Association of Small Landowners in the Philippines, Inc. vs Secretary of Agrarian 1.
1. Whether or not there was a violation of the equal protection clause.
Reform
175 SCRA 343 – Political Law – Constitutional Law – Bill of Rights – Equal Protection –
Valid Classification
Eminent Domain – Just Compensation
These are four consolidated cases questioning the constitutionality of the Comprehensive
Agrarian Reform Act (R.A. No. 6657 and related laws i.e., Agrarian Land Reform Code or R.A.
No. 3844).
Brief background: Article XIII of the Constitution on Social Justice and Human Rights includes
a call for the adoption by the State of an agrarian reform program. The State shall, by law,
undertake an agrarian reform program founded on the right of farmers and regular farm
workers, who are landless, to own directly or collectively the lands they till or, in the case of
other farm workers, to receive a just share of the fruits thereof. RA 3844 was enacted in 1963.
P.D. No. 27 was promulgated in 1972 to provide for the compulsory acquisition of private lands
for distribution among tenant-farmers and to specify maximum retention limits for landowners.
In 1987, President Corazon Aquino issued E.O. No. 228, declaring full land ownership in favor
of the beneficiaries of PD 27 and providing for the valuation of still unvalued lands covered by
the decree as well as the manner of their payment. In 1987, P.P. No. 131, instituting a
comprehensive agrarian reform program (CARP) was enacted; later, E.O. No. 229, providing
the mechanics for its (PP131’s) implementation, was also enacted. Afterwhich is the
enactment of R.A. No. 6657, Comprehensive Agrarian Reform Law in 1988. This law, while
considerably changing the earlier mentioned enactments, nevertheless gives them suppletory
effect insofar as they are not inconsistent with its provisions.
[Two of the consolidated cases are discussed below]
G.R. No. 78742: (Association of Small Landowners vs Secretary)
The Association of Small Landowners in the Philippines, Inc. sought exception from the land
distribution scheme provided for in R.A. 6657. The Association is comprised of landowners of
ricelands and cornlands whose landholdings do not exceed 7 hectares. They invoke that since
their landholdings are less than 7 hectares, they should not be forced to distribute their land to
their tenants under R.A. 6657 for they themselves have shown willingness to till their own land.
In short, they want to be exempted from agrarian reform program because they claim to belong
to a different class.
G.R. No. 79777: (Manaay vs Juico)
Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228, and 229)
on the ground that these laws already valuated their lands for the agrarian reform program and
that the specific amount must be determined by the Department of Agrarian Reform (DAR).
Manaay averred that this violated the principle in eminent domain which provides that only
courts can determine just compensation. This, for Manaay, also violated due process for under
the constitution, no property shall be taken for public use without just compensation.
Manaay also questioned the provision which states that landowners may be paid for their land
in bonds and not necessarily in cash. Manaay averred that just compensation has always been
in the form of money and not in bonds.
ISSUE:
2. Whether or not there is a violation of due process.
3. Whether or not just compensation, under the agrarian reform program, must be in terms of
cash.
HELD:
1. No. The Association had not shown any proof that they belong to a different class exempt
from the agrarian reform program. Under the law, classification has been defined as the
grouping of persons or things similar to each other in certain particulars and different from
each other in these same particulars. To be valid, it must conform to the following
requirements:
(1) it must be based on substantial distinctions;
(2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class.
Equal protection simply means that all persons or things similarly situated must be treated
alike both as to the rights conferred and the liabilities imposed. The Association have not
shown that they belong to a different class and entitled to a different treatment. The argument
that not only landowners but also owners of other properties must be made to share the
burden of implementing land reform must be rejected. There is a substantial distinction
between these two classes of owners that is clearly visible except to those who will not see.
There is no need to elaborate on this matter. In any event, the Congress is allowed a wide
leeway in providing for a valid classification. Its decision is accorded recognition and respect
by the courts of justice except only where its discretion is abused to the detriment of the Bill of
Rights. In the contrary, it appears that Congress is right in classifying small landowners as part
of the agrarian reform program.
