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Supreme Court of the Philippines

278 Phil. 312

FIRST DIVISION
G.R. No. 93661, September 04, 1991
SHARP INTERNATIONAL MARKETING, PETITIONER,
VS. HON. COURT OF APPEALS (14TH DIVISION), LAND
BANK OF THE PHILIPPINES AND DEOGRACIAS
VISTAN, RESPONDENTS.
DECISION
CRUZ, J.:

This case involves the aborted sale of the Garchitorena estate to the Government
in connection with the Comprehensive Agrarian Reform Program.  This opinion
is not intended as a pre-judgment of the informations that have been filed with the
Sandiganbayan for alleged irregularities in the negotiation of the said transaction. 
We are concerned here only with the demand of the petitioner that the private
respondents sign the contract of sale and thus give effect thereto as a perfected
agreement.  For this purpose, we shall determine only if the challenged decision of
the Court of Appeals denying that demand should be affirmed or reversed.
The subject-matter of the proposed sale is a vast estate consisting of eight parcels
of land situated in the municipality of Garchitorena in Camarines Norte and with
an area of 1,887.819 hectares.  The record shows that on April 27, 1988, United
Coconut Planters Bank (UCPB) entered into a Contract to Sell the property to
Sharp International Marketing, the agreement to be converted into a Deed of
Absolute Sale upon payment by the latter of the full purchase price of
P3,183,333.33.  On May 14, 1988, even before it had acquired the land, the
petitioner, through its President Alex Lina, offered to sell it to the Government
for P56,000,000.00, (later increased to P65,000,000.00).  Although the land was
still registered in the name of UCPB, the offer was processed by various
government agencies during the months of June to November, 1988, resulting in
the recommendation by the Bureau of Land Acquisition and Distribution in the
Department of Agrarian Reform for the acquisition of the property at a price of
P35,532.70 per hectare, or roughly P67,000,000.00.  On December 1, 1988, a
Deed of Absolute Sale was executed between UCPB and Sharp by virtue of which
the former sold the estate to the latter for the stipulated consideration of
P3,183,333.33.  The property was registered in the name of the petitioner on
December 6, 1988.  On December 27, 1988, DAR and the Land Bank of the
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Philippines created a Compensation Clearing Committee (CCC) to expedite

processing of the papers relating to the acquisition of the land and the preparation
of the necessary deed of transfer for signature by the DAR Secretary and the LBP
President.  The following day, the CCC held its first meeting and decided to
recommend the acquisition of the property for P62,725,077.29.  The next day,
December 29, 1988, DAR Secretary Philip Ella Juico issued an order directing the
acquisition of the estate for the recommended amount and requiring LBP to pay
the same to Sharp, 30% in cash and the balance in government financial
instruments negotiable within 30 days from issuance by Sharp of the
corresponding muniments of title.

On January 9, 1989, Secretary Juico and petitioner Lina signed the Deed of
Absolute Sale.  On that same day, the LBP received a copy of the order issued by
Secretary Juico on December 29, 1988.  On January 17, 1989, LBP Executive Vice
President Jesus Diaz signed the CCC evaluation worksheet but with indicated
reservations.  For his part, LBP President Deogracias Vistan, taking into account
these reservations and the discovery that Sharp had acquired the property from
UCPB for only P3.1 million, requested Secretary Juico to reconsider his December
29, 1988 order.  Secretary Juico then sought the opinion of the Secretary of Justice
as to whether the LBP could refuse to pay the seller the compensation fixed by the
DAR Secretary.  Meantime, on February 3, 1989, Vistan informed Juico that LBP
would not pay the stipulated purchase price.  The reply of the Justice Department
on March 12, 1989, was that the decision of the DAR Secretary fixing the
compensation was not final if seasonably questioned in court by any interested
party (including the LBP); otherwise, it would become final after 15 days from
notice and binding on all parties concerned, including the LBP, which then could
not refuse to pay the compensation fixed.  Reacting to Sharp's repeated demands
for payment, Juico informed Lina on April 7, 1989, that DAR and LBP had
dispatched a team to inspect the land for re-assessment.  Sharp then filed on April
18, 1989, a petition for mandamus with this Court to compel the DAR and LBP to
comply with the contract, prompting Juico to issue the following order:
Since the whole property of 1,887 hectares was acquired by Claimant
for a consideration of P3 M, the buying price per hectare then was only
about P1,589.83.  It is incomprehensible how the value of land per
hectare in this secluded Caramoan Peninsula can go so high after a
short period of time.  The increase is difficult to understand since the
land is neither fully cultivated nor has it been determined to possess
special and rich features or potentialities other than agricultural
purposes.

