Full Case Title: REPUBLIC OF THE PHILIPPINES, represented by the NATIONAL POWER

CORPORATION, Petitioner, vs.HEIRS OF SATURNINO Q. BORBON, AND COURT OF

G.R. No.: 165354

Date: 12 January 2015

Ponente: Bersamin, J.

Facts: NAPOCOR entered a property located in Barangay San Isidro, Batangas City in order to construct and
maintain transmission lines. Respondents heirs of Saturnino Q. Borbon owned the property. NAPOCOR
filed a complaint for expropriation in the Regional Trial Court in Batangas City (RTC), seeking the acquisition
of an easement of right of way over a portion of the property.

The respondents staunchly maintained that NAPOCOR had not negotiated with them before entering the
property and that the entry was done without their consent; nonetheless, they tendered no objection to
NAPOCOR’s entry provided it would pay just compensation not only for the portion sought to be
expropriated but for the entire property whose potential was greatly diminished, if not totally lost, due to
the project.

During the pendency of an appeal, NAPOCOR filed a Manifestation and Motion to Discontinue
Expropriation Proceedings, informing that the parties failed to reach an amicable agreement; that the
property sought to be expropriated was no longer necessary for public purpose because of the intervening
retirement of the transmission lines installed on the respondents’ property; that because the public
purpose for which such property would be used thereby ceased to exist, the proceedings for expropriation
should no longer continue, and the State was now duty-bound to return the property to its owners; and
that the dismissal or discontinuance of the expropriation proceedings was in accordance with Section 4,
Rule 67 of the Rules of Court.

Issue: Whether or not the expropriation proceedings should be discontinued or dismissed pending appeal.

Ruling: The dismissal of the proceedings for expropriation at the instance of NAPOCOR is proper, but,
conformably with Section 4, Rule 67 of the Rules of Court, the dismissal or discontinuance of the
proceedings must be upon such terms as the court deems just and equitable.
Before anything more, we remind the parties about the nature of the power of eminent domain. The right
of eminent domain is “the ultimate right of the sovereign power to appropriate, not only the public but the
private property of all citizens within the territorial sovereignty, to public purpose.” But the exercise of
such right is not unlimited, for two mandatory requirements should underlie the Government’s exercise of
the power of eminent domain, namely: (1) that it is for a particular public purpose; and (2) that just
compensation be paid to the property owner. These requirements partake the nature of implied conditions
that should be complied with to enable the condemnor to keep the property expropriated.

Cited cases

In Asia's Emerging Dragon Corporation v. Department of Transportation and Communications, Justice Corona, in his dissenting
opinion said that:

To be valid, the taking must be for public use. The meaning of the term "public use" has evolved over time in response to
changing public needs and exigencies. Public use which was traditionally understood as strictly limited to actual "use by the
public" has already been abandoned. "Public use" has now been held to be synonymous with "public interest," "public benefit,"
and "public convenience."

It is essential that the element of public use of the property be maintained throughout the proceedings for expropriation. The
effects of abandoning the public purpose were explained in Mactan-Cebu International Airport Authority v. Lozada, Sr.,to wit:

More particularly, with respect to the element of public use, the expropriator should commit to use the property pursuant to
the purpose stated in the petition for expropriation filed, failing which, it should file another petition for the new purpose. If not,
it is then incumbent upon the expropriator to return the said property to its private owner, if the latter desires to reacquire the
same. Otherwise, the judgment of expropriation suffers an intrinsic flaw, as it would lack one indispensable element for the
proper exercise of the power of eminent domain, namely, the particular public purpose for which the property will be devoted.
Accordingly, the private property owner would be denied due process of law, and the judgment would violate the property
owner's right to justice, fairness and equity.

In Metropolitan Water District v. De los Angeles is an appropriate precedent herein. There, the Metropolitan Water District
passed a board resolution requesting the Attorney-General to file a petition in the Court of First Instance of the Province of Rizal
praying that it be permitted to discontinue the condemnation proceedings it had initiated for the expropriation of a parcel of
land in Montalban, Rizal to be used in the construction of the Angat Waterworks System. It claimed that the land was no longer
indispensably necessary in the maintenance and operation of its waterworks system, and that the expropriation complaint
should then be dismissed. The Court, expounding on the power of the State to exercise the right of eminent domain, then
pronounced:

There is no question raised concerning the right of the plaintiff here to acquire the land under the power of eminent domain
That power was expressly granted it by its charter. The power of eminent domain is a right reserved to the people or
Government to take property for public use. It is the right of the state, through its regular organization, to reassert
either temporarily or permanently its dominion over any portion of the soil of the state on account of public necessity and for
the public good. The right of eminent domain is the right which the Government or the people retains over the estates of
individuals to resume them for public use. It is the right of the people, or the sovereign, to dispose, in case of public necessity
and for the public safety, of all the wealth contained in the state.

