SUPREME COURT DECISION

ON

LAND VALUATION CASES

21 MARCH 2007
FERNANDO GABATIN, et al.

versus

LAND BANK OF THE

PHILIPPINES

G.R. NO. 148223

November 25, 2004
 GABATIN v. LBP
 Gabatin, et. al. are registered owners
of 3 parcel of RICE LAND in Sariaya,
Quezon
 In 1989, the lots were placed under
Operation Land Transfer (OLT)
pursuant to PD 27 and EO 228
 EPs covering the lots were issued to
qualified FBs
 GABATIN v. LBP
 The formula used for valuation of RICE
LANDS under PD 27 is:

LV=2.5 x AGP x GSP

LV-Land Valuation
AGP- Average Gross Production
GSP- Government Support Price
 GABATIN v. LBP
 The DAR and LBP fixed the GSP at
P35.00 the price per cavan of palay in
1972, when the lots were deemed taken
for distribution

 AGP for 2 lots is: 94.64 cavans/hectare

 AGP for 1 lot is: 118.47 cavans/hectare

 GABATIN v. LBP
 The LOS rejected the valuation and
filed a case for determination of just
compensation with the RTC (SAC)

 The SAC fixed the GSP at P400, the

current price per cavan of palay and
NOT the GSP at the time of taking
 GABATIN v. LBP

 On appeal, the CA fixed the GSP at

the time of the taking of the lands in
1972 and NOT the GSP at the time of
payment

 +6% interest p.a. compounded annually

computed from the time of taking in
October 1972 until full payment
 GABATIN v. LBP
ISSUE:

Should the GSP per cavan of palay

be based on the price at the time of
taking or at the time of payment as
ordered by the SAC?
 GABATIN v. LBP
ARGUMENTS:

GABATIN, ET AL;

* GSP was fixed at the time the PARAD

decision was rendered NOT at the time of taking
of the property (LBP v. CA)

* The determination of the value of on

interest payable in kind shall be appraised at the
current price of the products or goods at the
time and place of payment (Art. 1958 of the Civil
Code)
 GABATIN v. LBP
ARGUMENTS

LAND BANK:

*The determination of compensation for

lands covered under PD 27 is reckoned from the
time of the taking

*21 October 1972 was the time of taking for

this was when the LO was effectively deprived of
possession and dominion over his landholding.
 LAND BANK OF THE
PHILIPPINES

versus

HON. ELI G. C. NATIVIDAD

et al.

G.R. No. 127198

May 16, 2005
 LBP v. NATIVIDAD

 Caguiat, et al. (Los) filed a petition

before the SAC for the
determination of just compensation
for their AGRICULTURAL LANDS in
Arayat, Pampanga
 LBP v. NATIVIDAD
 The SAC ordered the DAR and LBP to pay the
Los P30.00 per square meter as just
compensation

 LBP’S ARGUMENT:
*For purposes of agrarian reform the
property was acquired on 21 October 1972,
the effectivity date of PD 27, therefore just
compensation should be based on the value of
the property as of that time NOT at the time
of possession in 1993
 LBP v. NATIVIDAD
SUPREME COURT RULING:

.The seizure of the landholding DID

NOT take place upon the date of
effectivity of PD 27 but would take
effect on the payment of just
compensation (OP v. CA)
 LBP v. NATIVIDAD
SUPREME COURT RULING:

 The agrarian reform process is still

incomplete as the just compensation to be
paid the Los has yet to be settled

 Considering the passage of RA 6657

before the completion of this process, the
just compensation determined and the
process concluded under RA 6657

 RA 6657 is the applicable law with PD 27

and EO 228 having only suppletory effect
(Paris v. Alfeche)
 LBP v. NATIVIDAD
SUPREME COURT RULING:

 It would be inequitable to determine just

compensation based on the guideline provided by
PD 27 and EO 228 considering the DAR’s failure
to determine the just compensation for a
consideration length of time

 Just compensation should be the full and fair

equivalent of the property taken from its owner
by the expropriator
ANACLETO R. MENESES, et
al.

versus

SECRETARY OF AGARIAN
REFORM, et. al.,

G.R. No. 156304,

October 23,2006
MENESES v. DAR SECRETARY
 Meneses, et al. are owners pro indivisio
of an irrigated RICE LAND in San
Miguel. Bulacan consisting of 60.8544
hectares registered in the name of
their grandparents

 On 21 October 1972, the property was

distributed to FBs pursuant to PD 27

 In 1993, the Los filed a case for the

determination and payment of just
compensation with the SAC
MENESES v. DAR SECRETARY
ARGUMENTS

MENESES, ET AL.:
*From the time the land was
distributed to FBs in 1972 up to the
filing of the complaint, no payment or
rentals have been made, and titles were
already issued to the FBs

*The marked value of the property

is P6M
MENESES v. DAR SECRETARY
ARGUMENTS
FARMERS-BENEFICIARIES:
*The land valuation establishing
the AGP per hectare by the BCLP
based on 3 normal crop years prior to
PD 27 is in accordance with the
guidelines and procedures on OLT
*They have no unpaid rentals
MENESES v. DAR SECRETARY
ARGUMENTS

LAND BANK:

*The computation was obtained

through the land valuation processes
of the DAR on lands covered by PD
27 and EO 228
 MENESES v. DAR
SECRETARY
ARGUMENTS

DAR SECRETARY:
*The valuation of the property
was pursuant to OLT under PD 27
and the reckoning date should be at
the time of the taking of the
property, i.e., 21 October 1972
MENESES v. DAR SECRETARY

 The SAC ruled that since the property

was taken from the Los on 21 October
1972 under the DAR’s OLT pursuant to
PD 27, just compensation must be based
on the value of the property at the time
of the taking

 The CA dismissed the appeal

 MENESES v. DAR
SECRETARY
ISSUE:

Whether or not Los are entitled to

just compensation as provided for in RA
6657 and the 1987 Constitution NOT
PD 27 which was the basis for valuation
made by the DAR and LBP of the land
which was acquired in 21 October 1972?
MENESES v. DAR SECRETARY
SUPREME COURT RULING:
 The seizure of the landholding DID NOT take
place upon the date of effectivity of PD 27 but
would take effect on the payment of just
compensation (citing LBP v. Natividad)

 Events have rendered the applicability of PD 27

inequitable. Thus, RA 6657 should apply

MENESES v. DAR SECRETARY

THE CASE WAS REMANDED TO THE SAC FOR THE FINAL
DETERMINATION OF JUST COMPENSATION
JOSEFINA S. LUBRICA, et.
al.

versus

LAND BANK OF THE

PHILIPPINES

G.R. No. 170220,

November 20, 2006
 LUBRICA v. LBP
 Lubrica is an assignee of certain parcels of
AGRICULTURAL LANDS located at Sta.
Lucia, Sablayan, Occidental Mindoro

 In 1972, 311+ hectares was placed under

the land reform program, subdivided and
distributed to FBs pursuant to PD 27 and
EO 228

 DAR and LBP fixed the value of the land

at P5.056 M, deposited in case and bonds
in favor of Lubrica
 LUBRICA v. LBP
 Nenita Suntay-Tañedo and Emilio
Suntay inherited from Federico
Suntay 2 parcels of AGRICULTURAL
LAND in Balansay, Mamburao,
Occidental Mindoro

 128+ hectares was placed under the

coverage of PD 27 and valued by the
LBP at P1.512 M

 Los rejected the valuation of their

properties
 LUBRICA v. LBP
 The PARAD fixed the
preliminary just compensation at:
 P51.8 M for 311 + hectares

 21.608 M for 128 +

hectares
 LBP filed petitions for the
judicial determination of just
compensation with the SAC
 LUBRICA v. LBP
 LOS filed motions to deposit the
preliminary compensation determined by
the PARAD

 The SAC ordered the LBP to deposit the

provision compensation as determined by
the PARAD as there is no law which
prohibits LBP to make a deposit pending
the fixing of the final amount of just
compensation
 LUBRICA v. LBP
 There is no reason for LBP to
further delay the deposits
considering that the DAR
already took possession of the
properties and distributed
the same to FBs as early as
1972
 LUBRICA v. LBP
 On MR, the CA held that the immediate
deposit of the preliminary value of the
expropriated properties is improper
because it was erroneously computed.
(citing Gabatin v. LBP)

 The value of the GSP should be computed

at the time of legal taking of the land,
that is, 21 October 1972 when the Los
were effectivity deprived of ownership
over their properties by virtue of PD 27
 LUBRICA v. LBP
 The PARAD incorrectly used the
amounts of P500 and P300 which are
the prevailing GSP for palay and corn
at the time of payment instead of
P35 and P31, the prevailing GSP at
the time of taking in 1972
 LUBRICA v. LBP
SUPREME COURT RULING:

• The expropriation of the landholding DID NOT

take place upon the date of effectivity of PD
27 on 21 October 1972 but seizure would take
effect on the payment of just compensation
judicially determined (citing LBP v. Natividad,
OP v. CA)

• Expropriation of landholdings covered by RA

6657 takes place, NOT on the effectivity of
the Act on 15 June 1988 but on the payment of
just compensation
 LUBRICA v. LBP
SUPREME COURT RULING:
• It would be highly inequitable to
compute the just compensation using
the values at the time of the taking in
1972 NOT at the time of payment
considering that the government and
the FBs have already benefited from
the land although ownership thereof has
not yet been transferred in their
names.
 LUBRICA v. LBP
SUPREME COURT RULING:

 The transfer of possession or ownership of

the land to the government is conditioned
upon the receipt by the LO of the
corresponding payment or deposit by the
DAR of the compensation with an accessible
bank.

UNTIL THEN, TITLE REMAINS

WITH THE LANDOWNER
 LUBRICA v. LBP
SUPREME COURT RULING:
• The agrarian reform process is still incomplete
as the just compensation to be paid the Los
has yet to be settled

• Considering the passage of RA 6657 before

the completion of this process, the just
compensation determined and the process
concluded under RA 6657

• RA 6657 is the applicable law with PD 27 and

EO 228 having only suppletory effect (citing
LBP v. Natividad, Paris v. Alfeche and LBP v.
CA)
 LUBRICA v. LBP
SUPREME COURT RULING:
•Section 18 of RA 6657 mandates that
the LBP shall compensate to LO in such
amount as may be agreed upon by the LO
and the DAR and the LBP
or
as may be finally determined by the
court as just compensation for the land
 LUBRICA v. LBP
In determining just compensation, the
following factors should be considered
*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
*the assessment made by the government
assessors
*the social and economic benefits
contributed by the farmers and
farmworkers and by the government to the
property
*non payment of taxes or loans secured
from a government financing institution
(citing Section 17, RA 6657)
 LUBRICA v. LBP

SUPREME COURT RULING:

*Section 17, RA 6657 was

converted into formula by the DAR
through AO 5, series of 1998:

LV=(Capitalized Net Income x 0.6)

+ (Comparable Sales x 0.3) + (Market
Value per Tax Declaration x 0.1)
 APO FRUITS CORPORATION
And HIJO PLANTATION, INC.

versus

COURT OF APPEALS and

LAND BANK OF THE
PHILIPPINES
G.R. NO. 164195
February 6, 2007
 AFC and HPI v. CA and LBP
AFC and HPI are registered owners of 5
parcels of AGRICULTURAL LANDS located in
San Isidro, Tagum, Davao Province

* In 1995, AFC and HPI voluntarily offered for

sale to the government the 5 parcels of land

AFC and HPI v. CA and LBP

In 1996, AFC and HPI received the NOLVA

from the PARO informing them of the
valuation of their lands as follows:

AFC –P86.9M at P165K/hectare for 640+

hectares
HPI – P164.478M for 814+ hectares
AFC and HPI v. CA and LBP
In 1998, AFC and HPI rejected the valuation of
their parcels of land

DAR requested LBP to deposit the amounts

equivalent to the valuations in the names and for
the accounts of AFC and HPI

AFC withdrew the amount of P26.409 M while HPI

withdrew the amount of P45.481 M in cash from
LBP

AFC and HPI v. CA and LBP

The TCTs of AFC and HPI were cancelled and RP title
were issued

CLOAs were issued over the properties and distributed

to qualified FB
AFC and HPI v. CA and LBP
 AFC and HPI filed complaints for
determination of just compensation with the
DARAB

 Despite the lapse of 3 years, the DARAB

failed and refused to render a decision on
the valuation of the properties

 Hence, complaints for determination and

payment of just compensation were filed by
the AFC and HPI at the SAC
AFC and HPI v. CA and LBP
The SAC appointed Commissioner to
determine the proper valuation of the
properties

The SAC fixed the fair, reasonable and

just compensation at P1,383 B for
1338+hectares of land and standing crops
including interest equivalent to the market
interest rates aligned with the 91-day t-till
from the date of the taking in 9 December
1996 until full payment
AFC and HPI v. CA and LBP
On MR filed by the LBP, the SAC
modified its decision with regard to
the interest at the rate of 12% p.a.
computed from the time the complaint
was filed until the finality of the
decision becomes final and executory
until full payment

AFC and HPI v. CA and LBP

The CA granted LBP’s appeal and

nullified the orders of the SAC
AFC and HPI v. CA and LBP

SUPREME COURT RULING:

*The concept of just compensation

embraces not only the correct
determination of the amount to the paid to
the owners of the land, but also the
payment of the land within reasonable time
form its taking
 AFC and HPI v. CA and LBP
SUPREME COURT RULING:

•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

AFC and HPI v. CA and LBP

SUPREME COURT RULING:

•It is settled that the property was taken on 9

December 1996, when the Certificate of Title was
issued sin favor of RP and the Certificates of
Title of AFC and HPI were cancelled
 AFC and HPI v. CA and LBP
SUPREME COURT RULING:

•The SAC considered the valuation

submitted by the following:

Commissioner' Report – P85/sq.m. or

P850,000/ha

Cuervo Appraisal Report – P84.53/sq.m.

or
P845,300/has
AFC and HPI v. CA and LBP

The SAC considered the value of

P103.33/sq.m. as the just
compensation which is fair and
reasonable to all parties
AFC and HPI v. CA and LBP

Factors considered by the SAC in determining

just compensation
*1993 and 1994 Revision of Assessment and
property Classification scheduled of market
Values of Tagum City

Lowest Values
1993 –P100/sq.m. for 4th Class
Residential Lot
1994 -P80/sq.m. for Barangay
Residential Lot
 AFC and HPI v. CA and LBP
1994 – P130/sq.m. for Industrial
Lots in a 3rd Class Barangay

AFC and HPI v. CA and LBP

*Comparative Sales of Adjacent Land

High – P580/sq.m. in September 1996

Low – P146.02/sq.m. in October 1997
Other Sales:
P530/sq. m. in January 1996 and December
1995
P148.64/s.q.m. in December 1996
AFC and HPI v. CA and LBP
*Capitalized Income Approach

P84.53/sq.m. – based on the use of

the land and the income generated
from the use

AFC and HPI v. CA and LBP

When the SAC arrived at the valuation of the
LO’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 produces, such valuation is
considered in accordance with RA 6657
AFC and HPI v. CA and LBP

THE SAC CORRECTLY DETERMINED

THE JUST COMPENSATION
DUE TO AFC AND HPI
THANK YOU VERY MUCH

MARAMING SALAMAT
PO

DIOS TI AGNGINA

DAGHANG SALAMAT

DIYOS MABALOS