G.R. No.

L-54106 February 16, 1982

LUCRECIO PATRICIO, SEGUNDO DALIGDIG, FRANCISCO DALIGDIG, FLORENCIO ARELLANO and
EPIFANIO DALIGDIG, Petitioners, vs. ISABELO BAYOG, CONRADA, PEDRO, EMILIO, ALFONSO, DIONISIO
and ARSENIO, all surnamed MENDEZ, and COURT OF APPEALS, Respondents.
AQUINO, J.:
The legal issue in this case is whether the tenants hired by the purchaser of a homestead planted to coconuts
and bananas may be ejected by the homesteader's heirs who were allowed by the Court of Appeals to
repurchase the homestead and who desire to personally possess and till the
land.chanroblesvirtualawlibrary chanrobles virtual law library
As factual background, it should be stated that in 1934 Policarpio Mendez obtained a patent and Torrens title
for a homestead with an area of about twenty-three hectares located at Sitio Badiangon, Barrio Dalipuga,
Iligan City. He and his wife, Petra Macaliag and their nine children lived on the land, cleared it and planted
coconuts thereon.chanroblesvirtualawlibrary chanrobles virtual law library
In 1956, Mendez sold the homestead to the spouses Eugenio Lamberang and Ester Fuentes. In 1958, Mendez
and his children filed an action to annul the sale. Lamberang countered with an ejectment suit. On March 20,
1961, Mendez and his children filed an action against the Lamberang spouses for the reconveyance of the
homestead.chanroblesvirtualawlibrary chanrobles virtual law library
The three cases reached the Court of Appeals which in a decision dated January 3, 1977 ordered Lamberang to
reconvey the homestead to the Mendezes "free of all liens and encumbrances " upon their payment to
Lamberang of P19,411.28 as redemption price. That judgment became final and
executory.chanroblesvirtualawlibrary chanrobles virtual law library
The Court of Appeals also held that upon the execution of the deed of reconveyance and the delivery of the
redemption price to the Lamberang spouses, the Mendezes Would be "entitled to the possession and
occupancy" of the homestead. (Mendez vs. Lamberang, Lamberang vs. Bayug, and Mendez vs. Fuentes-
Lamberang CA-G.R. Nos. 50819-81-R.) chanrobles virtual law library
The Mendezes paid the redemption price and the Lamberang spouses reconveyed the homestead. Pursuant to
a writ of possession, a deputy sheriff placed Isabelo Bayog, the representative of the Mendez family in
possession of the homestead after ejecting the tenants of the Lamberang spouses named Lucrecio Patricio,
Florencio Arellano, Epifanio Daligdig, Francisco Daligdig and Segundo Daligdig, now the petitioners
herein.chanroblesvirtualawlibrary chanrobles virtual law library
However, the tenants reentered the homestead allegedly upon instruction of Bernardino O. Nuez, a trial
attorney of the Bureau of Agrarian Legal Assistant. Hence, the Mendezes filed a motion to declare them and
Nuez in contempt of court.chanroblesvirtualawlibrary chanrobles virtual law library
Before that contempt incident could be resolved, or on April 10, 1979, the tenants, represented by Nuez, filed
in the Court of Agrarian Relations at Iligan City a complaint for damages against the heirs of Policarpio
Mendez named Isabelo Bayog and Conrada, Pedro, Emilio, Alfonso, Dionisio and Arsenio, all surnamed
Mendez (CAR Case No. 92), now private respondents.chanroblesvirtualawlibrary chanrobles virtual law
library
By reason of an agreement between the parties at the hearing on October 22, 1979, the said tenants vacated
the land. They are now not in possession of the land (p. 5, Rollo).chanroblesvirtualawlibrary chanrobles
virtual law library
The Agrarian Court in its decision of December 12, 1979 held that the plaintiffs were "tenants of the
landholding in question" and ordered their reinstatement therein. The lower court directed the Mendezes to
pay them their "unrealized shares" in the coconuts.chanroblesvirtualawlibrary chanrobles virtual law library
The Agrarian Court concluded that the plaintiffs became the tenants of the Mendezes because the
Lamberangs, with whom they established a tenancy relationship, were not illegal possessors of the land,
having acquired it through a sale. The court said that under Section 10 of the Code of Agrarian Reform tenants
are entitled to security of tenure and that under section 36 of that Code, personal cultivation by the
landowner is no longer a ground for terminating tenancy. The Agrarian Court noted that Presidential Decree
No. 152 dated March 13, 1973, which prohibits the employment or use of share tenants in complying with the
requirements regarding entry, occupation and cultivation of public lands, is not applicable to the
case.chanroblesvirtualawlibrary chanrobles virtual law library
The Mendezes appealed to the Court of Appeals which on May 8, 1980 reversed the decision of the Agrarian
Court and declared that the Mendezes are "entitled to the homestead without the gravamen of plaintiffs'
tenancies" because the purpose of granting homesteads is "to distribute disposable agricultural lots of the
State to land destitute citizens for their home and cultivation" (Pascua vs. Talens, 80 Phil. 792, 793). That
policy would be defeated " if the buter can install permanents tenants in the homestead who would even have
the right of preemption" (Patricio vs. Bayog, CA-G. R. No. 10611-CAR ).chanroblesvirtualawlibrarychanrobles
virtual law library
The tenants appealed to this Court. They contend (a) that under section 118 of the Public Land Law, share
tenancy may be constituted in homestead after five years from the grant of the patent because section 119 of
the same law does not prohibit any encumbrance on the homestead after that period and (b) that they cannot
be ejected because they were not parties in any of the cases involving the Mendezes and
Lamberang.chanroblesvirtualawlibrary chanrobles virtual law library
This is a case where two competing interests have to be weighed against each other: the tenant's right to
security of tenure as against the right of the homesteader or his heirs to own a piece of land for their
residence and livelihood.chanroblesvirtualawlibrary chanrobles virtual law library
We hold that the more paramount and superior policy consideration is to uphold the right of the homesteader
and his heirs to own and cultivate personally the land acquired from the State without being encumbered by
tenancy relations. * chanrobles virtual law library
This holding is consistent with the intention of the Code of Agrarian Reform to abolish agricultural share
tenancy, "to establish owner-cultivatorship and the economic family-size farm as the basis of Philippine
agriculture and "to achieve a dignified existence for the small farmers free from pernicious institutional
restraints and practices" (Sec. 2).chanroblesvirtualawlibrary chanrobles virtual law library
WHEREFORE, the judgment of the Court of Appeals is affirmed. No
costs.chanroblesvirtualawlibrary chanrobles virtual law library
SO ORDERED.
---------------------------------------------------------------------

[G.R. No. 103302. August 12, 1993.]

NATALIA REALTY, INC., and ESTATE DEVELOPERS AND INVESTORS
CORP.,petitioners, vs. DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and DIR.
WILFREDO LEANO, DAR-REGION IV, respondents.

Loni M. Patajo for petitioners.
The Solicitor General for respondents.

SYLLABUS

1. POLITICAL LAW; STATUTORY CONSTRUCTION; A SPECIAL LAW PREVAILS OVER A GENERAL
LAW. The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions
and condominiums in general. On the other hand, Presidential Proclamation No. 1637 referred only
to the Lungsod Silangan Reservation, which makes it a special law. It is a basic tenet in statutory
construction that between a general law and a special law, the latter prevails (National Power
Corporation v. Presiding Judge, RTC, Br. XXV, G.R. No. 72477, 16 October 1990, 190 SCRA 477).
2. ID.; ADMINISTRATIVE LAW; NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES, JUSTIFIED
IN THE CASE AT BAR. Anent the argument that there was failure to exhaust administrative
remedies in the instant petition, suffice it to say that the issues raised in the case filed by SAMBA
members differ from those of petitioners. The former involve possession; the latter, the propriety of
including under the operation of CARL lands already converted for residential use prior to its
effectivity. Besides, petitioners were not supposed to wait until public respondents acted on their
letter-protests, this after sitting it out for almost a year. Given the official indifference, which under
the circumstances could have continued forever, petitioners had to act to assert and protect their
interests. (Rocamora v. RTC-Cebu, Br. VIII, G.R. No. 65037, 23 November 1988, 167 SCRA 615).
3. CIVIL LAW; LAND REGISTRATION; AGRICULTURAL LAND, DEFINED; LANDS NOT DEVOTED
TO AGRICULTURAL ACTIVITY, OUTSIDE THE COVERAGE OF CARL. Section 4 of R.A. 6657 provides
that the CARL shall "cover, regardless of tenurial arrangement and commodity produced, all public
and private agricultural lands." As to what constitutes "agricultural land," it is referred to as "land
devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential,
commercial or industrial land." (Sec. 3 (c), R.A. 6657) The deliberations of the Constitutional
Commission confirm this limitation. "Agricultural lands" are only those lands which are "arable and
suitable agricultural lands" and "do not include commercial, industrial and residential lands." (Luz
Farms v. Secretary of the Department of Agrarian Reform, G.R. No. 86889, 4 December 1990, 192
SCRA 51, citing Record, CONCOM, 7 August 1986, Vol. III, p. 30) Indeed, lands not devoted to
agricultural activity are outside the coverage of CARL. These include lands previously converted to
non-agricultural uses prior to the effectivity of CARL by government agencies other than respondent
DAR. In its Revised Rules and Regulations Governing Conversion of Private Agricultural Lands to
Non-Agricultural Uses, (DAR Administrative Order No. 1, Series of 1990), DAR itself defined
"agricultural land" thus ". . . Agricultural land refers to those devoted to agricultural activity as
defined in R.A. 6657 and not classified as mineral or forest by the Department of Environment and
Natural Resources (DENR) and its predecessor agencies, and not classified in town plans and zoning
ordinances as approved by the Housing and Land Use Regulatory Board (HLURB) and its preceding
competent authorities prior to 15 June 1988 for residential, commercial or industrial use." The
Secretary of Justice, responding to a query by the Secretary of Agrarian Reform, noted in an Opinion
that lands covered by Presidential Proclamation No. 1637, inter alia, of which the NATALIA lands are
part, having been reserved for townsite purposes "to be developed as human settlements by the
proper land and housing agency," are "not deemed 'agricultural lands' within the meaning and intent
of Section 3 (c) of R.A. No. 6657." Not being deemed "agricultural lands," they are outside the
coverage of CARL.