2. No. It is true that the determination of just compensation is a power lodged in the courts.
However, there is no law which prohibits administrative bodies like the DAR from determining
just compensation. In fact, just compensation can be that amount agreed upon by the
landowner and the government – even without judicial intervention so long as both parties
agree. The DAR can determine just compensation through appraisers and if the landowner
agrees, then judicial intervention is not needed. What is contemplated by law however is that,
the just compensation determined by an administrative body is merely preliminary. If the
landowner does not agree with the finding of just compensation by an administrative body,
then it can go to court and the determination of the latter shall be the final determination. This
is even so provided by RA 6657:
Section 16 (f): Any party who disagrees with the decision may bring the matter to the court of
proper jurisdiction for final determination of just compensation.
3. No. Money as [sole] payment for just compensation is merely a concept in traditional
exercise of eminent domain. The agrarian reform program is a revolutionary exercise of
eminent domain. The program will require billions of pesos in funds if all compensation have to
be made in cash – if everything is in cash, then the government will not have sufficient money
hence, bonds, and other securities, i.e., shares of stocks, may be used for just compensation.
luz farms v sec. of DAR GR 86889
Luz Farms v. Secretary of DAR
G.R. No. 86889 December 4, 1990
Facts:
On 10 June 1988, RA 6657 was approved by the President of the Philippines, which includes,
among others, the raising of livestock, poultry and swine in its coverage.
Petitioner Luz Farms, a corporation engaged in the livestock and poultry business, avers that it
would be adversely affected by the enforcement of sections 3(b), 11, 13, 16 (d), 17 and 32 of
the said law. Hence, it prayed that the said law be declared unconstitutional. The mentioned
sections of the law provies, among others, the product-sharing plan, including those engaged
in livestock and poultry business.
Luz Farms further argued that livestock or poultry raising is not similar with crop or tree
farming. That the land is not the primary resource in this undertaking and represents no more
than 5% of the total investments of commercial livestock and poultry raisers. That the land is
incidental but not the principal factor or consideration in their industry. Hence, it argued that it
should not be included in the coverage of RA 6657 which covers “agricultural lands”.
Issue: Whether or not certain provisions of RA 6657 is unconstitutional for including in its
definition of “Agriculture” the livestock and poultyr industry?
Ruling:
The Court held YES.
Looking into the transcript of the Constitutional Commission on the meaning of the word
“agriculture”, it showed that the framers never intended to include livestock and poultry industry
in the coverage of the constitutionally mandated agrarian reform program of the government.
Further, Commissioner Tadeo pointed out that the reasin why they used the term
“farmworkers” rather than “agricultural workers” in the said law is because “agricultural
workers” includes the livestock and poultry industry, hence, since they do not intend to include
the latter, they used “farmworkers” to have distinction.
Hence, there is merit on the petitioner’s argument that the product-sharing plan applied to
“corporate farms” in the contested provisions is unreasonable for being confiscatory and
violative of the due process of law.
DAR vs Sutton
DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY JOSE MARI B.
PONCE (OIC), Petitioner, DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN and HARRY
T. SUTTON, Respondents.
Respondent inherited a land in Aroroy, Masbate devoted exclusively to cow and calf breeding.
On October 26, 1987, pursuant to the existing agrarian reform program of the government,
respondent made a voluntary offer to sell (VOS) their landholdings to petitioner DAR to avail
incentives under the law.
On June 10, 1988, a new agrarian law, RA 6657 known as Comprehensive Agrarian Reform
Law (CARL) of 1988 took effect. It included in its coverage farms used for raising livestock,
poultry and swine.
An en banc decision in the case of Luz Farms vs. Secretary of DAR, ruled that land devoted to
livestock and poultry-raising are not included in the definition of agricultural land.
