Association of Small Landholders v Sec of
Agrarian Reform
G.R. No. 78742, July 14, 1989
FACTS:
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 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. 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
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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:
1. Whether or not there was a violation of the
equal protection clause.
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
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government will not have sufficient money hence,
bonds, and other securities, i.e., shares of stocks,
may be used for just compensation.
HEIRS OF MARIO MALABANAN vs. REPUBLIC
OF THE PHILIPPINES
GR No. 179987 April 29, 2009
FACTS:
On 20 February 1998, Mario Malabanan filed an
application for land registration before the RTC of
Cavite-Tagaytay, covering a parcel of land
situated in Silang Cavite, consisting of 71,324
square meters. Malabanan claimed that he had
purchased the property from Eduardo Velazco,
and that he and his predecessors-in-interest had
been in open, notorious, and continuous adverse
and peaceful possession of the land for more than
thirty (30) years. Velazco testified that the
property was originally belonged to a twenty-two
hectare property owned by his great-grandfather,
Lino Velazco. Lino had four sons– Benedicto,
Gregorio, Eduardo and Esteban–the fourth being
Aristedes’s grandfather. Upon Lino’s death, his
four sons inherited the property and divided it
among themselves. But by 1966, Esteban’s wife,
Magdalena, had become the administrator of all
the properties inherited by the Velazco sons from
their father, Lino. After the death of Esteban and
Magdalena, their son Virgilio succeeded them in
administering the properties, including Lot 9864-
A, which originally belonged to his uncle, Eduardo
Velazco. It was this property that was sold by
Eduardo Velazco to Malabanan.
Among the evidence presented by Malabanan
during trial was a Certification dated 11 June
2001, issued by the Community Environment &
Natural Resources Office, Department of
Environment and Natural Resources (CENRO-
DENR), which stated that the subject property
was “verified to be within the Alienable or
Disposable land per Land Classification Map No.
3013 established under Project No. 20-A and
approved as such under FAO 4-1656 on March
15, 1982.” On 3 December 2002, the RTC
approved the application for registration.
The Republic interposed an appeal to the Court of
Appeals, arguing that Malabanan had failed to
prove that the property belonged to the alienable
and disposable land of the public domain, and
that the RTC had erred in finding that he had
been in possession of the property in the manner
and for the length of time required by law for
confirmation of imperfect title. On 23 February
2007, the Court of Appeals reversed the RTC
ruling and dismissed the appliocation of
Malabanan.
ISSUES:
1. In order that an alienable and disposable land
of the public domain may be registered under
Section 14(1) of Presidential Decree No. 1529,
otherwise known as the Property Registration
Decree, should the land be classified as alienable
and disposable as of June 12, 1945 or is it
sufficient that such classification occur at any time
prior to the filing of the applicant for registration
provided that it is established that the applicant
has been in open, continuous, exclusive and
notorious possession of the land under a bona
fide claim of ownership since June 12, 1945 or
earlier?
2. For purposes of Section 14(2) of the Property
Registration Decree may a parcel of land
classified as alienable and disposable be deemed
private land and therefore susceptible to
acquisition by prescription in accordance with the
Civil Code?
3. May a parcel of land established as agricultural
in character either because of its use or because
its slope is below that of forest lands be
registrable under Section 14(2) of the Property
Registration Decree in relation to the provisions of
the Civil Code on acquisitive prescription?
4. Are petitioners entitled to the registration of the
subject land in their names under Section 14(1) or
Section 14(2) of the Property Registration Decree
or both?
HELD:
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The Pertition is denied.
(1) In connection with Section 14(1) of the
Property Registration Decree, Section 48(b) of the
Public Land Act recognizes and confirms that
“those who by themselves or through their
predecessors in interest have been in open,
continuous, exclusive, and notorious possession
and occupation of alienable and disposable lands
of the public domain, under a bona fide claim of
acquisition of ownership, since June 12, 1945”
have acquired ownership of, and registrable title
to, such lands based on the length and quality of
their possession.
(a) Since Section 48(b) merely requires
possession since 12 June 1945 and does not
require that the lands should have been alienable
and disposable during the entire period of
possession, the possessor is entitled to secure
judicial confirmation of his title thereto as soon as
it is declared alienable and disposable, subject to
the timeframe imposed by Section 47 of the
Public Land Act.
(b) The right to register granted under Section
48(b) of the Public Land Act is further confirmed
by Section 14(1) of the Property Registration
Decree.
