REPUBLIC ACT NO.
6657 (June 10, 1988) CHAPTER II: Coverage
AN ACT INSTITUTING A COMPREHENSIVE AGRARIAN
REFORM PROGRAM TO PROMOTE SOCIAL JUSTICE AND
INDUSTRIALIZATION, PROVIDING THE MECHANISM FOR ITS
IMPLEMENTATION, AND FOR OTHER PURPOSES
CHAPTER I: Preliminary Chapter
SECTION 3. Definitions. For the purpose of this Act, unless
the context indicates otherwise:
(a) Agrarian Reform means redistribution of lands, regardless of crops
or fruits produced, to farmers and regular farmworkers who are
landless, irrespective of tenurial arrangement, to include the totality of
factors and support services designed to lift the economic status of the
beneficiaries and all other arrangements alternative to the physical
redistribution of lands, such as production or profit-sharing, labor
administration, and the distribution of shares of stocks, which will allow
beneficiaries to receive a just share of the fruits of the lands they work.
(b) Agriculture, Agricultural Enterprise 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 person whether natural or juridical.
(c) Agricultural Land refers to land devoted to agricultural activity as defined
in this Act and not classified as mineral, forest, residential, commercial or
industrial land.
(d) Agrarian Dispute refers to any controversy relating to
tenurial arrangements, whether leasehold, tenancy, stewardship or
otherwise, over lands devoted to agriculture, including disputes concerning
farmworkers' associations or representation of persons in negotiating, fixing,
maintaining, changing, or seeking to arrange terms or conditions of such
tenurial arrangements.
It includes any controversy relating to compensation of lands acquired
under this Act and other terms and conditions of transfer of ownership
from landowners to farmworkers, tenants and other agrarian reform
beneficiaries, whether the disputants stand in the proximate relation of farm
operator and beneficiary, landowner and tenant, or lessor and lessee.
(e) Idle or Abandoned Land refers to any agricultural land not cultivated, tilled
or developed to produce any crop nor devoted to any specific
economic purpose continuously for a period of three (3) years immediately
prior to the receipt of notice of acquisition by the government as provided
under this Act, but does not include land that has become permanently or
regularly devoted to non-agricultural purposes. It does not include land which
has become unproductive by reason of force majeure or any other fortuitous
event, provided that prior to such event, such land was previously used for
agricultural or other economic purpose.
SECTION 4. Scope. The Comprehensive Agrarian Reform Law of 1989
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 5. Schedule of Implementation. The distribution of all lands
covered by this Act shall be implemented immediately and completed
within ten (10) years from the effectivity thereof.
SECTION 7. Priorities. The Department of Agrarian Reform (DAR) in
coordination with the Presidential Agrarian Reform Council (PARC) shall plan
and program the acquisition and distribution of all agricultural lands through a
period of ten (10) years from the effectivity of this Act. Lands shall be
acquired and distributed as follows:
Phase One: Rice and corn lands under Presidential Decree No. 27; all idle
or abandoned lands; all private lands voluntarily offered by the owners for
agrarian reform; all lands foreclosed by the government financial institutions;
all lands acquired by the Presidential Commission on Good Government
(PCGG); and all other lands owned by the government devoted to or suitable
for agriculture, which shall be acquired and distributed immediately upon
the effectivity of this Act, with the implementation to be completed within a
period of not more than four (4) years;
Phase Two: All alienable and disposable public agricultural lands; all
arable public agricultural lands under agro-forest, pasture and
agricultural leases already cultivated and planted to crops in accordance
with Section 6, Article XIII of the Constitution; all public agricultural lands
which are to be opened for new development and resettlement; and all
private agricultural lands in excess of fifty (50) hectares, insofar as the
excess hectarage is concerned, to implement principally the rights of farmers
and regular farmworkers, who are the landless, to own directly or
collectively the lands they till, which shall be distributed immediately upon
the effectivity of this Act, with the implementation to be completed within a
period of not more than four (4) years.
Phase Three: All other private agricultural lands commencing with
large landholdings and proceeding to medium and small landholdings under
the following schedule:
(a) Landholdings above twenty-four (24) hectares up to fifty (50) hectares, to
begin on the fourth (4th) year from the effectivity of this Act and to be
completed within three (3) years; and
(b) Landholdings from the retention limit up to twenty-four (24) hectares, to
begin on the sixth (6th) year from the effectivity of this Act and to be
completed within four (4) years; to implement principally the right of farmers
and regular farmworkers who are landless, to own directly or collectively the
lands they till.
The schedule of acquisition and redistribution of all agricultural lands
covered by this program shall be made in accordance with the above order of
priority, which shall be provided in the implementing rules to be prepared by
the Presidential Agrarian Reform Council (PARC), taking into consideration
the following; the need to distribute land to the tillers at the earliest
practicable time; the need to enhance agricultural productivity; and the
availability of funds and resources to implement and support the program.
In any case, the PARC, upon recommendation by the Provincial
Agrarian Reform Coordinating Committee (PARCCOM), may declare certain
provinces or region as priority land reform areas, in which the acquisition and
distribution of private agricultural lands therein may be implemented ahead of
the above schedules. In effecting the transfer within these guidelines, priority
must be given to lands that are tenanted.
The PARC shall establish guidelines to implement the above priorities
and distribution scheme, including the determination of who are qualified
beneficiaries: Provided, That an owner-tiller may be a beneficiary of the land
he does not own but is actually cultivating to the extent of the difference
between the area of the land he owns and the award ceiling of three (3)
hectares.
SECTION 8. Multinational Corporations. All lands of the public domain
leased, held or possessed by multinational corporations or associations,
and other lands owned by the government or by government-owned or
controlled corporations, associations, institutions, or entities, devoted to
existing and operational agri-business or agro-industrial enterprises,
operated by multinational corporations and associations, shall be
programmed for acquisition and distribution immediately upon the effectivity
of this Act, with the implementation to be completed within three (3) years.
Lands covered by the paragraph immediately preceding, under
lease, management, grower or service contracts, and the like, shall be
disposed of as follows:
(a) Lease, management, grower or service contracts covering such lands
covering an aggregate area in excess of 1,000 hectares, leased or held by
foreign individuals in excess of 500 hectares are deemed amended to
conform with the limits set forth in Section 3 of Article XII of the Constitution.
(b) Contracts covering areas not in excess of 1,000 hectares in the case
of such corporations and associations, and 500 hectares, in the case of
such individuals, shall be allowed to continue under their original terms and
conditions but not beyond August 29, 1992, or their valid
termination, whichever comes sooner, after which, such agreements shall
continue only when confirmed by the appropriate government agency. Such
contracts shall likewise continue even after the lands has been transferred to
beneficiaries or awardees thereof, which transfer shall be immediately
commenced and implemented and completed within the period of three (3)
years mentioned in the first paragraph hereof.
(c) In no case will such leases and other agreements now being
implemented extend beyond August 29, 1992, when all lands subject hereof
shall have been distributed completely to qualified beneficiaries or
awardees. Such agreements can continue thereafter only under a new
contract between the government or qualified beneficiaries or awardees, on
the one hand, and said enterprises, on the other. Lands leased, held or
possessed by multinational corporations, owned by private individuals and
private non-governmental corporations, associations, institutions and entities,
citizens of the Philippines, shall be subject to immediate compulsory
acquisition and distribution upon the expiration of the applicable
lease, management, grower or service contract in effect as of August 29,
1987, or otherwise, upon its valid termination, whichever comes sooner, but
not later than after ten (10) years following the effectivity of the Act. However
during the said period of effectivity, the government shall take steps to
acquire these lands for immediate distribution thereafter.
In general, lands shall be distributed directly to the individual worker
beneficiaries. In case it is not economically feasible and sound to divide the
land, then they shall form a workers' cooperative or association which will
deal with the corporation or business association or any other proper party
for the purpose of entering into a lease or growers agreement and for all
other legitimate purposes. Until a new agreement is entered into by and
between the workers' cooperative or association and the corporation or
business association or any other proper party, any agreement existing at the
time this Act takes effect between the former and the previous landowner
shall be respected by both the workers' cooperative or association and the
corporation, business, association or such other proper party. In no case
shall the implementation or application of this Act justify or result in the
reduction of status or diminution of any benefits received or enjoyed by the
worker-beneficiaries, or in which they may have a vested right, at the time
this Act becomes effective,.