In view of the Luz Farm ruling, respondent filed with petitioner DAR a formal request to
withdraw their VOS as their landholding was exclusively to cattle-raising and thus exempted
from the coverage of the CARL. Petitioner ignored their request.
DAR issue A.O No. 9, series of 1993, which provided that only portion 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 and the ration of 1.7815 hectares for
livestock infrastructure for every 21 heads of cattle shall likewise be excluded from the
operation of the CARL.
DAR Secretary Garilao issue an Order partially granting the application of respondents for
exemption from the coverage of CARL applying the retention limit outlined in the DAR A.O No.
9. Petitioner ordered the rest of respondents’ landholding to be segregated and placed under
Compulsory Acquisition.
On October 2001, the Office of the President affirmed the impugned Order of petitioner DAR. It
ruled that DAR A.O. no. 9 does not run counter to the Luz Farm case as the A.O provided the
guidelines to determine whether a certain parcel of land is being used for cattle-raising.
Issue:
Whether of not DAR A.O No.9 is unconstitutional?
Held:
Administrative agencies are endowed with powers legislative in nature. 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. 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. 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.

In the case at bar, SC 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.
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.
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. 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.
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. In the
case at bar, after the passage of the 1988 CARL, Congress enacted R.A. No. 7881 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. 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.
Alita v CA
Facts:Private respondents' predecessors-in-interest acquired the subject parcel of lands
throughhomestead patent under the provisions of Commonwealth Act No. 141. Private
respondentsherein are desirous of personally cultivating these lands, but petitioners refuse to
vacate, relyingon the provisions of P.D. 27 and P.D. 316. On June 18, 1981, private
respondents instituted acomplaint for the declaration of P.D. 27 and all other Decrees, Letters
of Instructions and GeneralOrders issued in connection therewith as inapplicable to lands
obtained through homestead law.The RTC dismissed the complaint but on motion for
reconsideration it declared that P.D. 27 isnot applicable to homestead lands. On appeal to the
CA, the decision of the RTC was sustained.Issue:Whether or not lands acquired through
homestead law are covered by CARPHeld:Petitioners is correct in saying that P.D. 27
decreeing the emancipation of tenants fromthe bondage of the soil and transferring to them
ownership of the land they till is a sweepingsocial legislation, a remedial measure promulgated
pursuant to the social justice precepts of theConstitution. However, such contention cannot be
invoked to defeat the very purpose of theenactment of the Public Land Act or Commonwealth
Act No. 141. The Philippine Constitutionlikewise respects the superiority of the homesteaders'
rights over the rights of the tenantsguaranteed by the Agrarian Reform statute. Provided, that
the original homestead grantees ortheir direct compulsory heirs who still own the original
homestead at the time of the approval ofthis Act shall retain the same areas as long as they
continue to cultivate said homestead.
Case Digest: Natalia Realty, Inc. and Estate Developer and Investors Corp vs DAR GR No
103302
Natalia Realty, Inc. and Estate Developer and Investors Corp vs DAR
GR No 103302 August 12, 1993
Facts:
Natalia is the owner of 3 contiguous parcels of land with an area of 120.9793 hectares, 1.3205
hectares and 2.7080 hectares or a total of 125.0078 hectares, which are covered by TCT No.
31527. Presidential Proclamation No. 1637 set aside 20,312 hectares of land 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 with the reservation, petitioner EDIC as developer of Natalia
applied for and was granted preliminary approval and location clearances by the Human
Settlements Regulatory Commission, which Natalia thereafter became Antipolo Hills
Subdivision. On June 15 1988, Ra 6657 went to effect. Respondent issed a Notice of
Coverage on the undeveloped portions of Antipolo Hills Subdivision. Natalia and EDIC
immediately registered its objection to the notice of coverage and requested the cancellation of
the Notice of Coverage.