D E C I S I O N

BELLOSILLO, J p:
Are lands already classified for residential, commercial or industrial use, as approved by the Housing and
Land Use Regulatory Board and its precursor agencies
1
prior to 15 June 1988,
2
covered by R.A. 6657,
otherwise known as the Comprehensive Agrarian Reform Law of 1988? This is the pivotal issue in this
petition for certiorari assailing the Notice of Coverage
3
of the Department of Agrarian Reform over parcels of
land already reserved as townsite areas before the enactment of the law.
Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous parcels of land
located in Banaba, Antipolo, Rizal, with areas of 120.9793 hectares, 1.3205 hectares and 2.7080 hectares, or a
total of 125.0078 hectares, and embraced in Transfer Certificate of Title No. 31527 of the Register of Deeds of
the Province of Rizal.
On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land located in the
Municipalities of Antipolo, San Mateo and Montalban as townsite areas to absorb the population overspill in
the metropolis which were designated as the Lungsod Silangan Townsite. The NATALIA properties are
situated within the areas proclaimed as townsite reservation.
Since private landowners were allowed to develop their properties into low-cost housing subdivisions
within the reservation, petitioner Estate Developers and Investors Corporation (EDIC, for brevity), as
developer of NATALIA properties, applied for and was granted preliminary approval and locational clearances
by the Human Settlements Regulatory Commission. The necessary permit for Phase I of the subdivision
project, which consisted of 13.2371 hectares, was issued sometime in 1982;
4
for Phase II, with an area of
80.0000 hectares, on 13 October 1983;
5
and for Phase III, which consisted of the remaining 31.7707 hectares,
on 25 April 1986.
6
Petitioners were likewise issued development permits
7
after complying with the
requirements. Thus the NATALIA properties later became the Antipolo Hills Subdivision.
On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1988"
(CARL, for brevity), went into effect. Conformably therewith, respondent Department of Agrarian Reform
(DAR, for brevity), through its Municipal Agrarian Reform Officer, issued on 22 November 1990 a Notice of
Coverage on the undeveloped portions of the Antipolo Hills Subdivision which consisted of roughly 90.3307
hectares. NATALIA immediately registered its objection to the Notice of Coverage.
EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and twice wrote
him requesting the cancellation of the Notice of Coverage.
On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc. (SAMBA, for brevity),
filed a complaint against NATALIA and EDIC before the DAR Regional Adjudicator to restrain petitioners from
developing areas under cultivation by SAMBA members.
8
The Regional Adjudicator temporarily restrained
petitioners from proceeding with the development of the subdivision. Petitioners then moved to dismiss the
complaint; it was denied. Instead, the Regional Adjudicator issued on 5 March 1991 a Writ of Preliminary
Injunction.
Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB); however, on
16 December 1991 the DARAB merely remanded the case to the Regional Adjudicator for further
proceedings.
9

In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request to set
aside the Notice of Coverage. Neither respondent Secretary nor respondent Director took action on the
protest-letters, thus compelling petitioners to institute this proceeding more than a year thereafter.
NATALIA and EDIC both impute grave abuse of discretion to respondent DAR for including undeveloped
portions of the Antipolo Hills Subdivision within the coverage of the CARL. They argue that NATALIA
properties already ceased to be agricultural lands when they were included in the areas reserved by
presidential fiat for townsite reservation.
Public respondents through the Office of the Solicitor General dispute this contention. They maintain that
the permits granted petitioners were not valid and binding because they did not comply with the
implementing Standards, Rules and Regulations of P.D. 957, otherwise known as "The Subdivision and
Condominium Buyers' Protective Decree," in that no application for conversion of the NATALIA lands from
agricultural to residential was ever filed with the DAR. In other words, there was no valid conversion.
Moreover, public respondents allege that the instant petition was prematurely filed because the case
instituted by SAMBA against petitioners before the DAR Regional Adjudicator has not yet terminated.
Respondents conclude, as a consequence, that petitioners failed to fully exhaust administrative remedies
available to them before coming to court.
The petition is impressed with merit. A cursory reading of the Preliminary Approval and Locational
Clearances as well as the Development Permits granted petitioners for Phases I, II and III of the Antipolo Hills
Subdivision reveals that contrary to the claim of public respondents, petitioners NATALIA and EDIC did in fact
comply with all the requirements of law.
Petitioners first secured favorable recommendations from the Lungsod Silangan Development
Corporation, the agency tasked to oversee the implementation of the development of the townsite
reservation, before applying for the necessary permits from the Human Settlements Regulatory
Commission.
10
And, in all permits granted to petitioners, the Commission stated invariably therein that the
applications were in "conformance"
11
or "conformity"
12
or "conforming"
13
with the implementing Standards,
Rules and Regulations of P.D. 957. Hence, the argument of public respondents that not all of the requirements
were complied with cannot be sustained. llcd
As a matter of fact, there was even no need for petitioners to secure a clearance or prior approval from
DAR. The NATALIA properties were within the areas set aside for the Lungsod Silangan Reservation. Since
Presidential Proclamation No. 1637 created the townsite reservation for the purpose of providing additional
housing to the burgeoning population of Metro Manila, it in effect converted for residential use what were
erstwhile agricultural lands provided all requisites were met. And, in the case at bar, there was compliance
with all relevant rules and requirements. Even in their applications for the development of the Antipolo Hills
Subdivision, the predecessor agency of HLURB noted that petitioners NATALIA and EDIC complied with all the
requirements prescribed by P.D. 957
The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions and
condominiums in general. On the other hand, Presidential Proclamation No. 1637 referred only to the
Lungsod Silangan Reservation, which makes it a special law. It is a basic tenet in statutory construction that
between a general law and a special law, the latter prevails.
14

Interestingly, the Office of the Solicitor General does not contest the conversion of portions of the Antipolo
Hills Subdivision which have already been developed.
15
Of course, this is contrary to its earlier position that
there was no valid conversion. The applications for the developed and undeveloped portions of subject
subdivision were similarly situated. Consequently, both did not need prior DAR approval.
We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657 provides that the
CARL shall "cover, regardless of tenurial arrangement and commodity produced, all public and private
agricultural lands." As to what constitutes "agricultural land," it is referred to as "land devoted to agricultural
activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial
land.
16
The deliberations of the Constitutional Commission confirm this limitation. "Agricultural lands" are
only those lands which are "arable and suitable agricultural lands" and "do not include commercial, industrial
and residential lands."
17

Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision cannot
in any language be considered as "agricultural lands." These lots were intended for residential use. They
ceased to be agricultural lands upon approval of their inclusion in the Lungsod Silangan Reservation. Even
today, the areas in question continue to be developed as a low-cost housing subdivision, albeit at a snail's
pace. This can readily be gleaned from the fact that SAMBA members even instituted an action to restrain
petitioners from continuing with such development. The enormity of the resources needed for developing a
subdivision may have delayed its completion but this does not detract from the fact that these lands are still
residential lands and outside the ambit of the CARL.
Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands
previously converted to non-agricultural uses prior to the effectivity of CARL by government agencies other
than respondent DAR. In its Revised Rules and Regulations Governing Conversion of Private Agricultural
Lands to Non-Agricultural Uses,
18
DAR itself defined "agricultural land" thus
". . . Agricultural land refers to those devoted to agricultural activity as defined in
R.A. 6657 and not classified as mineral or forest by the Department of Environment and
Natural Resources (DENR) and its predecessor agencies, and not classified in town plans
and zoning ordinances as approved by the Housing and Land Use Regulatory Board (HLURB)
and its preceding competent authorities prior to 15 June 1988 for residential, commercial or
industrial use."
Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such
conversion. It was therefore error to include the undeveloped portions of the Antipolo Hills Subdivision
within the coverage of CARL.
Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian Reform,
noted in an Opinion
19
that lands covered by Presidential Proclamation No. 1637, inter alia, of which the
NATALIA lands are part, having been reserved for townsite purposes "to be developed as human settlements
by the proper land and housing agency," are "not deemed 'agricultural lands' within the meaning and intent of
Section 3 (c) of R.A. No. 6657." Not being deemed "agricultural lands," they are outside the coverage of CARL.
Anent the argument that there was failure to exhaust administrative remedies in the instant petition,
suffice it to say that the issues raised in the case filed by SAMBA members differ from those of petitioners. The
former involve possession; the latter, the propriety of including under the operation of CARL lands already
converted for residential use prior to its effectivity.
Besides, petitioners were not supposed to wait until public respondents acted on their letter-protests, this
after sitting it out for almost a year. Given the official indifference, which under the circumstances could have
continued forever, petitioners had to act to assert and protect their interests.
20

In fine, we rule for petitioners and hold that public respondents gravely abused their discretion in issuing
the assailed Notice of Coverage dated 22 November 1990 of lands over which they no longer have jurisdiction.
WHEREFORE, the Petition for Certiorari is GRANTED. The Notice of Coverage of 22 November 1990 by
virtue of which undeveloped portions of the Antipolo Hills Subdivision were placed under CARL coverage is
hereby SET ASIDE.
SO ORDERED.


