Republic of the Philippines
SUPREME COURT
Manila
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.
PARAS, J.:
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 (DAR for short),
now Department of Agrarian Reform (MAR
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 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)
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.
Republic of the Philippines
SUPREME COURT
Manila
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.
Lino M. Patajo for petitioners.
The Solicitor General for respondents.
BELLOSILLO, J.:
Are lands already classified for residential,
commercial or industrial use, as approved by
the Housing and Land Use Regulatory
Board and its precursor agencies1 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 Coverage3 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 80,000 hectares, on 13 October
1983;5 and for Phase III, which consisted of
the remaining 31.7707 hectares, on 25 April
1986.6 Petitioner were likewise issued
development permits7 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 the 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
undedeveloped 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 the 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 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.
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 continued to be developed as a
low-cost 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 lands 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 of 22 November 1990 by 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.
EN BANC This is a petition for review filed by the
Department of Agrarian Reform (DAR) of the
Decision and Resolution of the Court of
DEPARTMENT OF AGRARIAN G.R. No. Appeals, dated September 19, 2003 and
162070 February 4, 2004, respectively, which
REFORM, represented by SECRETARY declared DAR Administrative Order (A.O.)
JOSE MARI B. PONCE (OIC), Present: No. 9, series of 1993, null and void for being
Petitioner, Davide, C.J., violative of the Constitution.
Puno,
Panganiban, The case at bar involves a land in Aroroy,
Quisumbing, Masbate, inherited by respondents which
Ynares-Santiago, has been devoted exclusively to cow and
Sandoval-Gutierrez, calf breeding. On October 26, 1987,
Carpio, pursuant to the then existing agrarian reform
- versus - Austria-Martinez, program of the government, respondents
Corona, made a voluntary offer to sell (VOS)[1] their
Carpio Morales, landholdings to petitioner DAR to avail of
Callejo, Sr., certain incentives under the law.
Azcuna,
Tinga, On June 10, 1988, a new agrarian law,
Chico-Nazario and Republic Act (R.A.) No. 6657, also known as
Garcia, JJ. the Comprehensive Agrarian Reform Law
DELIA T. SUTTON, ELLA T. (CARL) of 1988, took effect. It included in its
SUTTON-SOLIMAN and Promulgated: coverage farms used for raising livestock,
HARRY T. SUTTON, poultry and swine.
Respondents. October 19, 2005
x------------------------------- On December 4, 1990, in an en banc
----x decision in the case of Luz Farms v.
Secretary of DAR,[2] this Court ruled that
lands devoted to livestock and poultry-
DECISION raising are not included in the definition of
agricultural land. Hence, we declared as
unconstitutional certain provisions of the
PUNO, J.: CARL insofar as they included livestock
farms in the coverage of agrarian reform.
In view of the Luz Farms ruling, respondents
filed with petitioner DAR a formal request to
withdraw their VOS as their landholding was
devoted exclusively to cattle-raising and thus
exempted from the coverage of the CARL.[3]
On December 21, 1992, the Municipal
Agrarian Reform Officer of Aroroy, Masbate,
inspected respondents land and found that it
was devoted solely to cattle-raising and
breeding. He recommended to the DAR
Secretary that it be exempted from the
coverage of the CARL.
On April 27, 1993, respondents reiterated to
petitioner DAR the withdrawal of their VOS
and requested the return of the supporting
papers they submitted in connection
therewith.[4] Petitioner ignored their request.
On December 27, 1993, DAR issued A.O.
No. 9, series of 1993,[5] which provided that
only portions of private agricultural lands
used for the raising of livestock, poultry and
swine as of June 15, 1988 shall be excluded
from the coverage of the CARL. In
determining the area of land to be excluded,
the A.O. fixed the following retention limits,
viz: 1:1 animal-land ratio (i.e., 1 hectare of
land per 1 head of animal shall be retained
by the landowner), and a ratio of 1.7815
hectares for livestock infrastructure for every
21 heads of cattle shall likewise be excluded
from the operations of the CARL.
On February 4, 1994, respondents wrote the
DAR Secretary and advised him to consider
as final and irrevocable the withdrawal of
their VOS as, under the Luz Farms doctrine,
their entire landholding is exempted from the
CARL.[6]
On September 14, 1995, then DAR
Secretary Ernesto D. Garilao issued an
Order[7] partially granting the application of
respondents for exemption from the
coverage of CARL. Applying the retention
limits outlined in the DAR A.O. No. 9,
petitioner exempted 1,209 hectares of
respondents land for grazing purposes, and
a maximum of 102.5635 hectares for
infrastructure. Petitioner ordered the rest of
respondents landholding to be segregated
and placed under Compulsory Acquisition.
Respondents moved for reconsideration.
They contend that their entire landholding
should be exempted as it is devoted
exclusively to cattle-raising. Their motion
was denied.[8] They filed a notice of
appeal[9] with the Office of the President
assailing: (1) the reasonableness and
validity of DAR A.O. No. 9, s. 1993, which
provided for a ratio between land and
livestock in determining the land area
qualified for exclusion from the CARL, and
(2) the constitutionality of DAR A.O. No. 9, s.
1993, in view of the Luz Farms case which
declared cattle-raising lands excluded from
the coverage of agrarian reform.
On October 9, 2001, the Office of the
President affirmed the impugned Order of
petitioner DAR.[10] It ruled that DAR A.O.
No. 9, s. 1993, does not run counter to the
Luz Farms case as the A.O. provided the
guidelines to determine whether a certain
parcel of land is being used for cattle-raising.
However, the issue on the constitutionality of
the assailed A.O. was left for the
determination of the courts as the sole
arbiters of such issue.
On appeal, the Court of Appeals ruled in
favor of the respondents. It declared DAR
A.O. No. 9, s. 1993, void for being contrary
to the intent of the 1987 Constitutional
Commission to exclude livestock farms from
the land reform program of the government.
The dispositive portion reads:
WHEREFORE, premises considered, DAR
Administrative Order No. 09, Series of 1993
is hereby DECLARED null and void. The
assailed order of the Office of the President
dated 09 October 2001 in so far as it
affirmed the Department of Agrarian
Reforms ruling that petitioners landholding is
covered by the agrarian reform program of
the government is REVERSED and SET
ASIDE.
SO ORDERED.[11]
Hence, this petition.
The main issue in the case at bar is the
constitutionality of DAR A.O. No. 9, series of
1993, which prescribes a maximum retention
limit for owners of lands devoted to livestock
raising.
Invoking its rule-making power under
Section 49 of the CARL, petitioner submits
that it issued DAR A.O. No. 9 to limit the
area of livestock farm that may be retained
by a landowner pursuant to its mandate to
place all public and private agricultural lands
under the coverage of agrarian reform.
Petitioner also contends that the A.O. seeks
to remedy reports that some unscrupulous
landowners have converted their agricultural
farms to livestock farms in order to evade
their coverage in the agrarian reform
program.
Petitioners arguments fail to impress.
Administrative agencies are endowed with
powers legislative in nature, i.e., the power
to make rules and regulations. They have
been granted by Congress with the authority
to issue rules to regulate the implementation
of a law entrusted to them. Delegated rule-
making has become a practical necessity in
modern governance due to the increasing
complexity and variety of public functions.
However, while administrative rules and
regulations have the force and effect of law,
they are not immune from judicial review.[12]
They may be properly challenged before the
courts to ensure that they do not violate the
Constitution and no grave abuse of
administrative discretion is committed by the
administrative body concerned.
The fundamental rule in administrative law is
that, to be valid, administrative rules and
regulations must be issued by authority of a
law and must not contravene the provisions
of the Constitution.[13] The rule-making
power of an administrative agency may not
be used to abridge the authority given to it
by Congress or by the Constitution. Nor can
it be used to enlarge the power of the
administrative agency beyond the scope
intended. Constitutional and statutory
provisions control with respect to what rules
and regulations may be promulgated by
administrative agencies and the scope of
their regulations.[14]
In the case at bar, we find that the impugned
A.O. is invalid as it contravenes the
Constitution. The A.O. sought to regulate
livestock farms by including them in the
coverage of agrarian reform and prescribing
a maximum retention limit for their
ownership. However, the deliberations of the
1987 Constitutional Commission show a
clear intent to exclude, inter alia, all lands
exclusively devoted to livestock, swine and
poultry- raising. The Court clarified in the
Luz Farms case that livestock, swine and
poultry-raising are industrial activities and do
not fall within the definition of agriculture or
agricultural activity. The raising of livestock,
swine and poultry is different from crop or
tree farming. It is an industrial, not an
agricultural, activity. A great portion of the
investment in this enterprise is in the form of
industrial fixed assets, such as: animal
housing structures and facilities, drainage,
waterers and blowers, feedmill with grinders,
mixers, conveyors, exhausts and
generators, extensive warehousing facilities
for feeds and other supplies, anti-pollution
equipment like bio-gas and digester plants
augmented by lagoons and concrete ponds,
deepwells, elevated water tanks,
pumphouses, sprayers, and other
technological appurtenances.[15]
Clearly, petitioner DAR has no power to
regulate livestock farms which have been
exempted by the Constitution from the
coverage of agrarian reform. It has
exceeded its power in issuing the assailed
A.O.
The subsequent case of Natalia Realty, Inc.
v. DAR[16] reiterated our ruling in the Luz
Farms case. In Natalia Realty, the Court
held that industrial, commercial and
residential lands are not covered by the
CARL.[17] We stressed anew that while
Section 4 of R.A. No. 6657 provides that the
CARL shall cover all public and private
agricultural lands, the term agricultural land
does not include lands classified as mineral,
forest, residential, commercial or industrial.
Thus, in Natalia Realty, even portions of the
Antipolo Hills Subdivision, which are arable
yet still undeveloped, could not be
considered as agricultural lands subject to
agrarian reform as these lots were already
classified as residential lands.
A similar logical deduction should be
followed in the case at bar. Lands devoted to
raising of livestock, poultry and swine have
been classified as industrial, not agricultural,
lands and thus exempt from agrarian reform.
Petitioner DAR argues that, in issuing the
impugned A.O., it was seeking to address
the reports it has received that some
unscrupulous landowners have been
converting their agricultural lands to
livestock farms to avoid their coverage by
the agrarian reform. Again, we find neither
merit nor logic in this contention. The
undesirable scenario which petitioner seeks
to prevent with the issuance of the A.O.
clearly does not apply in this case.
Respondents family acquired their
landholdings as early as 1948. They have
long been in the business of breeding cattle
in Masbate which is popularly known as the
cattle-breeding capital of the Philippines.[18]
Petitioner DAR does not dispute this fact.
Indeed, there is no evidence on record that
respondents have just recently engaged in
or converted to the business of breeding
cattle after the enactment of the CARL that
may lead one to suspect that respondents
intended to evade its coverage. It must be
stressed that what the CARL prohibits is the
conversion of agricultural lands for non-
agricultural purposes after the effectivity of
the CARL. There has been no change of
business interest in the case of respondents.
Moreover, it is a fundamental rule of
statutory construction that the reenactment
of a statute by Congress without substantial
change is an implied legislative approval and
adoption of the previous law. On the other
hand, by making a new law, Congress seeks
to supersede an earlier one.[19] In the case
at bar, after the passage of the 1988 CARL,
Congress enacted R.A. No. 7881[20] which
amended certain provisions of the CARL.
Specifically, the new law changed the
definition of the terms agricultural activity
and commercial farming by dropping from its
coverage lands that are devoted to
commercial livestock, poultry and swine- Republic of the Philippines
raising.[21] With this significant modification, Supreme Court
Congress clearly sought to align the Manila
provisions of our agrarian laws with the
intent of the 1987 Constitutional Commission
to exclude livestock farms from the coverage SECOND DIVISION
of agrarian reform.
In sum, it is doctrinal that rules of MILESTONE FARMS, INC.,
administrative bodies must be in harmony Petitioner,
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 - versus -
the provisions of the Constitution, the latter
prevails.[22] The assailed A.O. of petitioner
DAR was properly stricken down as
unconstitutional as it enlarges the coverage
of agrarian reform beyond the scope
intended by the 1987 Constitution. OFFICE OF THE PRESIDENT,
Respondent.
IN VIEW WHEREOF, the petition is G.R. No. 182332
DISMISSED. The assailed Decision and
Resolution of the Court of Appeals, dated Present:
September 19, 2003 and February 4, 2004,
respectively, are AFFIRMED. No CARPIO, J.,
pronouncement as to costs. Chairperson,
NACHURA,
SO ORDERED. PERALTA,
ABAD, and
VILLARAMA, JR.,* JJ.
Promulgated:
February 23, 2011
x----------------------------------------------------------
-------------------x
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on
Certiorari[1] under Rule 45 of the Rules of
Civil Procedure, seeking the reversal of the
Court of Appeals (CA) Amended Decision[2]
dated October 4, 2006 and its Resolution[3]
dated March 27, 2008.
The Facts
Petitioner Milestone Farms, Inc. (petitioner)
was incorporated with the Securities and
Exchange Commission on January 8, 1960.
[4] Among its pertinent secondary purposes
are: (1) to engage in the raising of cattle,
pigs, and other livestock; to acquire lands by
purchase or lease, which may be needed for
this purpose; and to sell and otherwise
dispose of said cattle, pigs, and other
livestock and their produce when advisable
and beneficial to the corporation; (2) to
breed, raise, and sell poultry; to purchase or
acquire and sell, or otherwise dispose of the
supplies, stocks, equipment, accessories,
appurtenances, products, and by-products of
said business; and (3) to import cattle, pigs,
and other livestock, and animal food
necessary for the raising of said cattle, pigs,
and other livestock as may be authorized by
law.[5]
On June 10, 1988, a new agrarian reform
law, Republic Act (R.A.) No. 6657, otherwise
known as the Comprehensive Agrarian
Reform Law (CARL), took effect, which
included the raising of livestock, poultry, and
swine in its coverage. However, on
December 4, 1990, this Court, sitting en
banc, ruled in Luz Farms v. Secretary of the
Department of Agrarian Reform[6] that
agricultural lands devoted to livestock,
poultry, and/or swine raising are excluded
from the Comprehensive Agrarian Reform
Program (CARP).
Thus, in May 1993, petitioner applied for the
exemption/exclusion of its 316.0422-hectare
property, covered by Transfer Certificate of
Title Nos. (T-410434) M-15750, (T-486101)
M-7307, (T-486102) M-7308, (T-274129)
M-15751, (T-486103) M-7309, (T-486104)
M-7310, (T-332694) M-15755, (T-486105)
M-7311, (T-486106) M-7312, M-8791,
(T-486107) M-7313, (T-486108) M-7314,
M-8796, (T-486109) M-7315, (T-486110)
M-9508, and M-6013, and located in
Pinugay, Baras, Rizal, from the coverage of
the CARL, pursuant to the aforementioned
ruling of this Court in Luz Farms.
Meanwhile, on December 27, 1993, the
Department of Agrarian Reform (DAR)
issued Administrative Order No. 9, Series of
1993 (DAR A.O. No. 9), setting forth rules
and regulations to govern the exclusion of
agricultural lands used for livestock, poultry,
and swine raising from CARP coverage.
Thus, on January 10, 1994, petitioner re-
documented its application pursuant to DAR
A.O. No. 9.[7]
Acting on the said application, the DARs
Land Use Conversion and Exemption
Committee (LUCEC) of Region IV conducted
an ocular inspection on petitioners property
and arrived at the following findings:
[T]he actual land utilization for livestock,
swine and poultry is 258.8422 hectares; the
area which served as infrastructure is
42.0000 hectares; ten (10) hectares are
planted to corn and the remaining five (5)
hectares are devoted to fish culture; that the
livestock population are 371 heads of cow,
20 heads of horses, 5,678 heads of swine
and 788 heads of cocks; that the area being
applied for exclusion is far below the
required or ideal area which is 563 hectares
for the total livestock population; that the
approximate area not directly used for
livestock purposes with an area of 15
hectares, more or less, is likewise far below
the allowable 10% variance; and, though not
directly used for livestock purposes, the ten
(10) hectares planted to sweet corn and the
five (5) hectares devoted to fishpond could
be considered supportive to livestock
production.
The LUCEC, thus, recommended the
exemption of petitioners 316.0422-hectare
property from the coverage of CARP.
Adopting the LUCECs findings and
recommendation, DAR Regional Director
Percival Dalugdug (Director Dalugdug)
issued an Order dated June 27, 1994,
exempting petitioners 316.0422-hectare
property from CARP.[8]
The Southern Pinugay Farmers Multi-
Purpose Cooperative, Inc. (Pinugay
Farmers), represented by Timiano Balajadia,
Sr. (Balajadia), moved for the
reconsideration of the said Order, but the
same was denied by Director Dalugdug in
his Order dated November 24, 1994.[9]
Subsequently, the Pinugay Farmers filed a
letter-appeal with the DAR Secretary.
Correlatively, on June 4, 1994, petitioner
filed a complaint for Forcible Entry against
Balajadia and company before the Municipal
Circuit Trial Court (MCTC) of Teresa-Baras,
Rizal, docketed as Civil Case No. 781-T.[10]
The MCTC ruled in favor of petitioner, but
the decision was later reversed by the
Regional Trial Court, Branch 80, of Tanay,
Rizal. Ultimately, the case reached the CA,
which, in its Decision[11] dated October 8,
1999, reinstated the MCTCs ruling, ordering
Balajadia and all defendants therein to
vacate portions of the property covered by
TCT Nos. M-6013, M-8796, and M-8791. In
its Resolution[12] dated July 31, 2000, the
CA held that the defendants therein failed to
timely file a motion for reconsideration, given
the fact that their counsel of record received
its October 8, 1999 Decision; hence, the
same became final and executory.
In the meantime, R.A. No. 6657 was
amended by R.A. No. 7881,[13] which was
approved on February 20, 1995. Private
agricultural lands devoted to livestock,
poultry, and swine raising were excluded
from the coverage of the CARL. On October
22, 1996, the fact-finding team formed by
the DAR Undersecretary for Field
Operations and Support Services conducted
an actual headcount of the livestock
population on the property. The headcount
showed that there were 448 heads of cattle
and more than 5,000 heads of swine.
The DAR Secretarys Ruling
On January 21, 1997, then DAR Secretary
Ernesto D. Garilao (Secretary Garilao)
issued an Order exempting from CARP only
240.9776 hectares of the 316.0422 hectares
previously exempted by Director Dalugdug,
and declaring 75.0646 hectares of the
property to be covered by CARP.[14]
Secretary Garilao opined that, for private
agricultural lands to be excluded from CARP,
they must already be devoted to livestock,
poultry, and swine raising as of June 15,
1988, when the CARL took effect. He found
that the Certificates of Ownership of Large
Cattle submitted by petitioner showed that
only 86 heads of cattle were registered in
the name of petitioners president, Misael
Vera, Jr., prior to June 15, 1988; 133 were
subsequently bought in 1990, while 204
were registered from 1992 to 1995.
Secretary Garilao gave more weight to the
certificates rather than to the headcount
because the same explicitly provide for the
number of cattle owned by petitioner as of
June 15, 1988.
Applying the animal-land ratio (1 hectare for
grazing for every head of cattle/carabao/
horse) and the infrastructure-animal ratio
(1.7815 hectares for 21 heads of cattle/
carabao/horse, and 0.5126 hectare for 21
heads of hogs) under DAR A.O. No. 9,
Secretary Garilao exempted 240.9776
hectares of the property, as follows:
1. 86 hectares for the 86 heads of cattle
existing as of 15 June 1988;
2. 8 hectares for infrastructure following the
ratio of 1.7815 hectares for every 21 heads
of cattle;
3. 8 hectares for the 8 horses;
4. 0.3809 square meters of infrastructure
for the 8 horses; [and]
5. 138.5967 hectares for the 5,678 heads
of swine.[15]
Petitioner filed a Motion for Reconsideration,
[16] submitting therewith copies of
Certificates of Transfer of Large Cattle and
additional Certificates of Ownership of Large
Cattle issued to petitioner prior to June 15,
1988, as additional proof that it had met the
required animal-land ratio. Petitioner also
submitted a copy of a Disbursement
Voucher dated December 17, 1986, showing
the purchase of 100 heads of cattle by the
Bureau of Animal Industry from petitioner, as
further proof that it had been actively
operating a livestock farm even before June
15, 1988. However, in his Order dated April
15, 1997, Secretary Garilao denied
petitioners Motion for Reconsideration.[17]
Aggrieved, petitioner filed its Memorandum
on Appeal[18] before the Office of the
President (OP).
The OPs Ruling
On February 4, 2000, the OP rendered a
decision[19] reinstating Director Dalugdugs
Order dated June 27, 1994 and declared the
entire 316.0422-hectare property exempt
from the coverage of CARP.
However, on separate motions for
reconsideration of the aforesaid decision
filed by farmer-groups Samahang Anak-
Pawis ng Lagundi (SAPLAG) and Pinugay
Farmers, and the Bureau of Agrarian Legal
Assistance of DAR, the OP issued a
resolution[20] dated September 16, 2002,
setting aside its previous decision. The
dispositive portion of the OP resolution
reads:
WHEREFORE, the Decision subject of the
instant separate motions for reconsideration
is hereby SET ASIDE and a new one
entered REINSTATING the Order dated 21
January 1997 of then DAR Secretary
Ernesto D. Garilao, as reiterated in another
Order of 15 April 1997, without prejudice to
the outcome of the continuing review and
verification proceedings that DAR, thru the
appropriate Municipal Agrarian Reform
Officer, may undertake pursuant to Rule III
(D) of DAR Administrative Order No. 09,
series of 1993.
SO ORDERED.[21]
The OP held that, when it comes to proof of
ownership, the reference is the Certificate of
Ownership of Large Cattle. Certificates of
cattle ownership, which are readily available
being issued by the appropriate government
office ought to match the number of heads of
cattle counted as existing during the actual
headcount. The presence of large cattle on
the land, without sufficient proof of
ownership thereof, only proves such
presence.
Taking note of Secretary Garilaos
observations, the OP also held that, before
an ocular investigation is conducted on the
property, the landowners are notified in
advance; hence, mere reliance on the
physical headcount is dangerous because
there is a possibility that the landowners
would increase the number of their cattle for
headcount purposes only. The OP observed
that there was a big variance between the
actual headcount of 448 heads of cattle and
only 86 certificates of ownership of large
cattle.
