EN BANC
They contend that their entire landholding
 
 
DEPARTMENT OF AGRARIAN G.R. No. 162070
REFORM, represented by SECRETARY
JOSE MARI B. PONCE (OIC), Present:
Petitioner,
versus
DELIA T. SUTTON, ELLA T.
SUTTON-SOLIMAN and Promulgated:
HARRY T. SUTTON,
Respondents. October 19, 2005
 
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.
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.
Republic of the Philippines
Supreme Court
Manila
 
SECOND DIVISION
 
MILESTONE FARMS, INC.,
Petitioner,
- versus
OFFICE OF THE PRESIDENT,
Respondent.
G.R. No. 182332
February 23, 2011
x-----------------------------------------------------------------------------x
DECISION
NACHURA, J.:
 
Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of
Civil Procedure, seeking the reversal of the Court of Appeals (CA) Amended Decision[2] dated October
4, 2006 and its Resolution[3] dated March 27, 2008.
 
The Facts
 
 
Petitioner Milestone Farms, Inc. (petitioner) was incorporated with the Securities and
Exchange Commission on January 8, 1960.[4] Among its pertinent secondary purposes are: (1) to
engage in the raising of cattle, pigs, and other livestock; to acquire lands by purchase or lease, which
may be needed for this purpose; and to sell and otherwise dispose of said cattle, pigs, and other
livestock and their produce when advisable and beneficial to the corporation; (2) to breed, raise, and
sell poultry; to purchase or acquire and sell, or otherwise dispose of the supplies, stocks, equipment,
accessories, appurtenances, products, and by-products of said business; and (3) to import cattle, pigs,
and other livestock, and animal food necessary for the raising of said cattle, pigs, and other livestock
as may be authorized by law.[5]
On June 10, 1988, a new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law (CARL), took effect, which included the raising of
livestock, poultry, and swine in its coverage. However, on December 4, 1990, this Court, sitting en
banc, ruled in Luz Farms v. Secretary of the Department of Agrarian Reform[6] that agricultural lands
devoted to livestock, poultry, and/or swine raising are excluded from the Comprehensive Agrarian
Reform Program (CARP).
 
Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422-hectare property,
covered by Transfer Certificate of Title Nos. (T-410434) M-15750, (T-486101) M-7307, (T-486102) M-
7308, (T-274129) M-15751, (T-486103) M-7309, (T-486104) M-7310, (T-332694) M-15755, (T-
486105) M-7311, (T-486106) M-7312, M-8791, (T-486107) M-7313, (T-486108) M-7314, M-8796, (T-
486109) M-7315, (T-486110) M-9508, and M-6013, and located in Pinugay, Baras, Rizal, from the
coverage of the CARL, pursuant to the aforementioned ruling of this Court in Luz Farms.
Meanwhile, on December 27, 1993, the Department of Agrarian Reform (DAR) issued
Administrative Order No. 9, Series of 1993 (DAR A.O. No. 9), setting forth rules and regulations to
govern the exclusion of agricultural lands used for livestock, poultry, and swine raising from CARP
coverage. Thus, on January 10, 1994, petitioner re-documented its application pursuant to DAR A.O.
No. 9.[7]
Acting on the said application, the DARs Land Use Conversion and Exemption Committee (LUCEC) of
Region IV conducted an ocular inspection on petitioners property and arrived at the following findings:
[T]he actual land utilization for livestock, swine and poultry is 258.8422
hectares; the area which served as infrastructure is 42.0000 hectares; ten
(10) hectares are planted to corn and the remaining five (5) hectares are
devoted to fish culture; that the livestock population are 371 heads of cow,
20 heads of horses, 5,678 heads of swine and 788 heads of cocks; that the
area being applied for exclusion is far below the required or ideal area
 which is 563 hectares for the total livestock population; that the
approximate area not directly used for livestock purposes with an area of
15 hectares, more or less, is likewise far below the allowable 10%
variance; and, though not directly used for livestock purposes, the ten
(10) hectares planted to sweet corn and the five (5) hectares devoted to
fishpond could be considered supportive to livestock production.
 
 
The LUCEC, thus, recommended the exemption of petitioners 316.0422-hectare property
from the coverage of CARP. Adopting the LUCECs findings and recommendation, DAR Regional
Director Percival Dalugdug (Director Dalugdug) issued an Order dated June 27, 1994, exempting
petitioners 316.0422-hectare property from CARP.[8]
The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. (Pinugay Farmers),
represented by Timiano Balajadia, Sr. (Balajadia), moved for the reconsideration of the said Order,
but the same was denied by Director Dalugdug in his Order dated November 24, 1994.[9]
Subsequently, the Pinugay Farmers filed a letter-appeal with the DAR Secretary.
 
Correlatively, on June 4, 1994, petitioner filed a complaint for Forcible Entry against
Balajadia and company before the Municipal Circuit Trial Court (MCTC) of Teresa-Baras, Rizal,
docketed as Civil Case No. 781-T.[10] The MCTC ruled in favor of petitioner, but the decision was later
reversed by the Regional Trial Court, Branch 80, of Tanay, Rizal. Ultimately, the case reached the CA,
which, in its Decision[11] dated October 8, 1999, reinstated the MCTCs ruling, ordering Balajadia and
all defendants therein to vacate portions of the property covered by TCT Nos. M-6013, M-8796, and
M-8791. In its Resolution[12] dated July 31, 2000, the CA held that the defendants therein failed to
timely file a motion for reconsideration, given the fact that their counsel of record received its October
8, 1999 Decision; hence, the same became final and executory.
 
In the meantime, R.A. No. 6657 was amended by R.A. No. 7881,[13] which was
approved on February 20, 1995. Private agricultural lands devoted to livestock, poultry, and swine
raising were excluded from the coverage of the CARL. On October 22, 1996, the fact-finding team
formed by the DAR Undersecretary for Field Operations and Support Services conducted an actual
headcount of the livestock population on the property. The headcount showed that there were 448
heads of cattle and more than 5,000 heads of swine.
 
The DAR Secretarys Ruling
 
On January 21, 1997, then DAR Secretary Ernesto D. Garilao (Secretary Garilao) issued
an Order exempting from CARP only 240.9776 hectares of the 316.0422 hectares previously
exempted by Director Dalugdug, and declaring 75.0646 hectares of the property to be covered by
CARP.[14]
Secretary Garilao opined that, for private agricultural lands to be excluded from CARP,
they must already be devoted to livestock, poultry, and swine raising as of June 15, 1988, when the
CARL took effect. He found that the Certificates of Ownership of Large Cattle submitted by petitioner
showed that only 86 heads of cattle were registered in the name of petitioners president, Misael Vera,
Jr., prior to June 15, 1988; 133 were subsequently bought in 1990, while 204 were registered from
1992 to 1995. Secretary Garilao gave more weight to the certificates rather than to the headcount
because the same explicitly provide for the number of cattle owned by petitioner as of June 15, 1988.
 
Applying the animal-land ratio (1 hectare for grazing for every head of
cattle/carabao/horse) and the infrastructure-animal ratio (1.7815 hectares for 21 heads of
cattle/carabao/horse, and 0.5126 hectare for 21 heads of hogs) under DAR A.O. No. 9, Secretary
Garilao exempted 240.9776 hectares of the property, as follows:
1. 86 hectares for the 86 heads of cattle existing as of 15
June 1988;
 
2. 8 hectares for infrastructure following the ratio of 1.7815
hectares for every 21 heads of cattle;
 
3.      8 hectares for the 8 horses;
4.      0.3809 square meters of infrastructure for the 8
horses; [and]
 
5.      138.5967 hectares for the 5,678 heads of swine.[15]
 
 
Petitioner filed a Motion for Reconsideration,[16] submitting therewith copies of
Certificates of Transfer of Large Cattle and additional Certificates of Ownership of Large Cattle issued
to petitioner prior to June 15, 1988, as additional proof that it had met the required animal-land ratio.
Petitioner also submitted a copy of a Disbursement Voucher dated December 17, 1986, showing the
purchase of 100 heads of cattle by the Bureau of Animal Industry from petitioner, as further proof that
it had been actively operating a livestock farm even before June 15, 1988. However, in his Order
dated April 15, 1997, Secretary Garilao denied petitioners Motion for Reconsideration.[17]
 
Aggrieved, petitioner filed its Memorandum on Appeal[18] before the Office of the
President (OP).
The OPs Ruling
 
On February 4, 2000, the OP rendered a decision[19] reinstating Director Dalugdugs
Order dated June 27, 1994 and declared the entire 316.0422-hectare property exempt from the
coverage of CARP.
 
However, on separate motions for reconsideration of the aforesaid decision filed by
farmer-groups Samahang Anak-Pawis ng Lagundi (SAPLAG) and Pinugay Farmers, and the Bureau of
Agrarian Legal Assistance of DAR, the OP issued a resolution[20] dated September 16, 2002, setting
aside its previous decision. The dispositive portion of the OP resolution reads:
 
 
WHEREFORE, the Decision subject of the instant separate
motions for reconsideration is hereby SET ASIDE and a new one entered
REINSTATING the Order dated 21 January 1997 of then DAR Secretary
Ernesto D. Garilao, as reiterated in another Order of 15 April 1997, without
prejudice to the outcome of the continuing review and verification
proceedings that DAR, thru the appropriate Municipal Agrarian Reform
Officer, may undertake pursuant to Rule III (D) of DAR Administrative
Order No. 09, series of 1993.
 
SO ORDERED.[21]
 
The OP held that, when it comes to proof of ownership, the reference is the Certificate of
Ownership of Large Cattle. Certificates of cattle ownership, which are readily available being issued by
the appropriate government office ought to match the number of heads of cattle counted as existing
during the actual headcount. The presence of large cattle on the land, without sufficient proof of
ownership thereof, only proves such presence.
Taking note of Secretary Garilaos observations, the OP also held that, before an ocular
investigation is conducted on the property, the landowners are notified in advance; hence, mere
reliance on the physical headcount is dangerous because there is a possibility that the landowners
would increase the number of their cattle for headcount purposes only. The OP observed that there
was a big variance between the actual headcount of 448 heads of cattle and only 86 certificates of
ownership of large cattle.
 
Consequently, petitioner sought recourse from the CA.[22]
 
 
The Proceedings Before the CA and Its Rulings
 
On April 29, 2005, the CA found that, based on the documentary evidence presented,
the property subject of the application for exclusion had more than satisfied the animal-land and
infrastructure-animal ratios under DAR A.O. No. 9. The CA also found that petitioner applied for
exclusion long before the effectivity of DAR A.O. No. 9, thus, negating the claim that petitioner merely
converted the property for livestock, poultry, and swine raising in order to exclude it from CARP
coverage. Petitioner was held to have actually engaged in the said business on the property even
before June 15, 1988. The CA disposed of the case in this wise:
WHEREFORE, the instant petition is hereby GRANTED. The
assailed Resolution of the Office of the President dated September 16,
2002 is hereby SET ASIDE, and its Decision dated February 4, 2000
declaring the entire 316.0422 hectares exempt from the coverage of the
 Comprehensive Agrarian Reform Program is hereby REINSTATED without
prejudice to the outcome of the continuing review and verification
proceedings which the Department of Agrarian Reform, through the proper
Municipal Agrarian Reform Officer, may undertake pursuant to Policy
Statement (D) of DAR Administrative Order No. 9, Series of 1993.
 
SO ORDERED.[23]
 
 
Meanwhile, six months earlier, or on November 4, 2004, without the knowledge of the
CA as the parties did not inform the appellate court then DAR Secretary Rene C. Villa (Secretary Villa)
issued DAR Conversion Order No. CON-0410-0016[24] (Conversion Order), granting petitioners
application to convert portions of the 316.0422-hectare property from agricultural to residential and
golf courses use. The portions converted with a total area of 153.3049 hectares were covered by TCT
Nos. M-15755 (T-332694), M-15751 (T-274129), and M-15750 (T-410434). With this Conversion
Order, the area of the property subject of the controversy was effectively reduced to 162.7373
hectares.
On the CAs decision of April 29, 2005, Motions for Reconsideration were filed by farmer-
groups, namely: the farmers represented by Miguel Espinas[25] (Espinas group), the Pinugay
Farmers,[26] and the SAPLAG.[27] The farmer-groups all claimed that the CA should have accorded
respect to the factual findings of the OP. Moreover, the farmer-groups unanimously intimated that
petitioner already converted and developed a portion of the property into a leisure-residential-
commercial estate known as the Palo Alto Leisure and Sports Complex (Palo Alto).
 
Subsequently, in a Supplement to the Motion for Reconsideration on Newly Secured
Evidence pursuant to DAR Administrative Order No. 9, Series of 1993[28] (Supplement) dated June
15, 2005, the Espinas group submitted the following as evidence:
 
1) Conversion Order[29] dated November 4, 2004, issued by Secretary Villa, converting
portions of the property from agricultural to residential and golf courses use, with a total area of
153.3049 hectares; thus, the Espinas group prayed that the remaining 162.7373 hectares (subject
property) be covered by the CARP;
 
2) Letter[30] dated June 7, 2005 of both incoming Municipal Agrarian Reform Officer
(MARO) Bismark M. Elma (MARO Elma) and outgoing MARO Cesar C. Celi (MARO Celi) of Baras, Rizal,
addressed to Provincial Agrarian Reform Officer (PARO) II of Rizal, Felixberto Q. Kagahastian, (MARO
Report), informing the latter, among others, that Palo Alto was already under development and the
lots therein were being offered for sale; that there were actual tillers on the subject property; that
there were agricultural improvements thereon, including an irrigation system and road projects funded
by the Government; that there was no existing livestock farm on the subject property; and that the
same was not in the possession and/or control of petitioner; and
3) Certification[31] dated June 8, 2005, issued by both MARO Elma and MARO Celi,
manifesting that the subject property was in the possession and cultivation of actual occupants and
tillers, and that, upon inspection, petitioner maintained no livestock farm thereon.
 
Four months later, the Espinas group and the DAR filed their respective Manifestations.
[32] In its Manifestation dated November 29, 2005, the DAR confirmed that the subject property was
no longer devoted to cattle raising. Hence, in its Resolution[33] dated December 21, 2005, the CA
directed petitioner to file its comment on the Supplement and the aforementioned Manifestations.
Employing the services of a new counsel, petitioner filed a Motion to Admit Rejoinder,[34] and prayed
that the MARO Report be disregarded and expunged from the records for lack of factual and legal
basis.
With the CA now made aware of these developments, particularly Secretary Villas
Conversion Order of November 4, 2004, the appellate court had to acknowledge that the property
subject of the controversy would now be limited to the remaining 162.7373 hectares. In the same
token, the Espinas group prayed that this remaining area be covered by the CARP.[35]
On October 4, 2006, the CA amended its earlier Decision. It held that its April 29, 2005
Decision was theoretically not final because DAR A.O. No. 9 required the MARO to make a continuing
review and verification of the subject property. While the CA was cognizant of our ruling in
Department of Agrarian Reform v. Sutton,[36] wherein we declared DAR A.O. No. 9 as
unconstitutional, it still resolved to lift the exemption of the subject property from the CARP, not on
the basis of DAR A.O. No. 9, but on the strength of evidence such as the MARO Report and
Certification, and the Katunayan[37] issued by the Punong Barangay, Alfredo Ruba (Chairman Ruba),
of Pinugay, Baras, Rizal, showing that the subject property was no longer operated as a livestock
farm. Moreover, the CA held that the lease agreements,[38] which petitioner submitted to prove that
it was compelled to lease a ranch as temporary shelter for its cattle, only reinforced the DARs finding
that there was indeed no existing livestock farm on the subject property. While petitioner claimed that
it was merely forced to do so to prevent further slaughtering of its cattle allegedly committed by the
occupants, the CA found the claim unsubstantiated. Furthermore, the CA opined that petitioner should
have asserted its rights when the irrigation and road projects were introduced by the Government
within its property. Finally, the CA accorded the findings of MARO Elma and MARO Celi the
presumption of regularity in the performance of official functions in the absence of evidence proving
misconduct and/or dishonesty when they inspected the subject property and rendered their report.
Thus, the CA disposed:
WHEREFORE, this Courts Decision dated April 29, 2005 is
hereby amended in that the exemption of the subject landholding from the
coverage of the Comprehensive Agrarian Reform Program is hereby lifted,
and the 162.7373 hectare-agricultural portion thereof is hereby declared
covered by the Comprehensive Agrarian Reform Program.
 
SO ORDERED.[39]
 
 
Unperturbed, petitioner filed a Motion for Reconsideration.[40] On January 8, 2007,
MARO Elma, in compliance with the Memorandum of DAR Regional Director Dominador B. Andres,
tendered another Report[41] reiterating that, upon inspection of the subject property, together with
petitioners counsel-turned witness, Atty. Grace Eloisa J. Que (Atty. Que), PARO Danilo M. Obarse,
Chairman Ruba, and several occupants thereof, he, among others, found no livestock farm within the
subject property. About 43 heads of cattle were shown, but MARO Elma observed that the same were
inside an area adjacent to Palo Alto. Subsequently, upon Atty. Ques request for reinvestigation,
designated personnel of the DAR Provincial and Regional Offices (Investigating Team) conducted
another ocular inspection on the subject property on February 20, 2007. The Investigating Team, in its
Report[42] dated February 21, 2007, found that, per testimony of petitioners caretaker, Rogelio
Ludivices (Roger),[43] petitioner has 43 heads of cattle taken care of by the following individuals: i)
Josefino Custodio (Josefino) 18 heads; ii) Andy Amahit 15 heads; and iii) Bert Pangan 2 heads; that
these individuals pastured the herd of cattle outside the subject property, while Roger took care of 8
heads of cattle inside the Palo Alto area; that 21 heads of cattle owned by petitioner were seen in the
area adjacent to Palo Alto; that Josefino confirmed to the Investigating Team that he takes care of 18
heads of cattle owned by petitioner; that the said Investigating Team saw 9 heads of cattle in the Palo
Alto area, 2 of which bore MFI marks; and that the 9 heads of cattle appear to have matched the
Certificates of Ownership of Large Cattle submitted by petitioner.
 
Because of the contentious factual issues and the conflicting averments of the parties,
the CA set the case for hearing and reception of evidence on April 24, 2007.[44] Thereafter, as
narrated by the CA, the following events transpired:
 
On May 17, 2007, [petitioner] presented the Judicial
Affidavits of its witnesses, namely, [petitioners] counsel, [Atty. Que], and
the alleged caretaker of [petitioners] farm, [Roger], who were both cross-
examined by counsel for farmers-movants and SAPLAG. [Petitioner] and
SAPLAG then marked their documentary exhibits.
 
On May 24, 2007, [petitioners] security guard and third witness, Rodolfo G.
Febrada, submitted his Judicial Affidavit and was cross-examined by
counsel for fa[r]mers-movants and SAPLAG. Farmers-movants also marked
their documentary exhibits.
Thereafter, the parties submitted their respective Formal Offers of
Evidence. Farmers-movants and SAPLAG filed their objections to
[petitioners] Formal Offer of Evidence. Later, [petitioner] and farmers-
movants filed their respective Memoranda.
In December 2007, this Court issued a Resolution on the parties offer of
evidence and considered [petitioners] Motion for Reconsideration submitted
for resolution.[45]
 
 
Finally, petitioners motion for reconsideration was denied by the CA in its Resolution[46]
dated March 27, 2008. The CA discarded petitioners reliance on Sutton. It ratiocinated that the MARO
Reports and the DARs Manifestation could not be disregarded simply because DAR A.O. No. 9 was
declared unconstitutional. The Sutton ruling was premised on the fact that the Sutton property
continued to operate as a livestock farm. The CA also reasoned that, in Sutton, this Court did not
remove from the DAR the power to implement the CARP, pursuant to the latters authority to oversee
the implementation of agrarian reform laws under Section 50[47] of the CARL. Moreover, the CA
found:
 
Petitioner-appellant claimed that they had 43 heads of cattle
which are being cared for and pastured by 4 individuals. To prove its
ownership of the said cattle, petitioner-appellant offered in evidence 43
Certificates of Ownership of Large Cattle. Significantly, however, the said
Certificates were all dated and issued on November 24, 2006, nearly 2
months after this Court rendered its Amended Decision lifting the
exemption of the 162-hectare portion of the subject landholding. The
acquisition of such cattle after the lifting of the exemption clearly reveals
that petitioner-appellant was no longer operating a livestock farm, and
suggests an effort to create a semblance of livestock-raising for the
purpose of its Motion for Reconsideration.[48]
 
 
On petitioners assertion that between MARO Elmas Report dated January 8, 2007 and
the Investigating Teams Report, the latter should be given credence, the CA held that there were no
material inconsistencies between the two reports because both showed that the 43 heads of cattle
were found outside the subject property.
 
Hence, this Petition assigning the following errors:
 
I.
 
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD
THAT LANDS DEVOTED TO LIVESTOCK FARMING WITHIN THE MEANING OF
LUZ FARMS AND SUTTON, AND WHICH ARE THEREBY EXEMPT FROM CARL
COVERAGE, ARE NEVERTHELESS SUBJECT TO DARS CONTINUING
VERIFICATION AS TO USE, AND, ON THE BASIS OF SUCH VERIFICATION,
MAY BE ORDERED REVERTED TO AGRICULTURAL CLASSIFICATION AND
COMPULSORY ACQUISITION[;]
 
II.
 
GRANTING THAT THE EXEMPT LANDS AFORESAID MAY BE SO REVERTED
TO AGRICULTURAL CLASSIFICATION, STILL THE PROCEEDINGS FOR SUCH
PURPOSE BELONGS TO THE EXCLUSIVE ORIGINAL JURISDICTION OF THE
DAR, BEFORE WHICH THE CONTENDING PARTIES MAY VENTILATE
FACTUAL ISSUES, AND AVAIL THEMSELVES OF USUAL REVIEW
PROCESSES, AND NOT TO THE COURT OF APPEALS EXERCISING
APPELLATE JURISDICTION OVER ISSUES COMPLETELY UNRELATED TO
REVERSION [; AND]
 
III.
 
IN ANY CASE, THE COURT OF APPEALS GRAVELY ERRED AND COMMITTED
GRAVE ABUSE OF DISCRETION WHEN IT HELD THAT THE PROPERTY IN
DISPUTE IS NO LONGER BEING USED FOR LIVESTOCK FARMING.[49]
 
 
Petitioner asseverates that lands devoted to livestock farming as of June 15, 1988 are
classified as industrial lands, hence, outside the ambit of the CARP; that Luz Farms, Sutton, and R.A.
No. 7881 clearly excluded such lands on constitutional grounds; that petitioners lands were actually
devoted to livestock even before the enactment of the CARL; that livestock farms are exempt from the
CARL, not by reason of any act of the DAR, but because of their nature as industrial lands; that
petitioners property was admittedly devoted to livestock farming as of June 1988 and the only issue
before was whether or not petitioners pieces of evidence comply with the ratios provided under DAR
A.O. No. 9; and that DAR A.O. No. 9 having been declared as unconstitutional, DAR had no more legal
basis to conduct a continuing review and verification proceedings over livestock farms. Petitioner
argues that, in cases where reversion of properties to agricultural use is proper, only the DAR has the
exclusive original jurisdiction to hear and decide the same; hence, the CA, in this case, committed
serious errors when it ordered the reversion of the property and when it considered pieces of evidence
not existing as of June 15, 1988, despite its lack of jurisdiction; that the CA should have remanded the
case to the DAR due to conflicting factual claims; that the CA cannot ventilate allegations of fact that
were introduced for the first time on appeal as a supplement to a motion for reconsideration of its first
decision, use the same to deviate from the issues pending review, and, on the basis thereof, declare
exempt lands reverted to agricultural use and compulsorily covered by the CARP; that the newly
discovered [pieces of] evidence were not introduced in the proceedings before the DAR, hence, it was
erroneous for the CA to consider them; and that piecemeal presentation of evidence is not in accord
with orderly justice. Finally, petitioner submits that, in any case, the CA gravely erred and committed
grave abuse of discretion when it held that the subject property was no longer used for livestock
farming as shown by the Report of the Investigating Team. Petitioner relies on the 1997 LUCEC and
DAR findings that the subject property was devoted to livestock farming, and on the 1999 CA Decision
which held that the occupants of the property were squatters, bereft of any authority to stay and
possess the property.[50]
 
On one hand, the farmer-groups, represented by the Espinas group, contend that they
have been planting rice and fruit-bearing trees on the subject property, and helped the National
Irrigation Administration in setting up an irrigation system therein in 1997, with a produce of 1,500 to
1,600 sacks of palay each year; that petitioner came to court with unclean hands because, while it
sought the exemption and exclusion of the entire property, unknown to the CA, petitioner
surreptitiously filed for conversion of the property now known as Palo Alto, which was actually granted
by the DAR Secretary; that petitioners bad faith is more apparent since, despite the conversion of the
153.3049-hectare portion of the property, it still seeks to exempt the entire property in this case; and
that the fact that petitioner applied for conversion is an admission that indeed the property is
agricultural. The farmer-groups also contend that petitioners reliance on Luz Farms and Sutton is
unavailing because in these cases there was actually no cessation of the business of raising cattle;
that what is being exempted is the activity of raising cattle and not the property itself; that
exemptions due to cattle raising are not permanent; that the declaration of DAR A.O. No. 9 as
unconstitutional does not at all diminish the mandated duty of the DAR, as the lead agency of the
Government, to implement the CARL; that the DAR, vested with the power to identify lands subject to
CARP, logically also has the power to identify lands which are excluded and/or exempted therefrom;
that to disregard DARs authority on the matter would open the floodgates to abuse and fraud by
unscrupulous landowners; that the factual finding of the CA that the subject property is no longer a
livestock farm may not be disturbed on appeal, as enunciated by this Court; that DAR conducted a
review and monitoring of the subject property by virtue of its powers under the CARL; and that the CA
has sufficient discretion to admit evidence in order that it could arrive at a fair, just, and equitable
ruling in this case.[51]
 
On the other hand, respondent OP, through the Office of the Solicitor General (OSG),
claims that the CA correctly held that the subject property is not exempt from the coverage of the
CARP, as substantial pieces of evidence show that the said property is not exclusively devoted to
livestock, swine, and/or poultry raising; that the issues presented by petitioner are factual in nature
and not proper in this case; that under Rule 43 of the 1997 Rules of Civil Procedure, questions of fact
may be raised by the parties and resolved by the CA; that due to the divergence in the factual findings
of the DAR and the OP, the CA was duty bound to review and ascertain which of the said findings are
duly supported by substantial evidence; that the subject property was subject to continuing review
and verification proceedings due to the then prevailing DAR A.O. No. 9; that there is no question that
the power to determine if a property is subject to CARP coverage lies with the DAR Secretary; that
pursuant to such power, the MARO rendered the assailed reports and certification, and the DAR itself
manifested before the CA that the subject property is no longer devoted to livestock farming; and
that, while it is true that this Courts ruling in Luz Farms declared that agricultural lands devoted to
livestock, poultry, and/or swine raising are excluded from the CARP, the said ruling is not without any
qualification.[52]
 
In its Reply[53] to the farmer-groups and to the OSGs comment, petitioner counters that
the farmer-groups have no legal basis to their claims as they admitted that they entered the subject
property without the consent of petitioner; that the rice plots actually found in the subject property,
which were subsequently taken over by squatters, were, in fact, planted by petitioner in compliance
with the directive of then President Ferdinand Marcos for the employer to provide rice to its
employees; that when a land is declared exempt from the CARP on the ground that it is not
agricultural as of the time the CARL took effect, the use and disposition of that land is entirely and
forever beyond DARs jurisdiction; and that, inasmuch as the subject property was not agricultural
from the very beginning, DAR has no power to regulate the same. Petitioner also asserts that the CA
cannot uncharacteristically assume the role of trier of facts and resolve factual questions not
previously adjudicated by the lower tribunals; that MARO Elma rendered the assailed MARO reports
with bias against petitioner, and the same were contradicted by the Investigating Teams Report, which
confirmed that the subject property is still devoted to livestock farming; and that there has been no
change in petitioners business interest as an entity engaged in livestock farming since its inception in
1960, though there was admittedly a decline in the scale of its operations due to the illegal acts of the
squatter-occupants.
 
Our Ruling
  
  Petitioners admission that, since 2001, it leased another ranch for its own livestock is
The Petition is bereft of merit. fatal to its cause.[64] While petitioner advances a defense that it leased this ranch because the
  occupants of the subject property harmed its cattle, like the CA, we find it surprising that not even a
  single police and/or barangay report was filed by petitioner to amplify its indignation over these
Let it be stressed that when the CA provided in its first Decision that continuing review alleged illegal acts. Moreover, we accord respect to the CAs keen observation that the assailed MARO
and verification may be conducted by the DAR pursuant to DAR A.O. No. 9, the latter was not yet reports and the Investigating Teams Report do not actually contradict one another, finding that the 43
declared unconstitutional by this Court. The first CA Decision was promulgated on April 29, 2005, cows, while owned by petitioner, were actually pastured outside the subject property.
while this Court struck down as unconstitutional DAR A.O. No. 9, by way of Sutton, on October 19, `
2005. Likewise, let it be emphasized that the Espinas group filed the Supplement and submitted the Finally, it is established that issues of Exclusion and/or Exemption are characterized as
assailed MARO reports and certification on June 15, 2005, which proved to be adverse to petitioners Agrarian Law Implementation (ALI) cases which are well within the DAR Secretarys competence and
case. Thus, it could not be said that the CA erred or gravely abused its discretion in respecting the jurisdiction.[65] Section 3, Rule II of the 2003 Department of Agrarian Reform Adjudication Board
mandate of DAR A.O. No. 9, which was then subsisting and in full force and effect. Rules of Procedure provides:
  Section 3. Agrarian Law Implementation Cases.
While it is true that an issue which was neither alleged in the complaint nor raised during The Adjudicator or the Board shall have no jurisdiction over
the trial cannot be raised for the first time on appeal as it would be offensive to the basic rules of fair matters involving the administrative implementation of RA No. 6657,
play, justice, and due process,[54] the same is not without exception,[55] such as this case. The CA, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of
under Section 3,[56] Rule 43 of the Rules of Civil Procedure, can, in the interest of justice, entertain 1988 and other agrarian laws as enunciated by pertinent rules and
and resolve factual issues. After all, technical and procedural rules are intended to help secure, and administrative orders, which shall be under the exclusive prerogative of
not suppress, substantial justice. A deviation from a rigid enforcement of the rules may thus be and cognizable by the Office of the Secretary of the DAR in accordance with
allowed to attain the prime objective of dispensing justice, for dispensation of justice is the core his issuances, to wit:
reason for the existence of courts.[57] Moreover, petitioner cannot validly claim that it was deprived  
of due process because the CA afforded it all the opportunity to be heard.[58] The CA even directed xxxx
petitioner to file its comment on the Supplement, and to prove and establish its claim that the subject 3.8 Exclusion from CARP coverage of agricultural land used for livestock,
property was excluded from the coverage of the CARP. Petitioner actively participated in the swine, and poultry raising.
proceedings before the CA by submitting pleadings and pieces of documentary evidence, such as the  
Investigating Teams Report and judicial affidavits. The CA also went further by setting the case for  
hearing. In all these proceedings, all the parties rights to due process were amply protected and Thus, we cannot, without going against the law, arbitrarily strip the DAR Secretary of his legal
recognized. mandate to exercise jurisdiction and authority over all ALI cases. To succumb to petitioners contention
  that when a land is declared exempt from the CARP on the ground that it is not agricultural as of the
With the procedural issue disposed of, we find that petitioners arguments fail to persuade. Its time the CARL took effect, the use and disposition of that land is entirely and forever beyond DARs
invocation of Sutton is unavailing. In Sutton, we held: jurisdiction is dangerous, suggestive of self-regulation. Precisely, it is the DAR Secretary who is vested
  with such jurisdiction and authority to exempt and/or exclude a property from CARP coverage based
In the case at bar, we find that the impugned A.O. is invalid as it on the factual circumstances of each case and in accordance with law and applicable jurisprudence. In
contravenes the Constitution. The A.O. sought to regulate livestock farms addition, albeit parenthetically, Secretary Villa had already granted the conversion into residential and
by including them in the coverage of agrarian reform and prescribing a golf courses use of nearly one-half of the entire area originally claimed as exempt from CARP coverage
maximum retention limit for their ownership. However, the deliberations of because it was allegedly devoted to livestock production.
the 1987 Constitutional Commission show a clear intent to exclude, inter  
alia, all lands exclusively devoted to livestock, swine and poultry- In sum, we find no reversible error in the assailed Amended Decision and Resolution of the CA which
raising. The Court clarified in the Luz Farms case that livestock, swine and would warrant the modification, much less the reversal, thereof.
poultry-raising are industrial activities and do not fall within the definition  
of agriculture or agricultural activity. The raising of livestock, swine and WHEREFORE, the Petition is DENIED and the Court of Appeals Amended Decision dated
poultry is different from crop or tree farming. It is an industrial, not an October 4, 2006 and Resolution dated March 27, 2008 are AFFIRMED. No costs.
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, SO ORDERED.
mixers, conveyors, exhausts and generators, extensive warehousing
facilities for feeds and other supplies, anti-pollution equipment like bio-gas
and digester plants augmented by lagoons and concrete ponds, deepwells,
elevated water tanks, pumphouses, sprayers, and other technological
appurtenances.
Clearly, petitioner DAR has no power to regulate livestock
farms which have been exempted by the Constitution from the coverage of
agrarian reform. It has exceeded its power in issuing the assailed A.O.[59]
 
Indeed, as pointed out by the CA, the instant case does not rest on facts parallel to those of Sutton
because, in Sutton, the subject property remained a livestock farm. We even highlighted therein the
fact that there has been no change of business interest in the case of respondents.[60] Similarly, in
Department of Agrarian Reform v. Uy,[61] we excluded a parcel of land from CARP coverage due to
the factual findings of the MARO, which were confirmed by the DAR, that the property was entirely
devoted to livestock farming. However, in A.Z. Arnaiz Realty, Inc., represented by Carmen Z. Arnaiz
v. Office of the President; Department of Agrarian Reform; Regional Director, DAR Region V, Legaspi
City; Provincial Agrarian Reform Officer, DAR Provincial Office, Masbate, Masbate; and Municipal
Agrarian Reform Officer, DAR Municipal Office, Masbate, Masbate,[62] we denied a similar petition for
exemption and/or exclusion, by according respect to the CAs factual findings and its reliance on the
findings of the DAR and the OP that

the subject parcels of land were not directly, actually, and exclusively used for pasture.[63]
Republic of the PhilippinesSUPREME COURTManila
 FIRST DIVISION
G.R. No. 158228             March 23, 2004
DEPARTMENT OF AGRARIAN REFORM, as represented by its Secretary, ROBERTO M.
PAGDANGANAN, petitioner, vs.DEPARTMENT OF EDUCATION, CULTURE AND SPORTS (DECS),
respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari seeks to set aside the decision1 of the Court of Appeals dated
October 29, 2002 in CA-G.R. SP No. 64378, which reversed the August 30, 2000 decision of the
Secretary of Agrarian Reform, as well as the Resolution dated May 7, 2003, which denied petitioner’s
motion for reconsideration.
In controversy are Lot No. 2509 and Lot No. 817-D consisting of an aggregate area of 189.2462
hectares located at Hacienda Fe, Escalante, Negros Occidental and Brgy. Gen. Luna, Sagay, Negros
Occidental, respectively. On October 21, 1921, these lands were donated by the late Esteban
Jalandoni to respondent DECS (formerly Bureau of Education). 2 Consequently, titles thereto were
transferred in the name of respondent DECS under Transfer Certificate of Title No. 167175.3
On July 15, 1985, respondent DECS leased the lands to Anglo Agricultural Corporation for 10
agricultural crop years, commencing from crop year 1984-1985 to crop year 1993-1994. The contract
of lease was subsequently renewed for another 10 agricultural crop years, commencing from crop year
1995-1996 to crop year 2004-2005.4
On June 10, 1993, Eugenio Alpar and several others, claiming to be permanent and regular farm
workers of the subject lands, filed a petition for Compulsory Agrarian Reform Program (CARP)
coverage with the Municipal Agrarian Reform Office (MARO) of Escalante.5
After investigation, MARO Jacinto R. Piñosa, sent a "Notice of Coverage" to respondent DECS, stating
that the subject lands are now covered by CARP and inviting its representatives for a conference with
the farmer beneficiaries. 6 Then, MARO Piñosa submitted his report to OIC-PARO Stephen M. Leonidas,
who recommended to the DAR Regional Director the approval of the coverage of the landholdings.
On August 7, 1998, DAR Regional Director Dominador B. Andres approved the recommendation, the
dispositive portion of which reads:
WHEREFORE, all the foregoing premises considered, the petition is granted. Order is hereby issued:
1. Placing under CARP coverage Lot 2509 with an area of 111.4791 hectares situated at Had. Fe,
Escalante, Negros Occidental and Lot 817-D with an area of 77.7671 hectares situated at Brgy. Gen.
Luna, Sagay, Negros Occidental;
2. Affirming the notice of coverage sent by the DAR Provincial Office, Negros Occidental dated
November 23, 1994;
3. Directing the Provincial Agrarian Reform Office of Negros Occidental and the Municipal Agrarian
Reform Officers of Sagay and Escalante to facilitate the acquisition of the subject landholdings and the
distribution of the same qualified beneficiaries.
SO ORDERED.7
Respondent DECS appealed the case to the Secretary of Agrarian Reform which affirmed the Order of
the Regional Director. 8
Aggrieved, respondent DECS filed a petition for certiorari with the Court of Appeals, which set aside
the decision of the Secretary of Agrarian Reform.9
Hence, the instant petition for review.
The pivotal issue to be resolved in this case is whether or not the subject properties are exempt from
the coverage of Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law
of 1998 (CARL).
The general policy under CARL is to cover as much lands suitable for agriculture as possible. 10 Section
4 of R.A. No. 6657 sets out the coverage of CARP. It states that the program shall:
"… cover, regardless of tenurial arrangement and commodity produced, all public and private
agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other
lands of the public domain suitable for agriculture."
More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of
this Act until Congress, taking into account, ecological, developmental and equity considerations, shall
have determined by law, the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits as determined by Congress in the
preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised
or that can be raised thereon.
Section 3(c) thereof defines "agricultural land," as "land devoted to agricultural activity as defined in
this Act and not classified as mineral, forest, residential, commercial or industrial land." The term
"agriculture" or "agricultural activity" is also defined by the same law as follows:
Agriculture, Agricultural Enterprises or Agricultural Activity means the cultivation of the soil, planting
of crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such
farm products, and other farm activities, and practices performed by a farmer in conjunction with such
farming operations done by persons whether natural or juridical.11
The records of the case show that the subject properties were formerly private agricultural lands
owned by the late Esteban Jalandoni, and were donated to respondent DECS. From that time until
they were leased to Anglo Agricultural Corporation, the lands continued to be agricultural primarily
planted to sugarcane, albeit part of the public domain being owned by an agency of the government. 12
Moreover, there is no legislative or presidential act, before and after the enactment of R.A. No. 6657,
classifying the said lands as mineral, forest, residential, commercial or industrial land. Indubitably, the
subject lands fall under the classification of lands of the public domain devoted to or suitable for
agriculture.
Respondent DECS sought exemption from CARP coverage on the ground that all the income derived
from its contract of lease with Anglo Agricultural Corporation were actually, directly and exclusively
used for educational purposes, such as for the repairs and renovations of schools in the nearby
locality.
Petitioner DAR, on the other hand, argued that the lands subject hereof are not exempt from the CARP
coverage because the same are not actually, directly and exclusively used as school sites or
campuses, as they are in fact leased to Anglo Agricultural Corporation. Further, to be exempt from the
coverage, it is the land per se, not the income derived therefrom, that must be actually, directly and
exclusively used for educational purposes.
We agree with the petitioner.
Section 10 of R.A. No. 6657 enumerates the types of lands which are exempted from the coverage of
CARP as well as the purposes of their exemption, viz:
xxxxxxxxx (c) location and area of the land they work;

c) Lands actually, directly and exclusively used and found to be necessary for national defense, school (d) crops planted; and
sites and campuses, including experimental farm stations operated by public or private schools for
educational purposes, … , shall be exempt from the coverage of this Act.13
(e) their share in the harvest or amount of rental paid or wages received.

xxxxxxxxx
Clearly, a reading of the paragraph shows that, in order to be exempt from the coverage: 1) the land
must be "actually, directly, and exclusively used and found to be necessary;" and 2) the purpose is
"for school sites and campuses, including experimental farm stations operated by public or private
schools for educational purposes."
The importance of the phrase "actually, directly, and exclusively used and found to be necessary"
cannot be understated, as what respondent DECS would want us to do by not taking the words in their
literal and technical definitions. The words of the law are clear and unambiguous. Thus, the "plain
meaning rule" or verba legis in statutory construction is applicable in this case. Where the words of a
statute are clear, plain and free from ambiguity, it must be given its literal meaning and applied
without attempted interpretation.14
We are not unaware of our ruling in the case of Central Mindanao University v. Department of
Agrarian Reform Adjudication Board,15 wherein we declared the land subject thereof exempt from
CARP coverage. However, respondent DECS’ reliance thereon is misplaced because the factual
circumstances are different in the case at bar.
A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in the
barangay hall, school or other public buildings in the barangay where it shall be open to inspection by
the public at all reasonable hours.
In the case at bar, the BARC certified that herein farmers were potential CARP beneficiaries of the
subject properties.18 Further, on November 23, 1994, the Secretary of Agrarian Reform through the
Municipal Agrarian Reform Office (MARO) issued a Notice of Coverage placing the subject properties
under CARP. Since the identification and selection of CARP beneficiaries are matters involving strictly
the administrative implementation of the CARP, 19 it behooves the courts to exercise great caution in
substituting its own determination of the issue, unless there is grave abuse of discretion committed by
the administrative agency. In this case, there was none.
The Comprehensive Agrarian Reform Program (CARP) is the bastion of social justice of poor landless
farmers, the mechanism designed to redistribute to the underprivileged the natural right to toil the
earth, and to liberate them from oppressive tenancy. To those who seek its benefit, it is the means
towards a viable livelihood and, ultimately, a decent life. The objective of the State is no less certain:
"landless farmers and farmworkers will receive the highest consideration to promote social justice and
to move the nation toward sound rural development and industrialization." 20

Firstly, in the CMU case, the land involved was not alienable and disposable land of the public domain WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of Appeals
because it was reserved by the late President Carlos P. Garcia under Proclamation No. 476 for the use dated October 29, 2002, in CA-G.R. SP No. 64378 is REVERSED and SET ASIDE. The decision dated
of Mindanao Agricultural College (now CMU).16 In this case, however, the lands fall under the category August 30, 2000 of the Secretary of Agrarian Reform placing the subject lands under CARP coverage,
of alienable and disposable lands of the public domain suitable for agriculture. is REINSTATED.

Secondly, in the CMU case, the land was actually, directly and exclusively used and found to be SO ORDERED.
necessary for school sites and campuses. Although a portion of it was being used by the Philippine
Packing Corporation (now Del Monte Phils., Inc.) under a "Management and Development Agreement",
the undertaking was that the land shall be used by the Philippine Packing Corporation as part of the
CMU research program, with direct participation of faculty and students. Moreover, the land was part
of the land utilization program developed by the CMU for its "Kilusang Sariling Sikap Project" (CMU-
KSSP), a multi-disciplinary applied research extension and productivity program.17 Hence, the
retention of the land was found to be necessary for the present and future educational needs of the
CMU. On the other hand, the lands in this case were not actually and exclusively utilized as school
sites and campuses, as they were leased to Anglo Agricultural Corporation, not for educational
purposes but for the furtherance of its business. Also, as conceded by respondent DECS, it was the
income from the contract of lease and not the subject lands that was directly used for the repairs and
renovations of the schools in the locality.

Anent the issue of whether the farmers are qualified beneficiaries of CARP, we disagree with the Court
of Appeals’ finding that they were not.

At the outset, it should be pointed out that the identification of actual and potential beneficiaries under
CARP is vested in the Secretary of Agrarian Reform pursuant to Section 15, R.A. No. 6657, which
states:

SECTION 15. Registration of Beneficiaries. — The DAR in coordination with the Barangay Agrarian
Reform Committee (BARC) as organized in this Act, shall register all agricultural lessees, tenants and
farmworkers who are qualified to be beneficiaries of the CARP. These potential beneficiaries with the
assistance of the BARC and the DAR shall provide the following data:

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

(b) owners or administrators of the lands they work on and the length of tenurial relationship;
 Republic of the Philippines On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power
SUPREME COURT from the President. This Congress passed Republic Act No. 6657, the Comprehensive Agrarian Reform
Manila Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and took effect on June
EN BANC 15, 1988.
G.R. No. 149548               December 4, 2009
ROXAS & COMPANY, INC., Petitioner, 
vs. Before the law’s effectivity, on May 6, 1988, [Roxas & Co.] filed with respondent DAR a voluntary offer
DAMBA-NFSW and the DEPARTMENT OF AGRARIAN REFORM, * Respondents. to sell [VOS] Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and
x - - - - - - - - - - - - - - - - - - - - - - -x Banilad were later placed under compulsory acquisition by … DAR in accordance with the CARL.
G.R. No. 167505               December 4, 2009
DAMAYAN NG MGA MANGGAGAWANG BUKID SA ASYENDA ROXAS-NATIONAL FEDERATION xxxx
OF SUGAR WORKERS (DAMBA-NFSW) Petitioner, 
vs.
SECRETARY OF THE DEPT. OF AGRARIAN REFORM, ROXAS & Co., INC. AND/OR ATTY. Nevertheless, on August 6, 1992, [Roxas & Co.], through its President, Eduardo J. Roxas, sent a letter
MARIANO AMPIL, Respondents. to the Secretary of …DAR withdrawing its VOS of Hacienda Caylaway. The Sangguniang Bayan of
x - - - - - - - - - - - - - - - - - - - - - - -x Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from
G.R. No. 167540               December 4, 2009 agricultural to non-agricultural. As a result, petitioner informed respondent DAR that it
KATIPUNAN NG MGA MAGBUBUKID SA HACIENDA ROXAS, INC. (KAMAHARI), rep. by its was applying for conversion of Hacienda Caylaway from agricultural to other uses.
President CARLITO CAISIP, and DAMAYAN NG MANGGAGAWANG BUKID SA ASYENDA
ROXAS-NATIONAL FEDERATION OF SUGAR WORKERS (DAMBA-NFSW), represnted by
x x x x2 (emphasis and underscoring supplied)
LAURO MARTIN, Petitioners, 
vs.
SECRETARY OF THE DEPT. OF AGRARIAN REFORM, ROXAS & Co., INC., Respondents. The petitions in G.R. Nos. 167540 and 167543 nub on the interpretation of Presidential Proclamation
x - - - - - - - - - - - - - - - - - - - - - - -x (PP) 1520 which was issued on November 28, 1975 by then President Ferdinand Marcos. The PP
G.R. No. 167543               December 4, 2009 reads:
DEPARTMENT OF LAND REFORM, FORMERLY DEPARTMENT OF AGRARIAN REFORM
(DAR), Petitioner, 
vs. DECLARING THE MUNICIPALITIES OF MARAGONDON AND TERNATE IN CAVITE PROVINCE AND THE
ROXAS & CO, INC., Respondent. MUNICIPALITY OF NASUGBU IN BATANGAS AS A TOURIST ZONE, AND FOR OTHER PURPOSES
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 167845               December 4, 2009
WHEREAS, certain areas in the sector comprising the Municipalities of Maragondon and
ROXAS & CO., INC., Petitioner, 
Ternate in Cavite Province and Nasugbu in Batangas have potential tourism value after being
vs.
developed into resort complexes for the foreign and domestic market; and
DAMBA-NFSW, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 169163               December 4, 2009 WHEREAS, it is necessary to conduct the necessary studies and to segregate specific geographic
DAMBA-NFSW REPRESENTED BY LAURO V. MARTIN, Petitioner,  areas for concentrated efforts of both the government and private sectors in developing their tourism
vs. potential;
ROXAS & CO., INC., Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 179650               December 4, 2009 NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
DAMBA-NFSW, Petitioner,  vested in me by the Constitution, do hereby declare the area comprising the Municipalities of
vs. Maragondon and Ternate in Cavite Province and Nasugbu in Batangas Province as a tourist zone
ROXAS & CO., INC., Respondent. under the administration and control of the Philippine Tourism Authority (PTA) pursuant to
Section 5 (D) of P.D. 564.

