FACTS : The spouses Josefa Tayko Guingona and Mauro Tayko voluntarily offered 481.0932 hectares of agricultural land for coverage under the Comprehensive Agrarian Reform Program (CARP). After inspection, only 360.0932 hectares were placed under CARP. In 2003, LBP valued the property at ₱32.8 million, deposited the provisional compensation, and titles were transferred to the Republic. Dissatisfied with the valuation, the landowners sought the determination of just compensation before the DAR adjudication bodies, which fixed a higher valuation. On appeal, the RTC-SAC further increased the compensation to ₱143.77 million with legal interest, prompting LBP to elevate the case to the Court of Appeals.
The CA partly granted LBP's appeal, holding that just compensation must be based on the property's value at the time of taking, which occurred on December 18, 2003, when LBP deposited the provisional payment. Finding the records insufficient to determine the proper valuation of the sugar lands using the applicable 2003 production data, the CA remanded the case to the RTC-SAC for the reception of additional evidence and recomputation in accordance with DAR A.O. No. 5, Series of 1998 and Joint Memorandum Circular No. 15, Series of 1999. It affirmed the valuation of the corn lands and ordered the payment of legal interest on the unpaid balance of just compensation from the time of taking until full payment.
ISSUE : WON the CA is correct
HELD : The Supreme Court held that the valuation of the 60.0932-hectare corn land should be governed by Section 17 of R.A. No. 6657 and the valuation formula under DAR Administrative Order No. 5, Series of 1998, and not by the formula under P.D. No. 27, which the RARAD, DARAB, and CA erroneously applied. The Court emphasized that just compensation must be based on the property's value at the time of taking, which occurred on December 30, 2003, when the titles were transferred to the Republic. Since the records lacked sufficient evidence to determine the proper valuation using the applicable formula and the production data as of the time of taking, the Court remanded the case to the RTC-SAC for the reception of additional evidence and the recomputation of just compensation in accordance with R.A. No. 6657 and DAR A.O. No. 5, Series of 1998.
The Court further ruled that the landowners are entitled to legal interest on the unpaid balance of the just compensation because of the delay in payment. Interest shall be computed only on the difference between the final judicially determined compensation and the government's provisional deposit, at the rate of 12% per annum from December 30, 2003 until June 30, 2013, and 6% per annum from July 1, 2013 until the finality of the decision. Thereafter, the entire unpaid amount shall earn legal interest at 6% per annum until fully paid. Accordingly, the Court partially granted the petition, affirmed the CA's ruling with modifications, and remanded the case to the RTC-SAC for the proper determination of just compensation.
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