THIRD DIVISION
February 15, 2017
G.R. No. 186339
VIVENCIO, EUGENIO, JOJI AND MYRNA, ALL SURNAMED MATEO, Petitioners
vs.
DEPARTMENT OF AGRARIAN REFORM, LAND BANK OF THE PHILIPPINES AND MARIANO T. RODRIGUEZ, ET AL., Respondents
D E C I S I O N
REYES, J.:
For review1 is the Decision2 rendered on August 4, 2008 and Resolution3 issued on January 28, 2009 by the Court of Appeals (CA) in CA-G.R. CV No. 79581. The CA granted the appeal filed by the herein respondents, Department of Agrarian Reform (DAR), Land Bank of the Philippines (LBP)4 and Mariano T. Rodriguez, et al., seeking to reverse the Decision5 dated July 4, 2002 of the Regional Trial Court (RTC) of Sorsogon City, Sorsogon, Branch 52, sitting as Special Agrarian Court (SAC), in Civil Case No. 97-6331, a complaint for determination of just compensation filed by the herein petitioners, Vivencio Mateo (Vivencio), Eugenio Mateo, Joji Mateo Morales and Myrna Mateo Santos (collectively, the Mateos). The SAC ordered the LBP to pay the Mateos the amount of ₱71,143,623.00 as just compensation for 112.3112 hectares of coconut and rice lands (subject property) covered by Transfer Certificate of Title (TCT) No. T-22822, which was expropriated by the DAR for distribution to farmer-beneficiaries under the provisions of Republic Act (R.A.) No. 6657,6 otherwise known as the Comprehensive Agrarian Reform Program (CARP) Law of 1988.
Antecedents
The CA aptly summed up the facts of the case before the rendition of the SAC decision as follows:
[The Mateos] were the registered owners of [coconut and rice lands] with [a total area] of 1,323,112 square meters situated at Fabrica, Bacon, Sorsogon and [were] covered by TCT No. T-22822. A portion of the land[s] was brought under the coverage of the [CARP] of the government and for this reason[,] the [DAR] entered the premises sometime in June 1994. [LBP] valued [the Mateos'] land at fifty-two thousand pesos (₱52,000.00) per [ha]. [The Mateos,] however[,] rejected the LBP's valuation.
On April 30, 1997, [the Mateos] filed a complaint against LBP, [DAR], and the farmer beneficiaries of the land for just compensation. The case was docketed as Civil Case No. 97-6331 and raffled to the [SAC], presided by respondent Judge Honesto A. Villamor.7
The LBP and DAR filed their respective answers arguing that since no summary administrative proceedings to determine the amount of just compensation had been conducted yet, the complaint of the Mateos was premature.8
Pre-trial ensued and was terminated. The SAC granted the request of the parties for the appointment of two commissioners, namely, Mr. Jesus Empleo and Engr. Florencio Dino (Engr. Dino), to represent the LBP and the Mateos, respectively.9
Among the evidence offered by the Mateos during the trial were: (a) the testimonies of their father, Dr. Eleseo Mateo, Engr. Dino, farmer Manuel Docot and caretaker Danilo Federio; (b) TCT No. T-22822; (c) Memorandum of Valuation (MoV), Claim Folder Profile and Valuation Summary of Agricultural Land; (d) deeds of sale covering two parcels of land less than two ha in size in Sorsogon, which were purchased for ₱300,000.00 and ₱400,000.00 per ha; (e) newspaper clipping of Eduardo Cojuangco, who was selling his land in Sorsogon for ₱350,000.00 per ha; (f) Engr. Dino's Report; and (g) deed of sale of a lot in Cabi-an, Sorsogon bought by the government for ₱245,000.00 per ha.10
On the other hand, the DAR presented: (a) the testimonies of agriculturist Romeo Brotamante, government employee Ireneo Defeo and farmer Cresenciano Lagajeno; (b) a Field Investigation Report dated March 29, 1996; (c) ledger cards bearing dates from December 2, 1994 to June 9, 1997; and (d) two pass books, the second of which indicated withdrawals in the total amount of ₱601,789.97.11 The LBP, on its part, offered (a) the testimony of Monita Balde, and (b) a Claims Valuation and Processing Form.12
Ruling of the SAC
The decretal portion of the SAC Decision13 dated July 4, 2002 reads:
WHEREFORE, premises considered, judgment is hereby rendered:
1. Fixing the amount of SEVENTY-ONE MILLION, ONE HUNDRED FORTY-THREE THOUSAND, SIX HUNDRED TWENTY-THREE ([₱]71,143,623.00) Pesos, Philippine currency[,] to be the just compensation for the l12[.]3112 [has] of agricultural land situated at Fabrica, District of Bacon, City of Sorsogon covered by TCT No. T-22822 owned by the [Mateos] which property was taken by the government pursuant to the [CARP] of the government [as] provided by R.A. N[o]. 6657.
