Calalang vs Williams

Facts: The National Traffic Commission, in its resolution of 17 July 1940, resolved to recommend to the Director of Public
Works and to the Secretary of Public Works and Communications that animal-drawn vehicles be prohibited from passing
along Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas Street, from 7:30 a.m. to 12:30 p.m. and
from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo Street to Echague
Street, from 7 a.m. to 11 p.m., from a period of one year from the date of the opening of the Colgante Bridge to traffic.

The Chairman of the National Traffic Commission, on 18 July 1940, recommended to the Director of Public Works the
adoption of the measure proposed in the resolution, in pursuance of the provisions of Commonwealth Act 548, which
authorizes said Director of Public Works, with the approval of the Secretary of Public Works and Communications, to
promulgate rules and regulations to regulate and control the use of and traffic on national roads. On 2 August 1940, the
Director of Public Works, in his first indorsement to the Secretary of Public Works and Communications, recommended
to the latter the approval of the recommendation made by the Chairman of the National Traffic Commission, with the
modification that the closing of Rizal Avenue to traffic to animal-drawn vehicles be limited to the portion thereof
extending from the railroad crossing at Antipolo Street to Azcarraga Street.

On 10 August 1940, the Secretary of Public Works and Communications, in his second indorsement addressed to the
Director of Public Works, approved the recommendation of the latter that Rosario Street and Rizal Avenue be closed to
traffic of animal-drawn vehicles, between the points and during the hours as indicated, for a period of 1 year from the
date of the opening of the Colgante Bridge to traffic.

The Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be enforced the rules and
regulations thus adopted. Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought
before the Supreme court the petition for a writ of prohibition against A. D. Williams, as Chairman of the National Traffic
Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of Public Works and
Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of Police of
Manila.

Issue: Whether the rules and regulations promulgated by the Director of Public Works infringe upon the constitutional
precept regarding the promotion of social justice to insure the well-being and economic security of all the people.

Held: The promotion of social justice is to be achieved not through a mistaken sympathy towards any given group. Social
justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the humanization of laws and the
equalization of social and economic forces by the State so that justice in its rational and objectively secular conception
may at least be approximated. Social justice means the promotion of the welfare of all the people, the adoption by the
Government of measures calculated to insure economic stability of all the competent elements of society, through the
maintenance of a proper economic and social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the exercise of
powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex. Social
justice, therefore, must be founded on the recognition of the necessity of interdependence among divers and diverse
units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in
our social and economic life, consistent with the fundamental and paramount objective of the state of promoting the
health, comfort, and quiet of all persons, and of bringing about "the greatest good to the greatest number."
Association of Small Landowners in the Philippines vs. Honorable Secretary of
Agrarian Reform
G.R. No. 78742                        July 14, 1989

Petitioner: Association of Small Landowners in the Philippines

Respondent: Honorable Secretary of Agrarian Reform

Facts: These are consolidated cases which involve common legal, including serious challenges to the
constitutionality of the several measures such as P.D. No. 27, E.O. No. 228, Presidential Proclamation No.
131, E.O. No. 229, and R.A. No. 6657.
G.R. No. 79777
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of separation
of powers, due process, equal protection and the constitutional limitation that no private property shall be
taken for public use without just compensation. G.R. No. 79310
G.R. No. 79310
This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229. They contend that
taking must be simultaneous with payment of just compensation as it is traditionally understood, i.e., with
money and in full, but no such payment is contemplated in Section 5 of the E.O. No. 229.
G.R. No. 79744
The petitioner argues that E.O. Nos. 228 and 229 are violative of the constitutional provision that no
private property shall be taken without due process or just compensation.
G.R. No. 78742
Petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention
because the Department of Agrarian Reform has so far not issued the implementing rules required under
the above-quoted decree.

Issue:  Whether agrarian reform is an exercise of police power or eminent domain

Ruling: There are traditional distinctions between the police power and the power of eminent domain that
logically preclude the application of both powers at the same time on the same subject. Property
condemned under the police power is noxious or intended for a noxious purpose, such as a building on the
verge of collapse, which should be demolished for the public safety, or obscene materials, which should be
destroyed in the interest of public morals. The confiscation of such property is not compensable, unlike the
taking of property under the power of expropriation, which requires the payment of just compensation to
the owner.

The cases before us present no knotty complication insofar as the question of compensable taking is
concerned. To the extent that the measures under challenge merely prescribe retention limits for
landowners, there is an exercise of the police power for the regulation of private property in accordance
with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such
owners of whatever lands they may own in excess of the maximum area allowed, there is definitely a
taking under the power of eminent domain for which payment of just compensation is imperative. The
taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of
the title to and the physical possession of the said excess and all beneficial rights accruing to the owner in
favor of the farmer-beneficiary. This is definitely an exercise not of the police power but of the power of
eminent domain

G.R. No. L-62626, July 18, 1984

Spouses Cayetano and Patricia Tiongson, etc. vs CA and Teodoro Macaya

Facts: 1946, Severino Manotok donated and transferred to his 8 children and 2 grandchildren a 34 hectare land in
Quezon City. Severino Manotok was appointed judicial guardian of his minor children. There was no tenant occupying
the property at the time of the donation.

Later, Teodoro Macaya accompanied Vicente Herrera, the overseer of the property, went to the Manotok and
pleaded that he be allowed to live in the property to prevent theft and to guard the property. Manotok allowed Macaya
but imposed the condition that any time the owners needed to take the property, Macaya and his family must vacate,
and that he could raise animals and plant according to his needs, and that the owners have no responsibility to Macaya
and he will use only 3 hectares. These conditions were not put in writing.

In 1950, the property owners organized themselves as a corporation and transferred the 34 hectare land a
capital contribution to the capital stock of the corporation. Later, when the owners demanded for payment of taxes,
Macaya agreed to help pay the taxes by remitting 10 cavans of palay every year as his contribution. Later, owners
requested Macaya to increase his contribution to 20 cavans, Macaya agreed. Later, Macaya pleaded that he will
contribute 10 cavans only, the owners said the "he might as well not deliver anymore". Macaya did not deliver palays
from then on.

1974, the owners executed a Unilateral Deed of Conveyance of the property to Patricia Tiongson, etc. Macaya
was informed that the land is needed for house construction of the owners and was asked to vacate, Macaya pleaded
that he may be allowed to harvest first before vacating. However, after harvest, Macaya did not vacate and even expand
his cultivation to 6 hectares without the consent of the owners.

Issue: Whether there is tenancy relationship between the parties.

Ruling: Real estate taxes of the property declare the land as residential. The physical view of the property also shows
that the land was a rolling forestal land without any flat portion except the one tilled by Macaya.

