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AGRARIAN REFORM AND SOCIAL

LEGISLATION CASES
TABLE OF CONTENTS
#1 GR No. 79310 ...................................................................................................................................................................... 3
#2 GR No. 127876 ................................................................................................................................................................. 39
#3 G.R. No. 78517 .................................................................................................................................................................. 84
#4 G.R. No. 103302 ............................................................................................................................................................... 88
#5 G.R. No. 86889 .................................................................................................................................................................. 95
#6 G.R. No. 162070 ............................................................................................................................................................ 104
#7 G.R. No. 182332 ............................................................................................................................................................ 110
#8 G.R. No. 100091 ............................................................................................................................................................ 130
#9 G.R. No. 158228 ............................................................................................................................................................ 142
#10 G.R. No. 103125.......................................................................................................................................................... 148
#11 G.R. No. 149548.......................................................................................................................................................... 157
#12 G.R. No. 127198.......................................................................................................................................................... 267
#13 G.R. No. 118712.......................................................................................................................................................... 275
#14 G.R. No. 170220.......................................................................................................................................................... 286
#15 G.R. No. 159674.......................................................................................................................................................... 298
#16 G.R. No. 78214 ............................................................................................................................................................ 313
#17 G.R. No. 86186 ............................................................................................................................................................ 320
#18 G.R. No. L-27797 ........................................................................................................................................................ 328
#19 G.R. No. 132477.......................................................................................................................................................... 336
#20 G.R. No. 183409.......................................................................................................................................................... 348
#21 G.R. No. 131457.......................................................................................................................................................... 364
#22 UDK No. 9864.............................................................................................................................................................. 381
#23 G.R. No. 154112.......................................................................................................................................................... 389
#24 G.R. No. 132767.......................................................................................................................................................... 402
#25 G.R. No. 175175.......................................................................................................................................................... 407
#26 G.R. No. 164876.......................................................................................................................................................... 417
#27 G.R. No. 128557.......................................................................................................................................................... 434
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#1 GR NO. 79310
EN BANC
[G.R. No. 78742. July 14, 1989.]

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ,

GERARDO B. ALARCIO, FELIFE A. GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B.
CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G. ESTRADA,
FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J. PRESTOSA,
EMERENCIANA J. ISLA, FELICISIMA C. APRESTO, CONSUELO M. MORALES, BENJAMIN R.
SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S. FERRER, petitioners, vs. HONORABLE
SECRETARY OF AGRARIAN REFORM, respondent.

[G.R. No. 79310. July 14, 1989.]

ARSENIO AL. ACUA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO
GUSTILO, PAULINO D. TOLENTINO and PLANTERS' COMMITTEE, INC., Victorias Mill District,
Victorias, Negros Occidental, petitioners, vs. JOKER ARROYO, PHILIP E. JUICO and
PRESIDENTIAL AGRARIAN REFORM COUNCIL,respondents.

[G.R. No. 79744. July 14, 1989.]

INOCENTES PABICO, petitioner, vs. HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT
OF AGRARIAN REFORM, HON. JOKER ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF
THE PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME ABOGADO, CONRADO AVANCEA,
and ROBERTO TAAY,respondents.

[G.R. No. 79777. July 14, 1989.]

NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners, vs. HON. PHILIP ELLA JUICO, as
Secretary of Agrarian Reform, and LAND BANK OF THE PHILIPPINES, respondents.

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SYLLABUS

1.
CONSTITUTIONAL LAW; SUPREME COURT; ROLE. Although holding neither purse
nor sword and so regarded as the weakest of the three departments of the government, the
judiciary is nonetheless vested with the power to annul the acts of either the legislative or the
executive or of both when not conformable to the fundamental law. This is the reason for
what some quarters call the doctrine of judicial supremacy.
2.
ID.; SEPARATION OF POWERS; CONSTRUED. The doctrine of separation of powers
imposes upon the courts a proper restraint, born of the nature of their functions and of their
respect for the other departments, in striking down the acts of the legislative and the
executive as unconstitutional. The policy, indeed, is a blend of courtesy and caution. To doubt
is to sustain. The theory is that before the act was done or the law was enacted, earnest
studies were made by Congress or the President, or both, to insure that the Constitution
would not be breached.
3.
ID.; SUPREME COURT; POWER TO DECLARE AN ACT OR LAW UNCONSTITUTIONAL;
CONSTITUTIONS. The Constitution itself lays down stringent conditions for a declaration
of unconstitutionality, requiring therefor the concurrence of a majority of the members of the
Supreme Court who took part in the deliberations and voted on the issue during their
session en banc.
4.
ID.; ID.; ID.; JUDICIAL INQUIRY; REQUISITES. The Court will assume jurisdiction
over a constitutional question only if it is shown that the essential requisites of a judicial
inquiry into such a question are first satisfied. Thus, there must be an actual case or
controversy involving a conflict of legal rights susceptible of judicial determination, the
constitutional question must have been opportunely raised by the proper party, and the
resolution of the question is unavoidably necessary to the decision of the case itself.
5.
REMEDIAL LAW; ACTIONS; PROPER PARTY; CASE AT BAR. With particular regard
to the requirement of proper party as applied in the cases before us, we hold that the same is
satisfied by the petitioners and intervenors because each of them has sustained or is in
danger of sustaining an immediate injury as a result of the acts or measures complained of.
6.
CONSTITUTIONAL LAW; SUPREME COURT; POWER TO DECLARE AN ACT OR LAW
UNCONSTITUTIONAL; TRIBUNAL WITH WIDE DISCRETION TO WAIVE REQUIREMENT.
Even if, strictly speaking, they are not covered by the definition, it is still within the wide
discretion of the Court to waive the requirement and so remove the impediment to its
addressing and resolving the serious constitutional questions raised.
7.
ID.; ID.; JUDICIAL SUPREMACY. . . . When the judiciary mediates to allocate
constitutional boundaries, it does not assert any superiority over the other departments; it
does not in reality nullify or invalidate an act of the Legislature, but only asserts the solemn
and sacred obligation assigned to it by the Constitution to determine conflicting claims of
authority under the Constitution and to establish for the parties in an actual controversy the
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rights which that instrument secures and guarantees to them. This is in truth all that is
involved in what is termed "judicial supremacy" which properly is the power of judicial
review under the Constitution.
8.
ID.; 1973 CONSTITUTION; PRESIDENT; EXERCISE OF LEGISLATIVE POWER DURING
MARTIAL LAW, SUSTAINED. The promulgation of P.D. No. 27 by President Marcos in the
exercise of his powers under martial law has already been sustained in Gonzales v. Estrella
and we find no reason to modify or reverse it on that issue.
9.
ID.; 1987 CONSTITUTION; PRESIDENT; LEGISLATIVE POWER, AUTHORIZED. As for
the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the
same was authorized under Section 6 of the Transitory Provisions of the 1987 Constitution,
quoted above. The said measures were issued by President Aquino before July 27, 1987,
when the Congress of the Philippines was formally convened and took over legislative power
from her. They are not "midnight" enactments intended to pre-empt the legislature because
E.O. No. 228 was issued on July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O.
No. 229, were both issued on July 22, 1987.
10.
ID.; ID.; ID.; MEASURES PROMULGATED REMAINS VALID EVEN AFTER LOST OF
LEGISLATIVE POWER; RATIONALE. Neither is it correct to say that these measures ceased
to be valid when she lost her legislative power for, like any statute, they continue to be in
force unless modified or repealed by subsequent law or declared invalid by the courts. A
statute does not ipso facto become inoperative simply because of the dissolution of the
legislature that enacted it. By the same token, President Aquino's loss of legislative power did
not have the effect of invalidating all the measures enacted by her when and as long as she
possessed it.
11.
ID.; STATUTES; PROCLAMATION REMAINS VALID EVEN AFTER LOST OF
LEGISLATIVE POWER; RATIONALE. Proc. No. 131 is not an appropriation measure even if
it does provide for the creation of said fund, for that is not its principal purpose. An
appropriation law is one the primary and specific purpose of which is to authorize the
release of public funds from the treasury. The creation of the fund is only incidental to the
main objective of the proclamation, which is agrarian reform.
12.
ID.; ID.; PROCLAMATION NO. 131 AND EXECUTIVE ORDER NO. 229; ABSENCE OF
RETENTION LIMIT PROVIDED FOR IN REPUBLIC ACT NO. 6657. The argument of some of
the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated because they do not
provide for retention limits as required by Article XIII, Section 4 of the Constitution is no
longer tenable. R.A. No. 6657 does provide that 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 two (2) qualification which is now in Section 6 of the law.
13.
ID.; ID.; TITLE OF A BILL NEED NOT BE CATALOGUED. The title of the bill does not
have to be a catalogue of its contents and will suffice if the matters embodied in the text are
relevant to each other and may be inferred from the title.
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14.
CIVIL LAW; EFFECT AND APPLICATION OF LAWS; ISSUANCES FROM THE PRESIDENT
REQUIRE PUBLICATION FOR EFFECTIVITY. But for all their peremptoriness, these
issuances from the President Marcos still had to comply with the requirement for publication
as this Court held in Taada v. Tuvera. Hence, unless published in the Official Gazette in
accordance with Article 2 of the Civil Code, they could not have any force and effect if they
were among those enactments successfully challenged in that case. (LOI 474 was published,
though, in the Official Gazette dated November 29, 1976.)
15.
REMEDIAL LAW; SPECIAL CIVIL ACTION; MANDAMUS; OFFICE. Mandamus will lie
to compel the discharge of the discretionary duty itself but not to control the discretion to be
exercised. In other words, mandamus can issue to requireaction only but not specific action.
16.
ID.; ID.; ID.; GENERALLY NOT AVAILABLE WHERE THERE IS A PLAIN, SPEEDY
REMEDY; EXCEPTION. While it is true that as a rule the writ will not be proper as long as
there is still a plain, speedy and adequate remedy available from the administrative
authorities, resort to the courts may still be permitted if the issue raised is a question of law.
17.
POLITICAL LAW; POLICE POWER AND EMINENT DOMAIN; TRADITIONAL
DISTINCTIONS. There are traditional distinctions between the police power and the
power of eminent domain that logically preclude the application of both powers at the same
time on the same subject. The cases before us present no knotty complication insofar as the
question of compensable taking is concerned. To the extent that the measures under
challenge merely prescribe retention limits for landowners, there is an exercise of the police
power for the regulation of private property in accordance with the Constitution. But where,
to carry out such regulation, it becomes necessary to deprive such owners of whatever lands
they may own in excess of the maximum area allowed, there is definitely a taking under the
power of eminent domain for which payment of just compensation is imperative. The taking
contemplated is not a mere limitation of the use of the land. What is required is the surrender
of the title to and the physical possession of the said excess and all beneficial rights accruing
to the owner in favor of the farmer-beneficiary. This is definitely an exercise not of the police
power but of the power of eminent domain.
18.
BILL OF RIGHTS; EQUAL PROTECTION CLAUSE; CLASSIFICATION; DEFINED.
Classification has been defined as the grouping of persons or things similar to each other in
certain particulars and different from each other in these same particulars.
19.
ID.; ID.; ID.; REQUISITES.; EQUAL PROTECTION CLAUSE; CLASSIFICATION; DEFINED.
To be valid, it must conform to the following requirements: (1) it must be based on
substantial distinctions; (2) it must be germane to the purposes of the law; (3) it must not be
limited to existing conditions only; and (4) it must apply equally to all the members of the
class.
20.
ID.; ID.; ID.; MEANING. Equal protection simply means that all persons or things
similarly situated must be treated alike both as to the rights conferred and the liabilities
imposed.
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21.
POLITICAL LAW; EMINENT DOMAIN; NATURE. Eminent domain is an inherent
power of the State that enables it to forcibly acquire private lands intended for public use
upon payment of just compensation to the owner.
22.
ID.; ID.; WHEN AVAILED OF. Obviously, there is no need to expropriate where the
owner is willing to sell under terms also acceptable to the purchaser, in which case an
ordinary deed of sale may be agreed upon by the parties. It is only where the owner is
unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that
the power of eminent domain will come into play to assert the paramount authority of the
State over the interests of the property owner. Private rights must then yield to the
irresistible demands of the public interest on the time-honored justification, as in the case of
the police power, that the welfare of the people is the supreme law.
23.
ID.; ID.; REQUIREMENTS. Basically, the requirements for a proper exercise of the
power are: (1) public use and (2) just compensation.
24.
ID.; POLITICAL QUESTION; DEFINED. The term "political question" connotes what
it means in ordinary parlance, namely, a question of policy. It refers to "those questions
which, under the Constitution, are to be decided by the people in their sovereign capacity; or
in regard to which full discretionary authority has been delegated to the legislative or
executive branch of the government." It is concerned with issues dependent upon the
wisdom, not legality, of a particular measure. (Taada vs. Cuenco, 100 Phil. 1101)
25.
ID.; EMINENT DOMAIN JUST COMPENSATION; DEFINED. Just compensation is
defined as the full and fair equivalent of the property taken from its owner by the
expropriator.
26.
ID.; ID.; ID.; WORD "JUST", EXPLAINED. It has been repeatedly stressed by this
Court that the measure is not the taker's gain but the owner's loss. The word "just" is used to
intensify the meaning of the word "compensation" to convey the idea that the equivalent to
be rendered for the property to be taken shall be real, substantial, full, ample.
27.
ID.; ID.; ID.; COMPENSABLE TAKING; CONDITIONS. There is compensable taking
when the following conditions concur: (1) the expropriator must enter a private property;
(2) the entry must be for more than a momentary period; (3) the entry must be under
warrant or color of legal authority; (4) the property must be devoted to public use or
otherwise informally appropriated or injuriously affected; and (5) the utilization of the
property for public use must be in such a way as to oust the owner and deprive him of
beneficial enjoyment of the property.
28.
ID.; ID.; ID.; DEPOSIT NOT NECESSARY WHERE THE EXPROPRIATOR IS THE ESTATE.
Where the State itself is the expropriator, it is not necessary for it to make a deposit upon
its taking possession of the condemned property, as "the compensation is a public charge, the
good faith of the public is pledged for its payment, and all the resources of taxation may be
employed in raising the amount."

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29.
ID.; ID.; ID.; DETERMINATION THEREOF, ADDRESSED TO THE COURTS OF JUSTICE.
The determination of just compensation is a function addressed to the courts of justice and
may not be usurped by any other branch or official of the government.
30.
ID.; ID.; ID.; EMINENT DOMAIN UNDER THE COMPREHENSIVE AGRARIAN REFORM
LAW; DETERMINATION MADE BY THE DEPARTMENT OF AGRARIAN RELATIONS, ONLY
PRELIMINARY. The determination of the just compensation by the DAR is not by any
means final and conclusive upon the landowner or any other interested party, for Section 16
(f) clearly provides: Any party who disagrees with the decision may bring the matter to the
court of proper jurisdiction for final determination of just compensation. The determination
made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the
courts of justice will still have the right to review with finality the said determination in the
exercise of what is admittedly a judicial function.
31.
ID.; ID.; ID.; PAYMENT IN MONEY ONLY NOT APPLICABLE IN REVOLUTIONARY KIND
OF EXPROPRIATION. We do not deal here with the traditional exercise of the power of
eminent domain. This is not an ordinary expropriation where only a specific property of
relatively limited area is sought to be taken by the State from its owner for a specific and
perhaps local purpose. What we deal with here is a revolutionary kind of expropriation. The
expropriation before us affects all private agricultural lands whenever found and of whatever
kind as long as they are in excess of the maximum retention limits allowed their owners. Such
a program will involve not mere millions of pesos. The cost will be tremendous. Considering
the vast areas of land subject to expropriation under the laws before us, we estimate that
hundreds of billions of pesos will be needed, far more indeed than the amount of P50 billion
initially appropriated, which is already staggering as it is by our present standards. The Court
has not found in the records of the Constitutional Commission any categorial agreement
among the members regarding the meaning to be given the concept of just compensation as
applied to the comprehensive agrarian reform program being contemplated. On the other
hand, there is nothing in the records either that militates against the assumptions we are
making of the general sentiments and intention of the members on the content and manner
of the payment to be made to the landowner in the light of the magnitude of the expenditure
and the limitations of the expropriator. Therefore, payment of the just compensation is not
always required to be made fully in money.
32.
ID.; ID.; ID.; PRINCIPLE THAT TITLE SHALL PASS ONLY UPON FULL PAYMENT OF
JUST COMPENSATION, NOT APPLICABLE. Title to the property expropriated shall pass
from the owner to the expropriator only upon full payment of the just compensation. 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.
Hence, that the assailed measures violate due process by arbitrarily transferring title before
the land is fully paid for must also be rejected.

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33.
ADMINISTRATIVE LAW; EXHAUSTION OF ADMINISTRATIVE REMEDIES; CASE AT
BAR. It does not appear in G.R. No. 78742 that the appeal filed by the petitioners with the
Office of the President has already been resolved. Although we have said that the doctrine of
exhaustion of administrative remedies need not preclude immediate resort to judicial action,
there are factual issues that have yet to be examined on the administrative level, especially
the claim that the petitioners are not covered by LOI 474 because they do not own other
agricultural lands than the subjects of their petition. Obviously, the Court cannot resolve
these issues.

DECISION

CRUZ, J p:
In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his
life on his way to Mycenae after performing his eleventh labor. The two wrestled mightily and
Hercules flung his adversary to the ground thinking him dead, but Antaeus rose even stronger to
resume their struggle. This happened several times to Hercules' increasing amazement. Finally, as
they continued grappling, it dawned on Hercules that Antaeus was the son of Gaea and could never
die as long as any part of his body was touching his Mother Earth. Thus forewarned, Hercules then
held Antaeus up in the air, beyond the reach of the sustaining soil, and crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the
powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental
forces of life and death, of men and women who, like Antaeus, need the sustaining strength of the
precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of
this precious resource among our people. But it is more than a slogan. Through the brooding
centuries, it has become a battlecry dramatizing the increasingly urgent demand of the
dispossessed among us for a plot of earth as their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure
the well-being and economic security of all the people," 1 especially the less privileged. In 1973, the
new Constitution affirmed this goal, adding specifically that "the State shall regulate the acquisition,
ownership, use, enjoyment and disposition of private property and equitably diffuse property
ownership and profits.' 2 Significantly, there was also the specific injunction to "formulate and
implement an agrarian reform program aimed at emancipating the tenant from the bondage of the
soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also
adopted one whole and separate Article XIII on Social Justice and Human Rights, containing
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grandiose but undoubtedly sincere provisions for the uplift of the common people. These include a
call in the following words for the adoption by the State of an agrarian reform program:
SEC. 4.

The State shall, by law, undertake an agrarian reform program founded on the right of

farmers and regular farmworkers, who are landless, to own directly or collectively the lands they
till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations and subject to the payment of just
compensation. In determining retention limits, the State shall respect the right of small landowners.
The State shall further provide incentives for voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had
already been enacted by the Congress of the Philippines on August 8, 1963, in line with the abovestated principles. This was substantially superseded almost a decade later by P.D. No. 27, which was
promulgated on October 21, 1972, along with martial law, to provide for the compulsory
acquisition of private lands for distribution among tenant-farmers and to specify maximum
retention limits for landowners.
The people power revolution of 1986 did not change and indeed even energized the thrust for
agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228, declaring
full land ownership in favor of the beneficiaries of P.D. No. 27 and providing for the valuation of still
unvalued lands covered by the decree as well as the manner of their payment. This was followed on
July 22, 1987 by Presidential Proclamation No. 131, instituting a comprehensive agrarian reform
program (CARP), and E.O. No. 229, providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines took over
legislative power from the President and started its own deliberations, including extensive public
hearings, on the improvement of the interests of farmers. The result, after almost a year of spirited
debate, was the enactment of R.A. No. 6657, otherwise known as the Comprehensive Agrarian
Reform Law of 1988, which President Aquino signed on June 10, 1988. This law, while considerably
changing the earlier mentioned enactments, nevertheless gives them suppletory effect insofar as
they are not inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they involve common legal
questions, including serious challenges to the constitutionality of the several measures mentioned
above. They will be the subject of one common discussion and resolution. The different antecedents
of each case will require separate treatment, however, and will must be explained hereunder.

G.R. No. 79777

Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and
R.A. No. 6657.
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The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by
petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants and owned
by petitioner Augustin Hermano, Jr. The tenants were declared full owners of these lands by E.O.
No. 228 as qualified farmers under P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on groundsinter alia of
separation of powers, due process, equal protection and the constitutional limitation that no private
property shall be taken for public use without just compensation.
They contend that President Aquino usurped legislative power when she promulgated E.O. No.
228. The said measure is invalid also for violation of Article XIII, Section 4, of the Constitution, for
failure to provide for retention limits for small landowners. Moreover, it does not conform to Article
VI, Section 25(4) and the other requisites of a valid appropriation.
In connection with the determination of just compensation, the petitioners argue that the same
may be made only by a court of justice and not by the President of the Philippines. They invoke the
recent cases of EPZA v. Dulay 5 and Manotok v. National Food Authority. 6 Moreover, the just
compensation contemplated by the Bill of Rights is payable in money or in cash and not in the form
of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive order also deprives
the petitioners of their property rights as protected by due process. The equal protection clause is
also violated because the order places the burden of solving the agrarian problems on the owners
only of agricultural lands. No similar obligation is imposed on the owners of other properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the
owners of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so violated
due process. Worse, the measure would not solve the agrarian problem because even the small
farmers are deprived of their lands and the retention rights guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the
earlier cases of Chavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn Producers
of the Philippines, Inc. v. the National Land Reform council 9 The determination of just
compensation by the executive authorities conformably to the formula prescribed under the
questioned order is at best initial or preliminary only. It does not foreclose judicial intervention
whenever sought or warranted. At any rate, the challenge to the order is premature because no
valuation of their property has as yet been made by the Department of Agrarian Reform. The
petitioners are also not proper parties because the lands owned by them do not exceed the
maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for
retention limits on tenanted lands and that in any event their petition is a class suit brought in
behalf of landowners with landholdings below 24 hectares. They maintain that the determination of
just compensation by the administrative authorities is a final ascertainment. As for the cases
invoked by the public respondent, the constitutionality of P.D. No. 27 was merely assumed in
Chavez, while what was decided in Gonzales was the validity of the imposition of martial law.
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In the amended petition dated November 22, 1988, it is contended that P.D. No. 27, E.O. Nos.
228 and 229 (except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657.
Nevertheless, this statute should itself also be declared unconstitutional because it suffers from
substantially the same infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner
of a 1.83-hectare land, who complained that the DAR was insisting on the implementation of P.D.
No. 27 and E.O. No. 228 despite a compromise agreement he had reached with his tenant on the
payment of rentals. In a subsequent motion dated April 10, 1989, he adopted the allegations in the
basic amended petition that the above-mentioned enactments have been impliedly repealed by R.A.
No. 6657.

G.R. No. 79310

The petitioners herein are landowners and sugar planters in the Victorias Mill District,
Victorias, Negros Occidental. Co-petitioner Planters' Committee, Inc. is an organization composed of
1,400 planter-members. This petition seeks to prohibit the implementation of Proc. No. 131 and
E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program
as decreed by the Constitution belongs to Congress and not the President. Although they agree that
the President could exercise legislative power until the Congress was convened, she could do so
only to enact emergency measures during the transition period. At that, even assuming that the
interim legislative power of the President was properly exercised, Proc. No. 131 and E.O. No. 229
would still have to be annulled for violating the constitutional provisions on just compensation, due
process, and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund. There is hereby created a special fund, to be known as the Agrarian
Reform Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the
estimated cost of the Comprehensive Agrarian Reform Program from 1987 to 1992 which shall be
sourced from the receipts of the sale of the assets of the Asset Privatization Trust and Receipts of
sale of ill-gotten wealth received through the Presidential Commission on Good Government and
such other sources as government may deem appropriate. The amounts collected and accruing to
this special fund shall be considered automatically appropriated for the purpose authorized in this
Proclamation.
the amount appropriated is in futuro, not in esse. The money needed to cover the cost of the
contemplated expropriation has yet to be raised and cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment of just
compensation as it is traditionally understood, i.e., with money and in full, but no such payment is
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contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6, thereof provides that the
Land Bank of the Philippines "shall compensate the landowner in an amount to be established by
the government, which shall be based on the owner's declaration of current fair market value as
provided in Section 4 hereof, but subject to certain controls to be defined and promulgated by the
Presidential Agrarian Reform Council." This compensation may not be paid fully in money but in
any of several modes that may consist of part cash and part bond, with interest, maturing
periodically, or direct payment in cash or bond as may be mutually agreed upon by the beneficiary
and the landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no effort was made to make
a careful study of the sugar planters' situation. There is no tenancy problem in the sugar areas that
can justify the application of the CARP to them. To the extent that the sugar planters have been
lumped in the same legislation with other farmers, although they are a separate group with
problems exclusively their own, their right to equal protection has been violated.
A motion for intervention was filed on August 27, 1987 by the National Federation of Sugarcane
Planters (NASP) which claims a membership of at least 20,000 individual sugar planters all over the
country. On September 10, 1987, another motion for intervention was filed, this time by Manuel
Barcelona, et al., representing coconut and riceland owners. Both motions were granted by the
Court.
NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and
that, in any event, the appropriation is invalid because of uncertainty in the amount appropriated.
Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an initial
appropriation of fifty billion pesos and thus specifies the minimum rather than the maximum
authorized amount. This is not allowed. Furthermore, the statedinitial amount has not been
certified to by the National Treasurer as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and
convincing evidence the necessity for the exercise of the powers of eminent domain, and the
violation of the fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands, which is the
expropriation of the said land for an amount equal to the government assessor's valuation of the
land for tax purposes. On the other hand, if the landowner declares his own valuation, he is unjustly
required to immediately pay the corresponding taxes on the land, in violation of the uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the presumption of
constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity for the
expropriation as explained in the "whereas" clauses of the Proclamation and submits that, contrary
to the petitioner's contention, a pilot project to determine the feasibility of CARP and a general
survey on the people's opinion thereon are not indispensable prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters have failed to show
that they belong to a different class and should be differently treated. The Comment also suggests
the possibility of Congress first distributing public agricultural lands and scheduling the
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expropriation of private agricultural lands later. From this viewpoint, the petition for prohibition
would be premature.
The public respondent also points out that the constitutional prohibition is against the payment
of public money without the corresponding appropriation. There is no rule that only money already
in existence can be the subject of an appropriation law. Finally, the earmarking of fifty billion pesos
as Agrarian Reform Fund, although denominated as an initial amount, is actually the maximum sum
appropriated. The word "initial" simply means that additional amounts may be appropriated later
when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf,
assailing the constitutionality of E.O. No. 229. In addition to the arguments already raised, Serrano
contends that the measure is unconstitutional because:
(1)

Only public lands should be included in the CARP;

(2)

E.O. No. 229 embraces more than one subject which is not expressed in the title;

(3)

The power of the President to legislate was terminated on July 2, 1987; and

(4)
The appropriation of a P50 billion special fund from the National Treasury did not
originate from the House of Representatives.

G.R. No. 79744

The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of
due process and the requirement for just compensation, placed his landholding under the coverage
of Operation Land Transfer. Certificates of Land Transfer were subsequently issued to the private
respondents, who then refused payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small
landholding under Operation Land Transfer and asked for the recall and cancellation of the
Certificates of Land Transfer in the name of the private respondents. He claims that on December
24, 1986, his petition was denied without hearing. On February 17, 1987, he filed a motion for
reconsideration, which had not been acted upon when E.O. Nos. 228 and 229 were issued. These
orders rendered his motion moot and academic because they directly effected the transfer of his
land to the private respondents.
The petitioner now argues that:
(1)

E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.

(2)
The said executive orders are violative of the constitutional provision that no private
property shall be taken without due process or just compensation.
(3)
The petitioner is denied the right of maximum retention provided for under the 1987
Constitution.

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The petitioner contends that the issuance of E.O Nos. 228 and 229 shortly before Congress
convened is anomalous and arbitrary, besides violating the doctrine of separation of powers. The
legislative power granted to the President under the Transitory Provisions refers only to
emergency measures that may be promulgated in the proper exercise of the police power.
The petitioner also invokes his rights not to be deprived of his property without due process of
law and to the retention of his small parcels of riceholding as guaranteed under Article XIII, Section
4 of the Constitution. He likewise argues that, besides denying him just compensation for his land,
the provisions of E.O. No. 228 declaring that:
Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall be
considered as advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his contention that the
inclusion of even small landowners in the program along with other landowners with lands
consisting of seven hectares or more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because the
motion for reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the
validity of the issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant to
Section 6, Article XVIII of the Transitory Provisions of the 1987 Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first Congress is
convened.
On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on
October 21, 1972, the tenant-farmer of agricultural land was deemed the owner of the land he was
tilling. The leasehold rentals paid after that date should therefore be considered amortization
payments.
In his Reply to the public respondents, the petitioner maintains that the motion he filed was
resolved on December 14, 1987. An appeal to the Office of the President would be useless with the
promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public
respondent's acts.

G.R. No. 78742

The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of
rice and corn lands not exceeding seven hectares as long as they are cultivating or intend to
cultivate the same. Their respective lands do not exceed the statutory limit but are occupied by
tenants who are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:

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No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or
removed from his farmholding until such time as the respective rights of the tenant-farmers and the
landowner shall have been determined in accordance with the rules and regulations implementing
P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of
retention because the Department of Agrarian Reform has so far not issued the implementing rules
required under the above-quoted decree. They therefore ask the Court for a writ of mandamus to
compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474
removing any right of retention from persons who own other agricultural lands of more than 7
hectares in aggregate area or lands used for residential, commercial, industrial or other purposes
from which they derive adequate income for their family. And even assuming that the petitioners
do not fall under its terms, the regulations implementing P.D. No. 27 have already been issued, to
wit, the Memorandum dated July 10, 1975 (Interim Guidelines on Retention by Small Landowners,
with an accompanying Retention Guide Table), Memorandum Circular No. 11 dated April 21, 1978,
(Implementation Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated December 29,
1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and Retention by Small Landowners), and
DAR Administrative Order No. 1, series of 1985 (Providing for a Cut-off Date for Landowners to
Apply for Retention and/or to Protest the Coverage of their Landholdings under Operation Land
Transfer pursuant to P.D. No. 27). For failure to file the corresponding applications for retention
under these measures, the petitioners are now barred from invoking this right.
The public respondent also stresses that the petitioners have prematurely initiated this case
notwithstanding the pendency of their appeal to the President of the Philippines. Moreover, the
issuance of the implementing rules, assuming this has not yet been done, involves the exercise of
discretion which cannot be controlled through the writ ofmandamus. This is especially true if this
function is entrusted, as in this case, to a separate department of the government.
In their Reply, the petitioners insist that the above-cited measures are not applicable to them
because they do not own more than seven hectares of agricultural land. Moreover,
assuming arguendo that the rules were intended to cover them also, the said measures are
nevertheless not in force because they have not been published as required by law and the ruling of
this Court in Taada v. Tuvera. 10 As for LOI 474, the same is ineffective for the additional reason
that a mere letter of instruction could not have repealed the presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest of the three
departments of the government, the judiciary is nonetheless vested with the power to annul the
acts of either the legislative or the executive or of both when not conformable to the fundamental
law. This is the reason for what some quarters call the doctrine of judicial supremacy. Even so, this
power is not lightly assumed or readily exercised. The doctrine of separation of powers imposes
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upon the courts a proper restraint, born of the nature of their functions and of their respect for the
other departments, in striking down the acts of the legislative and the executive as unconstitutional.
The policy, indeed, is a blend of courtesy and caution. To doubt is to sustain. The theory is that
before the act was done or the law was enacted, earnest studies were made by Congress or the
President, or both, to insure that the Constitution would not be breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of
unconstitutionality, requiring therefor the concurrence of a majority of the members of the
Supreme Court who took part in the deliberations and voted on the issue during their session en
banc. 11 And as established by judge-made doctrine, the Court will assume jurisdiction over a
constitutional question only if it is shown that the essential requisites of a judicial inquiry into such
a question are first satisfied. Thus, there must be an actual case or controversy involving a conflict
of legal rights susceptible of judicial determination, the constitutional question must have been
opportunely raised by the proper party, and the resolution of the question is unavoidably necessary
to the decision of the case itself. 12
With particular regard to the requirement of proper party as applied in the cases before us, we
hold that the same is satisfied by the petitioners and intervenors because each of them has
sustained or is in danger of sustaining an immediate injury as a result of the acts or measures
complained of. 13 And even if, strictly speaking, they are not covered by the definition, it is still
within the wide discretion of the Court to waive the requirement and so remove the impediment to
its addressing and resolving the serious constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino although they
were invoking only an indirect and general interest shared in common with the public. The Court
dismissed the objection that they were not proper parties and ruled that "the transcendental
importance to the public of these cases demands that they be settled promptly and definitely,
brushing aside, if we must, technicalities of procedure." We have since then applied this exception
in many other cases. 15
The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when confronted with
constitutional issues like the ones now before it, it will not hesitate to declare a law or act invalid
when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be
the Constitution as God and its conscience give it the light to probe its meaning and discover its
purpose. Personal motives and political considerations are irrelevancies that cannot influence its
decision. Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court will not hesitate to
"make the hammer fall, and heavily," to use Justice Laurel's pithy language, where the acts of these
departments, or of any public official, betray the people's will as expressed in the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that

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. . . when the judiciary mediates to allocate constitutional boundaries, it does not assert any
superiority over the other departments; it does not in reality nullify or invalidate an act of the
Legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to
determine conflicting claims of authority under the Constitution and to establish for the parties in
an actual controversy the rights which that instrument secures and guarantees to them. This is in
truth all that is involved in what is termed "judicial supremacy" which properly is the power of
judicial review under the Constitution. 16
The cases before us categorically raise constitutional questions that this Court must
categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before resolving the more serious
challenges to the constitutionality of the several measures involved in these petitions. cdtai
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under
martial law has already been sustained in Gonzales v. Estrella and we find no reason to modify or
reverse it on that issue. As for the power of President Aquino to promulgate Proc. No. 131 and E.O.
Nos. 228 and 229, the same was authorized under Section 6 of the Transitory Provisions of the
1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987, when the Congress of
the Philippines was formally convened and took over legislative power from her. They are not
"midnight" enactments intended to pre-empt the legislature because E.O. No. 228 was issued on
July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July
22, 1987. Neither is it correct to say that these measures ceased to be valid when she lost her
legislative power for, like any statute, they continue to be in force unless modified or repealed by
subsequent law or declared invalid by the courts. A statute does not ipso facto become inoperative
simply because of the dissolution of the legislature that enacted it. By the same token, President
Aquino's loss of legislative power did not have the effect of invalidating all the measures enacted by
her when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact
substantially affirmed the challenged measures and has specifically provided that they shall be
suppletory to R.A. No. 6657 whenever not inconsistent with its provisions. 17Indeed, some portions
of the said measures, like the creation of the P50 billion fund in Section 2 of Proc. No. 131, and
Sections 20 and 21 of E.O. No. 229, have been incorporated by reference in the CARP Law. 18
That fund, as earlier noted, is itself being questioned on the ground that it does not conform to
the requirements of a valid appropriation as specified in the Constitution. Clearly, however, Proc.
No. 131 is not an appropriation measure even if it does provide for the creation of said fund, for
that is not its principal purpose. An appropriation law is one the primary and specific purpose of

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which is to authorize the release of public funds from the treasury. 19 The creation of the fund is
only incidental to the main objective of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24 and
Section 25(4) of Article VI, are not applicable. With particular reference to Section 24, this
obviously could not have been complied with for the simple reason that the House of
Representatives, which now has the exclusive power to initiate appropriation measures, had not
yet been convened when the proclamation was issued. The legislative power was then solely vested
in the President of the Philippines, who embodied, as it were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be
invalidated because they do not provide for retention limits as required by Article XIII, Section 4 of
the Constitution is no longer tenable. R.A. No. 6657 does provide for such limits now in Section 6 of
the law, which in fact is one of its most controversial provisions. This section declares:
Retention Limits. Except as 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 lands have been covered by Presidential Decree No. 27 shall be
allowed to keep the area originally retained by them thereunder, 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.
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have
only one subject, to be expressed in its title, deserves only short attention. It is settled that the title
of the bill does not have to be a catalogue of its contents and will suffice if the matters embodied in
the text are relevant to each other and may be inferred from the title. 20
The Court wryly observes that during the past dictatorship, every presidential issuance, by
whatever name it was called, had the force and effect of law because it came from President Marcos.
Such are the ways of despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that
LOI 474 could not have repealed P.D. No. 27 because the former was only a letter of instruction. The
important thing is that it was issued by President Marcos, whose word was law during that time.
But for all their peremptoriness, these issuances from the President Marcos still had to comply
with the requirement for publication as this Court held in Taada v. Tuvera. 21Hence, unless
published in the Official Gazette in accordance with Article 2 of the Civil Code, they could not have
any force and effect if they were among those enactments successfully challenged in that case. (LOI
474 was published, though, in the Official Gazette dated November 29, 1976.)
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Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ
of mandamus cannot issue to compel the performance of a discretionary act, especially by a specific
department of the government. That is true as a general proposition but is subject to one important
qualification. Correctly and categorically stated, the rule is thatmandamus will lie to compel the
discharge of the discretionary duty itself but not to control the discretion to be exercised. In other
words, mandamus can issue to require action onlybut not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and unreasonable delay in
the exercise of such duty occurs, if it is a clear duty imposed by law, the courts will intervene by the
extraordinary legal remedy of mandamus to compel action. If the duty is purely ministerial, the
courts will require specific action. If the duty is purely discretionary, the courts by mandamuswill
require action only. For example, if an inferior court, public official, or board should, for an
unreasonable length of time, fail to decide a particular question to the great detriment of all parties
concerned, or a court should refuse to take jurisdiction of a cause when the law clearly gave it
jurisdiction, mandamus will issue, in the first case to require a decision, and in the second to require
that jurisdiction be taken of the cause. 22
And while it is true that as a rule the writ will not be proper as long as there is still a plain,
speedy and adequate remedy available from the administrative authorities, resort to the courts may
still be permitted if the issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power of eminent domain
that logically preclude the application of both powers at the same time on the same subject. In the
case of City of Baguio v. NAWASA, 24 for example, where a law required the transfer of all municipal
waterworks systems to the NAWASA in exchange for its assets of equivalent value, the Court held
that the power being exercised was eminent domain because the property involved was wholesome
and intended for a public use. Property condemned under the police power is noxious or intended
for a noxious purpose, such as a building on the verge of collapse, which should be demolished for
the public safety, or obscene materials, which should be destroyed in the interest of public morals.
The confiscation of such property is not compensable, unlike the taking of property under the
power of expropriation, which requires the payment of just compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the
police power in a famous aphorism: "The general rule at least is that while property may be
regulated to a certain extent, if regulation goes too far it will be recognized as a taking." The
regulation that went "too far" was a law prohibiting mining which might cause the subsidence of
structures for human habitation constructed on the land surface. This was resisted by a coal
company which had earlier granted a deed to the land over its mine but reserved all mining rights
thereunder, with the grantee assuming all risks and waiving any damage claim. The Court held the
law could not be sustained without compensating the grantor. Justice Brandeis filed a lone dissent
in which he argued that there was a valid exercise of the police power. He said:
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Every restriction upon the use of property imposed in the exercise of the police power deprives the
owner of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights
in property without making compensation. But restriction imposed to protect the public health,
safety or morals from dangers threatened is not a taking. The restriction here in question is merely
the prohibition of a noxious use. The property so restricted remains in the possession of its owner.
The state does not appropriate it or make any use of it. The state merely prevents the owner from
making a use which interferes with paramount rights of the public. Whenever the use prohibited
ceases to be noxious as it may because of further changes in local or social conditions the
restriction will have to be removed and the owner will again be free to enjoy his property as
heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police power
and the power of eminent domain, with the latter being used as an implement of the former like the
power of taxation. The employment of the taxing power to achieve a police purpose has long been
accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the University of Illinois
College of Law (referring to the earlier case of Euclid v.Ambler Realty Co., 272 US 365, which
sustained a zoning law under the police power) makes the following significant remarks:
Euclid, moreover, was decided in an era when judges located the police and eminent domain
powers on different planets. Generally speaking, they viewed eminent domain as encompassing
public acquisition of private property for improvements that would be available for "public use,"
literally construed. To the police power, on the other hand, they assigned the less intrusive task of
preventing harmful externalities, a point reflected in the Euclid opinion's reliance on an analogy to
nuisance law to bolster its support of zoning. So long as suppression of a privately authored harm
bore a plausible relation to some legitimate "public purpose," the pertinent measure need have
afforded no compensation whatever. With the progressive growth of government's involvement in
land use, the distance between the two powers has contracted considerably. Today government
often employs eminent domain interchangeably with or as a useful complement to the police power
a trend expressly approved in the Supreme Court's 1954 decision in Berman v. Parker, which
broadened the reach of eminent domain's "public use" test to match that of the police power's
standard of "public purpose." 27
The Berman case sustained a redevelopment project and the improvement of blighted areas in
the District of Columbia as a proper exercise of the police power. On the role of eminent domain in
the attainment of this purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as
well as sanitary, there is nothing in the Fifth Amendment that stands in the way.
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Once the object is within the authority of Congress, the right to realize it through the exercise of
eminent domain is clear.
For the power of eminent domain is merely the means to the end. 28
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the U.S.
Supreme Court sustained the respondent's Landmarks Preservation Law under which the owners
of the Grand Central Terminal had not been allowed to construct a multi-story office building over
the Terminal, which had been designated a historic landmark. Preservation of the landmark was
held to be a valid objective of the police power. The problem, however, was that the owners of the
Terminal would be deprived of the right to use the airspace above it although other landowners in
the area could do so over their respective properties. While insisting that there was here no taking,
the Court nonetheless recognized certain compensatory rights accruing to Grand Central Terminal
which it said would "undoubtedly mitigate" the loss caused by the regulation. This "fair
compensation," as he called it, was explained by Prof. Costonis in this wise:
In return for retaining the Terminal site in its pristine landmark status, Penn Central was
authorized to transfer to neighboring properties the authorized but unused rights accruing to the
site prior to the Terminal's designation as a landmark the rights which would have been
exhausted by the 59-story building that the city refused to countenance atop the Terminal.
Prevailing bulk restrictions on neighboring sites were proportionately relaxed, theoretically
enabling Penn Central to recoup its losses at the Terminal site by constructing or selling to others
the right to construct larger, hence more profitable buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question of compensable
taking is concerned. To the extent that the measures under challenge merely prescribe retention
limits for landowners, there is an exercise of the police power for the regulation of private property
in accordance with the Constitution. But where, to carry out such regulation, it becomes necessary
to deprive such owners of whatever lands they may own in excess of the maximum area allowed,
there is definitely a taking under the power of eminent domain for which payment of just
compensation is imperative. The taking contemplated is not a mere limitation of the use of the land.
What is required is the surrender of the title to and the physical possession of the said excess and
all beneficial rights accruing to the owner in favor of the farmer-beneficiary. This is definitely an
exercise not of the police power but of the power of eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the several
measures before us are challenged as violative of the due process and equal protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits
are prescribed has already been discussed and dismissed. It is noted that although they excited
many bitter exchanges during the deliberation of the CARP Law in Congress, the retention limits
finally agreed upon are, curiously enough, not being questioned in these petitions. We therefore do
not discuss them here. The Court will come to the other claimed violations of due process in
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connection with our examination of the adequacy of just compensation as required under the
power of expropriation.
The argument of the small farmers that they have been denied equal protection because of the
absence of retention limits has also become academic under Section 6 of R.A. No. 6657.
Significantly, they too have not questioned the area of such limits. There is also the complaint that
they should not be made to share the burden of agrarian reform, an objection also made by the
sugar planters on the ground that they belong to a particular class with particular interests of their
own. However, no evidence has been submitted to the Court that the requisites of a valid
classification have been violated.
Classification has been defined as the grouping of persons or things similar to each other in
certain particulars and different from each other in these same particulars. 31 To be valid, it must
conform to the following requirements: (1) it must be based on substantial distinctions; (2) it must
be germane to the purposes of the law; (3) it must not be limited to existing conditions only; and (4)
it must apply equally to all the members of the class. 32 The Court finds that all these requisites have
been met by the measures here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated must be treated
alike both as to the rights conferred and the liabilities imposed. 33 The petitioners have not shown
that they belong to a different class and entitled to a different treatment. The argument that not
only landowners but also owners of other properties must be made to share the burden of
implementing land reform must be rejected. There is a substantial distinction between these two
classes of owners that is clearly visible except to those who will not see. There is no need to
elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a
valid classification. Its decision is accorded recognition and respect by the courts of justice except
only where its discretion is abused to the detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained under the police power
only if there is a concurrence of the lawful subject and the lawful method. Put otherwise, the
interests of the public generally as distinguished from those of a particular class require the
interference of the State and, no less important, the means employed are reasonably necessary for
the attainment of the purpose sought to be achieved and not unduly oppressive upon
individuals. 34 As the subject and purpose of agrarian reform have been laid down by the
Constitution itself, we may say that the first requirement has been satisfied. What remains to be
examined is the validity of the method employed to achieve the constitutional goal.
One of the basic principles of the democratic system is that where the rights of the individual
are concerned, the end does not justify the means. It is not enough that there be a valid objective; it
is also necessary that the means employed to pursue it be in keeping with the Constitution. Mere
expediency will not excuse constitutional shortcuts. There is no question that not even the
strongest moral conviction or the most urgent public need, subject only to a few notable exceptions,
will excuse the bypassing of an individual's rights. It is no exaggeration to say that a person
invoking a right guaranteed under Article III of the Constitution is a majority of one even as against
the rest of the nation who would deny him that right.
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That right covers the person's life, his liberty and his property under Section 1 of Article III of
the Constitution. With regard to his property, the owner enjoys the added protection of Section 9,
which reaffirms the familiar rule that private property shall not be taken for public use without just
compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands
intended for public use upon payment of just compensation to the owner. Obviously, there is no
need to expropriate where the owner is willing to sell under terms also acceptable to the purchaser,
in which case an ordinary deed of sale may be agreed upon by the parties. 35 It is only where the
owner is unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that
the power of eminent domain will come into play to assert the paramount authority of the State
over the interests of the property owner. Private rights must then yield to the irresistible demands
of the public interest on the time-honored justification, as in the case of the police power, that the
welfare of the people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no means absolute (as
indeed no power is absolute). The limitation is found in the constitutional injunction that "private
property shall not be taken for public use without just compensation" and in the abundant
jurisprudence that has evolved from the interpretation of this principle. Basically, the requirements
for a proper exercise of the power are: (1) public use and (2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State
should first distribute public agricultural lands in the pursuit of agrarian reform instead of
immediately disturbing property rights by forcibly acquiring private agricultural lands.
Parenthetically, it is not correct to say that only public agricultural lands may be covered by the
CARP as the Constitution calls for "the just distribution of all agricultural lands." In any event, the
decision to redistribute private agricultural lands in the manner prescribed by the CARP was made
by the legislative and executive departments in the exercise of their discretion. We are not justified
in reviewing that discretion in the absence of a clear showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political departments when they
decide what is known as the political question. As explained by Chief Justice Concepcion in the case
of Taada v. Cuenco: 36
The term "political question" connotes what it means in ordinary parlance, namely, a question of
policy. It refers to "those questions which, under the Constitution, are to be decided by the people in
their sovereign capacity; or in regard to which full discretionary authority has been delegated to the
legislative or executive branch of the government." It is concerned with issues dependent upon the
wisdom, not legality, of a particular measure.

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It is true that the concept of the political question has been constricted with the enlargement of
judicial power, which now includes the authority of the courts "to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government." 37 Even so, this should not be construed as a license
for us to reverse the other departments simply because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the
redistribution of private landholdings (even as the distribution of public agricultural lands is first
provided for, while also continuing space under the Public Land Act and other cognate laws). The
Court sees no justification to interpose its authority, which we may assert only if we believe that the
political decision is not unwise, but illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:
Congress having determined, as it did by the Act of March 3, 1909 that the entire St. Mary's river
between the American bank and the international line, as well as all of the upland north of the
present ship canal, throughout its entire length, was "necessary for the purpose of navigation of
said waters, and the waters connected therewith," that determination is conclusive in
condemnation proceedings instituted by the United States under that Act, and there is no room for
judicial review of the judgment of Congress . . .
As earlier observed, the requirement for public use has already been settled for us by the
Constitution itself. No less than the 1987 Charter calls for agrarian reform, which is the reason why
private agricultural lands are to be taken from their owners, subject to the prescribed maximum
retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an
elaboration of the constitutional injunction that the State adopt the necessary measures "to
encourage and undertake the just distribution of all agricultural lands to enable farmers who are
landless to own directly or collectively the lands they till." That public use, as pronounced by the
fundamental law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and more
thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property taken from its owner
by the expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the
taker's gain but the owner's loss. 40 The word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for the property to be taken
shall be real, substantial, full, ample. 41
It bears repeating that the measures challenged in these petitions contemplate more than a
mere regulation of the use of private lands under the police power. We deal here with an actual
taking of private agricultural lands that has dispossessed the owners of their property and deprived
them of all its beneficial use and enjoyment, to entitle them to the just compensation mandated by
the Constitution.
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As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the
following conditions concur: (1) the expropriator must enter a private property; (2) the entry must
be for more than a momentary period; (3) the entry must be under warrant or color of legal
authority; (4) the property must be devoted to public use or otherwise informally appropriated or
injuriously affected; and (5) the utilization of the property for public use must be in such a way as
to oust the owner and deprive him of beneficial enjoyment of the property. All these requisites are
envisioned in the measures before us.
Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its
taking possession of the condemned property, as "the compensation is a public charge, the good
faith of the public is pledged for its payment, and all the resources of taxation may be employed in
raising the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:
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. The DAR shall thereafter proceed with
the redistribution of the land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is claimed
is entrusted to the administrative authorities in violation of judicial prerogatives. Specific reference
is made to Section 16(d), which provides that in case of the rejection or disregard by the owner of
the offer of the government to buy his land
. . . the DAR shall conduct summary administrative proceedings to determine the compensation for
the land by requiring the landowner, the LBP and other interested parties to submit evidence as to
the just compensation for the land, within fifteen (15) days from the 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.
To be sure, the determination of just compensation is a function addressed to the courts of
justice and may not be usurped by any other branch or official of the government. EPZA v.
Dulay 44 resolved a challenge to several decrees promulgated by President Marcos providing that
the just compensation for property under expropriation should be either the assessment of the
property by the government or the sworn valuation thereof by the owner, whichever was lower. In
declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited decrees constitutes
impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a
matter which under this Constitution is reserved to it for final determination.

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Thus, although in an expropriation proceeding the court technically would still have the power to
determine the just compensation for the property, following the applicable decrees, its task would
be relegated to simply stating the lower value of the property as declared either by the owner or
the assessor. As a necessary consequence, it would be useless for the court to appoint
commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process
clause in the taking of private property is seemingly fulfilled since it cannot be said that a judicial
proceeding was not had before the actual taking. However, the strict application of the decrees
during the proceedings would be nothing short of a mere formality or charade as the court has only
to choose between the valuation of the owner and that of the assessor, and its choice is always
limited to the lower of the two. The court cannot exercise its discretion or independence in
determining what is just or fair. Even a grade school pupil could substitute for the judge insofar as
the determination of constitutional just compensation is concerned.
xxx

xxx

xxx

In the present petition, we are once again confronted with the same question of whether the courts
under P.D. No. 1533, which contains the same provision on just compensation as its predecessor
decrees, still have the power and authority to determine just compensation, independent of what is
stated by the decree and to this effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.
xxx

xxx

xxx

It is violative of due process to deny the owner the opportunity to prove that the valuation in the
tax documents is unfair or wrong. And it is repulsive to the basic concepts of justice and fairness to
allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of
a court promulgated only after expert commissioners have actually viewed the property, after
evidence and arguments pro and con have been presented, and after all factors and considerations
essential to a fair and just determination have been judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not suffer from the
arbitrariness that rendered the challenged decrees constitutionally objectionable. Although the
proceedings are described as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real value of the property. But more
importantly, the determination of the just compensation by the DAR is not by any means final and
conclusive upon the landowner or any other interested party, for Section 16(f) clearly provides:
Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction
for final determination of just compensation.

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The determination made by the DAR is only preliminary unless accepted by all parties
concerned. Otherwise, the courts of justice will still have the right to review with finality the said
determination in the exercise of what is admittedly a judicial function.
The second and more serious objection to the provisions on just compensation is not as easily
resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18.
Valuation and Mode of Compensation. The LBP shall compensate the landowner in
such amount as may be agreed upon by the landowner and the DAR and the LBP, in accordance
with the criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as
may be finally determined by the court, as the just compensation for the land.
The compensation shall be paid in one of the following modes, at the option of the landowner:
(1)

Cash payment, under the following terms and conditions:

(a) For lands above fifty (50) hectares, insofar as the excess hectarage is
concerned Twenty-five percent (25%) cash, the balance to be paid in
government financial instruments negotiable at any time.
(b) For lands above twenty-four (24) hectares and up to fifty (50)
hectares Thirty percent (30%) cash, the balance to be paid in government
financial instruments negotiable at any time.
(c) For lands twenty-four (24) hectares and below Thirty-five percent
(35%) cash, the balance to be paid in government financial instruments negotiable
at any time.
(2) Shares of stock in government-owned or controlled corporations,
LBP preferred shares, physical assets or other qualified investments in
accordance with guidelines set by the PARC;
(3)

Tax credits which can be used against any tax liability;

(4)

LBP bonds, which shall have the following features:

(a) Market interest rates aligned with 91-day treasury bill rates. Ten
percent (10%) of the face value of the bonds shall mature every year from the
date of issuance until the tenth (10th) year: Provided, That should the landowner
choose to forego the cash portion, whether in full or in part, he shall be paid
correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by
the landowner, his successors-in-interest or his assigns, up to the amount of their
face value, for any of the following:
the

(i) Acquisition of land or other real properties of

government, including assets under the Asset
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Privatization Program and other assets foreclosed by
government financial institutions in the same province or
region where the lands for which the bonds were paid are
situated;
(ii) Acquisition of shares of stock of government
owned or controlled corporations or shares of stock owned
by the government in private corporations;
(iii) Substitution for surety or bail bonds for the
provisional release of accused persons, or for performance
bonds;
(iv) Security for loans with any government
financial institution, provided the proceeds of the loans shall
be invested in an economic enterprise, preferably in a small
and medium-scale industry, in the same province or region
as the land for which the bonds are paid;
(v) Payment for various taxes and fees to
government:Provided, That the use of these bonds for these
purposes will be limited to a certain percentage of the
outstanding balance of the financial instruments; Provided,
further, That the PARC shall determine the percentages
mentioned above;
(vi) Payment for tuition fees of the immediate
family of the original bondholder in government universities,
colleges, trade schools, and other institutions;
(vii) Payment for fees of the immediate family of the
original bondholder in government hospital; and
(viii) Such other uses as the PARC may from time to
time allow.
The contention of the petitioners in G.R. No. 79777 is that the above provision is
unconstitutional insofar as it requires the owners of the expropriated properties to accept just
compensation therefor in less than money, which is the only medium of payment allowed. In
support of this contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the property expropriated is
entitled to a just compensation, which should be neither more nor less, whenever it is possible to
make the assessment, than the money equivalent of said property. Just compensation has always
been understood to be the just and complete equivalent of the loss which the owner of the thing
expropriated has to suffer by reason of the expropriation. 45 (Emphasis supplied.)
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In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:
It is well-settled that just compensation means the equivalent for the value of the property at the
time of its taking. Anything beyond that is more, and anything short of that is less, than just
compensation. It means a fair and full equivalent for the loss sustained, which is the measure of the
indemnity, not whatever gain would accrue to the expropriating entity. The market value of the
land taken is the just compensation to which the owner of condemned property is entitled, the
market value being that sum of money which a person desirous, but not compelled to buy, and an
owner, willing, but not compelled to sell, would agree on as a price to be given and received for
such property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has been derived, the
weight of authority is also to the effect that just compensation for property expropriated is
payable only in money and not otherwise. Thus
The medium of payment of compensation is ready money or cash. The condemnor cannot compel
the owner to accept anything but money, nor can the owner compel or require the condemnor to
pay him on any other basis than the value of the property in money at the time and in the manner
prescribed by the Constitution and the statutes. When the power of eminent domain is resorted to,
there must be a standard medium of payment, binding upon both parties, and the law has fixed that
standard as money in cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of things, be regarded as a
reliable and constant standard of compensation. 48
"Just compensation" for property taken by condemnation means a fair equivalent in money, which
must be paid at least within a reasonable time after the taking, and it is not within the power of the
Legislature to substitute for such payment future obligations, bonds, or other valuable
advantage. 49 (Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the payment of just
compensation is money and no other. And so, conformably, has just compensation been paid in the
past solely in that medium. However, we do not deal here with thetraditional exercise of the power
of eminent domain. This is not an ordinary expropriation where only a specific property of
relatively limited area is sought to be taken by the State from its owner for a specific and perhaps
local purpose. What we deal with here is arevolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever found and of
whatever kind as long as they are in excess of the maximum retention limits allowed their owners.
This kind of expropriation is intended for the benefit not only of a particular community or of a
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small segment of the population but of the entire Filipino nation, from all levels of our society, from
the impoverished farmer to the land-glutted owner. Its purpose does not cover only the whole
territory of this country but goes beyond in time to the foreseeable future, which it hopes to secure
and edify with the vision and the sacrifice of the present generation of Filipinos. Generations yet to
come are as involved in this program as we are today, although hopefully only as beneficiaries of a
richer and more fulfilling life we will guarantee to them tomorrow through our thoughtfulness
today. And, finally, let it not be forgotten that it is no less than the Constitution itself that has
ordained this revolution in the farms, calling for "a just distribution" among the farmers of lands
that have heretofore been the prison of their dreams but can now become the key at least to their
deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous.
Considering the vast areas of land subject to expropriation under the laws before us, we estimate
that hundreds of billions of pesos will be needed, far more indeed than the amount of P50 billion
initially appropriated, which is already staggering as it is by our present standards. Such amount is
in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this difficulty when they called
for agrarian reform as a top priority project of the government. It is a part of this assumption that
when they envisioned the expropriation that would be needed, they also intended that the just
compensation would have to be paid not in the orthodox way but a less conventional if more
practical method. There can be no doubt that they were aware of the financial limitations of the
government and had no illusions that there would be enough money to pay in cash and in full for
the lands they wanted to be distributed among the farmers. We may therefore assume that their
intention was to allow such manner of payment as is now provided for by the CARP Law,
particularly the payment of the balance (if the owner cannot be paid fully with money), or indeed of
the entire amount of the just compensation, with other things of value. We may also suppose that
what they had in mind was a similar scheme of payment as that prescribed in P.D. No. 27, which
was the law in force at the time they deliberated on the new Charter and with which they
presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any categorial
agreement among the members regarding the meaning to be given the concept of just
compensation as applied to the comprehensive agrarian reform program being contemplated.
There was the suggestion to "fine tune" the requirement to suit the demands of the project even as
it was also felt that they should "leave it to Congress" to determine how payment should be made to
the landowner and reimbursement required from the farmer-beneficiaries. Such innovations as
"progressive compensation" and "State-subsidized compensation" were also proposed. In the end,
however, no special definition of the just compensation for the lands to be expropriated was
reached by the Commission. 50
On the other hand, there is nothing in the records either that militates against the assumptions
we are making of the general sentiments and intention of the members on the content and manner
of the payment to be made to the landowner in the light of the magnitude of the expenditure and
the limitations of the expropriator.
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With these assumptions, the Court hereby declares that the content and manner of the just
compensation provided for in the afore-quoted Section 18 of the CARP Law is not violative of the
Constitution. We do not mind admitting that a certain degree of pragmatism has influenced our
decision on this issue, but after all this Court is not a cloistered institution removed from the
realities and demands of society or oblivious to the need for its enhancement. The Court is as
acutely anxious as the rest of our people to see the goal of agrarian reform achieved at last after the
frustrations and deprivations of our peasant masses during all these disappointing decades. We are
aware that invalidation of the said section will result in the nullification of the entire program,
killing the farmer's hopes even as they approach realization and resurrecting the spectre of
discontent and dissent in the restless countryside. That is not in our view the intention of the
Constitution, and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always required to be made
fully in money, we find further that the proportion of cash payment to the other things of value
constituting the total payment, as determined on the basis of the areas of the lands expropriated, is
not unduly oppressive upon the landowner. It is noted that the smaller the land, the bigger the
payment in money, primarily because the small landowner will be needing it more than the big
landowners, who can afford a bigger balance in bonds and other things of value. No less
importantly, the government financial instruments making up the balance of the payment are
"negotiable at any time." The other modes, which are likewise available to the landowner at his
option, are also not unreasonable because payment is made in shares of stock, LBP bonds, other
properties or assets, tax credits, and other things of value equivalent to the amount of just
compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big and
small, not a little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is
devoutly hoped that these countrymen of ours, conscious as we know they are of the need for their
forebearance and even sacrifice, will not begrudge us their indispensable share in the attainment of
the ideal of agrarian reform. Otherwise, our pursuit of this elusive goal will be like the quest for the
Holy Grail.
The complaint against the effects of non-registration of the land under E.O. No. 229 does not
seem to be viable any more as it appears that Section 4 of the said Order has been superseded by
Section 14 of the CARP Law. This repeats the requisites of registration as embodied in the earlier
measure but does not provide, as the latter did, that in case of failure or refusal to register the land,
the valuation thereof shall be that given by the provincial or city assessor for tax purposes. On the
contrary, the CARP Law says that the just compensation shall be ascertained on the basis of the
factors mentioned in its Section 17 and in the manner provided for in Section 16. dctai
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.

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The recognized rule, indeed, is that title to the property expropriated shall pass from the owner
to the expropriator only upon full payment of the just compensation. Jurisprudence on this settled
principle is consistent both here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does not vest the condemnor
until the judgment fixing just compensation is entered and paid, but the condemnor's title relates
back to the date on which the petition under the Eminent Domain Act, or the commissioner's report
under the Local Improvement Act, is filed. 51
. . . although the right to appropriate and use land taken for a canal is complete at the time of
entry, title to the property taken remains in the owner until payment is actually made. 52(Emphasis
supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to
property does not pass to the condemnor until just compensation had actually been made. In fact,
the decisions appear to be uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it
was held that "actual payment to the owner of the condemned property was a condition precedent
to the investment of the title to the property in the State" albeit "not to the appropriation of it to
public use." In Rexford v. Knight, 55 the Court of Appeals of New York said that the construction
upon the statutes was that the fee did not vest in the State until the payment of the compensation
although the authority to enter upon and appropriate the land was complete prior to the payment.
Kennedy further said that "both on principle and authority the rule is . . . that the right to enter on
and use the property is complete, as soon as the property is actually appropriated under the
authority of law for a public use, but that the title does not pass from the owner without his consent,
until just compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56that:
If the laws which we have exhibited or cited in the preceding discussion are attentively examined it
will be apparent that the method of expropriation adopted in this jurisdiction is such as to afford
absolute reassurance that no piece of land can be finally and irrevocably taken from an unwilling
owner until compensation is paid . . . (Emphasis supplied.)
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 familysized 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:

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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.
Hence, it was also perfectly proper for the Order to also provide in its Section 2 that the "lease
rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 (pending
transfer of ownership after full payment of just compensation), shall be considered as advance
payment for the land."
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. 57 No outright change of ownership is contemplated either.
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.
It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27,
as recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This should
counterbalance the express provision in Section 6 of the said law that "the landowners whose lands
have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally
retained by them thereunder, 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."
In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal
filed by the petitioners with the Office of the President has already been resolved. Although we have
said that the doctrine of exhaustion of administrative remedies need not preclude immediate resort
to judicial action, there are factual issues that have yet to be examined on the administrative level,
especially the claim that the petitioners are not covered by LOI 474 because they do not own other
agricultural lands than the subjects of their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners
have not yet exercised their retention rights, if any, under P.D. No. 27, the Court holds that they are
entitled to the new retention rights provided for by R.A. No. 6657, which in fact are on the whole
more liberal than those granted by the decree.
V
The CARP Law and the other enactments also involved in these cases have been the subject of
bitter attack from those who point to the shortcomings of these measures and ask that they be
scrapped entirely. To be sure, these enactments are less than perfect; indeed, they should be
continuously re-examined and rehoned, that they may be sharper instruments for the better
protection of the farmer's rights. But we have to start somewhere. In the pursuit of agrarian reform,
we do not tread on familiar ground but grope on terrain fraught with pitfalls and expected
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difficulties. This is inevitable. The CARP Law is not a tried and tested project. On the contrary, to use
Justice Holmes's words, "it is an experiment, as all life is an experiment," and so we learn as we
venture forward, and, if necessary, by our own mistakes. We cannot expect perfection although we
should strive for it by all means. Meantime, we struggle as best we can in freeing the farmer from
the iron shackles that have unconscionably, and for so long, fettered his soul to the soil.
By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform
program are removed, to clear the way for the true freedom of the farmer. We may now glimpse the
day he will be released not only from want but also from the exploitation and disdain of the past
and from his own feelings of inadequacy and helplessness. At last his servitude will be ended
forever. At last the farm on which he toils will be his farm. It will be his portion of the Mother Earth
that will give him not only the staff of life but also the joy of living. And where once it bred for him
only deep despair, now can he see in it the fruition of his hopes for a more fulfilling future. Now at
last can he banish from his small plot of earth his insecurities and dark resentments and "rebuild in
it the music and the dream."
WHEREFORE, the Court holds as follows:
1.
R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED
against all the constitutional objections raised in the herein petitions.
2.
Title to all expropriated properties shall be transferred to the State only upon full
payment of compensation to their respective owners.
3.
All rights previously acquired by the tenant-farmers under P.D. No. 27 are retained and
recognized.
4.
Landowners who were unable to exercise their rights of retention under P.D. No. 27
shall enjoy the retention rights granted by R.A. No. 6657 under the conditions therein
prescribed.
5.
Subject to the above-mentioned rulings, all the petitions are DISMISSED, without
pronouncement as to costs.
SO ORDERED.
Fernan, C .J ., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla, Bidin,
Sarmiento, Cortes, Grio-Aquino, Medialdea and Regalado, JJ .,concur.
Footnotes
1.

Art. II, Sec. 5.

2.

1973 Constitution, Art. II, Sec. 6.

3.

Ibid., Art. XIV, Sec. 12.

4.

R.A No. 6657, Sec. 15.

5.

149 SCRA 305.

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6.
150 SCRA 89.
7.

55 SCRA 26.

8.

91 SCRA 294.

9.

113 SCRA 798.

10.

136 SCRA 27; 146 SCRA 446.

11.

Art. VIII, Sec. 4(2).

12.

Dumlao v. COMELEC, 95 SCRA 392.

13.

Ex Parte Levitt, 303 US 633.

14.

Araneta v. Dinglasan, 84 Phil. 368.

15.
Pascual v. Secretary of Public Works, 110 Phil. 331; PHILCONSA v. Gimenez, 15 SCRA 479;
Sanidad v. COMELEC, 73 SCRA 333.
16.

Angara v. Electoral Commission, 63 Phil. 139.

17.

R.A. No. 6657, Sec. 75.

18.

Ibid., Sec. 63.

19.

Bengzon v. Secretary of Justice, 299 US 410.

20.
Alalayan v. NPC, 24 SCRA 172; Sumulong v. COMELEC, 73 Phil. 288; Tio v. Videogram
Regulatory Board, 151 SCRA 208.
21.

Supra.

22.

Lamb v. Phipps, 22 Phil. 456.

23.
Malabanan v. Ramento, 129 SCRA 359; Espaol v. Chairman, Philippine Veterans
Administration, 137 SCRA 314.
24.

106 Phil. 144.

25.

260 US 393.

26.
Powell v. Pennsylvania, 127 US 678; Lutz v. Araneta, 98 Phil. 148; Tio v. Videogram
Regulatory Board, supra.

27.
John J. Costonis, "The Disparity Issue: A Context for the Grand Central Terminal Decision,
"Harvard Law Review, Vol. 91:40, 1977, p. 404.
28.

348 US 1954.
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29.
438 US 104.
30.

See note 27.

31.

International Harvester Co. v. Missouri, 234 US 199.

32.

People v. Cayat, 68 Phil. 12.

33.

Ichong v. Hernandez, 101 Phil. 1155.

34.
US v. Toribio, 15 Phil. 85; Fabie v. City of Manila, 21 Phil. 486; Case v. Board of Health, 24 Phil.
256.
35.

Noble v. City of Manila, 67 Phil. 1.

36.

100 Phil. 1101.

37.

1987 Constitution, Art. VIII, Sec. 1.

38.

57 L ed. 1063.

39.

Manila Railroad Co. v. Velasques, 32 Phil. 286.

40.
Province of Tayabas v. Perez, 66 Phil. 467; J.M. Tuazon & Co., Inc. v. Land Tenure
Administration, 31 SCRA 413; Municipality of Daet v. Court of Appeals, 93 SCRA 503; Manotok v.
National Housing Authority, 150 SCRA 89.
41.

City of Manila v. Estrada, 25 Phil. 208.

42.

58 SCRA 336.

43.

Lewis, Law of Eminent Domain, 3rd Edition, pp. 1166-1167.

44.

149 SCRA 305.

45.

Manila Railroad Co. v. Velasquez, 32 Phil. 286; Province of Tayabas v. Perez, supra, at note 40.

46.

31 SCRA 413.

47.

Mandl v. City of Phoenix, 18 p 2d 273.

48.

Sacremento Southern R. Co. v. Heilbron, 156 Cal. 408, 104 pp. 979, 980.

49.
City of Waterbury v. Platt Bros. & Co., 56 A 856, 76 Conn, 435 citing Butler v. Ravine Road
Sewer Com'rs, 39 N.J.L. 665; Bloodgood v. Mohawk v. H.R.R. Co., N.Y. 18 Wend. 9 35, 31 Am. Dec.
313; Sanborn v. Helden, 51 Cal 266; Burlington & C.R. Co. v. Schweikart, 14 p. 329, 10 Colo, 178; 23
Words and Phrases, pl. 460.
50.

Record of the Constitutional Commission, Vol. 2, pp. 647, 704; Vol. 3, pp. 16-20, 243-247.

51.

Chicago Park Dist. v. Downey Coal Co., 1 Ill. 2d 54.

52.

Kennedy v. Indianapolis, 103 US 599, 26 L ed 550.

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53.
Ibid.

54.

4 Blkf., 508.

55.

11 NY 314.

56.

40 Phil. 550.

57.

Sec. 16 (d).

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#2 GR NO. 127876
EN BANC

[G.R. No. 127876. December 17, 1999.]

ROXAS & CO., INC., vs. THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN
REFORM, SECRETARY OF AGRARIAN REFORM, DAR REGIONAL DIRECTOR FOR REGION IV,
MUNICIPAL AGRARIAN REFORM OFFICER OF NASUGBU, BATANGAS and DEPARTMENT OF
AGRARIAN REFORM ADJUDICATION BOARD, respondents.

DECISION

PUNO, JR., J p:
This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the
validity of the acquisition of these haciendas by the government under Republic Act No. 6657 the
Comprehensive Agrarian Reform Law of 1998.
Petitioner 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.
The events of this case occurred during the incumbency of then President Corazon C Aquino. In
February 1986, President Aquino issued Proclamation No. 3 promulgating a Provisional
Constitution. As head of the provisional government, the President exercised legislative power
"until a legislature is elected and convened under a new Constitution." 1 In the exercise of this
legislative power the President signed on July 22, 1987, Proclamation No 131 instituting a
Comprehensive Agrarian Reform Program and Executive Order No. 229 providing the mechanisms
necessary to initially implement the program.
On July 27, 1987, the Congress of the Philippines formally convened and took over legislative
power from the President. 2 This Congress passed Republic Act No. 6657, the Comprehensive
Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and
took effect on June 15, 1988. The Act was signed by the President on June 10, 1988 and took effect
on June 15, 1988.
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Before the law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary
offer to sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and
Banilad were later placed under compulsory acquisition by respondent DAR in accordance with the
CARL.

Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform
Officer (MARO) of Nasugbu, Batangas, sent a notice entitled "Invitation to Parties" to petitioner. The
Invitation was addressed to "Jaime Pimentel, Hda. Administrator, Hda. Palico" 3 Therein, the MARO
invited petitioner to a conference on October 6, 1989 at the DAR office in Nasugbu to discuss the
results of the DAR investigation of Hacienda Palico, which was "scheduled for compulsory
acquisition this year under the Comprehensive Agrarian Reform Program." 4
On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation
and ocular inspection of the Hacienda. In the first Report, the MARO found that 270 hectares under
Tax Declaration Nos. 465, 466, 468 and 470 were "flat to undulating (0-8% slope)" and actually
occupied and cultivated by 34 tillers of sugarcane. 5 In the second Report, the MARO identified as
"flat to undulating" approximately 339 hectares under Tax Declaration No. 0234 which also had
several actual occupants and tillers of sugarcane; 6 while in the third Report, the MARO found
approximately 75 hectares under Tax Declaration No. 0354 as "flat to undulating" with 33 actual
occupants and tillers also of sugarcane. 7
On October 7. 1989, a "Summary Investigation Report" was submitted and signed jointly by the
MARO representatives of the Barangay Agrarian Reform Committee (BARC) and Land Bank of the
Philippines (LBP), and by the Provincial Agrarian Reform Officer (PARO). The Report recommended
that 333,0800 hectares of Hacienda Palico be subject to compulsory acquisition at a value of
P6,807,622.20. 8 The following day, October 28, 1989, two (2) more Summary Investigation Reports
were submitted by the same officers and representatives. They recommended that 270,0876
hectares and 75,3800 hectares be placed under compulsory acquisition at a compensation of
P8,109,739.00 and P2,188,195.47, respectively. 9
On December 12, 1989, respondent DAR through then Department Secretary Miriam D.
Santiago sent a "Notice of Acquisition" to petitioner. The Notice was addressed as follows:
"Roxas y Cia, Limited
Soriano Bldg., Plaza Cervantes
Manila, Metro Manila." 10
Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to
immediate acquisition and distribution by the government under the CARL; that based on the DAR's
valuation criteria. The government was offering compensation of P3.4 million for 333,0800
hectares; that whether this offer was to be accepted or rejected, petitioner was to inform the
Bureau of Land Acquisition and Distribution (BLAD) of the DAR; that in case of petitioner's
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rejection or failure to reply within thirty days, respondent DAR shall conduct summary
administrative proceedings with notice to petitioner to determine just compensation for the land;
that if petitioner accepts respondent DAR's offer, or upon deposit of the compensation with an
accessible bank if it rejects the same, the DAR shall take immediate possession of the land. 11
Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP Land
Valuation Manager three (3) separate Memoranda entitled "Request to Open Trust Account." Each
Memoranda requested that a trust account representing the valuation of three portions of Hacienda
Palico be opened in favor of the petitioner in view of the latter's rejection on its offered value. 12
Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of
Haciendas Palico and Banilad from agricultural to non-agricultural lands under the provisions of
the CARL. 13 On July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating its
request for conversion of the two haciendas. 14
Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition
of the two Haciendas. The LBP trust accounts as compensation for Hacienda Palico were replaced
by respondent DAR with cash and LBP bonds. 15 On October 22, 1993, from the mother title of TCT
No. 985 of the Hacienda, respondent DAR registered Certificate of Land Ownership Award (CLOA)
No. 6654. On October 30, 1993, CLOA's were distributed to farmer beneficiaries. 16

Hacienda Banilad
On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent a
notice to petitioner addressed as follows:
"Mr. Jaime Pimentel
Hacienda Administrator
Hacienda Banilad
Nasugbu, Batangas" 17
The MARO informed Pimentel that Hacienda Banilad was subject to compulsory acquisition
under the CARL; that should petitioner wish to avail of the other schemes such as Voluntary Offer to
Sell or Voluntary Land Transfer, respondent DAR was willing to provide assistance thereto. 18
On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the
latter to attend a conference on September 21, 1989 at the MARO Office in Nasugbu to discuss the
results of the MARO's investigation over Hacienda Banilad. 19
On September 21, 1989, the same day the conference was held, the MARO submitted two (2)
Reports. In his first Report, he found that approximately 709 hectares of land under Tax Declaration
Nos. 0237 and 0236 were "flat to undulating (0-8% slope)." On this area were discovered 162
actual occupants and tillers of sugarcane. 20 In the second Report, it was found that approximately

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235 hectares under Tax Declaration No. 0390 were "flat to undulating," on which were 92 actual
occupants and tillers of sugarcane. 21
The results of these Reports were discussed at the conference. Present in the conference were
representatives of the prospective farmer beneficiaries, the BARC, the LBP, and Jaime Pimentel on
behalf of the landowner. 22 After the meeting, on the same day, September 21, 1989, a Summary
Investigation Report was submitted jointly by the MARO, representatives of the BARC, LBP, and the
PARO. They recommended that after ocular inspection of the property, 234,6498 hectares under
Tax Declaration No. 0390 be subject to compulsory acquisition and distribution by CLOA. 23 The
following day, September 22, 1989, a second Summary Investigation was submitted by the same
officers. They recommended that 737.2590 hectares under Tax Declaration Nos. 0236 and 0237 be
likewise placed under compulsory acquisition for distribution. 24
On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner
two (2) separate "Notices of Acquisition" over Hacienda Banilad. These Notices were sent on the
same day as the Notice of Acquisition over Hacienda Palico. Unlike the Notice over Hacienda Palico,
however, the Notices over Hacienda Banilad were addressed to:
"Roxas y Cia. Limited
7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.
Makati, Metro Manila." 25
Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190 hectares and
P4,428,496.00 for 234.6498 hectares. 26
On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a
"Request to Open Trust Account" in petitioner's name as compensation for 234.6493 hectares of
Hacienda Banilad. 27 A second "Request to Open Trust Account" was sent on November 18, 1991
over 723.4130 hectares of said Hacienda. 28
On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and
P21,234,468.78 in cash and LBP bonds had been earmarked as compensation for petitioner's land
in Hacienda Banilad. 29
On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.

