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Comprehensive Agrarian Reform Law 2017

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NATALIA REALTY V. DAR lands.” These lots were intended for residential use.
They ceased to be agricultural lands upon approval
FACTS: of their inclusion in the Lungsod Silangan
PP 1637 set aside several hectares of land in
Antipolo, San Mateo, and Montalban as townsite DOCTRINE:
areas to absorb the population overspill in the
metropolis which were designated as the Lungsod Lands not devoted to agricultural activity are outside
Silangan Townsite, where Natalia Realty’s properties the coverage of CARL.
were situated. Estate Developers and Investors
Corporation (EDIC), the developer of the Natalia “Agricultural land” refers to “land devoted to
properties, was granted approval to develop the said agricultural activity, and not classified as mineral,
properties into low-cost housing subdivisions. The forest, residential, commercial, or industrial land.”
Natalia properties then became the Antipolo Hills
When the CARL came into effect, the DAR issued a SECRETARY OF AGRARIAN REFORM
Notice of Coverage on the undeveloped portions of
the Antipolo Hills Subdivision. Natalia immediately FACTS:
registered its objection to the said Notice and
requested the DAR Secretary to cancel the same. Cases have been consolidated because they involve
However, members of the Samahan ng Magsasaka common legal questions. They will be subject to one
sa Bundok Antipolo (SAMBA) filed a complaint common discussion and resolution.
against Natalia and EDIC before the DAR Regional
Adjudicator to restrain them from developing areas G.R. No. 79777:
under their cultivation. The RA issued a writ of
Preliminary Injunction. Natalia and EDIC appealed to The petitioners are Nicolas Manaay and his wife who
the DARAB but the latter merely remanded the case own a 9-hectare riceland worked by four tenants and
to the RA. Natalia then requested the DAR Secretary Augustin Hermano, Jr. who owns a 5-hectare
to set aside the Notice of Coverage. Neither the DAR riceland worked by four tenants. They question the
Secretary nor the DAR Director concerned took constitutionality of P.D. No. 27, E.O. Nos. 228 & 229,
action on the protest letters. and R.A. No. 6657 since their tenants were declared
full owners of the mentioned lands.
G.R. No. 79310
1. W/N the Natalia properties were validly
converted from agricultural to residential Landowners and sugar planters in the Victorias Mill
land. District, Victorias, Negros Occidental and Planters’
Committee Inc., with 1400 planter-members,
2. W/N the Natalia properties are covered by submitted a petition seeking to prohibit the
the CARL. implementation of Proc. No. 131 and E.O. No. 229.
Aug. 27, 1987 – A motion for intervention was filed
by the National Federation of Sugarcane Planters,
HELD: which claim 20 000 members). It was granted by the
1. YES. Natalia and EDIC complied with all the
requirements of law, even securing prior approval Sept. 10, 1987 – A motion for intervention was filed
from DAR. As a matter of fact, there was no need for by Manuel Barcelona, et al., representing coconut
Natalia and EDIC to do so because the Natalia and riceland owners. It was granted by the court.
properties were within the areas set aside for the
Lungsod Silangan Reservation. Since PP 1637 G.R. No. 79744
created the townsite reservation for the purpose of
providing additional housing to the burgeoning Sept. 3 1986 – The petitioner protested the
population of Metro Manila, it in effect converted for erroneous inclusion of his small landholding under
residential use what were erstwhile agricultural lands Operation Land Transfer accusing the then Secretary
provided all requisites were met. of DAR of violation of due process and the
requirement for just compensation. Certificates of
2. NO. The undeveloped portions of the Antipolo Hills Land Transfer were issued to the private
Subdivision cannot be considered as “agricultural respondents who then refused to pay lease rentals.