As to the sharing, the decision of the petitioners not to ask for anymore contributions from Macaya reveals that
there was no tenancy relationship ever agreed upon by the parties. Neither can such relationship be implied from the
facts as there was no agreed system of sharing the produce of the property. Moreover, from 1946 to 1956 at which
time, Macaya was also planting rice, there was no payment whatsoever. At the most and during the limited period when
it was in force, the arrangement was a civil lease where the lessee for a fixed price leases the property while the lessor
has no responsibility whatsoever for the problems of production and enters into no agreement as to the sharing of the
costs of fertilizers, irrigation, seedlings, and other items. 

As to consent, the lot was taxed as residential land in a metropolitan area. There was clearly no intention on the
part of the owners to devote the property for agricultural production but only for residential purposes. Thus, together
with the third requisite, the fourth requisite which is the purpose was also not present.

There was no agreement as to any system of sharing the produce of the land. The petitioners did not get
anything from the harvest and private respondent Macaya was using and cultivating the land free from any charge or
expense.

G.R. No. 78214, December 5, 1988

Yolanda Caballes vs Dept. Agrarian Reform, Hon. Heherson Alvarez and Bienvenido Abajon

Facts: The landholding subject of the controversy is consists of 60 sqm was acquired by spouses Arturo and Yolanda
Caballes by virute of a Deed of Sale executed by Andrea Alicaba Millenes, this land is situated in Lawaan Talisay, Cebu.
Before the sale of the property to Caballes, Bienvenido Abajon constructed his house on a protion of the land, paying
monthly rental to Andrea Millenes. Abjon was likewise allowed to plant thereon, and they have agreed that the produce
thereon would be shred by them 50-50.

When the property was sold, Caballes told Abajon that they will put up a poultry on the land and they intended
to build it close to Abajon's house and they pursuaded Abajon to transfer his dwelling to the opposite portion of the
land. Abajon offered to pay renta; to the new owners, but they refuse and later demanded for Abajon to vacate. Abajon
refused to leave. DAR concluded that Abajon was a tenant of the former owner, Andrea.

Issue: Whether Abajon is a tenant under the new owners.

Ruling: Abajon is not a tenant for it only occupied a miniscule portion of the land which cannot be interpreted
as economic-family size farm under the definition of RA 3844.

The essential requisites of a tenancy relationship are:

1.            The parties are the landowner and the tenant;

2.            The subject is agricultural land;
3.            There is consent;
4.            The purpose is agricultural production;
5.            There is personal cultivation; and
6.            There is sharing of harvests.

All these requisites must concur in order to create a tenancy relationship between the parties. The absence of
one does not make an occupant of a parcel of land, or a cultivator thereof, or a planter thereon, a de jure tenant. This is
so because unless a person has established his status as a de jure tenant, he is not entitled to security of tenure nor is he
covered by the Land Reform Program of the Government under existing tenancy laws.

Therefore, the fact of sharing alone is not sufficient to establish a tenancy relationship. Certainly, it is not
unusual for a landowner to accept some of the produce of his land from someone who plants certain crops thereon. This
is a typical and laudable provinciano trait of sharing or patikim, a native way of expressing gratitude for favor received.
This, however, does not automatically make the tiller-sharer a tenant thereof especially when the area tilled is only 60,
or even 500, square meters and located in an urban area and in. the heart of an industrial or commercial zone at that.
Tenancy status arises only if an occupant of a parcel of land has been given its possession for the primary purpose of
agricultural production. The circumstances of this case indicate that the private respondent's status is more of a
caretaker who was allowed by the owner out of benevolence or compassion to live in the premises and to have a garden
of some sort at its south western side rather than a tenant of the said portion. Anent the second assignment of error,
the petitioner argues that since Abajon, is not an agricultural tenant, the criminal case for malicious mischief filed
against him should be declared as proper for trial so that proceedings in the lower court can resume.

G.R. No. 70736, March 16, 1987

Bonifacio Hilario and Eduarda Buencamino Hilario vs Hon. IAC and Salvador Baltazar

Facts: January 1981, Salvador Baltazar filed a verified complaint with Courts of Agrarian Relation-Bulacan alleging that
since January 1955 he had been continuous possession as a share tenant of a parcel of land in Bulacan which was
previously owned by Socorro Vda. de Balagtas. Thereafter, the spouses Hilario began to threaten him to desist from
entering and cultivating the land.

Baltazar claims that he became sa tenant of Socorro by virtue of a kasunduan executed in 1979. After the death
of Socorro, he allegedly gave the share pertaining to the daughter of Socorro Corazon Pengzon. It was only in December
1980 that Baltazar knew that portion of the land was already owned by the Hilarios.

The Hilarios, aver that they acquired the land from the PNB after it had been foreclosed. CAR ruled that the land
in question is not an agricultural land but a plain "bakuran". Hence, Baltazar is not a tenant.

CA however remanded the case to the lower court for further proceesings on the ground that the findings of
CAR were not supported by substantial evidence. In compliance, CAR admitted additional evidence.

Again, CAR declared Baltazar as non-tenant. Baltazar appealed with IAC, IAC set aside the decision of the CAR 
and entitling Baltazar security of tenure on the land. Spouse Hilario then petition for review.

Issue: Whether Baltazar is a tenant.

Ruling: The evidence presented is more than sufficient to justify the conclusion that Baltazar is not a tenant of the
landholding. (a) The kasunduan refers to 2-hectare land, while the landholding is only 4000 sqm. (b) When Socorro died,
no new contract was executed. (c) Corazon did not receive any rental or share from the produce of the land.