Indeed, public use is the fundamental basis for the action for expropriation; hence, NAPOCOR’s motion to
discontinue the proceedings is warranted and should be granted. The Court has observed in Metropolitan Water District v. De
los Angeles:

It is not denied that the purpose of the plaintiff was to acquire the land in question for public use. The fundamental basis then of
all actions brought for the expropriation of lands, under the power of eminent domain, is public use. That being true, the very
moment that it appears at any stage of the proceedings that the expropriation is not for a public use, the action must necessarily
fail and should be dismissed, for the reason that the action cannot be maintained at all except when the expropriation is for
some public use. That must be true even during the pendency of the appeal or at any other stage of the proceedings. If, for
example, during the trial in the lower court, it should be made to appear to the satisfaction of the court that the expropriation is
not for some public use, it would be the duty and the obligation of the trial court to dismiss the action. And even during the
pendency of the appeal, if it should be made to appear to the satisfaction of the appellate court that the expropriation is not for
public use, then it would become the duty and the obligation of the appellate court to dismiss it.

ASSOCIATION OF SMALL LANDOWNERS VS SEC. OF AGRARIAN REFORM (1989)

FACTS:
The following are consolidated cases:

A petition alleging the constitutionality of PD No. 27, EO 228 and 229 and RA 6657. Subjects of the petition
are a 9-hectare and 5 hectare Riceland worked by four tenants. Tenants were declared full owners by EO
228 as qualified farmers under PD 27. The petitioners now contend that President Aquino usurped the
legislature‘s power.
A petition by landowners and sugar planters in Victoria‘s Mill Negros Occidental against Proclamation 131
and EO 229. Proclamation 131 is the creation of Agrarian Reform Fund with initial fund of P50Billion.
A petition by owners of land which was placed by the DAR under the coverage of Operation Land Transfer.
A petition invoking the right of retention under PD 27 to owners of rice and corn lands not exceeding seven
hectares.
ISSUE:
Whether the aforementioned EO‘s, PD, and RA were constitutional.

HELD:

The promulgation of PD 27 by President Marcos was valid in exercise of Police power and eminent domain.

The power of President Aquino to promulgate Proc. 131 and EO 228 and 229 was authorized under Sec. 6
of the Transitory Provisions of the 1987 Constitution. Therefore it is a valid exercise of Police Power and
Eminent Domain

RA 6657 is likewise valid. The carrying out of the regulation under CARP becomes necessary to deprive
owners of whatever lands they may own in excess of the maximum area allowed, there is definitely a
taking under the power of eminent domain for which payment of just compensation is imperative. The
taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of the
title and the physical possession of said excess and all beneficial rights accruing to the owner in favour of
the farmer-beneficiary.

The Court declares that the content and manner of the just compensation provided for in Section 18 of the
CARP Law is not violative of the Constitution.

Doctrines stated

As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the
following conditions concur: (1) the expropriator must enter a private property; (2) the
entry must be for more than a momentary period; (3) the entry must be under warrant or
color of legal authority; (4) the property must be devoted to public use or otherwise
informally appropriated or injuriously affected; and (5) the utilization of the property for
public use must be in such a way as to oust the owner and deprive him of beneficial
enjoyment of the property. All these requisites are envisioned in the measures before us.

EPZA v. Dulay resolved a challenge to several decrees promulgated by President Marcos

The method of ascertaining just compensation under the aforecited decrees constitutes
impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in
a matter which under this Constitution is reserved to it for final determination.

petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress convened is
anomalous and arbitrary, besides violating the doctrine of separation of powers. The legislative power
granted to the President under the Transitory Provisions refers only to emergency measures that may be
promulgated in the proper exercise of the police power.

