lubrica vs.

land bank of the philippines_digest

THE CASE WAS REMANDED TO THE SAC FOR THE FINAL DETERMINATION OF JUST COMPENSATION
FACTS:

Lubrica is an assignee of certain parcels of AGRICULTURAL LANDS located at Sta. Lucia, Sablayan,
Occidental Mindoro. In 1972, 311+ hectares was placed under the land reform program, subdivided and
distributed to FBs pursuant to PD 27 and EO 228. DAR and LBP fixed the value of the land at P5.056 M,
deposited in cash and bonds in favor of Lubrica. Nenita Suntay-Taedo and Emilio Suntay inherited from
Federico Suntay 2 parcels of AGRICULTURAL LAND in Balansay, Mamburao, Occidental Mindoro. 128+
hectares were placed under the coverage of PD 27 and valued by the LBP at P1.512 M. LOs rejected the
valuation of their properties.

The PARAD fixed the preliminary just compensation at:

P51.8 M for 311+ hectares.

21.608 M for 128+ hectares.

LBP filed petitions for the judicial determination of just compensation with the SAC. LOs filed motions to
deposit the preliminary compensation determined by the PARAD. The SAC ordered the LBP to deposit
the provision compensation as determined by the PARAD as there is no law which prohibits LBP to make
a deposit pending the fixing of the final amount of just compensation. There is no reason for LBP to
further delay the deposits considering that the DAR already took possession of the properties and
distributed the same to FBs as early as 1972. On MR, the CA held that the immediate deposit of the
preliminary value of the expropriated properties is improper because it was erroneously computed.
(citing Gabatin v. LBP) The value of the GSP should be computed at the time of legal taking of the land,
that is, 21 October 1972 when the LOs were effectively deprived of ownership over their properties by
virtue of PD 27. The PARAD incorrectly used the amounts of P500 and P300 which are the prevailing GSP
for palay and corn at the time of payment instead of P35 and P31, the prevailing GSP at the time of
taking in 1972.

ISSUE:

Whether the court a quo has decided the case in a way not in accord with the latest decision of the
Supreme Court in the case of LBP vs. Natividad.

Whether the court a quo has, with grave abuse of discretion, so far departed from the accepted and
usual course of judicial proceedings, deciding issues that have not been raised, as to call for an exercise
of the power of supervision.

HELD:

The expropriation of the landholding DID NOT take place upon the date of effectivity of PD 27 on 21
October 1972 but seizure would take effect on the payment of just compensation judicially determined
(citing LBP v. Natividad, OP v. CA). Expropriation of landholdings covered by RA 6657 takes place, NOT
on the effectivity of the Act on 15 June 1988 but on the payment of just compensation. It would be
highly inequitable to compute the just compensation using the values at the time of the taking in 1972
NOT at the time of payment considering that the government and the FBs have already benefited from
the land although ownership thereof has not yet been transferred in their names. The transfer of
possession or ownership of the land to the government is conditioned upon the receipt by the LO of the
corresponding payment or deposit by the DAR of the compensation with an accessible bank.

UNTIL THEN, TITLE REMAINS WITH THE LANDOWNER.

The agrarian reform process is still incomplete as the just compensation to be paid the LOs has yet to be
settled. Considering the passage of RA 6657 before the completion of this process, the just
compensation determined and the process concluded under RA 6657. RA 6657 is the applicable law with
PD 27 and EO 228 having only suppletory effect (citing LBP v. Natividad, Paris v. Alfeche and LBP v. CA).
Section 18 of RA 6657 mandates that the LBP shall compensate to LO in such amount as may be agreed
upon by the LO and the DAR and the LBP or as may be finally determined by the court as just
compensation for the land.

In determining just compensation, the following factors should be considered:

cost of acquisition of the land.

the current value of like properties.

its nature, actual use and income.

the sworn valuation by the owner.

the tax declarations.

the assessment made by the government assessors.

the social and economic benefits contributed by the farmers and farmworkers and by the
government to the property.

non-payment of taxes or loans secured from a government financing institution (citing Section
17, RA 6657).

Section 17, RA 6657 was converted into formula by the DAR through AO 5, series of 1998:

LV = (Capitalized Net Income x 0.6) + (Comparable Sales x 0.3) + (Market Value per Tax
Declaration x 0.1)