AGRARIAN LAW JUST COMPENSATION AY 1st Sem 2013-2014

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Table of Contents
JUST COMPENSATION ................................................................................... 1
1. Vinzons-Magana vs. Minister of Agrarian Reform (1991) ................. 1
2. Land Bank vs. Dumlao (2008) ............................................................ 2
3. Land Bank vs. CA (1995) .................................................................... 3
4. Land Bank vs. Heir of Vda. de Arieta (2010) ..................................... 4


JUST COMPENSATION
1. Vinzons-Magana vs. Minister of Agrarian Reform (1991)

FACTS
MAGANA owned a parcel of riceland in Talisay, Camarines Norte, which
was tenanted by the late Domingo Paitan (PAITAN). On Oct 20, 1977, MAGANA
filed a petition for the termination of the leasehold agreement allegedly due to (1)
non-payment of rentals; (2) inability and failure of PAITAN to till and cultivate
the riceland due to illness; and (3) subleasing of the landholding to third parties.
This petition was referred by the presiding judge of the Court of Agrarian
Reform to the DAR, which failed to act upon the request for more than 3 years.
Instead, on July 10, 1980, the property was placed under the Land Transfer
Program by Memorandum Circular 11 (1978) which implement LOI 474, which
placed all tenanted ricelands with areas of seven hectares or less belonging to
landowners who own agricultural lands of more than seven hectares in aggregate
areas, as being covered under the Land Transfer Program.
A Certificate of Land Transfer was awarded to PAITAN, who no longer
paid Magana the rentals and instead deposited them with the Land Bank, which
were credited as amortization payments for the riceland.
MAGANA now assails the constitutionality of MC11 and LOI 474, claiming
that the issuance of CLT to PAITAN without first expropriating said property to
pay petitioner landowner the full market value thereof before ceding and
transferring the land to Paitan and/or heirs, is invalid and unconstitutional as it is
confiscatory and violates the due process clause of the Constitution.

ISSUE
WON the said issuances are UNCONSTITUTIONAL

HELD
NO. The validity of LOI 474 has already been recognized by the court in
previous cases. LOI 474 is neither class legislation, nor does it deprive a person
of property without due process of law or just compensation
As to MC11, it is an elementary rule in administrative law that
administrative regulations and policies enacted by administrative bodies to
interpret the law which they are entrusted to enforce, have the force of law and
are entitled to great respect.
As previously held by the court, the taking of private property under the
CARP Law is constitutional. The government merely exercises its police power in
prescribing retention limits and, the taking under the power of eminent domain
just requires the payment of just compensation. The determination of just
compensation is a function addressed to the COURTS.
NOTE: Mere issuance of the certificate of land transfer does not vest in
the farmer/grantee ownership of the land described therein. At most, the
certificate merely evidences the government's recognition of the grantee as the
party qualified to avail of the statutory mechanisms for the acquisition of
ownership of the land titled by him as provided under PD27. This recognition is
neither permanent nor irrevocable. The failure on the part of the farmer/grantee
to comply with his obligation to pay his lease rentals or amortization payments
when they fall due for a period of two (2) years to the landowner or agricultural
lessor is a ground for forfeiture of his certificate of land transfer.
It is only compliance with the prescribed conditions which entitles the
farmer/grantee to an emancipation patent by which he acquires the vested right
of absolute ownership in the landholding a right which has become fixed and
established and is no longer open to doubt and controversy. At best the
farmer/grantee prior to compliance with these conditions, merely possesses a
contingent or expectant right of ownership over the landholding.
The landowner and other interested parties are nevertheless allowed an
opportunity to submit evidence on the real value of the property. Such
determination of just compensation by the DAR is NOT final and conclusive upon
the landowner or any other interested party for Section 16 (f) clearly provides:
"Any party who disagrees with the decision may bring the matter to the court of
proper jurisdiction for final determination of just compensation."
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Magana is not without protection. Should she fail to agree on the price of
her land as fixed by the DAR, she can bring the matter to the court of proper
jurisdiction. Likewise, failure on the part of the farmer/grantee to pay his lease
rentals or amortization payments for a period of two (2) years is a ground for
forfeiture of his certificate of land transfer.


