G.R. No.

171836 August 11, 2014

DEPARTMENT OF AGRARIAN REFORM, represented by HON. NASSER C.

PANGANDAMAN, in his capacity as DAR-OIC Secretary, Petitioner,
vs.
SUSIE IRENE GALLE, Respondent.

x-----------------------x

G.R. No. 195213

LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
SUSIE IRENE GALLE, substituted by her heirs, namely HANS PETER, CARL OTTO,
FRITZ WALTER, and GEORGE ALAN, all surnamed REITH, Respondents.

DECISION

DEL CASTILLO, J.:

It has been the consistent pronouncement of this Court that the determination of just
compensation is basically a judicial function. Also, it is settled that in the computation of just
compensation for land taken for agrarian reform, both Section 17 of Republic Act No. 6657 (RA
6657 or the Comprehensive Agrarian Reform Law of 1988/CARL) and the formula prescribed in
the applicable Administrative Order of the Department of Agrarian Reform (DAR) should be
considered.

Before this Court are consolidated Petitions for Review on Certiorari1 assailing the following
dispositionsof the Court of Appeals (CA):

1. Its September 23, 2004 Decision2 and February 22, 2006 Resolution3 in CA-G.R. SP
No. 80678, entitled "Department of Agrarian Reform, as represented by Secretary
Roberto M. Pagdanganan, Petitioner, versus Hon. Reinerio (Abraham) B. Ramas,
Presiding Judge, Regional Trial Court, Br. 18, Pagadian City and Susie Irene Galle,
Respondents";

2. Its July 27, 2010 Consolidated Decision4 and January 19, 2011 Resolution5 in CA-
G.R. SP Nos. 00761-MIN and 00778-MIN, entitled "Land Bank of the Philippines,
Petitioner, versus Susie Irene Galle, substituted by her heirs, namely: HansPeter, Carl
Otto, Fritz Walter, and George Alan, all surnamed Rieth, Respondents" and "Department
of Agrarian Reform, represented by OIC-Secretary Nasser C. Pangandaman, Petitioner,
versus Susie Irene Galle, substituted by her heirs, namely: HansPeter, Carl Otto, Fritz
Walter, and George Alan, all surnamed Rieth, Respondents", respectively.

Factual Antecedents
Respondent Susie Irene Galle (Galle) owned two contiguous parcels of land known as the
Patalon Coconut Estate (the estate) in Patalon, Zamboanga City, with a total area of 410.2271
hectares (or 4,102,271 square meters) and covered by two titles issued in her name – Transfer
Certificatesof Title Nos. T-62,7366 (TCT T-62,736) and T-62,7377 (TCT T-62,737). The estate
is a fully developed and income-producing farm, thus:

TCT T-62,736 TCT T-62,737

Land Use Area [Has.] Land Use Area [Has.]
[Coconut Plantation] 178.713 [Coconut Plantation] 168.1127 [has.]
[Coconut with Coffee Trees] 5.0 [Coconut with Coffee Trees] 3.5
Quarry 5.0 Corn 1.5
Barangay Road 1.4 Forest [Land] 15.0
Forest [Land] 15.0 National Road 2.08

The estate contained between 35,810 to 38,666 coconut trees,9 producing copra. Likewise, cattle,
carabao and horses were raised therein.10

In August 1992, petitioner Land Bank of the Philippines (LBP) valued 356.2257 hectares of the
estateat ₱6,083,545.26, which valuation was rejected by Galle. The rejected amount was
supposedly deposited in the name of Galle, in the form of cash and bonds.

On November 17, 1993, the Zamboanga City Registry of Deeds cancelled Galle’s titles and
transferred the entire estate to the State; TCT Nos. T-110,927 and T-110,928 were issued in the
name of the "Republic of the Philippines – Department of Agrarian Reform."

On November 25, 1994, TCT Nos. T-110,927 and T-110,928 were cancelled and new titles –
TCT Nos. T-111,098 and T-111,099 – were issued in the name of "Patalon Estate Agrarian
Reform Beneficiaries Association" (PEARA).

Yet again, on May 13, 1994,the above two PEARA titles were cancelled, and new titles were
issued, as follows:

1. TCT No. T-113,496 for 15.0025 hectares in Galle’s name;11

2. TCT No. T-113,499 for 37.1209 hectares in Galle’s name;12

3. TCT No. T-113,497 for 47.1739 hectares in the name of PEARA;13 and

4. TCT No. T-113,498 for 307.5369 hectares in the name of PEARA.14

The above four titles covered 406.8342 hectares of the estate’s total area of 410.2271 hectares,
thus leaving 3.3929 hectares thereof unregistered. Thus, it appears that as to Galle, a total of
358.1037 hectares, or 3,581,037 square meters – which is the sum total of the areas covered by
TCT Nos. T-113,497 and T-113,498, and the 3.3929 hectaresunaccounted for but not re-titled or
returned to Galle – were taken from her by the government without just compensation.
Meanwhile, the Department of Agrarian Reform Adjudication Board (DARAB) conducted
summary administrativeproceedings for the acquisition of the estate, docketed as DARAB
CaseNo. JC-RIX-ZAMBO-0011-CO. On October 15, 1996, a Decision15 was rendered in said
case, the dispositive portion of which reads:

WHEREFORE, premises considered, order is hereby issued directing the Land Bank of the
Philippines to determine and include the value of the 1.4 hectares barangay road in the total
valuation. It is likewise directed to pay the landowner, Susie Irene Galle, the amount of TEN
MILLION SEVEN HUNDRED SIXTY SEVEN THOUSAND FOUR HUNDRED SIXTY
NINE PESOS AND 00/100 (₱10,627,148.00) [sic] upon completion of the essential
requirements.

SO ORDERED.16

Galle was notified of the above Decision on October 28, 1996. LBP filed a motion for
reconsideration, which remains unresolved to this day.17

Civil Case No. 4574

Galle instituted onNovember 12, 1996 – or within 15 days from receipt of the Decision in
DARAB Case No. JC-RIX-ZAMBO-0011-CO– a case for "Cancellation of Transfer Certificates
of Title and Reconveyance, Determination and Payment of Just Compensation, and Damages"
with the Regional Trial Court (RTC) of Zamboanga City. Docketed asCivil Case No. 4574 and
assigned to RTC Branch 12, the Complaint18 - entitled "Susie Irene Galle, Plaintiff, versus
Ernesto Garilao, et al., Defendants" – prayed, amongothers, that:

The Honorable Court issue an Order:

1. Directing defendant Susana B. Muin, Register of Deeds of Zamboanga City, to cancel

all certificates of title issued subsequent to TCT Nos. T-62,736 and T-62,737, thereby
rendering all subsequent certificates of title without force and effect, and restoring in the
name of plaintiff TCT Nos. T-62,736 and T-62,737; and

2. Directing the Department of Agrarian Reform and all the defendants to jointly and
severally pay plaintiff the income she lost from the time the said TCTs were cancelled on
November 17, 1993 up to the time thatthe TCTs will be restored in her name, with
interest at the rate of 12% per annum, to pay lawyer’s fees and to pay the cost of the suit.

In the alternative, it is respectfullyprayed that the Honorable Court render judgment:

1. Declaring just compensation for plaintiff’s expropriated landholdings at an amount not

less than ₱345,311,112.00 and directing Land Bank of the Philippines to pay plaintiff the
 said amount. 2. Requiring Land Bank of the Philippines to pay plaintiff the value of the
infrastructures and waterworks system installed on plaintiff’s landholdings.

3. Requiring the Department of Agrarian Reform and Land Bank of the Philippines and
all other defendants to jointly and severally pay damages to plaintiff in the form of 12%
interest [per annum] starting January 21, 1991 up to the time the final award of
compensation is paid to plaintiff, the interest to be computed based on the final award of
compensation to plaintiff, and directing Land Bank of the Philippines to pay the amount
to plaintiff.

4. Requiring the Department of Agrarian Reform and Land Bank of the Philippines and
all other defendants to jointly and severally pay damages to plaintiff by way of attorney’s
fees in the amount of 15% of the final award of compensation to plaintiff, and directing
Land Bank of the Philippines to pay the amount to plaintiff.

5. Requiring the Department of Agrarian Reform and Land Bank of the Philippines and
all other defendants to jointly and severally pay damages to plaintiff for all the expenses
incurred to bring the instant suit before the Honorable Court, which should not be less
than ₱400,000.00, and to pay the cost ofthe suit, and directing Land Bank of the
Philippines to pay the the [sic] amounts to plaintiff.

6. To pay the cost of the suit.19

Galle likewise filed DARAB CaseNo. IX-ZC-766-96-(R) seeking annulment of the titles which
were issued subsequent to her original titles, or TCT T-62,736 and TCT T-62,737. However, the
case was later dismissed in a January 10, 1997 Decision issued by the DARAB.

The DAR moved to dismiss Civil Case No. 4574, claiming that the RTC had no jurisdiction over
the case. The RTC denied the motion, as well as DAR’s ensuing motion for reconsideration.
DAR thus filed a Petition for Certiorariwith the CA, docketed as CA-G.R. SP No. 47618. On
August 21, 2001,the CA issued a Decision20 granting the Petition, thus:

WHEREFORE, the foregoing premises considered, the petition for certiorari is GRANTED. The
Orders of the public respondent dated June 23, 1997 and September 18, 1997, and all the
proceedings had thereafter including the Decision dated March 22, 1999 and the Order dated
May 19, 2000 are hereby ANNULLED and SET ASIDE. No pronouncement as to costs.

SO ORDERED.21

The CA held that the RTC in Civil Case No. 4574 had no power to review decisions of the
DARAB, and it had no jurisdiction over the case for cancellation of titles since it was not the
designated Special Agrarian Court (SAC).

Galle then came to this Court by Petition for Review on Certiorari, docketed as G.R. No.
152480. In a June 3, 2002 Resolution,22 however, the Petition was denied for failure to show
that the CA committed reversible error.
Civil Case No. 4436-2K3

On January 14, 2003, Galle filed a case for "Determination and Payment of Just Compensation
with Damages" against the Secretary of the DAR, LBP, and PEARA, which was docketed as
Civil Case No. 4436-2K3 and assigned to Branch 18 of the RTC of Pagadian City, the designated
SAC. The Complaint23 essentially alleged that the estate was a fully developed and income-
generating farm which was situated near the Zamboanga City Special Economic ZoneAuthority
and the Ayala de Zamboanga Industrial Estate; that the estate was a rich source of sand and
gravel, and more than 62 hectares thereof was coastal land; that at the time of taking by the State,
the fair market value thereof was no less than ₱100.00 per square meter, or ₱1 million per
hectare; and that DAR and LBP offered compensation equivalent to only ₱1.70 per square meter.
Galle prayed that just compensation be fixed in the amount of notless than ₱1 million per hectare
or a total of ₱350,569,636.10; that she be granted compounded interest on the just compensation
due her,computed from the time her land was taken until she is paid; that she be awarded
15%attorney’s fees, "actual expenses", and costs of suit.

