G.R. No.
167748 November 8, 2005 Nazaria died in 1979, he performed all the duties of a tenant by cultivating the
HEIRS OF RAFAEL MAGPILY, Petitioner,
vs.
HERMINIGILDO1 DE JESUS and THE COURT OF APPEALS,
Respondents.
DECISION
YNARES-SANTIAGO, J.:
Assailed in this petition for review is the January 7, 2005 Decision2 of the
Court of Appeals in CA-G.R. SP No. 69601, setting aside the December 10,
2001 Judgment3 of the Regional Trial Court of Laguna, Branch 91, in Civil
Case No. SC-3874, which affirmed with modification the Decision4 of the
Municipal Trial Court of Santa Cruz, Laguna, ordering private respondent
Herminigildo de Jesus to vacate the land of the late Rafael Magpily. Likewise
questioned is the April 18, 2005 Resolution5 of the Court of Appeals which
denied petitioner’s motion for reconsideration.
The complaint6 for ejectment filed by Rafael Magpily reveals that he was the
owner of a 10,000 square meter land planted with fruit bearing trees and
tenanted by Nazaria Tope. Sometime in July 1978, upon the request of the
latter, Magpily allowed Nazaria’s nephew, herein private respondent to
construct a house of light materials on a portion of the land and to gratuitously
occupy the same. The agreement was embodied in a "Salaysay"7 duly signed
by the parties. Their relationship, however, turned sour when private
respondent interfered with the gathering of coconuts and other fruits in the lot.
Magpily requested private respondent to vacate the premises but the latter
refused, prompting him to file the instant ejectment suit.
In his answer,8 private respondent contended that he is a bonafide
agricultural tenant of Magpily for 15 years. He alleged that his grandparents,
succeeded by his aunt, Nazaria, were the former tenants of Magpily. When
land and sharing in its produce. Private respondent claimed that the instant
case should be dismissed for lack of jurisdiction over the subject matter
because it involves a tenancy dispute under the exclusive jurisdiction of the
Department of Agrarian Reform Adjudication Board (DARAB).
On May 4, 1999, the Municipal Trial Court (MTC) rendered decision in favor
of Magpily ordering private respondent to vacate the land and to pay
reasonable rental for the use of the premises, attorney’s fees and litigation
expenses. It held that the evidence presented by private respondent failed to
prove a tenancy relationship. The dispositive portion thereof, reads:
WHEREFORE, finding plaintiff[’s] cause of action to be sufficiently
establish[ed,] being supported by evidence on records, judgment is hereby
rendered in favor of the plaintiff and against the defendant, by ordering the
defendant and all persons claiming rights under him to vacate the property in
question and to remove his house from the aforesaid property, and ordering
the defendant to pay the plaintiff the following:
1. the sum of P300.00 as reasonable value of the use of the portion of the lot
occupied by defendant’s house from May 1994 until such time as defendant
shall have actually vacated the premises in question;
2. the sum of P5,000.00 as attorney’s fees and the sum of P1,000.00 as
litigation expenses; and,
3. to pay the costs of suit.
SO ORDERED.9
In the meantime, Magpily died on December 18, 1999.10
Private respondent appealed to the Regional Trial Court (RTC) which on
December 10, 2001, affirmed the challenged decision but deleted the
monetary obligations adjudged against private respondent for lack of basis.
The decretal portion thereof, states:
WHEREFORE, finding no cogent reason to disturb the findings of the First
Level Court, the assailed decision is hereby affirmed except the award for the
use of the land and attorney’s fees as well as litigation expenses.
SO ORDERED.11
Aggrieved, private respondent filed a petition with the Court of Appeals which
reversed the decision of the RTC holding that an implied landlord-agricultural
tenant relationship was established between Magpily and private respondent
when the former allowed the latter to cultivate, harvest and share in the
produce of his land after the death of the former tenant. It thus declared that
the case involves an agrarian dispute, hence, the RTC has no jurisdiction
over the subject matter.12
Petitioner heirs of Magpily filed a motion for reconsideration but was denied.
Hence, the instant petition.
The issue to be resolved is whether there existed an agricultural tenancy
relationship between Magpily and private respondent that would divest
regular courts of jurisdiction over the subject matter. NO
The Court rules in the negative.
In Sumawang v. De Guzman,13 we held that the jurisdiction of the court over
the subject matter is determined by the material allegations of the complaint
and the law, irrespective of whether or not the plaintiff is entitled to recover all
or some of the claims or reliefs sought therein. Jurisdiction over the nature of
the action cannot be made to depend upon the defenses set up in the court or
upon a motion to dismiss for, otherwise, the question of jurisdiction would
depend almost entirely on the defendant. Once jurisdiction is vested, the
same is retained up to the end of the litigation. The MTC does not lose its
jurisdiction over an ejectment case by the simple expedient of a party raising
as a defense therein the alleged existence of a tenancy relationship between
the parties. But it is the duty of the court to receive evidence to determine the
allegations of tenancy. If after hearing, tenancy had, in fact been shown to be
the real issue, the court should dismiss the case for lack of jurisdiction.
Section 1, Rule II of the 2003 Revised Rules of Procedure of the DARAB,
provides:
SECTION 1. Primary and Exclusive Original Jurisdiction. – The Adjudicator
shall have primary and exclusive original jurisdiction to determine and
adjudicate the following cases:
1.1 The rights and obligations of persons, whether natural or juridical,
engaged in the management, cultivation, and use of all agricultural lands
covered by Republic Act (RA) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), and other related agrarian
laws;
....
1.4 Those cases involving the ejectment and dispossession of tenants and/or
leaseholders;
....
1.13 Such other agrarian cases, disputes, matters or concerns referred to it
by the Secretary of the DAR. (Emphasis added)
An agrarian dispute is defined under Section 3(d) of Republic Act No. 6657
(CARP Law) as follows:
(d) Agrarian Dispute refers to any controversy relating to tenurial
arrangements, whether leasehold, tenancy, stewardship or otherwise, over
lands devoted to agriculture, including disputes concerning farmworkers’
associations or representation of persons in negotiating, fixing, maintaining,
changing or seeking to arrange terms or conditions of such tenurial
arrangements.
It includes any controversy relating to compensation of lands acquired under
this Act and other terms and conditions of transfer of ownership from
landowners to farmworkers, tenants and other agrarian reform beneficiaries,
whether the disputants stand in the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor and lessee.
For DARAB to have jurisdiction over a case, there must exist a tenancy
relationship between the parties. A tenancy relationship cannot be presumed.
There must be evidence to prove the tenancy relations such that all its
indispensable elements must be established, to wit: (1) the parties are the
landowner and the tenant; (2) the subject is agricultural land; (3) there is
consent by the landowner; (4) the purpose is agricultural production; (5) there
is personal cultivation; and (6) there is sharing of the harvests. All these
requisites are necessary to create tenancy relationship, and the absence of
one or more requisites will not make the alleged tenant a de facto tenant.14
In ruling that there arose an implied agricultural tenancy relationship between
private respondent and Magpily, the Court of Appeals erroneously relied on
the following evidence,15 to wit:
(1) Sworn statement of Gregorio Ambrosio,16 a tenant of the lot fronting
Magpily’s land;
(2) Sworn statement of Nestor C. Marinay,17 the Barangay Agrarian Reform
Committee (BARC) Chairman of Barangay Labuin, Sta. Cruz, Laguna;
(3) Receipts;18
(4) The July 9, 1989 letter of Magpily to private respondent directing the latter
to allow the bearer to cut down trees in the land;19 and
(5) Order of the Municipal Agrarian Reform Officer (MARO) fixing the
leasehold rental.20
Tenants are defined as persons who – in themselves and with the aid
available from within their immediate farm households – cultivate the land
belonging to or possessed by another, with the latter’s consent; for purposes
of production, sharing the produce with the landholder under the share
tenancy system, or paying to the landholder a price certain or ascertainable in
produce or money or both under the leasehold tenancy system.21
In the present case, the sworn statements of Gregorio Ambrosio and Nestor
C. Marinay merely attested to the fact that private respondent became a
worker in the coconut plantation of Magpily after the death of the former
tenant of the land. Nowhere in the said statements was it mentioned why and
how private respondent became an agricultural tenant. Nothing was said
about the intent of Magpily to institute private respondent as his tenant nor of
the landowner’s purpose to embark on agricultural production. Neither did
said declarations attest to the existence of a sharing agreement between the
parties. Indeed, said statements only tended to prove that private respondent
is a worker or an overseer of the land and nothing more. The same is true to
Magpily’s letter directing private respondent to allow the bearer of the letter to
cut down trees in his land. It does not prove that private respondent is an
agricultural tenant, but only a caretaker of the land. In VHJ Construction and
Development Corporation v. Court of Appeals,22 it was held that the fact
alone of working on another’s landholding does not raise a presumption of the
existence of agricultural tenancy. There must be substantial evidence on
record adequate enough to prove the element of sharing.
In the same vein, the receipts presented by private respondent does not
prove sharing in the agricultural production. Some receipts show that private
respondent sold coconuts to several persons. The others do not reflect if the
coconuts sold were that of Magpily’s, or if the unlabeled computations
reflected therein truly pertain to the sale of the agricultural products of the
land owner. Moreover, even assuming that Magpily during his lifetime
benefited from the produce of the land, this fact alone is not enough to
establish tenancy. In Rivera v. Santiago,23 we stressed that it is not unusual
for a landowner to receive the produce of the land from a caretaker who sows
thereon. The fact of receipt, without an agreed system of sharing, does not
ipso facto create a tenancy.
Likewise, the order issued by the MARO fixing the lease rental of private
respondent does not prove a tenancy status. As noted by the MTC, the order
submitted to the court was not authenticated by the DAR. Moreover, the
settled rule is that certifications issued by municipal agrarian reform officers
are not binding on the courts. In a given locality, the certifications or findings
of the secretary of agrarian reform (or of an authorized representative)
concerning the presence or the absence of a tenancy relationship between
the contending parties are merely preliminary or provisional; hence, such
certifications do not bind the judiciary.24
Furthermore, the questioned order appears to have been issued ex parte and
without prior investigation as it does not bear the conformity of the landowner
and the approval of the PARO as required by Administrative Order No. 4,
Series of 1989, or the rules and procedures governing agricultural leasehold
and the determination of lease rental for tenanted
lands.25 Hence, it cannot support a finding of tenancy relationship.
In sum, private respondent failed to discharge the burden of proving that he
was an agricultural tenant26 of Magpily and that the instant case involves an
agrarian dispute cognizable by the DARAB. The MTC thus lawfully took
cognizance of the present controversy which involves the gratuitous
occupation of another’s property which became unlawful by virtue of the
owner’s withdrawal of consent or tolerance to such occupation.
