TL;DR

The Supreme Court affirmed that landowners contesting land valuation under the Comprehensive Agrarian Reform Program (CARP) must directly file with the Special Agrarian Court (SAC), not the Court of Appeals. Marken, Inc. incorrectly appealed to the CA, leading to the dismissal of their case and the finality of the Department of Agrarian Reform Adjudication Board (DARAB) decision on just compensation. This ruling underscores the strict jurisdictional rules in agrarian disputes, emphasizing that procedural missteps can forfeit a landowner’s right to challenge land valuation and CARP coverage. Landowners must adhere to the specific legal pathways for agrarian cases to ensure their claims are properly heard.

Pathway to Justice: Navigating the Correct Court for Agrarian Disputes

In the case of Marken, Incorporated v. Landbank of the Philippines, the Supreme Court addressed a critical procedural question in agrarian reform cases: where should landowners go to contest the government’s valuation of their land under CARP? Marken, Inc., disputing the valuation set by Landbank and affirmed by DARAB, sought recourse from the Court of Appeals (CA) via a Petition for Review. However, the Supreme Court clarified that this was the wrong path. The central issue was not just about the amount of compensation, but also about the correct forum for resolving such disputes within the agrarian legal framework.

The Court reiterated the established legal principle that Special Agrarian Courts (SACs), designated within Regional Trial Courts, possess original and exclusive jurisdiction over petitions for the determination of just compensation in CARP cases. This jurisdiction is explicitly granted by Republic Act No. 6657, the Comprehensive Agrarian Reform Law. Section 57 of RA 6657 unequivocally states the SAC’s role:

Section 57. Special Jurisdiction. — The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act.

This legal mandate is further reinforced by Section 6, Rule XIX of the DARAB Rules of Procedure, which dictates that parties disagreeing with DARAB decisions on just compensation must file an original action with the SAC within fifteen days. Marken, Inc.’s decision to appeal to the CA under Rule 43 of the Rules of Court was a fundamental procedural error, rendering the DARAB decision final and executory due to the failure to invoke the SAC’s original jurisdiction. The Supreme Court emphasized that jurisdiction is conferred by law, and the nature of the action is determined by the pleadings and relief sought. Since Marken, Inc. primarily contested the just compensation, the SAC was the proper venue.

The petitioner argued that their appeal to the CA was intended to address the alleged erroneous CARP coverage, not just the compensation amount. They claimed their land should be exempt as it was previously used for fishponds and prawn farming, and later re-zoned as industrial. However, the Court clarified that even this argument did not justify bypassing the SAC. Issues of CARP coverage and exemption fall under the administrative jurisdiction of the Department of Agrarian Reform (DAR) itself, specifically the Regional Director or the Secretary, according to the 2003 Rules of Procedure for Agrarian Law Implementation (ALI) cases. Thus, regardless of whether Marken, Inc. contested coverage or compensation, appealing to the CA directly was procedurally incorrect.

Moreover, the Court addressed the substantive issues raised by Marken, Inc., albeit briefly, to demonstrate the lack of merit in their claims even if procedural lapses were overlooked. The Court found that the subject properties were indeed covered by CARP. At the time of CARP coverage, field investigations revealed the lands were idle, not actively used for aquaculture. While Republic Act No. 7881 exempts land exclusively used for prawn farms and fishponds, this exemption did not apply because the actual use had changed. Furthermore, the alleged reclassification to industrial land via a Sangguniang Bayan resolution was deemed invalid. The Local Government Code requires a formal ordinance, not merely a resolution, for valid land reclassification. Without a valid ordinance, the land remained classified as agricultural and subject to CARP.

Regarding just compensation, the Court upheld the valuation methodology employed by Landbank, which adhered to DAR Administrative Order No. 5 (1998), the applicable guideline at the time. This administrative order provided a formula based on factors like Capitalized Net Income (CNI), Comparable Sales (CS), and Market Value (MV). In this case, due to the absence of CNI and CS data, Landbank appropriately used the formula LV = MV x 2 for idle land. The Court deferred to the expertise of the DAR and Landbank in land valuation, emphasizing that factual findings of administrative agencies are generally binding if supported by substantial evidence. Marken, Inc. failed to present convincing evidence to challenge Landbank’s valuation or demonstrate that the land was improperly classified or valued.

This case serves as a stark reminder of the importance of procedural accuracy in legal proceedings, particularly in agrarian reform. Landowners disputing CARP coverage or land valuation must meticulously follow the prescribed legal pathways. Filing in the wrong court or using the wrong remedy can have dire consequences, potentially forfeiting their claims despite substantive arguments. The ruling reinforces the SAC’s exclusive jurisdiction over just compensation cases and highlights the DAR’s administrative authority in CARP implementation and coverage issues. It underscores that while substantive rights are important, procedural compliance is equally crucial to access justice within the agrarian legal system.

FAQs

For inquiries regarding the application of this ruling to specific circumstances, please contact Atty. Gabriel Ablola through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: MARKEN, INCORPORATED VS. LANDBANK OF THE PHILIPPINES, DEPARTMENT OF AGRARIAN REFORM, AND DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB), G.R. No. 221060, August 09, 2023.