LAND BANK OF THE PHILIPPINES, PETITIONER, VS.

RENE RALLA
BELISTA, RESPONDENT.

[ G.R. No. 164631, June 26, 2009 ]

FACTS:
Spouses Pablo Ralla and Carmen Munoz Ralla donated eight parcels of land in Ligao,
Albay to their daughter, Rene Ralla Belista. These parcels of land were placed under
the coverage of the Comprehensive Agrarian Reform Program (CARP) by the
Department of Agrarian Reform (DAR). Believing that her lots were undervalued, Belista
filed a Petition for Valuation and Payment of Just Compensation against the Land Bank
of the Philippines (LBP) before the DARAB-Regional Adjudicator for Region V (RARAD-
V). On July 7, 2003, RARAD-V issued a Decision in favor of Belista, fixing the just
compensation at P2,896,408.91. Both parties filed motions for reconsideration, and
RARAD-V issued an Order on October 8, 2003, modifying the valuation claim to
P2,540,211.58. Petitioner LBP filed an original Petition for Determination of Just
Compensation at the Regional Trial Court (RTC), but the court dismissed the case for
failure to exhaust administrative remedies and comply with the DARAB Rules of
Procedure. Petitioner LBP filed a Motion for Reconsideration, which was denied.
Petitioner then filed a petition for review before the Court of Appeals (CA), which
affirmed the dismissal of the petition. Petitioner now seeks the annulment of the CA
decision, arguing that it did not violate the doctrine of non-exhaustion of administrative
remedies and that the applicable rules are the 1994 DARAB Rules of Procedure, not the
2003 DARAB Rules. The main issue is whether the decision of the Adjudicator must first
be appealed to the DARAB before resorting to the RTC sitting as SAC.

ISSUES:
1. Whether it is necessary to appeal the decision of the Adjudicator to the DARAB
before resorting to the RTC sitting as SAC in cases involving claims for just
compensation under RA No. 6657.
2. Whether the determination of just compensation for lands taken under the
agrarian reform program is a function of the courts of justice.
3. Whether the Regional Trial Court (RTC) has jurisdiction over petitions for the
determination of just compensation for lands taken under agrarian reform.

RULING:
1. The court rules in the negative. The jurisdiction on just compensation cases for
the taking of lands under RA No. 6657 is vested in the courts. The Special
Agrarian Courts, being Regional Trial Courts, have original and exclusive
jurisdiction over all petitions for the determination of just compensation to
landowners. The DAR, as an administrative agency, cannot be granted
 jurisdiction over cases of eminent domain and over criminal cases. The original
and exclusive jurisdiction of the RTC, sitting as SAC, is upheld by the court in
accordance with Section 57 of RA No. 6657. Therefore, there is no need to
appeal to the DARAB before resorting to the RTC sitting as SAC in cases
involving claims for just compensation.
2. Yes, the determination of just compensation for lands taken under the agrarian
reform program is a function of the courts of justice. The valuation of property or
determination of just compensation in eminent domain proceedings is essentially
a judicial function vested with the courts and not with administrative agencies.
3. Yes, the RTC has jurisdiction over petitions for the determination of just
compensation for lands taken under agrarian reform. The original and exclusive
jurisdiction to determine just compensation is with the RTC, as provided by
Section 57 of Republic Act No. 6657 (Comprehensive Agrarian Reform Law of
1988). The DAR's role is limited to a preliminary determination of just
compensation, which is subject to challenge before the courts.

PRINCIPLES:

 The DAR has 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 exclusive
jurisdiction of other agencies (DA and DENR).
 The Special Agrarian Courts, which are Regional Trial Courts, have original and
exclusive jurisdiction over all petitions for the determination of just compensation
to landowners and the prosecution of all criminal offenses under RA No. 6657.
 The valuation of property in eminent domain is essentially a judicial function that
cannot be vested in administrative agencies.
 The jurisdiction of the RTC, sitting as SAC, would be undermined if the DAR
vested administrative officials with original jurisdiction in compensation cases and
made the RTC an appellate court for the review of administrative decisions.
 Direct resort to the SAC by private respondents is valid, as the original and
exclusive jurisdiction to determine compensation cases is in the RTCs.
 The determination of just compensation for lands taken under the agrarian reform
program is a function of the courts of justice.
 The original and exclusive jurisdiction to determine just compensation for lands
taken under agrarian reform is with the regional trial courts.
 The primary jurisdiction of the Department of Agrarian Reform (DAR) is to
determine in a preliminary manner the just compensation for lands taken under
the agrarian reform program, but such determination is subject to challenge
before the courts.
 Rules of procedure cannot confer jurisdiction on courts and administrative
agencies. Jurisdiction over the subject matter is conferred by law.