G.R. No. 190520. May 30, 2016.*

 
LAND BANK OF THE PHILIPPINES, petitioner, vs.
SPOUSES ANTONIO and CARMEN AVANCEÑA,
respondents.

Expropriation Proceedings; Just Compensation; Petitioner

should pay interest for the delay in the payment of just
compensation. However, such payment of interest should be
computed up to the full payment of just compensation.—There was
delay in the payment of just compensation which entitles the
respondents-spouses to the payment of interest from the time the
property was transferred in the name of the government in
December 1991 up to the time peti-

_______________

*  THIRD DIVISION.

 
 
320

320 SUPREME COURT REPORTS ANNOTATED

Land Bank of the Philippines vs. Avanceña

tioner deposited the valuation in the account of the

respondents-spouses in July 1996. We agree with the CA that
petitioner should pay interest for the delay in the payment of just
compensation. However, such payment of interest should be
computed up to the full payment of just compensation.
Same; Same; When property is taken, full compensation of its
value must immediately be paid to achieve a fair exchange for the
property and the potential income lost.—The certificate of title to
respondents-spouses’ land was canceled and a new certificate was
issued in the government’s name in December 1991 without
giving the former just compensation for such taking. We have
allowed the grant of interest in expropriation cases where there is
delay in the payment of just compensation. We recognize that the
owner’s loss is not only his property but also its income-
generating potential. Thus, when property is taken, full
compensation of its value must immediately be paid to achieve a
fair exchange for the property and the potential income lost. The
rationale for imposing the interest is to compensate the
landowners for the income they would have made had they been
properly compensated for their properties at the time of the
taking.
Same; Same; 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.—The CA did
not err in imposing interest on the just compensation which will
be determined after the remand of the case to the SAC. The
interest should be computed from December 1991 up to the full
payment of just compensation and not only up to the time
petitioner deposited the valuation in 1996 as the CA ruled. 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.

 
 
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Land Bank of the Philippines vs. Avanceña

Same; Same; The just compensation due respondents-spouses

shall earn legal interest at the rate of twelve percent (12%) per
annum computed from the time of taking in December 1991 until
June 30, 2013. And from July 1, 2013 until full payment, the
interest will be at the new legal rate of six percent (6%) per annum,
in accordance with the revisions governing the rate of interest
established by Bangko Sentral ng Pilipinas-Monetary Board
(BSP-MB) Circular No. 799, Series of 2013.—The award of
interest is imposed in the nature of damages for delay in payment
which, in effect, makes the obligation on the part of the
government one of forbearance to ensure prompt payment of the
value of the land and limit the opportunity loss of the owner. The
just compensation due respondents-spouses shall earn legal
interest at the rate of 12% per annum computed from the time of
taking in December 1991 until June 30, 2013. And from July 1,
2013 until full payment, the interest will be at the new legal rate
of 6% per annum, in accordance with the revisions governing the
rate of interest established by Bangko Sentral ng Pilipinas-
Monetary Board Circular No. 799, Series of 2013. The amount
which petitioner had already paid respondents-spouses by virtue
of the RTC’s Order granting the issuance of the Writ of Execution
dated October 2, 2000 shall be deducted from the amount of the
just compensation which will be awarded after the remand of this
case.
Same; Same; Execution Pending Appeal; Assuming arguendo
that the amount paid by virtue of the execution pending appeal
would be more than the recomputed amount of the just
compensation, any excess amount should be returned to petitioner
as provided under Section 5, Rule 39 of the Rules of Court.—
Assuming arguendo that the amount paid by virtue of the
execution pending appeal would be more than the recomputed
amount of the just compensation, any excess amount should be
returned to petitioner as provided under Section 5, Rule 39 of the
Rules of Court, to wit: Section 5. Effect of reversal of executed
judgment.—Where the executed judgment is reversed totally or
partially, or annulled, on appeal or otherwise, the trial court may,
on motion, issue such orders of restitution or reparation of
damages as equity and justice may warrant under the
circumstances.

 
 
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322 SUPREME COURT REPORTS ANNOTATED

Land Bank of the Philippines vs. Avanceña

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
LBP Legal Services Group for LBP.
Sobrevinas, Hayudini, Navarro & San Juan for
respondents.

