G.R. No.
106593 November 16, 1999
NATIONAL HOUSING AUTHORITY, petitioners,
vs.
HONORABLE MAURO T. ALLARDE, Presiding Judge of the Regional Trial Court,
Branch 123, Kalookan City and SPOUSES RUFINO AND JUANITA
MATEO, respondents.
PURISIMA, J.:
Before the Court is a Petition for Certiorari under Rule 65 of the Revised Rules of
Court assailing the Order, 1 dated April 8, 1992, of Branch 123 of the Regional Trial
Court of Kalookan City, 2 in Civil Case No. C-15325, which granted the motion of the
herein private respondents for the issuance of a writ of preliminary injunction, and
the Order 3 of August 4, 1992, denying petitioner's motion for reconsideration.
The facts that matter may be culled as follows:
Lots 836 and 839, registered in the name of the Republic of the Philippines,
and covered by Transfer Certificates of Title No. 34624 and No. 34627, respectively,
were acquired by the Republic on April 2, 1938 from Philippine Trust
Company. 4 Said lots form part of the Tala Estate in Bagong Silang, Kalookan
City, which, on April 26, 1971, was reserved by Proclamation No. 843 for, among
others, the housing programs of the National Housing Authority.
According to private respondent Rufino Mateo, he had lived in the disputed
lots since his birth in 1928. In 1959, he started farming and working on a six-
hectare portion of said lots, after the death of his father who had cultivated a
thirteen-hectare portion of the same lots. 5
On September 1, 1983, the National Housing Authority notified the respondent
spouses of the scheduled development of the Tala Estate including the lots in
question, warning them that it would not be responsible for any damage
which may be caused to the crops planted on the said lots. 6
In 1989, private respondent Rufino Mateo filed with the Department of
Agrarian Reform a petition for the award to them of subject disputed lots
under the Comprehensive Agrarian Reform Program (CARP). 7
In January 1992, in pursuance of the implementation of Proclamation No. 843,
petitioner caused the bulldozing of the ricefields of private respondents,
damaging the dikes and irrigations thereon, in the process.
On March 18, 1992, the respondent spouses, relying on their claim that subject
lots are agricultural land within the coverage of the CARP, 8 brought before
the respondent Regional Trial Court a complaint for damages with prayer for
a writ of preliminary injunction, to enjoin the petitioner from bulldozing
further and making constructions on the lots under controversy. Petitioner
traversed such complaint, contending that the said lots which were previously
reserved by Proclamation No. 843 for housing and resettlement purposes, are not
covered by the CARP as they are not agricultural lands within the definition and
contemplation of Section 3 (c) of R.A. No. 6657. 9
On April 8, 1992, the respondent Court issued its assailed Order granting
private respondents' prayer for a writ of preliminary injunction; opining and
ruling thus:
xxx xxx xxx
The Court, after considering the testimony of herein plaintif
Rufino Mateo as well as the Agrarian Reform Officer, Danilo
San Gil, that the herein plaintifs have been occupying the
subject property and actual tillers/farmers of the land owned
by the government and registered in the name of, and
administered by, the NHA, the land being an agricultural land
and is, therefore, covered by the Comprehensive Agrarian
reform Program (CARP), is of the opinion that in order to
maintain the status quo of the subject property that the
aforesaid prayer for the issuance of the said writ should be, as
it is hereby, GRANTED.
1
WHEREFORE, upon the filing by the herein plaintifs of a bond,
in the amount of P5,000.00 duly approved by this Court, let a
writ of preliminary injunction be immediately issued
restraining the defendants herein from bulldozing and making
any constructions on the land farmed and tilled by plaintifs
located in Phase IX, Bagong Silang, Kalookan City, designated
as lot 836 of the Tala Estate and of dispossessing them of said
land, or until further orders by this Court.
SO ORDERED 10
Dissatisfied therewith, the petitioner presented a Motion for Reconsideration,
pointing out that the preliminary injunction thus issued is a blatant violation of P.D.
No. 1818, which proscribes the issuance of injunctive writs against the execution or
implementation of government infrastructure projects. But on August 4, 1992, the
said motion was denied by respondent Court's second Order under attack.
Undaunted, petitioner found its way to this Court via the Petition under
consideration, theorizing that:
I.
RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN RENDERING HIS
ORDER OF APRIL 8, 1992 GRANTING RESPONDENT'S SPOUSES'
APPLICATION FOR PRELIMINARY INJUCNTION AND ISSUING
THE WRIT OF PRELIMINARY INJUNCTION DATED APRIL 15,
1992, BECAUSE HE HAD NO JURISDICTION TO ISSUE IT AND
THEY ARE NOT ENTITLED TO IT.
II.
RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN RENDERING HIS
ORDER OF AUGUST 4, 1992 DENYING PETITIONER'S MOTION
FOR RECONSIDERATION AND ADDENDUM THERETO ON THE
FINDING THAT THE GROUNDS RAISED THEREIN ARE
EVIDENCIARY IN NATURE, DESPITE THE FACT THAT THEY ARE
ALL SETTLED LEGAL QUESTIONS. 11
As a rule, direct recourse to this Court is not allowed unless there are special or
important grounds for the issuance of extra-ordinary writs. 12 In the case of Garcia
vs. Burgos, 13 where pure questions of law were raised, this Court, mindful of P.D.
No. 1818, entertained a direct invocation of its jurisdiction to issue extraordinary
writs, realizing the serious consequences of delay in essential government
projects. 14 So also, in Republic vs. Silverio, 15 a similar case involving government
infrastructure projects, the Court Took cognizance of an original action
for Certiorariagainst a Regional Trial Court.
In light of the foregoing, the Court believes, and so holds, that the present case
merits consideration by the Court. To the end that the prosecution and progress of
government projects vital to the national economy be not disrupted or hampered,
this Court should pass upon and resolve the questions of law raised by the
petitioner.
The pivotal issues for resolution here are: 1) Whether or not the Compressive
Agrarian Reform Law (CARL) covers government lands reserved for specific public
purposes prior to the efectivity of said law; and 2) Whether or not housing, plants
and resettlements are "infrastructure projects" within the contemplation of P.D. No.
1818.
The petition is impressed with merit.
In Natalia Realty, Inc. vs. Department of Agrarian Reform, 16 the Court
succinctly held that lands reserved for, or converted to, non-agricultural uses
by government agencies other than the Department of Agrarian Reform, prior
to the effectivity of Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), are not considered and treated
as agricultural lands and therefore, outside the ambit of said law, 17 on the
basis of the following disquisition:
. . . Sec. 4 of R.A. 6657 provides that the CARL shall "cover,
regardless of tenurial arrangement and commodity produced,
all public and private agricultural lands." As to what
 constitutes "agricultural land," it is referred to as "lands environs, . . . ." 25 are "infrastructure projects". The various plants and
devoted to agricultural activity as defined in this Act and installations, staf and pilot housing development projects, and
not classified as mineral, forest, residential, commercial or resettlement sites related to an integrated social and economic
industrial land. The deliberations of the Constitutional development of the entire estate are construction projects forming part
Commission confirm this limitation. "Agricultural lands" are of the government capital investment, undertaken in compliance with the
mandate of the Constitution for the state to embark upon a continuing
only those lands which are "arable and suitable
program of urban land reform and housing envisioned to provide at
agricultural lands" and "do not include commercial,
afordable cost decent housing and basic services to the unprivileged and
industrial and residential lands".
homeless in urban centers and resettlement areas. 26
Based on the foregoing, it is clear that the undeveloped
The questioned Orders of respondent Court (which is bound to follow P.D. No.
portions of the Antipolo Hills Subdivision cannot in any
1818), 27 enjoining or preventing the implementation of subject housing and
language be considered as "agricultural lands." These lots
resettlement projects under the administration of the National Housing Authority,
were intended for residential use. They ceased to be
are repugnant to Presidential Decree No. 1818. Well-settled to the point of being
agricultural lands upon approval of their inclusion in the
elementary is the doctrine that "before a writ of preliminary injunction may issue,
Lungsod Silangan Reservation . . . . 18
there must be a clear showing by the complaint of a right to be protected" and that
Thus, since as early as April 26, 1971, the Tala Estate (including the disputed the acts against which the writ is to be directed infringe such right. 28 Here, it is
lots) was reserved, inter alia, under Presidential Proclamation No. 843, for the decisively clear that the private respondents have no right to the relief sought for.
housing program of the National Housing Authority, the same has been Premises studiedly viewed in proper perspective, the Court is of the irresistible
categorized as not being devoted to the agricultural activity contemplated by finding and conclusion that the respondent Court gravely abused its discretion in
Section 3 (c) of R.A. No. 6657, 19 and is, therefore, outside the coverage of issuing the challenged Orders in Civil Case No. C-15325.
the CARL. Verily, the assailed Orders of the respondent Court declaring the
WHEREFORE, the petition is GRANTED; the Orders, dated April 8, 1992 and August 4,
lots under controversy as "agricultural land" and restraining the petitioner
1992, respectively, of the Regional Trial Court of Kalookan City, in Civil Case No. C-
from involving the same in its housing project thereon, are evidently bereft of
15325 are hereby SET ASIDE; and the writ of preliminary injunction issued by virtue
any sustainable basis. thereof DISSOLVED. Costs against the private respondents.
Sec. 1 of Presidential Decree No. 1818, provides: SO ORDERED.
Sec. 1. No court in the Philippines shall have jurisdiction to Melo, Vitug and Gonzaga-Reyes, JJ., concur.
issue any restraining order, preliminary injunction, or
preliminary mandatory injunction in any case, dispute, or Panganiban, J., in the result.
controversy involving an infrastructure project, or a mining,
fishery, forest or other natural resource development project
of the government, or any public utility operated by the
government, including among others public utilities for the
transport of the goods or commodities, stevedoring and
arrastre contracts, to prohibit any person or persons, entity or
government official from proceeding with, or continuing the
execution or implementation of any such project, or the
operation of such public utility, or pursuing any lawful activity
necessary for such execution, implementation or operation.
(Emphasis supplied)

Clearly, the aforecited provision of law in point prohibits the Courts of the
land from issuing injunctive writs against the implementation or
execution of government infrastructure projects. 20

Untenable is private respondents' contention that the housing and resettlement

projects at stake are not infrastructure projects within the purview of Presidential
Decree No. 1818. 21

As regards the definition of infrastructure projects, the Court stressed in Republic

of the Philippines vs. Salvador Silverio and Big Bertha
Construction: 22

The term "infrastructure projects" means "construction,

improvement and rehabilitation of roads, and bridges,
railways, airports, seaports, communication facilities,
irrigation, flood control and drainage, water supply and
sewage systems, shore protection, power facilities,
national buildings, school buildings, hospital buildings,
and other related construction projects that form part of
the government capital
investment. 23

Applying the principle ejusdem generis, the Court is of the view, and so
holds, that the government projects involved "(2) For the various plants
and installations of the National Housing Corporation, for its future
expansion and for its staf and pilot housing development," 24 and "(5)
For housing, resettlement sites and other uses necessary and related to
an integrated social and economic development of the entire estate and

2
G.R. No. L-105586 December 15, 1993
REMIGIO ISIDRO, petitioner,
vs.
THE HON. COURT OF APPEALS (SEVENTH DIVISION) AND NATIVIDAD
GUTIERREZ, respondents.
Joventino A. Cornista for petitioner.
Yolanda Quisumbing-Javellana & Associates for private respondent.
PADILLA, J.:
This is a petition for review on certiorari of the decision * of the respondent Court of
Appeals dated 27 February 1992 in CA-G.R. SP No. 26671 ordering petitioner to
vacate the land in question and surrender possession thereof to the private
respondent; and its 21 May 1992 resolution denying petitioner's motion for
reconsideration for lack of merit.
The facts which gave rise to this petition are as follows:
Private respondent Natividad Gutierrez is the owner of a parcel of land with an area
of 4.5 hectares located in Barrio Sta. Cruz, Gapan, Nueva Ecija. In 1985, Aniceta
Garcia, sister of private respondent and also the overseer of the latter, allowed
petitioner Remigio Isidro to occupy the swampy portion of the abovementioned
land, consisting of one (1) hectare, in order to augment his (petitioner's) income to
meet his family's needs. The occupancy of a portion of said land was subject top the
condition that petitioner would vacate the land upon demand. Petitioner occupied
the land without paying any rental and converted the same into a fishpond.
In 1990, private respondent through the overseer demanded from petitioner the
return of the land, but the latter refused to vacate and return possession of said
land, claiming that he had spent efort and invested capital in converting the same
into a fishpond.
A complaint for unlawful detainer was filed by private respondent against petitioner
before the Municipal Trial Court (MTC) of Gapan, Nueva Ecija which was docketed as
Civil Case No. 4120. Petitioner set up the following defenses: (a) that the complaint
was triggered by his refusal to increase his lease rental; (b) the subject land is a
fishpond and therefore is agricultural land; and (c) that lack of formal demand to
vacate exposes the complaint to dismissal for insufficiency of cause of action.1
Based on an ocular inspection of the subject land, the trial court found that the land
in question is a fishpond 2 and, thus, in a decision dated 30 May 1991, the said trial
court dismissed the complaint, ruling that the land is agricultural and therefore the
dispute over it is agrarian which is under the original and exclusive jurisdiction of the
courts of agrarian relations as provided in Sec. 12(a) of Republic Act No. 946 (now
embodied in the Revised Rules of Procedure of the Department of Agrarian Reform
Adjudication Board).3
An appeal was filed by private respondent before the Regional Trial Court (RTC) of
Gapan, Nueva Ecija, docketed as Civil Case No. 889. In due course, the RTC rendered
a decision on 5 November 1991 concurring with the findings of the MTC and
affirming in toto the trial court's decision.
The RTC decision held that:
Even conceding for the sake of argument that the defendant-
appellee was allowed by the plaintif-appellant, through her
sister Aniceta Garcia (her administratrix over the land in
question) to occupy and use the landholding in question on
condition that the defendant would vacate the same upon
demand of the owner or plaintif herein, without paying any
rental either in cash or produce, under these facts there was a
tenurial arrangement, within the meaning of Sec. 3(d) of RA
6657, thereby placing the dispute involved in this case within
the jurisdiction of the DARAB. Perhaps, it would be diferent if
the defendant was merely a trespasser, without any right
whatsoever, when he entered and occupied the subject
landholding. The defendant, as a matter of fact, was a legal
possessor of the land in question and therefore to determine
his rights and obligations over the said property, the DARAB is
the proper forum for such issue.4
3
Not satisfied with the decision of the RTC, private respondent appealed to the
respondent Court of Appeals and the appeal was docketed as CA-G.R. SP No. 26671.
On 27 February 1992, as earlier stated, the respondent Court of Appeals reversed
and set aside the decision of the RTC, ordering petitioner to vacate the parcel of land
in question and surrender possession thereof to private respondent, and to pay
private respondent the sum of P5,000.00 as and for attorney's fees and expenses of
litigation.5
The respondent Court of Appeals ruled that:
The agrarian dispute over which the DAR may have jurisdiction
by virtue of its quasi-judicial power is that which involves
tenurial arrangements, whether leasehold, tenancy,
stewardship or otherwise, over lands devoted to agriculture.
Tenurial arrangement is concerned with the act or manner of
putting into proper order the rights of holding a piece of
agricultural land between the landowner and the farmer or
farmworker.
In the case at bar, there can be no dispute that between the
parties herein there is no tenurial arrangement, whether
leasehold, tenancy, stewardship or otherwise, over the land in
dispute. Other than his bare allegation in the Answer with
Counterclaim, and his affidavit, private respondent has not
shown prima facie that he is a tenant of the petitioner. The
affidavits of his witnesses Antonio Samin and Daniel Villareal
attest to the fact that they acted as mediators in the dispute
between the parties herein sometime in October 1990, but no
settlement was arrived at, and that the subject land is a
fishpond. To the same efect is the affidavit of Feliciano Garcia.
Absent any prima facie proof that private respondent has a
tenancy relationship with petitioner, the established fact is
that private respondent is possessing the property in dispute
by mere tolerance, and when such possession ceased as such
upon demand to vacate by the petitioner, private respondent
became a squatter in said land. We hold that the Municipal
Trial Court of Gapan, Nueva Ecija has jurisdiction over the
unlawful detainer case.6
Petitioner moved for reconsideration of the foregoing decision, but, also as earlier
stated, it was denied in a resolution dated 21 May 19927 for lack of merit.
Hence, this petition for review under Rule 45 of the Rules of Court.
Petitioner raises the following issue:
WHETHER OR NOT THE MUNICIPAL COURT HAS THE
JURISDICTION IN THIS CASE AND WHETHER THE PUBLIC
RESPONDENT COULD LEGALLY EJECT THE PETITIONER
CONSIDERING THE FOLLOWING:
1. THAT THE SUBJECT IS A FISHPOND AND UNDER THE LAW
AND JURISPRUDENCE FISHPONDS ARE CLASSIFIED AS
AGRICULTURAL LANDS;
2. THAT BEING AN AGRICULTURAL LAND THE SAME IS
GOVERNED BY OUR TENANCY LAWS WHERE RULE 70 OF THE
RULES OF COURT CANNOT BE SIMPLY APPLIED; AND
3. THAT UNDER THE RULES OF THE DEPARTMENT OF
AGRARIAN REFORM ADJUDICATION BOARD, THE
DETERMINATION OF WHETHER A PERSON WORKING ON A
FISHPOND IS A TENANT OR NOT IS CLEARLY WITHIN THE
EXCLUSIVE JURISDICTION OF THE DARAB.8
The petition is devoid of merit. We hold for the private respondent.
It is basic whether or not a court has jurisdiction over the subject matter of an action
is determined from the allegations of the complaint. As held in Multinational Village
Homeowners' Association, Inc., vs. Court of Appeals, et al.:9
Jurisdiction over the subject-matter is determined upon the
allegations made in the complaint, irrespective of whether the
plaintif is entitled to recover upon the claim asserted therein
— a matter resolved only after and as a result of the trial.
Neither can the jurisdiction of the court be made to depend
 upon the defenses made by the defendant in his answer or
motion to dismiss. If such were the rule, the question of
jurisdiction would depend almost entirely upon the defendant.
In her complaint before the court a quo, private respondent stated that she is the
owner of a parcel of land situated in Barrio Sta. Cruz, Gapan, Nueva Ecija, which
petitioner is illegally occupying; that petitioner has taken advantage of the tolerance
of her (private respondent's) sister in allowing him to occupy the land on the
condition that he (petitioner) would vacate the land upon demand. Because of
petitioner's refusal to vacate the land, private respondent's remedy, as owner of said
land, was to file an action for unlawful detainer with the Municipal Trial Court.
In his answer to the complainant, petitioner alleged that the land involved in the
dispute is an agricultural land and hence, the case must be filed with the Court of
Agrarian Relations (not the MTC). Moreover, petitioner contended that it was his
refusal to increase his lease rental (implying tenancy) that prompted the private
respondent to sue him in court. 10
It is well settled jurisprudence that a court does not lose its jurisdiction over an
unlawful detainer case by the simple expedient of a party raising as a defense
therein the alleged existence of a tenancy relationship between the parties. 11 The
court continues to have the authority to hear the evidence for the purpose precisely
of determining whether or not it has jurisdiction. And upon such hearing, if tenancy
is shown to be the real issue, the court should dismiss the case for lack of
jurisdiction. 12
The MTC dismissed the unlawful detainer complaint primarily on the ground that
the subject land is agricultural and therefore the question at issue is agrarian. In this
connection, it is well to recall that Section 1, Rule II of the Revised Rules of
Procedure, 13 provides that the Agrarian Reform Adjudication Board shall have
primary jurisdiction, both original and appellate, to determine and adjudicate all
agrarian disputes, cases, controversies, and matters or incidents involving the
implementation of the Comprehensive Agrarian Reform Program under Republic Act
No. 6657, Executive Order Nos. 229, 228 and 129-A, Republic Act No. 3844 as
amended by Republic Act No. 6389, Presidential Decree No. 27 and other agrarian
laws and their implementing rules and regulations.
An agrarian dispute refers to any controversy relating to tenurial arrangements,
whether leasehold, tenancy, stewardship or otherwise, over lands devoted to
agriculture, including disputes concerning farmworkers associations or
representation of persons in negotiating, fixing, maintaining, changing or seeking to
arrange terms and conditions of such tenurial arrangements. It includes any
controversy relating to compensation of lands acquired under Republic Act No. 6657
and other terms and conditions of transfer of ownership from landowners to
farmworkers, tenants and other agrarian reform beneficiaries, whether the
disputants stand in the proximate relation of farm operator and beneficiary,
landowner and tenant, or lessor or lessee. 14
It is irrefutable in the case at bar that the subject land which used to be an idle,
swampy land was converted by the petitioner into a fishpond. And it is settled that a
fishpond is an agricultural land. An agricultural land refers to the land devoted to
agricultural activity as defined in Republic Act No. 6657 15 and not classified as
mineral, forest, residential, commercial or industrial land. 16 Republic Act No. 6657
defines agricultural activity as 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
judicial. 17
But a case involving an agricultural land does not automatically make such case an
agrarian dispute upon which the DARAB has jurisdiction. The mere fact that the land
is agricultural does not ipso facto make the possessor an agricultural lessee of
tenant. The law provides for conditions or requisites before he can qualify as one
and the land being agricultural is only one of
them. 18 The law states that an agrarian dispute must be a controversy relating to a
tenurial arrangement over lands devoted to agriculture. And as previously
mentioned, such arrangement may be leasehold, tenancy or stewardship.
Tenancy is not a purely factual relationship dependent on what the alleged tenant
does upon the land. It is also a legal relationship. The intent of the parties, the
understanding when the farmer is installed, and their written agreements, provided
these are complied with and are not contrary to law, are even more important. 19
4
The essential requisites of a tenancy relationship are: (1) the parties are the
landowner and the tenant; (2) the subject matter is agricultural land; (3) there is
consent; (4) the purpose is agricultural production; (5) there is personal cultivation
by the tenant; and (6) there is a sharing of harvests between the parties. All these
requisites must concur in order to create a tenancy relationship between the
parties. The absence of one does not make an occupant of a parcel of land, or a
cultivator thereof, or a planter thereon, a de jure tenant. Unless a person establishes
his status as a de jure tenant, he is not entitled to security of tenure nor is he
covered by the Land Reform Program of the government under existing tenancy laws
(Caballes v. DAR, et al., G.R. No. 78214, December 5, 1988). 20
Furthermore, an agricultural lessee as defined in Sec. 116(2) of Republic Act No.
3844, is a person who, by himself and with the aid available from within his
immediate farm household, cultivates the land belonging to, or possessed by,
another with the latter's consent for purposes of production, for a price certain in
money or in produce or both. An agricultural lessor, on the other hand, is a natural or
judicial person who, either as owner, civil law lessee, usufructuary, or legal possessor
lets or grants to another the cultivation and use of his land for a price certain. 21
Based on the statutory definitions of a tenant or a lessee, it is clear that there is no
tenancy or agricultural/leasehold relationship existing between the petitioner and
the private respondent. There was no contract or agreement entered into by the
petitioner with the private respondent nor with the overseer of the private
respondent, for petitioner to cultivate the land for a price certain or to share his
harvests. Petitioner has failed to substantiate his claim that he was paying rent for
the use of the land.
Whether or not private respondent knew of the conversion by petitioner of the idle,
swampy land into a fishpond is immaterial in this case. The fact remains that the
existence of all the requisites of a tenancy relationship was not proven by the
petitioner. And in the absence of a tenancy relationship, the complaint for unlawful
detainer is properly within the jurisdiction of the Municipal Trial Court, as provided
in Sec. 33 of Batas Pambansa Blg. 129.
Having established that the occupancy and possession by petitioner of the land in
question is by mere tolerance, private respondent had the legal right to demand
upon petitioner to vacate the land. And as correctly ruled by the respondent
appellate court:
. . . . His (petitioner's) lawful possession became illegal when
the petitioner (now private respondent) through her sister
made a demand on him to vacate and he refused to comply
with such demand. Such is the ruling in Pangilinan vs. Aguilar,
43 SCRA 136, 144, wherein it was held:
While in possession by tolerance is
lawful, such possession becomes illegal
upon demand to vacate is made by the
owner and the possessor by tolerance
refuses to comply with such demand
(Prieto vs. Reyes, 14 SCRA 432; Yu vs. De
Lara, 6 SCRA 786, 788; Amis vs. Aragon,
L-4684, April 28, 1957). A person who
occupies the land of another at the
latter's tolerance or permission, without
any contract between them, is
necessarily bound by an implied promise
that he will vacate upon demand, failing
which a summary action for ejectment is
the proper remedy against him (Yu vs.
De Lara, supra)." 22
The present case should be distinguished from the recent case of Bernas vs. The
Honorable Court of Appeals. 23 In the Bernas case, the land occupant (Bernas) had a
production-sharing agreement with the legal possessor (Benigno Bito-on) while the
records in this case fail to show that herein petitioner (Isidro) was sharing the
harvest or paying rent for his use of the land. Moreover, the agreement between the
overseer (Garcia) and herein petitioner was for petitioner to occupy and use the
land by mere tolerance of the owner. Petitioner Isidro failed to refute that Garcia
allowed him to use the land subject to the condition that petitioner would vacate it
upon demand. In the Bernas case, the petitioner (Bernas) was able to establish the
existence of an agricultural tenancy or leasehold relationship between him and the
legal possessor. The evidence in this case, on the other hand, fails to prove that
petitioner Isidro, was an agricultural tenant or lessee.

