Case Digest: Land Bank v. CA and Pascual G.R. No. 128557Dec. 29, 1999321 SCRA 629 (1999)

Land Bank v. CA and Pascual
G.R. No. 128557
Dec. 29, 1999
321 SCRA 629 (1999)

Facts:
Respondent Jose Pascual owned three (3) parcels of land located in Gattaran,Cagayan. Pursuant to PD 27 and EO 228, the DAR placed these lands under its Operation Land Transfer (OLT).
On 11 June 1992 the PARAD ruled in favor of private respondent and ordered petitioner LBP to pay private respondent a total amount of P1,961,950.00. Private respondent accepted the valuation.
Petitioner LBP having refused to comply with its obligation despite the directive of the Secretary of the DAR and the various demand letters of private respondent Jose Pascual, the latter finally filed an action for Mandamus in the Court of Appeals to compel petitioner to pay the valuation determined by the PARAD.

CA ruled in respondent’s favor.

The appellate court also required petitioner LBP to pay a compounded interest of 6% per annum in compliance with DAR Administrative Order No. 13, series of 1994.
As to its coverage, the Order states: These rules and regulations shall apply to landowners: (1) whose lands are actually tenanted as of 21 October 1972 or thereafter and covered by OLT; (2) who opted for government financing through Land Bank of the Philippines as mode of compensation; and, (3) who have not yet been paid for the value of their land.

Issue:
Whether or not  CA cannot enforce PARAD's valuation since it cannot make such determination for want of jurisdiction hence void.

Whether or not CA erred in ruling that private respondent can avail of the 6% compounded interest prescribed for unpaid landowners by Administrative Order No. 13, Series of 1994.

Held:
No. Petitioner's contention that Sec. 12, par. (b), of PD 946, which provides that the valuation of lands covered by PD 27 is​under the exclusive jurisdiction of the Secretary of Agrarian Reform, is still in effect cannot be sustained. It seems that the Secretary of Agrarian Reform erred in issuing Memorandum Circular No. I, Series of 1995, directing the DARAB to refrain from hearing valuation cases involving PD 27 lands. For on the contrary, it is the DARAB which has the authority to determine the initial valuation of lands involving agrarian reform although such valuation may only be considered preliminary as the final determination of just compensation is vested in the courts.

​YES. At first glance it would seem that private respondent’s lands are indeed covered by AO No. 13. However, Part IV shows that AO No. 13 provides a fixed formula for determining the Land Value (LV) and the additional interests it would have earned. In the decision of PARAD, however, the Land Value (LV) of private respondent’s property was computed by using the GSP for 1992, which is P300.00 per cavan of palay and P250.00 per cavan of corn.
The purpose of AO No. 13 is to compensate the landowners for unearned interests. 53 Had they been paid in 1972 when the GSP for rice and corn was valued at P35.00 and P31.00, respectively, and such amounts were deposited in a bank, they would have earned a compounded interest of 6% per annum. Thus, if the PARAD used the 1972 GSP, then the product of (2.5 x AGP x P35 or P31) could be multiplied by (1.06)n to determine the value of the land plus the additional 6% compounded interest it would have earned from 1972. However, since the PARAD already increased the GSP from P35.00 to P300.00/cavan of palay and from P31.00 to P250.00/cavan of corn, there is no more need to add any interest thereon, muchless compound it. To the extent that it granted 6% compounded interest to private respondent Jose Pascual, the Court of Appeals erred.