LANDBANK OF THE PHILIPPINES v.

LIVIOCO

G.R. No. 170685 | September 22, 2010 | DEL CASTILLO

By: Karlos Hizon

Doctrine Section 17, RA 6657

Enrique Livioco was the registered owner of a sugarland located in Mabalacat,

Pampanga. Sometime between 1987 and 1988, Livioco offered his sugarland to the DAR
for acquisition. The voluntary-offer-to-sell form he submitted indicated that his property
is adjacent to residential subdivisions and an international paper mill. The DAR referred
Livioco's offer to the Land Bank of the Philippines for valuation. Livioco was then
informed of the valuation and that the cash portion of the claim proceeds have been
"kept in trust pending his submission of ownership documents." It appears, however, that
Livioco did not act upon the notices given by both agencies. LBP issued a certification
to the Register of Deeds of Pampanga as compensation for Livioco's sugarland.

It was only after two years that Livioco requested for a revaluation of the compensation
on the ground that it has already appreciated from the time it was offered for sale. The
FACTS request was denied by the Regional Director Antonio Nuesa on the ground that there was
already a perfected sale. The DAR proceeded to take possession of Livioco's property.
The DAR awarded Certificates of Land Ownership Award (CLOAs) covering Livioco's
property to 26 farmer-beneficiaries. Livioco filed separate complaints to cancel the
CLOAs and to recover his property but the same proved to be futile. Unable to recover
his property but unwilling to accept what he believes is an outrageously low valuation of
his property, Livioco filed for a determination of just compensation against the DAR,
LB, and CLOA holders before the RT of Angeles City. He maintained that the area
where his property is located has become predominantly residential, hence, he should be
paid for his property's value as such. To prove that his property is residential, Livioco
presented a certification from the Office of Municipal Planning and Development
Coordinator of the Mabalacat, Pampanga that, per zoning ordinance, Livioco's land is
located in an area where the dominant land use is residential.

ISSUE Whether or not the compensation for respondent’s property is in accordance with the
law.
 For purposes of just compensation, the fair market value of an expropriated property is
determined by its character and price at the time of taking. There are three important
concepts in this definition of taking - the character of the property, its price, and the time
of actual taking.

The lower courts erred in ruling that the character or use of the property has changed
from agricultural to residential because there is no allegation or proof that the property
was approved for conversion to other uses by the DAR. it is the DAR that is mandated
by law to evaluate and to approve land use conversion to prevent fraudulent evasion
from the agrarian reform coverage. Reclassification and plans by the local governments
do not ipso facto convert an agricultural property to residential, commercial or industrial.
In the absence of approval for conversion from the DAR or actual expropriation by the
LGU, the character of respondent's property has not ceased to be agricultural and should
be valued as such.

The trial and appellate courts also erred in disregarding Sec 17 of RA 6657 in their
determination of iust compensation. The trial court revealed the importance of said
RULING section and recognized insufficiency of evidence to arrive at a just compensation;
however, it still proceeded to rule on the case without receiving such relevant evidence.
The trial court, as affirmed by the CA, ruled in favour of the respondent based on
preponderance of evidence, regardless of the fact the evidence presented was not
relevant to the factors mentioned in Sec 17 of RA 6657 namely, 1) cost of acquisition, 2)
nature of the property, 3) current value of like properties, and 4) actual use and income
of property.

The valuation of the lower court is not acceptable for irrelevant evidence; however, the
valuation of LBP is also not acceptable for lack of proper substantiation. Since both
parties failed to adduce evidence of the property's value as an agricultural land at the
time of the taking, it is premature for the Court to make a final decision on the matter.
Not being a trier of facts, the Court cannot also receive new evidence from the parties to
aid in the resolution of the case. Thus, the case must be remanded to the trial court for
reception of evidence and determination of just compensation in accordance with Sec 17
of RA 6657.
 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
assessments made by government assessors shall be considered. The social and
NOTES
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.