2. Ordering the [LBP] to pay the [Mateos] the amount of Seventy-One Million, one Hundred forty-three thousand[,] six hundred twenty-three (₱71,143,623.00) Pesos[,] Philippine currency[,] in the manner provided by R.A. No. 6657 by way of full payment of the said just compensation after deducting whatever amount [was] previously received by the [Mateos] from the [LBP] as part of the just compensation.
3. Without pronouncement as to cost.
SO ORDERED.14
In rendering its judgment, the SAC rationalized as follows:
Under R.A. No. 6657, it provides that in determining the just compensation, the initial determination thereof may be agreed upon by the [LBP], the official entity made responsible under Executive Order No. 405, series of 1990 to determine the valuation and compensation of agricultural landholdings made under the coverage of the CARP and the [l]andowner. In the event of disagreement, the matter is referred to the DAR Adjudication Board for further determination. If no agreement is reached, the landowner may elevate the matter for judicial determination.
Initially, the [DAR] Adjudicat[ion] Board x x x valued the prope1iy in question adopting the [LBP's] valuation in the amount of ₱6,l 12,598.86 for the 72.2268 [has] and the amount of ₱2,949,313.14 for the 36.3196 [ha] but these valuation was rejected by [the Mateos].
After due consideration of [Engr. Dino's] Repmi submitted to the Court[,] as well as the [Report of Empleo] and the Pass Book evidencing the Lease Rentals presented by the defendant DAR, as well as the testimon[ies] of [the Mateos] and their witnesses and also considering the applicable law, the Sanggunian Panlalawigan Resolution No. [0]3-99 providing for an updated schedule of fair market value of real properties in the Province of Sorsogon and the jurisprudence on the matter, the Comi hereby adopts the commissioner's report submitted by Engr. [Dino] as part of this decision. The Court also took into consideration the evidence submitted on comparable sales transaction of the nearby landholdings executed by Jose Maria Simo, Jr. in favor of the National Housing Authority selling the property at Two Million[,] Three Hundred Thirty-three Thousand[,] One Hundred Seventy Pesos (₱2,335,170.00) Philippine currency, for the 159,968 square meters land x x x.15 The repo1i of [Engr. Dino] x x x represents only the fair market value of the land but does not include the value of the coconut trees and the actual production of the coconut trees. Although it valued the improvements in the property for acquisition, it did not include the value of the trees/hectare and the actual production of the coconut trees as well as the potentials of the land in term[ s] of productivity and proximity to the center of commerce, the City of Sorsogon.
Commissioner's Report of [Engr.] Dino:
x x x x
ACCESSIBILITY AND LOCATION
The subject property is located in Barangay San Isidro, Sorsogon. It is barely one kilometer away from the Bacon Airport and the Sorsogon-Bacon Highway. It could be reached through the San Vicente-Buhatan Road - a dormant overland artery linking the district of Bacon to the City of Sorsogon.