The DAR filed a Motion to Dismiss,24 which LBP adopted. Citing prescription and forum-
shopping, the DAR argued that Galle was given only 15 days from notice of the October 15,
1996 DARAB Decision in DARAB Case No. JC-RIX-ZAMBO-0011-CO – pursuant to Rule
XIII, Section 11 of the 1994 DARAB Rules of Procedure25 – within which to file a just
compensation case with the SAC; her filing of Civil CaseNo. 4436-2K3 on January 14, 2003, or
six years later, is tardy, and the October 15, 1996 Decision of the DARAB therefore became
final and executory. It argued further that Galle was guilty of forumshopping for filing Civil
Case No. 4436-2K3 after obtaining anadverse Decision in Civil Case No. 4574, which likewise
involved a prayer – albeit in the alternative – for the fixing of just compensation for her estate.

Galle filed an Opposition26 to the Motion to Dismiss, arguing among others that the October 15,
1996 DARAB Decision in DARAB Case No. JC-RIXZAMBO-0011-CO did not become final
and executory as there is still a pending and unresolved Motion for Reconsideration27 filed by
LBP; thatthe courts have the power to review the Decision of the DAR, which is merely
preliminary and not final; that a landowner may file a case directly with the SAC without
awaiting the DAR’s preliminary determination on justcompensation;28 that the original and
exclusive jurisdiction over cases for the determination of just compensation lies with the SAC –
the DAR cannot be granted jurisdiction over cases of eminent domain, as the valuation of
property in eminent domain cases is essentially a judicial function which cannot be vested in
administrative agencies;29 that she was deprived of her property without just and timely
compensation,and her estate was placed in the name of an agrarian reform beneficiaries
association that did not exist in fact and in law; and that no forum-shopping was committed with
the filing of Civil Case No. 4574 precisely since the trial court in said case had no jurisdiction to
cancel the titles issued or to fix just compensation as it was not the designated SAC that
possessed the power to do so. To this Opposition, LBP filed a Reply.30

In a June 20, 2003 Order,31 the SAC denied the Motion to Dismiss. DAR and LBP moved to
reconsider, butin a September 12, 2003 Order,32 the SAC stood its ground.

LBP thereafter filed its Answer with Counterclaim.33

CA-G.R. SP No. 80678

Instead of submitting an Answer, DAR filed a Petition for Certiorariand Prohibition with the CA
– docketed as CA-G.R. SP No. 80678 – assailing the SAC’s June 20, 2003 and September 12,
2003 Orders, on the claim that they were issued with grave abuse of discretion since Galle was
already bound by the final and executory October 15, 1996 Decision of the DARAB in DARAB
Case No. JC-RIX-ZAMBO-0011-CO and thus could no longer file Civil Case No. 4436-2K3 to
fix anew the just compensation for her estate.

On September 23, 2004, the CA issuedthe herein assailed Decision and February 22, 2006
Resolution respectively dismissing the Petition and denying reconsideration thereof. The
appellate court stated that DAR’s Petition was defective as it failed to state the date ofreceipt of
the SAC’s assailed June 20, 2003 Order, and that the SAC’s Orders may not be elevated to the
higher courts until the hearing in Civil Case No. 4436-2K3 has been terminated and the case
decided on the merits, pursuant to Section 59 of RA 6657 or the Comprehensive Agrarian
Reform Law of 1988 (CARL).34

Thus, the DAR filed the instant Petition, docketedas G.R. No. 171836.

Meanwhile, back in Civil Case No. 4436-2K3, the SAC conducted pretrial, where the parties
jointly moved for the creation of a commission of three that would determine the just
compensation for Galle’s estate. Thus, Zamboanga City Assessor Erwin Bernardo (Bernardo),
Zamboanga City Engineer Luis Vicente Despalo (Despalo), and DBP Property Appraiser Romel
Calapardo (Calapardo) were called in to sit as commissioners.

The commission submitted a Report dated July 7, 2004, which the parties and the SAC rejected.
The commission was directed to convene and conduct a revaluation. Meanwhile, Despalo was
replaced by retired City Assessor Obdulia Manalo (Manalo), and Bernardo was replaced by
retired Judge Cecilio Martin (Judge Martin).

Hearings were conducted whereby the parties presented their respective evidence. Galle
presented two witnesses, while LBP submitted only documentary evidence.

Meanwhile, one of the commissioners– Judge Martin – resigned. LBP manifested its willingness
to proceed with the revaluation with only two commissioners remaining.35

Commissioner Manalo submittedher Commissioners’ Report36 together with all the documents
submitted by the parties and the transcript of stenographic notes of the hearings and executive
sessions of the commissioners. Manalo’s Report reads, as follows:

COMMISSIONERS’ REPORT

Comes now the undersigned Commissioners, and in compliance with the Order of the Honorable
Court dated October 30, 2003, respectfully submit this REPORT

I. TASK OF THE COMMISSIONERS

As stated in the Order of the Honorable Court dated October 30, 2003, the task of the
commissioners is "to conduct the re-evaluation of the property subject of this case." The records
show that plaintiff’s land titles were cancelled in 1993 hence the task of the commissionersis to
determine the value of her land in 1993.

II. THE PROPERTY SUBJECT OF THIS CASE

Located in Patalon, Zamboanga City, plaintiff’s land was originally embraced under two
certificates of title with a combined total area of 410.2271 hectares (has.). These titles were
cancelled on November 17, 1993. On May 13, 1994 two parcels of land with a total combined
area of 52.1234 has. were reconveyed to plaintiff for being not carpable. The total area that
comprises the property subject of this case is therefore 358.1037 has. Proof of this is given
below:

Plaintiff’s original area:

TCT No. T-62,736 - 205.1130 has.
TCT No. T-62,737 - 205.1141 has.

TOTAL AREA - 410.2271 has.

Plaintiff’s reconveyed area:
TCT No. T-113,496 - 15.0025 has.
TCT No. T-113,499 - 37.1209 has.

TOTAL AREA - 52.1234 has

AREA TAKEN BY DAR - 358.1037 has.
=============

It is the function of DAR to determine the carpability of lands for agrarian reform. The
commissioners therefore do not have any authority or jurisdiction to question the carpability
ofthe land that was not reconveyed to plaintiff. In other words, whatever was not reconveyed to
plaintiff is presumed to be carpable land and this area amounts to 358.1037 has.

This emphasis is being made becauseit appears from a collation of the land area in the two titles
that were reconveyed to plaintiff and the two titles given to the Patalon Estate Agrarian Reform
Beneficiaries Association (PEARA) that 3.3929 has. are not covered by a certificate of title. As
stated above, the commissioners have no authority or jurisdiction to question the lack of
coverage of 3.3929 has. under a certificate of title. This is the province of DAR and for DAR to
address. Insofar as the area ofthe property subject of this case is concerned, what was not
returned to plaintiff is 358.1037 has. and this is therefore the area that is to be considered for
valuation.
III. ACTIVITIES/HEARINGS OF THE COMMISSIONERS

1. Ocular Inspection

2. Hearing for the presentation of plaintiff’s evidence

3. Hearing for the presentation of defendant’s evidence

4. Organization meeting

5. Executive sessions

Because x x x plaintiff’s property was taken was some time ago x x x and her property as it was
before no longer exists, the commissioners note the following observations made during their
ocular inspection:

1. There are only a few coconut trees on the property subject of this case and they
are young trees. Whatever coconut trees plaintiff had on the property have been
cut down.

2. There is heavy extraction/quarrying of sand and gravel on Patalon River which

bounds plaintiff’s property.

3. There is very little agricultural activity on the property.

IV. THE EVIDENCES AND PLEADINGS FILED/SUBMITTED BY THE PARTIES

The commissioners are submitting tothe Honorable Court all the pleadings and other papers filed
by plaintiff and defendant Land Bank of the Philippines (LBP) as attachments to this report, as
well as the transcript of all hearings. In view of the voluminous nature of these attachments, and
because they already have copies, plaintiff and LBP will only be provided with copies of this
report without its attachments.

A. Plaintiff’s Evidence

Testimonial

1. Mr. Rodolfo Luceñada, Head, LoanAdministration Unit, Zamboanga Lending Center, Land
Bank of the Philippines

He testified that in July 2004 his unit appraised a 3[-]ha. Property in Sinubung, a barangay
adjacent to Patalon; furthermore that the [price] range of [properties] in the area is ₱100 to ₱300
per square meter (sqm)

2. Mr. Rene Lacandalo, In-Charge of Sand and Gravel and Fishery Section, Office of the City
Treasurer, Zamboanga City
He testified that plaintiff’s property is bounded by two river systems, the Patalon River and the
Miluao River and that there is extraction and quarrying in the river system[s]

Documentary

Plaintiff submitted a folder of documents (Annex A of this Report) categorized, viz:

1. Prefatory Matters

a. Complaint dated Dec. 19, 2002, Civil Case No. 4436-2K3

b. Answer of LBP dated Sept. 30, 2003

c. Order dated Oct. 30, 2003

2. The Property Subject of the Complaint

a. TCT No. T-62,736

b. TCT No. T-62,737

c. TCT No. T-110,927

d. TCT No. T-110,928

e. TCT No. T-111,098

f. TCT No. T-111,099

g. TCT No. T-113,496

h. TCT No. T-113,497

i. TCT No. T-113,498

j. TCT No. T-113,499

k. Certification No. 2002-371 dated Sept. 4, 2002 issued by the Register of

Deeds for Zamboanga City

l. Colored Map of Zamboanga City showing all the barangays

m. Colored Map of the property subject of the complaint

n. Another map of the property subject of the complaint

 3. Improvements on the property

a. Tax Declaration No. 01 60 00017

b. Tax Declaration No. 01 60 00018

c. Statement of the Livestock

d. Certification of the City Assessor on unit value of agricultural crops

4. Compensation due Susie Irene Galle

a. Resolution No. 2003-10

b. Resolution No. 2001-90

c. Resolution No. 2001-87

d. Resolution No. 2000-35

e. Resolution No. 2000-05

all of the City Appraisal Committee of the City of Zamboanga

f. Manifestation dated Oct. 19, 1995

g. Certification dated Mar. 14, 1995 issued by the Phil. Coconut Authority

h. Copra Millgate Prices for Western Mindanao prepared by the Trade

Information Relations Division, Philippine Coconut Authority

5. Other Matters

a. Certificate of Registration of Patalon Agrarian Reform Farmers

MultiPurpose Cooperative (PARFAMCO), issued on Sept. 29, 1995

b. List of farmer-beneficiaries of PARFAMCO

c. Certificate No. 427-96, dated Sept. 19, 1996 of the Register of Deeds
that no documents on the alleged PEARA [are] on file with the registry

d. Excerpts from cases on just compensation

Pleadings

1. Memorandum dated January 24, 2005 (Annex B)

 2. Counter-Manifestation and Counter-Comment dated Feb. 15, 2005 (Annex C)

B. Defendant’s Evidence

Testimonial

No witnesses were formally presented.

