APO Fruits Corporation and Hijo Plantation, Inc.

vs Land Bank of the Philippines erroneously filed their complaints with the DARAB when they should
have directly filed these with the RTC acting as an agrarian court.

Facts: The Chico-Nazario Dissent

 On October 12, 1995, the petitioners voluntarily offered to sell these landholdings to o Issue of immutability of judgment, she pointed out that under
the government via Voluntary Offer to Sell applications filed with the DAR. extraordinary circumstances, this Court has recalled entries of judgment
 On October 16, 1996, both the AFC and HPI received separate notices of land on the ground of substantial justice.
acquisition and valuation of their properties from the DAR’s Provincial Agrarian o In the exercise of the State’s inherent power of eminent domain, for the
Reform Officer (PARO). P165,484.47 per hectare, AFC’s land was valued at payment to be just, the compensation must not only be the correct amount
P86,900,925.88, while HPI’s property was valued at P164,478,178.14. Both the to be paid; it must also be paid within a reasonable time from the time the
AFC and HPI rejected these valuations for being very low. land is taken from the owner. If not, the State must pay the landowner
 DAR requested the LBP to deposit P26,409,549.86 in AFC’s bank account and interest, by way of damages, from the time the property was taken until
P45,481,706.76 in HPI’s bank account which amounts the petitioners withdrew. The just compensation is fully paid. This interest, deemed a part of just
titles over AFC and HPI’s properties were thereafter cancelled, and new ones were compensation due, has been established by prevailing jurisprudence to be
issued on December 9, 1996 in the name of the Republic of the Philippines. 12% per annum.
 On February 14, 1997: AFC and HPI filed separate petitions for determination of o On these premises, Justice Nazario pointed out that the government
just compensation with the DAR Adjudication Board (DARAB). DARAB failed to deprived the petitioners of their property on December 9, 1996, and paid
act on these petitions for more than three years. AFC and HPI filed complaints for the balance of just compensation due them only on May 9, 2008. The
determination and payment of just compensation with the RTC of Tagum City. delay of almost 12 years earned the petitioners interest in the total amount
 On September 25, 2001, the RTC fixed the just compensation for the petitioners’ of P1,331,124,223.05
1,338.6047 hectares of land at P1,383,179,000.00, with interest on this amount at the
prevailing market interests rates, computed from the taking of properties on o The Court find the petitioners’ arguments meritorious and accordingly grant the
December 9, 1996 until fully paid minus the amounts the petitioners already present motion for reconsideration.
received under initial valuation.
 The RTC modified its ruling and fixed the interest at the rate of 12% per annum Petitioner’s Arguments: (see facts)
from the time the complaint was filed until finality of the decision. The third
division of this court affirmed the ruling of the RTC. Respondent’s Arguments: (see facts)
 On MR, the Third Division issued its Resolution it Feb 6, 2007 decision by deleting
ISSUE: Whether or not the petitioners are entitled to the interest on the just compensation?
the 12% interest due on the balance of the awarded just compensation. They justified
the deletion by the finding that the LBP did not delay the payment of just
compensation as it had deposited the pertinent amounts due to AFC and HPI within FALLO:
fourteen months after they filed their complaints for just compensation with the
WHEREFORE, premises considered, we GRANT the petitioners' motion for
RTC.
reconsideration.
 All parties moved for reconsideration of the modified ruling. The Court uniformly
denied all the motions in its April 30, 2008 resolution. Entry of Judgment followed
The Court En Banc's Resolution dated December 4, 2009, as well as the Third
on May 16, 2008.
Division's Resolutions dated April 30, 2008 and December 19, 2007, are hereby
 Notwithstanding the Entry of Judgment, AFC and HPI led the following motions on
REVERSED and SET ASIDE.
May 28, 2008: (1) Motion for Leave to File and Admit Second Motion for
Reconsideration; (2) Second Motion for Reconsideration, with respect to the denial
The respondent Land Bank of the Philippines is herebyORDERED to pay petitioners
of the award of legal interest and attorney's fees; and (3) Motion to Refer the Second
Apo Fruits Corporation and Hijo Plantation, Inc. interest at the rate of 12% per annum
Motion for Reconsideration to the Honorable Court En Banc. IC
on the unpaid balance of the just compensation, computed from the date the
 The Court by En Banc by a majority vote denied the petitioners’ second MR on two Government took the properties on December 9, 1996, until the respondent Land Bank
considerations: of the Philippines paid on May 9, 2008 the balance on the principal amount.
o The grant of second MR runs counter to the immutability of final
decisions. Moreover, the court saw no reason to recognize the case as an Unless the parties agree to a shorter payment period, payment shall be in monthly
exception to the immutability principle as the petitioners’ private claim for installments at the rate of P60,000,000.00 per month until the whole amount owing,
the payment of interest does not qualify as either a substantial or including interest on the outstanding balance, is fully paid.
transcendental matter or an issue of paramount interest.
o Petitioners’ caused the delay of the payment hence they are not entitled to Costs against the respondent Land Bank of the Philippines.
recover interest on the just compensation and attorney’s fees. They
 SO ORDERED. Section 9, Article III of the 1987 Constitution (which reads "No private property shall be taken
for public use without just compensation.") provides two essential limitations to the power of
eminent domain, namely, that (1) the purpose of taking must be for public use and (2) just
HELD: YES. The amounts LBP deposited before although withdrawn by the petitioners were compensation must be given to the owner of the private property.
nothing but partial payments that only amounted to 5% of the P1,383,179,000.00 actual
value of the expropriated properties. This could not be considered a fair exchange of values at "just" as the safeguard is there to ensure a balance — property is not to be taken for public use
the time of the taking. at the expense of private interests; the public, through the State, must balance the injury that
the taking of property causes through compensation for what is taken, value for value.
While the LBP immediately paid the remaining balance on the just compensation due to the
petitioners after this Court had fixed the value of the expropriated properties, it overlooks one
essential fact – from the time that the State took petitioners’ properties until the time that the Case Title: (2) APO Fruits Corporation and Hijo Plantation, Inc. vs Land Bank of the
petitioners were fully paid, almost 12 long years passed. This is the rationale for imposing the Philippines
12% interest – in order to compensate the petitioners for the income they would have made had
they been properly compensated for their properties at the time of the taking. G.R. Number & Date: 164195. April 5, 2011

