FIRST DIVISION

[G.R. No. 138839. May 9, 2002]

LAURA SARNE, LORENZO JAUGAN, LOWENA ABANG-JAUGAN, PEDRO JAUGAN, and JENELYN SUSTIN-JAUGAN, petitioners, vs. HON. VIVIAN O. MAQUILING, as Provincial Adjudicator of the DAR Adjudication Board, Dumaguete City, FELISA RAFAL, ESTRELLA R. ELNASIN, CIPRIANO RAFAL, OSCAR RAFAL, and ROMANA RAFAL, respondents.

D E C I S I O N

PUNO, J.:

This is an appeal from the Resolution[1] of the Court of Appeals dated November 26, 1998, in CA-G.R. SP No. 48838 denying the petition for certiorari filed by herein petitioners.

On February 17, 1998, private respondents filed a complaint[2] for redemption and damages against petitioners before the Department of Agrarian Reform Adjudication Board (DARAB), Office of the Provincial Adjudicator, Dumaguete City, docketed as DARAB Case No. VII-54-NO-98. In their complaint, they alleged that as tenants of the subject parcel of land, they have the right of preemption and redemption pursuant to Sections 11 and 12 of R.A. No. 3844 otherwise known as the Code of Agrarian Reform, viz.:

"2. During his lifetime, Jose Rafal together with his wife Romana Rafal, herein complainant, were tenants of a portion (1/3 of a hectare more or less) of a parcel of land located at Lutoban, Zamboanguita, Negros Oriental, identified as Lot No. 104-A of the Zamboanguita Cadastre, being a portion of Lot No. 104 and covered by Original Certificate of Title No. FV-22917, owned by respondent Laura Sarne;

3. Prior to January 29, 1997, respondent Laura Sarne mortgaged the same tenanted portion aforesaid to its (sic) tenants Jose Rafal and Romana Rafal for the amount of EIGHT THOUSAND PESOS (P8,000.00). x x x

4. On January 29, 1997, Laura Sarne offered to sell, and in fact sold, the area tenanted by Jose Rafal and Romana Rafal to complainant Romana Rafal for the total amount of P68,000.00. The parties agreed that the payment for the area sold shall be by installment: P34,000.00 shall be paid on January 29, 1997; and the remaining balance of P34,000.00 shall be paid on March 20, 1997, at which time the Final Deed of Sale shall be executed. x x x

5. When complainant Romana Rafal was about to tender the balance of the purchase price, respondent Laura Sarne declined to accept the same, and said she still has to consult her children;

6. To complainants' surprise and wonder, they came to know thereafter, that respondent Laura Sarne is no longer interested to accept the balance as she has already sold the entire lot (including complainants' cultivation) to the respondents herein;

7. Under the law, there was already consummated a contract of sale between complainants and respondent Laura Sarne;

8. Complainants' retained attorney sent a letter to Laura Sarne dated April 16, 1997, demanding the latter to accept the balance of the purchase price. However, no response came from the end of Laura Sarne. x x x

x x x x x x

10. For having agreed to sell and in fact sold the aforesaid area cultivated and for having likewise accepted the half price of the consideration thereof, there already existed a valid and consummated contract of sale between the parties;

11. On April 11, 1997, respondent Laura Sarne and the respondent Juagans entered into a contract of sale involving, inter alia, the tenanted area aforesaid, in complete contravention of the contract of sale previously entered into by and between herein complainants and respondent Laura Sarne. x x x x x x

12. As tenants, complainants have the right of preemption and the right of redemption over the subject tenanted lot in accordance with Sections 11 and 12 of the Code of Agrarian Reform (R.A. No. 3844, as amended). And should redemption be the feasible remedy, redemption price should be the reasonable and just price that the Honorable Board fixes;

13. In as much as complainants have already tendered half of the purchase price, redemption should only consist on the balance due the respondent Laura Sarne; x x x x x x

P R A Y E R

WHEREFORE, the Honorable Board is most respectfully prayed that after due notice and hearing judgment shall issue in complainants' favor:

1. Ordering the redemption by complainants of the subject lot at a price originally agreed upon by the complainants and respondent Laura Sarne;

