Land Bank Of The Philippines v. Prado Verde Corporation

GESMUNDO, J.:

The instant petitions are rooted from the March 21, 2012 Decision 1 and June 11, 2012 Resolution2 of the Regional Trial Court of Legazpi City, Branch 3 (RTC), in Agrarian Case No. 08-04, a case for just compensation filed by Prado Verde Corporation (Prado), formerly United Plaza Properties, Inc., against Land Bank of the Philippines (Land Bank) whereby the trial court directed Land Bank to pay Prado the amount of ₱294,495.20 as just compensation, an amount which was higher than Land Bank's revalued amount of ₱214,026.38. After both parties' respective motions for reconsideration were denied, each party filed its separate petition for review before the Court of Appeals (CA). Prado's petition was raffled to the Sixth Division and was docketed as CA-G.R. SP No. 125525, while Land Bank's petition was raffled to the First Division, docketed as CA-G.R. SP No. 125471.

Learning of the two petitions, both parties moved for consolidation in CA-G.R. SP No. 125471, said case having the lower docket number. However, pending resolution of the motion, the CA Sixth Division rendered a Decision3 on January 31, 2013, and later a Resolution4 on July 8, 2013, affirming the decision of the RTC and denying the parties' motions for reconsideration, respectively. Thus, Land Bank and Prado filed their separate petitions for review before the Court, docketed as G.R. No. 208004 and G.R. No. 208112.

Both petitions were later consolidated. Subsequently, the CA First Division denied the motion for consolidation, the same having been mooted by the January 31, 2013 Decision of the Sixth Division. Thus, it later rendered a Resolution5 on December 4, 2013 dismissing Land Bank's petition for lack of merit.

Hence, Land Bank filed a petition for review before the Court, docketed as G.R. No. 210243. Since all three petitions are not simply intertwined, but involve the very same parties, facts and issues, consolidation is therefore in order. Antecedents Prado was the owner of an agricultural land known as Lot 5834-A, covered by Transfer Certificate of Title (TCT) No. 4141 issued in the name of Legazpi Oil Company, Inc. (Legazpi Oil), from which Prado bought said property in 1979.

The property remained registered in the name of Legazpi Oil and the sale was not annotated on the TCT. However, on July 9, 1980, the deed of absolute sale in favor of United Plaza Properties, Inc. was presented for registration and was duly registered before the Registry of Deeds of Legazpi. The said property was placed within the coverage of the Agrarian Reform Program under Presidential Decree (P.D.) No. 27 and a portion thereof, with an area of 2.4975 hectares, was placed within the coverage of Operation Land Transfer on December 4, 1995.

As of August 2010, the landowner of the agricultural property had not yet been compensated. Prado received the claims folder from the Department of Agrarian Reform (DAR) on January 24, 1996. Meanwhile, on April 21, 1988 and pursuant to Emancipation Patent issued by DAR, the Registry of Deeds entered in its registry TCT Nos. 58 and 59 over portions of Lot 5834-A, which portions were then known as Lot No. 5834-A-1, issued in the name of farmer-beneficiary Salustiano Arcinue and Lot No. 5834-2 issued in the name of farmer-beneficiary Agapito Azupardo, respectively.

Thus, TCT No. 4141 was partially cancelled with regard to the 2.4975 hectare portion, which portion was previously classified as riceland, of Lot No. 5834-A. On January 1996, Land Bank initially valued the acquired property in the amount of ₱38,885.04 pursuant to P.D. No. 27. Then, a revaluation was made and the compensation was pegged in the amount of ₱59,457.05 which amount, for unknown reason, was not received by the landowner. Thus, Prado filed an agrarian suit before the RTC.

During the pendency of the case, Land Bank further revalued the property using the reckoning dates of production data and values pursuant to Administrative Order (A.O.) No. 1, series of 2010, which the DAR issued under Republic Act (R.A.) No. 9700, and the two-factor formula prescribed therein [(L V = (CNI x 0.90) + (MV x 0.10)], thus arriving at the amount of ₱214,026.38. However, Prado rejected the revalued compensation. On March 21, 2012, the RTC, acting as a Special Agrarian Court (SAC), rendered a Decision6 fixing the amount of just compensation at ₱294,495.20.

The trial court held that just compensation of the subject properties should be computed pursuant to A.O. No. 5, Series of 1998, as amended by A.O. No. 2, Series of 2009 and A.O. No. 1, Series of 2010, which reckoned the determination of just compensation based on the condition of the property prevailing within the 12-month period preceding June 30, 2009, the presumptive date of taking.7 The computation was as follows: LV = (CNI x 0.60) + (CS x 0.30) + (MV x 0.10) Where: L V = Land Value CNI = Capitalized Net Income which refers to the gross sales (AGP x SP) with assumed net income rate of 20% Capitalized at 0.12 CS = Comparable Sales (based on fair market value equivalent to 70% of BIR Zonal Value) MV = Market Value per Tax Declaration CNI = (AGP x SP) x 0.20