Land Bank Of The Philippines v. Rivera

PEREZ, J.:

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure filed by Petitioner Land Bank of the Philippines (LBP) assailing the Decision1 of the Court of Appeals dated 9 October 2007 in CA G.R. SP No. 87463, ordering the payment by LBP of just compensation and interest in favor of respondents Esther Anson Rivera, Antonio G. Anson and Cesar G. Anson, and at the same time directed LBP to pay the costs of suit. Likewise assailed is the Resolution2 of the Court of Appeals dated 18 March 2008 denying the Motion for Reconsideration of LBP.3 The respondents are the co-owners of a parcel of agricultural land embraced by Original Certificate of Title No. P-082, and later transferred in their names under Transfer Certificate of Title No. T-95690 that was placed under the coverage of Operation Land Transfer pursuant to Presidential Decree No. 27 in 1972. Only 18.8704 hectares of the total are of 20.5254 hectares were subject of the coverage.

After the Department of Agrarian Reform (DAR) directed payment, LBP approved the payment of ₱265,494.20, exclusive of the advance payments made in the form of lease rental amounting to ₱75,415.88 but inclusive of 6% increment of ₱191,876.99 pursuant to DAR Administrative Order No. 13, series of 1994.4 On 1 December 1994, the respondents instituted Civil Case No. 94-03 for determination and payment of just compensation before the Regional Trial Court (RTC), Branch 3 of Legaspi City,5 claiming that the landholding involved was irrigated with two cropping seasons a year with an average gross production per season of 100 cavans of 50 kilos/hectare, equivalent of 200 cavans /year/hectare; and that the fair market value of the property was not less that ₱130,000.00/hectare, or ₱2,668,302.00 for the entire landholding of 20.5254 hectares. LBP filed its answer,6 stating that rice and corn lands placed under the coverage of Presidential Decree No. 277 were governed and valued in accordance with the provisions of Executive Order No. 2288 as implemented by DAR Administrative Order No. 2, Series of 1987 and other statutes and administrative issuances; that the administrative valuation of lands covered by Presidential Decree No. 27 and Executive Order No. 228 rested solely in DAR and LBP was the only financing arm; that the funds that LBP would use to pay compensation were public funds to be disbursed only in accordance with existing laws and regulations; that the supporting documents were not yet received by LBP; and that the constitutionality of Presidential Decree No. 27 and Executive Order No. 228 was already settled.

On 6 October 2004, the RTC rendered its decision, holding:

ACCORDINGLY, the just compensation of the land partly covered by TCT No. T-95690 is fixed at Php1,297,710.63. Land Bank of the Philippines is hereby ordered to pay Esther Anson, Cesar Anson and Antonio Anson the aforesaid value of the land, plus interest of 12% per annum or Php194.36 per day effective October 7, 2004, until the value is fully paid, in cash or in bond or in any other mode of payment at the option of the landowners in accordance with Sec. 18, RA 6657.9 LBP filed a Motion for Reconsideration10 which the RTC denied in its Order dated 29 October 2004.11 LBP next filed a petition for Review to the Court of Appeals docketed as CA G.R. SP No. 87463. The Court of Appeals rendered a decision dated 9 October 2007, the fallo of which reads:12 WHEREFORE, the DECISION DATED OCTOBER 6, 2004 is MODIFIED, ordering petitioner LAND BANK OF THE PHILIPPINES to pay to the respondents just compensation (inclusive of interests as of October 6, 2004) in the amount of ₱823,957.23, plus interest of 12% per annum on the amount of ₱515,777.57, or ₱61,893.30 per annum, beginning October 7, 2004 until the just compensation is fully paid in accordance with this decision. In arriving at its computation, the Court of Appeals explained: In computing the just compensation of the property, pursuant to Executive Order No. 228, Sec. 2 thereof, the formula is - LV = AGP x 2.5 x GSP x A (LV is Land Valuation; AGP is Average Gross Production; GSP is Government Support Price and A is the Area of the Land) WHERE: AGP = 99.36 cavans per hectare GSP = Php 35.00 per cavan A = 18.8704 hectares COMPUTATION: LV = (99.36 x2.5 x 35.00) 18.8704 LV = 8,694 x 18.8704 LV = Php 164,059.26 With increment of 6% interest per annum compounded annually beginning October 21, 1972 until October 21, 1994 and immediately after said date with 12% interest per annum until the value is fully paid in accordance with extant jurisprudence, computed as follows: To be compounded annually at 6% per annum from October 21, 1972 up to October 24, 1994. The formula is - CA = P(1+R)n (CA is Compounded Amount; P is Principal; R is Rate; and n is the number of years) WHERE: P = Php 164,059.26 R = 6% per annum N = 22 years COMPUTATION: CA = 164,059.26 x (1+06) 22 CA = 164,059.26 x (1.06) 22 CA = 164,059.26 x 3.60353741 CA = Php 591,193.68 Plus simple interest of 12% per annum from October 22, 1994 up to October 21, 2003, the formula of which is: I = P x R x T (I is the Interest; P is the Principal; R is the Rate and T is the time) WHERE: P = Php591,193.68 R = 12% per annum T = 9 years COMPUTATION: I = 591,193.68 x 12 x 9 I = 70,943.24 x 9 I = Php638,489.18 (Plus interest of 12% per annum from October 22, 2003 up to October 6, 2004 or a period of 350 days) COMPUTATION: I = (591,193.68 x .12) x 350