Land Bank of the Philippines v. Chua

THIRD DIVISION

[G.R. No. 204221. June 19, 2019.]

LAND BANK OF THE PHILIPPINES, petitioner, vs.NONALDO CHUA, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution datedJune 19, 2019, which reads as follows:

"G.R. No. 204221 (LAND BANK OF THE PHILIPPINES, petitioner v. NONALDO CHUA, respondent). — The final determination of the value of just compensation is vested in courts. Moreover, this Court will not disturb the factual findings of administrative agencies with the expertise on matters over which they have jurisdiction.

For this Court's resolution is the Petition for Review on Certiorari1 filed by Land Bank of the Philippines (Land Bank), assailing the Court of Appeals' October 11, 2012 Decision 2 in CA-G.R. SP No. 05595. The Court of Appeals affirmed the valuation of the disputed land as determined by the Regional Trial Court, Branch 46, Bacolod City, sitting as a Special Agrarian Court.

Nonaldo Chua (Chua) is the registered owner of a 49.2016-hectare property in Barangay Robles, La Castellana, Negros Occidental, which is covered by Transfer Certificate of Title No. T-122870. 3

In his September 28, 1999 letter to the Department of Agrarian Reform Secretary, Chua offered to sell his property for P350,000.00 per hectare for acquisition under the Comprehensive Agrarian Reform Program. Upon ocular inspection, Land Bank determined 48.6030 hectares for acquisition, 4 itemized as:

 

Land Usage	Area
Sugar Plantation	36.5098 Hec.
Ipil-ipil Plantation	11.5454 Hec.
Hacienda Road	0.5478 Hec.
	––––––––––––
	48.6030 Hec. 5

 

On November 16, 2000, Land Bank sent Chua a Notice of Land Valuation and Acquisition, valuing the property at P6,287,044.40: 6

 

Land Use	Area Per Hec.	Price Per Hec.	Total Land Value
Sugarland	36.5098	P158,207.10	P5,776,109.58
Ipil-ipil	11[.]5454	34,486.20	398,156.97
Had. Road	0.5478	158,207.10	86,655.85
Coco	.200 (150)	.085 (1.022)	26,112.00
	48,6030 hectares		P6,287,044.40 7

 

Chua rejected this offer. Proceedings then ensued before the Department of Agrarian Reform Adjudication Board to determine the amount of just compensation. 8

On January 16, 2001, Land Bank certified that P6,287,044.40 in cash and in Agrarian Reform Fund was deposited in Chua's favor as just compensation. 9

In its September 29, 2005 Decision, the Department of Agrarian Reform Adjudication Board valued Chua's land at P7,789,761.03. 10 The dispositive portion of the Decision read:

WHEREFORE, premises considered, the just compensation of the 48.6030 hectares CARP-acquired land is hereby fixed at SEVEN MILLION SEVEN HUNDRED EIGHTY NINE THOUSAND SEVEN HUNDRED SIXTY ONE AND 03/100 (P7,789,761.03) plus the market interest rates aligned with ninety one (91) days Treasury Bill rates as provided for by law.

xxx xxx xxx

The summary administrative proceedings for the determination of just compensation of the subject landholding is now declared CLOSED and TERMINATED. 11 (Emphasis in the original)

Land Bank sought reconsideration, arguing that the Department of Agrarian Reform Adjudication Board erred in appreciating 119.32 L kgs./ha. as Chua's annual gross production of sugar, rather than what was shown in the BISCOM Mill District Certification, 12 which indicated:

 

[Annual Gross Production of] Sugar (L kg./Ha.)

Crop Year	New Plant	Ratoon
1996-1997	87 to 92	80 to 87
1995-1996	86 to 90	82 to 87 13

 

Land Bank contended that the use of 119.32 L kgs./ha. as Chua's annual gross production erroneously increased the just compensation from P6,287,044.40 to P7,789,761.03. It averred that the BISCOM Mill District is in La Castellana, where Chua's property is located. 14

In an April 3, 2006 Resolution, the Department of Agrarian Reform Adjudication Board denied Land Bank's Motion for Reconsideration. 15

On May 5, 2006, Land Bank filed an action for the determination of just compensation before the Regional Trial Court, Branch 46, Bacolod City, sitting as a Special Agrarian Court. 16

Land Bank claimed that under the Department of Agrarian Reform Administrative Order No. 5, series of 1998 (Administrative Order No. 05-98) and the Joint Department of Agrarian Reform-Land Bank of the Philippines Memorandum Circular No. 15, series of 1999 (Joint Memorandum Circular No. 15-99), if the landowner cannot submit his or her production record, it must obtain the industry data from the milling district's extension work, not from any other sugar central. 17

Accordingly, Land Bank presented a Sugar Regulatory Administration Certification, which contained the above data provided in the BISCOM Mill District Certification, for La Castellana's annual gross production. 18

On the other hand, to prove his sugar production, Chua presented a Certification issued by the Sugar Regulatory Administration Extension Services Department, Negros-Panay Region, La Carlota Mill District Office, which showed: 19

 

Annual Gross Production of Sugar (L kg./ha.)