The provisions of Section 32 of this Act, with regard to production
and income-sharing shall apply to farms operated by multinational
corporations. During the transition period, the new owners shall be assisted
in their efforts to learn modern technology in production. Enterprises which
show a willingness and commitment and good-faith efforts to impart
voluntarily such advanced technology will be given preferential treatment
where feasible.
In no case shall a foreign corporation, association, entity or individual
enjoy any rights or privileges better than those enjoyed by a domestic
corporation, association, entity or individual.
SECTION 9. Ancestral Lands. For purposes of this Act, ancestral lands of
each indigenous cultural community shall include, but not be limited to, lands
in the actual, continuous and open possession and occupation of the
community and its members: Provided, That the Torrens Systems shall be
respected. The right of these communities to their ancestral lands shall be
protected to ensure their economic, social and cultural well-being. In line with
the principles of self-determination and autonomy, the systems of land
ownership, land use, and the modes of settling land disputes of all these
communities must be recognized and
respected.
Any provision of law to the contrary notwithstanding, the PARC may
suspend the implementation of this Act with respect to ancestral lands for the
purpose of identifying and delineating such lands: Provided, That in the
autonomous regions, the respective legislatures may enact their own laws on
ancestral domain subject to the provisions of the Constitution and the
principles enunciated in this Act and other national laws.
SECTION 10. Exemptions and Exclusions. Lands actually, directly and
exclusively used and found to be necessary for parks, wildlife, forest
reserves, reforestation, fish sanctuaries and breeding grounds, watersheds,
and mangroves, national defense, school sites and campuses including
experimental farm stations operated by public or private schools for
educational purposes, seeds and seedlings research and pilot production
centers, church sites and convents appurtenant thereto, mosque sites and
Islamic centers appurtenant thereto, communal burial grounds
and cemeteries, penal colonies and penal farms actually worked by the
inmates, government and private research and quarantine centers and all
lands with eighteen percent (18%) slope and over, except those already
developed shall be exempt from the coverage of the Act.
SECTION 11. Commercial Farming. Commercial farms, which
are private agricultural lands devoted to commercial livestock, poultry and
swine raising, and aquaculture including saltbeds, fishponds and prawn
ponds, fruit farms, orchards, vegetable and cut-flower farms, and cacao,
coffee and rubber plantations, shall be subject to immediate compulsory
acquisition and distribution after (10) years from the effectivity of the Act. In
the case of new farms, the ten-year period shall begin from
the first year of commercial production and operation, as determined by the
DAR. During the ten-year period, the government shall initiate the steps
necessary to
acquire these lands, upon payment of just compensation for the land and
the improvements thereon, preferably in favor of organized cooperatives or
associations,
which shall hereafter manage the said lands for the worker-beneficiaries. If
the DAR determines that the purposes for which this deferment is granted no
longer exist, such areas shall automatically be subject to redistribution. The
provisions of Section 32 of the Act, with regard to production-and
incomesharing,
shall apply to commercial farms.
THE PHILIPPINE CONSTITUTION
ARTICLE II: Declaration of Principles and State Policies Principles
SECTION 21. The State shall promote comprehensive rural development
and agrarian reform.
ARTICLE XII: National Economy and Patrimony
SECTION 1. The goals of the national economy are a more equitable
distribution of opportunities, income, and wealth; a sustained increase in the
amount of goods and services produced by the nation for the benefit of the
people; and an expanding productivity as the key to raising the quality of life
for all, especially the underprivileged.
The State shall promote industrialization and full employment based on
sound agricultural development and agrarian reform, through industries that
make full and efficient use of human and natural resources, and which are
competitive in both domestic and foreign markets. However, the State shall
protect Filipino enterprises against unfair foreign competition and trade
practices.
In the pursuit of these goals, all sectors of the economy and all regions of the
country shall be given optimum opportunity to develop. Private enterprises,
including corporations, cooperatives, and similar collective organizations,
shall be encouraged to broaden the base of their ownership.
ARTICLE XIII: Social Justice and Human Rights Labor
SECTION 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and
equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.
The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in
settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and
the right of enterprises to reasonable returns on investments, and to
expansion and growth.

Agrarian and Natural Resources Reform

SECTION 4. The State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers, who are landless,
to own directly or collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural
lands, subject to such priorities and reasonable retention limits as the
Congress may prescribe, taking into account ecological, developmental, or
equity considerations, and subject to the payment of just compensation. In
determining retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary land-
sharing.

SECTION 5. The State shall recognize the right of farmers, farmworkers, and
landowners, as well as cooperatives, and other independent farmers
organizations to participate in the planning, organization, and management of
the program, and shall provide support to agriculture through appropriate
technology and research, and adequate financial, production, marketing, and
other support services.

SECTION 6. The State shall apply the principles of agrarian reform or

stewardship, whenever applicable in accordance with law, in the disposition
or utilization of other natural resources, including lands of the public domain
under lease or concession suitable to agriculture, subject to prior rights,
homestead rights of small settlers, and the rights of indigenous communities
to their ancestral lands.
The State may resettle landless farmers and farmworkers in its own
agricultural estates which shall be distributed to them in the manner provided
by law.

SECTION 8. The State shall provide incentives to landowners to invest the

proceeds of the agrarian reform program to promote industrialization,
employment creation, and privatization of public sector enterprises. Financial
instruments used as payment for their lands shall be honored as equity in
enterprises of their choice.
LUZ FARMS, Petitioner, vs. THE HONORABLE SECRETARY OF THE
DEPARTMENT OF AGRARIAN REFORM, Respondent.
DECISION
PARAS, J.:
This is a petition for prohibition with prayer for restraining order and/or
preliminary and permanent injunction against the Honorable Secretary of the
Department of Agrarian Reform for acting without jurisdiction in enforcing the
assailed provisions of R.A. No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988 and in promulgating the
Guidelines and Procedure Implementing Production and Profit Sharing under
R.A. No. 6657, insofar as the same apply to herein petitioner, and further
from performing an act in violation of the constitutional rights of the petitioner.
As gathered from the records, the factual background of this case, is as
follows:
On June 10, 1988, the President of the Philippines approved R.A. No. 6657,
which includes the raising of livestock, poultry and swine in its coverage
(Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the
Guidelines and Procedures Implementing Production and Profit Sharing as
embodied in Sections 13 and 32 of R.A. No. 6657 (Rollo, p. 80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules
and Regulations implementing Section 11 of R.A. No. 6657 (Commercial
Farms). (Rollo, p. 81).
Luz Farms, petitioner in this case, is a corporation engaged in the livestock
and poultry business and together with others in the same business allegedly
stands to be adversely affected by the enforcement of Section 3(b), Section
11, Section 13, Section 16(d) and 17 and Section 32 of R.A. No. 6657
otherwise known as Comprehensive Agrarian Reform Law and of the
Guidelines and Procedures Implementing Production and Profit Sharing
under R.A. No. 6657 promulgated on January 2, 1989 and the Rules and
Regulations Implementing Section 11 thereof as promulgated by the DAR on
January 9, 1989 (Rollo, pp. 2-36).: rd
Hence, this petition praying that aforesaid laws, guidelines and rules be
declared unconstitutional. Meanwhile, it is also prayed that a writ of
preliminary injunction or restraining order be issued enjoining public
respondents from enforcing the same, insofar as they are made to apply to
Luz Farms and other livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved to deny, among
others, Luz Farms' prayer for the issuance of a preliminary injunction in its
Manifestation dated May 26, and 31, 1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989 resolved
to grant said Motion for Reconsideration regarding the injunctive relief, after
the filing and approval by this Court of an injunction bond in the amount of
P100,000.00. This Court also gave due course to the petition and required
the parties to file their respective memoranda (Rollo, p. 119).
The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-
168).
