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CABALLES V DAR

Before us is a petition for certiorari seeking the annulment of an Order issued by the public respondent
Ministry of Agrarian Reform , now the Department of Agrarian Reform (DAR), through its then Minister,
the Hon. Heherson Alvarez, finding the existence of a tenancy relationship between the herein
petitioner and the private respondent and certifying the criminal case for malicious mischief filed by
the petitioner against the private respondent as not proper for trial.

The facts as gathered by the MAR are as follows:

The landholding subject of the controversy, which consists of only sixty (60) square meters (20 meters x
3 meters) was acquired by the spouses Arturo and Yolanda Caballes, the latter being the petitioner
herein, by virtue of a Deed of Absolute Sale dated July 24, 1978 executed by Andrea Alicaba Millenes
This landholding is part of Lot No. 3109-C, which has a total area of about 500 square meters, situated
at Lawaan Talisay, Cebu. The remainder of Lot No. 3109-C was subseconsequently sold to the said
spouses by Macario Alicaba and the other members of the Millenes family, thus consolidating
ownership over the entire (500-square meter) property in favor of the petitioner.

In 1975, before the sale in favor of the Caballes spouses, private respondent Bienvenido Abajon
constructed his house on a portion of the said landholding, paying a monthly rental of P2.00 to the
owner, Andrea Millenes. The landowner likewise allowed Abajon to plant on a portion of the land,
agreeing that the produce thereof would be shared by both on a fitfy-fifty basis. From 1975-1977,
Abajon planted corn and bananas on the landholding. In 1978, he stopped planting corn but
continued to plant bananas and camote. During those four years, he paid the P2.00 rental for the lot
occupied by his house, and delivered 50% of the produce to Andrea Millenes.

Sometime in March 1979, after the property was sold, the new owners, Arturo and Yolanda Caballes,
told Abajon that the poultry they intended to build would be close to his house and pursuaded him to
transfer his dwelling to the opposite or southern portion of the landholding. Abajon offered to pay the
new owners rental on the land occupied by his house, but his offer was not accepted. Later, the new
owners asked Abajon to vacate the premises, saying that they needed the property. But Abajon
refused to leave. The parties had a confrontation before the Barangay Captain of Lawaan in Talisay,
Cebu but failed to reach an agreement. All the efforts exerted by the landowners to oust Abajon from
the landholding were in vain as the latter simply refused to budge.

On April 1, 1982, the landowner, Yolanda Caballes, executed an Affidavit stating that immediately
after she reprimanded Abajon for harvesting bananas and jackfruit from the property without her
knowledge, the latter, with malicious and ill intent, cut down the banana plants on the property worth
about P50.00. A criminal case for malicious mischief was filed against Abajon and which was docketed
as Criminal Case No. 4003. Obviously, all the planting on the property, including that of the banana
plants, had been done by Abajon. On September 30, 1982, upon motion of the defense in open court
pursuant to PD 1038, the trial court ordered the referral of the case to the Regional Office No. VII of the
then MAR for a preliminary determination of the relationship between the parties. As a result, the
Regional Director of MAR Regional VII, issued a certification 1 dated January 24, 1 983, stating that said
Criminal Case No. 4003 was not proper for hearing on the bases of the following findings:

That herein accused is a bona-fide tenant of the land owned by the complaining witness,
which is devoted to bananas;

That thin case is filed patently to harass and/or eject the tenant from his farmholding,
which act is prohibited by law; and

That this arose out of or is connected with agrarian relations.

From the said certification, the petitioner appealed to the then MAR, now the respondent DAR. Acting
on said appeal, the respondent DAR, through its then Minister Conrado Estrella, reversed the previous
certification in its Order 2 of February 3, 1986, declaring Criminal Case No. 4003 as proper for trial as "the
land involved is a residential lot consisting of only 60 square meters whereon the house of the accused
is constructed and within the industrial zone of the town as evinced from the Certification issued by the
Zoning Administrator of Talisay, Cebu."

Upon motion for reconsideration filed by Abajon, the respondent DAR, through its new Minister, herein
respondent Heherson Alvarez, issued an Orders dated November 15, 1986, setting aside the previous
Order 3 dated February 3, 1986, and certifying said criminal case as not proper for trial, finding the
existence of a tenancy relationship between the parties, and that the case was designed to harass
the accused into vacating his tillage.

In the summary investigation conducted by the DAR, the former landowner, Andrea Millenes, testified
that Bienvenido Abajon dutifully gave her 50% share of the produce of the land under his cultivation.
The grandson of Andrea Millenes, Roger Millenes, corroborated the testimony of the former, stating
that he received said share from Abajon. Roger Millenes further testified that the present owners
received in his presence a bunch of bananas from the accused representing ½ or 50% of the two
bunches of bananas gathered after Caballes had acquired the property. 4

From these factual findings, the DAR concluded that Abajon was a tenant of Andrea Millenes, the
former owner, who had testified that she shared the produce of the land with Abajon as truer
thereof. 5 Thus, invoking Sec. 10 of RA 3844, as amended, which provides that "[T]he agricultural
leasehold relation under this Code shall not be extinguished by mere expiration of the term or period
in a leasehold contract nor by the sale, alienation or transfer of the legal possession of the landholding";
and that "(I)n case the agricultural lessor sells, alienates or transfers the legal possession of the
landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to
the obligations of the agricultural lessor," the MAR ruled that 'the new owners are legally bound to
respect the tenancy, notwithstanding their claim that the portion tilled by Abajon was small, consisting
merely of three (3) meters wide and twenty (20) meters long, or a total of sixty (60) square meters."6

Hence, this petition for certiorari alleging that:

I. Respondents DAR and Hon. Heherson T. Alvarez committed "grave abuse of power and discretion
amounting to lack of jurisdiction" in holding that private respondent Abajon is an agricultural tenant
even if he is cultivating only a 60-square meter (3 x 20 meters) portion of a commercial lot of the
petitioner.

II. Public respondents gravely erred in holding that Criminal Case No. 4003 is not proper for trial and
hearing by the court. 7

We hold that the private respondent cannot avail of the benefits afforded by RA 3844, as amended.
To invest him with the status of a tenant is preposterous.

Section 2 of said law provides:

It is the policy of the State:

(1) To establish cooperative-cultivatorship among those who live and work on the land
as tillers, owner-cultivatorship and the economic family-size farm as the basis of Philippine
agriculture and, as a consequence, divert landlord capital in agriculture to industrial
development;

xxx xxx xxx

RA 3844, as amended, defines an economic family-size farm as "an area of farm land that permits
efficient use of labor and capital resources of the farm family and will produce an income sufficient to
provide a modest standard of living to meet a farm family's needs for food, clothing, shelter, and
education with possible allowance for payment of yearly installments on the land, and reasonable
reserves to absorb yearly fluctuations in income." 8

The private respondent only occupied a miniscule portion (60 square meters) of the 500-square meter
lot. Sixty square meters of land planted to bananas, camote, and corn cannot by any stretch of the
imagination be considered as an economic family-size farm. Surely, planting camote, bananas, and
corn on a sixty-square meter piece of land can not produce an income sufficient to provide a modest
standard of living to meet the farm family's basic needs. The private respondent himself admitted that
he did not depend on the products of the land because it was too small, and that he took on carpentry
jobs on the side. 9 Thus, the order sought to be reviewed is patently contrary to the declared policy of
the law stated above.

The DAR found that the private respondent shared the produce of the land with the former owner,
Andrea Millenes. This led or misled, the public respondents to conclude that a tenancy relationship
existed between the petitioner and the private respondent because, the public respondents continue,
by operation of Sec. 10 of R.A. 3844, as amended, the petitioner new owner is subrogated to the rights
and substituted to the obligations of the supposed agricultural lessor (the former owner).

We disagree.

The essential requisites of a tenancy relationship are:

1. The parties are the landowner and the tenant;


2. The subject is agricultural land;
3. There is consent;
4. The purpose is agricultural production;
5. There is personal cultivation; and
6. There is sharing of harvests.

All these requisites must concur in order to create a tenancy relationship between the parties. The
absence of one does not make an occupant of a parcel of land, or a cultivator thereof, or a planter
thereon, a de jure tenant. This is so because unless a person has established his status as a de
jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform Program of the
Government under existing tenancy laws.10

Therefore, the fact of sharing alone is not sufficient to establish a tenancy relationship. Certainly, it is
not unusual for a landowner to accept some of the produce of his land from someone who plants
certain crops thereon. This is a typical and laudable provinciano trait of sharing or patikim, a native
way of expressing gratitude for favor received. This, however, does not automatically make the tiller-
sharer a tenant thereof specially when the area tilled is only 60, or even 500, square meters and located
in an urban area and in. the heart of an industrial or commercial zone at that. Tenancy status arises
only if an occupant of a parcel of land has been given its possession for the primary purpose of
agricultural production. The circumstances of this case indicate that the private respondent's status is
more of a caretaker who was allowed by the owner out of benevolence or compassion to live in the
premises and to have a garden of some sort at its southwestern side rather than a tenant of the said
portion.

Agricultural production as the primary purpose being absent in the arrangement, it is clear that the
private respondent was never a tenant of the former owner, Andrea Millenes. Consequently, Sec. 10
of RA of 3844, as amended, does not apply. Simply stated, the private respondent is not a tenant of
the herein petitioner.

Anent the second assignment of error, the petitioner argues that since Abajon, is not an agricultural
tenant, the criminal case for malicious mischief filed against him should be declared as proper for trial
so that proceedings in the lower court can resume.

Notwithstanding our ruling that the private respondent is not a tenant of the petitioner, we hold that
the remand of the case to the lower court for the resumption of the criminal proceedings is not in the
interest of justice. Remand to the Municipal Court of Talisay, Cebu, would not serve the ends of justice
at all, nor is it necessary, because this High Tribunal is in a position to resolve with finality the dispute
before it. This Court, in the public interest, and towards the expeditious administration of justice, has
decided to act on the merits and dispose of the case with finality. 11

The criminal case for malicious mischief filed by the petitioner against the private respondent for
allegedly cutting down banana trees worth a measly P50.00 will take up much of the time and
attention of the municipal court to the prejudice of other more pressing cases pending therein.
Furthermore, the private respondent will have to incur unnecessary expenses to finance his legal battle
against the petitioner if proceedings in the court below were to resume. Court litigants have decried
the long and unnecessary delay in the resolution of their cases and the consequent costs of such
litigations. The poor, particularly, are victims of this unjust judicial dawdle, Impoverished that they are
they must deal with unjust legal procrastination which they can only interpret as harassment or
intimidation brought about by their poverty, deprivation, and despair. It must be the mission of the
Court to remove the misperceptions aggrieved people have of the nature of the dispensation of
justice. If justice can be meted out now, why wait for it to drop gently from heaven? Thus, considering
that this case involves a mere bagatelle the Court finds it proper and compelling to decide it here and
now, instead of further deferring its final termination.
As found by the DAR, the case for malicious mischief stemmed from the petitioner's affidavit stating
that after she reprimanded private respondent Abajon for harvesting bananas and jackfruit from the
property without her knowledge, the latter, with ill intent, cut the banana trees on the property worth
about P50.00.

This was corroborated by a certain Anita Duaban, a friend of the petitioner, who likewise executed an
affidavit to the effect that she saw the private respondent indiscriminately cutting the banana trees.12

The Revised Penal Code, as amended, provides that "any person who shall deliberately cause to the
property of another any damage not falling within the terms of the next preceding chapter shall be
guilty of malicious mischief."13

The elements of the crime of malicious mischief are:

1. The offender deliberately caused damage to the property of another;


2. The damage caused did not constitute arson or crimes involving destruction;
3. The damage was caused maliciously by the offender.

After a review of the facts and circumstances of this case, we rule that the aforesaid criminal case
against the private respondent be dismissed.

The private respondent can not be held criminally liable for malicious mischief in cutting the banana
trees because, as an authorized occupant or possessor of the land, and as planter of the banana
trees, he owns said crops including the fruits thereof The private respondent's possession of the land is
not illegal or in bad faith because he was snowed by the previous owners to enter and occupy the
premises. In other words, the private respondent worked the land in dispute with the consent of the
previous and present owners. Consequently, whatever the private respondent planted and cultivated
on that piece of property belonged to him and not to the landowner. Thus, an essential element of the
crime of malicious mischief, which is "damage deliberately caused to the property of another," is
absent because the private respondent merely cut down his own plantings.

WHEREFORE, the Order of public respondents dated November 15, 1986 is SET ASIDE and Criminal Case
No. 4003, is hereby DISMISSED. Let a copy of this decision be sent to the Municipal Trial Court of Talisay,
Cebu for appropriate action. This Decision is IMMEDIATELY EXECUTORY.

GELOS V CA

The Court is asked to determine the real status of the petitioner, who claims to be a tenant of the
private respondent and entitled to the benefits of tenancy laws. The private respondent objects,
contending that the petitioner is only a hired laborer whose right to occupy the subject land ended
with the termination of their contract of employment.

The subject land is a 25,000 square meter farmland situated in Cabuyao, Laguna, and belonging
originally to private respondent Ernesto Alzona and his parents in equal shares. On July 5, 1970, they
entered into a written contract with petitioner Rafael Gelos employing him as their laborer on the land
at the stipulated daily wage of P5.00. 1 On September 4, 1973, after Alzona had bought his parents'
share and acquired full ownership of the land, he wrote Gelos to inform him of the termination of his
services and to demand that he vacate the property. Gelos refused and continued working on the
land.

On October 1, 1973, Gelos went to the Court of Agrarian Relations and asked for the fixing of the
agricultural lease rental on the property. He later withdrew the case and went to the Ministry of
Agrarian Reform, which granted his petition. For his part, Alzona filed a complaint for illegal detainer
against Gelos in the Municipal Court of Cabuyao, but this action was declared "not proper for trial" by
the Ministry of Agrarian Reform because of the existence of a tenancy relationship between the
parties. Alzona was rebuffed for the same reason when he sought the assistance of the Ministry of Labor
and later when he filed a complaint with the Court of Agrarian Relations for a declaration of non-
tenancy and damages against Gelos. On appeal to the Office of the President, however, the
complaint was declared proper for trial and so de-archived and reinstated.

After hearing, the Regional Trial Court of San Pablo City (which had taken over the Court of Agrarian
Relations under PB 129) rendered a decision dated April 21, 1987, dismissing the complaint. 2 It found
Gelos to be a tenant of the subject property and entitled to remain thereon as such. The plaintiff was
also held liable in attorney's fees and costs.

The decision was subsequently reversed by the Court of Appeals. In its judgment promulgated on
November 25, 1988, 3 it held that Gelos was not a tenant of the land in question and ordered him to
surrender it to Alzona. He was also held liable for the payment of P10,000.00 as attorney's fees and the
costs of the suit.

The basic question the petitioner now raises before the Court is essentially factual and therefore not
proper in a petition for review under Rule 45 of the Rules of Court. Only questions of law may be raised
in this kind of proceeding. The settled rule is that the factual findings of the Court of Appeals are
conclusive on even this Court as long as they are supported by substantial evidence. The petitioner
has not shown that his case comes under any of those rare exceptions on such findings may be validly
reversed by this Court.

It is true that in Talavera v. Court of Appeals, 4 we held that a factual conclusion made by the trial court
that a person is a tenant farmer, if it is supported by the minimum evidence demanded by law, is final
and conclusive and cannot be reversed by the appellate tribunals except for compelling reasons. In
the case at bar, however, we find with the respondent court that there was such a compelling reason.
A careful examination of the record reveals that, indeed, the trial court misappreciated the facts when
it ruled that the petitioner was a tenant of the private respondent.

The circumstance that the findings of the respondent court do not concur with those of the trial court
does not, of course, call for automatic reversal of the appellate court. Precisely, the function of the
appellate court is to review and, if warranted, reverse the findings of the trial court. Disagreement
between the two courts merely calls on us to make a specially careful study of their respective
decisions to determine which of them should be preferred as more conformable to the facts at hand.

The Court has made this careful study and will sustain the decision of the respondent court.

The contract of employment dated July 5, 1970, written in Tagalog and entitled "Kasunduan ng
Upahang Araw," reads pertinently as follows:

1. Ang Unang Panig ay siyang may-ari at nagtatangkilik ng isang lagay na lupa, sinasaka,
na tumatayo sa Nayon ng Baclaran, Cabuyao, Laguna, na siyang gagawa at sasaka sa
lupa, samantalang ang Ikalawang Panig ay magiging upahan at katulong sa paggawa
ng lupa.

2. Ang Unang Panig ay gustong ipagpatuloy ang pagbubungkal at paggawa ng bukid


na binabanggit sa itaas at ang Ikalawang Panig ay may ibig na magpaupa sa paggawa
sa halagang P5.00 sa bawat araw, walong oras na trabaho gaya ng mga sumusunod:
Patubigan ng linang; pagpapahalabas ng mga pilapil; pagpapaaldabis sa unang araw
ng pag-aararo; pagpapalinis ng damo sa ibabaw ng pilapil; pagpapakamot (unang
pagpapasuyod), pagpapahalang at pagpapabalasaw (ikalawa't ikatlong
pagpapasuyod); isang tao sa pagsasabog ng abono una sa pagpapantay ng linang;
bago magtanim; isang tao sa pagaalaga ng dapog; upa sa isang tao ng magbobomba
ng gamot laban sa pagkapit ng mga kulisap (mayroon at wala); sa nag-we-weeder;
upa sa mga tao na maggagamas at magpapatubig ng palay; magsasapaw ng mga
pilapil at iba pa.

3. Ang Unang Panig at ang Ikalawang Panig ay nagkasundo na ang huli ay gagawa sa
bukid ayon sa nabanggit sa itaas bilang katulong at upahan lamang. Ang Unang Panig
bukod sa sila ang gagawa at magsasaka ay maaaring umupa ng iba pang tao
manggagawa sa upahang umiiral sang-ayon sa batas katulad ng pag-aararo,
pagpapahulip, pagpapagamas, pagbobomba, pagweweeder, pagsasabog ng
abono, pagbobomba ng gamot, pagpapatubig at iba pang mga gawain. Maaaring
alisin ang Ikalawang Panig sa pagpapatrabaho sa ano mang oras ng Unang Panig.

4. Ipinatatanto ng Ikalawang Panig na siya ay hindi kasama sa bukid kundi upahan


lamang na binabayaran sa bawa't araw ng kanyang paggawa sa bukid na nabanggit.

It is noted that the agreement provides that "ang Ikalawang Panig (meaning Gelos) ay may ibig na
magpaupa sa paggawa sa halagang P5.00 sa bawa't araw, walong oras na trabaho" (The Second
Party desires to lease his services at the rate of P5.00 per day, eight hours of work) and that "Ipinatatanto
ng Ikalawang Panig na siya ay hindi kasama sa bukid kundi upahan lamang na binabayaran sa
bawa't araw ng kanyang paggawa sa bukid na nabanggit.'' (The Second Party makes it known that
he is not a farm tenant but only a hired laborer who is paid for every day of work on the said farm.)

These stipulations clearly indicate that the parties did not enter into a tenancy agreement but only a
contract of employment. The agreement is a lease of services, not of the land in dispute. This intention
is quite consistent with the undisputed fact that three days before that agreement was concluded,
the former tenant of the land, Leocadio Punongbayan, had executed an instrument in which he
voluntarily surrendered his tenancy rights to the private respondent. 5 It also clearly demonstrates that,
contrary to the petitioner's contention, Alzona intended to cultivate the land himself instead of placing
it again under tenancy.

The petitioner would now disavow the agreement, but his protestations are less than convincing. His
wife's testimony that he is illiterate is belied by his own testimony to the contrary in another
proceeding. 6 Her claim that they were tricked into signing the agreement does not stand up against
the testimony of Atty. Santos Pampolina, who declared under his oath as a witness (and as an attorney
and officer of the court) that he explained the meaning of the document to Gelos, who even read it
himself before signing it. 7 Atty. Pampolina said the agreement was not notarized because his
commission as notary public was good only for Manila and did not cover Laguna, where the document
was executed. 8 At any rate, the lack of notarization did not adversely affect the veracity and
effectiveness of the agreement, which, significantly, Gelos and his wife do not deny having signed.

Gelos points to the specific tasks mentioned in the agreement and suggests that they are the work of
a tenant and not of a mere hired laborer. Not so. The work specified is not peculiar to tenancy. What
a tenant may do may also be done by a hired laborer working under the direction of the landowner,
as in the case at bar. It is not the nature of the work involved but the intention of the parties that
determines the relationship between them.

As this Court has stressed in a number of cases, 9 "tenancy is not a purely factual relationship
dependent on what the alleged tenant does upon the land. It is also a legal relationship. The intent of
the parties, the understanding when the farmer is installed, and as in this case, their written
agreements, provided these are complied with and are not contrary to law, are even more important."

Gelos presented receipts 10 for fertilizer and pesticides he allegedly bought and applied to the land of
the private respondent, but the latter insists that it was his brother who bought them, being an
agriculturist and in charge of the technical aspect of the farm. Moreover, the receipts do not indicate
to which particular landholding the fertilizers would be applied and, as pointed out by the private
respondent, could refer to the other parcels of land which Gelos was tenanting.

The petitioner's payment of irrigation fees from 1980 to 1985 to the National Irrigation Administration on
the said landholding is explained by the fact that during the pendency of the CAR case, the Agrarian
Reform Office fixed a provisional leasehold rental after a preliminary finding that Gelos was the tenant
of the private respondent. As such, it was he who had to pay the irrigation fees. Incidentally, Section
12, subpar. (r) of PD 946 provides that the Secretary's determination of the tenancy relationship is only
preliminary and cannot be conclusive on the lower court.

It is noteworthy that, except for the self-serving testimony of the petitioner's wife, the records of this
case are bereft of evidence regarding the sharing of harvest between Gelos and Alzona. No less
importantly, as the Court of Appeals observed, the petitioner has not shown that he paid rentals on
the subject property from 1970 to 1973, before their dispute arose.

A tenant is defined under Section 5(a) of Republic Act No. 1199 as a person who himself and with the
aid available from within his immediate farm household cultivates the land belonging to or possessed
by another, with the latter's consent, for purposes of production, sharing the produce with the
landholder under the share tenancy system, or paying to the landholder a price-certain or
ascertainable in produce or in money or both, under the leasehold tenancy system. (Emphasis
supplied)

For this relationship to exist, it is necessary that: 1) the parties are the landowner and the tenant; 2) the
subject is agricultural land; 3) there is consent; 4) the purpose is agricultural production; 5) there is
personal cultivation; and 6) there is sharing of harvest or payment of rental. In the absence of any of
these requisites, an occupant of a parcel of land, or a cultivator thereof, or planter thereon, cannot
qualify as a de jure tenant. 11

On the other hand, the indications of an employer-employee relationship are: 1) the selection and
engagement of the employee; 2) the payment of wages; 3) the power of dismissal; and 4) the power
to control the employee's
conduct –– although the latter is the most important element. 12

According to a well-known authority on the subject, 13 tenancy relationship is distinguished from farm
employer-farm worker relationship in that: "In farm employer-farm worker relationship, the lease is one
of labor with the agricultural laborer as the lessor of his services and the farm employer as the lessee
thereof. In tenancy relationship, it is the landowner who is the lessor, and the tenant the lessee of
agricultural land. The agricultural worker works for the farm employer and for his labor be receives a
salary or wage regardless of whether the employer makes a profit. On the other hand, the tenant
derives his income from the agricultural produce or harvest."

The private respondent, instead of receiving payment of rentals or sharing in the produce of the land,
paid the petitioner lump sums for specific kinds of work on the subject lot or gave him vales, or advance
payment of his wages as laborer thereon. The petitioner's wife claims that Alzona made her husband
sign the invoices all at one time because he allegedly needed them to reduce his income taxes. Even
assuming this to be true, we do not think that made the said payments fictitious, especially so since the
petitioner never denied having received them.

The other issue raised by the petitioner, which is decidedly legal, is easily resolved. There being no
tenancy relationship, the contention that the private respondent's complaint has prescribed under
Section 38 of R.A. 3844 must also fail. That section is not applicable. It must be noted that at the very
outset, Alzona rejected the petitioner's claim of agricultural tenancy and immediately instituted his
action for unlawful detainer in accordance with Section 1, Rule 70 of the Rules of Court. As it happened,
the said case was held not proper for trial by the Ministry of Agrarian Reform. He then resorted to other
remedies just so he could recover possession of his land and, finally, in 1979, he yielded to the jurisdiction
of the defunct Court of Agrarian Relations by filing there an action for declaration of non-tenancy. The
action, which was commenced in 1979, was within the ten-year prescriptive period provided under
Article 1144 of the Civil Code for actions based on a written contract. *

The Court quotes with approval the following acute observations made by Justice Alicia Sempio-Diy:

It might not be amiss to state at this juncture that in deciding this case in favor of
defendant, the lower court might have been greatly influenced by the fact that
defendant is a mere farmer who is almost illiterate while plaintiff is an educated landlord,
such that it had felt that it was its duty to be vigilant for the protection of defendant's
interests. But the duty of the court to protect the weak and the underprivileged should
not be carried out to such an extent as to deny justice to the landowner whenever truth
and justice happen to be on his side. Besides, defendant's economic position vis a visthe
plaintiff does not necessarily make him the underprivileged party in this case, for as
testified by plaintiff which defendant never denied, the small land in question was the
only landholding of plaintiff when he and his father bought the same, at which time he
was just a lowly employee who did not even have a house of his own and his father, a
mere farmer, while defendant was the agricultural tenant of another piece of land and
also owns his own house, a sari sari store, and a caritela. Plaintiff also surmised that it was
only after defendant had been taken into its wings by the Federation of Free Farmers that
he started claiming to be plaintiff's agricultural tenant, presumably upon the Federation's
instigation and advice. And we cannot discount this possibility indeed, considering that
during the early stages of the proceedings this case, defendant even counter-proposed
to plaintiff that he would surrender the land in question to the latter if plaintiff would
convey to him another piece of land adjacent to the land in question, almost one ha. in
area, that plaintiff had also acquired after buying the land in question, showing that
defendant was not as ignorant as he would want the Court to believe and had the
advice of people knowledgeable on agrarian matters.

This Court has stressed more than once that social justice –– or any justice for that matter –– is for the
deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in case of
reasonable doubt, we are called upon to tilt the balance in favor of the poor, to whom the Constitution
fittingly extends its sympathy and compassion. But never is it justified to prefer the poor simply because
they are poor, or to reject the rich simply because they are rich, for justice must always be served, for
poor and rich alike, according to the mandate of the law.

WHEREFORE, the challenged decision of the Court of Appeals is AFFIRMED and the petition is DENIED,
with costs against the petitioner. It is so ordered.

GABRIEL V PANGILINAN

This appeal from the decision, dated December 26, 1963, of the Court of First Instance of Pampanga
in its Civil Case No. 1823, was certified to this Court by the Court of Appeals for the reason that the
jurisdiction of an inferior court is involved.

During the pendency of this case before this Court, under date of April 29, 1972, Atty. Virgilio M. Pablo,
counsel for the appellant Eusebio Pangilinan, gave notice to this Court that said appellant died on
April 3, 1964, and was survived by his children, who are his legal heirs, namely: Salvador Pangilinan,
Santos Pangilinan, Mariano Pangilinan, Carlos Pangilinan and Pilar Pangilinan de Avante. For the
purposes of this case the appellant Eusebio Pangilinan, therefore, is substituted by his heirs herein
named.

Under date of November 20, 1973, Atty. Amando M. Laki filed a motion with this Court advising that
appellee Trinidad Gabriel died on June 14, 1967, and was survived by her heirs and successors-in-
interest, namely: Corazon O. Gabriel, married to Lamberto Ignacio; Ernesto O. Gabriel; Ester O. Gabriel,
married to Emmanuel Padua; Generoso O. Gabriel, Marciano O. Gabriel and Pablo O. Gabriel, and
prayed that appellee Trinidad Gabriel be substituted by her heirs herein named. By order of this Court
of December 4, 1973 the prayer for substitution was granted.

In its resolution dated April 19, 1967 certifying the case to this Court, the Court of Appeals made the
following findings, which We adopt:

On June 18, 1960 Trinidad Gabriel filed a complaint in the Court of First Instance of
Pampanga against Eusebio Pangilinan alleging that she is the owner of a fishpond
situated in barrio Sta. Ursula, Betis, Pampanga and measuring about 169,507 square
meters; that sometime during the last war she entered into an oral contract of lease
thereof with the defendant on a year to year basis, i.e., from January 1 to December 31,
at a rental of P1,200, plus the amount of real estate taxes, payable in advance in the
month of January; that desiring to develop and cultivate the fishpond by herself, she
notified the defendant in a letter dated June 26, 1957 that she was terminating the
contract as of December 31, 1957; that upon request of the defendant, she extended
the lease for another year; that on November 19, 1958 she again wrote the defendant
that he should surrender possession of the fishpond on January 1, 1959, which demand
he however ignored. Plaintiff accordingly prayed that the defendant be ordered to
restore the possession of the fishpond to her and to pay her P1,200, plus the amount of
real estate taxes, a year from 1959, attorney's fees and costs.

The defendant moved for the dismissal of the complaint on the ground that the trial court
had no jurisdiction over the case which properly pertains to the Court of Agrarian
Relations, there being an agricultural leasehold tenancy relationship between the
parties. Upon opposition by the plaintiff, the motion was denied. The defendant
thereafter filed his answer with counterclaim alleging, inter alia, that the land in question
was originally leased to him, also verbally, by the plaintiff's father, Potenciano Gabriel in
1923 for as long as the defendant wanted subject to the condition that he would convert
the major portion into a fishpond and the part which was already a fishpond be improved
at his expense which would be reimbursed by Potenciano Gabriel or his heirs at the
termination of the lease for whatever cause; that when the plaintiff became the owner
of the property through inheritance, she told the defendant that she would honor her
father's contract with the defendant, and likewise assured him that he could continue
leasing the property, whose original rental of P400.00 a year had been progressively
increased to P1,200.00, for as long as he wanted since she was not in a position to attend
to it personally. As a special defense, the defendant reiterated the alleged lack of
jurisdiction of the trial court to take cognizance of the case.

On February 12, 1962 the trial court issued an order herein below quoted in full:
The plaintiff sinks to eject the defendant from the fishpond described in the complaint
which is under lease to the said defendant, who, however, refuses to vacate. Instead, he
has impugned the jurisdiction of this Court contending that the action should have been
filed with the Court of Agrarian Relations, which has original and exclusive jurisdiction, as
their relationship is one of leasehold tenancy.

After the motion to dismiss was denied on the basis of the allegations of the complaint,
the parties were ordered to adduce evidence for the purpose of determining which
Court shall take cognizance of the case.

It appears that the fishpond is presently in the possession of the defendant, who originally
leased it from the father of the plaintiff. Upon the death of the said father, the fishpond
was inherited by the plaintiff. It is now covered by T.C.T. No. 1634 and is registered in her
name. It contains an area of 169,507.00 square meters. The rental is on a yearly basis.