Documentary

LBP submitted a paper entitled Comment on Plaintiff’s Evidence (Annex D) which contained the
following attachments:

1. Field Inspection Report dated March 19, 1991 for land under TCT T-62,737

2. Appraisal Report dated March 19, 1991 for TCT T-62,737

3. Conference/Public Hearing Summary dated March 19,1991 for land covered

under TCT T-62,737

4. Tax Declaration 01 16080 88 for TCT T-62,736 dated Jan. 13, 1983

5. Tax Declaration 01 16080 89 for TCT T-62,737 dated Feb. 13, 1983

6. Notice of Decision and Decision dated Oct. 13,37 1996 of the DARAB

7. Memorandum of the DAR PARO to LBP dated Dec.4, 1996 that Susie Irene
Galle x x x had accepted the price per LBP’s valuation of her land

8. Decision of the Supreme Court inLand Bank of the Philippines vs. Spouses
Vicente Banal and Leonidas Arenas-Banal

9. Field Inspection Report, undated, for TCT No. T-62,736

10. Conference/Public Hearing Summary for TCT No. T-62,736, dated March 19,
1991

Pleadings

1. Manifestations/Comments to Plaintiff’s Memorandum dated Feb. 1, 2005

(Annex E)

LBP requested that its Comment on Plaintiff’s Evidence be treated as its memorandum.

V. EVALUATION/ANALYSIS OF THE EVIDENCES PRESENTED BY THE PARTIES

In her complaint plaintiff alleged that the fair market value of her property at the time of its
taking was at least ₱100 per sqm. and she prayed for compensation for 358.1037 has. Among
plaintiff’s principal documentary evidences presented to the commissioners is Resolution No.
2003.10 of the City Appraisal Committee of the City of Zamboanga which placed the value of
land the City Government was expropriating in Patalon in 2003 at the equivalent of ₱152.52 per
sqm. Using 5% as an appreciation factor, and conversely a depreciation rate, the raw value of
plaintiff’s property in 1993 would be ₱91.32 per sqm. Multiplied by 3,581,037 sqm. (358.1037
has.) this means a raw land value of ₱327,020,299.00. Another principal documentary evidence
of plaintiff is the Certification of the City Assessor of Zamboanga City as to how much the City
Government of Zamboanga would pay for specified crops found on lands to be expropriated.
Based on the crops declared in plaintiff’s tax declarations, these improvements would be paid
₱19,384,320.00. Distributing this amount to the area involved (₱19,384,320.00/3,581,037) would
add ₱5.41 to the ₱91.32 per sqm. to add up to ₱96.73 per sqm. On the other hand, the principal
income of plaintiff was from the sale of copra to the oil mills. Using the average millgate price of
₱8.35 per kilo (average for the November 1993 to October 1994) multiplied by 12.5 kilos of
copra per tree multiplied by 38,666 coconut trees would result to a gross income from the sale of
copra of ₱4,035,764 and deducting 20% as costs will give a net income of ₱3,228,611.00 which,
capitalized at 12% would add ₱7.51 per sqm. to the value of the land for a total value of ₱104.24
per sqm. x x x.It can thus be said that plaintiff has justified the amount of her claim for just
compensation.

On the other hand, LBP stuck to its position that the amount of compensation for plaintiff should
be ₱7,534,063.92, or ₱2.10 per sqm. Considering that LBP conducted its field investigation more
than two and a half years (2-1/2) before the taking of the property and used data therefore
obtaining in 1991 and tax declarations of 1983 and did not even attempt to recompute based on
the formula in the latest DAR Administrative Order, which is applicable to all lands that have not
yet been paid for, it can be said that LBP failed to support its position.

VI. VALUATION METHODS USEDBY COMMISSIONERS AND RESULTS

The valuation of land is not an exact science. Specified in Sec. 17 of R.A. 6657 and quotedin the
Banal case a copy of which was furnished the commissioners, just compensation involves the
examination of these factors:

1. Cost of acquisition of the land

2. Current value of like properties

3. Nature, actual use and income

4. Tax declarations

5. Assessment made by government assessors

6. Social and economic benefits contributed by the farmers and farmworkers and by the
government to the property; and
 7. Non-payment of taxes or loans secured from government financing institutions

Cost of acquisition of the propertysubject of this case cannot be determined. The land was
acquired and developed by plaintiff and her forebears into a fully developed self-sufficient estate.
Since lands of the magnitude of plaintiff’s do not exist on the west coast portion of the city, the
current value of similar properties cannot be ascertained. The commissioners instead used the
appraisal value of the city government’s appraisal committee composed of the City Assessor, the
City Engineer and the City Treasurerand LBP, as well as the actual selling value of lands near
plaintiff’s. Factors 6 and 7 above are not applicable to this case.

In arriving at the raw land value of the subject property, the commissioners relied on the
expertise of Commissioner Romel Calapardo who is the Property Appraiser of the Development
Bank of the Philippines, Regional Management Office for Western Mindanao. His computation
for raw land value is given below:

A. Raw Land Value

Land Data

Zamboanga City Appraisal Committee / Actual Sale

1. Land # 1 : Location - Patalon
Appraisal - [P]152.52/sqm.
Date - May 2003
Area - 16,391 sqm.
2. Land # 2 : Location - Sinubung
Appraisal - [P]200.00/sqm.
Date - October 2000
Area - 23,825 sqm.
Banks
1. LBP : Location - Sinubung
Appraisal - [P]250.00/sqm. along the road
[P]150.00/sqm interior portion
Date - 2003
Area - more than 6,000 sqm.
2. PNB : No exposure/appraisal done in the area

Comparative Adjustments
 Adjustment Factor L1 L2 L3
Size -10.00 -10.00 -10.00
Location 0.00 -3.00 -3.00
Depth/Frontage -10.00 -10.00 -10.00
Time (+ or – 5% per yr 0.00 -15.00 0.00
Algebraic Sum -20.00 -38.00 -23.00
MarketData 152.50 200.00 250.00
Adjustment -30.50 -76 -57.5
Adjusted Value 122.00 124.00 192.50
Average Value of the Land at Present Time = ₱146.00/sqm.

Bank Practice - 5% appreciation of land

Raw land value in 1993 - ₱146.00 – (5%)(₱146)(11)
= ₱83.04 per sqm.
= ₱297,369,312.00
==============

B. Capitalized Net Income

To arrive at the principal income ofplaintiff, copra, the commissioners used a density of
100 trees per ha. for a total of 35,810 trees. Multiplied by 12.5 kgs. of copra per tree at an
average millgate buying price of ₱8.35, gross income is calculated at ₱3,737,669.00 and
net income, using the accepted 20% cost/expense factor, will be ₱2,990,135.00.
Capitalizing net income at 12%, the capitalized net income of plaintiff is calculated as
₱24,917,792.00.

C. Salvage Value

Considering that all the 35,810 trees have been cut down and presumably sold [as]
lumber, the salvage value of these trees at ₱495.00 per tree, the rate the City Government
is paying for coconut trees, is ₱17,725,950.00.

D Summary

Raw land value - ₱297,369,312.00

Capitalized net income - 24,917,792.00
 Salvage value - 17,725,950.00
TOTAL ₱340,040,054.00
vvvvvvvvvvvvvv

SUBMISSION

It is reiterated that the task of the commissioners is to value the property subject of this case. It is
not the taskof the commissionersto determine just compensation for plaintiff. This matter
iswithin the exclusive jurisdiction of the Honorable Court and the commissioners merely provide
the expertise needed by the Court to arrive at a resolution.

The commissioners submit the sum of ₱340,040,054.00 asthe value of plaintiff Susie Irene
Galle’s expropriated land.

City of Zamboanga for the City of Pagadian, Zamboanga del Sur, May 06, 2005.

(signed)
ENGR. ROMEL S. CALAPARDO
MRS. OBDULIA A. MANALO
xxxx
xxxx

RET. JUDGE CECILIO G. MARTIN

x x x x38

On the other hand, Commissioner Calapardo submitted a Dissenting Opinion on Commissioners’

Report39 dated June 3, 2005, which states thus:

DISSENTING OPINION ON COMMISSIONERS’ REPORT

The undersigned Commissioner respectfully states that:

1. He is in receipt of the Commissioner’s Report rendered by Comm. Obdulia A.

Manalo, retired City Assessor of Zamboanga City.

2. That the Commissioner’s Report was discussed in an executive session between

Comm. Manalo and the undersigned on May 11, 2005.

3. That he does not agree with the report and thus, this Dissenting Opinion, as
follows:

● Commissioner Manalo use [sic] as basis for the valuation of the properties the
report of the first Commission formed by the court composed of Zamboanga City
Assessor Erwin Bernardo, City Engineer Luis Despalo and the undersigned.

It is the believed [sic] of the undersigned Commissioner that this should not have
been so because the first Commission was a failure, and in fact, the court rejected
 its report. The first Commission failed to observe the Rules on Proceedings. Not a
single hearing was conducted.

● The report of the first Commission was never presented as evidence in the
course of the hearing of the current Commission, and thus, it was also never
discussed.

● While the raw land value as presented in the report of Comm. Manalo was
indeed drafted by the undersigned,again, some important things and issues
overlooked [sic] becauseno hearing was conducted.

● As presented by Comm. Manalo in her report, the computation of the product of

raw land value of ₱83.04 is incorrect.

● The capitalized net income and salvage value as presented by Comm. Manalo in
her report is her own and not of the Commission.

4. Presented hereunder is the report ofthe undersigned Commissioner, viz:

REPORT

Plaintiff, owner of two (2) parcels of land situated at Barangay Patalon, Zamboanga City,
containing an aggregate area of 410.2271 has., alleged the following:

a. The compensation offered for her property involving an area of 356.2257 has. is
unconscionable and confiscatory. That the basis for the compensation should be the fair
market value of the property at the time of the taking, which is 1993.

b. The area reconveyed to her is only 52.1459 has. Thus, 3.3929 has. of her property were
lost; that she did not received [sic] any offer of compensation for this particular area; and
that she was not informed whatsoever what have became [sic] of this area.