PERALTA, J.:
 
Before us is a petition for review on certiorari filed by
petitioner Land Bank of the Philippines seeking to annul
and set aside the Decision1 dated August 11, 2008 of the
Court of Appeals (CA) issued in C.A.-G.R. CV No. 00067
directing it to pay twelve percent (12%) interest per annum
for the delay in the payment of just compensation. Also
assailed is the CA’s Resolution2 dated December 1, 2009
denying reconsideration thereof.
Respondents-spouses Antonio and Carmen Avanceña
were the registered owners of a parcel of agricultural land
situated at Sanghan, Cabadbaran, Agusan del Norte
covered by Transfer Certificate of Title No. RT-2937
containing an area of 205.0074 hectares. In 1988,
respondents-spouses voluntarily offered to sell their land to
the government under the Comprehensive Agrarian
Reform Program (CARP), which consisted of 160.2532
hectares of the land. In 1991, petitioner Land Bank of the
Philippines initially valued the subject lot at P1,877,516.09
based on the guidelines prescribed in DAR

_______________

1  Penned by Associate Justice Jane Aurora C. Lantion, with Associate

Justices Edgardo A. Camello and Edgardo T. Lloren, concurring; Rollo, pp.
41-61.
2   Penned by Associate Justice Edgardo A. Camello, with Associate
Justices Edgardo T. Lloren and Leoncia R. Dimagiba, concurring; id., at
pp. 62-64.

 
 
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Land Bank of the Philippines vs. Avanceña

Administrative Order No. 17, Series of 1989. Upon

recomputation in 1994 and based on DAR AO No. 6, Series
of 1992, as amended, by DAR AO No. 11, Series of 1994,
the land was revalued at P3,337,672.78 but respondents
rejected the valuation. Petitioner deposited the difference
in the cash portion between the revalued amount and the
initial valuation of P1,877,516.09 in trust for the
respondents on July 24, 1996. The parties brought the
matter of valuation to the Department of Agrarian Reform
Adjudication Board (DARAB), Caraga Regional Office,
which affirmed petitioner’s second valuation.
Respondents-spouses filed with the Regional Trial
Court, acting as a Special Agrarian Court (SAC), a
complaint for determination of just compensation, docketed
as Civil Case No. 4507. They prayed for a valuation of no
less than P200,000.00 per hectare for the subject lot or in
the alternative, to appoint Commissioners to determine the
just compensation; and that they be allowed to withdraw
the valuation amount that petitioner had deposited for
them including the earned interest, pending the court’s
final valuation. Petitioner filed its Answer alleging that the
valuation was computed based on the factors enumerated
in Section 17 of Republic Act No. (R.A.) 6657, the
Comprehensive Agrarian Reform Law.
While the complaint was pending, petitioner made a
reevaluation of the property using the valuation prescribed
by DAR AO No. 5, Series of 1998 which yielded the amount
of P9,057,180.32.
On March 29, 2000, the SAC issued its Decision,3 the
dispositive portion of which reads:
 
WHEREFORE, premises considered, judgment is
hereby rendered directing the defendants Land Bank
of the Philippines (LBP) and the Department of
Agrarian Reform (DAR) to pay plaintiffs the
following:

_______________

3  Per Judge Galdino B. Jardin, Sr.; id., at pp. 240-254.

 
 

324

324 SUPREME COURT REPORTS ANNOTATED

Land Bank of the Philippines vs. Avanceña

1. The sum of Twenty Million Four Hundred

Seventy-Five Thousand, Seven Hundred Seventy-Five
Pesos (P20,475,775) for the 160.253 hectares [of] land
with its improvements with six (6%) percent legal
interest thereon, less the provisional deposits from
April 1991 until actually paid;
2 The sum of One Hundred Thousand Pesos
(P100,000), as Attorneys’ fees;
3. The sum of One Hundred Thousand Pesos
(P100,000), litigation expenses;
4. All other claims and counterclaims are
dismissed for lack of merit.
SO ORDERED.4
 
Petitioner’s motion for reconsideration was denied,
hence it appealed the decision with the CA. In the
meantime, respondents-spouses moved for the execution of
the RTC decision pending appeal5 which was granted in a
Resolution6 dated October 2, 2000; thus, the writ of
execution was issued and implemented.
On August 11, 2008, the CA issued the assailed decision,
the decretal portion of which reads:
 
