Sharp International Marketing vs. Court of Appeals

A writ of mandamus will not issue to compel a government official to sign a deed of sale where the law requires that official’s consent as an exercise of discretion, and the official’s signature is indispensable to the perfection of the contract. The LBP President’s duty under R.A. 6657 to approve the compensation amount involves review and evaluation, not ministerial action.

The Comprehensive Agrarian Reform Law (R.A. 6657) charged the Land Bank of the Philippines with compensating landowners for lands acquired under the program, in amounts agreed upon by the landowner, the Department of Agrarian Reform, and the LBP. The controversy arose from a proposed acquisition of the Garchitorena estate, where the offer price was enormously inflated above the recent acquisition cost, and the LBP withheld its consent to the transaction.

• Property and Initial Acquisition: The Garchitorena estate, comprising eight parcels in Camarines Norte with an aggregate area of 1,887.819 hectares, was covered by a Contract to Sell dated 27 April 1988 between United Coconut Planters Bank (UCPB) and petitioner Sharp International Marketing for P3,183,333.33, convertible into a Deed of Absolute Sale upon full payment.
• Offer to the Government: On 14 May 1988, before acquiring title, petitioner through its president Alex Lina offered to sell the land to the Government for P56 million (later raised to P65 million) under CARP. The offer was processed by several agencies; the Bureau of Land Acquisition and Distribution recommended acquisition at approximately P35,532.70 per hectare, or roughly P67 million.
• Petitioner’s Purchase and Registration: On 1 December 1988, UCPB executed a Deed of Absolute Sale in favor of Sharp for the stipulated price of P3,183,333.33. Title was registered in petitioner’s name on 6 December 1988.
• DAR Action: On 27 December 1988, DAR and LBP created a Compensation Clearing Committee (CCC) to expedite processing. The next day, the CCC recommended acquisition for P62,725,077.29. On 29 December 1988, DAR Secretary Philip Ella Juico issued an order directing acquisition at that amount and requiring LBP to pay 30% in cash and the balance in government financial instruments.
• Execution of Deed Without LBP: On 9 January 1989, Secretary Juico and petitioner Lina signed a Deed of Absolute Sale. That same day, LBP received a copy of the acquisition order.
• LBP’s Refusal: On 17 January 1989, LBP Executive Vice President Jesus Diaz signed the CCC worksheet with reservations. LBP President Deogracias Vistan, noting the reservations and that Sharp had acquired the land for only P3.1 million, requested Secretary Juico to reconsider the 29 December order. Juico sought the opinion of the Secretary of Justice. On 3 February 1989, Vistan informed Juico that LBP would not pay the purchase price. The Secretary of Justice opined on 12 March 1989 that the DAR Secretary’s compensation decision was not final if seasonably questioned in court; otherwise, it became binding after 15 days.
• Reassessment and Mandamus Petition: Sharp repeatedly demanded payment. Juico informed Lina on 7 April 1989 that DAR and LBP had dispatched a team to reassess the land. Sharp thereafter filed a petition for mandamus with the Supreme Court on 18 April 1989. Juico subsequently issued an order for reappraisal by a private appraiser, finding P62 million “definitely too high” in view of the original purchase price and comparable land values. Criminal charges were filed by the Ombudsman against the principal actors.

• Finality of Valuation: Petitioner argued that the DAR Secretary’s valuation had become final and binding, as it had not been seasonably questioned in court, and that the Secretary of Justice’s opinion confirmed its binding effect, leaving LBP with no choice but to comply.
• Mandamus Proper: Petitioner maintained that the LBP President’s duty to sign the deed was purely ministerial because the DAR Secretary, acting under presidential authority, had already fixed the compensation; thus, mandamus should compel the ministerial act of signing.
• Validity and Perfection of Sale: Petitioner contended that the sale was valid and perfected, that the Government was bound by the signed Deed of Absolute Sale, and that LBP could not unilaterally refuse to perform its obligation.
• Presidential Authority and Estoppel: Petitioner asserted that Secretary Juico exercised authority by delegation of the President’s constitutional power of control, and that the Government was estopped from repudiating his official acts.

• Discretionary, Not Ministerial, Duty: Respondents countered that under Section 18 of R.A. 6657, the LBP’s approval of the compensation amount involved a high degree of discretion. The disbursement of P62 million in public funds could not be reduced to a ministerial act; the LBP is mandated to review and evaluate the deed.
• No Perfected Contract: Respondents argued that without the LBP President’s signature, the Deed of Absolute Sale was incomplete and produced no binding effect. The consent of the LBP as an indispensable party was absent; thus, no contract was perfected.
• Illegality of the Transaction: Respondent Court of Appeals held that the sale was null and void ab initio for violating Section 6 of R.A. 6657, which was in force when the transaction was entered into.
• Unconscionable Price and Anomaly: The enormous discrepancy between the acquisition cost of P3 million and the proposed compensation of P62 million, coupled with the highly irregular timing, indicated a fraudulent scheme, justifying LBP’s refusal.

