SECTION 22. QUALIFIED BENEFICIARIES. Government.
Government." Having acquired the subject land as a "qualified beneficiary," Prisco+ and his heirs possess security of
 Abandonment defined
SECTION 27. TRANSFERABILITY OF AWARDED LANDS.
 Prohibited transfers under PD 27
Same as case no. 8
G.R. No. 198770 November 12, 2012
AURELIA GUA-AN AND SONIA GUA-AN MAMON, Petitioners,
vs.
GERTRUDES QUIRINO, represented by ELMER QUIRINO, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in the instant Petition for Review on Certiorari under Rule 45 of the Rules of Court are the Decision 1 dated
February 25, 2011 and Resolution2 dated September 15, 2011 rendered by the Court of Appeals (CA) in CA-G.R. SP.
No. 00589-MIN which set aside the December 29, 2004 Decision3 of the Department of Agrarian Reform Adjudication
Board (DARAB) and afforded respondent the preferential right of redemption over the subject landholdings.
The Factual Antecedents
Subject of the instant case is a 2.8800 hectare agricultural land situated in Batangan, Valencia, Bukidnon known as Lot
0899, covered by Certificate of Land Transfer (CLT) No. 0-025227 in the name of Prisco Quirino, Sr.+ (Prisco+) issued
by the Ministry (now Department) of Agrarian
Reform on October 16, 1979 pursuant to Presidential Decree (P.D.) No. 27. On February 27, 1985, Prisco+ executed
a Deed of Conditional Sale (deed) covering the subject landholding to Ernesto Bayagna (Ernesto) under the following
conditions:
x x x that the condition of this sale is that I, Prisco Quirino, Sr. and my heirs hereby [reserve our] right to redeem or
repurchase the herein subject parcel of land by returning to Ernesto Bayagna or his heirs the same amount of Forty
thousand Pesos (P40,000.00), Philippine currency, after the lapse of eight (8) years from the date of execution of this
instrument and if the subject land is not redeemed or repurchased after the said eight years, there shall be an automatic
extension of four (4) years from the date the [eighth] year expires, and if after the 4 term expires, and I, Prisco Quirino,
Sr., or my heirs still [fail] to redeem or repurchase the herein subject land, Ernesto Bayagna or his heirs shall continue
to possess and enjoy the subject land until it is finally redeemed or repurchased. After the P40,000.00 is returned to
Ernesto Bayagna or his heirs, the latter shall be obligated to return peacefully the subject land without any tenant or
lessee.4
Ernesto thereupon possessed and cultivated the subject land for more than 10 years before Prisco+ offered to redeem
the same in 1996, which was refused. Instead, Ernesto allowed the former owner of the land, petitioner Aurelia Gua-An
(Aurelia), through her daughter, petitioner Sonia Gua-An Mamon (Sonia), to redeem the lot. Subsequently, Prisco+
passed away.
On January 30, 1998, respondent Gertrudes Quirino, Prisco's widow, represented by their son, Elmer, filed before the
Office of the Agrarian Reform Regional Adjudicator (RARAD) a Complaint for Specific Performance, Redemption,
Reinstatement and Damages with Application for Writ of Preliminary Injunction and TRO against Ernesto and
petitioners.
In their Answer, petitioners averred that Prisco's+ right over the subject land was merely inchoate for failure to establish
payment of just compensation to the landowner; the deed was null and void for being violative of the law and public
policy; and that the failure to consign the redemption money effectively bars the redemption prayed for.
For his part, Ernesto averred that he allowed petitioners to redeem the lot because Prisco+ failed to appear on the
agreed date for redemption and on the information that the subject land was erroneously awarded to the latter.
On May 6, 1998, the RARAD dismissed the complaint for lack of merit.
The DARAB Ruling
In the Decision5 dated December 29, 2004, the DARAB denied respondent's appeal and declared Prisco+ to have
violated agrarian laws and of having abandoned the land by his failure to cultivate the same continuously for a period
of more than two (2) calendar years. It canceled CLT No. 0-025227 in Prisco's+ name and ordered the Municipal
Agrarian Reform Officer (MARO) to reallocate the subject landholding to a qualified beneficiary.
The CA Ruling
On petition for review, the CA reversed and set aside6 the DARAB's decision. It ruled that the pacto de retro sale
between Prisco+ and Ernesto was a mere equitable mortgage, hence, not a prohibited transaction under P.D. 27, which
is limited to "transfers or conveyances of title to a landholding acquired under the Land Reform Program of the
tenure thereon and could not be dispossessed thereof except for cause and only through a final and executory
judgment. Thus, the CA afforded the heirs of Prisco+ the preferential right of redemption over the subject landholding.
In the instant petition, petitioners insist that since respondent failed to tender and consign the redemption money, the
latter has no cause of action against them. Moreover, considering that Prisco+ was not the absolute owner of the subject
property, he cannot validly mortgage the same. Besides, Prisco+ had lost his rights as a farmer-beneficiary when he
transacted with Ernesto in violation of the provisions of Section 73(f)7 of Republic Act (R.A.) No. 6657, as amended
(Comprehensive Agrarian Reform Law of 1988).
Our Ruling
The petition is meritorious.
It bears to stress that upon the promulgation of P.D. 27, farmer-tenants were deemed owners of the land they were
tilling and given the rights to possess, cultivate and enjoy the landholding for themselves.8 Thus, P.D. 27 specifically
prohibited any transfer of such landholding except to the government or by hereditary succession. Section 27 9 of R.A.
6657 further allowed transfers to the Land Bank of the Philippines (LBP) and to other qualified beneficiaries.
Consequently, any other transfer constitutes a violation of the above proscription and is null and void for being contrary
to law.10 Relevant on this point is Ministry of Agrarian Reform Memorandum Circular No. 7, series of 1979 which
provides:
"Despite the x x x prohibition, x x x many farmer-beneficiaries of P.D. 27 have transferred their ownership, rights and/or
possession of their farms/homelots to other persons or have surrendered the same to their former landowners. All these
transactions/surrenders are violative of P.D. 27 and therefore null and void."
A perusal of the Deed of Conditional Sale reveals the real intention of the parties not to enter into a contract of sale but
merely to secure the payment of the P40,000.00 loan of Prisco+. This is evident from the fact that the latter was given
the right to repurchase the subject property even beyond the 12-year (original and extended) period, allowing in the
meantime the continued possession of Ernesto pending payment of the consideration. Under these conditions and in
accordance with Article 160211 of the Civil Code, the CA did not err in adjudging the pacto de retro sale to be in reality
an equitable mortgage.
However, contrary to the finding of the CA, the subject transaction is covered by the prohibition under P.D. No. 27 and
R.A. No. 6657 which include transfer of possession of the landholding to the vendee a retro, Ernesto, who, not being a
qualified beneficiary, remained in possession thereof for a period of eleven (11) years. Hence, notwithstanding such
possession, the latter did not acquire any valid right or title thereto, especially since he failed to take any positive
measure to cause the cancellation of Prisco's+ CLT No. 0-025227 despite the long lapse of time.
On the other hand, the redemption made by petitioner Aurelia was ineffective and void since reversion of the landholding
to the former owner is likewise proscribed under P.D. No. 27 in accordance with its policy of holding such lands under
trust for the succeeding generations of farmers.12
However, while CLT No. 0-025227 remains in Prisco's+ name, the Court cannot turn a blind eye to the fact that Prisco+
surrendered possession and cultivation of the subject land to Ernesto, not for a mere temporary period, but for a period
of 11 years without any justifiable reason. Such act constituted abandonment despite his avowed intent to resume
possession of the land upon payment of the loan. As defined in DAR Administrative Order No. 2, series of 1994,
abandonment is a willful failure of the agrarian reform beneficiary, together with his farm household, "to cultivate, till, or
develop his land to produce any crop, or to use the land for any specific economic purpose continuously for a period of
two calendar years." It is a ground for cancellation by the DARAB of an award to the agrarian reform beneficiary.
Consequently, respondent and/or Prisco's+ heirs had lost any right to redeem the subject landholding.
In fine, we find the DARAB Decision finding Prisco+ to have violated agrarian laws, canceling his CLT and ordering the
reallocation of the subject land to be more in accord with the law and jurisprudence.
WHEREFORE, the assailed Decision dated February 25, 2011 and Resolution dated September 15, 2011 of the Court
of Appeals in CA-G.R. SP. No. 00589-MIN are hereby SET ASIDE. The DARAB Decision dated December 29, 2004 is
REINSTATED.
SO ORDERED.

SECTION 24. AWARD TO BENEFICIARIES.
 Issuance of EP as 2nd stage of transfer under PD 27
G.R. No. 153850 August 31, 2006
JOVENDO DEL CASTILLO, Petitioner,
vs.
ABUNDIO ORCIGA, EMELINA ORCIGA-VOLANTE, PILAR ORCIGA CLEMENA, ADELAIDA ORCIGA GENIO,
NENITA ORCIGA ELEDA, YOLANDA ORCIGA TAKASAN and ALBERTO ORCIGA, Respondents.
DECISION
VELASCO, JR., J.:
If my land has cried out against me, and its furrows have wept together; if I have eaten its yield without payment, and
caused the death of its owners, let thorns grow instead of wheat, and foul weeds instead of barley.
—Job 31:38-40 1
Land has spawned countless disputes because man is inexorably bound to it from cradle to grave for domicile, life
sustenance, and other fundamental needs. For others, having a small landholding is their only means to get out of
bondage and oppression or to build a promising future for their progeny. Possession or ownership of land can either
promote or deprive other people of social justice; thus, courts must exercise utmost care and diligence to ensure that
decisions on disputes involving lands promote social justice. As succinctly expressed in Gelos v. Court of Appeals,
"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." 2
This case at bar illustrates how courts should vigilantly, consistently, and steadfastly uphold the principle that justice is
for all and for the deserving—in the same way that "the State shall be guided by the principle that land has a social
function and land ownership has a social responsibility." 3
The Case
In this Petition for Review on Certiorari, petitioner del Castillo seeks the nullification of the November 26, 2002 Decision
of the Court of Appeals (CA) in CA-G.R. SP No. 66122, ordering him to vacate the subject landholding and directing
the Department of Agrarian Reform Adjudication Board (DARAB) to restore possession of the farm lot to respondents.
The Facts
Petitioner Jovendo del Castillo is the son and administrator of Menardo del Castillo, who previously owned a 1.3300-
hectare riceland located at Omabo, Polpog, Bula, Camarines Sur. The farmland was formerly cultivated by Eugenio
Orciga. 4
Pursuant to Presidential Decree No. 27 (PD No. 27), 5 Eugenio Orciga became the beneficiary of the Land Transfer
Program of the government during his lifetime. He was awarded Certificate of Land Transfer No. 0-070176 over the
said landholding on April 3, 1981.
On August 1, 1988, Eugenio Orciga died. However, prior to the final selection and determination of the successor of
the deceased tenant, on July 1, 1991, the heirs agreed to rotate among themselves the cultivation of the riceland
covered by said CLT, as follows:
a. Ronald Orciga – May 1989 - May 1991
b. Emelina Volante – May 1991 - May 1992
c. Alberto Orciga – May 1992 - May 1993
d. Adelaida Genio – May 1993 - May 1994
e. Pilar Clemena – May 1994 - May 1995
f. Nenita Eleda – May 1995 - May 1996
g. Abundio Orciga – May 1996 - May 1997
h. Yolanda Takasan – May 1997 - May 1998 6
After cultivating and harvesting the riceland from 1989 to 1991, Ronald Orciga abandoned the said farm on May 3,
1991, and eventually left the barrio without turning over the landowner’s share of the agricultural harvest. 7
On May 28, 1991, fully armed with guns, petitioner del Castillo––a member of the CAFGU (Citizens Armed Forces
Geographical Unit)––forcibly entered the riceland of the late Eugenio Orciga. He started to cultivate the said land over
the objection of the respondents, effectively ejecting them from their possession and cultivation of the land. 8
Respondents filed a Complaint on June 10, 1991, with the Office of Provincial Adjudicator, DARAB, Naga City, docketed
as DARAB Case No. 0000437 for Reinstatement with Mandatory Injunction and Damages 9 entitled Abundo Orciga, et
al. v. Jovendo Del Castillo.
In his Answer with Counterclaim 10 filed on July 5, 1991, petitioner averred that on May 6, 1991, he had written a letter-
complaint to Engr. Jaime Abonita, Municipal Agrarian Reform Officer (MARO), Bula, Camarines Sur, informing Abonita
that beginning the second harvest in 1987, Ronald Orciga had failed and refused to give the lessor’s share of the harvest
despite repeated demands. In said Answer, petitioner del Castillo stated that he had sought the assistance of DAR
Para-Legal Officer Gilbert Villar, who advised him that in the absence and until the return of tenant-lessee Ronald
Orciga, he could take over the cultivation of the land. He also denied ejecting respondents from the land considering
that certain mortgagees were cultivating the riceland and in actual possession of it. He claimed that Ronald Orciga
mortgaged portions of the farm to Danilo Pornillos for PhP 3,500.00 11 and to Antonio Timado for PhP 3,500.00. 12
To respondents’ Complaint and petitioner’s Answer with Counterclaim, Provincial Adjudicator Virgil G. Alberto then
rendered his June 30, 1994 Decision in favor of petitioner, the fallo of which reads:
WHEREFORE, the petition for reinstatement is hereby dismissed for lack of cause of action.
Rolando Orciga is therefore given until the next cropping season of 1994 to personally cultivate said farmholding, subject
to payment of arrearages on rentals. 13
Believing that the Provincial Adjudicator had erred in his Decision, respondents filed a Motion for Reconsideration on
August 1, 1994, claiming that the Provincial Adjudicator’s Decision was "contrary to law and not in accordance with the
provisions and intent of MAR Memorandum Circular No. 19, series of 1978, in relation to A.O. 4, series of 1988"; 14 but
in his August 22, 1994 Resolution, the Provincial Adjudicator rejected the plea for reconsideration. 15Consequently, on
September 1, 1994, respondents filed an appeal before the DARAB which was docketed as DARAB Case No. 3992
(Reg. Case No.05-437-CS-94). On March 9, 1998, the DARAB rendered its judgment, thus:
WHEREFORE, premises considered, the appealed decision is hereby ANNULED [sic] AND A NEW DECISION is
hereby rendered:
1. Placing the disposition of subject landholding with the DAR, particularly the PARO of Camarines Sur, for the
implementation of Ministry Memorandum Circular No. 19, Series of 1978, as amended by DAR Administrative Order
No. 14, Series of 1988;
2. Ordering defendant-appellee, and/or any person/s acting in his behalf, to vacate subject landholding for the proper
disposition of the DAR.
Let the records of this case be remanded to the sala of the Provincial Adjudicator a quo for the issuance of a writ of
execution. 16
On April 16, 1988, petitioner filed a Motion for Reconsideration, but the DARAB, in its February 7, 2001
Resolution,17 rejected petitioner’s motion.
Undaunted, del Castillo, on July 18, 2001, interposed a petition for review before the CA, 18 which was docketed as CA
G.R. SP No. 66122.
Ruling of the Court of Appeals
The appellate court concluded that petitioner del Castillo had no right to take possession of the farmland being disputed
even if the heirs had failed to deliver the agricultural lessor’s share. It held that when the beneficiary abandons the
tillage or refuses to gain rights accruing to the farmer-beneficiary under the law, it will be reverted to the government
and not to the farm lot owner. 19
The dispositive portion of the CA’s November 26, 2001 Decision reads:
WHEREFORE, the petition is DENIED for lack of merit. The petitioner is hereby ordered to vacate the premises in
question. The DARAB is hereby directed to immediately reinstate possession of the landholdings to respondents.
Costs against the petitioners. 20 [sic, ‘petitioners’ should be ‘petitioner’]
On December 13, 2001, petitioner filed a Motion for Reconsideration of said Decision, but the CA discarded the said
motion for lack of merit in its May 7, 2002 Resolution. 21
Persistent, petitioner now seeks a fourth and final review of his case through a Petition for Review on Certiorari 22before
this Court.
The Issue
The main issue is who should be entitled to possess the disputed landholding under the DAR Land Transfer Program–
–the petitioner, as representative of the former titled landowner, or the respondents, as successors of the deceased
beneficiary.
The Court’s Ruling
The Court holds respondents to be the rightful possessors of the disputed farmland and at the same time, rejects the
instant petition.
The Main Issue: Who is Entitled to the Possession of the Riceland
Petitioner del Castillo asserts that restoring the possession of the riceland to the respondents would be prejudicial to
the interest of Menardo del Castillo, the former landowner, due to the unjustified abandonment of said landholding by
Ronald Orciga, the designated successor of the beneficiary, Eugenio Orciga. He also argues that his father, Menardo
del Castillo, is still entitled to just and full compensation of the riceland which, at the time the case was originally filed
before the Office of the Provincial Agrarian Reform Adjudicator of Camarines Sur, had not been paid by Eugenio Orciga.
Furthermore, he claims that because of the respondents’ pending payment of the amortizations, he should still be
considered the owner of the riceland. Based on such reasons, he concludes that he is entitled to possess and cultivate
the land as administrator on behalf of his father.
We DISAGREE.
Undeniably, Eugenio Orciga, the original beneficiary and predecessor-in-interest of respondents, was awarded
Certificate of Land Transfer No. 0070176 over the contested land pursuant to PD No. 27. Therefore, for all intents and
purposes, he is the acknowledged owner of the contested land.
A Certificate of Land Transfer (CLT) is a document issued to a tenant-farmer, which proves inchoate ownership of an
agricultural land primarily devoted to rice and corn production. It is issued in order for the tenant- farmer to acquire the
land. This certificate prescribes the terms and conditions of ownership over said land and likewise describes the
landholding––its area and its location. A CLT is the provisional title of ownership over the landholding while the lot
owner is awaiting full payment of the land’s value or for as long as the beneficiary is an "amortizing owner." 23
Section 1 of Presidential Decree No. 266 states that:
[u]pon receipt of the copy of the CLT, the Register of Deeds concerned shall record it in the primary entry book and
annotate a memorandum thereof in the corresponding certificate of title covering the land, without need of prior
surrender of the owner’s duplicate certificate of title. It shall be the duty of the Register of Deeds to notify the registered
owner concerned of such fact within a reasonable time (par. 2).
More so, under Section 1 of Presidential Decree No. 315, the CLT shall be accepted as collateral for loans.
Land transfer under PD No. 27 is effected in two (2) stages: (1) issuance of a CLT to a farmer-beneficiary as soon as
DAR transfers the landholding to the farmer-beneficiary in recognition that said person is a "deemed owner"; and (2)
issuance of an Emancipation Patent as proof of full ownership of the landholding upon full payment of the annual
amortizations or lease rentals by the farmer or beneficiary. 24
As of May 28, 1991, when petitioner grabbed possession of the said land, respondents, as successors-in-interest of
Eugenio Orciga, had not yet been issued an Emancipation Patent because they were still paying lease-rentals or the
agreed share to the lot owner. Since the respondents were not able to continue cultivating the land and pay the share
of petitioner’s father, Jovendo del Castillo insists that he should be allowed to take over and possess the land.
Petitioner’s asseveration that he is still entitled to possess and cultivate said farmland does not hold water under PD
No. 27 and Executive Order No. 228 (EO No. 228).
PD No. 27 took effect on October 21, 1972 while EO No. 228 became effective on July 17, 1987.
The said decree provides that the tenant-farmer should be a full- fledged member of a duly recognized farmer’s
cooperative. If the private agricultural land is primarily devoted to rice and corn under a system of share-a-crop or lease
tenants, the tenant-farmer shall be a "deemed owner" of a portion constituting a family-size farm of five (5) hectares, if
not irrigated and three (3) hectares, if irrigated.
To determine the cost of the land to be transferred to the tenant-farmer under PD No. 27, the value of the land shall be
equivalent to two and one half (2 ½) times the average harvest of three normal crop years. The cost of the land, including
interest at the rate of six (6) per centum per annum, shall be paid by the tenant in fifteen (15) years of fifteen (15) equal
annual amortizations. Then, the landholding is transferred by the Department of Agrarian Reform to the tenant-farmer,
and a CLT is issued to him; thereafter, the tenant-farmer starts to pay the amortizations to the land-owner.
The CLT of Eugenio Orciga was issued on April 3, 1981; thus, he has been the rightful owner of said farmland by virtue
of PD No. 27.
Let us now move on to the other issue of non-payment of the amortizations on said farmland––which is del Castillo’s
basis to insist ownership over the land on his father’s behalf.
PD No. 27 is clear that in case of non-payment, the amortizations due shall be paid by the farmer’s cooperative in which
the defaulting tenant-farmer is a member, with the cooperative having a right of recourse against the farmer. The
government shall guarantee such amortizations with shares of stocks in government-owned and government-controlled
corporations.
Clearly, therefore, the landowner is assured of payment even if the tenant-farmer defaults in paying amortizations since
the farmers’ cooperative will assume paying the amortizations.
With regard to the reversion of the landholding to the owner, this is proscribed under PD No. 27 since it is explicitly
provided that:
Title to land acquired pursuant to this Decree or the Land Reform Program of the Government shall not be transferable
except by the hereditary succession or to the Government in accordance with the provisions of this Decree, the Code
of Agrarian Reform and other existing laws and regulations (par. 13).
The landowner has no reason to complain since full payment of the value is even guaranteed by the shares of stocks
of government corporations.
In the light of this decree, petitioner del Castillo’s position––that his possession of the landholding be maintained––has
no strong legal mooring under PD No. 27.
On July 17, 1987, former President Corazon C. Aquino issued Executive Order No. 228 which provides that as of
October 21, 1972, all qualified farmer-beneficiaries are now "deemed full owners" of the land they acquired by virtue of
PD No. 27. 25 E.O. No. 228 modified PD No. 27 on the manner of payment of the value of the land to the landowner.
EO No. 228 even provided for different modes of payment of the value of the land, thus:
SECTION 3. Compensation shall be paid to the landowners in any of the following modes, at the option of the
landowners:
(a) Bond payment over ten (10) years, with ten percent (10%) of the value of the land payable immediately in cash, and
the balance in the form of LBP bonds bearing market rates of interest that are aligned with 90-day treasury bills rates,
net of applicable final withholding tax. One-tenth of the face value of the bonds shall mature every year from the date
of issuances until the tenth year.
The LBP bonds issued hereunder shall be eligible for the purchase of government assets to be privatized;
(b) Direct payment in cash or kind by the farmer-beneficiaries with the terms to be mutually agreed upon by the
beneficiaries and landowners and subject to the approval of the Department of Agrarian Reform; and
(c) Other modes of payment as may be prescribed or approved by the Presidential Agrarian Reform Council.
If the landowner decides that the financing should be extended by Land Bank for the payment of the value of the land
to him under Section 3(a) of EO No. 228, a mortgage is constituted over the landholding.
Section 7 of the Executive Order provides:
As of the date of this Executive Order, a lien by way of mortgage shall exist in favor of the Land Bank on all lands it has
financed and acquired by the farmer-beneficiary by virtue of P.D. No. 27 for all amortizations, both principal and interest,
due from the farmer-beneficiary or a valid transferee until the amortizations are paid in full.
In this manner of payment, the farmer-beneficiary pays the amortizations directly to the Land Bank and no longer to the
land owner.
However, the failure of the farmer-beneficiary to pay three (3) annual amortizations to Land Bank will result in the
foreclosure of the mortgage. 26
Section 11, EO No. 228 further directs the Land Bank, within three (3) months from the transfer of the land, to sell the
foreclosed land to any interested landless farmer duly certified as a bona fide landless farmer by the Department of
Agrarian Reform of the barangay or the two closest barangays where the land is located.
Specifically, Section 2 of EO No. 228 explains the procedure on the payment of lease rentals by the farmer-beneficiary
who was granted a CLT under PD No. 27. If a dispute arises, the mechanism for its resolution is as follows:
Lease rentals paid to the landowner by the farmer beneficiary after October 21, 1972, shall be considered as advance
payment for the land. In the event of dispute with the landowner regarding the amount of lease rental paid by the farmer
beneficiary, the Department of Agrarian Reform and the Barangay Committee on Land Production concerned shall
resolve the dispute within thirty (30) days from its submission pursuant to Department of Agrarian Reform Memorandum
Circular No. 26, series of 1973, and other pertinent issuances. In the event a party questions in court the resolution of
the dispute, the landowner’s compensation claim shall still be processed for payment and the proceeds shall be held in
trust by the Trust Department of the Land Bank in accordance with the provisions of Section 5 hereof, pending the
resolution of the dispute before the court. 27
Unmistakably, that in case the farmer-beneficiary under PD No. 27 is unable to pay the agreed lease rentals, the LBP
will process the compensation claim for payment; and the proceeds shall be held in trust by its Trust Department until
the landowner finally accepts the payment or the court orders him to accept it. Under Section 7 of EO No. 228, a lien
by way of mortgage shall exist in favor of LBP on the land it has financed in favor of a farmer-beneficiary under PD No.
27. In short, the payment of the full value of the land to the landowner is assured under EO No. 228, which explains the
rule that even if the lease-rentals or amortizations have not been paid to the landowner, the possession is retained by
the farmer-beneficiary.
In the case at bar, the petitioner has two options; first, to bring the dispute on the non-payment of the land to the DAR
and the Barangay Committee on Land Production that will subsequently resolve said dispute pursuant to Ministry of
Agrarian Reform (MAR) Memorandum Circular No. 26, series of 1973 and other issuances; and, second, to negotiate
with the DAR and LBP for payment of the compensation claim pursuant to Section 2 of EO No. 228. Eventually, the
scheme under EO No. 228 will result to the full payment of the compensation of the value of the land to Menardo del
Castillo, petitioner’s father and former landowner.
From the foregoing options, it is indubitably clear that the reconveyance of the land to the former owner is not allowed.
The policy is to hold such lands under trust for the succeeding generations of farmers. 28 The objective is to prevent
repetition of cases where the lands distributed to the tenant-farmers reverted to the former lot owners or even conveyed
to land speculators. 29 Thus, possession of the land cannot be restored to petitioner del Castillo although there was
failure of the heirs to pay the landowner’s share or compensation. The transfer or conveyance of the riceland can only
be made to an heir of the beneficiary or to any other beneficiary who shall in turn cultivate the land. In the case in hand,
even if Ronald Orciga has abandoned the land, the right to possess and cultivate the land legally belongs to the other
heirs of Eugenio Orciga. Undoubtedly, petitioner del Castillo is not a beneficiary of Eugenio Orciga––the original
beneficiary; hence, petitioner has no legal right to the possession of the farmland.
On the other issue of deceased Eugenio Orciga’s successor, the Court rules that the July 1, 1991 Agreement among
the heirs of Eugenio Orciga (that stipulated a provision for a rotation system in the cultivation of the riceland among
themselves) directly contravenes Ministry Memorandum Circular No. 19, Series of 1978. The said ministry
memorandum circular states that:
Where there are several heirs, and in the absence of extra judicial settlement or waiver of rights in favor of one heirwho
shall be the sole owner and cultivator, the heirs shall[,] within one month from the death of the tenant-beneficiary[,] be
free to choose from among themselves one who shall have sole ownership and cultivation of the land, x x x Provided,
however, That [sic] the surviving spouse shall be given first preference; otherwise, in the absence or due to the
permanent incapacity of the surviving spouse, priority shall be determined among the heirs according to age (emphases
supplied). 30
Moreover, the ministry memorandum circular also provides that:
1. Succession to the farmholding covered by Operation Land Transfer shall be governed by the pertinent provisions of
the New Civil Code of the Philippines subject to the following limitations:
a. The farmholding shall not be partitioned or fragmented.
b. The ownership and cultivation of the farmholding shall ultimately be consolidated in one heir who possesses the
following qualifications:
(1) being a full-fledged member of a duly recognized farmers’ cooperative;
(2) capable of personally cultivating the farmholding; and
(3) willing to assume the obligations and responsibilities of a tenant-beneficiary.
c. Such owner-cultivator shall compensate the other heirs to the extent of their respective legal interest in the land,
subject to the payment of whatever outstanding obligations of the deceased tenant-beneficiary. (Emphasis supplied.)
The records show that Emelina Orciga Volante is desirous to avail herself of the right to cultivate the land according to
the rotation system of the heirs. This is contrary to MAR Memorandum Circular No. 19, which requires that the
ownership and cultivation shall be consolidated in one heir. The said agreement is therefore illegal and ineffective. The
heirs must agree on one of them to be the owner-cultivator of the land in accordance with the law, but priority is granted
to the surviving spouse, and in the latter’s absence or permanent incapacity, the age of the heirs will be used to decide
who should succeed as farmer-beneficiary.

