G.R. No. 164195

Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 164195 February 6, 2007

APO FRUITS CORPORATION and HIJO PLANTATION, INC., Petitioners,
vs.
THE HON. COURT OF APPEALS and LAND BANK OF THE PHILIPPINES, Respondents.

D E C I S I O N

CHICO-NAZARIO, J.:

Apo Fruits Corporation (AFC) and Hijo Plantation, Inc. (HPI) are the registered owners of five parcels of agricultural lands located in San Isidro, Tagum, Davao Province, to wit:

Apo Fruits Corporation

Transfer Certificate of Title (TCT)¹ No. Area (Ha.)

T-113359² 115.2179

T-113366³ 525.1304

Hijo Plantation, Inc.⁴

TCT No. Area (Ha.)

T-10361 155.8408

T-10362 170.7980

T-10363 478.8920⁵

On 12 October 1995, AFC and HPI voluntarily offered to sell the above parcels of land to the government.⁶ After the initial processing at the Department of Agrarian Reform (DAR) of the Voluntary Offer to Sell (VOS)⁷ application of AFC and HPI, it was referred to the Land Bank of the Philippines (LBP) for initial valuation. On 16 October 1996, AFC and HPI received separately from the DAR’s Provincial Agrarian Reform Officer (PARO) of Davao province a notice of land acquisition and valuation, informing AFC that the value of the properties has been placed at ₱86,900,925.88 or ₱165,484.47 per hectare⁸ while HPI’s properties were valued at ₱164,478,178.14.⁹ 1awphi1.net Both AFC and HPI considered the valuations unreasonably low and inadequate as just compensation for the properties.

On 5 November 1996, AFC rejected the valuation for both TCTs No. T-113366 and No.113359.¹⁰ AFC applied for the shifting of the mode of acquisition for TCT No. 113359¹¹ from VOS to Voluntary Land Transfer/Direct Payment Scheme.¹² HPI also rejected the valuation of its three parcels of land covered by TCTs No. T-10361, No. T-10362 and No. T-10363. ¹³

Owing to the rejection by both AFC and HPI of LBP’s valuation, the DAR requested LBP to deposit the amounts equivalent to their valuations in the names and for the accounts of AFC and HPI.¹⁴ AFC thereafter withdrew the amount of ₱26,409,549.86, while HPI withdrew the amount of ₱45,481,706.76, both in cash from LBP. The DAR PARO then directed the Register of Deeds of Davao to cancel the TCTs of AFC and HPI to the said properties and to issue a new one in the name of the Republic of the Philippines.

After the issuance of the certificate of title in the name of the Republic of the Philippines, the Register of Deeds of Davao, upon the request of the DAR, issued TCTs and Certificates of Land Ownership Award to qualified farmer-beneficiaries.

On 14 February 1997, AFC and HPI filed separate complaints for determination of just compensation with the DAR Adjudication Board (DARAB). Despite the lapse of more than three years from the filing of the complaints, the DARAB failed and refused to render a decision on the valuation of the land. Hence, two complaints¹⁵ for determination and payment of just compensation were filed by AFC and HPI before Branch 2 of the Regional Trial Court (RTC) of Tagum City (acting as a Special Agrarian Court), which were subsequently consolidated.

Agrarian Case No. 54-2000¹⁶ filed by AFC covers two parcels of land in San Isidro, Tagum, Davao, with an aggregate area of 640.3483 hectares previously assessed by LBP with a valuation of ₱86,900,925.88.

On the other hand, Agrarian Case No. 55-2000¹⁷ filed by HPI relates to the other three parcels of land in Tagum City, with a total area of 814.5308 hectares, likewise, previously assessed by LBP with a valuation of ₱164,478,178.14.

Summons was served on 23 May 2000 to defendants DAR and LBP. The trial court appointed as Commissioners¹⁸ persons it considered competent, qualified and disinterested to determine the proper valuation of the properties.

LBP submitted its Answer on 26 July 2000,¹⁹ while the DAR Secretary, represented by PARO Pedro P. Gumabao, filed its Answer²⁰ on 18 August 2000.

The pre-trial order issued by the trial court reads:

This Court will determine the all-embracing concept of Just Compensation, and whether the plaintiff is entitled to damages, and also whether the value of the land and improvements as determined by the Land Valuation of Land Bank for the determination of just compensation, and whether the plaintiff has violated Section 13 of DARAB new rules and procedure.²¹

The commissioners, together with all the representatives of the parties, conducted an ocular inspection first on 25 August 2000²² and again on 16 December 2000.²³

On 21 May 2001, the court-appointed commissioners submitted their appraisal report.²⁴

On 14 September 2001, the case was considered submitted for decision.²⁵

After hearing, the trial court rendered a decision²⁶ dated 25 September 2001, the fallo thereof reads:

WHEREFORE, consistent with all the foregoing premises, judgment is hereby rendered by this Special Agrarian Court where it has determined judiciously and now hereby fixed the just compensation for the 1,388.6027 hectares of lands and its improvements owned by the plaintiffs: APO FRUITS CORPORATION and HIJO PLANTATION, INC., as follows:

First – Hereby ordering after having determined and fixed the fair, reasonable and just compensation of the 1,338.6027 hectares of land and standing crops owned by plaintiffs – APO FRUITS CORPORATION and HIJO PLANTATION, INC., based at only P103.33 per sq. meter, ONE BILLION THREE HUNDRED EIGHTY-THREE MILLION ONE HUNDRED SEVENTY-NINE THOUSAND PESOS (P1,383,179,000.00), Philippine Currency, under the current value of the Philippine Peso, to be paid jointly and severally to the herein PLAINTIFFS by the Defendants-Department of Agrarian Reform and its financial intermediary and co-defendant Land Bank of the Philippines, thru its Land Valuation Office;

Second – Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay plaintiffs-APO FRUITS CORPORATION and HIJO PLANTATION, INC., interests on the above-fixed amount of fair, reasonable and just compensation equivalent to the market interest rates aligned with 91-day Treasury Bills, from the date of the taking in December 9, 1996, until fully paid, deducting the amount of the previous payment which plaintiffs received as/and from the initial valuation;