The rule is that possession by tolerance is lawful, but such possession
becomes unlawful when the possessor by tolerance refuses to vacate upon
demand made by the owner. A person who occupies the land of another at
the latter’s tolerance or permission, without any contract between them, is
necessarily bound by an implied promise to vacate upon demand, failing
which, a summary action for ejectment is the proper remedy.27
Considering that private respondent’s occupation of petitioner’s land is now
unlawful in view of Magpily’s demand to vacate the premises, ejectment of
private respondent therefrom is warranted.
WHEREFORE, the petition is GRANTED. The January 7, 2005 Decision and
the April 18, 2005 Resolution of the Court of Appeals in CA-G.R. SP No.
69601, are REVERSED and SET ASIDE. The December 10, 2001 Decision
of the Regional Trial Court of Laguna, Branch 91, in Civil Case No. SC-3874
which ordered private respondent Herminigildo de Jesus to vacate the
property is REINSTATED.
No costs.
SO ORDERED.
G.R. No. 159145. April 29, 2005
DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD
(DARAB) of the DEPARTMENT OF AGRARIAN REFORM (DAR),
REPRESENTED by DAR SECRETARY ROBERTO M. PAGDANGANAN,
Petitioners,
vs.
JOSEFINA S. LUBRICA, in her capacity as Assignee of the rights and
interest of FEDERICO SUNTAY, Respondents.
DECISION
TINGA, J.:
Before this Court is an appeal by certiorari under Rule 45 of the 1997 Rules of
Civil Procedure, seeking the reversal of the Decision1 of the Court of Appeals
in CA-G.R. SP No. 66710 granting herein respondent’s petition for prohibition
and its Resolution2 denying herein petitioner’s motion for reconsideration.
This Court adopts the appellate court’s narration of facts.
On August 4, 2000, Federico Suntay, now deceased, filed a petition for fixing
and payment of just compensation under Presidential Decree No. 27 against
the Department of Agrarian Reform ("DAR"), the DAR Regional Director for
Region IV and the Land Bank of the Philippines ("Land Bank").3 Docketed as
DARAB Case No. V-0405-0001-00, the case was filed before the Office of the
Regional Agrarian Reform Adjudicator ("RARAD") and raffled to Adjudicator
Conchita Miñas. Subject of the case was Suntay’s landholdings covering a
total area of 948.1911 hectares situated in Sablayan, Occidental Mindoro and
embraced under Transfer Certificate of Title T-31. The DAR and Land Bank
determined its value at Four Million Two Hundred Fifty-One Thousand One
Hundred Forty-One Pesos and 68/100 (₱4,251,141.68) or Four Thousand
Four Hundred Ninety-Seven Pesos and 50/100 (₱4,497.50) per hectare,
which valuation according to Suntay, was unconscionably low and tantamount
to taking of property without due process of law.4
After summary administrative proceedings, the RARAD rendered a Decision5
on January 24, 2001 in favor of Suntay, ordering Land Bank to pay the former
the amount of One Hundred Fifty-Seven Million Five Hundred Forty-One
Thousand Nine Hundred Fifty-One Pesos & 30/100 (₱157,541,951.30) as just
compensation for the taking of a total of 948.1911 hectares of Suntay’s
properties. Land Bank sought reconsideration of the RARAD decision for not
being supported by clear and convincing evidence and for its conclusions
which are contrary to law. However, in an Order6 dated March 14, 2001, the
RARAD denied Land Bank’s motion. Land Bank received a copy of the order
of denial on March 26, 2001.7
On April 20, 2001, Land Bank filed a petition for just compensation8 with the
Regional Trial Court (RTC) of San Jose, Occidental Mindoro against Suntay,
DAR, and RARAD. The petition, docketed as Agrarian Case No. R-1241,
prayed that just compensation for the taking of Suntay’s landholdings be
declared in the amount of Four Million Two Hundred Fifty One Thousand,
One Hundred Forty-One Pesos (₱4,251,141.00). Suntay moved to dismiss
the petition on the grounds of lack of capacity to sue, lack of cause of action,
and res judicata. After Land Bank filed its comment on Suntay’s motion to
dismiss, the RTC, sitting as a special agrarian court, dismissed on August 6,
2001 Land Bank’s petition for failure to pay the docket fees within the
reglementary period.9 The special agrarian court also denied Land Bank’s
Motion for Reconsideration for being pro-forma.10 Thereafter, Land Bank
appealed the order of dismissal to the Court of Appeals by filing a Notice of
Appeal with the special agrarian court.11
While the petition for just compensation was pending with the special agrarian
court, upon motion of Suntay, the RARAD issued an Order12 on May 22,
2001, declaring its January 24, 2001 Decision as final and executory after
noting that Land Bank’s petition for just compensation with the special
agrarian court was filed beyond the fifteen-day reglementary period in
violation of Section 11, Rule XIII of the DARAB Rules of Procedure.13 In its
July 10, 2001 Order,14 the RARAD denied LBP’s motion for reconsideration
of the order of finality. On July 18, 2001, the RARAD issued a Writ of
Execution,15 directing the Regional Sheriff of DARAB-Region IV to implement
its January 24, 2001 Decision.
Thus, Land Bank filed a Petition for Certiorari with Prayer for the Issuance of
Temporary Restraining Order/Preliminary Injunction16 before the DARAB on
September 12, 2001 against Suntay and RARAD. The petition, docketed as
DSCA No. 0252, prayed for the nullification of the following issuances of the
RARAD: [1] the January 24, 2001 Decision directing Land Bank to pay Suntay
just compensation in the amount of ₱157,541,951.30; [2] the Order dated
May 22, 2001 declaring the finality of the aforesaid Decision; [3] the July 10,
2001 Order denying Land Bank’s motion for reconsideration; and [4] the Writ
of Execution dated July 18, 2001. On September 12, 2001, the DARAB
issued an Order17 enjoining the RARAD from momentarily implementing its
January 24, 2001 Decision and directing the parties to attend the hearing for
the purpose of determining the propriety of issuing a preliminary/permanent
injunction.
On September 20, 2001, Josefina Lubrica, the successor-in-interest of
Suntay, filed with the Court of Appeals a Petition for Prohibition,18 docketed
as CA-G.R. SP No. 66710. The petition, impleading DARAB and Land Bank
as respondents, sought to enjoin DARAB from further proceeding with DSCA
No. 0252, mainly on the theory that Republic Act (R.A.) No. 6657, which
confers adjudicatory functions upon the DAR, does not grant DAR jurisdiction
over special civil actions for certiorari. On the same day, the Court of Appeals
granted Lubrica’s prayer for a temporary restraining order.19 This
notwithstanding, DARAB issued a Writ of Preliminary Injunction20 on October
3, 2001, directing RARAD not to implement its January 24, 2001 Decision and
the other orders in relation thereto, including the Writ of Execution.
On October 8, 2001, DARAB filed a Comment21 in CA-G.R. SP No. 66710,
arguing that the writ of certiorari/injunction was issued under its power of
supervision over its subordinates/delegates like the PARADs and RARADs to
restrain the execution of a decision which had not yet attained finality. In an
omnibus motion filed on October 10, 2001, Lubrica sought to nullify the Writ of
Preliminary Injunction issued by DARAB in DSCA No. 0252 and to cite the
DARAB for contempt.22 Land Bank also filed its Comment23 on October 15,
2001, raising the prematurity of Lubrica’s petition for prohibition. It contended
that the issue of whether or not DARAB can take cognizance of Land Bank’s
petition for certiorari may be elevated to the Office of the DAR Secretary, in
accordance with the doctrine of exhaustion of administrative remedies. Land
Bank also questioned Lubrica’s personality to file the petition for prohibition
considering that she never intervened in the proceedings before the RARAD.
The Court of Appeals rendered the assailed Decision24 on August 22, 2002.
The appellate court ruled that petitioner DARAB had no personality to file a
comment on Lubrica’s petition for prohibition filed with the Court of Appeals
because DARAB was a mere formal party and could file a comment only
when specifically and expressly directed to do so. The appellate court also
ruled that DARAB’s exercise of jurisdiction over the petition for certiorari had
no constitutional or statutory basis. It rejected DARAB’s contention that the
issuance of the writ of certiorari arose from its power of direct and functional
supervision over the RARAD. In sum, the Court of Appeals declared that
DARAB was without jurisdiction to take cognizance of DSCA No. 0252 and
issued a Writ of Prohibition, perpetually enjoining DARAB from proceeding
with DSCA No. 0252 and ordering its dismissal.
Hence, the instant petition, in which DARAB assigns the following errors to
the Court of Appeals:
The Honorable Court of Appeals erred when it ruled:
1. THAT THE PETITIONER (DARAB), BEING A FORMAL PARTY, SHOULD
NOT HAVE FILED COMMENT TO THE PETITION AND INSTEAD, IT
SHOULD HAVE BEEN CO-RESPONDENT LAND BANK, THE FINANCIAL
INTERMEDIARY OF CARP;
2. THAT PETITIONER HAS NO JURISDICTION OVER DSCA 0252 WHICH
IS A PETITION FOR CERTIORARI; AND
3. THAT WRIT OF PRELIMINARY INJUNCTION ISSUED BY DARAB IN
DSCA 0252 WAS NULL AND VOID FOR HAVING BEEN ISSUED IN
VIOLATION OF THE TEMPORARY RESTRAINING ORDER IT ISSUED.25
WON DARAB has juris over pet. For certiorari. NO
This Court affirms the ruling of the Court of Appeals that the DARAB does not
have jurisdiction over Land Bank’s petition for certiorari.
Jurisdiction, or the legal power to hear and determine a cause or causes of
action, must exist as a matter of law.26 It is settled that the authority to issue
writs of certiorari, prohibition, and mandamus involves the exercise of original
jurisdiction which must be expressly conferred by the Constitution or by
law.27 It is never derived by implication. Indeed, while the power to issue the
writ of certiorari is in some instance conferred on all courts by constitutional or
statutory provisions, ordinarily, the particular courts which have such power
are expressly designated.28
Pursuant to Section 17 of Executive Order (E.O.) No. 229 and Section 13 of
E.O. No. 129-A, the DARAB was created to act as the quasi-judicial arm of
the DAR. With the passage of R.A. No. 6657, the adjudicatory powers and
functions of the DAR were further delineated when, under Section 50 thereof,
it was vested with the primary jurisdiction to determine and adjudicate
agrarian reform matters and exclusive original jurisdiction over all matters
involving the implementation of agrarian reform except those falling under the
exclusive jurisdiction of the Department of Agriculture, Department of
Environment and Natural Resources and the Special Agrarian Courts. The
same provision granted the DAR the power to summon witnesses, administer
oaths, take testimony, require submission of reports, compel the production of
books and documents and answers to interrogatories and issue subpoena
and subpoena duces tecum, and enforce its writs through sheriffs or other
duly deputized officers, and the broad power to adopt a uniform rule of
procedure to achieve a just, expeditious and inexpensive determination of
cases before it.29 Section 13 of E.O. No. 129-A also authorized the DAR to
delegate its adjudicatory powers and functions to its regional offices.
