Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 171038               June 20, 2012

LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
HEIRS OF JUAN LOPEZ, namely: MONSERRAT LOPEZ-MARCHAN, LYDIA LOPEZ-DAMASCO, THELMA LOPEZ-GERONA, ELSA FELY LOPEZ-REBUSTILLO, JOSE LOPEZ, and HERMINIO LOPEZ, Respondents.

D E C I S I O N

BRION, J.:

Before us is a petition for review on certiorari1 filed by the petitioner, Land Bank of the Philippines (LBP), assailing the September 29, 2005 decision of the Court of Appeals (CA) in C.A. G.R. SP No. 80918.2 The LBP also assails the December 23, 2005 resolution3 of the CA denying its motion for reconsideration.4 The CA dismissed the LBPís appeal for lack of merit.

THE FACTUAL ANTECEDENTS

The respondent heirs of the deceased Juan Lopez owned a parcel of coconut land situated in San Vicente, Castilla, Sorsogon, with an area of 23.1301 hectares and covered by Original Certificate of Title No. P-32. In July 2000, Monserrat L. Marchan, together and in behalf of her co-respondents,5 voluntarily offered to sell the parcel of land to the Department of Agrarian Reform (DAR) under Republic Act (R.A.) No. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1988."

After conducting a field investigation, only 21.6101 out of the 23.1301 hectares was found subject for acquisition.6 The LBP valued the property at ₱14,101.51 per hectare or for a total amount of ₱304,735.09.7 The LBPís offer was reduced to ₱298,101.21,8 after the value of the 0.3643 hectare legal easement on the property was deducted.

The respondents rejected the LBPís offer and elevated the matter to the DAR Provincial Agrarian Reform Adjudicator (PARAD) of Sorsogon City who conducted a summary administrative proceeding for the determination of just compensation.

The PARADís Ruling

On January 8, 2002, Provincial Adjudicator Manuel M. Capellan fixed9 the just compensation for the respondentsí 21.6101-hectare property at ₱928,330.17, which was ₱630,228.96 more than the amount offered by the LBP. The huge difference from the LBPís estimate arose from the PARADís use of the average selling price of ₱16.00 per kg. of copra instead of the average selling price of ₱5.86 per kg. of copra used by the LBP. The average selling price data is required in computing for the capitalized net income (CNI),10 which is a necessary factor in the equation for determining the amount of just compensation.11

The LBP moved to reconsider the PARADís ruling, but its motion was denied in an order dated March 21, 2002.12

Hence, on April 1, 2002, the LBP filed before Branch 52 of the Regional Trial Court, acting as a Special Agrarian Court (RTC-SAC), of Sorsogon City a petition for the judicial determination of just compensation, docketed as Civil Case No. 2002-6986.13

In its petition, the LBP contended that the PARAD gravely abused his discretion in valuing the respondentsí property at ₱928,330.17. It mainly argued that the average selling price of ₱16.00 per kg. of copra used by the PARAD is contrary to DAR regulations; that under DAR Administrative Order (A.O.) No. 5, series of 1998, the selling price is defined as "[t]he average of the latest available 12-monthsí selling prices prior to the date of receipt of the [claim folder] by LBP for processing, such prices to be secured from the Department of Agriculture x x x and other appropriate regulatory bodies or, in their absence, from the Bureau of Agricultural Statistics." Thus, the selling price to be applied in this case should be the average price of copra for the 12-month period prior to the LBPís receipt of the respondentsí claim folder in July 2001;14 and that based on the pricing schedule supplied by the Philippine Coconut Authority (PCA), the average selling price within the months of July 2000 and June 2001 was ₱5.86 per kg.15

The RTC-SACís Ruling

In a decision dated August 15, 2003,16 the RTC-SAC affirmed the PARADís decision. From the evidence presented, it considered the PARADís valuation to be fair, just and realistic, based not only on the propertyís yield of copra, but also on its condition, its proximity to roads and the market place, the comparable sales in the area or the current value of like properties, the improvements thereto, its actual use, the social and economic benefits that the property contributed to the community, the landownerís sworn valuation thereof, and the tax declarations and assessments made by government assessors on the property.17

Thereafter, the RTC-SAC denied the LBPís motion for reconsideration in an order dated October 27, 2003.18 The LBP appealed to the CA.

