Republic of the Philippines vs. Court of Appeals

The Court held that Regional Trial Courts sitting as Special Agrarian Courts have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners under R.A. No. 6657. The DAR and its adjudicators are empowered only to make preliminary determinations of reasonable compensation; any administrative rule or practice that vests original jurisdiction in adjudicators and converts the RTC's original jurisdiction into appellate jurisdiction is void for contravening Section 57 of R.A. No. 6657.

Private respondent Acil Corporation owned several hectares of land in Linoan, Montevista, Davao del Norte, which the government took pursuant to the Comprehensive Agrarian Reform Law (R.A. No. 6657). Private respondent's certificates of title were cancelled and new ones were issued to farmer-beneficiaries. The Land Bank of the Philippines (LBP) valued the properties based on a "Statement of Agricultural Landholdings" (LISTASAKA) previously filed by private respondent, fixing the total compensation at P390,557.84. Private respondent rejected this valuation, asserting that nearby lands planted to the same crops were valued higher at P24,717.40 per hectare.

• The Taking and Initial Valuation: Private respondent Acil Corporation owned several hectares of land in Linoan, Montevista, Davao del Norte, which the government took under R.A. No. 6657. Private respondent's titles were cancelled and new titles were issued to farmer-beneficiaries. The LBP initially valued the riceland at P19,312.24 per hectare and the brushland at P4,267.68 per hectare, totaling P439,105.39.
• The LISTASAKA Valuation: Based on a "Statement of Agricultural Landholdings" (LISTASAKA) previously filed by private respondent with the DAR, which stated a lower "Fair Value Acceptable to Landowner," the LBP adjusted its valuation uniformly to P15,311.79 per hectare, fixing the total compensation at P390,557.84.
• Administrative Protest: Private respondent rejected the government's offer, contending that nearby lands planted to the same crops were valued at P24,717.40 per hectare. The matter was brought before the PARAD, who sustained the LBP's valuation on October 8, 1992.
• Resort to the RTC: On December 12, 1992, private respondent filed a Petition for Just Compensation in the RTC of Tagum, Davao del Norte, sitting as a Special Agrarian Court, praying that the DAR be ordered to pay P24,717.40 per hectare. The RTC dismissed the petition on the grounds that private respondent should have first appealed to the DARAB and that the petition was filed out of time.

• Petitioners argued that under Section 50 of R.A. No. 6657, the DAR is vested with primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over all matters involving the implementation of agrarian reform.
• Petitioners maintained that the fixing of just compensation for the taking of lands under R.A. No. 6657 is a matter involving the implementation of agrarian reform, thereby falling within the DAR's exclusive original jurisdiction.
• Petitioners contended that Section 16(f) of R.A. No. 6657, which allows a party who disagrees with the DAR's decision to bring the matter to the court of proper jurisdiction, confirms that an appeal to the DARAB must first be exhausted before resorting to the RTC.
• Petitioners invoked Rule II, Section 5 and Rule XIII, Section 1 of the DARAB Rules of Procedure, which provide that decisions of provincial adjudicators may only be appealed to the DARAB.

• Respondent countered that a petition for just compensation under Sections 56 and 57 of R.A. No. 6657 falls under the exclusive and original jurisdiction of the RTC sitting as a Special Agrarian Court.
• Respondent argued that prior recourse to the DARAB is unnecessary because the RTC's jurisdiction over just compensation cases is original and exclusive.

• Procedural Issues:
  • Whether a landowner must first appeal the decision of the Provincial Agrarian Reform Adjudicator (PARAD) to the DARAB before resorting to the RTC sitting as a Special Agrarian Court in a petition for just compensation.
• Substantive Issues:
  • Whether the determination of just compensation under R.A. No. 6657 falls under the DAR's exclusive original jurisdiction over matters involving the implementation of agrarian reform, or under the original and exclusive jurisdiction of the Special Agrarian Courts.

