Land Bank of the Philippines v. Lajom

SPECIAL SECOND DIVISION

[G.R. No. 184982. February 23, 2022.]

LAND BANK OF THE PHILIPPINES, petitioner, vs.JOSE T. LAJOM, REPRESENTED BY PORFIRIO RODRIGUEZ, FLORENCIA LAJOM GARCIA-DIAZ, FRANCISCO LAJOM GARCIA, JR., ET AL., respondents.

[G.R. No. 185048. February 23, 2022.]

JOSE T. LAJOM, REPRESENTED BY PORFIRIO RODRIGUEZ, FLORENCIA LAJOM GARCIA-DIAZ, FRANCISCO LAJOM GARCIA, JR., FERNANDO LAJOM RODRIGUEZ, TOMAS ATAYDE, AUGUSTO MIRANDA, JOSEFINA ATAYDE FRANCISCO, RAMON L. ATAYDE, AND BLESILDA ATAYDE RIOS, petitioners, vs.LAND BANK OF THE PHILIPPINES, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Special Second Division, issued a Resolution dated23 February 2022which reads as follows:

"G.R. No. 184982 (Land Bank of the Philippines v. Jose T. Lajom, represented by Porfirio Rodriguez, Florencia Lajom Garcia-Diaz, Francisco Lajom Garcia, Jr., et al.) and G.R. No. 185048 (Jose T. Lajom, represented by Porfirio Rodriguez, Florencia Lajom Garcia-Diaz, Francisco Lajom Garcia, Jr., Fernando Lajom Rodriguez, Tomas Atayde, Augusto Miranda, Josefina Atayde Francisco, Ramon L. Atayde, and Blesilda Atayde Rios v. Land Bank of the Philippines.)

The Court NOTES the letter 1 dated July 14, 2021 of Atty. Ernesto F. Urbano, counsel for heirs of Jose T. Lajom (Jose), stating, among others, that there was already an entry of judgment issued in this case and the remaining act to be done is to determine the final computation of just compensation for the properties of the late Jose, and that they are appealing for intervention so that the heirs of the late Jose could finally get what is due to them as most of them are already very old (in the 80's and 90's already) and are in very bad need of whatever amount they could receive for their medicines, food and other need especially during this pandemic.

On August 20, 2014, the Court issued a Decision 2 remanding the case to the Regional Trial Court of Cabanatuan City, Branch 23 (RTC) for reception of evidence on the issue of just compensation for the 24.12-hectare (ha.) portion of the properties (subject portions) of Jose T. Lajom in accordance with the guidelines set in the Decision, and directing the RTC to submit to the Court a report on its findings and recommended conclusions. The following guidelines were laid down:

First. Just compensation must be valued at the time of the taking, or the 'time when the landowner was deprived of the use and benefit of his property' which, in this case, is reckoned from the date of the issuance of the emancipation patents. Hence, the valuation of the subject portion must be based on evidence showing the values prevalent on such time of taking for like agricultural lands. CAIHTE

Second. The evidence must conform to Section 17 of RA 6657, as amended, prior to its amendment by RA 9700. While RA 9700 took effect on July 1, 2009, which amended further certain provisions of RA 6657, as amended, among them Section 17, declaring '[t]hat all previously acquired lands wherein valuation is subject to challenge by landowners shall be completed and finally resolved pursuant to Section 17 of [RA 6657], as amended,' the law should not be applied retroactively to pending cases. Considering that the present consolidated petitions had been filed before the effectivity of RA 9700, or on December 8, 2008 for G.R. No. 184982 and May 18, 2009 for G.R. No. 185048, Section 17 of RA 6657, as amended, prior to its further amendment by RA 9700, should therefore apply.

Third. With respect to the commonly raised issue on interest, the RTC may impose the same on the just compensation award as may be justified by the circumstances of the case and in accordance with prevailing jurisprudence. The Court has previously allowed the grant of legal interest in expropriation cases where there was delay in the payment of just compensation, deeming the same to be an effective forbearance on the part of the State. To clarify, this incremental interest is not granted on the computed just compensation; rather, it is a penalty imposed for damages incurred by the landowner due to the delay in its payment.

Thus, legal interest shall be pegged at the rate of 12% p.a. from the time of taking until June 30, 2013. Thereafter, or beginning July 1, 2013, until fully paid, just compensation shall earn interest at the new legal rate of 6% p.a., conformably with the modification on the rules respecting interest rates introduced by Bangko Sentral ng Pilipinas Monetary Board Circular No. 799, Series of 2013.

