G.R. No.

L-62626 July 18, 1984

SPOUSES CAYETANO and PATRICIA TIONGSON, SPOUSES EDWARD and PACITA GO, SPOUSES ROBERTO and MYRNA LAPERAL III, ELISA R. MANOTOK, SPOUSES IGNACIO and PACITA MANOTOK, SEVERINO MANOTOK, JR., SPOUSES FAUSTO and MILAGROS MANOTOK, ROSA R. MANOTOK, Minors MIGUEL A. B. SISON and MA. CRISTINA E. SISON, represented by their judicial guardian FILOMENA M. SISON, SPOUSES MAMERTO and PERPETUA M. BOCANEGRA, GEORGE M. BOCANEGRA, represented by his judicial guardian MAMERTO BOCANEGRA, SPOUSES FRANCISCO and FILOMENA SISON, JOSE CLEMENTE MANOTOK, SPOUSES JESUS and THELMA MANOTOK, Minors PHILIP MANOTOK, MARIA TERESA MANOTOK and RAMON SEVERINO MANOTOK, represented by their judicial guardian SEVERINO MANOTOK, JR., Minors JESUS JUDE MANOTOK, JR. and JOSE MARIA MANOTOK, represented by their judicial guardian JESUS MANOTOK, petitioners, vs. HONORABLE COURT OF APPEALS and TEODORO S. MACAYA, respondents. Romeo J. Callejo and Gil Venerando R. Racho for petitioners. David Advincula Jr. and Jose J. Francisco for respondents.

GUTIERREZ, JR., J.: In this petition for review on certiorari of the decision of the Court of, Appeal declaring the existence of a landholder-tenant relationship and ordering the private respondent's reinstatement, the petitioners contend that the appellate court committed an error of law in: 1. Disregarding the findings of fact of the Court of Agrarian Relations which are supported by substantial evidence; and 2. Substituting the findings of fact of the Court of Agrarian Relations with its own findings. Briefly, the facts of the case as found by the Court of Agrarian Relations, Seventh Regional District, Branch 1 at Pasig, Metro Manila are as follows: Sometime in 1946, the late Severino Manotok donated and transferred to his eight (8) children and two (2) grandchildren namely: Purificacion Manotok, Eliza Manotok,

Perpetua manotok, Filomena Manotok, Severino Manotok, Jr., Jesus Manotok, Rahula Ignacio Manotok, Severino Manotok III, Fausto Manotok and Rosa Manotok, a thirty-four-hectare lot located in Payong, Old Balara, Quezon City covered by a certificate of title. Severino Manotok who was appointed judicial guardian of his minor children 'accepted on their behalf the aforesaid donation. At that time, there were no tenants or other persons occupying the said property. In that same year, Teodoro Macaya accompanied by Vicente Herrera, the overseer of the property, went to the house of Manotok in Manila and pleaded that he be allowed to live on the Balara property so that he could at the same time guard the property and prevent the entry of squatters and the theft of the fruits and produce of the fruit trees planted by the owner. Manotok allowed Macaya to stay in the property as a guard (bantay) but imposed the conditions that at any time that the owners of the property needed or wanted to take over the property, Macaya and his family should vacate the property immediately; that while he could raise animals and plant on the property, he could do so only for his personal needs; that he alone could plant and raise animals on the property; and that the owners would have no responsibility or liability for said activities of Macaya. Macaya was allowed to use only three (3) hectares. These conditions, however, were not put in writing. On December 5, 1950, the property-owners organized themselves into a corporation engaged primarily in the real estate business known as the Manotok Realty, Inc. The owners transferred the 34-hectare lot to the corporation as part of their capital contribution or subscription to the capital stock of the corporation. From 1946 to 1956, Macaya did not pay, as he was not required to pay anything to the owners or corporation whether in cash or in kind for his occupancy or use of the property. However, the corporation noted that the realty taxes on the property had increased considerably and found it very burdensome to pay the said taxes while on the other hand, Macaya had contributed nothing nor even helped in the payment of the taxes. Thus, Macaya upon the request of the owners agreed to help by remitting ten (10) cavans of palay every year as his contribution for the payment of the realty taxes beginning 1957. On June 5, 1964, the corporation requested Macaya to increase his contribution from ten (10) cavans to twenty (20) cavans of palay effective 1963 because the assessed value of the property had increased considerably. Macaya] agreed. In 1967, Macaya informed the corporation that he could not afford anymore to deliver any palay because the palay dried up. He further requested that in the ensuring years, he be allowed to contribute only ten (10) cavans of palay. The

corporation said that if that was the case, he might as well not deliver anymore. Thus, from 1967 up to 1976, Macaya did not deliver any palay. On January 31, 1974, Manotok Realty, Inc. executed a "Unilateral Deed of Conveyance" of the property in favor of Patricia Tiongson, Pacita Go, Roberto Laperal III, Elisa Manotok, Rosa Manotok, Perpetua M. Bocanegra, Filomena M. Sison, Severino Manotok, Jr., Jesus Manotok, Ignacio S. Manotok, Severino Manotok III and Fausto Manotok. Sometime in 1974, Macaya was informed by the Manotoks that they needed the property to construct their houses thereon. Macaya agreed but pleaded that he be allowed to harvest first the planted rice before vacating the property. However, he did not vacate the property as verbally promised and instead expanded the area he was working on. In 1976, the Manotoks once more told Macaya to vacate the entire property including those portions tilled by him. At this point, Macaya had increased his area from three (3) hectares to six (6) hectares without the knowledge and consent of the owners. As he was being compelled to vacate the property, Macaya brought the matter to the Department (now Ministry) of Agrarian Reforms. The Manotoks, during the conference before the officials of the Department insisted that Macaya and his family vacate the property. They threatened to bulldoze Macaya's landholding including his house, thus prompting Macaya to file an action for peaceful possession, injunction, and damages with preliminary injunction before the Court of Agrarian Relations. The sole issue to be resolved in the present petition is whether or not a tenancy relationship exists between the parties. The Court of Agrarian Relations found that Macaya is not and has never been a share or leasehold tenant of Severino Manotok nor of his successors-in-interest over the property or any portion or portions thereof but has only been hired as a watchman or guard (bantay) over the same. On Macaya's appeal from the said decision, the respondent appellate court declared the existence of an agricultural tenancy relationship and ordered Macaya's reinstatement to his landholding. Since what is involved ed is agricultural tenancy, we refer to Republic Act No. 1199 as amended by Republic Act No. 2263. Section 3 thereof defines agricultural tenancy as: xxx xxx xxx

... the physical possession by a person of land devoted to agriculture belonging to, or legally possessed by, another for the purpose of production through the labor of the former and of the members of his immediate farm household, in consideration of which the former agrees to share the harvest with the latter, or to pay a price certain, either in produce or in money, or in both. Thus, the essential requisites of tenancy relationship are: 1) the parties are the landholder and the tenant; 2) the subject is agricultural land; 3) there is consent; 4) the purpose is agricultural production; and 5) there is consideration (Agustin, Code of Agrarian Reforms of the Philippines, 1981, p. 19). As xxx xxx xxx All these requisites are necessary in order to create tenancy relationship between the parties and the absence of one or more requisites do not make the alleged tenant a de facto tenant, as contra-distinguished from a de jure tenant, This is so because unless a person has established his status as a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government under existing tenancy laws. ... The key factor in ascertaining whether or not there is a landowner-tenant relationship in this case is the nature of the disputed property. Is the thirty-four (34) hectare lot, of which the six (6) hectares occupied by the private respondent form a part, against agricultural land? If not, the rules on agrarian reform do not apply. From the year 1948 up to the present, the tax declarations of real property and the annual receipts for real estate taxes paid have always classified the land as "residential". The property is in Balara, Quezon City, Metro Manila, not far from the correctly held by the trial court: University of the Philippines and near some fast growing residential subdivisions. The Manotok family is engaged in the business of developing subdivisions in Metro Manila, not in farming. The trial court observed that a panoramic view of the property shows that the entire 34 hectares is rolling forestal land without any flat portions except the small area which could be planted to palay. The photographs of the disputed area show that flush to the plantings of the private respondent are adobe walls separating expensive looking houses and residential lots from the palay and

newly plowed soil. Alongside the plowed or narrowed soil are concrete culverts for the drainage of residential subdivisions. The much bigger portions of the property are not suitable for palay or even vegetable crops. The trial court noted that in a letter dated April 12, 1977, the City Engineer of Quezon City certified on the basis of records in his office that the property in question falls within the category of "Residential I Zone." The respondent court ignored all the above considerations and noted instead that the appellees never presented the tax declarations for the previous year, particularly for 1946, the year when Macaya began cultivating the property. It held that while the petitioners at that time might have envisioned a panoramic residential area of the disputed property, then cogonal with some forest, that vision could not materialize due to the snail pace of urban development to the peripheral areas of Quezon City where the disputed property is also located and pending the consequent rise of land values. As a matter of fact, it found that the houses found thereon were constructed only in the 70's. Whatever "visions" the owners may have had in 1946, the fact remains that the land has always been officially classified as "residential" since 1948. The areas surrounding the disputed six hectares are now dotted with residences and, apparently, only this case has kept the property in question from being developed together with the rest of the lot to which it belongs. The fact that a caretaker plants rice or corn on a residential lot in the middle of a residential subdivision in the heart of a metropolitan area cannot by any strained interpretation of law convert it into agricultural land and subject it to the agrarian reform program. On this score alone, the decision of the respondent court deserves to be reversed. Another requisite is that the parties must be landholder and tenant. Rep. Act No. 11 99 as amended defines a landholder Sec. 5(b) A landholder shall mean a person, natural or juridical, who, either as owner, lessee, usufructuary, or legal possessor, lets or grants to another the use or cultivation of his land for a consideration either in shares under the share tenancy system, or a price certain under the leasehold tenancy system. On the other hand, a tenant is defined as Sec. 5(a) A tenant shall mean a person who, himself and with the aid available from within his immediate farm household, cultivates the

land belonging to, or possessed by, another with the latter's consent for purposes of production, sharing the produce with the landholder under the share tenancy system or paying to the landholder a price certain in produce or in money or both, under the leasehold tenancy system. Under these definitions, may Macaya be considered as a tenant and Manotok as a landholder? Significant, as the trial court noted, is that the parties have not agreed as to their contributions of the several items of productions such as expenses for transplanting, fertilizers, weeding and application of insecticides, etc. In the absence of an agreement as to the respective contributions of the parties or other terms and conditions of their tenancy agreement, the lower court concluded that no tenancy relationship was entered into between them as tenant and landholder. On this matter, the respondent Appellate Court disagreed. It held that: ... Whether the appellant was instituted as tenant therein or as bantay, as the appellees preferred to call him, the inevitable fact is that appellant cleared, cultivated and developed the once unproductive and Idle property for agricultural production. Appellant and Don Severino have agreed and followed a system of sharing the produce of the land whereby, the former takes care of all expenses for cultivation and production, and the latter is only entitled to 10 cavans of rice per harvest. This is the essense of leasehold tenancy. It should be noted, however, that from 1967 to the present, Macaya did not deliver any cavans of palay to the petitioners as the latter felt that if Macaya could no longer deliver the twenty (20) cavans of palay, he might as well not deliver any. The decision of the petitioners not to ask for anymore contributions from Macaya reveals that there was no tenancy relationship ever agreed upon by the parties. Neither can such relationship be implied from the facts as there was no agreed system of sharing the produce of the property. Moreover, from 1946 to 1956 at which time, Macaya was also planting rice, there was no payment whatsoever. At the most and during the limited period when it was in force, the arrangement was a civil lease where the lessee for a fixed price leases the property while the lessor has no responsibility whatsoever for the problems of production and enters into no agreement as to the sharing of the costs of fertilizers, irrigation, seedlings, and other items. The private respondent, however, has long stopped in paying the annual rents and violated the agreement when he expanded the area he was allowed to use. Moreover, the duration of the temporary arrangement had expired by its very terms.

Going over the third requisite which is consent, the trial court observed that the property in question previous to 1946 had never been tenanted. During that year, Vicente Herrera was the overseer. Under these circumstances, coupled by the fact that the land is forested and rolling, the lower court could not see its way clear to sustain Macaya's contention that Manotok had given his consent to enter into a verbal tenancy contract with him. The lower court further considered the fact that the amount of ten (10) cavans of palay given by Macaya to the owners from 1957 to 1964 which was later increased to twenty (20) cavans of palay from 1964 to 1966 was grossly disproportionate to the amount of taxes paid by the owners. The lot was taxed as residential land in a metropolitan area. There was clearly no intention on the part of the owners to devote the property for agricultural production but only for residential purposes. Thus, together with the third requisite, the fourth requisite which is the purpose was also not present. The last requisite is consideration. This is the produce to be divided between the landholder and tenant in proportion to their respective contributions. We agree with the trial court that this was also absent. As earlier stated, the main thrust of petitioners' argument is that the law makes it mandatory upon the respondent Court of Appeals to affirm the decision of the Court of Agrarian Relations if the findings of fact in said decision are supported by substantial evidence, and the conclusions stated therein are not clearly against the law and jurisprudence. On the other hand, private respondent contends that the findings of the Court of Agrarian Relations are based not on substantial evidence alone but also on a misconstrued or misinterpreted evidence, which as a result thereof, make the conclusions of the Court of Agrarian Relations clearly contrary to law and jurisprudence. After painstakingly going over the records of the case, we find no valid and cogent reason which justifies the appellate court's deviation from the findings and conclusions of the lower court. It is quite clear from the 44-page decision of the trial court, that the latter has taken extra care and effort in weighing the evidence of both parties of the case. We find the conclusions of the respondent appellate court to be speculative and conjectural. It bears re-emphasizing that from 1946 to 1956, there was no agreement as to any system of sharing the produce of the land. The petitioners did not get anything from the harvest and private respondent Macaya was using and cultivating the land free from any charge or expense. The situation was rather strange had there been a tenancy agreement between Don Severino and Macaya.

From 1957 to 1964, Macaya was requested to contribute ten (10) cavans a year for the payment of the realty taxes. The receipts of these contributions are evidenced by the following exhibits quoted below: (a) Exhibit "4" adopted and marked as Exhibit "K" for plaintiff (Macaya): Ukol sa taon 1961 Tinanggap naniin kay G. Teodoro Macaya ang sampung (10) cavan na palay bilang tulong niya sa pagbabayad ng amillaramiento sa lupa ng corporation na nasa Payong, Q.C. na kaniyang binabantayan. (b) Exhibit "9" adopted and marked as Exhibit "L" for plaintiff (Macaya): Tinanggap namin kay Ginoong Teodoro Macaya ang TATLONG (3) kabang palay bilang kapupunan sa DALAWAMPUNG (20) kabang palay na kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1963 ng lupang ari ng Manotok Realty, Inc. na nasa Payong, Quezon City, na kanyang binabantayan samantalang hindi pa ginagawang SUBDIVISION PANGTIRAHAN. c) Exhibit "10" adopted and marked as Exhibit "N" for plaintiff (Macaya): Tinanggap namin kay Ginoong Teodoro Macaya ang DALAWAMPUNG (20) kabang palay na kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1964 ng lupang ari ng Manotok Realty Inc., na nasa Payong, Quezon City, na kanyang binabantayan samantalang hindi pa ginagawang SUBDIVISION PANG TAHANAN. d) Exhibit "11" adopted and marked as Exhibit "M" for plaintiff (Macaya): Tinanggap namin kay Ginoong Teodoro Macaya ang DALAWAMPUNG (20) kabang ng palay na kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1965 ng lupang ari ng Manotok Realty, Inc., na nasa Payong, Quezon City, na kanyang binabantayan

samantalang hindi pa ginagawang SUBDIVISION PANG TAHANAN. From the above-quoted exhibits, it clearly appears that the payment of the cavans of palay was Macaya's contribution for the payment of the real estate taxes; that the nature of the work of Macaya is that of a watchman or guard (bantay); and, that the services of Macaya as such watchman or guard (bantay) shall continue until the property shall be converted into a subdivision for residential purposes. The respondent appellate court disregarded the receipts as self-serving. While it is true that the receipts were prepared by petitioner Perpetua M. Bocanegra, Macaya nevertheless signed them voluntarily. Besides, the receipts were written in the vernacular and do not require knowledge of the law to fully grasp their implications. Furthermore, the conclusion of the respondent appellate court to the effect that the receipts having been prepared by one of the petitioners who happens to be a lawyer must have been so worded so as to conceal the real import of the transaction is highly speculative. There was nothing to conceal in the first place since the primary objective of the petitioners in allowing Macaya to live on the property was for security purposes. The presence of Macaya would serve to protect the property from squatters. In return, the request of Macaya to raise food on the property and cultivate a three-hectare portion while it was not being developed for housing purposes was granted. We can understand the sympathy and compassion which courts of justice must feel for people in the same plight as Mr. Macaya and his family. However, the petitioners have been overly generous and understanding of Macaya's problems. For ten years from 1946 to 1956, he lived on the property, raising animals and planting crops for personal use, with only his services as "bantay" compensating for the use of another's property. From 1967 to the present, he did not contribute to the real estate taxes even as he dealt with the land as if it were his own. He abused the generosity of the petitioners when he expanded the permitted area for cultivation from three hectares to six or eight hectares. Mr. Macaya has refused to vacate extremely valuable residential land contrary to the clear agreement when he was allowed to enter it. The facts of the case show that even Mr. Macaya did not consider himself as a true and lawful tenant and did not hold himself out as one until he was asked to vacate the property. WHEREFORE, the petition is GRANTED. The decision of the respondent Court of Appeals is hereby REVERSED and SET ASIDE and the decision of the Court of Agrarian Relations is AFFIRMED.

SO ORDERED. Teehankee (Chairman), Plana, Relova and De la Fuente, JJ., concur. Melencio-Herrera, J., is on leave.

G.R. No. L-23773-74

December 29, 1967

FRANCISCO PINEDA, ET AL., petitioner, vs. PASTOR DE GUZMAN, Judge, Court of Agrarian Relations, and BEATRIZ D. VDA. DE FELICIANO,respondents Benjamin C. Reyes for petitioners. Nora G. Nostratis and E. T. Estrada for respondent Judge. Rigidor Y. Aglipay for other respondents. ANGELES, J.: On certiorari and prohibition with preliminary injunction to the Court of Agrarian Relations, presided by the respondent Judge, Pastor de Guzman, and private respondent Beatriz D. Vda. de Feliciano, to set aside the order issued by the respondent Judge, dated October 7, 1964, ordering the execution of the decision rendered in the CAR Cases Nos. 1187 and 1188, on the ground that the assailed order was issued without and in excess of jurisdiction, or with grave abuse of discretion; that respondent Judge be restrained from enforcing or implementing the aforesaid order; and that a write of preliminary injunction be issued pending consideration of the instant petition. On November 10, 1964, the Court resolved to give due course to the petition, required the respondents to answer the petition (not a motion to dismiss), and authorized the issuance of a writ of preliminary injunction, as prayed for, upon the petitioners' filing a bond in the sum of P1,000.00. The required bond having been posted, the injunctive writ was issued on November 17, 1964. From the pleadings and annexes thereto filed by the parties, it appears that on July 17, 1962, Beatriz D. Vda. de Feliciano, herein private respondent, filed two petitions before the Court of Agrarian Relations docketed No. 1187 and 1188, against the herein petitioners, as respondents there, alleging that petitioner is the owner of several parcels of land which are tenanted by the respondents; that said petitioner had duly notified the respondents and the Agrarian court, within the time and in the manner prescribed by law, of her intention to mechanize her landholding; and, prayed that she be authorized to mechanize her landholdings, and the respondents be ordered to vacate the lands. The respondents traversed the allegations in the petitions, specifically averring that petitioner has no sincere intention of mechanizing her landholdings and had filed the cases merely to harass them; that the court has acquired no jurisdiction over the cases for failure of petitioner to comply with the provision of Section 50,

Republic Act 1199, as amended, regarding the giving of proper notices; and that it is more economical to continue with the old system of farming, by the use of man-animal labor. They prayed that the petitions be dismissed.
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By agreement of the parties the cases were tried jointly. After a trial, on February 1, 1964, decision was rendered with the following dispositive portion: WHEREFORE, the court decides this case in favor of the petitioner by giving her authority to eject her tenants abovenamed from their respective landholdings also above-described, and to mechanize her said landholdings. Admittedly, the decision had become final and executory; in March, 1964. On September 3, 1964, the petitioners, with due notice to the respondents, filed a motion for execution on the ground that the decision had already become final. On September 26, 1964, the respondents opposed the motion on the following grounds: (a) That the defendants have already planted their respective landholdings with palay and some with sugar cane and a part will be harvested next month and December, 1964:, and January, 1965, and sugar cane crops will be harvested this coming November, 1964; (c) That one of the defendants (Rozalino Dizon) sold his landholding before the decision of these cases to defendant Juanito Ochoa with the knowledge and consent of the plaintiff; (d) That these cases were filed and tried during the time when Republic Act No. 1199, as amended by Republic Act No. 2263 was still enforced and a portion of the proceedings including the rendition of the decision was had after the passage of the Land Reform Code, Republic Act No. 3844, thus section 168 of the Land Reform Code allows the said complaint for mechanization and be tried and decided in accordance with Republic Act No. 1199, as amended; (e) That the dispossessed defendants are not willing to be resettled, and thus the execution of this decision should be held in abeyance until the lapse of one year from date of decision become final. [Emphasis Ours.]

