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[G.R. No. 132767.

January 18, 2000]


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 LAND BANK OF
THE PHILIPPINES, respondents.
DECISION
MENDOZA, J.:
This is a petition for review of the decision of the Court of
Appeals,[1] dated August 28, 1997, affirming the dismissal by
the Regional Trial Court, Branch 2, Tagum, Davao, of the
petition for judicial determination of the just compensation filed
by petitioner for the taking of its property under the
Comprehensive Agrarian Reform Program.
The facts are as follows:
Petitioner Philippine Veterans Bank owned four parcels of land
in Tagum, Davao, which are covered by Transfer Certificates of
Title Nos. T-38666, T-38667, T-6236, and T-27591. The lands
were taken by the Department of Agrarian Reform for
distribution to landless farmers pursuant to the Comprehensive
Agrarian Reform Law (R.A. No. 6657). Dissatisfied with the
valuation of the land made by respondents Land Bank of the
Philippines and the Department of Agrarian Reform
Adjudication Board (DARAB), petitioner filed a petition for a
determination of the just compensation for its property. The
petition was filed on January 26, 1994 with the Regional Trial
Court, Branch 2, Tagum, Davao, which on February 23, 1995,
dismissed the petition on the ground that it was filed beyond
the 15-day reglementary period for filing appeals from the
orders of the DARAB. Its order[2] states in pertinent parts:
Since this case was filed only on January 26, 1994, the fifteenday period provided for under Section 51 of Republic Act 6657
which is the Comprehensive Agrarian Reform Law within which
to appeal, already lapsed.
Section 51 of Republic Act No. 6657 provides:
Section 51. Finality of Determination. - Any case or controversy
before it (DAR) shall be decided within thirty (30) days after it is
submitted for resolution. Only one (1) motion for
reconsideration shall be allowed. Any order, ruling or decision
shall be final after the lapse of fifteen (15) days from receipt of
a copy thereof.
On appeal to the Court of Appeals, the decision was affirmed.
It was held that:
Jurisdiction over land valuation cases is lodged in the
Department of Agrarian Reform Adjudication Board, as is
plainly provided under Rule II of the DARAB Revised Rules of
Procedure. Jksm
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, 229,
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 the
following:
....
b) The valuation of land, and determination and payment of
just compensation, fixing and collection of lease rentals,
disturbance compensation, amortization payments, and similar
disputes concerning the functions of the Land Bank of the
Philippines.
....
The above provision does not negate the original and exclusive
jurisdiction vested in Special Agrarian Court over all petitions
for the determination of just compensation to landowners as
provided in Section 51 of R.A. 6657.

Note, however, must be taken of Rule XIII, Section 11 of the


DARAB Rules of Procedure, which specifically states that,
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 Court 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 pursuance thereof, it is clear that the right of a landowner
who disagrees with the valuation fixed by the DAR to file a
petition for the judicial fixing of just compensation before
special agrarian courts must be exercised within the period
provided in Rule XIII, Section 11.
In this case, appellant neither gives information regarding the
date of its receipt of the questioned Order of the DAR
Provincial Adjudicator, nor disputes the conclusion made by the
trial court that, "(s)ince this case was filed only on January 26,
1994, the fifteen-day period provided for under Section 51 of
Republic Act 6657 which is the Comprehensive Agrarian
Reform Law within which to appeal already lapsed". The court
a quos conclusion therefore stands. It did not commit an error
in dismissing the petition filed by Philippine Veterans Bank for
having been filed out of time.[3] Esmsc
Petitioner filed a motion for reconsideration, but its motion was
likewise denied. Hence, this petition for review. Petitioner
raises the following issue:
SHOULD A PETITION FOR THE JUDICIAL FIXING OF JUST
COMPENSATION BEFORE SPECIAL AGRARIAN COURT BE
[FILED] WITHIN THE PERIOD PROVIDED IN RULE XIII,
SECTION 11 OF THE DARAB RULES OF PROCEDURE AND
BEFORE THE DECISION OF THE DAR PROVINCIAL
ADJUDICATOR BECOMES FINAL AND EXECUTORY?
Petitioner argues that DAR adjudicators have no jurisdiction to
determine the just compensation for the taking of lands under
the Comprehensive Agrarian Reform Program, because such
jurisdiction is vested in Regional Trial Courts designated as
Special Agrarian Courts and, therefore, a petition for the fixing
of just compensation can be filed beyond the 15-day period of
appeal provided from the decision of the DAR adjudicator.
On the other hand, respondents argue that actions for the
fixing of just compensation must be filed in the appropriate
courts within 15 days from receipt of the decision of the DAR
adjudicator, otherwise such decision becomes final and
executory, pursuant to 51 of R.A. No. 6657.
Petitioners contention has no merit.
The pertinent provisions of R.A. No. 6657 provides:
Sec. 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 (DA)
and the Department of Environment and Natural Resources
(DENR) . . . .
Sec. 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 (30) days from
submission of the case for decision. Esmmis
There is nothing contradictory between the provision of 50
granting the DAR 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 provision of 57 granting
Regional Trial Courts "original and exclusive jurisdiction" over
(1) all petitions for the determination of just compensation to
landowner, and (2) prosecutions of criminal offenses under
- versus R.A. No. 6657.[4] The first refers to administrative proceedings,
while the second refers to judicial proceedings. Under R.A. No.
6657, the Land Bank of the Philippines is charged with the
preliminary determination of the value of lands placed under
land reform program and the compensation to be paid for their
RAYMUNDA MARTINEZ,
taking. It initiates the acquisition of agricultural lands by
Respondent.
notifying the landowner of the governments intention to
acquire his land and the valuation of the same as determined
x--------------------------------------------------------------------------------by the Land Bank.[5] Within 30 days from receipt of notice, the
---x
landowner shall inform the DAR of his acceptance or rejection
of the offer.[6] In the event the landowner rejects the offer, a
summary administrative proceeding is held by the provincial
DECISION
(PARAD), the regional (RARAD) or the central (DARAB)
adjudicator, as the case may be, depending on the value of the
NACHURA, J.:
land, for the purpose of determining the compensation for the
land. The landowner, the Land Bank, and other interested
parties are then required to submit evidence as to the just
compensation for the land. The DAR adjudicator decides the
case within 30 days after it is submitted for decision.[7] If the
Before the Court is a petition for review
landowner finds the price unsatisfactory, he may bring the
on certiorari under Rule 45 of the Rules of Court assailing the
matter directly to the appropriate Regional Trial Court.[8]
September 28, 2004 Resolution[1] of the Court of Appeals (CA)
To implement the provisions of R.A. No. 6657, particularly 50
in
CA-G.R.
SP
No.
83276
and
the July
15,
thereof, Rule XIII, 11 of the DARAB Rules of Procedure
2005 resolution[2] denying the motion for reconsideration
provides:
thereof.
Land Valuation and Preliminary Determination and Payment of
Just Compensation. - The decision of the Adjudicator on land
Undisputed are the following antecedent facts:
valuation and preliminary determination and payment of just
compensation shall not be appealable to the Board but shall be
After compulsory acquisition by the Department of
brought directly to the Regional Trial Courts designated as
Agrarian Reform (DAR), on November 16, 1993, of respondent
Special Agrarian Courts within fifteen (15) days from receipt of
Martinezs 62.5369-hectare land in Barangay Agpudlos, San
the notice thereof. Any party shall be entitled to only one
Andres, Romblon, pursuant to Republic Act No. 6657, or the
motion for reconsideration. Chief
Comprehensive Agrarian Reform Law of 1988 (CARL),
As we held in Republic v. Court of Appeals,[9] this rule is an
petitioner
Land
Bank
of
the
Philippines
(LBP)
acknowledgment by the DARAB that the power to decide just
offered P1,955,485.60 as just compensation.[3] Convinced that
compensation cases for the taking of lands under R.A. No.
the proffered amount was unjust and confiscatory, respondent
6657 is vested in the courts. It is error to think that, because of
rejected it. Thus, the Department of Agrarian Reform
Rule XIII, 11, the original and exclusive jurisdiction given to
Adjudication Board (DARAB), through its Provincial Agrarian
the courts to decide petitions for determination of just
Reform
Adjudicator
(PARAD)
conducted
summary
compensation has thereby been transformed into an appellate
administrative proceedings for the preliminary determination of
jurisdiction. It only means that, in accordance with settled
just compensation in accordance with Section 16 (d) of the
principles of administrative law, primary jurisdiction is vested in
CARL.
the DAR as an administrative agency to determine in a
preliminary manner the reasonable compensation to be paid
On September 4, 2002, PARAD Virgilio M. Sorita, finding
for the lands taken under the Comprehensive Agrarian Reform
some marked inconsistencies in the figures and factors made
Program, but such determination is subject to challenge in the
as bases by LBP in its computation, rendered judgment as
courts.
follows:
The jurisdiction of the Regional Trial Courts is not any less
"original and exclusive" because the question is first passed
WHEREFORE, in view of the foregoing, judgment is hereby
upon by the DAR, as the judicial proceedings are not a
rendered:
continuation of the administrative determination. For that
matter, the law may provide that the decision of the DAR is
Ordering the Land Bank of the Philippines to pay landownerfinal and unappealable. Nevertheless, resort to the courts
protestant RAYMUNDA MARTINEZ for her property covered
cannot be foreclosed on the theory that courts are the
and embraced by TCT No. T-712 with an area of 62.5369
guarantors of the legality of administrative action.[10]
hectares, more or less, which the Department of Agrarian
Accordingly, as the petition in the Regional Trial Court was filed
Reform intends to acquire, the total amount of TWELVE
beyond the 15-day period provided in Rule XIII, 11 of the
MILLION ONE HUNDRED SEVENTY NINE THOUSAND
Rules of Procedure of the DARAB, the trial court correctly
FOUR HUNDRED NINETY TWO and 50/100 Pesos
dismissed the case and the Court of Appeals correctly affirmed
(Php12,179,492.50), in the manner provided for by law.
the order of dismissal.
WHEREFORE, the decision of the Court of Appeals is
SO ORDERED.[4]
AFFIRMED.
SO ORDERED.
LAND BANK OF THE PHILIPPINES,
G.R. No.
A 169008
petition for the fixing of just compensation [5] docketed as
Petitioner,
Agrarian Case No. 696 was then filed by LBPs counsel before

