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Land Bank of the Philippines vs.

Palmares

Facts:
Plamares inherited an agrarian land in Brgy. Tagubang, Passi City, Ilo-ilo. In 1995 an area of
19.1071 hectares of the land was subjected to voluntary acquisition under R.A. 6657. The LBP initially
valued the land with the amount of Ph. 440,355.92, but it was rejected by Palmares. The DARAB
conducted a summary proceeding to determine the just compensation but it resolved to adopt the valuation
of the LBP. Thus an amount of Php. 440, 355. 92 was deposited. on August 17, 2001, Palmares filed for a
petition for judicial determination of just compensation, the RTC of Ilo-ilo ordered the LBP to recompute.
In its manifestation, the LBP yielded to an amount of Php. 503, 148. 97. Despite the increase Palmeras still
rejected the just Compensation. The RTC conducted its computation and rendered the amount of Php. 669,
962. 53. The LBP appealed to the CA alleging that the RTC failed to consider Section 17 of R.A. 6657. The
CA contended that the RTC is given ample discretion and should not be delimited by mathematics, the
appellate court decided in favor of the RTC and Palmares. The LBP filed for a motion for reconsideration
contending that there was a double take up in the computaion of the RTC. In computing the just
compensation, the formula should be in accordance with DAR AO NO. 6 Series of 1992, AO NO. 11 Series
of 1994 but the RTC based their computation on the market value of the land in the 1997 tax declaration.
On the other hand, the DAR filed a separate appeal with a different division of the CA. In that
appeal, the CA reversed the RTC's decision and remand the case with the assistance of three commisioners
but the LBP failed to attach a copy of the decision. The LBP then filed a motion for Reconsidertion, Urgent
Manifestation with motion to Consolidate the case (LBP vs. Palmares and DAR vs. Palmares). The motion
was denied by the CA.

Issue:
Whether the valuation of the RTC is valid.

Ruling:
No. the valuation of the RTC is not valid, Section 17 of RA 6657 mst be considered. The Supreme
Court also ruled that ther was a double take up. In the computation of the just compensation, the market
value should remain constant at 10%, it will only increase when comparable sals and capitalized net income
is absent. Greater weight is accorded on capitalized net income, it is heavily production-based. It is what
the landowner loses and the farmer-beneficiaries gain. The reason is the principle of Affordability. The
principle of Affordability implies that what the farmer-beneficiaries can reasonably afford to pay based on
what the land can produce. The valuation of the RTC is too excessive and if based on what the land can
produce, a disparity can be inferred. The farmer-beneficiaries generally live on hand-to-mouth existence,
their source of paying the just compensation is sourced from the income derived from the cultivation of the
land. The double take up commmitted by the RTC negates the principle of Affordability.

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