It also appears that the defendant has ceased to work personally with the aid of helpers
the aforecited fishpond since 1956 he became ill and incapacitated. His daughter, Pilar
Pangilinan, took over. She testified that she helps her father in administering the leased
property, conveying his instructions to the workers, Urbano Maninang, Isidro Bernal and
Marciano Maninang. The names of Ire, Juan and Aguedo Viada have been mentioned
as the laborers who were paid for the repair of the dikes. Bernardo Cayanan, a nephew
of the defendant, acts as the watcher. He has lived separately since he got married.
Excepting Pilar Pangilinan. who is residing near the fishpond, the other children of the
defendant are all professions; a lawyer, an engineer, and a priest all residing in Manila.
None of these persons has been seen working on the fishpond.

The above are the material and pertinent facts upon which we enter this order.

After a study of the facts and in the light of the provisions of the Tenancy Law, Republic
Act No. 1199, particularly Sections 4 and 9, as amended. it seems clear that his case does
not fall within the purview of said Act. The lease contract is manifestly a civil lease
governed by the New Civil Code. Considering the area of the fishpond, 16 hectares,
more or less, the fact that neither the defendant, who is physically incapacitated, or his
daughter is Personally cultivating the fishpond or through the employment of mechanical
farm implements, and the further fact that the persons named above are not members
of the immediate farm household of the defendant, the conclusion is that no tenancy
relationship exists between the plaintiff and the defendant as defined by Republic Act
No. 1199, as amended.

We are, therefore, of the opinion and so hold that this Court is vested with jurisdiction to
try and decide this case. After this order has become final, the plaintiff may request for
the setting of the initial trial.

The defendant does not contest the findings of facts therein made by the trial court.

After the parties adduced their respective evidence on the merits, decision was
rendered wherein the trial court Pursuant to Article 1197 of the Civil Code, fixed the period
of the low up to June 30, 1964, the defendant on said date to surrender possession of the
fishpond to the plaintiff and to pay the rentals due the latter. The plaintiff, on her part,
was required upon surrender of on to her, to pay the defendant the sum of P1,000.00 as
reimbursement of the expenses he incurred in improving the fishpond, and upon failure
by either party to pay the amount due the other, the same would bear interest at the
legal rate until full payment is made.

A reconsideration by the defendant having been denied, he appealed to this Court and
assigned the following errors:

1. The lower court erred in considering the relationship of appellee and appellant as that
of a civil lease, in accordance with the Civil Code of the Philippines and not a leasehold
tenancy under Rep. Act No. 1199 as amended.
2. The lower court erred in not holding that the Court of First Instance is without jurisdiction,
the cue being that of an agrarian relation in nature pursuant to Rep Act. NO. 1199 as
amended.

3. The lower court erred in appreciating the evidence of the appellant particularly the
basis for the expenditure for the development of the fishpond in question.

4. The lower court erred in rendering judgment in favor of the appellant in them easily
amount of one thousand pesos for reimbursement and for seven hundred pesos for the
cost of the floodgate.

Anent the question of jurisdiction, it is an admitted fact that plaintiff leased the fishpond to the
defendant in 1943 without a fixed term, the annual rental payable at the end of the year (Exhibit C,
Deposition of plaintiff, Dec. 13, 1962, pp. 2 and 3). It is likewise undisputed that the work in the fishpond
consisted in letting out the water so algae (lumut) would grow or if algae would not grow, getting some
from the river and putting them in the fishpond, changing the dirty water with fresh water, repairing
leaks in the dikes, and planting of fingerlings and attending to them; that these were done by
defendant, with some help; that he personally attended to the fishpond until 1956 when he became
ill; that thereafter his nephew Bernardo Cayanan, who was living with him, helped in the work to be
done in the fishpond and his daughter Pilar Pangilinan helped in the management, conveying his
instructions to the workers (t.s.n., pp. 4-8, Magat).

Upon the foregoing facts, the defendant insists that the relationship between the parties is an
agricultural leasehold tenancy governed by Republic Act No. 1199, as amended, pursuant to section
35 of Republic Act No. 3844, and the present case is therefore within the original and exclusive
jurisdiction of the Court of Agrarian Relations. Plaintiff, on the other hand, maintains in effect that since
defendant has ceased to work the fishpond personally or with the aid of the members of his immediate
farm household (Section 4, Republic Act No. 1199) the tenancy relationship between the parties has
been extinguished (Section 9, id.) and become of civil lease and therefore the trial court properly
assumed jurisdiction over the case.

It does appear that the controversy on the issue of jurisdiction calls for the interpretation of cultivating
or working the land by the tenant personally or with the aid of the members of his immediate farm
household.1

Those are the findings and conclusions of facts made by the Court of Appeals which, as a general rule,
bind this Court.2

1. Let Us now discuss the issues raised in this appeal. First, was the relationship between the appellee
and appellant a leasehold tenancy or a civil law lease?

There are important differences between a leasehold tenancy and a civil law lease. The subject matter
of leasehold tenancy is limited to agricultural land; that of civil law lease may be either rural or urban
property. As to attention and cultivation, the law requires the leasehold tenant to personally attend to,
and cultivate the agricultural land, whereas the civil law lessee need not personally cultivate or work
the thing leased. As to purpose, the landholding in leasehold tenancy is devoted to agriculture,
whereas in civil law lease, the purpose may be for any other lawful pursuits. As to the law that governs,
the civil law lease is governed by the Civil Code, whereas leasehold tenancy is governed by special
laws.3

In order that leasehold tenancy under the Agricultural Tenancy Act may exist, the following requisites
must concur.

1. That the land worked by the tenant is an agricultural land;

2. That the land is susceptible of cultivation by a single person together with members of his immediate
farm household;

3. That the land must be cultivated by the tenant either personally or with the aid of labor available
from members of his immediate farm household;

4. That the land belongs to another; and


5. That the use of the land by the tenant is for a consideration of a fixed amount in money or in produce
or in both.4

Were the foregoing requisites present in the instant case?

There is no doubt that the land in question is agricultural land. It is a fishpond and the Agricultural
Tenancy Act, which refers to "agricultural land", specifically mentions fishponds and prescribes the
consideration for the use thereof. Thus Section 46(c) of said Act provides that "the consideration for the
use of sugar lands, fishponds, salt beds and of lands devoted to the raising of livestock shall be
governed by stipulation between the parties". This Court has already ruled that "land in which fish is
produced is classified as agricultural land."5 The mere fact, however, that a person works an agricultural
land does not necessarily make him a leasehold tenant within the purview of section 4 of Republic Act
No. 1199. He may still be a civil law lessee unless the other requisites as above enumerated are
complied with.

Regarding the second requisite, it is to be noted that the land in question has an area of 169,507 square
meters, or roughly 17 hectares of fishpond. The question of whether such a big parcel of land is
susceptible of being worked by the appellant's family or not has not been raised, and We see no need
of tarrying on this point. So, We pass to the third requisite, to wit, whether the tenant himself personally
or with the aid of his immediate family worked the land.

Assuming that appellant had previously entered in 1923 into an agreement of leasehold tenancy with
Potenciano Gabriel, appellee's father, such tenancy agreement was severed in 1956 when he ceased
to work the fishpond personally because he became ill and incapacitated. Not even did the members
of appellant's immediate farm household work the land in question. Only the members of the family of
the tenant and such other persons, whether related to the tenant or not, who are dependent upon
him for support and who usually help him to operate the farm enterprise are included in the term
"immediate farm household"6 The record shows who helped work the land in question, and We quote:

It also appears that the defendant has ceased to work personally with the aid of helpers
the aforecited fishpond since 1956 when he became ill and incapacitated. His daughter,
Pilar Pangilinan took over. She testified that she helps her father in administering the
leased property, conveying his instructions to the workers, Urbano Maninang, Isidro Bernal
and Marciano Maninang. The names of Ire, Juan and Aguedo Viada have been
mentioned as the laborers who were paid for the repair of the dikes. Bernardo Cayanan,
a nephew of the defendant, acts as the watcher. He has lived separately since he got
married. Excepting Pilar Pangilinan, who is residing near the fishpond, the other children
of the defendant are all professionals: a lawyer, an engineer, and a priest — all residing
in Manila. None of these persons has been seen working on the fishpond.7

The law is explicit in requiring the tenant and his immediate family to work the land. Thus Section 5 (a)
of Republic Act No. 1199, as amended, defines a "tenant" as a person who, himself and with the aid
available from within his immediate farm household, cultivates the land belonging to, or possessed by,
another, with the latter's consent for purposes of production sharing the produce with the landholder
under the share tenancy system, or paying to the landholder a price certain in produce or in money
or both, under the leasehold tenancy system. Section 8 of the same Act limits the relation of landholder
and tenant to the person who furnishes the land and to the person who actually works the land himself
with the aid of labor available from within his immediate farm household. Finally, Section 4 of the same
Act requires for the existence of leasehold tenancy that the tenant and his immediate farm household
work the land. It provides that leasehold tenancy exists when a person, who either personally or with
the aid of labor available from members of his immediate farm household, undertakes to cultivate a
piece of agricultural land susceptible of cultivation by a single person together with members of his
immediate farm household, belonging to, or legally possessed by, another in consideration of a fixed
amount in money or in produce or in both.

A person, in order to be considered a tenant, must himself and with the aid available from his
immediate farm household cultivate the land. Persons, therefore, who do not actually work the land
cannot be considered tenants;8and he who hires others whom he pays for doing the cultivation of the
land, ceases to hold, and is considered as having abandoned the land as tenant within the meaning
of sections 5 and 8 of Republic Act. No. 1199, and ceases to enjoy the status, rights, and privileges of
one.
We are, therefore, constrained to agree with the court a quo that the relationship between the
appellee Trinidad Gabriel and appellant Eusebio Pangilinan was not a leasehold tenancy under
Republic Act No. 1199. Hence, this case was not within the original and exclusive jurisdiction of the
Court of Agrarian Relations.9

2. Regarding the second assignment of error, We accordingly rule that the Court of First Instance
correctly assumed jurisdiction over the case at bar, this being a case of civil law lease.

3. We deem it unnecessary to discuss the third and fourth assigned errors as these are issues involving
findings of facts which have been settled by the lower court, and unless there is grave abuse of
discretion, which we do not find in the record of the case, We shall not venture to discuss the merits of
the factual findings of the court a quo.

IN VIEW OF THE FOREGOING, the decision of the Court of First Instance of Pampanga in its Civil Case
No. 1823, appealed from, is affirmed, with costs against the appellants.

This decision should apply to the heirs and successors-in-interest of the original parties, as named in this
decision. In consonance with the decision of the lower court, the heirs and successors-in-interest of
appellant Eusebio Pangilinan should deliver the possession of the fishpond in question to the heirs and
successors-in-interest of appellee Trinidad Gabriel; and said heirs and successors-in-interest of appellant
Eusebio Pangilinan should pay the heirs and successors-in-interest of appellee Trinidad Gabriel the
accrued rentals. From January 1, 1960, at the rate of P1,200.00 a year, until the actual delivery of the
possession of the fishpond as herein ordered, with interest at the legal rate until full payment is made.

DAR ADMINISTRATIVE ORDER NO. 02-06

SUBJECT : Revised Rules and Procedures Governing Leasehold Implementation in Tenanted


Agricultural Lands

I. PREFATORY STATEMENTS
The evolution of the law on leasehold has been a great challenge to both government and civil
society stakeholders as it progressed from one of election and limited operation to one of
compulsion and comprehensive application.
Republic Act (R.A.) No. 1199, which became operative on 30 August 1954, was enacted to
govern share tenancy. Section 14 of the said law recognized the rights of the tenants to choose
for leasehold tenancy agreement. R.A. No. 3844, which took effect on 8 August 1963, as
amended by RA No. 6389, finally declared agricultural share tenancy as contrary to public policy
and was, thereby, abolished. Section 4 ofRA 6389 automatically converted share tenancy
throughout the country into agricultural leasehold relationship.
The Comprehensive Agrarian Reform Law (CARL) or R.A. No. 6657, which took effect on 15 June
1988, expressly repealed Section 35 of R.A. No 3844 which exempted fishponds, saltbeds, and
lands principally planted to citrus, coconut, cacao, coffee, durian and other similar permanent
crops. The significant implications of this evolution of the law are as follows:
1. The abolition of share tenancy now covers all agricultural landholdings without
exceptions; HCDAac
2. The conversion of share tenancy into leasehold is mandated by law;
3. Agricultural leasehold can be a preliminary step to land ownership. Hence, all share-
crop tenants were automatically converted into agricultural lessees as of 15 June 1988,
whether or not a leasehold agreement has been executed; and
4. Leaseholders' security of tenure shall be respected and guaranteed.
In accordance with these developments of the law, Sec. 12 of R.A. No. 6657mandates the
Department of Agrarian Reform (DAR) to determine and fix the lease rentals within retained areas
and areas not yet acquired for agrarian reform in accordance with Section 34 of R.A. No. 3844.
Additionally, Section 6 of R.A. No. 6657 recognizes the right of the farmer to elect whether to
become a farmer-beneficiary or a leaseholder in the retention area of the landholder. Section
67 of the same Act directs the Registrar of Deeds to "register . . . patents, titles, and documents
required for the implementation of the CARP."
Pursuant to the DAR's mandate to protect the rights and improve the tenurial and economic
status of farmers in tenanted lands, and its efforts to provide for an effective mechanism that shall
implement leasehold and improve the method for determining and fixing lease rentals, as well
as deal with external factors such as the prevailing practice and stance of landowners to deny
the existence of tenancy relations whenever possible, the rules and procedures governing
agricultural leasehold tenancy and leasehold implementation are hereby modified and
amended as follows. CEDHTa
II. COVERAGE
These rules and procedures shall apply to all tenanted agricultural lands, regardless of crop
produced and tenancy relations established. These lands may belong to any of the following
categories:
1. Retained areas;
2. Tenanted agricultural lands not yet acquired for distribution under the
Comprehensive Agrarian Reform Program (CARP);
3. All other tenanted lands which may be validly covered under the existing laws,
including but not limited to:
3.1 Tenanted landholdings that may be within the purview of Department of
Justice (DOJ) Opinion No. 44-1990 but actual use remains agricultural and;
3.2 All other tenanted landholdings that may otherwise qualify for exemption or
exclusion from CARP coverage or land use conversion, for as long as actual use
remains agricultural.
III. DEFINITION OF TERMS
1. Agricultural land — As one of the six essential elements of agricultural tenancy, it means
"land devoted to any growth, including but not limited to crop lands, salt beds, fish ponds, idle
land and abandoned land" (R.A. No. 3844, Section 166 (1)). It refers to "lands devoted to or
suitable for the cultivation of the soil, planting of crops, growing of trees, raising of livestock,
poultry, fish or aquaculture production, including the harvesting of such farm products, and other
farm activities and practices performed in conjunction with such farming operations by persons
whether natural or juridical. HAEDIS
2. Agricultural Leasehold Contract — A tenurial arrangement, whether written or oral,
express or implied, between the lessor-landholder and lessee-farmer where the former consents
to the latter's personal cultivation of piece of agricultural land in consideration of a fixed rental
either in money or produce or bother. Nevertheless, for purposes of leasehold implementation
under this Administrative Order, "agricultural leasehold contract" refers to a written tenurial
arrangement, in the form prescribed by the DAR, between the lessor-landholder and lessee-
farmer containing aforesaid terms/agreement.
3. Agricultural Leasehold Relation — It is limited to the person who furnishes the landholding,
either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally
cultivates the same (R.A. No. 3844, section 6).
4. Agricultural Lessee — A person who, by himself and with the aid available from within his
immediate farm household, cultivates the land, belonging to or possessed by another, with the
latter's consent for purposes of production, for a price certain in money or in produce or both. It
is distinguished from civil lessee as understood in the Civil Code of the Philippines. (R.A. No. 3844,
Section 166 (2)).
5. Agricultural Lessor — A person, natural or juridical, who, either as owner, civil law lessee,
usufructuary, or legal possessor, lets or grants to another the cultivation and the use of his land for
a price certain. (R.A. 3844, Section 166 (3)).
6. Agricultural Year — The period of time required for raising a particular agricultural product,
including the preparation of the land, sowing, planting and harvesting of crops and, whenever
applicable, threshing of said crops: Provided, however, That in case of crops yielding more than
one harvest from planting, "agricultural year" shall be the period from the preparation of the land
to the first harvest and thereafter, from harvest to harvest. In both cases, the period may be
shorter or longer than the calendar year. (R.A. No. 3844, Section 166 (4)).
7. Principal crop — Any product raised from dominant cultivation or use of the land and
harvested on a regular basis.
8. Auxiliary crop — Any product raised other than the crop to which the cultivation of the
land is principally devoted in each agricultural year, and excluding the produce of the homelot
(R.A. No. 2263, Section 2 (5) (r)). DCcSHE
9. Crop Diversification — The practice of growing two or more different kinds of crops in one
area for a given period to maximize the whole area.
10. Deductible Items — Allowable list of costs subtracted from the computed gross normal
harvests and which costs are utilized for seeds and the cost of harvesting, threshing, loading,
hauling, and processing, whichever is applicable.
11. Homelot — A lot suitable for dwelling with an area of not more than three percent (3%) of
the area of the landholding provided that it does not exceed one thousand (1,000) square
meters and that it shall be located at a convenient and suitable place within the land of the
landholder to be designed by the latter, where the tenant shall construct his dwelling. However,
incomes from vegetables, poultry, pigs, other animals, minor industry products raised or produces
within the homelot, shall accrue to the tenant exclusively.
12. Immediate Farm Household — The members of the family of the lessee and other persons
who are dependent upon him for support and who usually help him in his farming activities.
13. Indiscriminate Cutting — The felling of trees that tends to materially affect the productivity
of the farm.
14. Inter-cropping — The practice of simultaneously growing two or more crops in between
the principal crop.
15. Landholder — A person, natural or juridical, who, either as owner, civil law lessee,
usufructuary, or legal possessor, lets or grants to another the use of cultivation of his land for a
consideration either in shares under the share tenancy system, or price certain or ascertainable
under the leasehold tenancy system. CacISA
16. Normal Harvest — The usual or regular produce obtained from the land when it is not
affected by any fortuitous event like drought, earthquake, volcanic eruption, and the like.
17. Proven Farm Practices — Sound farming practices generally accepted through usage or
officially recommended by the Department of Agriculture (R.A. No. 3844, Section 166(11)).
18. Share Tenancy — The relationship which exists whenever two persons agree on a joint
undertaking for agricultural production wherein one party furnishes the land and the other his
labor, with either or both contributing any one or several of the items of production, the tenant
cultivating the land personally with the aid of labor available from members of his immediate
farm household, and the produce thereof to be divided between the landholder and the tenant
(R.A. No. 3844, Section 166 (25)).
19. Tenant — A person himself and with the aid available from within his immediate farm
household, cultivates the land belonging to, or possessed by another, with the latter's consent for
purposes of production, sharing the produce with the landholder under the share tenancy
system, or paying to the landholder a price certain or ascertainable in produce or in money or
both, under the leasehold tenancy system (R.A. No. 1199, section 5 (a)).
IV. GOVERNING POLICIES AND PRINCIPLES
Pursuant to Section 12 of R.A. No. 6657, and in order to fully implement the provisions of R.A. No.
3844, as amended, on agricultural leasehold, the following policies and principles are hereby
issued:
1. Agricultural leasehold shall be based on a tenancy relationship. The following are essential
elements of agricultural tenancy:
1.1. The parties are the landholder and the tenant;
1.2. The object of the relationship is an agricultural land;
1.3. There is consent freely given either orally or in writing, express or implied;
1.4. The purpose of the relationship is agricultural production;
1.5. There is personal cultivation;
1.6. There is consideration given to the lessor either in a form of share of the harvest or
payment of fixed amount in money or produce to or both.
2. Agricultural leasehold relation shall not be extinguished by mere expiration of the term of
period in a leasehold contract nor by the sale, alienation or transfer of the legal possession of the
land. In case the agricultural lessor sells, alienates or transfers the legal possession of the
landholding, purchaser or transferee thereof shall be subrogated to the rights and substituted to
the obligations of the agricultural lessor as provided for under Sec. 10, R.A. 3844, as
amended. HDTSCc
3. Cultivation is not limited to the plowing and harrowing of the land, but also the advancing
of the ground to forward the products of the earth by general industry, taking care of the land
and fruits growing thereon, fencing of certain areas, and the cleaning thereof by gathering of
coconuts, their pilings, husking, and harvesting as well as the proceeding thereof go into copra,
although at times with the aid of hired laborers.
4. The consideration for the lease shall not be more than the equivalent of 25% of the
average normal harvest (ANH) during the three (3) agricultural years immediately preceding the
date the lease was established. If the land has been cultivated for less than 3 years, the initial
consideration shall be based on the average normal harvest of the preceding year/s when the
land was actually cultivated.
If the land has been cultivated for a period of less than three (3) years, the initial
consideration shall be based on the average normal harvest during the preceding years when
the land was actually cultivated, or on the harvest of the first year in the case of newly cultivated
lands, if that harvest is normal (R.A. No. 3844, Section 34, 1stproviso).
For auxiliary crops, the lease shall not be more than the equivalent of 20% following the
principles provided for principal crops on the use of average normal harvest provided that all
expenses shall be born by the tenant pursuant to Sec. 30,R.A. 1199, as amended
After the lapse of the first three (3) normal harvests, the final consideration shall be based
on the average normal harvest during these three (3) preceding agricultural years (R.A. No. 3844,
Section 34, 2nd proviso).
5. The lease rental shall cover the whole farmholding attended to by the lessee.
Computation of lease rental shall include principal and/or auxiliary crops existing in the area as
of the time the leasehold was established.
6. Where the rental has been fixed, whether in cash or in kind, such rental shall constitute the
consideration for the use of the land and the lessee may diversify and/or plant auxiliary crops.
The right to diversify shall be provided in the leasehold contract.
7. In the homelot, where the tenant may raise vegetables, poultry, pigs, other animals, or
engage in minor industries, the products shall accrue to the tenant exclusively. The tenant's
dwelling shall not be removed from the lot already assigned to him by the landholder unless there
is severance of tenancy relationship between them as provided under Section 9 of R.A. No.
1199 or unless the tenant is ejected for cause, and only after the expiration of forty-five (45) days
following such severance of relationship or dismissal for cause. (R.A. No. 2263, Section 5).
8. As a general rule, tenancy is indivisible and dual tenancy/co-tenancy is not allowed. This
rule is however subject to the following exceptions: aSITDC
8.1 As among the heirs of a deceased tenant-farmer, the landowner has recognized
the children as the tenant's successor to the tenancy of the landholding.
8.2 A common law wife is recognized as a co-tenant by the landowner and is entitled
to cultivation of the same after the common-law husband had left the landholding.
8.3 When co-tenancy exists with the consent of the landowners.
The DAR adheres to the policy of "indivisibility of tenancy", hence, only the foregoing exceptions
are recognized.
9. Where there are two tenants on the same lot (when divisibility of tenancy is allowed), each
producing a different crop, they may decide to have a joint leasehold agreements with the
landholder, whichever is feasible. This provision applies only to tenancy relationship existing as of
the effectivity of this Order and shall not be countenanced prospectively.
10. An agricultural lessee shall continue the enjoyment and possession of his landholding
except when his dispossession has been authorized by the proper tribunal in a judgment that is
final and executory for causes provided by law (R.A. No. 3844, Section 36(6)). To avoid
compounded rents, it shall be the duty of the Municipal Agrarian Reform Officer (MARO) to
encourage farmers to avail of the crop insurance program of the government.
11. In case a prospective agricultural lessee is under serious threat of eviction as a
consequence of the leasehold coverage implementation (not as a consequence of execution
of a lawful order), the matter shall be immediately reported, with the assistance of the MARO, to
the nearest police or law enforcement agency for documentation. Such report may later be
necessary in guiding the DAR in resolving questions pertaining to existence or non-existence of
tenancy relationship. TIHDAa
12. If capital improvements are introduced on the farm by the landholder to increase its
productivity, the rental shall be increased proportionately to the consequent increase in
production due to said improvements. The cost of the capital improvement, including interest
thereon, will be determined, and the number of years shall be fixed within which the increase in
rental shall be paid. In case of disagreement, the Adjudicator shall determine the reasonable
increase in rental. (R.A. No. 3844, Section 34, 4th proviso).
13. The lease rental determined by the MARO in accordance with law and existing policies of
the DAR shall be binding and immediately executory upon execution of the leasehold contract
by both the lessor and the lessee and affirmation by the MARO.
14. Leasehold agreements under this Order shall be in writing, using the prescribed leasehold
contract, duly notarized and registered with the Municipal Treasurer's Office. Refusal of the
landholder to sign a leasehold contract shall not affect the tenant's status as lessee.
15. Existing leasehold agreements shall be respected provided that the agreed lease rentals
do not exceed the maximum provided by law and the other stipulations therein are not contrary
to law. For the purpose of determining compliance with the terms and conditions written therein,
these agreements shall be subject to the MARO's periodic review.
16. All issues related to the implementation of this Administrative Order and the Leasehold
Contract shall, as much as possible, be resolved within the level of the MARO and/or the PARO,
if still necessary, pursuant to the rule on exhaustion of administrative remedies.
17. If the landowner refuse to accept the Provisional Lease Rental (PLR), the lessee shall
deposit the contested lease rental with the nearest Land Bank of the Philippines (LBP) Office, or
any duly authorized banking institution in the locality, in a trust account in the name of the
landholder if the payment is in cash or in a bonded warehouse if the payment is in kind. The lessee
shall notify the MARO and the landholder on the payment made.
The same rule shall apply to landholdings covered by leasehold contracts where the
landowner refuses to accept the lease rental.
18. In case of disagreement over the issue on the fixing of lease rentals, the PLR issued by the
MARO shall be reviewed and affirmed by the PARO. If no action is taken by the PARO after the
lapse of fifteen (15) days from receipt of a copy thereof, the PLR shall be deemed approved and
shall govern the leasehold relation. SCDaET
19. Any party who disagrees with the MAROs decision must submit within 15-day period an
original complaint before the Provincial Agrarian Reform Adjudicator (PARAD). Notwithstanding
the filing of the case before the PARAD, the MARO's decision shaft be provisionally observed as
provided in the preceding paragraph until and unless the PARAD rules otherwise after
adjudicating the lease rental on the merits.
20. The Adjudicator shall decide the case within thirty (30) days from the last day of the filing
date of the last responsive pleading, pursuant to the first sentence of Section 51 R.A. No. 6657.
21. In case of disagreement over the issue of existence of tenancy relationship and the
MARO's finding is in favor of its existence, and later a party files a case before the Adjudicator,
the distribution of the proceeds from the intervening harvest shall be as follows:
21.1. Release 50% to the party claiming to be tenant:
21.2. Release 25% to the landholder;
21.3. Deposit the cash equivalent of the remaining 25% in a bank account in the name of
the Department of Agrarian Reform in trust for the parties concerned.
V. SPECIFIC POLICIES FOR LANDS PRIMARILY DEVOTED TO SUGARCANE AND COCONUT
A. SUGARCANE LANDS
In the implementation of the leasehold system, particularly in sugarcane lands, the
following policies shall apply:
1. In order to progressively improve the condition of the lessee, and as part of the
leasehold arrangement, the lessee shall have the following rights to be exercised by him
personally or through a duly registered cooperative/farmers' association of which he is a
bonafide member:
1.1 To enter into a contract with the sugar central millers for the milling of the
sugarcane grown on the leased property. Any milling contract existing between the
landholder and the sugar millers shall be deemed to have been amended, with the
lessee/s assuming all the rights of the landholder in such contract, until the lessee/s
and the miller shall have entered into a new milling agreement under the reasonable
terms and conditions.
1.2 To be issued a warehouse receipt (quedan) or molasses storage certificate by
the sugar central for the manufactured sugar, molasses and other by-products.
1.3 To have free access to the sugar central/s factory, facilities, and laboratory for
purposes of checking and/or verifying records and procedures in the processing of
sugarcane through professional representation.
1.4 To be furnished a weekly statement of cane and sugar account showing,
among other things, the tonnage of the delivered cane and analysis of the crusher
juice. CEDHTa
1.5 To be given thirty (30) days notice in writing before the sugar and other by-
products are sold through public auction. These rights shall bind the DAR Sheriff or
person designated by the Adjudicator to have custody of the unliquidated harvest to
observe the process of public auction and shall not be allowed a negotiated sale of
the sugar and other byproducts.
1.6 To be provided with the standard tonnage allocation by the miller/sugar
central.
2. The lease rental for sugarcane lands shall be not more than twenty five percent
(25%) of average normal harvest less the value of the cost of seeds/cane points, harvesting
(cutting), loading, hauling, and/or trucking fee, and cost of processing, pursuant to Section
34 of R.A. No. 3844. (See Annex "A" on sample computation)
3. The determination of the average normal harvest to be used in computing the lease
rental in sugarcane lands shall be based on the following:
3.1 If the leasehold relationship existed before 15 June 1988, the effectivity of R.A.
No. 6657, the average normal harvests of the three (3) agricultural years immediately
before the date of the leasehold relationship was established shall be used.
3.2 If the leasehold relationship was established on 16 June 1988 by operation
of R.A. No. 6657, the average normal harvest of the three (3) agricultural years
immediately preceding the said date shall be used.
3.3 If the land has been cultivated for less than three (3) years prior to the ate the
leasehold was established, the estimated normal harvest during the three (3)
agricultural years immediately preceding the said date shall be considered as a
normal harvest.
4. An agricultural year for sugarcane shall be understood to mean the period from land
preparation to harvesting. Ratooning (from trash burning to harvesting) shall likewise be
considered as one agricultural year.
5. The leasehold agreement shall include both the sugarcane products (sugar) and by
products (molasses).
6. The lease rental of the land shall be paid in an amount certain, in money or in
produce, or both, as may be agreed upon by the parties. Such rental shall be paid after
the exact produce shall have been determined using the Certificate of Quedan and
molasses storage certificate issued by the sugar central/miller, unless otherwise agreed
upon by the parties under reasonable terms and conditions. CHcTIA
7. The agricultural lessees shall not be required to assume, directly or indirectly, any part
of the rent, or other considerations which the agricultural lessor is under obligation to pay
third persons for the use of the land (R.A. No. 3844, Section 31).
8. Any contract by which the agricultural lessee is required to accept a loan or to make
payment(s) in kind shall be contrary to law, moral or public policy (R.A. No. 3844, Section
15).
9. The agricultural lessor may mortgage expected rentals (R.A. No. 3844, Section 29)
10. Notwithstanding the above provisions of the law and any contract of mortgage
existing between the landholder-planter and financial institutions to the contrary, it is
unlawful for the landholder-planter to mortgage to any entity (such as banks or financial
institutions) that part of produce which is due to the agricultural lessee.
11. If the landholder incurred loans from a bank or any financial institution, such bank
can only attach the fixed lease rental due to the landholder. It is unlawful for the bank or
any financial institution to withhold the quedan covering the portion of the crop due to the
lessee.
12. The DAR shall encourage sugarcane farmer-lessees to establish associations or
cooperatives which shall assist them or directly deal with the millers, processors, transport
operators, and financial and banking institutions. The DAR shall likewise assist farmer-lessees
in securing milling accommodations or membership in sugar planters associations.
B. COCONUT LANDS
In the implementation of the leasehold system, particularly in coconut lands, the following
policies shall apply:
1. The indiscriminate or substantial cutting of coconut trees by the landholder or his
assigns is prima facie evidence of dispossession of the tenant-lessee from his farmholding.
The following documents may, however, rebut the presumption:
1.1 Written consent of the lessee; and
1.2 A permit to cut coconut trees from the Philippine Coconut Authority, in
accordance with R.A. No. 8048 (Coconut Preservation Act of 1995) and its
implementing rules and regulations.
2. Consistent with the state policy to provide for the growth of the coconut industry
through a sustainable replanting program, as enunciated in R.A. No. 8048, and in
consonance with the preceding paragraph, it shall be the duty of the MARO assigned in
the area to encourage replanting of coconut trees and the maximization of the
landholding especially the area in between the coconut trees. He/She shall assist the
parties in coordinating with proper government agencies and institutions. IHCDAS
3. The application of the allowable deductible items in coconut shall depend on the
final product as defined in this AO.
3.1 If the final product is copra, the deductible items are the:
3. 1.1 cost of harvesting, which shall include picking and piling; and
3.1.2 cost of processing, which shall include husking, splitting, scooping, and
drying.
3.2 If the final product is green nuts, the deductible items above shall be used
except for the cost of processing.
3.3. The final product is husked nuts, the cost in items 3.1.1 and the cost of husking
in 3.1.2 shall be deducted.
4. The lease rental for the coconut lands shall not be more than twenty-five percent
(25%) of the average normal harvest for a specific area for the preceding three (3)
calendar years less the value of production cost. (See Annex "B" on sample computation)
5. In case there is large-scale replanting in the coconut area initiated by the lessor
which may affect the normal coconut production in particular and the leasehold
arrangement in general, a new lease rental may be computed proportionate to the
decrease in production.
6. In the computation of lease rentals, principal crops already existing within the
homelot when the same was established shall be considered as included in the leasehold.
VI. RIGHTS AND OBLIGATIONS
A. Rights of Agricultural Lessees. — It shall be the right of the agricultural lessee to:
1. Have possession and peaceful enjoyment of the land;
2. Manage and work on the land in a manner and method of cultivation and harvest
which conform to proven farm practices;
3. Mechanize all or any phase of his farm work;
4. Deal with millers and processors and attend to the issuance of quedans and
warehouse receipts for the produce due him;
5. To be afforded and/or continue the exclusive possession and enjoyment of a
homelot;
6. Be indemnified for the cost and expenses incurred in the cultivation, planting or
harvesting and other expenses incidental to the improvement of his crop in case he
surrenders or abandons his landholding for just cause or ejected therefrom. In addition, he
has the right to be indemnified for one-half of the necessary and useful improvements
made by him on the landholding. Provided, That these improvements are tangible an have
not yet lost their utility at the time of surrender and/or abandonment of the landholding, at
which time their value shall determined for the purpose of the indemnity for improvements;
7. Terminate the leasehold during the agricultural year for any of the following causes:
7.1 Cruel, inhuman or offensive, treatment of the agricultural lessee or nay
member of his immediate farm household by the agricultural lessor or his
representative with the knowledge and consent of the lessor;
7.2 Non-compliance on the part of the agricultural lessor with any of the
obligations imposed upon him by the provisions of R.A. No. 3844 or by his contact with
the agricultural lessee;
7.3 Compulsion of the agricultural lessee or any member of his immediate farm
household by the agricultural lessor to do any work or render any service not, in any
way connected with farm work or even without compulsion if no compensation is
paid;
7.4 Commission of a crime by the agricultural lessor or his representative against
the agricultural lessee or any member of his immediate farm household; or
7.5 Voluntary surrender due to circumstances more advantageous to him and his
family.
8. Have the preferential right to buy the agricultural landholding under reasonable
terms and conditions in case the agricultural lessor decides to sell the same (Sec. 11 R.A.
No. 3844).
9. Redeem the landholding at a reasonable price and consideration in case the
agricultural lessor sold the same to a third person without the agricultural lessee's knowledge
pursuant to Section 12 of R.A. No. 3844.
B. Obligations of Agricultural Lessee. — It shall be the obligation of the agricultural lessee to:
1. Cultivate and take care of the farm, growing crops, and other improvements on the
landholding as a good father of a family and perform all the work therein in accordance
with proven farm practices; TcIAHS
2. Inform the agricultural lessor within a reasonable time of any trespass committed by
third persons upon the farm, without prejudice to his direct action against the trespasser;
3. Take reasonable care of the work animals and farm implements delivered to him by
the agricultural lessor and see that they are not used for purposes other than those intended
or used by another without the knowledge and consent of the agricultural lessor: Provided,
however, That if said work animals get lost or die, or said farm implements get lost or are
destroyed, through the negligence of the agricultural lessee, he shall be held responsible
and made answerable therefore to the extent of the value of the work animal and/or farm
implements at the time of the loss, death or destruction;
4. Keep his farm and growing crops attended to during the work season in case of
unjustified abandonment or neglect of hi farm, any or all of his expected produce may,
upon order of the Court, be forfeited in favor of the agricultural lessor to the extent of the
damage caused thereby; ADSIaT
6. Pay the lease rental to the agricultural lessor when it falls due. Provided, that the non-
payment of the rental due to crop failure to the extent of 75% as a result of a fortuitous
event shall not be a ground for dispossession, although the obligation to pay the rental due
that particular crop is not thereby extinguished.
C. Prohibitions on Agricultural Lessees. — It shall be unlawful for the agricultural lessee to:
1. Contract to work additional landholdings belonging to a different agricultural lessor
or to acquire and personally cultivate an economic family-size farm, without the knowledge
and consent of the agricultural lessor with whom he had entered first into leasehold, if the
first landholding is of sufficient size to make him and the members of his immediate farm
household fully occupied in its cultivation; or
2. Employ a sub-lessee on his landholding: Provided, however, That in case of illness or
temporary incapacity, he may employ laborers whose services on hi landholding shall be
on his account.
D. Rights of Agricultural Lessors. — It shall be the right of the agricultural lessor to:
1. Inspect and observe the extent of compliance with the terms and conditions of their
contract and the provisions of this Chapter;
2. Propose a change in the use of the landholding to other agricultural purposes, or in
the kind of crops to be planted: Provided, That in case of disagreement as to the proposed
change, the same shall be settled by the Court according to the best interest of the parties
concerned. Provided, further, That in no case shall an agricultural lessee be ejected as a
consequence of the conversion of the land to some other agricultural purpose or because
of a change in the crop to be planted;
3. Require the agricultural lessee, taking into consideration his financial capacity and
the credit facilities available to him, to adopt in his farm proven farm practices necessary
to the conservation of the land, improvement of it fertility and increase of its productivity.
Provided, That in case of disagreement as to what proven farm practice the lessee shall
adopt, the same shall be settled by the Adjudicator or PARO according to the best interest
of the parties concerned; and
4. Mortgage expected rentals.
E. Obligations of Agricultural Lessors. — It shall be the obligation of the agricultural lessor to:
1. Keep the agricultural lessee in peaceful possession and cultivation of his
landholding; and
2. Keep intact such permanent useful improvements existing on the landholding at the
start of the leasehold relation as irrigation and drainage system and marketing allotments,
which in the case of sugar quotas shall refer both to domestic and export quotas, provisions
of existing laws to the contrary notwithstanding. HaECDI
F. Prohibitions on Agricultural Lessors. — It shall be unlawful for the agricultural lessor to:
1. Dispossess the agricultural lessee of his landholding except upon authorization by
DARAB. Should the agricultural lessee be dispossessed of his landholding without
authorization from the DARAB, the agricultural lessor shall be liable for damages suffered by
the agricultural lessee in addition to the fine or imprisonment prescribed in R.A. 3844 for
unauthorized dispossession;
2. Require the agricultural lessee to assume, directly or indirectly, the payment of the
taxes or part thereof levied by the government on the landholding;
3. Require the agricultural lessee to assume, directly or indirectly; any part of the rent,
"canon" or other consideration which the agricultural lessor is under obligation to pay to
third persons for the use of the land;
4. Deal with millers or processors without written authorization of the lessee in case
where the crop has to be sold in processed form before payment of the rental; or
5. Discourage, directly or indirectly, the formation, maintenance or growth of unions or
organizations or agricultural lessees in his landholding, or to initiate, dominate, assist or
interfere in the formation of administration of any such union or organization.
VII. OPERATING PROCEDURES
A. Identification Phase
The MARO shall, motu propio, or at the instance of either the landholder or the tenant, identify
all landholdings still under the tenancy as of the effectivity of R.A. No. 6657, and list the landowner
and the tenants thereon, with the assistance of the BarangayAgrarian Reform Committee
(BARC), and people's organization/non-government organization (POs/NGOs) that are present
in the area. The MARO shall then prepare the list of identified landholdings subject of agricultural
leasehold and prepare the individual profile of the landholdings with its corresponding
landholders and tenants.
This activity, however, shall be considered independent from the determination and fixing of
lease rental as it is assumed to be a regular function of the MARO.
B. Notice of Conference
After identification of all tenanted agricultural .lands in the community/barangay, the
MARO shall: aTHASC
1. Send an invitation letter, through personal service or registered mail, to the
tenant and to the landholder, or his administrator or overseer for the farm, for a
mediation conference, copy furnished the BARC and the Barangay Captain/Council.
Priority shall be given to those represented by peasant's organization. The voluntary
application by any lessor for the fixing of the rental shall likewise be immediately acted
upon.
The invitation letter shall indicate the date or schedule of the conference,
between the parties and require them to submit the necessary documents, within
fifteen (15) days upon receipt thereof, such as: production data, cost of production,
type or kind of crops planted (principal and auxiliary), any evidence as proof of the
average normal harvest, including the cost of deductible item(s), during the three (3)
agricultural years immediately preceding and other relevant information, i.e., receipt
of payments, affidavit or any proof from disinterested persons/parties attesting to the
existence of leasehold relationship between the landholder and his/her tenants. .
2. Review and evaluate the documents or pieces of evidence submitted by the
parties, including, if any, report of threat or eviction of prospective lessees.
C. Meeting and Mediation Conference
The MARO, with the assistance of the BARC or in the absence thereof, the Barangay Council
concerned, shall jointly conduct the mediation conference on the scheduled date between the
landowner(s) and the lessee(s) for the purpose of fixing the lease rental. The MARO shall explain
in local dialect to the parties concerned the salient features of the leasehold system, particularly
on the following:
1.1 security of tenure;
1.2 rights and obligations;
1.3 grounds for dispossession;
1.4 prohibitions and limitations;
1.5 terms and conditions; and
1.6 other related information.
The Minutes of the Mediation/Meeting shall be signed by the parties concerned.
In the event any party fails to appear during the scheduled conference despite notice, the
MARO, in addition to mailing the notice at the last known address of the parties, shall cause
the posting of the notice within seven (7) days at any conspicuous place in the
barangay/municipality where the property is located. Compliance with these requirements
is sufficient for the MARO to fix the Provisional Lease Rental (PLR) based on data presented
by the other party and those gathered by him/her.
D. Determination and fixing of Rental
On the basis of the documents and/or evidence presented or as gathered, the MARO with
the assistance of the BARC, shall proceed with the computation of the lease rental applying
the formula prescribed under these Rules. SaHIEA
1. In case of agreement, the MARO shall:
1.1 assist the parties in executing the agricultural leasehold contract which shall
become immediately binding and executory upon signing thereof. The rental to be
paid as consideration for the lease of the land shall be embodied in the prescribed
leasehold agreement from which shall be drawn up in five (5) copies in the language
or dialect known to the parties or their duly authorized representatives before two
witnesses;
1.2 affirm the agreements stipulated in the leasehold contract and require the
parties to cause the notarization of the affirmed LHC by the DAR commissioned notary
public or in his absence, any notary public within the area;
1.3 register the leasehold agreement with the Municipal Treasurer and furnish
each party a copy of the registered Leasehold Agreement/Contract;
1.4 prepare a Leasehold Documentation Folder (LDF) that would contain the
contract and all relevant evidence and document gathered by the MARO or
submitted by the parties for the purpose.
1.5 transmit the LDF to the PARO for monitoring and proper annotation of the
Leasehold Contract at the back of the LOs' title. The annotation shall not hinder the
execution of the leasehold contract.
2 In case of disagreement as to the issue of existence of tenancy and fixing of lease
rental.
2.1.1 The MARO shall gather additional evidence and complete the corresponding
LDF which shall contain all information/data pertaining to the disputed matter. On the
basis of the documents submitted and gathered, determine if there exist a tenancy
relationship and compute for the lease rental and thereafter issue a Provisional Lease
Rental (PLR) within seven (7) days upon manifestation of disagreement by any of the
parties. For this purpose, the PLR and the corresponding LDF shall be submitted
immediately to the PARO for automatic review, whenever warranted, and
affirmation. Simultaneously, copies of the PLR shall be sent to the tenant and the
landholder.
2.2. The PARO shall act on the PLR within fifteen (15) days upon receipt thereof. If
no action is taken by the PARO within the 15-day period, said PLR is deemed
approved and executory and shall, henceforth, govern the tenancy relation until and
unless ordered otherwise by a court of competent jurisdiction after due hearing on
the merits.
Any party may challenge the PLR by filing an original action before the
Adjudicator where the landholding is situated within fifteen (15) days upon receipt of
a copy thereof. Provided, that where the PLR was determined by the MARO in a
situation where the landholder failed to appear at the mediation conference, the
latter shall be deemed to have waived the right to adduce evidence on the
existence of tenancy relation and production data, as the case may be.
The filing or pendency of an action before the adjudicator, shall not affect the
implementation of the PLR unless and until the PARAD rules otherwise after due
hearing on the merits. The PARAD may not enjoin the implementation of the PLR and
shall not subject the same to injunction or Temporary Restraining Order.
2.3 In case the MARO's finding and determination denies the existence of tenancy
relationship, no PLR shall be issued and the only legal remedy available to the party
alleging existence of tenancy relationship is an original action before the Adjudicator.
The annotation of the leasehold arrangement at back of the Original Copy of Certificate of Title
on file with the Register of Deeds (ROD) shall be required for landholdings where existence of
tenancy is not questioned.
VIII. SUPERVISION OF HARVEST
A. When crops are ready for harvesting during the pendency of the proceeding but before
the leasehold contract is executed by the parties, or before the issues in dispute particularly the
lease rental are resolved by the MARO, the following arrangement shall govern the supervision
of harvest:
a. 75% goes to the lessee claiming to be tenant; and
b. 25% goes to the landholder
The above proportions shall, however, be released after deducting the cost or
amount of deductible items as defined in Section III (10) of this A.O.
B. In case, however, a PLR has been issued by the MARO and the party rejects/contests the
same before the Adjudicator or request for a supervision of the intervening harvest/s, the
provisional lease rental shall govern the supervision of intervening harvest from date of issuance
until the Adjudicator rules otherwise.
IX. MONITORING AND REPORTING
All MAROs shall maintain an annually updated crop-based inventory of all tenanted landholdings
in their areas of responsibility. The inventory should reflect accurate information as to the extent
of the leasehold implementation in the area including the landholdings they have actually
covered. The updated inventory report shall be forwarded to the PARO for consolidation and
submission of appropriate report to the DARCO-BLAD, copy furnished the DARRO.
The PAROs shall ensure the conduct of periodic review of all existing leasehold contracts and the
proper adjustment thereof, if warranted, based on the changes in production, income and other
essential agricultural and transactional activities significantly affecting the lessor and the lessee
of the agricultural land. All subsequent changes in the contracts shall be properly reflected in the
LDF of every particular landholding. HaIESC
Both the PAROs and the MAROs concerned shall likewise document and consolidate all cases,
issues and concerns relating to the implementation of leasehold for submission to DAR Central
Office, attention: the Bureau of Land Acquisition and Distribution, for appropriate action and/or
proper disposition.
X. SANCTIONS
Any person who willfully prevents or obstruct the implementation or enforcement of the policies
and instructions contained herein shall be held liable in accordance with Section 74 of R.A. No.
6657.
Administrative sanctions shall be imposed on DAR personnel, without prejudice to the filing of
criminal and civil actions, who have willfully, feloniously, and/or erroneously processed leasehold
folders, and circumvented the provisions of this A.O. resulting to the dispossession or transfer of
agricultural lands to individuals who are not actual tenants under CARP.
XI. TRANSITORY PROVISIONS
Upon the effectivity of this Administrative Order, all DAR offices concerned shall undertake a
massive information dissemination campaign on leasehold system. All existing leasehold
contracts shall be reviewed and updated accordingly. Existing leasehold agreements shall be
respected provided that the agreed lease rentals do not exceed the maximum provided by law
and the other stipulations therein are not contrary to law.
All pending leasehold documentation shall be processed and acted upon in accordance with
the procedures set forth in this Order.
XII. REPEALING CLAUSE
This Order modifies and/or repeals DAR A.O. 6, S. 2003, A.O. 4, S. 1997, M.C. 11, S. 1994, A.O. 5, S.
1993, A.O. 9, S. 1991 and A.O. 4, S. 1989 and all other issuances inconsistent herewith. The
unrepealed provisions of R.A. No. 1199, as amended, R.A. No. 3844, as amended and applicable
provisions of R.A. No. 6657 are hereby adopted and made an integral part of this Administrative
Order and shall constitute as guides in the implementation of this A.O.
XIII. EFFECTIVITY
This Order shall take effect ten (10) days after its publication in two (2) newspapers of general
circulation, pursuant to Section 49 of R.A. No. 6657.
Diliman, Quezon City, March 15, 2006.
(SGD.) NASSER C. PANGANDAMAN
OIC-Secretary
Published in The Philippine Star and The Manila Times March 18, 2006.

