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Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 103302 August 12, 1993


NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND INVESTORS CORP., petitioners,
vs.
DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and DIR. WILFREDO LEANO, DAR
REGION IV, respondents.
Lino M. Patajo for petitioners.
The Solicitor General for respondents.

BELLOSILLO, J.:
Are lands already classified for residential, commercial or industrial use, as approved by the Housing and Land Use
Regulatory Board and its precursor agencies 1 prior to 15 June 1988, 2 covered by R.A. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988? This is the pivotal issue in this petition for certiorari assailing the Notice of
Coverage 3 of the Department of Agrarian Reform over parcels of land already reserved as townsite areas before the
enactment of the law.

Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous parcels of land located in
Banaba, Antipolo, Rizal, with areas of 120.9793 hectares, 1.3205 hectares and 2.7080 hectares, or a total of
125.0078 hectares, and embraced in Transfer Certificate of Title No. 31527 of the Register of Deeds of the Province
of Rizal.
On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land located in the Municipalities
of Antipolo, San Mateo and Montalban as townsite areas to absorb the population overspill in the metropolis which
were designated as the Lungsod Silangan Townsite. The NATALIA properties are situated within the areas
proclaimed as townsite reservation.
Since private landowners were allowed to develop their properties into low-cost housing subdivisions within the
reservation, petitioner Estate Developers and Investors Corporation (EDIC, for brevity), as developer of NATALIA
properties, applied for and was granted preliminary approval and locational clearances by the Human Settlements
Regulatory Commission. The necessary permit for Phase I of the subdivision project, which consisted of 13.2371
hectares, was issued sometime in 1982; 4 for Phase II, with an area of 80,000 hectares, on 13 October 1983; 5 and for
Phase III, which consisted of the remaining 31.7707 hectares, on 25 April 1986. 6 Petitioner were likewise issued
development permits 7 after complying with the requirements. Thus the NATALIA properties later became the Antipolo
Hills Subdivision.

On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1988" (CARL, for
brevity), went into effect. Conformably therewith, respondent Department of Agrarian Reform (DAR, for brevity),
through its Municipal Agrarian Reform Officer, issued on 22 November 1990 a Notice of Coverage on the
undeveloped portions of the Antipolo Hills Subdivision which consisted of roughly 90.3307 hectares. NATALIA
immediately registered its objection to the notice of Coverage.
EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and twice wrote him
requesting the cancellation of the Notice of Coverage.

On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc. (SAMBA, for the brevity),
filed a complaint against NATALIA and EDIC before the DAR Regional Adjudicator to restrain petitioners from
developing areas under cultivation by SAMBA members. 8 The Regional Adjudicator temporarily restrained petitioners
from proceeding with the development of the subdivision. Petitioners then moved to dismiss the complaint; it was denied.
Instead, the Regional Adjudicator issued on 5 March 1991 a Writ of Preliminary Injunction.

Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB); however, on 16
December 1991 the DARAB merely remanded the case to the Regional Adjudicator for further proceedings. 9
In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request to set aside the
Notice of Coverage. Neither respondent Secretary nor respondent Director took action on the protest-letters, thus
compelling petitioners to institute this proceeding more than a year thereafter.
NATALIA and EDIC both impute grave abuse of discretion to respondent DAR for including undedeveloped portions
of the Antipolo Hills Subdivision within the coverage of the CARL. They argue that NATALIA properties already
ceased to be agricultural lands when they were included in the areas reserved by presidential fiat for the townsite
reservation.
Public respondents through the Office of the Solicitor General dispute this contention. They maintain that the permits
granted petitioners were not valid and binding because they did not comply with the implementing Standards, Rules
and Regulations of P.D. 957, otherwise known as "The Subdivision and Condominium Buyers Protective Decree," in
that no application for conversion of the NATALIA lands from agricultural residential was ever filed with the DAR. In
other words, there was no valid conversion. Moreover, public respondents allege that the instant petition was
prematurely filed because the case instituted by SAMBA against petitioners before the DAR Regional Adjudicator
has not yet terminated. Respondents conclude, as a consequence, that petitioners failed to fully exhaust
administrative remedies available to them before coming to court.
The petition is impressed with merit. A cursory reading of the Preliminary Approval and Locational Clearances as
well as the Development Permits granted petitioners for Phases I, II and III of the Antipolo Hills Subdivision reveals
that contrary to the claim of public respondents, petitioners NATALIA and EDIC did in fact comply with all the
requirements of law.
Petitioners first secured favorable recommendations from the Lungsod Silangan Development Corporation, the
agency tasked to oversee the implementation of the development of the townsite reservation, before applying for the
necessary permits from the Human Settlements Regulatory
Commission. 10 And, in all permits granted to petitioners, the Commission
stated invariably therein that the applications were in "conformance" 11 or "conformity" 12 or "conforming" 13 with the
implementing Standards, Rules and Regulations of P.D. 957. Hence, the argument of public respondents that not all of
the requirements were complied with cannot be sustained.

As a matter of fact, there was even no need for petitioners to secure a clearance or prior approval from DAR. The
NATALIA properties were within the areas set aside for the Lungsod Silangan Reservation. Since Presidential
Proclamation No. 1637 created the townsite reservation for the purpose of providing additional housing to the
burgeoning population of Metro Manila, it in effect converted for residential use what were erstwhile agricultural
lands provided all requisites were met. And, in the case at bar, there was compliance with all relevant rules and
requirements. Even in their applications for the development of the Antipolo Hills Subdivision, the predecessor
agency of HLURB noted that petitioners NATALIA and EDIC complied with all the requirements prescribed by P.D.
957.
The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions and condominiums in
general. On the other hand, Presidential Proclamation No. 1637 referred only to the Lungsod Silangan Reservation,
which makes it a special law. It is a basic tenet in statutory construction that between a general law and a special
law, the latter prevails. 14
Interestingly, the Office of the Solicitor General does not contest the conversion of portions of the Antipolo Hills
Subdivision which have already been developed. 15 Of course, this is contrary to its earlier position that there was no
valid conversion. The applications for the developed and undeveloped portions of subject subdivision were similarly
situated. Consequently, both did not need prior DAR approval.

We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657 provides that the CARL
shall "cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands."
As to what constitutes "agricultural land," it is referred to as "land devoted to agricultural activity as defined in this
Act and not classified as mineral, forest, residential, commercial or industrial land." 16 The deliberations of the
Constitutional Commission confirm this limitation. "Agricultural lands" are only those lands which are "arable and suitable
agricultural lands" and "do not include commercial, industrial and residential lands." 17

Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision cannot in any
language be considered as "agricultural lands." These lots were intended for residential use. They ceased to be
agricultural lands upon approval of their inclusion in the Lungsod Silangan Reservation. Even today, the areas in
question continued to be developed as a low-cost housing subdivision, albeit at a snail's pace. This can readily be
gleaned from the fact that SAMBA members even instituted an action to restrain petitioners from continuing with
such development. The enormity of the resources needed for developing a subdivision may have delayed its
completion but this does not detract from the fact that these lands are still residential lands and outside the ambit of
the CARL.
Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands previously
converted to non-agricultural uses prior to the effectivity of CARL by government agencies other than respondent
DAR. In its Revised Rules and Regulations Governing Conversion of Private Agricultural Lands to Non-Agricultural
Uses, 18 DAR itself defined "agricultural land" thus
. . . Agricultural lands refers to those devoted to agricultural activity as defined in R.A. 6657 and not
classified as mineral or forest by the Department of Environment and Natural Resources (DENR)
and its predecessor agencies, and not classified in town plans and zoning ordinances as approved
by the Housing and Land Use Regulatory Board (HLURB) and its preceding competent authorities
prior to 15 June 1988 for residential, commercial or industrial use.
Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such conversion. It
was therefore error to include the undeveloped portions of the Antipolo Hills Subdivision within the coverage of
CARL.
Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian Reform, noted in an
Opinion 19 that lands covered by Presidential Proclamation No. 1637, inter alia, of which the NATALIA lands are part,
having been reserved for townsite purposes "to be developed as human settlements by the proper land and housing
agency," are "not deemed 'agricultural lands' within the meaning and intent of Section 3 (c) of R.A. No. 6657. " Not being
deemed "agricultural lands," they are outside the coverage of CARL.

Anent the argument that there was failure to exhaust administrative remedies in the instant petition, suffice it to say
that the issues raised in the case filed by SAMBA members differ from those of petitioners. The former involve
possession; the latter, the propriety of including under the operation of CARL lands already converted for residential
use prior to its effectivity.
Besides, petitioners were not supposed to wait until public respondents acted on their letter-protests, this after sitting
it out for almost a year. Given the official indifference, which under the circumstances could have continued forever,
petitioners had to act to assert and protect their interests. 20
In fine, we rule for petitioners and hold that public respondents gravely abused their discretion in issuing the
assailed Notice of Coverage of 22 November 1990 by of lands over which they no longer have jurisdiction.
WHEREFORE, the petition for Certiorari is GRANTED. The Notice of Coverage of 22 November 1990 by virtue of
which undeveloped portions of the Antipolo Hills Subdivision were placed under CARL coverage is hereby SET
ASIDE.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo, Quiason,
Puno and Vitug, JJ., concur.