Although holding neither purse nor sword and so regarded as the weakest of the three departments of
the government, the judiciary is nonetheless vested with the power to annul the acts of either the
legislative or the executive or of both when not conformable to the fundamental law. This is the reason for
what some quarters call the doctrine of judicial supremacy. Even so, this power is not lightly assumed or
readily exercised. The doctrine of separation of powers imposes upon the courts a proper restraint, born of
the nature of their functions and of their respect for the other departments, in striking down the acts of
the legislative and the executive as unconstitutional. The policy, indeed, is a blend of courtesy and caution.
To doubt is to sustain. The theory is that before the act was done or the law was enacted, earnest studies
were made by Congress or the President, or both, to insure that the Constitution would not be breached.

In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality,
requiring therefor the concurrence of a majority of the members of the Supreme Court who took part in
the deliberations and voted on the issue during their session en banc. And as established by judge made
doctrine, the Court will assume jurisdiction over a constitutional question only if it is shown that the
essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an
actual case or controversy involving a conflict of legal rights susceptible of judicial determination, the
constitutional question must have been opportunely raised by the proper party, and the resolution of the
question is unavoidably necessary to the decision of the case itself.

A becoming courtesy admonishes us to respect the decisions of the political departments when they
decide what is known as the political question. As explained by Chief Justice Concepcion in the case of
Tañada v. Cuenco:

The term "political question" connotes what it means in ordinary parlance, namely, a question of policy. It
refers to "those questions which, under the Constitution, are to be decided by the people in their
sovereign capacity; or in regard to which full discretionary authority has been delegated to the legislative
or executive branch of the government." It is concerned with issues dependent upon the wisdom, not
legality, of a particular measure.
 U.S. v. Chandler-Dunbar Water Power Company,it was held:

Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's river between
the American bank and the international line, as well as all of the upland north of the present ship canal,
throughout its entire length, was "necessary for the purpose of navigation of said waters, and the waters
connected therewith," that determination is conclusive in condemnation proceedings instituted by the
United States under that Act, and there is no room for judicial review of the judgment of Congress ... .

In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal filed by the
petitioners with the Office of the President has already been resolved. Although we have said that the
doctrine of exhaustion of administrative remedies need not preclude immediate resort to judicial action,
there are factual issues that have yet to be examined on the administrative level, especially the claim that
the petitioners are not covered by LOI 474 because they do not own other agricultural lands than the
subjects of their petition.

Classification has been defined as the grouping of persons or things similar to each other in certain
particulars and different from each other in these same particulars. To be valid, it must conform to the
following requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the
purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to
all the members of the class. 32 The Court finds that all these requisites have been met by the measures
here challenged as arbitrary and discriminatory.

Equal protection simply means that all persons or things similarly situated must be treated alike both as to
the rights conferred and the liabilities imposed. The petitioners have not shown that they belong to a
different class and entitled to a different treatment. The argument that not only landowners but also
owners of other properties must be made to share the burden of implementing land reform must be
rejected. There is a substantial distinction between these two classes of owners that is clearly visible
except to those who will not see. There is no need to elaborate on this matter. In any event, the Congress
is allowed a wide leeway in providing for a valid classification. Its decision is accorded recognition and
respect by the courts of justice except only where its discretion is abused to the detriment of the Bill of
Rights.

Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended
for public use upon payment of just compensation to the owner. Obviously, there is no need to expropriate
where the owner is willing to sell under terms also acceptable to the purchaser, in which case an ordinary
deed of sale may be agreed upon by the parties. 35 It is only where the owner is unwilling to sell, or cannot
accept the price or other conditions offered by the vendee, that the power of eminent domain will come
into play to assert the paramount authority of the State over the interests of the property owner. Private
rights must then yield to the irresistible demands of the public interest on the time-honored justification,
as in the case of the police power, that the welfare of the people is the supreme law.

J.M. Tuazon Co. v. Land Tenure Administration, this Court held:

It is well-settled that just compensation means the equivalent for the value of the property at the time of
its taking. Anything beyond that is more, and anything short of that is less, than just compensation. It
means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not
whatever gain would accrue to the expropriating entity. The market value of the land taken is the just
compensation to which the owner of condemned property is entitled, the market value being that sum of
money which a person desirous, but not compelled to buy, and an owner, willing, but not compelled to sell,
would agree on as a price to be given and received for such property.