Third – Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally the Commissioners’ fees herein taxed as part of the costs pursuant to Section 12, Rule 67 of the 1997 Rules of Civil Procedure, equivalent to, and computed at Two and One-Half (2 ½) percent of the determined and fixed amount as the fair, reasonable and just compensation of plaintiffs’ land and standing crops plus interest equivalent to the interest of the 91-Day Treasury Bills from date of taking until full payment;

Fourth - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally the attorney’s fees to plaintiffs equivalent to, and computed at ten (10%) Percent of the determined and fixed amount as the fair, reasonable and just compensation of plaintiffs’ land and standing crops, plus interest equivalent to the 91-Day Treasury Bills from date of taking until the full amount is fully paid;

Fifth - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office to deduct from the total amount fixed as fair, reasonable and just compensation of plaintiffs’ properties the initial payment paid to the plaintiffs;

Sixth - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay the costs of the suit; and

Seventh - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay all the aforementioned amounts thru The Clerk of Court of this Court, in order that said Court Officer could collect for payment any docket fee deficiency, should there be any, from the plaintiffs.²⁷

LBP filed a Motion for Reconsideration²⁸ on 5 October 2001 mainly on the ground that the trial court based its valuation on the value of residential and industrial lands in the area forgetting that the lands involved are agricultural. LBP also sought a reconsideration of the award of attorney’s fees, the interest on the compensation over the lands and the order of the trial court regarding the payment of commissioners’ fees.

In an Order dated 5 December 2001,²⁹ the trial court modified its decision as follows:

WHEREFORE, premises considered, IT IS HEREBY ORDERED that the following modifications as they are hereby made on the dispositive portion of this Court’s consolidated decision be made and entered in the following manner, to wit:

On the Second Paragraph of the Dispositive Portion which now reads as follows, as modified:

Second - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay plaintiffs-APO FRUITS CORPORATION and HIJO PLANTATION, INC., interest at the rate of Twelve (12%) Percent per annum on the above-fixed amount of fair, reasonable and just compensation computed from the time the complaint was filed until the finality of this decision. After this decision becomes final and executory, the rate of TWELVE (12%) PERCENT per annum shall be additionally imposed on the total obligation until payment thereof is satisfied, deducting the amounts of the previous payments by Defendant-LBP received as initial valuation;

On the Third Paragraph of the Dispositive Portion which Now Reads As Follows, As Modified:

Third - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally the Commissioners’ fees herein taxed as part of the costs pursuant to Section 12, Rule 67 of the 1997 Rules of Civil Procedure, equivalent to, and computed at Two and One-Half (2 ½) percent of the determined and fixed amount as the fair, reasonable and just compensation of plaintiffs’ land and standing crops and improvements;

On the Fourth Paragraph of the Dispositive Portion which Now Reads As follows, As Modified:

Fourth - Hereby ordering Defendants – DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally the attorney’s fees to plaintiffs equivalent to, and computed at ten (10%) Percent of the determined and fixed amount as the fair, reasonable and just compensation of plaintiffs’ land and standing crops and improvements.

Except for the above-stated modifications, the consolidated decision stands and shall remain in full force and effect in all other respects thereof.³⁰

From this Order, LBP filed a Notice of Appeal dated 27 December 2001.³¹ The same was given due course in the Order of the RTC dated 15 May 2002.³² In the same Order, the RTC set aside its Order dated 5 December 2001 granting execution pending appeal.

Subsequently, the trial court, citing this Court’s ruling in the case of "Land Bank of the Philippines v. De Leon,"³³ that a petition for review, not an ordinary appeal, is the proper mode of appeal from a decision on the determination of just compensation rendered by a special agrarian court, issued an Order dated 4 November 2002³⁴ recalling its Order dated 15 May 2002 and directed LBP to file a Petition for Review within the reglementary period. LBP filed a Motion for Reconsideration³⁵ claiming that the case of Land Bank of the Philippines v. De Leon was not yet final at that time; hence, it is not certain whether the decision in that case would have a retroactive effect and that appeal is the appropriate remedy. This was denied by the trial court in its Order dated 12 February 2003.³⁶

On 28 March 2003, LBP filed a Petition for Certiorari³⁷ before the Court of Appeals assailing the 4 November 2002 and 12 February 2003 orders of the trial court.

The Court of Appeals found the petition of LBP meritorious. In a decision³⁸ dated 12 February 2004, the Court of Appeals held:

WHEREFORE, the petition is GRANTED and the assailed orders dated November 4, 2002 and February 12, 2003 are NULLIFIED and, accordingly, SET ASIDE.³⁹

AFC and HPI filed a joint Motion for Reconsideration⁴⁰ which the Court of Appeals denied in its Resolution dated 21 June 2004.⁴¹

Earlier, on 23 January 2003, DAR filed its own separate petition before the Court of Appeals by way of a Petition for Review.⁴² In a Resolution⁴³ dated 2 April 2003, the Court of Appeals dismissed the petition of the DAR for failure to state the material dates under Rule 42, Section 2,⁴⁴ of the Rules of Court. The appellate court held:

The importance of stating the material dates cannot be overemphasized. It is only through a statement thereof in the petition can it be determined whether or not the petition was filed on time. For its failure to state the material dates, the petition can and should be outrightly dismissed.

x x x x

The petition is also defective in that it failed to attach material portions of the record as would support the allegations in the petition. More specifically, copies of the alleged motion for reconsideration filed by the DAR, the order denying it, and the notice of appeal were not attached to the petition.

For all the foregoing, the court has no alternative but to dismiss the petition.

WHEREFORE, the petition is DISMISSED.⁴⁵

The Decision of the Court of Appeals in the Petition filed by the DAR in CA-G.R. SP No. 74879 became final and executory and entry of judgment was issued by the appellate court on 7 May 2003.⁴⁶

On the other hand, from the decision of the Court of Appeals in the Petition filed by LBP in CA-G.R. SP No. 76222, AFC and HPI filed the present Petition for Review on Certiorari raising the following issues:

I.