Consequently, petitioner sought recourse
from the CA.[22]
The Proceedings Before the CA and Its
Rulings
On April 29, 2005, the CA found that, based
on the documentary evidence presented, the
property subject of the application for
exclusion had more than satisfied the
animal-land and infrastructure-animal ratios
under DAR A.O. No. 9. The CA also found
that petitioner applied for exclusion long
before the effectivity of DAR A.O. No. 9,
thus, negating the claim that petitioner
merely converted the property for livestock,
poultry, and swine raising in order to exclude
it from CARP coverage. Petitioner was held
to have actually engaged in the said
business on the property even before June
15, 1988. The CA disposed of the case in
this wise:
WHEREFORE, the instant petition is hereby
GRANTED. The assailed Resolution of the
Office of the President dated September 16,
2002 is hereby SET ASIDE, and its Decision
dated February 4, 2000 declaring the entire
316.0422 hectares exempt from the
coverage of the Comprehensive Agrarian
Reform Program is hereby REINSTATED
without prejudice to the outcome of the
continuing review and verification
proceedings which the Department of
Agrarian Reform, through the proper
Municipal Agrarian Reform Officer, may
undertake pursuant to Policy Statement (D)
of DAR Administrative Order No. 9, Series of
1993.
SO ORDERED.[23]
Meanwhile, six months earlier, or on
November 4, 2004, without the knowledge of
the CA as the parties did not inform the
appellate court then DAR Secretary Rene C.
Villa (Secretary Villa) issued DAR
Conversion Order No. CON-0410-0016[24]
(Conversion Order), granting petitioners
application to convert portions of the
316.0422-hectare property from agricultural
to residential and golf courses use. The
portions converted with a total area of
153.3049 hectares were covered by TCT
Nos. M-15755 (T-332694), M-15751
(T-274129), and M-15750 (T-410434). With
this Conversion Order, the area of the
property subject of the controversy was
effectively reduced to 162.7373 hectares.
On the CAs decision of April 29, 2005,
Motions for Reconsideration were filed by
farmer-groups, namely: the farmers
represented by Miguel Espinas[25] (Espinas
group), the Pinugay Farmers,[26] and the
SAPLAG.[27] The farmer-groups all claimed
that the CA should have accorded respect to
the factual findings of the OP. Moreover, the
farmer-groups unanimously intimated that
petitioner already converted and developed
a portion of the property into a leisure-
residential-commercial estate known as the
Palo Alto Leisure and Sports Complex (Palo
Alto).
Subsequently, in a Supplement to the Motion
for Reconsideration on Newly Secured
Evidence pursuant to DAR Administrative
Order No. 9, Series of 1993[28]
(Supplement) dated June 15, 2005, the
Espinas group submitted the following as
evidence:
1) Conversion Order[29] dated November 4,
2004, issued by Secretary Villa, converting
portions of the property from agricultural to
residential and golf courses use, with a total
area of 153.3049 hectares; thus, the
Espinas group prayed that the remaining
162.7373 hectares (subject property) be
covered by the CARP;
2) Letter[30] dated June 7, 2005 of both
incoming Municipal Agrarian Reform Officer
(MARO) Bismark M. Elma (MARO Elma)
and outgoing MARO Cesar C. Celi (MARO
Celi) of Baras, Rizal, addressed to Provincial
Agrarian Reform Officer (PARO) II of Rizal,
Felixberto Q. Kagahastian, (MARO Report),
informing the latter, among others, that Palo
Alto was already under development and the
lots therein were being offered for sale; that
there were actual tillers on the subject
property; that there were agricultural
improvements thereon, including an
irrigation system and road projects funded
by the Government; that there was no
existing livestock farm on the subject
property; and that the same was not in the
possession and/or control of petitioner; and
3) Certification[31] dated June 8, 2005,
issued by both MARO Elma and MARO Celi,
manifesting that the subject property was in
the possession and cultivation of actual
occupants and tillers, and that, upon
inspection, petitioner maintained no livestock
farm thereon.
Four months later, the Espinas group and
the DAR filed their respective
Manifestations.[32] In its Manifestation dated
November 29, 2005, the DAR confirmed that
the subject property was no longer devoted
to cattle raising. Hence, in its Resolution[33]
dated December 21, 2005, the CA directed
petitioner to file its comment on the
Supplement and the aforementioned
Manifestations. Employing the services of a
new counsel, petitioner filed a Motion to
Admit Rejoinder,[34] and prayed that the
MARO Report be disregarded and expunged
from the records for lack of factual and legal
basis.
With the CA now made aware of these
developments, particularly Secretary Villas
Conversion Order of November 4, 2004, the
appellate court had to acknowledge that the
property subject of the controversy would
now be limited to the remaining 162.7373
hectares. In the same token, the Espinas
group prayed that this remaining area be
covered by the CARP.[35]
On October 4, 2006, the CA amended its
earlier Decision. It held that its April 29, 2005
Decision was theoretically not final because
DAR A.O. No. 9 required the MARO to make
a continuing review and verification of the
subject property. While the CA was
cognizant of our ruling in Department of
Agrarian Reform v. Sutton,[36] wherein we
declared DAR A.O. No. 9 as
unconstitutional, it still resolved to lift the
exemption of the subject property from the
CARP, not on the basis of DAR A.O. No. 9,
but on the strength of evidence such as the
MARO Report and Certification, and the
Katunayan[37] issued by the Punong
Barangay, Alfredo Ruba (Chairman Ruba),
of Pinugay, Baras, Rizal, showing that the
subject property was no longer operated as
a livestock farm. Moreover, the CA held that
the lease agreements,[38] which petitioner
submitted to prove that it was compelled to
lease a ranch as temporary shelter for its
cattle, only reinforced the DARs finding that
there was indeed no existing livestock farm
on the subject property. While petitioner
claimed that it was merely forced to do so to
prevent further slaughtering of its cattle
allegedly committed by the occupants, the
CA found the claim unsubstantiated.
Furthermore, the CA opined that petitioner
should have asserted its rights when the
irrigation and road projects were introduced
by the Government within its property.
Finally, the CA accorded the findings of
MARO Elma and MARO Celi the
presumption of regularity in the performance
of official functions in the absence of
evidence proving misconduct and/or
dishonesty when they inspected the subject
property and rendered their report. Thus, the
CA disposed:
WHEREFORE, this Courts Decision dated
April 29, 2005 is hereby amended in that the
exemption of the subject landholding from
the coverage of the Comprehensive Agrarian
Reform Program is hereby lifted, and the
162.7373 hectare-agricultural portion thereof
is hereby declared covered by the
Comprehensive Agrarian Reform Program.
SO ORDERED.[39]
Unperturbed, petitioner filed a Motion for
Reconsideration.[40] On January 8, 2007,
MARO Elma, in compliance with the
Memorandum of DAR Regional Director
Dominador B. Andres, tendered another
Report[41] reiterating that, upon inspection
of the subject property, together with
petitioners counsel-turned witness, Atty.
Grace Eloisa J. Que (Atty. Que), PARO
Danilo M. Obarse, Chairman Ruba, and
several occupants thereof, he, among
others, found no livestock farm within the
subject property. About 43 heads of cattle
were shown, but MARO Elma observed that
the same were inside an area adjacent to
Palo Alto. Subsequently, upon Atty. Ques
request for reinvestigation, designated
personnel of the DAR Provincial and
Regional Offices (Investigating Team)
conducted another ocular inspection on the
subject property on February 20, 2007. The
Investigating Team, in its Report[42] dated
February 21, 2007, found that, per testimony
of petitioners caretaker, Rogelio Ludivices
(Roger),[43] petitioner has 43 heads of cattle
taken care of by the following individuals: i)
Josefino Custodio (Josefino) 18 heads; ii)
Andy Amahit 15 heads; and iii) Bert Pangan
2 heads; that these individuals pastured the
herd of cattle outside the subject property,
while Roger took care of 8 heads of cattle
inside the Palo Alto area; that 21 heads of
cattle owned by petitioner were seen in the
area adjacent to Palo Alto; that Josefino
confirmed to the Investigating Team that he
takes care of 18 heads of cattle owned by
petitioner; that the said Investigating Team
saw 9 heads of cattle in the Palo Alto area, 2
of which bore MFI marks; and that the 9
heads of cattle appear to have matched the
Certificates of Ownership of Large Cattle
submitted by petitioner.
Because of the contentious factual issues
and the conflicting averments of the parties,
the CA set the case for hearing and
reception of evidence on April 24, 2007.[44]
Thereafter, as narrated by the CA, the
following events transpired:
On May 17, 2007, [petitioner] presented the
Judicial Affidavits of its witnesses, namely,
[petitioners] counsel, [Atty. Que], and the
alleged caretaker of [petitioners] farm,
[Roger], who were both cross-examined by
counsel for farmers-movants and SAPLAG.
[Petitioner] and SAPLAG then marked their
documentary exhibits.
On May 24, 2007, [petitioners] security
guard and third witness, Rodolfo G.
Febrada, submitted his Judicial Affidavit and
was cross-examined by counsel for
fa[r]mers-movants and SAPLAG. Farmers-
movants also marked their documentary
exhibits.
Thereafter, the parties submitted their
respective Formal Offers of Evidence.
Farmers-movants and SAPLAG filed their
objections to [petitioners] Formal Offer of
Evidence. Later, [petitioner] and farmers-
movants filed their respective Memoranda.
In December 2007, this Court issued a
Resolution on the parties offer of evidence
and considered [petitioners] Motion for
Reconsideration submitted for resolution.[45]
Finally, petitioners motion for reconsideration
was denied by the CA in its Resolution[46]
dated March 27, 2008. The CA discarded
petitioners reliance on Sutton. It ratiocinated
that the MARO Reports and the DARs
Manifestation could not be disregarded
simply because DAR A.O. No. 9 was
declared unconstitutional. The Sutton ruling
was premised on the fact that the Sutton
property continued to operate as a livestock
farm. The CA also reasoned that, in Sutton,
this Court did not remove from the DAR the
power to implement the CARP, pursuant to
the latters authority to oversee the
implementation of agrarian reform laws
under Section 50[47] of the CARL.
Moreover, the CA found:
Petitioner-appellant claimed that they had 43
heads of cattle which are being cared for
and pastured by 4 individuals. To prove its
ownership of the said cattle, petitioner-
appellant offered in evidence 43 Certificates
of Ownership of Large Cattle. Significantly,
however, the said Certificates were all dated
and issued on November 24, 2006, nearly 2
months after this Court rendered its
Amended Decision lifting the exemption of
the 162-hectare portion of the subject
landholding. The acquisition of such cattle
after the lifting of the exemption clearly
reveals that petitioner-appellant was no
longer operating a livestock farm, and
suggests an effort to create a semblance of
livestock-raising for the purpose of its Motion
for Reconsideration.[48]
On petitioners assertion that between MARO
Elmas Report dated January 8, 2007 and
the Investigating Teams Report, the latter
should be given credence, the CA held that
there were no material inconsistencies
between the two reports because both
showed that the 43 heads of cattle were
found outside the subject property.
Hence, this Petition assigning the following
errors:
I.
THE HONORABLE COURT OF APPEALS
GRAVELY ERRED WHEN IT HELD THAT
LANDS DEVOTED TO LIVESTOCK
FARMING WITHIN THE MEANING OF LUZ
FARMS AND SUTTON, AND WHICH ARE
THEREBY EXEMPT FROM CARL
COVERAGE, ARE NEVERTHELESS
SUBJECT TO DARS CONTINUING
VERIFICATION AS TO USE, AND, ON THE
BASIS OF SUCH VERIFICATION, MAY BE
ORDERED REVERTED TO
AGRICULTURAL CLASSIFICATION AND
COMPULSORY ACQUISITION[;]
II.
GRANTING THAT THE EXEMPT LANDS
AFORESAID MAY BE SO REVERTED TO
AGRICULTURAL CLASSIFICATION, STILL
THE PROCEEDINGS FOR SUCH
PURPOSE BELONGS TO THE EXCLUSIVE
ORIGINAL JURISDICTION OF THE DAR,
BEFORE WHICH THE CONTENDING
PARTIES MAY VENTILATE FACTUAL
ISSUES, AND AVAIL THEMSELVES OF
USUAL REVIEW PROCESSES, AND NOT
TO THE COURT OF APPEALS
EXERCISING APPELLATE JURISDICTION
OVER ISSUES COMPLETELY
UNRELATED TO REVERSION [; AND]
III.
IN ANY CASE, THE COURT OF APPEALS
GRAVELY ERRED AND COMMITTED
GRAVE ABUSE OF DISCRETION WHEN IT
HELD THAT THE PROPERTY IN DISPUTE
IS NO LONGER BEING USED FOR
LIVESTOCK FARMING.[49]
Petitioner asseverates that lands devoted to
livestock farming as of June 15, 1988 are
classified as industrial lands, hence, outside
the ambit of the CARP; that Luz Farms,
Sutton, and R.A. No. 7881 clearly excluded
such lands on constitutional grounds; that
petitioners lands were actually devoted to
livestock even before the enactment of the
CARL; that livestock farms are exempt from
the CARL, not by reason of any act of the
DAR, but because of their nature as
industrial lands; that petitioners property was
admittedly devoted to livestock farming as of
June 1988 and the only issue before was
whether or not petitioners pieces of evidence
comply with the ratios provided under DAR
A.O. No. 9; and that DAR A.O. No. 9 having
been declared as unconstitutional, DAR had
no more legal basis to conduct a continuing
review and verification proceedings over
livestock farms. Petitioner argues that, in
cases where reversion of properties to
agricultural use is proper, only the DAR has
the exclusive original jurisdiction to hear and
decide the same; hence, the CA, in this
case, committed serious errors when it
ordered the reversion of the property and
when it considered pieces of evidence not
existing as of June 15, 1988, despite its lack
of jurisdiction; that the CA should have
remanded the case to the DAR due to
conflicting factual claims; that the CA cannot
ventilate allegations of fact that were
introduced for the first time on appeal as a
supplement to a motion for reconsideration
of its first decision, use the same to deviate
from the issues pending review, and, on the
basis thereof, declare exempt lands reverted
to agricultural use and compulsorily covered
by the CARP; that the newly discovered
[pieces of] evidence were not introduced in
the proceedings before the DAR, hence, it
was erroneous for the CA to consider them;
and that piecemeal presentation of evidence
is not in accord with orderly justice. Finally,
petitioner submits that, in any case, the CA
gravely erred and committed grave abuse of
discretion when it held that the subject
property was no longer used for livestock
farming as shown by the Report of the
Investigating Team. Petitioner relies on the
1997 LUCEC and DAR findings that the
subject property was devoted to livestock
farming, and on the 1999 CA Decision which
held that the occupants of the property were
squatters, bereft of any authority to stay and
possess the property.[50]
On one hand, the farmer-groups,
represented by the Espinas group, contend
that they have been planting rice and fruit-
bearing trees on the subject property, and
helped the National Irrigation Administration
in setting up an irrigation system therein in
1997, with a produce of 1,500 to 1,600
sacks of palay each year; that petitioner
came to court with unclean hands because,
while it sought the exemption and exclusion
of the entire property, unknown to the CA,
petitioner surreptitiously filed for conversion
of the property now known as Palo Alto,
which was actually granted by the DAR
Secretary; that petitioners bad faith is more
apparent since, despite the conversion of
the 153.3049-hectare portion of the property,
it still seeks to exempt the entire property in
this case; and that the fact that petitioner
applied for conversion is an admission that
indeed the property is agricultural. The
farmer-groups also contend that petitioners
reliance on Luz Farms and Sutton is
unavailing because in these cases there was
actually no cessation of the business of
raising cattle; that what is being exempted is
the activity of raising cattle and not the
property itself; that exemptions due to cattle
raising are not permanent; that the
declaration of DAR A.O. No. 9 as
unconstitutional does not at all diminish the
mandated duty of the DAR, as the lead
agency of the Government, to implement the
CARL; that the DAR, vested with the power
to identify lands subject to CARP, logically
also has the power to identify lands which
are excluded and/or exempted therefrom;
that to disregard DARs authority on the
matter would open the floodgates to abuse
and fraud by unscrupulous landowners; that
the factual finding of the CA that the subject
property is no longer a livestock farm may
not be disturbed on appeal, as enunciated
by this Court; that DAR conducted a review
and monitoring of the subject property by
virtue of its powers under the CARL; and
that the CA has sufficient discretion to admit
evidence in order that it could arrive at a fair,
just, and equitable ruling in this case.[51]
On the other hand, respondent OP, through
the Office of the Solicitor General (OSG),
claims that the CA correctly held that the
subject property is not exempt from the
coverage of the CARP, as substantial pieces
of evidence show that the said property is
not exclusively devoted to livestock, swine,
and/or poultry raising; that the issues
presented by petitioner are factual in nature
and not proper in this case; that under Rule
43 of the 1997 Rules of Civil Procedure,
questions of fact may be raised by the
parties and resolved by the CA; that due to
the divergence in the factual findings of the
DAR and the OP, the CA was duty bound to
review and ascertain which of the said
findings are duly supported by substantial
evidence; that the subject property was
subject to continuing review and verification
proceedings due to the then prevailing DAR
A.O. No. 9; that there is no question that the
power to determine if a property is subject to
CARP coverage lies with the DAR
Secretary; that pursuant to such power, the
MARO rendered the assailed reports and
certification, and the DAR itself manifested
before the CA that the subject property is no
longer devoted to livestock farming; and
that, while it is true that this Courts ruling in
Luz Farms declared that agricultural lands
devoted to livestock, poultry, and/or swine
raising are excluded from the CARP, the
said ruling is not without any qualification.
[52]
In its Reply[53] to the farmer-groups and to
the OSGs comment, petitioner counters that
the farmer-groups have no legal basis to
their claims as they admitted that they
entered the subject property without the
consent of petitioner; that the rice plots
actually found in the subject property, which
were subsequently taken over by squatters,
were, in fact, planted by petitioner in
compliance with the directive of then
President Ferdinand Marcos for the
employer to provide rice to its employees;
that when a land is declared exempt from
the CARP on the ground that it is not
agricultural as of the time the CARL took
effect, the use and disposition of that land is
entirely and forever beyond DARs
jurisdiction; and that, inasmuch as the
subject property was not agricultural from
the very beginning, DAR has no power to
regulate the same. Petitioner also asserts
that the CA cannot uncharacteristically
assume the role of trier of facts and resolve
factual questions not previously adjudicated
by the lower tribunals; that MARO Elma
rendered the assailed MARO reports with
bias against petitioner, and the same were
contradicted by the Investigating Teams
Report, which confirmed that the subject
property is still devoted to livestock farming;
and that there has been no change in
petitioners business interest as an entity
engaged in livestock farming since its
inception in 1960, though there was
admittedly a decline in the scale of its
operations due to the illegal acts of the
squatter-occupants.
Our Ruling
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:
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
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.
` disposition of that land is entirely and forever
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
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.
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.
FIRST DIVISION
[G.R. No. 158228. March 23, 2004]
DEPARTMENT OF AGRARIAN REFORM,
as represented by its Secretary, ROBERTO
M. PAGDANGANAN, petitioner, vs.
DEPARTMENT OF EDUCATION, CULTURE
AND SPORTS (DECS), respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari seeks to
set aside the 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 petitioners
motion for reconsideration.
In controversy are Lot No. 2509 and Lot No.
817-D consisting of an aggregate area of
189.2462 hectares located at Hacienda Fe,
Escalante, Negros Occidental and Brgy.
Gen. Luna, Sagay, Negros Occidental,
respectively. On October 21, 1921, these
lands were donated by the late Esteban
Jalandoni to respondent DECS (formerly
Bureau of Education).[2] Consequently, titles
thereto were transferred in the name of
respondent DECS under Transfer Certificate
of Title No. 167175.[3]
On July 15, 1985, respondent DECS leased
the lands to Anglo Agricultural Corporation
for 10 agricultural crop years, commencing
from crop year 1984-1985 to crop year
1993-1994. The contract of lease was
subsequently renewed for another 10
agricultural crop years, commencing from
crop year 1995-1996 to crop year
2004-2005.[4]
On June 10, 1993, Eugenio Alpar and
several others, claiming to be permanent
and regular farm workers of the subject
lands, filed a petition for Compulsory
Agrarian Reform Program (CARP) coverage
with the Municipal Agrarian Reform Office
(MARO) of Escalante.[5]
After investigation, MARO Jacinto R. 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.
On August 7, 1998, DAR Regional Director
Dominador B. Andres approved the
recommendation, the dispositive portion of
which reads:
WHEREFORE, all the foregoing premises
considered, the petition is granted. Order is
hereby issued:
1. Placing under CARP coverage Lot 2509
with an area of 111.4791 hectares situated at
Had. Fe, Escalante, Negros Occidental and
Lot 817-D with an area of 77.7671 hectares
situated at Brgy. Gen. Luna, Sagay, Negros
Occidental;
2. Affirming the notice of coverage sent by
the DAR Provincial Office, Negros
Occidental dated November 23, 1994;
3. Directing the Provincial Agrarian Reform
Office of Negros Occidental and the
Municipal Agrarian Reform Officers of Sagay
and Escalante to facilitate the acquisition of
the subject landholdings and the distribution
of the same qualified beneficiaries.
SO ORDERED.[7]
Respondent DECS appealed the case to the
Secretary of Agrarian Reform which affirmed
the Order of the Regional Director. [8]
Aggrieved, respondent DECS filed a petition
for certiorari with the Court of Appeals, which
set aside the decision of the Secretary of
Agrarian Reform.[9]
Hence, the instant petition for review.
The pivotal issue to be resolved in this case
is whether or not the subject properties are
exempt from the coverage of Republic Act
No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of
1998 (CARL).
The general policy under CARL is to cover
as much lands suitable for agriculture as
possible.[10] Section 4 of R.A. No. 6657 sets
out the coverage of CARP. It states that the
program shall:
cover, regardless of tenurial arrangement
and commodity produced, all public and
private agricultural lands as provided in
Proclamation No. 131 and Executive Order
No. 229, including other lands of the public
domain suitable for agriculture.