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:

If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be
apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute
reassurance that no piece of land can be finally and irrevocably taken from an unwilling owner until
compensation is paid ...
notes

Private respondent underscores Section 2, Rule 67 of the 1997 Rules on Civil Procedure, which in part
states that the plaintiff shall have the right to take or enter upon the possession of the real property
involved if he deposits with the authorized government depositary an amount equivalent to the assessed
value of the property for purposes of taxation xxx.[13] She also points out that since Presidential Decree
(PD) 42 provides that the plaintiff shall have the right to take or enter upon the possession of the real
property involved, the writ of possession it requires to be issued is not to maintain possession but intended
for the purpose of taking or entering possession. [14]
The Court is not persuaded. The expropriation of real property does not include mere physical entry or
occupation of land. Although eminent domain usually involves a taking of title, there may also be
compensable taking of only some, not all, of the property interests in the bundle of rights that constitute
ownership.

In the instant case, it is manifest that the petitioner, in pursuit of an objective beneficial to public interest,
seeks to realize the same through its power of eminent domain. In exercising this power, petitioner
intended to acquire not only physical possession but also the legal right to possess and ultimately to own
the subject property. Hence, its mere physical entry and occupation of the property fall short of the taking
of title, which includes all the rights that may be exercised by an owner over the subject property. Its
actual occupation, which renders academic the need for it to enter, does not by itself include its acquisition
of all the rights of ownership. Its right to possess did not attend its initial physical possession of the
property because the lease, which had authorized said possession, lapsed. In short, petitioner wanted not
merely possession de facto but possession de jure as well.

Citing J.M. Tuason & Co., Inc. v. Court of Appeals and Cuatico v. Court of Appeals,private respondent
further submits that the eminent domain case, much less the writ of possession, cannot be entertained to
defeat the ejectment case.

Such argument is untenable. It is well-settled that eminent domain is an inherent power of the State that
need not be granted even by the fundamental law.[20] Section 9, Article III of the Constitution, in
mandating that [p]rivate property shall not be taken for public use without just compensation, merely
imposes a limit on the governments exercise of this power and provides a measure of protection to the
individuals right to property.[21] Thus, in J.M. Tuason & Co. and Cuatico, the Court merely enforced the
constitutional limitation regarding the payment of just compensation. Clearly, an ejectment suit ordinarily
should not prevail over the States power of eminent domain.

Masikip v. City of Pasig

- the power of eminent domain is not inherent in LGU and must be expressly provided for by statute

FACTS:
Lourdes Dela Paz Masikip is the registered owner of a parcel of land, which the City of Pasig sought to
expropriate a portion thereof for the “sports development and recreational activities” of the residents of
Barangay Caniogan. This was in January 1994. Masikip refused.

On March 23, 1994, City of Pasig sought again to expropriate said portion of land for the alleged purpose
that it was “in line with the program of the Municipal Government to provide land opportunities to
deserving poor sectors of our community.”

Petitioner protested, so City of Pasig filed with the trial court a complaint for expropriation. The Motion to
Dismiss filed by Masikip was dismissed by the rial court on the ground that there was genuine necessity to
expropriate the property. Case was elevated to the Court of Appeals, which dismissed petition for lack of
merit.

Hence, this petition.

ISSUE:

W/N there was genuine necessity to expropriate the property

HELD:

Eminent domain is “the right of a government to take and appropriate private property to the public use,
whenever the public exigency requires it, which can be done only on condition of providing a reasonably
compensation therefor.” It is the power of the State or its instrumentalities to take private property for
public use and is inseparable from sovereignty and inherent in government.

This power is lodged in the legislative branch of government. It delegates the power thereof to the LGUs,
other public entities and public utility corporations, subject only to constitutional limitations. LGUs have no
inherent power of eminent domain and may exercise it only when expressly authorized by statute.

Sec. 19, LGC: LGU may, through its chief executive and acting pursuant to an ordinance, exercise the power
of eminent domain for public use, purpose or welfare for the benefit of the poor and landless, upon
payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws.

Provided:
(1) power of eminent domain may not be exercised unless a valid and definite offer has been previously
made to the owner and such offer was not accepted;
(2) LGU may immediately take possession of the property upon the filing of expropriation proceedings and
upon making a deposit with the proper court of at least 15% fair market value of the property based on the
current tax declaration; and
(3) amount to be paid for expropriated property shall be determined by the proper court, based on the fair
market value at the time of the taking of the property

There is already an established sports development and recreational activity center at Rainforest Park in
Pasig City. Evidently, there is no “genuine necessity” to justify the expropriation. The records show that the
Certification issued by the Caniogan Barangay Council which became the basis for the passage of
Ordinance No. 4, authorizing the expropriation, indicates that the intended beneficiary is the Melendres
Compound Homeowner’s Association, a private, non-profit organization, not the residents of Caniogan.