Hacienda Caylaway
Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before
the effectivity of the CARL. The Hacienda has a total area of 867.4571 hectares and is covered by
four (4) titles TCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989,
respondent DAR, through the Regional Director for Region IV, sent to petitioner two (2) separate
Resolutions accepting petitioner's voluntary offer to sell Hacienda Caylaway, particularly TCT Nos.
T-44664 and T-44663. [xxx]30 The Resolutions were addressed to:
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"Roxas & Company, Inc.
7th Flr. Cacho-Gonzales Bldg.
Aguirre, Legaspi Village
Makati, M.M." 31
On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP
Regional Manager requesting for the valuation of the land under TCT Nos. T-44664 and T44663. 32 On the same day, respondent DAR through the Regional Director sent to petitioner a
"Notice of Acquisition" over 241.6777 hectares under TCT No. T-44664 and 533.8180 hectares
under TCT No. T-44663. 33 Like the Resolutions of Acceptance, the Notice of Acquisition was
addressed to petitioner at its office in Makati, Metro Manila.
Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, set a letter
to the Secretary of respondent DAR withdrawings its VOS of Hacienda Caylaway. The Sangguniang
Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from
agricultural to non-agricultural. As a result, petitioner informed respondent DAR that it was
applying for conversion of Hacienda Caylaway from agricultural to other uses. 34
In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a
reclassification of the land would not exempt it from agrarian reform. Respondent Secretary also
denied petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on
specific grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over 18
degrees and that the land is undeveloped. 35
Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner
filed its application for conversion of both Haciendas Palico and Banilad. 36 On July 14, 1993,
petitioner, through its President, Eduardo Roxas, reiterated its request to withdraw the VOS over
Hacienda Caylaway in light of the following:
"1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of
Agriculture, Region 4, 4th Floor, ATI (BA) Bldg., Diliman, Quezon City dated March 1, 1993
stating that the lands subject of referenced titles "are not feasible and economically sound for
further agricultural development."
2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the Zoning
Ordinance reclassifying areas covered by the referenced titles to non-agricultural which was
enacted after extensive consultation with government agencies, including [the Department of
Agrarian Reform], and the requisite public hearings.
3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8, 1993
approving the Zoning Ordinance enacted by the Municipality of Nasugbu.
4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal Planning
and Development, Coordinator and Deputized Zoning Administrator addressed to Mrs. Alicia

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P. Logarta advising that the Municipality of Nasugbu, Batangas has no objection to the
conversion of the lands subject of referenced titles to non-agricultural." 37
On August 24, 1993, petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR
Adjudication Board (DARAB) praying for the cancellation of the CLOA's issued by respondent DAR
in the name of several persons. Petitioner alleged that the Municipality of Nasugbu, where the
haciendas are located, had been declared a tourist zone, that the land is not suitable for agricultural
production, and that the Sangguniang Bayan of Nasugbu had reclassified the land to nonagricultural.
In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the
prejudicial question of whether the property was subject to agrarian reform, hence, this question
should be submitted to the Office of the Secretary of Agrarian Reform for determination. 38
On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It
questioned the expropriation of its properties under the CARL and the denial of due process in the
acquisition of its landholdings.
Meanwhile, the petition for conversion of the three hectares was denied by the MARO on
November 8, 1993.
Petitioner's petition was dismissed by the Court of Appeals on April 28, 1994. 39Petitioner
moved for reconsideration but the motion was denied on January 17, 1997 by respondent court. 40
Hence, this recourse. Petitioner assigns the following errors:
"A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER'S
CAUSE OF ACTION IS PREMATURE FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES
IN VIEW OF THE PATENT ILLEGALITY OF THE RESPONDENTS' ACTS, THE IRREPARABLE
DAMAGE CAUSED BY SAID ILLEGAL ACTS, AND THE ABSENCE OF A PLAIN, SPEEDY AND
ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW ALL OF WHICH ARE
EXCEPTIONS TO THE SAID DOCTRINE.
B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER'S
LANDHOLDINGS ARE SUBJECT TO COVERAGE UNDER THE COMPREHENSIVE AGRARIAN
REFORM LAW, IN VIEW OF THE UNDISPUTED FACT THAT PETITIONER'S LANDHOLDINGS
HAVE BEEN CONVERTED TO NON-AGRICULTURAL USES BY PRESIDENTIAL
PROCLAMATION NO. 1520 WHICH DECLARED THE MUNICIPALITY OF NASUGBU,
BATANGAS AS A TOURIST ZONE, AND THE ZONING ORDINANCE OF THE MUNICIPALITY OF
NASUGBU RE-CLASSIFYING CERTAIN PORTIONS OF PETITIONER'S LANDHOLDINGS AS
NON-AGRICULTURAL. BOTH OF WHICH PLACE SAID LANDHOLDINGS OUTSIDE THE SCOPE
OF AGRARIAN REFORM, OR AT THE VERY LEAST ENTITLE PETITIONER TO APPLY FOR
CONVERSION AS CONCEDED BY RESPONDENT DAR.
C. RESPONDENT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO DECLARE THE
PROCEEDINGS BEFORE RESPONDENT DAR VOID FOR FAILURE TO OBSERVE DUE PROCESS,
CONSIDERING THAT RESPONDENTS BLATANTLY DISREGARDED THE PROCEDURE FOR
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THE ACQUISITION OF PRIVATE LANDS UNDER R.A. 6657, MORE PARTICULARLY, IN
FAILING TO GIVE DUE NOTICE TO THE PETITIONER AND TO PROPERLY IDENTIFY THE
SPECIFIC AREAS SOUGHT TO BE ACQUIRED.
D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO RECOGNIZE
THAT PETITIONER WAS BRAZENLY AND ILLEGALLY DEPRIVED OF ITS PROPERTY
WITHOUT JUST COMPENSATION, CONSIDERING THAT PETITIONER WAS NOT PAID JUST
COMPENSATION BEFORE IT WAS UNCEREMONIOUSLY STRIPPED OF ITS LANDHOLDINGS
THROUGH THE ISSUANCE OF CLOA'S TO ALLEGED FARMER BENEFICIARIES IN VIOLATION
OF R.A. 6657. 41
The assigned errors involve three (3) principal issues: (1) whether this Court can take
cognizance of this petition despite petitioner's failure to exhaust administrative remedies; (2)
whether the acquisition proceedings over the three haciendas were valid and in accordance with
law; and (3) assuming the haciendas may be reclassified from agricultural to non-agricultural,
whether this court has the power to rule on this issue.

I.

Exhaustion of Administrative Remedies

In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in
finding that petitioner failed to exhaust administrative remedies. As a general rule, before a party
may be allowed to invoke the jurisdiction of the courts of justice, he is expected to have exhausted
all means of administrative redress. This is not absolute, however. There are instances when
judicial action may be resorted to immediately. Among these exceptions are: (1) when the question
raised is purely legal; (2) when the administrative body is in estoppel; (3) when the act complained
of is patently illegal; (4) when there is urgent need for judicial intervention; (5) when the
respondent acted in disregard of due process; (6) when the respondent is a department secretary
whose acts, as an alter ego of the President, bear the implied or assumed approval of the latter; (7)
when irreparable damage will be suffered; (8) when there is no other plain, speedy and adequate
remedy; (9) when strong public interest is involved; (10) when the subject of the controversy is
private land; and (11) in quo warranto proceedings. 42
Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and
to require it to exhaust administrative remedies before the DAR itself was not a plain, speedy and
adequate remedy.
Respondent DAR issued Certificates of Land Ownership Award (CLOA'S) to farmer beneficiaries
over portions of petitioner's land without just compensation to petitioner. A Certificate of Land
Ownership Award (CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657, the
Comprehensive Agrarian Reform Law of 1988. 43 Before this may be awarded to a farmer
beneficiary, the land must first be acquired by the State from the landowner and ownership
transferred to the former. 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
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landowner. 44 There was no receipt by petitioner of any compensation for any of the lands acquired
by the government.
The kind of compensation to be paid the landowner is also specific. The law provides that the
deposit must be made only in "cash" or "LBP bonds." 45 Respondent DAR's opening of trust account
deposits in petitioner's name with the Land Bank of the Philippines does not constitute payment
under the law. Trust account deposits are not cash or LBP bonds. The replacement of the trust
account with cash or LBP bonds did not ipso facto cure the lack of compensation; for essentially, the
determination of this compensation was marred by lack of due process. In fact, in the entire
acquisition proceedings, respondent DAR disregarded the basic requirements of administrative due
process. Under these circumstances, the issuance of the CLOA's to farmer beneficiaries necessitated
immediate judicial action on the part of the petitioner.

II.

The Validity of the Acquisition Proceedings Over the Haciendas

Petitioner's allegation of lack of due process into the validity of the acquisition proceedings
themselves. Before we rule on this matter, however, there is need to lay down the procedure in the
acquisition of private lands under the provisions of the law.

A.

Modes of Acquisition of Land under R.A. 6657

Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for
two (2) modes of acquisition of private land: compulsory and voluntary. The procedure for the
compulsory acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:
"SECTION 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 a
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 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 surrenders the Certificate of Title and other
muniments of title.

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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 evidence as to the just compensation for the land,
within 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
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. 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 court of proper
jurisdiction for final determination of just compensation."
In the compulsory acquisition of private lands, the landholding, the landowners and the 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 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 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 regular 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). 46Under Section 16 of the
CARL, the first step in compulsory acquisition is the identification of the land, the landowners and
the beneficiaries. However, the law is silent on how the identification process must be made. To fill
in this gap, the DAR issued on July 26, 1989 Administrative Order NO. 12, Series of 1989, which set
the operating procedure in the identification of such lands. The procedure is as follows:

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"II.
A.

OPERATING PROCEDURE

The Municipal Agrarian Reform Officer 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 shall 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 a 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 2 Summary Investigation Report of 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 a 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 representative(s), the Land
Bank of the Philippines (LBP) representative, and 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
be asked 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 that 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. 47 The valuation worksheet and the related CACF valuation forms

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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 500,000 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 CA 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
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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 review, evaluate and determine the final land
valuation of the property. The BLAD shall prepare, on the signature of the Secretary or his duly
authorized representative, a Notice of Acquisition for the subject property. 48 From this point, the
provisions of Section 16 of R.A. 6657 then apply. 49
For a valid implementation of the CAR Program, two notices are required: (1) the Notice of
Coverage and letter of invitation to a preliminary conference sent to the landowner, the
representatives 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, i.e., the Notice of Coverage and the letter of invitation to the
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. 50 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 a mere limitation of the use of the
land. What is required is the surrender of the title to and physical possession of the said excess and
all beneficial rights accruing to the owner in favor of the farmer beneficiary 51The Bill Of Rights
provides that "[n]o person shall be deprived of life, liberty or property without due process of
law." 52 The CARL was not intended to take away property without due process of law. 53 The
exercise of the power of eminent domain requires that due process be observed in the taking of
private property.
DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was amended
in 1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No. 1, Series of 1993. The Notice
of Coverage and letter of invitation to the conference meeting were expanded and amplified in said
amendments.

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DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural
Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to R.A. 6657,"
requires that:
"B.

MARO

1.

Receives the duly accomplished CARP Form Nos. 1 & 1.1 including supporting documents.

2.

Gathers basic ownership documents listed under 1.a or 1.b above and prepares

corresponding VOCF/CACF by landowner/landholding.

3.

Notifies/invites the landowner and representatives of the LBP, DENR, BARC and prospective

beneficiaries of the schedule of ocular inspection of the property at least one week in advance.
4.

MARO/LAND BANK FIELD OFFICE/BARC

a)

Identify the land and landowner, and determine the suitability for agriculture and

productivity of the land and jointly prepare Field Investigation Report (CARP Form No. 2),
including the Land Use Map of the property.
b)

Interview applicants and assist them in the preparation of the Application For

Potential CARP Beneficiary (CARP Form No. 3).

c)

Screen prospective farmer-beneficiaries and for those found qualified, cause the

signing of the respective Application to Purchase and Farmer's Undertaking (CARP Form No.
4).
d)

Complete the Field Investigation Report based on the result of the ocular

inspection/investigation of the property and documents submitted. See to it that Field

Investigation Report is duly accomplished and signed by all concerned.
4.

MARO
a)

Assists the DENR Survey Party in the conduct of a boundary/subdivision survey

delineating areas covered by OLT, retention, subject of VOS, CA (by phases, if possible),
infrastructures etc., whichever is applicable.
b)

Sends Notice of Coverage (CARP Form No. 5) to landowner concerned or his duly

authorized representative inviting him for a conference.

c)

Sends Invitation Letter (CARP Form No. 6) for a conference/public hearing to

prospective farmer-beneficiaries, landowner, representatives of BARC, LBP, DENR, DA,

NGO's, farmers' organizations and other interested parties to discuss the following matters:
Result of Field Investigation
Inputs to valuation
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Issues raised
Comments/recommendations by all parties concerned.
d)

Prepares Summary of Minutes of the conference/public hearing to be guided by CARP

Form No. 7.
e)

Forwards the completed VOCF/CACF to the Provincial Agrarian Reform Office (PARO)

using CARP Form No. 8 (Transmittal Memo to PARO).

xxx

xxx

xxx."

DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and
Compulsory Acquisition (CA) transactions involving lands enumerated under Section 7 of the
CARL. 54 In both VOS and CA transactions, the MARO prepares the Voluntary Offer to Sell Case
Folder (VOCF) and the Compulsory Acquisition Case Folder (CACF), as the case may be, over a
particular landholding. The MARO notifies the landowner as well as representatives of the LBP,
BARC and prospective beneficiaries of the date of the ocular inspection of the property at least one
week before the scheduled date and invites them to attend the same. The MARO, LBP or BARC
conducts the ocular inspection and investigation by identifying the land and landowner,
determining the suitability of the land for agriculture and productivity, interviewing and screening
prospective farmer beneficiaries. Based on its investigation, the MARO, LBP or BARC prepares the
Field Investigation Report which shall be signed by all parties concerned. In addition to the field
investigation, a boundary or subdivision survey of the land may also be conducted by a Survey
Party of the Department of Environment and Natural Resources (DENR) to be assisted by the
MARO. 55 This survey shall delineate the areas covered by Operation Land Transfer (OLT), areas
retained by the landowner, areas with infrastructure, and the areas subject to VOS and CA. After the
survey and field investigation, the MARO sends a "Notice of Coverage" to the landowner or his duly
authorized representative inviting him to a conference or public hearing with the farmer
beneficiaries, representatives of the BARC, LBP, DENR, Department of Agriculture (DA), nongovernment organizations, farmer's organizations and other interested parties. At the public
hearing, the parties shall discuss the results of the field investigation, issues that may be raised in
relation thereto, inputs to the valuation of the subject landholding, and other comments and
recommendations by all parties concerned. The Minutes of the conference/public hearing shall
form part of the VOCF or CACF which files shall be forwarded by the MARO to the PARO. The PARO
reviews, evaluates and validates the Field Investigation Report and other documents in the
VOCF/CACF. He then forwards the records to the RARO for another review.
DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. DAR A.O. No. 1,
Series of 1993 provided, among others, that:
"IV. OPERATING PROCEDURES:

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"Steps Responsible

Activity

Forms/

Document
(Requirements)
A. Identification and
Documentation
xxx
5 DARMO

xxx

xxx

Issues Notice of Coverage

CARP
to LO by personal
Form No.
delivery with proof of
2
service, or by registered
mail with return card,
informing him that his
property is now under
CARP coverage and for
LO to select his retention
area, if he desires to avail
of his right of retention;
and at the same time
invites him to join the
field investigation to be
conducted on his property
which should be
scheduled at least two
weeks in advance of said
notice.
A copy of said Notice
shall be posted for at least
one week on the bulletin
board of the municipal
and barangay halls where
the property is located.
LGU office concerned
notifies DAR about
compliance with posting
requirement thru return
indorsement on CARP
Form No. 17.

6 DARMO

Sends notice to the LBP,

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BARC, DENR
Form No.
representatives and
3
prospective ARBs of the
schedule of the field
investigation to be
conducted on the subject
property.
7 DARMO With the participation of
CARP
BARC
the LO, representatives of
Form No.
LBP
the LBP, BARC, DENR
4
DENR
and prospective ARBs, Land Use
Local Office
conducts the investigation
Map
on subject property to
identify the landholding,
determines its suitability
and productivity; and
jointly prepares the Field
Investigation Report (FIR)
and Land Use Map.
However, the field
investigation shall proceed
even if the LO, the
representatives of the
DENR and prospective
ARBs are not available
provided, they were given
due notice of the time and
date of the investigation to
be conducted. Similarly, if
the LBP representative is
not available or could not
come on the scheduled
date, the field
investigation shall also be
conducted, after which the
duly accomplished Part I
of CARP Form No. 4 shall
be forwarded to the LBP
representative for
validation. If he agrees to
the ocular inspection
report of DAR, he signs
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the FIR (Part I) and
accomplishes Part II
thereof.
In the event that there is a
difference or variance
between the findings of
the DAR and the LBP as
to the propriety of
covering the land under
CARP, whether in whole
or in part, on the issue of
suitability to agriculture,
degree of development or
slope, and on issues
affecting idle lands, the
conflict shall be resolved
by a composite team of
DAR, LBP, DENR and
DA which shall jointly
conduct further
investigation thereon. The
team shall submit its
report of findings which
shall be binding to both
DAR and LBP, pursuant
to Joint Memorandum
Circular of the DAR,
LBP, DENR and DA
dated 27 January 1992.
8 DARMO Screens prospective ARBs
CARP
BARC
and causes the signing of
Form No.
the Application of
5
Purchase and Farmers'
Undertaking (APFU).
9 DARMO

Furnishes a copy of the CARP

duly accomplished FIR to
the landowner by personal
delivery with proof of
service or registered mail
with return card and posts
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a copy thereof for at least
one week on the bulletin
board of the municipal
and barangay halls where
the property is located. prLL
LGU Office concerned CARP
notifies DAR about
Form No.
compliance with posting
17
requirement thru return
endorsement on CARP
Form No. 17.
B. Land Survey
10 DARMO Conducts perimeter or Perimeter
And/or
segregation survey
DENR
delineating areas covered
Local Office
by OLT, "uncarpable
areas such as 18% slope
and above, unproductive/
unsuitable to agriculture,
retention, infrastructure.
In case of segregation or
subdivision survey, the
plan shall be approved by
DENR-LMS.

or
Segregation
Survey Plan

C. Review and
Completion of
Documents
11 DARMO

Forwards VOCF/CACF
to DARPO.

CARP
Form No.
6
xxx
xxx
xxx."
DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number of
government agencies involved in the identification and delineation of the land subject to
acquisition. 56 This time, the Notice of Coverage is sent to the landowner before the conduct of the
field investigation and the sending must comply with specific requirements. Representatives of the
DAR Municipal Office (DARMO) must send the Notice of Coverage to the landowner by "personal
delivery with proof of service, or by registered mail with return card," informing him that his
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property is under CARP coverage and that if he desires to avail of his right of retention, he may
choose which area he shall retain. The Notice of Coverage shall also invite the landowner to attend
the field investigation to be scheduled at least two weeks from notice. The field investigation is for
the purpose of identifying the landholding and determining its suitability for agriculture and its
productivity. A copy of the Notice of Coverage shall be posted for at least one week on the bulletin
board of the municipal and barangay halls where the property is located. The date of the field
investigation shall also be sent by the DAR Municipal Office to representatives of the LBP, BARC,
DENR and prospective farmer beneficiaries. The field investigation shall be conducted on the date
set with the participation of the landowner and the various representatives. If the landowner and
other representatives are absent, the field investigation shall proceed, provided they were duly
notified thereof. Should there be a variance between the findings of the DAR and the LBP as to
whether the land be placed under agrarian reform, the land's suitability to agriculture, the degree
or development of the slope, etc., the conflict shall be resolved by a composite team of the DAR, LBP,
DENR and DA which shall jointly conduct further investigation. The team's findings shall be binding
on both DAR and LBP. After the field investigation, the DAR Municipal Office shall prepare the Field
Investigation Report and Land Use Map, a copy of which shall be furnished the landowner "by
personal delivery with proof of service or registered mail with return card." Another copy of the
Report and Map shall likewise be posted for at least one week in the municipal or barangay halls
where the property is located.
Clearly then, the notice requirements under the CARL are not confined to the Notice of
Acquisition set forth in Section 16 of the law. They also include the Notice of Coverage first laid
down in DAR A.O. No. 12, Series of 1989 and subsequently amended in DAR A.O. No. 9, Series of
1990 and DAR A.O. No. 1, Series of 1993. This Notice of Coverage does not merely notify the
landowner that his property shall be placed under CARP and that he is entitled to exercise his
retention right; it also notifies him, pursuant to DAR A.O. No. 9, Series of 1990, that a public hearing
shall be conducted where he and representatives of the concerned sectors of society may attend to
discuss the results of the field investigation, the land valuation and other pertinent matters. Under
DAR A.O. No. 1, Series of 1993, the Notice of Coverage also informs the landowner that a field
investigation of his landholding shall be conducted where he and the other representatives may be
present.
B.

The Compulsory Acquisition of Haciendas Palico and Banilad

In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a
letter of invitation entitled "Invitation to Parties" dated September 29, 1989 to petitioner
corporation, through Jaime Pimentel, the administrator of Hacienda Palico. 57 The invitation was
received on the same day it was sent as indicated by a signature and the date received at the bottom
left corner of said invitation. With regard to Hacienda Banilad, respondent DAR claims that Jaime
Pimentel, administrator also of Hacienda Banilad, was notified and sent an invitation to the
conference. Pimentel actually attended the conference on September 21, 1989 and signed the
Minutes of the meeting on behalf of petitioner corporation. 58 The Minutes was also signed by the
representatives of the BARC, the LBP and farmer beneficiaries. 59 No letter of invitation was sent or

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conference meeting held with respect to Hacienda Caylaway because it was subject to a Voluntary
Offer to Sell to respondent DAR. 60
When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the
various parties the Notice of Coverage and invitation to the conference, DAR A.O. No. 12, Series of
1989 was already in effect more than a month earlier. The Operating Procedure in DAR
Administrative Order No. 12 does not specify how notices or letters of invitation shall be sent to the
landowner, the representatives of the BARC, the LBP, the farmer beneficiaries and other interested
parties. The procedure in the sending of these notices is important to comply with the requisites of due
process especially when the owner, as in this case, is a juridical entity. Petitioner is a domestic
corporation, 61 and therefore has a personality separate and distinct from its shareholders, officers
and employees.
The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by
"personal delivery or registered mail." Whether the landowner be a natural or juridical person to
whose address the Notice may be sent by personal delivery or registered mail, the law does not
distinguish. The DAR Administrative Orders also do not distinguish. In the proceedings before the
DAR the distinction between natural and juridical persons in the sending of notices may be found in
the Revised Rules of Procedure of the DAR Adjudication Board (DARAB). Service of pleadings
before the DARAB is governed by Section 6, Rule V of the DARAB Revised Rules of Procedure.
Notices and pleadings are served on private domestic corporations or partnerships in the following
manner:
"SECTION 6.

Service upon Private Domestic Corporation or Partnership. If the defendant is a

corporation organized under the laws of the Philippines or a partnership duly registered, service
may be made on the president, manager, secretary, cashier, agent, or any of its directors or
partners."
Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:
"SECTION 13.

Service upon private domestic corporation or partnership. If the defendant is a

corporation organized under the laws of the Philippines or a partnership duly registered, service
may be made on the president, manager, secretary, cashier, agent, or any of its directors."
Summonses, pleadings and notices in cases against a private domestic corporation before the
DARAB and the regular courts are served on the president, manager, secretary, cashier, agent or
any of its directors. These persons are those through whom the private domestic corporation or
partnership is capable of action. 62
Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner
corporation. Is he, as administrator of the two Haciendas, considered an agent of the corporation?
The purpose of all rules for service of process on a corporation is to make it reasonably certain
that the corporation will receive prompt and proper notice in an action against it. 63 Service must be
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made on a representative so integrated with the corporation as to make it a priori supposable that
he will realize his responsibilities and know what he should do with any legal papers served on
him, 64 and bring home to the corporation notice of the filing of the action. 65 Petitioner's evidence
does not show the official duties of Jaime Pimentel as administrator of petitioner's haciendas. The
evidence does not indicate whether Pimentel's duties is so integrated with the corporation that he
would immediately realize his responsibilities and know what he should do with any legal papers
served on him. At the time the notices were sent and the preliminary conference conducted,
petitioner's principal place of business was listed in respondent DAR's records as "Soriano Bldg.,
Plaza Cervantes, Manila," 66 and "7th Flr. Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro
Manila." 67 Pimentel did not hold office at the principal place of business of petitioner. Neither did
he exercise his functions in Plaza Cervantes, Manila nor in Cacho-Gonzales Bldg., Makati, Metro
Manila. He performed his official functions and actually resided in the haciendas in Nasugbu,
Batangas, a place over two hundred kilometers away from Metro Manila. cdrep
Curiously, respondent DAR had information of the address of petitioner's principal place of
business. The Notices of Acquisition over Haciendas Palico and Banilad were addressed to
petitioner at its offices in Manila and Makati. These Notices were sent barely three to four months
after Pimentel was notified of the preliminary conference. 68 Why respondent DAR chose to notify
Pimentel instead of the officers of the corporation was not explained by the said respondent.
Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices
and letters of invitation were validly served on petitioner through him, there is no showing that
Pimentel himself was duly authorized to attend the conference meeting with the MARO, BARC and
LBP representatives and farmer beneficiaries for purposes of compulsory acquisition of petitioner's
landholdings. Even respondent DAR's evidence does not indicate this authority. On the contrary,
petitioner claims that it had no knowledge of the letter-invitation, hence, could not have given
Pimentel the authority to bind it to whatever matters were discussed or agreed upon by the parties
at the preliminary conference or public hearing. Notably, one year after Pimentel was informed of
the preliminary conference, DAR A.O. No. 9, Series of 1990 was issued and this required that the
Notice of Coverage must be sent "to the landowner concerned or his duly authorized
representative."69
Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the
areas found actually subject to CARP were not properly identified before they were taken over by
respondent DAR. Respondents insist that the lands were identified because they are all registered
property and the technical description in their respective titles specifies their metes and bounds.
Respondents admit at the same time, however, that not all areas in the haciendas were placed
under the comprehensive agrarian reform invariably by reason of elevation or character or use of
the land. 70
The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but
only portions thereof. Hacienda Palico has an area of 1,024 hectares and only 688.7576 hectares
were targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but only 964.0688
hectares were subject to CARP. The haciendas are not entirely agricultural lands. In fact, the various
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tax declarations over the haciendas describe the landholdings as "sugarland," and "forest,
sugarland, pasture land, horticulture and woodland." 71
Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that
the land subject to land reform be first identified. The two haciendas in the instant case cover vast
tracts of land. Before Notices of Acquisition were sent to petitioner, however, the exact areas of the
landholdings were not properly segregated and delineated.Upon receipt of this notice, therefore,
petitioner corporation had no idea which proportions of its estate were subject to compulsory
acquisition, which portions it could rightfully retain, whether these retained portions were compact or
contiguous, and which portions were excluded from CARP coverage. Even respondent DAR's evidence
does not show that petitioner, through its duly authorized representative, was notified of any
ocular inspection and investigation that was to be conducted by respondent DAR. Neither is there
proof that petitioner was given the opportunity to at least choose and identify its retention areas in
those portions to be acquired compulsorily. The right of retention and how this right is exercised, is
guaranteed in Section 6 of the CARL, viz:
SECTION 6.

Retention Limits. . . .

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 case the 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 from the time the landowner
manifests his choice of the area for retention.
Under the law, a landowner may retain not more than five hectares out of the total area of his
agricultural land subject to CARP. The right to choose the area to be retained, which shall be
compact or contiguous, pertains to the landowner. If the area chosen for retention is tenanted, the
tenant shall have the option to choose whether to remain on the portion or be a beneficiary in the
same or another agricultural land with similar or comparable features.

C.

The Voluntary Acquisition of Hacienda Caylaway

Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of
a Voluntary Offer to Sell (VOS). The VOS in the instant case was made on May 6, 1988, 72 before the
effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first governed by DAR
Administrative Order No. 19, series of 1989, 73 and under this order, all VOS filed before June 15,
1988 shall be heard and processed in accordance with the procedure provided for in Executive
Order No. 229, thus:
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"III. All VOS transactions which are now pending before the DAR and for which no payment has
been made shall be subject to the notice and hearing requirements provided in Administrative
Order No. 12, Series of 1989, dated 26 July 1989, Section II, Subsection A, paragraph 3.
All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be heard and processed
in accordance with the procedure provided for in Executive Order No. 229.
"xxx

xxx

xxx."

Section 9 of E.O. 229 provides:

"SECTION 9.

Voluntary Offer to Sell. The government shall purchase all agricultural lands it

deems productive and suitable to farmer cultivation voluntarily offered for sale to it at a valuation
determined in accordance with Section 6. Such transaction shall be exempt from the payment of
capital gains tax and other taxes and fees."
Executive Order 229 does not contain the procedure for the identification of private land as set
forth in DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229 merely reiterates the procedure
of acquisition in Section 16 R.A. 6657. In other words, the E.O. is silent as to the procedure for the
identification of the land, the notice of coverage and the preliminary conference with the
landowner, representatives of the BARC, the LBP and farmer beneficiaries. Does this mean that
these requirements may be dispensed with regard to VOS filed before June 15, 1988? The answer is
no.
First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner and
beneficiaries of the land subject to agrarian reform be identified before the notice of acquisition
should be issued. 74 Hacienda Caylaway was voluntarily offered for sale in 1989. The Hacienda has a
total area of 867.4571 hectares and is covered by four (4) titles. In two separate Resolutions both
dated January 12, 1989, respondent DAR, through the Regional Director, formally accepted the VOS
over two of these four titles. 75 The land covered by the two titles has an area of 855.5257 hectares,
but only 648.8544 hectares thereof fell within the coverage of R.A. 6657. 76 Petitioner claims it does
not know where these portions are located.
Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles
were conducted in 1989, and that petitioner, as landowner, was not denied participation therein.
The results of the survey and the land valuation summary report, however, do not indicate whether
notices to attend the same were actually sent to and received by petitioner or its duly authorized
representative. 77 To reiterate, Executive Order No. 229 does not lay down the operating procedure,
much less the notice requirements, before the VOS is accepted by respondent DAR. Notice to the
landowner, however, cannot be dispensed with. It is part of administrative due process and is an
essential requisite to enable the landowner himself to exercise, at the very least, his right of
retention guaranteed under the CARL.

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III. The Conversion of the three Haciendas
It is petitioner's claim that the three haciendas are not subject to agrarian reform because they
have been declared for tourism, not agricultural purposes. 78 In 1975, then President Marcos issued
Proclamation No. 1520 declaring the municipality of Nasugbu, Batangas a tourist zone. Lands in
Nasugbu including the subject haciendas, were allegedly reclassified as non-agricultural 13 years
before the effectivity of R.A. No. 6657. 79 In 1993, the Regional Director for Region IV of the
Department of Agriculture certified that the haciendas are not feasible and sound for agricultural
development. 80 On March 20, 1992, pursuant to Proclamation No. 1520, the Sangguniang Bayan of
Nasugbu, Batangas adopted Resolution No. 19 reclassifying certain areas of Nasugbu as nonagricultural. 81This Resolution approved Municipal Ordinance No. 19, Series of 1992, the Revised
Zoning Ordinance of Nasugbu 82 which zoning ordinance was based on a Land Use Plan for Planning
Areas for New Development allegedly prepared by the University of the Philippines. 83 Resolution
No. 19 of the Sangguniang Bayan was approved by the Sangguniang Panlalawigan of Batangas on
March 8, 1993. 84
Petitioner claims that Proclamation No. 1520 was also upheld by respondent DAR in 1991
when it approved conversion of 1,827 hectares in Nasugbu into a tourist area known as the Batulao
Resort Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist
belt. 85 Petitioner presents evidence before us that these areas are adjacent to the haciendas subject
of this petition, hence, the haciendas should likewise be converted. Petitioner urges this Court to
take cognizance of the conversion proceedings and rule accordingly. 86
We do not agree. Respondent DAR's failure to observe due process in the acquisition of
petitioner's landholdings does not ipso facto give this Court the power to adjudicate over
petitioner's application for conversion of its haciendas from agricultural to non-agricultural. The
agency charged with the mandate of approving or disapproving applications for conversion is the
DAR.
At the time petitioner filed its application for conversion, the Rules of Procedure governing the
processing and approval of applications for land use conversion was the DAR A.O. No. 2, Series of
1990. Under this A.O., the application for conversion is filed with the MARO where the property is
located. The MARO reviews the application and its supporting documents and conducts field
investigation and ocular inspection of the property. The findings of the MARO are subject to review
and evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO may conduct further
filed investigation and submit a supplemental report together with his recommendation to the
Regional Agrarian Reform Officer (RARO) who shall review the same. For lands less than five
hectares, the RARO shall approve or disapprove applications for conversion. For lands exceeding
five hectares, the RARO shall evaluate the PARO Report and forward the records and his report to
the Undersecretary for Legal Affairs. Applications over areas exceeding fifty hectares are approved
or disapproved by the Secretary of Agrarian Reform.
The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and
Sections 5 (l) of Executive Order No, 129-A, Series of 1987 and reiterated in the CARL and

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Memorandum Circular No. 54, Series of 1993 of the Office of the President. The DAR's jurisdiction
over applications for conversion is provided as follows:
"A.
The Department of Agrarian Reform (DAR) is mandated to "approve or disapprove
applications for conversion, restructuring or readjustment of agricultural lands into nonagricultural uses," pursuant to Section 4 (j) of Executive Order No. 129-A, Series of
1987. LLjur
"B.
Section 5 (l) of E.O. 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
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." 87
Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled
"Revised Rules and Regulations Governing Conversion of Private Agricultural Lands and NonAgricultural Uses," and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing the
Processing and Approval of Applications for Land Use Conversion." These A.O.'s and other
implementing guidelines, including Presidential issuances and national policies related to land use
conversion have been consolidated in DAR A.O. No. 07, Series of 1997. Under this recent issuance,
the guiding principle in land use conversion is:
"to preserve prime agricultural lands for food production while, at the same time, recognizing the
need of the other sectors of society (housing, industry and commerce) for land, 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." 88
"Land Use" refers to the manner of utilization of land, including its allocation, development and
management. "Land Use Conversion" refers to the act or process of changing the current use of a
piece of agricultural land into some other use as approved by the DAR. 89 The conversion of
agricultural land to uses other than agricultural requires field investigation and conferences with
the occupants of the land. They involve factual findings and highly technical matters within the
special training and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with specificity
how the DAR must go about its task. This time, the field investigation is not conducted by the MARO
but by a special task force, known as the Center for Land Use Policy Planning and Implementation
(CLUPPI-DAR Central Office). The procedure is that once an application for conversion is filed, the
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CLUPPI prepares the Notice of Posting. The MARO only posts the notice and thereafter issues a
certificate to the fact of posting. The CLUPPI conducts the field investigation and dialogues with the
applicants and the farmer beneficiaries to ascertain the information necessary for the processing of
the application. The Chairman of the CLUPPI deliberates on the merits of the investigation report
and recommends the appropriate action. This recommendation is transmitted to the Regional
Director, thru the Undersecretary, or Secretary of Agrarian Reform. Applications involving more
than fifty hectares are approved or disapproved by the Secretary. The procedure does not end with
the Secretary, however. The Order provides that the decision of the Secretary may be appealed to
the Office of the President or the Court of Appeals, as the case may be, viz:
"Appeal from the decision of the Undersecretary shall be made to the Secretary, and from the
Secretary to the Office of the President or the Court of Appeals as the case may be. The mode of
appeal motion for reconsideration, and the appeal fee, from Undersecretary to the Office of the
Secretary shall be the same as that of the Regional Director to the Office of the Secretary."90
Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself
authority to resolve a controversy the jurisdiction over which is initially lodged with an
administrative body of special competence. 91 Respondent DAR is in a better position to resolve
petitioner's application for conversion, being primarily the agency possessing the necessary
expertise on the matter. The power to determine whether Haciendas Palico, Banilad and Caylaway
are non-agricultural, hence, exempt from the coverage of the CARL lies with the DAR, not with this
Court.
Finally, 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. 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. In Hacienda Palico alone,
CLOA's were issued to 177 farmer beneficiaries in 1993. 92 Since then until the present, these
farmers have been cultivating their lands. 93 It goes against the basic precepts of justice, fairness and
equity to deprive these people, through no fault of their own, of the land they till. Anyhow, the
farmer beneficiaries hold the property in trust for the rightful owner of the land.
IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the
three haciendas are nullified for respondent DAR's failure to observe due process therein. In
accordance with the guidelines set forth in this decision and the applicable administrative
procedure, the case is hereby remanded to respondent DAR for proper acquisition proceedings and
determination of petitioner's application for conversion.
SO ORDERED.
Davide, Jr., C .J ., Bellosillo, Vitug, Mendoza, Panganiban, Purisima, Buena, Gonzaga-Reyes and De Leon,
Jr., JJ ., concur.

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Separate Opinions

MELO, J ., concurring and dissenting:

I concur in the ponencia of Justice Ynares-Santiago, broad and exhaustive as it is in its treatment
of the issues. However, I would like to call attention to two or three points which I believe are
deserving of special emphasis.
The apparent incongruity or shortcoming in the petition is DAR's disregard of a law which
settled the non-agricultural nature of the property as early as 1975. Related to this are the
inexplicable contradictions between DAR's own official issuances and its challenged actuations in
this particular case.
Presidential Proclamation No. 1520 has the force and effect of law unless repealed. This law
declared Nasugbu, Batangas as a tourist zone.
Considering the new and pioneering stage of the tourist industry in 1975, it can safely be
assumed that Proclamation 1520 was the result of empirical study and careful determination, not
political or extraneous pressures. It cannot be disregarded by DAR or any other department of
Government.
In Province of Camarines Sur, et al. vs. Court of Appeals, et al. (222 SCRA 173, 182 [1993]), we
ruled that local governments need not obtain the approval of DAR to reclassify lands from
agricultural to non-agricultural use. In the present case, more than the exercise of that power, the
local governments were merely putting into effect a law when they enacted the zoning ordinances
in question.
Any doubts as to the factual correctness of the zoning reclassifications are answered by the
February 2, 1993 certification of the Department of Agriculture that the subject landed estates are
not feasible and economically viable for agriculture, based on the examination of their slope,
terrain, depth, irrigability, fertility, acidity, and erosion considerations.
I agree with the ponencia's rejection of respondent's argument that agriculture is not
incompatible and may be enforced in an area declared by law as a tourist zone. Agriculture may
contribute to the scenic views and variety of countryside profiles but the issue in this case is not the
beauty of ricefields, cornfields, or coconut groves. May land found to be non-agricultural and
declared as a tourist zone by law, be withheld from the owner's efforts to develop it as such? There
are also plots of land within Clark Field and other commercial-industrial zones capable of
cultivation but this does not subject them to compulsory land reform. It is the best use of the land
for tourist purposes, free trade zones, export processing or other function to which it is dedicated
that is the determining factor. Any cultivation is temporary and voluntary.
The other point I wish to emphasize is DAR's failure to follow its own administrative orders and
regulations in this case.

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The contradictions between DAR administrative orders and its actions in the present case may
be summarized.
1.
DAR Administrative Order No. 6, Series of 1994, subscribes to Department of Justice
Opinion No. 44, Series of 1990 that lands classified as non-agricultural prior to June 15,
1988 when the CARP Law was passed are exempt from its coverage. By what right can DAR
now ignore its own Guidelines in this case of land declared as forming a tourism zone since
1975.?
2.
DAR Order dated January 22, 1991 granted the conversion of the adjacent and
contiguous property of Group Developers and Financiers, Inc. (GDFI) into the Batulao Tourist
Resort. Why should DAR have a contradictory stance in the adjoining property of Roxas and
Co., Inc. found to be similar in nature and declared as such?
3.
DAR Exemption Order, Case No. H-9999-050-97 dated May 17, 1999 only recently
exempted 13.5 hectares of petitioner's property also found in Caylaway together, and
similarly situated, with the bigger parcel (Hacienda Caylaway) subject of this petition from
CARL coverage. To that extent, it admits that its earlier blanket objections are unfounded.
4.
DAR Administrative Order No. 3, Series of 1996 identifies the land outside of CARP
coverage as:
(a)
Land found by DAR as no longer suitable for agriculture and which cannot be
given appropriate valuation by the Land Bank;
(b)

Land where DAR has already issued a conversion order;

(c)

Land determined as exempt under DOJ Opinions Nos. 44 and 181; or

(d)

Land declared for non-agricultural use by Presidential Proclamation.

It is readily apparent that the land in this case falls under all the above categories except the
second one. DAR is acting contrary to its own rules and regulations.
I should add that DAR has affirmed in a Rejoinder (August 20, 1999) the issuance and
effectivity of the above administrative orders.
DAR Administrative Order No. 3, Series of 1996, Paragraph 2 of Part II, Part III and Part IV
outlines the procedure for reconveyance of land where CLOAs have been improperly issued. The
procedure is administrative, detailed, simple, and speedy. Reconveyance is implemented by DAR
which treats the procedure as "enshrined in Section 50 of Republic Act No. 6657." (Respondent's
Rejoinder). Administrative Order No. 3, Series of 1996 shows there are no impediments to
administrative or judicial cancellations of CLOA's improperly issued over exempt property.
Petitioner further submits, and this respondent does not refute, that 25 CLOAs covering 3.338
hectares of land owned by the Manila Southcoast Development Corporation also found in Nasugbu,
Batangas, have been cancelled on similar grounds as those in the case at bar.
The CLOAs in the instant case were issued over land declared as non-agricultural by a
presidential proclamation and confirmed as such by actions of the Department of Agriculture and
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the local government units concerned. The CLOAs were issued over adjoining lands similarly
situated and of like nature as those declared by DAR as exempt from CARP coverage. The CLOAs
were surprisingly issued over property which were the subject of pending cases still undecided by
DAR. There should be no question over the CLOAs having been improperly issued, for which reason,
their cancellation is warranted.

YNARES-SANTIAGO, J ., concurring and dissenting:

I concur in the basic premises of the majority opinion. However, I dissent in its final conclusions
and the dispositive portion.
With all due respect, the majority opinion centers on procedure but unfortunately ignores the
substantive merits which this procedure should unavoidably sustain.
The assailed decision of the Court of Appeals had only one basic reason for its denial of the
petition, i.e., the application of the doctrine of non-exhaustion of administrative remedies. This
Court's majority ponencia correctly reverses the Court of Appeals on this issue. The ponencia now
states that the issuance of CLOA's to farmer beneficiaries deprived petitioner Roxas & Co. of its
property without just compensation. It rules that the acts of the Department of Agrarian Reform are
patently illegal. It concludes that petitioner's rights were violated, and thus to require it to exhaust
administrative remedies before DAR was not a plain, speedy, and adequate remedy. Correctly,
petitioner sought immediate redress from the Court of Appeals to this Court.
However, I respectfully dissent from the judgment which remands the case to the DAR. If the
acts of DAR are patently illegal and the rights of Roxas & Co. violated, the wrong decisions of DAR
should be reversed and set aside. It follows that the fruits of the wrongful acts, in this case the
illegally issued CLOAs, must be declared null and void.
Petitioner Roxas & Co. Inc. is the registered owner of three (3) haciendas located in Nasugbu,
Batangas, namely: Hacienda Palico comprising of an area of 1.024 hectares more or less, covered by
Transfer Certificate of Title No. 985 (Petition, Annex "G"; Rollo, p. 203); Hacienda Banilad
comprising an area of 1,050 hectares and covered by TCT No. 924 (Petition, Annex "I"; Rollo, p.
205); and Hacienda Caylaway comprising an area of 867.4571 hectares and covered by TCT Nos. T44655 (Petition, Annex "O"; Rollo, p. 216). T-44662 (Petition, Annex "P"; Rollo, p. 217), T-44663
(Petition, Annex "Q"; Rollo, p. 210) and T-44664 (Petition, Annex "R"; Rollo, p. 221).
Sometime in 1992 and 1993, petitioner filed applications for conversion with DAR. Instead of
either denying or approving the applications, DAR ignored and sat on them for seven (7) years. In
the meantime and in acts of deceptive lip-service, DAR excluded some small and scattered lots in
Palico and Caylaway from CARP coverage. The majority of the properties were parceled out to
alleged farmer-beneficiaries, one at a time, even as petitioner's applications were pending and
unacted upon.
The majority ponencia cites Section 16 of Republic Act No. 6657 on the procedure for
acquisition of private lands.
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The ponencia cites the detailed procedures found in DAR Administrative Order No. 12, Series of
1989 for the identification of the land to be acquired. DAR did not follow its own prescribed
procedures. There was no valid issuance of a Notice of Coverage and a Notice of Acquisition.
The procedure on the evaluation and determination of land valuation, the duties of the
Municipal Agrarian Reform Officer (MARO), the Barangay Agrarian Reform Committee (BARC),
Provincial Agrarian Reform Officer (PARO) and the Bureau of Land Acquisition and Distribution
(BLAD), the documentation and reports on the step-by-step process, the screening of prospective
Agrarian Reform Beneficiaries (ARBs), the land survey and segregation survey plan and other
mandatory procedures were not followed. The landowner was not properly informed of anything
going on.
Equally important, there was no payment of just compensation. I agree with theponencia that
due process was not observed in the taking of petitioner's properties. Since the DAR did not validly
acquire ownership over the lands, there was no acquired property to validly convey to any
beneficiary. The CLOAs were null and void from the start.
Petitioner states that the notices of acquisition were sent by respondents by ordinary mail only,
thereby disregarding the procedural requirement that notices be served personally or by registered
mail. This is not disputed by respondents, but they allege that petitioner changed its address
without notifying the DAR. Notably, the procedure prescribed speaks of only two modes of service
of notices of acquisition personal service and service by registered mail. The non-inclusion of
other modes of service can only mean that the legislature intentionally omitted them. In other
words, service of a notice of acquisition other than personally or by registered mail is not
valid. Casus omissus pro omisso habendus est. The reason is obvious. Personal service and service by
registered mail are methods that ensure receipt by the addressee, whereas service by ordinary mail
affords no reliable proof of receipt.
Since it governs the extraordinary method of expropriating private property, the CARL should
be strictly construed. Consequently, faithful compliance with its provisions, especially those which
relate to the procedure for acquisition of expropriated lands, should be observed. Therefore, the
service by respondent DAR of the notices of acquisition to petitioner by ordinary mail, not being in
conformity with the mandate of RA 6657, is invalid and ineffective.
With more reason, the compulsory acquisition of portion of Hacienda Palico, for which no
notices of acquisition were issued by the DAR, should be declared invalid.
The entire ponencia, save for the last six (6) pages, deals with the mandatory procedures
promulgated by law and DAR and how they have not been complied with. There can be no debate
over the procedures and their violation. However, I respectfully dissent in the conclusions reached
in the last six pages. Inspite of all the violations, the deprivation of petitioner's rights, the nonpayment of just compensation, and the consequent nullity of the CLOAs, the Court is remanding the
case to the DAR for it to act on the petitioner's pending applications for conversion which have been
unacted upon for seven (7) years.

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Petitioner had applications for conversion pending with DAR. Instead of deciding them one way
or the other, DAR sat on the applications for seven (7) years. At the same time it rendered the
applications inutile by distributing CLOAs to alleged tenants. This action is even worse than a denial
of the applications because DAR had effectively denied the application against the applicant without
rendering a formal decision. This kind of action preempted any other kind of decision except denial.
Formal denial was even unnecessary. In the case of Hacienda Palico, the application was in fact
denied on November 8, 1993.
There are indisputable and established factors which call for a more definite and clearer
judgment.
The basic issue in this case is whether or not the disputed property is agricultural in nature and
covered by CARP. That petitioner's lands are non-agricultural in character is clearly shown by the
evidence presented by petitioner, all of which were not disputed by respondents. The disputed
property is definitely not subject to CARP.
The nature of the land as non-agricultural has been resolved by the agencies with primary
jurisdiction and competence to decide the issue, namely (1) a Presidential Proclamation in 1975;
(2) Certifications from the Department of Agriculture, (3) a Zoning Ordinance of the Municipality of
Nasugbu, approved by the Province of Batangas; and (4) by clear inference and admissions.
Administrative Orders and Guidelines promulgated by DAR itself.
The records show that on November 20, 1975 even before the enactment of the CARP law, the
Municipality of Nasugbu, Batangas was declared a "tourist zone" in the exercise of lawmaking
power by then President Ferdinand E. Marcos under Proclamation No. 1520 (Rollo, pp. 122-123).
This Presidential Proclamation is indubitably part of the law of the land.
On 20 March 1992 the Sangguniang Bayan of Nasugbu promulgated its Resolution No. 19, a
zonification ordinance (Rollo, pp. 124-200), pursuant to its powers under Republic Act No.
7160, i.e., the Local Government Code of 1991. The municipal ordinance was approved by
the Sangguniang Panlalawigan of Batangas (Rollo, p. 201). Under this enactment, portions of the
petitioner's properties within the municipality were re-zonified as intended and appropriate for
non-agricultural uses. These two issuances, together with Proclamation 1520, should be sufficient
to determine the nature of the land as non-agricultural. But there is more.
The records also contain a certification dated March 1, 1993 from the Director of Region IV of
the Department of Agriculture that the disputed lands are no longer economically feasible and
sound for agricultural purposes (Rollo, p. 213).
DAR itself impliedly accepted and determined that the municipality of Nasugbu is nonagricultural when it affirmed the force and effect of Presidential Proclamation 1520. In an Order
dated January 22, 1991, DAR granted the conversion of the adjoining and contiguous landholdings
owned by Group Developer and Financiers, Inc. in Nasugbu pursuant to the Presidential
Proclamation. The property alongside the disputed properties is now known as "Batulao Resort
Complex". As will be shown later, the conversion of various other properties in Nasugbu has been
ordered by DAR, including a property disputed in this petition, Hacienda Caylaway.
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Inspite of all the above, the Court of Appeals concluded that the lands comprising petitioner's
haciendas are agricultural, citing, among other things, petitioner's acts of voluntarily offering
Hacienda Caylaway for sale and applying for conversion its lands from agricultural to nonagricultural.
Respondents, on the other hand, did not only ignore the administrative and executive decisions.
It also contended that the subject land should be deemed agricultural because it is neither
residential, commercial, industrial or timber. The character of a parcel of land, however, is not
determined merely by a process of elimination. The actual use which the land is capable of should
be the primordial factor.
RA 6657 explicitly limits its coverage thus:
"The Comprehensive Agrarian Reform Law of 1998 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." (RA 6657, Sec. 4, emphasis provided)
In Luz Farms v. Secretary of the Department of Agrarian Reform and Natalia Realty,
Inc. v. Department of Agrarian Reform, this Court had occasion to rule that agricultural lands are
only those which are arable and suitable.
It is at once noticeable that the common factor that classifies land use as agricultural, whether it
be public or private land, is its suitability for agriculture. In this connection, RA 6657 defines
"agriculture" 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

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conjunction with such farming operations done by persons whether natural or juridical" (RA 6657,
sec. 3[b])
In the case at bar, petitioner has presented certifications issued by the Department of
Agriculture to the effect that Haciendas Palico, Banilad and Caylaway are not feasible and
economically viable for agricultural development due to marginal productivity of the soil, based on
an examination of their slope, terrain, depth, irrigability, fertility, acidity, and erosion factors
(Petition, Annex "L", Rollo, p. 213; Annex "U", Rollo, p. 228). This finding should be accorded respect
considering that it came from competent authority, said Department being the agency possessed
with the necessary expertise to determine suitability of lands to agriculture. The DAR Order dated
January 22, 1991 issued by respondent itself stated that the adjacent land now known as the
Batulao Resort Complex is hilly, mountainous, and with long and narrow ridges and deep gorges.
No permanent sites are planted. Cultivation is by kaingin method. This confirms the findings of the
Department of Agriculture.
Parenthetically, the foregoing finding of the Department of Agriculture also explains the validity
of the reclassification of petitioner's lands by the Sangguniang Bayan of Nasugbu, Batangas,
pursuant to Section 20 of the Local Government Code of 1991. It shows that the condition imposed
by respondent Secretary of Agrarian Reform on petitioner for withdrawing its voluntary offer to
sell Hacienda Caylaway, i. e., that the soil be unsuitable for agriculture, has been adequately met. In
fact, the DAR in its Order in Case No. A-9999-050-97, involving a piece of land also owned by
petitioner and likewise located in Caylaway, exempted it from the coverage of CARL (Order dated
May 17, 1999, Annex "D" of Petitioner's Manifestation), on these grounds.
Furthermore, and perhaps more importantly, the subject lands are within an area declared in
1975 by Presidential Proclamation No. 1520 to be part of a tourist zone. This determination was
made when the tourism prospects of the area were still for the future. The studies which led to the
land classification were relatively freer from pressures and, therefore, more objective and openminded. Respondent, however, contends that agriculture is not incompatible with the lands' being
part of a tourist zone since "agricultural production, by itself, is a natural asset and, if properly set,
can command tremendous aesthetic value in the form of scenic views and variety of countryside
profiled." (Comment, Rollo, 579).
The contention is untenable. Tourist attractions are not limited to scenic landscapes and lush
greeneries. Verily, tourism is enhanced by structures and facilities such as hotels, resorts, rest
houses, sports clubs and golf courses, all of which bind the land and render it unavailable for
cultivation. As aptly described by petitioner.
"The development of resorts, golf courses, and commercial centers is inconsistent with agricultural
development. True, there can be limited agricultural production within the context of tourism
development. However, such small scale farming activities will be dictated by, and subordinate to
the needs or tourism development. In fact, agricultural use of land within Nasugbu may cease
entirely if deemed necessary by the Department of Tourism" (Reply, Rollo, p. 400).
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The lands subject hereof, therefore, are non-agricultural. Hence, the voluntary offer to sell
Hacienda Caylaway should not be deemed an admission that the land is agricultural. Rather, the
offer was made by petitioner in good faith, believing at the time that the land could still be
developed for agricultural production. Notably, the offer to sell was made as early as May 6, 1988,
before the soil thereon was found by the Department of Agriculture to be unsuitable for agricultural
development (the Certifications were issued on 2 February 1993 and 1 March 1993). Petitioner's
withdrawal of its voluntary offer to sell, therefore, was not borne out of a whimsical or capricious
change of heart. Quite simply, the land turned out to be outside of the coverage of the CARL, which
by express provision of RA 6657. Section 4, affects only public and private agricultural lands. As
earlier stated, only on May 17, 1999, DAR Secretary Horacio Morales, Jr. approved the application
for a lot in Caylaway, also owned by petitioner, and confirmed the seven (7) documentary evidences
proving the Caylaway area to be non-agricultural (DAR Order dated 17 May 1999, in Case No. A9999-050-97, Annex "D" Manifestation).
The DAR itself has issued administrative circulars governing lands which are outside of CARP
and may not be subjected to land reform. Administrative Order No. 3, Series of 1996 declares in its
policy statement what landholdings are outside the coverage of CARP. The AO is explicit in
providing that such non-covered properties shall be reconveyed to the original transferors or
owners.
These non-covered lands are:
a.
Land, or portions thereof, found to be no longer suitable for agriculture and, therefore,
could not be given appropriate valuation by the Land Bank of the Philippines (LBP);
b.
Those were a Conversion Order has already been issued by the DAR allowing the use
of the landholding other than for agricultural purposes in accordance with Section 65 of R.A.
No. 6657 and Administrative Order No. 12, Series of 1994;
c.
Property determined to be exempted from CARP coverage pursuant to Department of
Justice Opinion Nos. 44 and 181; or
d.
Where a Presidential Proclamation has been issued declaring the subject property for
certain uses other than agricultural (Annex "F", Manifestation dated July 23, 1999).
The properties subject of this Petition are covered by the first, third and fourth categories of the
Administrative Order. The DAR has disregarded its own issuances which implement the law.
To make the picture clearer, I would like to summarize the law, regulations, ordinances, and
official acts which show beyond question that the disputed property is non-agricultural, namely:
(a) The Law. Proclamation 1520 dated November 20, 1975 is part of the law of the land. It
declares the area in and around Nasugbu, Batangas, as a Tourist Zone. It has not been
repealed, and has in fact been used by DAR to justify conversion of other contiguous and
nearby properties of other parties.
(b) Ordinances of Local Governments. Zoning ordinance of the Sangguniang Bayan of
Nasugbu, affirmed by the Sangguniang Panlalawigan of Batangas, expressly defines the
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property as tourist, not agricultural. The power to classify its territory is given by law to the
local governments.
(c) Certification of the Department of Agriculture that the property is not suitable and viable
for agriculture. The factual nature of the land, its marginal productivity and non-economic
feasibility for cultivation, are described in detail.
(d) Acts of DAR itself which approved conversion of contiguous or adjacent land into the
Batulao Resorts Complex. DAR described at length the non-agricultural nature of Batulao and
of portion of the disputed property, particularly Hacienda Caylaway.
(e) DAR Circulars and Regulations. DAR Administrative Order No. 6, Series of 1994
subscribes to the Department of Justice opinion that the lands classified as non-agricultural
before the CARP Law, June 15, 1988, are exempt from CARP. DAR Order dated January 22,
1991 led to the Batulao Tourist Area. DAR Order in Case No. H-9999-050-97, May 17, 1999,
exempted 13.5 hectares of Caylaway, similarly situated and of the same nature as Batulao,
from coverage. DAR Administrative Order No. 3, Series of 1996, if followed, would clearly
exclude subject property from coverage.
As earlier shown, DAR has, in this case, violated its own circulars, rules and regulations.
In addition to the DAR circulars and orders which DAR itself has not observed, the petitioner
has submitted a municipal map of Nasugbu, Batangas (Annex "E"; Manifestation dated July 23,
1999). The geographical location of Palico, Banilad, and Caylaway in relation to the GDFI property,
now Batulao Tourist Resort, shows that the properties subject of this case are equally, if not more
so, appropriate for conversion as the GDFI resort.
Petitioner's application for the conversion of its lands from agricultural to non-agricultural was
meant to stop the DAR from proceeding with the compulsory acquisition of the lands and to seek a
clear and authoritative declaration that said lands are outside of the coverage of the CARL and can
not be subjected to agrarian reform.
Petitioner assails respondent's refusal to convert its lands to non-agricultural use and to
recognize Presidential Proclamation 1520, stating that respondent DAR has not been consistent in
its treatment of applications of this nature. It points out that in the other case involving adjoining
lands in Nasugbu, Batangas, respondent DAR ordered the conversion of the lands upon application
of Group Developers and Financiers, Inc. Respondent DAR, in that case, issued an Order dated
January 22, 1991 denying the motion for reconsideration filed by the farmer's thereon and finding
that:
"In fine, on November 27, 1975, or before the movants filed their instant motion for
reconsideration, then President Ferdinand E. Marcos issued Proclamation No. 1520, declaring the
municipalities of Maragondon and Ternate in the province of Cavite and the municipality of
Nasugbu in the province of Batangas as tourist zone. Precisely, the landholdings in question are

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included in such proclamation. Up to now, this office is not aware that said issuance has been
repealed or amended" (Petition, Annex "W", Rollo, p. 238).
The DAR Orders submitted by petitioner, and admitted by DAR in its Rejoinder (Rejoinder of
DAR dated August 20, 1999), show that DAR has been inconsistent to the extent of being arbitrary.
Apart from the DAR Orders approving the conversion of the adjoining property now called
Batulao Resort Complex and the DAR Order declaring parcels of the Caylaway property as not
covered by CARL, a major Administrative Order of DAR may also be mentioned.
The Department of Justice in DOJ Opinion No. 44 dated March 16, 1990 (Annex "A" of
Petitioner's Manifestation) stated that DAR was given authority to approve land conversions only
after June 15, 1988 when RA 6657, the CARP Law, became effective. Following the DOJ Opinion,
DAR issued its AO No. 06, Series of 1994 providing for the Guidelines on Exemption Orders (Annex
"B", Id.). The DAR Guidelines state that lands already classified as non-agricultural before the
enactment of CARL are exempt from its coverage. Significantly, the disputed properties in this case
were classified as tourist zone by no less than a Presidential Proclamation as early as 1975, long
before 1988.
The above, petitioner maintains, constitute unequal protection of the laws. Indeed, the
Constitution guarantees that "(n)o person shall be deprived of life, liberty or property without due
process of law, nor shall any person be denied the equal protection of the laws" (Constitution, Art.
III, Sec. 1). Respondent DAR, therefore, has no alternative but to abide by the declaration in
Presidential Proclamation 1520, just as it did in the case of Group Developers and Financiers, Inc.,
and to treat petitioners' properties in the same way it did the lands of Group Developers, i.e., as part
of a tourist zone not suitable for agriculture.
On the issue of non-payment of just compensation which results in a taking of property in
violation of the Constitution, petitioner argues that the opening of a trust account in its favor did
not operate as payment of the compensation within the meaning of Section 16 (e) of RA 6657.
In Land Bank of the Philippines v. Court of Appeals, (249 SCRA 149, at 157 [1995]), this Court struck
down as null and void DAR Administrative Circular No. 9, Series of 1990, which provides for the
opening of trust accounts in lieu of the deposit in cash or in bonds contemplated in Section 16 (e) of
RA 6657.
"It is very explicit therefrom (Section 16 [e]) 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.'
xxx

xxx

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"In the present suit, the DAR clearly overstepped the limits of its powers 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 can not 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."
There being no valid payment of just compensation, title to petitioner's landholdings cannot be
validly transferred to the Government. A close scrutiny of the procedure laid down in Section 16 of
RA 6657 shows the clear legislative intent that there must first be payment of the fair value of the
land subject to agrarian reform, either directly to the affected landowner or by deposit of cash or
LBP bonds in the DAR-designated bank, before the DAR can take possession of the land and request
the register of deeds to issue a transfer certificate of title in the name of the Republic of the
Philippines. This is only proper inasmuch as title to private property can only be acquired by the
government after payment of just compensation. In Association of Small Landowners in the
Philippines v. Secretary of Agrarian Reform (175 SCRA 343, 391 [1989]), this Court held:
"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."
Necessarily, the issuance of the CLOAs by respondent DAR on October 30, 1993 and their
distribution to farmer-beneficiaries were illegal inasmuch as no valid payment of compensation for
the lands was as yet effected. By law, Certificates of Land Ownership Award are issued only to the
beneficiaries after the DAR takes actual possession of the land (RA 6657, Sec. 24), which in turn
should only be after the receipt by the landowner of payment or, in case of rejection or no response
from the landowner, after the deposit of the compensation for the land in cash or in LBP bonds (RA
6657, Sec. 16[e]).
Respondents argue that the Land Bank ruling should not be made to apply to the compulsory
acquisition of petitioner's landholdings in 1993, because it occurred prior to the promulgation of
the said decision (October 6, 1995). This is untenable. Laws may be given retroactive effect on
constitutional considerations, where the prospective application would result in a violation of a
constitutional right. In the case at bar, the expropriation of petitioner's lands was effected without a
valid payment of just compensation, thus violating the Constitutional mandate that "(p)rivate
property shall not be taken for public use without just compensation" (Constitution, Art. III, Sec. 9).
Hence, to deprive petitioner of the benefit of the Land Bank ruling on the mere expedient that it
came later than the actual expropriation would be repugnant to petitioner's fundamental rights.
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The controlling last two (2) pages of the ponencia state:
"Finally, 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. 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. In Hacienda Palico alone, CLOA's were
issued to 177 farmer beneficiaries in 1993. Since then, these farmers have been cultivating their
lands. It goes against the basic precepts of justice, fairness and equity to deprive these people,
through no fault of their own, of the land they till. Anyhow, the farmer beneficiaries hold the
property in trust for the rightful owner of the land."
I disagree with the view that this Court cannot nullify illegally issued CLOA's but must ask the
DAR to first reverse and correct itself.
Given the established facts, there was no valid transfer of petitioner's title to the Government.
This being so, there was also no valid title to transfer to third persons; no basis for the issuance of
CLOAs.
Equally important, CLOAs do not have the nature of Torrens Title. Administrative cancellation
of title is sufficient to invalidate them.
The Court of Appeals said so in its Resolution in this case. It stated:
"Contrary to the petitioner's argument that issuance of CLOAs to the beneficiaries prior to the
deposit of the offered price constitutes violation of due process, it must be stressed that the mere
issuance of the CLOAs does not vest in the farmer/grantee ownership of the land described therein.
"At most the certificate merely evidences the government's recognition of the grantee as the party
qualified to avail of the statutory mechanisms for the acquisition of ownership of the land.Thus
failure on the part of the farmer/grantee to comply with his obligations is a ground for forfeiture of
his certificate of transfer. Moreover, were there is a finding that the property is indeed not covered by
CARP, then reversion to the landowner shall consequently be made, despite issuance of CLOAs to the
beneficiaries." (Resolution dated January 17, 1997, p. 6).
DAR Administrative Order 03, Series of 1996 (issued on August 8, 1996; Annex "F" of
Petitioner's Manifestation) outlines the procedure for the reconveyance to landowners of
properties found to be outside the coverage of CARP. DAR itself acknowledges that they can
administratively cancel CLOAs if found to be erroneous. From the detailed provisions of the
Administrative Order, it is apparent that there are no impediments to the administrative
cancellation of CLOAs improperly issued over exempt properties. The procedure is followed all over
the country. The DAR Order spells out that CLOAs are not Torrens Titles. More so if they affect land
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which is not covered by the law under which they were issued. In its Rejoinder, respondent DAR.
states:
"3.2 And, finally, on the authority of DAR/DARAB to cancel erroneously issued Emancipation
Patents (EPs) or Certificate of Landownership Awards (CLOAs), same is enshrined, it is respectfully
submitted, in Section 50 of Republic Act No. 6657."
In its Supplemental Manifestation, petitioner points out, and this has not been disputed by
respondents, that DAR has also administratively cancelled twenty five (25) CLOAs covering
Nasugbu properties owned by the Manila Southcoast Development Corporation near subject Roxas
landholdings. These lands were found not suitable for agricultural purposes because of soil and
topographical characteristics similar to those of the disputed properties in this case.
The former DAR Secretary, Benjamin T. Leong, issued DAR Order dated January 22, 1991
approving the development of property adjacent and contiguous to the subject properties of this
case into the Batulao Tourist Resort. Petitioner points out that Secretary Leong, in this Order, has
decided that the land
1. Is, as contended by the petitioner GDFI "hilly, mountainous, and characterized by poor
soil condition and nomadic method of cultivation, hence not suitable to agriculture."
2. Has as contiguous properties two haciendas of Roxas y Cia and found by Agrarian Reform
Team Leader Benito Viray to be "generally rolling, hilly and mountainous and strudded (sic)
with long and narrow ridges and deep gorges. Ravines are steep grade ending in low dry
creeks."
3. Is found in an area where "it is quite difficult to provide statistics on rice and corn yields
because there are no permanent sites planted. Cultivation is by Kaingin Method."
4. Is contiguous to Roxas Properties in the same area where "the people entered the property
surreptitiously and were difficult to stop because of the wide area of the two haciendas and
that the principal crop of the area is sugar . . .." (emphasis supplied).
I agree with petitioner that under DAR AO No. 03, Series of 1996, and unlike lands covered by
Torrens Titles, the properties falling under improperly issued CLOAs are cancelled by mere
administrative procedure which the Supreme Court can declare in cases properly and adversarially
submitted for its decision. If CLOAs can under the DAR's own order be cancelled administratively,
with more reason can the courts, especially the Supreme Court, do so when the matter is clearly in
issue.
With due respect, there is no factual basis for the allegation in the motion for intervention that
farmers have been cultivating the disputed property.
The property has been officially certified as not fit for agriculture bases on slope, terrain, depth,
irrigability, fertility, acidity and erosion. DAR, in its Order dated January 22, 1991, stated that "it is
quite difficult to provide statistics on rice and corn yields (in the adjacent property) because there
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are no permanent sites planted. Cultivation is by kaingin method." Any allegations of cultivation,
feasible and viable, are therefore falsehoods.
The DAR Order on the adjacent and contiguous GDFI property states that "(T)he people entered
the property surreptitiously and were difficult to stop . . ."
The observations of Court of Appeals Justices Verzola and Magtolis in this regard, found in their
dissenting opinion (Rollo, p. 116), are relevant:
"2.9 The enhanced value of land in Nasugbu, Batangas, has attracted unscrupulous
individuals who distort the spirit of the Agrarian Reform Program in order to turn out quick
profits. Petitioner has submitted copies of CLOAs that have been issued to persons other than
those who were identified in the Emancipation Patent Survey Profile as legitimate Agrarian
Reform beneficiaries for particular portions of petitioner's lands. These persons to whom the
CLOAs were awarded, according to petitioner, are not and have never been workers in
petitioner's lands. Petitioners say they are not even from Batangas but come all the way from
Tarlac. DAR itself is not unaware of the mischief in the implementation of the CARL in some
areas of the country, including Nasugbu. In fact, DAR published a 'WARNING TO THE PUBLIC'
which appeared in the Philippine Daily Inquirer of April 15, 1994 regarding this malpractice.
"2.10.
Agrarian Reform does not mean taking the agricultural property of one and
giving it to another and for the latter to unduly benefit therefrom by subsequently
'converting' the same property into non-agricultural purposes. cdasia
"2.11.
The law should not be interpreted to grant power to the State, thru the DAR, to
choose who should benefit from multi-million peso deals involving lands awarded to
supposed agrarian reform beneficiaries who then apply for conversion and thereafter sell the
lands as non-agricultural land."
Respondents, in trying to make light of this problem, merely emphasize that CLOAs are not
titles. They state that "rampant selling of rights, should this occur, could be remedied by the
cancellation or recall by DAR.
In the recent case of "Hon. Carlos O. Fortich, et al. vs. Hon. Renato C. Corona, et al." (G.R. No.
131457, April 24, 1998), this Court found the CLOAs given to the respondent farmers to be
improperly issued and declared them invalid. Herein petitioner Roxas and Co., Inc. has presented a
stronger case than petitioners in the aforementioned case. The procedural problems especially the
need for referral to the Court of Appeals are not present. The instant petition questions the Court of
Appeals decision which acted on the administrative decisions. The disputed properties in the
present case have been declared non-agricultural not so much because of local government action
but by Presidential Proclamation. They were found to be non-agricultural by the Department of
Agriculture, and through unmistakable implication, by DAR itself. The zonification by the municipal
government, approved by the provincial government, is not the only basis.
On a final note, it may not be amiss to stress that laws which have for their object the
preservation and maintenance of social justice are not only meant to favor the poor and
underprivileged. They apply with equal force to those who, notwithstanding their more
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comfortable position in life, are equally deserving of protection from the courts. Social justice is not
a license to trample on the rights of the rich in the guise of defending the poor, where no act of
injustice or abuse is being committed against them. As we held in Land Bank (supra):
"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 to deny justice to the landowner whenever
truth and justice happen to be on his side. 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 simply because they are 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 eject 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."
IN THE LIGHT OF THE FOREGOING, I vote to grant the petition for certiorari; and to declare
Haciendas Palico, Banila and Caylaway, all situated in Nasugbu, Batangas, to be non-agricultural and
outside the scope of Republic Act No. 6657. I further vote to declare the Certificates of Land
Ownership Award issued by respondent Department of Agrarian Reform null and void and to
enjoin respondents from proceeding with the compulsory acquisition of the lands within the
subject properties. I finally vote to DENY the motion for intervention. cda
Kapunan, Quisumbing and Pardo, JJ ., concur.
Footnotes
1.

Article II, Section 1, Proclamation No. 3.

2.
Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform 175 SCRA
343, 366 [1989].
3.

Annex "2" to Comment, Rollo, p 309.

4.

Id.

5.

Annex "3" to Comment, Rollo, pp. 310-314.

6.
Annex "4" to Comment, Rollo pp. 315-315C. Unlike Annexes "3" and "5," the list of actual
occupants was not attached to the MARO Report.
7.

Annex "5" to Comment, Rollo, pp. 316-316E.

8.

Annex "7" to Comment, Rollo, p. 317.

9.

Annexes "7" and "8" to Comment, Rollo, pp. 317, 319.

10.

Annex "I" to Comment, Rollo, p. 308.

11.

Id.
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12.
Annexes "9," "10" and "11" to Comment, Rollo, pp. 320-322.
13.

Annexes "K" and "N" to Petition, Rollo, pp. 211-212, 215.

14.

Petition, p. 20, Rollo, p. 30

15.

Annexes "16, "17," "18," and "19" to Comment, Rollo, pp. 327-330.

16.

Annex "20" to Comment, Rollo, p. 331.

17.

Annex "30" to Comment, Rollo, p. 360.

18.

Id.

19.

Annex "29" to Comment, Rollo, p. 359.

20.

Annex "23" to Comment, Rollo, pp. 337-344.

21.

Annex "24" to Comment, Rollo, pp. 346-354.

22.

Minutes of the Conference/Meeting, Annex "27" to Comment, Rollo, P. 357.

23.

Annex "26" to Comment, Rollo, p. 356.

24.

Annex "25" to Comment, Rollo, p. 355.

25.

Annexes "21" and "22" to Comment, Rollo, pp. 332, 333.

26.

Id.

27.

Annex "34" to Comment, Rollo, p. 364.

28.

Annex "35" to Comment, Rollo, p. 365.

29.

Annexes "37" and "38" to Comment, Rollo, pp. 367-368.

30.
Annexes "42" and "43" to Comment, Rollo, pp. 372-374. In its Comment before this Court,
respondent DAR states that valuation of the land under TCT No. T-44662 had not been completed,
while the land under TCT No. T-44665 was not distributed due to errors in the qualifications of the
farmer beneficiaries Comment, p. 16, Rollo, p. 587.
31.

Id.

32.

Annexes "44" and "45" to Comment, Rollo, pp. 374, 375.

33.

Annexes "46" and "47" to Comment, Rollo, pp. 376, 377.

34.

Annex "S" to Petition, Rollo, pp. 223-224.

35.

Petition, p. 24, Rollo, p. 34.

36

Annexes "K" and "N" to Petition, Rollo, pp. 211-212, 215.

37.

Annex "V" to Petition, Rollo, pp. 229-230.

38.

Petition, p. 27, Rollo, p. 37.

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39.
The CA decision was penned by Justice Gloria C. Paras and concurred in by Justices Serafin
Guingona and Eubulo Verzola.
40.
The Resolution was penned by Justice Paras and concurred in by Justices Jainal Rasul (viceJ.
Guingona who retired) and Portia Hormachuelos, Justice Verzola wrote a dissenting opinion which
Justice Delilah Magtolis joined.
41.

Petition, pp. 28-99, Rollo, pp. 38-39.

42.
Corona v. Court of Appeals, 214 SCRA 378, 393 [1992]; Sunville Timber Products, Inc. v.
Abad, 206 SCRA 482, 487 [1992]; Quisumbing v. Gumban, 193 SCRA 520, 523-524 [1991].
43.

Section 24, R.A. 6657.

44.
Association of Small Landowners of the Philippines v. DAR Secretary, 175 SCRA 343, 391
[1989].
45.

Land Bank of the Philippines v. Court of Appeals, 249 SCRA 149, 157 [1995].

46.

Prefatory Statement, DAR Administrative Order No. 12, Series of 1989.

47.

Now repealed by Administrative Order No. 17, Series of 1989.

48.

Id., at 174-175.

49.

Id., at 175-177.

50.
Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform, 175
SCRA 343, 373-374 [1989].
51.

Id.

52.

Section 1, Article III, 1987 Constitution.

53.

Development Bank of the Philippines v. Court of Appeals, 262 SCRA 245, 253 [1996].

54.
Prior to DAR A.O. No. 9, Series of 1990, VOS transactions were governed by A.O. No. 3, Series
of 1989 and A.O. No. 19, Series of 1989 while CA transactions were governed by A.O. No. 12, Series
of 1989.
55.

The DENR's participation was added by DAR A.O. No. 9, Series of 1990.

56.
The Department of Agriculture became part of the field investigation team. Under A.O. No. 9,
Series of 1990, a representative of the DA was merely invited to attend the conference or public
hearing.
57.

Annex "2" to Comment, Rollo, p. 309.

58.

Id.

59.

Annex "27" to Comment, Rollo, p. 357.

60.

Comment, p. 16, Rollo, p. 587.

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61.
Petition, p. 5, Rollo, p. 15.
62.

R. Martin, Civil Procedure, p. 461 [1989].

63.

Delta Motors Sales Corp. vs. Mangosing, 70 SCRA 598, 603 [1976].

64.
Lee v. Court of Appeals, 205 SCRA 752, 765 [1992]; G & G Trading Corp. v. Court of Appeals,
158 SCRA 466, 468 [1988]; Villa Rey Transit, Inc. v. Far East Motor Corp., 81 SCRA 298, 303 [1978].
65.
Delta Motors Sales Corp. vs. Mangosing, supra, at 603; Rebollido v. Court of Appeals, 170
SCRA 800, 809-810, [1989].
66.
See Notice of Acquisition for Hacienda Palico, Annex "1" to Comment, Rollo, p. 308; see
alsoMARO Investigation Reports, Annexes "3", "4", "5" to Respondent's Comment, Rollo, pp. 310,
315, 316; Annexes "6", "7", "8" to Respondent's Comment, Rollo, pp. 317-319.
67.
See Notices of Acquisition for Hacienda Banilad, Annexes "21" and "22" to Comment, Rollo, p.
332, 333.
68.
See Notice of Acquisition for Hacienda Palico, Annex "1" to Comment, Rollo, p. 308; Notices of
Acquisition for Hacienda Banilad, Annexes "21" and "22" to Comment, Rollo, p. 332, 333.
69.

Paragraph 5 (b),Part IV-B, A.O. 9, Series of 1990.

70.

Rejoinder of Respondents, pp. 3-4, Rollo, pp. 434-435.

71.
Annexes "12" to "15" to Respondents' Comment, Rollo, pp. 361-363; Annexes "31" to "33" to
Respondents' Comment, Rollo, pp. 324-326.
72.

Petition, p. 23, Rollo, p. 33.

73.
VOS transactions were later governed by A.O. No. 9, Series of 1990, and A.O No. 1, Series of
1993 both also covering lands subject to Compulsory Acquisition.
74.

Section 5, E.O. 229.

75.

Annexes "42" and "43" to Comment, Rollo, pp. 372-374.

76.

Sur-rejoinder, p. 3.

77.

Annexes "39" and "40" to Comment, Rollo, pp. 369-370.

78.

Petition, p. 37, Rollo, p. 47.

79.

Petition, pp. 38-39, Rollo, pp. 48-49; Supplemental Manifestation, p. 3.

80.

Petition, p. 25, Rollo, p. 35; Annex "U" to the Petition, Rollo, p. 228.

81.

Annex "E" to Petition, Rollo, p. 124.

82.

Attached to Annex "E," Rollo, pp. 125-200.

83.

Id.
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84.
Annex "F" to Petition, Rollo, p. 201.
85.

Manifestation, pp. 3-4; Supplemental Manifestation, p. 4.

86.

Manifestation, p. 4; Supplemental Manifestation, p. 5.

87.

Part II, DAR A.O. No. 7, Series of 1997.

88.

Prefatory Statement, DAR A.O. No. 7, Series of 1997.

89.

Part III, E, F, DAR A.O. No. 7, Series of 1997.

90.

Par. 3, C. Part VIII; Part XIV, DAR A.O. No. 7, Series of 1997.

91.
First Lepanto Ceramics, Inc. v. Court of Appeals, 253 SCRA 552, 558 [1996]; Machete v. Court
of Appeals, 250 SCRA 176, 182 [1995]; Vidad v. Regional Trial Court of Negros Oriental, 227 SCRA
271, 276 [1990].
92.

Motion for Intervention, pp. 1-5, Rollo, pp. 452-456.

93.

Id.

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#3 G.R. NO. 78517

SECOND DIVISION

[G.R. No. 78517. February 27, 1989.]

GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO RICALDE, VICENTE RICALDE and
ROLANDO SALAMAR, petitioners, vs. THE HONORABLE COURT OF APPEALS, ENRIQUE M.
REYES, PAZ M. REYES and FE M. REYES,respondents.

Bureau of Agrarian Legal Assistance for petitioners.

Leonardo N . Zulueta for Enrique Reyes, et al.
Adolfo S. Azcuna for private respondents.

SYLLABUS

1.
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)
2.
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
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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."

DECISION

PARAS, J p:
Before Us is a petition seeking the reversal of the decision rendered by the respondent Court of
Appeals ** on March 3, 1987 affirming the judgment of the court a quo dated April 29, 1986, the
dispositive portion of the trial court's decision reading as follows;
"WHEREFORE, the decision rendered by this Court on November 5, 1982 is hereby reconsidered
and a new judgment is hereby rendered:
"1.

