Quismundo vs CA

Facts:

private respondents, as tenants of petitioner, filed a complaint with the trial

court praying that their relationship with petitioner be changed from share
tenancy to a leasehold system,
petitioner filed a motion to dismiss on the ground of lack of cause of action
since the law that should allegedly govern the relationship of the parties is
Act No. 4115, as amended by Commonwealth Act No. 271, and not Republic
Act No. 3844, as amended
It is the contention of petitioner that the Regional Trial Court of Angeles City
has no jurisdiction to try the case at bar considering that the exclusive
original jurisdiction to adjudicate agrarian cases has already been vested in
the Department of Agrarian Reform (DAR) by Executive Order No. 229, as
amended by Republic Act No. 6657.
Issue: Whether or not the RTC of Angeles City has juridction
Held: NO.

EO 229, vests in the Department of Agrarian Reform quasi-judicial powers to

determine and adjudicate agrarian reform matters.
But PD 946 invested the courts of agrarian relations with original exclusive
jurisdiction over cases and questions involving rights granted and obligations
imposed by presidential issuances promulgated in relation to the agrarian
reform program.
Under EO 229, the regional trial courts were divested of their general
jurisdiction to try agrarian reform matters. The said jurisdiction is now vested
in the Department of Agrarian Reform.
Thus, in the case at bar, the Regional Trial Court of Angeles City, at the time
private respondents filed their complaint, was already bereft of authority to
act on the same.
Sections 56 and 57 thereof provide for the designation by the Supreme Court
of at least one (1) branch of the regional trial court within each province to
act as a special agrarian court.
o The said special court shall have original and exclusive jurisdiction only
over petitions for the determination of just compensation to
landowners and the prosecution of criminal offenses under said Act.
Said provisions thus delimit the jurisdiction of the regional trial
court in agrarian cases only to these two instances.
Tangub vs CA
Facts:

Rufina Tangub and her husband, Andres, now deceased, filed with the
Regional Trial Court of Lanao del Norte in March, 1988, "an agrarian case for
damages by reason of the(ir) unlawful dispossession . . .was tenants from the
landholding" owned by the Spouses Domingo and Eugenia Martil.
respondent Judge Felipe G. Javier, Jr. dismissed the complaint. 3 He opined
that by virtue of Executive Order No. 229, jurisdiction of the Regional Trial
Court over agrarian cases had been transferred to the Department of
Agrarian Reform
The petitioner Rufina Vda. de Tangub, now widowed, is once again before this
Court, contending that the Trial Court's "order of dismissal of August 26,
1988, and the decision of the Honorable Court of Appeals affirming it, are
patently illegal and unconstitutional" because they deprive "a poor tenant
access to courts and directly violate R.A. 6657, PD 946, and Batas Bilang
129."

Issue: The jurisdiction of the Regional Trial Court, acting as a special agrarian court,
in the light of Executive Orders Numbered 129-A and 229 and Republic Act No. 6657
Held: Petition is without merit

The Regional Trial Courts have not, however, been completely divested of
jurisdiction over agrarian reform matters. Section 56 of RA 6657, on the other
hand, confers "special jurisdiction" on "Special Agrarian Courts," which are
Regional Trial Courts designated by the Supreme Court at least one (1)
branch within each province
o The RTC can still
Entertain petitions for determination of just compensation
Prosection of criminal offenses
The Regional Trial Court of Iligan City was therefore correct in dismissing
Agrarian Case No. 1094. It being a case concerning the rights of the plaintiffs
as tenants on agricultural land, not involving the "special jurisdiction" of said
Trial Court acting as a Special Agrarian Court.
o it clearly came within the exclusive original jurisdiction of the
Department of Agrarian Reform, or more particularly, the Agrarian
Reform Adjudication Board, established precisely to wield the
adjudicatory powers of the Department.
Ualat vs Sabio
Facts:

Complainant Sabio claims that he is an agricultural lessee of an agricultural

land consisting of 4.7 hectares owned by Leonardo Coma. Complainant Ualat,
on the other hand, alleges that he is Sabios caretaker.
o Filed a complaint for recovery of possession against the landowner and
his brother
the DARAB ruled in favor of complainant Sabio declaring that the right of the
complainant as the tenant-tiller to peaceful possession and cultivation should
not be disturbed.
On November 5, 1990, however, respondent Judge rendered a decision [4] in
favor of the landowner ordering the complainants, among others, to vacate
the property.
Complainants now contend that, notwithstanding knowledge of the
Department Agrarian Reform (DAR) resolution, and the fact that Civil Case
No. 827 falls within the exclusive jurisdiction of the DAR
Issue: Whether or not the DAR has jurisdiction in this case
Held: YES. We agree with the court administrator

this is an administrative case where the issue is not whether a motion to

dismiss the complaint could prosper. The issue is whether respondent judge
properly comported himself in the face of the obvious matters brought before
him.
As can be readily seen from the answer filed by complainants Sabio and Ualat
in the civil case, they alleged the existence of an agrarian tenancy
relationship between themselves and the landowner.
At that point, he ought to have realized that there existed a genuine issue
involving agricultural tenancy among the parties with respect to the subject
property.
Knowledge of existing agrarian legislation and prevailing jurisprudence on
the subject, together with an ordinary degree of prudence, would have
prompted respondent Judge to refer the case to the DAR for preliminary
determination of the real nature of the parties relationship, as required by law
The last thing he should have done was to proceed to take cognizance of the
case in the absence of such referral.
Heirs of Rey Santos vs CA
Facts:

