Department of Agrarian Reform vs. Apex Investment and Financing Corporation

The doctrine of exhaustion of administrative remedies is excused when the administrative body fails to act on a protest for an unreasonable period, creating urgency for judicial intervention, and when the administrative action is patently illegal for violating procedural due process.

Respondent Apex Investment and Financing Corporation (now SM Investments Corporation) owned several lots in Barangay Paliparan, Dasmariñas, Cavite. The Municipal Agrarian Reform Office (MARO) initiated compulsory acquisition proceedings over these lots under R.A. 6657. Notices were sent to respondent's old address and were not actually received. Upon learning of the acquisition and the subsequent cancellation of its titles and issuance of a CLOA to a farmer-beneficiary, respondent filed a petition for certiorari and prohibition with the Court of Appeals, bypassing a final DAR resolution on its protest.

• Ownership and Acquisition: Respondent Apex Investment and Financing Corporation owned several lots in Dasmariñas, Cavite, covered by TCT Nos. T-72491, T-90474, T-90475, T-90476, and T-90477. On August 24, 1994, the MARO initiated compulsory acquisition proceedings over these lots pursuant to R.A. 6657. The MARO issued a Notice of Coverage and a Notice of Acquisition, sending copies to respondent's office at 627 Echague Street, Manila. Respondent denied receiving these notices, having previously moved out of the Echague Street address.
• Discovery and Protest: Respondent learned of the compulsory acquisition from a December 11, 1997 newspaper issue regarding TCT No. T-90476. The DAR subsequently sent respondent a Notice of Land Valuation and Acquisition dated July 24, 1997, offering P229,014.33 as compensation. On January 12, 1998, respondent filed a Protest with the PARO rejecting the compensation offer and arguing its lands were classified as residential prior to the effectivity of R.A. 6657.
• Supplemental Protest: On March 27, 1998, respondent filed a Supplemental Protest attaching certifications from the National Irrigation Administration stating the lots were not covered by any irrigation project, and from the Municipal Engineer and Deputized Zoning Administrator of Dasmariñas attesting that the lots were within the residential zone based on the HLURB-approved Land Use Plan (Resolution No. R-42-A-3, dated February 11, 1981).
• Administrative Inaction and Title Cancellation: The PARO took more than a year to forward the protest and records to the DAR, doing so only on February 15, 1999. In the interim, the DAR required respondent to submit documents already attached to the protest. Respondent subsequently discovered that TCT No. T-90476 had been cancelled on June 24, 1999, and replaced with a title in the name of the Republic. On July 26, 1999, this title was further cancelled and replaced with CLOA-2473 in the name of Angel M. Umali, an alleged farmer-beneficiary.

• Exhaustion of Administrative Remedies: Petitioner argued that respondent violated the principle of exhaustion of administrative remedies by seeking judicial intervention before the DAR could resolve the protest.
• Due Process: Petitioner contended that respondent was not deprived of due process, claiming notices were sent by registered mail and personal delivery, with an alleged signature of receipt appearing on the notices.
• Land Classification: Petitioner maintained that the subject parcels of land are agricultural and thus covered by R.A. No. 6657, disputing the residential classification.

• Exhaustion of Administrative Remedies: Respondent countered that exhaustion was excused due to the PARO's undue delay in acting on the protest and the urgency of preventing further alienation of the property while the protest remained pending.
• Due Process: Respondent argued it was deprived of due process because it never received the Notice of Coverage and Notice of Acquisition, which were sent to its old address, rendering the compulsory acquisition void.
• Land Classification: Respondent insisted its lots were classified as residential prior to the effectivity of R.A. No. 6657, supported by certifications from the NIA and the Municipal Engineer based on the HLURB-approved Land Use Plan.

• Exhaustion of Administrative Remedies: Whether respondent was justified in bypassing the DAR and filing a judicial petition without exhausting administrative remedies.
• Due Process: Whether respondent was deprived of its right to procedural due process due to the DAR's failure to properly serve the required notices.
• Land Classification: Whether the subject parcels of land are residential and thus outside the coverage of R.A. No. 6657.

