SEC 18 VALUATION AND MODE OF
COMPENSATION
Lubrica vs Land Bank of the Phils
GR No. 170220. November 20, 2006
BRIEFED BY: Ninya Saquilabon
Facts:
Petitioner Lubrica is the assignee of Federico Suntay
over certain parcels of agricultural land located at Sta.
Lucia Occidental Mindoro.
In 1972, a portion of the said property was placed
under the land reform program pursuant to PD No. 27
and EO No. 228. The land was thereafter subdivided
and distributed to farmer beneficiaries.
Dept of Agrarian Reform (DAR) and LBP fixed the
value of the land at P 5, 056, 833. 54 which amount
was deposited in cash and bonds in favor of Lubrica.
On the other hand, petitioners Nenito and Emilio
Suntay inherited a parcel of agricultural land located at
Balansay, Occidental Mindoro, consisting of two lots
with a total of 210, 2331 hectares. Lot 2 was placed
under PD No. 27 but only 128, 7161 was considered by
LBP and valued the same at P 1, 512, 575. 05.
Petitioners rejected the valuation of the properties ,
hence the Office of the Provincial Agrarian Reform
Adjudicator (PARAD) conducted an administrative
proceedings for determination of just compensation.
LBP was not satisfied with the valuation filed two
separate petitions for judicial determination of just
compensation before the RTC of San Jose, Occidental
Mindoro.
Petitioners filed separate MOTION TO DEPOSIT THE
PRELIMINARY VALUATION under Sec 16 of RA 6657
and AD CAUTELAM ANSWER praying among others
that LBP deposit the preliminary compensation
determined by PARAD.
Trial Court issued an Order granting the petitioners
motion.
LBPs MR was DENIED.
LBP filed with CA a PETITION FOR CERTIORARI
AND PROHIBITION UNDER RULE 65 with an
application for the issuance of Temporary Restraining
Order and Writ of Preliminary Injunction.
Hence, this petition.
ISSUE:
Whether or not the determination of JUST COMPENSATION
should be based on the value of the expropriated properties at
the time of payment?
HELD:
The petition is GRANTED.
Petitioners were deprived of their properties way back
in 1972, yet to date, they have not yet received just
compensation. Thus, it would certainly be inequitable
to determine just compensation based on the guideline
provided by P.D. No. 227 and E.O. No. 228 considering
the failure to determine just compensation for a
considerable length of time. That just compensation
should be determined in accordance with R.A. No. 6657
and not P.D. No. 227 or E.O. No. 228, is important
considering that just compensation should be the full
and fair equivalent of the property taken from its owner
by the expropriator, the equivalent being real,
substantial, full and ample.
SEC 18 VALUATION AND MODE OF
COMPENSATION
Association of Small Landowners vs Secretary
of Agrarian Reform
GR No. 79310. July 14, 1989
BRIEFED BY: Ninya Saquilabon
Facts:
Petitioners are landowners and sugarplanters in
Victoria Mill District, Negros Occidental.
Co-petitioner Planters Committee, is an organization
composed of 1400 planter members.
The petitioners in this case claim that the power to
provide for a Comprehensive Agrarian Reform
Program as decreed by the Constitution belongs to the
Congress and not to the President, the also allege that
Proclamation No. 131 and E.O No. 229 should be
annulled for violation of the constitutional provisions
on just compensation, due process and equal
protection.
Petitioners contended that the taking must be
simultaneous with payment of just compensation
which such payment is not contemplated in Section 5 of
the E.O No. 229.
ISSUE:
Whether or not the Proc No 131 and E0 229 should be
invalidated because they do not provide retention limits?
HELD:
NO. R.A. No. 6657 does provide for such limits now in Section
6 of the law, which in fact is one of its most controversial
provisions. This section declares:
Retention Limits. Except as otherwise
provided in this Act, no person may own or
retain, directly or indirectly, any public or
private agricultural land, the size of which
shall vary according to factors governing a
viable family-sized farm, such as commodity
produced, terrain, infrastructure, and soil
fertility as determined by the Presidential
Agrarian Reform Council (PARC) created
hereunder, but in no case shall retention by
the landowner exceed five (5) hectares. Three
(3) hectares may be awarded to each child of
the landowner, subject to the following
qualifications: (1) that he is at least fifteen (15)
years of age; and (2) that he is actually tilling
the land or directly managing the farm;
Provided, That landowners whose lands have
been covered by Presidential Decree No. 27
shall be allowed to keep the area originally
retained by them thereunder, further, That
original homestead grantees or direct
compulsory heirs who still own the original
homestead at the time of the approval of this
Act shall retain the same areas as long as they
continue to cultivate said homestead.
SEC 18 VALUATION AND MODE OF
COMPENSATION

