The Supreme Court ruled that the Comprehensive Agrarian Reform Law (CARL), and not older laws, should be used to determine the just compensation for land acquired under Presidential Decree No. 27 but with payments still pending when CARL took effect. This decision emphasizes the importance of equity and ensuring landowners receive fair market value for their properties, even if the initial acquisition occurred under earlier agrarian reform programs. By applying CARL, the Court seeks to provide a more just outcome, considering the significant delays in compensating landowners for land transferred to farmer-beneficiaries. This aims to balance the rights of landowners with the goals of agrarian reform.

From Cornfields to Courtrooms: How Agrarian Reform Evolved

This case involves a dispute over the just compensation for a 117.3854-hectare agricultural land in Mulanay, Quezon, owned by the Heirs of Asuncion Añonuevo Vda. de Santos. The land, primarily planted with corn, was placed under the Department of Agrarian Reform’s (DAR) Operation Land Transfer Program in 1972, pursuant to Presidential Decree No. 27. Subsequently, from 1988 to 1990, DAR subdivided and distributed the land to farmer-beneficiaries. However, the landowners disputed the valuation proposed by Land Bank of the Philippines, leading to a legal battle focused on which law should govern the land’s valuation – the older Presidential Decree No. 27 and Executive Order No. 228, or the more recent Comprehensive Agrarian Reform Law (CARL).

The central legal question was whether CARL, which took effect in 1988, could be applied retroactively to determine the just compensation for land acquired under Presidential Decree No. 27, which had been in effect since 1972. Land Bank argued that since the land was acquired under Presidential Decree No. 27, the valuation should be based on the formula prescribed by Executive Order No. 228, which was in line with the older decree. The landowners, however, sought a higher valuation, arguing that CARL should apply, as it provided for a more comprehensive assessment of fair market value.

In its decision, the Supreme Court emphasized the significance of equity and fairness in agrarian reform cases. It referenced several prior decisions, including Land Bank of the Philippines v. Natividad and Lubrica v. Land Bank of the Philippines, which established the principle that CARL should apply when just compensation remains unsettled by the time CARL takes effect. The court reasoned that applying the older laws, which often resulted in significantly lower valuations, would be inequitable given the long delays in payment.

The Court noted that the agrarian reform process is incomplete until just compensation has been paid to the landowner.

Until then, title remains with the landowner.

The Supreme Court stated that while Presidential Decree No. 27 initiated the land transfer program, the payment of just compensation is a critical step to finalize the expropriation. Considering the passage of Republic Act No. 6657, otherwise known as CARL, before the completion of this process, it only makes sense to compute the process using the said law. The older rules are now merely suppletory to it.

Section 17 of CARL specifies factors such as the cost of acquisition, current value of similar properties, nature, actual use, and income when determining just compensation. Section 18 of the same law states that the petitioner shall compensate the landowner based on factors that the landowner, DAR, and petitioner may agree upon, or what the court determines is the just compensation for the land. Moreover, the social and economic benefits contributed by farmers and farm workers shall also be considered when determining its value. Therefore, the court considers these factors when computing for just compensation.

In effect, this decision reinforces the principle that landowners are entitled to receive fair market value for their expropriated properties. This decision underscores the importance of completing agrarian reform with justice for all parties involved, aligning with the constitutional mandate of equitable distribution of wealth and resources. As such, Land Bank’s petition was bereft of merit.

FAQs

What was the key issue in this case?	The central issue was whether the Comprehensive Agrarian Reform Law (CARL) or earlier laws should govern the determination of just compensation for land acquired under Presidential Decree No. 27. The landowners disputed the valuation proposed by Land Bank of the Philippines.
What is Presidential Decree No. 27?	Presidential Decree No. 27, issued in 1972, aimed to emancipate tenant farmers by transferring ownership of the land they tilled, primarily for rice and corn lands. It provided a formula for valuing these lands for compensation purposes.
What is the Comprehensive Agrarian Reform Law (CARL)?	CARL, or Republic Act No. 6657, was enacted in 1988 to promote social justice by providing for a more equitable distribution and ownership of agricultural land. It includes a broader range of factors for determining just compensation compared to Presidential Decree No. 27.
What factors are considered under CARL when determining just compensation?	CARL considers factors such as the cost of land acquisition, the current value of similar properties, the nature and actual use of the land, and its income. Additionally, it looks at the sworn valuation by the owner and assessments made by government assessors.
Why did the Supreme Court apply CARL in this case?	The Supreme Court applied CARL because the just compensation for the land had not been fully settled when CARL took effect. The Court found that applying older laws would be inequitable given the long delays in payment and that CARL provided a fairer assessment of the land’s value.
What was Land Bank’s argument in this case?	Land Bank argued that since the land was acquired under Presidential Decree No. 27, the valuation should be based on the formula prescribed by Executive Order No. 228. It opposed the retroactive application of CARL to lands acquired before its effectivity.
What does this decision mean for landowners affected by agrarian reform?	This decision means that landowners are entitled to a fairer valuation of their land under CARL, especially if just compensation was not settled under earlier agrarian reform programs. It ensures they receive compensation that reflects current market values and other relevant factors.
What is the role of the Special Agrarian Court (SAC) in these cases?	The Special Agrarian Court (SAC) is responsible for hearing and resolving disputes related to agrarian reform, including the determination of just compensation. In this case, the SAC’s decision was affirmed by the Court of Appeals and ultimately by the Supreme Court.

This case clarifies the application of agrarian reform laws, providing guidance on determining just compensation when land acquisition predates the enactment of CARL. By prioritizing fairness and equity, the Supreme Court aims to balance the rights of landowners with the goals of agrarian reform, ensuring that landowners receive adequate compensation for their expropriated properties.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: LAND BANK OF THE PHILIPPINES vs. HEIRS OF ASUNCION AÑONUEVO VDA. DE SANTOS, G.R. No. 179862, September 03, 2009