PROPERTY APPRAISAL
Provincial Ordinance No. 03-99, also known as "An Ordinance Providing for an Updated Schedule of Fair Market Values of Real Properties in the Province of Sorsogon" was used as the basis for determining the unit values of lands and other improvements found in the subject real property. However, with respect to the appraisal of timber producing tree species, the approximate extractable lumber was multiplied by the prevailing market price per board foot.
[Engr. Dino made a detailed assessment computing the subject property's Fair Market Value to be ₱4,764,323.00, and the fruit-bearing and timber-producing trees found thereon amounting to ₱806,870.00 and ₱445, 110.00, respectively. Engr. Dino, thus, concluded that just compensation for the subject property should amount to ₱6,016,303.00.]
On the matter of the land valuation submitted by [Engr. Dino] for the [Mateos], the Court considers said land valuation too low considering that the land subject for acquisition is within the city limit of the City of Sorsogon and as shown by the evidence of the [Mateos], the land was a subject of a housing subdivision and can command a price of not less than ₱350,000.00 per [ha]. The area for acquisition is ideal not only for housing subdivision but as expansion for commercial district of the City of Sorsogon. It has all the potentials of a city within the city. It has abundant water supply and accessible to the center of commerce. The [Mateos] also submitted evidence of comparable sales transactions of the nearby landholdings executed by Jose Maria Simo, Jr. in favor of the National Housing Authority selling the property with an area of 159,968 sq. m. for the amount of ₱2,335, 170.00 x x x. As the property is within the city of Sorsogon, the selling price of land is ₱l,000.00 per square meter. The land subject of acquisition is an agricultural land but it cannot be denied that [in] the present time[,] the land commands [a] higher price especially that the exchange rate of peso to dollar is 1 dollar to 50 pesos. Evidence also show that the [parents of the Mateos] acquired the property for ₱l,000.00 per [ha] and it took them three (3) years to clear the property and after another three years, they planted coconuts which are now fruit bearing trees. x x x[.]
x x x x
[The SAC then adopted Engr. Dino's valuation of the improvements found in the subject property and made estimates of the total amount the coconuts, copra and rice harvested therefrom could have fetched from 1994-2002. The SAC also assessed the price of the subject property to be ₱500,000.00 per ha.]
RECAPITULATION:
₱54,000,000.00 - Fair Market Value of 108 hectares coconut land at ₱500,000.00 13,057,397.00 - Net produce of copra from 1994 to 2002 806,820.00 - Value of the improvements inside the 108.0000 hectares 445,110.00 - Value of the coconut trunk[s] ₱68,309,327.00 - Total value of the 108 [has] coconut land 1,750,000.00 -Fair Market Value of 3.7649 [has] of Riceland at ₱500,000.00 1,686,085.00 - Net Produce of the Riceland from year 1994 to 2002 ₱71,745,412.00 - Grand Total Value of the Coconut land and Riceland with an area of 112.3112 [has]
- 601,789.00
- less the amount previously received by [the Mateos] as lease rentals ₱71,143,623.00 - Total amount of Just Compensation16
Proceedings Before the CA
The LBP and the DAR both filed notices of appeal, but no brief was filed by the latter before the CA.17
On the LBP's part, it mainly argued that the complaint of the Mateos was premature as the DAR Adjudication Board (DARAB) had not yet made an administrative valuation of the subject property and that the SAC, in determining just compensation, failed to consider the guidelines provided for in Section 1718 of R.A. No. 6657.19
The Mateos sought the dismissal of the appeal. They claimed that had the DAR promptly sent them notices of acquisition and made preliminary valuation of the subject property, they would have complied with the administrative procedures and found no need to institute an action before the SAC. Further, while Section 5020 of R.A. No. 6657 grants the DAR the primary 'jurisdiction to adjudicate agrarian reform matters, Section 5721 of the same statute confers original and exclusive jurisdiction over the RTCs as SACs to take cognizance of petitions for determination of just compensation of landowners.22
On August 4, 2008, the CA rendered the herein assailed Decision23 setting aside the SAC's judgment and dismissing without prejudice the complaint of the Mateos. The CA explained that:
Since the DARAB is clothed with quasi-judicial authority to make a preliminary determination of just compensation of lands acquired under R.A. No. 6657, x x x and it appearing from the records and [the Mateos'] own admission that [the] said administrative agency had not yet taken cognizance of, and passed upon the issue of just compensation when [the Mateos] prematurely filed with the court a quo the complaint for determination of just compensation, thus failing to exhaust the prescribed administrative remedy and, in the process, preventing the DARAB from complying with [the] said administrative process which is mandatory, We resolve to grant the appeal.
