Case Digest: Land Bank v. Heirs of Yujuico

G.R. No. 184719 : March 21, 2012



By virtue of P.D. 27 and E.O. 228,Lots 3, 4, and 7 and parts of Lots 1, 5, and 6 owned by respondent spouses were placed under the Operation Land Transfer (OLT) program of the government. The remaining parts of Lots 1, 5, and 6 were covered by R.A. 6657. Thus, the properties were acquired by the DAR and thereafter distributed to the proper farmer-beneficiaries.

The LBP offered respondents the amount of₱2,422,883.88 as payment for their properties. Thus, respondents filed an action for the payment of just compensation with the DARAB of Nueva Ecija, Cabanatuan City. They subsequently filed respondents filed a complaint for determination and payment of just compensation before the Special Agrarian Court (SAC) of the RTC even before the DARAB could resolve the case.

Pending resolution of the Complaint, initial payments for some of the lots were accepted by respondents from the LBP. The parties agreed that these amounts should be deducted from whatever total amount the court would award to respondents.

DAR contended that the determination of the just compensation for the Lots placed under the OLT program should be governed by the provisions of P.D. 27 and E.O. 228. LBP concurred with the formula presented by DAR.

As the taking of the other properties were carried out through the application of the provisions of the CARL, the DAR submits that it is the CARL that should be used or applied in determining the value of these properties. The LBP asserts that in determining the value of respondents properties, it merely applied and conformed to the mandate of Section 17 of the CARL as implemented by A.O. 5.

The RTC, in its decision, asserted that the Supreme Court had already declared the application of E.O. 228 and P.D. 27 in valuing expropriated properties as unfair and unjust to landowners. But no pronouncement was made in its Decision on Lot 8.

The LBP and the DAR filed Petitions for Review, which were later consolidated by the appellate court.

On appeal, the CA ruled that it should be the law in effect on the date of payment and not as the LBP insists, the law in effect at the time of the taking In determining whether to apply the formula ordered by P.D. 27 and E.O. 28 or that found in Section 17 of the CARL in relation to its implementing regulation A.O. 5.

Hence, for lands taken under PD 27, the formula in PD 27 should be followed, for those under EO 228, the formula in EO 228 should be used, and for those under RA 6657, the formula of that statue should apply.

However, from the very records of Land Bank, the earliest payment was made in March 1992 long after CARP was in effect. Subsequent payments were effected until 2003. Following judicial doctrine, the valuation must be determined under RA 6657 as implemented by AO 5.


Whether or not E.O. 27 and E.O. 228 or Section 17 of R.A. 6657 and A.O. 5 should be applied to determine the value of just compensation?


The petition is partly granted.

POLITICAL LAW: just compensation

The Court has already categorically declared inLBP v. Domingo Soriano (G.R. Nos. 180772 and 180776, 6May 2010)that if the issue of just compensation is not settled prior to the passage of the CARL, it should be computed in accordance with the said law, although the property was acquired under P.D. 27.

The same rule holds true for the present case. While some of the lands were acquired under P.D. 27, the Complaint for just compensation was lodged before the court only on 20 August 2001, long after the passage of the CARL, or on 15 June 1988.

The Court, in several cases by reason of equity, applied the CARL in determining just compensation for lands acquired under P.D. 27 and before the effectivity of the CARL.

It is necessary to determine the actual time of taking, as it is the value of the properties at that time that should be used to compute the just compensation. It will also be the date when the applicable interest in expropriation cases begins to accrue. The exact date when each property was taken from respondents cannot be determined from the evidence already presented by the parties.

The exact amount already paid to and received by respondents as initial payment should also be determined, as this amount will be deducted from whatever amount will be awarded to them as just compensation.However, neither the RTC nor the appellate court made a pronouncement as to the total amount already received by respondents as initial payment. Thus, the evidence on record is not sufficient to enable this Court to determine the said amount.

Thus, since some of the lands had already been acquired even before the CARL became effective, the acceleration of the final disposition of this case is warranted. The he just compensation shall be ascertained due in accordance with this Decision, applying Section 17 of R.A. 6657 and A.O. 5.

The case is remanded to the Court of Appeals.