The subject of the controversy is a parcel of land in Parulan, Plaridel, Bulacan

which was levied on execution by the Municipal Trial Court of Plaridel, Bulacan
on October 24, 1989. In accordance with said levy on execution, the subject
land was sold at public auction on September 20, 1990 with Herman Rey
Santos, now substituted by his heirs represented by his widow Arsenia Garcia
Vda. de Santos, as the sole bidder for P34,532.50.
Santos registered the Deed of Sale with the Register of Deeds of Bulacan on
October 15, 1990, after private respondent Exequiel Garcia failed to exercise
his right of redemption within the reglementary period.
private respondent filed a Petition for Injunction and Damages with an
application for the issuance of a preliminary injunction with the Department
of Agrarian Reform Adjudication Board (DARAB)
CA ruled that the PARAD has jurisdiction over the ancillary matter/s raised by
intervenor in DARAB Case No. 369-BUL '92 despite the fact that the PARAD
itself has admitted involvement of question of ownership between the original
parties and has indefinitely suspended the principal/main case pending the
outcome of the issue of ownership at the Regional Trial Court of Malolos
Issue: Whether or not the CA is correct
Held: NO. Petition has merit.

Agrarian Dispute refers to any controversy relating to tenurial arrangements,

whether leasehold, tenancy, stewardship or otherwise, over lands devoted to
agriculture, including disputes concerning farmworkers associations or
representation of persons in negotiating, fixing, maintaining, changing or
seeking to arrange terms or conditions of such tenurial arrangements.
o includes any controversy relating to compensation of lands acquired
under this Act and other terms and conditions of transfer of ownership
from landowners to farmworkers, tenants and other agrarian reform
beneficiaries, whether the disputants stand in the proximate relation of
 farm operator and beneficiary, landowner and tenant, or lessor and
lessee.
Clearly, no agrarian dispute is involved in this case. In fact, both are
contending parties for the ownership of the subject property.
Petitioners and private respondent have no tenurial, leasehold, or any
agrarian relations whatsoever that could have brought this controversy under
the ambit of the agrarian reform laws. Consequently, the DARAB has no
jurisdiction over the controversy and should not have taken cognizance of
private respondent's petition for injunction in the first place.
Significantly, DARAB admitted that the issue before the Regional Trial Court
was one of ownership.
The court rules that DARAB cannot take cognizance of Pantaleon Antonio's
motion for intervention considering that DARAB had no jurisdiction and the
issue of ownership is involved.

Corpin vs Vivar
Facts:

Petitioner is the registered owner of a parcel of land located at Tabang,

Guiguinto, Bulacan
Private respondent Amor S. Vivar is in possession of said parcel of land.
Petitioner filed for an ejectment case against respondent
o The latter refused to vacate the said lot, claiming that he is a tenant of
petitioner. In his Answer with Motion to Dismiss, [4] private respondent
averred that the municipal trial court had no jurisdiction over the case
since it involved a landlord-tenant relationship. Hence, the same
should have been filed with the Department of Agrarian Reform
instead.
We find that the Court of Appeals was correct in holding that the municipal
trial court should not have disregarded private respondents Answer but
should have proceeded to determine whether or not it had jurisdiction over
the subject matter of the case:
Issue: Whether or not the municipal trial courts has jurisdiction over the case
Held:

In the case at bar, however, we do not find the documents submitted by the
parties as sufficient to have enabled the Regional Trial Court to thoroughly
resolve the issue of whether or not the municipal trial court acquired
jurisdiction over the subject matter of the case.
The Regional Trial Court should not have considered the aforementioned in
rendering its Decision since said documents were only presented before it on
appeal, and were not previously filed with the municipal trial court in the
original case.
 Considering the foregoing, it is clear that there is a need to conduct a hearing
whereby both parties may present evidence which may shed light on the
issue of the municipal trial courts jurisdiction over the case.
Consequently, the Regional Trial Courts finding that there exists a landlord-
tenant relationship between petitioner and respondent, which was based on
the documents attached by private respondent to his memoranda in the
Regional Trial Court but not presented to the municipal trial court, must be
set aside due to insufficiency of evidence.

DAR vs Cuenca
Facts:

All controversies on the implementation of the Comprehensive Agrarian

Reform Program (CARP) fall under the jurisdiction of the Department of
Agrarian Reform (DAR), even though they raise questions that are also legal
or constitutional in nature. All doubts should be resolved in favor of the DAR,
since the law has granted it special and original authority to hear and
adjudicate agrarian matters.
Private respondent Roberto J. Cuenca is the registered owner of a parcel of
land containing an area of 81.76 hectares
Noe Fortunado, Municipal Agrarian Reform Officer (MARO) of La Carlota City
issued and sent a NOTICE OF COVERAGE to private respondent Cuenca
placing the above-described landholding under the compulsory coverage of
R.A. 6657
private respondent Cuenca filed with the Regional Trial Court, Branch 63, La
Carlota City, a complaint against Noe Fortunado and Land Bank of the
Philippines for Annulment of Notice of Coverage and Declaration of
Unconstitutionality of E.O. No. 405
Cuenca alleged that the implementation of CARP in his landholding is no
longer with authority of law
 Cuenca prayed that the Notice of Coverage be declared null and void ab
initio and Executive Order No. 405 dated 14 June 1990 be declared
unconstitutional.
Issue: Whether or not the issue of exclusion of land from coverage from CARP is an
agrarian reform matter
Held: Petition has merit