Fourth. The RTC, sitting as a Special Agrarian Court, is reminded that while it should take into account the various formulae created by the DAR in arriving at the just compensation for the subject land, it is not strictly bound thereby if the situations before if do not warrant their application. The RTC, in the exercise of its judicial function of determining just compensation, cannot be restrained or delimited in the performance thereof. 3

The Court's Decision dated August 20, 2014 became final and executory 4 on January 30, 2015, and accordingly entered in the Book of Entries of Judgments.

The Court received a copy of a Report and Recommendation 5 dated January 25, 2016 from RTC Presiding Judge Primo G. Sio, Jr., which was noted in the Court's Resolution 6 dated June 1, 2016. On July 27, 2018, the heirs of Jose filed a Motion for Final Resolution 7 of the case.

In its Report and Recommendation, the RTC found that the just compensation for the subject lands is P2,260,914.53 8 using the formula 9 — LV = (CNI10x 0.9) + (MV x 0.1) pursuant to Department of Agrarian Reform (DAR) Administrative Order (AO) No. 05, Series of 1998. 11

In arriving at said amount of just compensation, the RTC used: (a) industry data 12 of annual gross production (AGP) values for palay in Nueva Ecija for the first and fourth quarters of 1994, the fourth quarter of 1997, and the first quarter of 1998, when Jose's properties were taken, i.e., when the emancipation patents (EP) were issued in favor of the farmer-beneficiaries; (b) the average of farmgate prices 13 of palay from December 1993 to November 1994, and September 1997 to July 1998, 14 in the absence of government support price for palay for the said years; and (c) the base unit market value (BUMV) per tax declaration grossed up by the Location Adjustment Factor (LAF) and the Regional Consumer Price Index (RCPI). 15

Thus, it computed the amount of just compensation as follows:

 

A. AGP:

AGP =

Volume of Production

1994 AGP

Quarter 1 AGP =

45,458 metric tons (MT)

=	4.148 MT/ha. [82.96 cavans/ha.] 16	4,148 kilograms (kg.)
Quarter 4 AGP =	368,703 MT
=	3.498 MT/ha. [69.96 cavans/ha.] 17	3,498 kg.
		––––––––
1994 AGP		7,646 kg.
		=======

1998 AGP

Quarter 4 (1997) AGP =	387,586 MT–––––––––115,353 ha.
=	3.36 MT/ha. [67.20 cavans/ha.] 18	3,360 kg.
Quarter 1 (1998) AGP =	111,196 MT–––––––––––––––26,924 ha.
=	4.13 MT/ha. or [82.60 cavans/ha.] 19	4,130 kg.
		––––––––
1998 AGP		7,490 kg.
		=======

B. Grossed-up MV:

MV = BUMV x LAF x RCPI

1994 MV	=	P54,210 x 91% x 1.049
	=	P51,748.3220
1998 MV	=	P54,210 x 102% x 1.383
	=	P76,471.8821

C. CNI:

CNI =	20% (AGP x SP)
1994 CNI =	0.2 (7,6452 22 kg. x P6.94)
=	P88,427.1723
1998 CNI =	0.2 (7,490 kg. x P9.28)
=	P115,845.3324

D. Land Value (LV) per hectare:

LV	=	(CNI x 0.9) + (MV x 0.1)
1994 LV	=	(P88,427.17 x 0.9) + (P51,748.32 x 0.1)
	=	P79,584.45 + P5,174.83
	=	P84,759.28/ha.

Total 1994 LV

=

P84,759.28 x 16.15 ha.

=

P1,368,862.3725

1998 LV	=	(P115,845.33 x 0.9) + (P76,471.88 x 0.1)
	=	P104,260.80 + P7,647.19
	=	P111,907.99/ha.

Total 1998 LV	=	P111,907.99 x 7.97 ha.	=	892,052.16 26
				––––––––––––

Total LV of the subject lands	P2,260,914.53
	==========

 

In addition, the RTC imposed legal interest at the rate of twelve percent (12%) per annum (p.a.) from the time of taking until June 30, 2013, and at six percent (6%) p.a. from July 1, 2013, until fully paid.