Crop Year	New Plant	Ratoon
1999-2000	119 to 128	115 to 121
1995-1996	124 to 130	114 to 118

 

In its August 31, 2010 Order, the Special Agrarian Court affirmed the Department of Agrarian Reform Adjudication Board's valuation of P7,789,761.03. It ruled that even if La Castellana was in the BISCOM Mill District, Chua milled his sugarcanes with Central Azucarera de La Carlota, La Carlota City (La Carlota). 20 It reasoned:

After considering the records of this case and the evidence presented, the Court finds the petition to be bereft of merit.

The Court has thoroughly studied and evaluated the findings of the DARAB in its assailed Decision promulgated on September 29, 2005, and its Resolution promulgated on April 3, 2006 (Exh. "5") and finds no cogent reason and compelling reason why this Court should set aside the DARAB's findings of 119.32 Lkgs./ha. as respondent's Annual Gross Production (AGP) for a total valuation of respondent's' (sic) 48.6030-hectare landholding at P7,789,761.03 which computed (sic) as follows:

Computation of CNI (Capitalized Net Income)

For CNI Sugar

 

CNI	=	AGP x SP x 26%
		––––––––––––––
		12%
	=	P119.32 x 735.78 x (26%)
		–––––––––––––––––––––
		0.12
	=	P190,218.75

 

For CNI Molasses

 

CNI	=	AGP x SP x NIR (67%)
		–––––––––––––––––––
		0.12
	=	P2.3761 MT x P1,732.02 x 67%
		––––––––––––––––––––––––––
		0.12
	=	P22,977.94
CNI (Property)	=	CNI (Sugar) + CNI (Molasses)
	=	P190,218.75 + P22,977.94
	=	P213,196.69
Land Value	=	(CNI x 0.90) x (MV x 0.10)
	=	P213,196.69 x 90% + (P100,000.00 x 10% x 85%)
	=	P200,377.02/ha.
	=	P200,377.02 x 37.0576 hectares
	=	P7,425,491.46 (Sugar)
		+ 388,156.97 (ipil-ipil, computed by LBP)
		+ 26,112.60 (coconut, computed by LBP)
Land Value	=	P7,789,761.03

 

Other than presenting the industry wide production data of the milling district concerned, which is the BISCOM Mill District because, admittedly, La Castellana town is situated within this mill district, petitioner has no other evidence to prove that respondent's Annual Gross Production (AGP) was less than 119.32 Lkgs./ha.

Upon the other hand, respondent-landowner presented Exhs. "1", "2", "3" to prove that indeed his sugar production per agricultural crop year was above average. To the mind of this Court, an annual gross production of over 100 Lkgs./ha. is already above average.

The evidence showed that although La Castellana town is situated within the BISCOM Mill District, yet respondent opted to mill his sugarcanes with mill Central Azucarera de La Carlota, La Carlota City. Respondent might have his own reasons for doing so, which the Court cannot opine. In the BILLCOM (sic) Mill District, there is situated the Binalbagan-Isabela Sugar Central. Any sugar planter can mill his sugarcane in the sugar central that he prefers regardless of the distance between his sugarcane farm to the sugar mill.

Having presented sufficient and superior weight of evidence to prove that his 37.0576-hectare property acquired by the government for agrarian reform purposes should be valued at P200,377.02 per hectare, LBP's petition for a lesser valuation must, by legal necessity and in the interest of justice and equity, necessarily fail. 21

The dispositive portion of the Special Agrarian Court's August 31, 2010 Order read:

ACCORDINGLY, the petition is DISMISSED for lack of merit.

Petitioner Land Bank of the Philippines is directed to pay respondent Nonaldo Chua the total amount of P7,789,761.03 minus whatever amounts respondent has already received from petitioner LBP as initial valuation for his landholding in the same proportion of cash and bonds as previously paid.

The counterclaim interposed by the respondent is dismissed for lack of evidence.

No pronouncement as to costs.

SO ORDERED. 22

In its November 17, 2010 Order, the Special Agrarian Court denied Land Bank's Motion for Reconsideration. 23

Aggrieved, Land Bank filed before the Court of Appeals a Petition for Review, docketed as CA-G.R. SP No. 05595, 24 raising the same issue of just compensation.

