It has been the consistent pronouncement of this Court that the determination of just compensation is basically a judicial function.  Also, it is settled that in the computation of just compensation for land taken for agrarian reform, both Section 17 of Republic Act No. 6657 (RA 6657 or the Comprehensive Agrarian Reform Law of 1988/CARL) and the formula prescribed in the applicable Administrative Order of the Department of Agrarian Reform (DAR) should be considered.

Before this Court are consolidated Petitions for Review on Certiorari^[1] assailing the following dispositions of the Court of Appeals (CA):

1.  Its September 23, 2004 Decision^[2] and February 22, 2006 Resolution^[3] in CA-G.R. SP No. 80678, entitled "Department of Agrarian Reform, as represented by Secretary Roberto M. Pagdanganan, Petitioner, versus Hon. Reinerio (Abraham) B. Ramas, Presiding Judge, Regional Trial Court, Br. 18, Pagadian City and Susie Irene Galle, Respondents";

2.  Its July 27, 2010 Consolidated Decision^[4] and January 19, 2011 Resolution^[5] in CA-G.R. SP Nos. 00761-MIN and 00778-MIN, entitled "Land Bank of the Philippines, Petitioner, versus Susie Irene Galle, substituted by her heirs, namely: Hans Peter, Carl Otto, Fritz Walter, and George Alan, all surnamed Rieth, Respondents" and "Department of Agrarian Reform, represented by OIC-Secretary Nasser C. Pangandaman, Petitioner, versus Susie Irene Galle, substituted by her heirs, namely: Hans Peter, Carl Otto, Fritz Walter, and George Alan, all surnamed Rieth, Respondents", respectively.

Factual Antecedents

Respondent Susie Irene Galle (Galle) owned two contiguous parcels of land known as the Patalon Coconut Estate (the estate) in Patalon, Zamboanga City, with a total area of 410.2271 hectares (or 4,102,271 square meters) and covered by two titles issued in her name Transfer Certificates of Title Nos. T-62,736^[6] (TCT T-62,736) and T-62,737^[7] (TCT T-62,737).  The estate is a fully developed and income-producing farm, thus:

TCT T-62,736		TCT T-62,737
Land Use	Area [Has.]	Land Use	Area [Has.]
[Coconut Plantation]	178.713	[Coconut Plantation]	168.1127 [has.]
[Coconut with Coffee Trees]	5.0	[Coconut with Coffee Trees]	3.5
Quarry	5.0	Corn	1.5
Barangay Road	1.4	Forest [Land]	15.0
Forest [Land]	15.0	National Road	2.0[8]

The estate contained between 35,810 to 38,666 coconut trees,^[9] producing copra.  Likewise, cattle, carabao and horses were raised therein.^[10]

In August 1992, petitioner Land Bank of the Philippines (LBP) valued 356.2257 hectares of the estate at P6,083,545.26, which valuation was rejected by Galle.  The rejected amount was supposedly deposited in the name of Galle, in the form of cash and bonds.

On November 17, 1993, the Zamboanga City Registry of Deeds cancelled Galle's titles and transferred the entire estate to the State; TCT Nos. T-110,927 and T-110,928 were issued in the name of the "Republic of the Philippines Department of Agrarian Reform."

On November 25, 1994, TCT Nos. T-110,927 and T-110,928 were cancelled and new titles TCT Nos. T-111,098 and T-111,099 were issued in the name of "Patalon Estate Agrarian Reform Beneficiaries Association" (PEARA).

Yet again, on May 13, 1994, the above two PEARA titles were cancelled, and new titles were issued, as follows:

1. TCT No. T-113,496 for 15.0025 hectares in Galle's name;^[11]
   
   
2. TCT No. T-113,499 for 37.1209 hectares in Galle's name;^[12]
   
   
3. TCT No. T-113,497 for 47.1739 hectares in the name of PEARA;^[13] and
   
   
4. TCT No. T-113,498 for 307.5369 hectares in the name of PEARA.^[14]

The above four titles covered 406.8342 hectares of the estate's total area of 410.2271 hectares, thus leaving 3.3929 hectares thereof unregistered.  Thus, it appears that as to Galle, a total of 358.1037 hectares, or 3,581,037 square meters which is the sum total of the areas covered by TCT Nos. T-113,497 and T-113,498, and the 3.3929 hectares unaccounted for but not re-titled or returned to Galle were taken from her by the government without just compensation.

Meanwhile, the Department of Agrarian Reform Adjudication Board (DARAB) conducted summary administrative proceedings for the acquisition of the estate, docketed as DARAB Case No. JC-RIX-ZAMBO-0011-CO.  On October 15, 1996, a Decision^[15] was rendered in said case, the dispositive portion of which reads:

WHEREFORE, premises considered, order is hereby issued directing the Land Bank of the Philippines to determine and include the value of the 1.4 hectares barangay road in the total valuation.  It is likewise directed to pay the landowner, Susie Irene Galle, the amount of TEN MILLION SEVEN HUNDRED SIXTY SEVEN THOUSAND FOUR HUNDRED SIXTY NINE PESOS AND 00/100 (P10,627,148.00) [sic] upon completion of the essential requirements.

SO ORDERED.^[16]

Galle was notified of the above Decision on October 28, 1996.  LBP filed a motion for reconsideration, which remains unresolved to this day.^[17]

Civil Case No. 4574

Galle instituted on November 12, 1996 or within 15 days from receipt of the Decision in DARAB Case No. JC-RIX-ZAMBO-0011-CO a case for "Cancellation of Transfer Certificates of Title and Reconveyance, Determination and Payment of Just Compensation, and Damages" with the Regional Trial Court (RTC) of Zamboanga City.  Docketed as Civil Case No. 4574 and assigned to RTC Branch 12, the Complaint^[18] - entitled "Susie Irene Galle, Plaintiff, versus Ernesto Garilao, et al., Defendants" prayed, among others, that:

The Honorable Court issue an Order:

1.  Directing defendant Susana B. Muin, Register of Deeds of Zamboanga City, to cancel all certificates of title issued subsequent to TCT Nos. T-62,736 and T-62,737, thereby rendering all subsequent certificates of title without force and effect, and restoring in the name of plaintiff TCT Nos. T-62,736 and T-62,737; and

2.  Directing the Department of Agrarian Reform and all the defendants to jointly and severally pay plaintiff the income she lost from the time the said TCTs were cancelled on November 17, 1993 up to the time that the TCTs will be restored in her name, with interest at the rate of 12% per annum, to pay lawyer's fees and to pay the cost of the suit.

In the alternative, it is respectfully prayed that the Honorable Court render judgment:

1. Declaring just compensation for plaintiff's expropriated landholdings at an amount not less than P345,311,112.00 and directing Land Bank of the Philippines to pay plaintiff the said amount.
   
   
2. Requiring Land Bank of the Philippines to pay plaintiff the value of the infrastructures and waterworks system installed on plaintiff's landholdings.
   
   
3. Requiring the Department of Agrarian Reform and Land Bank of the Philippines and all other defendants to jointly and severally pay damages to plaintiff in the form of 12% interest [per annum] starting January 21, 1991 up to the time the final award of compensation is paid to plaintiff, the interest to be computed based on the final award of compensation to plaintiff, and directing Land Bank of the Philippines to pay the amount to plaintiff.
   
   
4. Requiring the Department of Agrarian Reform and Land Bank of the Philippines and all other defendants to jointly and severally pay damages to plaintiff by way of attorney's fees in the amount of 15% of the final award of compensation to plaintiff, and directing Land Bank of the Philippines to pay the amount to plaintiff.
   
   
5. Requiring the Department of Agrarian Reform and Land Bank of the Philippines and all other defendants to jointly and severally pay damages to plaintiff for all the expenses incurred to bring the instant suit before the Honorable Court, which should not be less than P400,000.00, and to pay the cost of the suit, and directing Land Bank of the Philippines to pay the the [sic] amounts to plaintiff.
   
   
6. To pay the cost of the suit.^[19]

Galle likewise filed DARAB Case No. IX-ZC-766-96-(R) seeking annulment of the titles which were issued subsequent to her original titles, or TCT T-62,736 and TCT T-62,737.  However, the case was later dismissed in a January 10, 1997 Decision issued by the DARAB.

The DAR moved to dismiss Civil Case No. 4574, claiming that the RTC had no jurisdiction over the case.  The RTC denied the motion, as well as DAR's ensuing motion for reconsideration.

DAR thus filed a Petition for Certiorari with the CA, docketed as CA-G.R. SP No. 47618.  On August 21, 2001, the CA issued a Decision^[20] granting the Petition, thus:

WHEREFORE, the foregoing premises considered, the petition for certiorari is GRANTED.  The Orders of the public respondent dated June 23, 1997 and September 18, 1997, and all the proceedings had thereafter including the Decision dated March 22, 1999 and the Order dated May 19, 2000 are hereby ANNULLED and SET ASIDE.  No pronouncement as to costs.

SO ORDERED.^[21]

The CA held that the RTC in Civil Case No. 4574 had no power to review decisions of the DARAB, and it had no jurisdiction over the case for cancellation of titles since it was not the designated Special Agrarian Court (SAC).

Galle then came to this Court by Petition for Review on Certiorari, docketed as G.R. No. 152480.  In a June 3, 2002 Resolution,^[22] however, the Petition was denied for failure to show that the CA committed reversible error.

Civil Case No. 4436-2K3

On January 14, 2003, Galle filed a case for "Determination and Payment of Just Compensation with Damages" against the Secretary of the DAR, LBP, and PEARA, which was docketed as Civil Case No. 4436-2K3 and assigned to Branch 18 of the RTC of Pagadian City, the designated SAC.  The Complaint^[23] essentially alleged that the estate was a fully developed and income-generating farm which was situated near the Zamboanga City Special Economic Zone Authority and the Ayala de Zamboanga Industrial Estate; that the estate was a rich source of sand and gravel, and more than 62 hectares thereof was coastal land; that at the time of taking by the State, the fair market value thereof was no less than P100.00 per square meter, or P1 million per hectare; and that DAR and LBP offered compensation equivalent to only P1.70 per square meter.  Galle prayed that just compensation be fixed in the amount of not less than P1 million per hectare or a total of P350,569,636.10; that she be granted compounded interest on the just compensation due her, computed from the time her land was taken until she is paid; that she be awarded 15% attorney's fees, "actual expenses", and costs of suit.

The DAR filed a Motion to Dismiss,^[24] which LBP adopted.  Citing prescription and forum-shopping, the DAR argued that Galle was given only 15 days from notice of the October 15, 1996 DARAB Decision in DARAB Case No. JC-RIX-ZAMBO-0011-CO pursuant to Rule XIII, Section 11 of the 1994 DARAB Rules of Procedure^[25] within which to file a just compensation case with the SAC; her filing of Civil Case No. 4436-2K3 on January 14, 2003, or six years later, is tardy, and the October 15, 1996 Decision of the DARAB therefore became final and executory.  It argued further that Galle was guilty of forum-shopping for filing Civil Case No. 4436-2K3 after obtaining an adverse Decision in Civil Case No. 4574, which likewise involved a prayer albeit in the alternative for the fixing of just compensation for her estate.