DECISION
CARPIO MORALES, J.
The main subject of the seven consolidated petitions is the application of petitioner Roxas & Co., Inc.
(Roxas & Co.) for conversion from agricultural to non-agricultural use of its three haciendas located in
Nasugbu, Batangas containing a total area of almost 3,000 hectares. The facts are not new, the Court
having earlier resolved intimately-related issues dealing with these haciendas. Thus, in the 1999 case
of Roxas & Co., Inc. v. Court of Appeals,1 the Court presented the facts as follows:
. . . 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 area and is registered under Transfer Certificate of Title
(TCT) No. 985. This land is covered by Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and 0354.
Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924 and covered by Tax
Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571 hectares in area and is
registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665.
xxxx
The PTA shall identify well-defined geographic areas within the zone with potential tourism
value, wherein optimum use of natural assets and attractions, as well as existing facilities and
concentration of efforts and limited resources of both government and private sector may be affected
and realized in order to generate foreign exchange as well as other tourist receipts.
Any duly established military reservation existing within the zone shall be excluded from this
proclamation.
All proclamation, decrees or executive orders inconsistent herewith are hereby revoked or modified
accordingly. (emphasis and underscoring supplied).
The incidents which spawned the filing of the petitions in G.R. Nos. 149548, 167505, 167845, 169163
and 179650 are stated in the dissenting opinion of Justice Minita Chico-Nazario, the original draft of
which was made the basis of the Court’s deliberations.
Essentially, Roxas & Co. filed its application for conversion of its three haciendas from argricultural 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 was issued on October 15,
1993 covering 513.983 hectares, the subject of G.R. No. 167505.
The application for conversion of Roxas & Co. was the subject of the above-stated Roxas & Co., Inc. v.
Court of Appeals which the Court remanded to the DAR for the observance of proper acquisition
proceedings. As reflected in the above-quoted statement of facts in said case, during the pendency
before the DAR of its application for conversion following its remand to the DAR or on May 16, 2000,
Roxas & Co. filed with the DAR an application for exemption from the coverage of the Comprehensive
Agrarian Reform Program (CARP) of 1988 on the basis 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.
It bears mentioning at this juncture that on April 18, 1982, the Sangguniang Bayan of Nasugbu
enacted Municipal Zoning Ordinance No. 4 (Nasugbu MZO No. 4) which was approved on May 4, 1983
by the Human Settlements Regulation Commission, now the Housing and Land Use Regulatory Board
(HLURB).
The records show that Sangguniang Bayan and Association of Barangay Captains of Nasugbu filed
before this Court petitions for intervention which were, however, denied by Resolution of June 5, 2006
for lack of standing.4
After the seven present petitions were consolidated and referred to the Court en banc,5 oral
arguments were conducted on July 7, 2009.
The core issues are:
1. Whether PP 1520 reclassified in 1975 all lands in the Maragondon-Ternate-Nasugbu
tourism zone to non-agricultural use to exempt Roxas & Co.’s three haciendas in Nasugbu
from CARP coverage;
2. Whether Nasugbu MSO No. 4, Series of 1982 exempted certain lots in Hacienda Palico
from CARP coverage; and
3. Whether the partial and complete cancellations by the DAR of CLOA No. 6654 subject of
G.R. No. 167505 is valid.
The Court shall discuss the issues in seriatim.
I. PP 1520 DID NOT  AUTOMATICALLY CONVERT THE AGRICULTURAL LANDS IN THE THREE
MUNICIPALITIES INCLUDING NASUGBU TO NON-AGRICULTURAL LANDS.
Roxas & Co. contends that PP 1520 declared the three municipalities as each constituting a tourism
zone, reclassified all lands therein to tourism and, therefore, converted their use to non-agricultural
purposes.
To determine the chief intent of PP 1520, reference to the "whereas clauses" is in order. By and large,
a reference to the congressional deliberation records would provide guidance in dissecting the intent of
legislation. But since PP 1520 emanated from the legislative powers of then President Marcos during
martial rule, reference to the whereas clauses cannot be dispensed with.6
The perambulatory clauses of PP 1520 identified only "certain areas in the sector comprising the
[three Municipalities that] have potential tourism value" and mandated the conduct of "necessary
studies" and the segregation of "specific geographic areas" to achieve its purpose. Which is why the PP
directed the Philippine Tourism Authority (PTA) to identify what those potential tourism areas are. If
all the lands in those tourism zones were to be wholly converted to non-agricultural use, there would
have been no need for the PP to direct the PTA to identify what those "specific geographic areas" are.
The Court had in fact passed upon a similar matter before. Thus in DAR v. Franco,   it pronounced:
7
Thus, the DAR Regional Office VII, in coordination with the Philippine Tourism Authority, has to
determine precisely which areas are for tourism development and excluded from the Operation
Land Transfer and the Comprehensive Agrarian Reform Program. And suffice it to state here that the
Court has repeatedly ruled that lands already classified as non-agricultural before the enactment of RA
6657 on 15 June 1988 do not need any conversion clearance.8 (emphasis and underscoring supplied).
While the above pronouncement in Franco is an obiter, it should not be ignored in the resolution of the
present petitions since it reflects a more rational and just interpretation of PP 1520. There is no
prohibition in embracing the rationale of an obiter dictum in settling controversies, or in considering
related proclamations establishing tourism zones.
In the above-cited case of Roxas & Co. v. CA,9 the Court made it clear that the "power to determine
whether Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt from the
coverage of the [Comprehensive Agrarian Reform Law] lies with the [Department of Agrarian Reform],
not with this Court."10 The DAR, an administrative body of special competence, denied, by Order of
October 22, 2001, the application for CARP exemption of Roxas & Co., it finding that PP 1520 did not
automatically reclassify all the lands in the affected municipalities from their original uses. It appears
that the PTA had not yet, at that time, identified the "specific geographic areas" for tourism
development and had no pending tourism development projects in the areas. Further, report from the
Center for Land Use Policy Planning and Implementation (CLUPPI) indicated that the areas were
planted with sugar cane and other crops.11
Relatedly, the DAR, by Memorandum Circular No. 7, Series of 2004,12 came up with clarificatory
guidelines and therein decreed that
A. x x x x.
B. Proclamations declaring general areas such as whole provinces, municipalities, barangays, islands
or peninsulas as tourist zones that merely:
(1) recognize certain still unidentified areas within the covered provinces, municipalities,
barangays, islands, or peninsulas to be with potential tourism value and charge the
Philippine Tourism Authority with the task to identify/delineate specific geographic areas
within the zone with potential tourism value and to coordinate said areas’ development; or
(2) recognize the potential value of identified spots located within the general area declared
as tourist zone (i.e. x x x x) and direct the Philippine Tourism Authority to coordinate said
areas’ development;
could not be regarded as effecting an automatic reclassification of the entirety of the land area
declared as tourist zone. This is so because "reclassification of lands" denotes their allocation into
some specific use and "providing for the manner of their utilization and disposition (Sec. 20, Local
Government Code) or the "act of specifying how agricultural lands shall be utilized for non-agricultural
uses such as residential, industrial, or commercial, as embodied in the land use plan." (Joint HLURB,
DAR, DA, DILG Memo. Circular Prescribing Guidelines for MC 54, S. 1995, Sec.2)
A proclamation that merely recognizes the potential tourism value of certain areas within the general
area declared as tourist zone clearly does not allocate, reserve, or intend the entirety of the land area
of the zone for non-agricultural purposes. Neither does said proclamation direct that otherwise
CARPable lands within the zone shall already be used for purposes other than agricultural.
Moreover, to view these kinds of proclamation as a reclassification for non-agricultural purposes of
entire provinces, municipalities, barangays, islands, or peninsulas would be unreasonable as it
amounts to an automatic and sweeping exemption from CARP in the name of tourism development.
The same would also undermine the land use reclassification powers vested in local government units
in conjunction with pertinent agencies of government.
C. There being no reclassification, it is clear that said proclamations/issuances, assuming [these] took
effect before June 15, 1988, could not supply a basis for exemption of the entirety of the lands
embraced therein from CARP coverage x x x x.
D. x x x x. (underscoring in the original; emphasis and italics supplied)
The DAR’s reading into these general proclamations of tourism zones deserves utmost consideration,
more especially in the present petitions which involve vast tracts of agricultural land. To reiterate, PP
1520 merely recognized the "potential tourism value" of certain areas within the general area declared
as tourism zones. It did not reclassify the areas to non-agricultural use.
Apart from PP 1520, there are similarly worded proclamations declaring the whole of Ilocos Norte and
Bataan Provinces, Camiguin, Puerto Prinsesa, Siquijor, Panglao Island, parts of Cebu City and
Municipalities of Argao and Dalaguete in Cebu Province as tourism zones.13
Indubitably, these proclamations, particularly those pertaining to the Provinces of Ilocos Norte and
Bataan, did not intend to reclassify all agricultural lands into non-agricultural lands in one fell swoop.
The Court takes notice of how the agrarian reform program was—and still is—implemented in these
provinces since there are lands that do not have any tourism potential and are more appropriate for
agricultural utilization.
Relatedly, a reference to the Special Economic Zone Act of 199514 provides a parallel orientation on
the issue. Under said Act, several towns and cities encompassing the whole Philippines were readily
identified as economic zones.15 To uphold Roxas & Co.’s reading of PP 1520 would see a total
reclassification of practically all the agricultural lands in the country to non-agricultural use.
Propitiously, the legislature had the foresight to include a bailout provision in Section 31 of said Act for
land conversion.16 The same cannot be said of PP 1520, despite the existence of Presidential Decree
(PD) No. 27 or the Tenant Emancipation Decree,17 which is the precursor of the CARP.
Interestingly, then President Marcos also issued on September 26, 1972 PD No. 2 which declared the
entire Philippines as land reform area.18 Such declaration did not intend to reclassify all lands in the
entire country to agricultural lands. President Marcos, about a month later or on October 21, 1972,
issued PD 27 which decreed that all private agricultural lands primarily devoted to rice and corn were
deemed awarded to their tenant-farmers.
Given these martial law-era decrees and considering the socio-political backdrop at the time PP 1520
was issued in 1975, it is inconceivable that PP 1520, as well as other similarly worded proclamations
which are completely silent on the aspect of reclassification of the lands in those tourism zones, would
nullify the gains already then achieved by PD 27.
Even so, Roxas & Co. turns to Natalia Realty v. DAR and NHA v. Allarde to support its position. These
cases are not even closely similar to the petitions in G.R. Nos. 167540 and 167543. The only time that
these cases may find application to said petitions is when the PTA actually identifies "well-defined
geographic areas within the zone with potential tourism value."
In remotely tying these two immediately-cited cases that involve specific and defined townsite
reservations for the housing program of the National Housing Authority to the present petitions, Roxas
& Co. cites Letter of Instructions No. 352 issued on December 22, 1975 which states that the survey
and technical description of the tourism zones shall be considered an integral part of PP 1520. There
were, however, at the time no surveys and technical delineations yet of the intended tourism areas.
On hindsight, Natalia and Allarde find application in the petitions in G.R. Nos. 179650 & 167505, which
petitions are anchored on the extenuating effects of Nasugbu MZO No. 4, but not in the petitions in
G.R. Nos. 167540 & 167543 bearing on PP 1520, as will later be discussed.
Of significance also in the present petitions is the issuance on August 3, 2007 of Executive Order No.
64719 by President Arroyo which proclaimed the areas in the Nasugbu Tourism Development Plan as
Special Tourism Zone. Pursuant to said Executive Order, the PTA completed its validation of 21 out of
42 barangays as tourism priority areas, hence, it is only after such completion that these identified
lands may be subjected to reclassification proceedings.
It bears emphasis that a mere reclassification of an agricultural land does not automatically allow a
landowner to change its use since there is still that process of conversion before one is permitted to
use it for other purposes.20
The recent passage of the Tourism Act of 200921 also impacts on the present petitions since Section 32
thereof states that:
Sec. 32. x x x x. - Any other area specifically defined as a tourism area, zone or spot under any
special or general law, decree or presidential issuance shall, as far as practicable, be
organized into a TEZ under the provisions of this Act. x x x x. (italics and emphasis supplied)
Furthermore, it is only under this same Act that it is explicitly declared that lands identified as part of
a tourism zone shall qualify for exemption from CARP coverage.22
The dissenting opinion ignores the supervening issuances mentioned above during the pendency of the
present petitions because they came after the effectivity of the CARP on June 15, 1988. It labors on
the supposition that PP 1520 had already reclassified the lands encompassing the tourism zones; and
that those subsequent issuances, even if applied in the present cases, cannot be applied retroactively.
Relevantly, while it may be argued that a remand to the DAR would be proper in light of the recent
formulation of a tourism development plan, which was validated by the PTA, that would put the cases
within the ambit of PP 1520, the Court sees otherwise. Roxas & Co. can only look to the provisions of
the Tourism Act, and not to PP 1520, for possible exemption.
II. ROXAS & CO.’S APPLICATION IN DAR Administrative Case No. A-9999-142-97 FOR CARP
EXEMPTION IN HACIENDA PALICO SUBJECT OF G.R. NO. 179650 CANNOT  BE GRANTED IN
VIEW OF DISCREPANCIES IN THE LOCATION AND IDENTITY OF THE SUBJECT PARCELS OF
LAND.
Since PP 1520 did not automatically convert Haciendas Caylaway, Banilad and Palico into non-
agricultural estates, can Roxas & Co. invoke in the alternative Nasugbu MZO No. 4, which reclassified
in 1982 the haciendas to non-agricultural use to exclude six parcels of land in Hacienda Palico  from
CARP coverage?
By Roxas & Co.’s contention, the affected six parcels of land which are the subject of DAR
Administrative Case No. A-9999-142-97 and nine parcels of land which are the subject of DAR
Administrative Case No. A-9999-008-98 involved in G.R. No. 167505, all in Hacienda Palico, have
been reclassified to non-agricultural uses via Nasugbu MZO No. 4 which was approved by the
forerunner of HLURB.
Roxas & Co.’s contention fails.
To be sure, the Court had on several occasions decreed that a local government unit has the power to
classify and convert land from agricultural to non-agricultural prior to the effectivity of the
CARL.23 In Agrarian Reform Beneficiaries Association v. Nicolas,24 it reiterated that
. . . the facts obtaining in this case are similar to those in Natalia Realty. Both subject lands form part
of an area designated for non-agricultural purposes. Both were classified as non-agricultural lands
prior to June 15, 1988, the date of effectivity of CARL.
xxxx
In the case under review, the subject parcels of lands were reclassified within an urban zone as per
approved Official Comprehensive Zoning Map of the City of Davao. The reclassification was
embodied in City Ordinance No. 363, Series of 1982. As such, the subject parcels of land are
considered "non-agricultural" and may be utilized for residential, commercial, and
industrial purposes. The reclassification was later approved by the HLURB.25 (emphasis, italics
and underscoring supplied)
The DAR Secretary26 denied the application for exemption of Roxas & Co., however, in this wise:
Initially, CLUPPI-2 based [its] evaluation on the lot nos. as appearing in CLOA No. 6654. However, for
purposes of clarity and to ensure that the area applied for exemption is indeed part of TCT No. T-
60034, CLUPPI-2 sought to clarify with [Roxas & Co.] the origin of TCT No. T-60034. In a letter dated
May 28, 1998, [Roxas & Co.] explains that portions of TCT No. T-985, the mother title, …was
subdivided into 125 lots pursuant to PD 27. A total of 947.8417 was retained by the landowners and
was subsequently registered under TCT No. 49946. [[Roxas & Co.] further explains that TCT No.
49946 was further subdivided into several lots (Lot 125-A to Lot 125-P) with Lot No. 125-N registered
under TCT No. 60034. [A] review of the titles, however, shows that the origin of T-49946 is T-
783 and not T-985. On the other hand, the origin of T-60034 is listed as 59946, and not T-
49946. The discrepancies were attributed by [Roxas & Co.] to typographical errors which
were "acknowledged and initialled" [sic] by the ROD. Per verification…, the discrepancies . .
. cannot be ascertained.27 (emphasis and underscoring supplied)
In denying Roxas & Co.’s motion for reconsideration, the DAR Secretary held:
The landholdings covered by the aforesaid titles do not correspond to the Certification
dated February 11, 1998 of the [HLURB] , the Certification dated September 12, 1996
issued by the Municipal Planning and Development Coordinator, and the Certifications dated
July 31, 1997 and May 27, 1997 issued by the National Irrigation Authority.  The certifications
were issued for Lot Nos. 21, 24, 28, 31, 32 and 34. Thus, it was not even possible to issue exemption
clearance over the lots covered by TCT Nos. 60019 to 60023.
Furthermore, we also note the discrepancies between the certifications issued by the HLURB and the
Municipal Planning Development Coordinator as to the area of the specific lots.28 (emphasis and
underscoring supplied)
In affirming the DAR Secretary’s denial of Roxas & Co.’s application for exemption, the Court of
Appeals, in CA-G.R. SP No. 63146 subject of G.R. No. 179650, observed:
In the instant case, a perusal of the documents before us shows that there is no indication that the
said TCTs refer to the same properties applied for exemption by [Roxas & Co.] It is true that the
certifications …refer, among others, to DAR Lot Nos. 21, 24, 28, 31, 32 and 34…But these
certifications contain nothing to show that these lots are the same as Lots 125-A, 125-B, 125-C, 125-
D and 125-E covered by TCT Nos. 60019, 60020, 60021, 60022 and 60023, respetively. While [Roxas
& Co.] claims that DAR Lot Nos. 21, 24 and 31 correspond to the aforementioned TCTs submitted to
the DAR no evidence was presented to substantiate such allegation.
Moreover, [Roxas & Co.] failed to submit TCT 634 which it claims covers DAR Lot Nos. 28, 32 and 24.
(TSN, April 24, 2001, pp. 43-44)
xxxx
[Roxas & Co.] also claims that subject properties are located at Barangay Cogunan and Lumbangan
and that these properties are part of the zone classified as Industrial under Municipal Ordinance No. 4,
Series of 1982 of the Municipality of Nasugbu, Batangas. ….a scrutiny of the said Ordinance shows
that only Barangays Talangan and Lumbangan of the said municipality were classified as
Industrial Zones…Barangay Cogunan was not included. x x x x. In fact, the TCTs submitted by
[Roxas & Co.] show that the properties covered by said titles are all located at Barrio
Lumbangan.29 (emphasis and underscoring supplied)
Its foregoing findings notwithstanding, the appellate court still allowed Roxas & Co. to adduce
additional evidence to support its application for exemption under Nasugbu MZO No. 4.
Meanwhile, Roxas & Co. appealed the appellate court’s decision in CA-G.R. No. SP No. 63146 affirming
the DAR Secretary’s denial of its application for CARP exemption in Hacienda Palico (now the subject
of G.R. No. 149548).
When Roxas & Co. sought the re-opening of the proceedings in DAR Administrative Case No. A-9999-
142-97 (subject of G.R. No. 179650), and offered additional evidence in support of its application for
CARP exemption, the DAR Secretary, this time, granted its application for the six lots including Lot No.
36 since the additional documents offered by Roxas & Co. mentioned the said lot.
In granting the application, the DAR Secretary30 examined anew the evidence submitted by Roxas &
Co. which consisted mainly of certifications from various local and national government
agencies.31 Petitioner in G.R. Nos. 167505, 167540, 169163 and 179650, Damayan Ng Mga
Manggagawang Bukid Sa Asyenda  Roxas-National Federation of Sugar Workers (DAMBA-NFSW), the
organization of the farmer-beneficiaries, moved to have the grant of the application reconsidered but
the same was denied by the DAR by Order of December 12, 2003, hence, it filed a petition
for certiorari  before the Court of Appeals, docketed as CA-G.R. SP No. 82225, on grounds of forum-
shopping and grave abuse of discretion. The appellate court, by Decision of October 31, 2006, ruled
that DAMBA-NFSW availed of the wrong mode of appeal. At all events, it dismissed its petition as it
upheld the DAR Secretary’s ruling that Roxas & Co. did not commit forum-shopping, hence, the
petition of DAMBA-NGSW in G.R. No. 179650.
While ordinarily findings of facts of quasi-judicial agencies are generally accorded great weight and
even finality by the Court if supported by substantial evidence in recognition of their expertise on the
specific matters under their consideration,32 this legal precept cannot be made to apply in G.R. No.
179650.
Even as the existence and validity of Nasugbu MZO No. 4 had already been established, there remains
in dispute the issue of whether the parcels of land involved in DAR Administrative Case No. A-9999-
142-97 subject of G.R. No. 179650 are actually within the said zoning ordinance.
The Court finds that the DAR Secretary indeed committed grave abuse of discretion when he ignored
the glaring inconsistencies in the certifications submitted early on by Roxas & Co. in support of its
application vis-à-vis the certifications it later submitted when the DAR Secretary reopened DAR
Administrative Case No. A-9999-142-97.
Notably, then DAR Secretary Horacio Morales, on one hand, observed that the "landholdings covered
by the aforesaid titles do not correspond to the Certification dated February 11, 1998 of the [HLURB],
the Certification dated September 12, 1996 issued by the Municipal Planning and Development
Coordinator, and the Certifications dated July 31, 1997 and May 27, 1997 issued by the National
Irrigation Authority." On the other hand, then Secretary Hernani Braganza relied on a different set of
certifications which were issued later or on September 19, 1996.
In this regard, the Court finds in order the observation of DAMBA-NFSW that Roxas & Co. should have
submitted the comprehensive land use plan and pointed therein the exact locations of the properties
to prove that indeed they are within the area of coverage of Nasugbu MZO No. 4.
The petitions in G.R. Nos. 179650 & 149548 must be distinguished from Junio v. Garilao33 wherein the
certifications submitted in support of the application for exemption of the therein subject lot were
mainly considered on the presumption of regularity in their issuance, there being no doubt on the
location and identity of the subject lot.34 In G.R. No. 179650, there exist uncertainties on the location
and identities of the properties being applied for exemption.
G.R. No. 179650 & G.R. No. 149548 must accordingly be denied for lack of merit.
III. ROXAS & CO.’S APPLICATION FOR CARP EXEMPTION IN DAR Administrative Case No. A-
9999-008-98FOR THE NINE PARCELS OF LAND IN HACIENDA PALICO SUBJECT OF G.R. NO.
167505 SHOULD BE GRANTED.
The Court, however, takes a different stance with respect to Roxas & Co.’s application for CARP
exemption in DAR Administrative Case No. A-9999-008-98 over nine parcels of land identified as Lot
Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771
hectares in Hacienda Palico, subject of G.R. No. 167505.
In its application, Roxas & Co. submitted the following documents:
1. Letter-application dated 29 September 1997 signed by Elino SJ. Napigkit, for and on
behalf of Roxas & Company, Inc., seeking exemption from CARP coverage of subject
landholdings;
 2. Secretary’s Certificate dated September 2002 executed by Mariano M. Ampil III,
Corporate Secretary of Roxas & Company, Inc., indicating a Board Resolution authorizing
him to represent the corporation in its application for exemption with the DAR. The same
Board Resolution revoked the authorization previously granted to the Sierra Management &
Resources Corporation;
3. Photocopy of TCT No. 985 and its corresponding Tax Declaration No. 0401;
4. Location and vicinity maps of subject landholdings;
5. Certification dated 10 July 1997 issued by Reynaldo Garcia, Municipal Planning
and Development Coordinator (MPDC) and Zoning Administrator of Nasugbu,
Batangas, stating that the subject parcels of land are within the Urban Core Zone
as specified in Zone A. VII of Municipal Zoning Ordinance No. 4, Series of 1982,
approved by the Human Settlements Regulatory Commission (HSRC), now the Housing and
Land Use Regulatory Board (HLURB), under Resolution No. 123, Series of 1983, dated 4 May
1983;
6. Two (2) Certifications both dated 31 August 1998, issued by Alfredo Tan II,
Director, HLURB, Region IV, stating that the subject parcels of land appear to be
within the Residential cluster Area as specified in Zone VII of Municipal Zoning
Ordinance No. 4, Series of 1982, approved under HSRC Resolution No. 123, Series of
1983, dated 4 May 1983;35
x x x x (emphasis and underscoring supplied)
By Order of November 6, 2002, the DAR Secretary granted the application for exemption but issued
the following conditions:
1. The farmer-occupants within subject parcels of land shall be maintained in their peaceful
possession and cultivation of their respective areas of tillage until a final determination has
been made on the amount of disturbance compensation due and entitlement of such farmer-
occupants thereto by the PARAD of Batangas;
2. No development shall be undertaken within the subject parcels of land until the
appropriate disturbance compensation has been paid to the farmer-occupants who are
determined by the PARAD to be entitled thereto. Proof of payment of disturbance
compensation shall be submitted to this Office within ten (10) days from such payment; and
3. The cancellation of the CLOA issued to the farmer-beneficiaries shall be subject of a
separate proceeding before the PARAD of Batangas.36
DAMBA-NSFW moved for reconsideration but the DAR Secretary denied the same and explained
further why CLOA holders need not be informed of the pending application for exemption in this wise:
As regards the first ground raised by [DAMBA-NSFW], it should be remembered that an application for
CARP-exemption pursuant to DOJ Opinion No. 44, series of 1990, as implemented by DAR
Administrative Order No. 6, series of 1994, is non-adversarial or non-litigious in nature. Hence,
applicant is correct in saying that nowhere in the rules is it required that occupants of a landholding
should be notified of an initiated or pending exemption application.
xxxx
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.
Finally, this Office finds no substantial basis to reverse the assailed Orders since there is substantial
compliance by the applicant with the requirements for the issuance of exemption clearance under DAR
AO 6 (1994).37
On DAMBA-NSFW’s petition for certiorari, the Court of Appeals, noting that the petition was belatedly
filed, sustained, by Decision of December 20, 1994 and Resolution of May 7, 2007,38 the DAR
Secretary’s finding that Roxas & Co. had substantially complied with the prerequisites of DAR AO 6,
Series of 1994. Hence, DAMBA-NFSW’s petition in G.R. No. 167505.
The Court finds no reversible error in the Court of Appeals’ assailed issuances, the orders of the DAR
Secretary which it sustained being amply supported by evidence.
IV. THE CLOAs ISSUED BY THE DAR in ADMINISTRATIVE CASE NO. A-9999-008-98 SUBJECT
OF G.R. No. 179650 TO THE FARMER-BENEFICIARIES INVOLVING THE NINE PARCELS OF LAND IN
HACIENDA PALICO MUST BE CANCELLED.
Turning now to the validity of the issuance of CLOAs in Hacienda Palico vis-à-vis the present
dispositions: It bears recalling that in DAR Administrative Case Nos. A-9999-008-98 and A-9999-142-
97 (G.R. No. 179650), the Court ruled for Roxas & Co.’s grant of exemption in DAR Administrative
Case No. A-9999-008-98 but denied the grant of exemption in DAR Administrative Case No. A-9999-
142-97 for reasons already discussed. It follows that the CLOAs issued to the farmer-beneficiaries in
DAR Administrative Case No. A-9999-008-98 must be cancelled.
But first, the Court digresses. The assertion of DAMBA-NSFW that the petitions for partial and
complete cancellations of the CLOAs subject of DARAB Case Nos. R-401-003-2001 to R-401-005-2001
and No. 401-239-2001 violated the earlier order in Roxas v. Court of Appeals does not lie. Nowhere
did the Court therein pronounce that the CLOAs issued "cannot and should not be cancelled," what
was involved therein being the legality of the acquisition proceedings. The Court merely reiterated that
it is the DAR which has primary jurisdiction to rule on the validity of CLOAs. Thus it held:
. . . [t]he 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 [CLOAs] already issued to the farmer-
beneficiaries. To assume the power is to short-circuit the administrative process, which has yet to run
its regular course. Respondent DAR must be given the chance to correct its procedural lapses in the
acquisition proceedings. x x x x. Anyhow, the farmer beneficiaries hold the property in trust for the
rightful owner of the land.39
On the procedural question raised by Roxas & Co. on the appellate court’s relaxation of the rules by
giving due course to DAMBA-NFSW’s appeal in CA G.R. SP No. 72198, the subject of G.R. No. 167845:
Indeed, the perfection of an appeal within the statutory period is jurisdictional and failure to do so
renders the assailed decision final and executory.40 A relaxation of the rules may, however, for
meritorious reasons, be allowed in the interest of justice.41 The Court finds that in giving due course to
DAMBA-NSFW’s appeal, the appellate court committed no reversible error. Consider its ratiocination:
x x x x. To deny [DAMBA-NSFW]’s appeal with the PARAD will not only affect their right over the
parcel of land subject of this petition with an area of 103.1436 hectares, but also that of the whole
area covered by CLOA No. 6654 since the PARAD rendered a Joint Resolution of the Motion for
Reconsideration filed by the [DAMBA-NSFW] with regard to [Roxas & Co.]’s application for partial and
total cancellation of the CLOA in DARAB Cases No. R-401-003-2001 to R-401-005-2001 and No. 401-
239-2001. There is a pressing need for an extensive discussion of the issues as raised by both parties 6) In G.R. No. 167845, the Court DENIES Roxas & Co.’s petition for review for lack of
as the matter of canceling CLOA No. 6654 is of utmost importance, involving as it does the probable merit and AFFIRMS the September 10, 2004 Decision and April 14, 2005 Resolution of the
displacement of hundreds of farmer-beneficiaries and their families. x x x x (underscoring supplied) Court of Appeals;

Unlike courts of justice, the DARAB, as a quasi-judicial body, is not bound to strictly observe rules of
procedure and evidence. To strictly enforce rules on appeals in this case would render to naught the
Court’s dispositions on the other issues in these consolidated petitions.
In the main, there is no logical recourse except to cancel the CLOAs issued for the nine parcels of land
identified as Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No. 985
covering 45.9771 hectares in Hacienda Palico (or those covered by DAR Administrative Case No. A-
9999-008-98). As for the rest of the CLOAs, they should be respected since Roxas & Co., as shown in
the discussion in G.R. Nos. 167540, 167543 and 167505, failed to prove that the other lots in
Hacienda Palico and the other two haciendas, aside from the above-mentioned nine lots, are CARP-
exempt.
7) In G.R. No. 169163, the Court SETS ASIDE the Decisions of the Provincial Agrarian
Reform Adjudicator in DARAB Case No. 401-239-2001 ordering the cancellation of CLOA No.
6654 and DARAB Cases Nos. R-401-003-2001 to No. R-401-005-2001 granting the partial
cancellation of CLOA No. 6654. The CLOAs issued for Lots No. 21 No. 24, No. 26, No. 31,
No. 32 and No. 34 or those covered by DAR Administrative Case No. A-9999-142-97)
remain; and
8) Roxas & Co. is ORDERED to pay the disturbance compensation of affected farmer-
beneficiaries in the areas covered by the nine parcels of lands in DAR Administrative Case
No. A-9999-008-98 before the CLOAs therein can be cancelled, and is ENJOINED to strictly
follow the mandate of R.A. No. 3844.

Conformably, Republic Act No. 3844 (R.A. No. 3844), as amended,42 mandates that disturbance No pronouncement as to costs.
compensation be given to tenants of parcels of land upon finding that "(t)he landholding is declared by
the department head upon recommendation of the National Planning Commission to be suited for
residential, commercial, industrial or some other urban purposes."43 In addition, DAR AO No. 6, Series SO ORDERED.
of 1994 directs the payment of disturbance compensation before the application for exemption may be
completely granted.

Roxas & Co. is thus mandated to first satisfy the disturbance compensation of affected farmer-
beneficiaries in the areas covered by the nine parcels of lands in DAR AO No. A-9999-008-98 before
the CLOAs covering them can be cancelled. And it is enjoined to strictly follow the instructions of R.A.
No. 3844.

Finally then, and in view of the Court’s dispositions in G.R. Nos. 179650 and 167505, the May 27,
2001 Decision of the Provincial Agrarian Reform Adjudicator (PARAD)44 in DARAB Case No. 401-239-
2001 ordering the total cancellation of CLOA No. 6654, subject of G.R. No. 169163, is SET ASIDE
except with respect to the CLOAs issued for Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2
which are portions of TCT No. 985 covering 45.9771 hectares in Hacienda Palico (or those covered by
DAR Administrative Case No. A-9999-008-98). It goes without saying that the motion for
reconsideration of DAMBA-NFSW is granted to thus vacate the Court’s October 19, 2005 Resolution
dismissing DAMBA-NFSW’s petition for review of the appellate court’s Decision in CA-G.R. SP No.
75952;45

WHEREFORE,

1) In G.R. No. 167540, the Court REVERSES and SETS ASIDE the November 24, 2003

Decision46 and March 18, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 72131
which declared that Presidential Proclamation No. 1520 reclassified the lands in the
municipalities of Nasugbu in Batangas and Maragondon and Ternate in Cavite to non-
agricultural use;

2) The Court accordingly GRANTS the Motion for Reconsideration of the Department of
Agrarian Reform in G.R. No. 167543 and REVERSES and SETS ASIDE its Resolution of June
20, 2005;

3) In G.R. No. 149548, the Court DENIES the petition for review of Roxas & Co. for lack of
merit;

4) In G.R. No. 179650, the Court GRANTS the petition for review of DAMBA-NSFW

and REVERSES and SETS ASIDE the October 31, 2006 Decision and August 16, 2007
Resolution of the Court of Appeals in CA-G.R. SP No. 82225;

5) In G.R. No. 167505, the Court DENIES the petition for review of DAMBA-NSFW

and AFFIRMS the December 20, 2004 Decision and March 7, 2005 Resolution of the Court
of Appeals in CA-G.R. SP No. 82226;

SECOND DIVISION
ROMAN CATHOLIC G.R. No. 139285
ARCHBISHOP OF CACERES,
Petitioner, Present:
QUISUMBING, J., Chairperson,
- versus - CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
SECRETARY OF AGRARIAN
REFORM and DAR REGIONAL Promulgated:
DIRECTOR (Region V),
Respondents. December 21, 2007
x-----------------------------------------------------------------------------------------x
 
DECISION
VELASCO, JR., J.:
 
The Comprehensive Agrarian Reform Law (CARL) has truly noble goals, and these noble
goals should not be stymied by the creation of exemptions or exceptions not contemplated by the law.
 
The Case
 
In this Petition for Review on Certiorari under Rule 45, petitioner Roman Catholic
Archbishop of Caceres (Archbishop) questions the February 4, 1999 Decision[1] of the Court of
Appeals (CA) in CA-G.R. SP No. 48282, which upheld the December 8, 1997 and June 10, 1998 Orders
of the Department of Agrarian Reform (DAR).
 
 
The Facts
Archbishop is the registered owner of several properties in Camarines Sur, with a total area of
268.5668 hectares. Of that land, 249.0236 hectares are planted with rice and corn, while the
remaining 19.5432 hectares are planted with coconut trees.
In 1985, Archbishop filed with the Municipal Agrarian Reform District Office No. 19, Naga City,
Camarines Sur several petitions for exemption of certain properties located in various towns of
Camarines Sur from the coverage of Operation Land Transfer (OLT) under Presidential Decree No.
(PD) 27.[2] Two of these petitions were denied in an Order dated November 6, 1986, issued by the
Regional Director of DAR, Region V, Juanito L. Lorena.[3]
 
Archbishop appealed from the order of the Regional Director, and sought exemption from OLT
coverage of all lands planted with rice and corn which were registered in the name of the Roman
Catholic Archdiocese of Caceres. In his appeal, Archbishop cited the following grounds:
a) That said properties are all covered by conditional donations subject to
the prohibitions of the donors to SELL, EXCHANGE, LEASE,
TRANSFER, ENCUMBER OR MORTGAGE the properties;
b) That they are used for charitable and religious purposes;
c) That the parishes located in depressed areas badly need them for the
furtherance of their mission work, propagation of the faith,
maintenance and support of their chapels, churches and
educational religious institutions like the Holy Rosary Major
and Minor Seminaries for the promotion of the priesthood
vocation;
d) For the preservation of good relationship between church and state thru
non-infringement of the right to exercise religious profession
and worship;
e) For the maintenance of the Cathedral and Peafrancia Shrine, which now
include the Basilica Minore Housing our venerable image of
Our Lady of Peafrancia and the venerable portrait of Divine
Rostro;
f) That the petitioner (church) is amenable to continue the leasehold
system with the present cultivators or tenants.[4]
This appeal was denied by then DAR Secretary Ernesto D. Garilao in an Order dated
December 8, 1997.[5] A subsequent motion for reconsideration was denied in an Order dated June 10,
1998.[6]
The matter was then raised to the CA via Petition for Review on Certiorari. Archbishop
argued that even if the lands in question are registered in his name, he holds the lands in trust for the
benefit of his followers as cestui que trust. Archbishop further argued that the deeds of donation by
which the lands were transferred to him imposed numerous fiduciary obligations, such that he cannot
sell, exchange, lease, transfer, encumber, or mortgage the subject lands. By this reasoning,
Archbishop concluded that he is not the landowner contemplated by PD 27 and Republic Act No. (RA)
6657, the CARL of 1988. He then prayed that the assailed orders of the DAR be reversed, or in the
alternative, that the alleged beneficiaries of the trust be each allowed to exercise rights of retention
over the landholdings.[7]
 
The petition was dismissed by the CA in its February 4, 1999 Decision.[8] Archbishop
filed a motion for reconsideration, but was denied in the June 18, 1999 CA Resolution.[9]
Archbishop now brings the matter before us through this petition.
The Issues
 
Archbishop raises issues he had raised previously, which, he contends, the CA failed to properly
address. He claims that the CA erred in holding that he is only entitled to assert one right of retention
as the subject properties are registered in his name. He further claims that an express trust had been
created wherein he only held naked title to the subject properties on behalf of the beneficiaries. He
argues that it is not the landowner contemplated by the law, but merely a trustee, and as such is
entitled to as many rights of retention on behalf of the beneficiaries of each particular property. He
then raises the question of the applicability of the ruling in The Roman Catholic Apostolic
Administrator of Davao, Inc. v. The Land Registration Commission and the Register of Deeds of Davao
City,[10] which, he cites, ruled that properties held by the Church are held by it as a mere
administrator for the benefit of the members of that particular religion. As Archbishop claims to be
merely an administrator of the subject properties, he argues that these subject properties should have
been exempt from the OLT.
The Courts Ruling
 
The petition has no merit.
Archbishops arguments, while novel, must fail in the face of the law and the dictates of the 1987
Constitution.
 
The laws simply speak of the landowner without qualification as to under what title the land is held or
what rights to the land the landowner may exercise. There is no distinction made whether the
landowner holds naked title only or can exercise all the rights of ownership. Archbishop would have us
read deeper into the law, to create exceptions that are not stated in PD 27 and RA 6657, and to do so
would be to frustrate the revolutionary intent of the law, which is the redistribution of agricultural land
for the benefit of landless farmers and farmworkers.
Archbishop was found to be the registered owner of the lands in question, and does not contest that
fact. For the purposes of the law, this makes him the landowner, without the necessity of going
beyond the registered titles. He cannot demand a deeper examination of the registered titles and
demand further that the intent of the original owners be ascertained and followed. To adopt his
reasoning would create means of sidestepping the law, wherein the mere act of donation places lands
beyond the reach of agrarian reform.
 
There can be no claim of more than one right of retention per landowner. Neither PD 27 nor RA 6657
has a provision for a landowner to exercise more than one right of retention. The law is simple and
clear as to the retention limits per landowner. PD 27 states, In all cases, the landowner may retain an
area of not more than seven (7) hectares if such landowner is cultivating such area or will now
cultivate it; while RA 6657 states:
 
SEC. 6. Retention Limits.Except as otherwise provided in this Act, no
person may own or retain, directly, any public or private agricultural land,
the size of which shall vary according to factors governing a viable family-
sized farm, such as commodity produced, terrain, infrastructure, and soil
 fertility as determined by the Presidential Agrarian Reform Council (PARC)
created hereunder, but in no case shall the retention by the landowner
exceed five (5) hectares. Three (3) hectares may be awarded to each child
of the landowner, subject to the following qualifications: (1) that he is at
least fifteen (15) years of age; and (2) that he is actually tilling the land or
directly managing the farm: Provided, That landowners whose lands have
been covered by Presidential Decree No. 27 shall be allowed to keep the
area originally retained by them thereunder; Provided, further, That
original homestead grantees or direct compulsory heirs who still own the
original homestead at the time of the approval of this Act shall retain the
same areas as long as they continue to cultivate said homestead.
 
 
Nothing in either law supports Archbishops claim to more than one right of retention on
behalf of each cestui que trust. The provisions of PD 27 and RA 6657 are plain and require no further
interpretationthere is only one right of retention per landowner, and no multiple rights of retention can
be held by a single party. Furthermore, the scheme proposed by Archbishop would create as many
rights of retention as there are beneficiaries, which could in effect protect the entire available land
area from agrarian reform. Under Archbishops reasoning, there is not even a definite landowner to
claim separate rights of retention, and no specific number of rights of retention to be claimed by the
landowners. There is simply no basis in the law or jurisprudence for his argument that it is the
beneficial ownership that should be used to determine which party would have the right of retention.
Archbishop makes much of the conditional donation, that he does not have the power to
sell, exchange, lease, transfer, encumber or mortgage the transferred properties. He claims that these
conditions do not make him the landowner as contemplated by the law. This matter has already been
answered in Hospicio de San Jose de Barili, Cebu City (Hospicio) v. Department of Agrarian Reform.
[11] In that case, wherein Act No. 3239 prohibited the sale under any consideration of lands donated
to the Hospicio, a charitable organization, the Court found that the lands of the Hospicio were not
exempt from the coverage of agrarian reform. In characterizing the sale of land under agrarian
reform, we stated:
Generally, sale arises out of contractual obligation. Thus, it
must meet the first essential requisite of every contract that is the
presence of consent. Consent implies an act of volition in entering into the
agreement. The absence or vitiation of consent renders the sale either void
or voidable.
In this case, the deprivation of the Hospicios property did not
arise as a consequence of the Hospicios consent to the transfer. There was
no meeting of minds between the Hospicio, on one hand, and the DAR or
the tenants, on the other, on the properties and the cause which are to
constitute the contract that is to serve ultimately as the basis for the
transfer of ownership of the subject lands. Instead, the obligation to
transfer arises by compulsion of law, particularly P.D. No. 27.[12]
We discussed further:
 
The twin process of expropriation under agrarian reform and
the payment of just compensation is akin to a forced sale, which has been
aptly described in common law jurisdictions as sale made under the
process of the court and in the mode prescribed by law, and which is not
the voluntary act of the owner, such as to satisfy a debt, whether of a
mortgage, judgment, tax lien, etc. The term has not been precisely defined
in this jurisdiction, but reference to the phrase itself is made in Articles
223, 242, 237 and 243 of the Civil Code, which uniformly exempt the
family home from execution, forced sale, or attachment. Yet a forced sale
is clearly different from the sales described under Book V of the Civil Code
which are conventional sales, as it does not arise from the consensual
agreement of the vendor and vendee, but by compulsion of law. Still, since
law is recognized as one of the sources of obligation, there can be no
dispute on the efficacy of a forced sale, so long as it is authorized by law.
[13]
Archbishops claim that he does not have jus disponendi over the subject properties is unavailing. The
very nature of the compulsory sale under PD 27 and RA 6657 defeats such a claim. Other less
scrupulous parties may even attempt creating trusts to prevent their lands from coming under
agrarian reform, and say that the trustee has no power to dispose of the properties. The disposition
under PD 27 and RA 6657 is of a different character than what is contemplated by jus disponendi,
wherein under these laws, voluntariness is not an issue, and the disposition is necessary for the laws
to be effective.
 
Under PD 27 and RA 6657, Archbishop cannot claim that the alleged conditions of the
donations would have primacy over the application of the law. This forced sale is not even a violation
of the conditions of the donation, since it is by application of law and beyond Archbishops control. The
application of the law cannot and should not be defeated by the conditions laid down by the donors of
the land. If such were allowed, it would be a simple matter for other landowners to place their lands
without limit under the protection of religious organizations or create trusts by the mere act of
donation, rendering agrarian reform but a pipe dream.
Archbishops contention that he is merely an administrator of the donated properties will not serve to
remove these lands from the coverage of agrarian reform. Under PD 27, the coverage is lands devoted
to rice and corn. Section 4 of RA 6657 states, 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. The lands in Archbishops name are agricultural lands that fall
within the scope of the law, and do not fall under the exemptions.
 
The exemptions under RA 6657 form an exclusive list, as follows:
SEC. 10. Exemptions and Exclusions.
(a) Lands actually, directly and exclusively used for parks, wildlife, forest
reserves, reforestation, fish sanctuaries and breeding grounds, watersheds
and mangroves shall be exempt from the coverage of this Act.
(b) Private lands actually, directly and exclusively used for prawn farms
and fishponds shall be exempt from the coverage of this Act: Provided,
That said prawn farms and fishponds have not been distributed and
Certificate of Land Ownership Award (CLOA) issued under the Agrarian
Reform Program.
In cases where the fishponds or prawn farms have been subjected to the
Comprehensive Agrarian Reform Law, by voluntary offer to sell, or
commercial farms deferment or notices of compulsory acquisition, a simple
and absolute majority of the actual regular workers or tenants must
consent to the exemption within one (1) year from the effectivity of this
Act.  When the workers or tenants do not agree to this exemption, the
fishponds or prawn farms shall be distributed collectively to the worker-
beneficiaries or tenants who shall form cooperative or association to
manage the same.
In cases where the fishponds or prawn farms have not been subjected to
the Comprehensive Agrarian Reform Law, the consent of the farmworkers
shall no longer be necessary; however, the provision of Section 32-A
hereof on incentives shall apply.
(c) Lands actually, directly and exclusively used and found to be necessary
for national defense, school sites and campuses, including experimental
farm stations operated by public or private schools for educational
purposes, seeds and seedlings research and pilot production center, 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. (As amended by R. A. 7881)
Archbishop would claim exemption from the coverage of agrarian reform by stating that he is a mere
administrator, but his position does not appear under the list of exemptions under RA 6657. His
claimed status as administrator does not create another class of lands exempt from the coverage of
PD 27 or RA 6657, and The Roman Catholic Apostolic Administrator of Davao, Inc.[14] does not create
another definition for the term landowner.
We explained in Hospicio:
 
It is axiomatic that where a general rule is established by a
 statute with exceptions, the Court will not curtail nor add to the latter by
implication, and it is a rule that an express exception excludes all others.
We cannot simply impute into a statute an exception which the Congress
did not incorporate. Moreover general welfare legislation such as land
reform laws is to be construed in favor of the promotion of social justice to
ensure the well-being and economic security of the people. Since a broad
construction of the provision listing the properties exempted under the
CARL would tend to denigrate the aims of agrarian reform, a strict
application of these exceptions is in order.[15]
Archbishop cannot claim exemption in behalf of the millions of Filipino faithful, as the
lands are clearly not exempt under the law. He should not fear that his followers are simply being
deprived of land, as under both PD 27 and RA 6657, he is entitled to just compensation, which he may
then use for the benefit of his followers. His situation is no different from other landowners affected by
agrarian reformthey are somewhat deprived of their land, but it is all for a greater good.
 
As Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian
Reform[16] recognized the revolutionary character of the expropriation under the agrarian reform law,
we follow such lofty ideal for the resolution of this case. This grand purpose under the CARL must not
be hindered by the simple expedient of appending conditions to a donation of land, or by donating
land to a church. This is not to cast aspersions on religious organizations, but it is not fitting for them
to be used as vehicles for keeping land out of the hands of the landless. The law is indubitably in line
with the charitable ideals of religious organizations to ensure that the land they own falls into the
hands of able caretakers and owners. As a religious leader, Archbishop can take solace in the fact that
his lands are going to be awarded to those who need and can utilize them to the fullest.
WHEREFORE, we DENY the petition, and AFFIRM the February 4, 1999 Decision in CA-
G.R. SP No. 48282.
 
