May 2009 Decision on Political Law

Based on the Supreme Court’s website (as of today), it appears that only one case decided by the Supreme Court in May 2009 relates to political law. In Land Bank of the Philippines vs. Heirs of Honorio De Leon, represented by Ambrosio De Leon, the Supreme Court reiterated its previous rulings that when just compensation for land acquired pursuant to the agrarian reform program was not yet paid when the Comprehensive Agrarian Reform Law (or R.A. No. 6557) took effect, the provisions of R.A. No. 6557 will apply with respect to the payment of just compensation.   The Supreme Court ruled:

On 15 June 1988, the Comprehensive Agrarian Reform Law (CARL) or R.A. No. 6657 was enacted to promote special justice to the landless farmers and provide “a more equitable distribution and ownership of land with due regard to the rights of landowners to just compensation and to the ecological needs of the nation.”

Section 4 of R.A. No. 6657 provides that the CARL shall cover all public and private agricultural lands including other lands of the public domain suitable for agriculture. Section 7 provides that rice and corn lands under P.D. No. 27, among other lands, will comprise phase one of the acquisition plan and distribution program. Section 75 states that the provisions of P.D. No. 27 and E.O. Nos. 228 and 229, and other laws not inconsistent with R.A. No. 6657 shall have suppletory effect.

Furthermore, in Land Bank of the Philippines v. Heirs of Domingo, the Court stressed the duty of the Court to balance the interests of both the landowner and the farmer-beneficiaries, to wit:

Section 9, Article III of the 1987 Constitution provides that no private property shall be taken for public use without just compensation. As a concept in the Bill of Rights, just compensation is defined as the fair market value of the property as between one who receives, and one who desires to sell.

Section 4, Article XIII of the 1987 Constitution mandates that the redistribution of agricultural lands shall be “subject to the payment of just compensation.” The deliberations of the 1986 Constitutional Commission on this subject reveal that just compensation should not also make an insurmountable obstacle to a successful agrarian reform. Hence, the landowner’s right to just compensation should be balanced with agrarian reform. In Land Bank v. Court of Appeals, we declared that it is the duty of the court to protect the weak and the underprivileged, but this duty should not be carried out to such an extent as to deny justice to the landowner whenever truth and justice happen to be on his side.

In the instant case, respondents were furnished with the notice of coverage sometime in 1988 only. Even if respondents’ property were acquired pursuant to P.D. No. 27, the fixing of just compensation based on the values under P.D. No. 27/E.O. No. 228 would render meaningless respondents’ right to a just compensation.

Thus, the Court ruled in Paris v. Alfeche that when the passage of R.A. No. 6657 supervened before the payment of just compensation, the provisions of R.A. No. 6657 on just compensation would be applicable. The same pronouncement has been reiterated in Land Bank of the Philippines v. Natividad, Land Bank of the Philippines v. Estanislao, Land Bank of the Philippines v. Heirs of Domingo and LBP v. Heirs of Cruz.

Pertinently, Section 17 of R.A. No. 6657 provides:

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 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.

In Land Bank of the Philippines v. Celada, the Court ruled that the factors enumerated under Section 17, R.A. No. 6657 had already been translated into a basic formula by the Department of Agrarian Reform (DAR) pursuant to its rule-making power under Section 49 of R.A. No. 6657. Thus, the Court held in Celada that the formula outlined in DAR A.O. No. 5, series of 1998 should be applied in computing just compensation.

Likewise, in Land Bank of the Philippines v. Sps. Banal, the Court ruled that the applicable formula in fixing just compensation is DAR A.O. No. 6, series of 1992, as amended by DAR A.O. No. 11, series of 1994, then the governing regulation applicable to compulsory acquisition of lands, in recognition of the DAR’s rule-making power to carry out the objectives of R.A. No. 6657. Because the trial court therein based its valuation upon a different formula and did not conduct any hearing for the reception of evidence, the Court ordered a remand of the case to the SAC for trial on the merits.

The mandatory application of the aforementioned guidelines in determining just compensation has been reiterated recently in Land Bank of the Philippines v. Lim and Land Bank of the Philippines v. Heirs of Cruz, where the Court also ordered the remand of the cases to the SAC for the determination of just compensation strictly in accordance with the applicable DAR regulation.

Conformably with the aforequoted rulings, the instant case must be remanded to the SAC for the determination of just compensation in accordance with DAR A.O. No. 5, series of 1998, the latest DAR issuance on fixing just compensation.

See Land Bank of the Philippines Vs. Heirs of Honorio De Leon, represented by Ambrosio De LeonG.R. No. 164025,  May 8, 2009.