Just compensation explained. - G.R. No. 188670

G.R. No. 188670

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Basically, this Court is called upon to determine this issue: whether the method set forth under R.A. No. 6657 in the computation of just compensation may be applied to private agricultural lands taken by the government under the auspices of P.D. No. 27 in relation to E.O. No. 228.

We rule in the affirmative.

The issue presented by the instant case is not novel. In Land Bank of thePhilippines v. Natividad,[11] this Court held that just compensation for private agricultural lands acquired by the government under the auspices of P.D. No. 27 in relation to E.O. No. 228 should be computed in accordance with the method set forth under R.A. No. 6657. Thus:

Land Bank’s contention that the property was acquired for purposes of agrarian reform on October 21, 1972, the time of the effectivity of PD 27, ergo just compensation should be based on the value of the property as of that time and not at the time of possession in 1993, is likewise erroneous.  In Office of the President, Malacañang, Manila v. Court of Appeals, we ruled that the seizure of the landholding did not take place on the date of effectivity of PD 27 but would take effect on the payment of just compensation.

Under the factual circumstances of this case, the agrarian reform process is still incomplete as the just compensation to be paid private respondents has yet to be settled. Considering the passage of Republic Act No. 6657 (RA 6657) before the completion of this process, the just compensation should be determined and the process concluded under the said law. Indeed, RA 6657 is the applicable law, with PD 27 and EO 228 having only suppletory effect, conformably with our ruling in Paris v. Alfeche.

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It would certainly be inequitable to determine just compensation based on the guideline provided by PD 27 and EO 228 considering the DAR’s failure to determine the just compensation for a considerable length of time. That just compensation should be determined in accordance with RA 6657, and not PD 27 or EO 228, is especially imperative considering that just compensation should be the full and fair equivalent of the property taken from its owner by the expropriator, the equivalent being real, substantial, full and ample.[12] (Citations omitted and emphasis supplied)

Likewise, in the cognate case of Land Bank of the Philippines v. Heirs of Angel T. Domingo,[13] this court held that:

LBP’s contention that the property was taken on 21 October 1972, the date of effectivity of PD 27, thus just compensation should be computed based on the GSP in 1972, is erroneous. The date of taking of the subject land for purposes of computing just compensation should be reckoned from the issuance dates of the emancipation patents. An emancipation patent constitutes the conclusive authority for the issuance of a Transfer Certificate of Title in the name of the grantee. It is from the issuance of an emancipation patent that the grantee can acquire the vested right of ownership in the landholding, subject to the payment of just compensation to the landowner.

When RA 6657 was enacted into law in 1988, the agrarian reform process in the present case was still incomplete as the amount of just compensation to be paid to Domingo had yet to be settled. Just compensation should therefore be determined and the expropriation process concluded under RA 6657.

Guided by this precept, just compensation for purposes of agrarian reform under PD 27 should adhere to Section 17 of RA 6657 which states:

“Sec. 17. Determination of Just Compensation. – In determining just compensation, the cost of 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 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.”

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In sum, we affirm the rulings of the trial court and the appellate court that the provisions of RA 6657 apply to the present case and that the date of taking of Domingo’s riceland for purposes of computing just compensation should be reckoned from the issuance dates of emancipation patents.[14] x x x (Citations omitted and emphasis supplied)

Indeed, it would be the height of inequity if we are to compute the just compensation for the subject land using the values at the time when P.D. No. 27 was issued. Admittedly, the expropriation of the subject land was initiated under P.D. No. 27. Nevertheless, with the passage of R.A. No. 6657, the CA aptly ruled that the method set forth thereunder should be adopted in computing just compensation for the subject land.

In sum, in determining just compensation, the cost of the 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.[15]

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