MATEO v. DAR

Vivencio Mateo, et al. Vs. Department of Agrarian Reform, Land Bank of the Philippines and Mariano T. Rodriguez, et al.

G.R. No. 186339

February 15, 2017

FACTS:

The Mateos were the registered owners of coconut and rice lands with a total area of 1,323,112 square meters situated at Fabrica, Bacon, Sorsogon and were covered by TCT No. T-22822. A portion of the lands was brought under the coverage of the CARP of the government and for this reason, the DAR entered the premises sometime in June 1994. LBP valued the Mateos' land at fifty-two thousand pesos (₱52,000.00) per ha. The Mateos, however, rejected the LBP's valuation. On April 30, 1997, the Mateos filed a complaint against LBP, DAR, and the farmer beneficiaries of the land for just compensation. The case was docketed as Civil Case No. 97-6331 and raffled to the SAC, presided by respondent Judge Honesto A. Villamor.

The LBP and DAR filed their respective answers arguing that since no summary administrative proceedings to determine the amount of just compensation had been conducted yet, the complaint of the Mateos was premature.

Pre-trial ensued and was terminated. The SAC granted the request of the parties for the appointment of two commissioners, namely, Mr. Jesus Empleo and Engr. Florencio Dino (Engr. Dino), to represent the LBP and the Mateos, respectively. Among the evidence offered by the Mateos during the trial were: (a) the testimonies of their father, Dr. Eleseo Mateo, Engr. Dino, farmer Manuel Docot and caretaker Danilo Federio; (b) TCT No. T-22822; (c) Memorandum of Valuation (MoV), Claim Folder Profile and Valuation Summary of Agricultural Land; (d) deeds of sale covering two parcels of land less than two ha in size in Sorsogon, which were purchased for ₱300,000.00 and ₱400,000.00 per ha; (e) newspaper clipping of Eduardo Cojuangco, who was selling his land in Sorsogon for ₱350,000.00 per ha; (f) Engr. Dino's Report; and (g) deed of sale of a lot in Cabi-an, Sorsogon bought by the government for ₱245,000.00 per ha.

On the other hand, the DAR presented: (a) the testimonies of agriculturist Romeo Brotamante, government employee Ireneo Defeo and farmer Cresenciano Lagajeno; (b) a Field Investigation Report dated March 29, 1996; (c) ledger cards bearing dates from December 2, 1994 to June 9, 1997; and (d) two pass books, the second of which indicated withdrawals in the total amount of ₱601,789.97.The LBP, on its part, offered (a) the testimony of Monita Balde, and (b) a Claims Valuation and Processing Form.

The decretal portion of the SAC Decision13 dated July 4, 2002 reads:

WHEREFORE, premises considered, judgment is hereby rendered:

1. Fixing the amount of SEVENTY-ONE MILLION, ONE HUNDRED FORTY-THREE THOUSAND, SIX HUNDRED TWENTY-THREE ([₱]71,143,623.00) Pesos, Philippine currency[,] to be the just compensation for the l12[.]3112 [has] of agricultural land situated at Fabrica, District of Bacon, City of Sorsogon covered by TCT No. T-22822 owned by the [Mateos] which property was taken by the government pursuant to the [CARP] of the government [as] provided by R.A. N[o]. 6657.

2. Ordering the [LBP] to pay the [Mateos] the amount of Seventy-One Million, one Hundred forty-three thousand[,] six hundred twenty-three (₱71,143,623.00) Pesos[,] Philippine currency[,] in the manner provided by R.A. No. 6657 by way of full payment of the said just compensation after deducting whatever amount [was] previously received by the [Mateos] from the [LBP] as part of the just compensation.

3. Without pronouncement as to cost The LBP and the DAR both filed notices of appeal, but no brief was filed by the latter before the CA. On August 4, 2008, the CA rendered the herein assailed Decision23 setting aside the SAC's judgment and dismissing without prejudice the complaint of the Mateos.

The CA explained that:

Since the DARAB is clothed with quasi-judicial authority to make a preliminary determination of just compensation of lands acquired under R.A. No. 6657, x x x and it appearing from the records and [the Mateos'] own admission that [the] said administrative agency had not yet taken cognizance of, and passed upon the issue of just compensation when [the Mateos] prematurely filed with the court a quo the complaint for determination of just compensation, thus failing to exhaust the prescribed administrative remedy and, in the process, preventing the DARAB from complying with [the] said administrative process which is mandatory, We resolve to grant the appeal.

Jurisprudence teems with pronouncements that before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have availed of all the means of administrative processes afforded him.x x x The premature invocation of [the] court's intervention is fatal to one's cause of action[.] x x x[.]

ISSUE:

1. Whether or not the CA erred in negating the jurisdiction of the RTC, as a SAC, to determine in the first instance and in the absence of the conduct of prior administrative proceedings, questions of just compensation to be paid to landowners.

2. Whether or not the CA erroneously held that the SAC disregarded the provisions of Section 17 of R.A. No. 6657 in determining the amount of just compensation to be paid for the subject property.

