G.R. No. 132048 . March 6, 2002.
HON. ANTONIO M. NUESA (as Regional Director of DAR Region III) and RESTITUTO RIVERA, petitioners, vs. HON. COURT OF APPEALS, HON. DAR ADJUDICATION BOARD (DARAB) and JOSE VERDILLO, respondents.

FACTS

On May 25, 1972, the Secretary of Agrarian Reform issued an Order of Award in favor of Jose Verdillo over two agricultural lots, subject to conditions requiring him to personally cultivate or develop a portion of the land within six months. Twenty-one years later, in 1993, Verdillo applied to purchase the lots, claiming compliance. Restituto Rivera protested, asserting he was the actual possessor and cultivator since 1972. A DAR investigation confirmed Rivera’s possession and cultivation, finding Verdillo had never personally worked the land and had instead collected rentals from Rivera. Consequently, DAR Regional Director Antonio Nuesa issued an Order on January 24, 1994, cancelling Verdillo’s award for violating its conditions and declaring the lots open for disposition, directing the processing of Rivera’s application.
Verdillo filed a Petition for Annulment of the Regional Director’s Order before the DARAB Provincial Adjudicator, instead of appealing to the DAR Secretary. Petitioners Nuesa and Rivera moved to dismiss, arguing the Adjudicator lacked jurisdiction as the proper remedy was an administrative appeal, making the Director’s Order final. The Provincial Adjudicator denied the motion and, resolving the merits, reversed the cancellation, ordering the issuance of title to Verdillo. The DARAB and the Court of Appeals affirmed this decision.

ISSUE

Whether the DARAB Provincial Adjudicator had jurisdiction to annul the Order of the DAR Regional Director.

RULING

No, the DARAB Provincial Adjudicator acted without jurisdiction. The Supreme Court reversed the Court of Appeals and reinstated the Regional Director’s Order. The legal logic is anchored on the distinction between the DAR’s quasi-judicial and administrative functions, and the doctrine of exhaustion of administrative remedies. The cancellation of the award by the Regional Director was an act arising from the DAR’s administrative function over the disposition of landed estates under statutes like RA 1400 (Land Reform Act of 1955). Orders from such administrative proceedings are appealable to the DAR Secretary, not to the DARAB. The DARAB’s jurisdiction is limited to agrarian disputes, which involve tenurial arrangements between landowners and tenants. Here, the controversy stemmed from Verdillo’s failure to comply with the conditions of an administrative award, not from a landlord-tenant relationship. By bypassing the appeal to the Secretary and filing directly with the DARAB, Verdillo pursued the wrong remedy. Consequently, the Regional Director’s Order became final and executory. The DARAB’s assumption of jurisdiction was a grave abuse of discretion.