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The petitioner is asking for the recall and cancellation HELD:

of these certificates.
1. YES. P.D. No. 27 by President Marcos
Dec. 24, 1986 – Petitioner claims his petition was during Martial Law has been sustained in
denied without hearing. Gonzales v. Estrella. President Aquino is
authorized under Section 6 of the Transitory
Feb. 17, 1987 – A motion for reconsideration was Provisions of the 1987 Constitution to
filed which had not been acted upon when E.O. Nos. promulgate Proc. No. 131 and E.O. Nos.
228 & 229 were issued which rendered his motion 228 & 229.
2. YES. The said measures were issued before
ISSUES: July 27, 1987, when the Congress was
formally convened and took over legislative
1. Whether or not the President had the power power.
to promulgate Proc. No. 131 and E.O. Nos.
228 & 229 3. NO. Proc. No. 131 is not an appropriation
measure for that is not its principal purpose
2. Whether or not the President had the and therefore is not required to conform to
legislative power for issuing the measures the requirements.

3. Whether or not Proc. No. 131 conforms to 4. NO. R.A. No. 6657 does provide for such
the requirements of a valid appropriation as limits now in Section 6 of the law.
specified in the Constitution
5. NO. It is settled that the title of the bill does
4. Whether or not Proc. No. 131 and E.O. No. not have to be a catalogue of its contents
229 should be invalidated because they do and will suffice if the matters embodied in
not provide for retention limits required by the text are relevant to each other and may
Article 13, Section 4 of the Constitution be inferred from the title.

5. Whether or not E.O. No. 229 violates 6. NO. The rule is that mandamus will lie to
constitutional requirement that a bill should compel the discharge of the discretionary
only have one subject, to be expressed in duty itself but not to control the discretion
its title to be exercised. In other words, mandamus
can issue to require action only but not
6. Whether or not the writ of mandamus can specific action.
issue to compel the performance of a
discretionary act, especially by a specific 7. It is an exercise of the power of eminent
department of the government. domain because there is payment of just
compensation unlike in the exercise of
7. Whether this statute is an exercise of police police power wherein confiscation of
power or the power of eminent domain property is not compensable.

8. Whether or not the statutes are valid 8. YES. A statute may be sustained under the
exercises of police power police power only if there is a concurrence
of the lawful subject and the lawful method.
9. Whether or not the equal protection clause As the subject and purpose of agrarian
was violated reform have been laid down by the
Constitution itself, we may say that the first
10. Whether or not the content and manner of requirement has been satisfied. What
the just compensation provided for in the remains to be examined is the validity of the
CARP Law is not violative of the Constitution method employed to achieve the
constitutional goal.
11. Whether or not there is contravention of a
well- accepted principle of eminent domain 9. NO. The petitioners have not shown that
by divesting the landowner of his property they belong to a different class and entitled
even before actual payment to him in full of to a different treatment. The argument that
just compensation not only landowners but also owners of
other properties must be made to share the
burden of implementing land reform must

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be rejected. There is a substantial 2. Title to all expropriated properties shall be

distinction between these two classes of transferred to the State only upon full payment of
owners that is clearly visible except to those compensation to their respective owners.
who will not see.
3. All rights previously acquired by the tenant-
10. NO. It is declared that although money is farmers under P.D. No. 27 are retained and
the traditional mode of payment, other recognized.
modes of payment shall be permitted as
compensation. The court accepts the theory 4. Landowners who were unable to exercise their
that payment of the just compensation is rights of retention under P.D. No. 27 shall enjoy the
not always required to be made fully in retention rights granted by R.A. No. 6657 under the
money, they find further that the proportion conditions therein prescribed.
of cash payment to the other things of value
constituting the total payment, as 5. Subject to the above-mentioned rulings all the
determined on the basis of the areas of the petitions are DISMISSED, without pronouncement as
lands expropriated, is not unduly to costs.
oppressive upon the landowner. The other
modes, which are likewise available to the
landowner at his option, are also not LUZ FARMS VS SEC. OF DAR
unreasonable because payment is made in
shares of stock, LBP bonds, other properties FACTS:
or assets, tax credits, and other things of
value equivalent to the amount of just In 1988, RA 6657 was approved by the President of
compensation. (Court: We do not mind the Philippines. It includes the raising of livestock,
admitting that a certain degree of poultry, and swine in its coverage.
pragmatism has influenced our decision on
this issue. The Court is as acutely anxious In 1989, the Secretary of Agrarian Reform
as the rest of our people to see the goal of promulgated the IRR of Secs. 11, 13, and 39 of the
agrarian reform achieved at last after the said law.
frustrations and deprivations of our peasant
masses during all these disappointing Luz Farms is a corporation engaged in the livestock
decades. We are aware that invalidation of and poultry business allegedly stands to be adversely
the said section will result in the nullification affected by the enforcement of some provisions of
of the entire program, killing the farmer's CARP.
hopes even as they approach realization
and resurrecting the spectre of discontent Luz Farms questions the following provisions of R.A.
and dissent in the restless countryside. That 6657, insofar as they are made to apply to it:
is not in our view the intention of the
Constitution, and that is not what we shall Section 3(b) which includes the "raising of livestock
decree today.) (and poultry)" in the definition of "Agricultural,
Agricultural Enterprise or Agricultural Activity.
11. NO. The CARP Law conditions the transfer
of possession and ownership of the land to Section 11 which defines "commercial farms" as
the government on receipt by the "private agricultural lands devoted to commercial,
landowner of the corresponding payment or livestock, poultry and swine raising . . ."
the deposit by the DAR of the compensation
in cash or LBP bonds with an accessible Section 13 which calls upon petitioner to execute a
bank. Until then, title also remains with the production-sharing plan.
Section 16(d) and 17 which vest on the Department
DISPOSITIVE of Agrarian Reform the authority to summarily
determine the just compensation to be paid for lands
WHEREFORE, the Court holds as follows: covered by the Comprehensive Agrarian Reform Law
Section 32 which spells out the production-sharing
1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and plan mentioned in Section 13
E.O. Nos. 228 and 229 are SUSTAINED against all
the constitutional objections raised in the herein ". . . (W)hereby three percent (3%) of the gross sales
petitions. from the production of such lands are distributed
within sixty (60) days of the end of the fiscal year as

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compensation to regular and other farmworkers in Livestock and poultry production are industrial
such lands over and above the compensation they activities;
currently receive xxx
Livestock and poultry farmworkers are covered by
ISSUE: minimum wage law rather than by tenancy law.

1. WON the CARL should include the raising of JURISPRUDENCE:

livestock, poultry and swine in its coverage.
Raising of livestock, poultry, and swine are excluded
2. WON the requirement in Sections 13 and 32 from the coverage of the CARL.
of RA 6657 directing “corporate farms” to
execute and implement “production- HACIENDA LUISITA INC vs LUISITA
sharing plans” is unreasonable for being INDUSTRIAL PARK CORP
confiscatory and violative of due process,
with respect to livestock and poultry raisers. FACTS:

Separate Opinion: Sarmiento, J. On 1989, some 93% of the then farmworker-

beneficiaries (FWBs) complement of Hacienda Luisita
3. WON the assailed provisions violate the signified in a referendum their acceptance of the
equal protection clause of the Constitution. proposed HLI’s Stock Distribution Option Plan
(SODP). The SDOA was formally entered into by
HELD: Tadeco, HLI, and the 5,848 qualified FWBs. This
attested to by then DAR Secretary Philip Juico. The
1. NO. Sec. 3 (b) and Sec. 11 of RA 6657 are SDOA embodied the basis and mechanics of HLI’s
unconstitutional in so far as they include lands SDP, which was eventually approved by the PARC
devoted to raising livestock, swine and poultry within after a follow-up referendum conducted by the DAR,
its coverage. The use of land is incidental to but not in which 5,117 FWBs, out of 5,315 who participated,
the principal factor or consideration of productivity in opted to receive shares in HLI.
this industry. It was never the intention of the
framers of the Constitution to include the livestock On 1995, HLI applied for the conversion of 500
and poultry industry in the coverage of the agrarian hectares of land of the hacienda from agricultural to
reform program of the government. The intention of industrial use, pursuant to Sec. 65 of RA 6657. The
the Committee was to limit the application of the DAR approved the application subject to payment of
word “agriculture”. Thus, Section II of RA 6657 three percent (3%) of the gross selling price to the
which includes “private agricultural lands devoted to FWBs and to HLI’s continued compliance with its
commercial livestock, poultry, and swine raising” in undertakings under the SDP, among other
the definition of “commercial farms” is invalid, to the conditions.
extent that the aforecited agro-industrial activities
are made to be covered by the agrarian reform On 1996, HLI, in exchange for subscription of
program of the State. 12,000,000 shares of stocks of Centennary, ceded
300 hectares of the converted area to the latter.
2. YES. As there is no reason to include livestock and Subsequently, Centennary sold the entire 300
poultry lands in the coverage of agrarian reform, hectares for PhP750 million to Luisita Industrial Park
there is no need to call upon them to distribute from Corporation (LIPCO), which used it in developing an
3% of their gross sales and 10% of their net profits industrial complex. Later, LIPCO transferred these 2
to their workers as additional compensation. parcels to RCBC in payment of LIPCO’s
PhP431,695,732.10 loan obligations. LIPCO’s titles
3. (Separate Opinion) NO. Substantial distinctions were cancelled and new ones were issued to RCBC.
exist between land directed purely to cultivation and Apart from the 500 hectares, another 80.51 hectares
harvesting of fruits or crops and land exclusively were later detached from Hacienda Luisita and
used for livestock, poultry and swine raising that acquired by the government as part of the Subic-
make real differences: Clark-Tarlac Expressway (SCTEX) complex. Thus,
4,335.75 hectares remained of the original 4,915
There are no tenants nor landlords in livestock and hectares Tadeco ceded to HLI.
poultry businesses;

Livestock and poultry do not sprout from land;

Land is not a primary resource;

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ISSUE: On June 10, 1988, a new agrarian law, Republic Act

(R.A.) No. 6657, also known as the Comprehensive
Whether or not Sec. 31 of RA 6657, which allows Agrarian Reform Law (CARL) of 1988, took effect. It
stock transfer in lieu of outright land transfer, included in its coverage farms used for raising
unconstitutional? livestock, poultry and swine.

HELD: On December 4, 1990, in an en banc decision in the

case of Luz Farms v. Secretary of DAR, the Court
There is, thus, nothing unconstitutional in the ruled that lands devoted to livestock and poultry-
formula prescribed by RA 6657. The policy on raising are not included in the definition of
agrarian reform is that control over the agricultural agricultural land and declared as unconstitutional
land must always be in the hands of the farmers. certain provisions of the CARL insofar as they
Then it falls on the shoulders of DAR and PARC to included livestock farms in the coverage of agrarian
see to it the farmers should always own majority of reform. In view of this, respondents filed with
the common shares entitled to elect the members of petitioner DAR a formal request to withdraw their
the board of directors to ensure that the farmers will VOS as their landholding was devoted exclusively to
have a clear majority in the board. Before the SDP is cattle-raising and thus exempted from the coverage
approved, strict scrutiny of the proposed SDP must of the CARL.
always be undertaken by the DAR and PARC, such
that the value of the agricultural land contributed to On December 21, 1992, the Municipal Agrarian
the corporation must always be more than 50% of Reform Officer of Aroroy, Masbate, inspected
the total assets of the corporation to ensure that the respondents' land and found that it was devoted
majority of the members of the board of directors solely to cattle-raising and breeding. He
are composed of the farmers. The PARC composed recommended to the DAR Secretary that it be
of the President of the Philippines and cabinet exempted from the coverage of the CARL.
secretaries must see to it that control over the board On April 27, 1993, respondents reiterated to
of directors rests with the farmers by rejecting the petitioner DAR the withdrawal of their VOS and
inclusion of non-agricultural assets which will yield requested the return of the supporting papers they
the majority in the board of directors to non-farmers. submitted in connection therewith. Petitioner
Any deviation, however, by PARC or DAR from the ignored such request.
correct application of the formula prescribed by the
second paragraph of Sec. 31 of RA 6675 does not On December 27, 1993, DAR issued A.O. No. 9,
make said provision constitutionally infirm. Rather, it series of 1993, which provided that only portions of
is the application of said provision that can be private agricultural lands used for the raising of
challenged. Ergo, Sec. 31 of RA 6657 does not trench livestock, poultry and swine as of June 15, 1988 shall
on the constitutional policy of ensuring control by the be excluded from the coverage of the CARL. In
farmers. determining the area of land to be excluded, the A.O.
fixed the following retention limits, viz.: 1:1 animal-
DAR vs. SUTTON land ratio and a ratio of 1.7815 hectares for livestock
infrastructure for every 21 heads of cattle shall
FACTS: likewise be excluded from the operations of the
This is a petition for review filed by the Department
of Agrarian Reform (DAR) of the Decision and On February 4, 1994, respondents wrote the DAR
Resolution of the Court of Appeals, dated September Secretary and advised him to consider as final and
19, 2003 and February 4, 2004, respectively, which irrevocable the withdrawal of their VOS as, under the
declared DAR Administrative Order (A.O.) No. 9, Luz Farms doctrine, their entire landholding is
series of 1993, null and void for being violative of the exempted from the CARL.
On September 14, 1995, then DAR Secretary Ernesto
The case involves a land in Aroroy, Masbate, D. Garilao issued an Order partially granting the
inherited by respondents which has been devoted application of respondents for exemption from the
exclusively to cow and calf breeding. On October 26, coverage of CARL. Applying the retention limits
1987, pursuant to the then existing agrarian reform outlined in the DAR A.O. No. 9, petitioner exempted
program of the government, respondents made a 1,209 hectares of respondents' land for grazing
voluntary offer to sell (VOS) their landholdings to purposes, and a maximum of 102.5635 hectares for
petitioner DAR to avail of certain incentives under the infrastructure. Petitioner ordered the rest of
law. respondents' landholding to be segregated and
placed under Compulsory Acquisition.

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Respondents moved for reconsideration, contending On the other hand, by making a new law, Congress
that their entire landholding should be exempted as seeks to supersede an earlier one. In the case at bar,
it is devoted exclusively to cattle-raising. Said motion after the passage of the 1988 CARL, Congress
was denied. Respondents filed a notice of appeal enacted R.A. No. 7881 which amended certain
with the Office of the President assailing: (1) the provisions of the CARL. Specifically, the new law
reasonableness and validity of DAR A.O. No. 9, s. changed the definition of the terms "agricultural
1993, which provided for a ratio between land and activity" and "commercial farming" by dropping from
livestock in determining the land area qualified for its coverage lands that are devoted to commercial
exclusion from the CARL, and (2) the livestock, poultry and swine-raising. With this
constitutionality of DAR A.O. No. 9, s. 1993, in view significant modification, Congress clearly sought to
of the Luz Farms case which declared cattle-raising align the provisions of our agrarian laws with the
lands excluded from the coverage of agrarian reform. intent of the 1987 Constitutional Commission to
The OP affirmed the impugned order. On appeal to exclude livestock farms from the coverage of
CA, the CA ruled in favor of respondents and agrarian reform.
declared A.O. No. 9, Series of 1993 as void.
It is doctrinal that rules of administrative bodies must
ISSUE: be in harmony with the provisions of the
Constitution. They cannot amend or extend the
Whether or not DAR Administrative Order No. 09, Constitution. To be valid, they must conform to and
Series of 1993 which prescribes a maximum be consistent with the Constitution. In case of
retention for owners of lands devoted to livestock conflict between an administrative order and the
raising is constitutional? provisions of the Constitution, the latter prevails. The
assailed A.O. of petitioner DAR was properly stricken
HELD: down as unconstitutional as it enlarges the coverage
of agrarian reform beyond the scope intended by the
The impugned A.O. is invalid as it contravenes the 1987 Constitution.
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 appurtenance.

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.

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.

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