G.R. No. 221060 - Marken, Inc. vs. Landbank of the Philippines

Case Summary (G.R. No. 221060)

Petitioner

Marken, Incorporated (Aqua Salina, Inc.), owner of two parcels covered by TCT Nos. T-13682 (319.1552 ha acquired portion) and T-13683 (88.8800 ha acquired portion), challenged the inclusion of its lands under CARP and disputed the amount of just compensation fixed by LBP and adopted by DARAB.

Respondents

Land Bank of the Philippines (preliminary valuation and deposit of compensation), Department of Agrarian Reform (issued Notice of Coverage and administrative dispositions), and DARAB (administrative adjudicator for valuation disputes).

Key Places

Subject properties located in Barangays San Agustin and Bubog Central, Municipality of San Jose, Province of Occidental Mindoro.

Key Dates

Notice of Coverage: August 12, 1998; LBP deposits and MOV preparations: 2000–2002; DARAB Decision: September 5, 2011; DARAB Resolution denying reconsideration: September 13, 2012; CA Decision affirming DARAB: April 24, 2015; CA Resolution denying reconsideration: October 1, 2015; Supreme Court decision affirming lower tribunals: August 9, 2023.

Applicable Law and Constitutional Basis

1987 Constitution (as the decision date is post-1990); Republic Act No. 6657 (Comprehensive Agrarian Reform Law of 1988) and its provisions on coverage, exemptions, and special jurisdiction (notably Sections 10, 11, 17, 56, and 57); Republic Act No. 7881 (1995 amendment regarding prawn farms and fishponds); R.A. No. 9700 (2009 amendments to valuation procedures); DAR Administrative Orders implementing valuation rules (AO Nos. 5-98, 02-09, 001-10, and 07-11); DARAB Rules of Procedure (2009) and 2003 Rules for Agrarian Law Implementation (ALI) cases. Procedural rules on SAC original and exclusive jurisdiction were pivotal.

Antecedents and Notice of Coverage

DAR issued a Notice of Coverage in August 1998 placing the subject properties under CARP. LBP performed valuations and prepared Memoranda of Valuation and related claim folder materials, assigning aggregate values of P11,648,130.73 (T-13682) and P7,882,623.22 (T-13683). LBP made deposits to petitioner’s name in amounts corresponding to its preliminary valuations, after which petitioner rejected the valuation and invoked administrative summary proceedings before DARAB.

LBP Valuation and Deposits

LBP prepared valuation inputs and MOV‑CFPVS in accordance with its mandate under RA 6657. LBP’s computations resulted in the figures adopted by DARAB. LBP also deposited the compensation amounts for the respective parcels in the name of petitioner, consistent with statutory procedures for compulsory acquisition.

Referral to DARAB and DARAB Decision

Because petitioner rejected LBP’s valuation, the matter proceeded to summary administrative proceedings before DARAB, which adopted LBP’s valuations in full. DARAB directed LBP to recompute the additional compensation for improvements that redounded to farmer‑beneficiaries and ordered immediate payment of the just compensation amounts after accounting for any withdrawals.

DARAB’s Findings and Reasoning

DARAB emphasized petitioner’s failure to present clear and convincing evidence to overcome the presumption of regularity of LBP’s valuation. DARAB found no proof that the lands were exempt from CARP coverage or that they continued to be used as fishponds/prawn farms at the time of the field investigations (1998–2000). It relied on field investigation reports classifying the parcels as idle lands and on valuation factors prescribed by Section 17 of RA 6657 and implementing DAR AOs.

Petition for Reconsideration and CA Proceedings

Petitioner moved for reconsideration at DARAB, asserting much higher valuations and claiming exemption based on prior use as prawn/fishponds and a prior Deferment Order. DARAB denied reconsideration. Petitioner then filed a petition for review under Rule 43 with the Court of Appeals. The CA dismissed the petition for lack of merit, holding that petitioner had resorted to the wrong mode of appeal and that DARAB’s decision had become final and executory because petitioner failed to file an original action for determination of just compensation before the SAC as required.

Issues Framed on Review to the Supreme Court

Petitioner presented two principal issues: (1) whether the CA erred in not treating petitioner’s CA appeal as an attack on DAR’s inclusion of the lands under CARP coverage, and (2) whether just compensation should reflect classification as prawn/fishpond (commercial) rather than as agricultural land.

Petitioner’s Arguments on Coverage and Valuation

Petitioner contended the lands were used for salt production, fishponds, and prawn farming and thus were either exempt under RA 7881 or entitled to a ten‑year deferment; petitioner invoked a prior Order of Deferment (1988–1998) and relied on a 1991 Memorandum of Agreement and Filipinas Aquaculture Corporation financial statements to demonstrate aquaculture use and higher market values from independent appraisals and the municipal assessor.

Respondents’ Arguments

LBP, DAR, and DARAB maintained petitioner’s arguments were mere rehash of matters already decided; they asserted procedural finality due to petitioner’s failure to pursue SAC review within the prescribed time and procedure. They defended the LBP valuation method as consistent with statutory and administrative rules and noted the absence of evidence proving exemption or continuous aquaculture use at the time of DAR’s field investigations.