More specifically, the following lands are
covered by the Comprehensive Agrarian
Reform Program:
(a) All alienable and disposable lands of the
public domain devoted to or suitable for
agriculture. No reclassification of forest or
mineral lands to agricultural lands shall be
undertaken after the approval of this Act until
Congress, taking into account, ecological,
developmental and equity considerations,
shall have determined by law, the specific
limits of the public domain;
(b) All lands of the public domain in excess
of the specific limits as determined by
Congress in the preceding paragraph;
(c) All other lands owned by the Government
devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for
agriculture regardless of the agricultural
products raised or that can be raised
thereon.
Section 3(c) thereof defines agricultural land,
as land devoted to agricultural activity as
defined in this Act and not classified as
mineral, forest, residential, commercial or
industrial land. The term agriculture or
agricultural activity is also defined by the
same law as follows:
Agriculture, Agricultural Enterprises or
Agricultural Activity means the cultivation of
the soil, planting of crops, growing of fruit
trees, raising of livestock, poultry or fish,
including the harvesting of such farm
products, and other farm activities, and
practices performed by a farmer in
conjunction with such farming operations
done by persons whether natural or juridical.
[11]
The records of the case show that the
subject properties were formerly private
agricultural lands owned by the late Esteban
Jalandoni, and were donated to respondent
DECS. From that time until they were leased
to Anglo Agricultural Corporation, the lands
continued to be agricultural primarily planted
to sugarcane, albeit part of the public
domain being owned by an agency of the
government.[12] Moreover, there is no
legislative or presidential act, before and
after the enactment of R.A. No. 6657,
classifying the said lands as mineral, forest,
residential, commercial or industrial land.
Indubitably, the subject lands fall under the
classification of lands of the public domain
devoted to or suitable for agriculture.
Respondent DECS sought exemption from
CARP coverage on the ground that all the
income derived from its contract of lease
with Anglo Agricultural Corporation were
actually, directly and exclusively used for
educational purposes, such as for the
repairs and renovations of schools in the
nearby locality.
Petitioner DAR, on the other hand, argued
that the lands subject hereof are not exempt
from the CARP coverage because the same
are not actually, directly and exclusively
used as school sites or campuses, as they
are in fact leased to Anglo Agricultural
Corporation. Further, to be exempt from the
coverage, it is the land per se, not the
income derived therefrom, that must be
actually, directly and exclusively used for
educational purposes.
We agree with the petitioner.
Section 10 of R.A. No. 6657 enumerates the
types of lands which are exempted from the
coverage of CARP as well as the purposes
of their exemption, viz:
xxxxxxxxx
c) 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]
xxxxxxxxx
Clearly, a reading of the paragraph shows
that, in order to be exempt from the
coverage: 1) the land must be actually,
directly, and exclusively used and found to
be necessary; and 2) the purpose is for
school sites and campuses, including
experimental farm stations operated by
public or private schools for educational
purposes.
The importance of the phrase actually,
directly, and exclusively used and found to
be necessary cannot be understated, as
what respondent DECS would want us to do
by not taking the words in their literal and
technical definitions. The words of the law
are clear and unambiguous. Thus, the plain
meaning rule or verba legis in statutory
construction is applicable in this case.
Where the words of a statute are clear, plain
and free from ambiguity, it must be given its
literal meaning and applied without
attempted interpretation.[14]
We are not unaware of our ruling in the case
of Central Mindanao University v.
Department of Agrarian Reform Adjudication
Board,[15] wherein we declared the land
subject thereof exempt from CARP
coverage. However, respondent DECS
reliance thereon is misplaced because the
factual circumstances are different in the
case at bar.
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 and exclusively utilized as school
sites and campuses, as they were leased to
Anglo Agricultural Corporation, not for
educational purposes but for the furtherance
of its business. Also, as conceded by
respondent DECS, it was the income from
the contract of lease and not the subject
lands that was directly used for the repairs
and renovations of the schools in the locality.
Anent the issue of whether the farmers are
qualified beneficiaries of CARP, we disagree
with the Court of Appeals finding that they
were not.
At the outset, it should be pointed out that
the identification of actual and potential
beneficiaries under CARP is vested in the
Secretary of Agrarian Reform pursuant to
Section 15, R.A. No. 6657, which states:
SECTION 15. Registration of Beneficiaries.
The DAR in coordination with the Barangay
Agrarian Reform Committee (BARC) as
organized in this Act, shall register all
agricultural lessees, tenants and
farmworkers who are qualified to be
beneficiaries of the CARP. These potential
beneficiaries with the assistance of the
BARC and the DAR shall provide the
following data:
(a) names and members of their immediate
farm household;
(b) owners or administrators of the lands
they work on and the length of tenurial
relationship;
(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.
EN BANC
ROXAS & COMPANY, INC.,
Petitioner,
- versus -
DAMBA-NFSW and the DEPARTMENT OF
AGRARIAN REFORM,*
Respondents.
x------------------------------------x
DAMAYAN NG MGA MANGGAGAWANG
BUKID SA ASYENDA ROXAS-NATIONAL
FEDERATION OF SUGAR WORKERS
(DAMBA-NFSW),
Petitioner,
- versus -
SECRETARY OF THE DEPT. OF
AGRARIAN REFORM, ROXAS & Co., INC.
AND/OR ATTY. MARIANO AMPIL,
Respondents.
x-----------------------------------x
KATIPUNAN NG MGA MAGBUBUKID SA
HACIENDA ROXAS, INC. (KAMAHARI),
rep. by its President CARLITO CAISIP, and
DAMAYAN NG MANGGAGAWANG BUKID
SA ASYENDA ROXAS-NATIONAL
FEDERATION OF SUGAR WORKERS
(DAMBA-NFSW), represnted by LAURO
MARTIN,
Petitioners,
- versus -
SECRETARY OF THE DEPT. OF
AGRARIAN REFORM, ROXAS & Co., INC.,
Respondents.
x------------------------------------------x
DEPARTMENT OF LAND REFORM,
FORMERLY DEPARTMENT OF AGRARIAN
REFORM (DAR),
Petitioner,
- versus -
ROXAS & CO, INC.,
Respondent.
x------------------------------------x
ROXAS & CO., INC.,
Petitioner,
- versus -
 CARPIO,
DAMBA-NFSW, CORONA,
Respondent. CARPIO MORALES,
x------------------------------------x CHICO-NAZARIO,
VELASCO, JR.,
DAMBA-NFSW REPRESENTED BY NACHURA,
LAURO V. MARTIN, LEONARDO-DE CASTRO, BRION, G.R. No. 167543
Petitioner, PERALTA,
- versus - BERSAMIN,
DEL CASTILLO,
ROXAS & CO., INC., ABAD, and
Respondent. VILLARAMA, JJ.
x------------------------------------x

DAMBA-NFSW, Promulgated:
Petitioner,
December 4, 2009
- versus -

ROXAS & CO., INC., G.R. No. 167540 G.R. No. 167845
Respondent.
G.R. No. 149548

G.R. No. 169163

G.R. No. 167505

Present:

PUNO, C.J.,

G.R. No. 179650
x----------------------------------------------------------
------------------------------x
DECISION
CARPIO MORALES, J.
The main subject of the seven consolidated
petitions is the application of petitioner
Roxas & Co., Inc. (Roxas & Co.) for
conversion from agricultural to non-
agricultural use of its three haciendas
located in Nasugbu, Batangas containing a
total area of almost 3,000 hectares. The
facts are not new, the Court having earlier
resolved intimately-related issues dealing
with these haciendas. Thus, in the 1999
case of Roxas & Co., Inc. v. Court of
Appeals,[1] the Court presented the facts as
follows:
. . . Roxas & Co. is a domestic corporation
and is the registered owner of three
haciendas, namely, Haciendas Palico,
Banilad and Caylaway, all located in the
Municipality of Nasugbu, Batangas.
Hacienda Palico is 1,024 hectares in area
and is registered under Transfer Certificate
of Title (TCT) No. 985. This land is covered
by Tax Declaration Nos. 0465, 0466, 0468,
0470, 0234 and 0354. Hacienda Banilad is
1,050 hectares in area, registered under
TCT No. 924 and covered by Tax
Declaration Nos. 0236, 0237 and 0390.
Hacienda Caylaway is 867.4571 hectares in
area and is registered under TCT Nos.
T-44662, T-44663, T-44664 and T-44665.
xxxx
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 laws 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.
xxxx
Nevertheless, on August 6, 1992, [Roxas &
Co.], through its President, Eduardo J.
Roxas, sent a letter to the Secretary of DAR
withdrawing its VOS of Hacienda Caylaway.
The Sangguniang Bayan of Nasugbu,
Batangas allegedly authorized the
reclassification of Hacienda Caylaway from
agricultural to non-agricultural. As a result,
petitioner informed respondent DAR that it
was applying for conversion of Hacienda
Caylaway from agricultural to other uses.
x x x x[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
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
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.
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 Courts
deliberations.
Essentially, Roxas & Co. filed its application
for conversion of its three haciendas from
argricultural to non-agricultural on the
assumption that the issuance of PP 1520
which declared Nasugbu, Batangas as a
tourism zone, reclassified them to non-
agricultural uses. Its pending application
notwithstanding, the Department of Agrarian
Reform (DAR) issued Certificates of Land
Ownership Award (CLOAs) to the farmer-
beneficiaries in the three haciendas
including CLOA No. 6654 which was issued
on October 15, 1993 covering 513.983
hectares, the subject of G.R. No. 167505.
The application for conversion of Roxas &
Co. was the subject of the above-stated
Roxas & Co., Inc. v. Court of Appeals which
the Court remanded to the DAR for the
observance of proper acquisition
proceedings. As reflected in the above-
quoted statement of facts in said case,
during the pendency before the DAR of its
application for conversion following its
remand to the DAR or on May 16, 2000,
Roxas & Co. filed with the DAR an
application for exemption from the coverage
of the Comprehensive Agrarian Reform
Program (CARP) of 1988 on the basis of PP
1520 and of DAR Administrative Order (AO)
No. 6, Series of 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,[5] oral arguments were conducted on
July 7, 2009.
The core issues are:
1. Whether PP 1520 reclassified in 1975
all lands in the Maragondon-Ternate-
Nasugbu tourism zone to non-agricultural
use to exempt Roxas & Co.s three
haciendas in Nasugbu from CARP
coverage;
2. Whether Nasugbu MSO No. 4, Series
of 1982 exempted certain lots in Hacienda
Palico from CARP coverage; and
3. Whether the partial and complete
cancellations by the DAR of CLOA No. 6654
subject of G.R. No. 167505 is valid.
The Court shall discuss the issues in
seriatim.
I. PP 1520 DID NOT AUTOMATICALLY
CONVERT THE AGRICULTURAL LANDS IN
THE THREE MUNICIPALITIES INCLUDING
NASUGBU TO NON-AGRICULTURAL
LANDS.
Roxas & Co. contends that PP 1520
declared the three municipalities as each
constituting a tourism zone, reclassified all
lands therein to tourism and, therefore,
converted their use to non-agricultural
purposes.
To determine the chief intent of PP 1520,
reference to the whereas clauses is in order.
By and large, a reference to the
congressional deliberation records would
provide guidance in dissecting the intent of
legislation. But since PP 1520 emanated
from the legislative powers of then President
Marcos during martial rule, reference to the
whereas clauses cannot be dispensed with.
[6]
The perambulatory clauses of PP 1520
identified only certain areas in the sector
comprising the [three Municipalities that]
have potential tourism value and mandated
the conduct of necessary studies and the
segregation of specific geographic areas to
achieve its purpose. Which is why the PP
directed the Philippine Tourism Authority
(PTA) to identify what those potential tourism
areas are. If all the lands in those tourism
zones were to be wholly converted to non-
agricultural use, there would have been no
need for the PP to direct the PTA to identify
what those specific geographic areas are.
The Court had in fact passed upon a similar
matter before. Thus in DAR v. Franco,[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. x x x x.
B. Proclamations declaring general areas
such as whole provinces, municipalities,
barangays, islands or peninsulas as tourist
zones that merely:
(1) recognize certain still unidentified areas
within the covered provinces, municipalities,
barangays, islands, or peninsulas to be with
potential tourism value and charge the
Philippine Tourism Authority with the task to
identify/delineate specific geographic areas
within the zone with potential tourism value
and to coordinate said areas development;
or
(2) recognize the potential value of identified
spots located within the general area
declared as tourist zone (i.e. x x x x) and
direct the Philippine Tourism Authority to
coordinate said areas development;
could not be regarded as effecting an
automatic reclassification of the entirety of
the land area declared as tourist zone. This
is so because reclassification of lands
denotes their allocation into some specific
use and providing for the manner of their
utilization and disposition (Sec. 20, Local
Government Code) or the act of specifying
how agricultural lands shall be utilized for
non-agricultural uses such as residential,
industrial, or commercial, as embodied in the
land use plan. (Joint HLURB, DAR, DA,
DILG Memo. Circular Prescribing Guidelines
for MC 54, S. 1995, Sec.2)
A proclamation that merely recognizes the
potential tourism value of certain areas
within the general area declared as tourist
zone clearly does not allocate, reserve, or
intend the entirety of the land area of the
zone for non-agricultural purposes. Neither
does said proclamation direct that otherwise
CARPable lands within the zone shall
already be used for purposes other than
agricultural.
Moreover, to view these kinds of
proclamation as a reclassification for non-
agricultural purposes of entire provinces,
municipalities, barangays, islands, or
peninsulas would be unreasonable as it
amounts to an automatic and sweeping
exemption from CARP in the name of
tourism development. The same would also
undermine the land use reclassification
powers vested in local government units in
conjunction with pertinent agencies of
government.
C. There being no reclassification, it is clear
that said proclamations/issuances, assuming
[these] took effect before June 15, 1988,
could not supply a basis for exemption of the
entirety of the lands embraced therein from
CARP coverage x x x x.
D. x x x x. (underscoring in the original;
emphasis and italics supplied)
The DARs 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 wasand still isimplemented
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.
Interestingly, then President Marcos also
issued on September 26, 1972 PD No. 2
which declared the entire Philippines as land
reform area.[18] Such declaration did not
intend to reclassify all lands in the entire
country to agricultural lands. President
Marcos, about a month later or on October
21, 1972, issued PD 27 which decreed that
all private agricultural lands primarily
devoted to rice and corn were deemed
awarded to their tenant-farmers.
Given these martial law-era decrees and
considering the socio-political backdrop at
the time PP 1520 was issued in 1975, it is
inconceivable that PP 1520, as well as other
similarly worded proclamations which are
completely silent on the aspect of
reclassification of the lands in those tourism
zones, would nullify the gains already then
achieved by PD 27.
Even so, Roxas & Co. turns to Natalia
Realty v. DAR and NHA v. Allarde to support
its position. These cases are not even
closely similar to the petitions in G.R. Nos.
167540 and 167543. The only time that
these cases may find application to said
petitions is when the PTA actually identifies
well-defined geographic areas within the
zone with potential tourism value.
In remotely tying these two immediately-
cited cases that involve specific and defined
townsite reservations for the housing
program of the National Housing Authority to
the present petitions, Roxas & Co. cites
Letter of Instructions No. 352 issued on
December 22, 1975 which states that the
survey and technical description of the
tourism zones shall be considered an
integral part of PP 1520. There were,
however, at the time no surveys and
technical delineations yet of the intended
tourism areas.
On hindsight, Natalia and Allarde find
application in the petitions in G.R. Nos.
179650 & 167505, which petitions are
anchored on the extenuating effects of
Nasugbu MZO No. 4, but not in the petitions
in G.R. Nos. 167540 & 167543 bearing on
PP 1520, as will later be discussed.
Of significance also in the present petitions
is the issuance on August 3, 2007 of
Executive Order No. 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]
Tourism Act, and not to PP 1520, for
possible exemption.
II. ROXAS & CO.S APPLICATION IN DAR
ADMINISTRATIVE CASE NO.
A-9999-142-97 FOR CARP EXEMPTION IN
HACIENDA PALICO SUBJECT OF G.R. NO.
179650 CANNOT BE GRANTED IN VIEW
OF DISCREPANCIES IN THE LOCATION
AND IDENTITY OF THE SUBJECT
PARCELS OF LAND.
Since PP 1520 did not automatically convert
Haciendas Caylaway, Banilad and Palico
into non-agricultural estates, can Roxas &
Co. invoke in the alternative Nasugbu MZO
No. 4, which reclassified in 1982 the
haciendas to non-agricultural use to exclude
six parcels of land in Hacienda Palico from
CARP coverage?
By Roxas & Co.s contention, the affected six
parcels of land which are the subject of DAR
Administrative Case No. A-9999-142-97 and
nine parcels of land which are the subject of
DAR Administrative Case No.
A-9999-008-98 involved in G.R. No. 167505,
all in Hacienda Palico, have been
reclassified to non-agricultural uses via
Nasugbu MZO No. 4 which was approved by
the forerunner of HLURB.
Roxas & Co.s contention fails.
To be sure, the Court had on several
occasions decreed that a local government
unit has the power to classify and convert
land from agricultural to non-agricultural
prior to the effectivity of the CARL.[23] In
Agrarian Reform Beneficiaries Association v.
Nicolas,[24] it reiterated that
. . . the facts obtaining in this case are
similar to those in Natalia Realty. Both
subject lands form part of an area
designated for non-agricultural purposes.
Both were classified as non-agricultural
lands prior to June 15, 1988, the date of
effectivity of CARL.
xxxx
In the case under review, the subject parcels
of lands were reclassified within an urban
zone as per approved Official
Comprehensive Zoning Map of the City of
Davao. The reclassification was embodied in
City Ordinance No. 363, Series of 1982. As
such, the subject parcels of land are
considered non-agricultural and may be
utilized for residential, commercial, and
industrial purposes. The reclassification was
later approved by the HLURB.[25]
(emphasis, italics and underscoring
supplied)
The DAR 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 T-49946 is T-783 and not T-985. On the
other hand, the origin of T-60034 is listed as
59946, and not T-49946. The discrepancies
were attributed by [Roxas & Co.] to
typographical errors which were
acknowledged and initialled [sic] by the
ROD. Per verification, the discrepancies . . .
cannot be ascertained.[27] (emphasis and
underscoring supplied)
In denying Roxas & Co.s motion for
reconsideration, the DAR Secretary held:
The landholdings covered by the aforesaid
titles do not correspond to the Certification
dated February 11, 1998 of the [HLURB] ,
the Certification dated September 12, 1996
issued by the Municipal Planning and
Development Coordinator, and the
Certifications dated July 31, 1997 and May
27, 1997 issued by the National Irrigation
Authority. The certifications were issued for
Lot Nos. 21, 24, 28, 31, 32 and 34. Thus, it
was not even possible to issue exemption
clearance over the lots covered by TCT Nos.
60019 to 60023.
Furthermore, we also note the discrepancies
between the certifications issued by the
HLURB and the Municipal Planning
Development Coordinator as to the area of
the specific lots.[28] (emphasis and
underscoring supplied)
In affirming the DAR Secretarys 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 34But these certifications
contain nothing to show that these lots are
the same as Lots 125-A, 125-B, 125-C, 125-
D and 125-E covered by TCT Nos. 60019,
60020, 60021, 60022 and 60023,
respetively. While [Roxas & Co.] claims that
DAR Lot Nos. 21, 24 and 31 correspond to
the aforementioned TCTs submitted to the
DAR no evidence was presented to
substantiate such allegation.
Moreover, [Roxas & Co.] failed to submit
TCT 634 which it claims covers DAR Lot
Nos. 28, 32 and 24.(TSN, April 24, 2001, pp.
43-44)
xxxx
[Roxas & Co.] also claims that subject
properties are located at Barangay Cogunan
and Lumbangan and that these properties
are part of the zone classified as Industrial
under Municipal Ordinance No. 4, Series of
1982 of the Municipality of Nasugbu,
Batangas. .a scrutiny of the said Ordinance
shows that only Barangays Talangan and
Lumbangan of the said municipality were
classified as Industrial ZonesBarangay
Cogunan was not included. x x x x. In fact,
the TCTs submitted by [Roxas & Co.] show
that the properties covered by said titles are
all located at Barrio Lumbangan.[29]
(emphasis and underscoring supplied)
Its foregoing findings notwithstanding, the
appellate court still allowed Roxas & Co. to
adduce additional evidence to support its
application for exemption under Nasugbu
MZO No. 4.
Meanwhile, Roxas & Co. appealed the
appellate courts decision in CA-G.R. No. SP
No. 63146 affirming the DAR Secretarys
denial of its application for CARP exemption
in Hacienda Palico (now the subject of G.R.
No. 149548).
When Roxas & Co. sought the re-opening of
the proceedings in DAR Administrative Case
No. A-9999-142-97 (subject of G.R. No.
179650), and offered additional evidence in
support of its application for CARP
exemption, the DAR Secretary, this time,
granted its application for the six lots
including Lot No. 36 since the additional
documents offered by Roxas & Co.
mentioned the said lot.
In granting the application, the DAR
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 Secretarys
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 the [HLURB], the
Certification dated September 12, 1996
issued by the Municipal Planning and
Development Coordinator, and the
Certifications dated July 31, 1997 and May
27, 1997 issued by the National Irrigation
Authority. On the other hand, then Secretary
Hernani Braganza relied on a different set of
certifications which were issued later or on
September 19, 1996.
In this regard, the Court finds in order the
observation of DAMBA-NFSW that Roxas &
Co. should have submitted the
comprehensive land use plan and pointed
therein the exact locations of the properties
to prove that indeed they are within the area
of coverage of Nasugbu MZO No. 4.
The petitions in G.R. Nos. 179650 & 149548
must be distinguished from Junio v.
Garilao[33] 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. Secretarys Certificate dated
September 2002 executed by Mariano M.