To this end, the DARAB adopted its Rules of Procedure, where it delegated to
the RARADs and PARADs the authority "to hear, determine and adjudicate all
agrarian cases and disputes, and incidents in connection therewith, arising
within their assigned territorial jurisdiction."30 In the absence of a specific
statutory grant of jurisdiction to issue the said extraordinary writ of certiorari,
the DARAB, as a quasi-judicial body with only limited jurisdiction, cannot
exercise jurisdiction over Land Bank’s petition for certiorari. Neither the quasi-
judicial authority of the DARAB nor its rule-making power justifies such self-
conferment of authority.
In general, the quantum of judicial or quasi-judicial powers which an
administrative agency may exercise is defined in the enabling act of such
agency. In other words, the extent to which an administrative entity may
exercise such powers depends largely, if not wholly, on the provisions of the
statute creating or empowering such agency.31 The grant of original
jurisdiction on a quasi-judicial agency is not implied. There is no question that
the legislative grant of adjudicatory powers upon the DAR, as in all other
quasi-judicial agencies, bodies and tribunals, is in the nature of a limited and
special jurisdiction, that is, the authority to hear and determine a class of
cases within the DAR’s competence and field of expertise. In conferring
adjudicatory powers and functions on the DAR, the legislature could not have
intended to create a regular court of justice out of the DARAB, equipped with
all the vast powers inherent in the exercise of its jurisdiction. The DARAB is
only a quasi-judicial body, whose limited jurisdiction does not include authority
over petitions for certiorari, in the absence of an express grant in R.A. No.
6657, E.O. No. 229 and E.O. No. 129-A.
In addition, Rule XIII, §11 of the DARAB Rules of Procedure allows a party
who does not agree with the RARAD’s preliminary valuation in land
compensation cases fifteen (15) days from receipt of notice to bring the
matter to the proper special agrarian court, thus:
SECTION 11. Land Valuation and Preliminary Determination and Payment of
Just Compensation. The decision of the Adjudicator on land valuation and
preliminary determination and payment of just compensation shall not be
appealable to the Board but shall be brought directly to the Regional Trial
Courts designated as Special Agrarian Courts within fifteen (15) days from
receipt of the notice thereof. Any party shall be entitled to only one motion for
reconsideration.
In Philippine Veterans Bank vs. Court of Appeals,32 this Court affirmed the
dismissal of a landowner’s petition for judicial determination of just
compensation for its failure to file the petition within the fifteen-day
reglementary period provided under Rule XIII, §11 of the DARAB Rules of
Procedure.
In the instant case, Land Bank received a copy of the RARAD order denying
its motion for reconsideration on March 26, 2001. Land Bank filed the petition
for just compensation with the special agrarian court only on April 20, 2001,
which is doubtlessly beyond the fifteen-day reglementary period. Thus, the
RARAD Decision had already attained finality in accordance with the afore-
quoted rule, notwithstanding Land Bank’s recourse to the special agrarian
court.
DARAB takes exception to the general rule that jurisdiction over special civil
actions must be expressly conferred by law before a court or tribunal can take
cognizance thereof. It believes that this principle is applicable only in cases
where the officials/entities contemplated to be subject thereof are not within
the administrative power/competence, or in any manner under the control or
supervision, of the issuing authority.
This Court is not persuaded. The function of a writ of certiorari is to keep an
inferior court within the bounds of its jurisdiction or to prevent it from
committing such a grave abuse of discretion amounting to excess of
jurisdiction.33 In the instant case, the RARAD issued the order of finality and
the writ of execution upon the belief that its decision had become final and
executory, as authorized under Section 1, Rule XII of the DARAB Rules of
Procedure. It is worth noting that in its petition, DARAB maintains that in
preventing the RARAD from implementing its decision, it merely "exercised its
residual power of supervision, to insure that the RARAD acted within the
bounds of delegated authority and/or prevent/avoid her from committing grave
and serious disservice to the Program."34 DARAB’s action, therefore, is a
rectification of what it perceived as an abuse of the RARAD’s jurisdiction. By
its own admission, DARAB took upon itself the power to correct errors of
jurisdiction which is ordinarily lodged with the regular courts by virtue of
express constitutional grant or legislative enactments.
This Court recognizes the supervisory authority of the DARAB over its
delegates, namely, the RARADs and PARADs, but the same should be
exercised within the context of administrative supervision and/or control. In
the event that the RARADs or PARADs act beyond its adjudicatory functions,
nothing prevents the aggrieved party from availing of the extraordinary
remedy of certiorari, which is ordinarily within the jurisdiction of the regular
courts.
That the statutes allowed the DARAB to adopt its own rules of procedure
does not permit it with unbridled discretion to grant itself jurisdiction ordinarily
conferred only by the Constitution or by law. Procedure, as distinguished from
jurisdiction, is the means by which the power or authority of a court to hear
and decide a class of cases is put into action. Rules of procedure are
remedial in nature and not substantive. They cover only rules on pleadings
and practice.35
While the Court of Appeals held that the DARAB should not have participated
in the proceedings before said court by filing a comment in CA-G.R. SP No.
66710, this Court considers satisfactory the explanation of the DARAB that it
has a peculiar interest in the final outcome of this case. As DARAB pointed
out, while it is only an adjunct of, it is at the same time not totally independent
from it. The DARAB is composed of the senior officials of the DAR, who are
guided by the State’s main policy in agrarian reform when resolving disputes
before the DARAB. The DARAB’s interest in the case is not purely legal but
also a matter of governance; thus, it cannot be strictly considered as a
nominal party which must refrain from taking an active part in the
proceedings.
WHEREFORE, the instant petition is DENIED. No costs.
SO ORDERED

. G.R. No. 159089 May 3, 2006
ISLANDERS CARP-FARMERS BENEFICIARIES MULTI-PURPOSE
COOPERATIVE, INC., Petitioner,
vs.
LAPANDAY AGRICULTURAL AND DEVELOPMENT CORPORATION,
Respondent.
DECISION
PANGANIBAN, CJ:
The Department of Agrarian Reform Adjudication Board (DARAB) has
jurisdiction to determine and adjudicate all agrarian disputes involving the
implementation of the Comprehensive Agrarian Reform Law (CARL).
Included in the definition of agrarian disputes are those arising from other
tenurial arrangements beyond the traditional landowner-tenant or lessor-
lessee relationship. Expressly, these arrangements are recognized by
Republic Act 6657 as essential parts of agrarian reform. Thus, the DARAB
has jurisdiction over disputes arising from the instant Joint Production
Agreement entered into by the present parties.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court,
seeking to reverse the June 30, 2003 Decision2 of the Court of Appeals (CA)
in CA-GR CV No. 65498. The assailed Decision disposed as follows:
"WHEREFORE, premises considered, the appealed decision dated October
18, 1999 dismissing the complaint filed by [petitioner] issued by the Regional
Trial Court of Tagum City, Branch 1, is hereby AFFIRMED."3
The Facts
The facts of the case are narrated by the CA in this wise:
"On March 8, 1993, a certain Ramon Cajegas entered into a Joint Production
Agreement for Islanders Carp-Farmer Beneficiaries Multi-Purpose
Cooperative, Inc. [petitioner] with Lapanday Agricultural and Development
Corporation [respondent].
"Almost three years after, on April 2, 1996, [petitioner], represented by its
alleged chairman, Manuel K. Asta, filed a complaint [with the RTC] for
Declaration of Nullity, Mandamus, Damages, with prayer for Preliminary
Injunction against [respondent], the alleged x x x officers [of petitioner] who
entered into the agreement, and the Provincial Agrarian Reform Office of
Davao (hereinafter PARO), represented by Saturnino D. Sibbaluca.
[Petitioner] subsequently filed an amended complaint with leave of court
alleging that the persons, who executed the contract were not authorized by
it.
"[Respondent] then filed a Motion to Dismiss on April 18, 1996 x x x, stating
that the Department of Agrarian Reform Adjudication Board (hereinafter
DARAB) has primary, exclusive, and original jurisdiction; that [petitioner]
failed to comply with the compulsory mediation and conciliation proceedings
at the barangay level; and for the unauthorized institution of the complaint in
behalf of [petitioner]. [Respondent] also averred that [petitioner] was engaged
in forum shopping because [it] also filed a petition before the Department of
Agrarian Reform praying for the disapproval of the Joint Production
Agreement. x x x PARO also filed a motion to dismiss on May 16, 1996.
"On August 21, 1996, [respondent] then filed a case at the DARAB for Breach
of Contract, Specific Performance, Injunction with Restraining Order,
Damages and Attorney’s Fees. On February 25, 1997, the DARAB decided
the case in favor of [respondent] declaring the Joint Production Agreement as
valid and binding and ordering [petitioner] to account for the proceeds of the
produce and to comply with the terms of the contract.
"The [RTC] then issued [its] decision on October 18, 1999. affirmed
"[Petitioner], before [the CA], rais[ed] the following errors on appeal:
‘I
‘THE [RTC] GRAVELY ERRED IN DISMISSING THE CASE AT BAR ON
THE GROUND OF LACK OF JURISDICTION.
‘II
‘THE [RTC] GRAVELY ERRED IN NOT DECLARING THE JOINT
PRODUCTION AGREEMENT AS NULL AND VOID AB INITIO’"4
Ruling of the Court of Appeals
Finding the relationship between the parties to be an agricultural leasehold,
the CA held that the issue fell squarely within the jurisdiction of the DARAB.
Hence, the appellate court ruled that the RTC had correctly dismissed the
Complaint filed by petitioner.
Moreover, being in the nature of an agricultural leasehold and not a shared
tenancy, the Joint Production Agreement entered into by the parties was
deemed valid by the CA. The agreement could not be considered contrary to
public policy, simply because one of the parties was a corporation.
Hence, this Petition.5
Issues
Petitioner raises the following issues for the Court’s consideration:
"I
"Whether or not x x x the x x x Court of Appeals gravely erred in affirming the
dismissal of the case at bench by RTC of Tagum City on the ground that it
has no jurisdiction over the subject matter and nature of the suit.
"II
"Whether or not x x x the x x x Court of Appeals gravely erred in finding that
the ‘Joint Production Agreement’ is valid instead of declaring it as null and
void ab initio, its provisions, terms and condition, cause and purposes being
violative of [t]he express mandatory provision of R.A. 6657.
"III
"Whether or not x x x the x x x Court of Appeals gravely erred in holding that
the ‘Joint Production Agreement’ is a leasehold contract and therefore valid.