ENDAYA vs. CA G.R. No. 88113; October 23, 1992

NATURE OF THE CASE: Petition for Review on Certiorari assailing the decision of the Court of Appeals
reversing the judgment of the RTC.
FACTS: 1. Spouses Trinidad and San Diego owned a piece of agricultural land consisting of 20,200 square
meters situated at Batangas, devoted for rice and corn. It is undisputed that as far back as 1934, private
respondent Fideli has been cultivating the land as a tenant of the Spouses under a 50-50 sharing agreement.
2. On 1974, a lease contract was executed between the Spouses San Diego and one Regino Cassanova for a
period of 4 years from 1974-1978. The lease contract obliged Cassanova to pay P400 per hectare per annum and
gave him authority to oversee the planting of crops of the land. Private respondent signed the lease contract as
one of 2 witnesses.
3. The lease contract was subsequently renewed to last until 1980 but the rental was raised to P600. Again,
private respondent signed the contract as witness.
4. During the entire duration of the lease contract between the Spouses San Diego and Cassanova, private
respondent continuously cultivated the land, sharing equally with Cassanova the net produce of the harvests.
5. On 1980, the Spouses San Diego sold the land to petitioners. The sale was registered with the Register of
deeds of Batangas and a TCT was issued. Private respondent continued to farm the land although petitioners
claim that private respondent was told immediately after the sale to vacate the land. In any case, it is undisputed
that private respondent deposited with the Luzon Development Bank a partial payment of the landowner’s share
in the harvest for the years 1980 until 1985.
6. Due to petitioners persistent demand for private respondent to vacate the land, private respondent filed a
complaint with the RTC praying that he be declared the agricultural tenant of petitioners.
RTC Ruling: After the trial, the trial court decided in favor of the petitioners by holding that private respondent
is not an agricultural lessee of the land now owned by the petitioners.
CA Ruling: The Court of Appeals rendered the judgment, reversed the RTC decision, and declared private
respondent to be the agricultural lessee of the subject landholding. Hence, this petition wherein private
respondent’s status as an agricultural lessee and his security of tenure as such are being disputed by petitioners.
ISSUE/S: 1. WON the lease contract entered into by the original landowners with Cassanova terminates the
agricultural leasehold relationship between the Spouses and the private respondent.
2. WON the private respondent can no longer be considered as an agricultural lessee because after they
purchased the land from the Spouses, the private respondent did not secure their permission to cultivate the land
as an agricultural lessee.
Case for Petitioner: Petitioner contends that when the original landowners, the Spouses San Diego,
entered into a lease contract with Cassanova, the agricultural leasehold relationship between Spouses San Diego
and private respondent was thereby terminated. Petitioners argue that a landowner cannot have a civil law lease
contract with one person and at the same time have an agricultural leasehold agreement with another over the
same land. It is further argued that because private respondent consented to the lease contract between the
Spouses San Diego and Cassanova, signing as he did the lease agreement and the renewal contract as witness,
private respondent has waived his rights as an agricultural lessee. Petitioner also contends that after they
purchased the land from the Spouses, private respondent did not secure their permission to cultivate the land as
an agricultural lessee.
Case for Private Respondent: Private respondent has been cultivating the subject farm landholding with
a 50-50 sharing arrangement with the Spouses San Diego, petitioner’s predecessors-in-interest
SC RULING with RATIO:
1. NO. R.A. No. 3844 (1963), as amended By R.A. No. 6839 (1971), which is the relevant law
governing the events at hand, abolished share tenancy throughout the Philippines from 1971 and established the
agricultural leasehold system by operation of law. Section 7 of the said law gave agricultural lessees security of
tenure by providing the following: "The agricultural leasehold relation once established shall confer upon the
agricultural lessee the right to continue working on the landholding until such leasehold relation is extinguished.
The agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefrom
unless authorized by the Court for causes herein provided." The fact that the landowner entered into a civil lease
contract over the subject landholding and gave the lessee the authority to oversee the farming of the land, as was
done in this case, is not among the causes provided by law for the extinguishment of the agricultural leasehold
relation. Section 10 of the law provides: Sec. 10. Agricultural Leasehold Relation Not Extinguished by
Expiration of Period, etc. — The agricultural leasehold relation under this code shall not be extinguished by
mere expiration of the term or period in a leasehold contract nor by the sale, alienation or transfer of the legal
possession of the landholding. In case the agricultural lessor sells, alienates or transfers the legal possession of
the landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the
obligations of the agricultural lessor. Hence, transactions involving the agricultural land over which an
agricultural leasehold subsists resulting in change of ownership, e.g., sale, or transfer of legal possession, such
as lease, will not terminate the right of the agricultural lessee who is given protection by the law by making
such rights enforceable against the transferee or the landowner's successor in interest.
2. NO. It is true that the Court has ruled that agricultural tenancy is not created where the consent the
true and lawful owners is absent. But this doctrine contemplates a situation where an untenanted farm land is
cultivated without the landowner's knowledge or against her will or although permission to work on the farm
was given, there was no intention to constitute the worker as the agricultural lessee of the farm land. The rule
finds no application in the case at bar where the petitioners are successors-in-interest to a tenanted land over
which an agricultural leasehold has long been established. The consent given by the original owners to
constitute private respondent as the agricultural lessee of the subject landholding binds private respondents
whom as successors-in-interest of the Spouses San Diego, step into the latter's shoes, acquiring not only their
rights but also their obligations.
Contradicting their position that no agricultural leasehold exists over the land they acquired from the
Spouses San Diego, petitioners also pray for the termination of the tenancy of private respondent allegedly due
to: (a) non-payment of the agricultural lease rental; and (b) animosity between the landowners and the
agricultural lessee. The Court, however, observes that nowhere in the petitioners' Answer to private respondent's
Complaint or in the other pleadings filed before the trial court did petitioners allege grounds for the termination
of the agricultural leasehold. Well-settled is the rule that issues not raised in the trial court cannot be raised for
the first time on appeal. WHEREFORE, premises considered, the Petition is DISMISSED and the decision of
the Court of Appeals AFFIRMED. Private respondent is hereby ordered to pay the back rentals from 1980 until
1992 plus interest at the legal rate. An accounting of the production of the subject landholding is to be made by
private respondent to the Regional Trial Court of Tanauan, Batangas which shall determine the amount due to
petitioners based on the rate ordered above.
MILESTONE REALTY AND CO., INC. v. COURT OF APPEALS G.R. No. 135999. April 19, 2002.
FACTS: 1. Spouses Alfonso Olympia and Carolina Zacarias and spouses Claro and Cristina were coowners of
an agricultural land, Lot 616 of the Malinta Estate, with an area of 23,703 square meters. In 1976, Carolina
Zacarias became the owner by virtue of a Deed of Extrajudicial Settlement.
2. Anacleto Peña was a tenant of the property, a holder of a Certificate of Agricultural Leasehold issued on
Feb. 23, 1982, and had a house constructed on the lot. Anacleto had several children on his first marriage,
among whom are Emilio Peña and Celia Segovia. On Feb. 17, 1990, Anacleto died intestate and he was
survived by his second wife, Delia Razon, and his children in his first marriage, including Emilio.
3. Emilio and Delia, with the help of her son-in-law Raymundo, continued tilling and cultivating the property.
4. In 1992, Emilio signed a handwritten declaration that he was the tenant in the land and he was returning the
landholding to Carolina Zacarias in consideration of the sum of P1,500,000 as “disturbance compensation”. He
executed “Katibayang Paglilipat ng Pagmamay-ari”.
5. In 1992, Carolina Zacarias executed a deed of sale transferring Lot 616 to Milestone Realty for P7,110,000.
6. Milestone became the owner of Lots 616 and 617 of the Malinta Estate with a total area of 3 hectares.
7. Delia and Raymundo filed a complaint against Emilio with the PARAD to declare null and void the sale and
to respect their tenancy.
8. Carolina argued that she chose Emilio Peña as her tenant beneficiary on the property within 30 days after the
death of Anacleto, conformably with Sec. 9 of R.A. 3844.
Section 9. Agricultural Leasehold Relation Not Extinguished by Death or Incapacity of the Parties - In case of death or
permanent incapacity of the agricultural lessee to work his landholding, the leasehold shall continue between the
agricultural lessor and the person who can cultivate the landholding personally, chosen by the agricultural lessor within
one month from such death or permanent incapacity, from among the following: (a) the surviving spouse; (b) the eldest
direct descendant by consanguinity; or (c) the next eldest descendant or descendants in the order of their age: Provided,
That in case the death or permanent incapacity of the agricultural lessee occurs during the agricultural year, such choice
shall be exercised at the end of that agricultural year: Provided, further, That in the event the agricultural lessor fails to
exercise his choice within the periods herein provided, the priority shall be in accordance with the order herein
established.

