G.R. No. 166259. November 12, 2012.

LAND BANK OF THE PHILIPPINES, petitioner, vs.

HONEY​-COMB FARMS CORPORATION, respondent.

Eminent Domain; Just Compensation; The valuation of

property or determination of just compensation in eminent domain
proceedings is essentially a judicial function which is vested with the
courts and not with administrative agencies.·The taking of
property under RA 6657 is an exercise of the StateÊs power of
eminent domain. „The valuation of property or determination of just
compensation in eminent domain proceedings is essentially a
judicial function which is vested with the courts and not with
administrative agencies.‰ Specifically, „[w]hen the parties cannot
agree on the amount of just compensation, only the exercise of
judicial power can settle the dispute with binding effect on the
winning and losing parties.‰
Remedial Law; Civil Procedure; Exhaustion of Administrative
Remedies; Moot and Academic; The doctrine of exhaustion of admin-

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* SECOND DIVISION.

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istrative remedies does not apply when the issue has been rendered
moot and academic.·We also find no merit in the LBPÊs argument
that the HFC failed to exhaust administrative remedies when it
directly filed a petition for the determination of just compensation
with the SAC even before the DARAB case could be resolved. In
Land Bank of the Phils. v. Wycoco, 419 SCRA 67 (2004), we held
that the doctrine of exhaustion of administrative remedies does not
apply when the issue has been rendered moot and academic. In the
present case, the issue is now moot considering that the valuation
made by the LBP had long been affirmed in toto by the DARAB in
its May 14, 1998 Decision.
Same; Same; Forum Shopping; Words and Phrases; Forum
shopping is the act of litigants who repetitively avail themselves of
multiple judicial remedies in different fora, simultaneously or
successively, all substantially founded on the same transactions and
the same essential facts and circumstances; and raising
substantially similar issues either pending in or already resolved
adversely by some other court; or for the purpose of increasing their
chances of obtaining a favorable decision, if not in one court, then in
another.·Forum shopping is the act of litigants who repetitively
avail themselves of multiple judicial remedies in different fora,
simultaneously or successively, all substantially founded on the
same transactions and the same essential facts and circumstances;
and raising substantially similar issues either pending in or already
resolved adversely by some other court; or for the purpose of
increasing their chances of obtaining a favorable decision, if not in
one court, then in another. The rationale against forum-shopping is
that a party should not be allowed to pursue simultaneous remedies
in two different courts, for to do so would constitute abuse of court
processes which tends to degrade the administration of justice,
wreaks havoc upon orderly judicial procedure, and adds to the
congestion of the heavily burdened dockets of the courts.
Same; Same; Same; What is essential in determining the
existence of forum-shopping is the vexation caused the courts and
litigants by a party who asks different courts and/or administrative
agencies to rule on similar or related causes and/or grant the same
or substantially similar reliefs, in the process creating the possibility
of conflicting decisions being rendered upon the same issues.·It has
been held that „[w]hat is essential in determining the existence of

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forum-shopping is the vexation caused the courts and litigants by a

party who asks different courts and/or administrative agencies to
rule on similar or related causes and/or grant the same or
substantially similar reliefs, in the process creating the possibility
of conflicting decisions being rendered upon the same issues.‰ In the
present case, the evil sought to be prevented by the prohibition on
forum shopping, i.e., the possibility of conflicting decisions, is
lacking since the DARAB determination is merely preliminary and
is not binding on the parties; such determination is subject to
challenge before the courts. The law, in fact, allows the landowner
to file a case for the determination of just compensation with the
SAC without the necessity of first filing the same with the DARAB.
Based on these considerations, it is clear that the HFC cannot be
charged with forum shopping.
Agrarian Reform; Special Agrarian Courts (SAC); As the law
now stands, it is clear that the Special Agrarian Courts (SAC) is
duty bound to take into consideration the factors fixed by Section 17
of RA 6657 and apply the basic formula prescribed and laid down in
the pertinent administrative regulations, in this case, Department of
Agrarian Reform (DAR) Administrative Order No. 6, series of 1992,
as amended by DAR Administrative Order No. 11, series of 1994, to
determine just compensation.·As the law now stands, it is clear
that the SAC is duty bound to take into consideration the factors
fixed by Section 17 of RA 6657 and apply the basic formula
prescribed and laid down in the pertinent administrative
regulations, in this case, DAR Administrative Order No. 6, series of
1992, as amended by DAR Administrative Order No. 11, series of
1994, to determine just compensation. In the present case, we thus
find no difficulty in concluding that the CA and the RTC, acting as a
SAC, seriously erred when they effectively eschewed the basic
formula prescribed by the DAR regulations and chose instead to
come up with their own basis for the valuation of the land in
question.

PETITION for review on certiorari of the amended decision

and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
LBP Legal Department for petitioner LBP.

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Pejo, Aquino & Associates for respondents.

BRION, J.:
Before us is a petition for review on certiorari,1 filed by
the petitioner Land Bank of the Philippines (LBP),
assailing the Court of AppealÊs (CAÊs) Amended Decision2
and Resolution3 in CA-G.R. CV No. 69661. The CA
amended Decision reinstated with modification the
Judgment4 of the Regional Trial Court (RTC) of Masbate,
Masbate, Branch 48, acting as a Special Agrarian Cow1
(SAC) in Special Civil Case No. 4637 for Determination and
Payment of Just Compensation under Republic Act No.
(RA) 6657.