WHEREFORE, the petition is DENIED. The questioned decision and resolution of the
Court of Appeals are hereby AFFIRMED. Costs against the petitioner.

SO ORDERED.

Narvasa, C.J., Regalado, Nocon and Puno, JJ., concur.

5
G.R. No. 194818 June 9, 2014
CHARLES BUMAGAT, JULIAN BACUDIO, ROSARIO PADRE, SPOUSES ROGELIO and
ZOSIMA PADRE, and FELIPE DOMINCIL, Petitioners,
vs.
REGALADO ARRIBAY, Respondent.
DECISION
DEL CASTILLO, J.:
A case involving agricultural land does not immediately qualify it as an
agrarian dispute. The mere fact that the land is agricultural does not ipso
facto make the possessor an agricultural lessee or tenant; there are conditions
or requisites before he can qualify as an agricultural lessee or tenant, and the
subject matter being agricultural land constitutes simply one condition. In
order to qualify as an agrarian dispute, there must likewise exist a tenancy
relation between the parties.
This Petition for Review on Certiorari1 seeks to set aside the February 19, 2010
Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 101423, entitled "Regalado
Arribay, Petitioner, versus Charles Bumagat, Julian Bacudio, Rosario Padre, Spouses
Rogelio and Zosima Padre, and Felipe Domincil," as well as its November 9, 2010
Resolution3 denying reconsideration of the assailed judgment.
Factual Antecedents
Petitioners are the registered owners, successors-in-interest, or possessors of
agricultural land, consisting of about eight hectares, located in Bubog, Sto.
Tomas, Isabela Province, to wit:
1. Charles Bumagat (Bumagat) – 14,585 square meters covered by
Transfer Certificate of Title No. (TCT) 014557;4
2. Julian Bacudio (Bacudio) – 14,797 square meters covered by TCT
014556;5
3. Rosario Padre – 14,974 square meters covered by TCT 0145546 in the
name of Dionicio Padre;7
4. Spouses Rogelio and Zosima Padre – 6,578 square meters covered by
TCT 0145618 in the name of Ireneo Padre;9
5. Spouses Rogelio and Zosima Padre – 6,832 square meters covered by
TCT 014560 in the name of their predecessor-in-interest Felix Pacis;10
6. Felipe Domincil – 14,667 square meters covered by TCT 014558;11 and
7. Felipe Domincil – 7,319 square meters.12
The certificates of title to the above titled properties were issued in 1986
pursuant to emancipation patents.13
On July 19, 2005, petitioners filed a Complaint14 for forcible entry against
respondent before the 2nd Municipal Circuit Trial Court (MCTC) of Cabagan-Delfin
Albano, Isabela. The case was docketed as Special Civil Action No. 475 (SCA 475). In
an Amended Complaint,15 petitioners alleged that on May 9, 2005, respondent –
with the aid of armed goons, and through the use of intimidation and threats of
physical harm – entered the above-described parcels of land and ousted them from
their lawful possession; that respondent then took over the physical possession and
cultivation of these parcels of land; and that petitioners incurred losses and injuries
by way of lost harvests and other damages. Petitioners thus prayed for injunctive
relief, actual damages in the amount of not less than ₱40,000.00 for each cropping
season lost, ₱30,000.00attorney’s fees, and costs.
Respondent filed a Motion to Dismiss,16 claiming that the subject properties
are agricultural lands – which thus renders the dispute an agrarian matter and
subject to the exclusive jurisdiction of the Department of Agrarian Reform
Adjudication Board (DARAB). However, in a January 30, 2006 Order,17 the MCTC
denied the motion, finding that the pleadings failed to show the existence of
a tenancy or agrarian relationship between the parties that would bring their
dispute within the jurisdiction of the DARAB. Respondent’s motion for
reconsideration was similarly rebufed.18
6
Respondent filed his Amended Answer with Counterclaim,19 alleging among
others that petitioners’ titles have been ordered cancelled in a December 1,
2001 Resolution20 issued by the Department of Agrarian Reform, Region 2 in
Administrative Case No. A0200 0028 94; that he is the absolute owner of
approximately 3.5 hectares of the subject parcels of land, and is the
administrator and overseer of the remaining portion thereof, which belongs
to his principals Leonardo and Evangeline Taggueg (the Tagguegs); that
petitioners abandoned the subject properties in 1993, and he planted the same with
corn; that in 2004, he planted the land to rice; that he sued petitioners before the
Municipal Agrarian Reform Office (MARO) for non-payment of rentals since 1995;
and that the court has no jurisdiction over the ejectment case, which is an agrarian
controversy.
The parties submitted their respective Position Papers and other evidence.21
During the proceedings before the MCTC, respondent presented certificates
of title, supposedly issued in his name and in the name of the Tagguegs in
2001, which came as a result of the supposed directive in Administrative Case
No. A0200 0028 94 to cancel petitioners’ titles. As claimed by respondent, the
subject parcels of land formed part of a 23.663-hectare property owned by one
Romulo Taggueg, Sr. (Romulo Sr.) and covered by Original Certificate of Title No.
(OCT) P-4835, which was placed under the Operation Land Transfer Program
pursuant to Presidential Decree No. 2722 (PD 27). Petitioners supposedly became
farmer-beneficiaries under the program, and the parcels of land were
awarded to them.
Meanwhile, Romulo Sr. died and his heirs instituted Administrative Case No. A0200
0028 94 to cancel petitioners’ titles. The heirs won the case, and later on new titles
over the property were issued in their favor. In turn, one of the heirs transferred his
title in favor of respondent.
Ruling of the Municipal Circuit Trial Court
On April 12, 2007, a Decision23 was rendered by the MCTC in SCA 475, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintifs and against the
defendant as follows:
1. Ordering the defendant or any person or persons acting in his
behalf to vacate the entire SEVENTY NINE THOUSAND SEVEN
HUNDRED FIFTY TWO (79,752)[-]SQUARE METERS, property
described under paragraph 2 of the amended complaint and to
peacefully surrender the physical possession thereof in favor of each of
the plaintifs;
2. Ordering the defendant to pay each of the plaintiffs representing
actual damages as follows:
o Charles Bumagat …………………... ₱109,390.00
o Julian Bacudio …………………….... ₱110,980.00
o Rosario Padre ……………………… ₱112,305.00
o Sps. Rogelio and ZosimaPadre ..... ₱100,575.00
o Felipe Domincil …………………..… ₱165,429.00
3. Ordering the defendant to pay plaintifs representing the Attorney’s
fees in the amount of ₱10,000.00.
4. Ordering the defendant to pay costs of the suit.
SO ORDERED.24
Essentially, the MCTC held that based on the evidence, petitioners were in actual
possession of the subject parcels of land, since respondent himself admitted that he
brought an action against petitioners before the MARO to collect rentals which have
remained unpaid since 1995 – thus implying that petitioners, and not respondent,
were in actual possession of the land, and belying respondent’s claim that he took
possession of the property in 1993 when petitioners supposedly abandoned the
same. The court added that petitioners’ claims were corroborated by the statements
of other witnesses – farmers of the adjoining lands – declaring that petitioners have
been in unmolested and peaceful possession of the subject property until May 9,
2005,when they were dispossessed by respondent.
The MCTC added that it had jurisdiction over the case since there is no
tenancy relationship between the parties, and the pleadings do not allege
such fact; that respondent’s own witnesses declared that the subject property
was never tenanted nor under lease to tenants.
Finally, the MCTC held that while respondent and his principals, the Tagguegs, have
been issued titles covering the subject property, this cannot give respondent
"license to take the law into his own hands and unilaterally eject the plaintifs from
the land they have been tilling."25
Ruling of the Regional Trial Court
Respondent appealed26 the MCTC Decision before the Regional Trial Court
(RTC), insisting that the DARAB has jurisdiction over the case; that he has been
in actual possession of the subject land since 2003; that while petitioners hold
certificates of title to the property, they never acquired ownership over the same for
failure to pay just compensation therefor; that petitioners’ titles have been ordered
cancelled, and they reverted to the status of mere tenants; and that the MCTC erred
in granting pecuniary awards to petitioners.
On October 15, 2007, the RTC issued its Order27 denying the appeal for lack
of merit and affirming in toto the appealed MCTC judgment. In sum, the RTC
pronouncement echoed the MCTC findings that no tenancy or any other
agrarian relationship existed between the parties, nor do the pleadings bear
out such fact; that the evidence preponderantly shows that petitioners were in
actual possession of the subject land; and that petitioners were entitled to
compensation as awarded by the court a quo.
Ruling of the Court of Appeals
Respondent went up to the CA by Petition for Review,28 assailing the Decision of the
RTC and claiming that since petitioners acquired title by virtue of PD 27, this should
by itself qualify the controversy as an agrarian dispute covered by the DARAB; that
there is no need to allege in the pleadings that he and the heirs of Romulo Sr.
acquired title to the property, in order for the dispute to qualify as an agrarian
dispute; that petitioners’ titles were ordered cancelled in Administrative Case No.
A0200 0028 94; that he has been in possession of the property since 2003; and that
the trial court erred in granting pecuniary awards to petitioners.
On February 19, 2010, the CA issued the assailed Decision, which held thus:
IN VIEW WHEREOF, the petition is GRANTED. The assailed Order of the Regional
Trial Court of Cabagan, Isabela, Branch 22, dated October 15, 2007, affirming in
toto the previous Decision of the MCTC of Cabagan-Sto. Tomas, Isabela is hereby
REVERSED and SET ASIDE. Civil Case No. 475, entitled "Charles Bumagat, Julian
Bacudio, Rosario Padre, Sps. Rogelio and Zosima Padre and Felipe Domincil versus
Regalado Arribay" is DISMISSED.
SO ORDERED.29
In reversing the trial court, the CA agreed that the parties’ dispute fell under
the jurisdiction of the DARAB since petitioners’ titles were obtained pursuant
to PD 27, and under the 1994 DARAB rules of procedure, cases involving the
issuance, correction and cancellation of Certificates of Land Ownership Award
(CLOAs) and Emancipation Patents (EPs) which are registered with the Land
Registration Authority fall under DARAB jurisdiction.30 The appellate court
added that the Complaint for ejectment attacked the certificates of title issued in
favor of respondent and the Tagguegs because the complaint prayed for –
x x x the annulment of the coverage of the disputed property within the Land
Reform Law which is but an incident involving the implementation of the CARP.
These are matters relating to terms and conditions of transfer of ownership from
landlord to agrarian reform beneficiaries over which DARAB has primary and
exclusive original jurisdiction, pursuant to Section 1(f), Rule II, DARAB New Rules of
Procedure.31
Petitioners moved for reconsideration, but in a November 9, 2010 Resolution, the
CA stood its ground. Hence, the present recourse.
Issue
Petitioners raise the following issue in this Petition:
7
WITH ALL DUE RESPECT, THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE
MCTC HAD NO JURISDICTION OVER THE COMPLAINT OF THE (PETITIONERS),
INSTEAD IT IS THE DARAB THAT HAS JURISDICTION, SINCE THE COMPLAINT
ESSENTIALLY PRAYS FOR THE ANNULMENT OFTHE COVERAGE OF THE DISPUTED
PROPERTY WITH THE LAND REFORM LAW WHICH IS BUT AN INCIDENT INVOLVING
THE IMPLEMENTATION OF THE CARP.32
Petitioners’ Arguments
In their Petition and Reply,33 petitioners seek a reversal of the assailed CA
dispositions and the reinstatement of the MCTC’s April 12, 2007 Decision, arguing
that their Complaint for ejectment simply prays for the recovery of de facto
possession from respondent, who through force, threat and intimidation evicted
them from the property; that there is no agrarian reform issue presented
therein; that the fact that the controversy involved agricultural land does not
ipso facto make it an agrarian dispute; that the parties’ dispute does not
relate to any tenurial arrangement over agricultural land; and that quite the
contrary, the parties are strangers to each other and are not bound by any
tenurial relationship, whether by tenancy, leasehold, stewardship, or
otherwise.34
Petitioners add that when certificates of title were issued in their favor, they ceased
to be tenant-tillers of the land but became owners thereof; that full ownership over
the property was acquired when emancipation patents were issued in their
favor;35 that when their certificates of title were issued, the application of the
agrarian laws was consummated; and that as owners of the subject property, they
were thus in peaceful and adverse physical possession thereof when respondent
ousted them by force, threat and intimidation. Petitioners argue further that
respondent is not the former landowner, nor the representative thereof; he is
merely an absolute stranger who came into the picture only later.
Finally, petitioners argue that it was erroneous for the CA to rule that in seeking to
evict respondent, they were in efect mounting an attack on the latter’s title and
thus their Complaint in efect sought the "the annulment of the coverage of the
disputed property within the Land Reform Law which is but an incident involving the
implementation of the CARP,"36 which thus relates to "terms and conditions of
transfer of ownership from landlord to agrarian reform beneficiaries over which
DARAB has primary and exclusive original jurisdiction x x x."37
Respondent’s Arguments
Seeking the denial of the Petition, respondent in his Comment38 insists that
the ejectment case is intertwined with the CARP Law,39 since petitioners’
titles were obtained by virtue of the agrarian laws, which thus places the
controversy within the jurisdiction of the DARAB; that under the 2003 DARAB
Rules of Procedure, specifically Rule II, Section 1, paragraph 1.440 thereof, cases
involving the ejectment and dispossession of tenants and/or leaseholders fall within
the jurisdiction of the DARAB; that under such rule, the one who ejects or
dispossesses the tenant need not be the landowner or lessor, and could thus be
anybody, including one who has no tenurial arrangement with the
evicted/dispossessed tenant.
Respondent adds that with the cancellation of petitioners’ titles, they were directed
to enter into a leasehold relationship with the owners of the subject parcels of land,
or the heirs of Romulo Sr. – whose petition for exemption and application for
retention were granted and approved by the Department of Agrarian Reform,
Region 2 in Administrative Case No. A0200 0028 94 – and later, with him as
transferor and purchaser of a 3.5-hectare portion thereof.
Our Ruling
The Court grants the Petition.
In declaring that the parties’ dispute fell under the jurisdiction of the DARAB, the CA
held that respondents’ titles were obtained pursuant to PD 27, and pursuant to the
1994 DARAB rules of procedure then applicable, cases involving the issuance,
correction and cancellation of CLOAs and EPs which are registered with the Land
Registration Authority fall under DARAB jurisdiction. It added that since the
Complaint prayed for the annulment of the coverage of the disputed property under
the land reform law, which thus relates to terms and conditions of transfer of
ownership from landlord to agrarian reform beneficiaries, the DARAB exercises
jurisdiction.
What the appellate court failed to realize, however, is the fact that as between
petitioners and the respondent, there is no tenurial arrangement, not even an
implied one. As correctly argued by petitioners, a case involving agricultural
land does not immediately qualify it as an agrarian dispute. The mere fact
that the land is agricultural does not ipso facto make the possessor an
agricultural lessee or tenant. There are conditions or requisites before he can
qualify as an agricultural lessee or tenant, and the subject being agricultural
land constitutes just one condition.41 For the DARAB to acquire jurisdiction
over the case, there must exist a tenancy relation between the parties. "[I]n
order for a tenancy agreement to take hold over a dispute, it is essential to
establish all its indispensable elements, to wit: 1) that the parties are the
landowner and the tenant or agricultural lessee; 2) that the subject matter of
the relationship is an agricultural land; 3) that there is consent between the
parties to the relationship; 4) that the purpose of the relationship is to bring
about agricultural production; 5) that there is personal cultivation on the part
of the tenant or agricultural lessee; and 6) that the harvest is shared between
the landowner and the tenant or agricultural lessee."42In the present case, it
is quite evident that not all of these conditions are present. For one, there is
no tenant, as both parties claim ownership over the property.
Besides, when petitioners obtained their emancipation patents and
subsequently their certificates of title, they acquired vested rights of absolute
ownership over their respective landholdings. "It presupposes that the grantee
or beneficiary has, following the issuance of a certificate of land transfer, already
complied with all the preconditions required under P.D. No. 27, and that the
landowner has been fully compensated for his property. And upon the issuance of
title, the grantee becomes the owner of the landholding and he thereby ceases to
be a mere tenant or lessee. His right of ownership, once vested, becomes fixed and
established and is no longer open to doubt or controversy."43 Petitioners "became
the owner[s] of the subject property upon the issuance of the emancipation patents
and, as such, [enjoy] the right to possess the same—a right that is an attribute of
absolute ownership."44
On the other hand, it appears that respondent obtained title through Romulo
Sr.’s heirs, whose claim to the property is by virtue of an unregistered deed of
donation in their favor supposedly executed prior to September 21, 1972. On
this basis, the heirs filed in 1993 a petition with the Department of Agrarian Reform,
Region 2 to exempt the property from coverage under PD 27, which was granted in a
December 29, 1994 Order.45 By then, or way back in 1986 petitioners had been
issued certificates of title thus, respondent’s acquisition of the property
appears questionable, considering the Court’s pronouncement in Gonzales v. Court
of Appeals,46 thus:
The sole issue to be resolved is whether the property subject of the deed of
donation which was not registered when P.D. No. 27 took efect, should be excluded
from x x x Operation Land Transfer.
Petitioners insist that the deed of donation executed by Ignacio Gonzales validly
transferred the ownership and possession of Lot 551-C which comprises an area of
46.97 hectares to his 14 grandchildren. They further assert that inasmuch as Lot
551-C had already been donated, the same can no longer fall within the purview of
P.D.No. 27, since each donee shall have a share of about three hectares only which is
within the exemption limit of seven hectares for each landowner provided under
P.D. No. 27.
Article 749 of the Civil Code provides inter alia that "in order that the donation of an
immovable may be valid, it must be made in a public document, specifying therein
the property donated and the value of the charges which the donee must satisfy."
Corollarily, Article 709 of the same Code explicitly states that "the titles of
ownership, or other rights over immovable property, which are not duly inscribed or
annotated in the Registry of property shall not prejudice third persons." From the
foregoing provisions, it may be inferred that as between the parties to a donation of
an immovable property, all that is required is for said donation to be contained in a
public document. Registration is not necessary for it to be considered valid and
effective. However, in order to bind third persons, the donation must be
registered in the Registry of Property (now Registry of Land Titles and Deeds).
Although the non-registration of a deed of donation shall not affect its
validity, the necessity of registration comes into play when the rights of third
persons are affected, as in the case at bar.
8
It is actually the act of registration that operates to convey registered land or afect
title thereto. Thus, Section 50 of Act No. 496 (Land Registration Act), as amended by
Section 51 of P.D. No. 1529 (Property Registration Decree), provides:
SEC. 51. Conveyance and other dealings by registered owner - . . . But no deed,
mortgage, lease, or other voluntary instrument, except a will purporting to convey
or afect registered land, shall take efect as a conveyance or bind the land, but shall
operate only as a contract between the parties and as evidence of authority to the
Register of Deeds to make registration.
The act of registration shall be the operative act to convey or afect the land insofar
as third persons are concerned, . . .
Further, it is an entrenched doctrine in our jurisdiction that registration in a public
registry creates constructive notice to the whole world (Olizon vs. Court of Appeals,
236 SCRA 148 [1994]). Thus, Section 51 of Act No. 496, as amended by Section 52 of
P.D. No. 1529, provides:
SEC. 52. Constructive notice upon registration - Every conveyance, mortgage, lease,
lien, attachment, order, judgment, instrument or entry afecting registered land
shall, if registered, filed or entered in the Office of the Register of Deeds for the
province or city where the land to which it relates lies, be constructive notice to all
persons from the time of such registering, filing or entering.
It is undisputed in this case that the donation executed by Ignacio Gonzales
in favor of his grandchildren, although in writing and duly notarized, has not
been registered in accordance with law. For this reason, it shall not be binding
upon private respondents who did not participate in said deed or had no
actual knowledge thereof. Hence, while the deed of donation is valid between
the donor and the donees, such deed, however, did not bind the tenants-
farmers who were not parties to the donation. As previously enunciated by this
Court, non-registration of a deed of donation does not bind other parties ignorant of
a previous transaction (Sales vs. Court of Appeals, 211 SCRA 858 [1992]). So it is of
no moment that the right of the [tenant]-farmers in this case was created by virtue
of a decree or law. They are still considered "third persons" contemplated in our
laws on registration, for the fact remains that these [tenant]-farmers had no actual
knowledge of the deed of donation.
xxxx
As a final note, our laws on agrarian reform were enacted primarily because of the
realization that there is an urgent need to alleviate the lives of the vast number of
poor farmers in our country. Yet, despite such laws, the majority of these farmers
still live on a hand-to-mouth existence. This can be attributed to the fact that these
agrarian laws have never really been efectively implemented. Certain individuals
have continued to prey on the disadvantaged, and as a result, the farmers who are
intended to be protected and uplifted by the said laws find themselves back in their
previous plight or even in a more distressing situation. This Court ought to be an
instrument in achieving a dignified existence for these farmers free from pernicious
restraints and practices, and there’s no better time to do it than now.47
When petitioners’ titles were issued in 1986, these became indefeasible and
incontrovertible. Certificates of title issued pursuant to emancipation patents
acquire the same protection accorded to other titles, and become
indefeasible and incontrovertible upon the expiration of one year from the
date of the issuance of the order for the issuance of the patent. Lands so
titled may no longer be the subject matter of a cadastral proceeding; nor can
they be decreed to other individuals.48 "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."49
For the above reasons, the Court is not inclined to believe respondent’s
contention that with the issuance of the December 29, 1994 Order of the
Department of Agrarian Reform, Region 2 in Administrative Case No. A0200
0028 94 ordering the cancellation of petitioners’ titles, the latter were
relegated to the status of mere tenants. Nor can the Court agree with the
appellate court’s observation that through the forcible entry case, petitioners
impliedly seek to exclude the property from land reform coverage; there is no
factual or legal basis for such conclusion, and no such inference could be
logically generated.1âwphi1 To begin with, petitioners acknowledge nothing
less than ownership over the property.

