Hacienda Luisita Incorporated vs Presidential Agrarian Reform Council, et al., Case Digest G.R. No. 171101 November 22, 2011Hacienda Luisita Incorporated vs Presidential Agrarian Reform Council, et al.,

Facts:

The SC en banc voted 11-0 dismissing the petition filed by HLI Affirm with modifications the resolutions of the Presidential Agrarian Reform Council (PARC for brevity) revoking Hacienda Luisita Inc. (HLI for brevity) Stock Distribution Plan (SDP) and placing the subject land in HL under compulsory coverage of the CARP of the government.

Thereafter, the SC voting 6-5 averred that there are operative facts that occurred in the premises. The SC thereat declared that the revocation of the SDP shall, by application of the operative fact principle, give the 5296 qualified Farmworkers Beneficiaries (FWBs for brevity) to choose whether they want to remain as HLI stockholders or choose actual land distribution. Considering the premises, DAR immediately scheduled a meeting regarding the effects of their choice and therefrom proceeded to secret voting of their choice.

The parties, thereafter, filed their respective Motion for Reconsideration regarding the SCs decision.

Issue:

1) Whether or not operative fact doctrine is applicable in the said case.

2) Whether or not Sec. 31 of R.A. 6657 unconstitutional.

3) Whether or not the 10-year period prohibition on the transfer of awarded lands under RA 6657 lapsed on May 10, 1999, since Hacienda Luisita were placed under CARP coverage through the SDOA scheme on May 11, 1989, and thus the qualified FWBs should now be allowed to sell their land interests in Hacienda Luisita to third parties, whether they have fully paid for the lands or not?

4) Whether or not qualified FWBs shall be entitled to the option of remaining as stockholder be reconsidered.

Ruling:

1) Operative Fact Doctrine is applicable to the instant case. The court ruled that the doctrine is not limited only to invalid or unconstitutional law but also to decisions made by the president or the administrative agencies that have the force and effect of laws, especially if the said decisions produced acts and consequences that must be respected. That the implementation of PARC resolution approving SDP of HLI manifested such right and benefits favorable to the FWBs;

2) The SC said that the constitutionality of Sec. 31 of R.A. 6657 is not the lis mota of the case and it was not raised at the earliest opportunity and did not rule on the constitutionality of the law;

3) The SC ruled that it has not yet lapsed on May 10, 1999, and qualified FWBs are not allowed to sell their land interest in HL to third parties; That the start of the counting of the prohibitive period shall be ten years from the issuance and registration of the Emancipation Patent (EP for brevity) or Certificate of Land Ownership Award (CLOA for brevity), and considering that the EPs and CLOAs have not yet been issued, the prohibitive period has not started yet.

4) The SC ruled in the affirmative, giving qualified FWBs the option to remain as stockholder

YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to remain as stockholders of HLI should be reconsidered.

[The Court reconsidered its earlier decision that the qualified FWBs should be given an option to remain as stockholders of HLI, inasmuch as these qualified FWBs will never gain control [over the subject lands] given the present proportion of shareholdings in HLI. The Court noted that the share of the FWBs in the HLI capital stock is [just] 33.296%. Thus, even if all the holders of this 33.296% unanimously vote to remain as HLI stockholders, which is unlikely, control will never be in the hands of the FWBs. Control means the majority of [sic] 50% plus at least one share of the common shares and other voting shares. Applying the formula to the HLI stockholdings, the number of shares that will constitute the majority is 295,112,101 shares (590,554,220 total HLI capital shares divided by 2 plus one [1] HLI share). The 118,391,976.85 shares subject to the SDP approved by PARC substantially fall short of the 295,112,101 shares needed by the FWBs to acquire control over HLI.]

The SC PARTIALLY GRANTED the motions for reconsideration of respondents PARC, et al., The 6,296 original FWBs shall forfeit and relinquish their rights over the HLI shares of stock issued to them in favor of HLI. The HLI Corporate Secretary shall cancel the shares issued to the said FWBs and transfer them to HLI in the stocks and transfer book. The 4,206 non-qualified FWBs shall remain as stockholders of HLI.