The Factual Antecedents

Respondent Honeycomb Farms Corporation (HFC) was

the registered owner of a parcel of agricultural land under
Transfer Certificate of Title No. T-2550, with an area of
29.0966 hectares, situated in „Curvada, Cataingan,
Masbate.‰5 Through a letter dated February 5, 1988, HFC
voluntarily offered its land to the Department of Agrarian
Reform (DAR) for coverage under RA 6657, the
Comprehensive Agrarian Reform Law of 1988 (CARL), for
P581,932.00 or at P20,000.00 per hectare.6 Pursuant to the
rules and regulations governing the CARL, the
government, through the DAR and the LBP, determined an
acquirable and compensable area of 27.5871

_______________
1 Rollo, pp. 17-55; under Rule 45 of the Rules of Court.
2 Dated September 16, 2004; id., at pp. 57-62. Penned by Associate
Justice Jose L. Sabio (retired), and concurred in by Associate Justices
Delilah Vidallon-Magtolis (retired) and Hakim S. Abdulwahid.
3 Dated November 25, 2004; id., at pp. 65-66.
4 Dated July 27, 2000; id., at pp. 110-114. Penned by Judge Jacinta S.
Tambago.
5 Id., at p. 97.
6 Id., at p. 231.

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hectares, while 1.5095 hectares were excluded for being

hilly and underdeveloped.7
Subsequently, the LBP, as the agency with the authority
to determine land valuation and compensation under the
CARL, and using the guidelines set forth in DAR
Administrative Order No. 6, series of 1992,8 fixed the value
of the land in the amount of P165,739.44 and sent a Notice
of Valuation to HFC.9
HFC rejected the LBPÊs valuation and it filed, on
January 15, 1996,10 a petition with the DAR Adjudication
Board (DARAB) for a summary administrative
determination of just compensation. In its petition, HFC
claimed that the just compensation for the land should be
in the amount of P25,000.00 per hectare, considering its
location and productivity, or for an aggregate amount of
P725,000.00.11
While the DARAB proceedings were still pending, HFC
filed a Complaint for Determination and Payment of Just
Compensation with the RTC, praying for a just
compensation of P725,000.00, plus attorneyÊs fees of ten
percent (10%) of the just compensation.12 HFC justified the
direct filing with the SAC by what it saw as unreasonable
delay or official inaction. HFC claimed that the DARAB
disregarded Section 16 of RA 6657 which mandates that
the „DAR shall decide the case within thirty (30) days after
it is submitted for decision.‰13 The

_______________
7 Id., at p. 232.
8 As amended by DAR Administrative Order No. 11, series of 1994.
9 Rollo, pp. 232-233.
10 HFC alleges in its complaint that it filed the petition on January 4,
1996.
11 Rollo, pp. 232-233.
12 Id., at p. 97.
13 Id., at p. 98. Section 16 of RA 6657 pertinently states:
(d)  In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the compensation of
the land by requiring the landowner, the LBP and other

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LBP meanwhile countered that HFCÊs petition was

„premature and lacks [a] cause of action for failure to
[exhaust] administrative remedies[.]‰14
Meanwhile, on May 14, 1998, the DARAB issued a
Decision15 affirming the LBPÊs valuation. The dispositive
portion states:

WHEREFORE, conformably to the foregoing consideration, this

Board hereby AFFIRMS the valuation of P165,739.44 fixed by the
Land Bank of the Philippines on the subject 27.5871-hectare
agricultural landholding.
The Petition dated October 7, 1995 for determination and
payment of Just Compensation filed by the landowner with this
forum is hereby DENIED or ordered dismissed without prejudice
for want of jurisdiction over the same on the part of this forum.16

The RTC Decision

On July 27, 2000, the RTC rendered a Judgment17

whose dispositive portion reads:

WHEREFORE, judgment is hereby rendered by:

1.) Fixing the just compensation of the parcel of land owned by
plaintiff Honeycomb Farms Corp. under TCT No. T-2550 which is
covered by agrarian reform for an area of 27.5871 hectares at
P931,109.20 subject to the lien for the docket fee of the amount in
excess of P725,000.00 as pleaded for by herein plaintiff in its
complaint;

_______________
interested parties to [submit] evidence as to the just compensation for the
land, within fifteen (15) days from the receipt of the notice. After the expiration
of the above period, the matter is deemed submitted for decision. The DAR
shall decide the case within thirty (30) days after it is submitted for decision.
14 Id., at p. 104.
15 Id., at pp. 231-235.
16 Id., at p. 235.
17 Supra note 4.

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2.) Ordering the defendants to pay jointly and severally the

plaintiff an attorneyÊs fee equivalent to 10% of the total just
compensation.18
 Owing to the partiesÊ conflicting valuations, the SAC
made its own valuation and briefly concluded that:

A judicious evaluation of the evidence on record shows that the

subject area is sporadically planted to (sic) coconut and corn as is
not fully develop (sic) when the government conducted its ocular
inspection and thereafter took over possession of the same although
majority of it is a fertile grass land and undisputedly deemed
suitable to agriculture. However, the parcel of land under
consideration is located in the side of the road. It is likewise of
judicial notice that it is situated near the commercial
district of Curvada, Cataingan, Masbate. In the light of the
foregoing premises, the Court is of the opinion and so holds that the
just compensation for the land of herein plaintiff corporation under
TCT No. T-2550 covered by agrarian reform is P32,000.00 per
hectare or P882,787.20 for the area of 27.58571 hectares plus
consequential damages at the same value (P32,000.00) per hectare
for the remaining 1.5095 hectares of the plaintiff Ês property left and
rendered useless by the compulsory coverage or for the total sum of
P931,109.20.19 (emphasis ours)

Both parties appealed to the CA.