In its bare essentials, petitioners argument is that private respondent, in his

Complaint for Annulment of the Notice of Coverage, is asking for the
exclusion of his landholding from the coverage of the Comprehensive
Agrarian Reform Program (CARP).
According to the DAR, the issue involves the implementation of agrarian
reform, a matter over which the DAR has original and exclusive jurisdiction,
pursuant to Section 50 of the Comprehensive Agrarian Reform Law (RA 6657).
On the other hand, private respondent maintains that his Complaint assails
mainly the constitutionality of EO 405. He contends that since the Complaint
raises a purely legal issue, it thus falls within the jurisdiction of the RTC.
We do not agree with Private respondent
Two basic rules have guided this Court in determining jurisdiction in these
cases. First, jurisdiction is conferred by law. [8] And second, the nature of the
action and the issue of jurisdiction are shaped by the material averments of
the complaint and the character of the relief sought.
Clearly, the main thrust of the allegations is the propriety of the Notice of
Coverage
Plainly then, the propriety of the Notice relates to the implementation of the
CARP, which is under the quasi-judicial jurisdiction of the DAR.
Thus, the DAR could not be ousted from its authority by the simple
expediency of appending an allegedly constitutional or legal dimension to an
issue that is clearly agrarian.

Magno vs Sotto
Facts:

Petitioner is the owner of a 5.3 hectare lot (lot) which is a portion of an

agricultural land identified as Lot No. 593 situated in Brgy. San Fernando,
Cabiao, Nueva Ecija. Petitioner acquired the lot through a Deed of Sale
executed by Talens on 28 July 1972, but the sale was only registered on 3
September 1986. At the time of the sale, Gonzalo Francisco and Manuel
Lazaro tenanted the land and their separate areas of tillage were 2.8 and 2.5
hectares, respectively.

In the leasehold contract entered into by petitioner and respondents, Manuel

Lazaro was obliged to pay a lease rental of 35 cavans during the regular
season, and 20 cavans during dayatan cropping season. Gonzalo Francisco,
 on the other hand, was required to pay a lease rental of 35 cavans during the
regular season and 25 cavans during the cropping season.
Respondents stopped paying the rentals despite petitioner's demands,
arguing that that they have fully paid the price of the lot under the Barangay
Committee on Land Productions (BCLP) valuation. Respondents were issued
their respective Emancipation Patents (EP).
Thus, petitioner filed with PARAD of Cabanatuan City a complaint for
ejectment and collection of lease rentals against respondents. At the time of
filing of the complaint, respondent Francisco and respondent Lazaro were
already in arrears of 155 cavans and 145 cavans, respectively.
The PARAD of Cabanatuan City dismissed the case for lack of merit. On
appeal, the DARAB reversed the PARADs decision. On further appeal,
however, the CA reversed the DARAB ruling and reinstated the decision of
PARAD. The CA stated that the EPs are public documents and are prima facie
evidence of the facts stated therein. The EPs are presumably issued in the
regular performance of an official duty. The CA ruled that petitioner has not
presented any evidence showing that the issuance of the EPs was tainted
with defects and irregularities; hence, they are entitled to full faith and credit.
Petitioner points out that the CA disregarded a significant fact that the land
valuation came after the issuance of the EPs; hence, the issuance of the EPs
was tainted with irregularity because it was violative of Section 2 of PD 266.

ISSUE: Whether or not unregistered EPs issued to agricultural lessees which appear
to be irregular on their face can defeat the landowner's rights to agricultural
leasehold rentals.

HELD: No. CA Decision Set Aside

In Department of Agrarian Reform v. Abdulwahid, the Court, quoting Centeno

v. Centeno, held:

The DAR is vested with the primary jurisdiction to determine and adjudicate
agrarian reform matters and shall have the exclusive jurisdiction over all
matters involving the implementation of the agrarian reform program.
The DARAB has primary, original and appellate jurisdiction "to determine and
adjudicate all agrarian disputes, cases, controversies, and matters or
incidents involving the implementation of the Comprehensive Agrarian
Reform Program under RA No. 6657, E.O. Nos. 229, 228 and 129-A, R.A. No.
3844 as amended by R.A. No. 6389, P.D. No. 27

It is undisputed that petitioner and respondents have an established tenancy

relationship, such that the complaint for collection of back rentals and
ejectment is classified as an agrarian dispute and under the jurisdiction of the
PARAD and thereafter by the DARAB.
 o However, in view of the conflicting claims where petitioner asserted
ownership over the lot and respondents emphasized that the lot is
subject to OLT coverage, there is a need to ascertain if the lot is under
the agrarian reform program.
o Since the classification and identification of landholdings for coverage
under the agrarian reform program are Agrarian Law Implementation
cases, the DAR Secretary should first resolve this issue.

