G.R. No. 120223 - Alba vs. Deputy Ombudsman

Case Summary (G.R. No. 120223)

Factual Background

HFC, registered owner of a 29.0966-hectare agricultural parcel in Masbate, voluntarily offered its land for coverage under RA 6657 in 1988 for ₱581,932 or ₱20,000 per hectare. The government, through DAR and LBP, excluded 1.5095 hectares from the area subject to compensation, valuing the remainder at ₱165,739.44 pursuant to DAR Administrative Order (AO) No. 6 guidelines. HFC rejected LBP's valuation and petitioned the DAR Adjudication Board (DARAB) seeking a higher compensation of ₱25,000 per hectare or ₱725,000 total, then concurrently filed a complaint for just compensation with the RTC acting as SAC, claiming official inaction and delay by DARAB. LBP argued the RTC lacked jurisdiction and that HFC prematurely filed without exhausting administrative remedies.

Administrative and Trial Court Proceedings

DARAB affirmed LBP's valuation (₱165,739.44) and dismissed HFC's administrative petition for lack of jurisdiction. The RTC, acting as SAC, on July 27, 2000, independently valued the land at ₱32,000 per hectare or ₱931,109.20 total including losses of land use and awarded attorney’s fees of 10%. The SAC justified its valuation on the land’s proximity to a commercial district and existing partial agricultural use, noting the land's pastoral nature. Both parties appealed to CA.

Court of Appeals' Decisions

The CA initially reversed the RTC, dismissing HFC’s complaint for failure to exhaust administrative remedies under Section 16(f) of RA 6657, deeming RTC’s assumption of jurisdiction premature. Upon LBP’s motion for reconsideration submitting DARAB’s decision, CA reinstated RTC’s ruling but deleted the attorney’s fees award. CA held that RTC properly valued the land based on evidence including witness testimonies and site inspections, affirming RTC’s disregard for the DAR and LBP’s valuation guidelines. CA ruled that consequential damages lacked basis, hence were deleted.

Petition for Review and Main Issues

LBP challenged the CA's reinstatement of RTC’s decision and contended:

SAC lacked jurisdiction due to pending DARAB proceedings;
HFC failed to exhaust administrative remedies and committed forum shopping;
SAC disregarded mandatory application of DAR’s valuation formula per Administrative Orders No. 6 and 11, violating Section 17 of RA 6657 and prior Supreme Court rulings; and
CA erred in confirming attorney’s fees and damages.

HFC counter-argued:

SAC’s jurisdiction is original and exclusive under Section 57 of RA 6657 over just compensation petitions, allowing direct filing;
Judicial intervention is proper due to DARAB’s unreasonable delay;
No forum shopping occurred; and
Strict formulaic adherence restricts the SAC’s judicial discretion.

Supreme Court Ruling on Jurisdiction and Administrative Remedies

The Court affirmed that SAC has original and exclusive jurisdiction over petitions for just compensation despite pending DARAB administrative proceedings. The Court clarified that the DARAB’s valuation is preliminary and non-binding, thus the SAC is the proper judicial forum for final determination of just compensation. This preserves the constitutional mandate that valuation in eminent domain or land taking is a judicial function, not an administrative one. The Court reiterated its prior rulings in Republic v. CA, Land Bank v. Belista, Land Bank v. Celada, and others supporting this position.

Regarding exhaustion of administrative remedies, the Court ruled it is not applicable when the issue has become moot or rendered academic, such as when DARAB’s valuation has already been affirmed yet no agreement between parties exists.

Supreme Court Ruling on Forum Shopping

The Court held that HFC did not commit forum shopping because:

There was no identity of causes of action or identical reliefs sought between DARAB and SAC cases;
The DARAB’s decision is preliminary and not res judicata;
Judicial proceedings and administrative determinations coexist but are separate;
Avoidance of simultaneous contradictory judgments negates actual forum shopping in this scenario.