Presen

YNARE
Chair
AUSTR
CHICO
NACHU

Promul

August

the Special Agrarian Court (SAC), the Regional Trial Court of


Odiongan, Romblon, Branch 82. After filing her answer to the
said petition,[6] respondent, contending that the orders, rulings
and decisions of the DARAB become final after the lapse of 15
days from their receipt, moved for the dismissal of the petition
for being filed out of time.[7] Petitioner opposed the motion.[8]
Meanwhile, respondent, still asserting the finality of PARAD
Soritas decision, filed before the Office of the PARAD a motion
for the issuance of a writ of execution, which was eventually
granted on November 11, 2003.[9] Ascertaining that the petition
before the SAC was filed by LBP 26 days after it received a
copy of PARAD Soritas decision, the Office of the PARAD
denied LBPs motion for reconsideration and ordered the
issuance of a writ of execution on February 23, 2004.
[10]
Aggrieved by these developments, LBP, on March 12, 2004,
moved to quash the said February 23, 2004 PARAD resolution.
[11]

On April 6, 2004, even as the motion to quash was yet


unresolved, LBP instituted a petition for certiorari[12] before the
CA, which was docketed as CA-G.R. SP No. 83276, assailing
both the November 11, 2003 and the February 23, 2004
PARAD resolutions. LBP primarily contended that the Office of
the PARAD gravely abused its discretion when it issued the
writ of execution despite the pendency with the SAC of a
petition for the fixing of just compensation.
The CA, finding LBP guilty of forum-shopping for not disclosing
the pendency of the Motion to Quash dated March 12, 2004,
dismissed the petition on September 28, 2004,[13] thus:
ACCORDINGLY, the
DISMISSED outright.

present

petition

for

certiorari

is

Consequently, in view of the dismissal of the above-entitled


case, we are no longer in a position to act on the private
respondents motion for execution pending appeal.
Further, this Court, mindful that under Sec. 5, Rule 7, of the
1997 Rules of Civil Procedure, willful and deliberate forumshopping constitutes direct contempt of court and cause for
administrative sanctions, which may both be resolved and
imposed in the same case where the forum shopping is found,
WARNS the counsel of record of the petitioner that a repetition
of a similar act of submitting a false certification shall be dealt
with most severely.
SO ORDERED.[14]
Not persuaded by LBPs motion for reconsideration, the
appellate court denied the same on July 15, 2005.[15] Thus,
LBP, through its legal department, elevated the case to this
Court on September 9, 2005 via a petition for review
on certiorari[16] under Rule 45, contending, among others, that it
did not commit deliberate forum shopping for what it filed with
the Office of the PARAD was a motion to quash, which is not
an initiatory pleading, and that the decision of the PARAD
cannot be executed due to the pending petition for fixing of just
compensation with the SAC.
On September 14, 2005, we issued a temporary restraining
order (TRO) restraining the appellate court and the DAR
adjudicators from implementing the November 11, 2003 and
the February 23, 2004 resolutions.[17]
For her part, respondent contends that petitioner committed
forum-shopping when it filed a certiorari petition without first

awaiting the resolution by the Office of the PARAD of the


motion to quash;[18] and that petitioner has lost its standing to
sue considering that it is being represented by its lawyers and
not the Office of the Government Corporate Counsel (OGCC).
[19]

On the basis of these antecedents, the Court shall now


resolve seriatim the following issues: (1) whether or not
petitioner may file the instant appeal solely through its legal
department; (2) whether or not petitioner has committed forum
shopping; and (3) whether or not the PARAD, in this case,
gravely abused its discretion when it issued a writ of execution
despite the pendency of LBPs petition for fixing of just
compensation with the SAC.
After meticulously reviewing the records and considering the
arguments of the parties, the Court finds the appeal devoid of
merit.
In Land Bank of the Philippines v. Teresita Panlilio-Luciano,
[20]
the Court explained in one of its resolutions that nothing in
the LBP charter expressly authorizes the LBP Legal
Department to appear in behalf of LBP in any court or quasijudicial proceeding and that the Administrative Code of 1987
mandates the OGCC, not the LBP Legal Department, to act as
the principal law office of the LBP, thus:
There is nothing in the LBP charter that expressly authorizes
the said Legal Department to appear in behalf of LBP in any
court or quasi-judicial proceeding. Attys. Beramo and Berbao
insist that the creation of the LBP Legal Department
necessarily entails conferment of the power to represent [LBP]
in any and all cases and consequently confers the power to
exercise such incidental powers or perform such acts as are
necessary to make the conferred power effective. At first
blush, this is not an unreasonable position; yet, we are
precluded from adopting the same, owing to the explicit
proviso in Section 10, Book IV, Title III, Chapter 3 of the
Administrative Code of 1987, which reads:
Section 10. Office of the Government Corporate Counsel.
The Office of the Government Corporate Counsel (OGCC)
shall act as the principal law office of all government-owned or
controlled corporations, their subsidiaries, other corporate
offsprings and government acquired asset corporations and
shall exercise control and supervision over all legal
departments or divisions maintained separately and such
powers and functions as are now or may hereafter be provided
by law. In the exercise of such control and supervision, the
Government Corporate Counsel shall promulgate rules and
regulations to effectively implement the objectives of the Office.
The OGCC is authorized to receive the attorney's fees
adjudged in favor of their client government-owned or
controlled corporations, their subsidiaries/other corporate
offsprings and government acquired asset corporations. These
attorney's fees shall accrue to a Special fund of the OGCC,
and shall be deposited in an authorized government depository
as trust liability and shall be made available for expenditure
without the need for a Cash Disbursement Ceiling, for
purposes of upgrading facilities and equipment, granting of
employee's incentive pay and other benefits, and defraying
such other incentive expenses not provided for in the General
Appropriations Act as may be determined by the Government
Corporate Counsel. (Emphasis supplied.)
The above provision mandates the OGCC, and not the LBP
Legal Department, as the principal law office of the LBP.
Moreover, it establishes the proper hierarchical order in that
the LBP Legal Department remains under the control and

supervision of the OGCC. Indeed, if we were to accede to the


position of Attys. Beramo and Berbao that the mere
constitution of an LBP Legal Department ipso facto confers
upon it the capacity to litigate cases in behalf of LBP in any
legal proceeding, then the role of the OGCC as the principal
law office of all GOCCs would be rendered nugatory in all
GOCCs with Legal Departments.
At the same time, the existence of the OGCC does not render
the LBP Legal Department a superfluity. We do not doubt that
the LBP Legal Department carries out vital legal services to
LBP. However, the performance of such functions cannot
deprive the OGCCs role as overseer of the LBP Legal
Department and its mandate of exercising control and
supervision over all GOCC legal departments. For the purpose
of filing petitions and making submissions before this Court,
such control and supervision imply express participation by the
OGCC as principal legal counsel of LBP. Our succeeding
disposition of the OGCCs pending Manifestation would delve
in detail the extent of the OGCCs required participation. But
suffice for now, Attys. Beramo and Berbao are in error when
they assert that the OGCCs participation in the present
petition is not required at all.
It should also be noted that the aforementioned Section 10,
Book IV, Title III, Chapter 3 of the Administrative Code of 1987
authorizes the OGCC to receive the attorney's fees adjudged
in favor of their client GOCCs, such fees accruing to a special
fund of the OGCC. Evidently, the non-participation of the
OGCC in litigations pursued by GOCCs would deprive the
former of its due funding as authorized by law. Hence, this is
another reason why we cannot sustain Attys. Beramo and
Berbao's position that the OGCC need not participate in
litigations pursued by LBP.
It may strike as disruptive to the flow of a GOCCs daily grind
to require the participation of the OGCC as its principal law
office, or the exercise of control and supervision by the OGCC
over the acts of the GOCCs legal departments. For reasons
such as proximity and comfort, the GOCC may find it
convenient to rely instead on its in-house legal departments, or
more irregularly, on private practitioners. Yet the statutory role
of the OGCC as principal law office of GOCCs is one of longstanding, and we have to recognize such function as part of
public policy. Since the jurisdiction of the OGCC includes all
GOCCs, its perspective is less myopic than that maintained by
a particular legal department of a GOCC. It is not
inconceivable that left to its own devices, the legal department
of a given GOCC may adopt a legal position inconsistent with
or detrimental to other GOCCs. Since GOCCs fall within the
same governmental framework, it would be detrimental to have
GOCCs foisted into adversarial positions by their respective
legal departments. Hence, there is indubitable wisdom in
having one overseer over all these legal departments which
would ensure that the legal positions adopted by the GOCCs
would not conflict with each other or the government.
Attys. Beramo and Berbao claim that the LBP Legal
Department had handled some cases which had been decided
by the Court and that the OGCC has never been involved in
the litigation and handling of LBPs appellate cases involving
specialized fields such as banking and agrarian reform. These
points should not be dismissed lightly, but then again, years of
wrong practice do not make a statutory right. The
Administrative Code of 1987, adopting a decades-old legal
precept, expressly provides that it is the OGCC that acts as
the principal law office of GOCCs and exercises control and
supervision over the legal departments of GOCCs. If the LBP
Legal Department has long operated as an independent

