Chailese Development Company, Inc. vs. Monico Dizon, et. al.

G.R. No. 206788; February 14, 2018

Reyes, Jr., J.
FACTS:
In this petition for review on Certiorari under Rule 45, petitioner sought to annul and set
aside the CA’s decision which ordered the referral of the case to DAR. The CA found the existence
of an agrarian dispute since the issue of petitioner's possession was intertwined with the issue of
whether the respondents are bona fide tillers and occupants entitled to disturbance compensation.
Petitioner Chailese Development Company, Inc., registered owner of the subject
landholdings, filed a complaint for recovery of possession and damages before the trial court
against respondents. The DAR Secretary issued a resolution ordering that the subject landholdings
be converted for commercial and light industrial uses. Petitioner averred that it is, however, unable
to introduce developments as a portion of the lots were being illegally occupied by respondents
who refused to vacate.
Respondents, in their answer, contended that lower court has no jurisdiction over the case
as the allegations involve the application of the Agrarian Reform Law. They averred that they are
tenants of the subject landholding which is a hacienda devoted to agricultural production and that
petitioner, who in order to avoid the compulsory distribution under the Comprehensive Agrarian
Reform Law (CARL), filed a "bogus" petition for conversion.
ISSUE:
Does the case for recovery of possession and damages involve an agrarian dispute which
is under DAR’s jurisdiction?
RULING:
No, the case does not involve an agrarian dispute.
It is a basic rule in procedure that the jurisdiction of a court over the subject matter and the
nature of an action is determined by law and the allegations in the complaint. The exclusive
jurisdiction of the DAR over agrarian cases was introduced by Sec. 19 to Sec. 50 of R.A. No. 9700
which provides that the judge or prosecutor is obligated to automatically refer the cases pending
before it to the DAR when the following requisites are present: (a) there is an allegation from any
one or both of the parties that the case is agrarian in nature; and (b) one of the parties is a farmer,
farmworker, or tenant.
In this case, the first requisite is satisfied by the allegations made by the respondents in
their answer assailing the jurisdiction of the regular court to rule on the matter on the ground that
it is agrarian in nature. Anent the second requisite, the Court finds that the respondents failed to
prove that they are farmers, farmworkers, or tenants. Mere allegation would not suffice to establish
the existence of the second requirement. Respondents failed to adduce any evidence of the
existence of any tenancy agreement between respondents and petitioner's predecessor-in
interest.
For failure to satisfy the second requisite, this, as discussed, precludes the application R.A.
No. 9700, thus, it is the regular court which has jurisdiction over the present case, and not DAR.
138 | COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON LABOR LAW AND SOCIAL LEGISLATION
SPECIAL AGRARIAN COURTS MAY RELAX THE APPLICATION OF THE DAR
FORMULA IN COMPUTING JUST COMPENSATION BUT THEY MUST CLEARLY
EXPLAIN THE DEVIATION; OTHERWISE, THEY WILL BE CONSIDERED IN
GRAVE
ABUSE OF DISCRETION
Landbank of the Philippines vs. Edna Mayo Alcantara and Heirs of Cristy Mayo Alcantara
G.R. No. 187423; February 28, 2018
Martires, J.
FACTS:
Petitioner assails by way of a petition for review on Certiorari the CA’s decision which
affirmed with modification the RTC’s decision, sitting as Special Agrarian Court (SAC).
The Department of Agrarian Reform (DAR) issued a Notice of Land Valuation and
Acquisition over the lands owned by respondents. LBP gave its valuation of P1,210,252.96, in
accordance with DAR A.O. No. 6, series of 1992, as amended. Respondents did not question their
land's acquisition but disagreed with its valuation. They filed a protest with the DAR Adjudication
Board (DARAB), which rendered a decision upholding the valuation of LBP. Thereafter, they filed
a judicial complaint and reiterated that just compensation for their agricultural land should be based
on its fair market value. The SAC ruled in respondents' favor and ignored the formula given in DAR
A. O. No. 6, series of 1992, as amended and used the 1998 issuance of the Barangay Council of
Brgy. Tamisian. In the said issuance, the council members agreed that the selling price for the
coconut lands in their barangay would be P100,000.00 per hectare. Multiplying the 22.6762
hectares of herein respondents by P100,000.00 per hectare, the SAC arrives at the amount of P2,
267,620.00, as the just compensation. Hence, this petition.