We cannot fail to note that the value of land under CARP, particularly in
the most highly developed sections of Camarines Sur, ranges from
P18,000.00 to P27,000 per hectare.

In view of the above findings of fact, the value of P62,725,077.29 is

definitely too high as a price for the property in question.

However, in order to be fair and just to the landowner, a re-evaluation

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of the land in question by an impartial and competent third party shall

be undertaken.  For this purpose, a well known private licensed
appraiser shall be commissioned by DAR.

WHEREFORE, premises considered, Order is hereby issued for the

reappraisal and re-evaluation of the subject property.  For that purpose,
DAR shall avail of the services of Cuervo and Associates to undertake
and complete the appraisal of the subject property within 60 days from
date of this Order.

On April 26, 1989, this Court referred the petition to the Court of Appeals, which
dismissed it on October 31, 1989.  In an exhaustive and well-reasoned decision
penned by Justice Josue M. Bellosillo,[1] it held that mandamus did not lie because
the LBP was not a mere rubber stamp of the DAR and its signing of the Deed of
Absolute Sale was not a merely ministerial act.  It especially noted the failure of
the DAR to take into account the prescribed guidelines in ascertaining the just
compensation that resulted in the assessment of the land for the unconscionable
amount of P62 million notwithstanding its original acquisition cost of only P3
million.  The decision also held that the opinion of the Secretary of Justice applied
only to compulsory acquisition of lands, not to voluntary agreements as in the
case before it.  Moreover, the sale was null and void ab initio because it violated
Section 6 of RA 6657, which was in force at the time the transaction was entered
into.

The petitioners are now back with this Court, this time to question the decision of
the Court of Appeals on the following grounds:
The Court of Appeals seriously erred in including in its Decision
findings of facts which are not borne by competent evidence.

The Court of Appeals erred in holding that the valuation made on the
Garchitorena estate has not yet become final.

The Court of Appeals erred in holding that the opinion of the Secretary
of Justice is not applicable to the case at bar.

The Court of Appeals erred in holding that herein petitioner is not

entitled to a writ of mandamus.
The Court of Appeals erred in holding that the sale of Garchitorena
estate from UCPB in favor of the petitioner is void.

The Court of Appeals erred in holding that the P62 million is not a just
compensation.

We need not go into each of these grounds as the basic question that
need only to be resolved is whether or not the petitioners are entitled to
a writ of mandamus to compel the LBP President Deogracias Vistan to
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sign the Deed of Absolute Sale dated January 9, 1989.

It is settled that mandamus is not available to control discretion.  The writ

may issue to compel the exercise of discretion but not the discretion
itself.  Mandamus can require action only but not specific action where the act
sought to be performed involves the exercise of discretion.[2]
Section 18 of RA 6657 reads as follows:

Sec. 18.  Valuation and mode of compensation. — The LBP shall compensate
the landowner in such amount as may be agreed upon by the landowner
and the DAR and the LBP, in accordance with the criteria provided for in
Secs. 16 and 17, and other pertinent provisions hereof, or as may be
finally determined by the court, as the just compensation for the land.  x
x x.  (Italics supplied).

