G.R. No.

128557 December 29, 1999

LAND BANK OF THE PHILIPPINES, petitioner, vs. COURT
OF
APPEALS and JOSE PASCUAL, respondents.
Facts:
Private respondent Jose Pascual owned three (3) parcels of land located in
Gattaran, Cagayan: Parcel 1 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
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 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. Pursuant to the Land
Reform Program of the Government under PD 27 and EO 228, DAR placed
these lands under its Operation Land Transfer (OLT).
Under EO 228, 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.
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, with the DARAB.
Oscar Dimacali, Provincial Agrarian Reform Adjudicator (PARAD) of
Cagayan heard the case and 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. Thereafter
private respondent was allowed to present evidence ex-parte.

The PARAD ruled in favor of private respondent nullifying the 2

December 1989 AGP recommended by the PARO. Instead, the
PARAD applied the June 22 1976 AGP and the AGP stated in private
respondent's 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. 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.
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 but still,
petitioner LBP declined to comply with the order.
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

Petitioner LBP filed this petition and avers that the Court of
Appeals erred in issuing the Writ of Mandamus in favor of
private respondent and argues that it cannot enforce PARAD's
valuation since it cannot make such determination for want of
jurisdiction hence void. Section 12, par. (b), of PD 946 provides
that the valuation of lands covered by PD 27 is under the
exclusive jurisdiction of the Secretary of Agrarian Reform.
Petitioner LBP also 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 and rationalizing
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-beneficiary's consent, being the principal debtor, is
indispensable and that the only time petitioner becomes
legally bound to finance the transaction is when the farmerbeneficiary approves the appraised land value.

Issue:
(1) Whether or not the consent of the farmer-beneficiary is
needed in establishing the determination of just compensation.
(2) Whether or not the Land Bank can be compelled by writ of
mandamus.
Ruling:
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 does not apply in this case as it involves lands
covered by PD 27. We cannot see why Sec. 18 of RA 6657
should not apply to rice and cornlands under PD 27. Section 75
of RA 6657 clearly states that the provisions of PD 27 and EO
228 shall only have a suppletory effect.
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. 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 Secretary of Agrarian Reform to pay the

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.
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. It did not appeal the decision of
PARAD which became final and executory. 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." 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.
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 of the
Provincial Agrarian Reform Adjudicator (PARAD) of Cagayan is
AFFIRMED.

G.R. No. 164876 January 23, 2006

LAND BANK OF THE PHILIPPINES vs. LEONILA P. CELADA
Facts:
Respondent Leonila P. Celada owns 22.3167 hectares of
agricultural land situated in Calatrava, Carmen, Bohol, of which
14.1939 hectares was identified in 1998 by the DAR as suitable
for compulsory acquisition under CARP. The matter was then
indorsed to petitioner LBP for field investigation and land
valuation. LBP valued respondents land at P2.1105517 per
square meter for an aggregate value of P299,569.61 but it was
rejected. Nonetheless, LBP deposited the said sum in cash and
bonds in the name of respondent.
Pursuant to Section 16(d) of RA No. 6657, the matter was
referred to the DARAB, Region VII-Cebu City, for summary
administrative hearing on determination of just compensation.

While the DARAB case was pending, respondent filed, a

petition for judicial determination of just compensation against
LBP, the DAR and the MARO of Carmen, Bohol, before the
Regional Trial Court of Tagbilaran City contending that the
current market value of her land is at least P150,000.00 per
hectare based on: (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; and (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.
LBP filed its Answer raising non-exhaustion of administrative
remedies. The RTC rendered decision denying the Affirmative
Defense of Land Bank and fixes the compensation of the land
of petitioner at P2.50 per square meter or a total of
P354,847.50.
LBP elevated the matter to the Court of Appeals which,

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. 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, the appellate court a certain leeway to require parties
to submit additional documents as may be necessary in the
interest of substantial justice.
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.
LBP filed the instant petition under Rule 45 of the Rules of
Court.

Issue:
WHETHER OR NOT 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.

WHETHER OR NOT 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.
Ruling:
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, the landowner filed
an action for determination of just compensation without
waiting for the completion of the DARABs re-evaluation of the

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.

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. 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, the
doctrine of exhaustion of administrative remedies is
inapplicable when the issue is rendered moot and academic, as
in the instant case.
We agree with petitioner that the SAC erred in setting aside
petitioners valuation of respondents land on the sole basis of

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". The SAC
was at no liberty to disregard the formula which was devised to
implement the said provision.
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 statute33 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

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.
WHEREFORE, the instant petition is GRANTED.