On December 22, 1989, the Solicitor General adopted his Comment to the
petition as his Memorandum (Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they
are made to apply to it:
(a) Section 3(b) which includes the "raising of livestock (and poultry)" in
the definition of "Agricultural, Agricultural Enterprise or Agricultural
Activity."
(b) Section 11 which defines "commercial farms" as "private agricultural
lands devoted to commercial, livestock, poultry and swine raising . . ."
(c) Section 13 which calls upon petitioner to execute a production-
sharing plan.
(d) Section 16(d) and 17 which vest on the Department of Agrarian
Reform the authority to summarily determine the just compensation to be
paid for lands covered by the Comprehensive Agrarian Reform Law.
(e) Section 32 which spells out the production-sharing plan mentioned in
Section 13
". . . (W)hereby three percent (3%) of the gross sales from the production
of such lands are distributed within sixty (60) days of the end of the fiscal
year as compensation to regular and other farmworkers in such lands
over and above the compensation they currently receive: Provided, That
these individuals or entities realize gross sales in excess of five million
pesos per annum unless the DAR, upon proper application, determine a
lower ceiling.
In the event that the individual or entity realizes a profit, an additional ten
(10%) of the net profit after tax shall be distributed to said regular and
other farmworkers within ninety (90) days of the end of the fiscal year . .
."
The main issue in this petition is the constitutionality of Sections 3(b), 11, 13
and 32 of R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988),
insofar as the said law includes the raising of livestock, poultry and swine in
its coverage as well as the Implementing Rules and Guidelines promulgated
in accordance therewith.:-cralaw
The constitutional provision under consideration reads as follows:
ARTICLE XIII
x x x
AGRARIAN AND NATURAL RESOURCES REFORM
Section 4. The State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers, who are
landless, to own directly or collectively the lands they till or, in the case of
other farmworkers, to receive a just share of the fruits thereof. To this
end, the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention
 limits as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations, and subject to the payment of
just compensation. In determining retention limits, the State shall respect
the rights of small landowners. The State shall further provide incentives
for voluntary land-sharing.
x x x"
Luz Farms contended that it does not seek the nullification of R.A. 6657
in its entirety. In fact, it acknowledges the correctness of the decision of
this Court in the case of the Association of Small Landowners in the
Philippines, Inc. vs. Secretary of Agrarian Reform (G.R. 78742, 14 July
1989) affirming the constitutionality of the Comprehensive Agrarian
Reform Law. It, however, argued that Congress in enacting the said law
has transcended the mandate of the Constitution, in including land
devoted to the raising of livestock, poultry and swine in its coverage
(Rollo, p. 131). Livestock or poultry raising is not similar to crop or tree
farming. Land is not the primary resource in this undertaking and
represents no more than five percent (5%) of the total investment of
commercial livestock and poultry raisers. Indeed, there are many owners
of residential lands all over the country who use available space in their
residence for commercial livestock and raising purposes, under
"contract-growing arrangements," whereby processing corporations and
other commercial livestock and poultry raisers (Rollo, p. 10). Lands
support the buildings and other amenities attendant to the raising of
animals and birds. The use of land is incidental to but not the principal
factor or consideration in productivity in this industry. Including backyard
raisers, about 80% of those in commercial livestock and poultry
production occupy five hectares or less. The remaining 20% are mostly
corporate farms (Rollo, p. 11).
On the other hand, the public respondent argued that livestock and poultry
raising is embraced in the term "agriculture" and the inclusion of such
enterprise under Section 3(b) of R.A. 6657 is proper. He cited that Webster's
International Dictionary, Second Edition (1954), defines the following words:
"Agriculture the art or science of cultivating the ground and raising and
harvesting crops, often, including also, feeding, breeding and
management of livestock, tillage, husbandry, farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . .
Livestock domestic animals used or raised on a farm, especially for profit.
Farm a plot or tract of land devoted to the raising of domestic or other
animals." (Rollo, pp. 82-83).
The petition is impressed with merit.
The question raised is one of constitutional construction. The primary task in
constitutional construction is to ascertain and thereafter assure the
realization of the purpose of the framers in the adoption of the Constitution
(J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).:
rd
Ascertainment of the meaning of the provision of Constitution begins with the
language of the document itself. The words used in the Constitution are to be
given their ordinary meaning except where technical terms are employed in
which case the significance thus attached to them prevails (J.M. Tuazon &
Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).
It is generally held that, in construing constitutional provisions which are
ambiguous or of doubtful meaning, the courts may consider the debates in
the constitutional convention as throwing light on the intent of the framers of
the Constitution. It is true that the intent of the convention is not controlling by
itself, but as its proceeding was preliminary to the adoption by the people of
the Constitution the understanding of the convention as to what was meant
by the terms of the constitutional provision which was the subject of the
deliberation, goes a long way toward explaining the understanding of the
people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).
The transcripts of the deliberations of the Constitutional Commission of 1986
on the meaning of the word "agricultural," clearly show that it was never the
intention of the framers of the Constitution to include livestock and poultry
industry in the coverage of the constitutionally-mandated agrarian reform
program of the Government.
The Committee adopted the definition of "agricultural land" as defined under
Section 166 of R.A. 3844, as laud devoted to any growth, including but not
limited to crop lands, saltbeds, fishponds, idle and abandoned land (Record,
CONCOM, August 7, 1986, Vol. III, p. 11).
The intention of the Committee is to limit the application of the word
"agriculture." Commissioner Jamir proposed to insert the word "ARABLE" to
distinguish this kind of agricultural land from such lands as commercial and
industrial lands and residential properties because all of them fall under the
general classification of the word "agricultural". This proposal, however, was
not considered because the Committee contemplated that agricultural lands
are limited to arable and suitable agricultural lands and therefore, do not
include commercial, industrial and residential lands (Record, CONCOM,
August 7, 1986, Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme Court
Justice), posed several questions, among others, quoted as follows:
x x x
"Line 19 refers to genuine reform program founded on the primary right
of farmers and farmworkers. I wonder if it means that leasehold tenancy
is thereby proscribed under this provision because it speaks of the
primary right of farmers and farmworkers to own directly or collectively
the lands they till. As also mentioned by Commissioner Tadeo,
farmworkers include those who work in piggeries and poultry projects.
I was wondering whether I am wrong in my appreciation that if somebody
puts up a piggery or a poultry project and for that purpose hires
farmworkers therein, these farmworkers will automatically have the right
to own eventually, directly or ultimately or collectively, the land on which
 the piggeries and poultry projects were constructed. (Record, CONCOM,
August 2, 1986, p. 618).
x x x
The questions were answered and explained in the statement of then
Commissioner Tadeo, quoted as follows:
x x x
"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami
nagkaunawaan. Ipinaaalam ko kay Commissioner Regalado na hindi
namin inilagay ang agricultural worker sa kadahilanang kasama rito ang
piggery, poultry at livestock workers. Ang inilagay namin dito ay farm
worker kaya hindi kasama ang piggery, poultry at livestock workers
(Record, CONCOM, August 2, 1986, Vol. II, p. 621).
It is evident from the foregoing discussion that Section II of R.A. 6657 which
includes "private agricultural lands devoted to commercial livestock, poultry
and swine raising" in the definition of "commercial farms" is invalid, to the
extent that the aforecited agro-industrial activities are made to be covered by
the agrarian reform program of the State. There is simply no reason to
include livestock and poultry lands in the coverage of agrarian reform. (Rollo,
p. 21).
Hence, there is merit in Luz Farms' argument that the requirement in
Sections 13 and 32 of R.A. 6657 directing "corporate farms" which include
livestock and poultry raisers to execute and implement "production-sharing
plans" (pending final redistribution of their landholdings) whereby they are
called upon to distribute from three percent (3%) of their gross sales and ten
percent (10%) of their net profits to their workers as additional compensation
is unreasonable for being confiscatory, and therefore violative of due process
(Rollo, p. 21).:-cralaw
It has been established that this Court will assume jurisdiction over a
constitutional question only if it is shown that the essential requisites of a
judicial inquiry into such a question are first satisfied. Thus, there must be an
actual case or controversy involving a conflict of legal rights susceptible of
judicial determination, the constitutional question must have been
opportunely raised by the proper party, and the resolution of the question is
unavoidably necessary to the decision of the case itself (Association of Small
Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R.