Ampil III, Corporate Secretary of Roxas &
Company, Inc., indicating a Board
Resolution authorizing him to represent the
corporation in its application for exemption
with the DAR. The same Board Resolution
revoked the authorization previously granted
to the Sierra Management & Resources
Corporation;
3. Photocopy of TCT No. 985 and its
corresponding Tax Declaration No. 0401;
4. Location and vicinity maps of subject
landholdings;
5. Certification dated 10 July 1997 issued
by Reynaldo Garcia, Municipal Planning and
Development Coordinator (MPDC) and
Zoning Administrator of Nasugbu, Batangas,
stating that the subject parcels of land are
within the Urban Core Zone as specified in
Zone A. VII of Municipal Zoning Ordinance
No. 4, Series of 1982, approved by the
Human Settlements Regulatory Commission
(HSRC), now the Housing and Land Use
Regulatory Board (HLURB), under
Resolution No. 123, Series of 1983, dated 4
May 1983;
6. Two (2) Certifications both dated 31
August 1998, issued by Alfredo Tan II,
Director, HLURB, Region IV, stating that the
subject parcels of land appear to be within
the Residential cluster Area as specified in
Zone VII of Municipal Zoning Ordinance No.
4, Series of 1982, approved under HSRC
Resolution No. 123, Series of 1983, dated 4
May 1983;[35]
x x x x (emphasis and underscoring
supplied)
By Order of November 6, 2002, the DAR
Secretary granted the application for
exemption but issued the following
conditions:
1. The farmer-occupants within subject
parcels of land shall be maintained in their
peaceful possession and cultivation of their
respective areas of tillage until a final
determination has been made on the
amount of disturbance compensation due
and entitlement of such farmer-occupants
thereto by the PARAD of Batangas;
2. No development shall be undertaken
within the subject parcels of land until the
appropriate disturbance compensation has
been paid to the farmer-occupants who are
determined by the PARAD to be entitled
thereto. Proof of payment of disturbance
compensation shall be submitted to this
Office within ten (10) days from such
payment; and
3. The cancellation of the CLOA issued to
the farmer-beneficiaries shall be subject of a
separate proceeding before the PARAD of
Batangas.[36]
DAMBA-NSFW moved for reconsideration
but the DAR Secretary denied the same and
explained further why CLOA holders need
not be informed of the pending application
for exemption in this wise:
As regards the first ground raised by
[DAMBA-NSFW], it should be remembered
that an application for CARP-exemption
pursuant to DOJ Opinion No. 44, series of
1990, as implemented by DAR
Administrative Order No. 6, series of 1994,
is non-adversarial or non-litigious in nature.
Hence, applicant is correct in saying that
nowhere in the rules is it required that
occupants of a landholding should be
notified of an initiated or pending exemption
application.
xxxx
With regard [to] the allegation that
oppositors-movants are already CLOA
holders of subject propert[ies] and deserve
to be notified, as owners, of the initiated
questioned exemption application, is of no
moment. The Supreme Court in the case of
Roxas [&] Co., Inc. v. Court of Appeals, 321
SCRA 106, held:
We stress that the failure of respondent DAR
to comply with the requisites of due process
in the acquisition proceedings does not give
this Court the power to nullify the CLOAs
already issued to the farmer beneficiaries. x
x x x. Anyhow, the farmer[-]beneficiaries hold
the property in trust for the rightful owner of
the land.
Since subject landholding has been validly
determined to be CARP-exempt, therefore,
the previous issuance of the CLOA of
oppositors-movants is erroneous. Hence,
similar to the situation of the above-quoted
Supreme Court Decision, oppositors-
movants only hold the property in trust for
the rightful owners of the land and are not
the owners of subject landholding who
should be notified of the exemption
application of applicant Roxas & Company,
Incorporated.
Finally, this Office finds no substantial basis
to reverse the assailed Orders since there is
substantial compliance by the applicant with
the requirements for the issuance of
exemption clearance under DAR AO 6
(1994).[37]
On DAMBA-NSFWs 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 Secretarys finding that
Roxas & Co. had substantially complied with
the prerequisites of DAR AO 6, Series of
1994. Hence, DAMBA-NFSWs petition in
G.R. No. 167505.
The Court finds no reversible error in the
Court of Appeals assailed issuances, the
orders of the DAR Secretary which it
sustained being amply supported by
evidence.
IV. THE CLOAs ISSUED BY THE DAR in
ADMINISTRATIVE CASE NO.
A-9999-008-98 SUBJECT OF G.R. No.
179650 TO THE FARMER-BENEFICIARIES
INVOLVING THE NINE PARCELS OF LAND
IN HACIENDA PALICO MUST BE
CANCELLED.
Turning now to the validity of the issuance of
CLOAs in Hacienda Palico vis--vis the
present dispositions: It bears recalling that in
DAR Administrative Case Nos.
A-9999-008-98 and A-9999-142-97 (G.R.
No. 179650), the Court ruled for Roxas &
Co.s grant of exemption in DAR
Administrative Case No. A-9999-008-98 but
denied the grant of exemption in DAR
Administrative Case No. A-9999-142-97 for
reasons already discussed. It follows that
the CLOAs issued to the farmer-
beneficiaries in DAR Administrative Case
No. A-9999-008-98 must be cancelled.
But first, the Court digresses. The assertion
of DAMBA-NSFW that the petitions for
partial and complete cancellations of the
CLOAs subject of DARAB Case Nos.
R-401-003-2001 to R-401-005-2001 and No.
401-239-2001 violated the earlier order in
Roxas v. Court of Appeals does not lie.
Nowhere did the Court therein pronounce
that the CLOAs issued cannot and should
not be cancelled, what was involved therein
being the legality of the acquisition
proceedings. The Court merely reiterated
that it is the DAR which has primary
jurisdiction to rule on the validity of CLOAs.
Thus it held:
. . . [t]he failure of respondent DAR to
comply with the requisites of due process in
the acquisition proceedings does not give
this Court the power to nullify the [CLOAs]
already issued to the farmer-beneficiaries.
To assume the power is to short-circuit the
administrative process, which has yet to run
its regular course. Respondent DAR must be
given the chance to correct its procedural
lapses in the acquisition proceedings. x x x
x. Anyhow, the farmer beneficiaries hold the
property in trust for the rightful owner of the
land.[39]
On the procedural question raised by Roxas
& Co. on the appellate courts relaxation of
the rules by giving due course to DAMBA-
NFSWs 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-NSFWs appeal, the appellate court
committed no reversible error. Consider its
ratiocination:
x x x x. To deny [DAMBA-NSFW]s appeal
with the PARAD will not only affect their right
over the parcel of land subject of this petition
with an area of 103.1436 hectares, but also
that of the whole area covered by CLOA No.
6654 since the PARAD rendered a Joint
Resolution of the Motion for Reconsideration
filed by the [DAMBA-NSFW] with regard to
[Roxas & Co.]s application for partial and
total cancellation of the CLOA in DARAB
Cases No. R-401-003-2001 to
R-401-005-2001 and No. 401-239-2001.
There is a pressing need for an extensive
discussion of the issues as raised by both
parties 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. x x
x x (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 Courts
dispositions on the other issues in these
consolidated petitions.
In the main, there is no logical recourse
except to cancel the CLOAs issued for the
nine parcels of land identified as Lot Nos.
20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2
which are portions of TCT No. 985 covering
45.9771 hectares in Hacienda Palico (or
those covered by DAR Administrative Case
No. A-9999-008-98). As for the rest of the
CLOAs, they should be respected since
Roxas & Co., as shown in the discussion in
G.R. Nos. 167540, 167543 and 167505,
failed to prove that the other lots in Hacienda
Palico and the other two haciendas, aside
from the above-mentioned nine lots, are
CARP-exempt.
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.
Roxas & Co. is thus mandated to first satisfy
the disturbance compensation of affected
farmer-beneficiaries in the areas covered by
the nine parcels of lands in DAR AO No.
A-9999-008-98 before the CLOAs covering
them can be cancelled. And it is enjoined to
strictly follow the instructions of R.A. No.
3844.
Finally then, and in view of the Courts
dispositions in G.R. Nos. 179650 and
167505, the May 27, 2001 Decision of the
Provincial Agrarian Reform Adjudicator
(PARAD)[44] in DARAB Case No.
401-239-2001 ordering the total cancellation
of CLOA No. 6654, subject of G.R. No.
169163, is SET ASIDE except with respect
to the CLOAs issued for Lot Nos. 20, 13, 37,
19-B, 45, 47, 49, 48-1 and 48-2 which are
portions of TCT No. 985 covering 45.9771
hectares in Hacienda Palico (or those
covered by DAR Administrative Case No.
A-9999-008-98). It goes without saying that
the motion for reconsideration of DAMBA-
NFSW is granted to thus vacate the Courts
October 19, 2005 Resolution dismissing
DAMBA-NFSWs petition for review of the
appellate courts 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 July 20, 2005;
3) In G.R. No. 149548, the Court DENIES
the petition for review of Roxas & Co. for
lack of merit;
4) In G.R. No. 179650, the Court GRANTS
the petition for review of DAMBA-NSFW and
REVERSES and SETS ASIDE the October
31, 2006 Decision and August 16, 2007
Resolution of the Court of Appeals in CA-
G.R. SP No. 82225;
5) In G.R. No. 167505, the Court DENIES
the petition for review of DAMBA-NSFW and
AFFIRMS the December 20, 2004 Decision
and March 7, 2005 Resolution of the Court
of Appeals in CA-G.R. SP No. 82226;
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
farmer-beneficiaries in the areas covered by
the nine parcels of lands in DAR
Administrative Case No. A-9999-008-98
before the CLOAs therein can be cancelled,
and is ENJOINED to strictly follow the
mandate of R.A. No. 3844.
No pronouncement as to costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 139285 December 21,
2007
ROMAN CATHOLIC ARCHBISHOP OF
CACERES, Petitioner,
vs.
SECRETARY OF AGRARIAN REFORM and
DAR REGIONAL DIRECTOR (Region V),
Respondents.
DECISION
VELASCO, JR., J.:
The Comprehensive Agrarian Reform Law
(CARL) has truly noble goals, and these
noble goals should not be stymied by the
creation of exemptions or exceptions not
contemplated by the law.
The Case
In this Petition for Review on Certiorari
under Rule 45, petitioner Roman Catholic
Archbishop of Caceres (Archbishop)
questions the February 4, 1999 Decision1 of
the Court of Appeals (CA) in CA-G.R. SP
No. 48282, which upheld the December 8,
1997 and June 10, 1998 Orders of the
Department of Agrarian Reform (DAR).
The Facts
Archbishop is the registered owner of
several properties in Camarines Sur, with a
total area of 268.5668 hectares. Of that land,
249.0236 hectares are planted with rice and
corn, while the remaining 19.5432 hectares
are planted with coconut trees.
In 1985, Archbishop filed with the Municipal
Agrarian Reform District Office No. 19, Naga
City, Camarines Sur several petitions for
exemption of certain properties located in
various towns of Camarines Sur from the
coverage of Operation Land Transfer (OLT)
under Presidential Decree No. (PD) 27.2
Two of these petitions were denied in an
Order dated November 6, 1986, issued by
the Regional Director of DAR, Region V,
Juanito L. Lorena.3
Archbishop appealed from the order of the
Regional Director, and sought exemption
from OLT coverage of all lands planted with
rice and corn which were registered in the
name of the Roman Catholic Archdiocese of
Caceres. In his appeal, Archbishop cited the
following grounds:
a) That said properties are all covered by
conditional donations subject to the
prohibitions of the donors to SELL,
EXCHANGE, LEASE, TRANSFER,
ENCUMBER OR MORTGAGE the
properties;
b) That they are used for charitable and
religious purposes;
c) That the parishes located in depressed
areas badly need them for the furtherance of
their mission work, propagation of the faith,
maintenance and support of their chapels,
churches and educational religious
institutions like the Holy Rosary Major and
Minor Seminaries for the promotion of the
priesthood vocation;
d) For the preservation of good relationship
between church and state thru non-
infringement of the right to exercise religious
profession and worship;
e) For the maintenance of the Cathedral and
Peñafrancia Shrine, which now include the
Basilica Minore Housing our venerable
image of Our Lady of Peñafrancia and the
venerable portrait of Divine Rostro;
f) That the petitioner (church) is amenable to
continue the leasehold system with the
present cultivators or tenants.4
This appeal was denied by then DAR
Secretary Ernesto D. Garilao in an Order
dated December 8, 1997.5 A subsequent
motion for reconsideration was denied in an
Order dated June 10, 1998.6
The matter was then raised to the CA via
Petition for Review on Certiorari. Archbishop
argued that even if the lands in question are
registered in his name, he holds the lands in
trust for the benefit of his followers as cestui
que trust. Archbishop further argued that the
deeds of donation by which the lands were
transferred to him imposed numerous
fiduciary obligations, such that he cannot
sell, exchange, lease, transfer, encumber, or
mortgage the subject lands. By this
reasoning, Archbishop concluded that he is
not the "landowner" contemplated by PD 27
and Republic Act No. (RA) 6657, the CARL
of 1988. He then prayed that the assailed
orders of the DAR be reversed, or in the
alternative, that the alleged beneficiaries of
the trust be each allowed to exercise rights
of retention over the landholdings.7
The petition was dismissed by the CA in its
February 4, 1999 Decision.8 Archbishop
filed a motion for reconsideration, but was
denied in the June 18, 1999 CA Resolution.9
Archbishop now brings the matter before us
through this petition.
The Issues
Archbishop raises issues he had raised
previously, which, he contends, the CA failed
to properly address. He claims that the CA
erred in holding that he is only entitled to
assert one right of retention as the subject
properties are registered in his name. He
further claims that an express trust had been
created wherein he only held naked title to
the subject properties on behalf of the
beneficiaries. He argues that it is not the
"landowner" contemplated by the law, but
merely a trustee, and as such is entitled to
as many rights of retention on behalf of the
beneficiaries of each particular property. He
then raises the question of the applicability
of the ruling in The Roman Catholic
Apostolic Administrator of Davao, Inc. v. The
Land Registration Commission and the
Register of Deeds of Davao City,10 which,
he cites, ruled that properties held by the
Church are held by it as a mere
administrator for the benefit of the members
of that particular religion. As Archbishop
claims to be merely an administrator of the
subject properties, he argues that these
subject properties should have been exempt
from the OLT.
The Court’s Ruling
The petition has no merit.
Archbishop’s arguments, while novel, must
fail in the face of the law and the dictates of
the 1987 Constitution.
The laws simply speak of the "landowner"
without qualification as to under what title
the land is held or what rights to the land the
landowner may exercise. There is no
distinction made whether the landowner
holds "naked title" only or can exercise all
the rights of ownership. Archbishop would
have us read deeper into the law, to create
exceptions that are not stated in PD 27 and
RA 6657, and to do so would be to frustrate
the revolutionary intent of the law, which is
the redistribution of agricultural land for the
benefit of landless farmers and farmworkers.
Archbishop was found to be the registered
owner of the lands in question, and does not
contest that fact. For the purposes of the
law, this makes him the landowner, without
the necessity of going beyond the registered
titles. He cannot demand a deeper
examination of the registered titles and
demand further that the intent of the original
owners be ascertained and followed. To
adopt his reasoning would create means of
sidestepping the law, wherein the mere act
of donation places lands beyond the reach
of agrarian reform.
There can be no claim of more than one
right of retention per landowner. Neither PD
27 nor RA 6657 has a provision for a
landowner to exercise more than one right of
retention. The law is simple and clear as to
the retention limits per landowner. PD 27
states, "In all cases, the landowner may
retain an area of not more than seven (7)
hectares if such landowner is cultivating
such area or will now cultivate it"; while RA
6657 states:
SEC. 6. Retention Limits.––Except as
otherwise provided in this Act, no person
may own or retain, directly, any public or
private agricultural land, the size of which
shall vary according to factors governing a
viable family-sized farm, such as commodity
produced, terrain, infrastructure, and soil
fertility as determined by the Presidential
Agrarian Reform Council (PARC) created
hereunder, but in no case shall the retention
by the landowner exceed five (5) hectares.
Three (3) hectares may be awarded to each
child of the landowner, subject to the
following qualifications: (1) that he is at least
fifteen (15) years of age; and (2) that he is
actually tilling the land or directly managing
the farm: Provided, That landowners whose
lands have been covered by Presidential
Decree No. 27 shall be allowed to keep the
area originally retained by them thereunder;
Provided, further, That original homestead
grantees or direct compulsory heirs who still
own the original homestead at the time of
the approval of this Act shall retain the same
areas as long as they continue to cultivate
said homestead.
Nothing in either law supports Archbishop’s
claim to more than one right of retention on
behalf of each cestui que trust. The
provisions of PD 27 and RA 6657 are plain
and require no further interpretation––there
is only one right of retention per landowner,
and no multiple rights of retention can be
held by a single party. Furthermore, the
scheme proposed by Archbishop would
create as many rights of retention as there
are beneficiaries, which could in effect
protect the entire available land area from
agrarian reform. Under Archbishop’s
reasoning, there is not even a definite
landowner to claim separate rights of
retention, and no specific number of rights of
retention to be claimed by the landowners.
There is simply no basis in the law or
jurisprudence for his argument that it is the
"beneficial ownership" that should be used
to determine which party would have the
right of retention.
Archbishop makes much of the conditional
donation, that he does not have the power to
sell, exchange, lease, transfer, encumber or
mortgage the transferred properties. He
claims that these conditions do not make
him the landowner as contemplated by the
law. This matter has already been answered
in Hospicio de San Jose de Barili, Cebu City
(Hospicio) v. Department of Agrarian
Reform.11 In that case, wherein Act No.
3239 prohibited the sale under any
consideration of lands donated to the
Hospicio, a charitable organization, the
Court found that the lands of the Hospicio
were not exempt from the coverage of
agrarian reform. In characterizing the sale of
land under agrarian reform, we stated:
Generally, sale arises out of contractual
obligation. Thus, it must meet the first
essential requisite of every contract that is
the presence of consent. Consent implies an
act of volition in entering into the agreement.
The absence or vitiation of consent renders
the sale either void or voidable.
In this case, the deprivation of the Hospicio’s
property did not arise as a consequence of
the Hospicio’s consent to the transfer. There
was no meeting of minds between the
Hospicio, on one hand, and the DAR or the
tenants, on the other, on the properties and
the cause which are to constitute the
contract that is to serve ultimately as the
basis for the transfer of ownership of the
subject lands. Instead, the obligation to
transfer arises by compulsion of law,
particularly P.D. No. 27.12
We discussed further:
The twin process of expropriation under
agrarian reform and the payment of just
compensation is akin to a forced sale, which
has been aptly described in common law
jurisdictions as "sale made under the
process of the court and in the mode
prescribed by law," and "which is not the
voluntary act of the owner, such as to satisfy
a debt, whether of a mortgage, judgment,
tax lien, etc." The term has not been
precisely defined in this jurisdiction, but
reference to the phrase itself is made in
Articles 223, 242, 237 and 243 of the Civil
Code, which uniformly exempt the family
home "from execution, forced sale, or
attachment." Yet a forced sale is clearly
different from the sales described under
Book V of the Civil Code which are
conventional sales, as it does not arise from
the consensual agreement of the vendor and
vendee, but by compulsion of law. Still, since
law is recognized as one of the sources of
obligation, there can be no dispute on the
efficacy of a forced sale, so long as it is
authorized by law.13
Archbishop’s claim that he does not have jus
disponendi over the subject properties is
unavailing. The very nature of the
compulsory sale under PD 27 and RA 6657
defeats such a claim. Other less scrupulous
parties may even attempt creating trusts to
prevent their lands from coming under
agrarian reform, and say that the trustee has
no power to dispose of the properties. The
disposition under PD 27 and RA 6657 is of a
different character than what is
contemplated by jus disponendi, wherein
under these laws, voluntariness is not an
issue, and the disposition is necessary for
the laws to be effective.
Under PD 27 and RA 6657, Archbishop
cannot claim that the alleged conditions of
the donations would have primacy over the
application of the law. This forced sale is not
even a violation of the conditions of the
donation, since it is by application of law and
beyond Archbishop’s control. The application
of the law cannot and should not be
defeated by the conditions laid down by the
donors of the land. If such were allowed, it
would be a simple matter for other
landowners to place their lands without limit
under the protection of religious
organizations or create trusts by the mere
act of donation, rendering agrarian reform
but a pipe dream.
Archbishop’s contention that he is merely an
administrator of the donated properties will
not serve to remove these lands from the
coverage of agrarian reform. Under PD 27,
the coverage is lands devoted to rice and
corn. Section 4 of RA 6657 states, "The
Comprehensive Agrarian Reform Law of
1988 shall cover, regardless of tenurial
arrangement and commodity produced, all
public and private agricultural lands as
provided in Proclamation No. 131 and
Executive Order No. 229, including other
lands of the public domain suitable for
agriculture." The lands in Archbishop’s name
are agricultural lands that fall within the
scope of the law, and do not fall under the
exemptions.
The exemptions under RA 6657 form an
exclusive list, as follows:
SEC. 10. Exemptions and Exclusions.––
(a) Lands actually, directly and exclusively
used for parks, wildlife, forest reserves,
reforestation, fish sanctuaries and breeding
grounds, watersheds and mangroves shall
be exempt from the coverage of this Act.
(b) Private lands actually, directly and
exclusively used for prawn farms and
fishponds shall be exempt from the
coverage of this Act: Provided, That said
prawn farms and fishponds have not been
distributed and Certificate of Land
Ownership Award (CLOA) issued under the
Agrarian Reform Program.
In cases where the fishponds or prawn
farms have been subjected to the
Comprehensive Agrarian Reform Law, by
voluntary offer to sell, or commercial farms
deferment or notices of compulsory
acquisition, a simple and absolute majority
of the actual regular workers or tenants must
consent to the exemption within one (1) year
from the effectivity of this Act. When the
workers or tenants do not agree to this
exemption, the fishponds or prawn farms
shall be distributed collectively to the worker-
beneficiaries or tenants who shall form
cooperative or association to manage the
same.
In cases where the fishponds or prawn
farms have not been subjected to the
Comprehensive Agrarian Reform Law, the
consent of the farmworkers shall no longer
be necessary; however, the provision of
Section 32-A hereof on incentives shall
apply.
