You are on page 1of 2

1. 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 ma kes 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 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.