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APO FRUITS CORPORATION and HIJO PLANTATION, INC., Petitioners, vs.THE HON. COURT OF APPEALS and LAND BANK OF THE PHILIPPINES, Respondents.CHICO-NAZARIO, J.:FACTS:

Apo Fruits Corporation (AFC) and Hijo Plantation, Inc. (HPI) are the registered owners of five parcels of agricultural lands located in San Isidro, Tagum, Davao Province

AFC and HPI voluntarily offered to sell the above parcels of land to the government. After the initial processing at the Department of Agrarian Reform (DAR) of the Voluntary Offer to Sell (VOS) application of AFC and HPI, it was referred to the Land Bank of the Philippines (LBP) for initial valuation. AFC and HPI received separately from the DAR’s Provincial Agrarian Reform Officer (PARO) of Davao province a notice of land acquisition and valuation, informing AFC that the value of the properties has been placed at P86,900,925.88 or P165,484.47 per hectare while HPI’s properties were valued at P164,478,178.14. Both AFC and HPI considered the valuations unreasonably low and inadequate as just compensation for the properties.

AFC rejected the valuation for both TCTs No. T-113366 and No.113359. AFC applied for the shifting of the mode of acquisition for TCT No. 113359 from VOS to Voluntary Land Transfer/Direct Payment Scheme. HPI also rejected the valuation of its three parcels of land covered by TCTs No. T-10361, No. T-10362 and No. T-10363.

Owing to the rejection by both AFC and HPI of LBP’s valuation, the DAR requested LBP to deposit the amounts equivalent to their valuations in the names and for the accounts of AFC and HPI. AFC thereafter withdrew the amount of P26,409,549.86, while HPI withdrew the amount of P45,481,706.76, both in cash from LBP. The DAR PARO then directed the Register of Deeds of Davao to cancel the TCTs of AFC and HPI to the said properties and to issue a new one in the name of the Republic of the Philippines.

After the issuance of the certificate of title in the name of the Republic of the Philippines, the Register of Deeds of Davao, upon the request of the DAR, issued TCTs and Certificates of Land Ownership Award to qualified farmer-beneficiaries.

RTC BR. 2 TAGUM CITY AFC and HPI filed separate complaints for determination of just compensation with the DAR

Adjudication Board (DARAB). Despite the lapse of more than three years from the filing of the complaints, the DARAB failed and refused to render a decision on the valuation of the land. Hence, two complaints for determination and payment of just compensation were filed by AFC and HPI before Branch 2 of the Regional Trial Court (RTC) of Tagum City (acting as a Special Agrarian Court), which were subsequently consolidated.

Summons was served to defendants DAR and LBP. The trial court appointed as Commissioners persons it considered competent, qualified and disinterested to determine the proper valuation of the properties.

DAR and LBP submitted their Answer The pre-trial order issued by the trial court reads: This Court will determine the all-embracing concept

of Just Compensation, and whether the plaintiff is entitled to damages, and also whether the value of the land and improvements as determined by the Land Valuation of Land Bank for the determination of just compensation, and whether the plaintiff has violated Section 13 of DARAB new rules and procedure.

The commissioners conducted an ocular inspection The court-appointed commissioners submitted their appraisal report. The case was considered submitted for decision. After hearing, the trial court rendered a decision fixing the just compensation for the 1,388.6027

hectares of lands and its improvements owned by the plaintiffs AFC and HPI as follows:1. Ordering P1,383,179,000.00) to be paid jointly and severally to Plaintiffs (AFC and HPI) by the

Defendants (DAR and LBP);2. Ordering Defendants to pay Plaintiffs interests on the above-fixed amount from the date of the

taking until fully paid, deducting the amount of the previous payment which plaintiffs received as/and from the initial valuation;

3. Ordering Defendants to pay jointly and severally the Commissioners’ fees herein taxed as part of the costs pursuant to Section 12, Rule 67 of the 1997 Rules of Civil Procedure, equivalent to, and computed at Two and One-Half (2 ½) percent of the determined and fixed amount;

4. Ordering Defendants to pay jointly and severally the attorney’s fees to plaintiffs equivalent to, and computed at ten (10%) Percent of the determined and fixed amount plus interest from date of taking until the full amount is fully paid;

5. Ordering Defendants to deduct from the total amount fixed the initial payment paid to the plaintiffs;

6. Ordering Defendants to pay the costs of the suit; and7. Ordering Defendants to pay all the aforementioned amounts thru The Clerk of Court of this Court.

