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April 7, 2009
584 SCRA 342

Respondent Carolina Vda. de Abello (Carolina) is the widow of the late
Eliseo Abello, while the rest of the respondents are their children.
Respondents are the owners of a parcel of land covered by Transfer
Certificate of Title (TCT) No. NT-55863, containing an area of 12.1924
hectares, situated at Brgy. Sto. Niño 3rd, San Jose City. In a letter dated
March 6, 2000 addressed to a certain Dalmacio Regino, thru Eliseo Abello,
the Land Valuation and Landowner’s Compensation Office III of the Land
Bank of the Philippines (LBP) informed the respondents that 10.3476
hectares of the their property have been placed under the government’s
Operation Land Transfer and that the assessed compensation for the land’s
expropriation was P146,938.54. Using the guidelines for just compensation
embodied in Presidential Decree No. 27 (PD 27) and implemented in
Executive Order No. 228 (EO 228), and taking into consideration the
Government Support Price (GSP) for one cavan of 50 kilos palay in October
21, 1972 which was P35.00, the Department of Agrarian Reform (DAR) and
the LBP computed the value of the 10.3476 hectare land at P40,743.66.
Based on DAR Administrative Order No. 13 (DAR AO 13), series of 1994, a 6%
increment in the amount of P106,194.88 was added to the original valuation.
Subsequently, respondents filed a Petition for Just Compensation before the
Special Agrarian Court (SAC), Regional Trial Court, Branch 33, Guimba, Nueva
Ecija, which petition was later docketed as Special Agrarian Case No. 1193-G.
Respondents alleged that they are the owners of an agricultural land
covered by TCT No. NT-55863 consisting of 12.1924 hectares situated at
Barangay Sto. Niño 3rd, San Jose City, their ownership being evidenced by a
deed of absolute sale executed in favor of the spouses Eliseo Abello and
Carolina Abello by the registered owner, Eleuteria Vda. de Ignacio; that
10.3476 hectares of the aforesaid land was placed under Operation Land
Transfer by the government; that the defendant LBP fixed the value of their
land at P145,938.54; that their land yields an average harvest of 120 cavans
of palay per hectare per cropping; that the prevailing purchase price per
hectare in the area ranges from P300,000.00 to P400,000.00 per hectare;
and that the petitioners are willing to sell aforesaid landholding for
P350,000.00 per hectare.16 Ultimately, they prayed, among other things, that

It is four (4) kilometers away from the city proper of San Jose City and traversed by a feeder road.66. that the government support price in 1972 per cavan of palay was P35. that LBP reviewed the claim and found the same in order.000 per hectare or a total of P2. the total compensation due the landowner is P146.743. The topography is generally flat and there is a creek (Linamuyak Creek) near the landholdings where farmer-beneficiaries can derive water. Thereafter. The landholding is classified as rice land. Fixing the just compensation for plaintiffs’ 10.00 per hectare. Held: .00.3426 hectares covered.18 LBP prayed that the said valuation be adopted by the SAC or that it be judicially determined in accordance with law and jurisprudence. that the subject landholding was valued at P40. LBP alleged that the said landholding was under Operation Land Transfer by the DAR. hence.the just compensation for the subject property be fixed in the amount of not less than P4.938. the undersigned believes that the compensation of plaintiff's landholdings with an aggregate area of 10. that it was endorsed to the LBP for payment in November 1994. On July 26. the landholding is artificially irrigated.267.3476 hectares situated at Barangay Sto.000. and was valued in accordance with PD 27 and EO 228. Nueva Ecija provincial highway. that the average gross production (AGP) was determined to be 45 cavans per hectare. Based from the foregoing considerations.743. Niño 3rd. the SAC that the landholdings of the plaintiff has an aggregate area of 10. There are also water pumps installed. that in addition to the amount of P40.54. The average gross harvest ranges from 100 to 110 cavans per hectare. There is electricity in the site.D.00.3476 hectares is P200.17 Among other things. It is accessible to all kinds of transportation.66 for the 10.068. NO. Which the CA affirmed the decision of SAC. 27 of the cover land.00. 2002.O. LBP filed its Answer. Issue: Whether or not the SAC can disregard the formula prescribed under P. San Jose City.520. the price obtaining at that time.D. It is along the San Jose City-Lupao. hence.342 hectare land at P200. DAR AO 13 provides for an incremental increase of 6% compounded annually. 27& E. 228 in fixing the just compensation of P.340.

Inc. among other lands. was enacted to promote social justice to the landless farmers and provide "a more equitable distribution and ownership of land with due regard to the rights of landowners to just compensation and to the ecological needs of the nation. and not PD 27 or EO 228. or RA 6657. shall have suppletory effect. will comprise phase one of the acquisition plan and distribution program. v. full and ample.D. Section 75 of RA 6657 expressly states that the provisions of PD 27 and EO 228 and 229. and other laws not inconsistent with RA 6657. and not PD 27 and EO 228. is especially imperative considering that just compensation should be the full and fair equivalent of the property taken from its owner by the expropriator. conformably to the constitutional requirement.The SC ruled that the Comprehensive Agrarian Reform Law (CARL). No. In Land Bank of the Philippines v. thus: It would certainly be inequitable to determine just compensation based on the guideline provided by PD 27 and EO 228 considering the DAR’s failure to determine the just compensation for a considerable length of time. substantial. the Court held that it is a recognized rule that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of just compensation. however. including other lands of the public domain suitable for agriculture. In Association of Small Landowners in the Philippines. The Court further held that: It is true that P. 27 expressly ordered the emancipation of tenant-farmer as [of] October 21. Secretary of Agrarian Reform. the equivalent being real." Section 4 of RA 6657 provides that the CARL shall cover all public and private agricultural lands. 1972 and declared that he shall "be deemed the owner" of a portion of land consisting of a family-sized farm except that "no title to the land owned by him was to be actually issued to him unless and until he had become a full-fledged member of a duly recognized farmer’s cooperative.37 the Court held that the determination of just compensation should be in accordance with RA 6657. that full payment of just compensation also had to be made first." It was understood. That just compensation should be determined in accordance with RA 6657. Natividad. Section 7 provides that rice and corn lands under PD 27." .

The SAC correctly determined the amount of just compensation due to respondents in accordance with. For years. they have not received just compensation therefor. its proximity from the city proper. such noble purpose should not trample on the landowners’ right to be fairly and justly compensated for the value of their property. the SAC and the CA committed no reversible error when it ruled that it is the provisions of RA 6657 that is applicable to the present case. and the prevailing value of the lands in the vicinity. . In sum. and guided by. yet to date. Hence. The SAC arrived at the just compensation for respondents’ property after taking into consideration the commissioners’ report on the nature of the subject landholding. its use. Although the purpose of PD 27 was the emancipation of tenants from the bondage of the soil and transferring to them the ownership of the land they till. it is bordering on absurdity.The determination of the proper valuation of the land upon any other basis would not only be unjust. average gross production. respondents have been deprived of the use and enjoyment of their landholding. the petition is denied. RA 6657.