CONSTITUTIONAL LAW REVIEW I
JOHN WESLEY SCHOOL OF LAW AND GOVERNANCE
Case Number: 152
DELA TORRE, JULIE ANN A.
Topic: FUNDAMENTAL POWERS OF THE STATE
Case Name: Land Bank of the Philippines v. Lucy Grace and
Elma Gloria Franco, GR No.209287
G.R. No. 203242
Date: March 12, 2019
I. Facts:
Lucy Grace Franco and Elma Gloria Franco (the Francos) were
the registered owners of parcels of agricultural land in Barangay
Maquina, Dumangas, Iloilo. The Francos offered the parcels of land for
sale to the Department of Agrarian Reform under the Voluntary Offer
to Sell of the Comprehensive Agrarian Reform Program in 1995. Of the
14.444 hectares of the property, 12.5977 hectares were acquired and
distributed to qualified agrarian reform beneficiaries. During the
summary proceedings before the Department of Agrarian Reform, the
parcels of land were valued at P714,713.78. The Francos did not agree
with the initial valuation. Upon a Petition for Review, the Department
of Agrarian Reform Adjudication Board raised the amount to
P739,461.43, which the Francos then withdrew from the Land Bank of
the Philippines (Land Bank)
Still dissatisfied with the amount, the Francos on August 3, 2000
filed before the Regional Trial Court, sitting as the Special Agrarian
Court, a Complaint for the determination of just compensation.
Subsequently, they filed an Amended Petition against Land Bank, the
Secretary of Agrarian Reform, and other tenant-beneficiaries who were
not included in the original Complaint.
In its September 18, 2007 Decision, the Special Agrarian Court
fixed the just compensation for the 12.5977 hectares of land area
actually taken by the government in the amount of P1,024,115.49
Section 56, in relation to Section 57 of the Comprehensive
Agrarian Reform Law, confers "special jurisdiction" on special agrarian
courts. Regional trial courts, sitting as special agrarian courts, have
original and exclusive jurisdiction over all petitions for the
determination of just compensation to landowners, as well as the
prosecution of all criminal offenses under the Comprehensive Agrarian
CONSTITUTIONAL LAW REVIEW I
JOHN WESLEY SCHOOL OF LAW AND GOVERNANCE
Reform Law. In contrast to the special agrarian courts, the Department
of Agrarian Reform Adjudication Board only has preliminary
administrative determination of just compensation. Just compensation
is "the full and fair equivalent of the property taken from its owner by
the expropriator. “The measure of the taking "is not the taker's gain
but the owner's loss.
II. Issue:
Whether or not the Court of Appeals erred in affirming the
Special Agrarian Court's valuation of just compensation using a
variation of the basic general formula provided for in Department of
Agrarian Reform Administrative Order No. 5, series of 1998;
I
Yes. Agrarian Reform, as subsumed under social justice in this
jurisdiction, is enshrined in the Constitution:
AGRARIAN AND NATURAL RESOURCES REFORM
SECTION 4. The State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular farmworkers,
who are landless, to own directly or collectively the lands they till or,
in the case of other farmworkers, to receive a just share of the fruits
thereof. To this end, the State shall encourage and undertake the just
distribution of all agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may prescribe, taking into
account ecological, developmental, or equity considerations,
and subject to the payment of just compensation. In determining
retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary
land-sharing. (Emphasis supplied)
Several laws were enacted to ensure that the State's policy toward
agrarian reform is properly carried out. These laws are outlined in
Association of Small Landowners in the Philippines, Inc. v. Secretary of
Agrarian Reform:]
In 1988, the Congress enacted the Comprehensive Agrarian Reform
Law, which further strengthened the State's policy toward agrarian
reform. The law provided an exact definition of the phrase "agrarian
reform," thus:
CONSTITUTIONAL LAW REVIEW I
JOHN WESLEY SCHOOL OF LAW AND GOVERNANCE
Agrarian Reform means the redistribution of lands, regardless of crops
or fruits produced to farmers and regular farmworkers who are
landless, irrespective of tenurial arrangement, to include the totality of
factors and support services designed to lift the economic status of the
beneficiaries and all other arrangements alternative to the physical
redistribution of lands, such as production or profit-sharing, labor
administration, and the distribution of shares of stocks, which will
allow beneficiaries to receive a just share of the fruits of the lands they
work.