Land Bank vs Court of Appeals
G.R No 118712. October 6, 1995
BRIEFED BY: Ninya Saquilabon
Facts:
Private respondents are landowners whose
landholdings were acquired by the DAR and subjected
to transfer schemes to qualified beneficiaries under the
Comprehensive Agrarian Reform Law (CARL, Republic
Act No. 6657).
Private respondents questioned the validity of DAR
Administrative Order No. 6, Series of 1992 and DAR
Administrative Order No. 9, Series of 1990.
Private respondents sought to compel the DAR to
expedite the pending summary administrative
proceedings to finally determine the just compensation
of their properties, and the Landbank to deposit in cash
and bonds the amounts respectively "earmarked",
"reserved" and "deposited in trust accounts" for private
respondents, and to allow them to withdraw the same.
Petitioner Landbank declared that the issuance of the
Certificates of Deposits was in consonance with
Circular Nos. 29, 29-A and 54 of the Land Registration
Authority where the words "reserved/deposited" were
also used.
The respondent court rendered the assailed decision in
favor of private respondents.
Petitioners filed a motion for reconsideration but
respondent court denied the same.1
Hence, the instant petitions.
Issue:
Whether or not the Admin Order No. 9 as null and void?
Held:
The petition is DENIED for lack of merit.
The Court find it unnecessary to distinguish between
provisional compensation under Section 16(e) and final
compensation under Section 18 for purposes of exercising the
landowners' right to appropriate the same. The immediate
effect in both situations is the same, the landowner is deprived
of the use and possession of his property for which he should
be fairly and immediately compensated. Fittingly, we reiterate
the cardinal rule that:
. . . within the context of the State's inherent
power of eminent domain, just compensation
means not only the correct determination of
the amount to be paid to the owner 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" for the property owner is
made to suffer the consequence 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.
Land Bank vs Court of Appeals and Pascual
G.R. No. 128557. December 29, 1999
BRIEFED BY: Ninya Saquilabon
Facts:
Private respondent Jose Pascual owned three (3)
parcels of land located in Guttaran, Cagayan.
Parcel 1 covered by TCT No. 16655 contains an area of
149,852 square meters as surveyed by the DAR but the
actual land area transferred is estimated at 102,229
square meters and classified as unirrigated lowland
rice.
Parcel 2 covered by TCT No. 16654 contains an area of
123,043 square meters as surveyed by the DAR but the
actual land area transferred is estimated at 85,381
square meters and classified as cornland.
Parcel 3 covered by TCT No. 16653 contains an area of
192,590 square meters but the actual land area
transferred is estimated at 161,338 square meters and
classified as irrigated lowland rice.
Pursuant to the Land Reform Program of the
Government under PD 27 and EO 228, the Department
of Agrarian Reform (DAR) placed these lands under its
Operation Land Transfer (OLT).
Under EO 228 the value of rice and corn lands is
determined thus -
Sec. 2. Henceforth, the valuation of rice and corn
lands covered by P.D. 27 shall be based on the average
gross production determined by the Barangay
Committee on Land Production in accordance with
Department Memorandum Circular No. 26, series of
1973 and related issuances and regulations of the
Department of Agrarian Reform. The average
gross production shall be multiplied by two and a
half (2.5), the product of which shall be multiplied
by Thirty-Five Pesos (P35), the government
support price for one cavan of 50 kilos of palay
on October 21, 1972, or Thirty-One Pesos (P31),
the government support price for one cavan of
50 kilos of corn on October 21, 1972, and the
amount arrived at shall be the value of the rice and
corn land, as the case may be, for the purpose of
determining its cost to the farmer and compensation
to the landowner (emphasis supplied).
In compliance with EO 228, the Provincial Agrarian
Reform Officer (PARO) of the DAR in an
"Accomplished OLT Valuation Form No. 1" dated 2
December 1989 recommended that the "Average Gross
Productivity" (AGP) based on "[3] Normal Crop
Year" for Parcels 1 and 2 should be 25 cavans per
hectare for unirrigated lowland rice and 10 cavans per
hectare for corn land.
Meanwhile, the Office of the Secretary of Agrarian