Cases cited:
US v. Toribio,[7] this Court defined the power of eminent domain as the right of a government to take
and appropriate private property to public use, whenever the public exigency requires it, which can be
done only on condition of providing a reasonable compensation therefor. It has also been described as the
power of the State or its instrumentalities to take private property for public use and is inseparable from
sovereignty and inherent in government.

MATEO v. DAR
Vivencio Mateo, et al. Vs. Department of Agrarian Reform, Land Bank of the Philippines and Mariano T.
Rodriguez, et al.
G.R. No. 186339
February 15, 2017

FACTS:

The Mateos were the registered owners of coconut and rice lands with a total area of 1,323,112 square
meters situated at Fabrica, Bacon, Sorsogon and were covered by TCT No. T-22822. A portion of the lands
was brought under the coverage of the CARP of the government and for this reason, the DAR entered the
premises sometime in June 1994. LBP valued the Mateos' land at fifty-two thousand pesos (₱52,000.00)
per ha. The Mateos, however, rejected the LBP's valuation. On April 30, 1997, the Mateos filed a complaint
against LBP, DAR, and the farmer beneficiaries of the land for just compensation. The case was docketed as
Civil Case No. 97-6331 and raffled to the SAC, presided by respondent Judge Honesto A. Villamor.
The LBP and DAR filed their respective answers arguing that since no summary administrative proceedings
to determine the amount of just compensation had been conducted yet, the complaint of the Mateos was
premature.

Pre-trial ensued and was terminated. The SAC granted the request of the parties for the appointment of
two commissioners, namely, Mr. Jesus Empleo and Engr. Florencio Dino (Engr. Dino), to represent the LBP
and the Mateos, respectively. Among the evidence offered by the Mateos during the trial were: (a) the
testimonies of their father, Dr. Eleseo Mateo, Engr. Dino, farmer Manuel Docot and caretaker Danilo
Federio; (b) TCT No. T-22822; (c) Memorandum of Valuation (MoV), Claim Folder Profile and Valuation
Summary of Agricultural Land; (d) deeds of sale covering two parcels of land less than two ha in size in
Sorsogon, which were purchased for ₱300,000.00 and ₱400,000.00 per ha; (e) newspaper clipping of
Eduardo Cojuangco, who was selling his land in Sorsogon for ₱350,000.00 per ha; (f) Engr. Dino's Report;
and (g) deed of sale of a lot in Cabi-an, Sorsogon bought by the government for ₱245,000.00 per ha.

On the other hand, the DAR presented: (a) the testimonies of agriculturist Romeo Brotamante,
government employee Ireneo Defeo and farmer Cresenciano Lagajeno; (b) a Field Investigation Report
dated March 29, 1996; (c) ledger cards bearing dates from December 2, 1994 to June 9, 1997; and (d) two
pass books, the second of which indicated withdrawals in the total amount of ₱601,789.97.The LBP, on its
part, offered (a) the testimony of Monita Balde, and (b) a Claims Valuation and Processing Form.

The decretal portion of the SAC Decision13 dated July 4, 2002 reads:

WHEREFORE, premises considered, judgment is hereby rendered:

1. Fixing the amount of SEVENTY-ONE MILLION, ONE HUNDRED FORTY-THREE THOUSAND, SIX HUNDRED
TWENTY-THREE ([₱]71,143,623.00) Pesos, Philippine currency[,] to be the just compensation for the
l12[.]3112 [has] of agricultural land situated at Fabrica, District of Bacon, City of Sorsogon covered by TCT
No. T-22822 owned by the [Mateos] which property was taken by the government pursuant to the [CARP]
of the government [as] provided by R.A. N[o]. 6657.

2. Ordering the [LBP] to pay the [Mateos] the amount of Seventy-One Million, one Hundred forty-three
thousand[,] six hundred twenty-three (₱71,143,623.00) Pesos[,] Philippine currency[,] in the manner
provided by R.A. No. 6657 by way of full payment of the said just compensation after deducting whatever
amount [was] previously received by the [Mateos] from the [LBP] as part of the just compensation.