HFC argued that the RTC erred in its determination of
just compensation; the amount of P931,109.20 is not
supported by the evidence on record while its presented
evidence correctly shows that the market value of the land
at the time of taking was P113,000.00 per hectare.20
The LBP raised the threshold issue of whether the SAC
had jurisdiction to hear HFCÊs complaint because of the
pending DARAB proceedings, emphasizing that the
completion of

_______________
18 Id., at p. 114.
19 Ibid.
20 Id., at pp. 195-209.

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the administrative proceedings before the DARAB is a

condition precedent for the filing of a complaint for the
determination of just compensation before the SAC. The
LBP also argued that the RTC committed a serious error
when it took judicial notice of the propertyÊs roadside
location, its proximity to a commercial district, its
incomplete development as coconut and corn land, and its
condition as grassland, to determine just compensation;
thereby, it effectively eschewed the formula for fixing just
compensation, provided under DAR Administrative Order
No. 6, series of 1992.21 Lastly, the LBP questioned the
award of consequential damages and attorneyÊs fees for
lack of legal and factual basis.22

The CA Decision

The CA, in its January 28, 2004 Decision, reversed the

RTC Judgment and dismissed HFCÊs complaint for failure
to exhaust administrative remedies that Section 16(f) of RA
6657 requires. The CA ruled that the LBP „made a
procedural [shortcut]‰ when it filed the complaint with the
SAC without waiting for the DARABÊs decision.23
On the LBPÊs motion for reconsideration (to which a copy
of the May 14, 1998 DARAB Decision was attached),24 the
CA, in its Amended Decision of September 16, 2004,
proceeded to decide the case on the merits and recalled its
January 28, 2004 Decision. The dispositive portion of the
Amended Decision reads:

WHEREFORE, in view of the foregoing, Our January 28, 2004

Decision is hereby RECALLED and SET ASIDE and a new one
entered. The assailed decision of the Regional Trial Court of
Masbate, Branch 48 in Civil Case No. 4637 is hereby
REINSTATED

_______________
21 Supra note 8.
22 Rollo, pp. 126-152.
23 Id., at p. 221.
24 Id., at pp. 223-235.

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with MODIFICATION that the award of attorneyÊs fees in favor of

herein plaintiff-appellant is hereby deleted. No costs.25
 The CA ruled that in expropriation proceedings, the just
compensation to which the owner of the condemned
property is entitled to is the market value. It noted that in
order to arrive at the proper market value, several factors
such as the current value of like properties, their actual or
potential uses and their size, shape and location must be
considered. The CA thus concluded that the valuation made
by the RTC was based on the evidence on record since the
latter considered the sketch plan of the property, the
testimonies of the witnesses and the field reports of both
parties. In addition, the CA also deleted the award of
attorneyÊs fees for lack of factual and legal basis.26

The Petition

The LBPÊs petition for review on certiorari raised the

following errors:
First, the CA erred in reinstating the decision of the
SAC since it had no jurisdiction to hear HFCÊs complaint
while the DARAB proceedings were pending. It stressed
that the SAC could not acquire jurisdiction over the
complaint since the DARAB continued to retain jurisdiction
over the determination of just compensation.
Second, the CA failed to dismiss the complaint on the
ground of non-exhaustion of administrative remedies and
forum shopping on the part of HFC. It notes that the HFCÊs
complaint was premature and violative of the forum
shopping prohibition since the complaint was filed with the
SAC despite the pendency of the DARAB proceedings.

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25 Id., at pp. 60-61.
26 Id., at pp. 59-60.

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Lastly, the CA erred when it failed to apply the „basic

formula‰ for determining just compensation prescribed by
DAR Administrative Order No. 6, series of 1992, as
amended by DAR Administrative Order No. 11, series of
1994. It emphasizes that by adopting the values fixed by
the SAC, the CAÊs determination is contrary to: (1) Section
17 of RA 6657 and (2) the rulings of the Court bearing on
the determination of just compensation, in particular, Land
Bank of the Philippines v. Sps. Banal27 where the Court
categorically held that the formula prescribed by the DAR
in Administrative Order No. 6, series of 1992, shall be used
in the valuation of the land.28
HFC prays for the dismissal of the LBPÊs petition on the
following grounds:
First, it submits that the pendency of the DARAB
proceedings has no bearing on the jurisdiction of the SAC
since Section 57 of RA 6657 provides that the SAC has
original and exclusive jurisdiction over petitions for the
determination of just compensation. Conformably with the
dictates of Section 57, litigants can file a case for the
determination of just compensation without the necessity
of a DARAB determination. Second, it argues that
jurisprudence allows resort to judicial intervention without
completing administrative remedies when there has been
unreasonable delay or official inaction, as in this case, on
the part of the administrative agency. Third, for the same
reason, it contends that it cannot be charged with forum
shopping. Finally, it argues that strict adherence to the
formula prescribed by DAR Administrative Order No. 6,
series of 1992, as amended by DAR Administrative Order
No. 5, series of 1994, unduly „ties the hands of the SAC‰ in
the determination of just compensation.29