Resolving the motion for execution and the opposition thereto, on October 7, 1964, an order was issued granting the execution of the decision. A motion for reconsideration of the order filed by the respondents having been denied, the instant petition was filed on November 7, 1964. The herein respondents, answering the petition alleged that Section 50 of Republic Act 1199, as amended, is not the applicable law on the matter, contending that said provision of the law is applicable only ". . . in so far as the requirements to make up a case for ejectment on the ground of cultivation by mechanization is concerned, and ends up to the rendition of the decision. It does not to the extent of embracing its execution, . . . . After a case for ejectment is laid before the Court and decision is rendered therein, the Revised Rules of Court, which took effect on January 1, 1964, which Republic Act 3844 has adopted as its procedural vehicle, on the manner and time of appeal and execution after the finality of the decision, find application to the ejectment case. . . . With the enactment of Republic Act 3844, and subsequently, the adoption of the Rules of Court, first its original version and later the Revised Rules of Court, the procedural rule of execution stated in section 50(a), Republic Act 1199, as amended was abrogated." The issue to be resolved, therefore, is: May execution issue of a decision of the Court of Agrarian Relations dispossessing a tenant of his landholding immediately after the lapse of the reglementary period to appeal from the decision, if no appeal has been duly perfected, in accordance with the provision of Section 1, Rule 39 of the Revised Rules of Court, or, should it be, as in the case at bar, under Section 50(a) of Republic Act 1199, as amended? Section 1, Rule 39 of the Revised Rules of Court reads thus: Sec. 1. Execution upon final judgments or orders. Execution shall issue only upon a judgment or order that finally disposes of the action or proceeding. Such execution shall issue as a matter of right upon the expiration of the period to appeal therefrom if no appeal has been duly perfected. If the judgment has been duly appealed, execution may issue as a matter of right from the date of the service of the notice provided in section 11 of Rule 51. Section 50(a), Republic Act 1199, as amended, provides the following:

Sec. 50. Causes for the Dispossession of Tenant. Any of the following, and no other shall be sufficient cause for the dispossession of a tenant from his landholdings: (a) The bond fide intention of the landholder-owner or his relative within the first degree, by consanguinity to cultivate the land himself personally or through the employment of farm machinery and equipment and implements. . . . Provided, further, That in case any dispossessed tenant is not willing to be resettled, his possession (dispossession) shall not be enforced until the lapse of one year from the date the decision becomes final. . . . [Emphasis Supplied] The decision herein rendered authorizing the petitioner-landlord to mechanize her landholdings and ordering the tenants to vacate the land, upon the facts obtaining in the cases, appears to be regular, and considering that the tenants did not appeal therefrom, its validity is beyond question. But the question is, the Court act without and in excess of jurisdiction, or with grave abuse of discretion, in ordering the execution of the decision in disregard of the provision of Section 50(a) of Republic Act 1199, as amended? The respondents attempt to justify the validity of the order anchoring on the provision of Section 1, Rule 39 of the Revised Rules of Court, above-quoted, and argue that the decision having become final and executory, it becomes a ministerial duty of the Court to order execution. Respondents further contend that "With the enactment of Republic Act 3844 (which did not reproduce the quoted and underscored provision of Section 50(a) of Act 1199, as amended), and subsequently, the adoption of the Rules of Court, first its original version and later the Revised Rules of Court, the procedural rule of execution stated in said Section 50(a), Republic Act 1199, as amended, was abrogated."
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The petitioners take issue with the respondents and contend that the provision of Section 50(a) of Republic Act 1199, as amended, is substantive in character, and, therefore, it could not be deemed to have been abrogated by the approval of the Revised Rules of Court, since the rule-making power of the Supreme Court is limited to the promulgation of rules concerning pleadings, practice and procedure in all courts, and admission to the practice of law, which shall be uniform for all courts of the same grade and shall not diminish, increase, or modify substantive rights. The consideration of the problem may be approached from two legal aspects: 1. There can be no debate of the fact that petitioners were agricultural share tenants. Their status as such is recognized by the respondents.

When the Agricultural Land Reform Code, Republic Act 3844 went into effect as law on August 8, 1963, the CAR Cases Nos. 1187 and 1188 were still pending trial before the Court of Agrarian Relations. Said cases being applications for mechanization of farmlands, therefore, conformably to the provision of section 168 of Act 3844, the same should be "decided in accordance with the pertinent provisions and requirements of Republic Act Numbered Eleven Hundred and Ninety-nine, as amended." Implicit from the foregoing legal provision, the adjudication of the said cases Nos. 1187 and 1188 shall be proceeded in accordance with, and with due observance of, the provisions of Act 1199, as amended, among which, Section 50(a) of the law, which specifically ordains that the judgment of dispossession of the tenant shall not be enforced until the lapse of one year from the date the decision becomes final. The reasons behind the provision of the law among others, is found in Section 4 of Act 3844 . . . That existing share tenancy contracts may continue in force and effect in any region or locality, to be governed in the meantime by the pertinent provisions of Republic Act No. 1199, as amended, until the end of the Agricultural year when the National Land Reform Council proclaims that all the government machineries and agencies in the region or locality relating to leasehold envisioned in this Code are operating, . . . . The foregoing provisions of the law breathe the breath of the spirit of the social justice precept, embodied in the Constitution "to insure the well-being and economic security of all the people", such that, the law has deemed it wise and just to ordain that until the National Land Reform Council has not yet made a proclamation that all the government machineries and agencies in the region or locality relating to leasehold envisioned in this Code, are operating, "That the existing share tenancy contracts may continue in force and effect in any region or locality, to be governed in the meantime by the pertinent provisions of Republic Act No. 1199, as amended, . . . ." As there is no showing in the record that the National Land Reform Council had already proclaimed "that all the government machineries and agencies" in the region or locality where the landholdings in question are situated, "are operating", the law has prescribed that in the meantime, the provision of Section 50(a) of Act 1199, as amended, should be followed in the adjudication and enforcement of the rights of the parties, and, therefore, the dispossession of the tenant, who is not willing to be resettled, as the herein petitioners have so stated, "shall not be enforced until the lapse of one year from the date of the decision becomes final."
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2. The proviso in Section 50(a) of Act 1199, as amended, quoted hereinabove, is a substantive law in character conferring a substantive right in favor of persons contemplated to be protected therefrom. Substantive law is that which creates, defines and regulates rights, or which regulates the rights and duties which give rise to a cause of action; that part of the law which courts are established to administer, as opposed to adjective or remedial law, which prescribes the method of enforcing rights or obtain redress for their invasion. (Primicias v. Ocampo, 93 Phil. 446.) The adverted provision of the law contemplates giving to the tenants a protection from a sudden change of condition of livelihood, and it is a reasonable exercise by the States of its police power to regulate and control the relationship between landholders and tenants, in compliance with the principle of social justice embodied in the Constitution. Section 49 of the Agricultural Tenancy Act, Republic Act 1199, as amended, enunciates the principle of security of tenure of the tenant, such that it prescribes that the relationship of landholder and tenant can only be terminated for causes provided by law. The principle is epitomized by the axiom in land tenure that once a tenant, always a tenant. Attacks on the constitutionality of this guarantee have centered on the contention that it is a limitation on freedom of contract, a denial of the equal protection of the law, and an impairment of or a limitation on property rights. The assaults is without reason. The law simply provides that the tenancy relationship between the landholder and his tenant should be preserved in order to insure the well-being of the tenant and protect him from being unjustly dispossessed of the land. Its termination can take place only for causes and reasons provided in the law. It was established pursuant to the social justice precept of the Constitution and in the exercise of the police power of the State to promote the common weal. (Primero v. Court of Industrial Relations, G.R. No. L-10594, May 29, 1957.) An aspect of the case which calls for the application of the equity rule is manifested from the fact clearly established in the record that the petitionerlandholder has been guilty of laches. A common fact of which courts can take judicial cognizance is that the planting season of palay, especially in the Central Luzon, begins during the rainy season, generally in June or July every year. Notwithstanding that the decision had become final and executory in March, 1964, we fail to find justifiable explanation for the conduct of the petitionerlandholder for not having asked, as soon as practicable, the execution of the decision, if her intention really was to obtain possession of the land so that her plan of cultivation by mechanization of the land could be carried out. Nevertheless, with full knowledge of the circumstances and conditions then present, the petitioner-landholder had tolerated, nay, permitted, the tenants to begin with the plowing, harrowing, cleaning and sowing of seeds on the land, when she saw that the plants had already grown and blooming and almost ready
1awp hil.net

to be harvested, it was then when petitioner-landholder came before the court to ask for the possession of the land. Such an action of the landholder to take possession of the land from the tenants, at such a time is to all intents and purposes, an attempt to enrich herself to the prejudice of the tenants. This conduct can find no sanction in the realm of good faith. For the foregoing consideration, the order of the respondent Judge dated October 7, 1964, is hereby set aside; considering, however, that the one year period from the finality of the decision has already elapsed, the issuance of a permanent injunction has thus become functus oficio. Costs against the private respondents. Concepcion, C.J., Reyes J.B.L., Makalintal, Bengzon, J.P., Zaldivar, Sanchez and Castro, JJ., concur. Fernando, J., took no part.

G.R. No. 109093 November 20, 1995

LOPE MACHETE, NICASIO JUMAWID, SANTIAGO JUMAWID, JOHN JUMAWID, PEDRO GAMAYA, RENATO DELGADO, FERNANDO OMBAHIN, MATIAS ROLEDA, PASIANO BARO, IGNACIO BARO, MAMERTO PLARAS and JUSTINIANO VILLALON, petitioners, vs. COURT OF APPEALS and CELESTINO VILLALON, respondents.

BELLOSILLO, J.: Are Regional Trial Courts' vested with jurisdiction over cases for collection of back rentals from leasehold tenants? On 21 July 1989 private respondent Celestino Villalon filed a complaint for collection of back rentals and damages before the Regional Trial Court of Tagbilaran City against petitioners Lope Machete, Nicasio Jumawid, Santiago Jumawid, John Jumawid, Pedro Gamaya, Renato Delgado, Fernando Ombahin, Matias Roleda, Pasiano Baro, Ignacio Baro, Mamerto Plaras and Justiniano Villalon. The complaint alleged that the parties entered into a leasehold agreement with respect to private respondent's landholdings at Poblacion Norte, Carmen, Bohol, under which petitioners were to pay private respondent a certain amount or percentage of their harvests. However, despite repeated demands and with no valid reason, petitioners failed to pay their respective rentals. Private respondent thus prayed that petitioners be ordered to pay him back rentals and damages. Petitioners moved to dismiss the complaint on the ground of lack of jurisdiction of the trial court over the subject matter. They contended that the case arose out of or was connected with agrarian relations, hence, the subject matter of the complaint fell squarely within the jurisdiction of the Department of Agrarian Reform (DAR) in the exercise of its quasi-judicial powers under Sec. 1, pars. (a) and (b), Rule II of the Revised Rules of the Department of Agrarian Reform Adjudication Board (DARAB). On 22 August 1989 the trial court granted the motion to dismiss, 1 and on 28 September 1989 denied the motion for reconsideration. 2 Private respondent sought annulment of both orders before respondent Court of Appeals which on 21 May 1992 rendered judgment reversing the trial court and directing it to assume jurisdiction over the case 3 on the basis of its finding that

. . . The CARL (RA 6657) and other pertinent laws on agrarian reform cannot be seen to encompass a case of simple collection of back rentals by virtue of an agreement, as the one at bar, where there is no agrarian dispute to speak of (since the allegation of failure to pay the agreed rentals was never controverted in the motion to dismiss) nor the issue raised on application, implementation, enforcement or interpretation of these laws. 4

On 18 January 1993 the appellate court rejected the motion for reconsideration. 5 Petitioners maintain that the alleged cause of action of private respondent arose from an agrarian relation and that respondent appellate court failed to consider that the agreement involved is an agricultural leasehold contract, hence, the dispute is agrarian in nature. The laws governing its execution and the rights and obligations of the parties thereto are necessarily R.A. 3844, 6 R.A. 6657 7 and other pertinent agrarian laws. Considering that the application, implementation, enforcement or interpretation of said laws are matters which have been vested in the DAR, this case is outside the jurisdiction of the trial court. The petition is impressed with merit. Section 17 of E.O. 229 8 vested the DAR with quasi-judicial powers to determine and adjudicate agrarian reform matters as well as exclusive original jurisdiction over all matters involving implementation of agrarian reform except those falling under the exclusive original jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources in accordance with law. Executive Order 129-A, while in the process of reorganizing and strengthening the DAR, created the DARAB to assume the powers and functions with respect to the adjudication of agrarian reform cases. 9 Section 1, pars. (a) and (b), Rule II of the Revised Rules of the DARAB explicitly provides Sec. 1. Primary, Original and Appellate Jurisdiction. The Agrarian Reform Adjudication Board shall have primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive Orders Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing rules and regulations. Specifically, such jurisdiction shall extend over but not be limited to the following: (a) Cases involving the rights and obligations of persons engaged in the cultivation and use of agricultural land covered by the Comprehensive Agrarian Reform Program (CARP) and other agrarian laws, (b) Cases involving the valuation of land, and

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 . . . In Quismundo v. Court of Appeals, 10 this Court interpreted the effect of Sec. 17 of E.O. 229 on P.D. 946, which amended R.A. 3844, the agrarian law then in force
11 The above quoted provision (Sec. 17) should be deemed to have repealed Sec. 12 (a) and (b) of Presidential Decree No. 946 which invested the then courts of agrarian relations with original exclusive jurisdiction over cases and questions involving rights granted and obligations imposed by presidential issuances promulgated in relation to the agrarian reform program.

Formerly, under Presidential Decree No. 946, amending Chapter IX of Republic Act No. 3844, the courts of agrarian relations had original and exclusive jurisdiction over "cases involving the rights and obligations of persons in the cultivation and use of agricultural land except those cognizable by the National Labor Relations Commission" and "questions involving rights granted and obligations imposed by laws, Presidential Decrees, Orders, Instructions, Rules and Regulations issued and promulgated in relation to the agrarian reform program," except those matters involving the administrative implementation of the transfer of land to the tenant-farmer under Presidential Decree No. 27 and amendments thereto which shall be exclusively cognizable by the Secretary of Agrarian Reform. 12 In 1980, upon the passage of Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act, the courts of agrarian relations were integrated into the regional trial courts and the jurisdiction of the former was vested in the latter courts. 13 However, with the enactment of Executive Order No. 229, which took effect on August 14 29, 1987, fifteen (15) days after its release for publication in the Official Gazette, the regional trial courts were divested of their general jurisdiction to try agrarian reform matters. The said jurisdiction is now vested in the Department of Agrarian Reform.

On 15 June 1988 R.A. 6657 was passed containing provisions which evince and support the intention of the legislature to vest in the DAR exclusive jurisdiction over all agrarian reform matters. 15 Section 50 thereof substantially reiterates Sec. 17 of E.O. 229 thus Sec. 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 (DENR) . . .

Section 3, par. (d), thereof defines the term "agrarian dispute" as referring to any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farm workers' associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements. However it may be mentioned in passing that the Regional Trial Courts have not been completely divested of jurisdiction over agrarian reform matters. Section 56 of R.A. 6657 confers "special jurisdiction" on "Special Agrarian Courts," which are Regional Trial Courts designated by this Court at least one (1) branch within each province to act as such. These Regional Trial Courts designated as Special Agrarian Courts have, according to Sec. 57 of the same law, original and exclusive jurisdiction over: (a) all petitions for the determination of just compensation to landowners, and (b) the prosecution of all criminal offenses under the Act. 16 Consequently, there exists an agrarian dispute in the case at bench which is exclusively cognizable by the DARAB. The failure of petitioners to pay back rentals pursuant to the leasehold contract with private respondent is an issue which is clearly beyond the legal competence of the trial court to resolve. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence. 17 Thus, respondent appellate court erred in directing the trial court to assume jurisdiction over this case. At any rate, the present legal battle is "not altogether lost" on the part of private respondent because as this Court was quite emphatic in Quismundo v. Court of Appeals, 18 the resolution by the DAR is to the best advantage of the parties since it is in a better position to resolve agrarian disputes, being the administrative agency presumably possessing the necessary expertise on the matter. Further, the proceedings therein are summary in nature and the department is not bound by the technical rules of procedure and evidence, to the end that agrarian reform disputes and other issues will be adjudicated in a just, expeditious and inexpensive proceeding. 19 WHEREFORE, the decision of respondent Court of Appeals as well as its resolution denying reconsideration is REVERSED and SET ASIDE. The orders of the Regional Trial Court of Tagbilaran City dated 22 August and 28 September 1989 are REINSTATED. Consequently, let the records of this case be immediately transmitted to the appropriate Department of Agrarian Reform Adjudication Board (DARAB) for proper adjudication in accordance with the ruling

in Vda. de Tangub v. Court of Appeals 20 and reiterated in Quismundo v. Court of Appeals, 21 as well as pertinent agrarian laws. SO ORDERED. Padilla, Davide, Jr., Kapunan and Hermosisima, Jr., JJ., concur. Footnotes 1 Rollo, p. 20. 2 Id., p. 24. 3 Rollo, p. 50. 4 Id., p. 49. 5 Id., p. 56. 6 Code of Agrarian Reform. 7 Comprehensive Agrarian Reform Law. 8 This provided the mechanisms for the implementation of the Comprehensive Agrarian Reform Program; Vda. de Tangub v. Court of Appeals, UDK No. 9864, 3 December 1990, 191 SCRA 885. 9 Sec. 13 thereof. 10 G.R. No. 95664, 13 September 1991, 201 SCRA 609; reiterated in Tiongson v. Court of Appeals, G.R. Nos. 8540306, 23 September 1992, 214 SCRA 197. 11 Citing Sec. 30 of E.O. 229 which provides: "All laws, issuances, decrees, or any parts thereof inconsistent with the provisions of this Order are hereby repealed or amended accordingly." 12 Citing sec. 12, pars. (a) and (b), P.D. No. 946. 13 Citing Romero v. Court of Appeals, G.R. No. 59606, 8 January 1987, 147 SCRA 183; Sec. 19, par. 7, B.P. Blg. 129.

14 Citing 83 O.G. (Supp. No. 30) 3422-0-36, 27 July 1987. 15 Quismundo v. Court of Appeals, see Note 10. 16 Vda. de Tangub v. Court of Appeals, see Note 8. 17 Vidad v. Regional Trial Court of Negros Oriental, G.R. No. 98084, 18 October 1993, 227 SCRA 271. 18 See Note 10. 19 Sec. 50, R.A. 6657. 20 See Note 8, p. 4. 21 See Note 10, p. 5.

[G.R. No. 143276. July 20, 2004]

LANDBANK OF THE PHILIPPINES, petitioner, vs. SPOUSES VICENTE BANAL and LEONIDAS ARENAS-BANAL, respondents. DECISION
SANDOVAL-GUTIERREZ, J.:

Spouses Vicente and Leonidas Banal, respondents, are the registered owners of 19.3422 hectares of agricultural land situated in San Felipe, Basud, Camarines Norte covered by Transfer Certificate of Title No. T-6296. A portion of the land consisting of 6.2330 hectares (5.4730 of which is planted to coconut and 0.7600 planted to palay) was compulsorily acquired by the Department of Agrarian Reform (DAR) pursuant to Republic Act (R.A.) No. 6657,[1] as amended, otherwise known as the Comprehensive Agrarian Reform Law of 1988. In accordance with the formula prescribed in DAR Administrative Order No. 6, Series of 1992,[2] as amended by DAR Administrative Order No. 11, Series of 1994,[3] the Land Bank of the Philippines[4] (Landbank), petitioner, made the following valuation of the property:

Acquired property Coconut land Riceland

Area in hectares 5.4730 0.7600

Value P148,675.19 25,243.36 ========== P173,918.55

Respondents rejected the above valuation. Thus, pursuant to Section 16(d) of R.A. 6657, as amended, a summary administrative proceeding was conducted before the Provincial Agrarian Reform Adjudicator (PARAD) to determine the valuation of the land. Eventually, the PARAD rendered its Decision affirming the Landbanks valuation. Dissatisfied with the Decision of the PARAD, respondents filed with the Regional Trial Court (RTC), Branch 40, Daet, Camarines Norte, designated as a Special Agrarian Court, a petition for determination of just compensation, docketed as Civil Case No. 6806. Impleaded as respondents were the DAR and the Landbank. Petitioners therein prayed for a compensation of P100,000.00 per hectare for both coconut land and riceland, or an aggregate amount of P623,000.00. During the pre-trial on September 23, 1998, the parties submitted to the RTC the following admissions of facts: (1) the subject property is governed by the provisions of R.A. 6657, as amended; (2) it was distributed to the farmers-beneficiaries; and (3) the Landbank deposited the provisional compensation based on the valuation made by the DAR.[5]

On the same day after the pre-trial, the court issued an Order dispensing with the hearing and directing the parties to submit their respective memoranda.[6] In its Decision dated February 5, 1999, the trial court computed the just compensation for the coconut land at P657,137.00 and for the riceland at P46,000.00, or a total of P703,137.00, which is beyond respondents valuation of P623,000.00. The court further awarded compounded interest at P79,732.00 in cash. The dispositive portion of the Decision reads:

WHEREFORE, judgment is hereby rendered as follows: 1. Ordering respondent Landbank to pay the petitioners, the spouses Dr. Vicente Banal and Leonidas Arenas-Banal, for the 5.4730 hectares of coconut land the sum of SIX HUNDRED FIFTY-SEVEN THOUSAND ONE HUNDRED THIRTY-SEVEN PESOS (P657,137.00) in cash and in bonds in the proportion provided by law; Ordering respondent Landbank to pay the petitioners for the .7600 hectares of riceland the sum of FORTY-SIX THOUSAND PESOS (P46,000.00) in cash and in bonds in the proportion provided by law; and Ordering respondent Landbank to pay the petitioners the sum of SEVENTY-NINE THOUSAND SEVEN HUNDRED THIRTY-TWO PESOS (P79,732.00) as the compounded interest in cash.
[7]

2.

3.

IT IS SO ORDERED.

In determining the valuation of the land, the trial court based the same on the facts established in another case pending before it (Civil Case No. 6679, Luz Rodriguez vs. DAR, et al.), using the following formula:

For the coconut land 1. 2. Average Gross Production (AGP) x .70 x 9.70 (price per kilo of coconut) = Net Income (NI) NI / 6% = Price Per Hectare (PPH) (applying the capitalization formula under Republic Act No. 3844 )
[8]

For the riceland 1. 2.5 x AGP x Government Support Price (GSP) = Land Value (LV) or PPH (using the formula under Executive Order No. 228 )
[9]

2.

AGP x 6% compounded annually for 26 years x GSP = Interest (pursuant to DAR AO No. 13, Series of 1994)

Forthwith, the Landbank filed with the Court of Appeals a petition for review, docketed as CA-G.R. SP No. 52163. On March 20, 2000, the Appellate Court rendered a Decision[10] affirming in toto the judgment of the trial court. The Landbanks motion for reconsideration was likewise denied.[11] Hence, this petition for review on certiorari. The fundamental issue for our resolution is whether the Court of Appeals erred in sustaining the trial courts valuation of the land. As earlier mentioned, there was no trial on the merits. To begin with, under Section 1 of Executive Order No. 405 (1990), the Landbank is charged primarily with the determination of the land valuation and compensation for all private lands suitable for agriculture under the Voluntary Offer to Sell or Compulsory Acquisition arrangement For its part, the DAR relies on the determination of the land valuation and compensation by the Landbank.[12] Based on the Landbanks valuation of the land, the DAR makes an offer to the landowner.[13] If the landowner accepts the offer, the Landbank shall pay him the purchase price of the land after he executes and delivers a deed of transfer and surrenders the certificate of title in favor of the government.[14] In case the landowner rejects the offer or fails to reply thereto, the DAR adjudicator[15] conducts summary administrative proceedings to determine the compensation for the land by requiring the landowner, the Landbank and other interested parties to submit evidence as to the just compensation for the land.[16] These functions by the DAR are in accordance with its quasi-judicial powers under Section 50 of R.A. 6657, as amended, which provides:

SEC. 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 (DENR). x x x.
A party who disagrees with the decision of the DAR adjudicator may bring the matter to the RTC designated as a Special Agrarian Court[17]for final determination of just compensation.[18] In the proceedings before the RTC, it is mandated to apply the Rules of Court[19] and, on its own initiative or at the instance of any of the parties, appoint one or more commissioners to examine, investigate and ascertain facts relevant to the dispute,

including the valuation of properties, and to file a written report thereof x x x.[20] In determining just compensation, the RTC is required to consider several factors enumerated in Section 17 of R.A. 6657, as amended, thus:

Sec. 17. Determination of Just Compensation. In determining just compensation, the cost of acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment made by government assessors shall be considered. The social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property, as well as the non-payment of taxes or loans secured from any government financing institution on the said land, shall be considered as additional factors to determine its valuation.
These factors have been translated into a basic formula in DAR Administrative Order No. 6, Series of 1992, as amended by DAR Administrative Order No. 11, Series of 1994, issued pursuant to the DARs rule-making power to carry out the object and purposes of R.A. 6657, as amended.[21] The formula stated in DAR Administrative Order No. 6, as amended, is as follows:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1) LV = Land Value CNI = Capitalized Net Income CS = Comparable Sales MV = Market Value per Tax Declaration The above formula shall be used if all the three factors are present, relevant and applicable. A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be: LV = (CNI x 0.9) + (MV x 0.1) A.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall be: LV = (CS x 0.9) + (MV x 0.1) A.3 When both the CS and CNI are not present and only MV is applicable, the formula shall be: LV = MV x 2
Here, the RTC failed to observe the basic rules of procedure and the fundamental requirements in determining just compensation for the property. Firstly, it dispensed

with the hearing and merely ordered the parties to submit their respective memoranda. Such action is grossly erroneous since the determination of just compensation involves the examination of the following factors specified in Section 17 of R.A. 6657, as amended:

1. 2. 3. 4. 5. 6. 7.

the cost of the acquisition of the land; the current value of like properties; its nature, actual use and income; the sworn valuation by the owner; the tax declarations; the assessment made by government assessors; the social and economic benefits contributed by the farmers and the farmworkers and by the government to the property; and the non-payment of taxes or loans secured from any government financing institution on the said land, if any.