Likewise, for the foregoing reasons, it may be concluded that petitioners exercised
prior peaceful and uninterrupted possession of the property until the same was
interrupted by respondent’s forcible intrusion in 2005; being farmer beneficiaries
under PD 27 and finally having acquired title to the property in 1986, the Court is
inclined to believe that petitioners continued to till their landholdings without fail.
Indeed, the evidence on record indicates such peaceful and undisturbed possession,
while respondent’s claim that he entered the property as early as in 1993 remains
doubtful, in light of his own admission that he sued petitioners for the collection of
supposed rentals which they owed him since 1995. Petitioners’ witnesses further
corroborate their claim of prior peaceful possession. With regard to the portion of
the property which is not titled to petitioners but over which they exercise
possessory rights, respondent has not sufficiently shown that he has any preferential
right to the same either; the Court adheres to the identical findings of fact of the
MCTC and RTC.

Finally, respondent’s submissions are unreliable for being contradictory. In some of

his pleadings, he claims to have acquired possession over the property as early as in
1993; in others, he declares that he entered the land in 2003. Notably, while he
claimed in his Answer in the MCTC that he entered the land in 1993, he declared in
his appeal with the RTC and Petition for Review in the CA that he took possession of
the property only in 2003.50 Irreconcilable and unexplained contradictions on vital
points in respondent’s account necessarily disclose a weakness in his case.51

Regarding the award of actual damages, which respondent prominently questioned

all throughout the proceedings, this Court finds that there is sufficient basis for the
MCTC to award petitioners the total amount of ₱598,679.00 by way of actual
damages. The trial court’s findings on this score are based on the evidence
presented by the petitioners and the respective statements of their witnesses, who
themselves are farmers cultivating lands adjacent to the subject property.52

WHEREFORE, the Petition is GRANTED. The assailed February 19, 2010 Decision and
November 9, 2010 Resolution of the Court of Appeals in CAG.R. SP No. 101423 are
REVERSED and SET ASIDE. The April 12, 2007 Decision of the 2nd Municipal Circuit
Trial Court of Cabagan-Delfin Albano, Isabela in Special Civil Action No. 475 is
REINSTATED and AFFIRMED.

SO ORDERED.

9
G.R. No. 78517 February 27, 1989 On appeal to the respondent Court of Appeals, the same was sustained in its
judgment rendered on March 3, 1987, thus:
GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO RICALDE, VICENTE
RICALDE and ROLANDO SALAMAR, petitioners, WHEREFORE, finding no reversible error thereof, the decision
vs. appealed from is hereby AFFIRMED.
THE HONORABLE COURT OF APPEALS, ENRIQUE M. REYES, PAZ M. REYES and FE
M. REYES, respondents. SO ORDERED. (p. 34, Rollo)

Bureau of Agrarian Legal Assistance for petitioners. Hence, the present petition for review on certiorari.

Leonardo N. Zulueta for Enrique Reyes, et al. Adolfo S. Azcuna for private The pivotal issue is whether or not lands obtained through homestead patent are
respondents. covered by the Agrarian Reform under P.D. 27.

The question certainly calls for a negative answer.

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 court's 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, plaintifs 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.
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 life's 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 people's 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.

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, plaintifs 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.