fiefdom absent any control, supervision, or even concern from


the OGCC, then this practice must end now. As to the pending
litigations of LBP which are [handled] exclusively by the LBP
Legal Department, it shall be the individual courts with
jurisdiction over those cases that shall decide how to proceed
next. We shall not, by reason of this Resolution, interfere with
the dispensation of those cases. Certainly, Section 10, Book
IV, Title III, Chapter 3 of the Administrative Code of 1987 can
be invoked by adverse parties or by the courts in citing as
deficient the exclusive representation of LBP by its Legal
Department. Then again, if neither the adverse parties nor the
courts of jurisdiction choose to contest this point, there would
be no impediment to the litigation to maintain.
Of course, if the principle that the OGCC is the principal law
office of GOCCs proves persistently inconvenient in practice, it
would be up to Congress to amend the Administrative Code, or
for the OGCC itself to promulgate rules and regulations that
would alleviate the problems in practice without abdicating its
legal mandate. The succeeding discussion on the OGCC's
pending Manifestation involves a review of the OGCC's current
practices, including the present rules and regulations.[21]
In the present controversy, we find nothing in the record which
shows that the OGCC has entered its appearance as the
principal legal counsel of petitioner LBP or that it has expressly
given its conformity to the LBP Legal Departments filing of the
instant petition. On this ground alone, the appeal must be
denied. Petitioner should have been more circumspect,
considering that the instant petition was filed on September 9,
2005, or several months after we issued the said resolution
in LBP v. Panlilio-Luciano. Further, respondent precisely raised
in her pleadings this issue of lack of authority to sue of
petitioners Law Department. Prudence, therefore, should have
impelled LBP to request its principal counsel, the OGCC, to
participate in the case. Up to this date, however, petitioner
remains insensitive to the import of its charter and the
Administrative Code as elucidated in our ruling. Certainly, we
cannot simply close our eyes to LBPs intransigence to and
disrespect for the rule of law.
Even if we allow the LBPs filing of the instant petition without
any authority from the OGCC, we must still deny the same for
we find no reversible error in the CAs ruling that LBP forum
shopped. In Repol v. Commission on Elections,[22] we found
forum shopping in the filing of a petition for certiorari during the
pendency of an omnibus motion to reconsider, set aside and
quash a writ of execution with the trial court. Likewise, in Go v.
Judge Abrogar,[23] we deemed as a violation of the rules
against forum shopping the institution of a separate action for
annulment of auction sale with injunction, simultaneous with a
third-party adverse claim and motion to quash writ of
execution, and a petition for certiorari, mandamus and
prohibition. Further, in La Campana Development Corporation
v. See,[24] we explained that the simultaneous filing of a motion
to quash writ of execution and an action for the annulment of a
judgment run afoul of the prohibition on forum shopping, thus:
In essence, forum shopping is the practice of litigants resorting
to two different fora for the purpose of obtaining the same
relief, to increase their chances of obtaining a favorable
judgment. In determining whether forum shopping exists, it is
important to consider the vexation caused to the courts and the
parties-litigants by a person who asks appellate courts and/or
administrative entities to rule on the same related causes
and/or to grant the same or substantially the same relief, in the
process creating the possibility of conflicting decisions by the
different courts or fora on the same issues. We have ruled that

forum shopping is present when, in two or more cases


pending, there is identity of (1) parties (2) rights or causes of
action and reliefs prayed for and (3) the identity of the two
preceding particulars is such that any judgment rendered in the
other action, will, regardless of which party is successful,
amount tores judicata in the action under consideration.
The parties in the two cases are indisputably identical. The
allegations of facts giving rise to respondents rights, such as
extrinsic fraud and lack of jurisdiction, are also essentially the
same, as are the reliefs prayed for. Finally, in the light of these
close similarities, res judicata may arise. Acting on the
documents filed with them, the RTC and the MeTC may well
come up with completely opposite rulings on the question of
whether or not the latter courts decision should be
implemented. This is the very evil that the proscription on
forum shopping seeks to avert. If they wanted to avoid this kind
of problem, respondents should not have filed what were
essentially the same documents with two different courts.[25]

Present:
-

QUISUMBING, J.,
versus
Chairperson,
CARPIO MORALES,
TINGA,
VELASCO, JR., and

BRION, JJ.,
HEIRS OF ELEUTERIO CRUZ,
Respondents.
Promulgated:
September 29, 2008
x
----------------------------------------------------------------------------------x
DECISION

Similarly, in this case, petitioner moved to quash the PARAD


resolutions and at the same time petitioned for their annulment
via certiorari under Rule 65. In both proceedings, the parties
are identical and the reliefs prayed for are the same. In the
two actions, petitioner also has a singular stance: the PARAD
resolutions should not be executed in view of the pendency of
the petition for fixing of just compensation with the SAC. Thus
a situation is created where the two fora could come up with
conflicting decisions. This is precisely the evil sought to be
avoided by the rule against forum-shopping.
Finally and most importantly, we find petitioner not entitled to
the grant of a writ of certiorari by the appellate court because
the Office of the PARAD did not gravely abuse its discretion
when it undertook to execute the September 4, 2002 decision.
Rule XIII, Section 11 of the DARAB Rules of Procedure,
[26]
which was then applicable, provides that:
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 v. Court of Appeals[27] and
in Department of Agrarian Reform Adjudication Board v.
Lubrica,[28] we explained the consequence of the said rule to
the effect that the adjudicators decision on land valuation
attains finality after the lapse of the 15-day period. Considering
therefore that, in this case, LBPs petition with the SAC for the
fixing of just compensation was filed 26 days after its receipt of
the PARADs decision, or eleven days beyond the
reglementary period, the latter had already attained finality. The
PARAD could very well issue the writ of execution.
WHEREFORE, premises considered, the appeal
is DENIED. The decision of the Court of Appeals in CA-G.R.
SP No. 83276 is AFFIRMED.

TINGA, J.:
This is a Petition for Review on Certiorari[1] under Rule
45 of the 1997 Rules of Civil Procedure, assailing the
Decision[2] and Resolution[3] of the Court of Appeals (CA) in CAG.R. SP No. 93207. The CA decision affirmed the decision of
the Regional Trial Court (RTC) of Tuguegarao City, Branch 1
sitting as a Special Agrarian Court (SAC), which approved and
ordered the payment of the amount of just compensation fixed
by the Cagayan Provincial Agrarian Reform Adjudicator
(PARAD) in favor of herein respondents.[4] The CA resolution
denied petitioners motion for reconsideration of the decision.
[5]

The following factual antecedents are matters of record.


Petitioner Land Bank of the Philippines (LBP) is a government
banking institution designated under Section 64 of Republic Act
(R.A.) No. 6654 as the financial intermediary of the agrarian
reform program of the government.
Respondent
Heirs
of Eleuterio Cruz
are Anicia CruzPapa, Resurreccion Cruz-Pagcaliwagan, Antonio D. Cruz,
Lourdes Cruz-Doma, Lorna Cruz-Felipe, Mamerto D. Cruz,
Eduardo D. Cruz and Victoria Cruz-Dumlao. Eleuterio Cruz is
the
registered
owner
of
an
unirrigated
riceland
situated in Lakambini, Tuao, Cagayan per Transfer Certificate
of Title No. T-368. Of the total 13.7320 hectares of
respondents landholding, an area of 13.5550 hectares was
placed by the government under the coverage of the operation
land transfer program under Presidential Decree (P.D.) No. 27.
Petitioner pegged the value of the acquired landholding
at P106,935.76 based on the guidelines set forth under P.D.
No. 27 and Executive Order (E.O.) No. 228. Respondents
rejected petitioners valuation and instituted an action for a
summary proceeding for the preliminary determination of just
compensation before the PARAD. On 23 November 1999, the
PARAD rendered a decision fixing the just compensation in the
amount of P80,000.00 per hectare. Petitioner sought
reconsideration but was unsuccessful.

SO ORDERED.
LAND BANK OF THE PHILIPPINES,
Petitioner,

G.R. No. 175175

Thus, on 28 January 2000, petitioner filed a petition for the


determination of just compensation before the RTC
of Tuguegarao City. The petition was docketed as Agrarian

Case No. 0058 and entitled Land Bank of the Philippines v.


Heirs of Eleuterio Cruz, represented by Lorna Cruz, et al.
Petitioners evidence consisted of the testimonies of Benedicta
Simon, head of the LBP Evaluation Division of Land Owners
Compensation Department, and Francisco de la Cruz, Chief,
PARAD, Cagayan. Simon testified that as the officer charged
with reviewing claims under the agrarian reform program, she
computed the valuation of respondents landholdings based on
the formula set forth in P.D. No. 27, E.O. No. 228 and
Administrative Order (A.O.) No. 13, series of 1994 and arrived
at the value of P106,935.76. As the PARAD Chief tasked to
oversee the implementation of the agrarian reform program,
De la Cruz testified that the subject landholding was tenanted
and covered by production agreements between the owner
and various tenants.[12] Petitioner offered in evidence Exhibit
H to prove that the subject landholding had an average
production of 25 and 40 cavans per hectare annually.
For their part, respondents presented Lorna Cruz Felipe, who
testified that as one of the heirs of Eleuterio Cruz, she knew
that the subject landholding was planted with rice two or three
times a year and had a production capacity of 80 to
100 cavans per hectare. Felipe also claimed that the current
market value of the property was between P150,000.00
to P200,000.00 per hectare.
On 07 December 2005, the RTC, sitting as an Special Agrarian
Court (SAC), rendered a decision, the dispositive portion of
which reads:
WHEREFORE, in the light of the foregoing ratiocination,
judgment is
hereby
rendered
fixing the
amount
of P80,000.00 to be the just compensation of the land subject
of this case with an area of 13.7320 hectares situated at
Lakambini, Tuao, Cagayan and covered under TCT No. T-368
and ordering Land Bank of the Philippines to pay respondent
represented
by
Lorna
Cruz-Felipe
the
amount
of P1,098,560.00 in the manner provided by R.A. No. 6657 by
way of full payment of the said just compensation.
SO DECIDED.
The SAC held that the value of P80,000.00 per hectare fixed
by the PARAD should be accorded weight and probative value
and that the SAC is guided by the various factors enumerated
in Section 17 of R.A. No. 6657 in determining just
compensation. It disregarded respondents claim that the
valuation should be based on the current market value of the
landholding since no evidence was adduced in support of the
claim. The SAC also did not accept petitioners valuation as it
was based on P.D. No. 27, in which just compensation was
determined at the time of the taking of the property.
Petitioner filed a motion for reconsideration, which was denied
in a Resolution dated 26 January 2006,[17] prompting petitioner
to elevate the matter to the CA. In its petition for review,
[18]
petitioner questioned the total land area as well as the
amount of just compensation adjudged by the SAC.[19]
On 17 August 2006, the CA rendered the assailed decision
partly granting petitioners appeal.[20] The appellate court ruled
that the total area covered by the agrarian reform program as
was duly established before the PARAD and expressly stated
in the pre-trial order was only 13.5550 hectares and not
13.7320 hectares as was stated in the dispositive portion of the
decision of the SAC.[21] However, the appellate court affirmed