The CAís Ruling

In a decision dated September 29, 2005,19 the CA affirmed the RTC-SACís ruling. It was unconvinced with the LBPís unsubstantiated claims that the RTC-SAC erred in considering then prevailing circumstances in the valuation of the respondentsí property and not those at the time the property was taken by the government, and in adopting the PARADís valuation, because it was not arrived at strictly in accordance with the formula and guidelines provided by the DAR.

On the contrary, the CA observed that while the LBP and the PARAD arrived at different valuations of the respondentsí property, both of them used the same formula provided under DAR A.O. No. 5, series of 1998.20 The CA affirmed the valuation adopted by the RTC-SAC as there was nothing to show that the trial court, as well as the PARAD, failed to consider the factors enumerated in Section 17 of R.A. No. 6657 and the guidelines provided by DAR A.O. No. 5, series of 1998, in arriving at its valuation.

As for the LBPís valuation, the CA found it to be unrealistic and far from being the "just" compensation envisioned by the Constitution.21

The LBP moved to reconsider the CAís decision, but its motion was denied in a resolution dated December 23, 2005.22

The Petition

In the present petition for review on certiorari, the LBP insists that the PCA-supplied average selling price data of ₱5.86 per kg. of copra should have been used in computing the just compensation for the respondentsí property, as their data and computation were in accordance with the formula and guidelines provided under DAR A.O. No. 5, series of 1998.

OUR RULING

We DENY the present petition.

In the determination of just compensation, the RTC-SACs are guided by the factors enumerated in Section 17 of R.A. No. 6657, which provision states:

Section 17. Determination of Just Compensation. Ė 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.

The DAR, as the administrative agency tasked with the implementation of the agrarian reform program and pursuant to its rule-making power under R.A. No. 6657, translated the factors in Section 17 into a basic formula in DAR A.O. No. 6, series of 1992, 23 and those found in succeeding DAR administrative regulations. In various cases, we emphasized the mandatory application of these formulas and imposed upon the RTC-SACs the duty to apply, and not to disregard, them in determining just compensation.24

In the present case, no dispute exists with respect to the formulas used by the LBP and the PARAD in arriving at their valuations. Both correctly applied the formula provided by DAR A.O. No. 5, series of 1998,25 the then governing regulation applicable to the respondentsí land. However, the resulting valuations varied due to the different average selling price data used, which led to the question of which between the two average selling prices of ₱5.86 per kg. and ₱16.00 per kg. of copra should be adopted as the true and correct selling price in determining the amount of just compensation for the respondentsí land.

Questions of fact not reviewable

We find the present issue to be a question of fact that is not reviewable by this Court under Rule 45 of the Rules of Court.1avvphi1 Section 1 thereof provides that "[t]he petition x x x shall raise only questions of law, which must be distinctly set forth." To differentiate, a question of fact exists when the doubt centers on the truth or falsity of the alleged facts while a question of law exists if the doubt centers on what the law is on a certain set of facts;26 there is a question of fact if the issue requires a review of the evidence presented or requires the re-evaluation of the credibility of witnesses, and there is a question of law if the issue raised is capable of being resolved without the need of reviewing the probative value of the evidence.27 The issue of the correctness of the average selling price data used in this case is clearly a question of fact that can only be determined by a review of the evidence presented by the parties.

In the absence of proof to show that the RTC-SAC acted arbitrarily in the appreciation and weighing of the evidence, we respect the RTC-SACís findings. Factual findings and determinations made by the RTC, or in this case the RTC-SAC, are generally binding on the Court, particularly when affirmed by the CA.28

WHEREFORE, premises considered, the present petition for review on certiorari is hereby DENIED. We AFFIRM the September 29, 2005 decision and the December 23, 2005 resolution of the Court of Appeals in C.A. G.R. SP No. 80918.

SO ORDERED.

