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LAND BANK OF PHILIPPINES v. DEL MORAL

FACTS:

This case involves a dispute over the computation of just compensation for land covered by the agrarian reform program under P.D. No. 27. The registered owner of the land, Del Moral, Inc., filed a petition before the RTC for the proper determination of just compensation after finding the valuation made by the DAR and LBP to be inadequate. The RTC computed the just compensation based on the recent fair market value of the property and awarded Del Moral additional damages and legal interest. The CA affirmed the RTC's computation and reduced the award for damages. The delayed determination and payment of just compensation for over 35 years is also highlighted.

The LBP was ordered to pay just compensation to Del Moral for the acquisition of Del Moral's land. However, the payment was delayed for 20 years, deposited only in 1992. The CA denied LBP's motion for reconsideration, stating that the delay in payment was unjust and should be based on the fair market value prevailing at the time of payment. Del Moral filed a motion for execution, and the RTC granted it, stating that both the DAR and LBP were joint and several in their obligation. LBP then filed a motion for a TRO/preliminary injunction, arguing that the RTC had no jurisdiction to issue a writ of execution. The issues to be resolved in this case are whether LBP is bound by the final judgment regarding the computation of just compensation, whether the just compensation was properly computed, and whether the awards for damages and interest are proper. LBP argues that the computation does not comply with the valuation factors under the law and existing jurisprudence, while Del Moral maintains that the previous judgment has already attained finality.

The case involves a dispute over the just compensation for the expropriation of a landholding. Del Moral argues that the computation of just compensation is in accordance with law and jurisprudence. LBP did not present any contrary evidence regarding the current market value of the landholdings, and it was only Del Moral who presented such evidence. Del Moral asserts that the value of the landholdings is already incontrovertible and conclusive. The doctrine of res judicata is raised in this case, with the argument that previous appeals on the matter have already been dismissed. The Court's ruling emphasizes the requirements for res judicata to apply and cites previous decisions that establish the need for determination of just compensation based on current laws and principles.

ISSUES:

  1. Whether the expropriation under PD No. 27 is considered complete upon the effectivity of the law or only upon the payment of just compensation as judicially determined.

  2. Whether the determination of just compensation after a considerable length of time constitutes a confiscatory taking of private property without due compensation.

  3. Whether the principle of res judicata or bar by prior judgement applies in this case.

  4. Whether just compensation should be computed based on the values at the time of payment judicially determined and not at the time of taking in 1972.

  5. Which factors should be considered in determining just compensation.

  6. Whether the amendments introduced by R.A. No. 9700 and its implementing rules on the factors to be considered in computing just compensation are applicable in the case.

  7. Whether the RTC is strictly bound by the formulas prescribed by the DAR in determining just compensation.

  8. Whether the determination of just compensation is a judicial function that cannot be curtailed or limited by legislation.

  9. Whether the RTC properly disregarded the valuation presented by the LBP using the formula provided in E.O. No. 228.

  10. Whether the award of temperate and nominal damages is proper.

RULING:

  1. The expropriation under PD No. 27 is not considered complete upon the effectivity of the law, but rather upon the payment of just compensation as judicially determined. The application of PD No. 27 is deemed inequitable in cases where the determination of just compensation has dragged on for a long period of time. The applicable law for determining just compensation is RA No. 6657, with PD No. 27 and EO 228 having only suppletory application.

  2. The determination of just compensation after a considerable length of time constitutes a confiscatory taking of private property without due compensation. Just compensation should be computed based on the current market value of the landholding prevailing at the time of payment, as it should be the full and fair equivalent of the property taken. Payment made after the lapse of 20 or more years is not considered within a reasonable time.

  3. The principle of res judicata applies in this case. The Supreme Court held that when the DAR's appeal of the Regional Trial Court's (RTC) decision had already been dismissed in a prior case, the decision of the RTC became the law of the case and constituted a bar to any relitigation of the same issues in any other proceeding under the principle of res judicata.

  4. Just compensation should be computed based on the values at the time of payment judicially determined and not at the time of taking in 1972. The Supreme Court held that it would be inequitable to determine just compensation based on the guidelines provided by P.D. No. 27 and E.O. No. 228 considering the lapse of a considerable length of time. Just compensation should be determined in accordance with R.A. No. 6657, and not P.D. No. 27 or E.O. No. 228.

  5. In determining just compensation, the factors to be considered are: the cost of acquisition of the land, the current value of like properties, its nature, actual use and income, and the sworn valuation by the owner, the tax declarations, the assessment made by government assessors. The social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property, as well as the non-payment of taxes or loans secured from any government financing institution on the said land, shall be considered as additional factors to determine its valuation. This is in accordance with Section 17 of R.A. No. 6657.

  6. The amendments introduced by R.A. No. 9700 and its implementing rules on the factors to be considered in computing just compensation are not applicable in the case. The proper determination of just compensation shall be based on Section 17 of R.A. No. 6657 prior to its amendment by R.A. No. 9700.

  7. The RTC is not strictly bound by the formulas prescribed by the DAR in determining just compensation. The RTC must be able to reasonably exercise its judicial discretion in the evaluation of the factors for just compensation, which cannot be restricted by a formula dictated by the DAR when faced with situations that do not warrant its strict application. However, the RTC must explain and justify any deviation from the prescribed factors and formula.

  8. The determination of just compensation is a judicial function that cannot be curtailed or limited by legislation. While the court must consider the factors and formulas prescribed by the DAR, it still has the power to make a final determination of just compensation.

  9. The RTC properly disregarded the valuation presented by the LBP using the formula provided in E.O. No. 228. The said formula was based solely on the production of the land without considering other factors such as the value of the land.

  10. The award of temperate damages is proper considering that pecuniary loss has been suffered but the amount cannot be proved with certainty from the nature of the case. However, nominal damages of P1 million should be deleted as temperate and nominal damages are incompatible and thus, cannot be granted concurrently.

PRINCIPLES:

  • Expropriation under PD No. 27 is deemed incomplete until the payment of just compensation as judicially determined.

  • RA No. 6657 is the applicable law for determining just compensation, with PD No. 27 and EO 228 having only suppletory application.

  • The determination of just compensation after a considerable length of time constitutes a confiscatory taking of private property without due compensation.

  • Just compensation should be computed based on the current market value of the landholding prevailing at the time of payment.

  • Res judicata or bar by prior judgment is a principle that a final judgment on the merits rendered by a court of competent jurisdiction is conclusive as to the rights of the parties and their privies and constitutes an absolute bar to subsequent actions involving the same claim, demand, or cause of action.

  • Just compensation for land expropriated for agrarian reform should be computed based on the values at the time of payment judicially determined and not at the time of taking.

  • The factors to be considered in determining just compensation are: the 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 government assessors, the social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property, and the non-payment of taxes or loans secured from any government financing institution on the said land.

  • The amendments introduced by R.A. No. 9700 and its implementing rules on the factors to be considered in computing just compensation are not applicable to landholdings that were approved by the government prior to July 1, 2009.

  • The RTC is not strictly bound by the formulas prescribed by the DAR in determining just compensation and must be able to exercise its judicial discretion.

  • The determination of just compensation is a judicial function that cannot be limited by legislation or administrative rules. The court has the power to make a final determination of just compensation.

  • In determining the valuation of land, factors such as the value of the land should be considered and not solely rely on the production of the land.

  • Temperate damages may be recovered if pecuniary loss has been suffered but the amount cannot be proved with certainty from the nature of the case.

  • Nominal damages and temperate damages are incompatible and cannot be granted concurrently.