CASE DIGEST: Davao Fruits vs. Land Bank

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




Davao Fruits Corporation (DFC) voluntarily offered to sell several parcels of land for sale to the government under Republic Act No. (RA) 6657 or the Comprehensive Agrarian Reform Law of 1988 at not less thanP300,000per hectare orP30,432,480 for the entire property. The DAR and Land Bank of the Philippines (LBP), the financial intermediary of the government for agrarian reform, computed the value of the property atP4,055,402.85for 101.4416 hectares. DFC rejected the valuation, and the case was referred to the DARAB. Both DFC and LBP moved for reconsideration of the DARAB decision.

Thereafter, LBP filed a petition for the fixing of just compensation with the Regional Trial Court ofTagumCity, Davao delNorte(Branch 2) sitting as a 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 SAC granted the petition, while the CA reversed.

ISSUE: Whether or not the LBP has personality to question the DAR valuation


The petition is denied.

CIVIL LAW: Role of the LBP in just compensation cases.

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. InHeirs of Lorenzo and CarmenVidadv. Land Bank of the Philippines, we thoroughly explained the important role of LBP in expropriation proceedings under RA 6657. We held that 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.

The LBP is primarily responsible for the valuation and determination of compensation for all private lands. It has the discretion to approve or reject the land valuation and just compensation for a private agricultural land placed under the CARP. In case the LBP disagrees with the valuation of land and determination of just compensation by a party, the DAR, or even the courts, the LBP not only has the right, but the duty, to challenge the same, by appeal to the Court of Appeals or to this Court, if appropriate.