Obviously, these factors involve factual matters which can be established only during a hearing wherein the contending parties present their respective evidence. In fact, to underscore the intricate nature of determining the valuation of the land, Section 58 of the same law even authorizes the Special Agrarian Courts to appoint commissioners for such purpose. Secondly, the RTC, in concluding that the valuation of respondents property is P703,137.00, merely took judicial notice of the average production figures in the Rodriguez case pending before it and applied the same to this case without conducting a hearing and worse, without the knowledge or consent of the parties, thus:

x x x. In the case x x x of the coconut portion of the land 5.4730 hectares, defendants determined the average gross production per year at 506.95 kilos only, but in the very recent case of Luz Rodriguez vs. DAR, et al., filed and decided by this court in Civil Case No. 6679 also for just compensation for coconut lands and Riceland situated at Basud, Camarines Norte wherein also the lands in the aboveentitled case are situated, the value fixed therein was 1,061.52 kilos per annum per hectare for coconut land and the price per kilo is P8.82, but in the instant case the price per kilo is P9.70. In the present case, we consider 506.95 kilos average gross production per year per hectare to be very low considering that farm practice for coconut lands is harvest every forty-five days. We cannot also comprehended why in the Rodriguez case and in this case there is a great variance in average production per year when in the two cases the lands are both coconut lands and in the same place of

Basud, Camarines Norte. We believe that it is more fair to adapt the 1,061.52 kilos per hectare per year as average gross production. In the Rodriguez case, the defendants fixed the average gross production of palay at 3,000 kilos or 60 cavans per year. The court is also constrained to apply this yearly palay production in the Rodriguez case to the case at bar. xxx xxx xxx

As shown in the Memorandum of Landbank in this case, the area of the coconut land taken under CARP is 5.4730 hectares. But as already noted, the average gross production a year of 506.96 kilos per hectare fixed by Landbank is too low as compared to the Rodriguez case which was 1,061 kilos when the coconut land in both cases are in the same town of Basud, Camarines Norte, compelling this court then to adapt 1,061 kilos as the average gross production a year of the coconut land in this case. We have to apply also the price of P9.70 per kilo as this is the value that Landbank fixed for this case. The net income of the coconut land is equal to 70% of the gross income. So, the net income of the coconut land is 1,061 x .70 x 9.70 equals P7,204.19 per hectare. Applying the capitalization formula of R.A. 3844 to the net income of P7,204.19 divided by 6%, the legal rate of interest, equals P120,069.00 per hectare. Therefore, the just compensation for the 5.4730 hectares is P657,137.00. The Riceland taken under Presidential Decree No. 27 as of October 21, 1972 has an area of .7600 hectare. If in the Rodriguez case the Landbank fixed the average gross production of 3000 kilos or 60 cavans of palay per year, then the .7600 hectare in this case would be 46 cavans. The value of the riceland therefore in this case is 46 cavans x 2.5 x P400.00 equals P46,000.00.
[22]

PARC Resolution 94-24-1 of 25 October 1994, implemented by DAR AO 13, granted interest on the compensation at 6% compounded annually. The compounded interest on the 46 cavans for 26 years is 199.33 cavans. At P400.00 per cavan, the value of the compounded interest is P79,732.00. (emphasis added)
[23]

Well-settled is the rule that courts are not authorized to take judicial notice of contents of the records of other cases even when said cases have been tried or pending in the same court or before the same judge.[24] They may only do so in absence of objection and with the knowledge of the opposing party,[25] which are obtaining here.

the are the not

Furthermore, as earlier stated, the Rules of Court shall apply to all proceedings before the Special Agrarian Courts. In this regard, Section 3, Rule 129 of the Revised

Rules on Evidence is explicit on the necessity of a hearing before a court takes judicial notice of a certain matter, thus:

SEC. 3. Judicial notice, when hearing necessary. During the trial, the court, on its own initiative, or on request of a party, may announce its intention to take judicial notice of any matter and allow the parties to be heard thereon. After the trial, and before judgment or on appeal, the proper court, on its own initiative or on request of a party, may take judicial notice of any matter and allow the parties to be heard thereon if such matter is decisive of a material issue in the case. (emphasis added)
The RTC failed to observe the above provisions. Lastly, the RTC erred in applying the formula prescribed under Executive Order (EO) No. 228[26] and R.A. No. 3844,[27] as amended, in determining the valuation of the property; and in granting compounded interest pursuant to DAR Administrative Order No. 13, Series of 1994.[28]It must be stressed that EO No. 228 covers private agricultural lands primarily devoted to rice and corn, while R.A. 3844 governs agricultural leasehold relation between the person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally cultivates the same.[29] Here, the land is planted to coconut and rice and does not involve agricultural leasehold relation. What the trial court should have applied is the formula in DAR Administrative Order No. 6, as amended by DAR Administrative Order No. 11 discussed earlier. As regards the award of compounded interest, suffice it to state that DAR Administrative Order No. 13, Series of 1994 does not apply to the subject land but to those lands taken under Presidential Decree No. 27[30] and Executive Order No. 228 whose owners have not been compensated. In this case, the property is covered by R.A. 6657, as amended, and respondents have been paid the provisional compensation thereof, as stipulated during the pre-trial. While the determination of just compensation involves the exercise of judicial discretion, however, such discretion must be discharged within the bounds of the law. Here, the RTC wantonly disregarded R.A. 6657, as amended, and its implementing rules and regulations. (DAR Administrative Order No. 6, as amended by DAR Administrative Order No.11). In sum, we find that the Court of Appeals and the RTC erred in determining the valuation of the subject land. Thus, we deem it proper to remand this case to the RTC for trial on the merits wherein the parties may present their respective evidence. In determining the valuation of the subject property, the trial court shall consider the factors provided under Section 17 of R.A. 6657, as amended, mentioned earlier. The formula prescribed by the DAR in Administrative Order No. 6, Series of 1992, as amended by DAR Administrative Order No. 11, Series of 1994, shall be used in the valuation of the land. Furthermore, upon its own initiative, or at the instance of any of

the parties, the trial court may appoint one or more commissioners to examine, investigate and ascertain facts relevant to the dispute. WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated March 20, 2000 in CA-G.R. SP No. 52163 is REVERSED. Civil Case No. 6806 is REMANDED to the RTC, Branch 40, Daet, Camarines Norte, for trial on the merits with dispatch. The trial judge is directed to observe strictly the procedures specified above in determining the proper valuation of the subject property. SO ORDERED. Panganiban, (Chairman), and Carpio-Morales, JJ., concur. Corona, J., on leave.

[1]

Effective June 15, 1988. Rules and Regulations Amending the Valuation of Lands Voluntarily Offered and Compulsorily Acquired As Provided For Under Administrative Order No. 17, Series of 1989, As Amended, Issued Pursuant to Republic Act No. 6657. Revising the Rules and Regulations Covering the Valuation of Lands Voluntarily Offered or Compulsorily Acquired as Embodied in Administrative Order No. 6, Series of 1992. Executive Order No. 405, dated June 14, 1990, vests the Land Bank of the Philippines the primary responsibility to determine the land valuation and compensation for all private lands covered by R.A. 6657, as amended. See Philippine Veterans Bank vs. Court of Appeals, G.R. No. 132767, January 18, 2000, 322 SCRA 139, 145. Pre-trial Order, Rollo at 76-77. Rollo at 25, 82. RTC Decision at 7, id. at 68. Code of Agrarian Reforms of the Philippines. Entitled Declaring Full Land Ownership to Qualified Farmer Beneficiaries Covered by Presidential Decree No. 27, Determining the Value of Remaining Unvalued Rice and Corn Lands Subject of P.D. No. 27, and Providing for the Manner of Payment by the Farmer Beneficiary and Mode of Compensation to the Landowner, dated July 17, 1987. Penned by Associate Justice Rodrigo V. Cosico and concurred by Associate Justices Ramon Mabutas, Jr. and Delilah Vidallon-Magtolis. Resolution dated May 16, 2000, Rollo at 60. Sec. 1, Executive Order No. 405 (1990); Republic vs. Court of Appeals, G.R. No. 122256, October 30, 1996, 263 SCRA 758 and Philippine Veterans Bank vs. Court of Appeals, supra. Sec. 16(a) of R.A. 6657, as amended. Sec. 16(c), id. The Provincial Agrarian Reform Adjudicator (PARAD) and the Regional Agrarian Reform Adjudicator (RARAD), depending on the value of the land within their respective territorial jurisdiction (Rule II, Sec. 2, DARAB Rules of Procedure).

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]

[13]

[14]

[15]

[16]

Sec. 16(d) of R.A. 6657, as amended; Philippine Veterans Bank vs. Court of Appeals, supra. Sec. 56, id. Sec. 16(f), in relation to Sec. 57, id. Sec. 57, id. Sec. 58, id. Sec. 49. Rules and Regulations. The PARC and the DAR shall have the power to issue rules and regulations, whether substantive or procedural, to carry out the object and purposes of this Act. Said rules shall take effect ten (10) days after publication in two (2) national newspapers of general circulation. The formula used by the trial court in its valuation of the Riceland is taken from Executive Order No. 228. Section 2 of the said EO states that (t)he average gross production per hectare shall be multiplied by two and half (2.5), the product of which shall be multiplied by Thirty-Five Pesos (P35.00), the government support price for one cavan of 50 kilos of corn on October 21, 1972, and the amount arrived at shall be the value of the rice and corn land, as the case may be, for the purpose of determining its cost to the farmer and compensation to the landowner. However, instead of using the government support price of P35.00, the trial court usedP400.00, the then current price per cavan of palay (RTC Decision, p. 3, Rollo, p. 64). Rollo at 67. BPI-Family Savings Bank, Inc. vs. Court of Appeals, G.R. No. 122480, April 12, 2000, 330 SCRA 507, 517; People vs. Kulais, G.R. Nos. 100901-08, July 16, 1998, 292 SCRA 551, 565; Occidental Land Transportation Co., Inc. vs. Court of Appeals, G.R. No. 96721, March 19, 1993, 220 SCRA 167, 175. People vs. Hernandez, 328 Phil. 1123, 1146 (1996), citing Tabuena vs. Court of Appeals, G.R. No. 85423, May 6, 1991, 196 SCRA 650 and U.S. vs. Claveria, 29 Phil. 527 (1969). Supra. Supra. Rules and Regulations Governing the Grant of Increment of Six Percent (6%) Yearly Interest Compounded Annually on Lands Covered by Presidential Decree No. 27 and Executive Order No. 228. Sec. 6, RA 3844, as amended. Entitled Decreeing the Emancipation of Tenants from the Bondage of the Soil Transferring To Them The Ownership of the Land They Till and Providing the Instruments and Mechanism Therefor, dated October 21, 1972.

[17]

[18]

[19]

[20]

[21]

[22]

[23]

[24]

[25]

[26]

[27]

[28]

[29]

[30]

[G. R. No. 140164. September 6, 2002]

DIONISIA L. REYES, petitioner, vs. RICARDO L. REYES, LAZARO L. REYES, NARCISO L. REYES and MARCELO L. REYES, respondents. DECISION
QUISUMBING, J.:

This petition assails the decision[1] dated September 20, 1999 of the Court of Appeals in CA-G.R. SP No. 47033, which reversed that of the Department of Agrarian Reform Adjudication Board (DARAB-Central Office) in DARAB Case No. 3625. The DARAB-Central Office had affirmed the ruling of the Provincial Adjudicator, DARABRegion III in Case No. 249-Bul-91, declaring petitioner Dionisia L. Reyes the lawful agricultural lessee of a parcel of land in Bulacan owned by the late Marciano Castro, and thus she is entitled to security of tenure. After a thorough review of the records including the memoranda of the parties, we find this petition meritorious. The parties are among the nine children of the late Felizardo J. Reyes, who prior to his death was the agricultural tenant of the land subject of this uncivil dispute over tenancy rights. The core question in this petition is, who among the parties should be considered the lawful and rightful tenant of the Castro property? The DARAB ruled in favor of petitioner, the appellate court held otherwise. As disclosed by the record, the instant case stemmed from a complaint for reinstatement with damages filed with the DARAB Region III Office by Dionisia Reyes on April 22, 1991 against her four younger brothers, herein respondents. She alleged that her father, the late Felizardo Reyes, was the tenant of a two-hectare agricultural lot in Parulan, Plaridel, Bulacan, owned by Marciano Castro. After her fathers death on February 17, 1989, she and Marciano Castro, through the latters son and attorney-infact, Ramon R. Castro, executed a leasehold contract naming her as the agricultural lessee of the property. However, sometime before the start of the planting of the dry season crop in 1989, herein respondents forcibly entered the area and occupied a onehectare portion of the property. They claimed to be the tenants thereof. Respondents then paid rent to the Castros overseer, Armando Duran, and continued to occupy half of the property to petitioners damage and prejudice. In their answer, respondents denied Dionisias claim that she was the bona fide leasehold tenant. They claimed that they inherited the lease rights to the property from their deceased father. Respondents pointed out that petitioner was a woman who could not possibly work or till the land by herself. They likewise averred that they were the ones actually cultivating the portion occupied by them. Hence, petitioners claim to be the lawful agricultural lessee had no basis, either in fact or in law.

After attempts to amicably solve the dispute failed, the DARAB Provincial Adjudicator (PARAD) ruled for petitioner, thus: WHEREFORE, premises considered, judgment is hereby rendered as follows: 1. Ordering respondents Ricardo Reyes, Lazaro Reyes, Narciso Reyes and Marcelo Reyes to respect the tenurial status of herein petitioner Dionisia Reyes over the disputed landholding; 2. Ordering respondents to return the one-hectare portion which had been taken forcibly and to cease and desist from molesting, interfering, occupying petitioner s peaceful possession over the disputed landholding; 3. No pronouncement as to costs. SO ORDERED.[2] Respondents then seasonably appealed the PARADs judgment to the DARABCentral Office. In its decision of September 1, 1997, however, the DARAB-Central Office disposed of the appeal as follows: WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack of merit and the subject decision AFFIRMED. SO ORDERED.[3] In affirming the ruling of the PARAD, the DARAB Central Office found that pursuant to the agricultural lease contract entered into between Dionisia and the Castros, the former was designated by the latter to substitute the late Felizardo Reyes as tenant. It held: When an agricultural tenant dies, the choice for the substitute tenant is given to the land owner. It is the latter who has the option to place a new tenant of his choice on the land. That choice is, however, not absolute as it shall be exercised from among the surviving compulsory heirs of the deceased tenant. Hence, the surviving heirs cannot preempt that choice by deciding among themselves who shall take-over the cultivation or opting to cultivate the land collectively. It is only when the landowner fails to exercise such right, or waive the same, that the survivors may agree among themselves regarding the cultivation. The law is specific on the matter as so provided in Section 9, Republic Act No. 3844[4] xxx Neither is their argument that Plaintiff-Appellee, being a woman, is not capable of discharging the demands of farming, valid. This Board finds said argument anachronistic with the changing times of great awareness of the potentials of women.

Women today are found manning our commerce and industry, and agriculture is no exception.[5] In accordance with Section 54 of the Comprehensive Agrarian Reform Law (R. A. No. 6657),[6] respondents elevated the case to the Court of Appeals, which docketed their appeal as CA-G.R. SP No. 47033. On appeal, respondents changed their theory. They abandoned their argument that they had inherited the tenancy rights of their late father and instead postulated that an implied tenancy had been created when the Castros overseer accepted rentals totaling 40 cavans of palay from them on behalf of the owner. As earlier stated, the appellate court reversed the decision of the DARABCentral Office. The decretal portion of its decision reads: WHEREFORE, premises considered, the petition is hereby GRANTED. The respondent is ordered to respect the tenurial status of petitioners over the one (1) hectare portion of the two (2) hectare-property of Ramon R. Castro situated in Barangay Parulan, Plaridel, Bulacan. No costs. SO ORDERED.[7] The Court of Appeals held that an implied tenancy existed between herein respondents and the landowner because: In point of time, Ricardo Reyes actual possession and cultivation of the subject property came earlier than the possession of respondent Dionisia Reyes by virtue of the said leasehold contract executed on November 6, 1989. Further, Armando Duran testified that he served as the overseer of the subject property from the period 1967 to 1993, since the time of Antonio Castro, after which, during the time of Marciano Castro up to the time of the administration of the subject property by Ramon R. Castro who inherited the same (TSN July 12, 1994, pp. 3, 9; Rollo, pp. 98, 104). In effect, Armando Duran was still the overseer of the subject property after the death of Felizardo Reyes on February 17, 1989 and was still the overseer of the subject property when he allowed petitioners to continue the tenancy thereof left by the late Felizardo. The fact that Armando Duran was the overseer for a period of sixteen (16) years, the petitioners were made to believe of his authority from the Castro family relative to the administration of the subject property. On this account, the acquiescence of Duran in allowing or permitting petitioner Ricardo Reyes to posses and cultivate of the one (1) hectare subject property immediately after the death of Felizardo is binding to the Castro family including Ramon Castro, the new landowner.[8] The appellate court then went on to rule that by virtue of this implied tenancy created in favor of herein respondents, the leasehold contract between the Castros and petitioner could be made effective only on the other one - hectare portion of the disputed property. Hence, the instant petition, anchored on the following assignment of errors:

A.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN DISREGARDING THE SUBSTANTIAL EVIDENCE RULE BY OVERTURNING THE BINDING FINDINGS OF FACT OF THE DARAB PROVINCIAL ADJUDICATOR AND THE NATIONAL DARAB ITSELF.
B.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN INFERENCE, THAT HEREIN RESPONDENTS WERE MADE TO BELIEVE THAT THE OVERSEER HAD AUTHORITY FROM THE LANDOWNER TO INSTITUTE TENANT/S FOR THE LAND, UPON THE BARE PREMISE THAT THE OVERSEER WAS SUCH FOR 16 YEARS.
C.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN INFERENCE, THAT THE ACQUIESCENCE OF THE OVERSEER TO RICARDO REYES POSSESSION AND CULTIVATION OF THE 1-HECTARE PORTION OF THE LAND IMMEDIATELY AFTER THE DEATH OF THE ORIGINAL TENANT IS BINDING ON THE LANDOWNER.
D.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN INFERENCE THAT AN IMPLIED TENANCY WAS ESTABLISHED BETWEEN THE LANDOWNER AND HEREIN RESPONDENTS RICARDO L. REYES, ET AL., UPON THE BARE PREMISE THAT THE OVERSEER HAD ALLOWED THEM TO CONTINUE THE LEASEHOLD RELATION LEFT BY THE ORIGINAL TENANT AS TO THE 1HECTARE PORTION OF THE LAND.
E.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN INFERENCE, THAT HEREIN PETITIONER DIONISIA L. REYES CANNOT BE CONSIDERED A TENANT EVEN IF SO DESIGNATED IN A WRITTEN CONTRACT, UPON THE BARE PREMISE THAT THE 1-HECTARE PORTION OF THE LAND WAS IN THE ACTUAL POSSESSION OF HEREIN RESPONDENTS RICARDO L. REYES, ET AL.
F.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN INFERENCE, THAT HEREIN RESPONDENTS RICARDO L. REYES, ET AL. HAVE SQUARELY MET

THE REQUIREMENTS OF THE LAW FOR THE EXISTENCE OF A TENANCY RELATIONSHIP BETWEEN THEM AND THE LANDOWNER.[9]

The grounds relied upon by petitioner can be reduced to only two issues, to wit: (1) Did the Court of Appeals err in disregarding the substantial evidence rule with respect to the DARAB findings? (2) Did the appellate court commit a reversible error of law in finding that respondents had satisfactorily met the requirements of a tenancy relationship? At the outset, respondents are reminded of the time-honored rule that in the interests of fair play and substantial justice, a party is barred from changing his theory of the case on appeal. On the first issue, petitioner pleads that in agrarian cases, the power of appellate review is limited to questions of law and findings of fact of the DARAB, when supported by substantial evidence, shall be binding upon the Court of Appeals. Hence, the appellate court cannot make its own findings of fact and substitute the same in lieu of the findings of the DARAB, unless there was grave abuse of discretion on the part of the DARAB. Consequently, it was error for the appellate court to make its own finding that respondent Ricardo Reyes assumed possession and cultivation of the land from the time Felizardo died. Petitioner points out that this finding by the Court of Appeals contradicted the finding of the DARAB that petitioner Dionisia Reyes took over the cultivation of the property after their fathers death. Petitioner further stresses that the finding by the appellate court of Ricardos previous possession runs counter to the finding of the DARAB that Ricardo was a mere usurper who forcibly took over the disputed one-hectare portion. The appellate court also erred in finding that Ricardo and other respondents were made to believe that overseer Duran had authority to bind the Castro family to allow them to possess and cultivate the lot. This is because the DARAB found that Durans authority was limited only to collecting rentals from tenants duly appointed by the Castros, and Duran was in bad faith in accepting two rentals from Ricardo and his co-respondents. Respondents argue that Duran being the overseer of the landowner is an extension of the latters personality as an agent of the Castros. Ramon Castro, who succeeded after Marciano Castros death, in allowing his overseer to accept agricultural rentals from respondents is now estopped from denying that the latter are his tenants. Moreover, they should be given the opportunity to work the land since this is after all what their late father, Felizardo, wanted before his demise. In Malate vs. Court of Appeals, we held that: In appeals in agrarian cases, the only function required of the Court of Appeals is to determine whether the findings of fact of the Court of Agrarian Relations are supported by substantial evidence. And substantial evidence has been defined to be such relevant evidence as a reasonable mind might accept as adequate to support a conclusion and its absence is not shown by stressing that there is contrary evidence on record, direct or

circumstantial, and where the findings of fact of the agrarian court are supported by substantial evidence, such findings are conclusive and binding on the appellate court.[10] Stated differently, the appellate court cannot make its own findings of fact and substitute the same for the findings of fact of the DARAB. A perusal of the assailed decision clearly shows that nowhere did the Court of Appeals rule that the findings of fact of the DARAB Region III Provincial Adjudicator or the DARAB-Central Office were unsupported by substantial evidence. Nor did the appellate court hold that said findings were made with grave abuse of discretion on the part of the agrarian quasi-judicial agencies. An examination of the record categorically shows that the findings of fact of the DARAB were supported by substantial evidence. Perforce, the Malate ruling must apply to the instant case. The finding of the DARAB that petitioner, by virtue of the contract of agricultural leasehold entered into between her and the Castros, is the substitute tenant of the latter in lieu of her deceased father, is binding upon the appellate court and this Court. Equally conclusive upon the court a quo and this Court is the finding by the DARAB that respondents were mere usurpers who failed to present any proof as to the existence of a tenancy relationship between them and the Castro family. On the second issue, the appellate court found that an implied tenancy was created when Duran, the ex-overseer of the Castros, acquiesced in the taking over and cultivation of a one-hectare portion of the land. It went on to rule that the Castros were estopped from denying this implied tenancy in view of the fact that they had allowed Duran, as their agent, to accept rentals from respondents. Before us, petitioner asserts that Duran cannot be deemed an implied agent of the Castros under Article 1869 of the Civil Code[11] since there are neither acts nor omissions of either Marciano Castro or Ramon Castro from which to imply an agency. She also submits that there is no estoppel to bind the Castros to the acts of Duran, since the former had no knowledge of the assumption by Duran of their authority. Furthermore, the landowners made no false representations or deception vis--vis respondents. Hence, the elements of estoppel are not present in this instance. Respondents aver that an implied tenancy existed in view of the fact that Duran was undisputably the overseer of the landowner. They add that Duran, as overseer, accepted 20 cavans of palay as rentals on October 17, 1990 and another 20 cavans on April 1, 1991 from Ricardo. Receipt of these rentals was properly documented.[12] Duran then delivered the rentals to Elena Castro, sister of Ramon, who in turn delivered the rentals to the latter. An implied tenancy was created between respondents and Ramon, said the respondents, since Duran as overseer of the landholding was the extension of the personality of the landowner. They aver that in effect, a delivery of rentals to Duran was a delivery to an agent of the landowner. They argue that having accepted the rental payments made to his agent, Ramon is now estopped from denying the existence of an implied tenancy between him and respondents. We find respondents contentions far from persuasive.