The primary function of the commissionis to determine the value of the property at the time of
the taking in 1993. In this case, the area in consideration is 356.2257 has. As to the missing area
of 3.3929 has., Commissioner Calapardo is in [sic] the opinion that its legalityis beyond the
Commission’s authority.

DECISION

On August 20, 1992, defendant DAR offered a compensation of Php6,083,545.26 for the
property covering an area of 356.2257 has. This offered compensation was later increased to
Php7,534,063.92.

The case was then elevated to the Department of Agrarian Reform Adjudication Board. DARAB,
in its decision dated October 15, 1996, awarded the landowner the amount of Php10,627,148.00
for an equivalent area of 373.2271 has. inclusive of the 1.4 has. claim which was identified by
Land Bank as barangay road.

The declared value of the property per tax declaration is Php9,056,990.00. As DARAB itself
pointed out in its decision, adopting the formula under Administrative Order No. 6 of "MV x 2",
the compensation for the property would havebeen Php20,645,445.00.

Worth noting is the fact that when the case was presented before the DARAB, the claim of the
plaintiff was Php30,681,107.68 aspresented by LBP during the hearing on January 12, 2005.

While LBP claimed that plaintiff accepted the price as determined by the DARAB, Plaintiff,
through her counsel points otherwise. LBP was not able to show proof that indeed Plaintiff
accepted the DARAB valuation.

Plaintiff through her counsel, also confirmed that they have not seek [sic] the assistance of an
appraisal firm to comeup with the valuation of the property. An appraisal of the property by an
independent appraisal company at the time of the taking could have been an invaluable input in
determining just compensation. No person or owner of a property can claim that his property is
worth so much because he says so. Every claim has to be back up [sic] by acceptable and
credible method of valuation.

Plaintiff’s claim over the property in her complaint with the Special Agrarian Reform Court in
December 2002 is Php350,569,636.10 which is more than 90% over her original claim during
the DARAB proceedings. In her final Memorandum to the Board of Commissioners dated
January 24, 2005, her claim over the property was placed at Php485,994,853.00.

It may be deduced that the amount ofher claim is always based on the current market value of the
property, atthe time every pleading is prepared.

On the part of the undersigned Commissioner, the appraisal of the property, using accepted
principals [sic] and banking practices, taking into consideration present market data gathered and
considering improvements of the property as declared in the tax declaration at the time of the
taking, and working back to the time of the taking, resulted to [sic] Php79,764,000.00.

The undersigned Commissioner’s computation however may proof [sic] impractical considering
the span of time that had elapse [sic] from the time of the taking, which has resulted in altered
land use in surrounding areas and affected land valuation considerably. A case in pointis the
establishment of the office of the Zamboanga Economic Zone and Freeport Authority a few
kilometers before the property of the plaintiff, which was established sometime in 1997. A single
development of this nature in a locality can change the market attitude entirely. And with such
change, market data during the present time can never be comparable to the market condition
during the time of the taking.

Fair Market Value of real estate isdetermined by the desirability of the property and the
availability of a willing buyer and seller. Both must possess sufficient knowledge of all the uses
to which it is adapted and for which it is capable of being used, and agrees to buy and to sell
respectively without pressure.

Under this concept, the value of the property at the time of the taking cannot be more than
Php30,681,107.68, the claim of the plaintiff in 1995, two years after the time of the taking. This
is because a claim has been made; it can be assumed that this amount is the value to which the
owner is willing to part with his property at that time.

Real estate, especially land, tends to appreciate in value with time. At the time of the taking
therefore, the value of the property is either equal to or less than Php30,681,107.68.

The undersigned Commissioner also cannot agree with the valuation of DARAB which priced
the property at Php10,627,148.00 simply because the property’s declared value per tax
declaration is Php9,056,990.00, and as DARAB itself pointed out, the compensation of the
property should be Php20,645,445.00 per Administrative Order No. 6.

It is common knowledge that real estate are [sic] usually declared less than their [sic] true value
simply because the declaration made by the owner is only for tax purposes. Along this line, there
is no reason for the landowner to over value her property and be burdened by realty taxes in the
future.

The general rule is that real estate appreciates in value over time. As to what percentage depends
upon the development in the locality. Some Banking institution, under normal condition,
considera 5% appreciation in value to be acceptable. In the same manner, if onlya short period of
time elapses, 5% decrease in price on the current market value may be practicable to
approximate value for a property several years back.

Under this condition, the claim of the Plaintiff of Php30,681,107.68 in 1995 may be recomputed.
Considering the above-stated practice, in 1993, the time of taking, the value of the property is
approximately Php27,612,996.90.

Then again, the claim of the Plaintiff at Php30,681,107.68 has no basis. Based on the records,
she came up with this value on her own, which may be self-serving. But as the owner of the
property, she has the right to demand her price, after all, a sale can only be consummated upon
the meeting of the minds of the seller and buyer.

The case at hand, however, is not a normal sale between a seller and a buyer in the open market.
It is based on the laws of the land as promulgated.

Premises considered, the undersigned Commissioner, after due consideration and analysis of
evidence presented, believes thatthe fair market value of the property at the time of taking in
1993 is Twenty Million Six Hundred Forty Five Thousand Four Hundred Forty Five Pesos
(Php20,645,445.00).

The undersigned Commissioner however agrees with the Plaintiff that the delay in the payment
of just compensation may be construed as an injustice. Thus, a reasonable interest should be
granted to Plaintiff for the failure of Dependants [sic] to come up with the acceptable price.
Respectfully submitted this 3rd day of June, 2005, at Zamboanga City, Philippines.

(signed)
ROMEL S. CALAPARDO
DBP Representative
Commission Member40

The SAC held a hearing on the above reports on June 17, 2005, while the parties filed their
respective comments and manifestations thereto.41

On August 15, 2005, the SAC issued a Resolution,42 the dispositive portion of which reads –

WHEREFORE, judgment is hereby rendered ordering defendants Land Bank of the Philippines
and the Departmentof Agrarian Reform to jointly and severally pay plaintiff the following:

1. Just compensation in the amount of THREE HUNDRED SIXTEEN MILLION

SEVEN HUNDRED FIFTY-THREE THOUSAND SIX HUNDRED THIRTY-TWO
PESOS (₱316,752,632.00) [sic].

2. Compounded legal interest as prayed for to be reckoned from the time of taking up to
the timethat plaintiff is fully paid.

3. Commissioners fees to be taxed aspart of the costs pursuant to Section 12, Rule 67 of
the 1997 Rules of Civil Procedure and Section 16, A.M. No. 04-2-04-SC.

4. Attorney’s fees in an amount equivalent to 15% of the total award in items no. 1 and 2
above.

5. Cost of the suit.

SO ORDERED.43

In arriving at the above conclusion, the SAC held, as follows:

After a careful and studied scrutiny of the voluminous records of this case these facts were
clearly established:

1. The area of the property subject ofthis case is 358.1037 hectares. The aggregate area in
plaintiff’s44 TCT Nos. T-62,736 and T-62,737 was 410.2271 hectares. What was
eventually reconveyed or returned to plaintiff in TCT Nos. T-113,496 and T-113,49745
totaled 52.1234 hectares. DAR therefore took 358.1037 hectares. What DAR took
constitutes the property subject of this case for which just compensation should be paid.
Whether or not the area of 358.1037 hectares is fully covered under certificates of title is
not for this Court to inquire into but for DAR to address. Furthermore, there can be no
other assumption but that the total area of 358.1037 hectares that DAR took is carpable,
absent a protest from the landowner that her land is not subject to the CARL. LBP has no
standing to protest that the landowner whose land was already taken by DAR should not
be paid for a portion of the land taken because that portion is not carpable.

2. Plaintiff’s land titles mentioned above were cancelled and title of the entire area
covered in the titles transferred even before plaintiff was paid compensation for her land.

3. The Patalon Estate Agrarian Reform Beneficiaries Association, the recorded

beneficiary of plaintiff’s property, is non-existent. It does not exist in fact. It does not
exist in law.

4. All the coconut trees that were standing on plaintiff’s property when it was taken by
DAR were eventually cut down. Her estate no longer exists.

5. There is heavy extraction of sand and gravel on the river that abounds [sic] plaintiff’s
property.

6. Commissioner Obdulia Manalo arrived at a value for the property subject of this case
through a credible methodology that was clearly presented in her report.

7. Plaintiff likewise arrived at a value for her property through a credible method that was
clearlypresented in her Memorandum.

8. Commissioner Romel Calapardo, on the other hand, did not present the methodology
by which he arrived at ₱20,645,445.00 as the value of plaintiff’s property. This is the
value that DARAB said was arrived at by using the formula "MV x 2" which formula is
notapplicable to plaintiff’s property but was merely used to prove the arbitrary and
confiscatory value of ₱7,534,063.91 that LBP was offering for plaintiff’s property.
Commissioner Calapardo misappreciated DARAB’s statements.

9. Commissioner Calapardo also premised his discussions on fiction, the fiction being
that plaintiff claimed the amount of ₱30,681,107.68 in 1995 as just compensation for her
property. 10. LBP did not present any documentsto show how it arrived at the value of
₱7,534,063.91. Neither did it explain in any pleading how this amount was determined. It
did not show the basis for whatever factors it used nor the authorities or sources of its
data and information. Furthermore, it did not dispute plaintiff’s assertion that no actual
field inspection of her property was conducted as it claimed it did in 1991.

11. The Zoning Ordinance of the City of Zamboanga, City Ordinance No. 29, enacted in
1978, declared large areas of land located along the west coast portion of Zamboanga
City as industrial areas which caused an upward movement of the value of land along the
west coast. Plaintiff’s property is located along the west coast.

12. The City Government of Zamboangavalued a parcel of land located in Patalon at

₱152.52 per square meter in2003. In 2000 it valued a parcel of land located in the
 adjacent barangay of Sinubung at ₱200.00 per square meter. LBP valued land at
Sinubung in2003 at ₱300.00 per squaremeter along the road.

The task of this Court is to determine the amount of just compensation for plaintiff. As to what
just compensation is, this has been defined as the full and fair equivalent of the property taken
from its owner by the expropriator; the measure is not the taker’s gain [but] the owner’s loss. The
word "just" is used to intensify the meaning of the word "compensation" to convey the idea that
the equivalent to be rendered for the property to be taken shall be real, substantial, full, ample.
(Association of Small Landowners in the Philippines, Inc., et al., vs. Secretary of Agrarian
Reform, G.R. No. 78742, July 14, 1989, 175 SCRA 343).