SO ORDERED.
Republic of the PhilippinesSUPREME COURTManila
FIRST DIVISION  answer for damages that private respondents may suffer in the event that the expropriation cases do
G.R. No. 103125 May 17, 1993
PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R. VILLAFUERTE and HON.
BENJAMIN V. PANGA as Presiding Judge of RTC Branch 33 at Pili, Camarines Sur, petitioners,
vs.THE COURT OF APPEALS (THIRD DIVISION), ERNESTO SAN JOAQUIN and EFREN SAN
JOAQUIN, respondents.
The Provincial Attorney for petitioners.
Reynaldo L. Herrera for Ernesto San Joaquin.
QUIASON, J.:
In this appeal by certiorari from the decision of the Court of Appeals in AC-G.R. SP No. 20551 entitled
"Ernesto N. San Joaquin, et al., v. Hon. Benjamin V. Panga, et al.," this Court is asked to decide
whether the expropriation of agricultural lands by local government units is subject, to the prior
approval of the Secretary of the Agrarian Reform, as the implementator of the agrarian reform
program.
On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur passed
Resolution No. 129, Series of 1988, authorizing the Provincial Governor to purchase or expropriate
property contiguous to the provincial capitol site, in order to establish a pilot farm for non-food and
non-traditional agricultural crops and a housing project for provincial government employees.
The "WHEREAS" clause o:f the Resolution states:
WHEREAS, the province of Camarines Sur has adopted a five-year Comprehensive Development plan,
some of the vital components of which includes the establishment of model and pilot farm for non-
food and non-traditional agricultural crops, soil testing and tissue culture laboratory centers, 15 small
scale technology soap making, small scale products of plaster of paris, marine biological and sea
farming research center,and other progressive feasibility concepts objective of which is to provide the
necessary scientific and technology know-how to farmers and fishermen in Camarines Sur and to
establish a housing project for provincial government employees;
WHEREAS, the province would need additional land to be acquired either by purchase or expropriation
to implement the above program component;
WHEREAS, there are contiguous/adjacent properties to be (sic) present Provincial Capitol Site ideally
suitable to establish the same pilot development center;
WHEREFORE . . . .
Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, Hon. Luis
R.Villafuerte, filed two separate cases for expropriation against Ernesto N. San Joaquin and Efren N.
San Joaquin, docketed as Special Civil Action Nos. P-17-89 and P-19-89 of the Regional Trial Court,
Pili, Camarines Sur, presided by the Hon. Benjamin V. Panga.
Forthwith, the Province of Camarines Sur filed a motion for the issuance of writ of possession. The San
Joaquins failed to appear at the hearing of the motion.
The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered
for their property. In an order dated December 6, 1989, the trial court denied the motion to dismiss
and authorized the Province of Camarines Sur to take possession of the property upon the deposit
with the Clerk of Court of the amount of P5,714.00, the amount provisionally fixed by the trial court to
not prosper. The trial court issued a writ of possession in an order dated January18, 1990.
The San Joaquins filed a motion for relief from the order, authorizing the Province of Camarines Sur to
take possession of their property and a motion to admit an amended motion to dismiss. Both motions
were denied in the order dated February 1990.
In their petition before the Court of Appeals, the San Joaquins asked: (a) that Resolution No. 129,
Series of 1988 of the Sangguniang Panlalawigan be declared null and void; (b) that the complaints for
expropriation be dismissed; and (c) that the order dated December 6, 1989 (i) denying the motion to
dismiss and (ii) allowing the Province of Camarines Sur to take possession of the property subject of
the expropriation and the order dated February 26, 1990, denying the motion to admit the amended
motion to dismiss, be set aside. They also asked that an order be issued to restrain the trial court
from enforcing the writ of possession, and thereafter to issue a writ of injunction.
In its answer to the petition, the Province of Camarines Sur claimed that it has the authority to initiate
the expropriation proceedings under Sections 4 and 7 of Local Government Code (B.P. Blg. 337) and
that the expropriations are for a public purpose.
Asked by the Court of Appeals to give his Comment to the petition, the Solicitor General stated that
under Section 9 of the Local Government Code (B.P. Blg. 337), there was no need for the approval by
the Office of the President of the exercise by the Sangguniang Panlalawigan of the right of eminent
domain. However, the Solicitor General expressed the view that the Province of Camarines Sur must
first secure the approval of the Department of Agrarian Reform of the plan to expropriate the lands of
petitioners for use as a housing project.
The Court of Appeals set aside the order of the trial court, allowing the Province of Camarines Sur to
take possession of private respondents' lands and the order denying the admission of the amended
motion to dismiss. It also ordered the trial court to suspend the expropriation proceedings until after
the Province of Camarines Sur shall have submitted the requisite approval of the Department of
Agrarian Reform to convert the classification of the property of the private respondents from
agricultural to non-agricultural land.
Hence this petition.
It must be noted that in the Court of Appeals, the San Joaquins asked for: (i) the dismissal of the
complaints for expropriation on the ground of the inadequacy of the compensation offered for the
property and (ii) the nullification of Resolution No. 129, Series of 1988 of the Sangguniang
Panlalawigan of the Province of Camarines Sur.
The Court of Appeals did not rule on the validity of the questioned resolution; neither did it dismiss the
complaints. However, when the Court of Appeals ordered the suspension of the proceedings until the
Province of Camarines Sur shall have obtained the authority of the Department of Agrarian Reform to
change the classification of the lands sought to be expropriated from agricultural to non-agricultural
use, it assumed that the resolution is valid and that the expropriation is for a public purpose or public
use.
Modernly, there has been a shift from the literal to a broader interpretation of "public purpose" or
"public use" for which the power of eminent domain may be exercised. The old concept was that the
condemned property must actually be used by the general public (e.g. roads, bridges, public plazas,
etc.) before the taking thereof could satisfy the constitutional requirement of "public use". Under the
new concept, "public use" means public advantage, convenience or benefit, which tends to contribute
to the general welfare and the prosperity of the whole community, like a resort complex for tourists or
housing project (Heirs of Juancho Ardano v. Reyes, 125 SCRA 220 [1983]; Sumulong v. Guerrero, 154
SC.RA 461 [1987]).
The expropriation of the property authorized by the questioned resolution is for a public purpose. The
establishment of a pilot development center would inure to the direct benefit and advantage of the
people of the Province of Camarines Sur. Once operational, the center would make available to the
community invaluable information and technology on agriculture, fishery and the cottage industry.
Ultimately, the livelihood of the farmers, fishermen and craftsmen would be enhanced. The housing
project also satisfies the public purpose requirement of the Constitution. As held in Sumulong v.
Guerrero, 154 SCRA 461, "Housing is a basic human need. Shortage in housing is a matter of state
concern since it directly and significantly affects public health, safety, the environment and in sum the
general welfare."
It is the submission of the Province of Camarines Sur that its exercise of the power of eminent domain
cannot be restricted by the provisions of the Comprehensive Agrarian Reform Law (R.A. No. 6657),
particularly Section 65 thereof, which requires the approval of the Department of Agrarian Reform
before a parcel of land can be reclassified from an agricultural to a non-agricultural land.
The Court of Appeals, following the recommendation of the Solicitor General, held that the Province of
Camarines Sur must comply with the provision of Section 65 of the Comprehensive Agrarian Reform
Law and must first secure the approval of the Department of Agrarian Reform of the plan to
expropriate the lands of the San Joaquins.
In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners raised the issue of whether the
Philippine Tourism Authority can expropriate lands covered by the "Operation Land Transfer" for use of
a tourist resort complex. There was a finding that of the 282 hectares sought to be expropriated, only
an area of 8,970 square meters or less than one hectare was affected by the land reform program and
covered by emancipation patents issued by the Ministry of Agrarian Reform. While the Court said that
there was "no need under the facts of this petition to rule on whether the public purpose is superior or
inferior to another purpose or engage in a balancing of competing public interest," it upheld the
expropriation after noting that petitioners had failed to overcome the showing that the taking of 8,970
square meters formed part of the resort complex. A fair and reasonable reading of the decision is that
this Court viewed the power of expropriation as superior to the power to distribute lands under the
land reform program.
The Solicitor General denigrated the power to expropriate by the Province of Camarines Sur by
stressing the fact that local government units exercise such power only by delegation. (Comment, pp.
14-15; Rollo, pp. 128-129)
It is true that local government units have no inherent power of eminent domain and can exercise it
only when expressly authorized by the legislature (City of Cincinnati v. Vester, 28l US 439, 74 L.ed.
950, 50 SCt. 360). It is also true that in delegating the power to expropriate, the legislature may
retain certain control or impose certain restraints on the exercise thereof by the local governments
(Joslin Mfg. Co. v. Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While such delegated power
may be a limited authority, it is complete within its limits. Moreover, the limitations on the exercise of
the delegated power must be clearly expressed, either in the law conferring the power or in other
legislations.
Resolution No. 129, Series of 1988, was promulgated pursuant to Section 9 of B.P. Blg. 337, the Local
Government Code, which provides:
A local government unit may, through its head and acting pursuant to a resolution of its sanggunian
exercise the right of eminent domain and institute condemnation proceedings for public use or
purpose.
Section 9 of B.P. Blg. 337 does not intimate in the least that local government, units must first secure
the approval of the Department of Land Reform for the conversion of lands from agricultural to non-
agricultural use, before they can institute the necessary expropriation proceedings. Likewise, there is
no provision in the Comprehensive Agrarian Reform Law which expressly subjects the expropriation of
agricultural lands by local government units to the control of the Department of Agrarian Reform. The
closest provision of law that the Court of Appeals could cite to justify the intervention of the
Department of Agrarian Reform in expropriation matters is Section 65 of the Comprehensive Agrarian
Reform Law, which reads:
Sec. 65. Conversion of Lands. — After the lapse of five (5) years from its award, when the land ceases
to be economically feasible and sound for, agricultural purposes, or the locality has become urbanized
and the land will have a greater economic value for residential, commercial or industrial purposes, the
DAR, upon application of the beneficiary or the landowner, with due notice to the affected parties, and
subject to existing laws, may authorize the reclassification or conversion of the land and its
disposition: Provided, That the beneficiary shall have fully paid his obligation.
The opening, adverbial phrase of the provision sends signals that it applies to lands previously placed
under the agrarian reform program as it speaks of "the lapse of five (5) years from its award."
The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No.
129-A, Series of 1987, cannot be the source of the authority of the Department of Agrarian Reform to
determine the suitability of a parcel of agricultural land for the purpose to which it would be devoted
by the expropriating authority. While those rules vest on the Department of Agrarian Reform the
exclusive authority to approve or disapprove conversions of agricultural lands for residential,
commercial or industrial uses, such authority is limited to the applications for reclassification
submitted by the land owners or tenant beneficiaries.
Statutes conferring the power of eminent domain to political subdivisions cannot be broadened or
constricted by implication (Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d. 241).
To sustain the Court of Appeals would mean that the local government units can no longer expropriate
agricultural lands needed for the construction of roads, bridges, schools, hospitals, etc, without first
applying for conversion of the use of the lands with the Department of Agrarian Reform, because all of
these projects would naturally involve a change in the land use. In effect, it would then be the
Department of Agrarian Reform to scrutinize whether the expropriation is for a public purpose or
public use.
Ordinarily, it is the legislative branch of the local government unit that shall determine whether the
use of the property sought to be expropriated shall be public, the same being an expression of
legislative policy. The courts defer to such legislative determination and will intervene only when a
particular undertaking has no real or substantial relation to the public use (United States Ex Rel
Tennessee Valley Authority v. Welch, 327 US 546, 90 L. ed. 843, 66 S Ct 715; State ex rel Twin City
Bldg. and Invest. Co. v. Houghton, 144 Minn. 1, 174 NW 885, 8 ALR 585).
There is also an ancient rule that restrictive statutes, no matter how broad their terms are, do not
embrace the sovereign unless the sovereign is specially mentioned as subject thereto (Alliance of
Government Workers v. Minister of Labor and Employment, 124 SCRA 1 [1983]). The Republic of the
Philippines, as sovereign, or its political subdivisions, as holders of delegated sovereign powers,
cannot be bound by provisions of law couched in general term.
The fears of private respondents that they will be paid on the basis of the valuation declared in the tax
declarations of their property, are unfounded. This Court has declared as unconstitutional the
Presidential Decrees fixing the just compensation in expropriation cases to be the value given to the
condemned property either by the owners or the assessor, whichever was lower ([Export Processing
Zone Authority v. Dulay, 149 SCRA 305 [1987]). As held in Municipality of Talisay v. Ramirez, 183
SCRA 528 [1990], the rules for determining just compensation are those laid down in Rule 67 of the
Rules of Court, which allow private respondents to submit evidence on what they consider shall be the
just compensation for their property.
WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals is set aside
insofar as it (a) nullifies the trial court's order allowing the Province of Camarines Sur to take
possession of private respondents' property; (b) orders the trial court to suspend the expropriation
proceedings; and (c) requires the Province of Camarines Sur to obtain the approval of the Department
of Agrarian Reform to convert or reclassify private respondents' property from agricultural to non-
agricultural use.
The decision of the Court of Appeals is AFFIRMED insofar as it sets aside the order of the trial court,
denying the amended motion to dismiss of the private respondents.
SO ORDERED.
Republic of the PhilippinesSUPREME COURTManila
THIRD DIVISION
G.R. No. 197486               September 10, 2014
RENATO L. DELFINO, SR. (Deceased), Represented by his Heirs, namely: GRACIA DELFINO,
GREGORIO A. DELFINO; MA. ISABEL A. DELFINO, RENATO A. DELFINO, JR., MA. REGINA
DELFINO ROSELLA, MA. GRACIA A. DELFINO, MARIANO A. DELFINO, MA. LUISA DELFINO
GREGORIO and REV. FR. GABRIELA. DELFINO, Petitioners, vs.AVELINO K. ANASAO and ANGEL
K. ANASAO (Deceased and represented by his sole heir, SIXTO C. ANASAO), Respondents.
DECISION
VILLARAMA, JR., J.:
Assailed in this petition for review under Rule 45 are the Decision 1 dated January 31, 2011 and
Resolution2 dated June 17, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 111147. The CA
reversed and set aside the Decision3 dated February 6, 2008 and Resolution4 dated September 30,-
2008 of the Office of the Pre.sident (OP) denying the petition to annul or cancel the Orders5 dated
February 28, 1995 and December 13, 1995 of the Secretary of Agrarian Reform and clarifying the
Order dated February 28, Factual Antecedents Prior to the effectivity of Presidential Decree No. 27 (PD
27) Renato L. Delfino, Sr. (Delfino) owned the following parcels of agricultural land in the Province of
Laguna:
In October 1975, Delfino soldthe 20.8108-hectare coconut land covered by TCT No. T-26381 (T-
69595), leaving him with 14.6717 hectares of riceland. The tenanted portion (9.8597 hectares) being
tilled by respondents Avelino K. Anasao and Angel K. Anasao, and another farmer, Rodriguez P.
Dacumos was placed under Operation Land Transfer (OLT) pursuant to Presidential Decree No. 27 (PD
27).7
After full payment to the Land Bank of the Philippines of the amortizations, the farmer-
beneficiarieswere issued Emancipation Patents8 (EPs), as shown below:
The remaining area of 3.2942 hectares covered by OLT was not issued with EPs.10
On February 8, 1992, prior to the registration of the EPs in the Registry of Deeds, Delfino filed an
Application for Retention over the entire 14.6717-hectare riceland. Upon the recommendation of the
Department of Agrarian Reform (DAR), Laguna Provincial Office, the DAR Regional Office IV Director
issued an Order11 dated June 22, 1993 denying retention of the 9.8597 hectares but granting retention
over the 4.8120 hectares which was not covered by OLT.12
Delfino appealed to then DAR Secretary Ernesto D. Garilao who issued an Order13 dated February 28,
1995, as follows:
WHEREFORE, premises considered, this Order is hereby issued setting aside the Order of the DAR
Regional Director of Region IV dated June 22, 1993, thus petitioner is hereby given the maximum of
five (5) hectares from the tenanted portion as his retained area.
SO ORDERED.14
A motion for reconsideration by way of motion for intervention was filed by respondents who argued
that the implementation of the February 28, 1995 Order will have the effect of cancelling the EPs and
consequently deprive them of ownership of the landholdings they acquired pursuant to PD 27. In his
Order dated December 13,1995, Secretary Garilao denied the motion for utter lack of merit.15
Respondents appealed to the OP but later withdrew the appeal and instead filed a petition for review
in the CA (CAG.R. SP No. 39761). By Resolution dated March 15, 1996, the CA’s Third Division
dismissed the petition for being insufficient in form and substance. Respondents’ motion for
reconsideration was likewise denied under Resolution dated January 28, 1997. Entry of judgment was
issued by the CA on said case.16
Meanwhile, on August 24, 1995, Delfino sold two hectares of his tenanted riceland covered by TCT
Nos. T-26378 (T-69592) situated in Barangay Tagapo, Sta. Rosa, Laguna, to SM Prime Holdings, Inc.
Though covered by OLT, no EP had been issued on this portion under TCT No. T-26378 (T-69592). 17 A
new certificate of title (TCT No. T-389984) in the name of SM Prime Holdings, Inc.was issued on
February 25, 1997.18
On September 13, 1995, Delfino filed before the Provincial Agrarian Reform Adjudicator (PARAD) a
petition19 for cancellation of the EPs previously issued to respondents on the basis of the DAR
Secretary’s Order dated December 13, 1995 granting him fivehectares as retention area (DCN- IV-La-
0437-95).
On February 17, 1997, respondents filed before the Office of the DAR Secretary a Motion for
Clarificatory Judgment20 praying that an administrative determination be made of the particularportion
to be retained and whether such right of retention will result in the cancellation of EPs already
distributed to farmer-beneficiaries identified as of October 21, 1972.
Meanwhile, in a Joint Order21 dated February 19,1997, Provincial Adjudicator Barbara P. Tan granted
Delfino’s petition for cancellation of EPs, as follows:
WHEREFORE, in the light of the foregoing considerations, ORDER is hereby jointly issued in the instant
consolidated petitions, to wit:
1. Declaring an aggregate area offive (5) hectares consisting of the lots covered by the following
certificates of title or Emancipation Patents as Petitioner’s retention area, to wit:
1) Transfer Certificate of Title No. EP-782, EP No. A-326714 in the name of Rodriguez Dacumos
corresponding to a portion thereof with an area of 1.1140 hectares;
2) Transfer Certificate of Title No. EP-791, EP No. A-326741 in the name of Avelino K. Anasao with an
area of 3.0016 hectares;
3) Transfer Certificate of Title No. EP-790, EP No. A-326742 and Transfer Certificate of Title No. EP-
792, EP No. A-326743 in the name of Angel K. Anasao with a total area of .8844 hectare;
2. Directing the Register of Deeds of Laguna to cause the cancellation of the above-mentioned
certificates of title registered in the names of Respondents Avelino K. Anasao and Angel K. Anasao and
the reinstatement of Transfer Certificate of Title No. T-21712 in the name of Renato L. Delfino, Sr.;
3. Directing said Register of Deeds of Laguna to cause the inscription of the instant Order onthe
original and Owner’s duplicate copies of Transfer Certificate of Title No. EP-782, EP No. A-326714 in
the name of Respondent Rodriguez Dacumos in respect of the area of 1.1140 hectares;
4. Declaring the subject parcels of land constituting Petitioner’s retention area reverted to agricultural
leasehold status and private Respondents as the agricultural lessees over their respective landholdings
thus reverted;
5. Directing private Respondents Avelino K. Anasao, Angel K. Anasao and Rodriguez Dacumos to
surrender their respective owner’s duplicate of the subject certificates of title or Ema[n]cipation
Patents to this Office and/or to its authorized Officer upon proper writ of execution for purposes of
implementing the instant Order, Provided, in the event of failure or refusal on their part to comply
herewith the subject owner’s duplicate of the said certificates of title or emancipation patents shall be
deemed cancelled sans any need of prior surrender.
SO ORDERED.22
A writ of execution was issued on May 19, 1997 directing the DARAB Provincial Sheriff toretrieve the
owner’s duplicate copies of the subject EPs for purposes of cancellation and/or annotation.
Respondents then filed a petition for certiorari inthe CA (CA-G.R. SP No. 44285) to annul the said writ
and enjoin its implementation.23
In their Supplemental Motion24 (to the Motion for Clarificatory Judgment), respondents pointed out
that Delfino acted in bad faith when he sold a portion of the OLT-covered land infavor of SM Prime
Holdings, Inc. without the required DAR clearance. They also prayed that the DAR Secretary order the
PARAD to stop the implementation of the Joint Order in DARAB Case No. DCN-IV-La-0437-95.
In his Order25 dated August 8, 1997, Secretary Garilao denied respondents’ motion:
A perusal of the records would show that as far as this Office is concerned, the questioned Order has
already become final and executory as attested to by Director Ruben Joel A. Puertollano of the Bureau
of Agrarian Legal Assistance, in his Memorandum dated 16 May 1997. Even granting, for the sake of
argument, that the herein motion could still be entertained, the undeniable fact remains that the
issues sought to be clarified herein have already been ruled upon by this Office in its Orders dated 28
February 1995 and 13 December 1995. The same issues were raised in petitioners’ Petition for Review
with the Court of Appeals which had likewise been dismissed for being insufficient in form and
substance.
WHEREFORE, premises considered, an Order is hereby issued DENYING herein Motion for Clarificatory
Judgment. This case is considered closed.
SO ORDERED.
On September 20, 2001,respondents filed a Petition to Annul and/or Cancel the DAR Secretary’s
Orders dated February 28, 1995, December 13, 1995 and August 8, 1997 on the following grounds:
(1) Delfino is guilty of fraud, misrepresentation and concealment of a material fact, in his application
for retention; and (2) respondents’ EPs, which are now covered by transfer certificates of title, can be
cancelled only by order of a court, and not by the DAR or its Secretary.26
On February 2, 2006, DAR Secretary Nasser C. Pangandaman issued an Order27 denying the petition
to annul/cancel the subject orders and clarifying the February 28, 1995 Order of Secretary Garilao,
viz:
WHEREFORE, premises considered, Order is hereby issued DENYINGthe Petition to Annul/Cancel the
Orders of the Secretary of Agrarian Reform dated 28 February 1995, 13 December 1995 and 08
August 1997, respectively. Therefore,the Order dated 28 February 1995 is hereby AFFIRMED.
FURTHER, the Order dated 28 February 1995 is hereby CLARIFIEDto read:
1. The Deed of Sale dated 24 August 1995 executed by the respondent and SM Prime Holdings, Inc.
with an area of two (2) hectares shall be considered as the respondent’s retention area;
2. The remaining three (3) hectares shall either be taken from the 4.8120 hectares covered by TCT
Nos. T-21711 (T-49744) and T-216233; and
3. The concerned Regional Director, PARO and the MARO are hereby DIRECTEDto proceed with the
coverage of the remains of parcels of agricultural land owned by respondent, after having been given
the five (5) hectare retained area pursuant to the above,for distribution to qualified
farmerbeneficiaries pursuant to existing rules and regulations.
SO ORDERED.28
Delfino filed a motion for reconsideration which was denied by Secretary Pangandaman in his Order29
dated May 30, 2007, thus:
It is beyond dispute that the right to choose the retention area pertains to the landowner.
However,this Office will not allow anyone to circumvent the very purpose of the Comprehensive
Agrarian Reform Program – the five (5) hectare retention limit. It bears stressing that the inclusion of
the two (2) hectares which is the subjectof the Deed of Sale dated 24 August 1995 executed by the
respondent in favor of SM Prime Holdings, Inc., as retained area is only to prevent the former to
exercise his right of retention beyond the maximum limits allowed by law. The herein respondent
cannot simultaneously enjoy from [sic] the proceeds of the Deed of Sale and at the same time
exercise the right of retention under CARP.
xxxx
As regards petitioners’ contention thatthere is a need to clarify the Order dated 02 February 2006 in
order toeffect the reinstatement of the cancelled TCTs/EPs, this Office finds the contention
unmeritorious. While it is true that the respondent’s five (5) hectares retained area were already
delineated and clarified in the assailed Order dated 02 February 2006, nevertheless, this Office cannot
issue a directive reinstating TCT No. EP-791 in favor of petitioner Avelino K. Anasao covering the
3.0016 hectares landholding and TCT Nos. EP-790 and 792 in favor of petitioner Angel Anasao
covering the landholdings, with an area of 0.7029 and 0.1815 hectare, respectively.
It must be noted that petitioners’ titles were cancelled by the DARAB in a separate action for
cancellation filed by herein respondent Renato L. Delfino, which was docketed as DARAB Case No. IV-
La 437-95. This Office, therefore, cannot interfere with the decision of said forum. To do so would
tantamount to encroachment of powers.
Inasmuch as petitioner Rodriguez D. Dacumos filed a Motion to Withdraw Petition and/or Desistance to
Further Pursue Petition, wherein he manifested that he is no longer interested in pursuing the instant
case, this Office is constrained to dismiss the case in so far as petitioner Rodriguez D. Dacumos is
concerned. As pointed out by petitioner Rodriguez D. Dacumos, he and hereinrespondent Renato L.
Delfino have threshed out already their differences and reached an agreement to settle the case
amicably. Hence, the petitioner’s prayers, to wit: that his name would be dropped as party petitioner
inthe instant case and the property covered by TCT No. EP-782 would be declared as no longer
included in the instant case, is hereby granted. WHEREFORE, in the light of the foregoing premises,
Order is hereby issued DENYINGthe herein Motion for Reconsideration. Thus, the assailed Order dated
2 February 2006 is hereby AFFIRMED.
SO ORDERED.30
Respondents appealed the Orders dated February 2,2006 and May 30, 2007 to the OP.
On February 6, 2008, the OP rendered its Decision partly granting the appeal by nullifying the portion
of the May 30, 2007 Order of Secretary Pangandaman which clarified Secretary Garilao’s February 28,
1995 Order. Said office ruled that the two hectaressold to SM Prime Holdings, Inc. would not bring
about any ambiguity in the execution of the Order dated February 28, 1995, in relation to the
December 13, 1995 and August 8, 1997 Orders, and that whatever remains after deducting the
9.6717 hectares reserved for the farmer-beneficiaries pertains to Delfino. As to the remaining portion
of the May 30, 2007 Order of Secretary Pangandaman, the same was upheld.
Respondents’ motion for reconsideration was denied under the OP’s Resolution dated September 30,
2008.
The case was elevatedby respondents to the CA via a petition for review under Rule 43. By Decision
dated January 31, 2011, the CA reversed the OP’s ruling and reinstated the Orders dated February 2,
2006 and May 30, 2007 of Secretary Pangandaman. According to the CA, the ambiguity in the
February 28, 1995 Order of Secretary Garilao lies in its failure to specify as to which portion of the
14.617 hectaresshould the five hectares retention area of Delfino be taken. Thus, evenafter the said
order had become final and executory, the DAR Secretary is not precluded from making the necessary
amendments/clarifications thereof so that the fallo would at least conform with the body of said order
and so that the same could readily be executed with dispatch. But since Delfino sold two hectares to
SM Prime Holdings, Inc. before the ambiguity could be properly addressed by DAR, the CA found no
reversible error in the February 2, 2006 Order clarifying the ambiguity and in the May 30, 2007 Order
stating the rationale for such clarification.
Delfino, represented by his surviving heirs (petitioners) filed a motion for reconsideration but the CA
deniedit under Resolution dated June 17, 2011.
Issues
The issues to be resolved in the present controversy are: (1) whether the February 2, 2006 Order of
Secretary Pangandaman, insofar as it clarified the February 28, 1995 Order of Secretary Garilao,
violated the rule on immutability of final judgments; and (2) whether the inclusion of the twohectare
portion sold to SM Prime Holdings, Inc. in Delfino’s retention area was in derogation of Section 6 of
Republic Act No. 6657 (RA 6657).
Our Ruling
We grant in part the petition.
The right of retention is a constitutionally guaranteed right, which is subject to qualification by the
legislature.It serves to mitigate the effects of compulsory land acquisition by balancing the rights of
the landowner and the tenant and by implementing the doctrine that social justice was not meant to
perpetrate an injustice against the landowner.31
In the landmark case of Association of Small Landowners in the Phils., Inc. v. Secretary of Agrarian
Reform,32 this Court held that landowners who have not yet exercised their retention rights under PD
27 are entitled to the new retention rights under RA 6657. Section 6 of the latter law defines the
nature and incidents of the landowner’s right to retention, thus:
SEC. 6. Retention Limits– Exceptas otherwise provided in this Act, no person may own or retain,
directly or indirectly, any public or private agricultural land, the size of which shall vary according to
factors governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and
soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but
in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be
awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least
fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm:
Provided, That landowners whose land have been covered by Presidential Decree No. 27 shall be
allowed to keep the area originally retained by them thereunder; Provided, further, That original
homestead grantees or 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.
The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the
landowner; Provided, however, That in case the area selected for retention by the landowner is
tenanted, the tenant shall have the option to choose whether to remain therein or be a beneficiary in
the same or another agricultural land with similar or comparable features. In casethe tenant chooses
to remain in the retained area, he shall be considered a leaseholder and shall lose his right to be a
beneficiary under this Act. In case the tenant chooses to be a beneficiary in another agricultural land,
he loses his right as a leaseholder to the land retained by the landowner. The tenant must exercise
this option within a period of one (1) year fromthe time the landowner manifests his choice of the area
for retention.
In all cases, the security of tenure of the farmers or farmworkers on the land prior to the approval of
this Act shall be respected.
Upon the effectivity of this Act,any sale, disposition, lease, management contract or transfer
ofpossession of private lands executed by the original landowner in violation of this Act shall be null
and void; Provided, however, That those executed prior to this Act shall be valid only when registered
with the Registerof Deeds within a period of three (3) months after the effectivity of this Act.
Thereafter, all Registers of Deeds shall inform the DAR within thirty (30) days of any transaction
involving agricultural lands in excess of five (5) hectares. (Emphasis supplied.) Under the February 28,
1995 Order of Secretary Garilao, Delfino was granted five hectares "from the tenantedportion as his
retained area." Said order had become final and executory on March 9, 1997.
A decision that has acquired finality becomes immutable and unalterable, and may no longer be
modified in any respect, even if the modification is meant to correct erroneous conclusions of fact or
law, and whether it will be made by the court that rendered it or by the highest court of the land. 33
This doctrine of finality and immutability of judgments is grounded on fundamental considerationsof
public policy and sound practice to the effect that, at the risk of occasional error, the judgments of the
courts must become final at somedefinite date set by law.34
There are, however, exceptions to the general rule, namely: (1) the correction of clerical errors; (2)
the so-called nunc pro tuncentries which cause no prejudice to any party; (3) void judgments; and (4)
whenever circumstances transpire after the finality of the decision rendering its execution unjust and
inequitable.35 The exception to the doctrine of immutability of judgment has been applied in several
cases in order to serve substantial justice.36
In this case, the clarification made by Secretary Pangandaman in his February 2, 2006 Order falls
under the fourth exception.
It is true that the February 28, 1995 Order of Secretary Garilao stated that the five hectares shall be
taken from the tenanted area, which pertains to the 9.8597 hectaresof which 6.5671 hectares were
already issued with EPs in favor of respondents. Subsequently, however, without prior clearance from
the DAR, Delfino sold two hectares of land covered by OLT to SM Prime Holdings, Inc. The DAR
Secretary thus found it fair and equitable to include the said portion to Delfino’s retention area, which
meant that Delfino is entitled only to the balance of three hectares.
As explained by Secretary Pangandaman in his order denying Delfino’s motion for reconsideration,
thisclarification was made in order not to circumvent the five-hectare limitation as said landowner
"cannot [be allowed to] simultaneously enjoy … the proceeds of the [sale] and at the same time
exercise the right of retention"37 to the maximum of five hectares.
Petitioners argue that the amendment/clarification of the February 28, 1995 Order resulted in the
diminution of Delfino’s right of retention under Section 6 of RA 6657 because the DAR Secretary
cannot impose on the landowner the area of retention, the choice of the landowner having been
upheld in numerous cases decided by this Court particularly in Daez v. Court of Appeals38 .It is further
contended that the two hectares sold to SM by Delfino cannot be considered as retention area, the
same having been declared not agricultural land, pursuant to the Exemption Order 39 dated September
14, 2005 issued by Regional Director Homer P. Tobias.
On the matter of allowing Delfino to choose the remaining three hectares of his retention area,we rule
for the petitioners.
While we agree with Secretary Pangandaman in holding that Delfino had partially exercised his right of
retention when he sold two hectares to SM Prime Holdings, Inc., afterhis application for retention was
granted by Secretary Garilao, we cannot affirm the portion of the February 2, 2006 Order which
decreed that the remaining three hectares shall be taken "either from the 4.8120 hectares covered by
TCT Nos. T-21711 (T-49744) and T-216233." 40 Such directive encroaches on the prerogative expressly
given to landowners under Section 6 of RA 6657 tochoose their area of retention.
As this Court held in Daez v. Court of Appeals,41 the right of retention can be exercised over tenanted
land and even where CLOAs or EPs have been issued to tenant-farmers provided that the right of
tenants under Section 6 of RA 6657 is similarly protected. Thus:
…For as long as the area to be retained is compact or contiguous and it does not exceed the retention
ceiling of five (5) hectares, a landowner’s choice of the area to be retained, must prevail.Moreover,
Administrative Order No. 4, series of 1991, which supplies the details for the exercise of a landowner’s
retention rights, likewise recognizes no limit to the prerogative of the landowner, although he is
persuaded to retain other lands instead to avoid dislocation of farmers.
Without doubt, this right of retention may be exercised over tenanted land despite even the issuance
of Certificate of Land Transfer (CLT) to farmer-beneficiaries. What must be protected, however, is the
right of the tenants toopt to either stay on the land chosen to be retained by the landowner or be a
beneficiary in another agricultural land with similar or comparable features.
xxxx
The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner fromretaining the
area covered thereby. Under Administrative Order No. 2, series of 1994, an EP or CLOA may be
cancelled if the land covered is later found to be part of the landowner’s retained area.
A certificate of title accumulates inone document a comprehensive statement of the status of the fee
heldby the owner of a parcel of land. As such, it is a mere evidence of ownership and it does not
constitute the title to the land itself. It cannot confer title where no title has been acquired by any of
the means provided by law.
Thus, we had, in the past, sustained the nullification of a certificate of title issued pursuant to a
homestead patent because the land covered was not part of the public domain and as a result, the
government had no authority to issue such patent in the first place. Fraud in the issuance of the
patent, is also a ground for impugning the validity of a certificate of title. In other words, the invalidity
of the patent or title is sufficient basis for nullifying the certificate of title since the latter is merely an
evidence of the former.
In the instant case, the CLTs of private respondents over the subject 4.1685-hectare riceland were
issued without Eudosia Daez having been accorded her right of choice as to what to retain among her
landholdings. The transfer certificates of title thus issued on the basis of those CLTs cannot operate to
defeat the right of the heirs of deceased Eudosia Daez to retain the said 4.1685 hectares of riceland. 42
(Underscoring in the original; emphasis supplied.)
As to the Exemption Order allegedly issued by the DAR Regional Director dated September 14, 2005,
the Court notes that the matter of SM Prime Holdings, Inc.’s application for exemption from CARP
coverage was never raised by petitioners during the proceedings before the Regional Director and OP.
Records showed that the administrative declaration of "non-agricultural" use of the two-hectare
portion sold to SM Prime Holdings, Inc. pursuant to a 1981 zoning classification ordinance, was
mentioned by petitioners for the first time in their Motion for Reconsideration dated February 17, 2011
after the CA rendered its adverse ruling, attaching a photocopy thereof tothe motion. The only
grounds or arguments invoked by petitioners in their Memorandum submitted to the CA were the
finality of the assailed DAR Secretary’s Orders dated February 28, 1995, December 13, 1995 and
August 8, 1997 and that respondents’ petition for review was filed out of time.
The general rule is that issues raised for the first time on appeal and not raised in the proceedings in
the lower court are barred by estoppel. Points of law, theories, issues, and arguments not brought to
the attention of the trial court ought not to be considered by a reviewing court, as these cannot be
raised for the first time on appeal. To consider the alleged facts and arguments raised belatedly would
amount to trampling on the basic principles of fair play, justice, and due process.43
Finally, we find no merit in respondents’ argument that the present petition should be dismissed for
failure of the other co-heirs/co-petitioners to sign the verification and certification against forum-
shopping as required by Sections 4 and 5, Rule 7 of the 1997 Rules of Civil Procedure. In the case of
Iglesia Ni Cristo v. Judge Ponferrada44 we expounded on the purpose and sufficiency of compliance
with the verification and certification against forum shopping requirements, viz:
The issue in the present case is not the lack of verification but the sufficiency of one executed by only
one of plaintiffs. This Court held in Ateneo de Naga University v. Manalo, that the verification
requirement is deemed substantially complied with when, as in the present case, only one of the
heirs-plaintiffs, who has sufficient knowledge and belief to swear to the truth of the allegations in the
petition (complaint), signed the verification attached to it.Such verification is deemed sufficient
assurance that the matters alleged in the petition have been made in good faith or are true and
correct, not merely speculative.
The same liberality should likewise be applied to the certification against forum shopping.1âwphi1 The
general rule is that the certification must be signed by all plaintiffs in a case and the signature of only
one of them is insufficient. However, the Court has also stressed in a number of cases that the rules
onforum shopping were designed to promote and facilitate the orderly administration of justice and
thus should not be interpreted with such absolute literalness as to subvert its own ultimate and
legitimate objective. The rule of substantial compliance may be availed of with respect to the contents
of the certification. This is because the requirement of strict compliance with the provisions merely
underscores its mandatory nature in that the certification cannot be altogether dispensed with or its
requirements completely disregarded.
The substantial compliance rule has been applied by this Court in a number of cases: Cavile v. Heirs of
Cavile, where the Court sustained the validity of the certification signed by only one of petitioners
because he is a relative of the other petitioners and co-owner of the properties in dispute; Heirs of
Agapito T. Olarte v. Office of the President of the Philippines, where the Court allowed a certification
signed by only two petitioners because the case involved a family home in which all the petitioners
shared a common interest; Gudoy v. Guadalquiver, where the Court considered as valid the
certification signed by only four of the nine petitioners because all petitioners filed as co-owners pro
indivisoa complaint against respondents for quieting of title and damages, as such, they all have joint
interest in the undivided whole; and Dar v. AlonzoLegasto, where the Court sustained the certification
signed by only one of the spouses as they were sued jointly involving a property in which they had a
common interest.
It is noteworthy that in all of the above cases, the Court applied the rule on substantial compliance
because of the commonality of interest of all the parties with respect to the subject of the
controversy.45 (Emphasis supplied.)
WHEREFORE, the petition is PARTLY GRANTED.The Decision dated January 31, 2011 of the Court
ofAppeals in CA-G.R. SP No. 111147 is AFFIRMEDinsofar as it upheld the February 2, 2006 Order of
Secretary Pangandaman declaring the two-hectare land covered by TCT No. T-26378 (T-69592) which
was sold by Renato L. Delfino, Sr. to SM Prime Holdings, Inc. as part of his retention area.
The aforesaid Order is MODIFIEDin that herein petitioners, heirs of Delfino, Sr., are hereby allowed to
choose three hectares of their retention area from the remaining portions of Delfino, Sr.’s landholding
situated in Sta. Rosa, Laguna, subject to the conditions laid down in Section 6 of RA 6657 and DAR
regulations. Respondents are likewise entitled to exercise the rights granted to tenants-beneficiaries
affected by landowner’s retention.
SO ORDERED.
SECOND DIVISION
[G.R. No. 127198. May 16, 2005]
LAND BANK OF THE PHILIPPINES, petitioner, vs. HON. ELI G. C. NATIVIDAD, Presiding
Judge of the Regional Trial Court, Branch 48, San Fernando, Pampanga, and JOSE R.
CAGUIAT represented by Attorneys-in-fact JOSE T. BARTOLOME and VICTORIO
MANGALINDAN, respondents.
DECISION
TINGA, J.:
This is a Petition for Review[1] dated December 6, 1996 assailing the Decision[2] of the
Regional Trial Court[3] dated July 5, 1996 which ordered the Department of Agrarian Reform (DAR)
and petitioner Land Bank of the Philippines (Land Bank) to pay private respondents the amount of
P30.00 per square meter as just compensation for the States acquisition of private respondents
properties under the land reform program.
The facts follow.
On May 14, 1993, private respondents filed a petition before the trial court for the
determination of just compensation for their agricultural lands situated in Arayat, Pampanga, which
were acquired by the government pursuant to Presidential Decree No. 27 (PD 27). The petition named
as respondents the DAR and Land Bank. With leave of court, the petition was amended to implead as
co-respondents the registered tenants of the land.
After trial, the court rendered the assailed Decision the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of petitioners and against respondents, ordering
respondents, particularly, respondents Department of Agrarian Reform and the Land Bank of the
Philippines, to pay these lands owned by petitioners and which are the subject of acquisition by the
State under its land reform program, the amount of THIRTY PESOS (P30.00) per square meter, as the
just compensation due for payment for same lands of petitioners located at San Vicente (or Camba),
Arayat, Pampanga.
Respondent Department of Agrarian Reform is also ordered to pay petitioners the amount of FIFTY
THOUSAND PESOS (P50,000.00) as Attorneys Fee, and to pay the cost of suit.
SO ORDERED.[4]
DAR and Land Bank filed separate motions for reconsideration which were denied by the trial
court in its Order[5] dated July 30, 1996 for being pro forma as the same did not contain a notice of
hearing. Thus, the prescriptive period for filing an appeal was not tolled. Land Bank consequently
failed to file a timely appeal and the assailed Decision became final and executory.
Land Bank then filed a Petition for Relief from Order Dated 30 July 1996,[6] citing excusable
negligence as its ground for relief. Attached to the petition for relief were two affidavits of merit
claiming that the failure to include in the motion for reconsideration a notice of hearing was due to
accident and/or mistake.[7] The affidavit of Land Banks counsel of record notably states that he
simply scanned and signed the Motion for Reconsideration for Agrarian Case No. 2005, Regional Trial
Court of Pampanga, Branch 48, not knowing, or unmindful that it had no notice of hearing[8] due to
his heavy workload.
The trial court, in its Order[9] of November 18, 1996, denied the petition for relief because
Land Bank lost a remedy in law due to its own negligence.
In the instant petition for review, Land Bank argues that the failure of its counsel to include a
notice of hearing due to pressure of work constitutes excusable negligence and does not make the
motion for reconsideration pro forma considering its allegedly meritorious defenses. Hence, the denial
of its petition for relief from judgment was erroneous.
According to Land Bank, private respondents should have sought the reconsideration of the
DARs valuation of their properties. Private respondents thus failed to exhaust administrative remedies
when they filed a petition for the determination of just compensation directly with the trial court. Land
Bank also insists that the trial court erred in declaring that PD 27 and Executive Order No. 228 (EO
228) are mere guidelines in the determination of just compensation, and in relying on private
respondents evidence of the valuation of the properties at the time of possession in 1993 and not on
Land Banks evidence of the value thereof as of the time of acquisition in 1972.
Private respondents filed a Comment[10] dated February 22, 1997, averring that Land Banks
failure to include a notice of hearing in its motion for reconsideration due merely to counsels heavy
workload, which resulted in the motion being declared pro forma, does not constitute excusable
negligence, especially in light of the admission of Land Banks counsel that he has been a lawyer since
1973 and has mastered the intricate art and technique of pleading.
Land Bank filed a Reply[11] dated March 12, 1997 insisting that equity considerations demand
that it be heard on substantive issues raised in its motion for reconsideration.
The Court gave due course to the petition and required the parties to submit their respective
memoranda.[12] Both parties complied.[13]
The petition is unmeritorious.
At issue is whether counsels failure to include a notice of hearing constitutes excusable
negligence entitling Land Bank to a relief from judgment.
Section 1, Rule 38 of the 1997 Rules of Civil Procedure provides:
Sec. 1. Petition for relief from judgment, order, or other proceedings.When a judgment or final order
is entered, or any other proceeding is thereafter taken against a party in any court through fraud,
accident, mistake, or excusable negligence, he may file a petition in such court and in the same case
praying that the judgment, order or proceeding be set aside.
As can clearly be gleaned from the foregoing provision, the remedy of relief from judgment
can only be resorted to on grounds of fraud, accident, mistake or excusable negligence. Negligence to
be excusable must be one which ordinary diligence and prudence could not have guarded against.[14]
Measured against this standard, the reason profferred by Land Banks counsel, i.e., that his
heavy workload prevented him from ensuring that the motion for reconsideration included a notice of
hearing, was by no means excusable.
Indeed, counsels admission that he simply scanned and signed the Motion for Reconsideration
for Agrarian Case No. 2005, Regional Trial Court of Pampanga, Branch 48, not knowing, or unmindful
that it had no notice of hearing speaks volumes of his arrant negligence, and cannot in any manner be
deemed to constitute excusable negligence.
The failure to attach a notice of hearing would have been less odious if committed by a
greenhorn but not by a lawyer who claims to have mastered the intricate art and technique of
pleading.[15]
Indeed, a motion that does not contain the requisite notice of hearing is nothing but a mere
scrap of paper. The clerk of court does not even have the duty to accept it, much less to bring it to the
attention of the presiding judge.[16] The trial court therefore correctly considered the motion for
reconsideration pro forma. Thus, it cannot be faulted for denying Land Banks motion for
reconsideration and petition for relief from judgment.
 It should be emphasized at this point that procedural rules are designed to facilitate the
adjudication of cases. Courts and litigants alike are enjoined to abide strictly by the rules. While in
certain instances, we allow a relaxation in the application of the rules, we never intend to forge a
weapon for erring litigants to violate the rules with impunity. The liberal interpretation and application
of rules apply only in proper cases of demonstrable merit and under justifiable causes and
circumstances. While it is true that litigation is not a game of technicalities, it is equally true that
every case must be prosecuted in accordance with the prescribed procedure to ensure an orderly and
speedy administration of justice. Party litigants and their counsel are well advised to abide by, rather
than flaunt, procedural rules for these rules illumine the path of the law and rationalize the pursuit of
justice.[17]
Aside from ruling on this procedural issue, the Court shall also resolve the other issues
presented by Land Bank, specifically as regards private respondents alleged failure to exhaust
administrative remedies and the question of just compensation.
Land Bank avers that private respondents should have sought the reconsideration of the DARs
valuation instead of filing a petition to fix just compensation with the trial court.
The records reveal that Land Banks contention is not entirely true. In fact, private
respondents did write a letter[18] to the DAR Secretary objecting to the land valuation summary
submitted by the Municipal Agrarian Reform Office and requesting a conference for the purpose of
fixing just compensation. The letter, however, was left unanswered prompting private respondents to
file a petition directly with the trial court.
At any rate, in Philippine Veterans Bank v. Court of Appeals,[19] we declared that there is
nothing contradictory between the DARs primary jurisdiction to determine and adjudicate agrarian
reform matters and exclusive original jurisdiction over all matters involving the implementation of
agrarian reform, which includes the determination of questions of just compensation, and the original
and exclusive jurisdiction of regional trial courts over all petitions for the determination of just
compensation. The first refers to administrative proceedings, while the second refers to judicial
proceedings.
In accordance with settled principles of administrative law, primary jurisdiction is vested in the
DAR to determine in a preliminary manner the just compensation for the lands taken under the
agrarian reform program, but such determination is subject to challenge before the courts. The
resolution of just compensation cases for the taking of lands under agrarian reform is, after all,
essentially a judicial function.[20]
Thus, the trial did not err in taking cognizance of the case as the determination of just
compensation is a function addressed to the courts of justice.
Land Banks contention that the property was acquired for purposes of agrarian reform on
October 21, 1972, the time of the effectivity of PD 27, ergo just compensation should be based on the
value of the property as of that time and not at the time of possession in 1993, is likewise erroneous.
In Office of the President, Malacaang, Manila v. Court of Appeals, [21] we ruled that the seizure of the
landholding did not take place on the date of effectivity of PD 27 but would take effect on the payment
of just compensation.
Under the factual circumstances of this case, the agrarian reform process is still incomplete as
the just compensation to be paid private respondents has yet to be settled. Considering the passage
of Republic Act No. 6657 (RA 6657)[22] before the completion of this process, the just compensation
should be determined and the process concluded under the said law. Indeed, RA 6657 is the applicable
law, with PD 27 and EO 228 having only suppletory effect, conformably with our ruling in Paris v.
Alfeche.[23]
Section 17 of RA 6657 which is particularly relevant, providing as it does the guideposts for
the determination of just compensation, reads as follows:
Sec. 17. Determination of Just Compensation.In determining just compensation, the cost of acquisition
of the land, the current value of like properties, its nature, actual use and income, the sworn valuation
by the owner, the tax declarations, and the assessment made by government assessors shall be
considered. The social and economic benefits contributed by the farmers and the farm-workers and by
the Government to the property as well as the non-payment of taxes or loans secured from any
government financing institution on the said land shall be considered as additional factors to
determine its valuation.
It would certainly be inequitable to determine just compensation based on the guideline
provided by PD 27 and EO 228 considering the DARs failure to determine the just compensation for a
considerable length of time. That just compensation should be determined in accordance with RA
6657, and not PD 27 or EO 228, is especially imperative considering that just compensation should be
the full and fair equivalent of the property taken from its owner by the expropriator, the equivalent
being real, substantial, full and ample.[24]
In this case, the trial court arrived at the just compensation due private respondents for their
property, taking into account its nature as irrigated land, location along the highway, market value,
assessors value and the volume and value of its produce. This Court is convinced that the trial court
correctly determined the amount of just compensation due private respondents in accordance with,
and guided by, RA 6657 and existing jurisprudence.
WHEREFORE, the petition is DENIED. Costs against petitioner.
SO ORDERED.
FIRST DIVISION
 
JOSEFINA S. LUBRICA, in her G.R. No. 170220
capacity as Assignee of FEDERICO
C. SUNTAY, NENITA SUNTAY
TAEDO and EMILIO A.M.
SUNTAY III,
Petitioners, Present:
Panganiban, C.J. (Chairperson),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo,
Sr.,
and
Chico-
Nazario, JJ.
LAND BANK OF THE PHILIPPINES,
Respondent. Promulgated:
November 20, 2006
x ---------------------------------------------------------------------------------------- x
DECISION
YNARES-SANTIAGO, J.:
 
This Petition for Review on Certiorari under Rule 45 of the Rules of Court assails the October 27, 2005
Amended Decision[1] of the Court of Appeals in CA-G.R. SP No. 77530, which vacated its May 26,
2004 Decision affirming (a) the Order of the Regional Trial Court of San Jose, Occidental Mindoro,
Branch 46, acting as Special Agrarian Court, in Agrarian Case Nos. R-1339 and R-1340, dated March
31, 2003 directing respondent Land Bank of the Philippines (LBP) to deposit the provisional
compensation as determined by the Provincial Agrarian Reform Adjudicator (PARAD); (b) the May 26,
2003 Resolution denying LBPs motion for reconsideration; and (c) the May 27, 2003 Order requiring
Teresita V. Tengco, LBPs Land Compensation Department Manager, to comply with the March 31,
2003 Order.
The facts of the case are as follows:
 
Petitioner Josefina S. Lubrica is the assignee[2] of Federico C. Suntay over certain parcels of
agricultural land located at Sta. Lucia, Sablayan, Occidental Mindoro, with an area of 3,682.0285
hectares covered by Transfer Certificate of Title (TCT) No. T-31 (T-1326)[3] of the Registry of Deeds
of Occidental Mindoro. In 1972, a portion of the said property with an area of 311.7682 hectares, was
placed under the land reform program pursuant to Presidential Decree No. 27 (1972)[4] and Executive
Order No. 228 (1987).[5] The land was thereafter subdivided and distributed to farmer beneficiaries.
The Department of Agrarian Reform (DAR) and the LBP fixed the value of the land at P5,056,833.54
which amount was deposited in cash and bonds in favor of Lubrica.
On the other hand, petitioners Nenita Suntay-Taedo and Emilio A.M. Suntay III inherited from
Federico Suntay a parcel of agricultural land located at Balansay, Mamburao, Occidental Mindoro
covered by TCT No. T-128[6] of the Register of Deeds of Occidental Mindoro, consisting of two lots,
namely, Lot 1 with an area of 45.0760 hectares and Lot 2 containing an area of 165.1571 hectares or
a total of 210.2331 hectares. Lot 2 was placed under the coverage of P.D. No. 27 but only 128.7161
hectares was considered by LBP and valued the same at P1,512,575.05.
Petitioners rejected the valuation of their properties, hence the Office of the Provincial Agrarian
Reform Adjudicator (PARAD) conducted summary administrative proceedings for determination of just
compensation. On January 29, 2003, the PARAD fixed the preliminary just compensation at
P51,800,286.43 for the 311.7682 hectares (TCT No. T-31) and P21,608,215.28 for the 128.7161
hectares (TCT No. T-128).[7]
 
Not satisfied with the valuation, LBP filed on February 17, 2003, two separate petitions[8] for judicial
determination of just compensation before the Regional Trial Court of San Jose, Occidental Mindoro,
acting as a Special Agrarian Court, docketed as Agrarian Case No. R-1339 for TCT No. T-31 and
Agrarian Case No. R-1340 for TCT No. T-128, and raffled to Branch 46 thereof.
 
Petitioners filed separate Motions to Deposit the Preliminary Valuation Under Section 16(e) of Republic
Act (R.A.) No. 6657 (1988)[9] and Ad Cautelam Answer praying among others that LBP deposit the
preliminary compensation determined by the PARAD.
 
On March 31, 2003, the trial court issued an Order[10] granting petitioners motion, the dispositive
portion of which reads:
 
WHEREFORE, Ms. Teresita V. Tengco, of the Land Compensation
Department I (LCD I), Land Bank of the Philippines, is hereby ordered
pursuant to Section 16 (e) of RA 6657 in relation to Section 2,
Administrative Order No. 8, Series of 1991, to deposit the provisional
compensation as determined by the PARAD in cash and bonds, as follows:
 
1. In Agrarian Case No. R-1339, the amount of P 51,800,286.43, minus the
amount received by the Landowner;
2. In Agrarian Case No. R-1340, the amount of P 21,608,215.28, less the
amount of P 1,512,575.16, the amount already deposited.
 
Such deposit must be made with the Land Bank of the Philippines, Manila
within five (5) days from receipt of a copy of this order and to notify this
court of her compliance within such period.
 
Let this order be served by the Sheriff of this Court at the expense of the
movants.
 
SO ORDERED.[11]
 
LBPs motion for reconsideration was denied in a Resolution[12] dated May 26, 2003. The
following day, May 27, 2003, the trial court issued an Order[13] directing Ms. Teresita V. Tengco, LBPs
Land Compensation Department Manager, to deposit the amounts.
 
Thus, on June 17, 2003, LBP filed with the Court of Appeals a Petition for Certiorari and Prohibition
under Rule 65 of the Rules of Court with application for the issuance of a Temporary Restraining Order
and Writ of Preliminary Injunction docketed as CA-G.R. SP No. 77530.[14]
On June 27, 2003, the appellate court issued a 60-day temporary restraining order[15] and on
October 6, 2003, a writ of preliminary injunction.[16]
 
On May 26, 2004, the Court of Appeals rendered a Decision[17] in favor of the petitioners, the
dispositive portion of which reads:
 
WHEREFORE, premises considered, there being no grave abuse of
discretion, the instant Petition for Certiorari and Prohibition is DENIED.
Accordingly, the Order dated March 31, 2003, Resolution dated May 26,
2003, and Order dated May 27, 2003 are hereby AFFIRMED. The
preliminary injunction We previously issued is hereby LIFTED and
DISSOLVED.
 
SO ORDERED.[18]
The Court of Appeals held that the trial court correctly ordered LBP to deposit the amounts
provisionally determined by the PARAD as there is no law which prohibits LBP to make a deposit
pending the fixing of the final amount of just compensation. It also noted that there is no reason for
LBP to further delay the deposit considering that the DAR already took possession of the properties
and distributed the same to farmer-beneficiaries as early as 1972.
 
LBP moved for reconsideration which was granted. On October 27, 2005, the appellate court rendered
the assailed Amended Decision,[19] the dispositive portion of which reads:
 
Wherefore, in view of the prescription of a different formula in the case of
Gabatin which We hold as cogent and compelling justification necessitating
Us to effect the reversal of Our judgment herein sought to be reconsidered,
the instant Motion for Reconsideration is GRANTED, and Our May 26, 2004
Decision is hereby VACATED and ABANDONED with the end in view of
giving way to and acting in harmony and in congruence with the tenor of
the ruling in the case of Gabatin. Accordingly, the assailed rulings of the
Special Agrarian Court is (sic) commanded to compute and fix the just
compensation for the expropriated agricultural lands strictly in accordance
with the mode of computation prescribed (sic) Our May 26, 2004 judgment
in the case of Gabatin.
 
SO ORDERED.[20]
 
In the Amended Decision, the Court of Appeals held that the immediate deposit of the preliminary
value of the expropriated properties is improper because it was erroneously computed. Citing Gabatin
v. Land Bank of the Philippines,[21] it held that the formula to compute the just compensation should
be: Land Value = 2.5 x Average Gross Production x Government Support Price. Specifically, it held
that the value of the government support price for the corresponding agricultural produce (rice and
corn) should be computed at the time of the legal taking of the subject agricultural land, that is, on
October 21, 1972 when landowners were effectively deprived of ownership over their properties by
virtue of P.D. No. 27. According to the Court of Appeals, the PARAD incorrectly used the amounts of
P500 and P300 which are the prevailing government support price for palay and corn, respectively, at
the time of payment, instead of P35 and P31, the prevailing government support price at the time of
the taking in 1972.
 
Hence, this petition raising the following issues:
 
A. THE COURT A QUO HAS DECIDED THE CASE IN A WAY NOT IN ACCORD
WITH THE LATEST DECISION OF THE SUPREME COURT IN THE CASE OF
LAND BANK OF THE PHILIPPINES VS. HON. ELI G.C. NATIVIDAD, ET AL.,
G.R. NO. 127198, PROM. MAY 16, 2005; and[22]
 
B. THE COURT A QUO HAS, WITH GRAVE GRAVE ABUSE OF DISCRETION,
SO FAR DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF
JUDICIAL PROCEEDINGS, DECIDING ISSUES THAT HAVE NOT BEEN
RAISED, AS TO CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION.
[23]
 
Petitioners insist that the determination of just compensation should be based on the value of the
expropriated properties at the time of payment. Respondent LBP, on the other hand, claims that the
value of the realties should be computed as of October 21, 1972 when P.D. No. 27 took effect.
The petition is impressed with merit.
In the case of Land Bank of the Philippines v. Natividad,[24] the Court ruled thus:
 
Land Banks contention that the property was acquired for
purposes of agrarian reform on October 21, 1972, the time of the
effectivity of PD 27, ergo just compensation should be based on the value
of the property as of that time and not at the time of possession in 1993, is
likewise erroneous.  In Office of the President, Malacaang, Manila v. Court
of Appeals, we ruled that the seizure of the landholding did not take place
on the date of effectivity of PD 27 but would take effect on the payment of
just compensation.
 
The Natividad case reiterated the Courts ruling in Office of the President v. Court of
Appeals[25] that the expropriation of the landholding did not take place on the effectivity of P.D. No.
27 on October 21, 1972 but seizure would take effect on the payment of just compensation judicially
determined.
 
Likewise, in the recent case of Heirs of Francisco R. Tantoco, Sr. v. Court of Appeals,[26]
we held that expropriation of landholdings covered by R.A. No. 6657 take place, not on the effectivity
of the Act on June 15, 1988, but on the payment of just compensation.
 
In the instant case, petitioners were deprived of their properties in 1972 but have yet to
receive the just compensation therefor. The parcels of land were already subdivided and distributed to
the farmer-beneficiaries thereby immediately depriving petitioners of their use. Under the
circumstances, it would be highly inequitable on the part of the petitioners to compute the just
compensation using the values at the time of the taking in 1972, and not at the time of the payment,
considering that the government and the farmer-beneficiaries have already benefited from the land
although ownership thereof have not yet been transferred in their names. Petitioners were deprived of
their properties without payment of just compensation which, under the law, is a prerequisite before
the property can be taken away from its owners.[27] The transfer of possession and ownership of the
land to the government are conditioned upon the receipt by the landowner of the corresponding
payment or deposit by the DAR of the compensation with an accessible bank. Until then, title remains
with the landowner.[28]
 
Our ruling in Association of Small Landowners in the Philippines, Inc. v. Secretary of
Agrarian Reform[29] is instructive, thus:
 
It is true that P.D. No. 27 expressly ordered the emancipation
of tenant-farmer as October 21, 1972 and declared that he shall be
deemed the owner of a portion of land consisting of a family-sized farm
except that no title to the land owned by him was to be actually issued to
him unless and until he had become a full-fledged member of a duly
recognized farmers cooperative. It was understood, however, that full
payment of the just compensation also had to be made first, conformably
to the constitutional requirement.
 
When E.O. No. 228, categorically stated in its Section 1 that:
 
All qualified farmer-beneficiaries are now
deemed full owners as of October 21, 1972 of
the land they acquired by virtue of Presidential
Decree No. 27 (Emphasis supplied.)
it was obviously referring to lands already validly acquired under the said
decree, after proof of full-fledged membership in the farmers cooperatives
and full payment of just compensation. x x x
The CARP Law, for its part, conditions the transfer of
possession and ownership of the land to the government on receipt by the
landowner of the corresponding payment or the deposit by the DAR of the
compensation in cash or LBP bonds with an accessible bank. Until then,
title also remains with the landowner. No outright change of ownership is
contemplated either.
We also note that the expropriation proceedings in the instant case was initiated under
P.D. No. 27 but the agrarian reform process is still incomplete considering that the just compensation
to be paid to petitioners has yet to be settled. Considering the passage of R.A. No. 6657 before the
completion of this process, the just compensation should be determined and the process concluded
under the said law. Indeed, R.A. No. 6657 is the applicable law, with P.D. No. 27 and E.O. No. 228
having only suppletory effect.[30]
 
In Land Bank of the Philippines v. Court of Appeals,[31] we held that:
RA 6657 includes PD 27 lands among the properties which
the DAR shall acquire and distribute to the landless. And to facilitate the
acquisition and distribution thereof, Secs. 16, 17 and 18 of the Act should
be adhered to.
 
Section 18 of R.A. No. 6657 mandates that the LBP shall compensate the landowner in
such amount as may be agreed upon by the landowner and the DAR and the LBP or as may be finally
determined by the court as the just compensation for the land. In determining just compensation, the
cost of the acquisition of the land, the current value of like properties, its nature, actual use and
income, the sworn valuation by the owner, the tax declarations, and the assessment made by
government assessors shall be considered. The social and economic benefits contributed by the
farmers and the farmworkers and by the government to the property as well as the nonpayment of
taxes or loans secured from any government financing institution on the said land shall be considered
as additional factors to determine its valuation.[32]
 
Corollarily, we held in Land Bank of the Philippines v. Celada[33] that the above
provision was converted into a formula by the DAR through Administrative Order No. 05, S. 1998, to
wit:
 
Land Value (LV) = (Capitalized Net Income x 0.6) + (Comparable Sales x 0.3) + (Market
Value per Tax Declaration x 0.1)
 
Petitioners were deprived of their properties way back in 1972, yet to date, they have not yet received
just compensation. Thus, it would certainly be inequitable to determine just compensation based on
the guideline provided by P.D. No. 227 and E.O. No. 228 considering the failure to determine just
compensation for a considerable length of time. That just compensation should be determined in
accordance with R.A. No. 6657 and not P.D. No. 227 or E.O. No. 228, is important considering that
just compensation should be the full and fair equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and ample.[34]
 
WHEREFORE, premises considered, the petition is GRANTED. The assailed Amended Decision dated
October 27, 2005 of the Court of Appeals in CA-G.R. SP No. 77530 is REVERSED and SET ASIDE.
The Decision dated May 26, 2004 of the Court of Appeals affirming (a) the March 31, 2003 Order of
the Special Agrarian Court ordering the respondent Land Bank of the Philippines to deposit the just
compensation provisionally determined by the PARAD; (b) the May 26, 2003 Resolution denying
respondents Motion for Reconsideration; and (c) the May 27, 2003 Order directing Teresita V. Tengco,
respondents Land Compensation Department Manager to comply with the March 31, 2003 Order, is
REINSTATED. The Regional Trial Court of San Jose, Occidental Mindoro, Branch 46, acting as Special
Agrarian Court is ORDERED to proceed with dispatch in the trial of Agrarian Case Nos. R-1339 and R-
1340, and to compute the final valuation of the subject properties based on the aforementioned
formula.
 
SO ORDERED.
 
Republic of the PhilippinesSUPREME COURTManila
SECOND DIVISION
G.R. No. 118712 October 6, 1995
LAND BANK OF THE PHILIPPINES, petitioner, vs.COURT OF APPEALS, PEDRO L. YAP, HEIRS
OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP.,
respondents.
G.R. No. 118745 October 6, 1995
DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform,
petitioner, vs.COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO,
AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., ET AL., respondents.
 
FRANCISCO, R., J.:
It has been declared that the duty of the court to protect the weak and the underprivileged should not
be carried out to such an extent as deny justice to the landowner whenever truth and justice happen
to be on his side. 1 As eloquently stated by Justice Isagani Cruz:
. . . social justice — or any justice for that matter — is for the deserving, whether he be a millionaire
in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called upon
to tilt the balance in favor of the poor, to whom the Constitution fittingly extends its sympathy and
compassion. But never is it justified to prefer the poor simply because they are poor, or to reject the
rich simply because they are rich, for justice must always be served, for poor and rich alike, according
to the mandate of the law. 2
In this agrarian dispute, it is once more imperative that the aforestated principles be applied in its
resolution.
Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R. No.
118745) and Land Bank of the Philippines (G.R. No. 118712) following the adverse ruling by the Court
of Appeals in CA-G.R. SP No. 33465. However, upon motion filed by private respondents, the petitions
were ordered consolidated. 3
Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which
granted private respondents' Petition for Certiorari and Mandamus and ruled as follows:
WHEREFORE, premises considered, the Petition for Certiorari and Mandamus is hereby GRANTED:
a) DAR Administrative Order No. 9, Series of 1990 is declared null and void insofar as it provides for
the opening of trust accounts in lieu of deposits in cash or bonds;
b) Respondent Landbank is ordered to immediately deposit — not merely "earmark", "reserve" or
"deposit in trust" — with an accessible bank designated by respondent DAR in the names of the
following petitioners the following amounts in cash and in government financial instruments — within
the parameters of Sec. 18 (1) of RA 6657:
P 1,455,207.31 Pedro L. Yap
P 135,482.12 Heirs of Emiliano Santiago
P 15,914,127.77 AMADCOR;
c) The DAR-designated bank is ordered to allow the petitioners to withdraw the above-deposited
amounts without prejudice to the final determination of just compensation by the proper authorities;
and
d) Respondent DAR is ordered to 1) immediately conduct summary administrative proceedings to
determine the just compensation for the lands of the petitioners giving the petitioners 15 days from
notice within which to submit evidence and to 2) decide the cases within 30 days after they are
submitted for decision. 4
Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995, 5
denying their
motion for reconsideration.
Private respondents are landowners whose landholdings were acquired by the DAR and subjected to
transfer schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL,
Republic Act No. 6657).
Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and
payment of compensation for their land pursuant to the provisions of RA 6657, private respondents
filed with this Court a Petition for Certiorari and Mandamus with prayer for preliminary mandatory
injunction. Private respondents questioned the validity of DAR Administrative Order No. 6, Series of
1992 6 and DAR Administrative Order No. 9, Series of 1990, 7 and sought to compel the DAR to
expedite the pending summary administrative proceedings to finally determine the just compensation
of their properties, and the Landbank to deposit in cash and bonds the amounts respectively
"earmarked", "reserved" and "deposited in trust accounts" for private respondents, and to allow them
to withdraw the same.
Through a Resolution of the Second Division dated February 9, 1994, this Court referred the petition
to respondent Court of Appeals for proper determination and disposition.
As found by respondent court , the following are undisputed:
Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of title (TCTs) of
petitioner Yap were totally cancelled by the Registrar of Deeds of Leyte and were transferred in the
names of farmer beneficiaries collectively, based on the request of the DAR together with a
certification of the Landbank that the sum of P735,337.77 and P719,869.54 have been earmarked for
Landowner Pedro L. Yap for the parcels of lands covered by TCT Nos. 6282 and 6283, respectively,
and issued in lieu thereof TC-563 and TC-562, respectively, in the names of listed beneficiaries
(ANNEXES "C" & "D") without notice to petitioner Yap and without complying with the requirement of
Section 16 (e) of RA 6657 to deposit the compensation in cash and Landbank bonds in an accessible
bank. (Rollo, p. 6).
The above allegations are not disputed by any of the respondents.
Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are the owners of a
parcel of land located at Laur, NUEVA ECIJA with an area of 18.5615 hectares covered by TCT No. NT-
60359 of the registry of Deeds of Nueva Ecija, registered in the name of the late Emiliano F. Santiago;
that in November and December 1990, without notice to the petitioners, the Landbank required and
the beneficiaries executed Actual tillers Deed of Undertaking (ANNEX "B") to pay rentals to the
LandBank for the use of their farmlots equivalent to at least 25% of the net harvest; that on 24
October 1991 the DAR Regional Director issued an order directing the Landbank to pay the landowner
directly or through the establishment of a trust fund in the amount of P135,482.12, that on 24
February 1992, the Landbank reserved in trust P135,482.12 in the name of Emiliano F. Santiago.
(ANNEX "E"; Rollo, p. 7); that the beneficiaries stopped paying rentals to the landowners after they
signed the Actual Tiller's Deed of Undertaking committing themselves to pay rentals to the LandBank
(Rollo, p. 133).
The above allegations are not disputed by the respondents except that respondent Landbank claims 1)
that it was respondent DAR, not Landbank which required the execution of Actual Tillers Deed of
Undertaking (ATDU, for brevity); and 2) that respondent Landbank, although armed with the ATDU,
did not collect any amount as rental from the substituting beneficiaries (Rollo, p. 99).
Petitioner Agricultural Management and Development Corporation (AMADCOR, for brevity) alleges —
with respect to its properties located in San Francisco, Quezon — that the properties of AMADCOR in
San Francisco, Quezon consist of a parcel of land covered by TCT No. 34314 with an area of 209.9215
hectares and another parcel covered by TCT No. 10832 with an area of 163.6189 hectares; that a
summary administrative proceeding to determine compensation of the property covered by TCT No.
34314 was conducted by the DARAB in Quezon City without notice to the landowner; that a decision
was rendered on 24 November 1992 (ANNEX "F") fixing the compensation for the parcel of land
covered by TCT No. 34314 with an area of 209.9215 hectares at P2,768,326.34 and ordering the
Landbank to pay or establish a trust account for said amount in the name of AMADCOR; and that the
trust account in the amount of P2,768,326.34 fixed in the decision was established by adding
P1,986,489.73 to the first trust account established on 19 December 1991 (ANNEX "G"). With respect
to petitioner AMADCOR's property in Tabaco, Albay, it is alleged that the property of AMADCOR in
Tabaco, Albay is covered by TCT No. T-2466 of the Register of Deeds of Albay with an area of
1,629.4578 hectares'; that emancipation patents were issued covering an area of 701.8999 hectares
which were registered on 15 February 1988 but no action was taken thereafter by the DAR to fix the
compensation for said land; that on 21 April 1993, a trust account in the name of AMADCOR was
established in the amount of P12,247,217.83', three notices of acquisition having been previously
rejected by AMADCOR. (Rollo, pp. 8-9)
The above allegations are not disputed by the respondents except that respondent Landbank claims
that petitioner failed to participate in the DARAB proceedings (land valuation case) despite due notice
to it (Rollo, p. 100). 8
Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without
jurisdiction and with grave abuse of discretion because it permits the opening of trust accounts by the
Landbank, in lieu of depositing in cash or bonds in an accessible bank designated by the DAR, the
compensation for the land before it is taken and the titles are cancelled as provided under Section
16(e) of RA 6657. 9 Private respondents also assail the fact that the DAR and the Landbank merely
"earmarked", "deposited in trust" or "reserved" the compensation in their names as landowners
despite the clear mandate that before taking possession of the property, the compensation must be
deposited in cash or in bonds. 10
Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-
making power pursuant to Section 49 of RA 6657. 11 Moreover, the DAR maintained that the issuance
of the "Certificate of Deposit" by the Landbank was a substantial compliance with Section 16(e) of RA
6657 and the ruling in the case of Association of Small Landowners in the Philippines, Inc., et al. vs.
Hon. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 1989 (175 SCRA 343). 12
For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in
consonance with Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words
"reserved/deposited" were also used. 13
On October 20, 1994, the respondent court rendered the assailed decision in favor of private
respondents. 14 Petitioners filed a motion for reconsideration but respondent court denied the same. 15
Hence, the instant petitions.
On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745
alleging that the appeal has no merit and is merely intended to delay the finality of the appealed
decision. 16 The Court, however, denied the motion and instead required the respondents to file their
comments. 17
Petitioners submit that respondent court erred in (1) declaring as null and void DAR Administrative
Order No. 9, Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit in
cash or in bonds, and (2) in holding that private respondents are entitled as a matter of right to the
immediate and provisional release of the amounts deposited in trust pending the final resolution of the
cases it has filed for just compensation.
Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section
16(e) of RA 6657 referred merely to the act of depositing and in no way excluded the opening of a
trust account as a form of deposit. Thus, in opting for the opening of a trust account as the acceptable
form of deposit through Administrative Circular No. 9, petitioner DAR did not commit any grave abuse
of discretion since it merely exercised its power to promulgate rules and regulations in implementing
the declared policies of RA 6657.
The contention is untenable. Section 16(e) of RA 6657 provides as follows:
Sec. 16. Procedure for Acquisition of Private Lands —
xxx xxx xxx
(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. . . . (emphasis supplied)
It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere
does it appear nor can it be inferred that the deposit can be made in any other form. If it were the
intention to include a "trust account" among the valid modes of deposit, that should have been made
express, or at least, qualifying words ought to have appeared from which it can be fairly deduced that
a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an
expanded construction of the term "deposit".
The conclusive effect of administrative construction is not absolute. Action of an administrative agency
may be disturbed or set aside by the judicial department if there is an error of law, a grave abuse of
power or lack of jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the
spirit of a legislative enactment. 18 In this regard, it must be stressed that the function of promulgating
rules and regulations may be legitimately exercised only for the purpose of carrying the provisions of
the law into effect. The power of administrative agencies is thus confined to implementing the law or
putting it into effect. Corollary to this is that administrative regulations cannot extend the law and
amend a legislative enactment, 19 for settled is the rule that administrative regulations must be in
harmony with the provisions of the law. And in case there is a discrepancy between the basic law and
an implementing rule or regulation, it is the former that prevails. 20
In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations
when it issued Administrative Circular No. 9. There is no basis in allowing the opening of a trust
account in behalf of the landowner as compensation for his property because, as heretofore discussed,
Section 16(e) of RA 6657 is very specific that the deposit must be made only in "cash" or in "LBP
bonds". In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these
implementing regulations cannot outweigh the clear provision of the law. Respondent court therefore
did not commit any error in striking down Administrative Circular No. 9 for being null and void.
Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw the
amounts deposited in trust in their behalf pending the final resolution of the cases involving the final
valuation of their properties, petitioners assert the negative.
The contention is premised on the alleged distinction between the deposit of compensation under
Section 16(e) of RA 6657 and payment of final compensation as provided under Section 18 21 of the
same law. According to petitioners, the right of the landowner to withdraw the amount deposited in his
behalf pertains only to the final valuation as agreed upon by the landowner, the DAR and the LBP or
that adjudged by the court. It has no reference to amount deposited in the trust account pursuant to
Section 16(e) in case of rejection by the landowner because the latter amount is only provisional and
intended merely to secure possession of the property pending final valuation. To further bolster the
contention petitioners cite the following pronouncements in the case of "Association of Small
Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". 22
The last major challenge to CARP is that the landowner is divested of his property even before actual
payment to him in full of just compensation, in contravention of a well-accepted principle of eminent
domain.
xxx xxx xxx
The CARP Law, for its part conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR of
the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the
landowner. No outright change of ownership is contemplated either.
xxx xxx xxx
Hence the argument that the assailed measures violate due process by arbitrarily transferring title
before the land is fully paid for must also be rejected.
Notably, however, the aforecited case was used by respondent court in discarding petitioners'
assertion as it found that:
. . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led the
Supreme Court, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary of
Agrarian Reform (175 SCRA 343), to conclude that "payments of the just compensation is not always
required to be made fully in money" — even as the Supreme Court admits in the same case "that the
traditional medium for the payment of just compensation is money and no other" — the Supreme
Court in said case did not abandon the "recognized rule . . . that title to the property expropriated
shall pass from the owner to the expropriator only upon full payment of the just compensation." 23

(Emphasis supplied)

We agree with the observations of respondent court. The ruling in the "Association" case merely
recognized the extraordinary nature of the expropriation to be undertaken under RA 6657 thereby
allowing a deviation from the traditional mode of payment of compensation and recognized payment
other than in cash. It did not, however, dispense with the settled rule that there must be full payment
of just compensation before the title to the expropriated property is transferred.