Jurisprudence teems with pronouncements that before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have availed of all the means of administrative processes afforded him.x x x The premature invocation of [the] court's intervention is fatal to one's cause of action[.] x x x[.]
x x x x
Anent the issue on just compensation, Section 17 of [R.A.] No. 6657 provides the guideposts for its determination[.] x x x[.]
x x x x
As defined, just compensation is the full and fair equivalent of the property taken from its owner by the expropriator. While We agree with the trial court's submission that "the measure is not the taker's gain but the owner's loss'', and that the word "just" is used to intensify the meaning of the word "compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full and ample, We likewise subscribe to appellant LBP's contention that "just compensation", in contemplation of agrarian reform, is quite different from just compensation involving an ordinary exercise of the power of eminent domain. Thus, as correctly pointed out by LBP, just compensation must be viewed in the context of social justice enshrined in the fundamental law to make it easier for the disadvantaged to be able to obtain land.
Moreover, it is clear from the decision of the trial court that aside from the court a quo's lack of jurisdiction to take cognizance of the present case, its computation totally disregarded Section 17 of R.A. No. 6657, which, as earlier reproduced, prescribes the factors for determining just compensation of lands acquired thereunder.24 (Citations omitted)
In the Resolution25 dated January 28, 2009, the CA denied the motion for reconsideration26 filed by the Mateos.
Issues
Aggrieved, the Mateos are before this Court essentially raising the following issues:27
1. Whether or not the CA erred in negating the jurisdiction of the RTC, as a SAC, to determine in the first instance and in the absence of the conduct of prior administrative proceedings, questions of just compensation to be paid to landowners.
2. Whether or not the CA erroneously held that the SAC disregarded the provisions of Section 17 of R.A. No. 6657 in determining the amount of just compensation to be paid for the subject property.
In support of the instant petition, the Mateos, citing LBP v. Wycoco,28 reiterate that even without the DAR's final valuation of the agricultural land for expropriation, the RTC, as a SAC, can validly take cognizance of a case for determination of just compensation in accordance with Section 57 of R.A. No. 6657. Otherwise, if the DAR would vest in administrative officials' original jurisdiction in compensation cases, the jurisdiction conferred upon the RTC, as a SAC, by the said Section 57 is undermined.29
Additionally, the Mateos argue that the rule on exhaustion of administrative remedies admits of exceptions, one of which is when there are circumstances indicating the urgency of judicial intervention, like in the case at bar. The Mateos were prematurely deprived of the subject property in 1994, and as compensation therefor, a trust account was belatedly created for them in 1997 or three years after the illegal entry.30
The Mateos likewise assert that the SAC had conscientiously made a fair determination of the subject property's value on the basis of the factors enumerated in Section 17 of R.A. No. 6657. The SAC considered the following: (a) nature and actual use of the subject property; (b) current value of similar property; (c) annual income derived from the subject property at the time of taking by the DAR; (d) cost of acquisition of the land and sworn valuation by the Mateos, both in relation to currency inflations; (e) Provincial Schedule of Fair Market Value (FMV) of Real Property in the Province of Sorsogon; and (f) just compensation for the damages incurred by the Mateos as a consequence of the DAR and the LBP's concerted acts of taking the subject property without compliance with due process. It was, thus, error for the CA to haphazardly conclude, without substantiation, that the SAC disregarded the legal requisites in determining just compensation.31
In their comments,32 the DAR and the LBP seek the dismissal of the instant petition.
