Case Digest: Land Bank vs Dumlao G.R No. 167809Nov. 27, 2008572 SCRA 108 (2008)

Land Bank
vs
Dumlao
G.R No. 167809
Nov. 27, 2008
572 SCRA 108 (2008)

Facts:
Respondents, heirs of the deceased Dumlao, were the co-owners of several parcels of agricultural land with an aggregate area of 32.2379 hectares situated at Villaverde, Nueva Vizcaya. The properties were placed under Operation Land Transfer by the Department of Agrarian Reform (DAR). However, the definite time of actual taking was not stated.
Pursuant to Presidential Decree No. 27 and Executive Order (EO) No. 228, a preliminary valuation was made by the DAR on the landholdings covered by TCT Nos. 41504 and T-1180 with a total area of 16.3939 hectares.
Finding the valuation to be correct, petitioner bank informed respondents of the said valuation. Payments were then deposited in the name of the landowners.

Issues:
1. Whether or not since the properties were acquired pursuant to PD No. 27, the formula for computing just compensation provided by said decree and Executive Order No. 228 should apply.

2. Whether or not October 21, 1972 (when PD 27 was issued) should be deemed as the date of taking of the subject properties.

Held:
1. 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.
In Land Bank of the Philippines v. Estanislao, the Court ruled that taking into account the passage of RA No. 6657 in 1988 pending the settlement of just compensation, it is that law which applies to landholdings seized under PD No. 27, with said decree and EO No. 288 having only suppletory effect.
Guided by this precept, just compensation for purposes of agrarian reform under PD 27 should adhere to Section 17 of RA 6657.
Section 17 was converted into a formula by the DAR through Administrative Order (AO) No. 6, Series of 1992, as amended by AO No. 11, Series of 1994,72 the pertinent portions of which provide:
A. There shall be one basic formula for the valuation of lands covered by [Voluntary Offer to Sell] or [Compulsory Acquisition] regardless of the date of offer or coverage of the claim:
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

The above formula shall be used if all the three factors are present, relevant and applicable.
A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
A.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall be:
LV = (CS x 0.9) + (MV x 0.1)
A.3 When both the CS and CNI are not present and only MV is applicable, the formula shall be:
LV = MV x 2
In no case shall the value of the land using the formula MV x 2 exceed the lowest value of land within the same estate under consideration or within the same barangay or municipality (in that order) approved by LBP within one (1) year from receipt of claimfolder.

2. No. The "taking" of the properties for the purpose of computing just compensation should be reckoned from the date of issuance of emancipation patents, and not on October 21, 1972, as petitioner insists. The nature of the land at that time determines the just compensation to be paid.
It is undisputed that emancipation patents were issued to the farmer-beneficiaries. However, their issuance dates are not shown. As such, the trial court should determine the date of issuance of these emancipation patents in order to ascertain​the date of taking and proceed to compute the just compensation due to respondents, in accordance with RA No. 6657.