The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA
6657 and determination of just compensation under Section 18 is unacceptable. To withhold the right
of the landowners to appropriate the amounts already deposited in their behalf as compensation for
their properties simply because they rejected the DAR's valuation, and notwithstanding that they have
already been deprived of the possession and use of such properties, is an oppressive exercise of
eminent domain. The irresistible expropriation of private respondents' properties was painful enough
for them. But petitioner DAR rubbed it in all the more by withholding that which rightfully belongs to
private respondents in exchange for the taking, under an authority (the "Association" case) that is,
however, misplaced. This is misery twice bestowed on private respondents, which the Court must
rectify.

Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e)
and final compensation under Section 18 for purposes of exercising the landowners' right to
appropriate the same. The immediate effect in both situations is the same, the landowner is deprived
of the use and possession of his property for which he should be fairly and immediately compensated.
Fittingly, we reiterate the cardinal rule that:

. . . within the context of the State's inherent power of eminent domain, just compensation means not
only the correct determination of the amount to be paid to the owner of the land but also the payment
of the land within a reasonable time from its taking. Without prompt payment, compensation cannot
be considered "just" for the property owner is made to suffer the consequence of being immediately
deprived of his land while being made to wait for a decade or more before actually receiving the
amount necessary to cope with his loss. 24 (Emphasis supplied)
The promulgation of the "Association" decision endeavored to remove all legal obstacles in the
implementation of the Comprehensive Agrarian Reform Program and clear the way for the true
freedom of the farmer. 25 But despite this, cases involving its implementation continue to multiply and
clog the courts' dockets. Nevertheless, we are still optimistic that the goal of totally emancipating the
farmers from their bondage will be attained in due time. It must be stressed, however, that in the
pursuit of this objective, vigilance over the rights of the landowners is equally important because
social justice cannot be invoked to trample on the rights of property owners, who under our
Constitution and laws are also entitled to protection. 26
Republic of the PhilippinesSUPREME COURTManila
SECOND DIVISION
G.R. No. 78214 December 5, 1988
YOLANDA CABALLES, petitioner, vs.DEPARTMENT OF AGRARIAN REFORM, HON. HEHERSON T.
ALVAREZ and BIENVENIDO ABAJON, respondents.
SARMIENTO, J.:
Before us is a petition for certiorari seeking the annulment of an Order issued by the public respondent
Ministry of Agrarian Reform , now the Department of Agrarian Reform (DAR), through its then
Minister, the Hon. Heherson Alvarez, finding the existence of a tenancy relationship between the
herein petitioner and the private respondent and certifying the criminal case for malicious mischief
filed by the petitioner against the private respondent as not proper for trial.
The facts as gathered by the MAR are as follows:

WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of merit and The landholding subject of the controversy, which consists of only sixty (60) square meters (20
the appealed decision is AFFIRMED in toto. meters x 3 meters) was acquired by the spouses Arturo and Yolanda Caballes, the latter being the
petitioner herein, by virtue of a Deed of Absolute Sale dated July 24, 1978 executed by Andrea Alicaba
SO ORDERED. Millenes This landholding is part of Lot No. 3109-C, which has a total area of about 500 square
meters, situated at Lawaan Talisay, Cebu. The remainder of Lot No. 3109-C was subseconsequently
sold to the said spouses by Macario Alicaba and the other members of the Millenes family, thus
consolidating ownership over the entire (500-square meter) property in favor of the petitioner.

In 1975, before the sale in favor of the Caballes spouses, private respondent Bienvenido Abajon
constructed his house on a portion of the said landholding, paying a monthly rental of P2.00 to the
owner, Andrea Millenes. The landowner likewise allowed Abajon to plant on a portion of the land,
agreeing that the produce thereof would be shared by both on a fitfy-fifty basis. From 1975-1977,
Abajon planted corn and bananas on the landholding. In 1978, he stopped planting corn but continued
to plant bananas and camote. During those four years, he paid the P2.00 rental for the lot occupied by
his house, and delivered 50% of the produce to Andrea Millenes.

Sometime in March 1979, after the property was sold, the new owners, Arturo and Yolanda Caballes,
told Abajon that the poultry they intended to build would be close to his house and pursuaded him to
transfer his dwelling to the opposite or southern portion of the landholding. Abajon offered to pay the
new owners rental on the land occupied by his house, but his offer was not accepted. Later, the new
owners asked Abajon to vacate the premises, saying that they needed the property. But Abajon
refused to leave. The parties had a confrontation before the Barangay Captain of Lawaan in Talisay,
Cebu but failed to reach an agreement. All the efforts exerted by the landowners to oust Abajon from
the landholding were in vain as the latter simply refused to budge.
On April 1, 1982, the landowner, Yolanda Caballes, executed an Affidavit stating that immediately
after she reprimanded Abajon for harvesting bananas and jackfruit from the property without her
knowledge, the latter, with malicious and ill intent, cut down the banana plants on the property worth
about P50.00. A criminal case for malicious mischief was filed against Abajon and which was docketed
as Criminal Case No. 4003. Obviously, all the planting on the property, including that of the banana
plants, had been done by Abajon. On September 30, 1982, upon motion of the defense in open court
pursuant to PD 1038, the trial court ordered the referral of the case to the Regional Office No. VII of
the then MAR for a preliminary determination of the relationship between the parties. As a result, the
Regional Director of MAR Regional VII, issued a certification 1 dated January 24, 1 983, stating that
said Criminal Case No. 4003 was not proper for hearing on the bases of the following findings:
That herein accused is a bona-fide tenant of the land owned by the complaining witness, which is
devoted to bananas;
That thin case is filed patently to harass and/or eject the tenant from his farmholding, which act is
prohibited by law; and
That this arose out of or is connected with agrarian relations.
From the said certification, the petitioner appealed to the then MAR, now the respondent DAR. Acting
on said appeal, the respondent DAR, through its then Minister Conrado Estrella, reversed the previous
certification in its Order 2 of February 3, 1986, declaring Criminal Case No. 4003 as proper for trial as
"the land involved is a residential lot consisting of only 60 square meters whereon the house of the
accused is constructed and within the industrial zone of the town as evinced from the Certification
issued by the Zoning Administrator of Talisay, Cebu."
Upon motion for reconsideration filed by Abajon, the respondent DAR, through its new Minister, herein
respondent Heherson Alvarez, issued an Orders dated November 15, 1986, setting aside the previous
Order 3 dated February 3, 1986, and certifying said criminal case as not proper for trial, finding the
existence of a tenancy relationship between the parties, and that the case was designed to harass the
accused into vacating his tillage.
In the summary investigation conducted by the DAR, the former landowner, Andrea Millenes, testified
that Bienvenido Abajon dutifully gave her 50% share of the produce of the land under his cultivation.
The grandson of Andrea Millenes, Roger Millenes, corroborated the testimony of the former, stating
that he received said share from Abajon. Roger Millenes further testified that the present owners
received in his presence a bunch of bananas from the accused representing ½ or 50% of the two
bunches of bananas gathered after Caballes had acquired the property. 4
From these factual findings, the DAR concluded that Abajon was a tenant of Andrea Millenes, the
former owner, who had testified that she shared the produce of the land with Abajon as truer thereof.
5
Thus, invoking Sec. 10 of RA 3844, as amended, which provides that "[T]he agricultural leasehold
relation under this Code shall not be extinguished by mere expiration of the term or period in a
leasehold contract nor by the sale, alienation or transfer of the legal possession of the landholding";
and that "(I)n case the agricultural lessor sells, alienates or transfers the legal possession of the
landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to
the obligations of the agricultural lessor," the MAR ruled that 'the new owners are legally bound to
respect the tenancy, notwithstanding their claim that the portion tilled by Abajon was small, consisting
merely of three (3) meters wide and twenty (20) meters long, or a total of sixty (60) square meters." 6
Hence, this petition for certiorari alleging that:
I. Respondents DAR and Hon. Heherson T. Alvarez committed "grave abuse of power and discretion
amounting to lack of jurisdiction" in holding that private respondent Abajon is an agricultural tenant
even if he is cultivating only a 60-square meter (3 x 20 meters) portion of a commercial lot of the
petitioner.
II. Public respondents gravely erred in holding that Criminal Case No. 4003 is not proper for trial and
hearing by the court. 7
We hold that the private respondent cannot avail of the benefits afforded by RA 3844, as amended. To
invest him with the status of a tenant is preposterous.
Section 2 of said law provides:
It is the policy of the State:
(1) To establish cooperative-cultivatorship among those who live and work on the land as tillers,
owner-cultivatorship and the economic family-size farm as the basis of Philippine agriculture and, as a
consequence, divert landlord capital in agriculture to industrial development;
xxx xxx xxx
RA 3844, as amended, defines an economic family-size farm as "an area of farm land that permits
efficient use of labor and capital resources of the farm family and will produce an income sufficient to
provide a modest standard of living to meet a farm family's needs for food, clothing, shelter, and
education with possible allowance for payment of yearly installments on the land, and reasonable
reserves to absorb yearly fluctuations in income." 8
The private respondent only occupied a miniscule portion (60 square meters) of the 500-square meter
lot. Sixty square meters of land planted to bananas, camote, and corn cannot by any stretch of the
imagination be considered as an economic family-size farm. Surely, planting camote, bananas, and
corn on a sixty-square meter piece of land can not produce an income sufficient to provide a modest
standard of living to meet the farm family's basic needs. The private respondent himself admitted that
he did not depend on the products of the land because it was too small, and that he took on carpentry
jobs on the side. 9 Thus, the order sought to be reviewed is patently contrary to the declared policy of
the law stated above.
The DAR found that the private respondent shared the produce of the land with the former owner,
Andrea Millenes. This led or misled, the public respondents to conclude that a tenancy relationship
existed between the petitioner and the private respondent because, the public respondents continue,
by operation of Sec. 10 of R.A. 3844, as amended, the petitioner new owner is subrogated to the
rights and substituted to the obligations of the supposed agricultural lessor (the former owner).
We disagree.
The essential requisites of a tenancy relationship are:
1. The parties are the landowner and the tenant;2. The subject is agricultural land;3. There is
consent;4. The purpose is agricultural production;5. There is personal cultivation; and6. There is
sharing of harvests.
All these requisites must concur in order to create a tenancy relationship between the parties. The
absence of one does not make an occupant of a parcel of land, or a cultivator thereof, or a planter
thereon, a de jure tenant. This is so because unless a person has established his status as a de jure
tenant, he is not entitled to security of tenure nor is he covered by the Land Reform Program of the
Government under existing tenancy laws. 10
Therefore, the fact of sharing alone is not sufficient to establish a tenancy relationship. Certainly, it is
not unusual for a landowner to accept some of the produce of his land from someone who plants
certain crops thereon. This is a typical and laudable provinciano trait of sharing or patikim, a native
way of expressing gratitude for favor received. This, however, does not automatically make the tiller-
sharer a tenant thereof specially when the area tilled is only 60, or even 500, square meters and
located in an urban area and in. the heart of an industrial or commercial zone at that. Tenancy status
arises only if an occupant of a parcel of land has been given its possession for the primary purpose of
agricultural production. The circumstances of this case indicate that the private respondent's status is
more of a caretaker who was allowed by the owner out of benevolence or compassion to live in the
premises and to have a garden of some sort at its southwestern side rather than a tenant of the said
portion.
Agricultural production as the primary purpose being absent in the arrangement, it is clear that the
private respondent was never a tenant of the former owner, Andrea Millenes. Consequently, Sec. 10 of
RA of 3844, as amended, does not apply. Simply stated, the private respondent is not a tenant of the
herein petitioner.
Anent the second assignment of error, the petitioner argues that since Abajon, is not an agricultural
tenant, the criminal case for malicious mischief filed against him should be declared as proper for trial
so that proceedings in the lower court can resume.
Notwithstanding our ruling that the private respondent is not a tenant of the petitioner, we hold that
the remand of the case to the lower court for the resumption of the criminal proceedings is not in the
interest of justice. Remand to the Municipal Court of Talisay, Cebu, would not serve the ends of justice
at all, nor is it necessary, because this High Tribunal is in a position to resolve with finality the dispute
before it. This Court, in the public interest, and towards the expeditious administration of justice, has
decided to act on the merits and dispose of the case with finality. 11
The criminal case for malicious mischief filed by the petitioner against the private respondent for
allegedly cutting down banana trees worth a measly P50.00 will take up much of the time and
attention of the municipal court to the prejudice of other more pressing cases pending therein.
Furthermore, the private respondent will have to incur unnecessary expenses to finance his legal
battle against the petitioner if proceedings in the court below were to resume. Court litigants have
decried the long and unnecessary delay in the resolution of their cases and the consequent costs of
such litigations. The poor, particularly, are victims of this unjust judicial dawdle, Impoverished that
they are they must deal with unjust legal procrastination which they can only interpret as harassment
or intimidation brought about by their poverty, deprivation, and despair. It must be the mission of the
Court to remove the misperceptions aggrieved people have of the nature of the dispensation of
justice. If justice can be meted out now, why wait for it to drop gently from heaven? Thus, considering
that this case involves a mere bagatelle the Court finds it proper and compelling to decide it here and
now, instead of further deferring its final termination.
As found by the DAR, the case for malicious mischief stemmed from the petitioner's affidavit stating
that after she reprimanded private respondent Abajon for harvesting bananas and jackfruit from the
property without her knowledge, the latter, with ill intent, cut the banana trees on the property worth
about P50.00.
This was corroborated by a certain Anita Duaban, a friend of the petitioner, who likewise executed an
affidavit to the effect that she saw the private respondent indiscriminately cutting the banana trees. 12
The Revised Penal Code, as amended, provides that "any person who shall deliberately cause to the
property of another any damage not falling within the terms of the next preceding chapter shall be
guilty of malicious mischief." 13
The elements of the crime of malicious mischief are:
1. The offender deliberately caused damage to the property of another;2. The damage caused did not
constitute arson or crimes involving destruction;3. The damage was caused maliciously by the
offender.
After a review of the facts and circumstances of this case, we rule that the aforesaid criminal case
against the private respondent be dismissed.
The private respondent can not be held criminally liable for malicious mischief in cutting the banana
trees because, as an authorized occupant or possessor of the land, and as planter of the banana trees,
he owns said crops including the fruits thereof The private respondent's possession of the land is not
illegal or in bad faith because he was snowed by the previous owners to enter and occupy the
premises. In other words, the private respondent worked the land in dispute with the consent of the
previous and present owners. Consequently, whatever the private respondent planted and cultivated
on that piece of property belonged to him and not to the landowner. Thus, an essential element of the
crime of malicious mischief, which is "damage deliberately caused to the property of another," is
absent because the private respondent merely cut down his own plantings.
WHEREFORE, the Order of public respondents dated November 15, 1986 is SET ASIDE and Criminal
Case No. 4003, is hereby DISMISSED. Let a copy of this decision be sent to the Municipal Trial Court
of Talisay, Cebu for appropriate action. This Decision is IMMEDIATELY EXECUTORY.
No costs.
SO ORDERED.
Republic of the PhilippinesSUPREME COURTManila
FIRST DIVISION
 
G.R. No. 86186 May 8, 1992
RAFAEL GELOS, petitioner, vs.THE HONORABLE COURT OF APPEALS and ERNESTO ALZONA,
respondents.
Balagtas P. Ilagan for petitioner.
Emil Capulong, Jr., for private respondent.
 
