Case Digest: Davao Fruits v. Land Bank

G.R. Nos. 181566 and 181570 : March 9, 2011




Davao Fruits Corporation (DFC) voluntarily offered its bamboo plantation for sale to the government under the Comprehensive Agrarian Reform Law of 1988 at not less than P300,000 per hectare.The DAR and LBP computed the value of the property but DFC rejected the valuation. LBP filed a petition for the fixing of just compensation with the RTC sitting as Special Agrarian Court (SAC).DFC moved to dismiss the petition arguing among others that LBP has no authority to sue on behalf of the Republic of the Philippines and question the valuation made by the DAR. The Special Agrarian Court dismissed LBP's petition, reasoning that the two agencies do not work in harmony with each other and the lack of coordination between the two (2) agencies, which may frustrate the implementation program of the government, sends a wrong message to landowners and CARP beneficiaries. The Court of Appeals set aside the SACs dismissal of LBP's petition for determination of just compensation.

ISSUE: Whether or not the LBP has the personality to file a petition for determination of just compensation before the SAC.

HELD: Court of Appeals decision is affirmed.

POLITICAL LAW: locus standi to file a petition for determination of just compensation

The LBP is an agency created primarily to provide financial support in all phases of agrarian reform pursuant to Section 74 of RA 3844 or the Agricultural Reform Code and Section 64 of RA 6657 or the Comprehensive Agrarian Reform Law of 1988. Once an expropriation proceeding for the acquisition of private agricultural lands is commenced by the DAR, the indispensable role of LBP begins. LBP is not merely a nominal party in the determination of just compensation, but an indispensable participant in such proceedings. As such, LBP possessed the legal personality to institute a petition for determination of just compensation in the SAC. It may agree with the DAR and the land owner as to the amount of just compensation to be paid to the latter and may also disagree with them and bring the matter to court for judicial determination.