Procedural:
9. PARAD decision: It dismissed the complaint and ruled that Sec. 9 of R.A. 3844 is not absolute and may be
disregarded for valid cause and noted that Emilio’s 2 siblings openly recognised Emilio as the legitimate
successor to Anacleto’s tenancy rights.
10. DARAB: It reversed the decision and declared Delia Razon as the bona fide tenant over the land-holding in
question. It noted that Carolina’s affidavit did not show any categorical admission that she made her choice
within the 1 month period except to state that “when Anacleto died, the right of the deceased was inherited by
Emilio” which could only mean that she recognised Emilio by force of circumstance under a nebulous time
frame.
11. COURT OF APPEALS It affirmed DARAB’s decision. CA noted that Carolina failed to choose within the
statutory period and without prior or simultaneous notice to Delia, Carolina made her choice of Emilio as
substitute tenant only after they had agreed to sell the property. ISSUE: Whether or not Delia Razon Peña has a
right of first priority over Emilio Peña in succeeding to the tenancy rights of Anacleto over the subject
landholding.
Case for Petitioner: Sec. 9 does not require any form or manner in which choice should be made. Petitioners
assail the findings that there was no convincing proof that Carolina exercise her right to choose from among the
qualified heirs, when in fact a choice was made in Carolina’s affidavit when she recognised Emilio as the
successor to Anacleto’s tenancy rights. Delia could not have qualified as successor-tenant to Anacleto due to
lack of personal cultivation and she had not been paying rent on the land.
Case for Defendant: Carolina did not choose the successor to Anacleto’s tenancy rights within one month from
the death of Anacleto. It was only after 2 years that Carolina and Emilio claimed in their affidavits that Emilio
inherited the rights of Anacleto as a tenant. Such inaction is equivalent to waiver on Carolina’s part to choose a
substitute tenant and Carolina made the choice in favour of Emilio only by force of circumstance when she was
in the process of negotiating the sale to Milestone.
SC RULING WITH RATIO: Delia Razon is first in the order of preference.
Ratio: Carolina had failed to exercise her right to choose a substitute for the deceased tenant, from among those
qualified, within the statutory period. In Sec. 9 of RA 3844, in case of death or permanent incapacity of the
agricultural lessee to work his landholding, the leasehold shall continue and the agricultural lessor is mandated
by law to choose a successor-tenant within one month from the death or incapacity of the agricultural lessee
from among the following:
(1) the surviving spouse (2) eldest direct descendant by consanguinity (3) next eldest direct descendant or
descendants in the order of their age Should the lessor fail to exercise his choice within one month from the
death of the tenant, the priority shall be in accordance with the aforementioned order. Thus, applying Sec. 9
of RA 3844, Delia Razon Peña is the first in the order of preference to succeed the tenancy rights of her
husband because the lessor, Carolina, failed to exercise her right of choice within one month period from
the time of Anacleto’s death.
DISPOSITIVE: Partially granted. Delia Razon is the successor of Anacleto Peña as the tenant, thereby allowing
her right of redemption over the land within the prescribed period granted by law. Sale of landholding valid,
subject to the tenancy rights and right of redemption by the tenant lessee.
PABLO BASBAS, plaintiff-appellant, vs. RUFINO ENTENA, FLAVIANO TIBAY and ANGELINA
ENTENA (Spouses), and R. M. RESURRECCION as acting Registrar of Deeds of the Province of Laguna,
defendants-appellees. G.R. No. L-26255 June 30, 1969
NATURE: Appeal from the decision of the CAR.
FACTS: 1. Basbas is the leasehold tenant of a riceland owned by Rufino.
2. Rufino executed a Deed of Sale covering the riceland in favor of Sps. Flaviano and Angelina. 3. Rufino sent
a letter to Basbas informing the latter that the land was for sale and that Basbas was given a certain period to
communicate his intention to purchase it.
4. Basbas sent a reply accepting the offer, although disagreeing with the price. Basbas also mentioned that he
was enlisting the aid of the government in purchasing the land.
5. Basbas sent a letter to the Land Authority asking for help to acquire the land. The Land Authority replied
that his request is being processed and action will be taken thereon once the Land Bank has been fully
organized.
6. Rufino and his wife executed an affidavit stating that Basbas was notified of the sale before its conveyance,
that Basbas refused or failed to exercise the right of pre-emption granted under the Agricultural Land Reform
Code.
7. The submission of the affidavit enabled the registration of the Deed of Sale in favor of Sps. Flaviano and
Angelina.
8. Basbas filed a case before the CAR seeking to compel Rufino to sell the land to him.
PROCEDURAL:

CAR decision: Case dismissed. Basbas failed to make tender of payment and consignation of the purchase price hence
the landowner cannot be compelled to sell the land to him.

Issue: Whether or not tender of payment and judicial consignation of the purchase price are necessary before a tenant-
lessee may avail himself of the right of pre-emption or of redemption provided in Sections 11 and 12 of the Agricultural
Land Reform Code.

Case for Plaintiff: The CAR erred in dismissing the action for non-tender of the redemption price, since the law does not
require such tender, and the tenant is not bound to redeem his land at the price for which it was sold, but only at a
reasonable price and consideration. The SC also ruled in two past cases that previous tender of the redemption money
is not indispensable.

SC RULING with RATIO: The CAR did not err.

Basbas’s claim to preference in purchasing the land, in case the said land is to be sold, or to his right to redeem it in 2
years should the land be sold without his knowledge, is predicated upon Sections 11 and 12 of the Agricultural Land
Reform Code (Republic Act 3844): SEC. 11. Lessee's Right of Pre-emption. — In case the agricultural lessor decides to sell
the landholding, the agricultural lessee shall have the preferential right to buy the same under reasonable terms and
conditions x x x SEC. 12. Lessee's Right of Redemption. — In case the landholding is sold to a third person without the
knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a reasonable price and
consideration: Provided, That the entire landholding sold must be redeemed: x x x The right of redemption under this
Section may be exercised within two years from the registration of the sale, and shall have priority over any other right
of legal redemption. There is no showing that the Land Reform Council has proclaimed that the government
machineries and agencies in the region are already operating, as required by section 4 of Republic Act 3844.

