Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 78517 February 27, 1989
GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO RICALDE, VICENTE RICALDE and ROLANDO
SALAMAR, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ENRIQUE M. REYES, PAZ M. REYES and FE M. REYES,respondents.
Bureau of Agrarian Legal Assistance for petitioners.
Leonardo N. Zulueta for Enrique Reyes, et al. Adolfo S. Azcuna for private respondents.

PARAS, J.:
Before us is a petition seeking the reversal of the decision rendered by the respondent Court of Appeals**on March 3,
1987 affirming the judgment of the court a quo dated April 29, 1986, the dispositive portion of the trial courts decision
reading as follows;
WHEREFORE, the decision rendered by this Court on November 5, 1982 is hereby reconsidered and a new judgment is
hereby rendered:
1. Declaring that Presidential Decree No. 27 is inapplicable to lands obtained thru the homestead law,
2. Declaring that the four registered co-owners will cultivate and operate the farmholding themselves as owners thereof;
and
3. Ejecting from the land the so-called tenants, namely; Gabino Alita, Jesus Julian, Sr., Jesus Julian, Jr., Pedro Ricalde,
Vicente Ricalde and Rolando Salamar, as the owners would want to cultivate the farmholding themselves.
No pronouncement as to costs.
SO ORDERED. (p. 31, Rollo)
The facts are undisputed. The subject matter of the case consists of two (2) parcels of land, acquired by private
respondents predecessors-in-interest through homestead patent under the provisions of Commonwealth Act No. 141.
Said lands are situated at Guilinan, Tungawan, Zamboanga del Sur.
Private respondents herein are desirous of personally cultivating these lands, but petitioners refuse to vacate, relying on
the provisions of P.D. 27 and P.D. 316 and appurtenant regulations issued by the then Ministry of Agrarian Reform (DAR
for short), now Department of Agrarian Reform (MAR for short).
On June 18, 1981, private respondents (then plaintiffs), instituted a complaint against Hon. Conrado Estrella as then
Minister of Agrarian Reform, P.D. Macarambon as Regional Director of MAR Region IX, and herein petitioners (then
defendants) for the declaration of P.D. 27 and all other Decrees, Letters of Instructions and General Orders issued in
connection therewith as inapplicable to homestead lands.

Defendants filed their answer with special and affirmative defenses of July 8, 1981.
Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the defendants from declaring the lands in
litigation under Operation Land Transfer and from being issued land transfer certificates to which the defendants filed their
opposition dated August 4, 1982.
On November 5, 1982, the then Court of Agrarian Relations 16th Regional District, Branch IV, Pagadian City (now
Regional Trial Court, 9th Judicial Region, Branch XVIII) rendered its decision dismissing the said complaint and the
motion to enjoin the defendants was denied.
On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which defendants filed their opposition on
January 10, 1983.
Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted decision prompting defendants to move for a
reconsideration but the same was denied in its Order dated June 6, 1986.
On appeal to the respondent Court of Appeals, the same was sustained in its judgment rendered on March 3, 1987, thus:
WHEREFORE, finding no reversible error thereof, the decision appealed from is hereby AFFIRMED.
SO ORDERED. (p. 34, Rollo)
Hence, the present petition for review on certiorari.
The pivotal issue is whether or not lands obtained through homestead patent are covered by the Agrarian Reform under
P.D. 27.
The question certainly calls for a negative answer.
We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from the bondage of the soil
and transferring to them ownership of the land they till is a sweeping social legislation, a remedial measure promulgated
pursuant to the social justice precepts of the Constitution. However, such contention cannot be invoked to defeat the very
purpose of the enactment of the Public Land Act or Commonwealth Act No. 141. Thus,
The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of
land where he may build a modest house for himself and family and plant what is necessary for subsistence and for the
satisfaction of lifes other needs. The right of the citizens to their homes and to the things necessary for their subsistence
is as vital as the right to life itself. They have a right to live with a certain degree of comfort as become human beings, and
the State which looks after the welfare of the peoples happiness is under a duty to safeguard the satisfaction of this vital
right. (Patricio v. Bayog, 112 SCRA 45)
In this regard, the Philippine Constitution likewise respects the superiority of the homesteaders rights over the rights of
the tenants guaranteed by the Agrarian Reform statute. In point is Section 6 of Article XIII of the 1987 Philippine
Constitution which provides:
Section 6. The State shall apply the principles of agrarian reform or stewardship, whenever applicable in accordance with
law, in the disposition or utilization of other natural resources, including lands of public domain under lease or concession
suitable to agriculture, subject to prior rights, homestead rights of small settlers, and the rights of indigenous communities
to their ancestral lands.
Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform Law of 1988 or Republic Act
No. 6657 likewise contains a proviso supporting the inapplicability of P.D. 27 to lands covered by homestead patents like
those of the property in question, reading,

Section 6. Retention Limits.

Provided further, That original homestead grantees or their direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said
homestead.
WHEREFORE, premises considered, the decision of the respondent Court of Appeals sustaining the decision of the
Regional Trial Court is hereby AFFIRMED.
SO ORDERED.
Melencio-Herrera, (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.

Footnotes
** Penned by Justice Jorge R. Coquia and concurred in by Justices Josue N. Bellosillo and Venancio D. Aldecoa, Jr. of the
Fourth Division.
Republic of the Philippines
Supreme Court
Manila
SECOND DIVISION
Milestone Farms, Inc., v. Office of the President, G.R. No. 182332. February 23, 2011
xx
DECISION
NACHURA, J.:

Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Civil Procedure, seeking the
reversal of the Court of Appeals (CA) Amended Decision[2]dated October 4, 2006 and its Resolution[3] dated March 27,
2008.

The Facts
Petitioner Milestone Farms, Inc. (petitioner) was incorporated with the Securities and Exchange Commission on January
8, 1960.[4] Among its pertinent secondary purposes are: (1) to engage in the raising of cattle, pigs, and other livestock; to
acquire lands by purchase or lease, which may be needed for this purpose; and to sell and otherwise dispose of said
cattle, pigs, and other livestock and their produce when advisable and beneficial to the corporation; (2) to breed, raise,
and sell poultry; to purchase or acquire and sell, or otherwise dispose of the supplies, stocks, equipment, accessories,
appurtenances, products, and by-products of said business; and (3) to import cattle, pigs, and other livestock, and animal
food necessary for the raising of said cattle, pigs, and other livestock as may be authorized by law.[5]
On June 10, 1988, a new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law (CARL), took effect, which included the raising of livestock, poultry, and swine in its coverage.

However, on December 4, 1990, this Court, sitting en banc, ruled in Luz Farms v. Secretary of the Department of Agrarian
Reform[6] that agricultural lands devoted to livestock, poultry, and/or swine raising are excluded from the Comprehensive
Agrarian Reform Program (CARP).
Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422-hectare property, covered by
Transfer Certificate of Title Nos. (T-410434) M-15750, (T-486101) M-7307, (T-486102) M-7308, (T-274129) M-15751, (T486103) M-7309, (T-486104) M-7310, (T-332694) M-15755, (T-486105) M-7311, (T-486106) M-7312, M-8791, (T-486107)
M-7313, (T-486108) M-7314, M-8796, (T-486109) M-7315, (T-486110) M-9508, and M-6013, and located in Pinugay,
Baras, Rizal, from the coverage of the CARL, pursuant to the aforementioned ruling of this Court in Luz Farms.
Meanwhile, on December 27, 1993, the Department of Agrarian Reform (DAR) issued Administrative Order No. 9, Series
of 1993 (DAR A.O. No. 9), setting forth rules and regulations to govern the exclusion of agricultural lands used for
livestock, poultry, and swine raising from CARP coverage. Thus, on January 10, 1994, petitioner re-documented its
application pursuant to DAR A.O. No. 9.[7]
Acting on the said application, the DARs Land Use Conversion and Exemption Committee (LUCEC) of Region IV
conducted an ocular inspection on petitioners property and arrived at the following findings:
[T]he actual land utilization for livestock, swine and poultry is 258.8422 hectares; the area which served as infrastructure
is 42.0000 hectares; ten (10) hectares are planted to corn and the remaining five (5) hectares are devoted to fish culture;
that the livestock population are 371 heads of cow, 20 heads of horses, 5,678 heads of swine and 788 heads of cocks;
that the area being applied for exclusion is far below the required or ideal area which is 563 hectares for the total livestock
population; that the approximate area not directly used for livestock purposes with an area of 15 hectares, more or less, is
likewise far below the allowable 10% variance; and, though not directly used for livestock purposes, the ten (10) hectares
planted to sweet corn and the five (5) hectares devoted to fishpond could be considered supportive to livestock
production.
The LUCEC, thus, recommended the exemption of petitioners 316.0422-hectare property from the coverage of CARP.
Adopting the LUCECs findings and recommendation, DAR Regional Director Percival Dalugdug (Director Dalugdug)
issued an Order dated June 27, 1994, exempting petitioners 316.0422-hectare property from CARP.[8]
The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. (Pinugay Farmers), represented by Timiano Balajadia, Sr.
(Balajadia), moved for the reconsideration of the said Order, but the same was denied by Director Dalugdug in his Order
dated November 24, 1994.[9] Subsequently, the Pinugay Farmers filed a letter-appeal with the DAR Secretary.
Correlatively, on June 4, 1994, petitioner filed a complaint for Forcible Entry against Balajadia and company before the
Municipal Circuit Trial Court (MCTC) of Teresa-Baras, Rizal, docketed as Civil Case No. 781-T.[10] The MCTC ruled in
favor of petitioner, but the decision was later reversed by the Regional Trial Court, Branch 80, of Tanay, Rizal. Ultimately,
the case reached the CA, which, in its Decision[11] dated October 8, 1999, reinstated the MCTCs ruling, ordering
Balajadia and all defendants therein to vacate portions of the property covered by TCT Nos. M-6013, M-8796, and M8791. In its Resolution[12] dated July 31, 2000, the CA held that the defendants therein failed to timely file a motion for
reconsideration, given the fact that their counsel of record received its October 8, 1999 Decision; hence, the same
became final and executory.
In the meantime, R.A. No. 6657 was amended by R.A. No. 7881,[13] which was approved on February 20, 1995. Private
agricultural lands devoted to livestock, poultry, and swine raising were excluded from the coverage of the CARL. On
October 22, 1996, the fact-finding team formed by the DAR Undersecretary for Field Operations and Support Services
conducted an actual headcount of the livestock population on the property. The headcount showed that there were 448
heads of cattle and more than 5,000 heads of swine.

The DAR Secretarys Ruling

On January 21, 1997, then DAR Secretary Ernesto D. Garilao (Secretary Garilao) issued an Order exempting from CARP
only 240.9776 hectares of the 316.0422 hectares previously exempted by Director Dalugdug, and declaring 75.0646
hectares of the property to be covered by CARP.[14]
Secretary Garilao opined that, for private agricultural lands to be excluded from CARP, they must already be devoted to
livestock, poultry, and swine raising as of June 15, 1988, when the CARL took effect. He found that the Certificates of
Ownership of Large Cattle submitted by petitioner showed that only 86 heads of cattle were registered in the name of

petitioners president, Misael Vera, Jr., prior to June 15, 1988; 133 were subsequently bought in 1990, while 204 were
registered from 1992 to 1995. Secretary Garilao gave more weight to the certificates rather than to the headcount
because the same explicitly provide for the number of cattle owned by petitioner as of June 15, 1988.
Applying the animal-land ratio (1 hectare for grazing for every head of cattle/carabao/horse) and the infrastructure-animal
ratio (1.7815 hectares for 21 heads of cattle/carabao/horse, and 0.5126 hectare for 21 heads of hogs) under DAR A.O.
No. 9, Secretary Garilao exempted 240.9776 hectares of the property, as follows:
1. 86 hectares for the 86 heads of cattle existing as of 15 June 1988;
2. 8 hectares for infrastructure following the ratio of 1.7815 hectares for every 21 heads of cattle;
3.

8 hectares for the 8 horses;

4.

0.3809 square meters of infrastructure for the 8 horses; [and]

5.

138.5967 hectares for the 5,678 heads of swine.[15]

Petitioner filed a Motion for Reconsideration,[16] submitting therewith copies of Certificates of Transfer of Large Cattle and
additional Certificates of Ownership of Large Cattle issued to petitioner prior to June 15, 1988, as additional proof that it
had met the required animal-land ratio. Petitioner also submitted a copy of a Disbursement Voucher dated December 17,
1986, showing the purchase of 100 heads of cattle by the Bureau of Animal Industry from petitioner, as further proof that it
had been actively operating a livestock farm even before June 15, 1988. However, in his Order dated April 15, 1997,
Secretary Garilao denied petitioners Motion for Reconsideration.[17]
Aggrieved, petitioner filed its Memorandum on Appeal[18] before the Office of the President (OP).
The OPs Ruling
On February 4, 2000, the OP rendered a decision[19] reinstating Director Dalugdugs Order dated June 27, 1994 and
declared the entire 316.0422-hectare property exempt from the coverage of CARP.
However, on separate motions for reconsideration of the aforesaid decision filed by farmer-groups Samahang Anak-Pawis
ng Lagundi (SAPLAG) and Pinugay Farmers, and the Bureau of Agrarian Legal Assistance of DAR, the OP issued a
resolution[20] dated September 16, 2002, setting aside its previous decision. The dispositive portion of the OP resolution
reads:
WHEREFORE, the Decision subject of the instant separate motions for reconsideration is hereby SET ASIDE and a new
one entered REINSTATING the Order dated 21 January 1997 of then DAR Secretary Ernesto D. Garilao, as reiterated in
another Order of 15 April 1997, without prejudice to the outcome of the continuing review and verification proceedings that
DAR, thru the appropriate Municipal Agrarian Reform Officer, may undertake pursuant to Rule III (D) of DAR
Administrative Order No. 09, series of 1993.
SO ORDERED.[21]
The OP held that, when it comes to proof of ownership, the reference is the Certificate of Ownership of Large Cattle.
Certificates of cattle ownership, which are readily available being issued by the appropriate government office ought to
match the number of heads of cattle counted as existing during the actual headcount. The presence of large cattle on the
land, without sufficient proof of ownership thereof, only proves such presence.
Taking note of Secretary Garilaos observations, the OP also held that, before an ocular investigation is conducted on the
property, the landowners are notified in advance; hence, mere reliance on the physical headcount is dangerous because
there is a possibility that the landowners would increase the number of their cattle for headcount purposes only. The OP
observed that there was a big variance between the actual headcount of 448 heads of cattle and only 86 certificates of
ownership of large cattle.
Consequently, petitioner sought recourse from the CA.[22]

The Proceedings Before the CA and Its Rulings

On April 29, 2005, the CA found that, based on the documentary evidence presented, the property subject of the
application for exclusion had more than satisfied the animal-land and infrastructure-animal ratios under DAR A.O. No. 9.
The CA also found that petitioner applied for exclusion long before the effectivity of DAR A.O. No. 9, thus, negating the
claim that petitioner merely converted the property for livestock, poultry, and swine raising in order to exclude it from
CARP coverage. Petitioner was held to have actually engaged in the said business on the property even before June 15,
1988. The CA disposed of the case in this wise:
WHEREFORE, the instant petition is hereby GRANTED. The assailed Resolution of the Office of the President dated
September 16, 2002 is hereby SET ASIDE, and its Decision dated February 4, 2000 declaring the entire 316.0422
hectares exempt from the coverage of the Comprehensive Agrarian Reform Program is hereby REINSTATED without
prejudice to the outcome of the continuing review and verification proceedings which the Department of Agrarian Reform,
through the proper Municipal Agrarian Reform Officer, may undertake pursuant to Policy Statement (D) of DAR
Administrative Order No. 9, Series of 1993.
SO ORDERED.[23]
Meanwhile, six months earlier, or on November 4, 2004, without the knowledge of the CA as the parties did not inform
the appellate court then DAR Secretary Rene C. Villa (Secretary Villa) issued DAR Conversion Order No. CON-04100016[24] (Conversion Order), granting petitioners application to convert portions of the 316.0422-hectare property from
agricultural to residential and golf courses use. The portions converted with a total area of 153.3049 hectares were
covered by TCT Nos. M-15755 (T-332694), M-15751 (T-274129), and M-15750 (T-410434). With this Conversion Order,
the area of the property subject of the controversy was effectively reduced to 162.7373 hectares.
On the CAs decision of April 29, 2005, Motions for Reconsideration were filed by farmer-groups, namely: the farmers
represented by Miguel Espinas[25] (Espinas group), the Pinugay Farmers,[26] and the SAPLAG.[27] The farmer-groups
all claimed that the CA should have accorded respect to the factual findings of the OP. Moreover, the farmer-groups
unanimously intimated that petitioner already converted and developed a portion of the property into a leisure-residentialcommercial estate known as the Palo Alto Leisure and Sports Complex (Palo Alto).
Subsequently, in a Supplement to the Motion for Reconsideration on Newly Secured Evidence pursuant to DAR
Administrative Order No. 9, Series of 1993[28] (Supplement) dated June 15, 2005, the Espinas group submitted the
following as evidence:
1) Conversion Order[29] dated November 4, 2004, issued by Secretary Villa, converting portions of the property from
agricultural to residential and golf courses use, with a total area of 153.3049 hectares; thus, the Espinas group prayed that
the remaining 162.7373 hectares (subject property) be covered by the CARP;
2) Letter[30] dated June 7, 2005 of both incoming Municipal Agrarian Reform Officer (MARO) Bismark M. Elma (MARO
Elma) and outgoing MARO Cesar C. Celi (MARO Celi) of Baras, Rizal, addressed to Provincial Agrarian Reform Officer
(PARO) II of Rizal, Felixberto Q. Kagahastian, (MARO Report), informing the latter, among others, that Palo Alto was
already under development and the lots therein were being offered for sale; that there were actual tillers on the subject
property; that there were agricultural improvements thereon, including an irrigation system and road projects funded by
the Government; that there was no existing livestock farm on the subject property; and that the same was not in the
possession and/or control of petitioner; and
3) Certification[31] dated June 8, 2005, issued by both MARO Elma and MARO Celi, manifesting that the subject property
was in the possession and cultivation of actual occupants and tillers, and that, upon inspection, petitioner maintained no
livestock farm thereon.
Four months later, the Espinas group and the DAR filed their respective Manifestations.[32] In its Manifestation dated
November 29, 2005, the DAR confirmed that the subject property was no longer devoted to cattle raising. Hence, in its
Resolution[33] dated December 21, 2005, the CA directed petitioner to file its comment on the Supplement and the
aforementioned Manifestations. Employing the services of a new counsel, petitioner filed a Motion to Admit Rejoinder,
[34] and prayed that the MARO Report be disregarded and expunged from the records for lack of factual and legal basis.

With the CA now made aware of these developments, particularly Secretary Villas Conversion Order of November 4,
2004, the appellate court had to acknowledge that the property subject of the controversy would now be limited to the
remaining 162.7373 hectares. In the same token, the Espinas group prayed that this remaining area be covered by the
CARP.[35]
On October 4, 2006, the CA amended its earlier Decision. It held that its April 29, 2005 Decision was theoretically not final
because DAR A.O. No. 9 required the MARO to make a continuing review and verification of the subject property. While
the CA was cognizant of our ruling in Department of Agrarian Reform v. Sutton,[36] wherein we declared DAR A.O. No. 9
as unconstitutional, it still resolved to lift the exemption of the subject property from the CARP, not on the basis of DAR
A.O. No. 9, but on the strength of evidence such as the MARO Report and Certification, and the Katunayan[37] issued by
the Punong Barangay, Alfredo Ruba (Chairman Ruba), of Pinugay, Baras, Rizal, showing that the subject property was no
longer operated as a livestock farm. Moreover, the CA held that the lease agreements,[38] which petitioner submitted to
prove that it was compelled to lease a ranch as temporary shelter for its cattle, only reinforced the DARs finding that there
was indeed no existing livestock farm on the subject property. While petitioner claimed that it was merely forced to do so
to prevent further slaughtering of its cattle allegedly committed by the occupants, the CA found the claim unsubstantiated.
Furthermore, the CA opined that petitioner should have asserted its rights when the irrigation and road projects were
introduced by the Government within its property. Finally, the CA accorded the findings of MARO Elma and MARO Celi the
presumption of regularity in the performance of official functions in the absence of evidence proving misconduct and/or
dishonesty when they inspected the subject property and rendered their report. Thus, the CA disposed:
WHEREFORE, this Courts Decision dated April 29, 2005 is hereby amended in that the exemption of the subject
landholding from the coverage of the Comprehensive Agrarian Reform Program is hereby lifted, and the 162.7373
hectare-agricultural portion thereof is hereby declared covered by the Comprehensive Agrarian Reform Program.
SO ORDERED.[39]
Unperturbed, petitioner filed a Motion for Reconsideration.[40] On January 8, 2007, MARO Elma, in compliance with the
Memorandum of DAR Regional Director Dominador B. Andres, tendered another Report[41] reiterating that, upon
inspection of the subject property, together with petitioners counsel-turned witness, Atty. Grace Eloisa J. Que (Atty. Que),
PARO Danilo M. Obarse, Chairman Ruba, and several occupants thereof, he, among others, found no livestock farm
within the subject property. About 43 heads of cattle were shown, but MARO Elma observed that the same were inside an
area adjacent to Palo Alto. Subsequently, upon Atty. Ques request for reinvestigation, designated personnel of the DAR
Provincial and Regional Offices (Investigating Team) conducted another ocular inspection on the subject property on
February 20, 2007. The Investigating Team, in its Report[42] dated February 21, 2007, found that, per testimony of
petitioners caretaker, Rogelio Ludivices (Roger),[43] petitioner has 43 heads of cattle taken care of by the following
individuals: i) Josefino Custodio (Josefino) 18 heads; ii) Andy Amahit 15 heads; and iii) Bert Pangan 2 heads; that
these individuals pastured the herd of cattle outside the subject property, while Roger took care of 8 heads of cattle inside
the Palo Alto area; that 21 heads of cattle owned by petitioner were seen in the area adjacent to Palo Alto; that Josefino
confirmed to the Investigating Team that he takes care of 18 heads of cattle owned by petitioner; that the said
Investigating Team saw 9 heads of cattle in the Palo Alto area, 2 of which bore MFI marks; and that the 9 heads of cattle
appear to have matched the Certificates of Ownership of Large Cattle submitted by petitioner.
Because of the contentious factual issues and the conflicting averments of the parties, the CA set the case for hearing and
reception of evidence on April 24, 2007.[44] Thereafter, as narrated by the CA, the following events transpired:
On May 17, 2007, [petitioner] presented the Judicial Affidavits of its witnesses, namely, [petitioners] counsel, [Atty. Que],
and the alleged caretaker of [petitioners] farm, [Roger], who were both cross-examined by counsel for farmers-movants
and SAPLAG. [Petitioner] and SAPLAG then marked their documentary exhibits.
On May 24, 2007, [petitioners] security guard and third witness, Rodolfo G. Febrada, submitted his Judicial
Affidavit and was cross-examined by counsel for fa[r]mers-movants and SAPLAG. Farmers-movants also marked their
documentary exhibits.
Thereafter, the parties submitted their respective Formal Offers of Evidence. Farmers-movants and SAPLAG filed
their objections to [petitioners] Formal Offer of Evidence. Later, [petitioner] and farmers-movants filed their
respective Memoranda.
In December 2007, this Court issued a Resolution on the parties offer of evidence and considered
[petitioners] Motion for Reconsideration submitted for resolution.[45]
Finally, petitioners motion for reconsideration was denied by the CA in its Resolution[46] dated March 27, 2008. The CA
discarded petitioners reliance on Sutton. It ratiocinated that the MARO Reports and the DARs Manifestation could not be

disregarded simply because DAR A.O. No. 9 was declared unconstitutional. The Sutton ruling was premised on the fact
that the Sutton property continued to operate as a livestock farm. The CA also reasoned that, in Sutton, this Court did not
remove from the DAR the power to implement the CARP, pursuant to the latters authority to oversee the implementation
of agrarian reform laws under Section 50[47] of the CARL. Moreover, the CA found:

Petitioner-appellant claimed that they had 43 heads of cattle which are being cared for and pastured by 4 individuals. To
prove its ownership of the said cattle, petitioner-appellant offered in evidence 43Certificates of Ownership of Large
Cattle. Significantly, however, the said Certificates were all dated and issued on November 24, 2006, nearly 2 months
after this Court rendered its Amended Decision lifting the exemption of the 162-hectare portion of the subject
landholding. The acquisition of such cattle after the lifting of the exemption clearly reveals that petitioner-appellant was no
longer operating a livestock farm, and suggests an effort to create a semblance of livestock-raising for the purpose of
its Motion for Reconsideration.[48]
On petitioners assertion that between MARO Elmas Report dated January 8, 2007 and the Investigating Teams Report,
the latter should be given credence, the CA held that there were no material inconsistencies between the two reports
because both showed that the 43 heads of cattle were found outside the subject property.
Hence, this Petition assigning the following errors:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT LANDS DEVOTED TO LIVESTOCK
FARMING WITHIN THE MEANING OF LUZ FARMS AND SUTTON, AND WHICH ARE THEREBY EXEMPT FROM CARL
COVERAGE, ARE NEVERTHELESS SUBJECT TO DARS CONTINUING VERIFICATION AS TO USE, AND, ON THE
BASIS OF SUCH VERIFICATION, MAY BE ORDERED REVERTED TO AGRICULTURAL CLASSIFICATION AND
COMPULSORY ACQUISITION[;]
GRANTING THAT THE EXEMPT LANDS AFORESAID MAY BE SO REVERTED TO AGRICULTURAL CLASSIFICATION,
STILL THE PROCEEDINGS FOR SUCH PURPOSE BELONGS TO THE EXCLUSIVE ORIGINAL JURISDICTION OF
THE DAR, BEFORE WHICH THE CONTENDING PARTIES MAY VENTILATE FACTUAL ISSUES, AND AVAIL
THEMSELVES OF USUAL REVIEW PROCESSES, AND NOT TO THE COURT OF APPEALS EXERCISING
APPELLATE JURISDICTION OVER ISSUES COMPLETELY UNRELATED TO REVERSION [; AND]
IN ANY CASE, THE COURT OF APPEALS GRAVELY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION
WHEN IT HELD THAT THE PROPERTY IN DISPUTE IS NO LONGER BEING USED FOR LIVESTOCK FARMING.[49]
Petitioner asseverates that lands devoted to livestock farming as of June 15, 1988 are classified as industrial lands,
hence, outside the ambit of the CARP; that Luz Farms, Sutton, and R.A. No. 7881 clearly excluded such lands on
constitutional grounds; that petitioners lands were actually devoted to livestock even before the enactment of the CARL;
that livestock farms are exempt from the CARL, not by reason of any act of the DAR, but because of their nature as
industrial lands; that petitioners property was admittedly devoted to livestock farming as of June 1988 and the only issue
before was whether or not petitioners pieces of evidence comply with the ratios provided under DAR A.O. No. 9; and that
DAR A.O. No. 9 having been declared as unconstitutional, DAR had no more legal basis to conduct a continuing review
and verification proceedings over livestock farms. Petitioner argues that, in cases where reversion of properties to
agricultural use is proper, only the DAR has the exclusive original jurisdiction to hear and decide the same; hence, the CA,
in this case, committed serious errors when it ordered the reversion of the property and when it considered pieces of
evidence not existing as of June 15, 1988, despite its lack of jurisdiction; that the CA should have remanded the case to
the DAR due to conflicting factual claims; that the CA cannot ventilate allegations of fact that were introduced for the first
time on appeal as a supplement to a motion for reconsideration of its first decision, use the same to deviate from the
issues pending review, and, on the basis thereof, declare exempt lands reverted to agricultural use and compulsorily
covered by the CARP; that the newly discovered [pieces of] evidence were not introduced in the proceedings before the
DAR, hence, it was erroneous for the CA to consider them; and that piecemeal presentation of evidence is not in accord
with orderly justice. Finally, petitioner submits that, in any case, the CA gravely erred and committed grave abuse of
discretion when it held that the subject property was no longer used for livestock farming as shown by the Report of the
Investigating Team. Petitioner relies on the 1997 LUCEC and DAR findings that the subject property was devoted to
livestock farming, and on the 1999 CA Decision which held that the occupants of the property were squatters, bereft of
any authority to stay and possess the property.[50]
On one hand, the farmer-groups, represented by the Espinas group, contend that they have been planting rice and fruitbearing trees on the subject property, and helped the National Irrigation Administration in setting up an irrigation system

therein in 1997, with a produce of 1,500 to 1,600 sacks of palay each year; that petitioner came to court with unclean
hands because, while it sought the exemption and exclusion of the entire property, unknown to the CA, petitioner
surreptitiously filed for conversion of the property now known as Palo Alto, which was actually granted by the DAR
Secretary; that petitioners bad faith is more apparent since, despite the conversion of the 153.3049-hectare portion of the
property, it still seeks to exempt the entire property in this case; and that the fact that petitioner applied for conversion is
an admission that indeed the property is agricultural. The farmer-groups also contend that petitioners reliance on Luz
Farms and Sutton is unavailing because in these cases there was actually no cessation of the business of raising cattle;
that what is being exempted is the activity of raising cattle and not the property itself; that exemptions due to cattle raising
are not permanent; that the declaration of DAR A.O. No. 9 as unconstitutional does not at all diminish the mandated duty
of the DAR, as the lead agency of the Government, to implement the CARL; that the DAR, vested with the power to
identify lands subject to CARP, logically also has the power to identify lands which are excluded and/or exempted
therefrom; that to disregard DARs authority on the matter would open the floodgates to abuse and fraud by unscrupulous
landowners; that the factual finding of the CA that the subject property is no longer a livestock farm may not be disturbed
on appeal, as enunciated by this Court; that DAR conducted a review and monitoring of the subject property by virtue of
its powers under the CARL; and that the CA has sufficient discretion to admit evidence in order that it could arrive at a fair,
just, and equitable ruling in this case.[51]
On the other hand, respondent OP, through the Office of the Solicitor General (OSG), claims that the CA correctly held
that the subject property is not exempt from the coverage of the CARP, as substantial pieces of evidence show that the
said property is not exclusively devoted to livestock, swine, and/or poultry raising; that the issues presented by petitioner
are factual in nature and not proper in this case; that under Rule 43 of the 1997 Rules of Civil Procedure, questions of fact
may be raised by the parties and resolved by the CA; that due to the divergence in the factual findings of the DAR and the
OP, the CA was duty bound to review and ascertain which of the said findings are duly supported by substantial evidence;
that the subject property was subject to continuing review and verification proceedings due to the then prevailing DAR
A.O. No. 9; that there is no question that the power to determine if a property is subject to CARP coverage lies with the
DAR Secretary; that pursuant to such power, the MARO rendered the assailed reports and certification, and the DAR itself
manifested before the CA that the subject property is no longer devoted to livestock farming; and that, while it is true that
this Courts ruling in Luz Farms declared that agricultural lands devoted to livestock, poultry, and/or swine raising are
excluded from the CARP, the said ruling is not without any qualification.[52]
In its Reply[53] to the farmer-groups and to the OSGs comment, petitioner counters that the farmer-groups have no legal
basis to their claims as they admitted that they entered the subject property without the consent of petitioner; that the rice
plots actually found in the subject property, which were subsequently taken over by squatters, were, in fact, planted by
petitioner in compliance with the directive of then President Ferdinand Marcos for the employer to provide rice to its
employees; that when a land is declared exempt from the CARP on the ground that it is not agricultural as of the time the
CARL took effect, the use and disposition of that land is entirely and forever beyond DARs jurisdiction; and that, inasmuch
as the subject property was not agricultural from the very beginning, DAR has no power to regulate the same. Petitioner
also asserts that the CA cannot uncharacteristically assume the role of trier of facts and resolve factual questions not
previously adjudicated by the lower tribunals; that MARO Elma rendered the assailed MARO reports with bias against
petitioner, and the same were contradicted by the Investigating Teams Report, which confirmed that the subject property
is still devoted to livestock farming; and that there has been no change in petitioners business interest as an entity
engaged in livestock farming since its inception in 1960, though there was admittedly a decline in the scale of its
operations due to the illegal acts of the squatter-occupants.
Our Ruling
The Petition is bereft of merit.
Let it be stressed that when the CA provided in its first Decision that continuing review and verification may be conducted
by the DAR pursuant to DAR A.O. No. 9, the latter was not yet declared unconstitutional by this Court. The first CA
Decision was promulgated on April 29, 2005, while this Court struck down as unconstitutional DAR A.O. No. 9, by way
ofSutton, on October 19, 2005. Likewise, let it be emphasized that the Espinas group filed the Supplement and submitted
the assailed MARO reports and certification on June 15, 2005, which proved to be adverse to petitioners case. Thus, it
could not be said that the CA erred or gravely abused its discretion in respecting the mandate of DAR A.O. No. 9, which
was then subsisting and in full force and effect.
While it is true that an issue which was neither alleged in the complaint nor raised during the trial cannot be raised for the
first time on appeal as it would be offensive to the basic rules of fair play, justice, and due process,[54] the same is not
without exception,[55] such as this case. The CA, under Section 3,[56] Rule 43 of the Rules of Civil Procedure, can, in the
interest of justice, entertain and resolve factual issues. After all, technical and procedural rules are intended to help
secure, and not suppress, substantial justice. A deviation from a rigid enforcement of the rules may thus be allowed to
attain the prime objective of dispensing justice, for dispensation of justice is the core reason for the existence of courts.