Verily, there is an established tenancy relationship between petitioner and

respondents in this case.
o An action for Ejectment for Non-Payment of lease rentals is clearly an
agrarian dispute, cognizable at the initial stage by the PARAD and
thereafter by the DARAB. But issues with respect to the retention rights
of the respondents as landowners and the exclusion/exemption of the
subject land from the coverage of agrarian reform are issues not
cognizable by the PARAD and the DARAB, but by the DAR Secretary
because, as aforementioned, the same are Agrarian Law
Implementation (ALI) Cases.

Therefore, the PARAD of Cabanatuan City had no authority to render a

decision declaring the lot under OLT coverage.
o In fact, when the case was appealed, the DARAB acknowledged that it
had no jurisdiction on the OLT coverage.
o Respondents themselves admitted in their Memorandum that the DAR
has not submitted the result of its administrative determination of the
lot to the DARAB. It is therefore essential that the DAR Secretary
should first resolve the issue on the lots inclusion or exclusion from OLT
coverage before a final determination of this case can be had.
Proof necessary for the resolution of the issues on OLT coverage and
petitioners right of retention should be introduced in the proper forum. The
Office of the DAR Secretary is in a better position to resolve these issues
being the agency lodged with such authority since it has the necessary
expertise on the matter.

Association of Small Landholders of the Philippines vs Secretary of

Agrarian Reform
Facts:
 These are four consolidated cases questioning the constitutionality of the
Comprehensive Agrarian Reform Act (R.A. No. 6657 and related laws i.e.,
Agrarian Land Reform Code or R.A. No. 3844).
Article XIII of the Constitution on Social Justice and Human Rights includes a
call for the adoption by the State of an agrarian reform program. The State
shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farmworkers, who are landless, to own directly or
collectively the lands they till or, in the case of other farmworkers, to receive
a just share of the fruits thereof. RA 3844 was enacted in 1963. P.D. No. 27
was promulgated in 1972 to provide for the compulsory acquisition of private
lands for distribution among tenant-farmers and to specify maximum
retention limits for landowners. In 1987, President Corazon Aquino issued E.O.
No. 228, declaring full land ownership in favor of the beneficiaries of PD 27
and providing for the valuation of still unvalued lands covered by the decree
as well as the manner of their payment. In 1987, P.P. No. 131, instituting a
comprehensive agrarian reform program (CARP) was enacted; later, E.O. No.
229, providing the mechanics for its (PP131s) implementation, was also
enacted. Afterwhich is the enactment of R.A. No. 6657, Comprehensive
Agrarian Reform Law in 1988. This law, while considerably changing the
earlier mentioned enactments, nevertheless gives them suppletory effect
insofar as they are not inconsistent with its provisions.
Petitioners wanted to be exempted from agrarian reform program because
they claim to belong to a different class.
Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27,
EO 228, and 229) on the ground that these laws already valuated their lands
for the agrarian reform program and that the specific amount must be
determined by the Department of Agrarian Reform (DAR). Manaay averred
that this violated the principle in eminent domain which provides that only
courts can determine just compensation. This, for Manaay, also violated due
process for under the constitution, no property shall be taken for public use
without just compensation.
Issue: Whether or not just compensation, under the agrarian reform program, must
be in terms of cash.
Held: No.

Money as [sole] payment for just compensation is merely a concept

in traditional exercise of eminent domain.
The agrarian reform program is a revolutionary exercise of eminent domain.
The program will require billions of pesos in funds if all compensation have to
be made in cash if everything is in cash, then the government will not have
sufficient money hence, bonds, and other securities, i.e., shares of stocks,
may be used for just compensation.
NAPOCOR vs Chiong
Facts:

Petitioner is a government owned and controlled corporation, created and

existing pursuant to Republic Act No. 6395, [3] as amended, for the purpose of
undertaking the development of hydroelectric power,
o They are empowered with eminent domain
It sought the acquisition of an easement of right-of-way and certain portions
of agricultural lands owned by Igmedio and Liwayway Chiong and the Heirs of
Agrifina[4] Angeles
Respondents pointed out that NPC had already entered and taken possession
of a portion of their realty with an area of 4,000 square meters, more or less
(Lot A) and wanted to occupy another 4,000 square meters of the adjacent
property (Lot B)
CA held that full market value should be paid and not the easement fees

Issue: Whether or not the just compensation is the full market value
Held: It is the full market value

The elements of due process are well established, viz:

o (1) There must be a court or tribunal clothed with judicial power to
hear and determine the matter before it;
o (2) Jurisdiction must be lawfully acquired over the person of the
defendant or property which is the subject of the proceedings;
o (3) The defendant must be given an opportunity to be heard; and
o (4) Judgment must be rendered upon lawful hearing.
The duty of the court in considering the commissioners report is to satisfy
itself that just compensation will be made to the defendant by its final
judgment in the matter, and in order to fulfill its duty in this respect, the court
will be obliged to exercise its discretion in dealing with the report as the
particular circumstances of the case may require.
Trial court may accept the report in part and reject it in part; and it may make
such order or render such judgment as shall secure to the plaintiff the
property essential to the exercise of his right of expropriation, and to the
defendant just compensation for the property so taken
In eminent domain or expropriation proceedings, the general rule is that the
just compensation to which the owner of condemned property is entitled to is
the market value.[22] Market value is that sum of money which a person
desirous but not compelled to buy, and an owner willing but not compelled to
sell, would agree on as a price to be given and received therefor
o The rule is modified, where only a part of a certain property is
expropriated. In such a case the owner is not restricted to
compensation for the portion actually taken. In addition to the market
value of the portion taken, he is also entitled to recover for the
consequential damage, if any, to the remaining part of the property. At
 the same time, from the total compensation must be deducted the
value of the consequential benefits.
In fixing the valuation at P500.00 per square meter, the Court of Appeals
noted that the trial court had considered the reports of the commissioners
and the proofs submitted by the parties. This included the fair market value
of P1,100.00 per square meter proffered by the respondents.[25] This valuation
by owners of the property may not be binding upon the petitioner or the
court, although it should at least set a ceiling price for the compensation to
be awarded.[26]
The trial court found that the parcels of land sought to be expropriated are
agricultural land, with minimal improvements.
It is the nature and character of the land at the time of its taking that is the
principal criterion to determine just compensation to the landowner.
Hence, the trial court accepted not the owners valuation of P1,100 per square
meter but only P500 as recommended in the majority report of the
commissioners.
In finding that the trial court did not abuse its authority in evaluating the
evidence and the reports placed before it nor did it misapply the rules
governing fair valuation, the Court of Appeals found the majority reports
valuation of P500 per square meter to be fair.
Said factual finding of the Court of Appeals, absent any showing that the
valuation is exorbitant or otherwise unjustified, is binding on the parties as
well as this Court.
LBP vs Banal
Facts:

Spouses Vicente and Leonidas Banal, respondents, are the registered owners
of 19.3422 hectares of agricultural land situated in San Felipe, Basud,
Camarines Norte
A part of their land was compulsorily acquired by the Department of Agrarian
Reform (DAR) pursuant to Republic Act (R.A.) No. 6657.
Valued the property at 173K.
Respondents rejected the above valuation.
the trial court computed the just compensation for the coconut land
at P657,137.00 and for the riceland at P46,000.00, or a total of P703,137.00,
which is beyond respondents valuation of P623,000.00. The court further
awarded compounded interest at P79,732.00 in cash
CA upheld Trial Court

Issue: Whether or not the valuation is correct

Held: NO. Petition Granted.

under Section 1 of Executive Order No. 405 (1990), the Landbank is charged
primarily with the determination of the land valuation and compensation for
all private lands suitable for agriculture under the Voluntary Offer to Sell or
Compulsory Acquisition arrangement For its part, the DAR relies on the
determination of the land valuation and compensation by the Landbank.
Based on the Landbanks valuation of the land, the DAR makes an offer to the
landowner.[13] If the landowner accepts the offer, the Landbank shall pay him
the purchase price of the land after he executes and delivers a deed of
transfer and surrenders the certificate of title in favor of the government. [14] In
case the landowner rejects the offer or fails to reply thereto, the DAR
adjudicator[15] conducts summary administrative proceedings to determine
the compensation for the land by requiring the landowner, the Landbank and
 other interested parties to submit evidence as to the just compensation for
the land.[
Here, the RTC failed to observe the basic rules of procedure and the
fundamental requirements in determining just compensation for the property.
Firstly, it dispensed with the hearing and merely ordered the parties to
submit their respective memoranda
Secondly, the RTC, in concluding that the valuation of respondents property
is P703,137.00, merely took judicial notice of the average production
figures in the Rodriguez case pending before it and applied the same to
this case without conducting a hearing and worse, without the knowledge or
consent of the parties,
Lastly, the RTC erred in applying the formula prescribed under Executive
Order (EO) No. 228[26] and R.A. No. 3844,[27] as amended, in determining the
valuation of the property; and in granting compounded interest pursuant to
DAR Administrative Order No. 13, Series of 1994.[
o It must be stressed that EO No. 228 covers private agricultural
lands primarily devoted to rice and corn, while R.A. 3844
governs agricultural leasehold relation between the person who
furnishes the landholding and the one cultivating the land
Here, the RTC wantonly disregarded R.A. 6657, as amended, and its
implementing rules and regulations.
LBP vs Rufino
Facts:

Respondents Jose Marie M. Rufino (Rufino), Nilo M. Resurreccion

(Resureccion), Arnel M. Atanacio (Atanacio), and Suzette G. Mateo (Suzette)
are the registered owners in equal share of a parcel of agricultural land
situated in Barangay San Benon, Irosin, Sorsogon, with an area of 239.7113
hectares
o they voluntarily offered the aforesaid property to the government for
CARP coverage at P120,000 per hectare.
petitioner Department of Agrarian Reform (DAR) issued a Notice of Land
Valuation and Acquisition dated October 21, 1996 declaring that out of the
total area indicated in the title, 138.4018 hectares was subject to immediate
acquisition at a valuation of P8,736,270.40 based on the assessment of
petitioner Land Bank of the Philippines (LBP).
Respondents having found the valuation unacceptable, the matter was
referred by the provincial agrarian reform officer of Sorsogon to the DAR
Adjudication Board (DARAB) for the conduct of summary administrative
proceedings to determine just compensation
Respondents contended that LBPs valuation was not the full and fair
equivalent of the property at the time of its taking, the same having been
offered in 1989 at P120,000 per hectare.[6]
LBP countered that the property was acquired by the DAR for CARP coverage
in 1993 by compulsory acquisition and not by respondents voluntary offer to
 sell; and that it determined the valuation thereof in accordance with RA 6657
and pertinent DAR regulations.
Issue: whether the appellate court correctly upheld the valuation by the trial court
of the property on the basis of the market data approach, in disregard of the
formula prescribed by DAR AO 6-92, as amended.
Held: NO. Petition Partly meritorious