The present dispute involves an agricultural leasehold. The governing law is R.A. No. 3844,[13] which, except for Section 35 thereof, was not specifically repealed by the passage of the Comprehensive Agrarian Reform Law of 1988 (R.A. No. 6657), but was intended to have suppletory effect to the latter law.[14] Under R.A. 3844, two modes are provided for in the establishment of an agricultural leasehold relation: (1) by operation of law in accordance with Section 4 of the said act; or (2) by oral or written agreement, either express or implied.[15] By operation of law simply means the abolition of the agricultural share tenancy system and the conversion of share tenancy relations into leasehold relations. The other method is the agricultural leasehold contract, which may either be oral or in writing. In the instant case, it is not disputed that an agricultural leasehold contract was entered into between petitioner and Ramon Castro. Respondents, however, insist that an agricultural leasehold contract over a one-hectare portion of the landholding arose as a result of the actions of Ramons overseer, who must be viewed as the latters agent. They conclude that because of this implied leasehold, the application of the contract between petitioner and the landowner should be limited to the remaining portion of the property. Respondents reasoning is flawed. While undoubtedly Duran was an agent of Ramon, he was not a general agent of the latter with respect to the landholding. The record shows that as overseer, Durans duties and responsibilities were limited to issu(ing) receipt(s), selling mangoes and bamboo trees and all other things saleable.[16] Thus, by his own admission, Duran was a special agent under Article 1876 of the Civil Code.[17]Durans duties and responsibilities as a special agent do not include the acceptance of rentals from persons other than the tenant so designated by the landowner. Durans authority as a special agent likewise excludes the power to appoint tenants or successor-tenants. Clearly, Duran acted beyond the limits of his authority as an agent. We cannot agree with the Court of Appeals did that since Duran had been the overseer of the Castros for 16 years, he thereby made respondents believe he had full authority from the Castro family relative to the administration of the subject property. Regardless of the number of years that Duran had been the overseer of the Castros, there is absolutely no showing that he was ever authorized to appoint tenants or successor-tenants for the Castros, nor to accept rentals from the persons he would appoint. Absent substantial evidence to show Durans authority from the Castros to give consent to the creation of a tenancy relationship, his actions could not give rise to an implied tenancy. In fact, Duran admitted that he was aware of the existence of the leasehold contract between petitioner and the Castros, naming the former as the successor-tenant to the property.[18] Since an implied tenancy between the same landowners and respondents is incompatible with this express and written leasehold contract and given the absolute lack of substantial evidence to support the existence of an implied tenancy, the express tenancy contract must be maintained. Respondents contend, however, that Ramon Castro, having received the 40 cavans from Duran, is now estopped to deny the existence of an implied tenancy. We find nothing in the records, however, to support respondents stance. Duran testified that he did not deliver the palay rentals to Ramon, but to his sister, who in turn told him that she had forwarded the palay to Ramon.[19] Duran had no personal knowledge that Ramon received the rentals which the former had allegedly delivered to the latters sister. His

testimony with respect to the receipt by Ramon of the rentals is hearsay and has no probative value. The receipts issued to respondents do not bear the name and signature of Ramon Castro. Given these circumstances, Ramon Castro cannot be deemed estopped from denying the existence of a tenancy relationship between him and respondents. One final note. Respondents original stance before the DARAB that they had inherited or succeeded to the tenancy rights of their late father is likewise erroneous. As correctly found by the DARAB: Defendants-Appellants should not confuse the law on succession provided for in the Civil Code of the Philippines with succession in agrarian cases. In the former, (the) statute spreads the estate of the deceased throughout his heirs; while in agrarian laws, the security of tenure of the deceased tenant shall pass on to only one (1) heir in the manner provided for in Section 9 [20] We are thus constrained to conclude that respondents original stance as well as new theory of implied tenancy is without merit. WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 47033 is REVERSED and SET ASIDE. The judgment of the DARAB in DARAB Case No. 3625 affirming the decision of the Provincial Adjudicator of DARAB Region III in DARAB Case No. 249-Bul-91 is hereby REINSTATED. No pronouncement as to costs. SO ORDERED. Bellosillo, (Chairman), Mendoza, and Austria-Martinez, JJ., concur.

[1]

Rollo, pp. 104-110, penned by Associate Justice B.A. Adefuin-Dela Cruz and concurred in by Associate Justices Fermin A. Martin, Jr. and Presbitero J. Velasco, Jr. CA Rollo, p. 42. Id. at 31.3

[2]

[3]

SEC. 9. Agricultural Leasehold Relation Not Extinguished by Death or Incapacity of the Parties. - In case of death or permanent incapacity of the agricultural lessee to work his landholding, the leasehold shall continue between the agricultural lessor and the person who can cultivate the landholding personally, chosen by the agricultural lessor within one month from such death or permanent incapacity, from among the following: (a) the surviving spouse; (b) the eldest direct descendant by consanguinity; or (c) the next eldest descendant or descendants in the order of their age: Provided, That in case the death or permanent incapacity of the agricultural lessee occurs during the agricultural year, such choice shall be exercised at the end of that agricultural year: Provided, further, That in the event the agricultural lessor fails to exercise his choice within the periods herein provided, the priority shall be in accordance with the order herein established. In case of death or permanent incapacity of the agricultural lessor, the leasehold shall bind his legal heirs.

[4]

[5]

Rollo, pp. 57-58.

[6]

SEC. 54. Certiorari. Any decision, order, award or ruling of the DAR on any agrarian dispute or on any matter pertaining to the application, implementation, enforcement, or interpretation of this Act and other pertinent laws on agrarian reform may be brought to the Court of Appeals by certiorari except as otherwise provided in this Act within fifteen (15) days from receipt of a copy thereof. The findings of fact of the DAR shall be final and conclusive if based on substantial evidence.

[7]

Supra, note 5 at 110. Id. at 107-108. Id. at 130-132. 218 SCRA 572, 576 (1993), citing Heirs of E.B. Roxas, Inc., et al. vs. Tolentino, et al., 167 SCRA 334 (1988), Bagsican vs. Court of Appeals, et al., 141 SCRA 226 (1986).

[8]

[9]

[10]

[11]

ART. 1869. Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. xxx
[12]

CA Rollo, p. 114, Exhibit 2 and sub-markings. Entitled An Act To Ordain The Agricultural Land Reform Code And To Institute Land Reforms In The Philippines, Including The Abolition of Tenancy And The Channeling Of Capital Into Industry, Provide For The Necessary Implementing Agencies, Appropriate Funds Therefor And For Other Purposes. Rep. Act. No. 6657, Sec. 75. Suppletory Application of Existing Legislation. The provisions of Republic Act No. 3844 as amended, Presidential Decree Nos. 27 and 266 as amended, Executive Order Nos. 228 and 229, both Series of 1987; and other laws not inconsistent with this Act shall have suppletory effect. Rep. Act. 3844, Sec. 5. Establishment of Agricultural Leasehold Relation. The agricultural leasehold relation shall be established by operation of law in accordance with Section four of this Code and, in other case, either orally or in writing, expressly or impliedly. CA Rollo, p. 99. ART. 1876. An agency is either general or special.

[13]

[14]

[15]

[16]

[17]

The former comprises all the business of the principal. The latter, one or more specific transactions.
[18]

Supra, note 16 at 104-105. Id. at 110. Id. at 30.

[19]

[20]

[G.R. No. 143275. March 20, 2003]

LAND BANK OF THE PHILIPPINES, petitioner, vs. ARLENE DE LEON and BERNARDO DE LEON,respondents. RESOLUTION
CORONA, J.:

Before us are the motion for reconsideration dated October 16, 2002 and supplement to the motion for reconsideration dated November 11, 2002 filed by movantpetitioner Land Bank of the Philippines (LBP, for brevity) seeking a reversal of this Courts Decision[1] dated September 10, 2002 which denied LBPs petition for review. Herein respondent spouses Arlene and Bernardo de Leon filed a petition to fix the just compensation of a parcel of land[2] before the Regional Trial Court of Tarlac, Branch 63, acting as a Special Agrarian Court. On December 19, 1997, the agrarian court rendered summary judgment fixing the compensation of the subject property as follows: (1) P1,260,000 for the 16.69 hectares of riceland and (2) P2,957,250 for the 30.4160 hectares of sugarland. The Department of Agrarian Reform (DAR, for brevity) and LBP both filed separate appeals using different modes. DAR filed a petition for review while LBP interposed an ordinary appeal by filing a notice of appeal. DARs petition for review[3] was assigned to the Special Third Division of the Court of Appeals while LBPs ordinary appeal[4] was assigned to the Fourth Division of the same court. On November 6, 1998, the appellate courts Special Third Division rendered a decision in the petition for review filed by DAR, the dispositive portion of which reads:

WHEREFORE, premises considered, the petition for review is GIVEN DUE COURSE. The decision dated February 9, 1998 is partially reconsidered. The trial court is ordered to recompute the compensation based on the selling price of palay at 213.00 per cavan. Petitioner is ordered to pay legal interest at 6% of the compensation so fixed from 1990 until full payment is made by the government.
[5]

Meanwhile, on February 15, 2000, the appellate courts Fourth Division dismissed LBPs ordinary appeal primarily holding that LBP availed of the wrong mode of appeal.[6] LBP filed a motion for reconsideration but the same was denied. On July 14, 2000, LBP filed before this Court a petition for review of the decision of the Court of Appeals. On September 10, 2002, this Court rendered a Decision, the dispositive portion of which reads:

WHEREFORE, the appealed RESOLUTIONS, dated February 15, 2000 and May 22, 2000, respectively, of the Court of Appeals are hereby AFFIRMED. No costs. SO ORDERED.
[7]

In affirming the dismissal by the appellate court of LBPs ordinary appeal, this Court held that Section 60[8] of RA 6657 (The Comprehensive Agrarian Reform Law) is clear in providing petition for review as the appropriate mode of appeal from decisions of Special Agrarian Courts. Section 61[9] (the provision on which LBP bases its argument that ordinary appeal is the correct mode of appeal from decisions of Special Agrarian Courts) merely makes a general reference to the Rules of Court and does not categorically prescribe ordinary appeal as the correct way of questioning decisions of Special Agrarian Courts. Thus, we interpreted Section 61 to mean that the specific rules for petitions for review in the Rules of Court and other relevant procedures of appeals shall be followed in appealed decisions of Special Agrarian Courts. We likewise held that Section 60 of RA 6657 is constitutional and does not violate this Courts power to promulgate rules concerning the protection and enforcement of constitutional rights, pleadings, practice and procedure in all courts, the admission to the practice of law, the Integrated Bar and legal assistance to the underprivileged.[10] We ruled that the Rules of Court does not categorically prescribe ordinary appeal as the exclusive mode of appeal from decisions of Special Agrarian Courts. The reference by Section 61 to the Rules of Court in fact even supports the mode of a petition for review as the appropriate way to appeal decisions of the Special Agrarian Courts. Furthermore, the same Section 5(5), Article VIII of the 1987 Philippine Constitution quoted by LBP states that rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court. Since Section 60 is a special procedure and this Court has not yet provided for a particular process for appeals from decisions of agrarian courts, the said section does not encroach on our rule-making power. Hence, LBP filed the instant motion for reconsideration and supplement to the motion for reconsideration reiterating its claim in the petition for review that Section 60 of RA 6657 is unconstitutional. LBP still maintains that a legislative act like Section 60 infringes on the exclusive rule-making power of this Court in violation of the 1987 Philippine Constitution. In the event that said argument is again rejected, LBP pleads that the subject Decision should at least be given prospective application considering that more than 60 similar agrarian cases filed by LBP via ordinary appeal before the Court of Appeals are in danger of being dismissed outright on technical grounds on account of our ruling herein. This, according to LBP, will wreak financial havoc not only on LBP as the financial intermediary of the Comprehensive Agrarian Reform Program but also on the national treasury and the already depressed economic condition of our country.[11] Thus, in the interest of fair play, equity and justice, LBP stresses the need for the rules to be relaxed so as to give substantial consideration to the appealed cases.

On the first ground, we find it needless to re-discuss the reasons already propounded in our September 10, 2002 Decision explaining why Section 60 of RA 6657 does not encroach on our constitutional rule-making power. Be that as it may, we deem it necessary to clarify our Decisions application to and effect on LBPs pending cases filed as ordinary appeals before the Court of Appeals. It must first be stressed that the instant case poses a novel issue; our Decision herein will be a landmark ruling on the proper way to appeal decisions of Special Agrarian Courts. Before this case reached us, LBP had no authoritative guideline on how to appeal decisions of Special Agrarian Courts considering the seemingly conflicting provisions of Section 60 and 61 of RA 6657. More importantly, the Court of Appeals has rendered conflicting decisions on this precise issue. On the strength of Land Bank of the Philippines vs. Hon. Feliciano Buenaventura, penned by Associate Justice Salvador Valdez, Jr. of the Court of Appeals, certain decisions[12] of the appellate court held that an ordinary appeal is the proper mode. On the other hand, a decision[13] of the same court, penned by Associate Justice Romeo Brawner and subject of the instant review, held that the proper mode of appeal is a petition for review. In another case,[14] the Court of Appeals also entertained an appeal by the DAR filed as a petition for review. On account of the absence of jurisprudence interpreting Sections 60 and 61 of RA 6657 regarding the proper way to appeal decisions of Special Agrarian Courts as well as the conflicting decisions of the Court of Appeals thereon, LBP cannot be blamed for availing of the wrong mode. Based on its own interpretation and reliance on the Buenaventura ruling, LBP acted on the mistaken belief that an ordinary appeal is the appropriate manner to question decisions of Special Agrarian Courts. Hence, in the light of the aforementioned circumstances, we find it proper to emphasize the prospective application of our Decision dated September 10, 2002. A prospective application of our Decision is not only grounded on equity and fair play but also based on the constitutional tenet that rules of procedure shall not impair substantive rights. In accordance with our constitutional power to review rules of procedure of special courts,[15] our Decision in the instant case actually lays down a rule of procedure, specifically, a rule on the proper mode of appeal from decisions of Special Agrarian Courts. Under Section 5 (5), Article VIII of the 1987 Philippine Constitution, rules of procedure shall not diminish, increase or modify substantive rights. In determining whether a rule of procedure affects substantive rights, the test is laid down in Fabian vs. Desierto,[16] which provides that:

[I]n determining whether a rule prescribed by the Supreme Court, for the practice and procedure of the lower courts, abridges, enlarges, or modifies any substantive right, the test is whether the rule really regulates procedure, that is, the judicial process for enforcing rights and duties recognized by substantive law and for justly administering remedy and redress for a disregard or infraction of them. If the rule takes away a vested right, it is not procedural. If the rule creates a right such as the right to appeal,

it may be classified as a substantive matter; but if it operates as a means of implementing an existing right then the rule deals merely with procedure. (italics supplied)
We hold that our Decision, declaring a petition for review as the proper mode of appeal from judgments of Special Agrarian Courts, is a rule of procedure which affects substantive rights. If our ruling is given retroactive application, it will prejudice LBPs right to appeal because pending appeals in the Court of Appeals will be dismissed outright on mere technicality thereby sacrificing the substantial merits thereof. It would be unjust to apply a new doctrine to a pending case involving a party who already invoked a contrary view and who acted in good faith thereon prior to the issuance of said doctrine. In the 1992 case of Spouses Benzonan vs. Court of Appeals,[17] respondent Pe, whose land was foreclosed by Development Bank of the Philippines in 1977 and subsequently sold to petitioners Benzonan in 1979, tried to invoke a 1988 Supreme Court ruling counting the five-year period to repurchase from the expiration (in 1978) of the one-year period to redeem the foreclosed property. Said 1988 ruling reversed the 1957 and 1984 doctrines which counted the five-year period to repurchase from the date of conveyance of foreclosure sale (in 1977). Using the 1988 ruling, respondent Pe claimed that his action to repurchase in 1983 had not yet prescribed. However, this Court refused to apply the 1988 ruling and instead held that the 1957 and 1984 doctrines (the prevailing ruling when Pe filed the case in 1983) should govern. The 1988 ruling should not retroact to and benefit Pes 1983 case to repurchase. Thus, the action had indeed prescribed. This Court justified the prospective application of the 1988 ruling as follows:

We sustain the petitioners' position. It is undisputed that the subject lot was mortgaged to DBP on February 24, 1970. It was acquired by DBP as the highest bidder at a foreclosure sale on June 18, 1977, and then sold to the petitioners on September 29, 1979. At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was that enunciated in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe and the DBP are bound by these decisions for pursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines." But while our decisions form part of the law of the land, they are also subject to Article 4 of the Civil Code which provides that "laws shall have no retroactive effect unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit, non respicit, the law looks forward not backward. The rationale against retroactivity is easy to perceive. The retroactive application of a law usually divests rights that have already become vested or impairs the obligations of contract and hence, is unconstitutional (Francisco v. Certeza, 3 SCRA 565 [1961]).

The same consideration underlies our rulings giving only prospective effect to decisions enunciating new doctrines. xxx xxx xxx

The buyers in good faith from DBP had a right to rely on our rulings in Monge and Tupas when they purchased the property from DBP in 1979 or thirteen (13) years ago. Under the rulings in these two cases, the period to repurchase the disputed lot given to respondent Pe expired on June 18, 1982. He failed to exercise his right. His lost right cannot be revived by relying on the 1988 case of Belisario. The right of petitioners over the subject lot had already become vested as of that time and cannot be impaired by the retroactive application of the Belisario ruling. (emphasis supplied)
[18]

WHEREFORE, the motion for reconsideration dated October 16, 2002 and the supplement to the motion for reconsideration dated November 11, 2002 are PARTIALLY GRANTED. While we clarify that the Decision of this Court dated September 10, 2002 stands, our ruling therein that a petition for review is the correct mode of appeal from decisions of Special Agrarian Courts shall apply only to cases appealed after the finality of this Resolution. SO ORDERED. Davide, Jr., C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, Sandoval-Gutierrez, Carpio, Austria-Martinez, Carpio-Morales, Callejo, Sr., and Azcuna, JJ., concur. Ynares-Santiago, J., on leave.

[1]

G.R. No. 143275. Covered by TCT No. 163051 with a total area of 50. 1171 hectares. Docketed as CA-G.R. SP No. 47005. Docketed as CA-G.R. CV No. 60365. Rollo, p. 105. Rollo, pp. 12-13. Rollo, p. 575. Section 60. Appeals. An appeal may be taken from the decision of the Special Agrarian Courts by filing a petition for review with the Court of Appeals within fifteen (15) days from receipt of notice of the decision; otherwise, the decision shall become final. Section 61. Procedure in Review. Review by the Court of Appeals or the Supreme Court, as the case may be, shall be governed by the Rules of Court. The Court of Appeals, however, may require

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

the parties to file simultaneous memoranda within a period or fifteen (15) days from notice, after which the case is deemed submitted for decision.
[10]

Section 5(5), Article VIII, 1987 Constitution of the Philippines. The pertinent portions of the supplement to the motion for reconsideration provides that:

[11]

From the initial CARP fund of P595.8 Million set up in 1987, the total CARP fund released to the LBP and paid to the landowners and utilized for operational support amounted to P29.863 Billion as of September 2002 (please see Annex H herein). This is the total expense over a period of fifteen (15) years and covers hardly a third of the statutory budget of P100 Billion for the CARP. The National Treasury lacks the money to pay for the exorbitant and unreasonable claims of the landowners which will have to be paid once LBPs number of appealed cases before the Court of Appeals are dismissed due to wrong mode of appeal. Such a scenario will definitely aggravate the countrys fiscal deficit which stands at P180 Billion for the current year (please see Annex T hereof). x x x x

It is worth stressing that LBPs total funding requirement for 2002 for landowners compensation is P5.690 Billion, but the Congress-approved budget as per General Appropriations Act of 2002 is only P2.854 Billion bringing a funding gap of P2.836 Billion (Annex J). 9. As of September 2002, LBP/s total cash advances for landowners compensation stands at P3.044 Billion (Annex K). By the end of December 2002, LBPs projected total cash advances will increase by P900 Million (covering October to December 2002), for a total projected advance of P3.944 Billion for the year (Annex L hereof).