Republic of the Philippines


SUPREME COURT
EN BANC
G.R. No. 162070 October 19, 2005
DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY JOSE MARI B. PONCE
(OIC),Petitioner
vs.
DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN and HARRY T. SUTTON, Respondents.
DECISION
PUNO, J.:
This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision and Resolution of the
Court of Appeals, dated September 19, 2003 and February 4, 2004, respectively, which declared DAR
Administrative Order (A.O.) No. 9, series of 1993, null and void for being violative of the Constitution.
The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has been devoted exclusively to
cow and calf breeding. On October 26, 1987, pursuant to the then existing agrarian reform program of the
government, respondents made a voluntary offer to sell (VOS)1 their landholdings to petitioner DAR to avail of
certain incentives under the law.
On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive Agrarian
Reform Law (CARL) of 1988, took effect. It included in its coverage farms used for raising livestock, poultry and
swine.
On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of DAR,2 this Court ruled that
lands devoted to livestock and poultry-raising are not included in the definition of agricultural land. Hence, we
declared as unconstitutional certain provisions of the CARL insofar as they included livestock farms in the coverage
of agrarian reform.
In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request to withdraw their VOS as
their landholding was devoted exclusively to cattle-raising and thus exempted from the coverage of the CARL.3
On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected respondents land and
found that it was devoted solely to cattle-raising and breeding. He recommended to the DAR Secretary that it be
exempted from the coverage of the CARL.
On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and requested the return of
the supporting papers they submitted in connection therewith.4 Petitioner ignored their request.
On December 27, 1993, DAR issued A.O. No. 9, series of 1993,5 which provided that only portions of private
agricultural lands used for the raising of livestock, poultry and swine as of June 15, 1988 shall be excluded from the
coverage of the CARL. In determining the area of land to be excluded, the A.O. fixed the following retention
limits, viz: 1:1 animal-land ratio (i.e., 1 hectare of land per 1 head of animal shall be retained by the landowner), and
a ratio of 1.7815 hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded from the
operations of the CARL.
On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final and irrevocable
the withdrawal of their VOS as, under the Luz Farms doctrine, their entire landholding is exempted from the
CARL.6
On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order7 partially granting the application
of respondents for exemption from the coverage of CARL. Applying the retention limits outlined in the DAR A.O. No.

9, petitioner exempted 1,209 hectares of respondents land for grazing purposes, and a maximum of 102.5635
hectares for infrastructure. Petitioner ordered the rest of respondents landholding to be segregated and placed
under Compulsory Acquisition.
Respondents moved for reconsideration. They contend that their entire landholding should be exempted as it is
devoted exclusively to cattle-raising. Their motion was denied.8 They filed a notice of appeal9 with the Office of the
President assailing: (1) the reasonableness and validity of DAR A.O. No. 9, s. 1993, which provided for a ratio
between land and livestock in determining the land area qualified for exclusion from the CARL, and (2) the
constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz Farms case which declared cattle-raising lands
excluded from the coverage of agrarian reform.
On October 9, 2001, the Office of the President affirmed the impugned Order of petitioner DAR.10 It ruled that DAR
A.O. No. 9, s. 1993, does not run counter to the Luz Farms case as the A.O. provided the guidelines to determine
whether a certain parcel of land is being used for cattle-raising. However, the issue on the constitutionality of the
assailed A.O. was left for the determination of the courts as the sole arbiters of such issue.
On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O. No. 9, s. 1993, void for
being contrary to the intent of the 1987 Constitutional Commission to exclude livestock farms from the land reform
program of the government. The dispositive portion reads:
WHEREFORE, premises considered, DAR Administrative Order No. 09, Series of 1993 is hereby DECLARED null
and void. The assailed order of the Office of the President dated 09 October 2001 in so far as it affirmed the
Department of Agrarian Reforms ruling that petitioners landholding is covered by the agrarian reform program of
the government is REVERSED and SET ASIDE.
SO ORDERED.11
Hence, this petition.
The main issue in the case at bar is the constitutionality of DAR A.O. No. 9, series of 1993, which prescribes a
maximum retention limit for owners of lands devoted to livestock raising.
Invoking its rule-making power under Section 49 of the CARL, petitioner submits that it issued DAR A.O. No. 9 to
limit the area of livestock farm that may be retained by a landowner pursuant to its mandate to place all public and
private agricultural lands under the coverage of agrarian reform. Petitioner also contends that the A.O. seeks to
remedy reports that some unscrupulous landowners have converted their agricultural farms to livestock farms in
order to evade their coverage in the agrarian reform program.
Petitioners arguments fail to impress.
Administrative agencies are endowed with powers legislative in nature, i.e., the power to make rules and
regulations. They have been granted by Congress with the authority to issue rules to regulate the implementation of
a law entrusted to them. Delegated rule-making has become a practical necessity in modern governance due to the
increasing complexity and variety of public functions. However, while administrative rules and regulations have the
force and effect of law, they are not immune from judicial review.12 They may be properly challenged before the
courts to ensure that they do not violate the Constitution and no grave abuse of administrative discretion is
committed by the administrative body concerned.
The fundamental rule in administrative law is that, to be valid, administrative rules and regulations must be
issued by authority of a law and must not contravene the provisions of the Constitution.13 The rule-making
power of an administrative agency may not be used to abridge the authority given to it by Congress or by the
Constitution. Nor can it be used to enlarge the power of the administrative agency beyond the scope
intended. Constitutional and statutory provisions control with respect to what rules and regulations may be
promulgated by administrative agencies and the scope of their regulations.14
In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to
regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention

limit for their ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent
to exclude, inter alia, all lands exclusively devoted to livestock, swine and poultry- raising. The Court clarified
in the Luz Farms case that livestock, swine and poultry-raising are industrial activities and do not fall within the
definition of "agriculture" or "agricultural activity." The raising of livestock, swine and poultry 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
the form of industrial fixed assets, such as: animal housing structures and facilities, drainage, waterers and blowers,
feedmill with grinders, mixers, conveyors, exhausts and generators, extensive warehousing facilities for feeds and
other supplies, anti-pollution equipment like bio-gas and digester plants augmented by lagoons and concrete ponds,
deepwells, elevated water tanks, pumphouses, sprayers, and other technological appurtenances.15
Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the
Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.
The subsequent case of Natalia Realty, Inc. v. DAR16 reiterated our ruling in the Luz Farms case. In Natalia
Realty, the Court held that industrial, commercial and residential lands are not covered by the CARL.17 We stressed
anew that while Section 4 of R.A. No. 6657 provides that the CARL shall cover all public and private
agricultural lands, the term "agricultural land" does not include lands classified as mineral, forest,
residential, commercial or industrial. Thus, in Natalia Realty, even portions of the Antipolo Hills Subdivision,
which are arable yet still undeveloped, could not be considered as agricultural lands subject to agrarian reform as
these lots were already classified as residential lands.
A similar logical deduction should be followed in the case at bar. Lands devoted to raising of livestock, poultry and
swine have been classified as industrial, not agricultural, lands and thus exempt from agrarian reform. Petitioner
DAR argues that, in issuing the impugned A.O., it was seeking to address the reports it has received that some
unscrupulous landowners have been converting their agricultural lands to livestock farms to avoid their coverage by
the agrarian reform. Again, we find neither merit nor logic in this contention. The undesirable scenario which
petitioner seeks to prevent with the issuance of the A.O. clearly does not apply in this case.Respondents
family acquired their landholdings as early as 1948. They have long been in the business of breeding cattle in
Masbate which is popularly known as the cattle-breeding capital of the Philippines.18 Petitioner DAR does not
dispute this fact. Indeed, there is no evidence on record that respondents have just recently engaged in or converted
to the business of breeding cattle after the enactment of the CARL that may lead one to suspect that respondents
intended to evade its coverage. It must be stressed that what the CARL prohibits is theconversion of agricultural
lands for non-agricultural purposes after the effectivity of the CARL. There has been no change of business
interest in the case of respondents.
Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by Congress without
substantial change is an implied legislative approval and adoption of the previous law. On the other hand, by making
a new law, Congress seeks to supersede an earlier one.19 In the case at bar, after the passage of the 1988 CARL,
Congress enacted R.A. No. 788120 which amended certain provisions of the CARL. Specifically, the new law
changed the definition of the terms "agricultural activity" and "commercial farming" by dropping from its
coverage lands that are devoted to commercial livestock, poultry and swine-raising.21 With this significant
modification, Congress clearly sought to align the provisions of our agrarian laws with the intent of the
1987 Constitutional Commission to exclude livestock farms from the coverage of agrarian reform.
In sum, it is doctrinal that rules of administrative bodies must be in harmony with the provisions of the Constitution.
They cannot amend or extend the Constitution. To be valid, they must conform to and be consistent with the
Constitution. In case of conflict between an administrative order and the provisions of the Constitution, the latter
prevails.22 The assailed A.O. of petitioner DAR was properly stricken down as unconstitutional as it enlarges the
coverage of agrarian reform beyond the scope intended by the 1987 Constitution.
IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision and Resolution of the Court of Appeals,
dated September 19, 2003 and February 4, 2004, respectively, are AFFIRMED. No pronouncement as to costs.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 182332

