"x x x.
I.
The CA and the RTC did not disregard Section 17,
Republic Act No. 6657, and DAR AO No. 5, Series of 1998
Section 4, Article XIII, of the Constitution has mandated the implementation of an agrarian reform program for the distribution of agricultural lands to landless farmers subject to the payment of just compensation to the landowners, viz:
Section 4. The Sate 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 rights of small landowners. The State shall further provide incentives for voluntary land-sharing.
The Congress has later enacted Republic Act No. 6657 to implement the constitutional mandate.Section 17 of Republic Act No. 6657 has defined the parameters for the determination of the just compensation, viz:
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 nonpayment 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 Congress has thereby required that any determination of just compensation should consider the following factors, namely: (a) the cost of the acquisition of the land; (b) the current value of like properties; (c) the nature, actual use and income of the land; (d) the sworn valuation by the owner; (e) the tax declarations; (f) the assessment made by government assessors; (g) the social and economic benefits contributed to the property by the farmers and farmworkers and by the Government; and (h) the fact of the non-payment of any taxes or loans secured from any government financing institution on the land.
Pursuant to its rule-making power under Section 49 of Republic Act No. 6657,[15] the Department of Agrarian Reform (DAR) promulgated DAR Administrative Order (AO) No. 6, Series of 1992, DAR AO No. 11, Series of 1994 (to amend AO No. 6), and DAR AO No. 5, Series of 1998 (to amend AO No. 11) ostensibly to translate the factors provided under Section 17 in a basic formula. The formulae embodied in these AOs have been used in computing the just compensation upon taking into account all the factors stated in Section 17, supra. It is relevant to note that the Court has consistently regarded reliance on the formulae under these AOs to be mandatory.[16]
Of relevance here is DAR AO No. 5, whose formula of just compensation follows:
A. II. The following rules and regulations are hereby promulgated to govern the valuation of lands subject of acquisition whether under voluntary offer to sell (VOS) or compulsory acquisition (CA).
A. 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 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)
A.3 When both the CS and CNI are not present and only MV is applicable, the formula shall be:
LV = MV x 2.
The RTC found that the entire landholding was prime coconut land located along the national highway planted to 95 fruit-bearing coconut trees per hectare, more or less, or a total of 12,153 fruit-bearing coconut trees. It ascertained Nable’s just compensation by considering the affected landholding’s nature, location, value and the volume of the produce, and by applying the formula under DAR AO No. 5, Series of 1998, viz:
xxx
Nonetheless, the said report (commissioners’ report) impliedly belied the classification made by the defendants (DAR and LBP) by stating among others, that the land is fully cultivated contrary to the allegation that portion of which is an idle land. While this Court may affirm, modify or disregard the Commissioner’s Report, the Court may consider the number of listed coconut trees and bananas actually counted by the Board during their field inspection.
xxx
The Court is of the opinion that the actual production data not the government statistics is the most accurate data that should be used if only to reflect the true and fair equivalent value of the property taken by the defendant through expropriation. Considering the number of coconut trees to a high of 12,153 all bearing fruits, it would be contrary to farming experience involving coconuts to have an average production per month of 2,057.14 kilos without necessarily stating that the said land is classified as prime coconut land. Apportioning the number of coconut trees to the total land area would yield, more or less 95 trees per hectare well within the classification of a prime coconut land.
Even the settled rule of thumb method of conversion, 1000 kilos of nuts make 250 kilos copra resecada long before adopted by coconut farmers spells substantial difference. The Court deems it more reasonable theproduction data submitted by the plaintiff supported by the affidavit of Mrs. Wilma Rubi, to wit:
xxx Hence, the computation of the just compensation of the subject land, to wit:
FORMULA: LV = (CNI X 0.6) + (CS X 0.3) + (MV X 0.1)
WHERE: LV = Land Values
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
Since the Comparable Sales factor is missing, the formula shall be as follows:
LV = (CNI X 0.9) + (MV X 0.1)
To compute the CNI, the following formula shall be used, to wit:
CNI = (AGP X SP) – CO
0.12
The cost of operation could not be obtained or verified and since the landholdings subject in the instant case are planted to coconut which are productive at the time of Field Investigation (FI), it will continue to use the assumed NIR of 70%.