Declaring that Presidential Decree No. 27 is inapplicable to lands obtained thru the homestead

law;
"2.

Declaring that the four registered co-owners will cultivate and operate the farmholding

themselves as owners thereof; and

"3.

Ejecting from the land the so-called 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.
"No pronouncement as to costs.
SO ORDERED." (p. 31, Rollo)
The facts are undisputed. 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 herein are desirous of personally cultivating these lands, but petitioners
refuse to vacate, relying on the provisions of P.D. 27 and P.D. 316 and appurtenant regulations
issued by the then Ministry of Agrarian Reform (MAR for short), now Department of Agrarian
Reform (DAR for short).
On June 18, 1981, 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

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Decrees, Letters of Instructions and General Orders issued in connection therewith as inapplicable
to homestead lands.
Defendants filed their answer with special and affirmative defenses of July 8, 1981.
Subsequently, on July 19, 1982, 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.
On November 5, 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.
On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which defendants
filed their opposition on January 10, 1983.
Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted decision prompting
defendants to move for a reconsideration but the same was denied in its Order dated June 6, 1986.
On appeal to the respondent Court of Appeals, the same was sustained in its judgment rendered
on March 3, 1987, thus:
"WHEREFORE, finding no reversible error thereof, the decision appealed from is hereby AFFIRMED.
"SO ORDERED." (p. 34, Rollo)
Hence, the present petition for review on certiorari.
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)

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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."
WHEREFORE, premises considered, the decision of the respondent Court of Appeals sustaining
the decision of the Regional Trial Court is hereby AFFIRMED.
SO ORDERED.
Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur.
Footnotes
**
Penned by Justice Jorge R. Coquia and concurred in by Justices Josue N. Bellosillo and
Venancio D. Aldecoa, Jr. of the Fourth Division.

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#4 G.R. NO. 103302

EN BANC

[G.R. No. 103302. August 12, 1993.]

NATALIA REALTY, INC., and ESTATE DEVELOPERS AND INVESTORS

CORP.,petitioners, vs. DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and
DIR. WILFREDO LEANO, DAR-REGION IV, respondents.

Loni M. Patajo for petitioners.

The Solicitor General for respondents.

SYLLABUS

1.
POLITICAL LAW; STATUTORY CONSTRUCTION; A SPECIAL LAW PREVAILS OVER A
GENERAL LAW. The implementing Standards, Rules and Regulations of P.D. 957 applied to
all subdivisions and condominiums in general. On the other hand, Presidential Proclamation
No. 1637 referred only to the Lungsod Silangan Reservation, which makes it a special law. It
is a basic tenet in statutory construction that between a general law and a special law, the
latter prevails (National Power Corporation v. Presiding Judge, RTC, Br. XXV, G.R. No. 72477,
16 October 1990, 190 SCRA 477).
2.
ID.; ADMINISTRATIVE LAW; NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES,
JUSTIFIED IN THE CASE AT BAR. Anent the argument that there was failure to exhaust
administrative remedies in the instant petition, suffice it to say that the issues raised in the
case filed by SAMBA members differ from those of petitioners. The former involve
possession; the latter, the propriety of including under the operation of CARL lands already
converted for residential use prior to its effectivity. Besides, petitioners were not supposed to
wait until public respondents acted on their letter-protests, this after sitting it out for almost
a year. Given the official indifference, which under the circumstances could have continued
forever, petitioners had to act to assert and protect their interests. (Rocamora v. RTC-Cebu,
Br. VIII, G.R. No. 65037, 23 November 1988, 167 SCRA 615).
3.
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
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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 nonagricultural 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.

DECISION

BELLOSILLO, J p:
Are lands already classified for residential, commercial or industrial use, as approved by the
Housing and Land Use Regulatory Board and its precursor agencies 1 prior to 15 June
1988, 2 covered by R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of
1988? This is the pivotal issue in this petition for certiorari assailing the Notice of Coverage 3 of the
Department of Agrarian Reform over parcels of land already reserved as townsite areas before the
enactment of the law.
Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous
parcels of land located in Banaba, Antipolo, Rizal, with areas of 120.9793 hectares, 1.3205 hectares
and 2.7080 hectares, or a total of 125.0078 hectares, and embraced in Transfer Certificate of Title
No. 31527 of the Register of Deeds of the Province of Rizal.

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On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land located
in the Municipalities of Antipolo, San Mateo and Montalban as townsite areas to absorb the
population overspill in the metropolis which were designated as the Lungsod Silangan Townsite.
The NATALIA properties are situated within the areas proclaimed as townsite reservation.
Since private landowners were allowed to develop their properties into low-cost housing
subdivisions within the reservation, petitioner Estate Developers and Investors Corporation (EDIC,
for brevity), as developer of NATALIA properties, applied for and was granted preliminary approval
and locational clearances by the Human Settlements Regulatory Commission. The necessary permit
for Phase I of the subdivision project, which consisted of 13.2371 hectares, was issued sometime in
1982; 4 for Phase II, with an area of 80.0000 hectares, on 13 October 1983; 5 and for Phase III,
which consisted of the remaining 31.7707 hectares, on 25 April 1986. 6 Petitioners were likewise
issued development permits 7 after complying with the requirements. Thus the NATALIA properties
later became the Antipolo Hills Subdivision.
On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of
1988" (CARL, for brevity), went into effect. Conformably therewith, respondent Department of
Agrarian Reform (DAR, for brevity), through its Municipal Agrarian Reform Officer, issued on 22
November 1990 a Notice of Coverage on the undeveloped portions of the Antipolo Hills Subdivision
which consisted of roughly 90.3307 hectares. NATALIA immediately registered its objection to the
Notice of Coverage.
EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and
twice wrote him requesting the cancellation of the Notice of Coverage.
On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc. (SAMBA, for
brevity), filed a complaint against NATALIA and EDIC before the DAR Regional Adjudicator to
restrain petitioners from developing areas under cultivation by SAMBA members. 8 The Regional
Adjudicator temporarily restrained petitioners from proceeding with the development of the
subdivision. Petitioners then moved to dismiss the complaint; it was denied. Instead, the Regional
Adjudicator issued on 5 March 1991 a Writ of Preliminary Injunction.
Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB);
however, on 16 December 1991 the DARAB merely remanded the case to the Regional Adjudicator
for further proceedings. 9
In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request
to set aside the Notice of Coverage. Neither respondent Secretary nor respondent Director took
action on the protest-letters, thus compelling petitioners to institute this proceeding more than a
year thereafter.
NATALIA and EDIC both impute grave abuse of discretion to respondent DAR for including
undeveloped portions of the Antipolo Hills Subdivision within the coverage of the CARL. They argue
that NATALIA properties already ceased to be agricultural lands when they were included in the
areas reserved by presidential fiat for townsite reservation.

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Public respondents through the Office of the Solicitor General dispute this contention. They
maintain that the permits granted petitioners were not valid and binding because they did not
comply with the implementing Standards, Rules and Regulations of P.D. 957, otherwise known as
"The Subdivision and Condominium Buyers' Protective Decree," in that no application for
conversion of the NATALIA lands from agricultural 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.
The petition is impressed with merit. A cursory reading of the Preliminary Approval and
Locational Clearances as well as the Development Permits granted petitioners for Phases I, II and III
of the Antipolo Hills Subdivision reveals that contrary to the claim of public respondents,
petitioners NATALIA and EDIC did in fact comply with all the requirements of law.
Petitioners first secured favorable recommendations from the Lungsod Silangan Development
Corporation, the agency tasked to oversee the implementation of the development of the townsite
reservation, before applying for the necessary permits from the Human Settlements Regulatory
Commission. 10 And, in all permits granted to petitioners, the Commission stated invariably therein
that the applications were in "conformance" 11 or "conformity" 12 or "conforming" 13 with the
implementing Standards, Rules and Regulations of P.D. 957. Hence, the argument of public
respondents that not all of the requirements were complied with cannot be sustained. llcd
As a matter of fact, there was even no need for petitioners to secure a clearance or prior
approval from DAR. The NATALIA properties were within the areas set aside for the Lungsod
Silangan Reservation. Since Presidential Proclamation No. 1637 created the townsite reservation
for the purpose of providing additional housing to the burgeoning population of Metro Manila, it in
effect converted for residential use what were erstwhile agricultural lands provided all requisites
were met. And, in the case at bar, there was compliance with all relevant rules and requirements.
Even in their applications for the development of the Antipolo Hills Subdivision, the predecessor
agency of HLURB noted that petitioners NATALIA and EDIC complied with all the requirements
prescribed by P.D. 957
The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions and
condominiums in general. On the other hand, Presidential Proclamation No. 1637 referred only to
the Lungsod Silangan Reservation, which makes it a special law. It is a basic tenet in statutory
construction that between a general law and a special law, the latter prevails. 14
Interestingly, the Office of the Solicitor General does not contest the conversion of portions of
the Antipolo Hills Subdivision which have already been developed. 15 Of course, this is contrary to
its earlier position that there was no valid conversion. The applications for the developed and
undeveloped portions of subject subdivision were similarly situated. Consequently, both did not
need prior DAR approval.
We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657
provides that the CARL shall "cover, regardless of tenurial arrangement and commodity produced,
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all public and private agricultural lands." As to what constitutes "agricultural land," it is referred to
as "land devoted to agricultural activity as defined in this Act and not classified as mineral, forest,
residential, commercial or industrial land. 16 The deliberations of the Constitutional Commission
confirm this limitation. "Agricultural lands" are only those lands which are "arable and suitable
agricultural lands" and "do not include commercial, industrial and residential lands." 17
Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills
Subdivision cannot in any language be considered as "agricultural lands." These lots were intended
for residential use. They ceased to be agricultural lands upon approval of their inclusion in the
Lungsod Silangan Reservation. Even today, the areas in question 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, 18 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 19 that lands covered by Presidential Proclamation No. 1637, inter alia,
of which the NATALIA lands are part, having been reserved for townsite purposes "to be developed
as human settlements by the proper land and housing agency," are "not deemed 'agricultural lands'
within the meaning and intent of Section 3 (c) of R.A. No. 6657." Not being deemed "agricultural
lands," they are outside the coverage of CARL.
Anent the argument that there was failure to exhaust administrative remedies in the instant
petition, suffice it to say that the issues raised in the case filed by SAMBA members differ from
those of petitioners. The former involve possession; the latter, the propriety of including under the
operation of CARL lands already converted for residential use prior to its effectivity.
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Besides, petitioners were not supposed to wait until public respondents acted on their letterprotests, this after sitting it out for almost a year. Given the official indifference, which under the
circumstances could have continued forever, petitioners had to act to assert and protect their
interests. 20
In fine, we rule for petitioners and hold that public respondents gravely abused their discretion
in issuing the assailed Notice of Coverage 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.
SO ORDERED.
Narvasa, C . J., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon,
Melo, Quiason, Puno and Vitug, JJ., concur.
Footnotes
1.
National Housing Authority and Human Settlements Regulatory Commission; see C. T. Torres
v. Hibionada, G.R. No. 80916, 9 November 1990, 191 SCRA 268.
2.
Date of effectivity of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law
of 1988.
3.

Annex "H", Petition; Rollo, p. 33.

4.

Annex "A", Petition; Rollo, p. 26.

5.

Annex "C", Petition; Rollo, p. 28.

6.

Annex "E", Petition; Rollo, p. 30.

7.

Annexes "B", "D" and "F", Petition; Rollo, pp. 27, 29 and 31.

8.

Complaint, p. 3; Rollo, p. 68.

9.

DARAB Resolution, 16 December 1991, p. 8; Rollo, p. 82.

10.
Renamed Housing and Land Use Regulatory Board (HLURB) per E.O. No. 90, dated 17
December 1986.
11.

Annexes "A" and "C", Petition; Rollo, pp. 26 and 28.

12.

Annex "B", Petition; Rollo, p. 27.

13

Annexes "D" and "E", Petition; Rollo, pp. 29-30.

14.
National Power Corporation v. Presiding Judge, RTC, Br. XXV, G.R. No. 72477, 16 October
1990, 190 SCRA 477.
15.

Comment, p. 8; Rollo, p. 63.

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16.
Sec. 3 (c), R.A. 6657.
17.
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.
18.

DAR Administrative Order No. 1, Series of 1990.

19.

Opinion No. 181, Series of 1990.

20.

Rocamora v. RTC-Cebu, Br. VIII, G.R. No. 65037, 23 November 1988, 167 SCRA 615.

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#5 G.R. NO. 86889

EN BANC

[G.R. No. 86889. December 4, 1990.]

LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN
REFORM, respondent.

Enrique M. Belo for petitioner.

DECISION

PARAS, J p:
This is a petition for prohibition with prayer for restraining order and/or preliminary and
permanent injunction against the Honorable Secretary of the Department of Agrarian Reform for
acting without jurisdiction in enforcing the assailed provisions of R.A. No. 6657, otherwise known
as the Comprehensive Agrarian Reform Law of 1988 and in promulgating the Guidelines and
Procedure Implementing Production and Profit Sharing under R.A. No. 6657, insofar as the same
apply to herein petitioner, and further from performing an act in violation of the constitutional
rights of the petitioner.
As gathered from the records, the factual background of this case, is as follows:
On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes the
raising of livestock, poultry and swine in its coverage (Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and
Procedures Implementing Production and Profit Sharing as embodied in Sections 13 and 32 of R.A.
No. 6657 (Rollo, p. 80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and Regulations
implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).
Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry
business and together with others in the same business allegedly stands to be adversely affected by
the enforcement of Section 3(b), Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A.
No. 6657 otherwise known as Comprehensive Agrarian Reform Law and of the Guidelines and
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Procedures Implementing Production and Profit Sharing under R.A. No. 6657 promulgated on
January 2, 1989 and the Rules and Regulations Implementing Section 11 thereof as promulgated by
the DAR on January 9, 1989 (Rollo, pp. 2-36).
Hence, this petition praying that aforesaid laws, guidelines and rules be declared
unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or restraining
order be issued enjoining public respondents from enforcing the same, insofar as they are made to
apply to Luz Farms and other livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms'
prayer for the issuance of a preliminary injunction in its Manifestation dated May 26, and 31, 1989.
(Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said
Motion for Reconsideration regarding the injunctive relief, after the filing and approval by this
Court of an injunction bond in the amount of P100,000.00. This Court also gave due course to the
petition and required the parties to file their respective memoranda (Rollo, p. 119).
The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).
On December 22, 1989, the Solicitor General adopted his Comment to the petition as his
Memorandum (Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply to
it:
(a)

Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of

"Agricultural, Agricultural Enterprise or Agricultural Activity."

(b)

Section 11 which defines "commercial farms" as "private agricultural lands devoted to

commercial, livestock, poultry and swine raising . . ."

(c)

Section 13 which calls upon petitioner to execute a production-sharing plan.

(d)

Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to

summarily determine the just compensation to be paid for lands covered by the Comprehensive
Agrarian Reform Law.
(e)

Section 32 which spells out the production-sharing plan mentioned in Section 13

". . . (W)hereby three percent (3%) of the gross sales from the production
of such lands are distributed within sixty (60) days of the end of the fiscal year as
compensation to regular and other farmworkers in such lands over and above the
compensation they currently receive: Provided, That these individuals or entities
realize gross sales in excess of five million pesos per annum unless the DAR, upon
proper application, determine a lower ceiling.

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In the event that the individual or entity realizes a profit, an additional ten
(10%) of the net profit after tax shall be distributed to said regular and other
farmworkers within ninety (90) days of the end of the fiscal year . . ."
The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No.
6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes the
raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and
Guidelines promulgated in accordance therewith.
The constitutional provision under consideration reads as follows:
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"

Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In fact, it
acknowledges the correctness of the decision of this Court in the case of the Association of Small
Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform (G.R. 78742, 14 July 1989)
affirming the constitutionality of the Comprehensive Agrarian Reform Law. It, however, argued that
Congress in enacting the said law has transcended the mandate of the Constitution, in including
land devoted to the raising of livestock, poultry and swine in its coverage (Rollo, p. 131). Livestock
or poultry raising is not similar to crop or tree farming. Land is not the primary resource in this
undertaking and represents no more than five percent (5%) of the total investment of commercial
livestock and poultry raisers. Indeed, there are many owners of residential lands all over the
country who use available space in their residence for commercial livestock and raising purposes,
under "contract-growing arrangements," whereby processing corporations and other commercial
livestock and poultry raisers (Rollo, p. 10). Lands support the buildings and other amenities
attendant to the raising of animals and birds. The use of land is incidental to but not the principal
factor or consideration in productivity in this industry. Including backyard raisers, about 80% of
those in commercial livestock and poultry production occupy five hectares or less. The remaining
20% are mostly corporate farms (Rollo, p. 11).
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On the other hand, the public respondent argued that livestock and poultry raising is embraced
in the term "agriculture" and the inclusion of such enterprise under Section 3(b) of R.A. 6657 is
proper. He cited that Webster's International Dictionary, Second Edition (1954), defines the
following words:
"Agriculture the art or science of cultivating the ground and raising and harvesting crops, often,
including also, feeding, breeding and management of livestock, tillage, husbandry, farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock domestic animals used or raised on a farm, especially for profit.
Farm a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp. 8283).
The petition is impressed with merit.
The question raised is one of constitutional construction. The primary task in constitutional
construction is to ascertain and thereafter assure the realization of the purpose of the framers in
the adoption of the Constitution (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413
[1970]).
Ascertainment of the meaning of the provision of Constitution begins with the language of the
document itself. The words used in the Constitution are to be given their ordinary meaning except
where technical terms are employed in which case the significance thus attached to them prevails
(J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).
It is generally held that, in construing constitutional provisions which are ambiguous or of
doubtful meaning, the courts may consider the debates in the constitutional convention as throwing
light on the intent of the framers of the Constitution. It is true that the intent of the convention is
not controlling by itself, but as its proceeding was preliminary to the adoption by the people of the
Constitution the understanding of the convention as to what was meant by the terms of the
constitutional provision which was the subject of the deliberation, goes a long way toward
explaining the understanding of the people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183
[1974]).
The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning
of the word "agricultural," clearly show that it was never the intention of the framers of the
Constitution to include livestock and poultry industry in the coverage of the constitutionallymandated agrarian reform program of the Government.
The Committee adopted the definition of "agricultural land" as defined under Section 166 of
R.A. 3844, as laud devoted to any growth, including but not limited to crop lands, saltbeds,
fishponds, idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).
The intention of the Committee is to limit the application of the word "agriculture."
Commissioner Jamir proposed to insert the word "ARABLE" to distinguish this kind of agricultural
land from such lands as commercial and industrial lands and residential properties because all of
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them fall under the general classification of the word "agricultural". This proposal, however, was
not considered because the Committee contemplated that agricultural lands are limited to arable
and suitable agricultural lands and therefore, do not include commercial, industrial and residential
lands (Record, CONCOM, August 7, 1986, Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed
several questions, among others, quoted as follows:
xxx

xxx

xxx

"Line 19 refers to genuine reform program founded on the primary right of farmers and
farmworkers. I wonder if it means that leasehold tenancy is thereby proscribed under this
provision because it speaks of the primary right of farmers and farmworkers to own directly or
collectively the lands they till. As also mentioned by Commissioner Tadeo, farmworkers include
those who work in piggeries and poultry projects.
I was wondering whether I am wrong in my appreciation that if somebody puts up a piggery or a
poultry project and for that purpose hires farmworkers therein, these farmworkers will
automatically have the right to own eventually, directly or ultimately or collectively, the land on
which the piggeries and poultry projects were constructed. (Record, CONCOM, August 2, 1986, p.
618).
xxx

xxx

xxx

The questions were answered and explained in the statement of then Commissioner Tadeo,
quoted as follows:
xxx

xxx

xxx

"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Ipinaaalam ko kay
Commissioner Regalado na hindi namin inilagay ang agricultural worker sa kadahilanang kasama
rito ang piggery, poultry at livestock workers. Ang inilagay namin dito ay farm worker kaya hindi
kasama ang piggery, poultry at livestock workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621).
It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private
agricultural lands devoted to commercial livestock, poultry and swine raising" in the definition of
"commercial farms" is invalid, to the extent that the aforecited agro-industrial activities are made to
be covered by the agrarian reform program of the State. There is simply no reason to include
livestock and poultry lands in the coverage of agrarian reform. (Rollo, p. 21).
Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of R.A.
6657 directing "corporate farms" which include livestock and poultry raisers to execute and
implement "production-sharing plans" (pending final redistribution of their landholdings) whereby
they are called upon to distribute from three percent (3%) of their gross sales and ten percent
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(10%) of their net profits to their workers as additional compensation is unreasonable for being
confiscatory, and therefore violative of due process (Rollo, p. 21).
It has been established that this Court will assume jurisdiction over a constitutional question
only if it is shown that the essential requisites of a judicial inquiry into such a question are first
satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights
susceptible of judicial determination, the constitutional question must have been opportunely
raised by the proper party, and the resolution of the question is unavoidably necessary to the
decision of the case itself (Association of Small Landowners of the Philippines, Inc. v. Secretary of
Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v.
Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted with constitutional
issues, it will not hesitate to declare a law or act invalid when it is convinced that this must be done.
In arriving at this conclusion, its only criterion will be the Constitution and God as its conscience
gives it in the light to probe its meaning and discover its purpose. Personal motives and political
considerations are irrelevancies that cannot influence its decisions. Blandishment is as ineffectual
as intimidation, for all the awesome power of the Congress and Executive, the Court will not
hesitate "to make the hammer fall heavily," where the acts of these departments, or of any official,
betray the people's will as expressed in the Constitution (Association of Small Landowners of the
Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v.
Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of its constitutional powers, it
becomes the duty of the judiciary to declare what the other branches of the government had
assumed to do, as void. This is the essence of judicial power conferred by the Constitution "(I)n one
Supreme Court and in such lower courts as may be established by law" (Art. VIII, Section 1 of the
1935 Constitution; Article X, Section I of the 1973 Constitution and which was adopted as part of
the Freedom Constitution, and Article VIII, Section 1 of the 1987 Constitution) and which power
this Court has exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and 32
of R.A. No. 6657 insofar as the inclusion of the raising of livestock, poultry and swine in its coverage
as well as the Implementing Rules and Guidelines promulgated in accordance therewith, are hereby
DECLARED null and void for being unconstitutional and the writ of preliminary injunction issued is
hereby MADE permanent.
SO ORDERED.
Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Padilla, Bidin, GrioAquino, Medialdea and Regalado, JJ., concur.
Feliciano, J., is on leave.

Separate Opinions
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SARMIENTO, J., concurring:
I agree that the petition be granted.
It is my opinion however that the main issue on the validity of the assailed provisions of R.A.
6657 (the Comprehensive Agrarian Reform Law of 1988) and its Implementing Rules and
Guidelines insofar as they include the raising of livestock, poultry, and swine in their coverage can
not be simplistically reduced to a question of constitutional construction.
It is a well-settled rule that construction and interpretation come only after it has been
demonstrated that application is impossible or inadequate without them. A close reading however
of the constitutional text in point, specifically, Sec. 4, Art. XIII, particularly the phrase, ". . . in case of
other farmworkers, to receive a just share of the fruits thereof," provides a basis for the clear and
possible coverage of livestock, poultry, and swine raising within the ambit of the comprehensive
agrarian reform program. This accords with the principle that every presumption should be
indulged in favor of the constitutionality of a statute and the court in considering the validity of a
statute should give it such reasonable construction as can be reached to bring it within the
fundamental law. 1
The presumption against unconstitutionality, I must say, assumes greater weight when a ruling
to the contrary would, in effect, defeat the laudable and noble purpose of the law, i.e., the welfare of
the landless farmers and farmworkers in the promotion of social justice, by the expedient
conversion of agricultural lands into livestock, poultry, and swine raising by scheming landowners,
thus, rendering the comprehensive nature of the agrarian program merely illusory.
The instant controversy, I submit, boils down to the question of whether or not the assailed
provisions violate the equal protection clause of the Constitution (Article II, section 1) which
teaches simply that all persons or things similarly situated should be treated alike, both as to rights
conferred and responsibilities imposed. 2
There is merit in the contention of the petitioner that substantial distinctions exist between
land directed purely to cultivation and harvesting of fruits or crops and land exclusively used for
livestock, poultry and swine raising, that make real differences, to wit:
xxx

xxx

xxx

No land is tilled and no crop is harvested in livestock and poultry farming. There are no tenants nor
landlords, only employers and employees.
Livestock and poultry do not sprout from land nor are they "fruits of the land."
Land is not even a primary resource in this industry. The land input is inconsequential that all the
commercial hog and poultry farms combined occupy less than one percent (1%) (0.4% for piggery,
0.2% for poultry) of the 5.45 million hectares of land supposedly covered by the CARP. And most
farms utilize only 2 to 5 hectares of land.
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In every respect livestock and poultry production is an industrial activity. Its use of an
inconsequential portion of land is a mere incident of its operation, as in any other undertaking,
business or otherwise.
The fallacy of defining livestock and poultry production as an agricultural enterprise is nowhere
more evident when one considers that at least 95% of total investment in these farms is in the form
of fixed assets which are industrial in nature.
These include (1) animal housing structures and facilities complete with drainage, waterers,
blowers, misters and in some cases even piped-in music; (2) feedmills complete with grinders,
mixers, conveyors, exhausts, generators, etc.; (3) extensive warehousing facilities for feeds and
other supplies; (4) anti-pollution equipment such as bio-gas and digester plants augmented by
lagoons and concrete ponds; (5) deepwells, elevated water tanks, pumphouses and accessory
facilities; (6) modern equipment such as sprayers, pregnancy testers, etc.; (7) laboratory facilities
complete with expensive tools and equipment; and a myriad other such technologically advanced
appurtances.
How then can livestock and poultry farmlands be arable when such are almost totally occupied by
these structures?
The fallacy of equating the status of livestock and poultry farmworkers with that of agricultural
tenants surfaces when one considers contribution to output. Labor cost of livestock and poultry
farms is no more than 4% of total operating cost. The 98% balance represents inputs not obtained
from the land nor provided by the farmworkers inputs such as feeds and biochemicals (80% of
the total cost), power cost, cost of money and several others.
Moreover, livestock and poultry farmworkers are covered by minimum wage law rather than by
tenancy law. They are entitled to social security benefits where tenant-farmers are not. They are
paid fixed wages rather than crop shares. And as in any other industry, they receive additional
benefits such as allowances, bonuses, and other incentives such as free housing privileges, light and
water.
Equating livestock and poultry farming with other agricultural activities is also fallacious in the
sense that like the manufacturing sector, it is a market for, rather than a source of agricultural
output. At least 60% of the entire domestic supply of corn is absorbed by livestock and poultry
farms. So are the by-products of rice (rice-bran), coconut (copra meal), banana (banana pulp meal),
and fish (fish meal).

xxx

xxx

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In view of the foregoing, it is clear that both kinds of lands are not similarly situated and hence,
can not be treated alike. Therefore, the assailed provisions which allow for the inclusion of livestock
and poultry industry within the coverage of the agrarian reform program constitute invalid
classification and must accordingly be struck down as repugnant to the equal protection clause of
the Constitution.
Footnotes
SARMIENTO, J., concurring:
1.

In re Guarina, 24 Phil. 37; Yu Cong Eng v. Trinidad, 70 L. ed., p. 1059.

2.

Ichong v. Hernandez, 101 Phil. 1155.

3.

Rollo, 29-30.

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#6 G.R. NO. 162070

EN BANC

[G.R. No. 162070. October 19, 2005.]

DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY JOSE MARI B. PONCE

(OIC), petitioner, vs. DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN and HARRY T.
SUTTON, respondents.

DECISION

PUNO, J p:
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.
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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 7partially
granting the application of respondents for exemption from the coverage of CARL. Applying the
retention limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of respondents'
land for grazing purposes, and a maximum of 102.5635 hectares for infrastructure. Petitioner
ordered the rest of respondents' landholding to be segregated and placed under Compulsory
Acquisition.
Respondents moved for reconsideration. They contend that their entire landholding should be
exempted as it is devoted exclusively to cattle-raising. Their motion was denied. 8They 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 cattleraising. 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 Reform's ruling that
petitioners' landholding is covered by the agrarian reform program of the government
isREVERSED and SET ASIDE.
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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.
Petitioner's 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. 12They 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, antipollution equipment like bio-gas and digester plants augmented by lagoons and concrete ponds,
deepwells, elevated water tanks, pumphouses, sprayers, and other technological appurtenances. 15
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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. 18Petitioner 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.
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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.
Davide, Jr., C.J., Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, AustriaMartinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Tinga, Chico-Nazario and Garcia, JJ., concur.
Footnotes
1.
This is a transaction entered into by the landowner and the government, thru the DAR, the
purchase price of the land being the one agreed upon between them, and paid by the Land Bank of
the Philippines. Under E.O. No. 229, such transactions shall be exempt from the payment of the
capital gains tax and other taxes and fees. As an additional incentive, Section 19 of the CARP gives to
landowners who voluntarily offer to sell their land an additional five percent (5%) cash payment.
2.

192 SCRA 51 (1990).

3.

CA Rollo, pp. 65-66.

4.

Id., pp. 67-68.

5.

Id., pp. 57-62.

6.

Id., pp. 69-71.

7.

Id., pp. 72-76.

8.

Order, dated October 5, 1995; CA Rollo, pp. 87-89.

9.

O.P. Case No. 96-A-6361.

10.

CA Rollo, pp. 50-54.

11.
CA Decision dated September 19, 2003, penned by Associate Justice Buenaventura J.
Guerrero and concurred in by Associate Justices Andres B. Reyes, Jr. and Regalado E.
Maambong;Rollo, pp. 32-43.
12.

Administrative Law and Process in a Nutshell, Gellhorn and Levin, 1990 ed., p. 315.

13.

Pagpalain Haulers, Inc. v. Trajano, 310 SCRA 354 (1999).

14.

Conte v. Commission on Audit, 264 SCRA 19 (1996).

15.

Luz Farms case, supra, p. 61.

16.

225 SCRA 278 (1993).

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17.
This same ruling was adapted on February 21, 1995 by then Executive Secretary Teofisto
Guingona, Jr., by authority of the President, in his Decision exempting from the coverage of agrarian
reform the landholdings of Golden Country Farms, Inc., used in its cattle, swine and poultry
operations. See O.P. Case No. 5454, CA Rollo, pp. 103-111.
18.

Opposition to Respondent's Motion for Reconsideration, pp. 310-311.

19.

Administrative Law, A Text, Reginald Parker, p. 157.

20.

Enacted on July 25, 1994.

21.

Sections 1 and 3 of R.A. No. 7881.

22.

Conte v. Commission on Audit, supra.

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#7 G.R. NO. 182332

Republic of the Philippines
Supreme Court
Manila

SECOND DIVISION

MILESTONE FARMS, INC.,

Petitioner,

G.R. No. 182332

Present:
CARPIO, J.,
Chairperson,
NACHURA,
PERALTA,
ABAD, and
VILLARAMA, JR.,* JJ.

- versus -

Promulgated:
OFFICE OF THE PRESIDENT,
Respondent.

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

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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) M7314, 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:

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[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]

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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. M6013, 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
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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 farmergroups Samahang Anak-Pawis ng Lagundi (SAPLAG) and Pinugay Farmers, and the Bureau of
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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

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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 Decisiondated 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 farmergroups, 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-residentialcommercial 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;
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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
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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.

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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 farmersmovants 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]mersmovants 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]

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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
FARMSAND 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
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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;
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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

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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
The Petition is bereft of merit.

Let it be stressed that when the CA provided in its first Decision that continuing review and
verification may be conducted by the DAR pursuant to DAR A.O. No. 9, the latter was not yet
declared unconstitutional by this Court. The first CA Decision was promulgated on April 29, 2005,
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
assailed MARO reports and certification on June 15, 2005, which proved to be adverse to
petitioners case. Thus, it could not be said that the CA erred or gravely abused its discretion in
respecting the mandate of DAR A.O. No. 9, which was then subsisting and in full force and effect.

While it is true that an issue which was neither alleged in the complaint nor raised during
the trial cannot be raised for the first time on appeal as it would be offensive to the basic rules of
fair play, justice, and due process,[54] the same is not without exception,[55] such as this case. The CA,
under Section 3,[56] Rule 43 of the Rules of Civil Procedure, can, in the interest of justice, entertain
and resolve factual issues. After all, technical and procedural rules are intended to help secure, and
not suppress, substantial justice. A deviation from a rigid enforcement of the rules may thus be
allowed to attain the prime objective of dispensing justice, for dispensation of justice is the core
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
petitioner to file its comment on the Supplement, and to prove and establish its claim that the
subject property was excluded from the coverage of the CARP.Petitioner actively participated in the
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
recognized.

With the procedural issue disposed of, we find that petitioners arguments fail to persuade. Its
invocation of Sutton is unavailing. In Sutton, we held:
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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.
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

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the subject parcels of land were not directly, actually, and exclusively used for pasture.[63]
Petitioners admission that, since 2001, it leased another ranch for its own livestock is 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 alleged
illegal acts. Moreover, we accord respect to the CAs keen observation that the assailed MARO
reports and the Investigating Teams Report do not actually contradict one another, finding that the
43 cows, while owned by petitioner, were actually pastured outside the subject property.
`
Finally, it is established that issues of Exclusion and/or Exemption are characterized as
Agrarian Law Implementation (ALI) cases which are well within the DAR Secretarys competence
and jurisdiction.[65] Section 3, Rule II of the 2003 Department of Agrarian Reform Adjudication
Board Rules of Procedure provides:
Section 3. Agrarian Law Implementation Cases.
The Adjudicator or the Board shall have no jurisdiction over matters
involving the administrative implementation of RA No. 6657, otherwise known as
the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws
as enunciated by pertinent rules and administrative orders, which shall be under
the exclusive prerogative of and cognizable by the Office of the Secretary of the DAR
in accordance with his issuances, to wit:
xxxx
3.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and
poultry raising.

Thus, we cannot, without going against the law, arbitrarily strip the DAR Secretary of his legal
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 time the CARL took effect, the use and disposition of that land is entirely and
forever beyond DARs 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 on the factual circumstances of each case and in accordance with law
and applicable jurisprudence. In addition, albeit parenthetically, Secretary Villa had already granted
the conversion into residential and golf courses use of nearly one-half of the entire area originally
claimed as exempt from CARP coverage because it was allegedly devoted to livestock production.

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In sum, we find no reversible error in the assailed Amended Decision and Resolution of the CA
which would warrant the modification, much less the reversal, thereof.

WHEREFORE, the Petition is DENIED and the Court of Appeals Amended Decision dated
October 4, 2006 and Resolution dated March 27, 2008 are AFFIRMED. No costs.
SO ORDERED.

ANTONIO EDUARDO B. NACHURA Associate Justice

WE CONCUR:
ANTONIO T. CARPIO

Associate Justice
Chairperson

DIOSDADO M. PERALTA
Associate Justice

ROBERTO A. ABAD
Associate Justice

MARTIN S. VILLARAMA, JR.

Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.
ANTONIO T. CARPIO

Associate Justice
Chairperson, Second Division

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CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I
certify that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

Additional member in lieu of Associate Justice Jose Catral Mendoza per Raffle dated February 21,
2011.
[1] Rollo, pp. 67-98.
[2] Penned by Associate Justice Noel G. Tijam, with Associate Justices Jose L. Sabio, Jr. and Japar B.
Dimaampao, concurring; id. at 26-45.
[3] Id. at 47-63.
[4] CA rollo, p. 103.
[5] Id. at 105-109.
[6] G.R. No. 86889, December 4, 1990, 192 SCRA 51.
[7] CA rollo, p. 102.
[8] Id. at 620-621.
[9] Id. at 624-626.
[10] Id. at 901.
[11] Docketed as CA-G.R. SP No. 43678, penned by Associate Justice Portia Alio-Hormachuelos, with
Associate Justices Buenaventura J. Guerrero and Remedios A. Salazar-Fernando, concurring; id. at
916-929.
[12] Id. at 931-932.
[13] Entitled An Act Amending Certain Provisions of Republic Act No. 6657, Entitled An Act Instituting A
Comprehensive Agrarian Reform Program to Promote Social Justice and Industrialization, Providing
the Mechanism for its Implementation, and for Other Purposes.
*

CA rollo, pp. 656-662.

Id. at 660.
[16] Id. at 665-676.
[17] Id. at 750-761.
[18] Id. at 762-780.
[19] Id. at 82-89.
[20] Id. at 74-81.
[21] Id. at 80.
[22] Id. at 11-71.
[23] Rollo, pp. 23-24.
[24] CA rollo, pp. 1281-1291.
[14]
[15]

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[25] Id. at 1099-1108.
[26] Id. at 1110-1112.
[27] Id. at 1117-1125.
[28] Id. at 1174-1180.
[29] Supra note 24.
[30] CA rollo, pp. 1184-1185.
[31] Id. at 1186.
[32] Id. at 1321-1324 and 1330-1332.
[33] Id. at 1359-1360.
[34] Id. at 1406-1409 and 1410-1416.
[35] Supra note 28, at 1180.
[36] 510 Phil. 177 (2005).
[37] CA rollo, p. 1353.
[38] Id. at 1464-1467.
[39] Supra note 2, at 45.
[40] CA rollo, pp.1502-1514.
[41] Exhibit D-2; CAs Folder of Exhibits.
[42] Exhibits E-1 to E-3; id.
[43] Also referred to as Roger Lobedesis in other pleadings and documents.
[44] CA rollo, p. 1656.
[45] Supra note 3, at 52-53.
[46] Supra note 3.
[47] Sec. 50 of R.A. No. 6657 provides:
Sec. 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 (DA) and the Department of
Environment and Natural Resources (DENR).
[48] Supra note 3, at 61.
[49] Supra note 1, at 79-80.
[50] Id.
[51] Rollo, pp. 2223-2237.
[52] Id. at 2512-2558.
[53] Id. at 2473-2481 and 2602-2615.
[54] Dosch v. NLRC, et al., 208 Phil. 259, 272 (1983).
[55] DOH v. C.V. Canchela & Associates, Architects (CVCAA), 511 Phil. 654, 670 (2005).
[56] Section 3 of Rule 43 of the 1997 Rules of Civil Procedure provides:
SEC. 3. Where to appeal. An appeal under this Rule may be taken to the Court of Appeals
within the period and in the manner herein provided, whether the appeal involves questions of fact,
of law, or mixed questions of fact and law.
[57] Phil. Coconut Authority v. Corona International, Inc., 395 Phil. 742, 750 (2000), citing Acme Shoe,
Rubber and Plastic Corp. v. CA, G.R. No. 103576, August 22, 1996, 260 SCRA 714, 719.
[58] Zacarias v. National Police Commission, G.R. No. 119847, October 24, 2003, 414 SCRA 387, 393.
[59] Supra note 36, at 183-184. (Emphasis supplied.)
[60] Id. at 185.
[61] G.R. No. 169277, February 9, 2007, 515 SCRA 376, 401-402.
[62] G.R. No. 170623, July 7, 2010.
[63] This Court takes note that DAR, with respect to our ruling in Sutton, issued DAR A.O. No. 07,
Series of 2008, entitled Guidelines relative to the Supreme Court Ruling on the Sutton Case regarding
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lands which are actually, directly and exclusively used for Livestock Raising, which provides that the
property must be actually, directly and exclusively used as a livestock farm for it to be exempted.
[64] TSN, April 24, 2007, pp. 18 and 76.
[65] Sta. Ana v. Carpo, G.R. No. 164340, November 28, 2008, 572 SCRA 463, 482.

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#8 G.R. NO. 100091

EN BANC

[G.R. No. 100091. October 22, 1992.]

CENTRAL MINDANAO UNIVERSITY REPRESENTED BY ITS PRESIDENT DR. LEONARDO A.

CHUA, petitioner, vs. THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, THE
COURT OF APPEALS AND ALVIN OBRIQUE, REPRESENTING BUKIDNON FREE FARMERS
AGRICULTURAL LABORERS ORGANIZATION (BUFFALO), respondents.

Abundio L. Okit for petitioner.

Cabanlas, Resma & Cabanlas Law Office for respondent Obrique, et al.

SYLLABUS

1.
LABOR LAW; TENANCY; TENANTS' CLAIM OF BEING LANDLESS REQUIRES PROOFS.
Complainants claim that they are landless peasants. This allegation requires proof and
should not be accepted as factually true. Obrique is not a landless peasant. The facts showed
he was a Physics Instructor at CMU holding a very responsible position and was separated
from the service on account of certain irregularities he committed while Assistant Director of
the Agri-Business Project of cultivating lowland rice. Others may, at the moment, own no land
in Bukidnon but they may not necessarily be so destitute in their places of origin. No proof
whatsoever appears in the record to show that they are landless peasants.
2.
ID.; ID.; SQUATTERS CANNOT CLAIM RIGHT UNDER CARP. After the expiration of
their privilege to occupy and cultivate the land of the CMU, their continued stay was
unauthorized and their settlement on the CMU's land was without legal authority. A person
entering upon lands of another, not claiming in good faith the right to do so by virtue of any
title of his own, or by virtue of some agreement with the owner or with one whom he
believes holds title to the land, is a squatter. Squatters cannot enter the land of another
surreptitiously or by stealth, and under the umbrella of the CARP, claim rights to said
property as landless peasants. Under Section 73 of R.A. 6657, persons guilty of committing
prohibited acts of forcible entry or illegal detainer do not qualify as beneficiaries and may not
avail themselves of the rights and benefits of agrarian reform. Any such person who

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knowingly and wilfully violates the above provision of the Act shall be punished with
imprisonment or fine at the discretion of the Court.
3.
ID.; ID.; NEITHER DARAB OR COURT OF APPEALS HAS RIGHT TO PASS UPON NEEDS
OF SCHOOL. As to the determination of when and what lands arefound to be necessary for
use by the CMU, the school is in the best position to resolve and answer the question and pass
upon the problem of its needs in relation to its avowed objectives for which the land was
given to it by the State. Neither the DARAB nor the Court of Appeals has the right to
substitute its judgment or discretion on this matter, unless the evidentiary facts are so
manifest as to show that the CMU has no real need for the land.
4.
ID.; ID.; DARAB; JURISDICTION; LIMITED ONLY TO MATTERS INVOLVING
IMPLEMENTATION OF CARP. Under Section 4 and Section 10 of R.A. 6657, it is crystal
clear that the jurisdiction of the DARAB is limited only to matters involving the
implementation of the CARP. More specifically, it is restricted to agrarian cases and
controversies involving lands falling within the coverage of the aforementioned program. It
does not include those which are actually, directly and exclusively used and found to be
necessary for, among such purposes, school sites and campuses for setting up experimental
farm stations, research and pilot production centers, etc.Consequently, the DARAB has no
power to try, hear and adjudicate the case pending before it involving a portion of the CMU's
titled school site, as the portion of the CMU land reservation ordered segregated is actually,
directly and exclusively used and found by the school to be necessary for its purposes.
5.
ID.; ID.; ID.; AGRARIAN DISPUTE, DEFINED. There is no doubt that the DARAB has
jurisdiction to try and decide any agrarian dispute in the implementation of the CARP. An
agrarian dispute is defined by the same law as any controversy relating to tenurial rights
whether leasehold, tenancy stewardship or otherwise over lands devoted to agriculture.
6.
ID.; ID.; ID.; SEGREGATING SOME HECTARES OF LAND WITHOUT FINDING THAT
COMPLAINANTS ARE TENANTS, GRAVE ABUSE OF DISCRETION. Where the quasi-judicial
body finds that the complainants/petitioners are not entitled to the rights they are
demanding, it is an erroneous interpretation of authority for that quasi-judicial body to order
private property to be awarded to future beneficiaries. The order segregating 400 hectares of
the CMU land was issued on a finding that the complainants are not entitled as beneficiaries,
and on an erroneous assumption that the CMU land which is excluded or exempted under the
law is subject to the coverage of the CARP. Going beyond what was asked by the
complainants who were not entitled to the relief prayed for, constitutes a grave abuse of
discretion because it implies such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction.
7.
ID.; ID.; NEITHER EDUCATION OF THE YOUTH OR AGRARIAN REFORM NEED GIVE
WAY TO THE OTHER. The education of the youth and agrarian reform are admittedly
among the highest priorities in the government socio-economic programs. In this case,
neither need give way to the other. Certainly, there must still be vast tracts of agricultural
land in Mindanao outside the CMU land reservation which can be made available to landless
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peasants, assuming the claimants here, or some of them, can qualify as CARP beneficiaries. To
our mind, the taking of the CMU land which had been segregated for educational purposes for
distribution to yet uncertain beneficiaries is a gross misinterpretation of the authority and
jurisdiction granted by law to the DARAB.

DECISION

CAMPOS, JR., J p:
This is a Petition for Review on Certiorari under Rule 65 of the Rules of Court to nullify the
proceedings and decision of the Department of Agrarian Reform Adjudication Board (DARAB for
brevity) dated September 4, 1989 and to set aside the decision * of the Court of Appeals dated
August 20, 1990, affirming the decision of the DARAB which ordered the segregation of 400
hectares of suitable, compact and contiguous portions of the Central Mindanao University (CMU for
brevity) land and their inclusion in the Comprehensive Agrarian Reform Program (CARP for
brevity) for distribution to qualified beneficiaries, on the ground of lack of jurisdiction.
This case originated in a complaint filed by complainants calling themselves as the Bukidnon
Free Farmers and Agricultural Laborers Organization (BUFFALO for brevity) under the leadership
of Alvin Obrique and Luis Hermoso against the CMU, before the Department of Agrarian Reform for
Declaration of Status as Tenants, under the CARP.
From the records, the following facts are evident. The petitioner, the CMU, is an agricultural
education institution owned and run by the estate located in the town of Musuan, Bukidnon
province. It started as a farm school at Marilag, Bukidnon, in early 1910, in response to the public
demand for an agricultural school in Mindanao. It expanded into the Bukidnon National
Agricultural High School and was transferred to its new site in Managok near Malaybalay, the
provincial capital of Bukidnon.
In the early 1960's, it was converted into a college with campus at Musuan, until it became what
is now known as the CMU, but still primarily an agricultural university. From its beginning, the
school was the answer to the crying need for training people in order to develop the agricultural
potential of the island of Mindanao. Those who planned and established the school had a vision as
to the future development of that part of the Philippines. On January 16, 1958 the President of the
Republic of the Philippines, the late Carlos P. Garcia, "upon the recommendation of the Secretary of
Agriculture and Natural Resources, and pursuant to the provisions of Section 53, of Commonwealth
Act No. 141, as amended", issued Proclamation No. 467, withdrawing from sale or settlement and
reserving for the Mindanao Agricultural College, a site which would be the future campus of what is
now the CMU. A total land area comprising 3,080 hectares was surveyed and registered and titled in
the name of the petitioner under OCT Nos. 160, 161 and 162. 1
In the course of the cadastral hearing of the school's petition for registration of the
aforementioned grant of agricultural land, several tribes belonging to cultural communities,
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opposed the petition claiming ownership of certain ancestral lands forming part of the tribal
reservations. Some of the claims were granted so that what was titled to the present petitioner
school was reduced from 3,401 hectares to 3,080 hectares.
In the early 1960's, the student population of the school was less than 3,000. By 1988, the
student population had expanded to some 13,000 students, so that the school community has an
academic population (student, faculty and non-academic staff) of almost 15,000. To cope with the
increase in its enrollment, it has expanded and improved its education facilities partly from
government appropriation and partly by self-help measures.
True to the concept of a land grant college, the school embarked on self-help measures to carry
out its educational objectives, train its students, and maintain various activities which he
government appropriation could not adequately support or sustain. In 1984, the CMU approved
Resolution No. 160, adopting a livelihood program called "Kilusang Sariling Sikap Program" under
which the land resources of the University were leased to its faculty and employees. This
arrangement was covered by a written contract. Under this program, the faculty and staff combine
themselves to groups of five members each, and the CMU provided technical know-how, practical
training and all kinds of assistance, to enable each group to cultivate 4 to 5 hectares of land for the
lowland rice projects. Each group pays the CMU a service fee and also a land use participant's fee.
The contract prohibits participants and their hired workers to establish houses or live in the project
area and to use the cultivated land as a collateral for any kind of loan. It was expressly stipulated
that no landlord-tenant relationship existed between the CMU and the faculty and/or employees.
This particular program was conceived as a multi-disciplinary applied research extension and
productivity program to utilize available land, train people in modern agricultural technology and
at the same time give the faculty and staff opportunity within the confines of the CMU reservation
to earn additional income to augment their salaries. The location of the CMU at Musuan, Bukidnon,
which is quite a distance from the nearest town, was the proper setting for the adoption of such a
program. Among the participants in this program were Alvin Obrique, Felix Guinanao, Joven
Caballero, Nestor Pulao, Danilo Vasquez, Aronio Pelayo and other complainants. Obrique was a
Physics Instructor at the CMU while the others were employees in the lowland rice project. The
other complainants who were not members of the faculty or non-academic staff of the CMU, were
hired workers or laborers of the participants in this program. When petitioner Dr. Leonardo Chua
became President of the CMU in July 1986, he discontinued the agri-business project for the
production of rice, corn and sugar cane known as Agri-Business Management and Training Project,
due to losses incurred while carrying on the said project. Some CMU personnel, among whom were
the complainants, were laid-off when this project was discontinued. As Assistant Director of this
agri-business project, Obrique was found guilty of mishandling the CMU funds and was separated
from service by virtue of Executive Order No. 17, the re-organization law of the CMU.
Sometime in 1986, under Dr. Chua as President, the CMU launched a self-help project called
CMU-Income Enhancement Program (CMU-IEP) to develop unutilized land resources, mobilize and
promote the spirit of self-reliance, provide socio-economic and technical training in actual field
project implementation and augment the income of the faculty and the staff.

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Under the terms of a 3-party Memorandum of Agreement 2 among the CMU, the CMU-Integrated
Development Foundation (CMU-IDF) and groups of "seldas" of 5 CMU employees, the CMU would
provide the use of 4 to 5 hectares of land to a selda for one (1) calendar year. The CMU-IDF would
provide researchers and specialists to assist in the preparation of project proposals and to monitor
and analyze project implementation. The selda in turn would pay to the CMU P100 as service fee
and P1,000 per hectare as participant's land rental fee. In addition, 400 kilograms of the produce
per year would be turned over or donated to the CMU-IDF. The participants agreed not to allow
their hired laborers or members of their family to establish any house or live within the vicinity of
the project area and not to use the allocated lot as collateral for a loan. It was expressly provided
that no tenant-landlord relationship would exist as a result of the Agreement.
Initially, participation in the CMU-IEP was extended only to workers and staff members who
were still employed with the CMU and was not made available to former workers or employees. In
the middle of 1987, to cushion the impart of the discontinuance of the rice, corn and sugar cane
project on the lives of its former workers, the CMU allowed them to participate in the CMU-IEP as
special participants.
Under the terms of a contract called Addendum To Existing Memorandum of Agreement
Concerning Participation To The CMU-Income Enhancement Program, 3 a former employee would
be grouped with an existing selda of his choice and provided one (1) hectare for a lowland rice
project for one (1) calendar year. He would pay the land rental participant's fee of P1,000.00 per
hectare but on a charge-to-crop basis. He would also be subject to the same prohibitions as those
imposed on the CMU employees. It was also expressly provided that no tenant-landlord
relationship would exist as a result of the Agreement.
The one-year contracts expired on June 30, 1988. Some contracts were renewed. Those whose
contracts were not renewed were served with notices to vacate.
The non-renewal of the contracts, the discontinuance of the rice, corn and sugar can project, the
loss of jobs due to termination or separation from the service and the alleged harassment by school
authorities, all contributed to, and precipitated the filing of, the complaint.
On the basis of the above facts, the DARAB found that the private respondents were not tenants
and cannot therefore be beneficiaries under the CARP. At the same time, the DARAB ordered the
segregation of 400 hectares of suitable, compact and contiguous portions of the CMU land and their
inclusion in the CARP for distribution to qualified beneficiaries.
The petitioner CMU, in seeking a review of the decisions of the respondents DARAB and the
Court of Appeals, raised the following issues:
1.) Whether or not the DARAB has jurisdiction to hear and decide Case No. 005 for
Declaration of Status of Tenants and coverage of land under the CARP.
2.) Whether or not respondent Court of Appeals committed serious errors and grave abuse
of discretion amounting to lack of jurisdiction in dismissing the Petition for Review on
Certiorari and affirming the decision of DARAB.
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In their complaint, docketed as DAR Case No. 5, filed with the DARAB, complainants Obrique, et.
al. claimed that they are tenants of the CMU and/or landless peasants claiming/occupying a part of
portion of the CMU situated at Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon, consisting of
about 1,200 hectares. We agree with the DARAB's finding that Obrique, et. al. are not tenants. Under
the terms of the written agreement signed by Obrique, et. al., pursuant to the livelihood program
called "Kilusang Sariling Sikap Program", it was expressly stipulated that no landlord-tenant
relationship existed between the CMU and the faculty and staff (participants in the project). The
CMU did not receive any share from the harvest/fruits of the land tilled by the participants. What
the CMU collected was a nominal service fee and land use participant's fee in consideration of all
the kinds of assistance given to the participants by the CMU. Again, the agreement signed by the
participants under the CMU-IEP clearly stipulated that no landlord-tenant relationship existed, and
that the participants are not share croppers nor lessees, and the CMU did not share in the produce
of the participants' labor.
In the same paragraph of their complaint, complainants claim that they are landless peasants.
This allegation requires proof and should not be accepted as factually true. Obrique is not a landless
peasant. The facts showed he was a Physics Instructor at CMU holding a very responsible position
and was separated from the service on account of certain irregularities he committed while
Assistant Director of the Agri-Business Project of cultivating lowland rice. Others may, at the
moment, own no land in Bukidnon but they may not necessarily be so destitute in their places of
origin. No proof whatsoever appears in the record to show that they are landless peasants.
The evidence on record establish without doubt that the complainants were originally
authorized or given permission to occupy certain areas of the CMU property for a definite purpose
to carry out certain university projects as part of the CMU's program of activities pursuant to its
avowed purpose of giving training and instruction in agricultural and other related technologies,
using the land and other resources of the institution as laboratory for these projects. Their entry
into the land of the CMU was with the permission and written consent of the owner, the CMU, for a
limited period and for a specified purpose. After the expiration of their privilege to occupy and
cultivate the land of the CMU, their continued stay was unauthorized and their settlement on the
CMU's land was without legal authority. A person entering upon lands of another, not claiming in
good faith the right to do so by virtue of any title of his own, or by virtue of some agreement with
the owner or with one whom he believes holds title to the land, is a squatter. 4 Squatters cannot
enter the land of another surreptitiously or by stealth, and under the umbrella of the CARP, claim
rights to said property as landless peasants. Under Section 73 of R.A. 6657, persons guilty of
committing prohibited acts of forcible entry or illegal detainer do not qualify as beneficiaries and
may not avail themselves of the rights and benefits of agrarian reform. Any such person who
knowingly and wilfully violates the above provision of the Act shall be punished with imprisonment
or fine at the discretion of the Court.
In view of the above, the private respondents, not being tenants nor proven to be landless
peasants, cannot qualify as beneficiaries under the CARP.
The questioned decision of the Adjudication Board, affirmed in toto by the Court of Appeals,
segregating 400 hectares from the CMU land is primarily based on the alleged fact that the land
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subject hereof is "not directly, actually and exclusively used for school sites, because the same was
leased to Philippine Packing Corporation (now Del Monte Philippines)".
In support of this view, the Board held that the "respondent University failed to show that it is
using actually, really, truly and in fact, the questioned area to the exclusion of others, nor did it
show that the same is directly used without any intervening agency or person", 5 and "there is no
definite and concrete showing that the use of said lands are essentially indispensable for
educational purposes". 6 The reliance by the respondents Board and Appellate Tribunal on the
technical or literal definition from Moreno's Philippine Law Dictionary and Black's Law Dictionary,
may give the ordinary reader a classroom meaning of the phrase "is actually directly and
exclusively", but in so doing they missed the true meaning of Section 10, R.A. 6657, as to what lands
are exempted or excluded from the coverage of the CARP.
The pertinent provisions of R.A. 6657, otherwise known as the Comprehensive Agrarian
Reform Law of 1988, are as follows:.
SECTION 4.

Scope. The Comprehensive Agrarian Reform Law of 1988 shall cover,

regardless of tenurial arrangement and commodity produced, all public an 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 for 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 10.

Exemptions and Exclusions. Lands actually, directly and exclusively used and

found to be necessary for parks, wildlife, forest reserves, reforestation, fish sanctuaries and
breeding grounds, watersheds and mangroves, national defense, school sites and campuses including
experimental farm stations operated by public or private schools for educational purposes, seeds and
seedlings research and pilot production centers, church sites and convents appurtenant thereto,
mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries,
penal colonies and penal farms actually worked by the inmates, government and private research

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and quarantine centers and all lands with eighteen percent (18%) slope and over, except those
already developed shall be exempt from the coverage of this Act. (Emphasis supplied).
The construction given by the DARAB to Section 10 restricts the land area of the CMU to its
present needs or to a land area presently, actively exploited and utilized by the university in
carrying out its present education program with its present student population and academic
facility overlooking the very significant factor of growth of the university in the years to come. By
the nature of the CMU, which is a school established to promote agriculture and industry, the need
for a vast tract of agricultural land for future programs of expansion is obvious. At the outset, the
CMU was conceived in the same manner as land grant colleges in America, a type of educational
institution which blazed the trail for the development of vast tracts of unexplored and undeveloped
agricultural lands in the Mid-West. What we now know as Michigan State University, Penn State
University and Illinois State University, started as small land grant colleges, with meager funding to
support their ever increasing educational programs. They were given extensive tracts of
agricultural and forest lands to be developed to support their numerous expanding activities in the
fields of agricultural technology and scientific research. Funds for the support of the educational
programs of land grant colleges came from government appropriation, tuition and other student
fees, private endowments and gifts, and earnings from miscellaneous sources. 7 It was in this same
spirit that President Garcia issued Proclamation No. 476, withdrawing from sale or settlement and
reserving for the Mindanao Agricultural College (forerunner of the CMU) a land reservation of
3,080 hectares as its future campus. It was set up in Bukidnon, in the hinterlands of Mindanao, in
order that it can have enough resources and wide open spaces to grow as an agricultural
educational institution, to develop and train future farmers of Mindanao and help attract settlers to
that part of the country. LLjur
In line with its avowed purpose as an agricultural and technical school, the University adopted
a land utilization program to develop and exploit its 3,080-hectares land reservation as
follows: [ix]8
No. of Hectares
a.
b.
c.
d.
e.
f.
g.

Livestock and Pasture

Upland Crops
Campus and Residential
sites
Irrigated rice
Watershed and forest
reservation
Fruit and Tree Crops
Agricultural
Experimental stations

1,016.40
616
462
400.40
308
154
123.20

3,080.00
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Percentage
33
20

15
13
10
5
4

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The first land use plan of the CMU was prepared in 1975 and since then it has undergone
several revisions in line with changing economic conditions, national economic policies and
financial limitations and availability of resources. The CMU, through Resolution No. 160 S. 1984,
pursuant to its development plan, adopted a multidisciplinary applied research extension and
productivity program called the "Kilusang Sariling Sikap Project" (CMU-KSSP). The objectives 9 of
this program were:
1. Provided researchers who shall assist in (a) preparation of proposal; (b) monitor
project implementation; and (c) collect and analyze all data and information relevant to the
processes and results of project implementation;
2. Provide the use of land within the University reservation for the purpose of establishing
a lowland rice project for the party of the Second Part for a period of one calendar year
subject to discretionary renewal by the Party of the First Part;
3. Provide practical training to the Party of the Second Part on the management and
operation of their lowland project upon request of Party of the Second Part; and
4. Provide technical assistance in the form of relevant livelihood project specialists who
shall extend expertise on scientific methods of crop production upon request by Party of the
Second Part.
In return for the technical assistance extended by the CMU, the participants in a project pay a
nominal amount as service fee. The self-reliance program was an adjunct to the CMU's lowland rice
project. .
The portion of the CMU land leased to the Philippine Packing Corporation (now Del Monte
Phils., Inc.) was leased long before the CARP was passed. The agreement with the Philippine
Packing Corporation was not a lease but a Management and Development Agreement, a joint
undertaking where use by the Philippine Packing Corporation of the land was part of the CMU
research program, with the direct participation of faculty and students. Said contracts with the
Philippine Packing Corporation and others of a similar nature (like MM-Agraplex) were made prior
to the enactment of R.A. 6657 and were directly connected to the purpose and objectives of the
CMU as an educational institution. As soon as the objectives of the agreement for the joint use of the
CMU land were achieved as of June 1988, the CMU adopted a blue print for the exclusive use and
utilization of said areas to carry out its own research and agricultural experiments.
As to the determination of when and what lands are found to be necessary for use by the CMU,
the school is in the best position to resolve and answer the question and pass upon the problem of
its needs in relation to its avowed objectives for which the land was given to it by the State. Neither
the DARAB nor the Court of Appeals has the right to substitute its judgment or discretion on this
matter, unless the evidentiary facts are so manifest as to show that the CMU has no real need for the
land.
It is our opinion that the 400 hectares ordered segregated by the DARAB and affirmed by the
Court of Appeals in its Decision dated August 20, 1990, is not covered by the CARP because:
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(1) It is not alienable and disposable land of the public domain;
(2)

The CMU land reservation is not in excess of specific limits as determined by Congress;

(3)

It is private land registered and titled in the name of its lawful owner, the CMU;

(4) It is exempt from coverage under Section 10 of R.A. 6657 because the lands are actually,
directly and exclusively used and found to be necessary for school site and campus, including
experimental farm stations for educational purposes, and for establishing seed and seedling
research and pilot production centers. (Emphasis).
Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the jurisdiction of the DARAB
is limited only to matters involving the implementation of the CARP. More specifically, it is
restricted to agrarian cases and controversies involving lands falling within the coverage of the
aforementioned program. It does not include those which are actually, directly and exclusively used
and found to be necessary for, among such purposes, school sites and campuses for setting up
experimental farm stations, research and pilot production centers, etc.
Consequently, the DARAB has no power to try, hear and adjudicate the case pending before it
involving a portion of the CMU's titled school site, as the portion of the CMU land reservation
ordered segregated is actually, directly and exclusively used and found by the school to be
necessary for its purposes. The CMU has constantly raised the issue of the DARAB's lack of
jurisdiction and has questioned the respondent's authority to hear, try and adjudicate the case at
bar. Despite the law and the evidence on record tending to establish that the fact that the DARAB
had no jurisdiction, it made the adjudication now subject of review.
Whether the DARAB has the authority to order the segregation of a portion of a private
property titled in the name of its lawful owner, even if the claimant is not entitled as a beneficiary,
is an issue we feel we must resolve. The quasi-judicial powers of the DARAB are provided in
Executive Order No. 129-A, quoted hereunder in so far as pertinent to the issue at bar:
SECTION 13.

Agrarian Reform Adjudication Board. There is hereby created an Agrarian

Reform Adjudication Board under the Office of the Secretary . . . The Board shall assume the powers
and functions with respect to adjudication of agrarian reform cases under Executive Order 229 and
this Executive Order . . .
SECTION 17.

Quasi Judicial Powers of the DAR. The DAR is hereby vested with quasi-judicial

powers to determine and adjudicate agrarian reform matters and shall have exclusive original
jurisdiction over all matters including implementation of Agrarian Reform.
Section 50 of R.A. 6657 confers on the DAR quasi-judicial powers as follows:
The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform
matters and shall have original jurisdiction over all matters involving the implementation of
agrarian reform . . .
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Section 17 of Executive Order No. 129-A is merely a repetition of Section 50, R.A. 6657. There is
no doubt that the DARAB has jurisdiction to try and decide any agrarian dispute in the
implementation of the CARP. An agrarian dispute is defined by the same law as any controversy
relating to tenurial rights whether leasehold, tenancy stewardship or otherwise over lands
devoted to agriculture. 10
In the case at bar, the DARAB found that the complainants are not share tenants or lease
holders of the CMU, yet it ordered the "segregation of a suitable compact and contiguous area of
Four Hundred Hectares, more or less", from the CMU land reservation, and directed the DAR
Regional Director to implement its order of segregation. Having found that the complainants in this
agrarian dispute for Declaration of Tenancy Status are not entitled to claim as beneficiaries of the
CARP because they are not share tenants or leaseholders, its order for the segregation of 400
hectares of the CMU land was without legal authority. We do not believe that the quasi-judicial
function of the DARAB carries with it greater authority than ordinary courts to make an award
beyond what was demanded by the complainants/petitioners, even in an agrarian dispute. Where
the quasi-judicial body finds that the complainants/petitioners are not entitled to the rights they
are demanding, it is an erroneous interpretation of authority for that quasi-judicial body to order
private property to be awarded to future beneficiaries. The order segregating 400 hectares of the
CMU land was issued on a finding that the complainants are not entitled as beneficiaries, and on an
erroneous assumption that the CMU land which is excluded or exempted under the law is subject to
the coverage of the CARP. Going beyond what was asked by the complainants who were not entitled
to the relief prayed for, constitutes a grave abuse of discretion because it implies such capricious
and whimsical exercise of judgment as is equivalent to lack of jurisdiction.
The education of the youth and agrarian reform are admittedly among the highest priorities in
the government socio-economic programs. In this case, neither need give way to the other.
Certainly, there must still be vast tracts of agricultural land in Mindanao outside the CMU land
reservation which can be made available to landless peasants, assuming the claimants here, or
some of them, can qualify as CARP beneficiaries. To our mind, the taking of the CMU land which had
been segregated for educational purposes for distribution to yet uncertain beneficiaries is a gross
misinterpretation of the authority and jurisdiction granted by law to the DARAB.
The decision in this case is of far-reaching significance as far as it concerns state colleges and
universities whose resources and research facilities may be gradually eroded by misconstruing the
exemptions from the CARP. These state colleges and universities are the main vehicles for our
scientific and technological advancement in the field of agriculture, so vital to the existence, growth
and development of this country.
It is the opinion of this Court, in the light of the foregoing analysis and for the reasons indicated,
that the evidence is sufficient to sustain a finding of grave abuse of discretion by respondents Court
of Appeals and DAR Adjudication Board. We hereby declare the decision of the DARAB dated
September 4, 1989 and the decision of the Court of Appeals dated August 20, 1990, affirming the
decision of the quasi-judicial body, as null and void and hereby order that they be set aside, with
costs against the private respondents.
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SO ORDERED.
Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Medialdea, Regalado, Davide, Jr.,
Romero, Nocon and Melo, JJ ., concur.
Narvasa, C .J ., is on official leave.
Bellosillo, J ., took no part.
Footnotes
*
Justice Alfredo Marigomen, ponente; Justices Josue N. Bellosillo and Filemon H. Mendoza,
concurring.
1.

Exhibits 1, 1-A and 1-B.

2.

Exhibit "U".

3.

Exhibit "V".

4.

Mayor and Council of City of Forsyth, et. al. vs. Hooks, 184 S.E. 724 (1936).

5.

Rollo, p. 84.

6.

Rollo, Ibid.

7.

Taken from U.S. DHEW Bulletin, "Status of Land Grant Colleges and Universities", LEBA.

8.

Annex C of Exhibit W.

9.

Rollo, pp. 206-207.

10.

Section 3, R.A. 6657.

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#9 G.R. NO. 158228

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 p:
This petition for review on certiorari seeks to set aside the decision 1 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 19841985 to crop year 19931994. The
contract of lease was subsequently renewed for another 10 agricultural crop years, commencing
from crop year 19951996 to crop year 20042005. 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. Piosa, sent a "Notice of Coverage" to respondent DECS,
stating that the subject lands are now covered by CARP and inviting its representatives for a
conference with the farmer beneficiaries. 6 Then, MARO Piosa submitted his report to OIC-PARO
Stephen M. Leonidas, who recommended to the DAR Regional Director the approval of the coverage
of the landholdings.
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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;
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(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:
xxx

xxx

xxx

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, . . . , shall be exempt from the coverage of this Act. 13
xxx

xxx

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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.
Firstly, in the CMU case, the land involved was not alienable and disposable land of the public
domain because it was reserved by the late President Carlos P. Garcia under Proclamation No. 476
for the use of Mindanao Agricultural College (now CMU). 16 In this case, however, the lands fall
under the category of alienable and disposable lands of the public domain suitable for agriculture.
Secondly, in the CMU case, the land was actually, directly and exclusively used and found to be
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 andexclusively 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
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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;
(c)

location and area of the land they work;

(d)

crops planted; and

(e)

their share in the harvest or amount of rental paid or wages received.

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
WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of
Appeals dated October 29, 2002, in CA-G.R. SP No. 64378 is REVERSED and SET ASIDE. The decision
dated August 30, 2000 of the Secretary of Agrarian Reform placing the subject lands under CARP
coverage, is REINSTATED.
SO ORDERED.
Davide, Jr., C .J ., Carpio and Azcuna, JJ ., concur.
Panganiban, J ., is on official leave.
Footnotes
1.
Penned by Justice Andres B. Reyes, Jr. and concurred in by Justice Delilah Vidallon-Magtolis
and Justice Regalado E. Maambong.
2.

CA Rollo, pp. 99100.

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3.
Id., pp. 335337.
4.

Id., pp. 104107.

5.

Id., pp. 3944.

6.

Id., p. 38.

7.

Id., p. 53.

8.

Id., pp. 8283.

9.

Rollo, p. 46.

10.

DAR Adm. Order No. 13, Series of 1990.

11.

Section 3(b), RA 6657.

12.

Chavez v. Public Estates Authority, G.R. No. 133250, 9 July 2002, 384 SCRA 152, 239.

13.

Section 10, R.A. No. 6657, as amended by R.A. No. 7881.

14.

Osea v. Malaya, G.R. No. 139821, 30 January 2002, 375 SCRA 285.

15.

G.R. No. 100091, 22 October 1992, 215 SCRA 86.

16.

Supra, p. 89.

17.

Supra, pp. 9798.

18.

Rollo, p. 87.

19.

Lercana v. Jalandoni, G.R. No. 132286, 1 February 2002.

20.

Secretary of Agrarian Reform v. Tropical Homes, Inc., G.R. No. 136799, 31 July 2001.

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#10 G.R. NO. 103125

FIRST DIVISION

[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.

SYLLABUS

1.
POLITICAL LAW; INHERENT POWERS OF THE STATE; EMINENT DOMAIN; PUBLIC
PURPOSE; CONCEPT. 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 SCRA 461 [1987]).
2.
ID.; ID.; ID.; ID.; DEEMED SATISFIED WHEN THE PURPOSE DIRECTLY AND
SIGNIFICANTLY AFFECTS PUBLIC HEALTH; SAFETY, THE ENVIRONMENT AND IN SUM THE
GENERAL WELFARE. 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
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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."
3.
ID.; ID.; ID.; DEEMED SUPERIOR TO THE POWER TO DISTRIBUTE LANDS UNDER THE
LAND REFORM PROGRAM. 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.
4.
ID.; ID.; ID.; LIMITATIONS ON THE EXERCISE THEREOF BY LOCAL GOVERNMENT
UNITS MUST BE CLEARLY EXPRESSED, EITHER IN THE LAW CONFERRING THE POWER OR
IN OTHER LEGISLATION. 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, 281 US 439, 74 L.ed. 950, 50 S Ct. 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.
5.
ID.; ID.; ID.; STATUTES CONFERRING THE POWER THEREOF TO POLITICAL
SUBDIVISION CANNOT BE BROADENED OR CONSTRICTED BY IMPLICATION. 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. 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
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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).
6.
ID.; ID.; ID.; DETERMINATION OF PUBLIC USE LODGED WITH THE LEGISLATIVE
BRANCH. 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 Philippine, as sovereign, or its political subdivisions, as holders
of delegated sovereign powers, cannot be bound by provisions of law couched in general
terms.
7.
ID.; ID.; ID.; DETERMINATION OF JUST COMPENSATION, GOVERNED BY THE RULES
OF COURT. 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 Ramirez, 183 SCRA 528 [1990]7 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.

DECISION

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QUIASON, J p:
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 implementor 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 of 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 a 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 answer for damages that private respondents may suffer in the event that the
expropriation cases do not prosper. The trial court issued a writ of possession in an order dated
January 18, 1990.
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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 26, 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
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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 SCRA 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, 281 US
439, 74 L.ed. 950, 50 S Ct. 360). It is also true that in delegating the power to expropriate, the
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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. 219, 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:
"SECTION 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.

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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 Philippine, as sovereign, or its political subdivisions, as holders of delegated sovereign powers,
cannot be bound by provisions of law couched in general terms.
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
Ramirez, 183 SCRA 528 [1990]7 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.
Cruz, Grio-Aquino and Bellosillo, JJ ., concur.
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#11 G.R. NO. 149548

EN BANC
[G.R. No. 149548. December 4, 2009.]
ROXAS & COMPANY, INC., petitioner, vs. DAMBA-NFSW and the DEPARTMENT OF AGRARIAN
REFORM, * respondents.
[G.R. No. 167505. December 4, 2009.]
DAMAYAN NG MGA MANGGAGAWANG BUKID SA ASYENDA ROXAS-NATIONAL FEDERATION
OF SUGAR WORKERS (DAMBA-NFSW), petitioner, vs. SECRETARY OF THE DEPT. OF AGRARIAN
REFORM, ROXAS & CO., INC. AND/OR ATTY. MARIANO AMPIL, respondents.
[G.R. No. 167540. December 4, 2009.]
KATIPUNAN NG MGA MAGBUBUKID SA HACIENDA ROXAS, INC. (KAMAHARI), rep. by its
President CARLITO CAISIP, and DAMAYAN NG MANGGAGAWANG BUKID SA ASYENDA ROXASNATIONAL FEDERATION OF SUGAR WORKERS (DAMBA-NFSW), represented by LAURO
MARTIN, petitioners, vs. SECRETARY OF THE DEPT. OF AGRARIAN REFORM, ROXAS & CO., INC.,
respondents.
[G.R. No. 167543. December 4, 2009.]
DEPARTMENT OF LAND REFORM, FORMERLY DEPARTMENT OF AGRARIAN REFORM (DAR),
petitioner, vs. ROXAS & CO, INC., respondent.
[G.R. No. 167845. December 4, 2009.]
ROXAS & CO., INC., petitioner, vs. DAMBA-NFSW, respondent.
[G.R. No. 169163. December 4, 2009.]
DAMBA-NFSW REPRESENTED BY LAURO V. MARTIN, petitioner, vs. ROXAS & CO., INC.,
respondent.
[G.R. No. 179650. December 4, 2009.]
DAMBA-NFSW, petitioner, vs. ROXAS & CO., INC., respondent.
DECISION
CARPIO MORALES, J p:
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
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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.
xxx

xxx

xxx

On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power
from the President. This Congress passed Republic Act No. 6657, the Comprehensive Agrarian
Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and took effect
on June 15, 1988.
Before the law's effectivity, on May 6, 1988, [Roxas & Co.] filed with respondent DAR a voluntary
offer to sell [VOS] Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico
and Banilad were later placed under compulsory acquisition by . . . DAR in accordance with the
CARL.
xxx

xxx

xxx

Nevertheless, on August 6, 1992, [Roxas & Co.], through its President, Eduardo J. Roxas, sent a letter
to the Secretary of . . . DAR withdrawing its VOS of Hacienda Caylaway. The Sangguniang Bayan
of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from
agricultural to non-agricultural. As a result, petitioner informed respondent DAR that it
wasapplying for conversion of Hacienda Caylaway from agricultural to other uses.
xxx

xxx

xxx 2 (emphasis and underscoring supplied)

The petitions in G.R. Nos. 167540 and 167543 nub on the interpretation of Presidential
Proclamation (PP) 1520 which was issued on November 28, 1975 by then President Ferdinand
Marcos. The PP reads:
DECLARING THE MUNICIPALITIES OF MARAGONDON AND TERNATE IN CAVITE PROVINCE AND
THE MUNICIPALITY OF NASUGBU IN BATANGAS AS A TOURIST ZONE, AND FOR OTHER PURPOSES

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WHEREAS, certain areas in the sector comprising the Municipalities of Maragondon and
Ternate in Cavite Province and Nasugbu in Batangashave potential tourism value after being
developed into resort complexes for the foreign and domestic market; and
WHEREAS, it is necessary to conduct the necessary studies and tosegregate specific
geographic areas for concentrated efforts of both the government and private sectors in
developing their tourism potential; HIaSDc
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vested in me by the Constitution, do hereby declare the area comprising the Municipalities of
Maragondon and Ternate in Cavite Province and Nasugbu in Batangas Province as a tourist zone
under the administration and control of the Philippine Tourism Authority (PTA)pursuant to
Section 5 (D) of P.D. 564.
The PTA shall identify well-defined geographic areas within the zone withpotential 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
agricultural to non-agricultural on the assumption that the issuance of PP 1520 which declared
Nasugbu, Batangas as a tourism zone, reclassified them to non-agricultural uses. Its pending
application notwithstanding, the Department of Agrarian Reform (DAR) issued Certificates of Land
Ownership Award (CLOAs) to the farmer-beneficiaries in the threehaciendas 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-statedRoxas & 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 conversionfollowing its remand to the DAR or on May 16,
2000, Roxas & Co. filed with the DAR anapplication for exemption from the coverage of the
Comprehensive Agrarian Reform Program (CARP) of 1988 on the basis of PP 1520 and of DAR
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Administrative Order (AO) No. 6, Series of 1994 3 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, 5oral
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 haciendasin Nasugbu from CARP
coverage; HSAcaE
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 nonagricultural 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 clausescannot 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
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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, 7 it
pronounced:
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.

...

B.

Proclamations declaring general areas such as whole provinces, municipalities, barangays,

islands or peninsulas as tourist zones that merely: ASETHC

(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

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(2)

recognize the potential value of identified spots located within the general area declared as

tourist zone (i.e. . . .) 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 . . . .

D.

. . . . (underscoring in the original; emphasis and italics supplied)

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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 1995 14 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. HCITcA
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 "welldefined 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
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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. 647 19 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 2009 21 also impacts on the present petitions since
Section 32 thereof states that:
Sec. 32.

. . . . 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. . . . . (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. 179650CANNOT BE
GRANTED IN VIEW OF DISCREPANCIES IN THE LOCATION AND IDENTITY OF THE SUBJECT
PARCELS OF LAND. DcI
CEa
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Since PP 1520 did not automatically convert Haciendas Caylaway, Banilad and Palicointo nonagricultural 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 inHacienda Palico, have
been reclassified to non-agricultural uses via Nasugbu MZO No. 4which 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.
xxx

xxx

xxx

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 Secretary 26 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 T49946 is T-783 and not T-985. On the other hand, the origin of T-60034 is listed as 59946,
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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, 125C, 125-D and 125-E covered by TCT Nos. 60019, 60020, 60021, 60022 and 60023,
respectively. 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)
xxx

xxx

xxx

[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 ZonesBarangay Cogunan was not included. . . . . In fact, the TCTs

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submitted by [Roxas & Co.] show that the properties covered by said titles are all located at Barrio
Lumbangan. 29(emphasis and underscoring supplied) DICSaH
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 inHacienda Palico (now
the subject of G.R. No. 149548).
When Roxas & Co. sought the re-opening of the proceedings in DAR Administrative Case No. A9999-142-97 (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 Secretary 30 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--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
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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 ofNasugbu 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-9999-008-98 FOR 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; TaISEH

4.