For its huge cash advances, LBP hopes to be refunded by the National Government from the Special Allotment Release Order (SARO), which is still unfunded at the present time, in the amount of P2.189 Billion (Annex L hereof). This will leave a total projected net unrefunded advance of P1.755 Billion by the end of December 2002 (Annex L). The foregoing clearly and adequately shows the difficulty, if not impossibility, of LBP getting a refund, and consequently of funding the landowners claims.(Rollo, pp. 498-499)
[12]

Gabatin vs. Department of Agrarian Reform, et. al., CA-G.R. CV No. 61240, penned by Associate Justice Delilah Vidallon-Magtolis; Land Bank of the Philippines vs. Hon. Salcedo, CA-G.R. No. SP No. 63651, September 28, 2001, penned by Associate Justice Rodrigo Cosico; Tiangco vs. Secretary of Argrarian Reform, CA- G.R. CV No. 61676, October 5, 2001, penned by Associate Justice Hilarion Aquino; Alimurong vs. Republic of the Philippines, CA-G.R. CV No. 70721, July 5, 2002, penned by Associate Justice Mercedes Gozo-Dadole. Land Bank of the Philippines vs. Arlene de Leon, et. al., CA-G.R. CV No. 60365, February 15, 2000. Docketed as CA-G.R. No. 47005 and the decision dated November 6, 1998 was penned by Associate Justice Minerva Gonzaga-Reyes (former Associate Justice of this Court). Section 5(5), Article VIII of the 1987 Philippine Constitution; Metro Construction, Inc. vs. Chatham Properties, G.R. No. 141897, September 24, 2001. 295 SCRA 470, 492, [1998]; Bernabe vs. Alejo, G.R. No. 140500, January 21, 2002. 205 SCRA 515 [1992]. Id., p. 528.

[13]

[14]

[15]

[16]

[17]

[18]

G.R. No. 132163

January 28, 2003

GRACIANO PAPUNAN, petitioner, vs. DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB) and MARCOS RODRIGUEZ.,respondents. CORONA, J.: This is a petition for review on certiorari of the decision1 dated August 14, 1997 of the Court of Appeals affirming the decision2 of the Department of Agrarian Reform Adjudication Board (DARAB, for brevity) in DARAB Case No. 0489 which, in turn, affirmed the decision3 of the Provincial Adjudicator of Nueva Ecija in DARAB Case No. 1154'NE'90. The facts of the case are as follows: The landholdings subject of the present controversy consist of three parcels of agricultural land with an area of sixteen thousand two hundred twenty-seven (16,227), six thousand five hundred eighty-seven (6,587) and nine thousand nine (9,009) square meters, respectively, situated in Barangay Bantug, Marawa, Jaen, Nueva Ecija.4Angelina R. Rodriguez was the original beneficiary under PD 27 of the said three parcels of land covered by Certificate of Land Transfer (CLT, for brevity) Nos. 0341310, 0341311 and 0341312.5 On July 21, 1981, Angelina Rodriguez waived her rights over the said landholdings in favor of private respondent Marcos Rodriguez by virtue of the Sinumpaang Salaysay duly executed and thumbmarked by her.6 The waiver was concurred in by the Samahang Nayon of Marawa, Jaen, Nueva Ecija in its Kapasyahan Blg. 15.7 Thereafter, private respondent Marcos Rodriguez possessed and cultivated the said landholdings as tenant-beneficiary under PD 27. On July 21, 1988, private respondent Marcos Rodriguez obtained a loan from herein petitioner, Graciano Padunan, for P50,000 with the subject landholdings as collateral. The loan agreement between private respondent Marcos Rodriguez and petitioner Graciano Padunan was embodied in a Kasunduan which further provided that petitioner was authorized to possess and cultivate the land for two years and/or until repayment of the mortgage debt.8 On January 10, 1990, Emancipation Patent (EP, for brevity) Nos. 414430, 414440 and 414448 covering the subject three parcels of land were issued to

Angelina Rodriguez, even though she had already waived her rights over the said land in favor of private respondent Marcos Rodriguez on July 21, 1981.9 On October 9, 1990, Angelina Rodriguez executed, for the second time, a waiver of rights by way of sale, this time in favor of petitioner Graciano Padunan for the sum of P55,000.10 Claiming ownership over the land, petitioner Graciano Padunan started constructing thereon a house and a warehouse.11 Objecting to the construction made by petitioner Graciano Padunan, private respondent Marcos Rodriguez filed, on November 5, 1990, a case for injunction before the Provincial Agrarian Reform Adjudication Board (PARAD, for brevity) of Nueva Ecija.12 On August 26, 1991, Provincial Adjudicator Romeo Bello decided in favor of private respondent Marcos Rodriguez, declaring him the lawful tenant-beneficiary of the subject land, directing the issuance of the corresponding EPs in his name and ordering herein petitioner Graciano Padunan to vacate the premises upon payment of the mortgage debt. The dispositive portion of the decision of the Provincial Adjudicator reads as follows: "WHEREFORE, premises considered, judgment is hereby rendered as follows: "1. Declaring petitioner Marcos Rodriguez as the lawful tenantbeneficiary of the subject landholding; "2. Directing the issuance of the corresponding Emancipation Patents in favor of the petitioner; "3. Directing the respondent to vacate the premises in question in favor of the petitioner after paying the mortgage consideration in the amount of P50,000.00; "4. Dismissing all claims for damages and counterclaims."13 From the above decision, herein petitioner Graciano Padunan appealed to the DARAB. On January 27, 1995, the DARAB affirmed in toto the decision of Provincial Adjudicator Romeo Bello. Thus, petitioner Graciano Padunan elevated the case to the Court of Appeals. On August 14, 1997, the Court of Appeals dismissed his petition for review for lack of merit. The appellate court ruled as follows:

"Petitioner's claim is based on an alleged sale/waiver of rights by Angelina R. Rodriguez in his favor. "This contention is untenable. "To begin with, rights over agrarian reform-covered landholdings under the agrarian reform program, are not legally transferable. They are deemed outside the commerce of man. However, the waiver of rights in favor of private respondent here is entirely different. The substitution was through transfer action authorized under existing laws and DAR issuances. Strictly speaking, the land involved was not really transferred. The designated farmer-beneficiary was just replaced by another qualified farmerbeneficiary, as recommended and with the conformity of the Samahang Nayon in the locality. "Then, too, the alleged waiver in favor of petitioner took place only after there had been a transfer action, with private respondents as the substitute farmer-beneficiary. So, when Angelina R. Rodriguez executed the waiver/sale in favor of petitioner, she no longer possessed any right over the subject landholding. "xxx xxx xxx

"The annulment adjudged in the decision under review, springs from the finding that the issuance of Emancipation patents in the name of farmer beneficiary Angelina R. Rodriguez was erroneous. The issuance of said Emancipation patents was due to inadvertence. Thus, annulment thereof is a correction of an administrative error; a matter within the exclusive competence of the public respondent as adjudicating arm of DAR. And as stressed by public respondent, the said Emancipation patents in question were not even registered with the proper Registry of Property. "xxx xxx xxx

"PARAD's decision under scrutiny is not anemic of evidentiary support. Records contain documents showing that the former farmer beneficiary Angelina R. Rodriguez, waived by a Sinumpaang Salaysay dated July 21, 1981 (Exh. `B'), her rights over subject landholdings in favor of the private respondent and that said waiver was with the confirmation by the local Samahang Nayon, as embodied in Kapasyahan Blg. 15 (Exh. 'C'). PARAD was thus reasonably convinced that there was a valid 'transfer action' in favor of private respondent.

"As found by PARAD, petitioner is, at best, in possession of the said land, not as a farmer-beneficiary but as a mortgagee, so that it was but proper and just for PARAD to rule the way it did; directing settlement of the mortgage debt before private respondent could reassume possession of the landholdings in question. "WHEREFORE, the Petition for Review under consideration is hereby DISMISSED. No pronouncement as to costs."14 Not satisfied with the decision of the Court of Appeals, petitioner Graciano Padunan filed the instant Petition for Review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, based on the following grounds: "The conclusion of the Court of Appeals that the Department of Agrarian Reform Adjudication Board (DARAB) possessed jurisdiction to rule on the validity of Emancipation patents is not in accord with the law and with applicable jurisprudence. "The conclusion of the Court of Appeals that the Emancipation patents subject of this case could be cancelled by the Department of Agrarian Reform Adjudication Board (DARAB) even if the registered owner to whom said Patent was issued is not a party to the case is patently contrary to the Bill of Rights and not in accord with law and jurisprudence. "The conclusion of the Court of Appeals that the Department of Agrarian Reform Adjudication Board (DARAB) could decide the instant case on issues not raised in the pleadings is patently contrary to the Bill of Rights and not in accord with law and jurisprudence. "The Court of Appeals has sanctioned the departure of the Department of Agrarian Reform Adjudication Board (DARAB) from the established rule that its decisions must be supported by substantial evidence.15 At the outset, it must be stated that petitioner Graciano Padunan raised not only questions of law but also issues of fact in his petition for review. He argued that the Court of Appeals, the DARAB and the PARAD failed to consider the fact that Angelina Rodriguez waived her rights over the subject landholdings in his favor with the conformity of the local Samahang Nayon, and that he possessed and cultivated the land in accordance with the laudable objectives of land reform while private respondent Marcos Rodriguez mortgaged and abandoned the same.16

It is a well-settled rule that only questions of law may be reviewed by the Supreme Court in an appeal by certiorari.17 Findings of fact by the Court of Appeals are final and conclusive and cannot be reviewed on appeal to the Supreme Court,18 more so if the factual findings of the Court of Appeals coincide with those of the DARAB, an administrative body with expertise on matters within its specific and specialized jurisdiction.19 The only time this Court will disregard the factual findings of the Court of Appeals (which are ordinarily accorded great respect) is when these are based on speculation, surmises or conjectures or when these are not based on substantial evidence.20 In the case at bar, no reason exists for us to disregard the findings of fact of the Court of Appeals. The factual findings are borne out by the record and are supported by substantial evidence. Based on the documents presented, the Court of Appeals and the DARAB ruled that petitioner Graciano Padunan was only a mortgagee of the landholdings in question. The subject land was mortgaged to him by private respondent Marcos Rodriguez on July 21, 1988 by virtue of the Kasunduan duly entered between him and private respondent Marcos Rodriguez.21 However, instead of cultivating the land until payment of the mortgage debt, petitioner Graciano Padunan claimed ownership over the land and constructed a house and warehouse thereon, based on the alleged waiver of rights executed by Angelina Rodriguez in his favor on October 9, 1990. It was, however, found by the PARAD, affirmed by the DARAB and the Court of Appeals, that Angelina Rodriguez no longer had any rights over the subject parcels of land as early as July 21, 1981.22 That was the date she executed a Sinumpaang Salaysay waiving her rights over the subject landholdings in favor of private respondent Marcos Rodriguez, a waiver of rights duly confirmed by the local Samahang Nayon in its Kapasyahan Blg. 15 in accordance with existing laws and DAR issuances.23 Clearly therefore, private respondent Marcos Rodriguez was already the lawful tenant-beneficiary of the subject land under PD 27 at the time Angelina Rodriguez entered into the questionable agreement with petitioner Graciano Padunan, thus making the second transfer null and void ab initio and Padunan at best a mere mortgagee of the subject landholdings by virtue of the Kasunduan between him and private respondent Marcos Rodriguez. In fact, the DARAB categorically ruled that nothing in the evidence showed that petitioner Graciano Padunan was a tenant-beneficiary of the subject land. According to the DARAB: ". . . . No way does it appear from the examination of evidences that herein Respondent-Appellant was a tenant-beneficiary of the landholding in question. Respondent-Appellant was a mere mortgagee of the subject

property and his rights thereto end after the expiration of the mortgage contract and the corresponding obligations are met."24 We rule that, since Angelina Rodriquez no longer had any rights over the parcels of land in question, the EPs issued to her on January 10, 1990 covering the subject landholdings were clearly issued by mistake. EPs can only be issued to agrarian reform beneficiaries and Angelina Rodriguez was no longer one at the time of their issuance in her name.25 The question now is who has the authority to cancel the erroneously issued EPs the DARAB or the Secretary of the Department of Agrarian Reform? Petitioner Graciano Padunan argues that the DAR Secretary has exclusive jurisdiction to cancel EPs,26 pursuant to Section 12(b)(5) of PD 94627 which provides that it is the Secretary of Agrarian Reform who has jurisdiction, among other things, to issue, recall and cancel Certificates of Land Transfer.28 Private respondent Marcos Rodriguez, on the other hand, argues that it is the DARAB which has jurisdiction, based on Rule II, Section 1, paragraph (f) of the DARAB Revised Rules of Procedure (1989) which provides that the DARAB has primary jurisdiction over "cases involving the issuance of Certificates of Land Transfer (CLTs), Certificates of Land Ownership Award (CLOAs) and Emancipation Patents (EPs), and the administrative correction thereof."29 For its part, public respondent DARAB argues that its jurisdiction to cancel erroneously issued EPs is enshrined in Section 50 of RA 6657 which provides that the DARAB has original, primary and exclusive jurisdiction over agrarian reform matters and/or those related to agrarian reform implementation.30 It must be stated at the outset that it is the law that confers jurisdiction and not the rules. Jurisdiction over a subject matter is conferred by the Constitution or the law and rules of procedure yield to substantive law. Otherwise stated, jurisdiction must exist as a matter of law.31 With this well-established principle on jurisdiction, it is therefore incorrect for the private respondent Marcos Rodriguez to argue that the DARAB derives its jurisdiction from the DARAB Rules of Procedure. 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." (emphasis ours) 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, 1994.32 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); xxx xxx xxx

(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. xxx xxx xxx

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." (emphasis ours) Subparagraph (f) stated above provides that the DARAB has exclusive jurisdiction over cases involving the issuance, 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 1994,33 to wit: 1. Misuse or diversion of financial and support services extended to the ARB;34 (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 ofregistered 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 farmerbeneficiaries;

(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 registered with the Register of Deeds; (e) Exercise of the right of retention by landowner; xxx xxx xxx

(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." (emphasis ours) 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 officials35 duly designated by him, in the exercise of his/their administrative functions. And since, in the case at bar, the erroneously issued EPs in the name of Angelina Rodriguez were unregistered, it is the Secretary of Agrarian Reform who has the authority to cancel the same. In the decision of the Court of Appeals under review, the Court of Appeals ruled that: "The issuance of said EPs was due to inadvertence. Thus, annulment thereof is a correction of an administrative error, a matter within the exclusive competence of the public respondent as adjudicating arm of DAR. And, as stressed by public respondent, the said EPs in question were not even registered with the proper Registry of Property."36 (emphasis ours) We disagree, for 2 reasons. First, at the time of the promulgation of the Court of Appeals decision on August 14, 1997, the 1994 DARAB New Rules of Procedure had long taken effect. Such rules clearly provide that the DARAB has jurisdiction only over the cancellation of registered EPs but not those that are not.37 And since the Court of Appeals itself ruled that the subject EPs were not yet registered, it should have likewise ruled that the cancellation thereof did not pertain to the DARAB.

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",38 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 1994:39 "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." In sum, the decision of the Court of Appeals is partly affirmed. It is correct to say that private respondent Marcos Rodriguez was the lawful tenant beneficiary of the subject land by virtue of the valid transfer executed by Angelina Rodriguez in his favor with the conformity of the Samahang Nayon of Marawa, Jaen, Nueva Ecija, while petitioner Graciano Padunan was only a mortgagee thereof because the second transfer made by Angelina Rodriguez to him was invalid. It is incorrect, however, to rule that the DARAB has jurisdiction to cancel the emancipation patents issued in the name of Angelina Rodriguez because, under Administrative Order No. 06-00 (Rules of Procedure for Agrarian Law Implementation Cases, implementing Section 49 and 50 of RA 6657), it is the Secretary of Agrarian Reform who has jurisdiction to cancel unregistered emancipation patents. WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED in so far as it upholds the ruling of the DARAB that (1) private respondent Marcos Rodriguez is the lawful tenant beneficiary of the three parcels of land located in Barangay Bantug, Marawa, Jaen, Nueva Ecija, covered by Certificate of Land Transfer (CLT) Nos. 0341310, 0341311 and 0341312 and (2) petitioner Graciano Padunan is only a mortgagee thereof, thereby ordering him to vacate the premises upon payment by private respondent Marcos Rodriguez of the mortgage debt in the amount of P50,000. The ruling of the Court of Appeals that DARAB has jurisdiction to cancel the unregistered emancipation patents in the name of Angelina Rodriguez is hereby REVERSED. Whereby rule that it is the Secretary of the Department of Agrarian Reform who has jurisdiction to cancel the said unregistered emancipation patents. Private respondent Marcos Rodriguez, the new legal agrarian reform beneficiary of the subject land, should file the

proper action before the DAR to cancel the said unregistered emancipation patents. SO ORDERED. Puno, Panganiban, and Morales, JJ ., concur. Sandoval-Gutierrez, J ., took no part.

Footnotes
1

Penned by Associate Justice Fidel P. Purisima (retired Associate Justice of the Supreme Court) and concurred in by Associate Justices Angelina Sandoval-Gutierrez (now Associate Justice of the Supreme Court) and Conrado M. Vasquez, Jr.; Rollo, pp. 2530.

Penned by DAR Assistant Secretary Lorenzo R. Reyes and concurred in by DAR Undersecretary Jose Noel D. Olano and Assistant Secretaries Hector D. Soliman, Augusto P. Quijano and Sergio B. Serrano. DAR Secretary Ernesto D. Garilao and Undersecretary Renato B. Padilla did not take part.; Rollo, pp. 5458. Penned by Hon. Romeo Bello, Provincial Adjudicator of Nueva Ecija; Rollo, pp. 5053.
4 3

Rollo, pp. 26, 55. Rollo, pp. 26, 55. Rollo, pp. 29, 55. Rollo, p. 29. Rollo, pp. 26, 27, 55. Rollo, pp. 28, 51. Rollo, pp. 26, 51. Rollo, pp. 26, 55. Rollo, pp. 26, 4546, 54.

10

11

12

13

Rollo, pp. 25, 54. Rollo, pp. 2530. Rollo, p. 821. Rollo, pp. 1920.

14

15

16

Rule 45, Section 1, 1997 Rules of Civil Procedure; Solangon vs. Salazar, G.R. No. 125944, June 29, 2001; J.R. Blanco vs. Quasha, 318 SCRA 373 (1999); Fuentes vs. Court of Appeals, 268 SCRA 703 (1997). Titong vs. Court of Appeals, 287 SCRA 102 (1998); Atillo III vs. Court of Appeals, 266 SCRA 596 (1997). Corpus vs. Grospe, 333 SCRA 425, 435 (2000), citing Coconut Cooperative Marketing Association, Inc. vs. Court of Appeals, 164 SCRA 568, 581 (1988), Jacinto vs. Court of Appeals, 87 SCRA 263, 269 (1978), and Domingo vs. Court of Agrarian Relations 4 SCRA 1151, 1156 (1962); Greenfield Realty Corp. vs. Cardama, 323 SCRA 280 (2000). Milestone Realty & Co., Inc. and William Perez vs. Court of Appeals, G.R. No. 135999, April 19, 2002;Baricuatro vs. Court of Appeals, G.R. No. 105902, February 9, 2002.
21 20 19 18

17

Rollo, p. 27. Rollo, pp. 27, 28. Rollo, pp. 2829. Rollo, p. 56.

22

23

24

Paris vs. Alfeche, G.R. No. 139083, August 30, 2001; Vda. de Dela Cruz vs. Abille, 352 SCRA 691 (2001); Pagtalunan vs. Tamayo, 183 SCRA 252 (1990). Milagros A. German, The Revised Rules of Procedure in the Litigation of Agrarian Cases by the DAR under the CARL 1988 and the Special Agrarian Courts (1992). "Reorganizing the Courts of Agrarian Relations, Streamlining their Procedures, and for other Purposes" (1976); Parts of the law inconsistent
27 26

25

with RA 6657 or the Comprehensive Agrarian Reform Law of 1988 were repealed or modified accordingly.
28

Petition for Review, p. 7; Rollo, p. 14. Memorandum, p.4; Rollo, p. 151. Comment, p. 2; Rollo, p. 61. People vs. Casiano, 111 Phil 73 (1961).

29

30

31

32

Modifying or repealing accordingly the DARAB Revised Rules of Procedure (1989) and all DAR administrative provisions that are inconsistent therewith.

"Rules Governing the Correction and Cancellation of Registered/Unregistered Emancipation Patents (EPs), and Certificates of Land Ownership Award (CLOAs) Due to Unlawful Acts and Omissions or Breach of Obligations of Agrarian Reform Beneficiaries (ARBs) and for Other Causes" (1994)
34

33

ARB means agrarian reform beneficiary.

Sec. 6, RULE II, Rules of Procedure for Agrarian Law Implementation (ALI) Cases.
36

35

Rollo, p. 29. Paragraph (f), Section 1, Rule II, DARAB New Rules of Procedure. Paragraph (f), Section 1, Rule II, DARAB Revised Rules of Procedure.

37

38

"Rules Governing the Correction and Cancellation of Registered/Unregistered Emancipation Patents (EPs), and Certificates of Land Ownership Award (CLOAs) Due to Unlawful Acts and Omissions or Breach of Obligations of Agrarian Reform Beneficiaries (ARBs) and for Other Causes" (1994).

39

G.R. Nos. 113220-21 January 21, 1997

DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB) and Provincial Agrarian Reform Adjudicator FE ARCHE-MANALANG, Department of Agrarian Reform (DAR), petitioners, vs. COURT OF APPEALS, BSB CONSTRUCTION and AGRICULTURAL DEVELOPMENT CORPORATION, and CAROL BAUCAN, respondents.