RULING:

The instant petition is partially meritorious.

On jurisdiction and the doctrine of exhaustion of administrative remedies: Section 50 of R.A. No. 6657, in part, provides that 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" except those falling under the jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources. Section 57, on the other hand, confers "special" and "original and exclusive" jurisdiction to the SAC over all petitions of landowners for the determination of just compensation.

Anent the application of Sections 50 and 57 of R.A. No. 6657, in relation to the proper procedure which must be followed in cases involving determination of just compensation for landowners, Ramon Alfonso v. LBP and DAR42 is emphatic that. In San Miguel Properties, Inc. v. Perez, we explained the reasons why Congress, in its judgment, may choose to grant primary jurisdiction over matters within the erstwhile jurisdiction of the courts, to an agency.

The doctrine of primary jurisdiction bas been increasingly called into play on matters demanding the special competence of administrative agencies even if such matters are at the same time within the jurisdiction of the courts. A case that requires for its determination the expertise, specialized skills, and knowledge of some administrative board or commission because it involves technical matters or intricate questions of fact, relief must first be obtained in an appropriate administrative proceeding before a remedy will be supplied by the courts although the matter comes within the jurisdiction of the courts. The application of the doctrine does not call for the dismissal of the case in the court but only for its suspension until after the matters within the competence of the administrative body are threshed out and determined.

The CA erred in ordering the dismissal of the Mateos' complaint before the SAC. The doctrine of exhaustion of administrative remedies finds no application in the instant case where the DAR took no initiative and inordinately delayed the conduct of summary administrative proceedings, and where during the pendency of the case before the SAC, the DARAB rendered decisions affirming the LBP's prior valuations of the subject property. It is significant to note that R.A. No. 6657 was first amended by R.A. No. 8532,62 which augmented the funds in the implementation of the CARP. Thereafter, Section 7 of R.A. No. 970063 amended Section 17 of R.A. No. 6657, which now reads as follows: Sec. 17. Determination of Just Compensation. -In determining just compensation, the cost of acquisition of the land, the value of the standing crop, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, the assessment made by government assessors, and seventy percent (70%) of the zonal valuation of the Bureau of Internal Revenue (BIR), translated into a basic formula by the DAR, shall be considered, subject to the final decision of the proper court. The social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property as well as the non-payment of taxes or loans secured from any government financing institution on the said land shall be considered as additional factors to determine its valuation. (Underscoring ours) On the other hand, the transitory provision of DAR AO No. 2, series of 2009,64 in part, provides that "with respect to land valuation, all Claim Folders received by LBP prior to July 1, 2009 shall be valued in accordance with Section 17 of R.A. No. 6657 prior to its amendment by R.A. No. 9700." Accordingly then, in LBP v. Heirs of Jesus Alsua,65 the Court "excepted from the application of the amended Section 17 all claim folders received by LBP prior to July 1, 2009, which shall be valued in accordance with Section 17 of [R.A. No.] 6657, as amended, prior to its further amendment by [R.A.] No. 9700."66 In the case of the Mateos, the Claim Folder was received by LBP earlier than July 1, 2009; hence, the amendments in Section 17, as introduced by R.A. No. 9700, shall not be applicable. Just compensation shall be determined in accordance with Section 17 of R.A. No. 6657 prior to its amendment by R.A. No. 9700. IN VIEW OF THE FOREGOING, the petition is PARTIALLY GRANTED. The Decision and Resolution dated August 4, 2008 and January 28, 2009, respectively, of the Court of Appeals in CA-G.R. CV No. 79581 are hereby REVERSED only insofar as they dismissed the complaint for just compensation filed by Vivencio Mateo, Eugenio Mateo, Joji Mateo Morales and Myrna Mateo Santos. However, the petition is DENIED insofar as it seeks to sustain the valuation of the subject property in Civil Case No. 97-6331 made by the Regional Trial Court of Sorsogon City, Sorsogon, Branch 52, sitting as Special Agrarian Court.

The case is hereby REMANDED to the trial court to determine with utmost dispatch the just compensation due to Vivencio Mateo, Eugenio Mateo, Joji Mateo Morales and Myrna Mateo Santos strictly in accordance with Section 17 of Republic Act No. 6657 prior to its amendment by Republic Act No. 9700, pertinent Administrative Orders issued by the Department of Agrarian Reform, and the guidelines set forth in this Decision. To be deducted from the final valuation is the total amount withdrawn by Vivencio Mateo, Eugenio Mateo, Joji Mateo Morales and Myrna Mateo Santos from the cash and Agrarian Reform Bonds deposited in their names by the Land Bank of the Philippines. The remaining balance shall be subject to annual legal interest at the rate of twelve percent (12%) from the time of taking until June 30, 2013, and six percent (6%) from July 1, 2013 until full payment. The trial court is directed to SUBMIT a report on its findings and recommendations within SIX (6) MONTHS from notice hereof.