2. Canceling the Deed of Sale in so far as it involves and relates to the subject tenanted lot;

3. Ordering the respondents to execute the proper deed of conveyance in favor of the complainants; x x x x x x"

On March 5, 1998, petitioners Jaugans filed their "Arguments to Support Special Defense of Lack of Jurisdiction"[3] alleging that another case involving the same nature and subject of the action, i.e., DARAB Case No. VII-115-NO-97, was previously dismissed for lack of jurisdiction after the Provincial Adjudicator found that the land in question was not under the administration and disposition of the Department of Agrarian Reform and the Land Bank of the Philippines; that said order has become final for failure of private respondents to appeal therefrom; that the first and second cases involve the same cause of action; that the change in the title of the action for "Redemption and Damages" and the addition of new defendants in the second case will not change the nature of the action; that the second case was denominated as one for "redemption" in order to make it appear as an agrarian case; and that the tenancy relationship was terminated when the subject lot was mortgaged to private respondent Romana Rafal as creditor.

The same defense was raised in the Answer[4] filed by petitioners Jaugans wherein it was additionally alleged that as a mortgagee of the land, private respondent Romana Rafal ceased to be a tenant and became a creditor who enjoyed the produce of the land without sharing with the landowner; and that there is non-joinder of a real party-in-interest because a portion of the land has been donated to the Municipality of Zamboanguita, Negros Oriental.

In her Answer[5], petitioner Sarne alleged that while private respondent Romana Rafal and her husband Jose Rafal were tenants of the subject lot, they ceased to be tenants and became creditors when the subject lot was mortgaged to them. It was further alleged that the purported sale was only partially consummated because private respondent Romana Rafal failed to pay the balance of P34,000.00 when it fell due in March, 1997 and continuously failed to pay until April 10, 1997; and that private respondent Romana Rafal told petitioner Sarne to look for another buyer and requested for reimbursement of what she has paid in advance. By way of special and affirmative defenses, petitioner Sarne likewise raised the defenses of the Jaugans, i.e., lack of jurisdiction, that private respondent Romana Rafal as creditor-mortgagee of the land in question can no longer be considered a tenant, and non-joinder of a real party-in-interest.

On May 27, 1998, public respondent Provincial Adjudicator Vivian O. Maquiling issued an Order declaring that it has jurisdiction over the complaint for redemption and damages, to wit:

"The present action filed by complainants is anchored on a right of preemption and/or redemption as alleged tenants of the subject lot pursuant to Sections 11 and 12 of Republic Act 3844 as amended. Although the instant complaint being raised by plaintiffs involves the same parties as well as subject matter, the cause of action however, is entirely different from the first case which was earlier dismissed.

The DARAB New Rules of Procedure in Rule II, Section 1 paragraph (e), on the Jurisdiction of the DAR Adjudication Board explicitly provides:

"e) Those involving the sale, alienation, mortgage, foreclosure, preemption and redemption of agricultural lands under the coverage of the CARP or other agrarian laws;"

Complainants' cause of action clearly falls within the phrase "other agrarian laws" which includes Sections 11 and 12 of Republic Act 3844, as amended by Republic Act 6389 outlining the provisions on Preemption and Redemption.

It is also worthwhile to emphasize, that the dismissal by this Adjudicator of the complaint for Annulment of Sale filed by plaintiffs, was by reason of the fact that the sale between respondent Jaugans and co-respondent Sarne is not the kind of sale contemplated under Section 1, paragraph (c) of the DARAB New Rules of Procedure."[6]

Their motion for reconsideration having been denied, petitioners filed a petition for certiorari before the Court of Appeals which issued the questioned resolution denying their petition. In upholding the jurisdiction of the DARAB, the appellate court held that although the subject land is not under the administration and disposition of the DAR, the fact that it is agricultural land brings it under the coverage of CARP. As such, it ruled that the Provincial Adjudicator has jurisdiction over the complaint for redemption pursuant to Rule II, Section 1, par. (2) of the DARAB New Rules of Procedure which confers jurisdiction in the DARAB over "those involving the sale, alienation, mortgage, foreclosure, preemption and redemption of agricultural lands under the coverage of the CARP or other agrarian laws."

Hence, this appeal. Petitioners contend in the main that the complaint for redemption is not an agrarian case but is one for specific performance as it seeks to compel petitioners to accept the alleged balance of the purchase price and therefore it should be filed with the regular courts. Even assuming arguendo that it is an agrarian case, petitioners aver that the issue involves the determination of just compensation and is within the exclusive jurisdiction of the Regional Trial Court acting as a Special Agrarian Court, under Section 57 of Republic Act 6