Case Digest: Natalia Realty, Inc. and Estate Developer and Investors Corp vs DAR GR No 103302Natalia Realty,
Inc. and Estate Developer and Investors Corp vs DARGR No 103302 August 12, 1993Facts:Natalia is the owner
of 3 contiguous parcels of land with an area of 120.9793 hectares, 1.3205 hectaresand 2.7080 hectares or
a total of 125.0078 hectares, which are covered by TCT No. 31527. PresidentialProclamation No. 1637 set
aside 20,312 hectares of land as townsite areas to absorb the populationoverspill in the metropolis which
were designated as the Lungsod Silangan Townsite. The Nataliaproperties are situated within the areas
proclaimed as townsite reservation. Since private landownerswere allowed to develop their properties into
low-cost housing subdivisions with the reservation,petitioner EDIC as developer of Natalia applied for and
was granted preliminary approval and locationclearances by the Human Settlements Regulatory Commission,
which Natalia thereafter becameAntipolo Hills Subdivision. On June 15 1988, Ra 6657 went to effect.
Respondent issed a Notice ofCoverage on the undeveloped portions of Antipolo Hills Subdivision. Natalia and
EDIC immediatelyregistered its objection to the notice of coverage and requested the cancellation of the
Notice ofCoverage.Natalia and EDIC both argued that the properties ceased to be agricultural lands when they
wereincluded in the areas reserved by Presidential Proclamation for the townsite reservation. DAR
thencontended that the permits granted were not valid and binding since they did not comply with
t heimplementing Standards, Rules and Regulations of PD 957 (The Subdivision and Condominium
BuyersProtective Decree), and that there was no valid conversion of the properties.Issue:Whether or not
lands not classified for agricultural use, as approved by the Housing and Land UseRegulatory Board and its
agencies prior to June 15, 1988 covered by RA 6657.Ruling:No, Sec. 4 of RA 6657 provides that CARL shall
cover, regardless of tenurial arrangement and commodityproduced, all public and private agricultural lands.
And agricultural lands is referred to as land devotedto agricultural activity and not classified as mineral, forst,
residential, commercial or industrial land.Thus, the underdeveloped portions of the Antipolo Hills Subdivision
cannot be considered as agricultural
lands for this land was intended for residential use. They ceased to be agricultural land by virtue
of thePresidential Proclamation No. 1637.
---------------------

[G.R. No. 127198. May 16, 2005]
LAND BANK OF THE PHILIPPINES, petitioner, vs. HON. ELI G. C. NATIVIDAD, Presiding Judge of the
Regional Trial Court, Branch 48, San Fernando, Pampanga, and JOSE R. CAGUIAT
represented by Attorneys-in-fact JOSE T. BARTOLOME and VICTORIO MANGALINDAN,
respondents.
D E C I S I O N
TINGA, J.:
This is a Petition for Review
[1]
dated December 6, 1996 assailing the Decision
[2]
of the Regional Trial
Court
[3]
dated July 5, 1996 which ordered the Department of Agrarian Reform (DAR) and petitioner Land Bank
of the Philippines (Land Bank) to pay private respondents the amount of P30.00 per square meter as just
compensation for the States acquisition of private respondents properties under the land reform program.
The facts follow.
On May 14, 1993, private respondents filed a petition before the trial court for the determination of just
compensation for their agricultural lands situated in Arayat, Pampanga, which were acquired by the
government pursuant to Presidential Decree No. 27 (PD 27). The petition named as respondents the DAR and
Land Bank. With leave of court, the petition was amended to implead as co-respondents the registered
tenants of the land.
After trial, the court rendered the assailed Decision the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of petitioners and against respondents, ordering
respondents, particularly, respondents Department of Agrarian Reform and the Land Bank of the Philippines,
to pay these lands owned by petitioners and which are the subject of acquisition by the State under its land
reform program, the amount of THIRTY PESOS (P30.00) per square meter, as the just compensation due for
payment for same lands of petitioners located at San Vicente (or Camba), Arayat, Pampanga.
Respondent Department of Agrarian Reform is also ordered to pay petitioners the amount of FIFTY
THOUSAND PESOS (P50,000.00) as Attorneys Fee, and to pay the cost of suit.
SO ORDERED.
[4]

DAR and Land Bank filed separate motions for reconsideration which were denied by the trial court in
its Order
[5]
dated July 30, 1996 for being pro forma as the same did not contain a notice of hearing. Thus, the
prescriptive period for filing an appeal was not tolled. Land Bank consequently failed to file a timely appeal
and the assailed Decision became final and executory.
Land Bank then filed a Petition for Relief from Order Dated 30 July 1996,
[6]
citing excusable negligence as
its ground for relief. Attached to the petition for relief were two affidavits of merit claiming that the failure to
include in the motion for reconsideration a notice of hearing was due to accident and/or mistake.
[7]
The
affidavit of Land Banks counsel of record notably states that he simply scanned and signed the Motion for
Reconsideration for Agrarian Case No. 2005, Regional Trial Court of Pampanga, Branch 48, not knowing, or
unmindful that it had no notice of hearing
[8]
due to his heavy workload.
The trial court, in its Order
[9]
of November 18, 1996, denied the petition for relief because Land Bank
lost a remedy in law due to its own negligence.
In the instant petition for review, Land Bank argues that the failure of its counsel to include a notice of
hearing due to pressure of work constitutes excusable negligence and does not make the motion for
reconsideration pro forma considering its allegedly meritorious defenses. Hence, the denial of its petition for
relief from judgment was erroneous.
According to Land Bank, private respondents should have sought the reconsideration of the DARs
valuation of their properties. Private respondents thus failed to exhaust administrative remedies when they
filed a petition for the determination of just compensation directly with the trial court. Land Bank also insists
that the trial court erred in declaring that PD 27 and Executive Order No. 228 (EO 228) are mere guidelines in
the determination of just compensation, and in relying on private respondents evidence of the valuation of
the properties at the time of possession in 1993 and not on Land Banks evidence of the value thereof as of the
time of acquisition in 1972.
Private respondents filed a Comment
[10]
dated February 22, 1997, averring that Land Banks failure to
include a notice of hearing in its motion for reconsideration due merely to counsels heavy workload, which
resulted in the motion being declared pro forma, does not constitute excusable negligence, especially in light
of the admission of Land Banks counsel that he has been a lawyer since 1973 and has mastered the intricate
art and technique of pleading.
Land Bank filed a Reply
[11]
dated March 12, 1997 insisting that equity considerations demand that it be
heard on substantive issues raised in its motion for reconsideration.
The Court gave due course to the petition and required the parties to submit their respective
memoranda.
[12]
Both parties complied.
[13]

The petition is unmeritorious.
At issue is whether counsels failure to include a notice of hearing constitutes excusable negligence
entitling Land Bank to a relief from judgment.
Section 1, Rule 38 of the 1997 Rules of Civil Procedure provides:
Sec. 1. Petition for relief from judgment, order, or other proceedings.When a judgment or final order is
entered, or any other proceeding is thereafter taken against a party in any court through fraud, accident,
mistake, or excusable negligence, he may file a petition in such court and in the same case praying that the
judgment, order or proceeding be set aside.
As can clearly be gleaned from the foregoing provision, the remedy of relief from judgment can only be
resorted to on grounds of fraud, accident, mistake or excusable negligence. Negligence to be excusable must
be one which ordinary diligence and prudence could not have guarded against.
[14]

Measured against this standard, the reason profferred by Land Banks counsel, i.e., that his heavy
workload prevented him from ensuring that the motion for reconsideration included a notice of hearing, was
by no means excusable.
Indeed, counsels admission that he simply scanned and signed the Motion for Reconsideration for
Agrarian Case No. 2005, Regional Trial Court of Pampanga, Branch 48, not knowing, or unmindful that it had
no notice of hearing speaks volumes of his arrant negligence, and cannot in any manner be deemed to
constitute excusable negligence.
The failure to attach a notice of hearing would have been less odious if committed by a greenhorn but
not by a lawyer who claims to have mastered the intricate art and technique of pleading.
[15]

Indeed, a motion that does not contain the requisite notice of hearing is nothing but a mere scrap of
paper. The clerk of court does not even have the duty to accept it, much less to bring it to the attention of the
presiding judge.
[16]
The trial court therefore correctly considered the motion for reconsideration pro
forma. Thus, it cannot be faulted for denying Land Banks motion for reconsideration and petition for relief
from judgment.
It should be emphasized at this point that procedural rules are designed to facilitate the adjudication of
cases. Courts and litigants alike are enjoined to abide strictly by the rules. While in certain instances, we allow
a relaxation in the application of the rules, we never intend to forge a weapon for erring litigants to violate the
rules with impunity. The liberal interpretation and application of rules apply only in proper cases of
demonstrable merit and under justifiable causes and circumstances. While it is true that litigation is not a
game of technicalities, it is equally true that every case must be prosecuted in accordance with the prescribed
procedure to ensure an orderly and speedy administration of justice. Party litigants and their counsel are well
advised to abide by, rather than flaunt, procedural rules for these rules illumine the path of the law and
rationalize the pursuit of justice.
[17]

Aside from ruling on this procedural issue, the Court shall also resolve the other issues presented by
Land Bank, specifically as regards private respondents alleged failure to exhaust administrative remedies and
the question of just compensation.
Land Bank avers that private respondents should have sought the reconsideration of the DARs
valuation instead of filing a petition to fix just compensation with the trial court.
The records reveal that Land Banks contention is not entirely true. In fact, private respondents did
write a letter
[18]
to the DAR Secretary objecting to the land valuation summary submitted by the Municipal
Agrarian Reform Office and requesting a conference for the purpose of fixing just compensation. The letter,
however, was left unanswered prompting private respondents to file a petition directly with the trial court.
At any rate, in Philippine Veterans Bank v. Court of Appeals,
[19]
we declared that there is nothing
contradictory between the DARs primary jurisdiction to determine and adjudicate agrarian reform matters
and exclusive original jurisdiction over all matters involving the implementation of agrarian reform, which
includes the determination of questions of just compensation, and the original and exclusive jurisdiction of
regional trial courts over all petitions for the determination of just compensation. The first refers to
administrative proceedings, while the second refers to judicial proceedings.
In accordance with settled principles of administrative law, primary jurisdiction is vested in the DAR to
determine in a preliminary manner the just compensation for the lands taken under the agrarian reform
program, but such determination is subject to challenge before the courts. The resolution of just
compensation cases for the taking of lands under agrarian reform is, after all, essentially a judicial function.
[20]

Thus, the trial did not err in taking cognizance of the case as the determination of just compensation is a
function addressed to the courts of justice.
Land Banks contention that the property was acquired for purposes of agrarian reform on October 21,
1972, the time of the effectivity of PD 27, ergo just compensation should be based on the value of the property
as of that time and not at the time of possession in 1993, is likewise erroneous. In Office of the President,
Malacaang, Manila v. Court of Appeals,
[21]
we ruled that the seizure of the landholding did not take place on
the date of effectivity of PD 27 but would take effect on the payment of just compensation.
Under the factual circumstances of this case, the agrarian reform process is still incomplete as the just
compensation to be paid private respondents has yet to be settled. Considering the passage of Republic Act
No. 6657 (RA 6657)
[22]
before the completion of this process, the just compensation should be determined and
the process concluded under the said law. Indeed, RA 6657 is the applicable law, with PD 27 and EO 228
having only suppletory effect, conformably with our ruling in Paris v. Alfeche.
[23]