• Availability of Mandamus: Whether a writ of mandamus may issue to compel the LBP President to sign the Deed of Absolute Sale dated 9 January 1989.
• Nature of LBP’s Duty: Whether the LBP President’s function to approve and sign the deed of sale is ministerial or discretionary.
• Perfection of Contract: Whether a perfected contract of sale existed between the Government and petitioner absent the LBP President’s signature.

• Availability of Mandamus: Mandamus did not lie because the legal right asserted was not clear and certain and the duty sought to be enforced was not purely ministerial. A writ of mandamus cannot issue to control discretion; it may compel action but not a specific action. The petition was properly dismissed.
• Nature of LBP’s Duty: The LBP President’s function under Section 18 of R.A. 6657 is discretionary. The provision requires that compensation be in an amount “agreed upon by the landowner and the DAR and the LBP.” The LBP is not a mere rubber stamp; its review and evaluation of the deed are integral to determining the “amount to be established by the government,” as required by E.O. 229. Because the law requires transmittal of the signed deed to LBP for review and approval, its decision involves judgment and cannot be compelled by mandamus.
• Perfection of Contract: No perfected contract existed. The Deed of Absolute Sale signed by the DAR Secretary and petitioner was incomplete absent LBP’s signature. LBP’s consent is an indispensable element of the government’s agreement; without it, no binding legal right arose upon which a mandamus petition could rest.

• Mandamus and Discretionary Functions — A writ of mandamus will not issue to control or review the exercise of discretion by a public officer. It can compel action only where the duty is purely ministerial, not where the law imposes a duty involving the exercise of judgment. The legal right of the petitioner must be well-defined, clear, and certain, and the corresponding duty of the respondent must be equally clear and specific.
• LBP’s Role in CARP Compensation — Under Section 18 of R.A. 6657, the Land Bank of the Philippines is an essential party in fixing just compensation for lands acquired under CARP. Its signature on a deed of absolute sale signifies its consent and is not a mere formality. The LBP’s review and evaluation of the compensation amount are discretionary acts, and without its concurrence, no amount is “established by the government” as contemplated by law. Consequently, a deed signed only by the DAR Secretary and the landowner does not create a perfected contract of sale.
• Government Not Estopped by Erroneous Acts — The Government is never estopped from questioning the erroneous or irregular acts of its officials, especially when public funds are concerned.

• “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.” — The controlling maxim limiting mandamus to ministerial duties.
• “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.” — Explains the LBP’s indispensable discretionary role in the compensation framework.
• “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.” — States the legal nullity resulting from lack of LBP consent.
• “The decent tiling 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…” — Expresses the Court’s strong reprobation of petitioner’s conduct.

• Association of Small Landowners in the Phil. v. Sec. of Agrarian Reform, 175 SCRA 343 — Cited for the settled principle that mandamus will not lie to control discretion.
• National Marketing Corporation v. Cloribel, 131 Phil. Reports 924 — Applied to reinforce the rule that mandamus does not issue to enforce contractual obligations under a disputed contract that has failed of perfection and is alleged illegal and against public policy.
• B.P. Homes, Inc. v. National Water Resources Council, 154 SCRA 88; Mata v. San Diego, 63 SCRA 170 — Reiterated that mandamus will not control discretionary, non-ministerial duties.
• Enriquez v. Bidin, 47 SCRA 183; Orencia v. Enrile, 55 SCRA 580; Dionisio v. Paterno, 103 SCRA 342; Lemi v. Valencia, 26 SCRA 203; Aquino v. Mariano, 129 SCRA 532 — Cited to establish the requisites that the legal right and corresponding duty must be clear and specific for mandamus to issue.

• Section 18, Republic Act No. 6657 (Comprehensive Agrarian Reform Law of 1988) — Provides that the LBP shall compensate the landowner in an amount agreed upon by the landowner, the DAR, and the LBP, in accordance with the prescribed criteria, or as finally determined by the court. The Court construed this as requiring the LBP’s concurrence as an indispensable element of the compensation agreement, not a mere ministerial signing.
• Section 6, Executive Order No. 229 — Referred to by the Court of Appeals and endorsed by the Supreme Court as requiring an amount “established by the government.” Without LBP’s participation, no such government-established amount exists.
• Administrative Order No. 5, Series of 1988 (DAR-LBP Operational Guidelines) — Mandates the LBP to review and evaluate the deed of absolute sale transmitted by the DAR, confirming the discretionary nature of the LBP’s function.

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