[57] Moreover, petitioner cannot validly claim that it was deprived of due process because the CA afforded it all the
opportunity to be heard.[58] The CA even directed petitioner to file its comment on the Supplement, and to prove and
establish its claim that the subject property was excluded from the coverage of the CARP. Petitioner actively participated
in the proceedings before the CA by submitting pleadings and pieces of documentary evidence, such as the Investigating
Teams Report and judicial affidavits. The CA also went further by setting the case for hearing. In all these proceedings, all
the parties rights to due process were amply protected and recognized.

With the procedural issue disposed of, we find that petitioners arguments fail to persuade. Its invocation
of Sutton is unavailing. In Sutton, we held:

In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to regulate
livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their
ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent to exclude, inter alia, all
lands exclusively devoted to livestock, swine and poultry-raising. The Court clarified in the Luz Farms case that
livestock, swine and poultry-raising are industrial activities and do not fall within the definition of agriculture or
agricultural activity. The raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not
an agricultural, activity. A great portion of the investment in this enterprise is in the form of industrial fixed assets, such as:
animal housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers, conveyors,
exhausts and generators, extensive warehousing facilities for feeds and other supplies, anti-pollution equipment like biogas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses,
sprayers, and other technological appurtenances.
Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the
coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.[59]
Indeed, as pointed out by the CA, the instant case does not rest on facts parallel to those of Sutton because, in Sutton,
the subject property remained a livestock farm. We even highlighted therein the fact that there has been no change of
business interest in the case of respondents.[60] Similarly, in Department of Agrarian Reform v. Uy,[61] we excluded a
parcel of land from CARP coverage due to the factual findings of the MARO, which were confirmed by the DAR, that the
property was entirely devoted to livestock farming. However, in A.Z. Arnaiz Realty, Inc., represented by Carmen Z. Arnaiz
v. Office of the President; Department of Agrarian Reform; Regional Director, DAR Region V, Legaspi City; Provincial
Agrarian Reform Officer, DAR Provincial Office, Masbate, Masbate; and Municipal Agrarian Reform Officer, DAR
Municipal Office, Masbate, Masbate,[62] we denied a similar petition for exemption and/or exclusion, by according respect
to the CAs factual findings and its reliance on the findings of the DAR and the OP that
the subject parcels of land were not directly, actually, and exclusively used for pasture.[63]
Petitioners admission that, since 2001, it leased another ranch for its own livestock is fatal to its cause.[64] While
petitioner advances a defense that it leased this ranch because the occupants of the subject property harmed its cattle,
like the CA, we find it surprising that not even a single police and/or barangay report was filed by petitioner to amplify its
indignation over these alleged illegal acts. Moreover, we accord respect to the CAs keen observation that the assailed
MARO reports and the Investigating Teams Report do not actually contradict one another, finding that the 43 cows, while
owned by petitioner, were actually pastured outside the subject property.
Finally, it is established that issues of Exclusion and/or Exemption are characterized as Agrarian Law Implementation
(ALI) cases which are well within the DAR Secretarys competence and jurisdiction.[65] Section 3, Rule II of the 2003
Department of Agrarian Reform Adjudication Board Rules of Procedure provides:
Section 3. Agrarian Law Implementation Cases.
The Adjudicator or the Board shall have no jurisdiction over matters involving the administrative implementation of RA No.
6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as
enunciated by pertinent rules and administrative orders, which shall be under the exclusive prerogative of and cognizable
by the Office of the Secretary of the DAR in accordance with his issuances, to wit:
xxxx

3.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising.
Thus, we cannot, without going against the law, arbitrarily strip the DAR Secretary of his legal mandate to exercise
jurisdiction and authority over all ALI cases. To succumb to petitioners contention that when a land is declared exempt
from the CARP on the ground that it is not agricultural as of the time the CARL took effect, the use and disposition of that
land is entirely and forever beyond DARs jurisdiction is dangerous, suggestive of self-regulation. Precisely, it is the DAR
Secretary who is vested with such jurisdiction and authority to exempt and/or exclude a property from CARP coverage
based on the factual circumstances of each case and in accordance with law and applicable jurisprudence. In addition,
albeit parenthetically, Secretary Villa had already granted the conversion into residential and golf courses use of nearly
one-half of the entire area originally claimed as exempt from CARP coverage because it was allegedly devoted to
livestock production.
In sum, we find no reversible error in the assailed Amended Decision and Resolution of the CA which would warrant
the modification, much less the reversal, thereof.
WHEREFORE, the Petition is DENIED and the Court of Appeals Amended Decision dated October 4, 2006 and
Resolution dated March 27, 2008 are AFFIRMED. No costs.
SO ORDERED.

EN BANC
[G.R. No. 86889 : December 4, 1990.]
192 SCRA 51
LUZ FARMS, Petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM,
Respondent.

DECISION

PARAS, J.:

This is a petition for prohibition with prayer for restraining order and/or preliminary and permanent injunction against the
Honorable Secretary of the Department of Agrarian Reform for acting without jurisdiction in enforcing the assailed
provisions of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988 and in promulgating
the Guidelines and Procedure Implementing Production and Profit Sharing under R.A. No. 6657, insofar as the same
apply to herein petitioner, and further from performing an act in violation of the constitutional rights of the petitioner.
As gathered from the records, the factual background of this case, is as follows:
On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes the raising of livestock,
poultry and swine in its coverage (Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and Procedures Implementing
Production and Profit Sharing as embodied in Sections 13 and 32 of R.A. No. 6657 (Rollo, p. 80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and Regulations implementing Section 11 of
R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).

Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry business and together with others
in the same business allegedly stands to be adversely affected by the enforcement of Section 3(b), Section 11, Section
13, Section 16(d) and 17 and Section 32 of R.A. No. 6657 otherwise known as Comprehensive Agrarian Reform Law and
of the Guidelines and Procedures Implementing Production and Profit Sharing under R.A. No. 6657 promulgated on
January 2, 1989 and the Rules and Regulations Implementing Section 11 thereof as promulgated by the DAR on January
9, 1989 (Rollo, pp. 2-36).: rd
Hence, this petition praying that aforesaid laws, guidelines and rules be declared unconstitutional. Meanwhile, it is also
prayed that a writ of preliminary injunction or restraining order be issued enjoining public respondents from enforcing the
same, insofar as they are made to apply to Luz Farms and other livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms' prayer for the issuance of a
preliminary injunction in its Manifestation dated May 26, and 31, 1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said Motion for Reconsideration
regarding the injunctive relief, after the filing and approval by this Court of an injunction bond in the amount of
P100,000.00. This Court also gave due course to the petition and required the parties to file their respective memoranda
(Rollo, p. 119).
The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).
On December 22, 1989, the Solicitor General adopted his Comment to the petition as his Memorandum (Rollo, pp. 186187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply to it:
(a) Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of "Agricultural, Agricultural
Enterprise or Agricultural Activity."
(b) Section 11 which defines "commercial farms" as "private agricultural lands devoted to commercial, livestock,
poultry and swine raising . . ."
(c) Section 13 which calls upon petitioner to execute a production-sharing plan.
(d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to summarily determine
the just compensation to be paid for lands covered by the Comprehensive Agrarian Reform Law.
(e) Section 32 which spells out the production-sharing plan mentioned in Section 13
". . . (W)hereby three percent (3%) of the gross sales from the production of such lands are distributed within sixty
(60) days of the end of the fiscal year as compensation to regular and other farmworkers in such lands over and
above the compensation they currently receive: Provided, That these individuals or entities realize gross sales in
excess of five million pesos per annum unless the DAR, upon proper application, determine a lower ceiling.
In the event that the individual or entity realizes a profit, an additional ten (10%) of the net profit after tax shall be
distributed to said regular and other farmworkers within ninety (90) days of the end of the fiscal year . . ."
The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No. 6657 (the Comprehensive
Agrarian Reform Law of 1988), insofar as the said law includes the raising of livestock, poultry and swine in its coverage
as well as the Implementing Rules and Guidelines promulgated in accordance therewith.:-cralaw
The constitutional provision under consideration reads as follows:
ARTICLE XIII
x x x
AGRARIAN AND NATURAL RESOURCES REFORM
Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and
regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other

farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the
just distribution of all agricultural lands, subject to such priorities and reasonable retention limits as the Congress
may prescribe, taking into account ecological, developmental, or equity considerations, and subject to the
payment of just compensation. In determining retention limits, the State shall respect the rights of small
landowners. The State shall further provide incentives for voluntary land-sharing.
x x x"
Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In fact, it acknowledges the
correctness of the decision of this Court in the case of the Association of Small Landowners in the Philippines, Inc.
vs. Secretary of Agrarian Reform (G.R. 78742, 14 July 1989) affirming the constitutionality of the Comprehensive
Agrarian Reform Law. It, however, argued that Congress in enacting the said law has transcended the mandate of
the Constitution, in including land devoted to the raising of livestock, poultry and swine in its coverage (Rollo, p.
131). Livestock or poultry raising is not similar to crop or tree farming. Land is not the primary resource in this
undertaking and represents no more than five percent (5%) of the total investment of commercial livestock and
poultry raisers. Indeed, there are many owners of residential lands all over the country who use available space in
their residence for commercial livestock and raising purposes, under "contract-growing arrangements," whereby
processing corporations and other commercial livestock and poultry raisers (Rollo, p. 10). Lands support the
buildings and other amenities attendant to the raising of animals and birds. The use of land is incidental to but not
the principal factor or consideration in productivity in this industry. Including backyard raisers, about 80% of those
in commercial livestock and poultry production occupy five hectares or less. The remaining 20% are mostly
corporate farms (Rollo, p. 11).
On the other hand, the public respondent argued that livestock and poultry raising is embraced in the term "agriculture"
and the inclusion of such enterprise under Section 3(b) of R.A. 6657 is proper. He cited that Webster's International
Dictionary, Second Edition (1954), defines the following words:
"Agriculture the art or science of cultivating the ground and raising and harvesting crops, often, including also,
feeding, breeding and management of livestock, tillage, husbandry, farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock domestic animals used or raised on a farm, especially for profit.
Farm a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp. 82-83).
The petition is impressed with merit.
The question raised is one of constitutional construction. The primary task in constitutional construction is to ascertain and
thereafter assure the realization of the purpose of the framers in the adoption of the Constitution (J.M. Tuazon & Co.
vs. Land Tenure Administration, 31 SCRA 413 [1970]).: rd
Ascertainment of the meaning of the provision of Constitution begins with the language of the document itself. The words
used in the Constitution are to be given their ordinary meaning except where technical terms are employed in which case
the significance thus attached to them prevails (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).
It is generally held that, in construing constitutional provisions which are ambiguous or of doubtful meaning, the courts
may consider the debates in the constitutional convention as throwing light on the intent of the framers of the Constitution.
It is true that the intent of the convention is not controlling by itself, but as its proceeding was preliminary to the adoption
by the people of the Constitution the understanding of the convention as to what was meant by the terms of the
constitutional provision which was the subject of the deliberation, goes a long way toward explaining the understanding of
the people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).
The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word "agricultural,"
clearly show that it was never the intention of the framers of the Constitution to include livestock and poultry industry in the
coverage of the constitutionally-mandated agrarian reform program of the Government.
The Committee adopted the definition of "agricultural land" as defined under Section 166 of R.A. 3844, as laud devoted to
any growth, including but not limited to crop lands, saltbeds, fishponds, idle and abandoned land (Record, CONCOM,
August 7, 1986, Vol. III, p. 11).

The intention of the Committee is to limit the application of the word "agriculture." Commissioner Jamir proposed to insert
the word "ARABLE" to distinguish this kind of agricultural land from such lands as commercial and industrial lands and
residential properties because all of them fall under the general classification of the word "agricultural". This proposal,
however, was not considered because the Committee contemplated that agricultural lands are limited to arable and
suitable agricultural lands and therefore, do not include commercial, industrial and residential lands (Record, CONCOM,
August 7, 1986, Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed several questions, among
others, quoted as follows:
x x x
"Line 19 refers to genuine reform program founded on the primary right of farmers and farmworkers. I wonder if it
means that leasehold tenancy is thereby proscribed under this provision because it speaks of the primary right of
farmers and farmworkers to own directly or collectively the lands they till. As also mentioned by Commissioner
Tadeo, farmworkers include those who work in piggeries and poultry projects.
I was wondering whether I am wrong in my appreciation that if somebody puts up a piggery or a poultry project
and for that purpose hires farmworkers therein, these farmworkers will automatically have the right to own
eventually, directly or ultimately or collectively, the land on which the piggeries and poultry projects were
constructed. (Record, CONCOM, August 2, 1986, p. 618).
x x x
The questions were answered and explained in the statement of then Commissioner Tadeo, quoted as follows:
x x x
"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Ipinaaalam ko kay Commissioner
Regalado na hindi namin inilagay ang agricultural worker sa kadahilanang kasama rito ang piggery, poultry at
livestock workers. Ang inilagay namin dito ay farm worker kaya hindi kasama ang piggery, poultry at livestock
workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621).
It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private agricultural lands devoted to
commercial livestock, poultry and swine raising" in the definition of "commercial farms" is invalid, to the extent that the
aforecited agro-industrial activities are made to be covered by the agrarian reform program of the State. There is simply
no reason to include livestock and poultry lands in the coverage of agrarian reform. (Rollo, p. 21).
Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of R.A. 6657 directing "corporate
farms" which include livestock and poultry raisers to execute and implement "production-sharing plans" (pending final
redistribution of their landholdings) whereby they are called upon to distribute from three percent (3%) of their gross sales
and ten percent (10%) of their net profits to their workers as additional compensation is unreasonable for being
confiscatory, and therefore violative of due process (Rollo, p. 21).:-cralaw
It has been established that this Court will assume jurisdiction over a constitutional question only if it is shown that the
essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or
controversy involving a conflict of legal rights susceptible of judicial determination, the constitutional question must have
been opportunely raised by the proper party, and the resolution of the question is unavoidably necessary to the decision of
the case itself (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742;
Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted with constitutional issues, it will not hesitate to
declare a law or act invalid when it is convinced that this must be done. In arriving at this conclusion, its only criterion will
be the Constitution and God as its conscience gives it in the light to probe its meaning and discover its purpose. Personal
motives and political considerations are irrelevancies that cannot influence its decisions. Blandishment is as ineffectual as
intimidation, for all the awesome power of the Congress and Executive, the Court will not hesitate "to make the hammer
fall heavily," where the acts of these departments, or of any official, betray the people's will as expressed in the
Constitution (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna
v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of its constitutional powers, it becomes the duty of the
judiciary to declare what the other branches of the government had assumed to do, as void. This is the essence of judicial

power conferred by the Constitution "(I)n one Supreme Court and in such lower courts as may be established by law" (Art.
VIII, Section 1 of the 1935 Constitution; Article X, Section I of the 1973 Constitution and which was adopted as part of the
Freedom Constitution, and Article VIII, Section 1 of the 1987 Constitution) and which power this Court has exercised in
many instances (Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No. 6657
insofar as the inclusion of the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and
Guidelines promulgated in accordance therewith, are hereby DECLARED null and void for being unconstitutional and the
writ of preliminary injunction issued is hereby MADE permanent.
SO ORDERED.
Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Padilla, Bidin, Grio-Aquino, Medialdea
and Regalado, JJ., concur.
Feliciano, J., is on leave.

Separate Opinions

SARMIENTO, J., concurring:

I agree that the petition be granted.
It is my opinion however that the main issue on the validity of the assailed provisions of R.A. 6657 (the Comprehensive
Agrarian Reform Law of 1988) and its Implementing Rules and Guidelines insofar as they include the raising of livestock,
poultry, and swine in their coverage cannot be simplistically reduced to a question of constitutional construction.
It is a well-settled rule that construction and interpretation come only after it has been demonstrated that application is
impossible or inadequate without them. A close reading however of the constitutional text in point, specifically, Sec. 4, Art.
XIII, particularly the phrase, ". . . in case of other farmworkers, to receive a just share of the fruits thereof," provides a
basis for the clear and possible coverage of livestock, poultry, and swine raising within the ambit of the comprehensive
agrarian reform program. This accords with the principle that every presumption should be indulged in favor of the
constitutionality of a statute and the court in considering the validity of a statute should give it such reasonable
construction as can be reached to bring it within the fundamental law. 1
The presumption against unconstitutionality, I must say, assumes greater weight when a ruling to the contrary would, in
effect, defeat the laudable and noble purpose of the law, i.e., the welfare of the landless farmers and farmworkers in the
promotion of social justice, by the expedient conversion of agricultural lands into livestock, poultry, and swine raising by
scheming landowners, thus, rendering the comprehensive nature of the agrarian program merely illusory.
The instant controversy, I submit, boils down to the question of whether or not the assailed provisions violate the equal
protection clause of the Constitution (Article II, section 1) which teaches simply that all persons or things similarly situated
should be treated alike, both as to rights conferred and responsibilities imposed. 2
There is merit in the contention of the petitioner that substantial distinctions exist between land directed purely to
cultivation and harvesting of fruits or crops and land exclusively used for livestock, poultry and swine raising, that make
real differences, to wit:
x x x
No land is tilled and no crop is harvested in livestock and poultry farming. There are no tenants nor landlords, only
employers and employees.
Livestock and poultry do not sprout from land nor are they "fruits of the land."

Land is not even a primary resource in this industry. The land input is inconsequential that all the commercial hog and
poultry farms combined occupy less than one percent (1%) (0.4% for piggery, 0.2% for poultry) of the 5.45 million hectares
of land supposedly covered by the CARP. And most farms utilize only 2 to 5 hectares of land.: nad
In every respect livestock and poultry production is an industrial activity. Its use of an inconsequential portion of land is a
mere incident of its operation, as in any other undertaking, business or otherwise.
The fallacy of defining livestock and poultry production as an agricultural enterprise is nowhere more evident when one
considers that at least 95% of total investment in these farms is in the form of fixed assets which are industrial in nature.
These include (1) animal housing structures and facilities complete with drainage, waterers, blowers, misters and in some
cases even piped-in music; (2) feedmills complete with grinders, mixers, conveyors, exhausts, generators, etc.; (3)
extensive warehousing facilities for feeds and other supplies; (4) anti-pollution equipment such as bio-gas and digester
plants augmented by lagoons and concrete ponds; (5) deepwells, elevated water tanks, pumphouses and accessory
facilities; (6) modern equipment such as sprayers, pregnancy testers, etc.; (7) laboratory facilities complete with expensive
tools and equipment; and a myriad other such technologically advanced appurtances.
How then can livestock and poultry farmlands be arable when such are almost totally occupied by these structures?
The fallacy of equating the status of livestock and poultry farmworkers with that of agricultural tenants surfaces when one
considers contribution to output. Labor cost of livestock and poultry farms is no more than 4% of total operating cost. The
98% balance represents inputs not obtained from the land nor provided by the farmworkers inputs such as feeds and
biochemicals (80% of the total cost), power cost, cost of money and several others.
Moreover, livestock and poultry farmworkers are covered by minimum wage law rather than by tenancy law. They are
entitled to social security benefits where tenant-farmers are not. They are paid fixed wages rather than crop shares. And
as in any other industry, they receive additional benefits such as allowances, bonuses, and other incentives such as free
housing privileges, light and water.
Equating livestock and poultry farming with other agricultural activities is also fallacious in the sense that like the
manufacturing sector, it is a market for, rather than a source of agricultural output. At least 60% of the entire domestic
supply of corn is absorbed by livestock and poultry farms. So are the by-products of rice (rice-bran), coconut (copra meal),
banana (banana pulp meal), and fish (fish meal). 3
x x x
In view of the foregoing, it is clear that both kinds of lands are not similarly situated and hence, cannot be treated alike.
Therefore, the assailed provisions which allow for the inclusion of livestock and poultry industry within the coverage of the
agrarian reform program constitute invalid classification and must accordingly be struck down as repugnant to the equal
protection clause of the Constitution.chanrobles virtual law library

Endnotes
SARMIENTO, J., concurring:
1. In re Guarina, 24 Phil. 37; Yu Cong Eng v. Trinidad, 70 L. ed., p. 1059.
2. Ichong v. Hernandez, 101 Phil. 1155.
3. Rollo, 29-30.

EN BANC

DEPARTMENT OF AGRARIAN

G.R. No. 162070

REFORM, represented by SECRETARY

JOSE MARI B. PONCE (OIC),
Petitioner,

Present:
Davide, C.J.,
Puno,
Panganiban,
Quisumbing,
Ynares-Santiago,
Sandoval-Gutierrez,
Carpio,

versus

Austria-Martinez,
Corona,
Carpio Morales,
Callejo, Sr.,
Azcuna,
Tinga,
Chico-Nazario and
Garcia, JJ.

DELIA T. SUTTON, ELLA T.

SUTTON-SOLIMAN and

Promulgated:

HARRY T. SUTTON,
Respondents.

October 19, 2005

x x

DECISION

PUNO, J.:
This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision and Resolution of the
Court of Appeals, dated September 19, 2003 and February 4, 2004, respectively, which declared DAR Administrative
Order (A.O.) No. 9, series of 1993, null and void for being violative of the Constitution.
The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has been devoted exclusively to
cow and calf breeding. On October 26, 1987, pursuant to the then existing agrarian reform program of the government,
respondents made a voluntary offer to sell (VOS)[1] their landholdings to petitioner DAR to avail of certain incentives
under the law.
On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive Agrarian Reform
Law (CARL) of 1988, took effect. It included in its coverage farms used for raising livestock, poultry and swine.
On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of DAR,[2] this Court ruled that
lands devoted to livestock and poultry-raising are not included in the definition of agricultural land. Hence, we declared as
unconstitutional certain provisions of the CARL insofar as they included livestock farms in the coverage of agrarian
reform.
In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request to withdraw their VOS as their
landholding was devoted exclusively to cattle-raising and thus exempted from the coverage of the CARL.[3]
On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected respondents land and found
that it was devoted solely to cattle-raising and breeding. He recommended to the DAR Secretary that it be exempted from
the coverage of the CARL.
On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and requested the return of the
supporting papers they submitted in connection therewith.[4] Petitioner ignored their request.
On December 27, 1993, DAR issued A.O. No. 9, series of 1993,[5] which provided that only portions of private
agricultural lands used for the raising of livestock, poultry and swine as of June 15, 1988 shall be excluded from the
coverage of the CARL. In determining the area of land to be excluded, the A.O. fixed the following retention limits, viz:
1:1 animal-land ratio (i.e., 1 hectare of land per 1 head of animal shall be retained by the landowner), and a ratio of 1.7815
hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded from the operations of the
CARL.
On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final and irrevocable
the withdrawal of their VOS as, under the Luz Farms doctrine,their entire landholding is exempted from the CARL.[6]
On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order[7] partially granting the
application of respondents for exemption from the coverage of CARL. Applying the retention limits outlined in the DAR
A.O. No. 9, petitioner exempted 1,209 hectares of respondents land for grazing purposes, and a maximum of 102.5635
hectares for infrastructure. Petitioner ordered the rest of respondents landholding to be segregated and placed under
Compulsory Acquisition.
Respondents moved for reconsideration. They contend that their entire landholding should be exempted as it is devoted
exclusively to cattle-raising. Their motion was denied.[8] They filed a notice of appeal[9] with the Office of the President
assailing: (1) the reasonableness and validity of DAR A.O. No. 9, s. 1993, which provided for a ratio between land and
livestock in determining the land area qualified for exclusion from the CARL, and (2) the constitutionality of DAR A.O. No.
9, s. 1993, in view of the Luz Farms case which declared cattle-raising lands excluded from the coverage of agrarian
reform.

On October 9, 2001, the Office of the President affirmed the impugned Order of petitioner DAR.[10] It ruled that
DAR A.O. No. 9, s. 1993, does not run counter to the Luz Farms case as the A.O. provided the guidelines to determine
whether a certain parcel of land is being used for cattle-raising. However, the issue on the constitutionality of the
assailed A.O. was left for the determination of the courts as the sole arbiters of such issue.
On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O. No. 9, s. 1993, void for
being contrary to the intent of the 1987 Constitutional Commission to exclude livestock farms from the land reform
program of the government. The dispositive portion reads:
WHEREFORE, premises considered, DAR Administrative Order No. 09, Series of 1993 is hereby DECLARED null
and void. The assailed order of the Office of the President dated 09 October 2001 in so far as it affirmed the Department
of Agrarian Reforms ruling that petitioners landholding is covered by the agrarian reform program of the government
is REVERSED and SET ASIDE.

