REVOLUTIONARY KIND OF EXPROPRIATION

Association of Small Landowners in the Philippines vs. Secretary

of Agrarian Reform(G.R. No. 78742, En Banc, 14 July 1989)
"What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands
whenever found and of whatever kind as long as they are in excess
of the maximum retention limits allowed their owners. This kind of
expropriation is intended for the benefit not only of a particular
community or of a small segment of the population but of the entire
Filipino nation, from all levels of our society, from the impoverished
farmer to the land-glutted owner. . ."

C.

- J. Isagani Cruz
[W]e do not deal here with the traditional exercise of
the power of eminent domain. This is not an ordinary
expropriation where only a specific property of relatively
limited area is sought to be taken by the State from its owner
for a specific and perhaps local purpose. What we deal with
here is a revolutionary kind of expropriation.
The expropriation before us affects all private
agricultural lands wherever found and of whatever kind as
long as they are in excess of the maximum retention limits
allowed their owners. This kind of expropriation is intended
for the benefit not only of a particular community or of a small
segment of the population but of the entire Filipino nation,
from all levels of our society, from the impoverished farmer to
the land-glutted owner. Its purpose does not cover only the
whole territory of this country but goes beyond in time to the
foreseeable future, which it hopes to secure and edify with
the vision and the sacrifice of the present generation of
Filipinos. Generations yet to come are as involved in this
program as we are today, although hopefully only as
beneficiaries of a richer and more fulfilling life we will
guarantee to them tomorrow through our thoughtfulness
today. And, finally, let it not be forgotten that it is no less than
the Constitution itself that has ordained this revolution in the
farms, calling for a just distribution among the farmers of
lands that have heretofore been the prison of their dreams
but can now become the key at last to their deliverance.

I.

death or permanent incapacity of the agricultural lessee to work his

landholding, the leasehold shall continue between the agricultural
lessor and the person who can cultivate the landholding personally,
chosen by the agricultural lessor within one month from such death or
permanent incapacity, from among the following: (a) the surviving
spouse; (b) the eldest direct descendant by consanguinity; or (c) the
next eldest descendant or descendants in the order of their age:
Provided, That in case the death or permanent incapacity of the
agricultural lessee occurs during the agricultural year, such choice shall
be exercised at the end of that agricultural year: Provided, further, That
in the event the agricultural lessor fails to exercise his choice within the
periods herein provided, the priority shall be in accordance with the
order herein established.

RA 3844

Abolished share tenancy relationship and provided for the

expropriation of certain agricultural lands for resale to
qualified beneficiaries.

A. Security of Tenure
Section 7. Tenure of Agricultural Leasehold Relation - The
agricultural leasehold relation once established shall confer upon the
agricultural lessee the right to continue working on the landholding until
such leasehold relation is extinguished. The agricultural lessee shall be
entitled to security of tenure on his landholding and cannot be ejected
therefrom unless authorized by the Court for causes herein provided.
B.
Section 9. Agricultural Leasehold Relation Not
Extinguished by Death or Incapacity of the Parties - In case of

Grounds to Dispossess (SEC 36)

Failure to substantially comply with terms and conditions

unless by fortuitous events.

Planting of crops or use land for other purpose than that

agreed

Failure to adopt proven farm practices to conserve land

Fault or negligence resulting in substantial damage

Does not pay rental when dueo

SC: willfull and deliberate AND must have lasted at

least 2 years (PD 816)

Employed a sublessee

Sta Ana vs. Sps. Carpo: It is a fundamental rule in this jurisdiction that
for non-payment of lease rentals to warrant the dispossession and
ejectment of a tenant, the same must be made in a willful and
deliberate manner (Cabero v. Caturna, et al., CA). For a valid ouster or
ejectment of a farmer-tenant, the willful and deliberate intent not to pay
lease rentals and/or share can be ascertained when there is a
determination of will not to do a certain act.
Considering the circumstances obtaining in this case, it cannot be
concluded that the defendants-appellants deliberately failed or refused
to pay their lease rentals. It was not the fault of defendants-appellants
herein that the rentals did not reach the plaintiffs-appellees because
the latter choose to lend a deaf ear to the notices sent to them. Clearly,
therefore plaintiffs-appellees failed to show by substantial evidence that
the defendants-appellants deliberately failed or refused to pay their
lease rentals. It has been held that the mere failure of a tenant to pay
the landowners share does not necessarily give the latter the right to
eject the former when there is lack of deliberate intent on the part of the
tenant to pay (Roxas y Cia v. Cabatuando, 1 SCRA 1106).
Natividad vs Mariano: In the present petition, we do not find the
respondents alleged non-payment of the lease rentals sufficient to
warrant their dispossession of the subject property. The respondents
alleged non-payment did not last for the required two-year period. To
reiterate our discussion above, the respondents rental payments were
not yet due and the respondents were not in default at the time Ernesto
filed the petition for ejectment as Ernesto failed to prove his alleged
prior verbal demands. Additionally, assuming arguendo that the
respondents failed to pay the lease rentals, we do not consider the
failure to be deliberate or willful. The receipts on record show that the

respondents had paid the lease rentals for the years 1988-1998. To be
deliberate or willful, the non-payment of lease rentals must be absolute,
i.e., marked by complete absence of any payment. This cannot be said
of the respondents case. Hence, without any deliberate and willful
refusal to pay lease rentals for two years, the respondents ejectment
from the subject property, based on this ground, is baseless and
unjustified.
D. Period of Redemption
In its disquisition, the DARAB held that absence of written notice to the
tenant of the sale, as well as to the DAR, is indispensable, particularly
in view of Sec. 12 of Republic Act No. 3844, as amended by Republic
Act No. 6389, which mandates that the 180-day period must be
reckoned from the notice in writing upon registration of the sale.
Sec. 12 of Republic Act No. 3844 or the Agricultural Land Reform Code
of 1963, as amended by Republic Act No. 6389, otherwise known as
the Code of Agrarian Reforms of the Philippines, provides:

Sec. 12. Lessees right of redemption. In case the landholding is

sold to a third person without the knowledge of the agricultural
lessee, the latter shall have the right to redeem the same at a
reasonable price and consideration: Provided, That where there are
two or more agricultural lessees, each shall be entitled to said right of
redemption only to the extent of the area actually cultivated by
him. The right of redemption under this Section may be exercised
within one hundred eighty days from notice in writing which
shall be served by the vendee on all lessees affected and the
Department of Agrarian Reform upon the registration of the sale,
and shall have priority over any other right of legal
redemption. The redemption price shall be the reasonable price of the
land at the time of the sale. (emphasis supplied)
Po vs Tambal: The admitted lack of written notice on Dampal and the
DAR thus tolled the running of the prescriptive period. Petitioners
contention that Dampal must be considered to have had constructive
knowledge thereof fails in light of the express requirement for notice to
be in writing.

III. CARL, as amended

1. Agricultural activity vis--vis raising of livestock
Luz Farms vs. DAR: The main issue in this petition is the
constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No. 6657 (the
Comprehensive Agrarian Reform Law of 1988), insofar as the said law
includes the raising of livestock, poultry and swine in its coverage as
well as the Implementing Rules and Guidelines promulgated in
accordance therewith.
SC: Sec 3(b) is unconstitutional.
Industrial, commercial and residential lands are not covered by the
CARL. While Sec 4 of RA 6657 provides that the CARL shall cover all
public and private agricultural lands, the term agri lands does not
include lands classified as mineral, forest, residential, commercial or
industrial.

Lands devoted to raising livestock, poultry have been

classified as industrial, not agricultural, lands and thus exempt from
agrarian reform. The raising of livestock, swine and is different from
crop or tree farming. It is an industrial, not an agricultural, activity. A
great portion of the investment in this enterprise is in form of industrial
fixed assests. DAR has no power to regulate livestock farms which
have been exempted by the Constitution from the coverage of agrarian
reform.
2. Definition of agricultural land
Alangilan v. Office of President: It is beyond cavil that the Alangilan
landholding was classified as agricultural, reserved for residential in
1982, and was reclassified as residential-1 in 1994. However, contrary
to petitioner's assertion, the term reserved for residential does not
change the nature of the land from agricultural to non-agricultural. As
aptly explained by the DAR Secretary, the term reserved for residential
simply reflects the intended land use. It does not denote that the
property has already been reclassified as residential, because the
phrase reserved for residential is not a land classification category.
Indubitably, at the time of the effectivity of the CARL in 1988, the
subject landholding was still agricultural. This was bolstered by the fact
that the Sangguniang Panlalawigan had to pass an Ordinance in 1994,
reclassifying the landholding as residential-1. If, indeed, the
landholding had already been earmarked for residential use in 1982, as
petitioner claims, then there would have been no necessity for the
passage of the 1994 Ordinance.
3. Agrarian Dispute
Isidro v. CA
- Private resp is owner of land. Sister of priv resp allowed
Isidro to occupy swampy portion subject to condition to
vacate upon demand. Failure to vacate, unlawful detainer
was filed against Isidro. RTC dismissed bec land is
agricultural and so agrarian.
SC:
Jurisdiction over subject matter determined from allegations
of complaint. Court does not lose jurisdiction by defense of
tenancy relationship and only after hearing that, if tenancy is
shown, the court should dismiss for lack of jurisdiction. Case
involving agri land does not automatically make such case
agrarian. Six requisites were not present. There was no
contract to cultivate & petitioner failed to substantiate claim
that he was paying rent for use of land.
BEJASA v. CA
FACTS:
Candelaria owned two parcels of land, which she leased to Malabanan.
Malabanan hired the Bejasas to plant on the land and clear it, with all
the expenses shouldered by Malabanan. Bejasas continued to stay on
the land and did not give any consideration for its use, be it in the form
of rent or a shared harvest
ISSUE: Whether or not there is a tenancy relationship in favor of the
Bejasas
SC: Court found that there was no tenancy relationship between the
parties. There was no proof that Malabanan and the Bejasas shared
the harvests. Candelaria never gave her consent to the Bejasas stay
on the land . There was no proof that the Dinglasans gave authority to
the Bejasas to be the tenant of the land in question. Not all the
elements of tenancy were met in this case. There was no proof of
sharing in harvest. While Bejasa testified, SC said only Bejasas word

was presented to prove this. Besides testimony was suspicious

because of inconsistency Bejasa testified that he agreed to deliver 1/5
of harvest as owners share, yet at one time, he also mentioned that
25% was for Malabanan and 50% for owner. Moreover, landowners
never gave consent, citing Chico vs. CA , 284 534 self serving
statement are inadequate, proof must be adhered. Even assuming
that landowner agreed to lease it for P20,000per year, such agreement
did not prove tenancy . Consideration should be harvest sharing.
ALMUETE v. ANDRES (Issue on Ownership)
Facts: Almuete was in exclusive possession of subject land. Unknown
to Almuete, Andres was awarded homestead patent due to
investigation report that Almuete was unknown and waived his rights;
Andres also represented that Almuete sold the property to Masiglat for
radiophone set and that Masiglat sold to him for a carabao and P600.
Almuete filed an action for recovery of possession and reconveyance
before trial court. Issue is who between 2 awardees of lot has better
right to property.
SC: This is controversy relating to ownership of farmland so, beyond
the ambit of agrarian dispute. No juridical tie of landowner and tenant
was alleged between petitioners and respondent. RTC was competent
to try the case.
NICORP MANAGEMENT AND DEVELOPMENT CORPORATION vs.
LEONIDA DE LEON
Facts:
On August 26, 2004, respondent filed a complaint before the Office of
the Provincial Agrarian Reform Adjudicator (PARAD) of Region IVProvince of Cavite, praying that petitioners Salvador R. Lim and/or
NICORP Management and Development Corporation (NICORP) be
ordered to respect her tenancy rights over a parcel of land located in
Barangay Mambog III, Bacoor, Cavite, registered under TCT No. T72669 in the name of Leoncia De Leon and Susana De Leon
Loppacher (De Leon sisters), who were likewise impleaded as partiesdefendants in the suit.
Respondent alleged that she was the actual tiller and cultivator of the
land since time immemorial with full knowledge and consent of the
owners, who were her sisters-in-law; that sometime in 2004, petitioners
circulated rumors that they have purchased the property from the De
Leon sisters; that petitioners ignored respondent's requests to show
proof of their alleged ownership; that on August 12, 2004, petitioners
entered the land and uprooted and destroyed the rice planted on the
land and graded portions of the land with the use of heavy equipment;
that the incident was reported to the Municipal Agrarian Reform Office
(MARO) which issued a Cease and Desist Order 5 but to no avail.
Respondent thus prayed that petitioners be ordered to respect her
tenancy rights over the land; restore the land to its original condition
and not to convert the same to non-agricultural use; that any act of
disposition of the land to any other person be declared null and void
because as a tenant, she allegedly had a right of pre-emption or
redemption over the land.
Petitioner Lim denied that respondent was a tenant of the subject
property under the Comprehensive Agrarian Reform Program (CARP).
He alleged that respondent is a septuagenarian who is no longer
physically capable of tilling the land; that the MARO issued a
certification 7 that the land had no registered tenant; that respondent
could not be regarded as a landless tiller under the CARP because she
owns and resides in the property adjacent to the subject land which
she acquired through inheritance; that an Affidavit of Non-Tenancy 8

was executed by the De Leon sisters when they sold the property to
him. DTIaCS
Moreover, Lim claimed that respondent and her family surreptitiously
entered the subject land and planted a few crops to pass themselves
off as cultivators thereof; that respondent tried to negotiate with
petitioner Lim for the sale of the land to her, as the latter was interested
in entering into a joint venture with another residential developer, which
shows that respondent has sufficient resources and cannot be a
beneficiary under the CARP; that the land is no longer classified as
agricultural and could not thus be covered by the CARP. Per
certification issued by the Office of the Municipal Planning and
Development Coordinator of Bacoor, Cavite, the land is classified as
residential pursuant to a Comprehensive Land Use Plan approved by
the Sangguniang Panlalawigan.
Issue:
Whether or not the land is exempted.
Held:
In the instant case, there is no substantial evidence to support the
appellate court's conclusion that respondent is a bona fide tenant on
the subject property. Respondent failed to prove the third and sixth
elements cited above. It was not shown that the De Leon sisters
consented to a tenancy relationship with respondent who was their
sister-in-law; or that the De Leon sisters received any share in the
harvests of the land from respondent or that the latter delivered a
proportionate share of the harvest to the landowners pursuant to a
tenancy relationship.
The affidavits did not mention at all that the De Leon sisters received a
portion of the harvests or that respondent delivered the same to her
sisters-in-law. The affidavits failed to disclose the circumstances or
details of the alleged harvest sharing; it merely stated that the affiants
have known respondent to be the cultivator of the land since time
immemorial. It cannot therefore be deemed as evidence of harvest
sharing.
That respondent was allowed to cultivate the property without
opposition, does not mean that the De Leon sisters impliedly
recognized the existence of a leasehold relation with respondent.
Occupancy and continued possession of the land will not ipso facto
make one a de jure tenant.
Finally, the sale of the subject land to petitioners did not violate
Sections 65 33 and 73 34 (c) of R.A. No. 6657. There was no illegal
conversion of the land because Sec. 65 applies only to lands which
were covered by the CARP, i.e., those lands beyond the five-hectare
retention limit allowed to landowners under the law, which were
distributed to farmers-beneficiaries. In the instant case, it was not
shown that the subject land was covered by the CARP. Neither was it
shown that the sale was made to circumvent the application of R.A.
6657 or aimed at dispossessing tenants of the land that they till.
4. HOMESTEAD GRANTEES (Sec.6)
HOMESTEAD PATENT
A mode of acquiring alienable and disposable lands of public
domain for agricultural purposes conditioned upon actual
cultivation and residence.

filed at CENRO where land being applied is

located.

who are qualified - citizens of Philippines over 18

years old & not an owner of more than 12 hectares
of land (Art XII, Sec. 3, 1987 Constitution)
designed to distribute disposable agricultural lots of the State
to land-destitute citizens for their home and cultivation.
Pursuant to such benevolent intention the State prohibits the
sale or encumbrance of the homestead (CA 141, Section
116) within five years after the grant of the patent. After that
five-year period the law impliedly permits alienation of the
homestead, but in line with the primordial purpose to favor
with the homesteader and his family the statute provides that
such alienation or conveyance (Section 117) shall be subject
to the right of repurchase by the homesteader, his widow or
heirs.

CARL recognizes rights of homesteaders(Sec.6,)

expressly recognized in Sec. 6, Art XIII, Constitution

5. SECTION 6. Retention Limits. Except as otherwise provided in
this Act, no person may own or retain, directly or indirectly, any public
or private agricultural land, the size of which shall vary according to
factors governing a viable family-size farm, such as commodity
produced, terrain, infrastructure, and soil fertility as determined by the
Presidential Agrarian Reform Council (PARC) created hereunder, but in
no case shall retention by the landowner exceed five (5) hectares.
SEC. 6-A. Exception to Retention Limits. - Provincial, city and
municipal government ,units acquiring private agricultural lands by
expropriation or other modes of acquisition to be used for actual, direct
and exclusive public purposes, such as roads and bridges, public
markets, school sites, resettlement sites, local government facilities,
public parks and barangay plazas or squares, consistent with the
approved local comprehensive land use plan, shall not be subject to
the five (5)-hectare retention limit under this Section xxx. (RA 9700,
Sec. 4)
6. Award to Child of Landowner
Three (3) hectares may be awarded to each child of the landowner,
subject to the following qualifications:
(1) that he is at least fifteen (15) years of age; and
(2) that he is actually tilling the land or directly managing the farm:
Provided, That landowners whose lands have been covered by
Presidential Decree No. 27 shall be allowed to keep the area originally
retained by them thereunder; Provided, further, That original
homestead grantees or direct compulsory heirs who still own the
original homestead at the time of the approval of this Act shall retain
the same areas as long as they continue to cultivate said homestead.
7. Exemption from Coverage
Sec. 10. Exemptions and Exclusions from coverage of CARL
(a) Lands ADE used for parks, wildlife, forest reserves, reforestation,
fish sanctuaries and breeding grounds, watersheds and mangroves
(exempt);
(b) private lands ADE used for prawn farms and fishponds (exempt)
(c) lands ADE used and found to be necessary for national defense,
school sites and campuses including experimental farm stations, seeds
and seedlings research, church sites and convents, mosque sites,
communal burial grounds and cemeteries, penal colonies and farms
and all lands with 18% slope and over (exempt)
CENTRAL MINDANAO v. DARAB

The subject lands are exempted because they are actually,

directly & exclusively used and found necessary for school
site and campus, including experimental farm stations for
educational purposes and for establishing seed and seeding
research
The construction of DARAB in Section 10 restricting the land
area of CMU to its present needs overlooked the significant
factor it growth of a university in years to come. By the nature
of CMU, which is a school established to promote agriculture
& industry, the need for vast tract of agriculture land for future
programs of expansion is obvious.
While portion of CMU land was leased by Phil. Packing Corp.
(now Del Monte), the agreement was prior to CARL & was
directly connected to the purpose & objectives of CMU as
educational institution
As to determination of when and what lands are found to be
necessary for use of CMU, school is in best position to
resolve & answer the question. DARAB & CA have no right to
substitute unless it is manifest that CMU has no real need for
land.

8. Ways in distributing lands to qualified beneficiaries under

CARL
The law designated that land acquisition and distribution are to be done
in a period of ten years following the effectivity of the law. Phase one
covers rice and corn lands under the Presidential Decree No. 27; all
idle or abandoned lands; all privately-owned lands voluntarily offered
by the landowners for land reform; all lands foreclosed by government
financial institutions; all lands acquired by the Presidential Commission
on Good Government (PCGG); and all other lands owned by the
government devoted to or suitable for agriculture (RA 6657). Phase
two covers all alienable and disposable public agricultural lands, all
arable public agricultural under agro-forest, pasture and agricultural
leases that are cultivated and planted to crops in accordance with
Section 6, Article XIII of the Constitution; all public agricultural lands in
excess of fifty hectares. Phase three includes private agricultural
landholdings above 24 hectares up to 50 hectares; and landholdings
from the retention limit up to 24 hectares.
9. Jurisdiction in identification and selection of beneficiaries
The Presidential Agrarian Reform Council (PARC) shall establish
guidelines to implement the above priorities and distribution scheme,
including the determination of who are qualified beneficiaries: Provided,
That an owner-tiller may be a beneficiary of the land he does not own
but is actually cultivating to the extent of the difference between the
area of the land he owns and the award ceiling of three (3) hectares.
10. Jurisdiction to cancel leasehold contract
Beneficiaries who are found to have violated the provisions of R.A. No.
6657 and other existing agrarian laws and issuances shall be delisted
from the masterlist of qualified beneficiaries and the IDs issued in their
favor rescinded and cancelled by the DAR through the PARO. In
addition to the cancellation of IDs, the cancellation of registered
leasehold contracts or EPs/CLOAs, by the DAR Adjudication
Board pursuant to Administrative Order No. 02, Series of 1994,
entitled, "Rules Governing the Correction and Cancellation of
Registered/Unregistered Emancipation Patents (EPs), and Certificates
of Land Ownership Award (CLOAs) Due to Unlawful Acts and
Omissions or Breach of Obligations of Agrarian Reform Beneficiaries
(ARBs) and for other Causes", shall also be undertaken.

11. Jurisdiction to cancel CLOA

The DAR Adjudication Board (DARAB) shall have jurisdiction in the
matter of cancellation of registered EPs/CLOAs, other similar titles and
leasehold contracts and disqualification of ARBs. Orders issued by the
DARAB, Regional Agrarian Reform Adjudicator (RARAD) and
Provincial Agrarian Reform Adjudicator (PARAD), shall be final and
executory. Copies shall be furnished the DARPO for purposes of the
rescinding and cancellation of IDs.
12.Compulsory acquisition may be defined as the mandatory
acquisition of agricultural lands including facilities and improvements
necessary for agricultural production, as may be appropriate, for
distribution to qualified beneficiaries upon payment of just
compensation.
SECTION 16. Procedure for Acquisition of Private Lands.
For purposes of acquisition of private lands, the following procedures
shall be followed:
(a) After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the land to the
owners thereof, by personal delivery or registered mail, and post the
same in a conspicuous place in the municipal building and barangay
hall of the place where the property is located. Said notice shall contain
the offer of the DAR to pay a corresponding value in accordance with
the valuation set forth in Sections 17, 18, and other pertinent
provisions hereof.
(b) Within thirty (30) days from the date of receipt of written notice
by personal delivery or registered mail, the landowner, his administrator
or representative shall inform the DAR of his acceptance or rejection of
the offer.
c) If the landowner accepts the offer of the DAR, the Land Bank of
the Philippines (LBP) shall pay the landowner the purchase price of the
land within thirty (30) days after he executes and delivers a deed of
transfer in favor of the government and surrenders the Certificate of
Title and other muniments of title.
(d) In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the compensation
for the land requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for the land,
within fifteen (15) days from the receipt of the notice. After the
expiration of the above period, the matter is deemed submitted for
decision. The DAR shall decide the case within thirty (30) days after it
is submitted for decision.
(e) Upon receipt by the landowner of the corresponding payment or, in
case of rejection or no response from the landowner, upon the deposit
with an accessible bank designated by the DAR of the compensation in
cash or in LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the proper Register
of Deeds to issue a Transfer Certificate of Title (TCT) in the name of
the Republic of the Philippines. The DAR shall thereafter proceed with
the redistribution of the land to the qualified beneficiaries.
(f) Any party who disagrees with the decision may bring the matter to
the court of proper jurisdiction for final determination of just
compensation.
LBP v Heirs of Trinidad:
Facts:
Private respondent is the registered owner of a parcel of agricultural
land situated in Sampao, Kapalong, Davao del Norte with an
approximate area of 37.1010 hectares covered by Transfer Certificate
of Title No. T-49200, 14.999 hectares of which was covered by RA No.

6657 through the Voluntary Offer to Sell (VOS) scheme of the

Comprehensive Agrarian Reform Program (CARP).
Private respondent offered to the Department of Agrarian Reform
(DAR) the price of P2,000,000.00 per hectare for said portion of the
land covered by CARP.
Petitioner Land Bank of the Philippines (LBP) valued and offered as
just compensation for said 14.999 hectares the amount of
P1,145,806.06 or P76,387.57 per hectare. The offer was rejected by
private respondent.
In accordance with Section 16 of RA No. 6657, petitioner LBP
deposited for the account of private respondent P1,145,806.06 in cash
and in bonds as provisional compensation for the acquisition of the
property.
Thereafter, the DAR Adjudication Board (DARAB), through the
Regional Adjudicator (RARAD) for Region XI conducted summary
administrative proceedings under DARAB Case No. LV-XI-0330-DN2002 to fix the just compensation.
On June 26, 2002, the DARAB rendered a decision fixing the
compensation of the property at P10,294,721.00 or P686,319.36 per
hectare.
Petitioner LBP filed a motion for reconsideration of the above decision
but the same was denied on September 4, 2002.
Petitioner LBP filed a petition against private respondent for judicial
determination of just compensation before the Special Agrarian Court,
Regional Trial Court, Branch 2, Tagum City, docketed as DAR Case
No. 78-2002, which is the subject of this petition.
Private respondent, on the other hand, filed a similar petition against
DAR before the same Special Agrarian Court docketed as DAR Case
No. 79-2002, to which petitioner LBP filed its answer and moved for the
dismissal of the petition for being filed out of time.
Private respondent filed a Motion for Delivery of the Initial Valuation
praying that petitioner LBP be ordered to deposit the DARAB
determined amount of P10,294,721.00 in accordance with the
Supreme Court ruling in "Land Bank of the Philippines vs. Court of
Appeals, Pedro L. Yap, Et Al., G.R. No. 118712, October 6, 1995".
EAIcCS
Petitioner LBP filed a Manifestation praying that the amount of the
deposit should only be the initial valuation of the DAR/LBP in the
amount of P1,145,806.06 and not P10,294,721.00 as determined by
the DARAB.
On December 12, 2002, public respondent rendered the assailed
resolution ordering petitioner LBP to deposit for release to the private
respondent the DARAB determined just compensation of
P10,294,721.00.
On December 13, 2002, petitioner LBP filed a motion for
reconsideration of the said order to deposit.
On December 17, 2002, private respondent filed a motion to cite
Romeo Fernando Y. Cabanal and Atty. Isagani Cembrano, manager of

petitioner LBP's Agrarian Operations Office in Region XI and its

handling lawyer, respectively, for contempt for failure to comply with the
order to deposit.
After the filing of private respondent's comment to the motion for
reconsideration and petitioner LBP's explanation and memorandum to
the motion for reconsideration, public respondent rendered the assailed
resolution dated February 17, 2003, denying petitioner LBP's motion for
reconsideration.
Petitioner LBP filed a motion to admit a second motion for
reconsideration which still remains unacted upon by public respondent.
ISSUE:
The lone issue in this controversy is the correct amount of provisional
compensation which the LBP is required to deposit in the name of the
landowner if the latter rejects the DAR/LBP's offer. Petitioner maintains
it should be its initial valuation of the land subject of Voluntary Offer to
Sell (VOS) while respondent claims it pertains to the sum awarded by
the PARAD/RARAD/DARAB in a summary administrative proceeding
pending final determination by the courts.
HELD:
Section 16 of R.A. No. 6657 reads:
(d)In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the compensation
for the land by requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for the land,
within fifteen (15) days from the receipt of the notice. After the
expiration of the above period, the matter is deemed submitted for
decision. The DAR shall decide the case within thirty (30) days after it
is submitted for decision.

DAR/LBP) or deposit of the provisional compensation (if the landowner

rejects or fails to respond to the offer of the DAR/LBP). Indeed, the
CARP Law conditions the transfer of possession and ownership of the
land to the government on receipt by the landowner of the
corresponding payment or the deposit of the compensation in cash or
LBP bonds with an accessible bank.

13. Just compensation

SECTION 17. Determination of Just Compensation. In
determining just compensation, the cost of acquisition of the land, the
current value of the like properties, its nature, actual use and income,
the sworn valuation by the owner, the tax declarations, and the
assessment made by government assessors shall be considered. The
social and economic benefits contributed by the farmers and
the farmworkers and by the Government to the property as well as the
non-payment of taxes or loans secured from any government financing
institution on the said land shall be considered as additional factors to
determine its valuation.
Assoc. of Small Landowners v Sec of Dar
We do not deal here with the traditional exercise of the power of
eminent domain. This is not an ordinary expropriation where only a
specific property of relatively limited area is sought to be taken by the
State from its owner for a specific and perhaps local purpose. What we
deal with here is a revolutionary kind of expropriation. The
expropriation before us affects all private agricultural lands whenever
found and of whatever kind as long as they are in excess of the
maximum retention limits allowed their owners. Such a program will
involve not mere millions of pesos. The cost will be tremendous.

(e)Upon receipt by the landowner of the corresponding payment or in

case of rejection or no response from the landowner, upon the deposit
with an accessible bank designated by the DAR of the compensation in
cash or in LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the proper Register
of Deeds to issue a Transfer Certificate of Title (TCT) in the name of
the Republic of the Philippines. The DAR shall thereafter proceed with
the redistribution of the land to the qualified beneficiaries.

The other modes, which are likewise available to the landowner at his
option, are also not unreasonable because payment is made in shares
of stock, LBP bonds, other properties or assets, tax credits, and other
things of value equivalent to the amount of just compensation.

We find the foregoing as a strained interpretation of a simple and clear

enough provision on the procedure governing acquisition of lands
under CARP, whether under the compulsory acquisition or VOS
scheme. Indeed, it would make no sense to mention anything about the
provisional deposit in sub-paragraphs (a) and (b) the landowner is
sent a notice of valuation to which he should reply within a specified
time, and in sub-paragraph (c) when the landowner accepts the offer
of the DAR/LBP as compensation for his land. Sub-paragraph (d)
provides for the consequence of the landowner's rejection of the initial
valuation of his land, that is, the conduct of a summary administrative
proceeding for a preliminary determination by the DARAB through the
PARAD or RARAD, during which the LBP, landowner and other
interested parties are required to submit evidence to aid the
DARAB/RARAD/PARAD in the valuation of the subject land. Subparagraph (e), on the other hand, states the precondition for the State's
taking of possession of the landowner's property and the cancellation
of the landowner's title, thus paving the way for the eventual
redistribution of the land to qualified beneficiaries: payment of the
compensation (if the landowner already accepts the offer of the

LBP v Dumlao
Respondents are owners of agri lands covered under PD 27;
Determination of just compensation remained pending with
DAR, so they filed complaint with RTC for determination.
SC:
if just compensation was not settled prior to the passage of
RA No. 6657, it should be computed in accordance with said
law, although property was acquired under PD No. 27;
the determination made by the trial court, which relied solely
on the formula prescribed by PD No. 27 and EO No. 228, is
grossly erroneous. The amount of P6,912.50 per hectare,
which is based on the DAR valuation of the properties "at the
time of their taking in the 1970s", does not come close to a
full and fair equivalent of the property taken from
respondents;
CA's act of setting just compensation in the amount of
P109,000.00 would have been a valid exercise of this judicial
function, had it followed the mandatory formula prescribed by
RA No. 6657. However, the appellate court merely chose the

Therefore, payment of the just compensation is not always required to

be made fully in money.

lower of two (2) values specified by the commissioner as

basis for determining just compensation, namely: (a)
P109,000.00 per hectare as the market value of first class
unirrigated rice land in the Municipality of Villaverde; and (b)
P60.00 per square meter as the zonal value of the land in
other barangays in Villaverde. This is likewise erroneous
because it does not adhere to the formula provided by RA
No. 6657.
It cannot be overemphasized that the just compensation to
be given to the owner cannot be assumed and must be
determined with certainty.
Section 17 was converted into a formula by the DAR through
AO No. 6, Series of 1992, as amended by AO No. 11, Series
of 1994:
Basic formula (Voluntary Offer to Sell) or [Compulsory
Acquisition] regardless of the date of offer or coverage of the
claim:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where:
LV
= Land Value
CNI
= Capitalized Net Income
CS
= Comparable Sales
MV
= Market Value per Tax Declaration
The above formula shall be used if all the three factors are
present, relevant and applicable.
Note:
1. PD 27: uses average crop harvest as a consideration;
RA 6657: factors for consideration in determining just compensation.
2. RA 6657 for lands covered by PD 27 and just compensation has not
been determined at the time of passage of RA 6657 applies because
PD 27 and EO 228 have only suppletory effect.
LBP v Livioco
Facts:
Respondent Enrique Livioco (Livioco) was the owner of 30.6329
hectares of sugarland 6 located in Dapdap, Mabalacat, Pampanga.
Sometime between 1987 and 1988, 7 Livioco offered his sugarland to
the Department of Agrarian Reform (DAR) for acquisition under the
CARP at P30.00 per square meter, for a total of P9,189,870.00. The
voluntary-offer-to-sell (VOS) form 8 he submitted to the DAR indicated
that his property is adjacent to residential subdivisions and to an
international paper mill.
The DAR referred Livioco's offer to the LBP for valuation. Following
Section 17 of Republic Act (RA) No. 6657 and DAR Administrative
Order No. 17, series of 1989, 11 as amended by Administrative Order
No. 3, series of 1991, 12 the LBP set the price at P3.21 per square
meter or a total of P827,943.48 for 26 hectares. Livioco was then
promptly informed of the valuation 14 and that the cash portion of the
claim proceeds have been "kept in trust pending [his] submission of the
[ownership documentary] requirements." 15 It appears however that
Livioco did not act upon the notice given to him by both government
agencies. On September 20, 1991, LBP issued a certification to the
Register of Deeds of Pampanga that it has earmarked the amount of
P827,943.48 as compensation for Livioco's 26 hectares.
It was only two years later 17 that Livioco requested for a reevaluation
of the compensation on the ground that its value had already
appreciated from the time it was first offered for sale. 18 The request
was denied by Regional Director Antonio Nuesa on the ground that
there was already a perfected sale.

Unable to recover his property but unwilling to accept what he believes

was an outrageously low valuation of his property, Livioco finally filed a
petition for judicial determination of just compensation against DAR,
LBP, and the CLOA holders.
In this Petition before us, LBP assails the CA's assent to the valuation
of Livioco's property as a residential land. It maintains that it is not the
State's policy to purchase residential land. Since the property was
acquired under the CARP, it had to be valued as an agricultural land.
Issue
Was the compensation for respondent's property
determined in accordance with law?
HELD:
For purposes of just compensation, the fair market value of an
expropriated property is determined by its character and its price at the
time of taking. 68 There are three important concepts in this definition
the character of the property, its price, and the time of actual taking.
The lower courts erred in ruling that the character or use of the
property has changed from agricultural to residential, because there is
no allegation or proof that the property was approved for conversion to
other uses by DAR. It is the DAR that is mandated by law to evaluate
and to approve land use conversions 73 so as to prevent fraudulent
evasions from agrarian reform coverage. Even reclassification 74 and
plans for expropriation 75 by local government units (LGUs)
will not ipso facto convert an agricultural property to residential,
industrial or commercial. Thus, in the absence of any DAR approval for
the conversion of respondent's property or an actual expropriation by
an LGU, it cannot be said that the character or use of said property
changed from agricultural to residential. Respondent's property
remains agricultural and should be valued as such. Hence, the CA and
the trial court had no legal basis for considering the subject property's
value as residential.
Respondent's evidence of the value of his land as residential property
(which the lower courts found to be preponderant) could, at most, refer
to the potential use of the property. While the potential use of an
expropriated property is sometimes considered in cases where there is
a great improvement in the general vicinity of the expropriated property,
76 it should never control the determination of just compensation
(which appears to be what the lower courts have erroneously done).
The potential use of a property should not be the principal criterion for
determining just compensation for this will be contrary to the wellsettled doctrine that the fair market value of an expropriated property is
determined by its character and its price at the time of taking, not its
potential uses. If at all, the potential use of the property or its
"adaptability for conversion in the future is a factor, not the ultimate in
determining just compensation." 77
The proper approach should have been to value respondent's property
as an agricultural land, which value may be adjusted in light of the
improvements in the Municipality of Mabalacat. Valuing the property as
a residential land (as the lower courts have done) is not the correct
approach, for reasons explained above. It would also be contrary to the
social policy of agrarian reform, which is to free the tillers of the land
from the bondage of the soil without delivering them to the new
oppression of exorbitant land valuations. Note that in lands acquired
under RA 6657, it is the farmer-beneficiaries who will ultimately pay the

valuations paid to the former land owners (LBP merely advances the
payment). 78 If the farmer-beneficiaries are made to pay for lands
valued as residential lands (the valuation for which is substantially
higher than the valuation for agricultural lands), it is not unlikely that
such farmers, unable to keep up with payment amortizations, will be
forced to give up their landholdings in favor of the State or be driven to
sell the property to other parties. This may just bring the State right
back to the starting line where the landless remain landless and the
rich acquire more landholdings from desperate farmers.
LBP v Nable
Heirs of Lorenzo v LBP
Petitioner are owners of land; first valuation was rejected but upon recomputation and order of RRAD, the revaluation was accepted by
owners LBP filed MR but denied, LBP filed an opposition for
determination of JC with the RTC
-Petitioner submit that LBP has no legal personality
-SEC 18, clearly states there should be a consensus among
-LBP is an indispensable party in expropriation proceedingsund4r RA
6657 and thus has the legal personality to question the determination.
DAR v Heirs of Domingo
Facts:
The late Angel T. Domingo (Domingo) is the registered owner of a
70.3420-hectare rice land situated at Macapabellag, Guimba, Nueva
Ecija, covered by Transfer Certificate of Title No. NT-97157.
On October 21, 1972, Presidential Decree No. 27 2 (P.D. No. 27) was
issued, pursuant to which actual tenant farmers of private agricultural
lands devoted to rice and corn were deemed as full owners of the land
they till. The land transfer program under P.D. No. 27 was subsequently
implemented by Executive Order No. 228.
On April 26, 2000, Domingo filed with the Regional Trial Court (RTC) of
Guimba, Nueva Ecija a complaint for determination and payment of just
compensation against the Land Bank of the Philippines (LBP) and
DAR.
Domingo opposed the said valuation and claimed that the just
compensation for the subject land should be computed using the
parameters set forth under Republic Act No. 6657 4 (R.A. No. 6657).
The LBP and DAR disputed Domingo's valuation and claimed that the
determination of just compensation should be governed by the
provisions of P.D. No. 27 in relation to E.O. No. 228.
ISSUE:
Whether the method set forth under R.A. No. 6657 in the computation
of just compensation may be applied to private agricultural lands taken
by the government under the auspices of P.D. No. 27 in relation to E.O.
No. 228.

xxx xxx xxx

It would certainly be inequitable to determine just compensation based
on the guideline provided by PD 27 and EO 228 considering the DAR's
failure to determine the just compensation for a considerable length of
time. That just compensation should be determined in accordance with
RA 6657, and not PD 27 or EO 228, is especially imperative
considering that just compensation should be the full and fair
equivalent of the property taken from its owner by the expropriator, the
equivalent being real, substantial, full and ample.
Heirs of Deleste v LBP
14. Beneficiaries
SECTION 22. Qualified Beneficiaries. The lands covered by the
CARP shall be distributed as much as possible to landless residents of
the same barangay, or in the absence thereof, landless residents of
the same municipality in the following order of priority: (a) agricultural
lessees and share tenants; (b) regular farmworkers; (c) seasonal
farmworkers; (d) other farmworkers; (e) actual tillers or occupants of
public lands; (f) collectives or cooperatives of the above beneficiaries;
and (g) others directly working on the land. Provided, however, That
the children of landowners who are qualified under Section 6 of this
Act shall be given preference in the distribution of the land of their
parents: and Provided, further, That actual tenant-tillers in the
landholdings shall not be ejected or removed therefrom. Beneficiaries
under Presidential Decree No. 27 who have culpably sold, disposed
of, or abandoned their land are disqualified to become beneficiaries
under this Program. A basic qualification of a beneficiary shall be his
willingness, aptitude, and ability to cultivate and make the land as
productive as possible. The DAR shall adopt a system of monitoring
the record or performance of each beneficiary, so that any beneficiary
guilty of negligence or misuse of the land or any support extended to
him shall forfeit his right to continue as such beneficiary. The DAR
shall submit periodic reports on the performance of the beneficiaries to
the PARC. If, due to the landowner's retention rights or to the number
of tenants, lessees, or workers on the land, there is not enough land to
accommodate any or some of them, they may be granted ownership of
other lands available for distribution under this Act, at the option of the
beneficiaries. Farmers already in place and those not accommodated
in the distribution of privately-owned lands will be given preferential
rights in the distribution of lands from the public domain.
Section 22 of the CARL does not limit qualified beneficiaries to tenants
of the landowners. Thus, the DAR cannot be deemed to have
committed grave abuse of discretion simply because its chosen
beneficiaries were not tenants of PCPCI (DAR vs. Polo Coconut
Plantation Co., In., et al., G.R. 168787, September 3, 2008).
15. Prohibition on transfer by beneficiary (Section 27)

HELD:
Under the factual circumstances of this case, the agrarian reform
process is still incomplete as the just compensation to be paid private
respondents has yet to be settled. Considering the passage of
Republic Act No. 6657 (RA 6657) before the completion of this process,
the just compensation should be determined and the process
concluded under the said law. Indeed, RA 6657 is the applicable law,
with PD 27 and EO 228 having only suppletory effect, conformably with
our ruling in Paris v. Alfeche.

SECTION 27. Transferability of Awarded Lands. Lands acquired by

beneficiaries under this Act may not be sold, transferred or conveyed
except through hereditary succession, or to the government, or the
LBP, or to other qualified beneficiaries for a period of ten (10) years:
Provided, however, That the children or the spouse of the transferor
shall have a right to repurchase the land from the government or LBP
within a period of two (2) years. Due notice of the availability of the
land shall be given by the LBP to the Barangay Agrarian Reform

Committee (BARC) of the barangay where the land is situated. The

Provincial Agrarian Reform Coordinating Committee (PARCCOM) as
herein provided, shall, in turn, be given due notice thereof by the
BARC. If the land has not yet been fully paid by the beneficiary, the
rights to the land may be transferred or conveyed, with prior approval
of the DAR, to any heir of the beneficiary or to any other beneficiary
who, as a condition for such transfer or conveyance, shall cultivate the
land himself. Failing compliance herewith, the land shall be transferred
to the LBP which shall give due notice of the availability of the land in
the manner specified in the immediately preceding paragraph. In the
event of such transfer to the LBP, the latter shall compensate the

beneficiary in one lump sum for the amounts the latter has already
paid, together with the value of improvements he has made on the
land.