Galle filed an Opposition^[26] to the Motion to Dismiss, arguing among others that the October 15, 1996 DARAB Decision in DARAB Case No. JC-RIX-ZAMBO-0011-CO did not become final and executory as there is still a pending and unresolved Motion for Reconsideration^[27] filed by LBP; that the courts have the power to review the Decision of the DAR, which is merely preliminary and not final; that a landowner may file a case directly with the SAC without awaiting the DAR's preliminary determination on just compensation;^[28] that the original and exclusive jurisdiction over cases for the determination of just compensation lies with the SAC the DAR cannot be granted jurisdiction over cases of eminent domain, as the valuation of property in eminent domain cases is essentially a judicial function which cannot be vested in administrative agencies;^[29] that she was deprived of her property without just and timely compensation, and her estate was placed in the name of an agrarian reform beneficiaries association that did not exist in fact and in law; and that no forum-shopping was committed with the filing of Civil Case No. 4574 precisely since the trial court in said case had no jurisdiction to cancel the titles issued or to fix just compensation as it was not the designated SAC that possessed the power to do so.  To this Opposition, LBP filed a Reply.^[30]

In a June 20, 2003 Order,^[31] the SAC denied the Motion to Dismiss.  DAR and LBP moved to reconsider, but in a September 12, 2003 Order,^[32] the SAC stood its ground.

LBP thereafter filed its Answer with Counterclaim.^[33]

CA-G.R. SP No. 80678

Instead of submitting an Answer, DAR filed a Petition for Certiorari and Prohibition with the CA docketed as CA-G.R. SP No. 80678 assailing the SAC's June 20, 2003 and September 12, 2003 Orders, on the claim that they were issued with grave abuse of discretion since Galle was already bound by the final and executory October 15, 1996 Decision of the DARAB in DARAB Case No. JC-RIX-ZAMBO-0011-CO and thus could no longer file Civil Case No. 4436-2K3 to fix anew the just compensation for her estate.

On September 23, 2004, the CA issued the herein assailed Decision and February 22, 2006 Resolution respectively dismissing the Petition and denying reconsideration thereof.  The appellate court stated that DAR's Petition was defective as it failed to state the date of receipt of the SAC's assailed June 20, 2003 Order, and that the SAC's Orders may not be elevated to the higher courts until the hearing in Civil Case No. 4436-2K3 has been terminated and the case decided on the merits, pursuant to Section 59 of RA 6657 or the Comprehensive Agrarian Reform Law of 1988 (CARL).^[34]

Thus, the DAR filed the instant Petition, docketed as G.R. No. 171836.

Meanwhile, back in Civil Case No. 4436-2K3, the SAC conducted pre-trial, where the parties jointly moved for the creation of a commission of three that would determine the just compensation for Galle's estate.  Thus, Zamboanga City Assessor Erwin Bernardo (Bernardo), Zamboanga City Engineer Luis Vicente Despalo (Despalo), and DBP Property Appraiser Romel Calapardo (Calapardo) were called in to sit as commissioners.

The commission submitted a Report dated July 7, 2004, which the parties and the SAC rejected.  The commission was directed to convene and conduct a revaluation.  Meanwhile, Despalo was replaced by retired City Assessor Obdulia Manalo (Manalo), and Bernardo was replaced by retired Judge Cecilio Martin (Judge Martin).

Hearings were conducted whereby the parties presented their respective evidence.  Galle presented two witnesses, while LBP submitted only documentary evidence.

Meanwhile, one of the commissioners Judge Martin resigned.  LBP manifested its willingness to proceed with the revaluation with only two commissioners remaining.^[35]

Commissioner Manalo submitted her Commissioners' Report^[36] together with all the documents submitted by the parties and the transcript of stenographic notes of the hearings and executive sessions of the commissioners.  Manalo's Report reads, as follows:

COMMISSIONERS' REPORT
Comes now the undersigned Commissioners, and in compliance with the Order of the Honorable Court dated October 30, 2003, respectfully submit this

REPORT

I.  TASK OF THE COMMISSIONERS

As stated in the Order of the Honorable Court dated October 30, 2003, the task of the commissioners is "to conduct the re-evaluation of the property subject of this case."  The records show that plaintiff's land titles were cancelled in 1993 hence the task of the commissioners is to determine the value of her land in 1993.

II. THE PROPERTY SUBJECT OF THIS CASE

Located in Patalon, Zamboanga City, plaintiff's land was originally embraced under two certificates of title with a combined total area of 410.2271 hectares (has.).  These titles were cancelled on November 17, 1993.  On May 13, 1994 two parcels of land with a total combined area of 52.1234 has. were reconveyed to plaintiff for being not carpable.  The total area that comprises the property subject of this case is therefore 358.1037 has.  Proof of this is given below:

Plaintiff's original area:
	TCT No. T-62,736		- 205.1130 has.
	TCT No. T-62,737.		- 205.1141 has
	TOTAL AREA		- 410.2271 has.
Plaintiff's reconveyed area:
	TCT No. T-113,496		- 15.0025 has.
	TCT No. T-113,499		- 37.1209 has.
		TOTAL AREA	- 52.1234 has
AREA TAKEN BY DAR			- 358.1037 has.
			= = = = = = =

It is the function of DAR to determine the carpability of lands for agrarian reform.  The commissioners therefore do not have any authority or jurisdiction to question the carpability of the land that was not reconveyed to plaintiff.  In other words, whatever was not reconveyed to plaintiff is presumed to be carpable land and this area amounts to 358.1037 has.

This emphasis is being made because it appears from a collation of the land area in the two titles that were reconveyed to plaintiff and the two titles given to the Patalon Estate Agrarian Reform Beneficiaries Association (PEARA) that 3.3929 has. are not covered by a certificate of title.  As stated above, the commissioners have no authority or jurisdiction to question the lack of coverage of 3.3929 has. under a certificate of title.  This is the province of DAR and for DAR to address.  Insofar as the area of the property subject of this case is concerned, what was not returned to plaintiff is 358.1037 has. and this is therefore the area that is to be considered for valuation.

III.  ACTIVITIES/HEARINGS OF THE COMMISSIONERS

1. Ocular Inspection
   
2. Hearing for the presentation of plaintiff's evidence
   
3. Hearing for the presentation of defendant's evidence
   
4. Organization meeting
   
5. Executive sessions
   

Because x x x plaintiff's property was taken was some time ago x x x and her property as it was before no longer exists, the commissioners note the following observations made during their ocular inspection:

1. There are only a few coconut trees on the property subject of this case and they are young trees.  Whatever coconut trees plaintiff had on the property have been cut down.
   
   
2. There is heavy extraction/quarrying of sand and gravel on Patalon River which bounds plaintiff's property.
   
   
3. There is very little agricultural activity on the property.

IV.  THE EVIDENCES AND PLEADINGS FILED/SUBMITTED BY THE PARTIES

The commissioners are submitting to the Honorable Court all the pleadings and other papers filed by plaintiff and defendant Land Bank of the Philippines (LBP) as attachments to this report, as well as the transcript of all hearings.  In view of the voluminous nature of these attachments, and because they already have copies, plaintiff and LBP will only be provided with copies of this report without its attachments.

A. Plaintiff's Evidence
Testimonial

1. Mr. Rodolfo Luceñada, Head, Loan Administration Unit, Zamboanga Lending Center, Land Bank of the Philippines
   
   He testified that in July 2004 his unit appraised a 3[-]ha. Property in Sinubung, a barangay adjacent to Patalon; furthermore that the [price] range of [properties] in the area is P100 to P300 per square meter (sqm)
   
   
2. Mr. Rene Lacandalo, In-Charge of Sand and Gravel and Fishery Section, Office of the City Treasurer, Zamboanga City
   
   He testified that plaintiff's property is bounded by two river systems, the Patalon River and the Miluao River and that there is extraction and quarrying in the river system[s]

Documentary

Plaintiff submitted a folder of documents (Annex A of this Report) categorized, viz:

1. Prefatory Matters
   
   
   1. Complaint dated Dec. 19, 2002, Civil Case No. 4436-2K3
      
   2. Answer of LBP dated Sept. 30, 2003
      
   3. Order dated Oct. 30, 2003
   
   
   
2. The Property Subject of the Complaint
   
   
   1. TCT No. T-62,736
      
   2. TCT No. T-62,737
      
   3. TCT No. T-110,927
      
   4. TCT No. T-110,928
      
   5. TCT No. T-111,098
      
   6. TCT No. T-111,099
      
   7. TCT No. T-113,496
      
   8. TCT No. T-113,497
      
   9. TCT No. T-113,498
      
   10. TCT No. T-113,499
       
   11. Certification No. 2002-371 dated Sept. 4, 2002 issued by the Register of Deeds for Zamboanga City
       
   12. Colored Map of Zamboanga City showing all the barangays
       
   13. Colored Map of the property subject of the complaint
       
   14. Another map of the property subject of the complaint
   
   
3. Improvements on the property
   
   
   1. Tax Declaration No. 01 60 00017
      
   2. Tax Declaration No. 01 60 00018
      
   3. Statement of the Livestock
      
   4. Certification of the City Assessor on unit value of agricultural crops
      
   
   
4. Compensation due Susie Irene Galle
   
   
   1. Resolution No. 2003-10
      
   2. Resolution No. 2001-90
      
   3. Resolution No. 2001-87
      
   4. Resolution No. 2000-35
      
   5. Resolution No. 2000-05
      all of the City Appraisal Committee of the City of Zamboanga
      
   6. Manifestation dated Oct. 19, 1995
      
   7. Certification dated Mar. 14, 1995 issued by the Phil. Coconut Authority
      
   8. Copra Millgate Prices for Western Mindanao prepared by the Trade Information Relations Division, Philippine Coconut Authority
      
   
   
5. Other Matters
   
   
   1. Certificate of Registration of Patalon Agrarian Reform Farmers Multi-Purpose Cooperative (PARFAMCO), issued on Sept. 29, 1995
      
   2. List of farmer-beneficiaries of PARFAMCO
      
   3. Certificate No. 427-96, dated Sept. 19, 1996 of the Register of Deeds that no documents on the alleged PEARA [are] on file with the registry
      
   4. Excerpts from cases on just compensation

Pleadings

1. Memorandum dated January 24, 2005 (Annex B)
   
2. Counter-Manifestation and Counter-Comment dated Feb. 15, 2005 (Annex C)
   

B.  Defendant's Evidence
Testimonial

No witnesses were formally presented.

Documentary

LBP submitted a paper entitled Comment on Plaintiff's Evidence (Annex D) which contained the following attachments:

1. Field Inspection Report dated March 19, 1991 for land under TCT T-62,737
   
   
2. Appraisal Report dated March 19, 1991 for TCT T-62,737
   
   
3. Conference/Public Hearing Summary dated March 19,1991 for land covered under TCT T-62,737
   
   
4. Tax Declaration 01 16080 88  for TCT T-62,736 dated Jan. 13, 1983
   
   
5. Tax Declaration 01 16080 89  for TCT T-62,737 dated Feb. 13, 1983
   
   
6. Notice of Decision and Decision dated Oct. 13,^[37] 1996 of the DARAB
   
   
7. Memorandum of the DAR PARO to LBP dated Dec. 4, 1996 that Susie Irene Galle x x x had accepted the price per LBP's valuation of her land
   
   
8. Decision of the Supreme Court in Land Bank of the Philippines vs. Spouses Vicente Banal and Leonidas Arenas-Banal
   
   
9. Field Inspection Report, undated, for TCT No. T-62,736
   
   
10. Conference/Public Hearing Summary for TCT No. T-62,736, dated March 19, 1991

Pleadings

1. Manifestations/Comments to Plaintiff's Memorandum dated Feb. 1, 2005 (Annex E)
   

LBP requested that its Comment on Plaintiff's Evidence be treated as its memorandum.