In its October 11, 2012 Decision, 25 the Court of Appeals denied Land Bank's Petition and affirmed the Special Agrarian Court's ruling. 26

In the land valuation, the Court of Appeals upheld the use of the data for annual gross production from La Carlota. It reasoned that under Joint Memorandum Circular No. 15-99, industry data from mill districts outside the sugar central's location may be employed, underscoring that appreciating data that did not reflect Chua's actual income would be unfair. 27

Furthermore, the Court of Appeals found that Land Bank itself failed to substantiate its allegations. 28

Finally, the Court of Appeals ruled that while Land Bank may assist the Department of Agrarian Reform in land valuation, it was not authorized to determine just compensation. 29

The dispositive portion of the Court of Appeals Decision read:

WHEREFORE, premises considered, the instant petition is hereby DENIED. The August 31, 2010 Decision of the Regional Trial Court, Branch 46 of Bacolod City, acting as Special Agrarian Court (SAC) in Special Agrarian Case No. 06-058 is AFFIRMED. Petitioner Land Bank of the Philippines is directed to pay the just compensation of Php7,789,761.03 in favor of respondent Nonaldo Chua minus whatever amount respondent had already received from the petitioner. No costs.

SO ORDERED.30 (Emphasis in the original)

On November 22, 2012, Land Bank filed before this Court a Motion for Extension of Time to File Petition for Review on Certiorari. 31 Subsequently, on December 21, 2012, it filed this Petition. 32

In its January 9, 2013 Resolution, 33 this Court granted Land Bank's Motion for Extension for 30 days and directed Chua to comment on the Petition within 10 days from notice.

Chua then filed his Comment, 34 which was noted in this Court's July 24, 2013 Resolution. 35

Land Bank later filed its Reply, 36 as this Court noted in its December 11, 2013 Resolution. 37

Petitioner claims that the Court of Appeals violated Administrative Order No. 05-98 and Joint Memorandum Circular No. 15-99 in adopting the Special Agrarian Court valuation. 38 It argues that in computing just compensation at P6,287,044.40, it strictly conformed with Section 17 of Republic Act No. 6657, or the Comprehensive Agrarian Reform Law, and the administrative issuances. 39

Petitioner also contends that when it required respondent in 2000 to submit his production data — which could have been the basis to determine just compensation — he only did so five (5) years later, in 2005. 40

Furthermore, petitioner alleges that respondent did not present evidence that he actually milled in La Carlota. It claims that the annual gross production data from BISCOM Mill District "are more accurate and reflective of the actual production of the landowner." 41

Petitioner maintains that it is authorized to determine the property's just compensation, as ruled in Land Bank of the Philippines v. Spouses Banal, 42 where this Court declared that Land Bank is "charged with the preliminary determination of the value of lands placed under land reform program and the compensation to be paid for their taking." 43

In his Comment, 44 respondent counters that the Department of Agrarian Reform Adjudication Board's land valuation, which was later adopted by the Special Agrarian Court, was in accord with the prevailing law and jurisprudence. 45 He avers that the Department of Agrarian Reform, not petitioner, has the authority to determine just compensation. 46

In its Reply, 47 petitioner insists that since respondent did not submit his production record in 2000, it used the industry data of the extension work area where the property is located, per Joint Memorandum Circular No. 15-99, which was crafted precisely to have a fixed source of data on the annual gross production of sugar. It maintains that respondent's data may only be used upon its verification and validation, which it failed to do because of respondent's non-submission. 48

Furthermore, petitioner argues that in Heirs of Lorenzo and Carmen Vidad v. Land Bank of the Philippines, 49 this Court sustained its "authority to value the landholding acquired under the agrarian reform program." 50

For this Court's resolution are the following issues:

First, whether or not petitioner Land Bank of the Philippines has the right to determine just compensation in expropriation cases under the Comprehensive Agrarian Reform Program; and

Second, whether or not the amount of just compensation determined by the Special Agrarian Court, as affirmed by the Court of Appeals, is in accord with law.

I

This Court is once again confronted with issues on the just compensation of a property expropriated under agrarian reform.

