G.R. No.
164631 June
26, 2009
LAND BANK OF THE
PHILIPPINES, Petitioner,
vs.
RENE RALLA
BELISTA, Respondent.
DECISION
PERALTA, J.:
Before the Court is a petition for
review on certiorari under Rule 45
of the Rules of Court filed by Land
Bank of the Philippines (petitioner),
seeking to annul and set aside the
May 26, 2004 Decision1 and the
July 28, 2004 Resolution2 of the
1
Court of Appeals (CA) in CA-G.R. SP
No. 81096.
The antecedent facts and
proceedings, as narrated by the
CA, are as follows:
It appears that spouses Pablo Ralla
and Carmen Munoz Ralla had
donated their eight (8) parcels of
lot located in Ligao, Albay to their
daughter, Rene Ralla Belista, the
herein private respondent.
The eight (8) parcels of lot were
placed by the Department of
Agrarian Reform (DAR, for brevity)
under the coverage of the
Comprehensive Agrarian Reform
Program (Presidential Decree No.
27 and Executive Order No. 228).
2
Consequently, private respondent
claimed payment of just
compensation over said
agricultural lands.
It further appears that the DAR's
evaluation of the subject farms was
only ₱227,582.58, while petitioner
Land Bank of the Philippines (LBP,
for brevity) assessed the same at
₱317,259.31.
Believing that her lots were grossly
underestimated, private
respondent, on 11 November 2002,
filed a Petition for Valuation and
Payment of Just Compensation
against petitioning bank before the
DARAB-Regional Adjudicator for
Region V (RARAD-V) docketed as
DCN D-05-02-VC-005.
3
On 07 July 2003, the RARAD-V
issued a Decision, in favor of herein
private respondent, the fallo of
which reads:
Wherefore, just compensation for
the subject areas is hereby
preliminarily fixed at TWO MILLION
EIGHT HUNDRED NINETY-SIX
THOUSAND and FOUR HUNDRED
EIGHT & 91/100 (₱2,896,408.91)
PESOS. Land Bank of the
Philippines, Legaspi City, is hereby
ordered to pay herein petitioner
said amount pursuant to existing
rules and guidelines, minus the
sum already remitted per Order
dated January 2, 2003.
SO ORDERED.
4
As both parties interposed their
respective motions for
reconsideration, the RARAD-V
eventually issued an Order dated 8
October 2003, the decretal portion
of which reads:
Wherefore, the Decision dated July
7, 2003 is MODIFIED, fixing the
valuation claim of petitioner herein
with respect to her due share in the
above lots to the tune of Two
Million Five Hundred Forty
Thousand, Two Hundred Eleven and
58/100 (₱2,540,211.58) Pesos.
Land Bank Legaspi City is hereby
ordered to pay herein petitioner
said amount pursuant to existing
rules and guidelines, minus the
sum already paid per Order dated
January 2, 2003.
5
SO ORDERED.
Aggrieved, petitioner Bank, on 28
October 2003, filed an original
Petition for Determination of Just
Compensation at the same sala of
the RTC, docketed as Agrarian Case
No. 03-06.
The court a quo motu propio
dismissed the case when it issued
the herein first assailed Order
dated 12 November 2003 "for
failure to exhaust administrative
remedies and/or comply with
Sections 5, 6, and 7, Rule XIX, 2003
DARAB Rules of Procedure.
Petitioner LBP lodged a Motion for
Reconsideration arguing, inter alia,
"that the DARAB 2003 Rules of
6
Procedure does not apply to SAC
nor its precursor DARAB Case and
that the ground for dismissal of the
case is not among the instances
when a court may dismiss a case
on its motion."
As the court a quo denied its
Motion for Reconsideration in an
Order dated 28 November 2003,
petitioner LBP elevated the case
before the Tribunal through the
present Petition for Review,
theorizing:
I. WHETHER OR NOT THE SAC A
QUO ERRED IN DISMISSING THE
CASE MOTU PROPIO ON THE
GROUND OF PLAINTIFF'S FAILURE
TO EXHAUST ADMINISTRATIVE
REMEDIES.