WHEREFORE, the November 26, 2002 Decision of the Court of Appeals is hereby AFFIRMED with MODIFICATIONS,
as follows:

1. The respondents or heirs of the late Eugenio Orciga are ordered, within one month from finality of this Decision, to
choose the sole owner and cultivator of the landholding from among themselves, giving first preference to his surviving
spouse, or in her absence or incapacity, from among the heirs, and to give priority according to age of the heirs in
accordance with MAR Memorandum Circular No. 19, Series of 1978.
2. In case of respondents’ failure to comply with MAR Memorandum Circular No. 19, Series of 1978, the DAR is ordered
to determine the heir or successor-in-interest of the late Eugenio Orciga as farmer-beneficiary within one month
reckoned from the lapse of the 30-day period given to respondents to determine the sole owner-cultivator.
3. Petitioner Jovendo del Castillo is ordered to immediately surrender possession of the disputed landholding to
respondents, and the DARAB is directed to ensure the immediate restoration of possession of said landholding to the
respondents.
Costs against the petitioner.
SO ORDERED.
 Full payment of just compensation is what vests government ownership rights over according to the 1940 CFI decision although, as stated, ₱9,500.00 was deposited by it, and said deposit had been
disbursed. With the records lost, however, it cannot be known who received the money (Exh. 14 says: ‘It is further
agricultural land acquire under CARP
certified that the corresponding Vouchers and pertinent Journal and Cash Book were destroyed during the last World
G.R. No. 161656 June 29, 2005 War, and therefore the names of the payees concerned cannot be ascertained.’) And the Government now admits
REPUBLIC OF THE PHILIPPINES, GENERAL ROMEO ZULUETA, COMMODORE EDGARDO GALEOS, ANTONIO that there is no available record showing that payment for the value of the lots in question has been
CABALUNA, DOROTEO MANTOS & FLORENCIO BELOTINDOS, petitioners, made (Stipulation of Facts, par. 9, Rec. on Appeal, p. 28).
vs.
VICENTE G. LIM, respondent. The points in dispute are whether such payment can still be made and, if so, in what amount. Said lots have
been the subject of expropriation proceedings. By final and executory judgment in said proceedings, they were
RESOLUTION
condemned for public use, as part of an airport, and ordered sold to the Government. In fact, the
SANDOVAL-GUTIERREZ, J.:
abovementioned title certificates secured by plaintiffs over said lots contained annotations of the right of the
National Airports Corporation (now CAA) to pay for and acquire them. It follows that both by virtue of the
Justice is the first virtue of social institutions.1 When the state wields its power of eminent domain, there arises a
judgment, long final, in the expropriation suit, as well as the annotations upon their title certificates, plaintiffs
correlative obligation on its part to pay the owner of the expropriated property a just compensation. If it fails, there is a
are not entitled to recover possession of their expropriated lots – which are still devoted to the public use for
clear case of injustice that must be redressed. In the present case, fifty-seven (57) years have lapsed from the time the
which they were expropriated – but only to demand the fair market value of the same."
Decision in the subject expropriation proceedings became final, but still the Republic of the Philippines, herein petitioner,
has not compensated the owner of the property. To tolerate such prolonged inaction on its part is to encourage distrust
and resentment among our people – the very vices that corrode the ties of civility and tempt men to act in ways they Meanwhile, in 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente Lim, herein respondent,4 as security for
would otherwise shun. their loans. For their failure to pay Lim despite demand, he had the mortgage foreclosed in 1976. Thus, TCT No. 23934
was cancelled, and in lieu thereof, TCT No. 63894 was issued in his name.
On August 20, 1992, respondent Lim filed a complaint for quieting of title with the Regional Trial Court (RTC), Branch
A revisit of the pertinent facts in the instant case is imperative.
10, Cebu City, against General Romeo Zulueta, as Commander of the Armed Forces of the Philippines, Commodore
On September 5, 1938, the Republic of the Philippines (Republic) instituted a special civil action for expropriation with
Edgardo Galeos, as Commander of Naval District V of the Philippine Navy, Antonio Cabaluna, Doroteo Mantos and
the Court of First Instance (CFI) of Cebu, docketed as Civil Case No. 781, involving Lots 932 and 939 of the Banilad
Florencio Belotindos, herein petitioners. Subsequently, he amended the complaint to implead the Republic.
Friar Land Estate, Lahug, Cebu City, for the purpose of establishing a military reservation for the Philippine Army. Lot
On May 4, 2001, the RTC rendered a decision in favor of respondent, thus:
932 was registered in the name of Gervasia Denzon under Transfer Certificate of Title (TCT) No. 14921 with an area
of 25,137 square meters, while Lot 939 was in the name of Eulalia Denzon and covered by TCT No. 12560 consisting
"WHEREFORE, judgment is hereby rendered in favor of plaintiff Vicente Lim and against all defendants, public and
of 13,164 square meters.
private, declaring plaintiff Vicente Lim the absolute and exclusive owner of Lot No. 932 with all the rights of an
After depositing ₱9,500.00 with the Philippine National Bank, pursuant to the Order of the CFI dated October 19, 1938,
absolute owner including the right to possession. The monetary claims in the complaint and in the counter claims
the Republic took possession of the lots. Thereafter, or on May 14, 1940, the CFI rendered its Decision ordering the
Republic to pay the Denzons the sum of ₱4,062.10 as just compensation. contained in the answer of defendants are ordered Dismissed.
Petitioners elevated the case to the Court of Appeals, docketed therein as CA-G.R. CV No. 72915. In its Decision5dated
The Denzons interposed an appeal to the Court of Appeals but it was dismissed on March 11, 1948. An entry of September 18, 2003, the Appellate Court sustained the RTC Decision, thus:
judgment was made on April 5, 1948.
"Obviously, defendant-appellant Republic evaded its duty of paying what was due to the landowners. The
expropriation proceedings had already become final in the late 1940’s and yet, up to now, or more than fifty
In 1950, Jose Galeos, one of the heirs of the Denzons, filed with the National Airports Corporation a claim for rentals
(50) years after, the Republic had not yet paid the compensation fixed by the court while continuously reaping
for the two lots, but it "denied knowledge of the matter." Another heir, Nestor Belocura, brought the claim to the Office
benefits from the expropriated property to the prejudice of the landowner. x x x. This is contrary to the rules of
of then President Carlos Garcia who wrote the Civil Aeronautics Administration and the Secretary of National Defense
fair play because the concept of just compensation embraces not only the correct determination of the amount
to expedite action on said claim. On September 6, 1961, Lt. Manuel Cabal rejected the claim but expressed willingness
to be paid to the owners of the land, but also the payment for the land within a reasonable time from its taking.
to pay the appraised value of the lots within a reasonable time.
Without prompt payment, compensation cannot be considered "just" for the property owner is made to suffer
For failure of the Republic to pay for the lots, on September 20, 1961, the Denzons’ successors-in-interest, Francisca the consequence of being immediately deprived of his land while being made to wait for a decade or more, in
this case more than 50 years, before actually receiving the amount necessary to cope with the loss. To allow
Galeos-Valdehueza and Josefina Galeos-Panerio,2 filed with the same CFI an action for recovery of possession with
damages against the Republic and officers of the Armed Forces of the Philippines in possession of the property. The the taking of the landowners’ properties, and in the meantime leave them empty-handed by withholding
payment of compensation while the government speculates on whether or not it will pursue expropriation, or
case was docketed as Civil Case No. R-7208.
In the interim or on November 9, 1961, TCT Nos. 23934 and 23935 covering Lots 932 and 939 were issued in the worse, for government to subsequently decide to abandon the property and return it to the landowners, is
names of Francisca Valdehueza and Josefina Panerio, respectively. Annotated thereon was the phrase "subject to the undoubtedly an oppressive exercise of eminent domain that must never be sanctioned. (Land Bank of the
Philippines vs. Court of Appeals, 258 SCRA 404).
priority of the National Airports Corporation to acquire said parcels of land, Lots 932 and 939 upon previous payment
of a reasonable market value."
xxxxxx
An action to quiet title is a common law remedy for the removal of any cloud or doubt or uncertainty on the title to real
On July 31, 1962, the CFI promulgated its Decision in favor of Valdehueza and Panerio, holding that they are the owners
property. It is essential for the plaintiff or complainant to have a legal or equitable title or interest in the real property,
and have retained their right as such over Lots 932 and 939 because of the Republic’s failure to pay the amount of
₱4,062.10, adjudged in the expropriation proceedings. However, in view of the annotation on their land titles, they were which is the subject matter of the action. Also the deed, claim, encumbrance or proceeding that is being alleged as
cloud on plaintiff’s title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity
ordered to execute a deed of sale in favor of the Republic. In view of "the differences in money value from 1940 up to
or legal efficacy (Robles vs. Court of Appeals, 328 SCRA 97). In view of the foregoing discussion, clearly, the claim
the present," the court adjusted the market value at ₱16,248.40, to be paid with 6% interest per annum from April 5,
of defendant-appellant Republic constitutes a cloud, doubt or uncertainty on the title of plaintiff-appellee
1948, date of entry in the expropriation proceedings, until full payment.
Vicente Lim that can be removed by an action to quiet title.
After their motion for reconsideration was denied, Valdehueza and Panerio appealed from the CFI Decision, in view of
the amount in controversy, directly to this Court. The case was docketed as No. L-21032.3 On May 19, 1966, this Court WHEREFORE, in view of the foregoing, and finding no reversible error in the appealed May 4, 2001 Decision of Branch
9, Regional Trial Court of Cebu City, in Civil Case No. CEB-12701, the said decision is UPHELD AND
rendered its Decision affirming the CFI Decision. It held that Valdehueza and Panerio are still the registered owners of
AFFIRMED. Accordingly, the appeal is DISMISSED for lack of merit."
Lots 932 and 939, there having been no payment of just compensation by the Republic. Apparently, this Court found
Undaunted, petitioners, through the Office of the Solicitor General, filed with this Court a petition for review on
nothing in the records to show that the Republic paid the owners or their successors-in-interest according to the CFI
certiorari alleging that the Republic has remained the owner of Lot 932 as held by this Court in Valdehueza vs.
decision. While it deposited the amount of ₱9,500,00, and said deposit was allegedly disbursed, however, the payees
could not be ascertained. Republic.6

In our Resolution dated March 1, 2004, we denied the petition outright on the ground that the Court of Appeals did not
Notwithstanding the above finding, this Court still ruled that Valdehueza and Panerio are not entitled to recover
commit a reversible error. Petitioners filed an urgent motion for reconsideration but we denied the same with finality in
possession of the lots but may only demand the payment of their fair market value, ratiocinating as follows:
"Appellants would contend that: (1) possession of Lots 932 and 939 should be restored to them as owners of the our Resolution of May 17, 2004.
same; (2) the Republic should be ordered to pay rentals for the use of said lots, plus attorney’s fees; and (3) the court a On May 18, 2004, respondent filed an ex-parte motion for the issuance of an entry of judgment. We only noted the
quo in the present suit had no power to fix the value of the lots and order the execution of the deed of sale after payment. motion in our Resolution of July 12, 2004.
It is true that plaintiffs are still the registered owners of the land, there not having been a transfer of said lots in favor of
the Government. The records do not show that the Government paid the owners or their successors-in-interest
On July 7, 2004, petitioners filed an urgent plea/motion for clarification, which is actually a second motion for
reconsideration. Thus, in our Resolution of September 6, 2004, we simply noted without action the motion considering
that the instant petition was already denied with finality in our Resolution of May 17, 2004.
On October 29, 2004, petitioners filed a very urgent motion for leave to file a motion for reconsideration of our Resolution
dated September 6, 2004 (with prayer to refer the case to the En Banc). They maintain that the Republic’s right of
ownership has been settled in Valdehueza.
The basic issue for our resolution is whether the Republic has retained ownership of Lot 932 despite its failure to pay
respondent’s predecessors-in-interest the just compensation therefor pursuant to the judgment of the CFI rendered as
early as May 14, 1940.
Initially, we must rule on the procedural obstacle.
While we commend the Republic for the zeal with which it pursues the present case, we reiterate that its urgent motion
for clarification filed on July 7, 2004 is actually a second motion for reconsideration. This motion is prohibited under
Section 2, Rule 52, of the 1997 Rules of Civil Procedure, as amended, which provides:
"Sec. 2. Second motion for reconsideration. – No second motion for reconsideration of a judgment or final resolution by
the same party shall be entertained."
Consequently, as mentioned earlier, we simply noted without action the motion since petitioners’ petition was already
denied with finality.
Considering the Republic’s urgent and serious insistence that it is still the owner of Lot 932 and in the interest of justice,
we take another hard look at the controversial issue in order to determine the veracity of petitioner’s stance.
One of the basic principles enshrined in our Constitution is that no person shall be deprived of his private property
without due process of law; and in expropriation cases, an essential element of due process is that there must be just
compensation whenever private property is taken for public use.7 Accordingly, Section 9, Article III, of our Constitution
mandates: "Private property shall not be taken for public use without just compensation."
The Republic disregarded the foregoing provision when it failed and refused to pay respondent’s predecessors-in-
interest the just compensation for Lots 932 and 939. The length of time and the manner with which it evaded payment
demonstrate its arbitrary high-handedness and confiscatory attitude. The final judgment in the expropriation
proceedings (Civil Case No. 781) was entered on April 5, 1948. More than half of a century has passed, yet, to this
day, the landowner, now respondent, has remained empty-handed. Undoubtedly, over 50 years of delayed payment
cannot, in any way, be viewed as fair. This is more so when such delay is accompanied by bureaucratic hassles.
Apparent from Valdehueza is the fact that respondent’s predecessors-in-interest were given a "run around" by the
Republic’s officials and agents. In 1950, despite the benefits it derived from the use of the two lots, the National Airports
Corporation denied knowledge of the claim of respondent’s predecessors-in-interest. Even President Garcia, who sent
a letter to the Civil Aeronautics Administration and the Secretary of National Defense to expedite the payment, failed in
granting relief to them. And, on September 6, 1961, while the Chief of Staff of the Armed Forces expressed willingness
to pay the appraised value of the lots, nothing happened.lawphil.net
The Court of Appeals is correct in saying that Republic’s delay is contrary to the rules of fair play, as "just
compensation embraces not only the correct determination of the amount to be paid to the owners of the land,
but also the payment for the land within a reasonable time from its taking. Without prompt payment,
compensation cannot be considered ‘just.’" In jurisdictions similar to ours, where an entry to the expropriated
property precedes the payment of compensation, it has been held that if the compensation is not paid in a reasonable
time, the party may be treated as a trespasser ab initio.8
Corollarily, in Provincial Government of Sorsogon vs. Vda. De Villaroya,9 similar to the present case, this Court
expressed its disgust over the government’s vexatious delay in the payment of just compensation, thus:
"The petitioners have been waiting for more than thirty years to be paid for their land which was taken for use
as a public high school. As a matter of fair procedure, it is the duty of the Government, whenever it takes property
from private persons against their will, to supply all required documentation and facilitate payment of just
compensation. The imposition of unreasonable requirements and vexatious delays before effecting payment is
not only galling and arbitrary but a rich source of discontent with government. There should be some kind of
swift and effective recourse against unfeeling and uncaring acts of middle or lower level bureaucrats."
We feel the same way in the instant case.
More than anything else, however, it is the obstinacy of the Republic that prompted us to dismiss its petition outright.
As early as May 19, 1966, in Valdehueza, this Court mandated the Republic to pay respondent’s predecessors-in-
interest the sum of ₱16,248.40 as "reasonable market value of the two lots in question." Unfortunately, it did not comply
and allowed several decades to pass without obeying this Court’s mandate. Such prolonged obstinacy bespeaks of
lack of respect to private rights and to the rule of law, which we cannot countenance. It is tantamount to confiscation of
private property. While it is true that all private properties are subject to the need of government, and the government
may take them whenever the necessity or the exigency of the occasion demands, however, the Constitution guarantees
that when this governmental right of expropriation is exercised, it shall be attended by compensation.10 From the taking
of private property by the government under the power of eminent domain, there arises an implied promise to
compensate the owner for his loss.11
Significantly, the above-mentioned provision of Section 9, Article III of the Constitution is not a grant but a limitationof
power. This limiting function is in keeping with the philosophy of the Bill of Rights against the arbitrary exercise of
governmental powers to the detriment of the individual’s rights. Given this function, the provision should therefore
be strictly interpreted against the expropriator, the government, and liberally in favor of the property owner.12
Ironically, in opposing respondent’s claim, the Republic is invoking this Court’s Decision in Valdehueza, a Decision it
utterly defied. How could the Republic acquire ownership over Lot 932 when it has not paid its owner the just
compensation, required by law, for more than 50 years? The recognized rule is that title to the property expropriated
shall pass from the owner to the expropriator only upon full payment of the just compensation. Jurisprudence on
this settled principle is consistent both here and in other democratic jurisdictions. In Association of Small Landowners
in the Philippines, Inc. et al., vs. Secretary of Agrarian Reform,13 thus:
"Title to property which is the subject of condemnation proceedings does not vest the condemnor until the
judgment fixing just compensation is entered and paid, but the condemnor’s title relates back to the date on which
the petition under the Eminent Domain Act, or the commissioner’s report under the Local Improvement Act, is filed.
x x x Although the right to appropriate and use land taken for a canal is complete at the time of entry, title to
the property taken remains in the owner until payment is actually made. (Emphasis supplied.)
In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to property does not pass to
the condemnor until just compensation had actually been made. In fact, the decisions appear to be uniform to this effect.
As early as 1838, in Rubottom v. McLure, it was held that ‘actual payment to the owner of the condemned property
was a condition precedent to the investment of the title to the property in the State’ albeit ‘not to the
appropriation of it to public use.’ In Rexford v. Knight, the Court of Appeals of New York said that the construction
upon the statutes was that the fee did not vest in the State until the payment of the compensation although the authority
to enter upon and appropriate the land was complete prior to the payment. Kennedy further said that ‘both on principle
and authority the rule is . . . that the right to enter on and use the property is complete, as soon as the property
is actually appropriated under the authority of law for a public use, but that the title does not pass from the
owner without his consent, until just compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that:
‘If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be
apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute reassurance
that no piece of land can be finally and irrevocably taken from an unwilling owner until compensation is
paid...’"(Emphasis supplied.)
Clearly, without full payment of just compensation, there can be no transfer of title from the landowner to the
expropriator. Otherwise stated, the Republic’s acquisition of ownership is conditioned upon the full payment of just
compensation within a reasonable time.14
Significantly, in Municipality of Biñan v. Garcia15 this Court ruled that the expropriation of lands consists of two stages,
to wit:
"x x x The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent
domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of
dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the property sought to be
condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be
determined as of the date of the filing of the complaint" x x x.
The second phase of the eminent domain action is concerned with the determination by the court of "the just
compensation for the property sought to be taken." This is done by the court with the assistance of not more than three
(3) commissioners. x x x.
It is only upon the completion of these two stages that expropriation is said to have been completed. In Republic v.
Salem Investment Corporation,16 we ruled that, "the process is not completed until payment of just compensation."
Thus, here, the failure of the Republic to pay respondent and his predecessors-in-interest for a period of 57 years
rendered the expropriation process incomplete.
The Republic now argues that under Valdehueza, respondent is not entitled to recover possession of Lot 932 but only
to demand payment of its fair market value. Of course, we are aware of the doctrine that "non-payment of just
compensation (in an expropriation proceedings) does not entitle the private landowners to recover possession of the
expropriated lots." This is our ruling in the recent cases of Republic of the Philippines vs. Court of Appeals, et
al.,17and Reyes vs. National Housing Authority.18 However, the facts of the present case do not justify its application. It
bears stressing that the Republic was ordered to pay just compensation twice, the first was in the expropriation
proceedings and the second, in Valdehueza. Fifty-seven (57) years have passed since then. We cannot but construe
the Republic’s failure to pay just compensation as a deliberate refusal on its part. Under such
circumstance, recovery of possession is in order. In several jurisdictions, the courts held that recovery of possession
may be had when property has been wrongfully taken or is wrongfully retained by one claiming to act under the power
of eminent domain19 or where a rightful entry is made and the party condemning refuses to pay the
compensation which has been assessed or agreed upon; 20 or fails or refuses to have the compensation assessed
and paid.21
The Republic also contends that where there have been constructions being used by the military, as in this case, public
interest demands that the present suit should not be sustained.
It must be emphasized that an individual cannot be deprived of his property for the public convenience. 22 In Association
of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform,23 we ruled:
"One of the basic principles of the democratic system is that where the rights of the individual are concerned, the end
does not justify the means. It is not enough that there be a valid objective; it is also necessary that the means employed
to pursue it be in keeping with the Constitution. Mere expediency will not excuse constitutional shortcuts. There is no
question that not even the strongest moral conviction or the most urgent public need, subject only to a few
notable exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that a person
invoking a right guaranteed under Article III of the Constitution is a majority of one even as against the rest of
the nation who would deny him that right.
The right covers the person’s life, his liberty and his property under Section 1 of Article III of the Constitution.
With regard to his property, the owner enjoys the added protection of Section 9, which reaffirms the familiar
rule that private property shall not be taken for public use without just compensation."
"Art. 2127. The mortgage extends to the natural accessions, to the improvements, growing fruits, and the rents or
income not yet received when the obligation becomes due, and to the amount of the indemnity granted or owing to
the proprietor from the insurers of the property mortgaged, or in virtue of expropriation for public use, with the
declarations, amplifications, and limitations established by law, whether the estate remains in the possession of the
mortgagor or it passes in the hands of a third person.
In summation, while the prevailing doctrine is that "the non-payment of just compensation does not entitle the private
landowner to recover possession of the expropriated lots,26 however, in cases where the government failed to pay just
compensation within five (5)27 years from the finality of the judgment in the expropriation proceedings, the
owners concerned shall have the right to recover possession of their property. This is in consonance with the principle
that "the government cannot keep the property and dishonor the judgment."28 To be sure, the five-year period limitation
will encourage the government to pay just compensation punctually. This is in keeping with justice and equity. After all,
it is the duty of the government, whenever it takes property from private persons against their will, to facilitate the
payment of just compensation. In Cosculluela v. Court of Appeals,29 we defined just compensation as not only the
correct determination of the amount to be paid to the property owner but also the payment of the property within
a reasonable time. Without prompt payment, compensation cannot be considered "just."