"IV
"Whether or not x x x the x x x Court of Appeals gravely erred in interpreting
and applying the prevailing doctrines and jurisprudence delineating the
jurisdiction between the regular court and DARAB on the matter of agricultural
land and tenancy relationship."6
Simply put, the question to be resolved by the Court is this: which of the
various government agencies has jurisdiction over the controversy? DARAB
The Court’s Ruling
The Petition has no merit.1avvphil.net
Sole Issue:

Jurisdiction
Section 50 of Republic Act 66577 and Section 17 of Executive Order 2298
vests in the Department of Agrarian Reform (DAR) the primary and exclusive
jurisdiction, both original and appellate, to determine and adjudicate all
matters involving the implementation of agrarian reform.9 Through Executive
Order 129-A,10 the President of the Philippines created the DARAB and
authorized it to assume the powers and functions of the DAR pertaining to the
adjudication of agrarian reform cases.11
Moreover, Rule II of the Revised Rules of the DARAB provides as follows:
"Section 1. Primary and Exclusive Original and Appellate Jurisdiction. -- The
Board shall have primary and exclusive jurisdiction, both original and
appellate, to determine and adjudicate all agrarian disputes involving the
implementation of the Comprehensive Agrarian Reform Program (CARP)
under Republic Act No. 6657, Executive Order Nos. 228 and 129-A, Republic
Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No.
27 and other agrarian laws and their implementing rules and regulations.
Specifically, such jurisdiction shall include but not be limited to cases
involving the following:
a) The rights and obligations of persons, whether natural or juridical, engaged
in the management, cultivation and use of all agricultural lands covered by the
CARP and other agrarian laws[.]"12
The subject matter of the present controversy falls squarely within the
jurisdiction of the DARAB. In question are the rights and obligations of two
juridical persons engaged in the management, cultivation and use of
agricultural land acquired through the Comprehensive Agrarian Reform
Program (CARP) of the government.
Petitioner contends that, there being no tenancy or leasehold relationship
between the parties, this case does not constitute an agrarian dispute that
falls within the DARAB’s jurisdiction.13
We clarify. To prove tenancy or an agricultural leasehold agreement, it is
normally necessary to establish the following elements: 1) the parties are the
landowner and the tenant or agricultural lessee; 2) the subject matter of the
relationship is a piece of agricultural land; 3) there is consent between the
parties to the relationship; 4) the purpose of the relationship is to bring about
agricultural production; 5) there is personal cultivation on the part of the
tenant or agricultural lessee; and 6) the harvest is shared between the
landowner and the tenant or agricultural lessee.14
In the present case, the fifth element of personal cultivation is clearly absent .
Petitioner is thus correct in claiming that the relationship between the parties
is not one of tenancy or agricultural leasehold. Nevertheless, we believe that
the present controversy still falls within the sphere of agrarian disputes.
An agrarian dispute "refers to any controversy relating to tenurial
arrangements -- whether leasehold, tenancy, stewardship or otherwise -- over
lands devoted to agriculture. Such disputes include those concerning farm
workers’ associations or representations of persons in negotiating, fixing,
maintaining, changing or seeking to arrange terms or conditions of such
tenurial arrangements. Also included is any controversy relating to the terms
and conditions of transfer of ownership from landowners to farm workers,
tenants and other agrarian reform beneficiaries -- whether the disputants
stand in the proximate relation of farm operator and beneficiary, landowner
and tenant, or lessor and lessee."15
It is clear that the above definition is broad enough to include disputes arising
from any tenurial arrangement beyond that in the traditional landowner-tenant
or lessor-lessee relationship.
Tenurial Arrangements Recognized by Law
The assailed Joint Production Agreement16 is a type of joint economic
enterprise. Joint economic enterprises are partnerships or arrangements
entered into by Comprehensive Agrarian Reform Program (CARP) land
beneficiaries and investors to implement agribusiness enterprises in agrarian
reform areas.17
Recognizing that agrarian reform extends beyond the mere acquisition and
redistribution of land, the law acknowledges other modes of tenurial
arrangements to effect the implementation of CARP.18
In line with its power to issue rules and regulations to carry out the objectives
of Republic Act 6657,19 the DAR issued Administrative Order No. 2, Series of
1999, which issued "Rules and Regulations Governing Joint Economic
Enterprises in Agrarian Reform Areas." These rules and regulations were to
provide CARP beneficiaries with alternatives to sustain operations of
distributed farms and to increase their productivity.20
Section 10 of this administrative order states as follows:
"SEC. 10. Resolution of Disputes– As a rule, voluntary methods, such as
mediation or conciliation and arbitration, shall be preferred in resolving
disputes involving joint economic enterprises. The specific modes of resolving
disputes shall be stipulated in the contract, and should the parties fail to do
so, the procedure herein shall apply.
"The aggrieved party shall first request the other party to submit the matter to
mediation or conciliation by trained mediators or conciliators from DAR, non-
governmental organizations (NGOs), or the private sector chosen by them.
xxxxxxxxx
"Should the dispute remain unresolved, it may be brought to either of the
following for resolution depending on the principal cause of action:
‘(a) DAR Adjudication Board (DARAB) if it involves interpretation and
enforcement of an agribusiness agreement or an agrarian dispute as defined
in Sec. 3(d) of RA 6657[.]’"
The present controversy involves the interpretation and enforcement of the
terms of the Joint Production Agreement. Thus, the case clearly falls within
the jurisdiction of the DARAB. This Court in fact recognized the authority of
the DAR and the DARAB when it ruled thus:
"All controversies on the implementation of the Comprehensive Agrarian
Reform Program (CARP) fall under the jurisdiction of the Department of
Agrarian Reform (DAR), even though they raise questions that are also legal
or constitutional in nature. All doubts should be resolved in favor of the DAR,
since the law has granted it special and original authority to hear and
adjudicate agrarian matters."21
Validity of the Joint Production Agreement
As already discussed above, jurisdiction over the present controversy lies
with the DARAB. As the RTC had correctly dismissed the case on the ground
of lack of jurisdiction, it was superfluous for the trial court -- and the CA for
that matter -- to have ruled further on the issue of the validity of the
agreement.
The doctrine of primary jurisdiction precludes the courts from resolving a
controversy over which jurisdiction has initially been lodged with an
administrative body of special competence.22
Since the DARAB had already ruled in a separate case on the validity of the
Joint Venture Agreement,23 the proper remedy for petitioner was to question
the Board’s judgment through a timely appeal with the CA.24 Because of the
manifest lack of jurisdiction on the part of the RTC, we must defer any opinion
on the other issues raised by petitioner until an appropriate review of a similar
case reaches this Court.25
WHEREFORE, the Petition is DENIED. Costs against petitioner.
SO ORDERED.
G.R. No. 126332 November 16, 1999
LAND BANK OF THE PHILIPPINES, petitioner,
vs.
COURT OF APPEALS and MARCIA E. RAMOS, respondents.
BELLOSILLO, J.:
This petition for review on certiorari under Rule 45 of the Revised Rules of
Court seeks the reversal of the Decision 1 of the Court of Appeals in CA-G.R.
SP Nos. 38795 and 38885 dated 27 June 1996 which modified the decision 2
of RTC-Br. 23 of Cabanatuan City acting as a Special Agrarian Court in
Agrarian Case No. 90 (AF) dated 25 September 1995. The petition also prays
for the reversal of the Resolution 3 of the Court of Appeals dated 29 August
1996 denying petitioner's motion for reconsideration.
Private respondent Marcia E. Ramos inherited from her father two (2) parcels
of land in Barangay Macatbong, Cabanatuan City, some twelve (12)
kilometers away from the center of the city, covered by TCT Nos. T-8774 and
T-36576 containing 36.6125 and 32.1675 hectares, respectively. Both were
classified as ricelands in their tax declarations for 1985.
On 15 June 1988 RA 6657, otherwise known as the Comprehensive Agrarian
Reform Law (CARL) of 1988, 4 took effect. Section 19 thereof provides for an
additional five percent (5%) cash payment for landowners who would
voluntarily offer their lands for sale to the government for distribution to
farmer-beneficiaries. 5 On 3 April 1989, induced by the incentive, private
respondent and her husband wrote then Department of Agrarian Reform
(DAR) Secretary Philip Ella Juico offering for sale her lands covered by TCT
Nos. T-8774 and T-36576, which were her own paraphernal property. Private
respondent however manifested her intention to retain twenty-nine (29)
hectares for herself, her husband and their eight (8) children. Photocopies of
two (2) land titles, latest tax declarations, Listasaka and voluntary offer to sell
forms and other documents accompanied the letter. The Listasaka form and
letter of intent indicated a price of only P40,000.00 per hectare because
private respondent was allegedly in a tight financial bind with six (6) of her
eight (8) children taking long courses in college. She thought that a low
valuation for the lands would facilitate payment of just compensation to her by
the government.
On 24 July 1991, after a two (2)-year hiatus, DAR Regional Director Antonio
M. Nuesa sent a notice of acquisition to private respondent informing her that
the DAR had decided to acquire 21.1675 hectares of the 32.1675 hectares
covered by TCT No. T-36576. The land, classified as idle and abandoned,
was placed under the Voluntary Offer to Sell (VOS) program. On 28 August
1991 Nuesa sent private respondent another notice of acquisition where she
was informed that the DAR had decided to acquire under its Compulsory
Acquisition (CA) scheme 18.6125 hectares of the 36.6125 hectares covered
by TCT No. T-8774. The land was also classified as idle and abandoned.
Meanwhile, Lolita C. Cruz, Head of the Land Bank of the Philippines Land
Valuation and Landowners Compensation Office, wrote private respondent on
24 July 1991 requiring her to submit a Sworn Statement of Average
Production and Net Income. In compliance, Ramos sent an affidavit stating
inter alia the lowest average yield of eighty (80) cavans per hectare.
On 18 November 1991 Nuesa notified private respondent of the DAR
valuation of P395,591.44 or P9,944.48 per hectare covering 39.78 hectares,
subject to price adjustments to conform with the actual area covered as
determined by a final land survey. The valuation was based on the ocular
inspection report dated 13 May 1991 of which private respondent denied
having been notified.
On 23 December 1991 private respondent wrote Nuesa rejecting the
P9,944.48 per hectare valuation offer of the DAR as it was not the just
compensation she expected for her lands. Thus, the case was elevated to the
Department of Agrarian Reform Adjudication Board (DARAB) which ordered
two (2) ocular inspections of subject two (2) parcels of land. 6
On 2 January 1992 Nuesa sent a memorandum-letter to the Regional
Agrarian Reform Adjudicator instructing the latter to conduct summary
administrative proceedings for the final valuation of the lands of private
respondent. LBP Valuation Manager Cruz was also requested to open a trust
account in the name of private respondent for the cash portion of the value of
the property as determined by the DAR.