the SAC decision fixing just compensation at P80,000.00 per


hectare. Petitioner sought consideration but was denied in the
assailed Resolution dated 30 October 2006.[22]
Hence, the instant petition, arguing that the formula set forth in
P.D. No. 27/E.O. No. 228 should be applied in fixing just
compensation since respondents landholding was acquired
under P.D. No. 27. Citing Section 2[ of E.O. No. 228 and LBP v.
Hon. David C. Naval, petitioner posits that the correct formula
in determining the just compensation should be Land Value =
(2.5 x AGP x P35) x A, where AGP is the Average Gross
Production per hectare; P35.00 is the Government Support
Price for palay in 1972; and A is the total land area.
Petitioner insists that the values in E.O. No. 228 are applicable
to lands acquired under P.D. No. 27 in cognizance of the wellsettled rule that just compensation is the value of the property
at the time of the taking on 21 October 1972, when the
ownership of the subject property was transferred from the
landowner to the farmers-beneficiaries and when the former
was effectively deprived of dominion and possession over said
land.
The petition lacks merit.
The Court laid down in Paris v. Alfeche[25] the applicability of
P.D. No. 27 and E.O. No. 228 in relation to R.A. No. 6657 in
the matter of the payment of just compensation. There the
Court explained that while under P.D. No. 27 tenant farmers
are already deemed owners of the land they till, they are still
required to pay the cost of the land before the title is
transferred to them and that pending the payment of just
compensation, actual title to the tenanted land remains with the
landowner.
In Paris, the application of the process of agrarian reform was
still incomplete thus, the Court held therein that with the
passage of R.A. No. 6657 before its completion, the process
should now be completed under R.A. No. 6657, with P.D. No.
27 and E.O. No. 228 applying only suppletorily.[26]
In Land Bank of the Philippines v. Natividad,[27] the Court
explained why the guidelines under P.D. No. 27 and E.O. No.
228 are no longer applicable to the delayed payment of lands
acquired under P.D. No. 27, to wit:
It would certainly be inequitable to determine just
compensation based on the guideline provided by PD No. 27
and EO 228 considering the DARs failure to determine the just
compensation for a considerable length of time. That just
compensation
should
be
determined
in
accordance with RA 6657, and not PD 27 or EO 228, is
especially imperative considering that just compensation
should be the full and fair equivalent of the property taken from
its owner by the expropriator, the equivalent being real,
substantial, full and ample.[28]
The decisive backdrop of the instant case coincides with that
in Paris, that is, the amount of just compensation due to
respondents had not yet been settled by the time R.A. No.
6657 became effective. Following the aforementioned
pronouncement in Paris, the fixing of just compensation should
therefore be based on the parameters set out in R.A. No. 6657,
with P.D. No. 27 and E.O. No. 228 having
only suppletory effect.
Section 17 of R.A. No. 6657 states:

SEC. 17. Determination of Just Compensation. In


determining just 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 owner, the tax
declarations, and the assessment made by government
assessors, shall be considered. The social and economic
benefits contributed by the farmers and the farmworkers and
by government to the property as well as the non-payment of
taxes or loans secured from any government financing
institution on the said land shall be considered as additional
factors to determine its valuation.

exceptions, as when the factual findings are grounded entirely


on speculation, surmises, or conjectures or when the findings
are conclusions without citation of specific evidence on which
they are based.

In Land Bank of the Philippines v. Celada,[29] the Court ruled


that the factors enumerated under Section 17, R.A. No. 6657
had already been translated into a basic formula by the
Department of Agrarian Reform (DAR) pursuant to its rulemaking power under Section 49 of R.A. No. 6657. Thus, the
Court held in Celada that the formula outlined in DAR A.O. No.
5, series of 1998[30] should be applied in computing just
compensation.

WHEREFORE, the instant petition for review on certiorari


is DENIED and the decision and resolution of the Court of
Appeals in CA-G.R. SP No. 93207 are REVERSED and SET
ASIDE. Agrarian Case No. 0058 is REMANDED to the
Regional Trial Court, Branch 1, Tuguegarao City, Cagayan,
which is directed to determine with dispatch the just
compensation due respondents strictly in accordance with
DAR A.O. No. 5, series of 1998.

Likewise, in Land Bank of the Philippines v. Sps. Banal,[31] the


Court ruled that the applicable formula in fixing just
compensation is DAR A.O. No. 6, series of 1992, as amended
by DAR A.O. No. 11, series of 1994, then the governing
regulation applicable to compulsory acquisition of lands, in
recognition of the DARs rule-making power to carry out the
object of R.A. No. 6657. Because the trial court therein based
its valuation upon a different formula and did not conduct any
hearing for the reception of evidence, the Court ordered a
remand of the case to the SAC for trial on the merits.

SO ORDERED.
LAND BANK OF THE PHILIPPINES, G.R. No. 164876
Petitioner,
- versus LEONILA P. CELADA,
Respondent.
Promulgated:

The mandatory application of the aforementioned guidelines in


determining just compensation has been reiterated recently
in Land Bank of the Philippines v. Lim,[32] where the Court also
ordered the remand of the case to the SAC for the
determination of just compensation strictly in accordance with
DAR A.O. No. 6, series of 1992, as amended.
A perusal of the PARADs Decision dated 23 November 1999,
which mandated payment of just compensation in the amount
of P80,000.00 per hectare, reveals that the PARAD did not
adhere to the formula prescribed in any of the aforementioned
regulations issued by the DAR or was at least silent on the
applicability of the aforementioned DAR regulations to the
question of just compensation. The PARAD decision also did
not refer to any evidence in support of its finding.
The SAC, meanwhile, referred to DAR A.O. No. 6, series of
1992, as amended, as the controlling guideline in fixing just
compensation. Pertinently, to obtain the land value, the
formula under said regulation requires that the values for the
Capitalized Net Income, Comparable Sales and Market Value
based on the tax declaration must be shown. Moreover, said
formula has been superseded by DAR A.O. No. 05, series of
1998, which also requires values for Capitalized Net Income,
Comparable Sales and Market Value, the same parameters
laid down in the prior regulation.
Stating that no evidence was presented by respondents on the
aforementioned parameters, the SAC ruled that it was
constrained to adopt the finding of the PARAD, which fixed the
value of the land at P80,000.00 per hectare. On appeal, the CA
adopted the same finding.
The general rule is that factual findings of the trial court,
especially when affirmed by the CA, are binding and
conclusive on the Court. However, the rule admits of

A perusal of the PARAD decision, which was adopted by both


the SAC and the CA, shows that its valuation
of P80,000.00 per hectare is sorely lacking in any evidentiary
or legal basis. While the Court wants to fix just compensation
due to respondents if only to write finis to the controversy, the
evidence on record is not sufficient for the Court to do so in
accordance with DAR A.O. No. 5, series of 1998.

January 23, 2006


x
--------------------------------------------------------------------------------------- x
DECISION
YNARES-SANTIAGO, J.:
Respondent Leonila P. Celada owns 22.3167 hectares of
agricultural land situated in Calatrava, Carmen, Bohol
registered under TCT No. 16436,[1] of which 14.1939 hectares
was identified in 1998 by the Department of Agrarian Reform
(DAR) as suitable for compulsory acquisition under the
Comprehensive Agrarian Reform Program (CARP). The matter
was then indorsed to petitioner Land Bank of the Philippines
(LBP) for field investigation and land valuation.
In due course, LBP valued respondents land at
P2.1105517 per square meter for an aggregate value of
P299,569.61.[2] The DAR offered the same amount to
respondent as just compensation, but it was rejected.
Nonetheless, on August 27, 1999, LBP deposited the said sum
in cash and bonds in the name of respondent.[3]
Pursuant to Section 16(d) of Republic Act (RA) No. 6657
or the Comprehensive Agrarian Reform Law of 1988, the
matter was referred to the DAR Adjudication Board (DARAB),
Region VII-Cebu City, for summary administrative hearing on
determination of just compensation. The case was docketed
as DARAB Case No. VII-4767-B-990.
While the DARAB case was pending, respondent filed,
on February 10, 2000, a petition[4] for judicial determination of
just compensation against LBP, the DAR and the Municipal
Agrarian Reform Officer (MARO) of Carmen, Bohol, before the
Regional Trial Court of Tagbilaran City. The same was
docketed as Civil Case No. 6462 and raffled to Branch 3, the
designated Special Agrarian Court (SAC). Respondent alleged

that the current market value of her land is at least


P150,000.00 per hectare based on the following factors:
14.1.
The land in question has been mortgaged to the
defunct Rural Bank of San Miguel (Bohol), Inc., for
P1,220,000.00 on July 23, 1998 since it was appraised at
P15.00 per square meter;
14.2. Agricultural lands in said barangay are priced ranging
from P140,000.00 to P150,000.00 per hectare and current land
transactions reveal said price range;
14.3.
The land in question is titled or registered property,
cultivated and fully developed with rice[5] and corn occupying
the greater portion thereof;
14.4.
The topography of the land, its soil condition, climate
and productivity of surrounding lots justify the just
compensation requested or asked for;
14.5.
Even the class and base unit market value for
agricultural lands in Bohol is about thirty (30) times higher than
the price offered per hectare by DAR/LBP.[6]
On April 27, 2000, LBP filed its Answer[7] raising nonexhaustion of administrative remedies as well as forumshopping as affirmative defense. According to petitioner,
respondent must first await the outcome of the DARAB case
before taking any judicial recourse; that its valuation was
arrived at by applying the formula prescribed by law whereas
respondents was based only on the current value of like
properties.
The DAR and the MARO likewise filed an Answer[8]
averring that the determination of just compensation rests
exclusively with the LBP. Thus, they are not liable to
respondent and are merely nominal parties in the case.
Meanwhile, the DARAB Provincial Adjudicator (PARAD)
issued an Order[9] dated April 12, 2000 affirming the valuation
made by LBP. Respondent failed to appear in the DARAB case
despite due notice.
On June 4, 2001, the SAC issued an order resolving
petitioners affirmative defense in this wise:
WHEREFORE, the Affirmative Defense of x x x Land
Bank is hereby denied. Besides, in the mind of the court, the
recourse to the DARAB is x x x of no moment since it is only
conciliatory to the parties.
Upon agreement of the parties, the pre-trial is reset to
June 11, 2001 at 9:00 in the morning.