LBP asserts that the SAC had contravened the valuation of CARP lands set in DAR A.O.
No. 6, Series of 1992, as amended, as it based its valuation solely on the fair market value.
ISSUE:
Was the SAC correct in basing its valuation solely on the fair market value?
RULING:
No, the SAC had contravened the law as it based its valuation solely on the fair market
value.
The Supreme Court reiterated the following guidelines in determining just compensation:
First, in determining just compensation, courts are obligated to apply both the compensation
valuation factors enumerated under Section 17 of R.A. No. 6657 and the basic formula laid down
by the DAR. Second, these formulas have the force and effect of law; unless declared invalid in a
case where its validity is directly put in issue, courts must consider their use and application. Third,
courts, in the exercise of their judicial discretion, may relax the application of the formula to fit the
peculiar circumstances of a case. They must, however, clearly explain the reason for any deviation;
otherwise, they will be considered in grave abuse of discretion.
In this case, the SAC clearly deviated from, nay rejected, the formula set by the DAR in
the subject administrative orders. In its determination of just compensation in this case, the SAC
made no use of any calculation or formula. The special court relied, quite simply, on respondents'
valuation, which in turn was based on a 1998 issuance of the Barangay Council of Brgy. Tamisian.
The SAC did not discuss how the council came up with this figure. In fine, the SAC failed to present
a well-reasoned justification, as supported by the evidence on record, for why it deviated from the
DAR formula.
Hence, it ruled in blatant disregard of the factors spelled out in Section 17 of R.A. No. 6657.
The SAC's valuation in this case must be struck down as illegal and must be set aside.
| 139COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON LABOR LAW AND SOCIAL LEGISLATION
IF PROPERTY IS TAKEN FOR PUBLIC USE BEFORE COMPENSATION, THE FINAL
COMPENSATION MUST INCLUDE INTERESTS ON ITS JUST VALUE TO BE
COMPUTED
FROM THE TIME THE PROPERTY IS TAKEN TO THE TIME WHEN
COMPENSATION IS
ACTUALLY PAID OR DEPOSITED WITH THE COURT
Apo Fruits Corporation vs. The Land Bank of the Philippines
and Department of Agrarian Reform
G.R. Nos. 217985-86; March 21, 2018
Tijam, J.
FACTS:
This is an omnibus motion filed by the Land Bank of the Philippines (LBP) for the
reconsideration of the SC’s decision affirming CA and RTC’s decision.
Apo was the registered owner of a 115.2179-hectare land situated in San Isidro, Tagum
City. Apo voluntarily offered to sell the subject property to the government for purposes of the
Comprehensive Agrarian Reform Program (CARP). Apo was informed that the value of the subject
property was P16.5484 per sq.m. Finding the said valuation low, Apo rejected the offer. Meanwhile,
the DAR requested LBP to deposit the amount of P3,814,053.53 as initial payment for the subject
property at the rate of P3.3102 per sq.m.
On December 9, 1996, the certificate of title of Apo was cancelled and the subject property
was transferred in the name of the Republic of the Philippines. Corollarily, several Certificates of
Land Ownership (CLOAs) were issued in favor of farmer-beneficiaries. Not satisfied with the
valuation of LBP, Apo filed a complaint for determination of just compensation with the Department
of Agrarian Reform Adjudication Board (DARAB). Unfortunately, the said case remained pending
for almost six (6) years without resolution. Apo then filed a Complaint for determination of just
compensation and prayed for 12% interest on the unpaid just compensation as counted from the
time of the taking until full payment.
ISSUE:
Is LBP liable to pay legal interest on the just value of the property from the time of the
taking until full payment thereof?
RULING:
Yes, LBP is liable to pay legal interest from the time of the taking of the property until full
payment.
In Republic of the Philippines. vs. Court of Appeals, the Supreme Court held that the
constitutional limitation of "just compensation" is considered to be the sum equivalent to the market
value of the property, broadly described to be the price fixed by the seller in open market in the
usual and ordinary course of legal action and competition or the fair value of the property as
between one who receives, and one who desires to sell, it fixed at the time of the actual taking by
the government.
