Determination of Just Compensation

Land Bank of the Philippines Vs. Yatco

LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
YATCO AGRICULTURAL ENTERPRISES, Respondent.
G.R. No.172551
January 15, 2014
Ponente: BRION

Nature of Case:
Petition for Review on certiorari.
BRIEF
This case is a consolidated petition of one seeking review of the
decision of CA modifying the decision of RTC acting as a Special
Agrarian Court, and another for mandamus to compel the RTC to
issue a writ of execution and to direct Judge Caspillo to inhibit.
FACTS
Pursuant to the CARP, Wycoco voluntarily offered to sell his land to
the DAR for P14.9 million. However, the offered price of the DAR is
P2,280,159.82. He rejected the offer. Hence, he filed a case before
the RTC for the determination of just compensation. The RTC ruled
in his favor. The RTC, in arriving at the valuation of the land, took
judicial notice of the alleged prevailing market value of agricultural
lands in the place without apprising the parties of its intention to
take judicial notice thereof.
ISSUE/S of the CASE
The RTC-SAC determination of just compensation for the property
was determined in accordance with law?

ACTIONS of the COURT

Provincial Agrarian Reform Adjudicator (PARAD) - The PARAD

computed the value of the property at P16,543,800.00;10 it used
the propertys current market value (as shown in the tax
declaration that Yatco submitted) and applied the formula "MV x
2."
RTC / Special Agrarian Court: RTC-SAC fixed the just
compensation for the property at P200.00 per square meter.The
RTC-SAC arrived at this valuation by adopting the valuation set by
the RTC of Calamba City. The RTC-SAC subsequently denied the
LBPs motion for reconsideration.
CA: The CA dismissed the LBPs appeal.19 Significantly, it did not
find the LBPs assigned errors the RTC-SACs reliance on the
valuation made by Branches 35 and 36 in the civil cases to be
persuasive.
SC:
Petition granted and CA decision REVERSED. REMANDED
RTC case for its determination of just compensation under the
terms of Section 17 of Republic Act No. 6657 and Department of
Agrarian Reform Administrative Order No. 5, series of 1998, as
amended.
COURT RATIONALE ON THE ABOVE FACTS
Just compensation; determination of just compensation is
fundamentally a judicial function that the Judiciary exercises within
the parameters of the law.
In the exercise of the Courts essentially judicial function of
determining just compensation, the RTC-SACs are not granted
unlimited discretion and must consider and apply the enumerated
factors in R.A. No. 6657 and the DAR formula (in AO 5-98) that
reflect these factors. These factors and formula provide the uniform
framework or structure for the computation of the just
compensation for a property subject to agrarian reform. When
acting within the parameters set by the law itself, the RTC-SACs,
however, are not strictly bound to apply the DAR formula to its
minute detail, particularly when faced with situations that do not
warrant the formulas strict application; they may, in the exercise of
their discretion, relax the formulas application to fit the factual
situations before them. They must, however, clearly explain the

reason for any deviation from the factors and formula that the law
and the rules have provided.

The rules allow the courts to take judicial notice of certain facts; the
RTC-SACs valuation is erroneous.
1. The RTC-SAC fully disregarded Section 17 of R.A. No. 6657
and DAR AO 5-98 and thus acted outside the contemplation
of the law.
2. 2. The valuation fixed by Branches 35 and 36 was
inapplicable to the property

SUPREME COURT RULING:

WHEREFORE, in view of these considerations, we hereby GRANT the
petition. Accordingly, we REVERSE and SET ASIDE the decision
dated January 26, 2006 and the resolution dated May 3, 2006 of the
Court of Appeals in CA-G.R. SP No. 87530, and REMAND Agrarian
Case No. SP-064(02) to the Regional Trial Court of San Pablo City,
Branch 30, for its determination of just compensation under the
terms of Section 17 of Republic Act No. 6657 and Department of
Agrarian Reform Administrative Order No. 5, series of 1998, as
amended.