Land Bank vs. Dumlao (2008)FACTSThe DUMLAOS were co-owners of a 32 hectare rice lands in Nueva Vizcaya which was placed under OLT by virtue of PD27 (note thatactual date of taking was not stated.)The DAR made a preliminary valuation on 16 hectares (2 lots) and payments were made to the DUMLAOs by Landbank. The DUMLAOs filed a complaint before the RTC to determine just compensation, and requested the appointment of 3 commissioners to make the determination. The DAR moved to dismiss claiming that the RTC does not have jurisdiction.The RTC eventually recognized the case and ordered payment at 6,912.50 per hectare for one lot & to follow the amount provided for in the Land Valuation Summary and Farmers Undertaking for the other lot. The DUMLAOs was claiming market value of 109,000 per hectare. The DUMLAOs appealed to the CA which ruled in their favor, which noted that the time of taking was not certain. The CA held that after the passage of RA No. 6657, the formula relative to valuation under PD No.27 no longer applies. Under PD 27 and EO No. 228, the formula for computing the Land Value (LV) or Price Per Hectare(PPH) of rice and corn lands is:2.5 x AGP x GSP = LV or PPH.Under the CARL, it is provide:Sec. 17.Determinationof Just Compensation.In determiningjust compensation, the costof acquisition of the land, the current value of the like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment made by government assessors shall be considered. The social and economic benefits contributed by the farmers and thefarm workers and by the Government tothe property as well asthe non-payment of taxesor loans secured from any government financing institution on the said land shall be considered as additional factors to determine its valuation.ISSUEWhich law should be followed to determine just compensation.

HELD(1)The just compensation due to respondents should be determined under the provisions of RA No.6657.The Court has repeatedly held that if just compensation wasnot settled prior to the passage of RANo.6657, it should be computed in accordance with said law, although the property was acquired under PD No.27. The latter law, being the latestlaw inagrarian reform, shouldcontrol, asheld inLand Bank of the Philippines v. Heirs of Angel T. Domingo .Section 75 of RA 6657 clearly states that the provisions of PD 27 and EO 228 shall only have a suppletory effect. Section 7 of the Act also provides Sec. 7. Priorities.The DAR, in coordination with the PARC shall plan and program the acquisition and distribution of all agricultural lands through a period of ten (10) years from the effectivity of this Act. Lands shall be acquired and distributed as follows:Phase One: Rice and Corn lands under P.D. 27; all idle or abandoned lands; all private lands voluntarily offered by the owners for agrarian reform; x x x and all other lands owned by the government devoted to or suitable for agriculture, which shall be acquired and distributed immediately upon the effectivity of this Act, with the implementation to be completed within a period of not more than four (4) years.This demonstrates that RA 6657 includes PD 27 lands among the properties which the DAR shall acquire and distribute to the landless.DARs failure to determine the just compensation for a considerable length of time makes it inequitable to follow the guidelines provided by PD No. 27 and EO No. 228.Hence, RA No. 6657 should apply. NOTE HOWEVER that the CAs act of setting just compensation in the amount of P109,000.00 would have been a valid exercise of this judicial function, had it followed the mandatory formula prescribed by RA No. 6657. However, the appellate court merely chose the lower of two (2) values specified by the commissioner as basisfor determining justcompensation, namely:(a)P109,000.00 per hectareas the market valueof first class un irrigated rice land in the Municipality of Villaverde; and (b)P60.00 per square meter as the zonal value of the land in other barangaysin Villaverde.

This is likewise erroneous because it does not adhere to the formula provided by RA No. 6657 underSection 17, as implemented through DAR Admin Order No. 6 (1992) - LV = (CNI x 0.6) + (CS x 0.3) + (MV x0.1),where:LV=LandValueCNI=CapitalizedNetIncomeCS=ComparableSalesMV=MarketValueperTaxDeclaration(2) The taking of the properties for the purpose of computing just compensation should bereckoned from the date of issuance of emancipation patents.The natureof thelandatthattimedetermines thejust compensation tobe paid.

(3) The DUMLAOs are entitled to payment of just compensation on their entire landholdings covered by Operation Land Transfer, except for the five hectares of retention area each of them are entitled to (RIGHT OF RETENTION).The determination of just compensation is judicial in nature. The DARs land valuation is only preliminary and is not, by any means, final and conclusive upon the landowner or any other interested party. In the exercise of its functions, the courts still have the final say on what the amount of just compensation will be .A reading of Section 18 of RA No. 6657 shows that it is the courts, not the DAR, which make the final determination of just compensation. Also, to wait for the DAR valuation despite its unreasonable neglect and delay in processing the four properties claim folders is to violate the elementary rule that payment of just compensation must be within areasonable period from the taking of property. While the DAR is vested with primary jurisdiction to determine in a preliminary manner the amount of just compensation, the circumstances of this case militate against the application of the doctrine of primary jurisdiction.