Location and vicinity maps of subject landholdings;

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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
xxx

xxx

xxx (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 nonlitigious 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.

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xxx

xxx

xxx

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. . . . . 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 BECANCELLED. TAacIE
Turning now to the validity of the issuance of CLOAs in Hacienda Palico vis--vis the present
dispositions: It bears recalling that in DAR Administrative Case Nos. A-9999-008-98 and A-9999142-97 (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-401-0052001 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
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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 farmerbeneficiaries. 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. . . . . 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:
. . . . 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 as the matter of canceling CLOA No. 6654 is of utmost importance, involving as it does the
probable displacement of hundreds of farmer-beneficiaries and their families. . . . (underscoring
supplied)
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 nineparcels 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

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in Hacienda Palico and the other twohaciendas, aside from the above-mentioned nine lots, are
CARP-exempt.
Conformably, Republic Act No. 3844 (R.A. No. 3844), as amended, 42 mandates that disturbance
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 of 1994 directs the payment of disturbance compensation before the application for
exemption may be completely granted.
HDTCSI
Roxas & Co. is thus mandated to first satisfy the disturbance compensation of affected farmerbeneficiaries 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. 401239-2001 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
Decision 46 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)
merit;

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

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;
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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;
6)
In G.R. No. 167845, the Court DENIES Roxas & Co.'s petition for review for lack of merit
and AFFIRMS the September 10, 2004 Decision and April 14, 2005 Resolution of the Court of
Appeals;
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 farmerbeneficiaries in the areas covered by the nine parcels of lands in DAR Administrative Case No. A9999-008-98 before the CLOAs therein can be cancelled, and is ENJOINED to strictly follow the
mandate of R.A. No. 3844.
No pronouncement as to costs.
SO ORDERED. CacTSI
Carpio, Corona, Velasco, Jr., Peralta, Del Castillo, Abad and Villarama, Jr., JJ., concur.
Puno, C.J., see separate opinion.
Chico-Nazario, J., please see dissenting opinion.
Nachura, Brion and Bersamin, JJ., took no part.
Leonardo-de Castro, J., I join the dissent of Justice Minita Chico-Nazario.
Separate Opinions
PUNO, C.J., concurring:
At test is our commitment to a centerpiece of the Constitution: social justice. In the past, we have
always struck a blow for agrarian reform and taken the cudgels for farmers in their struggle for a
life with dignity. We cannot abandon that stance for that is dictated by the fundamental law of the
land.
In G.R. Nos. 167540 and 167543, the issue for resolution is whether Presidential Proclamation
No. 1520 excludes the disputed lots from the coverage of Republic Act No. 6657 or the
Comprehensive Agrarian Reform Law (CARL), effective on June 15, 1988.
The CARL implements the command for agrarian reform in Section 4, Article XIII of the
Constitution:
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SECTION 4.

The State shall, by law, undertake an agrarian reform program founded on the

right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands
they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end,
the State shall encourage and undertake the just distribution of all agricultural lands, subject to
such priorities and reasonable retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations, and subject to the payment of just
compensation. In determining retention limits, the State shall respect the right of small landowners.
The State shall further provide incentives for voluntary land-sharing.
The CARL, being a general welfare legislation, embodies the Constitution's priority and
commitment to further social justice.
As an exercise of both police power as it prescribes retention limits for landowners, and of
eminent domain as it provides for the compulsory acquisition of private agricultural lands for
redistribution, the CARL remains consistent with this commitment. 1 Private rights must "yield to
the irresistible demands of the public interest on the time-honored justification . . . that the welfare
of the people is the supreme law." 2 We have underscored the import of fulfilling the objectives of
an agrarian reform program: CcTIDH
The expropriation before us affects all private agricultural lands whenever found and of whatever
kind as long as they are in excess of the maximum retention limits allowed their owners. This kind
of expropriation is intended for the benefit not only of a particular community or of a small
segment of the population but of the entire Filipino nation, from all levels of our society, from the
impoverished farmer to the land-glutted owner. Its purpose does not cover only the whole territory
of this country but goes beyond in time to the foreseeable future, which it hopes to secure and edify
with the vision and the sacrifice of the present generation of Filipinos. Generations yet to come are
as involved in this program as we are today, although hopefully only as beneficiaries of a richer and
more fulfilling life we will guarantee to them tomorrow through our thoughtfulness today. And,
finally, let it not be forgotten that it is no less than the Constitution itself that has ordained this
revolution in the farms, calling for 'a just distribution' among the farmers of lands that have
heretofore been the prison of their dreams but can now become the key at least to their
deliverance. 3
The effective implementation of the CARL, and ultimately the constitutional mandate for social
justice, relies on a balance brought forth by "a more equitable distribution and ownership of
land, with due regard to the rights of landowners to just compensation and to the ecological
needs of the nation," to achieve the objective of providing "farmers and farmworkers with the
opportunity to enhance their dignity and improve the quality of their lives through greater
productivity of agricultural lands." 4
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Section 4 of R.A. No. 6657 provides that the CARL shall "cover, regardless of tenurial
arrangement and commodity produced, all public and private agricultural lands." The CARL defines
agricultural land as "land devoted to agricultural activity as defined in [the] Act and not classified as
mineral, forest, residential, commercial or industrial land." 5 The deliberations of the Constitutional
Commission confirm the CARL's limitation of the meaning of the word "agricultural":
The intention of the Committee is to limit the application of the word 'agriculture.' Commissioner
Jamir proposed to insert the word 'ARABLE' to distinguish this kind of agricultural land from such
lands as commercial and industrial lands and residential properties because all of them fall under
the general classification of the word 'agricultural.' This proposal, however, was not considered
because the Committee contemplated that agricultural lands are limited to arable and suitable
agricultural lands and therefore, do not include commercial, industrial and residential lands. 6
The CARL's coverage is further subject to Section 10 of the same, which enumerates the
exemptions from the coverage of the Act. 7
In the cases at bar, it must be emphasized that there is no question of whether the disputed land
is among the exemptions under Section 10 of R.A. No. 6657. The issue is whether the land in dispute
is devoted to non-agricultural activity. In Natalia Realty, Inc. v. Department of Agrarian Reform
(DAR), we held that "lands previously converted to non-agricultural uses prior to the effectivity of
CARL by other government agencies other than . . . DAR" are lands not devoted to agricultural
activity and therefore outside the coverage of CARL. 8 Its import rests on the premise that "the
CARL prohibits . . . the conversion of agricultural lands for non-agricultural purposes after the
effectivity of the CARL." 9 DaHISE
Although the ruling in Natalia was reiterated in a number of cases, prudence dictates that its
application must not be stretched with unbridled discretion. The constitutional mandate to
promote social justice through an agrarian reform program, such as that embodied in the CARL,
remains the prevailing benchmark by which we measure whether there is, primarily, any merit
in Natalia's application to the cases at bar. Thus, citing Natalia,we upheld the exclusion of land from
the coverage of the CARL on the basis of a specific set of circumstances. These include the following:
(1) municipal and/or city council zoning ordinances issued prior to the CARL's effectivity that
prescribe the uses for the disputed land as non-agricultural, later approved by government
agencies other than the DAR; and (2) Presidential Proclamations enacted prior to the CARL's
effectivity that provide the uses of the disputed land for housing.
The cases at bar must be set apart from the first category of cases that reiteratedNatalia, or
those that upheld the exclusion of land from CARL due to zoning ordinances that prescribed the
uses for the disputed land as non-agricultural and subsequently approved by government agencies
other than the DAR. Pasong Bayabas Farmers Association, Inc. v. Court of Appeals held that pursuant
to Section 3 of R.A. No. 2264, amending the Local Government Code, municipal and/or city councils
have the power to "adopt zoning and subdivision ordinances or regulations in consultation with the
National Planning Commission." 10 While the Court defined a zoning ordinance as one that
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"prescribes, defines, and apportions a given political subdivision into specific land uses as present
and future projection of needs," the Court specified that a local government has the power to
convert or reclassify lands to residential lands. 11 For this reason, the approval by the Municipal
Council of Carmona, Cavite, of Kapasiyahang Blg. 30 on May 30, 1976 "reclassified and converted
[the land] from agricultural to non-agricultural or residential." 12However, it is worthy to stress that
in confirming the reclassification and conversion of the land, the Court not only considered the
municipal council's zoning ordinance, but also its approval by the Human Settlements Regulatory
Commission (HSRC). 13
Similarly, Junio v. Garilao upheld the exemption of the disputed land from CARL, because the City
Council of Bacolod reclassified the land as residential prior to the CARL's effectivity, which was
subsequently affirmed by the HSRC. 14 Agrarian Reform Beneficiaries Association v. Nicolas used the
same reasoning in exempting the disputed land from CARL coverage, holding that a city ordinance
reclassified the land within an urban zone, likewise prior to the CARL's effectivity, which
reclassification was later approved by the Housing and Land Use Regulatory Board (HLURB). 15 The
Court concluded that the disputed land was "considered 'non-agricultural' [which] may be utilized
for residential, commercial, and industrial purposes." 16 Considering that the cases at bar do not
involve zoning ordinances that reclassified the disputed land to non-agricultural uses, a discussion
of the second category of cases that uphold the exclusion of the disputed land from the coverage of
CARL is in order.
A review of the provisions of Presidential Proclamation No. 1520 reveals the absence of a
specified technical description of the land subject to its coverage. This glaring omission should,
at the very least, subject the issue of whether Natalia applies to the cases at bar to further scrutiny.
In Natalia, the Court excluded the disputed land from the coverage of CARL on the basis of
Presidential Proclamation No. 1637, which "converted for residential use what were erstwhile
agricultural lands." 17 A subsequent case, National Housing Authority v. Allarde reiterated the ruling
in Natalia, and excluded the disputed land from the coverage of CARL on the basis of Presidential
Proclamation No. 843, which "categorized [the disputed land] as not being devoted to the
agricultural activity contemplated by Section 3 (c) of R.A. No. 6657." 18 It is worthy to note that the
Presidential Proclamations cited in both cases provide specified technical descriptions of the lands
that were "converted" to residential or "categorized" as non-agricultural, hence, there were no
doubts as to their coverage.
It is respectfully submitted that our ruling in DAR v. Franco gives the guidelines for the proper
interpretation of Presidential Proclamation No. 1520. 19 The said case required a review of
Presidential Proclamation No. 2052, 20 which, except for the municipalities identified, mirrors the
provisions of Presidential Proclamation No. 1520. 21 Thus, we held:
. . . 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

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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.22
In other words, without a technical description of the areas comprising a tourist zone, the
Philippine Tourism Authority's (PTA's) identification of these areas is necessary for exclusion
from coverage of the CARL.
Franco's application to the cases at bar cannot be dismissed for the reason that the Court's
abovementioned pronouncement only took note of the contents of the DAR Secretary's order. A
conclusion that the only issue in the appeal concerned the handwritten note of a Department of
Agrarian Reform Adjudication Board (DARAB) member thereby making any pronouncement
unrelated thereto obiter dictum, is unwarranted. ETaHCD
In Franco, the petitioners expressly raised the issue of whether Presidential Proclamation No.
2052 "has taken outside the coverage of agrarian reform all agricultural lands included within [it]
or only those that are acquired and developed by the PTA for tourism purposes" before the
Court. 23 It is well established that an adjudication on any point within the issues presented by the
case is not obiter dictum:
Accordingly, a point expressly decided does not lose its value as a precedent because the
disposition of the case is, or might have been, made on some other ground, or even though, by
reason of other points in the case, the result reached might have been the same if the court had
held, on the particular point, otherwise than it did. A decision which the case could have turned on
is not regarded as obiter dictum merely because . . . an additional reason in a decision, brought
forward after the case has been disposed of on one ground, be regarded as dicta. 24
Although the Court resolved the issue of whether the DARAB member's handwritten note was
the proper subject of an appeal, the Court decided the important issue of the validity of the DAR
Secretary's order, which declared that the 808 hectares of land delineated by the PTA as needed
for tourism development was excluded from CARL. 25This ruling in Franco is an authoritative
precedent in resolving the cases at bar.
But assuming for the sake of argument that Franco is not applicable to the cases at bar, the
proper statutory construction of Presidential Proclamation No. 1520 in light of the CARL will still
yield a similar outcome.
Basic is the rule that only statutes with an ambiguous or doubtful meaning may be the subject of
statutory construction. 26 The irreconcilable interpretations offered by the contending parties,
however, prove that the proclamation suffers from ambiguity: first, the blanket classification of the
subject municipalities, as claimed by the Roxas & Co., and second, the piecemeal classification of
areas for tourism within the subject municipalities, as contended by Katipunan ng mga Magbubukid
sa Hacienda Roxas, Inc. (KAMAHARI) and Damayan ng Manggagawang Bukid sa Asyenda RoxasNational Federation of Sugar Workers (DAMBA-NFSW). Too, the Whereas clauses of the
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proclamation incite doubt as to the role of the PTA in the delineation of tourist zone boundaries as
they speak of "certain areas in the sector comprising the Municipalities of Maragondon and Ternate
in Cavite Province and Nasugbu in Batangas" and of the necessity to "segregate specific geographic
areas for concentrated efforts." Finally, the area declared as a tourist zone in the proclamation was
not defined by metes and bounds, putting into question the scope of the proclamation. Hence, the
apparent need for construction.
I do not subscribe to the view that the very terms expressed in the proclamation as well as by its
title declared as a single tourist zone the area comprising the municipalities of Nasugbu, Ternate,
and Maragondon. It is well to remember that statutes in pari materiashould be construed together
to attain the purpose of an expressed national policy. 27Likewise, in interpretating a statute, the
Court should start with the assumption that the legislature intended to enact an effective law; it
cannot be presumed to have done a vain thing. 28 An interpretation should be avoided under which
a statute or provision being construed is defeated, or as otherwise expressed, nullified, destroyed,
emasculated, repealed, explained away, or rendered insignificant, meaningless, inoperative or
nugatory.29 TSHIDa
In the cases at bar, we should construe Presidential Proclamation No. 1520 within the context of
the CARL, Presidential Decree No. 564 which revised the charter of the PTA, and the Constitution
and its provisions mandating agrarian reform and social justice. Taking this approach, we have to
recognize the power of the PTA to identify and specify geographic areas with potential tourism
value in a declared tourist zone which includes a huge area, not all of which are tourism-ready. This
is supported by Section 38 of Presidential Decree No. 564, which defines a "tourist zone" as a
"geographic area with well-defined boundaries proclaimed as such by the President, upon the
recommendation of the Authority [the PTA], and placed under the administration and control of the
Authority." Hence, absent such a determination and development plan by the PTA, the area can still
be considered subject to the coverage of the CARL.
Moreover, the application of CARL fits within the landscape of Section 5.A.2 of Presidential
Decree No. 564, which tasks the PTA to formulate a development plan for each zone, with the
following proviso:
. . . [that] in case the zone in question to be developed is not solely for tourism purposes, the
development plan shall cover specifically those aspects pertaining to tourism; Provided,
further, That the tourism development plan is fully coordinated and integrated with other sectoral
plans for the area.
Therefore, the logical conclusion is that pockets of tourist zones can exist alongside areas
subject to the coverage of the CARL, as long as the requirements in Presidential Decree No. 564
and Presidential Proclamation No. 1520 are met.
The overly broad interpretation of Presidential Proclamation No. 1520 with regard to the
declaration of a tourist zone will open the gates to attempts to defeat the spirit of the CARL, and
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more importantly, the Constitution. The march of our farmers towards social justice has been in
slow motion for ages now.
I concur.
CHICO-NAZARIO, J., dissenting and concurring:
There are seven consolidated Petitions before this Court, involving the question of whether all or
certain parcels of land located in Nasugbu, Batangas, are subject to distribution to farmerbeneficiaries under the Comprehensive Agrarian Reform Program (CARP). The seven Petitions are
broken into three groups depending on their bases and/or subject matters.
I
ANTECEDENT FACTS
A.

CARP Exemption of the Three Haciendas based on Presidential Proclamation No.

1520

G.R. No. 167540

On 28 November 1975, then President Ferdinand E. Marcos (Marcos) issued Presidential
Proclamation No. 1520, with the title "Declaring the municipalities of Maragondon and Ternate in
Cavite and the municipality of Nasugbu in Batangas province as a Tourist Zone, and for other
purposes."
After the People Power Revolution which resulted in the ouster of former President Marcos on
24 February 1986, a Constitutional Convention drafted, and the people ratified in a plebiscite held
on 2 February 1987, the new Constitution (1987 Constitution). The 1987 Constitution includes,
under Article XIII, the following provisions explicitly mandating the State to undertake an agrarian
reform program:
Sec. 4.

The State shall, by law, undertake an agrarian reform program founded on the right of

farmers and regular farmworkers, who are landless, to own directly or collectively the lands they
till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations, and subject to the payment of just
compensation. In determining retention limits, the State shall respect the right of small landowners.
The State shall further provide incentives for voluntary land-sharing.
Sec. 5.

The State shall recognize the right of farmers, farm-workers, and landowners, as well as

cooperatives, and other independent farmers' organizations to participate in the planning,

organization, and management of the program, and shall provide support to agriculture through

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appropriate technology and research, and adequate financial, production, marketing, and other
support services.
In compliance with the afore-mentioned constitutional mandate, Congress passed, and then
President Corazon C. Aquino signed into law, Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), which became effective on 15 June 1988. The CARL
provided the mechanism for the implementation of the CARP, in order to promote social justice and
industrialization. DTcHaA
Roxas & Company, Inc. (Roxas & Co.) was the registered owner of the following vast parcels of
land located in Nasugbu, Batangas:
Hacienda

Area (hectares) Transfer Certificate of Title (TCT)

Hacienda Caylaway

Hacienda Banilad
Hacienda Palico

867.9571

1,050
1,024

TCT No. T-44662

TCT No. T-44663
TCT No. T-44664
TCT No. T-44665
TCT No. 924
TCT No. 985

In a letter dated 6 May 1988, Roxas & Co. informed the Department of Agrarian Reform (DAR)
Secretary of the former's intention to sell to the Government Hacienda Caylaway under the
voluntary offer to sell (VOS) component of the CARP. A year later, the Government also sought to
acquire Haciendas Banilad and Palico under the compulsory acquisition component of the CARP,
and issued to Roxas & Co. notices of acquisition for the two properties.
Notices of land valuation were subsequently issued by the DAR Regional Director fixing the
compensation for Haciendas Banilad and Palico, but Roxas & Co. rejected the valuation and
protested the compulsory acquisition proceedings for its two haciendas.
On 5 August 1992, Roxas & Co. withdrew its earlier VOS covering Hacienda Caylaway on the
ground that the said property had been previously reclassified for non-agricultural purposes.
Insisting that Hacienda Caylaway was not exempt from the coverage of CARP, the DAR Secretary
sent Roxas & Co. a notice of valuation for the said property, which Roxas & Co. likewise opposed
and protested.
Roxas & Co. filed with the DAR on 4 May 1993 an application for conversion of its
threehaciendas from agricultural to non-agricultural uses.
Even during the pendency of the application for conversion of Roxas & Co., the DAR already
canceled the TCTs of Roxas & Co. and started issuing Certificates of Land Ownership Award
(CLOAs) covering the three haciendas to farmer-beneficiaries, including members of Katipunan ng
mga Magbubukid sa Hacienda Roxas, Inc. (KAMAHARI) and Damayan ng Manggagawang Bukid sa
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Asyenda Roxas-National Federation of Sugar Workers (DAMBA-NFSW). Among such CLOAs was
CLOA No. 6654, issued on 15 October 1993, covering a portion of Hacienda Palico measuring
513.9863 hectares. This prompted Roxas & Co. to file on 24 August 1993 a Complaint with the DAR
Adjudication Board (DARAB), docketed as Case No. N-0017-96-46 (BA). Roxas & Co. argued in its
Complaint that the Municipality of Nasugbu, where the haciendas are located, had been declared a
tourist zone; that the land is not suitable for agricultural production; and that the Sangguniang
Bayan of Nasugbu had already reclassified the land to non-agricultural uses. Roxas & Co. thus
prayed for the cancellation of the CLOAs already issued for its threehaciendas. DARAB, however,
referred Case No. N-0017-96-46 (BA) to the Office of the DAR Secretary since it involved the
prejudicial question of whether the properties of Roxas & Co. were subject to CARP.
On 29 October 1993, Roxas & Co. filed with the Court of Appeals a Petition for Prohibition
and Mandamus, questioning the expropriation of its properties under the CARP and the denial of
due process in the acquisition of its landholdings. Roxas & Co. prayed in its Petition that the
appellate court (1) direct the DAR to desist from further acquisition proceedings involving the
three haciendas; and (2) compel DAR to approve the application of Roxas & Co. for the conversion of
the three haciendas to non-agricultural uses. The Petition was docketed as CA-G.R. SP No.
32484. HTacDS
The Court of Appeals, in its Decision dated 28 April 1994, dismissed the Petition in CA-G.R. SP No.
32484, for being premature since Roxas & Co. failed to exhaust prior administrative remedies. The
appellate court also stated that the filing by Roxas & Co. of an application for conversion of
its haciendas to non-agricultural seemed to be a clear manifestation that the said properties were
not yet exempted or excluded from CARP. The Court of Appeals, in a Resolution dated 17 January
1997, denied the Motion for Reconsideration of Roxas & Co.
Roxas & Co. filed an appeal with this Court, bearing the title Roxas & Co. v. Court of
Appeals, docketed as G.R. No. 127876. In its Decision dated 17 December 1999, the Court granted
in part the appeal of Roxas & Co. and nullified the acquisition proceedings over the
three haciendas because DAR did not accord Roxas & Co. due process. The DAR failed to give proper
notices as regards the acquisition proceedings to Roxas & Co. and to identify specifically the
portions of the three haciendas placed under CARP. Nevertheless, the Court refused to rule upon the
issue of conversion of the three haciendas from agricultural to non-agricultural, for the agency
charged with the mandate of approving or disapproving applications for conversion was the DAR.
Consequently, the case was remanded to DAR for proper acquisition proceedings and
determination of the application for conversion of Roxas & Co., in accordance with the guidelines
set forth in the Decision and applicable administrative procedure.
On 16 May 2000, Roxas & Co. filed with DAR an application for exemption of the
threehaciendas from CARP coverage, docketed as DAR Administrative Case No. A-9999-084-00.
Roxas & Co. essentially contended that Presidential Proclamation No. 1520, issued on 28 November
1975, had already declared the Municipalities of Ternate and Margondon in Cavite and Nasugbu in
Batangas a tourism zone, and reclassified the entire three municipalities to non-agricultural use.
Necessarily, the three haciendas located within Nasugbu were also reclassified to non-agricultural
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use, long before the effectivity of the CARL on 15 June 1988. As DAR Administrative Order No. 6,
series of 1994, 1 provided, on the basis of Department of Justice (DOJ) Opinion No. 44, series of
1990, all lands that were already classified as commercial, industrial, or residential before 15 June
1988 no longer need conversion clearance from DAR.
KAMAHARI and DAMBA-NFSW opposed the application for CARP exemption of Roxas & Co.
KAMAHARI and DAMBA-NFSW argued, among other things, that Presidential Proclamation No.
1520 did not, by itself, reclassify the three haciendas from agricultural to non-agricultural use,
because said issuance merely directed the identification and segregation of specific geographic
areas in the Municipalities of Ternate, Maragondon, and Nasugbu, to be developed for tourism
purposes. The Department of Tourism (DOT) already identified specific areas in Nasugbu to be
developed for tourism purposes and such areas did not include the three haciendas of Roxas & Co.
Even the Municipality Government of Nasugbu and the barangays where the three haciendas are
located opposed the application for exemption of Roxas & Co. ADCEaH
In an Order dated 22 October 2001, then DAR Secretary Hernani A. Braganza denied the
application for CARP exemption of Roxas & Co. According to the DAR Secretary, although
Presidential Proclamation No. 1520 declared Nasugbu as part of a tourism zone, it did not
automatically reclassify all the land in the said municipality from its original uses, whether
agricultural or non-agricultural. The PTA should first define specifically the areas in Nasugbu that
would fall within the tourism zone, but no such definition had been done yet by the PTA. The PTA
even declared in its letter addressed to Santiago R. Elizalde, Director of Roxas & Co., that the PTA
had no pending tourism development projects in the area. Likewise, the report of the Ocular
Investigation Team (OCI) of the Center for Land Use Policy Planning and Implementation
(CLUPPI) 2 did not indicate that the three haciendas of Roxas & Co. were being used in any way for
tourism purposes and, instead, presented the finding that the properties of Roxas & Co. were
agricultural lands planted with sugar cane and other crops.
The DAR Secretary, in its 22 October 2001 Order, refused to adhere to the position of Roxas and
Co. that by virtue of Presidential Proclamation No. 1520, entire municipalities had been re-zoned
for non-agricultural uses and, thus, became exempt from CARP coverage. This, the DAR Secretary
reasoned, would result in absurdity as it would amount to a blanket and automatic CARP exemption
without due regard to land use reclassification powers vested in other government agencies such as
the PTA, DAR, local government units (LGUs), and the Housing and Land Use Regulatory Board
(HLURB). Surely, Presidential Proclamation No. 1520 could have intended such a result.
The DAR Secretary found, in his Order of 22 October 2001, that DAR Administrative Order No. 6,
series of 1994, did not apply to the case of Roxas & Co. since there was no express provision in
Presidential Proclamation No. 1520 or in any other documents submitted by Roxas & Co. that the
three haciendas in Nasugbu have been reclassified to nonagricultural use prior to the effectivity of
the CARL. The DAR Secretary, therefore, decreed:

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WHEREFORE, premises considered, the herein application for exemption from CARP coverage
pursuant to Administrative Order No. 6, Series of 1994 involving parcels of land covered by TCT
Nos. T-985, T-924, T-44655 (sic), T-44664, and T-44663 located at Brgys. Caylaway, Palico and
Banilad, Nasugbu, Batangas, and with an aggregate area of 2,930.2948 hectares is herebyDENIED.
The DAR field office personnel concerned are directed to immediately proceed with the coverage
and distribution of subject lands to qualified farmer beneficiaries. 3
Roxas & Co. expectedly filed a Motion for Reconsideration of the foregoing Order of the DAR
Secretary.
The DAR Secretary denied the Motion for Reconsideration of Roxas & Co. in an Order dated 12
July 2002. The DAR Secretary reiterated the need for the PTA to identify the geographical areas
within the zone with potential tourism value, which the PTA still had not done as of yet. The
Certifications submitted by Roxas & Co. only recognized that the threehaciendas are covered by
Presidential Proclamation No. 1520 and that Nasugbu is a priority area for tourism development;
but these still did not provide the required delineation of tourism areas. The DAR Secretary also
noted that Roxas & Co. did not submit a copy of the alleged Master Tourism Plan for Nasugbu,
which purportedly included the threehaciendas. And, even assuming the existence of such a Plan, it
must still be approved by the Sangguniang Bayan of Nasugbu. As the HLURB asserted, DAR
Administrative Order No. 6, series of 1994, requires that the three haciendas should have been
included in a land use or zoning ordinance. Absent compliance with said requirement, the
application for CARP exemption should be denied. aEcHCD
On 12 August 2002, Roxas & Co. filed with the Court of Appeals a Petition for Review
onCertiorari with application for Temporary Restraining Order, docketed as CA-G.R. SP No. 72131.
Roxas & Co. anchored its Petition on the following grounds:
I
THE HONORABLE SECRETARY OF AGRARIAN REFORM ERRED IN FAILING TO CONCLUDE THAT
THE SUBJECT LANDS ARE NON-AGRICULTURAL LANDS, THE SAME HAVING BEEN CLASSIFIED BY
PROCLAMATION NO. 1520 AS PART OF A TOURIST ZONE.
II
THE HONORABLE SECRETARY OF AGRARIAN REFORM ERRED IN NOT EXEMPTING THE SUBJECT
LANDS FROM THE COVERAGE OF THE CARL.
The Former Tenth Division of the Court of Appeals, by a vote of three to two, resolved CA-G.R. SP
No. 72131 in favor of Roxas & Co.
In the Decision 4 dated 24 November 2003, the majority determined that the only issue for
resolution in CA-G.R. SP No. 72131 was "whether Proc. 1520 (which declared three municipalities
of Maragondon, Ternate and Nasugbu as "tourist zone") issued in 1975 converted the entire three
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municipalities to non-agricultural areas, thereby exempting [Roxas & Co.]'s lands located in
Nasugbu from CARP." Answering the said issue in the affirmative, the majority rationalized that:
. . . [t]he Proclamation is clear and free from any doubt or ambiguity and leaves no room for
construction or interpretation as what [DAR] has done. What is clear is that Nasugbu, Batangas
where [Roxas & Co.]'s property is located was declared as Tourist Zone under the administration
and control of the Philippine Toursim Authority. When the law speaks with clear and categorical
language, there is no reason for interpretation or construction, but only for application (Republic v.
CA, 299 SCRA 199).
xxx

xxx

xxx

Presidential Proclamation 1520 clearly established the following, in reference to the case at bench.
(a)

It declared the area comprising Nasugbu in Batangas as a Tourist Zone. (underscoring for

emphasis)
(b)

It placed the said area under the administration and control of the Philippine Tourism

Authority; therefore not subject to CARP.

(c)

Since the entire Nasugbu area cannot at one time be immediately developed for tourism, as

intended, there is a need to establish priorities based on potential tourism value within the Tourist
Zone wherein optimum use of natural assets and attractions, as well as existing facilities where
both the government and private sector can concentrate their efforts and limited resources in order
to generate foreign exchange as well as other tourist receipts at the earliest possible time. IDTSaC
(d)

The only area exempted from designation as Tourist Zone is any duly established military

reservation existing within the zone.

It is therefore beyond any cavil of doubt that as early as 1985, when Proclamation No. 1520 was
issued, Nasugbu, Batangas, where [Roxas & Co.]'s properties are located, has been declared as
Tourist Zone and placed under the administration and control of the Philippine Tourism Authority.
Under such circumstances, it necessarily follows it is exempt from the coverage of CARL and
therefore the Secretary of DAR has no authority over the same. 5
The majority applied Natalia Realty, Inc. v. Department of Agrarian Reform (DAR) 6 andNational
Housing Authority (NHA) v. Hon. Allarde 7 as judicial precedents to CA-G.R. SP No. 72131, addressing
the contrary view of the DAR in the following manner:
What is sauce for the goose is also sauce for the gander. To do otherwise would definitely result in
violating the constitutionally guaranteed equal protection right. In Natalia Realty, Inc. vs. DAR, 225
SCRA 278, the Supreme Court in an En banc decision upheld the force and effect of the exemption of
the lands covered by Presidential Proclamation No. 1637 from the CARL. The said Proclamation
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declared 20,312 hectares of land located in the municipalities of Antipolo, San Mateo and
Montalban as townsite. In the subsequent case of NHA vs. Allarde,318 SCRA 22, which involved
Presidential Proclamation No. 843 declaring Tala Estate as reserved for the housing program of the
National Housing Authority, the Supreme Court reiterated the earlier pronouncement in Natalia vs.
DAR, supra, the land reserved for or converted prior to the effectivity of Republic Act No. 6657,
otherwise known as the CARL, are not considered and treated as agricultural lands and therefore,
outside the ambit of said law.
[DAR], however, argues that in both cases, the covered land areas have technical descriptions while
that in Proc. 1520 does not and therefore the ruling in said cases cannot be made applicable to the
latter. Again, [DAR] conveniently forgot or did not mention that in both the Natalia and NHA cases,
there was necessity to delineate the Tourist Zone. In Natalia, the area straddles several
municipalities and only portions of said municipality was (sic) included. In the NHA case, it
encompasses several parcels of land covered by different titles and involved only certain portions
covered by the various titles.
In the case of Proc. 1520, there was no necessity to survey or make a technical description
because it included or declared on (1) whole municipality as Tourist Zone exempting only a military
reservation, if there is one earlier made (underscoring for emphasis). If both Proclamation 1637
and 843 are given the force and effect of a law by declaring them beyond the CARL coverage, there
is no reason why Proc. No. 1520 should be treated otherwise. Such is the equal protection of the law
guaranteed by the Constitution. 8
In the end, the majority disposed of CA-G.R. SP No. 72131 as follows:
WHEREFORE, foregoing premises considered, the Petition having merit, the Orders issued by the
Secretary of Agrarian Reform dated October 22, 2001 and July 12, 2002 are hereby SET ASIDE FOR
HAVING BEEN ISSUED WITHOUT LEGAL BASIS AND DECLARING THAT THE PARCELS OF LAND
COVERED BY TCT Nos. T-44665, T-44664 and T-44663, all in the name of [Roxas & Co.] and all
situated in Nasugbu, Batangas, particularly those situated in Barangays Caylaway, Palico and
Banilad, as exempt from the coverage of CARP pursuant to the declaration of Proclamation No.
1520 as Tourist Zone. No Costs. 9 cDHAES
Court of Appeals Associate Justice Ruben T. Reyes, in his Separate Opinion (Dissenting), believed
that Roxas & Co. committed forum shopping by filing its application for exemption while its
previous application for conversion and complaint for cancellation of CLOAs were still pending with
the DAR. Ordinarily, violation of the rule against forum-shopping shall be a cause for summary
dismissal of the petition, complaint, application or any other initiatory pleading. However, in light
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of the substantial issues and subject matter involved in the case, Justice Reyes instead voted for the
remand of the same to DAR for joint determination with the pending related cases on conversion
and cancellation of CLOAs.
Court of Appeals Associate Justice Portia Alio-Hormachuelos also dissented from the majority.
While it is true that the three haciendas of Roxas & Co. are within the tourist zone, Justice AlioHormachuelos observed in her Dissenting Opinion that there was no evidence that the said
properties have been specified or segregated for having potential tourism value as required by law.
She thus voted to deny the Petition of Roxas & Co. and affirm the Orders dated 22 October 2001 and
12 July 2002 of the DAR Secretary in DAR Administrative Case No. A-9999-084-00.
In the Resolution 10 dated 18 March 2005, the Court of Appeals denied the separate Motions for
Reconsideration filed by KAMAHARI, DAMBA-NFSW, and DAR.
Aggrieved, KAMAHARI and DAMBA-NFSW jointly filed with this Court a Petition for Review
on Certiorari under Rule 45 of the Rules of Court, seeking (1) the nullification, reversal, and setting
aside of the Decision dated 24 November 2003 and Resolution dated 18 March 2005 of the Court of
Appeals in CA-G.R. SP No. 72131; (2) a declaration that the three haciendas of Roxas & Co. are
within the coverage of the CARL; (3) and a ruling affirming the Orders dated 22 October 2001 and
12 July 2002 of the DAR Secretary which denied, for lack of merit, the application for CARP
exemption of Roxas & Co. in DAR Administrative Case No. A-9999-084-00. The Petition was
docketed as G.R. No. 167540, and raffled to the Second Division of the Court.
The Second Division of the Court directed Roxas & Co. and DAR to file their respective Comments on
the Petition of KAMAHARI and DAMBA-NFSW.
G.R. No. 167543
In the meantime, DAR filed with this Court a separate Petition for Review on Certiorariunder
Rule 45 of the Rules of Court, similarly praying for the setting aside of the Decision dated 24
November 2003 and Resolution dated 18 March 2005 of the Court of Appeals in CA-G.R. SP No.
72131; and the reinstatement of the Orders dated 22 October 2001 and 12 July 2002 of the DAR
Secretary in DAR Administrative Case No. A-9999-084-00. The Petition was docketed as G.R. No.
167543, and raffled to the Third Division of the Court. aATHES
On 27 June 2005, the Second Division of the Court resolved to consolidate G.R. No. 167543,
assigned to the Third Division, with G.R. No. 167540, pending with the Second Division, the latter
being the lower-numbered case.
Apparently still unaware of the afore-mentioned Resolution dated 27 June 2005 of the Second
Division, the Third Division issued a Minute Resolution on 20 July 2005 already denying the
Petition in G.R. No. 167543 for the failure of DAR to show that a reversible error had been
committed by the appellate court. DAR accordingly filed a Motion for Reconsideration of the denial
of its Petition.

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G.R. No. 167540 and No. 167543 were finally consolidated and given due course. During the
pendency of these cases, the Sangguniang Bayan and the Association of Barangay Captains (ABC) of
Nasugbu filed their separate Petitions for Intervention before this Court.
The Sangguniang Bayan of Nasugbu averred in its Petition for Intervention that its Chairman and
Members, as the legislators of Nasugbu, stand to benefit or suffer from the results of the pending
cases. The Local Government Code devolved upon them the important function of determining, on
behalf of their constituents, the appropriate use of the lands of Nasugbu, as would be embodied in a
Comprehensive Land Use Plan (CLUP). Per the record of the Sangguniang Bayan, the
three haciendas of Roxas & Co. in Nasugbu have not been reclassified to tourism use, consequently,
cannot be exempted from CARP coverage. The Sangguniang Bayan of Nasugbu further asserted that
it could not perform its function of determining appropriate land use in Nasugbu, and it would
remain inutile insofar as said function was concerned, unless the Court reverses the assailed
judgment of the Court of Appeals in CA-G.R. SP No. 72131 that the entire lands of Nasugbu had been
automatically reclassified by virtue of Presidential Proclamation No. 1520.
In its Petition for Intervention, the ABC of Nasugbu claimed that majority of its members are
CARP beneficiaries themselves, who are entitled in their own right to intervene in G.R. No. 167540
and No. 167543; and those who are not CARP beneficiaries are still residents of Nasugbu whose
rights may likewise be affected by the ruling of the Court of Appeals in CA-G.R. SP No. 72131. In
addition, the barangay captains of Nasugbu are the local chief executives tasked to help the DAR
implement the CARL at the grassroots level, as well as represent their barangay constituents in
voting on land use issues in Nasugbu. As such, they stand to gain or suffer from the outcome of the
two cases before this Court. The ABC of Nasugbu argued that with the automatic reclassification of
the lands in the entire Nasugbu to tourism use by Presidential Proclamation No. 1520, as the
appellate court erroneously and unjustly held, there was practically nothing more that could be
done as regards the land use plan for the municipality. Necessarily, there could be no way for
thebarangay chairmen to still help DAR as mandated by the Local Government Code since it would
already be legally impossible to implement the CARP in Nasugbu given the exemption of all lands in
said municipality from the program.
Roxas & Co. opposed the two Petitions for Intervention, contending that the parties intending to
intervene had no legal interest in G.R. No. 167540 and No. 167543. The judgment on appeal before
the Court does not deal with land use plans and zoning ordinances issued and implemented by
LGUs pursuant to the Local Government Code; instead, it involves laws that are enforced by the
DOT, through the PTA (for Presidential Proclamation No. 1520, implementing Presidential Decree
No. 564) 11 and the DAR (CARL). The intervention of the Sangguniang Bayan and ABC of Nasugbu
was already prohibited at this stage, and would only prejudicially and unduly delay the
proceedings. They are not indispensable parties and their interest should be the subject of separate
proceedings.
After further exchange of pleadings among the parties in G.R. No. 167540 and No. 167543, they
were finally directed by this Court to submit their respective Memoranda.
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B.
CARP Exemption of Certain Lots in Hacienda Palico, based on Nasugbu Municipal
Zoning Ordinance No. 4, series of 1982
G.R. No. 149548
On 15 October 1993, the DAR issued CLOA No. 6654 in the collective names of 202 farmerbeneficiaries, 12 137 of whom are members of DAMBA-NFSW. CLOA No. 6654 covered an area of
513.9863 hectares of Hacienda Palico, which was placed by the DAR under CARP through
compulsory acquisition.
Roxas & Co., through a letter dated 29 May 1997, applied for exemption from CARP coverage of
Lots No. 21, No. 24, No. 28, No. 31, No. 32 and No. 34, comprising 51.5472 hectares, situated in
Brgys. Cogunan and Lumbangan, Nasugbu, Batangas, which were included in CLOA No. 6654. Roxas
& Co. averred that the six lots were already reclassified as non-agricultural by the Nasugbu
Municipal Ordinance No. 4, Series of 1982, as approved by the Human Settlements Regulation
Commission (HSRC), now Housing and Land Use Regulatory Board, under Resolution No. 123 dated
4 May 1983; hence, placing said lots outside the coverage of CARL. This application for exemption
of Roxas & Co. was docketed as DAR Administrative Case No. A-9999-142-97. It proceeded
without notice being given to DAMBA-NFSW and other occupants of the lots.
The DAR Secretary took into consideration the following pieces of evidence submitted by Roxas
& Co. in support of the latter's application for exemption:
1.

Certification dated February 11, 1998 issued by the HLRB (sic) stating that Lot Nos. 21, 32,

28, and 34, and portions of Lot Nos. 31 and 24 are within the industrial zone based on the approved
Zoning Ordinance of the Municipality per HSRC Resolution No. R-123 dated May 4, 1983;
2.

Certification dated September 12, 1996 issued by the Office of the Municipal Planning and

Development Coordinator of Nasugbu, Batangas stating that the subject parcels of land are within
the industrial zone based on Municipal Ordinance No. 4, Series of 1982 and approved per HSRC
Resolution No. R-123, Series of 1983 dated May 4, 1983;
3.

Certification dated July 31, 1997 issued by the National Irrigation Administration (NIA)

stating that DAR Lot Nos. 32 and 34 are partially irrigated;

4.

Certification dated May 27, 1997 issued by the National Irrigation Administration (NIA)

stating that Lot Nos. 31, 24, 21 and 28 are not within the service area of any existing National
Irrigation System and Communal Irrigation System of NIA and not within the area programmed for
irrigation with firm funding commitment; and
5.

Certification dated September 11, 1997 issued by the [Municipal Agrarian Reform Officer

(MARO)] of Nasugbu, Batangas stating that DAR Lot No. 31, and portions of DAR Lot Nos. 24 and 21
are residential areas, Lot Nos. 32, 28, and 34 and remaining portions of DAR Lot No. 21 are vacant,

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and 1/3 of the remaining portion of DAR Lot No. 24 has occupants. The same certification states
that the subject parcels of land are covered by a CLOA. HSEIAT
Per Ocular Inspection conducted by the CLUPPI-2 OCI team, the prevailing land use of DAR Lot No.
31 and portions of DAR Lot Nos. 21 and 24 is (sic)residential. The rest of the lots are vacant and
covered mostly by grass and shrubs. Most of the occupants of DAR Lot Nos. 31, 21, and 24 are
workers of the Don Pedro Azucarera located south of the property. Irrigation canals were noted in
DAR Lot Nos. 32 and 34. 13
The DAR Secretary, in an Order dated 26 January 1999, denied the application for exemption in
DAR Administrative Case No. A-9999-142-97, basically due to the failure of Roxas & Co. to establish
the identity of the six lots subject thereof:
Initially, CLUPPI-2 based their 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, with an
aggregate area of 1,023.9999 hectares 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. 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
conducted by CLUPPI-2 with the ROD of Nasugbu, Batangas, the discrepancies "acknowledged and
initialled (sic)" by the ROD cannot be ascertained.
WHEREFORE, premises considered, an exemption clearance for the subject parcels of land covered
by CLOA No. 6654 having an area of 51.5472 hectares and situated at Brgys. Cogunan and
Lumbagan, Nasugbu Batangas is herebyDENIED. 14
The DAR Secretary likewise denied the Motion for Reconsideration of Roxas & Co. in another
Order dated 19 January 2001.
The DAR Secretary ratiocinated that CLOA No. 6654 was still valid and existing, except only as to
the three parcels of land subject of CA-G.R. SP No. 36299. 15 This being the case, Roxas & Co. could
not file the application for exemption of the six lots in question since the owners thereof were
already the farmer-beneficiaries to whom CLOA No. 6654 was issued.

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The DAR Secretary also remained steadfast in his earlier finding that the exact identity of the six
lots subject of DAR Administrative Case No. A-9999-142-97 cannot be satisfactorily ascertained
from the evidence submitted by Roxas & Co.:
Records also indicate that [Roxas & Co.] merely submitted the following Transfer Certificate of
Titles (sic) registered under the name of Roxas Y Cia: DTSaHI
TCT No.

Lot No.

Area (ha)

60019

125-A

0.5324

60020

125-B

0.2209

60021

125-C

0.2237

60022

125-D

1.1960

60023

125-E

1.4106

3.5836
=======

Total

The landholdings covered by the aforesaid titles do not correspond to the Certification dated
February 11, 1998 of the Housing and Land Use Regulatory Board, the Certification dated
September 12, 1996 issued by the Office of 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 HLURB and the
Municipal Planning Development Coordinator as to the area of the specific lots.
TCT

No.
HLURB

Area

per
MPDC

21

17.6113

17.6113

24

6.8088

16.8385

28

7.2333

7.2333

31

0.777

32

1.286

15.7902

34

0.6273

1.286

34.3437

58.7593
=======

Total

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With such discrepancy, which appears to be the result of inability to identify specifically the
landholdings, it would not be possible for us to grant the exemption clearance applied for. 16
Roxas & Co. filed with the Court of Appeals a Petition for Review under Rule 43 of the Rules of
Court, docketed as CA-G.R. SP No. 63146. DTISaH
The observations of the Court of Appeals in its Decision 17 dated 30 May 2001 were consistent
with those of the DAR Secretary. As regards the TCTs submitted by Roxas & Co., the appellate court
wrote:
We agree with the DAR that the submission, among others, of the certified true copies of titles of the
land subject of the application is necessary in order to ascertain the identity of the owner and of the
property applied for exemption.
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 issued by the Housing and Land Use Regulatory Board (HLURB), Office of the
Municipal Planning and Development Coordinator (OMPDC) of Nasugbu, Batangas, and the National
Irrigation Administration (NIA), Region IV refer, among others, to DAR Lot Nos. 21, 24, 28, 31, 32
and 34 (Annexes "E", "F", "G" and "N", pp. 55-57 and 98, Rollo). 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, respectively. 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 (sic) which it claims covers DAR Lot Nos. 28, 32
and 24 (TSN, April 24, 2001, pp. 43-44).
It is settled that mere allegation is not evidence and the party who alleges a fact has the burden of
proving it (Intestate Estate of the Late Don Mariano San Pedro y Esteban vs. Court of Appeals, 265
SCRA 735, 754). 18
The Court of Appeals noted the following discrepancies in the zoning classification of the land in
Brgys. Cogunan and Lumbangan where the six lots subject of the application for exemption are
supposedly located:
[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. While this claim is affirmed by the
Nasugbu OMPDC per certification dated September 12 and 19, 1996 (Annexes "F" and "N", supra), a
scrutiny of the said Ordinance shows that only Barangays Talangan and Lumbangan of the said
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municipality were classified as Industrial Zones (Annex "D", p. 53, Rollo). Barangays Cogunan was
not included. Although there are indications in the said Ordinance that some parts of Barangay
Cogunan are classified as residential, thus, non-agricultural, no evidence was submitted by [Roxas &
Co.] to prove that portions of the subject properties are located in these areas. In fact, the TCTs
submitted by [Roxas & Co.] show that the properties covered by said titles are all located at Barrio
Lumbangan (Annexes "H-1" to "H-5", supra). 19 DIcSHE
The appellate court discerned finally that while Roxas & Co. claimed that the total area of the six
lots subject of its application for exemption was 51.5472 hectares, the certifications of HLURB and
OMPDC showed that it was only 49.5066 hectares. In comparison, the aggregate area of the lands
covered by TCTs No. 60019 to No. 60023 was 3.5836 hectares. Roxas & Co. was unable to explain
these discrepancies.
Hence, the Court of Appeals prescribed that until and unless Roxas & Co. identifies, with
certainty, the six lots applied for exemption by showing their exact location and area; and adduces
proof sufficient to show that the properties referred to by the TCTs submitted in evidence and the
certifications issued by the HLURB, NIA, and the OMPDC of Nasugbu, are identical, the denial by
DAR of the application for exemption of Roxas & Co. must be upheld.
Yet, unlike the DAR Secretary, the appellate court still recognized the right of Roxas & Co. to
submit additional evidence in support of the latter's application for exemption for the six lots, thus:
However, this does not operate to divest [Roxas & Co.] of its right to present additional evidence
before the DAR to substantiate its claim that the subject lots are indeed exempt from the coverage
of RA 6657.
Meanwhile, in view of the Supreme Court ruling in Roxas & Co., Inc. vs. Court of Appeals
(supra) recognizing the rights of the farmer-beneficiaries to possess and till the lands awarded
them under CLOA 6654, respondent DAR may proceed to install farmer-beneficiaries in the lands
subject of the present dispute, without prejudice to a final determination of [Roxas & Co.]'s right
over subject properties. 20
The dispositive portion of the 30 May 2001 Decision of the Court of Appeals states:
WHEREFORE, herein petition is DENIED DUE COURSE without prejudice to [Roxas & Co.]
adducing additional evidence before the DAR for the ascertainment of the identity, exact location
and areas of the lands subject of the application for exemption. 21
The Motion for Reconsideration of Roxas & Co. was denied by the Court of Appeals in its
Resolution 22 dated 21 August 2001.

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In its Petition for Review under Rule 45 of the Rules of Court, docketed as G.R. No. 149548,
Roxas & Co. argues before this Court that:
THE ACT OF THE RESPONDENT DAR IN DISPOSSESSING [ROXAS & CO.] FROM ITS LAND, AND
ORDERING THE INSTALLATION OF ALLEGED FARMER BENEFICIARIES THEREON IS NULL AND
VOID. DHATcE
THE COURT OF APPEALS EXCEEDED ITS AUTHORITY IN ORDERING THE INSTALLATION OF
FARMER BENEFICIARIES UPON [ROXAS & CO.]'S PROPERTY NOTWITHSTANDING THE NULLITY
OF THE DAR'S ACTUATIONS[; 23
and seeks the following from the Court:
WHEREFORE, in view of the foregoing, [Roxas & Co.] prays that a Temporary Restraining Order be
immediately issued and thereafter a Writ of Preliminary Mandatory Injunction be issued upon such
terms and conditions as the Honorable Court may see fit to impose; and that after proceedings duly
taken[,]the REVERSAL and SETTING ASIDE of the Decision of the Hon. Court of Appeals in CA-G.R.
No. SP 63146 be ordered, insofar as the same allows the respondent DAR to allow installation of
farmer-beneficiaries on the land in dispute and insofar as CLOA 6654 is not nullified with respect to
the land in dispute; and thereafter that the Preliminary Mandatory Injunction be then made
permanent.
Such other relief as may be just and equitable under the premises is also prayed for. 24
DAMBA-NFSW filed a Motion to cite Roxas & Co. in contempt and for the dismissal of the latter's
Petition on the ground of forum-shopping, contending that the six lots sought to be exempted
herein were also the subject of CA-G.R. SP No. 82225 (G.R. No. 179650). HCTAEc
G.R. No. 179650
As previously narrated herein, after the Court of Appeals rendered its Decision dated 30 May
2001 and Resolution dated 21 August 2001 in CA-G.R. SP No. 63146, Roxas & Co. filed before this
Court a Petition for Review, docketed as G.R. No. 149548, challenging the supposed premature
installation of the farmer-beneficiaries to Lots No. 21, No. 24, No. 28, No. 31, No. 32 and No. 34,
situated in Brgys. Cogunan and Lumbangan, Nasugbu, Batangas, while awaiting resolution by the
DAR of the application of Roxas & Co. for exemption of the six lots in question.
At the same time, Roxas & Co. sought the re-opening by DAR of the proceedings in DAR
Administrative Case No. A-9999-142-97, so that Roxas & Co. could adduce additional evidence to
substantiate the latter's application for CARP exemption of the same six lots, plus Lot No. 36. The
DAR Secretary granted the request of Roxas & Co., and conducted further proceedings in DAR
Administrative Case No. A-9999-142-97 for the reception of the latter's additional evidence.
On 6 January 2003, the DAR Secretary issued an Order, this time, granting the application of
Roxas & Co. for CARP exemption of the original six lots, as well as Lot No. 36. The DAR Secretary
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deemed it appropriate to include Lot No. 36 in the application for exemption since the additional
documents presented by Roxas & Co. also covered the said lot.
According to the DAR Secretary, Roxas & Co. was able to establish the identity of all seven lots
based on the following evidence:
Records show that subject properties were originally registered under TCT No. T-985. This is
shown in the Certification dated 17 June 1998 issued by Alexander Bonuan, Deputy Register of
Deeds II, Registry of Deeds, Nasugbu, Batangas. The pertinent portion of said Certification states as
follows:
xxx

xxx

xxx

CERTIFICATION
TO WHOM IT MAY CONCERN:
This is to certify that Lot No. 125 of Psd-04016141 (OLT) under TCT No. 49946 is a transfer from
TCT-985. Further, it is certified that Lot 125-N Psd-04-046912 under TCT No. T-60034 is a transfer
from TCT No. T-49946.
xxx

xxx

xxx

In a letter dated 18 July 2000 addressed to Director Ricardo R. San Andres, Head, Center for Land
Use, Policy, Planning and Implementation (CLUPPI)-2 Secretariat, Deputy Register of Deeds Bonuan
clarified that "TCT No. 49946" should read "T.C.T. No. 59946." Attached to said letter is a certified
true copy of TCT No. T-59946. A scrutiny of TCT No. T-59946 shows that it covers a parcel of land
identified as Lot No. 125 of the subdivision plan Psd-04-016141 with an area of 947.8417 hectares
situated in Brgys. Bilaran, Lumbangan, Cogonan and Reparo, Nasugbu, Batangas. acITSD
TCT No. T-59946 (Lot No. 125) was subsequently subdivided into various lots including the
following:
NEW TCT NO.

LOT NO. AREA (in has.)

T-60019

125-A

0.5324

T-60020

125-B

0.2209

T-60021

125-C

0.0237

T-60022

125-D

1.1960

T-60023

125-E

1.4106

T-60034

125-N

839.5059

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A scrutiny of TCT Nos. T-60019, T-60020, T-60021, T-60022, T-60023 and T-60034 shows that they
are transfers from TCT No. T-59946. Furthermore, a Certification dated 6 September 2001 issued
by Dante G.
Ramirez, Deputy Register of Deeds I, Nasugbu, Batangas, states that the mother title of TCT Nos. T60019, T-60020, T-60021, T-60022, T-60023 and T-60034 is TCT No. T-985 registered in the name
of Roxas Y Cia.
On 15 October 1993, CLOA No. 6654 was issued covering a 513.9863-hectare property previously
registered in the name of Roxas & Company, Inc. A photocopy of CLOA No. 6654 shows that DAR
Lots Nos. 21, 24, 28, 31, 32, 34 and 36 are covered therein. The corresponding TCTs of said lots are
shown in the Certification dated 8 June 2001 issued by MARO Limjoco, Jr., the pertinent portions of
which states (sic) as follows:
xxx

xxx

xxx

CERTIFICATION
TO WHOM IT MAY CONCERN:
This is to certify that as per verification with available records in this office, the parcels of land
situated in Barangay Lumbangan, Nasugbu, Batangas, identified below as DAR lot Numbers used to
be covered by the following Transfer Certificate of Title issued by the Registry of Deeds in Nasugbu,
Batangas, to wit: ASTDCH
Lot Nos.
31

Areas (has.)
0.7770

TCT Nos.
T-60019
T-60020
T-60021

34

1.2860

T-60034

32

15.7902

T-60034

28

7.2333

T-60034

24

5.6128

T-60034

1.1960
21

17.6113
1.4106

36

0.6300

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T-60034
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This is to certify further that the above-mentioned lots are now all covered and portions of CLOA
No. 6654. 25
Now as to whether the seven lots are exempted from CARP coverage, the DAR Secretary
answered in the affirmative, analyzing the available evidence as follows:
In the case at hand, the Certification dated 19 September 1996 issued by Reynaldo H. Garcia, Zoning
Administrator of Nasugbu, Batangas, states, among others, that Lots Nos. 31, 24, 21, 32, 28 and 34
situated in Brgys. Cogunan and Lumbangan, Nasugbu, Batangas, are within the Industrial Zone
based on the Comprehensive Zoning Regulation of Municipal Ordinance No. 4, Series of 1982,
approved by the HSRC, pursuant to Resolution No. R-123 dated May 4, 1983. Moreover, a
Certification also dated 19 September 1996 issued by Zoning Administrator Reynaldo H. Garcia
states that DAR Lot No. 36 with an area of 0.6273 hectares situated in Brgy. Lumbangan, Nasugbu,
Batangas, is within the Industrial Zone based on the Comprehensive Zoning Regulation of Municipal
Ordinance No. 4, Series of 1982, and approved by HSRC pursuant to Resolution No. R-123 dated
May 4, 1983. Moreover, a Certification dated 7 January 1998 issued by Maria Luisa G. Pangan, under
authority of the HLURB Board Secretariat, states that Resolution No. 28/Municipal Ordinance No. 4
of the Sangguniang Bayan of Nasugbu, Batangas, dated 18 April 1982, was approved by the HSRC,
now the HLURB, under Resolution No. R-123, Series of 1983, dated 4 May 1983. Clearly, the subject
properties were already reclassified to industrial use prior to 15 June 1988, hence, are beyond the
ambit of the CARP. acHDTA
However, we note that the Certification dated 19 September 1996 issued by Zoning Administrator
Reynaldo H. Garcia with respect to DAR Lot No. 36 only indicates an area of 0.6273 hectares as
having been reclassified as part of Industrial Zone pursuant to the Comprehensive Zoning
Regulation of Municipal Ordinance No. 4, Series of 1982, approved by HSRC pursuant to Resolution
No. R-123 dated 4 May 1983. On the other hand, herein [Roxas & Co.]'s listing and the Certification
dated 8 June 2001 issued by MARO Limjoco, Jr., shows that DAR Lot No. 36 has an area of 0.6300
hectare. Because the remaining portion with an area of 0.0027 hectare of DAR Lot No. 36 is not
included in the Certification issued by Zoning Administrator Reynaldo H. Garcia, said portion
should be denied for exemption.
This Office finds proper compliance by the [Roxas & Co.] with the requirements for exemption
clearance under DAR AO 6 (1994). 26
As a last note, the DAR Secretary differentiated the present application of Roxas & Co. for
exemption of the seven lots in Hacienda Palico, from the application of the same corporation for
exemption of the entire Haciendas Caylaway, Banilad, and Palico in DAR Administrative Case No. A196
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9999-084-00 (G.R. No. 167540 and No. 167543). The DAR Secretary, in an Order dated 22 October
2001, denied the application for exemption in the latter case and directed the DAR field office
personnel concerned to immediately proceed with the distribution of the said haciendas to qualified
farmer-beneficiaries. The DAR Secretary explained herein that:
. . . the grounds for exemption invoked in the present case and the [DAR Administrative Case No. A9999-084-00] cited above are not the same. The present case involves an application for exemption
on the ground that the properties enumerated herein were classified in 1982 for industrial use by
the Municipality of Nasugbu, Batangas, which reclassification was approved by the HLURB prior to
15 June 1988. On the other hand, the ground for exemption in ADMIN. CASE No. A-9999-084-00
was an allegation that the properties involved therein were reclassified as tourist zone by virtue of
Presidential Proclamation No. 1520. Thus, we find no inconsistency between our findings in the
present case and that in ADMIN. CASE NO. A-9999-084-00 as the two (2) cases
involves (sic) different issues. 27
Accordingly, the 6 January 2003 Order of the DAR Secretary in DAR Administrative Case No. A9999-142-97 ended with the following decretal portion:
WHEREFORE, premises considered, the Application for Exemption Clearance from CARP coverage
filed by Roxas & Company, Inc., involving seven (7) parcels of land identified as DAR Lots Nos. 21,
24, 28, 31, 32, 34 and 36 (portion only with an area of 0.6273 hectares), covered by TCT Nos. T60019, T-600020, T-60021, T-60022, T-60023 and T-60034 with an aggregate are of 51.5445
hectares located at Brgys. Bilaran, Lumbangan, Cogonan and Reparo, Nasugbu, Batangas, is hereby
GRANTED, subject to the following conditions: DHSEcI
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 by the
concerned Provincial Agrarian Reform Adjudicator has been made on the amount of disturbance
compensation due and entitlement of such farmer-occupants thereto;
2.

No development shall be undertaken within the subject parcels of land until the appropriate

disturbance compensation has been paid to the farmer-occupants. 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 to a separate

proceeding before the Provincial Agrarian Reform Adjudicator of Batangas.

The Order dated 19 January 2001 issued by this Office, in so far as the installation of the farmersbeneficiaries in the areas or portions of subject landholdings, is hereby lifted. 28

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When its Motion for Reconsideration was denied by the DAR Secretary in an Order dated 12
December 2003, DAMBA-NFSW filed with the Court of Appeals a Petition forCertiorari under Rule
65 of the Rules of Court, which was docketed CA-G.R. SP No. 82225.
The Court of Appeals, in its Decision 29 dated 31 October 2006, adjudged that DAMBA-NFSW
availed itself of the wrong mode of appeal. It is already settled that judicial review of decisions,
orders, or resolutions of the DAR Secretary is governed by Rule 43 of the Rules of Court. By
pursuing a special civil action for certiorari under Rule 65, rather than the mandatory petition for
review under Rule 43, DAMBA-NFSW rendered its case dismissible on the ground of wrong mode of
appeal, pursuant to the fourth paragraph of Supreme Court Circular No. 2-90.
Even on the merits, the Court of Appeals found the Petition of DAMBA-NFSW dismissible.
The Court of Appeals agreed with the DAR Secretary that Roxas & Co. did not commit forumshopping in filing two applications for exemptions: (1) DAR Administrative Case No. A-9999-14297, involving the seven lots in Hacienda Palico; and (2) DAR Administrative Case No. A-9999-08400, involving the entire Haciendas Caylaway, Banilad, and Palico, since the two cases were based on
different sets of facts and laws.
The appellate court further held that DAMBA-NFSW was not denied due process when DAR heard
DAR Administrative Case No. A-9999-142-97, the application of Roxas & Co. for exemption of the
seven lots in Hacienda Palico, without notice to DAMBA-NFSW. The procedural defect, if any, was
cured by the filing by DAMBA-NFSW of numerous pleadings after the issuance by the DAR Secretary
of his Order dated 6 January 2003, granting the application for exemption of Roxas & Co. In
particular, DAMBA-NFSW filed a Motion for Reconsideration, Reply to Applicant's Opposition to
Oppositor's Motion for Reconsideration, and Sur-Rejoinder. Denial of due process cannot be
successfully invoked where a party was given the chance to be heard on his motion for
reconsideration. TDcAaH
The Court of Appeals refused to disturb the findings of the DAR Secretary that the seven lots
were already non-agricultural prior to the effectivity of the CARL on 15 June 1988 and, thus,
exempted from CARP coverage. The grant of exemption from coverage is a matter involving the
administrative implementation of the CARP, a matter which is within the exclusive jurisdiction of
the DAR Secretary. It behooves the courts to exercise great caution in substituting their own
determination of the issue, unless there is grave abuse of discretion committed by the
administrative agency. Under the circumstances of the instant case, the appellate court finds no
such abuse on the part of the DAR Secretary.
Given the foregoing premises, the Court of Appeals dismissed the Petition of DAMBA-NFSW.
The appellate court subsequently denied the Motion for Reconsideration of DAMBA-NFSW in a
Resolution dated 16 August 2007.

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Now DAMBA-NFSW comes before this Court via a Petition for Review under Rule 45 of the Rules
of Court, docketed as G.R. No. 179650. DAMBA-NFSW grounds its Petition on the following
assignment of errors:
1.

THE COURT OF APPEALS THIRD DIVISION COMMITTED A SERIOUS REVERSIBLE ERROR IN

NOT FINDING RESPONDENT ROXAS & CO. INC. AS HAVING VIOLATED THE RULE AGAINST
FORUM-SHOPPING IN FILING A PETITION FOR REVIEW WITH THE SUPREME COURT SECOND
DIVISION [G.R. NO. 149548], AS WELL AS IN FILING A PETITION TO RE-OPEN ITS EARLIER
PETITION FOR CARP EXEMPTION ON SUBJECT 51.54-HECTARE PROPERTY, ON THE BASIS OF THE
SAME RESOLUTIONS OF THE COURT OF APPEALS IN CA-G.R. SP NO. 63146; AND
2.

THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS REVERSIBLE ERROR IN

CONSIDERING MERE CERTIFICATIONS ISSUED BY THE CONCERNED GOVERNMENT AGENCIES AS

SUBSTANTIAL COMPLIANCE WITH THE RULES ON GRANTING CARP EXEMPTION CLEARANCE ON
SUBJECT PROPERTY, BASED (sic) DAR AO 06, S. 1994, PER DOJ OPINION, S. 1990, WITHOUT
SUBMITTING THE MUNICIPAL COMPREHENSIVE LAND USE PLAN DELINEATING SUBJECT
PROPERTY AS HAVING BEEN RECLASSIFIED INTO NON-AGRICULTURAL USE.

30

DAMBA-NFSW prays for the Court to reverse and set aside the 31 October 2006 Decision and 16
August 2007 Resolution of the Court of Appeals in CA-G.R. SP No. 82225; as well as to summarily
dismiss the Petition for Review of Roxas & Co. in G.R. No. 149548, pending before another division
of the Court, on the ground of forum-shopping.
After Roxas & Co. had filed its Comment to the Petition, DAMBA-NFSW was directed to file its Reply.
G.R. No. 167505
On 29 September 1997, Roxas & Co. filed with the DAR an application for exemption from CARP
coverage of nine lots, identified as Lots No. 20, No. 13 (portion), No. 37, No. 19-B, No. 45, No. 47, No.
48-1, No. 48-2, and No. 49, located in Brgys. Cogonan and Biliran, Nasugbu, Batangas, with an
aggregate area of 45.977 hectares. All nine lots were part of Hacienda Palico, covered by TCT No. T985. This application for exemption was docketed as DAR Administrative Case No. A-9999-00898. CaSAcH
However, the DAR had previously placed Hacienda Palico, by compulsory acquisition, under the
CARP, and as early as 1993, distributed CLOAs over the same to farmer-beneficiaries. About 15
hectares of the lots subject of DAR Administrative Case No. A-9999-008-98 is covered by CLOA No.
6654 issued collectively to members of DAMBA-NFSW; while the rest is covered by individual
CLOAs issued to members of KAMAHARI.
In support of its application for exemption in DAR Administrative Case No. A-9999-008-98,
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;
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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 applications for exemption with the DAR. The same Board Resolution revoked the
authorization previously granted to the Sierra Management & Resources Corporation to represent
the applicant 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;
7.

Letter dated 11 November 1994 sent by Alfredo M. Tan II, Director of HLURB, Region IV,

addressed to then DAR Regional Director Percival Dalugdug, clarifying the classification of subject
parcels of land, the pertinent portion of which reads as follows: TSaEcH
xxx
Art. V.

xxx

xxx

Sec. 3, paragraph A VII or Zone Boundaries of the Zoning Ordinance of Nasugbu

describes Neighborhood Units as settlements clusters/areas in the different barangays outside of

the Poblacion specifically Brgys. Lu(m)bangan, Wawa, Lo(oc), Aga and Bilaran.
In the formulation of the Comprehensive Development Plan, the abovementioned barangays
emerged as Nodal Growth Barangays, thus, they were highlighted in the Land Use Plan and Zoning
Ordinance. They were classified under Urban Core Zone but categorized further as settlement
clusters outside of the Poblacion. The urban core zone proper is the Poblacion and its expansion
areas while the neighborhood residential areas will be the urbanized areas in the barangays by the
end of the planning period which is year 2000.
xxx

xxx

xxx" (Emphasis and underscoring supplied)

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8.

Two (2) Certifications both dated 8 September 1997 issued by Rolando T. Bonrostro,

Regional Irrigation Manager, National Irrigation Administration (NIA), Region IV, stating that the
subject parcels of land are not irrigated, not irrigable and not covered by an irrigation project with
firm funding commitment;
9.

Certification dated 18 January 1999 issued by Manuel J. Limjoco, Jr., Municipal Agrarian

Reform Officer (MARO) of Nasugbu, Batangas, stating that the subject parcels of land are not
covered by Operation Land Transfer but are covered by Collective Certificates of Land Ownership
Award (CLOAs) issued to twenty-three (23) farmer-beneficiaries, more or less;
10.

Certification dated 10 September 2001, issued by Manuel J. Limjoco, Jr., MARO of Nasugbu,

Batangas, stating that there was failure to reach an amicable settlement on the amount of
disturbance compensation to be paid by Roxas & Company, Inc., to the CLOA holders of subject
landholdings; and
11.

Photocopy of a Petition to fix disturbance compensation filed by Roxas & Company, Inc., duly received on 28 September 2001 by the Provincial

Agrarian Reform Adjudicator (PARAD) of Batangas. 31

The CLUPPI-2 OCI Team submitted its Investigation Report, stating that:
a.

Lot Nos. 20, 13 portion, 37 and 19-B with an aggregate area of 30.9025 hectares located at

Brgy. Cogonan are mostly planted to sugarcane. Irrigation canals were noted adjacent to said lots.
However, said irrigation canals serve the adjoining OLT-covered areas and not the subject parcels
of land; 2005cdasia
b.

Lot Nos. 45, 47, 49, 48-1 and 48-2 with an aggregate area of 15.0746 hectares located at Brgy.

Bilaran are also planted to sugarcane and are situated along the Provincial Road. No irrigation
system was noted in the area; and
c.

The dominant uses of the adjacent areas are residential, institutional and agricultural. 32

After consideration of the evidence submitted by Roxas & Co. and the Investigation Report of the
CLUPPI-2 OCI Team, the DAR Secretary issued an Order dated 6 November 2002, finding
substantial compliance by Roxas & Co. with the requirements for exemption clearance under DAR
Administrative Order No. 6, series of 1994. The DAR Secretary opined that pursuant to DOJ Opinion
No 44, series of 1990, lands already reclassified by a valid zoning ordinance for commercial,
industrial, or residential use, which ordinance was approved by the HLURB prior to the effectivity
of the CARL on 15 June 1988, no longer needed any conversion clearance. The DAR Secretary thus
disposed:
WHEREFORE, premises considered, the Application of Exemption Clearance from CARP coverage
filed by Roxas & Company, Inc., involving nine (9) parcels of land identified as Lots Nos. 20, 13
(portion), 37, 19-B, 45, 47, 49, 48-1 and 48-2, which are portions of a landholding covered by
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Transfer Certificate of Title (TCT) No. 985, with an aggregate area of 45.9771 hectares located at
Barangays Cogonan and Bilaran, Nasugbu, Batangas, is hereby GRANTED, subject to 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.

DAMBA-NFSW filed with the DAR Secretary a Motion for Reconsideration of the 6 November
2002 Order, based on the following assertions: (1) the lack of notice to DAMBA-NFSW was in
violation of its right to due process, thereby rendering the assailed Order null and void; (2) the
application for exemption of Roxas & Co. was in violation of the anti-forum shopping rule
considering its pending application for exemption of the entire Hacienda Palico and two
other haciendas; and (3) the grant of the application for CARP exemption of the nine lots were
contrary to law and jurisprudence. EHSTDA
In an Order dated 12 December 2003, the DAR Secretary denied the Motion for Reconsideration
of DAMBA-NFSW. He ruled that an application for CARP exemption pursuant to DOJ Opinion No. 44,
series of 1994, was non-adversarial or non-litigious in nature. There was nothing in the DARAB
Rules that required the giving of notice to occupants of a landholding subject of an application for
CARP exemption. There was also no basis to declare that Roxas & Co. violated the rule on forumshopping since DAMBA-NFSW did not submit evidence showing that the nine lots subject of the
present application were identical to those subject of the other application for exemption of Roxas
& Co. Moreover, there was a difference in the bases for the two applications for exemption: the
present one was based on a DOJ Opinion, while the other was based on a Presidential Proclamation.
DAMBA-NFSW received on 17 December 2003 a copy of the Order dated 12 December 2003 of
the DAR Secretary, wherein the latter denied the former's Motion for Reconsideration. Sixty-one
days thereafter, on 16 February 2004, DAMBA-NFSW filed with the Court of Appeals a Motion for
Extension of Time (To File Petition Under Rule 65), requesting an additional period ending on 1
March 2003 within which to file said Petition. Yet, DAMBA-NFSW filed its Petition
for Certiorari, docketed as CA-G.R. SP No. 82226, only on 3 March 2004.

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The Court of Appeals promulgated its Decision 33 on 20 December 2004, dismissing the Petition
for Certiorari of DAMBA-NFSW. The appellate court held that any decision, order, award, or ruling
of the DAR on any agrarian dispute or on any matter pertaining to the implementation of agrarian
reform laws may be brought to the Court of Appeals within 15 days from receipt thereof by filing an
appeal by certiorari under Rule 43 of the Rules of Court, and not by special civil action
of certiorari under Rule 65. The right of DAMBA-NFSW to file an appeal by certiorari under Rule 45
expired on 2 January 2004. Certiorari under Rule 65 cannot serve as a substitute for a lost appeal.
The Court of Appeals also pointed out that assuming arguendo that certiorari under Rule 65 was
the proper procedural remedy for the case at bar, DAMBA-NFSW still lost the said remedy due to
the delayed filing of its Petition. In its Motion for Extension of Time, DAMBA-NFSW requested for 15
more days or until 1 March 2004 within which to file its Petition forCertiorari; but it only did so on
3 March 2004. As a result, the assailed Orders of the DAR Secretary attained finality on 2 March
2004. The power of the appellate court to review under Rule 65 does not carry with it the authority
to alter final and, therefore, immutable judgments; nor to restore remedies lost.
Even if the Court of Appeals was to brush aside the procedural infirmities of the Petition, it found
that the Orders dated 6 November 2002 and 12 December 2003 of the DAR Secretary in DAR
Administrative Case No. A-9999-008-98 were in accord with the facts on record, as well as
jurisprudence on the matter, and hence, no abuse of discretion, much more of such a grave nature,
could be spoken of in the present case. TaDAHE
The Motion for Reconsideration of DAMBA-NFSW was denied by the Court of Appeals in a
Resolution dated 7 March 2005. DAMBA-NSFW received a copy of said Resolution on 11 March
2005.
DAMBA-NFSW twice moved for extension of time within which to file its Petition for Review
under Rule 45 of the Rules of Court: first, for 15 days; and second, for another 10 days.
DAMBA-NFSW filed its Petition for Review with this Court, docketed as G.R. No. 167505, on 21
April 2005. DAMBA-NFSW alleged that the Court of Appeals committed reversible error in (1)
denying the Petition for Certiorari of Roxas & Co. in CA-G.R. SP No. 82226 for having been filed two
days late; (2) failing to nullify for grave abuse of discretion the Orders of the DAR Secretary issued
in violation of the right to due process of DAMBA-NFSW, the rule against forum-shopping, and the
doctrine of res judicata; and (3) ruling that the DAR Secretary did not commit grave abuse of
discretion when he granted the application of Roxas & Co. for exemption of the nine lots despite the
latter's failure to present the Comprehensive Land Use Plan of Nasugbu, Batangas.
DAMBA-NFSW prayed in its Petition that the Court render judgment that (1) nullifies, reverses, and
sets aside the Decision dated 20 December 2004 and Resolution dated 7 March 2005 of the Court of
Appeals in CA-G.R. SP No. 82226, as well as the Orders dated 6 November 2002 and 12 December
2003 of the DAR Secretary in DAR Administrative Case No. A-9999-008-98; and (2) declares the
nine lots in dispute to be within CARP coverage and denies the application for CARP exemption of
Roxas & Co. for the same properties.
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However, in a Resolution dated 29 June 2005, the Court denied the Petition for Review of
DAMBA-NFSW for late filing since it was filed beyond the extended period. Also, DAMBA-NFSW
failed to show that the Court of Appeals committed any reversible error in the challenged decision
and resolution as to warrant the exercise by the Court of its discretionary appellate jurisdiction.
DAMBA-NFSW filed a Motion for Reconsideration of the 29 June 2005 Resolution of this Court. It
maintained that difficulty in reproducing the voluminous documents to be attached to the Petition
and a computer virus that destroyed its counsel's case files compelled DAMBA-NFSW to seek the
additional time for the filing of its Petition. In meritorious instances, extension is allowed up to a
maximum of 30 days. DAMBA-NFSW was able to file its Petition for Review herein without reaching
the maximum extended period of 30 days. Most importantly, DAMBA-NFSW asseverated that it has
a meritorious case which deserves full ventilation of issues in order to protect the substantive
rights of the parties, and dispense real justice and prevent the miscarriage thereof.
In its Comment to the Motion for Reconsideration of DAMBA-NFSW, Roxas & Co. asserted that
the former's Petition for Review was indeed filed late and was properly denied by the Court in its
29 June 2005 Resolution. Roxas & Co. invoked A.M. No. 00-2-14-SC which provided that any
extension of time to file the required pleading should be counted from the expiration of the period
regardless of the fact that said due date is a Saturday, Sunday, or legal holiday. The original 15-day
period for DAMBA-NFSW to file its Petition for Review expired on 26 March 2005, a Saturday. The
15-day extension requested for by DAMBA-NFSW should commence immediately upon expiration
of the original period on 26 March 2005, ending on 10 April 2005, a Sunday. When DAMBA-NFSW
sought another 10-day extension, the same should be counted from 10 April 2005. Hence, DAMBANFSW only had until 20 April 2005 within which to file its Petition for Review. When DAMBA-NFSW
filed its Petition on 21 April 2005, it was already one day late. cATDIH
Meanwhile, in its Comment to the Petition of DAMBA-NFSW, Roxas & Co. reiterated its argument
that the said Petition was filed late. Additionally, Roxas & Co. argued that the Petition was an
unverified pleading that should be dismissed. The Verification attached to the Petition was fatally
defective for it did not refer to the contents of said Petition, but to those of a motion for
reconsideration. Roxas & Co. further maintained that it did not commit a violation of the rule
against forum-shopping; and that the Court of Appeals did not commit any error warranting the
reversal of its Decision dated 20 December 2004 and Resolution dated 7 March 2005 in CA-G.R. SP
No. 82226.
In both of its Comments, Roxas & Co. prayed for the denial of the Motion for Reconsideration of
DAMBA-NSFW of the 29 June 2005 Resolution of this Court, which earlier denied the Petition for
Review of DAMBA-NFSW.
C.

Petitions for Partial and Complete Cancellation of CLOA No. 6654

G.R. No. 167845

As previously recounted herein, CLOA No. 6654 was issued by the DAR on 15 October 1993 in
the collective names of farmer-beneficiaries, who are mostly members of DAMBA-NFSW. It covered

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an area of 513.9863 hectares of Hacienda Palico, including the following three parcels of land, with
an aggregate area of 103.1436 hectares:
Lot No.

TCT No.

