Apo V LBP

1/10/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 514
VOL. 514, FEBRUARY 6, 2007 537

Apo Fruits Corporation vs. Court of Appeals
*
G.R. No. 164195. February 6, 2007.
APO FRUITS CORPORATION and HIJO PLANTATION,

INC., petitioners, vs. THE HON. COURT OF APPEALS
and LAND BANK OF THE PHILIPPINES, respondents.
Judgments; Res Judicata; Having been dismissed based on

technicality and not on the merits, the principle of res judicata
does not apply. Res Judicata applies only where judgment on the
merits is finally rendered on the first.—In this case, the third
element of res judicata, i.e., that the former judgment must be on
the merits, is not present. It must be remembered that the
dismissal of CA-G.R. SP No. 74879 was based on technicality, that
is, for failure on the part of the DAR to state material dates
required by the rules. Having been dismissed based on a
technicality and not on the merits, the principle of res judicata
does not apply. Res judicata applies only where judgment on the
merits is finally rendered on the first.
Pleadings and Practice; It is already an accepted rule of

procedure for us to strive to settle the entire controversy in a single
proceeding, leaving no root or branch to bear the seeds of future
litigation.—It is already an accepted rule of procedure for us to
strive to settle the entire controversy in a single proceeding,
leaving no root or branch to bear the seeds of future litigation. If,
based on the records, the pleadings, and other evidence, the
dispute can be resolved by us, we will do so to serve the ends of
justice instead of remanding the case to the lower court for
further proceedings.
_______________
* THIRD DIVISION.
538
http://www.central.com.ph/sfsreader/session/0000016833c9e054e706041d003600fb002c009e/t/?o=False 1/32
538 SUPREME COURT REPORTS ANNOTATED
Eminent Domain; While eminent domain lies as one of the

inherent powers of the state, there is no requirement that it
undertake a prolonged procedure, or that the payment of the
private owner be protracted as far as practicable.—While eminent
domain lies as one of the inherent powers of the state, there is no
requirement that it undertake a prolonged procedure, or that the
payment of the private owner be protracted as far as practicable.
Just Compensation; Words and Phrases; The concept of just

compensation embraces not only the correct determination of the
amount to be paid to the owners of the land, but also the payment
of the land within a reasonable time from its taking.—The
concept of just compensation embraces not only the
correct determination of the amount to be paid to the
owners of the land, but also the payment of the land within
a reasonable time from its taking. Without prompt
payment, compensation cannot be considered “just”
inasmuch as the property owner is being 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
loss. Just compensation is defined as the full and fair equivalent
of the property taken from its owner by the expropriator. It has
been repeatedly stressed by this Court that 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, and ample.
Eminent Domain; Just Compensation; Eminent domain is an

inherent power of the State that enables it to forcibly acquire
private lands intended for public use upon payment of just
compensation to the land owner.—On payment of just
compensation, we have previously held: Eminent domain is an
inherent power of the State that enables it to forcibly
acquire private lands intended for public use upon
payment of just compensation to the owner. Obviously, there
is no need to expropriate where the owner is willing to sell under
terms also acceptable to the purchaser, in which case an ordinary
deed of sale may be agreed upon by the parties. It is only where
the owner is unwilling to sell, or cannot accept the price or other
conditions offered by the vendee, that the power of eminent
domain will come into play to assert the paramount authority of
the
539
VOL. 514, FEBRUARY 6, 2007 539
State over the interests of the property owner. Private rights

must then yield to the irresistible demands of the public interest
on the time-honored justification, as in the case of the police
power, that the welfare of the people is the supreme law. But for
all its primacy and urgency, the power of expropriation is by no
means absolute (as indeed no power is absolute). The limitation is
found in the constitutional injunction that “private property shall
not be taken for public use without just compensation” and in the
abundant jurisprudence that has evolved from the interpretation
of this principle. Basically, the requirements for a proper
exercise of the power are: (1) public use and (2) just
compensation.
Same; Same; It is now settled that the valuation of property in

eminent domain is essentially a judicial function which is vested
with the RTC acting as Special Agrarian Court. The same cannot
be lodged with administrative agencies and may not be usurped by
any other branch or official of the government.—The next question
now crops up, who shall determine just compensation? It is now
settled that the valuation of property in eminent domain is
essentially a judicial function which is vested with the RTC acting
as Special Agrarian Court. The same cannot be lodged with
administrative agencies and may not be usurped by any other
branch or official of the government.
PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.

Donato T. Faylona and Ronald C. Aguado for
petitioners Apo Fruits Corporation and Hijo Plantation,
Inc.
The Office of the Government Corporate Counsel,
Danilo Beramo and Jose M.A. Quimboy for respondent
Land Bank of the Philippines.
CHICO-NAZARIO, J.:
Apo Fruits Corporation (AFC) and Hijo Plantation, Inc.

(HPI) are the registered owners of five parcels of
agricultural lands located in San Isidro, Tagum, Davao
Province, to wit:
540

APO FRUITS CORPORATION
Transfer Certificate of Area (Ha.)

Title (TCT)1 No.
2
T-113359 115.2179

3
T-113366 525.1304
4
HIJO PLANTATION, INC.
TCT No. Area (Ha.)

T-10361 155.8408

T-10362 170.7980

5
T-10363 478.8920
On 12 October 1995, AFC and HPI voluntarily 6offered to

sell the above parcels of land to the government. After the
initial processing at the Department of Agrarian
7
Reform
(DAR) of the Voluntary Offer to Sell (VOS) application of
_______________
1 Records of Agrarian Case No. 55-2000, Book I, Annex “C,” p. 13; Both
land titles (TCTs No. 113359 and No. 113366) were previously covered by
TCT No. 50976.
2 Id., at Annex “A,” p. 5.
3 Id., at p. 6.
4 Id., at p. 135.
5 Rollo, p. 259.
6 Pursuant to Republic Act No. 6657, as amended, otherwise known as
the Comprehensive Agrarian Reform Law of 1988, effective 15 June 1988.
(Records of Agrarian Case No. 55-2000, Book I, Annex “B,” p. 9.)
7 Voluntary Offer to Sell (VOS) – A scheme wherein landowner/s
voluntarily offer their agricultural lands, including improvements
thereon, if any, for coverage. (Records, p. 592) DAR Administrative Order
No. 5, Series of 1998.
541
VOL. 514, FEBRUARY 6, 2007 541

AFC and HPI, it was referred to the Land Bank of the

Philippines (LBP) for initial valuation. On 16 October 1996,
AFC and HPI received separately from the DAR’s
Provincial Agrarian Reform Officer (PARO) of Davao
province a notice of land acquisition and valuation,
informing AFC that the value of the properties has8 been
placed at P86,900,925.88 or P165,484.47 per hectare 9 while
HPI’s properties were valued at P164,478,178.14. Both
AFC and HPI considered the valuations unreasonably low
and inadequate as just compensation for the properties.
On 5 November 1996, AFC rejected 10the valuation for
both TCTs No. T-113366 and No.113359. AFC applied for 11
the shifting of the mode of acquisition for TCT No. 113359
from VOS 12
to Voluntary Land Transfer/Direct Payment
Scheme.
_______________
8 Records of Agrarian Case No. 55-2000, Book I, p. 13.

