Department Of Agrarian Reform v. Galle

DEL CASTILLO, J.:

It has been the consistent pronouncement of this Court that the determination of just compensation is basically a judicial function. Also, it is settled that in the computation of just compensation for land taken for agrarian reform, both Section 17 of Republic Act No. 6657 (RA 6657 or the Comprehensive Agrarian Reform Law of 1988/CARL) and the formula prescribed in the applicable Administrative Order of the Department of Agrarian Reform (DAR) should be considered. Before this Court are consolidated Petitions for Review on Certiorari1 assailing the following dispositionsof the Court of Appeals (CA): 1.

Its September 23, 2004 Decision2 and February 22, 2006 Resolution3 in CA-G.R. SP No. 80678, entitled "Department of Agrarian Reform, as represented by Secretary Roberto M. Pagdanganan, Petitioner, versus Hon. Reinerio (Abraham) B. Ramas, Presiding Judge, Regional Trial Court, Br. 18, Pagadian City and Susie Irene Galle, Respondents"; 2. Its July 27, 2010 Consolidated Decision4 and January 19, 2011 Resolution5 in CA-G.R. SP Nos. 00761-MIN and 00778-MIN, entitled "Land Bank of the Philippines, Petitioner, versus Susie Irene Galle, substituted by her heirs, namely: HansPeter, Carl Otto, Fritz Walter, and George Alan, all surnamed Rieth, Respondents"

and "Department of Agrarian Reform, represented by OIC-Secretary Nasser C. Pangandaman, Petitioner, versus Susie Irene Galle, substituted by her heirs, namely: HansPeter, Carl Otto, Fritz Walter, and George Alan, all surnamed Rieth, Respondents", respectively. Factual Antecedents Respondent Susie Irene Galle (Galle) owned two contiguous parcels of land known as the Patalon Coconut Estate (the estate) in Patalon, Zamboanga City, with a total area of 410.2271 hectares (or 4,102,271 square meters) and covered by two titles issued in her name - Transfer Certificatesof Title Nos. T-62,7366 (TCT T-62,736) and T-62,7377 (TCT T-62,737). The estate is a fully developed and income-producing farm, thus: TCT T-62,736 TCT T-62,737 Land Use Area [Has.] Land Use Area [Has.] [Coconut Plantation] 178.713 [Coconut Plantation] 168.1127 [has.] [Coconut with Coffee Trees] 5.0 [Coconut with Coffee Trees] 3.5 Quarry 5.0 Corn 1.5 Barangay Road 1.4 Forest [Land] 15.0 Forest [Land] 15.0 National Road 2.08 The estate contained between 35,810 to 38,666 coconut trees,9 producing copra.

Likewise, cattle, carabao and horses were raised therein.10 In August 1992, petitioner Land Bank of the Philippines (LBP) valued 356.2257 hectares of the estateat ₱6,083,545.26, which valuation was rejected by Galle. The rejected amount was supposedly deposited in the name of Galle, in the form of cash and bonds. On November 17, 1993, the Zamboanga City Registry of Deeds cancelled Galle's titles and transferred the entire estate to the State; TCT Nos. T-110,927 and T-110,928 were issued in the name of the "Republic of the Philippines - Department of Agrarian Reform."

On November 25, 1994, TCT Nos. T-110,927 and T-110,928 were cancelled and new titles - TCT Nos. T-111,098 and T-111,099 - were issued in the name of "Patalon Estate Agrarian Reform Beneficiaries Association" (PEARA). Yet again, on May 13, 1994,the above two PEARA titles were cancelled, and new titles were issued, as follows: 1.

TCT No. T-113,496 for 15.0025 hectares in Galle's name;11 2. TCT No. T-113,499 for 37.1209 hectares in Galle's name;12 3. TCT No. T-113,497 for 47.1739 hectares in the name of PEARA;13 and 4.

TCT No.