Section 17 of RA 6657 which is particularly relevant, providing as it does the guideposts for the
determination of just compensation, reads as follows:
Sec. 17. Determination of Just Compensation.In determining just compensation, the cost of acquisition of the
land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner,
the tax declarations, and the assessment made by government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farm-workers 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.
It would certainly be inequitable to determine just compensation based on the guideline provided by
PD 27 and EO 228 considering the DARs failure to determine the just compensation for a considerable length
of time. That just compensation should be determined in accordance with RA 6657, and not PD 27 or EO
228, is especially imperative considering that just compensation should be the full and fair equivalent of the
property taken from its owner by the expropriator, the equivalent being real, substantial, full and ample.
[24]

In this case, the trial court arrived at the just compensation due private respondents for their property,
taking into account its nature as irrigated land, location along the highway, market value, assessors value and
the volume and value of its produce. This Court is convinced that the trial court correctly determined the
amount of just compensation due private respondents in accordance with, and guided by, RA 6657 and
existing jurisprudence.
WHEREFORE, the petition is DENIED. Costs against petitioner.
SO ORDERED.
---------------------

-----------------
JOSEFINA S. LUBRICA, vs LAND BANK OF THE PHILIPPINES,

This Petition for Review on Certiorari under Rule 45 of the Rules of Court assails the October 27, 2005
Amended Decision
[1]
of the Court of Appeals in CA-G.R. SP No. 77530, which vacated its May 26, 2004 Decision
affirming (a) the Order of the Regional Trial Court of San Jose, Occidental Mindoro, Branch 46, acting as
Special Agrarian Court, in Agrarian Case Nos. R-1339 and R-1340, dated March 31, 2003 directing respondent
Land Bank of the Philippines (LBP) to deposit the provisional compensation as determined by the Provincial
Agrarian Reform Adjudicator (PARAD); (b) the May 26, 2003 Resolution denying LBPs motion for
reconsideration; and (c) the May 27, 2003 Order requiring Teresita V. Tengco, LBPs Land Compensation
Department Manager, to comply with the March 31, 2003 Order.
The facts of the case are as follows:

Petitioner Josefina S. Lubrica is the assignee
[2]
of Federico C. Suntay over certain parcels of agricultural
land located at Sta. Lucia, Sablayan, Occidental Mindoro, with an area of 3,682.0285 hectares covered by
Transfer Certificate of Title (TCT) No. T-31 (T-1326)
[3]
of the Registry of Deeds of Occidental Mindoro. In
1972, a portion of the said property with an area of 311.7682 hectares, was placed under the land reform
program pursuant to Presidential Decree No. 27 (1972)
[4]
and Executive Order No. 228 (1987).
[5]
The land was
thereafter subdivided and distributed to farmer beneficiaries. The Department of Agrarian Reform (DAR) and
the LBP fixed the value of the land at P5,056,833.54 which amount was deposited in cash and bonds in favor
of Lubrica.

On the other hand, petitioners Nenita Suntay-Taedo and Emilio A.M. Suntay III inherited from Federico
Suntay a parcel of agricultural land located at Balansay, Mamburao, Occidental Mindoro covered by TCT No. T-
128
[6]
of the Register of Deeds of Occidental Mindoro, consisting of two lots, namely, Lot 1 with an area of
45.0760 hectares and Lot 2 containing an area of 165.1571 hectares or a total of 210.2331 hectares. Lot 2 was
placed under the coverage of P.D. No. 27 but only 128.7161 hectares was considered by LBP and valued the
same at P1,512,575.05.

Petitioners rejected the valuation of their properties, hence the Office of the Provincial Agrarian Reform
Adjudicator (PARAD) conducted summary administrative proceedings for determination of just
compensation. On January 29, 2003, the PARAD fixed the preliminary just compensation at P51,800,286.43
for the 311.7682 hectares (TCT No. T-31) and P21,608,215.28 for the 128.7161 hectares (TCT No. T-128).
[7]


Not satisfied with the valuation, LBP filed on February 17, 2003, two separate petitions
[8]
for judicial
determination of just compensation before the Regional Trial Court of San Jose, Occidental Mindoro, acting as
a Special Agrarian Court, docketed as Agrarian Case No. R-1339 for TCT No. T-31 and Agrarian Case No. R-
1340 for TCT No. T-128, and raffled to Branch 46 thereof.

Petitioners filed separate Motions to Deposit the Preliminary Valuation Under Section 16(e) of Republic
Act (R.A.) No. 6657 (1988)
[9]
and Ad Cautelam Answer praying among others that LBP deposit the preliminary
compensation determined by the PARAD.

On March 31, 2003, the trial court issued an Order
[10]
granting petitioners motion, the dispositive
portion of which reads:

WHEREFORE, Ms. Teresita V. Tengco, of the Land Compensation Department I
(LCD I), Land Bank of the Philippines, is hereby ordered pursuant to Section 16 (e) of RA
6657 in relation to Section 2, Administrative Order No. 8, Series of 1991, to deposit the
provisional compensation as determined by the PARAD in cash and bonds, as follows:

1. In Agrarian Case No. R-1339, the amount of P 51,800,286.43, minus the amount
received by the Landowner;
2. In Agrarian Case No. R-1340, the amount of P 21,608,215.28, less the amount of P
1,512,575.16, the amount already deposited.

Such deposit must be made with the Land Bank of the Philippines, Manila within
five (5) days from receipt of a copy of this order and to notify this court of her
compliance within such period.

Let this order be served by the Sheriff of this Court at the expense of the movants.

SO ORDERED.
[11]


LBPs motion for reconsideration was denied in a Resolution
[12]
dated May 26, 2003. The following
day, May 27, 2003, the trial court issued an Order
[13]
directing Ms. Teresita V. Tengco, LBPs Land
Compensation Department Manager, to deposit the amounts.

Thus, on June 17, 2003, LBP filed with the Court of Appeals a Petition for Certiorari and Prohibition
under Rule 65 of the Rules of Court with application for the issuance of a Temporary Restraining Order and
Writ of Preliminary Injunction docketed as CA-G.R. SP No. 77530.
[14]


On June 27, 2003, the appellate court issued a 60-day temporary restraining order
[15]
and on October 6,
2003, a writ of preliminary injunction.
[16]


On May 26, 2004, the Court of Appeals rendered a Decision
[17]
in favor of the petitioners, the dispositive
portion of which reads:

WHEREFORE, premises considered, there being no grave abuse of discretion, the
instant Petition for Certiorari and Prohibition is DENIED. Accordingly, the Order
dated March 31, 2003, Resolution dated May 26, 2003, and Order dated May 27,
2003 are hereby AFFIRMED. The preliminary injunction We previously issued is hereby
LIFTED and DISSOLVED.

SO ORDERED.
[18]


The Court of Appeals held that the trial court correctly ordered LBP to deposit the amounts provisionally
determined by the PARAD as there is no law which prohibits LBP to make a deposit pending the fixing of the
final amount of just compensation. It also noted that there is no reason for LBP to further delay the deposit
considering that the DAR already took possession of the properties and distributed the same to farmer-
beneficiaries as early as 1972.

LBP moved for reconsideration which was granted. On October 27, 2005, the appellate court rendered
the assailed Amended Decision,
[19]
the dispositive portion of which reads:

Wherefore, in view of the prescription of a different formula in the case of Gabatin
which We hold as cogent and compelling justification necessitating Us to effect the
reversal of Our judgment herein sought to be reconsidered, the instant Motion for
Reconsideration is GRANTED, and Our May 26, 2004 Decision is hereby VACATED and
ABANDONED with the end in view of giving way to and acting in harmony and in
congruence with the tenor of the ruling in the case of Gabatin. Accordingly, the assailed
rulings of the Special Agrarian Court is (sic) commanded to compute and fix the just
compensation for the expropriated agricultural lands strictly in accordance with the
mode of computation prescribed (sic) Our May 26, 2004 judgment in the case of Gabatin.

SO ORDERED.
[20]


In the Amended Decision, the Court of Appeals held that the immediate deposit of the preliminary value
of the expropriated properties is improper because it was erroneously computed. Citing Gabatin v. Land Bank
of the Philippines,
[21]
it held that the formula to compute the just compensation should be: Land Value = 2.5 x
Average Gross Production x Government Support Price. Specifically, it held that the value of the government
support price for the corresponding agricultural produce (rice and corn) should be computed at the time of
the legal taking of the subject agricultural land, that is, on October 21, 1972 when landowners were effectively
deprived of ownership over their properties by virtue of P.D. No. 27. According to the Court of Appeals, the
PARAD incorrectly used the amounts of P500 and P300 which are the prevailing government support price
for palay and corn, respectively, at the time of payment, instead of P35 and P31, the prevailing government
support price at the time of the taking in 1972.

Hence, this petition raising the following issues:

A. THE COURT A QUO HAS DECIDED THE CASE IN A WAY NOT IN ACCORD WITH
THE LATEST DECISION OF THE SUPREME COURT IN THE CASE OF LAND BANK OF
THE PHILIPPINES VS. HON. ELI G.C. NATIVIDAD, ET AL., G.R. NO. 127198, PROM. MAY
16, 2005; and
[22]


B. THE COURT A QUO HAS, WITH GRAVE GRAVE ABUSE OF DISCRETION, SO FAR
DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS,
DECIDING ISSUES THAT HAVE NOT BEEN RAISED, AS TO CALL FOR AN EXERCISE OF
THE POWER OF SUPERVISION.
[23]


Petitioners insist that the determination of just compensation should be based on the value of the
expropriated properties at the time of payment. Respondent LBP, on the other hand, claims that the value of
the realties should be computed as of October 21, 1972 when P.D. No. 27 took effect.
The petition is impressed with merit.

In the case of Land Bank of the Philippines v. Natividad,
[24]
the Court ruled thus:

Land Banks contention that the property was acquired for purposes of
agrarian reform on October 21, 1972, the time of the effectivity of PD 27, ergo just
compensation should be based on the value of the property as of that time and not at the
time of possession in 1993, is likewise erroneous. In Office of the President,
Malacaang, Manila v. Court of Appeals, we ruled that the seizure of the landholding did
not take place on the date of effectivity of PD 27 but would take effect on the payment of
just compensation.