78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay
v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted
with constitutional issues, it will not hesitate to declare a law or act invalid
when it is convinced that this must be done. In arriving at this conclusion, its
only criterion will be the Constitution and God as its conscience gives it in the
light to probe its meaning and discover its purpose. Personal motives and
political considerations are irrelevancies that cannot influence its decisions.
Blandishment is as ineffectual as intimidation, for all the awesome power of
the Congress and Executive, the Court will not hesitate "to make the hammer
fall heavily," where the acts of these departments, or of any official, betray
the people's will as expressed in the Constitution (Association of Small
Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R.
78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay
v. Juico, G.R. 79777, 14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of its
constitutional powers, it becomes the duty of the judiciary to declare what the
other branches of the government had assumed to do, as void. This is the
essence of judicial power conferred by the Constitution "(I)n one Supreme
Court and in such lower courts as may be established by law" (Art. VIII,
Section 1 of the 1935 Constitution; Article X, Section I of the 1973
Constitution and which was adopted as part of the Freedom Constitution, and
Article VIII, Section 1 of the 1987 Constitution) and which power this Court
has exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED.
Sections 3(b), 11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the
raising of livestock, poultry and swine in its coverage as well as the
Implementing Rules and Guidelines promulgated in accordance therewith,
are hereby DECLARED null and void for being unconstitutional and the writ
of preliminary injunction issued is hereby MADE permanent.
SO ORDERED.
Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz,
Gancayco, Padilla, Bidin, Grio-Aquino, Medialdea and Regalado, JJ.,
concur. Feliciano, J., is on leave.
Separate Opinions
SARMIENTO, J., concurring:
I agree that the petition be granted.
It is my opinion however that the main issue on the validity of the assailed
provisions of R.A. 6657 (the Comprehensive Agrarian Reform Law of 1988)
and its Implementing Rules and Guidelines insofar as they include the raising
of livestock, poultry, and swine in their coverage cannot be simplistically
reduced to a question of constitutional construction.
It is a well-settled rule that construction and interpretation come only after it
has been demonstrated that application is impossible or inadequate without
them. A close reading however of the constitutional text in point, specifically,
Sec. 4, Art. XIII, particularly the phrase, ". . . in case of other farmworkers, to
receive a just share of the fruits thereof," provides a basis for the clear and
possible coverage of livestock, poultry, and swine raising within the ambit of
the comprehensive agrarian reform program. This accords with the principle
that every presumption should be indulged in favor of the constitutionality of
a statute and the court in considering the validity of a statute should give it
such reasonable construction as can be reached to bring it within the
fundamental law. 1
The presumption against unconstitutionality, I must say, assumes greater output. Labor cost of livestock and poultry farms is no more than 4% of total
weight when a ruling to the contrary would, in effect, defeat the laudable and operating cost. The 98% balance represents inputs not obtained from the
noble purpose of the law, i.e., the welfare of the landless farmers and land nor provided by the farmworkers inputs such as feeds and
farmworkers in the promotion of social justice, by the expedient conversion of biochemicals (80% of the total cost), power cost, cost of money and several
agricultural lands into livestock, poultry, and swine raising by scheming others.
landowners, thus, rendering the comprehensive nature of the agrarian Moreover, livestock and poultry farmworkers are covered by minimum wage
program merely illusory. law rather than by tenancy law. They are entitled to social security benefits
The instant controversy, I submit, boils down to the question of whether or where tenant-farmers are not. They are paid fixed wages rather than crop
not the assailed provisions violate the equal protection clause of the shares. And as in any other industry, they receive additional benefits such as
Constitution (Article II, section 1) which teaches simply that all persons or allowances, bonuses, and other incentives such as free housing privileges,
things similarly situated should be treated alike, both as to rights conferred light and water.
and responsibilities imposed. 2 Equating livestock and poultry farming with other agricultural activities is also
There is merit in the contention of the petitioner that substantial distinctions fallacious in the sense that like the manufacturing sector, it is a market for,
exist between land directed purely to cultivation and harvesting of fruits or rather than a source of agricultural output. At least 60% of the entire
crops and land exclusively used for livestock, poultry and swine raising, that domestic supply of corn is absorbed by livestock and poultry farms. So are
make real differences, to wit: the by-products of rice (rice-bran), coconut (copra meal), banana (banana
x x x pulp meal), and fish (fish meal). 3
No land is tilled and no crop is harvested in livestock and poultry farming. x x x
There are no tenants nor landlords, only employers and employees. In view of the foregoing, it is clear that both kinds of lands are not similarly
Livestock and poultry do not sprout from land nor are they "fruits of the land." situated and hence, cannot be treated alike. Therefore, the assailed
Land is not even a primary resource in this industry. The land input is provisions which allow for the inclusion of livestock and poultry industry
inconsequential that all the commercial hog and poultry farms combined within the coverage of the agrarian reform program constitute invalid
occupy less than one percent (1%) (0.4% for piggery, 0.2% for poultry) of the classification and must accordingly be struck down as repugnant to the equal
5.45 million hectares of land supposedly covered by the CARP. And most protection clause of the Constitution.
farms utilize only 2 to 5 hectares of land.: nad
In every respect livestock and poultry production is an industrial activity. Its
use of an inconsequential portion of land is a mere incident of its operation,
as in any other undertaking, business or otherwise.
The fallacy of defining livestock and poultry production as an agricultural
enterprise is nowhere more evident when one considers that at least 95% of
total investment in these farms is in the form of fixed assets which are
industrial in nature.
These include (1) animal housing structures and facilities complete with
drainage, waterers, blowers, misters and in some cases even piped-in music;
(2) feedmills complete with grinders, mixers, conveyors, exhausts,
generators, etc.; (3) extensive warehousing facilities for feeds and other
supplies; (4) anti-pollution equipment such as bio-gas and digester plants
augmented by lagoons and concrete ponds; (5) deepwells, elevated water
tanks, pumphouses and accessory facilities; (6) modern equipment such as
sprayers, pregnancy testers, etc.; (7) laboratory facilities complete with
expensive tools and equipment; and a myriad other such technologically
advanced appurtances.
How then can livestock and poultry farmlands be arable when such are
almost totally occupied by these structures?
The fallacy of equating the status of livestock and poultry farmworkers with
that of agricultural tenants surfaces when one considers contribution to
G.R. No. 100091 October 22, 1992
CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS PRESIDENT
DR. LEONARDO A. CHUA, petitioner, vs.
THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD,
THE COURT OF APPEALS and ALVIN OBRIQUE, REPRESENTING
BUKIDNON FREE FARMERS AGRICULTURAL LABORERS
ORGANIZATION (BUFFALO), respondents.
CAMPOS, JR., J.:
This is a Petition for Review on Certiorari under Rule 65 of the Rules of Court
to nullify the proceedings and decision of the Department of Agrarian Reform
Adjudication Board (DARAB for brevity) dated September 4, 1989 and to set
aside the decision the decision * of the Court of Appeals dated August 20,
1990, affirming the decision of the DARAB which ordered the segregation of
400 hectares of suitable, compact and contiguous portions of the Central
Mindanao University (CMU for brevity) land and their inclusion in the
Comprehensive Agrarian Reform Program (CARP for brevity) for distribution
to qualified beneficiaries, on the ground of lack of jurisdiction.
This case originated in a complaint filed by complainants calling themselves
as the Bukidnon Free Farmers and Agricultural Laborers Organization
(BUFFALO for brevity) under the leadership of Alvin Obrique and Luis
Hermoso against the CMU, before the Department of Agrarian Reform for
Declaration of Status as Tenants, under the CARP.
From the records, the following facts are evident. The petitioner, the CMU, is
an agricultural educational institution owned and run by the state located in
the town of Musuan, Bukidnon province. It started as a farm school at
Marilang, Bukidnon in early 1910, in response to the public demand for an
agricultural school in Mindanao. It expanded into the Bukidnon National
Agricultural High School and was transferred to its new site in Managok near
Malaybalay, the provincial capital of Bukidnon.