10
G.R. No.176549 January 20, 2016
DEPARTMENT OF AGRARIAN REFORM, QUEZON CITY & PABLO
MENDOZA, Petitioners,
vs.
ROMEO C. CARRIEDO, Respondent.
DECISION
JARDELEZA, J.:
This is a Petition for Review on Certiorari1 assailing the Court of Appeals Decision
dated October 5, 20062 and Resolution dated January 10, 20073 in CA-G.R. SP No.
88935. The Decision and Resolution reversed the Order dated February 22,
20054 issued by the Department of Agrarian Reform-Central Office (DAR-CO) in
Administrative Case No. A-9999-03-CV-008-03 which directed that a 5.0001 hectare
piece of agricultural land (land) be placed under the Comprehensive Agrarian
Reform Program pursuant to Republic Act (RA) No. 6657 or the Comprehensive
Agrarian Reform Law.
The Facts
The land originally formed part of the agricultural land covered by Transfer
Certificate of Title (TCT) No. 17680,5which in turn, formed part of the total of
73.3157 hectares of agricultural land owned by Roman De Jesus (Roman).6
On May 23, 1972, petitioner Pablo Mendoza (Mendoza) became the tenant of
the land by virtue of a Contrato King Pamamuisan7 executed between him
and Roman. Pursuant to the Contrato, Mendoza has been paying twenty-five (25)
piculs of sugar every crop year as lease rental to Roman. It was later changed to Two
Thousand Pesos (P2, 000.00) per crop year, the land being no longer devoted to
sugarcane.8
On November 7, 1979, Roman died leaving the entire 73.3157 hectares to his
surviving wife Alberta Constales (Alberta), and their two sons Mario De Jesus
(Mario) and Antonio De Jesus (Antonio).9 On August 23, 1984, Antonio executed a
Deed of Extrajudicial Succession with Waiver of Right10 which made Alberta
and Mario co-owners in equal proportion of the agricultural land left by
Roman.11
On June 26, 1986, Mario sold12 approximately 70.4788 hectares to respondent
Romeo C. Carriedo (Carriedo), covered by the following titles and tax declarations,
to wit:
1. TCT No. 35055
2. (Tax Declaration) TD No. 48354
3. TCT No. 17681
4. TCT No. 56897
5. TCT No. 17680
The area sold to Carriedo included the land tenanted by Mendoza (forming
part of the area covered by TCT No. 17680). Mendoza alleged that the sale took
place without his knowledge and consent.
In June of 1990, Carriedo sold all of these landholdings to the Peoples’
Livelihood Foundation, Inc. (PLFI) represented by its president, Bernabe
Buscayno.13 All the lands, except that covered by TCT No. 17680, were
subjected to Voluntary Land Transfer/Direct Payment Scheme and were
awarded to agrarian reform beneficiaries in 1997.14
The parties to this case were involved in three cases concerning the land, to
wit:
The Ejectment Case (DARAB Case No. 163-T-90 | CAG.R. SP No. 44521 | G.R. No.
143416)
On October 1, 1990, Carriedo filed a Complaint for Ejectment and Collection of
Unpaid Rentals against Mendoza before the Provincial Agrarian Reform
Adjudication Board (PARAD) of Tarlac docketed as DARAB Case No. 163-T-90. He
subsequently filed an Amended Complaint on October 30, 1990.15
11
In a Decision dated June 4, 1992,16 the PARAD ruled that Mendoza had
knowledge of the sale, hence, he could not deny the fact nor assail the
validity of the conveyance. Mendoza violated Section 2 of Presidential Decree (PD)
No. 816,17 Section 50 of RA No. 119918 and Section 36 of RA No. 3844,19 and thus,
the PARAD declared the leasehold contract terminated, and ordered Mendoza
to vacate the premises.20
Mendoza filed an appeal with the Department of Agrarian Reform Adjudication
Board (DARAB).1âwphi1 In a Decision dated February 8, 1996,21 the DARAB
affirmed the PARAD Decision in toto. The DARAB ruled that ownership of the
land belongs to Carriedo. That the deed of sale was unregistered did not afect
Carriedo’s title to the land. By virtue of his ownership, Carriedo was subrogated to
the rights and obligation of the former landowner, Roman.22
Mendoza then filed a Petition for Review with the Court of Appeals (CA). The case
was docketed as CA-G.R. SP No. 44521. In a Decision dated September 7,
1998,23 the CA affirmed the DARAB decision in toto. The CA ruled that
Mendoza’s reliance on Section 6 of RA No. 6657 as ground to nullify the sale
between De Jesus and Carriedo was misplaced, the section being limited to
retention limits. It reiterated that registration was not a condition for the validity of
the contract of sale between the parties.24 Mendoza’s Motions for Reconsideration
and New Trial were subsequently denied.25
Mendoza thus filed a Petition for Review on Certiorari with this Court, docketed as
G.R. No. 143416. In a Resolution dated August 9, 2000,26 this Court denied the
petition for failure to comply with the requirements under Rule 45 of the
Rules of Court. An Entry of Judgment was issued on October 25, 2000.27 In effect,
the Decision of the CA was affirmed, and the following issues were settled with
finality:
1) Carriedo is the absolute owner of the five (5) hectare land;
2) Mendoza had knowledge of the sale between Carriedo and Mario De
Jesus, hence he is bound by the sale; and
3) Due to his failure and refusal to pay the lease rentals, the tenancy
relationship between Carriedo and Mendoza had been terminated.
Meanwhile, on October 5, 1999, the landholding covered by TCT No. 17680
with an area of 12.1065 hectares was divided into sub-lots. 7.1065 hectares was
transferred to Bernabe Buscayno et al. through a Deed of Transfer28under PD No.
27.29 Eventually, TCT No. 17680 was partially cancelled, and in lieu thereof,
emancipation patents (EPs) were issued to Bernabe, Rod and Juanito, all surnamed
Buscayno. These lots were identified as Lots C, D and E covered by TCT Nos. 44384
to 44386 issued on September 10, 1999.30 Lots A and B, consisting of approximately
5.0001 hectares and which is the land being occupied by Mendoza, were registered
in the name of Carriedo and covered by TCT No. 34428131 and TCT No. 344282.32
The Redemption Case (DARAB III-T-1476-97 | CA-G.R. SP No. 88936)
On July 21, 1997, Mendoza filed a Petition for Redemption33 with the PARAD.
In an Order dated January 15, 2001,34the PARAD dismissed his petition on the
grounds of litis pendentia and lack of the required certification against forum-
shopping. It dismissed the petition so that the pending appeal of DARAB Case No.
163-T-90 (the ejectment case discussed above) with the CA can run its full course,
since its outcome partakes of a prejudicial question determinative of the tenability
of Mendoza’s right to redeem the land under tenancy.35
Mendoza appealed to the DARAB which reversed the PARAD Order in a
Decision dated November 12, 2003.36 The DARAB granted Mendoza
redemption rights over the land. It ruled that at the time Carriedo filed his
complaint for ejectment on October 1, 1990, he was no longer the owner of
the land, having sold the land to PLFI in June of 1990. Hence, the cause of action
pertains to PLFI and not to him.37 It also ruled that Mendoza was not notified of the
sale of the land to Carriedo and of the latter’s subsequent sale of it to PLFI. The
absence of the mandatory requirement of notice did not stop the running of the 180
day-period within which Mendoza could exercise his right of
redemption.38 Carriedo’s Motion for Reconsideration was subsequently denied.39
Carriedo filed a Petition for Review with the CA. In a Decision dated December 29,
2006,40 the CA reversed the DARAB Decision. It ruled that Carriedo’s ownership
of the land had been conclusively established and even affirmed by this Court.
Mendoza was not able to substantiate his claim that Carriedo was no longer the
owner of the land at the time the latter filed his complaint for ejectment. It held that
the DARAB erred when it ruled that Mendoza was not guilty of forum-
shopping.41 Mendoza did not appeal the decision of the CA.
The Coverage Case (ADM Case No. A-9999-03-CV-008-03 | CA-G.R. SP No. 88935)
On February 26, 2002, Mendoza, his daughter Corazon Mendoza (Corazon) and
Orlando Gomez (Orlando) filed a Petition for Coverage42 of the land under
RA No. 6657. They claimed that they had been in physical and material
possession of the land as tenants since 1956, and made the land
productive.43 They prayed (1) that an order be issued placing the land under
Comprehensive Agrarian Reform Program (CARP); and (2) that the DAR, the
Provincial Agrarian Reform Officer (PARO) and the Municipal Agrarian Reform Officer
(MARO) of Tarlac City be ordered to proceed with the acquisition and distribution of
the land in their favor.44 The petition was granted by the Regional Director
(RD) in an Order dated October 2, 2002,45 the dispositive portion of which reads:
WHEREFORE, foregoing premises considered, the petition for coverage under CARP
filed by Pablo Mendoza, et al[.], is given due course. Accordingly, the MARO and
PARO are hereby directed to place within the ambit of RA 6657 the landholding
registered in the name of Romeo Carriedo covered and embraced by TCT Nos.
334281 and 334282, with an aggregate area of 45,000 and 5,001 square meters,
respectively, and to distribute the same to qualified farmer-beneficiaries.
SO ORDERED.46
On October 23, 2002, Carriedo filed a Protest with Motion to Reconsider the
Order dated October 2, 2002 and to Lift Coverage47 on the ground that he
was denied his constitutional right to due process. He alleged that he was not
notified of the filing of the Petition for Coverage, and became aware of the same
only upon receipt of the challenged Order.
On October 24, 2002, Carriedo received a copy of a Notice of Coverage dated
October 21, 200248 from MARO Maximo E. Santiago informing him that the
land had been placed under the coverage of the CARP.49 On December 16,
2002, the RD denied Carriedo’s protest in an Order dated December 5,
2002.50 Carriedo filed an appeal to the DAR-CO.
In an Order dated February 22, 2005,51 the DAR-CO, through Secretary Rene C.
Villa, affirmed the Order of the RD granting coverage. The DAR-CO ruled that
Carriedo was no longer allowed to retain the land due to his violation of the
provisions of RA No. 6657. His act of disposing his agricultural landholdings was
tantamount to the exercise of his retention right, or an act amounting to a valid
waiver of such right in accordance with applicable laws and
jurisprudence.52 However, it did not rule whether Mendoza was qualified to be a
farmer-beneficiary of the land. The dispositive portion of the Order reads:
WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack
of merit. Consequently, the Order dated 2 October 2002 of the Regional Director of
DAR III, is hereby AFFIRMED.
SO ORDERED.53
Carriedo filed a Petition for Review54 with the CA assailing the DAR-CO Order. The
appeal was docketed as CA-G.R. SP No. 88935. In a Decision dated October 5, 2006,
the CA reversed the DAR-CO, and declared the land as Carriedo’s retained
area. The CA ruled that the right of retention is a constitutionally-guaranteed right,
subject to certain qualifications specified by the legislature.55 It serves to mitigate
the efects of compulsory land acquisition by balancing the rights of the landowner
and the tenant by implementing the doctrine that social justice was not meant to
perpetrate an injustice against the landowner.56 It held that Carriedo did not
commit any of the acts which would constitute waiver of his retention rights found
under Section 6 of DAR Administrative Order No. 02, S.2003.57 The dispositive
portion of the Decision reads:
WHEREFORE, premises considered and pursuant to applicable law and
jurisprudence on the matter, the present Petition is hereby GRANTED. Accordingly,
the assailed Order of the Department of Agrarian Reform-Central Office, Elliptical
Road, Diliman, Quezon City (dated February 22, 2005) is hereby REVERSED and SET
ASIDE and a new one entered—DECLARING the subject landholding as the
Petitioner’s retained area. No pronouncements as to costs.
12
SO ORDERED.58
Hence, this petition.
Petitioners maintain that the CA committed a reversible error in declaring the
land as Carriedo’s retained area.59
They claim that Paragraph 4, Section 6 of RA No. 6657 prohibits any sale,
disposition, lease, management contract or transfer of possession of private
lands upon effectivity of the law.60 Thus, Regional Director Renato Herrera
correctly observed that Carriedo’s act of disposing his agricultural property would be
tantamount to his exercise of retention under the law. By violating the law, Carriedo
could no longer retain what was left of his property. "To rule otherwise would be a
roundabout way of rewarding a landowner who has violated the explicit provisions
of the Comprehensive Agrarian Reform Law."61
They also assert that Carriedo waived his right to retain for failure or neglect for an
unreasonable length of time to do that which he may have done earlier by exercising
due diligence, warranting a presumption that he abandoned his right or declined to
assert it.62 Petitioners claim that Carriedo has not filed an Application for Retention
over the subject land over a considerable passage of time since the same was
acquired for distribution to qualified farmer beneficiaries.63
Lastly, they argue that Certificates of Land Ownership Awards (CLOAs) already
generated in favor of his co-petitioners Corazon Mendoza and Rolando Gomez
cannot be set aside. CLOAs under RA No. 6657 are enrolled in the Torrens system of
registration which makes them indefeasible as certificates of title issued in
registration proceedings.64
The Issue
The sole issue for our consideration is whether Carriedo has the right to retain the
land.
Our Ruling
We rule in the affirmative. Carriedo did not waive his right of retention over
the land.1âwphi1
The 1987 Constitution expressly recognizes landowner retention rights under
Article XIII, Section 4, to wit:
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
right of small landowners. The State shall further provide incentives for
voluntary land-sharing. (Emphasis supplied.)
RA No. 6657 implements this directive, thus:
Section 6. Retention Limits. — Except as otherwise provided in this Act, no
person may own or retain, directly or indirectly, any public or private
agricultural land, the size of which shall vary according to factors governing a
viable family-size farm, such as commodity produced, terrain, infrastructure,
and soil fertility as determined by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case shall retention by the landowner
exceed five (5) hectares.
xxx
The right to choose the area to be retained, which shall be compact or
contiguous, shall pertain to the landowner: Provided, however, That in case
the area selected for retention by the landowner is tenanted, the tenant shall
have the option to choose whether to remain therein or be a beneficiary in
the same or another agricultural land with similar or comparable features. In
case the tenant chooses to remain in the retained area, he shall be considered
a leaseholder and shall lose his right to be a beneficiary under this Act. In
case the tenant chooses to be a beneficiary in another agricultural land, he
loses his right as a leaseholder to the land retained by the landowner. The
tenant must exercise this option within a period of one (1) year from the time
the landowner manifests his choice of the area for retention. In all cases, the
security of tenure of the farmers or farmworkers on the land prior to the
approval of this Act shall be respected. xxx (Emphasis supplied.)
In Danan v. Court of Appeals,65 we explained the rationale for the grant of the right
of retention under agrarian reform laws such as RA No. 6657 and its predecessor PD
No. 27, to wit:
The right of retention is a constitutionally guaranteed right, which is subject to
qualification by the legislature. It serves to mitigate the efects of compulsory land
acquisition by balancing the rights of the landowner and the tenant and by
implementing the doctrine that social justice was not meant to perpetrate an
injustice against the landowner. A retained area, as its name denotes, is land which
is not supposed to anymore leave the landowner's dominion, thus sparing the
government from the inconvenience of taking land only to return it to the
landowner afterwards, which would be a pointless process. For as long as the area
to be retained is compact or contiguous and does not exceed the retention ceiling of
five (5) hectares, a landowner's choice of the area to be retained must prevail. xxx66
To interpret Section 6 of RA No. 6657, DAR issued Administrative Order No.
02, Series of 2003 (DAR AO 02-03). Section 6 of DAR AO 02-03 provides for
the instances when a landowner is deemed to have waived his right of
retention, to wit:
Section 6. Waiver of the Right of Retention. – The landowner waives his right to
retain by committing any of the following act or omission:
6.1 Failure to manifest an intention to exercise his right to retain within
sixty (60) calendar days from receipt of notice of CARP coverage.
6.2 Failure to state such intention upon ofer to sell or application under
the [Voluntary Land Transfer (VLT)]/[Direct Payment Scheme (DPS)]
scheme.
6.3 Execution of any document stating that he expressly waives his right
to retain. The MARO and/or PARO and/or Regional Director shall attest to
the due execution of such document.
6.4 Execution of a Landowner Tenant Production Agreement and
Farmer’s Undertaking (LTPA-FU) or Application to Purchase and Farmer’s
Undertaking (APFU) covering subject property.
6.5 Entering into a VLT/DPS or [Voluntary Ofer to Sell (VOS)] but failing to
manifest an intention to exercise his right to retain upon filing of the
application for VLT/DPS or VOS.
6.6 Execution and submission of any document indicating that he is
consenting to the CARP coverage of his entire landholding.
6.7 Performing any act constituting estoppel by laches which is the failure
or neglect for an unreasonable length of time to do that which he may
have done earlier by exercising due diligence, warranting a presumption
that he abandoned his right or declined to assert it.
Petitioners cannot rely on the RD’s Order dated October 2, 2002 which
granted Mendoza’s petition for coverage on the ground that Carriedo
violated paragraph 4 Section 667 of RA No. 6657 for disposing of his
agricultural land, consequently losing his right of retention. At the time when
the Order was rendered, up to the time when it was affirmed by the DAR-CO
in its Order dated February 22, 2005, the applicable law is Section 6 of DAR
02-03. Section 6 clearly shows that the disposition of agricultural land is not an
act constituting waiver of the right of retention.
Thus, as correctly held by the CA, Carriedo "[n]ever committed any of the acts
or omissions above-stated (DAR AO 02-03). Not even the sale made by the
herein petitioner in favor of PLFI can be considered as a waiver of his right of
retention. Likewise, the Records of the present case is bereft of any showing that
the herein petitioner expressly waived (in writing) his right of retention as required
under sub-section 6.3, section 6, DAR Administrative Order No. 02-S.2003."68
13
Petitioners claim that Carriedo’s alleged failure to exercise his right of
retention after a long period of time constituted a waiver of his retention
rights, as envisioned in Item 6.7 of DAR AO 02-03.
We disagree.
Laches is defined as the failure or neglect for an unreasonable and unexplained
length of time, to do that which by exercising due diligence could or should have
been done earlier; it is negligence or omission to assert a right within a reasonable
time, warranting a presumption that the party entitled to assert it either has
abandoned it or declined to assert it.69 Where a party sleeps on his rights and
allows laches to set in, the same is fatal to his case.70
Section 4 of DAR AO 02-03 provides:
Section 4. Period to Exercise Right of Retention under RA 6657
4.1 The landowner may exercise his right of retention at any time before
receipt of notice of coverage.
4.2 Under the Compulsory Acquisition (CA) scheme, the landowner shall
exercise his right of retention within sixty (60) days from receipt of notice
of coverage.
4.3 Under the Voluntary Ofer to Sell (VOS) and the Voluntary Land
Transfer (VLT)/Direct Payment Scheme (DPS), the landowner shall
exercise his right of retention simultaneously at the time of ofer for sale
or transfer.
The foregoing rules give Carriedo any time before receipt of the notice of
coverage to exercise his right of retention, or if under compulsory acquisition
(as in this case), within sixty (60) days from receipt of the notice of coverage.
The validity of the notice of coverage is the very subject of the controversy
before this court. Thus, the period within which Carriedo should exercise his
right of retention cannot commence until final resolution of this case.
Even assuming that the period within which Carriedo could exercise his right of
retention has commenced, Carriedo cannot be said to have neglected to assert his
right of retention over the land. The records show that per Legal Report dated
December 13, 199971 prepared by Legal Officer Ariel Reyes, Carriedo filed an
application for retention which was even contested by Pablo Mendoza’s son,
Fernando.72 Though Carriedo subsequently withdrew his application, his act of filing
an application for retention belies the allegation that he abandoned his right of
retention or declined to assert it.
In their Memorandum73 however, petitioners, for the first time, invoke estoppel,
citing DAR Administrative Order No. 05 Series of 200674 (DAR AO 05-06) to support
their argument that Carriedo waived his right of retention.75 DAR AO 05-06
provides for the rules and regulations governing the acquisition and distribution of
agricultural lands subject of conveyances under Sections 6, 7076 and 73 (a)77 of RA
No. 6657. Petitioners particularly cite Item no. 4 of the Statement of Policies of DAR
AO 05-06, to wit:
II. Statement of Policies
4. Where the transfer/sale involves more than the five (5) hectares
retention area, the transfer is considered violative of Sec. 6 of R.A.
No. 6657.
In case of multiple or series of transfers/sales, the first five (5) hectares
sold/conveyed without DAR clearance and the corresponding titles issued by the
Register of Deeds (ROD) in the name of the transferee shall, under the principle of
estoppel, be considered valid and shall be treated as the transferor/s’ retained
area but in no case shall the transferee exceed the five-hectare landholding ceiling
pursuant to Sections 6, 70 and 73(a) of R.A. No. 6657. Insofar as the excess area is
concerned, the same shall likewise be covered considering that the transferor has no
right of disposition since CARP coverage has been vested as of 15 June 1988. Any
landholding still registered in the name of the landowner after earlier dispositions
totaling an aggregate of five (5) hectares can no longer be part of his retention area
and therefore shall be covered under CARP. (Emphasis supplied.)
Citing this provision, petitioners argue that Carriedo lost his right of retention
over the land because he had already sold or disposed, after the effectivity of
RA No. 6657, more than fifty (50) hectares of land in favor of another.78
In his Memorandum,79 Carriedo maintains that petitioners cannot invoke any
administrative regulation to defeat his right of retention. He argues that
"administrative regulation must be in harmony with the provisions of law otherwise
the latter prevails."80
We cannot sustain petitioners' argument. Their reliance on DAR AO 05-06 is
misplaced. As will be seen below, nowhere in the relevant provisions of RA
No. 6657 does it indicate that a multiple or series of transfers/sales of land
would result in the loss of retention rights. Neither do they provide that the
multiple or series of transfers or sales amounts to the waiver of such right.
The relevant portion of Section 6 of RA No. 6657 referred to in Item no. 4 of DAR AO
05-06 provides:
Section 6. Retention Limits. – Except as otherwise provided in this Act, no person
may own or retain, directly or indirectly, any public or private agricultural land, the
size of which shall vary according to factors governing a viable family-size farm, such
as the commodity produced, terrain, infrastructure, and soil fertility as determined
by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no
case shall retention by the landowner exceed five (5) hectares. xxx
Upon the effectivity of this Act, any sale, disposition, lease, management,
contract or transfer of possession of private lands executed by the
original landowner in violation of the Act shall be null and void: Provided,
however, That those executed prior to this Act shall be valid only when registered
with the Register of Deeds within a period of three (3) months after the efectivity of
this Act. Thereafter, all Registers of Deeds shall inform the Department of Agrarian
Reform (DAR) within thirty (30) days of any transaction involving agricultural lands in
excess of five (5) hectares. (Emphasis supplied.)
Section 70 of RA No. 6657, also referred to in Item no. 4 of DAR AO 05-06 partly
provides:
The sale or disposition of agricultural lands retained by a landowner as a
consequence of Section 6 hereof shall be valid as long as the total landholdings that
shall be owned by the transferee thereof inclusive of the land to be acquired shall
not exceed the landholding ceilings provided for in this Act. Any sale or disposition
of agricultural lands after the effectivity of this Act found to be contrary to the
provisions hereof shall be null and void. xxx (Emphasis supplied.)
Finally, Section 73 (a) of RA No. 6657 as referred to in Item No. 4 of DAR AO 05-06
provides,
Section 73. Prohibited Acts and Omissions. – The following are prohibited:
(a) The ownership or possession, for the purpose of circumventing the provisions of
this Act, of agricultural lands in excess of the total retention limits or award ceilings
by any person, natural or juridical, except those under collective ownership by
farmer-beneficiaries; xxx
Sections 6 and 70 are clear in stating that any sale and disposition of
agricultural lands in violation of the RA No. 6657 shall be null and void. Under
the facts of this case, the reasonable reading of these three provisions in
relation to the constitutional right of retention should be that the
consequence of nullity pertains to the area/s which were sold, or owned by
the transferee, in excess of the 5-hectare land ceiling. Thus, the CA was
correct in declaring that the land is Carriedo’s retained area.81
Item no. 4 of DAR AO 05-06 attempts to defeat the above reading by providing that,
under the principle of estoppel, the sale of the first five hectares is valid. But, it
hastens to add that the first five hectares sold corresponds to the transferor/s’
retained area. Thus, since the sale of the first five hectares is valid, therefore, the
landowner loses the five hectares because it happens to be, at the same time, the
retained area limit. In reality, Item No. 4 of DAR AO 05-06 operates as a forfeiture
provision in the guise of estoppel. It punishes the landowner who sells in excess of
five hectares. Forfeitures, however, partake of a criminal penalty.82
In Perez v. LPG Refillers Association of the Philippines, Inc.,83 this Court said that for
an administrative regulation to have the force of a penal law, (1) the violation of the
administrative regulation must be made a crime by the delegating statute itself; and
(2) the penalty for such violation must be provided by the statute itself.84
Sections 6, 70 and 73 (a) of RA No. 6657 clearly do not provide that a sale or
disposition of land in excess of 5 hectares results in a forfeiture of the five hectare
14
retention area. Item no. 4 of DAR AO 05-06 imposes a penalty where none was
provided by law.
As this Court also held in People v. Maceren,85 to wit:
The reason is that the Fisheries law does not expressly prohibit electro fishing. As
electro fishing is not banned under the law, the Secretary of Agriculture and Natural
Resources and the Natural Resources and the Commissioner of Fisheries are
powerless to penalize it. In other words, Administrative Order Nos. 84 and 84-1, in
penalizing electro fishing, are devoid of any legal basis.
Had the lawmaking body intended to punish electro fishing, a penal provision to that
efect could have been easily embodied in the old Fisheries Law.86
The repugnancy between the law and Item no. 4 of DAR AO 05-06 is apparent by a
simple comparison of their texts. The conflict undermines the statutorily-guaranteed
right of the landowner to choose the land he shall retain, and DAR AO 05-06, in
efect, amends RA No. 6657.
In Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles (RMBSA) v. Home
Development Mutual Fund (HDMF),87 this Court was confronted with the issue of
the validity of the amendments to the rules and regulations implementing PD No.
1752.88 In that case, PD No. 1752 (as amended by RA No. 7742) exempted RMBSA
from the Pag-Ibig Fund coverage for the period January 1 to December 31, 1995. In
September 1995, however, the HDMF Board of Trustees issued a board resolution
amending and modifying the rules and regulations implementing RA No. 7742. As
amended, the rules now required that for a company to be entitled to a waiver or
suspension of fund coverage, it must have a plan providing for both
provident/retirement and housing benefits superior to those provided in the Pag-
Ibig Fund. In ruling against the amendment and modification of the rules, this Court
held that—
In the present case, when the Board of Trustees of the HDMF required in Section 1,
Rule VII of the 1995 Amendments to the Rules and Regulations Implementing R.A.
No. 7742 that employers should have both provident/retirement and housing
benefits for all its employees in order to qualify for exemption from the Fund, it
efectively amended Section 19 of P.D. No. 1752. And when the Board subsequently
abolished that exemption through the 1996 Amendments, it repealed Section 19 of
P.D. No. 1752. Such amendment and subsequent repeal of Section 19 are both
invalid, as they are not within the delegated power of the Board. The HDMF cannot,
in the exercise of its rule-making power, issue a regulation not consistent with the
law it seeks to apply. Indeed, administrative issuances must not override, supplant
or modify the law, but must remain consistent with the law they intend to carry out.
Only Congress can repeal or amend the law.89 (Citations omitted; underscoring
supplied.)
Laws, as well as the issuances promulgated to implement them, enjoy the
presumption of validity.90 However, administrative regulations that alter or
amend the statute or enlarge or impair its scope are void, and courts not only
may, but it is their obligation to strike down such regulations.91 Thus, in this
case, because Item no. 4 of DAR AO 05-06 is patently null and void, the
presumption of validity cannot be accorded to it. The invalidity of this
provision constrains us to strike it down for being ultra vires.
In Conte v. Commission on Audit,92 the sole issue of whether the Commission on
Audit (COA) acted in grave abuse of discretion when it disallowed in audit therein
petitioners' claim of financial assistance under Social Security System (SSS)
Resolution No. 56 was presented before this Court. The COA disallowed the claims
because the financial assistance under the challenged resolution is similar to a
separate retirement plan which results in the increase of benefits beyond what is
allowed under existing laws. This Court, sitting en banc, upheld the findings of the
COA, and invalidated SSS Resolution No. 56 for being ultra vires, to wit:
xxx Said Sec. 28 (b) as amended by RA 4968 in no uncertain terms bars the creation
of any insurance or retirement plan — other than the GSIS — for government
officers and employees, in order to prevent the undue and [iniquitous] proliferation
of such plans. It is beyond cavil that Res. 56 contravenes the said provision of law
and is therefore invalid, void and of no efect. xxx
We are not unmindful of the laudable purposes for promulgating Res. 56, and the
positive results it must have had xxx. But it is simply beyond dispute that the SSS had
no authority to maintain and implement such retirement plan, particularly in the
face of the statutory prohibition. The SSS cannot, in the guise of rule-making,
legislate or amend laws or worse, render them nugatory.
It is doctrinal that in case of conflict between a statute and an administrative order,
the former must prevail. A rule or regulation must conform to and be consistent
with the provisions of the enabling statute in order for such rule or regulation to be
valid. The rule-making power of a public administrative body is a delegated
legislative power, which it may not use either to abridge the authority given it by the
Congress or the Constitution or to enlarge its power beyond the scope intended. xxx
Though well-settled is the rule that retirement laws are liberally interpreted in favor
of the retiree, nevertheless, there is really nothing to interpret in either RA 4968 or
Res. 56, and correspondingly, the absence of any doubt as to the ultra-vires nature
and illegality of the disputed resolution constrains us to rule against
petitioners.93 (Citations omitted; emphasis and underscoring supplied.)
part of the landowner's retained area. (Citations omitted; underscoring
supplied.)
The issue, however, involving the issuance, recall or cancellation of EPs or CLOAs, is
lodged with the DAR,104 which has the primary jurisdiction over the matter.105
WHEREFORE, premises considered, the Petition is hereby DENIED for lack of merit.
The assailed Decision of the Court of Appeals dated October 5, 2006
is AFFIRMED. Item no. 4 of DAR Administrative Order No. 05, Series of 2006 is
hereby declared INVALID, VOID and OF NO EFFECT for being ultra vires.
SO ORDERED.