3. Without pronouncement as to cost The LBP and the DAR both filed notices of appeal, but no brief was
filed by the latter before the CA. On August 4, 2008, the CA rendered the herein assailed Decision23 setting
aside the SAC's judgment and dismissing without prejudice the complaint of the Mateos.
The CA explained that:
Since the DARAB is clothed with quasi-judicial authority to make a preliminary determination of just
compensation of lands acquired under R.A. No. 6657, x x x and it appearing from the records and [the
Mateos'] own admission that [the] said administrative agency had not yet taken cognizance of, and passed
upon the issue of just compensation when [the Mateos] prematurely filed with the court a quo the
complaint for determination of just compensation, thus failing to exhaust the prescribed administrative
remedy and, in the process, preventing the DARAB from complying with [the] said administrative process
which is mandatory, We resolve to grant the appeal.
Jurisprudence teems with pronouncements that before a party is allowed to seek the intervention of the
court, it is a pre-condition that he should have availed of all the means of administrative processes
afforded him.x x x The premature invocation of [the] court's intervention is fatal to one's cause of action[.]
x x x[.]

ISSUE:

1. Whether or not the CA erred in negating the jurisdiction of the RTC, as a SAC, to determine in the first
instance and in the absence of the conduct of prior administrative proceedings, questions of just
compensation to be paid to landowners.
2. Whether or not the CA erroneously held that the SAC disregarded the provisions of Section 17 of R.A. No.
6657 in determining the amount of just compensation to be paid for the subject property.

RULING:

The instant petition is partially meritorious.

On jurisdiction and the doctrine of exhaustion of administrative remedies: Section 50 of R.A. No. 6657, in
part, provides that the DAR is vested with ''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 jurisdiction of the Department of Agriculture (DA) and the
Department of Environment and Natural Resources. Section 57, on the other hand, confers "special" and
"original and exclusive" jurisdiction to the SAC over all petitions of landowners for the determination of
just compensation.

Anent the application of Sections 50 and 57 of R.A. No. 6657, in relation to the proper procedure which
must be followed in cases involving determination of just compensation for landowners, Ramon Alfonso v.
LBP and DAR42 is emphatic that. In San Miguel Properties, Inc. v. Perez, we explained the reasons why
Congress, in its judgment, may choose to grant primary jurisdiction over matters within the erstwhile
jurisdiction of the courts, to an agency.
The doctrine of primary jurisdiction bas been increasingly called into play on matters demanding the
special competence of administrative agencies even if such matters are at the same time within the
jurisdiction of the courts. A case that requires for its determination the expertise, specialized skills, and
knowledge of some administrative board or commission because it involves technical matters or intricate
questions of fact, relief must first be obtained in an appropriate administrative proceeding before a
remedy will be supplied by the courts although the matter comes within the jurisdiction of the courts. The
application of the doctrine does not call for the dismissal of the case in the court but only for its suspension
until after the matters within the competence of the administrative body are threshed out and
determined.

The CA erred in ordering the dismissal of the Mateos' complaint before the SAC. The doctrine of
exhaustion of administrative remedies finds no application in the instant case where the DAR took no
initiative and inordinately delayed the conduct of summary administrative proceedings, and where during
the pendency of the case before the SAC, the DARAB rendered decisions affirming the LBP's prior
valuations of the subject property. It is significant to note that R.A. No. 6657 was first amended by R.A. No.
8532,62 which augmented the funds in the implementation of the CARP. Thereafter, Section 7 of R.A. No.
970063 amended Section 17 of R.A. No. 6657, which now reads as follows: Sec. 17. Determination of Just
Compensation. -In determining just compensation, the cost of acquisition of the land, the value of the
standing crop, the current value of like properties, its nature, actual use and income, the sworn valuation
by the owner, the tax declarations, the assessment made by government assessors, and seventy percent
(70%) of the zonal valuation of the Bureau of Internal Revenue (BIR), translated into a basic formula by the
DAR, shall be considered, subject to the final decision of the proper court. The social and economic
benefits contributed by the farmers and the farmworkers and by the Government to the property as well
as the non-payment of taxes or loans secured from any government financing institution on the said land
shall be considered as additional factors to determine its valuation. (Underscoring ours) On the other hand,
the transitory provision of DAR AO No. 2, series of 2009,64 in part, provides that "with respect to land
valuation, all Claim Folders received by LBP prior to July 1, 2009 shall be valued in accordance with Section
17 of R.A. No. 6657 prior to its amendment by R.A. No. 9700." Accordingly then, in LBP v. Heirs of Jesus
Alsua,65 the Court "excepted from the application of the amended Section 17 all claim folders received by
LBP prior to July 1, 2009, which shall be valued in accordance with Section 17 of [R.A. No.] 6657, as
amended, prior to its further amendment by [R.A.] No. 9700."66 In the case of the Mateos, the Claim
Folder was received by LBP earlier than July 1, 2009; hence, the amendments in Section 17, as introduced
by R.A. No. 9700, shall not be applicable. Just compensation shall be determined in accordance with
Section 17 of R.A. No. 6657 prior to its amendment by R.A. No. 9700. IN VIEW OF THE FOREGOING, the
petition is PARTIALLY GRANTED. The Decision and Resolution dated August 4, 2008 and January 28, 2009,
respectively, of the Court of Appeals in CA-G.R. CV No. 79581 are hereby REVERSED only insofar as they
dismissed the complaint for just compensation filed by Vivencio Mateo, Eugenio Mateo, Joji Mateo
Morales and Myrna Mateo Santos. However, the petition is DENIED insofar as it seeks to sustain the
valuation of the subject property in Civil Case No. 97-6331 made by the Regional Trial Court of Sorsogon
City, Sorsogon, Branch 52, sitting as Special Agrarian Court.