2. Land Bank vs. Dumlao (2008)

FACTS
The DUMLAOS were co-owners of a 32 hectare ricelands in Nueva
Vizcaya which was placed under OLT by virtue of PD27 (note that actual date of
taking was not stated.)
The DAR made a preliminary valuation on 16 hectares (2 lots) and
payments were made to the DUMLAOs by Landbank. The DUMLAOs filed a
complaint before the RTC to determine just compensation, and requested the
appointment of 3 commissioners to make the determination.
The DAR moved to dismiss claiming that the RTC does not have
jurisdiction. The RTC eventually recognized the case and ordered payment at
6,912.50 per hectare for one lot & to follow the amount provided for in the Land
Valuation Summary and Farmers Undertaking for the other lot. The DUMLAOs
was claiming market value of 109,000 per hectare.
The DUMLAOs appealed to the CA which ruled in their favor, which noted
that the time of taking was not certain. The CA held that after the passage of RA
No. 6657, the formula relative to valuation under PD No. 27 no longer applies.
Under PD 27 and EO No. 228, the formula for computing the Land Value
(LV) or Price Per Hectare (PPH) of rice and corn lands is: 2.5 x AGP x GSP = LV
or PPH.
Under the CARL, it is provide:
Sec. 17. Determination of Just Compensation. In determining just
compensation, the cost of acquisition of the land, the current value of
the like properties, its nature, actual use and income, the sworn
valuation by the owner, the tax declarations, and the assessment
made by government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farmworkers
and by the Government to the property as well as the non-payment of
taxes or loans secured from any government financing institution on
the said land shall be considered as additional factors to determine
its valuation.

ISSUE
Which law should be followed to determine just compensation

HELD
(1) The just compensation due to respondents should be determined under
the provisions of RA No. 6657.
The Court has repeatedly held that if just compensation was not settled
prior to the passage of RA No. 6657, it should be computed in accordance with
said law, although the property was acquired under PD No. 27. The latter law,
being the latest law in agrarian reform, should control, as held in Land Bank of
the Philippines v. Heirs of Angel T. Domingo.
Section 75 of RA 6657 clearly states that the provisions of PD 27 and EO
228 shall only have a suppletory effect. Section 7 of the Act also provides
Sec. 7. Priorities. The DAR, in coordination with the PARC shall plan and
program the acquisition and distribution of all agricultural lands through a period
of ten (10) years from the effectivity of this Act. Lands shall be acquired and
distributed as follows:
Phase One: Rice and Corn lands under P.D. 27; all idle or abandoned lands;
all private lands voluntarily offered by the owners for agrarian reform; x x x and all
other lands owned by the government devoted to or suitable for agriculture, which
shall be acquired and distributed immediately upon the effectivity of this Act, with
the implementation to be completed within a period of not more than four (4) years.
This demonstrates that RA 6657 includes PD 27 lands among the
properties which the DAR shall acquire and distribute to the landless.
DARs failure to determine the just compensation for a considerable
length of time makes it inequitable to follow the guidelines provided by PD No. 27
and EO No. 228. Hence, RA No. 6657 should apply.
NOTE HOWEVER that the CAs act of setting just compensation in the
amount of P109,000.00 would have been a valid exercise of this judicial function,
had it followed the mandatory formula prescribed by RA No. 6657. However, the
appellate court merely chose the lower of two (2) values specified by the
commissioner as basis for determining just compensation, namely:
(a) P109,000.00 per hectare as the market value of first class unirrigated rice
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land in the Municipality of Villaverde; and (b)P60.00 per square meter as
the zonal value of the land in other barangays in Villaverde.
This is likewise erroneous because it does not adhere to the formula
provided by RA No. 6657 under Section 17, as implemented through DAR Admin
Order No. 6 (1992) - 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

(2) The taking of the properties for the purpose of computing just
compensation should be reckoned from the date of issuance of
emancipation patents.