ordered to indemnify petitioner the amount of P10,000.00 for


attorneys fee and incidental expenses of P5,000.00 and costs.
SO ORDERED.[12]
LBP elevated the matter to the Court of Appeals which,
however, dismissed the appeal outright on the following
grounds:
1.
The petition is not accompanied with an affidavit of
service, although there is an explanation that respondent,
respondents counsel and Judge Venancio J. Amila were
furnished with copies of the petition by registered mail x x x.
2.
Petitioners counsel indicated his IBP and PTR but not
his Roll of Attorneys Number x x x.
3.
Copies of (a) PARAD Decision x x x adverted to in the
petition which fixed the land valuation for just compensation at
P299,569.11 and (b) petitioners Petition for Judicial
Determination of Just Compensation filed with the Regional
Trial Court of Tagbilaran City, Branch 3, were not attached as
annexes, x x x.[13]
Upon denial of its motion for reconsideration,[14] LBP
filed the instant petition under Rule 45 of the Rules of Court,
alleging that:
A
THE COURT OF APPEALS ERRED IN X X X RIGIDLY OR
STRICTLY APPLYING PROCEDURAL LAW AT THE
EXPENSE OF SUBSTANTIAL JUSTICE AND THE RIGHT TO
APPEAL.
B
THE SAC A QUO ERRED IN ASSUMING JURISDICTION
OVER THE PETITION FOR DETERMINATION OF JUST
COMPENSATION WHILE ADMINISTRATIVE PROCEEDINGS
IS ON-GOING BEFORE THE DARAB, REGION VII, CEBU
CITY.
C
THE SAC A QUO ERRED IN FIXING THE JUST
COMPENSATION OF THE LAND BASED NOT ON ITS
ACTUAL LAND USE BUT ON THE VALUATION OF
NEIGHBORING LANDS.
D
THE SAC A QUO ERRED IN AWARDING ATTORNEYS FEES
AND INCIDENTAL EXPENSES X X X.[15]
On the first assigned error, petitioner asserts that the Court of
Appeals should have liberally construed the rules of procedure
and not dismissed its appeal on technical grounds.

SO ORDERED.[10]
We agree with petitioner.
Thereafter, a pre-trial conference was conducted[11] and
trial on the merits ensued. On March 1, 2003, the SAC
rendered judgment as follows:
WHEREFORE, in view of all the foregoing, the Court
hereby fixes the compensation of the land of petitioner at
P2.50 per square meter or a total of P354,847.50 for the
portion of 14.1939 hectares subject of compulsory acquisition
under the CARP which it believes just, fair and equitable under
the present circumstances and which shall earn legal interest
of twelve percent (12%) per annum from the time of its taking
by the DAR. Furthermore, respondent Land Bank is hereby

The Court of Appeals dismissed petitioners appeal on three


technical grounds, namely: (a) lack of affidavit of service; (b)
failure of counsel to indicate his Roll of Attorneys number; and
(c) failure to attach material portions of the records. However,
the lack of affidavit of service is not deemed fatal where the
petition filed below is accompanied by the original registry
receipts showing that the petition and its annexes were served
upon the parties.[16] On the other hand, the failure of counsel
to indicate his Roll of Attorneys number would not affect
respondents substantive rights, such that petitioners counsel
could have been directed to comply with the latter requirement
rather than dismiss the petition on purely technical grounds.

As for petitioners failure to attach material portions of the


records, we held in Donato v. Court of Appeals[17] that:
[T]he failure of the petitioner to x x x append to his petition
copies of the pleadings and other material portions of the
records as would support the petition, does not justify the
outright dismissal of the petition. It must be emphasized that
the RIRCA (Revised Internal Rules of the Court of Appeals)
gives the appellate court a certain leeway to require parties to
submit additional documents as may be necessary in the
interest of substantial justice. Under Section 3, paragraph d of
Rule 3 of the RIRCA, the CA may require the parties to
complete the annexes as the court deems necessary, and if
the petition is given due course, the CA may require the
elevation of a complete record of the case as provided for
under Section 3(d)(5) of Rule 6 of the RIRCA x x x.[18]
An examination of the records and pleadings filed before the
Court of Appeals reveals that there was substantial compliance
with procedural requirements. Moreover, we have held time
and again that cases should, as much as possible, be
determined on the merits after the parties have been given full
opportunity to ventilate their causes and defenses, rather than
on technicality or some procedural imperfection.[19] After all,
technical rules of procedure are not ends in themselves but are
primarily devised to help in the proper and expedient
dispensation of justice. In appropriate cases, therefore, the
rules may be construed liberally in order to meet and advance
the cause of substantial justice.[20]
While a remand of the case to the appellate court would seem
to be in order, we deem it proper to resolve the case on the
merits if only to write finis to the present controversy.
We do not agree with petitioners submission that the SAC
erred in assuming jurisdiction over respondents petition for
determination of just compensation despite the pendency of
the administrative proceedings before the DARAB. In Land
Bank of the Philippines v. Court of Appeals,[21] the landowner
filed an action for determination of just compensation without
waiting for the completion of the DARABs re-evaluation of the
land. The Court nonetheless held therein that the SAC
acquired jurisdiction over the action for the following reason:
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 decision. 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 appellate jurisdiction would be contrary to Sec. 57 and
therefore would be void. Thus, direct resort to the SAC by
private respondent is valid.[22]
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.[23]
The valuation of property or
determination of just compensation in eminent domain
proceedings is essentially a judicial function which is vested
with the courts and not with administrative agencies.[24]
Consequently, the SAC properly took cognizance of
respondents petition for determination of just compensation.

In the same vein, there is no merit to petitioners contention


that respondent failed to exhaust administrative remedies
when she directly filed the petition for determination of just
compensation with the SAC even before the DARAB case
could be resolved. The issue is now moot considering that the
valuation made by petitioner had long been affirmed by the
DARAB in its order dated April 12, 2000. As held in Land Bank
of the Philippines v. Wycoco,[25] the doctrine of exhaustion of
administrative remedies is inapplicable when the issue is
rendered moot and academic, as in the instant case.
With regard to the third assigned error, however, we agree with
petitioner that the SAC erred in setting aside petitioners
valuation of respondents land on the sole basis of the higher
valuation given for neighboring properties. In this regard, the
SAC held:
It appears from the evidence of petitioner that the neighboring
lands of similar classification were paid higher than what was
quoted to her land by respondent Land Bank as the value per
square meter to her land was only quoted at P2.1105517 while
the others which were of the same classification were paid by
respondent Bank at P2.42 more or less, per square meter
referring to the land of Consuelito Borja (Exh. D) and Cesar
Borja (Exh. F). Furthermore, the land of petitioner was
allegedly mortgaged for a loan of P1,200,000.00 before the
Rural Bank of San Miguel, Bohol and that it was purchased by
her from a certain Felipe Dungog for P450,000.00 although no
documents therefor were shown to support her claim.
Nevertheless, the Court finds a patent disparity in the price
quotations by respondent Land Bank for the land of petitioner
and that of the other landowners brought under CARP which
could be caused by deficient or erroneous references due to
the petitioners indifference and stubborn attitude in not
cooperating with respondent bank in submitting the data
needed for the evaluation of the property. x x x At any rate, the
price quotation by respondent Land Bank on the land of the
petitioner is low more so that it was done some four years ago,
particularly, on June 22, 1998 (Exh. 1) and the same has
become irrelevant in the course of time due to the devaluation
of the peso brought about by our staggering economy.[26]
As can be gleaned from above ruling, the SAC based its
valuation solely on the observation that there was a patent
disparity between the price given to respondent and the other
landowners. We note that it did not apply the DAR valuation
formula since according to the SAC, it is Section 17 of RA No.
6657 that should be the principal basis of computation as it is
the law governing the matter.[27] The SAC further held that
said Section 17 cannot be superseded by any administrative
order of a government agency,[28] thereby implying that the
valuation formula under DAR Administrative Order No. 5,
Series of 1998 (DAR AO No. 5, s. of 1998),[29] is invalid and of
no effect.
While SAC is required to consider the acquisition cost of the
land, the current value of like properties, its nature, actual use
and income, the sworn valuation by the owner, the tax
declaration and the assessments made by the government
assessors[30] to determine just compensation, it is equally true
that these factors have been translated into a basic formula by
the DAR pursuant to its rule-making power under Section 49 of
RA No. 6657.[31] As the government agency principally tasked
to implement the agrarian reform program, it is the DARs duty
to issue rules and regulations to carry out the object of the law.
DAR AO No. 5, s. of 1998 precisely filled in the details of
Section 17, RA No. 6657 by providing a basic formula by which
the factors mentioned therein may be taken into account. The

SAC was at no liberty to disregard the formula which was


devised to implement the said provision.

factor. DAR AO No. 5, s. of 1998 defines CS factor as


follows:

It is elementary that rules and regulations issued by


administrative bodies to interpret the law which they are
entrusted to enforce, have the force of law, and are entitled to
great respect.[32] Administrative issuances partake of the
nature of a statute[33] and have in their favor a presumption of
legality.[34] As such, courts cannot ignore administrative
issuances especially when, as in this case, its validity was not
put in issue. Unless an administrative order is declared invalid,
courts have no option but to apply the same.