• Procedural: The Court ruled that a landowner need not appeal the PARAD's decision to the DARAB before filing a petition in the RTC. Because the RTC, sitting as a Special Agrarian Court, has original and exclusive jurisdiction over petitions for just compensation under Section 57 of R.A. No. 6657, requiring prior exhaustion of administrative appeals before the DARAB would subvert the RTC's original jurisdiction by converting it into an appellate court.
• Substantive: The Court ruled that the determination of just compensation is an essentially judicial function that cannot be vested in administrative agencies. Section 57 of R.A. No. 6657 grants Special Agrarian Courts original and exclusive jurisdiction over all petitions for the determination of just compensation, which constitutes an exception to the DAR's general jurisdiction under Section 50. DAR adjudicators are empowered only to determine in a preliminary manner the reasonable compensation to be paid. Any effort to transfer original jurisdiction to adjudicators and convert the RTC's original jurisdiction into appellate jurisdiction is void for being contrary to Section 57.

• Original and Exclusive Jurisdiction of Special Agrarian Courts — Under Section 57 of R.A. No. 6657, Regional Trial Courts sitting as Special Agrarian Courts possess original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners. The preliminary determination of just compensation by DAR adjudicators does not divest the RTC of this original and exclusive jurisdiction, nor does it convert the RTC into an appellate court for such cases.
• Eminent Domain as an Essentially Judicial Function — The valuation of property in eminent domain proceedings is essentially a judicial function that cannot be vested in administrative agencies. Because takings under R.A. No. 6657 are exercises of eminent domain, the ultimate determination of just compensation must rest with the courts.

• "The DAR is an administrative agency which cannot be granted jurisdiction over cases of eminent domain (for such are takings under R.A. No. 6657) and over criminal cases."
• "It would subvert this 'original and exclusive' jurisdiction of the RTC for the DAR to vest original jurisdiction in compensation cases in administrative officials and make the RTC an appellate court for the review of administrative decisions."
• "What adjudicators are empowered to do is only to determine in a preliminary manner the reasonable compensation to be paid to landowners, leaving to the courts the ultimate power to decide this question."

• EPZA v. Duly, 149 SCRA 305 (1987) — Followed. The Court cited this case to support the doctrine that the valuation of property in eminent domain is essentially a judicial function which cannot be vested in administrative agencies.
• Sumulong v. Guerrero, 154 SCRA 461 (1987) — Followed. Cited alongside EPZA v. Duly to reinforce the principle that eminent domain valuation is a judicial function.
• Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 366 (1989) — Followed. Cited to outline the proper procedure for determination of compensation cases under R.A. No. 6657, where a landowner who does not agree with the price fixed administratively may bring the matter to the RTC.

• Section 50, R.A. No. 6657 (Quasi-Judicial Powers of the DAR) — Vests the DAR with primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over matters involving the implementation of agrarian reform. The Court held that cases involving the determination of just compensation are excepted from this plenitude of power, as they fall under the original and exclusive jurisdiction of the RTC.
• Section 57, R.A. No. 6657 (Special Jurisdiction) — Grants Special Agrarian Courts (RTCs) original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners. The Court applied this provision to rule that the RTC's original jurisdiction cannot be converted into appellate jurisdiction by requiring prior DARAB appeals.
• Section 16(f), R.A. No. 6657 — Provides that any party who disagrees with the decision of the DAR may bring the matter to the court of proper jurisdiction for final determination of just compensation. The Court construed this as confirming that the ultimate determination of just compensation rests with the courts, not as requiring exhaustion of the DARAB appellate process.
• Rule XIII, Section 11, New Rules of Procedure of the DARAB — Provides that decisions of adjudicators on land valuation and preliminary determination of just compensation shall not be appealable to the Board but shall be brought directly to the RTCs designated as Special Agrarian Courts. The Court noted this as an acknowledgment by the DARAB that the final determination of just compensation is a power vested in the courts.

Regalado, Romero, Puno, and Torres, Jr., JJ.