DAVIDE, JR., J.: In this petition for review under Rule 45 of the Rules of Court, petitioners Department of Agrarian Reform Adjudication Board (DARAB) and Fe ArcheManalang, Provincial Agrarian Reform Adjudicator (PARAD) for the Province of Rizal, seek to set aside, in part, the 23 September 1993 Decision 1 of the Court of Appeals (former Special Third Division) in the consolidated cases CA-G.R. SP No. 30474 and CA-G.R. SP No. 31179, and its 27 December 1993 Resolution 2 denying their partial motion for reconsideration of the said decision. The private respondents herein were the petitioners below. The Court of Appeals aptly summarized the material facts leading to the instant petition in this wise: These cases were consolidated in view of the fact that they involve the same petitioners and the same issue concerning the right of BSB Construction and Agricultural Development Corp. (hereafter BSB Construction) to develop a parcel of land into a housing subdivision, against the claim of private respondents that they are tenant-farmers entitled to the benefits of the Comprehensive Agrarian Reform Law of 1988 (Rep. Act No. 6657). Background of CA-G.R. SP NO. 30474. On March 10, 1993 private respondents Salvador O. Abogne, Artemio Catamora and Raul Ordan filed a complaint with the Provincial Agrarian Reform Adjudicator (PARAD) at Teresa, Rizal, praying that they be maintained in the peaceful possession and cultivation of a portion, consisting of 12 hectares, of the land in question. The land, which has a total area of 45 hectares, is located at Barangay San Isidro, Antipolo, Rizal. In their complaint docketed as PARAD Case No. IV-0075-93, private respondents alleged that

they are farmworkers and occupant-tillers of the land in question; that the land is an [sic] agricultural land; that they had invested efforts and money in cultivating and planting it with various fruit trees and root crops; that on March 4, 1993 the portion of the land they were cultivating had been bulldozed at the instance of Federico Balanon and other individuals acting in behalf of the petitioner BSB Construction, as a result of which the improvements made by them on the land were destroyed. For this reason private respondents asked the PARAD for an order restraining the herein petitioners from further bulldozing the property and maintain them in the peaceful possession of the land. On the same date (March 10, 1993) the complaint was filed, the Provincial Adjudicator, Fe Arche-Manalang, issued an order enjoining the BSB Construction and all persons representing it "to cease and desist from undertaking any further bulldozing and development activities on the property under litigation or from committing such other acts tending to disturb the status quo. On March 12, 1993 petitioners filed a complaint with the Department of Agrarian Reform Adjudication Board (DARAB) at Diliman, Quezon City, in which they sought the nullification of the restraining order issued by the PARAD. They alleged that the land in question is not an agricultural, but residential, land and that the petitioners before the PARAD, who are the herein respondents Abogne, Catamora, and Ordan are not tenant-farmers but mere squatters; that through Atty. Eduardo Inlayo, who is chief legal counsel of the Department of Agrarian Reform, private respondents had filed a criminal case for illegal conversion of agricultural land against Federico Balanon, president of BSB Construction; and that Atty. Inlayo and PARAD Fe Arche-Manalang, who are officials of the DAR, had conspired with each other and acted maliciously in issuing the restraining order without regard to its consequences, without first hearing the herein petitioners. Without waiting for any action on their complaint before the DARAB, the petitioners, on March 19, 1993, filed the present petition for certiorari, substantially alleging the same matters and praying for the annulment of the restraining order issued by the PARAD, on the ground that the order was issued capriciously, whimsically, and in excess of the jurisdiction of the PARAD. Background of CA-G.R. SP NO. 31179

In turn, after the filing of the petition in CA-G.R. SP No. 30474 with this Court, another group, claiming the same right to the cultivation of the land in question, filed a complaint with the DARAB against the petitioner BSB Construction, represented by its president, Federico Balanon. The complainants, who are the herein private respondents Lourdes Bea, Benjamin Enriquez, and Natividad Enriquez, alleged that they too are farmworkers and occupant-tillers of the same portion being cultivated by the private respondents in CA-G.R. SP No. 30474. In substantially the same way, they alleged that they had invested money and effort to develop the portion of the land into a "compact agricultural undertaking," planting it with various fruit trees and root crops; that on March 4, 1993 petitioner BSB Construction bulldozed the portion of the land cultivated by Salvador Abogne, Artemio Catamora and Raul Ordan (private respondents in CA-G.R. SP No. 30474) and were determined to bulldoze the entire land with the result that they would be ejected therefrom. Private respondents asked for a temporary restraining order because of what they feared would be great and irreparable damage to them and their source of livelihood. On the same day (May 6, 1993), the DARAB issued a "status quo order", the dispositive portion of which states: WHEREFORE, premises considered, Order is hereby given to: 1. The Respondents BSB construction and Agricultural Development Corporation represented by Federico Balanon and any individual or group of individuals acting pursuant to or under their command, not to bulldoze and scrape the fruit-bearing trees and root crops thereon, harass and disturb the peaceful possession of Petitioners over the landholding in question pedente lite under pain of contempt by this Board; 2. The DARAB Provincial Sheriff for the Province of Rizal, the Municipal Agrarian, Reform Officer for the Municipality of Antipolo, Rizal, the Provincial Agrarian Reform Officer for the Province of Rizal and the Philippine National Police unit in the Municipality of Antipolo, Rizal to see to it that Petitioners are not harassed, disturbed and that peaceful possession of

their tillage over the landholding in question is maintained pendente liteand to submit [a] compliance report of this Order within five (5) days from receipt hereof. SO ORDERED. The DARAB justified its order as necessary "to protect the interests of both parties pedente lite, not to preempt the decision of the Hon. Adjudicator for the province of Rizal in Region Case No. IV-RI-007593 and not to make a mockery of our democratic processes. BSB Construction and Carol Baucan, who is one of the registered owners of the land in question, then filed the petition for certiorari [under Rule 65] in this case (CA-G.R. SP No. 31179), contending that the land is not covered by the Comprehensive Agrarian Reform Law and, therefore, the complaint filed in the DARAB is not within the latter's jurisdiction. PARAD Case No. IV-RI-0075-93, subject of CA-G.R. SP No. 30474, shall hereafter be referred to as the ABOGNE Case. The aforementioned DARAB case subject of CA-G.R. SP. No. 31179 was docketed as DARAB Case No. 0100-93 (Res. Case No. IV-RI-0075) and shall hereafter be referred to as the BEA Case. Before the Court of Appeals, private respondents BSB Construction and Agricultural Development Corporation and Carol Baucan sought to annul the temporary restraining order issued by PARAD (hereafter PARAD TRO) in PARAD Case No. IV-RI-0075-93 and the Status Quo order issued by DARAB (hereafter DARAB SQO) in DARAB Case No. 0100-93 (Reg. Case No. IV-0075) contending that: (1) the land subject of the proceedings was not agricultural land, it having been declared by former Minister Conrado Estrella to be outside the scope of P.D. No. 27 as far back as 1983 and converted into a residential area before the effectivity of R.A. No. 6657, 3 as evidenced by the issuance of the appropriate Development Permits by the Human Settlements Regulatory Commission; (2) the private respondents below were mere squatters; (3) the complaint in the ABOGNE Case failed to show prima facie entitlement to injunctive relief; (4) the Secretary of Justice issued an opinion to the effect that R.A. No. 6657 did not cover land previously classified as residential in town plans and zoning ordinances approved by the Housing and Land Use Regulatory Board; and (5) the DARAB SQO, having been issued after the Court of Appeals

had given due course to their petition in CA-G.R. SP No. 30474, "betray[ed] disrespect to the Court and the rule of law." In its challenged Decision, the respondent Court disposed as follows: WHEREFORE, the petition for certiorari and motion for contempt in CA-G.R. SP No. 30474 are DISMISSED. On the other hand, the petition for certiorari in CA-G.R. SP No. 31179 is GRANTED and the order dated May 6, 1993 and all proceedings in DARAB Case No. 0100-93 (Reg. Case No. IV-RI0075), including the order of arrest of July 15, 1993, are hereby declared NULL AND VOID. The Provincial Agrarian Reform Adjudicator is ORDERED to resolve within ten (10) days from notice the application for a writ of preliminary injunction in PARAD Case No. IV-RI-0075-93. Pending resolution by the PARAD of the motion for injunction, the petitioners are ENJOINED from bulldozing or in any way disturbing the private respondents in their possession. As to the ABOGNE Case (CA-G.R. SP No. 30474), it upheld the validity of the PARAD TRO, ruling that the allegations in the complaint in PARAD Case No. IV-RI-0075-93 clearly indicated the necessity for its issuance; the respondents' contentions were matters of defense; and that, in any event, the issue of the propriety of the issuance of the TRO was already mooted by the expiration of its 20-day lifetime. On other hand, it granted the petition in the BEA Case (CA-G.R. SP No. 31179) and, consequently, set aside the DARAB SQO and the warrant of arrest issued in the BEA Case as the DARAB had no jurisdiction over said the case and violated its Rules of Procedure. It justified the said disposition in this wise: On the other hand, the "Status Quo Order" issued by the DARAB on May 6, 1993 is, in our view, nothing but an interference in a matter over which it has no jurisdiction. It is true that under the law the DAR is given "primary jurisdiction to determine and adjudicate agrarian reform matters and . . . exclusive original jurisdiction over matters involving the implementation of agrarian reform" and to punish those guilty of contempt. (Rep. Act No. 6657, sec. 50) Under the Revised Rules of Procedure of the DAR, however, this power is delegated to Regional Agrarian Reform Adjudicators (RARADs) and to Provincial Agrarian Reform Adjudicators (PARADs) with respect to matters arising within their respective territorial jurisdiction.

As already stated, the DARAB issued the "Status Quo Order" because of what it perceived to be an effort of the herein petitioners BSB Construction and its officers "to make a mockery of a [sic] democratic processes." Apparently, the DARAB was referring to the complaint filed with it by petitioners and the petition for certiorari later filed with this Court in CA-G.R. SP No. 30474. That is the reason petitioners charge the DARAB with "disrespect" of this Court. However, the DARAB should have left the correction of alleged abuse of legal process to this Court instead of issuing the order in question. In issuing the "Status Quo Order" of May 6, 1993, the DARAB only succeeded in . . . acting on a matter over which it had no jurisdiction since the case was already pending before its PARAD. Certainly the interest of orderly procedure can not tolerate both the DARAB and the PARAD to act simultaneously or in tandem over the same case. That the complainants . . . are different from the complainants before the PARAD cannot conceal the fact that the purpose of the complaint in the DARAB was the same as the purpose of the complaint in the PARAD, namely, for maintenance of peaceful possession. Indeed, in their complaint, Lourdes Bea, Benjamin Enriquez and Natividad plead the cause of the complainants in the PARAD . . . They do not assert a cause of action of their own, except a generalized interest in stopping the development of the land into a housing subdivision. The DARAB should have set the example o[f] observance of orderly procedure instead of issuing the order in question. As our disposition of the issue in CA-G.R. SP No. 30474 shows, the validity of the PARAD order is for this Court to resolve, not for the DARAB. The DARAB seeks to justify its order on the ground that unless the petitioners were restrained, they would have proceeded with the bulldozing of the land and the destruction of private respondents' crops. If that is so, it can only be because the 20-day life of the PARAD TRO expired without the latter having resolved the respondents' application for injunction. The filing of the petition in CA-G.R. SP No. 30474 cannot be cited to justify the PARAD's failure to resolve the injunctive incident. This Court, duly mindful of Republic Act No. 6657, sec. 55 has studiously avoided issuing a restraining order against the PARAD and the DARAB. There is simply no justification for the DARAB order of May 6, 1993. The least the FARAD could have done was to get the parties to agree to a

temporary truce pending resolution of the motion for a writ of preliminary injunction. Given the nullity of the DARAB order of May 6, 1993 it follows that the DARAB was without power to order the arrest of the petitioner for violation of such order. On the other hand, we do not think that the DARAB committed any contempt of this Court in issuing its order since as already indicated this Court did not really issue any restraining order against the PARAD. On 12 October 1993, the petitioners herein, as the private respondents below, filed a Partial Motion for Reconsideration of the Decision, 4 contending in the main that the 10-day period mandated by the Court of Appeals within which to resolve the application for preliminary injunction in CA-G.R. SP No. 30474 was too short, impractical and amounted to interference with quasi-judicial procedures governed by a separate and distinct set of rules; and that the DARAB had jurisdiction to issue the SQO, as its delegation of quasi-judicial power to the PARAD did not contemplate total abdication thereof, thus the PARAD's authority over a case could be modified or withdrawn at any given time. As to the latter, the petitioners further argued that only the DARAB was directly conferred by law with quasijudicial power, hence primary jurisdiction remained with it and no legal impediment prevented the DARAB from issuing interlocutory orders even in cases pending before the PARAD; the petitioners finally invoked the doctrines of exhaustion of administrative remedies and primary jurisdiction in claiming that judicial intervention in the proceedings was premature, as the DARAB should have been allowed to first pass upon the propriety of the 6 May 1993 Order. In its resolution 5 of 27 December 1993, the Court of Appeals denied the Partial Motion for Reconsideration, holding that because the 10-day period fixed in the decision was derived from the court's supervisory power to issue the writ of certiorari, moreover, it was imposed:
[I]n view of the restraining order issued enjoining petitioners [private respondents herein] from . . . disturbing the private respondents [below] in their possession. It would be unfair to hold the petitioners [private respondents herein] to an indefinite period of restraint without a corresponding limitation on the period within which the PARAD should act on 6 the application for preliminary injunction.

As to the challenge to its Decision in CA-G.R. SP No. 31179, the Court of Appeals ruled that the petitioners cited no authority for their stand and reiterated that to uphold the petitioners' arguments could only result in the subversion of orderly administration of justice.

The petitioners then filed the instant petition wherein they assert that the Court of Appeals committed grave abuse of discretion amounting to lack or excess of jurisdiction in: (a) directing in CA-G.R. SP No. 30474 that the pending incident (application for Writ of Preliminary Injunction) in the ABOGNE Case (PARAD Case No. IV-RI-0075-93) be resolved within a specific period of ten days from notice; and (b) declaring in CA-G.R. SP No. 31179 that all the proceedings in the BEA Case (DARAB Case No. 0100-93 [Reg. Case No. IV-RI-0075]), including the 15 July 1993 arrest order, were null and void. As to the first, the petitioners argue that: (1) in a special civil action for certiorari, when a supervisory act is too specific (i.e., the 10-day period) that noncompliance therewith is proper for contempt proceedings, the said directive is relieved of the character of an incident of supervision and becomes a separate remedy in itself; (2) the restraining order issued by the Court of Appeals against the private respondents was not necessary as the SQO subsisted pending finality of the ordered nullification of the BEA Case; (3) the directive was premature and constituted undue interference with quasi-judicial proceedings governed by a distinct set of rules, especially in light of the doctrine of primary jurisdiction; (4) any delay in the resolution of the motion for preliminary injunction was attributable to the filing by the private respondents of CA-G.R. SP No. 30474, and (5) since no writ was issued in the ABOGNE Case, no occasion arose for the Court of Appeals to exercise its supervisory power. With respect to CA-G.R. SP No. 31179, the petitioners rehashed their arguments concerning the DARAB's delegation of quasi-judicial powers to its PARADS or RARADs (Regional Agrarian Reform Adjudicators), then admitted that the two sets of complainants seeking to enjoin the private respondents were similarly situated. As such, the cases were proper for consolidation and the DARAB SQO ensured that PARAD Manalang's authority would not be pre-empted by merely referring to the case pending before the latter. Hence, the Court of Appeals' premise that the DARAB's issuance of the SQO interfered with the PARAD case was not accurate as, in effect, the said Order was issued in a case filed directly and pending with the DARAB. In their Comment, the private respondents maintain that the Court of Appeals committed no reversible error in its challenged decision. We resolved to give due course to the petition after the filing of the petitioners' Reply to the Comment of the private respondents, and the latter's Rejoinder thereto. I

Re. CA-G.R. SP No. 30474 The petitioners' first grievance is unfounded. Plainly, the Court of Appeals has certiorari jurisdiction over the PARAD TRO. 7 Such jurisdiction having been invoked with the parties given sufficient opportunity to argue for or against its propriety, the Court of Appeals could, as it did, direct the PARAD to resolve the application for a writ of preliminary injunction within a specified period. The Court of Appeals must have taken into account the fact that the TRO had already expired, and as shown by the pleadings of the parties, there was an urgent need to resolve the issue. The petitioners ought to remember that under the DARAB Revised Rules of Procedure (hereafter DARAB Revised Rules), it is during the lifetime of the TRO that the parties may be required to present evidence to substantiate their respective positions on the incident and on the main issue or issues of the case. 8 As a matter of fact, in the PARAD TRO of 10 March 1993, PARAD Manalang already set the hearing on the application for a writ "on March 31 1993 at 1:00 p.m." 9 Indisputably, the 10-day period fixed by the Court of Appeals, counted from PARAD Manalang's receipt of a copy of the decision, can by no means be considered arbitrary or hasty. The petitioners equally failed to realize that the Court of Appeals impliedly, yet effectively, extended the lapsed TRO by enjoining the petitioners in CA-G.R. SP No. 30474 and CA-G.R. SP No. 31179 (the respondents in the ABOGNE Case and the BEA Case) from bulldozing or in any way disturbing the complainants in the said cases in their possession. 10 As the petitioners did not question the propriety of the latter, they cannot now be allowed to be duplicitous. We likewise wish to state that there was another, more persuasive reason why CA-G.R. SP No. 30474 should be dismissed, viz., the prematurity of the petition, which amounted to a lack of cause of action. We note that the petition in CA-G.R. SP No. 30474 was filed on 19 March 1993, 11 shortly after the private respondents' "complaint" 12 to nullify the PARAD's TRO was filed with the DARAB on 12 March 1993. It is precisely for this reason that the petitioners herein, as the respondents in CA-G.R. SP No. 30474, asserted in their answer that exhaustion of administrative remedies was not had below, hence the petition "lacks a cause of action for being evidently premature." 13 The "complaint," however disguised, was in reality nothing but an appeal to the DARAB from the PARAD order granting the TRO on the ground of grave abuse of discretion. This was, therefore, a matter covered by 1 and 2, Rule XIII of the DARAB Revised Rules. Among those matters which may be appealed is an "order or decision of the Regional or Provincial Adjudicator," on the ground of "grave abuse of discretion on the part of the Regional or Provincial Adjudicator." This appeal is, undoubtedly, an administrative remedy, which has

not been shown to be inadequate. Not having yet fully exhausted the administrative remedies which they had already invoked, the private respondents cannot be permitted to abandon the same at their chosen time and leisure and invoke the jurisdiction of the regular courts. 14 Failure to exhaust administrative remedies is fatal to a party's cause of action and a dismissal based on that ground is tantamount to a dismissal based on lack of cause of action. 15 II Re: CA-G.R. SP No. 31179 Likewise, the Court of Appeals correctly set aside the DARAB SQO of 6 May 1993 and annulled all proceedings in DARAB Case No. 0100-93 (Reg. Case No. IV-RI-0075-93). Under the DARAB Revised Rules, the DARAB was without authority to initially take cognizance of the case. In insisting that the DARAB had jurisdiction over the BEA Case (DARAB Case No. 0100-93 [Reg. Case No. IV-RI-0075]), the petitioners posit that the DAR/DARAB was vested by 50 of R.A. No. 6657 with primary jurisdiction to determine and adjudicate agrarian reform matters, and exclusive original jurisdiction over all matters involving the implementation of agrarian reform, subject to the exceptions therein provided. Further, the DAR/DARAB never abdicated, but merely delegated that authority to the RARADs and the PARADs under the DARAB Revised Rules; thus, the fact that a similar case was already pending with any of the PARADs (as it relates to provincial coverage) or RARADs (as to administrative regions of the DAR) did not, by itself, automatically divest the DARAB of its jurisdictional competence. The petitioners finally argue that since "the function/authority/jurisdiction of the PARADs/RARADs, is only DELEGATED . . . DAR/DARAB, cannot . . . be said to have totally unloaded the power/responsibility conferred by statute, to the delegate." As to the DARAB SQO, the petitioners claim that it was issued under the DARAB's original jurisdiction or in aid of its appellate jurisdiction. We find the petitioners' theses extremely difficult to divine and their arguments a bit convoluted. There is an obvious effort to either fashion out a bizarre interpretation of or to suspend the DARAB Revised Rules to justify the DARAB's assumption of jurisdiction over the BEA Case (DARAB Case No. 0199-93 [Reg. Case No. IV-RI-0100-93]). It must be stressed that under 50 of R.A. No. 6657, it is the DAR which is vested with primary jurisdiction to determine and adjudicate agrarian reform matters, and exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive

original jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources. Further exceptions to the DAR's exclusive original jurisdiction are provided for in 56 and 57 of the Act which vest in the trial courts (designated by the Supreme Court as Special Agrarian Courts) original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners and the prosecution of all criminal offenses under the Act. In order "to achieve a just, expeditious and inexpensive determination of every action or proceeding before it," the DAR is mandated "to adopt a uniform rule of procedure," 16 which is, at present, the DARAB Revised Rules. Thereunder, the DAR's exclusive original jurisdiction is exercised through hierarchically arranged agencies, namely, the DARAB, RARAD and PARAD. The latter two exercise "delegated authority," while the first exercises appellate jurisdiction over resolutions, orders, decisions and other dispositions of the RARAD and the PARAD, and "functional supervision" over the RARAD and the PARAD. 1 to 5, Rule II (jurisdiction of the Adjudication Board) of the DARAB Revised Rules specifically provide as follows: Sec. 1. Primary, original and appellate jurisdiction The Agrarian Reform Adjudication Board shall have primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive order Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing rules and regulations. xxx xxx xxx Sec. 2. Delegated Jurisdiction. The Regional Agrarian Reform Adjudicators (RARAD) and the Provincial Agrarian Reform Adjudicators (PARAD) are empowered to receive, hear, determine and adjudicate all agrarian cases and disputes, and incidents in connection therewith, arising within their respective territorial jurisdiction. Sec. 3. Functional Relationship. The Board shall exercise functional supervision over the RARADs; and the PARADs. For administrative purposes, however, the RARADs and the PARADs are deemed to form part of the DAR Regional Office where they are stationed, and as such, shall be given administrative support by their

respective Regional and Provincial offices, in terms of office space, personnel services, equipment and supply, and other facilities. Sec. 4. Role of the RARAD. The RARAD shall be the Executive Adjudicator in his region directly responsible to the Board. As such, he shall coordinate and monitor the work of the PARADs in his region and see to it that their dockets do not remain clogged. He shall receive, hear, and adjudicate the following cases: (a) cases that cannot be handled by the PARAD on account of inhibition or disqualification; (b) cases brought directly before him which for some cogent reason, cannot be properly handled by the PARAD concerned; (c) cases of such complexity and sensitivity that the decision thereof would constitute an important precedent affecting regional or national interests; and (d) such other cases which the Board may assign to him. Sec. 5. Appellate Jurisdiction. The Board shall have exclusive appellate jurisdiction to review, reverse, modify, alter or affirm resolutions, orders, decisions, and other dispositions of its RARAD and PARAD. While 1, 2 and 3, Rule IV (Commencement of Actions, Venue and Cause of Action) of the DARAB Revised Rules read as follows: Sec. 1. Complaint or Petition. An action before the Adjudication Board or its Adjudicators, shall be initiated by filing a complaint or petition with the Provincial Agrarian Reform Adjudicator (PARAD) of the Province where the land is located. . . . Sec. 2. Venue. (a) All actions shall be brought before the PARAD of the province where the land or other property involved is located. . .. Sec. 3. One suit for a single cause of action. Multiple suits based on a single cause of action for the enforcement or protection of a right or prevention or redress of a wrong shall not be allowed. If a

single cause of action is split and two (2) or more complaints or petitions are instituted for different parts thereof, the filing of the first complaint or petition may be pleaded as a ground for dismissal of the others, and a judgment on the merits in any one of them may be availed of as a bar to the others. To avoid multiplicity of suits, 3, Rule VIII of the DARAB Revised Rules provides: Sec. 3. Totality of Case Assigned. When a case is assigned to a RARAD or PARAD, any or all incidents thereto shall be considered assigned to him, and the same shall be disposed of in the same proceedings to avoid multiplicity of suits or proceedings. It indisputably follows that all actions pursued under the exclusive original jurisdiction of the DAR, in accordance with 50 of R.A. No. 6657, must be commenced in the PARAD of the province where the property is located and that the DARAB only has appellate jurisdiction to review the PARAD's orders, decisions and other dispositions. Consequently, the DARAB was not possessed of jurisdiction to take cognizance, in the first instance, of the BEA Case (DARAB Case No. 0100-93 (Reg. Case No. IV-RI-0075-93]). In fact, it was fully aware of the ABOGNE Case (PARAD Case No. IV-RI-0075-93), for which reason it indicated in parenthesis the latter's docket number after the original docket number of the case originally assigned to the BEA Case. The DARAB should have forthwith indorsed or referred the case to the PARAD of Rizal, which would then either treat it as a separate complaint to be consolidated with PARAD Case No. IV-RI-0075-93, or consider it a complaint in intervention in the latter. The aforementioned 3, Rule VIII of the DARAB Revised Rules dictated such a course of action on the part of the DARAB. Neither may the DARAB now claim that it issued the SQO in aid of its appellate jurisdiction, since it recognized, as an original complaint, the BEA Case. Needless to state, the DARAB was without authority to issue the SQO, much less the warrant of arrest. Its action was a clear violation of its DARAB Revised Rules. Any suggestion that it has unfettered discretion to suspend its own rules is unacceptable. For one, DARAB "should have set the example or observance of orderly procedure," as stated by the Court of Appeals; for another, it would render its own Revised Rules of Procedure uncertain and whose permanence would be dependent upon the instability of the whims and caprices of the DARAB.