The Republic’s assertion that the defense of the State will be in grave danger if we shall order the reversion of Lot 932 WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No. 72915 is AFFIRMED in toto.
to respondent is an overstatement. First, Lot 932 had ceased to operate as an airport. What remains in the site is just The Republic’s motion for reconsideration of our Resolution dated March 1, 2004 is DENIED with FINALITY. No further
the National Historical Institute’s marking stating that Lot 932 is the "former location of Lahug Airport." And second, pleadings will be allowed.
there are only thirteen (13) structures located on Lot 932, eight (8) of which are residence apartments of military Let an entry of judgment be made in this case.
personnel. Only two (2) buildings are actually used as training centers. Thus, practically speaking, the reversion of Lot SO ORDERED.
932 to respondent will only affect a handful of military personnel. It will not result to "irreparable damage" or "damage
beyond pecuniary estimation," as what the Republic vehemently claims.

We thus rule that the special circumstances prevailing in this case entitle respondent to recover possession of the
expropriated lot from the Republic. Unless this form of swift and effective relief is granted to him, the grave injustice
committed against his predecessors-in-interest, though no fault or negligence on their part, will be perpetuated. Let this
case, therefore, serve as a wake-up call to the Republic that in the exercise of its power of eminent domain, necessarily
in derogation of private rights, it must comply with the Constitutional limitations. This Court, as the guardian of the
people’s right, will not stand still in the face of the Republic’s oppressive and confiscatory taking of private property, as
in this case.
At this point, it may be argued that respondent Vicente Lim acted in bad faith in entering into a contract of mortgage
with Valdehueza and Panerio despite the clear annotation in TCT No. 23934 that Lot 932 is "subject to the priority of
the National Airports Corporation [to acquire said parcels of land] x x x upon previous payment of a reasonable
market value."

The issue of whether or not respondent acted in bad faith is immaterial considering that the Republic did not complete
the expropriation process. In short, it failed to perfect its title over Lot 932 by its failure to pay just compensation. The
issue of bad faith would have assumed relevance if the Republic actually acquired title over Lot 932. In such a case,
even if respondent’s title was registered first, it would be the Republic’s title or right of ownership that shall be
upheld. But now, assuming that respondent was in bad faith, can such fact vest upon the Republic a better title
over Lot 932? We believe not. This is because in the first place, the Republic has no title to speak of.

At any rate, assuming that respondent had indeed knowledge of the annotation, still nothing would have prevented him
from entering into a mortgage contract involving Lot 932 while the expropriation proceeding was pending. Any person
who deals with a property subject of an expropriation does so at his own risk, taking into account the ultimate
possibility of losing the property in favor of the government. Here, the annotation merely served as a caveatthat the
Republic had a preferential right to acquire Lot 932 upon its payment of a "reasonable market value." It did not
proscribe Valdehueza and Panerio from exercising their rights of ownership including their right to mortgage or even to
dispose of their property. In Republic vs. Salem Investment Corporation,24 we recognized the owner’s absolute right
over his property pending completion of the expropriation proceeding, thus:

"It is only upon the completion of these two stages that expropriation is said to have been completed. Moreover, it is
only upon payment of just compensation that title over the property passes to the government. Therefore, until the
action for expropriation has been completed and terminated, ownership over the property being expropriated remains
with the registered owner. Consequently, the latter can exercise all rights pertaining to an owner, including the
right to dispose of his property subject to the power of the State ultimately to acquire it through expropriation.
It bears emphasis that when Valdehueza and Panerio mortgaged Lot 932 to respondent in 1964, they were still the
owners thereof and their title had not yet passed to the petitioner Republic. In fact, it never did. Such title or ownership
was rendered conclusive when we categorically ruled in Valdehueza that: "It is true that plaintiffs are still the
registered owners of the land, there not having been a transfer of said lots in favor of the Government."
For respondent’s part, it is reasonable to conclude that he entered into the contract of mortgage with Valdehueza and
Panerio fully aware of the extent of his right as a mortgagee. A mortgage is merely an accessory contract intended to
secure the performance of the principal obligation. One of its characteristics is that it is inseparablefrom the property.
It adheres to the property regardless of who its owner may subsequently be.25 Respondent must have known that even
if Lot 932 is ultimately expropriated by the Republic, still, his right as a mortgagee is protected. In this regard, Article
2127 of the Civil Code provides:
 When ARBs deemed full owners of awarded land
G.R. No. 148277 June 29, 2004
NICANOR MARTILLANO, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and WILSON PO CHAM, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure assailing the Decision of the Court of
Appeals in CA-G.R. SP No. 499291 dated September 19, 2000, and its Resolution dated March 9, 2001, which reversed
and set aside the decision of the Department of Agrarian Reform Adjudication Board (DARAB)2 dated July 31, 1998; in
effect, reinstating the Decision3 dated July 10, 1996 of the Provincial Adjudicator of Malolos, Bulacan, which declared
private respondent Wilson Po Cham to have the right to retain the 1.3785 hectare property pursuant to Section 6 of
Republic Act No. 6657.
The antecedent facts are as follows:
On April 24, 1989, Abelardo Valenzuela, Jr. instituted a complaint, docketed as DARAB Case 062-Bul ’89, before the
DAR Adjudication Board for the cancellation of the Certificate of Land Transfer (CLT) No. 0-042751 and/or Emancipation
Patent Nos. A-308399 issued in favor of Nicanor Martillano. In his complaint, Valenzuela alleged that he is the absolute
owner in fee simple of two parcels of land with an aggregate area of more or less 14,135 square meters located at
Pandayan (formerly Ibayo), Meycauyan, Bulacan. He averred that he has never instituted Martillano as tenant-farmer
and that the issuance of the said CLT and/or Emancipation Patents in his favor was erroneous and improper.
In answer to the complaint, Martillano claimed that he is a tenant of the Roman Catholic Church since 1972. He does
not recognize the complainant as the true and lawful landowner of the land he was tilling. He further claimed that he
acquired his tenurial status from his mother, Maria Martillano, and submitted in evidence a leasehold contract executed
by and between the Roman Catholic Church of Meycauyan, Bulacan and Maria Martillano.
On April 4, 1990, Valenzuela sold 19 parcels of land with an aggregate land area of more or less 1.3785 hectares to
private respondent Po Cham.4
On April 19, 1990, the Regional Adjudication Board of the Department of Agrarian Reform, Region III, rendered a
decision in DARAB Case No. 062-Bul ’89 finding that Martillano was not a bona fide tenant and declaring that CLT No.
0-042751 and Emancipation Patent No. A-308399 are null and void. The dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered:
1. Declaring respondent Nicanor Martillano as not a bona fide tenant of the land in dispute, consisting of two (2) parcels
known as Lot No. 18-C-1 with an area of 7,301 square meters and Lot No. 18-C-2 with an area of 6,834 square meters,
situated at Pandayan (formerly Ibayo), Meycauyan, Bulacan, owned by complainant Abelardo Valenzuela, Jr.;
2. Declaring null and void CLT No. 0-042751 and Emancipation Patent No. A-308399 generated in favor of respondent
Nicanor F. Martillano for having been erroneously and improperly issued, and ordering their immediate recall and/or
cancellation;
3. Ordering respondent Nicanor F. Martillano and all other persons claiming authority under him to immediately vacate
subject landholding and surrender possession thereof to complainant Abelardo D. Valenzuela.
On appeal, the DARAB reversed the decision of the Regional Adjudication Board and declared Martillano as a bona
fide tenant for the disputed land, and Certificate of Land Transfer No. 0-042751 and Emancipation Patent Nos. 308399
and 308400-(H) as valid. The decretal portion of the DARAB decision reads:
WHEREFORE, the Decision of the DAR Regional Adjudication Board dated April 19, 1990 is hereby REVERED, and a
new one entered:
1. Declaring the Appellant a bona fide tenant-tiller of the land in dispute;
2. Declaring and maintaining as valid the Certificate of Land Transfer numbered No. 0-042751 and the Emancipation
patent Nos. 308399 and 308400-(H) issued to appellant;
3. Directing the DAR Provincial Agrarian Reform Officer (PARO) of Baliuag, Bulacan to register the said Emancipation
Patents with the Register of Deed; for the Province of Bulacan and for the latter to enter the same in the Book of
Registry; and
4. Denying the Motion for Reconsideration dated February 26, 1991 filed by Appellee for being moot and academic.
From this decision, no appeal was interposed by Valenzuela.
Meanwhile, as early as May 13, 1994, Valenzuela filed an application with the DAR, Region III for the retention of a
portion of his landholdings with a total land area of 10.12625 hectares pursuant to Section 6 of RA 6657.5
In an Order dated December 20, 1996, the DAR, Region III, thru then Regional Director Eugenio B. Bernardo, granted
to Valenzuela 4.4597 hectares under TCT Nos. T-12773 (M) and T-12.774 (M) (formerly OCT No. 0-6061) as his
retention area. Thus:
WHEREFORE, premises considered, an ORDER is hereby issued, as follows:
1. GRANTING Valenzuela an area of 4.4597 hectares under TCT Nos. T-12773 (M) and T-12.774 (M) (formerly OCT
No. 0-6061) situated in Meycauyan, Bulacan, as his retention area;
2. DIRECTING Abelardo Valenzuela, Jr., to cause the segregation of his retained area at his own expense and to submit
a copy of the segregation plan to this Office within thirty (30) days from the approval thereof; and,
3. MAINTAINING the legality and validity of the Emancipation patents of Apolinario Antonio, Severo San Felipe,
Guillermo Pangilinan and Nicanor Martillano covering their respective tillages.
On March 11, 1997, William Po Cham filed a motion for intervention, claiming that he was the successor-in-interest of
Abelardo Valenzuela, Jr. over a portion of 1.3785 hectares which is the subject of a Deed of Sale dated April 4, 1990.
Valenzuela’s motion for reconsideration from the Order of DAR, Region III was treated as an appeal by the Department
of Agrarian Reform, which declared the retained area of Valenzuela to be five hectares including the portion subject of
the Deed of Absolute Sale to private respondent Po Cham consisting of 1.3785 hectares.
Earlier, on June 4, 1993, Po Cham filed a petition6 entitled "Wilson Po Cham v. the MARO and Register of Deeds of
Meycauyan, and PARO, all of the Province of Bulacan" before the DARAB, Region III, docketed as DARAB Case No.
512-Bul ’94, for the cancellation of Emancipation Patents Nos. 308399 and 308400 in the name of Martillano.
Significantly, Po Cham did not implead Nelson Martillano as one of the party-defendants in the case.7
On July 10, 1996, DARAB, Region III rendered its decision, the dispositive portion of which reads:8
WHEREFORE, premises considered, judgment is hereby rendered:
1. Declaring Petitioner (Wilson Po Cham) has the right to retain the 1.3785 hectare of property covered by the above-
mentioned titles pursuant to Section 6, R.A. No. 6657;
2. Directing respondents PARO of Bulacan and Register of Deeds of Meycauyan, both of Bulacan to recall and cancel
EP No. 308399/TCT No. EP-062 (M) and EP No. 308400 (H)/TCT No. EP-061 (M) and;
3. Directing tenant Nicanor F. Martillano be maintained in peaceful possession of the subject landholding that he is
actually cultivating.
Dissatisfied, Po Cham filed an appeal before the DARAB which rendered a decision on July 31, 1998, the decretal
portion of which reads:9
WHEREFORE, finding reversible errors committed by the Honorable Adjudicator a quo the decision appealed from is
hereby REVERSED and a new decision entered.
1. Declaring Nicanor Martillano as the lawful farmer-beneficiary and maintaining the Emancipation Patents numbered
30399 and 308400 issued in his name as valid; and
2. Maintaining Nicanor F. Martillano in peaceful possession and cultivation of the subject landholding; and
3. Declaring the conveyance of the landholding between Abelardo Valenzuela, Jr. and Plaintiff-Appellee Wilson Po
Cham as null and void for being contrary to law and public policy.
Unfazed by the adverse ruling, private respondent Po Cham filed a petition for review before the Court of Appeals
assailing the decision of DARAB. On September 19, 2000, the Court of Appeals rendered the challenged decision,
which granted the petition and reversed and set aside the July 31, 1998 decision of the DARAB.10
On March 9, 2001, the appellate court denied for lack of merit the motion for reconsideration filed by petitioner Martillano.
Hence the instant petition based on the following grounds:
I
THE RESPONDENT COURT ACTED WITHOUT JURISDICTION OR IN EXCESS OF JURISDICTION OR WITH
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN RENDERING THE QUESTIONED
DECISION OF SEPTEMBER 19, 2000 REVERSING AND SETTING ASIDE THE DARAB DECISION OF JULY 31,
1998 AND REINSTATING THE PROVINCIAL ADUDICATOR’S DECISION OF JULY 10, 1996.
II
THE RESPONDENT COURT ACTED WITHOUT JURISDICTION OR IN EXCESS OF JURISDICTION OR WITH
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN ISSUING THE ASSAILED
RESOLUTION OF MARCH 9, 2001 DENYING MARTILLANO’S MOTION FOR RECONSIDERATION OF THE
AFORESAID QUESTIONED DECISION.11
In the instant case, petitioner is appealing a final decision of the Court of Appeals by resorting to Rule 65, when his
remedy should be based on Rule 45. This case should have been dismissed outright for failure by the petitioner to
adopt the proper remedy. While ordinarily, certiorari is unavailing where the appeal period has lapsed, there are
exceptions. Among them are (a) when public welfare and the advancement of public policy dictates; (b) when the
broader interest of justice so requires; (c) when the writs issued are null and void; (d) or when the questioned order
amounts to an oppressive exercise of judicial authority. Hence, in the interest of substantial justice, we deem it wise to
overlook the procedural technicalities if only to demonstrate that despite the procedural infirmity, the instant petition is
impressed with merit.12
Petitioner contends that the failure of private respondent Po Cham to implead him as party defendant in DARAB Case
No. 512-Bul ’94 divested the Provincial Adjudicator of jurisdiction in rendering its decision of July 10, 1996 which
cancelled the Certificate of Land Transfer and the Emancipation Patents issued in his favor. For this procedural defect,
he argues that DARAB Case No. 512-Bul ’94 should have been dismissed outright inasmuch as under the Rules of
Civil Procedure, the Provincial Adjudicator could not proceed thereon without him being impleaded because he is an
indispensable party. He reasons that in the said case, Po Cham sought the cancellation of his CLT and Emancipation
Patents which directly affects his rights and interests over his landholdings. The Provincial Adjudicator should have
dismissed DARAB Case No. 512-Bul ’94 instead of erroneously and irregularly proceeding thereon and rendering a
decision adverse to him, specifically, the cancellation of his CLT and Emancipation Patents.
Petitioner further argues that although the decision in DARAB Case No. 062-Bul ’89 of the Regional Adjudication Board
of the Department of Agrarian Reform, Region III on April 19, 1990 was adverse to him, the DARAB on September 18,
1992 reversed the decision of the lower body and ruled that he is a bona fide tenant in the disputed land. It further
affirmed the validity of his CLT and the Emancipation Patents. He points out that since Valenzuela did not appeal from
the September 18, 1992 decision, the same became final and incontestable, thus finally rendering unassailable his
ownership of the subject landholdings. Since DARAB Case No. 062-Bul ’89 had long become final and executory before
the filing of DARAB Case No. 512-Bul ’94, and considering further that both cases involve the same subject matter, i.e.,
his 1.3785 hectare landholding, the former case constitutes res adjudicata as to the latter.
Petitioner further asserts that the finality of DARAB Case No. 062-Bul ’89 operates as a bar to the application by
Valenzuela for retention, considering that both cases had a common objective, that is, the cancellation of his CLT and
the Emancipation Patents.
The petition is meritorious. It is at once apparent from the records, as shown above, that as early as April 24, 1989,
Valenzuela filed a complaint for cancellation of Certificate of Land Transfer and Emancipation Patents issued in the
name of Martillano. At the first instance, the adjudication board declared Martillano to be not a bona fide tenant of the
land in dispute. On appeal, however, the DARAB reversed the ruling of the adjudication board. Valenzuela did not
appeal this adverse decision which, for all intents and purposes, became final and executory after the lapse of the
period within which to file an appeal.
It bears noting that an administrative adjudication partakes of the nature of judicial proceedings. The Department of
Agrarian Reform, through its adjudication boards, exercises quasi-judicial functions and jurisdiction on all matters
pertaining to agrarian dispute or controversy and the implementation of agrarian reform laws. Its judicial determinations
have the same binding effect as judgments and orders of a regular judicial body. At this juncture, reference is made to
pertinent sections of RA 6657 or the Comprehensive Agrarian Reform Law of 1988, namely:
Section 50. Quasi-Judicial Powers of the DAR. – The DAR is hereby vested with primary jurisdiction to determine and
adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the
implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture
(DA) and the Department of Environment and Natural Resources x x x.
The instant case is complicated by the failure of the complainant to include Martillano as party-defendant in the case
before the adjudication board and the DARAB, although he was finally impleaded on appeal before the Court of Appeals.
The belated inclusion of Martillano as respondent in the petition will not affect the applicability of the doctrine of bar by
prior judgment. What is decisive is that the issues which have already been litigated in a final and executory judgment
precludes, by the principle of bar by prior judgment, an aspect of the doctrine of res judicata, and even under the
doctrine of "law of the case", the re-litigation of the same issue in another action. It is well established that when a right
or fact has been judicially tried and determined by a court of competent jurisdiction, so long as it remains unreversed,
it should be conclusive upon the parties and those in privity with them. The dictum therein laid down became the law of
the case and what was once irrevocably established as the controlling legal rule or decision, continues to be binding
between the same parties as long as the facts on which the decision was predicated, continue to be the facts of the
case before the court. Hence, the binding effect and enforceability of that dictum can no longer be resurrected anew
since said issue had already been resolved and finally laid to rest, if not by the principle of res judicata, at least by
conclusiveness of judgment.14
In Mallari v. Court of Appeals, we clarified that the principle of res judicata may not be evaded by the mere expedient
of including an additional party to the first and second action, thus:15
But even if the cause of action in the Second Certiorari Petition were different, the issue determined in the First Certiorari
Petition, to reiterate, the validity of the Receivership Order, must, as between the same parties, be taken as conclusively
established so long as the judgment in the First Certiorari Petition remains unmodified. This is the rule on
conclusiveness of judgment, another aspect of res judicata doctrine, as enunciated in section 49 of the Rules of Court.
In the same case, we elucidated further on the doctrine of "the law of the case" in this wise:

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.
Under the afore-cited sections of RA 6657, the Department of Agrarian Reform is empowered, through its adjudicating
arm the regional and provincial adjudication boards, to resolve agrarian disputes and controversies on all matters
pertaining to the implementation of the agrarian law. Section 51 thereof provides that the decision of the DARAB attains
finality after the lapse of fifteen (15) days and no appeal was interposed therefrom by any of the parties.
In the instant case, the determination of the DARAB in DARAB Case No. 062-Bul ’89, there being no appeal interposed
therefrom, attained finality. Accordingly, the matter regarding the status of Martillano as a tenant farmer and the validity
of the CLT and Emancipation Patents issued in his favor are settled and no longer open to doubt and controversy.
In disputing petitioner’s arguments, private respondent Po Cham heavily relies on this Court’s pronouncements
in Pagtalunan v. Tamayo13 where it was categorically stated that "the mere issuance of the certificate of land transfer
does not vest in the farmer/grantee ownership of the land described therein." Compliance with certain pre-conditions,
such as payment of his lease rentals or amortization payments when they fall due for a period of two (2) years to the
landowner, is necessary in order that the grantee can claim the right of absolute ownership over them. Prescinding
therefrom, private respondent contends that the ownership of the disputed landholdings by petitioner is still contestable
and subject to revocation where there is no showing that he has complied with the prescribed pre-conditions for the
grant of absolute ownership.
And even under the "law of the case" doctrine, as aptly held in the original Decision in the Second Certiorari Petition
(CA-G.R. No. 36093-R), the Receivership Order is no longer open to further re-litigation. It constitutes the controlling
legal rule between the parties and cannot be modified or amended. By "law of the case" is meant that whatever is once
irrevocably established as the controlling legal rule or decision between the same parties in the same case continues
to be the law of the case so long as the facts on which the decision was predicated continue to be the facts of the case
before the court.
As fully as public policy demands that finality be accorded to judicial controversies, public interest requires that
proceedings already terminated should not be altered at every step, for the rule non quieta movere dictates that what
has been terminated should not be disturbed. Sound public policy dictates that, at the risk of occasional errors, we must
write finis, at one time or another, to judicial disputes.
WHEREFORE, in view of the foregoing, the Petition is GRANTED. The assailed Decision of September 19, 2000 and
the Resolution of March 9, 2001 are SET ASIDE. The Certificate of Land Transfer (CLT) No. 0-042751 and/or
Emancipation Patents Nos. A-308399 and A-308400 issued in favor of petitioner are maintained.
SO ORDERED.