ARTURO D. BRION
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Senior Associate Justice
Chairperson

JOSE PORTUGAL PEREZ
Associate Justice
MARIA LOURDES P. A. SERENO
Associate Justice

BIENVENIDO L. REYES
Associate Justice

C E R T I F I C A T I O N

I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courtís Division.

ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 296, The Judiciary Act of 1948, as amended)


Footnotes

1 Under Rule 45 of the Rules of Court; rollo, pp. 25-50.

2 Penned by Associate Justice Amelita G. Tolentino, and concurred in by Associate Justices Danilo B. Pine and Vicente S. E. Veloso; id. at 10-20.

3 Id. at 8-9.

4 Id. at 8-9.

5 Lydia Lopez-Damasco, Thelma Lopez-Gerona, Elsa Fely Lopez-Rebustillo, Jose Lopez, and Herminio Lopez.

6 Rollo, pp. 102-105.

7 Id. at 106-109.

8 Id. at 142-143.

9 Id. at 154-156.

10
CNI =(Average Gross Production x Selling Price) Ė Cost of Operations
.12

11 LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1))

12 Rollo, p. 158.

13 Id. at 147-150.

14 Id. at 106.

15 Id. at 110.

16 Id. at 134-139.

17 Id. at 137.

18 Id. at 140.

19 Supra note 2.

20 There shall be one basic formula for the valuation of lands covered by VOS or CA:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

Where:
LV = Land Value

CNI = Capitalized Net Income

CS = Comparable Sales

MV = Market Value per Tax Declaration

The above formula shall be used if all the three factors are present, relevant, and applicable.
A1. When the CS factor is not present and CNI and MV are applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)

A2. When the CNI factor is not present, and CS and MV are applicable, the formula shall be:

LV = (CS x 0.9) + (MV x 0.1)

A3. When both the CS and CNI are not present and only MV is applicable, the formula shall be:

LV = MV x 2

In no case shall the value of idle land using the formula MV x 2 exceed the lowest value of land within the same estate under consideration or within the same barangay or municipality (in that order) approved by LBP within one (1) year from receipt of claimfolder.

x x x x

CNI =(AGP x SP) - CO
.12

x x x x

AGP = Average Gross Production corresponding to the latest available 12 months' gross production immediately preceding the date of FI [field investigation].

SP [Selling Price] = The average of the latest available 12-monthsí selling prices prior to the date of receipt of the [claim folder] by LBP for processing, such prices to be secured from the Department of Agriculture (DA) and other appropriate regulatory bodies or, in their absence, from the Bureau of Agricultural Statistics. If possible, SP data shall be gathered for the barangay or municipality where the property is located. In the absence thereof, SP may be secured within the province or region.

CO = Cost of Operations

Whenever the cost of operations could not be obtained or verified, an assumed net income rate (NIR) of 20% shall be used. Landholdings planted to coconut which are productive at the time of FI shall continue to use the assumed NIR of 70%. DAR and LBP shall continue to conduct joint industry studies to establish the applicable NIR for each crop covered under CARP.
0.12 = Capitalization Rate[.]

21 Rollo, p. 16.

22 Id. at 8-9.

23 Land Bank of the Philippines v. Sps. Banal, 478 Phil. 701, 710 (2004).

24 Land Bank of the Philippines v. Barrido, G.R. No. 183688, August 18, 2010, 628 SCRA 454; Land Bank of the Philippines v. Heirs of Eleuterio Cruz, G.R. No. 175175, September 29, 2008, 567 SCRA 31; Land Bank of the Philippines v. Lim, G.R. No. 171941, August 2, 2007, 529 SCRA 129; and Landbank of the Philippines v. Celada, 515 Phil. 467 (2006).

25 Rollo, p. 17.

26 Microsoft Corp. v. Maxicorp, Inc., 481 Phil. 550, 561 (2004).

27 Development Bank of the Philippines v. Traders Royal Bank, G.R. No. 171982, August 18, 2010, 628 SCRA 404, 411.

28 National Power Corporation v. Court of Appeals, 479 Phil. 850, 865 (2004).


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