(c) Lands actually, directly and exclusively
used and found to be necessary for national
defense, school sites and campuses,
including experimental farm stations
operated by public or private schools for
educational purposes, seeds and seedlings
research and pilot production center, church
sites and convents appurtenant thereto,
mosque sites and Islamic centers
appurtenant thereto, communal burial
grounds and cemeteries, penal colonies and
penal farms actually worked by the inmates,
government and private research and
quarantine centers and all lands with
eighteen percent (18%) slope and over,
except those already developed, shall be
exempt from the coverage of this Act. (As
amended by R. A. 7881)

Archbishop would claim exemption from the
coverage of agrarian reform by stating that
he is a mere administrator, but his position
does not appear under the list of exemptions
under RA 6657. His claimed status as
administrator does not create another class
of lands exempt from the coverage of PD 27
or RA 6657, and The Roman Catholic
Apostolic Administrator of Davao, Inc.14
does not create another definition for the
term "landowner."
We explained in Hospicio:
It is axiomatic that where a general rule is
established by a statute with exceptions, the
Court will not curtail nor add to the latter by
implication, and it is a rule that an express
exception excludes all others. We cannot
simply impute into a statute an exception
which the Congress did not incorporate.
Moreover general welfare legislation such as
land reform laws is to be construed in favor
of the promotion of social justice to ensure
the well-being and economic security of the
people. Since a broad construction of the
provision listing the properties exempted
under the CARL would tend to denigrate the
aims of agrarian reform, a strict application
of these exceptions is in order.15
Archbishop cannot claim exemption in behalf
of the millions of Filipino faithful, as the lands
are clearly not exempt under the law. He
should not fear that his followers are simply
being deprived of land, as under both PD 27
and RA 6657, he is entitled to just
compensation, which he may then use for
the benefit of his followers. His situation is
no different from other landowners affected
by agrarian reform––they are somewhat
deprived of their land, but it is all for a
greater good.
As Association of Small Landowners in the
Philippines, Inc. v. Secretary of Agrarian
Reform16 recognized the revolutionary
character of the expropriation under the
agrarian reform law, we follow such lofty
ideal for the resolution of this case. This
grand purpose under the CARL must not be
hindered by the simple expedient of
appending conditions to a donation of land,
or by donating land to a church. This is not
to cast aspersions on religious
organizations, but it is not fitting for them to
be used as vehicles for keeping land out of
the hands of the landless. The law is
indubitably in line with the charitable ideals
of religious organizations to ensure that the
land they own falls into the hands of able
caretakers and owners. As a religious
leader, Archbishop can take solace in the
fact that his lands are going to be awarded
to those who need and can utilize them to
the fullest.
WHEREFORE, we DENY the petition, and
AFFIRM the February 4, 1999 Decision in
CA-G.R. SP No. 48282.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
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.
QUIASON, J.:
In this appeal by certiorari from the decision
of the Court of Appeals in AC-G.R. SP No.
20551 entitled "Ernesto N. San Joaquin, et
al., v. Hon. Benjamin V. Panga, et al.," this
Court is asked to decide whether the
expropriation of agricultural lands by local
government units is subject, to the prior
approval of the Secretary of the Agrarian
Reform, as the implementator of the
agrarian reform program.
On December 22, 1988, the Sangguniang
Panlalawigan of the Province of Camarines
Sur passed Resolution No. 129, Series of
1988, authorizing the Provincial Governor to
purchase or expropriate property contiguous
to the provincial capitol site, in order to
establish a pilot farm for non-food and non-
traditional agricultural crops and a housing
project for provincial government
employees.
The "WHEREAS" clause o:f the Resolution
states:
WHEREAS, the province of Camarines Sur
has adopted a five-year Comprehensive
Development plan, some of the vital
components of which includes the
establishment of model and pilot farm for
non-food and non-traditional agricultural
crops, soil testing and tissue culture
laboratory centers, 15 small scale
technology soap making, small scale
products of plaster of paris, marine biological
and sea farming research center,and other
progressive feasibility concepts objective of
which is to provide the necessary scientific
and technology know-how to farmers and
fishermen in Camarines Sur and to establish
a housing project for provincial government
employees;
WHEREAS, the province would need
additional land to be acquired either by
purchase or expropriation to implement the
above program component;
WHEREAS, there are contiguous/adjacent
properties to be (sic) present Provincial
Capitol Site ideally suitable to establish the
same pilot development center;
WHEREFORE . . . .
Pursuant to the Resolution, the Province of
Camarines Sur, through its Governor, Hon.
Luis R.Villafuerte, filed two separate cases
for expropriation against Ernesto N. San
Joaquin and Efren N. San Joaquin, docketed
as Special Civil Action Nos. P-17-89 and
P-19-89 of the Regional Trial Court, Pili,
Camarines Sur, presided by the Hon.
Benjamin V. Panga.
Forthwith, the Province of Camarines Sur
filed a motion for the issuance of writ of
possession. The San Joaquins failed to
appear at the hearing of the motion.
The San Joaquins moved to dismiss the
complaints on the ground of inadequacy of
the price offered for their property. In an
order dated December 6, 1989, the trial
court denied the motion to dismiss and
authorized the Province of Camarines Sur to
take possession of the property upon the
deposit with the Clerk of Court of the amount
of P5,714.00, the amount provisionally fixed
by the trial court to 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 January18, 1990.
The San Joaquins filed a motion for relief
from the order, authorizing the Province of
Camarines Sur to take possession of their
property and a motion to admit an amended
motion to dismiss. Both motions were denied
in the order dated February 1990.
In their petition before the Court of Appeals,
the San Joaquins asked: (a) that Resolution
No. 129, Series of 1988 of the Sangguniang
Panlalawigan be declared null and void; (b)
that the complaints for expropriation be
dismissed; and (c) that the order dated
December 6, 1989 (i) denying the motion to
dismiss and (ii) allowing the Province of
Camarines Sur to take possession of the
property subject of the expropriation and the
order dated February 26, 1990, denying the
motion to admit the amended motion to
dismiss, be set aside. They also asked that
an order be issued to restrain the trial court
from enforcing the writ of possession, and
thereafter to issue a writ of injunction.
In its answer to the petition, the Province of
Camarines Sur claimed that it has the
authority to initiate the expropriation
proceedings under Sections 4 and 7 of Local
Government Code (B.P. Blg. 337) and that
the expropriations are for a public purpose.
Asked by the Court of Appeals to give his
Comment to the petition, the Solicitor
General stated that under Section 9 of the
Local Government Code (B.P. Blg. 337),
there was no need for the approval by the
Office of the President of the exercise by the
Sangguniang Panlalawigan of the right of
eminent domain. However, the Solicitor
General expressed the view that the
Province of Camarines Sur must first secure
the approval of the Department of Agrarian
Reform of the plan to expropriate the lands
of petitioners for use as a housing project.
The Court of Appeals set aside the order of
the trial court, allowing the Province of
Camarines Sur to take possession of private
respondents' lands and the order denying
the admission of the amended motion to
dismiss. It also ordered the trial court to
suspend the expropriation proceedings until
after the Province of Camarines Sur shall
have submitted the requisite approval of the
Department of Agrarian Reform to convert
the classification of the property of the
private respondents from agricultural to non-
agricultural land.
Hence this petition.
It must be noted that in the Court of Appeals,
the San Joaquins asked for: (i) the dismissal
of the complaints for expropriation on the
ground of the inadequacy of the
compensation offered for the property and
(ii) the nullification of Resolution No. 129,
Series of 1988 of the Sangguniang
Panlalawigan of the Province of Camarines
Sur.
The Court of Appeals did not rule on the
validity of the questioned resolution; neither
did it dismiss the complaints. However, when
the Court of Appeals ordered the suspension
of the proceedings until the Province of
Camarines Sur shall have obtained the
authority of the Department of Agrarian
Reform to change the classification of the
lands sought to be expropriated from
agricultural to non-agricultural use, it
assumed that the resolution is valid and that
the expropriation is for a public purpose or
public use.
Modernly, there has been a shift from the
literal to a broader interpretation of "public
purpose" or "public use" for which the power
of eminent domain may be exercised. The
old concept was that the condemned
property must actually be used by the
general public (e.g. roads, bridges, public
plazas, etc.) before the taking thereof could
satisfy the constitutional requirement of
"public use". Under the new concept, "public
use" means public advantage, convenience
or benefit, which tends to contribute to the
general welfare and the prosperity of the
whole community, like a resort complex for
tourists or housing project (Heirs of Juancho
Ardano v. Reyes, 125 SCRA 220 [1983];
Sumulong v. Guerrero, 154 SC.RA 461
[1987]).
The expropriation of the property authorized
by the questioned resolution is for a public
purpose. The establishment of a pilot
development center would inure to the direct
benefit and advantage of the people of the
Province of Camarines Sur. Once
operational, the center would make available
to the community invaluable information and
technology on agriculture, fishery and the
cottage industry. Ultimately, the livelihood of
the farmers, fishermen and craftsmen would
be enhanced. The housing project also
satisfies the public purpose requirement of
the Constitution. As held in Sumulong v.
Guerrero, 154 SCRA 461, "Housing is a
basic human need. Shortage in housing is a
matter of state concern since it directly and
significantly affects public health, safety, the
environment and in sum the general
welfare."
It is the submission of the Province of
Camarines Sur that its exercise of the power
of eminent domain cannot be restricted by
the provisions of the Comprehensive
Agrarian Reform Law (R.A. No. 6657),
particularly Section 65 thereof, which
requires the approval of the Department of
Agrarian Reform before a parcel of land can
be reclassified from an agricultural to a non-
agricultural land.
The Court of Appeals, following the
recommendation of the Solicitor General,
held that the Province of Camarines Sur
must comply with the provision of Section 65
of the Comprehensive Agrarian Reform Law
and must first secure the approval of the
Department of Agrarian Reform of the plan
to expropriate the lands of the San Joaquins.
In Heirs of Juancho Ardana v. Reyes, 125
SCRA 220, petitioners raised the issue of
whether the Philippine Tourism Authority can
expropriate lands covered by the "Operation
Land Transfer" for use of a tourist resort
complex. There was a finding that of the 282
hectares sought to be expropriated, only an
area of 8,970 square meters or less than
one hectare was affected by the land reform
program and covered by emancipation
patents issued by the Ministry of Agrarian
Reform. While the Court said that there was
"no need under the facts of this petition to
rule on whether the public purpose is
superior or inferior to another purpose or
engage in a balancing of competing public
interest," it upheld the expropriation after
noting that petitioners had failed to
overcome the showing that the taking of
8,970 square meters formed part of the
resort complex. A fair and reasonable
reading of the decision is that this Court
viewed the power of expropriation as
superior to the power to distribute lands
under the land reform program.
The Solicitor General denigrated the power
to expropriate by the Province of Camarines
Sur by stressing the fact that local
government units exercise such power only
by delegation. (Comment, pp. 14-15; Rollo,
pp. 128-129)
It is true that local government units have no
inherent power of eminent domain and can
exercise it only when expressly authorized
by the legislature (City of Cincinnati v.
Vester, 28l US 439, 74 L.ed. 950, 50 SCt.
360). It is also true that in delegating the
power to expropriate, the legislature may
retain certain control or impose certain
restraints on the exercise thereof by the
local governments (Joslin Mfg. Co. v.
Providence, 262 US 668 67 L. ed. 1167, 43
S Ct. 684). While such delegated power may
be a limited authority, it is complete within its
limits. Moreover, the limitations on the
exercise of the delegated power must be
clearly expressed, either in the law
conferring the power or in other legislations.
Resolution No. 129, Series of 1988, was
promulgated pursuant to Section 9 of B.P.
Blg. 337, the Local Government Code, which
provides:
A local government unit may, through its
head and acting pursuant to a resolution of
its sanggunian exercise the right of eminent
domain and institute condemnation
proceedings for public use or purpose.
Section 9 of B.P. Blg. 337 does not intimate
in the least that local government, units must
first secure the approval of the Department
of Land Reform for the conversion of lands
from agricultural to non-agricultural use,
before they can institute the necessary
expropriation proceedings. Likewise, there is
no provision in the Comprehensive Agrarian
Reform Law which expressly subjects the
expropriation of agricultural lands by local
government units to the control of the
Department of Agrarian Reform. The closest
provision of law that the Court of Appeals
could cite to justify the intervention of the
Department of Agrarian Reform in
expropriation matters is Section 65 of the
Comprehensive Agrarian Reform Law, which
reads:
Sec. 65. Conversion of Lands. — After
the lapse of five (5) years from its award,
when the land ceases to be economically
feasible and sound for, agricultural
purposes, or the locality has become
urbanized and the land will have a greater
economic value for residential, commercial
or industrial purposes, the DAR, upon
application of the beneficiary or the
landowner, with due notice to the affected
parties, and subject to existing laws, may
authorize the reclassification or conversion
of the land and its disposition: Provided,
That the beneficiary shall have fully paid his
obligation.
The opening, adverbial phrase of the
provision sends signals that it applies to
lands previously placed under the agrarian
reform program as it speaks of "the lapse of
five (5) years from its award."
The rules on conversion of agricultural lands
found in Section 4 (k) and 5 (1) of Executive
Order No. 129-A, Series of 1987, cannot be
the source of the authority of the Department
of Agrarian Reform to determine the
suitability of a parcel of agricultural land for
the purpose to which it would be devoted by
the expropriating authority. While those rules
vest on the Department of Agrarian Reform
the exclusive authority to approve or
disapprove conversions of agricultural lands
for residential, commercial or industrial uses,
such authority is limited to the applications
for reclassification submitted by the land
owners or tenant beneficiaries.
Statutes conferring the power of eminent
domain to political subdivisions cannot be
broadened or constricted by implication
(Schulman v. People, 10 N.Y. 2d. 249, 176
N.E. 2d. 817, 219 NYS 2d. 241).
To sustain the Court of Appeals would mean
that the local government units can no
longer expropriate agricultural lands needed
for the construction of roads, bridges,
schools, hospitals, etc, without first applying
for conversion of the use of the lands with
the Department of Agrarian Reform,
because all of these projects would naturally
involve a change in the land use. In effect, it
would then be the Department of Agrarian
Reform to scrutinize whether the
expropriation is for a public purpose or
public use.
Ordinarily, it is the legislative branch of the
local government unit that shall determine
whether the use of the property sought to be
expropriated shall be public, the same being
an expression of legislative policy. The
courts defer to such legislative determination
and will intervene only when a particular
undertaking has no real or substantial
relation to the public use (United States Ex
Rel Tennessee Valley Authority v. Welch,
327 US 546, 90 L. ed. 843, 66 S Ct 715; WHEREFORE, the petition is GRANTED
State ex rel Twin City Bldg. and Invest. Co. and the questioned decision of the Court of
v. Houghton, 144 Minn. 1, 174 NW 885, 8 Appeals is set aside insofar as it (a) nullifies
ALR 585). the trial court's order allowing the Province
of Camarines Sur to take possession of
There is also an ancient rule that restrictive private respondents' property; (b) orders the
statutes, no matter how broad their terms trial court to suspend the expropriation
are, do not embrace the sovereign unless proceedings; and (c) requires the Province
the sovereign is specially mentioned as of Camarines Sur to obtain the approval of
subject thereto (Alliance of Government the Department of Agrarian Reform to
Workers v. Minister of Labor and convert or reclassify private respondents'
Employment, 124 SCRA 1 [1983]). The property from agricultural to non-agricultural
Republic of the Philippines, as sovereign, or use.
its political subdivisions, as holders of
delegated sovereign powers, cannot be The decision of the Court of Appeals is
bound by provisions of law couched in AFFIRMED insofar as it sets aside the order
general term. of the trial court, denying the amended
motion to dismiss of the private respondents.
The fears of private respondents that they
will be paid on the basis of the valuation SO ORDERED.
declared in the tax declarations of their
property, are unfounded. This Court has
declared as unconstitutional the Presidential
Decrees fixing the just compensation in
expropriation cases to be the value given to
the condemned property either by the
owners or the assessor, whichever was
lower ([Export Processing Zone Authority v.
Dulay, 149 SCRA 305 [1987]). As held in
Municipality of Talisay v. Ramirez, 183 SCRA
528 [1990], the rules for determining just
compensation are those laid down in Rule
67 of the Rules of Court, which allow private
respondents to submit evidence on what
they consider shall be the just compensation
for their property.
Republic of the Philippines February 28, 1995 and December 13, 1995
SUPREME COURT of the Secretary of Agrarian Reform and
Manila clarifying the Order dated February 28,
Factual Antecedents Prior to the effectivity of
THIRD DIVISION Presidential Decree No. 27 (PD 27) Renato
L. Delfino, Sr. (Delfino) owned the following
G.R. No. 197486 September 10, parcels of agricultural land in the Province of
2014 Laguna:
RENATO L. DELFINO, SR. (Deceased), Transfer Certificate
Represented by his Heirs, namely: GRACIA of Title (TCT) No. Area
DELFINO, GREGORIO A. DELFINO; MA. (in hectares) Classification Location
ISABEL A. DELFINO, RENATO A. T-21710 (T-49743) 2.8148 Riceland
DELFINO, JR., MA. REGINA DELFINO Pook Sta. Rosa
ROSELLA, MA. GRACIA A. DELFINO, T-21711 (T-49744) .0872 Riceland
MARIANO A. DELFINO, MA. LUISA Pook Sta. Rosa
DELFINO GREGORIO and REV. FR. T-21712 (T-49745) 4.1787 Riceland
GABRIELA. DELFINO, Petitioners, Tagapo, Sta. Rosa
vs. T-26378 (T-69592) 2.8662 Riceland
AVELINO K. ANASAO and ANGEL K. Tagapo, Sta. Rosa
ANASAO (Deceased and represented by his T-26381 (T-69595) 20.8108
sole heir, SIXTO C. ANASAO), Coconut land Masaya, Bay
Respondents. T-216233 4.7248 Riceland Sta.
Cruz, Sta. Rosa
DECISION Total 35.4825 has.6
In October 1975, Delfino soldthe 20.8108-
VILLARAMA, JR., J.: hectare coconut land covered by TCT No.
T-26381 (T-69595), leaving him with 14.6717
Assailed in this petition for review under hectares of riceland. The tenanted portion
Rule 45 are the Decision1 dated January 31, (9.8597 hectares) being tilled by
2011 and Resolution2 dated June 17, 2011 respondents Avelino K. Anasao and Angel K.
of the Court of Appeals (CA) in CA-G.R. SP Anasao, and another farmer, Rodriguez P.
No. 111147. The CA reversed and set aside Dacumos was placed under Operation Land
the Decision3 dated February 6, 2008 and Transfer (OLT) pursuant to Presidential
Resolution4 dated September 30,-2008 of Decree No. 27 (PD 27).7
the Office of the Pre.sident (OP) denying the
petition to annul or cancel the Orders5 dated
After full payment to the Land Bank of the
Philippines of the amortizations, the farmer-
beneficiarieswere issued Emancipation
Patents8 (EPs), as shown below:
Name of Farmer-Beneficiary TCT No./EP
Location Previous TCT No. Area
(in has.)
Avelino Anasao EP-791
Tagapo, Sta. Rosa, Laguna T-21712
3.0016
Angel Anasao EP-790 Tagapo, Sta.
Rosa T-21712 .7029
Angel Anasao EP-792 Tagapo, Sta.
Rosa T-21712 .1815
Rodriguez Dacumos EP-782 Pook,
Sta. Rosa Laguna T-21710 2.6811
Total 6.56719
The remaining area of 3.2942 hectares
covered by OLT was not issued with EPs.10
On February 8, 1992, prior to the registration
of the EPs in the Registry of Deeds, Delfino
filed an Application for Retention over the
entire 14.6717-hectare riceland. Upon the
recommendation of the Department of
Agrarian Reform (DAR), Laguna Provincial
Office, the DAR Regional Office IV Director
issued an Order11 dated June 22, 1993
denying retention of the 9.8597 hectares but
granting retention over the 4.8120 hectares
which was not covered by OLT.12
Delfino appealed to then DAR Secretary
Ernesto D. Garilao who issued an Order13
dated February 28, 1995, as follows:
WHEREFORE, premises considered, this
Order is hereby issued setting aside the
Order of the DAR Regional Director of
Region IV dated June 22, 1993, thus
petitioner is hereby given the maximum of
five (5) hectares from the tenanted portion
as his retained area.
SO ORDERED.14
A motion for reconsideration by way of
motion for intervention was filed by
respondents who argued that the
implementation of the February 28, 1995
Order will have the effect of cancelling the
EPs and consequently deprive them of
ownership of the landholdings they acquired
pursuant to PD 27. In his Order dated
December 13,1995, Secretary Garilao
denied the motion for utter lack of merit.15
Respondents appealed to the OP but later
withdrew the appeal and instead filed a
petition for review in the CA (CAG.R. SP No.
39761). By Resolution dated March 15,
1996, the CA’s Third Division dismissed the
petition for being insufficient in form and
substance. Respondents’ motion for
reconsideration was likewise denied under
Resolution dated January 28, 1997. Entry of
judgment was issued by the CA on said
case.16
Meanwhile, on August 24, 1995, Delfino sold
two hectares of his tenanted riceland
covered by TCT Nos. T-26378 (T-69592)
situated in Barangay Tagapo, Sta. Rosa,
Laguna, to SM Prime Holdings, Inc. Though
covered by OLT, no EP had been issued on
this portion under TCT No. T-26378
(T-69592).17 A new certificate of title (TCT
No. T-389984) in the name of SM Prime
Holdings, Inc.was issued on February 25,
1997.18
On September 13, 1995, Delfino filed before
the Provincial Agrarian Reform Adjudicator
(PARAD) a petition19 for cancellation of the
EPs previously issued to respondents on the
basis of the DAR Secretary’s Order dated
December 13, 1995 granting him
fivehectares as retention area (DCN- IV-
La-0437-95).
On February 17, 1997, respondents filed
before the Office of the DAR Secretary a
Motion for Clarificatory Judgment20 praying
that an administrative determination be
made of the particularportion to be retained
and whether such right of retention will result
in the cancellation of EPs already distributed
to farmer-beneficiaries identified as of
October 21, 1972.
Meanwhile, in a Joint Order21 dated
February 19,1997, Provincial Adjudicator
Barbara P. Tan granted Delfino’s petition for
cancellation of EPs, as follows:
WHEREFORE, in the light of the foregoing
considerations, ORDER is hereby jointly
issued in the instant consolidated petitions,
to wit:
1. Declaring an aggregate area offive (5)
hectares consisting of the lots covered by
the following certificates of title or
Emancipation Patents as Petitioner’s
retention area, to wit:
1) Transfer Certificate of Title No. EP-782,
EP No. A-326714 in the name of Rodriguez
Dacumos corresponding to a portion thereof
with an area of 1.1140 hectares;
2) Transfer Certificate of Title No. EP-791,
EP No. A-326741 in the name of Avelino K.
Anasao with an area of 3.0016 hectares;
3) Transfer Certificate of Title No. EP-790,
EP No. A-326742 and Transfer Certificate of
Title No. EP-792, EP No. A-326743 in the
name of Angel K. Anasao with a total area of
.8844 hectare;
2. Directing the Register of Deeds of Laguna
to cause the cancellation of the above-
mentioned certificates of title registered in
the names of Respondents Avelino K.
Anasao and Angel K. Anasao and the
reinstatement of Transfer Certificate of Title
No. T-21712 in the name of Renato L.
Delfino, Sr.;
3. Directing said Register of Deeds of
Laguna to cause the inscription of the instant
Order onthe original and Owner’s duplicate
copies of Transfer Certificate of Title No.
EP-782, EP No. A-326714 in the name of
Respondent Rodriguez Dacumos in respect
of the area of 1.1140 hectares;

4. Declaring the subject parcels of land
constituting Petitioner’s retention area
reverted to agricultural leasehold status and
private Respondents as the agricultural
lessees over their respective landholdings
thus reverted;
5. Directing private Respondents Avelino K.
Anasao, Angel K. Anasao and Rodriguez
Dacumos to surrender their respective
owner’s duplicate of the subject certificates
of title or Ema[n]cipation Patents to this
Office and/or to its authorized Officer upon
proper writ of execution for purposes of
implementing the instant Order, Provided, in
the event of failure or refusal on their part to
comply herewith the subject owner’s
duplicate of the said certificates of title or
emancipation patents shall be deemed
cancelled sans any need of prior surrender.
SO ORDERED.22
A writ of execution was issued on May 19,
1997 directing the DARAB Provincial Sheriff
toretrieve the owner’s duplicate copies of the
subject EPs for purposes of cancellation
and/or annotation. Respondents then filed a
petition for certiorari inthe CA (CA-G.R. SP
No. 44285) to annul the said writ and enjoin
its implementation.23
In their Supplemental Motion24 (to the
Motion for Clarificatory Judgment),
respondents pointed out that Delfino acted in
bad faith when he sold a portion of the OLT-
covered land infavor of SM Prime Holdings,
Inc. without the required DAR clearance.
They also prayed that the DAR Secretary
order the PARAD to stop the implementation
of the Joint Order in DARAB Case No. DCN-
IV-La-0437-95.
In his Order25 dated August 8, 1997,
Secretary Garilao denied respondents’
motion:
A perusal of the records would show that as
far as this Office is concerned, the
questioned Order has already become final
and executory as attested to by Director
Ruben Joel A. Puertollano of the Bureau of
Agrarian Legal Assistance, in his
Memorandum dated 16 May 1997. Even
granting, for the sake of argument, that the
herein motion could still be entertained, the
undeniable fact remains that the issues
sought to be clarified herein have already
been ruled upon by this Office in its Orders
dated 28 February 1995 and 13 December
1995. The same issues were raised in
petitioners’ Petition for Review with the Court
of Appeals which had likewise been
dismissed for being insufficient in form and
substance.
WHEREFORE, premises considered, an
Order is hereby issued DENYING herein
Motion for Clarificatory Judgment. This case
is considered closed.
SO ORDERED.
On September 20, 2001,respondents filed a
Petition to Annul and/or Cancel the DAR
Secretary’s Orders dated February 28, 1995,
December 13, 1995 and August 8, 1997 on
the following grounds: (1) Delfino is guilty of
fraud, misrepresentation and concealment of
a material fact, in his application for
retention; and (2) respondents’ EPs, which
are now covered by transfer certificates of
title, can be cancelled only by order of a
court, and not by the DAR or its Secretary.26
On February 2, 2006, DAR Secretary
Nasser C. Pangandaman issued an Order27
denying the petition to annul/cancel the
subject orders and clarifying the February
28, 1995 Order of Secretary Garilao, viz:
WHEREFORE, premises considered, Order
is hereby issued DENYINGthe Petition to
Annul/Cancel the Orders of the Secretary of
Agrarian Reform dated 28 February 1995,
13 December 1995 and 08 August 1997,
respectively. Therefore,the Order dated 28
February 1995 is hereby AFFIRMED.
FURTHER, the Order dated 28 February
1995 is hereby CLARIFIEDto read:
1. The Deed of Sale dated 24 August 1995
executed by the respondent and SM Prime
Holdings, Inc. with an area of two (2)
hectares shall be considered as the
respondent’s retention area;
2. The remaining three (3) hectares shall
either be taken from the 4.8120 hectares
covered by TCT Nos. T-21711 (T-49744) and
T-216233; and
3. The concerned Regional Director, PARO
and the MARO are hereby DIRECTEDto
proceed with the coverage of the remains of
parcels of agricultural land owned by
respondent, after having been given the five
(5) hectare retained area pursuant to the
above,for distribution to qualified
farmerbeneficiaries pursuant to existing
rules and regulations.
SO ORDERED.28
Delfino filed a motion for reconsideration
which was denied by Secretary
Pangandaman in his Order29 dated May 30,
2007, thus:
It is beyond dispute that the right to choose
the retention area pertains to the landowner.
However,this Office will not allow anyone to
circumvent the very purpose of the
Comprehensive Agrarian Reform Program –
the five (5) hectare retention limit. It bears
stressing that the inclusion of the two (2)
hectares which is the subjectof the Deed of
Sale dated 24 August 1995 executed by the
respondent in favor of SM Prime Holdings,
Inc., as retained area is only to prevent the
former to exercise his right of retention
beyond the maximum limits allowed by law.
The herein respondent cannot
simultaneously enjoy from [sic] the proceeds
of the Deed of Sale and at the same time
exercise the right of retention under CARP.
xxxx
As regards petitioners’ contention thatthere
is a need to clarify the Order dated 02
February 2006 in order toeffect the
reinstatement of the cancelled TCTs/EPs,
this Office finds the contention
unmeritorious. While it is true that the
respondent’s five (5) hectares retained area
were already delineated and clarified in the
assailed Order dated 02 February 2006,
nevertheless, this Office cannot issue a
directive reinstating TCT No. EP-791 in favor
of petitioner Avelino K. Anasao covering the
3.0016 hectares landholding and TCT Nos.
EP-790 and 792 in favor of petitioner Angel
Anasao covering the landholdings, with an
area of 0.7029 and 0.1815 hectare,
respectively.
It must be noted that petitioners’ titles were
cancelled by the DARAB in a separate
action for cancellation filed by herein
respondent Renato L. Delfino, which was
docketed as DARAB Case No. IV-La 437-95.
This Office, therefore, cannot interfere with
the decision of said forum. To do so would
tantamount to encroachment of powers.
Inasmuch as petitioner Rodriguez D.
Dacumos filed a Motion to Withdraw Petition
and/or Desistance to Further Pursue
Petition, wherein he manifested that he is no
longer interested in pursuing the instant
case, this Office is constrained to dismiss
the case in so far as petitioner Rodriguez D.
Dacumos is concerned. As pointed out by
petitioner Rodriguez D. Dacumos, he and
hereinrespondent Renato L. Delfino have
threshed out already their differences and
reached an agreement to settle the case
amicably. Hence, the petitioner’s prayers, to
wit: that his name would be dropped as party
petitioner inthe instant case and the property
covered by TCT No. EP-782 would be
declared as no longer included in the instant
case, is hereby granted. WHEREFORE, in
the light of the foregoing premises, Order is
hereby issued DENYINGthe herein Motion
for Reconsideration. Thus, the assailed
Order dated 2 February 2006 is hereby
AFFIRMED.
SO ORDERED.30
Respondents appealed the Orders dated
February 2,2006 and May 30, 2007 to the
OP.
On February 6, 2008, the OP rendered its
Decision partly granting the appeal by
nullifying the portion of the May 30, 2007
Order of Secretary Pangandaman which
clarified Secretary Garilao’s February 28,
1995 Order. Said office ruled that the two
hectaressold to SM Prime Holdings, Inc.
would not bring about any ambiguity in the
execution of the Order dated February 28,
1995, in relation to the December 13, 1995
and August 8, 1997 Orders, and that
whatever remains after deducting the 9.6717
hectares reserved for the farmer-
beneficiaries pertains to Delfino. As to the
remaining portion of the May 30, 2007 Order
of Secretary Pangandaman, the same was
upheld.
Respondents’ motion for reconsideration
was denied under the OP’s Resolution dated
September 30, 2008.
The case was elevatedby respondents to the
CA via a petition for review under Rule 43.
By Decision dated January 31, 2011, the CA
reversed the OP’s ruling and reinstated the
Orders dated February 2, 2006 and May 30,
2007 of Secretary Pangandaman. According
to the CA, the ambiguity in the February 28,
1995 Order of Secretary Garilao lies in its
failure to specify as to which portion of the
14.617 hectaresshould the five hectares
retention area of Delfino be taken. Thus,
evenafter the said order had become final
and executory, the DAR Secretary is not
precluded from making the necessary
amendments/clarifications thereof so that
the fallo would at least conform with the
body of said order and so that the same
could readily be executed with dispatch. But
since Delfino sold two hectares to SM Prime
Holdings, Inc. before the ambiguity could be
properly addressed by DAR, the CA found
no reversible error in the February 2, 2006
Order clarifying the ambiguity and in the May
30, 2007 Order stating the rationale for such
clarification.
Delfino, represented by his surviving heirs
(petitioners) filed a motion for
reconsideration but the CA deniedit under
Resolution dated June 17, 2011.
Issues
The issues to be resolved in the present
controversy are: (1) whether the February 2,
2006 Order of Secretary Pangandaman,
insofar as it clarified the February 28, 1995
Order of Secretary Garilao, violated the rule
on immutability of final judgments; and (2)
whether the inclusion of the twohectare
portion sold to SM Prime Holdings, Inc. in
Delfino’s retention area was in derogation of
Section 6 of Republic Act No. 6657 (RA
6657).
Our Ruling
We grant in part the petition.
The right of retention is a constitutionally
guaranteed right, which is subject to
qualification by the legislature.It serves to
mitigate the effects of compulsory land
acquisition by balancing the rights of the
landowner and the tenant and by
implementing the doctrine that social justice
was not meant to perpetrate an injustice
against the landowner.31
In the landmark case of Association of Small
Landowners in the Phils., Inc. v. Secretary of
Agrarian Reform,32 this Court held that
landowners who have not yet exercised their
retention rights under PD 27 are entitled to
the new retention rights under RA 6657.
Section 6 of the latter law defines the nature
and incidents of the landowner’s right to
retention, thus:
SEC. 6. Retention Limits– Exceptas
otherwise provided in this Act, no person
may own or retain, directly or indirectly, any
public or private agricultural land, the size of
which shall vary according to factors
governing a viable family-sized farm, such
as commodity produced, terrain,
infrastructure, and soil fertility as determined
by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case
shall retention by the landowner exceed five
(5) hectares. Three (3) hectares may be
awarded to each child of the landowner,
subject to the following qualifications: (1)
that he is at least fifteen (15) years of age;
and (2) that he is actually tilling the land or
directly managing the farm: Provided, That
landowners whose land have been covered
by Presidential Decree No. 27 shall be
allowed to keep the area originally retained
by them thereunder; Provided, further, That
original homestead grantees or their direct
compulsory heirs who still own the original
homestead at the time of the approval of this
Act shall retain the same areas as long as
they continue to cultivate said homestead.
The right to choose the area to be retained,
which shall be compact or contiguous, shall
pertain to the landowner; Provided, however,
That in case the area selected for retention
by the landowner is tenanted, the tenant
shall have the option to choose whether to
remain therein or be a beneficiary in the
same or another agricultural land with similar
or comparable features. In casethe tenant
chooses to remain in the retained area, he
shall be considered a leaseholder and shall
lose his right to be a beneficiary under this
Act. In case the tenant chooses to be a
beneficiary in another agricultural land, he
loses his right as a leaseholder to the land
retained by the landowner. The tenant must
exercise this option within a period of one (1)
year fromthe time the landowner manifests
his choice of the area for retention.
In all cases, the security of tenure of the
farmers or farmworkers on the land prior to
the approval of this Act shall be respected.
Upon the effectivity of this Act,any sale,
disposition, lease, management contract or
transfer ofpossession of private lands
executed by the original landowner in
violation of this Act shall be null and void;
Provided, however, That those executed
prior to this Act shall be valid only when
registered with the Registerof Deeds within a
period of three (3) months after the
effectivity of this Act. Thereafter, all
Registers of Deeds shall inform the DAR
within thirty (30) days of any transaction
involving agricultural lands in excess of five
(5) hectares. (Emphasis supplied.) Under
the February 28, 1995 Order of Secretary
Garilao, Delfino was granted five hectares
"from the tenantedportion as his retained
area." Said order had become final and
executory on March 9, 1997.
A decision that has acquired finality
becomes immutable and unalterable, and
may no longer be modified in any respect,
even if the modification is meant to correct
erroneous conclusions of fact or law, and
whether it will be made by the court that
rendered it or by the highest court of the
land.33 This doctrine of finality and
immutability of judgments is grounded on
fundamental considerationsof public policy
and sound practice to the effect that, at the
risk of occasional error, the judgments of the
courts must become final at somedefinite
date set by law.34
There are, however, exceptions to the
general rule, namely: (1) the correction of
clerical errors; (2) the so-called nunc pro
tuncentries which cause no prejudice to any
party; (3) void judgments; and (4) whenever
circumstances transpire after the finality of
the decision rendering its execution unjust
and inequitable.35 The exception to the
doctrine of immutability of judgment has
been applied in several cases in order to
serve substantial justice.36
In this case, the clarification made by
Secretary Pangandaman in his February 2,
2006 Order falls under the fourth exception.
It is true that the February 28, 1995 Order of
Secretary Garilao stated that the five
hectares shall be taken from the tenanted
area, which pertains to the 9.8597
hectaresof which 6.5671 hectares were
already issued with EPs in favor of
respondents. Subsequently, however,
without prior clearance from the DAR,
Delfino sold two hectares of land covered by
OLT to SM Prime Holdings, Inc. The DAR
Secretary thus found it fair and equitable to
include the said portion to Delfino’s retention
area, which meant that Delfino is entitled
only to the balance of three hectares.
As explained by Secretary Pangandaman in
his order denying Delfino’s motion for
reconsideration, thisclarification was made in
order not to circumvent the five-hectare
limitation as said landowner "cannot [be
allowed to] simultaneously enjoy … the
proceeds of the [sale] and at the same time
exercise the right of retention"37 to the
maximum of five hectares.
Petitioners argue that the amendment/
clarification of the February 28, 1995 Order
resulted in the diminution of Delfino’s right of
retention under Section 6 of RA 6657
because the DAR Secretary cannot impose
on the landowner the area of retention, the
choice of the landowner having been upheld
in numerous cases decided by this Court
particularly in Daez v. Court of Appeals38 .It
is further contended that the two hectares
sold to SM by Delfino cannot be considered
as retention area, the same having been
declared not agricultural land, pursuant to
the Exemption Order39 dated September
14, 2005 issued by Regional Director Homer
P. Tobias.
On the matter of allowing Delfino to choose
the remaining three hectares of his retention
area,we rule for the petitioners.
While we agree with Secretary
Pangandaman in holding that Delfino had
partially exercised his right of retention when
he sold two hectares to SM Prime Holdings,
Inc., afterhis application for retention was
granted by Secretary Garilao, we cannot
affirm the portion of the February 2, 2006
Order which decreed that the remaining
three hectares shall be taken "either from
the 4.8120 hectares covered by TCT Nos.
T-21711 (T-49744) and T-216233."40 Such
directive encroaches on the prerogative
expressly given to landowners under Section
6 of RA 6657 tochoose their area of
retention.
As this Court held in Daez v. Court of
Appeals,41 the right of retention can be
exercised over tenanted land and even
where CLOAs or EPs have been issued to
tenant-farmers provided that the right of
tenants under Section 6 of RA 6657 is
similarly protected. Thus:
…For as long as the area to be retained is
compact or contiguous and it does not
exceed the retention ceiling of five (5)
hectares, a landowner’s choice of the area
to be retained, must prevail.Moreover,
Administrative Order No. 4, series of 1991,
which supplies the details for the exercise of
a landowner’s retention rights, likewise
recognizes no limit to the prerogative of the
landowner, although he is persuaded to
retain other lands instead to avoid
dislocation of farmers.
Without doubt, this right of retention may be
exercised over tenanted land despite even
the issuance of Certificate of Land Transfer
(CLT) to farmer-beneficiaries. What must be
protected, however, is the right of the
tenants toopt to either stay on the land
chosen to be retained by the landowner or
be a beneficiary in another agricultural land
with similar or comparable features.
xxxx
The issuance of EPs or CLOAs to
beneficiaries does not absolutely bar the
landowner fromretaining the area covered
thereby. Under Administrative Order No. 2,
series of 1994, an EP or CLOA may be
cancelled if the land covered is later found to
be part of the landowner’s retained area.
A certificate of title accumulates inone
document a comprehensive statement of the
status of the fee heldby the owner of a
parcel of land. As such, it is a mere evidence
of ownership and it does not constitute the
title to the land itself. It cannot confer title
where no title has been acquired by any of
the means provided by law.
Thus, we had, in the past, sustained the
nullification of a certificate of title issued
pursuant to a homestead patent because the
land covered was not part of the public
domain and as a result, the government had
no authority to issue such patent in the first
place. Fraud in the issuance of the patent, is
also a ground for impugning the validity of a
certificate of title. In other words, the
invalidity of the patent or title is sufficient
basis for nullifying the certificate of title since
the latter is merely an evidence of the
former.
In the instant case, the CLTs of private
respondents over the subject 4.1685-hectare
riceland were issued without Eudosia Daez
having been accorded her right of choice as
to what to retain among her landholdings.
The transfer certificates of title thus issued
on the basis of those CLTs cannot operate to
defeat the right of the heirs of deceased
Eudosia Daez to retain the said 4.1685
hectares of riceland.42 (Underscoring in the
original; emphasis supplied.)
As to the Exemption Order allegedly issued
by the DAR Regional Director dated
September 14, 2005, the Court notes that
the matter of SM Prime Holdings, Inc.’s
application for exemption from CARP
coverage was never raised by petitioners
during the proceedings before the Regional
Director and OP. Records showed that the
administrative declaration of "non-
agricultural" use of the two-hectare portion
sold to SM Prime Holdings, Inc. pursuant to
a 1981 zoning classification ordinance, was
mentioned by petitioners for the first time in
their Motion for Reconsideration dated
February 17, 2011 after the CA rendered its
adverse ruling, attaching a photocopy
thereof tothe motion. The only grounds or
arguments invoked by petitioners in their
Memorandum submitted to the CA were the
finality of the assailed DAR Secretary’s
Orders dated February 28, 1995, December
13, 1995 and August 8, 1997 and that
respondents’ petition for review was filed out
of time.
The general rule is that issues raised for the
first time on appeal and not raised in the
proceedings in the lower court are barred by
estoppel. Points of law, theories, issues, and
arguments not brought to the attention of the
trial court ought not to be considered by a
reviewing court, as these cannot be raised
for the first time on appeal. To consider the
alleged facts and arguments raised belatedly
would amount to trampling on the basic
principles of fair play, justice, and due
process.43
Finally, we find no merit in respondents’
argument that the present petition should be
dismissed for failure of the other co-heirs/co-
petitioners to sign the verification and
certification against forum-shopping as
required by Sections 4 and 5, Rule 7 of the
1997 Rules of Civil Procedure. In the case of
Iglesia Ni Cristo v. Judge Ponferrada44 we
expounded on the purpose and sufficiency
of compliance with the verification and
certification against forum shopping
requirements, viz:
The issue in the present case is not the lack
of verification but the sufficiency of one
executed by only one of plaintiffs. This Court
held in Ateneo de Naga University v.
Manalo, that the verification requirement is
deemed substantially complied with when,
as in the present case, only one of the heirs-
plaintiffs, who has sufficient knowledge and
belief to swear to the truth of the allegations
in the petition (complaint), signed the
verification attached to it.Such verification is
deemed sufficient assurance that the
matters alleged in the petition have been
made in good faith or are true and correct,
not merely speculative.
The same liberality should likewise be
applied to the certification against forum
shopping.1âwphi1 The general rule is that
the certification must be signed by all
plaintiffs in a case and the signature of only
one of them is insufficient. However, the
Court has also stressed in a number of
cases that the rules onforum shopping were
designed to promote and facilitate the
orderly administration of justice and thus
should not be interpreted with such absolute
literalness as to subvert its own ultimate and
legitimate objective. The rule of substantial
compliance may be availed of with respect
to the contents of the certification. This is
because the requirement of strict
compliance with the provisions merely
underscores its mandatory nature in that the
certification cannot be altogether dispensed
with or its requirements completely
disregarded.
The substantial compliance rule has been
applied by this Court in a number of cases:
Cavile v. Heirs of Cavile, where the Court
sustained the validity of the certification
signed by only one of petitioners because he
is a relative of the other petitioners and co-
owner of the properties in dispute; Heirs of
Agapito T. Olarte v. Office of the President of
the Philippines, where the Court allowed a
certification signed by only two petitioners
because the case involved a family home in
which all the petitioners shared a common
interest; Gudoy v. Guadalquiver, where the
Court considered as valid the certification
signed by only four of the nine petitioners
because all petitioners filed as co-owners
pro indivisoa complaint against respondents
for quieting of title and damages, as such,
they all have joint interest in the undivided
whole; and Dar v. AlonzoLegasto, where the
Court sustained the certification signed by
only one of the spouses as they were sued
jointly involving a property in which they had
a common interest.