As to what just compensation for plaintiff should be, in a most compelling sense the documents
that she submitted convey in no uncertain terms that the amount of ₱7,534,063.91 that LBP
maintains should be paid to her and the amount of ₱10,767,469.00 fixed by DARAB is
confiscatory and tantamount to a taking.

The Court does not see merit in LBP’s contention that the compensation that the City
Government of Zamboanga City pays for land and its improvements cannot apply to land
expropriated for agrarian reform because of the revolutionary nature of land reform. It must be
recalled that in Land Bank of the Philippines vs. Court of Appeals, et al., G.R. No. 118712 and
G.R. No. 118745, 249 SCRA 149 the Supreme Court said: "We agree with the observation of the
respondent court. The ruling in the ‘Association’ case merely recognized the extraordinary
nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation from
the traditional modeof payment of compensation and recognized payment other than in cash. It
did not, however, dispense with the settled rule that there must be full payment of just
compensation before the title to the expropriated property is transferred."

Finding both the report of Commissioner Obdulia Manalo and the Memorandum of plaintiff to
be well taken the Court rules thatthe value of the property subject of this case is itsraw land value
of ₱297,369,312.00 as determined by Commissioner Manalo and the value of its improvements
of ₱19,384,320.00 as determined in the Memorandum to be what the City Government of
Zamboanga would pay, for a total of three hundred sixteen million seven hundred fifty three
thousand six hundred thirty-two pesos (₱316,753,632.00).46

Both LBP and DAR moved to reconsider. LBP’s Motion for Reconsideration47 is dated
September 8, 2005, yet it set the motion for hearing on October 28, 2005. DAR’s Motion for
Reconsideration,48 dated September 12, 2005, was likewise set for hearing on October 28, 2005.
Respondent opposed the motions.49

On November 16, 2005, the SAC issued an Order50 denying reconsideration of its August 15,
2005 Resolution. It held:

The Motion for Reconsideration of LBP is without merit. The Motion for Reconsideration of
DAR is likewise without merit. Both Motions are pro forma and are mere scraps of paper.
Section 2, Rule 37 of the 1997 Rules of Civil Procedure, 3rd paragraph require that a "Motion for
Reconsideration shall point out specifically the findings or conclusions of the judgment orfinal
order which are not supported by the evidence or which are contrary to law, making express
reference to the testimonial or documentary evidence or tothe provisions of law alleged to be
contrary to such findings or conclusions." DAR and LBP aver that the Court failed to consider
Section 17 of R.A. 6657 and apply the valuation formula of DAR Administrative Order No. 6,
Series of1992, as amended. Section 17 is an enumeration of the factors that shall be considered
in the determination of just compensation.1awp++i1 DAR and LBP contend thatbecause the
Court did not determine just compensation using the formula in an administrative issuance, DAR
Administrative Order No. 6, the Court consequently failed to consider Section 17 of RA 6657.
Their argument is baseless. Section 17 does not require the Court to use the valuation formula in
DAR Administrative Order No. 6. The allegation that the contested Resolution is contrary to law
is therefore ludicrous. The law vests in the Court exclusive and original jurisdiction to hear and
determine just compensation to landowners of condemned lands. The jurisdiction of the Court
cannot be restricted or undermined by administrative orders of administrative agencies. (EPZA
vs. Dulay, 149 SCRA 305).

The Court is constrained to emphasize, moreover, that neither DAR nor LBP presented the
formula in DAR Administrative Order No. 6 to the commission appointed in this case or to the
Court. Neither did they present to the commission or to this Court their calculations of just
compensation based on the formula in the said Order or on any order.

The Court considers as valid the objections of plaintiff that the Motions for Reconsideration of
LBP and DAR violated Section 11, Rule 13, of the 1997 Rules of Civil Procedure. Both the
Motion for Reconsideration of LBP and the Motion for Reconsideration of DAR do notcontain a
written explanation as to why the service of the motion on plaintiff was not done personally.
Accordingly, in the light of the pronouncement of the Supreme Court in Perla S. Zulueta vs. Asia
Brewery Inc., G.R. No. 138137, March 8, 2001, both motions should be expunged from the
records.

Moreover, LBP and DAR set their motion for hearing on October 28, 2005, more than forty (40)
days after the motions were filed, in clear violation of Section 5, Rule 15, of the 1997 Rules of
Civil Procedure. The motions are pro forma, they are obviously intended to delay the
proceedings of this case. At the time the motion was filed, LBP already had a previously set
hearing on October 14, 2005 for another land reform case and there is no cogent reason for LBP
to set the hearing of their motion for reconsideration in this case to a much later date.

On October 30, 2003 the parties agreed to refer the valuation of the property subject of this case
to a commission. The Court accepted with modification the Commissioner’sReport. The records
will show that whatever objections now being raised in the motion for reconsideration of LBP
and DAR were not raised in a comment or objection to the Commissioner’s Report.

With respect to Land Bank of the Philippines’ objection that interest should be based on market
interest rates aligned with 91-day treasury bill rates, the Court does not see any conflict with
Section 18(4) R.A. 6657. Compounded legal interest rate will be imposed onthat portion of the
compensation due plaintiff that will be [sic] should have been paid in cash if compensation had
been paid at the time of the taking in 1993, and the proceeds of the LBP bonds that should have
already matured and bore market interest rates aligned with 91-day treasury bill rates.
Inasmuchas more than ten (10) years have elapsed since the time of the taking of plaintiff’s
property, compensation due her should now be paid entirely in cash.

WHEREFORE, the Motions for Reconsideration of Land Bank of the Philippines and
Department of Agrarian Reform are DENIED for being patently without merit and for being pro
forma and intended merely to delay the proceedings of this case. The Resolution dated August
15, 2005 is hereby amended insofar as [the imposition of] compounded legal interest on
compensation due. It is hereby Ordered that compounded legal interest shall be imposed not on
the entire compensation due but only on the cash portion of the compensation that should have
been paid plaintiff in 1993, or at the time of the taking, and on the proceeds of the corresponding
portion of the Land Bank of the Philippines bonds that should have matured yearly and bore
market interest rates aligned with 91-day treasury bill rates starting 1994 up to the time that
plaintiff shall be fully paid.

SO ORDERED.51

Rulings of the Court of Appeals

LBP instituted a Petition for Review with the CA, which was docketed as CA-G.R. SP No.
00761-MIN. For its part, the DAR filed a separate Petition for Review, docketedas CA-G.R. SP
No. 00778-MIN.

In a January 17, 2004 Order, the two petitionswere consolidated.52

On July 27, 2010, the CA issued the assailed Consolidated Decision, decreeing as follows:

FOR THE STATED REASONS, these consolidated petitions are PARTLY GRANTEDas
follows:

(1) The total amount of just compensation for the Three Million Five Hundred Sixty-
Eight Thousand Two Hundred Fifty-Seven square meters (or 356.8257 hectares) of
respondent’s land isRECOMPUTED and fixed at the total amount of Two Hundred
Ninety-Six Million Three Hundred Eight Thousand Sixty-One Pesos and Twenty-Eight
Centavos (₱296,308,061.28).

(2) The award of compounded legal interest is MODIFIED to 12% simple interest rate
per annum in the total amount of just compensation which is reckoned from the time of
taking until respondent shall be fully paid.

(3) The award of attorney’s fees in an amount equivalent to 15% of the total award of just
compensation and legal interest is REDUCED to Three Hundred Thousand Pesos
(₱300,000.00).

SO ORDERED.53
In disposing of the Petitions, the CA circumscribed the issues that needed to be resolved to 1) the
total area actually taken by the government for agrarian reform, and 2) the amount of just
compensation that must be paid to Galle.

On the issue of total land area actuallyexpropriated, the appellate court held as follows:

Respondent demands compensation for a total area of 358.1037 hectares, but LBP wants to
compensate her only for 356.8257 hectares.

The original area of respondent’s land was 205.1130 hectares in TCT No. T-62,736 and
205.1141 hectares in TCT No. T-62,737. That comprises a total area of 410.2271 hectares. The
area eventually reconveyed by DAR to respondent was 15.0025 hectares in TCT T-113,496 and
37.1209 hectares in TCT No. T-113,499, or a total reconveyed land area of 52.1234 hectares.
Thus, the area that was retained by DAR is 358.1037 hectares.

But it is not as simple as that.

xxxx

It appears from this presentation that approximately 3.4000 hectares was [sic] not included in
LBP’s computation ofthe total land area to be compensated. The 3.4000 hectares corresponds
[sic] to the alleged "missing" 3.3929 hectares. The 3.4000 hectares includes the 1.4000 hectares
of respondent’s land used as barangay road and the 2.000 hectares of respondent’s land which
formed part of the national road. The 3.4 hectare portion of respondent’s land classified as road
portions were excluded by LBP from valuation.

xxxx

Thus, the DARAB ordered the inclusion of the 1.4000 hectares barangay road in the
determination of the total valuation. The DARAB excluded only the approximate 2.000 hectares
comprisingthe existing national road. x x x

xxxx

It matters to keep in mind that the power to determine with exactitude what areas may come
within the coverage of the Comprehensive Agrarian Reform Program (CARP) is essentially
lodged with the DAR. Thus, the total area of respondent’s land covered by CARP should be
356.8257 hectares, not 358.1037 hectares.54

With regard to the issue of just compensation, the CA made the following pronouncement:

Sections 17 and 18 of RepublicAct No. 6657 provides [sic] the guideposts for the determination
of just compensation, to wit:

Sec. 17. Determination ofJust 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.

Sec. 18. Valuation and Mode of Compensation. – The LBP shall compensate the landownerin
such amount as may be agreed upon by the landowner and the DAR and LBP or as may be
finally determined by the court as the just compensation for the land.

The LBP proposed to compensate respondent for the value of the 356.8257 hectares at Seven
Million FiveHundred Thirty-Four Thousand SixtyThree Pesos and Ninety-One
Centavos(₱7,534,063.91), or at Two Pesos and Eleven Centavos (₱2.11) per square meter. The
DAR did not agree with LBP’s valuation; it pegged the value of the land at Ten Million Seven
Hundred SixtySeven Thousand Four Hundred Sixty-Nine Pesos (₱10,767,469.00).

Considering the documents submitted by the respondent, the SAC found both LBP’s and DAR’s
valuation as confiscatory and tantamount to unjust taking of respondent’s land.

Indeed, it has been established thatwhen the DAR took respondent’s land, it was a fully-
developed estate. x x x

No doubt, the subject land is not idle. It has been planted to coconut trees with intercrops, mango
trees, bamboo clamps [sic], coffee trees which were then fruit bearing. Respondent also raised in
the land livestock such as cattle, carabao, and horses which she proposed to sell to DAR based
on normal cattle weights to be paid by LBP. In fact, respondent’s land was fenced and patrolled
by security guards prior to DAR’s taking.