9 Id., at p. 15.
10 Id., at p. 19.
11 Id., at p. 19.
12 Republic Act No. 6657, Sec. 20. Voluntary Land Transfer.—
Landowners of agricultural lands subject to acquisition under this Act
may enter into a voluntary arrangement for direct transfer of their lands
to qualified beneficiaries subject to the following guidelines:
(a) All notices for voluntary land transfer must be submitted to the
DAR within the first year of the implementation of the CARP.
Negotiations between the landowners and qualified beneficiaries
covering any voluntary land transfer which remain unresolved
after one (1) year shall not be recognized and such land shall
instead be acquired by the government and transferred pursuant
to this Act.
(b) The terms and conditions of such transfer shall not be less
favorable to the transferee than those of the government’s
standing offer to purchase from the landowner and to resell to the
beneficiaries, if such offers have been made and are fully known to
both parties.
(c) The voluntary agreement shall include sanctions for
noncompliance by either party and shall be duly recorded and its
implementation monitored by the DAR.
542

HPI also rejected the valuation of its three parcels of land

covered13 by TCTs No. T-10361, No. T-10362 and No. T-
10363.
Owing to the rejection by both AFC and HPI of LBP’s
valuation, the DAR requested LBP to deposit the amounts
equivalent to their valuations
14
in the names and for the
accounts of AFC and HPI. AFC thereafter withdrew the
amount of P26,409,549.86, while HPI withdrew the amount
of P45,481,706.76, both in cash from LBP. The DAR PARO
then directed the Register of Deeds of Davao to cancel the
TCTs of AFC and HPI to the said properties and to issue a
new one in the name of the Republic of the Philippines.
After the issuance of the certificate of title in the name
of the Republic of the Philippines, the Register of Deeds of
Davao, upon the request of the DAR, issued TCTs and
Certificates of Land Ownership Award to qualified
farmerbeneficiaries.
On 14 February 1997, AFC and HPI filed separate
complaints for determination of just compensation with the
DAR Adjudication Board (DARAB). Despite the lapse of
more than three years from the filing of the complaints, the
DARAB failed and refused to render a decision on 15
the
valuation of the land. Hence, two complaints for
determination and payment of just compensation were filed
by AFC and HPI before Branch 2 of the Regional Trial
Court (RTC) of Tagum City (acting as a Special Agrarian
Court), which were subsequently 16
consolidated.
Agrarian Case No. 54-2000 filed by AFC covers two
parcels of land in San Isidro, Tagum, Davao, with an
aggregate
_______________

14 Id., at p. 464.
15 Agrarian Case No. 54-2000 entitled, Apo Fruits Corporation v.
Secretary of Agrarian Reform and Land Bank of the Philippines, and
Agrarian Case No. 55-2000 entitled, Hijo Plantation, Inc. v. Secretary of
Agrarian Reform and Land Bank of the Philippines.
16 Records of Agrarian Case No. 54-2000, Book I, pp. 1-5.
543
VOL. 514, FEBRUARY 6, 2007 543

area of 640.3483 hectares previously assessed by LBP with

a valuation of P86,900,925.88. 17
On the other hand, Agrarian Case No. 55-2000 filed by
HPI relates to the other three parcels of land in Tagum
City, with a total area of 814.5308 hectares, likewise,
previously assessed by LBP with a valuation of
P164,478,178.14.
Summons was served on 23 May 2000 to defendants
DAR and LBP. 18
The trial court appointed as
Commissioners persons it considered competent, qualified
and disinterested to determine the proper valuation of the
properties. 19
LBP submitted its Answer on 26 July 2000, while the
DAR Secretary,20represented by PARO Pedro P. Gumabao,
filed its Answer on 18 August 2000.
The pre-trial order issued by the trial court reads:
“This Court will determine the all-embracing concept of Just

Compensation, and whether the plaintiff is entitled to damages,
and also whether the value of the land and improvements as
determined by the Land Valuation of Land Bank for the
determination of just compensation, and whether the plaintiff
21
has
violated Section 13 of DARAB new rules and procedure.”
_______________
17 Records of Agrarian Case No. 55-2000, Book I, pp. 1-5.

18 Id., at p. 71. Appointed were: Atty. Cesar V. Arañas, Retired
Provincial Assessor of Davao Province; Retired City Assessor of Davao
City; and Retired Director – Finance, Region XI, Davao City, to act as the
Chairman of the Panel of Commissioners;
Mr. Alfredo H. Silawan, incumbent City Assessor of Tagum City, Davao
del Norte, to act as Member.
Mr. Wilfredo G. dela Cerna, incumbent City Treasurer of Tagum City,
Davao del Norte, to act as Member.
19 Id., at p. 93.
20 Id., at p. 95.
21 Id., at p. 188.
544

The commissioners, together with all the representatives of

the parties, 22conducted an ocular inspection 23first on 25
August 2000 and again on 16 December 2000.
On 21 May 2001, the court-appointed
24
commissioners
submitted their appraisal report.
On 14 September25 2001, the case was considered
submitted for decision.
_______________
22 Id., at p. 129.
23 Id., at p. 181.
24 Id., at p. 328. This Commission therefore recommends:
a) The amount of ONE BILLION ONE HUNDRED THIRTY-ONE MILLION

SIX HUNDRED THOUSAND PESOS (P1,131,600,000.00) under the
current value of the Philippine Peso, computed as the JUST
COMPENSATION for the properties covered by these cases, to be paid
jointly and severally by the Department of Agrarian Reform and/or the
Land Bank of the Philippines and deposited in an authorized bank;
b) Interest on the abovementioned amount equivalent to the market interest
rates aligned with 91-day treasury bills, from the date of taking in 1996,
until fully paid, to be paid jointly and severally by the Department of
Agrarian Reform and/or the Land Bank of the Philippines and deposited in
an authorized bank;
c) Defendants DAR/LBP jointly and severally pay all the fees payable to the
Commissioners herein named, taxed, as part of all the costs per Section 12,
Rule 67 of the 1997 Rules of Civil Procedure, as amended.
WHEREFORE, the Commission respectfully submits this Appraisal Report to this

Honorable Special Agrarian Court, with a firm belief that the amount arrived at is
JUST.
The Panel of Commissioners pray for such other reliefs as may be just and
equitable under the premises.
At Davao City and Tagum City, for the City of Tagum, this 17th day of May
2001.
(Sgd.) CESAR V. ARAÑAS (Sgd.) ALFREDO M. SILAWAN

Chairman Member
545
VOL. 514, FEBRUARY 6, 2007 545

26
After hearing, the trial court rendered a decision dated 25
September 2001, the fallo thereof reads:
“WHEREFORE, consistent with all the foregoing premises,

judgment is hereby rendered by this Special Agrarian Court
where it has determined judiciously and now hereby fixed the just
compensation for the 1,388.6027 hectares of lands and its
improvements owned by the plaintiffs: APO FRUITS
CORPORATION and HIJO PLANTATION, INC., as follows:
First—Hereby ordering after having determined and fixed the fair,

reasonable and just compensation of the 1,338.6027 hectares of land and
standing crops owned by plaintiffs – APO FRUITS CORPORATION and
HIJO PLANTATION, INC., based at only P103.33 per sq. meter, ONE
BILLION THREE HUNDRED EIGHTY-THREE MILLION ONE
HUNDRED SEVENTY-NINE THOUSAND PESOS
(P1,383,179,000.00), Philippine Currency, under the current value of
the Philippine Peso, to be paid jointly and severally to the herein
PLAINTIFFS by the Defendants-Department of Agrarian Reform and its
financial intermediary and codefendant Land Bank of the Philippines,
thru its Land Valuation Office;
Second—Hereby ordering Defendants – DEPARTMENT OF
AGRARIAN REFORM and/or LAND BANK OF THE PHILIPPINES,
thru its Land Valuation Office, to pay plaintiffs-APO FRUITS
CORPORATION and HIJO PLANTATION, INC., interests on the above-
fixed amount of fair, reasonable and just compensation equivalent to the
market interest rates aligned with 91-day Treasury Bills, from the date
of the taking in December 9, 1996, until fully paid, deducting the amount
of the previous payment which plaintiffs received as/and from the initial
valuation;
Third—Hereby ordering Defendants – DEPARTMENT OF
thru its Land Valuation Office, to pay jointly and severally the
Commissioners’ fees herein taxed as part of
_______________
26 Id., at pp. 747-795. Penned by Acting Presiding Judge Erasto D.