7
II. WHETHER OR NOT SECTIONS 5,
6, AND 7, RULE XIX OF THE DARAB
2003 RULES OF PROCEDURE APPLY
TO CASES FILED AND PENDING
BEFORE THE DARAB OR ITS
ADJUDICATORS PRIOR TO ITS
EFFECTIVITY AND TO CASES FILED
AND PENDING WITH THE SPECIAL
AGRARIAN COURTS.3
On May 26, 2004, the CA rendered
its assailed Decision dismissing the
petition.
The CA ruled that under Section 5,
Rule XIX of the 2003 DARAB Rules
of Procedure, an appeal from the
adjudicator's resolution shall be
filed before the DARAB and not
before the RTC; that
petitioner's filing of the case
8
before the RTC without first
seeking the intervention of the
DARAB is violative of the
doctrine of non-exhaustion of
administrative remedies. The
CA found that petitioner's petition
for determination of just
compensation was filed in the RTC
on October 28, 2003 when the
2003 DARAB Rules of Procedure
was already in effect, i.e., on
February 8, 2003, and under its
transitory provision, it is provided
that the 2003 Rules shall govern all
cases filed on or after its
effectivity; and, since an appeal
from the adjudicator's resolution
should first be filed with the
DARAB, the RTC, sitting as a Special
Agrarian Court (SAC), did not err in
dismissing petitioner's petition.
9
Petitioner filed a motion for
reconsideration, which was denied
in a Resolution dated July 28, 2004.
Petitioner is now before the
Court raising the following
arguments:
1. THE COURT OF APPEALS ERRED
IN LAW IN DISMISSING THE
PETITION FOR REVIEW
CONSIDERING THAT THE LBP DID
NOT VIOLATE THE "DOCTRINE OF
NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES" WHEN
IT FILED THE ORIGINAL PETITION
FOR DETERMINATION OF JUST
COMPENSATION BEFORE THE
COURT A QUO WITHOUT FIRST
SEEKING THE INTERVENTION OF
THE DARAB.
10
2. THE COURT OF APPEALS ERRED
IN DECLARING THAT THE
APPLICABLE RULE IS THE 2003
DARAB RULES OF PROCEDURE,
DESPITE THE FACT THAT THE
PETITION (FOR VALUATION AND
PAYMENT OF JUST COMPENSATION)
WAS FILED BEFORE THE RARAD ON
NOVEMBER 11, 2002.4
Petitioner contends that the
petition for valuation and payment
of just compensation was filed with
the DARAB- Regional Adjudicator
for Region V (RARAD) on November
11, 2002, long before the
effectivity of the 2003 Rules of
Procedure; that under the
transitory provision of the 2003
DARAB Rules, all cases pending
with the Board and the adjudicators
11
prior to the date of the Rules'
effectivity shall be governed by the
DARAB Rules prevailing at the time
of their filing; that clear from the
transitory provision that it is the
proceeding of the DARAB which is
governed by the 2003 DARAB Rules
of Procedure, thus, it is the date of
filing of the petition with the
DARAB or any of its adjudicators
which is the reckoning date of the
applicability of the 2003 DARAB
Rules and not the date of filing with
the SAC; that under the 1994
DARAB Rules prevailing at the time
of the filing of the respondent's
claim for just compensation, the
Rules provided that the decision of
the adjudicator on land valuation
and preliminary determination of
just compensation shall not be
12
appealable to the Board, but shall
be brought directly to the RTC; that
it was in the observance of the
1994 DARAB Rules that petitioner
brought the adjudicator's decision
to the RTC sitting as SAC.
In his Comment, respondent claims
that petitioner's petition with the
RTC is an original action and, since
the case was filed at a time when
appeal to the DARAB Central Office
was already provided in the 2003
DARAB Rules before resorting to
judicial action, the RTC correctly
dismissed the petition, which was
correctly affirmed by the CA.
Petitioner filed a Reply reiterating
its arguments in the petition.
13
The issue for resolution is
whether it is necessary that in
cases involving claims for just
compensation under Republic
Act (RA) No. 6657 that the
decision of the Adjudicator
must first be appealed to the
DARAB before a party can
resort to the RTC sitting as
SAC.
The court rules in the negative.