The case is hereby REMANDED to the trial court to determine with utmost dispatch the just compensation
due to Vivencio Mateo, Eugenio Mateo, Joji Mateo Morales and Myrna Mateo Santos strictly in accordance
with Section 17 of Republic Act No. 6657 prior to its amendment by Republic Act No. 9700, pertinent
Administrative Orders issued by the Department of Agrarian Reform, and the guidelines set forth in this
Decision. To be deducted from the final valuation is the total amount withdrawn by Vivencio Mateo,
Eugenio Mateo, Joji Mateo Morales and Myrna Mateo Santos from the cash and Agrarian Reform Bonds
deposited in their names by the Land Bank of the Philippines. The remaining balance shall be subject to
annual legal interest at the rate of twelve percent (12%) from the time of taking until June 30, 2013, and six
percent (6%) from July 1, 2013 until full payment. The trial court is directed to SUBMIT a report on its
findings and recommendations within SIX (6) MONTHS from notice hereof.

Cited Cases

Belista and Heirs of Vidad as bases to show that SACs possess original and exclusive jurisdiction to
determine just compensation, regardless of prior exercise by the DAR of its primary jurisdiction.

We do not disagree with the rulings in Belista and Heirs of Vidad, both of which acknowledge the grant of
primary jurisdiction to the DAR, subject to judicial review. We are, however, of the view that the better
rule would be to read these seemingly conflicting cases without having to disturb established doctrine.

Belista, for example, should be read in conjunction with Association, the landmark case directly resolving
the constitutionality of RA 6657. In Association, this Court unanimously upheld the grant of jurisdiction
accorded to the DAR under Section 1643 to preliminarily determine just compensation. This grant of
primary jurisdiction is specific, compared to the general grant of quasi-judicial power to the DAR under
Section 50. Belista, which speaks of exceptions to the general grant of quasi-judicial power under Section
50, cannot be read to extend to the specific grant of primary jurisdiction under Section 16.

xxxx

Considering the validity of the grant of primary jurisdiction, our ruling in Heirs of Vidad should also be
reconciled with the rationale behind the doctrine of primary jurisdiction. In this sense, neither landowner
nor agency can disregard the administrative process provided under the law without offending the already
established doctrine of primary jurisdiction:

In Alfonso,the Court summed up the guidelines in just compensation cases, viz. :

First, in determining just compensation, courts are obligated to apply both the compensation valuation
factors enumerated by the Congress under Section 17 of RA 6657 and the basic formula laid down by the
DAR.x x x[.]
xxxx

Second, the formula, being an administrative regulation issued by the DAR pursuant to its rule-making and
subordinate legislation power under RA 6657, has the force and effect of law. Unless declared invalid in a
case where its validity is directly put in issue, courts must consider their use and application.x x x[.]

xxxx

Third, courts, in the exercise of their judicial discretion, may relax the application of the formula to fit the
peculiar circumstances of a case.1avvphi1 They must, however, clearly explain the reason for any deviation;
otherwise, they will be considered in grave abuse of discretion.x x x[.]

