Case Digest: Land Bank vs Celada G.R. No. 164876, Jan. 23, 2006,479 SCRA 495

​Land Bank vs  Celada
G.R. No. 164876, Jan. 23, 2006,
479 SCRA 495

Facts:
Respondent, Celada owns agricultural in Calatrava, Carmen, Bohol identified in 1998 by the DAR as suitable for compulsory acquisition under the CARP.
LBP valued respondent's land at P2.1105517 per square meter for an aggregate value of P299,569.61. The DAR offered the same amount, but it was rejected.
The matter was referred to DARAB Region VII-Cebu City, for summary administrative hearing on determination of just compensation.
While the DARAB case was pending, respondent filed, on February 10, 2000, a petition for judicial determination of just compensation against LBP, the DAR and the Municipal Agrarian Reform Officer (MARO) of Carmen, Bohol, before the Regional Trial Court of Tagbilaran City.
SAC set aside petitioner's valuation of respondent's land on the sole basis of the higher valuation given for neighboring properties. The SAC based its valuation of P354,847.50 solely on the observation that there was a 'patent disparity between the price given to respondent and the other landowners.

Issue:
Whether or not the SAC a quo erred in fixing the just compensation of the land based not on its actual land use but on the valuation of neighboring lands.

Held:
YES. The SAC erred in setting aside petitioner’s valuation of respondent’s land on the sole basis of the higher valuation given for neighboring properties.
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". The SAC further held that said Section 17 "cannot be superseded by any administrative order of a government agency", thereby implying that the valuation formula under DAR Administrative Order No. 5, Series of 1998 (DAR AO No. 5, s. of 1998), is invalid and of no effect.
While SAC is required to consider the acquisition cost of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declaration and the assessments made by the government assessors to determine just compensation, it is equally true that these factors have been translated into a basic formula by the DAR pursuant to its rule-making power under Section 49 of RA No. 6657. As the government agency principally tasked to implement the agrarian reform program, it is the DAR’s duty to issue rules and regulations to carry out the object of the law. DAR AO No. 5, s. of 1998 precisely "filled in the details" of Section 17, RA No. 6657 by providing a basic formula by which the factors mentioned therein may be taken into account. The SAC was at no liberty to disregard the formula which was devised to implement the said provision.