G.R. No.

213863

LAND BANK OF THE PHILIPPINES, Petitioner,

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G.R. No. 214021

EDGARDO L. SANTOS, represented by his assignee, ROMEO L. SANTOS, Petitioner,

FACTS: Santos owned three (3) parcels of agricultural land devoted to corn which were placed under the government's
Operation Land Transfer Program 9 pursuant to Presidential Decree (PD) No. 27, and distributed to the farmer-
beneficiaries who were issued the corresponding Emancipation Patents. The (DAR) fixed the just compensation of the
said lands, using the formula provided EO 228, Series of 1987. The LBP received the claim folder covering the subject
lands and allowed Santos to collect the initial valuation for Land 3. However, it withheld the release of the valuation for
Lands 1 and 2 until the submission of the certificates of title thereto. Santos was issued Agrarian Reform (AR) Bond No.
0079665 representing the initial valuation of Land 3 and AR Bond No. 0079666 representing the six percent (6%)
increment pursuant to PD 27 and EO 228, and paid cash.

Finding the valuation unreasonable, Santos filed three (3) petitions for summary administrative proceedings for the
determination of just compensation of the subject lands before the Office of the Provincial Adjudicator (PARAD).
Dissatisfied with the PARAD's valuation, the LBP instituted two (2) separate complaints (or the determination of just
compensation) before the RTC, averring that the computations were erroneous when they disregarded the formula
provided under EO 228.

Santos filed before the RTC a motion to release the initial valuation for Lands 1 and 2 as fixed by the DAR, which was
granted, conditioned on the submission of several documentary requirements. Santos moved for reconsideration, pointing
out that what was sought was the initial valuation only and not its full payment, but nonetheless, committed (a) to submit
two (2) valid ID cards, two (2) latest ID pictures and his CTC for the current year, and (b) to execute a Deed of
Assignment, Warranties and Undertaking in favor of the LBP.37

The RTC issued a Judgment in Civil Case No. 2001-0315, adopting and approving the LBP's uncontested revaluation for
Land 3, and ordering its payment to Santos in accordance with Section 18 of RA 6657, minus the initial valuation that had
already been paid to him which the CA affirmed.

Aggrieved, both parties moved for reconsideration which was denied in a Resolution; hence, these consolidated petitions.

ISSUES:

1. Whether the RTC acted with grave abuse of discretion in allowing the release of the initial valuation of Lands
1 and 2 without submitting the documents listed under DAR AO No. 2, Series of 2005;

2. Whether the CA erred in reckoning the award of twelve percent (12%) interest from January 1, 2010 until full
payment of the just compensation.
RULING:

1. NO. The leniency accorded by the RTC cannot be construed as a capricious exercise of power as it merely
expedited the procedure for payment which is inherently fairer under the circumstances considering that:

(a) Santos has been "deprived of his right to enjoy his properties as early as 1983, and has not yet received any
compensation therefor since then;"
(b) the existence of the certificates of title over Lands 1 and 2 which the LBP insists to be submitted had not been
sufficiently established;
(c) the LBP had judicially admitted, that Santos is the owner of Lands 1 and 2 which were identified as covered by tax
declarations; and
(d) compliance with the required documents may still be directed before the full payment of the correct just
compensation which, up to this time, has not yet been finally determined.

Moreover, as aptly pointed out by the CA, Santos' failure to produce the titles to Lands 1 and 2 was not motivated by any
obstinate refusal to abide by the requirements but due to impediments beyond his control.

Perforce, no reversible error or grave abuse of discretion can be imputed on the CA in sustaining the RTC Orders
which allowed the withdrawal of the initial valuation upon Santos' (a) submission of two (2) valid ID cards, two (2) latest ID
pictures, I and his current CTC, and (b) execution of a Deed of Assignment, Warranties and Undertaking in favor of the
LBP.

2. YES. In expropriation cases, interest is imposed if there is delay in the payment of just compensation to the
landowner since the obligation is deemed to be an effective forbearance on the part of the State.

Such interest shall be pegged at the rate of twelve percent (12%) per annum on the unpaid balance of the just
compensation, reckoned from the time of taking, or the time when the landowner was deprived of the use and benefit of
his property such as when title is transferred to the Republic, or emancipation patents are issued by the government, until
full payment.

More, this twelve percent (12%) annual interest is a penalty imposed for damages incurred by the landowner due to the
delay in its payment.

Accordingly, the award of twelve percent (12%) annual interest on the unpaid balance of the just compensation for Land 3
should be computed from the time of taking and not from January 1, 2010 as ruled by the RTC and the CA, until full
payment on October 12, 2011.

However, copies of the emancipation patents issued to the farmer-beneficiaries have not been attached to the records of
the case. Hence, the Court is constrained to remand the case to the RTC of Naga City for receipt of evidence as to the
date of the grant of the emancipation patents, which shall serve as the reckoning point for the computation of the
interests due Santos.