The nature of the land at that time determines the just compensation to be paid.

(3) The DUMLAOs are entitled to payment of just compensation on their
entire landholdings covered by Operation Land Transfer, except for the
five hectares of retention area each of them are entitled to (RIGHT OF
RETENTION).
The determination of just compensation is judicial in nature. The DARs
land valuation is only preliminary and is not, by any means, final and conclusive
upon the landowner or any other interested party. In the exercise of its functions,
the courts still have the final say on what the amount of just compensation will
be.
A reading of Section 18 of RA No. 6657 shows that it is the courts, not
the DAR, which make the final determination of just compensation.
Also, to wait for the DAR valuation despite its unreasonable neglect and
delay in processing the four properties claimfolders is to violate the elementary
rule that payment of just compensation must be within a reasonable period from
the taking of property.
While the DAR is vested with primary jurisdiction to determine in a
preliminary manner the amount of just compensation, the circumstances of this
case militate against the application of the doctrine of primary jurisdiction.



3. Land Bank vs. CA (1995)

FACTS
This is a consolidated petition to assail the decision of the CA declaring
DAR Admin Order No. 9 (1990) insofar as it provided for opening of trust
accounts in lieu of deposits in cash or bonds. Pedro Yap, the heirs of Emiliano
Santiago and Agricultural Management & Devt Corp (RESPONDENTS) owned
lands which were subjected under the operation of the CARL.
For YAP, TCTs were issued to the beneficiaries (LEYTE 2 TCTs) without
notice to him and without complying with the requirement of Section 16 (e) of RA
6657 to deposit the compensation in cash and Landbank bonds in an accessible
bank for Php 1.455M.
For HEIRS (NUEVA ECIJA 18.6 hectares), they were also not notified
and the DAR Regional Director ordered Landbank to pay the HEIRS through the
establishment of a trust fund for Php 135.5 k.
For AMADCOR (QUEZON 373 hectares), a summary administrative
proceeding to determine just compensation was conducted by DARAB without
notice to AMADCOR. A trust fund was also established in its behalf for Php 12.2M.
RESPONDENTS claim they were aggrieved with respect to the valuation
and payment of just compensation, and as a result questioned the validity of
Admin Order No. 6 (1992) and Admin Order No. 9 (1990) and sought to compel
the DAR to expedite the pending summary administrative proceedings to finally
determine the just compensation of their properties, and the Landbank to deposit
in cash and bonds the amounts respectively "earmarked", "reserved" and
"deposited in trust accounts" for them, and to allow them to withdraw the same.

ISSUE / HELD
(1) WON deposit as used in Section 16(e) of the CARL merely referred to
the act of depositing and INCLUDES the opening of a trust account as a
form of deposit.
NO. Sec. 16 explicitly provides that payment is via depositing IN CASH or
IN LBP BONDS. The DAR clearly overstepped its rule-making powers in
expanding deposit to include setting up trust accounts.

(2) WON RESPONDENTS are entitled to immediately withdraw the amounts
in the trust accounts.
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LBP and DAR contends that there is a distinction between the deposit of
compensation under Section 16(e) of RA 6657 and payment of final
compensation as provided under Section 18). They claim that the right of the
landowner to withdraw the amount deposited in his behalf pertains only to the
final valuation as agreed upon by the landowner, the DAR and the LBP or that
adjudged by the court. It has no reference to amount deposited in the trust
account pursuant to Section 16(e) in case of rejection by the landowner because
the latter amount is only provisional and intended merely to secure possession
of the property pending final valuation. They rely on the ruling in Association of
Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform, where the SC
declared that divesting the landowners of the property even before full payment
does not violate due process in that no outright change of ownership is
contemplated.
The CA correctly held that despite the revolutionary character of
agrarian reform, this does not dispense with the settled rule that there must be
full payment of just compensation before the title to the expropriated property is
transferred, There can be no distinction in the use of deposit in Section 16(e) and
18. To withhold the right of the landowners to appropriate the amounts
already deposited in their behalf as compensation for their properties
simply because they rejected the DAR's valuation, and notwithstanding that
they have already been deprived of the possession and use of such
properties, is an oppressive exercise of eminent domain.
It is unnecessary to distinguish between provisional compensation
under Section 16(e) and final compensation under Section 18 for purposes of
exercising the landowners' right to appropriate the same. The immediate effect
in both situations is the same, the landowner is deprived of the use and
possession of his property for which he should be fairly and immediately
compensated.