C.
CS shall refer to any one or the average of all the
applicable sub-factors, namely ST, AC and MVM:
Where:
ST = Peso Value of Sales Transactions as
defined under Item C.2
AC = Acquisition Cost as defined under Item C.3
MVM = Market Value Based on Mortgage as defined under
Item C.4
xxxx

Thus, Section 17 of RA No. 6657 states:


SEC. 17. Determination of Just Compensation. In
determining just 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 owner, the tax
declarations, and the assessment made by government
assessors, shall be considered. The social and economic
benefits contributed by the farmers and the farmworkers and
by the Government to the property as well as the nonpayment
of taxes or loans secured from any government financing
institution on the said land shall be considered as additional
factors to determine its valuation.
As stated earlier, the above provision is implemented through
DAR AO No. 5, s. of 1998, which provides that:
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:

C.2.
The criteria in the selection of the comparable sales
transaction (ST) shall be as follows:
a.
When the required number of STs is not available at the
barangay level, additional STs may be secured from the
municipality where the land being offered/covered is situated to
complete the required three comparable STs. In case there are
more STs available than what is required at the municipal level,
the most recent transactions shall be considered. The same
rule shall apply at the provincial level when no STs are
available at the municipal level. In all cases, the combination of
STs sourced from the barangay, municipality and province shall
not exceed three transactions.
b.
The land subject of acquisition as well as those subject
of comparable sales transactions should be similar in
topography, land use, i.e., planted to the same crop.
Furthermore, in case of permanent crops, the subject
properties should be more or less comparable in terms of their
stages of productivity and plant density.
c.
The comparable sales transactions should have been
executed within the period January 1, 1985 to June 15, 1988,
and registered within the period January 1, 1985, to September
13, 1988.
xxxx
C.3.
Acquisition Cost (AC) AC shall be deemed relevant
when the property subject of acquisition was acquired through
purchase or exchange with another property within the period
January 1, 1985 to June 15, 1988 and registered within the
period January 1, 1985 to September 13, 1988, and the
condition of said property is still substantially similar from the
date of purchase or exchange to the date of FI.
xxxx

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.
Accordingly, petitioner applied the formula under A1 above
since the comparable sales factor (CS factor) was not
present. As observed by the SAC itself, respondent refused to
cooperate with the local valuation office of petitioner and did
not provide the necessary data to arrive at a proper CS

C.4. Market Value Based on Mortgage (MVM) For MVM to


be relevant or applicable, the property subject of acquisition
should have been mortgaged as of June 15, 1988 and the
condition of the property is still substantially similar up to the
date of FI. MVM shall refer to the latest available appraised
value of the property.
In the case at bar, while respondent attempted to prove during
the hearings before the SAC, comparable sales transactions,
the acquisition cost of the property as well as its mortgage
value, she failed to submit adequate documentary evidence to
support the same. Consequently, there was nothing from
which the CS factor could be determined.
In contrast, petitioner arrived at its valuation by using available
factors culled from the Department of Agriculture and

Philippine Coconut Authority,[35] and by computing the same


in accordance with the formula provided, thus
COMPUTATION (Applicable Formula) : LV = 0.90 CNI + 0.10
MV
Comparable Land Transactions
x-x-x
Capitalized Net Income:
0.90
= 15,000.00

(P x x x

x ____ ) = P

Cassava

16,666.67 x

Corn/Coco

26,571.70

q.
After these Production data and selling price, there is
here a cost of operation, what is this?
a.
It is the expenses of the land owner or farmer. From
day one of the cultivation until production. Without the land
owners submission of the sworn statement of the income,
production and the cost, x x x Administrative Order No. 5 states
that x x x we will use 20% as the net income, meaning 80% of
the production in peso. This is the cost of valuation.
q.
80 % for what crops?
a.
All crops except for coconuts where the cost of
expenses is only 20%.

= 23,914.53
Market Value
= 896.38
per Tax Declaration:
= 1,005.39
Computed Value per
Corn/Coco 24,919.92

Cassava

8,963.78 x 0.10

Corn/Coco

10,053.93
q.
a.

Hectare:

Cassava

How about the corn x x x intercropped with coconuts?


P24,919.92.[36]

15,896.38;
Under the circumstances, we find the explanation and
computation of petitioner to be sufficient and in accordance
with applicable laws. Petitioners valuation must thus be
upheld.

xxx
Value per hectare used: Cassava
6.0000 has. = 95,378.28
Corn/Coco
8.1939 has. = 204,191.33
Payment due to LO :

q.
Summing all these data, what is the value per hectare
of the cassava?
a.
The cassava is P15,896.38.

15,896.38
24,919.92

x
x

P299, 569.61

The above computation was explained by Antero M. Gablines,


Chief of the Claims, Processing, Valuation and Payment
Division of the Agrarian Operations Center of the Land Bank, to
wit:

Finally, there is no basis for the SACs award of 12% interest


per annum in favor of respondent.
Although in some
expropriation cases, the Court allowed the imposition of said
interest, the same was in the nature of damages for delay in
payment which in effect makes the obligation on the part of the
government one of forbearance.[37] In this case, there is no
delay that would justify the payment of interest since the just
compensation due to respondent has been promptly and
validly deposited in her name in cash and LBP bonds. Neither
is there factual or legal justification for the award of attorneys
fees and costs of litigation in favor of respondent.

ATTY. CABANGBANG: (On direct):


xxxx
q.
What are the items needed for the Land Bank to
compute?
a.
In accordance with Administrative Order No. 5, series
of 1998, the value of the land should be computed using the
capitalized net income plus the market value. We need the
gross production of the land and its output and the net income
of the property.
q.
You said gross production. How would you fix the
gross production of the property?
a.
In that Administrative Order No. 5, if the owner of the
land is cooperative, he is required to submit the net income.
Without submitting all his sworn statements, we will get the
data from the DA (Agriculture) or from the coconut authorities.
xxxx
q.
In this recommended amount which you approved, how
did you arrive at this figure?
a.
We used the data from the Philippine (Coconut)
Authority and the Agriculture and the data stated that Cassava
production was only 10,000 kilos per hectare; corn, 2,000 kilos;
and coconuts, 15.38 kilos per hectare. The data stated that in
the first cropping of 1986, the price of cassava was P1.00 per
kilo; corn was sold at P7.75 per kilo; and the Philippine
Coconut Authority stated that during that time, the selling price
of coconuts was P8.23 per kilo.

WHEREFORE, the instant petition is GRANTED. The Decision


of the Regional Trial Court, Tagbilaran City, Branch 3 in Civil
Case No. 6462 dated March 1, 2003 is REVERSED and SET
ASIDE.
A new judgment is entered fixing the just
compensation for respondents land at P2.1105517 per square
meter or a total of P299,569.61.
SO ORDERED.
[G.R. No. 128557. December 29, 1999]
LAND BANK OF THE PHILIPPINES, petitioner vs. COURT OF
APPEALS and JOSE PASCUAL, respondents.
DECISION
BELLOSILLO, J.:
The lofty effort of the Government to implement an effective
agrarian reform program has resulted in the massive
distribution of huge tracks of land to tenant farmers. But it
divested many landowners of their property, and although the
Constitution assures them of just compensation its
determination may involve a tedious litigation in the end. More
often, land appraisal becomes a prolonged legal battle among
the contending parties - the landowner, the tenant and the
Government. At times the confrontation is confounded by the
numerous laws on agrarian reform which although intended to
ensure the effective implementation of the program have only
given rise to needless confusion which we are called upon to
resolve, as the case before us.

Private respondent Jose Pascual owned three (3) parcels of


land located in Guttaran, Cagayan. Parcel 1 covered by TCT
No. 16655 contains an area of 149,852 square meters as
surveyed by the DAR but the actual land area transferred is
estimated at 102,229 square meters and classified as
unirrigated lowland rice; Parcel 2 covered by TCT No. 16654
contains an area of 123,043 square meters as surveyed by the
DAR but the actual land area transferred is estimated at
85,381 square meters and classified as cornland; and, Parcel 3
covered by TCT No. 16653 contains an area of 192,590 square
meters but the actual land area transferred is estimated at
161,338 square meters and classified as irrigated lowland rice.
[1] Pursuant to the Land Reform Program of the Government
under PD 27[2] and EO 228,[3] the Department of Agrarian
Reform (DAR) placed these lands under its Operation Land
Transfer (OLT).[4]
Under EO 228 the value of rice and corn lands is determined
thus Sec. 2. Henceforth, the valuation of rice and corn lands
covered by P.D. 27 shall be based on the average gross
production determined by the Barangay Committee on Land
Production in accordance with Department Memorandum
Circular No. 26, series of 1973 and related issuances and
regulations of the Department of Agrarian Reform. The
average gross production shall be multiplied by two and a half
(2.5), the product of which shall be multiplied by Thirty-Five
Pesos (P35), the government support price for one cavan of 50
kilos of palay on October 21, 1972, or Thirty-One Pesos (P31),
the government support price for one cavan of 50 kilos of corn
on October 21, 1972, and the amount arrived at shall be the
value of the rice and corn land, as the case may be, for the
purpose of determining its cost to the farmer and
compensation to the landowner (emphasis supplied).
Hence, the formula for computing the Land Value (LV) or Price
Per Hectare (PPH) of rice and corn lands is 2.5 x AGP x GSP =
LV or PPH.
In compliance with EO 228, the Provincial Agrarian Reform
Officer (PARO) of the DAR in an "Accomplished OLT Valuation
Form No. 1" dated 2 December 1989 recommended that the
"Average Gross Productivity" (AGP) based on "[3] Normal Crop
Year" for Parcels 1 and 2 should be 25 cavans per hectare for
unirrigated lowland rice and 10 cavans per hectare for corn
land.[5]
Meanwhile, the Office of the Secretary of Agrarian Reform
(SAR) also conducted its own valuation proceedings apart from
the PARO. On 10 October 1990 Secretary Benjamin T. Leong
of the DAR using the AGP of 25.66 cavans for unirrigated rice
lands[6] issued an order valuing Parcel 1 at P22,952.97[7] and
requiring herein petitioner Land Bank of the Philippines (LBP)
to pay the amount. On 1 February 1991 petitioner LBP
approved the valuation.
In 1991 private respondent Jose Pascual, opposing the
recommended AGP of the PARO, filed a petition for the
annulment of the recommendation on the productivity and
valuation of the land covered by OLT, subject matter hereof,
with the Department of Agrarian Reform Adjudication Board
(DARAB).
Oscar Dimacali, Provincial Agrarian Reform
Adjudicator (PARAD) of Cagayan heard the case. Despite due
notice however Francisco Baculi, the PARO who issued the
assailed recommendation, failed to appear at the trial. Only
private respondent Jose Pascual and Atty. Eduard Javier of
petitioner LBP were present.[8] Thereafter private respondent
was allowed to present evidence ex-parte.