We agree with the respondent court that the act required of the LBP President is
not merely ministerial but involves a high degree of discretion.  The compensation
to be approved was not trifling but amounted to as much as P62 million of public
funds, to be paid in exchange for property acquired by the seller only one month
earlier for only P3 million.  The respondent court was quite correct when it
observed:

As may be gleaned very clearly from EO 229, the LBP is an essential

part of the government sector with regard to the payment of
compensation to the landowner.  It is, after all, the instrumentality that
is charged with the disbursement of public funds for purposes of
agrarian reform.  It is therefore part, an indispensable cog, in the
governmental machinery that fixes and determines the amount
compensable to the landowner.  Were LBP to be excluded from that
intricate, if not sensitive, function of establishing the compensable
amount, there would be no amount "to be established by the
government" as required in Sec. 6, EO 229.  This is precisely why the
law requires the DAS, even if already approved and signed by the DAR
Secretary, to be transmitted still to the LBP for its review, evaluation and
approval.

It needs no exceptional intelligence to understand the implications of

this transmittal.  It simply means that if LBP agrees on the amount
stated in the DAS, after its review and evaluation, it becomes its duty to
sign the deed.  But not until then.  For, it is only in that event that the
amount to be compensated shall have been "established" according to
law.  Inversely, if the LBP, after review and evaluation, refuses to sign, it
is because as a party to the contract it does not give its consent thereto. 
This necessarily implies the exercise of judgment on the part of LBP,
which is not supposed to be a mere rubber stamp in the exercise. 
Obviously, were it not so, LBP could not have been made a distinct
member of PARC, the super body responsible for the successful
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implementation of the CARP.  Neither would it have been given the

power to review and evaluate the DAS already signed by the DAR
Secretary.  If the function of the LBP in this regard is merely to sign the
DAS without the concomitant power of review and evaluation, its duty
to "review/evaluate" mandated in Adm. Order No. 5 would have been a
mere surplusage, meaningless, and a useless ceremony.

Thus, in the exercise of such power of review and evaluation, it results

that the amount of P62,725,077.29 being claimed by petitioner is not
the "amount to be established by the government." Consequently, it
cannot be the amount that LBP is by law bound to compensate
petitioner.

Under the facts, SHARP is not entitled to a writ of mandamus.  For, it is

essential for the writ to issue that the plaintiff has a legal right to the
thing demanded and that it is the imperative duty of the defendant to
perform the act required.  The legal right of the plaintiff to the thing
demanded must be well-defined, clear and certain.  The corresponding
duty of the defendant to perform the required act must also be clear
and specific (Enriquez v. Bidin, L-29620, October 12, 1972, 47 SCRA
183; Orencia v.  Enrile, L-28997, February 22, 1974, 55 SCRA 580;
Dionisio v. Paterno, 103 SCRA 342; Lemi v. Valencia, 26 SCRA 203; Aquino
v. Mariano, 129 SCRA 532).

Likewise, respondents cannot be compelled by a writ of mandamus to discharge a

duty that involves the exercise of judgment and discretion, especially where
disbursement of public funds is concerned.  It is established doctrine that
mandamus will not issue to control the performance of discretionary, non-
ministerial, duties, that is, to compel a body discharging duties involving the
exercise of discretion to act in a particular way or to approve or disapprove a
specific application (B.F. Homes, Inc. v. National Water Resources Council, L-78529,
Sept. 17, 1987; 154 SCRA 88).  Mandamus will not issue to control or review the
exercise of discretion by a public officer where the law imposes upon him the right
or duty to exercise judgment in reference to any matter in which he is required to
act (Mata v. San Diego, L-30447, March 21, 1975; 63 SCRA 170).

Even more explicit is R.A. 6657 with respect to the indispensable role of LBP in
the determination of the amount to be compensated to the landowner.  Under
Sec. 18 thereof, "the LBP shall compensate the landowner in such amount as may
be agreed upon by the landowner and the DAR and LBP, in accordance with the
criteria provided in Secs. 16 and 17, and other pertinent provisions hereof, or as
may be finally determined by the court, as the just compensation for the land."

