TOPIC CARL; Determination of Just Compensation can be pursued at the same time before

the DARAB and the courts

CASE NO. G.R. No. 177511
CASE NAME LBP v Fortune Savings
MEMBER MY ☺

DOCTRINE
Relevant guide question: Can you pursue just compensation before the DARAB and the courts at the same time? —>
YES. The CARL vests in the RTCs as Special Agrarian Courts original and exclusive jurisdiction over all
petitions for the determination of just compensation.
o RTCs do not exercise mere appellate jurisdiction over just compensation disputes.
o RTC's jurisdiction is not any less "original and exclusive" just because the question is first passed
upon by the DAR.
o Proceedings before the RTC are not a continuation of the administrative determination.
o Indeed, although the law may provide that the decision of the DAR is final and unappealable,
still a resort to the courts cannot be foreclosed on the theory that courts are the guarantors of
the legality of administrative action.
o The taking of property under the CARL is a government exercise of the power of eminent domain.
Since the determination of just compensation in eminent domain proceedings is a judicial function, it
cannot be made to depend on the existence of administrative proceedings of a similar nature.
o Thus, even while the DARAB summary administrative hearing for determination of just
compensation is pending, the interested party may file a petition for judicial determination (with
the RTC (as a special agrarian court) of the same.

RECIT-READY DIGEST (this seems long but summarized it this way for easier comprehension! Ito na yung whole
case tbh haha)

Fortune Savings owned agricultural land, a 4,230-square meter land with coconut-bearing trees and jackfruit trees. It
foreclosed the REM such land for P80k when the debtors failed to pay its P70k loan.
- It offered to sell to LBP under CARL. However, LBP fixed the valuation at P6k (which Fortune Savings
claim as unreasonable claiming this is just the price of a 14-inch TV set HAHAHA)
- It thus filed a case to challenge this valuation and for determination of just compensation. It had two actions
1) administrative (DARAB) 2) judicial (RTC)
Case before the DARAB (first case) – decided in favor of Fortune Savings (P93k)
- DARAB ruled in favor of Fortune Savings, finding the LBP valuation unreasonable, thus fixing the value at
P93k
- LBP had until April 1 to file challenge the DARAB case with the RTC, but since it fell on a Maundy Thursday,
it filed on the Monday following that week.
- RTC, however, dismissed LBP’s action challenging the DARAB decision without prejudice for its failure
to cause service of summons
Case before the RTC (second case) – decided in favor of LBP (P6k)
- 4 months after the dimissal, LBP filed anew a petition or the determination of just compensation with
RTC
- Fortune Savings’ was declared by RTC as in default for failure to file a responsive pleading RTC
rendered a decision upholding LBP’s valuation of the property at P6,796.00 based on a technical formula
by the DAR.

Fortune Savings appealed to CA arguing that the DARAB decision had already become final and executory and
that the LBP’s valuation of P6k adopted by the RTC was erroneous. CA rendered judgment, reinstating the
DARAB decision and its P93k valuation, on the groun that LBP incurred delay its petition late, thus the DARAB
decision became final and executory on April 1, 1999.

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Issues & summarized held:
• W/N the CA erred in holding that, for LBP’s delay in challenging the DARAB decision (first case) under the
DARAB rules, the DARAB determination became final and executory—YES, CA erred
• W/N the CA erred in adopting the valuation filed by DARAB (in the first case) for the property at P93,060.00
instead of the P6,796.00 established by the LBP—NO, valuation was proper
CA correctly fixed the compensation at P93k based on DARAB’s expert valuation which was found to by the SC to be
the reasonable one; however, by reinstating the Decision of the DARAB on the basis that LBP, on that stage, failed to
timely challenge such Decision, CA failed to recognize that even if LBP filed the case on time, the fact remains that
the RTC dismissed it for LBP’s failure to serve summons, and Fortune Savings' filing of the second case cannot
operate as a continuance of the first case dismissed, because it was an entirely different case altogether. CA’s
valuation was properly based on DARAB’s valuation, but it erred in reinstating that DARAB decision itself
which LBP ultimately failed to challenge in the first place. The second case for determination is a separate
proceeding. (See Doctrine)

FACTS
Case before the DARB (first case)
• Fortune Savings owned agricultural land (4,230-square meter land with 43 coconut-bearing trees and 6
jackfruit trees), which it acquired for P80,000 after foreclosing a REM constituted on the land by the
borrowers who defaulted on a P71,500 loan
o Fortune Savings offered to sell the property to DAR for inclusion in the CARP
o However, Land Bank (LBP), the financial intermediary for the CARP, fixed the land's value
at only P6,796.00.
o Fortune Savings rejected this amount, so it filed a summary administrative proceeding for
the determination of just compensation with the DARAB
• DARAB found LBP’s valuation unreasonable, so it rendered judgment (on March 3, 1999) fixing it
at P93,060
o Since the LBP received a copy of the decision on March 17, it had 15 days from that date or until
April 1 within which to file an action with the appropriate RTC for judicial determination of just
compensation.
o However, since April 1 was Maundy Thursday (public holiday), LBP was able to file a petition
for the determination of just compensation before the RTC -Lipa on Monday, April
o However, RTC dismissed the case without prejudice on the ground of LBP’s failure to cause
service of on December 14 (not the delay in filing)

Case before the RTC (second case)

[New case; with RTC na and not DARAB]
• 4 months after the dimissal, LBP filed another petition or the determination of just compensation
o For Fortune Savings’ failure to file a responsive pleading, the RTC declared it in default.
o LBP presented its evidence ex parte and on May 30, 2004 the RTC rendered a decision
upholding LBP’s valuation of the property at P6,796.00 based on a technical formula adopted
by the DAR.
• Fortune Savings appealed to the CA arguing that the DARAB decision had already become final
and executory and that the LBP’s valuation of P6,796.00, adopted by the RTC was erroneous.
o On August 29, 2006, the CA rendered judgment, reinstating the March 3, 1999 DARAB
decision and its P93,060.00 valuation.
o The CA ruled that LBP incurred delay in filing only on April 5, 1999 its petition for the
determination of just compensation and that, consequently, the DARAB decision became
final and executory on April 1, 1999.
o After the CA denied LBP’s MR, it filed now with SC a petition for review on certiorari.