LBP vs CA 256 scra 404.I. FACTSIn this agrarian dispute, it is once more imperative that the aforestated principles be applied in its resolution. Separatepetitions for review were filed by petitioners Department of Agrarian Reform (DAR) and Land Bank of the following theadverse ruling by the Court of Appeals. Private respondents are landowners whose landholdings were acquired by theDAR and subjected to transfer schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law.Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and payment ofcompensation for their land, they sought to compel the DAR to expedite the pending summary administrative proceedingsto finally determine the just compensation of their properties, and the Landbank to deposit in cash and bonds the amountsrespectively "earmarked", "reserved" and "deposited in trust accounts" for private respondents, and to allow them towithdraw the same.DAR and Land Bank filed for petitions but it was dismissed and they filed a Motion for Reconsideration.

II. ISSUESWhether or not the opening of "trust accounts" is within the coverage of term "deposit.III. HELDThe provision is very clear and unambiguous, foreclosing any doubt as to allow an expanded construction that wouldinclude the opening of "trust accounts" within the coverage of term "deposit. Accordingly, we must adhere to the well-settled rule that when the law speaks in clear and categorical language, there is no reason for interpretation orconstruction, but only for application. The validity of constituting trust accounts for the benefit of the rejecting landowners and withholding immediate payment to them is further premised on the latter's refusal to accept the offered compensation thereby making it necessary that the amount remains in the custody of the LBP for safekeeping and in trust for eventual payment to the landowners.As an exercise of police power, the expropriation of private property under theCARP puts t he landowner, and not thegovernment, in a situation where theodds are already stacked againsthis favor.He has no recourse but to allow it.His only consolation is that he can negotiate for the amount of compensation to be paid for the expropriated property. Unduly burdening the property owners from the resulting flaws in the implementation of the CARP which was supposed to have been a carefully crafted legislation is plainly unfair and unacceptable.

LAND BANK OF THE PHILIPPINES,petitioner,vs.COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT& DEVELOPMENT CORP.,respondents.G.R. No.118712October 6, 1995 (2D)DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform,petitioner,vs.COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT& DEVELOPMENT CORP., ET AL.,respondents.G.R. No.118745October 6, 1995Facts:Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR)(G.R. No. 118745) and Land Bank of the Philippines (LBP) (G.R. No. 118712) following the adverse rulingby the Court of Appeals, granting private respondents' Petition forCertiorariandMandamus. However,upon motion filed by private respondents, the petitions were ordered consolidated. Likewise,petitioners seek the reversal ofthe Resolution, denying their motion for reconsideration.Private respondents are landowners whose landholdings were acquired by the DAR andsubjected to transfer schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law(CARL). Aggrieved by the alleged lapses of the DAR and LBP with respect to the valuation and paymentof compensation for their land pursuant to the provisions of RA 6657, private respondents filed with theCourt a Petition forCertiorariandMandamuswith prayer for preliminary mandatory injunction. Privaterespondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction andwith grave abuse of discretion because it permits the opening of trust accounts by the LBP, in lieu ofdepositing in cash or bonds in an accessible bank designated by the DAR, the compensation for the landbefore it is taken and the titles are cancelled as provided under Section 16(e) of RA 6657.Privaterespondents also assail the fact that the DAR and the LBP merely "earmarked", "deposited in trust" or"reserved" the compensation in their names aslandowners despite the clear mandate that before takingpossession of the property, the compensation must be deposited in cash or in bonds. The respondentcourt rendered the assailed decision in favor of private respondents.Petitioners filed a motion forreconsideration but respondent court denied the same, hence, the instant petitions.Issue:Whether or not thedeposit may be made in other forms besides cash or LBP bondsHeld:In the present suit, the DAR clearly overstepped the limits of its power to enact rules andregulations when it issued Administrative Circular No. 9. There is no basis in allowing the opening of atrust account in behalf of the landowner as compensation for his property because Section 16(e) of RA6657 is very specific that the deposit must be made only in "cash" or in "LBP bonds". If it were theintention to include a "trust account" among the valid modes of deposit that should have been madeexpress, or at least, qualifying words ought to have appeared from which it can be fairly deduced that a"trust account" is allowed.The ruling in the "Association" case merely recognized the extraordinary nature of theexpropriation 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, dispensewith the settled rule that there must be full payment of just compensation before the title to theexpropriated property is transferred.Issue:Whether or not there should be a distinction the deposit of compensation and determination ofjust compensationHeld:To withhold the right of the landowners to appropriate the amounts already deposited in theirbehalf as compensation for their properties simply because they rejected the DAR's valuation, andnotwithstanding that they have already been deprived of the possession and use ofsuch properties is anoppressive exercise of eminent domain. It is unnecessary to distinguish between deposit ofcompensation (provisional) under Section 16(e) and determination of just compensation (final) underSection 18 for purposes of exercising the landowners' right to appropriate the same. The immediateeffect in both situations is the same the landowner is deprived of the use and possession of his propertyfor which he should be fairly and immediately compensated