It is noteworthy that in all of the above
cases, the Court applied the rule on
substantial compliance because of the
commonality of interest of all the parties with
respect to the subject of the controversy.45
(Emphasis supplied.)
WHEREFORE, the petition is PARTLY
GRANTED.The Decision dated January 31,
2011 of the Court ofAppeals in CA-G.R. SP
No. 111147 is AFFIRMEDinsofar as it upheld
the February 2, 2006 Order of Secretary
Pangandaman declaring the two-hectare
land covered by TCT No. T-26378 (T-69592)
which was sold by Renato L. Delfino, Sr. to
SM Prime Holdings, Inc. as part of his
retention area.
The aforesaid Order is MODIFIEDin that
herein petitioners, heirs of Delfino, Sr., are
hereby allowed to choose three hectares of
their retention area from the remaining
portions of Delfino, Sr.’s landholding situated
in Sta. Rosa, Laguna, subject to the
conditions laid down in Section 6 of RA 6657
and DAR regulations. Respondents are
likewise entitled to exercise the rights
granted to tenants-beneficiaries affected by
landowner’s retention.
SO ORDERED.
SECOND DIVISION
[G.R. No. 127198. May 16, 2005]
LAND BANK OF THE PHILIPPINES,
petitioner, vs. HON. ELI G. C. NATIVIDAD,
Presiding Judge of the Regional Trial Court,
Branch 48, San Fernando, Pampanga, and
JOSE R. CAGUIAT represented by
Attorneys-in-fact JOSE T. BARTOLOME and
VICTORIO MANGALINDAN, respondents.
DECISION
TINGA, J.:
This is a Petition for Review[1] dated
December 6, 1996 assailing the Decision[2]
of the Regional Trial Court[3] dated July 5,
1996 which ordered the Department of
Agrarian Reform (DAR) and petitioner Land
Bank of the Philippines (Land Bank) to pay
private respondents the amount of P30.00
per square meter as just compensation for
the States acquisition of private respondents
properties under the land reform program.
The facts follow.
On May 14, 1993, private respondents filed
a petition before the trial court for the
determination of just compensation for their
agricultural lands situated in Arayat,
Pampanga, which were acquired by the
government pursuant to Presidential Decree
No. 27 (PD 27). The petition named as
respondents the DAR and Land Bank. With
leave of court, the petition was amended to
implead as co-respondents the registered
tenants of the land.
After trial, the court rendered the assailed
Decision the dispositive portion of which
reads:
WHEREFORE, judgment is hereby rendered
in favor of petitioners and against
respondents, ordering respondents,
particularly, respondents Department of
Agrarian Reform and the Land Bank of the
Philippines, to pay these lands owned by
petitioners and which are the subject of
acquisition by the State under its land reform
program, the amount of THIRTY PESOS
(P30.00) per square meter, as the just
compensation due for payment for same
lands of petitioners located at San Vicente
(or Camba), Arayat, Pampanga.
Respondent Department of Agrarian Reform
is also ordered to pay petitioners the amount
of FIFTY THOUSAND PESOS (P50,000.00)
as Attorneys Fee, and to pay the cost of suit.
SO ORDERED.[4]
DAR and Land Bank filed separate motions
for reconsideration which were denied by the
trial court in its Order[5] dated July 30, 1996
for being pro forma as the same did not
contain a notice of hearing. Thus, the
prescriptive period for filing an appeal was
not tolled. Land Bank consequently failed to
file a timely appeal and the assailed
Decision became final and executory.
Land Bank then filed a Petition for Relief
from Order Dated 30 July 1996,[6] citing
excusable negligence as its ground for relief.
Attached to the petition for relief were two
affidavits of merit claiming that the failure to
include in the motion for reconsideration a
notice of hearing was due to accident and/or
mistake.[7] The affidavit of Land Banks
counsel of record notably states that he
simply scanned and signed the Motion for
Reconsideration for Agrarian Case No.
2005, Regional Trial Court of Pampanga,
Branch 48, not knowing, or unmindful that it
had no notice of hearing[8] due to his heavy
workload.
The trial court, in its Order[9] of November
18, 1996, denied the petition for relief
because Land Bank lost a remedy in law
due to its own negligence.
In the instant petition for review, Land Bank
argues that the failure of its counsel to
include a notice of hearing due to pressure
of work constitutes excusable negligence
and does not make the motion for
reconsideration pro forma considering its
allegedly meritorious defenses. Hence, the
denial of its petition for relief from judgment
was erroneous.
According to Land Bank, private
respondents should have sought the
reconsideration of the DARs valuation of
their properties. Private respondents thus
failed to exhaust administrative remedies
when they filed a petition for the
determination of just compensation directly
with the trial court. Land Bank also insists
that the trial court erred in declaring that PD
27 and Executive Order No. 228 (EO 228)
are mere guidelines in the determination of
just compensation, and in relying on private
respondents evidence of the valuation of the
properties at the time of possession in 1993
and not on Land Banks evidence of the
value thereof as of the time of acquisition in
1972.
Private respondents filed a Comment[10]
dated February 22, 1997, averring that Land
Banks failure to include a notice of hearing
in its motion for reconsideration due merely
to counsels heavy workload, which resulted
in the motion being declared pro forma, does
not constitute excusable negligence,
especially in light of the admission of Land
Banks counsel that he has been a lawyer
since 1973 and has mastered the intricate
art and technique of pleading.
Land Bank filed a Reply[11] dated March 12,
1997 insisting that equity considerations
demand that it be heard on substantive
issues raised in its motion for
reconsideration.
The Court gave due course to the petition
and required the parties to submit their
respective memoranda.[12] Both parties
complied.[13]
The petition is unmeritorious.
At issue is whether counsels failure to
include a notice of hearing constitutes
excusable negligence entitling Land Bank to
a relief from judgment.
Section 1, Rule 38 of the 1997 Rules of Civil
Procedure provides:
Sec. 1. Petition for relief from judgment,
order, or other proceedings.When a
judgment or final order is entered, or any
other proceeding is thereafter taken against
a party in any court through fraud, accident,
mistake, or excusable negligence, he may
file a petition in such court and in the same
case praying that the judgment, order or
proceeding be set aside.
As can clearly be gleaned from the foregoing
provision, the remedy of relief from judgment
can only be resorted to on grounds of fraud,
accident, mistake or excusable negligence.
Negligence to be excusable must be one
which ordinary diligence and prudence could
not have guarded against.[14]
Measured against this standard, the reason
profferred by Land Banks counsel, i.e., that
his heavy workload prevented him from
ensuring that the motion for reconsideration
included a notice of hearing, was by no
means excusable.
Indeed, counsels admission that he simply
scanned and signed the Motion for
Reconsideration for Agrarian Case No.
2005, Regional Trial Court of Pampanga,
Branch 48, not knowing, or unmindful that it
had no notice of hearing speaks volumes of
his arrant negligence, and cannot in any
manner be deemed to constitute excusable
negligence.
The failure to attach a notice of hearing
would have been less odious if committed by
a greenhorn but not by a lawyer who claims
to have mastered the intricate art and
technique of pleading.[15]
Indeed, a motion that does not contain the
requisite notice of hearing is nothing but a
mere scrap of paper. The clerk of court does
not even have the duty to accept it, much
less to bring it to the attention of the
presiding judge.[16] The trial court therefore
correctly considered the motion for
reconsideration pro forma. Thus, it cannot
be faulted for denying Land Banks motion
for reconsideration and petition for relief
from judgment.
It should be emphasized at this point that
procedural rules are designed to facilitate
the adjudication of cases. Courts and
litigants alike are enjoined to abide strictly by
the rules. While in certain instances, we
allow a relaxation in the application of the
rules, we never intend to forge a weapon for
erring litigants to violate the rules with
impunity. The liberal interpretation and
application of rules apply only in proper
cases of demonstrable merit and under
justifiable causes and circumstances. While
it is true that litigation is not a game of
technicalities, it is equally true that every
case must be prosecuted in accordance with
the prescribed procedure to ensure an
orderly and speedy administration of justice.
Party litigants and their counsel are well
advised to abide by, rather than flaunt,
procedural rules for these rules illumine the
path of the law and rationalize the pursuit of
justice.[17]
Aside from ruling on this procedural issue,
the Court shall also resolve the other issues
presented by Land Bank, specifically as
regards private respondents alleged failure
to exhaust administrative remedies and the
question of just compensation.
Land Bank avers that private respondents
should have sought the reconsideration of
the DARs valuation instead of filing a petition
to fix just compensation with the trial court.
The records reveal that Land Banks
contention is not entirely true. In fact, private
respondents did write a letter[18] to the DAR
Secretary objecting to the land valuation
summary submitted by the Municipal
Agrarian Reform Office and requesting a
conference for the purpose of fixing just
compensation. The letter, however, was left
unanswered prompting private respondents
to file a petition directly with the trial court.
At any rate, in Philippine Veterans Bank v.
Court of Appeals,[19] we declared that there
is nothing contradictory between the DARs
primary jurisdiction to determine and
adjudicate agrarian reform matters and
exclusive original jurisdiction over all matters
involving the implementation of agrarian
reform, which includes the determination of
questions of just compensation, and the
original and exclusive jurisdiction of regional
trial courts over all petitions for the
determination of just compensation. The first
refers to administrative proceedings, while
the second refers to judicial proceedings.
In accordance with settled principles of
administrative law, primary jurisdiction is
vested in the DAR to determine in a
preliminary manner the just compensation
for the lands taken under the agrarian reform
program, but such determination is subject
to challenge before the courts. The
resolution of just compensation cases for the
taking of lands under agrarian reform is,
after all, essentially a judicial function.[20]
Thus, the trial did not err in taking
cognizance of the case as the determination
of just compensation is a function addressed
to the courts of justice.
Land Banks contention that the property was
acquired for purposes of agrarian reform on
October 21, 1972, the time of the effectivity
of PD 27, ergo just compensation should be
based on the value of the property as of that
time and not at the time of possession in
1993, is likewise erroneous. In Office of the
President, Malacaang, Manila v. Court of
Appeals,[21] we ruled that the seizure of the
landholding did not take place on the date of
effectivity of PD 27 but would take effect on
the payment of just compensation.
Under the factual circumstances of this
case, the agrarian reform process is still
incomplete as the just compensation to be
paid private respondents has yet to be
settled. Considering the passage of Republic
Act No. 6657 (RA 6657)[22] before the
completion of this process, the just
compensation should be determined and the
process concluded under the said law.
Indeed, RA 6657 is the applicable law, with
PD 27 and EO 228 having only suppletory
effect, conformably with our ruling in Paris v.
Alfeche.[23]
Section 17 of RA 6657 which is particularly
relevant, providing as it does the guideposts
for the determination of just compensation,
reads as follows:
Sec. 17. Determination of Just
Compensation.In determining just
compensation, the cost of acquisition of the
land, the current value of like properties, its
nature, actual use and income, the sworn
valuation by the owner, the tax declarations,
and the assessment made by government
assessors shall be considered. The social
and economic benefits contributed by the
farmers and the farm-workers and by the
Government to the property as well as the
non-payment of taxes or loans secured from
any government financing institution on the
said land shall be considered as additional
factors to determine its valuation.
It would certainly be inequitable to determine
just compensation based on the guideline
provided by PD 27 and EO 228 considering
the DARs failure to determine the just
compensation for a considerable length of
time. That just compensation should be
determined in accordance with RA 6657,
and not PD 27 or EO 228, is especially
imperative considering that just
compensation should be the full and fair
equivalent of the property taken from its
owner by the expropriator, the equivalent
being real, substantial, full and ample.[24]
In this case, the trial court arrived at the just
compensation due private respondents for
their property, taking into account its nature
as irrigated land, location along the highway,
market value, assessors value and the
volume and value of its produce. This Court
is convinced that the trial court correctly
determined the amount of just compensation
due private respondents in accordance with,
and guided by, RA 6657 and existing
jurisprudence.
WHEREFORE, the petition is DENIED.
Costs against petitioner.
SO ORDERED.
FIRST DIVISION
JOSEFINA S. LUBRICA, in her G.R. No.
170220
capacity as Assignee of FEDERICO
C. SUNTAY, NENITA SUNTAY
TAEDO and EMILIO A.M.
SUNTAY III,
Petitioners, Present:
Panganiban, C.J. (Chairperson),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ.
LAND BANK OF THE PHILIPPINES,
Respondent. Promulgated:
November 20, 2006
x
-----------------------------------------------------------
----------------------------- x
DECISION
YNARES-SANTIAGO, J.:
This Petition for Review on Certiorari under
Rule 45 of the Rules of Court assails the
October 27, 2005 Amended Decision[1] of
the Court of Appeals in CA-G.R. SP No.
77530, which vacated its May 26, 2004
Decision affirming (a) the Order of the
Regional Trial Court of San Jose, Occidental
Mindoro, Branch 46, acting as Special
Agrarian Court, in Agrarian Case Nos.
R-1339 and R-1340, dated March 31, 2003
directing respondent Land Bank of the
Philippines (LBP) to deposit the provisional
compensation as determined by the
Provincial Agrarian Reform Adjudicator
(PARAD); (b) the May 26, 2003 Resolution
denying LBPs motion for reconsideration;
and (c) the May 27, 2003 Order requiring
Teresita V. Tengco, LBPs Land
Compensation Department Manager, to
comply with the March 31, 2003 Order.
The facts of the case are as follows:
Petitioner Josefina S. Lubrica is the
assignee[2] of Federico C. Suntay over
certain parcels of agricultural land located at
Sta. Lucia, Sablayan, Occidental Mindoro,
with an area of 3,682.0285 hectares covered
by Transfer Certificate of Title (TCT) No.
T-31 (T-1326)[3] of the Registry of Deeds of
Occidental Mindoro. In 1972, a portion of the
said property with an area of 311.7682
hectares, was placed under the land reform
program pursuant to Presidential Decree No.
27 (1972)[4] and Executive Order No. 228
(1987).[5] The land was thereafter
subdivided and distributed to farmer
beneficiaries. The Department of Agrarian
Reform (DAR) and the LBP fixed the value
of the land at P5,056,833.54 which amount
was deposited in cash and bonds in favor of
Lubrica.
On the other hand, petitioners Nenita
Suntay-Taedo and Emilio A.M. Suntay III
inherited from Federico Suntay a parcel of
agricultural land located at Balansay,
Mamburao, Occidental Mindoro covered by
TCT No. T-128[6] of the Register of Deeds of
Occidental Mindoro, consisting of two lots,
namely, Lot 1 with an area of 45.0760
hectares and Lot 2 containing an area of
165.1571 hectares or a total of 210.2331
hectares. Lot 2 was placed under the
coverage of P.D. No. 27 but only 128.7161
hectares was considered by LBP and valued
the same at P1,512,575.05.
Petitioners rejected the valuation of their
properties, hence the Office of the Provincial
Agrarian Reform Adjudicator (PARAD)
conducted summary administrative
proceedings for determination of just
compensation. On January 29, 2003, the
PARAD fixed the preliminary just
compensation at P51,800,286.43 for the
311.7682 hectares (TCT No. T-31) and
P21,608,215.28 for the 128.7161 hectares
(TCT No. T-128).[7]
Not satisfied with the valuation, LBP filed on
February 17, 2003, two separate petitions[8]
for judicial determination of just
compensation before the Regional Trial
Court of San Jose, Occidental Mindoro,
acting as a Special Agrarian Court, docketed
as Agrarian Case No. R-1339 for TCT No.
T-31 and Agrarian Case No. R-1340 for TCT
No. T-128, and raffled to Branch 46 thereof.
Petitioners filed separate Motions to Deposit
the Preliminary Valuation Under Section
16(e) of Republic Act (R.A.) No. 6657 (1988)
[9] and Ad Cautelam Answer praying among
others that LBP deposit the preliminary
compensation determined by the PARAD.
On March 31, 2003, the trial court issued an
Order[10] granting petitioners motion, the
dispositive portion of which reads:
WHEREFORE, Ms. Teresita V. Tengco, of
the Land Compensation Department I (LCD
I), Land Bank of the Philippines, is hereby
ordered pursuant to Section 16 (e) of RA
6657 in relation to Section 2, Administrative
Order No. 8, Series of 1991, to deposit the
provisional compensation as determined by
the PARAD in cash and bonds, as follows:
1. In Agrarian Case No. R-1339, the amount
of P 51,800,286.43, minus the amount
received by the Landowner;
2. In Agrarian Case No. R-1340, the amount
of P 21,608,215.28, less the amount of P
1,512,575.16, the amount already deposited.
Such deposit must be made with the Land
Bank of the Philippines, Manila within five (5)
days from receipt of a copy of this order and
to notify this court of her compliance within
such period.
Let this order be served by the Sheriff of this
Court at the expense of the movants.
SO ORDERED.[11]
LBPs motion for reconsideration was denied
in a Resolution[12] dated May 26, 2003. The
following day, May 27, 2003, the trial court
issued an Order[13] directing Ms. Teresita V.
Tengco, LBPs Land Compensation
Department Manager, to deposit the
amounts.
Thus, on June 17, 2003, LBP filed with the
Court of Appeals a Petition for Certiorari and
Prohibition under Rule 65 of the Rules of
Court with application for the issuance of a
Temporary Restraining Order and Writ of
Preliminary Injunction docketed as CA-G.R.
SP No. 77530.[14]
On June 27, 2003, the appellate court
issued a 60-day temporary restraining
order[15] and on October 6, 2003, a writ of
preliminary injunction.[16]
On May 26, 2004, the Court of Appeals
rendered a Decision[17] in favor of the
petitioners, the dispositive portion of which
reads:
WHEREFORE, premises considered, there
being no grave abuse of discretion, the
instant Petition for Certiorari and Prohibition
is DENIED. Accordingly, the Order dated
March 31, 2003, Resolution dated May 26,
2003, and Order dated May 27, 2003 are
hereby AFFIRMED. The preliminary
injunction We previously issued is hereby
LIFTED and DISSOLVED.
SO ORDERED.[18]
The Court of Appeals held that the trial court
correctly ordered LBP to deposit the
amounts provisionally determined by the
PARAD as there is no law which prohibits
LBP to make a deposit pending the fixing of
the final amount of just compensation. It also
noted that there is no reason for LBP to
further delay the deposit considering that the
DAR already took possession of the
properties and distributed the same to
farmer-beneficiaries as early as 1972.
LBP moved for reconsideration which was
granted. On October 27, 2005, the appellate
court rendered the assailed Amended
Decision,[19] the dispositive portion of which
reads:
Wherefore, in view of the prescription of a
different formula in the case of Gabatin
which We hold as cogent and compelling
justification necessitating Us to effect the
reversal of Our judgment herein sought to be
reconsidered, the instant Motion for
Reconsideration is GRANTED, and Our May
26, 2004 Decision is hereby VACATED and
ABANDONED with the end in view of giving
way to and acting in harmony and in
congruence with the tenor of the ruling in the
case of Gabatin. Accordingly, the assailed
rulings of the Special Agrarian Court is (sic)
commanded to compute and fix the just
compensation for the expropriated
agricultural lands strictly in accordance with
the mode of computation prescribed (sic)
Our May 26, 2004 judgment in the case of
Gabatin.
SO ORDERED.[20]
In the Amended Decision, the Court of
Appeals held that the immediate deposit of
the preliminary value of the expropriated
properties is improper because it was
erroneously computed. Citing Gabatin v.
Land Bank of the Philippines,[21] it held that
the formula to compute the just
compensation should be: Land Value = 2.5 x
Average Gross Production x Government
Support Price. Specifically, it held that the
value of the government support price for
the corresponding agricultural produce (rice
and corn) should be computed at the time of
the legal taking of the subject agricultural
land, that is, on October 21, 1972 when
landowners were effectively deprived of
ownership over their properties by virtue of
P.D. No. 27. According to the Court of
Appeals, the PARAD incorrectly used the
amounts of P500 and P300 which are the
prevailing government support price for
palay and corn, respectively, at the time of
payment, instead of P35 and P31, the
prevailing government support price at the
time of the taking in 1972.
Hence, this petition raising the following
issues:
A. THE COURT A QUO HAS DECIDED THE
CASE IN A WAY NOT IN ACCORD WITH
THE LATEST DECISION OF THE
SUPREME COURT IN THE CASE OF
LAND BANK OF THE PHILIPPINES VS.
HON. ELI G.C. NATIVIDAD, ET AL., G.R.
NO. 127198, PROM. MAY 16, 2005; and[22]

B. THE COURT A QUO HAS, WITH GRAVE
GRAVE ABUSE OF DISCRETION, SO FAR
DEPARTED FROM THE ACCEPTED AND
USUAL COURSE OF JUDICIAL
PROCEEDINGS, DECIDING ISSUES THAT
HAVE NOT BEEN RAISED, AS TO CALL
FOR AN EXERCISE OF THE POWER OF
SUPERVISION.[23]
Petitioners insist that the determination of
just compensation should be based on the
value of the expropriated properties at the
time of payment. Respondent LBP, on the
other hand, claims that the value of the
realties should be computed as of October
21, 1972 when P.D. No. 27 took effect.
The petition is impressed with merit.
In the case of Land Bank of the Philippines
v. Natividad,[24] the Court ruled thus:
Land Banks contention that the property was
acquired for purposes of agrarian reform on
October 21, 1972, the time of the effectivity
of PD 27, ergo just compensation should be
based on the value of the property as of that
time and not at the time of possession in
1993, is likewise erroneous. In Office of the
President, Malacaang, Manila v. Court of
Appeals, we ruled that the seizure of the
landholding did not take place on the date of
effectivity of PD 27 but would take effect on
the payment of just compensation.
The Natividad case reiterated the Courts
ruling in Office of the President v. Court of
Appeals[25] that the expropriation of the
landholding did not take place on the
effectivity of P.D. No. 27 on October 21,
1972 but seizure would take effect on the
payment of just compensation judicially
determined.
Likewise, in the recent case of Heirs of
Francisco R. Tantoco, Sr. v. Court of
Appeals,[26] we held that expropriation of
landholdings covered by R.A. No. 6657 take
place, not on the effectivity of the Act on
June 15, 1988, but on the payment of just
compensation.