Reform (SAR) also conducted its own valuation
proceedings apart from the PARO.
Private respondent Jose Pascual, opposing the
recommended AGP of the PARO, filed a petition for the
annulment of the recommendation on the productivity
and valuation of the land covered by OLT, subject
 matter hereof, with the Department of Agrarian
Reform Adjudication Board (DARAB).
PARAD ruled in favor of private respondent nullifying
the 2 December 1989 AGP recommended by the PARO.
Instead, the PARAD applied the 22 June 1976 AGP and
the AGP stated in private respondents Tax Declarations
to determine the correct compensation. The PARAD
also used the "Government Support Price" (GSP)
of P300 for each cavan of palay and P250 for each
cavan of corn.
After receiving notice of the decision of the PARAD,
private respondent accepted the valuation. However,
when the judgment became final and executory,
petitioner LBP as the financing arm in the operation of
PD 27 and EO 228 refused to pay thus forcing private
respondent to apply for a Writ of Execution with the
PARAD which the latter issued on 24 December 1992.
Petitioner LBP It reiterated its stand that the PARAD
had no jurisdiction to value lands covered by PD 27.
Petitioner LBP avers that the Court of Appeals erred in
issuing the Writ of Mandamus in favor of private
respondent and argues that the appellate court cannot
impose a 6% compounded interest on the value of Jose
Pascual's land since Administrative Order No. 13 does
not apply to his case.
Hence, this petition.
Issue:
Whether or not the consent of farmer-beneficiary is required
in establishing the vinculum juris for the proper compensation
of the landowner?
Petitioners argument:
Petitioner further argues that for a financing or guarantee
agreement to exist there must be at least three (3) parties: the
creditor, the debtor and the financier or the guarantor. Since
petitioner merely guarantees or finances the payment of the
value of the land, the farmer-beneficiarys consent, being the
principal debtor, is indispensable and that the only time
petitioner becomes legally bound to finance the transaction is
when the farmer-beneficiary approves the appraised land
value. Petitioner fears that if it is forced to pay the value as
determined by the DARAB, the government will suffer losses
as the farmer-beneficiary, who does not agree to the appraised
land value, will surely refuse to reimburse the amounts that
petitioner had disbursed. Thus, it asserts, that the landowner,
the DAR, the Land Bank and the farmer-beneficiary must all
agree to the value of the land as determined by them.
Held:
Petition is DENIED.
A perusal of the law however shows that the consent of the
farmer-beneficiary is not required in establishing
the vinculum juris for the proper compensation of the
landowner. Section 18 of RA 6657 states -
Sec. 18. Valuation and Mode of Compensation. - The LBP
shall compensate the landowner in such amount as may
be agreed upon by the landowner and the DAR and This eloquently demonstrates that RA 6657 includes PD
the LBP in accordance with the criteria provided for in 27 lands among the properties which the DAR shall acquire
Sections 16 and 17 and other pertinent provisions hereof, or and distribute to the landless. And to facilitate the acquisition
as may be finally determined by the court as the just and distribution thereof, Secs. 16, 17 and 18 of the Act should
compensation for the land (emphasis supplied). be adhered to. In Association of Small Landowners of the
Philippines v. Secretary of Agrarian Reform this Court of
As may be gleaned from the aforementioned section, the Appeals applied the provisions RA 6657 to rice and corn lands
landowner, the DAR and the Land Bank are the only parties when it upheld the constitutionality of the payment of just
involved. The law does not mention the participation of the compensation for PD 27 lands through the different modes
farmer-beneficiary.However, petitioner insists that Sec. 18 of stated in Sec. 18.
RA 6657 does not apply in this case as it involves lands covered
by PD 27. It argues that in appraising PD 27 lands the consent
of the farmer-beneficiary is necessary to arrive at a final
valuation. Without such concurrence, the financing scheme
under PD 251 cannot be satisfied
We cannot see why Sec. 18 of RA 6657 should not apply to
rice and corn lands under PD 27. Section 75 of RA 6657 states
that the provisions of PD 27 and EO 228 shall only have a
suppletory effect. Section 7 of the Act also provides -