_______________
27 478 Phil. 701; 434 SCRA 543, 554 (2004).
28 Rollo, pp. 17-55.
29 Id., at pp. 243-255.

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The CourtÊs Ruling

We find the LBPÊs petition meritorious.
The SAC properly acquired jurisdiction
over HFCÊs complaint for the determi-
nation of just compensation despite the
pendency of the DARAB proceedings
At the core of the LBPÊs lack of jurisdiction theory is the
premise that SAC could not acquire jurisdiction over the
complaint since the DARAB continued to retain jurisdiction
over the matter of determination of just compensation.
The premise is erroneous because the DARAB does not
„exercise concurrent jurisdiction with the SAC in just
compensation cases. The determination of just
30
compensation is judicial in nature.‰
„The original and exclusive jurisdiction of the SAC xxx
is not a novel issue‰31 and is in fact, well-settled. In
Republic of the Philippines v. CA,32 we first ruled that it
would subvert the original and exclusive jurisdiction of the
RTC for the DAR to vest original jurisdiction in
compensation cases in administrative officials and make
the RTC an appellate court for the review of administrative
decisions, viz.:

Thus, under the law, the Land Bank of the Philippines is charged
with the initial responsibility of determining the value of lands
placed under land reform and the compensation to be paid for their
taking. Through notice sent to the landowner pursuant to § 16(a) of
R.A. No. 6657, the DAR makes an offer. In case the landowner
rejects the offer, a summary administrative proceeding is held and
afterward the provincial (PARAD), the regional (RARAD) or the

_______________
30 Heirs of Lorenzo and Carmen Vidad v. Land Bank of the Philippines, G.R.
No. 166461, April 30, 2010, 619 SCRA 609, 625.
31 Ibid.
32 331 Phil. 1070; 263 SCRA 758 (1996).

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central (DARAB) adjudicator as the case may be, depending on the

value of the land, fixes the price to be paid for the land. If the
landowner does not agree to the price fixed, he may bring the
matter to the RTC acting as Special Agrarian Court. This in essence
is the procedure for the determination of compensation cases under
R.A. No. 6657. In accordance with it, the private respondentÊs case
was properly brought by it in the RTC, and it was error for the
latter court to have dismissed the case. In the terminology of §57,
the RTC, sitting as a Special Agrarian Court, has „original and
exclusive jurisdiction over all petitions for the determination of just
compensation to landowners.‰ It would subvert this „original and
exclusive‰ jurisdiction of the RTC for the DAR to vest original
jurisdiction in compensation cases in administrative officials and
make the RTC an appellate court for the review of administrative
decisions.33 (citations omitted)

In the recent case of Land Bank of the Philippines v.

Belista,34 we extensively discussed the reasons why the
SAC can properly assume jurisdiction over petitions for the
determination of just compensation despite the pendency of
administrative proceedings, thus:

Sections 50 and 57 of RA No. 6657 provide:

Section 50. Quasi-judicial Powers of the DAR.·The DAR
is hereby vested with primary jurisdiction to determine and
adjudicate agrarian reform matters and shall have exclusive
original jurisdiction over all matters involving the
implementation of agrarian reform, except those falling under
the exclusive jurisdiction of the Department of Agriculture
(DA) and the Department of Environment and Natural
Resources (DENR) x x x
Section 57. Special Jurisdiction.·The Special Agrarian
Court shall have original and exclusive jurisdiction over all
petitions for the determination of just compensation to
landowners, and the prosecution of all criminal offenses
under this Act. x x x

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33 Id., at pp. 1077-1078; pp. 764-765.
34 G.R. No. 164631, June 26, 2009, 591 SCRA 137.

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The Special Agrarian Courts shall decide all appropriate

cases under their special jurisdiction within thirty (30) days
from submission of the case for decision.
Clearly, under Section 50, 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 the DA and the DENR. Further exception to the
DARÊs original and exclusive jurisdiction are all petitions for the
determination of just compensation to landowners and the
prosecution of all criminal offenses under RA No. 6657, which are
within the jurisdiction of the RTC sitting as a Special Agrarian
Court. Thus, jurisdiction on just compensation cases for the taking
of lands under RA No. 6657 is vested in the courts.
In Republic v. CA [G.R. No. 122256, October 30, 1996, 263 SCRA
758], the Court explained:
Thus, Special Agrarian Courts, which are Regional Trial
Courts, are given original and exclusive jurisdiction over two
categories of cases, to wit: (1) „all petitions for the
determination of just compensation to landowners‰ and (2)
„the prosecution of all criminal offenses under [R.A. No.
6657].‰ The provisions of §50 must be construed in harmony
with this provision by considering cases involving the
determination of just compensation and criminal cases for
violations of R.A. No. 6657 as excepted from the plenitude of
power conferred on the DAR. Indeed, there is a reason for this
distinction. The DAR is an administrative agency which
cannot be granted jurisdiction over cases of eminent domain
(for such are takings under R.A. No. 6657) and over criminal
cases. Thus, in EPZA v. Dulay and Sumulong v. Guerrero·we
held that the valuation of property in eminent domain is
essentially a judicial function which cannot be vested in
administrative agencies, while in ScotyÊs Department Store v.
Micaller, we struck down a law granting the then Court of
Industrial Relations jurisdiction to try criminal cases for
violations of the Industrial Peace Act.
In a number of cases, the Court has upheld the original and
exclusive jurisdiction of the RTC, sitting as SAC, over all petitions
for determination of just compensation to landowners in accordance
with Section 57 of RA No. 6657.

