Apo Fruits Corporation v. Land Bank of the Philippines [G.R. No. 164195. April 5, 2011]

03 Sep


Petitioners voluntarily offered to sell their lands to the government under Republic Act 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL). Government took petitioners’ lands on December 9, 1996. Land Bank valued the properties atP165,484.47 per hectare, but AFC-HPI rejected the offer of that amount. Consequently, on instruction of the Department of Agrarian Reform (DAR), Land Bank deposited for AFC and HPI P26,409,549.86 and P45,481,706.76, respectively, or a total of P71,891,256.62. Upon revaluation of the expropriated properties, Land Bank eventually made additional deposits, placing the total amount paid at P411,769,168.32 (P71,891,256.62 + P339,877,911.70), an increase of nearly five times. Both petitioners withdrew the amounts. Still, they filed separate complaints for just compensation with the DAR Adjudication Board (DARAB), where it was dismissed, after three years, for lack of jurisdiction. Petitioners filed a case with the RTC for the proper determination of just compensation. The RTC ruled in favor of petitioners fixing the valuation of petitioners’ properties at P103.33/sq.m with 12% interest plus attorney’s fees. Respondents appealed to the Third Division of the Supreme Court where the RTC ruling was upheld. Upon motion for reconsideration, the Third Division deleted the award of interest and attorney’s fees and entry of judgment was issued. The just compensation of which was only settled on May 9, 2008. Petitioners filed a second motion for reconsideration with respect to denial of award of legal interest and attorney’s fees and a motion to refer the second motion to the Court En Banc and was granted accordingly, restoring in toto the ruling of the RTC. Respondent filed their second motion for reconsideration as well for holding of oral arguments with the Motion for Leave to Intervene and to admit for Reconsideration in-Intervention by the Office of the Solicitor General in behalf of the Republic of the Philippines.



Political Law (Constitutional Law)


(1)  Whether or not the “transcendental importance” does not apply to the present case.

(2)  Whether or not the standard of “transcendental importance” cannot justify the negation of the doctrine of immutability of a final judgment and the abrogation of a vested right in favor of the Government that respondent LBP represents.

(3)  Whether or not the Honorable Court ignored the deliberations of the 1986 Constitutional Commission showing that just compensation for expropriated agricultural property must be viewed in the context of social justice.

Civil Law:


Whether or not the second motion for reconsideration of respondent deleting interest and attorney’s fees amount to unjust enrichment in its favor.

Remedial Law


(1)  Whether or not the rules on second motion for reconsideration by the Supreme Court should be strictly complied with by a vote of two-thirds of its actual membership.

(2)  Whether or not the holding of oral arguments would still serve its purpose.

(3)  Whether or not the Motion for Leave to Intervene and to admit for Reconsideration in-Intervention from the Office of the Solicitor General may still be granted.



Political Law (Constitutional Law)

(1)  No. 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.

(2)  No. The doctrine “transcendental importance,” contrary to the assertion it is applicable only to legal standing questions, is justified in negating the doctrine of immutability of judgment. It will be a very myopic reading of the ruling as the context clearly shows that the phrase “transcendental importance” was used only to emphasize the overriding public interest involved in this case. The Supreme Court said in their resolution:

That the issues posed by this case are of transcendental importance is not hard to discern from these discussions. A constitutional limitation, guaranteed under no less than the all-important Bill of Rights, is at stake in this case: how can compensation in an eminent domain case be “just” when the payment for the compensation for property already taken has been unreasonably delayed? To claim, as the assailed Resolution does, that only private interest is involved in this case is to forget that an expropriation involves the government as a necessary actor. It forgets, too, that under eminent domain, the constitutional limits or standards apply to government who carries the burden of showing that these standards have been met. Thus, to simply dismiss the case as a private interest matter is an extremely shortsighted view that this Court should not leave uncorrected.

x x x x

More than the stability of our jurisprudence, the matter before us is of transcendental importance to the nation because of the subject matter involved – agrarian reform, a societal objective of that the government has unceasingly sought to achieve in the past half century.

From this perspective, the court demonstrated that the higher interests of justice are duly served.

(3)  Yes. In fact, while a proposal was made during the deliberations of the 1986 Constitutional Commission to give a lower market price per square meter for larger tracts of land, the Commission never intended to give agricultural landowners less than just compensation in the expropriation of property for agrarian reform purposes.

[N]othing is inherently contradictory in the public purpose of land reform and the right of landowners to receive just compensation for the expropriation by the State of their properties. That the petitioners are corporations that used to own large tracts of land should not be taken against them. As Mr. Justice Isagani Cruz eloquently put it:

[S]ocial justice – or any justice for that matter – is for the deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called upon to tilt the balance in favor of the poor, to whom the Constitution fittingly extends its sympathy and compassion. But never is it justified to prefer the poor simply because they are poor, or to reject the rich simply because they are rich, for justice must always be served, for poor and rich alike, according to the mandate of the law.

Civil Law


Yes. In the present case, it is undisputed that the government took the petitioners’ lands on December 9, 1996; the petitioners only received full payment of the just compensation due on May 9, 2008. This circumstance, by itself, already confirms the unconscionable delay in the payment of just compensation.

An added dimension is the impact of the delay. One impact – as pointed out above – is the loss of income the landowners suffered. Another impact that the LBP now glosses over is the income that the LBP earned from the sizeable sum it withheld for twelve long years. From this perspective, the unaccounted-for LBP income is unjust enrichment in its favor and an inequitable loss to the landowners. This situation was what the Court essentially addressed when it awarded the petitioners 12% interest.

Remedial Law


(1)  No. When the Court ruled on the petitioners’ motion for reconsideration by a vote of 12 Members (8 for the grant of the motion and 4 against), the Court ruled on the merits of the petitioners’ motion. This ruling complied in all respects with the Constitution requirement for the votes that should support a ruling of the Court. Admittedly, the Court did not make any express prior ruling accepting or disallowing the petitioners’ motion as required by Section 3, Rule 15 of the Internal Rules. The Court, however, did not thereby contravene its own rule on 2nd motions for reconsideration; since 12 Members of the Court opted to entertain the motion by voting for and against it, the Court simply did not register an express vote, but instead demonstrated its compliance with the rule through the participation by no less than 12 of its 15 Members. Viewed in this light, the Court cannot even be claimed to have suspended the effectiveness of its rule on 2nd motions for reconsideration; it simply complied with this rule in a form other than by express and separate voting.

(2)  No. The submissions of the parties, as well as the records of the case, have already provided this Court with enough arguments and particulars to rule on the issues involved. Oral arguments at this point would be superfluous and would serve no useful purpose.

(3)  No. The interest of the Republic, for whom the OSG speaks, has been amply protected through the direct action of petitioner LBP – the government instrumentality created by law to provide timely and adequate financial support in all phases involved in the execution of needed agrarian reform. The OSG had every opportunity to intervene through the long years that this case had been pending but it chose to show its hand only at this very late stage when its presence can only serve to delay the final disposition of this case. The arguments the OSG presents, furthermore, are issues that this Court has considered in the course of resolving this case. Thus, every reason exists to deny the intervention prayed for.



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