G.R. No. 167735 April 18, 2012LAND BANK OF THE PHILIPPINES,Petitioner,vs.HEIRS OF SALVADOR ENCINAS and JACOBA DELGADO,Respondents.D E C I S I O NBRION,J.:We resolve the petition for review on certiorari,1filed by the Land Bank of the Philippines (petitioner), that challenges the July 22, 2004 decision2and the April 6, 2005 resolution3of the Court of Appeals (CA) in CA-G.R. SP No. 78596. The CA decision dismissed the petitioners petition for review for lack of merit. The CA resolution denied the petitioners subsequent motion for reconsideration.The Factual AntecedentsThe late Spouses Salvador and Jacoba Delgado Encinas were the registered owners of a 56.2733-hectare agricultural land in Tinago, Juban, Sorsogon, under Original Certificate of Title (OCT) No. P-058. When Republic Act No. (RA) 66574took effect,5the heirs of the spouses Encinas, Melchor and Simon (respondents), voluntarily offered to sell the land to the government through the Department of Agrarian Reform (DAR).On August 21, 1992, the DAR conducted a field investigation of the land.6On October 27, 1997, the DAR submitted the respondents claimfolder to the petitioner for computation of the lands valuation.7The petitioner valued the land at P819,778.30 (or P22,718.14 per hectare) for the acquired area of 35.9887 hectares (subject land).8Upon the DAR's application, accompanied by the petitioners certification of deposit of payment,9the Register of Deeds of Sorsogon partially cancelled OCT No. P-058 corresponding to the 35.9887-hectare covered area, and issued Transfer Certificate of Title Nos. 49948 and 49949 in the name of the Republic of the Philippines on December 5, 1997.10Meanwhile, since the respondents rejected the petitioners valuation of P819,778.30, the DAR Adjudication Board (DARAB) undertook a summary administrative proceeding for the determination of just compensation.11On February 6, 2001, Adjudicator Manuel M. Capellan fixed the value of just compensation at P3,590,714.00, adopting the DARABs valuation on the property of Virginia Balane in Rangas, Juban, Sorsogon that fixed the just compensation at P99,773.39 per hectare.12Following the denial of its motion for reconsideration,13the petitioner filed on September 26, 2003 a petition for determination of just compensation with the Regional Trial Court (RTC) of Sorsogon City, Branch 52, sitting as a Special Agrarian Court (SAC).14At the trial, the petitioners witnesses15testified on the condition of the subject land when the DAR conducted the field investigation in 1992,16and that the petitioner based its P819,778.30 valuation on DAR AO No. 11, series of 1994. The petitioner offered as documentary evidence the DAR field investigation report,17the claims and processing form, a copy of DAR AO No. 11, series of 1994, and the field investigation report on Balanes property.18On the other hand, the respondents witnesses19testified on the current number of trees in the subject land and the estimated board feet each tree could produce as lumber,20the cost of each fruit-bearing tree,21and the previous offer to sell the land.22The respondents offered as documentary evidence the recent private field investigation report of their witness, Wilfredo Embile, and the Commissioners Report of Provincial Assessor Florencio Dino in Civil Case No. 6331 (Vivencio Mateo, et al. v. DAR, et al.) on the just compensation involving another property.The RTC RulingIn its April 23, 2003 decision,23the RTC fixed the just compensation at P4,470,554.00, based on: (1) comparable transactions in the nearby locality; (2) the DARABs valuation on Balanes property; (3) the updated schedule of fair market value of real properties in the Province of Sorsogon (Sanggunian Panlalawigan Resolution No. 73-99); (4) the value and the produce of coconuts, fruits, narra, and other trees, and the number of board feet extractable from said trees; and (5) the lands current condition and potential productivity, thus:Taking into consideration x x x the comparable sale transactions of similar nearby places as admissible in evidence (MRR vs. Velasco case), the decision of the DARAB on VOS of Virginia Balane located at Rangas, Juban, Sorsogon whereby the Board fixed the valuation at P99,773.39 per hectare, the number of nuts produced from the 1500 coconut trees found by the representative of the Petitioner Land Bank as per Field Investigation Report (Exh. "B") so that after ten years since its inspection on August 21, 1992 all coconut trees are fruit bearing now and granting that each tree can produce nuts per 45 days, then 45 nuts can be produced per tree per year, 1500 trees can produce 67,500 nuts in eight harvest per year and when converted to copra can produce 16,750 kilos, 540,000 nuts per