Heirs of Mateo Pidacan and Romana Bigo v. Air Transportation Office, G.R. No. 186192, August 25, 2010

Facts: In 1935, spouses Mateo Pidacan and Romana Bigo acquired a parcel of land with an area of about 22
hectares, situated in San Jose, Occidental Mindoro (the property). However, in 1948, respondent Air
Transportation Office (ATO)used a portion of the property as an airport. In 1974, the ATO constructed a
perimeter fence and a new terminal building on the property. The ATO also lengthened, widened, and
cemented the airport's runway. Petitioners demanded from ATO the payment of the value of the property
as well as the rentals for the use thereof but ATO refused. Eventually in 1988, OCT No. 2204 was cancelled
and Transfer Certificate of Title No. T-7160 was issued in favor of petitioners. Despite this development,
ATO still refused to pay petitioners.

the RTC ruled again in favor of petitioners, ordering ATO, among others, to pay petitioners the amount of
P304.00 per sq m for the area expropriated or a total of P65,584,048.00, imposing interest at the rate of
12% per annum from February 1, 2001 until full payment, and to pay monthly rentals for the use and
occupation of the property from January 1, 1957 to January 31, 2001, for a total amount of P6,249,645.40,
with interest at the rate of 12% per annum until the same is fully paid. The CA remanded the case back to
the RTC.

ATO invoked the doctrine of State Immunity and Non-suability of the State

Issue: Whether ATO invoking the doctrine of Non-suability of the State proper.
Whether there was genuine necessity

Ruling: No.

Respondent's argument is misplaced inasmuch as the Principle of State Immunity finds no application in
the case before us.

Under these circumstances, respondent may not validly invoke the Royal Prerogative of Dishonesty and
conveniently hide under the State's cloak of invincibility against suit, considering that this principle yields
to certain settled exceptions. True enough, the rule, in any case, is not absolute for it does not say that the
state may not be sued under any circumstance.

Yes there was genuine necessity, and the portion of land was used for public use he said Regional Trial
Court is hereby DIRECTED to issue a Writ of Execution enforcing this Court's Decision in Heirs of Mateo
Pidacan and Romana Eigo v. Air Transportation Office (ATO) dated June 15, 2007.

Doctrines and cited cases

"The very foundation of the right to exercise eminent domain is a genuine necessity, and that necessity
must be of a public character. The ascertainment of the necessity must precede or accompany and not
follow, the taking of the land." The court cited this passage in Blackstone's Commentaries: "So great is
the regard of the law for private property that it will not authorize the least violation of it, even for the
public good, unless there exist a very great necessity thereof."

Well-settled in this jurisdiction that the determination of just compensation is a judicial prerogative.[20]
Thus, in Export Processing Zone Authority v. Judge Dulay, we declared:

The determination of "just compensation" in eminent domain cases is a judicial function. The executive
department or the legislature may make the initial determinations but when a party claims a violation of
the guarantee in the Bill of Rights that private property may not be taken for public use without just
compensation, no statute, decree, or executive order can mandate that its own determination shall prevail
over the court's findings. Much less can the courts be precluded from looking into the "just-ness" of the
decreed compensation.
Our ruling in EPG Construction Co. v. Hon. Vigilar,[22] citing Amigable v. Cuenca, etc., et al.[23] and
Ministerio, et al. v. CFI of Cebu, etc., et al.,[24] is instructive:

To our mind, it would be the apex of injustice and highly inequitable for us to defeat
petitioners-contractors' right to be duly compensated for actual work performed and services rendered,
where both the government and the public have, for years, received and accepted benefits from said
housing project and reaped the fruits of petitioners-contractors' honest toil and labor.

Incidentally, respondent likewise argues that the State may not be sued in the instant case, invoking the
constitutional doctrine of Non-suability of the State, otherwise known as the Royal Prerogative of
Dishonesty.

Respondent's argument is misplaced inasmuch as the Principle of State Immunity finds no application in
the case before us.

Under these circumstances, respondent may not validly invoke the Royal Prerogative of Dishonesty and
conveniently hide under the State's cloak of invincibility against suit, considering that this principle yields
to certain settled exceptions. True enough, the rule, in any case, is not absolute for it does not say that the
state may not be sued under any circumstance.

Thus, in Amigable v. Cuenca, this Court, in effect, shred the protective shroud which shields the State from
suit, reiterating our decree in the landmark case of Ministerio v. CFI of Cebu that "the doctrine of
governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen."
It is just as important, if not more so, that there be fidelity to legal norms on the part of officialdom if the
rule of law were to be maintained.

Although the Amigable and Ministerio cases generously tackled the issue of the State's immunity from suit
vis-a-vis the payment of just compensation for expropriated property, this Court nonetheless finds the
doctrine enunciated in the aforementioned cases applicable to the instant controversy, considering that
the ends of justice would be subverted if we were to uphold, in this particular instance, the State's
immunity from suit.