T-113,498 for 307.5369 hectares in the name of PEARA.14 The above four titles covered 406.8342 hectares of the estate's total area of 410.2271 hectares, thus leaving 3.3929 hectares thereof unregistered. Thus, it appears that as to Galle, a total of 358.1037 hectares, or 3,581,037 square meters - which is the sum total of the areas covered by TCT Nos. T-113,497 and T-113,498, and the 3.3929 hectaresunaccounted for but not re-titled or returned to Galle - were taken from her by the government without just compensation. Meanwhile, the Department of Agrarian Reform Adjudication Board (DARAB) conducted summary administrativeproceedings for the acquisition of the estate, docketed as DARAB CaseNo.

JC-RIX-ZAMBO-0011-CO. On October 15, 1996, a Decision15 was rendered in said case, the dispositive portion of which reads: WHEREFORE, premises considered, order is hereby issued directing the Land Bank of the Philippines to determine and include the value of the 1.4 hectares barangay road in the total valuation. It is likewise directed to pay the landowner, Susie Irene Galle, the amount of TEN MILLION SEVEN HUNDRED SIXTY SEVEN THOUSAND FOUR HUNDRED SIXTY NINE PESOS AND 00/100 (₱10,627,148.00) [sic] upon completion of the essential requirements.

SO ORDERED.16 Galle was notified of the above Decision on October 28, 1996. LBP filed a motion for reconsideration, which remains unresolved to this day.17 Civil Case No. 4574 Galle instituted onNovember 12, 1996 - or within 15 days from receipt of the Decision in DARAB Case No. JC-RIX-ZAMBO-0011-CO- a case for "Cancellation of Transfer Certificates of Title and Reconveyance, Determination and Payment of Just Compensation, and Damages" with the Regional Trial Court (RTC) of Zamboanga City.

Docketed asCivil Case No. 4574 and assigned to RTC Branch 12, the Complaint18 - entitled "Susie Irene Galle, Plaintiff, versus Ernesto Garilao, et al., Defendants" - prayed, amongothers, that: The Honorable Court issue an Order: 1. Directing defendant Susana B. Muin, Register of Deeds of Zamboanga City, to cancel all certificates of title issued subsequent to TCT Nos. T-62,736 and T-62,737, thereby rendering all subsequent certificates of title without force and effect, and restoring in the name of plaintiff TCT Nos. T-62,736 and T-62,737; and 2.

Directing the Department of Agrarian Reform and all the defendants to jointly and severally pay plaintiff the income she lost from the time the said TCTs were cancelled on November 17, 1993 up to the time thatthe TCTs will be restored in her name, with interest at the rate of 12% per annum, to pay lawyer's fees and to pay the cost of the suit. In the alternative, it is respectfullyprayed that the Honorable Court render judgment: 1. Declaring just compensation for plaintiff's expropriated landholdings at an amount not less than ₱345,311,112.00 and directing Land Bank of the Philippines to pay plaintiff the said amount.

2. Requiring Land Bank of the Philippines to pay plaintiff the value of the infrastructures and waterworks system installed on plaintiff's landholdings. 3.

Requiring the Department of Agrarian Reform and Land Bank of the Philippines and all other defendants to jointly and severally pay damages to plaintiff in the form of 12% interest [per annum] starting January 21, 1991 up to the time the final award of compensation is paid to plaintiff, the interest to be computed based on the final award of compensation to plaintiff, and directing Land Bank of the Philippines to pay the amount to plaintiff. 4. Requiring the Department of Agrarian Reform and Land Bank of the Philippines and all other defendants to jointly and severally pay damages to plaintiff by way of attorney's fees in the amount of 15% of the final award of compensation to plaintiff, and directing Land Bank of the Philippines to pay the amount to plaintiff.

5.

Requiring the Department of Agrarian Reform and Land Bank of the Philippines and all other defendants to jointly and severally pay damages to plaintiff for all the expenses incurred to bring the instant suit before the Honorable Court, which should not be less than ₱400,000.00, and to pay the cost ofthe suit, and directing Land Bank of the Philippines to pay the the [sic] amounts to plaintiff. 6. To pay the cost of the suit.19 Galle likewise filed DARAB CaseNo.