The Constitution mandates the just distribution of agricultural lands. 51 The Comprehensive Agrarian Reform Law, which institutes the government's Comprehensive Agrarian Reform Program, 52 conferred the original and exclusive jurisdiction over petitions for determining just compensation 53 upon regional trial courts designated as special agrarian courts. 54

Just compensation means "the full and fair equivalent of the property taken from its owner by the expropriator." 55 The term "just" modifies "compensation" to underscore that the payment for the expropriated property is "real, substantial, full, ample. 'Just compensation,' therefore . . . means a fair and full equivalent for the loss sustained." 56

Section 18 of the Comprehensive Agrarian Reform Law provides:

SECTION 18. Valuation and Mode of Compensation. — The LBP shall compensate the landowner in such amounts as may be agreed upon by the landowner and the DAR and the LBP, in accordance with the criteria provided for in Sections 16 and 17 and other pertinent provisions hereof, or as may be finally determined by the court, as the just compensation for the land. (Emphasis supplied)

Petitioner is the financial intermediary of the Comprehensive Agrarian Reform Program. 57 As the law provision provides, petitioner assists in the preliminary determination of the covered land's value. 58 However, the same section states that just compensation "may be finally determined by the court[.]" 59 Jurisprudence has long settled that ascertaining just compensation remains to be a judicial function:

The determination of "just compensation" in eminent domain cases is a judicial function. The executive department or the legislature may make the initial determinations but when a party claims a violation of the guarantee in the Bill of Rights that private property may not be taken for public use without just compensation, no statute, decree, or executive order can mandate that its own determination shall prevail over the court's findings. Much less can the courts be precluded from looking into the "just-ness" of the decreed compensation. 60 (Emphasis in the original)

In Heirs of Lorenzo and Carmen Vidad, which petitioner cited, this Court dealt with the same issue:

LBP's valuation of lands covered by the CARP Law is considered only as an initial determination, which is not conclusive, as it is the RTC, sitting as a SAC, that could make the final determination of just compensation, taking into consideration the factors enumerated in Section 17 of RA 6657 and the applicable DAR regulations. LBP's valuation has to be substantiated during an appropriate hearing before it could be considered sufficient in accordance with Section 17 of RA 6657 and the DAR regulations. 61 (Emphasis supplied, citation omitted)

Indeed, petitioner preliminarily assesses land valuation and the corresponding compensation to be paid to the landowner. However, under the Comprehensive Agrarian Reform Law, parties may bring the issue to court, which has the jurisdiction to finally determine the amount of just compensation. It may substitute the value earlier set by administrative agencies with its own, so long as it is supported by the evidence on record. 62

II

Section 17 of the Comprehensive Agrarian Reform Law enumerates the factors to be considered in land valuation in agrarian reform:

SECTION 17. Determination of Just Compensation. — In determining just compensation, the cost of acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment made by government assessors shall be considered. The social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property as well as the non-payment of taxes or loans secured from any government financing institution on the said land shall be considered as additional factors to determine its valuation.

This was translated into a formula by the Department of Agrarian Reform in its Administrative Order No. 05-98, 63 or the Revised Rules and Regulations Governing the Valuation of Lands Voluntarily Offered or Compulsorily Acquired, which states:

There shall be one basic formula for the valuation of lands covered by [Voluntary Offer to Sell] or [Compulsory Acquisition]:

 

LV	=	(CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where:		LV = Land Value
		CNI = Capitalized Net Income
		CS = Comparable Sales
		MV = Market Value per Tax Declaration

 

The above formula shall be used if all the three factors are present, relevant, and applicable.

A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be:

LV = (CNI x 0.9) + (MV x 0.1)

xxx xxx xxx

B. Capitalized Net Income (CNI) — This shall refer to the difference between the gross sales (AGP x SP) and total cost of operations (CO) capitalized at 12%.

Expressed in equation form:

 

		(AGP x SP) – CO
CNI	=	––––––––––––––
		0.12
Where:
CNI	=	Capitalized Net Income
AGP	=	Annual Gross Production corresponding to the latest available 12 months' gross production immediately preceding the date of FI.
SP	=	The average of the latest available 12 months' selling prices prior to the date of receipt of the CF by LBP for processing, such prices to be secured from the Department of Agriculture (DA) and other appropriate regulatory bodies or, in their absence, from the Bureau of Agricultural Statistics. If possible, SP data shall be gathered for the barangay or municipality where the property is located. In the absence thereof, SP may be secured within the province or region.
CO	=	Cost of Operations
		Whenever the cost of operations could not be obtained or verified, an assumed net income rate (NIR) of 20% shall be used. Landholdings planted to coconut which are productive at the time of FI shall continue to use the assumed NIR of 70% DAR and LBP shall continue to conduct joint industry studies to establish the applicable NIR for each crop covered under CARP.
0.12	=	Capitalization Rate

 

There is no dispute that Administrative Order 05-98 applies here. Both parties agree that the applicable formula for land value is:

LV = (CNI x 0.9) + (MV x 0.1) 64

CNI stands for capitalized net income, which is computed as the difference between the gross sales and the total cost of operations capitalized at 12%. 65 Gross sales is calculated as the factor of annual gross production and the average 12-month selling prices. 66 The annual gross production corresponds to "the latest available 12 months' gross production immediately preceding the date of [Field Investigation]." 67

Likewise, Joint Memorandum Circular No. 15-99, or the Valuation Guidelines for Lands Planted to Sugarcane, applies here. It pertains to sugarcane lands that, as of its signing, are not yet covered by a Memorandum of Valuation. 68 It was signed on July 23, 1999 and took effect on August 2, 1999. 69

The disputed property here is a sugarcane land that was valued in 2000. 70 Joint Memorandum Circular No. 15-99, therefore, applies.