WHEREFORE, in view of all the foregoing, the
instant appeal is hereby GRANTED and the assailed
March 29, 2006 decision of the Regional Trial Court
(RTC), 10th Judicial Region, Branch 5, Butuan City,
in Civil Case No. 4507, is hereby SET ASIDE.
Consequently, this case is remanded to the court a
 quo for the recomputation of just compensation. In
determining the valuation of the subject property, the
factors provided under Section 17 of R.A. 6657 shall
be considered in accord with the formula prescribed in
DAR Administrative Order No. 5, Series of 1998.
Moreover, the just compen-

_______________

4  Id., at pp. 253-254.

5  Id., at pp. 255-259.
6  Id., at pp. 260-262.

 
 

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Land Bank of the Philippines vs. Avanceña

sation due the [S]pouses Avanceña should bear

12% interest per annum from the time title to the
property was transferred in the name of the
government up to the time that LBP deposited the
amount of its valuation for the subject land under the
account of the appellees. The basis of the 12% interest
would be the just compensation that would be
determined by the court a quo after remand of the
instant case.
SO ORDERED.7
 
Petitioner filed a motion for partial reconsideration
arguing that the CA erred in awarding interest at the rate
of 12% p.a. reckoned from the time title to property was
transferred in the name of the government to the time
petitioner deposited the valuation in July 1996. It argued
that upon receipt of the DAR order of deposit, it
immediately deposited the cash portion of the initial
valuation of P1,877,516.09 on October 17, 1991, thus it
never incurred delay as the title to the subject lot was
transferred in the name of the government only in
December 1991.
On December 1, 2009, the CA issued its resolution
denying the motion for reconsideration. It found that
nowhere in the records showed that petitioner made a
deposit of P1,877,516.09 on October 17, 1991.
Dissatisfied, petitioner is now before us alleging that:
 
THE HONORABLE COURT OF APPEALS
COMMITTED A SERIOUS ERROR OF LAW IN
AWARDING INTEREST AT THE RATE OF 12%
 PER ANNUM FROM THE TIME TITLE TO THE
PROPERTY WAS TRANSFERRED IN THE NAME
OF THE GOVERNMENT IN 1991 UP TO THE TIME
LBP ALLEGEDLY DEPOSITED THE VALUATION
IN 1996.8

_______________

7  Id., at p. 61.
8  Id., at pp. 24-25.

 
 

326

326 SUPREME COURT REPORTS ANNOTATED

Land Bank of the Philippines vs. Avanceña

Petitioner claims that it deposited cash and bonds for

the initial valuation of P1,877,516.09 on October 17, 1991.
It attached in this petition a Certification9 dated October
22, 1991 which stated that the cash and bonds due the
respondents-spouses have been earmarked by petitioner for
respondents-spouses on October 17, 1991. It argues that
such deposit was the basis for the DAR to take possession
of the property and caused the issuance of the title in the
name of the government in December 1991, pursuant to
Section 16(e) of R.A. 6657, thus, it did not incur any delay
in depositing the amounts due the respondents-spouses
which can validly justify the payment of interest.
Petitioner cites the case of Apo Fruits Corporation, et al.
v. CA10 saying that we have categorically declared therein
that payment of interest for delay cannot be applied where
there is prompt and valid payment of just compensation as
initially determined, as subsequently determined after
revaluation, and even if the amount was later on increased
pursuant to the court’s judgment.
Petitioner further contends that despite the pendency of
the case with the CA, the RTC issued a Writ of Execution
dated March 9, 2000 directing petitioner to pay the RTC’s
valuation of P20,475,775.00 plus legal interest thereon at
the rate of 6% per annum from April 1991 until fully paid;
that since such valuation was, however, set aside by the CA
in its assailed decision, there is now a huge possibility that
the recomputed value will be much lower than
P20,475,775.00; that the advance payment it made
amounting to P23,416,772.55 may have exceeded the value
of the subject land so that there is a need for respondents-
spouses to return the difference between its valuation of
P9,057,182.30 and the advance payment.
We are not persuaded.
_______________