The Natividad case reiterated the Courts ruling in Office of the President v. Court of Appeals
[25]
that
the expropriation of the landholding did not take place on the effectivity of P.D. No. 27 on October 21,
1972 but seizure would take effect on the payment of just compensation judicially determined.

Likewise, in the recent case of Heirs of Francisco R. Tantoco, Sr. v. Court of Appeals,
[26]
we held that
expropriation of landholdings covered by R.A. No. 6657 take place, not on the effectivity of the Act on June 15,
1988, but on the payment of just compensation.

In the instant case, petitioners were deprived of their properties in 1972 but have yet to receive the
just compensation therefor. The parcels of land were already subdivided and distributed to the farmer-
beneficiaries thereby immediately depriving petitioners of their use. Under the circumstances, it would be
highly inequitable on the part of the petitioners to compute the just compensation using the values at the time
of the taking in 1972, and not at the time of the payment, considering that the government and the farmer-
beneficiaries have already benefited from the land although ownership thereof have not yet been transferred
in their names. Petitioners were deprived of their properties without payment of just compensation which,
under the law, is a prerequisite before the property can be taken away from its owners.
[27]
The transfer of
possession and ownership of the land to the government are conditioned upon the receipt by the landowner
of the corresponding payment or deposit by the DAR of the compensation with an accessible bank. Until then,
title remains with the landowner.
[28]


Our ruling in Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian
Reform
[29]
is instructive, thus:

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer
as October 21, 1972 and declared that he shall be deemed the owner of a portion of
land consisting of a family-sized farm except that no title to the land owned by him was
to be actually issued to him unless and until he had become a full-fledged member of a
duly recognized farmers cooperative. It was understood, however, that full payment of
the just compensation also had to be made first, conformably to the constitutional
requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full
owners as of October 21, 1972 of the land they acquired by virtue of
Presidential Decree No. 27 (Emphasis supplied.)

it was obviously referring to lands already validly acquired under the said decree, after
proof of full-fledged membership in the farmers cooperatives and full payment of just
compensation. x x x

The CARP Law, for its part, conditions the transfer of possession and
ownership of the land to the government on receipt by the landowner of the
corresponding payment or the deposit by the DAR of the compensation in cash or LBP
bonds with an accessible bank. Until then, title also remains with the landowner. No
outright change of ownership is contemplated either.

We also note that the expropriation proceedings in the instant case was initiated under P.D. No. 27
but the agrarian reform process is still incomplete considering that the just compensation to be paid to
petitioners has yet to be settled. Considering the passage of R.A. No. 6657 before the completion of this
process, the just compensation should be determined and the process concluded under the said law. Indeed,
R.A. No. 6657 is the applicable law, with P.D. No. 27 and E.O. No. 228 having only suppletory effect.
[30]


In Land Bank of the Philippines v. Court of Appeals,
[31]
we held that:

RA 6657 includes PD 27 lands among the properties which the DAR shall
acquire and distribute to the landless. And to facilitate the acquisition and distribution
thereof, Secs. 16, 17 and 18 of the Act should be adhered to.

Section 18 of R.A. No. 6657 mandates that the LBP shall compensate the landowner in such amount
as may be agreed upon by the landowner and the DAR and the LBP or as may be finally determined by the
court as the just compensation for the land. In determining just compensation, the cost of the acquisition of
the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the
owner, the tax declarations, and the assessment made by government assessors shall be considered. The
social and economic benefits contributed by the farmers and the farmworkers and by the government to the
property as well as the nonpayment of taxes or loans secured from any government financing institution on
the said land shall be considered as additional factors to determine its valuation.
[32]


Corollarily, we held in Land Bank of the Philippines v. Celada
[33]
that the above provision was
converted into a formula by the DAR through Administrative Order No. 05, S. 1998, to wit:

Land Value (LV) = (Capitalized Net Income x 0.6) + (Comparable Sales x 0.3) + (Market Value per
Tax Declaration x 0.1)

Petitioners were deprived of their properties way back in 1972, yet to date, they have not yet received
just compensation. Thus, it would certainly be inequitable to determine just compensation based on the
guideline provided by P.D. No. 227 and E.O. No. 228 considering the failure to determine just compensation
for a considerable length of time. That just compensation should be determined in accordance with R.A. No.
6657 and not P.D. No. 227 or E.O. No. 228, is important considering that just compensation should be the full
and fair equivalent of the property taken from its owner by the expropriator, the equivalent being real,
substantial, full and ample.
[34]


WHEREFORE, premises considered, the petition is GRANTED. The assailed Amended Decision dated
October 27, 2005 of the Court of Appeals in CA-G.R. SP No. 77530 is REVERSED and SET ASIDE. The Decision
dated May 26, 2004 of the Court of Appeals affirming (a) the March 31, 2003 Order of the Special Agrarian
Court ordering the respondent Land Bank of the Philippines to deposit the just compensation provisionally
determined by the PARAD; (b) the May 26, 2003 Resolution denying respondents Motion for
Reconsideration; and (c) the May 27, 2003 Order directing Teresita V. Tengco, respondents Land
Compensation Department Manager to comply with the March 31, 2003 Order, is REINSTATED. The Regional
Trial Court of San Jose, Occidental Mindoro, Branch 46, acting as Special Agrarian Court is ORDERED to
proceed with dispatch in the trial of Agrarian Case Nos. R-1339 and R-1340, and to compute the final
valuation of the subject properties based on the aforementioned formula.

SO ORDERED.

--------------------------
G.R. No. 118712 October 6, 1995
LAND BANK OF THE PHILIPPINES, petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT
& DEVELOPMENT CORP., respondents.
G.R. No. 118745 October 6, 1995
DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT
& DEVELOPMENT CORP., ET AL., respondents.

FRANCISCO, R., J.:
It has been declared that the duty of the court to protect the weak and the underprivileged should not be
carried out to such an extent as deny justice to the landowner whenever truth and justice happen to be on his
side.
1
As eloquently stated by Justice Isagani Cruz:
. . . social justice or any justice for that matter is for the deserving, whether he be a
millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable
doubt, we are called upon to tilt the balance in favor of the poor, to whom the
Constitution fittingly extends its sympathy and compassion. But never is it justified to
prefer the poor simply because they are poor, or to reject the rich simply because they
are rich, for justice must always be served, for poor and rich alike, according to the
mandate of the law.
2

In this agrarian dispute, it is once more imperative that the aforestated principles be applied in its resolution.
Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R. No.
118745) and Land Bank of the Philippines (G.R. No. 118712) following the adverse ruling by the Court of
Appeals in CA-G.R. SP No. 33465. However, upon motion filed by private respondents, the petitions were
ordered consolidated.
3

Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which granted
private respondents' Petition for Certiorari and Mandamus and ruled as follows:
WHEREFORE, premises considered, the Petition for Certiorari and Mandamus is hereby
GRANTED:
a) DAR Administrative Order No. 9, Series of 1990 is
declared null and void insofar as it provides for the opening of trust
accounts in lieu of deposits in cash or bonds;
b) Respondent Landbank is ordered to immediately deposit not
merely "earmark", "reserve" or "deposit in trust" with an
accessible bank designated by respondent DAR in the names of the
following petitioners the following amounts in cash and in
government financial instruments within the parameters of Sec.
18 (1) of RA 6657:
P 1,455,207.31 Pedro L. Yap
P 135,482.12 Heirs of Emiliano Santiago
P 15,914,127.77 AMADCOR;
c) The DAR-designated bank is ordered to allow the petitioners to
withdraw the above-deposited amounts without prejudice to the
final determination of just compensation by the proper authorities;
and
d) Respondent DAR is ordered to
1) immediately conduct summary administrative proceedings to
determine the just compensation for the lands of the petitioners
giving the petitioners 15 days from notice within which to submit
evidence and to 2) decide the caseswithin 30 days after they are
submitted for decision.
4

Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995,
5
denying their
motion for reconsideration.
Private respondents are landowners whose landholdings were acquired by the DAR and subjected to transfer
schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL, Republic Act No.
6657).
Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and
payment of compensation for their land pursuant to the provisions of RA 6657, private respondents
filed with this Court a Petition for Certiorari and Mandamus with prayer for preliminary mandatory
injunction. Private respondents questioned the validity of DAR Administrative Order No. 6, Series
of 1992
6
and DAR Administrative Order No. 9, Series of 1990,
7
and sought to compel the DAR to
expedite the pending summary administrative proceedings to finally determine the just
compensation of their properties, and the Landbank to deposit in cash and bonds the amounts
respectively "earmarked", "reserved" and "deposited in trust accounts" for private respondents,
and to allow them to withdraw the same.
Through a Resolution of the Second Division dated February 9, 1994, this Court referred the petition to
respondent Court of Appeals for proper determination and disposition.
As found by respondent court , the following are undisputed:
Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of title
(TCTs) of petitioner Yap were totally cancelled by the Registrar of Deeds of Leyte and
were transferred in the names of farmer beneficiaries collectively, based on the request
of the DAR together with a certification of the Landbank that the sum of P735,337.77 and
P719,869.54 have been earmarked for Landowner Pedro L. Yap for the parcels of lands
covered by TCT Nos. 6282 and 6283, respectively, and issued in lieu thereof TC-563 and
TC-562, respectively, in the names of listed beneficiaries (ANNEXES "C" & "D") without
notice to petitioner Yap and without complying with the requirement of Section 16 (e) of
RA 6657 to deposit the compensation in cash and Landbank bonds in an accessible bank.
(Rollo, p. 6).
The above allegations are not disputed by any of the respondents.
Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are the
owners of a parcel of land located at Laur, NUEVA ECIJA with an area of 18.5615 hectares
covered by TCT No. NT-60359 of the registry of Deeds of Nueva Ecija, registered in the
name of the late Emiliano F. Santiago; that in November and December 1990, without
notice to the petitioners, the Landbank required and the beneficiaries executed Actual
tillers Deed of Undertaking (ANNEX "B") to pay rentals to the LandBank for the use of
their farmlots equivalent to at least 25% of the net harvest; that on 24 October 1991 the
DAR Regional Director issued an order directing the Landbank to pay the landowner
directly or through the establishment of a trust fund in the amount of P135,482.12, that
on 24 February 1992, the Landbank reserved in trust P135,482.12 in the name of
Emiliano F. Santiago. (ANNEX "E";Rollo,
p. 7); that the beneficiaries stopped paying rentals to the landowners after they signed
the Actual Tiller's Deed of Undertaking committing themselves to pay rentals to the
LandBank (Rollo, p. 133).
The above allegations are not disputed by the respondents except that respondent
Landbank claims 1) that it was respondent DAR, not Landbank which required the
execution of Actual Tillers Deed of Undertaking (ATDU, for brevity); and 2) that
respondent Landbank, although armed with the ATDU, did not collect any amount as
rental from the substituting beneficiaries (Rollo, p. 99).
Petitioner Agricultural Management and Development Corporation (AMADCOR, for
brevity) alleges with respect to its properties located in San Francisco, Quezon that
the properties of AMADCOR in San Francisco, Quezon consist of a parcel of land covered
by TCT No. 34314 with an area of 209.9215 hectares and another parcel covered by TCT
No. 10832 with an area of 163.6189 hectares; that a summary administrative proceeding
to determine compensation of the property covered by TCT No. 34314 was conducted by
the DARAB in Quezon City without notice to the landowner; that a decision was rendered
on 24 November 1992 (ANNEX "F") fixing the compensation for the parcel of land
covered by TCT No. 34314 with an area of 209.9215 hectares at P2,768,326.34 and
ordering the Landbank to pay or establish a trust account for said amount in the name of
AMADCOR; and that the trust account in the amount of P2,768,326.34 fixed in the
decision was established by adding P1,986,489.73 to the first trust account established
on 19 December 1991 (ANNEX "G"). With respect to petitioner AMADCOR's property in
Tabaco, Albay, it is alleged that the property of AMADCOR in Tabaco, Albay is covered by
TCT No. T-2466 of the Register of Deeds of Albay with an area of 1,629.4578 hectares';
that emancipation patents were issued covering an area of 701.8999 hectares which
were registered on 15 February 1988 but no action was taken thereafter by the DAR to
fix the compensation for said land; that on 21 April 1993, a trust account in the name of
AMADCOR was established in the amount of P12,247,217.83', three notices of acquisition
having been previously rejected by AMADCOR. (Rollo, pp. 8-9)
The above allegations are not disputed by the respondents except that respondent
Landbank claims that petitioner failed to participate in the DARAB proceedings (land
valuation case) despite due notice to it (Rollo, p. 100).
8

Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction
and with grave abuse of discretion because it permits the opening of trust accounts by the Landbank, in lieu of
depositing in cash or bonds in an accessible bank designated by the DAR, the compensation for the land before
it is taken and the titles are cancelled as provided under Section 16(e) of RA 6657.
9
Private respondents also
assail the fact that the DAR and the Landbank merely "earmarked", "deposited in trust" or "reserved" the
compensation in their names as landowners despite the clear mandate that before taking possession of the
property, the compensation must be deposited in cash or in bonds.
10

Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-making
power pursuant to Section 49 of RA 6657.
11
Moreover, the DAR maintained that the issuance of the
"Certificate of Deposit" by the Landbank was a substantial compliance with Section 16(e) of RA 6657 and the
ruling in the case of Association of Small Landowners in the Philippines, Inc., et al. vs. Hon. Secretary of Agrarian
Reform, G.R. No. 78742, July 14, 1989 (175 SCRA 343).
12

For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in consonance
with Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words "reserved/deposited"
were also used.
13

On October 20, 1994, the respondent court rendered the assailed decision in favor of private
respondents.
14
Petitioners filed a motion for reconsideration but respondent court denied the same.
15

Hence, the instant petitions.
On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745 alleging that
the appeal has no merit and is merely intended to delay the finality of the appealed decision.
16
The Court,
however, denied the motion and instead required the respondents to file their comments.
17

Petitioners submit that respondent court erred in (1) declaring as null and void DAR Administrative Order No.
9, Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in bonds,
and (2) in holding that private respondents are entitled as a matter of right to the immediate and provisional
release of the amounts deposited in trust pending the final resolution of the cases it has filed for just
compensation.
Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section 16(e) of
RA 6657 referred merely to the act of depositing and in no way excluded the opening of a trust account as a
form of deposit. Thus, in opting for the opening of a trust account as the acceptable form of deposit through
Administrative Circular No. 9, petitioner DAR did not commit any grave abuse of discretion since it merely
exercised its power to promulgate rules and regulations in implementing the declared policies of RA 6657.
The contention is untenable. Section 16(e) of RA 6657 provides as follows:
Sec. 16. Procedure for Acquisition of Private Lands
xxx xxx xxx
(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection
or no response from the landowner, upon the deposit with an accessible bank designated
by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the
DAR shall take immediate possession of the land and shall request the proper Register of
Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the
Philippines. . . . (emphasis supplied)
It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere does it
appear nor can it be inferred that the deposit can be made in any other form. If it were the intention to include
a "trust account" among the valid modes of deposit, that should have been made express, or at least, qualifying
words ought to have appeared from which it can be fairly deduced that a "trust account" is allowed. In sum,
there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of the term "deposit".
The conclusive effect of administrative construction is not absolute. Action of an administrative agency may
be disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or lack
of jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a legislative
enactment.
18
In this regard, it must be stressed that the function of promulgating rules and regulations may be
legitimately exercised only for the purpose of carrying the provisions of the law into effect. The power of
administrative agencies is thus confined to implementing the law or putting it into effect. Corollary to this is
that administrative regulations cannot extend
the law and amend a legislative enactment,
19
for settled is the rule that administrative regulations must be in
harmony with the provisions of the law. And in case there is a discrepancy between the basic law and an
implementing rule or regulation, it is the former that prevails.
20

In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it
issued Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of
the landowner as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is
very specific that the deposit must be made only in "cash" or in "LBP bonds". In the same vein, petitioners
cannot invoke LRA Circular Nos. 29, 29-A and 54 because these implementing regulations cannot outweigh
the clear provision of the law. Respondent court therefore did not commit any error in striking down
Administrative Circular No. 9 for being null and void.
Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw the amounts
deposited in trust in their behalf pending the final resolution of the cases involving the final valuation of their
properties, petitioners assert the negative.
The contention is premised on the alleged distinction between the deposit of compensation under Section
16(e) of RA 6657 and payment of final compensation as provided under Section 18
21
of the same law.
According to petitioners, the right of the landowner to withdraw the amount deposited in his behalf pertains
only to the final valuation as agreed upon by the landowner, the DAR and the LBP or that adjudged by the
court. It has no reference to amount deposited in the trust account pursuant to Section 16(e) in case of
rejection by the landowner because the latter amount is only provisional and intended merely to secure
possession of the property pending final valuation. To further bolster the contention petitioners cite the
following pronouncements in the case of "Association of Small Landowners in the Phil. Inc. vs. Secretary of
Agrarian Reform".
22

The last major challenge to CARP is that the landowner is divested of his property even
before actual payment to him in full of just compensation, in contravention of a well-
accepted principle of eminent domain.
xxx xxx xxx
The CARP Law, for its part conditions the transfer of possession and ownership of the
land to the government on receipt by the landowner of the corresponding payment or
the deposit by the DAR of the compensation in cash or LBP bonds with an accessible
bank. Until then, title also remains with the landowner. No outright change of ownership
is contemplated either.
xxx xxx xxx
Hence the argument that the assailed measures violate due process by arbitrarily
transferring title before the land is fully paid for must also be rejected.
Notably, however, the aforecited case was used by respondent court in discarding petitioners' assertion as it
found that:
. . . despite the "revolutionary" character of the expropriation envisioned under RA 6657
which led the Supreme Court, in the case of Association of Small Landowners in the Phil.
Inc. vs. Secretary of Agrarian Reform (175 SCRA 343), to conclude that "payments of the
just compensation is not always required to be made fully in money" even as the
Supreme Court admits in the same case "that the traditional medium for the payment of
just compensation is money and no other" the Supreme Court in said case did not
abandon the "recognized rule . . . that title to the property expropriated shall pass from the
owner to the expropriator only upon full payment of the just compensation."
23
(Emphasis
supplied)
We agree with the observations of respondent court. The ruling in the "Association" case merely recognized
the extraordinary nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation
from the traditional mode of payment of compensation and recognized payment other than in cash. It did not,
however, dispense with the settled rule that there must be full payment of just compensation before the title
to the expropriated property is transferred.
The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and
determination of just compensation under Section 18 is unacceptable. To withhold the right of the
landowners to appropriate the amounts already deposited in their behalf as compensation for their properties
simply because they rejected the DAR's valuation, and notwithstanding that they have already been deprived
of the possession and use of such properties, is an oppressive exercise of eminent domain. The irresistible
expropriation of private respondents' properties was painful enough for them. But petitioner DAR rubbed it in
all the more by withholding that which rightfully belongs to private respondents in exchange for the taking,
under an authority (the "Association" case) that is, however, misplaced. This is misery twice bestowed on
private respondents, which the Court must rectify.
Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and final
compensation under Section 18 for purposes of exercising the landowners' right to appropriate the same. The
immediate effect in both situations is the same, the landowner is deprived of the use and possession of his
property for which he should be fairly and immediately compensated. Fittingly, we reiterate the cardinal rule
that:
. . . within the context of the State's inherent power of eminent domain, just compensation
means not only the correct determination of the amount to be paid to the owner of the land
but also the payment of the land within a reasonable time from its taking. Without prompt
payment, compensation cannot be considered "just" for the property owner is made to
suffer the consequence of being immediately deprived of his land while being made to wait
for a decade or more before actually receiving the amount necessary to cope with his
loss.
24
(Emphasis supplied)
The promulgation of the "Association" decision endeavored to remove all legal obstacles in the
implementation of the Comprehensive Agrarian Reform Program and clear the way for the true freedom of
the farmer.
25
But despite this, cases involving its implementation continue to multiply and clog the courts'
dockets. Nevertheless, we are still optimistic that the goal of totally emancipating the farmers from their
bondage will be attained in due time. It must be stressed, however, that in the pursuit of this objective,
vigilance over the rights of the landowners is equally important because social justice cannot be invoked to
trample on the rights of property owners, who under our Constitution and laws are also entitled to
protection.
26

WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of merit and the
appealed decision is AFFIRMED in toto.
SO ORDERED.
-------------------------
LAND BANK OF THE PHILIPPINES, G.R. No. 164876
Petitioner,
Present:

Panganiban, C.J. (Chairman),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ.
LEONILA P. CELADA,
Respondent. Promulgated:

January 23, 2006
x ---------------------------------------------------------------------------------------- x

DECISION


YNARES-SANTIAGO, J.:

Respondent Leonila P. Celada owns 22.3167 hectares of agricultural land situated in Calatrava, Carmen,
Bohol registered under TCT No. 16436,
[1]
of which 14.1939 hectares was identified in 1998 by the Department
of Agrarian Reform (DAR) as suitable for compulsory acquisition under the Comprehensive Agrarian Reform
Program (CARP). The matter was then indorsed to petitioner Land Bank of the Philippines (LBP) for field
investigation and land valuation.

