FIRST DIVISION
G.R. No. 185821, June 13, 2013
LAND BANK OF THE PHILIPPINES, Petitioner, v. ATTY. RICARDO D. GONZALEZ, Respondent.
D E C I S I O N
VILLARAMA, JR., J.:
x x x xThe SAC opined that P143,904.25 per hectare was the fair valuation of the subject property. The SAC took judicial notice of the fact that “the value of the Philippine peso had nose[-]dived ever since – from a low of P2.00 to a dollar to P55[.00] to a dollar.”20 Thus, the SAC disposed of the case in this wise:cralavvonlinelawlibrary
Below is the formula used by LBP in the valuation of lands covered by VOS or CA regardless of the date of offer or coverage:cralavvonlinelawlibraryLV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where:cralavvonlinelawlibraryLV = Land Value
CNI = Capitalized Net Income
CS = Comparable SalesMV = Market Value per Tax Declaration
More often the CS factor is not available, hence, the formula shall be:cralavvonlinelawlibraryLV = (CNI x 0.9) + (MV x 0.1)CNI = (AGP x SP) 70%.12
Where:cralavvonlinelawlibraryAGP = Average Gross Production(latest available 12 months)x x x x19nadcralavvonlinelawlibrary
SP = Selling Price (average of the latest available 12 months [)]
CO = Cost of Operations
CNI = (3,375 x 7.96) 70%.12= (26[,]865) 70%.12= 18[,]805.50= 156,712.50
LV = (156,712.50 x 0.9) + (28[,]630 x 0.1)= 141[,]041.25 + 2[,8]63= 143,904.25 (x3)
= P431,712.75= = = = = =
WHEREFORE, foregoing premises considered, judgment is hereby rendered ordering public respondents to pay to the plaintiff the following:cralavvonlinelawlibraryBoth the DAR and LBP sought reconsideration of the decision but the SAC denied their respective motion in a Resolution22 dated June 23, 2005. Aggrieved, LBP appealed the decision to the CA.
1) P143,904.25/hectare or a total of P431,712.75 for the 3 hectares land of the plaintiff;chanroblesvirtualawlibrary
2) P25,000.00 as Commissioners’ fees;chanroblesvirtualawlibrary
3) Ten percent (10%) of the total amount due as attorney’s fees; and
4) Cost of the suit.
SO ORDERED.21
WHEREFORE, the petition for review is PARTLY GRANTED. The Decision dated 3 February 2005 of the Regional Trial Court, Branch 5 of Butuan City sitting as a Special Agrarian Court in Civil Case No. 4797 for Just Compensation is hereby AFFIRMED with MODIFICATION that the award of attorney’s fees is DELETED.LBP filed a motion for reconsideration, but the CA denied the same in its Resolution26 dated December 12, 2008.
SO ORDERED.25
1) | CAN THE COURT OF APPEALS DISREGARD THE VALUATION FACTORS UNDER SECTION 17 OF R.A. 6657 AS TRANSLATED INTO A BASIC FORMULA IN DAR ADMINISTRATIVE ORDER NO. 05, SERIES OF 1998, AS AMENDED, IN FIXING THE JUST COMPENSATION OF THE SUBJECT PROPERTY OF THE RESPONDENT? |
2) | IS PETITIONER LBP LIABLE FOR COMMISSIONERS’ FEE CONSIDERING THAT IT IS PERFORMING A GOVERNMENTAL FUNCTION? IF SO, HOW MUCH?27 |
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 the three factors are present, relevant, and applicable. | ||||||
A.1 | 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) | ||||||
x x x x | ||||||
A.7 | In all of the above, the computed value using the applicable formula shall in no case exceed the LO’s offer in case of VOS. | |||||
The LO’s offer shall be grossed up from the date of the offer up to the date of receipt of CF [Claim Folder] by LBP from DAR for processing. | ||||||
A.8 | For purposes of this Administrative Order, the date of receipt of CF by LBP from DAR shall mean the date when the CF is determined by the LBP-LVLCO to be complete with all the required documents and valuation inputs duly verified and validated, and ready for final computation/processing. | |||||
x x x x | ||||||
B. | Capitalized Net Income (CNI) — This shall refer to the difference between the gross sales (AGP x SP) and total cost of operations (CO) capitalized at 12%. | |||||
Expressed in equation form:cralavvonlinelawlibrary | ||||||
(AGP x SP) - CO | ||||||
CNI = | ––––––––––––––––––– | |||||
0.12 | ||||||
Where: | CNI = | Capitalized Net Income | ||||
AGP = | Annual Gross Production corresponding to the latest available 12-months’ gross production immediately preceding the date of [Field Investigation (FI)]. | |||||
SP = | The average of the latest available 12-months’ selling prices prior to the date of receipt of the CF 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 the 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 | |||||