The Court's Ruling

The Court finds the RTC's recommendation to be in order, save for minor computational error. DETACa

The factors listed under Section 17 of RA 6657 27 and its resulting formulas provide a uniform framework or structure for the computation of just compensation which ensures that the amounts to be paid to affected landowners are not arbitrary, absurd or even contradictory to the objectives of agrarian reform. It is jurisprudentially settled that the DAR formulas partake of the nature of statutes, which under the 2009 amendment introduced by RA 9700 28 became law itself, and thus have in their favor the presumption of legality, such that courts shall consider, and not disregard, these formulas in the determination of just compensation for properties covered by the CARP. 29

In this case, while at the time of the taking of the subject properties in 1994 and in 1998, two (2) different DAR AOs were in force — for 1994, DAR AO No. 6, Series of 1992, 30 as amended by DAR AO No. 11, Series of 1994, 31 and for 1998, DAR AO No. 05, Series of 1998 — the said AOs, nonetheless, use the same formula, i.e., LV = (CNI x 0.9) + (MV x 0.1), which is applicable when there are no available comparable sales (CS) data, 32 as in this case. 33

In arriving at the amount of just compensation, the RTC correctly used: (a) the relevant industry data 34 of AGP values for palay in Nueva Ecija for the proper periods of "taking," i.e., when EPs were issued in favor of the farmer-beneficiaries, in the absence of the landowner's statements as to the income claimed to be derived from the property certified by the Municipal Agrarian Reform Office; 35(b) the average of farmgate prices 36 of palay from December 1993 to November 1994, and September 1997 to July 1998, 37 absent the government support price for palay for the said years; 38 and (c) the BUMV per tax declaration grossed up by the LAF and the RCPI. 39

Thus, the amount of the just compensation for the subject lands should be P2,260,769.05, not P2,260,914.53 40 as held by the RTC, due to minor computational error in the 1998 LV, thus:

 

LV	=	(CNI x 0.9) + (MV x 0.1)
1994 LV	=	(P88,427.17 x 0.9) + (P51,748.32 x 0.1)
	=	P79,584.45 + P5,174.83
=	P84,759.28/ha.

Total 1994 LV	=	P84,759.28 x 16.15 ha.	=	P1,368,862.37

1998 LV	=	(P115,845.33 x 0.9) + (P76,471.88 x 0.1)
	=	P104,260.80 + P7,647.19
=	P111,907.99/ha.

Total 1998 LV

=

P111,907.99 x 7.97 ha.

=

891,906.6841––––––––––––

Total LV of the subject lands	P2,260,769.05
	===========

 

The RTC likewise correctly imposed legal interest at the rate of twelve percent (12%) p.a. from the time of taking until June 30, 2013, and at six percent (6%) p.a. from July 1, 2013, until fully paid, in accordance with the guidelines in the Court's Decision dated August 20, 2014. The rule is that the payment of just compensation must be reckoned from the time of taking or the filing of the complaint, whichever came first. Thus, the payment of interest, when there is delay, as in this case, follows the reckoning point when just compensation should have been paid, 42i.e., from the time of taking, to be applied on the unpaid balance of the just compensation due. 43

WHEREFORE, the Entry of Judgment is hereby LIFTED. The Court ADOPTS with MODIFICATION the Report and Recommendation dated January 25, 2016 of the Regional Trial Court of Cabanatuan City, Branch 23, ORDERING the Land Bank of the Philippines to pay Jose T. Lajom's estate or his heirs:

1) The amount of P2,260,769.05 as just compensation for the subject portions, less any provisional deposits made by the Land Bank of the Philippines; and

2) Interest on the unpaid balance (a) at the rate of twelve percent (12%) per annum (p.a.) from the taking of (i) the 16.15-hectare portion in 1994, and (ii) the 7.97-hectare; portion in 1998, until June 30, 2013; and (b) at six percent (6%) p.a. from July 1, 2013 until the finality of this Resolution; and

3) Interest on the total award at the legal rate of six percent (6%) p.a. from the finality of this Resolution until its full payment.

SO ORDERED."

By authority of the Court:

(SGD.) TERESITA AQUINO TUAZONDivision Clerk of Court

 

Footnotes

1.Rollo, p. 745.

2. 741 Phil. 655 (2014).

3.Id.

4. See Entry of Judgment; rollo (G.R. No. 185048), p. 262.

5.Id. at 301-310. Penned by Presiding Judge Primo G. Sio, Jr.

6.Id. at 311-312. Signed by Division Clerk of Court Ma. Lourdes C. Perfecto.