Salcedo.
546

the costs pursuant to Section 12, Rule 67 of the 1997 Rules of Civil
Procedure, equivalent to, and computed at Two and OneHalf (2 ½)
percent of the determined and fixed amount as the fair, reasonable and
just compensation of plaintiffs’ land and standing crops plus interest
equivalent to the interest of the 91-Day Treasury Bills from date of
taking until full payment;
Fourth—Hereby ordering Defendants – DEPARTMENT OF

thru its Land Valuation Office, to pay jointly and severally the attorney’s
fees to plaintiffs equivalent to, and computed at ten (10%) Percent of the
determined and fixed amount as the fair, reasonable and just
compensation of plaintiffs’ land and standing crops, plus interest
equivalent to the 91-Day Treasury Bills from date of taking until the full
amount is fully paid;
Fifth—Hereby ordering Defendants – DEPARTMENT OF
thru its Land Valuation Office to deduct from the total amount fixed as
fair, reasonable and just compensation of plaintiffs’ properties the initial
payment paid to the plaintiffs;
Sixth—Hereby ordering Defendants – DEPARTMENT OF
thru its Land Valuation Office, to pay the costs of the suit; and
Seventh—Hereby ordering Defendants – DEPARTMENT OF
thru its Land Valuation Office, to pay all the aforementioned amounts
thru The Clerk of Court of this Court, in order that said Court Officer
could collect for payment any docket fee deficiency, should there be any,
27
from the plaintiffs.”
_______________
27 CA Rollo, pp. 131-133.
547
VOL. 514, FEBRUARY 6, 2007 547

28
LBP filed a Motion for Reconsideration on 5 October 2001
mainly on the ground that the trial court based its
valuation on the value of residential and industrial lands in
the area forgetting that the lands involved are agricultural.
LBP also sought a reconsideration of the award of
attorney’s fees, the interest on the compensation over the
lands and the order of the trial court regarding the
payment of commissioners’
29
fees. In an Order dated 5
December 2001, the trial court modified its decision as
follows:
“WHEREFORE, premises considered, IT IS HEREBY ORDERED

that the following modifications as they are hereby made on the
dispositive portion of this Court’s consolidated decision be made
and entered in the following manner, to wit:
On the Second Paragraph of the Dispositive Portion which now

reads as follows, as modified:
Second—Hereby ordering Defendants – DEPARTMENT OF

AGRARIAN REFORM and/or LAND BANK OF THE
PHILIPPINES, thru its Land Valuation Office, to pay plaintiffs-
APO FRUITS CORPORATION and HIJO PLANTATION, INC.,
interest at the rate of Twelve (12%) Percent per annum on the
above-fixed amount of fair, reasonable and just compensation
computed from the time the complaint was filed until the finality
of this decision. After this decision becomes final and executory,
the rate of TWELVE (12%) PERCENT per annum shall be
additionally imposed on the total obligation until payment
thereof is satisfied, deducting the amounts of the previous
payments by Defendant-LBP received as initial valuation;
On the Third Paragraph of the Dispositive Portion which Now

Reads As Follows, As Modified:
_______________
28 Records of Agrarian Case No. 55-2000, Book I, p. 792; DAR also filed
its Motion for Reconsideration on the same date, i.e., 5 October 2001.
(Records of Agrarian Case No. 55-2000, Book I, p. 799.)
29 CA Rollo, pp. 141-160.
548

Third—Hereby ordering Defendants – DEPARTMENT OF

PHILIPPINES, thru its Land Valuation Office, to pay jointly and
severally the Commissioners’ fees herein taxed as part of the
costs pursuant to Section 12, Rule 67 of the 1997 Rules of Civil
Procedure, equivalent to, and computed at Two and One-Half (2
1/2) percent of the determined and fixed amount as the fair,
reasonable and just compensation of plaintiffs’ land and standing
crops and improvements;
On the Fourth Paragraph of the Dispositive Portion which Now

Reads As follows, As Modified:
Fourth—Hereby ordering Defendants – DEPARTMENT OF

PHILIPPINES, thru its Land Valuation Office, to pay jointly and
severally the attorney’s fees to plaintiffs equivalent to, and
computed at ten (10%) Percent of the determined and fixed
amount as the fair, reasonable and just compensation of

plaintiffs’ land and standing crops and improvements.
Except for the above-stated modifications, the consolidated

decision stands and shall
30
remain in full force and effect in all
other respects thereof.”
From this Order, 31

LBP filed a Notice of Appeal dated 27
December 2001. The same was given 32
due course in the
Order of the RTC dated 15 May 2002. In the same Order,
the RTC set aside its Order dated 5 December 2001
granting execution pending appeal.
Subsequently, the trial court, citing this Court’s ruling
33
in the case of “Land Bank of the Philippines v. De Leon,”
that a petition for review, not an ordinary appeal, is the
proper mode
_______________
30 Id., at pp. 158-160.

31 Id., at p. 161.
32 Id., at p. 166.
33 437 Phil. 347; 388 SCRA 537 (2002).
549
VOL. 514, FEBRUARY 6, 2007 549

of appeal from a decision on the determination of just

compensation rendered by a special
34
agrarian court, issued
an Order dated 4 November 2002 recalling its Order dated
15 May 2002 and directed LBP to file a Petition for Review
within the reglementary
35
period. LBP filed a Motion for
Reconsideration claiming that the case of Land Bank of
the Philippines v. De Leon was not yet final at that time;
hence, it is not certain whether the decision in that case
would have a retroactive effect and that appeal is the
appropriate remedy. This was denied
36
by the trial court in
its Order dated 12 February 2003. 37
On 28 March 2003, LBP filed a Petition for Certiorari
before the Court of Appeals assailing the 4 November 2002
and 12 February 2003 orders of the trial court.
The Court of Appeals38 found the petition of LBP
meritorious. In a decision dated 12 February 2004, the
Court of Appeals held:
“WHEREFORE, the petition is GRANTED and the assailed

orders dated November 4, 2002 and February 12, 2003 are
39
39
NULLIFIED and, accordingly, SET ASIDE.”
40
AFC and HPI filed a joint Motion for Reconsideration
which the Court
41
of Appeals denied in its Resolution dated
21 June 2004.
_______________
34 CA Rollo, pp. 47-48.

35 Id., at p. 168.
36 Id., at pp. 49-54.
37 Id., at pp. 2-46. Docketed as CA-G.R. SP No. 76222.
38 Id., at pp. 579-588. Penned by Associate Justice Rebecca De Guia-
Salvador with Associate Justices Romeo A. Brawner and Jose C. Reyes,
Jr., concurring.
39 Id., at p. 588.
40 Id., at p. 599.
41 Id., at p. 686.
550

Earlier, on 23 January 2003, DAR filed its own separate

petition 42before the Court 43of Appeals by way of a Petition for
Review. In a Resolution dated 2 April 2003, the Court of
Appeals dismissed the petition of the DAR for failure 44
to
state the material dates under Rule 42, Section 2, of the
Rules of Court. The appellate court held:
“The importance of stating the material dates cannot be

overemphasized. It is only through a statement thereof in the
petition can it be determined whether or not the petition was filed
on time. For its failure to state the material dates, the petition
can and should be outrightly dismissed.
xxx
The petition is also defective in that it failed to attach material
portions of the record as would support the allegations in the
petition. More specifically, copies of the alleged motion for
reconsideration filed by the DAR, the order denying it, and the
notice of appeal were not attached to the petition.
For all the foregoing, the court has no alternative but to
dismiss the petition. 45
WHEREFORE, the petition is DISMISSED.”
The Decision of the Court of Appeals in the Petition filed by

the DAR in CA-G.R. SP No. 74879 became final and
executory and entry of judgment

46
was issued by the
appellate court on 7 May 2003.
_______________
42 Id., at pp. 289-306. Docketed as CA-G.R. SP No. 74879.