SO ORDERED.[11]
Hence, this petition.
The main issue in the case at bar is the constitutionality of DAR A.O. No. 9, series of 1993, which prescribes a
maximum retention limit for owners of lands devoted to livestock raising.
Invoking its rule-making power under Section 49 of the CARL, petitioner submits that it issued DAR A.O. No. 9 to
limit the area of livestock farm that may be retained by a landowner pursuant to its mandate to place all public and private
agricultural lands under the coverage of agrarian reform. Petitioner also contends that the A.O. seeks to remedy reports
that some unscrupulous landowners have converted their agricultural farms to livestock farms in order to evade their
coverage in the agrarian reform program.
Petitioners arguments fail to impress.
Administrative agencies are endowed with powers legislative in nature, i.e., the power to make rules and regulations.
They have been granted by Congress with the authority to issue rules to regulate the implementation of a law entrusted to
them. Delegated rule-making has become a practical necessity in modern governance due to the increasing complexity
and variety of public functions. However, while administrative rules and regulations have the force and effect of law, they
are not immune from judicial review.[12] They may be properly challenged before the courts to ensure that they do not
violate the Constitution and no grave abuse of administrative discretion is committed by the administrative body
concerned.
The fundamental rule in administrative law is that, to be valid, administrative rules and regulations must be
issued by authority of a law and must not contravene the provisions of the Constitution.[13] The rule-making power
of an administrative agency may not be used to abridge the authority given to it by Congress or by the Constitution. Nor
can it be used to enlarge the power of the administrative agency beyond the scope intended. Constitutional and
statutory provisions control with respect to what rules and regulations may be promulgated by administrative
agencies and the scope of their regulations.[14]
In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to
regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit
for their ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent to
exclude,inter alia, all lands exclusively devoted to livestock, swine and poultry- raising. The Court clarified in
the Luz Farms case that livestock, swine and poultry-raising are industrial activities and do not fall within the definition of
agriculture or agricultural activity. The raising of livestock, swine and poultry is different from crop or tree farming. It is
an industrial, not an agricultural, activity. A great portion of the investment in this enterprise is in the form of industrial fixed
assets, such as: animal housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers,

conveyors, exhausts and generators, extensive warehousing facilities for feeds and other supplies, anti-pollution
equipment like bio-gas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks,
pumphouses, sprayers, and other technological appurtenances.[15]

Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution
from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.
The subsequent case of Natalia Realty, Inc. v. DAR[16] reiterated our ruling in the Luz Farms case. In Natalia
Realty, the Court held that industrial, commercial and residential lands are not covered by the CARL.[17] We stressed
anew that while Section 4 of R.A. No. 6657 provides that the CARL shall cover all public and private agricultural
lands, the term agricultural land does not include lands classified as mineral, forest, residential, commercial or
industrial. Thus, in Natalia Realty, even portions of the Antipolo Hills Subdivision, which are arable yet still
undeveloped, could not be considered as agricultural lands subject to agrarian reform as these lots were already
classified as residential lands.
A similar logical deduction should be followed in the case at bar. Lands devoted to raising of livestock, poultry and
swine have been classified as industrial, not agricultural, lands and thus exempt from agrarian reform. Petitioner DAR
argues that, in issuing the impugned A.O., it was seeking to address the reports it has received that some unscrupulous
landowners have been converting their agricultural lands to livestock farms to avoid their coverage by the agrarian
reform. Again, we find neither merit nor logic in this contention. The undesirable scenario which petitioner seeks to
prevent with the issuance of the A.O. clearly does not apply in this case. Respondents family acquired their
landholdings as early as 1948. They have long been in the business of breeding cattle in Masbate which is popularly
known as the cattle-breeding capital of the Philippines.[18] Petitioner DAR does not dispute this fact. Indeed, there is no
evidence on record that respondents have just recently engaged in or converted to the business of breeding cattle after
the enactment of the CARL that may lead one to suspect that respondents intended to evade its coverage. It must be
stressed that what the CARL prohibits is the conversion of agricultural lands for non-agricultural purposes after the
effectivity of the CARL. There has been no change of business interest in the case of respondents.
Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by Congress without
substantial change is an implied legislative approval and adoption of the previous law. On the other hand, by making a
new law, Congress seeks to supersede an earlier one.[19] In the case at bar, after the passage of the 1988 CARL,
Congress enacted R.A. No. 7881[20] which amended certain provisions of the CARL. Specifically, the new law changed
the definition of the terms agricultural activity and commercial farming by dropping from its coverage lands
that are devoted to commercial livestock, poultry and swine-raising.[21] With this significant modification,
Congress clearly sought to align the provisions of our agrarian laws with the intent of the 1987 Constitutional
Commission to exclude livestock farms from the coverage of agrarian reform.
In sum, it is doctrinal that rules of administrative bodies must be in harmony with the provisions of the Constitution. They
cannot amend or extend the Constitution. To be valid, they must conform to and be consistent with the Constitution. In
case of conflict between an administrative order and the provisions of the Constitution, the latter prevails.[22] The
assailed A.O. of petitioner DAR was properly stricken down as unconstitutional as it enlarges the coverage of agrarian
reform beyond the scope intended by the 1987 Constitution.
IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision and Resolution of the Court of Appeals, dated
September 19, 2003 and February 4, 2004, respectively, are AFFIRMED. No pronouncement as to costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 100091 October 22, 1992

CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS PRESIDENT DR. LEONARDO A. CHUA, petitioner,
vs.
THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, THE COURT OF APPEALS and ALVIN
OBRIQUE, REPRESENTING BUKIDNON FREE FARMERS AGRICULTURAL LABORERS ORGANIZATION
(BUFFALO), respondents.

CAMPOS, JR., J.:

This is a Petition for Review on Certiorari under Rule 65 of the Rules of Court to nullify the proceedings and decision of
the Department of Agrarian Reform Adjudication Board (DARAB for brevity) dated September 4, 1989 and to set aside the
decision the decision * of the Court of Appeals dated August 20, 1990, affirming the decision of the DARAB which ordered
the segregation of 400 hectares of suitable, compact and contiguous portions of the Central Mindanao University (CMU
for brevity) land and their inclusion in the Comprehensive Agrarian Reform Program (CARP for brevity) for distribution to
qualified beneficiaries, on the ground of lack of jurisdiction.
This case originated in a complaint filed by complainants calling themselves as the Bukidnon Free Farmers and
Agricultural Laborers Organization (BUFFALO for brevity) under the leadership of Alvin Obrique and Luis Hermoso against
the CMU, before the Department of Agrarian Reform for Declaration of Status as Tenants, under the CARP.
From the records, the following facts are evident. The petitioner, the CMU, is an agricultural educational institution owned
and run by the state located in the town of Musuan, Bukidnon province. It started as a farm school at Marilang, Bukidnon
in early 1910, in response to the public demand for an agricultural school in Mindanao. It expanded into the Bukidnon
National Agricultural High School and was transferred to its new site in Managok near Malaybalay, the provincial capital of
Bukidnon.
In the early 1960's, it was converted into a college with campus at Musuan, until it became what is now known as the
CMU, but still primarily an agricultural university. From its beginning, the school was the answer to the crying need for
training people in order to develop the agricultural potential of the island of Mindanao. Those who planned and established
the school had a vision as to the future development of that part of the Philippines. On January 16, 1958 the President of
the Republic of the Philippines, the late Carlos P. Garcia, "upon the recommendation of the Secretary of Agriculture and
Natural Resources, and pursuant to the provisions of Section 53, of Commonwealth Act No. 141, as amended", issued
Proclamation No. 476, withdrawing from sale or settlement and reserving for the Mindanao Agricultural College, a site
which would be the future campus of what is now the CMU. A total land area comprising 3,080 hectares was surveyed
and registered and titled in the name of the petitioner under OCT Nos. 160, 161 and 162. 1
In the course of the cadastral hearing of the school's petition for registration of the aforementioned grant of agricultural
land, several tribes belonging to cultural communities, opposed the petition claiming ownership of certain ancestral lands
forming part of the tribal reservations. Some of the claims were granted so that what was titled to the present petitioner
school was reduced from 3,401 hectares to 3,080 hectares.

In the early 1960's, the student population of the school was less than 3,000. By 1988, the student population had
expanded to some 13,000 students, so that the school community has an academic population (student, faculty and nonacademic staff) of almost 15,000. To cope with the increase in its enrollment, it has expanded and improved its
educational facilities partly from government appropriation and partly by self-help measures.
True to the concept of a land grant college, the school embarked on self-help measures to carry out its educational
objectives, train its students, and maintain various activities which the government appropriation could not adequately
support or sustain. In 1984, the CMU approved Resolution No. 160, adopting a livelihood program called "Kilusang
Sariling Sikap Program" under which the land resources of the University were leased to its faculty and employees. This
arrangement was covered by a written contract. Under this program the faculty and staff combine themselves to groups of
five members each, and the CMU provided technical know-how, practical training and all kinds of assistance, to enable
each group to cultivate 4 to 5 hectares of land for the lowland rice project. Each group pays the CMU a service fee and
also a land use participant's fee. The contract prohibits participants and their hired workers to establish houses or live in
the project area and to use the cultivated land as a collateral for any kind of loan. It was expressly stipulated that no
landlord-tenant relationship existed between the CMU and the faculty and/or employees. This particular program was
conceived as a multi-disciplinary applied research extension and productivity program to utilize available land, train people
in modern agricultural technology and at the same time give the faculty and staff opportunities within the confines of the
CMU reservation to earn additional income to augment their salaries. The location of the CMU at Musuan, Bukidnon,
which is quite a distance from the nearest town, was the proper setting for the adoption of such a program. Among the
participants in this program were Alvin Obrique, Felix Guinanao, Joven Caballero, Nestor Pulao, Danilo Vasquez, Aronio
Pelayo and other complainants. Obrique was a Physics Instructor at the CMU while the others were employees in the
lowland rice project. The other complainants who were not members of the faculty or non-academic staff CMU, were hired
workers or laborers of the participants in this program. When petitioner Dr. Leonardo Chua became President of the CMU
in July 1986, he discontinued the agri-business project for the production of rice, corn and sugar cane known as AgriBusiness Management and Training Project, due to losses incurred while carrying on the said project. Some CMU
personnel, among whom were the complainants, were laid-off when this project was discontinued. As Assistant Director of
this agri-business project, Obrique was found guilty of mishandling the CMU funds and was separated from service by
virtue of Executive Order No. 17, the re-organization law of the CMU.
Sometime in 1986, under Dr. Chua as President, the CMU launched a self-help project called CMU-Income Enhancement
Program (CMU-IEP) to develop unutilized land resources, mobilize and promote the spirit of self-reliance, provide socioeconomic and technical training in actual field project implementation and augment the income of the faculty and the staff.
Under the terms of a 3-party Memorandum of Agreement 2 among the CMU, the CMU-Integrated Development
Foundation (CMU-IDF) and groups or "seldas" of 5 CMU employees, the CMU would provide the use of 4 to 5 hectares of
land to a selda for one (1) calendar year. The CMU-IDF would provide researchers and specialists to assist in the
preparation of project proposals and to monitor and analyze project implementation. The selda in turn would pay to the
CMU P100 as service fee and P1,000 per hectare as participant's land rental fee. In addition, 400 kilograms of the
produce per year would be turned over or donated to the CMU-IDF. The participants agreed not to allow their hired
laborers or member of their family to establish any house or live within vicinity of the project area and not to use the
allocated lot as collateral for a loan. It was expressly provided that no tenant-landlord relationship would exist as a result
of the Agreement.
Initially, participation in the CMU-IEP was extended only to workers and staff members who were still employed with the
CMU and was not made available to former workers or employees. In the middle of 1987, to cushion the impact of the
discontinuance of the rice, corn and sugar cane project on the lives of its former workers, the CMU allowed them to
participate in the CMU-IEP as special participants.
Under the terms of a contract called Addendum To Existing Memorandum of Agreement Concerning Participation To the
CMU-Income Enhancement Program, 3 a former employee would be grouped with an existing selda of his choice and
provided one (1) hectare for a lowland rice project for one (1) calendar year. He would pay the land rental participant's fee
of P1,000.00 per hectare but on a charge-to-crop basis. He would also be subject to the same prohibitions as those
imposed on the CMU employees. It was also expressly provided that no tenant-landlord relationship would exist as a
result of the Agreement.

The one-year contracts expired on June 30, 1988. Some contracts were renewed. Those whose contracts were not
renewed were served with notices to vacate.
The non-renewal of the contracts, the discontinuance of the rice, corn and sugar cane project, the loss of jobs due to
termination or separation from the service and the alleged harassment by school authorities, all contributed to, and
precipitated the filing of the complaint.
On the basis of the above facts, the DARAB found that the private respondents were not tenants and cannot therefore be
beneficiaries under the CARP. At the same time, the DARAB ordered the segregation of 400 hectares of suitable, compact
and contiguous portions of the CMU land and their inclusion in the CARP for distribution to qualified beneficiaries.
The petitioner CMU, in seeking a review of the decisions of the respondents DARAB and the Court of Appeals, raised the
following issues:
1.) Whether or not the DARAB has jurisdiction to hear and decide Case No. 005 for Declaration of Status of Tenants and
coverage of land under the CARP.
2.) Whether or not respondent Court of Appeals committed serious errors and grave abuse of discretion amounting to lack
of jurisdiction in dismissing the Petition for Review on Certiorari and affirming the decision of DARAB.
In their complaint, docketed as DAR Case No. 5, filed with the DARAB, complainants Obrique, et al. claimed that they are
tenants of the CMU and/or landless peasants claiming/occupying a part or portion of the CMU situated at Sinalayan,
Valencia, Bukidnon and Musuan, Bukidnon, consisting of about 1,200 hectares. We agree with the DARAB's finding that
Obrique, et. al. are not tenants. Under the terms of the written agreement signed by Obrique, et. al., pursuant to the
livelihood program called "Kilusang Sariling Sikap Program", it was expressly stipulated that no landlord-tenant
relationship existed between the CMU and the faculty and staff (participants in the project). The CMU did not receive any
share from the harvest/fruits of the land tilled by the participants. What the CMU collected was a nominal service fee and
land use participant's fee in consideration of all the kinds of assistance given to the participants by the CMU. Again, the
agreement signed by the participants under the CMU-IEP clearly stipulated that no landlord-tenant relationship existed,
and that the participants are not share croppers nor lessees, and the CMU did not share in the produce of the participants'
labor.
In the same paragraph of their complaint, complainants claim that they are landless peasants. This allegation requires
proof and should not be accepted as factually true. Obrique is not a landless peasant. The facts showed he was Physics
Instructor at CMU holding a very responsible position was separated from the service on account of certain irregularities
he committed while Assistant Director of the Agri-Business Project of cultivating lowland rice. Others may, at the moment,
own no land in Bukidnon but they may not necessarily be so destitute in their places of origin. No proof whatsoever
appears in the record to show that they are landless peasants.
The evidence on record establish without doubt that the complainants were originally authorized or given permission to
occupy certain areas of the CMU property for a definite purpose to carry out certain university projects as part of the
CMU's program of activities pursuant to its avowed purpose of giving training and instruction in agricultural and other
related technologies, using the land and other resources of the institution as a laboratory for these projects. Their entry
into the land of the CMU was with the permission and written consent of the owner, the CMU, for a limited period and for a
specific purpose. After the expiration of their privilege to occupy and cultivate the land of the CMU, their continued stay
was unauthorized and their settlement on the CMU's land was without legal authority. A person entering upon lands of
another, not claiming in good faith the right to do so by virtue of any title of his own, or by virtue of some agreement with
the owner or with one whom he believes holds title to the land, is a squatter. 4 Squatters cannot enter the land of another
surreptitiously or by stealth, and under the umbrella of the CARP, claim rights to said property as landless peasants.
Under Section 73 of R.A. 6657, persons guilty of committing prohibited acts of forcible entry or illegal detainer do not
qualify as beneficiaries and may not avail themselves of the rights and benefits of agrarian reform. Any such person who
knowingly and wilfully violates the above provision of the Act shall be punished with imprisonment or fine at the discretion
of the Court.

In view of the above, the private respondents, not being tenants nor proven to be landless peasants, cannot qualify as
beneficiaries under the CARP.
The questioned decision of the Adjudication Board, affirmed in toto by the Court of Appeals, segregating 400 hectares
from the CMU land is primarily based on the alleged fact that the land subject hereof is "not directly, actually and
exclusively used for school sites, because the same was leased to Philippine Packing Corporation (now Del Monte
Philippines)".
In support of this view, the Board held that the "respondent University failed to show that it is using actually, really, truly
and in fact, the questioned area to the exclusion of others, nor did it show that the same is directly used without any
intervening agency or person", 5 and "there is no definite and concrete showing that the use of said lands are essentially
indispensable for educational purposes". 6 The reliance by the respondents Board and Appellate Tribunal on the technical
or literal definition from Moreno's Philippine Law Dictionary and Black's Law Dictionary, may give the ordinary reader a
classroom meaning of the phrase "is actually directly and exclusively", but in so doing they missed the true meaning of
Section 10, R.A. 6657, as to what lands are exempted or excluded from the coverage of the CARP.
The pertinent provisions of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, are 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.
More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
reclassification of forest of 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 ad 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.
Sec. 10 EXEMPTIONS AND EXCLUSIONS. Lands actually, directly and exclusively used and found to
be necessary for parks, wildlife, forest reserves, reforestration, fish sanctuaries and breeding grounds,
watersheds and mangroves, national defense, school sites and campuses including experimental farm
stations operated by public or private schools for educational purposes, seeds and seedlings research
and pilot production centers, church sites and convents appurtenant thereto, mosque sites and Islamic
centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms
actually worked by the inmates, government and private research and quarantine centers and all lands
with eighteen percent (18%) slope and over, except those already developed shall be exempt from the
coverage of this Act. (Emphasis supplied).
The construction given by the DARAB to Section 10 restricts the land area of the CMU to its present needs or to a land
area presently, actively exploited and utilized by the university in carrying out its present educational program with its
present student population and academic facility overlooking the very significant factor of growth of the university in the
years to come. By the nature of the CMU, which is a school established to promote agriculture and industry, the need for a
vast tract of agricultural land and for future programs of expansion is obvious. At the outset, the CMU was conceived in

the same manner as land grant colleges in America, a type of educational institution which blazed the trail for the
development of vast tracts of unexplored and undeveloped agricultural lands in the Mid-West. What we now know as
Michigan State University, Penn State University and Illinois State University, started as small land grant colleges, with
meager funding to support their ever increasing educational programs. They were given extensive tracts of agricultural
and forest lands to be developed to support their numerous expanding activities in the fields of agricultural technology and
scientific research. Funds for the support of the educational programs of land grant colleges came from government
appropriation, tuition and other student fees, private endowments and gifts, and earnings from miscellaneous sources. 7 It
was in this same spirit that President Garcia issued Proclamation No. 476, withdrawing from sale or settlement and
reserving for the Mindanao Agricultural College (forerunner of the CMU) a land reservation of 3,080 hectares as its future
campus. It was set up in Bukidnon, in the hinterlands of Mindanao, in order that it can have enough resources and wide
open spaces to grow as an agricultural educational institution, to develop and train future farmers of Mindanao and help
attract settlers to that part of the country.
In line with its avowed purpose as an agricultural and technical school, the University adopted a land utilization program to
develop and exploit its 3080-hectare land reservation as follows: 8
No. of Hectares Percentage
a. Livestock and Pasture 1,016.40 33
b. Upland Crops 616 20
c. Campus and Residential sites 462 15
d. Irrigated rice 400.40 13
e. Watershed and forest reservation 308 10
f. Fruit and Trees Crops 154 5
g. Agricultural
Experimental stations 123.20 4
3,080.00 100%
The first land use plan of the CARP was prepared in 1975 and since then it has undergone several revisions in line with
changing economic conditions, national economic policies and financial limitations and availability of resources. The CMU,
through Resolution No. 160 S. 1984, pursuant to its development plan, adopted a multi-disciplinary applied research
extension and productivity program called the "Kilusang Sariling Sikap Project" (CMU-KSSP). The objectives 9 of this
program were:
1. Provide researches who shall assist in (a) preparation of proposal; (b) monitor project implementation;
and (c) collect and analyze all data and information relevant to the processes and results of project
implementation;
2. Provide the use of land within the University reservation for the purpose of establishing a lowland rice
project for the party of the Second Part for a period of one calendar year subject to discretionary renewal
by the Party of the First Part;
3. Provide practical training to the Party of the Second Part on the management and operation of their
lowland project upon request of Party of the Second Part; and

4. Provide technical assistance in the form of relevant livelihood project specialists who shall extend
expertise on scientific methods of crop production upon request by Party of the Second Part.
In return for the technical assistance extended by the CMU, the participants in a project pay a nominal amount as service
fee. The self-reliance program was adjunct to the CMU's lowland rice project.
The portion of the CMU land leased to the Philippine Packing Corporation (now Del Monte Phils., Inc.) was leased long
before the CARP was passed. The agreement with the Philippine Packing Corporation was not a lease but a Management
and Development Agreement, a joint undertaking where use by the Philippine Packing Corporation of the land was part of
the CMU research program, with the direct participation of faculty and students. Said contracts with the Philippine Packing
Corporation and others of a similar nature (like MM-Agraplex) were made prior to the enactment of R.A. 6657 and were
directly connected to the purpose and objectives of the CMU as an educational institution. As soon as the objectives of the
agreement for the joint use of the CMU land were achieved as of June 1988, the CMU adopted a blue print for the
exclusive use and utilization of said areas to carry out its own research and agricultural experiments.
As to the determination of when and what lands are found to be necessary for use by the CMU, the school is in the best
position to resolve and answer the question and pass upon the problem of its needs in relation to its avowed objectives for
which the land was given to it by the State. Neither the DARAB nor the Court of Appeals has the right to substitute its
judgment or discretion on this matter, unless the evidentiary facts are so manifest as to show that the CMU has no real for
the land.
It is our opinion that the 400 hectares ordered segregated by the DARAB and affirmed by the Court of Appeals in its
Decision dated August 20, 1990, is not covered by the CARP because:
(1) It is not alienable and disposable land of the public domain;
(2) The CMU land reservation is not in excess of specific limits as determined by Congress;
(3) It is private land registered and titled in the name of its lawful owner, the CMU;
(4) It is exempt from coverage under Section 10 of R.A. 6657 because the lands are actually, directly and
exclusively used and found to be necessary for school site and campus, including experimental farm
stations for educational purposes, and for establishing seed and seedling research and pilot production
centers. (Emphasis supplied).
Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the jurisdiction of the DARAB is limited only to matters
involving the implementation of the CARP. More specifically, it is restricted to agrarian cases and controversies involving
lands falling within the coverage of the aforementioned program. It does not include those which are actually, directly and
exclusively used and found to be necessary for, among such purposes, school sites and campuses for setting up
experimental farm stations, research and pilot production centers, etc.
Consequently, the DARAB has no power to try, hear and adjudicate the case pending before it involving a portion of the
CMU's titled school site, as the portion of the CMU land reservation ordered segregated is actually, directly and
exclusively used and found by the school to be necessary for its purposes. The CMU has constantly raised the issue of
the DARAB's lack of jurisdiction and has questioned the respondent's authority to hear, try and adjudicate the case at bar.
Despite the law and the evidence on record tending to establish that the fact that the DARAB had no jurisdiction, it made
the adjudication now subject of review.
Whether the DARAB has the authority to order the segregation of a portion of a private property titled in the name of its
lawful owner, even if the claimant is not entitled as a beneficiary, is an issue we feel we must resolve. The quasi-judicial
powers of DARAB are provided in Executive Order No. 129-A, quoted hereunder in so far as pertinent to the issue at bar:

Sec. 13. AGRARIAN REFORM ADJUDICATION BOARD There is hereby created an Agrarian
Reform Adjudication Board under the office of the Secretary. . . . The Board shall assume the powers and
functions with respect to adjudication of agrarian reform cases under Executive Order 229 and this
Executive Order . . .
Sec. 17. QUASI JUDICIAL POWERS OF THE DAR. The DAR is hereby vested with quasi-judicial
powers to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction
over all matters including implementation of Agrarian Reform.
Section 50 of R.A. 6658 confers on the DAR quasi-judicial powers as follows:
The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters
and shall have original jurisdiction over all matters involving the implementation of agrarian reform. . . .
Section 17 of Executive Order No. 129-A is merely a repetition of Section 50, R.A. 6657. There is no doubt that
the DARAB has jurisdiction to try and decide any agrarian dispute in the implementation of the CARP. An agrarian
dispute is defined by the same law as any controversy relating to tenurial rights whether leasehold, tenancy
stewardship or otherwise over lands devoted to
agriculture. 10
In the case at bar, the DARAB found that the complainants are not share tenants or lease holders of the CMU, yet it
ordered the "segregation of a suitable compact and contiguous area of Four Hundred hectares, more or less", from the
CMU land reservation, and directed the DAR Regional Director to implement its order of segregation. Having found that
the complainants in this agrarian dispute for Declaration of Tenancy Status are not entitled to claim as beneficiaries of the
CARP because they are not share tenants or leaseholders, its order for the segregation of 400 hectares of the CMU land
was without legal authority. w do not believe that the quasi-judicial function of the DARAB carries with it greater authority
than ordinary courts to make an award beyond what was demanded by the complainants/petitioners, even in an agrarian
dispute. Where the quasi-judicial body finds that the complainants/petitioners are not entitled to the rights they are
demanding, it is an erroneous interpretation of authority for that quasi-judicial body to order private property to be awarded
to future beneficiaries. The order segregation 400 hectares of the CMU land was issued on a finding that the complainants
are not entitled as beneficiaries, and on an erroneous assumption that the CMU land which is excluded or exempted
under the law is subject to the coverage of the CARP. Going beyond what was asked by the complainants who were not
entitled to the relief prayed the complainants who were not entitled to the relief prayed for, constitutes a grave abuse of
discretion because it implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction.
The education of the youth and agrarian reform are admittedly among the highest priorities in the government socioeconomic programs. In this case, neither need give way to the other. Certainly, there must still be vast tracts of agricultural
land in Mindanao outside the CMU land reservation which can be made available to landless peasants, assuming the
claimants here, or some of them, can qualify as CARP beneficiaries. To our mind, the taking of the CMU land which had
been segregated for educational purposes for distribution to yet uncertain beneficiaries is a gross misinterpretation of the
authority and jurisdiction granted by law to the DARAB.
The decision in this case is of far-reaching significance as far as it concerns state colleges and universities whose
resources and research facilities may be gradually eroded by misconstruing the exemptions from the CARP. These state
colleges and universities are the main vehicles for our scientific and technological advancement in the field of agriculture,
so vital to the existence, growth and development of this country.
It is the opinion of this Court, in the light of the foregoing analysis and for the reasons indicated, that the evidence is
sufficient to sustain a finding of grave abuse of discretion by respondents Court of Appeals and DAR Adjudication Board.
We hereby declare the decision of the DARAB dated September 4, 1989 and the decision of the Court of Appeals dated
August 20, 1990, affirming the decision of the quasi-judicial body, as null and void and hereby order that they be set aside,
with costs against the private respondents.
SO ORDERED

Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Medialdea, Regalado, Davide, Jr., Romero, Nocon, and Melo,
JJ., concur.
Bellosillo, J., took no part.
Narvasa, C.J., is on leave.

FIRST DIVISION
[G.R. No. 158228. March 23, 2004]
DEPARTMENT
OF
AGRARIAN
PAGDANGANAN, petitioner,
(DECS),respondent.