We do not agree. Private respondent conveniently overlooks the fact that petitioner was issued both the CLT and
Emancipation Patents. Both instruments have varying legal effects and implications insofar as the grantee’s
entitlements to his landholdings. A certificate of land transfer merely evinces that the grantee thereof is qualified to, in
the words of Pagtalunan, "avail of the statutory mechanisms for the acquisition of ownership of the land tilled by him as
provided under Pres. Decree No. 27." It is not a muniment of title that vests upon the farmer/grantee absolute ownership
of his tillage. On the other hand, an emancipation patent, while it presupposes that the grantee thereof shall have
already complied with all the requirements prescribed under Presidential Decree No. 27, serves as a basis for the
issuance of a transfer certificate of title. It is the issuance of this emancipation patent that conclusively entitles the
farmer/grantee of the rights of absolute ownership. Pagtalunan distinctly recognizes this point when it said that:
It is the emancipation patent which constitutes conclusive authority for the issuance of an Original Certificate of Transfer,
or a Transfer Certificate of Title, in the name of the grantee x x x.

Clearly, it is only after compliance with the above conditions which entitle a farmer/grantee to an emancipation patent
that he acquires the vested right of absolute ownership in the landholding — a right which has become fixed and
established, and is no longer open to doubt or controversy [See definition of "vested right" or "vested interest" in Balbao
v. Farrales, 51 Phil. 498 (1928); Republic of the Philippines v. de Porkan, G.R. No. 66866, June 18, 1987, 151 SCRA
88]. At best, the farmer/grantee, prior to compliance with these conditions, merely possesses a contingent or expectant
right of ownership over the landholding.

We recall that DARAB Case 062-Bul ’89 was for the cancellation of petitioner’s CLT and Emancipation patents. The
same effect is sought with the institution of DARAB Case No. 512-Bul ’94, which is an action to withdraw and/or cancel
administratively the CLT and Emancipation Patents issued to petitioner. Considering that DARAB Case 062-Bul ’89 has
attained finality prior to the filing of DARAB Case No. 512-Bul ’94, no strenuous legal interpretation is necessary to
understand that the issues raised in the prior case, i.e., DARAB Case No. 062-Bul ’89, which have been resolved with
finality, may not be litigated anew.