43 Id., at pp. 631-636. Penned by Associate Justice Oswaldo D. Agcaoili
with Associate Justices Perlita J. Tria-Tirona and Edgardo F. Sundiam,
concurring.
44 SEC. 2. Form and contents.—The petition shall be filed in seven (7)
legible copies x x x; (b) indicate the specific material dates showing
that it was filed on time; x x x.
45 CA Rollo, pp. 633-636.
46 Id., at p. 638.
551
VOL. 514, FEBRUARY 6, 2007 551

On the other hand, from the decision of the Court of

Appeals in the Petition filed by LBP in CA-G.R. SP No.
76222, AFC and HPI filed the present Petition for Review
on Certiorari raising the following issues:
I.
WHETHER OR NOT THE QUESTIONED DECISION AND

RESOLUTION ARE IN ACCORD WITH LAW OR WITH THE
APPLICABLE DECISIONS OF THE SUPREME COURT?
II.
WHETHER OR NOT RESPONDENT LBP IS BOUND BY

THE DECISION OF COURT OF APPEALS IN CA-G.R. SP NO.
74879 AND IS THEREFORE PRECLUDED FROM FILING CA-
G.R. SP NO. 76222?
III.
WHETHER OR NOT THE FILING BY RESPONDENT LBP

OF CAG.R. SP NO. 76222 IS ALREADY BARRED BY RES
JUDICATA?
IV.
WHETHER OR NOT THE RULING OF THE SUPREME

COURT IN THE ARLENE DE LEON CASE, GIVING ONLY
PROSPECTIVE EFFECT TO ITS EARLIER RESOLUTION AS
TO THE PROPER MODE OF APPEAL FROM DECISIONS OF
SPECIAL AGRARIAN COURTS IS APPLICABLE IN THE

INSTANT CASE?
V.
WHETHER OR NOT RESPONDENT LBP WAS DEPRIVED

OF DUE PROCESS AND/OR OF ITS RIGHT TO APPEAL?
VI.
WHETHER OR NOT THE SUBJECT PETITION (CA-G.R. SP

NO. 76222) WAS MERELY INTERPOSED TO DELAY THE
EXECUTION OF SPECIAL AGRARIAN COURT’S “DECISION”
WHICH IS47 BASED ON EVIDENCE DULY PRESENTED AND
PROVED?
_______________
47 Rollo, p. 262.
552

AFC and HPI pray that the Decision and Resolution of the
Court of Appeals in CA-G.R. SP No. 76222 be reversed and
set aside and that the Decision of the RTC dated 25
September 2001 in Agrarian Cases No. 54-2000
48
and No. 55-
2000 be declared as final and executory.
In the case of Land Bank of the Philippines v. De Leon,
decided on 10 September 2002, respondents are the
registered owners of a parcel of land. They voluntarily
offered the subject property for sale to the government
pursuant to Republic Act No. 6657. Unable to agree on the
valuation of the property offered by the DAR, respondents
filed a petition with the RTC (acting as a Special Agrarian
Court) to fix the just compensation of the property. In due
time, the RTC rendered judgment fixing the compensation
of the property. Before the Court of Appeals, the DAR and
LBP filed separate petitions. The DAR filed a Petition for
Review of the decision of the RTC which was assigned to
the Special 3rd Division of the appellate court. LBP, on the
other hand, raised the case on appeal to the Court of
Appeals by way of ordinary appeal. The same was assigned
to the 4th Division of the Court of Appeals. The petition of
the DAR was given due course. On the other hand, the
Court of Appeals dismissed LBP’s ordinary appeal on the
ground that the same was erroneous. LBP filed a petition

for review before this Court. In Land Bank, we explained:
“A petition for review, not an ordinary appeal, is the proper

procedure in effecting an appeal from decisions of the Regional
Trial Courts acting as Special Agrarian Courts in cases involving
the determination of just compensation to the landowners
concerned. Section 60 of RA 6657 clearly and categorically states
that the said mode of appeal should be adopted. There is no room
for a contrary interpretation. Where the law is clear and
categorical, 49there is no room for construction, but only
application.”
_______________
48 Id., at pp. 287-288.

49 Land Bank of the Philippines v. De Leon, supra note 33 at p. 356; p.
543.
553
VOL. 514, FEBRUARY 6, 2007 553

LBP filed a Motion for Reconsideration. In a Resolution of

this Court dated 20 March 2003, this Court emphasized the
prospective application of the Decision dated 10 September
2002.
“WHEREFORE, the motion for reconsideration dated October 16,

2002 and the supplement to the motion for reconsideration dated
November 11, 2002 are PARTIALLY GRANTED. While we clarify
that the Decision of this Court dated September 10, 2002 stands,
our ruling therein that a petition for review is the correct mode of
appeal from decisions of Special Agrarian Courts shall apply
only to cases 50
appealed after the finality of this
Resolution.” (Emphasis supplied.)
Essentially therefore, the rule is that a decision of the RTC

acting as a Special Agrarian Court should be brought to the
Court of Appeals via a Petition for Review. The Court of
Appeals will no longer entertain ordinary appeals thereon.
However, this rule applies only after the finality of the
Resolution of this Court in Land Bank of the Philippines v.
De Leon dated 20 March 2003.
In this case, the Court of Appeals correctly ruled when it
gave due course to the appeal of LBP. LBP’s Notice of
Appeal was filed on 27 December 2001. This was given due
course by the RTC in an Order dated 15 May 2002. LBP’s
appeal was, thus, perfected before this Court’s Resolution

in the aforementioned Land Bank of the Philippines v. De
Leon case. Hence, the Court of Appeals could give due
course to LBP’s petition.
Next we proceed to determine the issue of whether or
not the petition of LBP before the Court of Appeals is
barred by the disposition of the Petition for Review filed by
the DAR in CA-G.R. SP No. 74879 on the ground of res
judicata.
The following are the elements of res judicata:
_______________
50 Land Bank of the Philippines v. De Leon, 447 Phil. 495, 505; 399
SCRA 376, 385 (2003).
554

“(a) The former judgment must be final;

(b) The court which rendered judgment must have
jurisdiction over the parties and the subject matter;
(c) It must be a judgment on the merits; and
(d) There must be between the first and second actions
identity51 of parties, subject matter, and cause of
action.”
In this case, the third element of res judicata, i.e., that the
former judgment must be on the merits, is not present. It
must be remembered that the dismissal of CA-G.R. SP No.
74879 was based on technicality, that is, for failure on the
part of the DAR to state material dates required by the
rules. Having been dismissed based on a technicality and
not on the merits, the principle of res judicata does not
apply. Res judicata applies only where 52
judgment on the
merits is finally rendered on the first.
Having disposed of the procedural issues involved
herein, we shall now proceed to resolve the substantive
questions in this case.
This Court is aware that in the instant case, since LBP’s
appeal before the Court of Appeals is to be given due
course, the normal procedure is for us to remand the case
to the appellate court for further proceedings. However,
when there is enough basis on which a proper evaluation of
the merits of petitioner’s case may be had, the Court may
dispense with the time-consuming procedure in order to 53

prevent further delays in the disposition of the case.
Indeed, remand of the case to the lower court for further
reception of evidence is not conducive to the speedy
administration of justice and it becomes
_______________
51 TF Ventures, Inc. v. Matsuura, G.R. No. 154177, 9 June 2004, 431

SCRA 526, 532-533.
52 David v. Navarro, G.R. No. 145284, 11 February 2004, 422 SCRA
499, 511.
53 Somoso v. Court of Appeals, G.R. No. 78050, 23 October 1989, 178
SCRA 654, 663; Bach v. Ongkiko Kalaw, Manhit & Acorda Law Offices,
G.R. No. 160334, 11 September 2006, 501 SCRA 419.
555
VOL. 514, FEBRUARY 6, 2007 555

unnecessary where the Court is in a position to resolve the

dispute based on the records before it. On many occasions,
the Court, in the public interest and expeditious
administration of justice, has resolved action on the merits,
instead of remanding them for further proceedings, as
where the ends of 54justice would not be subserved by the
remand of the case or where the trial 55court had already
received all the evidence of the parties. Briefly stated, a
remand of the instant case to the Court of Appeals would
serve no purpose save to further delay its disposition
contrary to the spirit of fair play.
It is already an accepted rule of procedure for us to
strive to 56settle the entire controversy in a single
proceeding, leaving no root or branch to bear the seeds of
future litigation. If, based on the records, the pleadings,
and other evidence, the dispute can be resolved by us, we
will do so to serve the ends of justice instead of remanding
57
the case to the lower court for further proceedings.
The complete records of this case have already been
elevated to this Court. The pleadings on record will fully
support this adjudication. We have painstakingly gone over
all of LBP’s representations and arguments, and we found
that the material and decisive facts are hardly disputable.
From another perspective, due consideration should also be
given to
_______________
54 Real v. Belo, G.R. No. 146224, 26 January 2007, 513 SCRA 111;
Golangco v. Court of Appeals, 347 Phil. 771, 778; 283 SCRA 493, 501
(1997); Heirs of Crisanta Y. Gabriel-Almoradie v. Court Appeals, G.R. No.
91385, 4 January 1994, 229 SCRA 15, 29; Republic v. Central Surety &
Insurance Co., 134 Phil. 631; 25 SCRA 641 (1968).
55 Samal v. Court of Appeals, 99 Phil. 230, 233 (1956).
56 Bunao v. Social Security System, G.R. No. 159606, 13 December
2005, 477 SCRA 564, 571.
57 Vallejo v. Court of Appeals, G.R. No. 156413, 14 April 2004, 427
SCRA 658, 668; San Luis v. Court of Appeals, 417 Phil. 598, 605; 365
SCRA 279, 286 (2001); Chua v. Court of Appeals, 338 Phil. 262, 273; 271
SCRA 546, 555 (1997); Golangco v. Court of Appeals, 347 Phil. 771, 778;
283 SCRA 493, 501 (1997).
556

AFC and HPI for having voluntarily offered to sell their

properties, a clear indication of AFC and HPI’s willingness
to participate in the agrarian reform program of the
government. In turn, they must be given compensation that
is just and timely. Records indicate that the case has been
dragging on for more than ten years now without the
landowners having been fully compensated. We cannot
countenance such a glaring indifference to AFC and HPI’s
rights as land owners—they should be afforded all that is
just and due them. To be sure, they deserve nothing less
than full compensation to give effect to their substantive
rights.
While eminent domain lies as one of the inherent powers
of the state, there is no requirement that it undertake a
prolonged procedure, or that the payment 58
of the private
owner be protracted as far as practicable.
It is not controverted that this case started way back on
12 October 1995, when AFC and HPI voluntarily offered to
sell the properties to the DAR. In view of the failure of the
parties to agree on the valuation of the properties, the
Complaint for Determination of Just Compensation was
filed before the DARAB on 14 February 1997. Despite the
lapse of more than three years from the filing of the
complaint, the DARAB failed to render a decision on the
valuation of the land. Meantime, the titles over the
properties of AFC and HPI had already been cancelled and
in their place a new certificate of title was issued in the
name of the Republic of the Philippines, even as far back as

9 December 1996. A period of almost 10 years has lapsed.
For this reason, there is no dispute that this case has truly
languished for a long period of time, the delay being mainly59
attributable to both official inaction and indecision,
particularly on the determination of the amount of just
com-
_______________
58 Republic v. Gingoyon, G.R. No. 166429, 19 December 2005, 478

SCRA 474, 532.
59 Rocamora v. Regional Trial Court-Cebu (Branch VIII), G.R. No. L-
65037, 23 November 1988, 167 SCRA 615, 624.
557
VOL. 514, FEBRUARY 6, 2007 557

pensation, to the detriment of AFC and HPI, which to date,

have yet to be fully compensated for the properties which
are already in the hands of farmer-beneficiaries, who, due
to the lapse of time, may have already converted or sold the
land awarded to them.
Verily, these two cases could have been disposed with
dispatch were it not for LBP’s counsel causing unnecessary
delay. At the inception of this case, DARAB, an agency of
the DAR which was commissioned by law to determine just
compensation, sat on the cases for three years, which was
the reason that AFC and HPI filed the cases before the
RTC. We underscore the pronouncement of the RTC that
“the delay by DARAB in the determination of just
compensation could only mean the reluctance of the
Department of Agrarian Reform and the Land Bank of the
Philippines to pay the 60
claim of just compensation by
corporate landowners.”
To allow the taking of landowners’ properties, and to
leave them empty-handed while government 61
withholds
compensation is undoubtedly oppressive.
It is in light of the foregoing that this Court will now
undertake the final resolution of the present controversy
which, as already elucidated, is within the power of this
Court to do.
The concept of just compensation embraces not
only the correct determination of the amount to be
paid to the owners of the land, but also the payment
of the land within a reasonable time from its taking.
Without prompt payment, compensation cannot be

considered “just” inasmuch as the property owner is
being 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 nec-
_______________
60 RTC Decision, p. 40; CA Rollo, p. 124.

61 Land Bank of the Philippines v. Court of Appeals, 327 Phil. 1047,
1055; 258 SCRA 404, 409-410 (1996).
558

62
essary to cope with his loss. Just compensation is
defined as the full and fair equivalent
63
of the property taken
from its owner by the expropriator. It has been repeatedly
stressed by this Court that 64the 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
65
to be taken shall be real, substantial, full, and ample.
The two main issues, thus, for determination of this
Court are the date of the taking
66
of the property and the
amount of just compensation.
First, it is settled that the property was taken on 9
December 1996, when a Certificate of Title was issued in
favor of the Republic of the Philippines, and the
Certificates of Title of AFC and HPI were cancelled. The
farmer-beneficiaries themselves took 67
possession of the
subject properties on 2 January 1997.
Second, on payment of just compensation, we have
previously held:
“Eminent domain is an inherent power of the State that

enables it to forcibly acquire private lands intended for
pub
_______________
62 Estate of Salud Jimenez v. Philippine Export Processing Zone, G.R.

No. 137285, 16 January 2001, 349 SCRA 240, 264; Land Bank of the
Philippines v. Court of Appeals, id., at p. 1054; p. 409, quoting
Municipality of Makati v. Court of Appeals, G.R. Nos. 8989899, 1 October

1990, 190 SCRA 207, 213.
63 Manila Railroad Co. v. Velasquez, 32 Phil. 286, 313 (1915).
64 Province of Tayabas v. Perez, 66 Phil. 467, 469 (1938); J.M. Tuason &
Co., Inc. v. Land Tenure Administration, G.R. No. L21064, 18 February
1970, 31 SCRA 413, 432; Manotok v. National Housing Authority, G.R.
Nos. L-55166-67, 21 May 1987, 150 SCRA 89.
65 City of Manila v. Estrada, 25 Phil. 208, 234 (1913).
66 Records of Agrarian Case No. 55-2000, Book I, pp. 332, 344.
67 Id., at p. 345.
559
VOL. 514, FEBRUARY 6, 2007 559

lic use upon payment of just compensation to the owner.

Obviously, there is no need to expropriate where the owner is
willing to sell under terms also acceptable to the purchaser, in
which case an ordinary deed of sale may be agreed upon by the
parties. It is only where the owner is unwilling to sell, or cannot
accept the price or other conditions offered by the vendee, that the
power of eminent domain will come into play to assert the
paramount authority of the State over the interests of the
property owner. Private rights must then yield to the irresistible
demands of the public interest on the time-honored justification,
as in the case of the police power, that the welfare of the people is
the supreme law.
But for all its primacy and urgency, the power of expropriation
is by no means absolute (as indeed no power is absolute). The
limitation is found in the constitutional injunction that “private
property shall not be taken for public use without just
compensation” and in the abundant jurisprudence that has
evolved from the interpretation of this principle. Basically, the
requirements for a proper exercise of 68
the power are: (1)
public use and (2) just compensation.” (Emphases supplied.)
Section 57 of Republic Act No. 6657 (Comprehensive

Agrarian Reform Law) provides:
“SEC. 57. Special Jurisdiction.—The Special Agrarian Courts

shall have original and exclusive jurisdiction over all petitions for
the determination of just compensation to landowners, and the
prosecution of all criminal offenses under this Act. The Rules of
Court shall apply to all proceedings before the Special Agrarian
Courts, unless modified by this Act.
The Special Agrarian Courts shall decide all appropriate cases
under their special jurisdiction within thirty (30) days from
submission of the case for decision.”
To implement the provisions of Republic Act No. 6657, Rule

XIII, Section 11 of the DARAB Rules of Procedure,
provides:
_______________
68 Association of Small Landowners in the Philippines, Inc. v. Secretary

of Agrarian Reform, G.R. No. 78742, 14 July 1989, 175 SCRA 343, 376.
560

“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.” (Emphasis supplied.)
The next question now crops up, who shall determine just
compensation? It is now settled that the valuation of
property in eminent domain is essentially a judicial
function which is vested with the RTC acting as Special
Agrarian Court. The 69 same cannot be lodged with
administrative agencies and may not be70 usurped by any
other branch or official of the government.
We now come to the issue of just compensation.
LBP argues that the trial court’s valuation of the subject
landholdings has incorporated irrelevant and/or immaterial
factors such as the schedule of market values given by the
City Assessor of Tagum, the comparative
71
sales of adjacent
lands and the commissioners’ report.
_______________
69 Land Bank of the Philippines v. Wycoco, 464 Phil. 83, 84; 419 SCRA
67, 75 (2004); Export Processing Zone Authority v. Dulay, G.R. No. L-
59603, 29 April 1987, 149 SCRA 305, 312; Belen v. Court of Appeals, G.R.
No. L-45390, 15 April 1988, 160 SCRA 291, 295, citing National Power
Corporation v. Jocson, G.R. Nos. 94193-99, 25 February 1992, 206 SCRA
520, 540; Land Bank of the Philippines v. Natividad, G.R. No. 127198, 16
May 2005, 458 SCRA 441, 451; Republic v. Court of Appeals, 331 Phil
1072; 263 SCRA 750 (1996), cited in Philippine Veterans Bank v. Court of
Appeals, 379 Phil. 141, 147; 322 SCRA 139, 146 (2000).
70 Association of Small Landowners in the Philippines, Inc. v. Secretary
of Agrarian Reform, supra note 68 at p. 380.
71 Rollo, p. 351.
561
VOL. 514, FEBRUARY 6, 2007 561

Section 17 of Republic Act No. 6657, which is particularly

relevant, providing as it does the guideposts for the
determination of just compensation, reads, as follows:
“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 farm-workers 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 72
be
considered as additional factors to determine its valuation.”
_______________
72 Otherwise stated, the determination of just compensation involves

the examination of the following factors specified in Section 17 of Republic
Act No. 6657 as amended.
1. the cost of the acquisition of the land;

2. the current value of like properties;
3. its nature, actual use and income;
4. the sworn valuation by the owner; the tax declarations;
5. the assessment made by government assessors;
6. the social and economic benefits contributed by the farmers and
the farmworkers and by the government to the property; and
7. the non-payment of taxes or loans secured from any government
financing institution on the said land, if any.
These factors as provided under Section 17 of Republic Act No. 6657

have been translated in a basic formula in DAR Administrative Order No.
6, Series of 1992, as amended by DAR Administrative Order No. 11, Series
of 1994, issued pursuant to the DAR’s rulemaking power to carry out the
object and purposes of Republic Act No. 6657, as amended.
The formula stated in DAR Administrative Order No. 6, as amended, is

as follows:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
562

The RTC provided the following elucidation in its assailed

decision:
“The recommendation of the Commissioners’ Report for a value of

P85.00 per sq.m. or P850,000.00 per hectare (sic) is founded on
evidence. The schedule of market values of the City of Tagum as
per its 1993 and 1994 Revision of Assessment and Property
Classification (Exhibits “J-6” and “CC-6”) give the lowest value for
residential land at P100/sq.m. for 4th class residential land in
1993. In 1994, it gave the lowest value of P80.00/sq.m. for
barangay residential lot. It appears that certain portions of the
land in question have been classified as Medium Industrial
District (Exhibits “J-4” and “CC-4”). The lowest value as for
industrial land, 3rd class in a barangay is P130.00 sq.m. The
average of these figures, using the lowest values in Exhibits “6”
and “CC-6” yields the figure of P103.33 which is even higher by
22.2% than that recommended by the Commissioners. It is even of
judicial notice that assessments made by local governments are
much lower than real market value. Likewise, the value of the
improvements thereon, not even considered in the average of
P103.33. If considered, this will necessarily result in a higher
average value.
In said Appraisal Report, mention has been made on
“improvements,” and our Supreme Court in Republic vs. Gonzales,
50 O.G. 2461, decreed the rule, as follows:
_______________
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:
LV = (CNI x 0.9) + (MV x 0.1)
A.2 When the CNI factor is not present, and CS and MV are applicable,
the formula shall be:
LV = (CS x 0.9) + (MV x 0.1)

A.2 When both the CS and CNI are not present and only MV is
applicable, the formula shall be:
LV = MV x 2 ((Land Bank of the Philippines v. Banal, G.R. No. 143276,
20 July 2004, 434 SCRA 543, 549-550.)
563
VOL. 514, FEBRUARY 6, 2007 563

If such improvements are permanent in character, consisting of good

paved road, playgrounds, water system, sewerage and general leveling of
the land suitable for residential lots together with electric installations
and buildings, the same are important factors to consider in determining
the value of the land. The original cost of such improvements may be
considered, with due regard to the corresponding depreciation. (Davao vs.
Dacudao, L-3741, May 8, 1952).
Note should be taken that in said Appraisal Report, permanent

improvements on plaintiffs’ lands have been introduced and found
existing, e.g., all weather-road network, airstrip, pier, irrigation
system, packing houses, among others, wherein substantial
amount of capital funding have been invested in putting them up.
This Court, however, notes that the comparative sales
(Exhibits “A” to “F”) referred to in the Appraisal Report are sales
made after the taking of the land in 1996. However, in the offer of
evidence, the plaintiff offered additional comparative sales of
adjacent land from late 1995 to early 1997, ranging from a high of
P580.00/sq. meter in September 1996 (Exhibits “L-4” for plaintiff
Apo and “EE-4” for plaintiff Hijo) to a low of P146.02/sq. meter in
October 1997 (Exhibits “L-2” and “EE-2”). The other sales in 1996
were in January 1996 for P530.00/sq.meter (Exhs. “L-3” and “EE-
3”) and in December 1996 for P148.64/sq. meter (Exhs. “L-2” and
“EE-1”). On the other hand, the sale in December 1995 (Exhs. “L-
5” and “EE-5”) was made for P530.00/sq.meter.” The average
selling price based on the foregoing transaction is P386.93/sq.
meter. The same is even higher by around 350% than the
recommended value of P85.00, as per the Commissioners’ Report.
The Cuervo Appraisal Report, on the other hand, gave a value
of P84.53/sq. meter based on the Capitalized Income Approach.
The said approach considered only the use of the land and the
income generated from such use.
The just compensation for the parcels of land under
consideration, taking into account the Schedule of Market Values
given by the City Assessor of Tagum (Exhs. “J-6” for Apo “CC-6”
for Hijo), the comparative sales covering adjacent lands at the
time of taking of subject land, the Cuervo Report, and the

Appraisal Report is hereby fixed at P103.33/sq.meter.
The valuation given by Cuervo and the Appraisal Report of
P84.53 and P85.00, respectively, in this Court’s judgment, is the
564

minimum value of the subject landholdings and definitely cannot

in anyway be the price at which plaintiffs APO and/or HIJO
might be willing to sell, considering that the parcels of land
adjacent thereto were sold at much higher prices, specifically from
a low of P146.02/sq. meter to a high of P580.00. The average of
the lowest value under the 1993 and 1994 Revision of Assessment
and Property Classification (Exhibits “J-6” and “CC-6”) were
already at P103.33/sq. meter, even without considering the
improvements introduced on the subject landholdings.
Moreover, the Commission made the findings that “portions of
the land subject of th(e) report may x x x increase to P330.00/sq.
meter, specifically th(e) strips of land surrounding the provincial
roads” and made the conclusion that “(c)learly, the value
recommended by th(e) Commission, which is only about
P85.00/sq.meter is way below the x x x assessed values, which
effectively was fixed (as early as) 1994 or earlier than the
Voluntary Offer to Sell of the above plaintiffs’ properties.” In the
absence of any evidence to the contrary, the said assessed values
are presumed to be prevailing [in] December 1996, the time of
taking of plaintiffs’ landholdings. The Commission further stated
that the average of the said “assessed values as submitted by the
City Assessor of Tagum City (is) P265.00/sq. meter.” This Court,
therefore, finds it unfair that the just compensation for the
subject landholdings should only be fixed at P85.00/sq.meter.
It is similarly true, however, that the determination of just
compensation cannot be made to the prejudice of defendants or
the government for that matter.
Thus, the selling price of P580.00/sq. meter nor the average
selling price of P386.93/sq. meter or the average assessed value of
P265.00/sq. meter cannot be said to be the value at which
defendants might be willing to buy the subject landholdings.
This Court, therefore, finds the price of P103.33/sq. meter for
the subject landholdings fair and reasonable for all the parties.
Said value is even lower than the lowest selling price of P148.64
for sale of adjacent land at the time of the taking of the subject
landholdings [in] December 1996. It approximates, however, the
average of the lowest values under the 1993 and 1994 Revision of
Assessment and Property Clarification (Exhs. “J-6” and “CC-6”) of
P103.33. The said figure will further increase, if the Court will
further consider the improvements introduced by plaintiffs, which
should be the case. Moreover, the said value of P103.33/sq. meter
is more realistic as it
565
VOL. 514, FEBRUARY 6, 2007 565

does not depart from the government recognized values as

specified in the 1993 and 1994 Revised Assessment and Property
Classification of Tagum City. This Court finds the evidence of the
plaintiffs sufficient73 and preponderant to establish the value of
P103.33/sq. meter.”
The trial court further rationalized its award thus:
“It may be admitted that plaintiffs’ properties are agricultural;

however, it is simply beyond dispute that in going about the task
of appraising real properties, as in the instant cases, “all the facts
as to the condition of the property and its surroundings, its
improvements and capabilities, may be shown and considered in
estimating its value.” (Manila Railroad Company vs. Velasquez,
32 Phil. 287, 314). It is undeniable that plaintiffs’ agricultural
lands as borne out from the records hereof, and remaining
unrebutted, shows that all weather-roads network, airstrip, pier,
irrigation system, packing houses, and among numerous other
improvements are permanently in place and not just a measly,
but substantial amounts investments have been infused. To
exclude these permanent improvements in rendering its valuation
of said properties would certainly be less than fair. x x x.
xxxx
The plaintiffs’ agricultural properties are just a stone’s throw
from the residential and/or industrial sections of Tagum City, a
fact defendants-DAR and LBP should never ignore. The market
value of the property (plus the consequential damages less
consequential benefits) is determined by such factors as the value
of like properties, its actual or potential use, its size, shape and
location as enunciated in B.H. Berkenkotter & Co. vs. Court of
Appeals, 216 SCRA 584 (1992). To follow Defendants-DAR and
LBP logic, therefore, would in effect restrict and delimit the broad
judicial prerogatives of this Court in determining and fixing just
compensation of properties taken by the State.
Proceedings before the Panel of Commissioners revealed that
permanent improvements as mentioned above exist inside the
lands subject of this complaints. It was also established during
the trial proper upon reception of the evidence of the plaintiffs

which clearly
_______________
73 CA Rollo, pp. 125-128.
566

revealed the character, use and valuation of the lands

surrounding the properties involved in these cases, indicating the
strategic location of the properties subject of these cases. The
findings being that surrounding properties have been classified as
residential, commercial or industrial. And yet defendant-LBP
refused to acknowledge the factual basis of the findings of the
Panel of Commissioners and insisted 74
on its guideline in
determining just compensation. x x x.”
In arriving at its valuation of the subject properties, the

RTC conducted a thorough and meticulous examination of
all determining factors. It did not rely merely on the report
of Commissioners nor on the Cuervo appraiser’s report. It
took into consideration the schedule of market values of the
City of Tagum per its 1993 and 1994 Revision of
Assessment and Property Clasisification, value of the
permanent improvements thereon, as well as comparative
sales of adjacent lands from early 1995 to early 1997,
among other factors.
Contrary to LBP’s claim, the above factors are neither
irrelevant nor immaterial. When the trial court arrived at
the valuation of a landowner’s property taking into account
its nature as irrigated land, location along the highway,
market value, assessor’s value and the volume and value of
its produce, such valuation 75
is considered in accordance
with Republic Act No. 6657.
Even the Commissioners’ report which the trial court
took into consideration may not be dismissed as irrelevant.
In the first place the trial court acting as a special agrarian
court is authorized to appoint commissioners76
to assist in
the determination of just compensation. In this case the
Commissioners’ report was submitted only after ocular
inspections were con-
_______________
74 Id., at pp. 146-149.

75 Belen v. Court of Appeals, supra note 69 at p. 295; Land Bank of
Philippines v. Natividad, supra note 69 at pp. 452-453.
76 Rule 67, Section 5, Revised Rules of Court.
567
VOL. 514, FEBRUARY 6, 2007 567

ducted on the landholdings

77
to give them a better idea of
their real value.
Conspicuously, the trial court did not merely rely solely
on the appraisal report submitted by the Commissioners.
The trial court conducted hearings for the purpose of
receiving the parties’ evidence.
Clearly evident from the records of this case is that in
the proceedings before the Commission constituted by the
RTC of Tagum City, Branch 2, to fix the just compensation
for the properties, the LBP and the DAR were given all the
opportunities to justify their stances. Thus:
“[T]he Commission set another hearing on February 23, 2001 at

9:00 a.m. at the Function Room, Marbella mansion, Rizal Street,
Davao City, to give the LBP the opportunity to present evidence.
The LBP counsels, Attys. Batingana and Sembrano, instead of
presenting witnesses and other evidence, manifested that they
will submit a position paper within fifteen (15) days from the date
of the hearing. This was granted by the Chairman of the
Commission, who also gave the plaintiff the opportunity to submit
within five (5) days, if they so desire, their rejoinder.
Inspite of the lapse of the period, the LBP failed to file its
position paper.
xxxx
The plaintiffs have presented evidence to establish the value of
their properties before the Court-appointed Commissioners, as
well as before this Court. The Commissioners who acted and
performed their assigned tasks under their Oaths of Office are
deemed a surrogate or extension of the Court itself. (Secs. 3 and 4,
Rule 32 of the 1997 Rules of Civil Procedure). Defendant-DAR and
Defendant-LBP failed to present evidence during the hearings set
by the Commissioners on February 5, 2001, and February 23,
2001, for the presentation of their evidence. This Court gave
Defendant Land Bank and Defendant DAR additional
opportunities to present evidence. Defendant Land Bank and
DAR asked for extensions to submit their evi
_______________
77 B.H Berkenkotter and Co. v. Court of Appeals, G.R. No. 89980, 14

December 1992, 216 SCRA 584, 589.
568

dence in its motion dated July 27, 2001, which was granted by the
Court. All exhibits and other documents offered in evidence were
admitted, after which this Court issued
78
an order that these two
cases were submitted for resolution.”
Given the already exhaustive analysis made by the RTC,

this Court is convinced that the trial court correctly
determined the amount of just compensation due to AFC
and HPI.
WHEREFORE, premises considered, the instant
Petition is PARTIALLY GRANTED. While the Decision,
dated 12 February 2004, and Resolution, dated 21 June
2004, of the Court of Appeals in CA-G.R. SP No. 76222,
giving due course to LBP’s appeal, are hereby AFFIRMED,
this Court, nonetheless, RESOLVES, in consideration of
public interest, the speedy administration of justice, and
the peculiar circumstances of the case, to give DUE
COURSE to the present Petition and decide the same on its
merits. Thus, the Decision, dated 25 September 2001, as
modified by the Decision, dated 5 December 2001, of the
Regional Trial Court of Tagum City, Branch 2, in Agrarian
Cases No. 54-2000 and No. 552000 is AFFIRMED. No
costs.
SO ORDERED.
Ynares-Santiago (Chairperson), Austria-Martinez

and Callejo, Sr., JJ., concur.
Petition partially granted, judgment and resolution

affirmed.
Notes.—The nature and character of the land at the

time of its taking is the principal criterion for determining
how much just compensation should be given to the
landowner. (National Power Corporation vs. Manubay
Agro-Industrial Development Corporation, 437 SCRA 60
[2004])
_______________
78 CA Rollo, pp. 112-121.

569
VOL. 514, FEBRUARY 6, 2007 569

Philippine National Construction Corporation vs. Court of
Appeals
That just compensation should be determined in

accordance with Republic Act No. 6657 and not
Presidential Decree No. 27 or Executive Order No. 228 is
especially imperative considering that just compensation
should be full and fair equivalent of the property taken
from the owner by the expropriator, the equivalent being
real substantial, full and ample. (Land Bank of the
Philippines vs. Natividad,458 SCRA 441 [2005])
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1/10/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 514

VOL. 514, FEBRUARY 6, 2007 537

APO FRUITS CORPORATION and HIJO PLANTATION,

Judgments; Res Judicata; Having been dismissed based on

Pleadings and Practice; It is already an accepted rule of

538 SUPREME COURT REPORTS ANNOTATED

Apo Fruits Corporation vs. Court of Appeals

Eminent Domain; While eminent domain lies as one of the

Just Compensation; Words and Phrases; The concept of just

Eminent Domain; Just Compensation; Eminent domain is an

VOL. 514, FEBRUARY 6, 2007 539

Apo Fruits Corporation vs. Court of Appeals

State over the interests of the property owner. Private rights

Same; Same; It is now settled that the valuation of property in

PETITION for review on certiorari of the decision and

The facts are stated in the opinion of the Court.

Apo Fruits Corporation (AFC) and Hijo Plantation, Inc.

540 SUPREME COURT REPORTS ANNOTATED

APO FRUITS CORPORATION

Transfer Certificate of Area (Ha.)

TCT No. Area (Ha.)

On 12 October 1995, AFC and HPI voluntarily 6offered to

VOL. 514, FEBRUARY 6, 2007 541

AFC and HPI, it was referred to the Land Bank of the

8 Records of Agrarian Case No. 55-2000, Book I, p. 13.

542 SUPREME COURT REPORTS ANNOTATED

HPI also rejected the valuation of its three parcels of land

13 Records of Agrarian Case No. 55-2000, Book I, p. 461.

VOL. 514, FEBRUARY 6, 2007 543

area of 640.3483 hectares previously assessed by LBP with

“This Court will determine the all-embracing concept of Just

17 Records of Agrarian Case No. 55-2000, Book I, pp. 1-5.

544 SUPREME COURT REPORTS ANNOTATED

The commissioners, together with all the representatives of

a) The amount of ONE BILLION ONE HUNDRED THIRTY-ONE MILLION

WHEREFORE, the Commission respectfully submits this Appraisal Report to this

(Sgd.) CESAR V. ARAÑAS (Sgd.) ALFREDO M. SILAWAN

25 Records of Agrarian Case No. 55-2000, Book I, p. 707.

VOL. 514, FEBRUARY 6, 2007 545

“WHEREFORE, consistent with all the foregoing premises,

First—Hereby ordering after having determined and fixed the fair,

26 Id., at pp. 747-795. Penned by Acting Presiding Judge Erasto D.

546 SUPREME COURT REPORTS ANNOTATED

Fourth—Hereby ordering Defendants – DEPARTMENT OF

from the plaintiffs.”

27 CA Rollo, pp. 131-133.

VOL. 514, FEBRUARY 6, 2007 547

“WHEREFORE, premises considered, IT IS HEREBY ORDERED

On the Second Paragraph of the Dispositive Portion which now

Second—Hereby ordering Defendants – DEPARTMENT OF

On the Third Paragraph of the Dispositive Portion which Now

548 SUPREME COURT REPORTS ANNOTATED

Third—Hereby ordering Defendants – DEPARTMENT OF

On the Fourth Paragraph of the Dispositive Portion which Now

Fourth—Hereby ordering Defendants – DEPARTMENT OF

amount as the fair, reasonable and just compensation of

Except for the above-stated modifications, the consolidated

From this Order, 31

30 Id., at pp. 158-160.

VOL. 514, FEBRUARY 6, 2007 549

of appeal from a decision on the determination of just

“WHEREFORE, the petition is GRANTED and the assailed

34 CA Rollo, pp. 47-48.