On its part, the DAR, citing Republic of the Philippines v. Express Telecommunication Co., Inc.,33 emphasizes that the premature invocation of the court's intervention is fatal to a cause of action.34 Further, the Market Data Approach used by the SAC in determining just compensation for the subject property is not in accord with Section 17 of R.A. No. 6657 and the formula fixed by law in arriving at such valuations.35
The LBP, on the other hand, quoting Hongkong & Shanghai Banking Corporation, Ltd. v. G.G. Sportswear Manufacturing Corporation,36 stresses that the doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system; hence, it cannot be disregarded.37 The LBP also assailed the valuation of just compensation made by the SAC, which erroneously considered factors not provided for in Section 17 of R.A. No. 6657, such as the subject property's potential use and comparative sales of adjacent non-agricultural lots.38 The LBP adds that in determining just compensation, the SAC instead fatally overlooked the mandatory formula prescribed in DAR Administrative Order (AO) No. 6, series of 1992.39
Ruling of the Court
The instant petition is partially meritorious.
On jurisdiction and the doctrine of
exhaustion of administrative
remedies
Section 50 of R.A. No. 6657, in part, provides that the DAR is vested with ''primary jurisdiction to determine and adjudicate agrarian reform matters" and "exclusive original jurisdiction over all matters involving the implementation of agrarian reform" except those falling under the jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources.
Section 57, on the other hand, confers "special" and "original and exclusive" jurisdiction to the SAC over all petitions of landowners for the determination of just compensation.
In Wycoco,40 the Court outlined the procedure involved in determining just compensation for agricultural landowners, viz.:
Under Section 1 of Executive Order No. 405, Series of 1990, the [LBP] is charged with the initial responsibility of determining the value of lands placed under land reform and the just compensation to be paid for their taking. Through a notice of voluntary offer to sell (VOS) submitted by the landowner, accompanied by the required documents, the DAR evaluates the application and determines the land's suitability for agriculture. The LBP likewise reviews the application and the supporting documents and determines the valuation of the land. Thereafter, the DAR issues the Notice of Land Valuation to the landowner. In both voluntary and compulsory acquisition, where the landowner rejects the offer, the DAR opens an account in the name of the landowner and conducts a summary administrative proceeding. If the landowner disagrees with the valuation, the matter may be brought to the [RTC] acting as a [SAC]. This in essence is the procedure for the determination of just compensation.41 (Citations omitted)
Anent the application of Sections 50 and 57 of R.A. No. 6657, in relation to the proper procedure which must be followed in cases involving determination of just compensation for landowners, Ramon Alfonso v. LBP and DAR42 is emphatic that:
In San Miguel Properties, Inc. v. Perez, we explained the reasons why Congress, in its judgment, may choose to grant primary jurisdiction over matters within the erstwhile jurisdiction of the courts, to an agency:
The doctrine of primary jurisdiction bas been increasingly called into play on matters demanding the special competence of administrative agencies even if such matters are at the same time within the jurisdiction of the courts. A case that requires for its determination the expertise, specialized skills, and knowledge of some administrative board or commission because it involves technical matters or intricate questions of fact, relief must first be obtained in an appropriate administrative proceeding before a remedy will be supplied by the courts although the matter comes within the jurisdiction of the courts. The application of the doctrine does not call for the dismissal of the case in the court but only for its suspension until after the matters within the competence of the administrative body are threshed out and determined.
x x x x
Rule 43 of the Revised Rules of Court, which provides for a uniform procedure for appeals from a long list of quasi-judicial agencies to the [CA], is a loud testament to the power of Congress to vest myriad agencies with the preliminary jurisdiction to resolve controversies within their particular areas of expertise and experience.