Thus, the computation, to wit:
CNI = (AGP X SP (70%)
.12
= (5,671.3 kls. X 5.93) 70%
.12
= 23,541.56
.12
CNI = 196,179.7
LV = (196,179.7 X 0.9) + (14,158 X 0.1)
= 176,561.73 + 1,415.8
LV = ₱22,662,466
Improvements:
Computation:
xxx
Total - ₱3,860,714.00
Summary Computation of Total Just Compensation:
1) Land Value - ₱22,662,466.00
2) Improvements -₱ 3,860,714.00
Total - ₱26,523,180.00
“Just compensation means the equivalent for the value of the property at the time of its taking. It means a fair and full equivalent value for the loss sustained. All the facts as to the condition of the property and its surroundings, its improvements and capabilities should be considered” (Export Processing Zone Authority vs. Dulay 149 SCRA 305 [1987]). Consistent with the said ruling, the Court considered the findings of the commissioners as to the plants/fruit tree introduced into the land constituting as valuable improvementsthereto. Thus, the above computation.
xxx
Considering therefore the actual production in addition with the desirable land attributes as a contiguous titled property fertile, with valuable intercrops, constituting as improvements, fully cultivated,proximate location along the national highway, the Court deems it just and equitable the valuation in total per Court’s computation.[17]
The CA affirmed the RTC’s valuation upon finding that the evidence on record substantiated the valuation, but saw the need to correct the amount from ₱26,523,180.00 to ₱31,034,819.00 because of the RTC’s honest error in calculation. The CA’s following explanation for its affirmance is worth noting:
To recapitulate, the Annual and Monthly Gross Production of copra on the subject property are as follows:
Average Yearly Average Monthly
Production Production
Directly Processed Copra – 15,580 kilos 1,298.3 kilos
Whole Nuts Resecada - 209,908 kilos 4,373 kilos
(converted tibook)
5,671.3 kilos
We likewise observe that in the computation of the CNI OR Capitalized Net Income, both DARAB and the court a quo used the following formula:
CNI = (AGP x SP) - CO
.12
Unfortunately, DARAB and the court a quo committed an error in the calculation thereon (emphasis supplied). After multiplying the AGP (Average Gross Production) from SP (Selling Price/kilo), they multiplied the result with the CO (Cost of Operation), instead of subtracting the same as reflected in the above formula.
Thus, pursuant to Administrative Order No. 11, as amended, the correct computation should be:
CNI = (AGP x SP) - CO
.12
Wherein: AGP – 5,671.3 kilos (Average Gross Production)
SP - ₱5.93/kilo (Selling Price – from PCA data)
CO – 70% (assumed Cost of Operations, AO No. 11)
= (5,671.53 kilos x 5.93) – 70%
.12
= 33.632.17 -.7
.12
= 33.631.472
.12
CNI = 280,262.26
To compute the Land Value (LV) per hectare, we use the formula as prescribed by Administrative Order No. 11, as amended:
LV = (CNI x 0.9) + (CS x 0.3) + (MV x 0.1)
WHERE: LV = Land Values
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
When CS is not present and CNI and MV are applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
Wherein: CNI – 280,262.26
MV - ₱14,158.40 (Market Value per Tax Declaration of the subject property)
LV = (280,262.26 x 0.9) + (₱14,158.40 x 0.1)
= 252,236.03 + ₱1,415.84
LV = ₱253,651.87/hectare
Total Land Value = ₱253,651.87 hectare x 127.3365 hectares
= ₱32,299,141.00
Summary of Valuation:
1) Total Land Value - ₱32,299,141.00
2) Improvements - ₱3,860,714.00 (as found by the court a quo)
TOTAL - ₱36,159,855.00
Hence, the correct just compensation that must be paid to herein respondent is Thirty Six Million One Hundred Fifty Nine Thousand Eight Hundred Fifty Five Pesos (₱36,159,855.00).[18]
x x x
In the case at bench, petitioner Bank initially paid respondent the sum of ₱5,125,036.05 on August 26, 1993. The total just compensation payable to the latter, as computed above, is ₱36,159,855.00. Hence, the difference of ₱31,034,819.00 (emphasis supplied) must earn the interest of 12% per annum, or₱3,724,178.20, from 1993 until fully paid thereon in order to place the owner in a position as good (but not better than) the position she was in before the taking occurred as mandated by the Reyes doctrine.[19](Emphasis supplied)
We cannot fail to note that the computation by the CA closely conformed to the factors listed in Section 17 of Republic Act No. 6657, especially the factors of the actual use and income of the affected landholding. The Court has consistently ruled that the ascertainment of just compensation by the RTC as SAC on the basis of the landholding’s nature, location, market value, assessor’s value, and the volume and value of the produce is valid and accords with Section 17, supra.[20] The Court has likewise ruled that in appraising just compensation the courts must consider, in addition, all the facts regarding the condition of the landholding and its surroundings, as well as the improvements and the capabilities of the landholding.[21] Thus, we sustain the computation.