WHEREFORE, the instant petition is hereby DENIED. The challenged Decision of 23 September 1993 and Resolution of 27 December 1993 of the Court of Appeals (former Special Third Division) in the consolidated cases CA-G.R. SP Nos. 30474 and 31779, are hereby AFFIRMED. No pronouncements as to costs. SO ORDERED. Narvasa, C.J., Melo, Francisco and Panganiban, JJ., concur. Footnotes 1 Original Record (OR), CA-G.R. SP Nos. 30474 and 31779, 139149; Rollo, 27-37. Per Mendoza, J. (now Associate Justice of the Supreme Court), with Lagamon and Pardo, JJ., concurring. 2 Id., 174-176; Id., 38-40. 3 Entitled "An Art Instituting A Comprehensive Agrarian Reform Program to Promote Social Justice and Industrialization, Providing the Mechanism for its Implementation, and for Other Purposes." 4 OR, 150-165. 5 Supra note 2. 6 OR, 175; Rollo, 39. 7 1 Rule XIV, DARAB Revised Rules of Procedure; 54, R.A. No. 6657. 8 3 Rule X, DARAB Revised Rules of Procedure. 9 OR, 18. 10 Rollo, 37. 11 OR, 1-11. 12 Id., 67 et seq. This complaint is Annex "1" of the Answer therein. 13 Id., 63 citing Pestaas v. Dyogi, 81 SCRA 574 [1978]; Aboitiz and Co., Inc. v. Collector of Customs, 83 SCRA 265 [1978].

14 See Teotico v. Agda, 197 SCRA 675 [1991]. 15 See Baguioro v. Basa, 214 SCRA 437 [1992]. 16 Second paragraph, 50, RA. No. 6657.

Republic Act No. 9700

August 7, 2009

AN ACT STRENGTHENING THE COMPREHENSIVE AGRARIAN REFORM PROGRAM (CARP), EXTENDING THE ACQUISITION AND DISTRIBUTION OF ALL AGRICULTURAL LANDS, INSTITUTING NECESSARY REFORMS, AMENDING FOR THE PURPOSE CERTAIN PROVISIONS OF REPUBLIC ACT NO. 6657, OTHERWISE KNOWN AS THE COMPREHENSIVE AGRARIAN REFORM LAW OF 1988, AS AMENDED, AND APPROPRIATING FUNDS THEREFOR Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:: Section1. Section 2 of Republic Act No. 6657, as amended, otherwise known as the Comprehensive Agrarian Reform Law of 1988, is hereby further amended to read as follows: "SEC. 2. Declaration of Principles and Policies. - It is the policy of the State to pursue a Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and farmworkers will receive the highest consideration to promote social justice and to move the nation toward sound rural development and industrialization, and the establishment of owner cultivatorship of economic-size farms as the basis of Philippine agriculture. "The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and efficient use of human and natural resources, and which are competitive in both domestic and foreign markets: Provided, That the conversion of agricultural lands into industrial, commercial or residential lands shall take into account, tillers' rights and national food security. Further, the State shall protect Filipino enterprises against unfair foreign competition and trade practices. "The State recognizes that there is not enough agricultural land to be divided and distributed to each farmer and regular farmworker so that each one can own his/her economic-size family farm. This being the case, a meaningful agrarian reform program to uplift the lives and economic status of the farmer and his/her children can only be achieved through simultaneous industrialization aimed at developing a self-reliant and independent national economy effectively controlled by Filipinos.

"To this end, the State may, in the interest of national welfare or defense, establish and operate vital industries. "A more equitable distribution and ownership of land, with due regard to the rights of landowners to just compensation, retention rights under Section 6 of Republic Act No. 6657, as amended, and to the ecological needs of the nation, shall be undertaken to provide farmers and farmworkers with the opportunity to enhance their dignity and improve the quality of their lives through greater productivity of agricultural lands. "The agrarian reform program is founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to the priorities and retention limits set forth in this Act, taking into account ecological, developmental, and equity considerations, and subject to the payment of just compensation. The State shall respect the right of small landowners, and shall provide incentive for voluntary land-sharing. "As much as practicable, the implementation of the program shall be community-based to assure, among others, that the farmers shall have greater control of farmgate prices, and easier access to credit. "The State shall recognize the right of farmers, farmworkers and landowners, as well as cooperatives and other independent farmers organizations, to participate in the planning, organization, and management of the program, and shall provide support to agriculture through appropriate technology and research, and adequate financial, production, marketing and other support services. "The State shall recognize and enforce, consistent with existing laws, the rights of rural women to own and control land, taking into consideration the substantive equality between men and women as qualified beneficiaries, to receive a just share of the fruits thereof, and to be represented in advisory or appropriate decision-making bodies. These rights shall be independent of their male relatives and of their civil status. "The State shall apply the principles of agrarian reform, or stewardship, whenever applicable, in accordance with law, in the disposition or utilization of other natural resources, including lands of the public domain, under lease or concession, suitable to agriculture, subject to prior rights,

homestead rights of small settlers and the rights of indigenous communities to their ancestral lands. "The State may resettle landless farmers and farm workers in its own agricultural estates, which shall be distributed to them in the manner provided by law. "By means of appropriate incentives, the State shall encourage the formation and maintenance of economic-size family farms to be constituted by individual beneficiaries and small landowners. "The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential use of communal marine and fishing resources, both inland and offshore. It shall provide support to such fishermen through appropriate technology and research, adequate financial, production and marketing assistance and other services. The State shall also protect, develop and conserve such resources. The protection shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion. Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources. "The State shall be guided by the principles that land has a social function and land ownership has a social responsibility. Owners of agricultural land have the obligation to cultivate directly or through labor administration the lands they own and thereby make the land productive. "The State shall provide incentives to landowners to invest the proceeds of the agrarian reform program to promote industrialization, employment and privatization of public sector enterprises. Financial instruments used as payment for lands shall contain features that shall enhance negotiability and acceptability in the marketplace. "The State may lease undeveloped lands of the public domain to qualified entities for the development of capital-intensive farms, and traditional and pioneering crops especially those for exports subject to the prior rights of the beneficiaries under this Act." Section 2. Section 3 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 3. Definitions. - For the purpose of this Act, unless the context indicates otherwise:

"x x x "(f) Farmer refers to a natural person whose primary livelihood is cultivation of land or the production of agricultural crops, livestock and/or fisheries either by himself/herself, or primarily with the assistance of his/her immediate farm household, whether the land is owned by him/her, or by another person under a leasehold or share tenancy agreement or arrangement with the owner thereof. "x x x "(1) Rural women refer to women who are engaged directly or indirectly in farming and/or fishing as their source of livelihood, whether paid or unpaid, regular or seasonal, or in food preparation, managing the household, caring for the children, and other similar activities." Section 3. Section 4 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 4.Scope. -The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture:Provided, That landholdings of landowners with a total area of five (5) hectares and below shall not be covered for acquisition and distribution to qualified beneficiaries. "More specifically, the following lands are covered by the CARP: "(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain; "(b) All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraph; "(c) All other lands owned by the Government devoted to or suitable for agriculture; and

"(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon. "A comprehensive inventory system in consonance with the national land use plan shall be instituted by the Department of Agrarian Reform (DAR), in accordance with the Local Government Code, for the purpose of properly identifying and classifying farmlands within one (1)year from effectivity of this Act, without prejudice to the implementation of the land acquisition and distribution." Section 4. There shall be incorporated after Section 6 of Republic Act No. 6657, as amended, new sections to read as follows: "SEC. 6-A. Exception to Retention Limits. - Provincial, city and municipal government ,units acquiring private agricultural lands by expropriation or other modes of acquisition to be used for actual, direct and exclusive public purposes, such as roads and bridges, public markets, school sites, resettlement sites, local government facilities, public parks and barangay plazas or squares, consistent with the approved local comprehensive land use plan, shall not be subject to the five (5)-hectare retention limit under this Section and Sections 70 and 73(a) of Republic Act No. 6657, as amended: Provided, That lands subject to CARP shall first undergo the land acquisition and distribution process of the program: Provided, further, That when these lands have been subjected to expropriation, the agrarian reform beneficiaries therein shall be paid just compensation." "SEC. 6-B. Review of Limits of Land Size. - Within six (6) months from the effectivity of this Act, the DAR shall submit a comprehensive study on the land size appropriate for each type of crop to Congress for a possible review of limits of land sizes provided in this Act." Section 5. Section 7 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 7. Priorities. - The DAR, in coordination with the Presidential Agrarian Reform Council (PARC) shall plan and program the final acquisition and distribution of all remaining unacquired and undistributed agricultural lands from the effectivity of this Act until June 30, 2014. Lands shall be acquired and distributed as follows: "Phase One: During the five (5)-year extension period hereafter all remaining lands above fifty (50) hectares shall be covered for purposes of agrarian reform upon the effectivity of this Act. All private agricultural lands

of landowners with aggregate landholdings in excess of fifty (50) hectares which have already been subjected to a notice of coverage issued on or before December 10, 2008; rice and corn lands under Presidential Decree No. 27; all idle or abandoned lands; all private lands voluntarily offered by the owners for agrarian reform: Provided, That with respect to voluntary land transfer, only those submitted by June 30, 2009 shall be allowed Provided, further, That after June 30, 2009, the modes of acquisition shall be limited to voluntary offer to sell and compulsory acquisition: Provided, furthermore, That all previously acquired lands wherein valuation is subject to challenge by landowners shall be completed and finally resolved pursuant to Section 17 of Republic Act No. 6657, as amended: Provided, finally, as mandated by the Constitution, Republic Act No. 6657, as amended, and Republic Act No. 3844,as amended, only farmers (tenants or lessees) and regular farmworkers actually tilling the lands, as certified under oath by the Barangay Agrarian Reform Council (BARC) and attested under oath by the landowners, are the qualified beneficiaries. The intended beneficiary shall state under oath before the judge of the city or municipal court that he/she is willing to work on the land to make it productive and to assume the obligation of paying the amortization for the compensation of the land and the land taxes thereon; all lands foreclosed by government financial institutions; all lands acquired by the Presidential Commission on Good Government (PCGG); and all other lands owned by the government devoted to or suitable for agriculture, which shall be acquired and distributed immediately upon the effectivity of this Act, with the implementation to be completed by June 30, 2012; "Phase Two: (a) Lands twenty-four (24) hectares up to fifty (50) hectares shall likewise be covered for purposes of agrarian reform upon the effectivity of this Act. All alienable and disposable public agricultural lands; all arable public agricultural lands under agro-forest, pasture and agricultural leases already cultivated and planted to crops in accordance with Section 6, Article XIII of the Constitution; all public agricultural lands which are to be opened for new development and resettlement: and all private agricultural lands of landowners with aggregate landholdings above twenty-four (24) hectares up to fifty (50) hectares which have already been subjected to a notice of coverage issued on or before December 1O, 2008, to implement principally the rights of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till, which shall be distributed immediately upon the effectivity of this Act, with the implementation to be completed by June 30, 2012; and

"(b) All remaining private agricultural lands of landowners with aggregate landholdings in excess of twenty-four (24) hectares, regardless as to whether these have been subjected to notices of coverage or not, with the implementation to begin on July 1, 2012 and to be completed by June 30, 2013; "Phase Three: All other private agricultural lands commencing with large landholdings and proceeding to medium and small landholdings under the following schedule: "(a) Lands of landowners with aggregate landholdings above ten (10) hectares up to twenty- four (24)hectares, insofar as the excess hectarage above ten (10) hectares is concerned, to begin on July 1,2012 and to be completed by June 30, 2013; and "(b) Lands of landowners with aggregate landholdings from the retention limit up to ten (10) hectares, to begin on July 1, 2013 and to be completed by June 30, 2014; to implement principally the right of farmers and regular farmworkers who are landless, to own directly or collectively the lands they till. "The schedule of acquisition and redistribution of all agricultural lands covered by this program shall be made in accordance with the above order o f priority, which shall be provided in the implementing rules to be prepared by the PARC, taking into consideration the following: the landholdings wherein the farmers are organized and understand ,the meaning and obligations of farmland ownership; the distribution of lands to the tillers at the earliest practicable time; the enhancement of agricultural productivity; and the availability of funds and resources to implement and support the program: Provided, That the PARC shall design and conduct seminars, symposia, information campaigns, and other similar programs for farmers who are not organized or not covered by any landholdings. Completion by these farmers of the aforementioned seminars, symposia, and other similar programs shall be encouraged in the implementation of this Act particularly the provisions of this Section. "Land acquisition and distribution shall be completed by June 30, 2014 on a province-by- province basis. In any case, the PARC or the PARC Executive Committee (PARC EXCOM), upon recommendation by the Provincial Agrarian Reform Coordinating Committee (PARCCOM), may declare certain provinces as priority land reform areas, in which case the acquisition and distribution of private agricultural lands therein under advanced phases may be implemented ahead of the above schedules on

the condition that prior phases in these provinces have been completed: Provided, That notwithstanding the above schedules, phase three (b) shall not be implemented in a particular province until at least ninety percent (90%) of the provincial balance of that particular province as of January 1, 2009 under Phase One, Phase Two (a), Phase Two (b),,and Phase Three (a), excluding lands under the jurisdiction of the Department of Environment and Natural Resources (DENR), have been successfully completed. "The PARC shall establish guidelines to implement the above priorities and distribution scheme, including the determination of who are qualified beneficiaries: Provided, That an owner-tiller may be a beneficiary of the land he/she does not own but is actually cultivating to the extent of the difference between the area of the land he/she owns and the award ceiling of three (3) hectares: Provided, further, That collective ownership by the farmer beneficiaries shall be subject to Section 25 of Republic Act No. 6657, as amended: Provided, furthermore, That rural women shall be given the opportunity t o participate in the development planning and implementation of this Act: Provided, finally, That in no case should the agrarian reform beneficiaries' sex, economic, religious, social, cultural and political attributes adversely affect the distribution of lands." Section 6. The title of Section 16of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 16. Procedure for Acquisition and Distribution of Private Lands." Section 7. Section 17of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 17. Determination of Just Compensation. - In determining just compensation, the cost of acquisition of the land, the value of the standing crop, the current: value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, the assessment made by government assessors, and seventy percent (70%) of the zonal valuation of the Bureau of Internal Revenue (BIR), translated into a basic formula by the DAR shall be considered, subject to the final decision of the proper court. The social and economic benefits contributed by the farmers and the farmworkers and by the Government t o the property as well as the nonpayment of taxes or loans secured from any government financing institution on the said land shall be considered as additional factors to determine its valuation."

Section 8. There shall be incorporated after Section 22 of Republic Act No. 6657, as amended, a new section to read as follows: "SEC. 22-A. Order of Priority. - A landholding of a landowner shall be distributed first to qualified beneficiaries under Section 22, subparagraphs (a) and (b) of that same landholding up to a maximum of three (3) hectares each. Only when these beneficiaries have all received three (3) hectares each, shall the remaining portion of the landholding, if any, be distributed to other beneficiaries under Section 22, subparagraphs (c), (d), (e), (f), and (g)." Section 9. Section 24 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 24. Award to Beneficiaries. - The rights and responsibilities of the beneficiaries shall commence from their receipt of a duly registered emancipation patent or certificate of land ownership award and their actual physical possession of the awarded land. Such award shall be completed in not more than one hundred eighty (180) days from the date of registration of the title in the name of the Republic of the Philippines:Provided, That the emancipation patents, the certificates of land ownership award, and other titles issued under any agrarian reform program shall be indefeasible and imprescriptible after one (1) year from its registration with the Office of the Registry of Deeds, subject to the conditions, limitations and qualifications of this Act, the property registration decree, and other pertinent laws. The emancipation patents or the certificates of land ownership award being titles brought under the operation of the torrens system, are conferred with the same indefeasibility and security afforded to all titles under the said system, as provided for by Presidential Decree No. 1529, as amended by Republic Act No. 6732. "It is the ministerial duty of the Registry of Deeds to register the title of the land in the name of the Republic of the Philippines, after the Land Bank of the Philippines (LBP) has certified that the necessary deposit in the name of the landowner constituting full payment in cash or in bond with due notice to the landowner and the registration of the certificate of land ownership award issued to the beneficiaries, and to cancel previous titles pertaining thereto. "Identified and qualified agrarian reform beneficiaries, based on Section 22 of Republic Act No. 6657, as, amended, shall have usufructuary rights over the awarded land as soon as the DAR takes possession of such land, and

such right shall not be diminished even pending the awarding of the emancipation patent or the certificate of land ownership award. "All cases involving the cancellation of registered emancipation patents, certificates of land ownership award, and other titles issued under any agrarian reform program are within the exclusive and original jurisdiction of the Secretary of the DAR." Section 10. Section 25 of Republic Act So. 6657, as amended, is hereby further amended to read as follows: "SEC.25. Award Ceilings for Beneficiaries. - Beneficiaries shall be awarded an area not exceeding three (3) hectares, which may cover a contiguous tract of land or several parcels of land cumulated up to the prescribed award limits. The determination of the size of the land for distribution shall consider crop type, ,soil type, weather patterns and other pertinent variables or factors which are deemed critical for the success of the beneficiaries. "For purposes of this Act, a landless beneficiary is one who owns less than three (3) hectares of agricultural land. "Whenever appropriate, the DAR shall encourage the agrarian reform beneficiaries to form or join farmers' cooperatives for purposes of affiliating with existing cooperative banks in their respective provinces or localities, as well as forming blocs of agrarian reform beneficiaries, corporations, and partnerships and joining other farmers' collective organizations, including irrigators' associations: Provided, That the agrarian reform beneficiaries shall be assured of corresponding shares in the corporation, seats in the board of directors, and an equitable share in the profit. "In general, the land awarded to a farmer- beneficiary should be in the form of an individual title, covering one (1)contiguous tract or several parcels of land cumulated up to a maximum of three (3) hectares. "The beneficiaries may opt for collective ownership, such as co-workers or farmers cooperative or some other form of collective organization and for the issuance of collective ownership titles: Provided, That the total area that may be awarded shall not exceed the total number of co-owners or members of the cooperative or collective organization multiplied by the award limit above prescribed, except in meritorious cases as determined by the PARC.

"The conditions for the issuance of collective titles are as follows: "(a) The current farm management system of the land covered by CARP will not be appropriate for individual farming of farm parcels; "(b) The farm labor system is specialized, where the farmworkers are organized by functions and not by specific parcels such as spraying, weeding, packing and other similar functions; "(c) The potential beneficiaries are currently not farming individual parcels hut collectively work on large contiguous areas; and "(d) The farm consists of multiple crops being farmed in an integrated manner or includes non- crop production areas that are necessary for the viability of farm operations, such as packing plants, storage areas, dikes, and other similar facilities that cannot be subdivided or assigned to individual farmers. "For idle and abandoned lands or underdeveloped agricultural lands to be covered by CARP, collective ownership shall be allowed only if the beneficiaries opt for it and there is a clear development plan that would require collective farming or integrated farm operations exhibiting the conditions described above. Otherwise, the land awarded to a farmerbeneficiary should be in the form of a n individual title, covering one (1) contiguous tract or several parcels of land cumulated up to a maximum of three (3) hectares. "In case of collective ownership, title to the property shall be issued in the name of the co- owners or the cooperative or collective organization as the case may be. If the certificates of land ownership award are given to cooperatives then the names of the beneficiaries must also be listed in the same certificate of land ownership award. "With regard to existing collective certificates of land ownership award, the DAR should immediately undertake the parcelization of said certificates of land ownership award, particularly those that do not exhibit the conditions for collective ownership outlined above. The DAR shall conduct a review and redocumentation of all the collective certificates of land ownership award. The DAR shall prepare a prioritized list of certificates of land ownership award to be parcelized. The parcelization shall commence immediately upon approval of this Act and shall not exceed a period of three (3) years. Only those existing certificates of land ownership award

that are collectively farmed or are operated in an integrated manner shall remain as collective." Section 11. Section 26 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "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 annual amortization shall start one (1) year from the date of the certificate of land ownership award registration. However, if the occupancy took place after the certificate of land ownership award registration, the amortization shall start one (1) year from actual occupancy. The payments for the first three (3) years after the award shall 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 production as established by the DAR. Should the scheduled annual payments after the fifth (5th) 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 shall reduce the interest rate and/or reduce the principal obligation to make the repayment affordable. "The LBP shall have a lien by way of mortgage on the land awarded to the beneficiary; and this mortgage may be foreclosed by the LBP for nonpayment of an aggregate of three (3) annual amortizations. The LBP shall advise the DAR of such proceedings and the latter shall subsequently award the forfeited landholding to other qualified beneficiaries. A beneficiary whose land, as provided herein, has been foreclosed shall thereafter be permanently disqualified from becoming a beneficiary under this Act." Section 12. Section 27 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 27. Transferability of Awarded Lands. - Lands acquired by beneficiaries under this Act or other agrarian reform laws shall not be sold, transferred or conveyed except through hereditary succession, or to the government, or to the LBP, or to other qualified beneficiaries through the DAR for a period of ten (10) years: Provided, however, That the children or the spouse of the transferor shall have a right to repurchase the land from the government or LBP within a period of two (2) years. Due notice of the availability of the land shall be given by the LBP to the BARC of the

barangay where the land is situated. The PARCCOM, as herein provided, shall, in turn, be given due notice thereof by the BARC. "The title of the land awarded under the agrarian reform must indicate that it is an emancipation patent or a certificate of land ownership award and the subsequent transfer title must also indicate that it is an emancipation patent or a certificate of land ownership award. "If the land has not yet been fully paid by the beneficiary, the rights to the land may be transferred or conveyed, with prior approval of the DAR, to any heir of the beneficiary or to any other beneficiary who, as a condition for such transfer or conveyance, shall cultivate the land himself/herself. Failing compliance herewith, the land shall be transferred to the LBP which shall give due notice of the availability of the land in the manner specified in the immediately preceding paragraph. "In the event of such transfer to the LBP, the latter shall compensate the beneficiary in one lump sump for the amounts the latter has already paid, together with the value of improvements he/she has made on the land." Section 13. Section 36 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 36. Funding for Support Services. - In order to cover the expenses and cost of support services, at least forty percent (40%) of all appropriations for agrarian reform during the five (5) year extension period shall be immediately set aside and made available for this purpose: Provided, That the DAR shall pursue integrated land acquisition and distribution and support services strategy requiring a plan to be developed parallel to the land acquisition and distribution process. The planning and implementation for land acquisition and distribution shall be hand-in-hand with support services delivery: Provided, further, That for the next five (5) years, as far as practicable, a minimum of two (2) Agrarian Reform Communities (ARCs) shall be established by the DAR, in coordination with the local government units, non-governmental organizations, 'community-based cooperatives and people's organizations in each legislative district with a predominant agricultural population: Provided, furthermore, That the areas in which the ARCS are to be established shall have been substantially covered under the provisions of this Act and other agrarian or land reform laws: Provided, finally, That a complementary support services delivery strategy for existing agrarian reform beneficiaries that are not in barangays within the ARCs shall be adopted by the DAR.