(2) In complying with Section 14(2) of the
Property Registration Decree, consider that under
the Civil Code, prescription is recognized as a
mode of acquiring ownership of patrimonial
property. However, public domain lands become
only patrimonial property not only with a
declaration that these are alienable or disposable.
There must also be an express government
manifestation that the property is already
patrimonial or no longer retained for public service
or the development of national wealth, under
Article 422 of the Civil Code. And only when the
property has become patrimonial can the
prescriptive period for the acquisition of property
of the public dominion begin to run.
(a) Patrimonial property is private property of the
government. The person acquires ownership of
patrimonial property by prescription under the
Civil Code is entitled to secure registration thereof
under Section 14(2) of the Property Registration
Decree.
(b) There are two kinds of prescription by which
patrimonial property may be acquired, one
ordinary and other extraordinary. Under ordinary
acquisitive prescription, a person acquires
ownership of a patrimonial property through
possession for at least ten (10) years, in good
faith and with just title. Under extraordinary
acquisitive prescription, a person’s uninterrupted
adverse possession of patrimonial property for at
least thirty (30) years, regardless of good faith or
just title, ripens into ownership.
It is clear that the evidence of petitioners is
insufficient to establish that Malabanan has
acquired ownership over the subject property
under Section 48(b) of the Public Land Act. There
is no substantive evidence to establish that
Malabanan or petitioners as his predecessors-in-
interest have been in possession of the property
since 12 June 1945 or earlier. The earliest that
petitioners can date back their possession,
according to their own evidence—the Tax
Declarations they presented in particular—is to
the year 1948. Thus, they cannot avail
themselves of registration under Section 14(1) of
the Property Registration Decree.
Neither can petitioners properly invoke Section
14(2) as basis for registration. While the subject
property was declared as alienable or disposable
in 1982, there is no competent evidence that is no
longer intended for public use service or for the
development of the national evidence,
conformably with Article 422 of the Civil Code.
The classification of the subject property as
alienable and disposable land of the public
domain does not change its status as property of
the public dominion under Article 420(2) of the
Civil Code. Thus, it is insusceptible to acquisition
by prescription.
Secretary of DENR vs Yap
GR No. 167707; Oct 8, 2008
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FACTS:
This petition is for a review on certiorari of the
decision of the Court of Appeals (CA) affirming
that of the Regional Trial Court (RTC) in Kalibo
Aklan, which granted the petition for declaratory
relief filed by respondents-claimants Mayor Jose
Yap et al, and ordered the survey of Boracay for
titling purposes.
On Nov. 10, 1978, President Marcos issued
Proclamation No. 1801 declaring Boracay Island
as a tourist zone and marine reserve. Claiming
that Proc. No. 1801 precluded them from filing an
application for a judicial confirmation of imperfect
title or survey of land for titling purposes,
respondents-claimants filed a petition for
declaratory relief with the RTC in Kalibo, Aklan.
The Republic, through the Office of the Solicitor
General (OSG) opposed the petition countering
that Boracay Island was an unclassified land of
the public domain. It formed part of the mass of
lands classified as “public forest,” which was not
available for disposition pursuant to section 3(a)
of PD No. 705 or the Revised Forestry Code.
ISSUE:
Whether unclassified lands of the public domain
are automatically deemed agricultural land,
therefore making these lands alienable.
HELD:
No. To prove that the land subject of an
application for registration is alienable, the
applicant must establish the existence of a
positive act of the government such as a
presidential proclamation or an executive order,
an administrative action, investigative reports of
the Bureau of Lands investigators, and a
legislative act or statute.
A positive act declaring land as alienable and
disposable is required. In keeping with the
presumption of state ownership, the Court has
time and again emphasized that there must be a
positive act of the government, such as an official
proclamation, declassifying inalienable public land
into disposable land for agricultural or other
purposes.
The Regalian Doctrine dictates that all lands of
the public domain belong to the State, that the
State is the source of any asserted right to
ownership of land and charged with the
conservation of such patrimony.
All lands not otherwise appearing to be clearly
within private ownership are presumed to belong
to the State. Thus, all lands that have not been
acquired from the government, either by purchase
or by grant, belong to the State as part of the
inalienable public domain.
ROXAS & CO., INC. vs. CA
G.R. No. 127876 December 17, 1999
FACTS:
• 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.
• Before the law's effectivity, on May 6, 1988,
[Roxas & Co.] filed with respondent DAR a • c. Property determined to be exempted from
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.
• Nevertheless, on August 6, 1992, [Roxas &
Co.], through its President, Eduardo J. Roxas,
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.
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
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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;
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.
