Roxas and Co., Inc. v.

IAC

Facts:

Petitioner Roxas and Co. Is a corporation that owns 3 haciendas in Batangas, which the government
wishes to acquire under the Comprehensive Agrarian Law (CARL). Before the effectivity of the law,
the petitioner filed with the Department of Agrarian Reform a voluntary offer to sell (VOS) Hacienda
Caylaway pursuant to EO 229, which served as guidelines to the comprehensive agrarian program.

The two other haciendas—Banilad and Palico—were placed under compulsory acquisition by the
DAR in accordance with the CARL.

Hacienda Banilad and Palico

DAR sent invitations to Roxas and Co in order to discuss the results of the DAR investigation, finding
both Banilad and Palico qualified under the CARP. For Hacienda Palico, DAR sent a letter of
acquisition to Roxas and Co at their offices in Manila, while for Hacienda Banilad, DAR addressed the
notices to Jaime Pimintel, caretaker of the said hacienda. It was petitioner Pimintel who attended all
the proceedings regarding the two haciendas. Hence, during trial, Roxas and Co claimed that they
were not informed of the acquisition proceedings on their two haciendas.

DAR then opened a trust account in favor of petitioner Roxas and Co. These trust accounts were
replaced by DAR with cash and Land Bank of the Philippines (LBP) bonds. Meanwhile, petitioner
Roxas applied for the conversion of the haciendas from agricultural to non-agricultural. Despite this,
DAR proceeded with the acquisition of the two haciendas. It then issued and distributed certificate of
land ownership awards (CLOA) to farmer beneficiaries.

Hacianda Caylaway

Although Hacienda Caylaway was initially offered for sale to the government, Roxas and Co sent a
letter to DAR secretary withdrawing its offer. According to Roxas, the reclassification of Caylaway
from agricultural to non agricultural was authorized by the Sangguniang Bayan of Nasugbu. Also, the
municipality of Nasugbu where the haciendas are located had been declared a tourist zone. Roxas
also argued that the land is not suitable for agricultural purposes.

DAR secretary denied Roxas withdrawal of his VOS. According to the secretary, the withdrawal can
only be based on specific grounds such as unsuitability of soil for agriculture, slope of the lad is over
180 degrees and that the land is undeveloped.

Despite the denial of the withdrawal of the VOS, petitioner still filed an application for conversion with
the DAR Adjudication Board (DARAB), which submitted the case to the Secretary of DAR for
resolution. The DAR secretary dismissed the case.

Roxas and Co went to the CA on appeal. CA dismissed appeal claiming that petitioners failed to
exhaust administrative remedies.

Issues:

1. WON the court can take cognizance of petitioner’s petition despite failure to exhaust
administrative remedies

2. WON acquisition proceedings against the petitioners were valid

3. WON the court can rule on whether the haciendas may be reclassified from agricultural to non
agricultural
Held:

1. Yes. Petitioner’s action falls under the exception to the doctrine of exhaustion of
administrative remedies sine there is no other plain, speedy, and adequate remedy for the
petitioners at this point. The CLOAs were already issued despite the fact that there was no
just compensation.

2. Acquisition proceedings against petitioners violated their right to due process. First, there
was an improper service of the Notice of Acquisition. Notices to corporations should be
served through their president, manager, secretary, cashier, agent, or any of its directors or
partners. Jaime Pimintel, to whom the notice was served, was neither of those. Second, there
was no notice of coverage, meaning, the parcels of land were not properly identified before
they were taken by the DAR. Under the law, the land owner has the right to choose 5
hectares of land he wishes to retain. Upon receiving the Notice of Acquisition, petitioner
corporation had no idea which portions of its estate were subject to compulsory acquisiton.
Third, The CLOAs were issued to farmer beneficiaries without just compensation. The law
provides that the deposit must be made only in cash or LBP bonds. DAR’s opening of a trust
account in petitioner’s name does not constitute payment. Even if later, DAR substituted the
trust account with cash and LBP bonds, such does not cure the lack of notice, which still
amounts to a violation of the petitioner’s right to due process.

3. Despite all this, the court has not jurisdiction to rule on the reclassification of land from
agricultural to non agricultural. DAR’s failure to observe due process does not give the court
the power to adjudicate over petitioner’s application for land conversion. DAR is charged with
the mandate of approving applications for land conversion. They have the tools and
experience needed to evaluate such applications; hence, they are the proper agency with
which applications for land use conversion are lodged. DAR should be given a chance to
correct their defects with regard to petitioner’s right to due process.

Petitioner dismissed.

Note: Pertinent section although not mentioned in the case is Sec. 20 of the LGC on power of LGU to
reclassify land. However, the code also provides that the CARL prevails over LGC provisions.