Moreover, the Joint Memorandum Circular outlines the procedure for the standardized calculation of the capital net income, of which the annual gross production is a component, and is at issue here. 71

Petitioner and the lower courts relied on both Administrative Order No. 05-98 and Joint Memorandum Circular No. 15-99. The discrepancy in their computation lies in the source of their respective data.

The pertinent provisions of Administrative Order No. 05-98 include:

B.1 Industry data on production, cost of operations and selling price shall be obtained from government/private entities. Such entities shall include, but not be limited to, the Department of Agriculture (DA), the Sugar Regulatory Authority (SRA), the Philippine Coconut Authority (PCA) and other private persons/entities knowledgeable in the concerned industry.

B.2 The landowner shall submit a statement of net income derived from the land subject of acquisition. This shall include, among others, total production and cost of operations on a per crop basis, selling price/s (farm gate) and such other data as may be required. These data shall be validated/verified by the Department of Agrarian Reform and Land Bank of the Philippines field personnel. The actual tenants/farmworkers of the subject property will be the primary source of information for purposes of verification or, if not available, the tenants/farmworkers of adjoining property.

In case of failure by the landowner to submit the statement within fifteen (15) days from the date of receipt of letter-request as certified by the Municipal Agrarian Reform Office (MARO) or the data stated therein cannot be verified/validated, DAR and LBP may adopt any applicable industry data or, in the absence thereof, conduct an industry study on the specific crop which will be used in determining the production, cost and net income of the subject landholding. 72 (Emphasis supplied)

Administrative Order 05-98 requires the landowner to submit a statement of net income, which shall reflect actual production, cost of operations, selling price, among other data, which shall be validated by field personnel from petitioner and the Department of Agrarian Reform. 73

In case the landowner fails to submit the statement within 15 days from receipt of a letter-request, or the data that the landowner provided cannot be verified, there are three (3) options for petitioner and the Department of Agrarian Reform. First, they may seek industry data from the concerned government agency or private entity, if available. 74 Otherwise, they may obtain the necessary information from any industry data, or conduct a study on the crop to be used in determining the production, costs, and net income of the landholding. 75

Meanwhile, Joint Memorandum Circular No. 15-99 explicitly states that sugarcane lands shall be valued based on "either the verified and validated production data of the landowner (LO) or the Average Gross Production (AGP) data secured from the Sugar Regulatory Administration (SRA) in cases where the former is not available or could not be validated." 76

Section III (A) 77 of Joint Memorandum Circular No. 15-99 provides the land valuation procedure where the owner submitted a net income statement. Under it, field personnel from petitioner and the Department of Agrarian Reform shall validate and verify the submitted data. If there was no submission, or if data cannot be verified, the procedure in Section III (B) 78 of Joint Memorandum Circular No. 15-99 shall be followed instead.

The Sugar Regulatory Administration Mill District Offices monitor the gross production of sugarcane in different extension work areas, which are composed of a group of specific municipalities and barangays. Data from areas where the property is found is crucial under Joint Memorandum Circular No. 15-99. 79

When the landowner submits a net income statement with his or her average sugar and molasses production data, it shall be compared 80 with the data from the extension work area where the property is located to ascertain whether it can be adopted. 81 If he or she did not submit a net income statement, or the data provided cannot be verified or validated, the annual gross production from the extension work area where the property is found shall be used. 82 Implied in these cases is that the property owner mills his or her produce.

Joint Memorandum Circular No. 15-99 recognizes that some sugar planters bring their canes to other sugar centrals to avail of higher planter's share, better milling efficiency, or timely milling of their canes. This means that they can bring their canes to centrals that may not be under the same extension work area where their property is.

Joint Memorandum Circular No. 15-99 cautions petitioner and the Department of Agrarian Reform's field staff to exercise diligence in determining the actual sugar production of the landowner for the property to be valued. 83 This was a departure from Administrative Order No. 05-98, which gives leeway for petitioner and the Department of Agrarian Reform to obtain any industry data when data from the concerned government agency is unavailable. 84

Administrative Order No. 05-98 has general application and provides the basic formula for valuation of all expropriated lands under the Comprehensive Agrarian Reform Law. On the other hand, Joint Memorandum Circular No. 15-99 deals specifically with valuation of sugarcane lands. Between these, the latter squarely applies here.