V. EVALUATION/ANALYSIS OF THE EVIDENCES PRESENTED BY THE PARTIES

In her complaint plaintiff alleged that the fair market value of her property at the time of its taking was at least P100 per sqm. and she prayed for compensation for 358.1037 has.  Among plaintiff's principal documentary evidences presented to the commissioners is Resolution No. 2003.10 of the City Appraisal Committee of the City of Zamboanga which placed the value of land the City Government was expropriating in Patalon in 2003 at the equivalent of P152.52 per sqm.  Using 5% as an appreciation factor, and conversely a depreciation rate, the raw value of plaintiff's property in 1993 would be P91.32 per sqm.  Multiplied by 3,581,037 sqm. (358.1037 has.) this means a raw land value of P327,020,299.00.  Another principal documentary evidence of plaintiff is the Certification of the City Assessor of Zamboanga City as to how much the City Government of Zamboanga would pay for specified crops found on lands to be expropriated.  Based on the crops declared in plaintiff's tax declarations, these improvements would be paid P19,384,320.00.  Distributing this amount to the area involved (P19,384,320.00/3,581,037) would add P5.41 to the P91.32 per sqm. to add up to P96.73 per sqm.  On the other hand, the principal income of plaintiff was from the sale of copra to the oil mills.  Using the average millgate price of P8.35 per kilo (average for the November 1993 to October 1994) multiplied by 12.5 kilos of copra per tree multiplied by 38,666 coconut trees would result to a gross income from the sale of copra of P4,035,764 and deducting 20% as costs will give a net income of P3,228,611.00 which, capitalized at 12% would add P7.51 per sqm. to the value of the land for a total value of P104.24 per sqm. x x x.  It can thus be said that plaintiff has justified the amount of her claim for just compensation.

On the other hand, LBP stuck to its position that the amount of compensation for plaintiff should be P7,534,063.92, or P2.10 per sqm.  Considering that LBP conducted its field investigation more than two and a half years (2-1/2) before the taking of the property and used data therefore obtaining in 1991 and tax declarations of 1983 and did not even attempt to recompute based on the formula in the latest DAR Administrative Order, which is applicable to all lands that have not yet been paid for, it can be said that LBP failed to support its position.

VI.  VALUATION METHODS USED BY COMMISSIONERS AND RESULTS

The valuation of land is not an exact science.  Specified in Sec. 17 of R.A. 6657 and quoted in the Banal case a copy of which was furnished the commissioners, just compensation involves the examination of these factors:

1. Cost of acquisition of the land
   
   
2. Current value of like properties
   
   
3. Nature, actual use and income
   
   
4. Tax declarations
   
   
5. Assessment made by government assessors
   
   
6. Social and economic benefits contributed by the farmers and farmworkers and by the government to the property; and
   
   
7. Non-payment of taxes or loans secured from government financing institutions

Cost of acquisition of the property subject of this case cannot be determined.  The land was acquired and developed by plaintiff and her forebears into a fully developed self-sufficient estate.  Since lands of the magnitude of plaintiff's do not exist on the west coast portion of the city, the current value of similar properties cannot be ascertained.  The commissioners instead used the appraisal value of the city government's appraisal committee composed of the City Assessor, the City Engineer and the City Treasurer and LBP, as well as the actual selling value of lands near plaintiff's.  Factors 6 and 7 above are not applicable to this case.

In arriving at the raw land value of the subject property, the commissioners relied on the expertise of Commissioner Romel Calapardo who is the Property Appraiser of the Development Bank of the Philippines, Regional Management Office for Western Mindanao.  His computation for raw land value is given below:

A. Raw Land Value

Land Data

Zamboanga City Appraisal Committee / Actual Sale

1. Land # 1	:	Location	-	Patalon
		Appraisal	-	[P]152.52/sqm.
		Date	-	May 2003
		Area	-	16,391 sqm.
2. Land # 2	:	Location	-	Sinubung
		Appraisal	-	[P]200.00/sqm.
		Date	-	October 2000
		Area	-	23,825 sqm.
Banks
1. LBP	:	Location	-	Sinubung
		Appraisal	-	[P]250.00/sqm. along the road
				[P]150.00/sqm interior portion
		Date	-	2003
		Area	-	more than 6,000 sqm.
2. PNB	:	No exposure/appraisal done in the area

Comparative Adjustments

Adjustment Factor		L1	L2	L3
Size		-10.00	-10.00	-10.00
Location		0.00	-3.00	-3.00
Depth/Frontage		-10.00	-10.00	-10.00
Time (+ or 5% per yr		0.00	-15.00	0.00
	Algebraic Sum	-20.00	-38.00	-23.00
	Market Data	152.50	200.00	250.00
	Adjustment	-30.50	-76	-57.5
	Adjusted Value	122.00	124.00	192.50
Average Value of the Land at Present Time		=	P146.00/sqm.
Bank Practice		-	5% appreciation of land
Raw land value in 1993		-	P146.00 (5%) (P146) (11)
		=	P83.04 per sqm.
		=	P297,369,312.00
			= = = = = = = = =

B.  Capitalized Net Income

To arrive at the principal income of plaintiff, copra, the commissioners used a density of 100 trees per ha. for a total of 35,810 trees.  Multiplied by 12.5 kgs. of copra per tree at an average millgate buying price of P8.35, gross income is calculated at P3,737,669.00 and net income, using the accepted 20% cost/expense factor, will be P2,990,135.00.  Capitalizing net income at 12%, the capitalized net income of plaintiff is calculated as P24,917,792.00.

C.  Salvage Value

Considering that all the 35,810 trees have been cut down and presumably sold [as] lumber, the salvage value of these trees at P495.00 per tree, the rate the City Government is paying for coconut trees, is P17,725,950.00.

D  Summary

Raw land value	-	P297,369,312.00
Capitalized net income	-	24,917,792.00
Salvage value	-	17,725,950.00
TOTAL		P340,040,054.00
		vvvvvvvvvvvvvv

SUBMISSION

It is reiterated that the task of the commissioners is to value the property subject of this case.  It is not the task of the commissioners to determine just compensation for plaintiff.  This matter is within the exclusive jurisdiction of the Honorable Court and the commissioners merely provide the expertise needed by the Court to arrive at a resolution.

The commissioners submit the sum of P340,040,054.00 as the value of plaintiff Susie Irene Galle's expropriated land.

City of Zamboanga for the City of Pagadian, Zamboanga del Sur, May 06, 2005.

ENGR. ROMEL S. CALAPARDO x x x x

(signed) MRS. OBDULIA A. MANALO x x x x

RET. JUDGE CECILIO G. MARTIN
x x x x^[38]

On the other hand, Commissioner Calapardo submitted a Dissenting Opinion on Commissioners' Report^[39] dated June 3, 2005, which states thus:

DISSENTING OPINION ON COMMISSIONERS' REPORT
The undersigned Commissioner respectfully states that:

1. He is in receipt of the Commissioner's Report rendered by Comm. Obdulia A. Manalo, retired City Assessor of Zamboanga City.
   
   
2. That the Commissioner's Report was discussed in an executive session between Comm. Manalo and the undersigned on May 11, 2005.
   
   
3. That he does not agree with the report and thus, this Dissenting Opinion, as follows:
   
   
   • Commissioner Manalo use [sic] as basis for the valuation of the properties the report of the first Commission formed by the court composed of Zamboanga City Assessor Erwin Bernardo, City Engineer Luis Despalo and the undersigned.
     
     It is the believed [sic] of the undersigned Commissioner that this should not have been so because the first Commission was a failure, and in fact, the court rejected its report. The first Commission failed to observe the Rules on Proceedings.  Not a single hearing was conducted.
     
     
   • The report of the first Commission was never presented as evidence in the course of the hearing of the current Commission, and thus, it was also never discussed.
   • While the raw land value as presented in the report of Comm. Manalo was indeed drafted by the undersigned, again, some important things and issues overlooked [sic] because no hearing was conducted.
   • As presented by Comm. Manalo in her report, the computation of the product of raw land value of P83.04 is incorrect.
   • The capitalized net income and salvage value as presented by Comm. Manalo in her report is her own and not of the Commission.
   
   
4. Presented hereunder is the report of the undersigned Commissioner, viz:
   

REPORT

Plaintiff, owner of two (2) parcels of land situated at Barangay Patalon, Zamboanga City, containing an aggregate area of 410.2271 has., alleged the following:

1. The compensation offered for her property involving an area of 356.2257 has. is unconscionable and confiscatory. That the basis for the compensation should be the fair market value of the property at the time of the taking, which is 1993.
   
   
2. The area reconveyed to her is only 52.1459 has.  Thus, 3.3929 has. of her property were lost; that she did not received [sic] any offer of compensation for this particular area; and that she was not informed whatsoever what have became [sic] of this area.
   

The primary function of the commission is to determine the value of the property at the time of the taking in 1993.  In this case, the area in consideration is 356.2257 has.  As to the missing area of 3.3929 has., Commissioner Calapardo is in [sic] the opinion that its legality is beyond the Commission's authority.

DECISION
On August 20, 1992, defendant DAR offered a compensation of Php6,083,545.26 for the property covering an area of 356.2257 has.  This offered compensation was later increased to Php7,534,063.92.

The case was then elevated to the Department of Agrarian Reform Adjudication Board.  DARAB, in its decision dated October 15, 1996, awarded the landowner the amount of Php10,627,148.00 for an equivalent area of 373.2271 has. inclusive of the 1.4 has. claim which was identified by Land Bank as barangay road.

The declared value of the property per tax declaration is Php9,056,990.00.  As DARAB itself pointed out in its decision, adopting the formula under Administrative Order No. 6 of "MV x 2", the compensation for the property would have been Php20,645,445.00.

Worth noting is the fact that when the case was presented before the DARAB, the claim of the plaintiff was Php30,681,107.68 as presented by LBP during the hearing on January 12, 2005.

While LBP claimed that plaintiff accepted the price as determined by the DARAB, Plaintiff, through her counsel points otherwise.  LBP was not able to show proof that indeed Plaintiff accepted the DARAB valuation.

Plaintiff through her counsel, also confirmed that they have not seek [sic] the assistance of an appraisal firm to come up with the valuation of the property.  An appraisal of the property by an independent appraisal company at the time of the taking could have been an invaluable input in determining just compensation.  No person or owner of a property can claim that his property is worth so much because he says so.  Every claim has to be back up [sic] by acceptable and credible method of valuation.

Plaintiff's claim over the property in her complaint with the Special Agrarian Reform Court in December 2002 is Php350,569,636.10 which is more than 90% over her original claim during the DARAB proceedings.  In her final Memorandum to the Board of Commissioners dated January 24, 2005, her claim over the property was placed at Php485,994,853.00.

It may be deduced that the amount of her claim is always based on the current market value of the property, at the time every pleading is prepared.

On the part of the undersigned Commissioner, the appraisal of the property, using accepted principals [sic] and banking practices, taking into consideration present market data gathered and considering improvements of the property as declared in the tax declaration at the time of the taking, and working back to the time of the taking, resulted to [sic] Php79,764,000.00.