While the determination of just compensation is essentially a judicial function

which is vested in the RTC acting as a Special Agrarian Court, the Court ,
in LBP v. Banal,[20] LBP v. Celada,[21] and LBP v. Lim,[22] nonetheless
disregarded the RTCs determination thereof when, as in the present case, the
judge did not fully consider the factors specifically identified by law and
implementing rules.
The factors to determine just compensation
o LV = Land Value
o CNI = Capitalized Net Income
o CS = Comparable Sales
o MV = Market Value per Tax Declaration
The formula
o LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
In fixing the just compensation in the present case, the trial court, adopting
the market data approach merely put premium on the location of the
property and the crops planted thereon which are not among the factors
enumerated in Section 17 of RA 6657.
Not only did Commissioner Chua not consider Section 17 of RA 6657 and DAR
AO 6-92, as amended, in his appraisal of the property.
His conclusion that the market data approach conformed with statutory and
regulatory requirements is bereft of basis.
Section 17 of RA 6657 and DAR AO 6-92, as amended, are mandatory and not
mere guides that the RTC may disregard.
Commissioner Empleo testified[33] that his computations were based on DAR
Administrative Order No. 5, series of 1998. [34] This Administrative Order took
effect only on May 11, 1998, however, hence, the applicable valuation rules
in this case remain to be those prescribed by DAR AO 6-92, as amended by
DAR AO 11-94.
Finally, as reflected earlier, Commissioner Empleo did not consider in his
computation the secondary crops planted on the property
Hacienda Luisita vs PARC
Facts:

At the core of the case is Hacienda Luisita de Tarlac (Hacienda Luisita), once a
6,443-hectare mixed agricultural-industrial-residential expanse straddling
several municipalities of Tarlac and owned by Compaia General de Tabacos
de Filipinas (Tabacalera)
That the lots comprising the Hacienda Luisita shall be subdivided by the
applicant-corporation and sold at cost to the tenants, should there be any,
and whenever conditions should exist warranting such action under the
provisions of the Land Tenure Act;2
Tadecos preferred option, for, on August 23, 1988, 28 it organized a spin-off
corporation, HLI, as vehicle to facilitate stock acquisition by the farmworkers.
For this purpose, Tadeco assigned and conveyed to HLI the agricultural land
portion (4,915.75 hectares) and other farm-related properties of Hacienda
Luisita in exchange for HLI shares of stock. 29
 Pedro Cojuangco, Josephine C. Reyes, Teresita C. Lopa, Jose Cojuangco, Jr.,
and Paz C. Teopaco were the incorporators of HLI

In 1988, RA 6657 or the CARP law was passed. It is a program aimed at redistributing public
and private agricultural lands to farmers and farmworkers who are landless. One of the lands
covered by this law is the Hacienda Luisita, a 6,443-hectare mixed agricultural-industrial-
residential expanse straddling several municipalities of Tarlac. Hacienda Luisita was bought
in 1958 from the Spanish owners by the Tarlac Development Corporation (TADECO), which
is owned and/or controlled by Jose Cojuanco Sr., Group. Back in 1980, the Martial Law
administration filed an expropriation suit against TADECO to surrender the Hacienda to the
then Ministry of Agrarian Reform (now DAR) so that the land can be distributed to the
farmers at cost. The RTC rendered judgment ordering TADECO to surrender Hacienda
Luisita to the MAR.

In 1988, the OSG moved to dismiss the governments case against TADECO. The CA
dismissed it, but the dismissal was subject to the condition that TADECO shall obtain the
approval of FWB (farm worker beneficiaries) to the SDP (Stock Distribution Plan) and to
ensure its implementation.

Sec 31 of the CARP Law allows either land transfer or stock transfer as two alternative
modes in distributing land ownership to the FWBs. Since the stock distribution scheme is the
preferred option of TADECO, it organized a spin-off corporation, the Hacienda Luisita Inc.
(HLI), as vehicle to facilitate stock acquisition by the farmers.

After conducting a follow-up referendum and revision of terms of the Stock Distribution
Option Agreement (SDOA) proposed by TADECO, the Presidential Agrarian Reform Council
(PARC), led by then DAR Secretary Miriam Santiago, approved the SDP of TADECO/HLI
through Resolution 89-12-2 dated Nov 21, 1989.

From 1989 to 2005, the HLI claimed to have extended those benefits to the farmworkers.
Such claim was subsequently contested by two groups representing the interests of the
farmers the HLI Supervisory Group and the AMBALA. In 2003, each of them wrote letter
petitions before the DAR asking for the renegotiation of terms and/or revocation of the SDOA.
They claimed that they havent actually received those benefits in full, that HLI violated the
terms, and that their lives havent really improved contrary to the promise and rationale of the
SDOA.

The DAR created a Special Task Force to attend to the issues and to review the terms of the
SDOA and the Resolution 89-12-2. Adopting the report and the recommendations of the Task
Force, the DAR Sec recommended to the PARC (1) the revocation of Resolution 89-
 12-2 and (2) the acquisition of Hacienda Luisita through compulsory
acquisition scheme. Consequently, the PARC revoked the SDP of TADECO/HLI and
subjected those lands covered by the SDP to the mandated land acquisition scheme under
the CARP law. These acts of the PARC was assailed by HLI via Rule 65.