Administrative regulations must be in harmony with the provisions of the law for
administrative regulations cannot extend the law or amend a legislative
enactment.94 Administrative issuances must not override, but must remain
consistent with the law they seek to apply and implement. They are intended to
carry out, not to supplant or modify the law.95 Administrative or executive acts,
orders and regulations shall be valid only when they are not contrary to the laws or
the Constitution.96 Administrative regulations issued by a Department Head in
conformity with law have the force of law.97 As he exercises the rule-making power
by delegation of the lawmaking body, it is a requisite that he should not transcend
the bounds demarcated by the statute for the exercise of that power; otherwise, he
would be improperly exercising legislative power in his own right and not as a
surrogate of the lawmaking body.98

If the implementing rules and regulations are issued in excess of the rule-making
authority of the administrative agency, they are without binding efect upon the
courts. At best, the same may be treated as administrative interpretations of the law
and as such, they may be set aside by the Supreme Court in the final determination
of what the law means.99

While this Court is mindful of the DAR’s commitment to the implementation

of agrarian reform, it must be conceded that departmental zeal may not be
permitted to outrun the authority conferred by statute.100 Neither the high
dignity of the office nor the righteousness of the motive then is an acceptable
substitute; otherwise the rule of law becomes a myth.101

As a necessary consequence of the invalidity of Item no. 4 of DAR AO

05-06 for being ultra vires, we hold that Carriedo did not waive his right
to retain the land, nor can he be considered to be in estoppel.

Finally, petitioners cannot argue that the CLOAs allegedly granted in favor of
his co-petitioners Corazon and Orlando cannot be set aside. They claim that
CLOAs under RA No. 6657 are enrolled in the Torrens system of registration which
makes them indefeasible as certificates of title issued in registration
proceedings.102 Even as these allegedly issued CLOAs are not in the records, we
hold that CLOAs are not equivalent to a Torrens certificate of title, and thus are not
indefeasible.

CLOAs and EPs are similar in nature to a Certificate of Land Transfer (CLT) in
ordinary land registration proceedings. CLTs, and in turn the CLOAs and EPs,
are issued merely as preparatory steps for the eventual issuance of a
certificate of title. They do not possess the indefeasibility of certificates of
title. Justice Oswald D. Agcaoili, in Property Registration Decree and Related Laws
(Land Titles and Deeds),103 notes, to wit:

Under PD No. 27, beneficiaries arc issued certificates of land transfers (ClTs) to
entitle them to possess lands. Thereafter, they are issued emancipation patents
(EPs) after compliance with all necessary conditions. Such EPs, upon their
presentation to the Register of Deeds, shall be the basis for the issuance of the
corresponding transfer certificates of title (TCTs) in favor of the corresponding
beneficiaries.

Under RA No. 6657, the procedure has been simplified. Only certificates of land
ownership award (CLOAs) are issued, in lieu of EPs, after compliance with all
prerequisites. Upon presentation of the CLOAs to the Register of Deeds, TCTs are
issued to the designated beneficiaries. CLTs are no longer issued.

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the
landowner from retaining the area covered thereby. Under AO No. 2, series of
1994, an EP or CLOA may be cancelled if the land covered is later found to be

