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SPS. JOSE M. ESTACION v. SECRETARY

FACTS:

Spouses Jose M. Estacion, Jr. and Angelina T. Estacion filed a petition for just compensation with the RTC of Negros Oriental, claiming ownership of two parcels of land covered by the Operation Land Transfer program of P.D. No. 27. Despite their protest, the properties were awarded to tenants without compensation. The DAR and LBP filed a motion to dismiss, but the RTC dismissed the case stating lack of jurisdiction. The Court of Appeals affirmed the dismissal. The petitioners argued that the motions to dismiss were prohibited pleadings, they were the absolute owners of the properties, and the RTC had jurisdiction to determine just compensation and annul the sheriff's sale. The DAR argued that the case was correctly dismissed and the petitioners failed to exhaust administrative remedies. PNB argued that the properties were not covered by agrarian laws. The Supreme Court denied the petition stating that P.D. No. 946 did not apply and the SAC had jurisdiction to determine just compensation. The petitioners also failed to exhaust administrative remedies.

ISSUES:

  1. Whether P.D. No. 946, which prohibits the filing of a motion to dismiss, is applicable to the case.

  2. Whether the petitioners have the legal personality to file the petition for the determination of just compensation.

  3. Whether the Special Agrarian Court (SAC) has exclusive and original jurisdiction to determine just compensation in land acquisition cases.

  4. Whether the petitioners are required to exhaust administrative remedies before filing a case for just compensation in the SAC.

RULING:

  1. P.D. No. 946 is not applicable to the case. The jurisdiction over the subject matter is determined by the law in force at the time of the commencement of the action. Since the petitioners filed their case in 1995, R.A. No. 6657, which created the Special Agrarian Courts (SACs) and provided for the application of the Rules of Court to SAC proceedings, is the applicable law. Under the Rules of Court, a motion to dismiss is not prohibited. Even if P.D. No. 946 were applicable, the rule prohibiting a motion to dismiss is not inflexible and allows for exceptions. In this case, the filing of the motions to dismiss did not unduly delay the disposition of the case and actually brought to light the flaws in the petition for just compensation.

  2. The petitioners do not have the legal personality to file the petition for the determination of just compensation. The properties sought to be compensated for were already transferred to respondent PNB and eventually to the government. The petitioners mortgaged the properties to respondent PNB, and when the mortgage was foreclosed, ownership of the properties passed on to PNB. Furthermore, Executive Order No. 407 directed the transfer of government-owned and -controlled corporation landholdings to the Department of Agrarian Reform. Therefore, the petitioners have no standing to seek just compensation since ownership and title to the properties have already passed on to PNB and the State.

  3. The SAC has exclusive and original jurisdiction to determine just compensation in land acquisition cases. Section 57 of R.A. No. 6657 provides that the SAC 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.

  4. The petitioners are not required to exhaust administrative remedies before filing a case for just compensation in the SAC. The determination of just compensation is a judicial function vested in the RTC acting as SAC. The SAC is not an appellate reviewer of the DAR decision in administrative cases involving compensation.

PRINCIPLES:

  • Jurisdiction over the subject matter is determined by the law in force at the time of the commencement of the action.

  • The Rules of Court apply to proceedings before the Special Agrarian Courts, unless modified by R.A. No. 6657.

  • The prohibition on the filing of a motion to dismiss under P.D. No. 946 may be disregarded if it would result in the resolution of the case on its merits.

  • The consolidated ownership of properties defeats the legal personality of a petitioner to seek determination of just compensation.

  • A certificate of title is merely evidence of ownership and does not equate to ownership itself.

  • The determination of just compensation is essentially a judicial function vested in the RTC acting as SAC. It cannot be lodged with administrative agencies such as the DAR.

  • The jurisdiction of the SAC vested by Section 57 of R.A. No. 6657 is limited to petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The SAC does not have the power to determine the validity of extrajudicial foreclosure of mortgages.