IX-ZC-766-96-(R) seeking annulment of the titles which were issued subsequent to her original titles, or TCT T-62,736 and TCT T-62,737. However, the case was later dismissed in a January 10, 1997 Decision issued by the DARAB. The DAR moved to dismiss Civil Case No. 4574, claiming that the RTC had no jurisdiction over the case.

The RTC denied the motion, as well as DAR's ensuing motion for reconsideration. DAR thus filed a Petition for Certiorariwith the CA, docketed as CA-G.R. SP No. 47618. On August 21, 2001,the CA issued a Decision20 granting the Petition, thus: WHEREFORE, the foregoing premises considered, the petition for certiorari is GRANTED.

The Orders of the public respondent dated June 23, 1997 and September 18, 1997, and all the proceedings had thereafter including the Decision dated March 22, 1999 and the Order dated May 19, 2000 are hereby ANNULLED and SET ASIDE. No pronouncement as to costs. SO ORDERED.21 The CA held that the RTC in Civil Case No. 4574 had no power to review decisions of the DARAB, and it had no jurisdiction over the case for cancellation of titles since it was not the designated Special Agrarian Court (SAC).

Galle then came to this Court by Petition for Review on Certiorari, docketed as G.R. No. 152480. In a June 3, 2002 Resolution,22 however, the Petition was denied for failure to show that the CA committed reversible error. Civil Case No. 4436-2K3 On January 14, 2003, Galle filed a case for "Determination and Payment of Just Compensation with Damages"

against the Secretary of the DAR, LBP, and PEARA, which was docketed as Civil Case No. 4436-2K3 and assigned to Branch 18 of the RTC of Pagadian City, the designated SAC. The Complaint23 essentially alleged that the estate was a fully developed and income-generating farm which was situated near the Zamboanga City Special Economic ZoneAuthority and the Ayala de Zamboanga Industrial Estate; that the estate was a rich source of sand and gravel, and more than 62 hectares thereof was coastal land; that at the time of taking by the State, the fair market value thereof was no less than ₱100.00 per square meter, or ₱1 million per hectare; and that DAR and LBP offered compensation equivalent to only ₱1.70 per square meter. Galle prayed that just compensation be fixed in the amount of notless than ₱1 million per hectare or a total of ₱350,569,636.10; that she be granted compounded interest on the just compensation due her,computed from the time her land was taken until she is paid; that she be awarded 15%attorney's fees, "actual expenses", and costs of suit.

The DAR filed a Motion to Dismiss,24 which LBP adopted. Citing prescription and forum-shopping, the DAR argued that Galle was given only 15 days from notice of the October 15, 1996 DARAB Decision in DARAB Case No. JC-RIX-ZAMBO-0011-CO - pursuant to Rule XIII, Section 11 of the 1994 DARAB Rules of Procedure25 - within which to file a just compensation case with the SAC; her filing of Civil CaseNo. 4436-2K3 on January 14, 2003, or six years later, is tardy, and the October 15, 1996 Decision of the DARAB therefore became final and executory.

It argued further that Galle was guilty of forumshopping for filing Civil Case No. 4436-2K3 after obtaining anadverse Decision in Civil Case No. 4574, which likewise involved a prayer - albeit in the alternative - for the fixing of just compensation for her estate. Galle filed an Opposition26 to the Motion to Dismiss, arguing among others that the October 15, 1996 DARAB Decision in DARAB Case No.

JC-RIXZAMBO-0011-CO did not become final and executory as there is still a pending and unresolved Motion for Reconsideration27 filed by LBP; thatthe courts have the power to review the Decision of the DAR, which is merely preliminary and not final; that a landowner may file a case directly with the SAC without awaiting the DAR's preliminary determination on justcompensation;28 that the original and exclusive jurisdiction over cases for the determination of just compensation lies with the SAC - the DAR cannot be granted jurisdiction over cases of eminent domain, as the valuation of property in eminent domain cases is essentially a judicial function which cannot be vested in administrative agencies;29 that she was deprived of her property without just and timely compensation,and her estate was placed in the name of an agrarian reform beneficiaries association that did not exist in fact and in law; and that no forum-shopping was committed with the filing of Civil Case No. 4574 precisely since the trial court in said case had no jurisdiction to cancel the titles issued or to fix just compensation as it was not the designated SAC that possessed the power to do so.