B.1 | Industry data on production, cost of operations and selling price shall be obtained from government/private entities. Such entities shall include, but not be limited to, the Department of Agriculture (DA), the Sugar Regulatory Authority (SRA), the Philippine Coconut Authority (PCA) and other private persons/entities knowledgeable in the concerned industry. | |||||
B.2 | The landowner shall submit a statement of net income derived from the land subject of acquisition. This shall include, among others, total production and cost of operations on a per crop basis, selling price/s (farm gate) and such other data as may be required. These data shall be validated/verified by the Department of Agrarian Reform and Land Bank of the Philippines field personnel. The actual tenants/farmworkers of the subject property will be the primary source of information for purposes of verification or, if not available, the tenants/farmworkers of adjoining property. | |||||
In case of failure by the landowner to submit the statement within fifteen (15) days from the date of receipt of letter-request as certified by the Municipal Agrarian Reform Office (MARO) or the data stated therein cannot be verified/validated, DAR and LBP may adopt any applicable industry data or, in the absence ther[e]of, conduct an industry study on the specific crop which will be used in determining the production, cost and net income of the subject landholding. | ||||||
x x x x | ||||||
D. | In the Computation of Market Value per Tax Declaration (MV), the most recent Tax Declaration (TD) and Schedule of Unit Market Value (SUMV) issued prior to receipt of CF by LBP shall be considered. The Unit Market Value (UMV) shall be grossed up from the date of its effectivity up to the date of receipt of CF by LBP from DAR for processing, in accordance with Item II.A.9. | |||||
x x x x (Emphasis supplied.) |
LBP | SAC | ||
CNI = | (1,125 x 7.96) 70% .12 | CNI= | (3,375 x 7.96) 70% .12 |
= (8,955) 70% .12 | = (26[,]865) 70% .12 | ||
=52,237.50 | = 156,712.50 | ||
LV | = (52,237.50 x 0.9) + (32,514.15 x 0.1) =47,013.75 + 3,251.42 = 50,265.17 = P150,795.51 | LV | = (156,712.50 x 0.9) + (28[,]630 x 0.1) = 141[,]041.25 + 2[,]863 = 143,904.25 [(x3)] = P431,712.7533 (Emphasis supplied.) |
B.1 | Industry data on production, cost of operations and selling price shall be obtained from government/private entities. Such entities shall include, but not be limited to, the Department of Agriculture (DA), the Sugar Regulatory Authority (SRA), the Philippine Coconut Authority (PCA) and other private persons/entities knowledgeable in the concerned industry. | |||
B.2 | The landowner shall submit a statement of net income derived from the land subject of acquisition. This shall include, among others, total production and cost of operations on a per crop basis, selling price/s (farm gate) and such other data as may be required. These data shall be validated/verified by the Department of Agrarian Reform and Land Bank of the Philippines field personnel. The actual tenants/farmworkers of the subject property will be the primary source of information for purposes of verification or, if not available, the tenants/farmworkers of adjoining property. | |||
In case of failure by the landowner to submit the statement within fifteen (15) days from the date of receipt of letter-request as certified by the Municipal Agrarian Reform Office (MARO) or the data stated therein cannot be verified/validated, DAR and LBP may adopt any applicable industry data or, in the absence thereof, conduct an industry study on the specific crop which will be used in determining the production, cost and net income of the subject landholding. | ||||
x x x x (Emphasis supplied.) |
(1) | the acquisition cost of the land; | |
(2) | the current value of the properties; | |
(3) | its nature, actual use, and income; | |
(4) | the sworn valuation by the owner; | |
(5) | the tax declarations; | |
(6) | the assessment made by government assessors; | |
(7) | the social and economic benefits contributed by the farmers and the farmworkers, and by the government to the property; and | |
(8) | the non-payment of taxes or loans secured from any government financing institution on the said land, if any. |