Granting that Sections 11 and 12 are operative, yet this Court has ruled in a past case that the timely exercise of the
right of legal redemption requires either tender of the price or valid consignation thereof. The redemption price should
either be fully offered in legal tender or else validly consigned in court. Only by such means can the buyer become
certain that the offer to redeem is one made seriously and in good faith. A buyer can not be expected to entertain an
offer of redemption without attendant evidence that the redemptioner can, and is willing to accomplish the repurchase
immediately. A different rule would leave the buyer open to harassment by speculators or crackpots, as well as to
unnecessary prolongation of the redemption period, contrary to the policy of the law. The right of a redemptioner to
pay a reasonable price does not excuse him from the duty to make proper tender of the price that can be honestly
deemed reasonable under the circumstances, without prejudice to final arbitration by the courts.

As shown by the evidence in this case, the redemptioner has no funds and must apply for them to the Land Authority,
which, in turn, must depend on the availability of funds from the Land Bank. It then becomes practically certain that the
landowner will not be able to realize the value of his property for an indefinite time beyond the two years redemption
period. The cases pointed out by Basbas in support of his argument involve redemptioners who had consigned or
deposited in court the redemption price when action was filed, for which reason prior tender was held excused. In this
case, there was neither prior tender nor did judicial consignation accompany the filing of the suit. Unless tender or
consignation is made requisite to the valid exercise of the tenant's right to redeem, everytime a redemption is
attempted, a case must be filed in court to ascertain the reasonable price.

On the other hand, a prior tender by the tenant of the price that he considers reasonable affords an opportunity to
avoid litigation, for the landowner may well decide to accept a really reasonable offer, considering that he would
thereby save the attorney's fees and the expense of protracted litigation. Section 74 of the Land Reform Act (RA 3844)
establishes a "Land Bank of the Philippines" intended "to finance the acquisition by the Government of landed estates
for division and resale to small landholders, as well as the purchase of the landholding by the agricultural lessee from
the landowner." No expression in this part of the law, however, indicates, or even hints, that the 2-year redemption
period will not commence to ran until the tenant obtains financing from the Land Bank, or stops the tenant from
securing redemption funds from some other source. DISPOSITIVE: WHEREFORE, the appealed order granting the motion
to dismiss the complaint is affirmed

LBP vs Leonila Celada G.R. No. 164876 January 23, 2006

Facts:  Respondent owns 22.3167 hectares of agricultural land situated in Calatrava, Carmen, Bohol of which
14.1939 hectares was identified in 1998 by the Department of Agrarian Reform (DAR) as suitable for
compulsory acquisition under the Comprehensive Agrarian Reform Program (CARP). The matter was then
indorsed to petitioner Land Bank of the Philippines (LBP) for field investigation and land valuation.  LBP
valued respondents land at P2.1105517 per square meter for an aggregate value of P299,569.61. The DAR
offered the same amount to respondent as just compensation, but it was rejected. Nonetheless, LBP deposited
the said sum in cash and bonds in the name of respondent.
 Pursuant to Section 16(d) of Republic Act (RA) No. 6657 or the Comprehensive Agrarian Reform Law of
1988, the matter was referred to the DAR Adjudication Board (DARAB), Region VII-Cebu City, for summary
administrative hearing on determination of just compensation.
 While the DARAB case was pending, respondent filed a petition for judicial determination of just
compensation against LBP, the DAR and the Municipal Agrarian Reform Officer (MARO) before the Regional
Trial Court of Tagbilaran City.
 LBP filed its Answer, that respondent must first await the outcome of the DARAB case before taking any
judicial recourse; that its valuation was arrived at by applying the formula prescribed by law whereas
respondents was based only on the current value of like properties.
 The DAR and the MARO likewise filed an Answer averring that the determination of just compensation rests
exclusively with the LBP. Thus, they are not liable to respondent and are merely nominal parties in the case.
Issue: WON SAC erred in assuming jurisdiction over the petition for determination of just compensation while
administrative proceedings are ongoing before the DARAB.
Ruling: No. The Supreme Court cited the below case. In Land Bank of the Philippines v. Court of Appeals, the
landowner filed an action for determination of just compensation without waiting for the completion of the
DARABs reevaluation of the land. The Court nonetheless held therein that the SAC acquired jurisdiction over
the action for the following reason: It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court,
has original and exclusive jurisdiction over all petitions for the determination of just compensation to
landowners. This original and exclusive jurisdiction of the RTC would be undermined if the DAR would vest
in administrative officials original jurisdiction in compensation cases and make the RTC an appellate court for
the review of administrative decision. Thus, although the new rules speak of directly appealing the decision of
adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the original and exclusive
jurisdiction to determine such cases is in the RTCs. Any effort to transfer such jurisdiction to the adjudicators and to
convert the original jurisdiction of the RTCs into appellate jurisdiction would be contrary to Sec. 57 and therefore would
be void. Thus, direct resort to the SAC by private respondent is valid. It would be well to emphasize that the taking of
property under RA No. 6657 is an exercise of the power of eminent domain by the State. The valuation of property or
determination of just compensation in eminent domain proceedings is essentially a judicial function which is vested with
the courts and not with administrative agencies. Consequently, the SAC properly took cognizance of respondents petition
for determination of just compensation.
Apo Fruits Corporation v. Land Bank of the Philippines [G.R. No. 164195. April 5, 2011]

FACTS Petitioners voluntarily offered to sell their lands to the government under Republic Act 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL). Government took petitioners’ lands on December 9, 1996. Land Bank valued the
properties atP165,484.47 per hectare, but AFC-HPI rejected the offer of that amount. Consequently, on instruction of the Department
of Agrarian Reform (DAR), Land Bank deposited for AFC and HPI P26,409,549.86 and P45,481,706.76, respectively, or a total
of P71,891,256.62. Upon revaluation of the expropriated properties, Land Bank eventually made additional deposits, placing the total
amount paid at P411,769,168.32 (P71,891,256.62 + P339,877,911.70), an increase of nearly five times. Both petitioners withdrew the
amounts. Still, they filed separate complaints for just compensation with the DAR Adjudication Board (DARAB), where it was
dismissed, after three years, for lack of jurisdiction.

