Land Bank Of The Philippines v. Gonzalez

JR., J.:

This Rule 45 Petition1 seeks the reversal of the Court of Appeals (CA) July 30, 2008 Decision2 in CA-G.R. SP No. 00502-MIN which affirmed with modification the February 3, 2005 Decision3 of the Regional Trial Court (RTC) of Butuan City, Branch 5 sitting as a Special Agrarian Court (SAC). Also assailed is the appellate court's Resolution4 dated December 12, 2008 denying petitioner's motion for reconsideration. The Facts Respondent Atty. Ricardo D. Gonzalez is the registered owner of two contiguous parcels of land devoted to coconut production, covered by Transfer Certificate of Title (TCT) No. T -39275 with an area of 9, 790 square meters and TCT No. T -39286 with an area of 20,210 square meters, or a total of 3 hectares, located at Barangay Abilan, Buenavista, Agusan del Norte (subject property).

The subject property was tenanted by spouses Virgilio and Espera Tagupa, spouses Valeriano and Erlinda Inoc, spouses Isidro and Eden Soria and spouses Rudy and Rosario Peligro (the tenants). It is situated only about 1 ½ kilometers from the national highway and 2-3 kilometers from the local beaches. Pursuant to the Comprehensive Agrarian Reform Program (CARP), respondent voluntarily offered to sell the subject property to the Department of Agrarian Reform (DAR) for ₱250,000.00 per hectare on December 9, 1996.7 By way of reply to the Municipal Agrarian Reform Officer's (MARO) letter dated January 24, 1997, respondent, in his Letter8 dated February 5, 1997, informed the MARO, among others, that the average coconut production of the subject property from 1994 to 1996 is at 75,000 kilograms with a price average of ₱2.00, and that its average annual net income is ₱100,000.00.

Representatives of petitioner Land Bank of the Philippines (LBP), the DAR and the Barangay Agrarian Reform Committee (BARC) conducted an ocular inspection of the subject property, and issued a Field Investigation Report9 on February 5, 1997. Pursuant to DAR Administrative Order (A.O.) No. 6, series of 1992, as amended by DAR A.O. No. 11, series of 1994, the DAR and the LBP valued the subject property at ₱150,795.51 or at ₱50,265.17 per hectare. Respondent rejected the valuation but the LBP deposited ₱60,318.20 of the said sum in cash and ₱90,477.31 thereof in bonds10 in the name of respondent.11 Respondent acknowledged the receipt thereof.12 The case was then referred to the Regional Agrarian Reform Adjudicator (RARAD) for the Caraga Region XIII for summary administrative hearing.

In an Order13 dated October 27, 1998, the RARAD affirmed the valuation made by the DAR and the LBP since DAR A.O. No. 5, series of 199814 was applied in coming up with the valuation. Disappointed with the low valuation, respondent filed before the SAC a petition for just compensation against the LBP, the DAR and the tenants of the subject property on November 12, 1998.15 In his Amended Petition16 dated January 5, 1999, respondent alleged that, in his desire to make his tenants the owners of the subject property, he voluntarily offered to sell the subject property for ₱250,000.00 per hectare taking into consideration the subject property's productivity, advantageous location, peaceful surroundings and the mode of installment payments. Respondent also alleged that his TCTs were already cancelled in favor of the Government, and that Certificates of Land Ownership Awards (CLOAs) were already generated in favor of the tenants.

With the conformity of the parties, the SAC appointed on March 3, 2000 Engr. Gil A. Guigayoma, Mr. Simeon E. Avila, Jr. and Atty. Fernando R. Fudalan, Jr.

as members of the Board of Commissioners (the Board) to determine the amount of just compensation due to respondent.17 In its Report18 dated July 28, 2000, the Board recommended that the portion of the subject property devoted to coconut production be valued at ₱100,000.00 excluding the value of the trees planted thereon, valued at ₱400.00 per tree, and that the portion devoted to rice production be valued at ₱150,000.00. Both parties objected to the said report. The SAC's Ruling On February 3, 2005, the SAC held that respondent's asking price of ₱250,000.00 per hectare was quite high while LBP's valuation of ₱50,265.17 per hectare was considerably low.

Thus, the SAC came up with the following computation: x x x x Below is the formula used by LBP in the valuation of lands covered by VOS or CA regardless of the date of offer or coverage: LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1) Where: LV = Land Value CNI = Capitalized Net Income CS = Comparable Sales MV = Market Value per Tax Declaration More often the CS factor is not available, hence, the formula shall be: LV = (CNI x 0.9) + (MV x 0.1) CNI = (AGP x SP) 70%