In fact, our landmark ruling in Association has already validated the grant by Congress to the DAR of the primary jurisdiction to determine just compensation. There, it was held that RA 6657 does not suffer from the vice of the decree voided in EPZA, where the valuation scheme was voided by the Court for being an "impermissible encroachment on judicial prerogatives." x x x[.]
x x x x
Unlike EPZA, and in answer to the question raised in one of the dissents, the scheme provided by Congress under RA 6657 does not take discretion away from the courts in determining just compensation in agrarian cases. Far from it. In fact, the DAR valuation formula is set up in such away that its application is dependent on the existence of a ce1iain set of facts, the ascertainment of which falls within the discretion of the court.
x x x x
x x x Congress thus clearly conceded that courts have the power to look into the "justness" of the use of a formula to determine just compensation, and the "justness" of the factors and their weights chosen to flow into it.
In fact, the regulatory scheme provided by Congress in fact sets the stage for a heightened judicial review of the DAR's preliminary determination of just compensation pursuant to Section 17 of RA 6657. In case of a proper challenge, SACs are actually empowered to conduct a de novo review of the DAR's decision. Under RA 6657, a full trial is held where SA Cs are authorized to (1) appoint one or more commissioners, (2) receive, hear, and retake the testimony and evidence of the parties, and (3) make findings of fact anew. In other words, in exercising its exclusive and original jurisdiction to determine just compensation under RA 6657, the SAC is possessed with exactly the same powers and prerogatives of [the RTC] under Rule 67 of the Revised Rules of Court.
In such manner, the SAC thus conducts a more exacting type of review, compared to the procedure provided either under Rule 43 of the Revised Rules of. Court, which governs appeals from decisions of administrative agencies to the [CA], or under Book VII, Chapter 4, Section 25 of the Administrative Code of 1987, which provides for a default administrative review process. In both cases, the reviewing court decides based on the record, and the agency's findings of fact are held to be binding when supported by substantial evidence. The SAC, in contrast, retries the whole case, receives new evidence, and holds a full evidentiary hearing.
x x x x
Justice Velasco correctly pointed out this Court's statement in Belista excepting petitions for determination of just compensation from the list of cases falling within the DAR's original and exclusive jurisdiction. Justice Velasco is also correct when he stated that the Court, in Heirs of Vidad, summarized and affirmed rulings which "invariably upheld the [SAC's] original and exclusive jurisdiction x x x notwithstanding the seeming failure to exhaust administrative remedies before the DAR." Later on, he would point out, again correctly, the seemingly conflicting rulings issued by this Court regarding the imposition upon the courts of a formula to determine just compensation.
x x x x
Justice Velasco reads both Belista and Heirs of Vidad as bases to show that SACs possess original and exclusive jurisdiction to determine just compensation, regardless of prior exercise by the DAR of its primary jurisdiction.
We do not disagree with the rulings in Belista and Heirs of Vidad, both of which acknowledge the grant of primary jurisdiction to the DAR, subject to judicial review. We are, however, of the view that the better rule would be to read these seemingly conflicting cases without having to disturb established doctrine.
Belista, for example, should be read in conjunction with Association, the landmark case directly resolving the constitutionality of RA 6657. In Association, this Court unanimously upheld the grant of jurisdiction accorded to the DAR under Section 1643 to preliminarily determine just compensation. This grant of primary jurisdiction is specific, compared to the general grant of quasi-judicial power to the DAR under Section 50. Belista, which speaks of exceptions to the general grant of quasi-judicial power under Section 50, cannot be read to extend to the specific grant of primary jurisdiction under Section 16.
x x x x
Considering the validity of the grant of primary jurisdiction, our ruling in Heirs of Vidad should also be reconciled with the rationale behind the doctrine of primary jurisdiction. In this sense, neither landowner nor agency can disregard the administrative process provided under the law without offending the already established doctrine of primary jurisdiction:
x x x x
Section 18, on the other hand, merely recognizes the possibility that the landowner will disagree with the DAR/LBP's offer. In such case, and where the landowner elevates the issue to the court, the court needs to rule on the offer of the DAR and the LBP. Since the government's offer is required by law to be founded on Section 1 7, the court, in exercising judicial review, will necessarily rule on the DAR determination based on the factors enumerated in Section 17.