15
G.R. No. 132759 October 25, 2005
ALEJANDRO DANAN, TIRSO LINGAD, JR., AMADO BELLEZA, CARLITO SANTOS,
LADISLAO DANAN, RUBEN SAMBAT, RODRIGO DANAN, ABEDNIDO DANAN, FELIX
ESCUETA, ROMEO TALA, ADELOMO BALUYOT, PEDRO TALA, RUBEN MANGANTI,
PAQUITO CRUZ, RICARDO DIMA-RUCUT, RUFINO DEL ROSARIO, MARCOS PANGAN,
LAURA MANIAGO, LAMBERTO DANAN, FLORNARDO MANANSALA, DOMINADOR
ARTOLA, ROBERTO ZUÑIGA, JR., JOSE MENDOZA, ROMAN BERNAL, BENEDICTO
DANAN, JOEL DANAN, RODRIGO PAULE, JIMMY MANALAC, FELICIANO MACASPAC,
MARIANO MANANSALA, SILVESTRE MANUEL, FAUSTINO PANGAN, FLORENCIO
PANGAN, CONRADO CARLOS DANAN, PESCASIO DIMARUCUT, DANIEL DANAN,
LUCIANO MANLAPAZ, ARMANDO DANAN, FELICIANO MALLARI, REYNALDO
MUSNI, RODEL ZUNIGA DANAN, ALFREDO MORALES, JESUS NUNAG, ABRAHAM
MANUYAG, PEDRO MERCADO, OSCAR MANALILI, FORTUNATO MANUEL, ROSITA
BERNAL, RUBEN MIRANDA, NICOLAS MANANSALA, JOSE MANLAPAZ, JR.,
DIOSDADO LINGAD, MONICA TALA, JULIE CORTES, ANDRES PAULE, RONNIE PAULE,
CARLITO AGUILUS, ROMEO BALINGIT, BENIGNO PORTALES, ARNEL SAMBAT,
ALFREDO ALFARO, ROMEO ALFARO, FELICIANO BUCAD, SR., ONADAB ISIP, CARLITO
DIMACALI, JAIME BAUTISTA, ELIAS BALINGIT, REMY CARLOS, MARIANO SANTOS,
FEDERICO MANLAPAZ, REYNALDO SANTOS, ADELAIDA CALMA, GREGORIO CALMA,
PEPITO ALFARO, FERNANDO MANANSALA, JOE RAMMIE EMILIA, ROGELIO CORTES,
DOMINADOR MALIT, ELPIDIO TALA, RODRIGO TALA, SALVADOR TALA, ROMEO
TALA, REMEO DANAN, EDUARDO DANAN, CWZAR DANAN, BENJAMIN PANGAN,
DOMINGO SUMANDAL, MOISES SUSI, RODOLFO GERVACIO, SR., RODOLFO
GERVASIO, JR., JESUS BERNAL, ALFREDO SANTOS, FORTUNATO DANAN,
FRANCISCO MACASPAC, EDWIN MACASPAC, FELICISIMO MACASPAC, DIOSDADO
MACASPAC, REYNALDO TIMBANG, EULOGIO MACASPAC, RICARDO CHAVEZ,
RUBEN MANUYAG, DELFIN TALA, TOMAS PAULE, CLARO SUBA, DIOSDADO FLORES,
FRANCISCO NORALES, VENANCIO FLORES, DANTE FLORES, AGUSTIN ARIOLA,
RICARDO ARIOLA, ARTEMIO FLORES, FELICIANO BUCOD, JR., ROLANDO SERRANO,
JUANITO LINTAG, TOMAS TALA, LEONARDO RONQUILLO, LAMBERTO TALA,
RICARDO LINGAD, ANOTNIO SANTOS, IGNACIO TRESVALLES, ERNESTO PITUC,
TEOFILO MUNOZ, BIENVENIDO BELLEZA, MANUEL MAGUIAT, OFELIA MIGUEL,
PEDRO TALA, ALEJANDRO TALA, RODRIGO SERRANO, FRANCISCO BERNARTE,
OSCAR SERRANO, CONSOLACION SERRANO, CEZAR SERRANO, JOSE BERNARTE,
JESUS BERNARTE, CALIXTO SERRANO, ROBERTO MALLARI, ARNOLD PATRICIA,
REYNALDO OSBUAL, WILFREDO TAPALLA, ELIZALDE FAPREQUILAN, REYNALDO
CASTRO, LUISITO MALLARI, ANTONIO CASTRO, MARCELO MANANSALA, MARFELA
AQUINO, HERMOGENES LACAP, VIRGILIO MANANSALA, NESTOR DATU, ROMEO
DATU, ALEGRIA BELLEZA, PURITA MIRANDO, MARIA PEREZ, ALBERTO DELA CRUZ,
ARTURO DELA CRUZ, GENERITO TALA, CELESTINO TAPALLA, JIMMY TAPALLA, MIKE
TAPALLA, REMIGIO OSBUAL, MYRNA MIGUEL, EDUARDO ESCUETA, CONRADO
MALLARI, AVELINO MIGUEL, VICTORINO TALA, IGNACIO DELA CRUZ, ROLANDO
OSBUAL and ROLANDO MASANQUE, Petitioners,
vs.
THE HONORABLE COURT OF APPEALS and ESTRELLA ARRASTIA, Respondents.
x----------------------------------------x
G.R. No. 132866
THE COURT OF APPEALS and THE DEPARTMENT OF AGRARIAN REFORM
ADJUDICATION BOARD,Petitioners,
vs.
ESTRELLA ARRASTIA, Respondent.
DECISION
Tinga, J.:
This deals with two separate Rule 45 petitions, later consolidated, filed by the
Department of Agrarian Reform Adjudication Board ("DARAB") and Alfredo
Danan, et al. Both petitions seek the reversal of the Court of Appeals’ Decision in CA-
G.R. SP No. 33796, which reversed and set aside the DARAB Decision in DARAB Case
No. 1551 and its Resolution denying petitioners’ motion for reconsideration.
Petitioners ("private petitioners") in G.R. No. 132759 are all residents of
Lubao, Pampanga, claiming to be cultivating a vast landholding owned by the
heirs of Teodorica Reinares Arrastia, Leticia Arrastia Montenegro and Juanita
Arrastia ("Arrastia heirs"). Said property has an aggregate area of
approximately three hundred (300) hectares and is situated at the Barangays of
Lourdes, Baruya, and San Isidro, all within the Municipality of Lubao, Pampanga. The
records of the case show that the landholding had been subdivided and
16
distributed among the Arrastia heirs and the corresponding certificates of
titles issued accordingly.
Petitioner in G.R. No. 132866 is the DARAB, the adjudication arm of the
Department of Agrarian Reform ("DAR") that is tasked to implement the
government’s comprehensive agrarian reform program ("CARP").
The common respondent in both petitions is Estrella Arrastia, one of the
Arrastia heirs and a co-owner of the disputed property. Respondent Arrastia
own 4.4630 hectares of the disputed property.
The factual antecedents are as follows:
Sometime in 1976, a certain Rustico Coronel leased the subject property for a
period of twelve (12) years or until the crop year 1987 to 1988. 1 On
September 27, 1986, persons claiming to be farmers and residents
of Barangay Lourdes and Barangay San Rafael signed a joint resolution as
members of the Aniban ng mga Manggagawa sa Agrikultura ("AMA") to enter
and lease the subject property from the Arrastia heirs. Then Pampanga
Governor Brien Guiao favorably endorsed the resolution to then Minister of
Environment and Natural Resources Heherson Alvarez. On the basis of said
resolution but without the consent of the landowners, the AMA members,
who are herein petitioners, entered the disputed land, cleared portions
thereof and planted various crops thereon. This culminated in a violent
confrontation on May 21, 1988 that led to the filing of criminal charges
against AMA members.2
On June 2, 1988, the AMA filed a complaint with petitioner DARAB, docketed as
DARAB Case No. 0001, praying that respondent Arrastia be prevented from
destroying standing crops on the disputed property and from fencing said
property and that petitioners be allowed to continue with their farming
thereon. On August 15, 1988, the DARAB ordered the DAR Regional Director to
conduct an ocular inspection on the disputed property.3 The inspection team
submitted an Ocular/Investigation Report with the observation that there were no
substantially significant plantings on the disputed property. The Municipal Agrarian
Reform Officer ("MARO") of Lubao, Pampanga also submitted a report dated
September 21, 1989, recommending the disqualification of private petitioners from
availing of the benefits under the CARP.4
On October 5, 1988, the DARAB issued an order denying AMA’s motion for
authority to cultivate. The order became final and executory on July 29, 1989,
after the DARAB denied AMA’s motion for reconsideration.5
On behalf of her co-heirs and co-owners, Arrastia instituted an action against
private petitioners for violation of Section 73(b) of Republic Act (R.A.) No.
6657 on October 9, 1989. Arrastia’s complaint, docketed as Agrarian Case No.
2000, was raffled to Branch 48 of the Regional Trial Court of San Fernando,
Pampanga on October 9, 1989. The trial court, sitting as a special agrarian court
("SAC"), issued a temporary restraining order, and subsequently a preliminary
injunction, both enjoining private petitioners from entering and cultivating the
disputed property.
On November 29, 1989, private petitioners filed a complaint for injunction
and damages before the Provincial Agrarian Reform Adjudication Board
("PARAD") against Arrastia, alleging that they were actual tillers of the
disputed property who were forcibly evicted by Arrastia from their tenanted
lots through the use of armed men. In their complaint, docketed as DARAB
Regional Case No. 161-P’ 89, they prayed that Arrastia be restrained from preventing
them from reoccupying the property in question. Upon referral of the matter to the
respective Barangay Agrarian Reform Committees ("BARC") of the Barangays of
Lourdes, San Isidro, and San Rafael, BARC officials reported that the dispute could no
longer be settled amicably. In particular, the BARC of Barangay San Rafael (Baruya),
Lubao informed the hearing officer that private petitioners were tenants or actual
tillers of the disputed property. The Lubao MARO also submitted the reports of
other BARC officials.6
On the basis of the reports submitted by BARC officials and private
petitioners’ affidavits, the hearing officer issued on December 9, 1990 an
order granting a preliminary injunction to restrain Arrastia from disturbing
private petitioners in the tilling of the disputed property. The PARAD hearing
officer also directed the MARO to act on the petition for the coverage of the
disputed property under the CARP.7
Meanwhile, on January 30, 1991, Arrastia filed an omnibus motion in DARAB
Case No. 0001, questioning the jurisdiction of the hearing officer to issue an
order of injunction. The DARAB denied said motion and subsequently issued the
writ of injunction on September 22, 1992.
Arrastia filed an answer in DARAB Regional Case No. 161-P’ 89, interposing
the defense that the disputed land was not devoted to agriculture and that
private petitioners were not tenants thereof.
After due hearing, the PARAD rendered a decision in DARAB Regional Case No.
161-P’ 89 on May 13, 1993, declaring that the subject property is covered by
the CARP and that private petitioners are qualified beneficiaries of the
program. The adjudicator also issued an injunction prohibiting Arrastia from
disturbing private petitioners’ occupation of the property. The dispositive portion of
the decision reads:
WHEREFORE, PREMISES CONSIDERED, this Board hereby renders judgment:
(1) Confirming and declaring that the subject landholding with an area of 300
hectares, more or less, situated at Barangays Lourdes, San Isidro and San Rafael
(Baruya), Lubao, Pampanga, owned by the defendant and her co-owners are
agricultural land subject to the coverage of RA No. 6657, and that plaintifs are
qualified beneficiaries who enjoy the benefits of agrarian laws including the right to
an award of the lands they actually till in accordance with the procedure therein;
(2) Making the preliminary injunction hereto forthwith issued, prohibiting the
defendant and her co-owners and all other persons claiming any right or title under
them, from continuing to exclude plaintifs and from re-entry and re-occupation of
the subject landholding as agricultural tenants and their restoration thereat, final
and permanent; and
(3) Ordering the defendant and her co-owners to pay plaintifs the amount of
₱10,000.00 as attorney’s fees, plus costs.8
Arrastia appealed the aforementioned decision to petitioner DARAB. The appeal was
docketed as DARAB Case No. 1551. On March 28, 1994, the DARAB rendered its
decision modifying the appealed judgment, the dispositive portion of which
reads:
WHEREFORE, premises considered, the appeal is DISMISSED. The judgment of the
Provincial Adjudicator is hereby modified as follows:
1. Declaring Dominador Flores, Rodrigo Serrano, Oscar Salazar, Alejandro Danan,
Tirso Lingad, Francisco Santos, Dante Danan, Jesus Castro, Amado Escueta, Marcos
Susi, Francisco Bernate, Felix Escueta, Ladislao Danan, Lamberto Danan, Carlito
Santos, Orlando Santos, Jose Manansala, Eulalio Danan, Eddie Escueta, Conrado
Castro, Pedro Tala and Victorino Tala to be agricultural lessees on their respective
tillages, and ordering their reinstatement on the land;
2. Ordering the rest of the Plaintifs-Appellees to be reinstated on the land and to
possess and occupy their respective areas of cultivation;
3. Ordering the Regional Director of the Department of Agrarian Reform, Region III,
San Fernando, Pampanga, the Provincial Agrarian Reform Officer for the Province of
Pampanga and the Municipal Reform Officer for the Municipality of Lubao, Province
of Pampanga to immediately undertake administrative processes for the coverage of
the land under Republic Act No. 6657 and other applicable agrarian laws, DAR
Administrative Order No. 1, Series of 1993, DAR Department Memorandum Circular
No. 04, Series of 1993 and other DAR rules and regulations taking into consideration
the qualifications of Appellees to be beneficiaries of the program as well as the right
of retention of the owners of the subject landholding and the last paragraph of
Section 6, Republic Act No. 6657 which provides:
Upon the efectivity of this Act, any sale, disposition, lease, management contract or
transfer of possession of private lands executed by the original landowner in
violation of this Act shall be null and void; Provided, however, That those executed
prior to this Act shall be valid only when registered with the Register of Deeds within
the period of three (3) months after the efectivity of this Act. Thereafter, all Register
of Deeds shall inform the DAR within thirty (30) days of any transaction involving
agricultural lands in excess of five (5) hectares.
17
4. Ordering Defendant-Appellant, or any person or persons acting for and in behalf,
to refrain from committing any act or acts which will disturb or in any way adversely
interfere with the peaceful possession, occupation and farming activities of
Appellees on the land itself;
5. Ordering Defendant-Appellant to pay Plaintif-Appellees the reasonable amount
of Twenty Thousand Pesos (₱20,000.00) as attorney’s fees plus costs of the suit; and
6. Ordering the Regional Sherif of the DAR Regional Adjudication Board, Region III,
to implement this Order and submit a return to this Board within seven (7) days
from receipt of this Order.
This decision is immediately executory pursuant to Section 50 of Republic Act No.
6657.9
Aggrieved, Arrastia elevated the controversy to the Court of Appeals, which
reversed and set aside the decision of the DARAB.
On the issue of whether private petitioners are qualified beneficiaries under the
CARP, the appellate court ruled in the negative mainly on the basis of the report of
MARO Josefina Vidal which was quoted at length in its Decision. In the said report,
the MARO recommended the disqualification of private petitioners from the
coverage of the CARP in view of their continued violation of Sections 22 and 23 of
Executive Order No. 229, under which persons, associations, or entities which
prematurely enter lands covered by agrarian reform shall be permanently
disqualified from CARP coverage and cited for contempt, respectively. The Court of
Appeals also found private petitioners guilty of violating the temporary restraining
order and preliminary injunction issued by the SAC in Agrarian Case No. 2000 and
also the temporary restraining issued by the Court of Appeals itself on April 13,
1994. The appeals court denied the motions for reconsideration separately filed by
private petitioners. Hence, the petitions before this Court.
In its petition, DARAB raised the following issues:
1.1. THE HONORABLE COURT OF APPEALS ERRED WHEN IT SET ASIDE THE ENTIRETY
OF THE DECISION APPEALED FROM, TO INCLUDE THE ORDER TO PLACE THE
DISPUTED LANDHOLDINGS UNDER CARP COVERAGE, ON THE SOLE BASIS OF THE
FINDING THAT PRIVATE RESPONDENTS (FARMERS) THEREIN WERE DISQUALIFIED AS
FARMER BENEFICIARIES;
1.2. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED ON THE
DISQUALIFICATION OF ALL THE FARMERS (PRIVATE RESPONDENTS THEREIN),
IRRESPECTIVE OF WHETHER THEY (OR SOME) ARE AGRICULTURAL TENANTS OR NOT,
ON THE SOLE BASIS OF A FIELD REPORT THAT WAS PREPARED AND SUBMITTED
WITHOUT THE FARMERS AT LEAST GIVEN OPPORTUNITY TO BE HEARD, THUS,
VIOLATIVE OF DUE PROCESS.10
In turn, private petitioners in their petition impute the following errors to the Court
of Appeals:
1. RESPONDENT COURT GRAVELY ERRED IN NOT GIVING FIRST DUE COURSE TO THE
PETITION IN CA-G.R. NO. 33796 AND REQUIRED THE DARAB TO ELEVATE TO IT THE
RECORDS OF DARAB CASE NO. 1551 INCLUDING ALL THE EVIDENCE PRESENTED SO
IT COULD HAVE FULLY APPRECIATED ALL THE FACTS INSTEAD OF MERELY RELYING
ON THE PLEADINGS FILED BEFORE IT.
2. THE RESPONDENT COURT GRAVELY ERRED IN IGNORING FUNDAMENTAL RULES
OF ADMINISTRATIVE DUE PROCESS BY ITS FAILURE AND REFUSAL TO CONSIDER
SUBSTANTIVE EVIDENCE INTRODUCED BY PETITIONERS IN THE PROCEEDINGS IN
DARAB CASE NO. 161-P’89 AND DARAB CASE NO. 1551 RESULTING IN FINDINGS
WHICH ARE NOT ONLY CONTRARY TO LAW AND THE EVIDENCE ON RECORD BUT ARE
FURTHER PATENTLY PARTIAL TO PRIVATE RESPONDENTS.
3. THE RESPONDENT COURT GRAVELY ERRED IN MAKING CONCLUSIONS FROM ITS
REVIEW OF THE DARAB DECISION IN DARAB CASE NO. 1551 WITHOUT ANY BASIS
ON THE DECISION ITSELF THUS CITING ERRORS IN THE SAID DECISION WHICH WERE
NOT ACTUALLY MADE BY THE DARAB.
4. THE RESPONDENT COURT GRAVELY ERRED IN REVERSING THE FINDINGS OF FACTS
OF THE DARAB WITHOUT DUE REGARD TO EVIDENCE PRESENTED BEFORE THE
LATTER.11
The two petitions advance two main arguments: first, the Court of Appeals’ finding
that private petitioners are ineligible to become CARP beneficiaries is without
factual or evidentiary basis; second, the Court of Appeals’ reversal of the DARAB’s
order to undertake administrative proceedings for the acquisition of the subject
property for agrarian reform purposes is premature.
Private petitioners contend that the Court of Appeals’ declaration that they are not
qualified beneficiaries of the CARP has no evidentiary basis because it failed to order
the transmittal of the DARAB records, particularly the reports of the diferent BARC
officials establishing tenancy relationship between private petitioners and the
owners of the disputed property. For its part, DARAB denies having categorically
declared in its decision in DARAB Case No. 1551 that private petitioners are qualified
beneficiaries because the administrative proceeding to determine the beneficiaries
entitled under R.A. No. 6657 was yet to be undertaken not by DARAB but by the
administrative officials of DAR. DARAB also describes as arbitrary and unilateral the
MARO report quoted by the appellate court in support of its ruling that private
petitioners prematurely entered the disputed property.
The resolution of the issue on private petitioners’ eligibility under the CARP calls for
a review of the evidence on record to determine whether or not the conclusion of
the Court of Appeals has factual basis. At the outset, it should be noted that the
jurisdiction of this Court in a petition for review on certiorari under Rule 45 of the
Rules of Court is limited to reviewing only errors of law, as it is not a trier of facts. It
is a settled doctrine that findings of fact of the Court of Appeals are binding and
conclusive upon this Court, not to be disturbed unless: (1) the conclusion is a finding
grounded entirely on speculation, surmise and conjecture; (2) the inference made is
manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is based
on a misapprehension of facts; (5) the findings of fact are conflicting; (6) the Court of
Appeals went beyond the issues of the case and its findings are contrary to the
admissions of both appellant and appellees; (7) the findings of fact of the Court of
Appeals are contrary to those of the trial court; (8) said findings of fact are
conclusions without citation of specific evidence on which they are based; (9) the
facts set forth in the petition as well as in the petitioner's main and reply briefs are
not disputed by the respondents; and (10) the findings of fact of the Court of
Appeals are premised on the supposed absence of evidence and contradicted by the
evidence on record.12
The DARAB and the Court of Appeals’ findings in respect to the status of
private petitioners are conflicting. The DARAB found that private petitioners
are either agricultural lessees paying rentals to the landowners or actual tillers
in possession of distinct portions of the subject property. The Court of
Appeals, however, found private petitioners as not qualified to become CARP
beneficiaries on account of certain violations they committed and considered
it unnecessary to ascertain their status as agricultural lessees or tillers. In view
of the divergent opinions, the Court must review the evidence relied upon by
the DARAB and the Court of Appeals in arriving at their respective
conclusions.
The Court affirms factual findings and conclusions of the Court of Appeals.
The appellate court’s conclusion that private petitioners committed particular
violations warranting their disqualification from the CARP is based on the
MARO report which has not been disputed by all the private petitioners. The
MARO who prepared the report enjoys the presumption of regularity in the
performance of her functions. Absent any showing that the Court of Appeals
committed grave abuse of discretion in giving evidentiary weight to said report, said
factual findings are generally deemed conclusive on this Court, which is not a trier of
facts.13
A perusal of the decision in DARAB Case No. 1551 reveals that DARAB
classified two (2) sets of farmworkers, i.e., those who cultivated the land and
paid corresponding rentals, and those who occupied and cultivated portions
of the disputed property since 1986 as certified by BARC officials.
Mere occupation or cultivation of an agricultural land does not automatically
convert a tiller or farmworker into an agricultural tenant recognized under
agrarian laws. The essential requisites of a tenancy relationship are: (1) the
parties are the landowner and the tenant; (2) the subject is agricultural land;
(3) there is consent among the parties; (4) the purpose is agricultural
production; (5) there is personal cultivation; and (6) there is sharing of
harvests. All these requisites must concur in order to create a tenancy relationship
between the parties.15 In the case at bar, it has not been sufficiently established
that private petitioners’ occupation and cultivation of the disputed property was
with the consent of the landowners.
DARAB assails the Court of Appeals in reversing the DARAB decision in its entirety. It
contends that the determination of private petitioners’ eligibility under R.A. No.
6657 has no bearing on its order to commence administrative procedure for the
acquisition of the disputed property.
As borne by the case records,16 respondent Arrastia owns only 4.4630
hectares of the subject property, which is below the retention limit under
Section 617 of R.A. No. 6657 granting a right of retention of up to a
maximum of five (5) hectares of agricultural land in favor of a landowner
whose property may be acquired for distribution to agrarian reform
beneficiaries. Consequently, a landowner may keep his entire covered
landholding if its aggregate size does not exceed the retention limit of five (5)
hectares. His land will not be covered at all by the operation land transfer
program although all requisites for coverage are present.
The right of retention is a constitutionally guaranteed right, which is subject
to qualification by the legislature. It serves to mitigate the effects of
compulsory land acquisition by balancing the rights of the landowner and the
tenant and by implementing the doctrine that social justice was not meant to
perpetrate an injustice against the landowner. A retained area, as its name
denotes, is land which is not supposed to anymore leave the landowner's
dominion, thus sparing the government from the inconvenience of taking
land only to return it to the landowner afterwards, which would be a pointless
process.18 For as long as the area to be retained is compact or contiguous and does
not exceed the retention ceiling of five (5) hectares, a landowner's choice of the area
to be retained must prevail. Moreover, Administrative Order No. 4, series of 1991,
which supplies the details for the exercise of a landowner's retention rights, likewise
recognizes no limit to the prerogative of the landowner, although he is persuaded to
retain other lands instead to avoid dislocation of farmers.19 Therefore, there is no
legal and practical basis to order the commencement of the administrative
proceedings for the placement of respondent Arrastia’s land under the CARP since
her property’s land area falls below the retention limit of five (5) hectares.
WHEREFORE, both petitions in G.R No. 132759 and G.R. No. 132866 are DENIED.
The Decision of the Court of Appeals in CA-G.R. SP No. 33796 is AFFIRMED. Costs
against private petitioners.
SO ORDERED.

Anent DARAB’s contention that the MARO report was made unilaterally and DANTE O. TINGA
without giving private petitioners the opportunity to be heard, the
circumstances not nullify said report for lack of due process. The essence of
due process is simply an opportunity to be heard or, as applied to administrative
proceedings, an opportunity to explain one's side or an opportunity to seek
reconsideration of the action or ruling complained of.14 Private petitioners cannot
claim denial of due process simply because they had ample opportunity to rebut the
MARO’s findings and present contrary evidence in the proceedings before the
PARAD, the DARAB, or the Court of Appeals.

Private petitioners insist that they are bona fide agricultural tenants of the
disputed property. It is unnecessary to pass upon this issue in the light of the
categorical finding of the appellate court that private petitioners are no
longer entitled to avail of the benefits under the CARP. In any event, however,
the claim is not well-founded.