Location

Area (hectares)

125-K

TCT No. T-60028

Brgy. Biliran

125-M

TCT No. T-60032

Sitio Sagbat, Brgy. Lumbangan

125-L

TCT No. T-60033 Sitio Lumang Bayan, Brgy. Lumbangan

27.414
37.8648
37.8648

103.1436
========

Total

In separate letters dated 14 January 1994 to the MARO, Roxas & Co. protested the inclusion of
the afore-mentioned three lots in CLOA No. 6654, and demanded that CLOA No. 6654 be cancelled
insofar as the three lots were concerned. Roxas & Co. maintained that by virtue of Nasugbu
Municipal Zoning Ordinance No. 4, series of 1982, the three lots were already reclassified to
residential and industrial use. The protest of Roxas & Co. was later elevated to the Office of the DAR
Regional Director, Region IV, for further proceedings; and then to the Office of the DAR Secretary
for final disposition. DScTaC
In a letter-decision dated 13 July 1994, the DAR Secretary denied the protest of Roxas & Co. and
the latter's request for cancellation of CLOA No. 6654 pertaining to the three lots in Brgys. Biliran
and Lumbangan. The DAR Secretary ruled that "only those residential clusters/areas, AFP Camp,
Administration building and motor pool, church, schools and cemetery in Bgy. Lumbangan (Sitios
Sagbat and Lumang Bayan) and Biliran are exempt from CARP coverage[;]" adding that "actual
survey should be done to establish the boundaries of the areas that are deemed exempted from
CARP vis--vis areas that are not."
Roxas & Co. sought reconsideration of the foregoing letter-decision of the DAR Secretary in a
letter dated 2 August 1994; but the DAR Secretary denied the Motion in an Order dated 20
December 1994.
Roxas & Co. then filed with the Court of Appeals on 27 January 1995 a Petition for Review under
Rule 43 of the Rules of Court, docketed as CA-G.R. SP No. 36299.
The Court of Appeals rendered its Decision 34 in CA-G.R. SP No. 36299 on 2 April 1996, favoring
Roxas & Co. The appellate court found that the three lots had already been reclassified as
residential by Nasugbu Municipal Zoning Ordinance No. 4, enacted in 1982; while the municipal
town plan based on said zoning ordinance had been approved by the HRSC, now HLURB, as early as
1983. Therefore, the three lots had long been residential when the CARL took effect on 15 June
1988. The very same lands were also designated by Nasugbu Municipal Ordinance No. 4, series of
1982, as "Medium and Heavy Industrial Zone," which were definitely non-agricultural.

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The Court of Appeals brushed aside the argument of the DAR Secretary and officials that certain
portions of the three lots in dispute were still being used for agricultural purposes. What mattered
was that the three lots had already been reclassified as non-agricultural prior to the effectivity of
the CARL.
The Court of Appeals further found merit in the contention of Roxas & Co. that the latter was
deprived of due process because; (1) the DAR failed to identify with certainty the land subject of the
compulsory acquisition, thereby preventing Roxas & Co. from disputing the issuance of CLOA No.
6654 and from determining the valuation of the land covered by said certificate; and (2) the DAR
violated its own procedural guidelines by distributing the land covered by CLOA No. 6654 even
before Roxas & Co. received payment of compensation for its property.
The fallo of the 2 April 1996 Decision of the Court of Appeals in CA-G.R. SP No. 36299 reads:
WHEREFORE, the instant petition for review is hereby GRANTED and the challenged letterdecision dated July 13, 1994, and the order dated December 20, 1994 of the respondent Secretary
of Agrarian Reform, as well as the collective Certificate of Land Ownership Award (CLOA) No. 6654
issued by the same respondent on October 15, 1993 over the three (3) parcels of land herein
involved, are hereby NULLIFIED, VACATED and SET ASIDE. No pronouncement as to
costs. 35 TcSAaH
The foregoing Decision became final and executory, and entry of judgment was made on 11 April
1997.
Subsequently, relying on the Decision dated 2 April 1996 of the Court of Appeals in CA-G.R. SP
No. 36299, Roxas & Co. filed before the PARAD on 26 January 2001 a Petition, docketed as DARAB
Cases No. R-401-003-2001 to No. R-401-005-2001, praying for the cancellation of CLOA No.
6654 insofar as it covered the same three parcels of land.
It must be noted though that the Decision dated 2 April 1996 of the Court of Appeals in CA-G.R.
SP No. 36299 stated that the land area of Lot No. 125-L, covered by TCT No. T-60033, was 37.8648
hectares; while the Petition in DARAB Cases No. R-401-003-2001 to No. R-401-005-2001 alleged
that the land area of the same lot was slightly smaller at 36.9796 hectares. Consequently, the total
land area of the three lots subject of DARAB Cases No. R-401-003-2001 to No. R-401-005-2001 was
averred to be 102.2614 hectares.
DAMBA-NFSW, on one hand, and the MARO and Provincial Agrarian Reform Officer (PARO), on
the other, separately sought the dismissal of DARAB Cases No. R-401-003-2001 to No. R-401-0052001. They argued that the applications for partial cancellation of CLOA No. 6654 contravened the
Decision dated 17 December 1999 of this Court in Roxas & Co. v. Court of Appeals, nullifying the
acquisition proceedings of DAR over the threehaciendas of Roxas & Co. for failure of DAR to observe
due process therein, and remanding the case to the DAR for proper acquisition proceedings and
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determination of the application of Roxas and Co. for conversion of the three haciendas. They
emphasized that this Court refrained from nullifying the CLOAs issued by the DAR, which included
CLOA No. 6654, to give DAR the chance to correct itself.
DAMBA-NFSW and the MARO and PARO also invited the attention of the PARAD to DAR
Administrative Case No. A-9999-142-97 (G.R. No. 149548 and No. 179650), the application for
CARP exemption filed by Roxas & Co. with the DAR, covering Lots No. 21, No. 24, No. 26, No. 31, No.
32, and No. 34, located in Brgys. Cogonan and Lumbangan, Nasugbu, Batangas, with an aggregate
area of 51.5472 hectares. They claimed that these six lots are superimposed over Lot No. 125-K, Lot
No. 125-M, and Lot No. 125-L, subject of DARAB Cases No. R-401-003-2001 to No. R-401-005-2001,
because of a defective subdivision survey. The DAR Secretary denied the application for CARP
exemption of Roxas & Co. in DAR Administrative Case No. A-9999-142-97, precisely because the
latter was unable to establish with certainty the identity of the six lots subject of said application.
The appeal of Roxas & Co. of the denial of its application for exemption of the six lots in DAR
Administrative Case No. A-9999-142-97 was then pending before the Court of Appeals, and
docketed as CA-G.R. SP No. 63146. 36
On 21 May 2001, the PARAD issued a Joint Order in DARAB Cases No. R-401-003-2001 to No. R401-005-2001, granting the partial cancellation of CLOA No. 6654, insofar as it pertains to Lots No.
125-K, No. 125-M, and No. 125-L.
The PARAD differentiated between Roxas & Co. v. Court of Appeals from DARAB Cases No. R-401003-2001 to No. R-401-005-2001; and explained why the Decision dated 17 December 1999 of this
Court in the former case did not bar the applications for partial cancellation of CLOA No. 6654 in the
latter, to wit: cEaCTS
Admittedly, while both cases have but one common essential which is the irregularly generated
collective CLOAs, one among which is CLOA No. 6654, however, the causes of action pursued by the
suitor and the subject matter, albeit referred to generally as Hacienda Palico, are totally different,
separate and distinct when taken in particular. [Roxas & Co.] in the instant petitions is not seeking
the cancellation of CLOA 6654 on the ground of lack of due process but on the basis of a previous
finding by the appellate Court, being a competent authority, that three parcels of land which were
included in CLOA 6654 are actually outside the scope of CARP and on its judicial pronouncement
declaring them exempt/excluded therefrom for which very reason, the appellate Court ordered
CLOA 6654 "nullified, set aside and vacated" in respect of the said lots. The Supreme Court decision,
upon the other hand, ruled for the nullification of the acquisition proceedings for lack of due
process and remanding the matter in controversy to the DAR for proper acquisition proceedings
and determination of [Roxas & Co.]'s application for conversion in strict accord with the law and its
implementing guidelines and procedures but sustaining the CLOAs already issued in order to give
DAR the chance or opportunity to correct itself and for the meantime maintaining the subject
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properties under the stewardship of the actual tillers or cultivators who shall hold the same in trust
for the true landowner. By unmistakable implication, what is contemplated by the Supreme Court
decision are those lands devoted to or suitable for agriculture (Sec. 4, R.A. 6657) and such lands
although devoted to agricultural activity are negotiable for conversion (DAR Adm. No. 07, Series of
1997) by reason of their natural features and/or characteristics but not lands which have already
been previously classified for non-agricultural uses (DOJ Opinion No. 44, Series of 1990 in relation
to Sec. 3, (c) (sic) and judicially declared excluded or exempt from CARP coverage as in the case of
the three lots in question. Moreover, the subject parcels of land are not and have never been in the
actual possession, much less under the cultivation, of any member of [DAMBA-NFSW], hence, not
being held by any of them in trust for the lawful landowner. Conversely, in any event that there be
found any occupant on the exempted premises under claim of any right under existing agrarian
laws the same laws shall warrant his dispossession thereof. In fine, the parcels of land in
question being beyond the scope of the CARP are outside the contemplation of the Supreme Court
decision. Hence, the said decision should not be made to operate against the cancellation of CLOA
6654 in so far as the three parcels of land in question are concerned which have previously been
authorized by competent authority in a judgment that is final and executory. 37 CIHTac
Under DAR Administrative Order No. 2, series of 1994, CLOAs, whether distributed or not, may
be cancelled by order of the PARAD or Regional Agrarian Reform Adjudicator (RARAD) having
jurisdiction over the property in accordance with DARAB rules and procedures. Among the
recognized grounds for cancellation of CLOAs is that the land covered by the same has been found
exempt/excluded from CARP coverage by the DAR Secretary or his authorized representative.
Given the final and executory Decision dated 2 April 1996 of the Court of Appeals in CA-G.R. SP No.
36299, declaring Lots No. 125-K, No. 125-M, and No. 125-L exempt from CARP coverage, the PARAD
wrote "there is nothing more left to be done by this Adjudicator than the ministerial duty to enforce
the Court of Appeals judgment . . . by way of a final order of implementation or execution." 38
Even though not a party in CA-G.R. SP No. 36299, the PARAD still deemed DAMBA-NFSW bound
by the final and executory judgment of the Court of Appeals in said case for the following reasons:
. . . As to the parties bound by the decision sought to be enforced, while [DAMBA-NFSW] and its
members appear not to be parties in the Court of Appeals case and that as a general rule, the
decision in said case shall only issued against the DAR, by its Secretary, being the direct party to the
action, nonetheless, said judgment shall extend to them being privies to the [DAR] which is the
source or origin of whatever rights or entitlements they now claim under CLOA 6654 insofar as the
three (3) parcels of land are concerned and against whom the decision is deemed binding although
they are not literally parties to the said action (St. Dominic Corporation vs. IAC, 151 SCRA
577,Cabreros v. Tiro, 66 SCRA 400). 39
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Lastly, the PARAD addressed the possibility that the three lots held to be exempt from CARP
coverage by the Court of Appeals in CA-G.R. SP No. 36299 may include portions of lots subject of
other applications for exemption:
In this respect, the Board takes into view [Roxas & Co.]'s pending application for exemption of
certain lots covered by the same CLOA portions of which are said to be overlapping the lots already
declared exempt considering the fact that the Board had issued a status quo order pendente lite over
the exempted area which might indeed include portions of the lots treated in the pending
application for exemption. It must be recalled, however, that the legal duty of defining the true
identity and delineating the metes and bounds of the lots, other than those specifically identified
and declared as the ones excluded from CARP coverage by virtue of the Court of Appeals decision,
as well as competence to determine whether the same are similarly exempt from CARP coverage
belong to the exclusive prerogative of the DAR Secretary and his duly authorized representatives.
Nonetheless, for purposes of obtaining the desired results, it is considered judicious that a
relocation survey be recommended at the instance of any interested party to be plotted on the
approved subdivision survey Psd-04-046912. L.R.C. Record No. 102. Meanwhile, as an ancillary
relief to be included in the order of cancellation, the status quo order shall continue to operate with
full force and effect over the area encompassed by Lots 125-K, 125-L and 125-M as delineated by
their respective technical descriptions as appearing in the approved subdivision survey plan, Psd04-04-046912, L.R.C. Record No. 102 and as contained and stated in Transfer Certificates of Title
Nos. T-60028, T-60033 and T-60032, respectively, in order to protect the said premises from undue
invasions by illegal entrees. 40 CcaASE
The PARAD decreed at the end of the Joint Order dated 21 May 2001:
WHEREFORE, in view of the foregoing considerations, let Order hereby jointly issue:
1.

Directing the Register of Deeds [of] Batangas, Nasugbu Office, to effect the partial cancellation

of Transfer Certificate of Title No. CLOA-6654, CLOA No. 00158566 of the Registry of Deeds [of]
Batangas (Nasugbu) insofar as the same covers Lot 125-K with an area of 27.4170 hectares situated
at Brgy. Bilaran, Nasugbu, Batangas; Lot 125-L with an area of 36.9796 hectares located in Brgy.
Lumbangan, Nasugbu, Batangas, and Lot 125-M with an area of 37.8648 hectares also located in
Brgy. Lumbangan, Nasugbu, Batangas, all of Psd-04046912, L.R.C. Record No. 102 as, respectively,
described in and covered by Transfer Certificates of Title Nos. T-60028, T-60033 and T-60032 of
the same Registry of Property and which titles are hereby declared subsisting and in full force and
effect;

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2.

Making the status quo order permanent over the area/lots described in Transfer Certificates of

Title Nos. T-60028, T-60033 and T-60032 without prejudice, however, to [Roxas & Co.]'s lawful
exercise of its right of absolute ownership and its incidents over the parcels of land in question.
No pronouncement as to other relief. 41
DAMBA-NFSW alleged that on 13 June 2001, it received a copy of the 21 May 2001 Joint Order of
the PARAD in DARAB Cases No. R-401-003-2001 to No. R-401-005-2001; that on 28 June 2001, the
last of the 15-day reglementary period, it filed via registered mail its Motion for Reconsideration;
and that the next day, on 29 June 2001, it filed by personal delivery to the Office of the PARAD
an Ex-Parte Motion to Admit Attached Additional Copies of Motion for Reconsideration.
On 10 July 2001, the PARAD issued a Joint Resolution in DARAB Cases No. R-401-003-2001 to
No. R-401-005-2001 (Petition for partial cancellation of CLOA No. 6654, insofar as it concerns the
three lots with an aggregate area of 102.2614 hectares) andDARAB Case No. 401-239-2001
(Petition for total or complete cancellation of CLOA No. 6654, involving the rest of the landholding
covered by said certification). 42 The PARAD dismissed for lack of merit the Motions for
Reconsideration filed by DAMBA-NFSW in both cases.
DAMBA-NFSW received on 21 August 2001 a copy of the 10 July 2001 Joint Resolution of the
PARAD denying its Motions for Reconsideration in DARAB Cases No. R-401-003-2001 to No. R-401005-2001 and DARAB Case No. 401-239-2001. DAMBA-NFSW, intending to seek recourse from
DARAB, filed with the PARAD on 5 September 2001 a joint Notice of Appeal for DARAB Cases No. R401-003-2001 to No. R-401-005-2001 and DARAB Case No. 401-239-2001. Receiving no word from
PARAD, DAMBA-NFSW filed four months later, on 2 January 2002 an Urgent Ex-Parte Motion to
Give Due Course to Appellant's Notice of Appeal and to Admit Attached Joint Memorandum on
Appeal. SCHIac
In an Order dated 19 February 2002 in DARAB Cases No. R-401-003-2001 to No. R-401-0052001, the PARAD declared that the Motion for Reconsideration and Notice of Appeal of DAMBANFSW were filed beyond the 15-day reglementary period based on the following facts:
1)

The decision dated May 21, 2001 was received by [DAMBA-NFSW] counsel on June 13, 2001.

2)

The motion for reconsideration was filed on June 29, 2001.

3)

The denial of the motion for reconsideration was received by [DAMBA-NFSW] counsel on

August 21, 2001.

4)

The notice of appeal was filed by [DAMBA-NFSW] counsel on September 5, 2001. 43

The PARAD, thus, dismissed the Notice of Appeal of DAMBA-NFSW.

DAMBA-NFSW filed a Motion for Reconsideration of the dismissal of its Notice of Appeal, but the
PARAD denied the same in an Order dated 22 May 2002, stating that the lack of knowledge of
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DARAB rules "cannot be considered excusable neglect nor as compelling reason to reconsider the
order of dismissal of the appeal." 44
DAMBA-NFSW then filed with the Court of Appeals a Petition for Certiorari andMandamus under
Rule 65 of the Rules of Court, docketed as CA-G.R. SP No. 72198.
DAMBA-NFSW attributed grave abuse of discretion, amounting to lack or excess of jurisdiction,
on the part of the PARAD, in not giving due course to the former's Notice of Appeal. DAMBA-NFSW
maintained that it had filed its Motion for Reconsideration on 28 June 2001, and not 29 June 2001.
DAMBA-NFSW further questioned the deduction of the days it took to file its Motion for
Reconsideration from the 15-day reglementary period for filing an appeal. It averred that the
DARAB should not be bound by technical rules, which would result in depriving the hundreds of
farmers' family members of substantial justice. Most importantly, DAMBA-NFSW asserted that it
had a meritorious case for DARAB to resolve on appeal, particularly:
A)

WHETHER OR NOT THE PUBLIC RESPONDENT PARAD OF BATANGAS HAS JURISDICTION

TO GIVE DUE COURSE TO [ROXAS & CO.]'S PETITION TO CANCEL CLOA NO. 6654 THE SAME ISSUE
HAVING BEEN THOROUGHLY PASSED UPON AND SPECIFICALLY RESOLVED BY THE SUPREME
COURT EN BANC IN A CASE INVOLVING THE SAME PARTIES AND INVOLVING THE ENTIRE
LANDHOLDINGS OF [ROXAS & CO.] INCLUDING THE LANDHOLDINGS SUBJECT MATTER OF THE
INSTANT PETITION, ORDERING THAT THE SAME SHOULD NOT BE CANCELLED; CIaHDc
B)

WHETHER OR NOT [ROXAS & CO.] IS NOT ENGAGED IN FORUM SHOPPING IN BRINGING

THE PETITION FOR CANCELLATION OF CLOA 6654 WITH PUBLIC RESPONDENT PARAD OF
BATANGAS WHEN THE PRAYER IS THE SAME AS ITS PETITION EARLIER FILED ON MAY 15, 2000
WITH THE OFFICE OF THE DAR SECRETARY SEEKING TO EXEMPT FROM CARP COVERAGE
SUBJECT LANDHOLDINGS, AND THAT IF GRANTED TO EFFECT A CANCELLATON OF CLOA No.
6654 AND OTHER CLOA'S COVERING ITS OTHER LANDHOLDINGS IN NASUGBU, BATANGAS. IN
FACT, THE OFFICE OF THE DAR SECRETARY HAS RULED WITH FINALITY ON [ROXAS & CO.]'S
PETITION FOR CARP EXEMPTION, DENYING THE SAME FOR LACK OF MERIT AND ORDERS THE
ACQUISITION PROCEEDINGS OR NOTICE OF COVERAGE TO PROCEED. HOW THEN CAN THE
CLOA'S OF SUBJECT LANDHOLDINGS BE CANCELLED, EXCEPT THROUGH [ROXAS & CO.]'S
PENCHANT OF BRINGING SUITS IN VIOLATION OF ANTI-FORUM SHOPPING RULE AS IN THE
INSTANT CASE; AND
C)

WHETHER OR NOT [ROXAS & CO.] CAN CAUSE FOR THE CANCELLATION OF CLOA NO. 6654

COVERING THE THREE PARCELS OF LANDHOLDINGS (103.1436 HECTARES) ON THE BASIS OF

ALLEGED DECISION COURT OF APPEALS THIRD DIVISION EARLIER ISSUED BETWEEEN THE
SAME PARTIES AND SAME ISSUES WHICH RESULTED FROM A VOID PROCEEDINGS FOR
VIOLATING THE ANTI-FORUM SHOPPING RULE AND THE ILLEGAL ACT OF DAR LITIGATION
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OFFICER IN CONNIVANCE WITH [ROXAS & CO.] IN NOT APPEALING THE CASE TO THE SUPREME
COURT, AND PRIMARILY IN THE LIGHT OF THE SUPREME COURT EN BANC DECISION WHICH
DECLARED THAT CLOA NO. 6654 CANNOT BE CANCELLED AS THE CASE HAS YET TO BE
REMANDED TO THE DAR FOR PROPER ACQUISITION PROCEEDINGS, AND THE FACT THAT THE
OFFICE OF THE DAR SECRETARY HAS ALREADY ORDERED FOR THE ISSUANCE OF NOTICE OF
COVERAGE ON ALL PRIVATE RESPONDENT'S LANDHOLDINGS IN NASUGBU, BATANGAS. 45
DAMBA-NFSW prayed that: (1) a temporary restraining order (TRO) be immediately issued to
enjoin the PARAD from implementing the Orders dated 19 February 2002 and 22 May 2002; and
(2) after due proceedings, the assailed PARAD Orders be annulled and a new Order be issued
commanding the PARAD to transmit the records in DARAB Cases No. R-401-003-2001 to No. R-401005-2001 to the DARAB for the appeal of DAMBA-NFSW.
In its Decision 46 dated 10 September 2004, the Court of Appeals favored DAMBA-NFSW.
The Court of Appeals conceded that under Section 12 of the 1994 DARAB Rules of Procedure,
DAMBA-NFSW belatedly filed its Notice of Appeal:
. . . Hence, assuming that [DAMBA-NFSW] timely filed its motion for reconsideration, the period to
file an appeal had already lapsed considering that the filing of a motion for reconsideration only
suspends the running of the period within which the appeal must be perfected, and in case of denial
of the motion for reconsideration, the movant only has the remainder of the period for appeal,
reckoned from receipt of the resolution of denial. In this case, [DAMBA-NFSW] had already
exhausted the fifteen day period for appeal when it filed its motion for reconsideration, on the last
day of the prescribed period. At the most, [DAMBA-NFSW] only had one (1) day from receipt of a
copy of the order denying the motion for reconsideration, within which to perfect its
appeal, i.e.,excluding the day of receipt and including the next day. 47 cSTHaE
While it is also true that the perfection of appeal within the statutory or reglementary period is
not only mandatory, but also jurisdictional, and failure to do so renders the questioned judgment
final and executory; the Court of Appeals recounted jurisprudence where the rules on the period of
appeal were relaxed in favor of the disposition of cases on the merits. The appellate court
ratiocinated that:
. . . [t]o deny [DAMBA-NFSW]'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-NFSW] with regard to [Roxas & Co.]'s application for partial
and total cancellation of the CLOA in DARAB Cases No. R-0401-003 to 005-2001 and R-0401-2392001. There is a pressing need for an extensive discussion of the issues as raised by both parties as
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the matter of canceling CLOA No. 6654 is of utmost importance, involving as it does the probable
displacement of hundreds of farmer-beneficiaries and their families. This certainly justifies the
relaxation of the rules on the period for appeal in order to afford herein petitioners their remedy of
appeal, lest it be forgotten that the rules of procedure should be viewed as mere tools designed to
facilitate the attainment of justice. The merits of [DAMBA-NFSW]'s appeal before the PARAD
deserve[s] a full ventilation of the issues involved, to serve the ends of justice and prevent a grave
misconduct thereof. 48
The dispositive portion of the 10 September 2004 Decision of the Court of Appeals reads:
WHEREFORE, premises considered, the instant petition is GRANTED. The Order of the Provincial
Agrarian Reform Adjudicator (PARAD) of Batangas dated 19 February 2002, dismissing [DAMBANFSW]'s Notice of Appeal and the Order [dated] 22 May 2002, denying [DAMBA-NFSW]'s Motion
for Reconsideration of the earlier order are hereby REVERSED and SET ASIDE. The PARAD of
Batangas is ORDERED to give due course to [DAMBA-NFSW]'s appeal in DARAB Case No. R-0401003 up to 005-2001. 49
The Court of Appeals denied the Motion for Reconsideration of Roxas & Co. in a Resolution dated
14 April 2005.
Thereafter, Roxas & Co. filed with this Court a Petition for Review under Rule 45 of the Rules of
Court, docketed as G.R. No. 167845. According to Roxas & Co., the Court of Appeals committed
reversible error in granting the Petition for Certiorari and Mandamus of DAMBA-NFSW,
notwithstanding that:
I.

THE PARAD'S DENIAL OF DAMBA'S NOTICE OF APPEAL WAS IN ACCORDANCE WITH THE

1994 DARAB RULES.

II.

CERTIORARI UNDER RULE 65 IS NOT A SUBSTITUTE FOR A LOST APPEAL. THE REMEDY OF

APPEAL WAS AVAILABLE BUT WAS LOST THROUGH DAMBA'S OWN FAULT. TSaEcH
III.

THE ALLOWANCE OF THE NOTICE OF APPEAL, WHICH WAS FILED OUT OF TIME, IS NOT A

MINISTERIAL DUTY. HENCE, THE WRIT OF MANDAMUS DOES NOT LIE.

IV.

DAMBA FAILED TO ADVANCE JUSTIFIABLE REASONS WHY MANDATORY AND

JURISDICTIONAL RULES ON APPEAL SHOULD BE DISREGARDED.

V.

THE FINAL AND EXECUTORY DECISION OF THE COURT OF APPEALS IN CA GR SP NO. 36299,

WHICH ANNULLED CLOA NO. 6654 INSOFAR AS IT COVERS THE SUBJECT PROPERTIES, SHOWS
THAT DAMBA'S APPEAL IS UNMERITORIOUS.
Roxas & Co. is asking the Court to reverse and set aside the Decision dated 10 September 2004
and Resolution dated 14 April 2005 of the Court of Appeals in CA-G.R. SP No. 72198; and to affirm
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the Orders dated 19 February 2002 and 22 May 2002 of the PARAD in DARAB Cases No. R-401-0032001 to No. R-401-005-2001.
The Petition was given due course and the parties have already submitted their Memoranda.
G.R. No. 169163
On 26 January 2001, Roxas & Co. filed before the PARAD a Petition for Cancellation of CLOA No.
6654, docketed as DARAB Case No. 401-239-2001. To recall, CLOA No. 6654 covered a total land
area of 513.9863 hectares, all located in Hacienda Palico. Roxas & Co. was seeking the cancellation
of CLOA No. 6654 as to the rest of the parcels of land still covered thereby after excluding the
102.2614 hectares, which corresponded to the three lots already subject of DARAB Cases No. R401-003-2001 to No. R-401-005-2001. In other words, Roxas & Co. was petitioning for the total or
complete cancellation of CLOA No. 6654.
Roxas & Co. basically grounded its Petition for the total or complete cancellation of CLOA No.
6654 on the alleged nullity of the subdivision survey of the lots covered by CLOA No. 6654, due to
technical defects in the conduct of said survey, which only surfaced after the Court of Appeals, in
CA-G.R. SP No. 36299, ordered the exemption from CARP coverage of the three lots included in
CLOA No. 6654. When Hacienda Palico was compulsorily placed under the CARP, a segregation and
subdivision survey was conducted by Engr. Miguel V. Pangilinan (Pangilinan) on 22 April to 24 June
1993. Engr. Pangilinan incorrectly plotted his survey using the old subdivision plan, Psd-04-016141
(OLT), which was already cancelled and superseded on 10 July 1991 by subdivision plan Psd-046912, LRC Record 102. And, based on the result of Engr. Pangilinan's defective survey, a new
subdivision plan, Bsd-041019-003090 (AR), was approved on 6 October 1993, segregating the
513.9863 hectares subsequently awarded to the farmer-beneficiaries under CLOA No.
6654. AcCTaD
In its Decision dated 27 May 2001, the PARAD found that:
By and large, the assailed CLOA falls squarely within contemplation of DAR Adm. Order No. 02,
Series of 1994. The same was issued on October 15, 1993 and is well within the ten year restrictive
period; that just compensation for the properties thereby covered has not as yet been paid the
landowner, that the same was generated on the basis of an erroneous survey where the lots therein
described are not capable of physical distinction and accurate delineation having been plotted with
reference to an already extinct survey plan, thusly, depriving the said CLOA of any tangible basis or
material content; hence, devoid of legal existence. In fact, the Supreme Court even found the
property being acquired not properly segregated and delineated and non-compliant with the
statutory requirement under Sec. 16 of RA 6657 that the property/ies acquired shall be identified.
This Board, with due respect to the Supreme Court's ruling to save the CLOAs is of the humble
opinion that their preservation will only serve a purpose if and when their contents and efficacy are
confirmed with exactitude by the results of the new acquisition proceedings to be undertaken by

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the DAR in respect of the proper delineation and/or description of the landholdings and the
propriety of their coverage under the CARP. However, in the case of CLOA 6654, based on the
evidence on record the lands that would eventually be found proper for final coverage under the
CARP will not be as described in the said title: Firstly, by reason of the exclusion of the exempted
area; Secondly, due to technical errors in the identification and plotting of the lots resulting in a
false subdivision survey. CLOA 6654, for these reasons, now, serves no legal purpose.
Furthermore, considering that the remaining 410.8327-hectares of land covered by CLOA 6654
have yet to pass under the proper acquisition and/or conversion proceedings as ordered by the
Supreme Court then no title has as yet been acquired by the DAR over the said properties and,
consequently, no proprietary rights to extend to the [DAMBA-NFSW members] under the CLOA
which, as yet does not evidence any title , or create any right in favor of the [DAMBA-NFSW
members], hence, is devoid of any legal efficacy and effectively non-existing. For practical reasons,
to cancel CLOA 6654 will pave the way for a smooth, unobstructed and expeditious re-processing of
the compulsory acquisition by erasing all traces of past irregularities, technical errors and lapses of
procedure and taking off from a fresh start. Moreover, the cancellation of the subject CLOA shall be
without adverse effect to the continuous possession and cultivation of the tillers in place who shall
hold the landholdings meanwhile in trust for [Roxas & Co.] as the true landowner in complete
accord with the ruling of the Supreme Court.
The decretal portion of the 27 May 2001 Decision of the PARAD in DARAB Case No. 401-2392001 is reproduced in full below:
WHEREFORE, premises considered, Judgment is hereby rendered:
1.

Finding and declaring the issuance of CLOA 6654 not in accordance with the mandate of Sec.

16, RA 6657 thereby effectively circumventing the implementation of the CARP; IcTaAH
2.

Finding CLOA 6654 to be fictitious/null and void having been generated on the basis of a

subdivision survey which was plotted on a survey plan which has already been previously
cancelled, superseded and extinct, accordingly,
3.

Ordering the cancellation of CLOA 6654, as prayed for by [Roxas & Co.], without prejudice,

however, to the execution of the proper subdivision survey for purposes of delineating accurately
the boundaries of the properties subject of acquisition proceedings for purposes of determining
their coverage under the CARP or their negotiability for conversion and/or exclusion from the
Program.
No pronouncement as to other relief.
After receiving a copy of the foregoing PARAD judgment on 13 June 2001, DAMBA-NFSW alleged
that it filed its Motion for Reconsideration by registered mail on 28 June 2001. It then filed
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personally before the PARAD additional copies of the same Motion for Reconsideration the next
day, 29 June 2001.
DAMBA-NFSW contended in its Motion for Reconsideration that: (1) Roxas & Co. violated the
rule against forum-shopping in filing before the PARAD the instant Petition for cancellation of CLOA
No. 6654, even when Roxas & Co. already made a similar request, which was denied by the Court en
banc, in Roxas & Co. v. Court of Appeals, despite the procedural lapses committed by the DAR in the
acquisition proceedings; (2) the PARAD committed grave abuse of discretion amounting to lack or
excess of jurisdiction in arrogating to herself the exclusive jurisdiction of the DAR Secretary over
applications for CARP exemption or land conversion; and (3) even assuming for the sake of
argument that the subdivision plan, used as basis for CLOA No. 6654, was erroneous, the parties
had relied on the same in good faith, and the farmer-beneficiaries should not be made to suffer for
the procedural lapse of the DAR.
As has been previously narrated under G.R. No. 167845, the PARAD issued on 10 July 2001 a
Joint Resolution dismissing the Motions for Reconsideration of DAMBA-NFSW in DARAB Cases No.
R-401-003-2001 to No. R-401-005-2001 (Petition for partial cancellation of CLOA No. 6654) and
DARAB Case No. 401-239-2001 (Petition for total or complete cancellation of CLOA No. 6654). After
receipt of said Joint Resolution on 21 August 2001, DAMBA-NFSW, wanting to appeal its cases to
the DARAB, filed with the PARAD on 5 September 2001 a joint Notice of Appeal. When PARAD failed
to act on its Notice of Appeal for four months, DAMBA-NFSW filed with the PARAD on 2 January
2001 an Urgent Ex-Parte Motion to Give Due Course to Appellant's Notice of Appeal and to Admit
Attached Joint Memorandum on Appeal.
The PARAD, in an Order dated 27 February 2002, in DARAB Case No. 401-239-2001, refused to
give due course to the Notice of Appeal of DAMBA-NFSW since it was filed beyond the 15-day
reglementary period, considering that:
1)

The decision dated May 27, 2001 was received by [DAMBA-NFSW] counsel on June 29, 2001.

2)

The motion for reconsideration was filed on June 29, 2001.

3)

The denial of the motion for reconsideration was received by appellant counsel on August

21, 2001. AaSTIH

4)

The notice of appeal was filed by appellant counsel on January 9, 2002.

Consequently, the PARAD dismissed the Notice of Appeal of DAMBA-NFSW. DAMBA-NFSW filed a
Motion for Reconsideration of the dismissal of its Notice of Appeal, but said Motion was denied by
the PARAD in an Order dated 26 July 2002.
DAMBA-NFSW subsequently filed with the Court of Appeals a Petition
for Certiorari andMandamus under Rule 65 of the Rules of Court, docketed as CA-G.R. SP No.
75952. DAMBA-NFSW presented in this Petition substantially the same averments and arguments
as those in its Petition in CA-G.R. SP No. 72198, with a closely identical prayer that sought: (1) the
immediate issuance of a TRO to enjoin the PARAD from implementing the Orders dated 27
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February 2002 and 26 July 2002; and (2) after due proceedings, the nullification of the assailed
PARAD Orders and the issuance of a new Order commanding the PARAD to transmit the records in
DARAB Case No. 401-239-2001 to the DARAB for the appeal of DAMBA-NFSW.
The Court of Appeals, in its Decision 50 dated 23 February 2005, withheld its judgment on the
merits as it dismissed the Petition of DAMBA-NFSW for having been prematurely filed. The proper
recourse of DAMBA-NFSW was to first elevate its appeal of the assailed PARAD Orders to the
DARAB, because as can be gleaned from Section 1, Rule XIV of the DARAB Rules of Procedure,
judicial review by way of certiorari to the Court of Appeals may only be made on decisions, orders,
or rulings on any agrarian dispute, rendered by the DARAB, not the RARAD or PARAD.
In a Resolution dated 3 August 2005, the appellate court denied the Motion for Reconsideration
of DAMBA-NFSW.
In this Petition for Review under Rule 45 of the Rules of Court, docketed as G.R. No. 169163,
DAMBA-NFSW asserts that it had no other plain, speedy, and adequate remedy from the PARAD
Orders dated 27 February 2002 and 26 July 2002, except the filing before the Court of Appeals of a
Petition for Certiorari under Rule 65 of the Rules of Court. Grave abuse of discretion on the part of
the PARAD is not one of the grounds recognized in the 1994 DARAB Rules of Procedure for filing an
appeal before the DARAB. Granting arguendothat the Petition in CA-G.R. SP No. 75952 was
prematurely filed, still, the Court of Appeals should have relaxed the application of procedural rules
in view of the exceptional circumstances of the case.
DAMBA-NFSW prays that the Court reverse, annul, and set aside the 28 February 2005 Decision
and 3 August 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 75952; and direct the
PARAD to give due course to the Notice of Appeal and Memorandum of Appeal of DAMBA-NFSW.
In a Resolution dated 19 October 2005, the Court denied the instant Petition for absence of
reversible error committed by the appellate court. DAMBA-NFSW moved for reconsideration of the
denial of its Petition, with prayer to submit its case to the Court en banc and to set the same for oral
argument. In another Resolution dated 14 August 2006, the Court held in abeyance its action on the
Motion for Reconsideration of DAMBA-NFSW, pending resolution of the other pending cases
involving the CARP exemption of the properties of Roxas & Co. in Nasugbu. DaACIH
All seven Petitions, i.e., G.R. No. 167540, No. 167543, No. 149548, No. 179650, No. 167505, No.
167845, and No. 169163, being related, were eventually consolidated for uniformity and
consistency of rulings. They were referred to the Court en banc and set for oral arguments on 7 July
2009. After the oral arguments, the parties submitted their Memoranda.
Other than filing their Petitions for Intervention, the Sangguniang Bayan and ABC of Nasugbu, no
longer participated in the proceedings before this Court, despite due notice. They did not appear
during the oral arguments or submitted their Memoranda. The Court, in the exercise of its
discretion to allow or disallow the intervention of a third party to the suit, should choose the latter,
it being evident in the non-participation of the Sangguniang Bayan and ABC of Nasugbu that they
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are no longer interested to pursue their Petitions-in-Intervention in G.R. No. 167540 and No.
167543.
II
ISSUES FOR RESOLUTION
The fundamental issues to be resolved by this Court are the following:
(1)
Whether all parcels of land located in the municipality of Nasugbu, Batangas, had been
reclassified for non-agricultural uses by virtue of Presidential Proclamation No. 1520, thus,
exempting the same, including Haciendas Caylaway, Banilad, and Palico, owned by Roxas & Co.,
from CARP coverage;
(2)
Whether certain parcels of land located in Hacienda Palico, Nasugbu, Batangas, owned by
Roxas & Co., had been reclassified for non-agricultural uses by virtue of the Nasugbu Municipal
Zoning Ordinance No. 4, series of 1982, thus, exempting the same from CARP coverage;
(3)
Whether Roxas & Co. can seek the cancellation of CLOA No. 6654 despite the 17 December
1999 Decision of this Court in G.R. No. 127873, Roxas & Co. v. Court of Appeals; and if said issue is
answered in the affirmative, whether the appeal to the DARAB by DAMBA-NFSW of the partial and
complete cancellations of CLOA No. 6654 ordered by the PARAD should be given due course; and
(4)

Whether Roxas & Co. had committed forum-shopping and/or splitting of causes of action.
III
THE RULING OF THIS COURT

A.

CARP Exemption of the Three Haciendas based on Presidential Proclamation No.

1520 (G.R. No. 167540 and No. 167543)

In DAR Administrative Case No. A-9999-084-00, Roxas & Co. applied for the exemption of
Haciendas Caylaway, Banilad, and Palico, under DAR Administrative Order No. 6, series of 1994.
Said administrative order provides for the guidelines for the issuance of exemption clearances
based on Section 3 (c) of the CARL and DOJ Opinion No. 44, series of 1990.
IHCDAS
CARL, in general, covers all public and private agricultural lands. Section 3 (c) of the CARL
defines an agricultural land as land devoted to agricultural activity 51 and not classified as mineral,
forest, residential, commercial, or industrial land.
The approval or disapproval of the conversion of agricultural lands for non-agricultural uses
shall be subject to the exclusive authority of the DAR. 52 However, according to DOJ Opinion No. 44,
series of 1990, the DAR may only exercise its authority to approve conversion of agricultural lands
to non-agricultural uses from the date of effectivity of the CARL on 15 June 1988. Necessarily, lands
already classified as commercial, industrial, or residential, before 15 June 1988, no longer need a
conversion clearance 53 from the DAR. Instead of a conversion clearance, such land shall be issued
an exemption clearance by the DAR.

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Roxas & Co. claims that their three haciendas, located in Nasugbu, Batangas, are exempt from
CARP coverage because prior to the effectivity of the CARL on 15 June 1988, the whole Municipality
of Nasugbu, Batangas, together with the Municipalities of Maragondon and Ternate in Cavite, were
declared a tourist zone and, thus, reclassified for non-agricultural uses by virtue of Presidential
Proclamation No. 1520, issued on 28 November 1975. In other words, Roxas & Co. asserts that
Presidential Proclamation No. 1520 automatically reclassified all the lands in the three
Municipalities for non-agricultural uses, with the only exception of military reservations within the
zone.
On the other hand, KAMAHARI and DAMBA-NFSW, together with the DAR, aver that there has been
no automatic reclassification of the entire Nasugbu by Presidential Proclamation No. 1520. The PTA
still needs to identify the specific areas within the municipalities that will be developed for tourism
purposes.
I agree with Roxas & Co.
A careful scrutiny of Presidential Proclamation No. 1520 reveals that the declaration of the three
Municipalities as a tourist zone consequentially translates to the classification of all lands therein to
tourism and, therefore, non-agricultural uses.
The full text of Presidential Proclamation No. 1520 is presented below:
PRESIDENTIAL PROCLAMATION NO. 1520
DECLARING THE MUNICIPALITIES OF MARAGONDON AND TERNATE IN CAVITE PROVINCE AND
THE MUNICIPALITY OF NASUGBU IN BATANGAS AS A TOURIST ZONE, AND FOR OTHER PURPOSES
WHEREAS, certain areas in the sector comprising the Municipalities of Maragondon and Ternate in
Cavite Province and Nasugbu in Batangas have potential tourism value after being developed into
resort complexes for the foreign and domestic market; and IDaEHC
WHEREAS, it is necessary to conduct the necessary studies and to segregate specific geographic
areas for concentrated efforts of both the government and private sectors in developing their
tourism potential;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vested in me by the Constitution, do hereby declare the area comprising the Municipalities of
Maragondon and Ternate in Cavite Province and Nasugbu in Batangas Province as a tourist
zone under the administration and control of the Philippine Tourism Authority (PTA)
pursuant to Section 5 (D) of P.D. 564.
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.
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Any duly established military reservation existing within the zone shall beexcluded from this
proclamation.
All proclamation, decrees or executive orders inconsistent herewith are hereby revoked or
modified accordingly.
Right after the enacting clause 54 is the very purpose of Presidential Proclamation No. 1520, as it
is also stated in its title: the declaration by former President Marcos of "the area comprising the
Municipalities of Maragondon and Ternate in Cavite Province and Nasugbu in Batangas Province as
a tourist zone under the administration and control of the Philippine Tourism Authority (PTA)."
There is no mistaking the plain and clear intent of Presidential Proclamation No. 1520. It declares
the whole of the Municipalities of Maragondon and Ternate in Cavite Province and Nasugbu in
Batangas Province as a tourist zone. The presidential issuance, without qualification, refers to the
"area comprising" the three Municipalities as "a tourist zone," which can only mean that the
contiguous Municipalities are to form a single tourist zone.
There is nothing in Presidential Proclamation No. 1520 to support the position of KAMAHARI,
DAMBA-NFSW, and DAR, that the tourist zone should be limited to the specific areas within the
three Municipalities identified by the PTA to have potential tourism value. In such a case, there
could not just be one tourism zone, but several tourism zones. Even a cursory reading of
Presidential Proclamation No. 1520 readily reveals that it never used the plural term "tourism
zones." Notice should also be given to the fact that according to Presidential Proclamation No. 1520,
PTA is to identify "well-defined geographic areaswithin the zone;" which connotes that the welldefined geographic areas, which PTA must identify, is different from, and are actually smaller areas
that are supposed to be part of, the tourist zone. What is the sense of first declaring the larger area
as a tourist zone, and only thereafter identifying certain well-defined areas with potential tourism
value within the zone? aSIETH
The only rationale behind the directive in the fourth paragraph of Presidential Proclamation No.
1520, for PTA to identify such well-defined geographic areas with potential tourism value, is
explained in the very same paragraph. It is so that the "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." Otherwise and more simply stated, PTA is to identify the welldefined geographic areas where the facilities, efforts, and limited resources of the Government and
the private sector may be concentrated, focused, and optimized, so as to generate profit from
tourism. These areas will only enjoy priority, but it does not mean that all other areas in
Maragondon, Ternate, and Nasugbu, will no longer be developed for tourism purposes. Going back
to the chief intent of Presidential Proclamation No. 1520, it is to make all three Municipalities a
tourist zone, not just certain areas thereof.

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Basic is the rule of statutory construction that when the law is clear and unambiguous, the Court is
left with no alternative but to apply the same according to its clear language. There cannot be any
room for interpretation or construction in the clear and unambiguous language of the law. This
Court had steadfastly adhered to the doctrine that its first and fundamental duty is the application
of the law according to its express terms, interpretation being called for only when such literal
application is impossible. No process of interpretation or construction need be resorted to where a
provision of law peremptorily calls for application. Where a requirement or condition is made in
explicit and unambiguous terms, no discretion is left to the judiciary. It must see to it that its
mandate is obeyed. 55
The reference of KAMAHARI, DAMBA-NFSW, and DAR to the "Whereas clauses" or the preamble
of Presidential Proclamation No. 1520 does little to support their case. First,the preamble is not an
essential part of a statute. Hence, where the meaning of a statute is clear and unambiguous, the
preamble can neither expand nor restrict its operation, much less prevail over its text. Nor can a
preamble be used as basis for giving a statute a meaning not apparent on its face. 56 It neither
enlarges nor confers powers. 57 Second, the preamble is not really inconsistent with the body of
Presidential Proclamation No. 1520. The certain geographic areas with potential tourism value
which needed to be segregated, according to the preamble; are the same well-defined geographic
areas with potential tourism value that the PTA must identify, per the directive in the body of
Presidential Proclamation No. 1520. And, there is still nothing in the preamble to establish that the
intent of Presidential Proclamation No. 1520 is to make only such geographic areas, rather than the
whole of the three Municipalities, the tourist zone.
Furthermore, Presidential Proclamation No. 1520 has only one express exclusion from its
coverage, i.e., duly established military reservation existing within the zone. Such a military
reservation is to remain as such and not to be developed for tourism purposes. This also means that
the rest of the lands in Maragondon, Ternate, and Nasugbu, other than an established military
reservation, are subject to tourism development. A maxim of recognized practicality is the rule that
the expressed exception or exemption excludes others. Exceptio firmat regulim in casibus non
exceptis. The express mention of exceptions operates to exclude other exceptions; conversely, those
which are not within the enumerated exceptions are deemed included in the general rule. 58
A closer scrutiny of the Letter of Instructions No. 352, issued by former President Marcos on 23
December 1975, divulges an intent that is quite opposite what Associate Justice AlioHormachuelos ascertained in her dissent in CA-G.R. SP No. 72131. Letter of Instructions No. 352, in
actuality, confirms that the entire three Municipalities of Maragondon, Ternate, and Nasugbu are to
be devoted, as a tourist zone, to tourism development, not just certain areas thereof.
Letter of Instructions No. 352 fully reads:
TO: All Concerned
The Director of Lands shall survey and prepare a technical description of thetourist zone, which
survey and technical description shall be considered an integral part of Proclamation No. 1520
dated November 28, 1975 declaring theMaragondon-Ternate-Nasugbu Tourist Zone.
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The Philippine Tourism Authority shall formulate a development plan, in coordination with the
Department of Tourism and other government agencies and the local governments exercising
political jurisdiction, or preparing sectoral plans, over the area; formulate and implement zoning
regulations, including building codes and other restrictions as may be necessary within a tourist
zoneto control its orderly development; and enforce adherence to the approved zone development
plan, subject to the penalties provided in Sec. 39 of P.D. 564. HADTEC
The Philippine Tourism Authority shall submit the zone development plan through the Department
of Tourism and the National Economic & Development Authority to the President for review and
approval before the same is enforced and/or implemented.
Department Heads and heads of Government-owned and controlled corporations, Government
agencies and instrumentalities directed to cooperate with and assist the Philippine Tourism
Authority in making comprehensive technical, financial, market, socio-economic, regional
development and other studies of the Tourist Zone within the limits of their capability and
authority. (Emphases ours.)
The very first sentence of the first paragraph of Letter of Instructions No. 352 mandates the
Director of Lands to survey and prepare a technical description of the tourist zone, which it
specifically identified as the Maragondon-Ternate-Nasugbu Tourist Zone. It must be stressed that
the directive here is addressed to the Director of Lands, not the PTA; and it is to survey and prepare
a technical description of the whole zone, not just well-defined geographical areas within the zone
with potential tourism value.
What the second and third paragraphs of Letter of Instructions No. 352 essentially require the
PTA to do is to formulate and submit a zone development plan. The zone, which such development
plan shall cover, is none other than the Maragondon-Ternate-Nasugbu Tourist Zone, consistent
with the first paragraph of the said letter of instructions.
The fourth paragraph of Letter of Instructions No. 352 affirms the authority and control of the
PTA over the entire tourist zone, explicitly directing "Department Heads and heads of Governmentowned and controlled corporations, Government agencies and instrumentalities" to cooperate with
and assist the PTA in the development of the zone.
Letter of Instructions No. 352 is obviously concerned with the development of the whole
Maragondon-Ternate-Nasugbu Tourist Zone, there being no mention at all of well-defined
geographic areas with potential tourism value. The identification and segregation of such
geographic areas which shall be the priority, but not the only, areas for tourism development
can already be included by the PTA in the zone development plan which it is required by Letter of
Instructions No. 352 to prepare and submit to the President, through the DOT.

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The clear and unambiguous words of Presidential Proclamation No. 1520, establish that the
entire Municipalities of Maragondon, Ternate, and Nasugubu, have been declared a tourist zone;
and all lands within the tourist zone, excluding only established military reservation, are to be
developed for tourism purposes. This consequently means that even agricultural lands which are
not expressly exempted by Presidential Proclamation No. 1520 are to be devoted to tourism,
hence, non-agricultural uses.
Closely similar to the circumstances of the present Petitions are the cases of Natalia Realty, Inc.
v. DAR 59 and NHA v. Allarde. 60 In Natalia Realty, Inc. v. DAR, Presidential Proclamation No. 1637,
which was issued on 18 April 1977, identified parcels of land that were added to a townsite
reservation in the Municipalities of Antipolo and San Mateo in Rizal Province, established for the
purpose of providing additional housing to the burgeoning population of Metro Manila. In NHA v.
Allarde, Presidential Proclamation No. 843, which was issued on 26 April 1971, reserved parcels of
land in the Tala Estate for the housing and resettlement program of the NHA. In both Natalia Realty,
Inc. v. DAR and NHA v. Allarde, the Court deemed the erstwhile agricultural lands to have been
reclassified to non-agricultural uses by the mere issuance of the foregoing presidential
proclamations. Since said parcels of land were already reclassified as non-agricultural prior to the
effectivity of the CARL on 15 June 1988, then they were exempt from CARP coverage. aSTAcH
KAMAHARI, DAMBA-NFSW and DAR attempt to bring the Petitions at bar out of the ambit
of Natalia Realty, Inc. v. DAR and NHA v. Allarde by arguing that Presidential Proclamations No.
1637 and No. 843 identified the parcels of land in Natalia Realty, Inc. v. DAR and NHA v.
Allarde, respectively, by their technical descriptions; and in contrast, Presidential Proclamation No.
1520 generally declares the Municipalities of Maragondon, Ternate, and Cavite, as a tourist zone,
leaving it to the PTA to identify and delineate the specific areas with potential tourism value.
The foregoing argument is hardly persuasive.
Yet again, a more thorough review of the two judicial precedents will disclose that only
Presidential Proclamation No. 1637 in Natalia Realty, Inc. v. DAR strictly provided a technical
description of the parcels of land it added to the townsite reservation. The technical description in
Presidential Proclamation No. 843 in NHA v. Allarde covers the entire Tala Estate, but the parcels of
land subject matter of the case, which were reserved for housing and resettlement sites, were
described no more particularly than the "remaining five hundred ninety eight (598) hectares" after
prior allocation of the other areas of the Estate for the leprosarium and settlement site of the
hansenites and their families, National Housing Corporation plant, civic center, and welfare projects
of the Department of Social Welfare. Indeed, Presidential Proclamation No. 843 includes a
statement that the "[m]ore precise identities of the parcels of land allocated above will be made
after a final survey shall have been completed, . . ." TIaCAc
More importantly, Letter of Instructions No. 352, in furtherance of Presidential Proclamation No.
1520, mandates the Director of Lands to survey and prepare the technical description of the
Maragondon-Ternate-Nasugbu Tourist Zone, "which survey and technical description shall
be considered an integral part of Proclamation No. 1520 dated November 28, 1975." Hence, just
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like Presidential Proclamation No. 843 in NHA v. Allarde,the technical description of the tourist zone
declared by the Presidential Proclamation No. 1520 is still to follow. It does not detract or prevent
though the reclassification of the agricultural lands undeniably located within the tourist zone to
non-agricultural uses.
Failure of the Director of Lands to provide the technical description of the Maragondon-TernateNasugbu Tourist Zone should not affect the effectivity of Presidential Proclamation No. 1520. Letter
of Instructions No. 352 only said that the technical description of the Tourist Zone shall form part of
Presidential Proclamation No. 1520, but it did not say that the lack of the former shall suspend the
effectivity of the latter. And even absent the technical description of the tourist zone, it is
undisputed that it includes the whole Municipality of Nasugbu, and that the three haciendas of
Roxas & Co. are located within Nasugbu; ergo, the three haciendas are part of the tourist zone.
KAMAHARI, DAMBA-NFSW, and DAR, in addition, call attention to the definition of
reclassification as the act of specifying how agricultural lands shall be utilized for non-agricultural
uses such as residential, industrial, or commercial. 61 They contend that the lands involved
in Natalia Realty, Inc. v. DAR and NHA v. Allarde were reserved for specific non-agricultural uses,
unlike in Presidential Proclamation No. 1520 which merely declared the three Municipalities a
tourist zone.
KAMAHARI, DAMBA-NFSW, and DAR fail to understand that the essential point in reclassification
is that agricultural lands are henceforth to be specifically utilized for non-agricultural uses,
regardless of whether such uses be residential, industrial, or commercial. When parcels of land are
declared to be in a tourist zone, they are already specially devoted to tourism purposes, which
unmistakably constitute non-agricultural, rather than agricultural, uses.
Lands devoted to agricultural uses are subject to CARP, and owners of such lands need to
consider the rights of tenants, farmers, and farmworkers. These are burdens not imposed upon
owners of lands devoted to non-agricultural uses. As these cases demonstrate, the existence of
agricultural lands are incompatible with tourism development, for it limits and delays the latter,
which may ultimately discourage investors; thus, defeating the purpose for establishing a tourist
zone.
Now as to whether particular parcels of land within the tourist zone are to be used as residential,
industrial, or commercial (but still in furtherance of tourism purposes), it can be subsequently
determined under the zone development plan which, according to Letter of Instructions No. 352,
the PTA must formulate in coordination with the DOT, LGUs, and other government agencies.
While Natalia Realty, Inc. v. DAR and NHA v. Allarde may be applied as judicial precedents in this
case, the same cannot be said for DAR v. Franco. 62
HCaDIS
DAR v. Franco involved Presidential Proclamation No. 2052 that declares as a tourist zone the
Barangays of Sibugay, Malubog, Babag and Sirao, including the proposed Lusaran Dam in the City of
Cebu, and the Municipalities of Argao and Dalaguete in the Province of Cebu. Franco, the landowner,
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protested the MARO and PARO orders fixing provisional leasehold rentals for his 36.8-hectare land
in Babag, Cebu City. Franco argued that by virtue of Presidential Proclamation No. 2052, issued on
30 January 1981, his land was already reclassified as non-agricultural, prior to the effectivity of the
CARL on 15 June 1988, thus, exempting said property from CARP coverage. The DARAB ruled in
Franco's favor, but one DARAB member made a handwritten note under his signature stating that
Franco would still have to apply for conversion and if granted, the occupants of his land would be
entitled to disturbance compensation. Franco appealed to the Court of Appeals questioning the
handwritten note of the DARAB member. The Court of Appeals ruled that Franco did not have to
apply for conversion of his land, but should still apply for exemption clearance from the DAR. On
the matter of compensation, the appellate court held that the occupants of the land are not entitled
to disturbance compensation absent any proof that they are tenants, farmers, or bona
fide occupants thereof. The DAR then brought the case on appeal to this Court.
The Court pronounced in DAR v. Franco that:
A separate opinion cannot be a proper subject of an appeal. More so in this case where what was
appealed in the appellate court was a one-sentence handwritten note of a DARAB member. It is not
even the opinion of the DARAB but is merely the personal view of a DARAB member. The appellate
court should have dismissed the petition which appealed not the DARAB decision itself but a mere
note of a DARAB member which is not part of the DARAB decision. As held in Bernas v. Court of
Appeals, "courts of justice have no jurisdiction or power to decide a question not in issue and that a
judgment going outside the issues and purporting to adjudicate something upon which the parties
were not heard is not merely irregular, but extrajudicial and invalid."
Indeed, the ruling of the appellate court that private petitioners have no right to disturbance
compensation because they have not proven that they are tenants of Franco's land went beyond the
DARAB decision being appealed. The determination of entitlement to disturbance compensation is
still premature at this stage since this case originally involved only the issue of nullity of the
Provisional Lease Rental Orders. Further, it is the DAR that can best determine and identify the
legitimate tenants who have a right to disturbance compensation.
The Court then proceeded to mention that the DAR Secretary issued an Order on 30 August 1994,
finding that "the specific intent of Proclamation No. 2052 is the identification of areas for tourism
with the implication that the other areas within the proclamation but no longer necessary for
tourism development as determined by the PTA, in this case, could be transferred for agrarian
reform purposes to the DAR." After mention of the DAR Secretary's Order, the Court
wrote: aSCHcA
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
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before the enactment of RA 6657 on 15 June 1988 do not need any conversion clearance. (Emphasis
ours.)
Apparently, the Court, in the first sentence in the afore-quoted paragraph from Franco,was not
making a ruling, but only taking note of the contents of the 30 August 1994 Order of the DAR
Secretary. Even if the Court was making a judicial determination with said statement, it must be
remembered that Franco's appeal to the Court of Appeals raised the sole issue of the handwritten
note of the DARAB member, and it was the only issue which the Court can take cognizance of on
appeal in DAR v. Franco. Any declaration by the Court in said case, unrelated to the issue raised on
appeal, is but obiter dictum.
An obiter dictum has been defined as an opinion expressed by a court upon some question of law
which is not necessary to the decision of the case before it. It is a remark made, or opinion
expressed, by a judge, in his decision upon a cause, "by the way," that is, incidentally or collaterally,
and not directly upon the question before him, or upon a point not necessarily involved in the
determination of the cause, or introduced by way of illustration, or analogy or argument. Such are
not binding as precedent. 63
The DAR objects to the mention by Roxas & Co. of the neighboring hacienda in Nasugbu, owned
by the Group Developers and Financiers, Inc. (GDFI), which has not been subjected to CARP and is
already being developed into a resort complex. The DAR explains that Roxas & Co. cannot claim
unequal protection of the law since it is not similarly situated as GDFI. The hacienda of GDFI was
covered by an application for conversion, not exemption, and it was approved by the DAR Secretary
way back on 27 March 1975, even before the issuance of Presidential Proclamation No. 1520 on 28
November 1975. The approval of the conversion was based on the finding that the hacienda of GDFI
was not suitable for agricultural purposes. Although the succeeding Order dated 22 January 1991 of
the DAR Secretary, denying the Motion for Reconsideration therein, did mention Presidential
Proclamation No. 1520, the more important thing is that the original disposition granting the
conversion, rendered more than 16 years earlier, did not rely at all on said proclamation.
Still, the case of GDFI was not only brought up to support the argument that Presidential
Proclamation No. 1520 already reclassified all agricultural lands in Nasugbu to non-agricultural
uses; but also to hold the DAR to its finding that the hacienda of GDFI is unsuitable for agricultural
purposes because of soil and topographical characteristics. 64 If such is the condition of
the hacienda of GDFI, then how far different can it be from those of the adjoining Haciendas
Caylaway, Banilad, and Palico of Roxas & Co.? Nevertheless, the actual condition of the
three haciendas is already immaterial in light of Presidential Proclamation No. 1520, which
declared the whole of Nasugbu part of a tourist zone, consequently, reclassifying all agricultural
lands therein, whether actually suited for agriculture or not, to non-agricultural uses. ETHIDa
There is no dispute that Presidential Proclamation No. 1520 has the force and effect of law, since
"all proclamations, orders, decrees, instructions, and acts promulgated, issued, or done by the
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former President (Ferdinand E. Marcos) are part of the law of the land, and shall remain valid, legal,
binding, and effective, unless modified, revoked or superseded by subsequent proclamations,
orders, decrees, instructions, or other acts of the President." 65
It cannot be said that the CARL repealed Presidential Proclamation No. 1520, whether expressly
or impliedly.
Presidential Proclamation No. 1520 is not among the laws expressly repealed by the CARL in the
latter's Section 76:
Section 76. Repealing Clause. Section 35 of Republic Act No. 3844, Presidential Decree No. 316,
the last two paragraphs of Section 12 of Presidential Decree No. 946, Presidential Decree No. 1038,
and all other laws, decrees, executive orders, rules and regulations, issuances or parts thereof
inconsistent with this Act are hereby repealed or amended accordingly.
Neither can it be said that the CARL impliedly repealed Presidential Proclamation No. 1520. As a
rule, repeal by implication is frowned upon, unless there is clear showing that the later statute is so
inconsistent and repugnant to the existing law that they cannot be reconciled and made to stand
together. 66 The CARL is not inconsistent with or repugnant to Presidential Proclamation No. 1520.
In truth, there is no point at which the two laws pertain to the same thing for them to be in conflict
with each other. Presidential Proclamation No. 1520 was issued on 28 November 1975 declaring
the Municipalities of Maragondon and Ternate in Cavite Province and Nasugbu in Batangas
Province as a tourist zone, thus, reclassifying all agricultural lands located therein to nonagricultural uses. When CARL took effect on 15 June 1988, its scope was limited to public and
private agricultural lands, 67which no longer include the previously reclassified parcels of land in
Maragondon, Ternate, and Nasugbu. It is this very reason that entitles Roxas & Co. to an exemption
clearance for Haciendas Caylaway, Banilad, and Palico, under DAR Administrative Order No. 6,
series of 1994.
Irrefragably, a finding that Presidential Proclamation No. 1520, in declaring the whole of
Nasugbu part of a tourist zone, had also reclassified all of the agricultural lands therein to nonagricultural uses, will have significant impact on the resolution of the other five Petitions at bar.
B.

CARP Exemption of Certain Lots in Hacienda Palico, based on Nasugbu Municipal

Zoning Ordinance No. 4, series of 1982 (G.R. No. 149548, No. 179650, and No.
167505)

Prior to the filing of its application for exemption of the three haciendas from CARP Coverage based
on Presidential Proclamation No. 1520, Roxas & Co. had already filed applications for exemption of
certain lots, all located within Hacienda Palico: (1) DAR Administrative Case No. A-9999-142-97
covered six lots, with an aggregate area of 51.54 hectares, now the subject of both G.R. No. 149548
and No. 179650; and (2) DAR Administrative Case No. A-9999-008-98 covered nine lots, with an
aggregate area of 45.977 hectares, now the subject of G.R. No. 167505. Roxas & Co. filed the
applications under DAR Administrative Order No. 6, series of 1994, based on the claim that said lots
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have been reclassified to non-agricultural uses by virtue of Nasugbu Municipal Zoning Ordinance
No. 4, enacted by the Sangguniang Bayan of Nasugbu on 18 April 1982, and approved by the HSRC,
now HLURB, under Resolution No. 123, dated 4 May 1983.
The Petitions of DAMBA-NFSW in G.R. No. 179650 and No. 167505 separately assail the grant by
the DAR Secretary of the applications for exemption of Roxas & Co. in DAR Administrative Cases No.
A-9999-142-97 and No. A-9999-008-98, respectively, as affirmed by the Court of Appeals. Without
directly challenging the validity of Nasugbu Municipal Zoning Ordinance, No. 4, series of 1982,
which admittedly enjoys the presumption of validity, DAMBA-NFSW disputes instead the grant of
the two applications for exemption on the ground that the provisions of said Municipal Zoning
Ordinance were "too vague" to support the claim of Roxas & Co. that its lots are within the nonagricultural zones. DAMBA-NFSW also points out that since the Nasugbu Municipal Zoning
Ordinance No. 4, series of 1982, failed to specify the area size covered by the residential, industrial,
and commercial zones, it is difficult to determine whether the lots of Roxas & Co. could actually be
found therein. DAMBA-NFSW finally questions the lack of notice to its members of the filing by
Roxas & Co. of the applications for exemption in DAR Administrative Cases No. A-9999-142-97 and
No. A-9999-008-98. DEAaIS
I reiterate my stance in G.R. No. 167540 and No. 167543 that Presidential Proclamation No. 1520,
issued on 28 November 1975, had declared the whole Municipality of Nasugbu as part of a tourist
zone, thereby devoting all lands therein to tourism development, and consequently reclassifying all
agricultural lands therein to non-agricultural uses. This renders the Petitions of DAMBA-NFSW in
G.R. No. 179650 and No. 167505 moot and academic, since the exemption of the whole necessarily
includes the exemption of the parts constituting the same.
The lots involved in G.R. No. 179650 and No. 167505, being undisputedly located within
Hacienda Palico in Nasugbu, were already reclassified to non-agricultural uses byPresidential
Proclamation No. 1520 upon its issuance on 28 November 1975. The subsequent enactment
of Nasugbu Municipal Zoning Ordinance No. 4 by the Sangguniang Bayan of Nasugbu on 18 April
1982 no longer served to reclassify the lots in G.R. No. 179650 and No. 167505 from agricultural to
non-agricultural, but merely identified the particular non-agricultural use (i.e., residential,
industrial, or commercial) for the same according to the zone or district in which they are located.
That a court will not sit for the purpose of trying moot cases and spend its time in deciding
questions the resolution of which can not in any way affect the rights of the person or persons
presenting them is well settled. Where the issues have become moot and academic, there is no
justiciable controversy, thereby rendering the resolution of the same of no practical use or
value. 68 SHTcDE
As for the Petition of Roxas & Co. in G.R. No. 149548, its resolution relies on the outcome of the
Petitions in G.R. No. 167845 and No. 169163, involving the partial and complete cancellations of
CLOA No. 6654.

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To recall, the Court of Appeals, in its 30 May 2001 Decision in CA-G.R. SP No. 63146, did not
divest Roxas & Co. of the latter's right to present additional evidence before the DAR in support of
its claim in DAR Administrative Case No. A-9999-142-97, that the six lots in Hacienda Palico, with
an aggregate area of 51.54 hectares, are exempt from CARP coverage pursuant to the Nasugbu
Municipal Zoning Ordinance No. 4, series of 1982. At the same time, in view of the ruling of this
Court in Roxas & Co. v. Court of Appeals,recognizing the rights of farmer-beneficiaries to possess and
till the parcels of land awarded to them under CLOA No. 6654, the appellate court allowed the DAR
to proceed with installing the farmer-beneficiaries on the six lots, without prejudice to the final
determination of the right of Roxas & Co. over the said properties. Thus, in its Petition in G.R. No.
149548, Roxas & Co. is appealing the alleged premature installation of the farmer-beneficiaries on
the six lots.
Vital herein is the ruling of the Court in Roxas & Co. v. Court of Appeals, wherein it refused to
short-circuit the administrative process and did not nullify the CLOAs issued to the farmerbeneficiaries. It gave the DAR a chance to correct its procedural lapses in the acquisition
proceedings. The Court took note that since 1993 until the present, the farmer-beneficiaries have
been cultivating their lands; and it goes against the basic precepts of justice, fairness and equity to
deprive these people, through no fault of their own, of the land they till. The Court, though, also
stated that the farmer-beneficiaries should hold the property in trust for the rightful owner of the
land.
Stated otherwise, the Court, in Roxas & Co. v. Court of Appeals, left the matter of cancellation of
the CLOAs issued to farmer-beneficiaries to the determination by the DAR in the proper
administrative proceedings. Unless and until such CLOAs are cancelled, the farmer-beneficiaries
have a right to the possession of the parcels of land covered by said certificates.
The six lots subject of G.R. No. 149548 (as well as G.R. No. 179650) are covered by CLOA No. 6654.
As a result, the question of the right of the farmer-beneficiaries to the possession of said six lots in
G.R. No. 149548 is inextricably entwined with the issues on the partial and complete cancellations
of CLOA No. 6654 raised in G.R. No. 167845 and No. 169163.
C.

Petitions for Partial and Complete Cancellation of CLOA No. 6654 (G.R. No. 167845
and No. 169163)

DAMBA-NFSW maintains that the petitions of Roxas & Co. in DARAB Cases No. R-401-003-2001
to No. R-401-005-2001 and No. 401-239-2001, for the partial and complete cancellations,
respectively, of CLOA No. 6654, are in violation of the ruling of the Court inRoxas & Co. v. Court of
Appeals that the issued CLOAs "cannot and should not be cancelled." It anchors its argument on the
penultimate paragraph in the 17 December 1999 Decision of the Court in said case, which reads:
Finally, 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. 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

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procedural lapses in the acquisition proceedings. In Hacienda Palico alone, CLOA's were issued to
177 farmer beneficiaries in 1993.92 Since then until the present, these farmers have been
cultivating their lands.93 It goes against the basic precepts of justice, fairness and equity to deprive
these people, through no fault of their own, of the land they till. Anyhow, the farmer beneficiaries
hold the property in trust for the rightful owner of the land. CIAcSa
DAMBA-NFSW evidently misunderstood the afore-quoted paragraph in Roxas & Co. v. Court of
Appeals. There is nothing therein categorically prohibiting the cancellation of the CLOAs issued to
the farmer-beneficiaries. What the Court plainly said was that despite its finding that the DAR failed
to comply with due process in the acquisition proceedings, the Court still had no power to nullify
the CLOAs because such matter lies within the primary jurisdiction of the DAR. Thus, the DARAB,
which has exclusive original jurisdiction over petitions for cancellation of CLOAs, cannot be
precluded from acting on and granting such petitions filed by Roxas & Co.
The farmer-beneficiaries did not acquire vested rights over the lands covered by their CLOAs, by
virtue of Roxas & Co. v. Court of Appeals. The Court only recognized in said case their rights to
continue to possess and till the parcels of land covered by their CLOAs until the DAR has
undertaken proper acquisition proceedings. But the Court, in Roxas & Co. v. Court of Appeals, did
not (1) guarantee the success of the acquisition proceedings over all the lands covered by the
CLOAs; (2) affirm the validity of the CLOAs and the absolute right of the farmer-beneficiaries
thereunder; nor (3) discount the possibility that in the course of the acquisition proceedings, the
DAR would decide to exempt all or certain parcels of land from CARP coverage, cancel some or all of
the CLOAs, or disqualify some or all of the farmer-beneficiaries. The Court merely left all of these
matters to the determination of the DAR, which has primary jurisdiction over the same.
In her 21 May 2001 Joint Order in DARAB Cases No. R-401-003-2001 to No. R-401-005-2001, the
PARAD granted the partial cancellation of CLOA No. 6654 insofar as it covered three lots, Lot 125-K,
Lot-125-M, and Lot-125-L, located within Hacienda Palico, and with a total area of 103.1436
hectares. Similarly, in her 27 May 2001 Decision in DARAB Case No. 401-239-2001, the PARAD
granted the complete cancellation of CLOA No. 6654. The PARAD denied the Motions for
Reconsideration of DAMBA-NSFW for being filed one day beyond the 15-day reglementary period.
The PARAD also refused to give due course to the Notice of Appeal of DAMBA-NFSW for again being
filed beyond the reglementary period.
The reglementary periods for the filing of a motion for reconsideration and the succeeding
appeal are governed by Section 12 of the 1994 DARAB Rules of Procedure, which stated:
Section 12. Motion for Reconsideration. Within fifteen (15) days from receipt of notice of the
order, resolution or decision of the Board or Adjudicator, a party may file a motion for
reconsideration of such order or decision , together with proof of service of one (1) copy thereof
upon the adverse party. Only one (1) motion for reconsideration shall be allowed a party which
shall be based on the ground that: (a) the findings of fact in the said decision, order or resolution
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was not supported by substantial evidence, or (b) the conclusions stated therein are against the law
or jurisprudence. CIDcHA
The filing of a motion for reconsideration shall suspend the running of the period within
(which) the appeal must be perfected. If a motion for reconsideration is denied, the movant
shall have the right of perfect his appeal during the remainder of the period for appeal,
reckoned from receipt of the resolution of denial. If the decision is reversed on reconsideration,
the aggrieved party shall have fifteen (15) days from receipt of the resolution of reversal within
which to perfect his appeal.
DAMBA-NFSW received both the 21 May 2001 Joint Order in DARAB Cases No. R-401-003-2001
to No. R-401-005-2001 and 27 May 2001 Decision in DARAB Case No. 401-239-2001 on 13 June
2001. It had until 28 June 2001 to file its Motions for Reconsideration. DAMBA-NFSW claims to
have filed via registered mail on 28 June 2001 its Motions for Reconsideration, and filed by
personal delivery on 29 June 2001 additional copies of said Motions. The PARAD, in her 10 July
2001 Joint Resolution, dismissed both Motions for Reconsideration, finding that they were filed one
day late, on 29 June 2001. Apparently working against the claim of DAMBA-NFSW was its failure to
attach the actual registry receipt to prove that it sent its Motions for Reconsideration by registered
mail on 28 June 2001, instead of a mere handwritten notation of the registry receipt number on the
said Motions.
Even conceding that the said Motions for Reconsideration were filed on 28 June 2001, the Notice
of Appeal of DAMBA-NFSW was unmistakably filed beyond the reglementary period for appeal.
DAMBA-NFSW received a copy of the 10 July 2001 Resolution of the PARAD denying its Motions for
Reconsideration on 21 August 2001. Considering that DAMBA-NFSW filed its Motions for
Reconsideration on the 15th day of the reglementary period, pursuant to Section 12 of the 1994
DARAB Rules of Procedure, it had only one more day from receipt of the denial of its Motions to file
its appeal, which, in this case, would be on 22 August 2001. This is in accord with the rule that says
a motion for reconsideration only suspends the period within which the appeal should be perfected.
In case of denial of the motion for reconsideration, as in these cases, the movant shall have the right
to perfect his appeal during the remainder of the period for appeal, reckoned from receipt of the
resolution of denial. Erroneously believing it had a fresh 15-day reglementary period though,
DAMBA-NFSW filed its Notice of Appeal on 5 September 2001.
In Advincula-Velasquez v. Court of Appeals, 69 this Court declared that:
The filing of a notice of appeal is no idle ceremony. Its office is to elevate the case on appeal to
DARAB without which appellate jurisdiction is not conferred. Neither PARAD nor DARAB is
permitted to enlarge the constricted manner by which an appeal is perfected. Liberal construction
of DARAB rules is unavailable to produce the effect of a perfected appeal.
Perfection of an appeal in the manner and within the period prescribed by law is not
only mandatory but also jurisdictional, and failure to perfect an appeal as required by the Rules had
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the effect of rendering the judgment final and executory. This doctrine of finality of judgment is
grounded on fundamental considerations of public policy and sound practice (Filcon Manufacturing
Corp. v. NLRC, 199 SCRA 814). And nothing is more settled in the law than that when a final
judgment becomes executory, it thereby becomes immutable and unalterable (Nual v. Court of
Appeals, 221 SCRA 26; Garbo v. Court of Appeals, 226 SCRA 250). Failure to meet the requirements
of an appeal deprives the appellate court of jurisdiction to entertain any appeal. This principle
applies to judgments of courts and of quasi-judicial agencies (Vega v. Workmen's Compensation
Commission, 89 SCRA 140).
Since the decision of the PARAD had become final and executory, the same could no longer be
altered, much less, reversed by the DARAB. Hence, the DARAB had no appellate jurisdiction over
the petitioner's appeal. A substantial modification of a decision of a quasi-judicial agency which had
become final and executory is utterly void. DAHCaI
The counsel for DAMBA-NFSW admits that she had misread the rules on the reglementary period
for filing a motion for reconsideration and/or appeal before the DARAB, but she pleads for the
relaxation of technical rules so as to prevent the miscarriage of justice for the hundreds of farmerbeneficiaries of CLOA No. 6654 and their families.
While it may be acknowledged that there are exceptional circumstances warranting the
acceptance of the appeal despite its late filing, 70 none exists at the case at bar. Quite beyond cavil,
the delay incurred by the counsel of DAMBA-NFSW in filing the Notice of Appeal, totaling 14 days,
was simply inexcusable. This Court had already held that "(a)n erroneous application of the law or
rules is not excusable error." 71
There is also little merit to the appeals of DAMBA-NFSW in both DARAB Cases No. R-401-0032001 to No. R-401-005-2001 (G.R. No. 167845) and DARAB Case No. 401-239-2001 (G.R. No.
169163) as to warrant being given due course, despite their belated filing.
DARAB Cases No. R-401-003-2001 to No. R-401-005-2001, in particular, involve the applications
for partial cancellation of CLOA No. 6654 as regards three lots. The basis for said application is
the final and executory Decision dated 2 April 1996 of the Court of Appeals in CA-G.R. SP No.
36299, which adjudged the three lots to be exempt from CARP coverage, having been reclassified by
the Nasugbu Municipal Zoning Ordinance No. 4, series of 1982, to residential use, and which should
have been excluded from CLOA No. 6654.
Nothing is more settled in law than that when a final judgment is executory, it thereby becomes
immutable and unalterable. The judgment may no longer be modified in any respect, even if the
modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and
regardless of whether the modification is attempted to be made by the court rendering it or by the
highest Court of the land. The doctrine is founded on considerations of public policy and sound
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practice that, at the risk of occasional errors, judgments must become final at some definite point in
time. 72
Litigation must at some time be terminated, even at the risk of occasional errors. Public policy
dictates that once a judgment becomes final, executory and unappealable, the prevailing party
should not be denied the fruits of his victory by some subterfuge devised by the losing party.
Unjustified delay in the enforcement of a judgment sets at naught the role of courts in disposing
justiciable controversies with finality. 73
Apparent from the foregoing are the two-fold purposes for the doctrine of the immutability and
inalterability of a final judgment: first, to avoid delay in the administration of justice and thus,
procedurally, to make orderly the discharge of judicial business; and,second, to put an end to
judicial controversies, at the risk of occasional errors, which is precisely why courts exist.
Obviously, the first purpose is in line with the dictum that justice delayed is justice denied. But said
dictum presupposes that the court properly appreciates the facts and the applicable law to arrive at
a judicious decision. The end should always be the meting out of justice. As to the second purpose,
controversies cannot drag on indefinitely. The rights and obligations of every litigant must not hang
in suspense for an indefinite period of time. It must be adjudicated properly and seasonably to
better serve the ends of justice and to place everything in proper perspective. In the process, the
possibility that errors may be committed in the rendition of a decision cannot be
discounted. 74 TaDSHC
The only recognized exceptions to the foregoing doctrine are the corrections of clerical errors or
the making of the so-called nunc pro tunc entries, which cause no prejudice to any party, and, where
the judgment is void. 75 Void judgments may be classified into two groups: those rendered by a
court without jurisdiction to do so and those obtained by fraud or collusion. 76 None of these
exceptions can be applied to the final and executory judgment of the Court of Appeals in CA-G.R. SP
No. 36299.
It can be said herein that the questions relating to the exemption of the three lots from CARP
coverage and their exclusion from CLOA No. 6654 had been settled with finality by the Court of
Appeals in its 2 April 1996 Decision in CA-G.R. SP No. 36299. Therefore, the PARAD was correct in
saying in her 21 May 2001 Joint Order in DARAB Cases No. R-401-003-2001 to No. R-401-005-2001
that it had become merely ministerial on her part to order the partial cancellation of CLOA No.
6654. The directive of the Court of Appeals in its 10 September 2004 Decision in CA-G.R. SP No.
72198 for DARAB to still give due course to the appeal of DAMBA-NFSW of the partial cancellation
of CLOA No. 6654, no longer serves any practical purpose since the DARAB can no longer modify in
any way the findings and conclusions made by the appellate court in CA-G.R. SP No. 36299, nor
sidestep the inevitable consequences thereof, i.e., partial cancellation of CLOA No. 6654.
On the other hand, in DARAB Case No. 401-239-2001, the PARAD ordered the complete
cancellation of CLOA No. 6654 after finding technical defects in the subdivision survey used for the
said certificate, which rendered the survey null. These technical defects became apparent only after
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the Court of Appeals, in CA-G.R. SP No. 36299, ordered the exemption from CARP coverage of the
three lots and their exclusion from CLOA No. 6654.
When Hacienda Palico was compulsorily placed under the CARP, a segregation and subdivision
survey was conducted by Engr. Miguel V. Pangilinan (Pangilinan) on 22 April to 24 June 1993. Engr.
Pangilinan incorrectly plotted his survey using the old subdivision plan,Psd-04-016141 (OLT),
which was already cancelled and superseded on 10 July 1991 by subdivision plan Psd-04-6912,
LRC Record 102. And, based on the result of Engr. Pangilinan's defective survey, a new subdivision
plan, Bsd-041019-003090 (AR), was approved on 6 October 1993, segregating the 513.9863
hectares subsequently awarded to the farmer-beneficiaries under CLOA No. 6654.
Moreover, my resolution of the Petitions in G.R. No. 167540 and No. 167543 already renders
nugatory the giving of due course to the appeals of DAMBA-NFSW to the DARAB of the partial and
complete cancellations of CLOA No. 6654 by the PARAD.
As previously established herein, Haciendas Caylaway, Banilad, and Palico are exempt from CARP
coverage, under DAR Administrative Order No. 6, series of 1994, since Presidential Proclamation
No. 1520 had already declared the whole of Nasugbu as part of a tourist zone and reclassified all
agricultural lands therein to non-agricultural uses, long before the effectivity of the CARL. Being
exempt from CARP coverage, no CLOAs could have been validly issued by the DAR to farmerbeneficiaries over the parcels of land in the three haciendas. Even if the appeals of DAMBA-NFSW in
DARAB Cases No. R-401-003-2001 to No. R-401-005-2001 (G.R. No. 167845) and DARAB Case No.
401-239-2001 (G.R. No. 169163) are given due course before the DARAB, the inescapable fate of
CLOA No. 6654 is its complete cancellation because the land it covers is actually exempt from CARP
coverage. SDIACc
With the complete cancellation of CLOA No. 6654, on the basis that the parcels of land covered
thereby are exempt from CARP coverage, then there is no more legal obstacle to Roxas & Co., as the
rightful owner, from recovering title and possession to the said properties, including the six lots
subject of G.R. No. 149548, from the farmer-beneficiaries who have possessed and tilled the same
only in trust (save only for the payment of appropriate disturbance compensation, as will be
subsequently discussed herein). Hence, the Petition of Roxas & Co. in G.R. No. 149548 seeking an
injunction against the installation by the DAR of the farmer-beneficiaries on the six lots until CLOA
No. 6654 covering the said properties is cancelled has been rendered moot and academic.
D.

