Session Four Retention, Exemption and Exclusions

1. Alita vs. Court of Appeals (170 SCRA 706, 1989)

Full text: http://www.lis.dar.gov.ph/home/document_view/3541 Ponente: PARAS, J. Notes: * AGRARIAN REFORM LAW; PRES. DECREE NO. 27; DOES NOT COVER LANDS OBTAINED THROUGH A HOMESTEAD PATENT. The pivotal issue is whether or not lands obtained through homestead patent are covered by the Agrarian Reform under P.D. 27. The question certainly calls for a negative answer. We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from the bondage of the soil and transferring to them ownership of the land they till is a sweeping social legislation, a remedial measure promulgated pursuant to the social justice precepts of the Constitution. However, such contention cannot be invoked to defeat the very purpose of the enactment of the Public Land Act or Commonwealth Act No. 141. Thus, "The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of land where he may build a modest house for himself and family and plant what is necessary for subsistence and for the satisfaction of life's other needs. The right of the citizens to their homes and to the things necessary for their subsistence is as vital as the right to life itself. They have a right to live with a certain degree of comfort as become human beings, and the State which looks after the welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right." (Patricio v. Bayog, 112 SCRA 45) * COMPREHENSIVE AGRARIAN REFORM LAW OF 1988 (RA NO. 6657); MAINTAINS THE INAPPLICABILITY OF P.D. 27 OVER HOMESTEAD GRANTEES. It is worthy of note that the newly promulgated Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise contains a proviso supporting the inapplicability of P.D. 27 to lands covered by homestead patents like those of the property in question, reading, "Section 6. Retention Limits . . . ". . . 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." ___________________________ FACTS:

The subject matter of the case consists of two (2) parcels of land, acquired by private respondents' predecessors-in-interest through homestead patent under the provisions of Commonwealth Act No. 141. Said lands are situated at Guilinan, Tungawan, Zamboanga del Sur. Private respondents are desirous of personally cultivating these lands, but petitioners refuse to vacate, relying on the provisions of P.D. 27 and P.D. 316 and appurtenant regulations issued by the then Ministry of Agrarian Reform (MAR for short), now Department of Agrarian Reform (DAR for short). Private respondents (then plaintiffs), instituted a complaint against Hon. Conrado Estrella as then Minister of Agrarian Reform, P.D. Macarambon as Regional Director of MAR Region IX, and herein petitioners (then defendants) for the declaration of P.D. 27 and all other Decrees, Letters of Instructions and General Orders issued in connection therewith as inapplicable to homestead lands. Plaintiffs filed an urgent motion to enjoin the defendants from declaring the lands in litigation under Operation Land Transfer and from being issued land transfer certificates to which the defendants filed their opposition dated August 4, 1982. The then Court of Agrarian Relations 16th Regional District, Branch IV, Pagadian City (now Regional Trial Court, 9th Judicial Region, Branch XVIII) rendered its decision dismissing the said complaint and the motion to enjoin the defendants was denied. The Regional Trial Court issued the decision declaring that Presidential Decree No. 27 is inapplicable to lands obtained thru the homestead law; Declaring that the four registered co-owners will cultivate and operate the farmholding themselves as owners thereof; and ejecting from the land the socalled tenants, namely; Gabino Alita, Jesus Julian, Sr., Jesus Julian, Jr., Pedro Ricalde, Vicente Ricalde and Rolando Salamar, as the owners would want to cultivate the farmholding themselves. The Court of Appeals sustained the trial courts decision

ISSUE: Whether or not lands obtained through homestead patent are covered by the Agrarian Reform under P.D. 27. HELD: The question certainly calls for a negative answer. We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from the bondage of the soil and transferring to them ownership of the land they till is a sweeping social legislation, a remedial measure promulgated pursuant to the social justice precepts of the Constitution. However, such contention cannot be invoked to defeat the very purpose of the enactment of the Public Land Act or Commonwealth Act No. 141. Thus, "The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of land where he may build a modest house for himself and family and plant what is necessary for subsistence and for the satisfaction of life's other needs. The right of the citizens to their homes and to the things necessary for their subsistence is as vital as the right to life itself. They have a right to live with a certain

degree of comfort as become human beings, and the State which looks after the welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right." (Patricio v. Bayog, 112 SCRA 45) In this regard, the Philippine Constitution likewise respects the superiority of the homesteaders' rights over the rights of the tenants guaranteed by the Agrarian Reform statute. In point is Section 6 of Article XIII of the 1987 Philippine Constitution which provides: "Section 6. The State shall apply the principles of agrarian reform or stewardship, whenever applicable in accordance with law, in the disposition or utilization of other natural resources, including lands of public domain under lease or concession suitable to agriculture, subject to prior rights, homestead rights of small settlers, and the rights of indigenous communities to their ancestral lands." Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise contains a proviso supporting the inapplicability of P.D. 27 to lands covered by homestead patents like those of the property in question, reading, "Section 6. Retention Limits . . .

". . . 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 decision of the respondent Court of Appeals sustaining the decision of the Regional Trial Court is AFFIRMED.

