Gonzales vs. Court of Appeals

A landowner challenging DAR orders issued under the operation land transfer program must first exhaust administrative remedies before the DARAB or RARAD, and thereafter the Special Agrarian Court, before resorting to certiorari and prohibition in the Court of Appeals; failure to do so is fatal to the cause of action.

The case concerns the government's Operation Land Transfer under Presidential Decree No. 27 and the administrative structure for agrarian reform compensation. Petitioner Lilia Y. Gonzales is the landowner of parcels situated in Naga, Pototan, Iloilo; respondent Antonio S. Maraya was the DAR Regional Director for Region VI, while respondent Land Bank of the Philippines was ordered to pay compensation. The DARAB was created under Executive Order No. 129-A to adjudicate agrarian disputes, including valuation and just compensation, and the Revised Rules of Procedure of the DARAB vest it with primary jurisdiction over such matters. The dispute arises against this statutory and regulatory backdrop, with the DAR Regional Office exercising functions under the Administrative Code of 1987 and Executive Order No. 129-A.

Petitioner Lilia Y. Gonzales received two Orders dated November 27, 1990 and April 22, 1991 from the Regional Office of the Department of Agrarian Reform, signed by respondent DAR Regional Director Antonio S. Maraya, and issued pursuant to the operation land transfer program of the government under Presidential Decree No. 27. The Orders directed petitioner to surrender the titles to her land, identified as Title Nos. T-41352 and T-81463, and to submit the other requirements of respondent Land Bank of the Philippines, while the Land Bank was ordered to pay petitioner an aggregate amount of P55,690.74 as compensation for the two parcels of land.

On December 20, 1991, petitioner filed a Petition for Certiorari and Prohibition with Temporary Restraining Order with the Court of Appeals to restrain the enforcement and to annul the two Orders of the DAR Regional Director on the ground of lack or excess of jurisdiction. Petitioner alleged that she never filed a land transfer claim and was not notified of nor heard in the execution of the final survey plans and the valuation of her land.

Respondents DAR Regional Director and the private respondents countered that petitioner had been duly served three notices dated February 23, 1990, March 5, 1990, and March 12, 1990, either through registered mail or personally through her representative or overseer, but the receipts and return cards thereof were destroyed by white ants at the Municipal Office of Pototan. They also maintained that although petitioner never filed any land transfer claim with the DAR, such claim may be validly filed by the Municipal Agrarian Reform Officer because the subject land is clearly covered by the operation land transfer program under PD 27 and may therefore be compulsorily transferred by operation of law.

After requiring the respondents to file their Comment, the Court of Appeals rendered a Decision dated June 29, 1992, denying due course to and dismissing the petition for failure of petitioner to exhaust administrative remedies. The Court of Appeals also held that certiorari cannot be used by petitioner as a substitute for appeal of the assailed issuances. Hence, petitioner filed the present petition.

The assailed Orders involved parcels of land situated in Naga, Pototan, Iloilo and were issued by the Regional Director of the DAR Region VI Office in Iloilo City. The alleged denial of petitioner's right to due process was intertwined with the question of notice upon petitioner, which raised basically a factual matter, namely, whether three notices were properly served upon her.

• Exhaustion of Administrative Remedies: Petitioner contended that the petition for certiorari and prohibition filed with the Court of Appeals came within the exceptions to the rule on exhaustion of administrative remedies: (1) where the questioned order is a patent nullity; (2) where there is a deprivation of the petitioner's fundamental right to due process; and (3) where the question involved is a purely legal one.
• Proper Remedy: Petitioner argued that certiorari, not appeal, was the proper remedy because a question of jurisdiction prescinding from the alleged denial of due process was raised, and the questioned Orders were merely interlocutory and hence unappealable.
• Lack of Land Transfer Claim: Petitioner maintained that the Orders were baseless because she never filed any land transfer claim with the DAR.
• Due Process Violation: Petitioner asserted that the Orders were issued in violation of her right to due process because she was never notified of the approved final survey plan, the land valuation summary, and the farmer's undertaking.
• Repeal of PD 27: Petitioner argued that the Orders fixed just compensation based on the provisions of PD 27, which is inconsistent with, and therefore has already been repealed by, Republic Act No. 6657.
• Assigned Errors: Petitioner assigned as errors the Court of Appeals' dismissal of the petition for failure to exhaust administrative remedies and its failure to hold that respondents DAR Director and Land Bank were acting without or in excess of jurisdiction in issuing the Orders dated November 27, 1990 and April 22, 1991.