At the hearings conducted by the PARAD private respondent


presented as evidence another "Accomplished OLT Valuation
Form No. 1," for Parcel 3 dated 22 June 1976 to support his
claim that the "OLT Valuation Form" issued by PARO Francisco
Baculi extremely undervalued the AGP of his lands. In the
"1976 OLT Valuation Form" the AGP based on "(3) Normal
Crop Year" was 80 cavans per hectare for lowland rice
unirrigated, 28 cavans per hectare for corn lands and 100
cavans per hectare for lowland rice irrigated.[9]
Private respondent also presented Tax Declarations for Parcels
1 and 2 stating that the AGP was 80 cavans for unirrigated rice
lands and 28 cavans for corn lands.
On 11 June 1992 the PARAD ruled in favor of private
respondent nullifying the 2 December 1989 AGP
recommended by the PARO.[10] Instead, the PARAD applied
the 22 June 1976 AGP and the AGP stated in private
respondents Tax Declarations to determine the correct
compensation. The PARAD also used the "Government
Support Price" (GSP) of P300 for each cavan of palay and
P250 for each cavan of corn.[11] He then ordered petitioner
LBP to pay private respondent P613,200.00 for Parcel 1,
P148,750.00 for Parcel 2, and P1,200,000.00 for Parcel 3, or a
total amount of P1,961,950.00.[12]
After receiving notice of the decision of the PARAD, private
respondent accepted the valuation.
However, when the
judgment became final and executory, petitioner LBP as the
financing arm in the operation of PD 27 and EO 228 refused to
pay thus forcing private respondent to apply for a Writ of
Execution with the PARAD which the latter issued on 24
December 1992.[13] Still, petitioner LBP declined to comply
with the order.
On 29 June 1994 Secretary Ernesto Garilao Jr. of the DAR
wrote a letter to petitioner LBP requiring the latter to pay the
amount stated in the judgment of the PARAD.[14] Again,
petitioner LBP rejected the directive of Secretary Garilao.
Petitioners Executive Vice President, Jesus Diaz, then sent a
letter to Secretary Garilao arguing that (a) the valuation of just
compensation should be determined by the courts; (b) PARAD
could not reverse a previous order of the Secretary of the DAR;
[15] and, (c) the valuation of lands under EO 228 falls within
the exclusive jurisdiction of the Secretary of the DAR and not
of the DARAB.[16]
On 23 January 1995 the Secretary of Agrarian Reform replied
to petitioner We agree with your contention that the matter of valuation of
lands covered by P.D. 27 is a matter within the administrative
implementation of agrarian reform, hence, cognizable
exclusively by the Secretary.
However, in this particular case, there is another operative
principle which is the finality of decisions of the Adjudication
Board. Since the matter has been properly threshed out in the
quasi-judicial proceeding and the decision has already become
final and executory, we cannot make an exception in this case
and allow the non-payment of the valuation unless we are
enjoined by a higher authority like the courts.
Therefore at the risk of occasional error, we maintain that
payment should be made in this case. However we believe
situations like this would be lessened tremendously through
the issuance of the attached memorandum circular[17]to the
Field Offices.[18]

Despite the letter of Secretary G. Garilao, petitioner LBP


remained adamant in its refusal to pay private respondent. It
reiterated its stand that the PARAD had no jurisdiction to value
lands covered by PD 27.[19]
On 17 June 1995 counsel for private respondent also wrote
petitioner LBP demanding payment.
On 20 June 1995
petitioner replied x x x x Although we disagree with the foregoing view that the
PARAD decision on the land valuation of a PD 27 landholding
has become final for numerous legal reasons, in deference to
the DAR Secretary, we informed him that we will pay the
amount decided by the PARAD of Cagayan provided the
tenant beneficiaries of Mr. Pascual be consulted first and the
land transfer claim be redocumented to the effect that said
beneficiaries re-execute the Landowner Tenant Production
Agreement-Farmers Undertaking to show their willingness to
the PARAD valuation and to amortize the same to this bank.
This is in consonance with the legal mandate of this bank as
the financing arm of PD 27/EO 228 landholdings. In other
words, the beneficiaries must agree to the amount being
financed, otherwise, financing may not be possible pursuant to
this banks legal mandate (emphasis supplied).[20]
Petitioner LBP having consistently refused to comply with its
obligation despite the directive of the Secretary of the DAR and
the various demand letters of private respondent Jose Pascual,
the latter finally filed an action for Mandamus in the Court of
Appeals to compel petitioner to pay the valuation determined
by the PARAD. On 15 July 1996 the appellate court granted
the Writ now being assailed. The appellate court also required
petitioner LBP to pay a compounded interest of 6% per annum
in compliance with DAR Administrative Order No. 13, series of
1994.[21] On 11 March 1997 petitioner's Motion for
Reconsideration was denied;[22] hence, this petition.
Petitioner LBP avers that the Court of Appeals erred in issuing
the Writ of Mandamus in favor of private respondent and
argues that the appellate court cannot impose a 6%
compounded interest on the value of Jose Pascual's land since
Administrative Order No. 13 does not apply to his case. Three
(3) reasons are given by petitioner why the Court of Appeals
cannot issue the writ:
First, it cannot enforce PARADs valuation since it cannot make
such determination for want of jurisdiction hence void. Section
12, par. (b), of PD 946[23] provides that the valuation of lands
covered by PD 27 is under the exclusive jurisdiction of the
Secretary of Agrarian Reform. Petitioner asserts that Sec. 17
of EO 229[24] and Sec. 50 of RA No. 6657,[25] which granted
DAR the exclusive jurisdiction over all agrarian reform matters
thereby divesting the Court of Agrarian Relations of such
power, did not repeal Sec. 12, par. (b), of PD 946. Petitioner
now attempts to reconcile the pertinent laws by saying that
only the Secretary of Agrarian Reform can determine the value
of rice and corn lands under Operation Land Transfer of PD 27,
while on the other hand, all other lands covered by RA 6657
(CARL) shall be valued by the DARAB, hence, the DARAB of
the DAR has no jurisdiction to determine the value of the lands
covered by OLT under PD 27.
To bolster its contention that Sec. 12, par. (b), of PD 946 was
not repealed, petitioner LBP cites Sec. 76 of RA 6657.[26] It
argues that since Sec. 76 of RA 6657 only repealed the last
two (2) paragraphs of Sec. 12 of PD 946, it is obvious that
Congress had no intention of repealing par. (b). Thus, it
remains valid and effective. As a matter of fact, even the

Secretary of Agrarian Reform agreed that Sec. 12, par. (b), of


PD 946 still holds. Based on this assumption, the Secretary of
the DAR has opined that the valuation of rice and corn lands is
under his exclusive jurisdiction and has directed all DARAB
officials to refrain from valuing lands covered by PD 27.[27]
Petitioner maintains that the Secretary of the DAR should
conduct his own proceedings to determine the value of Parcels
2 and 3 and that his valuation of Parcel 1[28]should be upheld.
We do not agree. In Machete v. Court of Appeals[29] this
Court discussed the effects on PD 946 of Sec. 17 of EO 229
and Sec. 50 of RA 6657 when it held The above quoted provision (Sec. 17) should be deemed to
have repealed Sec. 12 (a) and (b) of Presidential Decree No.
946 which invested the then courts of agrarian relations with
original exclusive jurisdiction over cases and questions
involving rights granted and obligations imposed by
presidential issuances promulgated in relation to the agrarian
reform program (emphasis supplied).
Thus, petitioners contention that Sec. 12, par. (b), of PD 946 is
still in effect cannot be sustained. It seems that the Secretary
of Agrarian Reform erred in issuing Memorandum Circular No.
I, Series of 1995, directing the DARAB to refrain from hearing
valuation cases involving PD 27 lands. For on the contrary, it
is the DARAB which has the authority to determine the initial
valuation of lands involving agrarian reform[30] although such
valuation may only be considered preliminary as the final
determination of just compensation is vested in the courts.[31]
Second, petitioner LBP contends that the Court of Appeals
cannot issue the Writ of Mandamus because it cannot be
compelled to perform an act which is beyond its legal duty.[32]
Petitioner cites Sec. 2 of PD 251,[33] which amended Sec. 75
of RA 3844,[34] which provides that it is the duty of petitioner
bank "(t)o finance and/or guarantee the acquisition, under
Presidential Decree No. 85 dated December 25, 1972, of farm
lands transferred to the tenant farmers pursuant to Presidential
Decree No. 27 (P.D. 27) dated October 21, 1972." Section 7 of
PD 251 also provides that "(w)henever the Bank pays the
whole or a portion of the total costs of farm lots, the Bank shall
be subrogated by reason thereof, to the right of the landowner
to collect and receive the yearly amortizations on farm lots or
the amount paid including interest thereon, from tenant-farmers
in whose favor said farm lot has been transferred pursuant to
Presidential Decree No. 27, dated October 21, 1972"
(emphasis supplied).
Petitioner further argues that for a financing or guarantee
agreement to exist there must be at least three (3) parties: the
creditor, the debtor and the financier or the guarantor. Since
petitioner merely guarantees or finances the payment of the
value of the land, the farmer-beneficiarys consent, being the
principal debtor, is indispensable and that the only time
petitioner becomes legally bound to finance the transaction is
when the farmer-beneficiary approves the appraised land
value. Petitioner fears that if it is forced to pay the value as
determined by the DARAB, the government will suffer losses
as the farmer-beneficiary, who does not agree to the appraised
land value, will surely refuse to reimburse the amounts that
petitioner had disbursed. Thus, it asserts, that the landowner,
the DAR, the Land Bank and the farmer-beneficiary must all
agree to the value of the land as determined by them.
A perusal of the law however shows that the consent of the
farmer-beneficiary is not required in establishing the vinculum
juris for the proper compensation of the landowner. Section 18
of RA 6657 states -