Petitioners filed a case with the RTC for the proper determination of just compensation. The RTC ruled in favor of
petitioners fixing the valuation of petitioners’ properties at P103.33/sq.m with 12% interest plus attorney’s fees. Respondents appealed
to the Third Division of the Supreme Court where the RTC ruling was upheld. Upon motion for reconsideration, the Third Division
deleted the award of interest and attorney’s fees and entry of judgment was issued. The just compensation of which was only settled
on May 9, 2008. Petitioners filed a second motion for reconsideration with respect to denial of award of legal interest and attorney’s
fees and a motion to refer the second motion to the Court En Banc and was granted accordingly, restoring in toto the ruling of the
RTC. Respondent filed their second motion for reconsideration as well for holding of oral arguments with the Motion for Leave to
Intervene and to admit for Reconsideration in-Intervention by the Office of the Solicitor General in behalf of the Republic of the
Philippines.

ISSUES:

Political Law (Constitutional Law)

 (1)  Whether or not the “transcendental importance” does not apply to the present case.

(2)  Whether or not the standard of “transcendental importance” cannot justify the negation of the doctrine of immutability of a final
judgment and the abrogation of a vested right in favor of the Government that respondent LBP represents.

(3)  Whether or not the Honorable Court ignored the deliberations of the 1986 Constitutional Commission showing that just
compensation for expropriated agricultural property must be viewed in the context of social justice.

Civil Law:  Whether or not the second motion for reconsideration of respondent deleting interest and attorney’s fees amount to unjust
enrichment in its favor.

Remedial Law 

(1)  Whether or not the rules on second motion for reconsideration by the Supreme Court should be strictly complied with by a vote of
two-thirds of its actual membership.

(2)  Whether or not the holding of oral arguments would still serve its purpose.

(3)  Whether or not the Motion for Leave to Intervene and to admit for Reconsideration in-Intervention from the Office of the Solicitor
General may still be granted.

RULINGS:  Political Law (Constitutional Law)

(1)  No. The present case goes beyond the private interests involved; it involves a matter of public interest – the proper application of a
basic constitutionally-guaranteed right, namely, the right of a landowner to receive just compensation when the government exercises
the power of eminent domain in its agrarian reform program.

Section 9, Article III of the 1987 Constitution expresses the constitutional rule on eminent domain – “Private property shall not be
taken for public use without just compensation.” While confirming the State’s inherent power and right to take private property for
public use, this provision at the same time lays down the limitation in the exercise of this power. When it takes property pursuant to its
inherent right and power, the State has the corresponding obligation to pay the owner just compensation for the property taken. For
compensation to be considered “just,” it must not only be the full and fair equivalent of the property taken; it must also be paid to the
landowner without delay.

(2)  No. The doctrine “transcendental importance,” contrary to the assertion it is applicable only to legal standing questions, is justified
in negating the doctrine of immutability of judgment. It will be a very myopic reading of the ruling as the context clearly shows that
the phrase “transcendental importance” was used only to emphasize the overriding public interest involved in this case. The Supreme
Court said in their resolution:
That the issues posed by this case are of transcendental importance is not hard to discern from these discussions. A constitutional
limitation, guaranteed under no less than the all-important Bill of Rights, is at stake in this case: how can compensation in an eminent
domain case be “just” when the payment for the compensation for property already taken has been unreasonably delayed? To claim, as
the assailed Resolution does, that only private interest is involved in this case is to forget that an expropriation involves the
government as a necessary actor. It forgets, too, that under eminent domain, the constitutional limits or standards apply to government
who carries the burden of showing that these standards have been met. Thus, to simply dismiss the case as a private interest matter is
an extremely shortsighted view that this Court should not leave uncorrected.

xxxx

More than the stability of our jurisprudence, the matter before us is of transcendental importance to the nation because of the subject
matter involved – agrarian reform, a societal objective of that the government has unceasingly sought to achieve in the past half
century.

From this perspective, the court demonstrated that the higher interests of justice are duly served.

(3)  Yes. In fact, while a proposal was made during the deliberations of the 1986 Constitutional Commission to give a lower market
price per square meter for larger tracts of land, the Commission never intended to give agricultural landowners less than just
compensation in the expropriation of property for agrarian reform purposes.

[N]othing is inherently contradictory in the public purpose of land reform and the right of landowners to receive just compensation for
the expropriation by the State of their properties. That the petitioners are corporations that used to own large tracts of land should not
be taken against them. As Mr. Justice Isagani Cruz eloquently put it:

[S]ocial justice – or any justice for that matter – is for the deserving, whether he be a millionaire in his mansion or a pauper in his
hovel. It is true that, in case of reasonable doubt, we are called upon to tilt the balance in favor of the poor, to whom the Constitution
fittingly extends its sympathy and compassion. But never is it justified to prefer the poor simply because they are poor, or to reject the
rich simply because they are rich, for justice must always be served, for poor and rich alike, according to the mandate of the law.

Civil Law Yes. In the present case, it is undisputed that the government took the petitioners’ lands on December 9, 1996; the
petitioners only received full payment of the just compensation due on May 9, 2008. This circumstance, by itself, already confirms the
unconscionable delay in the payment of just compensation.

An added dimension is the impact of the delay. One impact – as pointed out above – is the loss of income the landowners suffered.
Another impact that the LBP now glosses over is the income that the LBP earned from the sizeable sum it withheld for twelve long
years. From this perspective, the unaccounted-for LBP income is unjust enrichment in its favor and an inequitable loss to the
landowners. This situation was what the Court essentially addressed when it awarded the petitioners 12% interest.

Remedial Law

 (1)  No. When the Court ruled on the petitioners’ motion for reconsideration by a vote of 12 Members (8 for the grant of the motion
and 4 against), the Court ruled on the merits of the petitioners’ motion. This ruling complied in all respects with the Constitution
requirement for the votes that should support a ruling of the Court. Admittedly, the Court did not make any express prior ruling
accepting or disallowing the petitioners’ motion as required by Section 3, Rule 15 of the Internal Rules. The Court, however, did not
thereby contravene its own rule on 2nd motions for reconsideration; since 12 Members of the Court opted to entertain the motion by
voting for and against it, the Court simply did not register an express vote, but instead demonstrated its compliance with the rule
through the participation by no less than 12 of its 15 Members. Viewed in this light, the Court cannot even be claimed to have
suspended the effectiveness of its rule on 2nd motions for reconsideration; it simply complied with this rule in a form other than by
express and separate voting.

(2)  No. The submissions of the parties, as well as the records of the case, have already provided this Court with enough arguments
and particulars to rule on the issues involved. Oral arguments at this point would be superfluous and would serve no useful purpose.

