42 APO Fruits V CA

APO FRUITS vs.
CA | 42
EN BANC
APO FRUITS CORPORATION and HIJO PLANTATION, INC. Petitioners,

vs. THE HON. COURT OF APPEALS and LAND BANK OF THE
PHILIPPINES, Respondents.
(G.R. No. 164195, December 4, 2009)
BERSAMIN, J.:
TOPIC: Who exercises the power of eminent domain?
The taking of property under R.A 6657 or the Comprehensive Agrarian

Reform Law (CARL) facilitated by the Department of Agrarian Reform (DAR) is an
exercise by the State of the power of eminent domain. This involves the purchase
by the government, through the Land Bank of the Philippines (LBP), of
agricultural lands for sale and distribution to farmers. As a purchase, it involves
an exchange of values – the landholdings in exchange for the LBP’s payment.
FACTS:
On 12 October 1995, Apo Fruits Corp. (AFC) and Hijo Plantation Inc. (HPI),
owners of 5 parcels of land (1338.60 has.) located in San Isidro, Tagum, Davao
voluntarily offered to sell their properties to the Department of Agrarian Reform (DAR).
DAR offered P86.9M and P164.40 to AFC and HPI respectively. Both rejected
the offer for being very low. The DAR Adjudication Board (DARAB) failed to decide on
the valuation of the land for three years but respondent Land Bank of the Philippines
(LBP) still deposited P26.4M (AFC) and P45.5M (HPI) to petitioners’ bank accounts
which they withdrew after.
On 9 December 1996, titles over the lands were cancelled and new ones were
issued in the name of the Republic of the Philippines which were later distributed to
farmers under the Comprehensive Agrarian Reform Program (CARP).
Because of DARAB’s failure to adjudicate, petitioners filed a complaint for

determination of just compensation before the RTC of Davao which granted the same
on September 25, 2001. The ruling was based on the reports from assessors that the
purchase price should be higher than what DAR has offered (P103.33/ sq. m; a total of
P1.38B for AFC and HPI).
APO FRUITS vs. CA | 42
Upon Motion for Reconsideration, the RTC modified its earlier ruling and added
that DAR should pay interest at a rate of 12% per annum computed from the time the
complaint was filed until the finality of the decision in addition to the just compensation.
DAR appealed to the CA, the CA reversed the RTC ruling. The case was then elevated
to the SC Third Division where the Court reversed the CA ruling and affirmed the RTC
decision with a slight modification that the order to pay interest at 12% per annum be
deleted entirely. Hence, this Motion for Reconsideration.
ISSUE:
1. Whether or not AFC and HPI were entitled to the payment of interest in addition
to the amount of just compensation that is due them.
RULING:
No. AFC and HPI are not entitled to the payment of interest in addition to
the amount of just compensation that is due them.
Just compensation refers to the sum equivalent to the market value of the
property, broadly described to be the price fixed by the seller in open market in the
usual and ordinary course of legal action and competition, or the fair value of the
property as between one who receives and one who desires to sell. It is fixed at the
time of the actual taking by the State.
Thus, if property is taken for public use before compensation is deposited with
the court having jurisdiction over the case, the final compensation must include
interests on its just value, to be computed from the time the property is taken up to
the time when compensation is actually paid or deposited with the court. In fine,
between the taking of the property and the actual payment, legal interests accrue in
order to place the owner in a position as good as (but not better than) the position he
was in before the taking occurred.
In the case of LBP vs. Wycoco, interest on the just compensation is imposed only
in case of delay in the payment thereof which must be sufficiently established. Given
the foregoing, we find that the imposition of interest on the award of just
compensation is not justified and should therefore be deleted.
It must be emphasized that "pertinent amounts were deposited in favor of AFC

and HPI within fourteen months after the filing by the latter of the Complaint for
determination of just compensation before the RTC". It is likewise true that AFC and
APO FRUITS vs. CA | 42
HPI already collected P149.6 and P262 million, respectively, representing just
compensation for the subject properties. Clearly, there is no unreasonable delay in
the payment of just compensation which should warrant the award of 12% interest
per annum in AFC and HPI’s favor
CONCLUSION: The Court denies the petitioners’ second motion for reconsideration
(with respect to the denial of the award of legal interest and attorney's
fees), and reiterates the decision dated February 6, 2007 and the
resolution dated December 19, 2007 of the Third Division.

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APO FRUITS vs.

APO FRUITS CORPORATION and HIJO PLANTATION, INC. Petitioners,

(G.R. No. 164195, December 4, 2009)

TOPIC: Who exercises the power of eminent domain?

The taking of property under R.A 6657 or the Comprehensive Agrarian

Because of DARAB’s failure to adjudicate, petitioners filed a complaint for

It must be emphasized that "pertinent amounts were deposited in favor of AFC

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