It is even significant to consider thatmore than sixty-two hectares of the land is coastal fronting
the Sulu Sea, while on the south portion of the land lies the Miluao River and on the north, the
Patalon River. Not only that. The subject land is located along Zamboanga-Labuan road – a
national road which covers an approximately two (2) hectare-stretch of the land. Respondent was
likewise even recognized by DAR for providing the 1.4 hectare-portion of the land as barangay
road. The undisputed presence of water and road networks in respondent’s land certainly defy
LBP’s valuation of the land at ₱7,534,063.91, which translates to the ridiculously unfair
amountof ₱2.11 per square meter.

In arriving at a valuation of ₱83.04 per square meter, the SAC meticulously evaluated the
following factors:

[1] the report of the Commissioners vis-à-vis the Dissenting Opinion;

[2] the nature of the land, its actual use and income;

[3] the sworn valuation by the owner; the tax declarations;

 [4] the current value of like properties or the comparative sales of adjacent land;

[5] the permanent improvements on the land and value of improvements; and

[6] the potential use.

It cannot, therefore, be said that the SAC had no basis for its valuation of respondent’s land. It
took into consideration the required important factors enumerated in Section 17 ofRepublic Act
No. 6657 which, in turn, were the very same matters that made up the DAR formula. Verily, it
can be said that the SAC had substantially applied the formula by looking into all the factors
included in it, i.e., nature, actual use and income, comparable sales and market value, assessment
made by government assessors, to arrive at the proper land value.

Indeed, the valuation of respondent’s property at ₱83.04 per square meter is founded on
evidence. Records show the following "raw land value" as determined by Zamboanga City
Appraisal Committee based on actual sale:

1 Land # 1: Location - Patalon

Appraisal - ₱152.52 / sqm.
Date - May 2003
Area - 16,391 sqm.
2 Land # 2 Location - Sinubung
Appraisal - ₱200.00 / sqm.
Date - October 2000
Area - 23,825 sqm.

The Commissioners’ Report even considered the value of the land located at Sinubung,
Zamboanga City an adjacent area from Pantalon [sic], Zamboanga City which LBP appraised at
₱250.00 and ₱150.00 per square meter for land situated along the road and for interior lands,
respectively. From the existing data on raw value of land, the Commissioners’ Report makes the
comparative adjustments, as follows:

Adjustment Factor

L1 L2 L3
Size -10.00 -10.00 -10.00
Location 0.00 -3.00 -3.00
Depth/Frontage -10.00 -10.00 -10.00
Time (+ or – 5% per yr 0.00 -15.00 0.00
 Algebraic Sum -20.00 -38.00 -23.00
MarketData 152.50 200.00 250.00
Adjustment -30.50 -76 -57.5
Adjusted Value 122.00 124.00 192.50

This leads to the conclusion that the average value of the land at the time of the investigation of
the commissioners was ₱146.00 per square meter. The commissioners correctly point out, that
the value of real property appreciates through the years, and not otherwise, though the percentage
of increase depends upon the developments in the locality. Under normal conditions, however,
banking institutions consider as acceptable a 5% appreciation in value per annum. It matters to
note that the commissioners were unanimous on the methodology of arriving at raw land value at
the time of the taking. Thus, the SAC’s application of the bank practice in determination of the
raw land value of land at the time of the taking of the land in 1993 was reasonable and proper.

Applying the bank practice of fixingannual appreciation of land at 5%, the raw value of the land
has been correctly computed at ₱83.04 per square meter. From this valuation, the total value of
the Three Million Five Hundred Sixty-Eight Thousand Two Hundred Fifty-Seven square meters
(or 356.8257 hectares) of respondent’s land is Two Hundred Ninety-Six Million Three Hundred
Eight Thousand Sixty-One and 28/100 Pesos (₱296,308,061.28).

Hence, we find in order the modification of the SAC Resolution dated 15 August 2005 pertaining
to the total amountof just compensation as well as the award of compounded legal interest,
attorney’s fees, and commissioner’s fees.

On the matter of compounded legal interest, the SAC ordered the DAR and LBP to jointly and
severally pay compounded legal interest on just compensation. We cannot allow that.

The charging of compounded [interest] has been held as proper as long as its payment has been
agreed upon by the parties. There is not even a hint of such agreement. We, however, allow legal
interest in the nature of damages for the delay in payment which in effect makes the obligation
on the part of the government one of forbearance. Indeed, legal interest is the measure of
damages arising from delay (mora solvendi) under the Civil Code.

The Supreme Court consistently heldthat just compensation has been defined as "the full and fair
equivalent of the property taken from its owner by the expropriator,"55 and that the gauge for
computation is not the taker’s gain but the owner’s loss. In order for the payment to be "just", it
must be real, substantial, full, and ample.The concept of just compensation embraces not only the
correct determination of the amount tobe paid to the owner of the land, but also the payment of
the land within a "reasonable time" from the taking of the property.

Without prompt payment, compensation cannot be considered "just" inasmuch as the property
owner is madeto suffer the consequences of being immediately deprived of his land while being
made to wait for a decade or more before actually receiving the amount necessary to cope with
his or her loss.

In this case, the DAR literally took respondent’s land without her knowledge and participation,
and without paying her just compensation. Worse, from the time of the taking of respondent’s
land in 1993 up to the present, LBP has not yet remunerated respondent although DAR has
already distributed the lands to the farmer beneficiaries for more than seventeen (17) years ago
[sic]. It is but just and equitable that the unreasonable delay in the payment of just compensation
should warrant the award of 12% interest per annum in respondent’s favor.

On the matter of attorney’s fees, the SAC ordered the DAR and LBP to jointly and severally pay
attorney’s fees in the amount equivalent to 15% of the just compensation and compounded legal
interest.

We cannot sustain such an award of attorney’s fees. The general rule is that attorney’s fees
cannot be recovered aspart of damages because of the policy that no premium should be placed
on the right to litigate. In all cases, it must be reasonable, just and equitable if the same isto be
granted. It is necessary for the court to make findings of fact and law tojustify the grant of such
award. The matter of attorney’s fees must be clearly explained and justified by the trial court in
the body of its decision. In this case,the SAC failed to substantiate its award of attorney’s fees
which amounts to fifteen percent (15%) of the just compensation and legal interest.

However, we deem it proper to fix the award of attorney’s fees at ₱300,000.00. It is good to note
that although the main case was merely for determination of just compensation with damages,
involving as it did modest legal issues, that complaint had in reality generated several incidents
during the close to seventeen (17) years that this case was under litigation. Once, the DAR
elevated the case to this Court seeking relief from the denial of their motion to dismiss. Then,
after the SAC had constituted the Board of Commissioners, respondent had to wriggle her way
through in presenting and defending her claim for just compensation and damages. And now,
respondent has to contend with the separate petitions for review filed by DAR and LBP. It is
even sad to note that the original respondent had already passed to the great beyond without
seeing the dawn of her toils and efforts, all because of the prolonged determination of her just
compensation. In fine, taking into account the overall factual environment upon which this
casehas proceeded, we find the award of ₱300,000.00 sufficient and reasonable.56

LBP filed a Motion for Reconsideration,57 arguing that the CA erred in fixing just compensation
without taking into consideration the formula prescribed in DAR Administrative Order No. 6,
Series of 1992 (AO 6), as amended by Administrative Order No. 11, Series of 1994 (AO 11);58
that the CA erred in finding the bank liable for interest and attorney’s fees; that Galle’s
complaint for just compensation has prescribed; and that in filing Civil Case No. 4436-2K3,
Galle is guilty of forum-shopping.

On January 19, 2011, the CA issued the second assailed Resolution denying LBP’s motion for
reconsideration. Thus, the present Petition in G.R. No. 195213.
As stated earlier, on September 23, 2004, the CA issued the herein assailed Decision and
February 22, 2006 Resolution respectively dismissing the DAR’s Petition in CA-G.R. SP No.
80678 and denying its motion for reconsideration thereof, declaring that the Petition was
defective as it failed tostate the date of receipt of the SAC’s assailed June 20, 2003 Order, and
that the SAC’s Orders may not be elevated to the higher courts until the hearing in Civil Case
No. 4436-2K3 is terminated and the case decided on the merits, as required under Section 59 of
the CARL.

In a June 1, 2011 Resolution of thisCourt, G.R. No. 195213 was ordered consolidated with G.R.
No. 171836.

Issues

The following issues are raised:

In DAR’s Petition in G.R. No. 171836

1. THE HONORABLE COURT OF APPEALS ERRED WHEN IT DISMISSED

THE PETITION FOR CERTIORARIAND PROHIBITION BASED ON MERE
TECHNICALITY,RATHER THAN DECIDE THE CASE ON THE MERITS;

2. THE HONORABLE COURT OFAPPEALS ERRED WHEN IT RULED

THAT PETITIONER VIOLATED SECTION 59 OF REPUBLIC ACT NO. 6657
WHEN IT FILED INSTANT (PETITION IN CA-G.R. SP No. 80678);59

In LBP’s Petition in G.R. No. 195213

1. THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE

COMPLAINT FOR JUST COMPENSATION FILED BY THE RESPONDENT
BEFORE THE SPECIAL AGRARIAN COURT HAS ALREADY
PRESCRIBED.

2. THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE

RESPONDENT IS GUILTY OF FORUM-SHOPPING WHEN SHE FILED THE
COMPLAINT BEFORE THE SPECIAL AGRARIAN COURT.

3. GRANTING ARGUENDO THAT A JUST COMPENSATION HAS TO BE

DETERMINED, THE COURT OF APPEALS COMMITTED A SERIOUS
ERROR OF LAW IN AFFIRMING WITH MODIFICATION THE
RESOLUTION DATEDAUGUST 30, 2005 AND ORDER DATED
DECEMBER 2, 2005 OF THE SPECIAL AGRARIANCOURT (SAC) AND
FIXED THE JUST COMPENSATIONAT ₱296,308,061.68 FOR THE 356.8257
HECTARES OF COCONUT LANDS, THE SAME BEING NOT IN
ACCORDANCE WITH THE LEGALLY PRESCRIBED VALUATION
FACTORS UNDER SECTION 17 OF R.A. 6657 AS TRANSLATED INTO A
BASIC FORMULA IN DAR ADMINISTRATIVE ORDER NO. 06, SERIES OF
 1992, AS AMENDED BY DAR AO NO. 11, SERIES OF 1994, AND AS
RULED BY THE SUPREME COURT INTHE CASES OF SPS. BANAL, G.R.
NO. 143276 (JULY 20, 2004); CELADA, G.R.NO. 164876 (JANUARY 23,
2006); AND LUZ LIM, G.R. NO. 171941 (AUGUST 2, 2007) AND OTHER
JURISPRUDENCE ON THE MATTER.