Natalia and EDIC both argued that the properties ceased to be agricultural lands when they
were included in the areas reserved by Presidential Proclamation for the townsite reservation.
DAR then contended that the permits granted were not valid and binding since they did not
comply with t he implementing Standards, Rules and Regulations of PD 957 (The Subdivision
and Condominium Buyers Protective Decree), and that there was no valid conversion of the
properties.
Issue:
Whether or not lands not classified for agricultural use, as approved by the Housing and Land
Use Regulatory Board and its agencies prior to June 15, 1988 covered by RA 6657.
Ruling:
No, Sec. 4 of RA 6657 provides that CARL shall cover, regardless of tenurial arrangement and
commodity produced, all public and private agricultural lands. And agricultural lands is referred
to as land devoted to agricultural activity and not classified as mineral, forst, residential,
commercial or industrial land. Thus, the underdeveloped portions of the Antipolo Hills
Subdivision cannot be considered as agricultural lands for this land was intended for
residential use. They ceased to be agricultural land by virtue of the Presidential Proclamation
No. 1637.
G.R. No. 127876 December 17, 1999 ROXAS & CO., INC. vs. THE HONORABLE COURT
OF APPEALS, PUNO, J.:
FACTS: (1) Roxas & Co. is a domestic corporation and is the registered owner of three
haciendas, namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality
of Nasugbu, Batangas. Hacienda Palico is  1,024 hectares in Hacienda Banilad is 1,050
hectares in area. Hacienda Caylaway is  867.4571 hectares in area. (2) Before the law's
effectivity, on May 6, 1988, [Roxas & Co.] filed with respondent DAR a voluntary offer to sell
[VOS]Â Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and
Banilad were later placed under compulsory acquisition by . . . DAR in accordance with the
CARL. (3) Nevertheless, on August 6, 1992, [Roxas & Co.], through its President, Eduardo J.
Roxas, sent a letter to the Secretary of . . . DARÂ withdrawing its VOSÂ of Hacienda
Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the
reclassification of Hacienda Caylaway from agricultural to non-agricultural. As a result,
petitioner informed respondent DAR that it was applying for conversion of Hacienda
Caylaway from agricultural to other uses.
ISSUE: Whether the Haciendas Palico, Banilad and Caylaway, all situated in Nasugbu,
Batangas, are non-agricultural and outside the scope of Republic Act No. 665
RULING: Yes. The Supreme Court held that The DAR itself has issued administrative circulars
governing lands which are outside of CARP and may not be subjected to land reform.
Administrative Order No. 3, Series of 1996 declares in its policy statement what landholdings
are outside the coverage of CARP. The AO is explicit in providing that such non-covered
properties shall be reconveyed to the original transferors or owners. These non-covered lands
are: a. Land, or portions thereof, found to be no longer suitable for agriculture and, therefore,
could not be given appropriate valuation by the Land Bank of the Philippines (LBP); b. Those
were a Conversion Order has already been issued by the DAR allowing the use of the
landholding other than for agricultural purposes in accordance with Section 65 of R.A. No.
6657 and Administrative Order No. 12, Series of 1994; c. Property determined to be exempted
from CARP coverage pursuant to Department of Justice Opinion Nos. 44 and 181; or d. Where
a Presidential Proclamation has been issued declaring the subject property for certain uses
other than agricultural. In the present case, Proclamation 1520 dated November 20, 1975 is
part of the law of the land. It declares the area in and around Nasugbu, Batangas, as a Tourist
Zone. It has not been repealed, and has in fact been used by DAR to justify conversion of
other contiguous and nearby properties of other parties. Furthermore, the Sangguniang Bayan
of Nasugbu, affirmed by the Sangguniang Panlalawigan of Batangas, expressly defines the
property as tourist, not agricultural. The power to classify its territory is given by law to the local
governments.