To this Opposition, LBP filed a Reply.30 In a June 20, 2003 Order,31 the SAC denied the Motion to Dismiss. DAR and LBP moved to reconsider, butin a September 12, 2003 Order,32 the SAC stood its ground. LBP thereafter filed its Answer with Counterclaim.33 CA-G.R. SP No. 80678 Instead of submitting an Answer, DAR filed a Petition for Certiorariand Prohibition with the CA - docketed as CA-G.R. SP No. 80678 - assailing the SAC's June 20, 2003 and September 12, 2003 Orders, on the claim that they were issued with grave abuse of discretion since Galle was already bound by the final and executory October 15, 1996 Decision of the DARAB in DARAB Case No. JC-RIX-ZAMBO-0011-CO and thus could no longer file Civil Case No. 4436-2K3 to fix anew the just compensation for her estate.

On September 23, 2004, the CA issuedthe herein assailed Decision and February 22, 2006 Resolution respectively dismissing the Petition and denying reconsideration thereof. The appellate court stated that DAR's Petition was defective as it failed to state the date ofreceipt of the SAC's assailed June 20, 2003 Order, and that the SAC's Orders may not be elevated to the higher courts until the hearing in Civil Case No. 4436-2K3 has been terminated and the case decided on the merits, pursuant to Section 59 of RA 6657 or the Comprehensive Agrarian Reform Law of 1988 (CARL).34 Thus, the DAR filed the instant Petition, docketedas G.R. No. 171836. Meanwhile, back in Civil Case No. 4436-2K3, the SAC conducted pretrial, where the parties jointly moved for the creation of a commission of three that would determine the just compensation for Galle's estate.

Thus, Zamboanga City Assessor Erwin Bernardo (Bernardo), Zamboanga City Engineer Luis Vicente Despalo (Despalo), and DBP Property Appraiser Romel Calapardo (Calapardo) were called in to sit as commissioners. The commission submitted a Report dated July 7, 2004, which the parties and the SAC rejected. The commission was directed to convene and conduct a revaluation.

Meanwhile, Despalo was replaced by retired City Assessor Obdulia Manalo (Manalo), and Bernardo was replaced by retired Judge Cecilio Martin (Judge Martin). Hearings were conducted whereby the parties presented their respective evidence. Galle presented two witnesses, while LBP submitted only documentary evidence.

Meanwhile, one of the commissioners- Judge Martin - resigned. LBP manifested its willingness to proceed with the revaluation with only two commissioners remaining.35 Commissioner Manalo submittedher Commissioners' Report36 together with all the documents submitted by the parties and the transcript of stenographic notes of the hearings and executive sessions of the commissioners. Manalo's Report reads, as follows: COMMISSIONERS' REPORT Comes now the undersigned Commissioners, and in compliance with the Order of the Honorable Court dated October 30, 2003, respectfully submit this REPORT I. TASK OF THE COMMISSIONERS As stated in the Order of the Honorable Court dated October 30, 2003, the task of the commissioners is "to conduct the re-evaluation of the property subject of this case."

The records show that plaintiff's land titles were cancelled in 1993 hence the task of the commissionersis to determine the value of her land in 1993. II. THE PROPERTY SUBJECT OF THIS CASE Located in Patalon, Zamboanga City, plaintiff's land was originally embraced under two certificates of title with a combined total area of 410.2271 hectares (has.).

These titles were cancelled on November 17, 1993. On May 13, 1994 two parcels of land with a total combined area of 52.1234 has. were reconveyed to plaintiff for being not carpable.

The total area that comprises the property subject of this case is therefore 358.1037 has. Proof of this is given below: Plaintiff's original area: TCT No. T-62,736 - 205.1130 has. TCT No. T-62,737 - 205.1141 has.