Supreme Court Ruling on Determination of Just Compensation

The Court emphasized that:

Section 17 of RA 6657 prescribes factors for determining just compensation (cost of acquisition, comparable land values, nature, use, tax declarations, sworn valuations, government assessments, among others);
DAR Administrative Order No. 6 (1992), as amended by AO No. 11 (1994), codified these factors into a mandatory basic formula for valuation, which SAC must apply;
SAC and CA erred in disregarding the DAR formula and instead performing valuation based on personal assessment or judicial notice;
Administrative issuances such as DAR AOs carry force of law unless invalidated and must be respected by courts.

Supreme Court Ruling on Judicial Notice of Land’s Nature

The Court found that the RTC/SAC improperly took judicial notice of the land's commercial nature based on location without affording parties the opportunity to present evidence as required by Section 3, Rule 129 of the Rules of Court. Classification o

Case Syllabus (G.R. No. 120223)

Background and Parties Involved

The petitioner, Land Bank of the Philippines (LBP), filed a petition for review on certiorari assailing the Court of Appeals' (CA) Amended Decision and Resolution in C.A.-G.R. CV No. 69661.
The CA amended decision had reinstated with modification a Regional Trial Court (RTC) of Masbate, Branch 48 acting as a Special Agrarian Court (SAC) judgment on a case concerning just compensation under Republic Act No. (RA) 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL).
The respondent, Honeycomb Farms Corporation (HFC), was the registered owner of agricultural land in Curvada, Caintagan, Masbate, covered by Transfer Certificate of Title No. T-2550 with an area of 29.0966 hectares.

Factual Antecedents

On February 5, 1988, HFC voluntarily offered its land to the Department of Agrarian Reform (DAR) for coverage under RA 6657, with an asking price of P581,932.00 or P20,000.00 per hectare.
The DAR and LBP determined an acquirable and compensable area of 27.5871 hectares; 1.5095 hectares were excluded due to their hilly and underdeveloped nature.
LBP, authorized to determine land valuation and compensation under CARL, fixed the value at P165,739.44 based on DAR Administrative Order No. 6, series of 1992, and notified HFC.
HFC rejected LBP’s valuation and on January 15, 1996, filed a petition with the DAR Adjudication Board (DARAB) requesting a summary administrative determination of just compensation at P25,000.00 per hectare, or P725,000.00 total.
While DARAB proceedings were pending, HFC filed a complaint with the RTC/SAC for just compensation of P725,000.00 plus 10% attorney’s fees alleging unreasonable delay and official inaction by DARAB violating Section 16 of RA 6657.
LBP countered that HFC’s RTC/SAC complaint was premature and lacked cause of action for failing to exhaust administrative remedies.
DARAB issued a Decision on May 14, 1998, affirming LBP’s valuation, dismissed HFC's petition without prejudice for want of jurisdiction.

RTC Decision

On July 27, 2000, the RTC/SAC fixed just compensation at P931,109.20 for the 27.5871 hectares and awarded attorney’s fees of 10% of the just compensation.
The RTC’s valuation considered the land’s actual uses (sporadic planting of coconut and corn, undeveloped grassland), location near the road and commercial district of Cataingan, Masbate.
RTC determined P32,000.00 per hectare value, including consequential damages for unusable excluded land (1.5095 hectares at same rate).
Both parties appealed to the CA: HFC contested the RTC valuation as unsupported and argued the market value was P113,000.00 per hectare.
LBP contested the SAC’s jurisdiction amid pending DARAB proceedings and challenged the award of consequential damages and attorney’s fees, also disputing the RTC taking judicial notice of property characteristics.

Court of Appeals Decision and Amended Decision

The CA initially reversed the RTC judgment and dismissed HFC's suit for failure to exhaust administrative remedies under Section 16(f) of RA 6657, viewing the SAC’s action as premature.
Upon LBP's motion for reconsideration, attaching the DARAB Decision, CA recalled and set aside its initial decision.
CA reinstated the RTC judgment with modification deleting the award of attorney’s fees.
CA held that just compensation is the market value considering factors such as current value of similar properties, actual/potential uses, size, shape, and location based on substantial evidence such as the property sketch, testimonies, and field rep