32. Lubrica vs.

Landbank
LUBRICA, in her capacity as assignee of the SUNTAYs On May 26, 2004, CA rendered a Decision in favor of the
vs. LANDBANK Suntays. CA held that the RTC correctly ordered
G.R. No. 170220, November 20, 2006
Landbank to deposit the amounts provisionally determined
by the PARAD as there is no law which prohibits Landbank
YNARES-SANTIAGO, J.:
to make a deposit pending the fixing of the final amount of
just compensation. It also noted that there is no reason for
TOPIC: Land Valuation
Landbank to further delay the deposit considering that the
DAR already took possession of the properties and
DOCTRINE: Determination of Just Compensation; When
distributed the same to farmer-beneficiaries as early as
Does it Start.
1972.
FACTS:
Landbank moved for reconsideration which was granted.
Lubrica is the assignee of Federico C. Suntay over certain
In the Amended Decision, CA held that the immediate
parcels of agricultural land located at Occidental Mindoro,
deposit of the preliminary value of the expropriated
with an area of 3,682.0285 hectares. In 1972, a portion of
properties is improper because it was erroneously
the said property with an area of 311.7682 hectares, was
computed. Citing Gabatin v. Land Bank of the
placed under the land reform program pursuant to P.D.
Philippines, it held that the formula to compute the just
No. 27 and E.O. No. 228. The land was thereafter
compensation should be: Land Value = 2.5 x Average
subdivided and distributed to farmer beneficiaries. DAR
Gross Production x Government Support
and the Landbank fixed the value of the land at
Price. Specifically, it held that the value of the government
P5,056,833.54 which amount was deposited in cash and
support price for the corresponding agricultural produce
bonds in favor of Lubrica. (Land 1)
(rice and corn) should be computed at the time of the legal
taking of the subject agricultural land, that is, on  October
On the other hand, Nenita Suntay-Taedo and Emilio A.M.
21, 1972 when landowners were effectively deprived of
Suntay III inherited from Federico Suntay a parcel of
ownership over their properties by virtue of P.D. No.
agricultural land located at Occidental Mindoro consisting
27. According to CA, the PARAD incorrectly used the
of two lots, namely, Lot 1 with an area of 45.0760 hectares
amounts of P500 and P300 which are the prevailing
and Lot 2 containing an area of 165.1571 hectares or a
government support price for palay and corn, respectively,
total of 210.2331 hectares. Lot 2 was placed under the
at the time of payment, instead of P35 and P31, the
coverage of P.D. No. 27 but only 128.7161 hectares was
prevailing government support price at the time of the
considered by Landbank and valued the same at
taking in 1972.
P1,512,575.05. (Land 2)
Hence, this petition.
Suntays rejected the valuation of their properties, hence
the PARAD conducted summary administrative
ISSUE: WON the determination of just compensation
proceedings for determination of just
should be based on the value of the expropriated
compensation. On January 29, 2003, the PARAD fixed the
properties at the time of payment and not when the law (in
preliminary just compensation at P51,800,286.43 for the
this case, as of October 21, 1972 when P.D. No. 27) took
311.7682 hectares and P21,608,215.28 for the 128.7161
effect.
hectares.
RATIO: YES. The case of Land Bank of the Philippines v.
Not satisfied with the valuation, Landbank filed
Natividad  reiterated the Courts ruling in Office of the
on February 17, 2003, two separate petitions for judicial
President v. Court of Appeals that the expropriation of the
determination of just compensation before the RTC of San
landholding did not take place on the effectivity of P.D. No.
Jose, Occidental Mindoro, acting as a SAC.
27 on October 21, 1972 but seizure would take effect on
the payment of just compensation judicially determined.
Suntays filed separate Motions to Deposit the Preliminary
Valuation Under Section 16(e) of CARL and Ad Cautelam
Likewise, in the recent case of Heirs of Francisco R.
Answer praying among others that Landbank deposit the
Tantoco, Sr. v. Court of Appeals,[26] we held that
preliminary compensation determined by the PARAD. RTC
expropriation of landholdings covered by R.A. No. 6657
granted the motion of the Suntays.
take place, not on the effectivity of the Act on June 15,
1988, but on the payment of just compensation.
Thus, on June 17, 2003, Landbank filed with CA a Petition
 
for Certiorari and Prohibition with application for the
In the instant case, petitioners were deprived of their
issuance of a TRO and Writ of Preliminary Injunction. CA
properties in 1972 but have yet to receive the just
issued a 60-day TRO and a writ of preliminary injunction.
compensation therefor. The parcels of land were already
 
subdivided and distributed to the farmer-beneficiaries

MICHAEL JOSEPH NOGOY 1

 32. Lubrica vs. Landbank
thereby immediately depriving petitioners of their
use. Under the circumstances, it would be highly
inequitable on the part of the petitioners to compute the
just compensation using the values at the time of the
taking in 1972, and not at the time of the payment,
considering that the government and the farmer-
beneficiaries have already benefited from the land
although ownership thereof have not yet been transferred
in their names. Petitioners were deprived of their
properties without payment of just compensation which,
under the law, is a prerequisite before the property can be
taken away from its owners. The transfer of possession
and ownership of the land to the government are
conditioned upon the receipt by the landowner of the
corresponding payment or deposit by the DAR of the
compensation with an accessible bank. Until then, title
remains with the landowner.

We also note that the expropriation proceedings in the

instant case was initiated under P.D. No. 27 but the
agrarian reform process is still incomplete considering that
the just compensation to be paid to petitioners has yet to
be settled. Considering the passage of R.A. No. 6657
before the completion of this process, the just
compensation should be determined and the process
concluded under the said law. Indeed, R.A. No. 6657 is the
applicable law, with P.D. No. 27 and E.O. No. 228 having
only suppletory effect.

RULING: [T]he petition is GRANTED. The assailed

Amended Decision dated October 27, 2005 of the Court of
Appeals in CA-G.R. SP No. 77530 is REVERSED and
SET ASIDE. The Decision dated May 26, 2004 of the
Court of Appeals affirming (a) the March 31, 2003 Order of
the Special Agrarian Court ordering the respondent Land
Bank of the Philippines to deposit the just compensation
provisionally determined by the PARAD; (b) the May 26,
2003 Resolution denying respondents Motion for
Reconsideration; and (c) the May 27, 2003 Order directing
Teresita V. Tengco, respondents Land Compensation
Department Manager to comply with the March 31, 2003
Order, is REINSTATED.

MICHAEL JOSEPH NOGOY 2