Land Bank Of The Philippines v. Eusebio

BRION, J.:

We resolve in this petition for review on certiorari1 the challenge to the August 26, 2002 decision2 and the September 24, 2003 resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 66022. The challenged decision affirmed in toto the June 29, 1999 judgment4 of the Regional Trial Court of Masbate, Masbate, Branch 48, sitting as a Special Agrarian Court (RTC-SAC) in Special Civil Case No. 4325 for Determination and Payment of Just Compensation under Republic Act (R.A.) No. 6657 or the Comprehensive Agrarian Reform Law of 1988. The Factual Antecedents Respondent Benecio Eusebio, Jr. was the owner of a 790.4-hectare parcel of land situated in Corba, Cataingan, Masbate, covered by Transfer Certificate of Title (TCT) No. T-4562 registered in the name of Ricardo Tañada.

Eusebio purchased this parcel of land from Tañada in 1980. On February 5, 1988, Eusebio voluntarily offered to sell the entire 790.4-hectare parcel of land to the government, through the Department of Agrarian Reform (DAR), pursuant to R.A. No. 6657 for ₱19,500,000.00.5 From the entire area of 790.4 hectares, the DAR chose to acquire only 783.37 hectares6 and initially offered to purchase it at ₱2,369,559.64. The DAR subsequently increased its offer to ₱3,149,718.20, per the Notice of Land Valuation dated April 14, 1992.Eusebio rejected both offered amounts.

On October 1, 1993, petitioner Land Bank of the Philippines (LBP) revalued the acquirable portion at ₱3,927,188.28, pursuant to DAR Administrative Order No. 6, series of 1992 (DAR AO 6-92). Eusebio likewise rejected this valuation through a letter dated October 26, 1993. Meanwhile, the LBP opened a trust account in the amount of ₱3,149,718.20 in favor of Eusebio and Tañada for the covered portion.

The DAR then took physical possession of the property, had TCT No. T-4562 cancelled in favor of the Republic of the Philippines, and distributed the property at cost to the recognized farmer-beneficiaries. The parties subsequently referred the matter to the DAR Adjudication Board (DARAB) for summary determination of just compensation. In a decision dated January 8, 1994, the DARAB fixed the value of the property at ₱4,874,659.89.

Eusebio likewise found the DARAB's valuation unacceptable. Hence, on July 18, 1994, Eusebio and Tañada filed before the RTC-SAC an action for determination and payment ofjust compensation against the DAR and the LBP. In the complaint, Eusebio and Tañada prayed for just compensation in the amount of ₱20,000,000.00, plus damages and attorney's fees equivalent to 20% ofthe total compensation.

They later amended the complaint increasing the prayed just compensation to ₱25,000,000.00. During trial, the RTC-SAC appointed a Board of Commissioners (Board) consisting of the Clerk of Court V - Atty. Norberto F. Mesa - as the Chairman, with the following as members: the Branch Clerk of Court, Eusebio and Tañada's nominee - Engr. Hernando Caluag- and the DAR and the LBP's nominee - Herbert Heath.

The Board conducted the ocular inspection on September 10, 1997 and arrived at the following unanimous observation:7 Breakdown of developed areas per land use: Coco productive 26.15 Hectares Coco Unproductive 3.04 Hectares Corn (95%) 700.6345 Hectares Rice (low land) 4.8810 Hectares Rice (uplan[d]) 31.9945 Hectares Total 766.70 Hectares Notwithstanding the series of conferences, the Board failed to reach a common and consolidated valuation for the acquired portion.8 Hence, the Board submitted the separate valuation report of the parties' respective nominees: Valuation of Engr. Caluag:9 Land Use Area Value/Has. TLV Coconut ₱29.0000 ₱113,000.00 ₱3,277,000.00 Corn ₱700.0000 ₱113,000.00 ₱79,000,000.00 Rice ₱38.0000