REFORM,
as
represented
by
its
vs. DEPARTMENT OF EDUCATION,

Secretary,
CULTURE

ROBERTO
M.
AND SPORTS

DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari seeks to set aside the decision[1] of the Court of Appeals dated October 29,
2002 in CA-G.R. SP No. 64378, which reversed the August 30, 2000 decision of the Secretary of Agrarian Reform, as well
as the Resolution dated May 7, 2003, which denied petitioners motion for reconsideration.
In controversy are Lot No. 2509 and Lot No. 817-D consisting of an aggregate area of 189.2462 hectares located at
Hacienda Fe, Escalante, Negros Occidental and Brgy. Gen. Luna, Sagay, Negros Occidental, respectively. OnOctober 21,
1921, these lands were donated by the late Esteban Jalandoni to respondent DECS (formerly Bureau of Education).
[2]
Consequently, titles thereto were transferred in the name of respondent DECS under Transfer Certificate of Title No.
167175.[3]
On July 15, 1985, respondent DECS leased the lands to Anglo Agricultural Corporation for 10 agricultural crop years,
commencing from crop year 1984-1985 to crop year 1993-1994. The contract of lease was subsequently renewed for
another 10 agricultural crop years, commencing from crop year 1995-1996 to crop year 2004-2005. [4]
On June 10, 1993, Eugenio Alpar and several others, claiming to be permanent and regular farm workers of the
subject lands, filed a petition for Compulsory Agrarian Reform Program (CARP) coverage with the Municipal Agrarian
Reform Office (MARO) of Escalante.[5]
After investigation, MARO Jacinto R. Piosa, sent a Notice of Coverage to respondent DECS, stating that the subject
lands are now covered by CARP and inviting its representatives for a conference with the farmer beneficiaries. [6] Then,
MARO Piosa submitted his report to OIC-PARO Stephen M. Leonidas, who recommended to the DAR Regional Director
the approval of the coverage of the landholdings.
On August 7, 1998, DAR Regional Director Dominador B. Andres approved the recommendation, the dispositive
portion of which reads:
WHEREFORE, all the foregoing premises considered, the petition is granted. Order is hereby issued:
1. Placing under CARP coverage Lot 2509 with an area of 111.4791 hectares situated at Had. Fe, Escalante,
Negros Occidental and Lot 817-D with an area of 77.7671 hectares situated at Brgy. Gen. Luna,
Sagay, Negros Occidental;

2. Affirming the notice of coverage sent by the DAR Provincial Office, Negros Occidental dated November 23,
1994;
3. Directing the Provincial Agrarian Reform Office of Negros Occidental and the Municipal Agrarian Reform
Officers of Sagay and Escalante to facilitate the acquisition of the subject landholdings and the distribution of
the same qualified beneficiaries.
SO ORDERED.[7]
Respondent DECS appealed the case to the Secretary of Agrarian Reform which affirmed the Order of the Regional
Director. [8]
Aggrieved, respondent DECS filed a petition for certiorari with the Court of Appeals, which set aside the decision of
the Secretary of Agrarian Reform.[9]
Hence, the instant petition for review.
The pivotal issue to be resolved in this case is whether or not the subject properties are exempt from the coverage of
Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1998 (CARL).
The general policy under CARL is to cover as much lands suitable for agriculture as possible. [10] Section 4 of R.A. No.
6657 sets out the coverage of CARP. It states that the program shall:
cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in
Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture.
More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this
Act until Congress, taking into account, ecological, developmental and equity considerations, shall have
determined by law, the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits as determined by Congress in the preceding
paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that
can be raised thereon.
Section 3(c) thereof defines agricultural land, as land devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or industrial land. The term agriculture or agricultural activity is also
defined by the same law as follows:
Agriculture, Agricultural Enterprises or Agricultural Activity means the cultivation of the soil, planting of crops, growing of
fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm products, and other farm activities, and
practices performed by a farmer in conjunction with such farming operations done by persons whether natural or juridical.
[11]

The records of the case show that the subject properties were formerly private agricultural lands owned by the late
Esteban Jalandoni, and were donated to respondent DECS. From that time until they were leased to Anglo Agricultural
Corporation, the lands continued to be agricultural primarily planted to sugarcane, albeit part of the public domain being

owned by an agency of the government. [12] Moreover, there is no legislative or presidential act, before and after the
enactment of R.A. No. 6657, classifying the said lands as mineral, forest, residential, commercial or industrial
land. Indubitably, the subject lands fall under the classification of lands of the public domain devoted to or suitable for
agriculture.
Respondent DECS sought exemption from CARP coverage on the ground that all the income derived from its
contract of lease with Anglo Agricultural Corporation were actually, directly and exclusively used for educational purposes,
such as for the repairs and renovations of schools in the nearby locality.
Petitioner DAR, on the other hand, argued that the lands subject hereof are not exempt from the CARP coverage
because the same are not actually, directly and exclusively used as school sites or campuses, as they are in fact leased to
Anglo Agricultural Corporation. Further, to be exempt from the coverage, it is the land per se, not the income derived
therefrom, that must be actually, directly and exclusively used for educational purposes.
We agree with the petitioner.
Section 10 of R.A. No. 6657 enumerates the types of lands which are exempted from the coverage of CARP as well
as the purposes of their exemption, viz:
xxxxxxxxx
c) Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and
campuses, including experimental farm stations operated by public or private schools for educational purposes, , shall be
exempt from the coverage of this Act.[13]
xxxxxxxxx
Clearly, a reading of the paragraph shows that, in order to be exempt from the coverage: 1) the land must
be actually, directly, and exclusively used and found to be necessary; and 2) the purpose is for school sites and
campuses, including experimental farm stations operated by public or private schools for educational purposes.
The importance of the phrase actually, directly, and exclusively used and found to be necessary cannot be
understated, as what respondent DECS would want us to do by not taking the words in their literal and technical
definitions. The words of the law are clear and unambiguous. Thus, the plain meaning rule or verba legis in statutory
construction is applicable in this case. Where the words of a statute are clear, plain and free from ambiguity, it must be
given its literal meaning and applied without attempted interpretation. [14]
We are not unaware of our ruling in the case of Central Mindanao University v. Department of Agrarian Reform
Adjudication Board,[15] wherein we declared the land subject thereof exempt from CARP coverage. However, respondent
DECS reliance thereon is misplaced because the factual circumstances are different in the case at bar.
Firstly, in the CMU case, the land involved was not alienable and disposable land of the public domain because it
was reserved by the late President Carlos P. Garcia under Proclamation No. 476 for the use
of MindanaoAgricultural College (now CMU).[16] In this case, however, the lands fall under the category of alienable and
disposable lands of the public domain suitable for agriculture.
Secondly, in the CMU case, the land was actually, directly and exclusively used and found to be necessary for school
sites and campuses. Although a portion of it was being used by the Philippine Packing Corporation (now Del Monte Phils.,
Inc.) under a Management and Development Agreement, the undertaking was that the land shall be used by the
Philippine Packing Corporation as part of the CMU research program, with direct participation of faculty and
students. Moreover, the land was part of the land utilization program developed by the CMU for its Kilusang Sariling Sikap
Project (CMU-KSSP), a multi-disciplinary applied research extension and productivity program. [17] Hence, the retention of
the land was found to be necessary for the present and future educational needs of the CMU. On the other hand, the

lands in this case were not actually and exclusively utilized as school sites and campuses, as they were leased to Anglo
Agricultural Corporation, not for educational purposes but for the furtherance of its business. Also, as conceded by
respondent DECS, it was the income from the contract of lease and not the subject lands that was directly used for the
repairs and renovations of the schools in the locality.
Anent the issue of whether the farmers are qualified beneficiaries of CARP, we disagree with the Court of Appeals
finding that they were not.
At the outset, it should be pointed out that the identification of actual and potential beneficiaries under CARP is
vested in the Secretary of Agrarian Reform pursuant to Section 15, R.A. No. 6657, which states:
SECTION 15. Registration of Beneficiaries. The DAR in coordination with the Barangay Agrarian Reform Committee
(BARC) as organized in this Act, shall register all agricultural lessees, tenants and farmworkers who are qualified to be
beneficiaries of the CARP. These potential beneficiaries with the assistance of the BARC and the DAR shall provide the
following data:
(a) names and members of their immediate farm household;
(b) owners or administrators of the lands they work on and the length of tenurial relationship;
(c) location and area of the land they work;
(d) crops planted; and
(e) their share in the harvest or amount of rental paid or wages received.
A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in the barangay hall, school
or other public buildings in the barangay where it shall be open to inspection by the public at all reasonable hours.
In the case at bar, the BARC certified that herein farmers were potential CARP beneficiaries of the subject properties.
Further, on November 23, 1994, the Secretary of Agrarian Reform through the Municipal Agrarian Reform Office
(MARO) issued a Notice of Coverage placing the subject properties under CARP. Since the identification and selection of
CARP beneficiaries are matters involving strictly the administrative implementation of the CARP,[19] it behooves the courts
to exercise great caution in substituting its own determination of the issue, unless there is grave abuse of discretion
committed by the administrative agency. In this case, there was none.
[18]

The Comprehensive Agrarian Reform Program (CARP) is the bastion of social justice of poor landless farmers, the
mechanism designed to redistribute to the underprivileged the natural right to toil the earth, and to liberate them from
oppressive tenancy. To those who seek its benefit, it is the means towards a viable livelihood and, ultimately, a decent
life. The objective of the State is no less certain: landless farmers and farmworkers will receive the highest consideration
to promote social justice and to move the nation toward sound rural development and industrialization. [20]
WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of Appeals dated
October 29, 2002, in CA-G.R. SP No. 64378 is REVERSED and SET ASIDE. The decision dated August 30, 2000 of the
Secretary of Agrarian Reform placing the subject lands under CARP coverage, is REINSTATED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Carpio, and Azcuna, JJ., concur.
Panganiban, J., on official leave.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 103125 May 17, 1993

PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R. VILLAFUERTE and HON. BENJAMIN V. PANGA as
Presiding Judge of RTC Branch 33 at Pili, Camarines Sur, petitioners,
vs.
THE COURT OF APPEALS (THIRD DIVISION), ERNESTO SAN JOAQUIN and EFREN SAN JOAQUIN,respondents.
The Provincial Attorney for petitioners.
Reynaldo L. Herrera for Ernesto San Joaquin.

QUIASON, J.:
In this appeal by certiorari from the decision of the Court of Appeals in AC-G.R. SP No. 20551 entitled "Ernesto N. San
Joaquin, et al., v. Hon. Benjamin V. Panga, et al.," this Court is asked to decide whether the expropriation of agricultural
lands by local government units is subject, to the prior approval of the Secretary of the Agrarian Reform, as the
implementator of the agrarian reform program.
On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur passed Resolution No. 129,
Series of 1988, authorizing the Provincial Governor to purchase or expropriate property contiguous to the provincial
capitol site, in order to establish a pilot farm for non-food and non-traditional agricultural crops and a housing project for
provincial government employees.
The "WHEREAS" clause o:f the Resolution states:
WHEREAS, the province of Camarines Sur has adopted a five-year Comprehensive Development plan,
some of the vital components of which includes the establishment of model and pilot farm for non-food
and non-traditional agricultural crops, soil testing and tissue culture laboratory centers, 15 small scale
technology soap making, small scale products of plaster of paris, marine biological and sea farming
research center,and other progressive feasibility concepts objective of which is to provide the necessary
scientific and technology know-how to farmers and fishermen in Camarines Sur and to establish a
housing project for provincial government employees;
WHEREAS, the province would need additional land to be acquired either by purchase or expropriation to
implement the above program component;
WHEREAS, there are contiguous/adjacent properties to be (sic) present Provincial Capitol Site ideally
suitable to establish the same pilot development center;
WHEREFORE . . . .

Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, Hon. Luis R.Villafuerte, filed two
separate cases for expropriation against Ernesto N. San Joaquin and Efren N. San Joaquin, docketed as Special Civil
Action Nos. P-17-89 and P-19-89 of the Regional Trial Court, Pili, Camarines Sur, presided by the Hon. Benjamin V.
Panga.
Forthwith, the Province of Camarines Sur filed a motion for the issuance of writ of possession. The San Joaquins failed to
appear at the hearing of the motion.
The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered for their property. In
an order dated December 6, 1989, the trial court denied the motion to dismiss and authorized the Province of Camarines
Sur to take possession of the property upon the deposit with the Clerk of Court of the amount of P5,714.00, the amount
provisionally fixed by the trial court to answer for damages that private respondents may suffer in the event that the
expropriation cases do not prosper. The trial court issued a writ of possession in an order dated January18, 1990.
The San Joaquins filed a motion for relief from the order, authorizing the Province of Camarines Sur to take possession of
their property and a motion to admit an amended motion to dismiss. Both motions were denied in the order dated
February 1990.
In their petition before the Court of Appeals, the San Joaquins asked: (a) that Resolution No. 129, Series of 1988 of the
Sangguniang Panlalawigan be declared null and void; (b) that the complaints for expropriation be dismissed; and (c) that
the order dated December 6, 1989 (i) denying the motion to dismiss and (ii) allowing the Province of Camarines Sur to
take possession of the property subject of the expropriation and the order dated February 26, 1990, denying the motion to
admit the amended motion to dismiss, be set aside. They also asked that an order be issued to restrain the trial court from
enforcing the writ of possession, and thereafter to issue a writ of injunction.
In its answer to the petition, the Province of Camarines Sur claimed that it has the authority to initiate the expropriation
proceedings under Sections 4 and 7 of Local Government Code (B.P. Blg. 337) and that the expropriations are for a public
purpose.
Asked by the Court of Appeals to give his Comment to the petition, the Solicitor General stated that under Section 9 of the
Local Government Code (B.P. Blg. 337), there was no need for the approval by the Office of the President of the exercise
by the Sangguniang Panlalawigan of the right of eminent domain. However, the Solicitor General expressed the view that
the Province of Camarines Sur must first secure the approval of the Department of Agrarian Reform of the plan to
expropriate the lands of petitioners for use as a housing project.
The Court of Appeals set aside the order of the trial court, allowing the Province of Camarines Sur to take possession of
private respondents' lands and the order denying the admission of the amended motion to dismiss. It also ordered the trial
court to suspend the expropriation proceedings until after the Province of Camarines Sur shall have submitted the
requisite approval of the Department of Agrarian Reform to convert the classification of the property of the private
respondents from agricultural to non-agricultural land.
Hence this petition.
It must be noted that in the Court of Appeals, the San Joaquins asked for: (i) the dismissal of the complaints for
expropriation on the ground of the inadequacy of the compensation offered for the property and (ii) the nullification of
Resolution No. 129, Series of 1988 of the Sangguniang Panlalawigan of the Province of Camarines Sur.
The Court of Appeals did not rule on the validity of the questioned resolution; neither did it dismiss the complaints.
However, when the Court of Appeals ordered the suspension of the proceedings until the Province of Camarines Sur shall
have obtained the authority of the Department of Agrarian Reform to change the classification of the lands sought to be
expropriated from agricultural to non-agricultural use, it assumed that the resolution is valid and that the expropriation is
for a public purpose or public use.

Modernly, there has been a shift from the literal to a broader interpretation of "public purpose" or "public use" for which the
power of eminent domain may be exercised. The old concept was that the condemned property must actually be used by
the general public (e.g. roads, bridges, public plazas, etc.) before the taking thereof could satisfy the constitutional
requirement of "public use". Under the new concept, "public use" means public advantage, convenience or benefit, which
tends to contribute to the general welfare and the prosperity of the whole community, like a resort complex for tourists or
housing project (Heirs of Juancho Ardano v. Reyes, 125 SCRA 220 [1983]; Sumulong v. Guerrero, 154 SC.RA 461
[1987]).
The expropriation of the property authorized by the questioned resolution is for a public purpose. The establishment of a
pilot development center would inure to the direct benefit and advantage of the people of the Province of Camarines Sur.
Once operational, the center would make available to the community invaluable information and technology on
agriculture, fishery and the cottage industry. Ultimately, the livelihood of the farmers, fishermen and craftsmen would be
enhanced. The housing project also satisfies the public purpose requirement of the Constitution. As held in Sumulong v.
Guerrero, 154 SCRA 461, "Housing is a basic human need. Shortage in housing is a matter of state concern since it
directly and significantly affects public health, safety, the environment and in sum the general welfare."
It is the submission of the Province of Camarines Sur that its exercise of the power of eminent domain cannot be
restricted by the provisions of the Comprehensive Agrarian Reform Law (R.A. No. 6657), particularly Section 65 thereof,
which requires the approval of the Department of Agrarian Reform before a parcel of land can be reclassified from an
agricultural to a non-agricultural land.
The Court of Appeals, following the recommendation of the Solicitor General, held that the Province of Camarines Sur
must comply with the provision of Section 65 of the Comprehensive Agrarian Reform Law and must first secure the
approval of the Department of Agrarian Reform of the plan to expropriate the lands of the San Joaquins.
In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners raised the issue of whether the Philippine Tourism
Authority can expropriate lands covered by the "Operation Land Transfer" for use of a tourist resort complex. There was a
finding that of the 282 hectares sought to be expropriated, only an area of 8,970 square meters or less than one hectare
was affected by the land reform program and covered by emancipation patents issued by the Ministry of Agrarian Reform.
While the Court said that there was "no need under the facts of this petition to rule on whether the public purpose is
superior or inferior to another purpose or engage in a balancing of competing public interest," it upheld the expropriation
after noting that petitioners had failed to overcome the showing that the taking of 8,970 square meters formed part of the
resort complex. A fair and reasonable reading of the decision is that this Court viewed the power of expropriation as
superior to the power to distribute lands under the land reform program.
The Solicitor General denigrated the power to expropriate by the Province of Camarines Sur by stressing the fact that
local government units exercise such power only by delegation. (Comment, pp. 14-15; Rollo, pp. 128-129)
It is true that local government units have no inherent power of eminent domain and can exercise it only when expressly
authorized by the legislature (City of Cincinnati v. Vester, 28l US 439, 74 L.ed. 950, 50 SCt. 360). It is also true that in
delegating the power to expropriate, the legislature may retain certain control or impose certain restraints on the exercise
thereof by the local governments (Joslin Mfg. Co. v. Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While such
delegated power may be a limited authority, it is complete within its limits. Moreover, the limitations on the exercise of the
delegated power must be clearly expressed, either in the law conferring the power or in other legislations.
Resolution No. 129, Series of 1988, was promulgated pursuant to Section 9 of B.P. Blg. 337, the Local Government Code,
which provides:
A local government unit may, through its head and acting pursuant to a resolution of its sanggunian
exercise the right of eminent domain and institute condemnation proceedings for public use or purpose.
Section 9 of B.P. Blg. 337 does not intimate in the least that local government, units must first secure the approval of the
Department of Land Reform for the conversion of lands from agricultural to non-agricultural use, before they can institute
the necessary expropriation proceedings. Likewise, there is no provision in the Comprehensive Agrarian Reform Law

which expressly subjects the expropriation of agricultural lands by local government units to the control of the Department
of Agrarian Reform. The closest provision of law that the Court of Appeals could cite to justify the intervention of the
Department of Agrarian Reform in expropriation matters is Section 65 of the Comprehensive Agrarian Reform Law, which
reads:
Sec. 65. Conversion of Lands. After the lapse of five (5) years from its award, when the land ceases to
be economically feasible and sound for, agricultural purposes, or the locality has become urbanized and
the land will have a greater economic value for residential, commercial or industrial purposes, the DAR,
upon application of the beneficiary or the landowner, with due notice to the affected parties, and subject to
existing laws, may authorize the reclassification or conversion of the land and its disposition: Provided,
That the beneficiary shall have fully paid his obligation.
The opening, adverbial phrase of the provision sends signals that it applies to lands previously placed under the agrarian
reform program as it speaks of "the lapse of five (5) years from its award."
The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No. 129-A, Series of
1987, cannot be the source of the authority of the Department of Agrarian Reform to determine the suitability of a parcel of
agricultural land for the purpose to which it would be devoted by the expropriating authority. While those rules vest on the
Department of Agrarian Reform the exclusive authority to approve or disapprove conversions of agricultural lands for
residential, commercial or industrial uses, such authority is limited to the applications for reclassification submitted by the
land owners or tenant beneficiaries.
Statutes conferring the power of eminent domain to political subdivisions cannot be broadened or constricted by
implication (Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d. 241).
To sustain the Court of Appeals would mean that the local government units can no longer expropriate agricultural lands
needed for the construction of roads, bridges, schools, hospitals, etc, without first applying for conversion of the use of the
lands with the Department of Agrarian Reform, because all of these projects would naturally involve a change in the land
use. In effect, it would then be the Department of Agrarian Reform to scrutinize whether the expropriation is for a public
purpose or public use.
Ordinarily, it is the legislative branch of the local government unit that shall determine whether the use of the property
sought to be expropriated shall be public, the same being an expression of legislative policy. The courts defer to such
legislative determination and will intervene only when a particular undertaking has no real or substantial relation to the
public use (United States Ex Rel Tennessee Valley Authority v. Welch, 327 US 546, 90 L. ed. 843, 66 S Ct 715; State ex
rel Twin City Bldg. and Invest. Co. v. Houghton, 144 Minn. 1, 174 NW 885, 8 ALR 585).
There is also an ancient rule that restrictive statutes, no matter how broad their terms are, do not embrace the sovereign
unless the sovereign is specially mentioned as subject thereto (Alliance of Government Workers v. Minister of Labor and
Employment, 124 SCRA 1 [1983]). The Republic of the Philippines, as sovereign, or its political subdivisions, as holders of
delegated sovereign powers, cannot be bound by provisions of law couched in general term.
The fears of private respondents that they will be paid on the basis of the valuation declared in the tax declarations of their
property, are unfounded. This Court has declared as unconstitutional the Presidential Decrees fixing the just
compensation in expropriation cases to be the value given to the condemned property either by the owners or the
assessor, whichever was lower ([Export Processing Zone Authority v. Dulay, 149 SCRA 305 [1987]). As held
in Municipality of Talisay v. Ramirez, 183 SCRA 528 [1990], the rules for determining just compensation are those laid
down in Rule 67 of the Rules of Court, which allow private respondents to submit evidence on what they consider shall be
the just compensation for their property.
WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals is set aside insofar as it (a)
nullifies the trial court's order allowing the Province of Camarines Sur to take possession of private respondents' property;
(b) orders the trial court to suspend the expropriation proceedings; and (c) requires the Province of Camarines Sur to

obtain the approval of the Department of Agrarian Reform to convert or reclassify private respondents' property from
agricultural to non-agricultural use.
The decision of the Court of Appeals is AFFIRMED insofar as it sets aside the order of the trial court, denying the
amended motion to dismiss of the private respondents.
SO ORDERED.
Cruz, Grio-Aquino and Bellosillo, JJ., concur.
EN BANC

Roxas & Company, Inc. v. DAMBA-NFSW, G.R. No. 149548. December 4, 2009
x----------------------------------------------------------------------------------------x

DECISION
CARPIO MORALES, J.

The main subject of the seven consolidated petitions is the application of petitioner Roxas & Co., Inc. (Roxas &
Co.) for conversion from agricultural to non-agricultural use of its three haciendas located in Nasugbu, Batangas
containing a total area of almost 3,000 hectares. The facts are not new, the Court having earlier resolved intimatelyrelated issues dealing with these haciendas. Thus, in the 1999 case of Roxas & Co., Inc. v. Court of Appeals,[1] the Court
presented the facts as follows:
. . . Roxas & Co. is a domestic corporation and is the registered owner of three haciendas,
namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu,
Batangas. Hacienda Palico is 1,024 hectares in area and is registered under Transfer Certificate of
Title (TCT) No. 985. This land is covered by Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and
0354. Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924 and covered by Tax
Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571 hectares in area and is
registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665.
xxxx
On July 27, 1987, the Congress of the Philippines formally convened and took over legislative
power from the President. This Congress passed Republic Act No. 6657, the Comprehensive Agrarian
Reform Law (CARL) of 1988.The Act was signed by the President on June 10, 1988 and took effect
on June 15, 1988.
Before the laws effectivity, on May 6, 1988, [Roxas & Co.] filed with respondent DAR
a voluntary offer to sell [VOS] Hacienda Caylaway pursuant to the provisions of E.O. No.
229. Haciendas Palico and Banilad were later placed under compulsory acquisition by DAR in
accordance with the CARL.
xxxx
Nevertheless, on August 6, 1992, [Roxas & Co.], through its President, Eduardo J. Roxas,
sent a letter to the Secretary of DAR withdrawing its VOS of Hacienda Caylaway. The Sangguniang
Bayan of Nasugbu, Batangasallegedly authorized the reclassification of Hacienda Caylaway from

agricultural to non-agricultural. As a result, petitioner informed respondent DAR that it

was applying for conversion of Hacienda Caylaway from agricultural to other uses.
x x x x[2] (emphasis and underscoring supplied)
The petitions in G.R. Nos. 167540 and 167543 nub on the interpretation of Presidential Proclamation (PP)
1520 which was issued on November 28, 1975 by then President Ferdinand Marcos. The PP reads:

DECLARING THE MUNICIPALITIES OF MARAGONDON

AND TERNATE IN CAVITE PROVINCE AND THE MUNICIPALITY OF NASUGBU IN BATANGAS AS
A TOURIST ZONE, AND FOR OTHER PURPOSES
WHEREAS, certain areas in the sector comprising the Municipalities of Maragondon
and Ternate in Cavite Province and Nasugbu in Batangas have potential tourism value after
being developed into resort complexes for the foreign and domestic market; and
WHEREAS, it is necessary to conduct the necessary studies and to segregate specific
geographic areas for concentrated efforts of both the government and private sectors in developing
their tourism potential;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of
the powers vested in me by the Constitution, do hereby declare the area comprising the Municipalities
of Maragondon and Ternate in Cavite Province and Nasugbu in Batangas Province as a tourist zone
under the administration and control of the Philippine Tourism Authority (PTA) pursuant to
Section 5 (D) of P.D. 564.

The PTA shall identify well-defined geographic areas within the zone with potential
tourism value, wherein optimum use of natural assets and attractions, as well as existing facilities
and concentration of efforts and limited resources of both government and private sector may be
affected and realized in order to generate foreign exchange as well as other tourist receipts.
Any duly established military reservation existing within the zone shall be excluded from this
proclamation.
All proclamation, decrees or executive orders inconsistent herewith are hereby revoked or
modified accordingly. (emphasis and underscoring supplied).
The incidents which spawned the filing of the petitions in G.R. Nos. 149548, 167505, 167845,
169163 and 179650 are stated in the dissenting opinion of Justice Minita Chico-Nazario, the original draft of which was
made the basis of the Courts deliberations.
Essentially, Roxas & Co. filed its application for conversion of its three haciendas from argricultural to nonagricultural on the assumption that the issuance of PP 1520 which declared Nasugbu, Batangas as a tourism zone,
reclassified them to non-agricultural uses. Its pending application notwithstanding, the Department of Agrarian Reform
(DAR) issued Certificates of Land Ownership Award (CLOAs) to the farmer-beneficiaries in the
three haciendas including CLOA No. 6654 which was issued on October 15, 1993 covering 513.983 hectares, the subject
of G.R. No. 167505.
The application for conversion of Roxas & Co. was the subject of the above-stated Roxas & Co., Inc. v. Court of
Appeals which the Court remanded to the DAR for the observance of proper acquisition proceedings. As reflected in the
above-quoted statement of facts in said case, during the pendency before the DAR of its application for
conversion following its remand to the DAR or on May 16, 2000, Roxas & Co. filed with the DAR an application for
exemption from the coverage of the Comprehensive Agrarian Reform Program (CARP) of 1988 on the basis of PP 1520
and of DAR Administrative Order (AO) No. 6, Series of 1994 [3] which states that all lands already classified as commercial,
industrial, or residential before the effectivity of CARP no longer need conversion clearance from the DAR.

It bears mentioning at this juncture that on April 18, 1982, the Sangguniang Bayan of Nasugbu enacted Municipal
Zoning Ordinance No. 4 (Nasugbu MZO No. 4) which was approved on May 4, 1983 by the Human Settlements
Regulation Commission, now the Housing and Land Use Regulatory Board (HLURB).
The records show that Sangguniang Bayan and Association of Barangay Captains of Nasugbu filed before this
Court petitions for intervention which were, however, denied by Resolution of June 5, 2006 for lack of standing.[4]
After the seven present petitions were consolidated and referred to the Court en banc,[5] oral arguments were
conducted on July 7, 2009.
The core issues are:
1.

Whether PP 1520 reclassified in 1975 all lands in the Maragondon-Ternate-Nasugbu tourism zone to nonagricultural use to exempt Roxas & Co.s three haciendas in Nasugbu from CARP coverage;

2.

Whether Nasugbu MSO No. 4, Series of 1982 exempted certain lots in Hacienda Palico from CARP
coverage; and

3.

Whether the partial and complete cancellations by the DAR of CLOA No. 6654 subject of G.R. No. 167505 is
valid.

The Court shall discuss the issues in seriatim.

I. PP 1520 DID NOT AUTOMATICALLY CONVERT THE AGRICULTURAL LANDS IN THE THREE MUNICIPALITIES
INCLUDING NASUGBU TO NON-AGRICULTURAL LANDS.

Roxas & Co. contends that PP 1520 declared the three municipalities as each constituting a tourism zone,
reclassified all lands therein to tourism and, therefore, converted their use to non-agricultural purposes.
To determine the chief intent of PP 1520, reference to the whereas clauses is in order. By and large, a reference to the
congressional deliberation records would provide guidance in dissecting the intent of legislation. But since PP 1520
emanated from the legislative powers of then President Marcos during martial rule, reference to the whereas
clauses cannot be dispensed with.[6]
The perambulatory clauses of PP 1520 identified only certain areas in the sector comprising the [three
Municipalities that] have potential tourism value and mandated the conduct of necessary studies and the segregation of
specific geographic areas to achieve its purpose. Which is why the PP directed the Philippine Tourism Authority (PTA) to
identify what those potential tourism areas are. If all the lands in those tourism zones were to be wholly converted to nonagricultural use, there would have been no need for the PP to direct the PTA to identify what those specific geographic
areas are.
The Court had in fact passed upon a similar matter before. Thus in DAR v. Franco,[7] it pronounced:
Thus, the DAR Regional Office VII, in coordination with the Philippine Tourism Authority,
has to determine precisely which areas are for tourism development and excluded from the
Operation Land Transfer and the Comprehensive Agrarian Reform Program. And suffice it to state
here that the Court has repeatedly ruled that lands already classified as non-agricultural before the
enactment of RA 6657 on 15 June 1988 do not need any conversionclearance.[8] (emphasis and
underscoring supplied).
While the above pronouncement in Franco is an obiter, it should not be ignored in the resolution of the present petitions
since it reflects a more rational and just interpretation of PP 1520. There is no prohibition in embracing the rationale of
an obiter dictum in settling controversies, or in considering related proclamations establishing tourism zones.