18
G.R. No. 133507 February 17, 2000
EUDOSIA DAEZ AND/OR HER HEIRS, REP. BY ADRIANO D. DAEZ, petitioners,
vs.
THE HON. COURT OF APPEALS MACARIO SORIENTES, APOLONIO MEDIANA,
ROGELIO MACATULAD and MANUEL UMALI, respondents.
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision1 of the Court of
Appeals2 dated January 28, 1998 which denied the application of petitioner heirs of
Eudosia Daez for the retention of a 4.1685-hectare riceland pursuant to Republic Act
(R.A.) No. 6657, otherwise known as the Comprehensive Agrarian Reform Law3,
thereby reversing the Decision4 of then Executive Secretary Ruben D. Torres and the
Order5 of then Deputy Executive Secretary Renato C. Corona, both of which had
earlier set aside the Resolution6 and Order7 of then Department of Agrarian Reform
(DAR) Secretary Ernesto D. Garilao denying exemption of the same riceland from
coverage under Presidential Decree (P.D.) No. 27.
The pertinent facts are:
Eudosia Daez, now deceased, was the owner of a 4.1685-hectare riceland in
Barangay Lawa, Meycauayan, Bulacan which was being cultivated by
respondents Macario Soriente, Rogelio Macatulad, Apolonio Mediana and
Manuel Umali under a system of share-tenancy. The said land was subjected
to the Operation Land Transfer (OLT) Program under Presidential Decree
(P.D.) No. 278 as amended by Letter of Instruction (LOI) No. 4749. Thus, the
then Ministry of Agrarian Reform acquired the subject land and issued
Certificates of Land Transfer (CLT) on December 9, 1980 to private
respondents as beneficiaries.
However, on May 31, 1981, private respondents signed an affidavit, allegedly
under duress, stating that they are not share tenants but hired laborers10.
Armed with such document, Eudosia Daez applied for the exemption of said
riceland from coverage of P.D. No. 27 due to non-tenancy as well as for the
cancellation of the CLTs issued to private respondents.1âwphi1.nêt
In their Affidavit dated October 2, 1983, Eudosia Daez and her husband, Lope,
declared ownership over 41.8064 hectares of agricultural lands located in
Meycauayan, Bulacan and fourteen (14) hectares of riceland, sixteen (16)
hectares of forestland, ten (10) hectares of "batuhan" and 1.8064 hectares of
residential lands11 in Penaranda, Nueva Ecija. Included in their 41.8064-hectare
landholding in Bulacan, was the subject 4,1685-hectare riceland in Meycauayan.
On July 27, 1987, DAR Undersecretary Jose C. Medina issued an Order denying
Eudosia Daez's application for exemption upon finding that her subject land
is covered under LOI No. 474, petitioner being owner of the aforesaid
agricultural lands exceeding seven (7) hectares12.
On June 29, 1989, Eudosia Daez wrote a letter to DAR Secretary Benjamin T. Leong
requesting for reconsideration of Undersecretary Medina's order. But on January 16,
199213 Secretary Leong affirmed the assailed order upon finding private
respondents to be bonafide tenants of the subject land. Secretary Leong
disregarded private respondents' May 31, 1981 affidavit for having been
executed under duress because he found that Eudosia's son, Adriano, who was
then the incumbent Vice-Mayor of Meycauayan, pressured private respondents into
signing the same.
Undaunted, Eudosia Daez brought her case on February 20, 1992 to the Court of
Appeals via a petition for certiorari. The Court of Appeals, however, sustained
the order of Secretary Leong in a decision dated April 29, 1992. Eudosia pursued
her petition before this court but we denied it in a minute resolution dated
September 18, 1992. We also denied her motion for reconsideration on
November 9, 1992.
Meantime, on August 6 and 12, 1992, the DAR issued Emancipation Patents
(EPs) to private respondents. Thereafter, the Register of Deeds of Bulacan issued
the corresponding Transfer Certificates of Title (TCTs).
Exemption of the 4.1685 riceland from coverage by P.D. No. 27 having been
finally denied her, Eudosia Daez next filed an application for retention of the
same riceland, this time under R.A. No. 6657.
19
In an order dated March 22, 1994, DAR Region III OIC-Director Eugenio B.
Bernardo allowed Eudosia Daez to retain the subject riceland but he denied
the application of her eight (8) children to retain three (3) hectares each for
their failure to prove actual tillage of the land or direct management thereof
as required by law14. Aggrieved, they appealed to the DAR.
On August 26, 1994, then DAR Secretary Ernesto D. Garilao, set aside the order
of Regional Director Bernardo in a Resolution,15 the decretal portion of which
reads, viz.:
WHEREFORE, premises considered, this Resolution is hereby issued
setting aside with FINALITY the Order dated March 22, 1994 of the
Regional Director of DAR Region III.
The records of this case is remanded to the Regional Office for immediate
implementation of the Order dated January 16, 1992 of this office as
affirmed by the Court of Appeals and the Supreme Court.
SO ORDERED.
Eudosia Daez filed a Motion for Reconsideration but it was denied on January
19, 199516.
She appealed Secretary Garilao's decision to the Office of the President which
ruled in her favor. The dispositive portion of the Decision17 of then Executive
Secretary reads:
WHEREFORE, the resolution and order appealed from are hereby SET
ASIDE and judgment is rendered authorizing the retention by
Eudosia Daez or her heirs of the 4.1685-hectare landholding subject
thereof.
SO ORDERED.18
Aggrieved, private respondents sought from the Court of Appeals, a review of the
decision of the Office of the President.
On January 28, 1999, the said Decision of the Office of the President was
reversed. The Court of Appeals ordered, thus:
WHEREFORE, the assailed decision of July 5, 1996 and Order dated
October 23, 1996 of the public respondents are REVERSED AND SET
ASIDE, and the Resolution and Order of DAR Secretary Ernesto D. Garilao
respectively dated August 26, 1994 and January 19, 1995 are
REINSTATED.
SO ORDERED.
Hence, this petition which assigns the following errors:
I. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT DISTINCTION
BETWEEN EXEMPTION FROM AGRARIAN REFORM COVERAGE AND THE RIGHT OF
RETENTION OF LANDOWNERS IS ONLY A MATTER OF SEMANTICS THAT AN ADVERSE
DECISION IN THE FORMER WILL FORECLOSE FURTHER ACTION TO ENFORCE THE
LATTER CONSIDERING THAT THEY CONSTITUTE SEPARATE AND DISTINCT CAUSES OF
ACTION AND, THEREFORE, ENFORCEABLE SEPARATELY AND IN SEQUEL.
II. THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED
THE PRINCIPLE OF RES JUDICATA DESPITE THE FACT THAT THE
PREVIOUS CASE CITED (EXEMPTION FROM COVERAGE DUE TO
NON-TENANCY) AND THE PRESENT CASE (RETENTION RIGHT) ARE
OF DIFFERENT CAUSES OF ACTION.
III. THE HONORABLE COURT OF APPEALS ERRED WHEN IT
RULED/OPINED THAT THERE WAS A CUT-OFF DATE (AUGUST 27,
1985) FOR LANDOWNERS TO APPLY FOR EXEMPTION OR
RETENTION UNDER PD 27 AND THOSE WHO FAILED TO FILE THEIR
APPLICATIONS/PETITIONS ARE DEEMED TO HAVE WAIVED THEIR
RIGHTS.
IV. THE HONORABLE COURT OF APPEALS ERRED IN DECLARING
THAT PETITIONERS (RESPONDENTS THEREIN) ARE GUILTY OF
ESTOPPEL.
 V. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED
THAT THE LAND SUBJECT OF THIS CASE IS NO LONGER OWNED BY
PETITIONERS SINCE PRIVATE RESPONDENTS HAVE ALREADY BEEN
ISSUED NOT ONLY THEIR RESPECTIVE CERTIFICATES OF LAND
TRANSFER BUT ALSO THEIR INDIVIDUAL CERTIFICATES OF TITLE
OVER THE DISPUTED AREA.19
We grant the petition.
First. Exemption and retention in agrarian reform are two (2) distinct
concepts.
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program,
covers tenanted rice or corn lands. The requisites for coverage under the OLT
program are the following: (1) the land must be devoted to rice or corn crops;
and (2) there must be a system of share-crop or lease-tenancy obtaining
therein. If either requisite is absent, a landowner may apply for exemption. If
either of these requisites is absent, the land is not covered under OLT. Hence,
a landowner need not apply for retention where his ownership over the entire
landholding is intact and undisturbed.
P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the
land is irrigated, a three (3)-hectare lot constituting a family size farm. However, said
law allows a covered landowner to retain not more than seven (7) hectares of his
land if his aggregate landholding does not exceed twenty-four (24) hectares.
Otherwise, his entire landholding is covered without him being entitled to any
retention right20.
Consequently, a landowner may keep his entire covered landholding if its aggregate
size does not exceed the retention limit of seven (7) hectares. In efect, his land will
not be covered at all by the OLT program although all requisites for coverage are
present. LOI No. 474 clarified the efective coverage of OLT to include tenanted rice
or corn lands of seven (7) hectares or less, if the landowner owns other agricultural
lands of more than seven (7) hectares. The term "other agricultural lands" refers to
lands other than tenanted rice or corn lands from which the landowner derives
adequate income to support his family.
Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not
devoted to rice or corn crops even if it is tenanted; or (2) the land is
untenanted even though it is devoted to rice or corn crops.
On the other hand, the requisites for the exercise by the landowner of his
right of retention are the following: (1) the land must be devoted to rice or
corn crops; (2) there must be a system of share-crop or lease-tenancy
obtaining therein; and (3) the size of the landholding must not exceed
twenty-four (24) hectares, or it could be more than twenty-four (24) hectares
provided that at least seven (7) hectares thereof are covered lands and more
than seven (7) hectares of it consist of "other agricultural lands".
Clearly, then, the requisites for the grant of an application for exemption from
coverage of OLT and those for the grant of an application for the exercise of a
landowner's right of retention, are different.
Hence, it is incorrect to posit that an application for exemption and an
application for retention are one and the same thing. Being distinct remedies,
finality of judgment in one does not preclude the subsequent institution of
the other. There was, thus, no procedural impediment to the application filed
by Eudosia Daez for the retention of the subject 4.1865-hectare riceland, even
after her appeal for exemption of the same land was denied in a decision that
became final and executory.
Second. Petitioner heirs of Eudosia Daez may exercise their right of
retention over the subject 4.1685 riceland.
The right of retention is a constitutionally guaranteed right, which is subject
to qualification by the legislature21. It serves to mitigate the effects of
compulsory land acquisition by balancing the rights of the landowner and the
tenant and by implementing the doctrine that social justice was not meant to
perpetrate an injustice against the landowner22. A retained area, as its name
denotes, is land which is not supposed to anymore leave the landowner's dominion,
20
thus sparing the government from the inconvenience of taking land only to return it
to the landowner afterwards, which would be a pointless process.
In the landmark case of Association of Small Landowners in the
Phil., Inc. v. Secretary of Agrarian Reform23, we held that landowners who have not
yet exercised their retention rights under P.D. No. 27 are entitled to the new
retention rights under R.A. No. 665724. We disregarded the August 27, 1985
deadline imposed by DAR Administrative Order No. 1, series of 1985 on landowners
covered by OLT. However, if a landowner filed his application for retention after
August 27, 1985 but he had previously filed the sworn statements required by LOI
Nos. 41, 45 and 52, he is still entitled to the retention limit of seven (7) hectares
under P.D. No. 2725. Otherwise, he is only entitled to retain five (5) hectares under
R.A. No. 6657.
Sec. 6 of R.A. No. 6657, which provides, viz.:
Sec. 6. Retention Limits — Except as otherwise provided in this Act, no
person may own or retain, directly or indirectly, any public or private
agricultural land, the size of which shall vary according to factors
governing a viable family-size, such as commodity produced, terrain,
infrastructure, and soil fertility as determined by the Presidential Agrarian
Reform Council (PARC) created hereunder, but in no case shall retention
by the landowner exceed five (5) hectares. Three (3) hectares may be
awarded to each child of the landowner, subject to the following
qualifications: (1) that he is at least fifteen (15) years of age; and (2) that
he is actually tilling the land or directly managing the farm; Provided, That
landowners whose land have been covered by Presidential Decree No. 27
shall be allowed to keep the area originally retained by them thereunder,
further, That original homestead grantees or 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.
The right to choose the area to be retained, which shall be compact or
contiguous, shall pertain to the landowner. Provided, however, That in
case the area selected for retention by the landowner is tenanted, the
tenant shall have the option to choose whether to remain therein or be a
beneficiary in the same or another agricultural land with similar or
comparable features. In case the tenant chooses to remain in the
retained area, he shall be considered a leaseholder and shall lose his right
to be a beneficiary under this Act. In case the tenant chooses to be a
beneficiary in another agricultural land, he loses his right as a lease-
holder to the land retained by the landowner. The tenant must exercise
this option within a period of one (1) year from the time the landowner
manifests his choice of the area for retention.
In all cases, the security of tenure of the farmers or farmworkers on the
land prior to the approval of this Act shall be respected.
Upon the efectivity of this Act, any sale, disposition, lease, management
contract or transfer of possession of private lands executed by the
original landowner in violation of this Act shall be null and
void; Provided, however, That those executed prior to this Act shall be
valid only when registered with the Register of Deeds within a period of
three (3) months after the efectivity of this Act. Thereafter, all Register of
Deeds shall inform the DAR within thirty (3) days of any transaction
involving agricultural lands in excess of five (5) hectares26.
defines the nature and incidents of a landowner's right of retention. For as long as
the area to be retained is compact or contiguous and it does not exceed the
retention ceiling of five (5) hectares, a landowner's choice of the area to be retained,
must prevail. Moreover, Administrative Order No. 4, series of 1991,27 which
supplies the details for the exercise of a landowner's retention rights, likewise
recognizes no limit to the prerogative of the landowner, although he is persuaded to
retain other lands instead to avoid dislocation of farmers.
Without doubt, this right of retention may be exercised over tenanted land
despite even the issuance of Certificate of Land Transfer (CLT) to farmer-
beneficiaries.28 What must be protected, however, is the right of the tenants
to opt to either stay on the land chosen to be retained by the landowner or
be a beneficiary in another agricultural land with similar or comparable
features.29
Finally. Land awards made pursuant to the government's agrarian
reform program are subject to the exercise by a landowner, who is so
qualified, of his right of retention.

Under P.D. No. 27, beneficiaries are issued CLTs to entitle them to possess lands.
Thereafter, they are issued Emancipation Patents (EPs) after compliance with all
necessary conditions. Such EPs, upon their presentation to the Register of Deeds,
result in the issuance of the corresponding transfer certificates of title (TCT) in favor
of the beneficiaries mentioned therein30.

Under R.A. No. 6657, the procedure has been simplified31. Only Certificates of Land
Ownership Award (CLOAs) are issued, in lieu of EPs, after compliance with all
prerequisites. Thereafter, upon presentation of the CLOAs to the Register of Deeds,
TCTs are issued to the designated beneficiaries. CLTs are no longer issued.

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the
landowner from retaining the area covered thereby. Under Administrative
Order No. 2, series of 199432, an EP or CLOA may be cancelled if the land
covered is later found to be part of the landowner's retained area.

A certificate of title accumulates in one document a comprehensive statement of

the status of the fee held by the owner of a parcel of land.33 As such, it is a mere
evidence of ownership and it does not constitute the title to the land itself. It cannot
confer title where no title has been acquired by any of the means provided by
law34.

Thus, we had, in the past, sustained the nullification of a certificate of title issued
pursuant to a homestead patent because the land covered was not part of the public
domain and as a result, the government had no authority to issue such patent in the
first place35. Fraud in the issuance of the patent, is also a ground for impugning the
validity of a certificate of title36. In other words, the invalidity of the patent or title
is sufficient basis for nullifying the certificate of title since the latter is merely an
evidence of the former.

In the instant case, the CLTs of private respondents over the subject 4.1685-hectare
riceland were issued without Eudosia Daez having been accorded her right of choice
as to what to retain among her landholdings. The transfer certificates of title thus
issued on the basis of those CLTs cannot operate to defeat the right of the heirs of
deceased Eudosia Daez to retain the said 4.1685 hectares of riceland.

WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of
Appeals, dated January 28, 1998, is REVERSED and SET ASIDE and the Decision of
the Office of the President, dated July 5, 1996, is hereby REINSTATED. In the
implementation of said decision, however, the Department of Agrarian Reform is
hereby ORDERED to fully accord to private respondents their rights under Section 6
of R.A. No. 6657.1âwphi1.nêt

No costs.

SO ORDERED.

Bellosillo and Mendoza, JJ., concur.

Quisumbing, J., took no part. Prior official action.
Buena, J., is on leave.

21
G.R. No. 139592 October 5, 2000
REPUBLIC OF THE PHILIPPINES rep. by the DEPARTMENT OF AGRARIAN
REFORM, petitioner,
vs.
HON. COURT OF APPEALS and GREEN CITY ESTATE & DEVELOPMENT
CORPORATION, respondents.
DECISION
GONZAGA-REYES, J.:
This is a petition for review by certiorari of the Decision1 of the Court of Appeals
dated December 9, 1998 that reversed the Order of petitioner, the Department of
Agrarian Reform (petitioner DAR), by exempting the parcels of land of private
respondent Green City Estate and Development Corporation (private respondent)
from agrarian reform. Also assailed in this instant petition is the Resolution dated
May 11, 1998 issued by the same court that denied the Motion for Reconsideration
of petitioner DAR.
The five parcels of land in issue has a combined area of approximately
112.0577 hectares situated at Barangay Punta, Municipality of Jala-Jala, Province of
Rizal, covered by Transfer Certificates of Title Nos. M-45856, M-45857, M-45858, M-
45859 and M-45860 of the Register of Deeds of Rizal. Private respondent acquired
the land by purchase on May 26, 1994 from Marcela Borja vda. De Torres. The
tax declarations classified the properties as agricultural.
On June 16, 1994, petitioner DAR issued a Notice of Coverage of the subject
parcels of land under compulsory acquisition pursuant to Section 7, Chapter II
of R.A. 6657 or the Comprehensive Land Reform Law of 1998 (CARL).
On July 21, 1994, private respondent filed with the DAR Regional Office an
application for exemption of the land from agrarian reform, pursuant to DAR
Administrative Order No. 6, series of 19942 and DOJ Opinion No. 44, series of 1990.
Administrative Order No. 6 provides the guidelines for exemption from the
Comprehensive Agrarian Reform Program (CARP) coverage while DOJ Opinion No.
44, Series of 1990, authorizes the DAR to approve conversion of agricultural lands
covered by RA 6651 to non-agricultural uses efective June 15 1988.
In support of its application for exemption, private respondent submitted the
following documents:
1. Certified photocopies of the titles and tax declarations.
2. Vicinity and location plans.
3. Certification of the Municipal Planning and Development Coordinator
of the Office of the Mayor of Jala-Jala.
4. Resolution No. R-36, series of 1981 of the HLURB.
5. Certification from the National Irrigation Administration.
On October 12, 1994, the DAR Regional Director recommended a denial of the
said petition, on the ground that private respondent "failed to substantiate
their (sic) allegation that the properties are indeed in the municipality’s
residential and forest conservation zone and that portions of the properties
are not irrigated nor irrigable".
On February 15, 1995, private respondent filed an Amended Petition for
Exemption/Exclusion from CARP coverage. This time, private respondent
alleged that the property should be exempted since it is within the residential
and forest conservation zones of the town plan/zoning ordinance of Jala-Jala.
The amended petition for exemption showed that a portion of about 15 hectares of
the land is irrigated riceland which private respondent ofered to sell to the farmer
beneficiaries or to the DAR. In support of its amended petition, private
respondent submitted the following additional documents:
1. Certification letter from the HLURB that the specific properties are
within the residential and forest conservation zone.
2. Certification from the HLURB that the town plan/zoning ordinance of
Jala-Jala was approved on December 2, 1981 by the Human Settlements
Commission.
22
3. Undertaking that the landowner is ready and willing to pay disturbance
compensation to the tenants for such amount as may be agreed upon or
directed by the DAR.
4. Vicinity plan.
5. Amended survey plan which indicates the irrigated riceland that is now
excluded from the application.
6. Certification of the Jala-Jala Municipal Planning and Development
Coordinator to the efect that the properties covered are within the
residential and forest conservation areas pursuant to the zoning
ordinance of Jala-Jala.
On October 19, 1995, the DAR Secretary issued an Order denying the
application for exemption of private respondent, on the grounds that the
land use plan of Jala-Jala, which differs from its land use map, intends to
develop 73% of Barangay Punta into an agricultural zone; that the
certification issued by the Housing and Land Use Regulatory Board (HLURB) is
not definite and specific; and that the certification issued by the National
Irrigation Authority (NIA) that the area is not irrigated nor programmed for
irrigation, is not conclusive on the DAR, since big areas in the municipality are
recipients of JICA-funded Integrated Jala-Jala Rural Development Projects.
The motion for reconsideration filed by private respondent was likewise denied by
the DAR Secretary.
Private respondent then appealed to the Court of Appeals. During the course of the
appeal, said court created a commission composed of three (3) members tasked to
conduct an ocular inspection and survey of the subject parcels of land and to submit
a report on the result of such inspection and survey. To verify the report of the
commission, the DAR constituted its own team to inspect and report on the
property in question. The verification report of the DAR, duly filed with the Court of
Appeals, objected to the report of the commission mainly due to the lack of specific
boundaries delineating the surveyed areas.
On December 9, 1998, the Court of Appeals issued its Decision that reversed
the assailed DAR orders, the dispositive portion of which reads:
"WHEREFORE, the Orders of the respondent Secretary dated October 19, 1995 and
November 15, 1995 are hereby REVERSED, and judgement is hereby rendered
declaring those portions of the land of the petitioner which are mountainous and
residential, as found by the Courts (sic) commissioners, to be exempt from the
Comprehensive Agrarian Reform Program, subject to their delineation. The records
of this case are hereby ordered remanded to the respondent Secretary for further
proceedings in the determination of the boundaries of the said areas."3
Hence this petition for review wherein petitioner DAR seeks the reversal of
the foregoing decision on the ground that the honorable Court of Appeals
erred:
1. WHEN IT RULED THAT THERE WAS NO DEFINITE CLASSIFICATION OF
THE PROPERTIES INVOLVED WHEN, PER THE CORRESPONDING TAX
DECLARATIONS, THEY ARE GENERALLY CLASSIFIED AS AGRICULTURAL.
2. WHEN IT RULED THAT THE PHYSICAL FEATURES OF THE LAND AS OF
1980 OR BEFORE AS APPEARING IN TABLE 3-3 OF THE ZONING
ORDINANCE IS THE PRESENT CLASSIFICATION OF THE LANDHOLDINGS
INVOLVED; and
3. WHEN IT MADE A RULING ON HOW SUBJECT LANDHOLDING BE
CLASSIFIED (WHETHER COVERED BY AGRARIAN REFORM FOR BEING
AGRICULTURAL LAND OR NOT) AND DISPOSED OF SOLELY ON THE BASIS
OF THE PHYSICAL CONDITION OF THE LAND IRRESPECTIVE OF THE LEGAL
ISSUE RAISED ON THEIR LEGAL CLASSIFICATION, A FUNCTION THAT IS
VESTED IN CONGRESS.4
The petition has no merit.
Republic Act No. 6657 otherwise known as the Comprehensive Agrarian
Reform Law (CARL) of 1998 covers all public and private agricultural lands.
The same law defines agricultural as "land devoted to agricultural activity as
defined in this Act and not classified as mineral, forest, residential,
commercial or industrial land".5
Private respondent sought exemption from the coverage of CARL on the ground that
its five parcels of land are not wholly agricultural. The land use map of the
municipality, certified by the Office of the Municipal Planning and Development
Coordinator (MPDC) of Jala-Jala and the report of the commission constituted by the
Court of Appeals established that the properties lie mostly within the residential and
forest conservation zone.
Petitioner DAR maintains that the subject properties have already been classified as
agricultural based on the tax declarations.6 The Office of the Solicitor General (OSG)
and petitioner DAR are one in contending that the classification of lands once
determined by law may not be varied or altered by the results of a mere ocular or
aerial inspection.7
We are unable to sustain petitioner’s contention. There is no law or
jurisprudence that holds that the land classification embodied in the tax
declarations is conclusive and final nor would proscribe any further inquiry.
Furthermore, the tax declarations are clearly not the sole basis of the
classification of a land. In fact, DAR Administrative Order No. 6 lists other
documents, aside from tax declarations, that must be submitted when
applying for exemption from CARP.8 In Halili vs. Court of Appeals9 , we
sustained the trial court when it ruled that the classification made by the Land
Regulatory Board of the land in question outweighed the classification stated in the
tax declaration. The classification of the Board in said case was more recent than
that of the tax declaration and was based on the present condition of the property
and the community thereat.10
In this case, the Court of Appeals was constrained to resort to an ocular
inspection of said properties through the commission it created considering
that the opinion of petitioner DAR conflicted with the land use map
submitted in evidence by private respondent. Respondent court also noted
that even from the beginning the properties of private respondent had no
definite delineation and classification.11 Hence, the survey of the properties
through the court appointed commissioners was the judicious and equitable
solution to finally resolve the issue of land classification and delineation.
The OSG stresses that to be exempt from CARP under DOJ Opinion No. 44, the land
must have been classified as industrial/residential before June 15, 1988. 12 Based
on this premise, the OSG points out that no such classification was presented except
the municipality’s alleged land use map in 1980 showing that subject parcels of land
fall within the municipality’s forest conservation zone.13 The OSG further argues
that assuming that a change in the use of the subject properties in 1980 may justify
their exemption from CARP under DOJ Opinion No. 44, such land use of 1980 was,
nevertheless, repealed/amended when the HLURB approved the municipality’s
Comprehensive Development Plan for Barangay Punta for the years 1980 to 2000 in
its Resolution No. 33, series of 1981.14 The plan for Barangay Punta, where the
parcels of land in issue are located, allegedly envision the development of the
barangay into a progressive agricultural community with the limited allocation of
only 51 hectares for residential use and none for commercial and forest
conservation zone use.15
However, a closer look at the development plan for the municipality of Jala-
Jala shows that Table 4-4 does not represent the present classification of land
in that municipality, but the proposed land use to be achieved. The existing
land use as of 1980 is shown by Table 3-3, wherein Barangay Punta is shown
to have a forest area of 35 hectares and open grassland (which was formerly
forested area) of 56 hectares. The land use map is consistent with this."16
Moreover, the commissioner’s report on the actual condition of the
properties confirms the fact that the properties are not wholly agricultural. In
essence, the report of the commission showed that the land of private respondent
consists of a mountainous area with an average 28 degree slope containing 66.5
hectares; a level, unirrigated area of 34 hectares of which 5 to 6 hectares are planted
to palay; and a residential area of 8 hectares.17 The finding that 66.5 hectares of the
112.0577 hectares of land of private respondent have an average slope of 28
degrees provides another cogent reason to exempt these portions of the properties
from the CARL. Section 10 of the CARL is clear on this point when it provides that "all
lands with eighteen percent (18%) slope and over, except those already developed
shall be exempt from the coverage of this Act".
Petitioner DAR and the OSG contest the finding of the Court of Appeals that the
subject parcels of land have a mountainous slope on the ground that this conclusion
was allegedly arrived at in a manner not in accord with established surveying
procedures.18 They also bewail the consideration given by the Court of Appeals to
the "slope" issue since this matter was allegedly never raised before the DAR and
the Court of Appeals.19 Petitioner DAR and the OSG thus claim that laches had
already set in.20
As pointed out earlier, the crux of the controversy is whether the subject parcels of
land in issue are exempt from the coverage of the CARL. The determination of the
classification and physical condition of the lands is therefore material in the
disposition of this case, for which purpose the Court of Appeals constituted
the commission to inspect and survey said properties. Petitioner DAR did not
object to the creation of a team of commissioners21 when it very well knew that
the survey and ocular inspection would eventually involve the determination of the
slope of the subject parcels of land. It is the protestation of petitioner that comes at
a belated hour. The team of commissioners appointed by respondent court was
composed persons who were mutually acceptable to the parties.22 Thus, in the
absence of any irregularity in the survey and inspection of the subject
properties, and none is alleged, the report of the commissioners deserves full
faith and credit and we find no reversible error in the reliance by the
appellate court upon said report.
WHEREFORE, the petition is hereby DENIED. The challenged Decision is AFFIRMED.
SO ORDERED

