Case Digest: Lubrica vs Land Bank G.R. No. 170220, Nov. 20, 2006,507 SCRA 415 (2006)

Lubrica vs Land Bank
G.R. No. 170220, Nov. 20, 2006,
507 SCRA 415 (2006)

Facts:
Petitioners own parcels of agricultural lands in Mindoro Occidental which were placed under land reform pursuant to PD 27.
The land was thereafter subdivided and distributed to farmer beneficiaries.
Petitioners rejected Land Bank’s valuation of their properties: P5,056,833.54 for the 311.7682 hectares (TCT No. T-31) and P1,512,575.05 for the 128.7161 hectares.
On January 29, 2003, the PARAD fixed the preliminary just compensation at P51,800,286.43 for the 311.7682 hectares (TCT No. T-31) and P21,608,215.28 for the 128.7161 hectares.
LBP filed for judicial determination of just compensation before RTC. RTC ordered LBP to deposit the amounts provisionally determined by the PARAD as there is no law which prohibits LBP to make a deposit pending the fixing of the final amount of just compensation.
Court of Appeals  initially upheld Regional Trial Court decision.
However, CA, in its Amended Decision, held that the immediate deposit of the preliminary value of the expropriated properties is improper because it was erroneously computed. Citing Gabatin v. Land Bank of the Philippines, it held that the formula to compute the just compensation should be: Land Value = 2.5 x Average Gross Production x Government Support Price. Specifically, it held that the value of the government support price for the corresponding agricultural produce (rice and corn) should be computed at the time of the legal taking of the subject agricultural land, that is, on October 21, 1972 when landowners were effectively deprived of ownership over their properties by virtue of P.D. No. 27. According to the Court of Appeals, the PARAD incorrectly used the amounts of P500 and P300 which are the prevailing government support price for palay and corn, respectively, at the time of payment, instead of P35 and P31, the prevailing government support price at the time of the taking in 1972.

Issue:
Whether or not the court a quo has decided the case in a way not in accord with the latest decision of the Supreme Court in the case of Land Bank of the Philippines vs. Hon. Eli G.C. Natividad, et al., G.R. No. 127198, prom. May 16, 2005

Held:
YES. The Natividad case reiterated the Court’s ruling in Office of the President v. Court of Appeals that the expropriation of the landholding did not take place on the effectivity of P.D. No. 27 on October 21, 1972 but seizure would take effect on the payment of just compensation judicially determined.
Likewise, in the recent case of Heirs of  Tantoco, Sr. v. Court of Appeals, we held that expropriation of landholdings covered by R.A. No. 6657 take place, not on the effectivity of the Act on June 15, 1988, but on the payment of just compensation.
In the instant case, petitioners were deprived of their properties in 1972 but have yet to receive the just compensation therefor. The parcels of land were already subdivided and distributed to the farmer-beneficiaries thereby immediately depriving petitioners of their use. Under the circumstances, it would be highly inequitable on the part of the petitioners to compute the just compensation using the values at the time of the taking in 1972, and not at the time of the payment, considering that the government and the farmer-beneficiaries have already benefited from the land although ownership thereof have not yet been transferred in their names. Petitioners were deprived of their properties without payment of just compensation which, under the law, is a prerequisite before the property can be taken away from its owners. The transfer of possession and ownership of the land to the government are conditioned upon the receipt by the landowner of the corresponding payment or deposit by the DAR of the compensation with an accessible bank. Until then, title remains with the landowner.