• Exhaustion of Administrative Remedies: The doctrine of exhaustion of administrative remedies was correctly disregarded by the Court of Appeals. The PARO's inaction for over a year on respondent's protest, coupled with the ongoing alienation of respondent's titles, constituted circumstances indicating the urgency of judicial intervention and rendered the administrative action patently illegal for lack of jurisdiction. A landowner cannot be expected to wait indefinitely for the DAR to resolve a protest while its property is being transferred to third parties.
• Due Process: Respondent was deprived of procedural due process. Section 16(a) of R.A. 6657 requires personal delivery or registered mail of the notice to acquire. Petitioner failed to prove proper service; the alleged signature on the notice was illegible and the recipient unidentified. Proper notice is essential in eminent domain proceedings to inform the owner of the claim against them. Because the DAR did not strictly comply with the mandatory notice requirements, the compulsory acquisition proceedings were void.
• Land Classification: The factual issue of whether the land is residential was never determined by the lower courts; thus, it could not be conclusively ruled upon by the Supreme Court. The matter was remanded to the DAR for appropriate proceedings to determine the land's classification.

• Doctrine of Exhaustion of Administrative Remedies — The doctrine requires that before a party may seek judicial intervention, it must first exhaust all available administrative remedies. However, the doctrine is relative and flexible, and is disregarded when: (a) there are circumstances indicating the urgency of judicial intervention; (b) the administrative action is patently illegal and amounts to lack or excess of jurisdiction; or (c) the administrative body unreasonably delays action, creating official indifference. Applied here to excuse the landowner from waiting for the DAR to resolve a protest it had sat on for over a year while titles were being cancelled.
• Due Process in Eminent Domain — The taking of private property under the power of eminent domain requires strict observance of procedural due process. Under R.A. 6657, the landowner must be properly notified of the acquisition through personal delivery or registered mail. Failure to serve the required notices invalidates the compulsory acquisition proceedings, as the CARL was not intended to take away property without due process of law.

• "The doctrine of exhaustion of administrative remedies is a relative one and is flexible depending on the peculiarity and uniqueness of the factual and circumstantial settings of a case."
• "It is elementary that before a person can be deprived of his property, he should be informed of the claim against him and the theory on which such claim is premised."

• Natalia Realty vs. Department of Agrarian Reform, G.R. No. 103302, August 12, 1993, 225 SCRA 278 — Followed. Held that aggrieved landowners need not wait for the DAR to act on their protests after sitting on them for almost a year before resorting to judicial process.
• Roxas & Co., Inc. vs. Court of Appeals, 378 Phil. 727, 762-763 (1999) — Followed. Enumerated the two notices required for a valid implementation of the CAR program: (1) Notice of Coverage and letter of invitation to preliminary conference; and (2) Notice of Acquisition under Section 16 of R.A. 6657.
• Association of Small Landowners in the Philippines vs. Secretary of Agrarian Reform, 175 SCRA 343, 373-374 (1989) — Cited for the proposition that CARL involves both the exercise of police power (prescribing retention limits) and the power of eminent domain (taking of excess land).
• Ang Ping vs. Court of Appeals, G.R. No. 126947, July 15, 1999, 310 SCRA 343 — Cited for the principle that a person must be informed of the claim against them before being deprived of property.

• Section 16(a), Republic Act No. 6657 (Comprehensive Agrarian Reform Law of 1988) — Prescribes the procedure for acquiring private lands, requiring the DAR to send notice to acquire the land to the owners by personal delivery or registered mail. Applied to show that DAR failed to comply with mandatory notice requirements.
• Section 4, Republic Act No. 6657 — Defines the coverage of CARL as "all public and private agricultural lands."
• Section 3(c), Republic Act No. 6657 — Defines "agricultural land" as land devoted to agricultural activity and not classified as mineral, forest, residential, commercial, or industrial land. Applied to establish the criteria for exemption from CARL coverage.
• Section 1, Article III, 1987 Constitution — The Bill of Rights provision stating that no person shall be deprived of life, liberty, or property without due process of law. Applied to invalidate the acquisition proceedings due to lack of proper notice.

Puno (Chairman), Panganiban, Corona, and Carpio-Morales.