Forum Shopping

All throughout the seven Petitions presently before this Court, there is the repeated allegation by
DAMBA-NFSW that Roxas & Co. committed forum-shopping by the institution of several cases
before the DAR Secretary, DARAB, and the courts.
There is forum-shopping when as a result of an adverse decision in one forum or, it may be
added, in anticipation thereof, a party seeks a favorable opinion in another forum through means
other than appeal or certiorari, raising identical causes of action, subject matter, and issues. Forum234
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shopping exists when two or more actions involve the same transactions, essential facts, and
circumstances; and raise identical causes of action, subject matter, and issues. Yet another
indication is when the elements of litis pendenciaare present or where a final judgment in one case
will amount to res judicata in the other case. The test is whether in the two or more pending cases
there is an identity of (a) parties, (b) rights or causes of action, and (c) reliefs sought.
After a meticulous study of the all the instant Petitions, I find that there has been no forumshopping on the part of Roxas & Co., there being substantial differences in the cases it instituted.
For the sake of brevity, I have summed up, in table form, the various cases filed by Roxas & Co. as
regards its landholdings in Nasugbu:
Case

Original Forum

Subject Matter

CA-G.R. SP No.
Court of Appeals
32484 (Roxas & Co. v.
Banilad,
and Mandamus,seeking
Court of Appeals)
from

Nature

Haciendas
Caylaway,

Petition for Prohibition

Palico

to prevent the DAR

further proceedings to
acquire the threehaciendas
and compel the DAR to
approve its application for
conversion

DAR Admin. Case No.

exemption
A-9999-084-00
based
(G.R. No. 167540)
Proclamation

DAR Regional

Haciendas

Office

Application for

Caylaway, Banilad,
Palico

from CARP coverage

on Presidential

No. 1520
DAR Admin. Case No.
exemption
A-9999-142-97
based
(G.R. No. 149548 and
Municipal Zoning
No. 179650)
of

DAR Regional
Office

Six lots, measuring

Application for

51.5472 hectares,

from CARP coverage

part of Hacienda

on Nasugbu

Palico

Ordinance No. 4, series

1982

G.R. No. 149548

assailing

Supreme Court

Six lots, measuring

Petition for Review

51.5472 hectares,

the judgment of the

part of Hacienda

Appeals in CA-G.R. SP

Court of
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No.
Palico

63146 allowing DAR to

install
the farmer-beneficiaries on
the six lots, while Roxas &
Co. is presenting additional
evidence in DAR Admin.
Case No. A-9999-142-97
DAR Admin. Case
exemption
No. A-9999-008-98.
(G.R. No. 167505)

DAR Regional
Office

Nine lots, measuring

Application for

45.977 hectares,
from CARP coverage
part of Hacienda
based on Nasugbu
Palico
Municipal Zoning

Ordinance
No. 4, series of 1982
Unable to determine
exclusion
docket no. from the
CLOA
records (CA-G.R. SP
No. 36299)
from CARP

DAR Regional

Three lots,

Office

Protest seeking the

measuring

of the three lots from

103.1436, part of
Hacienda Palico and
covered by CLOA
No. 6654

No. 6654, citing the

exemption thereof
Coverage by virtue of
Nasugbu Municipal

Zoning
Ordinance No. 4, series of
1982
DARAB Cases No.
R-401-003-2001 to
No.
No. R-401-005-2001
three
(G.R. No. 167845)
given

DARAB

Three lots, subject

of CA-G.R. SP No.

Petition for partial

cancellation of CLOA

36299, covered by
CLOA No. 6654

6654, insofar as the

lots are concerned,

the final and executory

judgment of the Court of
appeals in CA-G.R. SP No.
36299 declaring said
property
exempt from CARP
coverage
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DARAB Case No.
complete
401-239-2001
(G.R. No. 169163)
null and

DARAB

The remaining

Petition for total or

410.8327 hectares,
covered by CLOA

cancellation of CLOA
No. 6654 for being

No. 6654

void given the technical

defects in the survey plan

on
which said certificate was
based
There is no basis then for the Court to dismiss any of the foregoing cases on the ground of forumshopping by Roxas & Co. DSTCIa
It is worthy to note that the seemingly repetitive filing of administrative cases by Roxas & Co.
may actually be due to its strict compliance with DAR rules. Even though they may involve the very
same landholdings, applications for exemption from CARP coverage and petitions for cancellation
of CLOAs fall within the jurisdictions of separate DAR offices: the Office of the DAR Secretary for the
former, and the DARAB for the latter.
The DAR Secretary has exclusive jurisdiction over all matters involving the administrative
implementation of the CARL and other agrarian reform laws, and what would later be referred to as
Agrarian Law Implementation (ALI) cases. 77 Applications for exemptions fall under such cases.
According to DAR Administrative Order No. 6, series of 1994, applications for exemptions shall be
filed with the DAR Regional Office where the subject parcel of land is located, but only the DAR
Secretary shall sign the Order granting or denying the exemption.
On the other hand, petitions for cancellation of issued CLOAs are considered agrarian reform
disputes, 78 since they relate to terms and conditions of transfer of ownership from landlord to
agrarian reform beneficiaries, the exclusive original jurisdiction over which is vested with the
DARAB. 79 DAR Administrative Order No. 2, series of 1994, provides that the land with issued
CLOAs found to be exempt from CARP coverage may be cancelled only upon the application of the
landowner with the DARAB.
The foregoing distinction was the reason why the DAR Secretary included in the dispositive of his
Orders dated 6 November 2002 and 6 January 2003, granting the applications for exemption of
Roxas & Co. in DAR Administrative Cases No. A-9999-008-98 (G.R. No. 167505) and No. A-9999142-97 (G.R. No. 179650), respectively, the following statement: "The cancellation of the
CLOA issued to the farmer-beneficiaries shall be subject of a separate proceeding before the
PARAD of Batangas."
E.

Supervening Events

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The DAR, in its Memorandum, brought to the attention of this Court the following supervening
events which transpired during the pendency of the present Petitions:
First, the Sangguniang Bayan ng Nasugbu, Batangas has completed the formulation of its
Comprehensive Land Use Plan and Municipal Zoning Ordinance of 2002 which was approved by the
HLURB in 2005.
Based on the aforestated documents, the Office of the Municipal Planning and Development
Coordinator/Zoning Administrator of Nasugbu, Batangas certified that Roxas' properties are within
the "Inland Mixed-Use District" of the Comprehensive Land Use Plan.
Second, in Executive Order No. 647 dated August 3, 2007, President Arroyo proclaimed as Special
Tourism Zone the areas included in the Nasugbu Tourism Development Plan as prepared by the
Municipality of Nasugbu and validated by the Philippine Tourism Authority as tourist priority
areas. Section 2 of Executive Order No. 647 states: HDCTAc
Section 2.

Creation of a Special Tourism Zone. Areas included in the Nasugbu Tourism

Development Plan prepared by the Municipality of Nasugbu and validated by the Philippine
Tourism Authority as Tourism Priority Areas are hereby proclaimed Special Tourism Zone.
Third, the Sangguniang Bayan of Nasugbu caused the preparation and approved the Nasugbu
Tourism Development Plan which covered thirty-one (31) out of the total forty-two (42) barangays
in the municipality of Nasugbu, Batangas. In a Certification dated December 10, 2008, PTA informed
the President that it had completed the validation of twenty-one (21) barangays in Nasugbu,
Batangas as tourism priority areas pursuant to Executive Order No. 647.
xxx

xxx

xxx

At present, Congress has enacted Republic Act No. 9593, otherwise known as "The Tourism Act of
2009." It provides that "tourism enterprise zones" shall only be designated after a development
plan is approved by Tourism Infrastructure and Enterprise Zone Authority (TIEZA) formerly
Philippine Tourism Authority and the local government unit concerned through a resolution. It
likewise declared that the lands identified as part of a tourism zone shall qualify for exemption from
coverage of RA 6557 of the Agrarian Reform Law.
Now the Court is faced with the question of what is the effect of the afore-mentioned
supervening events to the Petitions at bar?
I answer, none.
The Applications for Exemption of Roxas & Co. had been filed pursuant to DAR Administrative
Order No. 6, series of 1994, which implements DOJ Opinion No. 44, series of 1990. According to said
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administrative order, the DAR may only exercise its authority to approve conversion of agricultural
land to non-agricultural uses from the date of effectivity of the CARL on 15 June 1988. Thus, all
lands that were already classified as commercial, industrial, or residential prior to 15 June
1988 need no longer secure conversion clearance from the DAR. Instead, such lands shall be
covered by an exemption clearance.
Since all the supervening events recited by the DAR in its Memorandum took place after 15 June
1988, they do not have any impact on how the applications of Roxas & Co. for exemption clearance
under Administrative Order No. 6, series of 1994, should be resolved. The Nasugbu Comprehensive
Land Use Plan and Municipal Zoning Ordinance of 2002; Executive Order No. 647, Nasugbu Tourism
Development Plan; and the Tourism Act of 2009, can only be applied prospectively, for they do not
provide for their retroactivity. 80They could not be deemed to have the effect of retroactively
reclassifying the landholdings of Roxas & Co. from agricultural to non-agricultural before 15 June
1988, or of reversing the same. Indeed, the construction and implementation of these new laws,
development and land use plans, and zoning ordinances, involving Nasugbu, must take into
consideration that as early as 28 November 1975, Presidential Proclamation No. 1520 had declared
Nasugbu as part of a tourist zone and, resultantly, reclassified all the agricultural land therein to
non-agricultural uses. CDaSAE
F.

Final Considerations

KAMAHARI and DAMBA-NFSW submits that for the Court to rule that Presidential Proclamation
No. 1520, in declaring Maragondon, Ternate, and Nasugbu, as a tourist zone, also had the effect of
reclassifying all agricultural lands in said Municipalities to non-agricultural uses, would be a huge
setback to the CARP and its social justice goals. They provided a survey of several other presidential
proclamations and statutes that were similarly worded as Presidential Proclamation No. 1520, and
covering even wider expanse of land, such as provinces and whole islands, to wit:
(a)

Proclamation No. 1653 (issued July 13, 1977) declared the whole province of Ilocos

Norte as a tourist zone because "certain areas" particularly the shorelines in the Province of Ilocos
Norte "have potential tourism value after being developed into resorts for its foreign and domestic
market."
(b)

Proclamation No. 1801 (issued on November 10, 1070 [sic]) declared the whole islands,

coves and peninsula including Camiguin, Puerto Princesa, Siquijor, Panglao Islan in Bohol
as tourist zones because of these areas' natural beauty and potentials for aquatic spots (sic),
tourism, and the interest of marine life preservation.
(c)

Proclamation No. 2052 (issued on January 30, 1981), declared four whole barangay of

Sibugay, Malubog, Babag and Sirao including the proposed Lusaran Dam in the City of Cebu
and the municipalities of Argao and Dalaguete in the Province of Cebu as tourist zones because
"certain areas" within the zone have potential tourism value after being developed into resort
complexes for the foreign and domestic market;
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(d)

Proclamation No. 2067 (issued on March 11, 1981), declared the whole province of

Bataan as a tourist zone because there is a need to establish an export processing zone in
Mariveles, as one would find Dambanang Kagitingan therein, and because Bataan has "untapped
scenic and beautiful spots with tourism potential"; and
(e)

Republic Act No. 8022 (May 25, 1995) declared the municipalities of Boac, Buenavist

(sic) and Torrijos in the province of Marinduque as tourist zones.

KAMAHARI and DAMBA-NFSW alleged that the DAR had already issued and distributed to
farmer-beneficiaries thousands of CLOAs covering parcels of land in the afore-mentioned tourist
zones, which would have to be cancelled.
Firstly, while I am aware of the previously-issued CLOAs and the upheaval my position on
Presidential Proclamation No. 1520 may cause on the CARP, these must not sway the Court to
depart from the plain and obvious meaning of said presidential proclamation. As one authority on
statutory construction so satisfactorily explained:
Where the law is clear and unambiguous, it must be taken to mean exactly what it says and the
court has no choice but to see to it that its mandate is obeyed. Where the law is clear and free from
doubt or ambiguity, there is no room for construction or interpretation. Thus, where what is not
clearly provided in the law is read into the law by construction because it is more logical and wise,
it would be to encroach upon legislative prerogative to define the wisdom of the law, which is
judicial legislation. For whether a statute is wise or expedient is not for the courts to determine.
Courts must administer the law, not as they think it ought to be but as they find it and without
regard to consequences. 81 HCTAEc
Secondly, to be entitled to exemption from CARP coverage under DAR Administrative Order No. 6,
series of 1994, the agricultural lands should have been reclassified to non-agricultural uses prior to
the effectivity of the CARL on 15 June 1988. Hence, the declaration of the Municipalities of Boac,
Buenavista, and Torrijos in Marinduque Province as a tourist zone by Republic Act No. 8022, which
lapsed into law on 25 May 1995 without the President's signature, will not qualify the parcels of
land in said Municipalities to CARP exemption under DAR Administrative Order No. 6, series of
1994.
Thirdly, petitions for cancellation of CLOAs are governed by DAR Administrative Order No. 2,
series of 1994. The scope of said administrative order is defined as follows:
II.

Scope
These rules shall apply to the Registered CLOAs from the time and date of issuance thereof by

the DAR up to the tenth year, when the legal restriction on its conveyance or alienation of the
recipient ARB ends in accordance with Sec. 27, R.A. No. 6657. However, if the ARB concerned has
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not yet fully paid the cost of the land or his obligations pertaining to the land in the case of public
lands, beyond the tenth year from the issuance of the CLOA, then these rules shall continue to apply.
However, if the land has been acquired under P.D. No. 27 or E.O. No. 228, ownership may be
transferred after full payment of amortization by the ARB.
Insofar as they are applicable, these rules shall likewise cover patents, EPs and CLOAs issued
to settlers in resettlement areas under the administration or disposition of the Department of
Agrarian Reform.
Based on the foregoing, no petition for cancellation of CLOA may be filed anymore if 10
years have already passed from the date of issuance of said certificate by the DAR, unless the
beneficiary has not yet fully paid the cost of the land or the obligations pertaining to the land, in
case of public land. The reason behind this rule is that the beneficiary may already legally convey or
alienate the land to another person after the expiration of the 10-year period of restriction,
reckoned from the date of issuance of the CLOA covering said property.
And fourthly, bona fide tenants of the parcels of land are not to be left empty-handed. According
to Section 36 (1) of Republic Act No. 3844, 82 as amended by Republic Act No. 6389: 83
Section 36. Possession of Landholding; Exceptions. An agricultural lessee shall continue in the
enjoyment and possession of his landholding except when his dispossession has been authorized by
the Court in a judgment that is final and executory if after due hearing it is shown that:
(1)

The 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: Provided, That the agricultural lessee shall be entitled to disturbance compensation
equivalent to five times the average of the gross harvests on his landholding during the last five
preceding calendar years. CEASaT
The reliance of Roxas & Co. on Bacaling v. Muya 84 in support of its assertion that farmerbeneficiaries cannot claim disturbance compensation for lots that are not and have never been
available for agrarian reform, is unavailing. In Bacaling v. Muya, there is an express finding by the
Court that there was no valid agricultural leasehold relationship. 85Respondents therein are not
agricultural tenants, and are not entitled to the benefits accorded by agrarian law, among which,
was disturbance compensation.
It is clear in Alarcon v. Court of Appeals 86 that agricultural tenants who are dispossessed because
of the reclassification of the landholding is entitled to disturbance compensation. Also, in DAR
Administrative Order No. 6, series of 1994, under which Roxas & Co. filed its application for CARP
exemption, lists among the requirements "[p]roof of payment of disturbance compensation if the
area is being occupied by farmers, . . ." Therefore, Roxas & Co. cannot escape payment of
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disturbance compensation to its agricultural tenants who shall be dispossessed by the
reclassification of the three haciendasto non-agricultural uses; and it cannot claim that it is offering
to pay said tenants disturbance compensation out of pure liberality.
The proposed compensation and accommodation packages of Roxas & Co. are presented below:
The "beneficiaries" will be grouped according to: (A) former tenants, shareholders and
leaseholders of ROXAS; (B) Original CLOA holders/awardees who have no contractual relationship
with ROXAS but were merely installed by the DAR in the ROXAS landholdings; and (C) illegal
settlers and speculators who, without any CLOA, surreptitiously entered and occupied the subject
landholdings and/or may have been assignees of the original CLOA awardees.
GROUP A
For Group A, disturbance compensation shall be paid to qualified beneficiaries in accordance with
Section 36(1) of R.A. 3844, as amended by R.A. 6389. Group A members shall not be asked to
surrender possession of their awarded lot until and unless disturbance compensation, in
accordance with law, has been paid to them.
Moreover, those who have built improvements within the residential clusters shall be allowed to
own the lot, not exceeding 100 square meters, upon which the improvement was built, at no cost
to them. Any area in excess of 100 square meters shall be surrendered to ROXAS immediately,
subject to the preceding paragraph. Group A members who are within the residential clusters are
given an option to stay at the residential clusters or to relocate in the relocation areas.
For Group A members who have built improvements on areas outside the residential clusters, they
shall be permitted to stay on their home lots (but not exceeding 100 square meters) until a
relocation site chosen by ROXAS has been selected and utilities for basic services (right of way,
water and electricity) are ready for their use and each shall be entitled to one lot, not exceeding 100
square meters, at no cost to them. Any area in excess of 100 square meters shall be surrendered to
ROXAS immediately, subject to the payment of disturbance compensation as discussed
above. SDAcaT
Each barangay where ROXAS has landholdings shall have one relocation site in proportion to the
number of Group A members residing thereat. This is to minimize, as much as possible, dislocation
on the part of the Group A members. Areas in the relocation site shall be uniform. ROXAS reserves
the right to cluster the barangay relocation areas to contiguous and accessible sites according to the
demands of the development in these areas.
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Furthermore, the Roxas Gargollo Foundation, in cooperation with the Technical Skills and
Development Authority, shall conduct a series of livelihood and training programs for the benefit of
Group A members.
GROUP B
Group B members are not entitled to disturbance or whatever kind of compensation.
For Group B members who have built improvements within the residential clusters, they shall be
allowed to buy in installment the lot upon which the improvement was built, but not exceeding 100
square meters, at prevailing market value. Any area in excess of 100 square meters shall be
surrendered immediately to ROXAS.
For those who have built improvements on areas outside the residential clusters, they shall be
permitted to stay on their home lots (but not exceeding 100 square meters) until a relocation site
chosen by ROXAS has been selected and utilities for basic services (right of way, water and
electricity) are ready for their use. Each shall be allowed to buy in installment one relocation lot,
not exceeding 100 square meters, at prevailing market value. Any area in excess of their home lot
shall be surrendered immediately to ROXAS.
Areas in the relocation site shall be uniform. Original CLOA holders/awardees have the option to
choose which area to buy. Each barangay, over which ROXAS has landholdings, shall have one
relocation site in proportion to the number of original CLOA holders residing thereat. Again, this is
to minimize, as much as possible, dislocation on the part of the Group B members. ROXAS reserves
the right to cluster the barangay relocation areas to contiguous and accessible sites according to the
demands of the development in these areas. Furthermore, the Roxas Gargallo Foundation, in
cooperation with the Technical Skills and Development Authority, shall conduct a series of
livelihood and training programs for the benefit of the original CLOA holders/awardees.
GROUP C
For those who belong to Group C, they have to vacate immediately the premises and surrender
possession of the subject properties, without any compensation. However, they shall be allowed to
remove the improvements that they have introduced to the subject landholdings.
Since the afore-quoted proposed compensation and accommodation packages by Roxas & Co. are
not only in accord, but even in excess of what the law requires, it is worthy of approval by this
Court. TcHCDI
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I am not cowed by accusations that my position on the instant Petitions is contrary to social
justice, because it is substantially favors Roxas & Co., the landowners. Article XIII, Section 5 of the
1987 Constitution recognize the right of the landowners, alongside the farmers and farmworkers, in
the implementation of the CARP. It has been declared, furthermore, that 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. 87 As this
Court unhesitatingly declared in Agrarian Reform Beneficiaries Association (ARBA) v. Nicolas: 88
This Court can not sit idly and allow a government instrumentality to trample on the rights of bona
fide landowners in the blind race for what it proclaims as social justice. As Justice Isagani Cruz
succinctly held, social justice is to be afforded to all:
. . . 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 simply because they are 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 eject 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.
IV
ALTERNATIVE SCENARIO
Even given the ruling of the majority that Presidential Proclamation No. 1520 did not convert all
agricultural lands within the Municipality of Nasugbu to non-agricultural uses, I still submit that the
we should not sweepingly grant the Petitions and prayers of KAMAHARI and DAMBA-NFSW in the
Petitions at bar. It must be remembered that particular properties of Roxas & Co. in G.R. No.
149548, No. 179650, and No. 167505 were already determined in appropriate proceedings
before the DAR Secretary, and affirmed by the Court of Appeals, to be exempt from CARP pursuant
to the Nasugbu Municipal Zoning Ordinance No. 4, series of 1982.
Quoting from McQuillin, 89 the Court described zoning in Pampanga Bus Company, Inc. v.
Municipality of Tarlac 90 as follows:
Zoning is governmental regulation of the uses of land and buildings according to districts or zones.
It is comprehensive where it is governed by a single plan for the entire municipality and prevails
throughout the municipality in accordance with that plan. It is partial or limited where it is
applicable only to a certain part of the municipality or to certain uses. Fire limits, height districts
and building regulations are forms of partial or limited zoning or use regulation that are
antecedents of modern comprehensive zoning. (pp. 11-12.) HIDCTA
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The term "zoning," ordinarily used with the connotation of comprehensive or general zoning, refers
to governmental regulation of the use of land and buildings according to districts or zones. This
regulation must and does utilize classification of uses within districts as well as classification of
districts, inasmuch as it manifestly is impossible to deal specifically with each of the innumerable
uses made of land and buildings. Accordingly, zoning has been defined as the confining of certain
classes of buildings and uses to certain localities, areas, districts or zones. It has been stated that
zoning is the regulation by districts of building development and uses of property, and that the term
"zoning" is not only capable of this definition but has acquired a technical and artificial meaning in
accordance therewith. Zoning is the separation of the municipality into districts and the regulation
of buildings and structures within the districts so created, in accordance with their construction,
and nature and extent of their use. It is a dedication of districts delimited to particular uses
designed to subserve the general welfare. Numerous other definitions of zoning more or less in
accordance with these have been given in the cases. (pp. 27-28.)
In Pasong Bayabas Farmers Farmers Association, Inc. v. Court of Appeals, 91 the Court affirmed the
authority of the municipal council to issue a zoning classification and to reclassify a property from
agricultural to residential, as approved by the HSRC (now the HLURB). Section 3 of Republic Act No.
2264, amending the Local Government Code, specifically empowered municipal and/or city
councils, in consultation with the National Planning Commission, to adopt zoning and subdivision
ordinances or regulations.
In its appeals from the grant by the DAR Secretary of the applications for exemptions in DAR
Administrative Cases No. A-9999-142-97 (G.R. No. 149548 and No. 179650) and No. A-9999-00898 (G.R. No. 167505), DAMBA-NSFW was, in effect, questioning the sufficiency of the evidence of
Roxas & Co. Such questions as whether certain items of evidence should be accorded probative
value or weight, or rejected as feeble or spurious, or whether or not the proofs on one side or the
other are clear and convincing and adequate to establish a proposition in issue, are without doubt
questions of fact. Whether or not the body of proofs presented by a party, weighed and analyzed in
relation to contrary evidence submitted by adverse party, may be said to be strong, clear and
convincing; whether or not certain documents presented by one side should be accorded full faith
and credit in the face of protests as to their spurious character by the other side; whether or not
inconsistencies in the body of proofs of a party are of such gravity as to justify refusing to give said
proofs weight all these are issues of fact. Questions like these are not reviewable by this Court
which, as a rule, confines its review of cases decided by the Court of Appeals only to questions of
law raised in the petition and therein distinctly set forth. 92
Well-settled in this jurisdiction is the doctrine that findings of fact of administrative agencies
must be respected as long as they are supported by substantial evidence, even if such evidence is
not overwhelming or preponderant. 93 If supported by substantial evidence, the factual finding of an
administrative body, charged with a specific field of expertise, is conclusive and should not be
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disturbed. 94 Substantial evidence, which is the quantum of evidence required to establish a fact in
cases before administrative or quasi-judicial bodies, is that level of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion. 95 DSEaHT
There is no reason to disturb the findings of the DAR Secretary that the lots subject of the
applications for exemption, in both DAR Administrative Cases No. A-9999-142-97 and No. A-9999008-98, are located within non-agricultural zones under the Nasugbu Municipal Zoning Ordinance
No. 4, series of 1982; the said findings being supported by substantial evidence.
In both DAR Administrative Cases No. A-9999-142-97 and No. A-9999-008-98, Roxas & Co. was able
to submit the documents in support of its applications for exemption, as required in DAR
Administrative Order No. 6, series of 1994, including the certifications from the Deputized Zoning
Administrator and the HLURB. 96 It was on the basis of said documents, together with ocular
inspection reports, that the DAR Secretary based its findings that the lots subject of the two
applications were indeed reclassified for non-agricultural uses 97 by Nasugbu Municipal Zoning
Ordinance No. 4, series of 1982, prior to the effectivity of the CARL on 15 June 1988, thus,
exempting the said properties from CARP coverage.
The Certifications, issued by the appropriate public officers, is prima facie evidence of the facts
therein set out. To overcome the presumption of regularity of performance of official functions in
favor of such Certifications, the evidence against them must be clear and convincing. 98 Belief,
suspicion, and conjectures cannot overcome the presumption of regularity and legality which
attaches to the disputed Certifications. The bare allegations of DAMBA-NFSW that the provisions of
Nasugbu Municipal Zoning Ordinance No. 4, series of 1982, were too vague or inexact to be used as
bases for determining the zoning classification of the lots of Roxas & Co., failed to defeat the
Certifications issued by the Deputized Zoning Administrator and the HLURB who are charged
with the approval, interpretation, and implementation of said zoning ordinance expressly
confirming that the said lots are located in non-agricultural zones. There is also utter lack of basis
for the insistence of DAMBA-NFSW that in addition to Nasugbu Municipal Zoning Ordinance No. 4,
series of 1982, Roxas & Co. should have also submitted a Land Use Plan approved prior to 15 June
1988. The validity and effectivity of the municipal ordinance is not, in any way, dependent on the
existence of a land use plan.
Once more, it should be kept in mind that administrative bodies are given wide latitude in the
evaluation of evidence, including the authority to take judicial notice of facts within their special
competence. Absent any proof to the contrary, the presumption is that official duty has been
regularly performed. Hence, the DAR Secretary is presumed to have performed his duty of studying
the available evidence, prior to the grant of the applications for exemption of Roxas & Co. 99
DAMBA-NFSW is also seeking the nullification of the proceedings in DAR Administrative Cases
No. A-9999-142-97 and No. A-9999-008-98 for lack of notice to DAMBA-NFSW whose members
hold CLOAs over the lots subject of said applications for exemption. DAMBA-NFSW invokes our
ruling in Roxas & Co. v. Court of Appeals, nullifying the acquisition proceedings for lack of proper
notice upon Roxas & Co.
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This argument is without merit.
The decision in Roxas & Co. v. Court of Appeals painstakingly presented the specific provisions in
the CARL; DAR Administrative Order No. 12, series of 1989; DAR Administrative Order No. 9, series
of 1990; DAR Administrative Order No. 1, series of 1993; and the DARAB Revised Rules of
Procedure, which explicitly require the service of notice upon the landowner in both voluntary and
compulsory acquisition proceedings. ISHaTA
Other than a general averment of its right to due process, DAMBA-NFSW was not able to cite a
rule expressly requiring the landowner who is applying for exemption from CARP coverage of his
landholding based on Section 3(c) of the CARL and DAR Administrative Order No. 6, series of 1994,
to give notices of the filing of said application and the subsequent proceedings as regards the same
to the occupants of the subject property.
It bears to point out that at the time Roxas & Co. filed its applications for exemption in DAR
Administrative Cases No. A-9999-142-97 and No. A-9999-008-98 on 29 May 1997 and 29
September 1997, respectively, only DAR Administrative Order No. 6, series of 1994, governed such
applications. 100 Said administrative order does not contain any provision on notices. Rights of
farmers and other occupants of the land subject of the application for exemption could only be
presumed to have been taken into consideration by the DAR officials mandated to conduct a joint
investigation following the filing of the application for exemption. Part IV of DAR Administrative
Order No. 6, series of 1994, prescribes that:
A.

Upon filing of the application, the Regional Office shall conduct a joint investigation with the

duly authorized representatives of the Provincial and Municipal Offices of the DAR that have
jurisdiction over the property. The investigation shall be undertaken and the report prepared
within thirty (30) days from the filing of the completed application. . . .
B.

The joint investigation report shall concentrate on the presence of potential beneficiaries in

the area, the payment of disturbance compensation, the initial activities related to the coverage, and
other pertinent information which may be relevant in the grant or denial of the application for
exemption.
The joint investigation report shall also contain a certification from the MARO on whether or not
the area has been placed under the coverage of Pres. Decree No. 27, or whether Certificates of Land
Transfer or Emancipation Patents have been issued over said property.
xxx

xxx

xxx

Even granting that DAMBA-NFSW should have been given notices of the applications for
exemption of Roxas & Co., the lack thereof does not necessarily mean that DAMBA-NFSW was
deprived of due process that would render the proceedings in DAR Administrative Cases No. A9999-142-97 and No. A-9999-008-98 void. The Court has consistently held that the essence of due
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process is simply the opportunity to be heard or, as applied to administrative proceedings, the
opportunity to explain one's side or the opportunity to seek a reconsideration of the action or
ruling complained of; and any seeming defect in its observance is cured by the filing of a motion for
reconsideration. Denial of due process cannot be successfully invoked by a party who has had the
opportunity to be heard on his motion for reconsideration. 101 DAMBA-NFSW cannot deny that it
was able to file Motions for Reconsideration of the Orders of the DAR Secretary granting the
applications for exemption of Roxas & Co. in DAR Administrative Cases No. A-9999-142-97 and No.
A-9999-008-98, except that both Motions were subsequently denied by the DAR Secretary for lack
of merit. TCacIE
After the DAR Secretary approved the applications for exemption of Roxas & Co., and denied the
Motions for Reconsideration of DAMBA-NFSW in DAR Administrative Cases No. A-9999-142-97 and
No. A-9999-008-98, DAMBA-NFSW then went before the Court of Appeals via Petitions
for Certiorari under Rule 65 of the Rules of Court, the wrong remedy.
In Sebastian v. Morales, 102 the Court provided the following elucidation on the proper remedy from
an order of the DAR Secretary and the consequence for availing one's self of the wrong mode of
appeal:
We agree with the appellate court that petitioners' reliance on Section 54 of R.A. No. 6657 "is not
merely a mistake in the designation of the mode of appeal, but clearly an erroneous appeal from the
assailed Orders." For in relying solely on Section 54, petitioners patently ignored or conveniently
overlooked Section 60 of R.A. No. 6657, the pertinent portion of which provides that:
An appeal from the decision of the Court of Appeals, or from any order, ruling or decision of the
DAR, as the case may be, shall be by a petition for review with the Supreme Court, within a nonextendible period of fifteen (15) days from receipt of a copy of said decision.
Section 60 of R.A. No. 6657 should be read in relation to R.A. No. 7902 expanding the appellate
jurisdiction of the Court of Appeals to include:
Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of
Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissionsexcept
those falling within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the
provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the
fourth paragraph of Section 17 of the Judiciary Act of 1948.21
With the enactment of R.A. No. 7902, this Court issued Circular 1-95 dated May 16, 1995 governing
appeals from all quasi-judicial bodies to the Court of Appeals by petition for review, regardless of
the nature of the question raised. Said circular was incorporated in Rule 43 of the 1997 Rules of
Civil Procedure.

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Section 61 of R.A. No. 665722 clearly mandates that judicial review of DAR orders or decisions are
governed by the Rules of Court. The Rules direct that it is Rule 43 that governs the procedure for
judicial review of decisions, orders, or resolutions of the DAR Secretary. By pursuing a special civil
action for certiorari under Rule 65 rather than the mandatory petition for review under Rule 43,
petitioners opted for the wrong mode of appeal. Pursuant to the fourth paragraph of Supreme Court
Circular No. 2-90, "an appeal taken to the Supreme Court or the Court of Appeals by the wrong or
inappropriate mode shall be dismissed." Therefore, we hold that the Court of Appeals committed no
reversible error in dismissing CA-G.R. SP No. 51288 for failure of petitioners to pursue the proper
mode of appeal. cHESAD
Even when there may be instances when the Court had chosen to relax its procedural rules in the
name of substantive justice, the lack of merit in the opposition of DAMBA-NFSW to the applications
for exemption of Roxas & Co. in DAR Administrative Cases No. A-9999-142-97 and No. A-9999-00898, as discussed in the preceding paragraphs, does not justify the reversal of the dismissal by the
appellate court of the Petitions for Certiorari of DAMBA-NFSW in CA-G.R. SP No. 82225 and CA-G.R.
No. 82226 for being the wrong mode of appeal.
As for G.R. No. 167845 and No. 169163, proceedings have also been held before the PARAD
regarding CLOA No. 6654 (DARAB Cases No. R-401-003-2001 to No. R-401-005-2001 and No. 401239-2001, respectively), which resulted in the partial and complete cancellations of the said
certificates. I accentuate once more that by reason of the special knowledge and expertise of
administrative departments over matters falling under their jurisdiction, they are in a better
position to pass judgment thereon and their findings of fact in that regard are generally accorded
respect, if not finality, by the courts. 103 The Court must also not forget that the 27 May 2001
Decision of the PARAD in DARAB Case No. 401-239-2001 already became final and executory by
failure of DAMBA-NFSW to file an appeal within the reglementary period.
V
MY VOTE
WHEREFORE, premises considered, I concur in some part but dissent for the most part in the
ruling of the majority, and vote as follows:
(1)
In G.R. No. 167540, to DENY the Petition for Review of KAMAHARI and DAMBA-NFSW,
and to AFFIRM the Decision dated 24 November 2003 and Resolution dated 18 March 2005 of the
Court of Appeals in CA-G.R. SP No. 72131, which declared the parcels of land comprising Haciendas
Caylaway, Banilad, and Palico, all in the name of Roxas & Co. and located in Nasugbu, Batangas, to
be exempt from CARP coverage pursuant to Presidential Proclamation No. 1520, making Nasugbu
part of a tourist zone. I vote further to DISMISS the Petitions for Intervention of the Sangguniang
Bayan and the ABC of Nasugbu for failure to prosecute;
(2)
In G.R. No. 167543, to DENY the Motion for Reconsideration of DAR, and toAFFIRM the
Resolution dated 20 June 2005 of this Court denying the Petition for Review of DAR for the latter's
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failure to show that a reversible error had been committed by the Court of Appeals in its Decision
dated 24 November 2003 and Resolution dated 18 March 2005 in CA-G.R. SP No. 72131;
(3)
In G.R. No. 179650 and No. 167505, to DENIED the Petitions for Review of DAMBANFSW for being moot and academic, consistent with my vote in G.R. No. 167540 and No. 167543.
With the exemption from CARP coverage of the entire Hacienda Palico pursuant to Presidential
Proclamation No. 1520, the resolution of the exemption from CARP coverage of smaller lots in the
same Hacienda by virtue of the Nasugbu Municipal Zoning Ordinance No. 4, series of 1982, serves
no practical purpose. TAIaHE
(4)
In G.R. No. 167845, to GRANT the Petition for Review of Roxas & Co. Accordingly, I vote
to REVERSE and SET ASIDE the Decision dated 10 September 2004 and Resolution dated 14 April
2005 of the Court of Appeals in CA-G.R. SP No. 72198; and to REINSTATE the Order dated 19
February 2002 of the PARAD in DARAB Cases No. R-401-003-2001 to No. R-401-005-2001, denying
due course to the Notice of Appeal of DAMBA-NFSW for having been filed beyond the reglementary
period. I further vote toDECLARE AS FINAL AND EXECUTORY, with no appeal having been timely
filed therefrom, the Joint Order dated 21 May 2001 of the PARAD in DARAB Cases No. R-401-0032001 to No. R-401-005-2001, granting the partial cancellation of TCT No. CLOA-6654, insofar as it
covers Lot 125-K with an area of 27.4170 hectares situated at Brgy. Bilaran, Nasugbu, Batangas; Lot
125-L with an area of 36.9796 hectares located in Brgy. Lumbangan, Nasugbu, Batangas, and Lot
125-M with an area of 37.8648 hectares also located in Brgy. Lumbangan, Nasugbu, Batangas,
covered by TCT No. T-60028, No. T-60033 and No. T-60032, respectively;
(5)
In G.R. No. 169163, to DENY the Motion for Reconsideration of DAMBA-NFSW, and
to AFFIRM the Resolution dated 19 October 2005 of this Court denying the Petition for Review of
DAMBA-NFSW, in the absence of reversible error on the part of the Court of Appeals when it
dismissed in its Decision dated 28 February 2005 and Resolution dated 3 August 2005 the Petition
for Certiorari of DAMBA-NFSW in CA-G.R. SP No. 75952. I vote further to DECLARE AS FINAL AND
EXECUTORY, with no appeal having been timely filed therefrom, the 27 May 2001 Decision of the
PARAD in DARAB Case No. 401-239-2001, ordering the cancellation of CLOA No. 6654, insofar as
the remaining 411.7249 hectares are concerned, after the partial cancellation effected in G.R. No.
167845;
(6)
In G.R. No. 149548, to DISMISS for being moot and academic the Petition for Review of
Roxas & Co. seeking an injunction against the installation by the DAR of the farmer-beneficiaries on
Lots No. 21, No. 24, No. 28, No. 31, No. 32 and No. 34, comprising 51.5472 hectares, situated in
Brgys. Cogunan and Lumbangan, Nasugbu, Batangas, until CLOA No. 6654, which covered the said
lots, among other parcels of land, was cancelled. This is pursuant to my vote in G.R. No. 167845 and
No. 169163, already affirming the partial and complete cancellations of CLOA No. 6654; and
7.
To APPROVE the compensation and accommodation packages proposed by Roxas & Co.
for bona fide tenants, shareholders, and leaseholders of Haciendas Caylaway, Banilad, and Palico
(Group A beneficiaries), and for original CLOA holders/awardees who had no previous contractual
relationship with Roxas & Co. but were installed upon the latter's landholdings by DAR (Group B

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beneficiaries); with the corresponding directive to Roxas & Co. to faithfully comply with the said
compensation and accommodation packages. DEAaIS
Footnotes
*

Now the Department of Land Reform.

1.

G.R. No. 127876, 378 Phil. 727 (1999).

2.

Id. at 744-745.

3.
GUIDELINES FOR THE ISSUANCE OF EXEMPTION CLEARANCES BASED ON SECTION 3 (c) OF
RA 6657 AND THE DEPARTMENT OF JUSTICE (DOJ) OPINION NO. 44, SERIES OF 1990.
4.

Rollo (G.R. No. 167540), pp. 1280-1281.

5.

Resolutions of February 22, 2006; October 22, 2006; and February 4, 2009.

6.

Vide Evangelista v. Santiago, G.R. No. 157447, 457 SCRA 744 (2005).

7.

G.R. No. 147479, September 26, 2005, 471 SCRA 74.

8.

Id. at 92.

9.

Supra note 2.

10.

Id. at 783.

11.

Ibid.

12.
CLARIFICATORY GUIDELINES ON THE EFFECT OF DECLARATIONS OF GENERAL AREAS IN
THE COUNTRY AS "TOURIST ZONES" TO THE COVERAGE OF LANDS DEVOTED TO OR SUITABLE
FOR AGRICULTURE WITHIN SAID AREAS UNDER THE [CARP]. Issued on March 29, 2004 by then
Acting Secretary Jose Mari B. Ponce.
13.

Proclamation Nos. 1653, 1801, 2052 and 2067.

14.

Republic Act No. 7916.

15.
SECTION 5. Establishment of ECOZONES. To ensure the viability and geographic dispersal
of ECOZONES through a system of prioritization, the following areas are initially identified as
ECOZONES, subject to the criteria specified in Section 6:
a) So much as may be necessary of that portion of Morong, Hermosa, Dinalupihan, Orani,
Samal, and Abucay in the Province of Bataan;
b) So much as may be necessary of that portion of the municipalities of Ibaan, Rosario,
Taysan, San Jose, San Juan, and cities of Lipa and Batangas;

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c) So much as may be necessary of that portion of the City of Cagayan de Oro in the
Province of Misamis Oriental;
d) So much as may be necessary of that portion of the City of Iligan in the Province of
Lanao del Norte;
e) So much as may be necessary of that portion of the Province of Saranggani;
f)So much as may be necessary of that portion of the City of Laoag in the Province of
Ilocos Norte;
g) So much as may be necessary of that portion of Davao City and Samal Island in the
Province of Ilocos Norte;
h) So much as may be necessary of that portion of Oroquieta City in the Province of
Misamis Occidental;
i) So much as may be necessary of that portion of Tubalan Cove, Malita in the Province of
Davao del Sur;
j) So much as may be necessary of that portion of Baler, Dinalungan and Casiguran
including its territorial waters and islets and its immediate environs in the Province of Aurora;
k) So much as may be necessary of that portion of cities of Naga and Iriga in the Province
of Camarines Sur, Legaspi and Tabaco in the Province of Albay, and Sorsogon in the Province of
Sorsogon;
l) So much as may be necessary of that portion of Bataan Island in the province of
Batanes;
m) So much as may be necessary of that portion of Lapu-lapu in the Island of Mactan, and
the municipalities of Balamban and Pinamungahan and the cities of Cebu and Toledo and the
Province of Cebu, including its territorial waters and islets and its immediate environs;
n) So much as may be necessary of that portion of Tacloban City;
o) So much as may be necessary of that portion of the Municipality of Barugo in the
Province of Leyte;
p) So much as may be necessary of that portion of the Municipality of Buenavista in the
Province of Guimaras;
q) So much as may be necessary of that portion of the municipalities of San Jose de
Buenavista, Hamtic, Sibalom, and Culasi in the Province of Antique;
r) So much as may be necessary of that portion of the municipalities of Catarman, Bobon
and San Jose in the Province of Northern Samar, the Island of Samar;
s) So much as may be necessary of that portion of the Municipality of Ternate and its
immediate environs in the Province of Cavite;
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t) So much as may be necessary of that portion of Polloc, Parang in the Province of
Maguindanao;
u) So much as may be necessary of that portion of the Municipality of Boac in the
Province of Marinduque;
v) So much as may be necessary of that portion of the Municipality of Pitogo in the
Province of Zamboanga del Sur;
w) So much as may be necessary of that portion of Dipolog City-Manukan Corridor in the
Province of Zamboanga del Norte;
x) So much as may be necessary of that portion of Mambajao, Camiguin Province;
y) So much as may be necessary of that portion of Infanta, Real, Polillo, Alabat, Atimonan,
Mauban, Tiaong, Pagbilao, Mulanay, Tagkawayan, and Dingalan Bay in the Province of Quezon;
z) So much as may be necessary of that portion of Butuan City and the Province of
Agusan del Norte, including its territorial waters and islets and its immediate environs;
aa) So much as may be necessary of that portion of Roxas City including its territorial
waters and islets and its immediate environs in the Province of Capiz;
bb) So much as may be necessary of that portion of San Jacinto, San Fabian, Mangaldan,
Lingayen, Sual, Dagupan, Alaminos, Manaoag, Binmaley in the Province of Pangasinan;
cc) So much as may be necessary of that portion of the autonomous region;
dd) So much as may be necessary of that portion of Masinloc, Candelaria and Sta. Cruz in
the Province of Zambales;
ee) So much as may be necessary of that portion of the Palawan Island;
ff) So much as may be necessary of that portion of General Santos City in South Cotabato
and its immediate environs;
gg) So much as may be necessary of that portion of Dumaguete City and Negros Oriental,
including its territorial waters and islets and its immediate environs.
hh) So much as may be necessary of that portion of the Province of Ilocos Sur;
ii) So much as may be necessary of that portion of the Province of La Union;
jj) So much as may be necessary of that portion of the Province of Laguna, including its
territorial waters and its immediate environs;
kk) So much as may be necessary of that portion of the Province of Rizal;
16.
Land Conversion. Agricultural lands may be converted for residential, commercial,
industrial and other non-agricultural purposes, subject to the conditions set forth under Republic
Act. No.. 6657 and other existing laws.
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17.
Tenant Emancipation Decree of 1972.
18.

On September 26, 1972.

19.

On August 3, 2007.

20.
Section 2 (k) of DAR Administrative Order No. 01-99, Revised Rules and Regulations on the
Conversion of Agricultural Lands to Non-Agricultural Uses.
21.

Republic Act No. 9593.

22.

SEC. 61. Development Planning. . . . .

xxx
xxx
xxx
No [Tourism Enterprise Zone] shall be designated without a development plan duly
approved by the [Tourism Infrastructure and Enterprise Zone Authority] and without the approval,
by resolution, of the [local government unit] concerned. Any deviation or modification from the
development plan shall require the prior authorization of the TIEZA. The TIEZA may cause the
suspension of granted incentives and withdrawal of recognition as a TEZ Operator. It may likewise
impose reasonable fines and penalties upon TEZ Operators and responsible persons for any failure
to properly implement the approved development plan.

Lands identified as part of a TEZ shall qualify for exemption from the coverage of
Republic Act No. 7279, otherwise known as the Urban Development and Housing Act of 1992, and
Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law, subject to
rules and regulations to be crafted by the TIEZA, the Housing and Urban Development Coordinating
Council and the Department of Agrarian Reform.

23.
Vide: Pasong Bayabas Farmers Association v. CA, G.R. No. 142359, May 25, 2004; and Junio v.
Garilao, G.R. No. 147146, July 29, 2005.
24.

G.R. No. 168394, October 6, 2008, 567 SCRA 540.

25.

Id. at 553-554.

26.

Then Secretary Horacio R. Morales, Jr.

27.

CA rollo (CA G.R. No. 63146 as part of G.R. No. 149548), pp. 9-11.

28.

Id. (CA G.R. No. 63146 as part of G.R. No. 149548) at 12-17.

29.

Id. (CA G.R. No. 63146 as part of G.R. No. 149548) at 345-347.

30.

Then Secretary Hernani Braganza.

31.

The DAR Secretary ruled that:

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In the case at hand Records show that subject properties were originally registered
under TCT No. T-985. This is shown in the Certification dated 17 June 1998 issued by Alexander
Bonuan, Deputy Register of Deeds II, Registry of Deeds, Nasugbu, Batangas. . . .

CERTIFICATION

xxx
xxx
xxx
This is to certify that Lot No. 125 of Psd-04016141 (OLT) under TCT No. 49946 is a
transfer from TCT-985. Further, it is certified that Lot 125-N Psd-04-046912 under TCT No. 60034
is a transfer from TCT No. T-49946.
xxx
xxx
xxx
In a letter dated 18 July 2000 addressed to Director Ricardo R. San Andres, Head, Center
for Land Use, Policy, Planning and Implementation (CLUPPI)-2 Secretariat, Deputy Register of
Deeds Bonuan clarified that "TCT No. 49946" should read "TCT No. 59946." Attached to said letter
is a certified true copy of TCT No. T-59946. A scrutiny of TCT No. T-59946 shows that it covers a
parcel of land identified as Lot No. 125 of the subdivision plan Psd-04-016144 with an area of
947.8417 hectares situated in Barangays Bilaran, Lumbangan, Cogonan, and Reparo, Nasugbu,
Batangas.
xxx
xxx
xxx.
A scrutiny of TCT Nos. T-60019, T-60020, T-60021, T-60022, T-60023 and T-60034
shows that they are transfers from TCT No. T-59946. Furthermore, a Certification dated 6
September 2001 issued by Dante Ramirez, Deputy Register of Deeds, Nasugbu, Batangas, states that
the mother title of TCT Nos. T-60019, T-60020, T-60021, T-60022, T-60023 and T-60034 is TCT No.
T-985. registered in the name of Roxas Y Cia.
xxx
xxx
xxx.
In the case at hand, the Certification dated 19 September 1996 issued by Reynaldo H.
Garcia, Zoning Administrator of Nasugbu, Batangas states, among others, that Lots Nos. 31, 24, 21,
32, 28 and 34 situated in Barangays Cogunan and Lumbangan, Nasugbu, Batangas, are within the
Industrial Zone . . . . Moreover, a Certification also dated 19 September 1996 issued by Zoning
Administrator Reynaldo H. Garcia states that DAR Lot No. 36 with an area of 0.6273 hectares
situated in Brgy. Lumbanga, Nasugbu, Batangas, is within the industrial zone . . . Moreover, a
Certification dated 7 January 1998 issued by Maria Luisa G. Pangan, under authority of the HLURB
Secretariat, states that Resolution No. 28, Municipal Ordinance No. 4 of the Sangguniang Bayan of
Nasugbu, Batangas, dated 18 April 1982, was approved by the HSRC, now HLURB, under Resolution
No. R-123, Series of 1983, dated 4 May 1983. . . .
32.
Viva Footwear Manufacturing Corp. v. SEC, G.R. No. 163235, April 27, 2007, 522 SCRA 609,
615 citing Quiambao v. CA, G.R. No. 128305, March 28, 2005, 454 SCRA 17, 40.
33.

G.R. No. 147146, July 29, 2005, 465 SCRA 173.

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34.
Id. at 187.
35.

Rollo (G.R. No. 167505), pp. 529-532.

36.

Id. at 533-534.

37.

Id. at 525-526.

38.

Id. at 91-93.

39.

Supra note 1 at 783.

40.

Sublay v. NLRC, 324 SCRA 188 (2000).

41.

Cuevas v. Bais Steel Corporation, G.R. No. 142689, October 17, 2002, 391 SCRA 192.

42.
An Act to Ordain the Agricultural Land Reform Code and to Institute Land Reforms in the
Philippines, including the Abolition of Tenancy and the Channeling of Capital into Industry, Provide
for the Necessary Implementing Agencies, Appropriate Funds therefor and for Other Purposes. As
amended by Republic Act No. 6389.
43.

Section 36 (1) of R.A. No. 3844.

44.

PARAD Barbara P. Tan. In the Decision of May 27, 2001, the PARAD disposed as follows:
WHEREFORE, premises considered, Judgment is hereby rendered:

1. Finding and declaring the issuance of CLOA 6654 not in accordance with the mandate
of Sec. 16, RA 6657 thereby effectively circumventing the implementation of the CARP;
2. Finding CLOA 6654 to be fictitious/null and void having been generated on the basis
of a subdivision survey which was plotted on a survey plan which has already been previously
cancelled, superseded and extinct, accordingly;
3. Ordering the cancellation of CLOA 6654, as prayed for by Petitioner, without
prejudice, however, to the execution of the proper subdivision survey for purposes of delineating
accurately the boundaries of the properties subject of acquisition proceedings for purposes of
determining their coverage under the CARP or their negotiability for conversion and/or exclusion
from the Program.
45.
Penned by Justice Andres B. Reyes, Jr. with the concurrence of Justices Lucas P. Bersamin and
Celia C. Librea-Leagogo.
46.
Penned by Justice Jose L. Sabio, Jr. with the concurrence of Justices Amelita G. Tolentino and
Regalado E. Maambong and the dissent of Justices Ruben T. Reyes (now a retired member of the
Court) and Portia Alio-Hormachuelos.

PUNO, C.J., concurring:

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1.
Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, G.R.
No. 78742, July 14, 1989, 175 SCRA 343, 373-374.
2.

Id. at 376.

3.

Id. at 386.

4.

Republic Act No. 6657 (1988), Sec. 2.

5.

Sec. 3 (c).

6.
Luz Farms v. Secretary of Department of Agrarian Reform, G.R. No. 86889, December 4, 1990,
192 SCRA 51, 57 citing III Record, Constitutional Commission 30 (August 7, 1986); See alsoNatalia
Realty Inc. v. Department of Agrarian Reform, G.R. No. 103302, August 12, 1993, 225 SCRA 278, 283.
7.

This section provides:

SECTION 10. Exemptions and Exclusions. Lands actually, directly and exclusively used and
found to be necessary for parks, wildlife, forest reserves, reforestation, fish sanctuaries and
breeding grounds, watersheds, and mangroves, national defense, school sites and campuses
including experimental farm stations operated by public or private schools for educational
purposes, seeds and seedlings research and pilot production centers, church sites and convents
appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial
grounds and cemeteries, penal colonies and penal farms actually worked by the inmates,
government and private research and quarantine centers and all lands with eighteen percent (18%)
slope and over, except those already developed shall be exempt from the coverage of the Act.
8.

Natalia Realty, Inc. v. Department of Agrarian Reform, supra note 6.

9.
Department of Agrarian Reform v. Sutton, G.R. No. 162070, October 19, 2005, 473 SCRA 392,
401.
10.

G.R. No. 142359, May 25, 2004, 429 SCRA 109, 135.

11.

Id.

12.

Id. at 132.

13.

Id. at 133.

14.

G.R. No. 147146, July 29, 2005, 465 SCRA 173, 186.

15.

G.R. No. 168394, October 6, 2008, 567 SCRA 540, 553-554.

16.

Id.

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17.
Natalia Realty, Inc. v. Department of Agrarian Reform, supra note 6, at 282.
18.

G.R. No. 106593, November 16, 1999, 318 SCRA 22, 29.

19.

G.R. No. 147479, September 26, 2005, 471 SCRA 74.

20.

The pertinent portion of Proclamation No. 2052 (January 30, 1981) is quoted below:

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of

the powers vested in me by the Constitution, do hereby declare the areas comprising the
Barangays of Sibugay, Malubog, Babag and Sirao including the proposed Lusaran Dam in the
City of Cebu and the municipalities of Argao and Dalaguete in the Province of Cebu as tourist
zones under the administration and control of the Philippine Tourism Authority pursuant to
Section 5 (d) of Presidential Decree 564.

The PTA shall identify well-defined geographic areas within the zones 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 reservations existing within the zones shall be excluded
from this proclamation. (Emphasis supplied)
21.

The pertinent portion of Proclamation No. 1520 (November 28, 1975) is quoted below:

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of

the powers vested in me by the Constitution, do hereby declare the area comprising the
Municipalities of Maragondon and Ternate in Cavite Province and Nasugbu in Batangas
Province as a tourist zone under the administration and control of the Philippine Tourism
Authority (PTA) pursuant to Section 5 (D) of P.D. 564.

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. (Emphasis supplied)
22.

Department of Agrarian Reform v. Franco, supra note 19, at 92.

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23.
Id. at 85.
24.

Villanueva, Jr. v. Court of Appeals, G.R. No. 142947, March 19, 2002, 379 SCRA 463, 469-470.

25.

Department of Agrarian Reform v. Franco, supra note 19.

26.

Daong v. Municipal Judge, No. L-34568, March 28, 1988, 159 SCRA 369.

27.
C & C Commercial Corporation v. National Waterworks and Sewerage Authority, G.R. No. L27275, November 18, 1967, 21 SCRA 984, 992.
28.
Asturias Sugar Central, Inc. v. Commissioner of Customs, No. L-19337, September 30, 1969, 29
SCRA 617, 627.
29.

Id. at 628.

CHICO-NAZARIO, J., dissenting and concurring:

1.
Subject: Guidelines for the Issuance of Exemption Clearances based on Section 3 (c) of
Republic Act No. 6657 and the Department of Justice (DOJ) Opinion No. 44, Series of 1990.
2.
A special task force of the DAR which conducts the field investigation and dialogues with the
applicants and the farmer beneficiaries to ascertain the information necessary for the processing of
an application for conversion of land. The Chairman of the CLUPPI deliberates on the merits of the
investigation report and recommends the appropriate action. This recommendation is transmitted
to the Regional Director, thru the Undersecretary, or Secretary of the DAR.
3.

Rollo (G.R. No. 167540), p. 383.

4.
Penned by Associate Justice Jose L. Sabio, Jr. with Associate Justices Amelita G. Tolentino and
Regalado E. Maambong, concurring; and Associate Justices Ruben T. Reyes and Portia AlioHormachuelos, dissenting. Rollo (G.R. No. 167540), pp. 58-68.
5.

Id. at 64-65.

6.

G.R. No. 103302, 12 August 1993, 225 SCRA 278.

7.

376 Phil. 147 (1999).

8.

Id. at 66.

9.

Id. at 67.

10.
Penned by Associate Justice Jose L. Sabio, Jr. with Associate Justices Amelita G. Tolentino and
Regalado E. Maambong, concurring; and Associate Justices Ruben T. Reyes and Portia AlioHormachuelos, dissenting. Id. at 136-138.
11.
Revising the Chapter of the Philippine Tourism Authority Created under Presidential Decree
No. 189, dated May 11, 1973.
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12.
Initially, CLOA No. 6654 was issued to only 153 regular sugar farms workers at Hacienda
Palico; but pursuant to the Decision dated 3 August 1994 of Provincial Agrarian Reform Adjudicator
(PARAD) Antonio Cabili, 49 more farmer workers were added.
13.

Rollo (G.R. No. 149548), pp. 95-96.

14.

Id. at 96-97.

15.

The details of which will be subsequently presented herein under G.R. No. 167845.

16.

Rollo (G.R. No. 149548), pp. 101-102.

17.
Penned by Associate Justice Ma. Alicia Austria-Martinez with Associate Justices Hilarion L.
Aquino and Jose L. Sabio, Jr., concurring. Id. at 54-62.
18.

Id. at 59.

19.

Id. at 59-60.

20.

Id. at 61.

21.

Id.

22.

Id. at 66.

23.

Id. at 32.

24.

Id. at 47.

25.

Rollo (G.R. No. 179650), pp. 125-127.

26.

Id. at 128-129.

27.

Id. at 130.

28.

Id. at 130-131.

29.
Penned by Associate Justce Portia Alino-Hormachuelos with Associate Justices Amelita G.
Tolentino and Arcangelita Romilla-Lontok, concurring. Id. at 399-413.
30.

Id. at 29-30.

31.

Rollo (G.R. No. 167505), pp. 155-157.

32.

Id. at 158.

33.
Penned by Associate Justice Vicente S.E. Veloso with Associate Justices Roberto A. Barrios
and Amelita G. Tolentino, concurring. Id. at 67-90.
34.
Penned by Associate Justice Arturo B. Buena with Associate Justices Angelina S. Gutierrez
and Conrado M. Vasquez, Jr., concurring. Rollo (G.R. No. 167845), pp. 60-80.
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35.
Id. at 80.
36.
Subsequent events concerning CA-G.R. SP No. 63146 were already recounted in the factual
background of G.R. No. 149548 and No. 179650.
37.

Id. at 103-105.

38.

Id. at 105.

39.

Id. at 107.

40.

Id. at 108.

41.

Id. at 109.

42.
The circumstances pertaining to DARAB Case No. 401-239-2001 are presented in more detail
under G.R. No. 169163.
43.

Id. at 131-132.

44.

Id. at 133.

45.

Id. at 166-168.

46.
Penned by Associate Justice Rosmari D. Carandang with Associate Justices Andres B. Reyes
and Monina Arevalo-Zenarosa, concurring.
47.

Id. at 51.

48.

Id. at 53.

49.

Note from the Publisher: Footnote text not found in the official copy.

50.
Penned by Associate Justice Andres B. Reyes, Jr. with Associate Justices Lucas P. Bersamin
and Celia C. Librea-Leagogo, concurring.
51.
Agriculture, agricultural exercise, or agricultural activity is defined, in turn, by Section 3 (b)
of the CARL as 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.
52.
Section 5 (l) of Executive Order No. 129-A, "Modifying Executive Order No. 129 Reorganizing
and Strengthening the Department of Agrarian Reform and for Other Purposes."
53.
Rules of procedure governing the processing and approval of applications for land use
conversion were laid down by DAR Administrative Order No. 2, series of 1990.
54.
The enacting clause is that part of a statute which states the authority by which it is enacted.
(Ruben E. Agpalo, STATUTORY CONSTRUCTION [5th edition, 2003], p. 14)

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55.
Security Bank and Trust Company v. Regional Trial Court of Makati, Branch 61, G.R. No.
113926, 23 October 1996, citing Quijano v. Development Bank of the Philippines, G.R. No. L-26419,
16 October 1970.
56.
Ruben E. Agpalo, STATUTORY CONSTRUCTION [5th edition, 2003], p. 80, citing People v.
Garcia, 85 Phil. 663 (1950).
57.

See Kuwait Airways Corporation v. Philippine Airlines, Inc., G.R. No. 156087, 8 May 2009.

58.

Spouses Tibay v. Court of Appeals, G.R. No. 119655, 24 May 1996.

59.

Supra note 4.

60.

Supra note 5.

61.

Alarcon v. Court of Appeals, G.R. No. 152085, 8 July 2003.

62.

G.R. No. 147479, 26 September 2005, 471 SCRA 74.

63.

Delta Motors Corporation v. Court of Appeals, G.R. No. 121075, 24 July 1997.

64.
Associate Justice Consuelo Ynares-Santiago, in her concurring and dissenting opinion
inRoxas & Co. v. Court of Appeals (G.R. No. 127876, 17 December 1999), quoted the following
findings made by former DAR Secretary, Benjamin T. Leong, in his DAR Order dated 22 January
1991, as regards the state of the GDFI property:
1. Is, as contended by the petitioner GDFI "hilly, mountainous, and characterized by poor
soil condition and nomadic method of cultivation, hence not suitable to agriculture."
2. Has as contiguous properties two haciendas of Roxas y Cia and found by Agrarian
Reform Team Leader Benito Viray to be "generally rolling, hilly and mountainous and
strudded (sic)with long and narrow ridges and deep gorges. Ravines are steep grade ending in low
dry creeks."
3. Is found in an area where "it is quite difficult to provide statistics on rice and corn
yields because there are no permanent sites planted. Cultivation is by Kaingin Method."
4. Is contiguous to Roxas Properties in the same area where "the people entered the
property surreptitiously and were difficult to stop because of the wide area of the two haciendas
and that the principal crop of the area is sugar . . . ."
65.

Padua v. Ranada, G.R. No. 141949, 14 October 2002.

66.
PCI Leasing and Finance, Inc. v. UCPB General Insurance Company, Inc., G.R. No. 162267, 4 July
2008.
67.

Section 4 of the CARL describes the scope of said law:

Section 4. Scope. The Comprehensive Agrarian Reform Law of 1988 shall cover,
regardless of tenurial arrangement and commodity produced, all public and private agricultural

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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 specific limits as determined by Congress
in the preceding paragraph;
(c) All other lands owned by the Government devoted to or 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.
68.

Delgado v. Court of Appeals, G.R. No. 137881, 19 August 2005.

69.

G.R. No. 111387, 8 June 2004.

70.
In Secretary of Agrarian Reform v. Tropical Homes, Inc. (G.R. No. 136827, 31 July 2001), the
Court held that:
Not having perfected their appeal in the manner and within the period fixed by law, the
decision of the Court of Appeals had become final and executory. Such a failure carries with it the
result that no court can exercise appellate jurisdiction to review the case. However, it is true that
we have recognized certain exceptions to this rule. In Ramos v. Bagasao, we excused the delay of
four (4) days in the filing of a notice of appeal because the questioned decision of the trial court was
served upon appellant at a time when her counsel of record was already dead. Her new counsel
could only file the appeal four (4) days after the prescribed reglementary period was over.
In Republic v. Court of Appeals, 24 we allowed the perfection of an appeal by the Republic despite
the delay of six (6) days to prevent a gross miscarriage of justice since it stood to lose hundreds of
hectares of land already titled in its name and had since then been devoted for educational
purposes. In Olacao v. National Labor Relations Commission, we accepted a tardy appeal considering
that the subject matter in issue had theretofore been judicially settled, with finality, in another case.
The dismissal of the appeal would have had the effect of the appellant being ordered twice to make
the same reparation to the appellee. . . .
71.

Ditching v. Court of Appeals, G.R. No. 109834, 18 October 1996.

72.

Mayon Estate Corporation v. Altura, G.R. No. 134462, 18 October 2004, 440 SCRA 377.

73.

Huerta Alba Resort, Inc. v. Court of Appeals, 394 Phil. 22 (2000).

74.

Ginete, et al. v. Court of Appeals, 357 Phil. 36 (1998).

75.

Mayon Estate Corporation v. Altura, supra note 1.

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76.
Legarda v. Court of Appeals, 345 Phil. 890 (1997).
77.

DAR Administrative Order No. 6, series of 2000.

78.
Under Section 3 (d) of the CARL, "agrarian dispute" includes "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."
79.

Philippine Veterans Bank v. Court of Appeals, G.R. No. 132561, 30 June 2005.

80.

See Remman Enterprises, Inc. v. Court of Appeals, G.R. No. 132073, 27 September 2006.

81.
Ruben E. Agpalo, STATUTORY CONSTRUCTION (5th edition, 2003), p. 125; citing Rizal
Commercial Banking Corp. v. Intermediate Appellate Court, 116 SCAD 999, 320 SCRA 279 (1999)
and Director of Lands v. Abaya, 63 Phil. 559 (1936).
82.
An Act to Ordain the Agricultural Land Reform Code and to Institute Land Reforms in the
Philippines, including the Abolition of Tenancy and the Channeling of Capital into Industry, Provide
for the Necessary Implementing Agencies, Appropriate Funds Therefor and for Other Purposes.
83.
An Act Amending Republic Act Numbered Thirty-Eight Hundred and Forty-Four, as
Amended, Otherwise Known as the Agricultural Land Reform Code, and for Other Purposes.
84.

G.R. Nos. 148404-05, 11 April 2002.

85.
The requisites for a valid agricultural leasehold relationship are: (1) The parties are the
landowner and the tenant or agricultural lessee; (2) The subject matter of the relationship is
agricultural land; (3) There is consent between the parties to the relationship; (4) the purpose of
the 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. (Ibid.)
86.

G.R. No. 152085, 8 July 2003.

87.

Landbank v. Court of Appeals, G.R. No. 118712, 6 October 1995.

88.

G.R. No. 168394, 6 October 2008,

89.

Treaties on Municipal Corporations, Volume 8, 3rd ed.

90.

G.R. No. L-15759, 30 December 1961.

91.

G.R. No. 142359, 25 May 2004.

92.

Paterno v. Paterno, G.R. No. 63680, 23 March 1990.

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93.
Lumiqued v. Exevea, G.R. No. 117565, 18 November 1997.
94.
National Power Corporation v. Philippine Electric Plant Owners Association (PEPOA), Inc., G.R.
No. 159457, 7 April 2006.
95.

Rule 134, Section 5 of the Rules of Court.

96.
According to III (B) of DAR Administrative Order No. 6, series of 1994, the application for
exemption should be duly signed by the landowner or his representative, and should be
accompanied by the following documents:
1. Duly notarized Special Power of Attorney, if the applicant is not the landowner
himself;
2. Certified true copies of the titles which is the subject of the application;
3. Current tax declaration(s) covering the property;
4. Location Map or Vicinity Map;
5. Certification from the Deputized Zoning Administrator that the land has been
reclassified to residential, industrial or commercial use prior to June 15, 1988;
6. Certification from the HLURB that the pertinent zoning ordinance has been approved
by the Board prior to June 15, 1988;
7. Certification from the National Irrigation Administration that the land is not covered
by Administrative Order No. 20, s. 1992, i.e., that the area is not irrigated, nor scheduled for
irrigation rehabilitation nor irrigable with firm funding commitment;
8. Proof of payment of disturbance compensation, if the area is presently being occupied
by farmers, or waiver/undertaking by the occupants that they will vacate the area whenever
required.
97.
The six (eventually increase to seven) lots in DAR Administrative Case No. A-9999-142-97
were within the industrial zone, while the nine lots in DAR Administrative Case No. A-9999-008-98
were within settlement clusters outside the Poblacion.
98.
See Spouses Madrigal v. Court of Appeals, G.R. No. 129955, 26 November 1999; andLercana v.
Jalandoni, G.R. No. 132286, 1 February 2002.
99.
National Power Corporation v. Philippine Electric Plant Owners Association (PEPOA), Inc., G.R.
No. 159457, 7 April 2006.
100. On 30 August 2000, the DAR issued DAR Administrative Order No. 6, series of 2000, which
lays down the Rules of Procedure for Agrarian Law Implementation (ALI) Cases. According to
Section 2 (g) thereof, the rules govern application for exemption pursuant to DOJ Opinion No. 44,
series of 1990, as implemented by DAR Administrative Order No. 6, series of 1994. Section 16 (h) of
DAR Administrative Rule No. 6, series of 2000, on Investigation Procedure, now requires the
issuance of notice in the following manner:
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(h) Issuance of Notice. The MARO or investigating officer shall issue a notice of
summary investigation to the parties concerned within ten (10) days from termination of
mediation/conciliation (if unsuccessful) or from receipt of application, protest or petition. The
notice shall be sent by personal delivery with proof of service or by registered mail with return
card.
101.

Samalio v. Court of Appeals, G.R. No. 140079, 31 March 2005.

102.

G.R. No. 141116, 17 February 2003.

103.

Palele v. Court of Appeals, G.R. No. 138289, 31 July 2001.

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#12 G.R. NO. 127198

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.

Augusto Aquino and Miguel Gonzales Norberto Martinez & Emmanuel Torres for petitioner.
Jose T. Bartolome and Pimentel Yusingco Pimentel and Garcia Law Offices for private respondents.

SYLLABUS

1.
REMEDIAL LAW; CIVIL PROCEDURE; RELIEF FROM JUDGMENT; GROUNDS;
EXCUSABLE NEGLIGENCE; NOT PRESENT IN CASE AT BAR. Under Section 1, Rule 38 of
the 1997 Rules of Civil Procedure, 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.
Measured against this standard, the reason proffered by Land Bank's 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. 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."
2.
ID.; ID.; MOTION FOR RECONSIDERATION; NOTICE OF HEARING; ABSENCE THEREOF
RENDERS MOTION A MERE SCRAP OF PAPER. 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.
The trial court therefore correctly considered the motion for reconsideration pro forma.
Thus, it cannot be faulted for denying Land Bank's motion for reconsideration and petition
for relief from judgment.
3.
ID.; PROCEDURAL RULES; LIBERAL INTERPRETATION ONLY IN MERITORIOUS CASES.
It should be emphasized at this point that procedural rules are designed to facilitate the
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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.
4.
ID.; TRIAL COURTS; JURISDICTION; INCLUDES DETERMINATION OF JUST
COMPENSATION IN TAKING OF LAND UNDER AGRARIAN REFORM. 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. Thus, the trial court did not err in taking cognizance of
the case as the determination of just compensation is a function addressed to the courts of
justice.
5.
LABOR AND SOCIAL LEGISLATION; AGRARIAN REFORM PROGRAM; JUST
COMPENSATION IN TAKING OF LAND; COMPUTATION MUST BE AT THE TIME OF TAKING.
Land Bank's 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.
6.
ID.; ID.; RA 6657; DETERMINATION OF JUST COMPENSATION; APPLIED IN CASE AT
BAR. 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 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 inParis v. Alfeche. 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
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its valuation. It would certainly be inequitable to determine just compensation based on the
guideline provided by PD 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.

DECISION

TINGA, J p:
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 State's 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 Attorney's 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

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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. CDTHSI
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 Bank's 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
DAR's 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 Bank's 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 Bank's
failure to include a notice of hearing in its motion for reconsideration due merely to counsel's heavy
workload, which resulted in the motion being declared pro forma, does not constitute excusable
negligence, especially in light of the admission of Land Bank's 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 counsel's 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
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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 proffered by Land Bank's 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. DaIACS
Indeed, counsel's 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 Bank's 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 DAR's
valuation instead of filing a petition to fix just compensation with the trial court.
The records reveal that Land Bank's 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
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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 DAR's 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 Bank's 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, 21we 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

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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 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. 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,
assessor's 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. DHSACT
SO ORDERED.
Puno, Austria-Martinez, Callejo, Sr. and Chico-Nazario, JJ., concur.
Footnotes
1.

Rollo, pp. 3-24.

2.

Id. at 66-74.

3.

Regional Trial Court, San Fernando, Pampanga, Branch 48.

4.

Rollo, p. 74.

5.

Id. at 92-94.

6.

Id. at 99-102.

7.
Id. at 103-112, Affidavits of Solomon B. Garcia, Clerk III of petitioner LBP, and of Alfredo B.
Pandico, Jr.
8.

Id. at 105, Affidavit of Alfredo B. Pandico, Jr.

9.

Id. at 118-119.

10.

Id. at 128-134.

11.

Id. at 139-146.

12.

Id. at 172-173.

13.

Id. at 178-192, 194-207.

14.

Gold Line Transit, Inc. v. Ramos, 415 Phil. 492 (2001).

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15.
Supra note 8.
16.

Norris v. Parentela, Jr., 446 Phil. 462 (2003).

17.

Id. at 354.

18.
Rollo, pp. 38-39, Letter dated January 15, 1993 addressed to then DAR Secretary Ernesto
Garilao.
19.

379 Phil. 141, 147 (2000).

20.

Id. at 148. See also EPZA v. Dulay, No. L-59603, April 29, 1987, 149 SCRA 305.

21..

413 Phil. 711 (2001).

22.

Comprehensive Agrarian Reform Law of 1988.

23.

416 Phil. 473 (2001), citing Land Bank of the Philippines v. Court of Appeals, 321 SCRA 629.

24.
Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, G.R.
No. 78742, July 14, 1989, 175 SCRA 343.

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#13 G.R. NO. 118712

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.

Gonzales, Aquino & Associates for petitioner Land Bank of the Philippines.
Fernando A. Santiago for private respondents.
The Solicitor General for respondents.

SYLLABUS

1.
LABOR AND SOCIAL LEGISLATION; COMPREHENSIVE AGRARIAN REFORM LAW;
LAND ACQUISITION; SECTION 16(e) THEREOF CONSTRUED. Section 16(c) of RA 6657
provides as follows: "Sec. 16. Procedure for Acquisition of Private Lands . . . (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 bondsin 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. . . ." 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

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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."
2.
ID.; ID.; ID.; RULE IN CASE THERE IS A DISCREPANCY BETWEEN THE BASIC LAW AND
AN IMPLEMENTING RULE OR REGULATION; APPLICATION IN CASE AT BAR. 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. 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, 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. 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.
3.
ID.; ID.; ID.; FAIR AND IMMEDIATE COMPENSATION MANDATED. 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 of purposes of exercising the landowner's right to appropriate the same.
The immediate effect in both situations is the same, the landowner is deprived of the use and
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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."

DECISION

FRANCISCO, J p:
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: cdtai
"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
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following petitioners the following amounts in cash and in government financial instruments
within the parameters of Sec. 18 (1) of RA 6657: cdt
P1,455,207.31 Pedro L. Yap
P135,482.12 Heirs of Emiliano Santiago
P15,914,127.77 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."

Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995, 5denying 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 is issued in lieu thereof TC-563 and TC-562, respectively, in the names of listed
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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 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
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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)."

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 ofAssociation 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.

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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:
"SECTION 16.
(e)

Procedure for Acquisition of Private Lands. . . .

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.
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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. cdtai
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) aisadc

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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: cdta
". . . 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
WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for
lack of merit and the appealed decision is AFFIRMED in toto.

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SO ORDERED.
Regalado, Puno and Mendoza, JJ ., concur.
Narvasa, C .J ., is on leave.
Footnotes
1.

Gelos v. Court of Appeals, 208 SCRA 608. 615 (1992), quoting Justice Alicia Sempio-Diy.

2.

Ibid, p. 616.

3.

Rollo, p. 7.

4.

Rollo, pp. 122-123.

5.

Rollo, p. 149.

6.

which provides formulas for valuation of land expropriated under RA 6657.

7.
which provide for the opening of trust accounts in the Land Bank instead of depositing in
accessible bank, in cash and bonds, the compensation for land expropriated by the DAR.
8.

Rollo, pp. 109-111. cdt

9.
Sec. 16.
Procedure for Acquisition of Private Lands. For the purposes of acquisition of
private lands, the following shall be followed:
xxx

xxx

xxx

(e)
Upon receipt by the landowner of the corresponding payment or, in case rejection
or no response from the landowner, upon the deposit with an accessible bank designated by the
DAR of the compensation in cash 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 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.
10.

Rollo, p. 111.

11.
Sec. 49. Rules and Regulations. The PARC and the DAR shall have the power to issue rules
and regulations, whether substantive or procedural, to carry out the objects and purposes of this
Act . . . Said rules shall take effect ten (10) days after the publication in two (2) national newspapers
of general circulation.
12.

Rollo, pp. 111-112.

13.

Rollo, p. 112.

14.

Rollo, p. 107.

15.

Rollo, p. 149.

16.

Rollo, p. 63.
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17.
Rollo. p. 67.
18.

Peralta vs. Civil Service Commission 212 SCRA 425, 432 (1992).

19.
Toledo vs. Civil Service Commission 202 SCRA 507, 54 (1991) citing Teoxon v. Members of
the Board of Administrators, Philippine Veterans Administration, 33 SCRA 585, 589 (1970), citing
Santos vs. Estenzo, 109 Phil. 419 (1960); Animos vs. Phil. Veterans Affairs Office, 174 SCRA 214,
223-224.
20.

Shell Philippines, Inc. vs. Central Bank of the Philippines, 162 SCRA 628 (1988). cdtai

21.
Section 18. Valuation and Mode of Compensation. The LBP shall compensate the
landowner in such amount as may be agreed upon by the landowner and the DAR and LBP in
accordance with the criteria provided for in Sections 16 and 17 and other pertinent provisions
hereof, or as may be finally determined by the court as the compensation for the land.
22.

175 SCRA 343.

23.

Decision, Court of Appeals, p. 14.

24.
Municipality of Makati vs. Court of Appeals, 190 SCRA 207, 213 (1990) citing Cosculluela vs.
The Hon. Court of Appeals, 164 SCRA 393 400 (1988); Provincial Government of Sorsogon vs. Vda.
de Villaroya, 153 SCRA 291, 302 (1987).
25.

175 SCRA 343, 392.

26.

Mata vs. Court of Appeals, 207 SCRA 748, 753 (1992).

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#14 G.R. NO. 170220

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
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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
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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]

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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:
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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]

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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
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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 tenantfarmer 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
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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:

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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 isREVERSED 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.

CONSUELO YNARES-SANTIAGO
Associate Justice

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WE CONCUR:

ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson

MA. ALICIA AUSTRIA-MARTINEZ ROMEO J. CALLEJO, SR.

Associate Justice Associate Justice

MINITA V. CHICO-NAZARIO
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in
the above Decision were reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

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ARTEMIO V. PANGANIBAN
Chief Justice

[1]

Rollo, pp. 30-35. Penned by Associate Justice Rosmari D. Carandang and concurred in by Associate
Justices Godardo A. Jacinto and Elvi John S. Asuncion.
[2]
CA rollo, p. 157.
[3]
Id. at 65-88.
[4] DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF THE SOIL,
TRANSFERRING TO THEM THE OWNERSHIP OF THE LAND THEY TILL AND PROVIDING THE
INSTRUMENTS AND MECHANISM THEREFOR.
[5] DECLARING FULL LAND OWNERSHIP TO QUALIFIED FARMER BENEFICIARIES COVERED BY
PRESIDENTIAL DECREE NO. 27: DETERMINING THE VALUE OF REMAINING UNVALUED RICE
AND CORN LANDSSUBJECT TO P.D. NO. 27; AND PROVIDING FOR THE MANNER OF PAYMENT BY
THE FARMER BENEFICIARY AND MODE OF COMPENSATION TO THE LANDOWNER.
[6]
CA rollo, pp. 89-95.
[7]
Id. at 96-118.
[8]
Id. at 119-133.
[9]
Comprehensive Agrarian Reform Law of 1988.
[10]
CA rollo, pp. 51-54. Penned by Judge Ernesto P. Pagayatan.
[11]
Id. at 53-54.
[12]
Id. at 55-62.
[13]
Id. at 63-64.
[14]
Id. at 2-50.
[15]
Id. at 220-222.
[16]
Id. at 355-356.
[17]
Id. at 481-491.
[18]
Id. at 490-491.
[19]
Id. at 514-518.
[20]
Rollo, p. 34.
[21]
G.R. No. 148223, November 25, 2004, 444 SCRA 176.
[22]
Rollo, p. 18.
[23]
Id. at 22.
[24]
G.R. No. 127198, May 16, 2005, 458 SCRA 441, 451.
[25]
413 Phil. 711 (2001).
[26]
G.R. No. 149621, May 5, 2006, SC E-Library.
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[27]
Id.
[28]
Roxas & Co., Inc. v. Court of Appeals, 378 Phil. 727, 755 (1999).
[29]
G.R. Nos. 78742, 79310, 79744 & 79777, July 14, 1989, 175 SCRA 343, 390-391.
[30]
Land Bank of the Philippines v. Natividad, supra note 24 at 451-452; Paris v. Alfeche, 416 Phil. 473,
488 (2001); Land Bank of the Philippines v. Court of Appeals, 378 Phil. 1248, 1260-1261.
[31]
Id. at 1261.
[32]
Republic Act No. 6657 (1988), Sec. 17.
[33]
G.R. No. 164876, January 23, 2006, 479 SCRA 495, 508-509.
[34]
Land Bank of the Philippines v. Natividad, supra note 24 at 452, citing Association of Small
Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, supra note 29.

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#15 G.R. NO. 159674

FIRST DIVISION

[G.R. No. 159674. June 30, 2006.]

SAMUEL ESTRIBILLO, CALIXTO P. ABAYATO, JR., RONGIE D. AGUILAR, TACIANA D. AGUILAR,

ARTEMIO G. DE JUAN, ESTANISLAO DELA CRUZ, SR., EDGAR DUENAS, MARIO ERIBAL,
REYNALDO C. ESENCIA, EMMA GONZAGA, RUBEN A. IBOJO, SAMUEL JAMANDRE, HILARION V.
LANTIZA, ANSELMO LOPEZ, TERESITA NACION, CHARIE E. NASTOR, NELSON L. NULLAS,
CARLITO S. OLIA, ANA PATIO, ROBERTO T. PATIO, ANTONIO P. ROCHA, FERNANDO C.
RUFINO, PATERNO P. SAIN, CLAUDIO S. SAYSON, and JOEMARIE VIBO, petitioners, vs.
DEPARTMENT OF AGRARIAN REFORM and HACIENDA MARIA, INC., respondents.

DECISION

CHICO-NAZARIO, J p:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking the
review and reversal of the Resolutions 1 of the Court of Appeals dated 27 January 2003 and 28
August 2003, respectively.
The factual and procedural antecedents are as follows:
The petitioners, with the exception of two, are the recipients of Emancipation Patents (EPs)
over parcels of land located at Barangay Angas, Sta. Josefa, Agusan del Sur, with their respective
Transfer Certificate of Title (TCT) and EP numbers presented below:
Petitioners

TCT/EP

Nos.

Areas
(has.)

1.
SAMUEL
ESTRIBILLO
037675
1.7833
2.
CALIXTO P. ABAYATO, JR.
3.
RONGIE D. AGUILAR
4.
TACIANA D. AGUILAR
5.
ARTEMIO G. DE JUAN
6.
ESTANISLAO
DELA
035676
3.1437

TCT

T-287/EP

TCT No. T-297/EP No. A-037814

TCT No. T-829/EP No. A-027293
TCT No. T-913/EP No. A-027295
TCT No. T-944/EP No. A-027296
TCT No. T-302/EP No. A-037809
CRUZ,
SR. TCT
No.
T-290/EP
298

MAS

No.

No.

A-

2.0000
0.1565
3.1441
4.2405
3.3082
No.
A-

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7.
EDGAR DUENAS
TCT No. T-949/EP No. A-037658
4.0128
8.
MARIO P. ERIBAL
TCT No. T-952/EP No. A-037836
2.3087
9.
REYNALDO C. ESENCIA
TCT No. T-950/EP No. A-037844
2.0950
10.
RUBEN A. IBOJO
TCT No. T-928/EP No. A-037873
1.5737
11.
SAMUEL
JAMANDRE
TCT
No.
T-909/EP
No.
A159348
2.2670
12.
HILARION
V.
LANTIZA
TCT
No.
T-288/EP
No.
A037674
4.5526
TCT No. T-401/EP No. A-037825
0.4579
13.
ANSELMO LOPEZ
TCT No. T-973/EP No. A-037840
4.4939
14.
TERESITA
NACION
TCT
No.
T-900/EP
No.
A037849
2.2140
15.
CHARIE
E.
NASTOR
TCT
No.
T-825/EP
No.
A037829
3.9291
16.
NELSON L. NULLAS
TCT No. T-396/EP No. A-037826
2.7491
17.
CARLITO S. OLIA
TCT No. T-910/EP No. A-037673
1.7954
18.
ROBERTO
T.
PATIO
TCT
No.
T-912/EP
No.
A037860
6.4266
19.
ANTONIO P. ROCHA
TCT No. T-914/EP No. A-037830
2.2143
20.
FERNANDO
C.
RUFINO
TCT
No.
T-923/EP
No.
A037848
4.5322
21.
PATERNO
P.
SAIN
TCT
No.
T-954/EP
No.
A037813
4.3223
22.
CLAUDIO
S.
SAYSON,
and
TCT
No.
T-891/EP
No.
A037880
3.7151
23.
JOEMARIE
VIBO
TCT
No.
T-893/EP
No.
A2
037827
1.3185
he two other petitioners, Emma Gonzaga and Ana Patio, are the surviving spouses of deceased
recipients of EPs over parcels of land also located at Barangay Angas, Sta. Josefa, Agusan del Sur,
with their corresponding TCT and EP numbers identified as follows:
(Deceased)

Registered

Owners

TCT/EP

Nos.
(has.)

1.
MANUEL S. GONZAGA
TCT No. T-920/EP No. A-037832
2.
RAFAEL
PATIO
TCT
No.
T-929/EP
037861
3.0078[iii]3

Areas
4.1953
No.
A-

The parcels of land described above, the subject matters in this Petition, were formerly part of a
forested area which have been denuded as a result of the logging operations of respondent
Hacienda Maria, Inc. (HMI). Petitioners, together with other persons, occupied and tilled these areas
believing that the same were public lands. HMI never disturbed petitioners and the other occupants
in their peaceful cultivation thereof.

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HMI acquired such forested area from the Republic of the Philippines through Sales Patent No.
2683 in 1956 by virtue of which it was issued OCT No. P-3077-1661. The title covered three parcels
of land with a total area of 527.8308 hectares, to wit:
Lot

No.

Area

(in hectares)
Lot No. 1620, Pls 4
Lot No. 1621, Pls 4
Lot No. 1622, Pls 4
TOTAL

28.52
11.64
487.47
527.83 4

On 21 October 1972, Presidential Decree No. 27 5 was issued mandating that tenanted rice and
corn lands be brought under Operation Land Transfer and awarded to farmer-beneficiaries.
HMI, through a certain Joaquin Colmenares, requested that 527.8308 hectares of its
landholdings be placed under the coverage of Operation Land Transfer. Receiving compensation
therefor, HMI allowed petitioners and other occupants to cultivate the landholdings so that the
same may be covered under said law.
In 1973, the Department of Agrarian Reform (DAR) conducted a parcellary mapping of the
entire landholdings of 527.8308 hectares covered by OCT No. P-3077-1661. In 1975 and 1976, the
DAR approved the Parcellary Map Sketching (PMS) and the Amended PMS covering the entire
landholdings.
HMI, through its representatives, actively participated in all relevant proceedings, including the
determination of the Average Gross Production per hectare at the Barangay Committee on Land
Production, and was a signatory of an undated Landowner and Tenant Production Agreement
(LTPA), covering the 527.8308 hectares. The LTPA was submitted to the Land Bank of the
Philippines (LBP) in 1977.
Also in 1977, HMI executed a Deed of Assignment of Rights in favor of petitioners, among other
persons, which was registered with the Register of Deeds and annotated at the back of OCT No. P3077-1661. The annotation in the OCT showed that the entire 527.8308 hectares was the subject of
the Deed of Assignment.
In 1982, a final survey over the entire area was conducted and approved. From 1984 to 1988,
the corresponding TCTs and EPs covering the entire 527.8308 hectares were issued to petitioners,
among other persons.
In December 1997, HMI filed with the Regional Agrarian Reform Adjudicator (RARAD) of
CARAGA, Region XIII, 17 petitions seeking the declaration of erroneous coverage under Presidential
Decree No. 27 of 277.5008 hectares of its former landholdings covered by OCT No. P-3077-1661.
HMI claimed that said area was not devoted to either rice or corn, that the area was untenanted,
and that no compensation was paid therefor. The 17 petitions, which were later consolidated,
sought for the cancellation of the EPs covering the disputed 277.5008 hectares which had been
awarded to petitioners. HMI did not question the coverage of the other 250.3300 hectares under
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Presidential Decree No. 27 despite claiming that the entire landholdings were untenanted and not
devoted to rice and corn.
On 27 November 1998, after petitioners failed to submit a Position Paper, the RARAD rendered
a Decision declaring as void the TCTs and EPs awarded to petitioners because the land covered was
not devoted to rice and corn, and neither was there any established tenancy relations between HMI
and petitioners when Presidential Decree No. 27 took effect on 21 October 1972. The Decision was
based on a 26 March 1998 report submitted by the Hacienda Maria Action Team. Petitioners' TCTs
and EPs were ordered cancelled. Petitioners filed a Motion for Reconsideration, but the same was
denied. Petitioners appealed to the Department of Agrarian Reform Adjudication Board (DARAB)
which affirmed the RARAD Decision.
After the DARAB denied petitioners' Motion for Reconsideration, the latter proceeded to the
Court of Appeals with their Petition for Review on Certiorari. The Court of Appeals issued the
following assailed Resolution:
A perusal of the petition reveals that the Verification and Certification of Non-Forum
Shopping was executed by Samuel A. Estribillo who is one of the petitioners, without the
corresponding Special Power of Attorneys executed by the other petitioners authorizing him
to sign for their behalf in violation of Section 5, Rule 7 of the 1997 Rules of Civil Procedure, as
amended.
WHEREFORE, the petition is DENIED DUE COURSE and necessarily DISMISSED. 6
Petitioners filed a "Motion for Reconsideration With Alternative Prayer with Leave of Court for
the Admission of Special Power of Attorney (SPA) Granted to Petitioner Samuel Estribillo by his CoPetitioners." The Court of Appeals denied the motion by issuing the following assailed Resolution:
Petitioners seek the reconsideration of Our Resolution promulgated on January 27, 2003
which dismissed the petition for certiorari.
We find no reason to reverse, alter or modify the resolution sought to be reconsidered, since
petitioners have failed to show that their belated submission of the special power of attorney
can be justified as against the unequivocal requirements set forth by Sec. 5, Rule 7 of the
1997 Rules of Civil Procedure, as amended.
While it is true that the Supreme Court has recognized special circumstances that justify the
relaxation of the rules on non-forum shopping, such circumstances, however, are not present
in the case at bar.
More importantly, said Rules cannot be relaxed in view of the Supreme Court's ruling
inLoquias vs. Ombudsman, 338 SCRA 62, which stated that, substantial compliance will not
suffice in a matter involving strict observance by the rules. The attestation contained in the
certification [on] non-forum shopping requires personal knowledge by the party who
executed the same.

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Since the Verification and Certification on Non-Forum shopping was executed without the
proper authorization from all the petitioners, such personal knowledge cannot be presumed
to exist thereby rendering the petition fatally defective.
Par. 2, Sec. 5 of Rule 7 of the 1997 Rules of Civil Procedure, as amended states:
"Failure to comply with the foregoing requirements shall not be curable by mere amendment
of the complaint or other initiatory pleading but shall be cause for the dismissal of the case
without prejudice . . ."
It is, thus, clear that the Motion for Reconsideration has no legal basis to support it and
should be dismissed forthwith. Moreover, granting arguendo that a special power of attorney
belatedly filed could cure the petition's defect, the requirement of personal knowledge of all
the petitioners still has not been met since some of the other petitioners failed to sign the
same.
WHEREFORE, in view of the foregoing, the Motion for Reconsideration is hereby DENIED. 7
Petitioners now file this present Petition contending that there had been compliance with Rule
7, Section 5 of the 1997 Rules of Civil Procedure. They further reiterate their argument that the EPs
are ordinary titles which become indefeasible one year after their registration.
The petition is impressed with merit.

Petitioners have sufficiently

complied with Rule 7, Section 5 of
the 1997 Rules of Civil Procedure
concerning the Certification
Against Forum shopping
Rule 7, Section 5 of the 1997 Rules of Civil Procedure was preceded by Revised Circular No. 2891 and Administrative Circular No. 04-94, which required a certification against forum shopping to
avoid the filing of multiple petitions and complaints involving the same issues in the Supreme
Court, the Court of Appeals, and other tribunals and agencies. Stated differently, the rule was
designed to avoid a situation where said courts, tribunals and agencies would have to resolve the
same issues. Rule 7, Section 5, now provides:
Sec. 5.
Certification against forum shopping. The plaintiff or principal party shall
certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or
in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has
not theretofore commenced any action or filed any claim involving the same issues in any
court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action
or claim is pending therein; (b) if there is such other pending action or claim, a complete
statement of the present status thereof; and (c) if he should thereafter learn that the same or
similar action or claim has been filed or is pending, he shall report that fact within five (5)

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days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been
filed.
Failure to comply with the foregoing requirements shall not be curable by mere amendment
of the complaint or other initiatory pleading but shall be cause for the dismissal of the case
without prejudice, unless otherwise provided, upon motion and after hearing. The
submission of a false certification or non-compliance with any of the undertakings therein
shall constitute indirect contempt of court, without prejudice to the corresponding
administrative and criminal actions. If the acts of the party or his counsel clearly constitute
willful and deliberate forum shopping, the same shall be ground for summary dismissal with
prejudice and shall constitute direct contempt as well as a cause for administrative sanctions.
Revised Circular No. 28-91 "was designed . . . to promote and facilitate the orderly
administration of justice and should not be interpreted with such absolute literalness as to subvert
its own ultimate and legitimate objective or the goal of all rules of procedure which is to achieve
substantial justice as expeditiously as possible." 8 Technical rules of procedure should be used to
promote, not frustrate, justice. 9 The same guidelines should still apply in interpreting what is now
Rule 7, Section 5 of the 1997 Rules of Civil Procedure.
Petitioner Samuel A. Estribillo, in signing the Verification and Certification Against Forum
Shopping, falls within the phrase "plaintiff or principal party" who is required to certify under oath
the matters mentioned in Rule 7, Section 5 of the 1997 Rules of Civil Procedure. Such was given
emphasis by this Court when we held in Mendigorin v. Cabantog 10 andEscorpizo v. University of
Baguio 11 that the certification of non-forum shopping must be signed by the plaintiff or any of the
principal parties and not only by the legal counsel. InCondo Suite Club Travel, Inc. v. National Labor
Relations Commission, 12 we likewise held that:
The certification in this petition was improperly executed by the external legal counsel of
petitioner. For a certification of non-forum shopping must be by the petitioner, or any of the
principal parties and not by counsel unless clothed with a special power of attorney to do so.
This procedural lapse on the part of petitioner is also a cause for the dismissal of this action.
(Emphasis supplied)
The Court of Appeals heavily relied on the seemingly conflicting case of Loquias v. Office of the
Ombudsman, 13 where this Court ruled that:
At the outset, it is noted that the Verification and Certification was signed by Antonio Din, Jr.,
one of the petitioners in the instant case. We agree with the Solicitor General that the petition
is defective. Section 5, Rule 7 expressly provides that it is the plaintiff or principal party who
shall certify under oath that he has not commenced any action involving the same issues in any
court, etc. Only petitioner Din, the Vice-Mayor of San Miguel, Zamboanga del Sur, signed the
certification. There is no showing that he was authorized by his co-petitioners to represent
the latter and to sign the certification. It cannot likewise be presumed that petitioner Din
knew, to the best of his knowledge, whether his co-petitioners had the same or similar
actions or claims filed or pending. We find that substantial compliance will not suffice in a
matter involving strict observance by the rules. The attestation contained in the certification
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on non-forum shopping requires personal knowledge by the party who executed the
same.Petitioners must show reasonable cause for failure to personally sign the certification.
Utter disregard of the rules cannot justly be rationalized by harking on the policy of liberal
construction. (Emphasis supplied)
Loquias, however, was a case involving only five petitioners seeking relief from the Resolution of
the Ombudsman charging them with violation of Republic Act No. 3019, where the above
declaration "at the outset" was made together with a determination on the lack of jurisdiction on
our part to decide the Petition. 14 There being only five petitioners inLoquias, the unreasonableness
of the failure to obtain the signatures of Antonio Din, Jr.'s four co-accused is immediately apparent,
hence the remark by this Court that "[p]etitioners must show reasonable cause for failure to
personally sign the certification." In the present petition, petitioners allege that they are farmerbeneficiaries who reside in a very remotebarangay in Agusan del Sur. While they reside in the
same barangay, they allegedly have to walk for hours on rough terrain to reach their neighbors due
to the absence of convenient means of transportation. Their houses are located far apart from each
other and the mode of transportation, habal-habal, is scarce and difficult. Majority of them are also
nearing old age. On the other hand, their lawyers (who are members of a non-government
organization engaged in development work) are based in Quezon City who started assisting them at
the latter part of the RARAD level litigation in 1998, and became their counsel of record only at the
DARAB level. The petitioner who signed the initiatory pleading, Samuel Estribillo, was the only
petitioner who was able to travel to Manila at the time of the preparation of the Petition due to very
meager resources of their farmers' organization, the Kahiusahan sa Malahutayong mga Mag-uugma
Para sa Ekonomikanhong Kalambuan (KAMMPE). When the Petition a quo was dismissed,
petitioners' counsel went to Agusan del Sur and tried earnestly to secure all the signatures for the
SPA. In fact, when the SPA was being circulated for their signatures, 24 of the named petitioners
therein failed to sign for various reasons some could not be found within the area and were said
to be temporarily residing in other towns, while some already died because of old age. 15 Be that as
it may, those who did not sign the SPA did not participate, and are not parties to this petition.
The Court of Appeals merely said that the special circumstances recognized by this Court that
justify the relaxation of the rules on the certification against forum shopping are not present in the
case at bar, 16 without discussing the circumstances adduced by the petitioners in their Motion for
Reconsideration. Thus, assuming for the sake of argument that the actuation of petitioners was not
strictly in consonance with Rule 7, Section 5 of the 1997 Rules of Civil Procedure, it should still be
determined whether there are special circumstances that would justify the suspension or relaxation
of the rule concerning verification and certification against forum shopping, such as those which we
appreciated in the ensuing cases.
In General Milling Corporation v. National Labor Relations Commission, 17 the appeal to the Court
of Appeals had a certificate against forum shopping, but was dismissed as it did not contain a board
resolution authorizing the signatory of the Certificate. Petitioners therein attached the board
resolution in their Motion for Reconsideration but the Court of Appeals, as in this case, denied the
same. In granting the Petition therein, we explained that:

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[P]etitioner complied with this procedural requirement except that it was not accompanied
by a board resolution or a secretary's certificate that the person who signed it was duly
authorized by petitioner to represent it in the case. It would appear that the signatory of the
certification was, in fact, duly authorized as so evidenced by a board resolution attached to
petitioner's motion for reconsideration before the appellate court. It could thus be said that
there was at least substantial compliance with, and that there was no attempt to ignore, the
prescribed procedural requirements.
The rules of procedure are intended to promote, rather than frustrate, the ends of justice, and
while the swift unclogging of court dockets is a laudable objective, it, nevertheless, must not
be met at the expense of substantial justice. Technical and procedural rules are intended to
help secure, not suppress, the cause of justice and a deviation from the rigid enforcement of
the rules may be allowed to attain that prime objective for, after all, the dispensation of
justice is the core reason for the existence of courts. [Acme Shoe, Rubber and Plastic Corp. vs.
Court of Appeals; BA Savings Bank vs. Sia, 336 SCRA 484].
In Shipside Incorporated v. Court of Appeals, 18 the authority of petitioner's resident manager to
sign the certification against forum shopping was submitted to the Court of Appeals only after the
latter dismissed the Petition. It turned out, in the Motion for Reconsideration, that he already had
board authority ten days before the filing of the Petition. We ratiocinated therein that:
On the other hand, the lack of certification against forum shopping is generally not curable by
the submission thereof after the filing of the petition. Section 5, Rule 45 of the 1997 Rules of
Civil Procedure provides that the failure of the petitioner to submit the required documents
that should accompany the petition, including the certification against forum shopping, shall
be sufficient ground for the dismissal thereof. The same rule applies to certifications against
forum shopping signed by a person on behalf of a corporation which are unaccompanied by
proof that said signatory is authorized to file a petition on behalf of the corporation.
In certain exceptional circumstances, however, the Court has allowed the belated filing of the
certification. In Loyola v. Court of Appeals, et al. (245 SCRA 477 [1995]), the Court considered
the filing of the certification one day after the filing of an election protest as substantial
compliance with the requirement. In Roadway Express, Inc. v. Court of Appeals, et al. (264
SCRA 696 [1996]), the Court allowed the filing of the certification 14 days before the
dismissal of the petition. In Uy v. Landbank, supra, the Court had dismissed Uy's petition for
lack of verification and certification against non-forum shopping. However, it subsequently
reinstated the petition after Uy submitted a motion to admit certification and non-forum
shopping certification. In all these cases, there were special circumstances or compelling
reasons that justified the relaxation of the rule requiring verification and certification on
non-forum shopping.
In the instant case, the merits of petitioner's case should be considered special circumstances
or compelling reasons that justify tempering the requirement in regard to the certificate of
non-forum shopping. Moreover, in Loyola, Roadway, and Uy, the Court excused noncompliancewith the requirement as to the certificate of non-forum shopping. With more
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reason should we allow the instant petition since petitioner herein did submit a certification
on non-forum shopping, failing only to show proof that the signatory was authorized to do so.
That petitioner subsequently submitted a secretary's certificate attesting that Balbin was
authorized to file an action on behalf of petitioner likewise mitigates this oversight.
It must also be kept in mind that while the requirement of the certificate of non-forum
shopping is mandatory, nonetheless the requirements must not be interpreted too literally
and thus defeat the objective of preventing the undesirable practice of forum-shopping.
Lastly, technical rules of procedure should be used to promote, not frustrate justice. While
the swift unclogging of court dockets is a laudable objective, the granting of substantial
justice is an even more urgent ideal.
In Uy v. Land Bank of the Philippines, 19 we, likewise, considered the apparent merits of the
substantive aspect of the case as a special circumstance or compelling reason for the reinstatement
of the case, and invoked our power to suspend our rules to serve the ends of justice. Thus:
The admission of the petition after the belated filing of the certification, therefore, is not
unprecedented. In those cases where the Court excused non-compliance with the
requirements, there were special circumstances or compelling reasons making the strict
application of the rule clearly unjustified. In the case at bar, the apparent merits of the
substantive aspects of the case should be deemed as a "special circumstance" or "compelling
reason" for the reinstatement of the petition. . . .
There were even cases where we held that there was complete non-compliance with the rule
on certification against forum shopping, but we still proceeded to decide the case on the merits.
In De Guia v. De Guia, 20 petitioners raised in their Petition for Review the allowance of respondents'
Appeal Brief which did not contain a certificate against forum shopping. We held therein that:
With regard to the absence of a certification of non-forum shopping, substantial justice
behooves us to agree with the disquisition of the appellate court. We do not condone the
shortcomings of respondents' counsel, but we simply cannot ignore the merits of their claim.
Indeed, it has been held that "[i]t is within the inherent power of the Court to suspend its
own rules in a particular case in order to do justice."
In Damasco v. National Labor Relations Commission, 21 the non-compliance was disregarded
because of the principle of social justice, which is equally applicable to the case at bar:
We note that both petitioners did not comply with the rule on certification against forum
shopping. The certifications in their respective petitions were executed by their lawyers,
which is not correct. The certification of non-forum shopping must be by the petitioner or a
principal party and not the attorney. This procedural lapse on the part of petitioners could
have warranted the outright dismissal of their actions.
But, the court recognizes the need to resolve these two petitions on their merits as a matter
of social justice involving labor and capital. After all, technicality should not be allowed to
stand in the way of equitably and completely resolving herein the rights and obligations of
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these parties. Moreover, we must stress that technical rules of procedure in labor cases are
not to be strictly applied if the result would be detrimental to the working woman.
The foregoing cases show that, even if we assume for the sake of argument that there was
violation of Rule 7, Section 5 of the 1997 Rules of Civil Procedure, a relaxation of such rule would be
justified for two compelling reasons: social justice considerations and the apparent merit of the
Petition, as shall be heretofore discussed.

Certificates of Title issued pursuant

to Emancipation Patents are as
indefeasible as TCTs issued in
registration proceedings.
Petitioners claim that the EPs have become indefeasible upon the expiration of one year from
the date of its issuance. The DARAB, however, ruled that the EP "is a title issued through the
agrarian reform program of the government. Its issuance, correction and cancellation is governed
by the rules and regulations issued by the Secretary of the Department of Agrarian Reform (DAR).
Hence, it is not the same as or in the same category of a Torrens title."
The DARAB is grossly mistaken.
Ybaez v. Intermediate Appellate Court, 22 provides that certificates of title issued in
administrative proceedings are as indefeasible as certificates of title issued in judicial proceedings:
It must be emphasized that a certificate of title issued under an administrative proceeding
pursuant to a homestead patent, as in the instant case, is as indefeasible as a certificate of
title issued under a judicial registration proceeding, provided the land covered by said
certificate is a disposable public land within the contemplation of the Public Land Law.
There is no specific provision in the Public Land Law (C.A. No. 141, as amended) or the Land
Registration Act (Act 496), now P.D. 1529, fixing the one (1) year period within which the
public land patent is open to review on the ground of actual fraud as in Section 38 of the Land
Registration Act, now Section 32 of P.D. 1529, and clothing a public land patent certificate of
title with indefeasibility. Nevertheless, the pertinent pronouncements in the aforecited cases
clearly reveal that Section 38 of the Land Registration Act, now Section 32 of P.D. 1529 was
applied by implication by this Court to the patent issued by the Director of Lands duly
approved by the Secretary of Natural Resources, under the signature of the President of the
Philippines in accordance with law. The date of issuance of the patent, therefore, corresponds
to the date of the issuance of the decree in ordinary registration cases because the decree
finally awards the land applied for registration to the party entitled to it, and the patent
issued by the Director of Lands equally and finally grants, awards, and conveys the land
applied for to the applicant. This, to our mind, is in consonance with the intent and spirit of
the homestead laws, i.e. conservation of a family home, and to encourage the settlement,
residence and cultivation and improvement of the lands of the public domain. If the title to
the land grant in favor of the homesteader would be subjected to inquiry, contest and
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decision after it has been given by the Government through the process of proceedings in
accordance with the Public Land Law, there would arise uncertainty, confusion and suspicion
on the government's system of distributing public agricultural lands pursuant to the "Land
for the Landless" policy of the State.
The same confusion, uncertainty and suspicion on the distribution of government-acquired
lands to the landless would arise if the possession of the grantee of an EP would still be subject to
contest, just because his certificate of title was issued in an administrative proceeding. The silence
of Presidential Decree No. 27 as to the indefeasibility of titles issued pursuant thereto is the same as
that in the Public Land Act where Prof. Antonio Noblejas commented:
Inasmuch as there is no positive statement of the Public Land Law, regarding the titles
granted thereunder, such silence should be construed and interpreted in favor of the
homesteader who come into the possession of his homestead after complying with the
requirements thereof. Section 38 of the Land Registration Law should be interpreted to apply
by implication to the patent issued by the Director of Lands, duly approved by the Minister of
Natural Resources, under the signature of the President of the Philippines, in accordance
with law. 23
After complying with the procedure, therefore, in Section 105 of Presidential Decree No. 1529,
otherwise known as the Property Registration Decree (where the DAR is required to issue the
corresponding certificate of title after granting an EP to tenant-farmers who have complied with
Presidential Decree No. 27), 24 the TCTs issued to petitioners pursuant to their EPs acquire the same
protection accorded to other TCTs. "The certificate of title becomes indefeasible and
incontrovertible upon the expiration of one year from the date of the issuance of the order for the
issuance of the patent, . . . . Lands covered by such title may no longer be the subject matter of a
cadastral proceeding, nor can it be decreed to another person." 25
As we held through Justice J.B.L. Reyes in Lahora v. Dayanghirang, Jr. 26 :
The rule in this jurisdiction, regarding public land patents and the character of the certificate
of title that may be issued by virtue thereof, is that where land is granted by the
government to a private individual, the corresponding patent therefor is recorded, and
the certificate of title is issued to the grantee; thereafter, the land is automatically
brought within the operation of the Land Registration Act, the title issued to the grantee
becoming entitled to all the safeguards provided in Section 38 of the said Act. In other
words, upon expiration of one year from its issuance, the certificate of title shall become
irrevocable and indefeasible like a certificate issued in a registration proceeding.
(Emphasis supplied.)
The EPs themselves, like the Certificates of Land Ownership Award (CLOAs) in Republic Act No.
6657 (the Comprehensive Agrarian Reform Law of 1988), are enrolled in the Torrens system of
registration. The Property Registration Decree in fact devotes Chapter IX 27 on the subject of EPs.
Indeed, such EPs and CLOAs are, in themselves, entitled to be as indefeasible as certificates of title
issued in registration proceedings.
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The only defense of respondents, that the issue of indefeasibility of title was raised for the first
time on appeal with the DARAB, does not hold water because said issue was already raised before
the RARAD. 28
The recommendation of the Hacienda Maria Action Team to have the EPs cancelled and the lots
covered under the Republic Act No. 6657, 29 with the farmer-beneficiaries later on being issued with
CLOAs, would only delay the application of agrarian reform laws to the disputed 277.5008 hectares,
leading to the expenditure of more time and resources of the government.
The unreasonable delay of HMI in filing the Petition for cancellation more than 20 years after
the alleged wrongful annotation of the Deed of Assignment in OCT No. P-3077-1661, and more than
ten years after the issuance of the TCTs to the farmers, is apparently motivated by its desire to
receive a substantially higher valuation and just compensation should the disputed 277.5008
hectares be covered under Republic Act No. 6657 instead of Presidential Decree No. 27. 30 This is
further proved by the following uncontested allegations by petitioners:
(i)
HMI neither asked for rentals nor brought any action to oust petitioners from the farm
they were cultivating;
(ii)
HMI had not paid realty taxes on the disputed property from 1972 onwards and never
protested petitioners' act of declaring the same for realty taxation;
(iii) HMI, represented by a certain Angela Colmenares, signed the LTPA covering the entire
landholdings or the area of 527.8308 hectares, which was then represented to be rice and
corn lands;
(iv) HMI abandoned the entire landholdings after executing the Deed of Assignment of
Rights in 1977.
WHEREFORE, the Resolutions of the Court of Appeals in CA-G.R. SP No. 73902 are REVERSED
and SET ASIDE. The following EPs and the corresponding TCTs issued to petitioners or to their
successors-in-interest are hereby declared VALID and SUBSISTING:
Original Grantees
1.
2.

TCT/EP Nos.

SAMUEL ESTRIBILLO
CALIXTO P. ABAYATO, JR.

TCT No. T-287/EP No. A-037675

TCT No. T-297/EP No. A-037814
TCT No. T-829/EP No. A-027293
3. RONGIE D. AGUILAR
TCT No. T-913/EP No. A-027295
4. TACIANA D. AGUILAR
TCT No. T-944/EP No. A-027296
5. ARTEMIO G. DE JUAN,
TCT No. T-302/EP No. A-037809
6. ESTANISLAO DELA CRUZ, SR.
TCT No. T-290/EP No. A-035676
7. EDGAR DUENAS
TCT No. T-949/EP No. A-037658
8. MARIO P. ERIBAL
TCT No. T-952/EP No. A-037836
9. REYNALDO C. ESENCIA
TCT No. T-950/EP No. A-037844
10. RUBEN A. IBOJO
TCT No. T-928/EP No. A-037873
11. SAMUEL JAMANDRE
TCT No. T-909/EP No. A-159348
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12. HILARION V. LANTIZA
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.

ANSELMO LOPEZ
TERESITA NACION
CHARIE E. NASTOR
NELSON L. NULLAS
CARLITO S. OLIA
ROBERTO T. PATIO
ANTONIO P. ROCHA
FERNANDO C. RUFINO
PATERNO P. SAIN
CLAUSIO S. SAYSON
JOEMARIE VIBO
MANUEL S. GONZAGA
RAFAEL PATIO

TCT No. T-288/EP No. A-037674

TCT No. T-401/EP No. A-037825
TCT No. T-973/EP No. A-037840
TCT No. T-900/EP No. A-037849
TCT No. T-825/EP No. A-037829
TCT No. T-396/EP No. A-037826
TCT No. T-910/EP No. A-037673
TCT No. T-912/EP No. A-037860
TCT No. T-914/EP No. A-037830
TCT No. T-923/EP No. A-037848
TCT No. T-954/EP No. A-037813
TCT No. T-891/EP No. A-037880
TCT No. T-893/EP No. A-037827
TCT No. T-920/EP No. A-037832
TCT No. T-297/EP No. A-037861

Costs against respondent Hacienda Maria, Inc.

SO ORDERED.
Ynares-Santiago, Austria-Martinez and Callejo, Sr., JJ., concur.
Panganiban, C.J., is on official leave.
Footnotes
1.
CA-G.R. SP No. 73902. Both Resolutions were penned by Associate Justice Juan Q. Enriquez,
Jr., with Associate Justices Bernardo P. Abesamis and Edgardo F. Sundiam, concurring; Rollo, pp. 3536; 38-40.
2.

Rollo, p. 5.

3.

Id.

4.

Id. at 6.

5.
DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF THE SOIL
TRANSFERRING TO THEM THE OWNERSHIP OF THE LAND THEY TILL AND PROVIDING THE
INSTRUMENTS AND MECHANISM THEREFOR.
6.

Id. at 36.

7.

Id. at 39-40.

8.

Gabionza v. Court of Appeals, G.R. No. 112547, 18 July 1994, 234 SCRA 192, 198.

9.

Cusi-Hernandez v. Diaz, 390 Phil. 1245, 1252 (2000).

10.

436 Phil. 483, 491 (2002).

11.

366 Phil. 166, 175 (1999).

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12.
380 Phil. 660, 667 (2000).
13.

392 Phil. 596, 603-604 (2000).

14.
We held in Loquias that "this court will not interfere with the Ombudsman's exercise of his
constitutionally mandated investigatory and prosecutory powers. Otherwise stated, it is beyond the
ambit of this Court to review the exercise of discretion of the Ombudsman in prosecuting or
dismissing a complaint filed before it. Such initiative and independence are inherent in the
Ombudsman who, beholden to no one, acts as the champion of the people and preserver of the
integrity of the public service. . . ." (Id.)
15.

Rollo, pp. 190-191.

16.

Id. at 30.

17.

442 Phil. 425, 427-428 (2002).

18.

G.R. No. 143377, 20 February 2001, 352 SCRA 334, 346-347.

19.
391 Phil. 303, 314 (2000), citing Melo v. Court of Appeals, G.R. No. 123686, 16 November
1999, 318 SCRA 94.
20.

G.R. No. 135384, 4 April 2001, 356 SCRA 287, 294-295.

21.
G.R. Nos. 115755 & 116101, 4 December 2000, 346 SCRA 714, 720-721, citing Condo Suite
Club Travel, Inc. v. National Labor Relations Commission, G.R. No. 125671, January 28, 2000, 323
SCRA 679; Philippine Scout Veterans Security and Investigation Agency Inc. v. National Labor
Relations Commission, G.R. No. 124500, 4 December 1998, 299 SCRA 690, 694; Judy Phils., Inc. v.
National Labor Relations Commission, G.R. No. 111934, 29 April 1998, 289 SCRA 755, 764.
22.

G.R. No. 68291, 6 March 1991, 194 SCRA 743, 749-750.

23.
ed.)

REGISTRATION OF LAND, TITLES AND DEEDS, Antonio H. Noblejas, p. 431 (1992 revised

24.
Presidential Decre No. 1529, Section 105: ". . . After the tenant-farmer shall have fully
complied with the requirements for a grant of title under P.D. No. 27, an Emancipation Patent which
may cover previously titled or untitled property shall be issued by the Department of Agrarian
Reform.
The Register of Deeds shall complete the entries on the aforementioned Emancipation
Patent and shall assign an original certificate of title in case of unregistered land, and in case of
registered property, shall issue the corresponding certificate of title without requiring the owner's
duplicate of the title to be cancelled. . . ."
25.
Amado D. Aquino, LAND REGISTRATION AND RELATED PROCEEDINGS, Chapter XII "Land
Patents", p. 139; citing Gomez v. Court of Appeals, G.R. No. L-77770, 15 December 1988, 168 SCRA
503, 511; Duran v. Oliva, 113 Phil. 144, 148-149 (1961).
26.

147 Phil. 301, 304 (1971).

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27.
Chapter IX: CERTIFICATE OF LAND TRANSFER, EMANCIPATION PATENT, AFFIDAVIT OF
NON-TENANCY.
28.
DARAB/RARAD Records, p. 472: ". . . It bears emphasis that a patent when registered in the
corresponding Register of Deeds is a veritable Torrens title and becomes as indefeasible as to the
Torrens title upon the expiration of one (1) year from the date of its issuance. Nullification of
certificate may be had only in a case directly attacking its validity but never collaterally."
29.
Under R.A. No. 6657, the Comprehensive Agrarian Reform Law of 1988, Agrarian Reform
means the "redistribution of lands, regardless of crops and fruits produced, to farmers and regular
farmworkers who are landless, irrespective of tenurial arrangement, . . . ."
30.

See DARAB records, p. 472.

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#16 G.R. NO. 78214

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.

DECISION

SARMIENTO, J p:
Before us is a petition for certiorari seeking the annulment of an Order issued by the public
respondent Ministry of Agrarian Reform (MAR), 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. LLphil
The facts as gathered by the MAR are as follows:
The landholding subject of the controversy, which consists of only sixty (60) square meters (20
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 Millenes. This landholding is part of Lot No. 3109-C, which has a total area of about 500
square meters, situated at Lawa-an, Talisay, Cebu. The remainder of Lot No. 3109-C was
subsequently 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 fifty-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.

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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 Lawa-an 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. LLphil
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, 1983, 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 this case is filed patently to harass and/or eject the tenant from his farmholding, which act is
prohibited b 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 Order 3 dated November 15, 1986, setting
aside the previous Order 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
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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 1/2 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 tiller
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, its 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 500square meter lot. Sixty square meters of land planted to bananas, camote, and corn cannot by any
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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; and

6.

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 laudableprovinciano 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.

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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;

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2. The damage caused did not constitute arson or crimes involving destructions.
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 allowed 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. prcd
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.
Melencio-Herrera (Chairman), Paras, Padilla and Regalado, JJ., concur.
Footnotes
1.

Rollo, 11.

2.

Id., 12.

3.

Id., 13-17.

4.

Id., 15.

5.

Id., 16.

6.

Rollo, 16.

7.

Petition for Certiorari, 3-4; Id., 6-7.

8.

Section 166 (20).

9.

Petition's Reply Memorandum; Id., 67.

10.

Tiongson vs. CA, No. L-62626, July 18, 1984, 130 SCRA 482.

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11.
Lianga Bay Logging Co., Inc. vs. CA and Muyco, No. L-37783, January 28, 1988; Francisco, et
al. vs. The City of Davao, et al., No. L-20654, December 24, 1964, 12 SCRA 628; Republic vs Security
Credit and Acceptance Cor., et al., No. L-27802, October 26, 1968, 25 SCRA 641.
12.

AR Order dated November 15, 1986, 3; Rollo, 15.

3.

Article 327, Revised Penal Code, as amended.

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#17 G.R. NO. 86186

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.

SYLLABUS

1.
REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; FACTUAL ISSUES NOT
PROPER. 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.
2.
ID.; EVIDENCE; FACTUAL FINDINGS OF THE COURT OF APPEALS SUPPORTED BY
SUBSTANTIAL EVIDENCE, CONCLUSIVE ON APPEAL. 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 such findings may be
validly reversed by this Court.
3.
LABOR AND SOCIAL LEGISLATION; TENANCY; A LEGAL RELATIONSHIP BROUGHT
ABOUT BY THE INTENT OF THE PARTIES. As this Court has stressed in a number of cases,
"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."
4.
ID.; ID.; PAYMENT OF IRRIGATION FEES, NOT EVIDENCE OF TENANCY. 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

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preliminary finding that Gelos was the tenant of the private respondent. As such, it was he
who had to pay the irrigation fees.
5.
ID.; ID.; DETERMINATION BY THE SECRETARY OF EXISTENCE OF TENANCY
RELATIONSHIP, NOT CONCLUSIVE. 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.
6.
ID.; ID.; TENANT, DEFINED. 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.
7.
ID.; ID.; REQUISITES. 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.
8.
ID.; LABOR LAWS; EMPLOYER-EMPLOYEE RELATIONSHIP; REQUISITES. 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.
9.
ID.; TENANCY; DISTINGUISHED FARM EMPLOYER-FARM WORKER RELATIONSHIP.
According to a well-known authority on the subject, 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 he 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."
10.
CIVIL LAW; PRESCRIPTION OF ACTIONS; ACTION BASED ON A WRITTEN CONTRACT
PRESCRIBES IN TEN (10) YEARS; CASE AT BAR. 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
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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.

DECISION

CRUZ, J p:
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 BP 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.

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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 when 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
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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 tendency 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, Laocadio 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."

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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 he 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
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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 in 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.
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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.
Narvasa, C .J ., Grio-Aquino, Medialdea and Bellosillo, JJ ., concur.
Footnotes
1.

Exhibit "D".

2.

Rollo, p. 16; penned by Judge Clemente M. Soriano.

3.

Ibid., p. 21; penned by Sempio-Diy, J., with Herrera and Francisco. JJ., concurring.

4.

182 SCRA 778.

5.

Exhibit "C."

6.

TSN, July 22, 1986, pp. 10-13.

7.

TSN, January 23, 1985, pp. 13-15; 37-38.

8.

Ibid., pp. 21, 32.

9.
Gonzales, Jr. v. Alvarez, 182 SCRA 15; See also Magno-Adamos v. Bagasao, 162 SCRA 747;
Tuazon v. CA, 118 SCRA 484.
10.

Exhibits "2" and "2-A" to "2-H."

11.
Baranda v. Baguio, 189 SCRA 194; Prudential Bank v. Hon. Filomeno Capultos, 181 SCRA 159;
Caballes v. Department of Agrarian Reform, 168 SCRA 247.
12.
Deferia v. NLRC, 194 SCRA 525; Singer Sewing Machine Co. v. Hon. Drilon, 193 SCRA 270;
Brotherhood Labor Unity Movement in the Philippines v. Zamora, 147 SCRA 49.
13.
Alcantara, Philippine Labor and Social Legislation Annotated, Vol. 1, 1991 Revised Edition, p.
47 citing De Los Reyes v. Espineli, et al., 30 SCRA 574.
**

Not Article 555 as cited by the appealed decision.

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#18 G.R. NO. L-27797

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.

DECISION

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 successorsin-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:

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"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 seeks 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.

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'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
professionals; 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 settling 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
lease 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 possession 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
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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 case 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 the measely 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
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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, saltbeds 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.
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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. This
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, construed 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
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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-ininterest 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.
Fernando, Antonio, Fernandez and Aquino, JJ., concur.
Barredo, J., did not take part.
Footnotes
1.

Record, pages 63-68.

2.
Tolentino vs. De Jesus, L-32797, March 27, 1974, 56 SCRA 167, 171-172; Evangelista & Co. vs.
Abad Santos, L-31684, June 28, 1973, 51 SCRA 416, 423; Chan vs. Court of Appeals, L-27488, June
30, 1970, 33 SCRA 737, 743; Ramirez Telephone Corp. vs. Bank of America, L-22614, August 29,
1969, 29 SCRA 191, 198.
3.
Crisolito Pascual, Labor and Tenancy Relations Law, 3rd edition, page 492; Jeremias U.
Montemayor, Labor Agrarian and Social Legislation, 2nd edition, Vol. III, pages 534-535, Guillermo
S. Santos and Artemio C. Macalino, The Agricultural Land Reform Code, 1963 edition, page 300.
4.

Section 4, Republic Act No. 1199, as amended by Republic Act No. 2263.

5.
Tawatao vs. Garcia, L-17649, July 31, 1963, 8 SCRA 566, 571, citing Molina vs. Rafferty, 36
Phil., 167 and Banaag vs. Singson Encarnacion, 46 O.G. 4895.
6.

Section 5 (o), Republic Act No. 1199.

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7.
Order of the lower court of February 12, 1962, Record on Appeal, pages 37-38.
8.

De Guzman vs. Ungson, 93 Phil., 645, 647; Omega, et al. vs. Solidum, et al., 93 Phil. 457, 460.

9.
Dumlao vs. De Guzman, L-12816, January 28, 1961, 1 SCRA 144, 147; Lastimoza vs. Blanco, L14697, January 28, 1961, 1 SCRA 231, 234; Tuvera vs. De Guzman, L-20547, April 30, 1965, 13
SCRA 729, 731; Casaria vs. Rosales, L-20288, June 22, 1965, 14 SCRA 368, 370.

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#19 G.R. NO. 132477

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,respondents.

Sycip Salazar Hernandez & Gatmaitan and Alice K. Canonoy-Moranda & Conchito E. Germino for
petitioners.
Virgilus M. Santiago for Dir. J. Llames.

SYLLABUS

1.
LABOR AND SOCIAL LEGISLATION; AGRARIAN LAWS; REPUBLIC ACT NO. 6657
(COMPREHENSIVE AGRARIAN REFORM PROGRAM); DEPARTMENT OF AGRARIAN REFORM;
HAS JURISDICTION OVER CONVERSION OF AGRICULTURAL LANDS. 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. . . . The authority of
the DAR to approve conversions of agricultural lands covered by Rep. Act No. 6657 to nonagricultural uses has not been pierced by the passage of the Local Government Code. The
Code explicitly provides that "nothing in this section shall be construed as repealing or
modifying in any manner the provisions of Rep. Act No. 6657." AaCEDS
2.
ID.; ID.; ID.; AGRICULTURAL LANDS MUST GO THROUGH THE PROCESS OF
CONVERSION DESPITE HAVING UNDERGONE RECLASSIFICATION; CONVERSION AND
RECLASSIFICATION, DISTINGUISHED. 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, 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
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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."
3.
POLITICAL LAW; ADMINISTRATIVE LAW; DOCTRINE OF PRIMARY JURISDICTION;
APPLIED IN CASE AT BAR. 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, 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. . . ."

DECISION

CHICO-NAZARIO, J p:

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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. In an order 6 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 nonagricultural 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
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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. 9 Petitioners filed before this Court a Petition for Review on Certiorari with
application for Temporary Restraining Order and Writ of Preliminary Injunction. 10 In a
resolution 11 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 ordered 14 to file their Comments on the
petition. Two sets of comments from the public respondents, one from the Department of Agrarian
Reform Provincial Office 15 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 decision 18 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 issues 21 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 20 22 of 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
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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
65 23 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. THaDAE
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.
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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.
xxx
(d)

xxx

xxx

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:

I.

CONSOLIDATED AND REVISED RULES AND PROCEDURES GOVERNING

CONVERSION OF AGRICULTURAL LANDS TO NON-AGRICULTURAL USES

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.

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II.

III.

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."

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.
xxx

V.

xxx

COVERAGE

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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 provides 26 that "nothing in this section shall be construed as repealing or
modifying in any manner the provisions of Rep. Act No. 6657."

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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
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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.
Puno, Austria-Martinez, Callejo, Sr. and Tinga, JJ., concur.
Footnotes
1.

Annex D; Rollo, pp. 60-61.

2.

Annexes E - E1; Rollo, pp. 62-64.

3.
a. Balamban Municipal Planning and Development Coordinator's Certification dated May
11, 1995, certifying that the subject parcels were, in fact, classified as industrial lands by virtue of
the municipal and provincial resolutions and ordinances abovementioned.
b.
Housing and Land Use Regulatory Board's ("HLURB") letter dated August 3, 1995,
granting its consent to the industrial development project to be undertaken by petitioners.
c.
Balamban Municipal Planning and Development Coordinator's Certificate of
Eligibility for Conversion dated August 10, 1995, certifying that petitioners' industrial development
project conforms with Balamban's zoning and land use ordinance.
d.
Certifications dated August 7, 1995 issued by the National Irrigation
Administration ("NIA"), certifying that the subject lands were "outside irrigated lands and water is
not available to support rice and other crop production."
e.
Certificates of Eligibility for Conversion dated September 11, 1995 issued by the
Department of Agriculture's ("DA") Regional Office, certifying that the subject lands were proper
for conversion into industrial lands.
f.
Environment Clearances issued by the Department of Environment and Natural
Resources dated September 28, 1995, granting clearance for the conversion of the subject lands
from agricultural to industrial.
g.
Certification dated August 3, 1995 issued by the Municipal Agrarian Reform
Officer ("MARO") of Balamban, certifying that "there are no CARPABLE AREAS and therefore no
CARP Farmer-beneficiaries" within the subject lands.
4.

Annex N; Rollo, p. 93.

5.

Annex O; Rollo, pp. 96-107.

6.

Penned by Executive Judge Gualberto P. Delgado.

7.

Annex P; Rollo, pp. 109-112.

8.

Rollo, pp. 111-112.

9.

Annex Q; Rollo, pp. 113-114.

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10.
Annex R; Rollo, p. 115.
11.

Rendered by the 1st Division.

12.

Annex S; Rollo, pp. 139-140.

13.

Annex T; Rollo, p. 141.

14.

09 January 1997.

15.

Annex U; Rollo, p. 142.

16.

Annex V; Rollo, p. 163.

17.

Annex W; Rollo, p. 176.

18.
Docketed as CA-G.R. SP No. 42666, penned by Associate Justice (now Presiding Justice)
Romeo A. Brawner with Associate Justices Ricardo P. Galvez and Marina L. Buzon, concurring.
19.

Rollo, pp. 41-54.

20.

Rollo, p. 57.

21.

Memorandum of the Petitioners; Rollo, pp. 360-361.

22.

Rep. Act No. 7160 (Local Government Code).

SEC. 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:
(1)

For highly urbanized and independent component cities, fifteen percent (15%);

(2)

For component cities and first to third class municipalities, ten percent (10%);

and
(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.
23.

Rep. Act No. 6657 (Comprehensive Agrarian Reform Program)

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
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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.
24.

G.R. No. 152085, 08 July 2003, 405 SCRA 440, 448-449.

25.

G.R. No. 111387, 08 June 2004, 431 SCRA 165, 185-186.

26.

Sec. 20(e) of the Rep. Act No. 7160, Local Government Code.

27.

G.R. No. 152564, 13 September 2004, 438 SCRA 259, 262-263.

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#20 G.R. NO. 183409

FIRST DIVISION

[G.R. No. 183409. June 18, 2010.]

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA),petitioner, vs. THE
SECRETARY OF AGRARIAN REFORM, respondent.

DECISION

PEREZ, J p:
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, 1 and 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, 3entitled
"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
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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. 0199, 4 entitled "Revised Rules and Regulations on the Conversion of Agricultural Lands to Nonagricultural 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. 6657 5 on 15 June 1988 pursuant to Section 20 6 of Republic Act No.
7160 7 and other pertinent laws and regulations, and are to be converted to such uses. 2005jurcd
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
provisions 8 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.
By reason thereof, petitioner claims that there is an actual slow down of housing projects,
which, in 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 NONAGRICULTURAL USES.
II.
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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. aDcETC
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:
xxx

xxx

xxx

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 nonagricultural uses on or after the effectivity of RA 6657 on 15 June 1988, . . . . [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 nonagricultural 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.

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In the same breath, petitioner contends that DAR AO No. 01-02, as amended, was made in
violation of Section 65 11 of 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 nonawarded 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,16 citing People v. Cuaresma, 17 this
Court made the following pronouncements: CcHDaA
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
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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 ATcaEH
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 QuijanoPadilla, 23 on government contract involving modernization and computerization of voters'
registration list; (d) Buklod ng Kawaning EIIB v. Hon. Sec. Zamora, 24 on 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:

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(1)
Exercise original jurisdiction over cases affecting ambassadors, other public ministers
and consuls, and over petitions for certiorari, prohibition, mandamus, quo
warranto, andhabeas 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. 32 Grave 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
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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.
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 . . . 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 certiorarito declare the aforesaid administrative
issuances unconstitutional and illegal becausecertiorari 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
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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-A 37 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 (1) 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 . . . ." HTAEIS
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 nonagricultural 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 "landsnot
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
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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 nonagricultural usesbefore 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 Appeals 43 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 nonagricultural 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 cADEHI
It is clear from the aforesaid distinction between reclassification and conversion that
agricultural lands though reclassified to residential, commercial, industrial or other nonagricultural 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
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require any DAR conversion clearance or authority. 46 Thereafter, 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, 47reclassification 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 nonagricultural 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. 48 Reclassification of
agricultural lands is one thing, conversion is another. Agricultural lands that are reclassified to nonagricultural 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,
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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. ESIcaC
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 nonagricultural uses before 15 June 1988 in the definition of agricultural lands under DAR AO No. 0102, 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:
xxx

xxx

xxx

(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.
xxx

xxx

xxx

(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
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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: aETADI
Sec. 73.

Prohibited Acts and Omissions. The following are prohibited:

xxx

xxx

xxx

(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;
xxx

xxx

xxx

(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.
xxx

xxx

xxx

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. . . . .

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.

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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.
Corona, C.J., Velasco, Jr., Leonardo-de Castro and Del Castillo, JJ., concur.
Footnotes
1.

Rollo, pp. 182-183.

2.

Id. at 185.

3.

Id. at 42-59.

4.

Id. at 77-110.

5.

Otherwise known as "The Comprehensive Agrarian Reform Law of 1988."

6.
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:
1. For highly urbanized and independent component cities, fifteen percent (15%);
2. For component cities and first to third class municipalities, ten percent (10%); and
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
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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.
(b) The President may, when public interest so requires and upon recommendation of the
National Economic and Development Authority, authorize a city or municipality to reclassify lands
in excess of the limits set in the next preceding paragraph.
(c) The local government units shall, in conformity with existing laws, continue to prepare
their respective comprehensive land use plans enacted through zoning ordinances which shall be
the primary and dominant bases for the future use of land resources: Provided, That the
requirements for food production, human settlements, and industrial expansion shall be taken into
consideration in the preparation of such plans.
(d) Where approval by a national agency is required for reclassification, such approval shall
not be unreasonably withheld. Failure to act on a proper and complete application for
reclassification within three (3) months from receipt of the same shall be deemed as approval
thereof.
(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any
manner the provisions of R.A. No. 6657.
7.

Otherwise known as "The Local Government Code of 1991."

8.

Particularly Sections 3.1 and 6.2 of DAR AO No. 01-02.

9.

Rollo, p. 272.

10.

Otherwise known as "The Agriculture and Fisheries Modernization Act of 1997."

11.
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.
12.
Section 2.19. Reclassification of Agricultural Lands refers to 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, undertaken by a Local Government Unit (LGU) in accordance with Section 20 of RA
7160 and Joint Housing and Land Use Regulatory Board (HLURB), DAR, DA, and Department of
Interior and Local Government (DILG) MC-54-1995. It also includes the reversion of nonagricultural lands to agricultural use.
13.

Section 25. The State shall ensure the autonomy of local governments.

14.

Section 2. The territorial and political subdivisions shall enjoy local autonomy.
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15.
Heirs of Bertuldo Hinog v. Melicor, G.R. No. 140954, 12 April 2005, 455 SCRA 460, 470.

16.

Id.

17.

254 Phil. 418 (1989).

18.

Heirs of Bertuldo Hinog v. Melicor, supra note 15 at 471.

19.
Liga ng mga Barangay National v. City Mayor of Manila, 465 Phil. 529, 543 (2004); Santiago v.
Vasquez, G.R. Nos. 99289-90, 27 January 1993, 217 SCRA 633, 652.
20.

Tano v. Hon. Gov. Socrates, 343 Phil. 670, 700 (1997).

21.

G.R. No. 157036, 9 June 2004, 431 SCRA 534.

22.

438 Phil. 417 (2002).

23.

438 Phil. 72 (2002).

24.

413 Phil. 281 (2001).

25.

352 Phil. 461 (1998).

26.

Heirs of Bertuldo Hinog v. Melicor, supra note 15.

27.

Id.

28.
Philnabank Employees Association v. Estanislao, G.R. No. 104209, 16 November 1993, 227
SCRA 804, 811.
29.

People v. Court of Appeals, 468 Phil. 1, 10 (2004).

30.

Rivera v. Hon. Espiritu, 425 Phil. 169, 179-180 (2002).

31.

Land Bank of the Philippines v. Court of Appeals, 456 Phil. 755, 785 (2003).

32.

Id.

33.

Id. at 786.

34.

Liga ng mga Barangay National v. City Mayor of Manila, supra note 19 at 541.

35.

Id.

36.

Mayor Balindong v. Vice Gov. Dacalos, 484 Phil. 574, 579 (2004).

37.
Otherwise known as "The Reorganization Act of the Department of Agrarian Reform," which
was approved on 26 July 1987.
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38.
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 Republic Act
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 15 June 1988. This conclusion is based on a liberal
interpretation of Republic Act No. 6657 in the light of DAR's mandate and the extensive coverage of
the agrarian reform program.
39.

G.R. No. 132477, 31 August 2005, 468 SCRA 471.

40.

Junio v. Garilao, G.R. No. 147146, 29 July 2005, 465 SCRA 173, 182-183.

41.
Heirs of Francisco R. Tantoco, Sr. v. Court of Appeals, G.R. No. 149621, 5 May 2006, 489 SCRA
590, 606-607.
42.

Ros v. Department of Agrarian Reform, supra note 39 at 483.

43.

453 Phil. 373, 382-383 (2003).

44.

Id.

45.

Junio v. Garilao, G.R. No. 147146, 29 July 2005, 465 SCRA 173, 181-182.

46.

Heirs of Francisco R. Tantoco, Sr. v. Court of Appeals, supra note 41.

47.

G.R. Nos. 149548, 167505, 167540, 167543, 167845, 169163 and 179650, 4 December 2009.

48.

Roxas & Company, Inc. v. DAMBA-NFSW and the Department of Agrarian Reform, id.

49.

G.R. No. 157306, 25 November 2005, 476 SCRA 265, 274.

50.

Section 1.A of Executive Order No. 506 dated 18 February 1992.

51.
Department of Agrarian Reform v. Department of Education, Culture and Sports, 469 Phil.
1083, 1092-1093 (2004) citing Central Mindanao University v. Department of Agrarian Reform
Adjudication Board, G.R. No. 100091, 22 October 1992, 215 SCRA 86, 99.

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#21 G.R. NO. 131457

SECOND DIVISION

[G.R. No. 131457. April 24, 1998.]

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.

DECISION

MARTINEZ, J p:
The dramatic and well-publicized hunger strike staged by some alleged farmer-beneficiaries in
front of the Department of Agrarian Reform compound in Quezon City on October 9, 1997
commanded nationwide attention that even church leaders and some presidential candidates tried
to intervene for the strikers' "cause."
The strikers protested the March 29, 1996 Decision 1 of the Office of the President (OP), issued
through then Executive Secretary Ruben D. Torres in OP Case No. 96-C-6424, which approved the
conversion of a one hundred forty-four (144)-hectare land from agricultural to agroindustrial/institutional area. This led the Office of the President, through then Deputy Executive
Secretary Renato C. Corona, to issue the so-called "Win-Win" Resolution 2 on November 7, 1997,
substantially modifying its earlier Decision after it had already become final and executory. The said
Resolution modified the approval of the land conversion to agro-industrial area only to the extent of
forty-four (44) hectares, and ordered the remaining one hundred (100) hectares to be distributed
to qualified farmer-beneficiaries.
But, did the "Win-Win" Resolution culminate in victory for all the contending parties?
The above-named petitioners cried foul. They have come to this Court urging us to annul and
set aside the "Win-Win" Resolution and to enjoin respondent Secretary Ernesto D. Garilao of the
Department of Agrarian Reform from implementing the said Resolution.

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Thus, the crucial issue to be resolved in this case is: What is the legal effect of the "Win-Win"
Resolution issued by the Office of the President on its earlier Decision involving the same subject
matter, which had already become final and executory?
The antecedent facts of this controversy, as culled from the pleadings, may be stated as follows:
1.
This case involves a 144-hectare land located at San Vicente, Sumilao, Bukidnon,
owned by the Norberto Quisumbing, Sr. Management and Development Corporation
(NQSRMDC), one of the petitioners. The property is covered by a Transfer Certificate of Title
No. 14371 3 of the Registry of Deeds of the Province of Bukidnon.
2.
In 1984, the land was leased as a pineapple plantation to the Philippine Packing
Corporation, now Del Monte Philippines, Inc. (DMPI), a multinational corporation, for a
period of ten (10) years under the Crop Producer and Grower's Agreement duly annotated in
the certificate of title. The lease expired in April, 1994.
3.
In October, 1991, during the existence of the lease, the Department of Agrarian Reform
(DAR) placed the entire 144-hectare property under compulsory acquisition and assessed
the land value at P2.38 million. 4
4.
NQSRMDC resisted the DAR's action. In February, 1992, it sought and was granted by
the DAR Adjudication Board (DARAB), through its Provincial Agrarian Reform Adjudicator
(PARAD) in DARAB Case No. X-576, a writ of prohibition with preliminary injunction which
ordered the DAR Region X Director, the Provincial Agrarian Reform Officer (PARO) of
Bukidnon, the Municipal Agrarian Reform Office (MARO) of Sumilao, Bukidnon, the Land
Bank of the Philippines (Land Bank), and their authorized representatives "to desist from
pursuing any activity or activities" concerning the subject land "until further orders." 5
5.
Despite the DARAB order of March 31, 1992, the DAR Regional Director issued a
memorandum, dated May 21, 1992, directing the Land Bank to open a trust account for P2.38
million in the name of NQSRMDC and to conduct summary proceedings to determine the just
compensation of the subject property. NQSRMDC objected to these moves and filed on June 9,
1992 an Omnibus Motion to enforce the DARAB order of March 31, 1992 and to nullify the
summary proceedings undertaken by the DAR Regional Director and Land Bank on the
valuation of the subject property.
6.
The DARAB, on October 22, 1992, acted favorably on the Omnibus Motion by (a)
ordering the DAR Regional Director and Land Bank "to seriously comply with the terms of
the order dated March 31, 1992;" (b) nullifying the DAR Regional Director's memorandum,
dated May 21, 1992, and the summary proceedings conducted pursuant thereto; and (c)
directing the Land Bank "to return the claim folder of Petitioner NQSRMDC's subject property
to the DAR until further orders." 6
7.
The Land Bank complied with the DARAB order and cancelled the trust account it
opened in the name of petitioner NQSRMDC. 7

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8.
In the meantime, the Provincial Development Council (PDC) of Bukidnon, headed by
Governor Carlos O. Fortich, passed Resolution No. 6, 8 dated January 7, 1993, designating
certain areas along Bukidnon-Sayre Highway as part of the Bukidnon Agro-Industrial Zones
where the subject property is situated.
9.
What happened thereafter is well-narrated in the OP (TORRES) Decision of March 29,
1996, pertinent portions of which we quote:
"Pursuant to Section 20 of R.A. No. 7160, otherwise known as the Local Government Code,
the Sangguniang Bayan of Sumilao, Bukidnon, on March 4, 1993, enacted Ordinance No. 24
converting or re-classifying 144 hectares of land in Bgy. San Vicente, said Municipality, from
agricultural to industrial/institutional with a view of providing an opportunity to attract
investors who can inject new economic vitality, provide more jobs and raise the income of its
people.
"Parenthetically, under said section, 4th to 5th class municipalities may authorize the
classification of five percent (5%) of their agricultural land area and provide for the manner
of their utilization or disposition.
"On 12 October 1993, the Bukidnon Provincial Land Use Committee approved the said
Ordinance. Accordingly, on 11 December 1993, the instant application for conversion was
filed by Mr. Gaudencio Beduya in behalf of NQSRMDC/BAIDA (Bukidnon Agro-Industrial
Development Association).
"Expressing support for the proposed project, the Bukidnon Provincial Board, on the basis of
a Joint Committee Report submitted by its Committee on Laws, Committee on Agrarian
Reform and Socio-Economic Committee approved, on 1 February 1994, the said Ordinance
now docketed as Resolution No. 94-95. The said industrial area, as conceived by NQSRMDC
(project proponent) is supposed to have the following components:
"1. The Development Academy of Mindanao which constitutes the following: Institute for
Continuing Higher Education; Institute for Livelihood Science (Vocational and Technical
School); Institute for Agribusiness Research; Museum, Library, Cultural Center, and
Mindanao Sports Development Complex which covers an area of 24 hectares;
"2. Bukidnon Agro-Industrial Park which consists of corn processing for corn oil, corn
starch, various corn products; rice processing for wine, rice-based snacks, exportable rice;
cassava processing for starch, alcohol and food delicacies; processing plants, fruits and fruit
products such as juices; processing plants for vegetables processed and prepared for market;
cold storage and ice plant; cannery system; commercial stores; public market; and abattoir
needing about 67 hectares;
"3. Forest development which includes open spaces and parks for recreation, horse-back
riding, memorial and mini-zoo estimated to cover 33 hectares; and
"4. Support facilities which comprise the construction of a 360-room hotel, restaurants,
dormitories and a housing project covering an area of 20 hectares.
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"The said NQSRMDC Proposal was, per Certification dated January 4, 1995, adopted by the
Department of Trade and Industry, Bukidnon Provincial Office, as one of its flagship projects.
The same was likewise favorably recommended by the Provincial Development Council of
Bukidnon; the municipal, provincial and regional office of the DAR; the Regional Office
(Region X) of the DENR (which issued an Environmental Compliance Certificate on June 5,
1995); the Executive Director, signing 'By Authority of PAUL G. DOMINGUEZ,' Office of the
President Mindanao; the Secretary of DILG; and Undersecretary of DECS Wilfredo D.
Clemente.
"In the same vein, the National Irrigation Administration, Provincial Irrigation Office,
Bagontaas Valencia, Bukidnon, thru Mr. Julius S. Maquiling, Chief, Provincial Irrigation Office,
interposed NO OBJECTION to the proposed conversion 'as long as the development cost of
the irrigation systems thereat which is P2,377.00 per hectare be replenished by the
developer . . .' Also, the Kisolon-San Vicente Irrigators Multi Purpose Cooperative, San
Vicente, Sumilao, Bukidnon, interposed no objection to the proposed conversion of the land
in question 'as it will provide more economic benefits to the community in terms of outside
investments that will come and employment opportunities that will be generated by the
projects to be put up . . .'
"On the same score, it is represented that during the public consultation held at the Kisolan
Elementary School on 18 March 1995 with Director Jose Macalindong of DAR Central Office
and DECS Undersecretary Clemente, the people of the affected barangay rallied behind their
respective officials in endorsing the project.
"Notwithstanding the foregoing favorable recommendation, however, on November 14,
1994, the DAR, thru Secretary Garilao, invoking its powers to approve conversion of lands
under Section 65 of R.A. No. 6657, issued an Order denying the instant application for the
conversion of the subject land from agricultural to agro-industrial and, instead, placed the
same under the compulsory coverage of CARP and directed the distribution thereof to all
qualified beneficiaries on the following grounds:
"1.

The area is considered as a prime agricultural land with irrigation facility;

"2.

The land has long been covered by a Notice of Compulsory Acquisition (NCA);

"3.

The existing policy on withdrawal or lifting on areas covered by NCA is not applicable;

"4. There is no clear and tangible compensation package arrangements for the
beneficiaries;
"5. The procedures on how the area was identified and reclassified for agro-industrial
project has no reference to Memo Circular No. 54, Series of 1993, E.O. No. 72, Series of 1993,
and E.O. No. 124, Series of 1993. LLjur
"A Motion for Reconsideration of the aforesaid Order was filed on January 9, 1995 by
applicant but the same was denied (in an Order dated June 7, 1995)." 9

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10.
Thus, the DAR Secretary ordered the DAR Regional Director "to proceed with the
compulsory acquisition and distribution of the property." [x]10
11.
Governor Carlos O. Fortich of Bukidnon appealed [xi]11 the order of denial to the
Office of the President and prayed for the conversion/reclassification of the subject land as
the same would be more beneficial to the people of Bukidnon.
12.
To prevent the enforcement of the DAR Secretary's order, NQSRMDC, on June 29,
1995, filed with the Court of Appeals a petition for certiorari, prohibition with preliminary
injunction, [xii]12 docketed as CA-G.R. SP No. 37614.
13.
Meanwhile, on July 25, 1995, the Honorable Paul G. Dominguez, then Presidential
Assistant for Mindanao, after conducting an evaluation of the proposed project, sent a
memorandum [xiii]13 to the President favorably endorsing the project with a
recommendation that the DAR Secretary reconsider his decision in denying the application of
the province for the conversion of the land.
14.
Also, in a memorandum 14 to the President dated August 23, 1995, the Honorable
Rafael Alunan III, then Secretary of the Department of the Interior and Local Government
(DILG), recommended the conversion of the subject land to industrial/institutional use with
a request that the President "hold the implementation of the DAR order to distribute the land
in question."
15.
On October 23, 1995, the Court of Appeals, in CA-G.R. SP No. 37614, issued a
Resolution 15 ordering the parties to observe status quo pending resolution of the petition. At
the hearing held in said case on October 5, 1995, the DAR, through the Solicitor General,
manifested before the said court that the DAR was merely "in the processing stage of the
applications of farmers-claimants" and has agreed to respect status quo pending the
resolution of the petition. 16
16.
In resolving the appeal, the Office of the President, through then Executive Secretary
Ruben D. Torres, issued a Decision in OP Case No. 96-C-6424, dated March 29, 1996,
reversing the DAR Secretary's decision, the pertinent portions of which read:
"After a careful evaluation of the petition vis-a-vis the grounds upon which the denial thereof
by Secretary Garilao was based, we find that the instant application for conversion by the
Municipality of Sumilao, Bukidnon is impressed with merit. To be sure, converting the land in
question from agricultural to agro-industrial would open great opportunities for
employment and bring about real development in the area towards a sustained economic
growth of the municipality. On the other hand, distributing the land to would-be beneficiaries
(who are not even tenants, as there are none) does not guarantee such benefits.
"Nevertheless, on the issue that the land is considered a prime agricultural land with
irrigation facility it maybe appropriate to mention that, as claimed by petitioner, while it is
true that there is, indeed, an irrigation facility in the area, the same merely passes thru the
property (as a right of way) to provide water to the ricelands located on the lower portion
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thereof. The land itself, subject of the instant petition, is not irrigated as the same was, for
several years, planted with pineapple by the Philippine Packing Corporation.
"On the issue that the land has long been covered by a Notice of Compulsory Acquisition
(NCA) and that the existing policy on withdrawal or lifting on areas covered by NCA is not
applicable, suffice it to state that the said NCA was declared null and void by the Department
of Agrarian Reform Adjudication Board (DARAB) as early as March 1, 1992. Deciding in favor
of NQSRMDC, the DARAB correctly pointed out that under Section 8 of R.A. No. 6657, the
subject property could not validly be the subject of compulsory acquisition until after the
expiration of the lease contract with Del Monte Philippines, a Multi-National Company, or
until April 1994, and ordered the DAR Regional Office and the Land Bank of the Philippines,
both in Butuan City, to 'desist from pursuing any activity or activities covering petitioner's
land.
"On this score, we take special notice of the fact that the Quisumbing family has already
contributed substantially to the land reform program of the government, as follows: 300
hectares of rice land in Nueva Ecija in the 70's and another 400 hectares in the nearby
Municipality of Impasugong, Bukidnon, ten (10) years ago, for which they have not received
'just compensation' up to this time.
"Neither can the assertion that 'there is no clear and tangible compensation package
arrangements for the beneficiaries' hold water as, in the first place, there are no beneficiaries
to speak about, for the land is not tenanted as already stated.
"Nor can procedural lapses in the manner of identifying/reclassifying the subject property
for agro-industrial purposes be allowed to defeat the very purpose of the law granting
autonomy to local government units in the management of their local affairs. Stated more
simply, the language of Section 20 of R.A. No. 7160, supra, is clear and affords no room for
any other interpretation. By unequivocal legal mandate, it grants local government units
autonomy in their local affairs including the power to convert portions of their agricultural
lands and provide for the manner of their utilization and disposition to enable them to attain
their fullest development as self-reliant communities.
"WHEREFORE, in pursuance of the spirit and intent of the said legal mandate and in view of
the favorable recommendations of the various government agencies abovementioned, the
subject Order, dated November 14, 1994 of the Hon. Secretary, Department of Agrarian
Reform, is hereby SET ASIDE and the instant application of NQSRMDC/BAIDA is hereby
APPROVED." 17
17.

On May 20, 1996, DAR filed a motion for reconsideration of the OP decision.