Without the signature of the LBP President, there was simply no contract between
Sharp and the Government.  The Deed of Absolute Sale dated January 9, 1989,
was incomplete and therefore had no binding effect at all.  Consequently, Sharp
cannot claim any legal right thereunder that it can validly assert in a petition for
mandamus.
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In National Marketing Corporation v. Cloribel,[3] this Court held:

... the action for mandamus had no leg to stand on because the writ was
sought to enforce alleged contractual obligations under a disputed
contract — disputed not only on the ground that it had failed of
perfection but on the further ground that it was illegal and against
public interest and public policy ...

The petitioner argues that the LBP President was under obligation to sign the
agreement because he had been required to do so by Secretary Juico, who was
acting by authority of the President in the exercise of the latter's constitutional
power of control.  This argument may be dismissed with only a brief comment.  If
the law merely intended LBP's automatic acquiescence to the DAR Secretary's
decision, it would not have required the separate approval of the sale by that body
and the DAR.  It must also be noted that the President herself, apparently
disturbed by public suspicion of anomalies in the transaction, directed an inquiry
into the matter by a committee headed by former Justice Jose Y. Feria of this
Court.  Whatever presumed authority was given by her to the DAR Secretary in
connection with the sale was thereby impliedly withdrawn.

It is no argument either that the Government is bound by the official decisions of

Secretary Juico and cannot now renege on commitment.  The Government is
never estopped from questioning the acts of its officials, more so if they are
erroneous, let alone irregular.[4]

Given the circumstances attending the transaction which plainly show that it is not
merely questionable but downright dishonest, the Court can only wonder at the
temerity of the petitioner in insisting on its alleged right to be paid the questioned
purchase price.  The fact that criminal charges have been filed by the Ombudsman
against the principal protagonists of the sale has, inexplicably, not deterred or
discomfited it.  It does not appear that the petitioner is affected by the revelation
that it offered the property to the Government even if it was not yet the owner at
the time; acquired it for P3 million after it had been assured that the sale would
materialize; and sold it a month later for the bloated sum of P62 million, to earn a
gross profit of P59 million in confabulation with some suspect officials in the
DAR.  How the property appreciated that much during that brief period has not
been explained.  What is clear is the public condemnation of the transaction as
articulated in the mass media and affirmed in the results of the investigations
conducted by the Feria Fact-Finding Committee, the Senate House Joint
Committee on Agrarian Matters, and the Office of the Ombudsman.
It would seem to the Court that the decent thing for the petitioner to do, if only in
deference to a revolted public opinion, was to voluntarily withdraw from the
agreement.  Instead, it is unabashedly demanding the exorbitant profit it would
derive from an illegal and unenforceable transaction that ranks as one of the most
cynical attempts to plunder the public treasury.

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The above rulings render unnecessary discussion of the other points raised by the
petitioner.  The Court has given this petition more attention than it deserves.  We
shall waste no more time in listening to the petitioner's impertinent demands. 
LBP President Deogracias Vistan cannot be faulted for refusing to be a party to
the shameful scheme to defraud the Government and undermine the
Comprehensive Agrarian Reform Program for the petitioner's private profit.  We
see no reason at all to disturb his discretion.  It merits in fact the nation's
commendation.

WHEREFORE, the petition is DENIED, with costs against the petitioner.  It is

so ordered.

Narvasa, (Chairman), Griño-Aquino, and Medialdea, JJ., concur.

[1] With Marigomen and Sempio-Diy, JJ., concurring.

[2] Association
of Small Landowners in the Phil. v. Sec. of Agrarian Reform, 175 SCRA 343
citing Lambs v. Phipps, 22 Phil. 456.
[3] 131 Phil. Reports 924.
[4] Republic
v. Aquino, 120 SCRA 186; Republic v. Phil. Rabbit Bus Lines, Inc., 32 SCRA
211; Luciano v. Estrella, 34 SCRA 269.

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