• Available Administrative Remedies: The public respondent DAR Regional Director and the private respondents countered that there still were plain, speedy, and adequate remedies which petitioner could have availed of prior to filing the Petition for Certiorari and Prohibition with the Court of Appeals, such as a Motion for Reconsideration of the assailed Orders, an appeal to the Department of Agrarian Reform Adjudication Board, or even to the Special Agrarian Court.
• Due Process: They contended that the allegation of lack of due process was baseless because petitioner had been duly served three notices dated February 23, 1990, March 5, 1990, and March 12, 1990, either through registered mail or personally through her representative or overseer; the receipts and return cards thereof were destroyed by white ants at the Municipal Office of Pototan.
• Validity of Claim by MARO: They argued that although petitioner never filed any land transfer claim with the DAR, such claim may be validly filed by the Municipal Agrarian Reform Officer because the subject land is clearly covered by the operation land transfer program under PD 27 and may therefore be compulsorily transferred by operation of law.
• PD 27 Not Repealed: They averred that PD 27 was not repealed by RA 6657, and that some provisions of RA 6657 even recognize the continued application of PD 27.
• No Grave Abuse of Discretion: They maintained that the Orders were issued by respondent Regional Director in the faithful discharge of official functions and duties and without grave abuse of discretion, and therefore neither certiorari nor prohibition will lie.
• Land Bank's Contention: Respondent Land Bank raised a similar contention that questions on valuations made by the DAR should be addressed to the DARAB, not to the Court of Appeals.

• Exhaustion of Administrative Remedies: Whether the Court of Appeals erred in dismissing the petition for certiorari and prohibition for petitioner's failure to exhaust administrative remedies.
• Exceptions to Exhaustion: Whether the case falls within the exceptions to the exhaustion doctrine—patent nullity, denial of due process, or purely legal question.
• Jurisdiction and Validity of DAR Orders: Whether the DAR Regional Director and Land Bank acted without or in excess of jurisdiction in issuing the Orders dated November 27, 1990 and April 22, 1991.
• Proper Remedy: Whether certiorari and prohibition, rather than appeal or administrative recourse, were the proper remedies.

• Exhaustion of Administrative Remedies: No. The Court of Appeals correctly dismissed the petition; petitioner should have first sought reconsideration from the Regional Director or recourse before the DARAB or RARAD, with final recourse to the Special Agrarian Court.
• Exceptions to Exhaustion: No. None of the exceptions applied; the Orders were not patent nullities, the due process claim involved a factual question of notice, and the case did not raise a purely legal question.
• Jurisdiction and Validity of DAR Orders: No. The DAR Regional Director had authority under the Administrative Code of 1987 and Executive Order No. 129-A to issue the Orders pursuant to the operation land transfer program; objections to their propriety should have been raised before the administrative forum.
• Proper Remedy: No. Certiorari and prohibition were premature; the available administrative remedies, including DARAB review, had to be exhausted first.