CRUZ, J.:
The Court is asked to determine the real status of the petitioner, who claims to be a tenant of the
private respondent and entitled to the benefits of tenancy laws. The private respondent objects,
contending that the petitioner is only a hired laborer whose right to occupy the subject land ended
with the termination of their contract of employment.
The subject land is a 25,000 square meter farmland situated in Cabuyao, Laguna, and belonging
originally to private respondent Ernesto Alzona and his parents in equal shares. On July 5, 1970, they
entered into a written contract with petitioner Rafael Gelos employing him as their laborer on the land
at the stipulated daily wage of P5.00. 1 On September 4, 1973, after Alzona had bought his parents'
share and acquired full ownership of the land, he wrote Gelos to inform him of the termination of his
services and to demand that he vacate the property. Gelos refused and continued working on the
land.
On October 1, 1973, Gelos went to the Court of Agrarian Relations and asked for the fixing of the
agricultural lease rental on the property. He later withdrew the case and went to the Ministry of
Agrarian Reform, which granted his petition. For his part, Alzona filed a complaint for illegal detainer
against Gelos in the Municipal Court of Cabuyao, but this action was declared "not proper for trial" by
the Ministry of Agrarian Reform because of the existence of a tenancy relationship between the
parties. Alzona was rebuffed for the same reason when he sought the assistance of the Ministry of
Labor and later when he filed a complaint with the Court of Agrarian Relations for a declaration of non-
tenancy and damages against Gelos. On appeal to the Office of the President, however, the complaint
was declared proper for trial and so de-archived and reinstated.
After hearing, the Regional Trial Court of San Pablo City (which had taken over the Court of Agrarian
Relations under PB 129) rendered a decision dated April 21, 1987, dismissing the complaint. 2 It found
Gelos to be a tenant of the subject property and entitled to remain thereon as such. The plaintiff was
also held liable in attorney's fees and costs.
The decision was subsequently reversed by the Court of Appeals. In its judgment promulgated on
November 25, 1988, 3 it held that Gelos was not a tenant of the land in question and ordered him to
surrender it to Alzona. He was also held liable for the payment of P10,000.00 as attorney's fees and
the costs of the suit.
The basic question the petitioner now raises before the Court is essentially factual and therefore not
proper in a petition for review under Rule 45 of the Rules of Court. Only questions of law may be
raised in this kind of proceeding. The settled rule is that the factual findings of the Court of Appeals
are conclusive on even this Court as long as they are supported by substantial evidence. The
petitioner has not shown that his case comes under any of those rare exceptions on such findings may
be validly reversed by this Court.
It is true that in Talavera v. Court of Appeals, 4 we held that a factual conclusion made by the trial
court that a person is a tenant farmer, if it is supported by the minimum evidence demanded by law,
is final and conclusive and cannot be reversed by the appellate tribunals except for compelling
reasons. In the case at bar, however, we find with the respondent court that there was such a
compelling reason. A careful examination of the record reveals that, indeed, the trial court
misappreciated the facts when it ruled that the petitioner was a tenant of the private respondent.
The circumstance that the findings of the respondent court do not concur with those of the trial court
does not, of course, call for automatic reversal of the appellate court. Precisely, the function of the
appellate court is to review and, if warranted, reverse the findings of the trial court. Disagreement
between the two courts merely calls on us to make a specially careful study of their respective
decisions to determine which of them should be preferred as more conformable to the facts at hand.
The Court has made this careful study and will sustain the decision of the respondent court.
The contract of employment dated July 5, 1970, written in Tagalog and entitled "Kasunduan ng
Upahang Araw," reads pertinently as follows:
1. Ang Unang Panig ay siyang may-ari at nagtatangkilik ng isang lagay na lupa, sinasaka, na
tumatayo sa Nayon ng Baclaran, Cabuyao, Laguna, na siyang gagawa at sasaka sa lupa, samantalang
ang Ikalawang Panig ay magiging upahan at katulong sa paggawa ng lupa.
2. Ang Unang Panig ay gustong ipagpatuloy ang pagbubungkal at paggawa ng bukid na binabanggit sa
itaas at ang Ikalawang Panig ay may ibig na magpaupa sa paggawa sa halagang P5.00 sa bawat araw,
walong oras na trabaho gaya ng mga sumusunod: Patubigan ng linang; pagpapahalabas ng mga
pilapil; pagpapaaldabis sa unang araw ng pag-aararo; pagpapalinis ng damo sa ibabaw ng pilapil;
pagpapakamot (unang pagpapasuyod), pagpapahalang at pagpapabalasaw (ikalawa't ikatlong
pagpapasuyod); isang tao sa pagsasabog ng abono una sa pagpapantay ng linang; bago magtanim;
isang tao sa pagaalaga ng dapog; upa sa isang tao ng magbobomba ng gamot laban sa pagkapit ng
mga kulisap (mayroon at wala); sa nag-we-weeder; upa sa mga tao na maggagamas at
magpapatubig ng palay; magsasapaw ng mga pilapil at iba pa.
3. Ang Unang Panig at ang Ikalawang Panig ay nagkasundo na ang huli ay gagawa sa bukid ayon sa
nabanggit sa itaas bilang katulong at upahan lamang. Ang Unang Panig bukod sa sila ang gagawa at
magsasaka ay maaaring umupa ng iba pang tao manggagawa sa upahang umiiral sang-ayon sa batas
katulad ng pag-aararo, pagpapahulip, pagpapagamas, pagbobomba, pagweweeder, pagsasabog ng
abono, pagbobomba ng gamot, pagpapatubig at iba pang mga gawain. Maaaring alisin ang Ikalawang
Panig sa pagpapatrabaho sa ano mang oras ng Unang Panig.
4. Ipinatatanto ng Ikalawang Panig na siya ay hindi kasama sa bukid kundi upahan lamang na
binabayaran sa bawa't araw ng kanyang paggawa sa bukid na nabanggit.
It is noted that the agreement provides that "ang Ikalawang Panig (meaning Gelos) ay may ibig na
magpaupa sa paggawa sa halagang P5.00 sa bawa't araw, walong oras na trabaho" (The Second Party
desires to lease his services at the rate of P5.00 per day, eight hours of work) and that "Ipinatatanto
ng Ikalawang Panig na siya ay hindi kasama sa bukid kundi upahan lamang na binabayaran sa bawa't
araw ng kanyang paggawa sa bukid na nabanggit.'' (The Second Party makes it known that he is not a
farm tenant but only a hired laborer who is paid for every day of work on the said farm.)
These stipulations clearly indicate that the parties did not enter into a tenancy agreement but only a
contract of employment. The agreement is a lease of services, not of the land in dispute. This
intention is quite consistent with the undisputed fact that three days before that agreement was
concluded, the former tenant of the land, Leocadio Punongbayan, had executed an instrument in
which he voluntarily surrendered his tenancy rights to the private respondent. 5 It also clearly
demonstrates that, contrary to the petitioner's contention, Alzona intended to cultivate the land
himself instead of placing it again under tenancy.
The petitioner would now disavow the agreement, but his protestations are less than convincing. His
wife's testimony that he is illiterate is belied by his own testimony to the contrary in another
proceeding. 6 Her claim that they were tricked into signing the agreement does not stand up against
the testimony of Atty. Santos Pampolina, who declared under his oath as a witness (and as an
attorney and officer of the court) that he explained the meaning of the document to Gelos, who even
read it himself before signing it. 7 Atty. Pampolina said the agreement was not notarized because his
commission as notary public was good only for Manila and did not cover Laguna, where the document
was executed. 8 At any rate, the lack of notarization did not adversely affect the veracity and
effectiveness of the agreement, which, significantly, Gelos and his wife do not deny having signed.
Gelos points to the specific tasks mentioned in the agreement and suggests that they are the work of
a tenant and not of a mere hired laborer. Not so. The work specified is not peculiar to tenancy. What a
tenant may do may also be done by a hired laborer working under the direction of the landowner, as
in the case at bar. It is not the nature of the work involved but the intention of the parties that
determines the relationship between them.
As this Court has stressed in a number of cases, 9 "tenancy is not a purely factual relationship
dependent on what the alleged tenant does upon the land. It is also a legal relationship. The intent of
the parties, the understanding when the farmer is installed, and as in this case, their written
agreements, provided these are complied with and are not contrary to law, are even more important."
Gelos presented receipts 10 for fertilizer and pesticides he allegedly bought and applied to the land of
the private respondent, but the latter insists that it was his brother who bought them, being an
agriculturist and in charge of the technical aspect of the farm. Moreover, the receipts do not indicate
to which particular landholding the fertilizers would be applied and, as pointed out by the private
respondent, could refer to the other parcels of land which Gelos was tenanting.
The petitioner's payment of irrigation fees from 1980 to 1985 to the National Irrigation Administration
on the said landholding is explained by the fact that during the pendency of the CAR case, the
Agrarian Reform Office fixed a provisional leasehold rental after a preliminary finding that Gelos was
the tenant of the private respondent. As such, it was he who had to pay the irrigation fees.
Incidentally, Section 12, subpar. (r) of PD 946 provides that the Secretary's determination of the
tenancy relationship is only preliminary and cannot be conclusive on the lower court.
It is noteworthy that, except for the self-serving testimony of the petitioner's wife, the records of this
case are bereft of evidence regarding the sharing of harvest between Gelos and Alzona. No less
importantly, as the Court of Appeals observed, the petitioner has not shown that he paid rentals on
the subject property from 1970 to 1973, before their dispute arose.
A tenant is defined under Section 5(a) of Republic Act No. 1199 as a person who himself and with the
aid available from within his immediate farm household cultivates the land belonging to or possessed
by another, with the latter's consent, for purposes of production, sharing the produce with the
landholder under the share tenancy system, or paying to the landholder a price-certain or
ascertainable in produce or in money or both, under the leasehold tenancy system . (Emphasis
supplied)
For this relationship to exist, it is necessary that: 1) the parties are the landowner and the tenant; 2)
the subject is agricultural land; 3) there is consent; 4) the purpose is agricultural production; 5) there
is personal cultivation; and 6) there is sharing of harvest or payment of rental. In the absence of any
of these requisites, an occupant of a parcel of land, or a cultivator thereof, or planter thereon, cannot
qualify as a de jure tenant. 11
On the other hand, the indications of an employer-employee relationship are: 1) the selection and
engagement of the employee; 2) the payment of wages; 3) the power of dismissal; and 4) the power
to control the employee's conduct –– although the latter is the most important element. 12
According to a well-known authority on the subject, 13 tenancy relationship is distinguished from farm
employer-farm worker relationship in that: "In farm employer-farm worker relationship, the lease is
one of labor with the agricultural laborer as the lessor of his services and the farm employer as the
lessee thereof. In tenancy relationship, it is the landowner who is the lessor, and the tenant the lessee
of agricultural land. The agricultural worker works for the farm employer and for his labor be receives
a salary or wage regardless of whether the employer makes a profit. On the other hand, the tenant
derives his income from the agricultural produce or harvest."
The private respondent, instead of receiving payment of rentals or sharing in the produce of the land,
paid the petitioner lump sums for specific kinds of work on the subject lot or gave him vales, or
advance payment of his wages as laborer thereon. The petitioner's wife claims that Alzona made her
husband sign the invoices all at one time because he allegedly needed them to reduce his income
taxes. Even assuming this to be true, we do not think that made the said payments fictitious,
especially so since the petitioner never denied having received them.
The other issue raised by the petitioner, which is decidedly legal, is easily resolved. There being no
tenancy relationship, the contention that the private respondent's complaint has prescribed under
Section 38 of R.A. 3844 must also fail. That section is not applicable. It must be noted that at the very
outset, Alzona rejected the petitioner's claim of agricultural tenancy and immediately instituted his
action for unlawful detainer in accordance with Section 1, Rule 70 of the Rules of Court. As it
happened, the said case was held not proper for trial by the Ministry of Agrarian Reform. He then
resorted to other remedies just so he could recover possession of his land and, finally, in 1979, he
yielded to the jurisdiction of the defunct Court of Agrarian Relations by filing there an action for
declaration of non-tenancy. The action, which was commenced in 1979, was within the ten-year
prescriptive period provided under Article 1144 of the Civil Code for actions based on a written
contract. *
The Court quotes with approval the following acute observations made by Justice Alicia Sempio-Diy:
It might not be amiss to state at this juncture that in deciding this case in favor of defendant, the
lower court might have been greatly influenced by the fact that defendant is a mere farmer who is
almost illiterate while plaintiff is an educated landlord, such that it had felt that it was its duty to be
vigilant for the protection of defendant's interests. But the duty of the court to protect the weak and
the underprivileged should not be carried out to such an extent as to deny justice to the landowner
whenever truth and justice happen to be on his side. Besides, defendant's economic position vis a vis
the plaintiff does not necessarily make him the underprivileged party in this case, for as testified by
plaintiff which defendant never denied, the small land in question was the only landholding of plaintiff
when he and his father bought the same, at which time he was just a lowly employee who did not
even have a house of his own and his father, a mere farmer, while defendant was the agricultural
tenant of another piece of land and also owns his own house, a sari sari store, and a caritela. Plaintiff
also surmised that it was only after defendant had been taken into its wings by the Federation of Free
Farmers that he started claiming to be plaintiff's agricultural tenant, presumably upon the Federation's
instigation and advice. And we cannot discount this possibility indeed, considering that during the
early stages of the proceedings this case, defendant even counter-proposed to plaintiff that he would
surrender the land in question to the latter if plaintiff would convey to him another piece of land
adjacent to the land in question, almost one ha. in area, that plaintiff had also acquired after buying
the land in question, showing that defendant was not as ignorant as he would want the Court to
believe and had the advice of people knowledgeable on agrarian matters.
This Court has stressed more than once that social justice –– or any justice for that matter –– is for
the deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in
case of reasonable doubt, we are called upon to tilt the balance in favor of the poor, to whom the
Constitution fittingly extends its sympathy and compassion. But never is it justified to prefer the poor
simply because they are poor, or to reject the rich simply because they are rich, for justice must
always be served, for poor and rich alike, according to the mandate of the law.
WHEREFORE, the challenged decision of the Court of Appeals is AFFIRMED and the petition is DENIED,
with costs against the petitioner. It is so ordered.
Republic of the PhilippinesSUPREME COURTManila
SECOND DIVISION
G.R. No. L-27797 August 26, 1974
TRINIDAD GABRIEL, plaintiff-appellee, vs.EUSEBIO PANGILINAN, defendant-appellant.
Mariano Manahan, Jr. for plaintiff-appellee.
Virgilio M. Pablo for defendant-appellant.
Armando M. Laki for movant.
ZALDIVAR, J.:p
This appeal from the decision, dated December 26, 1963, of the Court of First Instance of Pampanga
in its Civil Case No. 1823, was certified to this Court by the Court of Appeals for the reason that the
jurisdiction of an inferior court is involved.
During the pendency of this case before this Court, under date of April 29, 1972, Atty. Virgilio M.
Pablo, counsel for the appellant Eusebio Pangilinan, gave notice to this Court that said appellant died
on April 3, 1964, and was survived by his children, who are his legal heirs, namely: Salvador
Pangilinan, Santos Pangilinan, Mariano Pangilinan, Carlos Pangilinan and Pilar Pangilinan de Avante.
For the purposes of this case the appellant Eusebio Pangilinan, therefore, is substituted by his heirs
herein named.
Under date of November 20, 1973, Atty. Amando M. Laki filed a motion with this Court advising that
appellee Trinidad Gabriel died on June 14, 1967, and was survived by her heirs and successors-in-
interest, namely: Corazon O. Gabriel, married to Lamberto Ignacio; Ernesto O. Gabriel; Ester O.
Gabriel, married to Emmanuel Padua; Generoso O. Gabriel, Marciano O. Gabriel and Pablo O. Gabriel,
and prayed that appellee Trinidad Gabriel be substituted by her heirs herein named. By order of this
Court of December 4, 1973 the prayer for substitution was granted.
In its resolution dated April 19, 1967 certifying the case to this Court, the Court of Appeals made the
following findings, which We adopt:
On June 18, 1960 Trinidad Gabriel filed a complaint in the Court of First Instance of Pampanga against
Eusebio Pangilinan alleging that she is the owner of a fishpond situated in barrio Sta. Ursula, Betis,
Pampanga and measuring about 169,507 square meters; that sometime during the last war she
entered into an oral contract of lease thereof with the defendant on a year to year basis, i.e., from
January 1 to December 31, at a rental of P1,200, plus the amount of real estate taxes, payable in
advance in the month of January; that desiring to develop and cultivate the fishpond by herself, she
notified the defendant in a letter dated June 26, 1957 that she was terminating the contract as of
December 31, 1957; that upon request of the defendant, she extended the lease for another year;
that on November 19, 1958 she again wrote the defendant that he should surrender possession of the
fishpond on January 1, 1959, which demand he however ignored. Plaintiff accordingly prayed that the
defendant be ordered to restore the possession of the fishpond to her and to pay her P1,200, plus the
amount of real estate taxes, a year from 1959, attorney's fees and costs.
The defendant moved for the dismissal of the complaint on the ground that the trial court had no
jurisdiction over the case which properly pertains to the Court of Agrarian Relations, there being an
agricultural leasehold tenancy relationship between the parties. Upon opposition by the plaintiff, the
motion was denied. The defendant thereafter filed his answer with counterclaim alleging, inter alia,
that the land in question was originally leased to him, also verbally, by the plaintiff's father,
Potenciano Gabriel in 1923 for as long as the defendant wanted subject to the condition that he would
convert the major portion into a fishpond and the part which was already a fishpond be improved at
his expense which would be reimbursed by Potenciano Gabriel or his heirs at the termination of the
lease for whatever cause; that when the plaintiff became the owner of the property through
inheritance, she told the defendant that she would honor her father's contract with the defendant, and
likewise assured him that he could continue leasing the property, whose original rental of P400.00 a
year had been progressively increased to P1,200.00, for as long as he wanted since she was not in a
position to attend to it personally. As a special defense, the defendant reiterated the alleged lack of
jurisdiction of the trial court to take cognizance of the case.
On February 12, 1962 the trial court issued an order herein below quoted in full:
The plaintiff sinks to eject the defendant from the fishpond described in the complaint which is under
lease to the said defendant, who, however, refuses to vacate. Instead, he has impugned the
jurisdiction of this Court contending that the action should have been filed with the Court of Agrarian
Relations, which has original and exclusive jurisdiction, as their relationship is one of leasehold
tenancy.
After the motion to dismiss was denied on the basis of the allegations of the complaint, the parties
were ordered to adduce evidence for the purpose of determining which Court shall take cognizance of
the case.
It appears that the fishpond is presently in the possession of the defendant, who originally leased it
from the father of the plaintiff. Upon the death of the said father, the fishpond was inherited by the
plaintiff. It is now covered by T.C.T. No. 1634 and is registered in her name. It contains an area of
169,507.00 square meters. The rental is on a yearly basis.
It also appears that the defendant has ceased to work personally with the aid of helpers the aforecited
fishpond since 1956 he became ill and incapacitated. His daughter, Pilar Pangilinan, took over. She
testified that she helps her father in administering the leased property, conveying his instructions to
the workers, Urbano Maninang, Isidro Bernal and Marciano Maninang. The names of Ire, Juan and
Aguedo Viada have been mentioned as the laborers who were paid for the repair of the dikes.
Bernardo Cayanan, a nephew of the defendant, acts as the watcher. He has lived separately since he
got married. Excepting Pilar Pangilinan. who is residing near the fishpond, the other children of the
defendant are all professions; a lawyer, an engineer, and a priest all residing in Manila. None of these
persons has been seen working on the fishpond.
The above are the material and pertinent facts upon which we enter this order.
After a study of the facts and in the light of the provisions of the Tenancy Law, Republic Act No. 1199,
particularly Sections 4 and 9, as amended. it seems clear that his case does not fall within the purview
of said Act. The lease contract is manifestly a civil lease governed by the New Civil Code. Considering
the area of the fishpond, 16 hectares, more or less, the fact that neither the defendant, who is
physically incapacitated, or his daughter is Personally cultivating the fishpond or through the
employment of mechanical farm implements, and the further fact that the persons named above are
not members of the immediate farm household of the defendant, the conclusion is that no tenancy
relationship exists between the plaintiff and the defendant as defined by Republic Act No. 1199, as
amended.
We are, therefore, of the opinion and so hold that this Court is vested with jurisdiction to try and
decide this case. After this order has become final, the plaintiff may request for the setting of the
initial trial.
The defendant does not contest the findings of facts therein made by the trial court.
After the parties adduced their respective evidence on the merits, decision was rendered wherein the
trial court Pursuant to Article 1197 of the Civil Code, fixed the period of the low up to June 30, 1964,
the defendant on said date to surrender possession of the fishpond to the plaintiff and to pay the
rentals due the latter. The plaintiff, on her part, was required upon surrender of on to her, to pay the
defendant the sum of P1,000.00 as reimbursement of the expenses he incurred in improving the
fishpond, and upon failure by either party to pay the amount due the other, the same would bear
interest at the legal rate until full payment is made.
A reconsideration by the defendant having been denied, he appealed to this Court and assigned the
following errors:
1. The lower court erred in considering the relationship of appellee and appellant as that of a civil
lease, in accordance with the Civil Code of the Philippines and not a leasehold tenancy under Rep. Act
No. 1199 as amended.
2. The lower court erred in not holding that the Court of First Instance is without jurisdiction, the cue
being that of an agrarian relation in nature pursuant to Rep Act. NO. 1199 as amended.
3. The lower court erred in appreciating the evidence of the appellant particularly the basis for the
expenditure for the development of the fishpond in question.
4. The lower court erred in rendering judgment in favor of the appellant in them easily amount of one
thousand pesos for reimbursement and for seven hundred pesos for the cost of the floodgate.
Anent the question of jurisdiction, it is an admitted fact that plaintiff leased the fishpond to the
defendant in 1943 without a fixed term, the annual rental payable at the end of the year (Exhibit C,
Deposition of plaintiff, Dec. 13, 1962, pp. 2 and 3). It is likewise undisputed that the work in the
fishpond consisted in letting out the water so algae (lumut) would grow or if algae would not grow,
getting some from the river and putting them in the fishpond, changing the dirty water with fresh
water, repairing leaks in the dikes, and planting of fingerlings and attending to them; that these were
done by defendant, with some help; that he personally attended to the fishpond until 1956 when he
became ill; that thereafter his nephew Bernardo Cayanan, who was living with him, helped in the work
to be done in the fishpond and his daughter Pilar Pangilinan helped in the management, conveying his
instructions to the workers (t.s.n., pp. 4-8, Magat).
Upon the foregoing facts, the defendant insists that the relationship between the parties is an
agricultural leasehold tenancy governed by Republic Act No. 1199, as amended, pursuant to section
35 of Republic Act No. 3844, and the present case is therefore within the original and exclusive
jurisdiction of the Court of Agrarian Relations. Plaintiff, on the other hand, maintains in effect that
since defendant has ceased to work the fishpond personally or with the aid of the members of his
immediate farm household (Section 4, Republic Act No. 1199) the tenancy relationship between the
parties has been extinguished (Section 9, id.) and become of civil lease and therefore the trial court
properly assumed jurisdiction over the case.
It does appear that the controversy on the issue of jurisdiction calls for the interpretation of cultivating
or working the land by the tenant personally or with the aid of the members of his immediate farm
household. 1
Those are the findings and conclusions of facts made by the Court of Appeals which, as a general rule,
bind this Court. 2
1. Let Us now discuss the issues raised in this appeal. First, was the relationship between the appellee
and appellant a leasehold tenancy or a civil law lease?
There are important differences between a leasehold tenancy and a civil law lease. The subject matter
of leasehold tenancy is limited to agricultural land; that of civil law lease may be either rural or urban
property. As to attention and cultivation, the law requires the leasehold tenant to personally attend to,
and cultivate the agricultural land, whereas the civil law lessee need not personally cultivate or work
the thing leased. As to purpose, the landholding in leasehold tenancy is devoted to agriculture,
whereas in civil law lease, the purpose may be for any other lawful pursuits. As to the law that
governs, the civil law lease is governed by the Civil Code, whereas leasehold tenancy is governed by
special laws. 3
In order that leasehold tenancy under the Agricultural Tenancy Act may exist, the following requisites
must concur.
1. That the land worked by the tenant is an agricultural land;
2. That the land is susceptible of cultivation by a single person together with members of his
immediate farm household;
3. That the land must be cultivated by the tenant either personally or with the aid of labor available
from members of his immediate farm household;
4. That the land belongs to another; and
5. That the use of the land by the tenant is for a consideration of a fixed amount in money or in
produce or in both. 4
Were the foregoing requisites present in the instant case?
There is no doubt that the land in question is agricultural land. It is a fishpond and the Agricultural
Tenancy Act, which refers to "agricultural land", specifically mentions fishponds and prescribes the
consideration for the use thereof. Thus Section 46(c) of said Act provides that "the consideration for
the use of sugar lands, fishponds, salt beds and of lands devoted to the raising of livestock shall be
governed by stipulation between the parties". This Court has already ruled that "land in which fish is
produced is classified as agricultural land." 5 The mere fact, however, that a person works an
agricultural land does not necessarily make him a leasehold tenant within the purview of section 4 of
Republic Act No. 1199. He may still be a civil law lessee unless the other requisites as above
enumerated are complied with.
Regarding the second requisite, it is to be noted that the land in question has an area of 169,507
square meters, or roughly 17 hectares of fishpond. The question of whether such a big parcel of land
is susceptible of being worked by the appellant's family or not has not been raised, and We see no
need of tarrying on this point. So, We pass to the third requisite, to wit, whether the tenant himself
personally or with the aid of his immediate family worked the land.
Assuming that appellant had previously entered in 1923 into an agreement of leasehold tenancy with
Potenciano Gabriel, appellee's father, such tenancy agreement was severed in 1956 when he ceased
to work the fishpond personally because he became ill and incapacitated. Not even did the members of
appellant's immediate farm household work the land in question. Only the members of the family of
the tenant and such other persons, whether related to the tenant or not, who are dependent upon him
for support and who usually help him to operate the farm enterprise are included in the term
"immediate farm household" 6 The record shows who helped work the land in question, and We quote:
It also appears that the defendant has ceased to work personally with the aid of helpers the aforecited
fishpond since 1956 when he became ill and incapacitated. His daughter, Pilar Pangilinan took over.
She testified that she helps her father in administering the leased property, conveying his instructions
to the workers, Urbano Maninang, Isidro Bernal and Marciano Maninang. The names of Ire, Juan and
Aguedo Viada have been mentioned as the laborers who were paid for the repair of the dikes.
Bernardo Cayanan, a nephew of the defendant, acts as the watcher. He has lived separately since he
got married. Excepting Pilar Pangilinan, who is residing near the fishpond, the other children of the
defendant are all professionals: a lawyer, an engineer, and a priest — all residing in Manila. None of
these persons has been seen working on the fishpond. 7
The law is explicit in requiring the tenant and his immediate family to work the land. Thus Section 5
(a) of Republic Act No. 1199, as amended, defines a "tenant" as a person who, himself and with the
aid available from within his immediate farm household, cultivates the land belonging to, or possessed
by, another, with the latter's consent for purposes of production sharing the produce with the
landholder under the share tenancy system, or paying to the landholder a price certain in produce or
in money or both, under the leasehold tenancy system. Section 8 of the same Act limits the relation of
landholder and tenant to the person who furnishes the land and to the person who actually works the
land himself with the aid of labor available from within his immediate farm household. Finally, Section
4 of the same Act requires for the existence of leasehold tenancy that the tenant and his immediate
farm household work the land. It provides that leasehold tenancy exists when a person, who either
personally or with the aid of labor available from members of his immediate farm household,
undertakes to cultivate a piece of agricultural land susceptible of cultivation by a single person
together with members of his immediate farm household, belonging to, or legally possessed by,
another in consideration of a fixed amount in money or in produce or in both.
A person, in order to be considered a tenant, must himself and with the aid available from his
immediate farm household cultivate the land. Persons, therefore, who do not actually work the land
cannot be considered tenants; 8 and he who hires others whom he pays for doing the cultivation of the
land, ceases to hold, and is considered as having abandoned the land as tenant within the meaning of
sections 5 and 8 of Republic Act. No. 1199, and ceases to enjoy the status, rights, and privileges of
one.
We are, therefore, constrained to agree with the court a quo that the relationship between the
appellee Trinidad Gabriel and appellant Eusebio Pangilinan was not a leasehold tenancy under Republic
Act No. 1199. Hence, this case was not within the original and exclusive jurisdiction of the Court of
Agrarian Relations. 9
2. Regarding the second assignment of error, We accordingly rule that the Court of First Instance
correctly assumed jurisdiction over the case at bar, this being a case of civil law lease.
3. We deem it unnecessary to discuss the third and fourth assigned errors as these are issues
involving findings of facts which have been settled by the lower court, and unless there is grave abuse
of discretion, which we do not find in the record of the case, We shall not venture to discuss the merits
of the factual findings of the court a quo.
IN VIEW OF THE FOREGOING, the decision of the Court of First Instance of Pampanga in its Civil Case
No. 1823, appealed from, is affirmed, with costs against the appellants.
This decision should apply to the heirs and successors-in-interest of the original parties, as named in
this decision. In consonance with the decision of the lower court, the heirs and successors-in-interest
of appellant Eusebio Pangilinan should deliver the possession of the fishpond in question to the heirs
and successors-in-interest of appellee Trinidad Gabriel; and said heirs and successors-in-interest of
appellant Eusebio Pangilinan should pay the heirs and successors-in-interest of appellee Trinidad
Gabriel the accrued rentals. From January 1, 1960, at the rate of P1,200.00 a year, until the actual
delivery of the possession of the fishpond as herein ordered, with interest at the legal rate until full
payment is made.
IT IS SO ORDERED.
Republic of the Philippines
SUPREME COURT
SECOND DIVISION
G.R. No. 132477 August 31, 2005
JOSE LUIS ROS, ANDONI F. ABOITIZ, XAVIER ABOITIZ, ROBERTO E. ABOITIZ, ENRIQUE
ABOITIZ, MATTHIAS G. MENDEZONA, CEBU INDUSTRIAL PARK DEVELOPERS, INC. and FBM
ABOITIZ MARINE, INC., Petitioners, 
vs.
DEPARTMENT OF AGRARIAN REFORM, HON. ERNESTO GARILAO, in his capacity as DAR
Secretary, and DIR. JOSE LLAMES, in his capacity as Director of DAR-Regional 7, Respondent.
DECISION
CHICO-NAZARIO, J.:
Petitioners are the owners/developers of several parcels of land located in Arpili, Balamban, Cebu. By
virtue of Municipal Ordinance No. 101 passed by the Municipal Council of Balamban, Cebu, these lands
were reclassified as industrial lands.1 On 03 April 1995, the Provincial Board of Cebu approved
Balamban’s land use plan and adopted en toto Balamban’s Municipal Ordinance No. 101 with the
passage of Resolution No. 836-95 and Provincial Ordinance No. 95-8, respectively.2 As part of their
preparation for the development of the subject lands as an industrial park, petitioners secured all the
necessary permits and appropriate government certifications.3
Despite these permits and certifications, petitioner Matthias Mendezona received a letter from Mr. Jose
Llames, Director of the Department of Agrarian Reform (DAR) Regional Office for Region 7, informing
him that the DAR was disallowing the conversion of the subject lands for industrial use and directed
him to cease and desist from further developments on the land to avoid the incurrence of civil and
criminal liabilities.4
Petitioners were thus constrained to file with the Regional Trial Court (RTC) of Toledo City a Complaint
dated 29 July 1996 for Injunction with Application for Temporary Restraining Order and a Writ of
Preliminary Injunction, docketed as Civil Case No. T-590.5 In an order6 dated 12 August 1996, the
RTC, ruling that it is the DAR which has jurisdiction, dismissed the Complaint for lack of
jurisdiction.7 It justified the dismissal in this wise:
A perusal of Section 20 of the Local Government Code expressly provides that the Municipalities
through an Ordinance by the Sanggunian may authorize the reclassification of the agricultural land
within their area into non-agricultural. Paragraph (e) of the aforesaid Section, provides further: that
nothing in this Section shall be construed as repealing or modifying in any manner the provision of
Republic Act 6657. In an opinion of the Secretary of Justice, quoted: With respect of (sic) conversion
of agricultural land to non-agricultural uses the authority of the DAR to approve the same may be
exercise (sic) only from the date of the effectivity of the Agrarian Reform Law on June 15, 1988. It
appears that the petitioners had applied for conversion on June 13, 1995 and therefore the petitioner
(sic) are estopped from questioning the authority and jurisdiction of the Department of Agrarian
Reform. The application having been filed after June 15, 1988, the reclassification by the Municipal
Council of Balamban was just a step in the conversion of the aforestated lands according to its
purpose. Executive Order No. 129-A, Section 5, "The Department shall be responsible for
implementing Comprehensive Agrarian Reform and for such purpose it is authorized to (J) approve or
disapprove the conversion, restructuring or readjustment of agricultural land into non-agricultural
uses." Said Executive Order amended Section 36 of Republic Act No. 3644 which clearly mandates
that the DAR Secretary (sic) approve or disapprove conversion are not impliedly repealed. In fact,
under Section 75 of Republic Act 6657 the above laws and other laws not inconsistent of (sic) this act
shall have suppletory effect. Further, Section 68 of Republic Act 6657 provides: No injunction,
restraining order, prohibition or mandamus shall be issued by the lower court against the Department
of Agrarian Reform, DENR and Department of Justice in their implementation of the program. With this
provision, it is therefore clear (sic) when there is conflict of laws determining whether the Department
of Agrarian Reform has been exclusively empowered by law to approve land conversion after June 15,
1988 and (sic) the final ruling falls only with the Supreme Court or Office of the President.
WHEREFORE, in view of the foregoing, the Application for Restraining Order is hereby ordered DENIED
and the main case is DISMISSED, this Court having no jurisdiction over the same.8
In an order dated 18 September 1996, the trial court denied the motion for reconsideration filed by
the petitioners.9Petitioners filed before this Court a Petition for Review on Certiorari with application
for Temporary Restraining Order and Writ of Preliminary Injunction.10 In a resolution11 dated 11
November 1996, this Court referred the petition to the Court of Appeals.12 Petitioners moved for a
reconsideration of the said resolution but the same was denied in a resolution dated 27 January
1997.13
At the Court of Appeals, the public respondents were ordered14 to file their Comments on the petition.
Two sets of comments from the public respondents, one from the Department of Agrarian Reform
Provincial Office15 and another from the Office of the Solicitor General,16 were submitted, to which
petitioners filed their Consolidated Reply.17
On 02 December 1997, the Court of Appeals rendered a decision18 affirming the Order of Dismissal
issued by the RTC.19 A motion for reconsideration filed by the petitioners was denied in a resolution
dated 30 January 1998.20
Hence, this petition.
The following issues21 are raised by the petitioners for resolution:
(a) Whether or not the reclassification of the subject lands to industrial use by the Municipality of
Balamban, Cebu pursuant to its authority under Section 20(a) of Republic Act No. 7160 or the Local
Government Code of 1991 (the "LGC") has the effect of taking such lands out of the coverage of the
CARL and beyond the jurisdiction of the DAR;
(b) Whether or not the Complaint for Injunction may be dismissed under the doctrine of primary
jurisdiction;
(c) Whether or not the Complaint for Injunction is an appropriate remedy against the order of the DAR
enjoining development works on the subject lands;
(d) Whether or not the Regional Trial Court of Toledo City had authority to issue a writ of injunction
against the DAR.
In sum, petitioners are of the view that local governments have the power to reclassify portions of
their agricultural lands, subject to the conditions set forth in Section 202223of the Local Government
Code. According to them, if the agricultural land sought to be reclassified by the local government is
one which has already been brought under the coverage of the Comprehensive Agrarian Reform Law
(CARL) and/or which has been distributed to agrarian reform beneficiaries, then such reclassification
must be confirmed by the DAR pursuant to its authority under Section 6522 of the CARL, in order for
the reclassification to become effective. If, however, the land sought to be reclassified is not covered
by the CARL and not distributed to agrarian reform beneficiaries, then no confirmation from the DAR is
necessary in order for the reclassification to become effective as such case would not fall within the
DAR’s conversion authority. Stated otherwise, Section 65 of the CARL does not, in all cases, grant the
DAR absolute, sweeping and all-encompassing power to approve or disapprove reclassifications or
conversions of all agricultural lands. Said section only grants the DAR exclusive authority to approve
or disapprove conversions of agricultural lands which have already been brought under the coverage
of the CARL and which have already been distributed to farmer beneficiaries.
The petition lacks merit.
After the passage of Republic Act No. 6657, otherwise known as Comprehensive Agrarian Reform
Program, agricultural lands, though reclassified, have to go through the process of conversion,
jurisdiction over which is vested in the DAR. However, agricultural lands already reclassified before the
effectivity of Rep. Act No. 6657 are exempted from conversion.
Department of Justice Opinion No. 44, Series of 1990, provides:
". . . True, the DAR’s express power over land use conversion is limited to cases in which agricultural
lands already awarded have, after five years, ceased to be economically feasible and sound for
agricultural purposes, or the locality has become urbanized and the land will have a greater economic
value for residential, commercial or industrial purposes. But to suggest that these are the only
instances when the DAR can require conversion clearances would open a loophole in R.A. No. 6657,
which every landowner may use to evade compliance with the agrarian reform program. Hence, it
should logically follow from the said department’s express duty and function to execute and enforce
the said statute that any reclassification of a private land as a residential, commercial or industrial
property should first be cleared by the DAR."
The requirement that agricultural lands must go through the process of conversion despite having
undergone reclassification was underscored in the case of Alarcon v. Court of Appeals,24 where it was
held that reclassification of land does not suffice:
In the case at bar, there is no final order of conversion. The subject landholding was merely
reclassified. Conversion is different from reclassification. Conversion is the act of changing the current
use of a piece of agricultural land into some other use as approved by the Department of Agrarian
Reform. Reclassification, on the other hand, is the act of specifying how agricultural lands shall be
utilized for non-agricultural uses such as residential, industrial, commercial, as embodied in the land
use plan, subject to the requirements and procedure for land use conversion. Accordingly, a mere
reclassification of agricultural land does not automatically allow a landowner to change its use and
thus cause the ejectment of the tenants. He has to undergo the process of conversion before he is
permitted to use the agricultural land for other purposes.
Rep. Act No. 6657 took effect on 15 June 1988. Municipal Ordinance No. 101 of Balamban, Cebu,
which reclassified the subject lands, was passed on 25 March 1992, and Provincial Ordinance No. 95-8
of the Provincial Board of Cebu, which adopted Municipal Ordinance No. 101, was passed on 03 April
1995, long after Rep. Act No. 6657 has taken effect. Section 4 of Rep. Act No. 6657 provides:
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.
...
(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised
or that can be raised thereon.
To further clarify any doubt on its authority, the DAR issued Administrative Order No. 12 dated
October 1994 which reads:
Administrative Order No. 12
Series of 1994
SUBJECT: CONSOLIDATED AND REVISED RULES AND PROCEDURES GOVERNING CONVERSION OF
ARICULTURAL LANDS TO NON-AGRICULTURAL USES
I. PREFATORY STATEMENT
The guiding principles on land use conversion is to preserve prime agricultural lands. On the other
hand, conversion of agricultural lands, when coinciding with the objectives of the Comprehensive
Agrarian Reform Law to promote social justice, industrialization, and the optimum use of land as a
national resource for public welfare, shall be pursued in a speedy and judicious manner.
To rationalize these principles, and by virtue of Republic Act (R.A.) No. 3844, as amended, Presidential
Decree (P.D.) No. 27, P.D. No. 946, Executive Order (E.O.) No. 129-A and R.A. No. 6657, the
Department of Agrarian Reform (DAR) has issued several policy guidelines to regulate land use
conversion. This Administrative Order consolidates and revises all existing implementing guidelines
issued by the DAR, taking into consideration, other Presidential issuances and national policies related
to land use conversion.
II. LEGAL MANDATE
A. The Department of Agrarian Reform (DAR) is mandated to "approve or disapprove applications for
conversion, restructuring or readjustment of agricultural lands into non-agricultural uses," pursuant to
Section 4(i) of Executive Order No. 129-A, Series of 1987.
B. Section 5(i) of E.O. No. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve or
disapprove applications for conversion of agricultural lands for residential, commercial, industrial, and
other land uses.
C. Section 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988,
likewise empowers the DAR to authorize under certain conditions, the reclassification or conversion of
agricultural lands.
D. Section 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President, provides
that "action on applications for land use conversion on individual landholdings shall remain as the
responsibility of the DAR, which shall utilize as its primary reference, documents on the
comprehensive land use plans and accompanying ordinances passed upon and approved by the local
government units concerned, together with the National Land Use Policy, pursuant to R.A. No. 6657
and E.O. No. 129-A."
III. DEFINITION OF TERMS
A. Agricultural land refers to land devoted to agricultural activity and not classified as mineral, forest,
residential, commercial or industrial land (Section 3[c], R.A. No. 6657).
B. Conversion is the act of changing the current use of a piece of agricultural land into some other
use.
C. Reclassification of agricultural lands is the act of specifying how agricultural lands shall be utilized
for non-agricultural uses such as residential, industrial, commercial, as embodied in the land use plan.
It also includes the reversion of non-agricultural lands to agricultural use.
...
V. COVERAGE
These rules shall cover all private agricultural lands as defined herein regardless of tenurial
arrangement and commodity produced. It shall also include agricultural lands reclassified by LGUs into
non-agricultural uses, after June 15, 1988, pursuant to Memorandum Circular (M.C.) No. 54, Series of
1993 of the Office of the President and those proposed to be used for livestock, poultry and swine
raising as provided in DAR Administrative Order No. 9, Series of 1993.
In the case of Advincula-Velasquez v. Court of Appeals,25 we held:
Our ruling in the Natalia case was reiterated in National Housing Authority v. Allarde  (318 SCRA 22
[1999]).
The Court of Appeals’ reliance on DOJ Opinion No. 44, Series of 1990, is in order. In the said opinion,
the Secretary of Justice declared, viz:
Based on the foregoing premises, we reiterate the view that with respect to conversions of agricultural
lands covered by R.A. No. 6657 to non-agricultural uses, the authority of DAR to approve such
conversions may be exercised from the date of the law’s effectivity on June 15, 1988. This conclusion
is based on a liberal interpretation of R.A. No. 6657 in the light of DAR’s mandate and extensive
coverage of the agrarian reform program.
Following the DOJ opinion, the DAR issued Administrative Order No. 6, Series of 1994, stating that
lands already classified as non-agricultural before the enactment of Rep. Act No. 6657 no longer
needed any conversion clearance:
I. Prefatory Statement
In order to streamline the issuance of exemption clearances, based on DOJ Opinion No. 44, the
following guidelines are being issued for the guidance of the DAR and the public in general.
II. Legal Basis
Sec. 3(c) of RA 6657 states that agricultural lands refers to the land devoted to agricultural activity as
defined in this act and not classified as mineral, forest, residential, commercial or industrial land.
Department of Justice Opinion No. 44, series of 1990 has ruled that, with respect to the conversion of
agricultural lands covered by RA No. 6657 to non-agricultural uses, the authority of DAR to approve
such conversion may be exercised from the date of its effectivity, on June 15, 1988. Thus, all lands
that are already classified as commercial, industrial, or residential before 15 June 1988 no longer need
any conversion clearance.
The authority of the DAR to approve conversions of agricultural lands covered by Rep. Act No. 6657 to
non-agricultural uses has not been pierced by the passage of the Local Government Code. The Code
explicitly provides26 that "nothing in this section shall be construed as repealing or modifying in any
manner the provisions of Rep. Act No. 6657."
It being settled that jurisdiction over conversion of land is vested in the DAR, the complaint for
injunction was correctly dismissed by the trial and appellate courts under the doctrine of primary
jurisdiction. This Court, in Bautista v. Mag-isa Vda. De Villena,27 found occasion to reiterate the
doctrine of primary jurisdiction –
The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which
jurisdiction has initially been lodged with an administrative body of special competence. For agrarian
reform cases, jurisdiction is vested in the Department of Agrarian Reform (DAR); more specifically, in
the Department of Agrarian Reform Adjudication Board (DARAB).
Executive Order 229 vested the DAR with (1) quasi-judicial powers to determine and adjudicate
agrarian reform matters; and (2) jurisdiction over all matters involving the implementation of agrarian
reform, except those falling under the exclusive original jurisdiction of the Department of Agriculture
and the Department of Environment and Natural Resources. This law divested the regional trial courts
of their general jurisdiction to try agrarian reform matters.
Under Republic Act 6657, the DAR retains jurisdiction over all agrarian reform matters. The pertinent
provision reads:
"Section 50. Quasi-Judicial Powers of the DAR. – The DAR is hereby vested with the primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original
jurisdiction over all matters involving the implementation of agrarian reform, except those falling
under the exclusive jurisdiction of the Department of Agriculture and the Department of Environment
and Natural Resources.
"It shall not be bound by technical rules of procedure and evidence but shall proceed to hear and
decide all cases, disputes or controversies in a most expeditious manner, employing all reasonable
means to ascertain the facts of every case in accordance with justice and equity and the merits of the
case. Toward this end, it shall adopt a uniform rule of procedure to achieve a just, expeditious and
inexpensive determination of every action or proceeding before it. . . ."
Finally, the third and fourth issues which may be summed up into whether or not an injunction is the
appropriate remedy against the order of the DAR enjoining petitioners in developing the subject land,
we rule in the negative. Section 68 of Rep. Act No. 6657 provides:
SEC. 68. Immunity of Government Agencies from Undue Interference. – No injunction, restraining
order, prohibition or mandamus shall be issued by the lower courts against the Department of
Agrarian Reform (DAR), the Department of Agriculture (DA), the Department of Environment and
Natural Resources (DENR), and the Department of Justice (DOJ) in their implementation of the
program.
Wherefore, premises considered, the instant petition is Denied for lack of merit. The decision of the
Court of Appeals in CA-G.R. SP No. 42666 dated 02 December 1997 affirming the order dated 12
August 1996 of the Regional Trial Court of Toledo City, Branch 29, in Civil Case No. T-590 is
AFFIRMED. Costs against petitioners.
SO ORDERED. epublic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 183409               June 18, 2010
CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA), petitioner,  By reason thereof, petitioner claims that there is an actual slow down of housing projects, which, in
vs.
THE SECRETARY OF AGRARIAN REFORM, Respondent.
DECISION
PEREZ, J.:
This case is a Petition for Certiorari and Prohibition (with application for temporary restraining order
and/or writ of preliminary injunction) under Rule 65 of the 1997 Revised Rules of Civil Procedure, filed
by herein petitioner Chamber of Real Estate and Builders Associations, Inc. (CREBA) seeking to nullify
and prohibit the enforcement of Department of Agrarian Reform (DAR) Administrative Order (AO) No.
01-02, as amended by DAR AO No. 05-07,1and DAR Memorandum No. 88,2 for having been issued by
the Secretary of Agrarian Reform with grave abuse of discretion amounting to lack or excess of
jurisdiction as some provisions of the aforesaid administrative issuances are illegal and
unconstitutional.
Petitioner CREBA, a private non-stock, non-profit corporation duly organized and existing under the
laws of the Republic of the Philippines, is the umbrella organization of some 3,500 private
corporations, partnerships, single proprietorships and individuals directly or indirectly involved in land
and housing development, building and infrastructure construction, materials production and supply,
and services in the various related fields of engineering, architecture, community planning and
development financing. The Secretary of Agrarian Reform is named respondent as he is the duly
appointive head of the DAR whose administrative issuances are the subject of this petition.
The Antecedent Facts
The Secretary of Agrarian Reform issued, on 29 October 1997, DAR AO No. 07-97,3 entitled "Omnibus
Rules and Procedures Governing Conversion of Agricultural Lands to Non-Agricultural Uses," which
consolidated all existing implementing guidelines related to land use conversion. The aforesaid rules
embraced all private agricultural lands regardless of tenurial arrangement and commodity produced,
and all untitled agricultural lands and agricultural lands reclassified by Local Government Units (LGUs)
into non-agricultural uses after 15 June 1988.
Subsequently, on 30 March 1999, the Secretary of Agrarian Reform issued DAR AO No. 01-
99,4 entitled "Revised Rules and Regulations on the Conversion of Agricultural Lands to Non-
agricultural Uses," amending and updating the previous rules on land use conversion. Its coverage
includes the following agricultural lands, to wit: (1) those to be converted to residential, commercial,
industrial, institutional and other non-agricultural purposes; (2) those to be devoted to another type of
agricultural activity such as livestock, poultry, and fishpond ─ the effect of which is to exempt the land
from the Comprehensive Agrarian Reform Program (CARP) coverage; (3) those to be converted to
non-agricultural use other than that previously authorized; and (4) those reclassified to residential,
commercial, industrial, or other non-agricultural uses on or after the effectivity of Republic Act No.
66575 on 15 June 1988 pursuant to Section 206 of Republic Act No. 71607 and other pertinent laws and
regulations, and are to be converted to such uses.
On 28 February 2002, the Secretary of Agrarian Reform issued another Administrative Order, i.e., DAR
AO No. 01-02, entitled "2002 Comprehensive Rules on Land Use Conversion," which further amended
DAR AO No. 07-97 and DAR AO No. 01-99, and repealed all issuances inconsistent therewith. The
aforesaid DAR AO No. 01-02 covers all applications for conversion from agricultural to non-agricultural
uses or to another agricultural use.
Thereafter, on 2 August 2007, the Secretary of Agrarian Reform amended certain provisions8 of DAR
AO No. 01-02 by formulating DAR AO No. 05-07, particularly addressing land conversion in time of
exigencies and calamities.
To address the unabated conversion of prime agricultural lands for real estate development, the
Secretary of Agrarian Reform further issued Memorandum No. 88 on 15 April 2008, which temporarily
suspended the processing and approval of all land use conversion applications.
turn, aggravated the housing shortage, unemployment and illegal squatting problems to the
substantial prejudice not only of the petitioner and its members but more so of the whole nation.
Hence, this petition.
The Issues
In its Memorandum, petitioner posits the following issues:
I.
WHETHER THE DAR SECRETARY HAS JURISDICTION OVER LANDS THAT HAVE BEEN RECLASSIFIED
AS RESIDENTIAL, COMMERCIAL, INDUSTRIAL, OR FOR OTHER NON-AGRICULTURAL USES.
II.
WHETHER THE DAR SECRETARY ACTED IN EXCESS OF HIS JURISDICTION AND GRAVELY ABUSED HIS
DISCRETION BY ISSUING AND ENFORCING [DAR AO NO. 01-02, AS AMENDED] WHICH SEEK TO
REGULATE RECLASSIFIED LANDS.
III.
WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE LOCAL AUTONOMY OF LOCAL
GOVERNMENT UNITS.
IV.
WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE DUE PROCESS AND EQUAL
PROTECTION CLAUSE[S] OF THE CONSTITUTION.
V.
WHETHER MEMORANDUM NO. 88 IS A VALID EXERCISE OF POLICE POWER.9
The subject of the submission that the DAR Secretary gravely abused his discretion is AO No. 01-02,
as amended, which states:
Section 3. Applicability of Rules. – These guidelines shall apply to all applications for conversion, from
agricultural to non-agricultural uses or to another agricultural use, such as:
xxxx
3.4 Conversion of agricultural lands or areas that have been reclassified by the LGU or by way of a
Presidential Proclamation, to residential, commercial, industrial, or other non-agricultural uses on or
after the effectivity of RA 6657 on 15 June 1988, x x x. [Emphasis supplied].
Petitioner holds that under Republic Act No. 6657 and Republic Act No. 8435,10 the term agricultural
lands refers to "lands devoted to or suitable for 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 a person whether natural or juridical, and not classified by the law as mineral, forest,
residential, commercial or industrial land." When the Secretary of Agrarian Reform, however, issued
DAR AO No. 01-02, as amended, he included in the definition of agricultural lands "lands not
reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988."
In effect, lands reclassified from agricultural to residential, commercial, industrial, or other non-
agricultural uses after 15 June 1988 are considered to be agricultural lands for purposes of conversion,
redistribution, or otherwise. In so doing, petitioner avows that the Secretary of Agrarian Reform acted
without jurisdiction as he has no authority to expand or enlarge the legal signification of the term
agricultural lands through DAR AO No. 01-02. Being a mere administrative issuance, it must conform
to the statute it seeks to implement, i.e., Republic Act No. 6657, or to the Constitution, otherwise, its
validity or constitutionality may be questioned.
In the same breath, petitioner contends that DAR AO No. 01-02, as amended, was made in violation
of Section 6511of Republic Act No. 6657 because it covers all applications for conversion from
agricultural to non-agricultural uses or to other agricultural uses, such as the conversion of agricultural
lands or areas that have been reclassified by the LGUs or by way of Presidential Proclamations, to
residential, commercial, industrial or other non-agricultural uses on or after 15 June 1988. According
to petitioner, there is nothing in Section 65 of Republic Act No. 6657 or in any other provision of law
that confers to the DAR the jurisdiction or authority to require that non-awarded lands or reclassified
lands be submitted to its conversion authority. Thus, in issuing and enforcing DAR AO No. 01-02, as
amended, the Secretary of Agrarian Reform acted with grave abuse of discretion amounting to lack or
excess of jurisdiction.
Petitioner further asseverates that Section 2.19,12 Article I of DAR AO No. 01-02, as amended, making
reclassification of agricultural lands subject to the requirements and procedure for land use
conversion, violates Section 20 of Republic Act No. 7160, because it was not provided therein that
reclassification by LGUs shall be subject to conversion procedures or requirements, or that the DAR’s
approval or clearance must be secured to effect reclassification. The said Section 2.19 of DAR AO No.
01-02, as amended, also contravenes the constitutional mandate on local autonomy under Section
25,13 Article II and Section 2,14 Article X of the 1987 Philippine Constitution.
Petitioner similarly avers that the promulgation and enforcement of DAR AO No. 01-02, as amended,
constitute deprivation of liberty and property without due process of law. There is deprivation of
liberty and property without due process of law because under DAR AO No. 01-02, as amended, lands
that are not within DAR’s jurisdiction are unjustly, arbitrarily and oppressively prohibited or restricted
from legitimate use on pain of administrative and criminal penalties. More so, there is discrimination
and violation of the equal protection clause of the Constitution because the aforesaid administrative
order is patently biased in favor of the peasantry at the expense of all other sectors of society.
As its final argument, petitioner avows that DAR Memorandum No. 88 is not a valid exercise of police
power for it is the prerogative of the legislature and that it is unconstitutional because it suspended
the land use conversion without any basis.
The Court’s Ruling
This petition must be dismissed.
Primarily, although this Court, the Court of Appeals and the Regional Trial Courts have concurrent
jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court
forum.15 In Heirs of Bertuldo Hinog v. Melicor,16citing People v. Cuaresma,17 this Court made the
following pronouncements:
This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court
with Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not,
however, to be taken as according to parties seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which application therefor will be directed. There is after all a
hierarchy of courts. That hierarchy is determinative of the venue of appeals, and also serves as a
general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming
regard for that judicial hierarchy most certainly indicates that petitions for the issuance of
extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court,
and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Court’s
original jurisdiction to issue these writs should be allowed only when there are special and important
reasons therefor, clearly and specifically set out in the petition. This is [an] established policy. It is a
policy necessary to prevent inordinate demands upon the Court’s time and attention which are better
devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the
Court’s docket.18 (Emphasis supplied.)
The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this
Court; and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the
adjudication of cases, which in some instances had to be remanded or referred to the lower court as
the proper forum under the rules of procedure, or as better equipped to resolve the issues because
this Court is not a trier of facts.19
This Court thus reaffirms the judicial policy that it will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts, and exceptional and compelling
circumstances, such as cases of national interest and of serious implications, justify the availment of
the extraordinary remedy of writ of certiorari, calling for the exercise of its primary jurisdiction.20
Exceptional and compelling circumstances were held present in the following cases: (a) Chavez v.
Romulo,21 on citizens’ right to bear arms; (b) Government of [the] United States of America v. Hon.
Purganan,22 on bail in extradition proceedings; (c) Commission on Elections v. Judge Quijano-
Padilla,23 on government contract involving modernization and computerization of voters’ registration
list; (d) Buklod ng Kawaning EIIB v. Hon. Sec. Zamora,24on status and existence of a public office; and
(e) Hon. Fortich v. Hon. Corona,25 on the so-called "Win-Win Resolution" of the Office of the President
which modified the approval of the conversion to agro-industrial area.26
In the case at bench, petitioner failed to specifically and sufficiently set forth special and important
reasons to justify direct recourse to this Court and why this Court should give due course to this
petition in the first instance, hereby failing to fulfill the conditions set forth in Heirs of Bertuldo Hinog
v. Melicor.27 The present petition should have been initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for the
dismissal of this petition.
Moreover, although the instant petition is styled as a Petition for Certiorari, in essence, it seeks the
declaration by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as
amended, and Memorandum No. 88. It, thus, partakes of the nature of a Petition for Declaratory Relief
over which this Court has only appellate, not original, jurisdiction.28 Section 5, Article VIII of the 1987
Philippine Constitution provides:
Sec. 5. The Supreme Court shall have the following powers:
(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers
and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and
habeas corpus.
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules
of Court may provide, final judgments and orders of lower courts in:
(a) All cases in which the constitutionality or validity of any treaty, international or
executive agreement, law, presidential decree, proclamation, order, instruction,
ordinance, or regulation is in question. (Emphasis supplied.)
With that, this Petition must necessarily fail because this Court does not have original jurisdiction over
a Petition for Declaratory Relief even if only questions of law are involved.
Even if the petitioner has properly observed the doctrine of judicial hierarchy, this Petition is still
dismissible.
The special civil action for certiorari is intended for the correction of errors of jurisdiction only or grave
abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only to keep the
inferior court within the parameters of its jurisdiction or to prevent it from committing such a grave
abuse of discretion amounting to lack or excess of jurisdiction.29
The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed against a
tribunal, a board, or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board,
or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in
the ordinary course of law.30
Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within
the general power of a tribunal, board or officer, is not authorized and invalid with respect to the
particular proceeding, because the conditions which alone authorize the exercise of the general power
in respect of it are wanting.31 Without jurisdiction means lack or want of legal power, right or authority
to hear and determine a cause or causes, considered either in general or with reference to a particular
matter. It means lack of power to exercise authority.32Grave abuse of discretion implies such
capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in other
words, where the power is exercised in an arbitrary manner by reason of passion, prejudice, or
personal hostility, and it must be so patent or gross as to amount to an evasion of a positive duty or
to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.33
In the case before this Court, the petitioner fails to meet the above-mentioned requisites for the
proper invocation of a Petition for Certiorari under Rule 65. The Secretary of Agrarian Reform in
issuing the assailed DAR AO No. 01-02, as amended, as well as Memorandum No. 88 did so in
accordance with his mandate to implement the land use conversion provisions of Republic Act No.
6657. In the process, he neither acted in any judicial or quasi-judicial capacity nor assumed unto
himself any performance of judicial or quasi-judicial prerogative. A Petition for Certiorari is a special
civil action that may be invoked only against a tribunal, board, or officer exercising judicial functions.
Section 1, Rule 65 of the 1997 Revised Rules of Civil Procedure is explicit on this matter, viz.:
SECTION 1. Petition for certiorari. – When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy,
and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and praying that judgment must be
rendered annulling or modifying the proceedings of such tribunal, board or officer.1avvphi1
A tribunal, board, or officer is said to be exercising judicial function where it has the power to
determine what the law is and what the legal rights of the parties are, and then undertakes to
determine these questions and adjudicate upon the rights of the parties. Quasi-judicial function, on
the other hand, is "a term which applies to the actions, discretion, etc., of public administrative
officers or bodies x x x required to investigate facts or ascertain the existence of facts, hold hearings,
and draw conclusions from them as a basis for their official action and to exercise discretion of a
judicial nature."34
Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that
there be a law that gives rise to some specific rights of persons or property under which adverse
claims to such rights are made, and the controversy ensuing therefrom is brought before a tribunal,
board, or officer clothed with power and authority to determine the law and adjudicate the respective
rights of the contending parties.35
The Secretary of Agrarian Reform does not fall within the ambit of a tribunal, board, or officer
exercising judicial or quasi-judicial functions. The issuance and enforcement by the Secretary of
Agrarian Reform of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88 were
done in the exercise of his quasi-legislative and administrative functions and not of judicial or quasi-
judicial functions. In issuing the aforesaid administrative issuances, the Secretary of Agrarian Reform
never made any adjudication of rights of the parties. As such, it can never be said that the Secretary
of Agrarian Reform had acted with grave abuse of discretion amounting to lack or excess of
jurisdiction in issuing and enforcing DAR AO No. 01-02, as amended, and Memorandum No. 88 for he
never exercised any judicial or quasi-judicial functions but merely his quasi-legislative and
administrative functions.
Furthermore, as this Court has previously discussed, the instant petition in essence seeks the
declaration by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as
amended, and Memorandum No. 88. Thus, the adequate and proper remedy for the petitioner therefor
is to file a Petition for Declaratory Relief, which this Court has only appellate and not original
jurisdiction. It is beyond the province of certiorari to declare the aforesaid administrative issuances
unconstitutional and illegal because certiorari is confined only to the determination of the existence of
grave abuse of discretion amounting to lack or excess of jurisdiction. Petitioner cannot simply allege
grave abuse of discretion amounting to lack or excess of jurisdiction and then invoke certiorari to
declare the aforesaid administrative issuances unconstitutional and illegal. Emphasis must be given to
the fact that the writ of certiorari dealt with in Rule 65 of the 1997 Revised Rules of Civil Procedure is
a prerogative writ, never demandable as a matter of right, "never issued except in the exercise of
judicial discretion." 36
At any rate, even if the Court will set aside procedural infirmities, the instant petition should still be
dismissed.
Executive Order No. 129-A37 vested upon the DAR the responsibility of implementing the CARP.
Pursuant to the said mandate and to ensure the successful implementation of the CARP, Section 5(c)
of the said executive order authorized the DAR to establish and promulgate operational policies, rules
and regulations and priorities for agrarian reform implementation. Section 4(k) thereof authorized the
DAR to approve or disapprove the conversion, restructuring or readjustment of agricultural lands into
non-agricultural uses. Similarly, Section 5(l) of the same executive order has given the DAR the
exclusive authority to approve or disapprove conversion of agricultural lands for residential,
commercial, industrial, and other land uses as may be provided for by law. Section 7 of the aforesaid
executive order clearly provides that "the authority and responsibility for the exercise of the mandate
of the [DAR] and the discharge of its powers and functions shall be vested in the Secretary of Agrarian
Reform x x x."
Under DAR AO No. 01-02, as amended, "lands not reclassified as residential, commercial, industrial or
other non-agricultural uses before 15 June 1988" have been included in the definition of agricultural
lands. In so doing, the Secretary of Agrarian Reform merely acted within the scope of his authority
stated in the aforesaid sections of Executive Order No. 129-A, which is to promulgate rules and
regulations for agrarian reform implementation and that includes the authority to define agricultural
lands for purposes of land use conversion. Further, the definition of agricultural lands under DAR AO
No. 01-02, as amended, merely refers to the category of agricultural lands that may be the subject for
conversion to non-agricultural uses and is not in any way confined to agricultural lands in the context
of land redistribution as provided for under Republic Act No. 6657.
More so, Department of Justice Opinion No. 44, Series of 1990, which Opinion has been recognized in
many cases decided by this Court, clarified that after the effectivity of Republic Act No. 6657 on 15
June 1988 the DAR has been given the authority to approve land conversion.38 Concomitant to such
authority, therefore, is the authority to include in the definition of agricultural lands "lands not
reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988"
for purposes of land use conversion.
In the same vein, the authority of the Secretary of Agrarian Reform to include "lands not reclassified
as residential, commercial, industrial or other non-agricultural uses before 15 June 1988" in the
definition of agricultural lands finds basis in jurisprudence. In Ros v. Department of Agrarian
Reform,39 this Court has enunciated that after the passage of Republic Act No. 6657, agricultural
lands, though reclassified, have to go through the process of conversion, jurisdiction over which is
vested in the DAR. However, agricultural lands, which are already reclassified before the effectivity of
Republic Act No. 6657 which is 15 June 1988, are exempted from conversion.40 It bears stressing that
the said date of effectivity of Republic Act No. 6657 served as the cut-off period for automatic
reclassifications or rezoning of agricultural lands that no longer require any DAR conversion clearance
or authority.41 It necessarily follows that any reclassification made thereafter can be the subject of
DAR’s conversion authority. Having recognized the DAR’s conversion authority over lands reclassified
after 15 June 1988, it can no longer be argued that the Secretary of Agrarian Reform was wrongfully
given the authority and power to include "lands not reclassified as residential, commercial, industrial
or other non-agricultural uses before 15 June 1988" in the definition of agricultural lands. Such
inclusion does not unduly expand or enlarge the definition of agricultural lands; instead, it made clear
what are the lands that can be the subject of DAR’s conversion authority, thus, serving the very
purpose of the land use conversion provisions of Republic Act No. 6657.
The argument of the petitioner that DAR AO No. 01-02, as amended, was made in violation of Section
65 of Republic Act No. 6657, as it covers even those non-awarded lands and reclassified lands by the
LGUs or by way of Presidential Proclamations on or after 15 June 1988 is specious. As explained in
Department of Justice Opinion No. 44, series of 1990, it is true that the DAR’s express power over
land use conversion provided for under Section 65 of Republic Act No. 6657 is limited to cases in
which agricultural lands already awarded have, after five years, ceased to be economically feasible
and sound for agricultural purposes, or the locality has become urbanized and the land will have a
greater economic value for residential, commercial or industrial purposes. To suggest, however, that
these are the only instances that the DAR can require conversion clearances would open a loophole in
Republic Act No. 6657 which every landowner may use to evade compliance with the agrarian reform
program. It should logically follow, therefore, from the said department’s express duty and function to
execute and enforce the said statute that any reclassification of a private land as a residential,
commercial or industrial property, on or after the effectivity of Republic Act No. 6657 on 15 June 1988
should first be cleared by the DAR.42
This Court held in Alarcon v. Court of Appeals43 that reclassification of lands does not suffice.
Conversion and reclassification differ from each other. Conversion is the act of changing the current
use of a piece of agricultural land into some other use as approved by the DAR while reclassification is
the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as
residential, industrial, and commercial, as embodied in the land use plan, subject to the requirements
and procedures for land use conversion. In view thereof, a mere reclassification of an agricultural land
does not automatically allow a landowner to change its use. He has to undergo the process of
conversion before he is permitted to use the agricultural land for other purposes.44
It is clear from the aforesaid distinction between reclassification and conversion that agricultural lands
though reclassified to residential, commercial, industrial or other non-agricultural uses must still
undergo the process of conversion before they can be used for the purpose to which they are
intended.
Nevertheless, emphasis must be given to the fact that DAR’s conversion authority can only be
exercised after the effectivity of Republic Act No. 6657 on 15 June 1988.45 The said date served as the
cut-off period for automatic reclassification or rezoning of agricultural lands that no longer require any
DAR conversion clearance or authority.46Thereafter, reclassification of agricultural lands is already
subject to DAR’s conversion authority. Reclassification alone will not suffice to use the agricultural
lands for other purposes. Conversion is needed to change the current use of reclassified agricultural
lands.
It is of no moment whether the reclassification of agricultural lands to residential, commercial,
industrial or other non-agricultural uses was done by the LGUs or by way of Presidential Proclamations
because either way they must still undergo conversion process. It bears stressing that the act of
reclassifying agricultural lands to non-agricultural uses simply specifies how agricultural lands shall be
utilized for non-agricultural uses and does not automatically convert agricultural lands to non-
agricultural uses or for other purposes. As explained in DAR Memorandum Circular No. 7, Series of
1994, cited in the 2009 case of Roxas & Company, Inc. v. DAMBA-NFSW and the Department of
Agrarian Reform,47 reclassification of lands denotes their allocation into some specific use and
providing for the manner of their utilization and disposition or the act of specifying how agricultural
lands shall be utilized for non-agricultural uses such as residential, industrial, or commercial, as
embodied in the land use plan. For reclassified agricultural lands, therefore, to be used for the purpose
to which they are intended there is still a need to change the current use thereof through the process
of conversion. The authority to do so is vested in the DAR, which is mandated to preserve and
maintain agricultural lands with increased productivity. Thus, notwithstanding the reclassification of
agricultural lands to non-agricultural uses, they must still undergo conversion before they can be used
for other purposes.
Even reclassification of agricultural lands by way of Presidential Proclamations to non-agricultural
uses, such as school sites, needs conversion clearance from the DAR. We reiterate that reclassification
is different from conversion. Reclassification alone will not suffice and does not automatically allow the
landowner to change its use. It must still undergo conversion process before the landowner can use
such agricultural lands for such purpose.48Reclassification of agricultural lands is one thing, conversion
is another. Agricultural lands that are reclassified to non-agricultural uses do not ipso facto allow the
landowner thereof to use the same for such purpose. Stated differently, despite having reclassified
into school sites, the landowner of such reclassified agricultural lands must apply for conversion before
the DAR in order to use the same for the said purpose.
Any reclassification, therefore, of agricultural lands to residential, commercial, industrial or other non-
agricultural uses either by the LGUs or by way of Presidential Proclamations enacted on or after 15
June 1988 must undergo the process of conversion, despite having undergone reclassification, before
agricultural lands may be used for other purposes.
It is different, however, when through Presidential Proclamations public agricultural lands have been
reserved in whole or in part for public use or purpose, i.e., public school, etc., because in such a case,
conversion is no longer necessary. As held in Republic v. Estonilo,49 only a positive act of the President
is needed to segregate or reserve a piece of land of the public domain for a public purpose. As such,
reservation of public agricultural lands for public use or purpose in effect converted the same to such
use without undergoing any conversion process and that they must be actually, directly and
exclusively used for such public purpose for which they have been reserved, otherwise, they will be
segregated from the reservations and transferred to the DAR for distribution to qualified beneficiaries
under the CARP.50 More so, public agricultural lands already reserved for public use or purpose no
longer form part of the alienable and disposable lands of the public domain suitable for
agriculture.51 Hence, they are outside the coverage of the CARP and it logically follows that they are
also beyond the conversion authority of the DAR.
Clearly from the foregoing, the Secretary of Agrarian Reform did not act without jurisdiction or in
excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in
(1) including lands not reclassified as residential, commercial, industrial or other non-agricultural uses
before 15 June 1988 in the definition of agricultural lands under DAR AO No. 01-02, as amended, and;
(2) issuing and enforcing DAR AO No. 01-02, as amended, subjecting to DAR’s jurisdiction for
conversion lands which had already been reclassified as residential, commercial, industrial or for other
non-agricultural uses on or after 15 June 1988.
Similarly, DAR AO No. 01-02, as amended, providing that the reclassification of agricultural lands by
LGUs shall be subject to the requirements of land use conversion procedure or that DAR’s approval or
clearance must be secured to effect reclassification, did not violate the autonomy of the LGUs.
Section 20 of Republic Act No. 7160 states that:
SECTION 20. Reclassification of Lands. – (a) A city or municipality may, through an ordinance passed
by the sanggunian after conducting public hearings for the purpose, authorize the reclassification of
agricultural lands and provide for the manner of their utilization or disposition in the following cases:
(1) when the land ceases to be economically feasible and sound for agricultural purposes as
determined by the Department of Agriculture or (2) where the land shall have substantially greater
economic value for residential, commercial, or industrial purposes, as determined by the sanggunian
concerned: Provided, That such reclassification shall be limited to the following percentage of the total
agricultural land area at the time of the passage of the ordinance:
xxxx
(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands
distributed to agrarian reform beneficiaries pursuant to Republic Act Numbered Sixty-six hundred fifty-
seven (R.A. No. 6657), otherwise known as "The Comprehensive Agrarian Reform Law," shall not be
affected by the said reclassification and the conversion of such lands into other purposes shall be
governed by Section 65 of said Act.
xxxx
(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the
provisions of R.A. No. 6657.
The aforequoted provisions of law show that the power of the LGUs to reclassify agricultural lands is
not absolute. The authority of the DAR to approve conversion of agricultural lands covered by Republic
Act No. 6657 to non-agricultural uses has been validly recognized by said Section 20 of Republic Act
No. 7160 by explicitly providing therein that, "nothing in this section shall be construed as repealing or
modifying in any manner the provisions of Republic Act No. 6657."
DAR AO No. 01-02, as amended, does not also violate the due process clause, as well as the equal
protection clause of the Constitution. In providing administrative and criminal penalties in the said
administrative order, the Secretary of Agrarian Reform simply implements the provisions of Sections
73 and 74 of Republic Act No. 6657, thus:
Sec. 73. Prohibited Acts and Omissions. – The following are prohibited:
xxxx
(c) The conversion by any landowner of his agricultural land into any non-agricultural use with intent