In the above-cited case of Roxas & Co. v. CA,[9] the Court made it clear that the power to determine whether Haciendas
Palico, Banilad and Caylaway are non-agricultural, hence, exempt from the coverage of the [Comprehensive Agrarian
Reform Law] lies with the [Department of Agrarian Reform], not with this Court.[10] The DAR, an administrative body of
special competence, denied, by Order of October 22, 2001, the application for CARP exemption of Roxas & Co., it finding
that PP 1520 did not automatically reclassify all the lands in the affected municipalities from their original uses. It appears
that the PTA had not yet, at that time, identified the specific geographic areas for tourism development and had no
pending tourism development projects in the areas. Further, report from the Center for Land Use Policy Planning and
Implementation (CLUPPI) indicated that the areas were planted with sugar cane and other crops. [11]
Relatedly, the DAR, by Memorandum Circular No. 7, Series of 2004,[12] came up with clarificatory guidelines and therein
decreed that
A. x x x x.
B. Proclamations declaring general areas such as whole provinces, municipalities, barangays,
islands or peninsulas as tourist zones that merely:
(1) recognize certain still unidentified areas within the covered provinces, municipalities,
barangays, islands, or peninsulas to be with potential tourism value and charge the Philippine Tourism
Authority with the task to identify/delineate specific geographic areas within the zone with potential
tourism value and to coordinate said areas development; or
(2) recognize the potential value of identified spots located within the general area declared as
tourist zone (i.e. x x x x) and direct the Philippine Tourism Authority to coordinate said areas
development;
could not be regarded as effecting an automatic reclassification of the entirety of the land area
declared as tourist zone. This is so because reclassification of lands denotes their allocation
into some specific use and providing for the manner of their utilization and disposition (Sec. 20,
Local Government Code) or the act of specifying how agricultural lands shall be utilized for nonagricultural uses such as residential, industrial, or commercial, as embodied in the land use
plan. (Joint HLURB, DAR, DA, DILG Memo. Circular Prescribing Guidelines for MC 54, S. 1995, Sec.2)

A proclamation that merely recognizes the potential tourism value of certain areas within the
general area declared as tourist zone clearly does not allocate, reserve, or intend the entirety of
the land area of the zone for non-agricultural purposes. Neither does said proclamation direct
that otherwise CARPable lands within the zone shall already be used for purposes other than
agricultural.
Moreover, to view these kinds of proclamation as a reclassification for non-agricultural purposes of
entire provinces, municipalities, barangays, islands, or peninsulas would be unreasonable as it amounts
to an automatic and sweeping exemption from CARP in the name of tourism development. The same
would also undermine the land use reclassification powers vested in local government units in
conjunction with pertinent agencies of government.
C. There being no reclassification, it is clear that said proclamations/issuances,
assuming [these] took effect before June 15, 1988, could not supply a basis for exemption of
the entirety of the lands embraced therein from CARP coverage x x x x.
D. x x x x. (underscoring in the original; emphasis and italics supplied)
The DARs reading into these general proclamations of tourism zones deserves utmost consideration, more
especially in the present petitions which involve vast tracts of agricultural land. To reiterate, PP 1520 merely recognized
the potential tourism value of certain areas within the general area declared as tourism zones . It did not reclassify the
areas to non-agricultural use.
Apart from PP 1520, there are similarly worded proclamations declaring the whole of Ilocos Norte
and Bataan Provinces, Camiguin, Puerto Prinsesa, Siquijor, Panglao Island, parts of Cebu City and Municipalities of
Argao and Dalaguete in Cebu Province as tourism zones.[13]

Indubitably, these proclamations, particularly those pertaining to the Provinces of Ilocos Norte and Bataan, did not
intend to reclassify all agricultural lands into non-agricultural lands in one fell swoop. The Court takes notice of how the
agrarian reform program wasand still isimplemented in these provinces since there are lands that do not have any tourism
potential and are more appropriate for agricultural utilization.
Relatedly, a reference to the Special Economic Zone Act of 1995[14] provides a parallel orientation on the
issue. Under said Act, several towns and cities encompassing the whole Philippines were readily identified as economic
zones.[15] To uphold Roxas & Co.s reading of PP 1520 would see a total reclassification of practically all the agricultural
lands in the country to non-agricultural use. Propitiously, the legislature had the foresight to include a bailout provision in
Section 31 of said Act for land conversion.[16] The same cannot be said of PP 1520, despite the existence of Presidential
Decree (PD) No. 27 or the Tenant Emancipation Decree,[17] which is the precursor of the CARP.
Interestingly, then President Marcos also issued on September 26, 1972 PD No. 2 which declared
the entire Philippines as land reform area.[18] Such declaration did not intend to reclassify all lands in the entire country to
agricultural lands. President Marcos, about a month later or on October 21, 1972, issued PD 27 which decreed that all
private agricultural lands primarily devoted to rice and corn were deemed awarded to their tenant-farmers.
Given these martial law-era decrees and considering the socio-political backdrop at the time PP 1520 was issued
in 1975, it is inconceivable that PP 1520, as well as other similarly worded proclamations which are completely silent on
the aspect of reclassification of the lands in those tourism zones, would nullify the gains already then achieved by PD 27.
Even so, Roxas & Co. turns to Natalia Realty v. DAR and NHA v. Allarde to support its position. These cases are
not even closely similar to the petitions in G.R. Nos. 167540 and 167543. The only time that these cases may find
application to said petitions is when the PTA actually identifies well-defined geographic areas within the zone with
potential tourism value.
In remotely tying these two immediately-cited cases that involve specific and defined townsite reservations for the
housing program of the National Housing Authority to the present petitions, Roxas & Co. cites Letter of Instructions No.
352 issued on December 22, 1975 which states that the survey and technical description of the tourism zones shall be
considered an integral part of PP 1520. There were, however, at the time no surveys and technical delineations yet of the
intended tourism areas.
On hindsight, Natalia and Allarde find application in the petitions in G.R. Nos. 179650 & 167505, which petitions
are anchored on the extenuating effects of Nasugbu MZO No. 4, but not in the petitions in G.R. Nos. 167540 & 167543
bearing on PP 1520, as will later be discussed.
Of significance also in the present petitions is the issuance on August 3, 2007 of Executive Order No. 647[19] by
President Arroyo which proclaimed the areas in the Nasugbu Tourism Development Plan as Special Tourism
Zone. Pursuant to said Executive Order, the PTA completed its validation of 21 out of 42 barangays as tourism priority
areas, hence, it is only after such completion that these identified lands may be subjected to reclassification proceedings.
It bears emphasis that a mere reclassification of an agricultural land does not automatically allow a landowner to
change its use since there is still that process of conversion before one is permitted to use it for other purposes.[20]
Tourism Act, and not to PP 1520, for possible exemption.
II. ROXAS & CO.S APPLICATION IN DAR ADMINISTRATIVE CASE NO. A-9999-142-97 FOR CARP EXEMPTION IN
HACIENDA PALICO SUBJECT OF G.R. NO. 179650 CANNOT BE GRANTED IN VIEW OF DISCREPANCIES
IN THE LOCATION AND IDENTITY OF THE SUBJECT PARCELS OF LAND.
Since PP 1520 did not automatically convert Haciendas Caylaway, Banilad and Palico into non-agricultural
estates, can Roxas & Co. invoke in the alternative Nasugbu MZO No. 4, which reclassified in 1982 thehaciendas to nonagricultural use to exclude six parcels of land in Hacienda Palico from CARP coverage?
By Roxas & Co.s contention, the affected six parcels of land which are the subject of DAR Administrative Case
No. A-9999-142-97 and nine parcels of land which are the subject of DAR Administrative Case No.A-9999-008-98
involved in G.R. No. 167505, all in Hacienda Palico, have been reclassified to non-agricultural uses via Nasugbu MZO
No. 4 which was approved by the forerunner of HLURB.
Roxas & Co.s contention fails.

To be sure, the Court had on several occasions decreed that a local government unit has the power to classify
and convert land from agricultural to non-agricultural prior to the effectivity of the CARL. [23] InAgrarian Reform
Beneficiaries Association v. Nicolas,[24] it reiterated that
. . . the facts obtaining in this case are similar to those in Natalia Realty. Both subject lands
form part of an area designated for non-agricultural purposes. Both were classified as non-agricultural
lands prior to June 15, 1988, the date of effectivity of CARL.
xxxx
In the case under review, the subject parcels of lands were reclassified within an urban zone
as per approved Official Comprehensive Zoning Map of the City of Davao. The reclassification was
embodied in City Ordinance No. 363, Series of 1982. As such, the subject parcels of land are
considered non-agricultural and may be utilized for residential, commercial, and industrial
purposes. The reclassification was later approved by the HLURB.[25](emphasis, italics and
underscoring supplied)
The DAR Secretary[26] denied the application for exemption of Roxas & Co., however, in this wise:
Initially, CLUPPI-2 based [its] evaluation on the lot nos. as appearing in CLOA No.
6654. However, for purposes of clarity and to ensure that the area applied for exemption is indeed
part of TCT No. T-60034, CLUPPI-2 sought to clarify with [Roxas & Co.] the origin of TCT No. T60034. In a letter dated May 28, 1998, [Roxas & Co.] explains that portions of TCT No. T-985, the
mother title, was subdivided into 125 lots pursuant to PD 27. A total of 947.8417 was retained by the
landowners and was subsequently registered under TCT No. 49946. [[Roxas & Co.] further explains
that TCT No. 49946 was further subdivided into several lots (Lot 125-A to Lot 125-P) with Lot No.
125-N registered under TCT No. 60034. [A] review of the titles, however, shows that the origin of
T-49946 is T-783 and not T-985. On the other hand, the origin of T-60034 is listed as 59946, and
not T-49946. The discrepancies were attributed by [Roxas & Co.] to typographical errors which
were acknowledged and initialled [sic] by the ROD. Per verification, the discrepancies . . .
cannot be ascertained.[27] (emphasis and underscoring supplied)
In denying Roxas & Co.s motion for reconsideration, the DAR Secretary held:
The landholdings covered by the aforesaid titles do not correspond to the
Certification dated February 11, 1998 of the [HLURB] , the Certification dated September 12,
1996 issued by the Municipal Planning and Development Coordinator, and the Certifications
dated July 31, 1997 and May 27, 1997 issued by the National Irrigation Authority. The
certifications were issued for Lot Nos. 21, 24, 28, 31, 32 and 34. Thus, it was not even possible to
issue exemption clearance over the lots covered by TCT Nos. 60019 to 60023.
Furthermore, we also note the discrepancies between the certifications issued by the
HLURB and the Municipal Planning Development Coordinator as to the area of the specific
lots.[28] (emphasis and underscoring supplied)
In affirming the DAR Secretarys denial of Roxas & Co.s application for exemption, the Court of Appeals, in CAG.R. SP No. 63146 subject of G.R. No. 179650, observed:
In the instant case, a perusal of the documents before us shows that there is no indication
that the said TCTs refer to the same properties applied for exemption by [Roxas & Co.] It is true that
the certifications refer, among others, to DAR Lot Nos. 21, 24, 28, 31, 32 and 34 But these
certifications contain nothing to show that these lots are the same as Lots 125-A, 125-B, 125C, 125-D and 125-E covered by TCT Nos. 60019, 60020, 60021, 60022 and 60023,
respetively. While [Roxas & Co.] claims that DAR Lot Nos. 21, 24 and 31 correspond to the
aforementioned TCTs submitted to the DAR no evidence was presented to substantiate such
allegation.
Moreover, [Roxas & Co.] failed to submit TCT 634 which it claims covers DAR Lot
Nos. 28, 32 and 24.(TSN, April 24, 2001, pp. 43-44)
xxxx

[Roxas & Co.] also claims that subject properties are located at Barangay Cogunan and
Lumbangan and that these properties are part of the zone classified as Industrial under Municipal
Ordinance No. 4, Series of 1982 of theMunicipality of Nasugbu, Batangas. .a scrutiny of the said
Ordinance shows that only Barangays Talangan and Lumbangan of the said municipality were
classified as Industrial ZonesBarangay Cogunan was not included. x x x x. In fact, the TCTs
submitted by [Roxas & Co.] show that the properties covered by said titles are all located at Barrio
Lumbangan.[29] (emphasis and underscoring supplied)
Its foregoing findings notwithstanding, the appellate court still allowed Roxas & Co. to adduce additional evidence to
support its application for exemption under Nasugbu MZO No. 4.
Meanwhile, Roxas & Co. appealed the appellate courts decision in CA-G.R. No. SP No. 63146 affirming the DAR
Secretarys denial of its application for CARP exemption in Hacienda Palico (now the subject of G.R. No. 149548).
When Roxas & Co. sought the re-opening of the proceedings in DAR Administrative Case No. A-9999-142-97
(subject of G.R. No. 179650), and offered additional evidence in support of its application for CARP exemption, the DAR
Secretary, this time, granted its application for the six lots including Lot No. 36 since the additional documents offered by
Roxas & Co. mentioned the said lot.
In granting the application, the DAR Secretary [30] examined anew the evidence submitted by Roxas & Co. which
consisted mainly of certifications from various local and national government agencies. [31]Petitioner in G.R. Nos. 167505,
167540, 169163 and 179650, Damayan Ng Mga Manggagawang Bukid Sa Asyenda Roxas-National Federation of Sugar
Workers (DAMBA-NFSW), the organization of the farmer-beneficiaries, moved to have the grant of the application
reconsidered but the same was denied by the DAR by Order of December 12, 2003, hence, it filed a petition
for certiorari before the Court of Appeals, docketed as CA-G.R. SP No. 82225, on grounds of forum-shopping and grave
abuse of discretion. The appellate court, by Decision of October 31, 2006, ruled that DAMBA-NFSW availed of the wrong
mode of appeal. At all events, it dismissed its petition as it upheld the DAR Secretarys ruling that Roxas & Co. did not
commit forum-shopping, hence, the petition of DAMBA-NGSW in G.R. No. 179650.
While ordinarily findings of facts of quasi-judicial agencies are generally accorded great weight and even finality
by the Court if supported by substantial evidence in recognition of their expertise on the specific matters under their
consideration,[32] this legal precept cannot be made to apply in G.R. No. 179650.
Even as the existence and validity of Nasugbu MZO No. 4 had already been established, there remains in dispute
the issue of whether the parcels of land involved in DAR Administrative Case No. A-9999-142-97 subject of G.R. No.
179650 are actually within the said zoning ordinance.
The Court finds that the DAR Secretary indeed committed grave abuse of discretion when he ignored the glaring
inconsistencies in the certifications submitted early on by Roxas & Co. in support of its applicationvis--vis the certifications
it later submitted when the DAR Secretary reopened DAR Administrative Case No. A-9999-142-97.
Notably, then DAR Secretary Horacio Morales, on one hand, observed that the landholdings covered by the
aforesaid titles do not correspond to the Certification dated February 11, 1998 of the [HLURB], the Certification dated
September 12, 1996 issued by the Municipal Planning and Development Coordinator, and the Certifications dated July 31,
1997 and May 27, 1997 issued by the National Irrigation Authority. On the other hand, then Secretary Hernani Braganza
relied on a different set of certifications which were issued later or on September 19, 1996.
In this regard, the Court finds in order the observation of DAMBA-NFSW that Roxas & Co. should have submitted
the comprehensive land use plan and pointed therein the exact locations of the properties to prove that indeed they are
within the area of coverage of Nasugbu MZO No. 4.
The petitions in G.R. Nos. 179650 & 149548 must be distinguished from Junio v. Garilao[33] wherein the
certifications submitted in support of the application for exemption of the therein subject lot were mainly considered on the
presumption of regularity in their issuance, there being no doubt on the location and identity of the subject lot. [34] In G.R.
No. 179650, there exist uncertainties on the location and identities of the properties being applied for exemption.
G.R. No. 179650 & G.R. No. 149548 must accordingly be denied for lack of merit.

III. ROXAS & CO.S APPLICATION FOR CARP EXEMPTION IN DAR ADMINISTRATIVE CASE NO. A-9999-00898 FOR THE NINE PARCELS OF LAND IN HACIENDA PALICO SUBJECT OF G.R. NO. 167505 SHOULD
BE GRANTED.
The Court, however, takes a different stance with respect to Roxas & Co.s application for CARP exemption in
DAR Administrative Case No. A-9999-008-98 over nine parcels of land identified as Lot Nos. 20, 13, 37, 19-B, 45, 47, 49,
48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares in Hacienda Palico, subject of G.R. No.
167505.
In its application, Roxas & Co. submitted the following documents:
1.

Letter-application dated 29 September 1997 signed by Elino SJ. Napigkit, for and on
behalf of Roxas & Company, Inc., seeking exemption from CARP coverage of subject
landholdings;

2.

Secretarys Certificate dated September 2002 executed by Mariano M. Ampil III,

Corporate Secretary of Roxas & Company, Inc., indicating a Board Resolution authorizing
him to represent the corporation in its application for exemption with the DAR. The same
Board Resolution revoked the authorization previously granted to the Sierra Management
& Resources Corporation;

3.

Photocopy of TCT No. 985 and its corresponding Tax Declaration No. 0401;

4.

Location and vicinity maps of subject landholdings;

5.

Certification dated 10 July 1997 issued by Reynaldo Garcia, Municipal Planning

and Development Coordinator (MPDC) and Zoning Administrator of Nasugbu,
Batangas, stating that the subject parcels of land are within the Urban Core Zone
as specified in Zone A. VII of Municipal Zoning Ordinance No. 4, Series of 1982,
approved by the Human Settlements Regulatory Commission (HSRC), now the Housing
and Land Use Regulatory Board (HLURB), under Resolution No. 123, Series of 1983,
dated 4 May 1983;

6.

Two (2) Certifications both dated 31 August 1998, issued by Alfredo Tan II,
Director, HLURB, Region IV, stating that the subject parcels of land appear to be
within the Residential cluster Area as specified in Zone VII of Municipal Zoning
Ordinance No. 4, Series of 1982, approved under HSRC Resolution No. 123, Series of
1983, dated 4 May 1983;[35]
x x x x (emphasis and underscoring supplied)

By Order of November 6, 2002, the DAR Secretary granted the application for exemption but issued the following
conditions:
1.

The farmer-occupants within subject parcels of land shall be maintained in their

peaceful possession and cultivation of their respective areas of tillage until a final
determination has been made on the amount of disturbance compensation due and
entitlement of such farmer-occupants thereto by the PARAD of Batangas;

2.

No development shall be undertaken within the subject parcels of land until the
appropriate disturbance compensation has been paid to the farmer-occupants who are
determined by the PARAD to be entitled thereto. Proof of payment of disturbance
compensation shall be submitted to this Office within ten (10) days from such payment;
and

3.

The cancellation of the CLOA issued to the farmer-beneficiaries shall be subject of a

separate proceeding before the PARAD of Batangas.[36]

DAMBA-NSFW moved for reconsideration but the DAR Secretary denied the same and explained further why
CLOA holders need not be informed of the pending application for exemption in this wise:

As regards the first ground raised by [DAMBA-NSFW], it should be remembered that

an application for CARP-exemption pursuant to DOJ Opinion No. 44, series of 1990, as
implemented by DAR Administrative Order No. 6, series of 1994, is non-adversarial or nonlitigious in nature. Hence, applicant is correct in saying that nowhere in the rules is it required
that occupants of a landholding should be notified of an initiated or pending exemption
application.
xxxx
With regard [to] the allegation that oppositors-movants are already CLOA holders of
subject propert[ies] and deserve to be notified, as owners, of the initiated questioned
exemption application, is of no moment. The Supreme Court in the case of Roxas [&] Co.,
Inc. v. Court of Appeals, 321 SCRA 106, held:
We stress that the failure of respondent DAR to comply with the requisites of due
process in the acquisition proceedings does not give this Court the power to nullify the
CLOAs already issued to the farmer beneficiaries. x x x x. Anyhow, the farmer[-]beneficiaries
hold the property in trust for the rightful owner of the land.
Since subject landholding has been validly determined to be CARP-exempt,
therefore, the previous issuance of the CLOA of oppositors-movants is erroneous. Hence,
similar to the situation of the above-quoted Supreme Court Decision, oppositors-movants only
hold the property in trust for the rightful owners of the land and are not the owners of subject
landholding who should be notified of the exemption application of applicant Roxas &
Company, Incorporated.
Finally, this Office finds no substantial basis to reverse the assailed Orders since
there is substantial compliance by the applicant with the requirements for the issuance of
exemption clearance under DAR AO 6 (1994). [37]
On DAMBA-NSFWs petition for certiorari, the Court of Appeals, noting that the petition was belatedly filed, sustained, by
Decision of December 20, 1994 and Resolution of May 7, 2007,[38] the DAR Secretarys finding that Roxas & Co. had
substantially complied with the prerequisites of DAR AO 6, Series of 1994. Hence, DAMBA-NFSWs petition in G.R. No.
167505.
The Court finds no reversible error in the Court of Appeals assailed issuances, the orders of the DAR Secretary
which it sustained being amply supported by evidence.

IV. THE CLOAs ISSUED BY THE DAR in ADMINISTRATIVE CASE NO. A-9999-008-98 SUBJECT OF G.R. No. 179650
TO THE FARMER-BENEFICIARIES INVOLVING THE NINE PARCELS OF LAND IN HACIENDA PALICO
MUST BE CANCELLED.
Turning now to the validity of the issuance of CLOAs in Hacienda Palico vis--vis the present dispositions: It bears
recalling that in DAR Administrative Case Nos. A-9999-008-98 and A-9999-142-97 (G.R. No. 179650), the Court ruled for
Roxas & Co.s grant of exemption in DAR Administrative Case No. A-9999-008-98 but denied the grant of exemption in
DAR Administrative Case No. A-9999-142-97 for reasons already discussed. It follows that the CLOAs issued to the
farmer-beneficiaries in DAR Administrative Case No. A-9999-008-98 must be cancelled.
But first, the Court digresses. The assertion of DAMBA-NSFW that the petitions for partial and complete
cancellations of the CLOAs subject of DARAB Case Nos. R-401-003-2001 to R-401-005-2001 and No. 401-239-2001
violated the earlier order in Roxas v. Court of Appeals does not lie. Nowhere did the Court therein pronounce that the
CLOAs issued cannot and should not be cancelled, what was involved therein being the legality of the acquisition
proceedings. The Court merely reiterated that it is the DAR which has primary jurisdiction to rule on the validity of
CLOAs. Thus it held:
. . . [t]he failure of respondent DAR to comply with the requisites of due process in the
acquisition proceedings does not give this Court the power to nullify the [CLOAs] already issued to the
farmer-beneficiaries. To assume the power is to short-circuit the administrative process, which has yet
to run its regular course. Respondent DAR must be given the chance to correct its procedural lapses

in the acquisition proceedings. x x x x. Anyhow, the farmer beneficiaries hold the property in trust for
the rightful owner of the land.[39]
On the procedural question raised by Roxas & Co. on the appellate courts relaxation of the rules by giving due
course to DAMBA-NFSWs appeal in CA G.R. SP No. 72198, the subject of G.R. No. 167845:
Indeed, the perfection of an appeal within the statutory period is jurisdictional and failure to do so renders the
assailed decision final and executory.[40] A relaxation of the rules may, however, for meritorious reasons, be allowed in the
interest of justice.[41] The Court finds that in giving due course to DAMBA-NSFWs appeal, the appellate court committed
no reversible error. Consider its ratiocination:
x x x x. To deny [DAMBA-NSFW]s appeal with the PARAD will not only affect their right over
the parcel of land subject of this petition with an area of 103.1436 hectares, but also that of the whole
area covered by CLOA No. 6654 since the PARAD rendered a Joint Resolution of the Motion for
Reconsideration filed by the [DAMBA-NSFW] with regard to [Roxas & Co.]s application for partial and
total cancellation of the CLOA in DARAB Cases No. R-401-003-2001 to R-401-005-2001 and No. 401239-2001. There is a pressing need for an extensive discussion of the issues as raised by both parties
as the matter of canceling CLOA No. 6654 is of utmost importance, involving as it does the probable
displacement of hundreds of farmer-beneficiaries and their families. x x x x (underscoring supplied)
Unlike courts of justice, the DARAB, as a quasi-judicial body, is not bound to strictly observe rules of procedure
and evidence. To strictly enforce rules on appeals in this case would render to naught the Courts dispositions on the other
issues in these consolidated petitions.
In the main, there is no logical recourse except to cancel the CLOAs issued for the nine parcels of land identified
as Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares
in Hacienda Palico (or those covered by DAR Administrative Case No. A-9999-008-98). As for the rest of the CLOAs, they
should be respected since Roxas & Co., as shown in the discussionin G.R. Nos. 167540, 167543 and 167505, failed to
prove that the other lots in Hacienda Palico and the other two haciendas, aside from the above-mentioned nine lots, are
CARP-exempt.
Conformably, Republic Act No. 3844 (R.A. No. 3844), as amended,[42] mandates that disturbance compensation
be given to tenants of parcels of land upon finding that (t)he landholding is declared by the department head upon
recommendation of the National Planning Commission to be suited for residential, commercial, industrial or some other
urban purposes.[43] In addition, DAR AO No. 6, Series of 1994 directs the payment of disturbance compensation before the
application for exemption may be completely granted.
Roxas & Co. is thus mandated to first satisfy the disturbance compensation of affected farmer-beneficiaries in the
areas covered by the nine parcels of lands in DAR AO No. A-9999-008-98 before the CLOAs covering them can be
cancelled. And it is enjoined to strictly follow the instructions of R.A. No. 3844.

Finally then, and in view of the Courts dispositions in G.R. Nos. 179650 and 167505, the May 27, 2001 Decision
of the Provincial Agrarian Reform Adjudicator (PARAD) [44] in DARAB Case No. 401-239-2001 ordering the total
cancellation of CLOA No. 6654, subject of G.R. No. 169163, is SET ASIDE except with respect to the CLOAs issued
for Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares
in Hacienda Palico (or those covered by DAR Administrative Case No. A-9999-008-98). It goes without saying that
the motion for reconsideration of DAMBA-NFSW is granted to thus vacate the Courts October 19, 2005 Resolution
dismissing DAMBA-NFSWs petition for review of the appellate courts Decision in CA-G.R. SP No. 75952; [45]
WHEREFORE,
1) In G.R. No. 167540, the Court REVERSES and SETS ASIDE the November 24, 2003 Decision [46] and March
18, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 72131 which declared that Presidential Proclamation No.
1520 reclassified the lands in the municipalities of Nasugbu in Batangas and Maragondon and Ternate in Cavite to nonagricultural use;
2) The Court accordingly GRANTS the Motion for Reconsideration of the Department of Agrarian Reform in G.R.
No. 167543 and REVERSES and SETS ASIDE its Resolution of July 20, 2005;
3) In G.R. No. 149548, the Court DENIES the petition for review of Roxas & Co. for lack of merit;
4) In G.R. No. 179650, the Court GRANTS the petition for review of DAMBA-NSFW and REVERSES and SETS
ASIDE the October 31, 2006 Decision and August 16, 2007 Resolution of the Court of Appeals in CA-G.R. SP No. 82225;
5) In G.R. No. 167505, the Court DENIES the petition for review of DAMBA-NSFW and AFFIRMS the December
20, 2004 Decision and March 7, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 82226;
6) In G.R. No. 167845, the Court DENIES Roxas & Co.s petition for review for
and AFFIRMS the September 10, 2004 Decision and April 14, 2005 Resolution of the Court of Appeals;

lack

of

merit

7) In G.R. No. 169163, the Court SETS ASIDE the Decisions of the Provincial Agrarian Reform Adjudicator in
DARAB Case No. 401-239-2001 ordering the cancellation of CLOA No. 6654 and DARAB Cases Nos. R-401-003-2001 to
No. R-401-005-2001 granting the partial cancellation of CLOA No. 6654. The CLOAs issued for Lots No. 21 No. 24, No.
26, No. 31, No. 32 and No. 34 or those covered by DAR Administrative Case No. A-9999-142-97) remain; and
8) Roxas & Co. is ORDERED to pay the disturbance compensation of affected farmer-beneficiaries in the areas
covered by the nine parcels of lands in DAR Administrative Case No. A-9999-008-98 before the CLOAs therein can be
cancelled, and is ENJOINED to strictly follow the mandate of R.A. No. 3844.
No pronouncement as to costs.
SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice

REPUBLIC ACT NO. 7881

AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO. 6657, ENTITLED AN ACT INSTITUTING A
COMPREHENSIVE AGRARIAN REFORM PROGRAM TO PROMOTE SOCIAL JUSTICE AND INDUSTRIALIZATION,
PROVIDING THE MECHANISM FOR ITS IMPLEMENTATION, AND FOR OTHER PURPOSES
SECTION 1. Section 3, Paragraph (b) of Republic Act No. 6657 is hereby amended to read as follows:

Sec. 3. Definitions. For the purpose of this Act, unless the context indicates otherwise:
(b) Agriculture, Agricultural Enterprise or Agricultural Activity means the cultivation of the soil, planting of
crops, growing of fruit trees, including the harvesting of such farm products, and other farm activities and
practices performed by a farmer in conjunction with such farming operations done by persons whether natural or
juridical.

Sec. 2. Section 10 of Republic Act No. 6657 is hereby amended to read as follows:
Sec. 10. Exemptions and Exclusions.

(a) Lands actually, directly and exclusively used for parks, wildlife, forest reserves, reforestation, fish
sanctuaries and breeding grounds, watersheds and mangroves shall be exempt from the coverage of this Act.

(b) Private lands actually, directly and exclusively used for prawn farms and fishponds shall be exempt from the
coverage of this Act: Provided, That said prawn farms and fishponds have not been distributed and Certificate of
Land Ownership Award (CLOA) issued to agrarian reform beneficiaries under the Comprehensive Agrarian
Reform Program.

In cases where the fishponds or prawn farms have been subjected to the Comprehensive Agrarian Reform Law,
by voluntary offer to sell, or commercial farms deferment or notices of compulsory acquisition, a simple and
absolute majority of the actual regular workers or tenants must consent to the exemption within one (1) year from
the effectivity of this Act. When the workers or tenants do not agree to this exemption, the fishponds or prawn
farms shall be distributed collectively to the worker-beneficiaries or tenants who shall form a cooperative or
association to manage the same.

In cases where the fishponds or prawn farms have not been subjected to the Comprehensive Agrarian Reform
Law, the consent of the farm workers shall no longer be necessary, however, the provision of Section 32-A hereof
on incentives shall apply.

(c) Lands actually, directly and exclusively used and found to be necessary for national defense, school sites
and campuses, including experimental farm stations operated by public or private schools for educational
purposes, seeds and seedling research and pilot production center, church sites and convents appurtenant
thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal
colonies and penal farms actually worked by the inmates, government and private research and quarantine
centers and all lands with eighteen percent (18%) slope and over, except those already developed, shall be
exempt from the coverage of this Act.

Sec. 3. Section 11 Paragraph 1 is hereby amended to read as follows:

Sec. 11. Commercial Farming. Commercial farms, which are private agricultural lands devoted to saltbeds,
fruit farms, orchards, vegetable and cut-flower farms, and cacao, coffee and rubber plantations, shall be subject
to immediate compulsory acquisition and distribution after ten (10) years from the effectivity of this Act.In the
case of new farms, the ten-year period shall begin from the first year of commercial production and operation, as
determined by the DAR.During the ten-year period, the Government shall initiate steps necessary to acquire
these lands, upon payment of just compensation for the land and the improvements thereon, preferably in favor
of organized cooperatives or associations which shall thereafter manage the said lands for the workersbeneficiaries.

Sec. 4. There shall be incorporated after Section 32 of Republic Act No. 6657 a new section to read as follows:
Sec. 32-A. Incentives. Individuals or entities owning or operating fishponds and prawn farms are hereby
mandated to execute within six (6) months from the effectivity of this Act an incentive plan with their regular
fishpond or prawn farmworkers or fishpond or prawn farm workers organization, if any, whereby seven point five
percent (7.5%) of their net profit before tax from the operation of the fishpond or prawn farms are distributed
within sixty (60) days at the end of the fiscal year as compensation to regular and other pond workers in such
ponds over and above the compensation they currently receive.