In the instant case, petitioners were deprived
of their properties in 1972 but have yet to
receive the just compensation therefor. The
parcels of land were already subdivided and
distributed to the farmer-beneficiaries
thereby immediately depriving petitioners of
their use. Under the circumstances, it would
be highly inequitable on the part of the
petitioners to compute the just compensation
using the values at the time of the taking in
1972, and not at the time of the payment,
considering that the government and the
farmer-beneficiaries have already benefited
from the land although ownership thereof
have not yet been transferred in their
names. Petitioners were deprived of their
properties without payment of just
compensation which, under the law, is a
prerequisite before the property can be
taken away from its owners.[27] The transfer
of possession and ownership of the land to
the government are conditioned upon the
receipt by the landowner of the
corresponding payment or deposit by the
DAR of the compensation with an accessible
bank. Until then, title remains with the
landowner.[28]
Our ruling in Association of Small
Landowners in the Philippines, Inc. v.
Secretary of Agrarian Reform[29] is
instructive, thus:
It is true that P.D. No. 27 expressly ordered
the emancipation of tenant-farmer as
October 21, 1972 and declared that he shall
be deemed the owner of a portion of land
consisting of a family-sized farm except that
no title to the land owned by him was to be
actually issued to him unless and until he
had become a full-fledged member of a duly
recognized farmers cooperative. It was
understood, however, that full payment of
the just compensation also had to be made
first, conformably to the constitutional
requirement.
When E.O. No. 228, categorically stated in
its Section 1 that:
All qualified farmer-beneficiaries are now
deemed full owners as of October 21, 1972
of the land they acquired by virtue of
Presidential Decree No. 27 (Emphasis
supplied.)
it was obviously referring to lands already
validly acquired under the said decree, after
proof of full-fledged membership in the
farmers cooperatives and full payment of
just compensation. x x x
The CARP Law, for its part, conditions the
transfer of possession and ownership of the
land to the government on receipt by the
landowner of the corresponding payment or
the deposit by the DAR of the compensation
in cash or LBP bonds with an accessible
bank. Until then, title also remains with the
landowner. No outright change of ownership
is contemplated either.
We also note that the expropriation
proceedings in the instant case was initiated
under P.D. No. 27 but the agrarian reform
process is still incomplete considering that
the just compensation to be paid to
petitioners has yet to be settled. Considering
the passage of R.A. No. 6657 before the
completion of this process, the just
compensation should be determined and the
process concluded under the said law.
Indeed, R.A. No. 6657 is the applicable law,
with P.D. No. 27 and E.O. No. 228 having
only suppletory effect.[30]
In Land Bank of the Philippines v. Court of
Appeals,[31] we held that:
RA 6657 includes PD 27 lands among the
properties which the DAR shall acquire and
distribute to the landless. And to facilitate the
acquisition and distribution thereof, Secs.
16, 17 and 18 of the Act should be adhered
to.
Section 18 of R.A. No. 6657 mandates that
the LBP shall compensate the landowner in
such amount as may be agreed upon by the
landowner and the DAR and the LBP or as
may be finally determined by the court as
the just compensation for the land. In
determining just compensation, the cost of
the acquisition of the land, the current value
of like properties, its nature, actual use and
income, the sworn valuation by the owner,
the tax declarations, and the assessment
made by government assessors shall be
considered. The social and economic
benefits contributed by the farmers and the
farmworkers and by the government to the
property as well as the nonpayment of taxes
or loans secured from any government
financing institution on the said land shall be
considered as additional factors to
determine its valuation.[32]
Corollarily, we held in Land Bank of the
Philippines v. Celada[33] that the above
provision was converted into a formula by
the DAR through Administrative Order No.
05, S. 1998, to wit:
Land Value (LV) = (Capitalized Net Income x
0.6) + (Comparable Sales x 0.3) + (Market
Value per Tax Declaration x 0.1)
Petitioners were deprived of their properties
way back in 1972, yet to date, they have not
yet received just compensation. Thus, it
would certainly be inequitable to determine
just compensation based on the guideline
provided by P.D. No. 227 and E.O. No. 228
considering the failure to determine just
compensation for a considerable length of
time. That just compensation should be
determined in accordance with R.A. No.
6657 and not P.D. No. 227 or E.O. No. 228,
is important considering that just
compensation should be the full and fair
equivalent of the property taken from its
owner by the expropriator, the equivalent
being real, substantial, full and ample.[34]
WHEREFORE, premises considered, the
petition is GRANTED. The assailed
Amended Decision dated October 27, 2005
of the Court of Appeals in CA-G.R. SP No.
77530 is REVERSED and SET ASIDE. The
Decision dated May 26, 2004 of the Court of
Appeals affirming (a) the March 31, 2003
Order of the Special Agrarian Court ordering
the respondent Land Bank of the Philippines
to deposit the just compensation
provisionally determined by the PARAD; (b)
the May 26, 2003 Resolution denying
respondents Motion for Reconsideration;
and (c) the May 27, 2003 Order directing
Teresita V. Tengco, respondents Land
Compensation Department Manager to
comply with the March 31, 2003 Order, is
REINSTATED. The Regional Trial Court of
San Jose, Occidental Mindoro, Branch 46,
acting as Special Agrarian Court is
ORDERED to proceed with dispatch in the
trial of Agrarian Case Nos. R-1339 and
R-1340, and to compute the final valuation
of the subject properties based on the
aforementioned formula.
SO ORDERED. Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 118712 October 6, 1995
LAND BANK OF THE PHILIPPINES,
petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP,
HEIRS OF EMILIANO F. SANTIAGO,
AGRICULTURAL MANAGEMENT &
DEVELOPMENT CORP., respondents.
G.R. No. 118745 October 6, 1995
DEPARTMENT OF AGRARIAN REFORM,
represented by the Secretary of Agrarian
Reform, petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP,
HEIRS OF EMILIANO F. SANTIAGO,
AGRICULTURAL MANAGEMENT &
DEVELOPMENT CORP., ET AL.,
respondents.
FRANCISCO, R., J.:
It has been declared that the duty of the
court to protect the weak and the
underprivileged should not be carried out to
such an extent as deny justice to the
landowner whenever truth and justice
happen to be on his side.1 As eloquently
stated by Justice Isagani Cruz:
. . . social justice — or any justice for that
matter — is for the deserving, whether he be
a millionaire in his mansion or a pauper in
his hovel. It is true that, in case of
reasonable doubt, we are called upon to tilt
the balance in favor of the poor, to whom the
Constitution fittingly extends its sympathy
and compassion. But never is it justified to
prefer the poor simply because they are
poor, or to reject the rich simply because
they are rich, for justice must always be
served, for poor and rich alike, according to
the mandate of the law.2
In this agrarian dispute, it is once more
imperative that the aforestated principles be
applied in its resolution.
Separate petitions for review were filed by
petitioners Department of Agrarian Reform
(DAR) (G.R. No. 118745) and Land Bank of
the Philippines (G.R. No. 118712) following
the adverse ruling by the Court of Appeals in
CA-G.R. SP No. 33465. However, upon
motion filed by private respondents, the
petitions were ordered consolidated.3
Petitioners assail the decision of the Court of
Appeals promulgated on October 20, 1994,
which granted private respondents' Petition
for Certiorari and Mandamus and ruled as
follows:
WHEREFORE, premises considered, the
Petition for Certiorari and Mandamus is
hereby GRANTED:
a) DAR Administrative Order No. 9,
Series of 1990 is declared null and void
insofar as it provides for the opening of trust
accounts in lieu of deposits in cash or
bonds;
b) Respondent Landbank is ordered to
immediately deposit — not merely
"earmark", "reserve" or "deposit in trust" —
with an accessible bank designated by
respondent DAR in the names of the
following petitioners the following amounts in
cash and in government financial
instruments — within the parameters of Sec.
18 (1) of RA 6657:
P 1,455,207.31 Pedro L. Yap
P 135,482.12 Heirs of Emiliano
Santiago
P 15,914,127.77 AMADCOR;
c) The DAR-designated bank is ordered
to allow the petitioners to withdraw the
above-deposited amounts without prejudice
to the final determination of just
compensation by the proper authorities; and
d) Respondent DAR is ordered to 1)
immediately conduct summary
administrative proceedings to determine the
just compensation for the lands of the
petitioners giving the petitioners 15 days
from notice within which to submit evidence
and to 2) decide the cases within 30 days
after they are submitted for decision.4
Likewise, petitioners seek the reversal of the
Resolution dated January 18, 1995,5
denying their motion for reconsideration.
Private respondents are landowners whose
landholdings were acquired by the DAR and
subjected to transfer schemes to qualified
beneficiaries under the Comprehensive
Agrarian Reform Law (CARL, Republic Act
No. 6657).
Aggrieved by the alleged lapses of the DAR
and the Landbank with respect to the
valuation and payment of compensation for
their land pursuant to the provisions of RA
6657, private respondents filed with this
Court a Petition for Certiorari and
Mandamus with prayer for preliminary
mandatory injunction. Private respondents
questioned the validity of DAR
Administrative Order No. 6, Series of 19926
and DAR Administrative Order No. 9, Series
of 1990,7 and sought to compel the DAR to
expedite the pending summary
administrative proceedings to finally
determine the just compensation of their
properties, and the Landbank to deposit in
cash and bonds the amounts respectively
"earmarked", "reserved" and "deposited in
trust accounts" for private respondents, and
to allow them to withdraw the same.
Through a Resolution of the Second Division
dated February 9, 1994, this Court referred
the petition to respondent Court of Appeals
for proper determination and disposition.
As found by respondent court , the following
are undisputed:
Petitioner Pedro Yap alleges that "(o)n 4
September 1992 the transfer certificates of
title (TCTs) of petitioner Yap were totally
cancelled by the Registrar of Deeds of Leyte
and were transferred in the names of farmer
beneficiaries collectively, based on the
request of the DAR together with a
certification of the Landbank that the sum of
P735,337.77 and P719,869.54 have been
earmarked for Landowner Pedro L. Yap for
the parcels of lands covered by TCT Nos.
6282 and 6283, respectively, and issued in
lieu thereof TC-563 and TC-562,
respectively, in the names of listed
beneficiaries (ANNEXES "C" & "D") without
notice to petitioner Yap and without
complying with the requirement of Section
16 (e) of RA 6657 to deposit the
compensation in cash and Landbank bonds
in an accessible bank. (Rollo, p. 6).
The above allegations are not disputed by
any of the respondents.
Petitioner Heirs of Emiliano Santiago allege
that the heirs of Emiliano F. Santiago are the
owners of a parcel of land located at Laur,
NUEVA ECIJA with an area of 18.5615
hectares covered by TCT No. NT-60359 of
the registry of Deeds of Nueva Ecija,
registered in the name of the late Emiliano F.
Santiago; that in November and December
1990, without notice to the petitioners, the
Landbank required and the beneficiaries
executed Actual tillers Deed of Undertaking
(ANNEX "B") to pay rentals to the LandBank
for the use of their farmlots equivalent to at
least 25% of the net harvest; that on 24
October 1991 the DAR Regional Director
issued an order directing the Landbank to
pay the landowner directly or through the
establishment of a trust fund in the amount
of P135,482.12, that on 24 February 1992,
the Landbank reserved in trust P135,482.12
in the name of Emiliano F. Santiago.
(ANNEX "E"; Rollo,
p. 7); that the beneficiaries stopped paying
rentals to the landowners after they signed
the Actual Tiller's Deed of Undertaking
committing themselves to pay rentals to the
LandBank (Rollo, p. 133).
The above allegations are not disputed by
the respondents except that respondent
Landbank claims 1) that it was respondent
DAR, not Landbank which required the
execution of Actual Tillers Deed of
Undertaking (ATDU, for brevity); and 2) that
respondent Landbank, although armed with
the ATDU, did not collect any amount as
rental from the substituting beneficiaries
(Rollo, p. 99).
Petitioner Agricultural Management and
Development Corporation (AMADCOR, for
brevity) alleges — with respect to its
properties located in San Francisco, Quezon
— that the properties of AMADCOR in San
Francisco, Quezon consist of a parcel of
land covered by TCT No. 34314 with an area
of 209.9215 hectares and another parcel
covered by TCT No. 10832 with an area of
163.6189 hectares; that a summary
administrative proceeding to determine
compensation of the property covered by
TCT No. 34314 was conducted by the
DARAB in Quezon City without notice to the
landowner; that a decision was rendered on
24 November 1992 (ANNEX "F") fixing the
compensation for the parcel of land covered
by TCT No. 34314 with an area of 209.9215
hectares at P2,768,326.34 and ordering the
Landbank to pay or establish a trust account
for said amount in the name of AMADCOR;
and that the trust account in the amount of
P2,768,326.34 fixed in the decision was
established by adding P1,986,489.73 to the
first trust account established on 19
December 1991 (ANNEX "G"). With respect
to petitioner AMADCOR's property in
Tabaco, Albay, it is alleged that the property
of AMADCOR in Tabaco, Albay is covered
by TCT No. T-2466 of the Register of Deeds
of Albay with an area of 1,629.4578
hectares'; that emancipation patents were
issued covering an area of 701.8999
hectares which were registered on 15
February 1988 but no action was taken
thereafter by the DAR to fix the
compensation for said land; that on 21 April
1993, a trust account in the name of
AMADCOR was established in the amount
of P12,247,217.83', three notices of
acquisition having been previously rejected
by AMADCOR. (Rollo, pp. 8-9)
The above allegations are not disputed by
the respondents except that respondent
Landbank claims that petitioner failed to
participate in the DARAB proceedings (land
valuation case) despite due notice to it
(Rollo, p. 100).8
Private respondents argued that
Administrative Order No. 9, Series of 1990
was issued without jurisdiction and with
grave abuse of discretion because it permits
the opening of trust accounts by the
Landbank, in lieu of depositing in cash or
bonds in an accessible bank designated by
the DAR, the compensation for the land
before it is taken and the titles are cancelled
as provided under Section 16(e) of RA
6657.9 Private respondents also assail the
fact that the DAR and the Landbank merely
"earmarked", "deposited in trust" or
"reserved" the compensation in their names
as landowners despite the clear mandate
that before taking possession of the
property, the compensation must be
deposited in cash or in bonds. 10
Petitioner DAR, however, maintained that
Administrative Order No. 9 is a valid
exercise of its rule-making power pursuant
to Section 49 of RA 6657.11 Moreover, the
DAR maintained that the issuance of the
"Certificate of Deposit" by the Landbank was
a substantial compliance with Section 16(e)
of RA 6657 and the ruling in the case of
Association of Small Landowners in the
Philippines, Inc., et al. vs. Hon. Secretary of
Agrarian Reform, G.R. No. 78742, July 14,
1989 (175 SCRA 343).12
For its part, petitioner Landbank declared
that the issuance of the Certificates of
Deposits was in consonance with Circular
Nos. 29, 29-A and 54 of the Land
Registration Authority where the words
"reserved/deposited" were also used.13
On October 20, 1994, the respondent court
rendered the assailed decision in favor of
private respondents.14 Petitioners filed a
motion for reconsideration but respondent
court denied the same.15
Hence, the instant petitions.
On March 20, 1995, private respondents
filed a motion to dismiss the petition in G.R.
No. 118745 alleging that the appeal has no
merit and is merely intended to delay the
finality of the appealed decision.16 The
Court, however, denied the motion and
instead required the respondents to file their
comments.17
Petitioners submit that respondent court
erred in (1) declaring as null and void DAR
Administrative Order No. 9, Series of 1990,
insofar as it provides for the opening of trust
accounts in lieu of deposit in cash or in
bonds, and (2) in holding that private
respondents are entitled as a matter of right
to the immediate and provisional release of
the amounts deposited in trust pending the
final resolution of the cases it has filed for
just compensation.
Anent the first assignment of error,
petitioners maintain that the word "deposit"
as used in Section 16(e) of RA 6657 referred
merely to the act of depositing and in no way
excluded the opening of a trust account as a
form of deposit. Thus, in opting for the
opening of a trust account as the acceptable
form of deposit through Administrative
Circular No. 9, petitioner DAR did not
commit any grave abuse of discretion since
it merely exercised its power to promulgate
rules and regulations in implementing the
declared policies of RA 6657.
The contention is untenable. Section 16(e)
of RA 6657 provides as follows:
Sec. 16. Procedure for Acquisition of
Private Lands —
xxx xxx xxx
(e) Upon receipt by the landowner of the
corresponding payment or, in case of
rejection or no response from the landowner,
upon the deposit with an accessible bank
designated by the DAR of the compensation
in cash or in LBP bonds in accordance with
this Act, the DAR shall take immediate
possession of the land and shall request the
proper Register of Deeds to issue a Transfer
Certificate of Title (TCT) in the name of the
Republic of the Philippines. . . . (emphasis
supplied)
It is very explicit therefrom that the deposit
must be made only in "cash" or in "LBP
bonds". Nowhere does it appear nor can it
be inferred that the deposit can be made in
any other form. If it were the intention to
include a "trust account" among the valid
modes of deposit, that should have been
made express, or at least, qualifying words
ought to have appeared from which it can be
fairly deduced that a "trust account" is
allowed. In sum, there is no ambiguity in
Section 16(e) of RA 6657 to warrant an
expanded construction of the term "deposit".
The conclusive effect of administrative
construction is not absolute. Action of an
administrative agency may be disturbed or
set aside by the judicial department if there
is an error of law, a grave abuse of power or
lack of jurisdiction or grave abuse of
discretion clearly conflicting with either the
letter or the spirit of a legislative enactment.
18 In this regard, it must be stressed that the
function of promulgating rules and
regulations may be legitimately exercised
only for the purpose of carrying the
provisions of the law into effect. The power
of administrative agencies is thus confined
to implementing the law or putting it into
effect. Corollary to this is that administrative
regulations cannot extend
the law and amend a legislative enactment,
19 for settled is the rule that administrative
regulations must be in harmony with the
provisions of the law. And in case there is a
discrepancy between the basic law and an
implementing rule or regulation, it is the
former that prevails.20
In the present suit, the DAR clearly
overstepped the limits of its power to enact
rules and regulations when it issued
Administrative Circular No. 9. There is no
basis in allowing the opening of a trust
account in behalf of the landowner as
compensation for his property because, as
heretofore discussed, Section 16(e) of RA
6657 is very specific that the deposit must
be made only in "cash" or in "LBP bonds". In
the same vein, petitioners cannot invoke
LRA Circular Nos. 29, 29-A and 54 because
these implementing regulations cannot
outweigh the clear provision of the law.
Respondent court therefore did not commit
any error in striking down Administrative
Circular No. 9 for being null and void.
Proceeding to the crucial issue of whether or
not private respondents are entitled to
withdraw the amounts deposited in trust in
their behalf pending the final resolution of
the cases involving the final valuation of their
properties, petitioners assert the negative.
The contention is premised on the alleged
distinction between the deposit of
compensation under Section 16(e) of RA
6657 and payment of final compensation as
provided under Section 1821 of the same
law. According to petitioners, the right of the
landowner to withdraw the amount deposited
in his behalf pertains only to the final
valuation as agreed upon by the landowner,
the DAR and the LBP or that adjudged by
the court. It has no reference to amount
deposited in the trust account pursuant to
Section 16(e) in case of rejection by the
landowner because the latter amount is only
provisional and intended merely to secure
possession of the property pending final
valuation. To further bolster the contention
petitioners cite the following
pronouncements in the case of "Association
of Small Landowners in the Phil. Inc. vs.
Secretary of Agrarian Reform".22
The last major challenge to CARP is that the
landowner is divested of his property even
before actual payment to him in full of just
compensation, in contravention of a well-
accepted principle of eminent domain.
xxx xxx xxx
The CARP Law, for its part conditions the
transfer of possession and ownership of the
land to the government on receipt by the
landowner of the corresponding payment or
the deposit by the DAR of the compensation
in cash or LBP bonds with an accessible
bank. Until then, title also remains with the
landowner. No outright change of ownership
is contemplated either.
xxx xxx xxx
Hence the argument that the assailed
measures violate due process by arbitrarily
transferring title before the land is fully paid
for must also be rejected.
Notably, however, the aforecited case was
used by respondent court in discarding
petitioners' assertion as it found that:
. . . despite the "revolutionary" character of
the expropriation envisioned under RA 6657
which led the Supreme Court, in the case of
Association of Small Landowners in the Phil.
Inc. vs. Secretary of Agrarian Reform (175
SCRA 343), to conclude that "payments of
the just compensation is not always required
to be made fully in money" — even as the
Supreme Court admits in the same case
"that the traditional medium for the payment
of just compensation is money and no other"
— the Supreme Court in said case did not
abandon the "recognized rule . . . that title to
the property expropriated shall pass from the
owner to the expropriator only upon full
payment of the just compensation." 23
(Emphasis supplied)
We agree with the observations of
respondent court. The ruling in the
"Association" case merely recognized the
extraordinary nature of the expropriation to
be undertaken under RA 6657 thereby
allowing a deviation from the traditional
mode of payment of compensation and
recognized payment other than in cash. It
did not, however, dispense with the settled
rule that there must be full payment of just
compensation before the title to the
expropriated property is transferred.

The attempt to make a distinction between
the deposit of compensation under Section
16(e) of RA 6657 and determination of just
compensation under Section 18 is
unacceptable. To withhold the right of the
landowners to appropriate the amounts
already deposited in their behalf as
compensation for their properties simply
because they rejected the DAR's valuation,
and notwithstanding that they have already
been deprived of the possession and use of
such properties, is an oppressive exercise of
eminent domain. The irresistible
expropriation of private respondents'
properties was painful enough for them. But
petitioner DAR rubbed it in all the more by
withholding that which rightfully belongs to
private respondents in exchange for the
taking, under an authority (the "Association"
case) that is, however, misplaced. This is
misery twice bestowed on private
respondents, which the Court must rectify.
Hence, we find it unnecessary to distinguish
between provisional compensation under
Section 16(e) and final compensation under
Section 18 for purposes of exercising the
landowners' right to appropriate the same.
The immediate effect in both situations is the
same, the landowner is deprived of the use
and possession of his property for which he
should be fairly and immediately
compensated. Fittingly, we reiterate the
cardinal rule that:
. . . within the context of the State's inherent
power of eminent domain, just compensation SO ORDERED.
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.