G.R. Nos. 180772 and 180776 - LAND BANK OF THE PHILIPPINES [LBP], VS. DOMINGO AND MAMERTO SORIANO. D E C I S I O N - Supreme Court E-Library

Ruling

ACCORDINGLY, the just compensation of the 18.0491 hectares of irrigated riceland is P133,751.79, plus increment of 6% per annum computed annually beginning October 21, 1972, until the value is fully paid, and of the 0.2329 hectare of rain fed riceland is P8,238.94 plus 12% interest per annum, beginning August 17, 1998, until the value is fully paid or a total of P894,584.94 as of this date. Land Bank is ordered to pay the landowners Domingo Soriano and Mamerto Soriano said amount/land value in accordance with law. [12] The SAC applied the formula prescribed under Executive Order No. 228 in determining the valuation of the property, i.e ., Land value = Average Gross Production x 2.5 x Government Support Price. It likewise granted compounded interest pursuant to Department of Agrarian Reform (DAR) Administrative Order No. 13, series of 1994, as amended by DAR Administrative Order No. 2, series of 2004. Both parties disagreed with the trial court's valuation, prompting them to file their respective appeals with the Court of Appeals. The appellate court, however, affirmed the judgment of the trial court. It also upheld the award of compounded interest, thus: In the case at bar, the subject lands were taken under PD 27 and were covered by Operation Land Transfer, making the aforecited Administrative Order applicable. Hence, the Petitioners SORIANOs are entitled to the 6% compounded interest per annum from the date of taking on 21 October 1972 until full payment of the just compensation. [13] LBP moved for reconsideration but it was denied by the Court of Appeals on 12 December 2007. LBP filed the instant petition seeking to nullify the appellate court's decision and resolution, particularly the amount awarded to respondents as just compensation. Basic is the tenet that since respondents were deprived of their land, they are entitled to just compensation. Under Executive Order No. 228, the formula used to compute the land value is: Land value = Average Gross Production (AGP) x 2.5 x Government Support Price (GSP) With the passage of Republic Act (R.A.) No. 6657 or the CARL in 1988, new guidelines were set for the determination of just compensation. In particular, Section 17 provides, thus: Determination of Just Compensation. In determining just compensation, the cost of acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment 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. Consequently, two divergent formulae arose which prompted the Court to come up with a categorical pronouncement that, if just compensation is not settled prior to the pas