Sections 50 and 57 of RA No. 6657
provide:
Section 50. Quasi-judicial Powers of
the DAR. – The DAR is hereby
vested with primary jurisdiction to
determine and adjudicate agrarian
reform matters and shall have
14
exclusive original jurisdiction over
all matters involving the
implementation of agrarian reform,
except those falling under the
exclusive jurisdiction of the
Department of Agriculture (DA) and
the Department of Environment
and Natural Resources (DENR) x x x
Section 57. Special Jurisdiction.
– The Special Agrarian Court
shall have original and
exclusive jurisdiction over all
petitions for the determination
of just compensation to
landowners, and the
prosecution of all criminal
offenses under this Act. x x x
The Special Agrarian Courts shall
decide all appropriate cases under
15
their special jurisdiction within
thirty (30) days from submission of
the case for decision.
Clearly, under Section 50, DAR has
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 DA and the
DENR. Further exception to the
DAR's original and exclusive
jurisdiction are all petitions for the
determination of just compensation
to landowners and the prosecution
of all criminal offenses under RA
No. 6657, which are within the
jurisdiction of the RTC sitting as a
16
Special Agrarian Court. Thus,
jurisdiction on just
compensation cases for the
taking of lands under RA No.
6657 is vested in the courts.
In Republic v. CA,5 the Court
explained:
Thus, Special Agrarian Courts,
which are Regional Trial Courts, are
given original and exclusive
jurisdiction over two categories of
cases, to wit: (1) "all petitions for
the determination of just
compensation to landowners" and
(2) "the prosecution of all criminal
offenses under [R.A. No. 6657]."
The provisions of §50 must be
construed in harmony with this
provision by considering cases
17
involving the determination of just
compensation and criminal cases
for violations of R.A. No. 6657 as
excepted from the plenitude of
power conferred on the DAR.
Indeed, there is a reason for this
distinction. The DAR is an
administrative agency which
cannot be granted jurisdiction over
cases of eminent domain (for such
are takings under R.A. No. 6657)
and over criminal cases. Thus, in
EPZA v. Dulay and Sumulong v.
Guerrero - we held that the
valuation of property in eminent
domain is essentially a judicial
function which cannot be vested in
administrative agencies, while in
Scoty’s Department Store v.
Micaller, we struck down a law
granting the then Court of
18
Industrial Relations jurisdiction to
try criminal cases for violations of
the Industrial Peace Act.6
In a number of cases, the Court has
upheld the original and exclusive
jurisdiction of the RTC, sitting as
SAC, over all petitions for
determination of just compensation
to landowners in accordance with
Section 57 of RA No. 6657.
In Land Bank of the Philippines v.
Wycoco,7 the Court upheld the
RTC's jurisdiction over Wycoco's
petition for determination of just
compensation even where no
summary administrative
proceedings was held before the
DARAB which has primary
19
jurisdiction over the determination
of land valuation. The Court held:
In Land Bank of the Philippines v.
Court of Appeals, the landowner
filed an action for determination of
just compensation without waiting
for the completion of DARAB’s re-
evaluation of the land. This,
notwithstanding, the Court held
that the trial court properly
acquired jurisdiction because of its
exclusive and original jurisdiction
over determination of just
compensation, thus –
… 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
20
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.
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
21
and, therefore, would be void.
Thus, direct resort to the SAC
[Special Agrarian Court] by
private respondent is valid.
In the case at bar, therefore, the
trial court properly acquired
jurisdiction over Wycoco’s
complaint for determination of just
compensation. It must be stressed
that although no summary
administrative proceeding was held
before the DARAB, LBP was able to
perform its legal mandate of
initially determining the value of
Wycoco's land pursuant to
Executive Order No. 405, Series of
1990.8 x x x
In Land Bank of the Philippines v.
Natividad,9 wherein Land Bank
22
questioned the alleged failure of
private respondents to seek
reconsideration of the DAR's
valuation, but instead filed a
petition to fix just compensation
with the RTC, the Court said:
At any rate, in Philippine Veterans
Bank v. CA, we held that there is
nothing contradictory between the
DAR’s primary jurisdiction to
determine and adjudicate agrarian
reform matters and exclusive
original jurisdiction over all matters
involving the implementation of
agrarian reform, which includes the
determination of questions of just
compensation, and the original and
exclusive jurisdiction of regional
trial courts over all petitions for the
determination of just
23
compensation. The first refers to
administrative proceedings, while
the second refers to judicial
proceedings.
