View full case

LAND BANK OF PHILIPPINES v. HEIRS OF ELEUTERIO CRUZ

FACTS:

The case involves a dispute over the valuation of a landholding covered by the agrarian reform program in the Philippines. The petitioner, Land Bank of the Philippines (LBP), valued the acquired landholding at P106,935.76 based on the guidelines set forth under Presidential Decree (P.D.) No. 27 and Executive Order (E.O.) No. 228. The respondents, the heirs of Eleuterio Cruz, disagreed with the valuation and initiated an action for the preliminary determination of just compensation before the Cagayan Provincial Agrarian Reform Adjudicator (PARAD). The PARAD fixed the just compensation at P80,000.00 per hectare, which the respondents agreed with.

Unsuccessful in seeking reconsideration, the petitioner filed a petition for the determination of just compensation before the Regional Trial Court (RTC). The RTC affirmed the PARAD's decision, and the Court of Appeals (CA) also upheld the decision on appeal. The petitioner argues that the formula set forth in P.D. No. 27/E.O. No. 228 should be applied in fixing just compensation.

ISSUES:

  1. Whether the valuation of just compensation for the landholding should be based on the guidelines set forth under P.D. No. 27 and E.O. No. 228.

  2. Whether the valuation of just compensation should be based on the current market value of the landholding.

RULING:

  1. The Court held that the valuation of just compensation for the landholding should be based on the guidelines set forth under P.D. No. 27 and E.O. No. 228. The Court cited Section 2 of E.O. No. 228 and LBP v. Hon. David C. Naval, and ruled that the correct formula for determining just compensation for land acquired under P.D. No. 27 is the formula provided in P.D. No. 27 and E.O. No. 228.

  2. The Court ruled that the valuation of just compensation should not be based on the current market value of the landholding. The Court disregarded respondents' claim that the valuation should be based on the current market value since no evidence was adduced in support of the claim.

PRINCIPLES:

  • The correct formula for determining just compensation for land acquired under P.D. No. 27 is the formula provided in P.D. No. 27 and E.O. No. 228.

  • The valuation of just compensation should not be based on the current market value of the landholding unless there is evidence to support it.