Republic of the Philippines


DEPARTMENT of AGRARIAN REFORM
CERTIFICATION
This is to certify that Administrative Order No. 2, Series of 2006 entitled "Revised Rules and Procedures
Governing Leasehold Implementation in Tenanted Agricultural Lands" was published last Saturday, 18
March 2006 at Philippine Star and Manila Times newspapers.
Issued this 20th day of March 2006 for whatever purpose it may serve. ETDaIC

(SGD.) HUGO D. YONZON III


Director, PAS

ANNEX A
LTI-LHO
Republic of the Philippines
Department of Agrarian Reform

Diliman, Quezon City


SAMPLE COMPUTATION FOR ANNUAL LEASE RENTAL IN SUGARLANDS
(Canlubang, Laguna)
GIVEN:
Area 1 hectare
Frequency per hectare 1st (new) harvest (10 to 12 months)
1st ratoon and 2nd ratoon
(9 months to 10 months per ratoon)
Production per hectare 88.5 tons for the 1st harvest equivalent
to 86.26 piculs and 3,416 kg. of
molasses
77 tons for the 1st ratoon equivalent to
81.3 piculs and 3,191 kg. of molasses
Price per picul P569 as of 1988
P645 as of 1989
P650 as of 1990
Price of Molasses per kg. P1.00/kg as of 1988
P1.00/kg as of 1989
P1.20/kg as of 1990
COMPUTATION:
A. Compute for the net income of every agricultural year (average gross income less
allowable deductible cost).
First Agricultural Year
Gross Income
86.26 piculs x P569
per picul P49,081.94
3,416 kg. of molasses
x 1.00 kg. P3,416.00 P52,479.94
Allowable deductible cost
Cost of seeds P30/1000
Cane points at 50,000
Cane points/ha. P1,500.00
Harvesting/cutting
(P65/ton x 8.5 tons) 5,752.50
Loading and Handling/
Trucking (P75/ton x 88.5 tons) 6,637.50
Processing/milling
(32% of produce) 15,706.00 P29,596.00
Net Income 22,901.94
Second Agricultural Year (First Ratoon)
Gross Income
81.3 piculs x P645 per
picul P52,438.50
3,191 kg. of molasses
x 1.00 kg. 3,191.00 55,629.50
Less: allowable deductible cost
Cost of Seeds (if any)
Harvesting/cutting
(P65/ton x 77 tons) 5,005.00
Loading and hauling/trucking
(P75 x 77 tons) 5,775.00
Processing/milling
(32% of produce) 16,780.32 P27,560.32
Net Income 28,069.18
Note : Cost of seeds during rationing, if any, may vary
Third Agricultural Year (Second Ratoon)
Gross Income
74 piculs x P650/
picul P48,100.00
2,195 kg. of molasses
x 1.20/kg 2,634.00 P50,734.00
Less: allowable deductible cost ACcEHI
Cost of Seeds (if any)
Harvesting/cutting
(P80/ton x 68 tons) P5,440.00
Loading and hauling/
Trucking (P120/ton
X 68 tons) P8,160.00
Processing/milling
(32% of produce) P15,932.00 P25,992.00
—————— ——————
Net Income P21,742.00
Note: Cost of seeds during ratooning if any may vary:
B. Compute for the Lease Rental
First Year P22,901.94
Second Year 28,069.18
Third Year 21,742.00
——————
Total Net Income P72,713.12
Average Net Income = Total Net Income/3
= P72,713.12/3
= P24,237.706
Average Annual Lease Rental = Average Net Income x 0.25
For 1 hectare = P24,237.706 x 0.25
= 6,059.43
ANNEX B
LTI-LHO
Republic of the Philippines
Department of Agrarian Reform

Diliman, Quezon City


SAMPLE COMPUTATION FOR ANNUAL LEASE RENTAL
IN COCONUT LANDS
Given:
Area -7 hectares
No. of tree/hectare -70 to 100 coconut trees
No. of harvests/year -8 harvests
Frequency of harvest -Every 30 to 45 days
Age of coconut trees -20 to 50 years old
Buying of price -P806 per 1,000 husked nuts
Cost of labor (final product is husked nut)
A. Harvesting
Picking (pagkawin/pag-akyat) P90 per 1,000 nuts
Piling (pag-iipon) P35 per 1,000 nuts
B. Hauling/Loading
(paghakot/pagkarga) P70 per 1,000 nuts
C. Processing
Husking (pagtatapos) P80 per 1,000 nuts
COMPUTATION:
1. Get the average normal harvest and gross income of the three agricultural years immediately
before the date the leasehold relationship was established.
May-June (1st agri. Year) 3,000 nuts
July-August (2nd agri. Year) 6,000 nuts
September-October (3rd agri. Year) 4,000 nuts
Total 13,000 nuts
Average normal harvest (13,000/3) 4,333 nuts
Average Gross Income (4,333 nuts at
P806 per 1,000 nuts) 3,492.40
2. Get the average deductibles cost for the three agricultural years using the applicable
deductible items.
1st agricultural year
Picking (3,000 nuts at P90 per 1,000 nuts) P270.00
Piling (3,000 nuts at P35 per 1,000 nuts) 105.00
Hauling (3,000 nuts at P70 per 1,000 nuts) 210.00
Husking (3,000 nuts at P60 per 1,000 nuts) 180.00
–––––––
Total Cost for the 1st agricultural year 765.00
2nd agricultural year
Picking (6,000 nuts at P90 per 1,000 nuts) P540.00
Piling (6,000 nuts at P35 per 1,000 nuts) 210.00
Hauling (6,000 nuts at P70 per 1,000 nuts) 420.00
Husking (6,000 nuts at P60 per 1,000 nuts) 360.00
–––––––
Total cost for the 2nd agricultural year 1,530.00
3rd agricultural year
Picking (4,000 nuts per P90 per 1,000 nuts) P360.00
Piling (4,000 nuts at P35 per 1,000 nuts) 140.00
Hauling (4,000 nuts at P70 per 1,000 nuts) 280.00
Husking (4,000 nuts at P60 per 1,000 nuts) 240.00
————
Total cost for the 3rd agricultural year 1,020.00
Average deductible cost
(765 + P1,353 + P1,020)/3 1,105.00 1,105.00
3. Compute for the net income
Net Income (Average gross income less average
Deductible costs or P3,492.40-P1,105.00) 2,387.40
4. Compute the lease rental for the
7 hectares per harvest
(25% of P2,387.40) P596.85
Lease rental for one year (rental per
Harvest multiplied by the no. of
Harvest per year or P596.85 x 8
Harvests) P4,774.80
Form No. _______
Republic of the Philippines
Department of Agrarian Reform

AGRICULTURAL LEASEHOLD CONTRACT


KNOW ALL MEN BY THESE PRESENTS:
This Agricultural Leasehold Contract, made and entered into by and between: DCSETa
The AGRICULTURAL LESSOR, __________________________________,
Filipino, of legal age, resident of_________________
____________________________.
And
The AGRICULTURAL LESSEE, _______________________________, Filipino of
legal age, resident of _____________________________________________.
WITNESSETH:
1. That this Contract shall be governed by the provisions of Republic Act Nos. 6657, 3844 and other
related laws, rules and regulations issued by the Department of Agrarian Reform and shall strictly
conform to the conditional requirement embodied in Administrative Order No. __________, Series of
_______.
2. That this Contract shall bind both parties to fundamentally carry out the requirements
necessitated by agricultural leasehold relationship and other terms and conditions stipulated to
maintain agricultural production over a farm lot located
in Sitio ____________________, Barrio______________________, Municipality of _______________________,
Province of ____________________, owned possessed by the AGRICULTURAL LESSOR and covered by
Transfer Certification Title No. _____________, Tax Declaration No. ________________, Plan No.
_____________, which landholding, consisting of _________________ hectares, is bounded on the:
North by the land owned or cultivated by:
___________________________;
South by the land owned and cultivated by:
___________________________;
East by the land owned or cultivated by:
___________________________;
West by the land owned or cultivated by:
___________________________;
3. That this Contract shall commence and continue every agricultural year thereafter taking into
consideration the existing agricultural leasehold relationship of the parties until the same has been
terminated or modified in accordance with law and applicable provisions of Adm. Order No. ________,
Series of 200 ________;
4. That this Contract upon approval by the DAR, decrees the leasehold rental for said landholding
in the amount of _____________________ (P___________) per agricultural year or _____________ (if kind,
indicate applicable unit of measure) of _______________ (kind of crop) _________________ (variety) or in
combination of cash and kind schemes whichever is preferable to both parties; (if principal crop does
not jive with the auxiliary crop, a separate lease rental shall be provided, as the case may be.)
5. That this Contract mandates that the AGRICULTURAL LESSEE shall pay the required lease rental
which shall not be more than the equivalent of 25% of the average normal net harvest based on the
computations made during the mediation/meeting conference as indicated in the attached Lease
Rental Worksheet (LAD-LHO Form No. 8), which forms an integral part of the Agreement; DTCAES
6. That the AGRICULTURAL LESSEE or his/her duly authorized representative shall pay the leasehold
rental at ___________________ (specified place as agreed upon), every ____________________ (duration);
7. That this Contract sanctions the obligation of the AGRICULTURAL LESSEE to pay the lease rental
due of a particular agricultural year in spite of crop failure to the extent of seventy-five percent (75%)
or more as a result of fortuitous event. However, such non-payment of the rental due shall not be
ground for the dispossession of the agricultural lessee but the obligation to pay the said lease rental
due of that particular year is not extinguished.
8. That this Contract requires both parties to explicitly refrain from doing or committing prohibited
acts, such as:
8.1 That the AGRICULTURAL LESSEE shall not employ a sub-lessee on his/her
landholding: Provided, that in case of illness or temporary incapacity, he/she may employ
laborers whose services on his/her landholding shall be paid on his/her landholding shall be paid
on his/her account;
8.2 That it shall be unlawful for the AGRICULTURAL LESSEE to mortgage/sell his/her leasehold
rights over the landholding;
8.3 That the AGRICULTURAL LESSEE shall not cause undue erosion of the soil or impair its fertility;
8.4 That the AGRICULTURAL LESSOR shall not, without the AGRICULTURAL LESSEE's written
consent, destroy crops and trees in the farmholding.
9. That this Contract shall be deemed in total compliance with the policies and governing
principles embodied in existing laws and any future disagreements or violations committed by either
party shall be settled amicably through the mediation procedures laid down in the guideline;
10. That any change or modification of the terms and conditions of this agreement, or sale or
transfer of the land to another shall not in any way affect the right of the AGRICULTURAL LESSEE to the
peaceful submission and cultivation of the landholding;
11. That this Contract shall be registered with the Office of the Municipal Treasurer pursuant to DAR-
DOJ Memorandum Circular No. 1, Series of 1995 annotated at the back of the Certificate of Title on
file in the Register of Deeds Office.
IN WITNESS WHEREOF, the parties hereto signed this Agreement this ______ day of ___________, 200 _____,
in the Municipality of __________________, Province of ______________________, Philippines.
SIGNED BY:
_________________________ ________________________
Agricultural Lessor Agricultural Lessee
_________________________ ________________________
Witness Witness
_________________________ ________________________
Date Date
Affirmed by:
_________________________ ________________________
Municipal Agrarian Reform Officer Date
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
PROVINCE OF ________________) S.S
MUNICIPALITY OF ____________)
BEFORE ME, this day of _________________________, 20 ________, in the Municipality of
______________________, Province of _______________________ personally appeared in the following
persons:
Name Community Certificate Date Issued Place Issued
No.
_______________ _______________ _______________ ____________
_______________ _______________ _______________ ____________
_______________ _______________ _______________ ____________
_______________ _______________ _______________ ____________
Known to me to be the same persons who executed the foregoing AGRICULTURAL LEASEHOLD
CONTRACT and they acknowledged to me that the same is their voluntary act and deed.
This instrument, consisting of ___________ pages, including the page on which this acknowledgment is
written, has been signed on the left margin of each and every page thereof by
_____________________________________ and ________________ and their witness and sealed with my
notarial seal. CAcEaS

Municipal Trial Judge/Duly Authorized


DAR Lawyer
Note No. _______;
Page No. _______;
Book No. _______;
Series of ________;
Distribution of Copies:
0-Lessor
1-Lessee
2-DARPO
3-DARMO

Section 65. Conversion of Lands. — After the lapse of five (5) years from its award, when the land ceases
to be economically feasible and sound for agricultural purposes, or the locality has become urbanized
and the land will have a greater economic value for residential, commercial or industrial purposes, the
DAR, upon application of the beneficiary or the landowner, with due notice to the affected parties,
and subject to existing laws, may authorize the reclassification or conversion of the land and its
disposition: provided, that the beneficiary shall have fully paid his obligation.