 EP and CLOA as proofs of ownership
G.R. No. 127876 December 17, 1999
ROXAS & CO., INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM, SECRETARY OF AGRARIAN
REFORM, DAR REGIONAL DIRECTOR FOR REGION IV, MUNICIPAL AGRARIAN REFORM OFFICER OF
NASUGBU, BATANGAS and DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, respondents.
PUNO, J.:
This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the validity of the acquisition of
these haciendas by the government under Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988.
Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas, namely, Haciendas
Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu, Batangas. Hacienda Palico is 1,024 hectares
in area and is registered under Transfer Certificate of Title (TCT) No. 985. This land is covered by Tax Declaration Nos.
0465, 0466, 0468, 0470, 0234 and 0354. Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924
and covered by Tax Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571 hectares in area and is
registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665.
The events of this case occurred during the incumbency of then President Corazon C. Aquino. In February 1986,
President Aquino issued Proclamation No. 3 promulgating a Provisional Constitution. As head of the provisional
government, the President exercised legislative power "until a legislature is elected and convened under a new
Constitution." 1 In the exercise of this legislative power, the President signed on July 22, 1987, Proclamation No. 131
instituting a Comprehensive Agrarian Reform Program and Executive Order No. 229 providing the mechanisms
necessary to initially implement the program.
On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power from the
President. 2 This Congress passed Republic Act No. 6657, the Comprehensive Agrarian Reform Law (CARL) of 1988.
The Act was signed by the President on June 10, 1988 and took effect on June 15, 1988.
Before the law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer to sell Hacienda
Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and Banilad were later placed under compulsory
acquisition by respondent DAR in accordance with the CARL.
Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform Officer (MARO) of Nasugbu,
Batangas, sent a notice entitled "Invitation to Parties" to petitioner. The Invitation was addressed to "Jaime Pimentel,
Hda. Administrator, Hda. Palico." 3 Therein, the MARO invited petitioner to a conference on October 6, 1989 at the DAR
office in Nasugbu to discuss the results of the DAR investigation of Hacienda Palico, which was "scheduled for
compulsory acquisition this year under the Comprehensive Agrarian Reform Program." 4
On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation and ocular inspection of
the Hacienda. In the first Report, the MARO found that 270 hectares under Tax Declaration Nos. 465, 466, 468 and
470 were "flat to undulating (0-8% slope)" and actually occupied and cultivated by 34 tillers of sugarcane. 5 In the second
Report, the MARO identified as "flat to undulating" approximately 339 hectares under Tax Declaration No. 0234 which
also had several actual occupants and tillers of sugarcane; 6 while in the third Report, the MARO found approximately
75 hectare under Tax Declaration No. 0354 as "flat to undulating" with 33 actual occupants and tillers also of
sugarcane. 7
On October 27, 1989, a "Summary Investigation Report" was submitted and signed jointly by the MARO, representatives
of the Barangay Agrarian Reform Committee (BARC) and Land Bank of the Philippines (LBP), and by the Provincial
Agrarian Reform Officer (PARO). The Report recommended that 333.0800 hectares of Hacienda Palico be subject to
compulsory acquisition at a value of P6,807,622.20. 8 The following day, October 28, 1989, two (2) more Summary
Investigation Reports were submitted by the same officers and representatives. They recommended that 270.0876
hectares and 75.3800 hectares be placed under compulsory acquisition at a compensation of P8,109,739.00 and
P2,188,195.47, respectively. 9
On December 12, 1989, respondent DAR through then Department Secretary Miriam D. Santiago sent a "Notice of
Acquisition" to petitioner. The Notice was addressed as follows:
Roxas y Cia, Limited
Soriano Bldg., Plaza Cervantes
Manila, Metro Manila. 10
Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to immediate acquisition
and distribution by the government under the CARL; that based on the DAR's valuation criteria, the government was
offering compensation of P3.4 million for 333.0800 hectares; that whether this offer was to be accepted or rejected,
petitioner was to inform the Bureau of Land Acquisition and Distribution (BLAD) of the DAR; that in case of petitioner's
rejection or failure to reply within thirty days, respondent DAR shall conduct summary administrative proceedings with
notice to petitioner to determine just compensation for the land; that if petitioner accepts respondent DAR's offer, or
upon deposit of the compensation with an accessible bank if it rejects the same, the DAR shall take immediate
possession of the land. 11
Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager
three (3) separate Memoranda entitled "Request to Open Trust Account." Each Memoranda requested that a trust
account representing the valuation of three portions of Hacienda Palico be opened in favor of the petitioner in view of
the latter's rejection of its offered value. 12
Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of Haciendas Palico and Banilad
from agricultural to non-agricultural lands under the provisions of the CARL. 13 On July 14, 1993, petitioner sent a letter
to the DAR Regional Director reiterating its request for conversion of the two haciendas. 14
Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition of the two Haciendas.
The LBP trust accounts as compensation for Hacienda Palico were replaced by respondent DAR with cash and LBP
bonds. 15 On October 22, 1993, from the mother title of TCT No. 985 of the Hacienda, respondent DAR registered
Certificate of Land Ownership Award (CLOA) No. 6654. On October 30, 1993, CLOA's were distributed to farmer
beneficiaries. 16
Hacienda Banilad
On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent a notice to petitioner
addressed as follows:
Mr. Jaime Pimentel
Hacienda Administrator
Hacienda Banilad
Nasugbu, Batangas 17
The MARO informed Pimentel that Hacienda Banilad was subject to compulsory acquisition under the CARL; that
should petitioner wish to avail of the other schemes such as Voluntary Offer to Sell or Voluntary Land Transfer,
respondent DAR was willing to provide assistance thereto. 18
On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the latter to attend a
conference on September 21, 1989 at the MARO Office in Nasugbu to discuss the results of the MARO's investigation
over Hacienda Banilad. 19
On September 21, 1989, the same day the conference was held, the MARO submitted two (2) Reports. In his first
Report, he found that approximately 709 hectares of land under Tax Declaration Nos. 0237 and 0236 were "flat to
undulating (0-8% slope)." On this area were discovered 162 actual occupants and tillers of sugarcane. 20 In the second
Report, it was found that approximately 235 hectares under Tax Declaration No. 0390 were "flat to undulating," on
which were 92 actual occupants and tillers of sugarcane. 21
The results of these Reports were discussed at the conference. Present in the conference were representatives of the
prospective farmer beneficiaries, the BARC, the LBP, and Jaime Pimentel on behalf of the landowner. 22 After the
meeting, on the same day, September 21, 1989, a Summary Investigation Report was submitted jointly by the MARO,
representatives of the BARC, LBP, and the PARO. They recommended that after ocular inspection of the property,
234.6498 hectares under Tax Declaration No. 0390 be subject to compulsory acquisition and distribution by
CLOA. 23 The following day, September 22, 1989, a second Summary Investigation was submitted by the same officers.
They recommended that 737.2590 hectares under Tax Declaration Nos. 0236 and 0237 be likewise placed under
compulsory acquisition for distribution. 24
On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner two (2) separate
"Notices of Acquisition" over Hacienda Banilad. These Notices were sent on the same day as the Notice of Acquisition
over Hacienda Palico. Unlike the Notice over Hacienda Palico, however, the Notices over Hacienda Banilad were
addressed to:
Roxas y Cia. Limited
7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.
Makati, Metro Manila. 25
Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190 hectares and P4,428,496.00 for
234.6498 hectares. 26
On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a "Request to Open Trust
Account" in petitioner's name as compensation for 234.6493 hectares of Hacienda Banilad. 27 A second "Request to
Open Trust Account" was sent on November 18, 1991 over 723.4130 hectares of said Hacienda. 28
On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and P21,234,468.78 in cash and LBP
bonds had been earmarked as compensation for petitioner's land in Hacienda Banilad. 29
On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.
Hacienda Caylaway
Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before the effectivity of the
CARL. The Hacienda has a total area of 867.4571 hectares and is covered by four (4) titles — TCT Nos. T-44662, T-
44663, T-44664 and T-44665. On January 12, 1989, respondent DAR, through the Regional Director for Region IV,
sent to petitioner two (2) separate Resolutions accepting petitioner's voluntary offer to sell Hacienda Caylaway,
particularly TCT Nos. T-44664 and T-44663. 30 The Resolutions were addressed to:
Roxas & Company, Inc.
7th Flr. Cacho-Gonzales Bldg.
Aguirre, Legaspi Village
Makati, M. M 31
On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP Regional Manager
requesting for the valuation of the land under TCT Nos. T-44664 and T-44663. 32 On the same day, respondent DAR,
through the Regional Director, sent to petitioner a "Notice of Acquisition" over 241.6777 hectares under TCT No. T-
44664 and 533.8180 hectares under TCT No. T-44663. 33 Like the Resolutions of Acceptance, the Notice of Acquisition
was addressed to petitioner at its office in Makati, Metro Manila.
Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a letter to the Secretary of
respondent DAR withdrawing its VOS of Hacienda Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly
authorized the reclassification of Hacienda Caylaway from agricultural to non-agricultural. As a result, petitioner
informed respondent DAR that it was applying for conversion of Hacienda Caylaway from agricultural to other
uses. 34
In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a reclassification of the land
would not exempt it from agrarian reform. Respondent Secretary also denied petitioner's withdrawal of the VOS on the
ground that withdrawal could only be based on specific grounds such as unsuitability of the soil for agriculture, or if the
slope of the land is over 18 degrees and that the land is undeveloped. 35
Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner filed its application for
conversion of both Haciendas Palico and Banilad. 36 On July 14, 1993, petitioner, through its President, Eduardo Roxas,
reiterated its request to withdraw the VOS over Hacienda Caylaway in light of the following:
1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of Agriculture, Region 4, 4th Floor, ATI
(BA) Bldg., Diliman, Quezon City dated March 1, 1993 stating that the lands subject of referenced titles "are not feasible
and economically sound for further agricultural development.
2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the Zoning Ordinance reclassifying
areas covered by the referenced titles to non-agricultural which was enacted after extensive consultation with
government agencies, including [the Department of Agrarian Reform], and the requisite public hearings.
3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8, 1993 approving the Zoning
Ordinance enacted by the Municipality of Nasugbu.
4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal Planning & Development,
Coordinator and Deputized Zoning Administrator addressed to Mrs. Alicia P. Logarta advising that the Municipality of
Nasugbu, Batangas has no objection to the conversion of the lands subject of referenced titles to non-agricultural. 37
On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR Adjudication Board
(DARAB) praying for the cancellation of the CLOA's issued by respondent DAR in the name of several persons.
Petitioner alleged that the Municipality of Nasugbu, where the haciendas are located, had been declared a tourist zone,
that the land is not suitable for agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified
the land to non-agricultural.
In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the prejudicial question of
whether the property was subject to agrarian reform, hence, this question should be submitted to the Office of the
Secretary of Agrarian Reform for determination. 38
On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It questioned the expropriation
of its properties under the CARL and the denial of due process in the acquisition of its landholdings.
Meanwhile, the petition for conversion of the three haciendas was denied by the MARO on November 8, 1993.
Petitioner's petition was dismissed by the Court of Appeals on April 28, 1994. 39 Petitioner moved for reconsideration
but the motion was denied on January 17, 1997 by respondent court. 40
Hence, this recourse. Petitioner assigns the following errors:
A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER'S CAUSE OF ACTION
IS PREMATURE FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES IN VIEW OF THE PATENT
ILLEGALITY OF THE RESPONDENTS' ACTS, THE IRREPARABLE DAMAGE CAUSED BY SAID ILLEGAL ACTS,
AND THE ABSENCE OF A PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW —
ALL OF WHICH ARE EXCEPTIONS TO THE SAID DOCTRINE.
B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER'S LANDHOLDINGS
ARE SUBJECT TO COVERAGE UNDER THE COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF THE
UNDISPUTED FACT THAT PETITIONER'S LANDHOLDINGS HAVE BEEN CONVERTED TO NON-AGRICULTURAL
USES BY PRESIDENTIAL PROCLAMATION NO. 1520 WHICH DECLARED THE MUNICIPALITY NASUGBU,
BATANGAS AS A TOURIST ZONE, AND THE ZONING ORDINANCE OF THE MUNICIPALITY OF NASUGBU RE-
CLASSIFYING CERTAIN PORTIONS OF PETITIONER'S LANDHOLDINGS AS NON-AGRICULTURAL, BOTH OF
WHICH PLACE SAID LANDHOLDINGS OUTSIDE THE SCOPE OF AGRARIAN REFORM, OR AT THE VERY LEAST
ENTITLE PETITIONER TO APPLY FOR CONVERSION AS CONCEDED BY RESPONDENT DAR.
C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO DECLARE THE PROCEEDINGS
BEFORE RESPONDENT DAR VOID FOR FAILURE TO OBSERVE DUE PROCESS, CONSIDERING THAT
RESPONDENTS BLATANTLY DISREGARDED THE PROCEDURE FOR THE ACQUISITION OF PRIVATE LANDS
UNDER R.A. 6657, MORE PARTICULARLY, IN FAILING TO GIVE DUE NOTICE TO THE PETITIONER AND TO
PROPERLY IDENTIFY THE SPECIFIC AREAS SOUGHT TO BE ACQUIRED.
D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO RECOGNIZE THAT PETITIONER
WAS BRAZENLY AND ILLEGALLY DEPRIVED OF ITS PROPERTY WITHOUT JUST COMPENSATION,
CONSIDERING THAT PETITIONER WAS NOT PAID JUST COMPENSATION BEFORE IT WAS
UNCEREMONIOUSLY STRIPPED OF ITS LANDHOLDINGS THROUGH THE ISSUANCE OF CLOA'S TO ALLEGED
FARMER BENEFICIARIES, IN VIOLATION OF R.A. 6657. 41
The assigned errors involve three (3) principal issues: (1) whether this Court can take cognizance of this petition despite
petitioner's failure to exhaust administrative remedies; (2) whether the acquisition proceedings over the three haciendas
were valid and in accordance with law; and (3) assuming the haciendas may be reclassified from agricultural to non-
agricultural, whether this court has the power to rule on this issue.
I. Exhaustion of Administrative Remedies.
In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in finding that petitioner failed
to exhaust administrative remedies. As a general rule, before a party may be allowed to invoke the jurisdiction of the
courts of justice, he is expected to have exhausted all means of administrative redress. This is not absolute, however.
There are instances when judicial action may be resorted to immediately. Among these exceptions are: (1) when the
question raised is purely legal; (2) when the administrative body is in estoppel; (3) when the act complained of is patently
illegal; (4) when there is urgent need for judicial intervention; (5) when the respondent acted in disregard of due process;
(6) when the respondent is a department secretary whose acts, as an alter ego of the President, bear the implied or
assumed approval of the latter; (7) when irreparable damage will be suffered; (8) when there is no other plain, speedy
and adequate remedy; (9) when strong public interest is involved; (10) when the subject of the controversy is private
land; and (11) in quo warranto proceedings. 42
Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and to require it to exhaust
administrative remedies before the DAR itself was not a plain, speedy and adequate remedy.
Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to farmer beneficiaries over portions of
petitioner's land without just compensation to petitioner. A Certificate of Land Ownership Award (CLOA) is evidence of
ownership of land by a beneficiary under R.A. 6657, the Comprehensive Agrarian Reform Law of 1988. 43 Before this
may be awarded to a farmer beneficiary, the land must first be acquired by the State from the landowner and ownership
transferred to the former. The transfer of possession and ownership of the land to the government are conditioned upon
the receipt by the landowner of the corresponding payment or deposit by the DAR of the compensation with an
accessible bank. Until then, title remains with the landowner. 44 There was no receipt by petitioner of any compensation
for any of the lands acquired by the government.
The kind of compensation to be paid the landowner is also specific. The law provides that the deposit must be made
only in "cash" or "LBP bonds." 45 Respondent DAR's opening of trust account deposits in petitioner' s name with the
Land Bank of the Philippines does not constitute payment under the law. Trust account deposits are not cash or LBP
bonds. The replacement of the trust account with cash or LBP bonds did not ipso facto cure the lack of compensation;
for essentially, the determination of this compensation was marred by lack of due process. In fact, in the entire
acquisition proceedings, respondent DAR disregarded the basic requirements of administrative due process. Under
these circumstances, the issuance of the CLOA's to farmer beneficiaries necessitated immediate judicial action on the
part of the petitioner.
II. The Validity of the Acquisition Proceedings Over the Haciendas.
Petitioner's allegation of lack of due process goes into the validity of the acquisition proceedings themselves. Before
we rule on this matter, however, there is need to lay down the procedure in the acquisition of private lands under the
provisions of the law.
A. Modes of Acquisition of Land under R. A. 6657
Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for two (2) modes of
acquisition of private land: compulsory and voluntary. The procedure for the compulsory acquisition of private lands is
set forth in Section 16 of R.A. 6657, viz:
Sec. 16. Procedure for Acquisition of Private Lands. — For purposes of acquisition of private lands, the following
procedures shall be followed:
a). After having identified the land, the landowners and the beneficiaries, the DAR shall send its notice to acquire the
land to the owners thereof, by personal delivery or registered mail, and post the same in a conspicuous place in the
municipal building and barangay hall of the place where the property is located. Said notice shall contain the offer of
the DAR to pay a corresponding value in accordance with the valuation set forth in Sections 17, 18, and other pertinent
provisions hereof.
b) Within thirty (30) days from the date of receipt of written notice by personal delivery or registered mail, the landowner,
his administrator or representative shall inform the DAR of his acceptance or rejection of the offer.
c) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the purchase price of the land within
thirty (30) days after he executes and delivers a deed of transfer in favor of the Government and surrenders the
Certificate of Title and other muniments of title.
d) In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings to determine the
compensation for the land requiring the landowner, the LBP and other interested parties to submit evidence as to the
just compensation for the land, within fifteen (15) days from receipt of the notice. After the expiration of the above period,
the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is submitted
for decision.
e) Upon receipt by the landowner of the corresponding payment, or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP
bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper
Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR
shall thereafter proceed with the redistribution of the land to the qualified beneficiaries.
f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination
of just compensation.
In the compulsory acquisition of private lands, the landholding, the landowners and the farmer beneficiaries must first
be identified. After identification, the DAR shall send a Notice of Acquisition to the landowner, by personal delivery or
registered mail, and post it in a conspicuous place in the municipal building and barangay hall of the place where the
property is located. Within thirty days from receipt of the Notice of Acquisition, the landowner, his administrator or
representative shall inform the DAR of his acceptance or rejection of the offer. If the landowner accepts, he executes
and delivers a deed of transfer in favor of the government and surrenders the certificate of title. Within thirty days from
the execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays the owner the purchase price. If the
landowner rejects the DAR's offer or fails to make a reply, the DAR conducts summary administrative proceedings to
determine just compensation for the land. The landowner, the LBP representative and other interested parties may
submit evidence on just compensation within fifteen days from notice. Within thirty days from submission, the DAR shall
decide the case and inform the owner of its decision and the amount of just compensation. Upon receipt by the owner
of the corresponding payment, or, in case of rejection or lack of response from the latter, the DAR shall deposit the
compensation in cash or in LBP bonds with an accessible bank. The DAR shall immediately take possession of the
land and cause the issuance of a transfer certificate of title in the name of the Republic of the Philippines. The land shall
then be redistributed to the farmer beneficiaries. Any party may question the decision of the DAR in the regular courts
for final determination of just compensation.
The DAR has made compulsory acquisition the priority mode of the land acquisition to hasten the implementation of
the Comprehensive Agrarian Reform Program (CARP). 46 Under Section 16 of the CARL, the first step in compulsory
acquisition is the identification of the land, the landowners and the beneficiaries. However, the law is silent on how the
identification process must be made. To fill in this gap, the DAR issued on July 26, 1989 Administrative Order
No. 12, Series or 1989, which set the operating procedure in the identification of such lands. The procedure is as
follows:
II. OPERATING PROCEDURE
A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent Barangay Agrarian Reform Committee
(BARC), shall:
1. Update the masterlist of all agricultural lands covered under the CARP in his area of responsibility. The masterlist
shall include such information as required under the attached CARP Masterlist Form which shall include the name of
the landowner, landholding area, TCT/OCT number, and tax declaration number.
2. Prepare a Compulsory Acquisition Case Folder (CACF) for each title (OCT/TCT) or landholding covered under Phase
I and II of the CARP except those for which the landowners have already filed applications to avail of other modes of
land acquisition. A case folder shall contain the following duly accomplished forms:
a) CARP CA Form 1 — MARO Investigation Report
b) CARP CA Form 2 — Summary Investigation Report of Findings and Evaluation
c) CARP CA Form 3 — Applicant's Information Sheet
d) CARP CA Form 4 — Beneficiaries Undertaking
e) CARP CA Form 5 — Transmittal Report to the PARO
The MARO/BARC shall certify that all information contained in the above-mentioned forms have been examined and
verified by him and that the same are true and correct.
3. Send a Notice of Coverage and a letter of invitation to a conference/meeting to the landowner covered by the
Compulsory Case Acquisition Folder. Invitations to the said conference/meeting shall also be sent to the prospective
farmer-beneficiaries, the BARC representative(s), the Land Bank of the Philippines (LBP) representative, and other
interested parties to discuss the inputs to the valuation of the property. He shall discuss the MARO/BARC investigation
report and solicit the views, objection, agreements or suggestions of the participants thereon. The landowner shall also
be asked to indicate his retention area. The minutes of the meeting shall be signed by all participants in the conference
and shall form an integral part of the CACF.
4. Submit all completed case folders to the Provincial Agrarian Reform Officer (PARO).
B. The PARO shall:
1. Ensure that the individual case folders are forwarded to him by his MAROs.
2. Immediately upon receipt of a case folder, compute the valuation of the land in accordance with A.O. No. 6, Series
of 1988. 47 The valuation worksheet and the related CACF valuation forms shall be duly certified correct by the PARO
and all the personnel who participated in the accomplishment of these forms.
3. In all cases, the PARO may validate the report of the MARO through ocular inspection and verification of the property.
This ocular inspection and verification shall be mandatory when the computed value exceeds = 500,000 per estate.
4. Upon determination of the valuation, forward the case folder, together with the duly accomplished valuation forms
and his recommendations, to the Central Office. The LBP representative and the MARO concerned shall be furnished
a copy each of his report.
C. DAR Central Office, specifically through the Bureau of Land Acquisition and Distribution (BLAD), shall:
1. Within three days from receipt of the case folder from the PARO, review, evaluate and determine the final land
valuation of the property covered by the case folder. A summary review and evaluation report shall be prepared and
duly certified by the BLAD Director and the personnel directly participating in the review and final valuation.
2. Prepare, for the signature of the Secretary or her duly authorized representative, a Notice of Acquisition (CARP CA
Form 8) for the subject property. Serve the Notice to the landowner personally or through registered mail within three
days from its approval. The Notice shall include, among others, the area subject of compulsory acquisition, and the
amount of just compensation offered by DAR.
3. Should the landowner accept the DAR's offered value, the BLAD shall prepare and submit to the Secretary for
approval the Order of Acquisition. However, in case of rejection or non-reply, the DAR Adjudication Board (DARAB)
shall conduct a summary administrative hearing to determine just compensation, in accordance with the procedures
provided under Administrative Order No. 13, Series of 1989. Immediately upon receipt of the DARAB's decision on just
compensation, the BLAD shall prepare and submit to the Secretary for approval the required Order of Acquisition.
4. Upon the landowner's receipt of payment, in case of acceptance, or upon deposit of payment in the designated bank,
in case of rejection or non-response, the Secretary shall immediately direct the pertinent Register of Deeds to issue the
corresponding Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. Once the property is
transferred, the DAR, through the PARO, shall take possession of the land for redistribution to qualified beneficiaries.
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer (MARO) keep an
updated master list of all agricultural lands under the CARP in his area of responsibility containing all the required
information. The MARO prepares a Compulsory Acquisition Case Folder (CACF) for each title covered by CARP. The
MARO then sends the landowner a "Notice of Coverage" and a "letter of invitation" to a "conference/meeting" over the
land covered by the CACF. He also sends invitations to the prospective farmer-beneficiaries the representatives of the
Barangay Agrarian Reform Committee (BARC), the Land Bank of the Philippines (LBP) and other interested parties to
discuss the inputs to the valuation of the property and solicit views, suggestions, objections or agreements of the parties.
At the meeting, the landowner is asked to indicate his retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO) who shall complete the
valuation of the land. Ocular inspection and verification of the property by the PARO shall be mandatory when the
computed value of the estate exceeds P500,000.00. Upon determination of the valuation, the PARO shall forward all
papers together with his recommendation to the Central Office of the DAR. The DAR Central Office, specifically, the
Bureau of Land Acquisition and Distribution (BLAD), shall review, evaluate and determine the final land valuation of the
property. The BLAD shall prepare, on the signature of the Secretary or his duly authorized representative, a Notice of
Acquisition for the subject property. 48 From this point, the provisions of Section 16 of R.A. 6657 then apply. 49
For a valid implementation of the CAR program, two notices are required: (1) the Notice of Coverage and letter of
invitation to a preliminary conference sent to the landowner, the representatives of the BARC, LBP, farmer beneficiaries
and other interested parties pursuant to DAR A.O. No. 12, Series of 1989; and (2) the Notice of Acquisition sent to the
landowner under Section 16 of the CARL.
The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the conference, and its actual
conduct cannot be understated. They are steps designed to comply with the requirements of administrative due process.
The implementation of the CARL is an exercise of the State's police power and the power of eminent domain. To the
extent that the CARL prescribes retention limits to the landowners, there is an exercise of police power for the regulation
of private property in accordance with the Constitution. 50 But where, to carry out such regulation, the owners are
deprived of lands they own in excess of the maximum area allowed, there is also a taking under the power of eminent
domain. The taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of the
title to and physical possession of the said excess and all beneficial rights accruing to the owner in favor of the farmer
beneficiary. 51 The Bill of Rights provides that "[n]o person shall be deprived of life, liberty or property without due
process of law." 52 The CARL was not intended to take away property without due process of law. 53 The exercise of
the power of eminent domain requires that due process be observed in the taking of private property.
DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was amended in 1990 by DAR
A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No. 1, Series of 1993. The Notice of Coverage and letter of
invitation to the conference meeting were expanded and amplified in said amendments.
DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural Lands Subject of
Voluntary Offer to Sell and Compulsory Acquisition Pursuant to R.A. 6657," requires that:
B. MARO
1. Receives the duly accomplished CARP Form Nos. 1 & 1.1 including supporting documents.
2. Gathers basic ownership documents listed under 1.a or 1.b above and prepares corresponding VOCF/CACF by
landowner/landholding.
3. Notifies/invites the landowner and representatives of the LBP, DENR, BARC and prospective beneficiaries of the
schedule of ocular inspection of the property at least one week in advance.
4. MARO/LAND BANK FIELD OFFICE/BARC
a) Identify the land and landowner, and determine the suitability for agriculture and productivity of the land and jointly
prepare Field Investigation Report (CARP Form No. 2), including the Land Use Map of the property.
b) Interview applicants and assist them in the preparation of the Application For Potential CARP Beneficiary (CARP
Form No. 3).
c) Screen prospective farmer-beneficiaries and for those found qualified, cause the signing of the respective Application
to Purchase and Farmer's Undertaking (CARP Form No. 4).
d) Complete the Field Investigation Report based on the result of the ocular inspection/investigation of the property and
documents submitted. See to it that Field Investigation Report is duly accomplished and signed by all concerned.
5. MARO
a) Assists the DENR Survey Party in the conduct of a boundary/ subdivision survey delineating areas covered by OLT,
retention, subject of VOS, CA (by phases, if possible), infrastructures, etc., whichever is applicable.
b) Sends Notice of Coverage (CARP Form No. 5) to landowner concerned or his duly authorized representative inviting
him for a conference.
c) Sends Invitation Letter (CARP Form No. 6) for a conference/public hearing to prospective farmer-beneficiaries,
landowner, representatives of BARC, LBP, DENR, DA, NGO's, farmers' organizations and other interested parties to
discuss the following matters:
Result of Field Investigation
Inputs to valuation
Issues raised
Comments/recommendations by all parties concerned.
d) Prepares Summary of Minutes of the conference/public hearing to be guided by CARP Form No. 7.
e) Forwards the completed VOCF/CACF to the Provincial Agrarian Reform Office (PARO) using CARP Form No. 8
(Transmittal Memo to PARO).
xxx xxx xxx
DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and Compulsory Acquisition
(CA) transactions involving lands enumerated under Section 7 of the CARL. 54 In both VOS and CA. transactions, the
MARO prepares the Voluntary Offer to Sell Case Folder (VOCF) and the Compulsory Acquisition Case Folder (CACF),
as the case may be, over a particular landholding. The MARO notifies the landowner as well as representatives of the
LBP, BARC and prospective beneficiaries of the date of the ocular inspection of the property at least one week before
the scheduled date and invites them to attend the same. The MARO, LBP or BARC conducts the ocular inspection and
investigation by identifying the land and landowner, determining the suitability of the land for agriculture and productivity,
interviewing and screening prospective farmer beneficiaries. Based on its investigation, the MARO, LBP or BARC
prepares the Field Investigation Report which shall be signed by all parties concerned. In addition to the field
investigation, a boundary or subdivision survey of the land may also be conducted by a Survey Party of the Department
of Environment and Natural Resources (DENR) to be assisted by the MARO. 55 This survey shall delineate the areas
covered by Operation Land Transfer (OLT), areas retained by the landowner, areas with infrastructure, and the areas
subject to VOS and CA. After the survey and field investigation, the MARO sends a "Notice of Coverage" to the
landowner or his duly authorized representative inviting him to a conference or public hearing with the farmer
beneficiaries, representatives of the BARC, LBP, DENR, Department of Agriculture (DA), non-government
organizations, farmer's organizations and other interested parties. At the public hearing, the parties shall discuss the
results of the field investigation, issues that may be raised in relation thereto, inputs to the valuation of the subject
landholding, and other comments and recommendations by all parties concerned. The Minutes of the conference/public
hearing shall form part of the VOCF or CACF which files shall be forwarded by the MARO to the PARO. The PARO
reviews, evaluates and validates the Field Investigation Report and other documents in the VOCF/CACF. He then
forwards the records to the RARO for another review.
DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. DAR A.O. No. 1, Series of 1993 the findings of the DAR and the
provided, among others, that: LBP as to the propriety of
IV. OPERATING PROCEDURES: covering the land under CARP,
Steps Responsible Activity Forms/ whether in whole or in part, on
Agency/Unit Document the issue of suitability to agriculture,
(requirements) degree of development or slope,
A. Identification and and on issues affecting idle lands,
Documentation the conflict shall be resolved by
xxx xxx xxx a composite team of DAR, LBP,
5 DARMO Issue Notice of Coverage CARP DENR and DA which shall jointly
to LO by personal delivery Form No. 2 conduct further investigation
with proof of service, or thereon. The team shall submit its
registered mail with return report of findings which shall be
card, informing him that his binding to both DAR and LBP,
property is now under CARP pursuant to Joint Memorandum
coverage and for LO to select Circular of the DAR, LBP, DENR
his retention area, if he desires and DA dated 27 January 1992.
to avail of his right of retention; 8 DARMO Screen prospective ARBs
and at the same time invites him BARC and causes the signing of CARP
to join the field investigation to the Application of Purchase Form No. 5
be conducted on his property and Farmer's Undertaking
which should be scheduled at (APFU).
least two weeks in advance of 9 DARMO Furnishes a copy of the CARP
said notice. duly accomplished FIR to Form No. 4
A copy of said Notice shall CARP the landowner by personal
be posted for at least one Form No. 17 delivery with proof of
week on the bulletin board of service or registered mail
the municipal and barangay will return card and posts
halls where the property is a copy thereof for at least
located. LGU office concerned one week on the bulletin
notifies DAR about compliance board of the municipal
with posting requirements thru and barangay halls where
return indorsement on CARP the property is located.
Form No. 17. LGU office concerned CARP
6 DARMO Send notice to the LBP, CARP notifies DAR about Form No. 17
BARC, DENR representatives Form No. 3 compliance with posting
and prospective ARBs of the schedule of the field investigation requirement thru return
to be conducted on the subject endorsement on CARP
property. Form No. 17.
7 DARMO With the participation of CARP B. Land Survey
BARC the LO, representatives of Form No. 4 10 DARMO Conducts perimeter or Perimeter
LBP the LBP, BARC, DENR Land Use And/or segregation survey or
DENR and prospective ARBs, Map DENR delineating areas covered Segregation
Local Office conducts the investigation on Local Office by OLT, "uncarpable Survey Plan
subject property to identify areas such as 18% slope
the landholding, determines and above, unproductive/
its suitability and productivity; unsuitable to agriculture,
and jointly prepares the Field retention, infrastructure.
Investigation Report (FIR) In case of segregation or
and Land Use Map. However, subdivision survey, the
the field investigation shall plan shall be approved
proceed even if the LO, the by DENR-LMS.
representatives of the DENR and C. Review and Completion
prospective ARBs are not available of Documents
provided, they were given due 11. DARMO Forward VOCF/CACF CARP
notice of the time and date of to DARPO. Form No. 6
investigation to be conducted. xxx xxx xxx.
Similarly, if the LBP representative DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number of government agencies
is not available or could not come involved in the identification and delineation of the land subject to acquisition. 56 This time, the Notice of Coverage is
on the scheduled date, the field sent to the landowner before the conduct of the field investigation and the sending must comply with specific
investigation shall also be conducted, requirements. Representatives of the DAR Municipal Office (DARMO) must send the Notice of Coverage to the
after which the duly accomplished landowner by "personal delivery with proof of service, or by registered mail with return card," informing him that his
Part I of CARP Form No. 4 shall property is under CARP coverage and that if he desires to avail of his right of retention, he may choose which area he
be forwarded to the LBP shall retain. The Notice of Coverage shall also invite the landowner to attend the field investigation to be scheduled at
representative for validation. If he agrees least two weeks from notice. The field investigation is for the purpose of identifying the landholding and determining its
to the ocular inspection report of DAR, suitability for agriculture and its productivity. A copy of the Notice of Coverage shall be posted for at least one week on
he signs the FIR (Part I) and the bulletin board of the municipal and barangay halls where the property is located. The date of the field investigation
accomplishes Part II thereof. shall also be sent by the DAR Municipal Office to representatives of the LBP, BARC, DENR and prospective farmer
In the event that there is a beneficiaries. The field investigation shall be conducted on the date set with the participation of the landowner and the
difference or variance between various representatives. If the landowner and other representatives are absent, the field investigation shall proceed,
provided they were duly notified thereof. Should there be a variance between the findings of the DAR and the LBP as
to whether the land be placed under agrarian reform, the land's suitability to agriculture, the degree or development of
the slope, etc., the conflict shall be resolved by a composite team of the DAR, LBP, DENR and DA which shall jointly
conduct further investigation. The team's findings shall be binding on both DAR and LBP. After the field investigation,
the DAR Municipal Office shall prepare the Field Investigation Report and Land Use Map, a copy of which shall be
furnished the landowner "by personal delivery with proof of service or registered mail with return card." Another copy of
the Report and Map shall likewise be posted for at least one week in the municipal or barangay halls where the property
is located.
Clearly then, the notice requirements under the CARL are not confined to the Notice of Acquisition set forth in Section
16 of the law. They also include the Notice of Coverage first laid down in DAR A.O. No. 12, Series of 1989 and
subsequently amended in DAR A.O. No. 9, Series of 1990 and DAR A.O. No. 1, Series of 1993. This Notice of Coverage
does not merely notify the landowner that his property shall be placed under CARP and that he is entitled to exercise
his retention right; it also notifies him, pursuant to DAR A.O. No. 9, Series of 1990, that a public hearing, shall be
conducted where he and representatives of the concerned sectors of society may attend to discuss the results of the
field investigation, the land valuation and other pertinent matters. Under DAR A.O. No. 1, Series of 1993, the Notice of
Coverage also informs the landowner that a field investigation of his landholding shall be conducted where he and the
other representatives may be present.
B. The Compulsory Acquisition of Haciendas Palico and Banilad
In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a letter of invitation entitled
"Invitation to Parties" dated September 29, 1989 to petitioner corporation, through Jaime Pimentel, the administrator of
Hacienda Palico. 57 The invitation was received on the same day it was sent as indicated by a signature and the date
received at the bottom left corner of said invitation. With regard to Hacienda Banilad, respondent DAR claims that Jaime
Pimentel, administrator also of Hacienda Banilad, was notified and sent an invitation to the conference. Pimentel actually
attended the conference on September 21, 1989 and signed the Minutes of the meeting on behalf of petitioner
corporation. 58 The Minutes was also signed by the representatives of the BARC, the LBP and farmer
beneficiaries. 59 No letter of invitation was sent or conference meeting held with respect to Hacienda Caylaway because
it was subject to a Voluntary Offer to Sell to respondent DAR. 60
When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the various parties the Notice
of Coverage and invitation to the conference, DAR A.O. No. 12, Series of 1989 was already in effect more than a month
earlier. The Operating Procedure in DAR Administrative Order No. 12 does not specify how notices or letters of invitation
shall be sent to the landowner, the representatives of the BARC, the LBP, the farmer beneficiaries and other interested
parties. The procedure in the sending of these notices is important to comply with the requisites of due process
especially when the owner, as in this case, is a juridical entity. Petitioner is a domestic
corporation, 61 and therefore, has a personality separate and distinct from its shareholders, officers and employees.
The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by "personal delivery or
registered mail." Whether the landowner be a natural or juridical person to whose address the Notice may be sent by
personal delivery or registered mail, the law does not distinguish. The DAR Administrative Orders also do not
distinguish. In the proceedings before the DAR, the distinction between natural and juridical persons in the sending of
notices may be found in the Revised Rules of Procedure of the DAR Adjudication Board (DARAB). Service of pleadings
before the DARAB is governed by Section 6, Rule V of the DARAB Revised Rules of Procedure. Notices and pleadings
are served on private domestic corporations or partnerships in the following manner:
Sec. 6. Service upon Private Domestic Corporation or Partnership. — If the defendant is a corporation organized under
the laws of the Philippines or a partnership duly registered, service may be made on the president, manager, secretary,
cashier, agent, or any of its directors or partners.
Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:
Sec. 13. Service upon private domestic corporation or partnership. — If the defendant is a corporation organized under
the laws of the Philippines or a partnership duly registered, service may be made on the president, manager, secretary,
cashier, agent, or any of its directors.
Summonses, pleadings and notices in cases against a private domestic corporation before the DARAB and the regular
courts are served on the president, manager, secretary, cashier, agent or any of its directors. These persons are those
through whom the private domestic corporation or partnership is capable of action. 62
Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner corporation. Is he, as
administrator of the two Haciendas, considered an agent of the corporation?
The purpose of all rules for service of process on a corporation is to make it reasonably certain that the corporation will
receive prompt and proper notice in an action against it. 63 Service must be made on a representative so integrated with
the corporation as to make it a priori supposable that he will realize his responsibilities and know what he should do
with any legal papers served on him, 64 and bring home to the corporation notice of the filing of the action. 65 Petitioner's
evidence does not show the official duties of Jaime Pimentel as administrator of petitioner's haciendas. The evidence
does not indicate whether Pimentel's duties is so integrated with the corporation that he would immediately realize his
responsibilities and know what he should do with any legal papers served on him. At the time the notices were sent and
the preliminary conference conducted, petitioner's principal place of business was listed in respondent DAR's records
as "Soriano Bldg., Plaza Cervantes, Manila," 66 and "7th Flr. Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro
Manila." 67 Pimentel did not hold office at the principal place of business of petitioner. Neither did he exercise his
functions in Plaza Cervantes, Manila nor in Cacho-Gonzales Bldg., Makati, Metro Manila. He performed his official
functions and actually resided in the haciendas in Nasugbu, Batangas, a place over two hundred kilometers away from
Metro Manila.
Curiously, respondent DAR had information of the address of petitioner's principal place of business. The Notices of
Acquisition over Haciendas Palico and Banilad were addressed to petitioner at its offices in Manila and Makati. These
Notices were sent barely three to four months after Pimentel was notified of the preliminary conference. 68Why
respondent DAR chose to notify Pimentel instead of the officers of the corporation was not explained by the said
respondent.
Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices and letters of invitation
were validly served on petitioner through him, there is no showing that Pimentel himself was duly authorized to attend
the conference meeting with the MARO, BARC and LBP representatives and farmer beneficiaries for purposes of
compulsory acquisition of petitioner's landholdings. Even respondent DAR's evidence does not indicate this authority.
On the contrary, petitioner claims that it had no knowledge of the letter-invitation, hence, could not have given Pimentel
the authority to bind it to whatever matters were discussed or agreed upon by the parties at the preliminary conference
or public hearing. Notably, one year after Pimentel was informed of the preliminary conference, DAR A.O. No. 9, Series
of 1990 was issued and this required that the Notice of Coverage must be sent "to the landowner concerned or his duly
authorized representative." 69
Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the areas found actually
subject to CARP were not properly identified before they were taken over by respondent DAR. Respondents insist that
the lands were identified because they are all registered property and the technical description in their respective titles
specifies their metes and bounds. Respondents admit at the same time, however, that not all areas in the haciendas
were placed under the comprehensive agrarian reform program invariably by reason of elevation or character or use of
the land. 70
The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but only portions thereof.
Hacienda Palico has an area of 1,024 hectares and only 688.7576 hectares were targetted for acquisition. Hacienda
Banilad has an area of 1,050 hectares but only 964.0688 hectares were subject to CARP. The haciendas are not entirely
agricultural lands. In fact, the various tax declarations over the haciendas describe the landholdings as "sugarland,"
and "forest, sugarland, pasture land, horticulture and woodland." 71
Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that the land subject to land
reform be first identified. The two haciendas in the instant case cover vast tracts of land. Before Notices of Acquisition
were sent to petitioner, however, the exact areas of the landholdings were not properly segregated and
delineated. Upon receipt of this notice, therefore, petitioner corporation had no idea which portions of its estate were
subject to compulsory acquisition, which portions it could rightfully retain, whether these retained portions were compact
or contiguous, and which portions were excluded from CARP coverage. Even respondent DAR's evidence does not
show that petitioner, through its duly authorized representative, was notified of any ocular inspection and investigation
that was to be conducted by respondent DAR. Neither is there proof that petitioner was given the opportunity to at least
choose and identify its retention area in those portions to be acquired compulsorily. The right of retention and how this
right is exercised, is guaranteed in Section 6 of the CARL, viz:
Sec. 6. Retention Limits. — . . . .
The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the
landowner; Provided, however, That in case the area selected for retention by the landowner is tenanted, the tenant
shall have the option to choose whether to remain therein or be a beneficiary in the same or another agricultural land
with similar or comparable features. In case the tenant chooses to remain in the retained area, he shall be considered
a leaseholder and shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a beneficiary
in another agricultural land, he loses his right as a leaseholder to the land retained by the landowner. The tenant must
exercise this option within a period of one (1) year from the time the landowner manifests his choice of the area for
retention.
Under the law, a landowner may retain not more than five hectares out of the total area of his agricultural land subject
to CARP. The right to choose the area to be retained, which shall be compact or contiguous, pertains to the landowner.
If the area chosen for retention is tenanted, the tenant shall have the option to choose whether to remain on the portion
or be a beneficiary in the same or another agricultural land with similar or comparable features.
C. The Voluntary Acquisition of Hacienda Caylaway
Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of a Voluntary Offer to
Sell (VOS). The VOS in the instant case was made on May 6, 1988, 72 before the effectivity of R.A. 6657 on June 15,
1988. VOS transactions were first governed by DAR Administrative Order No. 19, series of 1989, 73 and under this
order, all VOS filed before June 15, 1988 shall be heard and processed in accordance with the procedure provided for
in Executive Order No. 229, thus:
III. All VOS transactions which are now pending before the DAR and for which no payment has been made shall be
subject to the notice and hearing requirements provided in Administrative Order No. 12, Series of 1989, dated 26 July
1989, Section II, Subsection A, paragraph 3.
All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be heard and processed in accordance with
the procedure provided for in Executive Order No. 229.
xxx xxx xxx.
Sec. 9 of E.O. 229 provides:
Sec. 9. Voluntary Offer to Sell. — The government shall purchase all agricultural lands it deems productive and suitable
to farmer cultivation voluntarily offered for sale to it at a valuation determined in accordance with Section 6. Such
transaction shall be exempt from the payment of capital gains tax and other taxes and fees.
Executive Order 229 does not contain the procedure for the identification of private land as set forth in DAR A.O. No.
12, Series of 1989. Section 5 of E.O. 229 merely reiterates the procedure of acquisition in Section 16, R.A. 6657. In
other words, the E.O. is silent as to the procedure for the identification of the land, the notice of coverage and the
preliminary conference with the landowner, representatives of the BARC, the LBP and farmer beneficiaries. Does this
mean that these requirements may be dispensed with regard to VOS filed before June 15, 1988? The answer is no.
First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner and beneficiaries of the
land subject to agrarian reform be identified before the notice of acquisition should be issued. 74 Hacienda Caylaway
was voluntarily offered for sale in 1989. The Hacienda has a total area of 867.4571 hectares and is covered by four (4)
titles. In two separate Resolutions both dated January 12, 1989, respondent DAR, through the Regional Director,
formally accepted the VOS over the two of these four
titles. 75 The land covered by two titles has an area of 855.5257 hectares, but only 648.8544 hectares thereof fell within
76
the coverage of R.A. 6657. Petitioner claims it does not know where these portions are located.
Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles were conducted in 1989,
and that petitioner, as landowner, was not denied participation therein, The results of the survey and the land valuation
summary report, however, do not indicate whether notices to attend the same were actually sent to and received by
petitioner or its duly authorized representative. 77 To reiterate, Executive Order No. 229 does not lay down the operating
procedure, much less the notice requirements, before the VOS is accepted by respondent DAR. Notice to the
landowner, however, cannot be dispensed with. It is part of administrative due process and is an essential requisite to
enable the landowner himself to exercise, at the very least, his right of retention guaranteed under the CARL.
III. The Conversion of the three Haciendas.
It is petitioner's claim that the three haciendas are not subject to agrarian reform because they have been declared for
tourism, not agricultural
purposes. 78 In 1975, then President Marcos issued Proclamation No. 1520 declaring the municipality of Nasugbu,
Batangas a tourist zone. Lands in Nasugbu, including the subject haciendas, were allegedly reclassified as non-
agricultural 13 years before the effectivity of R. A. No. 6657. 79 In 1993, the Regional Director for Region IV of the
Department of Agriculture certified that the haciendas are not feasible and sound for agricultural development. 80 On
March 20, 1992, pursuant to Proclamation No. 1520, the Sangguniang Bayan of Nasugbu, Batangas adopted
Resolution No. 19 reclassifying certain areas of Nasugbu as non-agricultural. 81 This Resolution approved Municipal
Ordinance No. 19, Series of 1992, the Revised Zoning Ordinance of Nasugbu 82 which zoning ordinance was based on
a Land Use Plan for Planning Areas for New Development allegedly prepared by the University of the
Philippines. 83 Resolution No. 19 of the Sangguniang Bayan was approved by the Sangguniang Panlalawigan of
Batangas on March 8, 1993. 84
Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in 1991 when it approved conversion
of 1,827 hectares in Nasugbu into a tourist area known as the Batulao Resort Complex, and 13.52 hectares in Barangay
Caylaway as within the potential tourist belt. 85 Petitioner present evidence before us that these areas are adjacent to
the haciendas subject of this petition, hence, the haciendas should likewise be converted. Petitioner urges this Court to
take cognizance of the conversion proceedings and rule accordingly. 6
We do not agree. Respondent DAR's failure to observe due process in the acquisition of petitioner's landholdings does
not ipso facto give this Court the power to adjudicate over petitioner's application for conversion of its haciendas from
agricultural to non-agricultural. The agency charged with the mandate of approving or disapproving applications for
conversion is the DAR.
At the time petitioner filed its application for conversion, the Rules of Procedure governing the processing and approval
of applications for land use conversion was the DAR A.O. No. 2, Series of 1990. Under this A.O., the application for
conversion is filed with the MARO where the property is located. The MARO reviews the application and its supporting
documents and conducts field investigation and ocular inspection of the property. The findings of the MARO are subject
to review and evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO may conduct further field
investigation and submit a supplemental report together with his recommendation to the Regional Agrarian Reform
Officer (RARO) who shall review the same. For lands less than five hectares, the RARO shall approve or disapprove
applications for conversion. For lands exceeding five hectares, the RARO shall evaluate the PARO Report and forward
the records and his report to the Undersecretary for Legal Affairs. Applications over areas exceeding fifty hectares are
approved or disapproved by the Secretary of Agrarian Reform.
The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and Section 5 (l) of Executive
Order No. 129-A, Series of 1987 and reiterated in the CARL and Memorandum Circular No. 54, Series of 1993 of the
Office of the President. The DAR's jurisdiction over applications for conversion is provided as follows:
A. The Department of Agrarian Reform (DAR) is mandated to "approve or disapprove applications for conversion,
restructuring or readjustment of agricultural lands into non-agricultural uses," pursuant to Section 4 (j) of Executive
Order No. 129-A, Series of 1987.
B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve or disapprove applications
for conversion of agricultural lands for residential, commercial, industrial and other land uses.
C. Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, likewise empowers
the DAR to authorize under certain conditions, the conversion of agricultural lands.
D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President, provides that "action on
applications for land use conversion on individual landholdings shall remain as the responsibility of the DAR, which
shall utilize as its primary reference, documents on the comprehensive land use plans and accompanying ordinances
passed upon and approved by the local government units concerned, together with the National Land Use Policy,
pursuant to R.A. No. 6657 and E.O. No. 129-A. 87
Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled "Revised Rules and
Regulations Governing Conversion of Private Agricultural Lands and Non-Agricultural Uses," and DAR A.O. No. 2,
Series of 1990 entitled "Rules of Procedure Governing the Processing and Approval of Applications for Land Use
Conversion." These A.O.'s and other implementing guidelines, including Presidential issuances and national policies
related to land use conversion have been consolidated in DAR A.O. No. 07, Series of 1997. Under this recent issuance,
the guiding principle in land use conversion is:
to preserve prime agricultural lands for food production while, at the same time, recognizing the need of the other
sectors of society (housing, industry and commerce) for land, when coinciding with the objectives of the Comprehensive
Agrarian Reform Law to promote social justice, industrialization and the optimum use of land as a national resource for
public welfare. 88
"Land Use" refers to the manner of utilization of land, including its allocation, development and management. "Land
Use Conversion" refers to the act or process of changing the current use of a piece of agricultural land into some other
use as approved by the DAR. 89 The conversion of agricultural land to uses other than agricultural requires field
investigation and conferences with the occupants of the land. They involve factual findings and highly technical matters
within the special training and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with specificity how the