Supreme Court’s Jurisdictional Holding: SAC Original and Exclusive Jurisdiction

The Supreme Court held that petitioner availed of the wrong remedy by appealing to the CA under Rule 43 instead of filing an original action with the SAC for determination of just compensation, as required by Section 57 of RA 6657 and Section 6, Rule XIX of the DARAB Rules. The Court reiterated the principle that the SAC (branches of the RTC designated as such) has original and exclusive jurisdiction over petitions for determination of just compensation and that administrative determinations become final and executory absent timely filing of an original action with the SAC.

Application of ALI Rules and Proper Administrative Remedies for Coverage Protests

The Court addressed petitioner’s contention that it sought to challenge DAR’s inclusion of the lands under CARP rather than merely contest valuation. The Court explained that challenges to CARP coverage and petitions to lift notices of coverage are within the primary jurisdiction of the DAR Regional Director (or the Secretary when appropriate) under the 2003 Rules for Agrarian Law Implementation (ALI) and DAR Administrative Orders. Thus, even coverage objections must be procedurally presented before DAR administrative channels; taking the matter directly to CA did not satisfy those administrative prerequisites.

Factual Determination on CARP Coverage and Standard of Review

On the merits, the Court found the question of coverage to be a factual determination best entrusted to DAR and DARAB given their specialized competence. The Court emphasized its limited role in Rule 45 certiorari review — confined to questions of law and not a reweighing of factual evidence. Because DARAB’s factual findings that the lands were classified as idle at the time of field investigations were supported by substantial evidence, the Court accorded them deference and declined to disturb those findings.

Evidence of Actual Use and Temporal Relevance

The Court observed that petitioner’s supporting documents (MOA and FAC financial statements) dated from the late 1980s to 1991 and did not show continued aquaculture use up to the time of DAR’s 1998–2000 inspections or at petitioner’s acquisition in 1996. Prior use alone does not establish present actual use; the DAR field investigations indicating idle land and subsequent riceland planting in 1999 were determinative for CARP coverage at the relevant time.

Reclassification Claim and Local Government Procedure

Petitioner’s reliance on a 1995 Sangguniang Bayan Resolution reclassifying the area as industrial was rejected. The Court applied the Local Government Code’s requirement that reclassification of agricultural lands must be implemented by ordinance after public hearings; a mere council resolution is legally insufficient to effect reclassification

Case Syllabus (G.R. No. 221060)

Procedural Posture

Petition for Review on Certiorari under Rule 45 filed by Marken, Incorporated (now Aqua Salina, Inc.) seeking reversal and setting aside of the Court of Appeals (CA) April 24, 2015 Decision and October 1, 2015 Resolution in CA-G.R. SP No. 127071 which affirmed the Department of Agrarian Reform Adjudication Board (DARAB) Decision dated September 5, 2011 and Resolution dated September 13, 2012 in DARAB Case No. JC-IV-0330-OCC-MDO-CO-02.
Supreme Court decision authored by Chief Justice Gesmundo, C.J., dated August 9, 2023, with Justices Hernando, Zalameda, Rosario, and Marquez concurring.
Petition raises primarily: (1) whether CA erred by not considering that the CA petition sought redress for the DAR’s alleged erroneous inclusion of the subject properties under CARP; and (2) whether CA erred by not considering that just compensation should be based on classification as prawn/fishpond rather than agricultural land.

Relevant Parties and Subject Properties

Petitioner: Marken, Incorporated (also referred to as Marken Incorporated; now Aqua Salina, Inc.).
Respondents: Landbank of the Philippines (LBP); Department of Agrarian Reform (DAR); Department of Agrarian Reform Adjudication Board (DARAB).
Subject properties: two parcels located in Barangays San Agustin and Bubog Central, Municipality of San Jose, Province of Occidental Mindoro.
Transfer Certificate of Title Nos.: T-13682 and T-13683.
Stated aggregate areas in the record: 411.2680 hectares (T-13682) and 100.2302 hectares (T-13683) (as described in the antecedent facts of the record).

Antecedent Facts and Early Proceedings

August 12, 1998: Notice of Coverage and field investigation sent to petitioner notifying that subject properties were placed under the Compulsory Acquisition Scheme of the Comprehensive Agrarian Reform Program (CARP) under R.A. No. 6657.
LBP performed valuation work (Memoranda of Valuation, Claim Folder Profile, Valuation Summaries of Agricultural Land — MOV-CFPVS) pursuant to its mandate.
LBP preliminary valuations recorded: TCT No. T-13682 total value P11,648,130.73; TCT No. T-13683 total value P7,882,623.22.
DAR requested deposit of compensation proceeds (Sep. 8, 2000 and Feb. 20, 2001) in connection with valuations for TCT No. T-13682 (amounts P10,289,122.78 and P1,359,007.95 respectively).
LBP deposited, per certifications dated Sep. 11, 2000; Mar. 9, 2001; Mar. 13, 2001; and May 24, 2002: P11,648,130.73 for 319.1552 hectares (TCT No. T-13682) and P7,882,623.22 for 88.8800 hectares (TCT No. T-13683).
Petitioner rejected LBP valuation; matter referred to DARAD/DARAB for summary administrative proceedings to fix just compensation.