9  Id., at p. 184.
10  565 Phil. 418, 443; 541 SCRA 117, 141 (2007).

 
 
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Land Bank of the Philippines vs. Avanceña

The CA found that the title to respondents-spouses’ land

was canceled and a new title was issued in the name of the
Republic of the Philippines in December 1991, but there
was no showing that petitioner had made payments prior
to the taking of the land.
Thus, there was delay in the payment of just
compensation which entitles the respondents-spouses to
the payment of interest from the time the property was
transferred in the name of the government in December
1991 up to the time petitioner deposited the valuation in
the account of the respondents-spouses in July 1996. We
agree with the CA that petitioner should pay interest for
the delay in the payment of just compensation. However,
such payment of interest should be computed up to the full
payment of just compensation.
Petitioner argues that it had made a deposit on October
17, 1991, i.e., prior to the cancellation of the title of the
respondents-spouses, and submitted with us a Certification
dated October 22, 1991 issued by the petitioner’s Bonds
Servicing Department stating that it had earmarked the
sum of P1,877,516.09 in cash and in LBP bonds as
compensation for the parcel of lands covered by RT-2937 in
the name of respondents-spouses on October 17, 1991
pursuant to R.A. 6657 through voluntary offer. However,
such certification was not among those that the petitioner
offered as evidence during the trial.11 More importantly,
We had rejected the practice of earmarking funds and
opening trust accounts for purposes of effecting payment,
hence, the law12 requires payment of just

_______________

11  Rollo, pp. 263-264.

12  Section 16(e) of R.A. 6657 provides as follows:
Sec. 16. Procedure for Acquisition of Private Lands.—
x x x x
(e) Upon receipt by the landowner of the corresponding payment or, in
case of rejection or no response from the landowner, upon the deposit with
an accessible hank designated by the DAR of the compensation in cash
  
 

328

328 SUPREME COURT REPORTS ANNOTATED

Land Bank of the Philippines vs. Avanceña

compensation in cash or Land Bank of the Philippines

(LBP) bonds, not by trust account.13
The certificate of title to respondents-spouses’ land was
canceled and a new certificate was issued in the
government’s name in December 1991 without giving the
former just compensation for such taking. We have allowed
the grant of interest in expropriation cases where there is
delay in the payment of just compensation.14 We recognize
that the owner’s loss is not only his property but also its
income-generating potential.15 Thus, when property is
taken, full compensation of its value must immediately be
paid to achieve a fair exchange for the property and the
potential income lost.16 The rationale for imposing the
interest is to compensate the landowners for the income
they would have made had they been properly compensated
for their properties at the time of the taking.17
In Republic v. CA,18 we held:
or in LBP bonds in accordance with this Act, the DAR
shall take immediate possession of the land and shall
request the proper Register of Deeds to issue a Transfer
Certificate of Title (TCT) in the name of the Republic of the
Philippines. x x x.

_______________

13  Heirs of Francisco R. Tantoco, Sr. v. Court of Appeals, 523 Phil. 257,

278; 489 SCRA 590, 609-610 (2006), citing Sta. Rosa Realty Development
Corporation v. Court of Appeals, 419 Phil. 457, 475; 367 SCRA 175, 192
(2001); Land Bank of the Philippines v. Court of Appeals, 319 Phil. 246,
258; 249 SCRA 149, 160 (1995).
14   Land Bank of the Philippines v. Heirs of Jesus Alsua, G.R. No.
211351, February 4, 2015, 750 SCRA 121; Land Bank of the Philippines v.
Santiago, Jr., 696 Phil. 142, 162; 682 SCRA 264, 282 (2012).
15   Secretary of the Department of Public Works and Highways v.
Tecson, G.R. No. 179334, April 21, 2015, 756 SCRA 389.
16  Id.
17   Land Bank of the Philippines v. Obias, 684 Phil. 296, 304; 668
SCRA 265, 274 (2012).
18  433 Phil. 106; 383 SCRA 611 (2002).