On the other hand, FARM, an intervenor, asks for the invalidation of Sec. 31 of RA 6657,
insofar as it affords the corporation, as a mode of CARP compliance, to resort to stock
transfer in lieu of outright agricultural land transfer. For FARM, this modality of distribution is
an anomaly to be annulled for being inconsistent with the basic concept of agrarian reform
ingrained in Sec. 4, Art. XIII of the Constitution.

Issue: Whether or not there is just compensation entitled to HLI

Held: YES

HLI shall be paid just compensation for the remaining agricultural land
that will be transferred to DAR for land distribution to the FWBs. We find
that the date of the "taking" is November 21, 1989, when PARC approved
HLIs SDP per PARC Resolution No. 89-12-2. DAR shall coordinate with LBP
for the determination of just compensation. We cannot use May 11, 1989
when the SDOA was executed, since it was the SDP, not the SDOA, that
was approved by PARC.
HLI is entitled to just compensation for the agricultural land that will be
transferred to DAR to be reckoned from November 21, 1989 per PARC
Resolution No. 89-12-2. DAR and LBP are ordered to determine the
compensation due to HLI.

Separate opinion of Sereno

In my Separate Opinion to the 22 November 2011 Resolution, I lament the

fact that Congress did not choose a revolutionary form of taking for agrarian
reform by allowing effective partial confiscation by not requiring payment to
the landowners at fair market value.
The FWBs of Hacienda Luisita deserve the full benefits of agrarian reform. But
with the Supreme Court consistently requiring that payment to landowners be
pegged at fair market value for all kinds of expropriation, and in the case of
agrarian reform, pegging it at the time of the notice of coverage, this same
 Court is required to be fair and observe the same rule by not unduly
discriminating against petitioner HLI.
petitioner HLI, as any other landowner, is entitled to just compensation for
their farmlands to be reckoned at the time of the actual taking of the
expropriated property.
Hence, the remand of the determination of the just compensation
due to petitioner HLI should not in any way hinder the immediate
distribution of the farmlands in Hacienda Luisita

LBP vs Celada
Facts:

Respondent Leonila P. Celada owns 22.3167 hectares of agricultural land

situated in Calatrava, Carmen, Bohol registered under TCT No. 16436, [1] of
which 14.1939 hectares was identified in 1998 by the Department of Agrarian
Reform (DAR) as suitable for compulsory acquisition under the
Comprehensive Agrarian Reform Program (CARP)
 LBP valued respondents land at P2.1105517 per square meter for an
aggregate value of P299,569.61.[2] The DAR offered the same amount to
respondent as just compensation, but it was rejected.
Issue: Whether or not there is just compensation based on the computation of
Petitioner
Held: YES. Petition granted. Property valued at 300K.

the SAC based its valuation solely on the observation that there was a patent
disparity between the price given to respondent and the other landowners.
We note that it did not apply the DAR valuation formula since according to
the SAC, it is Section 17 of RA No. 6657 that should be the principal basis of
computation as it is the law governing the matter.
Accordingly, petitioner applied the formula under A1 above since the
comparable sales factor (CS factor) was not present. As observed by the SAC
itself, respondent refused to cooperate with the local valuation office of
petitioner and did not provide the necessary data to arrive at a proper CS
factor.
In the case at bar, while respondent attempted to prove during the hearings
before the SAC, comparable sales transactions, the acquisition cost of the
property as well as its mortgage value, she failed to submit adequate
documentary evidence to support the same.
Consequently, there was nothing from which the CS factor could be
determined.
In contrast, petitioner arrived at its valuation by using available factors culled
from the Department of Agriculture and Philippine Coconut Authority, [35] and
by computing the same in accordance with the formula provided,
Under the circumstances, we find the explanation and computation of
petitioner to be sufficient and in accordance with applicable laws. Petitioners
valuation must thus be upheld.

LBP vs Soriano
Facts:

Domingo and Mamerto Soriano (respondents) are the registered owners of

several parcels of rice land situated in Oas, Albay. Out of the 18.9163
 hectares of land[3] owned by the respondents, 18.2820 hectares were placed
under the Operations Land Transfer and the CARP pursuant to Presidential
Decree No. 27[4] and Republic Act No. 6657
The LBP[6] pegged the value of 18.0491 hectares of land at P482,363.95
Not satisfied with the valuation, respondents, on 23 November 2000,
instituted a Complaint[9] for judicial determination of just compensation with
the Regional Trial Court of LegazpiCity,[1
Respondents alleged that they are entitled to an amount of not less
than P4,500,000.00 as just compensation
The SAC applied the formula prescribed under Executive Order No. 228 in
determining the valuation of the property, i.e., Land value = Average Gross
Production x 2.5 x Government Support Price. It likewise granted
compounded interest pursuant to Department of Agrarian Reform (DAR)
Administrative Order No. 13, series of 1994, as amended by DAR
Administrative Order No. 2, series of 2004.
Both parties disagreed with the trial courts valuation, prompting them to file
their respective appeals with the Court of Appeals. The appellate court,
however, affirmed the judgment of the trial court.
LBP assails the imposition of 6% interest rate on the 18.0491 hectares of lot
valued at P133,751.65. It avers that the incremental interest due to the
respondents should be computed from the date of taking on 21 October
1972, not up to full payment of just compensation but up to the time LBP
approved the payment of their just compensation claim and a
corresponding deposit of the compensation proceeds was made by
the bank
Issue: Whether or not there is just compensation
Whether or not the interest is until payment of just compensation or until deposit is
made
Held: YES. CA affirmed