LBP filed a Motion for Reconsideration mainly on the ground that the trial court based its valuation on the value of residential and industrial lands in the area forgetting that the lands involved are agricultural. LBP also sought a reconsideration of the award of attorney’s fees, the interest on the compensation over the lands and the order of the trial court regarding the payment of commissioners’ fees.

In an Order, the trial court modified its decision as follows: 2. Ordering Defendants to pay plaintiffs, interest at the rate of Twelve (12%) Percent per annum on

the above-fixed amount of fair, reasonable and just compensation computed from the time the complaint was filed until the finality of this decision. After this decision becomes final and executory, the rate of TWELVE (12%) PERCENT per annum shall be additionally imposed on the total obligation until payment thereof is satisfied, deducting the amounts of the previous payments by Defendant-LBP received as initial valuation;

3. Ordering Defendants to pay jointly and severally the Commissioners’ fees herein taxed as part of the costs pursuant to Section 12, Rule 67 of the 1997 Rules of Civil Procedure, equivalent to, and computed at Two and One-Half (2 ½) percent of the determined and fixed amount;

4. Ordering Defendants to pay jointly and severally the attorney’s fees to plaintiffs equivalent to, and computed at ten (10%) Percent of the determined and fixed amount.

Except for the above-stated modifications, the consolidated decision stands and shall remain in full force and effect in all other respects thereof.

From this Order, LBP filed a Notice of Appeal which was granted. Subsequently, the trial court, citing this Court’s ruling in the case of "Land Bank of the Philippines v. De

Leon," that a petition for review, not an ordinary appeal, is the proper mode of appeal from a decision on the determination of just compensation rendered by a special agrarian court, issued an Order recalling its Order and directed LBP to file a Petition for Review within the reglementary period. LBP filed a Motion for Reconsideration claiming that the case of Land Bank of the Philippines v. De Leon

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was not yet final at that time; hence, it is not certain whether the decision in that case would have a retroactive effect and that appeal is the appropriate remedy. This was denied by the trial court in its Order.

COURT OF APPEALS LBP filed a Petition for Certiorari (CA-G.R. SP NO. 76222) before the Court of Appeals assailing the

orders of the trial court. The Court of Appeals found the petition of LBP meritorious. In a decision, the Court of Appeals granted

the petition and the assailed orders were NULLIFIED and, accordingly, SET ASIDE. AFC and HPI filed a joint Motion for Reconsideration which the Court of Appeals denied in its

Resolution.

Earlier, DAR filed its own separate petition before the Court of Appeals by way of a Petition for Review (CA-G.R. SP NO. 74879). In a Resolution , the Court of Appeals dismissed the petition for failure to state the material dates under Rule 42, Section 2, of the Rules of Court .

a. The appellate court held: The importance of stating the material dates cannot be overemphasized. It is only through a statement thereof in the petition can it be determined whether or not the petition was filed on time. For its failure to state the material dates, the petition can and should be outrightly dismissed.x x x x

b. The petition is also defective in that it failed to attach material portions of the record as would support the allegations in the petition. More specifically, copies of the alleged motion for reconsideration filed by the DAR, the order denying it, and the notice of appeal were not attached to the petition.

The Decision became final and executory and entry of judgment was issued by the appellate court.