DAR must go about its task. This time, the field investigation is not conducted by the MARO but by a special task force,
known as the Center for Land Use Policy Planning and Implementation (CLUPPI-DAR Central Office). The procedure
is that once an application for conversion is filed, the CLUPPI prepares the Notice of Posting. The MARO only posts
the notice and thereafter issues a certificate to the fact of posting. The CLUPPI conducts the field investigation and
dialogues with the applicants and the farmer beneficiaries to ascertain the information necessary for the processing of
the application. The Chairman of the CLUPPI deliberates on the merits of the investigation report and recommends the
appropriate action. This recommendation is transmitted to the Regional Director, thru the Undersecretary, or Secretary
of Agrarian Reform. Applications involving more than fifty hectares are approved or disapproved by the Secretary. The
procedure does not end with the Secretary, however. The Order provides that the decision of the Secretary may be
appealed to the Office of the President or the Court of Appeals, as the case may be, viz:
Appeal from the decision of the Undersecretary shall be made to the Secretary, and from the Secretary to the Office of
the President or the Court of Appeals as the case may be. The mode of appeal/motion for reconsideration, and the
appeal fee, from Undersecretary to the Office of the Secretary shall be the same as that of the Regional Director to the
Office of the Secretary. 90
Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to resolve a
controversy the jurisdiction over which is initially lodged with an administrative body of special
competence. 91Respondent DAR is in a better position to resolve petitioner's application for conversion, being primarily
the agency possessing the necessary expertise on the matter. The power to determine whether Haciendas Palico,
Banilad and Caylaway are non-agricultural, hence, exempt from the coverage of the CARL lies with the DAR, not with
this Court.
Finally, we stress that the failure of respondent DAR to comply with the requisites of due process in the acquisition
proceedings does not give this Court the power to nullify the CLOA's already issued to the farmer beneficiaries. To
assume the power is to short-circuit the administrative process, which has yet to run its regular course. Respondent
DAR must be given the chance to correct its procedural lapses in the acquisition proceedings. In Hacienda Palico alone,
CLOA's were issued to 177 farmer beneficiaries in 1993. 92 Since then until the present, these farmers have been
cultivating their lands. 93 It goes against the basic precepts of justice, fairness and equity to deprive these people,
through no fault of their own, of the land they till. Anyhow, the farmer beneficiaries hold the property in trust for the
rightful owner of the land.
IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the three haciendas are
nullified for respondent DAR's failure to observe due process therein. In accordance with the guidelines set forth in this
decision and the applicable administrative procedure, the case is hereby remanded to respondent DAR for proper
acquisition proceedings and determination of petitioner's application for conversion.
SO ORDERED.
 Jurisdiction over cancellation of EPs and CLOAs
G.R. No.177374 July 2, 2014
MARIANO JOSE, FELICISIMO JOSE, deceased, substituted by his children MARIANO JOSE, CAMILO JOSE,
TIBURCIA JOSE, FERMINA JOSE, and VICTORIA JOSE, Petitioners,
vs.
ERNESTO M. NOVIDA, RODOLFO PALA YLA Y, JR., ALEX M. BELARMINO, RODRIGO LIBED, LEONARDO L.
LIBED, BERNARDO B. BELARMINO, BENJAMIN G. ACOSTA, MODESTO A. ORLANDA, W ARLITO B. MEJIA,
MAMERTO B. BELARMINO, MARCELO 0. DELFIN and HEIRS OF LUCINO A. ESTEBAN, represented by
CRESENCIA M. VDA. DE ESTEBAN, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the September 25, 2006 Decision2 and March 16, 2007 Resolution3 of
the Court of Appeals (CA) in CAG.R. SP No. 48681, which affirmed the June 20, 1997 Decision4 and June 24, 1998
Resolution5 of the Department of Agrarian Reform Adjudication Board (DARAB), Quezon City in DARAB Case No.
1429.
Factual Antecedents
In 1990, herein respondents Ernesto M. Novida, Rodolfo Palaylay, Jr., Alex M. Belarmino, Rodrigo Libed, Leonardo L.
Libed, Bernardo B. Belarmino, Benjamin G. Acosta, Modesto A. Orlanda, Warlito B. Mejia, Mamerto B. Belarmino and
Marcelo O. Delfin, together with Cristina M. Esteban, were each granted – as farmer-beneficiaries – Emancipation
Patents (EPs) and Certificates of Title 6 (covering one hectare each) over a parcel of land which formed part of a
16.4142-hectare agricultural land (subject property) in San Vicente, Alcala, Pangasinan which was placed within the
coverage of Operation Land Transfer.7
On January 4, 1991, petitioners Mariano, Camilo, Victoria, Tiburcia and Fermina, as well as Josefina and Anecita – all
surnamed Jose – filed with the Region I Office of the Department of Agrarian Reform (DAR) at San Fernando, La Union
(DAR Region I) a Petition for Reinvestigation and Cancellation of Anomalously Prepared and Generated Emancipation
Patents8 against the respondents, claiming that they are the bona fide and actual tenant-tillers of the subject property;
that they were issued Certificates of Land Transfer (CLTs) to the same; that they are actually in possession of the same;
and that the EPs issued to respondents were anomalous. They prayed that the respondents’ EPs be cancelled; that
new EPs be issued to them; and that an investigation be conducted on the circumstances surrounding the issuance of
respondents’ EPs, and the guilty parties prosecuted.
On January 30, 1991, the DAR Region I Director issued an Order9 relative to the petitioners’ petition for reinvestigation
and cancellation of EPs – which was not docketed or assigned a case number – which held thus:
WHEREFORE, premises considered and by virtue of the powers vested in me under DAR Memorandum Circular 5-87
ORDER is hereby rendered as follows:
1. That herein petitioners have better right as beneficiaries of the 16 hectares in question to the exclusion of the
respondents due to the defective installation as beneficiaries;
2. That Emancipation Patents be generated in favor of the herein petitioners;
3. That [inasmuch] as payments on the land in question were already made by the respondents who are not qualified
to become beneficiaries of the estate, the complainants are hereby ordered to pay the said amount to the Administrator
who shall likewise reimburse the same to the respondents, as suggested by MARO Constancio Castillo to settle the
problem at bar; and
4. That the PARO of Pangasinan or his duly authorized representative is directed to implement this ORDER and if
necessary with the help of the PNP of the Municipality of Alcala, Pangasinan.
SO ORDERED.10
On December 17, 1991, respondents filed a Complaint11 for recovery of possession, accounting, liquidation and
damages with injunctive relief against petitioners Mariano and Felicisimo Jose (Felicisimo), and Virgilio Jose (Virgilio).
The case was docketed in the Region I Office of the DARAB in Urdaneta, Pangasinan (DARAB Urdaneta) as Case No.
01-465-EP’91.12 Respondents alleged that Felicisimo was the original tenant of the subject property; that Felicisimo
obtained loans from one Benigno Siobal (Siobal) and one Rogelio Cerezo (Cerezo), which were secured by a mortgage
over the subject property; that Felicisimo did not redeem the subject property from Siobal and Cerezo, but instead
abandoned the same when he migrated to the United States of America (U.S.A.) and became a naturalized citizen
thereof; that with the sanction of the DAR, the owners of the subject property subdivided the land and sold portions
thereof to respondents; and that on or about May 10, 1990, after Felicisimo returned from the U.S.A., he and the other
petitioners ousted respondents from the subject property, using force, stealth, threats and intimidation. Respondents
prayed that they be placed in peaceful possession, cultivation and enjoyment of the land; that petitioners be declared
as usurpers and without right to the land; that an accounting be made of all lost harvests; that injunctive relief be granted
in order that petitioners shall desist from further disturbing respondents’ peaceful possession, cultivation and enjoyment
of the land; that petitioners be made to pay actual, moral and exemplary damages in the amount of at least ₱180,000.00,
₱25,000.00 litigation expenses, ₱50,000.00 attorney’s fees, and costs of suit.
In their Answer with Counterclaim,13 petitioners alleged that in addition to Felicisimo, Mariano, and Virgilio, the subject
property was being cultivated by their siblings Tiburcia, Fermina, Victoria, and Josefina, and their mother Aniceta Jose;
that Felicisimo indeed mortgaged the subject property in 1981 to secure a loan of ₱10,000.00, which was settled by
letting the lender Siobal take exclusive possession of the land, cultivating the same and keeping the harvests; that
Siobal cultivated the subject property up to 1987, after which petitioners Camilo, Virgilio, Mariano, and the other siblings
took over; that when Felicisimo returned from the U.S.A. in 1990, Siobal attempted to negotiate another agreement with
him, but this time he refused; that petitioners – and not the respondents – are the owner beneficiaries of the subject
property; that respondents have never been in possession of the land; and that the case should be dismissed. By way
of counterclaim, petitioners sought to be awarded ₱100,000.00 actual damages, ₱20,000.00 exemplary damages,
₱15,000.00 attorney’s fees, and ₱20,000.00 litigation expenses.
On July 13, 1992, the DARAB Urdaneta issued a Decision14 in Case No. 01-465-EP’91, which held thus:
The evidence on record revealed that respondent Felicisimo E. Jose was the former tenant-lessee of the 16.4142
hectares in question; that on August 13, 1981, respondent Felicisimo E. Jose and his wife Anecita Bautista mortgaged
to Benigno Siobal x x x one-half (1/2) of their real estate with an area of 82,579 square meters in the amount of Ten
Thousand (₱10,000.00) Pesos; that immediately after the execution of the mortgage contract, respondent Felicisimo
Jose, who was then the tenant over the same parcel of land of approximately eight (8) hectares more or less delivered
actual physical possession to Benigno Siobal and the other half portion or eight (8) hectares plus to one Rogelio Cerezo;
that the landholding in question was formerly owned by the Galvan-Cabrera Estate which was covered by Operation
Land Transfer (OLT) pursuant to the provisions of P.D. No. 27; that Emancipation Patents were already issued to the
complainants.
The evidence on record clearly disclosed that the former tenant-lessee, the respondent Felicisimo Jose delivered actual
physical possession of the landholding in question on August 13, 1981. From that date he lost his security of tenure as
tenant and that his tenancy relationship was terminated.
The act of Felicisimo E. Jose in giving up his possession and cultivation of the landholding in question and his going
abroad in 1981 is a clear case of abandonment, as enunciated in the case of "Mateo Balanay, et al., vs. Sergio Rafael,
CA G.R. No. SP-01746 CAR, August 2, 1976". Acceptance of new employment is an abandonment, how much more
[in] this instant case when the tenant-lessee went abroad.
WHEREFORE, premises considered, judgment is hereby rendered as follows to wit:
1. DECLARING the complainants the tenant-beneficiaries of the land in question;
2. DECLARING the respondents [to have] no right whatsoever [to] the landholding in question;
3. ORDERING the respondents to desist from disturbing the possession and cultivation of the complainants.
4. All other claims of the parties are hereby denied for lack of evidence.
SO ORDERED.15
Meanwhile, on August 22,1995, the DAR Secretary issued an Order16 affirming the January 30, 1991 Order of the DAR
Region I Director in the petition for reinvestigation and cancellation of EPs filed by petitioners against the respondents.
The Order reads in part:
The issue to be resolved is who are the qualified beneficiaries over the subject landholdings.
Mariano Jose, et al. (petitioners) are the qualified beneficiaries of the subject landholdings considering that CLT’s were
already issued to them which is a recognition to the grantees as the [parties] qualified to avail of the statutory mechanism
for the acquisition of ownership of the land tilled by them as provided under Presidential Decree No. 27. Moreover, the
Agreement entered into by Felicisimo Jose and Benigno Siobal wherein the subject landholdings were used to answer
the amount loaned by their father is considered as illegal transaction therefore null and void (Memo Circular No. 7,
Series of 1979).
As to the allegation of denial of due process, we find the same unmeritorious. Respondents’ subsequent Motion for
Reconsideration has the effect of curing whatever irregularity might have been committed in the proceeding below x x
x.
WHEREFORE, premises considered, this Order is hereby issued denying the instant appeal for lack of merit and the
Order issued by the Regional Director is hereby affirmed.
SO ORDERED.17
However, on respondents’ motion for reconsideration, the DAR Secretary issued another Order18 on June 5, 1996 which
declared thus:
It appears that DARAB Case No. 01-465-EP’92 entitled Ernesto M. Novida, et al., vs. Mariano Jose, et al., for Peaceful
Possession and Damages involving the same parties and same cause of action as in the case herein is pending appeal
before the DARAB Central Office.
Likewise, records show that Emancipation Patents Nos. 550853, 550854, 550855, 550849, 550851, 550848, 550852
and 550856 were already awarded to Respondents herein. The jurisdiction to cancel the same is not with this Office
but with the DARAB x x x.
WHEREFORE, premises considered, Order is hereby issued remanding the case to the DAR Adjudication Board for its
proper disposition in the light of DARAB Case No. 01-465-EP’92 pending before it.
SO ORDERED.19
The DARAB Quezon City Decision
Meanwhile, failing to obtain a reconsideration of the DARAB Urdaneta’s July 13, 1992 decision in Case No. 01-465-
EP’91, petitioners interposed an appeal with the DARAB Quezon City. Docketed as DARAB Case No. 1429, the appeal
was premised on the arguments that the DARAB Urdaneta erred in taking cognizance of the case, which is under the
exclusive jurisdiction of the Secretary of Agrarian Reform as the subject property was covered by the Comprehensive
Agrarian Reform Program (CARP); and that there is another case between the parties – for cancellation of anomalously
prepared/generated Emancipation Patents – pending in the Office of the DAR Secretary.
On June 20, 1997, the DARAB Quezon City issued its Decision affirming in toto the July 13, 1992 decision of the DARAB
Urdaneta. It held –
Based on the facts of the case and evidences adduced, Felicisimo Jose was the former legitimate agricultural lessee
of the Galvan-Cabrera estate. However, on August 13, 1981, he and his spouse mortgaged one-half of the said property
with an area of 82,579 square metersto secure a loan of ₱10,000 from a certain Benigno Siobal and Rogelio Orezo20 by
delivering the physical possession thereof to the mortgagees. Subsequently, respondent-appellant (Felicisimo Jose)
left for abroad to acquire his citizenship by naturalization in the United States of America.
Sometime in 1985, the subject landholding was subdivided into sixteen (16) farm lots and the complainants-
appellees21 were installed by the mortgagee Benigno Siobal. Their possession and cultivation were duly sanctioned by
the landowner and DAR Team Leader of Alcala, Pangasinan. They paid the rentals and later on the amortization
payments to the subject landholding.
On January 6, 1991, their peaceful enjoyment and cultivation of their respective landholdings was interrupted upon the
unlawful dispossession, through force and intimidation by the defendants-appellants,22 who forcibly took over by
destroying the corn plants by hiring two (2) tractor operators despite the issuance of the tenant-farmers’ Emancipation
Patents. Complainants-appellees were compelled to file a criminal case of malicious mischief x x x in addition to this
instant agrarian case.
xxxx
We are not convinced by the arguments of the respondents-appellants.
There is an overwhelming evidence indicating that Felicisimo Jose caused the execution of a Deed of Mortgage, for
and in consideration of Ten Thousand (₱10,000) Pesos, using the subject landholding as security to the loan and
transferring the physical possession thereof to the mortgagees as per Document No. 254, Page 52, Book No. XVII
series of 1981 as duly notarized by Porferio A. Tadeo x x x. In the interim, Felicisimo Jose left for the United States of
America. Sometime in 1985, the mortgagees, as legal possessors, allowed the installation of the complainants-
appellees with the consent of the Administrator of the Galvan-Cabrera estate to be tenant-tillers who peacefully, openly
and continuously occupied and cultivated the land as lessees to their respective landholdings. Finally, on December 7,
1990, all the sixteen (16) complainants appellees received their Emancipation Patents thru Secretary Benjamin C.
Leong, Department of Agrarian Reform x x x.
When Felicisimo Jose left to pursue his desire to acquire his naturalization of citizenship in the United States which
amounted to a circumstance advantageous to him and his family, in effect, there was literally an implied extinguishment
and/or voluntary termination of the agricultural tenancy relation on the part of the respondent-appellant as contemplated
in Section 8 (2) in relation to Section 28 (5) of RA 3844.23 Both the elements of physical relinquishment of possession
and intention to vacate were consummated and remained undisputed findings of facts of the case.
If ever DAR Regional Director, Region I issued an Order dated January 30, 1991, to the effect that the respondents-
appellants have a better right as beneficiaries over the subject landholding, this said official issuance of a lesser officer
in the bureaucratic totempole could not overrule nor nullify the acts performed earlier by the head of agency or the
Secretary of the Department of Agrarian Reform unless the cancellation/revocation is initiated by the Secretary himself.
For the Emancipation Patents dated December 7, 1990 were issued earlier to the farmer-beneficiaries. And with the
same token, that the enactment of our agrarian reform laws is principally intended to make the small farmers more
independent, self-reliant and responsible citizens and a source of a genuine strength in our democratic society x x x.
Clearly, those who renounce their citizenship should yield to those rights and privileges intended for those with undivided
loyalty and unquestioned nationalism to the Filipino nation.
WHEREFORE, premises considered, the challenged decision is hereby AFFIRMED in toto.
Let the entire records of this case be remanded to the Adjudicator a quo for the issuance of a Writ of Execution
immediately.
SO ORDERED.24
Petitioners filed a Motion for Reconsideration,25 but the DARAB Quezon City denied the same via its June 24, 1998
Resolution.
The Assailed Court of Appeals Decision
Petitioners went up to the CA via Petition for Review26 insisting that the DAR Secretary has exclusive jurisdiction over
the case, pursuant to the Revised (1989) DARAB Rules of Procedure which state that matters involving the
administrative implementation of the CARP and other agrarian laws and regulations shall be the exclusive prerogative
of and cognizable by the DAR
Secretary;27 that in the January 30, 1991 Order of the DAR Region I Director which was affirmed via the DAR Secretary’s
August 22, 1995 Order, they were declared to have better rights as beneficiaries and that respondents’ EPs should be
cancelled; and that respondents previously instituted two cases with the DARAB Urdaneta – one of them docketed as
Case No. 01-318-EP’90 – which were dismissed.
On September 25, 2006, the CA issued the assailed Decision, decreeing as follows:
WHEREFORE, the challenged DARAB decision and resolution dated June 20, 1997 and June 24, 1998 respectively,
in DARAB CASE NO. 1429 are hereby AFFIRMED.
SO ORDERED.28
The CA held that under Section 1,Rule II of the 1994 DARAB Rules of Procedure, 29 the DARAB has primary and
exclusive original jurisdiction over cases involving the issuance and cancellation of EPs;30 the DAR Secretary had no
power to cancel EPs, and petitioners’ argument that such power is part of his administrative functions is misplaced. It
noted further that the DAR Secretary himself recognized the DARAB’s jurisdiction over cases involving the cancellation
of EPs when he issued his June 5, 1996 Order in the undocketed case for reinvestigation and cancellation of EPs filed
by petitioners against the respondents.31
The CA further upheld the DARAB’s conclusion that petitioners in effect abandoned their rights as beneficiaries, and
that respondents’ installation as beneficiaries by the mortgagees (Siobal and Cerezo) was regular and in accordance
with law, and they paid the required amortizations as well. It held that as landless farmers, respondents deserved the
land more than petitioners, noting that one of them was a naturalized American citizen; it would thus go against the
rationale of the agrarian laws to award land to such an individual.
Petitioners filed a Motion for Reconsideration,32 but in its assailed March 16, 2007 Resolution, the CA stood its ground.
Thus, the instant Petition.
Meanwhile, a substitution of parties was accordingly made in view of the death of some of the parties.33
Issues
Petitioners submit the following assignment of errors:
I.
THE COURT OF APPEALS, WITH DUE RESPECT, ERRED IN NOT SUSTAINING THE ORDER DATED JANUARY
30, 1991 ISSUED BY THE REGIONAL DIRECTOR, REGION I, BUREAU OF AGRARIAN LEGAL ASSISTANCE
(BALA), DEPARTMENTOF AGRARIAN REFORM (DAR), SAN FERNANDO, LA UNION X X X,ORDER DATED 22
AUGUST 1995, ISSUED BY DAR SECRETARY, AFFIRMING SAID ORDER DATED JANUARY 30, 1991 X X X AND
IN NOT REVERSING AND SETTING ASIDE THE ORDER DATED 05 JUNE 1996 X X X ISSUED BY THE DAR
SECRETARY IN THE SAME CASE THERE BEING NO PENDING CASE INVOLVING THE SAME ISSUES WITH THE
X X X (DARAB) AND HENCE THE DAR SECRETARY HAS JURISDICTION OVER THE LAND IN QUESTION TO THE
EXCLUSION OF THE DARAB, QUEZON CITY.
II.
THE COURT OF APPEALS, WITH DUE RESPECT, ERRED IN NOT REVERSING AND SETTING ASIDE THE DARAB
DECISION DATED 20 JUNE 1997 X X X AND DARAB UNDATED RESOLUTION, DENYING PETITIONERS’ MOTION
FOR RECONSIDERATION OF THE CA DECISION X X X, ONTHE GROUNDS THAT THE INSTANT CASE WAS
BARRED BY PRIOR JUDGMENT AND THAT THE RESPONDENTS FAILED TO PROVE THAT THEYARE
AGRICULTURAL TENANTS OVER THE LAND IN QUESTION.
III.
THE COURT OF APPEALS, WITH DUE RESPECT, ERRED IN ITS RESOLUTION DATEDSEPTEMBER 5, 2005,
EXPUNGING THE MEMORANDUM FOR PETITIONERS DATED17 APRIL 2001 FILED VIA REGISTERED MAIL ON
18 APRIL 2001 FOR LATE FILING.34
Petitioners’ Arguments
In their Petition and Reply,35 petitioners reiterate the January 30, 1991 Order of the DAR Region I Director which the
DAR Secretary affirmed through his August 22, 1995 Order, particularly citing the pronouncement in said Orders that
they are the actual tillers of the subject property, and not respondents. They add that respondents failed to prove in
Case No. 01-465-EP’91 that they are tenants of the land; that respondents have never cultivated the subject property,
and have never been in possession of the same; that respondents are mere landgrabbers; that Felicisimo has settled
his financial obligations to Siobal; that respondents’ EPs have been cancelled by the DAR Region I Director and the
DAR Secretary; and that it was erroneous and unjust for the CA to have expunged their Memorandum.
Petitioners essentially prayfor the reversal of the assailed dispositions, as well as the reinstatement of both the January
30, 1991 Order of the DAR Region I Director and the August 22,1995 Order of the DAR Secretary in their petition for
reinvestigation and cancellation of EPs filed with the DAR Region I.Finally, petitioners pray that the DAR Region I
Director and the DAR Secretary be ordered to issue EPs in their favor.
Respondents’ Arguments
In their Comment,36 respondents point out that a review under Rule 45 of the 1997 Rules of Civil Procedure is
discretionary and will be granted only when there are special and important reasons therefor; that such special and
important circumstances that should warrant review do not obtain in petitioners’ case; that the CA is correct in stating
that the DARAB has primary and exclusive jurisdiction over cases involving the issuance and cancellation of EPs; and
finally, that based on the merits and consonant with the substance and intent of the agrarian laws, respondents – and
not petitioners – are entitled to the subject property.
Our Ruling
The Court affirms.
When petitioners filed, on January 4, 1991, their Petition for Reinvestigation and Cancellation of Anomalously Prepared
and Generated Emancipation Patents with the DAR Region I Office at San Fernando, La Union, certificates of title have
been issued to the respondents. Thus, the DARAB – and not the DAR Region I or the DAR Secretary – had exclusive
jurisdiction over the case, pursuant to law and the 1994 DARAB Rules of Procedure.
x x x. The DARAB derives its jurisdiction from RA 6657 or popularly known as the Comprehensive Agrarian Reform
Law (CARL) of 1988.
Section 50 of RA 6657 confers jurisdiction on the DARAB over agrarian reform cases or controversies as follows:
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. Towards 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.
To implement this particular provision of RA 6657 regarding the adjudication of agrarian reform matters, the DAR
adopted the DARAB New Rules of Procedure, issued on May 30, 1994. Under Section 1, Rule II of the said Rules of
Procedure, the DARAB has exclusive original jurisdiction over the following cases:
(a) The rights and obligations of persons, whether natural or juridical, engaged in the management, cultivation and use
of all agricultural lands covered by the CARP and other agrarian laws;
(b) The valuation of land, and the preliminary determination and payment of just compensation, fixing and collection of
lease rentals, disturbance compensation, amortization payments, and similar disputes concerning the functions of the
Land Bank of the Philippines (LBP);
xxxx
(f) Those involving the issuance, correction and cancellation of Certificates of Land Ownership Award (CLOAs) and
Emancipation Patents (EPs) which are registered with the Land Registration Authority;
(g) Those cases previously falling under the original and exclusive jurisdiction of the defunct Court of Agrarian Relations
under Section 12 of Presidential Decree No. 946, except subparagraph (Q) thereof and Presidential Decree No. 815.
xxxx
Matters involving strictly the administrative implementation of Republic Act. No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as enunciated by pertinent rules shall
be the exclusive prerogative of and cognizable by the Secretary of the DAR.
(h) And such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the DAR.
Subparagraph (f) stated above provides that the DARAB has exclusive jurisdiction over cases involving the issuance,
[correction and cancellation of CLOAs and EPs which are] registered with the Land Registration Authority (the Registry
of Deeds).
The grounds for cancellation of registered EPs were summarized by DAR Memorandum Order No. 02, Series of 1994,
to wit:
1. Misuse or diversion of financial and support services extended to the ARB; (Section 37 of R.A. No. 6657)
2. Misuse of land; (Section 22 of R.A. No. 6657)
3. Material misrepresentation of the ARB’s basic qualifications as provided under Section 22 of R.A. No. 6657, P.D. No.
27, and other agrarian laws;
4. Illegal conversion by the ARB; (Cf. Section 73, Paragraph C and E of R.A. No. 6657)
5. Sale, transfer, lease or other forms of conveyance by a beneficiary of the right to use or any other usufructuary right
over the land acquired by virtue of being a beneficiary in order to circumvent the provisions of Section 73 of R.A. No.
6657, P.D. No. 27, and other agrarian laws. However, if the land has been acquired under P.D. No. 27/E.O. No. 228,
ownership may be transferred after full payment of amortization by the beneficiary; (Sec. 6 of E.O. No. 228)
6. Default in the obligation to pay an aggregate of three (3) consecutive amortizations in case of voluntary land
transfer/direct payment scheme, except in cases of fortuitous events and force majeure;
7. Failure of the ARBs to pay for at least three (3) annual amortizations to the LBP, except in cases of fortuitous events
and force majeure; (Section 26 of RA 6657)
8. Neglect or abandonment of the awarded land continuously for a period of two (2) calendar years as determined by
the Secretary or his authorized representative; (Section 22 of RA 6657)
9. The land is found to be exempt/excluded from P.D. No. 27/E.O. No. 228 or CARP coverage or to be part of the
landowner’s retained area as determined by the Secretary or his authorized representative; and
10. Other grounds that will circumvent laws related to the implementation of agrarian reform.
A study of the above-enumerated grounds for the cancellation of registered EPs shows that it requires the exercise by
the DAR of its quasi-judicial power through its adjudicating arm, DARAB. Thus, rightly so, the DARAB New Rules of
Procedure provide that DARAB has exclusive jurisdiction over cases involving the cancellation of registered EPs.
But what about EPs that are unregistered like the one issued to Angelina Rodriguez?
The answer can be found in Administrative Order No. 06-00, issued on August 30, 2000, which provides for the Rules
of Procedure for Agrarian Law Implementation (ALI) Cases. These rules were issued pursuant to Sections 49 and 50
of RA 6657. In contrast to the DARAB Rules of Procedure which govern the exercise of DAR’s quasi-judicial function,
Administrative Order No. 06-00 govern the administrative function of the DAR.
Under the said Rules of Procedure for Agrarian Law Implementation (ALI) Cases, the Agrarian Reform Secretary has
exclusive jurisdiction over the issuance, recall or cancellation of EPs/CLOAs that are not yet registered with the Register
of Deeds. Thus, Section 2 of the said Rules provides:
SECTION 2. Cases Covered. - These Rules shall govern cases falling within the exclusive jurisdiction of the DAR
Secretary which shall include the following:
(a) Classification and identification of landholdings for coverage under the Comprehensive Agrarian Reform Program
(CARP), including protests or oppositions thereto and petitions for lifting of coverage;
(b) Identification, qualification or disqualification of potential farmer-beneficiaries;
(c) Subdivision surveys of lands under CARP;
(d) Issuance, recall or cancellation of Certificates of Land Transfer (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 registeredwith the Register of
Deeds;
(e) Exercise of the right of retention by landowner;
xxxx
(q) Such other matters not mentioned above but strictly involving the administrative implementation of RA 6657 and
other agrarian laws, rules and regulations as determined by the Secretary."
Clearly, the cancellation of EPs that are not yet registered with the Register of Deeds falls within the authority of the
Agrarian Reform Secretary or DAR officials duly designated by him, in the exercise of his/their administrative functions.
xxx
xxxx
Second, even if the Court of Appeals ruling were based on the old DARAB rules (the 1989 DARAB Revised Rules of
Procedure) which provided that the DARAB had primary jurisdiction over "cases involving the issuance of Certificate of
Land Transfer (CLT), Certificate of Land Ownership Award (CLOA) and Emancipation Patent (EP) and the
administrative correction thereof", we do not agree that the cancellation by the DARAB of the subject EPs fell within the
ambit of mere administrative correction. "Administrative correction" refers only to the rectification of wrong or insufficient
information in the patent and not to something as substantial as the actual cancellation thereof. The meaning of
"administrative correction" is provided in DAR Administrative Order No. 02, Series of 1994:
C. The administrative corrections may include non-identification of spouse, corrections of civil status, corrections of
technical descriptions and other matters related to agrarian reform.37
The above pronouncement was reiterated in this ponente’s ruling in Heirs of Lazaro Gallardo v. Soliman:38 "the DARAB
has exclusive jurisdiction over cases involving the cancellation of registered EPs[;] the DAR Secretary, on the other
hand, has exclusive jurisdiction over the issuance, recall or cancellation of [EPs] or Certificates of Land Ownership
Awards that are not yet registered with the Register of Deeds."
Thus, since certificates of title have been issued in the respective names of the respondents as early as in 1990, 39the
DAR Region I Director had no jurisdiction to cancel their titles; the same is true with respect to the DAR Secretary.
Thus, their respective January 30, 1991 and August 22, 1995 Orders are null and void; consequently, respondents’ EPs
and titles subsist, contrary to petitioners’ claim that they have been cancelled. Void judgments or orders have no legal
and binding effect, force, or efficacy for any purpose; in contemplation of law, they are non-existent.40
For the above reasons, it necessarily follows that what petitioners pray for in the instant Petition – i.e. the 1)
reinstatement of the January 30, 1991 Order of the DAR Region I Director and the August 22, 1995 Order of the DAR
Secretary – which have been voided herein, and 2) issuance of EPs in their favor – are reliefs that this Court may not
grant.
Next, as correctly pointed out by the respondents, a review of the instant petition under Rule 45 is not a matter of right
but of sound judicial discretion, and will be granted only when there are special and important reasons
therefor.41 Moreover, a petition for review under Rule 45 covers questions of law only.42 "[T]he jurisdiction of the
Supreme Court in cases brought before it from the CA via Rule 45 of the 1997 Rules of Civil Procedure is generally
limited to reviewing errors of law. This Court is not a trier off acts. In the exercise of its power of review, the findings of
fact of the CA are conclusive and binding and consequently, it is not our :function to analyze or weigh evidence all over
again."43
This Court finds that no special and important reasons exist to warrant a thorough review of the assailed CA
Decision.1âwphi1 Quite the contrary, the Court is satisfied with and can simply rely on the findings of the DARAB
Urdaneta, DARAB Quezon City, and the CA - as well as the very admissions of the petitioners themselves - to the effect
that respondents fulfilled all the requirements under the agrarian laws in order to become entitled to their EPs; that F
elicisimo voluntarily surrendered and abandoned the subject property in favor of his creditors, who took over the land
and tilled the same until 1987; that Felicisimo migrated to the U.S.A. and became a naturalized American citizen; that
in 1991, respondents were illegally dispossessed of their landholdings through force and intimidation by the petitioners
after Felicisimo returned from abroad; and that as between petitioners and respondents, the latter are legally entitled to
the subject property. These identical findings are not only entitled to great respect, but even finality. For petitioners to
question these identical findings is to raise a question of fact.44
It must be said as well that "[ f]actual findings of administrative bodies charged with their specific field of expertise, are
afforded great weight by the courts, and in the absence of substantial showing that such findings were made from an
erroneous estimation of the evidence presented, they are conclusive, and in the interest of stability of the governmental
structure, should not be disturbed. "45
Finally, the Court finds it unnecessary to resolve the other issues raised by the parties, including petitioners' claim that
it was erroneous and unjust for the CA to have expunged their Memorandum.
WHEREFORE, the Petition is DENIED. The September 25, 2006 Decision and March 16, 2007 Resolution of the Court
of Appeals in CA-G.R. SP No. 48681 are AFFIRMED.
SO ORDERED.
SECTION 26. PAYMENT BY BENEFICIARIES. Sec. 3. Second Motion for Reconsideration. – The Court shall not entertain a second motion for reconsideration and
any exception to this rule can only be granted in the higher interest of justice by the Court en banc upon a vote of at
least two-thirds of its actual membership. There is reconsideration "in the higher interest of justice" when the assailed
 Payments by ARBs primarily based on a fixed percentage of AGP not on cost of land decision is not only legally erroneous, but is likewise patently unjust and potentially capable of causing unwarranted
and irremediable injury or damage to the parties. A second motion for reconsideration can only be entertained before
the ruling sought to be reconsidered becomes final by operation of law or by the Court’s declaration. [Emphases
supplied.]
G.R. No. 164195 April 5, 2011
Separately from these rules is Article VIII, Section 4 (2) of the 1987 Constitution which governs the decision-making by
APO FRUITS CORPORATION and HIJO PLANTATION, INC., Petitioners,
the Court en banc of any matter before it, including a motion for the reconsideration of a previous decision. This provision
vs.
states:
LAND BANK OF THE PHILIPPINES, Respondent.
Section 4.
RESOLUTION
xxxx
BRION, J.:
(2) All cases involving the constitutionality of a treaty, international or executive agreement, or law, which shall be heard
by the Supreme Court en banc, and all other cases which under the Rules of Court are required to be hearden banc,
We resolve Land Bank of the Philippines’ (LBP’s) 2nd Motion for Reconsideration of December 14, 2010 that
including those involving the constitutionality, application, or operation of presidential decrees, proclamations, orders,
addresses our Resolutions of October 12, 2010 and November 23, 2010. This motion prays as well for the holding of
instructions, ordinances, and other regulations, shall be decided with the concurrence of a majority of the Members who
oral arguments. We likewise resolve the Office of the Solicitor General’s (OSG) Motion for Leave to Intervene and to
actually took part in the deliberations on the issues in the case and voted thereon.
Admit Motion for Reconsideration-in-Intervention dated February 15, 2011 in behalf of the Republic of the Philippines
(Republic).
Thus, while the Constitution grants the Supreme Court the power to promulgate rules concerning the practice and
procedure in all courts1 (and allows the Court to regulate the consideration of 2nd motions for reconsideration, including
The Motion for Reconsideration
the vote that the Court shall require), these procedural rules must be consistent with the standards set by the
The LBP submits the following arguments in support of its 2nd motion for reconsideration:
Constitution itself. Among these constitutional standards is the above quoted Section 4 which applies to "all other cases
a) the test of "transcendental importance" does not apply to the present case;
which under the Rules of Court are required to be heard en banc," and does not make any distinction as to the type of
b) the standard of "transcendental importance" cannot justify the negation of the doctrine of immutability of a final
cases or rulings it applies to, i.e, whether these cases are originally filed with the Supreme Court, or cases on appeal,
judgment and the abrogation of a vested right in favor of the Government that respondent LBP represents;
or rulings on the merits of motions before the Court. Thus, rulings on the merits by the Court en banc on 2nd motions
c) the Honorable Court ignored the deliberations of the 1986 Constitutional Commission showing that just compensation
for reconsideration, if allowed by the Court to be entertained under its Internal Rules, must be decided with the
for expropriated agricultural property must be viewed in the context of social justice; and
concurrence of a majority of the Members who actually took part in the deliberations.
d) granting arguendo that the interest payment has factual and legal bases, only six (6%) percent interest per annum
may be validly imposed.
When the Court ruled on October 12, 2010 on the petitioners’ motion for reconsideration by a vote of 12 Members (8
We have more than amply addressed argument (d) above in our October 12, 2010 Resolution, and we see no point in
for the grant of the motion and 4 against), the Court ruled on the merits of the petitioners’ motion. This ruling complied
further discussing it. Without in any way detracting from the overriding effect of our main and primary ruling that the
in all respects with the Constitution requirement for the votes that should support a ruling of the Court.
present 2nd motion for reconsideration is a prohibited motion that the Court can no longer entertain, and if only to
Admittedly, the Court did not make any express prior ruling accepting or disallowing the petitioners’ motion as required
emphatically signal an unequivocal finis to this case, we examine for the last and final time the LBP’s other arguments.
by Section 3, Rule 15 of the Internal Rules. The Court, however, did not thereby contravene its own rule on 2nd motions
In the course of the Court’s deliberations, Mr. Justice Roberto A. Abad questioned the application of Section 3, Rule 15
for reconsideration; since 12 Members of the Court opted to entertain the motion by voting for and against it, the Court
of the Internal Rules of the Supreme Court to the present 2nd motion for reconsideration. He posited that instead of
simply did not register an express vote, but instead demonstrated its compliance with the rule through the participation
voting immediately on the present 2nd motion for reconsideration, the Court should instead first consider the validity of
by no less than 12 of its 15 Members.1avvphi1 Viewed in this light, the Court cannot even be claimed to have suspended
our October 12, 2010 Resolution; he claimed that this Resolution is null and void because the Court violated the above-
the effectiveness of its rule on 2nd motions for reconsideration; it simply complied with this rule in a form other than by
cited provision of the Internal Rules when it did not first vote on whether the Resolution’s underlying motion (itself a 3rd
express and separate voting.
motion for reconsideration) should be entertained before voting on the motion’s merits. We shall lay to rest Mr. Justice
Abad’s observation before dwelling on the merits of the present 2nd motion for reconsideration.
Based on these considerations, arrived at after a lengthy deliberation, the Court thus rejected Mr. Justice Abad’s
observations, and proceeded to vote on the question of whether to entertain the respondents’ present 2nd motion for
Our Ruling
reconsideration. The vote was 9 to 2, with 9 Members voting not to entertain the LBP’s 2nd motion for reconsideration.
We find no merit in the LBP’s second motion for reconsideration, and reject as well the Mr. Justice Abad’s
By this vote, the ruling sought to be reconsidered for the second time was unequivocally upheld; its finality – already
observation on how to approach the consideration of the present motion.
declared by the Court in its Resolution of November 23, 2010 – was reiterated. To quote the dispositive portion of the
Mr. Justice Abad’s Observations/Objections;
reiterated November 23, 2010 Resolution:
The Rules on 2nd Motions for Reconsideration.
On these considerations, we hereby DENY the Motion for Reconsideration with FINALITY. No further pleadings shall
Mr. Justice Abad’s observation apparently stemmed from the peculiar history of the present case.
be entertained. Let entry of judgment be made in due course.
a. A recap of the history of the case.
Thus, this Court mandated a clear, unequivocal, final and emphatic finis to the present case.
This case was originally handled by the Third Division of this Court. In its original Decision of February 6, 2007, the
Landowner’s right to just compensation:
Division affirmed the RTC’s decision setting the just compensation to be paid and fixing the interest due on the balance
a matter of public interest
of the compensation due at 12% per annum. In its Resolution of December 19, 2007, the Third Division resolved the
In assailing our October 12, 2010 resolution, the LBP emphasizes the need to respect the doctrine of immutability of
parties’ motions for reconsideration by deleting the 12% interest due on the balance of the awarded just compensation.
final judgments. The LBP maintains that we should not have granted the petitioners’ motion for reconsideration in our
The parties’ subsequent motions to reconsider this Resolution were denied on April 30, 2008; on May 16, 2008, entry
October 12, 2010 Resolution because the ruling deleting the 12% interest had already attained finality when an Entry
of judgment followed. Despite the entry of judgment, the present petitioners filed a second motion for reconsideration
of Judgment was issued. The LBP argues, too, that the present case does not involve a matter of transcendental
that prayed as well that the case be referred to the Court en banc. Finding merit in these motions, the Third Division
importance, as it does not involve life or liberty. The LBP further contends that the Court mistakenly used the concept
referred the case to the En Banc for its disposition. On December 4, 2009, the Court en banc denied the petitioners’
of transcendental importance to recall a final ruling; this standard should only apply to questions on the legal standing
second motion for reconsideration. Maintaining their belief in their demand to be granted 12% interest, the petitioners
of parties.
persisted in filing another motion for reconsideration. In the interim, the Court promulgated its Internal Rules that
In his dissenting opinion, Mr. Justice Roberto Abad agrees with the LBP’s assertion, positing that this case does not fall
regulated, among others, 2nd motions for reconsideration. On October 12, 2010, the Court en banc granted – by a vote
under any of the exceptions to the immutability doctrine since it only involves money and does not involve a matter of
of 8 for and 4 against – the petitioner’s motion and awarded the 12% interests the petitioners’ prayed for, thus affirming
overriding public interest.
the interests the RTC originally awarded. The Court subsequently denied the respondent’s motion for reconsideration,
We reject the basic premise of the LBP's and Mr. Justice Abad’s arguments for being flawed. The present case goes
giving rise to the present 2nd motion for reconsideration. It was at this point that the OSG moved for leave to intervene.
beyond the private interests involved; it involves a matter of public interest – the proper application of a basic
b. The governing rules on
constitutionally-guaranteed right, namely, the right of a landowner to receive just compensation when the government
exercises the power of eminent domain in its agrarian reform program.
2nd motions for reconsideration
Section 9, Article III of the 1987 Constitution expresses the constitutional rule on eminent domain – "Private property
The basic rule governing 2nd motions for reconsideration is Section 2, Rule 52 (which applies to original actions in the
shall not be taken for public use without just compensation." While confirming the State’s inherent power and right to
Supreme Court pursuant to Section 2, Rule 56) of the Rules of Court. This Rule expressly provides:
take private property for public use, this provision at the same time lays down the limitation in the exercise of this power.
Sec. 2. Second Motion for Reconsideration. No second motion for reconsideration of a judgment or final resolution by
When it takes property pursuant to its inherent right and power, the State has the corresponding obligation to pay the
the same party shall be entertained.
owner just compensation for the property taken. For compensation to be considered "just," it must not only be the full
The absolute terms of this Rule is tempered by Section 3, Rule 15 of the Internal Rules of the Supreme Court that
and fair equivalent of the property taken;2 it must also be paid to the landowner without delay.3
provides:
To fully and properly appreciate the significance of this case, we have to consider it in its proper context. Contrary to
the LBP’s and Mr. Justice Abad’s assertions, the outcome of this case is not confined to the fate of the two petitioners
alone. This case involves the government’s agrarian reform program whose success largely depends on the willingness
of the participants, both the farmers-beneficiaries and the landowners, to cooperate with the government. Inevitably, if
the government falters or is seen to be faltering through lack of good faith in implementing the needed reforms, including
any hesitation in paying the landowners just compensation, this reform program and its objectives would suffer major
setbacks. That the government’s agrarian reform program and its success are matters of public interest, to our mind,
cannot be disputed as the program seeks to remedy long existing and widespread social justice and economic
problems.
In a last ditch attempt to muddle the issues, the LBP focuses on our use of the phrase "transcendental importance,"
and asserts that we erred in applying this doctrine, applicable only to legal standing questions, to negate the doctrine
of immutability of judgment. This is a very myopic reading of our ruling as the context clearly shows that the phrase
"transcendental importance" was used only to emphasize the overriding public interest involved in this case. Thus,
we said:
That the issues posed by this case are of transcendental importance is not hard to discern from these discussions. A
constitutional limitation, guaranteed under no less than the all-important Bill of Rights, is at stake in this case: how can
compensation in an eminent domain case be "just" when the payment for the compensation for property already taken
has been unreasonably delayed? To claim, as the assailed Resolution does, that only private interest is involved in this
case is to forget that an expropriation involves the government as a necessary actor. It forgets, too, that under eminent
domain, the constitutional limits or standards apply to government who carries the burden of showing that these
standards have been met. Thus, to simply dismiss the case as a private interest matter is an extremely shortsighted
view that this Court should not leave uncorrected.
xxxx
More than the stability of our jurisprudence, the matter before us is of transcendental importance to the nation because
of the subject matter involved – agrarian reform, a societal objective of that the government has unceasingly sought to
achieve in the past half century.4
From this perspective, our Resolution of October 12, 2010 only had to demonstrate, as it did, that the higher interests
of justice are duly served. All these, amply discussed in the Resolution of October 12, 2010, are briefly summarized
and reiterated below.
LBP at fault for twelve-
year delay in payment
In his dissenting opinion, Mr. Justice Abad insists that the LBP’s initial valuation of the petitioners’ properties was fully
in accord with Section 17 of the CARL. He posits that when the RTC gave a significantly higher value to these lands,
the LBP acted well within its rights when it appealed the valuation. Thus, to him, it was wrong for this Court to
characterize the LBP’s appeal as malicious or in bad faith.
A simple look at the attendant facts disproves the accuracy of this claim.
First, Mr. Justice Abad’s allegation that the LBP correctly valued the petitioners’ properties is not at all accurate.
Significantly, Mr. Justice Abad does not cite any evidence on record to support his claim that "the Land Bank valued
the lands using the compensation formula that Section 17 of Republic Act 6657 and the DAR’s implementing rules
provide."5
More to the point, this Court has already determined, in a final and executed judgment, that the RTC’s valuation of the
petitioners’ properties is the correct one. To recall, the LBP initially fixed the value of Apo Fruits Corporation’s (AFC)
properties at ₱165,484.47 per hectare or ₱16.00 per square meter (sqm), while it valued Hijo Plantation Inc.’s (HPI)
properties at ₱201,929.97 per hectare, or approximately ₱20.00/sqm. In contrast, the Regional Trial Court fixed the
valuation of the petitioners’ properties at ₱103.33/sqm., or more than five times the initial valuation fixed by the
LBP.
After reviewing the records, this Court affirmed the RTC’s valuation in its February 6, 2007 decision, noting that it was
based on the following evidence: (a) the Commissioners’ reports, (b) the Cuervo appraisers’ report, (c) the schedule of
market values of the City of Tagum per its 1993 and 1994 Revision of Assessment and Property Classification, (d) the
value of the permanent improvements found on the expropriated properties, and (e) the comparative sales of adjacent
lands from early 1995 to early 1997. The Court observed that the RTC valuation also took into consideration the land’s
nature as irrigated land, its location along the highway, market value, assessor’s value, and the volume and value of its
produce. This valuation is fully in accordance with Section 17 of RA 6657, which states:
Section 17. Determination of Just Compensation. - In determining just compensation, the cost of acquisition of the
land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner,
the tax declarations, and the assessment made by government assessors, shall be considered. The social and
economic benefits contributed by the farmers and the farm workers and by government to the property as well as the
non-payment of taxes or loans secured from any government financing institution on the said land shall be considered
as additional factors to determine its valuation.
On its face, the staggering difference between the LBP’s initial valuation of the petitioners’ properties (totaling
₱251,379,104.02) and the RTC’s valuation (totaling ₱1,383,179,000.00) – a difference of ₱1,131,799,895.98
amounting to 81% of the total price – betrays the lack of good faith on the part of the government in dealing with the
landowners. The sheer enormity of the difference between the two amounts cannot but lead us to conclude that the
LBP’s error was grievous and amounted to nothing less than gross negligence in the exercise of its duty – in this
case, to properly ascertain the just compensation due to the petitioners.
Mr. Justice Abad further argues that interest on just compensation is due only where there is delay in payment. In the
present case, the petitioners allegedly did not suffer any delay in payment since the LBP made partial payments prior
to the taking of their lands.
This argument completely overlooks the definition of just compensation already established in jurisprudence. Apart from
the requirement that compensation for expropriated land must be fair and reasonable, compensation, to be "just,"
must also be made without delay.6 In simpler terms, for the government’s payment to be considered just
compensation, the landowner must receive it in full without delay.
In the present case, it is undisputed that the government took the petitioners’ lands on December 9, 1996; the petitioners
only received full payment of the just compensation due on May 9, 2008. This circumstance, by itself, already confirms
the unconscionable delay in the payment of just compensation.
Admittedly, a grain of truth exists in Justice Abad’s observation that the petitioners received partial payments from the
LBP before the titles to their landholdings were transferred to the government. The full and exact truth, however, is
that the partial payments at the time of the taking only amounted to a trifling five percent (5%) of the actual value of
the expropriated properties, as determined with finality by this Court. Even taking into consideration the subsequent
partial payments made totaling ₱411,769,168.32 (inclusive of the amounts deposited prior to the taking), these
payments only constituted a mere one-third (1/3) of the actual value of the petitioners’ properties.
It should be considered – as highlighted in our October 12, 2010 Resolution – that the properties the government took
were fully operating and earning plantations at the time of the taking. Thus, the landowners lost not only their properties,
but the fruits of these properties. These were all lost in 1996, leaving the landowners without any replacement income
from their properties, except for the possible interest for the trifling payment made at the time of the taking that, together
with the subsequent payment, only amounted to a third of the total amount due. Thus, for twelve long years, the amount
of ₱971,409,831.68 was withheld from the landowners.
An added dimension to this delayed payment is the impact of the delay. One impact – as pointed out above – is the
loss of income the landowners suffered. Another impact that the LBP now glosses over is the income that the LBP
earned from the sizeable sum it withheld for twelve long years. From this perspective, the unaccounted-for LBP income
is unjust enrichment in its favor and an inequitable loss to the landowners. This situation was what the Court
essentially addressed when it awarded the petitioners 12% interest.
Mr. Justice Abad goes on to argue that the delay should not be attributed to the LBP as it could not have foreseen that
it would take twelve years for the case to be resolved. Justice Abad’s stance could have been correct were it not for the
fact that the delay in this case is ultimately attributable to the government. Two significant factors justify the attribution
of the delay to the government.
The first is the DAR’s gross undervaluation of the petitioners’ properties – the government move that started the cycle
of court actions.
The second factor to consider is government inaction. Records show that after the petitioners received the LBP’s initial
valuation of their lands, they filed petitions with the DARAB, the responsible agency of the DAR, for the proper
determination of just compensation. Instead of dismissing these petitions outright for lack of jurisdiction, the DARAB sat
on these cases for three years. It was only after the petitioners resorted to judicial intervention, filing their petitions for
the determination of just compensation with the RTC, that the petitioners’ case advanced.
The RTC interpreted the DARAB’s inaction as reluctance of the government to pay the petitioners just compensation,
a view this Court affirmed in its October 12, 2010 Resolution.
Expropriation for agrarian reform
requires the payment of just compensation
The LBP claims that the just compensation in this case should be determined within the context of the article on social
justice found in the 1987 Constitution. In the LBP’s opinion, when we awarded the petitioners 12% interest by way of
potential income, we removed from the taking of agricultural properties for agrarian reform its main public purpose of
righting the wrong inflicted on landless farmers.
By this argument, the LBP effectively attempts to make a distinction between the just compensation given to landowners
whose properties are taken for the government’s agrarian reform program and properties taken for other public
purposes. This perceived distinction, however, is misplaced and is more apparent than real.
The constitutional basis for our agrarian reform program is Section 4, Article XIII of the 1987 Constitution, which
mandates:
Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular
farm workers, who are landless, to own directly or collectively the lands they till or, in the case of other farm workers, to
receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe, taking into
account ecological, developmental, or equity considerations, and subject to the payment of just compensation.
This provision expressly provides that the taking of land for use in the government’s agrarian reform program
is conditioned on the payment of just compensation. Nothing in the wording of this provision even remotely suggests
that the just compensation required from the taking of land for the agrarian reform program should be treated any
differently from the just compensation required in any other case of expropriation. As explained by Commissioner
Roberto R. Concepcion during the deliberations of the 1986 Constitutional Commission:
[T]he term "just compensation" is used in several parts of the Constitution, and, therefore, it must have a uniform
meaning. It cannot have in one part a meaning different from that which appears in the other portion. If, after all, the
party whose property is taken will receive the real value of the property on just compensation, that is good enough.7
In fact, while a proposal was made during the deliberations of the 1986 Constitutional Commission to give a lower
market price per square meter for larger tracts of land, the Commission never intended to give agricultural landowners
less than just compensation in the expropriation of property for agrarian reform purposes.8
To our mind, nothing is inherently contradictory in the public purpose of land reform and the right of landowners to
receive just compensation for the expropriation by the State of their properties. That the petitioners are corporations
that used to own large tracts of land should not be taken against them. As Mr. Justice Isagani Cruz eloquently put it:
[S]ocial 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.9
Interest payments borne by government,
not by farmers-beneficiaries
Nor do we find any merit in the LBP’s assertion that the large amount of just compensation that we awarded the
petitioners, together with the amount of interest due, would necessarily result in making the farmers- beneficiaries
endure another form of bondage – the payment of an exorbitant amount for the rest of their lives.
As the petitioners correctly pointed out, the government’s liability for the payment of interest to the landowner for any
delay attributable to it in paying just compensation for the expropriated property is entirely separate and distinct from
the farmers-beneficiaries’ obligations to pay regular amortizations for the properties transferred to them.
Republic Act No. 6657 (The Comprehensive Agrarian Reform Law, or CARL) provides for the specific source of funding
to be used by the government in implementing the agrarian reform program; this funding does not come directly from
the payments made by the farmers-beneficiaries.101avvphi1