In the present case, LBP merely deposited the amount of Php 3,814,053.53 as initial
payment of the just compensation. The RTC's valuation in its decision as just compensation for
the subject property is Php 149,783,000.27. There is a staggering difference between the initial
payment made by the LBP and the amount of the just compensation due to Apo. It should be noted
that the subject property has already been taken by the government on December 9, 1996. Up to
this date, the just compensation has not been fully paid. During the interim, Apo is deprived of the
income it would have made had it been properly compensated for the properties at the time of the
taking. It is therefore necessary to hold LBP liable to pay for the legal interest due to its delay in
fully satisfying the payment of the just compensation.
Thus, LBP is liable to pay legal interest of 12% counted from December 9, 1996, the time
of the taking until June 30, 2013. Thereafter, or beginning July 1, 2013 until fully paid, the just
compensation shall earn 6% legal interest in accordance with Bangko Sentral ng Pilipinas
Monetary Board Circular No. 799, Series of 2013.
140 | COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON LABOR LAW AND SOCIAL LEGISLATION
DAR HAS EXCLUSIVE JURISDICTION TO CANCEL CERTIFICATION OF LAND
OWNERSHIP AWARDS TO PARTIES WHO ARE NOT AGRICULTURAL TENANTS
Spouses Fredeswinda Drilon Ybiosa and Alfredo Ybiosa vs. Inocencio Drilon
G.R. No. 212866; April 23, 2018
Del Castillo, J.
FACTS:
In this petition for review on Certiorari, petitioner assails the CA’s decision finding that the
complaint filed is under the jurisdiction of Department of Agrarian Reform (DAR) and not the
Department of Agrarian Reform Adjudication Board (DARAB). The subject matter of this
controversy involves a property covered by an Original Certificate of Title that was issued pursuant
to a Certificate of Land Ownership (CLOA) issued by the DAR to Gabriel Drilon.
Herein respondent, Inocencio Drilon alleged that he is the owner of the subject property
after he purchased the same from the late Gabriel Drilon as evidenced by the receipts. He further
alleged that a certain Eustaquia Eumague Drilon connived with herein petitioners, Spouses
Fredeswinda Drilon Ybiosa and Alfredo Ybiosa, in effecting a deed of sale in favor of Spouses
Ybiosa where the signature of the late Gabriel Drilon was forged. Hence, respondent filed a
complaint in the RTC for the annulment of deed of absolute sale and cancellation of certificate of
title and CLOA of the subject property. For their defense, defendants insisted that the case should
be dismissed because the trial court acquired no jurisdiction over the subject matter of the case.
The trial court ruled that it does not have jurisdiction to annul a CLOA as it is the DARAB
who has jurisdiction over cases involving the correction, partition, cancellation, secondary and
subsequent issuances of CLOAs and Emancipation Patents (EPs) which are registered with the
Land Registration Authority. CA, however, found that this is falls under DAR and not DARAB.
ISSUE:
Is it the DAR, and not the DARAB nor the RTC, which has jurisdiction to cancel CLOAs to
parties who are not agricultural tenants?
RULING:
Yes, DAR has jurisdiction to cancel CLOAs to parties who are not agricultural tenants.
In Heirs of Julian dela Cruz v. Heirs of Alberto Cruz, the Court pronounced that under
Section 2(f), Rule II of the DARAB Rules of Procedure, the DARAB has jurisdiction over cases
involving the issuance, correction and cancellation of CLOAs which were registered with the LRA.
However, for the DARAB to have jurisdiction in such cases, they must relate to an agrarian dispute
between landowner and tenants to whom CLOAs have been issued by the DAR Secretary. The
cases involving the issuance, correction and cancellation of the CLOAs by the DAR in the
administrative implementation of agrarian reform laws, rules and regulations to parties who are not
agricultural tenants or lessees are within the jurisdiction of the DAR and not of the DARAB. To this
day, this very same procedure is applicable, pursuant to the more recent 2009 DARAB Rules of
Procedure; Section 9 of RA No. 9700, or the CARPER Law; and DAR AO No. 3, series of 2009.