In light of these developments, Batas Pambansa Blg. 129, or the
Judiciary Reorganization Act of 1980, vested in regional trial courts
exclusive and original jurisdiction of civil actions and special
proceedings under the exclusive and original jurisdiction of the courts
of agrarian relations.Section 56, in relation to Section 57 of the
Comprehensive Agrarian Reform Law, confers "special jurisdiction" on
special agrarian courts.
Regional trial courts, sitting as special agrarian courts, have original
and exclusive jurisdiction over all petitions for the determination of
just compensation to landowners, as well as the prosecution of all
criminal offenses under the Comprehensive Agrarian Reform Law. In
contrast to the special agrarian courts, the Department of Agrarian
Reform Adjudication Board only has preliminary administrative
determination of just compensation.
Just compensation is "the full and fair equivalent of the property taken
from its owner by the expropriator." The measure of the taking "is not
the taker's gain but the owner's loss." The term "just" intensifies the
term "compensation" to obtain a real, substantial, full, and ample
equivalent for the property taken. The jurisdiction of the trial courts,
sitting as special agrarian courts, is "not any less 'original' and
'exclusive'" because the Department of Agrarian Reform passes upon
the question of just compensation first. "[judicial proceedings are not a
continuation of the administrative determination ... the law may
provide that the decision of the [Department of Agrarian Reform] is
final and unappealable. Nevertheless, resort to the courts cannot be
foreclosed on the theory that courts are the guarantors of the legality
of administrative action."
CONSTITUTIONAL LAW REVIEW I
JOHN WESLEY SCHOOL OF LAW AND GOVERNANCE
The determination of "just compensation" in eminent domain cases is
a judicial function. The executive department or the legislature may
make the initial determinations but when a party claims a violation of
the guarantee in the Bill of Rights that private property may not be
taken for public use without just compensation, no statute, decree, or
executive order can mandate that its own determination shall prevail
over the court's findings. Much less can the courts be precluded from
looking into the "just-ness" of the decreed compensation. [57]
SECTION 17. Determination of Just Compensation. — 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 Court finds the total valuation by the LBP and the DAR in the
amount of P739,461.43 to be unrealistically low and therefore is not
the just compensation of the subject lot. On the other hand, the
valuation of the petitioners is likewise cumbersomely high for the
government and the farmer-beneficiaries considering that the
valuation of P300,000.00 per hectare they initially asked in 1998 were
based only on assumptions of facts unsupported by credible evidence.
This offer of P300,000.00 was reiterated by Mr. Gustilo during the
hearing and clearly, this offer is based on his own declarations but this
was not adequately substantiated and therefore inconclusive. Thus,
the Court in the exercise of its judicial prerogatives, must consider the
needs of both parties and should be guided by several factors in order
to arrive at a just compensation which is fair, reasonable and
acceptable to the parties.[85]
The Special Agrarian Court proceeded to compute just compensation
according to the factors in Administrative Order No. 5 and the market
value of the property as shown in the tax declarations:
CONSTITUTIONAL LAW REVIEW I
JOHN WESLEY SCHOOL OF LAW AND GOVERNANCE
IV. RATIO DECIDENDI:
The final determination of just compensation is vested in courts. In the
recent case of Alfonso v. Land Bank,[1] this Court, through Associate
Justice Francis H. Jardeleza, ruled that courts may deviate from the
basic formula provided by administrative agencies if it finds, in its
discretion, that other factors must be taken into account in the
determination of just compensation. Deviation, however, must be
grounded on a reasoned explanation based on the evidence on record.
Absent this, the deviation will be considered as grave abuse of
discretion.
V. Doctrine of operative fact was applicable
SECTION 2. Declaration of Principles and Policies. — It is the policy of
the State to pursue a Comprehensive Agrarian Reform Program
(CARP). The welfare of the landless farmers and farmworkers will
receive the highest consideration to promote social justice and to
move the nation toward sound rural development and industrialization,
and the establishment of owner cultivatorship of economic-size farms
as the basis of Philippine agriculture.