Hacienda Luisita Inc v PARC
GR 171101 July 5 2011, Nov 2011
FACTS
On July 5, 2011, the Supreme Court en banc
voted unanimously (11-0) to DISMISS/DENY the
petition filed by HLI and AFFIRM with
MODIFICATIONS the resolutions of the PARC
revoking HLI’s Stock Distribution Plan (SDP) and
placing the subject lands in Hacienda Luisita
under compulsory coverage of the
Comprehensive Agrarian Reform Program
(CARP) of the government.
The Court however did not order outright land
distribution. Voting 6-5, the Court noted that there
are operative facts that occurred in the interim
and which the Court cannot validly ignore. Thus,
the Court declared that the revocation of the SDP
must, by application of the operative fact principle,
give way to the right of the original 6,296 qualified
farmworkers-beneficiaries (FWBs) to choose
whether they want to remain as HLI stockholders
or [choose actual land distribution]. It thus ordered
the Department of Agrarian Reform (DAR)
to “immediately schedule meetings with the said
6,296 FWBs and explain to them the effects,
consequences and legal or practical implications
of their choice, after which the FWBs will be
asked to manifest, in secret voting, their choices
in the ballot, signing their signatures or placing
their thumbmarks, as the case may be, over their
printed names.”
The parties thereafter filed their respective
motions for reconsideration of the Court decision.
ISSUES
(1) Is the operative fact doctrine available in this
case?
(2) Is Sec. 31 of RA 6657 unconstitutional?
(3) Can’t the Court order that DAR’s compulsory
acquisition of Hacienda Lusita cover the full 6,443
hectares allegedly covered by RA 6657 and
p r e v i o u s l y h e l d b y Ta r l a c D e v e l o p m e n t
Corporation (Tadeco), and not just the 4,915.75
hectares covered by HLI’s SDP?
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(4) Is the date of the “taking” (for purposes of
determining the just compensation payable to
HLI) November 21, 1989, when PARC approved
HLI’s SDP?
(5) Has the 10-year period prohibition on the
transfer of awarded lands under RA 6657 lapsed
on May 10, 1999 (since Hacienda Luisita were
placed under CARP coverage through the SDOA
scheme on May 11, 1989), and thus the qualified
FWBs should now be allowed to sell their land
interests in Hacienda Luisita to third parties,
whether they have fully paid for the lands or not?
(6) THE CRUCIAL ISSUE: Should the ruling in
the July 5, 2011 Decision that the qualified FWBs
be given an option to remain as stockholders of
HLI be reconsidered?
RULING
[The Court PARTIALLY GRANTED the
motions for reconsideration of respondents PARC,
et al. with respect to the option granted to the
original farmworkers-beneficiaries (FWBs) of
Hacienda Luisita to remain with petitioner
HLI, which option the Court
thereby RECALLED and SET ASIDE.
It reconsidered its earlier decision that the
qualified FWBs should be given an option to
remain as stockholders of HLI,
and UNANIMOUSLY directed immediate land
distribution to the qualified FWBs.]
1. YES, the operative fact doctrine is applicable
in this case.
[The Court maintained its stance that the
operative fact doctrine is applicable in this case
since, contrary to the suggestion of the minority,
the doctrine is not limited only to invalid or
unconstitutional laws but also applies to decisions
made by the President or the administrative
agencies that have the force and effect of
laws. Prior to the nullification or recall of said
decisions, they may have produced acts and
consequences that must be respected. It is on
this score that the operative fact doctrine should
be applied to acts and consequences that
resulted from the implementation of the PARC
Resolution approving the SDP of HLI. The
majority stressed that the application of the
operative fact doctrine by the Court in its July 5,
2011 decision was in fact favorable to the FWBs
because not only were they allowed to retain the
benefits and homelots they received under the
stock distribution scheme, they were also given
the option to choose for themselves whether they
want to remain as stockholders of HLI or not.]
2. NO, Sec. 31 of RA 6657 NOT
unconstitutional.
[The Court maintained that the Court is NOT
compelled to rule on the constitutionality of Sec.
31 of RA 6657, reiterating that it was not raised
at the earliest opportunity and that the
resolution thereof is not the lis mota of the case.
Moreover, the issue has been rendered moot and
academic since SDO is no longer one of the
modes of acquisition under RA 9700. The majority
clarified that in its July 5, 2011 decision, it made
no ruling in favor of the constitutionality of Sec. 31
of RA 6657, but found nonetheless that there was
no apparent grave violation of the Constitution
that may justify the resolution of the issue of
constitutionality.]
3. NO, the Court CANNOT order that DAR’s
compulsory acquisition of Hacienda Lusita cover
the full 6,443 hectares and not just the 4,915.75
hectares covered by HLI’s SDP.
[Since what is put in issue before the Court is the
propriety of the revocation of the SDP, which only
involves 4,915.75 has. of agricultural land and not
6,443 has., then the Court is constrained to rule
only as regards the 4,915.75 has. of agricultural
land.Nonetheless, this should not prevent the
DAR, under its mandate under the agrarian
reform law, from subsequently subjecting to
agrarian reform other agricultural lands originally
held by Tadeco that were allegedly not transferred
to HLI but were supposedly covered by RA 6657.
However since the area to be awarded to each
FWB in the July 5, 2011 Decision appears too
restrictive – considering that there are roads,
irrigation canals, and other portions of the land
that are considered commonly-owned by
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farmworkers, and these may necessarily result in
the decrease of the area size that may be
awarded per FWB – the Court reconsiders its
Decision and resolves to give the DAR leeway in
adjusting the area that may be awarded per FWB
in case the number of actual qualified FWBs
decreases. In order to ensure the proper
distribution of the agricultural lands of Hacienda
Luisita per qualified FWB, and considering that
matters involving strictly the administrative
implementation and enforcement of agrarian
reform laws are within the jurisdiction of the
DAR, it is the latter which shall determine the area
with which each qualified FWB will be awarded.
On the other hand, the majority likewise reiterated
its holding that the 500-hectare portion of
Hacienda Luisita that have been validly converted
to industrial use and have been acquired by
intervenors Rizal Commercial Banking
Corporation (RCBC) and Luisita Industrial Park
Corporation (LIPCO), as well as the separate
80.51-hectare SCTEX lot acquired by the
government, should be excluded from the
coverage of the assailed PARC resolution. The
Court however ordered that the unused balance
of the proceeds of the sale of the 500-hectare
converted land and of the 80.51-hectare land
used for the SCTEX be distributed to the FWBs.]
4. YES, the date of “taking” is November 21,
1989, when PARC approved HLI’s SDP.
[For the purpose of determining just
compensation, the date of “taking” is November
21, 1989 (the date when PARC approved HLI’s
SDP) since this is the time that the FWBs were
considered to own and possess the agricultural
lands in Hacienda Luisita. To be precise, these
lands became subject of the agrarian reform
coverage through the stock distribution scheme
only upon the approval of the SDP, that is, on
November 21, 1989. Such approval is akin to a
notice of coverage ordinarily issued under
compulsory acquisition. On the contention of the
minority (Justice Sereno) that the date of the
notice of coverage [after PARC’s revocation of the
SDP], that is, January 2, 2006, is determinative of
the just compensation that HLI is entitled to
receive, the Court majority noted that none of the
cases cited to justify this position involved the
stock distribution scheme. Thus, said cases do
not squarely apply to the instant case. The
foregoing notwithstanding, it bears stressing that
the DAR's land valuation is only preliminary and is
not, by any means, final and conclusive upon the
landowner. The landowner can file an original
action with the RTC acting as a special agrarian
court to determine just compensation. The court
has the right to review with finality the
determination in the exercise of what is admittedly
a judicial function.]
5. NO, the 10-year period prohibition on the
transfer of awarded lands under RA 6657 has
NOT lapsed on May 10, 1999; thus, the qualified
FWBs should NOT yet be allowed to sell their
land interests in Hacienda Luisita to third parties.
[Under RA 6657 and DAO 1, the awarded lands
may only be transferred or conveyed after 10
years from the issuance and registration of the
emancipation patent (EP) or certificate of land
ownership award (CLOA). Considering that the
EPs or CLOAs have not yet been issued to the
qualified FWBs in the instant case, the 10-year
prohibitive period has not even started.
Significantly, the reckoning point is the issuance
of the EP or CLOA, and not the placing of the
agricultural lands under CARP coverage.
Moreover, should the FWBs be immediately
allowed the option to sell or convey their interest
in the subject lands, then all efforts at agrarian
reform would be rendered nugatory, since, at the
end of the day, these lands will just be transferred
to persons not entitled to land distribution under
CARP.]
6. YES, the ruling in the July 5, 2011 Decision
that the qualified FWBs be given an option to
remain as stockholders of HLI should be
reconsidered.