to avoid the application of this Act to his landholdings and to disposes his tenant farmers of the land
tilled by them;
xxxx
(f) The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary right
over the land he acquired by virtue of being a beneficiary, in order to circumvent the provisions of this
Act.
xxxx
Sec. 74. Penalties. ─ Any person who knowingly or willfully violates the provisions of this Act shall be
punished by imprisonment of not less than one (1) month to not more than three (3) years or a fine of
not less than one thousand pesos (P1,000.00) and not more than fifteen thousand pesos
(P15,000.00), or both, at the discretion of the court.
If the offender is a corporation or association, the officer responsible therefor shall be criminally liable.
And Section 11 of Republic Act No. 8435, which specifically provides:
Sec. 11. Penalty for Agricultural Inactivity and Premature Conversion.  – x x x.
Any person found guilty of premature or illegal conversion shall be penalized with imprisonment of two
(2) to six (6) years, or a fine equivalent to one hundred percent (100%) of the government's
investment cost, or both, at the discretion of the court, and an accessory penalty of forfeiture of the
land and any improvement thereon.
In addition, the DAR may impose the following penalties, after determining, in an administrative
proceedings, that violation of this law has been committed:
a. Consolation or withdrawal of the authorization for land use conversion; and
b. Blacklisting, or automatic disapproval of pending and subsequent conversion applications
that they may file with the DAR.
Contrary to petitioner’s assertions, the administrative and criminal penalties provided for under DAR
AO No. 01-02, as amended, are imposed upon the illegal or premature conversion of lands within
DAR’s jurisdiction, i.e., "lands not reclassified as residential, commercial, industrial or for other non-
agricultural uses before 15 June 1998."
The petitioner’s argument that DAR Memorandum No. 88 is unconstitutional, as it suspends the land
use conversion without any basis, stands on hollow ground.
It bears emphasis that said Memorandum No. 88 was issued upon the instruction of the President in
order to address the unabated conversion of prime agricultural lands for real estate development
because of the worsening rice shortage in the country at that time. Such measure was made in order
to ensure that there are enough agricultural lands in which rice cultivation and production may be
carried into. The issuance of said Memorandum No. 88 was made pursuant to the general welfare of
the public, thus, it cannot be argued that it was made without any basis.
WHEREFORE, premises considered, the instant Petition for Certiorari is DISMISSED. Costs against
petitioner.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SPECIAL SECOND DIVISION
G.R. No. 131457           August 19, 1999
HON. CARLOS O. FORTICH, PROVINCIAL GOVERNOR OF BUKIDNON, HON. REY B. BAULA,
MUNICIPAL MAYOR OF SUMILAO, BUKIDNON, NQSR MANAGEMENT AND DEVELOPMENT
CORPORATION, petitioners, 
vs.
HON. RENATO C. CORONA, DEPUTY EXECUTIVE SECRETARY, HON. ERNESTO D. GARILAO,
SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, respondents.
RESOLUTION
YNARES-SANTIAGO, J.:
This resolves the pending incidents before us, namely, respondents' and intervenors' separate motions
for reconsideration of our Resolution dated November 17, 1998, as well as their motions to refer this
case to this Court En banc.
Respondents and intervenors jointly argue, in fine, that our Resolution dated November 17, 1998,
wherein we voted two-two on the separate motions for reconsideration of our earlier Decision or April
24, 1998, as a result of which the Decision was deemed affirmed, did not effectively resolve the said
motions for reconsideration inasmuch as the matter should have been referred to the Court sitting en
banc, pursuant to Article VIII, Section 4(3) of the Constitution. Respondents and intervenors also
assail our Resolution dated January 27, 1999, wherein we noted without action the intervenors'
"Motion For Reconsideration With Motion To Refer The Matter To The Court En Banc" filed on
December 3, 1998, on the following considerations, to wit:
the movants have no legal personality to further seek redress before the Court after their
motion for leave to intervene in this case was denied in the April 24, 1998 Decision. Their
subsequent motion for reconsideration of the said decision, with a prayer to resolve the
motion to the Court En Banc, was also denied in the November 17, 1998 Resolution of the
Court. Besides, their aforesaid motion of December 3, 1998 is in the nature of a second
motion for reconsideration which is a forbidden motion (Section 2, Rule 52 in relation to
Section 4, Rule 56 of the 1997 Rules of Civil Procedure). The impropriety of movants'
December 3, 1998 motion becomes all the more glaring considering that all the respondents
in this case did not anymore join them (movants) ill seeking a reconsideration of the
November 17, 1998 Resolution.1
Subsequently, respondents, through the Office of the Solicitor General, filed their "Motion For
Reconsideration Of The Resolution Dated November 17, 1998 And For Referral Of The Case To This
Honorable Court En Banc (With Urgent Prayer For Issuance Of A Restraining Order)" on December 3,
1998, accompanied by a "Manifestation and Motion"2 and a copy of the Registered Mail Bill3 evidencing
filing of the said motion for reconsideration to this Court by registered mail.1âwphi1.nêt
In their respective motions for reconsideration, both respondents and intervenors pray that this case
be referred to this Court en banc. They contend that inasmuch as their earlier motions for
reconsideration (of the Decision dated April 24, 1998) were resolved by a vote of two-two, the
required number to carry a decision, i.e., three, was not met. Consequently, the case should be
referred to and be decided by this Court en banc, relying on the following constitutional provision:
Cases or matters heard by a division shall be decided or resolved with the concurrence of a
majority of the Members who actually took part in the deliberations on the issues in the case
and voted thereon, and in no case without the concurrence of at least three of such
Members. When the required number is not obtained, the case shall be decided en
banc: Provided, that no doctrine or principle of law laid down by the Court in a decision
rendered en banc or in division may be modified or reversed except by the Court sitting en
banc.4
A careful reading of the above constitutional provision, however, reveals the intention of the framers
to draw a distinction between cases, on the one hand, and matters, on the other hand, such
that cases  are "decided" while matters, which include motions, are "resolved". Otherwise put, the
word "decided" must refer to "cases"; while the word "resolved" must refer to "matters", applying the
rule of reddendo singula singulis. This is true not only in the interpretation of the above-quoted Article
VIII, Section 4(3), but also of the other provisions of the Constitution where these words appear.5
With the aforesaid rule of construction in mind, it is clear that only cases are referred to the Court en
banc for decision whenever the required number of votes is not obtained. Conversely, the rule does
not apply where, as in this case, the required three votes is not obtained in the resolution of a motion
for reconsideration. Hence, the second sentence of the aforequoted provision speaks only of "case"
and not "matter". The reason is simple. The above-quoted Article VIII, Section 4(3) pertains to the
disposition of cases by a division. If there is a tie in the voting, there is no decision. The only way to
dispose of the case then is to refer it to the Court en banc. On the other hand, if a case has already
been decided by the division and the losing party files a motion for reconsideration, the failure of the
division to resolve the motion because of a tie in the voting does not leave the case undecided. There
is still the decision which must stand in view of the failure of the members of the division to muster
the necessary vote for its reconsideration. Quite plainly, if the voting results in a tie, the motion for
reconsideration is lost. The assailed decision is not reconsidered and must therefore be deemed
affirmed. Such was the ruling of this Court in the Resolution of November 17, 1998.
It is the movants' further contention in support of their plea for the referral of this case to the
Court en banc that the issues submitted in their separate motions are of first impression. In the
opinion penned by Mr. Justice Antonio M. Martinez during the resolution of the motions for
reconsideration on November 17, 1998, the following was expressed:
Regrettably, the issues presented before us by the movants are matters of no extraordinary
import to merit the attention of the Court En Banc. Specifically, the issue of whether or not
the power of the local government units to reclassify lands is subject to the approval of the
DAR is no longer novel, this having been decided by this Court in the case of Province of
Camarines Sur, et al. vs. Court of Appeals wherein we held that local government units
need not obtain the approval of the DAR to convert or reclassify lands from agricultural to
non-agricultural use. The dispositive portion of the Decision in the aforecited case states:
WHEREFORE, the petition is GRANTED and the questioned decision of the Court of
Appeals is set aside insofar as it (a) nullifies the trial court's order allowing the
Province of Camarines Sur to take possession of private respondent's property (b)
orders the trial court to suspended the exportation proceedings; and (c) requires
the Province of Camarines Sur to obtain the approval of the Department of
Agrarian Reform to convert or reclassify private respondents' property from
agricultural to non-agricultural use.
x x x           x x x           x x x(Emphasis supplied)
Moreover, the Decision sought to be reconsidered was arrived at by a unanimous vote of all
five (5) members of the Second Division of this Court, Stated otherwise, this Second
Division is of the opinion that the matters raised by movants are nothing new and do not
deserve the consideration of the Court en banc. Thus, the participation of the full Court in
the resolution of movants' motions for reconsideration would be inappropriate.6
The contention, therefore, that our Resolution of November 17, 1998 did not dispose of the earlier
motions for reconsideration of the Decision dated April 24, 1998 is flawed. Consequently, the present
motions for reconsideration necessarily partake of the nature of a second motion for reconsideration
which, according to the clear and unambiguous language of Rule 56, Section 4, in relation to Rule 52,
Section 2, of the 1997 Rules of Civil Procedure, is prohibited.
True, there are exceptional cases when this Court may entertain a second motion for reconsideration,
such as where there are extraordinarily persuasive reasons. Even then, we have ruled that such
second motions for reconsideration must be filed with express leave of court first obtained.7 In this
case, not only did movants fail to ask for prior leave of court, but more importantly, they have been
unable to show that there are exceptional reasons for us to give due course to their second motions
for reconsideration. Stripped of the arguments for referral of this incident to the Court en banc, the
motions subject of this resolution are nothing more but rehashes of the motions for reconsideration
which have been denied in the Resolution of November 17, 1998. To be sure, the allegations
contained therein have already been raised before and passed upon by this Court in the said
Resolution.
The crux of the controversy is the validity of the "Win-Win" Resolution dated November 7, 1997. We
maintain that the same is void and of no legal effect considering that the March 29, 1996 decision of
the Office of the President had already become final and executory even prior to the filing of the
motion for reconsideration which became the basis of the said "Win-Win" Resolution. This ruling, quite
understandably, sparked a litany of protestations on the part of respondents and intervenors including
entreaties for a liberal interpretation of the rules. The sentiment was that notwithstanding its
importance and far-reaching effects, the case was disposed of on a technicality. The situation,
however, is not as simple as what the movants purport it to be. While it may be true that on its face
the nullification of the "Win-Win" Resolution was grounded on a procedural rule pertaining to the
reglementary period to appeal or move for reconsideration, the underlying consideration therefor was
the protection of the substantive rights of petitioners. The succinct words of Mr. Justice Artemio V.
Panganiban are quoted in the November 17, 1998 opinion of Mr. Justice Martinez, viz.: "Just as a
losing party has the right to file an appeal within the prescribed period, the winning party also has the
correlative right to enjoy the finality of the resolution of his/her case."8
In other words, the finality of the March 29, 1996 OP Decision accordingly vested appurtenant rights
to the land in dispute on petitioners as well as on the people of Bukidnon and other parts of the
country who stand to be benefited by the development of the property. The issue in this case,
therefore, is not a question of technicality but of substance and merit.9
Before finally disposing of these pending matters, we feel it necessary to rule once and for all on the
legal standing of intervenors in this case. In their present motions, intervenors insist that they are real
parties in interest inasmuch as they have already been issued certificates of land ownership award, or
CLOAs, and that while they are seasonal farmworkers at the plantation, they have been identified by
the DAR as qualified beneficiaries of the property. These arguments are, however, nothing new as in
fact they have already been raised in intervenors' earlier motion for reconsideration of our April 24,
1998 Decision. Again as expressed in the opinion of Mr. Justice Martinez, intervenors, who are
admittedly not regular but seasonal farmworkers, have no legal or actual and substantive interest over
the subject land inasmuch as they have no right to own the land. Rather, their right is limited only to
a just share of the fruits of the land.10 Moreover, the "Win-Win" Resolution itself states that the
qualified beneficiaries have yet to be carefully and meticulously determined by the Department of
Agrarian Reform.11 Absent any definitive finding of the Department of Agrarian Reform, intervenors
cannot as yet be deemed vested with sufficient interest in the controversy as to be qualified to
intervene in this case. Likewise, the issuance of the CLOA's to them does not grant them the requisite
standing in view of the nullity of the "Win-Win" Resolution. No legal rights can emanate from a
resolution that is null and void.
WHEREFORE, based on the foregoing, the following incidents, namely: intervenors' "Motion For
Reconsideration With Motion To Refer The Matter To The Court En Banc," dated December 3, 1998;
respondents' "Motion For Reconsideration Of The Resolution Dated November 17, 1998 And For
Referral Of The Case To This Honorable Court En Banc (With Urgent Prayer For Issuance Of A
Restraining Order)," dated December 2, 1998; and intervenors' "Urgent Omnibus Motion For The
Supreme Court Sitting En Banc To Annul The Second Division's Resolution Dated 27 January 1999 And
Immediately Resolve The 28 May 1998 Motion For Reconsideration Filed By The Intervenors," dated
March 2, 1999; are all DENIED with FINALITY. No further motion, pleading, or paper will be
entertained in this case.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 188299               January 23, 2013
HEIRS OF LUIS A. LUNA and REMEGIO A. LUNA, and LUZ LUNA-SANTOS, as represented by
their Attorney-in-fact, AUREA B. LUBIS, Petitioners,  x x x x8
vs.
RUBEN S. AFABLE, TOMAS M. AFABLE, FLORANTE A. EVANGELISTA, LEOVY S. EVANGELISTA,
JAIME M. ILAGAN ET, AL., Respondents.
DECISION
PEREZ, J.:
The power of local government units to convert or reclassify lands from agricultural to non-agricultural
prior to the passage of Republic Act (RA) No. 6657 – the Comprehensive Agrarian Reform Law (CARL)
– is not subject to the approv3l of the Department of Agrarian Reform (DAR).1 In this sense, the
authority of local government units to reclassify land before 15 June 1988 – the date of effectivity of
the CARL – may be said to be absolute.
Before the Court is a Petition for Review on Certiorari seeking to reverse and set aside the 13 March
2009 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 101114 and its 10 June 2009
Resolution3 denying petitioners’ motion for reconsideration.
The Facts
Petitioners are co-owners of a parcel of land covered by Transfer Certificate of Title (TCT) No. J-7205
(T-54199), with an area of 158.77 hectares, located in Barangay Guinobatan, Calapan City, Oriental
Mindoro.4 100.2856 hectares of the landholding was subjected to compulsory acquisition under the
Comprehensive Agrarian Reform Program (CARP) through a Notice of Land Valuation and Acquisition
dated 20 August 1998 issued by the Provincial Agrarian Reform Officer (PARO) and published in a
newspaper of general circulation on 29, 30 and 31 August 1998.5
Respondents were identified by the DAR as qualified farmer-beneficiaries; hence, the corresponding
Certificates of Land Ownership Award (CLOAs) were generated, issued to respondents and duly
registered in their names on 12 October 1998.6
On 21 October 1998, petitioners filed before the DAR Adjudication Board (DARAB) Oriental Mindoro a
Petition for "Cancellation of CLOAs, Revocation of Notice of Valuation and Acquisition and Upholding
and Affirming the Classification of Subject Property and Declaring the same outside the purview of RA
No. 6657."7 The petition was anchored mainly on the reclassification of the land in question into a light
intensity industrial zone pursuant to Municipal Ordinance No. 21, series of 1981, enacted by the
Sangguniang Bayan of Calapan, thereby excluding the same from the coverage of the agrarian law.
The Ruling of the DARAB Calapan City
In a Decision dated 26 August 1999, the DARAB disposed of the petition in the following manner:
IN THE LIGHT OF the foregoing, judgment is hereby rendered:
1. Ordering the Cancellation of Certificates of Land Ownership Award x x x issued by the
Department of Agrarian Reform in favor of private respondents pursuant to RA No. 6657
covering the subject parcel of land under TCT No. 5-7205 [sic] (T-54199) of the Registry of
Deeds for the Province of Oriental Mindoro, in the name of Luis Luna, et. al.,
2. Upholding and affirming the classification of the subject parcel of land into residential,
commercial and institutional uses pursuant to RA No. 2264 (Autonomy Act of 1959) and the
Local Government Code of 1991;
3. Declaring the farmholding in question outside the purview of Republic Act No. 6657;
The DARAB found that petitioners’ property is exempt from the CARP as it has been reclassified as
non-agricultural prior to the effectivity of Republic Act (RA) No. 6657. According to the DARAB, the
records of the case indicate that subject parcel of land was classified as within the residential,
commercial and industrial zone by the Sangguniang Bayan of Calapan, Oriental Mindoro through
Resolution No. 139, Series of 1981, enacted on 14 April 1981 as Municipal Ordinance No. 21.
Moreover, the Office of the City Assessor has also classified the property as residential, commercial
and industrial in use under the tax declaration covering the same. Finally, the Office of the Deputized
Zoning Administrator, Urban Planning and Development Office, Calapan City, issued a Certification on
25 September 1998 stating that "under Article III, Section 3, No. 7 of Resolution No. 139, Municipal
Ordinance No. 21, Series of 1981, areas covered by this [sic] provisions has [sic] been declared as
Light Intensity Industrial Zone prior to the approval of RA 6657 x x x."9
The DARAB cited Department of Justice (DOJ) Opinion No. 44, Series of 1990, which provides that a
parcel of land is considered non-agricultural and, therefore, beyond the coverage of the CARP, if it had
been classified as residential, commercial, or industrial in the city or municipality where the Land Use
Plan or zoning ordinance has been approved by the Housing and Land Use Regulatory Board (HLURB)
before 15 June 1988, the date of effectivity of RA No. 6657. The aforementioned Opinion of the DOJ
further states that all lands falling under this category, that is, lands already classified as commercial,
industrial or residential, before 15 June 1988 no longer need any conversion clearance from the DAR.10
Aggrieved, respondents appealed to the DARAB Central Office.
The Ruling of the DARAB Central Office
The Central Office of the DARAB found that its local office in Calapan City erred in declaring
petitioners’ property outside the coverage of the CARP by relying solely on the assertion of the
landowners that the land had already been reclassified from agricultural to non-agricultural prior to 15
June 1988.11
The DARAB held that the local Adjudicator misconstrued DOJ Opinion No. 44, Series of 1990 and, in
the process, overlooked DAR Administrative Order (AO) No. 2, Series of 1994 which provides the
grounds upon which CLOAs may be cancelled, among which is that the land is found to be exempt or
excluded from CARP coverage or is to be part of the landowner’s retained area as determined by the
Secretary of Agrarian Reform or his authorized representative. Thus, the DARAB concluded, the issue
of whether or not petitioners’ land is indeed exempt from CARP coverage is still an administrative
matter to be determined exclusively by the DAR Secretary or his authorized representative. In short,
an exemption clearance from the DAR is still required. In this connection, DAR AO No. 6 was issued on
27 May 1994 setting down the guidelines in the issuance of exemption clearance based on Section
3(c) of RA No. 6657 and DOJ Opinion No. 44, Series of 1990. Pursuant thereto, "any landowner or his
duly authorized representative whose lands are covered by DOJ Opinion No. 44-S-1990, and desires to
have an exemption clearance from the DAR, should file the application with the Regional Office of the
DAR where the land is located."12 (Underlining omitted)
Accordingly, the DARAB set aside the Decision dated 26 August 1999 of the DARAB Calapan City for
lack of jurisdiction and referred13 the case to the Regional Office of DAR Region IV for final
determination as to whether the land covered by TCT No. J-7205 (T-54199) in the names of Luis Luna,
et al. is exempt from CARP coverage.14
In an apparent response to the above ruling of the DARAB holding that petitioners still need an
exemption clearance from the DAR, petitioners filed an application for exemption from CARP coverage
of subject land.
The Ruling of the DAR
(On Petitioners’ Application for Exemption from CARP coverage)
In an Order dated 16 December 2003, then DAR Secretary Roberto M. Pagdanganan (Pagdanganan)
granted petitioners’ application for exemption based on the following findings:
In a joint ocular inspection and investigation conducted by the representatives of the Municipal
Agrarian Reform Office MARO, PARO and Regional Center for Land Use Policy, Planning and
ImplementationRCLUPPI on September 18 2003, disclosed the following findings:
1. The documents (HLURB and Deputized Zoning AdministratorDZA Certifications) show that
the whole 158 hectares is exempted from the coverage of RA 6657;
2. It is not irrigated;
3. The area where subject property is located can be considered as already urbanizing; and
4. The topography is generally flat and the property is traversed by a concrete highway
hence accessible to all means of land transportation.
xxxx
DOJ Opinion No. 44, Series of 1990 and the case of Natalia Realty vs. Department of Agrarian Reform
(12 August 1993/225 SCRA 278) opines (sic) that with respect to the conversion of agricultural lands
covered by RA No. 6657 to non-agricultural uses, the authority of the Department of Agrarian Reform
to approve such conversion maybe [sic] exercised from the date of its effectivity on 15 June 1988.
Thus, all lands that are already classified as commercial, industrial or residential before 15 June 1988
no longer need any conversion clearance. Moreover, Republic Act No. 6657 or the Comprehensive
Agrarian Reform Law (CARL), Section 3, Paragraph (c) defines "agricultural land" as referring to "land
devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential,
commercial or industrial land." The case before this Office clearly reveals that the subject property is
not within the agricultural zone prior to 15 June 1988.
The subject property has been zoned as light-industrial prior to the enactment of the Comprehensive
Agrarian Reform Program as shown by the various certifications issued by the HLURB15 and CPDC of
Calapan City, Mindoro stating that the subject properties were reclassified to light-industrial zone by
the City of Calapan, Mindoro and approved by the Human Settlements Regulatory Commission (now
HLURB) per Resolution No. R-39-04 on 31 July 1980.
In view of the foregoing, this Office finds the application to have fully complied with all the
documentary requirements for exemption set forth under DAR A.O. 6 Series of 1994 guidelines. x x
x.16
The application for exemption was, therefore, granted subject to the condition, among others, that
disturbance compensation shall be paid to affected tenants, farm workers, or bona fide occupants of
the land.17
Predictably, respondents filed a motion for reconsideration of the Order of exemption.
The Ruling of the DAR
(On Respondents’ Motion for Reconsideration)
In a Resolution dated 15 June 2004, former DAR Officer-in-Charge (OIC)-Secretary Jose Mari B. Ponce
(Ponce) granted respondents’ motion for reconsideration based on the following considerations:
Resolution No. R-39-4 Series of 1980 of the then Municipality of Calapan as conditionally approved by
Human Settlement Regulatory Commission (now HLURB) did not categorically place the entire
landholding for light-industrial. Section 1(f), Art. III of said resolution provided that:
"(f) I-1 Zone – Light Industrial are the following:
All lots 100 meters deep east and 200 meters deep west of Sto. Niño-Lumangbayan-Sapul Road from
the Teachers’ Village down to Barangay Guinobatan."
Resolution No. 151, City Ordinance No. 6 which declared the whole area of Barangay Guinobatan into
residential, commercial and institutional uses was approved by the Calapan City Council only on 23
June 1998. Furthermore, the Comprehensive Land Use Plan and Zoning for Calapan City was approved
by the Sangguniang Panlalawigan only in 2001 through Resolution No. 218, Series of 2001.
xxxx
x x x. Hence, in the case at hand, subject property is still within the ambit of the Comprehensive
Agrarian Reform Program since the same were [sic] reclassified only in 1998 through Resolution No.
151, City Ordinance No. 6, and was approved by the Sangguniang Panlalawigan only in 2001 through
Resolution No. 218, Series of 2001 long after the effectivity of RA 6657.18
Thus, the Order dated 16 December 2003 issued by DAR Secretary Pagdanganan was set aside,
revoked and cancelled.19
Petitioners filed a motion for reconsideration of this Resolution.
The Ruling of the DAR
(On Petitioners’ Motion for Reconsideration)
On 21 June 2006, the DAR, through then OIC Secretary Nasser C. Pangandaman (Pangandaman),
issued an Order denying petitioners’ motion for reconsideration on the following grounds:
On 13 October 2005, the CLUPPI Inspection Team, accompanied by the Municipal Agrarian Reform
Officer (MARO), Provincial Agrarian Reform Officer (PARO) and other DAR Field Personnel, conducted
an ocular inspection of the subject landholding and noted the following:
• The landholding is composed of four (4) parcels embraced under TCT No. J-7205, with an
area of 153.7713 hectares and located in Brgy. Guinobatan, Calapan City, Oriental Mindoro;
• The topography varies: Lot No. 612-D is flat, while Lot Nos. 612-A, 612-B and 612-C are
flat to hilly;
• There were no billboards visible in the premises;
• There were grasses, some fruit trees and vegetable, but generally, planted with rice;
• Tenants/farmworkers/protestants were present during the inspection;
• A spring was seen in the area, which serves as a source of water for the riceland and
irrigation canal;
• The provincial highway traverses the property;
• Surrounding areas are still agricultural in nature; and
• A newly constructed city hall was built in the riceland area covering a portion of five (5)
hectares out of the eighty (80)-hectare riceland area.
xxxx
A careful perusal of the facts and circumstances show that the petitioners failed to offer substantial
evidence that would warrant reversal of the Order.
Resolution No. R-39-4, Series of 1980 of the then Municipality of Calapan, conditionally approved by
Human Settlement Regulatory Commission, did not categorically place the entire landholding under
Light Industrial Zone. x x x.
xxxx
The Certification issued on 8 October 1998 by the Housing and Land Use Regulatory Board
(HLURB)20 proved that the property is still agricultural. The same provides that the landholding is
within the Light Industrial Zone (100 meters deep west and 200 meters deep east) of the Provincial
Road and the rest is Agricultural Zone based on the Zoning Ordinance approved by HLURB Resolution
No. R-9-34 dated 31 July 1980. It was re-classified into residential, commercial and institutional uses
pursuant to Sangguniang Panlungsod Resolution No. 151, Ordinance No. 6 only on 23 June 1998. The
1981 Ordinance, albeit approved by the HLURB, did not automatically reclassify the land. Physical
aspects of the landholding are actually agricultural as there are some fruit trees and generally, planted
with rice. Also, the surrounding areas are apparently agricultural in usage.
On 11 January 2006, the Municipal Agrarian Reform Officer (MARO) submitted a report stating that
the Light Industrial Zone which covers the fraction covering 100 meters deep west and 200 meters
deep east along the provincial road traversing the property areas which were declared in the HLURB
Certification dated 08 October 1998, were already covered by Presidential Decree No. 27. Thus, there
was already a vested right over the property and can no longer be covered by an Application for
Exemption Clearance.21
The Order dated 15 June 2004 granting the motion for reconsideration filed by the farmer-
beneficiaries was, therefore, affirmed in toto.
Petitioners, consequently, filed an appeal before the Office of the President.
The Ruling of the Office of the President
In its Decision dated 15 December 2006, the Office of the President found petitioners’ appeal
impressed with merit. It quoted with approval the findings and conclusions of former DAR Secretary
Pagdanganan in his Order of 16 December 2003.22
According to the Office of the President, contrary to the findings and conclusions of the DAR in its
Resolution dated 15 June 2004, the area where subject property is situated was really intended to be
classified, not as agricultural, as in fact it was declared as residential, commercial and institutional in
1998.23
Moreover, supervening events have transpired such that subjecting the property to CARP coverage
would already be inappropriate under the circumstances. The Sangguniang Panlungsod approved City
Ordinance No. 6, Resolution No. 151, declaring the whole area of Barangay Guinobatan into a
residential, commercial and industrial zone on 23 June 1998. The
Notice of Acquisition and Land Valuation covering 100.2856 hectares out of the 158.77 hectares total
land area of the property was issued by the DAR only on 20 August 1998. On 25 September 1998, a
Certification was issued by the City Planning and Development Officer/Deputized Zoning
Administrator, classifying subject property as within the Light Intensity Industrial Zone based on
Sangguniang Bayan Resolution No. 139, Municipal Ordinance No. 21, Series of 1981, Section 3 of RA
6657, DOJ Opinion No. 44, Series of 1990 and Sangguniang Panlungsod Ordinance No. 6, Series of
1998. The application for exemption from CARP coverage filed by petitioners was initially granted by
the DAR in 2003. The Certificate of Zoning Classification dated 18 December 2003 issued by the
Zoning and Land Use Division of the Urban Planning and Development Department classifies the
subject property as an urban Development Zone, based on City Resolution No. 231, Ordinance No. 4,
Series of 1999 and Sangguniang Panlalawigan Resolution No. 218, Series of 2001.24
The Office of the President further held that from the time portions of subject property were declared
to be within the Light Intensity Industrial Zone in 2003, it was never established that it had been
devoted to agricultural purposes. Besides, the confirmation of its falling within the residential,
commercial and industrial zone was ahead of the Notice of Acquisition. It would not be proper to
subject a residential, commercial and industrial property to CARP anymore.25
In conclusion, the Office of the President declared that the 16 December 2003 Order of the DAR is
more in accord with the facts and law relevant to the case. Hence, it set aside, revoked and cancelled
the Resolution and Order, dated 15 June 2004 and 21 June 2006, respectively, of former DAR OIC-
Secretaries Ponce and Pangandaman and reinstated the Order dated 16 December 2003 of Secretary
Pagdanganan.26
The motion for reconsideration and second motion for reconsideration of respondents were
respectively denied by the Office of the President in a Resolution27 dated 12 June 2007 and an
Order28 dated 13 September 2007.
Respondents then appealed to the CA.
The Ruling of the Court of Appeals
In a Decision dated 13 March 2009, the CA granted the appeal based on a finding that the ruling of
the Office of the President is not supported by substantial evidence.29
According to the CA, it is clear from the 1981 Ordinance of the Sangguniang Bayan of Calapan that
only those lots 100 meters deep west and 200 meters deep east of the Sto. Niño-Lumangbayan-Sapul
Road from the Teachers’ Village Subdivision to Barangay Guinobatan, and not the entire Barangay
Guinobatan, was classified into light intensity industrial zone. If the intention were to classify the
entire Barangay Guinobatan into a light intensity industrial zone, then the 1981 Ordinance should have
provided so, instead of limiting the areas so classified based on the reference points of the lots that
would be affected thereby.30
Citing the case of Natalia Realty, Inc. v. Department of Agrarian Reform,31 wherein it was held that
lands not devoted to agricultural activity, including lands previously converted to non-agricultural uses
by government agencies other than the DAR prior to the effectivity of the CARL, are outside the
coverage of the CARL, the Court of Appeals ruled that in this case, there is no showing that subject
property was in fact included in the classification of light intensity industrial zone prior to 15 June
1988, the date of effectivity of the CARL.32
The CA further held that the fact that the Sangguniang Panlungsod of the City of Calapan later on
enacted Resolution No. 151 as City Ordinance No. 6 on 23 June 1998, declaring the whole area of
Barangay Guinobatan as residential, commercial and institutional areas and site of the new City
Government Center for the City of Calapan does not automatically convert the property into a non-
agricultural land exempt from the coverage of the agrarian law. It bears stressing that the 1998
Ordinance was enacted after the effectivity of the CARL and, in order to be exempt from CARP
coverage, the land must have been classified as industrial/residential before 15 June 1988.33
The CA likewise cited with approval the findings and conclusions of then DAR OIC-Secretaries Ponce
and Pangandaman in their respective decisions and concluded that the Office of the President gravely
erred when it ignored the findings in the 15 June 2004 Resolution and 21 June 2006 Order of the DAR.
Said the CA:
x x x The Office of the President cannot simply brush aside the DAR’s pronouncements regarding the
status of the subject property as not exempt from CARP coverage considering that the DAR has
unquestionable technical expertise on these matters. Factual findings of administrative agencies are
generally accorded respect and even finality by this Court, if such findings are supported by
substantial evidence, a situation that obtains in this case. The factual findings of the Secretary of
Agrarian Reform who, by reason of his official position, has acquired expertise in specific matters
within his jurisdiction, deserve full respect and, without justifiable reason, ought not to be altered,
modified or reversed.34
Thus, the Decision dated 15 December 2006, Resolution dated 12 June 2007, and Order dated 13
September 2007 of the Office of the President were reversed and set aside. The Resolution dated 15
June 2004 of former DAR OIC-Secretary Ponce and the Order dated 21 June 2006 of then DAR OIC-
Secretary Pangandaman were reinstated.
Hence, this petition for review wherein petitioners seek the reversal of the aforementioned decision on
the ground, among others, that the Honorable Court of Appeals gravely erred in holding that the
Decision dated 15 December 2006 of the Office of the President is not supported by substantial
evidence.35
The Issue
The core issue for resolution is whether the land subject of this case had been reclassified as non-
agricultural as early as 1981, that is, prior to the effectivity of the CARL and, therefore, exempt from
its coverage.
Our Ruling
At the outset, it must be pointed out that the determination of the issue presented in this case
requires a review of the factual findings of the DAR, of the Office of the President and of the CA.
It is well settled that in a petition for review on certiorari under Rule 45 of the Rules of Court, only
questions of law may be raised.36 This Court, in numerous instances, has had occasion to explain that
it is not its function to analyze or weigh evidence all over again.37 As a rule, the Court respects the
factual findings of the CA and of quasi-judicial agencies like the DAR, giving them a certain measure of
finality.38 There are, however, recognized exceptions to this rule, one of which is when the findings of
fact are conflicting.
The records of this case show that each of the agencies which rendered a ruling in this case – from the
DARAB local office to the CA – arrived at different findings and conclusions, with each body
overturning the decision of the one before it. Thus, due to the divergence of the findings of the DARAB
local office on the one hand, and the DARAB Central Office on the other, and considering the
conflicting findings of former DAR Secretaries and the disparity between the findings of fact of the
Office of the President and of the CA, we are constrained to re-examine the facts of this case based on
the evidence presented by both parties.
After an assiduous review of the records of this case, this Court concludes that petitioners’ land is
outside the coverage of the agrarian reform program.
At the core of the present controversy is Resolution No. 139, later on enacted as Ordinance No. 21,
series of 1981 by the Sangguniang Bayan of Calapan, Oriental Mindoro at its regular session on 14
April 1981 and subsequently amended at its special session of 20 October 1981.39 Ordinance No. 21
revised the comprehensive zoning regulations of the then Municipality of Calapan. Article III, Section
3, No. 7 of the ordinance provides:
I-1 Zone
Light intensity industrial zone are the following:
All lots 100 meters deep west and 200 meters deep east of Sto. Niño-Lumangbayan-Sapul Road from
the Teachers’ Village Subdivision to Barangay Guinobatan.40
Petitioners maintain that their landholding falls within the area classified as light intensity industrial
zone, as specified in the afore-quoted provision of the ordinance. Respondents, on the other hand,
insist otherwise. The settlement of this issue is crucial in determining whether the subject landholding
is within or outside the coverage of the CARL.
Section 4 of RA No. 6657 states that the coverage of the CARL is as follows:
SEC. 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. x x x;
(b) All lands of the public domain in excess of the specific limits as determined by Congress
in the preceding paragraph;
(c) All private lands devoted to or suitable for agriculture regardless of the agricultural
products raised or that can be raised thereon. (Emphasis supplied)
"Agricultural land" is defined under Section 3(c) of the CARL as that which is "devoted to agricultural
activity x x x and not classified as mineral, forest, residential, commercial or industrial land."
The meaning of "agricultural lands" covered by the CARL was explained further by the DAR in its AO
No. 1, Series of 1990, dated 22 March 1990, entitled "Revised Rules and Regulations Governing
Conversion of Private Agricultural Land to Non-Agricultural Uses," issued pursuant to Section 4941 of
the CARL.42 Thus:
Agricultural land refers to those devoted to agricultural activity as defined in RA 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. (Emphasis supplied)43
It is clear from the last clause of the afore-quoted provision that a land is not agricultural, and
therefore, outside the ambit of the CARP if the following conditions concur:
1. the land has been classified in town plans and zoning ordinances as residential, commercial or
industrial; and
2. the town plan and zoning ordinance embodying the land classification has been approved by the
HLURB or its predecessor agency prior to 15 June 1988.
It is undeniable that local governments have the power to reclassify agricultural into non-agricultural
lands.44Section 345 of RA No. 2264 (The Local Autonomy Act of 1959) specifically empowers municipal
and/or city councils to adopt zoning and subdivision ordinances or regulations in consultation with the
National Planning Commission.46By virtue of a zoning ordinance, the local legislature may arrange,
prescribe, define, and apportion the land within its political jurisdiction into specific uses based not
only on the present, but also on the future projection of needs.47 It may, therefore, be reasonably
presumed that when city and municipal boards and councils approved an ordinance delineating an
area or district in their cities or municipalities as residential, commercial, or industrial zone pursuant to
the power granted to them under Section 3 of the Local Autonomy Act of 1959, they were, at the
same time, reclassifying any agricultural lands within the zone for non-agricultural use; hence,
ensuring the implementation of and compliance with their zoning ordinances.48
The regulation by local legislatures of land use in their respective territorial jurisdiction through zoning
and reclassification is an exercise of police power.49 The power to establish zones for industrial,
commercial and residential uses is derived from the police power itself and is exercised for the
protection and benefit of the residents of a locality.50 Ordinance No. 21 of the Sangguniang Bayan of
Calapan was issued pursuant to Section 3 of the Local Autonomy Act of 1959 and is, consequently, a
valid exercise of police power by the local government of Calapan.
The second requirement – that a zoning ordinance, in order to validly reclassify land, must have been
approved by the HLURB prior to 15 June 1988 – is the result of Letter of Instructions No. 729, dated 9
August 1978. According to this issuance, local governments are required to submit their existing land
use plans, zoning ordinances, enforcement systems and procedures to the Ministry of Human
Settlements – one of the precursor agencies of the HLURB – for review and ratification.51
Ordinance No. 21 was based on the Development Plan for the then Municipality of Calapan and on the
Zone District Plan prepared by its Municipal Development Staff. The Plans were adopted by the
Sangguniang Bayan of Calapan through a Resolution on 14 April 1980.52 The same were granted
approval by the HLURB through Resolution No. R-39-4, series of 1980, dated 31 July 1980.53
Based on the foregoing, there is no doubt that Ordinance No. 21 validly reclassified the area identified
therein as "100 meters deep west and 200 meters deep east of Sto. Niño-Lumangbayan-Sapul Road
from the Teachers’ Village Subdivision to Barangay Guinobatan" into a light intensity industrial zone,
making the same exempt from CARL coverage.
The next – and more crucial – question to be settled now is whether or not petitioners’ landholding
falls within the reclassified zone, thereby taking it out of the coverage of the CARL.
In resolving the issue in the affirmative, former DAR Secretary Pagdanganan relied primarily on the
respective Certifications issued by the Office of the Deputized Zoning Administrator, Urban Planning
and Development Department of Calapan City54 and by the Housing and Urban Development
Coordinating Council (HUDCC),55 and considered subject property as having "been zoned as light-
industrial prior to the enactment of the Comprehensive Agrarian Reform Program." Secretary
Pagdanganan consequently granted petitioners’ application for exemption pursuant to DAR AO No. 6,
Series of 1994.56 This issuance was released by the DAR following DOJ Opinion No. 44, Series of
1990,57 wherein the Secretary of the DOJ opined that "with respect to conversions of agricultural lands
covered by RA 6657 to non-agricultural uses, the authority of the DAR to approve such conversions
may be exercised from the date of the law’s effectivity on June 15, 1998." Thus, AO No. 6 states that
"all lands that were already classified as commercial, industrial or residential before 15 June 1988 no
longer need any conversion clearance." Designed "to streamline the issuance of exemption clearances,
based on DOJ Opinion No. 44," the AO laid down the procedure and guidelines for the issuance of
exemption clearances58 for landowners whose lands are covered by DOJ Opinion No. 44, Series of
1990 and desire to obtain an exemption clearance from the DAR. Such exemption clearance does not
mean that the DAR Secretary is exempting the land from CARL coverage, with the implication that the
land was previously covered; it simply means that the CARL itself has, from the start, excluded the
land from CARL coverage, and the DAR Secretary is only affirming such fact.
The exemption order of Secretary Pagdanganan found petitioners’ application to have fully complied
with the documentary requirements for exemption set forth under AO No. 6, the more important of
which are the Certifications from the Deputized Zoning Administrator and the HUDCC stating that
petitioners’ property falls within the Light Intensity Industrial Zone of Calapan City.
Incidentally, what AO No. 6 requires is a certification from the HLURB. Although what petitioners
submitted was a certification from the HUDCC, Secretary Pagdanganan apparently considered the
same as sufficient compliance with the requirements of AO No. 6 and in fact never referred to the
certification as coming from the HUDCC but was consistently identified as "certification from the
HLURB" throughout his order. We see nothing irregular in this considering that the HLURB is an
agency under the HUDCC59 and especially since the Certification of the HUDCC is itself "based on the
Zoning Ordinance approval by HLURB Resolution No. R-39-4 dated 31 July 1980."
In contrast to the exemption order issued by Secretary Pagdanganan, the resolution and order,
respectively, of OIC Secretaries Ponce and Pangandaman – which the CA cited with approval – relied
mainly on certifications declaring that the property is irrigated or has a slope of below 18% and on an
ocular inspection report stating that the property is generally covered with rice and that the
surrounding areas are still agricultural, as bases for their conclusion that subject land is agricultural
and, therefore, covered by the CARL. These matters, however, no longer bear any significance in the
light of the certifications of the Deputized Zoning Administrator and the HUDCC testifying to the non-
agricultural nature of the landholding in question.
The CARL, as amended, is unequivocal that only lands devoted to agricultural activity and not
classified as mineral, forest, residential, commercial or industrial land are within its scope. Thus, the
slope of the land or the fact of its being irrigated or non-irrigated becomes material only if the land is
agricultural, for purposes of exempting the same from the coverage of the agrarian law. However, if
the land is non-agricultural – as is the case of the property here under consideration – the character
and topography of the land lose significance.
It must likewise be emphasized that, since zoning ordinances are based not only on the present, but
also on the future projection of needs of a local government unit, when a zoning ordinance is passed,
the local legislative council obviously takes into consideration the prevailing conditions in the area
where the land subject of reclassification is situated. Accordingly, when the then Sangguniang Bayan
of Calapan enacted Ordinance No. 21, there is reasonable ground to believe that the district subject of
the reclassification, including its environs, was already developing. Thus, as found by the Office of the
President: "we find that the area where subject property is situated was really intended to be
classified not as agricultural, as in fact it was declared as a residential, commercial and institutional in
1998."60
The CA, agreeing with the finding of OIC Secretary Pangandaman, and quoting from the OIC
Secretary’s order, held that the Certification of the HUDCC "proved that the property is still
agricultural."
A careful scrutiny of the aforementioned certification reveals, however, that contrary to the findings of
OIC Secretary Pangandaman and the CA, the certification, in fact, proves that petitioners’ land falls
within the area classified as light intensity industrial zone. Quoted hereunder are the pertinent
portions of the certification:
This is to certify that a parcel of land with a total area of 1,587,713 square meters and situated at
Brgy. Guinobatan, Calapan City, Oriental Mindoro, a portion of which is approximately 1,537,713
square meters is applied for Zoning Certification as shown in the vicinity map submitted by the
applicant appears to be within the LIGHT INDUSTRIAL ZONE (100 meters deep west and 200 meters
deep east) of the Provincial Road and the rest is AGRICULTURAL ZONE based on the Zoning Ordinance
approval by HLURB Resolution No. R-39-4 dated 31 July 1980. (Emphasis supplied)
Submitted Transfer Certificate of Title described as:
TCT NO. LOT NO. AREA (sq.m.) REGISTERED OWNER
J-7205 612 1,531,713 (sic) Luis A. Luna, et al.
x x x x61
Based on the foregoing, 1,537,713 square meters (sq. ms.) out of the 1,587,713 sq. ms. total area of
petitioners’ property have been zoned as light industrial and only 50,000 sq. ms. apparently remain
agricultural. Considering, however, the certification of the Deputized Zoning
Administrator of the Urban Planning and Development Department of Calapan City, this Court finds
and so holds that the entire landholding has been classified as light intensity industrial zone pursuant
to Ordinance No. 21.
The court is inclined to give more evidentiary weight to the certification of the zoning administrator
being the officer having jurisdiction over the area where the land in question is situated and is,
therefore, more familiar with the property in issue. Besides, this certification carried the presumption
of regularity in its issuance62 and respondents have the burden of overcoming this presumption.
Respondents, however, failed to present any evidence to rebut that presumption.
Accordingly, since specialized agencies, such as the HUDCC and the Office of the Deputized Zoning
Administrator tasked to determine the classification of parcels of land have already certified that the
subject land is industrial, the Court must accord such pronouncements great respect, if not finality, in
the absence of evidence to the contrary.63
Respondents insist that petitioners’ landholding is not included in the light intensity industrial zone
under Ordinance No. 21, yet, they never submitted any evidence to support their contention. No
maps, such as a zoning map or a land use map, clearly showing that petitioners’ property lies outside
the reclassified area were presented by respondents. Instead, what they presented were: (1) a
certification from the Provincial Irrigation Manager stating that several of the respondents were listed
as beneficiaries of the Calapan Dam Irrigators’ Association; (2) a certification from the Municipal
Agriculturist of Calapan declaring that the property is irrigated; (3) photographs of the irrigation
system covering the subject landholding; (4) a letter from the Chief of the Land Management Service
of the DENR Region IV stating that the entire 158.77 hectares of the land in question falls under 18%
slope;64 (5) photographs showing that the property is generally planted with rice;65 and other
documents which, however, do not prove nor support their claim that the property has not been
reclassified into non-agricultural use.
Respondents, however, did submit in the proceedings before then DAR OIC Secretary Ponce an
"approved survey plan" commissioned by the DAR allegedly "showing that only about 20 hectares or
so would be covered by" Ordinance No. 21. A copy of this plan was nevertheless not attached to the
records of this case thereby making it impossible for this Court to examine the same and draw its own
conclusions therefrom.
At any rate, as already adverted to above, the certification of the deputized zoning administrator
carries more weight by reason of his special knowledge and expertise and the matter under
consideration being under his jurisdiction and competence. He is, therefore, in a better position to
attest to the classification of the property in question.
The best evidence respondents could have presented was a map showing the metes and bounds and
definite delineations of the subject land. Since respondents failed to do so, this Court is bound to rely
on the certifications of the appropriate government agencies with recognized expertise on the matter
of land classification. Thus, through the certifications issued by the deputized zoning administrator of
Calapan City and by the HUDCC, petitioners were able to positively establish that their property is no
longer agricultural at the time the CARL took effect and, therefore, cannot be subjected to agrarian
reform.
A final note: In his Order dated 21 June 2006, then OIC Secretary Pangandaman made mention of a
"report" issued by the MARO of Calapan City claiming that the area covering 100 meters deep west
and 200 meters deep east along the provincial road traversing the property which was declared in the
HUDCC certification dated 8 October 1998 as light industrial has already been covered by Presidential
Decree No. 27.66 Thus, Secretary Pangandaman concluded, there were already vested rights over the
property and can no longer be covered by an application for exemption.
The records of this case, however, do not contain a copy of the aforementioned report.1âwphi1 Thus,
the Court is unable to scrutinize the same and make a definite ruling thereon.
In any case, an examination of the records of this case show that the earliest document evidencing
coverage under the CARP of the land subject of this dispute is the published Notice of Land Valuation
and Acquisition dated 20 August 1998. Prior thereto, all documents in connection with the compulsory
acquisition of land for agrarian reform pertain to land covered by TCT No. T-18192 with an area of 161
hectares, purportedly in the name of Mariquita A. Luna.67 Clearly, this land is different from the land
subject of this case which is covered by TCT No. J-7205 (T-54199). It may, therefore, be reasonably
presumed that the report adverted to refers to the land covered by TCT No. T-18192 and not to the
property under consideration herein.
The Office of the President was, consequently, correct when it revoked the resolution and order,
respectively, of former OIC Secretaries Ponce and Pangandaman and declared that the Order of then
Secretary Pagdanganan was more in accord with the facts and the law applicable to the case at bar.
Thus, the CA clearly erred when it held that the findings and conclusion of the Office of the President
are not supported by substantial evidence.
WHEREFORE, the Court GRANTS the petition and REVERSES and SETS ASIDE the Decision dated 13
March 2009 and the Resolution dated 10 June 2009 of the Court of Appeals in CA-G.R. SP. No.
101114. The Decision of the Office of the President dated 15 December 2006 is hereby REINSTATED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 189874               September 4, 2013
RODULFO VALCURZA AND BEATRIZ LASAGA, SPOUSES RONALDO GADIAN & JULIETA
TAGALOG, SPOUSES ALLAN VALCURZA AND GINA LABADO, SPOUSES ROLDAN JUMAWAN
AND RUBY VALCURZA, SPOUSES EMPERATREZ VALCURZA AND ENRIQUE VALCURZA, CIRILA
PANTUHAN, SPOUSES DANIEL VALCURZA AND JOVETA RODELA, SPOUSES LORETO NAELGA
AND REMEDIOS DAROY, SPOUSES VERGILIO VALCURZA AND ROSARIO SINELLO, SPOUSES
PATRICIO EBANIT AND OTHELIA CABANDAY, SPOUSES ABNER MEDIO AND MIRIAM
TAGALOG, SPOUSES CARMEN MAGTRAYO AND MEDIO MAGTRAYO, SPOUSES MARIO
VALCURZA AND EDITHA MARBA, SPOUSES ADELARDO VALCURZA AND PRISCILLA LAGUE,
SPOUSES VICTOR VALCURZA AND MERUBELLA BEHAG, AND SPOUSES HENRY MEDIO AND
ROSALINDA ALOLHA, PETITIONERS, 
vs.
ATTY. CASIMIRO N. TAMPARONG, JR., RESPONDENT.
DECISION
SERENO, CJ.:
Before us is a Petition for Review on Certiorari1 of the Decision2 dated 24 September 2009 issued by
the Court of Appeals (CA) in CA-G.R. SP No. 01244-MIN. The CA reversed and set aside the
Decision3 dated 26 April 2005 of the Department of Agrarian Reform and Adjudication Board (DARAB)
and reinstated the Decision4 dated 2 January 2002 of the Provincial Agrarian Reform and Adjudication
Board (PARAB).
Casimiro N. Tamparong, Jr. (respondent) is the registered owner of a landholding with an area of
412,004 square meters5 and covered by Original Certificate of Title (OCT) No. 0-3636 pursuant to a
judicial decree rendered on 24 June 1962.7 The Sangguniang Bayan of Villanueva, Misamis Oriental
allegedly passed a Comprehensive Zoning Ordinance - Resolution No. 51-98, Series of 1982 -
classifying respondent’s land from agricultural to industrial.8
A Notice of Coverage was issued by the Department of Agrarian Reform (DAR) on 3 November 1992
over 276,411 square meters out of the 412,004 square meters of respondent’s land. The 276,411
square meters of land were collectively designated as Lot No. 1100.9 The DAR Secretary eventually
issued Certificate of Land Ownership Award (CLOA) No. 00102751 over the land in favor of Rodulfo
Valcurza, Beatriz Lasaga, Ronaldo Gandian, Julieta Tagalog, Allan Valcurza, Gina Labado, Roldan
Jumawan, Ruby Valcurza, Emperatrez Valcurza, Enrique Valcurza, Cirila Pantuhan, Daniel Valcurza,
Joveta Rodela, Loreto Naelga, Remedios Daroy, Vergilio Valcurza, Rosario Sinello, Patricio Ebanit,
Othelia Cabanday, Abner Medio, Miriam Tagalog, Carmen Magtrayo, Medio Magtrayo, Mario Valcurza,
Editha Marba, Adelardo Valcurza, Priscilla Lague, Victor Valcurza, Merubella Behag, Henry Medio, and
Rosalinda Alolha (petitioners).10 As a result, OCT No. E-4640 was issued in favor of petitioners on 30
May 1994.11
Respondent filed a protest against the Comprehensive Agrarian Reform Program (CARP) coverage on
the ground that his land was industrial, being found within the industrial estate of PHIVIDEC per
Zoning Ordinance No. 123, Series of 1997.12 His protest was resolved in a Resolution13 issued by
Regional Director Benjamin R. de Vera on 9 October 2000. The Resolution denied respondent’s protest
because Zoning Ordinance No. 123, Series of 1997, never unequivocally stated that all the
landholdings within the PHIVIDEC area had been classified as industrial. Furthermore, the Municipal
Planning and Development Council of Villanueva, Misamis Oriental, issued a letter to the Municipal
Agrarian Reform Office (MARO) stating that Lot No. 1100 was classified as agricultural per Municipal
Ordinance No. 51-98, Series of 1982. Also, PHIVIDEC certified that the same lot is located outside the
PHIVIDEC Industrial Estate.14
Aggrieved, respondent filed a Complaint for Annulment of Certificate of Land Ownership Award No.
00102751 and Cancellation of OCT No. E-4640 with Prayer for the Issuance of a Writ of Preliminary
Injunction and/or Temporary Restraining Order.15 In the Complaint filed with the Provincial
Adjudication Reform and Adjudication Board (PARAB) of Misamis Oriental on 6 July 2001, he
questioned the issuance of the CLOA on the ground that his land had long been classified by the
municipality as industrial. It was also covered by Presidential Proclamation No. 1962, being adjacent
to the PHIVIDEC Industrial Estate, and was thus exempted from CARP coverage.16
The PARAB declared that Comprehensive Zoning Ordinance No. 51-98, Series of 1982 had reclassified
Lot No. 2252 from agricultural to industrial land prior to the effectivity of the Comprehensive Agrarian
Reform Law. It held that the complaint was not a protest or an application for exemption, but also for
annulment and cancellation of title over which DARAB had jurisdiction. As the PARAB exercised
delegated authority from the DARAB, it was but proper for the former to rule on the complaint.17 In
the exercise of this jurisdiction, the PARAB found the CARP coverage irregular and anomalous because
the issuance of the CLOA, as well as its registration with the Register of Deeds, happened before the
survey plan was approved by the DENR.18 The dispositive portion of the Decision is as follows:
WHEREFORE, premises considered, Decision is hereby rendered in favor of the plaintiff Casimiro N.
Tamparong, Jr. and against the defendants ordering as follows:
1. The immediate annulment and cancellation of CLOA No. 00102751 and OCT No. E-4640,
and all other derivative titles that may have been issued pursuant to, in connection with,
and by reason of the fraudulent and perjured coverage of the disputed land by the DAR;
2. The cancellation of Subdivision Plan Bsd-10-002693 (AR); and
3. The ejectment of the sixteen (16) private-defendants farmer beneficiaries led by Sps.
Rodulfo Valcurza, et al. from the disputed landholding and to surrender their possession
thereof to the plaintiff.19
On appeal, the DARAB held that the identification of lands that are subject to CARP and the
declaration of exemption therefrom are within the exclusive jurisdiction of the DAR Secretary. As the
grounds relied upon by petitioners in their complaint partook of a protest against the coverage of the
subject landholding from CARP and/or exemption therefrom, the DARAB concluded that the DAR
Secretary had exclusive jurisdiction over the matter.20Hence, the DARAB reversed the PARAB,
maintained the validity of the CLOA, and dismissed the complaint for lack of merit.21
Dissatisfied, respondent filed a Petition for Review under Rule 43 with the CA, which ruled that the
annulment of duly registered CLOAs with the Land Registration Authority falls within the exclusive
jurisdiction of the DARAB and not of the regional director. Furthermore, the subject landholding was
considered industrial because of a zoning classification issued by the Municipal Council of Villanueva,
Misamis Oriental, prior to 15 June 1988. This ruling is consistent with the power of local governments
to reclassify lands through a local ordinance, which is not subject to DAR’s approval.22
Thus, this Petition.
Petitioners claim that respondent’s complaint before the PARAB concerns the DAR’s implementation of
the agrarian law and implementation of CLOA as an incident thereof.23 The PARAB had no jurisdiction,
because matters strictly involving the administrative implementation of the CARL and other agrarian
laws are the exclusive prerogative of and are cognizable by the DAR Secretary.24 Yet, supposing that
PARAB had jurisdiction, its authority to cancel CLOAs is based on the ground that the land was found
to be exempted or excluded from CARP coverage by the DAR Secretary or the latter’s authorized
representatives, which is not the case here.25 The subject landholding has also been declared as
agricultural by various government agencies as evidenced by the Department of Environment and
Natural Resources-City Environment and Natural Resources Office Certification declaring the land to be
alienable and disposable and not covered by any public land application; by the PHIVIDEC Industrial
Authority Certification that the land is outside the industrial area of PHIVIDEC; and by the letter of the
Deputized Zoning Administrator of Villanueva, Misamis Oriental, saying that the land is classified as
agricultural.26 Moreover, the Resolution and Zoning Ordinance reclassifying the land from agricultural
to industrial was not shown to have been approved by the Housing and Land Use Regulatory Board
(HLURB) or cleared by the DAR as required by DAR Administrative Order No. 1, Series of 1990.27
In a Resolution dated 11 January 2010, we required respondent to comment, which he did.28 Upon
noting his Comment, we asked petitioners to file their reply, and they complied.29
The determination of issues brought by petitioners before this Court revolves around the sole question
of whether the DARAB has jurisdiction over the subject matter of the case.
We rule in the negative.
The jurisdiction of a court or tribunal over the nature and subject matter of an action is conferred by
law.30 The court or tribunal must look at the material allegations in the complaint, the issues or
questions that are the subject of the controversy, and the character of the relief prayed for in order to
determine whether the nature and subject matter of the complaint is within its jurisdiction.31 If the
issues between the parties are intertwined with the resolution of an issue within the exclusive
jurisdiction of a court or tribunal, the dispute must be addressed and resolved by the said court or
tribunal.32
Section 50 of Executive Order (E.O.) No. 229 vests the DAR with quasi-judicial powers to determine
and adjudicate agrarian reform matters, as well as with exclusive original jurisdiction over all matters
involving the implementation of agrarian reform. The jurisdiction of the DAR over the adjudication of
agrarian reform cases was later on delegated to the DARAB,33 while the former’s jurisdiction over
agrarian reform implementation was assigned to its regional offices. 34
The DARAB’s New Rules of Procedure issued in 1994, which were in force at the time of the filing of
the complaint, provide, in pertinent part:
Section 1. Primary and Exclusive Original and Appellate Jurisdiction. – The Board shall have primary
and exclusive jurisdiction, both original and appellate, to determine and adjudicate all agrarian
disputes involving the implementation of the Comprehensive Agrarian Reform Program (CARP) under
Republic Act No. 6657, Executive Order Nos. 228, 229 and 129-A, Republic Act No. 3844 as amended
by Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing
rules and regulations. Specifically, such jurisdiction shall include but not be limited to cases involving
the following:
xxxx
f) Those involving the issuance, correction and cancellation of Certificates of Land Ownership Award
(CLOAs) and Emancipation Patents (EPs) which are registered with the Land Registration Authority x x
x. (Emphases supplied)
Section 3(d) of Republic Act (R.A.) No. 6657 defines an agrarian dispute as
x x x 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. (Emphasis supplied)
A tenurial arrangement exists when the following are established:
1)
The parties are the landowner and the tenant or agricultural lessees;
2)
The subject matter of the relationship is an agricultural land;
3)
There is consent between the parties to the relationship;
4)
The purpose of the agricultural relationship is to bring about agricultural production;
5)
There is personal cultivation on the part of the tenant or agricultural lessees; and
6)
The harvest is shared between the landowner and the tenant or agricultural lessee.35
Thus, the DARAB has jurisdiction over cases involving the cancellation of registered CLOAs relating to
an agrarian dispute between landowners and tenants. However, in cases concerning the cancellation
of CLOAs that involve parties who are not agricultural tenants or lessees – cases related to the
administrative implementation of agrarian reform laws, rules and regulations - the jurisdiction is with
the DAR, and not the DARAB.36
Here, petitioner is correct in alleging that it is the DAR and not the DARAB that has
jurisdiction.1âwphi1 First, the issue of whether the CLOA issued to petitioners over respondent’s land
should be cancelled hinges on that of whether the subject landholding is exempt from CARP coverage
by virtue of two zoning ordinances. This question involves the DAR’s determination of whether the
subject land is indeed exempt from CARP coverage – a matter involving the administrative
implementation of the CARP Law. Second, respondent’s complaint does not allege that the prayer for
the cancellation of the CLOA was in connection with an agrarian dispute. The complaint is centered on
the fraudulent acts of the MARO, PARO, and the regional director that led to the issuance of the
CLOA.37
Also, the elements showing that a tenurial relationship existed between respondent and petitioners
were never alleged, much less proven. In reality, respondent only mentioned petitioners twice in his
complaint. Although he admitted that they occupied his land, he did not specify the nature of his
relationship with them. He only said that their stay on his land was based on mere
tolerance.38 Furthermore, the only other instance when respondent mentioned petitioners in his
complaint was when they informed him that he could no longer harvest the fruits of the land, because
they were already the owners thereof. He never stated the circumstances that would have shown that
the harvest of the fruits was in relation to a tenurial arrangement.39
Nevertheless, assuming arguendo that the DARAB had jurisdiction, the CA was mistaken in upholding
the PARAB’s Decision that the land is industrial based on a zoning ordinance, without a prior finding on
whether the ordinance had been approved by the HLURB. We ruled in Heirs of Luna v. Afable as
follows:40
The meaning of "agricultural lands" covered by the CARL was explained further by the DAR in its AO
No. 1, Series of 1990, dated 22 March 1990, entitled "Revised Rules and Regulations Governing
Conversion of Private Agricultural Land to Non-Agricultural Uses," issued pursuant to Section 49 of the
CARL. Thus:
Agricultural land refers to those devoted to agricultural activity as defined in RA 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. (Emphasis omitted)
It is clear from the last clause of the afore-quoted provision that a land is not agricultural, and
therefore, outside the ambit of the CARP if the following conditions concur:
1. the land has been classified in town plans and zoning ordinances as residential,
commercial or industrial; and
2. the town plan and zoning ordinance embodying the land classification has been approved
by the HLURB or its predecessor agency prior to 15 June 1988. AIDTHC
It is undeniable that local governments have the power to reclassify agricultural into non-agricultural
lands. Section 3 of RA No. 2264 (The Local Autonomy Act of 1959) specifically empowers municipal
and/or city councils to adopt zoning and subdivision ordinances or regulations in consultation with the
National Planning Commission. By virtue of a zoning ordinance, the local legislature may arrange,
prescribe, define, and apportion the land within its political jurisdiction into specific uses based not
only on the present, but also on the future projection of needs. It may, therefore, be reasonably
presumed that when city and municipal boards and councils approved an ordinance delineating an
area or district in their cities or municipalities as residential, commercial, or industrial zone pursuant to
the power granted to them under Section 3 of the Local Autonomy Act of 1959, they were, at the
same time, reclassifying any agricultural lands within the zone for non-agricultural use; hence,
ensuring the implementation of and compliance with their zoning ordinances.
The regulation by local legislatures of land use in their respective territorial jurisdiction through zoning
and reclassification is an exercise of police power. The power to establish zones for industrial,
commercial and residential uses is derived from the police power itself and is exercised for the
protection and benefit of the residents of a locality. Ordinance No. 21 of the Sangguniang Bayan of
Calapan was issued pursuant to Section 3 of the Local Autonomy Act of 1959 and is, consequently, a
valid exercise of police power by the local government of Calapan.
The second requirement — that a zoning ordinance, in order to validly reclassify land, must have been
approved by the HLURB prior to 15 June 1988 — is the result of Letter of Instructions No. 729, dated
9 August 1978. According to this issuance, local governments are required to submit their existing
land use plans, zoning ordinances, enforcement systems and procedures to the Ministry of Human
Settlements — one of the precursor agencies of the HLURB — for review and ratification. (Emphasis
supplied)
Here, the records of the case show the absence of HLURB Certifications approving Comprehensive
Zoning Ordinance Resolution No. 51-98, Series of 1982, and Zoning Ordinance No. 123, Series of
1997. Hence, it cannot be said that the land is industrial and outside the ambit of CARP.
WHEREFORE, in view of the foregoing, the Petition dated 19 November 2009 is hereby GRANTED. The
24 September 2009 Decision of the Court of Appeals in CA-G.R. SP No. 01244-MIN is REVERSED and
SET ASIDE. The 26 April 2005 Decision of the Department of Agrarian Reform and Adjudication Board
is REINSTATED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 191660               December 3, 2012
DELIA T. SUTTON, Petitioner,  the names of private respondents. The RARAD found that public respondents failed to exercise due
vs.
ROMANITO P. LIM, EFREN C. LIM AND ALLAN C. LIM, MUNICIPAL AGRARIAN REFROM
OFFICER OF AROROY, MASBATE, PROVINCIAL AGRARIAN REFORM OFFICER OF MASBATE,
AND THE REGISTER OF DEEDS FOR THE PROVINCE OF MASBATE, Respondents.
DECISION
PERLAS-BERNABE, J.:
In this Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, Delia Sutton (petitioner)
seeks to reverse and set aside the July 23, 2009 Decision2 and March 23, 2010 Resolution3 of the
Court of Appeals (CA) in CA-G.R. SP No. 91971, which dismissed on jurisdictional grounds the
Department of Agrarian Reform Adjudication Board (DARAB) Regional Adjudicator Case No. 05-004-98
and DARAB Case No. 8902 for cancellation of the Certificate of Land Ownership Award (CLOA) No.
00122354 and Original Certificate of Title (OCT) No. CLOA 0-16154issued in the names of private
respondents Romanito P. Lim and his sons, namely: Efren C. Lim and Allan C. Lim (private
respondents).
The Factual Antecedents
On December 7, 1993, private respondents applied for the issuance of a CLOA over a parcel of land
with an area of 73,105 square meters located in Barangay Amotag, Aroroy, Masbate, described as Lot
No. 1493 of Cadastral Survey No. Pls-77of Aroroy Public Subdivision, before the Department of
Agrarian Reform (DAR) Secretary.5 Upon the recommendation of the Municipal Agrarian Reform Officer
(MARO) of Aroroy, Masbate, the application was granted and they were issued CLOA No. 00122354.
Subsequently, on January 31, 1994, the Register of Deeds of Masbate issued the corresponding OCT
No. CLOA 0-1615.
On November 23, 1994, petitioner filed a petition for the cancellation of the said CLOA and title before
the Office of the Provincial Agrarian Reform Adjudicator (PARAD), docketed as DARAB Case No. 05-
077, assailing the validity of the said issuances on the ground that the subject parcel of land is a
private land devoted to cattle raising which she inherited from her deceased father, Samuel Sutton,
who, in turn, previously bought the subject parcel of land from RomanitoP. Lim and his wife, Lolita L.
Cedillo, on August 7, 1958.6 Petitioner also claimed to have been denied due process for not receiving
any notice of private respondents’ application proceedings for CLOA. On March 5, 1998, the petition
was amended7 to include the MARO of Aroroy, Masbate, Provincial Agrarian Reform Officer (PARO) of
Masbate and the Register of Deeds of Masbate as additional respondents, and was re-docketed as
DARAB Case No. 05-004-98.
In their answer,8 private respondents averred that, being the actual occupants and qualified
beneficiaries of the subject lot which formed part of the alienable and disposable portion of the public
domain, the DAR Secretary correctly issued the CLOA in their favor. While admitting having sold a lot
in favor of Samuel Sutton from whom petitioner purportedly inherited the subject parcel of land, they
asserted that the lot sold was different from Lot No. 1493. Moreover, they interposed the defense of
prescription since the petition for cancellation was filed after the subject title became indefeasible.
On the other hand, the MARO and PARO, in their Answer with Motion to Dismiss,9invoked the
presumption of regularity in the performance of their official functions in issuing the CLOA, which
according to them was issued in accordance with the implementing rules and regulations of Republic
Act (R.A.) No. 6657.10 They also clarified that the subject parcel of land has been classified as
Government Owned Land (GOL) or Kilusang Kabuhayan at Kaunlaran (KKK) areas pursuant to
Presidential Proclamation No. 2282,11 hence, subject to the Comprehensive
Agrarian Reform Program’simmediate coverage (CARP coverage). Moreover, petitioner was not able to
prove that she is the registered owner of the subject parcel of land and that it is exempt from the
CARP coverage.
The RARAD Ruling
In its May 4, 1999 Decision,12 the Regional Agrarian Reform Adjudicator (RARAD)ordered, among
others, the cancellation of CLOA No. 00122354 and the corresponding OCT No. CLOA 0-1615 issued in
care in identifying the lots of the public domain and their actual occupants, and accordingly, restored
the ownership and possession of the subject parcel of land to petitioner.
The DARAB Ruling
In its December 29, 2004 Decision,13 the DARAB reversed the ruling of the RARAD. It found no
irregularities in the issuance of the subject CLOA or lawful ground to warrant its cancellation, under
Administrative Order No. 02, Series of 1994.14 It did not find the issue of ownership consequential in
the implementation of the land reform program and brushed aside petitioner’s claim that since the
landholding is devoted to cattle raising, it is exempt from the CARP coverage. It also emphasized that
the issue of whether or not the landholding is exempt from the CARP coverage falls within the
exclusive jurisdiction of the Office of the DAR Secretary in the exercise of its administrative function to
implement R.A. No. 6657. Aggrieved, petitioner elevated the matter to the CA on petition for review.
The CA Ruling
In its July 23, 2009 Decision, the CA denied the petition on jurisdictional grounds and dismissed the
case without prejudice to its re-filing. It held that the DARAB does not have jurisdiction over the
instant controversy due to the absence of a landlord-tenant relationship or any agrarian relations
between the parties. It also ruled that since the issuance of the subject CLOA was made in the
exercise of the DAR Secretary’s administrative powers and function to implement agrarian reform
laws, the jurisdiction over the petition for its cancellation lies with the Office of the DAR Secretary.
The Issues
Hence, the instant petition ascribing to the CA the following errors:
 I. WHEN IT HELD THAT THE DAR PROVINCIAL/ REGIONAL ADJUDICATOR (PARAD/RARAD)
AND DARAB DO NOT HAVE JURISDICTION TO ENTERTAIN THE PETITION FOR
CANCELLATION OF THE CLOA AND CORRESPONDING TITLE ISSUED THEREFOR;
II. WHEN IT FOUND THAT SINCE NO LANDLORD-TENANT RELATIONSHIP EXISTED
BETWEEN THE PARTIES, THERE IS NO "AGRARIAN DISPUTE" INVOLVED; and
III. WHEN IT DISREGARDED PETITIONER’S UNDISPUTED OWNERSHIP AND POSSESSION
OVER LOT 1493 AND DENIAL OF DUE PROCESS OVER SAID LOT.15
The Ruling of the Court
The petition is without merit.
Section 1, Rule II of the 1994 DARAB Rules of Procedure, the rule in force at the time of the filing of
the petition, provides:
Section 1.Primary and Exclusive Original and Appellate Jurisdiction. The Board shall have primary and
exclusive jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes
involving the implementation of the Comprehensive Agrarian Reform Program (CARP) under Republic
Act No. 6657, Executive Order Nos. 228, 229 and 129-A, Republic Act No. 3844 as amended by
Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing
rules and regulations. Specifically, such jurisdiction shall include but not be limited to cases involving
following:
xxx
f) Those involving the issuance, correction and cancellation of Certificates of Land Ownership Award
(CLOAs) and Emancipation Patents (EPs) which are registered with the Land Registration Authority;
xxx
While the DARAB may entertain petitions for cancellation of CLOAs, as in this case, its jurisdiction is,
however, confined only to agrarian disputes.As explained in the case of Heirs of Dela Cruz v. Heirs of
Cruz16 and reiterated in the recent case of Bagongahasa v. Spouses Cesar Caguin,17for the DARAB to
acquire jurisdiction, the controversy must relate to an agrarian dispute between the landowners and
tenants in whose favor CLOAs have been issued by the DAR Secretary, to wit:
The Court agrees with the petitioners’ contention that, under Section 2(f), Rule II of the DARAB Rules
of Procedure, the DARAB has jurisdiction over cases involving the issuance, correction and cancellation
of CLOAs which were registered with the LRA. However, for the DARAB to have jurisdiction in such
cases, they must relate to an agrarian dispute between landowner and tenants to whom CLOAs have
been issued by the DAR Secretary. The cases involving the issuance, correction and cancellation of the
CLOAs by the DAR in the administrative implementation of agrarian reform laws, rules and regulations
to parties who are not agricultural tenants or lessees are within the jurisdiction of the DAR and not the
DARAB.(Emphasis supplied)
Thus, it is not sufficient that the controversy involves the cancellation of a CLOA already registered
with the Land Registration Authority. What is of primordial consideration is the existence of an
agrarian dispute between the parties.
As defined in Section 3(d) of R.A. No. 6657, an agrarian dispute relates 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 the said
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."
Based on the above-cited provision, however, petitioner posits that an agrarian dispute can be
dissected into purely tenurial (paragraph 1 of Section 3d) and non-tenurial arrangements (paragraph
2, Section 3d). This theory deserves no credence.
Verily, an agrarian dispute must be a controversy relating to a tenurial arrangement over lands
devoted to agriculture.18 Tenurial arrangements pertain to agreements which set out the rights
between a landowner and a tenant, lessee, farm worker or other agrarian reform beneficiary involving
agricultural land. Traditionally, tenurial arrangements are in the form of tenancy19 or leasehold
arrangements.20 However, other forms such as a joint production agreement to effect the
implementation of CARP have been recognized as a valid tenurial arrangement.21
Accordingly, paragraph 2 of Section 3(d), by its explicit reference to controversies between
landowners and farmworkers, tenants and other agrarian reform beneficiaries with respect to the
compensation of lands acquired under R.A. No. 6657 or other terms and conditions relating to the
transfer of such lands, undoubtedly implies the existence of a tenurial arrangement.1âwphi1 Also, the
phrase "whether the disputants stand in the proximate relation of farm operator and beneficiary,
landowner and tenant, or lessor and lessee" in paragraph 2 lists certain forms of tenurial
arrangements consistent with the phrase "whether leasehold, tenancy or stewardship, or otherwise"
stated in paragraph 1 of the same section.
Moreover, it is a rule in statutory construction that every part of the statute must be interpreted with
reference to the context – particularly, that every part of the statute must be interpreted together
with the other parts, and kept subservient to the general intent of the whole enactment.22
Therefore, in line with the purpose of recognizing the right of farmers, farmworkers and landowners
under the agrarian reform program, both paragraphs 1 and 2of Section 3(d) of R.A. No. 6657 should
be understood within the context of tenurial arrangements, else the intent of the law be subverted.
To be sure, the tenurial, leasehold, or agrarian relations referred tomay be established with the
concurrence of the following: 1) the parties are the landowner and the tenant or agricultural lessee; 2)
the subject matter of the relationship is an agricultural land; 3) there is consent between the parties
to the relationship; 4) the purpose of the agricultural relationship is to bring about agricultural
production; 5) there is personal cultivation on the part of the tenant or agricultural lessee; and 6) the
harvest is shared between the landowner and the tenant or agricultural lessee.23
In this case, a punctilious examination reveals that petitioner’s allegations are solely hinged on the
erroneous grant by the DAR Secretary of CLOA No. 00122354 to private respondents on the grounds
that she is the lawful owner and possessor of the subject lot and that it is exempt from the CARP
coverage. In this regard, petitioner has not alleged any tenurial arrangement between the parties,
negating the existence of any agrarian dispute and consequently, the jurisdiction of the DARAB.
Indisputably, the controversy between the parties is not agrarian in nature and merely involves the
administrative implementation of the agrarian reform program which is cognizable by the DAR
Secretary. Section 1, Rule II of the 1994 DARAB Rules of Procedure clearly provides that "matters
involving strictly the administrative implementation of R.A. No. 6657, and other agrarian reform laws
and pertinent rules, shall be the exclusive prerogative of and cognizable by the DAR Secretary."
Furthermore, it bears to emphasize that under the new law, R.A. No. 9700,24 which took effect on July
1, 2009, all cases involving the cancellation of CLOAs and other titles issued under any agrarian
reform program are now within the exclusive and original jurisdiction of the DAR Secretary. Section 9
of the said law provides:
Section 9. Section 24 of Republic Act No. 6657, as amended, is further amended to read as follows:
xxx
All cases involving the cancellation of registered emancipation patents, certificates of land ownership
award, and other titles issued under any agrarian reform program are within the exclusive and original
jurisdiction of the Secretary of the DAR.
Consequently, the DARAB is bereft of jurisdiction to entertain the herein controversy, rendering its
decision null and void. Jurisdiction lies with the Office of the DAR Secretary to resolve the issues of
classification of landholdings for coverage (whether the subject property is a private or government
owned land), and identification of qualified beneficiaries. Hence, no error can be attributed to the CA
in dismissing the case without prejudice to its re-filing, in accordance to DAR Administrative Order No.
6, Series of 2000.
WHEREFORE, the instant petition is DENIED and the assailed July 23, 2009 Decision and March 23,
2010 Resolution of the Court of Appeals in CA G.R. SP No. 91971 are AFFIRMED.
SO ORDERED.
FIRST DIVISION
[UDK No. 9864 :  December 3, 1990.]
RUFINA VDA. DE TANGUB, Petitioner, vs.  COURT OF APPEALS, PRESIDING JUDGE of the
[CAR] RTC, Branch 4, Iligan City, and SPOUSES DOMINGO and EUGENIA MARTIL,
Respondents.
 