2. Natalia Realty et. al.. versus DAR, GR No. 103302, August 12, 1993
Full Text: http://www.lis.dar.gov.ph/home/document_view/3715 Ponente: BELLOSILLO, J. Note: * CIVIL LAW; LAND REGISTRATION; AGRICULTURAL LAND, DEFINED; LANDS NOT DEVOTED TO AGRICULTURAL ACTIVITY, OUTSIDE THE COVERAGE OF CARL. Section 4 of R.A. 6657 provides that the CARL shall "cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands." As to what constitutes "agricultural land," it is referred to as "land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land." (Sec. 3 (c), R.A. 6657)

The deliberations of the Constitutional Commission confirm this limitation. "Agricultural lands" are only those lands which are "arable and suitable agricultural lands" and "do not include commercial, industrial and residential lands." (Luz Farms v. Secretary of the Department of Agrarian Reform, G.R. No. 86889, 4 December 1990, 192 SCRA 51, citing Record, CONCOM, 7 August 1986, Vol. III, p. 30) Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands previously converted to non-agricultural uses prior to the effectivity of CARL by government agencies other than respondent DAR. In its Revised Rules and Regulations Governing Conversion of Private Agricultural Lands to Non-Agricultural Uses, (DAR Administrative Order No. 1, Series of 1990), DAR itself defined "agricultural land" thus ". . . Agricultural land refers to those devoted to agricultural activity as defined in R.A. 6657 and not classified as mineral or forest by the Department of Environment and Natural Resources (DENR) and its predecessor agencies, and not classified in town plans and zoning ordinances as approved by the Housing and Land Use Regulatory Board (HLURB) and its preceding competent authorities prior to 15 June 1988 for residential, commercial or industrial use." The Secretary of Justice, responding to a query by the Secretary of Agrarian Reform, noted in an Opinion that lands covered by Presidential Proclamation No. 1637, inter alia, of which the NATALIA lands are part, having been reserved for townsite purposes "to be developed as human settlements by the proper land and housing agency," are "not deemed 'agricultural lands' within the meaning and intent of Section 3 (c) of R.A. No. 6657." Not being deemed "agricultural lands," they are outside the coverage of CARL. ______________________________ FACTS: Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous parcels of land located in Banaba, Antipolo, Rizal, with areas of 120.9793 hectares, 1.3205 hectares and 2.7080 hectares, or a total of 125.0078 hectares. On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land located in the Municipalities of Antipolo, San Mateo and Montalban as townsite areas to absorb the population overspill in the metropolis which were designated as the Lungsod Silangan Townsite. The NATALIA properties are situated within the areas proclaimed as townsite reservation. Since private landowners were allowed to develop their properties into low-cost housing subdivisions within the reservation, petitioner Estate Developers and Investors Corporation (EDIC, for brevity), as developer of NATALIA properties, applied for and was granted preliminary approval and locational clearances by the Human Settlements Regulatory Commission. The necessary permit for Phase I of the subdivision project, which consisted of 13.2371 hectares, was issued sometime in 1982; for Phase II, with an area of 80.0000 hectares, on 13 October 1983; and for Phase III, which consisted of the remaining 31.7707 hectares, on 25 April 1986. Petitioners were likewise issued development permits after complying with the requirements. Thus the NATALIA properties later became the Antipolo Hills Subdivision.

On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1988" (CARL, for brevity), went into effect. Conformably therewith, respondent Department of Agrarian Reform (DAR, for brevity), through its Municipal Agrarian Reform Officer, issued on 22 November 1990 a Notice of Coverage on the undeveloped portions of the Antipolo Hills Subdivision which consisted of roughly 90.3307 hectares. NATALIA immediately registered its objection to the Notice of Coverage. EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and twice wrote him requesting the cancellation of the Notice of Coverage. Members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc. (SAMBA, for brevity), filed a complaint against NATALIA and EDIC before the DAR Regional Adjudicator to restrain petitioners from developing areas under cultivation by SAMBA members. The Regional Adjudicator temporarily restrained petitioners from proceeding with the development of the subdivision. Petitioners then moved to dismiss the complaint; it was denied. Instead, the Regional Adjudicator issued on 5 March 1991 a Writ of Preliminary Injunction. Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB); however, the DARAB merely remanded the case to the Regional Adjudicator for further proceedings. In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request to set aside the Notice of Coverage. Neither respondent Secretary nor respondent Director took action on the protestletters, thus compelling petitioners to institute this proceeding more than a year thereafter. Public respondents through the Office of the Solicitor General maintain that the permits granted petitioners were not valid and binding because they did not comply with the implementing Standards, Rules and Regulations of P.D. 957, otherwise known as "The Subdivision and Condominium Buyers' Protective Decree," in that no application for conversion of the NATALIA lands from agricultural to residential was ever filed with the DAR. In other words, there was no valid conversion. Moreover, public respondents allege that the instant petition was prematurely filed because the case instituted by SAMBA against petitioners before the DAR Regional Adjudicator has not yet terminated. Respondents conclude, as a consequence, that petitioners failed to fully exhaust administrative remedies available to them before coming to court. ISSUE: Are lands already classified for residential, commercial or industrial use, as approved by the Housing and Land Use Regulatory Board and its precursor agencies prior to 15 June 1988, covered by R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988? HELD: The petition is impressed with merit. A cursory reading of the Preliminary Approval and Locational Clearances as well as the Development Permits granted petitioners for Phases I, II and III of the Antipolo Hills Subdivision reveals that contrary to the claim of public respondents, petitioners NATALIA and EDIC did in fact comply with all the requirements of law. Section 4 of R.A. 6657 provides that the CARL shall "cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands." As to what constitutes "agricultural land," it is referred to as "land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land . The deliberations of the Constitutional Commission confirm this limitation. "Agricultural lands" are