year for the 1500 coconut trees on the 35,9887 hectares equals 108,000 kilos at P8.00 per kilo, the land can get P864,000.00 yearly and one/half of that shall go to landowner which is P432,000.00, the Court also considers the value of the fruit bearing trees consisting of 6 guava trees for a total value of P34,000.00, 3 avocado trees for a total value of P6,000.00, 10 langka trees for a total value of P4,000.0 and 300 banana hills for the total value of P78,000.00, and or a grand total of P194,880.00 and the timber producing trees consisting of 100 narra trees with an extractable lumber of no less 5,000 bd. ft at P55.00 per bd. ft or a total value of P275,000.00 and other trees with a total bd. ft. of 2,700 bd. ft at P27.00 per bd. ft or a total value of P172,900.00. The Field Investigation Report (Exh. "B") state also that in the portion for acquisition, there is a hectare of Nipa and according to the Sanggunian Panlalawigan Provincial Ordinance No. 73-99, Sec. 10-Valuation of Perennial Trees, Plants and Other Improvements on Agricultural Land, the value of Nipa Improvement in a 5th class Municipality is P13,400.00 per hectare and summing all of the valuation on the above improvements, the Court hereby fixes the just compensation for the area of 35.9887 hectares subject for acquisition in the total value of P4,470,554.00.24The RTC did not consider the petitioners P819,778.30 valuation because it was "unrealistically low,"25based on a field investigation report made 11 years ago, compared to the report of the respondents representative on the current condition of the property.26With the denial27of its motion for reconsideration,28the petitioner elevated its case to the CA via a petition for review under Rule 42 of the Rules of Court.29The CA RulingIn its July 22, 2004 decision, the CA dismissed the petition for review for lack of merit, recognizing the jurisdiction and supposed expertise of the DARAB and the RTC, as a SAC.30It found that the petitioners P819,778.30 valuation for 35.9887 hectares was unconscionably low31and that the RTCs P4,470,554.00 valuation substantially complied with the factors prescribed by Section 17 of RA 6657.32After the denial33of its motion for reconsideration,34the petitioner came to this Court.The PetitionThe petitioner argues that the RTC failed to use the formula provided by Section 17 of RA 6657 in fixing the lands valuation at P4,470,554.00; the RTC erroneously considered the lands potential, not actual, use, as well as the lands condition in 2003, many years after the DAR conducted the field investigation in 1992.The Case for the RespondentsThe respondents, invoking the RTCs judicial discretion in the determination of just compensation, submit that the RTCs valuation is reasonable, based on the guidelines set by Section 17 of RA 6657.The IssueThe core issue boils down to whether the CA erred in affirming the RTC decision fixing the just compensation at P4,470,554.00 for the respondents 35.9887-hectare agricultural land.Our RulingWe find merit in the petition.The "taking of private lands under the agrarian reform program partakes of the nature of an expropriation proceeding."35In computing the just compensation for expropriation proceedings, the RTC should take into consideration the "value of the landat the time of the taking, not at the time of the rendition of judgment."36"The time of taking is the time when the landowner was deprived of the use and benefit of his property, such as when title is transferred to the Republic."37In determining the just compensation, the RTC is also required to consider the following factors enumerated in Section 1738of RA 6657: (1) the acquisition cost of the land; (2) the current value of the properties; (3) its nature, actual use, and income; (4) the sworn valuation by the owner; (5) the tax declarations; (6) the assessment made by government assessors; (7) the social and economic benefits contributed by the farmers and the farmworkers, and by the government to the property; and (8) the non-payment of taxes or loans secured from any government financing institution on the said land, if any.1wphi1Pursuant to its rule-making power under Section 49 of RA 6657, the DAR translated these factors into the following basic formula in computing just compensation:39LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)Where: LV = Land ValueCNI = Capitalized Net IncomeCS = Comparable SalesMV = Market Value per Tax DeclarationWe have repeatedly stressed40that these factors and formula are mandatory andnot mere guidesthat the SAC may disregard. "While the determination of just compensation is essentially a judicial function vested in the RTC acting as a [SAC], the judge cannot abuse his discretion by not