LAND BANK OF THE PHILIPPINES, PETITIONER, VS. FEDERICO SUNTAY, AS REPRESENTED BY HIS ASSIGNEE, JOSEFINA LUBRICA, RESPONDENT.

Land Bank of the Philippines versus Suntay

The Case

This is a petition for review on certiorari brought by the Land Bank of the Philippines against Federico Suntay, represented by his assignee Josefina Lubrica. The dispute is about just compensation for land taken under the agrarian reform program, and about who has the final say on that compensation. The case matters because it settles a conflict between two lines of Supreme Court rulings: one holding that the adjudicator's valuation becomes final if not questioned in time, and another holding that the Regional Trial Court, sitting as a Special Agrarian Court, has original and exclusive jurisdiction over just compensation. The Court resolves that conflict in favor of the courts.

Procedural History

The Regional Agrarian Reform Adjudicator, Conchita Miñas, rendered a decision fixing just compensation. Land Bank moved for reconsideration, which was denied. Land Bank then filed a petition for judicial determination of just compensation in the Regional Trial Court of San Jose, Occidental Mindoro, sitting as a Special Agrarian Court. Suntay moved to dismiss on the ground that the petition was filed beyond the fifteen-day period under the DARAB rules. The trial court granted the dismissal, and denied reconsideration. Land Bank's notice of appeal was denied due course, and reconsideration of that denial was likewise denied.

Land Bank went to the Court of Appeals by certiorari. The Court of Appeals initially granted the petition, but on Suntay's motion for reconsideration it reversed itself and dismissed the petition. Land Bank elevated the matter to the Supreme Court, which ruled in its favor, nullified the trial court's orders, and directed the trial court to determine just compensation. That decision became final and executory.

Meanwhile, the adjudicator had issued an alias writ of execution, and the sheriffs levied on Land Bank's shares and bonds. The Supreme Court issued a temporary restraining order and directed the parties to maintain the status quo, quashing all acts done under the alias writ. Later, Suntay moved to resume the interrupted execution, invoking a more recent Supreme Court decision. The adjudicator granted the motion ex parte and ordered the sheriffs to resume execution. Land Bank then filed a special civil action for certiorari in the Court of Appeals, which dismissed the petition as moot and academic. Hence this petition for review on certiorari before the Supreme Court.

Facts

Federico Suntay owned a large tract of land in Sablayan, Occidental Mindoro, with a total area of 3,682.0285 hectares. In 1972, the Department of Agrarian Reform expropriated 948.1911 hectares of it under Presidential Decree No. 27. Land Bank and the Department fixed the value of the expropriated portion at 4,497.50 pesos per hectare, for a total of 4,251,141.68 pesos. Suntay rejected the valuation and filed a petition for determination of just compensation with the Regional Agrarian Reform Adjudicator of Region IV.

After summary administrative proceedings, the adjudicator fixed the total just compensation at 157,541,951.30 pesos. Land Bank moved for reconsideration, which was denied. Land Bank then filed a petition for judicial determination of just compensation in the Regional Trial Court as a Special Agrarian Court, praying that the compensation be fixed at 4,251,141.67 pesos. The trial court dismissed the petition as filed out of time, treating it as an appeal from the adjudicator's decision.

The Supreme Court later ruled that the petition was not an appeal but an original action, and ordered the trial court to determine just compensation. While that case was pending, the adjudicator issued an alias writ of execution, and the sheriffs levied on Land Bank's shares and bonds. The Supreme Court restrained the execution and quashed all acts done under the writ. After the Court decided in Land Bank's favor, Suntay again moved to resume execution, citing a later decision. The adjudicator granted the motion ex parte, and the sheriffs served demands on the depository institutions. Land Bank challenged the order in the Court of Appeals, which dismissed the petition as moot. Land Bank then came to the Supreme Court.

Issues

• Whether or not the Regional Trial Court, sitting as a Special Agrarian Court, has original and exclusive jurisdiction to determine just compensation under the Comprehensive Agrarian Reform Law.
• Whether or not the adjudicator's decision on land valuation becomes final and executory after the lapse of the fifteen-day period, such that execution may proceed.
• Whether or not the Court of Appeals erred in dismissing Land Bank's petition for certiorari as moot and academic.

Applicable Provisions

Section 57 of Republic Act No. 6657 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. The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty days from submission of the case for decision.

This provision is the source of the trial court's original and exclusive jurisdiction over just compensation, which cannot be transferred to administrative adjudicators.

Section 50 of the same law provides:

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 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 provision must be read in harmony with Section 57, so that just compensation cases are excepted from the plenitude of power conferred on the Department of Agrarian Reform.

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

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

This rule cannot convert the trial court's original jurisdiction into appellate jurisdiction, and any effort to do so is void.

Ruling

On the first issue, the Court held that the Regional Trial Court, sitting as a Special Agrarian Court, has original and exclusive jurisdiction over all petitions for the determination of just compensation. Section 57 is explicit. The Department of Agrarian Reform is an administrative agency that cannot be granted jurisdiction over cases of eminent domain, because the valuation of property in eminent domain is essentially a judicial function. The Court quoted its earlier ruling:

It would subvert this original and exclusive jurisdiction of the RTC for the DAR to vest original jurisdiction in compensation cases in administrative officials and make the RTC an appellate court for the review of administrative decisions.

On the second issue, the Court held that the adjudicator's decision does not become final in the sense of barring judicial determination. What adjudicators are empowered to do is only to determine in a preliminary manner the reasonable compensation to be paid to landowners, leaving to the courts the ultimate power to decide this question. Any effort to transfer jurisdiction to the adjudicators and to convert the original jurisdiction of the trial court into appellate jurisdiction is void for being contrary to the law.

On the third issue, the Court held that the Court of Appeals erred in dismissing the petition as moot. The adjudicator's order resuming execution varied and altered a final and executory decision of the Supreme Court, and the petition properly raised grave abuse of discretion.

Doctrine

A Bar candidate must retain these rules. First, under Section 57 of Republic Act No. 6657, the Regional Trial Court, sitting as a Special Agrarian Court, has original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners. Second, the Department of Agrarian Reform Adjudication Board and its adjudicators have only the power to determine in a preliminary manner the reasonable compensation to be paid; the ultimate power to decide just compensation belongs to the courts. Third, any effort to transfer that original jurisdiction to administrative adjudicators, or to convert the trial court's original jurisdiction into appellate jurisdiction, is void. Fourth, the valuation of property in eminent domain is essentially a judicial function that cannot be vested in administrative agencies.

Disposition

The Supreme Court granted Land Bank's petition, reversed the Court of Appeals decision, and upheld the original and exclusive jurisdiction of the Special Agrarian Court to determine just compensation.

Remember This

Memorize this line: the adjudicator's valuation is only preliminary, and the Special Agrarian Court has original and exclusive jurisdiction to fix just compensation. Examiners use this case to test the conflict between the DARAB rules and Section 57 of the Comprehensive Agrarian Reform Law, and to test whether a party can be barred from going to court by the lapse of the fifteen-day period.