Private respondent was then required by the DARAB to file her memorandum
in order to counter the initial findings of the DAR. The LBP also submitted its
memorandum. Another ocular inspection was thereafter ordered and finally
conducted on 22 May 1992.
On 1 July 1992 the government through the Department of Environment and
Natural Resources (DENR) — Bureau of Lands, together with private
respondent and her husband, identified, surveyed and segregated subject
lands. On 24 August 1992 the complete survey returns on the lands were
submitted by the DENR through its Community Environment and Natural
Resources officer of Cabanatuan City Romeo Buenaventura.
On 12 October 1992 Nuesa ordered the Register of Deeds of Cabanatuan
City to transfer ownership of subject lands from private respondent to the
Republic of the Philippines. However, before the transfer of ownership could
be effected, the DARAB issued an order of revaluation dated 30 October
1992 based on its findings that five (5) to nine (9) hectares of subject lands
were actually being cultivated on a rotation basis and not idle as earlier
classified.
The foregoing, more particularly Nuesa's order to transfer ownership over
subject lands without waiting for their revaluation, prompted Ramos to file a
complaint for just compensation before the Regional Trial Court (RTC) of
Cabanatuan City, acting as a Special Agrarian Court (SAC), on 23 November
1992. The complaint was filed against Jesli Lapus, in his capacity as
President of LBP, Ernesto D. Garilao, in his capacity as Acting Secretary of
DAR, Lolita C. Cruz, in her capacity as Head of LBP Land Valuation and
Landowners Compensation Office, and Antonio M. Nuesa, in his capacity as
Regional Director of DAR.
LBP officials Lapus and Cruz filed a joint answer dated 8 February 1993
claiming that agrarian reform did not partake of an eminent domain
proceeding so that the doctrine of just compensation would not apply. They
prayed for the dismissal of the complaint because of private respondent's
failure to exhaust all administrative remedies available to her before filing the
case with the SAC.
DAR officials Garilao and Nuesa, for their part, filed a motion to dismiss the
complaint contending that the SAC was not the proper forum to hear and
decide the case because of private respondent's failure to exhaust
administrative remedies. On 13 April 1993 the SAC denied the motion to
dismiss.
At the pre-trial conference on 15 November 1993 the parties ruled out the
possibility of amicably settling the case. They however agreed —
(a) That the land in question as per ocular inspection on October 1, 1993 is
planted with rice and not idle which the defendant LBP admitted with the
qualification that a portion is still idle;
(b) That the government from time to time changes the valuation formula for
the purchase of privately-owned land subjected to CARP to the advantage of
the government which was likewise admitted by the defendant LBP;
(c) That the formula for the correct valuation of the property is that provided
for under Admin. Order No. 6, Series of 1992, of the DAR which was also
admitted by the defendant LBP; and
(d) That the DARAB thru the Provincial Adjudicator Jose Reyes issued an
Order dated October 30, 1992 which was admitted by both defendants.
On 29 November 1993 the case before the DARAB was dismissed "to pave
way for the disposition of the case in the regular court." 7
In the meantime, DAR Secretary Garilao issued Admin. Order No. 11, Series
of 1994, revising the rules and regulations covering the valuation of lands
voluntarily offered or compulsorily acquired as embodied in Admin. Order No.
6, Series of 1992.
On 25 September 1995 the SAC rendered its decision ordering the LBP and
the DAR to pay private respondent just compensation for her lands in the
amount of P2,146,396.90 or P53,956.67 per hectare with legal interest from 3
April 1989 — when the offer was made — until fully paid. The SAC also
declared private respondent entitled to the additional five percent (5%) cash
payment under Sec. 19 of RA 6657 8 by way of incentive for her voluntarily
offering subject lands for sale. 9
The SAC found the valuation of private respondent to be "cumbersomely
high" for the government and the farmer-beneficiaries considering that the
factors she adopted in arriving at said valuation were "not adequately
substantiated and therefore inconclusive." The valuation by the LBP and the
DAR, on the other hand, appeared to be unrealistically low and its bases were
"but assumptions of facts unsupported by credible evidence." Thus, the SAC
was left with no other recourse but to take the middle ground wherein the
needs of the parties would be reasonably accommodated, i.e., the price set
by private respondent when she first offered subject lands for voluntary
acquisition and the inflation rate recognized and provided for by the LBP and
the DAR. 10
Both parties, private respondent Marcia E. Ramos on one hand, and the DAR
through Secretary Garilao and DAR Regional Director for Region III Nuesa on
the other, filed their respective petitions for review with the Court of Appeals.
The LBP did not appeal but filed its comment on the petitions.
The DAR questioned the jurisdiction of the SAC contending that the latter
could not take cognizance of the case pending its resolution before the
DARAB as the preliminary determination of just compensation by the DARAB
was a condition sine qua non before the filing of the case of this nature with
the SAC. 11
Private respondent, on her part, questioned the valuation given by the SAC
for being contrary to the principle of just compensation provided by the law.
She insisted that her property must be valued at P150,000.00 per hectare and
that even assuming that her evidence could not substantiate it, the formula
agreed upon by the parties during the pre-trial conference wherein they
stipulated that LAND VALUE = (CAPITALIZED NET INCOME x .9) +
(MARKET VALUE x .1) 12 should have been used by the trial court. Private
respondent further demanded that she be paid a total of P350,000.00 for the
two (2) irrigation canals situated within the areas to be expropriated.
The LBP through Lapus and Cruz submitted its comment on the petitions.
The LBP did not contradict the position of the DAR that private respondent
should have waited for the termination of the land valuation case with the
DARAB before seeking relief from the courts. 13 The LBP, however,
contended that the compensation as determined by the SAC must be upheld
as it was not only in accordance with Sec. 17 of RA 6657 14 and applicable
DAR administrative orders on land valuation but it was likewise just and fair to
private respondent, the government and the farmer-beneficiaries of the lands.

On 27 June 1996 the Court of Appeals granted the petition of private
respondent but denied that of the DAR. The appellate court acknowledged
the primary jurisdiction of the DARAB in the determination of just
compensation but ruled that such jurisdiction was not exclusive as the courts
of justice, particularly the RTCs acting as Special Agrarian Courts, could also
acquire jurisdiction as provided under Sec. 57 of RA 6657. 15 It further
declared that noncompliance with the rule on exhaustion of administrative
remedies did not affect the court's jurisdiction but only deprived private
respondent of a cause of action. Nevertheless, it noted that the doctrine
recognized certain exceptions which could be applied to the instant case, i.e.,
that ownership over private respondent's property was already transferred in
the name of the Republic of the Philippines prior to the final determination of
just compensation by the DARAB.
The appellate court agreed with the findings of the SAC that the evidence of
Ramos in support of her contention that she must be awarded at least
P150,000.00 per hectare as just compensation for her lands fell short of the
substantial evidence requirement in administrative cases. It however ruled
that the SAC should have used the valuation formula agreed upon by the
parties at the pre-trial as "it was sound, the choice of the parties, mutually
acceptable and culled from the order of DAR." Thus, the total valuation was
set at P5,227,171.10 with legal interest plus a five percent (5%) cash
incentive. In addition, the appellate court ordered the payment of P350,000.00
for the two (2) irrigation canals within subject property.
On 19 July 1996 the LBP filed a motion for reconsideration which was denied
by the Court of Appeals on 29 August 1996. Hence, this petition.
Petitioner submits that the Court of Appeals erred in: (a) ruling that private
respondent could proceed with the filing of the just compensation case before
the SAC without awaiting the termination of the land valuation proceedings
with the DARAB; (b) increasing the total amount awarded by the SAC to
private respondent for her 39.78 hectare-property from P2,146,396.60 or at
P53,956.67 per hectare to P5,227,171.10 or at P131,401.99 per hectare; and,
(c) including within the coverage of RA 6657 the two (2) irrigation canals of
private respondent and pegging the compensation therefor at P350,000.00.
Petitioner contends that the appellate court erred in affirming the jurisdiction
of the SAC pursuant to Sec. 57 of RA 6657 16 and as an exception to the
doctrine of exhaustion of administrative remedies.
WON direct resort to RTC (SAC) is correct. YES
We do not agree. It is clear from Sec. 57 that the RTC, sitting as a Special
Agrarian Court, has "original and exclusive jurisdiction over all petitions for the
determination of just compensation to landowners." This "original and
exclusive" jurisdiction of the RTC would be undermined if the DAR would vest
in administrative officials original jurisdiction in compensation cases and make
the RTC an appellate court for the review of administrative decisions. 17
Thus, although the new rules speak of directly appealing the decision of
adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from
Sec. 57 that the original and exclusive jurisdiction to determine such cases is
in the RTCs. Any effort to transfer such jurisdiction to the adjudicators and to
convert the original jurisdiction of the RTCs into an appellate jurisdiction
would be contrary to Sec. 57 and therefore would be void. 18 Thus, direct
resort to the SAC by private respondent is valid.
With the issue of jurisdiction of SAC already settled, this Court finds it
unnecessary to determine whether the order to transfer ownership of subject
lands from private respondent to the Republic of the Philippines before the
DARAB had settled with finality the matter of their proper valuation qualifies
as an exception to the doctrine of exhaustion of administrative remedies.
Moreover, the doctrine of exhaustion of administrative remedies is
inapplicable when the issue is rendered moot and academic, 19 as in the
instant case where the DARAB dismissed the valuation proceedings before it
on 29 November 1993. 20
Petitioner also disputes the increase in the total amount of valuation from
P2,146,396.60 or at P53,956.67 per hectare to P5,227,171.10 or at
P131,401.99 per hectare. Petitioner agrees with the formula used by the
Court of Appeals as it is in conformity with that stipulated by the parties during
the pre-trial proceedings before the SAC. But petitioner does not agree with
the data used by the appellate court in arriving at the final valuation, alleging
that the data are taken from those given by private respondent. On the other
hand, it asserts that the valuation as determined by the SAC is more
acceptable as it is in substantial compliance with Sec. 17 of RA 6657. 21
Since the parties have agreed during the pre-trial conference before the SAC
that the valuation shall be determined on the basis of the formula provided in
DAR Admin. Order No. 6, Series of 1992, that formula must be followed
subject to the amendatory provisions of DAR Admin. Order No. 11, Series of
1994. However, the facts required for the computation are unavailable before
us. Hence, the matter must be remanded to the SAC for the recomputation of
the just compensation in accordance with herein-mentioned formula.
Finally, petitioner questions the coverage under RA 6657 of the two (2)
irrigation canals within subject areas and pegging the compensation therefor
at P350,000.00. We agree. These irrigation canals should not have been
separately valued as what the appellate court did in the instant case. The
irrigation canals are considered improvements on the two (2) parcels of land
of private respondent, hence relevant only in estimating the total value of her
property. 22 No separate valuation is necessary. The SAC should take note
of this in recomputing the value of the property involved to determine the just
compensation.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. SP Nos.