JOSE LUIS ROS V DAR

Petitioners are the owners/developers of several parcels of land located in Arpili, Balamban, Cebu. By
virtue of Municipal Ordinance No. 101 passed by the Municipal Council of Balamban, Cebu, these
lands were reclassified as industrial lands.[1] On 03 April 1995, the Provincial Board of Cebu approved
Balambans land use plan and adopted en toto Balambans Municipal Ordinance No. 101 with the
passage of Resolution No. 836-95 and Provincial Ordinance No. 95-8, respectively.[2] As part of their
preparation for the development of the subject lands as an industrial park, petitioners secured all the
necessary permits and appropriate government certifications.[3]

Despite these permits and certifications, petitioner Matthias Mendezona received a letter from Mr. Jose
Llames, Director of the Department of Agrarian Reform (DAR) Regional Office for Region 7, informing
him that the DAR was disallowing the conversion of the subject lands for industrial use and directed
him to cease and desist from further developments on the land to avoid the incurrence of civil and
criminal liabilities.[4]
Petitioners were thus constrained to file with the Regional Trial Court (RTC) of Toledo City a Complaint
dated 29 July 1996 for Injunction with Application for Temporary Restraining Order and a Writ of
Preliminary Injunction, docketed as Civil Case No. T-590.[5] In an order[6] dated 12 August 1996, the
RTC, ruling that it is the DAR which has jurisdiction, dismissed the Complaint for lack of jurisdiction.[7] It
justified the dismissal in this wise:

A perusal of Section 20 of the Local Government Code expressly provides that the Municipalities
through an Ordinance by the Sanggunian may authorize the reclassification of the agricultural land
within their area into non-agricultural. Paragraph (e) of the aforesaid Section, provides further: that
nothing in this Section shall be construed as repealing or modifying in any manner the provision of
Republic Act 6657. In an opinion of the Secretary of Justice, quoted: With respect of (sic) conversion of
agricultural land to non-agricultural uses the authority of the DAR to approve the same may be exercise
(sic) only from the date of the effectivity of the Agrarian Reform Law on June 15, 1988. It appears that
the petitioners had applied for conversion on June 13, 1995 and therefore the petitioner (sic) are
estopped from questioning the authority and jurisdiction of the Department of Agrarian Reform. The
application having been filed after June 15, 1988, the reclassification by the Municipal Council of
Balamban was just a step in the conversion of the aforestated lands according to its purpose. Executive
Order No. 129-A, Section 5, The Department shall be responsible for implementing Comprehensive
Agrarian Reform and for such purpose it is authorized to (J) approve or disapprove the conversion,
restructuring or readjustment of agricultural land into non-agricultural uses. Said Executive Order
amended Section 36 of Republic Act No. 3644 which clearly mandates that the DAR Secretary (sic)
approve or disapprove conversion are not impliedly repealed. In fact, under Section 75 of Republic
Act 6657 the above laws and other laws not inconsistent of (sic) this act shall have suppletory effect.
Further, Section 68 of Republic Act 6657 provides: No injunction, restraining order, prohibition or
mandamus shall be issued by the lower court against the Department of Agrarian Reform, DENR and
Department of Justice in their implementation of the program. With this provision, it is therefore clear
(sic) when there is conflict of laws determining whether the Department of Agrarian Reform has been
exclusively empowered by law to approve land conversion after June 15, 1988 and (sic) the final ruling
falls only with the Supreme Court or Office of the President.

WHEREFORE, in view of the foregoing, the Application for Restraining Order is hereby ordered DENIED
and the main case is DISMISSED, this Court having no jurisdiction over the same.[8]

In an order dated 18 September 1996, the trial court denied the motion for reconsideration filed by the
petitioners.[9] Petitioners filed before this Court a Petition for Review on Certiorari with application for
Temporary Restraining Order and Writ of Preliminary Injunction.[10] In a resolution[11] dated 11
November 1996, this Court referred the petition to the Court of Appeals.[12] Petitioners moved for a
reconsideration of the said resolution but the same was denied in a resolution dated 27 January
1997.[13]

At the Court of Appeals, the public respondents were ordered[14] to file their Comments on the
petition. Two sets of comments from the public respondents, one from the Department of Agrarian
Reform Provincial Office[15] and another from the Office of the Solicitor General,[16] were submitted,
to which petitioners filed their Consolidated Reply.[17]

On 02 December 1997, the Court of Appeals rendered a decision[18] affirming the Order of Dismissal
issued by the RTC.[19] A motion for reconsideration filed by the petitioners was denied in a resolution
dated 30 January 1998.[20]

Hence, this petition.

The following issues[21] are raised by the petitioners for resolution:

(a) Whether or not the reclassification of the subject lands to industrial use by the Municipality of
Balamban, Cebu pursuant to its authority under Section 20(a) of Republic Act No. 7160 or the Local
Government Code of 1991 (the LGC) has the effect of taking such lands out of the coverage of the
CARL and beyond the jurisdiction of the DAR;

(b) Whether or not the Complaint for Injunction may be dismissed under the doctrine of primary
jurisdiction;

(c) Whether or not the Complaint for Injunction is an appropriate remedy against the order of the DAR
enjoining development works on the subject lands;

(d) Whether or not the Regional Trial Court of Toledo City had authority to issue a writ of injunction
against the DAR.

In sum, petitioners are of the view that local governments have the power to reclassify portions of their
agricultural lands, subject to the conditions set forth in Section 20[22][23]of the Local Government
Code. According to them, if the agricultural land sought to be reclassified by the local government is
one which has already been brought under the coverage of the Comprehensive Agrarian Reform Law
(CARL) and/or which has been distributed to agrarian reform beneficiaries, then such reclassification
must be confirmed by the DAR pursuant to its authority under Section 6522 of the CARL, in order for the
reclassification to become effective. If, however, the land sought to be reclassified is not covered by
the CARL and not distributed to agrarian reform beneficiaries, then no confirmation from the DAR is
necessary in order for the reclassification to become effective as such case would not fall within the
DARs conversion authority. Stated otherwise, Section 65 of the CARL does not, in all cases, grant the
DAR absolute, sweeping and all-encompassing power to approve or disapprove reclassifications or
conversions of all agricultural lands. Said section only grants the DAR exclusive authority to approve or
disapprove conversions of agricultural lands which have already been brought under the coverage
of the CARL and which have already been distributed to farmer beneficiaries.

The petition lacks merit.

After the passage of Republic Act No. 6657, otherwise known as Comprehensive Agrarian Reform
Program, agricultural lands, though reclassified, have to go through the process of conversion,
jurisdiction over which is vested in the DAR. However, agricultural lands already reclassified before the
effectivity of Rep. Act No. 6657 are exempted from conversion.

Department of Justice Opinion No. 44, Series of 1990, provides:

. . . True, the DARs express power over land use conversion is limited to cases in which agricultural lands
already awarded have, after five years, ceased to be economically feasible and sound for agricultural
purposes, or the locality has become urbanized and the land will have a greater economic value for
residential, commercial or industrial purposes. But to suggest that these are the only instances when
the DAR can require conversion clearances would open a loophole in R.A. No. 6657, which every
landowner may use to evade compliance with the agrarian reform program. Hence, it should logically
follow from the said departments express duty and function to execute and enforce the said statute
that any reclassification of a private land as a residential, commercial or industrial property should first
be cleared by the DAR.

The requirement that agricultural lands must go through the process of conversion despite having
undergone reclassification was underscored in the case of Alarcon v. Court of Appeals,[24] where it
was held that reclassification of land does not suffice:

In the case at bar, there is no final order of conversion. The subject landholding was merely reclassified.
Conversion is different from reclassification. Conversion is the act of changing the current use of a
piece of agricultural land into some other use as approved by the Department of Agrarian Reform.
Reclassification, on the other hand, is the act of specifying how agricultural lands shall be utilized for
non-agricultural uses such as residential, industrial, commercial, as embodied in the land use plan,
subject to the requirements and procedure for land use conversion. Accordingly, a mere
reclassification of agricultural land does not automatically allow a landowner to change its use and
thus cause the ejectment of the tenants. He has to undergo the process of conversion before he is
permitted to use the agricultural land for other purposes.

Rep. Act No. 6657 took effect on 15 June 1988. Municipal Ordinance No. 101 of Balamban, Cebu,
which reclassified the subject lands, was passed on 25 March 1992, and Provincial Ordinance No. 95-8
of the Provincial Board of Cebu, which adopted Municipal Ordinance No. 101, was passed on 03 April
1995, long after Rep. Act No. 6657 has taken effect. Section 4 of Rep. Act No. 6657 provides:

SEC. 4. Scope. The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial
arrangement and commodity produced, all public and private agricultural lands as provided in
Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable
for agriculture.
...

(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised
or that can be raised thereon.

To further clarify any doubt on its authority, the DAR issued Administrative Order No. 12 dated October
1994 which reads:

Administrative Order No. 12

Series of 1994

SUBJECT: CONSOLIDATED AND REVISED RULES AND PROCEDURES GOVERNING CONVERSION OF


ARICULTURAL LANDS TO NON-AGRICULTURAL USES

I. PREFATORY STATEMENT

The guiding principles on land use conversion is to preserve prime agricultural lands. On the other hand,
conversion of agricultural lands, when coinciding with the objectives of the Comprehensive Agrarian
Reform Law to promote social justice, industrialization, and the optimum use of land as a national
resource for public welfare, shall be pursued in a speedy and judicious manner.

To rationalize these principles, and by virtue of Republic Act (R.A.) No. 3844, as amended, Presidential
Decree (P.D.) No. 27, P.D. No. 946, Executive Order (E.O.) No. 129-A and R.A. No. 6657, the Department
of Agrarian Reform (DAR) has issued several policy guidelines to regulate land use conversion. This
Administrative Order consolidates and revises all existing implementing guidelines issued by the DAR,
taking into consideration, other Presidential issuances and national policies related to land use
conversion.
II. LEGAL MANDATE

A. The Department of Agrarian Reform (DAR) is mandated to approve or disapprove


applications for conversion, restructuring or readjustment of agricultural lands into non-agricultural
uses, pursuant to Section 4(i) of Executive Order No. 129-A, Series of 1987.

B. Section 5(i) of E.O. No. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve
or disapprove applications for conversion of agricultural lands for residential, commercial, industrial,
and other land uses.

C. Section 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law
of 1988, likewise empowers the DAR to authorize under certain conditions, the reclassification or
conversion of agricultural lands.

D. Section 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President,
provides that action on applications for land use conversion on individual landholdings shall remain as
the responsibility of the DAR, which shall utilize as its primary reference, documents on the
comprehensive land use plans and accompanying ordinances passed upon and approved by the
local government units concerned, together with the National Land Use Policy, pursuant to R.A. No.
6657 and E.O. No. 129-A.

III. DEFINITION OF TERMS

A. Agricultural land refers to land devoted to agricultural activity and not classified as mineral, forest,
residential, commercial or industrial land (Section 3[c], R.A. No. 6657).

B. Conversion is the act of changing the current use of a piece of agricultural land into some other use.

C. Reclassification of agricultural lands is the act of specifying how agricultural lands shall be utilized
for non-agricultural uses such as residential, industrial, commercial, as embodied in the land use plan.
It also includes the reversion of non-agricultural lands to agricultural use.
V. COVERAGE

These rules shall cover all private agricultural lands as defined herein regardless of tenurial arrangement
and commodity produced. It shall also include agricultural lands reclassified by LGUs into non-
agricultural uses, after June 15, 1988, pursuant to Memorandum Circular (M.C.) No. 54, Series of 1993
of the Office of the President and those proposed to be used for livestock, poultry and swine raising as
provided in DAR Administrative Order No. 9, Series of 1993.

In the case of Advincula-Velasquez v. Court of Appeals,[25] we held:

Our ruling in the Natalia case was reiterated in National Housing Authority v. Allarde (318 SCRA 22
[1999]).

The Court of Appeals reliance on DOJ Opinion No. 44, Series of 1990, is in order. In the said opinion, the
Secretary of Justice declared, viz:

Based on the foregoing premises, we reiterate the view that with respect to conversions of agricultural
lands covered by R.A. No. 6657 to non-agricultural uses, the authority of DAR to approve such
conversions may be exercised from the date of the laws effectivity on June 15, 1988. This conclusion is
based on a liberal interpretation of R.A. No. 6657 in the light of DARs mandate and extensive coverage
of the agrarian reform program.

Following the DOJ opinion, the DAR issued Administrative Order No. 6, Series of 1994, stating that lands
already classified as non-agricultural before the enactment of Rep. Act No. 6657 no longer needed
any conversion clearance:

I. Prefatory Statement

In order to streamline the issuance of exemption clearances, based on DOJ Opinion No. 44, the
following guidelines are being issued for the guidance of the DAR and the public in general.

II. Legal Basis

Sec. 3(c) of RA 6657 states that agricultural lands refers to the land devoted to agricultural activity as
defined in this act and not classified as mineral, forest, residential, commercial or industrial land.
Department of Justice Opinion No. 44, series of 1990 has ruled that, with respect to the conversion of
agricultural lands covered by RA No. 6657 to non-agricultural uses, the authority of DAR to approve
such conversion may be exercised from the date of its effectivity, on June 15, 1988. Thus, all lands that
are already classified as commercial, industrial, or residential before 15 June 1988 no longer need any
conversion clearance.

The authority of the DAR to approve conversions of agricultural lands covered by Rep. Act No. 6657 to
non-agricultural uses has not been pierced by the passage of the Local Government Code. The Code
explicitly provides[26] that nothing in this section shall be construed as repealing or modifying in any
manner the provisions of Rep. Act No. 6657.

It being settled that jurisdiction over conversion of land is vested in the DAR, the complaint for injunction
was correctly dismissed by the trial and appellate courts under the doctrine of primary jurisdiction. This
Court, in Bautista v. Mag-isa Vda. De Villena,[27] found occasion to reiterate the doctrine of primary
jurisdiction

The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which
jurisdiction has initially been lodged with an administrative body of special competence. For agrarian
reform cases, jurisdiction is vested in the Department of Agrarian Reform (DAR); more specifically, in
the Department of Agrarian Reform Adjudication Board (DARAB).

Executive Order 229 vested the DAR with (1) quasi-judicial powers to determine and adjudicate
agrarian reform matters; and (2) jurisdiction over all matters involving the implementation of agrarian
reform, except those falling under the exclusive original jurisdiction of the Department of Agriculture
and the Department of Environment and Natural Resources. This law divested the regional trial courts
of their general jurisdiction to try agrarian reform matters.

Under Republic Act 6657, the DAR retains jurisdiction over all agrarian reform matters. The pertinent
provision reads:

Section 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with the primary jurisdiction to
determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over
all matters involving the implementation of agrarian reform, except those falling under the exclusive
jurisdiction of the Department of Agriculture and the Department of Environment and Natural
Resources.
It shall not be bound by technical rules of procedure and evidence but shall proceed to hear and
decide all cases, disputes or controversies in a most expeditious manner, employing all reasonable
means to ascertain the facts of every case in accordance with justice and equity and the merits of the
case. Toward this end, it shall adopt a uniform rule of procedure to achieve a just, expeditious and
inexpensive determination of every action or proceeding before it. . . .

Finally, the third and fourth issues which may be summed up into whether or not an injunction is the
appropriate remedy against the order of the DAR enjoining petitioners in developing the subject land,
we rule in the negative. Section 68 of Rep. Act No. 6657 provides:

SEC. 68. Immunity of Government Agencies from Undue Interference. No injunction, restraining order,
prohibition or mandamus shall be issued by the lower courts against the Department of Agrarian
Reform (DAR), the Department of Agriculture (DA), the Department of Environment and Natural
Resources (DENR), and the Department of Justice (DOJ) in their implementation of the program.

WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The decision of the
Court of Appeals in CA-G.R. SP No. 42666 dated 02 December 1997 affirming the order dated 12 August
1996 of the Regional Trial Court of Toledo City, Branch 29, in Civil Case No. T-590 is AFFIRMED. Costs
against petitioners.

CREBA V SEX OF AGRARIAN REFORM

This case is a Petition for Certiorari and Prohibition (with application for temporary restraining order
and/or writ of preliminary injunction) under Rule 65 of the 1997 Revised Rules of Civil Procedure, filed
by herein petitioner Chamber of Real Estate and Builders Associations, Inc. (CREBA) seeking to nullify
and prohibit the enforcement of Department of Agrarian Reform (DAR) Administrative Order (AO) No.
01-02, as amended by DAR AO No. 05-07,1 and DAR Memorandum No. 88,2 for having been issued by
the Secretary of Agrarian Reform with grave abuse of discretion amounting to lack or excess of
jurisdiction as some provisions of the aforesaid administrative issuances are illegal and unconstitutional.
Petitioner CREBA, a private non-stock, non-profit corporation duly organized and existing under the
laws of the Republic of the Philippines, is the umbrella organization of some 3,500 private corporations,
partnerships, single proprietorships and individuals directly or indirectly involved in land and housing
development, building and infrastructure construction, materials production and supply, and services
in the various related fields of engineering, architecture, community planning and development
financing. The Secretary of Agrarian Reform is named respondent as he is the duly appointive head of
the DAR whose administrative issuances are the subject of this petition.

The Antecedent Facts

The Secretary of Agrarian Reform issued, on 29 October 1997, DAR AO No. 07-97,3 entitled "Omnibus
Rules and Procedures Governing Conversion of Agricultural Lands to Non-Agricultural Uses," which
consolidated all existing implementing guidelines related to land use conversion. The aforesaid rules
embraced all private agricultural lands regardless of tenurial arrangement and commodity produced,
and all untitled agricultural lands and agricultural lands reclassified by Local Government Units (LGUs)
into non-agricultural uses after 15 June 1988.

Subsequently, on 30 March 1999, the Secretary of Agrarian Reform issued DAR AO No. 01-99,4 entitled
"Revised Rules and Regulations on the Conversion of Agricultural Lands to Non-agricultural Uses,"
amending and updating the previous rules on land use conversion. Its coverage includes the following
agricultural lands, to wit: (1) those to be converted to residential, commercial, industrial, institutional
and other non-agricultural purposes; (2) those to be devoted to another type of agricultural activity
such as livestock, poultry, and fishpond ─ the effect of which is to exempt the land from the
Comprehensive Agrarian Reform Program (CARP) coverage; (3) those to be converted to non-
agricultural use other than that previously authorized; and (4) those reclassified to residential,
commercial, industrial, or other non-agricultural uses on or after the effectivity of Republic Act No.
66575 on 15 June 1988 pursuant to Section 206 of Republic Act No. 71607 and other pertinent laws and
regulations, and are to be converted to such uses.

On 28 February 2002, the Secretary of Agrarian Reform issued another Administrative Order, i.e., DAR
AO No. 01-02, entitled "2002 Comprehensive Rules on Land Use Conversion," which further amended
DAR AO No. 07-97 and DAR AO No. 01-99, and repealed all issuances inconsistent therewith. The
aforesaid DAR AO No. 01-02 covers all applications for conversion from agricultural to non-agricultural
uses or to another agricultural use.

Thereafter, on 2 August 2007, the Secretary of Agrarian Reform amended certain provisions8 of DAR
AO No. 01-02 by formulating DAR AO No. 05-07, particularly addressing land conversion in time of
exigencies and calamities.

To address the unabated conversion of prime agricultural lands for real estate development, the
Secretary of Agrarian Reform further issued Memorandum No. 88 on 15 April 2008, which temporarily
suspended the processing and approval of all land use conversion applications.

By reason thereof, petitioner claims that there is an actual slow down of housing projects, which, in
turn, aggravated the housing shortage, unemployment and illegal squatting problems to the
substantial prejudice not only of the petitioner and its members but more so of the whole nation.

Hence, this petition.


The Issues

In its Memorandum, petitioner posits the following issues:

I.

WHETHER THE DAR SECRETARY HAS JURISDICTION OVER LANDS THAT HAVE BEEN RECLASSIFIED AS
RESIDENTIAL, COMMERCIAL, INDUSTRIAL, OR FOR OTHER NON-AGRICULTURAL USES.

II.

WHETHER THE DAR SECRETARY ACTED IN EXCESS OF HIS JURISDICTION AND GRAVELY ABUSED HIS
DISCRETION BY ISSUING AND ENFORCING [DAR AO NO. 01-02, AS AMENDED] WHICH SEEK TO REGULATE
RECLASSIFIED LANDS.

III.

WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE LOCAL AUTONOMY OF LOCAL
GOVERNMENT UNITS.

IV.

WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE DUE PROCESS AND EQUAL PROTECTION
CLAUSE[S] OF THE CONSTITUTION.

V.

WHETHER MEMORANDUM NO. 88 IS A VALID EXERCISE OF POLICE POWER.9

The subject of the submission that the DAR Secretary gravely abused his discretion is AO No. 01-02, as
amended, which states:

Section 3. Applicability of Rules. – These guidelines shall apply to all applications for conversion, from
agricultural to non-agricultural uses or to another agricultural use, such as:

xxxx

3.4 Conversion of agricultural lands or areas that have been reclassified by the LGU or by way of a
Presidential Proclamation, to residential, commercial, industrial, or other non-agricultural uses on or
after the effectivity of RA 6657 on 15 June 1988, x x x. [Emphasis supplied].
Petitioner holds that under Republic Act No. 6657 and Republic Act No. 8435,10 the term agricultural
lands refers to "lands devoted to or suitable for the cultivation of the soil, planting of crops, growing of
fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm products, and other
farm activities and practices performed by a farmer in conjunction with such farming operations done
by a person whether natural or juridical, and not classified by the law as mineral, forest, residential,
commercial or industrial land." When the Secretary of Agrarian Reform, however, issued DAR AO No.
01-02, as amended, he included in the definition of agricultural lands "lands not reclassified as
residential, commercial, industrial or other non-agricultural uses before 15 June 1988." In effect, lands
reclassified from agricultural to residential, commercial, industrial, or other non-agricultural uses after
15 June 1988 are considered to be agricultural lands for purposes of conversion, redistribution, or
otherwise. In so doing, petitioner avows that the Secretary of Agrarian Reform acted without jurisdiction
as he has no authority to expand or enlarge the legal signification of the term agricultural lands through
DAR AO No. 01-02. Being a mere administrative issuance, it must conform to the statute it seeks to
implement, i.e., Republic Act No. 6657, or to the Constitution, otherwise, its validity or constitutionality
may be questioned.

In the same breath, petitioner contends that DAR AO No. 01-02, as amended, was made in violation
of Section 6511 of Republic Act No. 6657 because it covers all applications for conversion from
agricultural to non-agricultural uses or to other agricultural uses, such as the conversion of agricultural
lands or areas that have been reclassified by the LGUs or by way of Presidential Proclamations, to
residential, commercial, industrial or other non-agricultural uses on or after 15 June 1988. According to
petitioner, there is nothing in Section 65 of Republic Act No. 6657 or in any other provision of law that
confers to the DAR the jurisdiction or authority to require that non-awarded lands or reclassified lands
be submitted to its conversion authority. Thus, in issuing and enforcing DAR AO No. 01-02, as amended,
the Secretary of Agrarian Reform acted with grave abuse of discretion amounting to lack or excess of
jurisdiction.

Petitioner further asseverates that Section 2.19,12 Article I of DAR AO No. 01-02, as amended, making
reclassification of agricultural lands subject to the requirements and procedure for land use conversion,
violates Section 20 of Republic Act No. 7160, because it was not provided therein that reclassification
by LGUs shall be subject to conversion procedures or requirements, or that the DAR’s approval or
clearance must be secured to effect reclassification. The said Section 2.19 of DAR AO No. 01-02, as
amended, also contravenes the constitutional mandate on local autonomy under Section 25,13 Article
II and Section 2,14 Article X of the 1987 Philippine Constitution.

Petitioner similarly avers that the promulgation and enforcement of DAR AO No. 01-02, as amended,
constitute deprivation of liberty and property without due process of law. There is deprivation of liberty
and property without due process of law because under DAR AO No. 01-02, as amended, lands that
are not within DAR’s jurisdiction are unjustly, arbitrarily and oppressively prohibited or restricted from
legitimate use on pain of administrative and criminal penalties. More so, there is discrimination and
violation of the equal protection clause of the Constitution because the aforesaid administrative order
is patently biased in favor of the peasantry at the expense of all other sectors of society.

As its final argument, petitioner avows that DAR Memorandum No. 88 is not a valid exercise of police
power for it is the prerogative of the legislature and that it is unconstitutional because it suspended the
land use conversion without any basis.

The Court’s Ruling

This petition must be dismissed.


Primarily, although this Court, the Court of Appeals and the Regional Trial Courts have concurrent
jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court
forum.15 In Heirs of Bertuldo Hinog v. Melicor,16 citing People v. Cuaresma,17 this Court made the
following pronouncements:

This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court with
Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not, however, to
be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice
of the court to which application therefor will be directed. There is after all a hierarchy of courts. That
hierarchy is determinative of the venue of appeals, and also serves as a general determinant of the
appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy
most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior")
courts should be filed with the Regional Trial Court, and those against the latter, with the Court of
Appeals. A direct invocation of the Supreme Court’s original jurisdiction to issue these writs should be
allowed only when there are special and important reasons therefor, clearly and specifically set out in
the petition. This is [an] established policy. It is a policy necessary to prevent inordinate demands upon
the Court’s time and attention which are better devoted to those matters within its exclusive jurisdiction,
and to prevent further over-crowding of the Court’s docket.18 (Emphasis supplied.)

The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this Court;
and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the adjudication of
cases, which in some instances had to be remanded or referred to the lower court as the proper forum
under the rules of procedure, or as better equipped to resolve the issues because this Court is not a
trier of facts.19

This Court thus reaffirms the judicial policy that it will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts, and exceptional and compelling
circumstances, such as cases of national interest and of serious implications, justify the availment of
the extraordinary remedy of writ of certiorari, calling for the exercise of its primary jurisdiction.20

Exceptional and compelling circumstances were held present in the following cases: (a) Chavez v.
Romulo,21 on citizens’ right to bear arms; (b) Government of [the] United States of America v. Hon.
Purganan,22 on bail in extradition proceedings; (c) Commission on Elections v. Judge Quijano-
Padilla,23 on government contract involving modernization and computerization of voters’ registration
list; (d) Buklod ng Kawaning EIIB v. Hon. Sec. Zamora,24 on status and existence of a public office; and
(e) Hon. Fortich v. Hon. Corona,25 on the so-called "Win-Win Resolution" of the Office of the President
which modified the approval of the conversion to agro-industrial area.26

In the case at bench, petitioner failed to specifically and sufficiently set forth special and important
reasons to justify direct recourse to this Court and why this Court should give due course to this petition
in the first instance, hereby failing to fulfill the conditions set forth in Heirs of Bertuldo Hinog v. Melicor.27
The present petition should have been initially filed in the Court of Appeals in strict observance of the
doctrine on the hierarchy of courts. Failure to do so is sufficient cause for the dismissal of this petition.

Moreover, although the instant petition is styled as a Petition for Certiorari, in essence, it seeks the
declaration by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as
amended, and Memorandum No. 88. It, thus, partakes of the nature of a Petition for Declaratory Relief
over which this Court has only appellate, not original, jurisdiction.28 Section 5, Article VIII of the 1987
Philippine Constitution provides:
Sec. 5. The Supreme Court shall have the following powers:

(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls,
and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.

(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of Court may
provide, final judgments and orders of lower courts in:

(a) All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in
question. (Emphasis supplied.)

With that, this Petition must necessarily fail because this Court does not have original jurisdiction over a
Petition for Declaratory Relief even if only questions of law are involved.

Even if the petitioner has properly observed the doctrine of judicial hierarchy, this Petition is still
dismissible.

The special civil action for certiorari is intended for the correction of errors of jurisdiction only or grave
abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only to keep the
inferior court within the parameters of its jurisdiction or to prevent it from committing such a grave
abuse of discretion amounting to lack or excess of jurisdiction.29

The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed against a
tribunal, a board, or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board, or
officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy
in the ordinary course of law.30

Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within the
general power of a tribunal, board or officer, is not authorized and invalid with respect to the particular
proceeding, because the conditions which alone authorize the exercise of the general power in
respect of it are wanting.31 Without jurisdiction means lack or want of legal power, right or authority to
hear and determine a cause or causes, considered either in general or with reference to a particular
matter. It means lack of power to exercise authority.32 Grave abuse of discretion implies such
capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in other words,
where the power is exercised in an arbitrary manner by reason of passion, prejudice, or personal
hostility, and it must be so patent or gross as to amount to an evasion of a positive duty or to a virtual
refusal to perform the duty enjoined or to act at all in contemplation of law.33

In the case before this Court, the petitioner fails to meet the above-mentioned requisites for the proper
invocation of a Petition for Certiorari under Rule 65. The Secretary of Agrarian Reform in issuing the
assailed DAR AO No. 01-02, as amended, as well as Memorandum No. 88 did so in accordance with
his mandate to implement the land use conversion provisions of Republic Act No. 6657. In the process,
he neither acted in any judicial or quasi-judicial capacity nor assumed unto himself any performance
of judicial or quasi-judicial prerogative. A Petition for Certiorari is a special civil action that may be
invoked only against a tribunal, board, or officer exercising judicial functions. Section 1, Rule 65 of the
1997 Revised Rules of Civil Procedure is explicit on this matter, viz.:

SECTION 1. Petition for certiorari. – When any tribunal, board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition
in the proper court, alleging the facts with certainty and praying that judgment must be rendered
annulling or modifying the proceedings of such tribunal, board or officer.1avvphi1

A tribunal, board, or officer is said to be exercising judicial function where it has the power to determine
what the law is and what the legal rights of the parties are, and then undertakes to determine these
questions and adjudicate upon the rights of the parties. Quasi-judicial function, on the other hand, is
"a term which applies to the actions, discretion, etc., of public administrative officers or bodies x x x
required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions
from them as a basis for their official action and to exercise discretion of a judicial nature."34

Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there
be a law that gives rise to some specific rights of persons or property under which adverse claims to
such rights are made, and the controversy ensuing therefrom is brought before a tribunal, board, or
officer clothed with power and authority to determine the law and adjudicate the respective rights of
the contending parties.35

The Secretary of Agrarian Reform does not fall within the ambit of a tribunal, board, or officer exercising
judicial or quasi-judicial functions. The issuance and enforcement by the Secretary of Agrarian Reform
of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88 were done in the
exercise of his quasi-legislative and administrative functions and not of judicial or quasi-judicial
functions. In issuing the aforesaid administrative issuances, the Secretary of Agrarian Reform never
made any adjudication of rights of the parties. As such, it can never be said that the Secretary of
Agrarian Reform had acted with grave abuse of discretion amounting to lack or excess of jurisdiction
in issuing and enforcing DAR AO No. 01-02, as amended, and Memorandum No. 88 for he never
exercised any judicial or quasi-judicial functions but merely his quasi-legislative and administrative
functions.

Furthermore, as this Court has previously discussed, the instant petition in essence seeks the declaration
by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as amended,
and Memorandum No. 88. Thus, the adequate and proper remedy for the petitioner therefor is to file
a Petition for Declaratory Relief, which this Court has only appellate and not original jurisdiction. It is
beyond the province of certiorari to declare the aforesaid administrative issuances unconstitutional
and illegal because certiorari is confined only to the determination of the existence of grave abuse of
discretion amounting to lack or excess of jurisdiction. Petitioner cannot simply allege grave abuse of
discretion amounting to lack or excess of jurisdiction and then invoke certiorari to declare the aforesaid
administrative issuances unconstitutional and illegal. Emphasis must be given to the fact that the writ
of certiorari dealt with in Rule 65 of the 1997 Revised Rules of Civil Procedure is a prerogative writ, never
demandable as a matter of right, "never issued except in the exercise of judicial discretion."36

At any rate, even if the Court will set aside procedural infirmities, the instant petition should still be
dismissed.

Executive Order No. 129-A37 vested upon the DAR the responsibility of implementing the CARP.
Pursuant to the said mandate and to ensure the successful implementation of the CARP, Section 5(c)
of the said executive order authorized the DAR to establish and promulgate operational policies, rules
and regulations and priorities for agrarian reform implementation. Section 4(k) thereof authorized the
DAR to approve or disapprove the conversion, restructuring or readjustment of agricultural lands into
non-agricultural uses. Similarly, Section 5(l) of the same executive order has given the DAR the exclusive
authority to approve or disapprove conversion of agricultural lands for residential, commercial,
industrial, and other land uses as may be provided for by law. Section 7 of the aforesaid executive
order clearly provides that "the authority and responsibility for the exercise of the mandate of the [DAR]
and the discharge of its powers and functions shall be vested in the Secretary of Agrarian Reform x x
x."

Under DAR AO No. 01-02, as amended, "lands not reclassified as residential, commercial, industrial or
other non-agricultural uses before 15 June 1988" have been included in the definition of agricultural
lands. In so doing, the Secretary of Agrarian Reform merely acted within the scope of his authority
stated in the aforesaid sections of Executive Order No. 129-A, which is to promulgate rules and
regulations for agrarian reform implementation and that includes the authority to define agricultural
lands for purposes of land use conversion. Further, the definition of agricultural lands under DAR AO
No. 01-02, as amended, merely refers to the category of agricultural lands that may be the subject for
conversion to non-agricultural uses and is not in any way confined to agricultural lands in the context
of land redistribution as provided for under Republic Act No. 6657.

More so, Department of Justice Opinion No. 44, Series of 1990, which Opinion has been recognized in
many cases decided by this Court, clarified that after the effectivity of Republic Act No. 6657 on 15
June 1988 the DAR has been given the authority to approve land conversion.38 Concomitant to such
authority, therefore, is the authority to include in the definition of agricultural lands "lands not
reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988" for
purposes of land use conversion.

In the same vein, the authority of the Secretary of Agrarian Reform to include "lands not reclassified as
residential, commercial, industrial or other non-agricultural uses before 15 June 1988" in the definition
of agricultural lands finds basis in jurisprudence. In Ros v. Department of Agrarian Reform,39 this Court
has enunciated that after the passage of Republic Act No. 6657, agricultural lands, though reclassified,
have to go through the process of conversion, jurisdiction over which is vested in the DAR. However,
agricultural lands, which are already reclassified before the effectivity of Republic Act No. 6657 which
is 15 June 1988, are exempted from conversion.40 It bears stressing that the said date of effectivity of
Republic Act No. 6657 served as the cut-off period for automatic reclassifications or rezoning of
agricultural lands that no longer require any DAR conversion clearance or authority.41 It necessarily
follows that any reclassification made thereafter can be the subject of DAR’s conversion authority.
Having recognized the DAR’s conversion authority over lands reclassified after 15 June 1988, it can no
longer be argued that the Secretary of Agrarian Reform was wrongfully given the authority and power
to include "lands not reclassified as residential, commercial, industrial or other non-agricultural uses
before 15 June 1988" in the definition of agricultural lands. Such inclusion does not unduly expand or
enlarge the definition of agricultural lands; instead, it made clear what are the lands that can be the
subject of DAR’s conversion authority, thus, serving the very purpose of the land use conversion
provisions of Republic Act No. 6657.

The argument of the petitioner that DAR AO No. 01-02, as amended, was made in violation of Section
65 of Republic Act No. 6657, as it covers even those non-awarded lands and reclassified lands by the
LGUs or by way of Presidential Proclamations on or after 15 June 1988 is specious. As explained in
Department of Justice Opinion No. 44, series of 1990, it is true that the DAR’s express power over land
use conversion provided for under Section 65 of Republic Act No. 6657 is limited to cases in which
agricultural lands already awarded have, after five years, ceased to be economically feasible and
sound for agricultural purposes, or the locality has become urbanized and the land will have a greater
economic value for residential, commercial or industrial purposes. To suggest, however, that these are
the only instances that the DAR can require conversion clearances would open a loophole in Republic
Act No. 6657 which every landowner may use to evade compliance with the agrarian reform program.
It should logically follow, therefore, from the said department’s express duty and function to execute
and enforce the said statute that any reclassification of a private land as a residential, commercial or
industrial property, on or after the effectivity of Republic Act No. 6657 on 15 June 1988 should first be
cleared by the DAR.42

This Court held in Alarcon v. Court of Appeals43 that reclassification of lands does not suffice.
Conversion and reclassification differ from each other. Conversion is the act of changing the current
use of a piece of agricultural land into some other use as approved by the DAR while reclassification is
the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential,
industrial, and commercial, as embodied in the land use plan, subject to the requirements and
procedures for land use conversion. In view thereof, a mere reclassification of an agricultural land does
not automatically allow a landowner to change its use. He has to undergo the process of conversion
before he is permitted to use the agricultural land for other purposes.44

It is clear from the aforesaid distinction between reclassification and conversion that agricultural lands
though reclassified to residential, commercial, industrial or other non-agricultural uses must still undergo
the process of conversion before they can be used for the purpose to which they are intended.

Nevertheless, emphasis must be given to the fact that DAR’s conversion authority can only be
exercised after the effectivity of Republic Act No. 6657 on 15 June 1988.45 The said date served as the
cut-off period for automatic reclassification or rezoning of agricultural lands that no longer require any
DAR conversion clearance or authority.46 Thereafter, reclassification of agricultural lands is already
subject to DAR’s conversion authority. Reclassification alone will not suffice to use the agricultural lands
for other purposes. Conversion is needed to change the current use of reclassified agricultural lands.

It is of no moment whether the reclassification of agricultural lands to residential, commercial, industrial


or other non-agricultural uses was done by the LGUs or by way of Presidential Proclamations because
either way they must still undergo conversion process. It bears stressing that the act of reclassifying
agricultural lands to non-agricultural uses simply specifies how agricultural lands shall be utilized for non-
agricultural uses and does not automatically convert agricultural lands to non-agricultural uses or for
other purposes. As explained in DAR Memorandum Circular No. 7, Series of 1994, cited in the 2009 case
of Roxas & Company, Inc. v. DAMBA-NFSW and the Department of Agrarian Reform,47 reclassification
of lands denotes their allocation into some specific use and providing for the manner of their utilization
and disposition or the act of specifying how agricultural lands shall be utilized for non-agricultural uses
such as residential, industrial, or commercial, as embodied in the land use plan. For reclassified
agricultural lands, therefore, to be used for the purpose to which they are intended there is still a need
to change the current use thereof through the process of conversion. The authority to do so is vested
in the DAR, which is mandated to preserve and maintain agricultural lands with increased productivity.
Thus, notwithstanding the reclassification of agricultural lands to non-agricultural uses, they must still
undergo conversion before they can be used for other purposes.

Even reclassification of agricultural lands by way of Presidential Proclamations to non-agricultural uses,


such as school sites, needs conversion clearance from the DAR. We reiterate that reclassification is
different from conversion. Reclassification alone will not suffice and does not automatically allow the
landowner to change its use. It must still undergo conversion process before the landowner can use
such agricultural lands for such purpose.48 Reclassification of agricultural lands is one thing, conversion
is another. Agricultural lands that are reclassified to non-agricultural uses do not ipso facto allow the
landowner thereof to use the same for such purpose. Stated differently, despite having reclassified into
school sites, the landowner of such reclassified agricultural lands must apply for conversion before the
DAR in order to use the same for the said purpose.
Any reclassification, therefore, of agricultural lands to residential, commercial, industrial or other non-
agricultural uses either by the LGUs or by way of Presidential Proclamations enacted on or after 15 June
1988 must undergo the process of conversion, despite having undergone reclassification, before
agricultural lands may be used for other purposes.

It is different, however, when through Presidential Proclamations public agricultural lands have been
reserved in whole or in part for public use or purpose, i.e., public school, etc., because in such a case,
conversion is no longer necessary. As held in Republic v. Estonilo,49 only a positive act of the President
is needed to segregate or reserve a piece of land of the public domain for a public purpose. As such,
reservation of public agricultural lands for public use or purpose in effect converted the same to such
use without undergoing any conversion process and that they must be actually, directly and
exclusively used for such public purpose for which they have been reserved, otherwise, they will be
segregated from the reservations and transferred to the DAR for distribution to qualified beneficiaries
under the CARP.50 More so, public agricultural lands already reserved for public use or purpose no
longer form part of the alienable and disposable lands of the public domain suitable for agriculture.51
Hence, they are outside the coverage of the CARP and it logically follows that they are also beyond
the conversion authority of the DAR.

Clearly from the foregoing, the Secretary of Agrarian Reform did not act without jurisdiction or in excess
of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in (1) including
lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June
1988 in the definition of agricultural lands under DAR AO No. 01-02, as amended, and; (2) issuing and
enforcing DAR AO No. 01-02, as amended, subjecting to DAR’s jurisdiction for conversion lands which
had already been reclassified as residential, commercial, industrial or for other non-agricultural uses on
or after 15 June 1988.

Similarly, DAR AO No. 01-02, as amended, providing that the reclassification of agricultural lands by
LGUs shall be subject to the requirements of land use conversion procedure or that DAR’s approval or
clearance must be secured to effect reclassification, did not violate the autonomy of the LGUs.

Section 20 of Republic Act No. 7160 states that:

SECTION 20. Reclassification of Lands. – (a) A city or municipality may, through an ordinance passed
by the sanggunian after conducting public hearings for the purpose, authorize the reclassification of
agricultural lands and provide for the manner of their utilization or disposition in the following cases: (1)
when the land ceases to be economically feasible and sound for agricultural purposes as determined
by the Department of Agriculture or (2) where the land shall have substantially greater economic value
for residential, commercial, or industrial purposes, as determined by the sanggunian concerned:
Provided, That such reclassification shall be limited to the following percentage of the total agricultural
land area at the time of the passage of the ordinance:

xxxx

(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands
distributed to agrarian reform beneficiaries pursuant to Republic Act Numbered Sixty-six hundred fifty-
seven (R.A. No. 6657), otherwise known as "The Comprehensive Agrarian Reform Law," shall not be
affected by the said reclassification and the conversion of such lands into other purposes shall be
governed by Section 65 of said Act.

xxxx
(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the
provisions of R.A. No. 6657.

The aforequoted provisions of law show that the power of the LGUs to reclassify agricultural lands is not
absolute. The authority of the DAR to approve conversion of agricultural lands covered by Republic
Act No. 6657 to non-agricultural uses has been validly recognized by said Section 20 of Republic Act
No. 7160 by explicitly providing therein that, "nothing in this section shall be construed as repealing or
modifying in any manner the provisions of Republic Act No. 6657."

DAR AO No. 01-02, as amended, does not also violate the due process clause, as well as the equal
protection clause of the Constitution. In providing administrative and criminal penalties in the said
administrative order, the Secretary of Agrarian Reform simply implements the provisions of Sections 73
and 74 of Republic Act No. 6657, thus:

Sec. 73. Prohibited Acts and Omissions. – The following are prohibited:

xxxx

(c) The conversion by any landowner of his agricultural land into any non-agricultural use with intent to
avoid the application of this Act to his landholdings and to disposes his tenant farmers of the land tilled
by them;

xxxx

(f) The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary right
over the land he acquired by virtue of being a beneficiary, in order to circumvent the provisions of this
Act.

xxxx

Sec. 74. Penalties. ─ Any person who knowingly or willfully violates the provisions of this Act shall be
punished by imprisonment of not less than one (1) month to not more than three (3) years or a fine of
not less than one thousand pesos (₱1,000.00) and not more than fifteen thousand pesos (₱15,000.00),
or both, at the discretion of the court.

If the offender is a corporation or association, the officer responsible therefor shall be criminally liable.

And Section 11 of Republic Act No. 8435, which specifically provides:

Sec. 11. Penalty for Agricultural Inactivity and Premature Conversion. – x x x.

Any person found guilty of premature or illegal conversion shall be penalized with imprisonment of two
(2) to six (6) years, or a fine equivalent to one hundred percent (100%) of the government's investment
cost, or both, at the discretion of the court, and an accessory penalty of forfeiture of the land and any
improvement thereon.

In addition, the DAR may impose the following penalties, after determining, in an administrative
proceedings, that violation of this law has been committed:

a. Consolation or withdrawal of the authorization for land use conversion; and

b. Blacklisting, or automatic disapproval of pending and subsequent conversion applications that they
may file with the DAR.

Contrary to petitioner’s assertions, the administrative and criminal penalties provided for under DAR
AO No. 01-02, as amended, are imposed upon the illegal or premature conversion of lands within DAR’s
jurisdiction, i.e., "lands not reclassified as residential, commercial, industrial or for other non-agricultural
uses before 15 June 1998."

The petitioner’s argument that DAR Memorandum No. 88 is unconstitutional, as it suspends the land
use conversion without any basis, stands on hollow ground.

It bears emphasis that said Memorandum No. 88 was issued upon the instruction of the President in
order to address the unabated conversion of prime agricultural lands for real estate development
because of the worsening rice shortage in the country at that time. Such measure was made in order
to ensure that there are enough agricultural lands in which rice cultivation and production may be
carried into. The issuance of said Memorandum No. 88 was made pursuant to the general welfare of
the public, thus, it cannot be argued that it was made without any basis.

WHEREFORE, premises considered, the instant Petition for Certiorari is DISMISSED. Costs against
petitioner.

RA 7160 Section 20. Reclassification of Lands. -

(a) A city or municipality may, through an ordinance passed by the sanggunian after
conducting public hearings for the purpose, authorize the reclassification of agricultural lands
and provide for the manner of their utilization or disposition in the following cases: (1) when the
land ceases to be economically feasible and sound for agricultural purposes as determined by
the Department of Agriculture or (2) where the land shall have substantially greater economic
value for residential, commercial, or industrial purposes, as determined by the sanggunian
concerned: Provided, That such reclassification shall be limited to the following percentage of
the total agricultural land area at the time of the passage of the ordinance:

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

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

(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That
agricultural lands distributed to agrarian reform beneficiaries pursuant to Republic Act
Numbered Sixty-six hundred fifty-seven (R.A. No. 6657). otherwise known as "The
Comprehensive Agrarian Reform Law", shall not be affected by the said reclassification
and the conversion of such lands into other purposes shall be governed by Section 65 of
said Act.
(b) The President may, when public interest so requires and upon recommendation of the
National Economic and Development Authority, authorize a city or municipality to reclassify
lands in excess of the limits set in the next preceding paragraph.

(c) The local government units shall, in conformity with existing laws, continue to prepare their
respective comprehensive land use plans enacted through zoning ordinances which shall be
the primary and dominant bases for the future use of land resources: Provided. That the
requirements for food production, human settlements, and industrial expansion shall be taken
into consideration in the preparation of such plans.

(d) Where approval by a national agency is required for reclassification, such approval shall not
be unreasonably withheld. Failure to act on a proper and complete application for
reclassification within three (3) months from receipt of the same shall be deemed as approval
thereof.

(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any
manner the provisions of R.A. No. 6657.

MEMORANDUM CIRCULAR NO. 54 - PRESCRIBING THE GUIDELINES GOVERNING Sec. 20 OF RA 7160


OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991 AUTHORIZING CITIES AND
MUNICIPALITIES TO RECLASSIFY AGRICULTURAL LANDS INTO NON-AGRICULTURAL USES

WHEREAS, RA 7160, otherwise known as the Local Government Code of 1991 (LGC), provides that cities
and municipalities may reclassify agricultural lands into non-agricultural uses within their respective
jurisdictions, subject to the limitations and other conditions prescribed under Sec. 20 of the LGC;

WHEREAS, the implementing Rules and Regulations (IRR) of the LGC provides that cities and
municipalities shall continue to prepare their respective comprehensive land use plans, enacted
through zoning ordinances, subject to applicable laws and rules and regulations;

WHEREAS, the IRR also prescribes that such plans shall serve as the primary and dominant bases for
future use of land resources and reclassification of agricultural lands;

WHEREAS, the IRR further provides that the requirements for food production, human settlements,
ecological balance, and industrial expansion shall be considered in the preparation of comprehensive
land use plans;

WHEREAS, EO 129-A, s. of 1987, mandates the Department of Agrarian Reform (DAR) to approve or
disapprove the conversion, restructuring or readjustment of agricultural lands into non-agricultural uses;

WHEREAS, the said EO has also vested in DAR exclusive authority to approve or disapprove conversion
of agricultural lands for residential, commercial, industrial, and other land uses;

WHEREAS, Sec. 65 of RA 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988
(CARL), likewise empowers DAR to authorize, under certain conditions, the reclassification or
conversion of lands awarded to agrarian reform beneficiaries;
WHEREAS, pursuant to the pertinent provisions of EO 129-A (1987), EO 229 (1987), and RA 6657, DAR
issued various rules and regulations governing the conversion or reclassification of agricultural lands
into non-agricultural uses;

WHEREAS, there is a need to harmonize the provisions of Sec. 20 of the LGC with those of EO 129-A
(1987), EO 229 (1987), RA 6657, and other national policy issuances and other pertinent laws to ensure
a more rational and holistic approach to land use, taking into account the objectives of the CARL and
the decentralized framework of local governance;

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Philippines, by virtue of the powers vested in me
by law, upon the recommendation of the Oversight Committee created under Sec. 533 of the LGC,
do hereby order and direct:

Section 1. Scope and limitations. — (a) Cities and municipalities with comprehensive land use plans
reviewed and approved in accordance with EO 72 (1993), may authorize the reclassification of
agricultural lands into non-agricultural uses and provide for the manner of their utilization or disposition,
subject to the limitations and other conditions prescribed in this Order.

(b) Agricultural lands may be reclassified in the following cases:

(1) when the land ceases to be economically feasible and sound for agricultural purposes as
determined by the Department of Agriculture (DA), in accordance with the standards and guidelines
prescribed for the purpose; or

(2) where the land shall have substantially greater economic value for residential, commercial, or
industrial purposes as determined by the sanggunian concerned, the city/municipality concerned
should notify the DA, HLRB, DTI, DOT and other concerned agencies on the proposed reclassification
of agricultural lands furnishing them copies of the report of the local development council including
the draft ordinance on the matter for their comments, proposals and recommendations within seven
(7) days upon receipt.

(c) However, such reclassification shall be limited to a maximum of the percentage of the total
agricultural land of a city or municipality at the time of the passage of the ordinance as follows:

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

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

(3) For fourth to sixth class municipalities, five percent (5%).

(d) In addition, the following. types of agricultural lands shall not be covered by the said reclassification:

(1) Agricultural lands distributed to agrarian reform beneficiaries subject to Sec. 65 of RA 6657;
(2) Agricultural lands already issued a notice of coverage or voluntarily offered for coverage under
CARP.

(3) Agricultural lands identified under AO 20, s. of 1992, as non-negotiable for conversion as follows:

(i) All irrigated lands where water is available to support rice and other crop production;

(ii) All irrigated lands where water is not available for rice and other crop production but within areas
programmed for irrigation facility rehabilitation by DA and National Irrigation Administration (NIA); and

(iii) All irrigable lands already covered by irrigation projects with firm funding commitments at the time
of the application for land conversion or reclassification.

(e) The President may, when public interest so requires and upon recommendation of the National
Economic Development Authority (NEDA), authorize a city or municipality to reclassify lands in excess
of the limits set in paragraph (d) hereof. For this purpose, NEDA is hereby directed to issue the
implementing guidelines governing the authority of cities and municipalities to reclassify lands in excess
of the limits prescribed herein.

Sec. 2. Requirements and procedures for reclassification. — (a) The city or municipal development
council (CDC/MDC) shall recommend to the sangguniang panlungsod or sangguniang bayan, as the
case may be, the reclassification of agricultural lands within its jurisdiction based on the requirements
of local development.

(b) Prior to the enactment of an ordinance reclassifying agricultural lands as provided under Sec. 1
hereof, the sanggunian concerned must first secure the following certificates from the concerned
national government agencies (NGAs):

(1) A certification from DA indicating —

(i) the total area of existing agricultural lands in the LGU concerned;

(ii) that such lands are not classified as non-negotiable for conversion or reclassification under AO 20
(1992); and

(iii) that the land ceases to be economically feasible and sound for agricultural purposes in the case
of Sec. 1 (b-1).

(2) A certification from DAR indicating that such lands are not distributed or not covered by a notice
of coverage or not voluntarily offered for coverage under CARP.

(c) The HLRB shall serve as the coordinating agency for the issuance of the certificates as required
under the preceding paragraph. All applications for reclassification shall, therefore, be submitted by
the concerned LGUs to the HLRB, upon receipt of such application, the HLRB conduct initial review to
determine if:
(1) the city or municipality concerned has an existing comprehensive land use plan reviewed and
approved in accordance with EO 72 (1993); and

(2) the proposed reclassification complies with the limitations prescribed in SECTION 1 (d) hereof.

Upon determination that the above conditions have been satisfied, the HLRB shall then consult with
the concerned agencies on the required certifications. The HLRB shall inform the concerned agencies,
city or municipality of the result of their review and consultation. If the land being reclassified is in excess
of the limit, the application shall be submitted to NEDA.

Failure of the HLRB and the NGAs to act on a proper and complete application within three months
from receipt of the same shall be deemed as approved thereof.

(d) Reclassification of agricultural lands may be authorized through an ordinance enacted by the
sangguniang panlungsod or sangguniang bayan, as the case may be, after conducting public
hearings for the purpose. Such ordinance shall be enacted and approved in accordance with Articles
107 and 108 of the IRR of the LGC;

(e) Provisions of Sec. 1 (b-2) hereof to the contrary notwithstanding, the sanggunian concerned shall
seek the advice of DA prior to the enactment of an ordinance reclassifying agricultural lands. If the DA
has failed to act on such request within thirty (30) days from receipt thereof, the same shall be deemed
to have been complied with. Should the land subject to reclassification is found to be still economically
feasible for agriculture, the DA shall recommend to the LGU concerned alternative areas for
development purposes.

(f) Upon issuance of the certifications enumerated in Sec. 2 (b) hereof, the sanggunian concerned
may now enact an ordinance authorizing the reclassification of agricultural lands and providing for
the manner their utilization or disposition. Such ordinance shall likewise update the comprehensive land
use plans of the LGU concerned.

Sec. 3. Review of ordinances reclassifying agricultural lands. — All ordinances authorizing the
reclassification of agricultural lands shall be subject to the review and approval by the province in the
case of component city or municipality, or by HLRB in the case of a highly urbanized or independent
component city in accordance with EO 72 (1993).

Sec. 4. Use of the comprehensive land use plans and ordinances as primary reference documents in
land use conversions. — Pursuant to RA 6657 and EO 129-A, actions on applications for land use
conversions on individual landholdings shall remain as the responsibility of DAR, which shall utilize as its
primary reference documents the comprehensive land use plans and accompanying ordinance
passed upon and approved by the LGUs concerned, together with the National Land Use Policy.

Sec. 5. Monitoring and evaluation of land reclassification by LGUs concerned. — Within six (6) months
from the issuance of this Order, the HLRB shall design, in coordination with DA, DAR, Department of the
Interior and Local Government (DILG), NEDA, League of Provinces, League of Cities and League of
Municipalities, and install a monitoring and evaluation system for the reclassification of agricultural
lands authorized by cities and municipalities.
The HLRB shall submit semestral reports to the Office of the President. A copy thereof shall be furnished
the DA, DAR, DILG, NEDA, League of Provinces, League of Cities, and League of Municipalities.

Sec. 6. Transitory provision. — Provisions of Secs. 1 (a) and 2 (b) to the contrary notwithstanding, cities
and municipalities with land use plans approved not earlier than 01 January 1989, may authorize the
reclassification of agricultural lands in accordance with the limitations and conditions prescribed in this
Order. However, when the LGU has not reclassified up to the said limitations, further reclassification
may be exercised only within five years from the approval of the plan. Thereafter, all reclassifications
shall require approval from the President pursuant to Sec. 1 (e) of this Circular.

Sec. 7. Effectivity. — This Circular shall take effect immediately.

DONE in the City of Manila, this 8th day of June, in the year of Our Lord, nineteen hundred and ninet

FORTICH V CORONA

The dramatic and well-publicized hunger strike staged by some alleged farmer-beneficiaries in
front of the Department of Agrarian Reform compound in Quezon City on October 9, 1997
commanded nationwide attention that even church leaders and some presidential candidates tried
to intervene for the strikers cause.
The strikers protested the March 29, 1996 Decision[1] of the Office of the President (OP), issued
through then Executive Secretary Ruben D. Torres in OP Case No. 96-C-6424, which approved the
conversion of a one hundred forty-four (144)-hectare land from agricultural to agro-
industrial/institutional area. This led the Office of the President, through then Deputy Executive
Secretary Renato C. Corona, to issue the so-called Win-Win Resolution[2] on November 7, 1997,
substantially modifying its earlier Decision after it had already become final and executory. The said
Resolution modified the approval of the land conversion to agro-industrial area only to the extent of
forty-four (44) hectares, and ordered the remaining one hundred (100) hectares to be distributed to
qualified farmer-beneficiaries.
But, did the Win-Win Resolution culminate in victory for all the contending parties?
The above-named petitioners cried foul. They have come to this Court urging us to annul and set
aside the Win-Win Resolution and to enjoin respondent Secretary Ernesto D. Garilao of the Department
of Agrarian Reform from implementing the said Resolution.
Thus, the crucial issue to be resolved in this case is: What is the legal effect of the Win-Win Resolution
issued by the Office of the President on its earlier Decision involving the same subject matter, which
had already become final and executory?
The antecedent facts of this controversy, as culled from the pleadings, may be stated as follows:
1. This case involves a 144-hectare land located at San Vicente, Sumilao, Bukidnon, owned by the
Norberto Quisumbing, Sr. Management and Development Corporation (NQSRMDC), one of the
petitioners. The property is covered by a Transfer Certificate of Title No. 14371[3] of the Registry of Deeds
of the Province of Bukidnon.
2. In 1984, the land was leased as a pineapple plantation to the Philippine Packing Corporation,
now Del Monte Philippines, Inc. (DMPI), a multinational corporation, for a period of ten (10) years under
the Crop Producer and Growers Agreement duly annotated in the certificate of title. The lease expired
in April, 1994.
3. In October, 1991, during the existence of the lease, the Department of Agrarian Reform (DAR)
placed the entire 144-hectare property under compulsory acquisition and assessed the land value
at P2.38 million.[4]
4. NQSRMDC resisted the DARs action. In February, 1992, it sought and was granted by the DAR
Adjudication Board (DARAB), through its Provincial Agrarian Reform Adjudicator (PARAD) in DARAB
Case No. X-576, a writ of prohibition with preliminary injunction which ordered the DAR Region X
Director, the Provincial Agrarian Reform Officer (PARO) of Bukidnon, the Municipal Agrarian Reform
Office (MARO) of Sumilao, Bukidnon, the Land Bank of the Philippines (Land Bank), and their authorized
representatives to desist from pursuing any activity or activities concerning the subject land until further
orders.[5]
5. Despite the DARAB order of March 31, 1992, the DAR Regional Director issued a memorandum,
dated May 21, 1992, directing the Land Bank to open a trust account for P2.38 million in the name of
NQSRMDC and to conduct summary proceedings to determine the just compensation of the subject
property. NQSRMDC objected to these moves and filed on June 9, 1992 an Omnibus Motion to enforce
the DARAB order of March 31, 1992 and to nullify the summary proceedings undertaken by the DAR
Regional Director and Land Bank on the valuation of the subject property.
6. The DARAB, on October 22, 1992, acted favorably on the Omnibus Motion by (a) ordering the
DAR Regional Director and Land Bank to seriously comply with the terms of the order dated March 31,
1992; (b) nullifying the DAR Regional Directors memorandum, dated May 21, 1992, and the summary
proceedings conducted pursuant thereto; and (c) directing the Land Bank to return the claim folder
of Petitioner NQSRMDCs subject property to the DAR until further orders.[6]
7. The Land Bank complied with the DARAB order and cancelled the trust account it opened in
the name of petitioner NQSRMDC.[7]
8. In the meantime, the Provincial Development Council (PDC) of Bukidnon, headed by Governor
Carlos O. Fortich, passed Resolution No. 6,[8] dated January 7, 1993, designating certain areas along
Bukidnon-Sayre Highway as part of the Bukidnon Agro-Industrial Zones where the subject property is
situated.
9. What happened thereafter is well-narrated in the OP (TORRES) Decision of March 29, 1996,
pertinent portions of which we quote:

Pursuant to Section 20 of R.A. No. 7160, otherwise known as the Local Government Code, the
Sangguniang Bayan of Sumilao, Bukidnon, on March 4, 1993, enacted Ordinance No. 24 converting or
re-classifying 144 hectares of land in Bgy. San Vicente, said Municipality, from agricultural to
industrial/institutional with a view of providing an opportunity to attract investors who can inject new
economic vitality, provide more jobs and raise the income of its people.

Parenthetically, under said section, 4th to 5th class municipalities may authorize the classification of five
percent (5%) of their agricultural land area and provide for the manner of their utilization or disposition.

On 12 October 1993, the Bukidnon Provincial Land Use Committee approved the said
Ordinance. Accordingly, on 11 December 1993, the instant application for conversion was filed by Mr.
Gaudencio Beduya in behalf of NQSRMDC/BAIDA (Bukidnon Agro-Industrial Development
Association).

Expressing support for the proposed project, the Bukidnon Provincial Board, on the basis of a Joint
Committee Report submitted by its Committee on Laws, Committee on Agrarian Reform and Socio-
Economic Committee approved, on 1 February 1994, the said Ordinance now docketed as Resolution
No. 94-95. The said industrial area, as conceived by NQSRMDC (project proponent) is supposed to
have the following components:

1. The Development Academy of Mindanao which constitutes the following: Institute for Continuing
Higher Education; Institute for Livelihood Science (Vocational and Technical School); Institute for
Agribusiness Research; Museum, Library, Cultural Center, and Mindanao Sports Development Complex
which covers an area of 24 hectares;

2. Bukidnon Agro-Industrial Park which consists of corn processing for corn oil, corn starch, various corn
products; rice processing for wine, rice-based snacks, exportable rice; cassava processing for starch,
alcohol and food delicacies; processing plants, fruits and fruit products such as juices; processing plants
for vegetables processed and prepared for market; cold storage and ice plant; cannery system;
commercial stores; public market; and abattoir needing about 67 hectares;

3. Forest development which includes open spaces and parks for recreation, horse-back riding,
memorial and mini-zoo estimated to cover 33 hectares; and

4. Support facilities which comprise the construction of a 360-room hotel, restaurants, dormitories and
a housing project covering an area of 20 hectares.

The said NQSRMDC Proposal was, per Certification dated January 4, 1995, adopted by the Department
of Trade and Industry, Bukidnon Provincial Office, as one of its flagship projects.The same was likewise
favorably recommended by the Provincial Development Council of Bukidnon; the municipal,
provincial and regional office of the DAR; the Regional Office (Region X) of the DENR (which issued an
Environmental Compliance Certificate on June 5, 1995); the Executive Director, signing By Authority of
PAUL G. DOMINGUEZ, Office of the President Mindanao; the Secretary of DILG; and Undersecretary of
DECS Wilfredo D. Clemente.

In the same vein, the National Irrigation Administration, Provincial Irrigation Office, Bagontaas Valencia,
Bukidnon, thru Mr. Julius S. Maquiling, Chief, Provincial Irrigation Office, interposed NO OBJECTION to
the proposed conversion as long as the development cost of the irrigation systems thereat which
is P2,377.00 per hectare be replenished by the developer x x x. Also, the Kisolon-San Vicente Irrigators
Multi Purpose Cooperative, San Vicente, Sumilao, Bukidnon, interposed no objection to the proposed
conversion of the land in question as it will provide more economic benefits to the community in terms
of outside investments that will come and employment opportunities that will be generated by the
projects to be put up x x x.

On the same score, it is represented that during the public consultation held at the Kisolan Elementary
School on 18 March 1995 with Director Jose Macalindong of DAR Central Office and DECS
Undersecretary Clemente, the people of the affected barangay rallied behind their respective officials
in endorsing the project.

Notwithstanding the foregoing favorable recommendation, however, on November 14, 1994, the DAR,
thru Secretary Garilao, invoking its powers to approve conversion of lands under Section 65 of R.A. No.
6657, issued an Order denying the instant application for the conversion of the subject land from
agricultural to agro-industrial and, instead, placed the same under the compulsory coverage of CARP
and directed the distribution thereof to all qualified beneficiaries on the following grounds:

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

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

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

4. There is no clear and tangible compensation package arrangements for the beneficiaries;

5. The procedures on how the area was identified and reclassified for agro-industrial project has no
reference to Memo Circular No. 54, Series of 1993, E.O. No. 72, Series of 1993, and E.O. No. 124, Series
of 1993.

A Motion for Reconsideration of the aforesaid Order was filed on January 9, 1995 by applicant but the
same was denied (in an Order dated June 7, 1995).[9]

10. Thus, the DAR Secretary ordered the DAR Regional Director to proceed with the compulsory
acquisition and distribution of the property.[10]
11. Governor Carlos O. Fortich of Bukidnon appealed[11] the order of denial to the Office of the
President and prayed for the conversion/reclassification of the subject land as the same would be
more beneficial to the people of Bukidnon.
12. To prevent the enforcement of the DAR Secretarys order, NQSRMDC, on June 29, 1995, filed
with the Court of Appeals a petition for certiorari, prohibition with preliminary injunction,[12] docketed
as CA-G.R. SP No. 37614.
13. Meanwhile, on July 25, 1995, the Honorable Paul G. Dominguez, then Presidential Assistant for
Mindanao, after conducting an evaluation of the proposed project, sent a memorandum[13] to the
President favorably endorsing the project with a recommendation that the DAR Secretary reconsider
his decision in denying the application of the province for the conversion of the land.
14. Also, in a memorandum[14] to the President dated August 23, 1995, the Honorable Rafael Alunan
III, then Secretary of the Department of the Interior and Local Government (DILG), recommended the
conversion of the subject land to industrial/institutional use with a request that the President hold the
implementation of the DAR order to distribute the land in question.
15. On October 23, 1995, the Court of Appeals, in CA-G.R. SP No. 37614, issued a
Resolution[15] ordering the parties to observe status quo pending resolution of the petition. At the
hearing held in said case on October 5, 1995, the DAR, through the Solicitor General, manifested before
the said court that the DAR was merely in the processing stage of the applications of farmers-claimants
and has agreed to respect status quo pending the resolution of the petition.[16]
16. In resolving the appeal, the Office of the President, through then Executive Secretary Ruben D.
Torres, issued a Decision in OP Case No. 96-C-6424, dated March 29, 1996, reversing the DAR Secretarys
decision, the pertinent portions of which read:

After a careful evaluation of the petition vis--vis the grounds upon which the denial thereof by Secretary
Garilao was based, we find that the instant application for conversion by the Municipality of Sumilao,
Bukidnon is impressed with merit. To be sure, converting the land in question from agricultural to agro-
industrial would open great opportunities for employment and bring about real development in the
area towards a sustained economic growth of the municipality. On the other hand, distributing the
land to would-be beneficiaries (who are not even tenants, as there are none) does not guarantee
such benefits.

Nevertheless, on the issue that the land is considered a prime agricultural land with irrigation facility it
maybe appropriate to mention that, as claimed by petitioner, while it is true that there is, indeed, an
irrigation facility in the area, the same merely passes thru the property (as a right of way) to provide
water to the ricelands located on the lower portion thereof. The land itself, subject of the instant
petition, is not irrigated as the same was, for several years, planted with pineapple by the Philippine
Packing Corporation.

On the issue that the land has long been covered by a Notice of Compulsory Acquisition (NCA) and
that the existing policy on withdrawal or lifting on areas covered by NCA is not applicable, suffice it to
state that the said NCA was declared null and void by the Department of Agrarian Reform
Adjudication Board (DARAB) as early as March 1, 1992. Deciding in favor of NQSRMDC, the DARAB
correctly pointed out that under Section 8 of R.A. No. 6657, the subject property could not validly be
the subject of compulsory acquisition until after the expiration of the lease contract with Del Monte
Philippines, a Multi-National Company, or until April 1994, and ordered the DAR Regional Office and
the Land Bank of the Philippines, both in Butuan City, to `desist from pursuing any activity or activities
covering petitioners land.

On this score, we take special notice of the fact that the Quisumbing family has already contributed
substantially to the land reform program of the government, as follows: 300 hectares of rice land in
Nueva Ecija in the 70s and another 400 hectares in the nearby Municipality of Impasugong, Bukidnon,
ten (10) years ago, for which they have not received just compensation up to this time.

Neither can the assertion that there is no clear and tangible compensation package arrangements
for the beneficiaries hold water as, in the first place, there are no beneficiaries to speak about, for the
land is not tenanted as already stated.

Nor can procedural lapses in the manner of identifying/reclassifying the subject property for agro-
industrial purposes be allowed to defeat the very purpose of the law granting autonomy to local
government units in the management of their local affairs. Stated more simply, the language of Section
20 of R.A. No. 7160, supra, is clear and affords no room for any other interpretation. By unequivocal
legal mandate, it grants local government units autonomy in their local affairs including the power to
convert portions of their agricultural lands and provide for the manner of their utilization and disposition
to enable them to attain their fullest development as self-reliant communities.

WHEREFORE, in pursuance of the spirit and intent of the said legal mandate and in view of the favorable
recommendations of the various government agencies abovementioned, the subject Order, dated
November 14, 1994 of the Hon. Secretary, Department of Agrarian Reform, is hereby SET ASIDE and the
instant application of NQSRMDC/BAIDA is hereby APPROVED.[17]

17.On May 20, 1996, DAR filed a motion for reconsideration of the OP decision.
18 On September 11, 1996, in compliance with the OP decision of March 29, 1996, NQSRMDC and
the Department of Education, Culture and Sports (DECS) executed a Memorandum of
Agreement whereby the former donated four (4) hectares from the subject land to DECS for the
establishment of the NQSR High School.[18]
When NQSRMDC was about to transfer the title over the 4-hectare donated to DECS, it discovered
that the title over the subject property was no longer in its name. It soon found out that during the
pendency of both the Petition for Certiorari, Prohibition, with Preliminary Injunction it filed against DAR
in the Court of Appeals and the appeal to the President filed by Governor Carlos O. Fortich, the DAR,
without giving just compensation, caused the cancellation of NQSRMDCs title on August 11, 1995 and
had it transferred in the name of the Republic of the Philippines under TCT No. T-50264[19] of the Registry
of Deeds of Bukidnon. Thereafter, on September 25, 1995, DAR caused the issuance of Certificates of
Land Ownership Award (CLOA) No. 00240227 and had it registered in the name of 137 farmer-
beneficiaries under TCT No. AT-3536[20] of the Registry of Deeds of Bukidnon.
19. Thus, on April 10, 1997, NQSRMDC filed a complaint[21] with the Regional Trial Court (RTC) of
Malaybalay, Bukidnon (Branch 9), docketed as Civil Case No. 2687-97, for annulment and cancellation
of title, damages and injunction against DAR and 141 others. The RTC then issued a Temporary
Restraining Order on April 30, 1997[22] and a Writ of Preliminary Injunction on May 19, 1997,[23] restraining
the DAR and 141 others from entering, occupying and/or wresting from NQSRMDC the possession of
the subject land.
20. Meanwhile, on June 23, 1997, an Order[24] was issued by then Executive Secretary Ruben D.
Torres denying DARs motion for reconsideration for having been filed beyond the reglementary period
of fifteen (15) days. The said order further declared that the March 29, 1996 OP decision had already
become final and executory.
21. The DAR filed on July 11, 1997 a second motion for reconsideration of the June 23, 1997 Order
of the President.
22. On August 12, 1997, the said writ of preliminary injunction issued by the RTC was challenged by
some alleged farmers before the Court of Appeals through a petition for certiorari and prohibition,
docketed as CA-G.R. SP No. 44905, praying for the lifting of the injunction and for the issuance of a writ
of prohibition from further trying the RTC case.
23. On October 9, 1997, some alleged farmer-beneficiaries began their hunger strike in front of the
DAR Compound in Quezon City to protest the OP Decision of March 29, 1996. On October 10, 1997,
some persons claiming to be farmer-beneficiaries of the NQSRMDC property filed a motion for
intervention (styled as Memorandum In Intervention) in O.P. Case No. 96-C-6424, asking that the OP
Decision allowing the conversion of the entire 144-hectare property be set aside.[25]
24. President Fidel V. Ramos then held a dialogue with the strikers and promised to resolve their
grievance within the framework of the law. He created an eight (8)-man Fact Finding Task Force (FFTF)
chaired by Agriculture Secretary Salvador Escudero to look into the controversy and recommend
possible solutions to the problem.[26]
25. On November 7, 1997, the Office of the President resolved the strikers protest by issuing the so-
called Win/Win Resolution penned by then Deputy Executive Secretary Renato C. Corona, the
dispositive portion of which reads:

WHEREFORE, premises considered, the decision of the Office of the President, through Executive
Secretary Ruben Torres, dated March 29, 1996, is hereby MODIFIED as follows:

1. NQSRMDCs application for conversion is APPROVED only with respect to the


approximately forty-four (44) hectare portion of the land adjacent to the highway, as
recommended by the Department of Agriculture.

2. The remaining approximately one hundred (100) hectares traversed by an irrigation


canal and found to be suitable for agriculture shall be distributed to qualified farmer-
beneficiaries in accordance with RA 6657 or the Comprehensive Agrarian Reform Law
with a right of way to said portion from the highway provided in the portion fronting the
highway. For this purpose, the DAR and other concerned government agencies are
directed to immediately conduct the segregation survey of the area, valuation of the
property and generation of titles in the name of the identified farmer-beneficiaries.

3. The Department of Agrarian Reform is hereby directed to carefully and meticulously


determine who among the claimants are qualified farmer-beneficiaries.

4. The Department of Agrarian Reform is hereby further directed to expedite payment of


just compensation to NQSRMDC for the portion of the land to be covered by the CARP,
including other lands previously surrendered by NQSRMDC for CARP coverage.

5. The Philippine National Police is hereby directed to render full assistance to the
Department of Agrarian Reform in the implementation of this Order.
We take note of the Memorandum in Intervention filed by 113 farmers on October 10, 1997 without
ruling on the propriety or merits thereof since it is unnecessary to pass upon it at this time.

SO ORDERED.[27]

A copy of the Win-Win Resolution was received by Governor Carlos O. Fortich of Bukidnon, Mayor
Rey B. Baula of Sumilao, Bukidnon, and NQSRMDC on November 24, 1997[28] and, on December 4, 1997,
they filed the present petition for certiorari, prohibition (under Rule 65 of the Revised Rules of Court)
and injunction with urgent prayer for a temporary restraining order and/or writ of preliminary injunction
(under Rule 58, ibid.), against then Deputy Executive Secretary Renato C. Corona and DAR Secretary
Ernesto D. Garilao.
On December 12, 1997, a Motion For Leave To Intervene[29] was filed by alleged farmer-
beneficiaries, through counsel, claiming that they are real parties in interest as they were previously
identified by respondent DAR as agrarian reform beneficiaries on the 144-hectare property subject of
this case. The motion was vehemently opposed[30] by the petitioners.
In seeking the nullification of the Win-Win Resolution, the petitioners claim that the Office of the
President was prompted to issue the said resolution after a very well-managed hunger strike led by
fake farmer-beneficiary Linda Ligmon succeeded in pressuring and/or politically blackmailing the
Office of the President to come up with this purely political decision to appease the farmers, by reviving
and modifying the Decision of 29 March 1996 which has been declared final and executory in an Order
of 23 June 1997.[31] Thus, petitioners further allege, respondent then Deputy Executive Secretary Renato
C. Corona committed grave abuse of discretion and acted beyond his jurisdiction when he issued the
questioned Resolution of 7 November 1997.[32] They availed of this extraordinary writ of certiorari
because there is no other plain, speedy and adequate remedy in the ordinary course of law.[33] They
never filed a motion for reconsideration of the subject Resolution because (it) is patently illegal or
contrary to law and it would be a futile exercise to seek a reconsideration .[34]
The respondents, through the Solicitor General, opposed the petition and prayed that it be
dismissed outright on the following grounds:
(1) The proper remedy of petitioners should have been to file a petition for review directly with the
Court of Appeals in accordance with Rule 43 of the Revised Rules of Court;
(2) The petitioners failed to file a motion for reconsideration of the assailed Win-Win Resolution
before filing the present petition; and
(3) Petitioner NQSRMDC is guilty of forum-shopping.
These are the preliminary issues which must first be resolved, including the incident on the motion
for intervention filed by the alleged farmer-beneficiaries.
Anent the first issue, in order to determine whether the recourse of petitioners is proper or not, it is
necessary to draw a line between an error of judgment and an error of jurisdiction. An error of
judgment is one which the court may commit in the exercise of its jurisdiction, and which error is
reviewable only by an appeal.[35] On the other hand, an error of jurisdiction is one where the act
complained of was issued by the court, officer or a quasi-judicial body without or in excess of
jurisdiction, or with grave abuse of discretion which is tantamount to lack or in excess of
jurisdiction.[36] This error is correctable only by the extraordinary writ of certiorari.[37]
It is true that under Rule 43, appeals from awards, judgments, final orders or resolutions of any quasi-
judicial agency exercising quasi-judicial functions,[38] including the Office of the President,[39] may be
taken to the Court of Appeals by filing a verified petition for review [40] within fifteen (15) days from
notice of the said judgment, final order or resolution,[41] whether the appeal involves questions of fact,
of law, or mixed questions of fact and law.[42]
However, we hold that, in this particular case, the remedy prescribed in Rule 43 is inapplicable
considering that the present petition contains an allegation that the challenged resolution is patently
illegal[43] and was issued with grave abuse of discretion and beyond his (respondent Secretary Renato
C. Coronas) jurisdiction[44] when said resolution substantially modified the earlier OP Decision of March
29, 1996 which had long become final and executory. In other words, the crucial issue raised here
involves an error of jurisdiction, not an error of judgment which is reviewable by an appeal under Rule
43. Thus, the appropriate remedy to annul and set aside the assailed resolution is an original special
civil action for certiorari under Rule 65, as what the petitioners have correctly done. The pertinent
portion of Section 1 thereof provides:
SECTION 1. Petition for certiorari. When any tribunal, board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the
proper court, alleging the facts with certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law
and justice may require.

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

SEC. 4. Where petition filed.- The petition may be filed not later than sixty (60) days from notice of the
judgment, order or resolution sought to be assailed in the Supreme Court or, if it relates to the acts or
omissions of a lower court or of a corporation, board, officer or person, in the Regional Trial Court
exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in
the Court of Appeals whether or not the same is in aid of its appellate jurisdiction, or in the
Sandiganbayan if it is in aid of its jurisdiction. If it involves the acts or omissions of a quasi-judicial agency,
and unless otherwise provided by law or these Rules, the petition shall be filed in and cognizable only
by the Court of Appeals. (4a)

Under the above-quoted Section 4, the Supreme Court, Court of Appeals and Regional Trial Court
have original concurrent jurisdiction to issue a writ of certiorari,[46] prohibition[47] and mandamus.[48] But
the jurisdiction of these three (3) courts are also delineated in that, if the challenged act relates to acts
or omissions of a lower court or of a corporation, board, officer or person, the petition must be filed
with the Regional Trial Court which exercises jurisdiction over the territorial area as defined by the
Supreme Court. And if it involves the act or omission of a quasi-judicial agency, the petition shall be
filed only with the Court of Appeals, unless otherwise provided by law or the Rules of Court. We have
clearly discussed this matter of concurrence of jurisdiction in People vs. Cuaresma, et. al.,[49] through
now Chief Justice Andres R. Narvasa, thus:

x x x. This Courts original jurisdiction to issue writs of certiorari (as well as prohibition, mandamus, quo
warranto, habeas corpus and injunction) is not exclusive. It is shared by this Court with Regional Trial
Courts (formerly Courts of First Instance), which may issue the writ, enforceable in any part of their
respective regions. It is also shared by this Court, and by the Regional Trial Court, with the Court of
Appeals (formerly, Intermediate Appellate Court), although prior to the effectivity of Batas Pambansa
Bilang 129 on August 14, 1981, the latters competence to issue the extraordinary writs was restricted to
those in aid of its appellate jurisdiction. This concurrence of jurisdiction is not, however, to be taken as
according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court
to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is
determinative of the venue of appeals, and should also serve as a general determinant of the
appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy
most certainly indicates that petitions for the issuance of extraordinary writs against first level (inferior)
courts should be filed with the Regional Trial Court, and those against the latter, with the Court of
Appeals. (Citations omitted)

But the Supreme Court has the full discretionary power to take cognizance of the petition filed
directly to it if compelling reasons, or the nature and importance of the issues raised, warrant. This has
been the judicial policy to be observed and which has been reiterated in subsequent cases,
namely:[50] Uy vs. Contreras, et. al.,[51] Torres vs. Arranz,[52] Bercero vs. De Guzman,[53] and Advincula vs.
Legaspi, et. al.[54] As we have further stated in Cuaresma:

x x x. A direct invocation of the Supreme Courts original jurisdiction to issue these writs should be
allowed only when there are special and important reasons therefor, clearly and specifically set out in
the petition. This is established policy. It is a policy that is necessary to prevent inordinate demands
upon the Courts time and attention which are better devoted to those matters within its exclusive
jurisdiction, and to prevent further over-crowding of the Courts docket.
Pursuant to said judicial policy, we resolve to take primary jurisdiction over the present petition in
the interest of speedy justice[55] and to avoid future litigations so as to promptly put an end to the
present controversy which, as correctly observed by petitioners, has sparked national interest because
of the magnitude of the problem created by the issuance of the assailed resolution. Moreover, as will
be discussed later, we find the assailed resolution wholly void and requiring the petitioners to file their
petition first with the Court of Appeals would only result in a waste of time and money.
That the Court has the power to set aside its own rules in the higher interests of justice is well-
entrenched in our jurisprudence. We reiterate what we said in Piczon vs. Court of Appeals:[56]

Be it remembered that rules of procedure are but mere tools designed to facilitate the attainment of
justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather
than promote substantial justice, must always be avoided. Time and again, this Court has suspended
its own rules and excepted a particular case from their operation whenever the higher interests of
justice so require. In the instant petition, we forego a lengthy disquisition of the proper procedure that
should have been taken by the parties involved and proceed directly to the merits of the case."

As to the second issue of whether the petitioners committed a fatal procedural lapse when they
failed to file a motion for reconsideration of the assailed resolution before seeking judicial recourse,
suffice it to state that the said motion is not necessary when the questioned resolution is a patent
nullity,[57] as will be taken up later.
With respect to the third issue, the respondents claim that the filing by the petitioners of: (a) a
petition for certiorari, prohibition with preliminary injunction (CA-G.R. SP No. 37614) with the Court of
Appeals; (b) a complaint for annulment and cancellation of title, damages and injunction against DAR
and 141 others (Civil Case No. 2687-97) with the Regional Trial Court of Malaybalay, Bukidnon; and (c)
the present petition, constitute forum shopping.
We disagree.
The rule is that:

There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a
favorable opinion (other than by appeal or certiorari) in another. The principle applies not only with
respect to suits filed in the courts but also in connection with litigation commenced in the courts while
an administrative proceeding is pending, as in this case, in order to defeat administrative processes
and in anticipation of an unfavorable administrative ruling and a favorable court ruling. This specially
so, as in this case, where the court in which the second suit was brought, has no jurisdiction (citations
omitted).

The test for determining whether a party violated the rule against forum shopping has been laid down
in the 1986 case of Buan vs. Lopez (145 SCRA 34), x x x and that is, forum shopping exists where the
elements of litis pendentia are present or where a final judgment in one case will amount to res
judicata in the other, as follows:

There thus exists between the action before this Court and RTC Case No. 86-36563 identity of parties,
or at least such parties as represent the same interests in both actions, as well as identity of rights
asserted and relief prayed for, the relief being founded on the same facts, and the identity on the two
preceding particulars is such that any judgment rendered in the other action, will, regardless of which
party is successful, amount to res adjudicata in the action under consideration: all the requisites, in fine,
of auter action pendant.'[58]

It is clear from the above-quoted rule that the petitioners are not guilty of forum shopping. The test
for determining whether a party has violated the rule against forum shopping is where a final judgment
in one case will amount to res adjudicata in the action under consideration. A cursory examination of
the cases filed by the petitioners does not show that the said cases are similar with each other. The
petition for certiorari in the Court of Appeals sought the nullification of the DAR Secretarys order to
proceed with the compulsory acquisition and distribution of the subject property. On the other hand,
the civil case in RTC of Malaybalay, Bukidnon for the annulment and cancellation of title issued in the
name of the Republic of the Philippines, with damages, was based on the following grounds: (1) the
DAR, in applying for cancellation of petitioner NQSRMDCs title, used documents which were earlier
declared null and void by the DARAB; (2) the cancellation of NQSRMDCs title was made without
payment of just compensation; and (3) without notice to NQSRMDC for the surrender of its title. The
present petition is entirely different from the said two cases as it seeks the nullification of the assailed
Win-Win Resolution of the Office of the President dated November 7, 1997, which resolution was issued
long after the previous two cases were instituted.
The fourth and final preliminary issue to be resolved is the motion for intervention filed by alleged
farmer-beneficiaries, which we have to deny for lack of merit. In their motion, movants contend that
they are the farmer-beneficiaries of the land in question, hence, are real parties in interest. To prove
this, they attached as Annex I in their motion a Master List of Farmer-Beneficiaries. Apparently, the
alleged master list was made pursuant to the directive in the dispositive portion of the assailed Win-Win
Resolution which directs the DAR to carefully and meticulously determine who among the claimants
are qualified farmer-beneficiaries. However, a perusal of the said document reveals that movants are
those purportedly Found Qualified and Recommended for Approval. In other words, movants are
merely recommendee farmer-beneficiaries.
The rule in this jurisdiction is that a real party in interest is a party who would be benefited or injured
by the judgment or is the party entitled to the avails of the suit. Real interestmeans
a present substantial interest, as distinguished from a mere expectancy or a future, contingent,
subordinate or consequential interest.[59] Undoubtedly, movants interest over the land in question is a
mere expectancy. Ergo, they are not real parties in interest.
Furthermore, the challenged resolution upon which movants based their motion is, as intimated
earlier, null and void. Hence, their motion for intervention has no leg to stand on.
Now to the main issue of whether the final and executory Decision dated March 29,1996 can still
be substantially modified by the Win-Win Resolution.
We rule in the negative.
The rules and regulations governing appeals to the Office of the President of the Philippines are
embodied in Administrative Order No. 18. Section 7 thereof provides:

SEC. 7. Decisions/resolutions/orders of the Office of the President shall, except as otherwise provided
for by special laws, become final after the lapse of fifteen (15) days from receipt of a copy thereof by
the parties, unless a motion for reconsideration thereof is filed within such period.

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

It is further provided for in Section 9 that The Rules of Court shall apply in a suppletory character
whenever practicable.
When the Office of the President issued the Order dated June 23,1997 declaring the Decision of
March 29, 1996 final and executory, as no one has seasonably filed a motion for reconsideration
thereto, the said Office had lost its jurisdiction to re-open the case, more so modify its Decision. Having
lost its jurisdiction, the Office of the President has no more authority to entertain the second motion for
reconsideration filed by respondent DAR Secretary, which second motion became the basis of the
assailed Win-Win Resolution. Section 7 of Administrative Order No. 18 and Section 4, Rule 43 of the
Revised Rules of Court mandate that only one (1) motion for reconsideration is allowed to be taken
from the Decision of March 29, 1996. And even if a second motion for reconsideration was permitted
to be filed in exceptionally meritorious cases, as provided in the second paragraph of Section 7 of AO
18, still the said motion should not have been entertained considering that the first motion for
reconsideration was not seasonably filed, thereby allowing the Decision of March 29, 1996 to lapse into
finality. Thus, the act of the Office of the President in re-opening the case and substantially modifying
its March 29,1996 Decision which had already become final and executory, was in gross disregard of
the rules and basic legal precept that accord finality to administrative determinations.
In San Luis, et al. vs. Court of Appeals, et al.[60] we held:

Since the decisions of both the Civil Service Commission and the Office of the President had long
become final and executory, the same can no longer be reviewed by the courts. It is well-established
in our jurisprudence that the decisions and orders of administrative agencies, rendered pursuant to
their quasi-judicial authority, have upon their finality, the force and binding effect of a final judgment
within the purview of the doctrine of res judicata [Brillantes v. Castro, 99 Phil. 497 (1956), Ipekdijna
Merchandizing Co., Inc. v. Court of Tax Appeals, G.R. No. L-15430, September 30, 1963, 9 SCRA 72.] The
rule of res judicata which forbids the reopening of a matter once judicially determined by competent
authority applies as well to the judicial and quasi-judicial acts of public, executive or administrative
officers and boards acting within their jurisdiction as to the judgments of courts having general judicial
powers [Brillantes v. Castro, supra at 503].
The orderly administration of justice requires that the judgments/resolutions of a court or quasi-
judicial body must reach a point of finality set by the law, rules and regulations. The noble purpose is
to write finis to disputes once and for all.[61] This is a fundamental principle in our justice system, without
which there would be no end to litigations. Utmost respect and adherence to this principle must always
be maintained by those who wield the power of adjudication. Any act which violates such principle
must immediately be struck down.
Therefore, the assailed Win-Win Resolution which substantially modified the Decision of March 29,
1996 after it has attained finality, is utterly void. Such void resolution, as aptly stressed by Justice Thomas
A. Street[62] in a 1918 case,[63] is a lawless thing, which can be treated as an outlaw and slain at sight,
or ignored wherever and whenever it exhibits its head.[64]
WHEREFORE, the present petition is hereby GRANTED. The challenged Resolution dated November
7, 1997, issued by the Office of the President in OP Case No. 96-C-6424, is hereby NULLIFIED and SET
ASIDE. The Motion For Leave To Intervene filed by alleged farmer-beneficiaries is hereby DENIED.
No pronouncement as to costs.
SO ORDERED.
FORTICH V CORONA (MR)

This pertains to the two (2) separate motions for reconsideration filed by herein respondents and
the applicants for intervention, seeking a reversal of our April 24, 1998 Decision nullifying the so-called
"win-win" Resolution dated November 7, 1997, issued by the Office of the President in O.P. Case No. 96-
C-6424, and denying the applicants' Motion For Leave To Intervene.
Respondents' motion is based on the following grounds:

"I.

THE SO-CALLED WIN-WIN RESOLUTION DATED NOVEMBER 7, 1997 IS NOT A VOID RESOLUTION AS IT SEEKS
TO CORRECT AN ERRONEOUS RULING. THE MARCH 29, 1996 DECISION OF THE OFFICE OF THE PRESIDENT
COULD NOT AS YET BECOME FINAL AND EXECUTORY AS TO BE BEYOND MODIFICATION.

"II.

THE PROPER REMEDY OF PETITIONERS IS A PETITION FOR REVIEW UNDER RULE 43 AND NOT A PETITION
FOR CERTIORARI UNDER RULE 65 OF THE RULES OF COURT.

"III.

THE FILING OF A MOTION FOR RECONSIDERATION IS A CONDITION SINE QUA NON BEFORE A PETITION
FOR CERTIORARI MAY BE FILED BECAUSE THE QUESTIONED RESOLUTION IS NOT PATENTLY ILLEGAL.

"IV.

PETITIONERS ARE GUILTY OF FORUM-SHOPPING BECAUSE ULTIMATELY PETITIONERS SEEK THE SAME RELIEF,
WHICH IS TO RESTRAIN THE DEPARTMENT OF AGRARIAN REFORM FROM PLACING THE SUBJECT 144-
HECTARE PROPERTY UNDER THE COMPREHENSIVE AGRARIAN REFORM LAW (CARL)."[1]

For their part, the grounds relied upon by the applicants for intervention are as follows:

"I.

THE INTERVENORS POSSESS A RIGHT TO INTERVENE IN THESE PROCEEDINGS.

"II.

THE MODIFICATION BY THE OFFICE OF THE PRESIDENT (OP) OF ITS 29 MARCH 1996 DECISION, THROUGH
THE 7 NOVEMBER 1997 'WIN-WIN' RESOLUTION, WAS NOT ERRONEOUS BUT WAS A VALID EXERCISE OF ITS
POWERS AND PREROGATIVES.

"III.

THE 'WIN-WIN' RESOLUTION PROPERLY ADDRESSES THE SUBSTANTIAL ISSUES RELATIVE TO THIS CASE."[2]
Both movants also ask that their respective motions be resolved by this Court en banc since the
issues they raise are, described by the respondents, "novel,"[3] or, as characterized by the applicants
for intervention, of "transcendental significance."[4] Most specifically, movants are presenting the issue
of whether or not the power of the local government units to reclassify lands is subject to the approval
of the Department of Agrarian Reform (DAR).
The instant motions are being opposed vehemently by herein petitioners.
The grounds raised here were extensively covered and resolved in our challenged Decision. A
minute resolution denying the instant motions with finality would have been sufficient, considering that
the same follows as a matter of course if warranted under the circumstances as in other equally
important cases. However, in view of the wide publicity and media coverage that this case has
generated, in addition to the demonstrations staged at the perimeter of this Court, as well as the many
letters coming from different sectors of society (the religious and the NGOs) and even letters from
abroad, we deem it necessary to write an extended resolution to again reiterate the basis for our April
24, 1998 Decision, and hopefully write finis to this controversy.
To support their request that their motions be referred to the Court en banc, the movants cited the
Resolutions of this Court dated February 9, 1993, in Bar Matter No. 209, which enumerates the cases
that may be resolved en banc, among which are the following:
"x x x x x x x x x

3. Cases raising novel questions of law;

xxxxxxxxx

8. Cases assigned to a division which in the opinion of at least three (3) members thereof merit the
attention of the Court en banc and are acceptable to a majority of the actual membership of the
Court en banc; and

x x x x x x x x x"
Regrettably, the issues presented before us by the movants are matters of no extraordinary import
to merit the attention of the Court en banc. Specifically, the issue of whether or not the power of the
local government units to reclassify lands is subject to the approval of the DAR is no longer novel, this
having been decided by this Court in the case of Province of Camarines Sur, et al. vs. Court of
Appeals[5]wherein we held that local government units need not obtain the approval of the DAR to
convert or reclassify lands from agricultural to non-agricultural use. The dispositive portion of the
Decision in the aforecited case states:

"WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals is set aside
insofar as it (a) nullifies the trial court's order allowing the Province of Camarines Sur to take possession
of private respondent's property; (b) orders the trial court to suspend the expropriation proceedings;
and (c) requires the Province of Camarines Sur to obtain the approval of the Department of Agrarian
Reform to convert or reclassify private respondent's property from agricultural to non-agricultural use.

"x x x x x x x x x" (Emphasis supplied)


Moreover, the Decision sought to be reconsidered was arrived at by a unanimous vote of all five
(5) members of the Second Division of this Court. Stated otherwise, this Second Division is of the opinion
that the matters raised by movants are nothing new and do not deserve the consideration of the
Court en banc. Thus, the participation of the full Court in the resolution of movants' motions for
reconsideration would be inappropriate.
We shall now resolve the respondents' motion for reconsideration.
In our Decision in question, we struck down as void the act of the Office of the President (OP) in
reopening the case in O.P. Case No. 96-C-6424 through the issuance of the November 7, 1997 "win-
win" Resolution which substantially modified its March 29, 1996 Decision that had long become final
and executory, being in gross disregard of the rules and basic legal precept that accord finality to
administrative determinations. It will be recalled that the March 29, 1996 OP Decision was declared by
the same office as final and executory in its Order dated June 23, 1997 after the respondents DAR's
motion for reconsideration of the said decision was denied in the same order for having been filed
beyond the 15-day reglementary period.
In their instant motion, the respondents contend that the "win-win" Resolution of November 7, 1997
"is not a void resolution as it seeks to correct an erroneous ruling," hence, "(t)he March 29, 1996
decision of the Office of the President could not as yet become final and executory as to be beyond
modification."[6]
The respondents explained that the DAR's failure to file on time the motion for reconsideration of
the March 29, 1996 OP Decision was "excusable:"

"The manner of service of the copy of the March 29, 1996 decision also made it impossible for DAR to
file its motion for reconsideration on time. The copy was received by the Records Section of the DAR,
then referred to the Office of the Secretary and then to the Bureau of Agrarian Legal Assistance. By the
time it was forwarded to the litigation office of the DAR, the period to file the motion for reconsideration
had already lapsed. Instead of resolving the motion for reconsideration on the merits in the interest of
substantial justice, the Office of the President denied the same for having been filed late."[7] (Emphasis
supplied)

We cannot agree with the respondents' contention that the June 23, 1997 OP Order which denied
the DAR's motion for reconsideration of the March 29, 1996 OP Decision for having been filed late was
"an erroneous ruling" which had to be corrected by the November 7, 1997 "win-win" Resolution. The
said denial of the DAR's motion for reconsideration was in accordance with Section 7 of Administrative
Order No. 18, dated February 12, 1987, which mandates that "decisions/resolutions/orders of the Office
of the President shall, except as otherwise provided for by special laws, become final after the lapse
of fifteen (15) days from receipt of a copy thereof x x x, unless a motion for reconsideration thereof
is filed within such period."[8]
Contrary to the respondents' submission, the late filing by the DAR of its motion for reconsideration
of the March 29, 1996 OP Decision is not excusable. The respondents' explanation that the DAR's office
procedure after receiving the copy of the March 29, 1996 OP Decision "made it impossible foe DAR to
file its motion for reconsideration on time" since the said decision had to be referred to the different
departments of the DAR, cannot be considered a valid justification. There is nothing wrong with
referring the decision to the departments concerned for the preparation of the motion for
reconsideration, but in doing so, the DAR must not disregard the reglementary period fixed by law, rule
or regulation. In other words, the DAR must develop a system of procedure that would enable it to
comply with the reglementary period for filing said motion. For, the rules relating to reglementary
period should not be made subservient to the internal office procedure of an administrative
body.Otherwise, the noble purpose of the rules prescribing a definite period for filing a motion for
reconsideration of a decision can easily be circumvented by the mere expediency of claiming a long
and arduous process of preparing the said motion involving several departments of the administrative
agency.
The respondents then faulted the Office of the President when they further stressed that it should
have resolved "the (DAR's) motion for reconsideration on the merits in the interest of substantial justice,"
instead of simply denying the same for having been filed late,[9] adding that "technicalities and
procedural lapses" should be "subordinated to the established merits of the case."[10] Respondents thus
plead for a relaxation in the application of the rules by overlooking procedural lapses committed by
the DAR.
We are persuaded.
Procedural rules, we must stress, should be treated with utmost respect and due regard since they
are designed to facilitate the adjudication of cases to remedy the worsening problem of delay in the
resolution of rival claims and in the administration of justice. The requirement is in pursuance to the bill
of rights inscribed in the Constitution which guarantees that "all persons shall have a right to the speedy
disposition of their before all judicial, quasi-judicial and administrative bodies,"[11] the adjudicatory
bodies and the parties to a case are thus enjoined to abide strictly by the rules.[12] While it is true that a
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.[13]There have been some instances wherein this Court allowed a relaxation in the application
of the rules, but this flexibility was "never intended to forge a bastion for erring litigants to violate the
rules with impunity."[14] A liberal interpretation and application of the rules of procedure can be resorted
to only in proper cases and under justifiable causes and circumstances.
In the instant case, we cannot grant respondents the relief prayed for since they have not shown
a justifiable for a relaxation of the rules. As we have discussed earlier, the DAR/s late filing of its motion
for reconsideration of the March 29, 1996 OP Decision was not justified. Hence, the final and executory
character of the said OP Decision can no longer be disturbed, much less substantially modified. Res
judicata has set in and the adjudicated thing or affair should forever be put to rest. It is in this sense that
we, in our decision under reconsideration, declared as void and of no binding effect the "win-win"
Resolution of November 7, 1997 which substantially modified the March 29, 1996 Decision, the said
resolution having been issued in excess of jurisdiction and in arrant violation of the fundamental and
time-honored principle of finality to administrative determinations.
The movants, however, complain that the case was decided by us on the basis of a "technicality,"
and, this has been the rallying cry of some newspaper columnists who insists that we resolve this case
not on mere "technical" grounds.
We do not think so.
It must be emphasized that a decision/resolution/order of an administrative body, court or tribunal
which is declared void on the ground that the same was rendered without or in excess of jurisdiction,
or with grave abuse of discretion, is by no means a mere technicality of law or procedure. It is
elementary that jurisdiction of a body, court or tribunal is an essential and mandatory requirement
before it can act on a case or controversy. And even if said body, court or tribunal has jurisdiction over
a case, but has acted in excess of its jurisdiction or with grave abuse of discretion, such act is still
invalid. The decision nullifying the questioned act is an adjudication on the merits.
In the instant case, several fatal violations of the law were committed, namely: (1) the DAR filed its
motion for reconsideration of the March 29, 1996 OP Decision way beyond reglementary period; (2)
after the said motion for reconsideration was denied for having been filed late, the March 29, 1996
Decision was declared final and executory, but the DAR still filed a second motion for reconsideration
which is prohibited by the rules;[15] (3) despite this, the second motion for reconsideration was
entertained by herein respondent, then Deputy Executive Secretary Renato C. Corona, and on the
basis thereof, issued the "win-win" Resolution dated November 7, 1997, substantially modifying the
March 29, 1996 Decision which had long become final and executory; and (4) the reopening of the
same case through the issuance of the November 7, 1997 "win-win" resolution was in flagrant
infringement of the doctrine of res judicata. These grave breaches of the law, rules and settled
jurisprudence are clearly substantial, not of technical nature.
It should be stressed that when the March 29, 1996 OP Decision was declared final and
executory, vested rights were acquired by the herein petitioners, namely, the province of Bukidnon,
the municipality of Sumilao, Bukidnon, and the NQSR Management and Development Corporation,
and all others who should be benefited by the said decision. Thus, we repeat, the issue here is not a
question of technicality but that of substance and merit. In the words of the learned Justice Artemio V.
Panganiban in the case of Videogram Regulatory Board vs. Court of Appeals, et al.,[16] "(j)ust as a losing
party has the right to file an appeal within the prescribed period, the winning party also has the
correlative right to enjoy the finality of the resolution of his/her case."
Another matter which the movants bring to our attention is that when the DAR's Order denying
petitioners' application for conversion was first brought by petitioner Carlos O. Fortich to the Office of
the President, the appropriate administrative rules were not complied with. We wish to point out that,
apparently, movants had the opportunity to questions this alleged lapsed in procedure but chose not
to avail of the same. For the "win-win" Resolution itself never mentioned this supposed procedural lapse
as an issue. Here, the issue which has been brought to the fore is the validity of the "win-win" Resolution
of November 7, 1997, not that of any other previous proceedings. The movants cannot now question
the supposed procedural lapse for the first time before us. it should have been raised and resolved at
the first opportunity, that is, at the administrative level.
The other grounds raised by respondents in their instant motion for reconsideration concerning the
propriety of petitioners' remedy, the absence of a motion for reconsideration of the "win-win" Resolution
before resorting to the present petition for certiorari, and forum shopping have already been
extensively dealt with in our challenged decision. We need not further elaborate on these grounds
except to state that the same lacks merit.
With respect to the motion for reconsideration filed by the applicants for intervention, we likewise
find the same unmeritorious. The issue of the applicants' right to intervene in this proceedings should
be laid to rest. The rule in this jurisdiction is that a party who wishes to intervene must have a "certain
right" or "legal interest" in the subject matter of the litigation.[17] Such interest must be "actual,
substantial, material, direct and immediate, and not simply contingent and expectant."[18]
Here, the applicants for intervention categorically admitted that they were not tenants of
petitioner NQSR Management and Development Corporation, but were merely seasonal farmworkers
in a pineapple plantation on the subject land which was under lease for ten (10) years to the Philippine
Packing Corporation.[19] Respondent, then DAR Secretary Ernesto Garilao, also admitted in his Order of
June 7, 1995 that "the subject land is neither tenanted nor validity covered for compulsory acquisition
xxx."[20]
Under Section 4, Article XIII of the 1987 Constitution, the right to own directly or collectively the land
they till belongs to the farmers and regular farmworkers who are landless, and in the case
of other farmworkers, the latter are entitled "to receive a just share of the fruits" of the land. The
pertinent portion of the aforecited constitutional provision mandates:

"Sec. 4. The State shall, by law, undertake an agrarian reform program founded on
the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands
they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. x x x" (Emphasis
supplied)

Commenting on the above-quoted provision, the eminent constitutionalist, Fr. Joaquin G. Bernas,
S.J., one of the framers of the 1987 Constitution, declares that under the agrarian reform program the
equitable distribution of the land is a right given to landless farmers and regular farmworkers to own
the land they till, while the other or seasonal farmworkers are only entitled to a just share of the fruits of
the land.[21] Being merely seasonal farmerworkers without a right to own, the applicants' motion for
intervention must necessarily fail as they have no legal or actual and substantial interest over the
subject land.
It is noteworthy that even the "win-win" Resolution of November 7, 1997 which the herein
respondents and the applicants for intervention seek to uphold did not recognize the latter as proper
parties to intervene in the case simply because the qualified farmer-beneficiaries have yet to be
meticulously determined as ordered in the said resolution. The dispositive portion of the "win-win"
Resolution reads:

"WHEREFORE, premises considered, the decision of the Office of the President, through Executive
Secretary Ruben Torres, dated March 29, 1996, is hereby MODIFIED as follows:

xxxxxxxxx

"(3) The Department of Agrarian Reform is hereby directed to carefully and meticulously determine who
among the claimants are qualified beneficiaries.

xxxxxxxxx

"We take note of the Memorandum in Intervention filed by 113 farmers on October 10, 1997 without
ruling on the propriety or merits thereof since it is unnecessary to pass upon it at this time.

"SO ORDERED."[22] (Emphasis supplied)

These are all that are necessary to dispose of the instant separate motions for reconsideration
considering that the crucial issue in the present petitioner for certiorari is simply the validity of the "win-
win" resolution.
But even if we tackle the other issues which the movants describe as "substantial," namely: (1)
whether the subject land is considered a prime agricultural land with irrigation facility; (2) whether the
land has long been covered by a Notice of Compulsory Acquisition (NCA); (3) whether the land is
tenanted, and if not, whether the applicants for intervention are qualified to become beneficiaries
thereof; and (4) whether the Sangguniang Bayan of Sumilao has the legal authority to reclassify the
land into industrial/institutional use, to our mind, the March 29, 1996 OP Decision has thoroughly and
properly disposed of the aforementioned issues. We quote the pertinent portions of the said Decision:

"After a careful evaluation of the petition vis-avis the grounds upon which the denial thereof by
Secretary Garilao was based, we find that the instant application for conversion by the Municipality of
Sumilao, Bukidnon is impressed with merit. To be sure, converting the land in question from agricultural
to agro-industrial would open great opportunities for employment and bring real development in the
area towards a sustained economic growth of the municipality. On the other hand, distributing the land
to would-be beneficiaries (who are not even tenants, as there are none) does not guarantee such
benefits.

"Nevertheless, on the issue that the land is considered a prime agricultural land with irrigation facility it
maybe appropriate to mention that, as claimed by petitioner, while it is true that there is, indeed, an
irrigation facility in the area, the same merely passes thru the property (as a right of way) to provide
water to the ricelands located on the lower portion thereof. the land itself, subject of the instant petition,
is not irrigated as the same was, for several years, planted with pineapple by the Philippine-Packing
Corporation.

"On the issue that the land has long been covered by a Notice of Compulsory Acquisition (NCA) and
that the existing policy on withdrawal or lifting on areas covered by NCA is not applicable, suffice it to
state that the said NCA was declared null and void by the Department of Agrarian Reform Adjudication
Board (DARAB) as early as March 1, 1992. Deciding in favor of NQSRMDC, the DARAB correctly pointed
out that under Section 8 R.A. No. 6657, the subject property could not validly be the subject of
compulsory acquisition until after the expiration of the lease contract with Del Monte Philippines, a
Multi-National Company, or until April 1994, and ordered the DAR Regional Office and the land Bank
of the Philippines, both in Butuan City, to desist from pursuing any activity or activities covering
petitioner's land.

"On this score, we take special notice of the fact that the Quisumbing family has already contributed
substantially to the land reform program of the government, as follows: 300 hectares of rice land in
Nueva Ecija in the 70's and another 100 hectares in the nearby Municipality of Impasugong, Bukidnon,
ten (10) years ago, for which they have not received 'just compensation' up to this time.

"Neither can the assertion that 'there is no clear and tangible compensation package arrangements
for the beneficiaries' hold water as, in the first place, there are no beneficiaries to speak about, for the
land is not tenanted as already stated.

"Nor can procedural lapses in the manner of identifying/reclassifying the subject property for agro-
industrial purposes be allowed to defeat the very purpose of the law granting autonomy to local
government units in the management of their local affairs. Stated more simply, the language of Section
20 of R.A. No. 7160, supra, is clear and affords no room for any other interpretation. By unequivocal
legal mandate, it grants local government units autonomy in their affairs including the power to convert
portions of their agricultural lands and provide for the manner of their utilization and disposition to
enable them to attain their fullest development as self-reliant communities.

"WHEREFORE, in pursuant of the spirit and intent of the said legal mandate and in view of the favorable
recommendations of the various government agencies abovementioned, the subject Order, dated
November 14, 1994 of the Hon. Secretary, Department of Agrarian Reform, is hereby SET ASIDE and the
instant application of NQSRMDC/BAIDA is hereby APPROVED."[23] (Emphasis supplied)

It is axiomatic that factual findings of administrative agencies which have acquired expertise in
their field are binding and conclusive on the Court,[24] considering that the Office of the President is
presumed to be most competent in matters falling within its domain.
The interest of justice is invoked by movants. We are aware of that famous adage of the late
President Ramon Magsaysay that "those who have less in life should have more in law." Our affirmation
of the finality of the March 29, 1996 OP Decision is precisely pro-poor considering that more of the
impoverished of society will be benefited by the agro-economical development of the disputed land
which the province of Bukidnon and the municipality of Sumilao, Bukidnon intend to undertake. To our
mind, the OP Decision of March 29, 1996 was for the eventual benefit of the many, not just of the
few. This is clearly shown from the development plan on the subject land as conceived by the
petitioners. The said plan is supposed to have the following components as indicated in the OP
Decision of March 29, 1996:

"1. The Development Academy of Mindanao which constitutes the following: Institute for Continuing
Higher Education; Institute for Livelihood Science (Vocational and Technical School); Institute for
Agribusiness Research; Museum, Library, Cultural Center, and Mindanao Sports Developments
Complex which covers an area of 24 hectares;

"2. Bukidnon Agro-Industrial Park which consists of corn processing for corn oil, corn starch, various corn
products; rice processing for wine, rice-based snacks, exportable rice; cassava processing for starch,
alcohol and food delicacies; processing plants, fruits and fruit products such as juices; processing plants
for vegetables processed and prepared for market; cold storage and ice plant; cannery system;
commercial stores; public market; and abattoir needing about 67 hectares;

"3. Forest development which includes open spaces and parks for recreation, horse-back riding,
memorial and mini-zoo estimated to cover 33 hectares; and
"4. Support facilities which comprise the construction of a 360-room hotel, restaurants, dormitories and
a housing covering an area of 20 hectares."[25]

Expressing full support for the proposed project, the Sangguniang Bayan of Sumilao, Bukidnon, on
March 4, 1993, enacted Ordinance No. 24 converting or re-classifying the subject 144-hectare land
from agricultural to industrial/institutional use with a view of providing an opportunity to attract investors
who can inject new economic vitality, provide more jobs and raise the income of its people.The said
project was also supported by the Bukidnon Provincial Board which, on the basis of a Joint Committee
Report submitted by its Committee on Laws, Committee on Agrarian Reform and Socio-Economic
Committee, approved the said ordinance on February 1, 1994, now docketed as Resolution No. 94-95.
Impressed with the proposed project, several government agencies and a private cooperative,
including the people of the affected barangay, recommended the same. Again, we quote the
pertinent portion of the OP Decision of March 29, 1996:

"The said NQSRMDC Proposal was, per Certification dated January 4, 1995, adopted by the Department
of Trade and Industry, Bukidnon Provincial Office, as one of its flagship projects. The same was likewise
favorably recommended by the Provincial Development Council of Bukidnon; the municipal,
provincial and regional office of the DAR; the Regional Office (Region X) of the DENR (which issued an
Environmental Compliance Certificate on June 5, 1995); the Executive Director, signing 'By Authority of
PAUL G. DOMINGUEZ,' Office of the President - Mindanao; the Secretary of DILG; and Undersecretary
of DECS Wilfredo D. Clemente.

"In the same vein, the Natioal Irrigation Administration, Provincial Irrigation Office, Bagontaas Valencia,
Bukidnon, thru Mr. Juluis S. Maquiling, Chief, Provincial Irrigation Office, interposed NO OBJECTION to
the proposed conversion x x x. Also, the Kisolom-San Vicente Irrigators Multi Purpose Cooperative, San
Vicente, Sumilao, Bukidnon, interposed no objection to the proposed conversion of the land in question
'as it will provide more economic benefits to the community in terms of outside investments that will
come and employment opportunities that will be generated by the projects to be put up x x x.'

"On the same score, it is represented that during the public consultation held at the Kisolan Elementary
School on 18 March 1995 with Director Jose Macalindong of DAR Central Office and DECS
Undersecretary Clemente, the people of the affected barangay rallied behind their respective officials
in endorsing the project."[26] (Emphasis supplied)

In this regard, the petitioners gave this assurance: "The proposed project is petitioners' way of
helping insure food, shelter and lifetime security of the greater majority of Sumilao's 22,000 people. It is
capable of employing thousands of residents, enabling them to earn good income ranging about
P40,000.00 to P50,000.00 for each."[27]
We express our grave concern with the manner some sectors of society have been trying to
influence this Court into resolving this case on the basis of considerations other than the applicable
law, rules and settled jurisprudence and the evidence on record. We wish to emphasize that
withstanding the previous adverse comments by some columnists in the print media, the assailed
Decision was arrived at in the pursuit of justice and the rule of law.
Finally, for those who refuse to understand, no explanation is possible, but for those who
understand, no explanation is necessary.
WHEREFORE, the separate motions for reconsideration of the April 24, 1998 Decision of this Court,
filed by the respondents and the applicants for intervention, are hereby DENIED with FINALITY.
SO ORDERED.
Mendoza, J., concur.
Melo, J., I join in Justice Puno's separate opinion.
Puno, J., Please see Separate Opinion.

RA 6657 CHAPTER XI
Program Implementation

Section 41. The Presidential Agrarian Reform Council. — The Presidential Agrarian Reform Council
(PARC) shall be composed of the President of the Philippines as Chairman, the Secretary of Agrarian
Reform as Vice-Chairman and the following as members; Secretaries of the Departments of
Agriculture; Environment and Natural Resources; Budget and Management; Local Government: Public
Works and Highways; Trade and Industry; Finance; Labor and Employment; Director-General of the
National Economic and Development Authority; President, Land Bank of the Philippines; Administrator,
National Irrigation Administration; and three (3) representatives of affected landowners to represent
Luzon, Visayas and Mindanao; six (6) representatives of agrarian reform beneficiaries, two (2) each
from Luzon, Visayas and Mindanao, provided that one of them shall be from the cultural communities.

Section 42. Executive Committee. — There shall be an Executive Committee (EXCOM) of the PARC
composed of the Secretary of the DAR as Chairman, and such other members as the President may
designate, taking into account Article XIII, Section 5 of the Constitution. Unless otherwise directed by
PARC, the EXCOM may meet and decide on any and all matters in between meetings of the PARC:
provided, however, that its decisions must be reported to the PARC immediately and not later than
the next meeting.

Section 43. Secretariat. — A PARC Secretariat is hereby established to provide general support and
coordinative services such as inter-agency linkages; program and project appraisal and evaluation
and general operations monitoring for the PARC.

The Secretariat shall be headed by the Secretary of Agrarian Reform who shall be assisted by an
Undersecretary and supported by a staff whose composition shall be determined by the PARC
Executive Committee and whose compensation shall be chargeable against the Agrarian Reform
Fund. All officers and employees of the Secretariat shall be appointed by the Secretary of Agrarian
Reform.

Section 44. Provincial Agrarian Reform Coordinating Committee (PARCCOM). — A Provincial Agrarian
Reform Coordinating Committee (PARCCOM) is hereby created in each province, composed of a
Chairman, who shall be appointed by the President upon the recommendation of the EXCOM, the
Provincial Agrarian Reform Officer as Executive Officer, and one representative each from the
Departments of Agriculture, and of Environment and Natural Resources and from the LBP, one
representative each from existing farmers' organizations, agricultural cooperatives and non-
governmental organizations in the province; two representatives from landowners, at least one of
whom shall be a producer representing the principal crop of the province, and two representatives
from farmer and farmworker-beneficiaries, at least one of whom shall be a farmer or farmworker
representing the principal crop of the province, as members: provided, that in areas where there are
cultural communities, the latter shall likewise have one representative.

The PARCCOM shall coordinate and monitor the implementation of the CARP in the province.t shall
provide information on the provisions of the CARP, guidelines issued by the PARC and on the progress
of the CARP in the province.

Section 45. Province-by-Province Implementation. — The PARC shall provide the guidelines for a
province-by-province implementation of the CARP. The ten-year program of distribution of public and
private lands in each province shall be adjusted from year by the province's PARCCOM in accordance
with the level of operations previously established by the PARC, in every case ensuring that support
services are available or have been programmed before actual distribution is effected.

Section 46. Barangay Agrarian Reform Committee (BARC). — Unless otherwise provided in this Act, the
provisions of Executive Order No. 229 regarding the organization of the Barangay Agrarian Reform
Committee (BARC) shall be in effect.

Section 47. Functions of the BARC. — In addition to those provided in Executive Order No. 229, the BARC
shall have the following functions:

(a) Mediate and conciliate between parties involved in an agrarian dispute including matters
related to tenurial and financial arrangements;

(b) Assist in the identification of qualified beneficiaries and landowners within the barangay;

(c) Attest to the accuracy of the initial parcellary mapping of the beneficiary's tillage;

(d) Assist qualified beneficiaries in obtaining credit from lending institutions;

(e) Assist in the initial determination of the value of the land;


(f) Assist the DAR representatives in the preparation of periodic reports on the CARP
implementation for submission to the DAR;

(g) Coordinate the delivery of support services to beneficiaries; and

(h) Perform such other functions as may be assigned by the DAR.

(2) The BARC shall endeavor to mediate, conciliate and settle agrarian disputes lodged before it within
thirty (30) days from its taking cognizance thereof.f after the lapse of the thirty day period, it is unable
to settle the dispute, it shall issue a certificate of its proceedings and shall furnish a copy thereof upon
the parties within seven (7) days after the expiration of the thirty-day period.

Section 48. Legal Assistance. — The BARC or any member thereof may, whenever necessary in the
exercise of any of its functions hereunder, seek the legal assistance of the DAR and the provincial, city,
or municipal government.

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

EO 129-A Sec. 13. Agrarian Reform Adjudication Board. There is hereby created an Agrarian Reform
Adjudication Board under the Office of the Secretary. The Board shall be composed of the Secretary
as Chairman, two (2) Undersecretaries as may be designated by the Secretary, the Assistant Secretary
for Legal Affairs, and three (3) others to be appointed by the President upon the recommendation of
the Secretary as members. A Secretariat shall be constituted to support the Board. The Board shall
assume the powers and functions with respect to the adjudication of agrarian reform cases under
Executive Order No. 229 and this Executive Order. These powers and functions may be delegated to
the regional offices of the Department in accordance with rules and regulations to be promulgated
by the Board.

Financing

Section 63. Funding Source. — The initial amount needed to implement this Act for the period of ten
(10) years upon approval hereof shall be funded from the Agrarian Reform Fund created under
Sections 20 and 21 of Executive Order No. 229.

Additional amounts are hereby authorized to be appropriated as and when needed to augment the
Agrarian Reform Fund in order to fully implement the provisions of this Act.

Sources of funding or appropriations shall include the following:

(a) Proceeds of the sales of the Assets Privatization Trust;

(b) All receipts from assets recovered and from sales of ill-gotten wealth recovered through the
Presidential Commission on Good Government;

(c) Proceeds of the disposition of the properties of the Government in foreign countries;

(d) Portion of amounts accruing to the Philippines from all sources of official foreign grants and
concessional financing from all countries, to be used for the specific purposes of financing
production credits, infrastructures, and other support services required by this Act;

(e) Other government funds not otherwise appropriated.

All funds appropriated to implement the provisions of this Act shall be considered continuing
appropriations during the period of its implementation.

Section 64. Financial Intermediary for the CARP. — The Land Bank of the Philippines shall be the
financial intermediary for the CARP, and shall insure that the social justice objectives of the CARP shall
enjoy a preference among its priorities.
EO 229 SECTION 21. Supplemental Appropriations. — The amount of TWO BILLION SEVEN HUNDRED
MILLION PESOS (P2.7 billion) is hereby appropriated to cover the supplemental requirements of the
CARP for 1987, to be sourced from the receipts of the sale of ill-gotten wealth recovered through the
Presidential Commission on Good Government and the proceeds from the sale of assets by the APT.
The amount collected from these sources shall accrue to The Agrarian Reform Fund and shall likewise
be considered automatically appropriated for the purpose authorized in this Order. CHAPTER VI
Sanctions

SECTION 22. Permanent Disqualification. — Persons, associations, or entities who prematurely enter the
land to avail themselves of the rights and benefits hereunder, shall be permanently disqualified from
receiving benefits and shall forfeit their rights hereunder.

Republic Act No. 8532 February 23, 1998

AN ACT STRENGTHENING FURTHER THE COMPREHENSIVE AGRARIAN REFORM PROGRAM (CARP), BY


PROVIDING AUGMENTATION FUND THEREFOR, AMENDING FOR THE PURPOSE SECTION 63 OF REPUBLIC
ACT NO. 6657, OTHERWISE KNOWN AS "THE CARP LAW OF 1988"

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::

Section 1. Sec. 63 of Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform
Law of 1988 is hereby amended to read as follows:

"Sec. 63. Funding source. – The amount needed to implement this Act until the year 2008 shall
be funded from the Agrarian Reform Fund.

"Additional amounts necessary for this purpose are hereby authorized to be appropriated in
excess of the initial funds, amounting to Fifty billion pesos (P50,000,000,000.00) provided under
Sections 20 and 21 of Executive Order No. 229.

"The additional amount hereby authorized to be appropriated shall in no case exceed Fifty
billion pesos (P50,000,000,000.00).

"Sources of funding or appropriations shall include the following:

"a) Proceeds of the sales of the Assets Privatization Trust;

"b) All receipts from assets recovered and from sales of ill-gotten wealth recovered
through the Presidential Commission on Good Government;

"c) Proceeds of the disposition of the properties of the Government in foreign countries,
for the specific purposes of financing production credits, infrastructure and other support
services required by this Act;

"d) All income and collections arising from the agrarian reform operations, projects and
programs of CARP implementing agencies;

"e) Portion of amounts accruing to the Philippines from all sources of official foreign aid
grants and concessional financing from all countries, to be used for the specific purposes
of financing production, credits, infrastructures, and other support services required by
this Act;

"f) Yearly appropriations of no less than Three billion pesos (P3,000,000,000.00) from the
General Appropriations Act;

"g) Other government funds not otherwise appropriated."

Section 2. This Act shall take effect within fifteen (15) days following the completion of its publication in
at least two (2) newspapers of general circulation.

