PHILIPPINE VETERANS BANK, PETITIONER, VS. THE HON. COURT OF APPEALS, HON. SECRETARY OF THE DEPT. OF AGRARIAN REFORM, DEPT. OF AGRARIAN REFORM ADJUDICATION BOARD, DAVAO CITY AND …

Philippine Veterans Bank versus Court of Appeals

The Case

This is a petition for review brought by Philippine Veterans Bank against the Court of Appeals, the Secretary of the Department of Agrarian Reform, the Department of Agrarian Reform Adjudication Board, and the Land Bank of the Philippines. The petitioner owned four parcels of land in Tagum, Davao, which the government took under the Comprehensive Agrarian Reform Program. Dissatisfied with the valuation fixed by the agrarian authorities, the bank went to court to ask for a judicial determination of just compensation. The case matters because it draws the dividing line between the administrative determination of just compensation by the Department of Agrarian Reform and the original and exclusive jurisdiction of the Regional Trial Courts sitting as Special Agrarian Courts, and it fixes the fifteen-day period within which a landowner must bring that challenge to court.

Procedural History

The bank filed its petition for judicial determination of just compensation with the Regional Trial Court of Tagum, Davao, Branch 2. The trial court dismissed the petition on the ground that it was filed beyond the fifteen-day reglementary period for appealing the orders of the Department of Agrarian Reform Adjudication Board. The bank appealed to the Court of Appeals, which affirmed the dismissal. It held that jurisdiction over land valuation cases is lodged in the Department of Agrarian Reform Adjudication Board, and that the landowner's right to seek judicial fixing of just compensation before the Special Agrarian Courts must be exercised within the period fixed in Rule XIII, Section 11 of the DARAB Rules of Procedure. The bank moved for reconsideration, but its motion was denied. Hence, this petition for review before the Supreme Court.

Facts

Philippine Veterans Bank owned four parcels of land in Tagum, Davao, covered by Transfer Certificates of Title. The lands were taken by the Department of Agrarian Reform for distribution to landless farmers pursuant to the Comprehensive Agrarian Reform Law, Republic Act Number 6657. The Land Bank of the Philippines and the Department of Agrarian Reform Adjudication Board made a valuation of the land.

The bank was dissatisfied with that valuation. On January 26, 1994, it filed a petition for a determination of the just compensation for its property with the Regional Trial Court of Tagum, Davao, Branch 2.

On February 23, 1995, the trial court dismissed the petition. It reasoned that the case was filed only on January 26, 1994, and that the fifteen-day period under Section 51 of Republic Act Number 6657, within which to appeal, had already lapsed. The Court of Appeals affirmed, and the matter reached the Supreme Court.

Issues

• Whether or not a petition for the judicial fixing of just compensation before a Special Agrarian Court must be filed within the period provided in Rule XIII, Section 11 of the DARAB Rules of Procedure, and before the decision of the Department of Agrarian Reform provincial adjudicator becomes final and executory.
• Whether or not the original and exclusive jurisdiction of the Regional Trial Courts over petitions for the determination of just compensation is transformed into appellate jurisdiction because the question is first passed upon by the Department of Agrarian Reform.

Applicable Provisions

Section 50 of Republic Act Number 6657, on the quasi-judicial power of the Department of Agrarian Reform, provides:

Section 50. Quasi-Judicial Power of the DAR. The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources.

This is the source of the Department's primary jurisdiction, which the Court reads as referring to administrative proceedings.

Section 57 of the same law, on special jurisdiction, provides:

Section 57. Special Jurisdiction. The Special Agrarian Courts 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. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts, unless modified by this Act.

This is the source of the courts' original and exclusive jurisdiction, which the Court reads as referring to judicial proceedings.

Section 51 of the same law, on the finality of determination, provides:

Section 51. Finality of Determination. Any case or controversy before it shall be decided within thirty days after it is submitted for resolution. Only one motion for reconsideration shall be allowed. Any order, ruling or decision shall be final after the lapse of fifteen days from receipt of a copy thereof.

This is the fifteen-day period the trial court relied on in dismissing the petition.

Rule XIII, Section 11 of the DARAB Rules of Procedure provides:

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 days from receipt of the notice thereof. Any party shall be entitled to only one motion for reconsideration.

This is the specific rule that fixes the fifteen-day period for bringing the matter directly to the Special Agrarian Courts.

Ruling

On the first issue, the Court held that the petition must indeed be filed within the fifteen-day period, and that the trial court correctly dismissed the case because the petition was filed beyond that period. The Court found no contradiction between Section 50, granting the Department primary jurisdiction, and Section 57, granting the Regional Trial Courts original and exclusive jurisdiction. The first refers to administrative proceedings, while the second refers to judicial proceedings. The Land Bank makes a preliminary determination of value; if the landowner rejects the offer, a summary administrative proceeding is held before the provincial, regional, or central adjudicator; and if the landowner finds the price unsatisfactory, he may bring the matter directly to the appropriate Regional Trial Court. Rule XIII, Section 11 implements this scheme.

On the second issue, the Court held that it is error to think that the original and exclusive jurisdiction of the courts is transformed into appellate jurisdiction because the Department first passes upon the question. Primary jurisdiction is vested in the Department to determine in a preliminary manner the reasonable compensation, but that determination is subject to challenge in the courts. The judicial proceedings are not a continuation of the administrative determination. As the Court put it, the law may even provide that the decision of the Department is final and unappealable, yet resort to the courts cannot be foreclosed, because courts are the guarantors of the legality of administrative action.

Doctrine

Three rules must be retained. First, the Department of Agrarian Reform has primary jurisdiction, in administrative proceedings, to make a preliminary determination of just compensation, while the Regional Trial Courts sitting as Special Agrarian Courts have original and exclusive jurisdiction, in judicial proceedings, over all petitions for the determination of just compensation. Second, the grant of original and exclusive jurisdiction to the courts is not converted into appellate jurisdiction merely because the Department first rules on the question; the judicial proceeding is not a continuation of the administrative one. Third, a landowner who disagrees with the adjudicator's valuation must bring the matter directly to the Special Agrarian Court within fifteen days from receipt of notice, under Rule XIII, Section 11 of the DARAB Rules of Procedure; otherwise the determination becomes final and the petition is dismissed.

Disposition

The Supreme Court affirmed the decision of the Court of Appeals, holding that the trial court correctly dismissed the petition for having been filed out of time.

Remember This

Memorize this line: the Department's determination of just compensation is preliminary and administrative, but the courts' jurisdiction is original and exclusive, and the landowner has only fifteen days to bring the challenge to the Special Agrarian Court. Examiners use this case to test the distinction between primary administrative jurisdiction and original and exclusive judicial jurisdiction, and the fifteen-day period under Rule XIII, Section 11 of the DARAB Rules of Procedure.