The undersigned Commissioner's computation however may proof [sic] impractical considering the span of time that had elapse [sic] from the time of the taking, which has resulted in altered land use in surrounding areas and affected land valuation considerably.  A case in point is the establishment of the office of the Zamboanga Economic Zone and Freeport Authority a few kilometers before the property of the plaintiff, which was established sometime in 1997.  A single development of this nature in a locality can change the market attitude entirely.  And with such change, market data during the present time can never be comparable to the market condition during the time of the taking.

Fair Market Value of real estate is determined by the desirability of the property and the availability of a willing buyer and seller.  Both must possess sufficient knowledge of all the uses to which it is adapted and for which it is capable of being used, and agrees to buy and to sell respectively without pressure.

Under this concept, the value of the property at the time of the taking cannot be more than Php30,681,107.68, the claim of the plaintiff in 1995, two years after the time of the taking.  This is because a claim has been made; it can be assumed that this amount is the value to which the owner is willing to part with his property at that time.

Real estate, especially land, tends to appreciate in value with time.  At the time of the taking therefore, the value of the property is either equal to or less than Php30,681,107.68.

The undersigned Commissioner also cannot agree with the valuation of DARAB which priced the property at Php10,627,148.00 simply because the property's declared value per tax declaration is Php9,056,990.00, and as DARAB itself pointed out, the compensation of the property should be Php20,645,445.00 per Administrative Order No. 6.

It is common knowledge that real estate are [sic] usually declared less than their [sic] true value simply because the declaration made by the owner is only for tax purposes.  Along this line, there is no reason for the landowner to over value her property and be burdened by realty taxes in the future.

The general rule is that real estate appreciates in value over time.  As to what percentage depends upon the development in the locality.  Some Banking institution, under normal condition, consider a 5% appreciation in value to be acceptable.  In the same manner, if only a short period of time elapses, 5% decrease in price on the current market value may be practicable to approximate value for a property several years back.

Under this condition, the claim of the Plaintiff of Php30,681,107.68 in 1995 may be recomputed. Considering the above-stated practice, in 1993, the time of taking, the value of the property is approximately Php27,612,996.90.

Then again, the claim of the Plaintiff at Php30,681,107.68 has no basis.  Based on the records, she came up with this value on her own, which may be self-serving.  But as the owner of the property, she has the right to demand her price, after all, a sale can only be consummated upon the meeting of the minds of the seller and buyer.

The case at hand, however, is not a normal sale between a seller and a buyer in the open market.  It is based on the laws of the land as promulgated.

Premises considered, the undersigned Commissioner, after due consideration and analysis of evidence presented, believes that the fair market value of the property at the time of taking in 1993 is Twenty Million Six Hundred Forty Five Thousand Four Hundred Forty Five Pesos (Php20,645,445.00).

The undersigned Commissioner however agrees with the Plaintiff that the delay in the payment of just compensation may be construed as an injustice.  Thus, a reasonable interest should be granted to Plaintiff for the failure of Dependants [sic] to come up with the acceptable price.

Respectfully submitted this 3rd day of June, 2005, at Zamboanga City, Philippines.

(signed)
ROMEL S. CALAPARDO
DBP Representative
Commission Member^[40]

The SAC held a hearing on the above reports on June 17, 2005, while the parties filed their respective comments and manifestations thereto.^[41]

On August 15, 2005, the SAC issued a Resolution,^[42] the dispositive portion of which reads

WHEREFORE, judgment is hereby rendered ordering defendants Land Bank of the Philippines and the Department of Agrarian Reform to jointly and severally pay plaintiff the following:

1.  Just compensation in the amount of THREE HUNDRED SIXTEEN MILLION SEVEN HUNDRED FIFTY-THREE THOUSAND SIX HUNDRED THIRTY-TWO PESOS (P316,752,632.00) [sic].

2.  Compounded legal interest as prayed for to be reckoned from the time of taking up to the time that plaintiff is fully paid.

3.  Commissioners fees to be taxed as part of the costs pursuant to Section 12, Rule 67 of the 1997 Rules of Civil Procedure and Section 16, A.M. No. 04-2-04-SC.

4.  Attorney's fees in an amount equivalent to 15% of the total award in items no. 1 and 2 above.

5.  Cost of the suit.

SO ORDERED.^[43]

In arriving at the above conclusion, the SAC held, as follows:

After a careful and studied scrutiny of the voluminous records of this case these facts were clearly established:

1. The area of the property subject of this case is 358.1037 hectares.  The aggregate area in plaintiff's^[44] TCT Nos. T-62,736 and T-62,737 was 410.2271 hectares.  What was eventually reconveyed or returned to plaintiff in TCT Nos. T-113,496 and T-113,497^[45] totaled 52.1234 hectares.  DAR therefore took 358.1037 hectares.  What DAR took constitutes the property subject of this case for which just compensation should be paid.  Whether or not the area of 358.1037 hectares is fully covered under certificates of title is not for this Court to inquire into but for DAR to address.  Furthermore, there can be no other assumption but that the total area of 358.1037 hectares that DAR took is carpable, absent a protest from the landowner that her land is not subject to the CARL.  LBP has no standing to protest that the landowner whose land was already taken by DAR should not be paid for a portion of the land taken because that portion is not carpable.

2. Plaintiff's land titles mentioned above were cancelled and title of the entire area covered in the titles transferred even before plaintiff was paid compensation for her land.

3. The Patalon Estate Agrarian Reform Beneficiaries Association, the recorded beneficiary of plaintiff's property, is non-existent.  It does not exist in fact.  It does not exist in law.

4. All the coconut trees that were standing on plaintiff's property when it was taken by DAR were eventually cut down.  Her estate no longer exists.

5. There is heavy extraction of sand and gravel on the river that abounds [sic] plaintiff's property.

6. Commissioner Obdulia Manalo arrived at a value for the property subject of this case through a credible methodology that was clearly presented in her report.

7. Plaintiff likewise arrived at a value for her property through a credible method that was clearly presented in her Memorandum.

8. Commissioner Romel Calapardo, on the other hand, did not present the methodology by which he arrived at P20,645,445.00 as the value of plaintiff's property.  This is the value that DARAB said was arrived at by using the formula "MV x 2" which formula is not applicable to plaintiff's property but was merely used to prove the arbitrary and confiscatory value of P7,534,063.91 that LBP was offering for plaintiff's property.  Commissioner Calapardo misappreciated DARAB's statements.

9. Commissioner Calapardo also premised his discussions on fiction, the fiction being that plaintiff claimed the amount of P30,681,107.68 in 1995 as just compensation for her property.

10.  LBP did not present any documents to show how it arrived at the value of P7,534,063.91.  Neither did it explain in any pleading how this amount was determined.  It did not show the basis for whatever factors it used nor the authorities or sources of its data and information.  Furthermore, it did not dispute plaintiff's assertion that no actual field inspection of her property was conducted as it claimed it did in 1991.

11.  The Zoning Ordinance of the City of Zamboanga, City Ordinance No. 29, enacted in 1978, declared large areas of land located along the west coast portion of Zamboanga City as industrial areas which caused an upward movement of the value of land along the west coast.  Plaintiff's property is located along the west coast.

12.  The City Government of Zamboanga valued a parcel of land located in Patalon at P152.52 per square meter in 2003.  In 2000 it valued a parcel of land located in the adjacent barangay of Sinubung at P200.00 per square meter.  LBP valued land at Sinubung in 2003 at P300.00 per square meter along the road.

The task of this Court is to determine the amount of just compensation for plaintiff.  As to what just compensation is, this has been defined as the full and fair equivalent of the property taken from its owner by the expropriator; the measure is not the taker's gain [but] the owner's loss.  The word "just" is used to intensify the meaning of the word "compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, ample. (Association of Small Landowners in the Philippines, Inc., et  al., vs. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 1989, 175 SCRA 343).

As to what just compensation for plaintiff should be, in a most compelling sense the documents that she submitted convey in no uncertain terms that the amount of P7,534,063.91 that LBP maintains should be paid to her and the amount of P10,767,469.00 fixed by DARAB is confiscatory and tantamount to a taking.

The Court does not see merit in LBP's contention that the compensation that the City Government of Zamboanga City pays for land and its improvements cannot apply to land expropriated for agrarian reform because of the revolutionary nature of land reform.  It must be recalled that in Land Bank of the Philippines vs. Court of Appeals, et al., G.R. No. 118712 and G.R. No. 118745, 249 SCRA 149 the Supreme Court said:  "We agree with the observation of the respondent court.  The ruling in the 'Association' case merely recognized the extraordinary nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the traditional mode of payment of compensation and recognized payment other than in cash.  It did not, however, dispense with the settled rule that there must be full payment of just compensation before the title to the expropriated property is transferred."

Finding both the report of Commissioner Obdulia Manalo and the Memorandum of plaintiff to be well taken the Court rules that the value of the property subject of this case is its raw land value of P297,369,312.00 as determined by Commissioner Manalo and the value of its improvements of P19,384,320.00 as determined in the Memorandum to be what the City Government of Zamboanga would pay, for a total of three hundred sixteen million seven hundred fifty three thousand six hundred thirty-two pesos (P316,753,632.00).^[46]

Both LBP and DAR moved to reconsider.  LBP's Motion for Reconsideration^[47] is dated September 8, 2005, yet it set the motion for hearing on October 28, 2005.  DAR's Motion for Reconsideration,^[48] dated September 12, 2005, was likewise set for hearing on October 28, 2005.  Respondent opposed the motions.^[49]

On November 16, 2005, the SAC issued an Order^[50] denying reconsideration of its August 15, 2005 Resolution.  It held:

The Motion for Reconsideration of LBP is without merit.  The Motion for Reconsideration of DAR is likewise without merit.  Both Motions are pro forma and are mere scraps of paper.

Section 2, Rule 37 of the 1997 Rules of Civil Procedure, 3rd paragraph require that a "Motion for Reconsideration shall point out specifically the findings or conclusions of the judgment or final order which are not supported by the evidence or which are contrary to law, making express reference to the testimonial or documentary evidence or to the provisions of law alleged to be contrary to such findings or conclusions."  DAR and LBP aver that the Court failed to consider Section 17 of R.A. 6657 and apply the valuation formula of DAR Administrative Order No. 6, Series of 1992, as amended.  Section 17 is an enumeration of the factors that shall be considered in the determination of just compensation.  DAR and LBP contend that because the Court did not determine just compensation using the formula in an administrative issuance, DAR Administrative Order No. 6, the Court consequently failed to consider Section 17 of RA 6657.

Their argument is baseless.  Section 17 does not require the Court to use the valuation formula in DAR Administrative Order No. 6.  The allegation that the contested Resolution is contrary to law is therefore ludicrous.  The law vests in the Court exclusive and original jurisdiction to hear and determine just compensation to landowners of condemned lands.  The jurisdiction of the Court cannot be restricted or undermined by administrative orders of administrative agencies. (EPZA vs. Dulay, 149 SCRA 305).

The Court is constrained to emphasize, moreover, that neither DAR nor LBP presented the formula in DAR Administrative Order No. 6 to the commission appointed in this case or to the Court.  Neither did they present to the commission or to this Court their calculations of just compensation based on the formula in the said Order or on any order.