In the early 1960's, it was converted into a college with campus at Musuan,
until it became what is now known as the CMU, but still primarily an
agricultural university. From its beginning, the school was the answer to the
crying need for training people in order to develop the agricultural potential of
the island of Mindanao. Those who planned and established the school had
a vision as to the future development of that part of the Philippines. On
January 16, 1958 the President of the Republic of the Philippines, the late
Carlos P. Garcia, "upon the recommendation of the Secretary of Agriculture
and Natural Resources, and pursuant to the provisions of Section 53, of
Commonwealth Act No. 141, as amended", issued Proclamation No. 476,
withdrawing from sale or settlement and reserving for the Mindanao
Agricultural College, a site which would be the future campus of what is now
the CMU. A total land area comprising 3,080 hectares was surveyed and
registered and titled in the name of the petitioner under OCT Nos. 160, 161
and 162.
In the course of the cadastral hearing of the school's petition for registration
of the aforementioned grant of agricultural land, several tribes belonging to
cultural communities, opposed the petition claiming ownership of certain
ancestral lands forming part of the tribal reservations. Some of the claims
were granted so that what was titled to the present petitioner school was
reduced from 3,401 hectares to 3,080 hectares.
In the early 1960's, the student population of the school was less than 3,000.
By 1988, the student population had expanded to some 13,000 students, so
that the school community has an academic population (student, faculty and
non-academic staff) of almost 15,000. To cope with the increase in its
enrollment, it has expanded and improved its educational facilities partly from
government appropriation and partly by self-help measures.
True to the concept of a land grant college, the school embarked on self-help
measures to carry out its educational objectives, train its students, and
maintain various activities which the government appropriation could not
adequately support or sustain. In 1984, the CMU approved Resolution No.
160, adopting a livelihood program called "Kilusang Sariling Sikap Program"
under which the land resources of the University were leased to its faculty
and employees. This arrangement was covered by a written contract. Under
this program the faculty and staff combine themselves to groups of five
members each, and the CMU provided technical know-how, practical training
and all kinds of assistance, to enable each group to cultivate 4 to 5 hectares
of land for the lowland rice project. Each group pays the CMU a service fee
and also a land use participant's fee. The contract prohibits participants and
their hired workers to establish houses or live in the project area and to use
the cultivated land as a collateral for any kind of loan. It was expressly
stipulated that no landlord-tenant relationship existed between the CMU and
the faculty and/or employees. This particular program was conceived as a
multi-disciplinary applied research extension and productivity program to
utilize available land, train people in modern agricultural technology and at
the same time give the faculty and staff opportunities within the confines of
the CMU reservation to earn additional income to augment their salaries. The
location of the CMU at Musuan, Bukidnon, which is quite a distance from the
nearest town, was the proper setting for the adoption of such a program.
Among the participants in this program were Alvin Obrique, Felix Guinanao,
Joven Caballero, Nestor Pulao, Danilo Vasquez, Aronio Pelayo and other
complainants. Obrique was a Physics Instructor at the CMU while the others
were employees in the lowland rice project. The other complainants who
were not members of the faculty or non-academic staff CMU, were hired
workers or laborers of the participants in this program. When petitioner Dr.
Leonardo Chua became President of the CMU in July 1986, he discontinued
the agri-business project for the production of rice, corn and sugar cane
known as Agri-Business Management and Training Project, due to losses
incurred while carrying on the said project. Some CMU personnel, among
whom were the complainants, were laid-off when this project was
discontinued. As Assistant Director of this agri-business project, Obrique was
found guilty of mishandling the CMU funds and was separated from service
by virtue of Executive Order No. 17, the re-organization law of the CMU.
Sometime in 1986, under Dr. Chua as President, the CMU launched a self-
help project called CMU-Income Enhancement Program (CMU-IEP) to
develop unutilized land resources, mobilize and promote the spirit of self-
reliance, provide socio-economic and technical training in actual field project
implementation and augment the income of the faculty and the staff.
Under the terms of a 3-party Memorandum of Agreement 2 among the CMU,
the CMU-Integrated Development Foundation (CMU-IDF) and groups or
"seldas" of 5 CMU employees, the CMU would provide the use of 4 to 5
hectares of land to a selda for one (1) calendar year. The CMU-IDF would
provide researchers and specialists to assist in the preparation of project
proposals and to monitor and analyze project implementation. The selda in
turn would pay to the CMU P100 as service fee and P1,000 per hectare as
participant's land rental fee. In addition, 400 kilograms of the produce per
year would be turned over or donated to the CMU-IDF. The participants
agreed not to allow their hired laborers or member of their family to establish
any house or live within vicinity of the project area and not to use the
allocated lot as collateral for a loan. It was expressly provided that no tenant-
landlord relationship would exist as a result of the Agreement.
Initially, participation in the CMU-IEP was extended only to workers and staff
members who were still employed with the CMU and was not made available
to former workers or employees. In the middle of 1987, to cushion the impact
of the discontinuance of the rice, corn and sugar cane project on the lives of
its former workers, the CMU allowed them to participate in the CMU-IEP as
special participants.
Under the terms of a contract called Addendum To Existing Memorandum of
Agreement Concerning Participation To the CMU-Income Enhancement
Program, 3 a former employee would be grouped with an existing selda of
his choice and provided one (1) hectare for a lowland rice project for one (1)
calendar year. He would pay the land rental participant's fee of P1,000.00 per
hectare but on a charge-to-crop basis. He would also be subject to the same
prohibitions as those imposed on the CMU employees. It was also expressly
provided that no tenant-landlord relationship would exist as a result of the
Agreement.
The one-year contracts expired on June 30, 1988. Some contracts were
renewed. Those whose contracts were not renewed were served with notices
to vacate.
The non-renewal of the contracts, the discontinuance of the rice, corn and
sugar cane project, the loss of jobs due to termination or separation from the
service and the alleged harassment by school authorities, all contributed to,
and precipitated the filing of the complaint.
On the basis of the above facts, the DARAB found that the private
respondents were not tenants and cannot therefore be beneficiaries under
the CARP. At the same time, the DARAB ordered the segregation of 400
hectares of suitable, compact and contiguous portions of the CMU land and
their inclusion in the CARP for distribution to qualified beneficiaries.
The petitioner CMU, in seeking a review of the decisions of the respondents
DARAB and the Court of Appeals, raised the following issues:
1.) Whether or not the DARAB has jurisdiction to hear and decide Case No.
005 for Declaration of Status of Tenants and coverage of land under the
CARP.
2.) Whether or not respondent Court of Appeals committed serious errors
and grave abuse of discretion amounting to lack of jurisdiction in dismissing
the Petition for Review on Certiorari and affirming the decision of DARAB.
In their complaint, docketed as DAR Case No. 5, filed with the DARAB,
complainants Obrique, et al. claimed that they are tenants of the CMU and/or
landless peasants claiming/occupying a part or portion of the CMU situated
at Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon, consisting of about
1,200 hectares. We agree with the DARAB's finding that Obrique, et. al. are
not tenants. Under the terms of the written agreement signed by Obrique, et.
al., pursuant to the livelihood program called "Kilusang Sariling Sikap
Program", it was expressly stipulated that no landlord-tenant relationship
existed between the CMU and the faculty and staff (participants in the
project). The CMU did not receive any share from the harvest/fruits of the
land tilled by the participants. What the CMU collected was a nominal service
fee and land use participant's fee in consideration of all the kinds of
assistance given to the participants by the CMU. Again, the agreement
signed by the participants under the CMU-IEP clearly stipulated that no
landlord-tenant relationship existed, and that the participants are not share
croppers nor lessees, and the CMU did not share in the produce of the
participants' labor.
In the same paragraph of their complaint, complainants claim that they are
landless peasants. This allegation requires proof and should not be accepted
as factually true. Obrique is not a landless peasant. The facts showed he
was Physics Instructor at CMU holding a very responsible position was
separated from the service on account of certain irregularities he committed
while Assistant Director of the Agri-Business Project of cultivating lowland
rice. Others may, at the moment, own no land in Bukidnon but they may not
necessarily be so destitute in their places of origin. No proof whatsoever
appears in the record to show that they are landless peasants.
The evidence on record establish without doubt that the complainants were
originally authorized or given permission to occupy certain areas of the CMU
property for a definite purpose to carry out certain university projects as
part of the CMU's program of activities pursuant to its avowed purpose of
giving training and instruction in agricultural and other related technologies,
using the land and other resources of the institution as a laboratory for these
projects. Their entry into the land of the CMU was with the permission and
written consent of the owner, the CMU, for a limited period and for a specific
purpose. After the expiration of their privilege to occupy and cultivate the land
of the CMU, their continued stay was unauthorized and their settlement on
the CMU's land was without legal authority. A person entering upon lands of
another, not claiming in good faith the right to do so by virtue of any title of
his own, or by virtue of some agreement with the owner or with one whom he
believes holds title to the land, is a squatter. 4 Squatters cannot enter the
land of another surreptitiously or by stealth, and under the umbrella of the
CARP, claim rights to said property as landless peasants. Under Section 73
of R.A. 6657, persons guilty of committing prohibited acts of forcible entry or
illegal detainer do not qualify as beneficiaries and may not avail themselves
of the rights and benefits of agrarian reform. Any such person who knowingly
and wilfully violates the above provision of the Act shall be punished with
imprisonment or fine at the discretion of the Court.
In view of the above, the private respondents, not being tenants nor proven
to be landless peasants, cannot qualify as beneficiaries under the CARP.
The questioned decision of the Adjudication Board, affirmed in toto by the
Court of Appeals, segregating 400 hectares from the CMU land is primarily
based on the alleged fact that the land subject hereof is "not directly, actually
and exclusively used for school sites, because the same was leased to
Philippine Packing Corporation (now Del Monte Philippines)".
In support of this view, the Board held that the "respondent University failed
to show that it is using actually, really, truly and in fact, the questioned area
to the exclusion of others, nor did it show that the same is directly used
without any intervening agency or person", 5 and "there is no definite and
concrete showing that the use of said lands are essentially indispensable for
educational purposes". 6 The reliance by the respondents Board and
Appellate Tribunal on the technical or literal definition from Moreno's
Philippine Law Dictionary and Black's Law Dictionary, may give the ordinary
reader a classroom meaning of the phrase "is actually directly and
exclusively", but in so doing they missed the true meaning of Section 10,
R.A. 6657, as to what lands are exempted or excluded from the coverage of
the CARP.
The pertinent provisions of R.A. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988, are as follows:
Sec. 4. SCOPE. The Comprehensive Agrarian Reform Law of 1988
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 of 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 ad
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.
Sec. 10 EXEMPTIONS AND EXCLUSIONS. Lands actually, directly
and exclusively used and found to be necessary for parks, wildlife, forest
reserves, reforestration, fish sanctuaries and breeding grounds,
watersheds and mangroves, national defense, school sites and
campuses including experimental farm stations operated by public or
private schools for educational purposes, seeds and seedlings research
and pilot production centers, church sites and convents appurtenant
thereto, mosque sites and Islamic centers appurtenant thereto,
communal burial grounds and cemeteries, penal colonies and penal
farms actually worked by the inmates, government and private research
and quarantine centers and all lands with eighteen percent (18%) slope
and over, except those already developed shall be exempt from the
coverage of this Act. (Emphasis supplied).
The construction given by the DARAB to Section 10 restricts the land area of
the CMU to its present needs or to a land area presently, actively exploited
and utilized by the university in carrying out its present educational program
with its present student population and academic facility overlooking the
very significant factor of growth of the university in the years to come. By the
nature of the CMU, which is a school established to promote agriculture and
industry, the need for a vast tract of agricultural land and for future programs
of expansion is obvious. At the outset, the CMU was conceived in the same
manner as land grant colleges in America, a type of educational institution
which blazed the trail for the development of vast tracts of unexplored and
undeveloped agricultural lands in the Mid-West. What we now know as
Michigan State University, Penn State University and Illinois State University,
started as small land grant colleges, with meager funding to support their
ever increasing educational programs. They were given extensive tracts of
agricultural and forest lands to be developed to support their numerous
expanding activities in the fields of agricultural technology and scientific
research. Funds for the support of the educational programs of land grant
colleges came from government appropriation, tuition and other student fees,
private endowments and gifts, and earnings from miscellaneous sources. 7 It
was in this same spirit that President Garcia issued Proclamation No. 476,
withdrawing from sale or settlement and reserving for the Mindanao
Agricultural College (forerunner of the CMU) a land reservation of 3,080
hectares as its future campus. It was set up in Bukidnon, in the hinterlands of
Mindanao, in order that it can have enough resources and wide open spaces
to grow as an agricultural educational institution, to develop and train future
farmers of Mindanao and help attract settlers to that part of the country.
In line with its avowed purpose as an agricultural and technical school, the
University adopted a land utilization program to develop and exploit its 3080-
hectare land reservation as follows: 8
No. of Hectares Percentage
a. Livestock and Pasture 1,016.40 33
b. Upland Crops 616 20
c. Campus and Residential sites 462 15
d. Irrigated rice 400.40 13
e. Watershed and forest reservation 308 10
f. Fruit and Trees Crops 154 5
g. Agricultural
Experimental stations 123.20 4
3,080.00 100%
The first land use plan of the CARP was prepared in 1975 and since then it
has undergone several revisions in line with changing economic conditions,
national economic policies and financial limitations and availability of
resources. The CMU, through Resolution No. 160 S. 1984, pursuant to its
development plan, adopted a multi-disciplinary applied research extension
and productivity program called the "Kilusang Sariling Sikap Project" (CMU-
KSSP). The objectives 9 of this program were:
1. Provide researches who shall assist in (a) preparation of proposal; (b)
monitor project implementation; and (c) collect and analyze all data and
information relevant to the processes and results of project
implementation;
2. Provide the use of land within the University reservation for the
purpose of establishing a lowland rice project for the party of the Second
Part for a period of one calendar year subject to discretionary renewal by
the Party of the First Part;
3. Provide practical training to the Party of the Second Part on the
management and operation of their lowland project upon request of Party
of the Second Part; and
4. Provide technical assistance in the form of relevant livelihood project
specialists who shall extend expertise on scientific methods of crop
production upon request by Party of the Second Part.
In return for the technical assistance extended by the CMU, the participants
in a project pay a nominal amount as service fee. The self-reliance program
was adjunct to the CMU's lowland rice project.
The portion of the CMU land leased to the Philippine Packing Corporation
(now Del Monte Phils., Inc.) was leased long before the CARP was passed.
The agreement with the Philippine Packing Corporation was not a lease but a
Management and Development Agreement, a joint undertaking where use by
the Philippine Packing Corporation of the land was part of the CMU research
program, with the direct participation of faculty and students. Said contracts
with the Philippine Packing Corporation and others of a similar nature (like
MM-Agraplex) were made prior to the enactment of R.A. 6657 and were
directly connected to the purpose and objectives of the CMU as an
educational institution. As soon as the objectives of the agreement for the
joint use of the CMU land were achieved as of June 1988, the CMU adopted
a blue print for the exclusive use and utilization of said areas to carry out its
own research and agricultural experiments.
As to the determination of when and what lands are found to be
necessary for use by the CMU, the school is in the best position to resolve
and answer the question and pass upon the problem of its needs in relation
to its avowed objectives for which the land was given to it by the State.
Neither the DARAB nor the Court of Appeals has the right to substitute its
judgment or discretion on this matter, unless the evidentiary facts are so
manifest as to show that the CMU has no real for the land.
It is our opinion that the 400 hectares ordered segregated by the DARAB and
affirmed by the Court of Appeals in its Decision dated August 20, 1990, is not
covered by the CARP because:
(1) It is not alienable and disposable land of the public domain;
(2) The CMU land reservation is not in excess of specific limits as
determined by Congress;
(3) It is private land registered and titled in the name of its lawful owner,
the CMU;
(4) It is exempt from coverage under Section 10 of R.A. 6657 because
the lands are actually, directly and exclusively used and found to be
necessary for school site and campus, including experimental farm
stations for educational purposes, and for establishing seed and seedling
research and pilot production centers. (Emphasis supplied).
Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the
jurisdiction of the DARAB is limited only to matters involving the
implementation of the CARP. More specifically, it is restricted to agrarian
cases and controversies involving lands falling within the coverage of the
aforementioned program. It does not include those which are actually,
directly and exclusively used and found to be necessary for, among such
purposes, school sites and campuses for setting up experimental farm
stations, research and pilot production centers, etc.
Consequently, the DARAB has no power to try, hear and adjudicate the case
pending before it involving a portion of the CMU's titled school site, as the
portion of the CMU land reservation ordered segregated is actually, directly
and exclusively used and found by the school to be necessary for its
purposes. The CMU has constantly raised the issue of the DARAB's lack of
jurisdiction and has questioned the respondent's authority to hear, try and
adjudicate the case at bar. Despite the law and the evidence on record
tending to establish that the fact that the DARAB had no jurisdiction, it made
the adjudication now subject of review.
Whether the DARAB has the authority to order the segregation of a portion of
a private property titled in the name of its lawful owner, even if the claimant is
not entitled as a beneficiary, is an issue we feel we must resolve. The quasi-
judicial powers of DARAB are provided in Executive Order No. 129-A, quoted
hereunder in so far as pertinent to the issue at bar:
 Sec. 13. AGRARIAN REFORM ADJUDICATION BOARD There is agricultural land in Mindanao outside the CMU land reservation which can be
hereby created an Agrarian Reform Adjudication Board under the office made available to landless peasants, assuming the claimants here, or some
of the Secretary. . . . The Board shall assume the powers and functions of them, can qualify as CARP beneficiaries. To our mind, the taking of the
with respect to adjudication of agrarian reform cases under Executive CMU land which had been segregated for educational purposes for
Order 229 and this Executive Order . . . distribution to yet uncertain beneficiaries is a gross misinterpretation of the
Sec. 17. QUASI JUDICIAL POWERS OF THE DAR. The DAR is authority and jurisdiction granted by law to the DARAB.
hereby vested with quasi-judicial powers to determine and adjudicate The decision in this case is of far-reaching significance as far as it concerns
agrarian reform matters and shall have exclusive original jurisdiction over state colleges and universities whose resources and research facilities may
all matters including implementation of Agrarian Reform. be gradually eroded by misconstruing the exemptions from the CARP. These
Section 50 of R.A. 6658 confers on the DAR quasi-judicial powers as follows: state colleges and universities are the main vehicles for our scientific and
The DAR is hereby vested with primary jurisdiction to determine and technological advancement in the field of agriculture, so vital to the
adjudicate agrarian reform matters and shall have original jurisdiction existence, growth and development of this country.
over all matters involving the implementation of agrarian reform. . . . It is the opinion of this Court, in the light of the foregoing analysis and for the
Section 17 of Executive Order No. 129-A is merely a repetition of Section 50, reasons indicated, that the evidence is sufficient to sustain a finding of grave
R.A. 6657. There is no doubt that the DARAB has jurisdiction to try and abuse of discretion by respondents Court of Appeals and DAR Adjudication
decide any agrarian dispute in the implementation of the CARP. An agrarian Board. We hereby declare the decision of the DARAB dated September 4,
dispute is defined by the same law as any controversy relating to tenurial 1989 and the decision of the Court of Appeals dated August 20, 1990,
rights whether leasehold, tenancy stewardship or otherwise over lands affirming the decision of the quasi-judicial body, as null and void and hereby
devoted to order that they be set aside, with costs against the private respondents.
agriculture. 10 SO ORDERED
In the case at bar, the DARAB found that the complainants are not share
tenants or lease holders of the CMU, yet it ordered the "segregation of a
suitable compact and contiguous area of Four Hundred hectares, more or
less", from the CMU land reservation, and directed the DAR Regional
Director to implement its order of segregation. Having found that the
complainants in this agrarian dispute for Declaration of Tenancy Status are
not entitled to claim as beneficiaries of the CARP because they are not share
tenants or leaseholders, its order for the segregation of 400 hectares of the
CMU land was without legal authority. w do not believe that the quasi-judicial
function of the DARAB carries with it greater authority than ordinary courts to
make an award beyond what was demanded by the complainants/petitioners,
even in an agrarian dispute. Where the quasi-judicial body finds that the
complainants/petitioners are not entitled to the rights they are demanding, it
is an erroneous interpretation of authority for that quasi-judicial body to order
private property to be awarded to future beneficiaries. The order segregation
400 hectares of the CMU land was issued on a finding that the complainants
are not entitled as beneficiaries, and on an erroneous assumption that the
CMU land which is excluded or exempted under the law is subject to the
coverage of the CARP. Going beyond what was asked by the complainants
who were not entitled to the relief prayed the complainants who were not
entitled to the relief prayed for, constitutes a grave abuse of discretion
because it implies such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction.
The education of the youth and agrarian reform are admittedly among the
highest priorities in the government socio-economic programs. In this case,
neither need give way to the other. Certainly, there must still be vast tracts of
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
agencies1 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 Coverage3 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 permits7 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.
ROXAS VS. CA
G.R. No. 118436
March 21, 1997
FACTS: This is a petition for review of the CA decision dated December 8,
1994 alleging reversible error committed by respondent appellate court when
it affirmed the decision of the RTC of Cavite.
On July 1990, herein private respondent Maguesun Management and
Development Corporation (Maguesun Corporation) filed an Application for
Registration of two parcels of unregistered land located in Tagaytay City. In
support of its application for registration, Maguesun Corporation presented a
Deed of Absolute Sale dated June 10, 1990, executed by Zenaida Melliza as
vendor and indicating the purchase price to be P170,000.00. Zenaida Melliza
in turn, bought the property from the original petitioner herein (because she
was substituted by her heirs in the proceedings upon her death), Trinidad de
Leon vda. de Roxas for P200,000.00 two and a half months earlier, as
evidenced by a Deed of Sale and an Affidavit of Self-Adjudication.
Notices of the initial hearing were sent by the Land Registration Authority
(LRA) on the basis of Maguesun Corporations application for registration
enumerating adjoining owners, occupants or adverse claimants; Since
Trinidad de Leon vda. de Roxas was not named therein, she was not sent a
notice of the proceedings. After an Order of general default was issued, the
trial court proceeded to hear the land registration case. Eventually, on
February 1991 the RTC granted Maguesun Corporations application for
registration.
It was only when the caretaker of the property was being asked to vacate the
land that petitioner Trinidad de Leon Vda. de Roxas learned of its sale and
the registration of the lots in Maguesun Corporations name.
Hence, on April 1991, petitioner filed a petition for review before the RTC to
set aside the decree of registration on the ground that Maguesun Corporation
committed actual fraud. She alleged that the lots were among the properties
she inherited from her husband, former President Manuel A. Roxas and that
her family had been in open, continuous, adverse and uninterrupted
possession of the subject property in the concept of owner for more than
thirty years before they applied for its registration under the Torrens System
of land titling (in which no decision has been rendered thereon). Petitioner
further denied that she sold the lots to Zenaida Melliza whom she had never
met before and that her signature was forged in both the Deed of Sale and
the Affidavit of Self-Adjudication. She also claimed that Maguesun
Corporation intentionally omitted her name as an adverse claimant, occupant
or adjoining owner in the application for registration submitted to the LRA
such that the latter could not send her a Notice of Initial Hearing.
A document examiner from the PNP concluded that there was no forgery.
Upon petitioners motion, the signatures were re-examined by another expert
from NBI. The latter testified that the signatures on the questioned and
sample documents were, however, not written by the same person.
Despite the foregoing testimonies and pronouncements, the trial
court dismissed the petition for review of decree of registration. Placing
greater weight on the findings and testimony of the PNP document examiner,
it concluded that the questioned documents were not forged and if they were,
it was Zenaida Melliza, and not Maguesun Corporation, who was
responsible. Accordingly, Maguesun Corporation did not commit actual fraud.
In a decision dated December 8, 1994, respondent court denied the
petition for review and affirmed the findings of the trial court. The
CA held that petitioner failed to and demonstrate that there was actual
or extrinsic fraud, not merely constructive or intrinsic fraud, a
prerequisite for purposes of annuling a judgment or reviewing a decree
of registration.