The fixing of just compensation should therefore be based on the parameters

set out in Republic Act No. 6657, with Presidential Decree No. 27 and
Executive Order No. 228 having only suppletory effect
In the instant case, while the subject lands were acquired under Presidential
Decree No. 27, the complaint for just compensation was only lodged before
the court on 23 November 2000 or long after the passage of Republic Act No.
6657 in 1988. Therefore, Section 17 of Republic Act No. 6657 should be the
principal basis of the computation for just compensation
we cannot subscribe to the arguments of LBP. (regarding interest)
The concept of just compensation embraces not only the correct
determination of the amount to be paid to the owners of the land, but also
payment within a reasonable time from its taking. Without prompt payment,
compensation cannot be considered "just" inasmuch as the property owner is
made to suffer the consequences of being immediately deprived of his land
 while being made to wait for a decade or more before actually receiving the
amount necessary to cope with his loss.
Therefore, to expedite the payment of just compensation, it is logical to
conclude that the 6% interest rate be imposed from the time of taking up to
the time of full payment of just compensation.
Apo Fruits vs Land Bank
Facts:

Apo Fruits Corporation (AFC) and Hijo Plantation, Inc. (HPI), together also
referred to as petitioners, were registered owners of vast tracks of land; AFC
owned 640.3483 hectares, while HPI owned 805.5308 hectares.
AFC and HPI received separate notices of land acquisition and valuation of
their properties from the DARs Provincial Agrarian Reform Officer (PARO). At
the assessed valuation of P165,484.47 per hectare, AFCs land was
valued at P86,900,925.88, while HPIs property was valued
at P164,478,178.14. HPI and AFC rejected these valuations for being very low.
the RTC resolved the consolidated cases, fixing the just compensation for the
petitioners 1,338.6027 hectares of land[1] at P1,383,179,000.00, with interest
on this amount at the prevailing market interest rates, computed from the
taking of the properties on December 9, 1996 until fully paid, minus the
amounts the petitioners already received under the initial valuation. The RTC
also awarded attorneys fees.
The interest was placed at 12%.
Petitioner now wants to recover the interest

Issue: Whether or not petitioner can recover the interest

Held: YES. LBP failed to pay for 12 years. Kaya Malaki na talaga babayaran nila.

Second, on the merits, the petitioners are not entitled to recover interest on
the just compensation and attorneys fees because they caused the delay in
the payment of the just compensation due them;
o they erroneously filed their complaints with the DARAB when they
should have directly filed these with the RTC acting as an agrarian
court. Furthermore, the Court found it significant that the LBP
deposited the pertinent amounts in the petitioners favor within
fourteen months after the petitions were filed with the RTC.
Under these circumstances, the Court found no unreasonable delay on the
part of LBP to warrant the award of 12% interest.
While Justice Chico-Nazario admitted that the petitioners were entitled to the
12% interest, she saw it appropriate to equitably reduce the interest charges
from P1,331,124,223.05 to P400,000,000.00
While we have equitably reduced the amount of interest awarded in
numerous cases in the past, those cases involved interest that was
essentially consensual in nature, i.e., interest stipulated in signed agreements
between the contracting parties. In contrast, the interest involved in the
present case runs as a matter of law and follows as a matter of course from
the right of the landowner to be placed in as good a position as money can
accomplish, as of the date of taking.
Furthermore, the allegedly considerable payments made by the LBP to the
petitioners cannot be a proper premise in denying the landowners the
interest due them under the law and established jurisprudence. If the just
 compensation for the landholdings is considerable, this
compensation is not undue because the landholdings the owners
gave up in exchange are also similarly considerable AFC gave up an
aggregate landholding of 640.3483 hectares, while HPIs gave up
805.5308 hectares
The incomes due from these properties, expressed as interest, are what the
government should return to the petitioners after the government took over
their lands without full payment of just compensation.
In other words, the value of the landholdings themselves should be
equivalent to the principal sum of the just compensation due;
interest is due and should be paid to compensate for the unpaid
balance of this principal sum after taking has been completed. This is
the compensation arrangement that should prevail if such compensation is to
satisfy the constitutional standard of being just.
That the legal interest due is now almost equivalent to the principal to be
paid is not per se an inequitable or unconscionable situation, considering the
length of time the interest has remained unpaid almost twelve long years.
Moreover, the interest, however enormous it may be, cannot be
inequitable and unconscionable because it resulted directly from the
application of law and jurisprudence standards that have taken into
account fairness and equity in setting the interest rates due for the use or
forebearance of money.
If the LBP sees the total interest due to be immense, it only has itself to
blame, as this interest piled up because it unreasonably acted in its valuation
of the landholdings and consequently failed to promptly pay the petitioners.
Greater public interest would be served if it can contribute to the
credibility of the governments land reform program through the
conscientious handling of its part of this program.