In due course, LBP valued respondents land at P2.1105517 per square meter for an aggregate value of
P299,569.61.
[2]
The DAR offered the same amount to respondent as just compensation, but it was rejected.
Nonetheless, on August 27, 1999, LBP deposited the said sum in cash and bonds in the name of respondent.
[3]


Pursuant to Section 16(d) of Republic Act (RA) No. 6657 or the Comprehensive Agrarian Reform Law of
1988, the matter was referred to the DAR Adjudication Board (DARAB), Region VII-Cebu City, for summary
administrative hearing on determination of just compensation. The case was docketed as DARAB Case No.
VII-4767-B-990.

While the DARAB case was pending, respondent filed, on February 10, 2000, a petition
[4]
for judicial
determination of just compensation against LBP, the DAR and the Municipal Agrarian Reform Officer (MARO)
of Carmen, Bohol, before the Regional Trial Court of Tagbilaran City. The same was docketed as Civil Case No.
6462 and raffled to Branch 3, the designated Special Agrarian Court (SAC). Respondent alleged that the
current market value of her land is at least P150,000.00 per hectare based on the following factors:

14.1. The land in question has been mortgaged to the defunct Rural Bank of San Miguel
(Bohol), Inc., for P1,220,000.00 on July 23, 1998 since it was appraised at P15.00 per
square meter;

14.2. Agricultural lands in said barangay are priced ranging from P140,000.00 to
P150,000.00 per hectare and current land transactions reveal said price range;

14.3. The land in question is titled or registered property, cultivated and fully
developed with rice
[5]
and corn occupying the greater portion thereof;

14.4. The topography of the land, its soil condition, climate and productivity of
surrounding lots justify the just compensation requested or asked for;

14.5. Even the class and base unit market value for agricultural lands in Bohol is about
thirty (30) times higher than the price offered per hectare by DAR/LBP.
[6]


On April 27, 2000, LBP filed its Answer
[7]
raising non-exhaustion of administrative remedies as well as
forum-shopping as affirmative defense. According to petitioner, respondent must first await the outcome of
the DARAB case before taking any judicial recourse; that its valuation was arrived at by applying the formula
prescribed by law whereas respondents was based only on the current value of like properties.

The DAR and the MARO likewise filed an Answer
[8]
averring that the determination of just compensation
rests exclusively with the LBP. Thus, they are not liable to respondent and are merely nominal parties in the
case.

Meanwhile, the DARAB Provincial Adjudicator (PARAD) issued an Order
[9]
dated April 12, 2000 affirming
the valuation made by LBP. Respondent failed to appear in the DARAB case despite due notice.

On June 4, 2001, the SAC issued an order resolving petitioners affirmative defense in this wise:

WHEREFORE, the Affirmative Defense of x x x Land Bank is hereby denied. Besides,
in the mind of the court, the recourse to the DARAB is x x x of no moment since it is only
conciliatory to the parties.

Upon agreement of the parties, the pre-trial is reset to June 11, 2001 at 9:00 in the
morning.

SO ORDERED.
[10]


Thereafter, a pre-trial conference was conducted
[11]
and trial on the merits ensued. On March 1, 2003,
the SAC rendered judgment as follows:

WHEREFORE, in view of all the foregoing, the Court hereby fixes the compensation
of the land of petitioner at P2.50 per square meter or a total of P354,847.50 for the
portion of 14.1939 hectares subject of compulsory acquisition under the CARP which it
believes just, fair and equitable under the present circumstances and which shall earn
legal interest of twelve percent (12%) per annum from the time of its taking by the DAR.
Furthermore, respondent Land Bank is hereby ordered to indemnify petitioner the
amount of P10,000.00 for attorneys fee and incidental expenses of P5,000.00 and costs.

SO ORDERED.
[12]


LBP elevated the matter to the Court of Appeals which, however, dismissed the appeal outright on the
following grounds:

1. The petition is not accompanied with an affidavit of service, although there is an
explanation that respondent, respondents counsel and Judge Venancio J. Amila were
furnished with copies of the petition by registered mail x x x.

2. Petitioners counsel indicated his IBP and PTR but not his Roll of Attorneys
Number x x x.

3. Copies of (a) PARAD Decision x x x adverted to in the petition which fixed the land
valuation for just compensation at P299,569.11 and (b) petitioners Petition for Judicial
Determination of Just Compensation filed with the Regional Trial Court of Tagbilaran City,
Branch 3, were not attached as annexes, x x x.
[13]


Upon denial of its motion for reconsideration,
[14]
LBP filed the instant petition under Rule 45 of the Rules
of Court, alleging that:

A
THE COURT OF APPEALS ERRED IN X X X RIGIDLY OR STRICTLY APPLYING
PROCEDURAL LAW AT THE EXPENSE OF SUBSTANTIAL JUSTICE AND THE RIGHT TO
APPEAL.

B
THE SAC A QUO ERRED IN ASSUMING JURISDICTION OVER THE PETITION
FOR DETERMINATION OF JUST COMPENSATION WHILE ADMINISTRATIVE
PROCEEDINGS IS ON-GOING BEFORE THE DARAB, REGION VII, CEBU CITY.

C
THE SAC A QUO ERRED IN FIXING THE JUST COMPENSATION OF THE LAND
BASED NOT ON ITS ACTUAL LAND USE BUT ON THE VALUATION OF NEIGHBORING
LANDS.

D
THE SAC A QUO ERRED IN AWARDING ATTORNEYS FEES AND INCIDENTAL
EXPENSES X X X.
[15]


On the first assigned error, petitioner asserts that the Court of Appeals should have liberally
construed the rules of procedure and not dismissed its appeal on technical grounds.

We agree with petitioner.

The Court of Appeals dismissed petitioners appeal on three technical grounds, namely: (a) lack of
affidavit of service; (b) failure of counsel to indicate his Roll of Attorneys number; and (c) failure to attach
material portions of the records. However, the lack of affidavit of service is not deemed fatal where the
petition filed below is accompanied by the original registry receipts showing that the petition and its annexes
were served upon the parties.
[16]
On the other hand, the failure of counsel to indicate his Roll of Attorneys
number would not affect respondents substantive rights, such that petitioners counsel could have been
directed to comply with the latter requirement rather than dismiss the petition on purely technical
grounds. As for petitioners failure to attach material portions of the records, we held in Donato v. Court of
Appeals
[17]
that:

[T]he failure of the petitioner to x x x append to his petition copies of the pleadings and
other material portions of the records as would support the petition, does not justify the
outright dismissal of the petition. It must be emphasized that the RIRCA (Revised
Internal Rules of the Court of Appeals) gives the appellate court a certain leeway to
require parties to submit additional documents as may be necessary in the interest of
substantial justice. Under Section 3, paragraph d of Rule 3 of the RIRCA, the CA may
require the parties to complete the annexes as the court deems necessary, and if the
petition is given due course, the CA may require the elevation of a complete record of the
case as provided for under Section 3(d)(5) of Rule 6 of the RIRCA x x x.
[18]


An examination of the records and pleadings filed before the Court of Appeals reveals that there
was substantial compliance with procedural requirements. Moreover, we have held time and again that cases
should, as much as possible, be determined on the merits after the parties have been given full opportunity to
ventilate their causes and defenses, rather than on technicality or some procedural imperfection.
[19]
After all,
technical rules of procedure are not ends in themselves but are primarily devised to help in the proper and
expedient dispensation of justice. In appropriate cases, therefore, the rules may be construed liberally in
order to meet and advance the cause of substantial justice.
[20]


While a remand of the case to the appellate court would seem to be in order, we deem it proper to
resolve the case on the merits if only to write finis to the present controversy.

We do not agree with petitioners submission that the SAC erred in assuming jurisdiction over
respondents petition for determination of just compensation despite the pendency of the administrative
proceedings before the DARAB. In Land Bank of the Philippines v. Court of Appeals,
[21]
the landowner filed an
action for determination of just compensation without waiting for the completion of the DARABs re-
evaluation of the land. The Court nonetheless held therein that the SAC acquired jurisdiction over the action
for the following reason:

It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has original and
exclusive jurisdiction over all petitions for the determination of just compensation to
landowners. This original and exclusive jurisdiction of the RTC would be undermined if
the DAR would vest in administrative officials original jurisdiction in compensation cases
and make the RTC an appellate court for the review of administrative decision. Thus,
although the new rules speak of directly appealing the decision of adjudicators to the
RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the original and
exclusive jurisdiction to determine such cases is in the RTCs. Any effort to transfer such
jurisdiction to the adjudicators and to convert the original jurisdiction of the RTCs into
appellate jurisdiction would be contrary to Sec. 57 and therefore would be void. Thus,
direct resort to the SAC by private respondent is valid.
[22]


It would be well to emphasize that the taking of property under RA No. 6657 is an exercise of the power
of eminent domain by the State.
[23]
The valuation of property or determination of just compensation in
eminent domain proceedings is essentially a judicial function which is vested with the courts and not with
administrative agencies.
[24]
Consequently, the SAC properly took cognizance of respondents petition for
determination of just compensation.

In the same vein, there is no merit to petitioners contention that respondent failed to exhaust
administrative remedies when she directly filed the petition for determination of just compensation with the
SAC even before the DARAB case could be resolved. The issue is now moot considering that the valuation
made by petitioner had long been affirmed by the DARAB in its order dated April 12, 2000. As held in Land
Bank of the Philippines v. Wycoco,
[25]
the doctrine of exhaustion of administrative remedies is inapplicable
when the issue is rendered moot and academic, as in the instant case.

