LAND BANK OF THE PHILIPPINES v.

LEONILA CELADA HELD:

FACTS: The petition is GRANTED.

Celada owns an agricultural land, 60% of which was identified in 1998 by the
Department of Agrarian Reform (DAR) as suitable for compulsory acquisition under
the Comprehensive Agrarian Reform Program (CARP). Upon indorsement to it for
field investigation and valuation, Land Bank valued the said land at P299,569.61.
DAR offered the same amount to Celada as just compensation. Celada, however,
rejected the offer. The matter was then referred to the DAR Adjudication Board
(DARAB) for summary administrative hearing on the determination of just
compensation.
During the pendency of the DARAB case, Celada filed a petition for judicial
determination of just compensation, alleging that the current market value of her
land was at least P2,129,085.00. In its answer, Land Bank raised the affirmative
defense of non-exhaustion of administrative remedies. It contended that Celada
must first await the outcome of the DARAB case before taking any judicial recourse.
Meanwhile, the DARAB Provincial Adjudicator affirmed the valuation made by Land
Bank. Thereafter, the Special Agrarian Court (SAC), where Celada’s petition was
filed, rendered judgment fixing the value of the land at P354,847.50, finding that
Celada’s evidence showed that the neighboring lands of similar classification were
paid higher than what was quoted by Land Bank. It denied Land Bank’s affirmative
defense. The Court of Appeals dismissed Land Bank’s appeal.
Land Bank maintains that the SAC erred in assuming jurisdiction over Celada’s
petition for judicial determination of just compensation despite the pendency of
the administrative proceedings before the DARAB. It also contends that the SAC
erred in fixing the just compensation of the land based on the valuation of
neighboring lands instead of its actual land use.
SAC correctly assumed jurisdiction over determination of just compensation
The SAC did not err in assuming jurisdiction over the petition for determination of
just compensation despite the pendency of the administrative proceedings before
the DARAB. As the Court held in Land Bank of the Philippines v. Court of Appeals,
the RTC, sitting as a SAC, 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 DAR would vest in administrative
officials original jurisdiction in compensation cases and make the RTC an appellate
court for the review of administrative decision. Although the new rules speak of
directly appealing the decision of adjudicators to the RTCs sitting as SACs, the
original and exclusive jurisdiction to determine such cases is in the RTCs.
It should be emphasized that the taking of property under the CARP is an exercise
of the power of eminent domain by the State. The valuation of property or
determination of just compensation is a judicial function. Thus, the SAC properly
took cognizance of Celada’s petition for determination of just compensation.
SAC erred in fixing just compensation based on valuation of neighboring lands
The SAC, however, erred in setting aside Land Bank’s valuation of the land on the
sole basis of the higher valuation given for neighboring properties. It did not apply
the DAR valuation formula which considers capitalized net income, comparable
sales and market value per tax declaration as components of land value.

ISSUES:

1.) Whether or not the SAC erred in assuming jurisdiction over the petition for
judicial determination of just compensation pending administrative proceedings
before the DARAB;

2.) Whether or not the SAC erred in fixing the just compensation of the land based
on the valuation of neighboring lands