The Court considers as valid the objections of plaintiff that the Motions for Reconsideration of LBP and DAR violated Section 11, Rule 13, of the 1997 Rules of Civil Procedure.  Both the Motion for Reconsideration of LBP and the Motion for Reconsideration of DAR do not contain a written explanation as to why the service of the motion on plaintiff was not done personally.  Accordingly, in the light of the pronouncement of the Supreme Court in Perla S. Zulueta vs. Asia Brewery Inc., G.R. No. 138137, March 8, 2001, both motions should be expunged from the records.

Moreover, LBP and DAR set their motion for hearing on October 28, 2005, more than forty (40) days after the motions were filed, in clear violation of Section 5, Rule 15, of the 1997 Rules of Civil Procedure.  The motions are pro forma, they are obviously intended to delay the proceedings of this case.  At the time the motion was filed, LBP already had a previously set hearing on October 14, 2005 for another land reform case and there is no cogent reason for LBP to set the hearing of their motion for reconsideration in this case to a much later date.

On October 30, 2003 the parties agreed to refer the valuation of the property subject of this case to a commission.  The Court accepted with modification the Commissioner's Report.  The records will show that whatever objections now being raised in the motion for reconsideration of LBP and DAR were not raised in a comment or objection to the Commissioner's Report.

With respect to Land Bank of the Philippines' objection that interest should be based on market interest rates aligned with 91-day treasury bill rates, the Court does not see any conflict with Section 18(4) R.A. 6657.  Compounded legal interest rate will be imposed on that portion of the compensation due plaintiff that will be [sic] should have been paid in cash if compensation had been paid at the time of the taking in 1993, and the proceeds of the LBP bonds that should have already matured and bore market interest rates aligned with 91-day treasury bill rates.  Inasmuch as more than ten (10) years have elapsed since the time of the taking of plaintiff's property, compensation due her should now be paid entirely in cash.

WHEREFORE, the Motions for Reconsideration of Land Bank of the Philippines and Department of Agrarian Reform are DENIED for being patently without merit and for being pro forma and intended merely to delay the proceedings of this case.  The Resolution dated August 15, 2005 is hereby amended insofar as [the imposition of] compounded legal interest on compensation due.  It is hereby Ordered that compounded legal interest shall be imposed not on the entire compensation due but only on the cash portion of the compensation that should have been paid plaintiff in 1993, or at the time of the taking, and on the proceeds of the corresponding portion of the Land Bank of the Philippines bonds that should have matured yearly and bore market interest rates aligned with 91-day treasury bill rates starting 1994 up to the time that plaintiff shall be fully paid.

SO ORDERED.^[51]

Rulings of the Court of Appeals

LBP instituted a Petition for Review with the CA, which was docketed as CA-G.R. SP No. 00761-MIN.  For its part, the DAR filed a separate Petition for Review, docketed as CA-G.R. SP No. 00778-MIN.

In a January 17, 2004 Order, the two petitions were consolidated.^[52]

On July 27, 2010, the CA issued the assailed Consolidated Decision, decreeing as follows:

FOR THE STATED REASONS, these consolidated petitions are PARTLY GRANTED as follows:

(1) The total amount of just compensation for the Three Million Five Hundred Sixty-Eight Thousand Two Hundred Fifty-Seven square meters (or 356.8257 hectares) of respondent's land is RECOMPUTED and fixed at the total amount of Two Hundred Ninety-Six Million Three Hundred Eight Thousand Sixty-One Pesos and Twenty-Eight Centavos (P296,308,061.28).

(2) The award of compounded legal interest is MODIFIED to 12% simple interest rate per annum in the total amount of just compensation which is reckoned from the time of taking until respondent shall be fully paid.

(3) The award of attorney's fees in an amount equivalent to 15% of the total award of just compensation and legal interest is REDUCED to Three Hundred Thousand Pesos (P300,000.00).

SO ORDERED.^[53]

In disposing of the Petitions, the CA circumscribed the issues that needed to be resolved to 1) the total area actually taken by the government for agrarian reform, and 2) the amount of just compensation that must be paid to Galle.

On the issue of total land area actually expropriated, the appellate court held as follows:

Respondent demands compensation for a total area of 358.1037 hectares, but LBP wants to compensate her only for 356.8257 hectares.

The original area of respondent's land was 205.1130 hectares in TCT No. T-62,736 and 205.1141 hectares in TCT No. T-62,737.  That comprises a total area of 410.2271 hectares.  The area eventually reconveyed by DAR to respondent was 15.0025 hectares in TCT T-113,496 and 37.1209 hectares in TCT No. T-113,499, or a total reconveyed land area of 52.1234 hectares.  Thus, the area that was retained by DAR is 358.1037 hectares.

But it is not as simple as that.

x x x x

It appears from this presentation that approximately 3.4000 hectares was [sic] not included in LBP's computation of the total land area to be compensated.  The 3.4000 hectares corresponds [sic] to the alleged "missing" 3.3929 hectares.  The 3.4000 hectares includes the 1.4000 hectares of respondent's land used as barangay road and the 2.000 hectares of respondent's land which formed part of the national road.  The 3.4 hectare portion of respondent's land classified as road portions were excluded by LBP from valuation.

x x x x

Thus, the DARAB ordered the inclusion of the 1.4000 hectares barangay road in the determination of the total valuation.  The DARAB excluded only the approximate 2.000 hectares comprising the existing national road. x x x

x x x x

It matters to keep in mind that the power to determine with exactitude what areas may come within the coverage of the Comprehensive Agrarian Reform Program (CARP) is essentially lodged with the DAR.  Thus, the total area of respondent's land covered by CARP should be 356.8257 hectares, not 358.1037 hectares.^[54]

With regard to the issue of just compensation, the CA made the following pronouncement:

Sections 17 and 18 of Republic Act No. 6657 provides [sic] the guideposts for the determination of just compensation, to wit:

Sec. 17. Determination of Just Compensation. In determining just compensation, 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, and the assessment made by government assessors shall be considered. 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.

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 LBP or as may be finally determined by the court as the just compensation for the land.

The LBP proposed to compensate respondent for the value of the 356.8257 hectares at Seven Million Five Hundred Thirty-Four Thousand Sixty-Three Pesos and Ninety-One Centavos (P7,534,063.91), or at Two Pesos and Eleven Centavos (P2.11) per square meter.  The DAR did not agree with LBP's valuation; it pegged the value of the land at Ten Million Seven Hundred Sixty-Seven Thousand Four Hundred Sixty-Nine Pesos (P10,767,469.00).

Considering the documents submitted by the respondent, the SAC found both LBP's and DAR's valuation as confiscatory and tantamount to unjust taking of respondent's land.

Indeed, it has been established that when the DAR took respondent's land, it was a fully-developed estate. x x x

No doubt, the subject land is not idle.  It has been planted to coconut trees with intercrops, mango trees, bamboo clamps [sic], coffee trees which were then fruit bearing.  Respondent also raised in the land livestock such as cattle, carabao, and horses which she proposed to sell to DAR based on normal cattle weights to be paid by LBP.  In fact, respondent's land was fenced and patrolled by security guards prior to DAR's taking.

It is even significant to consider that more than sixty-two hectares of the land is coastal fronting the Sulu Sea, while on the south portion of the land lies the Miluao River and on the north, the Patalon River.  Not only that.  The subject land is located along Zamboanga-Labuan road a national road which covers an approximately two (2) hectare-stretch of the land.  Respondent was likewise even recognized by DAR for providing the1.4 hectare-portion of the land as barangay road.  The undisputed presence of water and road networks in respondent's land certainly defy LBP's valuation of the land at P7,534,063.91, which translates to the ridiculously unfair amount of P2.11 per square meter.

In arriving at a valuation of P83.04 per square meter, the SAC meticulously evaluated the following factors:

[1] the report of the Commissioners vis-à-vis the Dissenting Opinion;

[2] the nature of the land, its actual use and income;

[3] the sworn valuation by the owner; the tax declarations;

[4] the current value of like properties or the comparative sales of adjacent land;

[5] the permanent improvements on the land and value of improvements; and

[6] the potential use.

It cannot, therefore, be said that the SAC had no basis for its valuation of respondent's land.  It took into consideration the required important factors enumerated in Section 17 of Republic Act No. 6657 which, in turn, were the very same matters that made up the DAR formula.  Verily, it can be said that the SAC had substantially applied the formula by looking into all the factors included in it, i.e., nature, actual use and income, comparable sales and market value, assessment made by government assessors, to arrive at the proper land value.

Indeed, the valuation of respondent's property at P83.04 per square meter is founded on evidence.  Records show the following "raw land value" as determined by Zamboanga City Appraisal Committee based on actual sale:

1 Land # 1:	Location	-	Patalon
	Appraisal	-	P152.52 / sqm.
	Date	-	May 2003
	Area	-	16,391 sqm.
2 Land # 2	Location	-	Sinubung
	Appraisal	-	P200.00 / sqm.
	Date	-	October 2000
	Area	-	23,825 sqm.

The Commissioners' Report even considered the value of the land located at Sinubung, Zamboanga City an adjacent area from Pantalon [sic], Zamboanga City which LBP appraised at P250.00 and P150.00 per square meter for land situated along the road and for interior lands, respectively.  From the existing data on raw value of land, the Commissioners' Report makes the comparative adjustments, as follows:

Adjustment Factor
		L1	L2	L3
Size		-10.00	-10.00	-10.00
Location		0.00	-3.00	-3.00
Depth/Frontage		-10.00	-10.00	-10.00
Time (+ or 5% per yr		0.00	-15.00	0.00
	Algebraic Sum	-20.00	-38.00	-23.00
	Market Data	152.50	200.00	250.00
	Adjustment	-30.50	-76	-57.5
	Adjusted Value	122.00	124.00	192.50

This leads to the conclusion that the average value of the land at the time of the investigation of the commissioners was P146.00 per square meter.  The commissioners correctly point out, that the value of real property appreciates through the years, and not otherwise, though the percentage of increase depends upon the developments in the locality.  Under normal conditions, however, banking institutions consider as acceptable a 5% appreciation in value per annum.  It matters to note that the commissioners were unanimous on the methodology of arriving at raw land value at the time of the taking.  Thus, the SAC's application of the bank practice in determination of the raw land value of land at the time of the taking of the land in 1993 was reasonable and proper.

Applying the bank practice of fixing annual appreciation of land at 5%, the raw value of the land has been correctly computed at P83.04 per square meter.  From this valuation, the total value of the Three Million Five Hundred Sixty-Eight Thousand Two Hundred Fifty-Seven square meters (or 356.8257 hectares) of respondent's land is Two Hundred Ninety-Six Million Three Hundred Eight Thousand Sixty-One and 28/100 Pesos (P296,308,061.28).

Hence, we find in order the modification of the SAC Resolution dated 15 August 2005 pertaining to the total amount of just compensation as well as the award of compounded legal interest, attorney's fees, and commissioner's fees.

On the matter of compounded legal interest, the SAC ordered the DAR and LBP to jointly and severally pay compounded legal interest on just compensation.  We cannot allow that.

The charging of compounded [interest] has been held as proper as long as its payment has been agreed upon by the parties.  There is not even a hint of such agreement.  We, however, allow legal interest in the nature of damages for the delay in payment which in effect makes the obligation on the part of the government one of forbearance.  Indeed, legal interest is the measure of damages arising from delay (mora solvendi) under the Civil Code.