Sec. 7. Priorities.- The DAR, in coordination with the PARC

shall plan and program the acquisition and distribution of all
agricultural lands through a period of (10) years from the
effectivity of this Act. Lands shall be acquired and distributed
as follows:

Phase One: Rice and Corn lands under P.D. 27; all idle
or abandoned lands; all private lands voluntarily offered by
the owners for agrarian reform;xxx and all other lands
owned by the government devoted to or suitable for
agriculture, which shall be acquired and distributed
immediately upon the effectivity of this Act, with the
implementation to be completed within a period of not more
than four (4) years (emphasis supplied).
 RTC rendered judgment fixing the amount of
P49,241,876.00 to be the just compensation for the
irrigated and unirrigated ricelands with areas of
36.4152 and 40.7874 hectares, respectively, and
situated at Pinit, Ocampo, Camarines Sur which are
portions of the agricultural lands covered by Transfer
Certificates of Title Nos. 2883 and 2884 in the name of
the petitioner, and which were taken by the
government pursuant to Land Reform Program as
provided in Presidential Decree No. 27; and ordering
Defendant Land Bank of the Philippines to pay
petitioner the amount of FORTY-FIVE MILLION SIX
HUNDRED NINE-EIGHT THOUSAND EIGHT
HUNDRED FIVE AND 34/100 (P45,698,805.34)
PESOS, by way of full payment of the said just
compensation.

The Land Bank elevated the matter to the Supreme

Court, which eventually dismissed the appeal in its
Resolution.

Accordingly, a writ of execution was issued by the

Regional Trial Court on December 4, 1997 and a notice
Santos vs Landbank of garnishment was served on the Land Bank on
December 17, 1997.
GR No. 137431. September 7, 2000
The Regional Trial Court issued an Order declaring that
BRIEFED BY: Ninya Saquilabon the Land Bank had complied with the writ of execution
and ordered the same to release the amount of
Facts: P44,749,947.82 to petitioner and the amount of
P948,857.52 to the Clerk of Court as commission fees
for execution of judgment.
Petitioner Edgardo Santos filed a case in RTC for the
determination of just compensation for the properties
taken by DAR under PD NO. 27 Petitioner filed a motion for the issuance of an alias
writ of execution before the Regional Trial Court,
praying that the payment of the compensation be in
 proportion of P8,629,179.36 in bonds and P32,499,745
in cash, alleging that the cash portion should include
the amounts in the Decision representing the interest
payments.
Petitioner moved to withdraw the same and instead
filed a motion for release of the balance of the
garnished amount. He claimed that the payment of
P41,128,024.81 in Land Bank Bonds was not acceptable
to him and that the said amount should be paid in cash
or certified check. The respondent Land Bank, on the
other hand, opposed the motion, contending that the
judgment amount had already been satisfied.
Hence, this petition.
ISSUE:
Whether or not bonds can be considered as payment for just
compensation?
HELD:
Petition is denied.
The Court reiterated the fuling Association of Small
Landowners in the Philippines, Inc. v. Secretary of Agrarian
Reform:
"It cannot be denied from these cases that the traditional
method for the payment of just compensation is money and no
other. And so, conformably, has just compensation been paid
in the past solely in that medium. However, we do not deal
here with the traditional exercise of the power of eminent
domain. This is not an ordinary expropriation where only a
specific property of relatively limited area is sought to be taken
by the State from its owner for a specific and perhaps local
purpose. What we deal with here is a revolutionary kind of
expropriation.
"With these assumptions, the Court hereby declares that the
content and manner of the just compensation provided for in
the afore-quoted Section 18 of the CARP Law is not violative of
the Constitution. We do not mind admitting that a certain
degree of pragmatism has influenced our decision on this
issue, but after all this Court is not a cloistered institution
removed from the realities and demands of society or oblivious
to the need for its enhancement. The Court is as acutely
anxious as the rest our people to see the goal of agrarian
reform achieved at last after the frustrations and deprivations
of our peasant masses during all these disappointing
decades. We are aware that invalidation of the said section will
result in the nullification of the entire program, killing the
farmer's hopes even as they approach realization and
resurrecting the specter of discontent and dissent in the
restless countryside. That is not in our view the intention of
the Constitution, and that is not what we shall decree today.
"Accepting the theory that payment of the just compensation is
not always required to be made fully in money, we find further
that the proportion of cash payment to the other things of
value constituting the total payment, as determined on the
basis of the areas of the lands expropriated, is not unduly
oppressive upon the landowner. It is noted that the smaller the
land, the bigger the payment in money, primarily because the
small landowner will be needing it more than the big
landowners, who can afford a bigger balance in bonds and
other things of value. No less importantly, the government
financial instruments making up the balance of the payment
are 'negotiable at any time.' The other modes, which are
likewise available to be landowner at his option, are also not
unreasonable because payment is made in shares of stock, LBP
bonds, other properties or assets, tax credits, and other things
of value equivalent to the amount of just compensation.