 
 

329
 VOL. 791, MAY 30, 2016 329
Land Bank of the Philippines vs. Avanceña

The constitutional limitation of “just

compensation” is considered to be 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, fixed at the time of the actual taking by the
government. 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 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.
The Bulacan trial court, in its 1979 decision, was
correct in imposing interests on the zonal value of the
property to be computed from the time petitioner
instituted condemnation proceedings and “took” the
property in September 1969. This allowance of
interest on the amount found to be the value of the
property as of the time of the taking computed, being
an effective forbearance, at 12% per annum should
help eliminate the issue of the constant fluctuation
and inflation of the value of the currency over time.
Article 1250 of the Civil Code, providing that, in case
of extraordinary inflation or deflation, the value of the
currency at the time of the establishment of the
obligation shall be the basis for the payment when no
agreement to the contrary is stipulated, has strict
application only to contractual obligations. In other
words, a contractual agreement is needed for the
effects of extraordinary inflation to be taken into
account to alter the value of the currency.19
 
Thus, the CA did not err in imposing interest on the just
compensation which will be determined after the remand of

_______________

19  Id., at pp. 122-123; pp. 622-623.

 
 
 330

330 SUPREME COURT REPORTS ANNOTATED

Land Bank of the Philippines vs. Avanceña

the case to the SAC. The interest should be computed

from December 1991 up to the full payment of just
compensation and not only up to the time petitioner
deposited the valuation in 1996 as the CA ruled. 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.20 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.21
The award of interest is imposed in the nature of
damages for delay in payment which, in effect, makes the
obligation on the part of the government one of forbearance
to ensure prompt payment of the value of the land and
limit the opportunity loss of the owner.22 The just
compensation due respondents-spouses shall earn legal
interest at the rate of 12% per annum computed from the
time of taking in December 1991 until June 30, 2013.23 And
from July 1, 2013 until full payment, the interest will be at
the new legal rate of 6% per annum, in accordance with the
revisions governing the rate of interest established by
Bangko Sentral ng Pilipinas-Monetary

_______________

20   Land Bank of the Philippines v. Soriano, 634 Phil. 426, 435; 620
SCRA 347, 356 (2010).
21  Id.
22  Republic v. Soriano, G.R. No. 211666, February 25, 2015, 752 SCRA
71; Land Bank of the Philippines v. Rivera, G.R. No. 182431, February 27,
2013, 692 SCRA 148, 153, citing Land Bank of the Philippines v. Celada,
515 Phil. 467, 484; 479 SCRA 495, 512 (2006), citing Land Bank of the
Philippines v. Wycoco, 464 Phil. 83, 100; 419 SCRA 67, 80 (2004), further
citing Reyes v. National Housing Authority, 443 Phil. 603, 616; 395 SCRA
494, 506 (2003).
23  Land Bank of the Philippines v. Lajom, G.R. No. 184982, August 20,
2014, 733 SCRA 511, 524.

 
 
331
 VOL. 791, MAY 30, 2016 331
Land Bank of the Philippines vs. Avanceña

Board Circular No. 799,24 Series of 2013.25 The amount

which petitioner had already paid respondents-spouses by
virtue of the RTC’s Order granting the issuance of the Writ
of Execution dated October 2, 2000 shall be deducted from
the amount of the just compensation which will be awarded
after the remand of this case.
Petitioner’s reliance on our Third Division’s December
19, 2007 Resolution in the case of Apo Fruits Corporation v.
CA26 wherein we declared that the payment of interest for
the delay of payment cannot be applied where there is
prompt and valid payment of just compensation as initially
determined, even if the amount of just compensation was
later on increased pursuant to the Court’s judgment, is
misplaced. We found then that as Land Bank had deposited
pertinent amounts in favor of the landowners within
fourteen months after the latter filed their complaint for
determination of just compensation with the SAC, there
was no unreasonable delay in the payment of just
compensation which entitled the landowners to the
payment of 12% interest per annum on the unpaid just
compensation.
However, such resolution was subsequently reversed
and set aside in our En Banc Resolution dated October 12,
2010 where we granted the landowners’ motion for
reconsideration. We ordered the Land Bank to pay the
landowners an interest at the rate of 12% per annum on
the unpaid balance of the just compensation, computed
from the date the Government took the properties on
December 9, 1996, until the respondent Land Bank fully
paid the balance of the principal amount on May 9, 2008.
We ruled that notwithstanding that the Land Bank had
immediately paid the remaining unpaid balance of the just
compensation as finally determined by the court,

_______________

24   Entitled “Rate of Interest in the Absence of Stipulation” (June 21,

2013).
25   See Nacar v. Gallery Frames, G.R. No. 189871, August 13, 2013,
703 SCRA 439, 455.
26  Apo Fruits Corporation v. Court of Appeals, supra note 10.