Thus, the directive under the Joint Memorandum Circular — which requires petitioner and Department of Agrarian Reform to determine the planter's actual production in case he or she mills sugar outside the designated extension work area — prevails over the flexibility that Administrative Order No. 05-98 extends to them in obtaining any industry data for valuation of any land to be taken.

To recall, petitioner's P6,287,044.40 valuation 85 employs annual gross production data from the BISCOM Mill District, which covers La Castellana, where respondent's property is located. 86 On the other hand, the P7,789,761.03 valuation determined by the Department of Agrarian Reform Adjudication Board 87 uses annual gross production data from La Carlota, where respondent had actually milled his sugarcanes, as found by the Special Agrarian Court. 88

Petitioner insists that the data respondent presented may only be utilized when verified and validated. This claim is erroneous.

Indeed, as petitioner persistently invokes, Joint Memorandum Circular No. 15-99 directs the use of annual gross production data from the extension work area where the owner's land is when he or she does not submit an income statement. However, what respondent presented was a Certification from the Sugar Regulatory Administration Extension Services Department on the production of La Carlota Mill District Office. 89 This is not the net income statement that both Administrative Order No. 05-98 and Joint Memorandum Circular No. 15-99 require to be validated and verified.

As respondent milled his sugarcane in La Carlota, as the lower courts found, petitioner and the Department of Agrarian Reform must then determine his actual gross production data. With the information from the Sugar Regulatory Administration, what was left for them to do was to verify if respondent actually milled his sugarcane in the neighboring sugar central. This, they failed to do. Instead, petitioner consistently assailed the employment of respondent's data on unmeritorious grounds.

This Court, therefore, affirms the Court of Appeals' ruling.

Indeed, as the Court of Appeals stated:

[I]t is not mandatory on the part of the landowners to have their sugar milled only within the mill district where their property is located. Here, the respondent opted to mill his sugarcanes with Mill Central Azucarera de La Carlota, which is only five kilometers away from his plantation. It is therefore reasonable that the data to be used in determining respondent's AGP will be that of Mill Central Azucarera de La Carlota. It would be very unfair on the part of the respondent if the data will be based on an AGP which does not represent his actual income. 90

Besides, the Department of Agrarian Reform Adjudication Board's valuation was adopted by the Special Agrarian Court 91 and later affirmed by the Court of Appeals. 92 Factual findings of administrative agencies are generally accorded respect and finality. These specialized agencies are presumed to have the expertise on matters over which they have jurisdiction. 93 Furthermore, the Special Agrarian Court has the final decision on the ascertainment of just compensation. 94 We do not find any cogent reason to disturb their findings.

Finally, petitioner's valuation must be substantiated in a hearing before it may be deemed sufficient in accordance with Section 17 of the Comprehensive Agrarian Reform Law and the administrative issuances. 95 After scrutinizing the records, this Court has found no proof of the sources of data that petitioner applied in its computation. The Court of Appeals ruled the same way on this matter, but petitioner's allegations remain unsubstantiated at this stage.

WHEREFORE, the Petition for Review on Certiorari is DENIED for lack of merit, and the Court of Appeals' October 11, 2012 Decision in CA-G.R. SP No. 05595 is AFFIRMED.

SO ORDERED." (Peralta J., on official leave; Hernando, J., no part; Perlas-Bernabe, J., designated additional Member per Raffle dated June 10, 2019.)

Very truly yours,

(SGD.) WILFREDO V. LAPITANDivision Clerk of Court

 

Footnotes

1.Rollo, pp. 27-49.

2.Id. at 50-66. The Decision was penned by Associate Justice Ramon Paul L. Hernando (now an Associate Justice of this Court), and concurred in by Associate Justices Carmelita Salandanan Manahan and Maria Elisa Sempio Diy of the Twentieth Division, Court of Appeals, Cebu City.

3.Id. at 51.

4.Id.

5.Id.

6.Id.

7.Id. at 52.

8.Id.

9.Id.

10.Id.

11.Id.

12.Id. at 53.

13.Id.

14.Id.

15.Id.

16.Id. at 33.

17.Id. at 53.

18.Id. at 54.

19.Id.

20.Id. at 55.

21.Id. at 54-56.

22.Id. at 56.

23.Id.

24.Id. at 50.

25.Id. at 50-66.

26.Id. at 65.

27.Id. at 61.

28.Id. at 62.

29.Id. at 63.

30.Id. at 65.

31.Id. at 3-5.

32.Id. at 27-49.

33.Id. at 177-178.

34.Id. at 179-186.

35.Id. at 188.

36.Id. at 189-196.