The interest, however erroneous it may be, cannot be inequitable and unconscionable because it Facts:
resulted directly from the application of law and jurisprudence – standards that have taken into
account fairness and equity in setting the interest rates due for the use or forbearance of money. The LBP submits the following arguments in support of its 2nd motion for reconsideration:

Suffice it to say that public interest refers to what will benefit the public, not necessarily the a. the test of "transcendental importance" does not apply to the present case;
government and its agencies whose task it to contribute to the benefit of the public. Greater b. the standard of "transcendental importance" cannot justify the negation of the
public benefit will result if government agencies like the LBP are conscientious in undertaking doctrine of immutability of a final judgment and the abrogation of a vested right in
its tasks in order to avoid the situation facing it in this case. Greater public interest would be favor of the Government that respondent LBP represents;
served if it can contribute to the credibility of the government’s land reform program through c. the Honorable Court ignored the deliberations of the 1986 Constitutional
the conscientious handling of this program. Commission showing that just compensation for expropriated agricultural property
must be viewed in the context of social justice; and
Just compensation is defined as the full and fair equivalent of the property taken from its owner d. granting arguendo that the interest payment has factual and legal bases, only six
by the expropriator. It has been repeatedly stressed by this Court that the measure is not the (6%) percent interest per annum may be validly imposed. THIS WAS
taker’s gain but the owner’s loss. The word “just” is used to intensify the meaning of the word ADDRESSED IN THE FIRST DIGEST
“compensation” to convey the idea that the equivalent to be rendered for the property to be taken
shall be real, substantial, full, and ample. Issue: Whether or not LBP’s second motion for reconsideration must be granted?

The power of expropriation is by no means absolute (as indeed no power is absolute). The Fallo: WHEREFORE, premises considered, the respondent's second motion for reconsideration
limitation is found in the constitutional injunction that “private property shall not be taken for and the motion to set the case for oral arguments are hereby DENIED WITH ABSOLUTE
public use without just compensation” and in the abundant jurisprudence that has evolved from FINALITY. The motion for intervention led by the Office of the Solicitor General is, likewise,
the interpretation of this principle. Basically, the requirements for a proper exercise of the power denied. We reiterate, under pain of contempt if our directive is disregarded or disobeyed, that
are: no further pleadings shall be entertained. Let judgment be entered in due course.

(1) public use and Held: NO.

(2) just compensation.
On its face, the staggering difference between the LBP's initial valuation of the petitioners'
properties (totaling P251,379,104.02) and the RTC's valuation (totaling P1,383,179,000.00) —
Notes: a difference of P1,131,799,895.98 amounting to 81% of the total price — betrays the lack of
good faith on the part of the government in dealing with the landowners. The sheer enormity of
Eminent domain is the power of the State to take private property for public use. It is an the difference between the two amounts cannot but lead us to conclude that the LBP's error was
inherent power of State as it is a power necessary for the State's existence; it is a power the grievous and amounted to nothing less than gross negligence in the exercise of its duty — in
State cannot do without. As an inherent power, it does not need at all to be embodied in the this case, to properly ascertain the just compensation due to the petitioners.
Constitution; if it is mentioned at all, it is solely for purposes of limiting what is otherwise an
unlimited power. The limitation is found in the Bill of Rights — that part of the Constitution In the present case, it is undisputed that the government took the petitioners’ lands on December
whose provisions all aim at the protection of individuals against the excessive exercise of 9, 1996 and the petitioners only received the full payment of the just compensation due on May
governmental powers. 9, 2008. The properties taken were fully operational and earning at the time. Thus the
landowners lost not only their properties, but the fruits of these properties. The interest is not
only proper but the right form of indemnity for the damages suffered by the petitioners.

We reject the basic premise of the LBP's and Mr. Justice Abad's arguments for being awed. The
present case goes beyond the private interests involved; it involves a matter of public interest —
the proper application of a basic constitutionally-guaranteed right, namely, the right of a
landowner to receive just compensation when the government exercises the power of eminent
domain in its agrarian reform program.

Section 9, Article III of the 1987 Constitution expresses the constitutional rule on eminent
domain — "Private property shall not be taken for public use without just compensation." While
confirming the State's inherent power and right to take private property for public use, this
provision at the same time lays down the limitation in the exercise of this power. When it takes
property pursuant to its inherent right and power, the State has the corresponding obligation to
pay the owner just compensation for the property taken. For compensation to be considered
"just," it must not only be the full and fair equivalent of the property taken; it must also be paid
to the landowner without delay.