Central Mindanao University vs. Department of Agrarian Reform Adjudication Board 215
SCRA 86 (1992) Central Mindanao University vs. Department of Agrarian Reform Adjudication
Board 215 SCRA 86 (1992)
Facts:
On 16 January 1958, President Carlos Garcia issued Proclamation No. 467 reserving for the
Mindanao Agricultural College, now the CMU, a piece of land to be used as its future campus.
In 1984, CMU embarked on a project titled "Kilusang Sariling Sikap" wherein parcels of land
were leased to its faculty members and employees. Under the terms of the program, CMU will
assist faculty members and employee groups through the extension of technical know-how,
training and other kinds of assistance. In turn, they paid the CMU a service fee for use of the
land. The agreement explicitly provided that there will be no tenancy relationship between the
lessees and the CMU.
When the program was terminated, a case was filed by the participants of the "Kilusang
Sariling Sikap" for declaration of status as tenants under the CARP. In its resolution, DARAB,
ordered, among others, the segregation of 400 hectares of the land for distribution under
CARP. The land was subjected to coverage on the basis of DAR's determination that the lands
do not meet the condition for exemption, that is, it is not "actually, directly, and exclusively
used" for educational purposes.
Issue:
Is the CMU land covered by CARP? Who determines whether lands reserved for public use by
presidential proclamation is no longer actually, directly and exclusively used and necessary for
the purpose for which they are reserved?
Held:
The land is exempted from CARP. CMU is in the best position to resolve and answer the
question of when and what lands are found necessary for its use. The Court also chided the
DARAB for resolving this issue of exemption on the basis of "CMU's present needs." The Court
stated that the DARAB decision stating that for the land to be exempt it must be "presently,
actively exploited and utilized by the university in carrying out its present educational program
with its present student population and academic faculty" overlooked the very significant factor
of growth of the university in the years to come.
DEPARTMENT OF AGRARIAN REFORM vs. DEPARTMENT OF EDUCATION, CULTURE
AND SPORTS (DECS). G.R. No. 158228 Â Â Â Â Â Â March 23, 2004 FACTS: Lot No.
2509 and Lot No. 817-D which were donated by the late Esteban Jalandoni to respondent
DECS (formerly Bureau of Education). Consequently, titles thereto were transferred in the
name of respondent DECS . Respondent DECS leased the lands to Anglo Agricultural
Corporation for 10 agricultural crop years, commencing from 1984-1994. The contract of lease
was subsequently renewed for another 10 agricultural crop years or until 2005. On June 10,
1993, Eugenio Alpar and several others, claiming to be permanent and regular farm workers of
the subject lands, filed a petition for Compulsory Agrarian Reform Program (CARP) coverage
with the Municipal Agrarian Reform Office (MARO) of Escalante. After investigation, MARO
Jacinto R. Piosa, sent a "Notice of Coverage" to respondent DECS, stating that the subject
lands are now covered by CARP and inviting its representatives for a conference with the
farmer beneficiaries. The recommendation for coverage was approved by DAR Regional
Director Dominador B. Andres approved the r, the dispositive portion of which reads:
Respondent DECS appealed the case to the Secretary of Agrarian Reform which affirmed the
Order of the Regional Director. Respondent DECS filed a petition for certiorari with the Court of
Appeals, which set aside the decision of the Secretary of Agrarian Reform. Hence, the instant
petition for review.
ISSUE: Whether or not the subject properties are exempt from the coverage of Republic Act
No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1998 (CARL).
