LBP vs. Dalauta

G.R. No. 190004. August 8, 2017.

FACTS:

Eugenio Dalauta (Dalauta) was the registered owner of agricultural land in Florida, Butuan City, with an area of 25.2160 hectares. In 1994, the land was placed by the Department of Agrarian Reform (DAR) under compulsory acquisition of the Comprehensive Agrarian Reform Program (CARP). LBP offered P192,782.59 as compensation for the land, but Dalauta rejected such valuation for being too low.

The DAR Adjudication Board (DARAB) through the Provincial Agrarian Reform Adjudicator (PARAD), in a summary administrative proceeding, determined the appropriate just compensation for the subject property. It affirmed the valuation made by LBP.

In 2000, Dalauta filed a petition for determination of just compensation with the RTC, sitting as SAC. It constituted the Board of Commissioners (Commissioners) tasked to inspect the land and to make a report thereon. The report recommended that the value of the land be pegged at P100,000.00 per hectare.

The SAC taking into consideration the Commissioners Report directed LBP to pay – (a) 2,639,557.00 value of the land; (b) P100,000 for the farmhouse; (c) Reasonable legal fees and litigation expenses.

LBP filed a petition for review under Rule 42 of the Rules of Court before the CA, arguing –
That the SAC erred in taking cognizance of the case when the DARAB decision sustaining the LBP valuation had long attained finality;
that the SAC erred in taking judicial notice of the Commissioners’ Report without conducting a hearing; and
that the SAC violated the Republic Act (R.A.) No. 6657 and DAR A.O. No. 6, series of 1992, in fixing the just compensation.

The CA ruled that the SAC correctly took cognizance of the case. It sustained the valuation by the SAC for being well within R.A. No. 6657.

ISSUE/S:

1. Whether the trial court had properly taken jurisdiction over the case despite the finality of the PARAD Resolution.
2. Whether or not the case already prescribed.

HELD:

YES. The RTC, acting as a Special Agrarian Court (SAC), may exercise its exclusive original jurisdiction under Section 57 of R. A. No. 6657 to determine just compensation to landowners despite the lapse of 15 days from receipt by the landowner of the adjudicator’s decision fixing the just compensation. 

In all these cases, it was uniformly decided that the petition for determination of just compensation before the SAC should be filed within the period prescribed under the DARAB Rules, that is, “within fifteen ( 15) days from receipt of the notice thereof.”

In Export Processing Zone Authority v. Dulay,  the Court ruled that the valuation of property in eminent domain is essentially a judicial function that cannot be vested in administrative agencies. “The executive department or the legislature may make the initial determination, but when a party claims a violation of the guarantee in the Bill of Rights that private property may not be taken for public use without just compensation, no statute, decree, or executive order can mandate that its own determination shall prevail over the court’s findings.

In Land Bank of the Philippines v. Heir of Trinidad S. V da. De Arieta : 

In both voluntary and compulsory acquisitions, wherein the landowner rejects the offer, the DAR opens an account in the name of the landowner and conducts a summary administrative proceeding. If the landowner disagrees with the valuation, the matter may be brought to the RTC, acting as a special agrarian court. But as with the DAR-awarded compensation, LBP’s valuation of lands covered by CARL is considered only as an initial determination, which is not conclusive, as it is the RTC, sitting as a Special Agrarian Court, that should make the final determination of just compensation, taking into consideration the factors enumerated in Section 17 of R.A. No. 6657 and the applicable DAR regulations. xxx

2. NO. While R.A. No. 6657 itself does not provide for a period within which a landowner can file a petition for the determination of just compensation before the SAC, it cannot be imprescriptible. Considering that the payment of just compensation is an obligation created by law, it should only be ten (10) years from the time the landowner received the notice of coverage. (Article 1144, NCC).

Nevertheless, any interruption or delay caused by the government like proceedings in the DAR should toll the running of the prescriptive period. In this case, Dalauta received the Notice of Coverage on February 7, 1994.43 He then filed a petition for determination of just compensation on February 28, 2000. Clearly, the filing date was well within the ten year prescriptive period under Article 1141.

Notes: 

Concurrent Exercise of Jurisdiction – 

There may be situations where a landowner, who has a pending administrative case before the DAR for determination of just compensation, still files a petition before the SAC for the same objective. Such recourse is not strictly a case of forum shopping, the administrative determination being not resjudicata binding on the SAC. 

Nevertheless, the practice should be discouraged. To prevent such a messy situation, a landowner should withdraw his case with the DAR before filing his petition before the SAC and manifest the fact of withdrawal by alleging it in the petition itself.