In order to safeguard the right of the regular fishpond or prawn farm workers under the incentive plan, the
books of the fishpond or prawn farm owners shall be subject to periodic audit or inspection by certified public
accountants chosen by the workers.

The foregoing provision shall not apply to agricultural lands subsequently converted to fishpond or prawn
farms provided the size of the land converted does not exceed the retention limit of the landowner.

Sec. 5. There shall be incorporated after Section 65 of Republic Act No. 6657 new sections to read as follows:
Sec. 65-A. Conversion into Fishpond and Prawn Farms. No conversion of public agricultural lands into
fishponds and prawn farms shall be made except in situations where the provincial government with the
concurrence of the Bureau of Fisheries and Aquatic Resources (BFAR) declares a coastal zone as suitable for
fishpond development.In such case, the Department of Environment and Natural Resources (DENR) shall allow
the lease and development of such areas: Provided, That the declaration shall not apply to environmentally
critical projects and areas as contained in title (A) sub-paragraph two, (B-5) and (C-1) and title (B), number eleven

(11) of Proclamation No. 2146, entitled Proclaiming Certain Areas and Types of Projects as Environmentally
Critical and Within the Scope of the Environmental Impact Statement (EIS) System established under Presidential
Decree No. 1586, to ensure the protection of river systems, aquifers and mangrove vegetations from pollution
and environmental degradation: Provided, further, That the approval shall be in accordance with a set of
guidelines to be drawn up and promulgated by the DAR and the BFAR: Provided, furthermore, That small-farmer
cooperatives and organizations shall be given preference in the award of the Fishpond Lease Agreement (FLAs).
No conversion of more than five (5) hectares of private lands to fishpond and prawn farms shall be allowed after
the passage of this Act, except when the use of the land is more economically feasible and sound for fishpond
and/or prawn farm, as certified by the Bureau of Fisheries and Aquatic Resources (BFAR), and a simple and
absolute majority of the regular farm workers or tenants agree to the conversion, the Department of Agrarian
Reform, may approve applications for change in the use of the land: Provided, finally, That no piecemeal
conversion to circumvent the provisions of this Act shall be allowed.In these cases where the change of use is
approved, the provisions of Section 32-A hereof on incentives shall apply.

Sec. 65-B. Inventory. Within one (1) year from the effectivity of this Act, the BFAR shall undertake and finish
an inventory of all government and private fishponds and prawn farms, and undertake a program to promote the
sustainable management and utilization of prawn farms and fishponds. No lease under Section 65-A hereof may
be granted until after the completion of the said inventory.

The sustainable management and utilization of prawn farms and fishponds shall be in accordance with the
effluent standards, pollution charges and other pollution control measures such as, but not limited to, the
quantity of fertilizers, pesticides and other chemicals used, that may be established by the Fertilizer and
Pesticide Authority (FPA), the Environmental Management Bureau (EMB), and other appropriate government
regulatory bodies, and existing regulations governing water utilization, primarily Presidential Decree No. 1067,
entitled A Decree Instituting A Water Code, Thereby Revising and Consolidating the Laws Governing the
Ownership, Appropriation, Utilization, Exploitation, Development, Conservation and Protection of Water
Resources.

Sec. 65-C. Protection of Mangrove Areas. In existing Fishpond Lease Agreements (FLAs) and those that will
be issued after the effectivity of this Act, a portion of the fishpond area fronting the sea, sufficient to protect the
environment, shall be established as a buffer zone and be planted to specified mangrove species to be
determined in consultation with the regional office of the DENR.The Secretary of Environment and Natural
Resources shall provide the penalties for any violation of this undertaking as well as the rules for its
implementation.

Sec. 65-D. Change of Crops. The change of crops to commercial crops or high value crops shall not be
considered as a conversion in the use or nature of the land. The change in crop should, however, not prejudice
the rights of tenants or leaseholders should there be any and the consent of a simple and absolute majority of
the affected farm workers, if any, shall first be obtained.

Sec. 6. There shall be incorporated after Section 73 of Republic Act No. 6657 a new section to read as follows:

Sec. 73-A. Exception. The provisions of Section 73, paragraph (E), to the contrary notwithstanding, the sale
and/or transfer of agricultural land in cases where such sale, transfer or conveyance is made necessary as a
result of a banks foreclosure of the mortgaged land is hereby permitted.

Sec. 7. Separability Clause. If for any reason, any section or provision of thi Act is declared null and void, no
other section provision or part thereof shall be affected and the same shall remain in full force and effect.

Sec. 8. Effectivity Clause. This Act shall take effect fifteen (15) days after its publication in at least two (2)
newspapers of general circulation.

LAND BANK OF THE PHILIPPINES, petitioner, vs. HON. ELI G. C. NATIVIDAD,

Presiding Judge of the Regional Trial Court, Branch 48, San Fernando,
Pampanga, and JOSE R. CAGUIAT represented by Attorneys-in-fact JOSE
T. BARTOLOME and VICTORIO MANGALINDAN, respondents.
DECISION
TINGA, J.:

This is a Petition for Review dated December 6, 1996 assailing the Decision of the
Regional Trial Court dated July 5, 1996 which ordered the Department of Agrarian
Reform (DAR) and petitioner Land Bank of the Philippines (Land Bank) to pay private
respondents the amount of P30.00 per square meter as just compensation for the States
acquisition of private respondents properties under the land reform program.
[1]

[2]

[3]

The facts follow.

On May 14, 1993, private respondents filed a petition before the trial court for the
determination of just compensation for their agricultural lands situated in Arayat,
Pampanga, which were acquired by the government pursuant to Presidential Decree No.
27 (PD 27). The petition named as respondents the DAR and Land Bank. With leave of
court, the petition was amended to implead as co-respondents the registered tenants of
the land.
After trial, the court rendered the assailed Decision the dispositive portion of which
reads:
WHEREFORE, judgment is hereby rendered in favor of petitioners and against respondents,
ordering respondents, particularly, respondents Department of Agrarian Reform and the Land Bank
of the Philippines, to pay these lands owned by petitioners and which are the subject of acquisition
by the State under its land reform program, the amount of THIRTY PESOS (P30.00) per square
meter, as the just compensation due for payment for same lands of petitioners located at San
Vicente (or Camba), Arayat, Pampanga.
Respondent Department of Agrarian Reform is also ordered to pay petitioners the amount of FIFTY
THOUSAND PESOS (P50,000.00) as Attorneys Fee, and to pay the cost of suit.

SO ORDERED.

[4]

DAR and Land Bank filed separate motions for reconsideration which were denied by
the trial court in its Order dated July 30, 1996 for being pro forma as the same did not
contain a notice of hearing. Thus, the prescriptive period for filing an appeal was not
tolled. Land Bank consequently failed to file a timely appeal and the
assailed Decision became final and executory.
[5]

Land Bank then filed a Petition for Relief from Order Dated 30 July 1996, citing
excusable negligence as its ground for relief. Attached to the petition for relief were two
affidavits of merit claiming that the failure to include in the motion for reconsideration a
notice of hearing was due to accident and/or mistake. The affidavit of Land Banks
counsel of record notably states that he simply scanned and signed the Motion for
Reconsideration for Agrarian Case No. 2005, Regional Trial Court of Pampanga, Branch
48, not knowing, or unmindful that it had no notice of hearing due to his heavy workload.
[6]

[7]

[8]

The trial court, in its Order of November 18, 1996, denied the petition for relief
because Land Bank lost a remedy in law due to its own negligence.
[9]

In the instant petition for review, Land Bank argues that the failure of its counsel to
include a notice of hearing due to pressure of work constitutes excusable negligence and
does not make the motion for reconsideration pro forma considering its allegedly
meritorious defenses. Hence, the denial of its petition for relief from judgment was
erroneous.
According to Land Bank, private respondents should have sought the reconsideration
of the DARs valuation of their properties. Private respondents thus failed to exhaust
administrative remedies when they filed a petition for the determination of just
compensation directly with the trial court. Land Bank also insists that the trial court erred in
declaring that PD 27 and Executive Order No. 228 (EO 228) are mere guidelines in the
determination of just compensation, and in relying on private respondents evidence of the
valuation of the properties at the time of possession in 1993 and not on Land Banks
evidence of the value thereof as of the time of acquisition in 1972.
Private respondents filed a Comment dated February 22, 1997, averring that Land
Banks failure to include a notice of hearing in its motion for reconsideration due merely to
counsels heavy workload, which resulted in the motion being declared pro forma, does not
constitute excusable negligence, especially in light of the admission of Land Banks
counsel that he has been a lawyer since 1973 and has mastered the intricate art and
technique of pleading.
[10]

Land Bank filed a Reply dated March 12, 1997 insisting that equity considerations
demand that it be heard on substantive issues raised in its motion for reconsideration.
[11]

The Court gave due course to the petition and required the parties to submit their
respective memoranda. Both parties complied.
[12]

[13]

The petition is unmeritorious.

At issue is whether counsels failure to include a notice of hearing constitutes
excusable negligence entitling Land Bank to a relief from judgment.

Section 1, Rule 38 of the 1997 Rules of Civil Procedure provides:

Sec. 1. Petition for relief from judgment, order, or other proceedings.When a judgment or final
order is entered, or any other proceeding is thereafter taken against a party in any court through
fraud, accident, mistake, or excusable negligence, he may file a petition in such court and in the
same case praying that the judgment, order or proceeding be set aside.
As can clearly be gleaned from the foregoing provision, the remedy of relief from
judgment can only be resorted to on grounds of fraud, accident, mistake or excusable
negligence. Negligence to be excusable must be one which ordinary diligence and
prudence could not have guarded against.
[14]

Measured against this standard, the reason profferred by Land Banks

counsel, i.e., that his heavy workload prevented him from ensuring that the motion for
reconsideration included a notice of hearing, was by no means excusable.
Indeed, counsels admission that he simply scanned and signed the Motion for
Reconsideration for Agrarian Case No. 2005, Regional Trial Court of Pampanga, Branch
48, not knowing, or unmindful that it had no notice of hearing speaks volumes of his arrant
negligence, and cannot in any manner be deemed to constitute excusable negligence.
The failure to attach a notice of hearing would have been less odious if committed by a
greenhorn but not by a lawyer who claims to have mastered the intricate art and technique
of pleading.
[15]

Indeed, a motion that does not contain the requisite notice of hearing is nothing but a
mere scrap of paper. The clerk of court does not even have the duty to accept it, much
less to bring it to the attention of the presiding judge. The trial court therefore correctly
considered the motion for reconsideration pro forma. Thus, it cannot be faulted for denying
Land Banks motion for reconsideration and petition for relief from judgment.
[16]

It should be emphasized at this point that procedural rules are designed to facilitate
the adjudication of cases. Courts and litigants alike are enjoined to abide strictly by the
rules. While in certain instances, we allow a relaxation in the application of the rules, we
never intend to forge a weapon for erring litigants to violate the rules with impunity. The
liberal interpretation and application of rules apply only in proper cases of demonstrable
merit and under justifiable causes and circumstances. While it is true that litigation is not a
game of technicalities, it is equally true that every case must be prosecuted in accordance
with the prescribed procedure to ensure an orderly and speedy administration of justice.
Party litigants and their counsel are well advised to abide by, rather than flaunt, procedural
rules for these rules illumine the path of the law and rationalize the pursuit of justice.
[17]

Aside from ruling on this procedural issue, the Court shall also resolve the other issues
presented by Land Bank, specifically as regards private respondents alleged failure to
exhaust administrative remedies and the question of just compensation.
Land Bank avers that private respondents should have sought the reconsideration of
the DARs valuation instead of filing a petition to fix just compensation with the trial court.

The records reveal that Land Banks contention is not entirely true. In fact, private
respondents did write a letter to the DAR Secretary objecting to the land valuation
summary submitted by the Municipal Agrarian Reform Office and requesting a conference
for the purpose of fixing just compensation. The letter, however, was left unanswered
prompting private respondents to file a petition directly with the trial court.
[18]

At any rate, in Philippine Veterans Bank v. Court of Appeals, we declared that there is
nothing contradictory between the DARs primary jurisdiction to determine and adjudicate
agrarian reform matters and exclusive original jurisdiction over all matters involving the
implementation of agrarian reform, which includes the determination of questions of just
compensation, and the original and exclusive jurisdiction of regional trial courts over all
petitions for the determination of just compensation. The first refers to administrative
proceedings, while the second refers to judicial proceedings.
[19]

In accordance with settled principles of administrative law, primary jurisdiction is

vested in the DAR to determine in a preliminary manner the just compensation for the
lands taken under the agrarian reform program, but such determination is subject to
challenge before the courts. The resolution of just compensation cases for the taking of
lands under agrarian reform is, after all, essentially a judicial function.
[20]

Thus, the trial did not err in taking cognizance of the case as the determination of just
compensation is a function addressed to the courts of justice.
Land Banks contention that the property was acquired for purposes of agrarian reform
on October 21, 1972, the time of the effectivity of PD 27, ergo just compensation should
be based on the value of the property as of that time and not at the time of possession in
1993, is likewise erroneous. In Office of the President, Malacaang, Manila v. Court of
Appeals, we ruled that the seizure of the landholding did not take place on the date of
effectivity of PD 27 but would take effect on the payment of just compensation.
[21]

Under the factual circumstances of this case, the agrarian reform process is still
incomplete as the just compensation to be paid private respondents has yet to be settled.
Considering the passage of Republic Act No. 6657 (RA 6657) before the completion of
this process, the just compensation should be determined and the process concluded
under the said law. Indeed, RA 6657 is the applicable law, with PD 27 and EO 228 having
only suppletory effect, conformably with our ruling in Paris v. Alfeche.
[22]

[23]

Section 17 of RA 6657 which is particularly relevant, providing as it does the

guideposts for the determination of just compensation, reads as follows:
Sec. 17. Determination of Just Compensation.In determining just compensation, the cost of
acquisition of the land, the current value of like properties, its nature, actual use and income, the
sworn valuation by the owner, the tax declarations, and the assessment made by government
assessors shall be considered. The social and economic benefits contributed by the farmers and the
farm-workers and by the Government to the property as well as the non-payment of taxes or loans
secured from any government financing institution on the said land shall be considered as
additional factors to determine its valuation.

It would certainly be inequitable to determine just compensation based on the

guideline provided by PD 27 and EO 228 considering the DARs failure to determine the
just compensation for a considerable length of time. That just compensation should be
determined in accordance with RA 6657, and not PD 27 or EO 228, is especially
imperative considering that just compensation should be the full and fair equivalent of the
property taken from its owner by the expropriator, the equivalent being real, substantial,
full and ample.
[24]

In this case, the trial court arrived at the just compensation due private respondents for
their property, taking into account its nature as irrigated land, location along the highway,
market value, assessors value and the volume and value of its produce. This Court is
convinced that the trial court correctly determined the amount of just compensation due
private respondents in accordance with, and guided by, RA 6657 and existing
jurisprudence.
WHEREFORE, the petition is DENIED. Costs against petitioner.
SO ORDERED.
G.R. No. 118712 October 6, 1995
LAND BANK OF THE PHILIPPINES, petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT
& DEVELOPMENT CORP., respondents.
G.R. No. 118745 October 6, 1995
DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT
& DEVELOPMENT CORP., ET AL., respondents.

FRANCISCO, R., J.:

It has been declared that the duty of the court to protect the weak and the underprivileged should not be carried out
to such an extent as deny justice to the landowner whenever truth and justice happen to be on his side. 1 As
eloquently stated by Justice Isagani Cruz:
. . . social justice or any justice for that matter is for the deserving, whether he be a millionaire
in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called
upon to tilt the balance in favor of the poor, to whom the Constitution fittingly extends its sympathy
and compassion. But never is it justified to prefer the poor simply because they are poor, or to reject
the rich simply because they are rich, for justice must always be served, for poor and rich alike,
according to the mandate of the law. 2
In this agrarian dispute, it is once more imperative that the aforestated principles be applied in its resolution.
Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R. No. 118745) and
Land Bank of the Philippines (G.R. No. 118712) following the adverse ruling by the Court of Appeals in CA-G.R. SP
No. 33465. However, upon motion filed by private respondents, the petitions were ordered consolidated. 3

Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which granted private
respondents' Petition for Certiorari and Mandamus and ruled as follows:
WHEREFORE, premises considered, the Petition for Certiorari and Mandamus is hereby
GRANTED:
a) DAR Administrative Order No. 9, Series of 1990 is declared null and void insofar
as it provides for the opening of trust accounts in lieu of deposits in cash or bonds;
b) Respondent Landbank is ordered to immediately deposit not merely "earmark",
"reserve" or "deposit in trust" with an accessible bank designated by respondent
DAR in the names of the following petitioners the following amounts in cash and in
government financial instruments within the parameters of Sec. 18 (1) of RA 6657:
P 1,455,207.31 Pedro L. Yap
P 135,482.12 Heirs of Emiliano Santiago
P 15,914,127.77 AMADCOR;
c) The DAR-designated bank is ordered to allow the petitioners to withdraw the
above-deposited amounts without prejudice to the final determination of just
compensation by the proper authorities; and
d) Respondent DAR is ordered to 1) immediately conduct summary administrative
proceedings to determine the just compensation for the lands of the petitioners giving
the petitioners 15 days from notice within which to submit evidence and to 2) decide
the cases within 30 days after they are submitted for decision. 4
Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995, 5 denying their motion for
reconsideration.
Private respondents are landowners whose landholdings were acquired by the DAR and subjected to transfer
schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL, Republic Act No. 6657).
Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and payment of
compensation for their land pursuant to the provisions of RA 6657, private respondents filed with this Court a
Petition for Certiorari and Mandamus with prayer for preliminary mandatory injunction. Private respondents
questioned the validity of DAR Administrative Order No. 6, Series of 1992 6 and DAR Administrative Order No.
9, Series of 1990, 7 and sought to compel the DAR to expedite the pending summary administrative proceedings
to finally determine the just compensation of their properties, and the Landbank to deposit in cash and bonds the
amounts respectively "earmarked", "reserved" and "deposited in trust accounts" for private respondents, and to
allow them to withdraw the same.
Through a Resolution of the Second Division dated February 9, 1994, this Court referred the petition to respondent
Court of Appeals for proper determination and disposition.
As found by respondent court , the following are undisputed:
Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of title (TCTs) of
petitioner Yap were totally cancelled by the Registrar of Deeds of Leyte and were transferred in the
names of farmer beneficiaries collectively, based on the request of the DAR together with a
certification of the Landbank that the sum of P735,337.77 and P719,869.54 have been earmarked
for Landowner Pedro L. Yap for the parcels of lands covered by TCT Nos. 6282 and 6283,
respectively, and issued in lieu thereof TC-563 and TC-562, respectively, in the names of listed
beneficiaries (ANNEXES "C" & "D") without notice to petitioner Yap and without complying with the

requirement of Section 16 (e) of RA 6657 to deposit the compensation in cash and Landbank bonds
in an accessible bank. (Rollo, p. 6).
The above allegations are not disputed by any of the respondents.
Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are the owners of
a parcel of land located at Laur, NUEVA ECIJA with an area of 18.5615 hectares covered by TCT
No. NT-60359 of the registry of Deeds of Nueva Ecija, registered in the name of the late Emiliano F.
Santiago; that in November and December 1990, without notice to the petitioners, the Landbank
required and the beneficiaries executed Actual tillers Deed of Undertaking (ANNEX "B") to pay
rentals to the LandBank for the use of their farmlots equivalent to at least 25% of the net harvest;
that on 24 October 1991 the DAR Regional Director issued an order directing the Landbank to pay
the landowner directly or through the establishment of a trust fund in the amount of P135,482.12,
that on 24 February 1992, the Landbank reserved in trust P135,482.12 in the name of Emiliano F.
Santiago. (ANNEX "E"; Rollo,
p. 7); that the beneficiaries stopped paying rentals to the landowners after they signed the Actual
Tiller's Deed of Undertaking committing themselves to pay rentals to the LandBank (Rollo, p. 133).
The above allegations are not disputed by the respondents except that respondent Landbank claims
1) that it was respondent DAR, not Landbank which required the execution of Actual Tillers Deed of
Undertaking (ATDU, for brevity); and 2) that respondent Landbank, although armed with the ATDU,
did not collect any amount as rental from the substituting beneficiaries (Rollo, p. 99).
Petitioner Agricultural Management and Development Corporation (AMADCOR, for brevity) alleges
with respect to its properties located in San Francisco, Quezon that the properties of
AMADCOR in San Francisco, Quezon consist of a parcel of land covered by TCT No. 34314 with an
area of 209.9215 hectares and another parcel covered by TCT No. 10832 with an area of 163.6189
hectares; that a summary administrative proceeding to determine compensation of the property
covered by TCT No. 34314 was conducted by the DARAB in Quezon City without notice to the
landowner; that a decision was rendered on 24 November 1992 (ANNEX "F") fixing the
compensation for the parcel of land covered by TCT No. 34314 with an area of 209.9215 hectares at
P2,768,326.34 and ordering the Landbank to pay or establish a trust account for said amount in the
name of AMADCOR; and that the trust account in the amount of P2,768,326.34 fixed in the decision
was established by adding P1,986,489.73 to the first trust account established on 19 December
1991 (ANNEX "G"). With respect to petitioner AMADCOR's property in Tabaco, Albay, it is alleged
that the property of AMADCOR in Tabaco, Albay is covered by TCT No. T-2466 of the Register of
Deeds of Albay with an area of 1,629.4578 hectares'; that emancipation patents were issued
covering an area of 701.8999 hectares which were registered on 15 February 1988 but no action
was taken thereafter by the DAR to fix the compensation for said land; that on 21 April 1993, a trust
account in the name of AMADCOR was established in the amount of P12,247,217.83', three notices
of acquisition having been previously rejected by AMADCOR. (Rollo, pp. 8-9)
The above allegations are not disputed by the respondents except that respondent Landbank claims
that petitioner failed to participate in the DARAB proceedings (land valuation case) despite due
notice to it (Rollo, p. 100). 8
Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with
grave abuse of discretion because it permits the opening of trust accounts by the Landbank, in lieu of depositing in
cash or bonds in an accessible bank designated by the DAR, the compensation for the land before it is taken and
the titles are cancelled as provided under Section 16(e) of RA 6657. 9 Private respondents also assail the fact that the
DAR and the Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation in their names as
landowners despite the clear mandate that before taking possession of the property, the compensation must be deposited
in cash or in bonds. 10
Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-making power
pursuant to Section 49 of RA 6657. 11 Moreover, the DAR maintained that the issuance of the "Certificate of Deposit" by
the Landbank was a substantial compliance with Section 16(e) of RA 6657 and the ruling in the case of Association of

Small Landowners in the Philippines, Inc., et al. vs. Hon. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 1989
(175 SCRA 343). 12

For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in consonance with
Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words "reserved/deposited" were also
used. 13
On October 20, 1994, the respondent court rendered the assailed decision in favor of private
respondents. 14Petitioners filed a motion for reconsideration but respondent court denied the same. 15
Hence, the instant petitions.
On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745 alleging that the
appeal has no merit and is merely intended to delay the finality of the appealed decision. 16 The Court, however,
denied the motion and instead required the respondents to file their comments. 17
Petitioners submit that respondent court erred in (1) declaring as null and void DAR Administrative Order No. 9,
Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in bonds, and (2)
in holding that private respondents are entitled as a matter of right to the immediate and provisional release of the
amounts deposited in trust pending the final resolution of the cases it has filed for just compensation.
Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section 16(e) of RA 6657
referred merely to the act of depositing and in no way excluded the opening of a trust account as a form of deposit.
Thus, in opting for the opening of a trust account as the acceptable form of deposit through Administrative Circular
No. 9, petitioner DAR did not commit any grave abuse of discretion since it merely exercised its power to
promulgate rules and regulations in implementing the declared policies of RA 6657.
The contention is untenable. Section 16(e) of RA 6657 provides as follows:
Sec. 16. Procedure for Acquisition of Private Lands
xxx xxx xxx
(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the DAR of
the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate
of Title (TCT) in the name of the Republic of the Philippines. . . . (emphasis supplied)
It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere does it appear
nor can it be inferred that the deposit can be made in any other form. If it were the intention to include a "trust
account" among the valid modes of deposit, that should have been made express, or at least, qualifying words
ought to have appeared from which it can be fairly deduced that a "trust account" is allowed. In sum, there is no
ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of the term "deposit".
The conclusive effect of administrative construction is not absolute. Action of an administrative agency may be
disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or lack of
jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a legislative
enactment. 18 In this regard, it must be stressed that the function of promulgating rules and regulations may be legitimately
exercised only for the purpose of carrying the provisions of the law into effect. The power of administrative agencies is
thus confined to implementing the law or putting it into effect. Corollary to this is that administrative regulations cannot
extend
the law and amend a legislative enactment, 19 for settled is the rule that administrative regulations must be in harmony with
the provisions of the law. And in case there is a discrepancy between the basic law and an implementing rule or
regulation, it is the former that prevails. 20

In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it issued
Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner
as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is very specific that
the deposit must be made only in "cash" or in "LBP bonds". In the same vein, petitioners cannot invoke LRA Circular
Nos. 29, 29-A and 54 because these implementing regulations cannot outweigh the clear provision of the law.
Respondent court therefore did not commit any error in striking down Administrative Circular No. 9 for being null and
void.
Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw the amounts
deposited in trust in their behalf pending the final resolution of the cases involving the final valuation of their
properties, petitioners assert the negative.
The contention is premised on the alleged distinction between the deposit of compensation under Section 16(e) of
RA 6657 and payment of final compensation as provided under Section 18 21 of the same law. According to petitioners,
the right of the landowner to withdraw the amount deposited in his behalf pertains only to the final valuation as agreed
upon by the landowner, the DAR and the LBP or that adjudged by the court. It has no reference to amount deposited in
the trust account pursuant to Section 16(e) in case of rejection by the landowner because the latter amount is only
provisional and intended merely to secure possession of the property pending final valuation. To further bolster the
contention petitioners cite the following pronouncements in the case of "Association of Small Landowners in the Phil. Inc.
vs. Secretary of Agrarian Reform". 22
The last major challenge to CARP is that the landowner is divested of his property even before
actual payment to him in full of just compensation, in contravention of a well-accepted principle of
eminent domain.
xxx xxx xxx
The CARP Law, for its part conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR of
the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with
the landowner. No outright change of ownership is contemplated either.
xxx xxx xxx
Hence the argument that the assailed measures violate due process by arbitrarily transferring title
before the land is fully paid for must also be rejected.
Notably, however, the aforecited case was used by respondent court in discarding petitioners' assertion as it found
that:
. . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led
the Supreme Court, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary of
Agrarian Reform (175 SCRA 343), to conclude that "payments of the just compensation is not
always required to be made fully in money" even as the Supreme Court admits in the same case
"that the traditional medium for the payment of just compensation is money and no other" the
Supreme Court in said case did not abandon the "recognized rule . . . that title to the property
expropriated shall pass from the owner to the expropriator only upon full payment of the just
compensation." 23(Emphasis supplied)
We agree with the observations of respondent court. The ruling in the "Association" case merely recognized the
extraordinary nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the
traditional mode of payment of compensation and recognized payment other than in cash. It did not, however,
dispense with the settled rule that there must be full payment of just compensation before the title to the
expropriated property is transferred.
The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and
determination of just compensation under Section 18 is unacceptable. To withhold the right of the landowners to
appropriate the amounts already deposited in their behalf as compensation for their properties simply because they

rejected the DAR's valuation, and notwithstanding that they have already been deprived of the possession and use
of such properties, is an oppressive exercise of eminent domain. The irresistible expropriation of private
respondents' properties was painful enough for them. But petitioner DAR rubbed it in all the more by withholding that
which rightfully belongs to private respondents in exchange for the taking, under an authority (the "Association"
case) that is, however, misplaced. This is misery twice bestowed on private respondents, which the Court must
rectify.
Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and final
compensation under Section 18 for purposes of exercising the landowners' right to appropriate the same. The
immediate effect in both situations is the same, the landowner is deprived of the use and possession of his property
for which he should be fairly and immediately compensated. Fittingly, we reiterate the cardinal rule that:
. . . within the context of the State's inherent power of eminent domain, just compensation means not
only the correct determination of the amount to be paid to the owner of the land but also the
payment of the land within a reasonable time from its taking. Without prompt
payment, compensation cannot be considered "just" for the property owner is made to suffer the
consequence of being immediately deprived of his land while being made to wait for a decade or
more before actually receiving the amount necessary to cope with his loss. 24 (Emphasis supplied)
The promulgation of the "Association" decision endeavored to remove all legal obstacles in the implementation of
the Comprehensive Agrarian Reform Program and clear the way for the true freedom of the farmer. 25 But despite
this, cases involving its implementation continue to multiply and clog the courts' dockets. Nevertheless, we are still
optimistic that the goal of totally emancipating the farmers from their bondage will be attained in due time. It must be
stressed, however, that in the pursuit of this objective, vigilance over the rights of the landowners is equally important
because social justice cannot be invoked to trample on the rights of property owners, who under our Constitution and laws
are also entitled to protection. 26
WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of merit and the appealed
decision is AFFIRMED in toto.
SO ORDERED.
Regalado, Puno and Mendoza, JJ., concur

JOSEFINA S. LUBRICA, in her G.R. No. 170220

capacity as Assignee of FEDERICO
C. SUNTAY, NENITA SUNTAY
TAEDO and EMILIO A.M.
SUNTAY III,
Petitioners, Present:
Panganiban, C.J. (Chairperson),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ.