x x x the role of LBP in the CARP is more than just the ministerial duty of keeping and disbursing the Agrarian Reform Funds. As the Court had previously declared, the LBP is primarily responsible for the valuation and determination of compensation for all private lands. It has the discretion to approve or reject the land valuation and just compensation for a private agricultural land placed under the CARP. In case the LBP disagrees with the valuation of land and determination of just compensation by a party, the DAR, or even the courts, the LBP not only has the right, but the duty, to challenge the same, by appeal to the Court of Appeals or to this Court, if appropriate.Finally, on the issue on commissioners’ fees. We held in Lee v. Land Bank of the Philippines47 that while the provisions of the Rules of Court apply to SAC proceedings, it is clear that, unlike in expropriation proceedings under the Rules of Court, the appointment of a commissioner or commissioners is discretionary on the part of the court or upon the instance of one of the parties. Section 58 of R.A. No. 6657 provides:cralavvonlinelawlibrary
It is clear from the above discussions that since LBP is performing a governmental function in agrarian reform proceeding, it is exempt from the payment of costs of suit as provided under Rule 142, Section 1 of the Rules of Court.46 (Emphasis supplied.)
SEC. 58. Appointment of Commissioners. — The Special Agrarian Courts, upon their own initiative or at the instance of any of the parties, may appoint one or more commissioners to examine, investigate and ascertain facts relevant to the dispute, including the valuation of properties, and to file a written report thereof with the court.Here, both parties did not object to the appointment of commissioners. Our ruling in Apo Fruits48 is instructive:cralavvonlinelawlibrary
The relevant law is found in Rule 67, Section 12 of the Rules of Court:cralavvonlinelawlibraryAccordingly, remand of the case for the determination of the proper amount of commissioners’ fees is in order, pursuant to the aforecited provision of the Rules of Court and jurisprudence. The SAC shall particularly determine the number of days which the Board actually devoted to the performance of its duties. Since the Board in this case was constituted on March 3, 2000, and it rendered its Report on July 28, 2000, or prior to the increase in the rate of commissioner’s fees, the old rate of P100.00 per day shall be applied.“SEC. 12. Costs, by whom paid. — The fees of the commissioners shall be taxed as a part of the costs of the proceedings. All costs, except those of rival claimants litigating their claims, shall be paid by the plaintiff, unless an appeal is taken by the owner of the property and the judgment is affirmed, in which event the costs of the appeal shall be paid by the owner.”From the afore-quoted provision, the award made by the RTC is way beyond that allowed under Rule 141, Section 16; thus, the award is excessive and without justification. Records show that the commissioners were constituted on 26 May 2000 and they submitted their appraisal report on 21 May 2001, when the old schedule of legal fees was in effect. The amendment in Rule 141 introduced by A.M. No. 04-2-04-SC, which took effect on 16 August 2004, increased the commissioner’s fees from P100.00 to P300.00 per day. Assuming they devoted all the 360 days from the time they were constituted until the time they submitted the appraisal report in the performance of their duties, and applying the old rate for commissioner’s fees, they would only receive P38,000.00. Moreover, even if the new rate is applied, each commissioner would receive only P108,000.00. The rule above-quoted is very clear on the amount of commissioner’s fees. The award made by the RTC in the amount of 2½% of the total amount of just compensation, i.e., 2½% of P1,383,179,000.00, which translates to P34,579,475.00, is certainly unjustified and excessive. x x x49
Rule 141, Section 16 of the Rules of Court, provides that:cralavvonlinelawlibrary
“SEC. 16. Fees of commissioners in eminent domain proceedings. — The commissioners appointed to appraise land sought to be condemned for public uses in accordance with these rules shall each receive a compensation to be fixed by the court of NOT LESS THAN THREE HUNDRED (P300.00) PESOS per day for the time actually and necessarily employed in the performance of their duties and in making their report to the court, which fees shall be taxed as a part of the costs of the proceedings.”