18.
On September 11, 1996, in compliance with the OP decision of March 29, 1996,
NQSRMDC and the Department of Education, Culture and Sports (DECS) executed a
Memorandum of Agreement whereby the former donated four (4) hectares from the subject
land to DECS for the establishment of the NQSR High School. 18

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When NQSRMDC was about to transfer the title over the 4-hectare donated to DECS, it
discovered that the title over the subject property was no longer in its name. It soon found out that
during the pendency of both the Petition for Certiorari, Prohibition, with Preliminary Injunction it
filed against DAR in the Court of Appeals and the appeal to the President filed by Governor Carlos O.
Fortich, the DAR, without giving just compensation, caused the cancellation of NQSRMDC's title on
August 11, 1995 and had it transferred in the name of the Republic of the Philippines under TCT No.
T-50264 19 of the Registry of Deeds of Bukidnon. Thereafter, on September 25, 1995, DAR caused
the issuance of Certificates of Land Ownership Award (CLOA) No. 00240227 and had it registered
in the name of 137 farmer-beneficiaries under TCT No. AT-3536 20 of the Registry of Deeds of
Bukidnon.
19.
Thus, on April 10, 1997, NQSRMDC filed a complaint 21 with the Regional Trial Court
(RTC) of Malaybalay, Bukidnon (Branch 9), docketed as Civil Case No. 2687-97, for
annulment and cancellation of title, damages and injunction against DAR and 141 others. The
RTC then issued a Temporary Restraining Order on April 30, 1997 22and a Writ of
Preliminary Injunction on May 19, 1997, 23 restraining the DAR and 141 others from entering,
occupying and/or wresting from NQSRMDC the possession of the subject land.
20.
Meanwhile, on June 23, 1997, an Order 24 was issued by then Executive Secretary
Ruben D. Torres denying DAR's motion for reconsideration for having been filed beyond the
reglementary period of fifteen (15) days. The said order further declared that the March 29,
1996 OP decision had already become final andexecutory.
21.
The DAR filed on July 11, 1997 a second motion for reconsideration of the June 23,
1997 Order of the President.
22.
On August 12, 1997, the said writ of preliminary injunction issued by the RTC was
challenged by some alleged farmers before the Court of Appeals through a petition for
certiorari and prohibition, docketed as CA-G.R. SP No. 44905, praying for the lifting of the
injunction and for the issuance of a writ of prohibition from further trying the RTC case.
23.
On October 9, 1997, some alleged farmer-beneficiaries began their hunger strike in
front of the DAR Compound in Quezon City to protest the OP Decision of March 29, 1996. On
October 10, 1997, some persons claiming to be farmer-beneficiaries of the NQSRMDC
property filed a motion for intervention (styled as Memorandum In Intervention) in O.P. Case
No. 96-C-6424, asking that the OP Decision allowing the conversion of the entire 144-hectare
property be set aside. 25
24.
President Fidel V. Ramos then held a dialogue with the strikers and promised to
resolve their grievance within the framework of the law. He created an eight (8)-man Fact
Finding Task Force (FFTF) chaired by Agriculture Secretary Salvador Escudero to look into
the controversy and recommend possible solutions to the problem. 26
25.
On November 7, 1997, the Office of the President resolved the strikers' protest by
issuing the so-called "Win/Win" Resolution penned by then Deputy Executive Secretary
Renato C. Corona, the dispositive portion of which reads:
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"WHEREFORE, premises considered, the decision of the Office of the President, through
Executive Secretary Ruben Torres, dated March 29, 1996, is hereby MODIFIED as follows:
"1.
NQSRMDC's application for conversion is APPROVED only with respect to the
approximately forty-four (44) hectare portion of the land adjacent to the highway, as
recommended by the Department of Agriculture.
"2.
The remaining approximately one hundred (100) hectares traversed by an irrigation
canal and found to be suitable for agriculture shall be distributed to qualified farmerbeneficiaries in accordance with RA 6657 or the Comprehensive Agrarian Reform Law with a
right of way to said portion from the highway provided in the portion fronting the highway.
For this purpose, the DAR and other concerned government agencies are directed to
immediately conduct the segregation survey of the area, valuation of the property and
generation of titles in the name of the identified farmer-beneficiaries.
"3.
The Department of Agrarian Reform is hereby directed to carefully and meticulously
determine who among the claimants are qualified farmer-beneficiaries.
"4.
The Department of Agrarian Reform is hereby further directed to expedite payment of
just compensation to NQSRMDC for the portion of the land to be covered by the CARP,
including other lands previously surrendered by NQSRMDC for CARP coverage.
"5.
The Philippine National Police is hereby directed to render full assistance to the
Department of Agrarian Reform in the implementation of this Order.
"We take note of the Memorandum in Intervention filed by 113 farmers on October 10, 1997
without ruling on the propriety or merits thereof since it is unnecessary to pass upon it at
this time.
"SO ORDERED." 27
A copy of the "Win-Win" Resolution was received by Governor Carlos O. Fortich of Bukidnon,
Mayor Rey B. Baula of Sumilao, Bukidnon, and NQSRMDC on November 24, 1997 28 and, on
December 4, 1997, they filed the present petition for certiorari, prohibition (under Rule 65 of the
Revised Rules of Court) and injunction with urgent prayer for a temporary restraining order and/or
writ of preliminary injunction (under Rule 58, ibid.), against then Deputy Executive Secretary
Renato C. Corona and DAR Secretary Ernesto D. Garilao.
On December 12, 1997, a Motion For Leave To Intervene 29 was filed by alleged farmerbeneficiaries, through counsel, claiming that they are real parties in interest as they were
"previously identified by respondent DAR as agrarian reform beneficiaries on the 144-hectare"
property subject of this case. The motion was vehemently opposed 30 by the petitioners.
In seeking the nullification of the "Win-Win" Resolution, the petitioners claim that the Office of
the President was prompted to issue the said resolution "after a very well-managed hunger strike
led by fake farmer-beneficiary Linda Ligmon succeeded in pressuring and/or politically
blackmailing the Office of the President to come up with this purely political decision to appease the
'farmers,' by reviving and modifying the Decision of 29 March 1996 which has been declared final
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and executory in an Order of 23 June 1997 . . ." 31 Thus, petitioners further allege, respondent then
Deputy Executive Secretary Renato C. Corona "committed grave abuse of discretion and acted
beyond his jurisdiction when he issued the questioned Resolution of 7 November 1997. . ." 32 They
availed of this extraordinary writ of certiorari "because there is no other plain, speedy and
adequate remedy in the ordinary course of law." 33 They never filed a motion for reconsideration of
the subject Resolution "because (it) is patently illegal or contrary to law and it would be a futile
exercise to seek a reconsideration . . ." 34
The respondents, through the Solicitor General, opposed the petition and prayed that it be
dismissed outright on the following grounds:
(1)
The proper remedy of petitioners should have been to file a petition for review
directly with the Court of Appeals in accordance with Rule 43 of the Revised Rules of Court;
(2)
The petitioners failed to file a motion for reconsideration of the assailed "Win-Win"
Resolution before filing the present petition; and
(3)

Petitioner NQSRMDC is guilty of forum-shopping.

These are the preliminary issues which must first be resolved, including the incident on the
motion for intervention filed by the alleged farmer-beneficiaries.
Anent the first issue, in order to determine whether the recourse of petitioners is proper or not,
it is necessary to draw a line between an error of judgment and an error of jurisdiction. An error of
judgment is one which the court may commit in the exercise of its jurisdiction, and which error is
reviewable only by an appeal. 35 On the other hand, an error of jurisdiction is one where the act
complained of was issued by the court, officer or a quasi-judicial body without or in excess of
jurisdiction, or with grave abuse of discretion which is tantamount to lack or in excess of
jurisdiction. 36 This error is correctable only by the extraordinary writ of certiorari. 37
It is true that under Rule 43, appeals from awards, judgments, final orders or resolutions of any
quasi-judicial agency exercising quasi-judicial functions, 38 including the Office of the
President, 39 may be taken to the Court of Appeals by filing a verified petition for review 40 within
fifteen (15) days from notice of the said judgment, final order or resolution, 41 whether the appeal
involves questions of fact, of law, or mixed questions of fact and law. 42
However, we hold that, in this particular case, the remedy prescribed in Rule 43 is inapplicable
considering that the present petition contains an allegation that the challenged resolution is
"patently illegal" 43 and was issued with "grave abuse of discretion" and "beyond his (respondent
Secretary Renato C. Corona's) jurisdiction" 44 when said resolution substantially modified the
earlier OP Decision of March 29, 1996 which had long become final and executory. In other words,
the crucial issue raised here involves an error of jurisdiction, not an error of judgment which is
reviewable by an appeal under Rule 43. Thus, the appropriate remedy to annul and set aside the
assailed resolution is an original special civil action for certiorari under Rule 65, as what the
petitioners have correctly done. The pertinent portion of Section 1 thereof provides:

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"SEC. 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, or 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 be
rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting
such incidental reliefs as law and justice may require.
xxx

xxx

xxx."

The office of a writ of certiorari is restricted to truly extraordinary cases cases in which the
act of the lower court or quasi-judicial body is wholly void. 45
The aforequoted Section 1 of Rule 65 mandates that the person aggrieved by the assailed illegal
act "may file a verified petition (for certiorari) in the proper court." The proper court where the
petition must be filed is stated in Section 4 of the same Rule 65 which reads:
"SEC. 4.

Where petition filed. The petition may be filed not later than sixty (60) days from

notice of the judgment, order or resolution sought to be assailed in the Supreme Court or, if it
relates to the acts or omissions of a lower court or of a corporation, board, officer or person, in the
Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme
Court. It may also be filed in the Court of Appeals whether or not the same is in aid of its appellate
jurisdiction, or in the Sandiganbayan if it is in aid of its jurisdiction. If it involves the acts or
omissions of a quasi-judicial agency, and unless otherwise provided by law or these Rules, the
petition shall be filed in and cognizable only by the Court of Appeals. (4a)"
Under the above-quoted Section 4, the Supreme Court, Court of Appeals and Regional Trial
Court have original concurrent jurisdiction to issue a writ of certiorari, 46prohibition 47 and
mandamus. 48 But the jurisdiction of these three (3) courts are also delineated in that, if the
challenged act relates to acts or omissions of a lower court or of a corporation, board, officer or
person, the petition must be filed with the Regional Trial Court which exercises jurisdiction over
the territorial area as defined by the Supreme Court. And if it involves the act or omission of a
quasi-judicial agency, the petition shall be filed only with the Court of Appeals, unless otherwise
provided by law or the Rules of Court. We have clearly discussed this matter of concurrence of
jurisdiction in People vs. Cuaresma, et. al.,49 through now Chief Justice Andres R. Narvasa, thus:
". . . This Court's original jurisdiction to issue writs of certiorari (as well as
prohibition,mandamus, quo warranto, habeas corpus and injunction) is not exclusive. It is shared by
this Court with Regional Trial Courts (formerly Courts of First Instance), which may issue the writ,
enforceable in any part of their respective regions. It is also shared by this Court, and by the

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Regional Trial Court, with the Court of Appeals (formerly, Intermediate Appellate Court), although
prior to the effectivity of Batas Pambansa Bilang 129 on August 14, 1981, the latter's competence to
issue the extraordinary writs was restricted to those 'in aid of its appellate jurisdiction.' 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 should also serve 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." (Citations
omitted)
But the Supreme Court has the full discretionary power to take cognizance of the petition filed
directly to it if compelling reasons, or the nature and importance of the issues raised, warrant. This
has been the judicial policy to be observed and which has been reiterated in subsequent cases,
namely: 50 Uy vs. Contreras, et. al., 51 Torres vs. Arranz, 52Bercero vs. De Guzman, 53 and Advincula
vs. Legaspi, et. al. 54 As we have further stated in Cuaresma:
". . . 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 established policy. It is a policy that is 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."
Pursuant to said judicial policy, we resolve to take primary jurisdiction over the present
petition in the interest of speedy justice 55 and to avoid future litigations so as to promptly put an
end to the present controversy which, as correctly observed by petitioners, has sparked national
interest because of the magnitude of the problem created by the issuance of the assailed resolution.
Moreover, as will be discussed later, we find the assailed resolution wholly void and requiring the
petitioners to file their petition first with the Court of Appeals would only result in a waste of time
and money.
That the Court has the power to set aside its own rules in the higher interests of justice is wellentrenched in our jurisprudence. We reiterate what we said in Piczon vs.Court of Appeals: 56
"Be it remembered that rules of procedure are but mere tools designed to facilitate the attainment
of justice. Their strict and rigid application, which would result in technicalities that tend to
frustrate rather than promote substantial justice, must always be avoided. Time and again, this
Court has suspended its own rules and excepted a particular case from their operation whenever

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the higher interests of justice so require. In the instant petition, we forego a lengthy disquisition of
the proper procedure that should have been taken by the parties involved and proceed directly to
the merits of the case."
As to the second issue of whether the petitioners committed a fatal procedural lapse when they
failed to file a motion for reconsideration of the assailed resolution before seeking judicial recourse,
suffice it to state that the said motion is not necessary when the questioned resolution is a patent
nullity, 57 as will be taken up later.
With respect to the third issue, the respondents claim that the filing by the petitioners of: (a) a
petition for certiorari, prohibition with preliminary injunction (CA-G.R. SP No. 37614) with the
Court of Appeals; (b) a complaint for annulment and cancellation of title, damages and injunction
against DAR and 141 others (Civil Case No. 2687-97) with the Regional Trial Court of Malaybalay,
Bukidnon; and (c) the present petition, constitute forum shopping.
We disagree.
The rule is that:
"There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a
favorable opinion (other than by appeal or certiorari) in another. The principle applies not only
with respect to suits filed in the courts but also in connection with litigation commenced in the
courts while an administrative proceeding is pending, as in this case, in order to defeat
administrative processes and in anticipation of an unfavorable administrative ruling and a
favorable court ruling. This specially so, as in this case, where the court in which the second suit
was brought, has no jurisdiction (citations omitted).
"The test for determining whether a party violated the rule against forum shopping has been laid
down in the 1986 case of Buan vs. Lopez (145 SCRA 34), . . . and that is, forum shopping exists where
the elements of litis pendentia are present or where a final judgment in one case will amount to res
judicata in the other, as follows:
'There thus exists between the action before this Court and RTC Case No. 86-36563 identity of
parties, or at least such parties represent the same interests in both actions, as well as identity of
rights asserted and relief prayed for, the relief being founded on the same facts, and the identity on
the two preceding particulars is such that any judgment rendered in the other action,will, regardless
of which party is successful, amount to res adjudicata in the action under consideration: all the
requisites, in fine, of auter action pendant.'" 58
It is clear from the above-quoted rule that the petitioners are not guilty of forum shopping. The
test for determining whether a party has violated the rule against forum shopping is where a final
judgment in one case will amount to res adjudicata in the action under consideration. A cursory
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examination of the cases filed by the petitioners does not show that the said cases are similar with
each other. The petition for certiorari in the Court of Appeals sought the nullification of the DAR
Secretary's order to proceed with the compulsory acquisition and distribution of the subject
property. On the other hand, the civil case in RTC of Malaybalay, Bukidnon for the annulment and
cancellation of title issued in the name of the Republic of the Philippines, with damages, was based
on the following grounds: (1) the DAR, in applying for cancellation of petitioner NQSRMDC's title,
used documents which were earlier declared null and void by the DARAB; (2) the cancellation of
NQSRMDC's title was made without payment of just compensation; and (3) without notice to
NQSRMDC for the surrender of its title. The present petition is entirely different from the said two
cases as it seeks the nullification of the assailed "Win-Win" Resolution of the Office of the President
dated November 7, 1997, which resolution was issued long after the previous two cases were
instituted.
The fourth and final preliminary issue to be resolved is the motion for intervention filed by
alleged farmer-beneficiaries, which we have to deny for lack of merit. In their motion, movants
contend that they are the farmer-beneficiaries of the land in question, hence, are real parties in
interest. To prove this, they attached as Annex "I" in their motion a Master List of FarmerBeneficiaries. Apparently, the alleged master list was made pursuant to the directive in the
dispositive portion of the assailed "Win-Win" Resolution which directs the DAR "to carefully and
meticulously determine who among the claimants are qualified farmer-beneficiaries." However, a
perusal of the said document reveals that movants are those purportedly "Found Qualified and
Recommended for Approval." In other words, movants are merely recommendee farmerbeneficiaries.
The rule in this jurisdiction is that a real party in interest is a party who would be benefited or
injured by the judgment or is the party entitled to the avails of the suit. Real interest means
a present substantial interest, as distinguished from a mere expectancy or a future, contingent,
subordinate or consequential interest. 59 Undoubtedly, movants' interest over the land in question
is a mere expectancy. Ergo, they are not real parties in interest.
Furthermore, the challenged resolution upon which movants based their motion is, as
intimated earlier, null and void. Hence, their motion for intervention has no leg to stand on.
Now to the main issue of whether the final and executory Decision dated March 29, 1996 can
still be substantially modified by the "Win-Win" Resolution.
We rule in the negative.
The rules and regulations governing appeals to the Office of the President of the Philippines are
embodied in Administrative Order No. 18. Section 7 thereof provides:
"SEC. 7.

Decisions/resolutions/orders of the Office of the President shall, except as otherwise

provided for by special laws, become final after the lapse of fifteen (15) days from receipt of a copy
thereof by the parties, unless a motion for reconsideration thereof is filed within such period.

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"Only one motion for reconsideration by any one party shall be allowed and entertained, save in
exceptionally meritorious cases." (Emphasis ours)

It is further provided for in Section 9 that "The Rules of Court shall apply in a suppletory
character whenever practicable."
When the Office of the President issued the Order dated June 23, 1997 declaring the Decision of
March 29, 1996 final and executory, as no one has seasonably filed a motion for reconsideration
thereto, the said Office had lost its jurisdiction to re-open the case, more so modify its Decision.
Having lost its jurisdiction, the Office of the President has no more authority to entertain
the second motion for reconsideration filed by respondent DAR Secretary, which second motion
became the basis of the assailed "Win-Win" Resolution. Section 7 of Administrative Order No. 18
and Section 4, Rule 43 of the Revised Rules of Court mandate that only one (1) motion for
reconsideration is allowed to be taken from the Decision of March 29, 1996. And even if a second
motion for reconsideration was permitted to be filed in "exceptionally meritorious cases," as
provided in the second paragraph of Section 7 of AO 18, still the said motion should not have been
entertained considering that the first motion for reconsideration was not seasonably filed, thereby
allowing the Decision of March 29, 1996 to lapse into finality. Thus, the act of the Office of the
President in re-opening the case and substantially modifying its March 29, 1996 Decision which had
already become final and executory, was in gross disregard of the rules and basic legal precept that
accord finality to administrative determinations.
In San Luis, et al. vs. Court of Appeals, et al. 60 we held:
"Since the decisions of both the Civil Service Commission and the Office of the President had long
become final and executory, the same can no longer be reviewed by the courts. It is well-established
in our jurisprudence that the decisions and orders of administrative agencies, rendered pursuant to
their quasi-judicial authority, have upon their finality, the force and binding effect of a final
judgment within the purview of the doctrine of res judicata [Brillantes v. Castro, 99 Phil. 497
(1956), Ipekdijna Merchandising Co., Inc. v. Court of Tax Appeals, G.R. No. L-15430, September 30,
1963, 9 SCRA 72.] The rule of res judicata which forbids the reopening of a matter once judicially
determined by competent authority applies as well to the judicial and quasi-judicial acts of public,
executive or administrative officers and boards acting within their jurisdiction as to the judgments
of courts having general judicial powers [Brillantes v. Castro,supra at 503]."
The orderly administration of justice requires that the judgments/resolutions of a court or
quasi-judicial body must reach a point of finality set by the law, rules and regulations. The noble
purpose is to write finis to disputes once and for all. 61 This is a fundamental principle in our justice
system, without which there would be no end to litigations. Utmost respect and adherence to this

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principle must always be maintained by those who wield the power of adjudication. Any act which
violates such principle must immediately be struck down.
Therefore, the assailed "Win-Win" Resolution which substantially modified the Decision of
March 29, 1996 after it has attained finality, is utterly void. Such void resolution, as aptly stressed
by Justice Thomas A. Street 62 in a 1918 case, 63 is "a lawless thing, which can be treated as an outlaw
and slain at sight, or ignored wherever and whenever it exhibits its head." 64
WHEREFORE, the present petition is hereby GRANTED. The challenged Resolution dated
November 7, 1997, issued by the Office of the President in OP Case No. 96-C-6424, is hereby
NULLIFIED and SET ASIDE. The Motion For Leave To Intervene filed by alleged farmer-beneficiaries
is hereby DENIED.
No pronouncement as to costs.
SO ORDERED.
Regalado, Melo, Puno and Mendoza, JJ ., concur.
Footnotes
1.

Annex "AA," Petition; Rollo, pp. 163-167.

2.

Annex "A," Petition; Ibid., pp. 48-63.

3.

Annex "B," Petition; Rollo, pp. 64-65.

4.

Par. 12, Petition; Ibid., p. 6.

5.

Annex "C," Petition; ibid., pp. 66-67.

6.

Annex "D," Petition; ibid., p. 68.

7.

Annexes "E," "F" and "G," Petition; ibid., pp. 69-71.

8.

Annex "H," Petition; Ibid., p. 72.

9.

Annex AA," Petition; Ibid., pp. 163-166.

10.

Annex "S," Petition; Ibid., p. 113.

11.

Annex "T," Petition; Ibid., pp. 115-120.

12.

Annex "U," Petition; Ibid., pp. 121-146.

13.

Annexes "V" and "V-1," Petition; Ibid., pp. 147-150.

14.

Annex "W," Petition; Ibid., pp. 151-153.

15.

Annex "X," Petition; Ibid., pp. 154-156.

16.

Annex "Y," Petition; Ibid., pp. 157-158.

17.

Ibid., pp. 166-167

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18.
Par. 37, Petition, rollo, pp. 14-15.
19.

Annex "BB," Petition; Ibid., p. 168.

20.

Annex "CC," Petition; Ibid., pp. 169-176.

21.

Annex "DD," Petition; Ibid., pp. 177-189.

22.

Annex "EE," Petition; Rollo, pp. 190-191.

23.

Annex "GG," Petition; Ibid., pp. 193-194.

24.

Annex "FF," Petition; Ibid., p. 192.

25.

Par. 17, Respondents' Comment, rollo, p. 532.

26.

Par. 18, ibid., p. 533.

27.

Rollo, pp. 61-62.

28.

Par. 3, Petition; Ibid., p. 4.

29.

Rollo, pp. 195-200.

30.

Ibid., pp. 280-282

31.

Petition, ibid., p. 17.

32.

Ibid., p. 18.

33.

Ibid., p. 4.

34.

Ibid., p. 5.

35.

Fernando vs. Vasquez, et. al., 31 SCRA 288.

36.

Ibid; Section 1, Rule 65, Revised Rules of Court.

37.

Ibid.

38.
Except those issued under the Labor Code of the Philippines (Sec. 2, Rule 43, Revised Rules of
Court).
39.

Section 1, Rule 43, Revised Rules of Court.

40.

Sections 3 & 5, ibid.

41.

Section 4, ibid.

42.

Section 3, ibid.

43.

Petition, rollo, p. 5.

44.

Ibid., p. 18.

45.

Fernando vs. Vasquez, et al., 31 SCRA 288.

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46.
Section 1, Rule 65, Revised Rules of Court; People vs. Cuaresma, et. al., 172 SCRA 415, 423;
Vergara, Sr. vs. Suelto, et. al., 156 SCRA 753, 766.
47.

Section 2, ibid.

48.

Section 3, ibid.

49.

Supra.

50.

Cited in Regalado, Remedial Law Compendium, Vol. One, 1997 edition, p. 721.

51.

G.R. Nos. 111416-17, Sept. 26, 1994.

52.

G.R. No. 123352, Feb. 7, 1996.

53.

G.R. No. 123573, Feb. 28, 1996.

54.

G.R. No. 125500, Aug. 7, 1996.

55.

Eugenio vs. Drilon, et. al., G.R. No. 109404, Jan. 22, 1996; 252 SCRA 106, 110.

56.

190 SCRA 31, 38.

57.
Vigan Electric Light Co., Inc. vs. Public Service Commission, L-19850, Jan. 30, 1964; Luzon
Surety Co. vs. Marbella, et al., L-16088, Sept. 30, 1960; Dir. Of Lands vs. Santamaria, 44 Phil. 594, all
cited in Regalado, Remedial Law Compendium, supra, p. 710.
58.
First Philippine International Bank, et. al. vs. Court of Appeals, et. al., 252 SCRA 259, 283 (Jan.
24, 1996).
59.

Garcia vs. David, 67 Phil. 27.

60.

174 SCRA 258, 271.

61.

Legarda, et al. vs. Savellano, et al., 158 SCRA 194, 200.

62.

One of the first Justices of the Supreme Court of the Philippines.

63.

El Banco Espaol-Filipino vs. Palanca, 37 Phil. 921.

64.

Ibid., at p. 949.

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#22 UDK NO. 9864

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.

Dulcesimo P. Tampus for petitioner.

Alan L. Flores for private respondents.

SYLLABUS

1.
REMEDIAL LAW; JURISDICTION, ORIGINAL AND EXCLUSIVE; OVER CASES INVOLVING
AGRARIAN LAWS; VESTED IN THE AGRARIAN REFORM ADJUDICATORY BOARD OF THE
DEPARTMENT OF AGRARIAN REFORM. The jurisdiction 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. 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. (Rules of the DAR Adjudication Board,
which took effect on March 8, 1988) 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
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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 . . . "
2.
ID.; ID.; OVER TWO GROUPS OF CASES; RESTORED TO THE REGIONAL TRIAL COURTS
AS SPECIAL AGRARIAN COURTS. Republic Act No. 6657, 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.
More particularly, the Act echoes the provisions of Section 17 of Presidential Decree No. 229,
investing the Department of Agrarian Reform with original jurisdiction, generally, over all
cases involving agrarian laws, although it restores to the Regional Trial Court, limited
jurisdiction over two groups of cases. 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 Court," 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."
3.
ID.; APPEAL; CASES INVOLVING AGRARIAN DISPUTES; PROCEDURE, FOLLOWED. 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, . . ." (Sec. 60) 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 certiorari
(This mode of appeal is sui generis. It is only instance when an appeal by certiorari may be
taken to the Court of Appeals. Heretofore, appeals by certiorari were authorized only when
taken to the Supreme Court) 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." (Sec. 54)

DECISION

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NARVASA, J p:
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.
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 tereon.
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."
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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)
xxx
(j)

xxx

xxx

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:
"(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;
xxx
(h)

xxx

Provide free legal service to agrarian reform beneficiaries and resolve agrarian conflicts and

land tenure related problems as may be provided for by laws;

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(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:
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"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.
xxx

xxx

xxx

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 certiorari 11 except as otherwise provided . . . within fifteen (15) days
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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 quasijudicial 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:
"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.
Cruz, Gancayco, Grio-Aquino and Medialdea, JJ ., concur.
Footnotes
1.
The case was docketed as Agrarian Case No. 1094, assigned to Branch 4 of the RTC at Iligan
City, Lanao del Norte, presided over by Hon. Felipe G. Javier, Jr.
2.

Rollo, pp. 9-16.

3.

Id., pp. 24-28.

4.
In CA-G.R. SP. No. 16725, assigned to the Fifth Division, the ponente being Francisco, J., with
whom concurred Martinez and Elbinias, JJ.
5.

Rollo, p. 38.

6.
The "original and exclusive jurisdiction" of the CAR under SEC. 12, PD 946 extended to cases
or questions involving rights and obligations in the cultivation and use of agricultural land or
arising from laws, Presidential Decrees, Orders, Instructions, Rules and Regulations in relation to
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the agrarian reform program; the collection of amortizations on payments for farm equipment,
irrigation systems or water right grants, or rentals affecting tenants-farmers, agricultural lessees,
settlers, owner-cultivators, farms' cooperatives or organizations; the annulment or rescission of
lease contracts and sales pertaining to agricultural lands; boundary disputes; membership in the
Samahang Nayon, etc.
7.

Rules of the DAR Adjudication Board, which took effect on March 8, 1988.

8.
SEC. 4 states that the CARP covers all agricultural lands, regardless of tenurial arrangement
and commodity produced as provided in Proclamation No. 131 and Executive Order No. 229. SEC.
14 accords effect to the registration of landowners made pursuant to said EO 229. SEC. 47
enumerates the functions of the BARC (Barangay Agrarian Reform Committee) which shall be in
addition to those provided in EO 229. SEC. 63 provides that the initial finding for the
implementation of the Act shall be taken from the Agrarian Reform Fund created under Secs. 20
and 21 of EO 229. SEC. 75 declares that EO 229, together with RA 3844 as amended, PD Nos. 27 and
266 as amended, and EO 228 and other laws not inconsistent with the Act, "shall have suppletory
effect."
9.
"Agrarian reform," according to SEC. 3 of RA 6657, means redistribution of lands, regardless
of crops or fruits produced, to farmers and regular farmworkers who are landless, irrespective of
tenurial arrangement, to include the totality of factors and support services designed to lift the
economic status of the beneficiaries and all other arrangements alternative to physical
redistribution of lands, such as production or profit-sharing, labor administration, and the
distribution of shares of stock, which will allow beneficiaries to receive a just share of the fruits of
the lands they work." "Agrarian dispute," in the context of the DAR's power to "hear and decide all
cases, disputes or controversies" set out in the second paragraph of SEC. 50, "refers," according to
the same SEC. 3, "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.," including "any controversy
relating to compensation of lands acquired under . . .(the) Act and other terms and conditions of
transfer of ownership from landowners to farm-workers 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."
10.

Sec. 60.

11.
This mode of appeal is sui generis. It is the only instance when an appeal by certiorari may be
taken to the Court of Appeals. Heretofore, appeals by certiorari were authorized only when taken to
the Supreme Court.
12.

Sec. 54.

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#23 G.R. NO. 154112

THIRD DIVISION

[G.R. No. 154112. September 23, 2004.]

DEPARTMENT OF AGRARIAN REFORM, petitioner, 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.

DECISION

PANGANIBAN, J p:
All controversies on the implementation of the Comprehensive Agrarian Reform Program
(CARP) fall under the jurisdiction of the Department of Agrarian Reform (DAR), even though they
raise questions 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.

The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of Court, assailing the March 15,
2002 Decision 2 and the June 18, 2002 Resolution 3 of the Court of Appeals in CA-GR SP No. 58536.
In the challenged Decision, the CA disposed as follows:
"As previously stated, the principal issue raised in the court below involves a pure question
of law. Thus, it being clear that the court a quo has jurisdiction over the nature and subject
matter of the case below, it did not commit grave abuse of discretion when it issued the
assailed order denying petitioner's motion to dismiss and granting private respondent's
application for the issuance of a writ of preliminary injunction.
"WHEREFORE, premises considered, the petition is denied due course and is accordingly
DISMISSED." 4
The assailed Resolution, on the other hand, denied petitioner's Motion for Reconsideration.

The Facts
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The CA narrated the facts as follows:
"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. SaITHC
"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.
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"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
forcertiorari 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. AaITCS
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
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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

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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 1267 11 "[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
Instance 12 (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: . . .
"(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: . . ." 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: EScAHT
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; . . .;
b) Questions involving rights granted and obligations imposed by laws, Presidential
Decrees, Orders, Instructions, Rules and Regulations issued and promulgated in relation to
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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)

. . .;

(3)

parcellary mapping;

(4)

. . .;

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 44 14 of Batas Pambansa Blg.
129 15 (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 "quasijudicial 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:
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"(b) Implement all agrarian laws, and for this purpose, punish for contempt and
issuesubpoena, 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 . . ."
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:
". . . 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
'. . . [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 . . . (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 . . ." 20
In the same case, the Court also held that the jurisdictional competence of the DAR had further
been clarified by RA 6657 thus:
". . . 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
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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 . . . [the] Act.'"

The above delineation of jurisdiction remains in place to this date. Administrative Circular No.
29-2002 23 of this Court stresses the distinction between the quasi-judicialpowers 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 Complaint 24 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
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[respondent] should have commenced and [been] completed between June 1988 to June 1992 as
provided for in CARL, to wit: . . .;
"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 . . .;
xxx
xxx
xxx
"9. Under the provisions of CARL, it is the PARC and/or the DAR, and not . . . Land Bank,
which is authorized to preliminarily determine the value of the lands as compensation
therefor, thus . . .;
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) . . .;"
"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, . .
.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 405 27 ). 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

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To be sure, the issuance of the Notice of Coverage 29 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-judicialjurisdiction 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.
Sandoval-Gutierrez, Corona and Carpio Morales, JJ ., concur.
Footnotes
1.

Rollo, pp. 927.

2.
Penned by Justice Wenceslao I. Agnir Jr. and concurred in by Justices B. A. Adefuin-de la Cruz
(chair, Twelfth Division) and Josefina Guevara-Salonga.
3.

Rollo, pp. 3940.

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4.
CA Decision, p. 7; id., p. 36.
5.

Id., pp. 14 & 3033.

6.
The Petition was deemed submitted for decision on June 18, 2003, upon the Court's receipt of
petitioner's Supplemental Memorandum signed by Atty. Girlie B. Rocha of the Bureau of Agrarian
Legal Assistance, Department of Agrarian Reform. Petitioner filed its Memorandum, also signed by
Atty. Rocha, on May 22, 2003; while the Court received private respondent's Memorandum signed
by Atty. Jose J. Diaz on June 4, 2003.
7.

Petitioner's Memorandum, p. 5; rollo, p. 161. Original in upper case.

8.
Alemar's (Sibal & Sons), Inc. v. CA, 350 SCRA 333, 339, January 26, 2001; Saura v. Saura Jr.,
313 SCRA 465, 472, September 1, 1999; Salva v. CA, 364 Phil. 281, 303, March 11, 1999.
9.
Unilongo v. CA, 365 Phil. 105, 114, April 5, 1999; Abrin v. Campos, 203 SCRA 420, 423,
November 12, 1991; Spouses De la Cruz v. Bautista, 186 SCRA 517, 525, June 14, 1990.
10.

Unilongo v. CA, supra; Garcia v. CA, 339 Phil. 433, 441442, June 10, 1997.

11.

June 14, 1955.

12.

Section 155 of RA 3844 provides:

"Sec. 155.
Powers of the Court; Rules and Procedures. The Courts of Agrarian
Relations shall have all the powers and prerogatives inherent in or belonging to the Court of First
Instance.
"The Courts of Agrarian Relations shall be governed by the Rules of Court: Provided,
That in the hearing, investigation and determination of any question or controversy pending before
them, the Courts without impairing substantial rights, shall not be bound strictly by the technical
rules of evidence and procedure, except in expropriation cases."
13.

Section 154 of RA 3844.

14.

Section 44 of BP 129 reads:

"Sec. 44.
Transitory provisions. The provisions of this Act shall be immediately
carried out in accordance with an Executive Order to be issued by the President. The Court of
Appeals, the Courts of First Instance, the Circuit Criminal Courts, the Juvenile and Domestic
Relations Courts, the Courts of Agrarian Relations, the City Courts, the Municipal Courts, and the
Municipal Circuit Courts shall continue to function as presently constituted and organized, until the
completion of the reorganization provided in this Act as declared by the President. Upon such
declaration, the said courts shall be deemed automatically abolished and the incumbents thereof shall
cease to hold office. The cases pending in the old Courts shall be transferred to the appropriate
Courts constituted pursuant to this Act, together with the pertinent functions, records, equipment,
property and the necessary personnel.
xxx

xxx

xxx" (Italics supplied)

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15.
Otherwise known as the Judiciary Reorganization Act.
16.
Section 19(7) of BP 129. See also Pagara v. CA, 325 Phil. 66, 80, March 12, 1996;
andPhilippine National Bank v. Florendo, 206 SCRA 582, 587, February 26, 1992.
17.
Providing the Mechanisms for the Implementation of the Comprehensive Agrarian Reform
Program.
18.
201 SCRA 609, 613614, September 13, 1991, per Regalado, J. (cited in Machete v. CA, 320
Phil. 227, 233234, November 20, 1995).
19.

191 SCRA 885, December 3, 1990.

20.

Id., pp. 888890, per Narvasa, J. (later CJ).

21.

Id., pp. 890892.

22.

Id., p. 892; Machete v. CA, supra, p. 235.

23.
Issued on July 1, 2002. The Circular seeks the avoidance of conflict of jurisdiction over cases
under the Comprehensive Agrarian Reform Law of 1988 (RA No. 6657).
24.
The case caption is "Annulment of Notice of Coverage and Declaration of Unconstitutionality
of E.O. No. 405, Series of 1990 with Preliminary Injunction and Restraining Order." Rollo, pp. 40-A
to 53.
25.

Complaint, pp. 37; rollo, pp. 4145.

26.

Id., pp. 56 & 4344.

27.

The pertinent provisions of EO 405 provide:

"Sec. 1.
The Land Bank of the Philippines shall be primarily responsible for the
determination of the land valuation and compensation for all private lands suitable for agriculture
under either the Voluntary Offer to Sell (VOS) or Compulsory Acquisition (CA) arrangement as
governed by Republic Act No. 6657. The Department of Agrarian Reform shall make use of the
determination of the land valuation and compensation by the Land Bank of the Philippines, in the
performance of its functions.
After effecting the transfer of titles from the landowner to the Republic of the
Philippines, the Land Bank of the Philippines shall inform the Department of Agrarian Reform of
such fact in order that the latter may proceed with the distribution of the lands to the qualified
agrarian reform beneficiaries within the time specified by law.
"Sec. 2.
The Department of Agrarian Reform shall continue to perform its functions
under Republic Act No. 6657, particularly in the identification of the priority landholdings for
coverage under the Comprehensive Agrarian Reform Program.
xxx

xxx

xxx

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"Sec. 4.
This Executive Order shall not be construed to diminish the rights and
remedies of the landowners and agrarian reform beneficiaries under Republic Act No. 6657."
28.
Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175
SCRA 343, 380, July 14, 1989. See also Section 57 of RA 6657 regarding the jurisdiction of the
Special Agrarian Courts.
29.
Section 16 of RA 6657 outlines the procedure for acquisition of private lands. The pertinent
provisions provide:
"(a)
After having identified the land, the landowners and the beneficiaries, the
DARshall 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 a
corresponding value in accordance with the valuation set forth in Sections 17, and 18, and other
pertinent provisions hereof."
xxx

xxx

xxx

"(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 evidence as to the just compensation for the land,
within fifteen (15) days from the 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." (Italics supplied)
30.

Villaflor v. CA, 345 Phil. 524, 559, October 9, 1997, per Panganiban, J.

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#24 G.R. NO. 132767

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.

DECISION

MENDOZA, J p:
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 order 2 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.
Section 51 of Republic Act No. 6657 provides:
SECTION 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
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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.
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 the following:
xxx
b)

xxx

xxx

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 Special Agrarian Courts within fifteen (15) days from 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.
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
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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:
SECTION 50.

Quasi-Judicial Power 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) . . . .
SECTION 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
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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 and Preliminary 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.
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SO ORDERED.
Bellosillo, Quisumbing, Buena and De Leon, Jr., JJ ., concur.
Footnotes
1.
Per Justice Conrado M. Vasquez, Jr. and concurred in by Justices Consuelo Ynares-Santiago
(now Associate Justice of the Supreme Court), and Demetrio G. Demetria.
2.

Dated February 23, 1995; RTC Records, pp. 54-55.

3.

CA Decision, pp. 3-4; Rollo, pp. 27-28.

4.

Quismundo v. Court of Appeals, 201 SCRA 609 (1991).

5.

R.A. No. 6657, 16(a).

6.

Id., 16(b).

7.

Id., 16(d).

8.

Id., 16(f) in relation to 57.

9.

263 SCRA 750 (1996).

10.

See San Miguel Brewery v. Secretary of Labor, 64 SCRA 56 (1975).

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#25 G.R. NO. 175175

SECOND DIVISION
LAND BANK OF THE PHILIPPINES, G.R. No. 175175
Petitioner,
Present:
QUISUMBING, J.,
- versus - Chairperson,
CARPIO MORALES,
TINGA,
VELASCO, JR., and
BRION, JJ.,
HEIRS OF ELEUTERIO CRUZ,
Respondents.
Promulgated:
September 29, 2008
x -----------------------------------------------------------------------------------x
DECISION
TINGA, J.:

This is a Petition for Review on Certiorari[1] under Rule 45 of the 1997 Rules of Civil Procedure,
assailing the Decision[2] and Resolution[3] 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 petitioners motion for reconsideration of the
decision.[5]
The following factual antecedents are matters of record.

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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. 27[7] and Executive Order (E.O.) No. 228.[8]Respondents rejected
petitioners 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]
Petitioners evidence consisted of the testimonies of Benedicta Simon, head of the LBP
Evaluation Division of Land Owners 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 ofP106,935.76. 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
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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 betweenP150,000.00 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 17[15] 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 petitioners 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]

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On 17 August 2006, the CA rendered the assailed decision partly granting petitioners
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.[21] However, 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 2[23] 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.
The petition lacks merit.
The Court laid down in Paris v. Alfeche[25] 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]
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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 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.[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 basicformula 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 1998[30] 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
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recognition of the DARs 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 PARADs 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
formula[33] 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,
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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 areREVERSED 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.

DANTE O. TINGA Associate Justice

WE CONCUR:

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

CONCHITA CARPIO MORALES PRESBITERO J. VELASCO, JR.

Associate Justice Associate Justice

ARTURO D. BRION
Associate Justice

ATTESTATION

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I attest that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, it
is hereby certified that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

[1]Rollo,

pp. 23-48.

[2]Id. at 49-61. Dated 17 August 2006 and penned by J. Lucas P. Bersamin and concurred in
by JJ. Martin S. Villarama, Jr., chairman of the Eighth Division, and Celia C. Librea-Leagogo.
[3]Id.

at 63. Dated 30 October 2006.

[4]Id.

at 114-120.

[5]Supra
[6]Id.

note 3.

at 49-50.

[7]Entitled,

Decreeing The Emancipation Of Tenants From The Bondage Of The Soil,

transferring To Them The Ownership Of The Land They Till And Providing The Instruments And
Mechanism Therefor; effective 21 October 1972.
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[8]Entitled,

Declaring Full Land Ownership To Qualified Farmer Beneficiaries Covered By

Presidential Decree No. 27; Declaring The Value Of Remaining Unvalued Rice And Corn Lands
Subject To P.D. No. 27; And Providing For The Manager Of Payment By The Farmer Beneficiary And
Mode Of Compensation By The Landowner; Effective 17 July 1987.
[9]CA

rollo, p. 59-60.

[10]Id.

at 61-64.
p. 114.

[11]Rollo,
[12]Id.

at 115-116.

[13]Id.

at 117.

[14]Rollo,

p. 120.

[15]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.
[16]Id.

at 117-120.

[17]Id.

at 121.

[18]Id.

at 86-113.

[19]Id.

at 96.

[20]Supra

note 2.

[21]Rollo,

p. 54.

[22]Supra

note 3.

[23]SECTION

2. Henceforth, the valuation of rice and corn lands covered by P.D. No. 27 shall
be based on the average gross production determined by the Barangay Committee on Land
Production in accordance with Department Memorandum Circular No. 26, series of 1973 and
related issuances and regulations of the Department of Agrarian Reform. The average gross
production per hectare shall be multiplied by two and a half (2.5), the product of which shall be
multiplied by Thirty Five Pesos (P35.00), the government support price for one cavan of 50 kilos
of palay on October 21, 1972, or Thirty One Pesos (P31.00), the government support price for
one cavan of 50 kilos of corn on October 21, 1972, and the amount arrived at shall be the value of
the rice and corn land, as the case may be, for the purpose of determining its cost to the farmer and
compensation to the landowner.
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[24]Rollo, pp. 35-36.
[25]416
[26]Id.

at 488.

[27]G.R.
[28]Id.

Phil. 473 (2001).

No. 127198, 16 May 2005, 458 SCRA 441.

at 452.

[29]G.R.

No. 164876, 23 January 2006, 479 SCRA 495.

[30]Department

of Agrarian Reform Administrative Order No. 5 (1998), entitled Revised

Rules and Regulations Governing the Valuation of Lands Voluntarily Offered or Compulsorily
Acquired to Republic Act; effective 15 April 1998.
[31]478

Phil. 701 (2004).

[32]G.R.

No. 171941, 02 August 2007, 529 SCRA 129.

[33]LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1), where LV = Land Value; CNI = Capitalized Net
Income; CS = Comparable Sales; and MV = Market Value per declaration.
[34]385

Phil. 720, 729 (2000).

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#26 G.R. NO. 164876

FIRST DIVISION

LAND BANK OF THE PHILIPPINES, G.R. No. 164876

Petitioner,
Present:
Panganiban, C.J. (Chairman),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ.
LEONILA P. CELADA,
Respondent. Promulgated:
January 23, 2006
x ---------------------------------------------------------------------------------------- x

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.

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In due course, LBP valued respondents 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 petition[4] 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 rice[5] 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;

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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 Answer[7] 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 respondents was based only on the current value of like
properties.

The DAR and the MARO likewise filed an Answer[8] 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 Order[9] 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 petitioners 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 conducted[11] and trial on the merits ensued. On March 1, 2003,
the SAC rendered judgment as follows:
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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 attorneys 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, respondents counsel and Judge Venancio J. Amila were
furnished with copies of the petition by registered mail x x x.

2. Petitioners counsel indicated his IBP and PTR but not his Roll of Attorneys 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) petitioners 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:

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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
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 ATTORNEYS 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 petitioners 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 respondents substantive rights, such that petitioners counsel
could have been directed to comply with the latter requirement rather than dismiss the petition on

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purely technical grounds. As for petitioners failure to attach material portions of the records, we held
in Donato v. Court of Appeals[17] 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 petitioners submission that the SAC erred in assuming jurisdiction over
respondents 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
DARABs re-evaluation of the land. The Court nonetheless held therein that the SAC acquired jurisdiction
over the action for the following reason:

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
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the DAR would vest in administrative officials original jurisdiction in compensation cases
and make the RTC an appellate court for the review of administrative decision. Thus,
although the new rules speak of directly appealing the decision of 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.[24]Consequently, the SAC properly took cognizance of respondents petition
for determination of just compensation.

In the same vein, there is no merit to petitioners 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,[25] the 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
setting aside petitioners valuation of respondents land on the sole basis of the higher valuation given for
neighboring properties. In this regard, the SAC held:

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 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 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 support her claim. Nevertheless, the Court finds a patent
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disparity in the price quotations by respondent Land Bank for the land of petitioner and
that of the other landowners brought under CARP which could be caused by deficient or
erroneous references due to the petitioners 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
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]

As can be gleaned from above ruling, the SAC based its valuation solely on the observation that
there 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.
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 No. 5, Series of
1998 (DAR AO No. 5, s. of 1998),[29] is invalid and of no effect.
While SAC is required to consider the acquisition cost of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the owner, the tax declaration and
the assessments made by the government assessors[30] 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
the agrarian reform program, it is the DARs duty to issue rules and regulations to carry out the object of
the law. DAR AO No. 5, s. of 1998 precisely filled in the details of Section 17, RA No. 6657 by providing a
basic formula by which the factors mentioned therein may be taken into account. The SAC was at no
liberty to disregard the formula which was devised to implement the said provision.

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 issuances partake of the nature of a statute[33] 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 the same.

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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:

A. There shall be one basic formula for the valuation of lands covered by VOS or CA:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

Where: LV = Land Value

CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration

The above formula shall be used if all three factors are present, relevant, and applicable.

A1. When the CS factor is not present and CNI and MV are applicable, the formula shall
be:

LV = (CNI x 0.9) + (MV x 0.1)

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A2. When the CNI factor is not present, and CS and MV are applicable, the formula shall
be:

LV = (CS x 0.9) + (MV x 0.1)

A3. When both the CS and CNI are not present and only MV is applicable, the formula
shall be:

LV = MV x 2

In no case shall the value of idle land using the formula MV x 2 exceed the lowest value
of land within the same estate under consideration or within the same barangay or
municipality (in that order) approved by LBP within one (1) year from receipt of
claimfolder.
Accordingly, petitioner applied the formula under A1 above since the comparable sales factor
(CS factor) was not present. As observed by the SAC itself, respondent refused to cooperate with the
local valuation office of petitioner and did not provide the necessary data to arrive at a proper CS factor.
DAR AO No. 5, s. of 1998 defines CS factor as follows:

C. CS shall refer to any one or the average of all the applicable sub-factors, namely ST,
AC and MVM:

Where: ST = Peso Value of Sales Transactions as defined under Item C.2

AC = Acquisition Cost as defined under Item C.3
MVM = Market Value Based on Mortgage as defined under Item C.4

xxxx

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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.

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 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.

xxxx

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.

xxxx

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.

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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

xxx

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

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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):

xxxx

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.

xxxx

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.

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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 owners 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. Petitioners valuation must thus be upheld.

Finally, there is no basis for the SACs 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 attorneys 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 isREVERSED and SET ASIDE. A new
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judgment is entered fixing the just compensation for respondents land at P2.1105517 per square meter
or a total of P299,569.61.

SO ORDERED.

CONSUELO YNARES-SANTIAGO
Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN
Chief Justice

MA. ALICIA AUSTRIA-MARTINEZ ROMEO J. CALLEJO, SR.

Associate Justice Associate Justice

MINITA V. CHICO-NAZARIO
Associate Justice

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CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the
above Decision were reached in consultation before the case was assigned to the writer of the opinion
of the Courts Division.

ARTEMIO V. PANGANIBAN
Chief Justice

[1]

Rollo, pp. 101-102.

Id. at 70-74.
[3]
Id. at 135.
[4]
Id. at 76-80.
[5]
LBP determined that the land is planted to cassava, corn and coconuts.
[6]
Rollo, pp. 78-79.
[7]
Id. at 81-84.
[8]
Id. at 85-86.
[9]
Id. at 96.
[10]
Id. at 94. Per Judge Venancio T. Amila.
[11]
Id. at 95.
[12]
Id. at 113.
[13]
Id. at 63. Penned by Associate Justice Hakim S. Abdulwahid and concurred in by Associate Justices
B.A. Adefuin-De la Cruz and Andres B. Reyes, Jr.
[14]
Id. at 66.
[15]
Id. at 34-35.
[16]
See Gutierrez v. Secretary of the Department of Labor and Employment, G.R. No. 142248, December
16, 2004, 447 SCRA 107, 118; and CA rollo, p. 14.
[17]
G.R. No. 129638, December 8, 2003, 417 SCRA 216.
[2]

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[18]
Id. at 225-226.
[19]
See Al-Amanah Islamic Investment Bank of the Philippines v. Celebrity Travel and Tours, Incorporated,
G.R. No. 155524, August 12, 2004, 436 SCRA 356, 366, citing Van Melle Phils., Inc. v. Endaya, G.R. No.
143132, September 23, 2003, 411 SCRA 528.
[20]
See Lao v. Court of Appeals, 382 Phil. 583, 603 (2000), quoting Rep. of the Phils. v. CA, 343 Phil. 428
(1997).
[21]
376 Phil. 252 (1999).
[22]
Id. at 262-263, citing Republic of the Philippines v. CA, 331 Phil. 1070 (1996).
[23]
See Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. No.
78742, July 14, 1989, 175 SCRA 343, 373-374.
[24]
See Republic of the Philippines v. CA, supra at 1075, citing Export Processing Zone Authority v. Dulay,
G.R. No. L-59603, April 29, 1987, 149 SCRA 305 and Sumulong v. Guerrero, G.R. No. L-48685, September
30, 1987, 154 SCRA 461.
[25]
G.R. No. 140160, January 13, 2004, 419 SCRA 67, 77, citing Land Bank of the Philippines v. Court of
Appeals, supra.
[26]
Rollo, pp. 112-113.
[27]
Id. at 112.
[28]
Id.
[29]
Revised Rules and Regulations Governing the Valuation of Lands Voluntarily Offered or Compulsorily
Acquired Pursuant to Republic Act No. 6657 (Effective May 11, 1998).
[30]
See Section 17, RA No. 6657.
[31]
See Land Bank of the Philippines v. Banal, G.R. No. 143276, July 20, 2004, 434 SCRA 543, 549-550.
[32]
See Philippine Administrative Law (1991 Ed.), Carlo L. Cruz, pp. 17-18, citing Rizal Empire Insurance
Group v. NLRC, G.R. No. L-73140, May 29, 1987, 150 SCRA 565.
[33]
See Commissioner of Internal Revenue v. Solidbank Corporation, G.R. No. 148191, November 25,
2003, 416 SCRA 436, 448, citing Victorias Milling Co., Inc. v. Social Security Commission, 114 Phil. 555
(1962).
[34]
Philippine Administrative Law, supra at 29, citing Espaol v. Chairman, Philippine Veterans
Administration, G.R. No. L-44616, June 29, 1985, 137 SCRA 314.
[35]
TSN, November 11, 2002, pp. 1 & 2.
[36]
Id.
[37]
Land Bank of the Philippines v. Wycoco, supra at 80, citing Reyes v. National Housing Authority, G.R.
No. 147511, January 20, 2003, 395 SCRA 494.

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#27 G.R. NO. 128557

SECOND DIVISION

[G.R. No. 128557. December 29, 1999.]

LAND BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS and JOSE PASCUAL, respondents.

DECISION

BELLOSILLO, J p:
The lofty effort of the Government to implement an effective agrarian reform program has resulted
in the massive distribution of huge tracks of land to tenant farmers. But it divested many landowners of
their property, and although the Constitution assures them of just compensation its determination may
involve a tedious litigation in the end. More often, land appraisal becomes a prolonged legal battle
among the contending parties the landowner, the tenant and the Government. At times the
confrontation is confounded by the numerous laws on agrarian reform which although intended to
ensure the effective implementation of the program have only given rise to needless confusion which
we are called upon to resolve, as the case before us.
Private respondent Jose Pascual owned three (3) parcels of land located in Gattaran, Cagayan.
Parcel 1 covered by TCT No. 16655 contains an area of 149,852 square meters as surveyed by the DAR
but the actual land area transferred is estimated at 102,229 square meters and classified as unirrigated
lowland rice; Parcel 2 covered by TCT No. 16654 contains an area of 123,043 square meters as surveyed
by the DAR but the actual land area transferred is estimated at 85,381 square meters and classified as
cornland; and, Parcel 3 covered by TCT No. 16653 contains an area of 192,590 square meters but the
actual land area transferred is estimated at 161,338 square meters and classified as irrigated lowland
rice. 1 Pursuant to the Land Reform Program of the Government under PD 27 2 and EO 228, 3 the
Department of Agrarian Reform (DAR) placed these lands under its Operation Land Transfer (OLT). 4
Under EO 228 the value of rice and corn lands is determined thus
SECTION 2.

Henceforth, the valuation of rice and corn lands covered by P.D. 27 shall be based on

the average gross production determined by the Barangay Committee on Land Production in accordance
with Department Memorandum Circular No. 26, series of 1973 and related issuances and regulations of
the Department of Agrarian Reform. The average gross production shall be multiplied by two and a half
(2.5), the product of which shall be multiplied by Thirty-Five Pesos (P35), the government support price
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for one cavan of 50 kilos of palay on October 21, 1972, or Thirty-One Pesos (P31), the government
support price for one cavan of 50 kilos of corn on October 21, 1972, and the amount arrived at shall be
the value of the rice and corn land, as the case may be, for the purpose of determining its cost to the
farmer and compensation to the landowner (emphasis supplied).
Hence, the formula for computing the Land Value (LV) or Price Per Hectare (PPH) of rice and corn
lands is 2.5 x AGP x GSP = LV or PPH.
In compliance with EO 228, the Provincial Agrarian Reform Officer (PARO) of the DAR in an
"Accomplished OLT Valuation Form No. 1" dated 2 December 1989 recommended that the "Average
Gross Productivity" (AGP) based on "[3] Normal Crop Year" for Parcels 1 and 2 should be 25 cavans per
hectare for unirrigated lowland rice and 10 cavans per hectare for corn land. 5
Meanwhile, the Office of the Secretary of Agrarian Reform (SAR) also conducted its own valuation
proceedings apart from the PARO. On 10 October 1990 Secretary Benjamin T. Leong of the DAR using
the AGP of 25.66 cavans for unirrigated rice lands 6 issued an order valuing Parcel 1 at P22,952.97 7 and
requiring herein petitioner Land Bank of the Philippines (LBP) to pay the amount. On 1 February 1991
petitioner LBP approved the valuation.
In 1991 private respondent Jose Pascual, opposing the recommended AGP of the PARO, filed a
petition for the annulment of the recommendation on the productivity and valuation of the land
covered by OLT, subject matter hereof, with the Department of Agrarian Reform Adjudication Board
(DARAB). Oscar Dimacali, Provincial Agrarian Reform Adjudicator (PARAD) of Cagayan heard the case.
Despite due notice however Francisco Baculi, the PARO who issued the assailed recommendation, failed
to appear at the trial. Only private respondent Jose Pascual and Atty. Eduard Javier of petitioner LBP
were present. 8 Thereafter private respondent was allowed to present evidence ex-parte.
At the hearings conducted by the PARAD private respondent presented as evidence another
"Accomplished OLT Valuation Form No. 1," for Parcel 3 dated 22 June 1976 to support his claim that the
"OLT Valuation Form" issued by PARO Francisco Baculi extremely undervalued the AGP of his lands. In
the "1976 OLT Valuation Form" the AGP based on "(3) Normal Crop Year" was 80 cavans per hectare for
lowland rice unirrigated, 28 cavans per hectare for corn lands and 100 cavans per hectare for lowland
rice irrigated. 9
Private respondent also presented Tax Declarations for Parcels 1 and 2 stating that the AGP was 80
cavans for unirrigated rice lands and 28 cavans for corn lands.
On 11 June 1992 the PARAD ruled in favor of private respondent nullifying the 2 December 1989
AGP recommended by the PARO. 10 Instead, the PARAD applied the 22 June 1976 AGP and the AGP
stated in private respondent's Tax Declarations to determine the correct compensation. The PARAD also
used the "Government Support Price" (GSP) of P300 for each cavan of palay and P250 for each cavan of
corn. 11 He then ordered petitioner LBP to pay private respondent P613,200.00 for Parcel 1, P148,750.00
for Parcel 2, and P1,200,000.00 for Parcel 3, or a total amount of P1,961,950.00. 12

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After receiving notice of the decision of the PARAD, private respondent accepted the valuation.
However, when the judgment became final and executory, petitioner LBP as the financing arm in the
operation of PD 27 and EO 228 refused to pay thus forcing private respondent to apply for a Writ of
Execution with the PARAD which the latter issued on 24 December 1992. 13 Still, petitioner LBP declined
to comply with the order.
On 29 June 1994 Secretary Ernesto Garilao Jr. of the DAR wrote a letter to petitioner LBP requiring
the latter to pay the amount stated in the judgment of the PARAD. 14 Again, petitioner LBP rejected the
directive of Secretary Garilao. Petitioner's Executive Vice President, Jesus Diaz, then sent a letter to
Secretary Garilao arguing that (a) the valuation of just compensation should be determined by the
courts; (b) PARAD could not reverse a previous order of the Secretary of the DAR; 15 and, (c) the
valuation of lands under EO 228 falls within the exclusive jurisdiction of the Secretary of the DAR and
not of the DARAB. 16
On 23 January 1995 the Secretary of Agrarian Reform replied to petitioner
We agree with your contention that the matter of valuation of lands covered by P.D. 27 is a matter
within the administrative implementation of agrarian reform, hence, cognizable exclusively by the
Secretary.
However, in this particular case, there is another operative principle which is the finality of decisions of
the Adjudication Board. Since the matter has been properly threshed out in the quasi-judicial
proceeding and the decision has already become final and executory, we cannot make an exception in
this case and allow the non-payment of the valuation unless we are enjoined by a higher authority like
the courts.
Therefore at the risk of occasional error, we maintain that payment should be made in this case.
However we believe situations like this would be lessened tremendously through the issuance of the
attached memorandum circular 17 to the Field Offices. 18
Despite the letter of Secretary G. Garilao, petitioner LBP remained adamant in its refusal to pay
private respondent. It reiterated its stand that the PARAD had no jurisdiction to value lands covered by
PD 27. 19
On 17 June 1995 counsel for private respondent also wrote petitioner LBP demanding payment. On
20 June 1995 petitioner replied
. . . Although we disagree with the foregoing view that the PARAD decision on the land valuation of a PD
27 landholding has become final for numerous legal reasons, in deference to the DAR Secretary, we
informed him that we will pay the amount decided by the PARAD of Cagayan provided the tenant
beneficiaries of Mr. Pascual be consulted first and the land transfer claim be redocumented to the effect
that said beneficiaries re-execute the Landowner Tenant Production Agreement-Farmers Undertaking to
show their willingness to the PARAD valuation and to amortize the same to this bank. This is in
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consonance with the legal mandate of this bank as the financing arm of PD 27/EO 228 landholdings. In
other words, the beneficiaries must agree to the amount being financed, otherwise, financing may not
be possible pursuant to this bank's legal mandate (emphasis supplied). 20
Petitioner LBP having consistently refused to comply with its obligation despite the directive of the
Secretary of the DAR and the various demand letters of private respondent Jose Pascual, the latter
finally filed an action for Mandamus in the Court of Appeals to compel petitioner to pay the valuation
determined by the PARAD. On 15 July 1996 the appellate court granted the Writ now being assailed. The
appellate court also required petitioner LBP to pay a compounded interest of 6% per annum in
compliance with DAR Administrative Order No. 13, series of 1994. 21 On 11 March 1997 petitioner's
Motion for Reconsideration was denied; 22 hence, this petition.
Petitioner LBP avers that the Court of Appeals erred in issuing the Writ of Mandamus in favor of
private respondent and argues that the appellate court cannot impose a 6% compounded interest on
the value of Jose Pascual's land since Administrative Order No. 13 does not apply to his case. Three (3)
reasons are given by petitioner why the Court of Appeals cannot issue the writ:
First, it cannot enforce PARAD's valuation since it cannot make such determination for want of
jurisdiction hence void. Section 12, par. (b), of PD 946 23 provides that the valuation of lands covered by
PD 27 is under the exclusive jurisdiction of the Secretary of Agrarian Reform. Petitioner asserts that Sec.
17 of EO 229 24 and Sec. 50 of RA No. 6657, 25 which granted DAR the exclusive jurisdiction over all
agrarian reform matters thereby divesting the Court of Agrarian Relations of such power, did not repeal
Sec. 12, par. (b), of PD 946. Petitioner now attempts to reconcile the pertinent laws by saying that only
the Secretary of Agrarian Reform can determine the value of rice and corn lands under Operation Land
Transfer of PD 27, while on the other hand, all other lands covered by RA 6657 (CARL) shall be valued by
the DARAB, hence, the DARAB of the DAR has no jurisdiction to determine the value of the lands
covered by OLT under PD 27. LLpr
To bolster its contention that Sec. 12, par. (b), of PD 946 was not repealed, petitioner LBP cites Sec.
76 of RA 6657. 26 It argues that since Sec. 76 of RA 6657 only repealed the last two (2) paragraphs of Sec.
12 of PD 946, it is obvious that Congress had no intention of repealing par. (b). Thus, it remains valid and
effective. As a matter of fact, even the Secretary of Agrarian Reform agreed that Sec. 12, par. (b), of PD
946 still holds. Based on this assumption, the Secretary of the DAR has opined that the valuation of rice
and corn lands is under his exclusive jurisdiction and has directed all DARAB officials to refrain from
valuing lands covered by PD 27. 27 Petitioner maintains that the Secretary of the DAR should conduct his
own proceedings to determine the value of Parcels 2 and 3 and that his valuation of Parcel 1 28 should be
upheld.
We do not agree. In Machete v. Court of Appeals 29 this Court discussed the effects on PD 946 of Sec.
17 of EO 229 and Sec. 50 of RA 6657 when it held
The above quoted provision (Sec. 17) should be deemed to have repealed Sec. 12 (a) and (b) of
Presidential Decree No. 946 which invested the then courts of agrarian relations with original exclusive

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jurisdiction over cases and questions involving rights granted and obligations imposed by presidential
issuances promulgated in relation to the agrarian reform program (emphasis supplied).
Thus, petitioner's contention that Sec. 12, par. (b), of PD 946 is still in effect cannot be sustained. It
seems that the Secretary of Agrarian Reform erred in issuing Memorandum Circular No. I, Series of
1995, directing the DARAB to refrain from hearing valuation cases involving PD 27 lands. For on the
contrary, it is the DARAB which has the authority to determine the initial valuation of lands involving
agrarian reform 30 although such valuation may only be considered preliminary as the final
determination of just compensation is vested in the courts. 31
Second, petitioner LBP contends that the Court of Appeals cannot issue the Writ of Mandamus
because it cannot be compelled to perform an act which is beyond its legal duty.32 Petitioner cites Sec. 2
of PD 251, 33 which amended Sec. 75 of RA 3844, 34 which provides that it is the duty of petitioner bank
"(t)o finance and/or guarantee the acquisition, under Presidential Decree No. 85 dated December 25,
1972, of farm lands transferred to the tenant farmers pursuant to Presidential Decree No. 27 (P.D. 27)
dated October 21, 1972." Section 7 of PD 251 also provides that "(w)henever the Bank pays the whole or
a portion of the total costs of farm lots, the Bank shall be subrogated by reason thereof, to the right of
the landowner to collect and receive the yearly amortizations on farm lots or the amount paid including
interest thereon, from tenant-farmers in whose favor said farm lot has been transferred pursuant to
Presidential Decree No. 27, dated October 21, 1972" (emphasis supplied).
Petitioner further argues that for a financing or guarantee agreement to exist there must be at least
three (3) parties: the creditor, the debtor and the financier or the guarantor. Since petitioner merely
guarantees or finances the payment of the value of the land, the farmer-beneficiary's consent, being the
principal debtor, is indispensable and that the only time petitioner becomes legally bound to finance the
transaction is when the farmer-beneficiary approves the appraised land value. Petitioner fears that if it
is forced to pay the value as determined by the DARAB, the government will suffer losses as the farmerbeneficiary, who does not agree to the appraised land value, will surely refuse to reimburse the
amounts that petitioner had disbursed. Thus, it asserts, that the landowner, the DAR, the Land Bank and
the farmer-beneficiary must all agree to the value of the land as determined by them.
A perusal of the law however shows that the consent of the farmer-beneficiary is not required in
establishing the vinculum juris for the proper compensation of the landowner. Section 18 of RA 6657
states
SECTION 18.

Valuation and Mode of Compensation. The LBP shall compensate the landowner in

such amount as may be agreed upon by the landowner and the DAR and the LBPin accordance with the
criteria provided for in Sections 16 and 17 and other pertinent provisions hereof, or as may be finally
determined by the court as the just compensation for the land (emphasis supplied).
As may be gleaned from the aforementioned section, the landowner, the DAR and the Land Bank
are the only parties involved. The law does not mention the participation of the farmer-beneficiary.
However, petitioner insists that Sec. 18 of RA 6657 35 does not apply in this case as it involves lands
covered by PD 27. It argues that in appraising PD 27 lands the consent of the farmer-beneficiary is
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necessary to arrive at a final valuation. Without such concurrence, the financing scheme under PD 251
cannot be satisfied. 36
We cannot see why Sec. 18 of RA 6657 should not apply to rice and corn lands under PD 27. Section
75 of RA 6657 37 clearly states that the provisions of PD 27 and EO 228 shall only have a suppletory
effect. Section 7 of the Act also provides
SECTION 7.

Priorities. The DAR, in coordination with the PARC shall plan and program the

acquisition and distribution of all agricultural lands through a period of (10) years from the effectivity of
this Act. Lands shall be acquired and distributed as follows:
Phase One: Rice and Corn lands under P.D. 27; all idle or abandoned lands; all private lands voluntarily
offered by the owners for agrarian reform; . . . and all other lands owned by the government devoted to
or suitable for agriculture, which shall be acquired and distributed immediately upon the effectivity of
this Act, with the implementation to be completed within a period of not more than four (4) years
(emphasis supplied).
This eloquently demonstrates 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. InAssociation of Small Landowners of the
Philippines v. Secretary of Agrarian Reform 38 this Court applied the provisions RA 6657 to rice and corn
lands when it upheld the constitutionality of the payment of just compensation for PD 27 lands through
the different modes stated in Sec. 18.
Having established that under Sec. 18 of RA 6657 the consent of the farmer-beneficiary is
unnecessary in the appraisal of land value, it must now be determined if petitioner had agreed to the
amount of compensation declared by the PARAD. If it did, then we can now apply the doctrine in Sharp
International Marketing v. Court of Appeals. 39 In that case, the Land Bank refused to comply with the
Writ of Mandamus issued by the Court of Appeals on the ground that it was not obliged to follow the
order of the Secretary of Agrarian Reform to pay the landowner. This Court concurred with the Land
Bank saying that the latter could not be compelled to obey the Secretary of Agrarian Reform since the
bank did not merely exercise a ministerial function. Instead, it had an independent discretionary role in
land valuation and that the only time a writ of mandamus could be issued against the Land Bank was
when it agreed to the amount of compensation determined by the DAR
It needs no exceptional intelligence to understand the implication of this transmittal. It simply means
that if LBP agrees on the amount stated in the DAS, 40 after its review and evaluation, it becomes its duty
to sign the deed. But not until then. For, it is only in that event that the amount to be compensated shall
have been "established" according to law.
Although the case at bar pertains to an involuntary sale of land, the same principle should apply.
Once the Land Bank agrees with the appraisal of the DAR, which bears the approval of the landowner, it
becomes its legal duty to finance the transaction. In the instant case, petitioner participated in the
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valuation proceedings held in the office of the PARAD through its counsel, Atty. Eduard Javier. 41 It did
not appeal the decision of PARAD which became final and executory. 42 As a matter of fact, petitioner
even stated in its Petition that "it is willing to pay the value determined by the PARAD PROVIDED that
the farmer beneficiaries concur thereto." 43 These facts sufficiently prove that petitioner LBP agreed with
the valuation of the land. The only thing that hindered it from paying the amount was the nonconcurrence of the farmer-beneficiary. But as we have already stated, there is no need for such
concurrence. Without such obstacle, petitioner can now be compelled to perform its legal duty through
the issuance of a writ of mandamus.
Anent petitioner's argument that the government will lose money should the farmer-beneficiary be
unwilling to pay, we believe such apprehension is baseless. In the event that the farmer-beneficiary
refuses to pay the amount disbursed by petitioner, the latter can foreclose on the land as provided for in
Secs. 8 to 11 of EO 228. Petitioner LBP would then be reimbursed of the amount it paid to the
landowner. LLphil
Third, petitioner LBP asserts that a writ of mandamus cannot be issued where there is another
plain, adequate and complete remedy in the ordinary course of law. Petitioner claims that private
respondent had three (3) remedies. The first remedy was to ask the sheriff of the DARAB to execute the
ruling of PARAD by levying against the Agrarian Reform Fund for so much of the amount as would satisfy
the judgment. Another remedy was to file a motion with the DAR asking for a final resolution with
regard to the financing of the land valuation. Lastly, private respondent could have filed a case in the
Special Agrarian Court for the final determination of just compensation. 44
We hold that as to private respondent the suggested remedies are far from plain, adequate and
complete. After the judgment of PARAD became final and executory, private respondent applied for a
writ of execution which was eventually granted. However, the sheriff was unable to implement it since
petitioner LBP was unwilling to pay. The PARAD even issued an order requiring petitioner's manager to
explain why he should not be held in contempt. 45 Two (2) years elapsed from the time of the PARAD
ruling but private respondent's claim has remained unsatisfied. This shows that petitioner has no
intention to comply with the judgment of PARAD. How then can petitioner still expect private
respondent to ask the DARAB's sheriff to levy on the Agrarian Reform Fund when petitioner bank which
had control of the fund 46 firmly reiterated its stand that the DARAB had no jurisdiction?
Petitioner's contention that private respondent should have asked for a final resolution from the
DAR as an alternative remedy does not impress us either. When private respondent sensed that
petitioner would not satisfy the writ of execution issued by the PARAD, he sought the assistance of the
Secretary of Agrarian Reform who then wrote to petitioner to pay the amount in accordance with the
decision of PARAD. 47 Still, petitioner refused. The Secretary then sent another letter to petitioner telling
the latter to pay private respondent. 48 Obviously, the stand of the Secretary was that petitioner should
pay private respondent in accordance with the PARAD valuation which had already become final. It
would have been redundant for private respondent to still ask for a final resolution from the DAR.
The allegation of petitioner that private respondent should have filed a case with the Special
Agrarian Court is also without merit. Although it is true that Sec. 57 of RA 6657 provides that the Special
Agrarian Courts shall have jurisdiction over the final determination of just compensation cases, it must
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be noted that petitioner never contested the valuation of the PARAD. 49 Thus, the land valuation stated
in its decision became final and executory. 50There was therefore no need for private respondent
Pascual to file a case in the Special Agrarian Court.
With regard to the decision of the Court of Appeals imposing an interest based on Administrative
Order No. 13, Series of 1994, the Order should be examined to ascertain if private respondent can avail
of the 6% compounded interest prescribed for unpaid landowners. As to its coverage, the Order states:
These rules and regulations shall apply to landowners: (1) whose lands are actually tenanted as of 21
October 1972 or thereafter and covered by OLT; (2) who opted for government financing through Land
Bank of the Philippines as mode of compensation; and, (3) who have not yet been paid for the value of
their land.
At first glance it would seem that private respondent's lands are indeed covered by AO No. 13.
However, Part IV shows that AO No. 13 provides a fixed formula for determining the Land Value (LV) and
the additional interests it would have earned. The formula utilizes the Government Support Price (GSP)
of 1972, which is P35.00/cavan of palay and P31.00/cavan of corn. For its Increment Formula AO No. 13
states: The following formula shall apply
For palay: LV = (2.5 x AGP x P35) x (1.06)n
For corn: LV = (2.5 x AGP x P31) x (1.06)n. 51
In the decision of PARAD, however, the Land Value (LV) of private respondent's property was
computed by using the GSP for 1992, which is P300.00 per cavan of palay and P250.00 per cavan of
corn. 52 PARAD Dimacali used the following equations:
For palay: LV = (2.5 x AGP x 300)
For corn: LV = (2.5 x AGP x 250)

Hence, the formula in AO No. 13 could no longer be applied since the PARAD already used a higher
GSP.
The purpose of AO No. 13 is to compensate the landowners for unearned interests. 53Had they been
paid in 1972 when the GSP for rice and corn was valued at P35.00 and P31.00, respectively, and such
amounts were deposited in a bank, they would have earned a compounded interest of 6% per annum.
Thus, if the PARAD used the 1972 GSP, then the product of (2.5 x AGP x P35 or P31) could be multiplied
by (1.06)n to determine the value of the land plus the additional 6% compounded interest it would have
earned from 1972. However, since the PARAD already increased the GSP from P35.00 to P300.00/cavan
of palay and from P31.00 to P250.00/cavan of corn, there is no more need to add any interest thereon,
muchless compound it. To the extent that it granted 6% compounded interest to private respondent
Jose Pascual, the Court of Appeals erred. cda
WHEREFORE, the assailed Decision of the Court of Appeals granting the Writ of Mandamus directing
petitioner Land Bank of the Philippines to pay private respondent Jose Pascual the total amount of
P1,961,950.00 stated in the Decision dated 11 June 1992 of the Provincial Agrarian Reform Adjudicator
(PARAD) of Cagayan is AFFIRMED, with the modification that the 6% compounded interest per annum
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provided under DAR Administrative Order No. 13, Series of 1994 is DELETED, the same being no longer
applicable.
SO ORDERED.
Mendoza, Quisumbing, Buena and De Leon, Jr., JJ ., concur.
Footnotes
1.

Rollo, p. 29.

2.
Decreeing the Emancipation of Tenants from the Bondage of the Soil Transferring to Them the
Ownership of the Land They Till and Providing the Instruments and Mechanism therefor (21 October
1972).
3.
Declaring Full Land Ownership to Qualified Farmer Beneficiaries Covered by Presidential Decree
No. 27, Determining the Value of Remaining Unvalued Rice and Corn Lands Subject of P.D. No. 27, and
Providing for the Manner of Payment by the Farmer Beneficiary and Mode of Compensation to the
Landowner (17 July 1987).
4.

Rollo, p. 52.

5.

Records, p. 9.

6.
Determined by the Secretary of Agrarian Reform (SAR) through the Barangay Committee on Land
Productivity; Records, p. 42.
7.

Determined by the SAR using the AGP of 25.66 and GSP of P35.00; Records, p. 43-45.

8.

Rollo, p. 10.

9.

Id., p. 9.

10.
While the hearing in the PARAD was ongoing, the DAR Regional Director of Region II was still
conducting his own valuation proceedings for the Secretary. He was in the process of valuing Parcel 3
with TCT No. 16653 when the aforementioned ruling of the PARAD was promulgated. Thus, in the "Claim
Folder" sent to petitioner, the Regional Director II adopted the AGP declared by the PARAD. Abiding by
the PARAD ruling, the Director also used the GSP in 1992 instead of the GSP in 1972, which the SAR used
in valuing Parcel 1. As a result, Parcel 3 was estimated at P570,007.25. However, although both the
PARAD and the Regional Director used the same formula, the valuation for Parcel 3 did not tally since
the PARAD found that the lot actually transferred to beneficiaries was larger than what the Director had
estimated.
11.
Decision of the PARAD wherein the GSP for 1992 was used to value the land in accordance with
the ruling in Galeon v. Pastoral, CA-G.R. SP No. 23168; Rollo, p. 36.
12.
This valuation was computed using the AGPs stated therein and the GSP of P300.00 for rice land
and P250.00 for corn land; Records, p. 18.
13.

Records, p. 19.
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14.
Letter of SAR to LBP; Rollo, p. 39.
15.

The SAR valued Parcel 1 at P22,952.97; see Note 5.

16.

Rollo, p. 40.

17.
. . . 2. All land valuation cases which involve just compensation issues under Presidential Decree
No. 27 may, upon proper motion, be returned to the LBP for recomputation in accordance with the
mandate under Administrative Order No. 13, s. 1994. We would like to inform all Adjudicators that the
DARAB does not have jurisdiction to hear valuation cases relative to PD 27, such matters being
considered as part of the administrative implementation of PD 27, and therefore cognizable exclusively
by the Office of the Secretary. This principle is found in Section 12 of Presidential Decree No. 946, which
states the following: . . . Provided however that matters involving the administrative implementation of
the transfer of 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 . . . (4) determination of the total production and value of the land to be
transferred.
18.

Rollo, p. 46.

19.

Id., p. 49.

20.

Id., p. 51.

21.
The Administrative Order imposed a 6% compounded interest per annum on the determined
Land Value belonging to landowners who have not been paid from the time their lands were taken.
22.

Rollo, p. 77.

23.
Recognizing the Court of Agrarian Relations, Streamlining their Procedures and for Other
Purposes (17 July 1976); Sec. 12. Jurisdiction over Subject Matter. The Court of Agrarian Relations
shall have original and exclusive jurisdiction over . . . 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 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 . . . (4) determination of the total
production and value of the land to be transferred."
24.
Providing the Mechanism for the Implementation of the Comprehensive Agrarian Reform
Program (22 July 1987); Sec. 17. Quasi-Judicial Power of the DAR. The DAR is hereby vested with
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).
25.
An Act Instituting the Comprehensive Agrarian Reform Program to Promote Social Justice and
Industrialization; Providing the Mechanism for its Implementation, and for Other Purposes (CARL) (10
June 1988); Sec. 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary
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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.
26.
Sec. 76. Repealing Clause. Section 35 of Republic Act No. 3844, Presidential Decree No. 316,
the last two paragraphs of Section 12 of Presidential Decree No. 946, Presidential Decree No. 1038, and
all other laws and decrees, executive orders, rules and regulations, issuances or parts thereof
inconsistent with this Act are hereby repealed or amended accordingly.
27.

See Note 17.

28.

P22,952.97; see Note 7.

29.
G.R. No. 109093, 20 November 1995, 250 SCRA 176, citing Quismundo v. Court of Appeals, G.R.
No. 95664, 13 September 1991, 201 SCRA 609, reiterated in Tiongson v. Court of Appeals, G.R. Nos.
85403-06, 23 September 1992, 214 SCRA 197.
30.

Sec. 1, par. (b), Rule II, 1994 Revised Rules of the DARAB.

31.
Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. No.
78742, 14 July 1989, 175 SCRA 343.
32.

Rollo, p. 197.

33.
Amending Certain Provisions of RA 3844, as amended, entitled "The Code of Agrarian Reform in
the Philippines" (21 July 1973).
34.

Agricultural Land Reform Code (8 August 1963).

35.

Rollo, p. 16.

36.

Id., p. 17.

37.
Sec. 75. Suppletory Application of Existing Legislations. The provisions of Republic Act No. 3844
as amended, Presidential Decree Nos. 27 and 266 as amended, Executive Order Nos. 228 and 229, both
Series of 1987; and other laws not inconsistent with this Act shall have suppletory effect.
38.

See Note 31.

39.

G.R. No. 93661, 4 September 1991, 201 SCRA 299.

40.

Deed of Absolute Sale.

41.

Rollo, p. 30.

42.

Records, p. 63.

43.

Rollo, p. 17.

44.

Id., pp. 201-202.

45.

Records, p. 63.
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46.
Rollo, p. 200.
47.

Id., p. 39.

48.

Id., p. 46.

49.

Records, p. 63.

50.

Sec. 11, Rule XIII, 1994 DARAB Rules.

51.
LV = Land Value; AGP = Average Gross Production in cavan of 50 kilos in accordance with DAR
Memorandum Circular No. 26, series of 1973.
P35 = Government Support Price for palay in 1972 pursuant to Executive Order No. 228; P31 =
Government Support Price for corn in 1972 pursuant to Executive Order No. 228; n = number of years
of tenancy up to effectivity date of AO No. 13.
52.

See Note 10.

53.
I. Prefatory Statement. Presidential Decree No. 27 issued on October 21, 1972 and Executive
Order No. 228 dated 17 August 1987 declared the actual tenant-tillers as deemed full owners of the land
they till, thereby resulting in the effective dispossession of the landowners of their lands. A number of
these lands remain unpaid in view of the non-acceptance by the landowners of the compensation due to
land valuation. Had the landowners been paid from the time of taking his land and the money deposited
in the bank, the money would have earned the interest rate compounded annually as authorized by
banking laws, rules and regulations.

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