LAND BANK OF THE PHILIPPINES,

Respondent. Promulgated:

November 20, 2006

x ---------------------------------------------------------------------------------------- x

DECISION
YNARES-SANTIAGO, J.:

This Petition for Review on Certiorari under Rule 45 of the Rules of Court
assails the October 27, 2005 Amended Decision [1] of the Court of Appeals in
CA-G.R. SP No. 77530, which vacated its May 26, 2004 Decision affirming (a)
the Order of the Regional Trial Court of San Jose, Occidental Mindoro, Branch
46, acting as Special Agrarian Court, in Agrarian Case Nos. R-1339 and R1340, dated March 31, 2003 directing respondent Land Bank of the
Philippines (LBP) to deposit the provisional compensation as determined by
the Provincial Agrarian Reform Adjudicator (PARAD); (b) the May 26, 2003
Resolution denying LBPs motion for reconsideration; and (c) the May 27,
2003 Order requiring Teresita V. Tengco, LBPs Land Compensation
Department Manager, to comply with the March 31, 2003 Order.
The facts of the case are as follows:

Petitioner Josefina S. Lubrica is the assignee [2] of Federico C. Suntay over

certain parcels of agricultural land located at Sta. Lucia, Sablayan,
Occidental Mindoro, with an area of 3,682.0285 hectares covered by
Transfer Certificate of Title (TCT) No. T-31 (T-1326) [3] of the Registry of Deeds
of Occidental Mindoro. In 1972, a portion of the said property with an area of
311.7682 hectares, was placed under the land reform program pursuant to
Presidential Decree No. 27 (1972)[4] and Executive Order No. 228 (1987).

The land was thereafter subdivided and distributed to farmer

beneficiaries. The Department of Agrarian Reform (DAR) and the LBP fixed
the value of the land at P5,056,833.54 which amount was deposited in cash
and bonds in favor of Lubrica.
[5]

On the other hand, petitioners Nenita Suntay-Taedo and Emilio A.M. Suntay
III inherited from Federico Suntay a parcel of agricultural land located at
Balansay, Mamburao, Occidental Mindoro covered by TCT No. T-128 [6] of the
Register of Deeds of Occidental Mindoro, consisting of two lots, namely, Lot
1 with an area of 45.0760 hectares and Lot 2 containing an area of
165.1571 hectares or a total of 210.2331 hectares. Lot 2 was placed under
the coverage of P.D. No. 27 but only 128.7161 hectares was considered by
LBP and valued the same at P1,512,575.05.
Petitioners rejected the valuation of their properties, hence the Office of the
Provincial Agrarian Reform Adjudicator (PARAD) conducted summary
administrative
proceedings
for
determination
of
just
compensation. On January 29, 2003, the PARAD fixed the preliminary just
compensation at P51,800,286.43 for the 311.7682 hectares (TCT No. T-31)
and P21,608,215.28 for the 128.7161 hectares (TCT No. T-128).[7]

Not satisfied with the valuation, LBP filed on February 17, 2003, two
separate petitions[8] for judicial determination of just compensation before
the Regional Trial Court of San Jose, Occidental Mindoro, acting as a Special
Agrarian Court, docketed as Agrarian Case No. R-1339 for TCT No. T-31 and
Agrarian Case No. R-1340 for TCT No. T-128, and raffled to Branch 46
thereof.

Petitioners filed separate Motions to Deposit the Preliminary Valuation Under

Section 16(e) of Republic Act (R.A.) No. 6657 (1988) [9] and Ad Cautelam
Answer praying among others that LBP deposit the preliminary
compensation determined by the PARAD.

On March 31, 2003, the trial court issued an Order [10] granting petitioners
motion, the dispositive portion of which reads:

WHEREFORE, Ms. Teresita V. Tengco, of the Land Compensation

Department I (LCD I), Land Bank of the Philippines, is hereby
ordered pursuant to Section 16 (e) of RA 6657 in relation to Section
2, Administrative Order No. 8, Series of 1991, to deposit the
provisional compensation as determined by the PARAD in cash and
bonds, as follows:

1. In Agrarian Case No. R-1339, the amount of P 51,800,286.43,

minus the amount received by the Landowner;
2. In Agrarian Case No. R-1340, the amount of P 21,608,215.28, less
the amount of P 1,512,575.16, the amount already deposited.

Such deposit must be made with the Land Bank of

the Philippines, Manila within five (5) days from receipt of a copy of
this order and to notify this court of her compliance within such
period.

Let this order be served by the Sheriff of this Court at the expense of
the movants.

SO ORDERED.[11]

LBPs
motion
for
reconsideration
was
denied
in
a
[12]
Resolution
dated May 26, 2003. The following day, May 27, 2003, the trial
court issued an Order[13] directing Ms. Teresita V. Tengco, LBPs Land
Compensation Department Manager, to deposit the amounts.

Thus, on June 17, 2003, LBP filed with the Court of Appeals a Petition for
Certiorari and Prohibition under Rule 65 of the Rules of Court with
application for the issuance of a Temporary Restraining Order and Writ of
Preliminary Injunction docketed as CA-G.R. SP No. 77530. [14]

On June 27, 2003, the appellate court issued a 60-day temporary restraining
order[15] and on October 6, 2003, a writ of preliminary injunction. [16]

On May 26, 2004, the Court of Appeals rendered a Decision [17] in favor of the
petitioners, the dispositive portion of which reads:

WHEREFORE, premises considered, there being no grave abuse of

discretion, the instant Petition for Certiorari and Prohibition is
DENIED. Accordingly, the Order dated March 31, 2003, Resolution
dated May 26, 2003, and Order dated May 27, 2003 are hereby
AFFIRMED. The preliminary injunction We previously issued is hereby
LIFTED and DISSOLVED.

SO ORDERED.[18]

The Court of Appeals held that the trial court correctly ordered LBP to
deposit the amounts provisionally determined by the PARAD as there is no
law which prohibits LBP to make a deposit pending the fixing of the final
amount of just compensation. It also noted that there is no reason for LBP to
further delay the deposit considering that the DAR already took possession
of the properties and distributed the same to farmer-beneficiaries as early
as 1972.

LBP moved for reconsideration which was granted. On October 27, 2005,
the appellate court rendered the assailed Amended Decision, [19] the
dispositive portion of which reads:

Wherefore, in view of the prescription of a different formula in the

case of Gabatin which We hold as cogent and compelling
justification necessitating Us to effect the reversal of Our judgment
herein sought to be reconsidered, the instant Motion for

Reconsideration is GRANTED, and Our May 26, 2004 Decision is

hereby VACATED and ABANDONED with the end in view of giving
way to and acting in harmony and in congruence with the tenor of
the ruling in the case of Gabatin. Accordingly, the assailed rulings of
the Special Agrarian Court is (sic) commanded to compute and fix
the just compensation for the expropriated agricultural lands strictly
in accordance with the mode of computation prescribed (sic) Our
May 26, 2004 judgment in the case of Gabatin.

SO ORDERED.[20]

In the Amended Decision, the Court of Appeals held that the immediate
deposit of the preliminary value of the expropriated properties is improper
because it was erroneously computed. Citing Gabatin v. Land Bank of the
Philippines,[21] it held that the formula to compute the just compensation
should be: Land Value = 2.5 x Average Gross Production x Government
Support Price. Specifically, it held that the value of the government support
price for the corresponding agricultural produce (rice and corn) should be
computed at the time of the legal taking of the subject agricultural land,
that is, on October 21, 1972 when landowners were effectively deprived of
ownership over their properties by virtue of P.D. No. 27. According to the
Court of Appeals, the PARAD incorrectly used the amounts of P500 and P300
which are the prevailing government support price for palay and corn,
respectively, at the time of payment, instead of P35 and P31, the prevailing
government support price at the time of the taking in 1972.

Hence, this petition raising the following issues:

A. THE COURT A QUO HAS DECIDED THE CASE IN A WAY NOT IN

ACCORD WITH THE LATEST DECISION OF THE SUPREME COURT IN
THE CASE OF LAND BANK OF THE PHILIPPINES VS. HON. ELI G.C.
NATIVIDAD, ET AL., G.R. NO. 127198, PROM. MAY 16, 2005; and[22]

B. THE COURT A QUO HAS, WITH GRAVE GRAVE ABUSE OF

DISCRETION, SO FAR DEPARTED FROM THE ACCEPTED AND USUAL
COURSE OF JUDICIAL PROCEEDINGS, DECIDING ISSUES THAT HAVE
NOT BEEN RAISED, AS TO CALL FOR AN EXERCISE OF THE POWER OF
SUPERVISION.[23]

Petitioners insist that the determination of just compensation should be

based on the value of the expropriated properties at the time of
payment. Respondent LBP, on the other hand, claims that the value of the
realties should be computed as of October 21, 1972 when P.D. No. 27 took
effect.
The petition is impressed with merit.

In the case of Land Bank of the Philippines v. Natividad,[24] the Court ruled
thus:

Land Banks contention that the property was acquired for

purposes of agrarian reform on October 21, 1972, the time of the
effectivity of PD 27, ergo just compensation should be based on the
value of the property as of that time and not at the time of
possession in 1993, is likewise erroneous. In Office of the President,
Malacaang, Manila v. Court of Appeals, we ruled that the seizure of
the landholding did not take place on the date of effectivity of PD 27
but would take effect on the payment of just compensation.

The Natividad case reiterated the Courts ruling in Office of the

President v. Court of Appeals[25] that the expropriation of the landholding did
not take place on the effectivity of P.D. No. 27 on October 21, 1972 but
seizure would take effect on the payment of just compensation judicially
determined.

Likewise, in the recent case of Heirs of Francisco R. Tantoco, Sr. v.

Court of Appeals,[26] we held that expropriation of landholdings covered by

R.A. No. 6657 take place, not on the effectivity of the Act on June 15, 1988,
but on the payment of just compensation.

In the instant case, petitioners were deprived of their properties in

1972 but have yet to receive the just compensation therefor. The parcels of
land were already subdivided and distributed to the farmer-beneficiaries
thereby immediately depriving petitioners of their use. Under the
circumstances, it would be highly inequitable on the part of the petitioners
to compute the just compensation using the values at the time of the taking
in 1972, and not at the time of the payment, considering that the
government and the farmer-beneficiaries have already benefited from the
land although ownership thereof have not yet been transferred in their
names. Petitioners were deprived of their properties without payment of just
compensation which, under the law, is a prerequisite before the property
can be taken away from its owners. [27] The transfer of possession and
ownership of the land to the government are conditioned upon the receipt
by the landowner of the corresponding payment or deposit by the DAR of
the compensation with an accessible bank. Until then, title remains with the
landowner.[28]

Our ruling in Association of Small Landowners in the Philippines, Inc. v.

Secretary of Agrarian Reform[29] is instructive, thus:

It is true that P.D. No. 27 expressly ordered the emancipation of

tenant-farmer as October 21, 1972 and declared that he shall be
deemed the owner of a portion of land consisting of a family-sized
farm except that no title to the land owned by him was to be
actually issued to him unless and until he had become a full-fledged
member of a duly recognized farmers cooperative.It was
understood, however, that full payment of the just compensation
also had to be made first, conformably to the constitutional
requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full

owners
as
of October
21,
1972 of
the
land
they acquired by virtue of Presidential Decree No. 27
(Emphasis supplied.)

it was obviously referring to lands already validly acquired under the

said decree, after proof of full-fledged membership in the farmers
cooperatives and full payment of just compensation. x x x

The CARP Law, for its part, conditions the transfer of

possession and ownership of the land to the government on receipt
by the landowner of the corresponding payment or the deposit by
the DAR of the compensation in cash or LBP bonds with an
accessible bank. Until then, title also remains with the landowner. No
outright change of ownership is contemplated either.

We also note that the expropriation proceedings in the instant case

was initiated under P.D. No. 27 but the agrarian reform process is still
incomplete considering that the just compensation to be paid to petitioners
has yet to be settled. Considering the passage of R.A. No. 6657 before the
completion of this process, the just compensation should be determined and
the process concluded under the said law. Indeed, R.A. No. 6657 is the
applicable law, with P.D. No. 27 and E.O. No. 228 having only suppletory
effect.[30]

In Land Bank of the Philippines v. Court of Appeals,[31] we held that:

RA 6657 includes PD 27 lands among the properties which the

DAR shall acquire and distribute to the landless. And to facilitate the
acquisition and distribution thereof, Secs. 16, 17 and 18 of the Act
should be adhered to.

Section 18 of R.A. No. 6657 mandates that the LBP shall compensate
the landowner in such amount as may be agreed upon by the landowner
and the DAR and the LBP or as may be finally determined by the court as
the just compensation for the land. In determining just compensation, the
cost of the acquisition of the land, the current value of like properties, its
nature, actual use and income, the sworn valuation by the owner, the tax
declarations, and the assessment made by government assessors shall be
considered. The social and economic benefits contributed by the farmers
and the farmworkers and by the government to the property as well as the
nonpayment of taxes or loans secured from any government financing
institution on the said land shall be considered as additional factors to
determine its valuation.[32]

Corollarily, we held in Land Bank of the Philippines v. Celada [33] that the
above provision was converted into a formula by the DAR through
Administrative Order No. 05, S. 1998, to wit:

Land Value (LV) = (Capitalized Net Income x 0.6) + (Comparable Sales

x 0.3) + (Market Value per Tax Declaration x 0.1)

Petitioners were deprived of their properties way back in 1972, yet to date,
they have not yet received just compensation. Thus, it would certainly be
inequitable to determine just compensation based on the guideline provided
by P.D. No. 227 and E.O. No. 228 considering the failure to determine just
compensation for a considerable length of time. That just compensation
should be determined in accordance with R.A. No. 6657 and not P.D. No. 227
or E.O. No. 228, is important considering that just compensation should be
the full and fair equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and ample. [34]

WHEREFORE, premises considered, the petition is GRANTED. The assailed

Amended Decision dated October 27, 2005 of the Court of Appeals in CAG.R. SP No. 77530 isREVERSED and SET ASIDE. The Decision dated May
26, 2004 of the Court of Appeals affirming (a) the March 31, 2003 Order of
the Special Agrarian Court ordering the respondent Land Bank of the

Philippines to deposit the just compensation provisionally determined by the

PARAD; (b) the May 26, 2003 Resolution denying respondents Motion for
Reconsideration; and (c) the May 27, 2003 Order directing Teresita V.
Tengco, respondents Land Compensation Department Manager to comply
with the March 31, 2003 Order, is REINSTATED. The Regional Trial Court of
San Jose, Occidental Mindoro, Branch 46, acting as Special Agrarian
Court is ORDERED to proceed with dispatch in the trial of Agrarian Case
Nos. R-1339 and R-1340, and to compute the final valuation of the subject
properties based on the aforementioned formula.

SO ORDERED.

CONSUELO YNARES-SANTIAGO
Associate Justice
SECOND DIVISION
G.R. No. 192890, June 17, 2013
LAND BANK OF THE PHILIPPINES, Petitioner, v. VIRGINIA PALMARES, LERMA P. AVELINO, MELILIA P. VILLA,
NINIAN P. CATEQUISTA, LUIS PALMARES, JR., SALVE P. VALENZUELA, GEORGE P. PALMARES, AND DENCEL P.
PALMARES HEREIN REPRESENTED BY THEIR ATTORNEY-IN-FACT, LERMA P. AVELINO, Respondents.
RESOLUTION
PERLAS-BERNABE, J.:
This petition for review on certiorari1 assails the August 28, 2007 Decision2 and June 29, 2010 Resolution3 of the Court of
Appeals (CA) in CA-G.R. CEB SP No. 01846, which affirmed with modification the March 27, 2006 Decision 4 of the Regional
Trial Court (RTC) of Iloilo City, Branch 34, ordering petitioner Land Bank of the Philippines (LBP) to pay respondents Virginia
Palmares, Lerma P. Avelino, Melilia P. Villa, Ninian P. Catequista, Luis Palmares, Jr., Salve P. Valenzuela, George P. Palmares,
and Dencel P. Palmares (respondents) the total sum of P669,962.53 as just compensation for their land plus twelve percent
(12%) interest per annum from June 1995 until full payment.
The Factual Antecedents
Respondents inherited a 19.98-hectare agricultural land located in Barangay Tagubang, Passi City, Iloilo, registered under
Transfer Certificate of Title (TCT) No. T-11311. In 1995, they voluntarily offered the land for sale to the government
pursuant to Republic Act No. 6657 (RA 6657), the Comprehensive Agrarian Law of 1988. Accordingly, the Department of
Agrarian Reform (DAR) acquired 19.1071 hectares of the entire area, 5 which was valued by LBP at P440,355.92.
Respondents, however, rejected said amount. Consequently, the Department of Agrarian Reform Adjudication Board (DARAB)
conducted summary proceedings to determine just compensation for the land, but it resolved to adopt LBP's valuation.
Hence, the same amount was deposited to respondents' credit as provisional compensation for the land.
On August 17, 2001, respondents filed a petition 6 for judicial determination of just compensation docketed as Civil Case No.
01-26876 before the RTC of Iloilo City. During the pendency of said petition, the trial court directed 7 LBP to recompute the
value of the land. In compliance therewith, LBP filed a Manifestation8 dated November 4, 2002 stating the recomputed value
of the land from P440,355.92 to P503,148.97. Despite the increase, respondents still rejected the offer.

The RTC Ruling

On March 27, 2006, the RTC rendered the assailed Decision fixing the just compensation of the land at P669,962.53, thus:

cralavvonlinelawlibrary

WHEREFORE, based on the foregoing premises, judgment is hereby rendered fixing the just compensation of the total area of
the land actually taken in the amount of P669,962.53 and ordering the LBP to pay the plaintiffs Virginia Palmares, et al. the
total sum of P669,962.53 as just compensation for the 19.1071 hectares taken by the government pursuant to R.A. 6657
plus 12% interest per annum from June, 1995 until full payment.
Under Section 19 of R.A. 6657, plaintiffs are also entitled to an additional five percent (5%) cash payment by way of
incentive for voluntarily offering the subject lot for sale.
SO ORDERED.9
The trial court arrived at its own computation by getting the average of (1) the price per hectare as computed by LBP in
accordance with DAR guidelines;10 and (2) the market value of the land per hectare as shown in the 1997 tax
declaration, viz:
cralavvonlinelawlibrary

LBP price per ha. + Market value

Corn land
[P17,773.91 +
P39,760.00]/2
Rice land
[44,304.44 +
79,790.00]/2
Bamboo land 27,387.00

Average x
Area
= P 28,766.95 x
15.0234 has.
= 62,047.22 x
3.6337 has.
27,387.00 x 0.4500
has.
Total Land Value

Value
= P432,177.40
= 225,460.98
=

12,324.15

P669,962.5311

LBP appealed to the CA arguing that the computation made by the RTC failed to consider the factors in determining just
compensation enumerated under Section 17 of RA 6657, which reads:
cralavvonline lawlibrary

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.
The CA Ruling
On August 28, 2007, the appellate court affirmed the just compensation fixed by the RTC as having been arrived at in
consonance with Section 17 of RA 6657 and pertinent DAR Administrative Orders. It emphasized that the determination of
just compensation in eminent domain proceedings is essentially a judicial function and, in the exercise thereof, courts should
be given ample discretion and should not be delimited by mathematical formulas.
The CA modified the award of twelve percent (12%) interest to apply only to the remaining balance of the just compensation
in the amount of P229,606.61, considering that LBP had already previously deposited in the name of respondents the amount
of P440,355.92 corresponding to its valuation. Thus:
cralavvonlinelawlibrary

WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The impugned Decision dated 27 March 2006
and Order dated 12 May 2006 are AFFIRMED with the MODIFICATION that petitioner is ordered to pay respondents the
remaining balance of Php229,606.61 with legal interest thereon at 12% per annum computed from the taking of the property
in June, 1995 until the amount shall have been fully paid.
SO ORDERED.12

nadcralavvonlinelawlibrary

In its motion for reconsideration13 of the foregoing Decision, LBP insisted on its valuation of the subject land, which already
factored in the market value per tax declaration in 1995 when the land was offered, in accordance with the
formula14 prescribed under DAR Administrative Order (AO) No. 6, Series of 1992, as amended by AO No. 11, Series of 1994.
The RTC, however, factored in the market value in the 1997 Tax Declaration of the subject land to arrive at its own valuation.
Thus, LBP protested what it called the "double take up" of the market value per tax declaration. 15
During the pendency of the said motion, LBP urgently moved 16 for the consolidation of the instant case with CA-G.R. CEB SP
No. 01845 entitled Republic of the Philippines, represented by the Department of Agrarian Reform v. Virginia Palmares, et
al. It appeared that the DAR had filed a separate appeal of the March 27, 2006 Decision of the RTC before a different

division of the CA, which rendered a Decision on September 28, 2007, exactly a month after the promulgation of the assailed
Decision in the instant case, reversing the RTC and ordering the remand of the case for determination of just compensation
with the assistance of at least three (3) commissioners. LBP, however, failed to append a copy of the September 28, 2007
Decision in CA-G.R. SP No. 01845 both in its Urgent Manifestation with Motion to Consolidate before the appellate court, and
in the instant petition before us.
LBP's motion for reconsideration of the August 28, 2007 Decision 17 of the CA and its Urgent Manifestation with Motion to
Consolidate were both denied in the June 29, 2010 Resolution, 18 for lack of merit.
Hence, LBP is now before us via the instant petition for review on certiorari alleging that
1. THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN AFFIRMING WITH MODIFICATION THE DECISION
DATED MARCH 27, 2006 AND ORDER DATED MAY 12, 2006 OF THE SPECIAL AGRARIAN COURT (SAC), THE COMPENSATION
FIXED BY THE SAC NOT BEING IN ACCORDANCE WITH THE LEGALLY PRESCRIBED VALUATION FACTORS UNDER SECTION 17
OF R.A. 6657 AS TRANSLATED INTO A BASIC FORMULA IN DAR ADMINISTRATIVE ORDER NO. 05, SERIES OF 1998 AND AS
RULED BY THE SUPREME COURT IN THE CASES OF SPS. BANAL, G.R. NO. 143276 (JULY 20, 2004); CELADA, G.R. NO.
164876 (JANUARY 23, 2006); AND LUZ LIM, G.R. NO. 171941 (AUGUST 2, 2007).
2. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING PETITIONER LBP LIABLE FOR INTEREST OF 12% PER ANNUM.
3. THE COURT OF APPEALS EIGHTEENTH DIVISION ERRED IN NOT CONSOLIDATING THE CASE WITH CA-G.R. CEB SP NO.
01845 AND REMANDING THE CASE TO THE COURT A QUO CONSIDERING THE SEPTEMBER 28, 2007 DECISION OF THE
SPECIAL TWENTIETH DIVISION OF THE COURT OF APPEALS IN CA-G.R. CEB-SP NO. 01845 TO REMAND THE CASE ON THE
PETITION FILED BY THE DAR.19
The Court's Ruling
There is merit in the instant petition.
The principal basis of the computation for just compensation is Section 17 of RA 6657, 20 which enumerates the following
factors to guide the special agrarian courts in the determination thereof: (1) the acquisition cost of the land; (2) the current
value of the properties; (3) its nature, actual use, and income; (4) the sworn valuation by the owner; (5) the tax
declarations; (6) the assessment made by government assessors; (7) the social and economic benefits contributed by the
farmers and the farmworkers, and by the government to the property; and (8) the non-payment of taxes or loans secured
from any government financing institution on the said land, if any.21 Pursuant to its rule-making power under Section 4922 of
the same law, the DAR translated these factors into a basic formula. 23
In the instant case, the trial court found to be "unrealistically low" the total valuation by LBP and the DAR in the amount of
P440,355.92, which was computed on the basis of DAR AO No. 6, Series of 1992, as amended by DAR AO No. 11, Series of
1994. It then merely proceeded to add said valuation to the market value of the subject land as appearing in the 1997 Tax
Declaration, and used the average of such values to fix the just compensation at P669,962.53.
In Land Bank of the Philippines v. Barrido,24 where the RTC adopted a different formula, as in this case, by considering the
average between the findings of the DAR using the formula laid down in Executive Order No. 228 25 and the market value of
the property as stated in the tax declaration, we declared it to be an obvious departure from the mandate of the law and the
DAR administrative order. We emphasized therein that, while the determination of just compensation is essentially a judicial
function vested in the RTC acting as a special agrarian court, the judge cannot abuse his discretion by not taking into full
consideration the factors specifically identified by law and implementing rules.
We agree with LBP in the instant case that the "double take up" of the market value per tax declaration as a valuation factor
completely destroys the rationale of the formula laid down by the DAR. Thus, argues LBP:
cralavvonline lawlibrary

x x x Market value accounts for only 10% under the basic formula of LV = (CNI x 0.60) + (CS x .30) + (MV x .10). The 10%
remains constant even under the variation formulae of LV = (CNI x .90) + (MV x .10) and LV = (CS x .90) + (MV x .10). It
is only when the data constituting CS (Comparable sales) and CNI (capitalized net income) are absent that MV is given
greater weight in determining just compensation. This is not obtaining in this case.
x x x Greater weight is accorded CNI, 60% in the basic formula and 90% in the other variation thereof, and this is not
without a valid reason. The valuation formula is heavily production based (net income) because that is the true value of
what landowners lose when their lands are expropriated and what the farmers-beneficiaries gain when the lands are
distributed to them. A more fundamental reason for the valuation formula of DAR is the fidelity to the principle of
affordability, i.e. what the farmers-beneficiaries can reasonably afford to pay based on what the land can produce. It must
be emphasized that agricultural lands are not residential lands, and farmers-beneficiaries are not given those lands so they
can live there but so that they can till them. And since they generally live on hand to mouth existence, their source of
repaying the just compensation is sourced from their income derived from the cultivation of the land. Thus, the double take
up of market value as a valuation factor goes against the grain of affordability as the basic principle in the governmentsupervised valuation formula for agrarian reform.26

Considering, therefore, that the RTC based its valuation on a different formula and without taking into full consideration the
factors set forth in Section 17 of RA 6657, we order the consolidation of the instant case (CA-G.R. CEB SP No. 01846) with
CA-G.R. CEB SP No. 01845, where the appeal of the DAR from the March 27, 2006 Decision of the RTC was granted and said
case was remanded to the trial court for determination of just compensation with the assistance of commissioners. We have
held that consolidation of cases is proper when there is a real need to forestall, as in this case, the possibility of conflicting
decisions being rendered in the cases.27
WHEREFORE, the petition is GRANTED. The August 28, 2007 Decision and June 29, 2010 Resolution of the Court of
Appeals in CA-G.R. SP No. 01846 are hereby REVERSED and SET ASIDE. The case isCONSOLIDATED with CA-G.R. CEB
SP No. 01845 and REMANDED to the Regional Trial Court of Iloilo City, Branch 34, which is directed to determine with
dispatch, and with the assistance of at least three (3) commissioners, the just compensation due the respondents in
accordance with Section 17 of Republic Act No. 6657 and the applicable DAR Administrative Orders.
SO ORDERED.
Carpio, (Chairperson), Brion, Del Castillo, and Perez, JJ., concu

AMUEL ESTRIBILLO, CALIXTO

P. ABAYATO, JR., RONGIE D.
AGUILAR,
TACIANA
D.
AGUILAR, ARTEMIO G. DE
JUAN,
ESTANISLAO
DELA
CRUZ, SR., EDGAR DUENAS,
MARIO ERIBAL, REYNALDO
C.
ESENCIA,
EMMA
GONZAGA, RUBEN A. IBOJO,
SAMUEL
JAMANDRE,
HILARION
V.
LANTIZA,
ANSELMO LOPEZ, TERESITA
NACION, CHARIE E. NASTOR,
NELSON L. NULLAS, CARLITO
S.
OLIA,
ANA
PATIO,
ROBERTO T. PATIO, ANTONIO
P. ROCHA, FERNANDO C.
RUFINO, PATERNO P. SAIN,
CLAUDIO S. SAYSON, and
JOEMARIE VIBO,
Petitioners,

- versus DEPARTMENT OF AGRARIAN

REFORM

and

HACIENDA

G.R. No. 159674

Present:

PANGANIBAN, C.J.*
Chairperson,
YNARES-SANTIAGO,**
AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO, JJ.

MARIA, INC.,
Respondents.

Promulgated:

June 30, 2006

x--------------------------------------------------x

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of

Court, seeking the review and reversal of the Resolutions [1] of the Court of
Appeals dated 27 January 2003 and 28 August 2003, respectively.

The factual and procedural antecedents are as follows:

The petitioners, with the exception of two, are the recipients of

Emancipation Patents (EPs) over parcels of land located at Barangay Angas,
Sta. Josefa, Agusan del Sur, with their respective Transfer Certificate of Title
(TCT) and EP numbers presented below:

Petitioners

TCT/EP Nos.

Areas
(has.)