• Exhaustion of Administrative Remedies: The thrust of the rule on exhaustion of administrative remedies is that courts must allow administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence. It is presumed that an administrative agency, if afforded an opportunity to pass upon a matter, will decide the same correctly or correct any previous error committed in its forum. Reasons of law, comity, and convenience prevent courts from entertaining cases proper for determination by administrative agencies, and premature resort to the courts is fatal to the petitioner's cause of action. The assailed Orders involved parcels of land in Naga, Pototan, Iloilo and were issued by the Regional Director of the DAR Region VI Office in Iloilo City. A Regional Director is the head of a DAR Regional Office which, under the Administrative Code of 1987, is responsible for supporting the field units and supervising program implementation of the Department within the region. The function of the DAR Regional Office includes implementing laws, policies, plans, rules, and regulations of the Department in the regional area, and a similar function is delegated to DAR Regional Offices under Executive Order No. 129-A. With such broad function and responsibility, the issuance of the assailed Orders pursuant to the operation land transfer and tenant emancipation program was within the authority and jurisdiction of the DAR Regional Director. However, questions as to the propriety of the issuance could still have been raised before the proper administrative forum. Instead of going directly to the Court of Appeals on certiorari, petitioner should have sought redress in the DARAB, and the latter's officials should have been given an opportunity to review the matter and resolve the controversy. The proper procedure was to move for reconsideration of the Orders of the Regional Director, or to go directly to the DARAB, or to its executive adjudicator in the region, the Regional Agrarian Reform Adjudicator. Prior resort to these administrative bodies would not only satisfy the rule on exhaustion but might also prove advantageous to the parties because the proceedings would be conducted by experts and would not be limited by technical rules of procedure and evidence. From there, petitioner had yet another forum available—the Special Agrarian Courts, which are the final determinants of cases involving land valuation or determination of just compensation. The procedural short-cut taken by petitioner had no justification in law and jurisprudence and was fatal to her cause of action.
• Exceptions to Exhaustion: Petitioner raised three exceptions to the doctrine of exhaustion of administrative remedies: where the questioned order is a patent nullity; where there is a deprivation of the petitioner's fundamental right to due process; and where the question involved is a purely legal one. None obtained. The Orders issued by the Regional Director pursuant to law were not patent nullities. The alleged denial of petitioner's right to due process was intertwined with the question of notice upon petitioner, which raised basically a factual matter—whether three notices were properly served upon her. That issue was not to be resolved by the Court of Appeals in the first instance on certiorari. The controversy did not raise a purely legal question.
• Jurisdiction and Validity of DAR Orders: The DAR Regional Director had authority to issue the assailed Orders under the Administrative Code of 1987 and Executive Order No. 129-A. The procedure for the determination of compensation for landowners under the land reform program, as outlined in Republic vs. Court of Appeals, is that the Land Bank of the Philippines is charged with the initial responsibility of determining the value of lands placed under agrarian reform and the compensation to be paid for their taking. Through notice sent to the landowner pursuant to Section 16(a) of RA 6657, the DAR makes an offer. If the landowner rejects the offer, a summary administrative proceeding is held, and afterward the provincial, regional, or central adjudicator, as the case may be, depending on the value of the land, fixes the price to be paid. If the landowner does not agree to the price fixed, he may bring the matter to the RTC acting as Special Agrarian Court. The DARAB was created under Executive Order No. 129-A to assume specific powers and functions with respect to the adjudication of agrarian reform cases. The Revised Rules of Procedure of the DARAB, already in effect when the petition was filed with the Court of Appeals, provided that the DARAB shall have primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program, including cases involving 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. Thus, the proper procedure was to move for reconsideration of the Regional Director's Orders or to go directly to the DARAB or RARAD. The Special Agrarian Courts remained available as final determinants of cases involving land valuation or determination of just compensation.
• Proper Remedy: Certiorari and prohibition were premature because petitioner bypassed the available administrative remedies. The petition for certiorari and prohibition was a procedural short-cut that found no justification in law and jurisprudence. The Court of Appeals therefore committed no error in dismissing the petition.

• Exhaustion of Administrative Remedies — Courts must allow administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence. It is presumed that an administrative agency, if afforded an opportunity to pass upon a matter, will decide the same correctly or correct any previous error committed in its forum. Reasons of law, comity, and convenience prevent courts from entertaining cases proper for determination by administrative agencies, and premature resort to the courts is fatal to the petitioner's cause of action. The recognized exceptions are: (1) where the questioned order is a patent nullity; (2) where there is a deprivation of the petitioner's fundamental right to due process; and (3) where the question involved is a purely legal one. In this case, none of the exceptions applied because the Orders were not patent nullities, the due process claim involved a factual question of notice, and the case did not raise a purely legal question.
• Primary Jurisdiction of the DARAB — The Department of Agrarian Reform Adjudication Board has primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive Order Nos. 229, 228 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. This jurisdiction specifically extends to cases involving 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. Petitioner should have raised her objections before the DARAB or RARAD instead of filing certiorari and prohibition directly with the Court of Appeals.
• Procedure for Determination of Just Compensation in Agrarian Reform — Under the land reform program, the Land Bank of the Philippines is charged with the initial responsibility of determining the value of lands placed under agrarian reform and the compensation to be paid for their taking. Through notice sent to the landowner pursuant to Section 16(a) of RA 6657, the DAR makes an offer. If the landowner rejects the offer, a summary administrative proceeding is held, and afterward the provincial, regional, or central adjudicator, as the case may be, depending on the value of the land, fixes the price to be paid. If the landowner does not agree to the price fixed, he may bring the matter to the RTC acting as Special Agrarian Court. The Special Agrarian Courts are the final determinants of cases involving land valuation or determination of just compensation. Petitioner bypassed this procedure.
• Certiorari and Prohibition as Procedural Short-Cuts — A petition for certiorari and prohibition cannot be used to bypass available administrative remedies. Where the proper administrative forum has primary jurisdiction and the case does not fall within the recognized exceptions to exhaustion, direct resort to the Court of Appeals is premature and fatal to the petitioner's cause of action.