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In Land Bank of the Philippines v. Wycoco [G.R. Nos. 140160 and

146733, January 13, 2004, 419 SCRA 67], the Court upheld the
RTCÊs jurisdiction over WycocoÊs petition for determination of just
compensation even where no summary administrative proceedings
was held before the DARAB which has primary jurisdiction over the
determination of land valuation. The Court held:
In Land Bank of the Philippines v. Court of Appeals, the
 landowner filed an action for determination of just
compensation without waiting for the completion of DARABÊs
re-evaluation of the land. This, notwithstanding, the Court
held that the trial court properly acquired jurisdiction
because of its exclusive and original jurisdiction over
determination of just compensation, thus·
⁄ It is clear from Sec. 57 that the RTC, sitting as a
Special Agrarian Court, has „original and exclusive
jurisdiction over all petitions for the determination of
just compensation to landowners.‰ This „original and
exclusive‰ jurisdiction of the RTC would be undermined
if the DAR would vest in administrative officials
original jurisdiction in compensation cases and make
the RTC an appellate court for the review of
administrative decisions. Thus, although the new rules
speak of directly appealing the decision of adjudicators
to the RTCs sitting as Special Agrarian Courts, it is
clear from Sec. 57 that the original and exclusive
jurisdiction to determine such cases is in the RTCs.
Any effort to transfer such jurisdiction to the
adjudicators and to convert the original jurisdiction of
the RTCs into an appellate jurisdiction would be
contrary to Sec. 57 and, therefore, would be void. Thus,
direct resort to the SAC [Special Agrarian Court] by
private respondent is valid.
xxxx
In Land Bank of the Philippines v. Natividad [G.R. No. 127198,
May 16, 2005, 458 SCRA 441], wherein Land Bank questioned the
alleged failure of private respondents to seek reconsideration of the
DARÊs valuation, but instead filed a petition to fix just
compensation with the RTC, the Court said:
At any rate, in Philippine Veterans Bank v. CA, we held
that there is nothing contradictory between the DARÊs
primary

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jurisdiction to determine and adjudicate agrarian reform

matters and exclusive original jurisdiction over all matters
involving the implementation of agrarian reform, which
includes the determination of questions of just compensation,
and the original and exclusive jurisdiction of regional trial
 courts over all petitions for the determination of just
compensation. The first refers to administrative proceedings,
while the second refers to judicial proceedings.
In accordance with settled principles of administrative law,
primary jurisdiction is vested in the DAR to determine in a
preliminary manner the just compensation for the lands
taken under the agrarian reform program, but such
determination is subject to challenge before the courts. The
resolution of just compensation cases for the taking of lands
under agrarian reform is, after all, essentially a judicial
function.
Thus, the trial court did not err in taking cognizance of the
case as the determination of just compensation is a function
addressed to the courts of justice.
In Land Bank of the Philippines v. Celada [G.R. No. 164876,
January 23, 2006, 479 SCRA 495], where the issue was whether the
SAC erred in assuming jurisdiction over respondentÊs petition for
determination of just compensation despite the pendency of the
administrative proceedings before the DARAB, the Court stated
that:
It would be well to emphasize that the taking of property under
RA No. 6657 is an exercise of the power of eminent domain by the
State. The valuation of property or determination of just
compensation in eminent domain proceedings is essentially a
judicial function which is vested with the courts and not with
administrative agencies. Consequently, the SAC properly took
cognizance of respondentÊs petition for determination of just
compensation.35 (Italicization supplied; citations omitted)

Similarly, in Land Bank of the Philippines v. Court of

Appeals,36 whose factual circumstances mirror that of the
pre-

_______________
35 Id., at pp. 143-147.
36 376 Phil. 252; 318 SCRA 144 (1999).

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sent case, we pointedly ruled that the SAC acquired

jurisdiction over the action for the determination of just
compensation even during the pendency of the DARAB
proceedings, for the following reason:

It is clear from Sec. 57 x x x that the RTC, sitting as a Special

Agrarian Court, has „original and exclusive jurisdiction over all
petitions for the determination of just compensation to landowners.‰
This „original and exclusive‰ jurisdiction of the RTC would be
undermined if the DAR would vest in administrative officials
original jurisdiction in compensation cases and make the RTC an
appellate court for the review of administrative decisions. Thus,
although the new rules speak of directly appealing the decision of
adjudicators to the RTCs sitting as Special Agrarian Courts, it is
clear from Sec. 57 that the original and exclusive jurisdiction to
determine such cases is in the RTCs. Any effort to transfer such
jurisdiction to the adjudicators and to convert the original
jurisdiction of the RTCs into an appellate jurisdiction would
be contrary to Sec. 57 and therefore would be void. Thus,
direct resort to the SAC by private respondent is valid.37
(emphasis ours)

To reiterate, the taking of property under RA 6657 is an

exercise of the StateÊs power of eminent domain. „The
valuation of property or determination of just compensation
in eminent domain proceedings is essentially a judicial
function which is vested with the courts and not with
administrative agencies.‰38 Specifically, „[w]hen the parties
cannot agree on the amount of just compensation, only the
exercise of judicial power can settle the dispute with
binding effect on the winning and losing parties.‰39
Thus, in the present case, HFC correctly filed a petition
for the determination of just compensation with the SAC,
which has the original and exclusive jurisdiction in just
compensa-

_______________
37 Id., at pp. 262-263; p. 154.
38 Landbank of the Philippines v. Celada, 515 Phil. 467, 477; 479
SCRA 495, 505 (2006).
39 Heirs of Lorenzo and Carmen Vidad v. Land Bank of the
Philippines, supra note 30, at p. 630.