Endnotes:
1 Rollo, pp. 32-69.cralawlibrary
2 Id. at 73-84. Penned by Associate Justice Mario V. Lopez with Associate Justices Romulo V. Borja and Elihu A. Ybañez concurring.cralawlibrary
3 Id. at 176-185. Penned by Judge Augustus L. Calo.cralawlibrary
4 Id. at 87-91.cralawlibrary
5 Id. at 220.cralawlibrary
6 Id. at 221.cralawlibrary
7 Records, p. 200.cralawlibrary
8 Id. at 71.cralawlibrary
9 Id. at 172-178.cralawlibrary
10 Id. at 179-184.cralawlibrary
11Rollo, p. 209.cralawlibrary
12 Records, p. 201.cralawlibrary
13 CA rollo, p. 88.cralawlibrary
14Entitled “Revised Rules and Regulations Governing the Valuation of Lands Voluntarily Offered or Compulsorily Acquired Pursuant to Republic Act No. 6657.”
15 Records, pp. 1-3.cralawlibrary
16 Id. at 16-20.cralawlibrary
17 Id. at 78.cralawlibrary
18 Id. at 83-85.cralawlibrary
19 Supra note 3, at 184-185.cralawlibrary
20 Id. at 184.cralawlibrary
21 Id. at 185.cralawlibrary
22 Records, p. 254.cralawlibrary
23 G.R. No. 164195, December 19, 2007, 541 SCRA 117.cralawlibrary
24 Section 17 of R.A. No. 6657 states:cralavvonlinelawlibrary
SEC. 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.cralawlibrary
25 Supra note 2, at 83.cralawlibrary
26 Id. at 87-91.cralawlibrary
27 Supra note 1, at 43-44.cralawlibrary
28 No. L-24441, March 10, 1977, 76 SCRA 47, 49.cralawlibrary
29 Rollo, pp. 424-450.cralawlibrary
30 Id. at 464-471.cralawlibrary
31 Land Bank of the Philippines v. Barrido, G.R. No. 183688, August 18, 2010, 628 SCRA 454, 458.cralawlibrary
32 Allied Banking Corporation v. Land Bank of the Philippines, G.R. No. 175422, March 13, 2009, 581 SCRA 301, 311 & 313-314, citing Land Bank of the Philippines v. Celada, G.R. No. 164876, January 23, 2006, 479 SCRA 495, 506-507.cralawlibrary
33 Rollo, p. 430. LBP came up with an AGP of 1,125 while the SAC came up with an AGP of 3,375. Moreover, LBP accorded the subject property a higher Market Value per Tax Declaration in the amount of P32,514.15 as compared to that of the SAC in the amount of P28,630.00.cralawlibrary
34 Supra note 8.cralawlibrary
35 Id. at 63.cralawlibrary
36 TSN, December 22, 1999, pp. 13, 18-19.cralawlibrary
37 Records, p. 186.cralawlibrary
38 Id. at 188-195.cralawlibrary
39 Id. at 196.cralawlibrary
40 Id. at 197.cralawlibrary
41 See Land Bank of the Philippines v. Colarina, G.R. No. 176410, September 1, 2010, 629 SCRA 614, 640.cralawlibrary
42 Land Bank of the Philippines v. Department of Agrarian Reform, G.R. No. 171840, April 4, 2011, 647 SCRA 152, 169.cralawlibrary
43 Land Bank of the Philippines v. Wycoco, 464 Phil. 83, 100 (2004), citing Reyes v. National Housing Authority, 443 Phil. 603, 616 (2003) and Republic v. Court of Appeals, G.R. No. 146587, July 2, 2002, 383 SCRA 611, 623. Please also see Land Bank of the Philippines v. Escandor, G.R. No. 171685, October 11, 2010, 632 SCRA 504, 516.cralawlibrary
44 G.R. Nos. 177404 and 178097, June 25, 2009, 591 SCRA 1, 23.cralawlibrary
45 G.R. No. 182431, November 17, 2010, 635 SCRA 285.cralawlibrary
46 Id. at 299.cralawlibrary
47 G.R. No. 170422, March 7, 2008, 548 SCRA 52, 62-63.cralawlibrary
48 Supra note 23.cralawlibrary
49 Id. at 143-144.