With the above disquisition, respondent should have filed his case against petitioners
before the DAR, and not the RTC. The RTC had no jurisdiction over respondent's cause of action
as it primarily seeks to cancel the CLOA and certificate of title issued to petitioners who are not
agricultural tenants.
Thus, it is the DAR Secretary who has jurisdiction over the instant case for cancellation of
petitioners' CLOA and certificate of title.
| 141COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON LABOR LAW AND SOCIAL LEGISLATION
PARAD HAS JURISDICTION OVER AGRARIAN DISPUTE
Spouses Nolasco vs. Rural Bank of Pandi
G.R. No. 194455; June 27, 2018
Martires, J.
FACTS:
Before the Court is a petition for review on Certiorari under Rule 45, assailing the decision
of the Court of Appeals (CA) ruling that the Department of Agrarian Reform Adjudication Board
(DARAB) had no jurisdiction over the complaint filed.
The spouses Reynaldo and Primitiva Rivera (the spouses Rivera) obtained a loan from the
Rural Bank of Pandi, Inc. (respondent bank). The loan was secured with a mortgage over a parcel
of land. Respondent bank extrajudicially foreclosed the mortgage. The spouses, now solely
represented by Primitiva, refused to vacate the property, prompting the bank to seek relief from
the Regional Trial Court in Malolos City (RTC). The RTC issued a writ of possession in favor of
the bank, directing its sheriff to eject the spouses. The next month, by virtue of the writ, the bank
was placed in possession of the property.
Herein petitioners, the spouses Avelina Rivera--Nolasco and Eduardo Nolasco (petitioner
spouses), filed a Complaint before the DARAB denominated as "For: Maintenance and Peaceful
Possession of Landholding and Damages with Prayer for Temporary Restraining Order and/or Writ
of Preliminary Injunction". Respondent bank argues that the DARAB and/or PARAD had no
jurisdiction over the complaint as petitioner spouses were not tenants at the property. Spouses
Nolasco assailed the decision of the CA finding that they are not tenants of the land, 1/8 of which
they own, and affirming the RTC’s decision granting respondent bank writ of possession.
ISSUE:
Does PARAD have jurisdiction over the subject complaint?
RULING:
Yes, PARAD has jurisdiction over the complaint filed by petitioner spouses.
The controversy raised squarely falls under that class of cases described under Paragraph
1.1, Section 1, Rule II of the 2003 DARAB Rules of Procedure. Petitioner spouses assert that they
are tenants of agricultural land and pray that their tenancy be respected by respondent bank. What
results is an agrarian dispute, a controversy over which the PARAD has jurisdiction. An agrarian
dispute is any controversy relating to, among others, tenancy over lands devoted to agriculture. In
this regard, the specific elements of tenancy are sufficiently averred in the subject complaint, these
being: first, that the parties are the landowner and the tenant or agricultural lessee; second, that
the subject matter of the relationship is an agricultural land; third, that there is consent between
the parties to the relationship; fourth, that the purpose of the relationship is to bring about
agricultural production; fifth, that there is personal cultivation on the part of the tenant or agricultural
lessee; and sixth, that the harvest is shared between the landowner and the tenant or agricultural
lessee.
Given the averments of the subject complaint, the PARAD already obtained a jurisdictional
foothold in this case.
Hence, it could take on all the issues of the case, including the defenses raised by
respondent bank. The petitioner spouses are allowed to present their case in full, which must then
be decided on the merits.
142 | COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON LABOR LAW AND SOCIAL LEGISLATION
ALLOWANCES AND COMPENSATION OF GOVERNMENT EMPLOYEES ARE
CONSOLIDATED IN THE STANDARDIZED SALARY UNLESS EXCLUDED BY LAW
OR
DBM ISSUANCE
Metropolitan Waterworks and Sewerage System vs. Commission on Audit
G.R. No. 195105; November 21, 2017
Bersamin, J.
FACTS:
This is a petition for Certiorari assailing the decision of respondent Commission on Audit
(COA) affirming the disallowance of certain benefits received by the employees of petitioner
Metropolitan Waterworks and Sewerage System (MWSS) and ordering the MWSS officers
responsible for the approval and payment of the benefits to refund the total amount disallowed.