"For this purpose, an Agrarian Reform Community is composed and managed by agrarian reform beneficiaries who shall be willing to be organized and to undertake the integrated development of an area and/or their organizations/ cooperatives. In each community, the DAR, together with the agencies and organizations abovementioned, shall identify the farmers' association, cooperative or their respective federations approved by the farmers- beneficiaries that shall take the lead in the agricultural development of the area. In addition, the DAR, in close coordination with the congressional oversight committee created herein, with due notice to the concerned representative of the legislative district prior to implementation shall be authorized to package proposals and receive grants, aids and other forms of financial assistance from any source" Section 14. Section 37 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 37. Support Services for the Agrarian Reform Beneficiaries. - The State shall adopt the integrated policy of support services delivery to agrarian reform beneficiaries. To this end, the DAR, the Department of Finance, and the Bangko Sentral ng Pilipinas (BSP) shall institute reforms to liberalize access to credit by agrarian reform beneficiaries. The PARC shall ensure that support services for agrarian reform beneficiaries are provided, such as: "(a) Land surveys and titling; "(b) Socialized terms on agricultural credit facilities; "Thirty percent (30%) of all appropriations for support services referred to in Section 36 of Republic Act No. 6657, as amended, shall be immediately set aside and made available for agricultural credit facilities: Provided, That one-third (1/3) of this segregated appropriation shall be specifically allocated for subsidies to support the initial capitalization for agricultural production to new agrarian reform beneficiaries upon the awarding of the emancipation patent or the certificate of land ownership award and the remaining twothirds (2/3) shall be allocated to provide access to socialized credit to existing agrarian reform beneficiaries, including the leaseholders: Provided, further, the LBP and other concerned government financial institutions, accredited savings and credit cooperatives, financial service cooperatives and accredited cooperative banks shall provide the delivery system for

disbursement of the above financial assistance to individual agrarian reform beneficiaries, holders of collective titles and cooperatives. "For this purpose, all financing institutions may accept as collateral for loans the purchase orders, marketing agreements or expected harvests: Provided, That loans obtained shall be used in the improvement or development of the farm holding of the agrarian reform beneficiary or the establishment of facilities which shall enhance production or marketing of agricultural products of increase farm income therefrom: Provided, further, That of the remaining seventy percent (70%) for the support services, fifteen percent (15%) shall be earmarked for farm inputs as requested by the duly accredited agrarian reform beneficiaries' organizations, such as, but not limited to: (1) seeds, seedlings and/or planting materials; (2) organic fertilizers; (3) pesticides; (4)herbicides; and (5) farm animals, implements/'machineries; and five percent (5%) for seminars, trainings and the like to help empower agrarian reform beneficiaries. "(c) Extension services by way of planting, cropping, production and post-harvest technology transfer, as well as marketing and management assistance and support to cooperatives and farmers' organizations; "(d) Infrastructure such as, but not limited to, access trails, minidams, public utilities, marketing and storage facilities; "(e) Research, production and use of organic fertilizers and other local substances necessary in farming and cultivation; and "(f) Direct and active DAR assistance in the education and organization of actual and potential agrarian reform beneficiaries, at the barangay, municipal, city, provincial, and national levels, towards helping them understand their rights and responsibilities as ownercultivators developing farm- related trust relationships among themselves and their neighbors, and increasing farm production and profitability with the ultimate end of empowering them to chart their own destiny. The representatives of the agrarian reform beneficiaries to the PARC shall be chosen from the 'nominees of the duly accredited agrarian reform beneficiaries' organizations, or in its absence, from organizations of actual and potential agrarian reform beneficiaries as forwarded to and processed by the PARC EXCOM.

"The PARC shall formulate policies to ensure that support services for agrarian reform beneficiaries shall be provided at all stages of the program implementation with the concurrence of the concerned agrarian reform beneficiaries. "The PARC shall likewise adopt, implement, and monitor policies and programs to ensure the fundamental equality of women and men in the agrarian reform program as well as respect for the human rights, social protection, and decent working conditions of both paid and unpaid men and women farmer-beneficiaries. "The Bagong Kilusang Kabuhayan sa Kaunlaran (BKKK) Secretariat shall be transferred and attached t o the LBP, for its supervision including all its applicable and existing funds, personnel, properties, equipment and records. "Misuse or diversion of the financial and support services herein provided shall result in sanctions against the beneficiary guilty thereof, including the forfeiture of the land transferred to him/her or lesser sanctions as may be provided by the PARC, without prejudice to criminal prosecution." Section 15. There shall be incorporated after Section 37 of Republic Act No. 6657, as amended, a new section to read as follows: "SEC. 37-A. Equal Support Services for Rural Women. - Support services shall be extended equally to women and men agrarian reform beneficiaries. "The PARC shall ensure that these support services, as provided for in this Act, integrate the specific needs and well-being of women farmerbeneficiaries taking into account the specific requirements of female family members of farmer- beneficiaries. "The PARC shall also ensure that rural women will be able to participate in all community activities. To this effect, rural women are entitled to selforganization in order to obtain equal access to economic opportunities and to have access to agricultural credit and loans, marketing facilities and technology, and other support services, and equal treatment in land reform and resettlement schemes. "The DAR shall establish and maintain a women's desk, which will be primarily responsible for formulating and implementing programs and activities related to the protection and promotion of women's rights, as well

as providing an avenue where women can register their complaints and grievances principally related t o their rural activities." Section 16. Section 38 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 38. Support Services for Landowners. - The PARC, with the assistance of such other government agencies and instrumentalities as it may direct, shall provide landowners affected by the CARP and prior agrarian reform programs with the following services: "(a) Investment information, financial and counseling assistance, particularly investment information on government-owned and/or controlled corporations and disposable assets of the government in pursuit of national industrialization and economic independence: "(b) Facilities, programs and schemes for the conversion or exchange of bonds issued for payment of the lands acquired with stocks and bonds issued by the National Government, the BSP and other government institutions and instrumentalities; "(c) Marketing of agrarian reform bonds, as well as promoting the marketability of said bonds in traditional and non-traditional financial markets and stock exchanges: and/or "(d) Other services designed t o utilize productively the proceeds of the sale of such lands for rural industrialization. "A landowner who invests in rural-based industries shall be entitled to the incentives granted to a registered enterprise engaged in a pioneer or preferred area of investment as provided for in the Omnibus Investment Code of 1987,or to such other incentives as the PARC, the LBP, or other government financial institutions shall provide. "The LBP shall redeem a landowner's agrarian reform bonds at face value as an incentive: Provided, That at least fifty percent (50%) of the proceeds thereof shall be invested in a Board of Investments (BOI)-registered company or in any agri-business or agro-industrial enterprise in the region where the CARP-covered landholding is located. An additional incentive of two percent (2%) in cash shall be paid to a landowner who maintains his/her enterprise as a going concern for five (5) years or keeps his/her investments in a BOI- registered firm for the same period: Provided,

further, That the rights of the agrarian reform beneficiaries are not, in any way, prejudiced or impaired thereby. "The DAR, the LBP and the Department of Trade and Industry shall jointly formulate the program to carry out these provisions under the supervision of the PARC: Provided, That in no case shall the landowners' sex, economic, religious, social, cultural and political attributes exclude them from accessing these support services." Section 17. Section 41 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 41. The Presidential Agrarian Reform Council. - The Presidential Agrarian Reform Council (PARC) shall be composed of the President of the Philippines as Chairperson, the Secretary of Agrarian Reform as ViceChairperson and the following as members: Secretaries of the Departments of Agriculture; Environment and Natural Resources; Budget and Management; Interior and Local Government; Public Works and Highways; Trade and Industry; Finance; and Labor and Employment; Director-General of the National Economic and Development Authority; President, Land Bank of the Philippines; Administrator, National Irrigation Administration; Administrator, Land Registration Authority; and six (6) representatives of affected landowners to represent Luzon, Visayas and Mindanao; six (6) representatives of agrarian reform beneficiaries, two (2) each from Luzon, Visayas and Mindanao: Provided, That at least one (1) of them shall be from the indigenous peoples: Provided, further, That at least one (1)of them shall come from a duly recognized national organization of rural women or a national organization of agrarian reform beneficiaries with a substantial number of women members: Provided, finally, That at least twenty percent (20%) of the members of the PARC shall be women but in no case shall they be less than two (Z)." Section 18. Section 50 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 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 DENR.

"It shall not be bound by technical rules of procedure and evidence but shall proceed to hear and decide all cases, disputes or controversies in a most expeditious manner, employing all reasonable means to ascertain the facts of every case in accordance with justice and equity and the merits of the case. Toward this end, it shall adopt a uniform rule of procedure to achieve a just, expeditious and inexpensive determination of every action or proceeding before it. "It shall have the power to summon witnesses, administer oaths, take testimony, require submission of reports, compel the production of books and documents and answers to interrogatories and issuesubpoena, and subpoena duces tecum and to enforce its writs through sheriffs or other duly deputized officers. It shall likewise have the power to punish direct and indirect contempts in the same manner and subject to the same penalties as provided in the Rules of Court. "Responsible farmer leaders shall be allowed to represent themselves, their fellow farmers, or their organizations in any proceedings before the DAR Provided, however, That when there are two or more representatives for any individual or group, the representatives should choose only one among themselves to represent such party or group before any DAB proceedings. "Notwithstanding an appeal to the Court of Appeals, the decision of the DAR shall be immediately executory except a decision or a portion thereof involving solely the issue of just compensation." Section 19. Section 50 of Republic Act No. 6657, as amended, is hereby further amended by adding Section 50-A to read as follows: "SEC. 50-A. Exclusive Jurisdiction on Agrarian Dispute. - No court or prosecutor's office shall take cognizance of cases pertaining to the implementation of the CARP except those provided under Section 57 of Republic Act No. 6657, as amended. If there is an allegation from any of the parties that the case is agrarian in nature and one of the parties is a farmer, farmworker, or tenant, the case shall be automatically referred by the judge or the prosecutor to the DAR which shall determine and certify within fifteen (15) days from referral whether an agrarian dispute exists: Provided, That from the determination of the DAR, an aggrieved party shall have judicial recourse. In cases referred by the municipal trial court and the prosecutor's office, the appeal shall be with the proper regional trial court, and in cases referred by the regional trial court, the appeal shall be to the Court of Appeals.

"In cases where regular courts or quasi-judicial bodies have competent jurisdiction, agrarian reform beneficiaries or identified beneficiaries and/or their associations shall have legal standing and interest to intervene concerning their individual or collective rights and/or interests under the CARP. "The fact of non-registration of such associations with the Securities and Exchange Commission, or Cooperative Development Authority, or any concerned government agency shall not be used against them to deny the existence of their legal standing and interest in a case filed before such courts and quasi-judicial bodies." Section 20. Section 55 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 55. No Restraining Order or Preliminary Injunction. -Except for the Supreme Court, no court in the Philippines shall have jurisdiction to issue any restraining order or writ of preliminary injunction against the PARC, the DAR, or any of its duly authorized or designated agencies in any case, dispute or controversy arising from, necessary to, or in connection with the application, implementation, enforcement, or interpretation of this Act and other pertinent laws on agrarian reform." Section 21. Section 63 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 63. Funding Source. - The amount needed to further implement the CARP as provided in this Act, until June 30, 2014, upon expiration of funding under Republic Act No. 8532 and other pertinent laws, shall be funded from the Agrarian Reform Fund and other funding sources in the amount of at least One hundred fifty billion pesos (P150,000,000,000.00). "Additional amounts are hereby authorized to be appropriated as and when needed to augment the Agrarian Reform Fund in order to fully implement the provisions of this Act during the five (5)-year extension period. "Sources of funding or appropriations shall include the following: "(a) Proceeds of the sales of the Privatization and Management Office (PMO); "e)All receipts from assets recovered and from sales of ill-gotten wealth recovered through the PCGG excluding the amount

appropriated for compensation to victims of human rights violations under the applicable law; "(c) Proceeds of the disposition and development of the properties of the Government in foreign countries, for the specific purposes of financing production credits, infrastructure and other support services required by this Act; "(d) All income and, collections of whatever form and nature arising from the agrarian reform operations, projects and programs of the DAR and other CARP implementing agencies; "(e) Portion of amounts accruing to the Philippines from all sources of official foreign. aid grants and concessional financing from all countries, to be used for the specific purposes of financing productions, credits, infrastructures, and other support services required by this Act: "(f) Yearly appropriations of no less than Five billion pesos (P5,000,000,000.00) from the General Appropriations Act; "(g) Gratuitous financial assistance from legitimate sources; and "(h) Other government funds not otherwise appropriated. "All funds appropriated to implement the provisions of this Act shall be considered continuing appropriations during the period of its implementation: Provided, That if the need arises, specific amounts for bond redemptions, interest payments and other existing obligations arising from the implementation of the program shall be included in the annual General Appropriations Act: Provided, further, That all just compensation payments to landowners, including execution of judgments therefore, shall only be sourced from the Agrarian Reform Fund: Provided, however, That just compensation payments that cannot be covered within the approved annual budget of the program shall be chargeable against the debt service program of the national government, or any unprogrammed item in the General Appropriations Act:Provided, finally, That after the completion of the land acquisition and distribution component of the CARP, the yearly appropriation shall be allocated fully to support services, agrarian justice delivery and operational requirements of the DAR and the other CARP implementing agencies."

Section 22. Section 65 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 65. Conversion of Lands. - After the lapse of five (5) years from its award, when the land ceases to be economically feasible and sound for agricultural purposes, or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes, the DAR, upon application of the beneficiary or the landowner with respect only to his/her retained area which is tenanted, with due notice to the affected parties, and subject to existing laws, may authorize the reclassification or conversion of the land and its disposition: Provided, That if the applicant is a beneficiary under agrarian laws and the land sought to be converted is the land awarded to him/her or any portion thereof, the applicant, after the conversion is granted, shall invest at least ten percent (10%)of the proceeds coming from the conversion in government securities: Provided, further, That the applicant upon conversion shall fully pay the price of the land: Provided, furthermore, That irrigated and irrigable lands, shall not be subject to conversion: Provided, finally, That the National Irrigation Administration shall submit a consolidated data on the location nationwide of all irrigable lands within one (1)year from the effectivity of this Act. "Failure to implement the conversion plan within five (5) years from the approval of such conversion plan or any violation of the conditions of the conversion order due to the fault of the applicant shall cause the land to automatically be covered by CARP." Section 23. Section 68 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 68. Immunity of Government Agencies from Undue Interference. - In cases falling within their jurisdiction, no injunction, restraining order, prohibition or mandamus shall be issued by the regional trial courts, municipal trial courts, municipal circuit trial courts, and metropolitan trial courts against the DAR, the DA, the DENR, and the Department of Justice in their implementation of the program." Section 24. Section 73 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 73. Prohibited Acts and Omissions. - The following are prohibited:

"(a) The ownership or possession, for the purpose of circumventing the provisions of this Act, of agricultural lands in excess of the total retention limits or award ceilings by any person, natural or juridical, except those under collective ownership by farmer-beneficiaries; "(b) The forcible entry or illegal detainer by persons who are not qualified beneficiaries under this Act to avail themselves of the rights and benefits of the Agrarian Reform Program: "(c) Any conversion by , any landowner of his/her agricultural' land into any non-agricultural use with intent to avoid the application of this Act to his/her landholdings and to dispossess his/her bonafide tenant farmers: "(d) The malicious and willful prevention or obstruction by any person, association or entity of the implementation of the CARP; "(e) The sale, transfer, conveyance or change of the nature of lands outside of urban centers and city limits either in whole or in part after the effectivity of this Act, except after final completion of the appropriate conversion under Section 65 of Republic Act No. 6657, as amended. The date of the registration of the deed of conveyance in the Register of Deeds with respect to titled lands and the date of the issuance of the tax declaration to the transferee of the property with respect to unregistered lands, as the case may be, shall be conclusive for the purpose of this Act; "(f) The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary right over the land he/she acquired by virtue of being a beneficiary, in order to circumvent the provisions of this Act; "(g) The unjustified, willful, and malicious act by a responsible officer or officers of the government through the following: "(1) The denial of notice and/or reply to landowners; "(2) The deprivation of retention rights; "(3) The undue or inordinate delay in the preparation of claim folders; or

"(4) Any undue delay, refusal or failure in the payment of just compensation; "(h) The undue delay or unjustified failure of the DAR, the LBP, the PARC, the PARCCOM, and any concerned government agency or any government official or employee to submit the required report, data and/or other official document involving the implementation of the provisions of this Act, as required by the parties or the government, including the House of Representatives and the Senate of the Philippines as well as their respective committees, and the congressional oversight committee created herein; "(i) The undue delay in the compliance with the obligation to certify or attest and/or falsification of the certification or attestation as required under Section 7 of Republic Act No. 6657, as amended; and "(j) Any other culpable neglect or willful violations of the provisions of this Act. "In the case of government officials and employees, a conviction under this Act is without prejudice to any civil case and/or appropriate administrative proceedings under civil service law, rules and regulations. "Any person convicted under this Act shall not be entitled to any benefit provided for in any agrarian reform law or program." Section 25. Section 74 of Republic Act No. 6657, as amended, is hereby further amended to read as follows: "SEC. 74. Penalties. - Any person who knowingly or willfully violates the provisions of this Act shall be punished by imprisonment of not less than one (1) month to not more than three (3) years or a fine of not less than One thousand pesos (P1,000.00) and not more than Fifteen thousand pesos (P15,000.00), or both, at the discretion of the court: Provided, That the following corresponding penalties shall be imposed for the specific violations hereunder: "(a) Imprisonment of three (3) years and one (1) day to six (6) years or a fine of not less than Fifty thousand pesos (P50,000.00)and not more than One hundred fifty thousand pesos (P150,000.00), or both, at the discretion of the court upon any person who violates Section 73, subparagraphs (a), (b), (f), (g), and (h) of Republic Act No. 6657, as amended; and

"(b) Imprisonment of six (6) years and one (1) day to twelve (12) years or a fine of not less than Two hundred thousand pesos (P200,000.00) and not more than One million pesos (P1,000,000.00), or both, at the discretion of the court upon any person who violates Section 73, subparagraphs (c), (d), (e), and (i) of Republic Act No. 6657, as amended. "If the offender is a corporation or association, the officer responsible therefor shall be criminally liable." Section 26. Congressional Oversight Committee. - A Congressional Oversight Committee on Agrarian Reform (COCAR) is hereby created to oversee and monitor the implementation of this Act. It shall be composed of the Chairpersons of the Committee on Agrarian Reform of both Houses of Congress, three (3) Members of the House of Representatives, and three (3) Members of the Senate of the Philippines, to be designated respectively by the Speaker of the House of Representatives and the President of the Senate of the Philippines. The Chairpersons of the Committees on Agrarian Reform of the House of Representatives and of the Senate of the Philippines shall be the Chairpersons of the COCAR. The Members shall receive no compensation; however, traveling and other necessary expenses shall be allowed. In order to carry out the objectives of this Act, the COCAR shall be provided with the necessary appropriations for its operation. An initial amount of Twenty-five million pesos (P25,000,000.00) is hereby appropriated for the COCAR for the first year of its operation and the same amount shall be appropriated every year thereafter. The term of the COCAR shall end six (6) months after the expiration of the extended period of five (5) years. Section 27. Powers and Functions of the COCAR. - The COCAR shall have the following powers and functions: (a) Prescribe and adopt guidelines which shall govern its work; (b) Hold hearings and consultations, receive testimonies and reports pertinent to its specified concerns; (c) Secure from any department, bureau, office or instrumentality of the government such assistance as may be needed, including technical information, preparation and production of reports and submission of

recommendations or plans as it may require, particularly a yearly report of the record or performance of each agrarian reform beneficiary as provided under Section 22 of Republic Act No. 6657, as amended; (d) Secure from the DAR or the LBP information on the amount of just compensation determined to be paid or which has been paid to any landowner; (e) Secure from the DAR or the LBP quarterly reports on the disbursement of funds for the agrarian reform program; (f) Oversee and monitor, in such a manner as it may deem necessary, the actual implementation of the program and projects by the DAR; (g) Summon by subpoena any public or private citizen to testify before it, or require by subpoena duces tecum to produce before it such records, reports, or other documents as may be necessary in the performance of its functions; (h) Engage the services of resource persons from the public and private sectors as well as civil society including the various agrarian reform groups or organizations in the different regions of the country as may be needed; (i) Approve the budget for the work of the Committee and all disbursements therefrom, including compensation of all personnel; (j) Organize its staff and hire and appoint such employees and personnel whether temporary, contractual or on constancy subject to applicable rules; and (k) Exercise all the powers necessary and incidental to attain the purposes for which it is created. Section 28. Periodic Reports. - The COCAR shall submit to the Speaker of the House of Representatives and to the President of the Senate of the Philippines periodic reports on its findings and recommendations on actions to be undertaken by both Houses of Congress, the DAR, and the PARC. Section 29. Access to Information. - Notwithstanding the provisions of Republic Act No. 1405 and other pertinent laws, information on the amount of just compensation paid to any landowner under Republic Act No. 6657, as amended, and other agrarian reform laws shall be deemed public information.

Section 30. Resolution of Case. - Any case and/or proceeding involving the implementation of the provisions of Republic Act No. 6657, as amended, which may remain pending on June 30, 2014 shall be allowed to proceed to its finality and be executed even beyond such date. Section 31. Implementing Rules and Regulations. - The PARC and the DAR shall provide the necessary implementing rules and regulations within thirty (30) days upon the approval of this Act. Such rules and regulations shall take effect on July 1, 2009 and it shall be published in at least two (2) newspapers of general circulation. Section 32. Repealing Clause. - Section 53 of Republic Act No. 3844, otherwise known as the Agricultural Land Reform Code, is hereby repealed and all other laws, decrees, executive orders, issuances, rules and regulations, or parts thereof inconsistent with this Act are hereby likewise repealed or amended accordingly. Section 33. Separability Clause. - If, for any reason, any section or provision of this Act is declared unconstitutional or invalid, the other sections or provisions not affected thereby shall remain in full force and effect. Section 34. Effectivity Clause. - This Act shall take effect on July 1,2009 and it shall be published in at least two (2) newspapers of general circulation. Approved, (Sgd.) PROSPERO C. NOGRALES Speaker of the House of Representatives (Sgd.) JUAN PONCE ENRILE President of the Senate

This Act which is a consolidation of Senate Bill No. 2666 and, House Bill No. 4077 was finally passed by the Senate and the House of Representatives on August 3, 2009 and July 29, 2009, respectively. (Sgd.) MARILYN B. BARUA- (Sgd.) EMMA LIRIO-REYES YAP Secretary of Senate Secretary General House of Represenatives Approved: August 7, 2009

(Sgd.) GLORIA MACAPAGAL-ARROYO President of the Philippines