Part Four Retention, Exemption and Exclusions http://attyalvinclaridades.wordpress.

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1.

Retention Rights Sec. 6, RA 6657

Case: Alita vs. CA, G.R. No. 78517, February 27, 1989
Issuance: DAR AO 2, S. 2003 2003 Rules of Procedure on Landowners Retention Rights

2.

Exemptions and Exclusions Sec. 10, RA 6657

3.

Sec. 3(c) of RA 6657, in relation to DOJ Opinion No. 44 s. 1990 and the case of Natalia Realty v.
DAR, GR No. 103302, August 12, 1993
Issuances:

1.

DAR AO 13, S. 1990 Rules and Procedures Governing Exemptions of Lands under Sec. 10 of RA
6657

2.

DAR AO 4, S. 2003 2003 Rules on Exemption of Lands under Sec. 3c, RA 6657 and DOJ Opinion
44 s. 1990
Cases:

1.

Milestone Farms, Inc., v. Office of the President, G.R. No. 182332. February 23, 2011

2.

Luz Farms v. Sec. of Agrarian Reform, GR No. 86889, December 4, 1990

3.

DAR v. Sutton, G.R. No. 162070. October 19, 2005

4.

RA 7881 (1995) Exempting Prawn Farms and Fishponds from CARP

Issuance: DAR AO 3, S. 1995 Rules and Regulations on the Exemption of Fishponds from the Coverage of
CARL pursuant to RA 7881
Cases:

1.

Central Mindanao University v. DARAB, G.R. No. 100091. October 22, 1992

2.

DAR v. DECS, G.R. No. 158228. March 23, 2004

3.

Province of Camarines Sur v. CA, G.R. No. 103125 May 17, 1993

4.

Roxas & Company, Inc. v. DAMBA-NFSW, G.R. No. 149548. December 4, 2009

Sec. 6 of RA 6657 Retention Rights (incl. retention rights under PD 27)

SECTION 6. 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-size 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 areas originally retained by them thereunder: Provided, further, That original homestead
grantees or their direct compulsory heirs who still own the original homestead at the time of the approval of
this Act shall retain the same areas as long as they continue to cultivate said homestead.
The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the
landowner: Provided, however, That in case the area selected for retention by the landowner is tenanted, the
tenant shall have the option to choose whether to remain therein or be a beneficiary in the same or
another agricultural land with similar or comparable features. In 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. In all cases, the security of
tenure of the farmers or farmworkers on the land prior to the approval of this Act shall be respected.
Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of possession of
private lands executed by the original landowner in violation of the Act shall be null and void: Provided,
however, That those executed prior to this Act shall be valid only when registered with the Register of Deeds
within a period of three (3) months after the effectivity of this Act. Thereafter, all Registers of Deeds shall
inform the Department of Agrarian Reform (DAR) within thirty (30) days of any transaction involving
agricultural lands in excess of five (5) hectares.
Issuance: DAR AO 2, S. 2003 2003 Rules of Procedure on Landowners Retention Rights
(see pdf file)
Sec. 10 of RA 6657 Exemptions and Exclusions

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.
Sec. 3(c) of RA 6657 in relation to DOJ Opinion No. 44 s. 1990 and the case of Natalia Realty et. al..
versus DAR, GR No. 103302, August 12, 1993
(c) Agricultural Land refers to land devoted to agricultural activity as defined in this Act and not classified
as mineral, forest, residential, commercial or industrial land. [Sec. 3(c) of RA 6657]

The meaning of agricultural lands covered by the CARL was explained further by the DAR in its
Administrative Order No. 1, Series of 1990,[12] entitled Revised Rules and Regulations Governing
Conversion of Private Agricultural Land to Non-Agricultural Uses, issued pursuant to Section 49 of CARL,
which we quote:
x x x. 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. (Emphasis supplied)
Prior to this Order, Department of Justice Opinion No. 44 dated March 16, 1990, which was addressed
to then DAR Secretary Florencio Abad, recognized the fact that before the date of the laws effectivity on June
15, 1988, the reclassification or conversion of lands was not exclusively done by the DAR. [13] Rather, it was a
coordinated effort of all concerned agencies; namely, the Department of Local Governments and Community
Development, the Human Settlements Commission and the DAR.[14] Then Justice Secretary Franklin M.
Drilon explained the coordination in this wise:
x x x. Under R.A. No. 3844,[15] as amended by R.A. No. 6389,[16] an agricultural lessee may, by order of the
court, be dispossessed of his landholding if after due hearing, it is shown that the landholding is declared by
the [DAR]upon the recommendation of the National Planning Commission to be suited for residential,
commercial, industrial or some other urban purposes.[17]
Likewise, under various Presidential Decrees (P.D. Nos. 583, 815 and 946) which were issued to give teeth to
the implementation of the agrarian reform program decreed in P.D. No. 27, the DAR was empowered to
authorize conversions of tenanted agricultural lands, specifically those planted to rice and/or corn, to other
agricultural or to non-agricultural uses, subject to studies on zoning of the Human Settlements Commissions

(HSC). This non-exclusiveauthority of the DAR under the aforesaid laws was, x x x recognized and reaffirmed
by other concerned agencies, such as the Department of Local Government and Community Development
(DLGCD) and the then Human Settlements Commission (HSC) in a Memorandum of Agreement executed by
the DAR and these two agencies on May 13, 1977, which is an admission that with respect to land use
planning and conversions, the authority is not exclusive to any particular agency but is a coordinated effort of
all concerned agencies.
It is significant to mention that in 1978, the then Ministry of Human Settlements was granted authority
to review and ratify land use plans and zoning ordinance of local governments and to approve development
proposals which include land use conversions (see LOI No. 729 [1978]). This was followed by [E.O.] No. 648
(1981) which conferred upon the Human Settlements Regulatory Commission (the predecessors of the
Housing and Land Use Regulatory Board [HLURB] the authority to promulgate zoning and other land use
control standards and guidelines which shall govern land use plans and zoning ordinances of local
governments, subdivision or estate development projects of both the public and private sector and urban
renewal plans, programs and projects; as well as to review, evaluate and approve or disapprove comprehensive
land use development plans and zoning components of civil works and infrastructure projects, of national,
regional and local governments, subdivisions, condominiums or estate development projects including
industrial estates.
Hence, the justice secretary opined that the authority of the DAR to approve conversions of agricultural lands
to non-agricultural uses could be exercised only from the date of the laws effectivity on June 15, 1988. [Junio
v. Garilao, G.R. No. 147146. July 29, 2005]

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 commodity produced, all public and private
agricultural lands. As to what constitutes agricultural land, it is referred to as land devoted to
agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or
industrial land. (Sec. 3 (c), R.A. 6657) The deliberations of the Constitutional Commission confirm this
limitation. Agricultural lands are only those lands which are arable and suitable agricultural lands and
do not include commercial, industrial and residential lands. (Luz Farms v. Secretary of the Department of
Agrarian Reform, G.R. No. 86889, 4 December 1990, 192 SCRA 51, citing Record, CONCOM, 7 August 1986,
Vol. III, p. 30) Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These
include lands previously converted to non-agricultural uses prior to the effectivity of CARL by government
agencies other than respondent DAR. In its Revised Rules and Regulations Governing Conversion of Private
Agricultural Lands to Non-Agricultural Uses, (DAR Administrative Order No. 1, Series of 1990), DAR itself
defined agricultural land thus . . . Agricultural land refers to those devoted to agricultural activity as
defined in R.A. 6657 and not classified as mineral or forest by the Department of Environment and Natural
Resources (DENR) and its predecessor agencies, and not classified in town plans and zoning ordinances as
approved by the Housing and Land Use Regulatory Board (HLURB) and its preceding competent authorities
prior to 15 June 1988 for residential,commercial or industrial use. The Secretary of Justice, responding to a
query by the Secretary of Agrarian Reform, noted in an Opinion that lands covered by Presidential
Proclamation No. 1637, inter alia, of which the NATALIA lands are part, having been reserved for townsite
purposes to be developed as human settlements by the proper land and housing agency, are not deemed
agricultural lands within the meaning and intent of Section 3 (c) of R.A. No. 6657. Not being deemed
agricultural lands, they are outside the coverage of CARL.

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.
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. Cdpr
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 protestletters, 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.
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, 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 low-cost housing subdivision, albeit at a snails 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.
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. 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. llcd
SO ORDERED.
Narvasa, C . J., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo,
Quiason, Puno and Vitug, JJ., concur.