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LAND BANK OF PHILIPPINES v. VIRGINIA PALMARES

FACTS:

The respondents inherited a 19.98-hectare agricultural land and offered it for sale to the government under RA 6657. However, they rejected the amount assessed by LBP. DARAB conducted summary proceedings and adopted LBP's valuation. The respondents then filed a petition for judicial determination of just compensation with the RTC, which fixed the compensation at a certain amount plus 12% interest per annum. LBP appealed to the CA, but the CA affirmed the RTC's ruling. LBP's motion for reconsideration was denied. Dissatisfied, LBP filed a petition for review on certiorari before the Supreme Court. LBP argued that the compensation fixed by the RTC did not comply with the prescribed valuation factors under RA 6657. LBP also questioned the imposition of 12% interest and the failure of the CA to consolidate the case with another case involving the Department of Agrarian Reform.

ISSUES:

  1. Whether or not the compensation fixed by the RTC is in accordance with the legally prescribed valuation factors under Section 17 of RA 6657 and DAR Administrative Order No. 05, Series of 1998.

  2. Whether or not LBP should be held liable for interest of 12% per annum.

  3. Whether or not the CA committed an error in not consolidating the case with CA-G.R. CEB SP No. 01845 and remanding the case to the RTC.

RULING:

  1. The compensation fixed by the RTC is affirmed. The CA held that the RTC arrived at its own computation in accordance with Section 17 of RA 6657 and pertinent DAR Administrative Orders. The CA further emphasized that the determination of just compensation in eminent domain proceedings is a judicial function and courts should have ample discretion, not limited by mathematical formulas.

  2. LBP is ordered to pay interest of 12% per annum. The CA modified the award of interest to apply only to the remaining balance of the just compensation, considering that LBP had already deposited the initial valuation amount. Thus, LBP is liable for interest on the remaining balance of the compensation.

  3. The failure to consolidate the case with CA-G.R. CEB SP No. 01845 and remand the case to the RTC was not found to be an error by the CA. However, the petitioner failed to include a copy of the Decision in CA-G.R. SP No. 01845 in both its Urgent Manifestation with Motion to Consolidate before the appellate court and in the instant petition before the Supreme Court.

PRINCIPLES:

  • The determination of just compensation in eminent domain proceedings is essentially a judicial function and courts should be given ample discretion, not limited by mathematical formulas. (CA Decision)

  • LBP is liable to pay interest on the remaining balance of the just compensation. (CA Decision)

  • Failure to include relevant documents in the pleadings may result in the court not considering the said documents in its decision. (CA Decision)