending RA 6657, the amendment provides:

Sec. 7. The DAR in coordination with the PARC shall plan and program the final acquisition and distribution of all remaining unacquired and undistributed agricultural lands from the effectivity of this Act until June 30, 2014. Lands shall be acquired and distributed as follows:

xxxxx

 ...that all previously acquired lands wherein valuation is subject to challenge by landowners shall be completed and finally resolved pursuant to Sec. 17 of RA 665...

xxxx

That the just compensation has already been computed pursuant to Sec. 17 of RA 6657 by the CA.

LBP vs Montinola-Escarilla

LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
MONTINOLA-ESCARILLA and CO., INC., Respondent.

G.R. No. 178046               June 13, 2012

(Supreme Court, Third Division)

Facts:

This is a Petition for Review on Certiorari assailing the August 18, 2006 Decision and May 18, 2007 Resolution of the Court of Appeals (CA) in     CA-G.R. SP No. 75133, which set aside the October 8, 2002 Decision of the Regional Trial Court of Bayugan, Agusan del Sur, Branch 7 (RTC) and rendered a new judgment fixing the just compensation due to respondent at P4,615,194.00 and deleting the award of attorney's fees.

Respondent, Montinola-Escarilla and Co., Inc., (MECO) is the owner of a parcel of agricultural land covered by OCT No. T-70 with an area of 159.0881 hectares was acquired by the government under RA 6657. LBP initially valued the subject land at P 823,204.08 but MECO rejected the valuation. Pending summary administrative proceedings for determination of just compensation before the RARAD, MECO filed a complaint for determination of just compensation before the RTC which appointed 4 Board of Commissioners (BOC) to evaluate and appraise the just compensation for the subject property covering 4.4825 hectares of rainfed rice land and 154.6056 hectares of idle land. Then the RARAD rendered a decision fixing the just compensation at P 823,204.08. The BOC was not able to come up with a unified valuation of the subject property.

The just compensation of the property was fixed by the RTC at P 7,927,660.60 plus attorney's fee, they gave credence to the report submitted by Asian, though it did not follow its valuation, and instead fixed a lower value but nevertheless higher than those recommended by the BOC.

The CA in its ruling said that LBP did not consider all the factors in determining just compensation, and adopted the BOC's report and deleted the award of attorney's fee for being improper.

Hence, this petition.

Issue:

Whether or not in determining the proper just compensation for the subject (expropriated) property considered the factors set forth under Section 17 of R.A. No. 6657.

Held:

No, for determining just compensation, the fair market value of an expropriated property is determined by its character and price at the time of taking. The potential use of the expropriated property is only considered in cases where there is a great improvement in the general vicinity of the expropriated property, but should never control the determination of just compensation. it was erroneous to reclassify the acquired property into cornland and cocoland “based on plaintiff’s (MECO) evidence” considering that the improvements were introduced by the farmer-beneficiaries.

The Supreme Court set aside the assailed Decision and Resolution rendered by the CA.

NRI and EDIC vs DAR Sec Leong and Dir. Leano

EN BANC

[ G.R. No. 103302, August 12, 1993 ]

NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND INVESTORS CORP., PETITIONERS,

vs.

DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG AND DIR. WILFREDO LEANO, DAR-REGION IV, RESPONDENTS.

Facts:

This is a petition for certiorari, assailing the Notice of Coverage of the Department of Agrarian Reform over parcels of land already reserved as townsite areas before the enactment of the law.

Petitioner Natalia Realty, Inc. is the owner of a 125.0078-ha land set aside by Presidential Proclamation No. 1637 (1979) as townsite area for the Lungsod Silangan Reservation. Estate Developers and Investors Corporation (EDIC), the developer of the area, was granted preliminary approval and locational clearances by the then Human Settlements Regulatory Commission (HSRC) for the establishment of the Antipolo Hills Subdivision therein. In November 1990, a Notice of Coverage was issued by DAR on the undeveloped portion of the landholding. The developer filed its objections and filed this case imputing grave abuse of discretion to respondent DAR for including the undeveloped portions of its landholding within the coverage of CARP.

Issue:

·         Whether or not lands already classified for residential, commercial or industrial use, and approved by HLURB and its precursor agencies prior to 15 June 1988, are covered by RA 6657.

Held:

Sec. 4 of RA 6657 states that the CARL covers "regardless of tenurial arrangement and commodity produced, all public and private and agricultural lands" and as per the transcripts of the Constitutional Commission, "agricultural lands" covered by agrarian reform refers only to those which are "arable and suitable lands" and "do not include commercial, industrial and residential lands."

The land subject of the controversy has been set aside for the Lungsod Silangan Reservation by Proclamation No. 1637 prior to the effectivity of RA 6657 and in effect converted these lands into residential use. Since the Natalia lands were converted prior to 15 June 1988, DAR is bound by such conversion, and thus it was an error to include these within the coverage of CARL.

Exemptions and Exclusions

Sec. 10 of RA 6657, as amended by RA 7881 (1995), specifically enumerates the exemptions and exclusions from CARP, as follows:

a)         Lands actually, directly or exclusively used for parks and wild-life, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves (Rep. Act No. 6657 [1988], sec. 10 [a], as amended by Rep. Act No. 7881 [1995]).

b)         Private lands actually, directly and exclusively used for prawn farms and fishponds: Provided, That said prawn farms and fishponds have not been distributed and Certificate of Land Ownership Award (CLOA) issued to agrarian reform beneficiaries (ARBs) under CARP (Sec. 10 [b]).

c)         Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes, seeds and seedling research and pilot production center, church sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by the inmates, government and private research and quarantine centers and all lands with eighteen percent (18%) slope and over, except those already developed (Sec. 10 [c]).

Lands devoted to raising of livestock, swine and poultry. The Luz Farms Case. Before its amendment by RA 7881, Sec. 3(b) of RA 6657 included in its definition of agricultural activity the "raising of livestock, poultry or fish". Likewise, the original Sec. 11 of RA 6657 on commercial farming provided that "lands devoted to commercial livestock, poultry and swine raising shall be subject to compulsory acquisition within ten (10) years from the effectivity of the Act." However, the Supreme Court in Luz Farms vs. Secretary of Agrarian Reform, supra, held that Sec. 3 (b) and Sec. 11 of RA 6657 (along with Sec. 13 and 32) are unconstitutional in far as they include the raising of livestock and swine in the coverage of CARP.

The Supreme Court granted the Petition for Certiorari, and the Notice of Coverage of 22 November 1990 by virtue of which undeveloped portions of the Antipolo Hills Subdivision were placed under CARL coverage was set aside.