WHETHER OR NOT THE QUESTIONED DECISION AND RESOLUTION ARE IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT?

II.

WHETHER OR NOT RESPONDENT LBP IS BOUND BY THE DECISION OF COURT OF APPEALS IN CA-G.R. SP NO. 74879 AND IS THEREFORE PRECLUDED FROM FILING CA-G.R. SP NO. 76222?

III.

WHETHER OR NOT THE FILING BY RESPONDENT LBP OF CA-G.R. SP NO. 76222 IS ALREADY BARRED BY RES JUDICATA?

IV.

WHETHER OR NOT THE RULING OF THE SUPREME COURT IN THE ARLENE DE LEON CASE, GIVING ONLY PROSPECTIVE EFFECT TO ITS EARLIER RESOLUTION AS TO THE PROPER MODE OF APPEAL FROM DECISIONS OF SPECIAL AGRARIAN COURTS IS APPLICABLE IN THE INSTANT CASE?

V.

WHETHER OR NOT RESPONDENT LBP WAS DEPRIVED OF DUE PROCESS AND/OR OF ITS RIGHT TO APPEAL?

VI.

WHETHER OR NOT THE SUBJECT PETITION (CA-G.R. SP NO. 76222) WAS MERELY INTERPOSED TO DELAY THE EXECUTION OF SPECIAL AGRARIAN COURT’S "DECISION" WHICH IS BASED ON EVIDENCE DULY PRESENTED AND PROVED?⁴⁷

AFC and HPI pray that the Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 76222 be reversed and set aside and that the Decision of the RTC dated 25 September 2001 in Agrarian Cases No. 54-2000 and No. 55-2000 be declared as final and executory.⁴⁸

In the case of Land Bank of the Philippines v. De Leon, decided on 10 September 2002, respondents are the registered owners of a parcel of land. They voluntarily offered the subject property for sale to the government pursuant to Republic Act No. 6657. Unable to agree on the valuation of the property offered by the DAR, respondents filed a petition with the RTC (acting as a Special Agrarian Court) to fix the just compensation of the property. In due time, the RTC rendered judgment fixing the compensation of the property. Before the Court of Appeals, the DAR and LBP filed separate petitions. The DAR filed a Petition for Review of the decision of the RTC which was assigned to the Special 3rd Division of the appellate court. LBP, on the other hand, raised the case on appeal to the Court of Appeals by way of ordinary appeal. The same was assigned to the 4th Division of the Court of Appeals. The petition of the DAR was given due course. On the other hand, the Court of Appeals dismissed LBP’s ordinary appeal on the ground that the same was erroneous. LBP filed a petition for review before this Court. In Land Bank, we explained:

A petition for review, not an ordinary appeal, is the proper procedure in effecting an appeal from decisions of the Regional Trial Courts acting as Special Agrarian Courts in cases involving the determination of just compensation to the landowners concerned. Section 60 of RA 6657 clearly and categorically states that the said mode of appeal should be adopted. There is no room for a contrary interpretation. Where the law is clear and categorical, there is no room for construction, but only application.⁴⁹

LBP filed a Motion for Reconsideration. In a Resolution of this Court dated 20 March 2003, this Court emphasized the prospective application of the Decision dated 10 September 2002.

WHEREFORE, the motion for reconsideration dated October 16, 2002 and the supplement to the motion for reconsideration dated November 11, 2002 are PARTIALLY GRANTED. While we clarify that the Decision of this Court dated September 10, 2002 stands, our ruling therein that a petition for review is the correct mode of appeal from decisions of Special Agrarian Courts shall apply only to cases appealed after the finality of this Resolution.⁵⁰ (Emphasis supplied.)

Essentially therefore, the rule is that a decision of the RTC acting as a Special Agrarian Court should be brought to the Court of Appeals via a Petition for Review. The Court of Appeals will no longer entertain ordinary appeals thereon. However, this rule applies only after the finality of the Resolution of this Court in Land Bank of the Philippines v. De Leon dated 20 March 2003.

In this case, the Court of Appeals correctly ruled when it gave due course to the appeal of LBP. LBP’s Notice of Appeal was filed on 27 December 2001. This was given due course by the RTC in an Order dated 15 May 2002. LBP’s appeal was, thus, perfected before this Court’s Resolution in the aforementioned Land Bank of the Philippines v. De Leon case. Hence, the Court of Appeals could give due course to LBP’s petition.

Next we proceed to determine the issue of whether or not the petition of LBP before the Court of Appeals is barred by the disposition of the Petition for Review filed by the DAR in CA-G.R. SP No. 74879 on the ground of res judicata.

The following are the elements of res judicata:

(a) The former judgment must be final;

(b) The court which rendered judgment must have jurisdiction over the parties and the subject matter;

(c) It must be a judgment on the merits; and

(d) There must be between the first and second actions identity of parties, subject matter, and cause of action.⁵¹

In this case, the third element of res judicata, i.e., that the former judgment must be on the merits, is not present. It must be remembered that the dismissal of CA-G.R. SP No. 74879 was based on technicality, that is, for failure on the part of the DAR to state material dates required by the rules. Having been dismissed based on a technicality and not on the merits, the principle of res judicata does not apply. Res judicata applies only where judgment on the merits is finally rendered on the first.⁵²

Having disposed of the procedural issues involved herein, we shall now proceed to resolve the substantive questions in this case.

This Court is aware that in the instant case, since LBP’s appeal before the Court of Appeals is to be given due course, the normal procedure is for us to remand the case to the appellate court for further proceedings. However, when there is enough basis on which a proper evaluation of the merits of petitioner’s case may be had, the Court may dispense with the time-consuming procedure in order to prevent further delays in the disposition of the case.⁵³ Indeed, remand of the case to the lower court for further reception of evidence is not conducive to the speedy administration of justice and it becomes unnecessary where the Court is in a position to resolve the dispute based on the records before it. On many occasions, the Court, in the public interest and expeditious administration of justice, has resolved action on the merits, instead of remanding them for further proceedings, as where the ends of justice would not be subserved by the remand of the case⁵⁴ or where the trial court had already received all the evidence of the parties.⁵⁵ Briefly stated, a remand of the instant case to the Court of Appeals would serve no purpose save to further delay its disposition contrary to the spirit of fair play.