4. Land Bank vs. Heir of Vda. de Arieta (2010)

FACTS
Vda. De Arieta owned a 37.1 hectare agricultural land in Kapalong Davao
del Norte. Around 15 ha of the property was covered by RA6657 through the VOS
scheme, when ARIETA offered to sell the said property to DAR for P2M/hectare.
But, Land Bank valued and offered just P76.4k/hectare for the property or Php
1.1M, which it deposited in the account of ARIETA in cash and in bonds as
provisional compensation for the acquisition
Administrative proceedings to fix the just compensation were then
undertaken by the DARAB, which fixed the same at Php 686k/hectare or Php
10.3M. LBP filed a motion for reconsideration but was denied. It then sought
judicial determination of the just compensation before the Special Agrarian Court
in Tagum City.
ARIETA also filed a Motion for Delivery of the Initial Valuation praying
that LBP be ordered to deposit the DARAB determined amount of Php 10.3M in
accordance with the ruling LBP v. CA & Yap.
LBP contends that the amount of the deposit should only be the initial
valuation. The SAC ordered that the amount determined by DARAB be deposited.
LBP appealed to the CA which dismissed the petition upholding the SAC decision.
According to the CA, Section 16 (e) was worded such that reference to the word
deposit was after conducting administrative proceedings by the DARAB of just
compensation.
LBP contends that this interpretation will unduly hamper the execution
of the CARP as the determination of the deposit is dependent upon the decision of
the DARAB and not the provisional determination of LBP.

ISSUE
WON the deposit referred to in Section 16(a) only refers to the amount
determined by the DARAB after conducting administrative proceedings to fix just
compensation

HELD
LBP is correct. The CA made strained interpretation of Section 16. Section
16(e) should be read to make the precondition of the States taking of possession
of the landowners property and the cancellation of the landowners title:
(1) payment of the compensation (if the landowner already accepts the
offer of the DAR/LBP) or
(2) deposit of the provisional compensation (if the landowner rejects or
fails to respond to the offer of the DAR/LBP).
The CARP Law conditions the transfer of possession and ownership of the
land to the government on receipt by the landowner of the corresponding
payment or the deposit of the compensation in cash or LBP bonds with an
accessible bank.
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It was thus erroneous for the CA to conclude that the provisional
compensation required to be deposited as provided in Section 16 (e) is the sum
determined by the DARAB/PARAD/RARAD in a summary administrative
proceeding merely because the word deposit appeared for the first time in the
sub-paragraph immediately succeeding that sub-paragraph where the
administrative proceeding is mentioned (sub-paragraph d). The construction
made by the CA would unduly hamper the land redistribution process.
Under the law, the LBP is charged with the initial responsibility of
determining the value of lands placed under land reform and the compensation to
be paid for their taking.
[12]
Once an expropriation proceeding or the acquisition of
private agricultural lands is commenced by the DAR, the indispensable role of LBP
begins. EO No. 405, issued on June 14, 1990, provides that the DAR is required to
make use of the determination of the land valuation and compensation by the LBP
as the latter is primarily responsible for the determination of the land valuation
and compensation. In fact, the LBP can disagree with the decision of the DAR in
the determination of just compensation, and bring the matter to the RTC
designated as SAC for final determination of just compensation.
The amount of offer which the DAR gives to the landowner as
compensation for his land, as mentioned in Section 16 (b) and (c), is based on the
initial valuation by the LBP.
[14]
This then is the amount which may be accepted or
rejected by the landowner under the procedure established in Section
16. Perforce, such initial valuation by the LBP also becomes the basis of the
deposit of provisional compensation pending final determination of just
compensation, in accordance with sub-paragraph (e).