Sec. 18. Valuation and Mode of Compensation. - The LBP shall


compensate the landowner in such amount as may be agreed
upon by the landowner and the DAR and the LBP in
accordance with the criteria provided for in Sections 16 and 17
and other pertinent provisions hereof, or as may be finally
determined by the court as the just compensation for the land
(emphasis supplied).
As may be gleaned from the aforementioned section, the
landowner, the DAR and the Land Bank are the only parties
involved. The law does not mention the participation of the
farmer-beneficiary. However, petitioner insists that Sec. 18 of
RA 6657[35] does not apply in this case as it involves lands
covered by PD 27. It argues that in appraising PD 27 lands the
consent of the farmer-beneficiary is necessary to arrive at a
final valuation. Without such concurrence, the financing
scheme under PD 251 cannot be satisfied.[36]
We cannot see why Sec. 18 of RA 6657 should not apply to
rice and corn lands under PD 27. Section 75 of RA 6657[37]
clearly states that the provisions of PD 27 and EO 228 shall
only have a suppletory effect. Section 7 of the Act also
provides Sec. 7. Priorities.- The DAR, in coordination with the PARC
shall plan and program the acquisition and distribution of all
agricultural lands through a period of (10) years from the
effectivity of this Act. Lands shall be acquired and distributed
as follows:
Phase One: Rice and Corn lands under P.D. 27; all idle or
abandoned lands; all private lands voluntarily offered by the
owners for agrarian reform;xxx and all other lands owned by
the government devoted to or suitable for agriculture, which
shall be acquired and distributed immediately upon the
effectivity of this Act, with the implementation to be completed
within a period of not more than four (4) years (emphasis
supplied).
This eloquently demonstrates that RA 6657 includes PD 27
lands among the properties which the DAR shall acquire and
distribute to the landless. And to facilitate the acquisition and
distribution thereof, Secs. 16, 17 and 18 of the Act should be
adhered to. In Association of Small Landowners of the
Philippines v. Secretary of Agrarian Reform[38] this Court of
Appeals applied the provisions RA 6657 to rice and corn lands
when it upheld the constitutionality of the payment of just
compensation for PD 27 lands through the different modes
stated in Sec. 18.
Having established that under Sec. 18 of RA 6657 the consent
of the farmer-beneficiary is unnecessary in the appraisal of
land value, it must now be determined if petitioner had agreed
to the amount of compensation declared by the PARAD. If it
did, then we can now apply the doctrine in Sharp International
Marketing v. Court of Appeals.[39] In that case, the Land Bank
refused to comply with the Writ of Mandamus issued by the
Court of Appeals on the ground that it was not obliged to follow
the order of the Secretary of Agrarian Reform to pay the
landowner. This Court concurred with the Land Bank saying
that the latter could not be compelled to obey the Secretary of
Agrarian Reform since the bank did not merely exercise a
ministerial function.
Instead, it had an independent
discretionary role in land valuation and that the only time a writ
of mandamus could be issued against the Land Bank was
when it agreed to the amount of compensation determined by
the DAR -

It needs no exceptional intelligence to understand the


implication of this transmittal. It simply means that if LBP
agrees on the amount stated in the DAS,[40] after its review
and evaluation, it becomes its duty to sign the deed. But not
until then. For, it is only in that event that the amount to be
compensated shall have been established according to law.
Although the case at bar pertains to an involuntary sale of land,
the same principle should apply. Once the Land Bank agrees
with the appraisal of the DAR, which bears the approval of the
landowner, it becomes its legal duty to finance the transaction.
In the instant case, petitioner participated in the valuation
proceedings held in the office of the PARAD through its
counsel, Atty. Eduard Javier.[41] It did not appeal the decision
of PARAD which became final and executory.[42] As a matter
of fact, petitioner even stated in its Petition that "it is willing to
pay the value determined by the PARAD PROVIDED that the
farmer beneficiaries concur thereto."[43] These facts
sufficiently prove that petitioner LBP agreed with the valuation
of the land. The only thing that hindered it from paying the
amount was the non-concurrence of the farmer-beneficiary.
But as we have already stated, there is no need for such
concurrence. Without such obstacle, petitioner can now be
compelled to perform its legal duty through the issuance of a
writ of mandamus.
Anent petitioners argument that the government will lose
money should the farmer-beneficiary be unwilling to pay, we
believe such apprehension is baseless. In the event that the
farmer-beneficiary refuses to pay the amount disbursed by
petitioner, the latter can foreclose on the land as provided for in
Secs. 8 to 11 of EO 228. Petitioner LBP would then be
reimbursed of the amount it paid to the landowner.
Third, petitioner LBP asserts that a writ of mandamus cannot
be issued where there is another plain, adequate and complete
remedy in the ordinary course of law. Petitioner claims that
private respondent had three (3) remedies. The first remedy
was to ask the sheriff of the DARAB to execute the ruling of
PARAD by levying against the Agrarian Reform Fund for so
much of the amount as would satisfy the judgment. Another
remedy was to file a motion with the DAR asking for a final
resolution with regard to the financing of the land valuation.
Lastly, private respondent could have filed a case in the
Special Agrarian Court for the final determination of just
compensation.[44]
We hold that as to private respondent the suggested remedies
are far from plain, adequate and complete. After the judgment
of PARAD became final and executory, private respondent
applied for a writ of execution which was eventually granted.
However, the sheriff was unable to implement it since petitioner
LBP was unwilling to pay. The PARAD even issued an order
requiring petitioners manager to explain why he should not be
held in contempt.[45] Two (2) years elapsed from the time of
the PARAD ruling but private respondents claim has remained
unsatisfied. This shows that petitioner has no intention to
comply with the judgment of PARAD. How then can petitioner
still expect private respondent to ask the DARABs sheriff to
levy on the Agrarian Reform Fund when petitioner bank which
had control of the fund[46]firmly reiterated its stand that the
DARAB had no jurisdiction?
Petitioners contention that private respondent should have
asked for a final resolution from the DAR as an alternative
remedy does not impress us either. When private respondent
sensed that petitioner would not satisfy the writ of execution
issued by the PARAD, he sought the assistance of the
Secretary of Agrarian Reform who then wrote to petitioner to

pay the amount in accordance with the decision of PARAD.[47]


Still, petitioner refused. The Secretary then sent another letter
to petitioner telling the latter to pay private respondent.[48]
Obviously, the stand of the Secretary was that petitioner should
pay private respondent in accordance with the PARAD
valuation which had already become final. It would have been
redundant for private respondent to still ask for a final
resolution from the DAR.
The allegation of petitioner that private respondent should have
filed a case with the Special Agrarian Court is also without
merit. Although it is true that Sec. 57 of RA 6657 provides that
the Special Agrarian Courts shall have jurisdiction over the final
determination of just compensation cases, it must be noted
that petitioner never contested the valuation of the PARAD.[49]
Thus, the land valuation stated in its decision became final and
executory.[50] There was therefore no need for private
respondent Pascual to file a case in the Special Agrarian
Court.
With regard to the decision of the Court of Appeals imposing
an interest based on Administrative Order No. 13, Series of
1994, the Order should be examined to ascertain if private
respondent can avail of the 6% compounded interest
prescribed for unpaid landowners. As to its coverage, the
Order states: These rules and regulations shall apply to
landowners: (1) whose lands are actually tenanted as of 21
October 1972 or thereafter and covered by OLT; (2) who opted
for government financing through Land Bank of the Philippines
as mode of compensation; and, (3) who have not yet been paid
for the value of their land.
At first glance it would seem that private respondents lands
are indeed covered by AO No. 13. However, Part IV shows
that AO No. 13 provides a fixed formula for determining the
Land Value (LV) and the additional interests it would have
earned. The formula utilizes the Government Support Price
(GSP) of 1972, which is P35.00/cavan of palay and
P31.00/cavan of corn. For its Increment Formula AO No. 13
states: The following formula shall apply For palay: LV= (2.5 x AGP x P35) x (1.06)n
For corn: LV= (2.5 x AGP x P31) x (1.06)n.[51]
In the decision of PARAD, however, the Land Value (LV) of
private respondents property was computed by using the GSP
for 1992, which is P300.00 per cavan of palay and P250.00 per
cavan of corn.[52] PARAD Dimacali used the following
equations:
For palay: LV = (2.5 x AGP x 300 )
For corn: LV = (2.5 x AGP x 250)
Hence, the formula in AO No. 13 could no longer be applied
since the PARAD already used a higher GSP.
The purpose of AO No. 13 is to compensate the landowners for
unearned interests.[53] Had they been paid in 1972 when the
GSP for rice and corn was valued at P35.00 and P31.00,
respectively, and such amounts were deposited in a bank, they
would have earned a compounded interest of 6% per annum.
Thus, if the PARAD used the 1972 GSP, then the product of
(2.5 x AGP x P35 or P31) could be multiplied by (1.06)n to
determine the value of the land plus the additional 6%
compounded interest it would have earned from 1972.
However, since the PARAD already increased the GSP from
P35.00 to P300.00/cavan of palay and from P31.00 to

P250.00/cavan of corn, there is no more need to add any


interest thereon, muchless compound it. To the extent that it
granted 6% compounded interest to private respondent Jose
Pascual, the Court of Appeals erred.
WHEREFORE, the assailed Decision of the Court of Appeals
granting the Writ of Mandamus directing petitioner Land Bank
of the Philippines to pay private respondent Jose Pascual the
total amount of P1,961,950.00 stated in the Decision dated 11
June 1992 of the Provincial Agrarian Reform Adjudicator
(PARAD) of Cagayan is AFFIRMED, with the modification that
the 6% compounded interest per annum provided under DAR
Administrative Order No. 13, Series of 1994 is DELETED, the
same being no longer applicable.
SO ORDERED.