February 23, 2011

MILESTONE FARMS, INC., Petitioner,


vs.
OFFICE OF THE PRESIDENT, Respondent.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure, seeking the
reversal of the Court of Appeals (CA) Amended Decision2 dated October 4, 2006 and its Resolution3 dated March
27, 2008.
The Facts
Petitioner Milestone Farms, Inc. (petitioner) was incorporated with the Securities and Exchange Commission on
January 8, 1960.4 Among its pertinent secondary purposes are: (1) to engage in the raising of cattle, pigs, and other
livestock; to acquire lands by purchase or lease, which may be needed for this purpose; and to sell and otherwise
dispose of said cattle, pigs, and other livestock and their produce when advisable and beneficial to the corporation;
(2) to breed, raise, and sell poultry; to purchase or acquire and sell, or otherwise dispose of the supplies, stocks,
equipment, accessories, appurtenances, products, and by-products of said business; and (3) to import cattle, pigs,
and other livestock, and animal food necessary for the raising of said cattle, pigs, and other livestock as may be
authorized by law.5
On June 10, 1988, a new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), took effect, which included the raising of livestock, poultry, and swine
in its coverage. However, on December 4, 1990, this Court, sitting en banc, ruled in Luz Farms v. Secretary of the
Department of Agrarian Reform6 that agricultural lands devoted to livestock, poultry, and/or swine raising are
excluded from the Comprehensive Agrarian Reform Program (CARP).
Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422-hectare property, covered by
Transfer Certificate of Title Nos. (T-410434) M-15750, (T-486101) M-7307, (T-486102) M-7308, (T-274129) M15751, (T-486103) M-7309, (T-486104) M-7310, (T-332694) M-15755, (T-486105) M-7311, (T-486106) M-7312, M8791, (T-486107) M-7313, (T-486108) M-7314, M-8796, (T-486109) M-7315, (T-486110) M-9508, and M-6013, and
located in Pinugay, Baras, Rizal, from the coverage of the CARL, pursuant to the aforementioned ruling of this Court
in Luz Farms.
Meanwhile, on December 27, 1993, the Department of Agrarian Reform (DAR) issued Administrative Order No. 9,
Series of 1993 (DAR A.O. No. 9), setting forth rules and regulations to govern the exclusion of agricultural lands
used for livestock, poultry, and swine raising from CARP coverage. Thus, on January 10, 1994, petitioner redocumented its application pursuant to DAR A.O. No. 9.7
Acting on the said application, the DARs Land Use Conversion and Exemption Committee (LUCEC) of Region IV
conducted an ocular inspection on petitioners property and arrived at the following findings:
[T]he actual land utilization for livestock, swine and poultry is 258.8422 hectares; the area which served as
infrastructure is 42.0000 hectares; ten (10) hectares are planted to corn and the remaining five (5) hectares are
devoted to fish culture; that the livestock population are 371 heads of cow, 20 heads of horses, 5,678 heads of
swine and 788 heads of cocks; that the area being applied for exclusion is far below the required or ideal area which
is 563 hectares for the total livestock population; that the approximate area not directly used for livestock purposes

with an area of 15 hectares, more or less, is likewise far below the allowable 10% variance; and, though not directly
used for livestock purposes, the ten (10) hectares planted to sweet corn and the five (5) hectares devoted to
fishpond could be considered supportive to livestock production.
The LUCEC, thus, recommended the exemption of petitioners 316.0422-hectare property from the coverage of
CARP. Adopting the LUCECs findings and recommendation, DAR Regional Director Percival Dalugdug (Director
Dalugdug) issued an Order dated June 27, 1994, exempting petitioners 316.0422-hectare property from CARP.8
The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. (Pinugay Farmers), represented by Timiano
Balajadia, Sr. (Balajadia), moved for the reconsideration of the said Order, but the same was denied by Director
Dalugdug in his Order dated November 24, 1994.9 Subsequently, the Pinugay Farmers filed a letter-appeal with the
DAR Secretary.
Correlatively, on June 4, 1994, petitioner filed a complaint for Forcible Entry against Balajadia and company before
the Municipal Circuit Trial Court (MCTC) of Teresa-Baras, Rizal, docketed as Civil Case No. 781-T.10 The MCTC
ruled in favor of petitioner, but the decision was later reversed by the Regional Trial Court, Branch 80, of Tanay,
Rizal. Ultimately, the case reached the CA, which, in its Decision11 dated October 8, 1999, reinstated the MCTCs
ruling, ordering Balajadia and all defendants therein to vacate portions of the property covered by TCT Nos. M-6013,
M-8796, and M-8791. In its Resolution12 dated July 31, 2000, the CA held that the defendants therein failed to timely
file a motion for reconsideration, given the fact that their counsel of record received its October 8, 1999 Decision;
hence, the same became final and executory.
In the meantime, R.A. No. 6657 was amended by R.A. No. 7881,13 which was approved on February 20, 1995.
Private agricultural lands devoted to livestock, poultry, and swine raising were excluded from the coverage of the
CARL. On October 22, 1996, the fact-finding team formed by the DAR Undersecretary for Field Operations and
Support Services conducted an actual headcount of the livestock population on the property. The headcount
showed that there were 448 heads of cattle and more than 5,000 heads of swine.
The DAR Secretarys Ruling
On January 21, 1997, then DAR Secretary Ernesto D. Garilao (Secretary Garilao) issued an Order exempting from
CARP only 240.9776 hectares of the 316.0422 hectares previously exempted by Director Dalugdug, and declaring
75.0646 hectares of the property to be covered by CARP.14
Secretary Garilao opined that, for private agricultural lands to be excluded from CARP, they must already be
devoted to livestock, poultry, and swine raising as of June 15, 1988, when the CARL took effect. He found that the
Certificates of Ownership of Large Cattle submitted by petitioner showed that only 86 heads of cattle were
registered in the name of petitioners president, Misael Vera, Jr., prior to June 15, 1988; 133 were subsequently
bought in 1990, while 204 were registered from 1992 to 1995. Secretary Garilao gave more weight to the certificates
rather than to the headcount because "the same explicitly provide for the number of cattle owned by petitioner as of
June 15, 1988."
Applying the animal-land ratio (1 hectare for grazing for every head of cattle/carabao/horse) and the infrastructureanimal ratio (1.7815 hectares for 21 heads of cattle/carabao/horse, and 0.5126 hectare for 21 heads of hogs) under
DAR A.O. No. 9, Secretary Garilao exempted 240.9776 hectares of the property, as follows:
1. 86 hectares for the 86 heads of cattle existing as of 15 June 1988;
2. 8 hectares for infrastructure following the ratio of 1.7815 hectares for every 21 heads of cattle;
3. 8 hectares for the 8 horses;
4. 0.3809 square meters of infrastructure for the 8 horses; [and]
5. 138.5967 hectares for the 5,678 heads of swine.15

Petitioner filed a Motion for Reconsideration,16 submitting therewith copies of Certificates of Transfer of Large Cattle
and additional Certificates of Ownership of Large Cattle issued to petitioner prior to June 15, 1988, as additional
proof that it had met the required animal-land ratio. Petitioner also submitted a copy of a Disbursement Voucher
dated December 17, 1986, showing the purchase of 100 heads of cattle by the Bureau of Animal Industry from
petitioner, as further proof that it had been actively operating a livestock farm even before June 15, 1988. However,
in his Order dated April 15, 1997, Secretary Garilao denied petitioners Motion for Reconsideration.17
Aggrieved, petitioner filed its Memorandum on Appeal18 before the Office of the President (OP).
The OPs Ruling
On February 4, 2000, the OP rendered a decision19 reinstating Director Dalugdugs Order dated June 27, 1994 and
declared the entire 316.0422-hectare property exempt from the coverage of CARP.
However, on separate motions for reconsideration of the aforesaid decision filed by farmer-groups Samahang AnakPawis ng Lagundi (SAPLAG) and Pinugay Farmers, and the Bureau of Agrarian Legal Assistance of DAR, the OP
issued a resolution20 dated September 16, 2002, setting aside its previous decision. The dispositive portion of the
OP resolution reads:
WHEREFORE, the Decision subject of the instant separate motions for reconsideration is hereby SET ASIDE and a
new one entered REINSTATING the Order dated 21 January 1997 of then DAR Secretary Ernesto D. Garilao, as
reiterated in another Order of 15 April 1997, without prejudice to the outcome of the continuing review and
verification proceedings that DAR, thru the appropriate Municipal Agrarian Reform Officer, may undertake pursuant
to Rule III (D) of DAR Administrative Order No. 09, series of 1993.
SO ORDERED.21
The OP held that, when it comes to proof of ownership, the reference is the Certificate of Ownership of Large Cattle.
Certificates of cattle ownership, which are readily available being issued by the appropriate government office
ought to match the number of heads of cattle counted as existing during the actual headcount. The presence of
large cattle on the land, without sufficient proof of ownership thereof, only proves such presence.
Taking note of Secretary Garilaos observations, the OP also held that, before an ocular investigation is conducted
on the property, the landowners are notified in advance; hence, mere reliance on the physical headcount is
dangerous because there is a possibility that the landowners would increase the number of their cattle for
headcount purposes only. The OP observed that there was a big variance between the actual headcount of 448
heads of cattle and only 86 certificates of ownership of large cattle.
Consequently, petitioner sought recourse from the CA.22
The Proceedings Before the CA and Its Rulings
On April 29, 2005, the CA found that, based on the documentary evidence presented, the property subject of the
application for exclusion had more than satisfied the animal-land and infrastructure-animal ratios under DAR A.O.
No. 9. The CA also found that petitioner applied for exclusion long before the effectivity of DAR A.O. No. 9, thus,
negating the claim that petitioner merely converted the property for livestock, poultry, and swine raising in order to
exclude it from CARP coverage. Petitioner was held to have actually engaged in the said business on the property
even before June 15, 1988. The CA disposed of the case in this wise:
WHEREFORE, the instant petition is hereby GRANTED. The assailed Resolution of the Office of the President
dated September 16, 2002 is hereby SET ASIDE, and its Decision dated February 4, 2000 declaring the entire
316.0422 hectares exempt from the coverage of the Comprehensive Agrarian Reform Program is hereby
REINSTATED without prejudice to the outcome of the continuing review and verification proceedings which the
Department of Agrarian Reform, through the proper Municipal Agrarian Reform Officer, may undertake pursuant to
Policy Statement (D) of DAR Administrative Order No. 9, Series of 1993.
SO ORDERED.23

Meanwhile, six months earlier, or on November 4, 2004, without the knowledge of the CA as the parties did not
inform the appellate court then DAR Secretary Rene C. Villa (Secretary Villa) issued DAR Conversion Order No.
CON-0410-001624 (Conversion Order), granting petitioners application to convert portions of the 316.0422-hectare
property from agricultural to residential and golf courses use. The portions converted with a total area of 153.3049
hectares were covered by TCT Nos. M-15755 (T-332694), M-15751 (T-274129), and M-15750 (T-410434). With
this Conversion Order, the area of the property subject of the controversy was effectively reduced to 162.7373
hectares.
On the CAs decision of April 29, 2005, Motions for Reconsideration were filed by farmer-groups, namely: the
farmers represented by Miguel Espinas25 (Espinas group), the Pinugay Farmers,26 and the SAPLAG.27 The farmergroups all claimed that the CA should have accorded respect to the factual findings of the OP. Moreover, the farmergroups unanimously intimated that petitioner already converted and developed a portion of the property into a
leisure-residential-commercial estate known as the Palo Alto Leisure and Sports Complex (Palo Alto).
Subsequently, in a Supplement to the Motion for Reconsideration on Newly Secured Evidence pursuant to DAR
Administrative Order No. 9, Series of 199328 (Supplement) dated June 15, 2005, the Espinas group submitted the
following as evidence:
1) Conversion Order29 dated November 4, 2004, issued by Secretary Villa, converting portions of the
property from agricultural to residential and golf courses use, with a total area of 153.3049 hectares; thus,
the Espinas group prayed that the remaining 162.7373 hectares (subject property) be covered by the CARP;
2) Letter30 dated June 7, 2005 of both incoming Municipal Agrarian Reform Officer (MARO) Bismark M. Elma
(MARO Elma) and outgoing MARO Cesar C. Celi (MARO Celi) of Baras, Rizal, addressed to Provincial
Agrarian Reform Officer (PARO) II of Rizal, Felixberto Q. Kagahastian, (MARO Report), informing the latter,
among others, that Palo Alto was already under development and the lots therein were being offered for
sale; that there were actual tillers on the subject property; that there were agricultural improvements thereon,
including an irrigation system and road projects funded by the Government; that there was no existing
livestock farm on the subject property; and that the same was not in the possession and/or control of
petitioner; and
3) Certification31 dated June 8, 2005, issued by both MARO Elma and MARO Celi, manifesting that the
subject property was in the possession and cultivation of actual occupants and tillers, and that, upon
inspection, petitioner maintained no livestock farm thereon.
Four months later, the Espinas group and the DAR filed their respective Manifestations.32 In its Manifestation dated
November 29, 2005, the DAR confirmed that the subject property was no longer devoted to cattle raising. Hence, in
its Resolution33 dated December 21, 2005, the CA directed petitioner to file its comment on the Supplement and the
aforementioned Manifestations. Employing the services of a new counsel, petitioner filed a Motion to Admit
Rejoinder,34 and prayed that the MARO Report be disregarded and expunged from the records for lack of factual
and legal basis.
With the CA now made aware of these developments, particularly Secretary Villas Conversion Order of November
4, 2004, the appellate court had to acknowledge that the property subject of the controversy would now be limited to
the remaining 162.7373 hectares. In the same token, the Espinas group prayed that this remaining area be covered
by the CARP.35
On October 4, 2006, the CA amended its earlier Decision. It held that its April 29, 2005 Decision was theoretically
not final because DAR A.O. No. 9 required the MARO to make a continuing review and verification of the subject
property. While the CA was cognizant of our ruling in Department of Agrarian Reform v. Sutton,36 wherein we
declared DAR A.O. No. 9 as unconstitutional, it still resolved to lift the exemption of the subject property from the
CARP, not on the basis of DAR A.O. No. 9, but on the strength of evidence such as the MARO Report and
Certification, and the Katunayan37 issued by the Punong Barangay, Alfredo Ruba (Chairman Ruba), of Pinugay,
Baras, Rizal, showing that the subject property was no longer operated as a livestock farm. Moreover, the CA held
that the lease agreements,38 which petitioner submitted to prove that it was compelled to lease a ranch as temporary
shelter for its cattle, only reinforced the DARs finding that there was indeed no existing livestock farm on the subject
property. While petitioner claimed that it was merely forced to do so to prevent further slaughtering of its cattle
allegedly committed by the occupants, the CA found the claim unsubstantiated. Furthermore, the CA opined that

petitioner should have asserted its rights when the irrigation and road projects were introduced by the Government
within its property. Finally, the CA accorded the findings of MARO Elma and MARO Celi the presumption of
regularity in the performance of official functions in the absence of evidence proving misconduct and/or dishonesty
when they inspected the subject property and rendered their report. Thus, the CA disposed:
WHEREFORE, this Courts Decision dated April 29, 2005 is hereby amended in that the exemption of the subject
landholding from the coverage of the Comprehensive Agrarian Reform Program is hereby lifted, and the 162.7373
hectare-agricultural portion thereof is hereby declared covered by the Comprehensive Agrarian Reform Program.
SO ORDERED.39
Unperturbed, petitioner filed a Motion for Reconsideration.40 On January 8, 2007, MARO Elma, in compliance with
the Memorandum of DAR Regional Director Dominador B. Andres, tendered another Report41 reiterating that, upon
inspection of the subject property, together with petitioners counsel-turned witness, Atty. Grace Eloisa J. Que (Atty.
Que), PARO Danilo M. Obarse, Chairman Ruba, and several occupants thereof, he, among others, found no
livestock farm within the subject property. About 43 heads of cattle were shown, but MARO Elma observed that the
same were inside an area adjacent to Palo Alto. Subsequently, upon Atty. Ques request for reinvestigation,
designated personnel of the DAR Provincial and Regional Offices (Investigating Team) conducted another ocular
inspection on the subject property on February 20, 2007. The Investigating Team, in its Report42dated February 21,
2007, found that, per testimony of petitioners caretaker, Rogelio Ludivices (Roger),43petitioner has 43 heads of
cattle taken care of by the following individuals: i) Josefino Custodio (Josefino) 18 heads; ii) Andy Amahit 15
heads; and iii) Bert Pangan 2 heads; that these individuals pastured the herd of cattle outside the subject property,
while Roger took care of 8 heads of cattle inside the Palo Alto area; that 21 heads of cattle owned by petitioner were
seen in the area adjacent to Palo Alto; that Josefino confirmed to the Investigating Team that he takes care of 18
heads of cattle owned by petitioner; that the said Investigating Team saw 9 heads of cattle in the Palo Alto area, 2 of
which bore "MFI" marks; and that the 9 heads of cattle appear to have matched the Certificates of Ownership of
Large Cattle submitted by petitioner.
Because of the contentious factual issues and the conflicting averments of the parties, the CA set the case for
hearing and reception of evidence on April 24, 2007.44 Thereafter, as narrated by the CA, the following events
transpired:
On May 17, 2007, [petitioner] presented the Judicial Affidavits of its witnesses, namely, [petitioners] counsel, [Atty.
Que], and the alleged caretaker of [petitioners] farm, [Roger], who were both cross-examined by counsel for
farmers-movants and SAPLAG. [Petitioner] and SAPLAG then marked their documentary exhibits.
On May 24, 2007, [petitioners] security guard and third witness, Rodolfo G. Febrada, submitted his Judicial Affidavit
and was cross-examined by counsel for fa[r]mers-movants and SAPLAG. Farmers-movants also marked their
documentary exhibits.
Thereafter, the parties submitted their respective Formal Offers of Evidence. Farmers-movants and SAPLAG filed
their objections to [petitioners] Formal Offer of Evidence. Later, [petitioner] and farmers-movants filed their
respective Memoranda.
In December 2007, this Court issued a Resolution on the parties offer of evidence and considered [petitioners]
Motion for Reconsideration submitted for resolution.45
Finally, petitioners motion for reconsideration was denied by the CA in its Resolution46 dated March 27, 2008. The
CA discarded petitioners reliance on Sutton. It ratiocinated that the MARO Reports and the DARs Manifestation
could not be disregarded simply because DAR A.O. No. 9 was declared unconstitutional. The Sutton ruling was
premised on the fact that the Sutton property continued to operate as a livestock farm. The CA also reasoned that,
in Sutton, this Court did not remove from the DAR the power to implement the CARP, pursuant to the latters
authority to oversee the implementation of agrarian reform laws under Section 5047 of the CARL. Moreover, the CA
found:
Petitioner-appellant claimed that they had 43 heads of cattle which are being cared for and pastured by 4
individuals. To prove its ownership of the said cattle, petitioner-appellant offered in evidence 43 Certificates of
Ownership of Large Cattle. Significantly, however, the said Certificates were all dated and issued on November 24,

2006, nearly 2 months after this Court rendered its Amended Decision lifting the exemption of the 162-hectare
portion of the subject landholding. The acquisition of such cattle after the lifting of the exemption clearly reveals that
petitioner-appellant was no longer operating a livestock farm, and suggests an effort to create a semblance of
livestock-raising for the purpose of its Motion for Reconsideration.48
On petitioners assertion that between MARO Elmas Report dated January 8, 2007 and the Investigating Teams
Report, the latter should be given credence, the CA held that there were no material inconsistencies between the
two reports because both showed that the 43 heads of cattle were found outside the subject property.
Hence, this Petition assigning the following errors:
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT LANDS DEVOTED
TO LIVESTOCK FARMING WITHIN THE MEANING OF LUZ FARMS AND SUTTON, AND WHICH ARE
THEREBY EXEMPT FROM CARL COVERAGE, ARE NEVERTHELESS SUBJECT TO DARS
CONTINUING VERIFICATION AS TO USE, AND, ON THE BASIS OF SUCH VERIFICATION, MAY BE
ORDERED REVERTED TO AGRICULTURAL CLASSIFICATION AND COMPULSORY ACQUISITION[;]
II.
GRANTING THAT THE EXEMPT LANDS AFORESAID MAY BE SO REVERTED TO AGRICULTURAL
CLASSIFICATION, STILL THE PROCEEDINGS FOR SUCH PURPOSE BELONGS TO THE EXCLUSIVE
ORIGINAL JURISDICTION OF THE DAR, BEFORE WHICH THE CONTENDING PARTIES MAY
VENTILATE FACTUAL ISSUES, AND AVAIL THEMSELVES OF USUAL REVIEW PROCESSES, AND
NOT TO THE COURT OF APPEALS EXERCISING APPELLATE JURISDICTION OVER ISSUES
COMPLETELY UNRELATED TO REVERSION [; AND]
III.
IN ANY CASE, THE COURT OF APPEALS GRAVELY ERRED AND COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT HELD THAT THE PROPERTY IN DISPUTE IS NO LONGER BEING USED FOR
LIVESTOCK FARMING.49
Petitioner asseverates that lands devoted to livestock farming as of June 15, 1988 are classified as industrial lands,
hence, outside the ambit of the CARP; that Luz Farms, Sutton, and R.A. No. 7881 clearly excluded such lands on
constitutional grounds; that petitioners lands were actually devoted to livestock even before the enactment of the
CARL; that livestock farms are exempt from the CARL, not by reason of any act of the DAR, but because of their
nature as industrial lands; that petitioners property was admittedly devoted to livestock farming as of June 1988 and
the only issue before was whether or not petitioners pieces of evidence comply with the ratios provided under DAR
A.O. No. 9; and that DAR A.O. No. 9 having been declared as unconstitutional, DAR had no more legal basis to
conduct a continuing review and verification proceedings over livestock farms. Petitioner argues that, in cases
where reversion of properties to agricultural use is proper, only the DAR has the exclusive original jurisdiction to
hear and decide the same; hence, the CA, in this case, committed serious errors when it ordered the reversion of
the property and when it considered pieces of evidence not existing as of June 15, 1988, despite its lack of
jurisdiction; that the CA should have remanded the case to the DAR due to conflicting factual claims; that the CA
cannot ventilate allegations of fact that were introduced for the first time on appeal as a supplement to a motion for
reconsideration of its first decision, use the same to deviate from the issues pending review, and, on the basis
thereof, declare exempt lands reverted to agricultural use and compulsorily covered by the CARP; that the "newly
discovered [pieces of] evidence" were not introduced in the proceedings before the DAR, hence, it was erroneous
for the CA to consider them; and that piecemeal presentation of evidence is not in accord with orderly justice.
Finally, petitioner submits that, in any case, the CA gravely erred and committed grave abuse of discretion when it
held that the subject property was no longer used for livestock farming as shown by the Report of the Investigating
Team. Petitioner relies on the 1997 LUCEC and DAR findings that the subject property was devoted to livestock
farming, and on the 1999 CA Decision which held that the occupants of the property were squatters, bereft of any
authority to stay and possess the property.50

On one hand, the farmer-groups, represented by the Espinas group, contend that they have been planting rice and
fruit-bearing trees on the subject property, and helped the National Irrigation Administration in setting up an irrigation
system therein in 1997, with a produce of 1,500 to 1,600 sacks of palay each year; that petitioner came to court with
unclean hands because, while it sought the exemption and exclusion of the entire property, unknown to the CA,
petitioner surreptitiously filed for conversion of the property now known as Palo Alto, which was actually granted by
the DAR Secretary; that petitioners bad faith is more apparent since, despite the conversion of the 153.3049hectare portion of the property, it still seeks to exempt the entire property in this case; and that the fact that
petitioner applied for conversion is an admission that indeed the property is agricultural. The farmer-groups also
contend that petitioners reliance on Luz Farms and Sutton is unavailing because in these cases there was actually
no cessation of the business of raising cattle; that what is being exempted is the activity of raising cattle and not the
property itself; that exemptions due to cattle raising are not permanent; that the declaration of DAR A.O. No. 9 as
unconstitutional does not at all diminish the mandated duty of the DAR, as the lead agency of the Government, to
implement the CARL; that the DAR, vested with the power to identify lands subject to CARP, logically also has the
power to identify lands which are excluded and/or exempted therefrom; that to disregard DARs authority on the
matter would open the floodgates to abuse and fraud by unscrupulous landowners; that the factual finding of the CA
that the subject property is no longer a livestock farm may not be disturbed on appeal, as enunciated by this Court;
that DAR conducted a review and monitoring of the subject property by virtue of its powers under the CARL; and
that the CA has sufficient discretion to admit evidence in order that it could arrive at a fair, just, and equitable ruling
in this case.51
On the other hand, respondent OP, through the Office of the Solicitor General (OSG), claims that the CA correctly
held that the subject property is not exempt from the coverage of the CARP, as substantial pieces of evidence show
that the said property is not exclusively devoted to livestock, swine, and/or poultry raising; that the issues presented
by petitioner are factual in nature and not proper in this case; that under Rule 43 of the 1997 Rules of Civil
Procedure, questions of fact may be raised by the parties and resolved by the CA; that due to the divergence in the
factual findings of the DAR and the OP, the CA was duty bound to review and ascertain which of the said findings
are duly supported by substantial evidence; that the subject property was subject to continuing review and
verification proceedings due to the then prevailing DAR A.O. No. 9; that there is no question that the power to
determine if a property is subject to CARP coverage lies with the DAR Secretary; that pursuant to such power, the
MARO rendered the assailed reports and certification, and the DAR itself manifested before the CA that the subject
property is no longer devoted to livestock farming; and that, while it is true that this Courts ruling in Luz Farms
declared that agricultural lands devoted to livestock, poultry, and/or swine raising are excluded from the CARP, the
said ruling is not without any qualification.52
In its Reply53 to the farmer-groups and to the OSGs comment, petitioner counters that the farmer-groups have no
legal basis to their claims as they admitted that they entered the subject property without the consent of petitioner;
that the rice plots actually found in the subject property, which were subsequently taken over by squatters, were, in
fact, planted by petitioner in compliance with the directive of then President Ferdinand Marcos for the employer to
provide rice to its employees; that when a land is declared exempt from the CARP on the ground that it is not
agricultural as of the time the CARL took effect, the use and disposition of that land is entirely and forever beyond
DARs jurisdiction; and that, inasmuch as the subject property was not agricultural from the very beginning, DAR has
no power to regulate the same. Petitioner also asserts that the CA cannot uncharacteristically assume the role of
trier of facts and resolve factual questions not previously adjudicated by the lower tribunals; that MARO Elma
rendered the assailed MARO reports with bias against petitioner, and the same were contradicted by the
Investigating Teams Report, which confirmed that the subject property is still devoted to livestock farming; and that
there has been no change in petitioners business interest as an entity engaged in livestock farming since its
inception in 1960, though there was admittedly a decline in the scale of its operations due to the illegal acts of the
squatter-occupants.
Our Ruling
The Petition is bereft of merit.
Let it be stressed that when the CA provided in its first Decision that continuing review and verification may be
conducted by the DAR pursuant to DAR A.O. No. 9, the latter was not yet declared unconstitutional by this Court.
The first CA Decision was promulgated on April 29, 2005, while this Court struck down as unconstitutional DAR A.O.
No. 9, by way of Sutton, on October 19, 2005. Likewise, let it be emphasized that the Espinas group filed the
Supplement and submitted the assailed MARO reports and certification on June 15, 2005, which proved to be

adverse to petitioners case. Thus, it could not be said that the CA erred or gravely abused its discretion in
respecting the mandate of DAR A.O. No. 9, which was then subsisting and in full force and effect.
While it is true that an issue which was neither alleged in the complaint nor raised during the trial cannot be raised
for the first time on appeal as it would be offensive to the basic rules of fair play, justice, and due process,54 the
same is not without exception,55 such as this case. The CA, under Section 3,56 Rule 43 of the Rules of Civil
Procedure, can, in the interest of justice, entertain and resolve factual issues. After all, technical and procedural
rules are intended to help secure, and not suppress, substantial justice. A deviation from a rigid enforcement of the
rules may thus be allowed to attain the prime objective of dispensing justice, for dispensation of justice is the core
reason for the existence of courts.57 Moreover, petitioner cannot validly claim that it was deprived of due process
because the CA afforded it all the opportunity to be heard.58 The CA even directed petitioner to file its comment on
the Supplement, and to prove and establish its claim that the subject property was excluded from the coverage of
the CARP. Petitioner actively participated in the proceedings before the CA by submitting pleadings and pieces of
documentary evidence, such as the Investigating Teams Report and judicial affidavits. The CA also went further by
setting the case for hearing. In all these proceedings, all the parties rights to due process were amply protected and
recognized.
With the procedural issue disposed of, we find that petitioners arguments fail to persuade. Its invocation of Sutton is
unavailing. In Sutton, we held:
In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to
regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention
limit for their ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent to
exclude, inter alia, all lands exclusively devoted to livestock, swine and poultry-raising. The Court clarified in
the Luz Farms case that livestock, swine and poultry-raising are industrial activities and do not fall within the
definition of "agriculture" or "agricultural activity." The raising of livestock, swine and poultry 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
the form of industrial fixed assets, such as: animal housing structures and facilities, drainage, waterers and blowers,
feedmill with grinders, mixers, conveyors, exhausts and generators, extensive warehousing facilities for feeds and
other supplies, anti-pollution equipment like bio-gas and digester plants augmented by lagoons and concrete ponds,
deepwells, elevated water tanks, pumphouses, sprayers, and other technological appurtenances.
Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution
from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.59
Indeed, as pointed out by the CA, the instant case does not rest on facts parallel to those of Sutton because, in
Sutton, the subject property remained a livestock farm. We even highlighted therein the fact that "there has been no
change of business interest in the case of respondents."60 Similarly, in Department of Agrarian Reform v. Uy,61we
excluded a parcel of land from CARP coverage due to the factual findings of the MARO, which were confirmed by
the DAR, that the property was entirely devoted to livestock farming. However, in A.Z. Arnaiz Realty, Inc.,
represented by Carmen Z. Arnaiz v. Office of the President; Department of Agrarian Reform; Regional Director,
DAR Region V, Legaspi City; Provincial Agrarian Reform Officer, DAR Provincial Office, Masbate, Masbate; and
Municipal Agrarian Reform Officer, DAR Municipal Office, Masbate, Masbate,62 we denied a similar petition for
exemption and/or exclusion, by according respect to the CAs factual findings and its reliance on the findings of the
DAR and the OP that
the subject parcels of land were not directly, actually, and exclusively used for pasture.63
Petitioners admission that, since 2001, it leased another ranch for its own livestock is fatal to its cause.64 While
petitioner advances a defense that it leased this ranch because the occupants of the subject property harmed its
cattle, like the CA, we find it surprising that not even a single police and/or barangay report was filed by petitioner to
amplify its indignation over these alleged illegal acts. Moreover, we accord respect to the CAs keen observation that
the assailed MARO reports and the Investigating Teams Report do not actually contradict one another, finding that
the 43 cows, while owned by petitioner, were actually pastured outside the subject property.
Finally, it is established that issues of Exclusion and/or Exemption are characterized as Agrarian Law
Implementation (ALI) cases which are well within the DAR Secretarys competence and jurisdiction.65 Section 3,
Rule II of the 2003 Department of Agrarian Reform Adjudication Board Rules of Procedure provides:

Section 3. Agrarian Law Implementation Cases.


The Adjudicator or the Board shall have no jurisdiction over matters involving the administrative implementation of
RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian
laws as enunciated by pertinent rules and administrative orders, which shall be under the exclusive prerogative of
and cognizable by the Office of the Secretary of the DAR in accordance with his issuances, to wit:
xxxx
3.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising.
Thus, we cannot, without going against the law, arbitrarily strip the DAR Secretary of his legal mandate to exercise
jurisdiction and authority over all ALI cases. To succumb to petitioners contention that "when a land is declared
exempt from the CARP on the ground that it is not agricultural as of the time the CARL took effect, the use and
disposition of that land is entirely and forever beyond DARs jurisdiction" is dangerous, suggestive of self-regulation.
Precisely, it is the DAR Secretary who is vested with such jurisdiction and authority to exempt and/or exclude a
property from CARP coverage based on the factual circumstances of each case and in accordance with law and
applicable jurisprudence. In addition, albeit parenthetically, Secretary Villa had already granted the conversion into
residential and golf courses use of nearly one-half of the entire area originally claimed as exempt from CARP
coverage because it was allegedly devoted to livestock production.
lawphil 1

In sum, we find no reversible error in the assailed Amended Decision and Resolution of the CA which would warrant
the modification, much less the reversal, thereof.
WHEREFORE, the Petition is DENIED and the Court of Appeals Amended Decision dated October 4, 2006 and
Resolution dated March 27, 2008 are AFFIRMED. No costs.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 103125 May 17, 1993


PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R. VILLAFUERTE and HON. BENJAMIN V.
PANGA as Presiding Judge of RTC Branch 33 at Pili, Camarines Sur, petitioners,
vs.
THE COURT OF APPEALS (THIRD DIVISION), ERNESTO SAN JOAQUIN and EFREN SAN
JOAQUIN,respondents.
The Provincial Attorney for petitioners.
Reynaldo L. Herrera for Ernesto San Joaquin.

QUIASON, J.:
In this appeal by certiorari from the decision of the Court of Appeals in AC-G.R. SP No. 20551 entitled "Ernesto N.
San Joaquin, et al., v. Hon. Benjamin V. Panga, et al.," this Court is asked to decide whether the expropriation of
agricultural lands by local government units is subject, to the prior approval of the Secretary of the Agrarian Reform,
as the implementator of the agrarian reform program.
On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur passed Resolution No.
129, Series of 1988, authorizing the Provincial Governor to purchase or expropriate property contiguous to the
provincial capitol site, in order to establish a pilot farm for non-food and non-traditional agricultural crops and a
housing project for provincial government employees.
The "WHEREAS" clause o:f the Resolution states:
WHEREAS, the province of Camarines Sur has adopted a five-year Comprehensive Development
plan, some of the vital components of which includes the establishment of model and pilot farm for
non-food and non-traditional agricultural crops, soil testing and tissue culture laboratory centers, 15
small scale technology soap making, small scale products of plaster of paris, marine biological and
sea farming research center,and other progressive feasibility concepts objective of which is to
provide the necessary scientific and technology know-how to farmers and fishermen in Camarines
Sur and to establish a housing project for provincial government employees;
WHEREAS, the province would need additional land to be acquired either by purchase or
expropriation to implement the above program component;
WHEREAS, there are contiguous/adjacent properties to be (sic) present Provincial Capitol Site
ideally suitable to establish the same pilot development center;
WHEREFORE . . . .
Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, Hon. Luis R.Villafuerte, filed two
separate cases for expropriation against Ernesto N. San Joaquin and Efren N. San Joaquin, docketed as Special
Civil Action Nos. P-17-89 and P-19-89 of the Regional Trial Court, Pili, Camarines Sur, presided by the Hon.
Benjamin V. Panga.

Forthwith, the Province of Camarines Sur filed a motion for the issuance of writ of possession. The San Joaquins
failed to appear at the hearing of the motion.
The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered for their
property. In an order dated December 6, 1989, the trial court denied the motion to dismiss and authorized the
Province of Camarines Sur to take possession of the property upon the deposit with the Clerk of Court of the
amount of P5,714.00, the amount provisionally fixed by the trial court to answer for damages that private
respondents may suffer in the event that the expropriation cases do not prosper. The trial court issued a writ of
possession in an order dated January18, 1990.
The San Joaquins filed a motion for relief from the order, authorizing the Province of Camarines Sur to take
possession of their property and a motion to admit an amended motion to dismiss. Both motions were denied in the
order dated February 1990.
In their petition before the Court of Appeals, the San Joaquins asked: (a) that Resolution No. 129, Series of 1988 of
the Sangguniang Panlalawigan be declared null and void; (b) that the complaints for expropriation be dismissed;
and (c) that the order dated December 6, 1989 (i) denying the motion to dismiss and (ii) allowing the Province of
Camarines Sur to take possession of the property subject of the expropriation and the order dated February 26,
1990, denying the motion to admit the amended motion to dismiss, be set aside. They also asked that an order be
issued to restrain the trial court from enforcing the writ of possession, and thereafter to issue a writ of injunction.
In its answer to the petition, the Province of Camarines Sur claimed that it has the authority to initiate the
expropriation proceedings under Sections 4 and 7 of Local Government Code (B.P. Blg. 337) and that the
expropriations are for a public purpose.
Asked by the Court of Appeals to give his Comment to the petition, the Solicitor General stated that under Section 9
of the Local Government Code (B.P. Blg. 337), there was no need for the approval by the Office of the President of
the exercise by the Sangguniang Panlalawigan of the right of eminent domain. However, the Solicitor General
expressed the view that the Province of Camarines Sur must first secure the approval of the Department of Agrarian
Reform of the plan to expropriate the lands of petitioners for use as a housing project.
The Court of Appeals set aside the order of the trial court, allowing the Province of Camarines Sur to take
possession of private respondents' lands and the order denying the admission of the amended motion to dismiss. It
also ordered the trial court to suspend the expropriation proceedings until after the Province of Camarines Sur shall
have submitted the requisite approval of the Department of Agrarian Reform to convert the classification of the
property of the private respondents from agricultural to non-agricultural land.
Hence this petition.
It must be noted that in the Court of Appeals, the San Joaquins asked for: (i) the dismissal of the complaints for
expropriation on the ground of the inadequacy of the compensation offered for the property and (ii) the nullification
of Resolution No. 129, Series of 1988 of the Sangguniang Panlalawigan of the Province of Camarines Sur.
The Court of Appeals did not rule on the validity of the questioned resolution; neither did it dismiss the complaints.
However, when the Court of Appeals ordered the suspension of the proceedings until the Province of Camarines
Sur shall have obtained the authority of the Department of Agrarian Reform to change the classification of the lands
sought to be expropriated from agricultural to non-agricultural use, it assumed that the resolution is valid and that
the expropriation is for a public purpose or public use.
Modernly, there has been a shift from the literal to a broader interpretation of "public purpose" or "public use" for
which the power of eminent domain may be exercised. The old concept was that the condemned property must
actually be used by the general public (e.g. roads, bridges, public plazas, etc.) before the taking thereof could satisfy
the constitutional requirement of "public use". Under the new concept, "public use" means public advantage,
convenience or benefit, which tends to contribute to the general welfare and the prosperity of the whole community,
like a resort complex for tourists or housing project (Heirs of Juancho Ardano v. Reyes, 125 SCRA 220 [1983];
Sumulong v. Guerrero, 154 SC.RA 461 [1987]).

The expropriation of the property authorized by the questioned resolution is for a public purpose. The establishment
of a pilot development center would inure to the direct benefit and advantage of the people of the Province of
Camarines Sur. Once operational, the center would make available to the community invaluable information and
technology on agriculture, fishery and the cottage industry. Ultimately, the livelihood of the farmers, fishermen and
craftsmen would be enhanced. The housing project also satisfies the public purpose requirement of the Constitution.
As held in Sumulong v. Guerrero, 154 SCRA 461, "Housing is a basic human need. Shortage in housing is a matter
of state concern since it directly and significantly affects public health, safety, the environment and in sum the
general welfare."
It is the submission of the Province of Camarines Sur that its exercise of the power of eminent domain cannot be
restricted by the provisions of the Comprehensive Agrarian Reform Law (R.A. No. 6657), particularly Section 65
thereof, which requires the approval of the Department of Agrarian Reform before a parcel of land can be
reclassified from an agricultural to a non-agricultural land.
The Court of Appeals, following the recommendation of the Solicitor General, held that the Province of Camarines
Sur must comply with the provision of Section 65 of the Comprehensive Agrarian Reform Law and must first secure
the approval of the Department of Agrarian Reform of the plan to expropriate the lands of the San Joaquins.
In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners raised the issue of whether the Philippine Tourism
Authority can expropriate lands covered by the "Operation Land Transfer" for use of a tourist resort complex. There
was a finding that of the 282 hectares sought to be expropriated, only an area of 8,970 square meters or less than
one hectare was affected by the land reform program and covered by emancipation patents issued by the Ministry of
Agrarian Reform. While the Court said that there was "no need under the facts of this petition to rule on whether the
public purpose is superior or inferior to another purpose or engage in a balancing of competing public interest," it
upheld the expropriation after noting that petitioners had failed to overcome the showing that the taking of 8,970
square meters formed part of the resort complex. A fair and reasonable reading of the decision is that this Court
viewed the power of expropriation as superior to the power to distribute lands under the land reform program.
The Solicitor General denigrated the power to expropriate by the Province of Camarines Sur by stressing the fact
that local government units exercise such power only by delegation. (Comment, pp. 14-15; Rollo, pp. 128-129)
It is true that local government units have no inherent power of eminent domain and can exercise it only when
expressly authorized by the legislature (City of Cincinnati v. Vester, 28l US 439, 74 L.ed. 950, 50 SCt. 360). It is also
true that in delegating the power to expropriate, the legislature may retain certain control or impose certain restraints
on the exercise thereof by the local governments (Joslin Mfg. Co. v. Providence, 262 US 668 67 L. ed. 1167, 43 S
Ct. 684). While such delegated power may be a limited authority, it is complete within its limits. Moreover, the
limitations on the exercise of the delegated power must be clearly expressed, either in the law conferring the power
or in other legislations.
Resolution No. 129, Series of 1988, was promulgated pursuant to Section 9 of B.P. Blg. 337, the Local Government
Code, which provides:
A local government unit may, through its head and acting pursuant to a resolution of its sanggunian
exercise the right of eminent domain and institute condemnation proceedings for public use or
purpose.
Section 9 of B.P. Blg. 337 does not intimate in the least that local government, units must first secure the approval of
the Department of Land Reform for the conversion of lands from agricultural to non-agricultural use, before they can
institute the necessary expropriation proceedings. Likewise, there is no provision in the Comprehensive Agrarian
Reform Law which expressly subjects the expropriation of agricultural lands by local government units to the control
of the Department of Agrarian Reform. The closest provision of law that the Court of Appeals could cite to justify the
intervention of the Department of Agrarian Reform in expropriation matters is Section 65 of the Comprehensive
Agrarian Reform Law, which reads:
Sec. 65. Conversion of Lands. After the lapse of five (5) years from its award, when the land
ceases to be economically feasible and sound for, agricultural purposes, or the locality has become
urbanized and the land will have a greater economic value for residential, commercial or industrial
purposes, the DAR, upon application of the beneficiary or the landowner, with due notice to the

affected parties, and subject to existing laws, may authorize the reclassification or conversion of the
land and its disposition: Provided, That the beneficiary shall have fully paid his obligation.
The opening, adverbial phrase of the provision sends signals that it applies to lands previously placed under the
agrarian reform program as it speaks of "the lapse of five (5) years from its award."
The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No. 129-A, Series
of 1987, cannot be the source of the authority of the Department of Agrarian Reform to determine the suitability of a
parcel of agricultural land for the purpose to which it would be devoted by the expropriating authority. While those
rules vest on the Department of Agrarian Reform the exclusive authority to approve or disapprove conversions of
agricultural lands for residential, commercial or industrial uses, such authority is limited to the applications for
reclassification submitted by the land owners or tenant beneficiaries.
Statutes conferring the power of eminent domain to political subdivisions cannot be broadened or constricted by
implication (Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d. 241).
To sustain the Court of Appeals would mean that the local government units can no longer expropriate agricultural
lands needed for the construction of roads, bridges, schools, hospitals, etc, without first applying for conversion of
the use of the lands with the Department of Agrarian Reform, because all of these projects would naturally involve a
change in the land use. In effect, it would then be the Department of Agrarian Reform to scrutinize whether the
expropriation is for a public purpose or public use.
Ordinarily, it is the legislative branch of the local government unit that shall determine whether the use of the
property sought to be expropriated shall be public, the same being an expression of legislative policy. The courts
defer to such legislative determination and will intervene only when a particular undertaking has no real or
substantial relation to the public use (United States Ex Rel Tennessee Valley Authority v. Welch, 327 US 546, 90 L.
ed. 843, 66 S Ct 715; State ex rel Twin City Bldg. and Invest. Co. v. Houghton, 144 Minn. 1, 174 NW 885, 8 ALR
585).
There is also an ancient rule that restrictive statutes, no matter how broad their terms are, do not embrace the
sovereign unless the sovereign is specially mentioned as subject thereto (Alliance of Government Workers v.
Minister of Labor and Employment, 124 SCRA 1 [1983]). The Republic of the Philippines, as sovereign, or its
political subdivisions, as holders of delegated sovereign powers, cannot be bound by provisions of law couched in
general term.
The fears of private respondents that they will be paid on the basis of the valuation declared in the tax declarations
of their property, are unfounded. This Court has declared as unconstitutional the Presidential Decrees fixing the just
compensation in expropriation cases to be the value given to the condemned property either by the owners or the
assessor, whichever was lower ([Export Processing Zone Authority v. Dulay, 149 SCRA 305 [1987]). As held
in Municipality of Talisay v. Ramirez, 183 SCRA 528 [1990], the rules for determining just compensation are those
laid down in Rule 67 of the Rules of Court, which allow private respondents to submit evidence on what they
consider shall be the just compensation for their property.
WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals is set aside insofar as
it (a) nullifies the trial court's order allowing the Province of Camarines Sur to take possession of private
respondents' property; (b) orders the trial court to suspend the expropriation proceedings; and (c) requires the
Province of Camarines Sur to obtain the approval of the Department of Agrarian Reform to convert or reclassify
private respondents' property from agricultural to non-agricultural use.
The decision of the Court of Appeals is AFFIRMED insofar as it sets aside the order of the trial court, denying the
amended motion to dismiss of the private respondents.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 158228

March 23, 2004

DEPARTMENT OF AGRARIAN REFORM, as represented by its Secretary, ROBERTO M.


PAGDANGANAN,petitioner,
vs.
DEPARTMENT OF EDUCATION, CULTURE AND SPORTS (DECS), respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari seeks to set aside the decision1 of the Court of Appeals dated October 29, 2002
in CA-G.R. SP No. 64378, which reversed the August 30, 2000 decision of the Secretary of Agrarian Reform, as
well as the Resolution dated May 7, 2003, which denied petitioners motion for reconsideration.
In controversy are Lot No. 2509 and Lot No. 817-D consisting of an aggregate area of 189.2462 hectares located at
Hacienda Fe, Escalante, Negros Occidental and Brgy. Gen. Luna, Sagay, Negros Occidental, respectively. On
October 21, 1921, these lands were donated by the late Esteban Jalandoni to respondent DECS (formerly Bureau of
Education).2 Consequently, titles thereto were transferred in the name of respondent DECS under Transfer
Certificate of Title No. 167175.3
On July 15, 1985, respondent DECS leased the lands to Anglo Agricultural Corporation for 10 agricultural crop
years, commencing from crop year 1984-1985 to crop year 1993-1994. The contract of lease was subsequently
renewed for another 10 agricultural crop years, commencing from crop year 1995-1996 to crop year 2004-2005.4
On June 10, 1993, Eugenio Alpar and several others, claiming to be permanent and regular farm workers of the
subject lands, filed a petition for Compulsory Agrarian Reform Program (CARP) coverage with the Municipal
Agrarian Reform Office (MARO) of Escalante.5
After investigation, MARO Jacinto R. Piosa, sent a "Notice of Coverage" to respondent DECS, stating that the
subject lands are now covered by CARP and inviting its representatives for a conference with the farmer
beneficiaries.6 Then, MARO Piosa submitted his report to OIC-PARO Stephen M. Leonidas, who recommended to
the DAR Regional Director the approval of the coverage of the landholdings.
On August 7, 1998, DAR Regional Director Dominador B. Andres approved the recommendation, the dispositive
portion of which reads:
WHEREFORE, all the foregoing premises considered, the petition is granted. Order is hereby issued:
1. Placing under CARP coverage Lot 2509 with an area of 111.4791 hectares situated at Had. Fe,
Escalante, Negros Occidental and Lot 817-D with an area of 77.7671 hectares situated at Brgy. Gen. Luna,
Sagay, Negros Occidental;
2. Affirming the notice of coverage sent by the DAR Provincial Office, Negros Occidental dated November
23, 1994;
3. Directing the Provincial Agrarian Reform Office of Negros Occidental and the Municipal Agrarian Reform
Officers of Sagay and Escalante to facilitate the acquisition of the subject landholdings and the distribution of
the same qualified beneficiaries.
SO ORDERED.7

Respondent DECS appealed the case to the Secretary of Agrarian Reform which affirmed the Order of the Regional
Director. 8
Aggrieved, respondent DECS filed a petition for certiorari with the Court of Appeals, which set aside the decision of
the Secretary of Agrarian Reform.9
Hence, the instant petition for review.
The pivotal issue to be resolved in this case is whether or not the subject properties are exempt from the coverage
of Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1998 (CARL).
The general policy under CARL is to cover as much lands suitable for agriculture as possible.10 Section 4 of R.A.
No. 6657 sets out the coverage of CARP. It states that the program shall:
" cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as
provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable
for agriculture."
More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this
Act until Congress, taking into account, ecological, developmental and equity considerations, shall have
determined by law, the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits as determined by Congress in the preceding
paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that
can be raised thereon.
Section 3(c) thereof defines "agricultural land," as "land devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or industrial land." The term "agriculture" or "agricultural activity"
is also defined by the same law as follows:
Agriculture, Agricultural Enterprises or Agricultural Activity means the cultivation of the soil, planting of crops,
growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm products, and other
farm activities, and practices performed by a farmer in conjunction with such farming operations done by persons
whether natural or juridical.11
The records of the case show that the subject properties were formerly private agricultural lands owned by the late
Esteban Jalandoni, and were donated to respondent DECS. From that time until they were leased to Anglo
Agricultural Corporation, the lands continued to be agricultural primarily planted to sugarcane, albeit part of the
public domain being owned by an agency of the government.12 Moreover, there is no legislative or presidential act,
before and after the enactment of R.A. No. 6657, classifying the said lands as mineral, forest, residential,
commercial or industrial land. Indubitably, the subject lands fall under the classification of lands of the public domain
devoted to or suitable for agriculture.
Respondent DECS sought exemption from CARP coverage on the ground that all the income derived from its
contract of lease with Anglo Agricultural Corporation were actually, directly and exclusively used for educational
purposes, such as for the repairs and renovations of schools in the nearby locality.
Petitioner DAR, on the other hand, argued that the lands subject hereof are not exempt from the CARP coverage
because the same are not actually, directly and exclusively used as school sites or campuses, as they are in fact

leased to Anglo Agricultural Corporation. Further, to be exempt from the coverage, it is the land per se, not the
income derived therefrom, that must be actually, directly and exclusively used for educational purposes.
We agree with the petitioner.
Section 10 of R.A. No. 6657 enumerates the types of lands which are exempted from the coverage of CARP as well
as the purposes of their exemption, viz:
xxxxxxxxx
c) Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and
campuses, including experimental farm stations operated by public or private schools for educational purposes, ,
shall be exempt from the coverage of this Act.13
xxxxxxxxx
Clearly, a reading of the paragraph shows that, in order to be exempt from the coverage: 1) the land must be
"actually, directly, and exclusively used and found to be necessary;" and 2) the purpose is "for school sites and
campuses, including experimental farm stations operated by public or private schools for educational purposes."
The importance of the phrase "actually, directly, and exclusively used and found to be necessary" cannot be
understated, as what respondent DECS would want us to do by not taking the words in their literal and technical
definitions. The words of the law are clear and unambiguous. Thus, the "plain meaning rule" or verba legis in
statutory construction is applicable in this case. Where the words of a statute are clear, plain and free from
ambiguity, it must be given its literal meaning and applied without attempted interpretation.14
We are not unaware of our ruling in the case of Central Mindanao University v. Department of Agrarian Reform
Adjudication Board,15 wherein we declared the land subject thereof exempt from CARP coverage. However,
respondent DECS reliance thereon is misplaced because the factual circumstances are different in the case at bar.
Firstly, in the CMU case, the land involved was not alienable and disposable land of the public domain because it
was reserved by the late President Carlos P. Garcia under Proclamation No. 476 for the use of Mindanao
Agricultural College (now CMU).16 In this case, however, the lands fall under the category of alienable and
disposable lands of the public domain suitable for agriculture.
Secondly, in the CMU case, the land was actually, directly and exclusively used and found to be necessary for
school sites and campuses. Although a portion of it was being used by the Philippine Packing Corporation (now Del
Monte Phils., Inc.) under a "Management and Development Agreement", the undertaking was that the land shall be
used by the Philippine Packing Corporation as part of the CMU research program, with direct participation of faculty
and students. Moreover, the land was part of the land utilization program developed by the CMU for its "Kilusang
Sariling Sikap Project" (CMU-KSSP), a multi-disciplinary applied research extension and productivity
program.17 Hence, the retention of the land was found to be necessary for the present and future educational needs
of the CMU. On the other hand, the lands in this case were not actually and exclusively utilized as school sites and
campuses, as they were leased to Anglo Agricultural Corporation, not for educational purposes but for the
furtherance of its business. Also, as conceded by respondent DECS, it was the income from the contract of lease
and not the subject lands that was directly used for the repairs and renovations of the schools in the locality.
Anent the issue of whether the farmers are qualified beneficiaries of CARP, we disagree with the Court of Appeals
finding that they were not.
At the outset, it should be pointed out that the identification of actual and potential beneficiaries under CARP is
vested in the Secretary of Agrarian Reform pursuant to Section 15, R.A. No. 6657, which states:
SECTION 15. Registration of Beneficiaries. The DAR in coordination with the Barangay Agrarian Reform
Committee (BARC) as organized in this Act, shall register all agricultural lessees, tenants and farmworkers who are
qualified to be beneficiaries of the CARP. These potential beneficiaries with the assistance of the BARC and the
DAR shall provide the following data:

(a) names and members of their immediate farm household;


(b) owners or administrators of the lands they work on and the length of tenurial relationship;
(c) location and area of the land they work;
(d) crops planted; and
(e) their share in the harvest or amount of rental paid or wages received.
A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in the barangay hall,
school or other public buildings in the barangay where it shall be open to inspection by the public at all reasonable
hours.
In the case at bar, the BARC certified that herein farmers were potential CARP beneficiaries of the subject
properties.18 Further, on November 23, 1994, the Secretary of Agrarian Reform through the Municipal Agrarian
Reform Office (MARO) issued a Notice of Coverage placing the subject properties under CARP. Since the
identification and selection of CARP beneficiaries are matters involving strictly the administrative implementation of
the CARP,19 it behooves the courts to exercise great caution in substituting its own determination of the issue,
unless there is grave abuse of discretion committed by the administrative agency. In this case, there was none.
The Comprehensive Agrarian Reform Program (CARP) is the bastion of social justice of poor landless farmers, the
mechanism designed to redistribute to the underprivileged the natural right to toil the earth, and to liberate them
from oppressive tenancy. To those who seek its benefit, it is the means towards a viable livelihood and, ultimately, a
decent life. The objective of the State is no less certain: "landless farmers and farmworkers will receive the highest
consideration to promote social justice and to move the nation toward sound rural development and
industrialization."20
WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of Appeals dated
October 29, 2002, in CA-G.R. SP No. 64378 is REVERSED and SET ASIDE. The decision dated August 30, 2000
of the Secretary of Agrarian Reform placing the subject lands under CARP coverage, is REINSTATED.
SO ORDERED.