37.Id. at 197.

38.Id. at 35.

39.Id. at 38.

40.Id. at 41-42.

41.Id. at 41.

42. 478 Phil. 701 (2004) [Per J. Sandoval-Gutierrez, Third Division].

43.Rollo, p. 42.

44.Id. at 179-186.

45.Id. at 179-180.

46.Id. at 184.

47.Id. at 189-196.

48.Id. at 190-191.

49. 634 Phil. 9 (2010) [Per J. Carpio, Second Division].

50.Rollo, p. 192.

51. CONST., art. XIII, sec. 4 provides:

   SECTION 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe, taking into account ecological, developmental, or equity considerations, and subject to the payment of just compensation. In determining retention limits, the State shall respect the right of small landowners. The State shall further provide incentives for voluntary land-sharing.

52. Republic Act No. 6657 (1988), sec. 2 provides:

   SECTION 2. Declaration of Principles and Policies. — It is the policy of the State to pursue a Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and farmworkers will receive the highest consideration to promote social justice and to move the nation toward sound rural development and industrialization, and the establishment of owner cultivatorship of economic-size farms as the basis of Philippine agriculture.

   To this end, a more equitable distribution and ownership of land, with due regard to the rights of landowners to just compensation and to the ecological needs of the nation, shall be undertaken to provide farmers and farmworkers with the opportunity to enhance their dignity and improve the quality of their lives through greater productivity of agricultural lands.

   The agrarian reform program is founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farm workers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to the priorities and retention limits set forth in this Act, having taken into account ecological, developmental, and equity considerations, and subject to the payment of just compensation. The State shall respect the right of small landowners, and shall provide incentives for voluntary land-sharing.

53. Republic Act No. 6657 (1988), sec. 57.

54. Republic Act No. 6657 (1988), sec. 56.

55. Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 256 Phil. 777, 812 (1989) [Per J. Cruz, En Banc].

56. City of Manila v. Estrada, 25 Phil. 208, 234 (1913) [Per J. Trent, First Division].

57. Republic Act No. 6657 (1988), sec. 64.

58. Republic Act No. 6657 (1988), sec. 18.

59. Republic Act No. 6657 (1988), sec. 18.

60. Export Processing Zone Authority v. Judge Dulay, 233 Phil. 313, 326 (1987) [Per J. Gutierrez, Jr., En Banc].

61. 634 Phil. 9, 38 (2010) [Per J. Carpio, Second Division].

62. Republic v. Santos, 225 Phil. 29 (1986) [Per J. Aquino, Second Division].

63. Available at <http://www.lis.dar.gov.ph/documents/386> last accessed on June 19, 2019.

64. Rollo, p. 60.

65. Department of Agrarian Reform Administrative Order No. 05-98 (1998), sec. II (B).

66. Department of Agrarian Reform Administrative Order No. 05-98 (1998), sec. II (B).

67. Department of Agrarian Reform Administrative Order No. 05-98 (1998), sec. II (B).

68. Department of Agrarian Reform-Land Bank of the Philippines Joint Memorandum Circular No. 15-99 (1999), sec. II.

69. Department of Agrarian Reform-Land Bank of the Philippines Joint Memorandum Circular No. 15-99 (1999), sec. VII.

70. Rollo, p. 51.

71. Department of Agrarian Reform-Land Bank of the Philippines Joint Memorandum Circular No. 15-99 (1999), sec. II.

72. Department of Agrarian Reform Administrative Order No. 05-98 (1998), sec. II (B.1) and (B.2).

73. Department of Agrarian Reform Administrative Order No. 05-98 (1998), sec. II (B.2).

74. Department of Agrarian Reform Administrative Order No. 05-98 (1998), sec. II (B.2), in relation to sec. II (B.1).

75. Department of Agrarian Reform Administrative Order No. 05-98 (1998), sec. II (B.2).

76. Department of Agrarian Reform-Land Bank of the Philippines Joint Memorandum Circular No. 15-99 (1999), sec. I.

77. Department of Agrarian Reform-Land Bank of the Philippines Joint Memorandum Circular No. 15-99 (1999), sec. III (A) provides:

III. VALUATION PROCEDURES

xxx xxx xxx

   A. STATEMENT OF NET INCOME SUBMITTED BY LANDOWNER

   1. As provided under Item II.B.2 of DAR A.O. No. 5, Series of 1998, production and cost data submitted by the LO shall have to be validated by DAR and LBP personnel. The suggested methodology in the validation and verification of LO's production and cost data is as follows:

   a. Average Gross Production (AGP)

   a.1. Check LO's plant and ratoon AGP data for sugar and molasses against his farm records. The AGP of sugar is expressed in terms of LKG per hectare (1 LKG = 50 Kgs. bag of sugar) while the AGP of molasses is expressed in terms of Metric Tons (MT) per hectare. (Picul is the old standard unit of measurement for bag of sugar. To convert picul into its LKG equivalent, multiply picul sugar by a constant factor of 1.265.);

   a.2. Secure from SRA Mill District Office (MDO) the average sugar and molasses production data for plant and ratoon crops in the area where the property is located;

   a.3. Compare LO's production data with the MDO's data. If the LO's data does not exceed the average MDO production data for sugar and molasses (plant and ratoon) by 5%, adopt LO's data; and

   a.4. If LO's production exceeds the average MDO production data for sugar and molasses by more than 5%, a certification shall be secured from the MDO as to the attainability of LO's data in the particular area where the property is located. However, if the MDO cannot issue a certification for whatever reason, the valuation procedure under Item III.B of these guidelines shall apply.

78. Department of Agrarian Reform-Land Bank of the Philippines Joint Memorandum Circular No. 15-99 (1999), sec. III (B) provides:

   III. VALUATION PROCEDURES

xxx xxx xxx

   B. LO's STATEMENT OF NET INCOME NOT AVAILABLE OR PRODUCTION AND COST DATA COULD NOT BE VERIFIED/VALIDATED

   1. Average Gross Production (AGP)

   a. If the AGP of a particular sugar farm/plantation is not available or the AGP data submitted by the LO could not be verified or validated, the AGP shall be secured from the SRA-MDO.

   In order to have a common source of information on the AGP of sugar, an agreement was made between DAR/LBP and SRA whereby the latter shall provide a standardized form containing the production data for plant and ratoon crops and other related information for each MDO (See Annex B). Under each MDO are Extension Workers who are responsible for the monitoring of the production and expenses of sugarcane in the barangays/municipalities assigned to them. These barangays/municipalities are grouped together as Extension Work Areas (EWAs). The AGP for plant and ratoon crops for the particular EWA where the property is located shall be used. The said document shall be secured from the MDO or from the SRA Central Office.

   b. There are Sugar Centrals which keep track of the individual planter's sugar production and molasses output. There are cases, however, where some of the sugar planters who want to avail of: (a) the higher planter's share offered by other Sugar Centrals; (b) better milling efficiency; and/or (c) the timely milling of their canes, would bring some or all of their canes to another Sugar Central. The additional tonnage of sugar which is credited to the Sugar Central, would result in a higher production output per hectare for that Central.

   The DAR and LBP field staff should therefore exercise caution and diligence in the gathering of the actual sugar production of the specific LO for the property under valuation.

   c. In the absence of specific data on the AGP of molasses, the following approaches may be adopted in estimating the AGP for molasses:

   c.1. Where Ton Cane Sugar is Available

 

		Ton Cane Sugar x Kg. Molasses per Ton Cane
AGP (molasses)	=	–––––––––––––––––––––––––––––––––––––
		1,000

 

   c.2. Where LKG Sugar is Available

   The molasses conversion factor (kg. molasses per Ton Cane) and the average LKG sugar per Ton Cane (LKG/TC) for a sample EWA is shown in Annex B.

79. Department of Agrarian Reform-Land Bank of the Philippines Joint Memorandum Circular No. 15-99 (1999), sec. III (B) (1) (a).

80. Department of Agrarian Reform-Land Bank of the Philippines Joint Memorandum Circular No. 15-99 (1999), sec. III (A) (1) (a.3).

81. Department of Agrarian Reform-Land Bank of the Philippines Joint Memorandum Circular No. 15-99 (1999), sec. III (A) (1) (a.2).

82. Department of Agrarian Reform-Land Bank of the Philippines Joint Memorandum Circular No. 15-99 (1999), sec. III (B) (1) (a).

83. Department of Agrarian Reform-Land Bank of the Philippines Joint Memorandum Circular No. 15-99 (1999), sec. III (B) (1) (b).

84. Department of Agrarian Reform Administrative Order No. 05-98 (1998), sec. II (B.2).

85. Rollo, p. 38.

86. Id. at 41.

87. Id. at 52.

88. Id. at 55.

89. Id. at 54.

90. Id. at 61.

91. Id. at 56.

92. Id. at 65.

93. Espiritu v. Del Rosario, 745 Phil. 566, 588 (2014) [Per J. Leonen, Second Division].

94. Land Bank of the Philippines v. Manzano, G.R. No. 188243, January 24, 2018, <http://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/63907> [Per J. Leonen, Third Division].

95. Heirs of Lorenzo and Carmen Vidad v. Land Bank of the Philippines, 634 Phil. 9 (2010) [Per J. Carpio, Second Division].