DECISION
NARVASA, J.:
 
The jurisdiction of the Regional Trial Court, acting as a special agrarian court, in the light of Executive
Orders Numbered 129-A and 229 and Republic Act No. 6657, is what is at issue in the proceeding at
bar.
Rufina Tangub and her husband, Andres, now deceased, filed with the Regional Trial Court of Lanao
del Norte in March, 1988, "an agrarian case for damages by reason of the(ir) unlawful dispossession .
. .was tenants from the landholding" owned by the Spouses Domingo and Eugenia Martil. 1 Several
persons were also impleaded as defendants, including the Philippine National Bank, it being alleged by
the plaintiff spouses that said bank, holder of a mortgage on the land involved, had caused foreclosure
thereof, resulting in the acquisition of the property by the bank as the highest bidder at the
foreclosure sale, and in the sale by the latter, some time later, of portions of the land to the other
persons named as its co-defendants (all employees of the National Steel Corporation), and it being
prayed that mortgage and the transactions thereafter made in relation thereto be annulled and
voided. 2
In an Order rendered on August 24, 1988, respondent Judge Felipe G. Javier, Jr. dismissed the
complaint. 3 He opined that by virtue of Executive Order No. 229 "providing the mechanisms for the
implementation of the Comprehensive Agrarian Reform Program approved on July 24, 1987" —
Executive No. 129-A approved on July 26, 1987, as well as the Rules of the Adjudication Board of the
Department of Agrarian Reform, jurisdiction of the Regional Trial Court over agrarian cases had been
transferred to the Department of Agrarian Reform.:-cralaw
The Tangub Spouses filed a petition for Certiorari with this Court, docketed as UDK-8867, assigned to
the Second Division. Discerning however no special and important reason for taking cognizance of the
action, this Court referred the same to the Court of Appeals, that tribunal having concurrent
jurisdiction to act thereon.: nad
The Court of Appeals, by Decision promulgated on October 23, 1989, 4 dismissed the petition, finding
that the jurisdictional question had been correctly resolved by the Trial Court. The Court of Appeals,
adverted to a case earlier decided by it, on August 30, 1989, Estanislao Casinillo v. Hon. Felipe G.
Javier, Jr., et al., in which it was "emphatically ruled that agrarian cases no longer fall under the
jurisdiction of Regional Trial Courts but rather under the jurisdiction of the DAR Adjudication Board." 5
The ruling was grounded on the provisions of Executive Orders Numbered 229, approved on July 22,
1987, and 129-A, issued on July 26, 1987, in relation to Republic Act No. 6657, effective on June 15,
1988. Said executive orders, it was pointed out, were issued by President Corazon C. Aquino
undoubtedly in the exercise of her revolutionary powers in accordance with Section 6, Article XVIII
[Transitory Provisions] of the 1986 Constitution providing that the "incumbent President shall continue
to exercise legislative powers until the first Congress is convened."
The petitioner Rufina Vda. de Tangub, now widowed, is once again before this Court, contending that
the Trial Court's "order of dismissal of August 26, 1988, and the decision of the Honorable Court of
Appeals affirming it, are patently illegal and unconstitutional" because they deprive "a poor tenant
access to courts and directly violate R.A. 6657, PD 946, and Batas Bilang 129."
The petition is without merit.
Section 1 of Executive Order No. 229 sets out the scope of the Comprehensive Agrarian Reform
Program (CARP). It states that the program —
". . . shall cover, regardless of tenurial arrangement and commodity produce, all public and
private agricultural land as provided in Proclamation No. 131 dated July 22, 1987, including
whenever applicable in accordance with law, other lands of the public domain suitable to
agriculture."
Section 17 thereof.
1) vested the Department of Agrarian Reform with "quasi-judicial powers to determine and
adjudicate agrarian reform matters," and
2) granted it "jurisdiction over all matters involving implementation of agrarian reform,
except those falling under the exclusive original jurisdiction of the DENR and the
Department of Agriculture [DA], as well as "powers to punish for contempt and to issue
subpoena, subpoena duces tecum and writs to enforce its orders or decisions."
Section 4 of Executive Order No. 129-A made the Department of Agrarian Reform "responsible for
implementing the Comprehensive Agrarian Reform Program, and, for such purpose," authorized it,
among others, to —
"(g) Provide free legal services to agrarian reform beneficiaries and resolve agrarian conflicts and land
tenure problems; . . (and)
x  x  x
(j) Approve or disapprove the conversion, restructuring or readjustment of agricultural lands into non-
agricultural uses: . ."
And Section 5 of the same Executive Order No. 129-A specified the powers and functions of the
Department of Agrarian Reform, including the following::- nad
"(b) Implement all agrarian laws, and for this purpose, punish for contempt and issue subpoena,
subpoena duces tecum, writ of execution of its decision, and other legal processes to ensure
successful and expeditious program implementation; the decisions of the Department may in proper
cases, be appealed to the Regional Trial Courts but shall be immediately executory notwithstanding
such appeal;
x  x  x
(h) Provide free legal service to agrarian reform beneficiaries and resolve agrarian conflicts and land
tenure related problems as may be provided for by laws;
(i) Have exclusive authority to approve or disapprove conversion of agricultural lands for residential,
commercial, industrial, and other land uses as may be provided . . ."
The jurisdiction thus conferred on the Department of Agrarian Reform, i.e.:
(a) adjudication of all matters involving implementation of agrarian reform;
(b) resolution of agrarian conflicts and land tenure related problems; and
(c) approval or disapproval of the conversion, restructuring or readjustment of agricultural lands into
residential, commercial, industrial, and other non-agricultural uses,
is evidently quite as extensive as that theretofore vested in the Regional Trial Court by Presidential
Decree No. 946, which extended to the rights and obligations of persons in the cultivation and use of
agricultural land, and other matters affecting tenant-farmers, agricultural lessees, settlers, owner-
cultivators, farms' cooperatives or organizations under laws, Presidential Decrees, Orders, instructions,
Rules and Regulations in relation to the agrarian reform program. 6 Clearly, the latter must be
deemed to have been eliminated by its being subsumed in the broad jurisdiction conferred on the
Department of Agrarian Reform. The intention evidently was to transfer original jurisdiction to the
Department of Agrarian Reform, a proposition stressed by the rules formulated and promulgated by
the Department for the implementation of the executive orders just quoted. 7 The rules included the
creation of the Agrarian Reform Adjudication Board designed to exercise the adjudicatory functions of
the Department, and the allocation to it of —
". . . original and exclusive jurisdiction over the subject matter vested upon it by law, and all cases,
disputes, controversies and matters or incidents involving the implementation of the Comprehensive
Agrarian Reform Program under Executive Order No. 229, Executive Order No. 129-A, Republic Act
No. 3844, as amended by Republic Act No. 6289, Presidential Decree No. 27 and other agrarian laws
and their implementing rules and regulations."
The implementing rules also declare that "(s)pecifically, such jurisdiction shall extend over but not be
limited to . . (that theretofore vested in the Regional Trial Courts, i.e.) (c)ases involving the rights and
obligations of persons engaged in the cultivation and use of agricultural land covered by the
Comprehensive Agrarian Reform Program (CARP) and other agrarian laws . . ."
The matter has since been further and definitively clarified by Republic Act No. 6657, which was
signed into law by President Aquino on June 10, 1988 and became effective immediately after its
"publication in two (2) national newspapers of general circulation" on June 15, 1988. The Act makes
references to and explicitly recognizes the effectivity and applicability of Presidential Decree No. 229.
8 More particularly, the Act echoes the provisions of Section 17 of Presidential Decree No. 229, supra,
investing the Department of Agrarian Reform with original jurisdiction, generally, over all cases
involving agrarian laws, although, as shall shortly be pointed out, it restores to the Regional Trial
Court, limited jurisdiction over two groups of cases. Section 50 reads as follows:
"SEC. 50. Quasi-Judicial Powers of the DAR. — The DAR is hereby vested with primary jurisdiction to
determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all
matters involving the implementation of agrarian reform, except those falling under the exclusive
jurisdiction of the Department of Agriculture [DA] and the Department of Environment and Natural
Resources [DENR].
It shall not be bound by technical rules of procedure and evidence but shall proceed to hear and
decide all cases, disputes or controversies in a most expeditious manner, employing all reasonable
means to ascertain the facts of every case in accordance with justice and equity and the merits of the
case. Toward this end, it shall adopt a uniform rule of procedure to achieve a just, expeditious and
inexpensive determination of every action or proceeding before it.
It shall have the power to summon witnesses, administer oaths, take testimony, require submission of
reports, compel the production of books and documents and answers to interrogatories and issue
subpoena and subpoena duces tecum and to enforce its writs through sheriffs or other duly deputized
officers. It shall likewise have the power to punish direct and indirect contempts in the same manner
and subject to the same penalties as provided in the Rules of Court.
x  x  x
Notwithstanding an appeal to the court of appeals, the decision of the DAR shall be immediately
executory." 9
The Regional Trial Courts have not, however, been completely divested of jurisdiction over agrarian
reform matters. Section 56 of RA 6657, on the other hand, confers "special jurisdiction" on "Special
Agrarian Courts," which are Regional Trial Courts designated by the Supreme Court — at least one (1)
branch within each province — to act as such. These Regional Trial Courts qua Special Agrarian Courts
have, according to Section 57 of the same law, original and exclusive jurisdiction over:
1) "all petitions for the determination of just compensation to land-owners," and
2) "the prosecution of all criminal offenses under . . [the] Act."
In these cases, "(t)he Rules of Court shall apply . . unless modified by . . . (the) Act."
It is relevant to mention in this connection that —
(1) appeals from decisions of the Special Agrarian Courts "may be taken by filing a petition
for review with the Court of Appeals within fifteen (15) days from receipt or notice of the
decision, . ." 10 and
(2) appeals from any "decision, order, award or ruling of the DAR on any agrarian dispute or
on any matter pertaining to the application, implementation, enforcement, or interpretation
of this Act and other pertinent laws on agrarian reform may be brought to the Court of
Appeals by Certiorari11 except as otherwise provided . . . within fifteen (15) days from
receipt of a copy thereof," the "findings of fact of the DAR [being] final and conclusive if
based on substantial evidence." 12
The Regional Trial Court of Iligan City was therefore correct in dismissing Agrarian Case No. 1094. It
being a case concerning the rights of the plaintiffs as tenants on agricultural land, not involving the
"special jurisdiction" of said Trial Court acting as a Special Agrarian Court, it clearly came within the
exclusive original jurisdiction of the Department of Agrarian Reform, or more particularly, the Agrarian
Reform Adjudication Board, established precisely to wield the adjudicatory powers of the Department,
supra.
The petitioner had not bothered to substantiate her contention that she has been denied access to the
courts, which is just as well. The contention is on its face utterly without merit. It may profit her and
her counsel to realize that apart from granting all concerned parties access to a quasi-judicial forum
(the Adjudication Board of the Department of Agrarian Reform), the law strives to make resolution of
controversies therein more expeditious and inexpensive, by providing not only that the Board "shall
not be bound by technical rules of procedure and evidence," supra, but also that, as explicitly stated
by the penultimate paragraph of Section 50 of the Act::-cralaw
"Responsible farmer leaders shall be allowed to represent themselves, their fellow farmers, or their
organizations in any proceedings before the DAR: Provided, however, That when there are two or
more representatives for any individual or group, the representatives should choose only one among
themselves to represent such party or group before any DAR proceedings."
WHEREFORE, for lack of merit, the petition is DISMISSED, and the Decision of the Court of Appeals in
CA-G.R. SP. No. 16725 dated October 23, 1989, AFFIRMED, without pronouncement as to costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 112526            October 12, 2001
STA. ROSA REALTY DEVELOPMENT CORPORATION, petitioner, 
vs.
COURT OF APPEALS, JUAN B. AMANTE, FRANCISCO L. ANDAL, LUCIA ANDAL, ANDREA P.
AYENDE, LETICIA P. BALAT, FILOMENA B. BATINO, ANICETO A. BURGOS, JAIME A. BURGOS,
FLORENCIA CANUBAS, LORETO A. CANUBAS, MAXIMO A. CANUBAS, REYNALDO CARINGAL,
QUIRINO C. CASALME, BENIGNO A. CRUZAT, ELINO A. CRUZAT, GREGORIO F. CRUZAT,
RUFINO C. CRUZAT, SERGIO CRUZAT, SEVERINO F. CRUZAT, VICTORIA DE SAGUN,
SEVERINO DE SAGUN, FELICISIMO A. GONZALES, FRANCISCO A. GONZALES, GREGORIO
GONZALES, LEODEGARIO N. GONZALES, PASCUAL P. GONZALES, ROLANDO A. GONZALES,
FRANCISCO A. JUANGCO, GERVACIO A. JUANGCO, LOURDES U. LUNA, ANSELMO M.
MANDANAS, CRISANTO MANDANAS, EMILIO M. MANDANAS, GREGORIO A. MANDANAS,
MARIO G. MANDANAS, TEODORO MANDANAS, CONSTANCIO B. MARQUEZ, EUGENIO B.
MARQUEZ, ARMANDO P. MATIENZO, DANIEL D. MATIENZO, MAXIMINO MATIENZO,
PACENCIA P. MATIENZO, DOROTEA L. PANGANIBAN, JUANITO T. PEREZ, MARIANITO T.
PEREZ, SEVERO M. PEREZ, INOCENCIA S. PASQUIZA, BIENVENIDO F. PETATE, IGNACIO F.
PETATE, JUANITO PETATE, PABLO A. PLATON, PRECILLO V. PLATON, AQUILINO B. SUBOL,
CASIANO T. VILLA, DOMINGO VILLA, JUAN T. VILLA, MARIO C. VILLA, NATIVIDAD A. VILLA,
JACINTA S. ALVARADO, RODOLFO ANGELES, DOMINGO A. CANUBAS, EDGARDO L. CASALME,
QUIRINO DE LEON, LEONILO M. ENRIQUEZ, CLAUDIA P. GONZALES, FELISA R. LANGUE,
QUINTILLANO LANGUE, REYNALDO LANGUE, ROMEO S. LANGUE, BONIFACIO VILLA,
ROGELIO AYENDE, ANTONIO B. FERNANDEZ, ZACARIAS HERRERA, ZACARIAS HERRERA,
REYNARIO U. LAZO, AGAPITO MATIENZO, DIONISIO F. PETATE, LITO G. REYES, JOSE M.
SUBOL, CELESTINO G. TOPI NO, ROSA C. AMANTE, SOTERA CASALME, REMIGIO M.
SILVERIO, THE SECRETARY OF AGRARIAN REFORM, DEPARTMENT OF AGRARIAN REFORM
ADJUDICATION BOARD, LAND BANK OF THE PHILIPPINES, REGISTER OF DEEDS OF
LAGUNA, DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES REGIONAL
EXECUTIVE DIRECTOR FOR REGION IV, and REGIONAL AGRARIAN REFORM OFFICER FOR
REGION IV, respondents.
PARDO, J.:
The case before the Court is a petition for review on certiorari of the decision of the Court of
Appeals1 affirming the decision of the Department of Agrarian Reform Adjudication Board2 (hereafter
DARAB) ordering the compulsory acquisition of petitioner's property under the Comprehensive
Agrarian Reform Program (CARP).
Petitioner Sta. Rosa Realty Development Corporation (hereafter, SRRDC) was the registered owner of
two parcels of land, situated at Barangay Casile, Cabuyao, Laguna covered by TCT Nos. 81949 and
84891, with a total area of 254.6 hectares. According to petitioner, the parcels of land are watersheds,
which provide clean potable water to the Canlubang community, and that ninety (90) light industries
are now located in the area.3
Petitioner alleged that respondents usurped its rights over the property, thereby destroying the
ecosystem. Sometime in December 1985, respondents filed a civil case4 with the Regional Trial Court,
Laguna, seeking an easement of a right of way to and from Barangay Casile. By way of counterclaim,
however, petitioner sought the ejectment of private respondents.
In October 1986 to August 1987, petitioner filed with the Municipal Trial Court, Cabuyao, Laguna
separate complaints for forcible entry against respondents.5
After the filing of the ejectment cases, respondents petitioned the Department of Agrarian Reform
(DAR) for the compulsory acquisition of the SRRDC property under the CARP.
On August 11, 1989, the Municipal Agrarian Reform Officer (MARO) of Cabuyao, Laguna issued a
notice of coverage to petitioner and invited its officials or representatives to a conference on August
18, 1989.6 During the meeting, the following were present: representatives of petitioner, the Land
Bank of the Philippines, PARCCOM, PARO of Laguna, MARO of Laguna, the BARC Chairman of
Barangay Casile and some potential farmer beneficiaries, who are residents of Barangay Casile,
Cabuyao, Laguna. It was the consensus and recommendation of the assembly that the landholding of
SRRDC be placed under compulsory acquisition.
On August 17, 1989, petitioner filed with the Municipal Agrarian Reform Office (MARO), Cabuyao,
Laguna a "Protest and Objection" to the compulsory acquisition of the property on the ground that the
area was not appropriate for agricultural purposes. The area was rugged in terrain with slopes of 18%
and above and that the occupants of the land were squatters, who were not entitled to any land as
beneficiaries.7
On August 29, 1989, the farmer beneficiaries together with the BARC chairman answered the protest
and objection stating that the slope of the land is not 18% but only 5-10% and that the land is
suitable and economically viable for agricultural purposes, as evidenced by the Certification of the
Department of Agriculture, municipality of Cabuyao, Laguna.8
On September 8, 1989, MARO Belen dela Torre made a summary investigation report and forwarded
the Compulsory Acquisition Folder Indorsement (CAFI) to the Provincial Agrarian Reform Officer
(hereafter, PARO).9
On September 21, 1989, PARO Durante Ubeda forwarded his endorsement of the compulsory
acquisition to the Secretary of Agrarian Reform.
On November 23, 1989, Acting Director Eduardo C. Visperas of the Bureau of Land Acquisition and
Development, DAR forwarded two (2) Compulsory Acquisition Claim Folders covering the landholding
of SRRDC, covered by TCT Nos. T-81949 and T-84891 to the President, Land Bank of the Philippines
for further review and evaluation.10
On December 12, 1989, Secretary of Agrarian Reform Miriam Defensor Santiago sent two (2) notices
of acquisition11 to petitioner, stating that petitioner's landholdings covered by TCT Nos. 81949 and
84891, containing an area of 188.2858 and 58.5800 hectares, valued at P4,417,735.65 and
P1,220,229.93, respectively, had been placed under the Comprehensive Agrarian Reform Program.
On February 6, 1990, petitioner SRRDC in two letters12 separately addressed to Secretary Florencio B.
Abad and the Director, Bureau of Land Acquisition and Distribution, sent its formal protest, protesting
not only the amount of compensation offered by DAR for the property but also the two (2) notices of
acquisition.
On March 17, 1990, Secretary Abad referred the case to the DARAB for summary proceedings to
determine just compensation under R. A. No. 6657, Section 16.
On March 23, 1990, the LBP returned the two (2) claim folders previously referred for review and
evaluation to the Director of BLAD mentioning its inability to value the SRRDC landholding due to
some deficiencies.
On March 28, 1990, Executive Director Emmanuel S. Galvez wrote Land Bank President Deogracias
Vistan to forward the two (2) claim folders involving the property of SRRDC to the DARAB for it to
conduct summary proceedings to determine the just compensation for the land.
On April 6, 1990, petitioner sent a letter to the Land Bank of the Philippines stating that its property
under the aforesaid land titles were exempt from CARP coverage because they had been classified as
watershed area and were the subject of a pending petition for land conversion.
On May 10, 1990, Director Narciso Villapando of BLAD turned over the two (2) claim folders (CACF's)
to the Executive Director of the DAR Adjudication Board for proper administrative valuation. Acting on
the CACF's, on September 10, 1990, the Board promulgated a resolution asking the office of the
Secretary of Agrarian Reform (DAR) to first resolve two (2) issues before it proceeds with the
summary land valuation proceedings.13
The issues that need to be threshed out were as follows: (1) whether the subject parcels of land fall
within the coverage of the Compulsory Acquisition Program of the CARP; and (2) whether the petition
for land conversion of the parcels of land may be granted.
On December 7, 1990, the Office of the Secretary, DAR, through the Undersecretary for Operations
(Assistant Secretary for Luzon Operations) and the Regional Director of Region IV, submitted a report
answering the two issues raised. According to them, firstly, by virtue of the issuance of the notice of
coverage on August 11, 1989, and notice of acquisition on December 12, 1989, the property is
covered under compulsory acquisition. Secondly, Administrative Order No. 1, Series of 1990, Section
IV D also supports the DAR position on the coverage of the said property. During the consideration of
the case by the Board, there was no pending petition for land conversion specifically concerning the
parcels of land in question.
On February 19, 1991, the Board sent a notice of hearing to all the parties interested, setting the
hearing for the administrative valuation of the subject parcels of land on March 6, 1991. However, on
February 22, 1991, Atty. Ma. Elena P. Hernandez-Cueva, counsel for SRRDC, wrote the Board
requesting for its assistance in the reconstruction of the records of the case because the records could
not be found as her co-counsel, Atty. Ricardo Blancaflor, who originally handled the case for SRRDC
and had possession of all the records of the case was on indefinite leave and could not be contacted.
The Board granted counsel's request and moved the hearing to April 4, 1991.
On March 18, 1991, SRRDC submitted a petition to the Board for the latter to resolve SRRDC's petition
for exemption from CARP coverage before any administrative valuation of their landholding could be
had by the Board.
On April 4, 1991, the initial DARAB hearing of the case was held and subsequently, different dates of
hearing were set without objection from counsel of SRRDC. During the April 15, 1991 hearing, the
subdivision plan of subject property at Casile, Cabuyao, Laguna was submitted and marked as Exhibit
"5" for SRRDC. At the hearing on April 23, 1991, the Land Bank asked for a period of one month to
value the land in dispute.
At the hearing on April 23, 1991, certification from Deputy Zoning Administrator Generoso B. Opina
was presented. The certification issued on September 8, 1989, stated that the parcels of land subject
of the case were classified as "industrial Park" per Sanguniang Bayan Resolution No. 45-89 dated
March 29, 1989.14
To avert any opportunity that the DARAB might distribute the lands to the farmer beneficiaries, on
April 30, 1991, petitioner filed a petition15 with DARAB to disqualify private respondents as
beneficiaries. However, DARAB refused to address the issue of beneficiaries.
In the meantime, on January 20, 1992, the Regional Trial Court, Laguna, Branch 24, rendered a
decision,16 finding that private respondents illegally entered the SRRDC property, and ordered them
evicted.
On July 11, 1991, DAR Secretary Benjamin T. Leong issued a memorandum directing the Land Bank of
the Philippines to open a trust account in favor of SRRDC, for P5,637,965.55, as valuation for the
SRRDC property.
On December 19, 1991, DARAB promulgated a decision, the decretal portion of which reads:
"WHEREFORE, based on the foregoing premises, the Board hereby orders:
"1. The dismissal for lack of merit of the protest against the compulsory coverage of the
landholdings of Sta. Rosa Realty Development Corporation (Transfer Certificates of Title
Nos. 81949 and 84891 with an area of 254.766 hectares) in Barangay Casile, Municipality of
Cabuyao, Province of Laguna under the Comprehensive Agrarian Reform Program is hereby
affirmed;
"2. The Land Bank of the Philippines (LBP) to pay Sta. Rosa Realty Development Corporation
the amount of Seven Million Eight Hundred Forty-One Thousand, Nine Hundred Ninety
Seven Pesos and Sixty-Four centavos (P7,841,997.64) for its landholdings covered by the
two (2) Transfer Certificates of Title mentioned above. Should there be a rejection of the
payment tendered, to open, if none has yet been made, a trust account for said amount in
the name of Sta. Rosa Realty Development Corporation;
"3. The Register of Deeds of the Province of Laguna to cancel with dispatch Transfer
certificate of Title Nos. 84891 and 81949 and new one be issued in the name of the Republic
of the Philippines, free from liens and encumbrances;
"4 The Department of Environment and Natural Resources either through its Provincial
Office in Laguna or the Regional Office, Region IV, to conduct a final segregation survey on
the lands covered by Transfer certificate of Title Nos. 84891 and 81949 so the same can be
transferred by the Register of Deeds to the name of the Republic of the Philippines;
"5. The Regional Office of the Department of Agrarian Reform through its Municipal and
Provincial Agrarian Reform Office to take immediate possession on the said landholding after
Title shall have been transferred to the name of the Republic of the Philippines, and
distribute the same to the immediate issuance of Emancipation Patents to the farmer-
beneficiaries as determined by the Municipal Agrarian Reform Office of Cabuyao, Laguna."17
On January 20, 1992, the Regional Trial Court, Laguna, Branch 24, rendered a decision in Civil Case
No. B-233318ruling that respondents were builders in bad faith.
On February 6, 1992, petitioner filed with the Court of Appeals a petition for review of the DARAB
decision.19 On November 5, 1993, the Court of Appeals promulgated a decision affirming the decision
of DARAB. The decretal portion of the Court of Appeals decision reads:
"WHEREFORE, premises considered, the DARAB decision dated September 19, 1991 is
AFFIRMED, without prejudice to petitioner Sta. Rosa Realty Development Corporation
ventilating its case with the Special Agrarian Court on the issue of just
compensation." 20Hence, this petition.21
On December 15, 1993, the Court issued a Resolution which reads:
"G. R. Nos. 112526 (Sta. Rosa Realty Development Corporation vs. Court of Appeals, et. al.)
– Considering the compliance, dated December 13, 1993, filed by counsel for petitioner,
with the resolution of December 8, 1993 which required petitioner to post a cash bond or
surety bond in the amount of P1,500,000.00 Pesos before issuing a temporary restraining
order prayed for, manifesting that it has posted a CASH BOND in the same amount with the
Cashier of the Court as evidenced by the attached official receipt no. 315519, the Court
resolved to ISSUE the Temporary Retraining Order prayed for.
"The Court therefore, resolved to restrain: (a) the Department of Agrarian Reform
Adjudication Board from enforcing its decision dated December 19, 1991 in DARAB Case No.
JC-R-IV-LAG-0001, which was affirmed by the Court of Appeals in a Decision dated
November 5, 1993, and which ordered, among others, the Regional Office of the
Department of Agrarian Reform through its Municipal and Provincial Reform Office to take
immediate possession of the landholding in dispute after title shall have been transferred to
the name of the Republic of the Philippines and to distribute the same through the
immediate issuance of Emancipation Patents to the farmer-beneficiaries as determined by
the Municipal Agrarian Officer of Cabuyao, Laguna, (b) The Department of Agrarian Reform
and/or the Department of Agrarian Reform Adjudication Board, and all persons acting for
and in their behalf and under their authority from entering the properties involved in this
case and from introducing permanent infrastructures thereon; and (c) the private
respondents from further clearing the said properties of their green cover by the cutting or
burning of trees and other vegetation, effective today until further orders from this Court."22
The main issue raised is whether the property in question is covered by CARP despite the fact that the
entire property formed part of a watershed area prior to the enactment of R. A. No. 6657.
Under Republic Act No. 6657, there are two modes of acquisition of private land: compulsory and
voluntary. In the case at bar, the Department of Agrarian Reform sought the compulsory acquisition of
subject property under R. A. No. 6657, Section 16, to wit:
"Sec. 16. Procedure for Acquisition of Private Lands. – For purposes of acquisition of private
lands, the following procedures shall be followed:
a.) After having identified the land, the landowners and the beneficiaries, the DAR
shall send its notice to acquire the land to the owners thereof, by personal
delivery or registered mail, and post the same in a conspicuous place in the
municipal building and barangay hall of the place where the property is located.
Said notice shall contain the offer of the DAR to pay corresponding value in
accordance with the valuation set forth in Sections 17, 18, and other pertinent
provisions hereof.
b.) Within thirty (30) days from the date of the receipt of written notice by
personal delivery or registered mail, the landowner, his administrator or
representative shall inform the DAR of his acceptance or rejection of the offer.
c.) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner
the purchase price of the land within thirty (30) days after he executes and
delivers a deed of transfer in favor of the government and other muniments of
title.
d.) In case of rejection or failure to reply, the DAR shall conduct summary
administrative proceedings to determine the compensation for the land requiring
the landowner, the LBP and other interested parties to submit fifteen (15) days
from receipt of the notice. After the expiration of the above period, the matter is
deemed submitted for decision. The DAR shall decide the case within thirty (30)
days after it is submitted for decision.
e.) Upon receipt by the landowner of the corresponding payment, or, in case of
rejection or no response from the landowner, upon the deposit with an accessible
bank designated by the DAR of the compensation in cash or in LBP bonds in
accordance with this act, the DAR shall make immediate possession of the land
and shall request the proper Register of Deeds to issue Transfer Certificate of
Titles (TCT) in the name of the Republic of the Philippines. The DAR shall
thereafter proceed with the redistribution of the land to the qualified beneficiaries.
f.) Any party who disagrees with the decision may bring the matter to the
court23 of proper jurisdiction for final determination of just compensation.
In compulsory acquisition of private lands, the landholding, the landowners and farmer beneficiaries
must first be identified. After identification, the DAR shall send a notice of acquisition to the
landowner, by personal delivery or registered mail, and post it in a conspicuous place in the municipal
building and barangay hall of the place where the property is located.
Within thirty (30) days from receipt of the notice of acquisition, the landowner, his administrator or
representative shall inform the DAR of his acceptance or rejection of the offer.
If the landowner accepts, he executes and delivers a deed of transfer in favor of the government and
surrenders the certificate of title. Within thirty (30) days from the execution of the deed of transfer,
the Land Bank of the Philippines (LBP) pays the owner the purchase price. If the landowner accepts,
he executes and delivers a deed of transfer in favor of the government and surrenders the certificate
of title. Within thirty days from the execution of the deed of transfer, the Land Bank of the Philippines
(LBP) pays the owner the purchase price. If the landowner rejects the DAR's offer or fails to make a
reply, the DAR conducts summary administrative proceedings to determine just compensation for the
land. The landowner, the LBP representative and other interested parties may submit evidence on just
compensation within fifteen days from notice. Within thirty days from submission, the DAR shall
decide the case and inform the owner of its decision and the amount of just compensation.
Upon receipt by the owner of the corresponding payment, or, in case of rejection or lack of response
from the latter, the DAR shall deposit the compensation in cash or in LBP bonds with an accessible
bank. The DAR shall immediately take possession of the land and cause the issuance of a transfer
certificate of title in the name of the Republic of the Philippines. The land shall then be redistributed to
the farmer beneficiaries. Any party may question the decision of the DAR in the special agrarian courts
(provisionally the Supreme Court designated branches of the regional trial court as special agrarian
courts) for final determination of just compensation.
The DAR has made compulsory acquisition the priority mode of land acquisition to hasten the
implementation of the Comprehensive Agrarian Reform Program (CARP). Under Sec. 16 of the CARL,
the first step in compulsory acquisition is the identification of the land, the landowners and the farmer
beneficiaries. However, the law is silent on how the identification process shall be made. To fill this
gap, on July 26, 1989, the DAR issued Administrative Order No. 12, series of 1989, which set the
operating procedure in the identification of such lands. The procedure is as follows:
A. The Municipal Agrarian Reform Officer (MARO), with the assistance of the pertinent
Barangay Agrarian Reform Committee (BARC), shall:
1. Update the masterlist of all agricultural lands covered under the CARP in his area of
responsibility; the masterlist should include such information as required under the attached
CARP masterlist form which shall include the name of the landowner, landholding area,
TCT/OCT number, and tax declaration number.
2. Prepare the Compulsory Acquisition Case Folder (CACF) for each title (OCT/TCT) or
landholding covered under Phase I and II of the CARP except those for which the
landowners have already filed applications to avail of other modes of land acquisition. A case
folder shall contain the following duly accomplished forms:
a) CARP CA Form 1—MARO investigation report
b) CARP CA Form No 2 – Summary investigation report findings and evaluation
c) CARP CA Form 3—Applicant's Information sheet
d) CARP CA Form 4 – Beneficiaries undertaking
e) CARP CA Form 5 – Transmittal report to the PARO
The MARO/BARC shall certify that all information contained in the above-mentioned forms
have been examined and verified by him and that the same are true and correct.
3. Send notice of coverage and a letter of invitation to a conference/meeting to the
landowner covered by the Compulsory Case Acquisition Folder. Invitations to the said
conference meeting shall also be sent to the prospective farmer-beneficiaries, the BARC
representatives, the Land Bank of the Philippines (LBP) representative, and the other
interested parties to discuss the inputs to the valuation of the property.
He shall discuss the MARO/BARC investigation report and solicit the views, objection,
agreements or suggestions of the participants thereon. The landowner shall also ask to
indicate his retention area. The minutes of the meeting shall be signed by all participants in
the conference and shall form an integral part of the CACF.
4. Submit all completed case folders to the Provincial Agrarian Reform Officer (PARO).
B. The PARO shall:
1. Ensure the individual case folders are forwarded to him by his MAROs.
2. Immediately upon receipt of a case folder, compute the valuation of the land in
accordance with A.O. No. 6, series of 1988. The valuation worksheet and the related CACF
valuation forms shall be duly certified correct by the PARO and all the personnel who
participated in the accomplishment of these forms.
3. In all cases, the PARO may validate the report of the MARO through ocular inspection and
verification of the property. This ocular inspection and verification shall be mandatory when
the computed value exceeds P500,000 per estate.
4. Upon determination of the valuation, forward the case folder, together with the duly
accomplished valuation forms and his recommendations, to the Central Office.
The LBP representative and the MARO concerned shall be furnished a copy each of his
report.
C. DAR Central Office, specifically through the Bureau of Land Acquisition and Distribution
(BLAD), shall:
1. Within three days from receipt of the case folder from the PARO, review, evaluate and
determine the final land valuation of the property covered by the case folder. A summary
review and evaluation report shall be prepared and duly certified by the BLAD Director and
the personnel directly participating in the review and final valuation.
2. Prepare, for the signature of the Secretary or her duly authorized representative, a notice
of acquisition (CARP Form 8) for the subject property. Serve the notice to the landowner
personally or through registered mail within three days from its approval. The notice shall
include among others, the area subject of compulsory acquisition, and the amount of just
compensation offered by DAR.
3. Should the landowner accept the DAR's offered value, the BLAD shall prepare and submit
to the Secretary for approval the order of acquisition. However, in case of rejection or non-
reply, the DAR Adjudication Board (DARAB) shall conduct a summary administrative hearing
to determine just compensation, in accordance with the procedures provided under
Administrative Order No. 13, series of 1989. Immediately upon receipt of the DARAB's
decision on just compensation, the BLAD shall prepare and submit to the Secretary for
approval the required order of acquisition.
4. Upon the landowner's receipt of payment, in case of acceptance, or upon deposit of
payment in the designated bank, in case of rejection or non-response, the Secretary shall
immediately direct the pertinent Register of Deeds to issue the corresponding Transfer
Certificate of Title (TCT) in the name of the Republic of the Philippines. Once the property is
transferred, the DAR, through the PARO, shall take possession of the land for redistribution
to qualified beneficiaries."
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer
(MARO) keep an updated master list of all agricultural lands under the CARP in his area of
responsibility containing all the required information. The MARO prepares a Compulsory Acquisition
Case Folder (CACF) for each title covered by CARP. The MARO then sends the landowner a "Notice of
Coverage" and a "letter of invitation" to a "conference/ meeting" over the land covered by the CACF.
He also sends invitations to the prospective farmer-beneficiaries, the representatives of the Barangay
Agrarian Reform Committee (BARC), the Land Bank of the Philippines (LBP) and other interested
parties to discuss the inputs to the valuation of the property and solicit views, suggestions, objections
or agreements of the parties. At the meeting, the landowner is asked to indicate his retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO) who shall
complete the valuation of the land. Ocular inspection and verification of the property by the PARO shall
be mandatory when the computed value of the estate exceeds P500,000.00. Upon determination of
the valuation, the PARO shall forward all papers together with his recommendation to the Central
Office of the DAR. The DAR Central Office, specifically, the Bureau of Land Acquisition and Distribution
(BLAD) shall prepare, on the signature of the Secretary or his duly authorized representative, a notice
of acquisition of the subject property. From this point, the provisions of R. A. No. 6657, Section 16
shall apply.
For a valid implementation of the CARP Program, two notices are required: (1) the notice of coverage
and letter of invitation to a preliminary conference sent to the landowner, the representative of the
BARC, LBP, farmer beneficiaries and other interested parties pursuant to DAR A. O. No. 12, series of
1989; and (2) the notice of acquisition sent to the landowner under Section 16 of the CARL.
The importance of the first notice, that is, the notice of coverage and the letter of invitation to a
conference, and its actual conduct cannot be understated. They are steps designed to comply with the
requirements of administrative due process. The implementation of the CARL is an exercise of the
State's police power and the power of eminent domain. To the extent that the CARL prescribes
retention limits to the landowners, there is an exercise of police power for the regulation of private
property in accordance with the Constitution. But where, to carry out such regulation, the owners are
deprived of lands they own in excess of the maximum area allowed, there is also a taking under the
power of eminent domain. The taking contemplated is not mere limitation of the use of the land. What
is required is the surrender of the title to and physical possession of the excess and all beneficial rights
accruing to the owner in favor of the farmer beneficiary.
In the case at bar, DAR has executed the taking of the property in question. However, payment of just
compensation was not in accordance with the procedural requirement. The law required payment in
cash or LBP bonds, not by trust account as was done by DAR.
In Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform, we held that
"The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the
government on receipt of the landowner of the corresponding payment or the deposit by the DAR of
the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the
landowner. No outright change of ownership is contemplated either."24
Consequently, petitioner questioned before the Court of Appeals DARAB's decision ordering the
compulsory acquisition of petitioner's property.25 Here, petitioner pressed the question of whether the
property was a watershed, not covered by CARP.
Article 67 of the Water Code of the Philippines (P. D. No. 1067) provides:
"Art. 67. Any watershed or any area of land adjacent to any surface water or overlying any
ground water may be declared by the Department of Natural resources as a protected area.
Rules and Regulations may be promulgated by such Department to prohibit or control such
activities by the owners or occupants thereof within the protected area which may damage
or cause the deterioration of the surface water or ground water or interfere with the
investigation, use, control, protection, management or administration of such waters."
Watersheds may be defined as "an area drained by a river and its tributaries and enclosed by a
boundary or divide which separates it from adjacent watersheds." Watersheds generally are outside
the commerce of man, so why was the Casile property titled in the name of SRRDC? The answer is
simple. At the time of the titling, the Department of Agriculture and Natural Resources had not
declared the property as watershed area. The parcels of land in Barangay Casile were declared as
"PARK" by a Zoning Ordinance adopted by the municipality of Cabuyao in 1979, as certified by the
Housing and Land Use Regulatory Board. On January 5, 1994, the Sangguniang Bayan of Cabuyao,
Laguna issued a Resolution26 voiding the zoning classification of the land at Barangay Casile as Park
and declaring that the land is now classified as agricultural land.
The authority of the municipality of Cabuyao, Laguna to issue zoning classification is an exercise of its
police power, not the power of eminent domain. "A zoning ordinance is defined as a local city or
municipal legislation which logically arranges, prescribes, defines and apportions a given political
subdivision into specific land uses as present and future projection of needs."27
In Natalia Realty, Inc. v. Department of Agrarian Reform 28 we held that lands classified as non-
agricultural prior to the effectivity of the CARL may not be compulsorily acquired for distribution to
farmer beneficiaries.
However, more than the classification of the subject land as PARK is the fact that subsequent studies
and survey showed that the parcels of land in question form a vital part of a watershed area.29
Now, petitioner has offered to prove that the land in dispute is a "watershed or part of the protected
area for watershed purposes." Ecological balances and environmental disasters in our day and age
seem to be interconnected. Property developers and tillers of the land must be aware of this deadly
combination. In the case at bar, DAR included the disputed parcels of land for compulsory acquisition
simply because the land was allegedly devoted to agriculture and was titled to SRRDC, hence, private
and alienable land that may be subject to CARP.
However, the scenario has changed, after an in-depth study, survey and reassessment. We cannot
ignore the fact that the disputed parcels of land form a vital part of an area that need to be protected
for watershed purposes. In a report of the Ecosystems Research and Development Bureau (ERDB), a
research arm of the DENR, regarding the environmental assessment of the Casile and Kabanga-an
river watersheds, they concluded that:
"The Casile barangay covered by CLOA in question is situated in the heartland of both
watersheds. Considering the barangays proximity to the Matangtubig waterworks, the
activities of the farmers which are in conflict with proper soil and water conservation
practices jeopardize and endanger the vital waterworks. Degradation of the land would have
double edge detrimental effects. On the Casile side this would mean direct siltation of the
Mangumit river which drains to the water impounding reservoir below. On the Kabanga-an
side, this would mean destruction of forest covers which acts as recharged areas of the
Matang Tubig springs. Considering that the people have little if no direct interest in the
protection of the Matang Tubig structures they couldn't care less even if it would be
destroyed.
The Casile and Kabanga-an watersheds can be considered a most vital life support system
to thousands of inhabitants directly and indirectly affected by it. From these watersheds
come the natural God-given precious resource – water. x x x x x
Clearing and tilling of the lands are totally inconsistent with sound watershed management.
More so, the introduction of earth disturbing activities like road building and erection of
permanent infrastructures. Unless the pernicious agricultural activities of the Casile farmers
are immediately stopped, it would not be long before these watersheds would cease to be of
value. The impact of watershed degredation threatens the livelihood of thousands of people
dependent upon it. Toward this, we hope that an acceptable comprehensive watershed
development policy and program be immediately formulated and implemented before the
irreversible damage finally happens.
Hence, the following are recommended:
7.2 The Casile farmers should be relocated and given financial assistance.
7.3 Declaration of the two watersheds as critical and in need of immediate
rehabilitation.
7.4 A comprehensive and detailed watershed management plan and program be
formulated and implemented by the Canlubang Estate in coordination with
pertinent government agencies."30
The ERDB report was prepared by a composite team headed by Dr. Emilio Rosario, the ERDB Director, SO ORDERED.
who holds a doctorate degree in water resources from U.P. Los Banos in 1987; Dr. Medel Limsuan,
who obtained his doctorate degree in watershed management from Colorado University (US) in 1989;
and Dr. Antonio M. Dano, who obtained his doctorate degree in Soil and Water management
Conservation from U.P. Los Banos in 1993.
Republic of the Philippines
Also, DENR Secretary Angel Alcala submitted a Memorandum for the President dated September 7, SUPREME COURT
1993 (Subject: PFVR HWI Ref.: 933103 Presidential Instructions on the Protection of Watersheds of Manila
the Canlubang Estates at Barrio Casile, Cabuyao, Laguna) which reads:
THIRD DIVISION
"It is the opinion of this office that the area in question must be maintained for watershed
purposes for ecological and environmental considerations, among others. Although the 88 G.R. No. 154112             September 23, 2004
families who are the proposed CARP beneficiaries will be affected, it is important that a
larger view of the situation be taken as one should also consider the adverse effect on
thousands of residents downstream if the watershed will not be protected and maintained DEPARTMENT OF AGRARIAN REFORM, petitioner, 
for watershed purposes. vs.
ROBERTO J. CUENCA and Hon. ALFONSO B. COMBONG JR., in His Capacity as the Presiding
Judge of the Regional Trial Court, Branch 63, La Carlota City, respondents.
"The foregoing considered, it is recommended that if possible, an alternate area be allocated
for the affected farmers, and that the Canlubang Estates be mandated to protect and
maintain the area in question as a permanent watershed reserved."31 DECISION

The definition does not exactly depict the complexities of a watershed. The most important product of PANGANIBAN, J.:
a watershed is water which is one of the most important human necessity. The protection of
watersheds ensures an adequate supply of water for future generations and the control of flashfloods
All controversies on the implementation of the Comprehensive Agrarian Reform Program (CARP) fall
that not only damage property but cause loss of lives. Protection of watersheds is an
under the jurisdiction of the Department of Agrarian Reform (DAR), even though they raise questions
"intergenerational responsibility" that needs to be answered now.
that are also legal or constitutional in nature. All doubts should be resolved in favor of the DAR, since
the law has granted it special and original authority to hear and adjudicate agrarian matters.
Another factor that needs to be mentioned is the fact that during the DARAB hearing, petitioner
presented proof that the Casile property has slopes of 18% and over, which exempted the land from
The Case
the coverage of CARL. R. A. No. 6657, Section 10, provides:

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the March 15, 2002
"Section 10. Exemptions and Exclusions. – Lands actually, directly and exclusively used and
Decision2 and the June 18, 2002 Resolution3 of the Court of Appeals in CA-GR SP No. 58536. In the
found to be necessary for parks, wildlife, forest reserves, reforestration, fish sanctuaries and
challenged Decision, the CA disposed as follows:
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 "As previously stated, the principal issue raised in the court below involves a pure question
convents appurtenent thereto, communal burial grounds and cemeteries, penal colonies and of law. Thus, it being clear that the court a quo has jurisdiction over the nature and subject
penal farms actually worked by the inmates, government and private research and matter of the case below, it did not commit grave abuse of discretion when it issued the
quarantine centers, and all lands with eighteen percent (18%) slope and over, except those assailed order denying petitioner’s motion to dismiss and granting private respondent’s
already developed shall be exempt from coverage of this Act." application for the issuance of a writ of preliminary injunction.

Hence, during the hearing at DARAB, there was proof showing that the disputed parcels of land may "WHEREFORE, premises considered, the petition is denied due course and is accordingly
be excluded from the compulsory acquisition coverage of CARP because of its very high slopes. DISMISSED." 4

To resolve the issue as to the true nature of the parcels of land involved in the case at bar, the Court The assailed Resolution, on the other hand, denied petitioner’s Motion for Reconsideration.
directs the DARAB to conduct a re-evaluation of the issue.

The Facts
IN VIEW WHEREOF, the Court SETS ASIDE the decision of the Court of Appeals in CA-G. R. SP No.
27234.
The CA narrated the facts as follows:

In lieu thereof, the Court REMANDS the case to the DARAB for re-evaluation and determination of the
nature of the parcels of land involved to resolve the issue of its coverage by the Comprehensive Land
Reform Program.
In the meantime, the effects of the CLOAs issued by the DAR to supposed farmer beneficiaries shall
continue to be stayed by the temporary restraining order issued on December 15, 1993, which shall
remain in effect until final decision on the case.
No costs.
"Private respondent Roberto J. Cuenca is the registered owner of a parcel of land designated
as Lot No. 816-A and covered by TCT No. 1084, containing an area of 81.6117 hectares,
situated in Brgy. Haguimit, La Carlota City and devoted principally to the planting of sugar
cane.
"On 21 September 1999, Noe Fortunado, Municipal Agrarian Reform Officer (MARO) of La
Carlota City issued and sent a NOTICE OF COVERAGE to private respondent Cuenca placing
the above-described landholding under the compulsory coverage of R.A. 6657, otherwise
known as the Comprehensive Agrarian Reform Program (CARP). The NOTICE OF COVERAGE
also stated that the Land Bank of the Philippines (LBP) will determine the value of the
subject land pursuant to Executive Order No. 405 dated 14 June 1990.
"On 29 September 1999, private respondent Cuenca filed with the Regional Trial Court,
Branch 63, La Carlota City, a complaint against Noe Fortunado and Land Bank of the
Philippines for ‘Annulment of Notice of Coverage and Declaration of Unconstitutionality of
E.O. No. 405, Series of 1990, With Preliminary Injunction and Restraining Order.’ The case
was docketed as Civil Case No. 713.
"In his complaint, Cuenca alleged, inter alia, that the implementation of CARP in his
landholding is no longer with authority of law considering that, if at all, the implementation
should have commenced and should have been completed between June 1988 to June
1992, as provided in the Comprehensive Agrarian Reform Law (CARL); that the placing of
the subject landholding under CARP is without the imprimatur of the Presidential Agrarian
Reform Council (PARC) and the Provincial Agrarian Reform Coordinating Committee
(PARCOM) as required by R.A. 7905; that Executive Order No. 405 dated 14 June 1990
amends, modifies and/or repeals CARL and, therefore, it is unconstitutional considering that
on 14 June 1990, then President Corazon Aquino no longer had law-making powers; that
the NOTICE OF COVERAGE is a gross violation of PD 399 dated 28 February 1974.
"Private respondent Cuenca prayed that the Notice of Coverage be declared null and void ab
initio and Executive Order No. 405 dated 14 June 1990 be declared unconstitutional.
"On 05 October 1999, MARO Noe Fortunado filed a motion to dismiss the complaint on the
ground that the court a quo has no jurisdiction over the nature and subject matter of the
action, pursuant to R.A. 6657.
"On 12 January 2000, the respondent Judge issued a Temporary Restraining Order directing
MARO and LBP to cease and desist from implementing the Notice of Coverage. In the same
order, the respondent Judge set the hearing on the application for the issuance of a writ of
preliminary injunction on January 17 and 18, 2000.
"On 14 January 2000, MARO Fortunado filed a Motion for Reconsideration of the order
granting the TRO contending inter alia that the DAR, through the MARO, in the course of
implementing the Notice of Coverage under CARP cannot be enjoined through a Temporary
Restraining Order in the light of Sections 55 and 68 of R.A. 6657.
"In an order dated 16 February 2000, the respondent Judge denied MARO Noe Fortunado’s
motion to dismiss and issued a Writ of Preliminary Injunction directing Fortunado and all
persons acting in his behalf to cease and desist from implementing the Notice of Coverage,
and the LBP from proceeding with the determination of the value of the subject land.
"The Department of Agrarian Reform (DAR) [thereafter filed before the CA] a petition for
certiorari under Rule 65 of the 1997 Rules of Civil Procedure, assailing the writ of
preliminary injunction issued by respondent Judge on the ground of grave abuse of
discretion amounting to lack of jurisdiction.
"It is the submission of the petitioner that the assailed order is ‘in direct defiance… of
Republic Act 6657, particularly Section 55 and 68’ thereof, which read:
‘SECTION 55. NO RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS – No
court in the Philippines shall have jurisdiction to issue any restraining order or writ
of preliminary injunction against the PARC or any of its duly authorized or
designated agencies in any case, dispute or controversy arising from, necessary
to, or in connection with the application, implementation, or enforcement or
interpretation of this Act and other pertinent laws on agrarian reform.’
‘SECTION 68 – IMMUNITY OF GOVERNMENT AGENCIES FROM COURT’S
INTERFERENCE – No injunction, Restraining Order, prohibition or mandamus shall
be issued by the lower court against the Department of Agrarian Reform (DAR),
the Department of Agriculture (DA), the Department of Environment and Natural
Resources (DENR), and the Department of Justice (DOJ) in the implementation of
their program.’
"Petitioner contends that by virtue of the above provisions, all lower courts, such as the
court presided over by respondent Judge, ‘are barred if not prohibited by law to issue orders
of injunctions against the Department of Agrarian Reform in the full implementation of the
Notice of Coverage which is the initial step of acquiring lands under R.A. 6657.’
"Petitioner also contends that the nature and subject matter of the case below is purely
agrarian in character over which the court a quo has no jurisdiction and that therefore, it
had no authority to issue the assailed injunction order."5
Ruling of the Court of Appeals
Stressing that the issue was not simply the improper issuance of the Notice of Coverage, but was
mainly the constitutionality of Executive Order No. 405, the CA ruled that the Regional Trial Court
(RTC) had jurisdiction over the case. Consonant with that authority, the court a quo also had the
power to issue writs and processes to enforce or protect the rights of the parties.
The appellate court likewise held that petitioner’s reliance on Sections 55 and 68 of RA 6657 had been
misplaced, because the case was not about a purely agrarian matter. It opined that the prohibition in
certain statutes against such writs pertained only to injunctions against administrative acts, to
controversies involving facts, or to the exercise of discretion in technical cases. But on issues involving
pure questions of law, courts were not prevented from exercising their power to restrain or prohibit
administrative acts.
Hence, this Petition.6
Issues
In its Memorandum, petitioner raises the following issues:
"1. The Honorable Court of Appeals committed serious error by not taking into cognizance
that the issues raised in the complaint filed by the private respondent, which seeks to
exclude his land from the coverage of the CARP, is an agrarian reform matter and within the
jurisdiction of the DAR, not with the trial court.
"2. The Honorable Court of Appeals, with due respect, gravely abused its discretion by
sustaining the writ of injunction issued by the trial court, which is a violation of Sections 55
and 68 of Republic Act No. 6657."7
The Court’s Ruling
The Petition has merit.
First Issue:
Jurisdiction
In its bare essentials, petitioner’s argument is that private respondent, in his Complaint for Annulment
of the Notice of Coverage, is asking for the exclusion of his landholding from the coverage of the
Comprehensive Agrarian Reform Program (CARP). According to the DAR, the issue involves the
implementation of agrarian reform, a matter over which the DAR has original and exclusive
jurisdiction, pursuant to Section 50 of the Comprehensive Agrarian Reform Law (RA 6657).
On the other hand, private respondent maintains that his Complaint assails mainly the
constitutionality of EO 405. He contends that since the Complaint raises a purely legal issue, it thus
falls within the jurisdiction of the RTC. We do not agree.
Conflicts involving jurisdiction over agrarian disputes are as tortuous as the history of Philippine
agrarian reform laws. The changing jurisdictional landscape is matched only by the tumultuous
struggle for, and resistance to, the breaking up and distribution of large landholdings.
Two Basic Rules
Two basic rules have guided this Court in determining jurisdiction in these cases. First, jurisdiction is
conferred by law.8 And second, the nature of the action and the issue of jurisdiction are shaped by the
material averments of the complaint and the character of the relief sought.9 The defenses resorted to
in the answer or motion to dismiss are disregarded; otherwise, the question of jurisdiction would
depend entirely upon the whim of the defendant.10
Grant of Jurisdiction
Ever since agrarian reform legislations began, litigants have invariably sought the aid of the courts.
Courts of Agrarian Relations (CARs) were organized under RA 126711 "[f]or the enforcement of all laws
and regulations governing the relation of capital and labor on all agricultural lands under any system
of cultivation." The jurisdiction of these courts was spelled out in Section 7 of the said law as follows:
"Sec. 7. Jurisdiction of the Court. - The Court shall have original and exclusive jurisdiction
over the entire Philippines, to consider, investigate, decide, and settle all questions,
matters, controversies or disputes involving all those relationships established by law which
determine the varying rights of persons in the cultivation and use of agricultural land where
one of the parties works the land, and shall have concurrent jurisdiction with the Court of
First Instance over employer and farm employee or labor under Republic Act Numbered six
hundred two and over landlord and tenant involving violations of the Usury Law (Act No.
2655, as amended) and of inflicting the penalties provided therefor."
All the powers and prerogatives inherent in or belonging to the then Courts of First Instance12 (now
the RTCs) were granted to the CARs. The latter were further vested by the Agricultural Land Reform
Code (RA 3844) with original and exclusive jurisdiction over the following matters:
"(1) All cases or actions involving matters, controversies, disputes, or money claims arising
from agrarian relations: x x x
"(2) All cases or actions involving violations of Chapters I and II of this Code and Republic
Act Number eight hundred and nine; and
"(3) Expropriations to be instituted by the Land Authority: x x x."13
Presidential Decree (PD) No. 946 thereafter reorganized the CARs, streamlined their operations, and
expanded their jurisdiction as follows:
"Sec. 12. Jurisdiction over Subject Matter. - The Courts of Agrarian Relations shall have
original and exclusive jurisdiction over:
a) Cases involving the rights and obligations of persons in the cultivation and use
of agricultural land except those cognizable by the National Labor Relations
Commission; x x x ;
b) Questions involving rights granted and obligations imposed by laws,
Presidential Decrees, Orders, Instructions, Rules and Regulations issued and
promulgated in relation to the agrarian reform program; Provided, however, That
matters involving the administrative implementation of the transfer of the land to
the tenant-farmer under Presidential Decree No. 27 and amendatory and related
decrees, orders, instructions, rules and regulations, shall be exclusively cognizable
by the Secretary of Agrarian Reform, namely:
(1) classification and identification of landholdings;
(2) x x x;
(3) parcellary mapping;
(4) x x x;
xxx     xxx     xxx
m) Cases involving expropriation of all kinds of land in furtherance of the agrarian reform
program;
xxx     xxx     xxx
p) Ejectment proceedings instituted by the Department of Agrarian Reform and the Land
Bank involving lands under their administration and disposition, except urban properties
belonging to the Land Bank;
q) Cases involving violations of the penal provisions of Republic Act Numbered eleven
hundred and ninety-nine, as amended, Republic Act Numbered thirty eight hundred and
forty-four, as amended, Presidential Decrees and laws relating to agrarian reform; Provided,
however, That violations of the said penal provisions committed by any Judge shall be tried
by the courts of general jurisdiction; and
r) Violations of Presidential Decrees Nos. 815 and 816.
The CARs were abolished, however, pursuant to Section 4414 of Batas Pambansa Blg. 12915 (approved
August 14, 1981), which had fully been implemented on February 14, 1983. Jurisdiction over cases
theretofore given to the CAR’s was vested in the RTCs.16
Then came Executive Order No. 229.17 Under Section 17 thereof, the DAR shall exercise "quasi-judicial
powers to determine and adjudicate agrarian reform matters, and shall have exclusive jurisdiction
over all matters involving implementation of agrarian reform, except those falling under the exclusive
original jurisdiction of the DENR and the Department of Agriculture [DA]." The DAR shall also have the
"powers to punish for contempt and to issue subpoena, subpoena duces tecum and writs to enforce its
orders or decisions."
In Quismundo v. CA,18 this provision was deemed to have repealed Section 12 (a) and (b) of
Presidential Decree No. 946, which vested the then Courts of Agrarian Relations with "original
exclusive jurisdiction over cases and questions involving rights granted and obligations imposed by
presidential issuances promulgated in relation to the agrarian reform program."
Under Section 4 of Executive Order No. 129-A, the DAR was also made "responsible for implementing
the Comprehensive Agrarian Reform Program." In accordance with Section 5 of the same EO, it
possessed the following powers and functions:
"(b) Implement all agrarian laws, and for this purpose, punish for contempt and issue
subpoena, subpoena duces tecum, writs of execution of its decisions, and other legal
processes to ensure successful and expeditious program implementation; the decisions of
the Department may in proper cases, be appealed to the Regional Trial Courts but shall be
immediately executory notwithstanding such appeal;
xxx     xxx     xxx
"(h) Provide free legal services to agrarian reform beneficiaries and resolve agrarian
conflicts and land-tenure related problems as may be provided for by law;
xxx     xxx     xxx
 "(l) Have exclusive authority to approve or disapprove conversion of agricultural lands for
residential, commercial, industrial, and other land uses as may be provided x x x."
The above grant of jurisdiction to the DAR covers these areas:
(a) adjudication of all matters involving implementation of agrarian reform;
(b) resolution of agrarian conflicts and land tenure related problems; and
(c) approval or disapproval of the conversion, restructuring or readjustment of
agricultural lands into residential, commercial, industrial, and other non-
agricultural uses.
The foregoing provision was as broad as those "theretofore vested in the Regional Trial Court by
Presidential Decree No. 946," as the Court ruled in Vda. de Tangub v. CA,19 which we quote:
"x x x. The intention evidently was to transfer original jurisdiction to the Department of
Agrarian Reform, a proposition stressed by the rules formulated and promulgated by the
Department for the implementation of the executive orders just quoted. The rules included
the creation of the Agrarian Reform Adjudication Board designed to exercise the
adjudicatory functions of the Department, and the allocation to it of —
‘x x x [O]riginal and exclusive jurisdiction over the subject matter vested upon it
by law, and all cases, disputes, controversies and matters or incidents involving
the implementation of the Comprehensive Agrarian Reform Program under
Executive Order No. 229, Executive Order No. 129-A, Republic Act No. 3844, as
amended by Republic Act No. 6289, Presidential Decree No. 27 and other agrarian
laws and their implementing rules and regulations.’
"The implementing rules also declare that ‘(s)pecifically, such jurisdiction shall extend over
but not be limited to x x x (that theretofore vested in the Regional Trial Courts, i.e.) (c)ases
involving the rights and obligations of persons engaged in the cultivation and use of
agricultural land covered by the Comprehensive Agrarian Reform Program (CARP) and other
agrarian laws x x x."20
In the same case, the Court also held that the jurisdictional competence of the DAR had further been
clarified by RA 6657 thus:
"x x x. The Act [RA 6657] makes references to and explicitly recognizes the effectivity and
applicability of Presidential Decree No. 229. More particularly, the Act echoes the provisions
of Section 17 of Presidential Decree No. 229, supra, investing the Department of Agrarian
Reform with original jurisdiction, generally, over all cases involving agrarian laws, although,
as shall shortly be pointed out, it restores to the Regional Trial Court, limited jurisdiction
over two groups of cases. Section 50 reads as follows:
‘SEC. 50. Quasi-Judicial Powers of the DAR. — The DAR is hereby vested with
primary jurisdiction to determine and adjudicate agrarian reform matters and
shall have exclusive original jurisdiction over all matters involving the
implementation of agrarian reform, except those falling under the exclusive
jurisdiction of the Department of Agriculture [DA] and the Department of
Environment and Natural Resources [DENR].
xxx     xxx     xxx
‘It shall have the power to summon witnesses, administer oaths, take testimony,
require submission of reports, compel the production of books and documents and
answers to interrogatories and issue subpoena and subpoena duces tecum and to
enforce its writs through sheriffs or other duly deputized officers. It shall likewise
have the power to punish direct and indirect contempt in the same manner and
subject to the same penalties as provided in the Rules of Court.’"21
Nonetheless, we have held that the RTCs have not been completely divested of jurisdiction over
agrarian reform matters. Section 56 of RA 6657 confers special jurisdiction on "Special Agrarian
Courts," which are actually RTCs designated as such by the Supreme Court.22 Under Section 57 of the
same law, these Special Agrarian Courts have original and exclusive jurisdiction over the following
matters:
"1) ‘all petitions for the determination of just compensation to land-owners,’ and
"2) ‘the prosecution of all criminal offenses under x x x [the] Act.’"
The above delineation of jurisdiction remains in place to this date. Administrative Circular No. 29-
200223 of this Court stresses the distinction between the quasi-judicial powers of the DAR under
Sections 50 and 55 of RA 6657 and the jurisdiction of the Special Agrarian Courts referred to by
Sections 56 and 57 of the same law.
Allegations of the Complaint
A careful perusal of respondent’s Complaint24 shows that the principal averments and reliefs prayed for
refer -- not to the "pure question of law" spawned by the alleged unconstitutionality of EO 405 -- but
to the annulment of the DAR’s Notice of Coverage. Clearly, the main thrust of the allegations is the
propriety of the Notice of Coverage, as may be gleaned from the following averments, among others:
"6. This implementation of CARP in the landholding of the [respondent] is contrary to law
and, therefore, violates [respondent’s] constitutional right not to be deprived of his property
without due process of law. The coverage of [respondent’s] landholding under CARP is NO
longer with authority of law. If at all, the implementation of CARP in the landholding of
[respondent] should have commenced and [been] completed between June 1988 to June
1992 as provided for in CARL, to wit: x x x;
"7. Moreover, the placing of [respondent’s] landholding under CARP as of 21 September
1999 is without the imprimatur of the Presidential Agrarian Reform Council (PARC) and the
Provincial Agrarian Reform Coordinating Committee (PARCOM) as mandated and required by
law pursuant to R.A. 7905 x x x;
xxx     xxx     xxx
"9. Under the provisions of CARL, it is the PARC and/or the DAR, and not x x x Land Bank,
which is authorized to preliminarily determine the value of the lands as compensation
therefor, thus – x x x;
xxx     xxx     xxx
"12. That the aforementioned NOTICE OF COVERAGE with intendment and purpose of
acquiring [respondent’s] aforementioned land is a gross violation of law (PD 399 dated 28
February 1974 which is still effective up to now) inasmuch as [respondent’s] land is
traversed by and a road frontage as admitted by the DAR’s technician and defendant
FORTUNADO (MARO) x x x;"
"13. That as reflected in said Pre-Ocular Inspection Report, copy of which is hereto attached
as annex ‘D’ forming part hereof, [respondent’s] land is above eighteen percent (18%) slope
and therefore, automatically exempted and excluded from the operation of Rep. Act 6657, x
x x.25 (Italics supplied)
In contrast, the 14-page Complaint touches on the alleged unconstitutionality of EO 405 by merely
making these two allegations:
"10. Executive Order No. 405 dated 14 June 1990 (issued by the then President Corazon
Aquino) is unconstitutional for it plainly amends, modifies and/or repeals CARL. On 14 June
1990, then President Corazon Aquino had no longer law-making powers as the Philippine
 Congress was by then already organized, existing and operational pursuant to the 1987
Constitution. A copy of the said Executive Order is hereto attached as Annex ‘B’ forming part
hereof.
"11. Our constitutional system of separation of powers renders the said Executive Order No.
405 unconstitutional and all valuations made, and to be made, by the defendant Land Bank
pursuant thereto are null and void and without force and effect. Indispensably and
ineludibly, all related rules, regulations, orders and other issuances issued or promulgated
pursuant to said Executive Order No. 405 are also null and void ab initio and without force
and effect."26
We stress that the main subject matter raised by private respondent before the trial court was not the
issue of compensation (the subject matter of EO 40527). Note that no amount had yet been
determined nor proposed by the DAR. Hence, there was no occasion to invoke the court’s function of
determining just compensation.28
To be sure, the issuance of the Notice of Coverage29 constitutes the first necessary step towards the
acquisition of private land under the CARP. Plainly then, the propriety of the Notice relates to the
implementation of the CARP, which is under the quasi-judicial jurisdiction of the DAR. Thus, the DAR
could not be ousted from its authority by the simple expediency of appending an allegedly
constitutional or legal dimension to an issue that is clearly agrarian.
In view of the foregoing, there is no need to address the other points pleaded by respondent in
relation to the jurisdictional issue. We need only to point that in case of doubt, the jurisprudential
trend is for courts to refrain from resolving a controversy involving matters that demand the special
competence of administrative agencies, "even if the question[s] involved [are] also judicial in
character,"30 as in this case.
Second Issue:
Preliminary Injunction
Having declared the RTCs to be without jurisdiction over the instant case, it follows that the RTC of La
Carlota City (Branch 63) was devoid of authority to issue the assailed Writ of Preliminary Injunction.
That Writ must perforce be stricken down as a nullity. Such nullity is particularly true in the light of
the express prohibitory provisions of the CARP and this Court’s Administrative Circular Nos. 29-2002
and 38-2002. These Circulars enjoin all trial judges to strictly observe Section 68 of RA 6657, which
reads:
"Section 68. Immunity of Government Agencies from Undue Interference. – No injunction,
restraining order, prohibition or mandamus shall be issued by the lower courts against the
Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the Department
of Environment and Natural Resources (DENR) and the Department of Justice (DOJ) in their
implementation of the program."
WHEREFORE, the Petition is hereby GRANTED, and the challenged Decision and
Resolution REVERSED AND SET ASIDE. Accordingly, the February 16, 2000 Order of the Regional
Trial Court of La Carlota City (Branch 63) is ANNULLED and a new one entered, DISMISSING the
Complaint in Civil Case 713. The Writ of Preliminary Injunction issued therein is also
expressly VOIDED. No costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
 