38795 and 38885 is MODIFIED. The Regional Trial Court, Br. 23, of
Cabanatuan City, acting as a Special Agrarian Court in Agrarian Case No. 90
(AF), is ordered to recompute the final valuation of subject two (2) parcels of
land based on Department of Agrarian Reform Administrative Order No. 6,
Series of 1992, as amended. The separate valuation of P350,000.00 for the
two (2) irrigation canals is disregarded; their value as improvements shall be
considered only for the purpose of estimating the total value of subject
property.
SO ORDERED.
Mendoza, Quisumbing, Buena and De Leon, Jr., JJ., concur.
G.R. No. 183688 August 18, 2010
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
RIZALINA GUSTILO BARRIDO and HEIRS OF ROMEO BARRIDO,
Respondents.
RESOLUTION
NACHURA, J.:
For review is the Court of Appeals (CA) Decision1 dated February 20, 2008
and its Resolution2 dated July 8, 2008 in CA-G.R. CEB-SP No. 01641. The
assailed decision affirmed the Decision3 of the Regional Trial Court (RTC),
Branch 34, Iloilo City in Civil Case No. 04-28093; while the assailed resolution
denied petitioner Land Bank of the Philippines’ motion for reconsideration.
The undisputed facts are as follows:
Respondents Rizalina Gustilo Barrido and the Heirs of Romeo Barrido are the
registered owners of a parcel of land with an area of 89,204 square meters
covered by Original Certificate of Title No. 0-6318, situated in Barangay
Apologista, Sara, Iloilo. On April 30, 2003, the government expropriated a
portion of the property consisting of 43,4614 sq m for distribution to the
farmer-beneficiaries under the Land Reform Program. Petitioner offered
respondents a total amount of ₱60,385.49 as just compensation, but
respondents rejected the offer. Respondents instituted an original action
before the RTC for the judicial determination of just compensation. The case
was docketed as Civil Case No. 04-28093.5
In their separate Answers, petitioner and the Department of Agrarian Reform
(DAR) insisted that the valuation made is correct, it being based on the
formula laid down in Presidential Decree (P.D.) No. 27 as supplemented by
Executive Order (E.O.) No. 228.6 Under these issuances, the prescribed
formula is as follows:
Land Value = Average Gross Production (AGP) x 2.5 x Government Support
Price (GSP)
On December 8, 2005, the RTC rendered a Decision7 fixing the just
compensation at ₱94, 797.09 per hectare, the dispositive portion of which
reads:
WHEREFORE, based on the foregoing premises, judgment is hereby
rendered fixing the just compensation of land at ₱94,797.09 per hectare and
ordering the LBP to pay plaintiffs Rizalina Gustilo Barrido and Heirs of Romeo
Barrido the total sum of ₱411,997.63 as just compensation for the 4.3461
hectares taken by the government pursuant to P.D. No. 27 and E.O. No. 228
plus 12% interest per annum from March 21, 2003 until full payment.
SO ORDERED.8
The RTC arrived at the valuation by taking the average between the amount
found by the DAR using the formula prescribed by E.O. No. 228 and the
market value of the property which is ₱175,700.00 per hectare. In addition,
the court also awarded 12% interest in the form of damages in view of the
delay in the payment of just compensation.9 Petitioner’s motion for
reconsideration was denied on March 1, 2006.10
On appeal, the CA affirmed the RTC decision in its entirety. Hence, the
instant petition for review which assigns the following errors:
I.
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
ERRORS OF LAW WHEN IT AFFIRMED THE DECISION DATED
DECEMBER 8, 2005 AND ORDER DATED MARCH 1, 2006 OF THE
REGIONAL TRIAL COURT OF ILOILO CITY, BRANCH 34 IN CIVIL CASE
NO. 04-28093, FINDING THAT THE APPLICABLE LAW IN THE INSTANT
CASE IS R.A. NO. 6657 AND NOT P.D. NO. 27 AND E.O. NO. 228.
II.
ASSUMING ARGUENDO THAT R.A. NO. 6657 IS THE APPLICABLE LAW,
STILL THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
ERRORS OF LAW WHEN IT AFFIRMED THE SAID DECISION AND
ORDER OF THE TRIAL COURT THAT FIXED THE JUST COMPENSATION
WHICH IS NOT IN ACCORDANCE WITH THE PROVISIONS OF R.A. NO.
6657 AS TRANSLATED INTO A BASIC FORMULA UNDER DAR
ADMINISTRATIVE ORDER NO. 5, SERIES OF 1998.
III.
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
ERRORS OF LAW WHEN IT AFFIRMED THE SUBJECT DECISION AND
ORDER OF THE TRIAL COURT THAT AWARDED IN FAVOR OF THE
RESPONDENT TWELVE PERCENT (12%) INTEREST PER ANNUM FOR
ALLEGED DELAY IN PAYMENT.11
WON RTC correctly arrived at the just compensation of the land. NO
The issues raised in the instant case are not novel. We have ruled in a
number of cases that if just compensation is not settled prior to the passage
of Republic Act (R.A.) No. 6657, it should be computed in accordance with
RA 6657 even if the property was acquired under P.D. No. 27.12 The fixing of
just compensation should, therefore, be based on the parameters prescribed
in R.A. No. 6657, with P.D. No. 27 and E.O. No. 228 having only suppletory
effect.13 Specifically, Section 17 of R.A. 6657 is the principal basis of the
computation for just compensation.15 The factors set forth in this section
have been translated into a basic formula outlined in DAR Administrative
Order No. 5, series of 1998,16 thus: 17
A. There shall be one basic formula for the valuation of lands covered by VOS
or CA:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV= Market Value per Tax Declaration
The above formula shall be used if all three factors are present, relevant and
applicable.
A1. When the CS factor is not present and CNI and MV are applicable, the
formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
A2. When the CNI factor is not present, and CS and MV are applicable, the
formula shall be:
LV = (CS x 0.9) + (MV x 0.1)
A3. When both the CS and CNI are not present and only MV is applicable, the
formula shall be:
LV = MV x 2
In no case shall the value of the land using the formula MV x 2 exceed the
lowest value of land within the same estate under consideration or within the
same barangay or municipality (in that order) approved by LBP within one (1)
year from receipt of claimfolder.
While the determination of just compensation is essentially a judicial function
vested in the RTC acting as a Special Agrarian Court, the judge cannot abuse
his discretion by not taking into full consideration the factors specifically
identified by law and implementing rules.18 Special Agrarian Courts are not at
liberty to disregard the formula laid down in DAR A.O. No. 5, series of 1998,
because unless an administrative order is declared invalid, courts have no
option but to apply it.19 The courts cannot ignore, without violating the
agrarian law, the formula provided by the DAR for the determination of just
compensation.20
In this case, the RTC adopted a different formula in determining land
valuation by considering the average between the findings of the DAR using
the formula laid down in E.O. 228 and the market value of the property as
stated in the tax declaration. This is obviously a departure from the mandate
of the law and the DAR administrative order.1avvphi1
As the RTC based its valuation on a different formula and without taking into
consideration the factors set forth in Section 17 of R.A. 6657, we are
constrained to remand the case to the RTC for the determination of just
compensation in accordance with this formula and applicable DAR
regulations.
WHEREFORE, the February 20, 2008 Decision and July 8, 2008 Resolution
of the Court of Appeals in CA-G.R. CEB-SP No. 01641 are REVERSED and
SET ASIDE.
Civil Case No. 04-28093 is REMANDED to the court of origin, Branch 34 of
the Regional Trial Court of Iloilo City, which is directed to determine with
dispatch the just compensation due respondents Rizalina Gustilo Barrido and
the Heirs of Romeo Barrido strictly in accordance with the formula laid down
in DAR Administrative Order No. 5, series of 1998.
SO ORDERED.
G.R. No. 170422 March 7, 2008
SPS. EDMOND LEE and HELEN HUANG, petitioner,
vs.
LAND BANK OF THE PHILIPPINES, respondents.
DECISION
TINGA, J.:
For our consideration is a Petition1 assailing the 18 August 2005 Decision2 of
the Court of Appeals in CA-G.R. SP No. 84249, entitled Land Bank of the
Philippines v. Sps. Edmond Lee and Helen Huang.
The antecedents follow.
On 7 August 2001, petitioners received a notice of coverage informing them
that their landholding3 is covered by the government’s compulsory acquisition
scheme pursuant to the Comprehensive Agrarian Reform Law (R.A. No.
6657). On 1 June 2001, they received from the Department of Agrarian
Reform (DAR) a copy of the notice of land valuation and acquisition which
contains an offer of P315,307.874 as compensation for 3.195 hectares of the
property. Petitioners rejected the offer.
Subsequently, a summary administrative proceeding was conducted by the
Department of Agrarian Reform Adjudication Board (DARAB) to determine
the valuation and compensation of the subject property. On 27 September
2001, the DARAB issued a decision5 declaring that the Land Bank of the
Philippines (LBP) fully complied with the criteria set forth in R.A. No. 6657 in
determining the value of the land, and ordered the LBP to pay petitioners the
original amount offered by DAR. Petitioners sought reconsideration of the
decision, but their motion was denied by the Provincial Adjudicator on 6
December 2001.6
Aggrieved, petitioners filed an original petition7 for the determination of just
compensation before the Regional Trial Court of Balanga City, Bataan.8 They
offered the same exhibits and transcript of the oral testimonies and the
appraisal report presented in Civil Case No. 7171,9 a prior just compensation
case involving a parcel of land adjacent to the property subject of this case,
where the special agrarian court (SAC) pegged the value of the property at
P250.00 per square meter. LBP, for its part, presented the testimony of one
Theresie P. Garcia, an agrarian affairs specialist. The SAC, citing the
appraisal report and its decision in Civil Case No. 7171, decided in favor of
petitioners and ordered LBP to pay them P7,978,750.00 as just
compensation.10
LBP filed a Petition for Review11 before the Court of Appeals and argued that
the SAC erred in giving considerable weight on the appraisal report of the
private appraisal firm thereby disregarding the provisions of R.A. No. 6657
and its implementing regulations. The Court of Appeals ruled that the SAC
should have refrained from taking judicial notice of its own decision in Civil
Case No. 7171 in resolving just compensation in the present case, especially
because the values rendered in the previous decision had not yet attained a
final and executory character at the time.12 It found that the SAC made a
wholesale adoption of the valuation of the appraisal company and did not
consider the other factors set forth in R.A. No. 6657 even though the
appraisal company admitted that it did not consider as applicable the CARP
valuation of the property.13
The Court of Appeals likewise found the value proposed by LBP to be
extremely low considering the disparity between the said amount and that
suggested by the appraisal company. According to the Court of Appeals, the
SAC should have judiciously made an independent finding of fact and
explained the legal basis thereof.14
The Court of Appeals held that since the taking of private lands under the
agrarian reform program partakes of the nature of an expropriation
proceeding, the SAC should have appointed competent and disinterested
commissioners to assist it in valuating the property in question, following
Section 5, Rule 67 of the 1997 Rules of Civil Procedure.15 It remanded the
case to the trial court "for proper and judicious determination of just
compensation, appointing for that purpose a set of commissioners."16
Before us, petitioners allege that it is no longer necessary to remand the case
to the lower court because the parties already had the chance before the SAC
to present evidence on the valuation of the subject landholding. Petitioners
believe that the remand of the case would give LBP undue opportunity which
it already had during the proceedings a quo, and which opportunity it failed to
take advantage of.17
Petitioners also argue that the SAC may validly take judicial notice of its
decision in the other just compensation cases. They point out that they had
offered in the present case both testimonial and documentary evidence
adduced in the previous case. Thus, the SAC’s decision in this case was
based on the evidence presented during trial.18
Finally, relying on the presumption of regularity, petitioners claim that the SAC
had considered the criteria set forth in the law for the determination of just
compensation in computing the value of the subject landholding. In any case,
according to them, R.A. No. 6657 does not at all require the SAC to consider
all the seven factors enumerated therein in its determination of just
compensation.19
In its Comment,20 LBP argues that the Supreme Court is not a trier of facts,
and is not duty-bound to determine the veracity of the factual allegations of
petitioners.21 Anent the issue of judicial notice, LBP posits that the reliance
by the SAC and petitioners on the valuation in Civil Case No. 7171 is
misplaced because the said case is still on appeal and has not yet attained
finality.22 Even if the evidence in the aforesaid case is presented in this case,
the fact remains that the valuation reached by the SAC is not in accord with
R.A. No. 6657 as translated into a basic formula in DAR Administrative Order
No. 5, series of 1998 (AO No. 5).23 In addition, LBP posits that the factors in
determining just compensation, as spelled out in Land Bank of the Philippines
v. Spouses Banal24 were not observed by the SAC in the instant case since it
relied merely on the alleged selling price of the adjoining lands in fixing the
just compensation of the subject property instead of following the formula
under AO No. 5.25 LBP adds that the subject property is being acquired by
the government pursuant to its land reform program, and thus its potential for
commercial, industrial or residential uses will not affect the compensation to
be paid by the State as its value is determined at the time of the taking.26
WON RTC is wrong in relying the valuation of just compensation in the
previous civil case no 7171. NO
WON RTC correctly considered the factors under RA 6657 in arriving at just
compensation? NO
There is no merit in the petition.
Judicial cognizance is based on considerations of expediency and
convenience. It displaces evidence since, being equivalent to proof, it fulfills
the object which the evidence is intended to achieve.27
The SAC may take judicial notice of its own decision in Civil Case No. 7171. It
has been said that courts may take judicial notice of a decision or the facts
involved in another case tried by the same court if the parties introduce the
same in evidence or the court, as a matter of convenience, decides to do
so.28 Petitioners presented the same appraisal report offered in Civil Case
No. 7171, and there seems to be no objection on the part of LBP when they
did so.
We note, however, that the SAC’s cognizance of its findings in Civil Case No.
7171 was not the sole reason for its decision. A reading of its decision shows
that the SAC considered the evidence presented by both petitioners and LBP,
i.e., the testimonies and report used in Civil Case No. 7171 proffered by
petitioners, and the testimony of LBP’s agrarian affairs specialist. The SAC
evidently found the testimony of the LBP officer unsatisfactory and LBP’s
valuation improper, and thus relied on the evidence presented by petitioners.
As the Court sees it, the decision in Civil Case No. 7171 merely strengthened
the case for petitioners.
These factors have already been incorporated in a basic formula by the DAR
pursuant to its rule-making power under Section 49 of R.A. No. 6657. AO No.
5 precisely filled in the details of Section 17, R. A. No. 6657 by providing a
basic formula by which the factors mentioned therein may be taken into
account.29 This formula has to be considered by the SAC in tandem with all
the factors referred to in Section 17 of the law. The administrative order
provides:
A. There shall be one basic formula for the valuation of lands covered by VOS
or CA:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where:
LV = Land Value

Be that as it may, the SAC’s reliance on the valuation made by the appraisal CNI = Capitalized Net Income
company is misplaced, since the valuation was not arrived at using the factors
required by the law and prescribed by the AO No. 5. CS = Comparable Sales

Section 17 of R.A. No. 6657 which enumerates the factors to be considered in MV = Market Value per Tax Declaration
determining just compensation reads:
The above formula shall be used if all three factors are present, relevant, and
SECTION 17. Determination of Just Compensation.—In determining just applicable.
compensation, the cost of acquisition of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the A1. When the CS factor is not present and CNI and MV are applicable, the
owner, tax declarations, and the assessment made by government assessors formula shall be:
shall be considered. The social and economic benefits contributed by the
farmers and the farmworkers and by the Government to the property as well LV = (CNI x 0.9) + (MV x 0.1)
as the non-payment of taxes or loans secured from any government financing
institutions on the said land shall be considered as additional factors to A2. When the CNI factor is not present, and CS and MV are applicable, the
determine its valuation. formula shall be:
LV = (CS x 0.9) + (MV x 0.1)
A3. When both the CS and CNI are not present and only MV is applicable, the
formula shall be:
LV = MV x 2
In no case shall the value of idle land using the formula MV x 2 exceed the
lowest value of land within the same estate under consideration or within the
same barangay or municipality (in that order) approved by LBP within one (1)
year from receipt of claimfolder.
---
Where:
CNI=
(AGPxSP) - CO
.12
AGP= Average Gross Production corresponding to the latest available 12
months’ gross production immediately preceding the date of FI (field
investigation)
SP= Selling Price (the average of the latest available 12 months selling prices
prior to the date of receipt of the CF (claim folder) by LBP for processing,
such prices to be secured from the Department of Agriculture (DA) and other
appropriate regulatory bodies or, in their absence, from the Bureau of
Agricultural Statistics. If possible, SP data shall be gathered for the barangay
or municipality where the property is located. In the absence thereof, SP may
be secured within the province or region.
CO = Cost of Operations
Whenever the cost of operations could not be obtained or verified, an
assumed net income rate (NIR) of 20% shall be used. Landholdings planted
to coconut which are productive at the time of FI shall continue to use the
assumed NIR of 70 %. DAR and LBP shall continue to conduct joint industry
studies to establish the applicable NIR for each crop covered under CARP.
0.12 = Capitalization rate
We find that the factors required by the law and enforced by the DAR
Administrative Order were not observed by the SAC when it adopted
wholeheartedly the valuation arrived at in the appraisal report. According to
the appraisal company, it "personally inspected the property, investigated
local market conditions, and have given consideration to the extent, character
and utility of the property; sales and holding prices of similar land; and highest
and best use of the property."30 The value of the land was arrived at using
the market data approach, which bases the value of the land on sales and
listings of comparable property registered within the vicinity.31 In fact, as
noted by the Court of Appeals, a representative of the company admitted that
it did not consider the CARP valuation to be applicable.32
This is not to say that the Court favors the valuation given by LBP. While it
presented a land valuation worksheet33 and a claims valuation and
processing form,34 which both value the land at P315, 307.87, we find that
LBP’s valuation is too low vis-á-vis the value suggested by the appraisal
company. Moreover, we observe that the valuation was not arrived at based
on all the factors provided in the law. As admitted by its agrarian affairs
specialist, she had not gone over the property before she made the valuation,
nor was she aware of adjacent properties/structures.35 The LBP was not
thorough in its valuation of the subject property.
All told, we find that the remand of the case is in order to better determine the
proper valuation of the subject property.
We clarify, however, that we are not in accord with the declaration of the
Court of Appeals on the appointment of commissioners in the instant case.
According to the appellate court:
x x x Consequently, when the Regional Trial Court acting as a Special
Agrarian Court determines just compensation, it is mandated to apply the
Rules of Court.36 The rules on expropriation, on the other hand, specifically
under Section 5 of Rule 67 of the 1997 Rules on Civil Procedure provides to
wit:
SEC.5. Ascertainment of compensation.— Upon the rendition of the order of
expropriation, the court shall appoint not more than three (3) competent and
disinterested persons as commissioners to ascertain and report to the court
the just compensation for the property sought to be taken. The order of
appointment shall designate the time and place of the first session of the
hearing to be held by the commissioners and specify the time within which
their report is to be filed with the court.
xxx
Under the afore-quoted provision, it is clear that the SAC should have
appointed competent and disinterested commissioners to assist it in valuating
the property in question. (Emphasis supplied) x x x.37
The Court of Appeals seems to imply that the appointment of commissioners
is mandatory in agrarian reform cases. We do not agree. While the Rules of
Court provisions apply to proceedings in special agrarian courts,38 it is clear
that unlike in expropriation proceedings under the Rules of Court the
appointment of a commissioner or commissioners is discretionary on the part
of the court or upon the instance of one of the parties. And when the court
does resort to the commissioners-type of appraisal, it is not circumscribed to
appoint three commissioners, unlike the modality under Rule 67. Section 58
of R.A. No. 6657 provides:
Sec. 58. Appointment of Commissioners.—The Special Agrarian Courts, upon
their own initiative or at the instance of any of the parties, may appoint one or
more commissioners to examine, investigate and ascertain facts relevant to
the dispute, including the valuation of properties, and to file a written report
thereof with the court.
With the remand of the case, it is now up to the SAC, or to the parties, to
determine if there is a need to avail of commissioners to arrive at the proper
valuation of the subject land.
WHEREFORE, the petition is DENIED. The decision of the Court of Appeals
is AFFIRMED with MODIFICATION as above indicated. The case is
REMANDED to the Regional Trial Court of Balanga, Bataan acting as a
Special Agrarian Court for the determination of just compensation in
accordance with Section 17 of Republic Act No. 6657.
SO ORDERED.
Quisumbing,Chairperson Carpio-Morales, Velasco, Jr., JJ., concur.
G.R. No. 143275 March 20, 2003
LAND BANK OF THE PHILIPPINES, petitioner,
vs.
ARLENE DE LEON and BERNARDO DE LEON, respondents.
RESOLUTION
CORONA, J.:
Before us are the motion for reconsideration dated October 16, 2002 and
supplement to the motion for reconsideration dated November 11, 2002 filed
by movant-petitioner Land Bank of the Philippines (LBP, for brevity) seeking a
reversal of this Court’s Decision1 dated September 10, 2002 which denied
LBP’s petition for review.
Herein respondent spouses Arlene and Bernardo de Leon filed a petition to fix
the just compensation of a parcel of land2 before the Regional Trial Court of
Tarlac, Branch 63, acting as a Special Agrarian Court. On December 19,
1997, the agrarian court rendered summary judgment fixing the compensation
of the subject property as follows: (1) P1,260,000 for the 16.69 hectares of
riceland and (2) P2,957,250 for the 30.4160 hectares of sugarland.