taking into full consideration the factors specifically identified by law and implementing rules. [SACs] arenot at liberty to disregardthe formula laid down [by the DAR], because unless an administrative order is declared invalid, courts have no option but to apply it. The [SAC] cannot ignore, without violating the agrarian law, the formula provided by the DAR for the determination of just compensation."41In this case, we cannot accept the RTCs P4,470,554.00 valuation for the respondents 35.9887-hectare agricultural land as it failed to comply with the mandated requirements of the law and applicable DAR regulation on the fixing of just compensation.1wphi1Instead of taking into account the condition of the subject land at the time of taking n December 5, 1997 when the title was transferred to the Republic of the Philippines,42the RTC considered the respondents evidence on the condition of the subject land at the time of rendition of the judgment, as well the updated schedule of fair market value of real properties in the Province of Sorsogon (Sanggunian Panlalawigan Resolution No. 73-99). The RTC made use of no computation or formula to arrive at the P4,470,554.00 figure. In fact, it simply enumerated the respondents evidence and plucked out of thin air the amount of P4,470,554.00.In the same vein, we cannot accept the petitioners P819,778.30 valuation since it was based on the condition of the subject land at the time of the field investigation in 1992, not at the time of the taking of the subject land in 1997. Besides, the petitioner offered no testimony to show how the P819,778.30 figure was arrived at; its witness merely stated that the P819,778.30 valuation was based on DAR AO No. 11, series of 1994.43In the absence of sufficient evidence for the determination of just compensation, we are constrained to remand the present case to the SAC for the determination of just compensation, in accordance with Section 17 of RA 6657 and DAR AO No. 02-09 dated October 15, 2009, the latest DAR issuance on fixing just compensation.WHEREFORE, the petition isGRANTED. The July 22, 2004 decision and the April 6, 2005 resolution of the Court of Appeals in CA-G.R. SP No. 78596 are herebyREVERSEDandSET ASIDE. The case isREMANDEDto the Regional Trial Court of Sorsogon City, Branch 52 to determine the just compensation in Civil Case No. 2001-6911, strictly in accordance with Section 17 of Republic Act No. 6657 and Department of Agrarian Reform Administrative Order No. 02-09 dated October 15, 2009.G.R. No. 157206The FactsThis is an appeal via a petition[2]for review oncertiorariunder Rule 45 of the Rules of Court of the Decision[3]of the Court of Appeals dated July 29, 2002 in CA-G.R. SP No. 63691 entitledLand Bank of thePhilippinesv. Hon. Venancio J. Amila, in his capacity as Presiding Judge, Regional Trial Court, Branch 3, Tagbilaran City, Spouses Placido Orilla and Clara Dy Orilla.Said Decision affirmed the Order[4]datedDecember 21, 2000of the Regional Trial Court (RTC), Branch 3,TagbilaranCity, sitting as a Special Agrarian Court (SAC) in Civil Case No. 6085.Spouses Placido and Clara Orilla (respondents) were the owners of Lot No. 1, 11-12706, situated inBohol, containing an area of 23.3416 hectares and covered by Transfer Certificate of Title No. 18401.In the latter part of November 1996, the Department of Agrarian Reform Provincial Agrarian Reform Office (DAR-PARO) of Bohol sent respondents a Notice of Land Valuation and Acquisition dated November 15, 1996 informing them of the compulsory acquisition of 21.1289 hectares of their landholdings pursuant to the Comprehensive Agrarian Reform Law (Republic Act [RA] 6657) forP371,154.99 as compensation based on the valuation made by the Land Bank of the Philippines (petitioner).Respondents rejected the said valuation.Consequently, the Provincial Department of Agrarian Reform Adjudication Board (Provincial DARAB) conducted a summary hearing on the amount of just compensation.Thereafter, the Provincial DARAB affirmed the valuation made by the petitioner.Unsatisfied, respondents filed an action for the determination of just compensation before the Regional Trial Court (as aSpecial Agrarian Court[SAC]) ofTagbilaranCity.The case was docketed as Civil Case No. 6085 and was raffled to Branch 3.For its first ground, petitioner asserts that, according to our ruling inLand Bank of the Philippines v. Court of Appeals,[20]the principle of prompt payment of just compensation is already satisfied by the concurrence of two (2) conditions: (a) the deposits made by petitioner in any accessible bank, equivalent to the DAR/LBP valuation of the expropriated property as provisional compensation, must be in cash and bonds as expressly provided for by