It is already an accepted rule of procedure for us to strive to settle the entire controversy in a single proceeding,⁵⁶ leaving no root or branch to bear the seeds of future litigation. If, based on the records, the pleadings, and other evidence, the dispute can be resolved by us, we will do so to serve the ends of justice instead of remanding the case to the lower court for further proceedings.⁵⁷

The complete records of this case have already been elevated to this Court. The pleadings on record will fully support this adjudication. We have painstakingly gone over all of LBP’s representations and arguments, and we found that the material and decisive facts are hardly disputable. From another perspective, due consideration should also be given to AFC and HPI for having voluntarily offered to sell their properties, a clear indication of AFC and HPI’s willingness to participate in the agrarian reform program of the government. In turn, they must be given compensation that is just and timely. Records indicate that the case has been dragging on for more than ten years now without the landowners having been fully compensated. We cannot countenance such a glaring indifference to AFC and HPI’s rights as land owners – they should be afforded all that is just and due them. To be sure, they deserve nothing less than full compensation to give effect to their substantive rights.

While eminent domain lies as one of the inherent powers of the state, there is no requirement that it undertake a prolonged procedure, or that the payment of the private owner be protracted as far as practicable.⁵⁸

It is not controverted that this case started way back on 12 October 1995, when AFC and HPI voluntarily offered to sell the properties to the DAR. In view of the failure of the parties to agree on the valuation of the properties, the Complaint for Determination of Just Compensation was filed before the DARAB on 14 February 1997. Despite the lapse of more than three years from the filing of the complaint, the DARAB failed to render a decision on the valuation of the land. Meantime, the titles over the properties of AFC and HPI had already been cancelled and in their place a new certificate of title was issued in the name of the Republic of the Philippines, even as far back as 9 December 1996. A period of almost 10 years has lapsed. For this reason, there is no dispute that this case has truly languished for a long period of time, the delay being mainly attributable to both official inaction and indecision,⁵⁹ particularly on the determination of the amount of just compensation, to the detriment of AFC and HPI, which to date, have yet to be fully compensated for the properties which are already in the hands of farmer-beneficiaries, who, due to the lapse of time, may have already converted or sold the land awarded to them.

Verily, these two cases could have been disposed with dispatch were it not for LBP’s counsel causing unnecessary delay. At the inception of this case, DARAB, an agency of the DAR which was commissioned by law to determine just compensation, sat on the cases for three years, which was the reason that AFC and HPI filed the cases before the RTC. We underscore the pronouncement of the RTC that "the delay by DARAB in the determination of just compensation could only mean the reluctance of the Department of Agrarian Reform and the Land Bank of the Philippines to pay the claim of just compensation by corporate landowners."⁶⁰

To allow the taking of landowners’ properties, and to leave them empty-handed while government withholds compensation is undoubtedly oppressive.⁶¹

It is in light of the foregoing that this Court will now undertake the final resolution of the present controversy which, as already elucidated, is within the power of this Court to do.

The concept of just compensation embraces not only the correct determination of the amount to be paid to the owners of the land, but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered "just" inasmuch as the property owner is being made to suffer the consequences of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss.⁶² Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator.⁶³ It has been repeatedly stressed by this Court that the measure is not the taker’s gain but the owner’s loss.⁶⁴ The word "just" is used to intensify the meaning of the word "compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, and ample.⁶⁵

The two main issues, thus, for determination of this Court are the date of the taking of the property and the amount of just compensation.⁶⁶

First, it is settled that the property was taken on 9 December 1996, when a Certificate of Title was issued in favor of the Republic of the Philippines, and the Certificates of Title of AFC and HPI were cancelled. The farmer-beneficiaries themselves took possession of the subject properties on 2 January 1997.⁶⁷

Second, on payment of just compensation, we have previously held:

Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended for public use upon payment of just compensation to the owner. Obviously, there is no need to expropriate where the owner is willing to sell under terms also acceptable to the purchaser, in which case an ordinary deed of sale may be agreed upon by the parties. It is only where the owner is unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that the power of eminent domain will come into play to assert the paramount authority of the State over the interests of the property owner. Private rights must then yield to the irresistible demands of the public interest on the time-honored justification, as in the case of the police power, that the welfare of the people is the supreme law.

But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no power is absolute). The limitation is found in the constitutional injunction that "private property shall not be taken for public use without just compensation" and in the abundant jurisprudence that has evolved from the interpretation of this principle. Basically, the requirements for a proper exercise of the power are: (1) public use and (2) just compensation.⁶⁸ (Emphases supplied.)

Section 57 of Republic Act No. 6657 (Comprehensive Agrarian Reform Law) provides:

SEC. 57. Special Jurisdiction. – The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts, unless modified by this Act.

The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision.

To implement the provisions of Republic Act No. 6657, Rule XIII, Section 11 of the DARAB Rules of Procedure, provides:

Land Valuation and Preliminary Determination and Payment of Just Compensation. – The decision of the Adjudicator on land valuation and preliminary determination and payment of just compensation shall not be appealable to the Board but shall be brought directly to the Regional Trial Courts designated as Special Agrarian Courts within fifteen (15) days from receipt of the notice thereof. Any party shall be entitled to only one motion for reconsideration. (Emphasis supplied.)

The next question now crops up, who shall determine just compensation? It is now settled that the valuation of property in eminent domain is essentially a judicial function which is vested with the RTC acting as Special Agrarian Court. The same cannot be lodged with administrative agencies⁶⁹ and may not be usurped by any other branch or official of the government.⁷⁰

We now come to the issue of just compensation.