With regard to the third assigned error, however, we agree with petitioner that the SAC erred in
setting aside petitioners valuation of respondents land on the sole basis of the higher valuation given for
neighboring properties. In this regard, the SAC held:

It appears from the evidence of petitioner that the neighboring lands of
similar classification were paid higher than what was quoted to her land by respondent
Land Bank as the value per square meter to her land was only quoted at P2.1105517
while the others which were of the same classification were paid by respondent Bank at
P2.42 more or less, per square meter referring to the land of Consuelito Borja (Exh. D)
and Cesar Borja (Exh. F). Furthermore, the land of petitioner was allegedly mortgaged
for a loan of P1,200,000.00 before the Rural Bank of San Miguel, Bohol and that it was
purchased by her from a certain Felipe Dungog for P450,000.00 although no documents
therefor were shown to support her claim. Nevertheless, the Court finds a patent
disparity in the price quotations by respondent Land Bank for the land of petitioner and
that of the other landowners brought under CARP which could be caused by deficient or
erroneous references due to the petitioners indifference and stubborn attitude in not
cooperating with respondent bank in submitting the data needed for the evaluation of
the property. x x x At any rate, the price quotation by respondent Land Bank on the land
of the petitioner is low more so that it was done some four years ago, particularly, on
June 22, 1998 (Exh. 1) and the same has become irrelevant in the course of time due to
the devaluation of the peso brought about by our staggering economy.
[26]


As can be gleaned from above ruling, the SAC based its valuation solely on the observation that
there was a patent disparity between the price given to respondent and the other landowners. We note that
it did not apply the DAR valuation formula since according to the SAC, it is Section 17 of RA No. 6657 that
should be the principal basis of computation as it is the law governing the matter.
[27]
The SAC further held
that said Section 17 cannot be superseded by any administrative order of a government agency,
[28]
thereby
implying that the valuation formula under DAR Administrative Order No. 5, Series of 1998 (DAR AO No. 5, s. of
1998),
[29]
is invalid and of no effect.

While SAC is required to consider the acquisition cost of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the owner, the tax declaration and the
assessments made by the government assessors
[30]
to determine just compensation, it is equally true that
these factors have been translated into a basic formula by the DAR pursuant to its rule-making power under
Section 49 of RA No. 6657.
[31]
As the government agency principally tasked to implement the agrarian reform
program, it is the DARs duty to issue rules and regulations to carry out the object of the law. DAR AO No. 5, s.
of 1998 precisely filled in the details of Section 17, RA No. 6657 by providing a basic formula by which the
factors mentioned therein may be taken into account. The SAC was at no liberty to disregard the formula
which was devised to implement the said provision.

It is elementary that rules and regulations issued by administrative bodies to interpret the law
which they are entrusted to enforce, have the force of law, and are entitled to great respect.
[32]
Administrative
issuances partake of the nature of a statute
[33]
and have in their favor a presumption of legality.
[34]
As such,
courts cannot ignore administrative issuances especially when, as in this case, its validity was not put in issue.
Unless an administrative order is declared invalid, courts have no option but to apply the same.

Thus, Section 17 of RA No. 6657 states:

SEC. 17. Determination of Just Compensation. In determining just compensation, the
cost of acquisition of the land, the current value of like properties, its nature, actual use
and income, the sworn valuation by the owner, the tax declarations, and the assessment
made by government assessors, shall be considered. The social and economic benefits
contributed by the farmers and the farmworkers and by the Government to the property
as well as the nonpayment of taxes or loans secured from any government financing
institution on the said land shall be considered as additional factors to determine its
valuation.

As stated earlier, the above provision is implemented through DAR AO No. 5, s. of 1998, which
provides that:

A. There shall be one basic formula for the valuation of lands covered by VOS or CA:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration

The above formula shall be used if all three factors are present, relevant, and applicable.

A1. When the CS factor is not present and CNI and MV are applicable, the formula shall
be:

LV = (CNI x 0.9) + (MV x 0.1)

A2. When the CNI factor is not present, and CS and MV are applicable, the formula
shall be:

LV = (CS x 0.9) + (MV x 0.1)

A3. When both the CS and CNI are not present and only MV is applicable, the formula
shall be:

LV = MV x 2

In no case shall the value of idle land using the formula MV x 2 exceed the lowest value of
land within the same estate under consideration or within the same barangay or
municipality (in that order) approved by LBP within one (1) year from receipt of
claimfolder.

Accordingly, petitioner applied the formula under A1 above since the comparable sales factor (CS
factor) was not present. As observed by the SAC itself, respondent refused to cooperate with the local
valuation office of petitioner and did not provide the necessary data to arrive at a proper CS factor. DAR AO
No. 5, s. of 1998 defines CS factor as follows:

C. CS shall refer to any one or the average of all the applicable sub-factors, namely ST,
AC and MVM:

Where: ST = Peso Value of Sales Transactions as defined under Item C.2
AC = Acquisition Cost as defined under Item C.3
MVM = Market Value Based on Mortgage as defined under Item C.4

x x x x

C.2. The criteria in the selection of the comparable sales transaction (ST) shall be as
follows:

a. When the required number of STs is not available at the barangay level, additional
STs may be secured from the municipality where the land being offered/covered is
situated to complete the required three comparable STs. In case there are more STs
available than what is required at the municipal level, the most recent transactions shall
be considered. The same rule shall apply at the provincial level when no STs are
available at the municipal level. In all cases, the combination of STs sourced from the
barangay, municipality and province shall not exceed three transactions.

b. The land subject of acquisition as well as those subject of comparable sales
transactions should be similar in topography, land use, i.e., planted to the same crop.
Furthermore, in case of permanent crops, the subject properties should be more or less
comparable in terms of their stages of productivity and plant density.

c. The comparable sales transactions should have been executed within the period
January 1, 1985 to June 15, 1988, and registered within the period January 1, 1985, to
September 13, 1988.

x x x x

C.3. Acquisition Cost (AC) AC shall be deemed relevant when the property subject of
acquisition was acquired through purchase or exchange with another property within
the period January 1, 1985 to June 15, 1988 and registered within the period January 1,
1985 to September 13, 1988, and the condition of said property is still substantially
similar from the date of purchase or exchange to the date of FI.

x x x x

C.4. Market Value Based on Mortgage (MVM) For MVM to be relevant or applicable,
the property subject of acquisition should have been mortgaged as of June 15, 1988 and
the condition of the property is still substantially similar up to the date of FI. MVM shall
refer to the latest available appraised value of the property.

In the case at bar, while respondent attempted to prove during the hearings before the SAC,
comparable sales transactions, the acquisition cost of the property as well as its mortgage value, she failed to
submit adequate documentary evidence to support the same. Consequently, there was nothing from which
the CS factor could be determined.

In contrast, petitioner arrived at its valuation by using available factors culled from the Department
of Agriculture and Philippine Coconut Authority,
[35]
and by computing the same in accordance with the
formula provided, thus

COMPUTATION (Applicable Formula) : LV = 0.90 CNI + 0.10 MV

Comparable Land Transactions (P x x x x ____ ) = P x-x-x

Capitalized Net Income: Cassava 16,666.67 x 0.90 = 15,000.00
Corn/Coco 26,571.70 = 23,914.53

Market Value Cassava 8,963.78 x 0.10 = 896.38
per Tax Declaration: Corn/Coco 10,053.93 = 1,005.39

Computed Value per Hectare: Cassava 15,896.38; Corn/Coco 24,919.92

x x x

Value per hectare used: Cassava 15,896.38 x 6.0000 has. = 95,378.28
Corn/Coco 24,919.92 x 8.1939 has. = 204,191.33

Payment due to LO : P299, 569.61

The above computation was explained by Antero M. Gablines, Chief of the Claims, Processing,
Valuation and Payment Division of the Agrarian Operations Center of the Land Bank, to wit:

ATTY. CABANGBANG: (On direct):

x x x x

q. What are the items needed for the Land Bank to compute?
a. In accordance with Administrative Order No. 5, series of 1998, the value of the
land should be computed using the capitalized net income plus the market
value. We need the gross production of the land and its output and the net
income of the property.

q. You said gross production. How would you fix the gross production of the
property?
a. In that Administrative Order No. 5, if the owner of the land is cooperative, he is
required to submit the net income. Without submitting all his sworn
statements, we will get the data from the DA (Agriculture) or from the coconut
authorities.

x x x x

q. In this recommended amount which you approved, how did you arrive at this
figure?
a. We used the data from the Philippine (Coconut) Authority and the Agriculture and
the data stated that Cassava production was only 10,000 kilos per hectare;
corn, 2,000 kilos; and coconuts, 15.38 kilos per hectare. The data stated that in
the first cropping of 1986, the price of cassava was P1.00 per kilo; corn was
sold at P7.75 per kilo; and the Philippine Coconut Authority stated that during
that time, the selling price of coconuts was P8.23 per kilo.

q. After these Production data and selling price, there is here a cost of operation,
what is this?
a. It is the expenses of the land owner or farmer. From day one of the cultivation
until production. Without the land owners submission of the sworn statement
of the income, production and the cost, x x x Administrative Order No. 5 states
that x x x we will use 20% as the net income, meaning 80% of the production
in peso. This is the cost of valuation.

q. 80 % for what crops?
a. All crops except for coconuts where the cost of expenses is only 20%.

q. Summing all these data, what is the value per hectare of the cassava?
a. The cassava is P15,896.38.

q. How about the corn x x x intercropped with coconuts?
a. P24,919.92.
[36]


Under the circumstances, we find the explanation and computation of petitioner to be sufficient and
in accordance with applicable laws. Petitioners valuation must thus be upheld.

Finally, there is no basis for the SACs award of 12% interest per annum in favor of
respondent. Although in some expropriation cases, the Court allowed the imposition of said interest, the same
was in the nature of damages for delay in payment which in effect makes the obligation on the part of the
government one of forbearance.
[37]
In this case, there is no delay that would justify the payment of interest
since the just compensation due to respondent has been promptly and validly deposited in her name in cash
and LBP bonds. Neither is there factual or legal justification for the award of attorneys fees and costs of
litigation in favor of respondent.

WHEREFORE, the instant petition is GRANTED. The Decision of the Regional Trial Court,
Tagbilaran City, Branch 3 in Civil Case No. 6462 dated March 1, 2003 isREVERSED and SET ASIDE. A new
judgment is entered fixing the just compensation for respondents land at P2.1105517 per square meter or a
total of P299,569.61.

SO ORDERED.