HELD: No. While respondent DECS sought exemption from CARP coverage on the ground
that all the income derived from its contract of lease with Anglo Agricultural Corporation were
actually, directly and exclusively used for educational purposes, such as for the repairs and
renovations of schools in the nearby locality, the court is inclined with the petitioner’s argument
that the lands subject hereof are not exempt from the CARP coverage because the same are
not actually, directly and exclusively used as school sites or campuses, as they are in fact
leased to Anglo Agricultural Corporation. Further, to be exempt from the coverage, it is the
land per se, not the income derived therefrom, that must be actually, directly and exclusively
used for educational purposes. Section 10 of R.A. No. 6657 enumerates the types of lands
which are exempted from the coverage of CARP as well as the purposes of their exemption
specifying those lands actually, directly and exclusively used and found to be necessary for
national defense, Â school sites and campuses, including experimental farm stations operated
by public or private schools for educational purposes, shall be exempt from the coverage of
this Act. Clearly, a reading of the paragraph shows that, in order to be exempt from the
coverage: 1) the land must be "actually, directly, and exclusively used and found to be
necessary; 2) the purpose is "for school sites and campuses, including experimental farm
stations operated by public or private schools for educational purposes."
Friday, November 25, 2016
G.R. No. 103125 Case Digest
G.R. No. 103125, May 17, 1993
Province of Camarines Sur
vs Court of Appeals
Ponente: Quiason
Facts:
This is an appeal for certiorari on the decision on the issue on whether the expropriation of
agricultural lands by LGU is subject to prior approval of the DAR.
December 1988, Sangguniang Panlalawigan of CamSur authorized the provincial governor to
purchase or expropriate property contiguous to the provincial capitol site in order to establish a
pilot farm for non-food and non-traditional agricultural crops and a housing project for
provincial government employees.
Pursuant to the resolution, Gov. Villafuerte filed two separate cases for expropriation against
Ernesto San Joaquin and Efren San Joaquin. Upon motion for the issuance of writ or
possession, San Joaquins failed to appear at the hearing.
San Joaquins later moved to dismiss the complaints on the ground of inadequacy of the price
offered for their property. The court denied the motion to dismiss and authorized the province
to take possession of the properties.
San Joaquins filed for motion for relief, but denied as well. In their petition. Asked by the CA,
Solicitor General stated that there is no need for the approval of the president for the province
to expropriate properties, however, the approval of the DAR is needed to convert the property
from agricultural to non-agricultural (housing purpose).
CA set aside the decision of the trial court suspending the possession and expropriation of the
property until th province has acquired the approval of DAR. Hence, this petition.
Ruling:
The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive
Order No. 129-A, Series of 1987, cannot be the source of the authority of the Department of
Agrarian Reform to determine the suitability of a parcel of agricultural land for the purpose to
which it would be devoted by the expropriating authority. While those rules vest on the
Department of Agrarian Reform the exclusive authority to approve or disapprove conversions
of agricultural lands for residential, commercial or industrial uses, such authority is limited to
the applications for reclassification submitted by the land owners or tenant beneficiaries.
To sustain the Court of Appeals would mean that the local government units can no longer
expropriate agricultural lands needed for the construction of roads, bridges, schools, hospitals,
etc, without first applying for conversion of the use of the lands with the Department of
Agrarian Reform, because all of these projects would naturally involve a change in the land
use. In effect, it would then be the Department of Agrarian Reform to scrutinize whether the
expropriation is for a public purpose or public use.
Ordinarily, it is the legislative branch of the local government unit that shall determine whether
the use of the property sought to be expropriated shall be public, the same being an
expression of legislative policy. The courts defer to such legislative determination and will
intervene only when a particular undertaking has no real or substantial relation to the public
use.
G.R. No. 149548 December 14, 2010 ROXAS & COMPANY, INC., Petitioner,

vs.
DAMBA-NFSW and the DEPARTMENT OF AGRARIAN REFORM, Respondents.