In accordance with settled
principles of administrative law,
primary jurisdiction is vested in the
DAR to determine in a preliminary
manner the just compensation for
the lands taken under the agrarian
reform program, but such
determination is subject to
challenge before the courts. The
resolution of just compensation
cases for the taking of lands under
agrarian reform is, after all,
essentially a judicial function.
Thus, the trial court did not err in
taking cognizance of the case as
24
the determination of just
compensation is a function
addressed to the courts of justice.10
In Land Bank of the Philippines v.
Celada,11 where the issue was
whether the SAC erred in assuming
jurisdiction over respondent's
petition for determination of just
compensation despite the
pendency of the administrative
proceedings before the DARAB, the
Court stated that:
It would be well to emphasize that
the taking of property under RA No.
6657 is an exercise of the power of
eminent domain by the State. The
valuation of property or
determination of just compensation
in eminent domain proceedings is
25
essentially a judicial function which
is vested with the courts and not
with administrative agencies.
Consequently, the SAC properly
took cognizance of respondent's
petition for determination of just
compensation.12
The RTC dismissed petitioner's
petition for determination of just
compensation relying on Sections
5, 6 and 7 of Article XIX of the 2003
DARAB Rules of Procedure, to wit:
Section 5. Appeal. A party who
disagrees with the resolution of the
Adjudicator may bring the matter
to the Board by filing with the
Adjudicator concerned a Notice of
Appeal within fifteen (15) days
from receipt of the resolution. The
26
filing of a Motion for
Reconsideration of said resolution
shall interrupt the period herein
fixed. If the motion is denied, the
aggrieved party may file the appeal
within the remaining period, but in
no case shall it be less than five (5)
days.
Section 6. When Resolution
Deemed Final. Failure on the part of
the aggrieved party to contest the
resolution of the Adjudicator within
the aforecited reglementary period
provided shall be deemed a
concurrence by such party with the
land valuation, hence said
valuation shall become final and
executory.
27
Section 7. Filing of Original Action
with the Special Agrarian Court for
Final Determination. The party who
disagrees with the decision of the
Board may contest the same by
filing an original action with the
Special Agrarian Court (SAC)
having jurisdiction over the subject
property within fifteen (15) days
from his receipt of the Board's
decision.
Notably, the above-mentioned
provisions deviated from Section
11, Rule XIII of the 1994 DARAB
Rules of Procedure which provides:
Section 11. Land Valuation and
Preliminary Determination and
Payment of Just Compensation –
The decision of the Adjudicator on
28
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.
where DARAB acknowledges that
the decision of just compensation
cases for the taking of lands under
RA 6657 is a power vested in the
courts.13 Although Section 5, Rule
XIX of the 2003 DARAB Rules of
Procedure provides that the land
valuation cases decided by the
adjudicator are now appealable to
29
the Board, such rule could not
change the clear import of Section
57 of RA No. 6657 that the original
and exclusive jurisdiction to
determine just compensation is in
the RTC. Thus, Section 57
authorizes direct resort to the SAC
in cases involving petitions for the
determination of just
compensation.14 In accordance
with the said Section 57,
petitioner properly filed the
petition before the RTC and,
hence, the RTC erred in
dismissing the case.
Jurisdiction over the subject
matter is conferred by
law.15 Only a statute can confer
jurisdiction on courts and
administrative agencies while
rules of procedure cannot.16
30
WHEREFORE, the petition for
review on certiorari is GRANTED.
The Decision dated May 26, 2004
and the Resolution dated July 28,
2004, of the Court of Appeals in
CA-G.R. SP No. 81096, are
REVERSED and SET ASIDE. The
Regional Trial Court, Branch 3,
Legaspi City, sitting as Special
Agrarian Court, is directed to hear
without delay petitioner's petition
for the determination of just
compensation. SO ORDERED.
31