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tion cases under RA 6657. The DARABÊs valuation, being

preliminary in nature, could not have attained finality, as
only the courts can resolve the issue of just compensation.
Consequently, the SAC properly took cognizance of HFCÊs
petition for determination of just compensation.
We also find no merit in the LBPÊs argument that the
HFC failed to exhaust administrative remedies when it
directly filed a petition for the determination of just
compensation with the SAC even before the DARAB case
could be resolved. In Land Bank of the Phils. v. Wycoco,40
we held that the doctrine of exhaustion of administrative
remedies does not apply when the issue has been rendered
moot and academic.41 In the present case, the issue is now
moot considering that the valuation made by the LBP had
long been affirmed in toto by the DARAB in its May 14,
1998 Decision.
HFC is not guilty of forum shopping
We do not agree with the LBPÊs view that HFC
committed forum shopping.
Forum shopping is the act of litigants who repetitively
avail themselves of multiple judicial remedies in different
fora, simultaneously or successively, all substantially
founded on the same transactions and the same essential
facts and circumstances; and raising substantially similar
issues either pending in or already resolved adversely by
some other court; or for the purpose of increasing their
chances of obtaining a favorable decision, if not in one
court, then in another. The rationale against forum-
shopping is that a party should not be allowed to pursue
simultaneous remedies in two different courts, for to do so
would constitute abuse of court processes which tends to
degrade the administration of justice, wreaks

_______________
40 464 Phil. 83, 97-98, 419 SCRA 67 (2004).
41 Landbank of the Philippines v. Celada, supra note 38, at p. 476; p.
505.

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havoc upon orderly judicial procedure, and adds to the

congestion of the heavily burdened dockets of the courts.42
To determine whether a party violated the rule against
forum shopping, the most important factor to ask is
whether the elements of litis pendentia are present, or
whether a final judgment in one case will amount to
res judicata in another; otherwise stated, the test for
determining forum shopping is whether, in the two (or
more) cases pending, there is identity of parties, rights or
causes of action, and reliefs sought.43
In Yu v. Lim,44 we enumerated the requisites of forum
shopping, as follows:

Forum shopping exists when the elements of litis pendentia are

present or where a final judgment in one case will amount to res
judicata in another. Litis pendentia requires the concurrence of the
following requisites: (1) identity of parties, or at least such parties
as those representing the same interests in both actions; (2) identity
of rights asserted and reliefs prayed for, the reliefs being founded on
the same facts; and (3) identity with respect to the two preceding
particulars in the two cases, such that any judgment that may be
rendered in the pending case, regardless of which party is
successful, would amount to res judicata in the other case.

In the present case, HFC did not commit forum shopping

because the third element of litis pendentia is lacking. As
previously mentioned, the DARABÊs land valuation is only
preliminary and is not, by any means, final and conclusive
upon the landowner or any other interested party. The
courts, in this case, the SAC, will still have to review with
finality the determination, in the exercise of what is
admittedly a judicial

_______________
42 Spouses Daisy and Socrates M. Arevalo v. Planters Development
Bank, et al., G.R. No. 193415, April 18, 2012, 670 SCRA 252, 264.
43 Jesse Yap v. Court of Appeals, (Special Eleventh [11th] Division), et
al., G.R. No. 186730, June 13, 2012, 672 SCRA 419, 428.
44 G.R. No. 182291, September 22, 2010, 631 SCRA 172, 184.

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function.45 Thus, it becomes clear that there is no identity

between the two cases such that a judgment by the
DARAB, regardless of which party is successful, would
amount to res judicata in the case before the SAC.
It has been held that „[w]hat is essential in determining
the existence of forum-shopping is the vexation caused the
courts and litigants by a party who asks different courts
and/or administrative agencies to rule on similar or related
causes and/or grant the same or substantially similar
reliefs, in the process creating the possibility of conflicting
decisions being rendered upon the same issues.‰46 In the
present case, the evil sought to be prevented by the
prohibition on forum shopping, i.e., the possibility of
conflicting decisions, is lacking since the DARAB
determination is merely preliminary and is not binding on
the parties; such determination is subject to challenge
before the courts. The law, in fact, allows the landowner to
file a case for the determination of just compensation with
the SAC without the necessity of first filing the same with
the DARAB. Based on these considerations, it is clear that
the HFC cannot be charged with forum shopping.
To determine just compensation, the
SAC must take into consideration the
factors prescribed by Section 17 of
RA 6657 and is obliged to apply the
DAR formula
The CA, in affirming the SACÊs valuation and
disregarding that of the LBP, briefly held:

In the instant case, the trial court based its valuation of the
property at P32,000.00 per hectare on the evidence submitted by
the

_______________
45 Heirs of Lorenzo and Carmen Vidad v. Land Bank of the Philippines,
supra note 30, at p. 629.
46 Spouses Daisy and Socrates M. Arevalo v. Planters Development Bank, et
al., supra note 42.