The Supreme Court consistently held that just compensation has been defined as "the full and fair equivalent of the property taken from its owner by the expropriator,"^[55] and that the gauge for computation is not the taker's gain but the owner's loss.  In order for the payment to be "just", it must be real, substantial, full, and ample.  The concept of just compensation embraces 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 the taking of the property.

Without prompt payment, compensation cannot be considered "just" inasmuch as the property owner is 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 or her loss.

In this case, the DAR literally took respondent's land without her knowledge and participation, and without paying her just compensation.  Worse, from the time of the taking of respondent's land in 1993 up to the present, LBP has not yet remunerated respondent although DAR has already distributed the lands to the farmer beneficiaries for more than seventeen (17) years ago [sic].  It is but just and equitable that the unreasonable delay in the payment of just compensation should warrant the award of 12% interest per annum in respondent's favor.

On the matter of attorney's fees, the SAC ordered the DAR and LBP to jointly and severally pay attorney's fees in the amount equivalent to 15% of the just compensation and compounded legal interest.

We cannot sustain such an award of attorney's fees.  The general rule is that attorney's fees cannot be recovered as part of damages because of the policy that no premium should be placed on the right to litigate.  In all cases, it must be reasonable, just and equitable if the same is to be granted.  It is necessary for the court to make findings of fact and law to justify the grant of such award.  The matter of attorney's fees must be clearly explained and justified by the trial court in the body of its decision.  In this case, the SAC failed to substantiate its award of attorney's fees which amounts to fifteen percent (15%) of the just compensation and legal interest.

However, we deem it proper to fix the award of attorney's fees at P300,000.00.  It is good to note that although the main case was merely for determination of just compensation with damages, involving as it did modest legal issues, that complaint had in reality generated several incidents during the close to seventeen (17) years that this case was under litigation.  Once, the DAR elevated the case to this Court seeking relief from the denial of their motion to dismiss.  Then, after the SAC had constituted the Board of Commissioners, respondent had to wriggle her way through in presenting and defending her claim for just compensation and damages.  And now, respondent has to contend with the separate petitions for review filed by DAR and LBP.  It is even sad to note that the original respondent had already passed to the great beyond without seeing the dawn of her toils and efforts, all because of the prolonged determination of her just compensation.  In fine, taking into account the overall factual environment upon which this case has proceeded, we find the award of P300,000.00 sufficient and reasonable.^[56]

LBP filed a Motion for Reconsideration,^[57] arguing that the CA erred in fixing just compensation without taking into consideration the formula prescribed in DAR Administrative Order No. 6, Series of 1992 (AO 6), as amended by Administrative Order No. 11, Series of 1994 (AO 11);^[58] that the CA erred in finding the bank liable for interest and attorney's fees; that Galle's complaint for just compensation has prescribed; and that in filing Civil Case No. 4436-2K3, Galle is guilty of forum-shopping.

On January 19, 2011, the CA issued the second assailed Resolution denying LBP's motion for reconsideration.  Thus, the present Petition in G.R. No. 195213.

As stated earlier, on September 23, 2004, the CA issued the herein assailed Decision and February 22, 2006 Resolution respectively dismissing the DAR's Petition in CA-G.R. SP No. 80678 and denying its motion for reconsideration thereof, declaring that the Petition was defective as it failed to state the date of receipt of the SAC's assailed June 20, 2003 Order, and that the SAC's Orders may not be elevated to the higher courts until the hearing in Civil Case No. 4436-2K3 is terminated and the case decided on the merits, as required under Section 59 of the CARL.

In a June 1, 2011 Resolution of this Court, G.R. No. 195213 was ordered consolidated with G.R. No. 171836.

Issues
The following issues are raised:

In DAR's Petition in G.R. No. 171836

1. THE HONORABLE COURT OF APPEALS ERRED WHEN IT DISMISSED THE PETITION FOR CERTIORARI AND PROHIBITION BASED ON MERE TECHNICALITY, RATHER THAN DECIDE THE CASE ON THE MERITS;
   
   
2. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT PETITIONER VIOLATED SECTION 59 OF REPUBLIC ACT NO. 6657 WHEN IT FILED INSTANT (PETITION IN CA-G.R. SP No. 80678);^[59]
   

In LBP's Petition in G.R. No. 195213

1.  THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE COMPLAINT FOR JUST COMPENSATION FILED BY THE RESPONDENT BEFORE THE SPECIAL AGRARIAN COURT HAS ALREADY PRESCRIBED.

2.  THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE RESPONDENT IS GUILTY OF FORUM-SHOPPING WHEN SHE FILED THE COMPLAINT BEFORE THE SPECIAL AGRARIAN COURT.

3.  GRANTING ARGUENDO THAT A JUST COMPENSATION HAS TO BE DETERMINED, THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN AFFIRMING WITH MODIFICATION THE RESOLUTION DATED AUGUST 30, 2005 AND ORDER DATED DECEMBER 2, 2005 OF THE SPECIAL AGRARIAN COURT (SAC) AND FIXED THE JUST COMPENSATION AT P296,308,061.68 FOR THE 356.8257 HECTARES OF COCONUT LANDS, THE SAME BEING NOT IN ACCORDANCE WITH THE LEGALLY PRESCRIBED VALUATION FACTORS UNDER SECTION 17 OF R.A. 6657 AS TRANSLATED INTO A BASIC FORMULA IN DAR ADMINISTRATIVE ORDER NO. 06, SERIES OF 1992, AS AMENDED BY DAR AO NO. 11, SERIES OF 1994, AND AS RULED BY THE SUPREME COURT IN THE CASES OF SPS. BANAL, G.R. NO. 143276 (JULY 20, 2004); CELADA, G.R. NO. 164876 (JANUARY 23, 2006); AND LUZ LIM, G.R. NO. 171941 (AUGUST 2, 2007) AND OTHER JURISPRUDENCE ON THE MATTER.

4.  THE COURT OF APPEALS ALSO ERRED IN HOLDING PETITIONER LBP LIABLE FOR:

(C) 12% SIMPLE INTEREST RATE PER ANNUM BASED ON THE TOTAL AMOUNT OF JUST COMPENSATION; AND

(D) THE AMOUNT OF THREE HUNDRED THOUSAND (P300,000.00) AS ATTORNEY'S FEES AND LEGAL INTEREST.

Accordingly, Petitioner LBP raises these questions of law:

1. HAS THE PERIOD TO FILE A COMPLAINT FOR JUST COMPENSATION PRESCRIBED?

2. IS THE RESPONDENT GUILTY OF FORUM-SHOPPING?

3. CAN THE COURT OF APPEALS DISREGARD THE VALUATION FACTORS UNDER SECTION 17 OF R.A. 6657 AS TRANSLATED INTO A BASIC FORMULA IN DAR ADMINISTRATIVE ORDER NO. 06, SERIES OF 1992, AS AMENDED, AND AS HELD IN THE CASES OF SPS. BANAL; CELADA; AND LUZ LIM, SUPRA., IN FIXING THE JUST COMPENSATION OF THE SUBJECT PROPERTY OF THE RESPONDENT?

4. IS PETITIONER LBP LIABLE FOR INTEREST AND ATTORNEY'S FEES?^[60]

The Parties' Respective Arguments

In G.R. No. 171836. The DAR argues in its Petition and Reply^[61] that its failure to state in its Petition in CA-G.R. SP No. 80678 the dates of its receipt of the SAC's assailed June 20, 2003 and September 12, 2003 Orders on July 11, 2003 and September 29, 2003, respectively was a simple and honest oversight, an inadvertence that may be cured since it did not adversely affect the substantial rights of the respondents therein.  It contends that the outright dismissal of its Petition on the basis of technical rules is too strict and rigid, considering that an issue of jurisdiction is raised therein, specifically that since the October 15, 1996 DARAB Decision fixing just compensation in DARAB Case No. JC-RIX-ZAMBO-0011-CO has become final and executory, the SAC did not have jurisdiction to act on Galle's petition for determination anew of just compensation in Civil Case No. 4436-2K3. It adds that the CA's application of Section 59 of the CARL is misplaced, since what is being raised in CA-G.R. SP No. 80678 is the SAC's jurisdiction to take cognizance of Civil Case No. 4436-2K3, which must first be resolved if only to free the parties from the rigors and expense of unnecessary trial.  It thus prays that the assailed CA dispositions be reversed, and that Civil Case No. 4436-2K3 be dismissed.

LBP likewise filed a Reply,^[62] echoing the DAR's contention that Galle's option for the judicial determination of just compensation for her estate has long prescribed due to her failure to file a case within the 15-day period prescribed by Rule XIII, Section 11 of the 1994 DARAB Rules of Procedure; that her filing of Civil Case No. 4574 could not have tolled the 15-day period; that her subsequent filing of Civil Case No. 4436-2K3 was improper and constituted forum- shopping, and violated the principle of res judicata as regards the final and executory October 15, 1996 DARAB Decision in DARAB Case No. JC-RIX-ZAMBO-0011-CO; that the SAC failed to observe the proper formula in fixing just compensation, as required under DAR AO 6, as amended by AO 11; that it was erroneous for the CA to apply the pronouncement in Apo Fruits Corporation v. Court of Appeals^[63] in awarding just compensation to Galle without the benefit of applying the formula in DAR AO 6, since the ruling in said case is merely pro hac vice; that the applicable cases would be Land Bank of the Philippines v. Spouses Banal,^[64] Land Bank of the Philippines v. Gallego, Jr.,^[65] Land Bank of the Philippines v. Lim;^[66] Land Bank of the Philippines v. Suntay;^[67] Land Bank of the Philippines v. Heirs of Eleuterio Cruz;^[68] Land Bank of the Philippines v. Dumlao;^[69] Allied Banking Corporation v. Land Bank of the Philippines;^[70] and Land Bank of the Philippines v. Colarina,^[71] which mandate the application of the DAR AO 6 formula.

In her Comment,^[72] which was later supplemented by a consolidated Comment,^[73] Galle insists that the October 15, 1996 DARAB Decision in DARAB Case No. JC-RIX-ZAMBO-0011-CO did not become final and executory as there is still a pending and unresolved motion for reconsideration filed by LBP, which thus did not foreclose her right to institute Civil Case No. 4436-2K3; that she is not guilty of forum-shopping in filing Civil Case No. 4574 precisely since said case was erroneosly filed with a court which was not the designated SAC having jurisdiction over her complaint for the fixing of just compensation; that the CA is correct in its pronouncements; and that contrary to what is claimed in the Petition, her substantial rights are materially affected considering that her property had been expropriated and awarded to a non-existent organization without payment of just compensation.  Thus, she prays for the affirmance of the questioned CA pronouncements.