Prior to the passage of the Compensation and Position Classification Act of 1989 (RA No.
6758), the Board of Trustees of MWSS approved the grant of certain benefits to its employees.
These included the mid-year financial assistance; bigay-pala; meal/medical allowance; productivity
bonus; year-end financial assistance; longevity pay; and representation and transportation
allowance (RATA). Upon enactment of RA 6758, the auditor from COA of MWSS issued a Notice
of Disallowance (ND) of the benefits from January 2000 to November 2000. MWSS moved for
reconsideration. The COA Legal and Adjudication Officer (COA-LAO) modified the decision and
allowed the payment of some of the benefits.
MWSS contends that the COA committed grave abuse of discretion in issuing the NDs
inasmuch as the grant of the benefits by its Board of Trustees had legal bases, thus valid. In
contrast, COA insists that the mid-year and year-end financial assistance and the bigay-pala
anniversary bonus initially granted in 1987 were not among the benefits authorized under item 5
of Letter of Implementation and that said benefits had been granted pursuant to board resolutions
without the imprimatur of the Office of the President as required by Section 2 of PD No. 985.
ISSUE:
Was the disallowance of all the above mentioned benefits upon the enactment of RA 6758
proper?
RULING:
No, the disallowance of certain benefits was incorrectly done.
Section 12 of the RA No. 6758 states that all allowances except RATA, clothing and
laundry allowances, subsistence allowance for marine officers and crew on board government
vessels and hospital personnel, and such other additional compensation not otherwise specified
therein, as may be determined by the DBM, shall be deemed included in the standardized salary
rates therein prescribed. Moreover, although it was the policy intent of RA No. 6758 to standardize
salary rates among government personnel, Congress nonetheless saw the need for equity and
justice in adopting the policy of non-diminution of pay when it authorized incumbents as of July 1,
1989 to receive salaries and/or allowances over and above those authorized by RA 6758.
The disallowed benefits and allowances of petitioner, with the exception of the RATA and
the medical allowance, were not excluded by RA No. 6758 or any issuance of DBM. Moreover,
inasmuch as the MWSS did not substantiate the entitlement of its officers and employees to the
mid-year and year-end financial assistance as well as the bigay-pala anniversary bonus, said
benefits must be disallowed in full without any need to distinguish between employees hired before
or after July 1, 1989.
Hence, only the mid-year, year-end financial assistance, and bigay-pala anniversary bonus
should be disallowed.
| 143COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON LABOR LAW AND SOCIAL LEGISLATION
CONTRACT OF EMPLOYMENT IS EFFECTIVE ONLY BETWEEN THE PARTIES
Rolando De Roca vs. Eduardo C. Dabuyan, et. al.
G.R. No. 215281; March 5, 2018
Del Castillo, J.
FACTS:
This is a petition for review on Certiorari which seeks to set aside the decision of the CA
which held that there is an employer-employee relationship between the petitioner and private
respondents, and thus under the labor arbiter’s jurisdiction.
In 2012, private respondents Eduardo Dabuyan et al. filed a complaint for illegal dismissal
against RAF Mansion Hotel Old Management and New Management and Victoriano Ewayan then
later included petitioner Rolando De Roca. Despite service of summons, petitioner did not attend
the subsequent hearings prompting the labor arbiter to direct private respondents to submit their
position paper. Private respondents submitted their position paper and on the same day, petitioner
filed his motion to dismiss on the ground of lack of jurisdiction.
Petitioner alleged that while he was the owner of RAF Mansion Hotel, the same was leased
to Victoriano Ewayan, owner of Oceanic Tours and Travel Agency. Further, petitioner asserted
that Ewayan was the employer of private respondents, there was no employer-employee
relationship between him and private respondents, and hence, the labor arbiter had no jurisdiction.
On the other hand, respondents argue that since petitioner owned the building which was a hotel,
it follows that he is their employer and labor arbiter has jurisdiction over him. The LA that petitioner
is liable. Instead of filing an appeal, a tardy petition for annulment of judgment was filed. The CA,
in turn, ruled against the petitioner.