Section 16(e) of RA 6657, not merely earmarked or reserved in trust; and (b) the deposits must be immediately released to the landowner upon compliance with the legal requirements under Section 16[21]of RA 6657, even pending the final judicial determination of just compensation.Anent the second ground, petitioner argues that the good reasons cited by the SAC, as affirmed by the Court of Appeals, namely: (1) that execution pending appeal would be in consonance with justice, fairness, and equity considering that the land had long been taken by the DAR; (2) that suspending the payment of compensation will prolong the agony that respondents have been suffering by reason of the deprivation of their property; and (3) that it would be good and helpful to the economy are not valid reasons to justify the execution pending appeal, especially because the execution was granted without a hearing.This appeal should be denied.As the issues raised are interrelated, they shall be discussed jointly.As provided above, execution of the judgment or final order pending appeal is discretionary.As an exception to the rule that only a final judgment may be executed, it must be strictly construed.Thus, execution pending appeal should not be granted routinely but only in extraordinary circumstances.The Rules of Court does not enumerate the circumstances which would justify the execution of the judgment or decision pending appeal.However, we have held that good reasons consist of compelling or superior circumstances demanding urgency which will outweigh the injury or damages suffered should the losing party secure a reversal of the judgment or final order.The existence of good reasons is what confers discretionary power on a court to issue a writ of execution pending appeal.These reasons must be stated in the order granting the same.Unless they are divulged, it would be difficult to determine whether judicial discretion has been properly exercised.[22]In this case, do good reasons exist to justify the grant by the SAC of the motion for execution pending appeal?The answer is a resounding YES.The expropriation of private property under RA 6657 is a revolutionary kind of expropriation,[23]being a means to obtain social justice by distributing land to the farmers, envisioning freedom from the bondage to the land they actually till.As an exercise of police power, it puts the landowner, not the government, in a situation where the odds are practically against him.He cannot resist it.His only consolation is that he can negotiate for the amount of compensation to be paid for the property taken by the government.As expected, the landowner will exercise this right to the hilt, subject to the limitation that he can only be entitled to just compensation.Clearly therefore, by rejecting and disputing the valuation of the DAR, the landowner is merely exercising his right to seek just compensation.[24]In this case, petitioner valued the property of respondents atP371,154.99 for the compulsory acquisition of 21.1289 hectares of their landholdings.This amount respondents rejected.However, the same amount was affirmed by the DAR after the conduct of summary proceedings.Consequently, respondents brought the matter to the SAC for the determination of just compensation.After presentation of evidence from both parties, the SAC found the valuation of the LBP and the DAR too low and pegged the just compensation due the respondents atP7.00 per square meter, or a total ofP1,479,023.00 for the 21.1289 hectares.In determining such value, the SAC noted the following circumstances:n light of these circumstances, the SAC found that the valuation made by petitioner, and affirmed by the DAR, was unjustly way below the fair valuation of the landholding at the time of its taking by the DAR.The SAC, mindful also of the advanced age of respondents at the time of the presentation of evidence for the determination of just compensation, deemed it proper to grant their motion for execution pending appeal with the objective of ensuring prompt payment of just compensation.Contrary to the view of petitioner, prompt payment of just compensation is not satisfied by the mere deposit with any accessible bank of the provisional compensation determined by it or by the DAR, and its subsequent release to the landowner after compliance with the legal requirements set by RA 6657.Constitutionally, just compensation is the sum equivalent to the market value of the property, broadly described as the price fixed by the seller in open market in the usual and ordinary course of legal action and competition, or the fair value of the property as between the one who receives and the one who desires to sell, it being fixed at the time of the actual taking by the government.