Hence, the instant petition for review where it is alleged that the CA erred in
ruling that Maguesun Corporation did not commit actual fraud warranting the
setting aside of the registration decree and in resolving the appeal on the
basis of Maguesun Corporations good faith. Petitioners pray that the
registration of the subject lots in the name of Maguesun Corporation be
cancelled, that said property be adjudicated in favor of petitioners and that
respondent corporation pay for damages.
ISSUE: WON private respondent Maguesun Corporation committed actual
fraud (signature forgery) in obtaining a decree of registration over the two
parcels of land, actual fraud being the only ground to reopen or review a
decree of registration.
HELD: WHEREFORE, the instant petition is hereby GRANTED. The
Decision of the CA is hereby REVERSED AND SET AS
1. The Court here finds that respondent Maguesun Corporation committed
actual fraud in obtaining the decree of registration sought to be reviewed by
petitioner. A close scrutiny of the evidence on record leads the Court to the
irresistible conclusion that forgery was indeed attendant in the case at bar.
Although there is no proof of respondent Maguesun Corporations direct
participation in the execution and preparation of the forged instruments, there
are sufficient indicia which proves that Maguesun Corporation is not the
innocent purchaser for value who merits the protection of the law. Even to a
laymans eye, the documents, as well as the enlarged photographic exhibit of
the signatures, reveal forgery. Additionally, Zenaida Mellizas non-
appearance raises doubt as to her existence
Petitioner and her family also own several other pieces of property, some of
which are leased out as restaurants. This is an indication that petitioner is not
unaware of the value of her properties. Hence, it is unlikely that indication
that she would sell over 13,000 sqm of prime property in Tagaytay City to a
stranger for a measly P200,000.00. Would an ordinary person sell more than
13,000 sqm of prime property for P170,000.00 when it was earlier purchased
for P200,000.00?
3. Petitioner Vda. de Roxas contended that Maguesun Corporation
intentionally omitted their name, or that of the Roxas family, as having a
claim to or as an occupant of the subject property.
The names in full and addresses, as far as known to the undersigned, of the
owners of all adjoining properties; of the persons mentioned in paragraphs 3
and 5 (mortgagors, encumbrancers, and occupants) and of the
person shown on the plan (original application submitted in LRC No) as
claimants are as follows:
Hilario Luna, Jose Gil, Leon Luna, Provincial Road
all at Tagaytay City (no house No.) 30
The highlighted words are typed in with a different typewriter, with the first
five letters of the word provincial typed over correction fluid. Maguesun
Corporation, however, annexed a differently-worded application for
the petition to review case. In the copy submitted to the trial court, the
answer to the same number is as follows:
Hilario Luna, Jose Gil, Leon Luna, Roxas.
The discrepancy which is unexplained appears intentional. If the word
Roxas were indeed erased and replaced with Provincial Road all at
Tagaytay City (no house No.) in the original application submitted in LRC
No. TG-373 BUT the copy with the word Roxas was submitted to the trial
court, it is reasonable to assume that the reason is to mislead the court into
thinking that Roxas was placed in the original application as an adjoining
owner, encumbrancer, occupant or claimant, the same application which
formed the basis for the LRA Authority in sending out notices of initial
hearing. (Section 15 of PD No. 1529 actually requires the applicant for
registration to state the full names and addresses of all occupants of the land
and those of adjoining owners, if known and if not known, the extent of the
search made to find them. Respondent corporation likewise failed to comply
with this requirement of law.)
Respondent corporations intentional concealment and representation of
petitioners interest in the subject lots as possessor, occupant and
claimant constitutes actual fraud justifying the reopening and review of
the decree of registration. Through such misfeasance, the Roxas family
was kept ignorant of the registration proceedings involving their property,
thus effectively depriving them of their day in court
The truth is that the Roxas family had been in possession of the property
uninterruptedly through their caretaker, Jose Ramirez. Respondent
Maguesun Corporation also declared in number 5 of the same application
that the subject land was unoccupied when in truth and in fact, the Roxas
family caretaker resided in the subject property.
To conclude, it is quite clear that respondent corporation cannot tack its
possession to that of petitioner as predecessor-in-interest. Zenaida Melliza
conveyed not title over the subject parcels of land to Maguesun Corporation
as she was not the owner thereof. Maguesun Corporation is thus not
entitled to the registration decree which the trial court granted in its
decision.
Petitioner has not been interrupted in her more than thirty years of open,
uninterrupted, exclusive and notorious possession in the concept of an owner
over the subject lots by the irregular transaction to Zenaida Melliza.She
therefore retains title proper and sufficient for original registration over the
two parcels of land in question pursuant to Section 14 of PD No. 1529.
NOTES:
1. 1. Registration of untitled land under the Torrens System is done pursuant
to PD No. 1529, the Property Registration Decree which amended and
codified laws relative to registration of property. 15 Adjudication of land in a
registration (or cadastral) case does not become final and incontrovertible
until the expiration of one year after the entry of the final decree. Before
such time, the decision remains under the control and sound discretion of
the court rendering the decree, which court after hearing, may set aside
the decision or decree and adjudicate the land to another
party. 16 Absence, minority or other disability of any person affected, or
any proceeding in court for reversing judgments, are not considered
grounds to reopen or revise said decree. s. 17It is further required that a
petition for reopening and review of the decree of registration be filed
within one year from the date of entry of said decree, that the petitioner
has a real and dominical right and the property has not yet been
transferred to an innocent purchaser.
2. 2. Fraud is of two kinds: actual or constructive. Actual or positive fraud
proceeds from an intentional deception practiced by means of the
misrepresentation or concealment of a material fact. 19Constructive fraud
is construed as a fraud because of its detrimental effect upon public
interests and public or private confidence, even though the act is not
done or committed with an actual design to commit positive fraud or injury
upon other persons.
Fraud may also be either extrinsic or intrinsic. Fraud is regarded as intrinsic
where the fraudulent acts pertain to an issue involved in the original action,
or where the acts constituting the fraud were or could have been litigated
therein, and is regarded as extrinsic where it prevents a party from having a
trial or from presenting his entire case to the court, or where it operates upon
matters pertaining not to the judgment itself but to the manner in which it is
procured, so that there is not a fair submission of the controversy. 21 Extrinsic
fraud is also actual fraud, but collateral to the transaction sued upon. 22
The distinctions are significant because only actual fraud or extrinsic fraud
has been accepted as grounds for a judgment to be annulled or, as in this
case, a decree of registration reopened and reviewed.
1. Disclosure of petitioners adverse interest, occupation and possession
should be made at the appropriate time, i.e., at the time of the application
for registration, otherwise, the persons concerned will not be sent notices
of the initial hearing and will, therefore, miss the opportunity to present
their opposition or claims.
1. Also, Publication of the Notice of Initial Hearing was made in the Official
Gazette and in the Record Newsweekly, admittedly not a newspaper of
general circulation. While publication of the notice in the Official Gazette is
sufficient to confer jurisdiction upon the court, publication in a newspaper
of general circulation remains an indispensable procedural requirement.
Couched in mandatory terms, it is a component of procedural due process
and aimed at giving as wide publicity as possible so that all persons
having an adverse interest in the land subject of the registration
proceedings may be notified thereof. Although jurisdiction of the court is
not affected, the fact that publication was not made in a newspaper of
general circulation is material and relevant in assessing the applicants
right or title to the land.
DEPARTMENT OF AGRARIAN G.R. No. 162070
REFORM, represented by SECRETARY JOSE MARI B. PONCE (OIC),
Present: Petitioner, Davide, C.J., Puno, Panganiban, Quisumbing,
Ynares-Santiago, Sandoval-Gutierrez, Carpio,
- versus - Austria-Martinez,
Corona, Carpio Morales, Callejo, Sr., Azcuna, Tinga, Chico-Nazario and
Garcia, JJ. DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN and
Promulgated: HARRY T. SUTTON, Respondents. October 19, 2005
x-----------------------------------x
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
Order[7] 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 appeal[9] 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. DAR[16] 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 the conversion 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. 7881[20] 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.