• "The thrust of the rule on exhaustion of administrative remedies is that the courts must allow the administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence." — This passage states the rationale underlying the doctrine of exhaustion of administrative remedies, which the Court used to affirm the dismissal of the petition.
• "Hence, premature resort to the courts necessarily becomes fatal to the cause of action of the petitioner." — This passage states the consequence of failing to exhaust administrative remedies, which the Court applied to petitioner's direct resort to the Court of Appeals.
• "The proper procedure which the petitioner should have taken is to move for a reconsideration of the orders of the Regional Director, or to go directly to the DARAB, or to its executive adjudicator in the region, the Regional Agrarian Reform Adjudicator (RARAD)." — This passage identifies the administrative remedies petitioner should have pursued before filing certiorari and prohibition.
• "The Agrarian Reform Adjudicatory Board shall have primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act No.6657, Executive Order Nos. 229, 228 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." — This passage defines the DARAB's primary jurisdiction, which the Court relied on to hold that petitioner should have brought her objections before the DARAB or RARAD.

• Republic vs. Court of Appeals, 263 SCRA 758 (1996) — Outlined the procedure for the determination of compensation for landowners under the land reform program; relied on by the Court to show that petitioner bypassed the proper administrative and judicial sequence.
• Escano, Jr. vs. Court of Appeals, G.R. No. 101932, January 24, 2000 — Reiterated the compensation procedure outlined in Republic vs. Court of Appeals.
• Machete vs. Court of Appeals, 250 SCRA 176 (1995) — Cited in connection with the DARAB's creation and jurisdiction and the proper procedure for agrarian disputes.
• Presidential Commission on Good Government vs. Pena, 159 SCRA 556 (1988) — Cited for the rationale underlying exhaustion of administrative remedies.
• Factoran vs. Court of Appeals, 320 SCRA 530 (1999) — Cited for the principle that reasons of law, comity, and convenience prevent courts from entertaining cases proper for determination by administrative agencies.
• Land Bank of the Philippines vs. Court of Appeals, 318 SCRA 144 (1999) — Cited for the rule that Special Agrarian Courts are the final determinants of cases involving land valuation or determination of just compensation.

• Presidential Decree No. 27 — Decreed the emancipation of tenants from the bondage of the soil, transferring to them ownership of the land they till and providing the instruments and mechanism therefor. The assailed Orders were issued pursuant to the operation land transfer program under this decree. Petitioner argued that compensation was fixed under PD 27, while respondents argued that PD 27 was not repealed by RA 6657.
• Republic Act No. 6657 — The Comprehensive Agrarian Reform Law. Section 16(a) requires notice to the landowner, pursuant to which the DAR makes an offer. The Court cited the procedure for determination of compensation under this law. Petitioner argued that RA 6657 repealed PD 27; respondents argued that some provisions of RA 6657 recognize the continued application of PD 27.
• Executive Order No. 405 — Vested in the Land Bank of the Philippines the primary responsibility to determine land valuation and compensation for all lands covered under Republic Act No. 6657. The Court cited this in outlining the compensation procedure.
• Executive Order No. 129-A — Created the Department of Agrarian Reform Adjudication Board and delegated functions to DAR Regional Offices. The Court relied on this to establish the DARAB's jurisdiction and the DAR Regional Director's authority.
• Administrative Code of 1987, Title IX, Chapter 5, Sec. 18 — Provides that a DAR Regional Office is responsible for supporting field units and supervising program implementation of the Department within the region. The Court used this to conclude that the DAR Regional Director had authority to issue the assailed Orders.
• Revised Rules of Procedure of the DARAB, Section 1, Rule II — Vests the DARAB with primary jurisdiction, both original and appellate, over agrarian disputes, including 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. The Court applied this to require petitioner to exhaust administrative remedies. The rules were noted to have been suspended by the New Rules of Procedure of the DARAB adopted on May 30, 1994.
• Revised Rules of Procedure of the DARAB, Section 2, Rule XIV — Provides that Special Agrarian Courts are the final determinants of cases involving land valuation or determination of just compensation. The Court cited this to show the available remedy after DARAB proceedings.
• Rule 45, Rules of Court — Governs petitions for review on certiorari, the procedural vehicle petitioner used to bring the case to the Supreme Court.

Melo, Vitug, Panganiban, and Sandoval-Gutierrez, JJ., concur.