(3)  No. The interest of the Republic, for whom the OSG speaks, has been amply protected through the direct action of petitioner LBP
– the government instrumentality created by law to provide timely and adequate financial support in all phases involved in the
execution of needed agrarian reform. The OSG had every opportunity to intervene through the long years that this case had been
pending but it chose to show its hand only at this very late stage when its presence can only serve to delay the final disposition of this
case. The arguments the OSG presents, furthermore, are issues that this Court has considered in the course of resolving this case.
Thus, every reason exists to deny the intervention prayed for.
[G.R. No. 143276.  July 20, 2004]
LANDBANK OF THE PHILIPPINES, petitioner,
SPOUSES VICENTE BANAL and LEONIDAS ARENAS-BANAL, respondents.

FACTS: Spouses Vicente and Leonidas Banal, respondents, are the registered owners of agricultural land situated
in San Felipe, Basud, Camarines Norte.   A portion of the land was compulsorily acquired by the Department of
Agrarian Reform (DAR) pursuant to Republic Act (R.A.) No. 6657,[1] as amended, otherwise known as the
Comprehensive Agrarian Reform Law of 1988.
Respondents rejected the valuation of petitioner hence a summary administrative proceeding was conducted before
the Provincial Agrarian Reform Adjudicator (PARAD) to determine the valuation of the land.  Eventually, the PARAD
rendered its Decision affirming the Landbank’s valuation.

Dissatisfied with the Decision of the PARAD, respondents filed with the RTC a petition for determination of just
compensation.

In determining the valuation of the land, the trial court based the same on the facts established in another case
pending before it.

ISSUE: W/N the trial court erred in taking judicial notice of the average production figures in another case pending
before it and applying the same to the present case without conducting a hearing and without the knowledge or
consent of the parties

HELD: Well-settled is the rule that courts are not authorized to take judicial notice of the contents of the records of
other cases even when said cases have been tried or are pending in the same court or before the same
judge. They may only do so “in the absence of objection” and “with the knowledge of the opposing
party,” which are not obtaining here.
Furthermore, as earlier stated, the Rules of Court shall apply to all proceedings before the Special Agrarian Courts. 
In this regard, Section 3, Rule 129 of the Revised Rules on Evidence is explicit on the necessity of a hearing before
a court takes judicial notice of a certain matter, thus:

“SEC. 3.  Judicial notice, when hearing necessary. – During the trial, the court, on its own initiative, or on request of
a party, may announce its intention to take judicial notice of any matter and allow the parties to be heard
thereon.
“After the trial, and before judgment or on appeal, the proper court, on its own initiative or on request of a party, may
take judicial notice of any matter and allow the parties to be heard thereon if such matter is decisive of a material
issue in the case.”  (emphasis added)
The RTC failed to observe the above provisions.

G.R. Nos. 180772 and 180776               May 6, 2010

LAND BANK OF THE PHILIPPINES vs. DOMINGO AND MAMERTO SORIANO, Respondents.

For consideration is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by the Land Bank of the
Philippines (LBP) seeking the annulment of the Decision1 dated 9 October 2007 and the Resolution2 dated 12 December 2007 issued
by the Court of Appeals in CA-G.R. SP Nos. 89005 and 89288. The controversy is hinged on the determination of just compensation
for land covered by the Comprehensive Agrarian Reform Program (CARP).

First, the antecedents.: Domingo and Mamerto Soriano (respondents) are the registered owners of several parcels of rice land situated
in Oas, Albay. Out of the 18.9163 hectares of land3 owned by the respondents, 18.2820 hectares were placed under the Operations
Land Transfer and the CARP pursuant to Presidential Decree No. 274 and Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law.5

The LBP6 pegged the value of 18.0491 hectares of land at ₱482,363.957 (₱133,751.65 as land value plus ₱348,612.30
incremental interest), while the remaining 0.2329 hectare was computed at ₱8,238.94.8 Not satisfied with the valuation, respondents,
on 23 November 2000, instituted a Complaint9 for judicial determination of just compensation with the Regional Trial Court of
Legazpi City,10 sitting as a Special Agrarian Court (SAC). Respondents alleged that they are entitled to an amount of not less than
₱4,500,000.00 as just compensation.11

On 21 February 2005, the SAC rendered a judgment, ordering LBP to pay the respondents ₱894,584.94. The dispositive
portion reads:

ACCORDINGLY, the just compensation of the 18.0491 hectares of irrigated riceland is ₱133,751.79, plus increment of 6%
per annum computed annually beginning October 21, 1972, until the value is fully paid, and of the 0.2329 hectare of rain fed riceland
is ₱8,238.94 plus 12% interest per annum, beginning August 17, 1998, until the value is fully paid or a total of ₱894,584.94 as of this
date. Land Bank is ordered to pay the landowners Domingo Soriano and Mamerto Soriano said amount/land value in accordance with
law.12

The SAC applied the formula prescribed under Executive Order No. 228 in determining the valuation of the property, i.e.,
Land value = Average Gross Production x 2.5 x Government Support Price. It likewise granted compounded interest pursuant to
Department of Agrarian Reform (DAR) Administrative Order No. 13, series of 1994, as amended by DAR Administrative Order No.
2, series of 2004.

Both parties disagreed with the trial court’s valuation, prompting them to file their respective appeals with the Court of
Appeals. The appellate court, however, affirmed the judgment of the trial court. It also upheld the award of compounded interest, thus:

In the case at bar, the subject lands were taken under PD 27 and were covered by Operation Land Transfer, making the
aforecited Administrative Order applicable. Hence, the Petitioners SORIANOs are entitled to the 6% compounded interest per annum
from the date of taking on 21 October 1972 until full payment of the just compensation. 13 LBP moved for reconsideration but it was
denied by the Court of Appeals on 12 December 2007. LBP filed the instant petition seeking to nullify the appellate court’s decision
and resolution, particularly the amount awarded to respondents as just compensation.

Basic is the tenet that since respondents were deprived of their land, they are entitled to just compensation. Under Executive
Order No. 228, the formula used to compute the land value is:

Land value = Average Gross Production (AGP) x 2.5

x Government Support Price (GSP)

With the passage of Republic Act (R.A.) No. 6657 or the CARL in 1988, new guidelines were set for the determination of just
compensation. In particular, Section 17 provides, thus:

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.