LBP argues that the trial court’s valuation of the subject landholdings has incorporated irrelevant and/or immaterial factors such as the schedule of market values given by the City Assessor of Tagum, the comparative sales of adjacent lands and the commissioners’ report.⁷¹

Section 17 of Republic Act No. 6657, which is particularly relevant, providing as it does the guideposts for the determination of just compensation, reads, as follows:

Sec. 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 farm-workers 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.⁷²

The RTC provided the following elucidation in its assailed decision:

The recommendation of the Commissioners’ Report for a value of ₱85.00 per sq.m. or ₱850,000.00 per hectare (sic) is founded on evidence. The schedule of market values of the City of Tagum as per its 1993 and 1994 Revision of Assessment and Property Classification (Exhibit "J-6" and "CC-6") give the lowest value for residential land at ₱100/sq.m. for 4th class residential land in 1993. In 1994, it gave the lowest value of ₱80.00/sq.m. for barangay residential lot. It appears that certain portions of the land in question have been classified as Medium Industrial District (Exhibit "J-4" and "CC-4"). The lowest value as for industrial land, 3rd class in a barangay is ₱130.00 sq.m. The average of these figures, using the lowest values in Exhibit "6" and "CC-6" yields the figure of ₱103.33 which is even higher by 22.2% than that recommended by the Commissioners. It is even of judicial notice that assessments made by local governments are much lower than real market value. Likewise, the value of the improvements thereon, not even considered in the average of ₱103.33. If considered, this will necessarily result in a higher average value.

In said Appraisal Report, mention has been made on "improvements," and our Supreme Court in Republic vs. Gonzales, 50 O.G. 2461, decreed the rule, as follows:

If such improvements are permanent in character, consisting of good paved road, playgrounds, water system, sewerage and general leveling of the land suitable for residential lots together with electric installations and buildings, the same are important factors to consider in determining the value of the land. The original cost of such improvements may be considered, with due regard to the corresponding depreciation. (Davao vs. Dacudao, L-3741, May 8, 1952).

Note should be taken that in said Appraisal Report, permanent improvements on plaintiffs’ lands have been introduced and found existing, e.g., all weather-road network, airstrip, pier, irrigation system, packing houses, among others, wherein substantial amount of capital funding have been invested in putting them up.

This Court, however, notes that the comparative sales (Exhibits "A" to "F") referred to in the Appraisal Report are sales made after the taking of the land in 1996. However, in the offer of evidence, the plaintiff offered additional comparative sales of adjacent land from late 1995 to early 1997, ranging from a high of ₱580.00/sq.meter in September 1996 (Exhibit "L-4" for plaintiff Apo and "EE-4" for plaintiff Hijo) to a low of ₱146.02/sq.meter in October 1997 (Exhibits "L-2" and "EE-2"). The other sales in 1996 were in January 1996 for ₱530.00/sq.meter ( Exhs. "L-3" and "EE-3") and in December 1996 for ₱148.64/sq.meter (Exhs. "L-2" and "EE-1"). On the other hand, the sale in December 1995 (Exhs. "L-5" and "EE-5") was made for ₱530.00/sq.meter." The average selling price based on the foregoing transaction is ₱386.93/sq.meter. The same is even higher by around 350% than the recommended value of ₱85.00, as per the Commissioners’ Report.

The Cuervo Appraisal Report, on the other hand, gave a value of ₱84.53/sq. meter based on the Capitalized Income Approach. The said approach considered only the use of the land and the income generated from such use.

The just compensation for the parcels of land under consideration, taking into account the Schedule of Market Values given by the City Assessor of Tagum (Exhs. "J-6" for Apo "CC-6" for Hijo), the comparative sales covering adjacent lands at the time of taking of subject land, the Cuervo Report, and the Appraisal Report is hereby fixed at ₱103.33/sq.meter.

The valuation given by Cuervo and the Appraisal Report of ₱84.53 and ₱85.00, respectively, in this Court’s judgment, is the minimum value of the subject landholdings and definitely cannot in anyway be the price at which plaintiffs APO and/or HIJO might be willing to sell, considering that the parcels of land adjacent thereto were sold at much higher prices, specifically from a low of ₱146.02/sq.meter to a high of ₱580.00. The average of the lowest value under the 1993 and 1994 Revision of Assessment and Property Classification (Exhibits "J-6" and "CC-6") were already at ₱103.33/sq.meter, even without considering the improvements introduced on the subject landholdings.

Moreover, the Commission made the findings that "portions of the land subject of th(e) report may x x x increase to ₱330.00/sq.meter, specifically th(e) strips of land surrounding the provincial roads" and made the conclusion that "(c)learly, the value recommended by th(e) Commission, which is only about ₱85.00/sq.meter is way below the x x x assessed values, which effectively was fixed (as early as) 1994 or earlier than the Voluntary Offer to Sell of the above plaintiffs’ properties." In the absence of any evidence to the contrary, the said assessed values are presumed to be prevailing [in] December 1996, the time of taking of plaintiffs’ landholdings. The Commission further stated that the average of the said "assessed values as submitted by the City Assessor of Tagum City (is) ₱265.00/sq.meter." This Court, therefore, finds it unfair that the just compensation for the subject landholdings should only be fixed at ₱85.00/sq.meter.

It is similarly true, however, that the determination of just compensation cannot be made to the prejudice of defendants or the government for that matter.

Thus, the selling price of ₱580.00/sq. meter nor the average selling price of ₱386.93/sq. meter or the average assessed value of ₱265.00/sq. meter cannot be said to be the value at which defendants might be willing to buy the subject landholdings.

This Court, therefore, finds the price of ₱103.33/sq. meter for the subject landholdings fair and reasonable for all the parties. Said value is even lower than the lowest selling price of ₱148.64 for sale of adjacent land at the time of the taking of the subject landholdings [in] December 1996. It approximates, however, the average of the lowest values under the 1993 and 1994 Revision of Assessment and Property Clarification (Exhs. "J-6" and "CC-6") of ₱103.33. The said figure will further increase, if the Court will further consider the improvements introduced by plaintiffs, which should be the case. Moreover, the said value of ₱103.33/sq. meter is more realistic as it does not depart from the government recognized values as specified in the 1993 and 1994 Revised Assessment and Property Classification of Tagum City. This Court finds the evidence of the plaintiffs sufficient and preponderant to establish the value of ₱103.33/sq. meter.⁷³

The trial court further rationalized its award thus:

It may be admitted that plaintiffs’ properties are agricultural; however, it is simply beyond dispute that in going about the task of appraising real properties, as in the instant cases, "all the facts as to the condition of the property and its surroundings, its improvements and capabilities, may be shown and considered in estimating its value." (Manila Railroad Company vs. Velasquez, 32 Phil. 287, 314). It is undeniable that plaintiffs’ agricultural lands as borne out from the records hereof, and remaining unrebutted, shows that all weather-roads network, airstrip, pier, irrigation system, packing houses, and among numerous other improvements are permanently in place and not just a measly, but substantial amounts investments have been infused. To exclude these permanent improvements in rendering its valuation of said properties would certainly be less than fair. x x x.

x x x x

The plaintiffs’ agricultural properties are just a stone’s throw from the residential and/or industrial sections of Tagum City, a fact defendants-DAR and LBP should never ignore. The market value of the property (plus the consequential damages less consequential benefits) is determined by such factors as the value of like properties, its actual or potential use, its size, shape and location as enunciated in B.H. Berkenkotter & Co. vs. Court of Appeals, 216 SCRA 584 (1992). To follow Defendants-DAR and LBP logic, therefore, would in effect restrict and delimit the broad judicial prerogatives of this Court in determining and fixing just compensation of properties taken by the State.

Proceedings before the Panel of Commissioners revealed that permanent improvements as mentioned above exist inside the lands subject of this complaints. It was also established during the trial proper upon reception of the evidence of the plaintiffs which clearly revealed the character, use and valuation of the lands surrounding the properties involved in these cases, indicating the strategic location of the properties subject of these cases. The findings being that surrounding properties have been classified as residential, commercial or industrial. And yet defendant-LBP refused to acknowledge the factual basis of the findings of the Panel of Commissioners and insisted on its guideline in determining just compensation. x x x.⁷⁴

In arriving at its valuation of the subject properties, the RTC conducted a thorough and meticulous examination of all determining factors. It did not rely merely on the report of Commissioners nor on the Cuervo appraiser’s report. It took into consideration the schedule of market values of the City of Tagum per its 1993 and 1994 Revision of Assessment and Property Clasisification, value of the permanent improvements thereon, as well as comparative sales of adjacent lands from early 1995 to early 1997, among other factors.

Contrary to LBP’s claim, the above factors are neither irrelevant nor immaterial. When the trial court arrived at the valuation of a landowner’s property taking into account its nature as irrigated land, location along the highway, market value, assessor’s value and the volume and value of its produce, such valuation is considered in accordance with Republic Act No. 6657.⁷⁵

Even the Commissioners’ report which the trial court took into consideration may not be dismissed as irrelevant. In the first place the trial court acting as a special agrarian court is authorized to appoint commissioners to assist in the determination of just compensation.⁷⁶ In this case the Commissioners’ report was submitted only after ocular inspections were conducted on the landholdings to give them a better idea of their real value.⁷⁷

Conspicuously, the trial court did not merely rely solely on the appraisal report submitted by the Commissioners. The trial court conducted hearings for the purpose of receiving the parties’ evidence.

Clearly evident from the records of this case is that in the proceedings before the Commission constituted by the RTC of Tagum City, Branch 2, to fix the just compensation for the properties, the LBP and the DAR were given all the opportunities to justify their stances. Thus:

[T]he Commission set another hearing on February 23, 2001 at 9:00 a.m. at the Function Room, Marbella mansion, Rizal Street, Davao City, to give the LBP the opportunity to present evidence. The LBP counsels, Attys. Batingana and Sembrano, instead of presenting witnesses and other evidence, manifested that they will submit a position paper within fifteen (15) days from the date of the hearing. This was granted by the Chairman of the Commission, who also gave the plaintiff the opportunity to submit within five (5) days, if they so desire, their rejoinder.

Inspite of the lapse of the period, the LBP failed to file its position paper.

x x x x

The plaintiffs have presented evidence to establish the value of their properties before the Court-appointed Commissioners, as well as before this Court. The Commissioners who acted and performed their assigned tasks under their Oaths of Office are deemed a surrogate or extension of the Court itself. (Secs. 3 and 4, Rule 32 of the 1997 Rules of Civil Procedure). Defendant-DAR and Defendant-LBP failed to present evidence during the hearings set by the Commissioners on February 5, 2001, and February 23, 2001, for the presentation of their evidence. This Court gave Defendant Land Bank and Defendant DAR additional opportunities to present evidence. Defendant Land Bank and DAR asked for extensions to submit their evidence in its motion dated July 27, 2001, which was granted by the Court. All exhibits and other documents offered in evidence were admitted, after which this Court issued an order that these two cases were submitted for resolution.⁷⁸

Given the already exhaustive analysis made by the RTC, this Court is convinced that the trial court correctly determined the amount of just compensation due to AFC and HPI.

WHEREFORE, premises considered, the instant Petition is PARTIALLY GRANTED. While the Decision, dated 12 February 2004, and Resolution, dated 21 June 2004, of the Court of Appeals in CA-G.R. SP No. 76222, giving due course to LBP’s appeal, are hereby AFFIRMED, this Court, nonetheless, RESOLVES, in consideration of public interest, the speedy administration of justice, and the peculiar circumstances of the case, to give DUE COURSE to the present Petition and decide the same on its merits. Thus, the Decision, dated 25 September 2001, as modified by the Decision, dated 5 December 2001, of the Regional Trial Court of Tagum City, Branch 2, in Agrarian Cases No. 54-2000 and No. 55-2000 is AFFIRMED. No costs.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice ROMEO J. CALLEJO, SR.
Asscociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice

Footnotes

¹ Records of Agrarian Case No. 55-2000, Book I, Annex C, p. 13; Both land titles (TCTs No. 113359 and No. 113366) were previously covered by TCT No. 50976.

² Id. at Annex A, p. 5.

³ Id at 6.

⁴ Id. at 135.

⁵ Rollo, p. 259.

⁶ Pursuant to Republic Act No. 6657, as amended, otherwise known as the Comprehensive Agrarian Reform Law of 1988, effective 15 June 1988. (Records of Agrarian Case No. 55-2000, Book I, Annex B, p. 9.)

⁷ Voluntary Offer to Sell (VOS) – A scheme wherein landowner/s voluntarily offer their agricultural lands, including improvements thereon, if any, for coverage. (Records, p. 592) DAR Administrative Order No. 5, Series of 1998.

⁸ Records of Agrarian Case No. 55-2000, Book I, p. 13.

⁹ Id. at 15.

¹⁰ Id. at 19.

¹¹ Id. at 19.

¹² Republic Act No. 6657, Sec. 20. Voluntary Land Transfer. – Landowners of agricultural lands subject to acquisition under this Act may enter into a voluntary arrangement for direct transfer of their lands to qualified beneficiaries subject to the following guidelines:

(a) All notices for voluntary land transfer must be submitted to the DAR within the first year of the implementation of the CARP. Negotiations between the landowners and qualified beneficiaries covering any voluntary land transfer which remain unresolved after one (1) year shall not be recognized and such land shall instead be acquired by the government and transferred pursuant to this Act.

(b) The terms and conditions of such transfer shall not be less favorable to the transferee than those of the government’s standing offer to purchase from the landowner and to resell to the beneficiaries, if such offers have been made and are fully known to both parties.

(c) The voluntary agreement shall include sanctions for non-compliance by either party and shall be duly recorded and its implementation monitored by the DAR.

¹³ Records of Agrarian Case No. 55-2000, Book I, p. 461.

¹⁴ Id. at 464.

¹⁵ Agrarian Case No. 54-2000 entitled, Apo Fruits Corporation v. Secretary of Agrarian Reform and Land Bank of the Philippines, and Agrarian Case No. 55-2000 entitled, Hijo Plantation, Inc. v. Secretary of Agrarian Reform and Land Bank of the Philippines.

¹⁶ Records of Agrarian Case No. 54-2000, Book I, pp. 1-5.

¹⁷ Records of Agrarian Case No. 55-2000, Book I, pp. 1-5 .

¹⁸ Id. at 71. Appointed were: Atty. Cesar V. Arañas, Retired Provincial Assessor of Davao Province; Retired City Assessor of Davao City; and Retired Director – Finance, Region XI, Davao City, to act as the Chairman of the Panel of Commissioners;

Mr. Alfredo H. Silawan, incumbent City Assessor of Tagum City, Davao del Norte, to act as Member.

Mr. Wilfredo G. dela Cerna, incumbent City Treasurer of Tagum City, Davao del Norte, to act as Member.

¹⁹ Id. at 93.

²⁰ Id. at 95.

²¹ Id. at 188.

²² Id. at 129.

²³ Id. at 181.

²⁴ Id. at 328. This Commission therefore recommends:

a) The amount of ONE BILLION ONE HUNDRED THIRTY-ONE MILLION SIX HUNDRED THOUSAND PESOS (₱1,131,600,000.00) under the current value of the Philippine Peso, computed as the JUST COMPENSATION for the properties covered by these cases, to be paid jointly and severally by the Department of Agrarian Reform and/or the Land Bank of the Philippines and deposited in an authorized bank;

b) Interest on the abovementioned amount equivalent to the market interest rates aligned with 91-day treasury bills, from the date of taking in 1996, until fully paid, to be paid jointly and severally by the Department of Agrarian Reform and/or the Land Bank of the Philippines and deposited in an authorized bank;

c) Defendants DAR/LBP jointly and severally pay all the fees payable to the Commissioners herein named, taxed, as part of all the costs per Section 12, Rule 67 of the 1997 Rules of Civil Procedure, as amended.

WHEREFORE, the Commission respectfully submits this Appraisal Report to this Honorable Special Agrarian Court, with a firm belief that the amount arrived at is JUST.

The Panel of Commissioners pray for such other reliefs as may be just and equitable under the premises.

At Davao City and Tagum City, for the City of Tagum, this 17th day of May 2001.

(Sgd.)CESAR V. ARAÑAS
Chairman (Sgd.)ALFREDO M. SILAWAN
Member

²⁵ Records of Agrarian Case No. 55-2000, Book I, p. 707.

²⁶ Id. at 747-795. Penned by Acting Presiding Judge Erasto D. Salcedo.

²⁷ CA rollo, pp. 131-133.

²⁸ Records of Agrarian Case No. 55-2000, Book I, p. 792; DAR also filed its Motion for Reconsideration on the same date, i.e., 5 October 2001. (Records of Agrarian Case No. 55-2000, Book I, p. 799.)

²⁹ CA rollo, pp. 141-160.

³⁰ Id. at 158-160.

³¹ Id. at 161.

³² Id. at 166.

³³ 437 Phil. 347 (2002).

³⁴ CA rollo, pp. 47-48.

³⁵ Id. at 168.

³⁶ Id. at 49-54.

³⁷ Id. at 2-46. Docketed as CA-G.R. SP No. 76222.

³⁸ Id. at 579-588. Penned by Associate Justice Rebecca De Guia-Salvador with Associate Justices Romeo A. Brawner and Jose C. Reyes, Jr., concurring.

³⁹ Id. at 588.

⁴⁰ Id. at 599.

⁴¹ Id. at 686.

⁴² Id. at 289-306. Docketed as CA-G.R. SP No. 74879.

⁴³ Id. at 631-636. Penned by Associate Justice Oswaldo D. Agcaoili with Associate Justices Perlita J. Tria-Tirona and Edgardo F. Sundiam, concurring.

⁴⁴ SEC. 2. Form and contents. – The petition shall be filed in seven (7) legible copies x x x; (b) indicate the specific material dates showing that it was filed on time; x x x.