 
 
332

332 SUPREME COURT REPORTS ANNOTATED

Land Bank of the Philippines vs. Avanceña
 however, 12 long years had passed before the
landowners were fully paid. Thus, the landowners were
entitled to legal interest from the time of the taking of the
property until the actual payment 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.27 The
imposition of such interest was to compensate the
landowners for the income they would have made had they
been properly compensated for their properties at the time
of the taking.28 Thus, we held:
 
Let it be remembered that shorn of its eminent
domain and social justice aspects, what the agrarian
land reform program involves is the purchase by the
government, through the 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. In determining the
just compensation for this exchange, however, the
measure to be borne in mind is not the taker’s gain
but the owner’s loss since what is involved is the
takeover of private property under the States coercive
power. As mentioned above, in the value-for-value
exchange in an eminent domain situation, the State
must ensure that the individual whose property is
taken is not shortchanged and must hence carry the
burden of showing that the just compensation
requirement of the Bill of Rights is satisfied.
The owner’s loss, of course, is not only his property
but also its income-generating potential. Thus, when
property is taken, full compensation of its value must
immediately be paid to achieve a fair exchange for the
property and the potential income lost. The just
compensation is made available to the property owner
so that he may derive income from this compensation,
in the same manner that he would have derived
income from his expropriated property. If full
compensation is not paid for property taken, then the
State must make up for the

_______________

27  Republic v. Court of Appeals, supra note 18.

28  Supra note 17.

 
 
333

VOL. 791, MAY 30, 2016 333

 Land Bank of the Philippines vs. Avanceña

shortfall in the earning potential immediately lost due to

the taking, and the absence of replacement property from
which income can be derived; interest on the unpaid
compensation becomes due as compliance with the
constitutional mandate on eminent domain and as a basic
measure of fairness.29
 
As in the Apo case, respondents-spouses voluntarily
offered to sell their land pursuant to the government’s land
reform program, however, the valuation made by the LBP
on the land was rejected by the former for being
undervalued. Respondents-spouses had to resort to the
filing of the case with the RTC, sitting as SAC, for the
determination of just compensation of their land. It has
already been 25 years but respondents-spouses have not
received the full amount of the just compensation due
them, and further delay can be expected with the remand
of the case to the SAC for the recomputation of the just
compensation. Thus, the long delay entitles them to the
payment of interest to compensate for the loss of income
due to the taking.30
Petitioner’s claim for reimbursement of the amount it
had already paid to respondents-spouses by virtue of the
writ of execution pending appeal then issued by the SAC is
not meritorious. The recomputed amount of just
compensation due the respondents-spouses shall only be
determined after the remand of the case to the SAC. It
would only be that time which would establish whether the
payment made to them was more than the just
compensation that they are entitled to.
There is also no basis for petitioner to claim that
respondents-spouses are merely entitled to provisionally
receive its valuation of P9,057,182.30 pending the final
determination of the just compensation. Notably, the CA’s
decision rejected petitioner’s valuation as well, thus:

_______________

29  Apo Fruits Corporation v. Land Bank of the Philippines, 647 Phil.

251, 273; 632 SCRA 727, 746-747 (2010).
30  Id.

 
 