More to the point, under the CARL, the amount the farmers-beneficiaries must pay the LBP for their land is, for the most
part, subsidized by the State and is not equivalent to the actual cost of the land that the Department of Agrarian Reform
paid to the original landowners. Section 26, Chapter VII of the CARL provides:
SEC. 26. Payment by Beneficiaries. - Lands awarded pursuant to this Act shall be paid for by the beneficiaries to the
LBP in thirty (30) annual amortizations at six percent (6%) interest per annum. The payments for the first three (3) years
after the award may be at reduced amounts as established by the PARC: Provided, That the first five (5) annual
payments may not be more than five percent (5%) of the value of the annual gross productions paidas
established by the DAR. Should the scheduled annual payments after the fifth year exceed ten percent (10) of the
annual gross production and the failure to produce accordingly is not due to the beneficiary's fault, the LBP may reduce
the interest rate or reduce the principal obligation to make the payment affordable.

Interpreting this provision of the law, DAR Administrative Order No. 6, Series of 1993 provides:
A. As a general rule, land awarded pursuant to E.O. 229 and R.A. 6657 shall be repaid by the Agrarian Reform
Beneficiary (ARB) to LANDBANK in thirty (30) annual amortizations at six (6%) percent interest per annum. The annual
amortization shall start one year from date of Certificate of Landownership Award (CLOA) registration.
B. The payments by the ARBs for the first three (3) years shall be two and a half percent (2.5%) of AGP [Annual Gross
Production] and five percent (5.0%) of AGP for the fourth and fifth years. To further make the payments affordable, the
ARBs shall pay ten percent (10%) of AGP or the regular amortization, whichever is lower, from the sixth (6th) to the
thirtieth (30th) year.