G.R. No. 132767           January 18, 2000
PHILIPPINE VETERANS BANK, petitioner, 
vs.
THE HON. COURT OF APPEALS, HON. SECRETARY OF THE DEPT. OF AGRARIAN REFORM,
DEPT. OF AGRARIAN REFORM ADJUDICATION BOARD, DAVAO CITY and LAND BANK OF THE
PHILIPPINES, respondents.
MENDOZA, J.:
This is a petition for review of the decision of the Court of Appeals,1 dated August 28, 1997, affirming
the dismissal by the Regional Trial Court, Branch 2, Tagum, Davao, of the petition for judicial
determination of the just compensation filed by petitioner for the taking of its property under the
Comprehensive Agrarian Reform Program.
The facts are as follows:
Petitioner Philippine Veterans Bank owned four parcels of land in Tagum, Davao, which are covered by
Transfer Certificates of Title Nos. T-38666, T-38667, T-6236, and T-27591. The lands were taken by
the Department of Agrarian Reform for distribution to landless farmers pursuant to the Comprehensive
Agrarian Reform Law (R.A. No. 6657). Dissatisfied with the valuation of the land made by respondents
Land Bank of the Philippines and the Department of Agrarian Reform Adjudication Board (DARAB),
petitioner filed a petition for a determination of the just compensation for its property. The petition
was filed on January 26, 1994 with the Regional Trial Court, Branch 2, Tagum, Davao, which on
February 23, 1995, dismissed the petition on the ground that it was filed beyond the 15-day
reglementary period for filing appeals from the orders of the DARAB. Its order2 states in pertinent
parts:
Since this case was filed only on January 26, 1994, the fifteen-day period provided for under
Section 51 of Republic Act 6657 which is the Comprehensive Agrarian Reform Law within
which to appeal, already lapsed.
Sec. 51 of Republic Act No. 6657 provides:
Sec. 51. Finality of Determination. — Any case or controversy before it (DAR)
shall be decided within thirty (30) days after it is submitted for resolution. Only
one (1) motion for reconsideration shall be allowed. Any order, ruling or decision
shall be final after the lapse of fifteen (15) days from receipt of a copy thereof.
On appeal to the Court of Appeals, the decision was affirmed. It was held that:
Jurisdiction over land valuation cases is lodged in the Department of Agrarian Reform
Adjudication Board, as is plainly provided under Rule II of the DARAB Revised Rules of
Procedure.
Sec. 1. Primary and Exclusive Original and Appellate Jurisdiction. The Board shall
have primary and exclusive jurisdiction, both original and appellate, to determine
and adjudicate all agrarian disputes, involving the implementation of the
Comprehensive Agrarian Reform Program (CARP) under Republic Act No. 6657,
Executive Order Nos. 228, 229, and 129-A, Republic Act No. 3844 as amended by
Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and
their implementing rules and regulations. Specifically, such jurisdiction shall
include but not be limited to the following:
x x x           x x x           x x x.
b) The valuation of land, and determination and payment of just compensation,
fixing and collection of lease rentals, disturbance compensation, amortization
payments, and similar disputes concerning the functions of the Land Bank of the
Philippines.
 xxx     xxx     xxx
The above provision does not negate the original and exclusive jurisdiction vested in Special
Agrarian Court over all petitions for the determination of just compensation to landowners
as provided in Section 51 of R.A. 6657.
Note, however, must be taken of Rule XIII, Section 11 of the DARAB Rules of Procedure,
which specifically states that,
The decision of the Adjudicator on land valuation and preliminary determination
and payment of just compensation shall not be appealable to the Board but shall
be brought directly to the Regional Trial Court designated as a Special Agrarian
Courts within fifteen (15) days from the receipt of the notice thereof. Any party
shall be entitled to only one motion for reconsideration.
xxx     xxx     xxx
In pursuance thereof, it is clear that the right of a landowner who disagrees with the
valuation fixed by the DAR to file a petition for the judicial fixing of just compensation
before special agrarian courts must be exercised within the period provided in Rule XIII,
Section 11.1âwphi1.nêt
In this case, appellant neither gives information regarding the date of its receipt of the
questioned Order of the DAR Provincial Adjudicator, nor disputes the conclusion made by
the trial court that, "(s)ince this case was filed only on January 26, 1994, the fifteen-day
period provided for under Section 51 of Republic Act 6657 which is the Comprehensive
Agrarian Reform Law within which to appeal already lapsed". The court a quo's conclusion
therefore stands. It did not commit an error in dismissing the petition filed by Philippine
Veterans Bank for having been filed out of time.3
Petitioner filed a motion for reconsideration, but its motion was likewise denied. Hence, this petition
for review. Petitioner raises the following issue:
SHOULD A PETITION FOR THE JUDICIAL FIXING OF JUST COMPENSATION BEFORE SPECIAL
AGRARIAN COURT BE [FILED] WITHIN THE PERIOD PROVIDED IN RULE XIII, SECTION 11
OF THE DARAB RULES OF PROCEDURE AND BEFORE THE DECISION OF THE DAR
PROVINCIAL ADJUDICATOR BECOMES FINAL AND EXECUTORY?
Petitioner argues that DAR adjudicators have no jurisdiction to determine the just compensation for
the taking of lands under the Comprehensive Agrarian Reform Program, because such jurisdiction is
vested in Regional Trial Courts designated as Special Agrarian Courts and, therefore, a petition for the
fixing of just compensation can be filed beyond the 15-day period of appeal provided from the decision
of the DAR adjudicator.
On the other hand, respondents argue that actions for the fixing of just compensation must be filed in
the appropriate courts within 15 days from receipt of the decision of the DAR adjudicator, otherwise
such decision becomes final and executory, pursuant to §51 of R.A. No. 6657.
Petitioner's contention has no merit.
The pertinent provisions of R.A. No. 6657 provides:
Sec. 50 Quasi-Judicial Power of the DAR. — The DAR is hereby vested with primary
jurisdiction to determine and adjudicate agrarian reform matters involving the
implementation of agrarian reform, except those falling under the exclusive jurisdiction of
the Department of Agriculture (DA) and the Department of Environment and Natural
Resources (DENR). . . .
Sec. 57 Special Jurisdiction. — The Special Agrarian Courts shall have original and exclusive
jurisdiction over all petitions for the determination of just compensation to landowners, and
the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all
proceedings before the Special Agrarian Courts, unless modified by this Act.
The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction
within thirty (30) days from submission of the case for decision.
There is nothing contradictory between the provision of §50 granting the DAR primary jurisdiction to
determine and adjudicate "agrarian reform matters" and exclusive original jurisdiction over "all
matters involving the implementation of agrarian reform," which includes the determination of
questions of just compensation, and the provision of §57 granting Regional Trial Courts "original and
exclusive jurisdiction" over (1) all petitions for the determination of just compensation to landowner,
and (2) prosecutions of criminal offenses under R.A. No. 6657.4 The first refers to administrative
proceedings, while the second refers to judicial proceedings. Under R.A. No. 6657, the Land Bank of
the Philippines is charged with the preliminary determination of the value of lands placed under land
reform program and the compensation to be paid for their taking. It initiates the acquisition of
agricultural lands by notifying the landowner of the government's intention to acquire his land and the
valuation of the same as determined by the Land Bank.5 Within 30 days from receipt of notice, the
landowner shall inform the DAR of his acceptance or rejection of the offer.6 In the event the landowner
rejects the offer, a summary administrative proceeding is held by the provincial (PARAD), the regional
(RARAD) or the central (DARAB) adjudicator, as the case may be, depending on the value of the land,
for the purpose of determining the compensation for the land. The landowner, the Land Bank, and
other interested parties are then required to submit evidence as to the just compensation for the land.
The DAR adjudicator decides the case within 30 days after it is submitted for decision.7 If the
landowner finds the price unsatisfactory, he may bring the matter directly to the appropriate Regional
Trial Court.8
To implement the provisions of R.A. No. 6657, particularly §50 thereof, Rule XIII, §11 of the DARAB
Rules of Procedure provides:
Land Valuation Determination and Payment of Just Compensation. — The decision of the
Adjudicator on land valuation and preliminary determination and payment of just
compensation shall not be appealable to the Board but shall be brought directly to the
Regional Trial Courts designated as Special Agrarian Courts within fifteen (15) days from
receipt of the notice thereof. Any party shall be entitled to only one motion for
reconsideration.
As we held in Republic v. Court of Appeals,9 this rule is an acknowledgment by the DARAB that the
power to decide just compensation cases for the taking of lands under R.A. No. 6657 is vested in the
courts. It is error to think that, because of Rule XIII, §11, the original and exclusive jurisdiction given
to the courts to decide petitions for determination of just compensation has thereby been transformed
into an appellate jurisdiction. It only means that, in accordance with settled principles of
administrative law, primary jurisdiction is vested in the DAR as an administrative agency to determine
in a preliminary manner the reasonable compensation to be paid for the lands taken under the
Comprehensive Agrarian Reform Program, but such determination is subject to challenge in the
courts.
The jurisdiction of the Regional Trial Courts is not any less "original and exclusive" because the
question is first passed upon by the DAR, as the judicial proceedings are not a continuation of the
administrative determination. For that matter, the law may provide that the decision of the DAR is
final and unappealable. Nevertheless, resort to the courts cannot be foreclosed on the theory that
courts are the guarantors of the legality of administrative action.10
Accordingly, as the petition in the Regional Trial Court was filed beyond the 15-day period provided in
Rule XIII, §11 of the Rules of Procedure of the DARAB, the trial court correctly dismissed the case and
the Court of Appeals correctly affirmed the order of dismissal.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED.1âwphi1.nêt
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 169008               July 31, 2008
LAND BANK OF THE PHILIPPINES, Petitioner, 
vs.
RAYMUNDA MARTINEZ, Respondent.
RESOLUTION
NACHURA, J.:
Before the Court are petitioner’s September 20, 2007 Motion for Reconsideration1 and November 8,
2007 Supplemental Motion for Reconsideration,2 which seek the reversal of the August 14, 2007
Decision3 in the instant case. To recall, the Court in the challenged decision denied the petition for
review on certiorari and affirmed the ruling of the Court of Appeals (CA) in CA-G.R. SP No. 83276.
Lifted from the said assailed decision are the following antecedent facts and proceedings:
After compulsory acquisition by the Department of Agrarian Reform (DAR), on November 16, 1993, of
respondent Martinez’s 62.5369-hectare land in Barangay Agpudlos, San Andres, Romblon, pursuant to
Republic Act No. 6657 or the Comprehensive Agrarian Reform Law of 1988 (CARL), petitioner Land
Bank of the Philippines (LBP) offered P1,955,485.60 as just compensation. Convinced that the
proffered amount was unjust and confiscatory, respondent rejected it. Thus, the Department of
Agrarian Reform Adjudication Board (DARAB), through its Provincial Agrarian Reform Adjudicator
(PARAD) conducted summary administrative proceedings for the preliminary determination of just
compensation in accordance with Section 16 (d) of the CARL.
On September 4, 2002, PARAD Virgilio M. Sorita, finding some marked inconsistencies in the figures
and factors made as bases by LBP in its computation, rendered judgment as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered:
Ordering the Land Bank of the Philippines to pay landowner-protestant RAYMUNDA MARTINEZ for her
property covered and embraced by TCT No. T-712 with an area of 62.5369 hectares, more or less,
which the Department of Agrarian Reform intends to acquire, the total amount of TWELVE MILLION
ONE HUNDRED SEVENTY NINE THOUSAND FOUR HUNDRED NINETY TWO and 50/100 Pesos
(Php12,179,492.50), in the manner provided for by law.
SO ORDERED.
A petition for the fixing of just compensation docketed as Agrarian Case No. 696 was then filed by
LBP’s counsel before the Special Agrarian Court (SAC), the Regional Trial Court of Odiongan, Romblon,
Branch 82. After filing her answer to the said petition, respondent, contending that the orders, rulings
and decisions of the DARAB become final after the lapse of 15 days from their receipt, moved for the
dismissal of the petition for being filed out of time. Petitioner opposed the motion.
Meanwhile, respondent, still asserting the finality of PARAD Sorita’s decision, filed before the Office of
the PARAD a motion for the issuance of a writ of execution, which was eventually granted on
November 11, 2003. Ascertaining that the petition before the SAC was filed by LBP 26 days after it
received a copy of PARAD Sorita’s decision, the Office of the PARAD denied LBP’s motion for
reconsideration and ordered the issuance of a writ of execution on February 23, 2004. Aggrieved of
these developments, LBP, on March 12, 2004, moved to quash the said February 23, 2004 PARAD
resolution.
On April 6, 2004, even as the motion to quash was yet unresolved, LBP instituted a petition for
certiorari before the CA, which was docketed as CA-G.R. SP No. 83276, assailing both the November
11, 2003 and the February 23, 2004 PARAD resolutions. LBP primarily contended that the Office of the
PARAD gravely abused its discretion when it issued the writ of execution despite the pendency with
the SAC of a petition for the fixing of just compensation.
The CA, finding LBP guilty of forum-shopping for not disclosing the pendency of the Motion to Quash
dated March 12, 2004, dismissed the petition on September 28, 2004, thus:
ACCORDINGLY, the present petition for certiorari is DISMISSED outright.
Consequently, in view of the dismissal of the above-entitled case, we are no longer in a position to act
on the private respondent’s motion for execution pending appeal.
Further, this Court, mindful that under Sec. 5, Rule 7, of the 1997 Rules of Civil Procedure, willful and
deliberate forum-shopping constitutes direct contempt of court and cause for administrative sanctions,
which may both be resolved and imposed in the same case where the forum shopping is found,
WARNS the counsel of record of the petitioner that a repetition of a similar act of submitting a false
certification shall be dealt with most severely.
SO ORDERED.
Not persuaded by LBP’s motion for reconsideration, the appellate court denied the same on July 15,
2005. Necessarily, LBP, through its legal department, elevated the case before this Court on
September 9, 2005 via a petition for review on certiorari under Rule 45, contending, among others,
that it did not commit deliberate forum shopping for what it filed with the Office of the PARAD was a
motion to quash, which is not an initiatory pleading; and the decision of the PARAD cannot be
executed due to the pending petition for fixing of just compensation with the SAC.
On September 14, 2005, we issued a temporary restraining order (TRO) restraining the appellate
court and the DAR adjudicators from implementing the November 11, 2003 and the February 23, 2004
resolutions.
For her part, respondent contends that petitioner has committed forum-shopping when it filed a
certiorari petition without first awaiting the resolution by the Office of the PARAD of the motion to
quash; and that petitioner has lost its standing to sue considering that it is being represented by its
lawyers and not the Office of the Government Corporate Counsel (OGCC). [Citations omitted.]4
Three primordial issues were then resolved by the Court in the said decision—(1) whether or not
petitioner could file its appeal solely through its legal department; (2) whether or not petitioner
committed forum shopping; and (3) whether or not the Provincial Agrarian Reform Adjudicator
(PARAD) gravely abused his discretion when he issued a writ of execution despite the pendency of
LBP’s petition for fixing of just compensation with the Special Agrarian Court (SAC).
The Court went on to rule that the petition for review on certiorari could not be filed without the Office
of the Government Corporate Counsel (OGCC) entering its appearance as the principal legal counsel of
the bank or without the OGCC giving its conformity to the LBP Legal Department’s filing of the
petition. The Court also found petitioner to have forum-shopped when it moved to quash the PARAD
resolutions and at the same time petitioned for their annulment via certiorari under Rule 65. Most
importantly, the Court ruled that petitioner was not entitled to the issuance of a writ of certiorari by
the appellate court because the Office of the PARAD did not gravely abuse its discretion when it
undertook to execute the September 4, 2002 decision on land valuation. The said adjudicator’s
decision attained finality after the lapse of the 15-day period stated in Rule XIII, Section 11 of the
Department of Agrarian Reform Adjudication Board (DARAB) Rules of Procedure.
Dissatisfied with our ruling, petitioner successively filed, as aforesaid, the September 20, 2007 Motion
for Reconsideration5 and the November 8, 2007 Supplemental Motion for Reconsideration.6 In both
motions, petitioner contends that its lawyers are authorized to appear in the instant case for they
have been issued a letter of authority by the OGCC on April 17, 2006; that it did not commit
deliberate forum shopping; that the Provincial Agrarian Reform Adjudicator (PARAD) gravely abused
his discretion in issuing the writ of execution to implement his decision; that respondent’s defense of
res judicata or the alleged finality of the PARAD’s decision was never pleaded in her answer, hence,
was already deemed waived; that the PARAD had no jurisdiction to issue the writ of execution due to
the pending petition for determination of just compensation with the SAC; and that the Court’s August
14, 2007 Decision in this case is contrary to its October 11, 2007 Decision in Land Bank of the
Philippines v. Suntay, G.R. No. 157903 on the issue of whether the petition for determination of just
compensation was filed out of time.
Respondent, in her January 24, 2008 Comment,7 counters, among others, that the filing of the said
motions is only dilatory considering that the arguments raised therein have already been answered by
the Court in the decision sought to be reconsidered.
The Court agrees with respondent’s contention and denies petitioner’s motions.
Indeed, except for the alleged conflict of the August 14, 2007 Decision with that promulgated on
October 11, 2007 in G.R. No. 157903 [LBP v. Suntay], the grounds raised by petitioner in the motions
are identical to those stated in its previous pleadings. And these have already been considered and
sufficiently passed upon by the Court in the August 14, 2007 Decision.
On the supposedly conflicting pronouncements in the cited decisions, the Court reiterates its ruling in
this case that the agrarian reform adjudicator’s decision on land valuation attains finality after the
lapse of the 15-day period stated in the DARAB Rules. The petition for the fixing of just compensation
should therefore, following the law and settled jurisprudence, be filed with the SAC within the said
period. This conclusion, as already explained in the assailed decision, is based on the doctrines laid
down in Philippine Veterans Bank v. Court of Appeals8 and Department of Agrarian Reform
Adjudication Board v. Lubrica.9
In Philippine Veterans Bank, decided in 2000 through the pen of Justice Vicente V. Mendoza, the Court
ruled that the trial court correctly dismissed the petition for the fixing of just compensation because it
was filed beyond the 15-day period provided in the DARAB Rules.
In Lubrica, decided in 2005 through the pen of Justice Dante O. Tinga, the Court, citing Philippine
Veterans Bank, ruled that the adjudicator’s decision had already attained finality because LBP filed the
petition for just compensation beyond the 15-day reglementary period. Incidentally, Josefina Lubrica
is the assignee of Federico Suntay whose property is the subject of the aforementioned October 11,
2007 Decision in LBP v. Suntay.1avvphi1
Following settled doctrine, we ruled in this case that the PARAD’s decision had already attained finality
because of LBP’s failure to file the petition for the fixing of just compensation within the 15-day
period.
This ruling, however, as correctly pointed out by petitioner, runs counter to the Court’s recent decision
in Suntay [the motions for reconsideration in Suntay were denied with finality in the January 30, 2008
Resolution of the Court10], in which the Court ruled that the trial court erred in dismissing the petition
for determination of just compensation on the ground that it was filed out of time. The Court in that
case stressed that the petition was not an appeal from the adjudicator’s final decision but an original
action for the determination of just compensation.
We, however, promulgated our decision in this case ahead of Suntay. To reiterate, this case was
decided on August 14, 2007, while Suntay was decided two months later, or on October 11, 2007.
Suntay should have then remained consistent with our ruling, and with the doctrines enunciated in
Philippine Veterans Bank and in Lubrica, especially considering that Lubrica was the representative of
Suntay in the Suntay case.
The Court notes that the Suntay ruling is based on Republic of the Philippines v. Court of
Appeals,11 decided in 1996 also through the pen of Justice Vicente V. Mendoza. In that case, the Court
emphasized that the jurisdiction of the SAC is original and exclusive, not appellate. Republic, however,
was decided at a time when Rule XIII, Section 11 was not yet present in the DARAB Rules. Further,
Republic did not discuss whether the petition filed therein for the fixing of just compensation was filed
out of time or not. The Court merely decided the issue of whether cases involving just compensation
should first be appealed to the DARAB before the landowner can resort to the SAC under Section 57 of
R.A. No. 6657.
To resolve the conflict in the rulings of the Court, we now declare herein, for the guidance of the
bench and the bar, that the better rule is that stated in Philippine Veterans Bank, reiterated in Lubrica
and in the August 14, 2007 Decision in this case. Thus, while a petition for the fixing of just
compensation with the SAC is not an appeal from the agrarian reform adjudicator’s decision but an
original action, the same has to be filed within the 15-day period stated in the DARAB Rules;
otherwise, the adjudicator’s decision will attain finality. This rule is not only in accord with law and
settled jurisprudence but also with the principles of justice and equity. Verily, a belated petition before
the SAC, e.g., one filed a month, or a year, or even a decade after the land valuation of the DAR
adjudicator, must not leave the dispossessed landowner in a state of uncertainty as to the true value
of his property.
IN THE LIGHT OF THE FOREGOING DISQUISITIONS, the Court DENIES WITH FINALITY petitioner’s
September 20, 2007 Motion for Reconsideration and the November 8, 2007 Supplemental Motion for
Reconsideration.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 175175               September 29, 2008
LAND BANK OF THE PHILIPPINES, Petitioner, 
vs.
HEIRS OF ELEUTERIO CRUZ, Respondents.
DECISION
TINGA, J.:
This is a Petition for Review on Certiorari1 under Rule 45 of the 1997 Rules of Civil Procedure, assailing
the Decision2 and Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 93207. The CA decision
affirmed the decision of the Regional Trial Court (RTC) of Tuguegarao City, Branch 1 sitting as a
Special Agrarian Court (SAC), which approved and ordered the payment of the amount of just
compensation fixed by the Cagayan Provincial Agrarian Reform Adjudicator (PARAD) in favor of herein
respondents.4 The CA resolution denied petitioner’s motion for reconsideration of the decision.5
The following factual antecedents are matters of record.
Petitioner Land Bank of the Philippines (LBP) is a government banking institution designated under
Section 64 of Republic Act (R.A.) No. 6654 as the financial intermediary of the agrarian reform
program of the government.
Respondent Heirs of Eleuterio Cruz are Anicia Cruz-Papa, Resurreccion Cruz-Pagcaliwagan, Antonio D.
Cruz, Lourdes Cruz-Doma, Lorna Cruz-Felipe, Mamerto D. Cruz, Eduardo D. Cruz and Victoria Cruz-
Dumlao. Eleuterio Cruz is the registered owner of an unirrigated riceland situated in Lakambini, Tuao,
Cagayan per Transfer Certificate of Title No. T-368. Of the total 13.7320 hectares of respondents’
landholding, an area of 13.5550 hectares was placed by the government under the coverage of the
operation land transfer program under Presidential Decree (P.D.) No. 27.6
Petitioner pegged the value of the acquired landholding at P106,935.76 based on the guidelines set
forth under P.D. No. 277 and Executive Order (E.O.) No. 228.8 Respondents rejected petitioner’s
valuation and instituted an action for a summary proceeding for the preliminary determination of just
compensation before the PARAD. On 23 November 1999, the PARAD rendered a decision fixing the
just compensation in the amount of P80,000.00 per hectare.9 Petitioner sought reconsideration but
was unsuccessful.
Thus, on 28 January 2000, petitioner filed a petition for the determination of just compensation before
the RTC of Tuguegarao City.10 The petition was docketed as Agrarian Case No. 0058 and entitled Land
Bank of the Philippines v. Heirs of Eleuterio Cruz, represented by Lorna Cruz, et al.11
Petitioner’s evidence consisted of the testimonies of Benedicta Simon, head of the LBP Evaluation
Division of Land Owner’s Compensation Department, and Francisco de la Cruz, Chief, PARAD,
Cagayan. Simon testified that as the officer charged with reviewing claims under the agrarian reform
program, she computed the valuation of respondents’ landholdings based on the formula set forth in
P.D. No. 27, E.O. No. 228 and Administrative Order (A.O.) No. 13, series of 1994 and arrived at the
value of P106,935.76. As the PARAD Chief tasked to oversee the implementation of the agrarian
reform program, De la Cruz testified that the subject landholding was tenanted and covered by
production agreements between the owner and various tenants.12 Petitioner offered in evidence Exhibit
"H" to prove that the subject landholding had an average production of 25 and 40 cavans  per hectare
annually.
For their part, respondents presented Lorna Cruz Felipe, who testified that as one of the heirs of
Eleuterio Cruz, she knew that the subject landholding was planted with rice two or three times a year
and had a production capacity of 80 to 100 cavans per hectare. Felipe also claimed that the current
market value of the property was between P150,000.00 to P200,000.00 per hectare.13
On 07 December 2005, the RTC, sitting as an Special Agrarian Court (SAC), rendered a decision, the
dispositive portion of which reads:
WHEREFORE, in the light of the foregoing ratiocination, judgment is hereby rendered fixing the
amount of P80,000.00 to be the just compensation of the land subject of this case with an area of
13.7320 hectares situated at Lakambini, Tuao, Cagayan and covered under TCT No. T-368 and
ordering Land Bank of the Philippines to pay respondent represented by Lorna Cruz-Felipe the amount
of P1,098,560.00 in the manner provided by R.A. No. 6657 by way of full payment of the said just
compensation.
SO DECIDED.14
The SAC held that the value of P80,000.00 per hectare fixed by the PARAD should be accorded weight
and probative value and that the SAC is guided by the various factors enumerated in Section 1715 of
R.A. No. 6657 in determining just compensation. It disregarded respondents’ claim that the valuation
should be based on the current market value of the landholding since no evidence was adduced in
support of the claim. The SAC also did not accept petitioner’s valuation as it was based on P.D. No.
27, in which just compensation was determined at the time of the taking of the property.16
Petitioner filed a motion for reconsideration, which was denied in a Resolution dated 26 January
2006,17 prompting petitioner to elevate the matter to the CA. In its petition for review,18 petitioner
questioned the total land area as well as the amount of just compensation adjudged by the SAC.19
On 17 August 2006, the CA rendered the assailed decision partly granting petitioner’s appeal.20 The
appellate court ruled that the total area covered by the agrarian reform program as was duly
established before the PARAD and expressly stated in the pre-trial order was only 13.5550 hectares
and not 13.7320 hectares as was stated in the dispositive portion of the decision of the
SAC.21However, the appellate court affirmed the SAC decision fixing just compensation at P80,000.00
per hectare. Petitioner sought consideration but was denied in the assailed Resolution dated 30
October 2006.22
Hence, the instant petition, arguing that the formula set forth in P.D. No. 27/E.O. No. 228 should be
applied in fixing just compensation since respondents’ landholding was acquired under P.D. No. 27.
Citing Section 223 of E.O. No. 228 and LBP v. Hon. David C. Naval,24 petitioner posits that the correct
formula in determining the just compensation should be Land Value = (2.5 x AGP x P35) x A, where
AGP is the Average Gross Production per hectare; P35.00 is the Government Support Price for palay in
1972; and A is the total land area.
Petitioner insists that the values in E.O. No. 228 are applicable to lands acquired under P.D. No. 27 in
cognizance of the well-settled rule that just compensation is the value of the property at the time of
the taking on 21 October 1972, when the ownership of the subject property was transferred from the
landowner to the farmers-beneficiaries and when the former was effectively deprived of dominion and
possession over said land.1awphi1.net/p>
The petition lacks merit.
The Court laid down in Paris v. Alfeche25 the applicability of P.D. No. 27 and E.O. No. 228 in relation to
R.A. No. 6657 in the matter of the payment of just compensation. There the Court explained that
while under P.D. No. 27 tenant farmers are already deemed owners of the land they till, they are still
required to pay the cost of the land before the title is transferred to them and that pending the
payment of just compensation, actual title to the tenanted land remains with the landowner.
In Paris, the application of the process of agrarian reform was still incomplete thus, the Court held
therein that with the passage of R.A. No. 6657 before its completion, the process should now be
completed under R.A. No. 6657, with P.D. No. 27 and E.O. No. 228 applying only suppletorily.26
In Land Bank of the Philippines v. Natividad,27 the Court explained why the guidelines under P.D. No.
27 and E.O. No. 228 are no longer applicable to the delayed payment of lands acquired under P.D. No.
27, to wit:
It would certainly be inequitable to determine just compensation based on the guideline provided by
PD No. 27 and EO 228 considering the DAR’s failure to determine the just compensation for a
considerable length of time. That just compensation should be determined in accordance with RA
6657, and not PD 27 or EO 228, is especially imperative considering that just compensation should be
the full and fair equivalent of the property taken from its owner by the expropriator, the equivalent
being real, substantial, full and ample.28
The decisive backdrop of the instant case coincides with that in Paris, that is, the amount of just
compensation due to respondents had not yet been settled by the time R.A. No. 6657 became
effective. Following the aforementioned pronouncement in Paris, the fixing of just compensation
should therefore be based on the parameters set out in R.A. No. 6657, with P.D. No. 27 and E.O. No.
228 having only suppletory effect.
Section 17 of R.A. No. 6657 states:
SEC. 17. Determination of Just Compensation. — In determining just compensation, the cost of
acquisition of the land, the current value of like properties, its nature, actual use and income, the
sworn valuation by the owner, the tax declarations, and the assessment made by government
assessors, shall be considered. The social and economic benefits contributed by the farmers and the
farmworkers and by government to the property as well as the non-payment of taxes or loans secured
from any government financing institution on the said land shall be considered as additional factors to
determine its valuation.
In Land Bank of the Philippines v. Celada,29 the Court ruled that the factors enumerated under Section
17, R.A. No. 6657 had already been translated into a basic formula by the Department of Agrarian
Reform (DAR) pursuant to its rule-making power under Section 49 of R.A. No. 6657. Thus, the Court
held in Celada that the formula outlined in DAR A.O. No. 5, series of 199830 should be applied in
computing just compensation.
Likewise, in Land Bank of the Philippines v. Sps. Banal,31 the Court ruled that the applicable formula in
fixing just compensation is DAR A.O. No. 6, series of 1992, as amended by DAR A.O. No. 11, series of
1994, then the governing regulation applicable to compulsory acquisition of lands, in recognition of the
DAR’s rule-making power to carry out the object of R.A. No. 6657. Because the trial court therein
based its valuation upon a different formula and did not conduct any hearing for the reception of
evidence, the Court ordered a remand of the case to the SAC for trial on the merits.
The mandatory application of the aforementioned guidelines in determining just compensation has
been reiterated recently in Land Bank of the Philippines v. Lim,32 where the Court also ordered the
remand of the case to the SAC for the determination of just compensation strictly in accordance with
DAR A.O. No. 6, series of 1992, as amended.
A perusal of the PARAD’s Decision dated 23 November 1999, which mandated payment of just
compensation in the amount of P80,000.00 per hectare, reveals that the PARAD did not adhere to the
formula prescribed in any of the aforementioned regulations issued by the DAR or was at least silent
on the applicability of the aforementioned DAR regulations to the question of just compensation. The
PARAD decision also did not refer to any evidence in support of its finding.
The SAC, meanwhile, referred to DAR A.O. No. 6, series of 1992, as amended, as the controlling
guideline in fixing just compensation. Pertinently, to obtain the land value, the formula33 under said
regulation requires that the values for the Capitalized Net Income, Comparable Sales and Market
Value based on the tax declaration must be shown. Moreover, said formula has been superseded by
DAR A.O. No. 05, series of 1998, which also requires values for Capitalized Net Income, Comparable
Sales and Market Value, the same parameters laid down in the prior regulation.
Stating that no evidence was presented by respondents on the aforementioned parameters, the SAC
ruled that it was constrained to adopt the finding of the PARAD, which fixed the value of the land
at P80,000.00 per hectare. On appeal, the CA adopted the same finding.
The general rule is that factual findings of the trial court, especially when affirmed by the CA, are
binding and conclusive on the Court. However, the rule admits of exceptions, as when the factual
findings are grounded entirely on speculation, surmises, or conjectures or when the findings are
conclusions without citation of specific evidence on which they are based.34
A perusal of the PARAD decision, which was adopted by both the SAC and the CA, shows that its
valuation of P80,000.00 per hectare is sorely lacking in any evidentiary or legal basis. While the Court
wants to fix just compensation due to respondents if only to write finis to the controversy, the
evidence on record is not sufficient for the Court to do so in accordance with DAR A.O. No. 5, series of
1998.
WHEREFORE, the instant petition for review on certiorari is DENIED and the decision and resolution
of the Court of Appeals in CA-G.R. SP No. 93207 are REVERSED and SET ASIDE. Agrarian Case No.
0058 is REMANDED to the Regional Trial Court, Branch 1, Tuguegarao City, Cagayan, which is
directed to determine with dispatch the just compensation due respondents strictly in accordance with
DAR A.O. No. 5, series of 1998.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 164876             January 23, 2006
LAND BANK OF THE PHILIPPINES, Petitioner, 
vs.
LEONILA P. CELADA, Respondent.
DECISION
YNARES-SANTIAGO, J.:
Respondent Leonila P. Celada owns 22.3167 hectares of agricultural land situated in Calatrava,
Carmen, Bohol registered under TCT No. 16436,1 of which 14.1939 hectares was identified in 1998 by
the Department of Agrarian Reform (DAR) as suitable for compulsory acquisition under the
Comprehensive Agrarian Reform Program (CARP). The matter was then indorsed to petitioner Land
Bank of the Philippines (LBP) for field investigation and land valuation.
In due course, LBP valued respondent’s land at P2.1105517 per square meter for an aggregate value
of P299,569.61.2 The DAR offered the same amount to respondent as just compensation, but it was
rejected. Nonetheless, on August 27, 1999, LBP deposited the said sum in cash and bonds in the
name of respondent.3
Pursuant to Section 16(d) of Republic Act (RA) No. 6657 or the Comprehensive Agrarian Reform Law
of 1988, the matter was referred to the DAR Adjudication Board (DARAB), Region VII-Cebu City, for
summary administrative hearing on determination of just compensation. The case was docketed as
DARAB Case No. VII-4767-B-990.
While the DARAB case was pending, respondent filed, on February 10, 2000, a petition4 for judicial
determination of just compensation against LBP, the DAR and the Municipal Agrarian Reform Officer
(MARO) of Carmen, Bohol, before the Regional Trial Court of Tagbilaran City. The same was docketed
as Civil Case No. 6462 and raffled to Branch 3, the designated Special Agrarian Court (SAC).
Respondent alleged that the current market value of her land is at least P150,000.00 per hectare
based on the following factors:
14.1. The land in question has been mortgaged to the defunct Rural Bank of San Miguel
(Bohol), Inc., for P1,220,000.00 on July 23, 1998 since it was appraised at P15.00 per
square meter;
14.2. Agricultural lands in said barangay are priced ranging from P140,000.00 to
P150,000.00 per hectare and current land transactions reveal said price range;
14.3. The land in question is titled or registered property, cultivated and fully developed
with rice5 and corn occupying the greater portion thereof;
14.4. The topography of the land, its soil condition, climate and productivity of surrounding
lots justify the just compensation requested or asked for;
14.5. Even the class and base unit market value for agricultural lands in Bohol is about
thirty (30) times higher than the price offered per hectare by DAR/LBP.6
On April 27, 2000, LBP filed its Answer7 raising non-exhaustion of administrative remedies as well as
forum-shopping as affirmative defense. According to petitioner, respondent must first await the
outcome of the DARAB case before taking any judicial recourse; that its valuation was arrived at by
applying the formula prescribed by law whereas respondent’s was based only on the "current value of
like properties".
The DAR and the MARO likewise filed an Answer8 averring that the determination of just compensation
rests exclusively with the LBP. Thus, they are not liable to respondent and are merely nominal parties
in the case.
Meanwhile, the DARAB Provincial Adjudicator (PARAD) issued an Order9 dated April 12, 2000 affirming
the valuation made by LBP. Respondent failed to appear in the DARAB case despite due notice.
On June 4, 2001, the SAC issued an order resolving petitioner’s affirmative defense in this wise:
WHEREFORE, the Affirmative Defense of x x x Land Bank is hereby denied. Besides, in the mind of the
court, the recourse to the DARAB is x x x of no moment since it is only conciliatory to the parties.
Upon agreement of the parties, the pre-trial is reset to June 11, 2001 at 9:00 in the morning.
SO ORDERED.10
Thereafter, a pre-trial conference was conducted11 and trial on the merits ensued. On March 1, 2003,
the SAC rendered judgment as follows:
WHEREFORE, in view of all the foregoing, the Court hereby fixes the compensation of the land of
petitioner at P2.50 per square meter or a total of P354,847.50 for the portion of 14.1939 hectares
subject of compulsory acquisition under the CARP which it believes just, fair and equitable under the
present circumstances and which shall earn legal interest of twelve percent (12%) per annum from
the time of its taking by the DAR. Furthermore, respondent Land Bank is hereby ordered to indemnify
petitioner the amount of P10,000.00 for attorney’s fee and incidental expenses of P5,000.00 and
costs.
SO ORDERED.12
LBP elevated the matter to the Court of Appeals which, however, dismissed the appeal outright on the
following grounds:
1. The petition is not accompanied with an affidavit of service, although there is an
explanation that respondent, respondent’s counsel and Judge Venancio J. Amila were
furnished with copies of the petition by registered mail x x x.
2. Petitioner’s counsel indicated his IBP and PTR but not his Roll of Attorney’s Number x x x.
3. Copies of (a) PARAD Decision x x x adverted to in the petition which fixed the land
valuation for just compensation at P299,569.11 and (b) petitioner’s Petition for Judicial
Determination of Just Compensation filed with the Regional Trial Court of Tagbilaran City,
Branch 3, were not attached as annexes, x x x.13
Upon denial of its motion for reconsideration,14 LBP filed the instant petition under Rule 45 of the Rules
of Court, alleging that:
A acquired jurisdiction over the action for the following reason:
THE COURT OF APPEALS ERRED IN X X X RIGIDLY OR STRICTLY APPLYING PROCEDURAL
LAW AT THE EXPENSE OF SUBSTANTIAL JUSTICE AND THE RIGHT TO APPEAL.
B of administrative decision. Thus, although the new rules speak of directly appealing the decision of
THE SAC A QUO ERRED IN ASSUMING JURISDICTION OVER THE PETITION FOR
DETERMINATION OF JUST COMPENSATION WHILE ADMINISTRATIVE PROCEEDINGS IS ON-
GOING BEFORE THE DARAB, REGION VII, CEBU CITY.
C
THE SAC A QUO ERRED IN FIXING THE JUST COMPENSATION OF THE LAND BASED NOT ON
ITS ACTUAL LAND USE BUT ON THE VALUATION OF NEIGHBORING LANDS.
D
THE SAC A QUO ERRED IN AWARDING ATTORNEY’S FEES AND INCIDENTAL EXPENSES X X
X.15
On the first assigned error, petitioner asserts that the Court of Appeals should have liberally construed
the rules of procedure and not dismissed its appeal on technical grounds.
We agree with petitioner.
The Court of Appeals dismissed petitioner’s appeal on three technical grounds, namely: (a) lack of
affidavit of service; (b) failure of counsel to indicate his Roll of Attorneys’ number; and (c) failure to
attach material portions of the records. However, the lack of affidavit of service is not deemed fatal
where the petition filed below is accompanied by the original registry receipts showing that the
petition and its annexes were served upon the parties.16 On the other hand, the failure of counsel to
indicate his Roll of Attorneys’ number would not affect respondent’s substantive rights, such that
petitioner’s counsel could have been directed to comply with the latter requirement rather than
dismiss the petition on purely technical grounds. As for petitioner’s failure to attach material portions
of the records, we held in Donato v. Court of Appeals17 that:
[T]he failure of the petitioner to x x x append to his petition copies of the pleadings and other material
portions of the records as would support the petition, does not justify the outright dismissal of the
petition. It must be emphasized that the RIRCA (Revised Internal Rules of the Court of Appeals) gives
the appellate court a certain leeway to require parties to submit additional documents as may be
necessary in the interest of substantial justice. Under Section 3, paragraph d of Rule 3 of the RIRCA,
the CA may require the parties to complete the annexes as the court deems necessary, and if the
petition is given due course, the CA may require the elevation of a complete record of the case as
provided for under Section 3(d)(5) of Rule 6 of the RIRCA x x x.18
An examination of the records and pleadings filed before the Court of Appeals reveals that there was
substantial compliance with procedural requirements. Moreover, we have held time and again that
cases should, as much as possible, be determined on the merits after the parties have been given full
opportunity to ventilate their causes and defenses, rather than on technicality or some procedural
imperfection.19 After all, technical rules of procedure are not ends in themselves but are primarily
devised to help in the proper and expedient dispensation of justice. In appropriate cases, therefore,
the rules may be construed liberally in order to meet and advance the cause of substantial justice.20
While a remand of the case to the appellate court would seem to be in order, we deem it proper to
resolve the case on the merits if only to write finis to the present controversy.
We do not agree with petitioner’s submission that the SAC erred in assuming jurisdiction over
respondent’s petition for determination of just compensation despite the pendency of the
administrative proceedings before the DARAB. In Land Bank of the Philippines v. Court of
Appeals,21 the landowner filed an action for determination of just compensation without waiting for the
completion of the DARAB’s re-evaluation of the land. The Court nonetheless held therein that the SAC
It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has ‘original and exclusive
jurisdiction over all petitions for the determination of just compensation to landowners.’ This ‘original
and exclusive’ jurisdiction of the RTC would be undermined if the DAR would vest in administrative
officials original jurisdiction in compensation cases and make the RTC an appellate court for the review
adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the original
and exclusive jurisdiction to determine such cases is in the RTCs. Any effort to transfer such
jurisdiction to the adjudicators and to convert the original jurisdiction of the RTCs into appellate
jurisdiction would be contrary to Sec. 57 and therefore would be void. Thus, direct resort to the SAC
by private respondent is valid.22
It would be well to emphasize that the taking of property under RA No. 6657 is an exercise of the
power of eminent domain by the State.23 The valuation of property or determination of just
compensation in eminent domain proceedings is essentially a judicial function which is vested with the
courts and not with administrative agencies.24Consequently, the SAC properly took cognizance of
respondent’s petition for determination of just compensation.
In the same vein, there is no merit to petitioner’s contention that respondent failed to exhaust
administrative remedies when she directly filed the petition for determination of just compensation
with the SAC even before the DARAB case could be resolved. The issue is now moot considering that
the valuation made by petitioner had long been affirmed by the DARAB in its order dated April 12,
2000. As held in Land Bank of the Philippines v. Wycoco,25the doctrine of exhaustion of administrative
remedies is inapplicable when the issue is rendered moot and academic, as in the instant case.
With regard to the third assigned error, however, we agree with petitioner that the SAC erred in Where: LV = Land Value
setting aside petitioner’s valuation of respondent’s land on the sole basis of the higher valuation given
for neighboring properties. In this regard, the SAC held:
CNI = Capitalized Net Income

It appears from the evidence of petitioner that the neighboring lands of similar classification were paid
higher than what was quoted to her land by respondent Land Bank as the value per square meter to CS = Comparable Sales
her land was only quoted at P2.1105517 while the others which were of the same classification were
paid by respondent Bank at P2.42 more or less, per square meter referring to the land of Consuelito MV = Market Value per Tax Declaration
Borja (Exh. D) and Cesar Borja (Exh. F). Furthermore, the land of petitioner was allegedly mortgaged
for a loan of P1,200,000.00 before the Rural Bank of San Miguel, Bohol and that it was purchased by
her from a certain Felipe Dungog for P450,000.00  although no documents therefor were shown to The above formula shall be used if all three factors are present, relevant, and applicable.
support her claim. Nevertheless, the Court finds a patent disparity in the price quotations by
respondent Land Bank for the land of petitioner and that of the other landowners brought under CARP
A1. When the CS factor is not present and CNI and MV are applicable, the formula shall be:
which could be caused by deficient or erroneous references due to the petitioner’s indifference and
stubborn attitude in not cooperating with respondent bank in submitting the data needed for the
evaluation of the property. x x x At any rate, the price quotation by respondent Land Bank on the land LV = (CNI x 0.9) + (MV x 0.1)
of the petitioner is low more so that it was done some four years ago, particularly, on June 22, 1998
(Exh. 1) and the same has become irrelevant in the course of time due to the devaluation of the peso
brought about by our staggering economy.26 A2. When the CNI factor is not present, and CS and MV are applicable, the formula shall be:

As can be gleaned from above ruling, the SAC based its valuation solely on the observation that there LV = (CS x 0.9) + (MV x 0.1)
was a "patent disparity" between the price given to respondent and the other landowners. We note
that it did not apply the DAR valuation formula since according to the SAC, it is Section 17 of RA No.
A3. When both the CS and CNI are not present and only MV is applicable, the formula shall be:
6657 that "should be the principal basis of computation as it is the law governing the matter".27 The
SAC further held that said Section 17 "cannot be superseded by any administrative order of a
government agency",28 thereby implying that the valuation formula under DAR Administrative Order LV = MV x 2
No. 5, Series of 1998 (DAR AO No. 5, s. of 1998),29 is invalid and of no effect.

In no case shall the value of idle land using the formula MV x 2 exceed the lowest value of land within
While SAC is required to consider the acquisition cost of the land, the current value of like properties, the same estate under consideration or within the same barangay or municipality (in that order)
its nature, actual use and income, the sworn valuation by the owner, the tax declaration and the approved by LBP within one (1) year from receipt of claimfolder.
assessments made by the government assessors30 to determine just compensation, it is equally true
that these factors have been translated into a basic formula by the DAR pursuant to its rule-making
power under Section 49 of RA No. 6657.31 As the government agency principally tasked to implement Accordingly, petitioner applied the formula under A1 above since the comparable sales factor ("CS
the agrarian reform program, it is the DAR’s duty to issue rules and regulations to carry out the object factor") was not present. As observed by the SAC itself, respondent refused to cooperate with the local
of the law. DAR AO No. 5, s. of 1998 precisely "filled in the details" of Section 17, RA No. 6657 by valuation office of petitioner and did not provide the necessary data to arrive at a proper "CS factor".
providing a basic formula by which the factors mentioned therein may be taken into account. The SAC DAR AO No. 5, s. of 1998 defines "CS factor" as follows:
was at no liberty to disregard the formula which was devised to implement the said provision.
C. CS shall refer to any one or the average of all the applicable sub-factors, namely ST, AC and MVM:
It is elementary that rules and regulations issued by administrative bodies to interpret the law which
they are entrusted to enforce, have the force of law, and are entitled to great respect.32 Administrative
Where: ST = Peso Value of Sales Transactions as defined under Item C.2
issuances partake of the nature of a statute33 and have in their favor a presumption of legality.34 As
such, courts cannot ignore administrative issuances especially when, as in this case, its validity was
not put in issue. Unless an administrative order is declared invalid, courts have no option but to apply AC = Acquisition Cost as defined under Item C.3
the same.

MVM = Market Value Based on Mortgage as defined under Item C.4

Thus, Section 17 of RA No. 6657 states:

SEC. 17. Determination of Just Compensation. – In determining just compensation, the cost of
acquisition of the land, the current value of like properties, its nature, actual use and income, the
sworn valuation by the owner, the tax declarations, and the assessment made by government
assessors, shall be considered. The social and economic benefits contributed by the farmers and the
farmworkers and by the Government to the property as well as the nonpayment of taxes or loans
secured from any government financing institution on the said land shall be considered as additional
factors to determine its valuation.
As stated earlier, the above provision is implemented through DAR AO No. 5, s. of 1998, which
provides that:
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C.2. The criteria in the selection of the comparable sales transaction (ST) shall be as follows:
a. When the required number of STs is not available at the barangay level, additional STs may be
secured from the municipality where the land being offered/covered is situated to complete the
required three comparable STs. In case there are more STs available than what is required at the
municipal level, the most recent transactions shall be considered. The same rule shall apply at the
provincial level when no STs are available at the municipal level. In all cases, the combination of STs
sourced from the barangay, municipality and province shall not exceed three transactions.

A. There shall be one basic formula for the valuation of lands covered by VOS or CA: b. The land subject of acquisition as well as those subject of comparable sales transactions should be
similar in topography, land use, i.e., planted to the same crop. Furthermore, in case of permanent
crops, the subject properties should be more or less comparable in terms of their stages of
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1) productivity and plant density.
c. The comparable sales transactions should have been executed within the period January 1, 1985 to
June 15, 1988, and registered within the period January 1, 1985, to September 13, 1988.
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C.3. Acquisition Cost (AC) – AC shall be deemed relevant when the property subject of acquisition was
acquired through purchase or exchange with another property within the period January 1, 1985 to
June 15, 1988 and registered within the period January 1, 1985 to September 13, 1988, and the
condition of said property is still substantially similar from the date of purchase or exchange to the
date of FI.
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C.4. Market Value Based on Mortgage (MVM) – For MVM to be relevant or applicable, the property
subject of acquisition should have been mortgaged as of June 15, 1988 and the condition of the
property is still substantially similar up to the date of FI. MVM shall refer to the latest available
appraised value of the property.
In the case at bar, while respondent attempted to prove during the hearings before the SAC,
comparable sales transactions, the acquisition cost of the property as well as its mortgage value, she
failed to submit adequate documentary evidence to support the same. Consequently, there was
nothing from which the "CS factor" could be determined.
In contrast, petitioner arrived at its valuation by using available factors culled from the Department of
Agriculture and Philippine Coconut Authority,35 and by computing the same in accordance with the
formula provided, thus –
COMPUTATION (Applicable Formula) : LV = 0.90 CNI + 0.10 MV
Comparable Land Transactions (P x x x x ____ ) = P x-x-x
Capitalized Net Income: Cassava 16,666.67 x 0.90 = 15,000.00
Corn/Coco 26,571.70 = 23,914.53
Market Value Cassava 8,963.78 x 0.10 = 896.38
per Tax Declaration: Corn/Coco 10,053.93 = 1,005.39
Computed Value per Hectare: Cassava – 15,896.38; Corn/Coco – 24,919.92
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Value per hectare used: Cassava 15,896.38 x 6.0000 has. = 95,378.28
Corn/Coco 24,919.92 x 8.1939 has. = 204,191.33
Payment due to LO : P299, 569.61
The above computation was explained by Antero M. Gablines, Chief of the Claims, Processing,
Valuation and Payment Division of the Agrarian Operations Center of the Land Bank, to wit:
ATTY. CABANGBANG: (On direct):
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q. What are the items needed for the Land Bank to compute?
a. In accordance with Administrative Order No. 5, series of 1998, the value of the land should be
computed using the capitalized net income plus the market value. We need the gross production of
the land and its output and the net income of the property.
q. You said "gross production". How would you fix the gross production of the property?
a. In that Administrative Order No. 5, if the owner of the land is cooperative, he is required to submit
the net income. Without submitting all his sworn statements, we will get the data from the DA
(Agriculture) or from the coconut authorities.
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q. In this recommended amount which you approved, how did you arrive at this figure?
a. We used the data from the Philippine (Coconut) Authority and the Agriculture and the data stated
that Cassava production was only 10,000 kilos per hectare; corn, 2,000 kilos; and coconuts, 15.38
kilos per hectare. The data stated that in the first cropping of 1986, the price of cassava was P1.00
per kilo; corn was sold at P7.75 per kilo; and the Philippine Coconut Authority stated that during that
time, the selling price of coconuts was P8.23 per kilo.
q. After these Production data and selling price, there is here a "cost of operation", what is this?
a. It is the expenses of the land owner or farmer. From day one of the cultivation until production.
Without the land owner’s submission of the sworn statement of the income, production and the cost, x
x x Administrative Order No. 5 states that x x x we will use 20% as the net income, meaning 80% of
the production in peso. This is the cost of valuation.
q. 80 % for what crops?
a. All crops except for coconuts where the cost of expenses is only 20%.
q. Summing all these data, what is the value per hectare of the cassava?
a. The cassava is P15,896.38.
q. How about the corn x x x intercropped with coconuts?
a. P24,919.92.36
Under the circumstances, we find the explanation and computation of petitioner to be sufficient and in
accordance with applicable laws. Petitioner’s valuation must thus be upheld.
Finally, there is no basis for the SAC’s award of 12% interest per annum in favor of respondent.
Although in some expropriation cases, the Court allowed the imposition of said interest, the same was
in the nature of damages for delay in payment which in effect makes the obligation on the part of the
government one of forbearance.37 In this case, there is no delay that would justify the payment of
interest since the just compensation due to respondent has been promptly and validly deposited in her
name in cash and LBP bonds. Neither is there factual or legal justification for the award of attorney’s
fees and costs of litigation in favor of respondent.
WHEREFORE, the instant petition is GRANTED. The Decision of the Regional Trial Court, Tagbilaran
City, Branch 3 in Civil Case No. 6462 dated March 1, 2003 is REVERSED and SET ASIDE. A new
judgment is entered fixing the just compensation for respondent’s land at P2.1105517 per square
meter or a total of P299,569.61.
SO ORDERED.