G.R. No. 161834 - Land Bank of the Philippines vs. Heir of Vda. de Arieta

Petitioner: Land Bank of the Philippines (LBP), acting in its capacity under the Comprehensive Agrarian Reform Program (CARP).
Respondent: Heir of Trinidad S. Vda. de Arieta, represented by the sole and only heir, Alicia Arieta Tan, owner of a parcel of agricultural land.
The case involves the interpretation and application of Section 16 of Republic Act (R.A.) No. 6657 governing the acquisition of private agricultural lands.

The subject property is a parcel of agricultural land in Sampao, Kapalong, Davao del Norte, covering approximately 37.1010 hectares and evidenced by Transfer Certificate of Title No. T-49200.
Out of the total area, 14.999 hectares are covered by R.A. No. 6657 through the Voluntary Offer to Sell (VOS) scheme.
The private respondent initially offered a price of P2,000,000.00 per hectare for the CARP-covered portion.
Petitioner LBP, however, conducted an initial valuation and offered a significantly lower amount of P76,387.57 per hectare, amounting to a total of P1,145,806.06.

In line with Section 16 (e) of R.A. No. 6657, after the landowner’s rejection of the initial valuation offer, LBP deposited the provisional compensation of P1,145,806.06 in cash and bonds.
The Department of Agrarian Reform (DAR) initiated summary administrative proceedings through its adjudicatory arm—the DAR Adjudication Board (DARAB), with proceedings conducted by the Regional Adjudicator (RARAD) for Region XI (DARAB Case No. LV-XI-0330-DN-2002).
On June 26, 2002, the DARAB fixed the compensation at P10,294,721.00 (equivalent to P686,319.36 per hectare) following the required summary administrative process.
Petitioner LBP subsequently filed motions for reconsideration in relation to both the DARAB’s decision and the subsequent SAC orders, while respondent advanced its position regarding the required amount.
On December 12, 2002, the Special Agrarian Court (SAC) ordered LBP to deposit the DARAB-determined amount. Further motions for reconsideration were filed by LBP and ultimately denied.

The deposit requirement under Section 16 (e) should be based on the initial valuation or the “offer” provided by the DAR/LBP, which had already been rejected by the landowner.
The petitioner maintained that this provisional compensation had been properly deposited in compliance with legal requirements.

The respondent contended that the deposit should be the amount determined by the DARAB after the summary administrative proceeding, i.e., P10,294,721.00, not the initial valuation.
It also argued that this interpretation was consistent with the sequence of events outlined in Section 16.

Petitioner argued that the Special Agrarian Court, in reviewing DARAB decisions prior to a final determination of just compensation, was overstepping its jurisdiction.
The petitioner further contended that the order to deposit the higher, DARAB-determined amount hampered the proper functioning of the CARP and could potentially create financial and administrative chaos.

Section 16 of R.A. No. 6657 outlines the procedure for acquisition, from the notice and valuation to the landowner’s acceptance/rejection, deposit of compensation, and eventual transfer of title.
Sub-paragraphs (a) to (e) of Section 16 indicate a clear sequence from offer to deposit.

DAR Administrative Order (AO) No. 02, series of 1996, establishes procedures regarding deposit and valuation.
Executive Order No. 405 transferred the primary responsibility of land valuation from DAR to LBP, emphasizing the bank’s crucial role in the process.
Prior cases, including Land Bank of the Philippines vs. Court of Appeals and others, provided jurisprudential backing for the LBP’s initial valuation being the basis for provisional compensation.

The initial valuation or “offer” provided by the DAR/LBP (P1,145,806.06), or
The amount subsequently determined by the DARAB after the summary administrative proceeding (P10,294,721.00)?

Whether the words “rejection” and “deposit” in Section 16 apply to the offer as made under sub-paragraphs (a) to (c) or extend to the decision rendered by the DARAB under sub-paragraph (d).

Can the SAC pre-judge or review the decisions of quasi-judicial bodies such as the DARAB, RARAD, or PARAD, particularly before the final determination of just compensation by the courts?