G.R. No. 177511 ; June 29, 2010
LAND BANK OF THE PHILIPPINES, Petitioner, vs. FORTUNE SAVINGS AND LOAN ASSOCIATION, INC., represented by PHILIPPINE DEPOSIT INSURANCE CORPORATION, Respondent.

FACTS

Respondent Fortune Savings owned agricultural land in Batangas. After offering it for sale to the Department of Agrarian Reform (DAR) under the Comprehensive Agrarian Reform Program (CARP), petitioner Land Bank valued it at only ₱6,796.00. Fortune Savings rejected this and filed a summary administrative proceeding with the DAR Adjudication Board (DARAB), which fixed just compensation at ₱93,060.00 on March 3, 1999. Land Bank received the decision on March 17, 1999, and had 15 days, or until April 1, 1999 (a holiday), to file a judicial action. It filed a petition with the Regional Trial Court (RTC) on April 5, 1999. This case was later dismissed without prejudice for failure to serve summons.
Land Bank filed a new petition on April 7, 2000. The RTC declared Fortune Savings in default, heard Land Bank’s evidence ex parte, and upheld the ₱6,796.00 valuation. Fortune Savings appealed, arguing the DARAB decision had become final. The Court of Appeals reinstated the DARAB’s ₱93,060.00 valuation, ruling Land Bank’s first petition was filed late, making the DARAB decision final.

ISSUE

1. Whether the CA erred in holding that the DARAB decision became final due to Land Bank’s alleged late filing of its judicial action.
2. Whether the CA erred in adopting the DARAB’s ₱93,060.00 valuation instead of Land Bank’s ₱6,796.00.

RULING

The Supreme Court partially granted the petition, reversing the CA but affirming the ₱93,060.00 valuation. On the first issue, the Court clarified that the determination of just compensation is a judicial function. While the DAR has primary jurisdiction for preliminary valuation, the RTC, sitting as a Special Agrarian Court, exercises original and exclusive jurisdiction. The proceedings are not a continuation of the administrative determination. Consequently, Land Bank’s filing of a second petition after the dismissal of the first was not barred by the 15-day period in the DARAB Rules. The two proceedings are separate and independent; the timeliness of the first judicial filing does not foreclose a subsequent proper action.
On the second issue, the Court noted that Fortune Savings forfeited its right to present evidence due to default. However, the Court accepted the DARAB’s ₱93,060.00 valuation. This amount was based on DARAB’s expertise, was not far from the price Fortune Savings originally paid for the land, and involved a relatively small sum. To avoid further delay from a remand, the Court deemed it practical to affirm this valuation. Land Bank was ordered to pay ₱93,060.00 with legal interest from the finality of the decision.