In G.R. No. 195213.  In its Petition, LBP advances essentially the same arguments laid down in the above Reply it submitted in G.R. No. 171836.  It additionally claims that Galle's right to have the just compensation for her estate determined by the SAC was foreclosed by her failure to institute the proper court action within the prescribed period under Rule XIII, Section 11 of the 1994 DARAB Rules of Procedure, and for this reason, the SAC in Civil Case No. 4436-2K3 had no jurisdiction to take cognizance of Galle's complaint; that the failure of the DARAB in Case No. JC-RIX-ZAMBO-0011-CO to resolve LBP's pending motion for reconsideration of its October 15, 1996 Decision cannot validate Galle's late filing of Civil Case No. 4436-2K3, and instead indicates that the filing of said case was premature; that LBP's pending motion for reconsideration affected only LBP, and not Galle, against whom the October 15, 1996 Decision should have become final and executory; that the filing of Civil Case No. 4436-2K3 following the nullification of the proceedings in Civil Case No. 4574 constituted forum-shopping; that the SAC and CA failed to observe the proper formula in fixing just compensation, as provided under DAR AO 6, as amended by AO 11 and applicable jurisprudence; that in fixing just compensation for the estate at the unconscionable amount of P83.04 per square meter (or over P830,000.00 per hectare), no hearing was conducted and the SAC merely relied on the commissioners' report; that in view of the enormous difference in the valuations of the two commissioners (Manalo's at P340,040,054.00 and Calapardo's at P20,645,445.00) and the principle that the determination of just compensation is ultimately a function of the courts, the SAC should not have relied blindly on Manalo's findings and should have conducted its own evaluation of the evidence and computation; that the manner of computing just compensation in agrarian reform cases differs from that in ordinary expropriation cases, in that the taking of land for agrarian reform purposes involves the exercise of police power and thus necessarily entails loss on the part of the landowner; and that the CA erred in awarding 12% interest per annum, attorney's fees and legal interest.

LBP thus prays for the nullification and setting aside of the assailed CA pronouncements on the ground of prescription and forum-shopping.  It included an alternative prayer for the Court to fix just compensation at P7,534,063.91 for the acquired area of 356.2257 hectares or the remand of the case to the SAC for further proceedings to correctly determine just compensation.

In their consolidated Comment,^[74] the respondents in G.R. No. 195213 reiterate their view that the October 15, 1996 DARAB Decision in DARAB Case No. JC-RIX-ZAMBO-0011-CO did not become final and executory as there is still a pending and unresolved motion for reconsideration filed by LBP, which thus did not foreclose Galle's right to institute Civil Case No. 4436-2K3; that Galle is not guilty of forum- shopping in filing Civil Case No. 4574 precisely since said case was erroneosly filed with a court which was not the designated SAC having jurisdiction over her complaint for the fixing of just compensation; that the CA did not err in its pronouncements; and that contrary to what is claimed in the Petition, her substantial rights are materially affected considering that her property had been expropriated and awarded to a non-existent organization without payment of just compensation.

Notably, respondents bewail that their mother's estate was taken, yet there is no agrarian reform beneficiary.  They claim that the beneficiary of record PEARA is a phantom association that is not even registered with the Securities and Exchange Commission or the Cooperative Development Authority, as testified by representatives of the said agencies in Civil Case No. 4574.

Respondents thus pray for the Court to affirm the assailed CA dispositions.

Our Ruling
The Court denies the Petition in G.R. No. 171836 and partially grants the Petition in G.R. No. 195213.

The existence of PEARA

In National Federation of Labor v. National Labor Relations Commission,^[75] the existence of PEARA as a legitimate cooperative accredited by the DAR and beneficiary of Galle's estate which was then known as the Patalon Coconut Estate was recognized.  There thus appears to exist no issue at this point regarding the authenticity and existence of the organization.

The October 15, 1996 DARAB Decision is null and void

An examination of the October 15, 1996 DARAB Decision in Case No. JC-RIX-ZAMBO-0011-CO will reveal that in arriving at its conclusions, the DARAB relied mainly on the claim folder profile prepared by LBP, thus:

A perusal of the claimfolder profile prepared by the Land Bank of the Philippines showed that the subject lanholdings has [sic] the following land use:

x x x x

In its determination of the land value, LandBank has used the valuation factors on Capitalized Net Income (CNI) and Market Value per Tax Declaration (MV/TD) multiplied by ninety percent (90%) and ten percent (10%) respectively.  In using such valuation factors, it has come up with a total land value of SEVEN MILLION FIVE HUNDRED THIRTY FOUR THOUSAND SIXTY THREE PESOS (P7,534,063.91) [sic] broken as follows:

x x x x

The Board agrees with the data inputs adopted in determining the capitalized net income (CNI) of coffee, corn as well as the market value per tax declaration for each landholding including the crop improvements x x x.

It is the Board's view to adopt all the data used by the LandBank in the revaluation except for the coconut land the average gross production of which is 912 kilograms per hectare for both landholdings x x x.^[76]

However, in Manalo's Commissioners' Report in Civil Case No. 4436-2K3, it is particularly noted that LBP's computations were based on field investigations which were conducted in 1991 or more than two and a half years (2-1/2) prior to the taking of the property in 1993, and it used data obtaining in 1991 and 1983 tax declarations,^[77] which are clearly outdated and could not form the basis for an accurate and fair computation of just compensation for Galle's estate, given the fundamental principle in eminent domain that "the owner shall receive the market value of his property at the time of the taking."^[78]  These findings were not denied nor refuted by LBP in its Manifestations/Comments^[79] to the Commissioners' Report and Calapardo's Dissenting Opinion; on the contrary, it appears to have agreed to Calapardo's computation of just compensation at P20,645,445.00.^[80]

Indeed, in its August 15, 2005 Resolution, the SAC observed that

10.  LBP did not present any documents to show how it arrived at the value of P7,534,063.91.  Neither did it explain in any pleading how this amount was determined.  It did not show the basis for whatever factors it used nor the authorities or sources of its data and information.  Furthermore, it did not dispute plaintiff's assertion that no actual field inspection of the property was conducted as it claimed it did in 1991.^[81]

In its Motion for Reconsideration^[82] of the above Resolution, LBP even admitted that from the start, it utilized 1988 tax declarations for Galle's estate in arriving at its computation of just compensation at P7,534,063.92;^[83] it simply assumed that in 1993 the time of taking the same values in the 1988 tax declarations still applied.

In a past pronouncement this Court finds relevant, it was held that

In this particular case, the tax declarations presented by the petitioner as basis for just compensation were made by the Lapu-Lapu municipal, later city assessor long before martial law, when land was not only much cheaper but when assessed values of properties were stated in figures constituting only a fraction of their true market value. The private respondent was not even the owner of the properties at the time. It purchased the lots for development purposes. To peg the value of the lots on the basis of documents which are out of date and at prices below the acquisition cost of present owners would be arbitrary and confiscatory.^[84]

For the above reasons, the October 15, 1996 DARAB Decision in Case No. JC-RIX-ZAMBO-0011-CO is patently defective and erroneous for being based on wrong and outdated information, and thus null and void.

No prescription or forum-shopping with respect to Civil Case No. 4436-2K3

With the above pronouncement, it becomes clear that Galle was not precluded from instituting Civil Case No. 4436-2K3.  Being null and void, it is as if the October 15, 1996 DARAB Decision in Case No. JC-RIX-ZAMBO-0011-CO was never issued.  Thus, Galle was never constrained by the application of Rule XIII, Section 11 of the 1994 DARAB Rules of Procedure requiring the filing of a case directly with the SAC within 15 days from notice of the DARAB's Decision fixing just compensation.

It likewise follows that there is no forum-shopping involved.  Even if we were to consider Civil Case No. 4574, still no forum-shopping was committed; the trial court in said case did not have jurisdiction over cases for the fixing of just compensation, and any remedy obtained by Galle in said court relative to the fixing of just compensation for her estate is of no value, being susceptible as it is to nullification.

The SAC's August 15, 2005 Resolution and the assailed CA Decision

As already discussed, the determination of just compensation is a judicial function.  Moreover, both Section 17 of RA 6657 and the formula prescribed in the applicable AO of the DAR must be considered in the computation.

Reading the August 15, 2005 Resolution in its entirety, it readily appears that the SAC did not apply the formula in the applicable Administrative Circulars of the DAR (AOs 6 and 11) in arriving at its own independent valuation of Galle's estate.  It relied upon Manalo's Commissioners' Report, which likewise did not apply the formula in AOs 6 and 11,^[85] although it took into consideration some of the factors laid down in Section 17 of RA 6657.^[86]

The CA is guilty of the same mistake.  Nowhere in the appellate court's decision can it be seen that the formula prescribed by AOs 6 and 11 were taken into account; all that were considered were the factors enumerated in Section 17 of RA 6657, which thus makes its pronouncement incomplete.

Thus, while this Court acknowledges that Galle's estate was expropriated to the extent of 356.8257 hectares as the CA has found, the computation of the exact amount of just compensation remains an issue that must be resolved, taking into consideration both Section 17 of RA 6657 and AOs 6 and 11.  In an earlier case decided by this ponente, it was held that "the evidence to be presented by the parties before the trial court for the valuation of the property x x x must conform to Section 17 of RA 6657 and, as far as practicable, DAR Administrative Order No. 6, series of 1992, as amended by DAR Administrative Order No. 11, series of 1994."^[87]  This was followed by a recent pronouncement to the same effect, thus:

In the recent case of Land Bank of the Philippines v. Honeycomb Farms Corporation, we again affirmed the need to apply Section 17 of R.A. No. 6657 and DAR AO 5-98 in just compensation cases. There, we considered the CA and the RTC in grave error when they opted to come up with their own basis for valuation and completely disregarded the DAR formula. The need to apply the parameters required by the law cannot be doubted; the DAR's administrative issuances, on the other hand, partake of the nature of statutes and have in their favor a presumption of legality.  Unless administrative orders are declared invalid or unless the cases before them involve situations these administrative issuances do not cover, the courts must apply them.

In other words, in the exercise of the Court's essentially judicial function of determining just compensation, the RTC-SACs are not granted unlimited discretion and must consider and apply the R.A. No. 6657-enumerated factors and the DAR formula that reflect these factors. These factors and formula provide the uniform framework or structure for the computation of the just compensation for a property subject to agrarian reform. This uniform system will ensure that they do not arbitrarily fix an amount that is absurd, baseless and even contradictory to the objectives of our agrarian reform laws as just compensation. This system will likewise ensure that the just compensation fixed represents, at the very least, a close approximation of the full and real value of the property taken that is fair and equitable for both the farmer-beneficiaries and the landowner.

x x x x

After considering these factors and formula, we are convinced that the RTC-SAC completely disregarded them and simply relied on Branch 36's valuation. For one, the RTC-SAC did not point to any specific evidence or cite the values and amounts it used in arriving at the P200.00 per square meter valuation. It did not even consider the property's market value based on the current tax declaration that Yatco insists the RTC-SAC considered in addition to Branch 36's valuation. Assuming that the RTC-SAC considered the property's market value (which, again, we find that it did not), this alone will not suffice as basis, unless justified under Item II.A.3 of DAR AO 5-98 (as provided above). Then too, it did not indicate the formula that it used in arriving at its valuation or which led it to believe that Branch 36's valuation was applicable to this case. x x x^[88] (Emphasis and underscoring supplied)

The SAC and the CA may have been of the opinion that reliance on either of the two Section 17 of RA 6657 or AOs 6 and 11 would suffice.

Remand for the proper computation of just compensation

Taking the foregoing into consideration, there is thus a need to remand the case in order to properly compute the just compensation that Galle and her heirs are entitled to, including interest and attorney's fees, if any.  This Court is not the proper forum for that, as it is not a trier of facts, and it cannot receive evidence to fix the correct amount of just compensation.  For this purpose, the CA may be commissioned to receive and evaluate the evidence of the parties; this becomes especially relevant where the property was taken from its owners way back and the case for just compensation has been pending for decades, not to mention that the original owner Susie Galle did not live to receive what is due her, even as she fought this protracted court battle.