We also stress that the factual findings and conclusions of the RTC, when affirmed by the CA, are conclusive on the Court. We step in to review the factual findings of the CA only when we have a compelling reason to do so, such as any of the following:
1. When the factual findings of the CA and the RTC are contradictory;
2. When the findings are grounded entirely on speculation, surmises, or conjectures;
3. When the inference made by the CA is manifestly mistaken, absurd, or impossible;
4. When there is grave abuse of discretion in the appreciation of facts;
5. When the CA, in making its findings, went beyond the issues of the case, and such findings are contrary to the admissions of both appellant and appellee;
6. When the judgment of the CA is premised on a misapprehension of facts;
7. When the CA fails to notice certain relevant facts that, if properly considered, will justify a different conclusion;
8. When the findings of fact are themselves conflicting;
9. When the findings of fact are conclusions without citation of the specific evidence on which they are based; and,
10. When the findings of fact of the CA are premised on the absence of evidence, but such findings are contradicted by the evidence on record.[22]
Considering that LBP has not shown and established the attendance of any of the foregoing compelling reasons to justify a review of the findings of fact of the CA, we do not disturb the findings of fact of the CA and the RTC.
Nonetheless, LBP urges that the CA should have relied on the rulings in Land Bank of the Philippines v. Banal[23] and Land Bank of the Philippines v. Celada[24] in resolving the issue of just compensation.
In Banal, the Court invalidated the land valuation by the RTC because the RTC did not observe the basic rules of procedure and the fundamental requirements in determining just compensation cases. InCelada, the Court set aside the land valuation because the RTC had used only one factor in valuing the land and had disregarded the formula under DAR AO No. 5, Series of 1998. The Court stated that the RTC “was at no liberty to disregard the formula which was devised to implement the said provision.”[25]Thus, LBP submits that the RTC’s land valuation, as modified by the CA, should be disregarded because of the failure to consider the factors listed in Section 17 of RA 6657 and the formula prescribed under DAR AO No. 5, Series of 1998, amending DAR AO No. 11, Series of 1994.
LBP’s submission is grossly misleading. As the Court has already noted, the CA and the RTC did not disregard but applied the formula adopted in DAR AO No. 5. Moreover, the reasons for setting aside the RTC’s determinations of just compensation in Banal and Celada did not obtain here. In Banal, the RTC as SAC did not conduct a hearing to determine the landowner’s compensation with notice to and upon participation of all the parties, but merely took judicial notice of the average production figures adduced in another pending land case and used the figures without the consent of the parties.[26] The RTC did not also appoint any commissioners to aid it in determining just compensation. In contrast, the RTC as SAC herein conducted actual hearings to receive the evidence of the parties; appointed a board of commissioners to inspect and to estimate the affected landholding’s value; and gave due regard to the various factors before arriving at its valuation. In Celada, the Court accepted the valuation by LBP and set aside the valuation determined by the RTC because the latter valuation had been based “solely on the observation that there was a patent disparity between the price given to the respondent and the other landowners.”[27] Apparently, the RTC had used only a single factor in determining just compensation. Here, on the other hand, the RTC took into consideration not only the board of commissioners’ report on the affected landholding’s value, but also the several factors enumerated in Section 17 of Republic Act No. 6657 and the applicable DAR AOs as well as the value of the improvements.
x x x."