FACTS:
Roxas and Company, Inc. vs. DAMBA-NSFW and DAR
FACTS:
Roxas & Co. is a domestic corporation and is the registered owner of three haciendas. On July
27, 1987, the Congress of the Philippines formally convened and took over legislative power
from the President. This Congress passed Republic Act No. 6657, the Comprehensive
Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988
and took effect on June 15, 1988. Before the law’s effectivity, on May 6, 1988, [Roxas & Co.]
filed with respondent DAR a voluntary offer to sell [VOS] Hacienda Caylaway pursuant to the
provisions of E.O. No. 229.Haciendas Palico and Banilad were later placed under compulsory
acquisition by DAR in accordance with the CARL. On August 6, 1992 [Roxas & Co.], through
its President, sent a letter to the Secretary of DAR withdrawing its VOS of Hacienda
Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the
reclassification of Hacienda Caylaway from agricultural to non-agricultural As a result,
petitioner informed respondent DAR that it was applying for conversion of Hacienda
Caylaway from agricultural to other uses. The petitions nub on the interpretation of Presidential
Proclamation (PP) 1520 reads: DECLARING THEMUNICIPALITIES OF MARAGONDON AND
TERNATE IN CAVITE PROVINCE AND THEMUNICIPALITY OF NASUGBU IN BATANGAS
AS A TOURISTZONE, AND FOR OTHERPURPOSES Essentially, Roxas & Co. filed its
application for conversion of its three haciendas from agricultural to non-agricultural on the
assumption that the issuance of PP 1520 which declared Nasugbu, Batangas as a tourism
zone, reclassified them to non-agricultural uses. Its pending application notwithstanding, the
Department of Agrarian Reform (DAR) issued Certificates of Land Ownership Award (CLOAs)
to the farmer-beneficiaries in the three haciendas including CLOA No. 6654 which wasissued
on October 15, 1993 covering 513.983 hectares, the subject of G.R.
No.167505. Roxas & Co. filed with the DAR an application for exemption from thecoverage of
the Comprehensive Agrarian Reform Program (CARP) of 1988 on thebasis of PP 1520 and of
DAR Administrative Order (AO) No. 6, Series of 19943 which states that all lands already
classified as commercial, industrial, or residential before the effectivity of CARP no longer
need conversion clearance from the DAR.
ISSUE: Whether the subject lands are exempt from Comprehensive Agrarian Reform Program
(CARP) coverage.
HELD: No. While the Court acknowledged the passage of the Tourism Act as another vehicle
for potential tourism areas to be exempted from CARP coverage, that did not in any way
pronounce as meritorious Roxas & Co.’s subsequent application with the TIEZA to declare its
properties as tourism enterprise zones. That is for the TIEZA, not this Court, to determine.
Whatever decision the TIEZA renders in Roxas & Co.’s application does not in any way affect
the merits of these consolidated cases. Roxas & Co. is merely nitpicking on the issue. Since
the DAR had initially issued CLOAs to the farmer-beneficiaries of the nine parcels of land in
Hacienda Palico, the assailed Decision merely reiterated the original designation of the
affected individuals as farmer-beneficiaries who should be entitled to disturbance
compensation before the cancellation of their respective CLOAs is effected. This is in
pursuance of the directive of DAR Administrative Order No. 6 (Series of 1994) which mandates
the payment of disturbance compensation before Roxas & Co.’s application for exemption may
be completely granted. With regard [to] the allegation that oppositors-movants are already
CLOA holders of subject propert[ies] and deserve to be notified, as owners, of the initiated
questioned exemption application, is of no moment. The Supreme Court in the case of Roxas
[&] Co., Inc. v. Court of Appeals, 321 SCRA 106, held: "We stress that the failure of
respondent DAR to comply with the requisites of due process in the acquisition proceedings
does not give this Court the power to nullify the CLOA’s already issued to the farmer
beneficiaries. x x x x. Anyhow, the farmer[-]beneficiaries hold the property in trust for the
rightful owner of the land." Since subject landholding has been validly determined to be CARP-
exempt, therefore, the previous issuance of the CLOA of oppositors-movants is erroneous.
Hence, similar to the situation of the above-quoted Supreme Court Decision, oppositors-
movants only hold the property in trust for the rightful owners of the land and are not the
owners of subject landholding who should be notified of the exemption application of applicant
Roxas & Company, Incorporated.1avvphi1