Considering, however, that the land was acquired in 1989 and the only surviving petitioner is now an octogenarian and is in need of urgent medical attention, we find these special circumstances justifying in the acceleration of the final disposition of this case. This Court deems it best pro hac vice to commission the CA as its agent to receive and evaluate the evidence of the parties.  The CA's mandate is to ascertain the just compensation due in accordance with this Decision, applying Section 17 of RA 6557 and applicable DAR regulations. As explained in Land Bank of the Philippines v. Gallego, Jr., the remand of cases before this Court to the CA for the reception of further evidence is not a novel procedure. It is sanctioned by Section 6, Rule 46 of the Rules of Court.  In fact, the Court availed of this procedure in quite a few cases.^[89]

Withdrawal of proceeds, pending determination of correct just compensation 

In light of the foregoing considerations, it is but just and proper to allow, with becoming dispatch, withdrawal of the revised compensation amount, albeit protested.  The concept of just compensation contemplates of just and timely payment; it embraces not only the correct determination of the amount to be paid to the landowner, but also the payment of the land within a reasonable time from its taking.  Without prompt payment, compensation cannot, as Land Bank of the Philippines v. Court of Appeals instructs, be considered "just," for the owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for years before actually receiving the amount necessary to cope with his loss.^[90]

Using the foregoing pronouncement as precedent, this Court opts to grant, in the interest of justice, Galle's heirs the right to withdraw the amount of P7,534,063.91, which LBP is willing to compensate the respondents for their mother's estate, in the meantime that the case is pending determination anew in the CA.

With the view taken of the case, there is no need to resolve the other issues raised by the parties.  Particularly, the procedural issues raised in G.R. No. 171836 merit no further discussion since the very soul of the Petition therein allegations of prescription and forum-shopping has been struck down in this disquisition.

WHEREFORE, the Court resolves as follows:

1. The Petition in G.R. No. 171836 is DENIED.  The assailed September 23, 2004 Decision and February 22, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 80678 are AFFIRMED;

2. The Petition in G.R. No. 195213 is GRANTED IN PART.  The assailed July 27, 2010 Consolidated Decision and January 19, 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 00761-MIN and CA-G.R. SP No. 00778-MIN are REVERSED and SET ASIDE.

3. Civil Case No. 4436-2K3 is REMANDED to the Court of Appeals, which is directed to receive evidence and immediately determine the just compensation due to Susie Irene Galle's estate/heirs including all applicable damages, attorney's fees and costs, if any in accordance with this Decision, taking into consideration Section 17 of Republic Act No. 6657, the applicable Department of Agrarian Reform Administrative Orders, including Administrative Order No. 6, Series of 1992, as amended by Administrative Order No. 11, Series of 1994, and prevailing jurisprudence. The Court of Appeals is further directed to conclude the proceedings and submit to this Court a report on its findings and recommendations within 90 days from notice of this Decision; and

4. The petitioner Land Bank of the Philippines is ORDERED to PAY Susie Irene Galle's estate or heirs herein respondents the amount of SEVEN MILLION FIVE HUNDRED THIRTY FOUR THOUSAND SIXTY THREE AND 91/100 PESOS (P7,534,063.91), in cash, immediately upon receipt of this Decision.

SO ORDERED.

Carpio, (Chairperson), Brion, Perez, and Perlas-Bernabe, JJ., concur.

---

^[1] Rollo, G.R. No. 171836, pp. 9-23; rollo, G.R. No. 195213, pp. 53-160.

^[2] Rollo, G.R. No. 171836, pp. 25-33; penned by Associate Justice Mariflor P. Punzalan Castillo and concurred in by Associate Justices Sesinando E. Villon and Rodrigo F. Lim, Jr.

^[3] Id. at 35-36; penned by Associate Justice Rodrigo F. Lim, Jr. and concurred in by Associate Justices Teresita Dy-Liacco Flores and Ramon R. Garcia.

^[4] Rollo, G.R. No. 195213, pp. 164-199; penned by Associate Justice Edgardo A. Camello and concurred in by Associate Justices Leoncia R. Dimagiba and Nina G. Antonio-Valenzuela.

^[5] Id. at 201-202.

^[6] Consisting of 205.1130 hectares.

^[7] Consisting of 205.1141 hectares.

^[8] Rollo, G.R. No. 195213, pp. 189-190.

^[9] Id. at 26, 28.

^[10] Id. at 13.

^[11] Id. at 726-727.

^[12] Id. at 731.

^[13] Id. at 728.

^[14] Id. at 729-730.

^[15] Id. at 339-351.

^[16] Id. at 350.

^[17] Id. at 707, 791.

^[18] Id. at 444-450.

^[19] Id. at 449.

^[20] Id. at 451-455; penned by Associate Justice Juan Q. Enriquez, Jr. and concurred in by Associate Justices Ruben T. Reyes (ret.) and Presbitero J. Velasco (now a Member of this Court).

^[21] Id. at 454.

^[22] Id. at 456.

^[23] Id. at 401-407.

^[24] Id. at 417-423.

^[25] Section 11. Land Valuation and Preliminary Determination and Payment of Just Compensation. The decision of the Adjudicator on land valuation and preliminary determination and payment of just compensation shall not be appealable to the Board but shall be brought directly to the Regional Trial Courts designated as Special Agrarian Courts within fifteen (15) days from receipt of the notice thereof. Any party shall be entitled to only one motion for reconsideration.

^[26] Rollo, G.R. No. 195213, pp. 459-465.

^[27] Id. at 466-468.

^[28] Citing Land Bank of the Philippines v. Court of Appeals, 376 Phil. 252 (1999).

^[29] Citing Republic v. Court of Appeals, 331 Phil. 1070 (1996).

^[30] Rollo, G.R. No. 195213, pp. 474-476.

^[31] Id. at 477-478.

^[32] Id. at 501.

^[33] Id. at 502-505.

^[34] Section 59. Orders of the Special Agrarian Courts. No order of the Special Agrarian Courts on any issue, question, matter or incident raised before them shall be elevated to the appellate courts until the hearing shall have been terminated and the case decided on the merits.

^[35] Rollo, G.R. No. 195213, p. 21.

^[36] Id. at 566-572.

^[37] Should be October 15.

^[38] Rollo, G.R. No. 195213, pp. 566-572.

^[39] Id. at 575-579.

^[40] Id.

^[41] Id. at 580-586, 593-596, 597-601.

^[42] Id. at 295-319.

^[43] Id. at 319.

^[44] Respondent Galle.

^[45] Should be T-113,499.

^[46] Rollo, G.R. No. 195213, pp. 316 -319.

^[47] Id. at 324-337.

^[48] Id. at 602-606.

^[49] Id. at 607-621.

^[50] Id. at 320-323.

^[51] Id. at 321-323.

^[52] Id. at 36.

^[53] Id. at 198-199.

^[54] Id. at 189-191.

^[55] Citing among others Apo Fruits Corporation v. Court of Appeals, 543 Phil. 497 (2007); Land Bank of the Philippines v. Wycoco, 464 Phil. 83 (2004); and Reyes v. National Housing Authority, 443 Phil. 603 (2003).

^[56] Rollo, G.R. No. 195213, pp. 191-198.

^[57] Id. at 629-665.

^[58] Rules And Regulations Amending The Valuation Of Lands Voluntarily Offered And Compulsorily Acquired As Provided For Under Administrative Order No. 17, Series Of 1989, As Amended, Issued Pursuant To Republic Act No. 6657.

^[59] Rollo, G.R. No. 171836, pp. 15-16.

^[60] Rollo, G.R. No. 195213, pp. 83-85.

^[61] Rollo, G.R. No. 171836, pp. 112-114.

^[62] Id. at 213-234.

^[63] Supra note 55.

^[64] 478 Phil. 701 (2004).

^[65] 596 Phil. 742 (2009).

^[66] 555 Phil. 831 (2007).

^[67] 561 Phil. 711 (2007).

^[68] 588 Phil. 345 (2008).

^[69] 592 Phil. 486 (2008).

^[70] 600 Phil. 346 (2009).

^[71] G.R. No. 176410, September 1, 2010, 629 SCRA 614.

^[72] Rollo, G.R. No. 171836, pp. 81-86.

^[73] Id. at 167-208.

^[74] Rollo, G.R. No. 195213, pp. 953-994.

^[75] 383 Phil. 910 (2000).

^[76] Rollo, G.R. No. 195213, pp. 344-346.

^[77] Id. at 570.

^[78] Land Bank of the Philippines v. Castro, G.R. No. 189125, August 28, 2013, 704 SCRA 253, 269, citing Provincial Government of Rizal v. Caro de Araullo, 58 Phil. 309, 316 (1933).

^[79] Rollo, G.R. No. 195213, pp. 593-596.

^[80] Id. at 594.

^[81] Id. at 318.

^[82] Id. at 324-337.

^[83] Id. at 329.

^[84] Export Processing Zone Authority v. Judge Dulay, 233 Phil. 313, 324 (1987).

^[85] A.  There shall be one basic formula for the valuation of lands covered by VOS or CA regardless of the date of offer or coverage of the claim:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

Where:
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration

The above formula shall be used if all the three factors are present, relevant, and applicable.

A.1  When the CS factor is not present and CNI and MV are applicable, the formula shall be:
A.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall be:
A.3  When both the CS and CNI are not present and only MV is applicable, the formula shall be:
In no case shall the value of idle land using the formula MV x 2 exceed the lowest value of land within the same estate under consideration or within the same barangay or municipality (in that order) approved by LBP within one (1) year from receipt of claimfolder.

A.4  In all of the above, the computed value using the applicable formula shall in no case exceed the LOs offer in case of VOS.

The LOs offer shall be grossed up from the date of the offer up to the date of receipt of claimfolder by LBP from DAR for processing.

A.5  For purposes of this Administrative Order, the date of receipt of claimfolder by LBP from DAR shall mean the date when the claimfolder is determined by the LBP to be complete with all the required documents and valuation inputs duly verified and validated, and is ready for final computation/ processing.

A.6  The basic formula in the grossing-up of valuation inputs such as LOs offer, Sales Transaction (ST), Acquisition Cost (AC), Market Value Based on Mortgage (MVM) and Market Value per Tax Declaration (MV) shall be:

Grossed-up

Valuation Input =  Valuation input x
                              Regional Consumer Price
                             Index (RCPI) Adjustment
                             Factor

x x x x

^[86] SEC. 17. Determination of Just Compensation. - In determining just compensation, 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, and the assessment made by government assessors, shall be considered. 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.

^[87] Land Bank of the Philippines v. Livioco, G.R. No. 170685, September 22, 2010, 631 SCRA 86, 114.

^[88] Land Bank of the Philippines v. Yatco Agricultural Enterprises, G.R. No.172551, January 15, 2014.

^[89] Heirs of Lorenzo and Carmen Vidad v. Land Bank of the Philippines, G.R. No. 166461, April 30, 2010, 619 SCRA 609, 639.

^[90] Land Bank of the Philippines v. Department of Agrarian Reform Adjudication Board, G.R. No. 183279, January 25, 2010, 611 SCRA 106, 112-113.