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parties, such as the sketch plan of the property, the testimonies of

witnesses, and the field investigation reports of both parties. Hence,
herein litigants cannot claim that the valuation made by the court
was not based on the evidence on record.47

The LBP maintains that the SAC committed serious

error when it failed to apply the „basic formula‰ for
determining just compensation, prescribed by DAR
Administrative Order No. 6, series of 1992, as amended by
DAR Administrative Order No. 11, series of 1994. It
emphasizes that by adopting the values fixed by the SAC,
the CAÊs determination is contrary to Section 17 of RA 6657
and the applicable rulings of the Court bearing on the
determination of just compensation, which require that the
basic formula prescribed by the DAR shall be used in the
valuation of the land.
We agree with the LBP. In Land Bank of the Philippines
v. Honeycomb Farms Corporation,48 a recent case with
substantially the same factual antecedents and the same
respondent company, we categorically ruled that the CA
and the RTC grievously erred when they disregarded the
formula laid down by the DAR, and chose instead to come
up with their own basis for the valuation of the land in
question, viz.:

That it is the RTC, sitting as a SAC, which has the power to

determine just compensation for parcels of land acquired by the
State, pursuant to the agrarian reform program, is made clear in
Section 57 of RA 6657, which reads:
Section 57. Special Jurisdiction.·The Special Agrarian
Courts shall have original and exclusive jurisdiction over all
petitions for the determination of just compensation to
landowners, and the prosecution of all criminal offenses
under this Act. The Rules of Court shall apply to all
proceedings before the Special Agrarian Courts unless
modified by this Act.

_______________
47 Rollo, p. 60.
48 G.R. No. 169903, February 29, 2012, 667 SCRA 255.

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The Special Agrarian Courts shall decide all appropriate

cases under their special jurisdiction within thirty (30) days
from submission of the case for decision.
To guide the RTC in this function, Section 17 of RA 6657
enumerates the factors that have to be taken into consideration to
accurately determine just compensation. This provision states:
Section 17. Determination of Just Compensation.·In
determining just compensation, the cost of acquisition of the
land, the current value of like properties, its nature, actual
use and income, the sworn valuation by the owner, the tax
declarations, and the assessment made by government
assessors, shall be considered. The social and economic
benefits contributed by the farmers and the farm workers 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.
In Land Bank of the Philippines v. Sps. Banal, we recognized
that the DAR, as the administrative agency tasked with the
implementation of the agrarian reform program, already came up
with a formula to determine just compensation which incorporated
the factors enumerated in Section 17 of RA 6657. We said:
These factors [enumerated in Section 17] have been
translated into a basic formula in DAR Administrative Order
No. 6, Series of 1992, as amended by DAR Administrative
Order No. 11, Series of 1994, issued pursuant to the DAR's
rule-making power to carry out the object and purposes of
R.A. 6657, as amended.
In Landbank of the Philippines v. Celada, we emphasized the
duty of the RTC to apply the formula provided in the applicable
DAR AO to determine just compensation, stating that:
While [the RTC] is required to consider the acquisition cost
of the land, the current value of like properties, its nature,
actual use and income, the sworn valuation by the owner, the
tax declaration and the assessments made by the government
assessors to determine just compensation, it is equally true
that these factors have been translated into a basic formula
by the DAR pursuant to its rule-making power under Section
49 of R.A. No. 6657. As the government agency principally
tasked

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Land Bank of the Philippines vs. Honeycomb Farms Corporation

to implement the agrarian reform program, it is the DARÊs

duty to issue rules and regulations to carry out the object of
the law. [The] DAR [Administrative Order] precisely „filled in
the details‰ of Section 17, R.A. No. 6657 by providing a basic
formula by which the factors mentioned therein may be taken
into account. The [RTC] was at no liberty to disregard the
formula which was devised to implement the said provision.
It is elementary that rules and regulations issued by
administrative bodies to interpret the law which they are
entrusted to enforce, have the force of law, and are entitled to
great respect. Administrative issuances partake of the nature
of a statute and have in their favor a presumption of legality.
As such, courts cannot ignore administrative issuances
especially when, as in this case, its validity was not put in
issue. Unless an administrative order is declared invalid,
courts have no option but to apply the same.
We reiterated the mandatory application of the formula in the
applicable DAR administrative regulations in Land Bank of the
Philippines v. Lim, Land Bank of the Philippines v. Heirs of
Eleuterio Cruz, and Land Bank of the Philippines v. Barrido. In
Barrido, we were explicit in stating that:
While the determination of just compensation is
essentially a judicial function vested in the RTC acting as a
Special Agrarian Court, the judge cannot abuse his discretion
by not taking into full consideration the factors specifically
identified by law and implementing rules. Special Agrarian
Courts are not at liberty to disregard the formula laid
down in DAR A.O. No. 5, series of 1998, because unless
an administrative order is declared invalid, courts
have no option but to apply it. The courts cannot ignore,
without violating the agrarian law, the formula provided by
the DAR for the determination of just compensation.
These rulings plainly impose on the RTC the duty to
apply the formula laid down in the pertinent DAR
administrative regulations to determine just
compensation. Clearly, the CA and the RTC acted with
grievous error when they disregarded the formula laid down
by the DAR, and chose instead to come up with their own
basis for the valuation of the subject land. [Italicization
supplied; emphases ours]

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As the law now stands, it is clear that the SAC is duty

bound to take into consideration the factors fixed by
Section 17 of RA 6657 and apply the basic formula
prescribed and laid down in the pertinent administrative
regulations, in this case, DAR Administrative Order No. 6,
series of 1992, as amended by DAR Administrative Order
No. 11, series of 1994, to determine just compensation. In
the present case, we thus find no difficulty in concluding
that the CA and the RTC, acting as a SAC, seriously erred
when they effectively eschewed the basic formula
prescribed by the DAR regulations and chose instead to
come up with their own basis for the valuation of the land
in question.
The SAC cannot take judicial notice
of the nature of land in question
without the requisite hearing
Separately from disregarding the basic formula
prescribed by the DAR, it has also not escaped our notice
that the SAC also erred in concluding that the subject land
consisting of 29.0966 hectares is commercial in nature,
after taking judicial notice that it is „situated near the
commercial district of Curvada, Cataingan, Masbate.‰49 In
Land Bank of the Philippines v. Honeycomb Farms
Corporation,50 we categorically ruled that the parties must
be given the opportunity to present evidence on the nature
of the property before the court a quo can take judicial
notice of the commercial nature of a portion of the subject
landholding, thus:

While the lower court is not precluded from taking judicial notice
of certain facts, it must exercise this right within the clear
boundary provided by Section 3, Rule 129 of the Rules of Court,
which provides:
Section 3. Judicial notice, when hearing necessary.·
During the trial, the court, on its own initiative, or on request

_______________
49 Rollo, p. 114.
50 Supra note 48.

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Land Bank of the Philippines vs. Honeycomb Farms Corporation

of a party, may announce its intention to take judicial notice

of any matter and allow the parties to be heard thereon.
After the trial, and before judgment or on appeal, the
proper court, on its own initiative, or on request of a party,
may take judicial notice of any matter and allow the parties
to be heard thereon if such matter is decisive of a material
issue in the case.
The classification of the land is obviously essential to the
valuation of the subject property, which is the very issue in the
present case. The parties should thus have been given the
opportunity to present evidence on the nature of the property before
the lower court took judicial notice of the commercial nature of a
portion of the subject landholdings. As we said in Land Bank of the
Phils. v. Wycoco [464 Phil. 83, 97-98 (2004)]:
The power to take judicial notice is to be exercised by courts
with caution especially where the case involves a vast tract of
land. Care must be taken that the requisite notoriety exists;
and every reasonable doubt on the subject should be promptly
resolved in the negative. To say that a court will take judicial
notice of a fact is merely another way of saying that the usual
form of evidence will be dispensed with if knowledge of the
fact can be otherwise acquired. This is because the court
assumes that the matter is so notorious that it will not be
disputed. But judicial notice is not judicial knowledge. The
mere personal knowledge of the judge is not the judicial
knowledge of the court, and he is not authorized to make his
individual knowledge of a fact, not generally or professionally
known, the basis of his action. [Italicization supplied]

The present case must be remanded to the

court of origin for the determination of just
ompensation in accordance Section 17 of
RA 6657 and applicable DAR regulations
In Land Bank of the Philippines v. Sps. Banal,51 we
remanded the case to the SAC for further reception of
evidence

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51 Supra note 27.

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because the trial court based its valuation upon a different

formula and did not conduct any hearing for the reception
of evidence.52
The mandatory application of the aforementioned
guidelines in determining just compensation has been
reiterated recently in Land Bank of the Philippines v.
Lim,53 Land Bank of the Philippines v. Heirs of Eleuterio
Cruz,54 and Land Bank of the Philippines v. Honeycomb
Farms Corporation,55 where we also ordered the remand of
the cases to the SAC for the determination of just
compensation, strictly in accordance with the applicable
DAR regulations.56
As we are not a trier of facts, we thus find that a remand
of this case is necessary in order for the SAC to determine
just compensation, strictly in accordance with Section 17 of
RA 6657 and applicable DAR regulations, in particular,
DAR Administrative Order No. 6, series of 1992, as
amended by DAR Administrative Order No. 11, series of
1994.
WHEREFORE, premises considered, the petition is
hereby GRANTED. The assailed Amended Decision dated
September 16, 2004 and Resolution dated November 25,
2004 of the Court of Appeals in CA-G.R. CV No. 69661 are
REVERSED and SET ASIDE. Special Civil Case No. 4637
is REMANDED to the Regional Trial Court of Masbate,
Masbate, Branch 48, for the determination of just
compensation, based on Section 17 of Republic Act No.
6657 and the applicable administrative orders of the
Department of Agrarian Reform.
No pronouncement as to costs.

_______________
52 Heirs of Lorenzo and Carmen Vidad v. Land Bank of the
Philippines, supra note 30, at p. 639.
53 G.R. No. 171941, August 2, 2007, 529 SCRA 129.
54 G.R. No. 175175, September 29, 2008, 567 SCRA 31.
55 Supra note 48.
56 Heirs of Lorenzo and Carmen Vidad v. Land Bank of the
Philippines, supra note 30 at p. 639.

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SO ORDERED.

Carpio (Chairperson), Del Castillo, Perez and Perlas-

Bernabe, JJ., concur.

Petition granted, judgment and resolution reversed and

set aside.

Notes.·Courts which have not been designated as

Special Agrarian Courts cannot hear just compensation
cases just because the lands subject of such cases happen to
be within their territorial jurisdiction. (Land Bank of the
Philippines vs. Villegas, 616 SCRA 626 [2010])
In determining just compensation, the cost of the
acquisition of the land, the current value of like properties,
its nature, actual use and income, the sworn valuation by
the owner, the tax declarations, and the assessment made
by government assessors shall be considered. (Department
of Agrarian Reform vs. Heirs of Angel T. Domingo, 667
SCRA 716 [2012])
··o0o··

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