only those lands which are "arable and suitable agricultural lands" and " do not include commercial, industrial and residential lands." Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision cannot in any language be considered as "agricultural lands." These lots were intended for residential use. They ceased to be agricultural lands upon approval of their inclusion in the Lungsod Silangan Reservation. Even today, the areas in question continue to be developed as a lowcost housing subdivision, albeit at a snail's pace. This can readily be gleaned from the fact that SAMBA members even instituted an action to restrain petitioners from continuing with such development. The enormity of the resources needed for developing a subdivision may have delayed its completion but this does not detract from the fact that these lands are still residential lands and outside the ambit of the CARL. Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands previously converted to non-agricultural uses prior to the effectivity of CARL by government agencies other than respondent DAR. In its Revised Rules and Regulations Governing Conversion of Private Agricultural Lands to Non-Agricultural Uses, DAR itself defined "agricultural land" thus ". . . Agricultural land refers to those devoted to agricultural activity as defined in R.A. 6657 and not classified as mineral or forest by the Department of Environment and Natural Resources (DENR) and its predecessor agencies, and not classified in town plans and zoning ordinances as approved by the Housing and Land Use Regulatory Board (HLURB) and its preceding competent authorities prior to 15 June 1988 for residential, commercial or industrial use." Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such conversion. It was therefore error to include the undeveloped portions of the Antipolo Hills Subdivision within the coverage of CARL. Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian Reform, noted in an Opinion that lands covered by Presidential Proclamation No. 1637, inter alia, of which the NATALIA lands are part, having been reserved for townsite purposes "to be developed as human settlements by the proper land and housing agency," are "not deemed 'agricultural lands' within the meaning and intent of Section 3 (c) of R.A. No. 6657." Not being deemed "agricultural lands," they are outside the coverage of CARL. In fine, we rule for petitioners and hold that public respondents gravely abused their discretion in issuing the assailed Notice of Coverage dated 22 November 1990 of lands over which they no longer have jurisdiction. WHEREFORE, the Petition for Certiorari is GRANTED. The Notice of Coverage of 22 November 1990 by virtue of which undeveloped portions of the Antipolo Hills Subdivision were placed under CARL coverage is hereby SET ASIDE.

3. Luz Farms vs. Secretary of Agrarian Reform, GR No. 86889, December 4, 1990 (192 SCRA 51)
Full Text: http://www.lis.dar.gov.ph/home/document_view/3617 Ponente: PARAS, J .

Doctrine: Raising of livestock, poultry, and swine are excluded from the coverage of the CARL.

FACTS: On 1988, RA 6657 was approved by the President of the Philippines. It includes the raising of livestock, poultry, and swine in its coverage. On 1989, the Secretary of Agrarian Reform promulgated the IRR of Secs. 11, 13, and 39 of the said law. Luz Farms, a corporation engaged in the livestock and poultry business, allegedly stands to be adversely affected by the enforcement of certain sections of RA 6657, of the Guidelines and Procedures Implementing Production and Profit Sharing under RA 6657, and of the IRR of Section 11. It prays that the aforesaid statutes be declared unconstitutional.

ISSUES and RULINGS: 1. W/N the CARL should include the raising of livestock, poultry and swine in its coverage (constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No. 6657). NO. It was never the intention of the framers of the Constitution to include the livestock and poultry industry in the coverage of the agrarian reform program of the government. The intention of the Committee was to limit the application of the word agriculture. Thus, Section II of RA 6657 which includes private agricultural lands devoted to commercial livestock, poultry, and swine raising in the

definition of commercial farms is invalid, to the extent that the aforecited agro-industrial activities are made to be covered by the agrarian reform program of the State. ARTICLE XIII xxx xxx xxx

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

2. W/N the requirement in Sections 13 and 32 of RA 6657 directing corporate farms to execute and implement production-sharing plans is unreasonable for being confiscatory and violative of due process, with respect to livestock and poultry raisers. YES. As there is no reason to include livestock and poultry lands in the coverage of agrarian reform, there is no need to call upon them to distribute from 3% of their gross sales and 10% of their net profits to their workers as additional compensation.

The instant petition is hereby GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in accordance therewith, are hereby DECLARED null and void for being unconstitutional and the writ of preliminary injunction issued is hereby MADE permanent.