334

334 SUPREME COURT REPORTS ANNOTATED

Land Bank of the Philippines vs. Avanceña
 It has been stated in a number of cases that in
computing the just compensation for expropriation
proceedings, it is the value of the land at the time of
the taking which should be taken into consideration.
This being so, then in determining the value of the
land for the payment of just compensation, the time of
taking should be the basis.
In the case at bar, the court a quo failed to consider
the value and the character of the land at the time it
was taken by the government in 1991. Instead, the
former assessed the market value of the idle portion
of the subject lot as a rice land. Yet, per LBP’s Field
Investigation Report (FIR) prepared in 1990, the
subject lot was not yet devoted to rice or corn at that
time, although its idle portion was classified as
suitable for said crops. Also, in computing the value of
the land, the court a quo considered the land’s
appreciation value from the time of taking in 1991 up
to the filing of the case in 1997 and of appellee’s
potential profit from the land’s suitability to rice and
corn, which We find to be contrary to the settled
criterion in determining just compensation. Hence
erroneous.
The foregoing pronouncements do not, however,
mean that We favor LBP’s valuation of P9,057,10.32
for the subject lot. The same is found to be non-
reflective of just compensation because the Tax
Declaration used by LBP in fixing the market value of
the land in its initial valuation for the year 1986, as
indicated in the FIR. Additionally, no evidence was
adduced to show that LBP used the correct tax
declaration (TD), which should be the 1991 TD, in
fixing the market value in its latest computation of
the land’s valuation.
Notably, LBP’s initial valuation of the land in 1991
was P1,877,516.09 and became P3,337,672.78 after
recomputation in 1994, pursuant to DAR AO No. 11,
Series of 1994. During the pendency of the case in
court, DAR AO No. 5, Series of 1998 was issued;
hence, LBP accordingly recomputed its valuation and
came up with the amount of P9,057,180.32 (the
amount of P8,955,269.16
 
 
335

VOL. 791, MAY 30, 2016 335

Land Bank of the Philippines vs. Avanceña

constitutes the value of the land while P101,913.14

was the value of the legal easement).
 Albeit LBP claims to have faithfully observed and
applied the prescribed formula in DAR AO No. 5,
Series of 1998, in its recomputation of the land’s
valuation, it adduced no evidence, like the official
computation sheets, to show that the latest valuation
of the land was indeed arrived at using the prescribed
formula and that the correct documents indicating the
factors enumerated in Section 17 of RA 6657 were
actually considered. Hence, We cannot accept LBP’s
latest valuation as well.
Consequently, We deem it proper to remand this
case to the court a quo for a recomputation of the just
compensation. x x x31
 
Therefore, until the SAC had finally determined the just
compensation due the respondents-spouses upon remand of
the case, it could not be said that the payment made by
virtue of the writ of execution pending appeal had exceeded
the value of the subject property.
Moreover, assuming arguendo that the amount paid by
virtue of the execution pending appeal would be more than
the recomputed amount of the just compensation, any
excess amount should be returned to petitioner as provided
under Section 5, Rule 39 of the Rules of Court, to wit:
 
Section 5. Effect of reversal of executed
judgment.—Where the executed judgment is reversed
totally or partially, or annulled, on appeal or
otherwise, the trial court may, on motion, issue such
orders of restitution or reparation of damages as
equity and justice may warrant under the
circumstances.
 
WHEREFORE, the dispositive portion of the Decision
dated August 11, 2008 of the Court of Appeals in C.A-G.R.
CV No. 00067 is hereby modified and shall now read as
follows:

_______________

31  Rollo, pp. 57-58.

 
 

336

336 SUPREME COURT REPORTS ANNOTATED

Land Bank of the Philippines vs. Avanceña

WHEREFORE, in view of all the foregoing, the

instant appeal is hereby GRANTED and the assailed
 March 29, 2006 decision of the Regional Trial Court
(RTC), 10th Judicial Region, Branch 5, Butuan City,
in Civil Case No. 4507, is hereby SET ASIDE.
Consequently, this case is remanded to the court a
quo for the recomputation of just compensation. The
interest on the recomputed just compensation should
be computed from December 1991 up to the payment
of the full amount of just compensation less whatever
amounts received by the respondents-spouses.
 
SO ORDERED.

Velasco, Jr. (Chairperson), Perez and Reyes, JJ.,

concur.
Jardeleza, J., On Leave.

Judgment modified.

Notes.—Taking of private property without just

compensation is a violation of a person’s property right.
(Republic vs. Ortigas and Company Limited Partnership,
717 SCRA 601 [2014])
Although the taking of properties for agrarian reform
purposes is a revolutionary kind of expropriation, it should
not be carried out at the undue expense of landowners who
are also entitled to protection under the Constitution and
agrarian reform laws. (Land Bank of the Philippines vs.
Lajom, 733 SCRA 511 [2014])
 
 
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