4. THE COURT OF APPEALS ALSO ERRED IN HOLDING PETITIONER

LBP LIABLE FOR:

(C) 12% SIMPLE INTEREST RATE PER ANNUMBASED ON THE

TOTAL AMOUNT OF JUST COMPENSATION; AND

(D) THE AMOUNT OF THREE HUNDRED THOUSAND

(₱300,000.00) AS ATTORNEY’S FEES AND LEGAL INTEREST.

Accordingly, Petitioner LBP raises these questions of law:

1. HAS THE PERIOD TO FILE A COMPLAINT FOR JUST COMPENSATION

PRESCRIBED?

2. IS THE RESPONDENT GUILTY OF FORUM-SHOPPING?

3. CAN THE COURT OF APPEALS DISREGARD THE VALUATION

FACTORS UNDER SECTION 17 OF R.A. 6657 AS TRANSLATED INTO A
BASIC FORMULA IN DAR ADMINISTRATIVE ORDER NO. 06, SERIES OF
1992, AS AMENDED, AND ASHELD IN THE CASES OF SPS. BANAL;
CELADA; AND LUZ LIM, SUPRA., IN FIXING THE JUST COMPENSATION
OF THE SUBJECT PROPERTY OF THE RESPONDENT?

4. IS PETITIONER LBP LIABLE FOR INTEREST AND ATTORNEY’S

FEES?60

The Parties’ Respective Arguments

In G.R. No. 171836. The DAR argues in its Petition and Reply61 that its failure to state in its
Petition in CA-G.R. SP No. 80678 the dates of its receipt of the SAC’s assailed June 20, 2003
and September 12, 2003 Orders – on July 11, 2003 and September 29, 2003, respectively – was a
simpleand honest oversight, an inadvertence that may be cured since itdid not adversely affect
the substantial rights of the respondents therein. It contends that the outright dismissal of its
Petition on the basis of technical rules is too strict and rigid, considering that an issue of
jurisdiction is raised therein, specifically that since the October 15, 1996 DARAB Decision
fixing just compensation in DARAB Case No. JC-RIXZAMBO-0011-CO has become final and
executory, the SAC did not have jurisdiction to act on Galle’s petition for determination anew
ofjust compensation in Civil Case No. 4436-2K3. It adds that the CA’s application ofSection 59
of the CARL is misplaced, since what is being raised in CA-G.R. SP No. 80678 is the SAC’s
jurisdiction to take cognizance of Civil Case No. 4436-2K3, which must first be resolved if only
to free the parties from the rigors and expense of unnecessary trial. It thus prays that the assailed
CA dispositions be reversed, and that Civil Case No. 4436-2K3 be dismissed.

LBP likewise filed a Reply,62 echoing the DAR’s contention that Galle’s option for the judicial
determination of just compensation for her estate has long prescribed due to her failure to file a
case within the 15-day period prescribed by Rule XIII, Section 11 of the 1994 DARAB Rules of
Procedure; that her filing of Civil Case No. 4574 could not have tolled the 15-day period; that
her subsequent filing of Civil Case No. 4436-2K3 was improper and constituted forum-
shopping, and violated the principle of res judicataas regards the final and executory October 15,
1996 DARAB Decision inDARAB Case No. JC-RIX-ZAMBO-0011-CO; that the SAC failed to
observethe proper formula in fixing just compensation, as required under DAR AO6, as amended
by AO 11; that it was erroneous for the CA to apply the pronouncement in Apo Fruits
Corporation v. Court of Appeals63 in awarding just compensation toGalle without the benefit of
applying the formula in DAR AO 6, since the ruling in said case is merely pro hac vice; that the
applicable cases would be Land Bank of the Philippines v. Spouses Banal,64 Land Bank of the
Philippines v. Gallego, Jr.,65 Land Bank of the Philippines v. Lim;66 Land Bank of the
Philippines v. Suntay;67 Land Bank of the Philippines v. Heirs of Eleuterio Cruz;68 Land Bank
of the Philippines v. Dumlao;69 Allied Banking Corporation v. Land Bank of the Philippines;70
and Land Bank of the Philippines v. Colarina,71 which mandate the application of the DAR AO
6 formula.

In her Comment,72 which was later supplemented by a consolidated Comment,73 Galle insists
that the October 15, 1996 DARAB Decision in DARAB Case No. JC-RIX-ZAMBO-0011-CO
did not become final and executory as there is still a pending and unresolved motion for
reconsideration filed by LBP, which thus did not foreclose her right to institute Civil Case No.
4436-2K3; that she is not guilty of forum-shopping in filing Civil Case No. 4574 precisely since
said case was erroneosly filed with a court which was not the designatedSAC having jurisdiction
over her complaint for the fixing of just compensation; that the CA is correct in its
pronouncements; and that contrary to what isclaimed in the Petition, her substantial rights are
materially affected considering that her property had been expropriated and awarded to a non-
existent organization without payment of just compensation. Thus, she prays for the affirmance
of the questioned CA pronouncements.

In G.R. No. 195213. In its Petition, LBP advances essentially the same arguments laid down in
the above Reply it submitted in G.R. No. 171836. It additionally claims that Galle’s right to have
the just compensation for her estate determined by the SAC was foreclosed by her failure to
institute the proper court action within the prescribed period under Rule XIII, Section 11 of the
1994 DARAB Rules of Procedure, and for this reason, the SAC in Civil Case No. 4436-2K3 had
no jurisdiction to take cognizance of Galle’s complaint; that the failure of the DARAB in Case
No. JC-RIX-ZAMBO-0011-CO to resolve LBP’s pending motion for reconsideration of its
October 15, 1996 Decision cannot validate Galle’s late filing of Civil Case No. 4436-2K3, and
instead indicates that the filing of said case was premature; that LBP’s pending motion for
reconsideration affected only LBP, and notGalle, against whom the October 15, 1996 Decision
should have become final and executory; that the filing of Civil Case No. 4436-2K3 following
the nullification of the proceedings in Civil Case No. 4574 constituted forum-shopping; that the
SAC and CA failed to observe the proper formula in fixing just compensation, as provided
underDAR AO 6, as amended by AO 11 and applicable jurisprudence; that in fixing just
compensation for the estate at the unconscionable amount of ₱83.04 per square meter (or over
₱830,000.00 per hectare), no hearing was conducted and the SAC merely relied on the
commissioners’ report; that in view of the enormous difference in the valuations of the two
commissioners(Manalo’s at ₱340,040,054.00 and Calapardo’s at ₱20,645,445.00) and the
principle thatthe determination of just compensation is ultimatelya function of the courts, the
SAC should not have relied blindly on Manalo’s findings and should have conducted its own
evaluation of the evidence and computation; that the manner of computing just compensation in
agrarian reform cases differs from that in ordinary expropriation cases, in that the taking of land
for agrarian reform purposes involves the exercise of police power and thus necessarily entails
loss on the part of the landowner; and that the CA erred in awarding 12% interest per annum,
attorney’s fees and legal interest.

LBP thus prays for the nullification and setting aside of the assailed CA pronouncements on the
ground of prescription and forum-shopping. It included an alternative prayer for the Court to fix
just compensation at ₱7,534,063.91 for the acquired area of 356.2257 hectares or the remand of
the case to the SAC for further proceedings to correctlydetermine just compensation.

In their consolidated Comment,74 the respondents in G.R. No. 195213 reiterate their view that
the October 15, 1996 DARAB Decision in DARAB Case No. JC-RIX-ZAMBO-0011-CO did
not becomefinal and executory as there is still a pending and unresolved motion for
reconsideration filed by LBP, which thus did not foreclose Galle’s right to instituteCivil Case
No. 4436-2K3; that Galle is not guilty of forum- shopping in filing Civil Case No. 4574 precisely
since said case was erroneosly filed with a court which was not the designatedSAC having
jurisdiction over her complaint for the fixing of just compensation; that the CA did not err in its
pronouncements; and that contrary to what is claimed in the Petition, her substantial rights are
materially affected considering that her property had been expropriated and awarded to a non-
existent organization without payment of just compensation.

Notably, respondents bewail that their mother’s estate was taken, yet there is no agrarian reform
beneficiary. Theyclaim that the beneficiary of record – PEARA – is a phantom association that is
not even registered with the Securities and Exchange Commission or the Cooperative
Development Authority, as testified by representatives of the said agencies in Civil Case No.
4574.

Respondents thus pray for the Court to affirm the assailed CA dispositions.

Our Ruling

The Court denies the Petition in G.R.No. 171836 and partially grants the Petition in G.R. No.
195213.

The existence of PEARA

In National Federation of Labor v. National Labor Relations Commission,75 the existence of

PEARA as a legitimate cooperative accredited by the DAR and beneficiary of Galle’s estate –
which was then known as the Patalon Coconut Estate – was recognized. There thusappears to
exist no issue at this point regarding the authenticity and existence of the organization.

The October 15, 1996 DARAB Decision is null and void

An examination of the October 15, 1996 DARAB Decision in Case No. JC-RIX-ZAMBO-0011-
CO will reveal thatin arriving at its conclusions, the DARAB relied mainly on the claim folder
profile prepared by LBP, thus:

A perusal of the claimfolder profileprepared by the Land Bank of the Philippines showed that the
subject lanholdings has [sic] the following land use:

xxxx

In its determination of the land value, LandBank has used the valuation factors on Capitalized
Net Income (CNI) and Market Value per Tax Declaration (MV/TD) multiplied by ninety percent
(90%) and ten percent (10%) respectively. In using such valuation factors, it has come up with a
total land value of SEVEN MILLION FIVEHUNDRED THIRTYFOUR THOUSAND SIXTY
THREE PESOS (₱7,534,063.91) [sic] broken as follows:

xxxx

The Board agrees with the data inputs adopted in determining the capitalized net income (CNI)
of coffee, corn as well as the market value per tax declaration for each landholding including the
crop improvements x x x.