ISSUE:
Is there an employer-employee relationship despite petitioner being only the owner-lessor
of the building being leased to the Oceanic Tours and Travel Agency?
RULING:
No, there is no employer-employee relationship between the parties.
Article 1311 of the Civil Code provides that “Contracts take effect only between the parties,
their assigns and heirs, except in case where the rights and obligations arising from the contract
are not transmissible by their nature, or by stipulation or by provision of law.”
In the case at bar, the contract of employment between respondents, on the one hand, and
Oceanic Tours and Travel Agency and Ewayan on the other, is effective only between them; it
does not extend to petitioner, who is not a party thereto. His only role is as lessor of the premises
which Oceanic leased to operate as a hotel; he cannot be deemed as respondent's employer.
Therefore, there is no employer-employee relationship between petitioner and private
respondents. Consequently, the decision of the Labor Arbiter must be set aside for being grossly
erroneous and unjust and the same could not have acquired finality, contrary to what respondents
believe — as it creates no rights and imposes no duties. Any act performed pursuant to it and any
claim emanating from it does not have any legal effect.
144 | COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON LABOR LAW AND SOCIAL LEGISLATION
PRINCIPLE OF PATER FAMILIAS APPLIES ONLY WHEN THERE IS EMPLOYER
EMPLOYEE RELATIONSHIP
John E.R. Reyes and Merwin Joseph Reyes vs. Orico Doctolero, Romeo Avila, Grandeur
Security and Services Corporation, and Makati Cinema Square
G.R. No. 185597; August 2, 2017
Jardeleza, J.
FACTS:
This is a petition for review on Certiorari under Rule 45 challenging the CA’s decision which
affirmed the RTC’s decision dismissing the complaint against respondents Grandeur Security and
Services Corporation (Grandeur) and Makati Cinema Square (MCS). Co-respondents Orico
Doctolero and Romeo Avila were Grandeur’s security guards assigned in the MCS’ parking area.
The incident arose when John E.R. Reyes, driving a Toyota Tamaraw with co-petitioner
Merwin Joseph Reyes, approached the entrance of the basement parking of MCS. Doctolero
stopped John several times to give way to outgoing cars. A heated argument ensued which led to
Doctolero shooting John in his leg while Avila likewise shooting Merwin on the stomach.
In a complaint for damages, the RTC held Doctolero and Avila liable for the injuries, but
absolved Grandeur and MCS. Petitioners argued that Grandeur was negligent in the selection and
supervision of its employees. They likewise impleaded MCS on the ground that it was negligent in
getting Grandeur's services. For its part, Grandeur asserted that it exercised the required diligence
in the selection and supervision of its employees. MCS denied liability and contended that it cannot
be held liable for damages simply because of its ownership of the premises where the shooting
incident occurred.
ISSUE:
Are Grandeur and MCS liable for the injuries inflicted by the respondent guards?
RULING:
No. Grandeur and MCS are not liable.
As a general rule, one is only responsible for his own act or omission. The law, however,
provides for exceptions when it makes certain persons liable for the act or omission of another.
One exception is an employer who is made vicariously liable for the tort committed by his employee
under par. 5 of Art. 2180. Here, although the employer is not the actual tortfeasor, the law makes
him vicariously liable on the basis of the civil law principle of pater familias for failure to exercise
due care and vigilance over the acts of one's subordinates to prevent damage to another. However,
the above rule is applicable only if there is an employer-employee relationship.
With respect to MCS, the Court held that there was no employer-employee relationship
between MCS and respondent guards. The guards were merely assigned by Grandeur to secure
MCS' premises pursuant to their Contract of Guard Services. Thus, MCS cannot be held
vicariously liable for damages caused by the guard’s acts or omissions. Meanwhile, the said
principle applies to Grandeur, it being undisputed that respondent guards were its employees.
However, Grandeur’s standard operational procedures, showing the means by which Grandeur
conducts close and regular supervision over the security guards assigned to their various clients,
established that it exercised due diligence in the selection and supervision of its employees.
Accordingly, having successfully overcome the legal presumption of negligence, it is
relieved of liability from the negligent acts of its employees.