G.R. No. 156304 ; October 23, 2006
ANACLETO R. MENESES, et al., petitioners, vs. SECRETARY OF AGRARIAN REFORM, et al., respondents.

FACTS

Petitioners were co-owners of a 60.8544-hectare irrigated rice land in Bulacan. The property was distributed to farmer-beneficiaries on October 21, 1972, pursuant to Presidential Decree No. 27 (P.D. No. 27). In 1993, petitioners filed a complaint for determination and payment of just compensation with the Regional Trial Court (RTC), alleging no payment had been made since the taking and that the fair market value was P6,000,000.00. The RTC initially dismissed the case for lack of cause of action, stating valuation must first be filed with the Department of Agrarian Reform (DAR). After the RTC suspended proceedings, petitioners filed with the DAR Adjudication Board (DARAB), which dismissed the case, claiming no jurisdiction over P.D. No. 27 valuation.
The RTC later reopened the case. The parties agreed the sole issue was whether just compensation should be based on Republic Act No. 6657 and the 1987 Constitution , not P.D. No. 27. The RTC subsequently dismissed the complaint, ruling compensation must be based on the value at the time of taking in 1972 under P.D. No. 27. The Court of Appeals affirmed the dismissal.

ISSUE

Whether the Regional Trial Court, sitting as a Special Agrarian Court, correctly dismissed the complaint for determination of just compensation on the ground that valuation must be based on P.D. No. 27, using values at the time of taking in 1972.

RULING

No. The Supreme Court reversed and remanded the case. The legal logic is anchored on the nature of just compensation as a judicial prerogative and the application of current laws to pending cases. While the property was taken under P.D. No. 27 in 1972, the judicial determination of just compensation was still pending. The Court has consistently held that for properties taken under P.D. No. 27 but where the compensation proceedings remain unresolved, the just compensation must be determined in accordance with Republic Act No. 6657 (the Comprehensive Agrarian Reform Law of 1988) and the 1987 Constitution . This is because just compensation is a judicial function, and the valuation must be current and equivalent to the full and fair value of the property at the time of payment, not merely its value at the time of taking decades prior.
The RTC, as a Special Agrarian Court, has original and exclusive jurisdiction over all petitions for the determination of just compensation. Its dismissal, based on the erroneous premise that P.D. No. 27 exclusively governed, constituted a refusal to perform a positive duty enjoined by law. Consequently, the case was remanded to the RTC for the proper reception of evidence and final determination of just compensation in line with R.A. No. 6657 and relevant jurisprudence.