The Department of Agrarian Reform (DAR, for brevity) and LBP both filed
separate appeals using different modes. DAR filed a petition for review while
LBP interposed an ordinary appeal by filing a notice of appeal. DAR’s petition
for review3 was assigned to the Special Third Division of the Court of Appeals
while LBP’s ordinary appeal4 was assigned to the Fourth Division of the same
court.
On November 6, 1998, the appellate court’s Special Third Division rendered a
decision in the petition for review filed by DAR, the dispositive portion of
which reads:
WHEREFORE, premises considered, the petition for review is GIVEN DUE
COURSE. The decision dated February 9, 1998 is partially reconsidered. The
trial court is ordered to recompute the compensation based on the selling
price of palay at 213.00 per cavan. Petitioner is ordered to pay legal interest
at 6% of the compensation so fixed from 1990 until full payment is made by
the government.5
Meanwhile, on February 15, 2000, the appellate court’s Fourth Division
dismissed LBP’s ordinary appeal primarily holding that LBP availed of the
wrong mode of appeal.6 LBP filed a motion for reconsideration but the same
was denied.
On July 14, 2000, LBP filed before this Court a petition for review of the
decision of the Court of Appeals. On September 10, 2002, this Court
rendered a Decision, the dispositive portion of which reads:
WHEREFORE, the appealed RESOLUTIONS, dated February 15, 2000 and
May 22, 2000, respectively, of the Court of Appeals are hereby AFFIRMED.
No costs.
SO ORDERED.7
In affirming the dismissal by the appellate court of LBP’s ordinary appeal, this
Court held that Section 608 of RA 6657 (The Comprehensive Agrarian
Reform Law) is clear in providing petition for review as the appropriate mode
of appeal from decisions of Special Agrarian Courts. Section 619 (the
provision on which LBP bases its argument that ordinary appeal is the correct
mode of appeal from decisions of Special Agrarian Courts) merely makes a
general reference to the Rules of Court and does not categorically prescribe
ordinary appeal as the correct way of questioning decisions of Special
Agrarian Courts. Thus, we interpreted Section 61 to mean that the specific
rules for petitions for review in the Rules of Court and other relevant
procedures of appeals shall be followed in appealed decisions of Special
Agrarian Courts.
We likewise held that Section 60 of RA 6657 is constitutional and does not
violate this Court’s power to "promulgate rules concerning the protection and
enforcement of constitutional rights, pleadings, practice and procedure in all
courts, the admission to the practice of law, the Integrated Bar and legal
assistance to the underprivileged."10 We ruled that the Rules of Court does
not categorically prescribe ordinary appeal as the exclusive mode of appeal
from decisions of Special Agrarian Courts. The reference by Section 61 to the
Rules of Court in fact even supports the mode of a petition for review as the
appropriate way to appeal decisions of the Special Agrarian Courts.
Furthermore, the same Section 5(5), Article VIII of the 1987 Philippine
Constitution quoted by LBP states that "rules of procedure of special courts
and quasi-judicial bodies shall remain effective unless disapproved by the
Supreme Court." Since Section 60 is a special procedure and this Court has
not yet provided for a particular process for appeals from decisions of
agrarian courts, the said section does not encroach on our rule-making
power.
Hence, LBP filed the instant motion for reconsideration and supplement to the
motion for reconsideration reiterating its claim in the petition for review that
Section 60 of RA 6657 is unconstitutional. LBP still maintains that a legislative
act like Section 60 infringes on the exclusive rule-making power of this Court
in violation of the 1987 Philippine Constitution.
In the event that said argument is again rejected, LBP pleads that the subject
Decision should at least be given prospective application considering that
more than 60 similar agrarian cases filed by LBP via ordinary appeal before
the Court of Appeals are in danger of being dismissed outright on technical
grounds on account of our ruling herein. This, according to LBP, will wreak
financial havoc not only on LBP as the financial intermediary of the
Comprehensive Agrarian Reform Program but also on the national treasury
and the already depressed economic condition of our country.11 Thus, in the
interest of fair play, equity and justice, LBP stresses the need for the rules to
be relaxed so as to give substantial consideration to the appealed cases.
WON sec 60 is unconstitutional. NO
What is the proper mode of appeal from decisions of SAC? Pet. For review
On the first ground, we find it needless to re-discuss the reasons already
propounded in our September 10, 2002 Decision explaining why Section 60
of RA 6657 does not encroach on our constitutional rule-making power.
Be that as it may, we deem it necessary to clarify our Decision’s application to
and effect on LBP’s pending cases filed as ordinary appeals before the Court
of Appeals. It must first be stressed that the instant case poses a novel issue;
our Decision herein will be a landmark ruling on the proper way to appeal
decisions of Special Agrarian Courts. Before this case reached us, LBP had
no authoritative guideline on how to appeal decisions of Special Agrarian
Courts considering the seemingly conflicting provisions of Section 60 and 61
of RA 6657.
More importantly, the Court of Appeals has rendered conflicting decisions on
this precise issue. On the strength of Land Bank of the Philippines vs. Hon.
Feliciano Buenaventura, penned by Associate Justice Salvador Valdez, Jr. of
the Court of Appeals, certain decisions12 of the appellate court held that an
ordinary appeal is the proper mode. On the other hand, a decision13 of the
same court, penned by Associate Justice Romeo Brawner and subject of the
instant review, held that the proper mode of appeal is a petition for review. In
another case,14 the Court of Appeals also entertained an appeal by the DAR
filed as a petition for review.
On account of the absence of jurisprudence interpreting Sections 60 and 61
of RA 6657 regarding the proper way to appeal decisions of Special Agrarian
Courts as well as the conflicting decisions of the Court of Appeals thereon,
LBP cannot be blamed for availing of the wrong mode. Based on its own
interpretation and reliance on the Buenaventura ruling, LBP acted on the
mistaken belief that an ordinary appeal is the appropriate manner to question
decisions of Special Agrarian Courts.
Hence, in the light of the aforementioned circumstances, we find it proper to
emphasize the prospective application of our Decision dated September 10,
2002. A prospective application of our Decision is not only grounded on equity
and fair play but also based on the constitutional tenet that rules of procedure
shall not impair substantive rights.
In accordance with our constitutional power to review rules of procedure of
special courts,15 our Decision in the instant case actually lays down a rule of
procedure, specifically, a rule on the proper mode of appeal from decisions of
Special Agrarian Courts. Under Section 5 (5), Article VIII of the 1987
Philippine Constitution, rules of procedure shall not diminish, increase or
modify substantive rights. In determining whether a rule of procedure affects
substantive rights, the test is laid down in Fabian vs. Desierto,16 which
provides that:
[I]n determining whether a rule prescribed by the Supreme Court, for the
practice and procedure of the lower courts, abridges, enlarges, or modifies
any substantive right, the test is whether the rule really regulates procedure,
that is, the judicial process for enforcing rights and duties recognized by
substantive law and for justly administering remedy and redress for a
disregard or infraction of them. If the rule takes away a vested right, it is not
procedural. If the rule creates a right such as the right to appeal, it may be
classified as a substantive matter; but if it operates as a means of
implementing an existing right then the rule deals merely with procedure.
(italics supplied)
We hold that our Decision, declaring a petition for review as the proper mode
of appeal from judgments of Special Agrarian Courts, is a rule of procedure
which affects substantive rights. If our ruling is given retroactive application, it
will prejudice LBP’s right to appeal because pending appeals in the Court of
Appeals will be dismissed outright on mere technicality thereby sacrificing the
substantial merits thereof. It would be unjust to apply a new doctrine to a
pending case involving a party who already invoked a contrary view and who
acted in good faith thereon prior to the issuance of said doctrine.
In the 1992 case of Spouses Benzonan vs. Court of Appeals,17 respondent
Pe, whose land was foreclosed by Development Bank of the Philippines in
1977 and subsequently sold to petitioners Benzonan in 1979, tried to invoke a
1988 Supreme Court ruling counting the five-year period to repurchase from
the expiration (in 1978) of the one-year period to redeem the foreclosed
property. Said 1988 ruling reversed the 1957 and 1984 doctrines which
counted the five-year period to repurchase from the date of conveyance of
foreclosure sale (in 1977). Using the 1988 ruling, respondent Pe claimed that
his action to repurchase in 1983 had not yet prescribed.
However, this Court refused to apply the 1988 ruling and instead held that the
1957 and 1984 doctrines (the prevailing ruling when Pe filed the case in
1983) should govern. The 1988 ruling should not retroact to and benefit Pe’s
1983 case to repurchase. Thus, the action had indeed prescribed. This Court
justified the prospective application of the 1988 ruling as follows:
We sustain the petitioners' position. It is undisputed that the subject lot was
mortgaged to DBP on February 24, 1970. It was acquired by DBP as the
highest bidder at a foreclosure sale on June 18, 1977, and then sold to the
petitioners on September 29, 1979.
At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141
as amended was that enunciated in Monge and Tupas cited above. The
petitioners Benzonan and respondent Pe and the DBP are bound by these
decisions for pursuant to Article 8 of the Civil Code "judicial decisions
applying or interpreting the laws or the Constitution shall form a part of the
legal system of the Philippines." But while our decisions form part of the law
of the land, they are also subject to Article 4 of the Civil Code which provides
that "laws shall have no retroactive effect unless the contrary is provided."
This is expressed in the familiar legal maxim lex prospicit, non respicit, the
law looks forward not backward. The rationale against retroactivity is easy to
perceive. The retroactive application of a law usually divests rights that have
already become vested or impairs the obligations of contract and hence, is
unconstitutional (Francisco v. Certeza, 3 SCRA 565 [1961]).
The same consideration underlies our rulings giving only prospective effect to
decisions enunciating new doctrines.
xxx xxx xxx
The buyers in good faith from DBP had a right to rely on our rulings in Monge
and Tupas when they purchased the property from DBP in 1979 or thirteen
(13) years ago. Under the rulings in these two cases, the period to
repurchase the disputed lot given to respondent Pe expired on June 18, 1982.
He failed to exercise his right. His lost right cannot be revived by relying on
the 1988 case of Belisario. The right of petitioners over the subject lot had
already become vested as of that time and cannot be impaired by the
retroactive application of the Belisario ruling.18 (emphasis supplied)

WHEREFORE, the motion for reconsideration dated October 16, 2002 and
the supplement to the motion for reconsideration dated November 11, 2002
are PARTIALLY GRANTED. While we clarify that the Decision of this Court
dated September 10, 2002 stands, our ruling therein that a petition for review
is the correct mode of appeal from decisions of Special Agrarian Courts shall
apply only to cases appealed after the finality of this Resolution.

SO ORDERED.