Now, whether the court accepts the determination of the DAR will depend on its exercise of discretion. This is the essence of judicial review. That the court can reverse, affirm or modify the DAR/LBP's determination cannot, however, be used to argue that Section 18 excuses observance from Section 17 in cases of disagreement.44 (Citations omitted, emphasis ours and italics in the original)
Alfonso45 is unequivocal that administrative remedies cannot be dispensed with and direct resort to the SAC is proscribed. However, the foregoing rule cannot be applied in the case at bar for reasons discussed below.
While the Court recognizes the primacy of the doctrine of exhaustion of administrative remedies in our judicial system, it bears emphasizing that the principle admits of exceptions, among which is when there is unreasonable delay or official inaction that irretrievably prejudices a complainant.46 This exception is attendant herein where the LBP and the DAR entered the property of the Mateos sometime in 1994,47 but deposited cash and Agrarian Reform Bonds as payment therefor only on December 13, 1996 and February 11, 1997.48 The LBP and the DAR were indisputably aware that the Mateos rejected the price offered as just compensation for the subject property. Still, at the time the Mateos filed their suit before the SAC, no summary administrative proceeding was yet initiated by the DAR to make further valuation. The SAC even had to issue no less than three orders dated November 12, 1997, January 7, 1998 and March 18, 1998 for the DAR to conduct the necessary proceedings.49 DAR's delay and inaction had unjustly prejudiced the Mateos and precluding them from filing a complaint before the SAC shall result in an injustice, which the law never intends.
It bears stressing as well that on December 21, 2000 and March 22, 2001, while trial before the SAC was underway, the DARAB rendered decisions in the summary administrative proceedings upholding the valuations previously made by the LBP and rejected by the Mateos.50 At that point, referring the case back :to the DAR would have been completely moot as any challenge raised against the valuation shall be cognizable by the SAC. Clearly, there were no more administrative remedies to exhaust.
Prescinding from the above, the CA erred in ordering the dismissal of the Mateos' complaint before the SAC. The doctrine of exhaustion of administrative remedies finds no application in the instant case where the DAR took no initiative and inordinately delayed the conduct of summary administrative proceedings, and where during the pendency of the case before the SAC, the DARAB rendered decisions affirming the LBP's prior valuations of the subject property.
On non-compliance with Section 17
of R.A. No. 6657 and DAR AOs,
and the consequent remand of the
case to the SAC
In Alfonso,51 the Court summed up the guidelines in just compensation cases, viz. :
in determining just compensation, courts are obligated to apply both the compensation valuation factors enumerated by the Congress under Section 17 of RA 6657 and the basic formula laid down by the DAR.x x x[.]First,
x x x x
Second, the formula, being an administrative regulation issued by the DAR pursuant to its rule-making and subordinate legislation power under RA 6657, has the force and effect of law. Unless declared invalid in a case where its validity is directly put in issue, courts must consider their use and application.x x x[.]
x x x x
Third, courts, in the exercise of their judicial discretion, may relax the application of the formula to fit the peculiar circumstances of a case.1avvphi1 They must, however, clearly explain the reason for any deviation; otherwise, they will be considered in grave abuse of discretion.x x x[.]
x x x x
When acting within the parameters set by the law itself, the RTC-SACs, however, are not strictly bound to apply the DAR formula to its minute detail, particularly when faced with situations that do not warrant the formula's strict application; they may, in the exercise of their discretion, relax the formula's application to fit the factual situations before them. They must, however, clearly explain the reason for any deviation from the factors and formula that the law and the rules have provided.
The situation where a deviation is made in the exercise of judicial discretion should at all times be distinguished from a situation where there is utter and blatant disregard of the factors spelled out by law and by the implementing rules. For in [the latter case], the RTC-SAC's action already amounts to grave abuse of discretion for having been taken outside of the contemplation of the law.52 (Citations and emphasis omitted)