7.Id. at 298-300.

8. Computed as follows:

 

Total Land Value (LV) for 1994	P1,368,862.37
Total LV for 1998	892,052.16 (See id. at 309.)
	–––––––––
Total LV for the subject lands	P2,260,914.53
	==========

 

9.

 

Where:	LV =Land Value
CNI = Capitalized Net income
MV = Market Value per Tax Declaration

 

10. Where:

 

CNI =

20% (AGP x SP)

(Since there is no data for Cost of Operations [CO], an assumed Net Income Rate [NIR] of 20% shall be used)

 

11. Entitled 'REVISED RULES AND REGULATIONS GOVERNING THE VALUATION OF LANDS VOLUNTARILY OFFERED OR COMPULSORY ACQUIRED PURSUANT TO REPUBLIC ACT NO. 6657,' issued on April 15, 1998.

12. As appearing in the Country STAT Philippines, Philippine Statistics Authority (PSA) website attached as Exhibits '2' to '2-c' and '3' to '3-c'; see rollo (G.R. No. 185048), p. 306.

13. As appearing in the Country STAT Philippines, PSA website attached as Exhibits '2-d' to '2-o' and '3-d' to '3-o'; see id. at 307.

14. See id. at 308.

15. See id.

16. See id. at 306.

17. See id. at 307.

18. See id.

19. See id.

20. See id. at 308.

21. See id.

22. The P1.00 difference is negligible due to rounding off.

23. See id. at 309.

24. See id.

25. See id.

26. See id.

27. Entitled 'AN ACT INSTITUTING A COMPREHENSIVE AGRARIAN REFORM PROGRAM TO PROMOTE SOCIAL JUSTICE AND INDUSTRIALIZATION, PROVIDING THE MECHANISM FOR ITS IMPLEMENTATION, AND FOR OTHER PURPOSES,' as approved on June 10, 1988.

28. Entitled 'AN ACT STRENGTHENING THE COMPREHENSIVE AGRARIAN REFORM PROGRAM (CARP), EXTENDING THE ACQUISITION AND DISTRIBUTION OF ALL AGRICULTURAL LANDS, INSTITUTING NECESSARY REFORMS, AMENDING FOR THE PURPOSE CERTAIN PROVISIONS OF REPUBLIC ACT NO. 6657, OTHERWISE KNOWN AS THE COMPREHENSIVE AGRARIAN REFORM LAW OF 1988, AS AMENDED, AND APPROPRIATING FUNDS THEREFOR,' as approved on August 7, 2009.

29.Alfonso v. LBP, 801 Phil. 217 (2016).

30. Entitled 'RULES AND REGULATIONS AMENDING THE VALUATION OF LANDS VOLUNTARILY OFFERED AND COMPULSORILY ACQUIRED AS PROVIDED FOR UNDER ADMINISTRATIVE ORDER NO. 17, SERIES OF 1989, AS AMENDED, ISSUED PURSUANT TO REPUBLIC ACT NO. 6657,' issued on October 30, 1992.

31. Entitled 'REVISING THE RULES AND REGULATIONS COVERING THE VALUATION OF LANDS VOLUNTARILY OFFERED OR COMPULSORILY ACQUIRED AS EMBODIED IN ADMINISTRATIVE ORDER NO. 06, SERIES OF 1992,' issued on September 13, 1994.

32. See Item II.A.A.2 of DAR AO No. 6, Series of 1992, as amended, and Item, II.A.A.2 of DAR AO No. 5, Series of 1998.

33. See rollo (G.R. No. 185048), p. 305.

34. As appearing in the Country STAT Philippines, PSA website attached as Exhibits '2' to '2-c' and '3' to '3-c'; see id. at 306.

35. See Alfonso v. LBP, 801 Phil. 217 (2016), citing Item II.B.B.2 of DAR AO No. 05, Series of 1998.

36. As appearing in the Country STAT Philippines, PSA website attached as Exhibits '2-d' to '2-o' and '3-d' to '3-o'; see rollo (G.R. No. 185048), p. 307.

37. See id. at 308.

38. See id. at 307.

39. See id. at 308.

40. See id. at 309.

41. This is the proper amount of 1998 LV.

42.LBP v. Heirs of Barrameda, G.R. No. 221216, July 13, 2020.

43. See LBP v. Manzano, 824 Phil. 339 (2018).