Approved: February 23, 1998


RA 9700 SECTION 21. Section 63 of Republic Act No. 6657, as amended, is hereby further amended to
read as follows: "SEC. 63. Funding Source. — The amount needed to further implement the CARP as
provided in this Act, until June 30, 2014, upon expiration of funding under Republic Act No. 8532 and
other pertinent laws, shall be funded from the Agrarian Reform Fund and other funding sources in the
amount of at least One hundred fifty billion pesos (P150,000,000,000.00). "Additional amounts are
hereby authorized to be appropriated as and when needed to augment the Agrarian Reform Fund in
order to fully implement the provisions of this Act during the five (5)-year extension period. "Sources of
funding or appropriations shall include the following: "(a) Proceeds of the sales of the Privatization and
Management Office (PMO); "(b) All receipts from assets recovered and from sales of ill-gotten wealth
recovered through the PCGG excluding the amount appropriated for compensation to victims of
human rights violations under the applicable law; ITCcAD "(c) Proceeds of the disposition and
development of the properties of the Government in foreign countries, for the specific purposes of
financing production credits, infrastructure and other support services required by this Act; "(d) All
income and collections of whatever form and nature arising from the agrarian reform operations,
projects and programs of the DAR and other CARP implementing agencies; "(e) Portion of amounts
accruing to the Philippines from all sources of official foreign aid grants and concessional financing
from all countries, to be used for the specific purposes of financing productions, credits, infrastructures,
and other support services required by this Act; "(f) Yearly appropriations of no less than Five billion
pesos (P5,000,000,000.00) from the General Appropriations Act; "(g) Gratuitous financial assistance from
legitimate sources; and (h) Other government funds not otherwise appropriated. "All funds
appropriated to implement the provisions of this Act shall be considered continuing appropriations
during the period of its implementation: Provided, That if the need arises, specific amounts for bond
redemptions, interest payments and other existing obligations arising from the implementation of the
program shall be included in the annual General Appropriations Act: Provided, further, That all just
compensation payments to landowners, including execution of judgments therefor, shall only be
sourced from the Agrarian Reform Fund: Provided, however, That just compensation payments that
cannot be covered within the approved annual budget of the program shall be chargeable against
the debt service program of the national government, or any unprogrammed item in the General
Appropriations Act: Provided, finally, That after the completion of the land acquisition and distribution
component of the CARP, the yearly appropriation shall be allocated fully to support services, agrarian
justice delivery and operational requirements of the DAR and the other CARP implementing agencies."

Administrative Adjudication

Section 50. Quasi-Judicial Powers of the DAR. — The DAR is hereby vested with the primary jurisdiction
to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over
all matters involving the implementation of agrarian reform except those falling under the exclusive
jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural
Resources (DENR).

It shall not be bound by technical rules of procedure and evidence but shall proceed to hear and
decide all cases, disputes or controversies in a most expeditious manner, employing all reasonable
means to ascertain the facts of every case in accordance with justice and equity and the merits of the
case. Toward this end, it shall adopt a uniform rule of procedure to achieve a just, expeditious and
inexpensive determination for every action or proceeding before it.

It shall have the power to summon witnesses, administer oaths, take testimony, require submission of
reports, compel the production of books and documents and answers to interrogatories and issue
subpoena, and subpoena duces tecum, and enforce its writs through sheriffs or other duly deputized
officers.t shall likewise have the power to punish direct and indirect contempts in the same manner
and subject to the same penalties as provided in the Rules of Court.

Responsible farmer leaders shall be allowed to represent themselves, their fellow farmers, or their
organizations in any proceedings before the DAR: provided, however, that when there are two or more
representatives for any individual or group, the representatives should choose only one among
themselves to represent such party or group before any DAR proceedings.

Notwithstanding an appeal to the Court of Appeals, the decision of the DAR shall be immediately
executory.
Section 51. Finality of Determination. — Any case or controversy before it shall be decided within thirty
(30) days after it is submitted for resolution. Only one (1) motion for reconsideration shall be allowed.
Any order, ruling or decision shall be final after the lapse of fifteen (15) days from receipt of a copy
thereof.

Section 52. Frivolous Appeals. — To discourage frivolous or dilatory appeals from the decisions or orders
on the local or provincial levels, the DAR may impose reasonable penalties, including but not limited
to fines or censures upon erring parties.

Section 53. Certification of the BARC. — The DAR shall not take cognizance of any agrarian dispute or
controversy unless a certification from the BARC that the dispute has been submitted to it for mediation
and conciliation without any success of settlement is presented: provided, however, that if no
certification is issued by the BARC within thirty (30) days after a matter or issue is submitted to it for
mediation or conciliation the case or dispute may be brought before the PARC.

DAR ADMINISTRATIVE ORDER NO. 03-03

SUBJECT : 2003 Rules for Agrarian Law Implementation Cases


Pursuant to Sections 49 and 50 of Republic Act (RA) No. 6657, or the "Comprehensive
Agrarian Reform Law of 1988" (CARL), and in order to foster a just, inexpensive, and expeditious
determination of agrarian cases, the following are the Department of Agrarian Reform (DAR) rules
governing the adjudication of cases involving Agrarian Law Implementation (ALI):
RULE I
Preliminary Provisions
SECTION 1. Title. These Rules shall be known as the "2003 Rules of Procedure for ALI
Cases".
SECTION 2. ALI cases. These Rules shall govern all cases arising from or involving:
2.1. Classification and identification of landholdings for coverage under the
agrarian reform program and the initial issuance of Certificate of Land Ownership
Awards (CLOAs) and Emancipation Patents (EPs), including protests or oppositions
thereto and petitions for lifting of such coverage;
2.2. Classification, identification, inclusion, exclusion, qualification, or
disqualification of potential/actual farmer-beneficiaries;
2.3. Subdivision surveys of land under Comprehensive Agrarian Reform (CARP);
2.4. Recall, or cancellation of provisional lease rentals, Certificates of Land Transfers
(CLTs) and CARP Beneficiary Certificates (CBCs) in cases outside the purview
of Presidential Decree (PD) No. 816, including the issuance, recall, or cancellation of
Emancipation Patents (EPs) or Certificates of Land Ownership Awards (CLOAs) not yet
registered with the Register of Deeds;
2.5. Exercise of the right of retention by landowner;
2.6. Application for exemption from coverage under Section 10 of RA 6657;
2.7. Application for exemption pursuant to Department of Justice (DOJ) Opinion
No. 44 (1990);
2.8. Exclusion from CARP coverage of agricultural land used for livestock, swine,
and poultry raising;
2.9. Cases of exemption/exclusion of fishpond and prawn farms from the coverage
of CARP pursuant to RA 7881;
2.10. Issuance of Certificate of Exemption for land subject of Voluntary Offer to Sell
(VOS) and Compulsory Acquisition (CA) found unsuitable for agricultural purposes;
2.11. Application for conversion of agricultural land to residential, commercial,
industrial, or other non agricultural uses and purposes including protests or oppositions
thereto;
2.12. Determination of the rights of agrarian reform beneficiaries to homelots;
2.13. Disposition of excess area of the tenant's/farmer-beneficiary's landholdings;
2.14. Increase in area of tillage of a tenant/farmer-beneficiary;
2.15. Conflict of claims in landed estates administered by DAR and its predecessors;
and
2.16. Such other agrarian cases, disputes, matters or concerns referred to it by the
Secretary of the DAR.
SECTION 3. DARAB cases. These Rules shall not apply to cases falling within the
exclusive original jurisdiction of the Department of Agrarian Reform Adjudication Board (DARAB)
and its Regional or Provincial Agrarian Reform Adjudicators (RARAD or PARAD) which include:
3.1. The rights and obligations of persons, whether natural or juridical, engaged in
the management, cultivation, and use of all agricultural lands covered by RA
6657 and other related agrarian laws;
3.2. The preliminary administrative determination of reasonable and just
compensation of lands acquired under PD 27 and the CARP;
3.3. The annulment or cancellation of lease contracts or deeds of sale or their
amendments involving lands under the administration and disposition of the DAR or
Land Bank of the Philippines (LBP);
3.4. Those cases involving the ejectment and dispossession of tenants and/or
leaseholders;
3.5. Those cases involving the sale, alienation, pre-emption, and redemption of
agricultural lands under the coverage of the CARL or other agrarian laws;
3.6. Those involving the correction, partition, cancellation, secondary and
subsequent issuances of CLOAs and EPs which are registered with the Land
Registration Authority;
3.7. Those cases involving the review of leasehold rentals;
3.8. Those cases involving the collection of amortizations on payments for lands
awarded under PD 27 (as amended), RA 3844 (as amended), andRA 6657 (as
amended) and other related laws, decrees, orders, instructions, rules, and regulations,
as well as payment for residential, commercial, and industrial lots within the settlement
and resettlement areas under the administration and disposition of the DAR;
3.9. Those cases involving the annulment or rescission of lease contracts and deeds
of sale, and the cancellation or amendment of titles pertaining to agricultural lands
under the administration and disposition of the DAR and LBP; as well as EPs issued
under PD 266, Homestead Patents, Free Patents, and miscellaneous sales patents to
settlers in settlement and re-settlement areas under the administration and disposition
of the DAR; ScHAIT
3.10. Those cases involving boundary disputes over lands under the administration
and disposition of the DAR and the LBP, which are transferred, distributed, and/or sold
to tenant-beneficiaries and are covered by deeds of sale, patents, and certificates
of title;
3.11. Those cases involving the determination of title to agricultural lands where this
issue is raised in an agrarian dispute by any of the parties or a third person in
connection with the possession thereof for the purpose of preserving the tenure of the
agricultural lessee or actual tenant-farmer or farmer-beneficiaries and effecting the
ouster of the interloper or intruder in one and the same proceeding;
3.12. Those cases previously falling under the original and exclusive jurisdiction of the
defunct Court of Agrarian Relations under Section 12 ofPD 946 except those cases
falling under the proper courts or other quasi-judicial bodies; and
3.13. Such other agrarian cases, disputes, matters or concerns referred to it by the
Secretary of the DAR.
SECTION 4. Construction. In accordance with Section 50 of RA 6657, the DAR shall not
be bound by technical rules of procedure and evidence but shall proceed to hear and decide all
cases, disputes or controversies in a most expeditious manner, employing all reasonable means to
ascertain the facts of every case in accordance with justice, equity, and the merits of the case. In
case of doubt, the deciding authority shall liberally construe or interpret these Rules in favor of
carrying out the objectives of agrarian reform, to promote a just, expeditious, and inexpensive
determination of agrarian cases. All references in these Rules in the masculine gender form
(he/him/his) shall equally apply to the feminine gender form (she/her/hers) or group form
(it/its/their).
SECTION 5. Prejudicial Issue. When an ALI case raises a prejudicial issue, such issue
being a DARAB case under Section 3 hereof, the Secretary/Regional Director shall suspend the
case pending resolution of the prejudicial question. Conversely, when a case pending before the
DARAB or its Adjudicators raises a prejudicial issue, such issue being an ALI case under Section 2
hereof and falling within the exclusive jurisdiction of the Secretary/Regional Director, the
Adjudicating Authority shall suspend the case pending the resolution of the prejudicial question in
the proper forum.
SECTION 6. Referral of cases. When a party erroneously files a case under Section 2
hereof before the DARAB, the receiving official shall refer the case to the proper DAR office for
appropriate action within five (5) working days after determination that said case is within the
jurisdiction of the Secretary. Likewise, when a party erroneously files a case under Section 3 hereof
before any office other than the DARAB or its adjudicators, the receiving official shall, within five (5)
working days, refer the case to the DARAB or its adjudicators.
RULE II
Jurisdiction Over ALI Cases
SECTION 7. General Jurisdiction. The Regional Director shall exercise primary
jurisdiction over all agrarian law implementation cases except when a separate special rule vests
primary jurisdiction in a different DAR office.
SECTION 8. Jurisdiction over protests or petitions to lift coverage. The Regional Director
shall exercise primary jurisdiction over protests against CARP coverage or petitions to lift notice of
coverage. If the ground for the protest or petition to lift CARP coverage is exemption or exclusion
of the subject land from CARP coverage, the Regional Director shall either resolve the same if he
has jurisdiction, or refer the matter to the Secretary if jurisdiction over the case belongs to the latter.
SECTION 9. Jurisdiction over land use conversions and exemptions/exclusions from
CARP coverage. Separate special rules governing applications for land use conversion and
exemption/exclusion from CARP coverage shall delineate the jurisdiction of the recommending
and approving authorities thereunder.
SECTION 10. Appellate Jurisdiction. The Secretary shall exercise appellate jurisdiction
over all ALI cases, and may delegate the resolution of appeals to any Undersecretary.
SECTION 11. Jurisdiction over Flashpoint cases. Any certification declaring a case as
"flashpoint" in accordance with the criteria and procedure in DAR Memorandum Circular (MC) No.
13 [1997] shall not divest any authority from the DAR official for resolving the case. A flashpoint
certification merely serves to accord utmost priority to the resolution of the case subject thereof.
RULE III
Procedure
SECTION 12. Applicability. The procedures herein shall generally apply to all ALI cases
except for specific situations such as applications for land use conversion and exemption/exclusion
from CARP coverage which shall be governed by the special procedures therefor.
SECTION 13. Commencement of an action.
13.1. Without or prior to issuance of notice of CARP coverage — When the land in
question has never been the subject of a notice of coverage, an ALI case involving
said land shall commence upon filing of the initiatory pleading or application before
the Regional Director or Provincial Agrarian Reform Officer (PARO).
13.1.1. Commencement at the DAR Regional Office (DARRO)— The
DARRO shall docket the case and transmit the case folder to the PARO within
five (5) working days from filing, with notice to all parties. Upon receipt, the
PARO shall, within five (5) working days and with notice to all parties, transmit
the case folder to the MARO who shall conduct the necessary
mediation/conciliation proceedings.
13.1.2. Commencement at the DAR Provincial Office (DARPO)— The
PARO shall docket the case and submit a case brief to the Regional Director
within five (5) working days, with notice to all parties. Within the same five (5)
working-day period and with notice to all parties, the PARO shall transmit the
case folder to the MARO who shall conduct the necessary
mediation/conciliation proceedings.
13.2. After issuance of notice of coverage — Commencement shall be at the DAR
Municipal Office (DARMO). When the applicant/petitioner commences the case at
any other DAR office, the receiving office shall transmit the case folder to the DARMO
or proper DAR office in accordance with the pertinent order and/or circular
governing the subject matter. Only the real-party-in-interest may file a
protest/opposition or petition to lift CARP coverage and may only do so within sixty
(60) calendar days from receipt of the notice of coverage; a protesting party who
receives the notice of coverage by newspaper publication shall file his protest /
opposition / petition within sixty (60) calendar days from publication date; failure to
file the same within the period shall merit outright dismissal of the case.
SECTION 14. Forum Shopping.
14.1. The applicant/petitioner shall certify under oath in the application or initiatory
pleading, or its integral annex, a sworn certification that:
14.1.1. He has not theretofore commenced any other action or
proceeding involving the same land or issue in any court, tribunal, or quasi-
judicial agency;
14.1.2. To the best of his knowledge, no such action or proceeding is
pending in any court, tribunal, or quasi-judicial agency;
14.1.3. If there is any action or proceeding which is either pending or may
have been terminated, he shall state the status thereof; and
14.1.4. If he thereafter learns that a similar action or proceeding has been
filed or is pending before any court, tribunal, or quasi-judicial agency, he
undertakes to report that fact within five (5) days therefrom to the DAR office
where the ALI case is pending.
14.2. Failure to file a certification of non-forum-shopping and/or subsequent
discovery of commission of forum-shopping shall be grounds for summary dismissal of
the ALI case. Dismissal for failure to file certification of non-forum-shopping shall be
without prejudice to re-filing of the case. Dismissal on the ground of subsequent
discovery of commission of forum-shopping shall be with prejudice and the
applicant/petitioner shall be liable for costs, except in the following cases:
14.2.1. When he thereafter learns that a similar action or proceeding has
been filed or is pending before any court, tribunal, or quasi-judicial agency,
and he reported that fact within five (5) days therefrom to the DAR office
where the ALI case is pending;
14.2.2. The applicant/petitioner is a pauper litigant; and
14.2.3. Where these Rules allow cross-referral between DARAB and ALI
cases.
SECTION 15. Pauper Litigant. A party who is a farmer, agricultural lessee, share tenant,
farm worker, actual tiller, occupant, collective or cooperative of the foregoing beneficiaries, or
amortizing owner-cultivator, shall allege such fact in a sworn statement and shall thereafter benefit
from the privileges for pauper litigants without need of further proof. He shall continue to enjoy such
privileges in all levels of the proceedings until finality of the case.
SECTION 16. Intervention. No intervention shall be given due course unless the
intervenor shows proof that he has a substantial right or interest in the case which he cannot
adequately protect in another case. This notwithstanding, potential farmer beneficiaries have a
substantial right, interest, and legal personality to intervene. No intervenor shall, however, be
allowed to file any motion to postpone/extend/reset or any pleading which may in any way delay
the case which he seeks to intervene in.
SECTION 17. Effect on Process of Coverage. The commencement of an ALI case,
including applications for land use conversion/exemption/exclusion, affects the land acquisition
and distribution process as follows:
17.1. Application or petition filed before issuance of notice of CARP coverage. The
notice of coverage shall be held in abeyance until final resolution of the case.
17.2. Application or petition filed within sixty calendar days from issuance of notice
of CARP coverage. The proper DAR office shall continue processing the claimfolder
but not transmit the same to the Land Bank of the Philippines (LBP) for further
processing, notwithstanding the pendency of the application. The Regional Director
or PARO may suspend the claimfolder's processing if the MARO submits a report that
the case is meritorious on the basis of the MARO's personal verification of the
allegations therein; otherwise, the PARO shall process the claimfolder but not transmit
the same to the LBP for further processing.
17.3. Application or petition filed where claimfolder is pending with LBP — If the
application/petition or protest was filed while the claimfolder is pending with the LBP,
or where the claimfolder has been forwarded by the PARO notwithstanding such
application/petition or protest, the LBP shall continue processing the land
compensation claim, except that the Certification of Deposit (COD) shall be issued
to the PARO until the application/petition or protest is finally resolved.
SECTION 18. Procedure.
18.1. Commencement. Except for applications for land use conversion and
exemption/exclusion from CARP coverage which shall follow separate special rules,
an ALI case shall commence with the filing of the proper application or initiatory
pleading at the DARMO / DARPO / DARRO. In all instances, the MARO shall notify all
tenants, leaseholders, farmworkers, and occupants of the subject land of the initiation
of the case. Proof of notice to all the persons above-mentioned shall form part of the
records of the case.
18.2. After notifying all parties, the MARO and Barangay Agrarian Reform Committee
(BARC) shall exert exhaustive efforts at mediation and conciliation to persuade the
parties to arrive at an amicable settlement or compromise.
18.3. The issue of whether or not the land is subject to coverage under PD 27 or RA
6657 shall not be the subject of compromise.
18.4. If mediation/conciliation fails, the MARO shall, within five (5) working days from
termination thereof, transmit the case folder to the PARO with a written report
explaining the reasons for the mediation/conciliation's failure, furnishing all the parties
with a copy of the written report.
18.5. Investigation. The PARO, or any Investigating Officer or Committee which he or
the Regional Director may designate, shall conduct investigations and perform
whatever is necessary to achieve a just, expeditious, and inexpensive disposition of
the case.
18.6. Record of proceedings. The proceedings shall be recorded by a stenographer.
In the absence of an available stenographer, the Investigating Officer shall make a
written summary of the proceedings, including the substance of the evidence
presented which shall be attested to by the parties or their counsel and shall form part
of the records of the case. Should any party or counsel refuse to sign, the reason for
such refusal shall be noted therein.
18.7. Ocular Inspection.
18.7.1. After giving all parties reasonable notice of the ocular inspection
schedule, ocular inspection shall proceed with or without the presence of any
party who refuses to cooperate.
18.7.2. The ocular inspection team shall prepare an initial report which all
attending parties and BARC representatives shall sign. If anyone refuses to sign,
the ocular inspection team shall indicate the reason for such refusal in the initial
report.
18.8. Position Papers. The Investigating Officer may require the parties to
simultaneously submit their respective position papers and replies thereto. Within thirty
(30) days from due date of the last pleading (unless special rules provide for a
different period), the Investigating Officer shall sign and submit his recommendation
to the appropriate authority.
18.9. Draft Decision. At any time before the ALI case is decided, any party may
submit a hard copy of a draft decision together with a diskette containing such draft
written in any popular word-processing program, furnishing a copy thereof to all
parties.
18.10. Decision. Pursuant to Section 51 of RA 6657, which provides that "any case or
controversy before it shall be decided within thirty (30) days after it is submitted for
resolution", the appropriate authority shall promulgate its decision within thirty (30)
days from receipt of the Investigating Officer's recommendation.
SECTION 19. Power to summon witnesses and compel submission of documentary
evidence. The PARO and the RD shall have the power to summon witnesses, administer oaths, take
testimony, require submission of reports, and compel production of books and documents.
SECTION 20. Cease and Desist Order. In cases where any party may suffer grave or
irreparable damage, or where the doing or continuance of certain acts will render the case moot
and academic, or where there is a need to maintain peace and order and prevent injury or loss of
life or property, the Secretary (or whoever the Secretary may designate) may, motu proprio or at
the instance of any party, issue a Cease and Desist Order (CDO) to prevent grave and irreparable
damage while awaiting resolution of the case. The Regional Director may exercise the same
authority for matters that are strictly within the confines of his territorial jurisdiction. In this regard, the
issuing authority may request the assistance of law enforcement agencies to implement the
CDO. IAcDET
SECTION 21. Prohibition against restraining order or preliminary injunction.
21.1. Pursuant to Section 55 of RA 6657, no court in the Philippines shall have
jurisdiction to issue any restraining order or writ of preliminary injunction against the
Presidential Agrarian Reform Council (PARC) or any of its duly authorized or
designated agencies, or the DAR, in any case, dispute or controversy arising from,
necessary to, or in connection with the application, implementation, enforcement, or
interpretation of RA 6657 and other pertinent laws on agrarian reform. Likewise,
pursuant to Section 68 ofRA 6657, no injunction, restraining order, prohibition or
mandamus shall be issued by the lower courts against the DAR, Department of
Agriculture, the Department of Environment and Natural Resources, and the
Department of Justice in their implementation of the Program.
21.2. The DARAB or its Adjudicators shall have no authority to issue any restraining
order or preliminary injunction against any Regional Director or DAR official carrying
out the implementation of agrarian laws, except when the DAR Secretary refers the
case to the DARAB.
SECTION 22. Furnishing a copy of the decision. The deciding authority shall furnish a
copy of the decision, not only to the parties' counsel/s or representative/s, but also directly to the
parties themselves as well as to the PARO, MARO, BARC, and all other DAR officials who took part
in the case or who may take part in its execution or implementation.
SECTION 23. Motion for Reconsideration — A party may file only one (1) motion for
reconsideration of the decision of the Regional Director, and may do so only within a non-
extendible period of fifteen (15) calendar days from receipt of the decision, furnishing a copy of
the motion to all other parties. The filing of the motion interrupts the running of the reglementary
period within which to appeal. The Regional Director shall rule on the motion within thirty (30) days
from its filing date.
23.1. If the motion for reconsideration is denied, the movant may perfect an appeal
before the Secretary within only the remainder of said non-extendible period of fifteen
(15) calendar days but not less than five (5) calendar days.
23.2. If the motion for reconsideration is granted, resulting in the reversal of the
original decision, the losing party may perfect an appeal before the Secretary within
a full but non-extendible period of fifteen (15) calendar days from receipt of the new
decision.
SECTION 24. Motion for Reconsideration of the decision or order of the Secretary — In
cases where the Secretary exercises exclusive original jurisdiction, a party may file only one (1)
motion for reconsideration of the decision of the Secretary, and may do so only within a non-
extendible period of fifteen (15) calendar days from receipt of the decision, furnishing a copy of
the motion to all other parties. The filing of the motion interrupts the running of the reglementary
period within which to appeal.
24.1. If the motion for reconsideration is denied, the movant may perfect an appeal
before the Office of the President within only the remainder of said non-extendible
period of fifteen (15) calendar days but not less than five (5) calendar days.
24.2. If the motion for reconsideration is granted, resulting in the reversal of the
original decision, the losing party may perfect an appeal before the Office of the
President within a full but non-extendible period of fifteen (15) calendar days from
receipt the new decision.
RULE IV
Appeals to the Secretary
SECTION 25. Grounds. No appeal shall be given due course unless the decision of the
Regional Director is final, disposing of the case on the merits, and only on the following grounds:
25.1. Serious errors in the findings of fact or conclusion of law which may cause grave
and irreparable damage or injury to the appellant; or
25.2. Coercion, fraud, or clear graft and corruption in the issuance of a decision.
SECTION 26. Caption. The caption of all appeals, in addition to the standard lines
indicating the hierarchy of authority (first line: "Republic of the Philippines"; second line: "Department
of Agrarian Reform"; third line: "Office of the Secretary"), shall likewise specifically address appeals
to the "Bureau of Agrarian Legal Assistance" or "BALA", and refer to the appealing party as the
"appellant" and the adverse party the "appellee". The BALA shall assign a new docket number to
each appeal which shall appear above the old docket number (enclosing the old docket number
inside a parenthesis).
SECTION 27. When to appeal. Appeals may be taken within fifteen (15) days from
receipt of the adverse decision pursuant to Section 51 of RA 6657 which provides that "any order or
ruling or decision shall be final after the lapse of fifteen (15) days from receipt of a copy thereof".
SECTION 28. Where to appeal. Appeals from the decision of the Regional Director shall
be made by filing in the same regional office which issued the adverse decision, a notice of appeal
with proof of payment of the requisite appeal fee. Official cashiers of any DAR office may receive
payment of the requisite appeal fee. Non-perfection of the appeal within the reglementary period
merits dismissal of the appeal.
SECTION 29. Appeal pleadings. The appellant shall submit an appeal brief with the
BALA within ten (10) days from perfection of the appeal, furnishing a copy thereof to the adverse
party and the Regional Director. The appellee may submit a comment (not a motion to dismiss)
within ten (10) days from receipt of the appeal brief, furnishing a copy thereof to the appellant and
the Regional Director. Within fifteen (15) days from filing of the appellee's comment, the BALA
director shall issue a preliminary order stating either that:
29.1. The pleadings on record are sufficient for deciding the appeal and henceforth
the deciding authority shall promulgate its decision; or
29.2. The pleadings on record are insufficient for a proper determination of the issues
raised and so the parties shall simultaneously file their respective appeal
memorandum within ten (10) days from receipt of the order to do so; or
29.3. The pleadings on record need further clarification and the conduct of a
clarificatory hearing is necessary. Ten (10) days after the termination of the said
hearing thereof, the BALA Director may order the parties to simultaneously file their
respective appeal memorandum.
At any time before the ALI case is decided, any party may submit a hard copy of a draft
decision with a diskette containing such draft written in any popular word-processing program,
furnishing a copy thereof to all parties.
Upon submission of sufficient pleadings, the BALA Director shall submit his recommendation
to the deciding authority. EIDATc
SECTION 30. Record Transmittal. Upon receipt of the notice of appeal, the DARRO of
origin shall arrange each document therein in chronological order according to date of receipt
(the first-received document in the first page, so on and so forth, until the last-received document
in the last page); inscribe a page number (by hand or with a paginating device) on each page
and every page; and thereafter the responsible officer at the DARRO shall affix his initials on each
and every page. When for special reasons a particular document in the records requires that it be
free from any form of marking, the pagination and affixing of initials shall be made only upon
photocopies thereof; the originals shall be in separate envelopes while photocopies thereof shall
form part of the main rollo folder. The DARRO shall prepare a table of contents, which shall be
ahead of the first page of the records, and attach a photocopy of the appeal fee receipt in front
of the table of contents. Within ten (10) days from perfection of the appeal, the DARRO shall
transmit the records and all its accompanying envelopes to the BALA. To enforce compliance with
this Section, the BALA Director may, after due investigation, recommend disciplinary action against
the erring DARRO official, including the Regional Director when necessary.
SECTION 31. Appeal Withdrawal. An appeal may be withdrawn by filing with the BALA
a motion to withdraw appeal at any time prior to the promulgation of the appellate decision,
except when the withdrawal is prejudicial to public interest. The withdrawal may take effect only
after the Secretary issues an order approving the motion to withdraw.
RULE V
Appeals from the Secretary
SECTION 32. Motion for Reconsideration. A party may file only one (1) motion for
reconsideration of the decision of the Secretary or deciding authority, and may do so only within a
non-extendible period of fifteen (15) calendar days from receipt of the Secretary's decision,
furnishing a copy of the motion to all other parties. The filing of the motion interrupts the running of
the reglementary period within which to appeal. Upon receipt of the resolution on the motion for
reconsideration, the losing party may elevate the matter to the Office of the President (OP).
SECTION 33. Appeal. Appeals from the decision of the Secretary may be taken to the
OP within fifteen (15) days from receipt thereof. The filing of an appeal within the proper period
stays execution of the subject decision, unless the OP orders immediate execution of the DAR
decision upon such terms and conditions that are just and reasonable, pursuant to Section 4 of OP
Administrative Order (AO) No. 18 dated 12 February 1987, or the applicable rule.
SECTION 34. Judicial review. In cases where the appellant opts to elevate his appeal
directly to a judicial forum, the governing procedure shall be the pertinent provisions of the Rules
of Court, until and unless the judicial forum dismisses the appeal for failure to exhaust administrative
remedies.
RULE VIP
Finality and Execution
SECTION 35. Finality. Final orders / decisions / resolutions shall become final and
executory after all parties have received an official copy thereof; after the lapse of fifteen (15)
calendar days from the date receipt by the last recipient of an official copy thereof; and there is
no motion for reconsideration nor appeal therefrom.
SECTION 36. Execution. Execution shall issue automatically as a matter of course upon
finality of the case. The Regional Director shall prepare the necessary certificate of finality within
five (5) days from date of finality of a case. For cases appealed to the Secretary that attained
finality thereat, the BALA Director shall prepare the necessary certificate of finality within five (5)
days from the date of finality. Upon completion of the certificate of finality, the Regional Director
or deciding authority may, upon motion or motu propio, issue a writ of execution ordering the
MARO or appropriate DAR official to enforce the final order / decision / resolution. For this purpose,
the MARO or appropriate DAR official may seek assistance from law enforcement agencies.
RULE VII
Final Provisions
SECTION 37. Case records are public documents. Subject to the provisions of DAR
Memorandum Circular No. 25, Series of 1995, records of a case are public documents and all
parties, their representatives, and general public may request to copy the same or any portion
thereof except for the documents stated in said Memorandum Circular from its official custodian
during reasonable office hours, upon payment of reasonable reproduction costs and certification
fees.
SECTION 38. Repealing clause. This Order modifies or repeals DAR-AO-6-2000 and all
other issuances or portions thereof that are inconsistent herewith.
SECTION 39. Separability clause. Any judicial pronouncement declaring as
unconstitutional any provision of this Order shall not affect the validity of the other provisions herein.
SECTION 40. Effectivity clause. This Order shall take effect ten (10) days after its
publication in two (2) national newspapers of general circulation, pursuant to Section 49 of RA
6657. EaICAD