It is the Board’s view to adopt all the data used by the LandBank in the revaluation except for the
coconut land the average gross production of which is 912 kilograms per hectare for both
landholdings x x x.76

However, in Manalo’sCommissioners’ Report in Civil Case No. 4436-2K3, it is particularly

noted that LBP’s computations were based on field investigations which were conducted in 1991
– or more than two and a half years (2-1/2) prior to the taking of the property in 1993, and it
useddata obtaining in 1991 and 1983 tax declarations,77 which are clearly outdated and could
not form the basis for an accurate and fair computation of just compensation for Galle’s estate,
given the fundamental principle ineminent domain that "the owner shall receive the market value
of his property at the time of the taking."78 These findings were not denied nor refuted by LBP
in its Manifestations/Comments79 to the Commissioners’ Report and Calapardo’s Dissenting
Opinion; on the contrary, it appears to have agreed to Calapardo’s computation of just
compensation at ₱20,645,445.00.80

Indeed, in its August 15, 2005 Resolution, the SAC observed that –

10. LBP did not present any documentsto show how it arrived at the value of ₱7,534,063.91.
Neither did it explain in any pleading how this amount was determined. It did not show the basis
for whatever factors it used nor the authorities or sources of its data and information.
Furthermore, it did not dispute plaintiff’s assertion that no actual field inspection of the property
was conducted as it claimed it did in 1991.81

In its Motion for Reconsideration82 of the above Resolution, LBP even admitted that from the
start, it utilized 1988 tax declarations for Galle’s estate in arriving at its computation of just
compensation at ₱7,534,063.92;83 it simply assumedthat in 1993 – the time of taking– the same
values in the 1988 tax declarations still applied.

In a past pronouncement this Court finds relevant, it was held that – In this particular case, the
tax declarations presented by the petitioner as basis for just compensation were made by the
Lapu-Lapu municipal, later city assessor long before martial law, when land was not only much
cheaper but when assessed values of properties were stated in figures constituting only a fraction
of their true market value. The private respondent was not even the owner of the properties at the
time. Itpurchased the lots for development purposes. To peg the value of the lots on the basis of
documentswhich are out of date and at prices below the acquisition cost of present owners would
be arbitrary and confiscatory.84

For the above reasons, the October 15, 1996 DARAB Decision in Case No. JC-RIX-ZAMBO-
0011-CO is patently defective and erroneous for being based on wrong and outdated information,
and thus null and void.

No prescription or forum-shopping withrespect to Civil Case No. 4436-2K3

With the above pronouncement, it becomes clear that Galle was not precluded from instituting
Civil Case No. 4436-2K3. Being null and void, it is as if the October 15, 1996 DARAB Decision
in Case No. JC-RIX-ZAMBO-0011-CO was never issued. Thus, Galle was never constrained by
the application of Rule XIII, Section 11 of the 1994 DARAB Rules of Procedure requiring the
filing of a case directly withthe SAC within 15 days from notice of the DARAB’s Decision
fixing just compensation.

It likewise follows that there is no forum-shopping involved. Even if we were to consider Civil
Case No. 4574, still no forum-shopping was committed; the trial court in said case did not have
jurisdiction over cases for the fixing of just compensation, and any remedy obtained by Galle in
said court relative to the fixing of just compensation for her estate is of no value, being
susceptible as it is to nullification.

The SAC’s August 15, 2005 Resolution and the assailed CA Decision

As already discussed, the determination of just compensation is a judicial function. Moreover,

both Section 17 of RA 6657 and the formula prescribed in the applicable AO of the DAR must
be considered in the computation.

Reading the August 15, 2005 Resolution inits entirety, it readily appears that the SAC did not
apply the formula in the applicable Administrative Circulars of the DAR (AOs 6 and 11) in
arriving at its own independent valuation of Galle’s estate. It relied upon Manalo’s
Commissioners’ Report, which likewise did not apply the formula in AOs 6 and 11,85 although
it took into consideration some of the factors laid down in Section 17 of RA 6657.86

The CA is guilty of the same mistake.Nowhere in the appellate court’s decision can it be seen
that the formula prescribed by AOs 6 and 11 were taken into account; all that were considered
were the factors enumerated in Section 17 of RA 6657, which thus makes its pronouncement
incomplete.

Thus, while this Court acknowledges that Galle’s estate was expropriated to the extent of
356.8257 hectaresas the CA has found, the computation ofthe exact amount of just compensation
remains an issue that must be resolved, taking into consideration bothSection 17 of RA 6657 and
AOs 6 and 11. In anearlier case decided by this ponente, it was held that "the evidence to be
presented by the parties before the trial court for the valuation of the property x x x must
conform to Section 17 of RA 6657 and, as far as practicable, DAR Administrative Order No. 6,
series of 1992, as amended by DAR Administrative Order No. 11, series of 1994."87 This was
followed by a recent pronouncement to the same effect, thus:

In the recent case of Land Bank of the Philippines v. Honeycomb Farms Corporation, we again
affirmed the need to apply Section 17 of R.A. No. 6657 and DAR AO 5-98 in just compensation
cases. There, we considered the CA and the RTC in grave error when they opted to come up with
their own basis for valuation and completely disregarded the DAR formula. The need to apply
the parameters required by the law cannot bedoubted; the DAR’s administrative issuances, on the
other hand, partake of the nature of statutes and have in their favor a presumption of legality.
Unless administrative orders are declared invalid or unless the cases before them involve
situations these administrative issuances do not cover, the courts must apply them.

In other words, in the exercise ofthe Court’s essentially judicial function of determining just
compensation, the RTC-SACs are not granted unlimited discretion and must consider and apply
the R.A. No. 6657-enumerated factors and the DAR formula that reflectthese factors. These
factors and formula provide the uniform framework or structure for the computation of the just
compensation for a property subject to agrarian reform. This uniform system will ensure that
they do not arbitrarily fix an amount that is absurd, baseless and even contradictory to the
objectives of our agrarian reform laws as just compensation. This system will likewise ensure
that the just compensation fixed represents, at the very least, a close approximation of the full
and real value of the property taken that is fair and equitable for both the farmer-beneficiaries
and the landowner.

xxxx

After considering these factors and formula, we are convinced that the RTC-SAC completely
disregarded them and simply relied on Branch 36’s valuation. For one, the RTC-SAC did not
point to any specific evidence or cite the values and amounts it used in arriving at the ₱200.00
per square meter valuation. It did not even consider the property’s market value based on the
current tax declaration that Yatco insists the RTC-SAC considered in addition to Branch 36’s
valuation. Assuming that the RTC-SAC considered the property’s market value (which, again,
we find that it did not), this alone will not suffice as basis, unless justified under Item II.A.3 of
DAR AO 5-98 (as provided above). Then too, it did not indicate the formula thatit used in
arriving at its valuation or which led it to believe that Branch 36’s valuation was applicableto this
case. x x x88 (Emphasis and underscoring supplied)

The SAC and the CA may have been of the opinion that reliance on either of the two – Section
17 of RA 6657 or AOs 6 and 11– would suffice.

Remand for the proper computation of just compensation

Taking the foregoing into consideration, there is thus a need to remand the case in order to
properly compute the just compensation that Galle and her heirs are entitled to, including interest
and attorney’s fees, ifany. This Court is not the proper forum for that, asit is not a trier of facts,
and it cannot receive evidence to fix the correct amount of just compensation. For thispurpose,
the CA may be commissioned to receive and evaluate the evidence of the parties; this becomes
especially relevant where the property was taken from its owners way back and the case for just
compensation has been pending for decades, not to mention that the original owner – Susie Galle
– did not live to receive what is due her, even as she fought this protracted court battle.1âwphi1
Considering, however, that the land was acquired in 1989 and the only surviving petitioner is
now an octogenarian and is in need of urgent medical attention, we find these special
circumstances justifying in the acceleration of the final disposition of this case. This Court deems
it best pro hac viceto commission the CA as its agent to receiveand evaluate the evidence of the
parties. The CA’s mandate is to ascertain the just compensation due in accordance with this
Decision, applying Section 17 of RA 6557 and applicable DAR regulations. As explained in
Land Bank of the Philippines v. Gallego, Jr., the remand of cases before this Court to the CA for
the reception of further evidence is not a novel procedure. It is sanctioned by Section 6, Rule 46
of the Rules of Court. In fact, the Court availed of this procedure in quite a few cases.89

Withdrawal of proceeds, pending determination of correct just compensation

In light of the foregoing considerations, it is but just and proper to allow, with becoming
dispatch, withdrawal of the revised compensation amount, albeit protested. The concept of just
compensation contemplates of just and timely payment; it embraces not only the correct
determination of the amount to be paid to the landowner, but also the payment ofthe land within
a reasonable time from its taking. Without prompt payment, compensation cannot, as Land Bank
of the Philippines v. Court of Appeals instructs, be considered "just," for the owner is made to
suffer the consequence of being immediately deprived of his land while being made to wait for
years before actually receiving the amount necessary to cope with his loss.90

Using the foregoing pronouncement as precedent, this Court opts to grant, in the interest of
justice, Galle’s heirs the right to withdraw the amount of ₱7,534,063.91, which LBP iswilling to
compensate the respondents for their mother’s estate, in the meantime that the case is pending
determination anew in the CA.

With the view taken of the case, there is no need to resolve the other issues raised by the parties.
Particularly, the procedural issues raised in G.R. No. 171836 merit no further discussion since
the very soul of the Petition therein - allegations of prescription and forum-shopping - has been
struck down in this disquisition.

WHEREFORE, the Court resolves as follows:

1. The Petition in G.R. No. 171836 is DENIED. The assailed September 23, 2004
Decision and February 22, 2006 Resolution of the Court of Appeals in CA-G.R. SP No.
80678 are AFFIRMED; 2. The Petition in G.R. No. 195213 is GRANTED IN PART. The
assailed July 27, 2010 Consolidated Decision and January 19, 2011 Resolution of the
Court of Appeals in CA-G.R. SP No. 00761-MIN and CA-G.R. SP No. 00778-MIN are
REVERSED and SET ASIDE.

3. Civil Case No. 4436-2K3 is REMANDED to the Court of Appeals, which is directed
to receive evidence and immediately determine the just compensation due to Susie Irene
Galle's estate/heirs - including all applicable damages, attorney's fees and costs, if any -
in accordance with this Decision, taking into consideration Section 17 of Republic Act
No. 6657, the applicable Department of Agrarian Reform Administrative Orders,
including Administrative Order No. 6, Series of 1992, as amended by Administrative
Order No. 11, Series of 1994, and prevailing jurisprudence. The Court of Appeals is
further directed to conclude the proceedings and submit to this Court a report on its
findings and recommendations within 90 days from notice of this Decision; and

4. The petitioner Land Bank of the Philippines is ORDERED to PAY Susie Irene Galle's
estate or heirs - herein respondents - the amount of SEVEN MILLION FIVE HUNDRED
THIRTY FOUR THOUSAND SIXTY THREE AND 91/100 PESOS (₱7,534,063.91), in
cash, immediately upon receipt of this Decision.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice