LAND BANK OF THE PHILIPPINES v.

LEONILA CELADA FACTS: Celada owns an agricultural land, 60% of which was identified in 1998 by the Department of Agrarian Reform (DAR) as suitable for compulsory acquisition under the Comprehensive Agrarian Reform Program (CARP). Upon indorsement to it for field investigation and valuation, Land Bank valued the said land at P299,569.61. DAR offered the same amount to Celada as just compensation. Celada, however, rejected the offer. The matter was then referred to the DAR Adjudication Board (DARAB) for summary administrative hearing on the determination of just compensation. During the pendency of the DARAB case, Celada filed a petition for judicial determination of just compensation, alleging that the current market value of her land was at least P2,129,085.00. In its answer, Land Bank raised the affirmative defense of non-exhaustion of administrative remedies. It contended that Celada must first await the outcome of the DARAB case before taking any judicial recourse. Meanwhile, the DARAB Provincial Adjudicator affirmed the valuation made by Land Bank. Thereafter, the Special Agrarian Court (SAC), where Celadas petition was filed, rendered judgment fixing the value of the land at P354,847.50, finding that Celadas evidence showed that the neighboring lands of similar classification were paid higher than what was quoted by Land Bank. It denied Land Banks affirmative defense. The Court of Appeals dismissed Land Banks appeal. Land Bank maintains that the SAC erred in assuming jurisdiction over Celadas petition for judicial determination of just compensation despite the pendency of the administrative proceedings before the DARAB. It also contends that the SAC erred in fixing the just compensation of the land based on the valuation of neighboring lands instead of its actual land use. ISSUES: 1.) Whether or not the SAC erred in assuming jurisdiction over the petition for judicial determination of just compensation pending administrative proceedings before the DARAB; 2.) Whether or not the SAC erred in fixing the just compensation of the land based on the valuation of neighboring lands

HELD: The petition is GRANTED. SAC correctly assumed jurisdiction over determination of just compensation The SAC did not err in assuming jurisdiction over the petition for determination of just compensation despite the pendency of the administrative proceedings before the DARAB. As the Court held in Land Bank of the Philippines v. Court of Appeals, the RTC, sitting as a SAC, 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 DAR would vest in administrative officials original jurisdiction in compensation cases and make the RTC an appellate court for the review of administrative decision. Although the new rules speak of directly appealing the decision of adjudicators to the RTCs sitting as SACs, the original and exclusive jurisdiction to determine such cases is in the RTCs. It should be emphasized that the taking of property under the CARP is an exercise of the power of eminent domain by the State. The valuation of property or determination of just compensation is a judicial function. Thus, the SAC properly took cognizance of Celadas petition for determination of just compensation. SAC erred in fixing just compensation based on valuation of neighboring lands The SAC, however, erred in setting aside Land Banks valuation of the land on the sole basis of the higher valuation given for neighboring properties. It did not apply the DAR valuation formula which considers capitalized net income, comparable sales and market value per tax declaration as components of land value.