Clearly, the payments made by the farmers-beneficiaries to the LBP are primarily based on a fixed percentage
of their annual gross production, or the value of the annual yield/produce of the land awarded to them.11 The cost of
the land will only be considered as the basis for the payments made by the farmers-beneficiaries when this amount is
lower than the amount based on the annual gross production. Thus, there is no basis for the LBP to claim that our ruling
has violated the letter and spirit of the social justice provision of the 1987 Constitution. On the contrary, our ruling is
made in accordance with the intent of the 1987 Constitution.

Motion for Oral Arguments

We deny as well the LBP’s motion to set the case for oral arguments. The submissions of the parties, as well as the
records of the case, have already provided this Court with enough arguments and particulars to rule on the issues
involved. Oral arguments at this point would be superfluous and would serve no useful purpose.
The OSG’s Intervention
The interest of the Republic, for whom the OSG speaks, has been amply protected through the direct action of petitioner
LBP – the government instrumentality created by law to provide timely and adequate financial support in all phases
involved in the execution of needed agrarian reform. The OSG had every opportunity to intervene through the long
years that this case had been pending but it chose to show its hand only at this very late stage when its presence can
only serve to delay the final disposition of this case. The arguments the OSG presents, furthermore, are issues that this
Court has considered in the course of resolving this case. Thus, every reason exists to deny the intervention prayed
for.

WHEREFORE, premises considered, the respondent’s second motion for reconsideration and the motion to set the
case for oral arguments are hereby DENIED WITH ABSOLUTE FINALITY. The motion for intervention filed by the
Office of the Solicitor General is, likewise, denied. We reiterate, under pain of contempt if our directive is disregarded
or disobeyed, that no further pleadings shall be entertained. Let judgment be entered in due course.
SO ORDERED.