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ISSUE/S and HELD
1. W/N the CA erred in holding that, for LBP’s failure to file its original judicial action within 15-day period set
under Rule XIII, Section 11 of the DARAB Rules, the DARAB determination of just compensation became
final and executory—YES, CA erred
2. W/N the CA erred in adopting the valuation filed by DARAB (in the first case) for the property at P93,060.00
instead of the P6,796.00 established by the LBP—NO, valuation was proper

RATIO
1. W/N the CA erred in holding that, for LBP’s failure to file its original judicial action within 15-day period set
under Rule XIII, Section 11 of the DARAB Rules, the DARAB determination of just compensation became
final and executory—YES, CA erred
• LBP points out that, in ruling that the bank filed the first case (before DARAB) out of time, the CA
disregarded the fact that April 1 the last day for it to file the petition, was a holiday.
• Fortune Savings, on the other hand, claims in its Comment that, even if LBP filed the case on time,
the fact remains that the RTC dismissed it for LBP’s failure to serve summons. Fortune Savings'
filing of the second case cannot operate as a continuance of the first case dismissed, because it
was an entirely different case altogether (Fortune Savings is correct).

SC:
• Although the DAR is vested with primary jurisdiction under the CARL to determine in a preliminary
manner the reasonable compensation for lands taken under the CARP, such determination is subject to
challenge in the courts.
• The CARL vests in the RTCs, as Special Agrarian Courts, original and exclusive jurisdiction over
all petitions for the determination of just compensation.
o RTCs do not exercise mere appellate jurisdiction over just compensation disputes.
o RTC's jurisdiction is not any less "original and exclusive" because the question is first passed
upon by the DAR.
o Proceedings before the RTC are not a continuation of the administrative determination.
o Indeed, although the law may provide that the decision of the DAR is final and unappealable,
still a resort to the courts cannot be foreclosed on the theory that courts are the guarantors
of the legality of administrative action.
o The taking of property under the CARL is a government exercise of the power of eminent domain.
Since the determination of just compensation in eminent domain proceedings is a judicial
function, such determination cannot be made to depend on the existence of administrative
proceedings of a similar nature.
o Thus, even while the DARAB summary administrative hearing for determination of just
compensation is pending, the interested party may file a petition for judicial determination (with
the RTC (as a special agrarian court) of the same.
• In another case, SC allowed the filing with the RTC of a petition to fix just compensation despite failure
of the landowner to seek reconsideration of the DAR's valuation.
o Consequently, LBP’s filing of the second case (before the RTC) after the dismissal without
prejudice of the first case (before DARAB) cannot be regarded as barred by the filing of the
first case beyond the 15-day period prescribed under Rule XIII, Section 11 of the DARAB
Rules.
o The procedural soundness of the second case (before the RTC) could not be made dependent
on the DARAB case (first case), for these two proceedings are separate and independent.

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2. W/N the CA erred in adopting the valuation filed by DARAB (in the first case) for the property at P93,060.00
instead of the P6,796.00 established by the LBP—NO, valuation was proper
• In the matter of the amount of just compensation to which Fortune Savings is entitled, the Court notes
that the latter forfeited by default its right to present evidence of just compensation before the RTC.
o Thus, RTC simply accepted the computation and supporting documents that LBP adduced at the
trial, which computation was at P6,796.00 based on the formula provided by Section 17 of the
CARL.
• However, although the formula found in Section 17 of the CARL may be justly adopted in certain cases,
it is by no means the only formula that the court may adopt in determining just compensation. The Court
finds too iniquitous the amount of P6,796.00 for the land.
o As Fortune Savings pointed out, P6,796.00 is just the price of a 14-inch television set
(hahahaha), yet what is at stake in this case is a 4,230-square meter land with 43 coconut-
bearing trees and 6 jackfruit trees, certainly with potential for greater productivity than a
television set.
o That Fortune Savings was willing to pay P80,000.00 for the property is proof that the
property was valued far more than the P6,796.00 fixed by the RTC.
o The CA adopted the DARAB valuation of P93,060.00 for the subject land for a technical reason.
o But, since DARAB fixed the amount based on its expertise and since that amount is not quite
far from the price for which Fortune Savings bought the same at a public auction, the Court
is inclined to accept such valuation.

DISPOSITION
Considering the relatively small amount involved, this would be a far better alternative than remanding the case
and incurring further delay in its resolution.

WHEREFORE, the Court PARTIALLY GRANTS the petition. The decision and resolution of the CA are
REVERSED and SET ASIDE, except that the valuation of the subject property at P93,060.00 as originally
contained in the March 3, 1999 decision of the DARAB, and which was adopted by the CA, is AFFIRMED.

For the reasons stated above, LBP is directed to pay the respondent Fortune Savings and Loan Association, Inc.
the sum of P93,060.00 as just compensation for the taking of its land with legal interest from the time of the
finality of this decision until it is paid in full.