[26]Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator.It has been repeatedly stressed by this Court that the true measure is not the takers gain but the owners loss.The word just is used to modify the meaning of the word compensation to convey the idea that the equivalent to be given for the property to be taken shall be real, substantial, full, and ample.[27]The concept of just compensation embraces not only the correct determination of the amount to be paid to the owners of the land, but also payment within a reasonable time from its taking.Without prompt payment, compensation cannot be considered just inasmuch as the property owner is made to 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 loss.[28]Put differently, while prompt payment of just compensation requires the immediate deposit and release to the landowner of the provisional compensation as determined by the DAR, it does not end there. Verily, it also encompasses the payment in full of the just compensation to the landholders as finally determined by the courts.Thus, it cannot be said that there is already prompt payment of just compensation when there is only a partial payment thereof, as in this case.While this decision does not finally resolve the propriety of the determination of just compensation by the SAC in view of the separate appeal on the matter, we find no grave abuse of discretion on the part of the SAC judge in allowing execution pending appeal.The good reasons cited by the SACthat it would be in consonance with justice, fairness, and equity, and that suspending payment will prolong the agony of respondents suffered due to the deprivation of their landare eloquently elucidated in the Comment filed by SAC Judge Venancio J. Amila, as nominal party, on the petition forcertiorariand prohibition of petitioner before the Court of Appeals,viz.:In addition to the Comment of private respondents, through counsel Hilario C. Baril, which the undersigned has just received a copy today, it is well to state here that respondent Placido Orilla is already an old man just as his wife.The appealed Decision will show that Orilla was already 71 years old at the time he testified in this case and the transcripts would further show that the money that he used in buying the DBP foreclosed property herein subject of compulsory acquisition by the DAR came from his retirement benefits evidently thinking that his investment would afford him security and contentment in his old age.But, luckily or unluckily, the land was taken from him by the DAR at a price so low that he could not swallow, thus, he brought the issue to court.Yet, all along, the land has been under the enjoyment of farmer-beneficiaries without him yet being paid therefor.In the mind of the Court, if payment for the land would be delayed further, it would not be long that death would overtake him.What a misfortune to his long years of service to acquire that hard-earned savings only to be deprived therefrom at the time when he needed it most.[29]The SAC, aware of the protracted proceedings of the appeal of its November 20, 2000 Decision, but without imputing any dilatory tactics on the part of petitioner, thus deemed it proper, in its sound discretion, to grant the execution pending appeal. Moreover, the execution of the judgment of the SAC was conditioned on the posting of a bond by the respondents, despite pleas to reduce the same, in the amount of one-half of the just compensation determined by the said court orP739,511.50.To reiterate,good reasons for execution pending appeal consist of compelling or superior circumstances demanding urgency which will outweigh the injury or damages suffered should the losing party secure a reversal of the judgment or final order.In the case at bar, even with the procedural flaw in the SACs grant of execution without a hearing, the injury that may be suffered by respondents if execution pending appeal is denied indeed outweighs the damage that may be suffered by petitioner in the grant thereof.As correctly pointed out by respondents, the reversal of the November 20, 2000 SAC Decision, in the sense that petitioner will pay nothing at all to respondents, is an impossibility, considering the constitutional mandate that just compensation be paid for expropriated property.The posting of the required bond, to our mind, adequately insulates the petitioner against any injury it may suffer if the SAC determination of just compensation is reduced.Suffice it to say that, given the particular circumstances of this case, along with the considerable bond posted by respondents, the assailed SAC Order ofDecember 21, 2000and the Decision of the Court of Appeals datedJuly 29, 2002are justified.