APO Fruits Corporation and Hijo Plantation, Inc., vs. Land Bank of the Philippines G.R. No.

164195 October 12, 2010 FACTS: Apo Fruits Corporation (AFC) and Hijo Plantation, Inc. (HPI) herein petitioners, were registered owners of vast tracks of land. They voluntarily offered to sell these landholdings to the government. AFC and HPI received separate notices of land acquisition and valuation of their properties at the assessed valuation of P165, 484.47 per hectare, AFCs land was valued at P86, 900,925.88, while HPIs property was valued at P164, 478,178.14. HPI and AFC rejected these valuations for being very low. The DAR requested the Land Bank of the Philippines (LBP) to deposit P26, 409,549.86 in AFCs bank account and P45, 481,706.76 in HPIs bank account, which amounts the petitioners then withdrew. The titles over AFC and HPIs properties were thereafter cancelled, and new ones were issued in the name of the Republic of the Philippines. Thereafter, AFC and HPI filed separate petitions for determination of just compensation with the (DARAB). When the DARAB failed to act on these petitions for more than three years, AFC and HPI filed separate complaints for determination and payment of just compensation with the Regional Trial Court, acting as a Special Agrarian Court. The RTC resolved the consolidated cases, fixing the just compensation for the petitioners 1,338.6027 hectares of land at P1, 383,179,000.00, with 12% interest per annum from the time the complaint was filed until finality of the decision. On motion for reconsideration, the RTC modified its decision by deleting the 12% interest due on the balance of the awarded just compensation. It justified the deletion by the finding that the LBP did not delay the payment of just compensation as it had deposited the pertinent amounts due to AFC and HPI within fourteen months after they filed their complaints for just compensation with the RTC. Hence, this petition. ISSUE: Whether or not the LBP violated the constitutional guarantee of the right to just compensation. HELD: The RTC, acting as a special agrarian court, determined the actual value of the petitioners landholdings to be P1, 383,179,000.00. This valuation, a finding of fact, has subsequently been affirmed by this Court, and is now beyond question. In eminent domain terms, this amount is the real, substantial, full and ample compensation the government must pay to be just to the landowners. While the LBP deposited the total amount of P71,891,256.62 into the petitioners accounts (P26,409,549.86 for AFC and P45,481,706.76 for HPI) at the time the landholdings were taken, these amounts were mere partial payments that only amounted to 5% of the P1,383,179,000.00 actual value of the expropriated properties. We point this aspect out to show that the initial payments made by the LBP when the petitioners landholdings were taken, although promptly withdrawn by the petitioners, could not by any means be considered a fair exchange of values at the time of taking. Apart from the requirement that compensation for expropriated land must be fair and reasonable, compensation, to be just, must also be made without delay. Without prompt payment, compensation cannot be considered "just" if the property is immediately taken as the property owner suffers the immediate deprivation of both his land and its fruits or income. Thus, when property is taken, full compensation of its value must immediately be paid to achieve a fair

exchange for the property and the potential income lost. From this point of view, the December 19, 2007 Resolution deleting the award of 12% interest is not only patently and legally wrong, but is also morally unconscionable for being grossly unfair and unjust. If property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interests on its just value to be computed from the time the property is taken to the time when compensation is actually paid or deposited with the court. The respondent Land Bank of the Philippines is hereby Ordered to pay petitioners Apo Fruits Corporation and Hijo Plantation, Inc. interest at the rate of 12% per annum on the unpaid balance of the just compensation, computed from the date the Government took the properties on December 9, 1996, until the respondent Land Bank of the Philippines paid on May 9, 2008 the balance on the principal amount.