[The Court reconsidered its earlier decision that
the qualified FWBs should be given an option to
remain as stockholders of HLI, inasmuch as these
qualified FWBs will never gain control [over the
subject lands] given the present proportion of
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shareholdings in HLI. The Court noted that the
share of the FWBs in the HLI capital stock is [just]
33.296%. Thus, even if all the holders of this
33.296% unanimously vote to remain as HLI
stockholders, which is unlikely, control will never
be in the hands of the FWBs. Control means the
majority of [sic] 50% plus at least one share of the
common shares and other voting
shares. Applying the formula to the HLI
stockholdings, the number of shares that will
constitute the majority is 295,112,101 shares
(590,554,220 total HLI capital shares divided by 2
plus one [1] HLI share). The 118,391,976.85
shares subject to the SDP approved by PARC
substantially fall short of the 295,112,101 shares
needed by the FWBs to acquire control over HLI.
Alita vs. CA
G.R. No. 78517 Feb 27, 1989
Facts:
• Private respondents' predecessors-in-interest
acquired the subject parcel of lands through
homestead patent under the provisions of
Commonwealth Act No. 141. Private
respondents herein are desirous of personally
cultivating these lands, but petitioners refuse to
vacate, relying on the provisions of P.D. 27 and
P.D. 316.
• On June 18, 1981, private respondents
instituted a complaint for the declaration of P.D.
27 and all other Decrees, Letters of Instructions
and General Orders 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 is not
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 CARP
Ruling
• Petitioners is correct in saying that P.D. 27
decreeing the emancipation of tenants from the
bondage of the soil and transferring to them
ownership of the land they till is a sweeping
social legislation, a remedial measure
promulgated pursuant to the social justice
precepts of the Constitution.
• However, such contention cannot be invoked to
defeat the very purpose of the enactment of the
Public Land Act or Commonwealth Act No. 141.
• The Philippine Constitution likewise respects
the superiority of the homesteaders' rights over
the rights of the tenants guaranteed by the
Agrarian Reform statute. Provided, that the
original homestead grantees or their direct
compulsory heirs who still own the original
homestead at the time of the approval of this
Act shall retain the same areas as long as they
continue to cultivate said homestead.
Natalia Realty v. DAR,
GR No. 103302, August 12, 1993
Facts:
• Natalia (Natalia Realty, Inc.) 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.
• Natalia thereafter became Antipolo Hills
Subdivision. On June 15 1988, R.A. 6657 went
to effect. Respondent issued a Notice of
Coverage on the undeveloped portions of
Antipolo Hills Subdivision.
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• 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 No. 1637 for the
townsite reservation.
• DAR then contended that the permits granted
were not valid and binding since they did not
comply with the implementing Standards, Rules
and Regulations of P.D. 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 are
covered by R.A. 6657.
Ruling:
• No, Sec. 4 of R.A. 6657 provides that CARP
shall cover, regardless of tenurial arrangement
and commodity produced, all public and private
agricultural lands.
• Agricultural land is referred to as land devoted
to agricultural activity and not classified as
mineral, forestry, residential, commercial or
industrial land.
• CARP does not include commercial, industrial
and residential lands." The land subject of the
controversy has been set aside for the Lungsod
Silangan Reservation by Proclamation No. 1637
prior to the effectivity of RA 6657 and in effect
converted these lands into residential use.
Since the Natalia lands were converted prior to
15 June 1988, DAR is bound by such
conversion, and thus it was an error to include
these within the coverage of CARP.
• 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
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
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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 consficatory and violative
of the due process of aw.
DAR v Sutton
GR 162070 Oct 19, 2005
FACTS:
• Respondents herein inherited a land which has
been devoted exclusively to cow and calf
breeding.
• Pursuant to the then existing agrarian
reform program of the government, respondents
made a voluntary offer to sell (VOS) their
landholdings to petitioner DAR to avail of certain
incentives under the law. 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. Thereafter, in an en banc decision in the
case of Luz Farms v. Secretary of DAR 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.
• Thus, 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.
• However, DAR issued A.O. No. 9, series of
1993 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.
• The DAR Secretary issued an Order partially
granting the application of respondents for
exemption from the coverage of CARL but
applying the retention limits outlined in the DAR
A.O. No. 9. Respondents moved for
reconsideration. They contend that their entire
landholding should be exempted as it is devoted
exclusively to cattle-raising and appealing that
the DAR A.O. No. 9 be declared
unconstitutional.

ISSUE:

Whether or not DAR Administrative Order No. 09,

Series of 1993 which prescribes a
maximum retention for owners of lands devoted to
livestock raising is constitutional?

HELD:

• 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 is invalid as it
contravenes the Constitution. 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. 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 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

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