⁴⁵ CA rollo, pp. 633-636.

⁴⁶ Id. at 638.

⁴⁷ Rollo, p. 262.

⁴⁸ Id. at 287-288.

⁴⁹ Land Bank of the Philippines v. De Leon, supra note 33 at 356.

⁵⁰ Land Bank of the Philippines v. De Leon, 447 Phil. 495, 505 (2003).

⁵¹ TF Ventures, Inc. v. Matsuura, G.R. No 154177, 9 June 2004, 431 SCRA 526, 532-533.

⁵² David v. Navarro, G.R. No. 145284, 11 February 2004, 422 SCRA 499, 511.

⁵³ Somoso v. Court of Appeals, G.R. No. 78050, 23 October 1989, 178 SCRA 654, 663; Bach v. Ongkiko Kalaw, G.R. No. 160334, 11 September 2006.

⁵⁴ Real v. Belo, G.R. No. 146224, 17 January 2007; Golangco v. Court of Appeals, 347 Phil. 771, 778 (1997); Heirs of Crisanta Y. Gabriel-Almoradie v. Court Appeals, G.R. No. 91385, 4 January 1994, 229 SCRA 15, 29; Republic v. Central Surety & Insurance Co., 134 Phil. 631 (1968).

⁵⁵ Samal v. Court of Appeals, 99 Phil 230, 233 (1956).

⁵⁶ Bunao v. Social Security System, G.R. No. 159606, 13 December 2005, 477 SCRA 564, 571.

⁵⁷ Vallejo v. Court of Appeals, G.R. No. 156413, 14 April 2004, 427 SCRA 658, 668; San Luis v. Court of Appeals, 417 Phil. 598, 605 (2001); Chua v. Court of Appeals, 338 Phil. 262, 273 (1997); Golangco v. Court of Appeals, 347 Phil. 771, 778 (1997).

⁵⁸ Republic v. Gingoyon, G.R. No. 166429, 19 December 2005, 478 SCRA 474, 532.

⁵⁹ Rocamora v. Regional Trial Court-Cebu (Branch VIII), G.R. No. L-65037, 23 November 1988, 167 SCRA 615, 624.

⁶⁰ RTC Decision, p. 40; CA rollo, p. 124.

⁶¹ Land Bank of the Philippines v. Court of Appeals, 327 Phil. 1047, 1055 (1996).

⁶² Estate of Salud Jimenez v. Philippine Export Processing Zone, G.R. No. 137285, 16 January 2001, 349 SCRA 240, 264; Land Bank of the Philippines v. Court of Appeals, id. at 1054, quoting Municipality of Makati v. Court of Appeals, G.R. Nos. 89898-99, 1 October 1990, 190 SCRA 207, 213.

⁶³ Manila Railroad Co. v. Velasquez, 32 Phil. 286, 313 (1915).

⁶⁴ Province of Tayabas v. Perez, 66 Phil. 467, 469 (1938); J.M. Tuason & Co., Inc. v. Land Tenure Administration, G.R. No. L-21064, 18 February 1970, 31 SCRA 413, 432; Manotok v. National Housing Authority, G.R. Nos. L-55166-67, 21 May 1987, 150 SCRA 89.

⁶⁵ City of Manila v. Estrada, 25 Phil. 208, 234 (1913).

⁶⁶ Records of Agrarian Case No. 55-2000, Book I, pp. 332, 344.

⁶⁷ Id. at 345.

⁶⁸ Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. No. 78742, 14 July 1989, 175 SCRA 343, 376.

⁶⁹ Land Bank of the Philippines v. Wycoco, 464 Phil. 83, 84 (2004); Export Processing Zone Authority v. Dulay, G.R. No. L-59603, 29 April 1987, 149 SCRA 305, 312; Belen v. Court of Appeals, G.R. No. L-45390, 15 April 1988, 160 SCRA 291, 295, citing National Power Corporation v. Jocson, G.R. Nos. 94193-99, 25 February 1992, 206 SCRA 520, 540; Land Bank of the Philippines v. Natividad, G.R. No. 127198, 16 May 2005, 458 SCRA 441, 451; Republic v. Court of Appeals, 331 Phil 1072 (1996), cited in Philippine Veterans Bank v. Court of Appeals, 379 Phil. 141, 147 (2000).

⁷⁰ Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, supra note 68 at 380.

⁷¹ Rollo, p. 351.

⁷² Otherwise stated, the determination of just compensation involves the examination of the following factors specified in Section 17 of Republic Act No. 6657 as amended.

1. the cost of the acquisition of the land;

2. the current value of like properties;

3. its nature, actual use and income;

4. the sworn valuation by the owner; the tax declarations;

5. the assessment made by government assessors;

6. the social and economic benefits contributed by the farmers and the farmworkers and by the government to the property; and

7. the non-payment of taxes or loans secured from any government financing institution on the said land, if any.

These factors as provided under Section 17 of Republic Act No. 6657 have been translated in a basic formula in DAR Administrative Order No. 6, Series of 1992, as amended by DAR Administrative Order No. 11, Series of 1994, issued pursuant to the DAR’s rule-making power to carry out the object and purposes of Republic Act No. 6657, as amended.

The formula stated in DAR Administrative Order No. 6, as amended, is as follows:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

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)

A.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall be:

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

A.2 When both the CS and CNI are not present and only MV is applicable, the formula shall be:

LV = MV x 2 ((Land Bank of the Philippines v. Banal, G.R. No. 143276, 20 July 2004, 434 SCRA 543, 549-550.)

⁷³ CA rollo, pp. 125-128.

⁷⁴ Id. at 146-149.

⁷⁵ Belen v. Court of Appeals, supra note 69 at 295; Land Bank of Philippines v. Natividad, supra note 69 at 452-453.

⁷⁶ Rule 67, Section 5, Revised Rules of Court.

⁷⁷ B.H Berkenkotter and Co. v. Court of Appeals, G.R. No. 89980, 14 December 1992, 216 SCRA 584, 589.

⁷⁸ CA rollo, pp. 112-121.

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