Consequently, two divergent formulae arose which prompted the Court to come up with a categorical pronouncement that, if
just compensation is not settled prior to the passage of Republic Act No. 6657, it should be computed in accordance with the said law,
although the property was acquired under Presidential Decree No. 27. The fixing of just compensation should therefore be based on
the parameters set out in Republic Act No. 6657, with Presidential Decree No. 27 and Executive Order No. 228 having only
suppletory effect.14

In the instant case, while the subject lands were acquired under Presidential Decree No. 27, the complaint for just
compensation was only lodged before the court on 23 November 2000 or long after the passage of Republic Act No. 6657 in 1988.
Therefore, Section 17 of Republic Act No. 6657 should be the principal basis of the computation for just compensation. As a matter of
fact, the factors enumerated therein had already been translated into a basic formula by the DAR pursuant to its rule-making power
under Section 49 of Republic Act No. 6657. The formula outlined in DAR Administrative Order No. 5, series of 1998 should be
applied in computing just compensation, thus:

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 Declaration15

As much as this Court would like to determine the proper valuation based on the formula cited above, the records of this case
are bereft of adequate data. To write finis to this case, we uphold the amount derived from the old formula. However, since the
application of the new formula is a matter of law and thus, should be made applicable, the parties are not precluded from asking for
any additional amount as may be warranted by the new formula.

On to the more pertinent issue. LBP assails the imposition of 6% interest rate on the 18.0491 hectares of lot valued at
₱133,751.65. It avers that the incremental interest due to the respondents should be computed from the date of taking on 21 October
1972, not up to full payment of just compensation but up to the time LBP approved the payment of their just compensation claim and
a corresponding deposit of the compensation proceeds was made by the bank. LBP relies on the provisions of DAR Administrative
Order No. 13, series of 1994, as amended, which substantially provides that "the grant of 6% yearly interest compounded annually
shall be reckoned from 21 October 1972 up to the time of actual payment but not later than December 2006." LBP stresses that under
said Administrative Order, time of actual payment is defined as the date when LBP approves the payment of the land transfer claim
and deposits the compensation proceeds in the name of the landowner in cash and in bonds. In sum, LBP posits that the appellate court
departed from the express provision of DAR Administrative Order No. 13, as amended, by imposing an interest to be reckoned from
the time of taking up to the actual payment of just compensation.16

Respondents counter that the award of interest until full payment of just compensation was correctly adhered to by the lower
courts in line with the Court’s ruling in Land Bank of the Philippines v. Imperial, 17 which found it inequitable to determine just
compensation based solely on the formula provided by DAR Administrative Order No. 13, as amended. According to respondents, the
award of interest until full payment of just compensation is to ensure prompt payment. Moreover, respondents claim that the date LBP
approves the payment of the land transfer claim and deposits the proceeds in the name of the landowner is not tantamount to actual
payment because on said date, the release of the amount is conditioned on certain requirements. 18

This issue has already been raised before the Court of Appeals by LBP, first, in its petition for review and, second, in its
motion for reconsideration. The Court of Appeals, however, neglected to give a definitive ruling on the issue of computation of
interest and merely echoed the trial court’s ruling that respondents are entitled to the 6% compounded interest per annum from the
date of taking on 21 October 1972 until full payment of just compensation.1avvphi1 At any rate, we cannot subscribe to the arguments
of LBP.

Section 4, Article XIII of the 1987 Constitution, mandates that the redistribution of agricultural lands shall be subject to the
payment of just compensation. The deliberations of the 1986 Constitutional Commission on this subject reveal that just compensation
should not do violence to the Bill of Rights, but should also not make an insurmountable obstacle to a successful agrarian reform
program. Hence, the landowner's right to just compensation should be balanced with agrarian reform. 19

Administrative Order No. 13, as amended, was issued to compensate those who were effectively deprived of their lands by
expropriation. LBP relies on said Administrative Order to justify its own computation of interest. A literal reading of this
Administrative Order seems to favor LBP’s interpretation with respect to the period covered by the interest rate. We quote the relevant
portion of the Administrative Order:

The grant of six percent (6%) yearly interest compounded annually shall be reckoned as follows:
3.1 Tenanted as of 21 October 1972 and covered under OLT
- From 21 October 1972 up to the time of actual payment but not later than December 2006
3.2 Tenanted after 21 October 1972 and covered under OLT
-From the date when the land was actually tenanted (by virtue of Regional Order of Placement issued prior to August 18, 1987) up to
the time of actual payment but not later than December 2006

Time of actual payment – is the date when the Land Bank of the Philippines (LBP) approves payment of the land transfer claim and
deposits the compensation proceeds in the name of the landowner (LO) in cash and in bonds. The release of payment can be claimed
by the landowner upon compliance with the documentary requirements for release of payment.20

However, as embodied in its Prefatory Statement, the intent of the Administrative Order was precisely to address a situation
"where a number of landholdings remain unpaid in view of the non-acceptance by the landowners of the compensation due to low
valuation. Had the landowner been paid from the time of taking his land and the money deposited in a bank, the money would have
earned the same interest rate compounded annually as authorized under banking laws, rules and regulations."21 The concept of just
compensation embraces not only the correct determination of the amount to be paid to the owners of the land, but also payment within
a reasonable time from its taking. Without prompt payment, compensation cannot be considered "just" inasmuch as the property
owner is made to suffer the consequences of being immediately deprived of his land while being made to wait for a decade or more
before actually receiving the amount necessary to cope with his loss.22 To condition the payment upon LBP’s approval and its release
upon compliance with some documentary requirements would render nugatory the very essence of "prompt payment." Therefore, to
expedite the payment of just compensation, it is logical to conclude that the 6% interest rate be imposed from the time of taking up to
the time of full payment of just compensation.

Certainly, the trend of recent rulings bolsters this interpretation. In Forform Development Corporation v. Philippine National
Railways,23 the Philippine National Railways was directed to file the appropriate expropriation action over the land in question, so that
just compensation due to its owner may be determined in accordance with the Rules of Court, with interest at the legal rate of 6% per
annum from the time of taking until full payment is made. The Court in Manila International Airport Authority v. Rodriguez 24 ordered
just compensation for the portion of respondent’s lot actually occupied by the runway, with interest thereon at the legal rate of 6% per
annum from the time of taking until full payment is made.ten.lihpwal

LBP also proffers that just compensation pertaining to the 0.2329 hectare valued at ₱8,238.94 with no pronouncement as to
interest per the Department of Agrarian Reform Adjudication Board (DARAB) decision has already attained finality, hence, it cannot
be modified.25

Anent the DARAB decision relating to the 0.2329 hectare, suffice it to say that the determination of just compensation is a judicial
function.26 The DAR's land valuation is only preliminary and is not, by any means, final and conclusive upon the landowner or any
other interested party. In the exercise of their functions, the courts still have the final say on what the amount of just compensation will
be.27 Hence, we sustain the computation reached by the trial court.

WHEREFORE, the petition is DENIED. The Decision dated 9 October 2007 and the Resolution dated 12 December 2007 of the Court
of Appeals in CA-G.R. SP Nos. 89005 and 89288 are hereby AFFIRMED without prejudice to the right of the parties for additional
claims that may arise in the application of DAR Administrative Order No. 5, series of 1998 in relation to R.A. No. 6657.

SO ORDERED.