DARAB Proceedings and Decision (September 5, 2011)

DARAB adopted LBP valuation as just compensation and issued dispositive order adopting valuations:
- For TCT No. T-13682 (area acquired 319.1552 hectares) total compensation P11,648,130.73 broken down by MOV issuance dates and land uses: July 24, 2000 (Idle with FBs, 281.9188 ha — P10,289,122.78) and Dec. 29, 2000 (Idle now planted, 37.2364 ha — P1,359,007.95).
- For TCT No. T-13683 (88.8800 ha) total compensation P7,882,623.22 broken down by MOV dates and land uses: Dec. 21, 2000 (unirrigated riceland, 84.9762 ha — P7,536,401.52), Apr. 19, 2001 (unirrigated riceland, 2.6155 ha — P231,964.46), July 12, 2001 (unirrigated riceland, 1.2883 ha — P114,257.24).
DARAB directives included: (1) adopt LBP valuations as set forth; (2) direct LBP to recompute additional compensation package for necessary improvements that redounded to farmer-beneficiaries; (3) direct LBP Land Valuation Office to effect immediate payment to petitioner after deducting any amount withdrawn, subject to rules.
DARAB reasoning: landowner failed to support its alleged valuation by clear and convincing evidence; presumption of regularity in LBP actions not overcome; petitioner failed to prove exemption from CARP; DAR cancelled prior Order of Deferment in 1998 allowing CARP coverage; field investigations classified lands as idle and used as rice in 1999; LBP guided by valuation factors in Section 17 of R.A. No. 6657.

DARAB Resolution on Motion for Reconsideration (September 13, 2012)

Petitioner’s Motion for Reconsideration (dated October 5, 2011) sought reconsideration of LBP-computed just compensation and asserted an actual value not lower than P160,604,800.00.
DARAB denied the Motion for Reconsideration in its September 13, 2012 Resolution, finding the determination of just compensation exhaustively discussed in the September 5, 2011 Decision.

Court of Appeals Proceedings and Ruling (April 24, 2015; Oct. 1, 2015 Resolution)

Petitioner filed Petition for Review under Rule 43 of the Rules of Court with the CA.
CA dismissed petition for lack of merit and affirmed DARAB decision and resolution (April 24, 2015 Decision; fallo: Petition for Review DISMISSED; DARAB decision and DARAB resolution AFFIRMED).
CA held petitioner resorted to wrong mode of appeal; correct remedy required filing petition for determination of just compensation with the Special Agrarian Court (SAC) under Sec. 6, Rule XIX of 2009 DARAB Rules (implementing Sec. 57, R.A. No. 6657); failure to follow procedure rendered DARAB decision final and executory.
Petitioner’s Motion for Reconsideration to CA denied on October 1, 2015.

Issues Presented to the Supreme Court

Whether the CA erred in failing to consider that petitioner’s CA petition sought redress for the DAR’s alleged erroneous disposition placing the subject properties under CARP (i.e., argued the action was to correct coverage rather than merely to determine just compensation).
Whether the CA erred in failing to consider that just compensation should be based on classification of the subject properties as prawn farms and fishponds (commercial farms) and not as agricultural land.

Petitioner’s Contentions in the Supreme Court (as presented in the record)

The appeal to CA was primarily to correct DAR’s alleged erroneous placement of the subject properties under CARP, not merely to determine just compensation.
Subject properties were previously used for salt production, fishponds, and prawn farming; such properties categorized as commercial farms eligible for ten-year deferment under R.A. No. 6657 and a Deferment Order was issued in favor of a predecessor effective 1988–1998.
R.A. No. 7881 expressly exempted fishponds and prawn farms from CARP coverage; petitioner alleged DAR cancelled the Deferment Order despite such exemptions and DARAB made no determination on the exemption issue.
Municipal zoning: petitioner relied on Sangguniang Bayan Resolution No. 5403 (1995) re-zoning subject properties as industrial.
Petitioner asserted LBP failed to consider value of improvements introduced by previous owners (e.g., roads, waterways, water reserve, facilities) and disregarded valuations by independent appraisers and assessors (claimed independent appraiser valuation P188,257,000.00; Municipal Assessor P169,806,325.00; BIR zonal valuations P220,500.00/ha for Bubog and P175,000.00/ha for San Agustin).

Respondents’ Contentions (LBP, DAR, DARAB)

LBP: issues raised by petitioner are a rehash of arguments previously presented and resolved by CA; due to petitioner’s resort to wrong remedy, DARAB decision and resolution became final and executory; issue of just compensation constitutes res judicata and bars judicial review; subject properties not exempt from CARP as petitioner did not appeal DAR Order to include properties in CARP; computation followed applicable laws.
DAR and DARAB: reiterated LBP’s arguments; maintained DARAB legally adopted LBP valuations and relied on ocular inspections a