1. SAMUEL ESTRIBILLO

TCT No. T-287/EP No. A037675

1.7833

2. CALIXTO P. ABAYATO, JR.

TCT No. T-297/EP No. A-

2.0000

037814
TCT No. T-829/EP No. A027293

0.1565

3. RONGIE D. AGUILAR

TCT No. T-913/EP No. A027295

3.1441

4. TACIANA D. AGUILAR

TCT No. T-944/EP No. A027296

4.2405

5. ARTEMIO G. DE JUAN

TCT No. T-302/EP No. A037809

3.3082

6. ESTANISLAO DELA CRUZ, SR.

TCT No. T-290/EP No. A035676

3.1437

7. EDGAR DUENAS

TCT No. T-949/EP No. A037658

4.0128

8. MARIO P. ERIBAL

TCT No. T-952/EP No. A037836

2.3087

9. REYNALDO C. ESENCIA

TCT No. T-950/EP No. A037844

2.0950

10. RUBEN A. IBOJO

TCT No. T-928/EP No. A037873

1.5737

11. SAMUEL JAMANDRE

TCT No. T-909/EP No. A159348

2.2670

12. HILARION V. LANTIZA

TCT No. T-288/EP No. A037674

4.5526
0.4579

TCT No. T-401/EP No. A037825

13. ANSELMO LOPEZ

TCT No. T-973/EP No. A037840

4.4939

14. TERESITA NACION

TCT No. T-900/EP No. A037849

2.2140

15. CHARIE E. NASTOR

TCT No. T-825/EP No. A037829

3.9291

16. NELSON L. NULLAS

TCT No. T-396/EP No. A037826

2.7491

17. CARLITO S. OLIA

TCT No. T-910/EP No. A037673

1.7954

18. ROBERTO T.PATIO

TCT No. T-912/EP No. A037860

6.4266

19. ANTONIO P. ROCHA

TCT No. T-914/EP No. A037830

2.2143

20. FERNANDO C. RUFINO

TCT No. T-923/EP No. A037848

4.5322

21. PATERNO P. SAIN

TCT No. T-954/EP No. A037813

4.3223

22. CLAUDIO S. SAYSON, and

TCT No. T-891/EP No. A037880

3.7151

23. JOEMARIE VIBO

TCT No. T-893/EP No. A037827

1.3185[2]

The two other petitioners, Emma Gonzaga and Ana Patio, are the
surviving spouses of deceased recipients of EPs over parcels of land also
located
at Barangay Angas,
Sta.Josefa, Agusan del Sur,
with
their
corresponding TCT and EP numbers identified as follows:

(Deceased) Registered
Owners

TCT/EP Nos.

Areas
(has.)

1. MANUEL S. GONZAGA

TCT No. T-920/EP No. A037832

4.1953

2. RAFAEL PATIO

TCT No. T-929/EP No. A037861

3.0078[3]

The parcels of land described above, the subject matters in this

Petition, were formerly part of a forested area which have been denuded as
a result of the logging operations of respondent Hacienda Maria, Inc.
(HMI). Petitioners, together with other persons, occupied and tilled these
areas believing that the same were public lands. HMI never disturbed
petitioners and the other occupants in their peaceful cultivation thereof.

HMI acquired such forested area from the Republic of the Philippines
through Sales Patent No. 2683 in 1956 by virtue of which it was issued OCT

No. P-3077-1661. The title covered three parcels of land with a total area of
527.8308 hectares, to wit:

Lot No.

Area
(in hectares)

Lot No. 1620, Pls 4

28.52

Lot No. 1621, Pls 4

11.64

Lot No. 1622, Pls 4

487.47

TOTAL

527.83[4]

On 21 October 1972, Presidential Decree No. 27[5] was issued

mandating that tenanted rice and corn lands be brought under Operation
Land Transfer and awarded to farmer-beneficiaries.

HMI, through a certain Joaquin Colmenares, requested that 527.8308

hectares of its landholdings be placed under the coverage of Operation Land
Transfer. Receiving compensation therefor, HMI allowed petitioners and
other occupants to cultivate the landholdings so that the same may be
covered under said law.

In 1973, the Department of Agrarian Reform (DAR) conducted

a parcellary mapping of the entire landholdings of 527.8308 hectares
covered by OCT No. P-3077-1661. In 1975 and 1976, the DAR approved
the Parcellary Map Sketching (PMS) and the Amended PMS covering the
entire landholdings.

HMI, through its representatives, actively participated in all relevant

proceedings, including the determination of the Average Gross Production
per hectare at the BarangayCommittee on Land Production, and was a
signatory of an undated Landowner and Tenant Production Agreement
(LTPA), covering the 527.8308 hectares. The LTPA was submitted to the Land
Bank of the Philippines (LBP) in 1977.

Also in 1977, HMI executed a Deed of Assignment of Rights in favor of

petitioners, among other persons, which was registered with the Register of
Deeds and annotated at the back of OCT No. P-3077-1661. The annotation
in the OCT showed that the entire 527.8308 hectares was the subject of the
Deed of Assignment.

In 1982, a final survey over the entire area was conducted and
approved. From 1984 to 1988, the corresponding TCTs and EPs covering the
entire 527.8308 hectares were issued to petitioners, among other persons.

In December 1997, HMI filed with the Regional Agrarian Reform

Adjudicator (RARAD) of CARAGA, Region XIII, 17 petitions seeking the
declaration of erroneous coverage under Presidential Decree No. 27 of
277.5008 hectares of its former landholdings covered by OCT No. P-30771661. HMI claimed that said area was not devoted to either rice or corn, that
the area was untenanted, and that no compensation was paid therefor. The
17 petitions, which were later consolidated, sought for the cancellation of
the EPs covering the disputed 277.5008 hectares which had been awarded
to petitioners. HMI did not question the coverage of the other 250.3300
hectares under Presidential Decree No. 27 despite claiming that the entire
landholdings were untenanted and not devoted to rice and corn.

On 27 November 1998, after petitioners failed to submit a Position

Paper, the RARAD rendered a Decision declaring as void the TCTs and EPs
awarded to petitioners because the land covered was not devoted to rice
and corn, and neither was there any established tenancy relations between
HMI and petitioners when Presidential Decree No. 27 took effect on 21
October 1972. The Decision was based on a 26 March 1998 report
submitted by the Hacienda Maria Action Team. Petitioners TCTs and EPs
were ordered cancelled. Petitioners filed a Motion for Reconsideration, but
the same was denied. Petitioners appealed to the Department of Agrarian
Reform Adjudication Board (DARAB) which affirmed the RARAD Decision.

After the DARAB denied petitioners Motion for Reconsideration, the

latter proceeded to the Court of Appeals with their Petition for Review
on Certiorari. The Court of Appeals issued the following assailed Resolution:

A perusal of the petition reveals that the Verification and

Certification of Non-Forum Shopping was executed by Samuel
A. Estribillo who is one of the petitioners, without the corresponding
Special Power of Attorneys executed by the other petitioners
authorizing him to sign for their behalf in violation of Section 5, Rule
7 of the 1997 Rules of Civil Procedure, as amended.

WHEREFORE, the petition

necessarily DISMISSED.[6]

is DENIED

DUE

COURSE and

Petitioners filed a Motion for Reconsideration With Alternative Prayer

with Leave of Court for the Admission of Special Power of Attorney (SPA)
Granted to Petitioner Samuel Estribillo by his Co-Petitioners. The Court of
Appeals denied the motion by issuing the following assailed Resolution:

Petitioners seek the reconsideration of Our Resolution

promulgated on January 27, 2003 which dismissed the petition for
certiorari.

We find no reason to reverse, alter or modify the resolution

sought to be reconsidered, since petitioners have failed to show that
their belated submission of the special power of attorney can be
justified as against the unequivocal requirements set forth by Sec. 5,
Rule 7 of the 1997 Rules of Civil Procedure, as amended.

While it is true that the Supreme Court has recognized special

circumstances that justify the relaxation of the rules on non-forum

shopping, such circumstances, however, are not present in the case

at bar.

More importantly, said Rules cannot be relaxed in view of the

Supreme Courts ruling in Loquias vs. Ombudsman, 338 SCRA 62,
which stated that, substantial compliance will not suffice in a matter
involving strict observance by the rules. The attestation contained in
the certification [on] non-forum shopping requires personal
knowledge by the party who executed the same.

Since the Verification and Certification on Non-Forum shopping

was executed without the proper authorization from all the
petitioners, such personal knowledge cannot be presumed to exist
thereby rendering the petition fatally defective.

Par. 2, Sec. 5 of Rule 7 of the 1997 Rules of Civil Procedure, as

amended states:

Failure to comply with the foregoing requirements

shall not be curable by mere amendment of the complaint
or other initiatory pleading but shall be cause for the
dismissal of the case without prejudice x x x

It is, thus, clear that the Motion for Reconsideration has no

legal
basis
to
support
it
and
should
be
dismissed
forthwith. Moreover, granting arguendo that a special power of
attorney belatedly filed could cure the petitions defect, the
requirement of personal knowledge of all the petitioners still has not
been met since some of the other petitioners failed to sign the
same.

WHEREFORE, in view of the foregoing, the Motion

Reconsideration is hereby DENIED.[7]

for

Petitioners now file this present Petition contending that there had
been compliance with Rule 7, Section 5 of the 1997 Rules of Civil
Procedure. They further reiterate their argument that the EPs are ordinary
titles which become indefeasible one year after their registration.

The petition is impressed with merit.

Petitioners have sufficiently complied

with Rule 7, Section 5 of the 1997 Rules
of Civil Procedure concerning the
CertificationAgainst Forum shopping

Rule 7, Section 5 of the 1997 Rules of Civil Procedure was preceded by

Revised Circular No. 28-91 and Administrative Circular No. 04-94, which
required a certification against forum shopping to avoid the filing of multiple
petitions and complaints involving the same issues in the Supreme Court,
the Court of Appeals, and other tribunals and agencies. Stated differently,
the rule was designed to avoid a situation where said courts, tribunals and
agencies would have to resolve the same issues. Rule 7, Section 5, now
provides:

Sec. 5. Certification against forum shopping. The plaintiff or

principal party shall certify under oath in the complaint or other
initiatory pleading asserting a claim for relief, or in a sworn
certification annexed thereto and simultaneously filed therewith: (a)
that he has not theretofore commenced any action or filed any claim
involving the same issues in any court, tribunal or quasi-judicial
agency and, to the best of his knowledge, no such other action or
claim is pending therein; (b) if there is such other pending action or
claim, a complete statement of the present status thereof; and (c) if

he should thereafter learn that the same or similar action or claim

has been filed or is pending, he shall report that fact within five (5)
days therefrom to the court wherein his aforesaid complaint or
initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be

curable by mere amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the case without
prejudice, unless otherwise provided, upon motion and after
hearing. The submission of a false certification or non-compliance
with any of the undertakings therein shall constitute indirect
contempt of court, without prejudice to the corresponding
administrative and criminal actions. If the acts of the party or his
counsel clearly constitute willful and deliberate forum shopping, the
same shall be ground for summary dismissal with prejudice and
shall constitute direct contempt as well as a cause for administrative
sanctions.

Revised Circular No. 28-91 was designed x x x to promote and facilitate

the orderly administration of justice and should not be interpreted with such
absolute literalness as to subvert its own ultimate and legitimate objective
or the goal of all rules of procedure which is to achieve substantial justice as
expeditiously as possible.[8] Technical rules of procedure should be used to
promote, not frustrate, justice.[9] The same guidelines should still apply in
interpreting what is now Rule 7, Section 5 of the 1997 Rules of Civil
Procedure.

Petitioner Samuel A. Estribillo, in signing the Verification and

Certification Against Forum Shopping, falls within the phrase plaintiff or
principal party who is required to certify under oath the matters mentioned
in Rule 7, Section 5 of the 1997 Rules of Civil Procedure. Such was given
emphasis
by
this
Court
when
we
held
[10]
[11]
in Mendigorin v.Cabantog
and Escorpizo v. University of Baguio
that the
certification of non-forum shopping must be signed by the plaintiff or any of
the principal parties and not only by the legal counsel. In Condo Suite Club
Travel, Inc. v. National Labor Relations Commission,[12] we likewise held that:

The certification in this petition was improperly executed by the

external legal counsel of petitioner. For a certification of non-forum
shopping must be by the petitioner, or any of the principal parties
and not by counsel unless clothed with a special power of attorney
to do so. This procedural lapse on the part of petitioner is also a
cause for the dismissal of this action. (Emphasis supplied)

The Court of Appeals heavily relied on the seemingly conflicting case

of Loquias v. Office of the Ombudsman,[13] where this Court ruled that:

At the outset, it is noted that the Verification and Certification

was signed by Antonio Din, Jr., one of the petitioners in the instant
case. We agree with the Solicitor General that the petition is
defective. Section 5, Rule 7 expressly provides that it is the plaintif
or principal party who shall certify under oath that he has not
commenced any action involving the same issues in any court,
etc. Only
petitioner
Din,
the
Vice-Mayor
of
San
Miguel, Zamboanga del Sur, signed the certification. There is no
showing that he was authorized by his co-petitioners to represent
the latter and to sign the certification. It cannot likewise be
presumed that petitioner Din knew, to the best of his knowledge,
whether his co-petitioners had the same or similar actions or claims
filed or pending. We find that substantial compliance will not suffice
in a matter involving strict observance by the rules. The attestation
contained in the certification on non-forum shopping requires
personal
knowledge
by
the
party
who
executed
the
same. Petitioners must show reasonable cause for failure to
personally sign the certification. Utter disregard of the rules cannot
justly be rationalized by harking on the policy of liberal construction.
(Emphasis supplied)

Loquias, however, was a case involving only five petitioners seeking

relief from the Resolution of the Ombudsman charging them with violation

of Republic Act No. 3019, where the above declaration at the outset was
made together with a determination on the lack of jurisdiction on our part to
decide the Petition.[14] There being only five petitioners in Loquias, the
unreasonableness of the failure to obtain the signatures of Antonio
Din, Jr.s four co-accused is immediately apparent, hence the remark by this
Court that [p]etitioners must show reasonable cause for failure to personally
sign the certification. In the present petition, petitioners allege that they are
farmer-beneficiaries
who
reside
in
a
very
remote barangay in Agusan del Sur. While
they
reside
in
the
same barangay, they allegedly have to walk for hours on rough terrain to
reach their neighbors due to the absence of convenient means of
transportation. Their houses are located far apart from each other and the
mode of transportation, habal-habal, is scarce and difficult. Majority of them
are also nearing old age. On the other hand, their lawyers (who are
members of a non-government organization engaged in development work)
are based in Quezon Citywho started assisting them at the latter part of the
RARAD level litigation in 1998, and became their counsel of record only at
the DARAB level. The petitioner who signed the initiatory pleading,
Samuel Estribillo, was the only petitioner who was able to travel to Manila at
the time of the preparation of the Petition due to very meager resources of
their farmers organization, the Kahiusahan sa Malahutayong mga Maguugma Para sa Ekonomikanhong Kalambuan (KAMMPE). When the Petition a
quo was dismissed, petitioners counsel went to Agusan del Sur and tried
earnestly to secure all the signatures for the SPA. In fact, when the SPA was
being circulated for their signatures, 24 of the named petitioners therein
failed to sign for various reasons some could not be found within the area
and were said to be temporarily residing in other towns, while some already
died because of old age.[15] Be that as it may, those who did not sign the SPA
did not participate, and are not parties to this petition.

The Court of Appeals merely said that the special circumstances

recognized by this Court that justify the relaxation of the rules on the
certification against forum shopping are not present in the case at bar,
[16]
without discussing the circumstances adduced by the petitioners in their
Motion for Reconsideration. Thus, assuming for the sake of argument that
the actuation of petitioners was not strictly in consonance with Rule 7,
Section 5 of the 1997 Rules of Civil Procedure, it should still be determined
whether there are special circumstances that would justify the suspension

or relaxation of the rule concerning verification and certification against

forum shopping, such as those which we appreciated in the ensuing cases.

In General Milling Corporation v. National Labor Relations Commission,

the appeal to the Court of Appeals had a certificate against forum
shopping, but was dismissed as it did not contain a board resolution
authorizing the signatory of the Certificate. Petitioners therein attached the
board resolution in their Motion for Reconsideration but the Court of
Appeals, as in this case, denied the same. In granting the Petition therein,
we explained that:
[17]

[P]etitioner complied with this procedural requirement except that it

was not accompanied by a board resolution or a secretarys
certificate that the person who signed it was duly authorized by
petitioner to represent it in the case. It would appear that the
signatory of the certification was, in fact, duly authorized as so
evidenced by a board resolution attached to petitioners motion for
reconsideration before the appellate court. It could thus be said that
there was at least substantial compliance with, and that there was
no attempt to ignore, the prescribed procedural requirements.

The rules of procedure are intended to promote, rather than

frustrate, the ends of justice, and while the swift unclogging of court
dockets is a laudable objective, it, nevertheless, must not be met at
the expense of substantial justice. Technical and procedural
rules are intended to help secure, not suppress, the cause of justice
and a deviation from the rigid enforcement of the rules may be
allowed to attain that prime objective for, after all, the dispensation
of justice is the core reason for the existence of courts. [Acme Shoe,
Rubber and Plastic Corp. vs. Court of Appeals;BA Savings Bank
vs. Sia, 336 SCRA 484].

In Shipside Incorporated v. Court of Appeals,[18] the authority of

petitioners resident manager to sign the certification against forum
shopping was submitted to the Court of Appeals only after the latter
dismissed the Petition. It turned out, in the Motion for Reconsideration, that
he already had board authority ten days before the filing of the Petition. We
ratiocinated therein that:

On the other hand, the lack of certification against forum

shopping is generally not curable by the submission thereof after
the filing of the petition. Section 5, Rule 45 of the 1997 Rules of Civil
Procedure provides that the failure of the petitioner to submit the
required documents that should accompany the petition, including
the certification against forum shopping, shall be sufficient ground
for the dismissal thereof. The same rule applies to certifications
against forum shopping signed by a person on behalf of a
corporation which are unaccompanied by proof that said signatory is
authorized to file a petition on behalf of the corporation.

In certain exceptional circumstances, however, the Court has

allowed the belated filing of the certification. In Loyola v. Court of
Appeals, et al. (245 SCRA 477 [1995]), the Court considered the
filing of the certification one day after the filing of an election
protest as substantial compliance with the requirement. In Roadway
Express, Inc. v. Court of Appeals, et al. (264 SCRA 696 [1996]), the
Court allowed the filing of the certification 14 days before the
dismissal of the petition. In Uy v. Landbank, supra, the Court had
dismissed Uys petition for lack of verification and certification
against non-forum shopping. However, it subsequently reinstated
the petition after Uy submitted a motion to admit certification and
non-forum shopping certification. In all these cases, there were
special circumstances or compelling reasons that justified the
relaxation of the rule requiring verification and certification on nonforum shopping.

In the instant case, the merits of petitioners case should be

considered special circumstances or compelling reasons that justify

tempering the requirement in regard to the certificate of non-forum

shopping. Moreover,
in Loyola,
Roadway, and Uy,
the
Court
excused non-compliance with the requirement as to the certificate
of non-forum shopping. With more reason should we allow the
instant petition since petitioner herein did submit a certification on
non-forum shopping, failing only to show proof that the signatory
was authorized to do so. That petitioner subsequently submitted a
secretarys certificate attesting that Balbin was authorized to file an
action on behalf of petitioner likewise mitigates this oversight.

It must also be kept in mind that while the requirement of the

certificate of non-forum shopping is mandatory, nonetheless the
requirements must not be interpreted too literally and thus defeat
the objective of preventing the undesirable practice of forumshopping. Lastly, technical rules of procedure should be used to
promote, not frustrate justice. While the swift unclogging of court
dockets is a laudable objective, the granting of substantial justice is
an even more urgent ideal.

In Uy v. Land Bank of the Philippines,[19] we, likewise, considered the

apparent merits of the substantive aspect of the case as a special
circumstance or compelling reason for the reinstatement of the case, and
invoked our power to suspend our rules to serve the ends of justice. Thus:

The admission of the petition after the belated filing of the

certification, therefore, is not unprecedented. In those cases where
the Court excused non-compliance with the requirements, there
were special circumstances or compelling reasons making the strict
application of the rule clearly unjustified. In the case at bar, the
apparent merits of the substantive aspects of the case should be
deemed as a special circumstance or compelling reason for the
reinstatement of the petition. x x x

There were even cases where we held that there was complete noncompliance with the rule on certification against forum shopping, but we still
proceeded to decide the case on the merits. In De Guia v. De Guia,
[20]
petitioners raised in their Petition for Review the allowance of
respondents Appeal Brief which did not contain a certificate against forum
shopping. We held therein that:

With regard to the absence of a certification of non-forum

shopping, substantial justice behooves us to agree with the
disquisition of the appellate court. We do not condone the
shortcomings of respondents counsel, but we simply cannot ignore
the merits of their claim. Indeed, it has been held that [i]t is within
the inherent power of the Court to suspend its own rules in a
particular case in order to do justice.

In Damasco v. National Labor Relations Commission,[21] the noncompliance was disregarded because of the principle of social justice, which
is equally applicable to the case at bar:

We note that both petitioners did not comply with the rule on
certification against forum shopping. The certifications in their
respective petitions were executed by their lawyers, which is not
correct. The certification of non-forum shopping must be by the
petitioner or a principal party and not the attorney. This procedural
lapse on the part of petitioners could have warranted the outright
dismissal of their actions.

But, the court recognizes the need to resolve these two

petitions on their merits as a matter of social justice involving labor
and capital. After all, technicality should not be allowed to stand in
the way of equitably and completely resolving herein the rights and
obligations of these parties. Moreover, we must stress that technical
rules of procedure in labor cases are not to be strictly applied if the
result would be detrimental to the working woman.

The foregoing cases show that, even if we assume for the

argument that there was violation of Rule 7, Section 5 of the 1997
Civil Procedure, a relaxation of such rule would be justified
compelling reasons: social justice considerations and the apparent
the Petition, as shall be heretofore discussed.

sake of
Rules of
for two
merit of

Certificates of Title issued pursuant to

Emancipation
Patents
are
as
indefeasible
as TCTs issued
in
registration proceedings.

Petitioners claim that the EPs have become indefeasible upon the
expiration of one year from the date of its issuance. The DARAB, however,
ruled that the EP is a title issued through the agrarian reform program of the
government. Its issuance, correction and cancellation is governed by the
rules and regulations issued by the Secretary of the Department of Agrarian
Reform (DAR). Hence, it is not the same as or in the same category of
a Torrens title.

The DARAB is grossly mistaken.

Ybaez v. Intermediate Appellate Court,[22] provides that certificates of

title issued in administrative proceedings are as indefeasible as certificates
of title issued in judicial proceedings:

It must be emphasized that a certificate of title issued under an

administrative proceeding pursuant to a homestead patent, as in
the instant case, is as indefeasible as a certificate of title issued
under a judicial registration proceeding, provided the land covered
by said certificate is a disposable public land within the
contemplation of the Public Land Law.

There is no specific provision in the Public Land Law (C.A. No.

141, as amended) or the Land Registration Act (Act 496), now P.D.
1529, fixing the one (1) year period within which the public land
patent is open to review on the ground of actual fraud as in Section
38 of the Land Registration Act, now Section 32 of P.D. 1529, and
clothing a public land patent certificate of title with
indefeasibility. Nevertheless, the pertinent pronouncements in
the aforecited cases clearly reveal that Section 38 of the Land
Registration Act, now Section 32 of P.D. 1529 was applied by
implication by this Court to the patent issued by the Director of
Lands duly approved by the Secretary of Natural Resources, under
the signature of the President of the Philippines in accordance with
law. The date of issuance of the patent, therefore, corresponds to
the date of the issuance of the decree in ordinary registration cases
because the decree finally awards the land applied for registration
to the party entitled to it, and the patent issued by the Director of
Lands equally and finally grants, awards, and conveys the land
applied for to the applicant. This, to our mind, is in consonance with
the intent and spirit of the homestead laws, i.e. conservation of a
family home, and to encourage the settlement, residence and
cultivation and improvement of the lands of the public domain. If the
title to the land grant in favor of the homesteader would be
subjected to inquiry, contest and decision after it has been given by
the Government through the process of proceedings in accordance
with the Public Land Law, there would arise uncertainty, confusion
and suspicion on the governments system of distributing public
agricultural lands pursuant to the Land for the Landless policy of the
State.

The same confusion, uncertainty and suspicion on the distribution of

government-acquired lands to the landless would arise if the possession of
the grantee of an EP would still be subject to contest, just because his
certificate of title was issued in an administrative proceeding. The silence of
Presidential Decree No. 27 as to the indefeasibility of titles issued pursuant
thereto is the same as that in the Public Land Act where Prof.
Antonio Noblejas commented:

Inasmuch as there is no positive statement of the Public Land

Law, regarding the titles granted thereunder, such silence should be
construed and interpreted in favor of the homesteader who
come into the possession of his homestead after complying with the
requirements thereof. Section 38 of the Land Registration Law
should be interpreted to apply by implication to the patent issued by
the Director of Lands, duly approved by the Minister of Natural
Resources, under the signature of the President of the Philippines, in
accordance with law.[23]

After complying with the procedure, therefore, in Section 105 of

Presidential Decree No. 1529, otherwise known as the Property Registration
Decree (where the DAR is required to issue the corresponding certificate of
title after granting an EP to tenant-farmers who have complied with
Presidential Decree No. 27), [24] the TCTs issued to petitioners pursuant to
their EPs acquire the same protection accorded to other TCTs. The certificate
of title becomes indefeasible and incontrovertible upon the expiration of one
year from the date of the issuance of the order for the issuance of the
patent, x x x. Lands covered by such title may no longer be the subject
matter of a cadastral proceeding, nor can it be decreed to another person.
[25]

As we held through Justice J.B.L. Reyes in Lahora v. Dayanghirang, Jr.

:

[26]

The rule in this jurisdiction, regarding public land patents and

the character of the certificate of title that may be issued by virtue
thereof, is that where land is granted by the government to a
private individual, the corresponding patent therefor is
recorded, and the certificate of title is issued to the grantee;
thereafter, the land is automatically brought within the
operation of the Land Registration Act, the title issued to
the grantee becoming entitled to all the safeguards
provided in Section 38 of the said Act . In other words, upon
expiration of one year from its issuance, the certificate of

title shall become irrevocable and indefeasible like a

certificate issued in a registration proceeding . (Emphasis
supplied.)

The EPs themselves, like the Certificates of Land Ownership Award

(CLOAs) in Republic Act No. 6657 (the Comprehensive Agrarian Reform Law
of 1988), are enrolled in the Torrens system of registration. The Property
Registration Decree in fact devotes Chapter IX [27] on the subject of
EPs. Indeed, such EPs and CLOAs are, in themselves, entitled to be as
indefeasible as certificates of title issued in registration proceedings.

The only defense of respondents, that the issue of indefeasibility of

title was raised for the first time on appeal with the DARAB, does not hold
water because said issue was already raised before the RARAD. [28]
The recommendation of the Hacienda Maria Action Team to have the
EPs cancelled and the lots covered under the Republic Act No. 6657, [29] with
the farmer-beneficiaries later on being issued with CLOAs, would only delay
the application of agrarian reform laws to the disputed 277.5008 hectares,
leading to the expenditure of more time and resources of the government.

The unreasonable delay of HMI in filing the Petition for cancellation

more than 20 years after the alleged wrongful annotation of the Deed of
Assignment in OCT No. P-3077-1661, and more than ten years after the
issuance of the TCTs to the farmers, is apparently motivated by its desire to
receive a substantially higher valuation and just compensation should the
disputed 277.5008 hectares be covered under Republic Act No. 6657
instead of Presidential Decree No. 27. [30] This is further proved by the
following uncontested allegations by petitioners:

(i)

HMI neither asked for rentals nor brought any action to oust
petitioners from the farm they were cultivating;

(ii)

HMI had not paid realty taxes on the disputed property from
1972 onwards and never protested petitioners act of declaring the
same for realty taxation;

(iii)

HMI, represented by a certain Angela Colmenares, signed the

LTPA covering the entire landholdings or the area of 527.8308
hectares, which was then represented to be rice and corn lands;

(iv)

HMI abandoned the entire landholdings after executing the

Deed of Assignment of Rights in 1977.

WHEREFORE, the Resolutions of the Court of Appeals in CA-G.R. SP No. 73902

are REVERSED and SET ASIDE. The following EPs and the corresponding TCTsissued to
petitioners or to their successors-in-interest are hereby declared VALID and SUBSISTING:

Original Grantees

TCT/EP Nos.

1. SAMUEL ESTRIBILLO

TCT No. T-287/EP No. A037675

2. CALIXTO P. ABAYATO, JR.

TCT No. T-297/EP No. A037814

TCT No. T-829/EP No. A027293

3. RONGIE D. AGUILAR

TCT No. T-913/EP No. A027295

4. TACIANA D. AGUILAR

TCT No. T-944/EP No. A027296

5. ARTEMIO G. DE JUAN,

TCT No. T-302/EP No. A037809

6. ESTANISLAO DELA CRUZ, SR.

TCT No. T-290/EP No. A035676

7. EDGAR DUENAS

TCT No. T-949/EP No. A037658

8. MARIO P. ERIBAL

TCT No. T-952/EP No. A-

037836
9. REYNALDO C. ESENCIA

TCT No. T-950/EP No. A037844

10. RUBEN A. IBOJO

TCT No. T-928/EP No. A037873

11. SAMUEL JAMANDRE

TCT No. T-909/EP No. A159348

12. HILARION V. LANTIZA

TCT No. T-288/EP No. A037674

TCT No. T-401/EP No. A037825

13. ANSELMO LOPEZ

TCT No. T-973/EP No. A037840

14. TERESITA NACION

TCT No. T-900/EP No. A037849

15. CHARIE E. NASTOR

TCT No. T-825/EP No. A037829

16. NELSON L. NULLAS

TCT No. T-396/EP No. A037826

17. CARLITO S. OLIA

TCT No. T-910/EP No. A037673

18. ROBERTO T.PATIO

TCT No. T-912/EP No. A037860

19. ANTONIO P. ROCHA

TCT No. T-914/EP No. A037830

20. FERNANDO C. RUFINO

TCT No. T-923/EP No. A037848

21. PATERNO P. SAIN

TCT No. T-954/EP No. A037813

22. CLAUSIO S. SAYSON

TCT No. T-891/EP No. A037880

23. JOEMARIE VIBO

TCT No. T-893/EP No. A037827

24. MANUEL S. GONZAGA

TCT No. T-920/EP No. A037832

25. RAFAEL PATIO

TCT No. T-297/EP No. A037861

Costs against respondent Hacienda Maria, Inc.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice