Topic: Legal Interest for Expropriation Cases

62) Wycoco vs. Judge Caspillo (Pairing Judge of the Regional Trial Court), G.R. No.
146733, January 13, 2004
Facts: Feliciano F. Wycoco is the registered owner of a 94.1690 hectare unirrigated and
untenanted rice land, and situated in the Sitios of Ablang, Saguingan and Pinamunghilan, Barrio
of San Juan, Licab, Nueva Ecija. In line with the Comprehensive Agrarian Reform Program
(CARP) of the government, Wycoco voluntarily offered to sell the land to the Department of
Agrarian Reform (DAR) for P14.9 million. In November 1991, after the DAR’s evaluation of the
application and the determination of the just compensation by the Land Bank of the Philippines
(LBP), a notice of intention to acquire 84.5690 hectares of the property for P1,342,667.466 was
sent to Wycoco. The amount offered was later raised to P2,594,045.39 and, upon review, was
modified to P2,280,159.82. Wycoco rejected the offer, prompting the DAR to indorse the case to
the Department of Agrarian Reform Adjudication Board (DARAB) for the purpose of fixing the
just compensation in a summary administrative proceeding. Thereafter, the DARAB requested
LBP to open a trust account in the name of Wycoco and deposited the compensation offered by
DAR. In the meantime, the property was distributed to farmer-beneficiaries.
On November 14, 1995, the trial court rendered a decision in favor of Wycoco. It ruled that there
is no need to present evidence in support of the land valuation inasmuch as it is of public
knowledge that the prevailing market value of agricultural lands sold in Licab, Nueva Ecija is
from P135,000.00 to 150,000.00 per hectare. The court thus took judicial notice thereof and
fixed the compensation for the entire 94.1690 hectare land at P142,500.00 per hectare or a total
of P13,428,082.00. It also awarded Wycoco actual damages for unrealized profits plus legal
interest.
The DAR and the LBP filed separate petitions before the Court of Appeals. The petition brought
by DAR was dismissed. The petition brought by LBP was likewise dismissed by the Court of
Appeals however, the Court of Appeals modified its decision by deducting from the
compensation due Wycoco the amount corresponding to the 3.3672 hectare portion of the
94.1690 hectare land which was found to have been previously sold by Wycoco to the Republic.
Issues: (1) Did the Regional Trial Court, acting as Special Agrarian Court, validly acquire
jurisdiction over the instant case for determination of just compensation? (2) Assuming that it
acquired jurisdiction, was the compensation arrived at supported by evidence? (3) Were the
awards of interest and damages for unrealized profits valid?
Held: In the jurisdiction issue, the laws in point are Sections 50 and 57 of Republic Act No.
6657 (Comprehensive Agrarian Reform Law of 1988) which, in pertinent part, provide:
Section 50. Quasi-judicial Powers of the DAR. – The DAR is hereby vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original
jurisdiction over all matters involving the implementation of agrarian reform, except those
falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the
Department of Environment and Natural Resources (DENR)….
Section 57. Special Jurisdiction. – The Special Agrarian Court 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 Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction
within thirty (30) days from submission of the case for decision.
In Republic v. Court of Appeals, it was held that Special Agrarian Courts are given original and
exclusive jurisdiction over two categories of cases, to wit: (1) all petitions for the determination
of just compensation; and (2) the prosecution of all criminal offenses under R.A. No. 6657.
Section 50 must be construed in harmony with Section 57 by considering cases involving the
determination of just compensation and criminal cases for violations of R.A. No. 6657. The
DAR, as an administrative agency, cannot be granted jurisdiction over cases of eminent
domain and over criminal cases. The valuation of property in eminent domain is essentially
a judicial function which is vested with the Special Agrarian Courts and cannot be lodged
with administrative agencies. In fact, Rule XIII, Section 11 of the New Rules of Procedure of
the DARAB acknowledges this power of the court, thus –
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.
Under Section 1 of Executive Order No. 405, the Land Bank of the Philippines is charged with
the initial responsibility of determining the value of lands placed under land reform and the just
compensation to be paid for their taking.
procedure for the determination of just compensation:
Through a notice of voluntary offer to sell (VOS) submitted by the landowner, accompanied by
the required documents, the DAR evaluates the application and determines the land’s suitability
for agriculture. The LBP likewise reviews the application and the supporting documents and
determines the valuation of the land. Thereafter, the DAR issues the Notice of Land Valuation to
the landowner. In both voluntary and compulsory acquisition, where the landowner rejects the
offer, the DAR opens an account in the name of the landowner and conducts a summary
administrative proceeding. If the landowner disagrees with the valuation, the matter may be
brought to the Regional Trial Court acting as a special agrarian court.
the trial court properly acquired jurisdiction over Wycoco’s complaint for determination of just
compensation. It must be stressed that although no summary administrative proceeding was held
before the DARAB, LBP was able to perform its legal mandate of initially determining the value
of Wycoco’s land pursuant to Executive Order No. 405, Series of 1990. The trial court should
have allowed the parties to present evidence thereon instead of practically assuming a valuation
without basis. While market value may be one of the bases of determining just compensation, the
same cannot be arbitrarily arrived at without considering the factors to be appreciated in arriving
at the fair market value of the property e.g., the cost of acquisition, the current value of like
properties, its size, shape, location, as well as the tax declarations thereon. Since these factors
were not considered, a remand of the case for determination of just compensation is necessary.
On the 3rd issue, The award of actual damages for unrealized profits should be deleted. The
amount of loss must not only be capable of proof, but must be proven with a reasonable degree
of certainty. The claim must be premised upon competent proof or upon the best evidence
obtainable, such as receipts or other documentary proof.40 None having been presented in the
instant case, the claim for unrealized profits cannot be granted.
THEREFORE, The decision of the Regional Trial Court of Cabanatuan City, Branch 23,
acting as Special Agrarian Court, cannot be enforced because there is a need to remand the
case to the trial court for determination of just compensation.