SUPREME COURT On the other hand, from the decision of the Court of Appeals in the Petition filed by LBP, AFC and HPI

filed the Petition for Review on Certiorari

ISSUES:1. Whether or not the filing by LBP of the Petition for Certiorari is already barred by res judicata2. Whether or not the ruling of the SC in the Arlene De Leon Case, giving only prospective effect to its

earlier resolution as to the proper mode of appeal from decisions of Special Agrarian Courts, is applicable in the instant case

RULING: AFC and HPI pray that the Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 76222 be

reversed and set aside and that the Decision of the RTC in Agrarian Cases be declared as final and executory.

WHEREFORE, premises considered, the instant Petition is PARTIALLY GRANTED. While the Decision, dated 12 February 2004, and Resolution, dated 21 June 2004, of the Court of Appeals in CA-G.R. SP No. 76222, giving due course to LBP’s appeal, are hereby AFFIRMED, this Court, nonetheless, RESOLVES, in consideration of public interest, the speedy administration of justice, and the peculiar circumstances of the case, to give DUE COURSE to the present Petition and decide the same on its merits. Thus, the

Decision, dated 25 September 2001, as modified by the Decision, dated 5 December 2001, of the Regional Trial Court of Tagum City, Branch 2, in Agrarian Cases No. 54-2000 and No. 55-2000 is AFFIRMED. No costs.SO ORDERED.MINITA V. CHICO-NAZARIOAssociate Justice

1. NO. The following are the elements of res judicata:

a. The former judgment must be final;b. The court which rendered judgment must have jurisdiction over the parties and the subject

matter;c. It must be a judgment on the merits; andd. There must be between the first and second actions identity of parties, subject matter, and

cause of action. In this case, the third element of res judicata, i.e., that the former judgment must be on the merits, is

not present. It must be remembered that the dismissal of CA-G.R. SP No. 74879 was based on technicality, that is, for failure on the part of the DAR to state material dates required by the rules. Having been dismissed based on a technicality and not on the merits, the principle of res judicata does not apply. Res judicata applies only where judgment on the merits is finally rendered on the first.

2. NO. In the case of Land Bank of the Philippines v. De Leon, decided on 10 September 2002,

o respondents are the registered owners of a parcel of land. They voluntarily offered the subject property for sale to the government. Unable to agree on the valuation offered by the DAR, respondents filed a petition with the RTC to fix the just compensation. In due time, the RTC rendered judgment fixing the compensation of the property.

o Before the Court of Appeals, the DAR and LBP filed separate petitions. The DAR filed a Petition for Review of the decision of the RTC. LBP raised the case on appeal to the Court of Appeals by way of ordinary appeal.

o The petition of the DAR was given due course. On the other hand, the Court of Appeals dismissed LBP’s ordinary appeal on the ground that the same was erroneous.

o LBP filed a petition for review before this Court. In Land Bank, we explained: A petition for review, not an ordinary appeal, is the proper procedure in effecting an appeal from decisions of the Regional Trial Courts acting as Special Agrarian Courts in cases involving the determination of just compensation to the landowners concerned. Section 60 of RA 6657 clearly and categorically states that the said mode of appeal should be adopted. There is no room for a contrary interpretation. Where the law is clear and categorical, there is no room for construction, but only application.

o LBP filed a Motion for Reconsideration. In a Resolution of this Court dated 20 March 2003, this Court emphasized the prospective application of the Decision dated 10 September 2002, that a petition for review is the correct mode of appeal from decisions of Special Agrarian Courts shall apply only to cases appealed after the finality of this Resolution.

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o Essentially therefore, the rule is that a decision of the RTC acting as a Special Agrarian Court should be brought to the Court of Appeals via a Petition for Review. The Court of Appeals will no longer entertain ordinary appeals thereon. However, this rule applies only after the finality of the Resolution of this Court in Land Bank of the Philippines v. De Leon dated 20 March 2003.

In this case, the Court of Appeals correctly ruled when it gave due course to the appeal of LBP. LBP’s Notice of Appeal was filed on 27 December 2001. This was given due course by the RTC in an Order dated 15 May 2002. LBP’s appeal was, thus, perfected before this Court’s Resolution in the aforementioned Land Bank of the Philippines v. De Leon case. Hence, the Court of Appeals could give due course to LBP’s petition.