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This case involves a dispute over the compensation owed to Apo Fruits Corp. and Hijo Plantation Inc. for land acquired by the Department of Agrarian Reform under the Comprehensive Agrarian Reform Program. While the RTC ordered the DAR to pay over P1.38 billion as just compensation plus 12% interest, the Supreme Court reversed and only affirmed the just compensation, removing the interest payment. The Court found that interest is only owed if payment is unreasonably delayed, but here the DAR deposited significant amounts within 14 months so there was no such delay to warrant additional interest.
This case involves a dispute over the compensation owed to Apo Fruits Corp. and Hijo Plantation Inc. for land acquired by the Department of Agrarian Reform under the Comprehensive Agrarian Reform Program. While the RTC ordered the DAR to pay over P1.38 billion as just compensation plus 12% interest, the Supreme Court reversed and only affirmed the just compensation, removing the interest payment. The Court found that interest is only owed if payment is unreasonably delayed, but here the DAR deposited significant amounts within 14 months so there was no such delay to warrant additional interest.
This case involves a dispute over the compensation owed to Apo Fruits Corp. and Hijo Plantation Inc. for land acquired by the Department of Agrarian Reform under the Comprehensive Agrarian Reform Program. While the RTC ordered the DAR to pay over P1.38 billion as just compensation plus 12% interest, the Supreme Court reversed and only affirmed the just compensation, removing the interest payment. The Court found that interest is only owed if payment is unreasonably delayed, but here the DAR deposited significant amounts within 14 months so there was no such delay to warrant additional interest.
Court of Appeals December 4, 2009 | Bersamin | MR of the Decision of the SC Third Division
Facts: 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 Apo Fruits Corp. (AFC) and Hijo Plantation Inc. public use before compensation is deposited with the (HPI) were owners of 5 parcels of land (1338.60 court having jurisdiction over the case, the final has.) located in San Isidro, Tagum, Davao. On 12 compensation must include interests on its just October 1995, the two voluntarily offered to sell the value, to be computed from the time the property is properties to the DAR. taken up to the time when compensation is actually DAR offered P86.9M for AFC’s land and P164.40 for paid or deposited with the court. In fine, between the HPI’s land. AFC, HPI and DAR cannot agree on a taking of the property and the actual payment, legal price hence the Complaint for Determination of Just interests accrue in order to place the owner in a position Compensation was filed before the DAR Adjudication as good as (but not better than) the position he was in Board on 14 February 1997. before the taking occurred. The DARAB failed to render a decision on the valuation of the land for three years. But nevertheless, the government deposited P26M into In the American case of Warren vs. St. Paul & Pacific AFC’s account and P45M into HPI’s account as down Railroad Co., the US Supreme Court held that while the payment in 1996. The DAR also caused the titling of assessed value, if paid at the date taken for the the land in the name of the Republic of the assessment, might be just compensation, it certainly Philippines. Later, titles were given to farmers under would not be, if payment be delayed, as might happen in the CARP. many cases, and as did happen in this case, till several Due to DARAB’s failure to adjudicate, AFC and HPI years after that time. The difference is the same as filed a complaint for determination of just between as between a sale for cash in hand and sale on compensation before the RTC of Davao which time. rendered a decision in favor of AFC and HPI. The RTC ruled, based on the reports it gathered from It is explicit from the case of LBP vs. Wycoco that assessors, that the purchase price should be higher interest on the just compensation is imposed only in than what was offered by DAR; that the purchase case of delay in the payment thereof which must be price should be at P103.33/ sq. m; that DAR is to sufficiently established. Given the foregoing, we find that pay AFC and HPI a total of P1.38B. the imposition of interest on the award of just Upon MR, the RTC modified its earlier ruling and compensation is not justified and should therefore be added that the DAR should, in addition to the deleted. amount of just compensation, pay AFC and HPI interest at a rate of 12% per annum computed from It must be emphasized that "pertinent amounts were the time the complaint was filed until the finality of deposited in favor of AFC and HPI within fourteen the decision. months after the filing by the latter of the Complaint for DAR appealed to the CA, the CA reversed the RTC. determination of just compensation before the RTC". It is The case was then elevated to the SC Third Division likewise true that AFC and HPI already collected P149.6 where the Court reversed the CA ruling and affirmed and P262 million, respectively, representing just the RTC decision with a slight modification that the compensation for the subject properties. Clearly, there is order to pay interest at 12% per annum be deleted no unreasonable delay in the payment of just in its entirety. compensation which should warrant the award of 12% Hence this Motion for Reconsideration. interest per annum in AFC and HPI’s favor.
Issue/Held: WoN AFC and HPI were entitled to the
payment of interest in addition to the amount of just compensation that is due them. – NO.
Ratio:
The taking of property under the CARL is an exercise by
the State of the power of eminent domain. A basic limitation on the State’s power of eminent domain is the constitutional directive that private property shall not be taken for public use without just compensation.
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
SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS and DISTRICT ENGINEER CELESTINO R. CONTRERAS, Petitioners, vs. SPOUSES HERACLEO and RAMONA TECSON