The foregoing arguments are untenable. We are in full agreement with

respondent Court when it rationalized that the land use map is the more
appropriate document to consider, thus:

"The petitioner (herein private respondent) presented a development plan of the

Municipality of Jala-Jala, which was approved by the Housing and Land Use
Regulatory Board (HLURB) on December 2, 1981. It also presented certifications
from the HLURB and the Municipal Planning and Development Coordinator of Jala-
Jala that the subject properties fall within the Residential and Forest Conservation
zones of the municipality. Extant on the record is a color-coded land use map of Jala-
Jala, showing that the petitioner’s land falls mostly within the Residential and Forest
Conservation zones. This notwithstanding, the respondent Secretary of Agrarian
Reform denied the petitioner’s application on the ground that the town plan of the
municipality, particularly Table 4-4 thereof, shows that Barangay Punta is intended to
remain and to become a progressive agricultural community in view of the
abundance of fertile agricultural areas in the barangay, and that there is a
discrepancy between the land use mapwhich identifies a huge forest conservation
zone and the land use plan which has no area classified as forest
conservation.1âwphi1

23
G.R. No. 112526 October 12, 2001
STA. ROSA REALTY DEVELOPMENT CORPORATION, petitioner,
vs.
COURT OF APPEALS, JUAN B. AMANTE, FRANCISCO L. ANDAL, LUCIA ANDAL,
ANDREA P. AYENDE, LETICIA P. BALAT, FILOMENA B. BATINO, ANICETO A. BURGOS,
JAIME A. BURGOS, FLORENCIA CANUBAS, LORETO A. CANUBAS, MAXIMO A.
CANUBAS, REYNALDO CARINGAL, QUIRINO C. CASALME, BENIGNO A. CRUZAT,
ELINO A. CRUZAT, GREGORIO F. CRUZAT, RUFINO C. CRUZAT, SERGIO CRUZAT,
SEVERINO F. CRUZAT, VICTORIA DE SAGUN, SEVERINO DE SAGUN, FELICISIMO A.
GONZALES, FRANCISCO A. GONZALES, GREGORIO GONZALES, LEODEGARIO N.
GONZALES, PASCUAL P. GONZALES, ROLANDO A. GONZALES, FRANCISCO A.
JUANGCO, GERVACIO A. JUANGCO, LOURDES U. LUNA, ANSELMO M. MANDANAS,
CRISANTO MANDANAS, EMILIO M. MANDANAS, GREGORIO A. MANDANAS,
MARIO G. MANDANAS, TEODORO MANDANAS, CONSTANCIO B. MARQUEZ,
EUGENIO B. MARQUEZ, ARMANDO P. MATIENZO, DANIEL D. MATIENZO,
MAXIMINO MATIENZO, PACENCIA P. MATIENZO, DOROTEA L. PANGANIBAN,
JUANITO T. PEREZ, MARIANITO T. PEREZ, SEVERO M. PEREZ, INOCENCIA S.
PASQUIZA, BIENVENIDO F. PETATE, IGNACIO F. PETATE, JUANITO PETATE, PABLO A.
PLATON, PRECILLO V. PLATON, AQUILINO B. SUBOL, CASIANO T. VILLA, DOMINGO
VILLA, JUAN T. VILLA, MARIO C. VILLA, NATIVIDAD A. VILLA, JACINTA S. ALVARADO,
RODOLFO ANGELES, DOMINGO A. CANUBAS, EDGARDO L. CASALME, QUIRINO DE
LEON, LEONILO M. ENRIQUEZ, CLAUDIA P. GONZALES, FELISA R. LANGUE,
QUINTILLANO LANGUE, REYNALDO LANGUE, ROMEO S. LANGUE, BONIFACIO
VILLA, ROGELIO AYENDE, ANTONIO B. FERNANDEZ, ZACARIAS HERRERA, ZACARIAS
HERRERA, REYNARIO U. LAZO, AGAPITO MATIENZO, DIONISIO F. PETATE, LITO G.
REYES, JOSE M. SUBOL, CELESTINO G. TOPI NO, ROSA C. AMANTE, SOTERA
CASALME, REMIGIO M. SILVERIO, THE SECRETARY OF AGRARIAN REFORM,
DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, LAND BANK OF THE
PHILIPPINES, REGISTER OF DEEDS OF LAGUNA, DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES REGIONAL EXECUTIVE DIRECTOR FOR REGION IV, and
REGIONAL AGRARIAN REFORM OFFICER FOR REGION IV, respondents.
PARDO, J.:
The case before the Court is a petition for review on certiorari of the decision of the
Court of Appeals1 affirming the decision of the Department of Agrarian Reform
Adjudication Board2 (hereafter DARAB) ordering the compulsory acquisition of
petitioner's property under the Comprehensive Agrarian Reform Program (CARP).
Petitioner Sta. Rosa Realty Development Corporation (hereafter, SRRDC) was
the registered owner of two parcels of land, situated at Barangay Casile,
Cabuyao, Laguna covered by TCT Nos. 81949 and 84891, with a total area of 254.6
hectares. According to petitioner, the parcels of land are watersheds, which
provide clean potable water to the Canlubang community, and that ninety
(90) light industries are now located in the area.3
Petitioner alleged that respondents usurped its rights over the property,
thereby destroying the ecosystem. Sometime in December 1985, respondents
filed a civil case4 with the Regional Trial Court, Laguna, seeking an easement
of a right of way to and from Barangay Casile. By way of counterclaim,
however, petitioner sought the ejectment of private respondents.
In October 1986 to August 1987, petitioner filed with the Municipal Trial Court,
Cabuyao, Laguna separate complaints for forcible entry against respondents.5
After the filing of the ejectment cases, respondents petitioned the
Department of Agrarian Reform (DAR) for the compulsory acquisition of the
SRRDC property under the CARP.
On August 11, 1989, the Municipal Agrarian Reform Officer (MARO) of
Cabuyao, Laguna issued a notice of coverage to petitioner and invited its
officials or representatives to a conference on August 18, 1989.6 During the
meeting, the following were present: representatives of petitioner, the Land Bank of
the Philippines, PARCCOM, PARO of Laguna, MARO of Laguna, the BARC Chairman of
Barangay Casile and some potential farmer beneficiaries, who are residents of
Barangay Casile, Cabuyao, Laguna. It was the consensus and recommendation of the
assembly that the landholding of SRRDC be placed under compulsory acquisition.
On August 17, 1989, petitioner filed with the Municipal Agrarian Reform Office
(MARO), Cabuyao, Laguna a "Protest and Objection" to the compulsory
acquisition of the property on the ground that the area was not appropriate
24
for agricultural purposes. The area was rugged in terrain with slopes of 18% and
above and that the occupants of the land were squatters, who were not entitled to
any land as beneficiaries.7
On August 29, 1989, the farmer beneficiaries together with the BARC chairman
answered the protest and objection stating that the slope of the land is not
18% but only 5-10% and that the land is suitable and economically viable for
agricultural purposes, as evidenced by the Certification of the Department of
Agriculture, municipality of Cabuyao, Laguna.8
On September 8, 1989, MARO Belen dela Torre made a summary investigation
report and forwarded the Compulsory Acquisition Folder Indorsement (CAFI)
to the Provincial Agrarian Reform Officer (hereafter, PARO).9
On September 21, 1989, PARO Durante Ubeda forwarded his endorsement of the
compulsory acquisition to the Secretary of Agrarian Reform.
On November 23, 1989, Acting Director Eduardo C. Visperas of the Bureau of Land
Acquisition and Development, DAR forwarded two (2) Compulsory Acquisition Claim
Folders covering the landholding of SRRDC, covered by TCT Nos. T-81949 and T-
84891 to the President, Land Bank of the Philippines for further review and
evaluation.10
On December 12, 1989, Secretary of Agrarian Reform Miriam Defensor
Santiago sent two (2) notices of acquisition11 to petitioner, stating that
petitioner's landholdings covered by TCT Nos. 81949 and 84891, containing
an area of 188.2858 and 58.5800 hectares, valued at P4,417,735.65 and
P1,220,229.93, respectively, had been placed under the Comprehensive
Agrarian Reform Program.
On February 6, 1990, petitioner SRRDC in two letters12 separately addressed to
Secretary Florencio B. Abad and the Director, Bureau of Land Acquisition and
Distribution, sent its formal protest, protesting not only the amount of
compensation ofered by DAR for the property but also the two (2) notices of
acquisition.
On March 17, 1990, Secretary Abad referred the case to the DARAB for
summary proceedings to determine just compensation under R. A. No. 6657,
Section 16.
On March 23, 1990, the LBP returned the two (2) claim folders previously referred
for review and evaluation to the Director of BLAD mentioning its inability to value
the SRRDC landholding due to some deficiencies.
On March 28, 1990, Executive Director Emmanuel S. Galvez wrote Land Bank
President Deogracias Vistan to forward the two (2) claim folders involving the
property of SRRDC to the DARAB for it to conduct summary proceedings to
determine the just compensation for the land.
On April 6, 1990, petitioner sent a letter to the Land Bank of the Philippines
stating that its property under the aforesaid land titles were exempt from
CARP coverage because they had been classified as watershed area and were
the subject of a pending petition for land conversion.
On May 10, 1990, Director Narciso Villapando of BLAD turned over the two (2) claim
folders (CACF's) to the Executive Director of the DAR Adjudication Board for proper
administrative valuation. Acting on the CACF's, on September 10, 1990, the Board
promulgated a resolution asking the office of the Secretary of Agrarian Reform (DAR)
to first resolve two (2) issues before it proceeds with the summary land valuation
proceedings.13
The issues that need to be threshed out were as follows: (1) whether the subject
parcels of land fall within the coverage of the Compulsory Acquisition Program of
the CARP; and (2) whether the petition for land conversion of the parcels of land
may be granted.
On December 7, 1990, the Office of the Secretary, DAR, through the
Undersecretary for Operations (Assistant Secretary for Luzon Operations) and
the Regional Director of Region IV, submitted a report answering the two
issues raised. According to them, firstly, by virtue of the issuance of the notice
of coverage on August 11, 1989, and notice of acquisition on December 12,
1989, the property is covered under compulsory acquisition. Secondly,
Administrative Order No. 1, Series of 1990, Section IV D also supports the
DAR position on the coverage of the said property. During the consideration of
the case by the Board, there was no pending petition for land conversion specifically
concerning the parcels of land in question.
On February 19, 1991, the Board sent a notice of hearing to all the parties
interested, setting the hearing for the administrative valuation of the subject parcels
of land on March 6, 1991. However, on February 22, 1991, Atty. Ma. Elena P.
Hernandez-Cueva, counsel for SRRDC, wrote the Board requesting for its assistance
in the reconstruction of the records of the case because the records could not be
found as her co-counsel, Atty. Ricardo Blancaflor, who originally handled the case for
SRRDC and had possession of all the records of the case was on indefinite leave and
could not be contacted. The Board granted counsel's request and moved the hearing
to April 4, 1991.
On March 18, 1991, SRRDC submitted a petition to the Board for the latter to resolve
SRRDC's petition for exemption from CARP coverage before any administrative
valuation of their landholding could be had by the Board.
On April 4, 1991, the initial DARAB hearing of the case was held and subsequently,
diferent dates of hearing were set without objection from counsel of SRRDC. During
the April 15, 1991 hearing, the subdivision plan of subject property at Casile,
Cabuyao, Laguna was submitted and marked as Exhibit "5" for SRRDC. At the hearing
on April 23, 1991, the Land Bank asked for a period of one month to value the land
in dispute.
At the hearing on April 23, 1991, certification from Deputy Zoning Administrator
Generoso B. Opina was presented. The certification issued on September 8, 1989,
stated that the parcels of land subject of the case were classified as "industrial Park"
per Sanguniang Bayan Resolution No. 45-89 dated March 29, 1989.14
To avert any opportunity that the DARAB might distribute the lands to the farmer
beneficiaries, on April 30, 1991, petitioner filed a petition15 with DARAB to
disqualify private respondents as beneficiaries. However, DARAB refused to address
the issue of beneficiaries.
In the meantime, on January 20, 1992, the Regional Trial Court, Laguna, Branch
24, rendered a decision,16 finding that private respondents illegally entered
the SRRDC property, and ordered them evicted.
On July 11, 1991, DAR Secretary Benjamin T. Leong issued a memorandum directing
the Land Bank of the Philippines to open a trust account in favor of SRRDC, for
P5,637,965.55, as valuation for the SRRDC property.
On December 19, 1991, DARAB promulgated a decision, the decretal portion of
which reads:
"WHEREFORE, based on the foregoing premises, the Board hereby
orders:
"1. The dismissal for lack of merit of the protest against the compulsory
coverage of the landholdings of Sta. Rosa Realty Development
Corporation (Transfer Certificates of Title Nos. 81949 and 84891 with an
area of 254.766 hectares) in Barangay Casile, Municipality of Cabuyao,
Province of Laguna under the Comprehensive Agrarian Reform Program is
hereby affirmed;
"2. The Land Bank of the Philippines (LBP) to pay Sta. Rosa Realty
Development Corporation the amount of Seven Million Eight Hundred
Forty-One Thousand, Nine Hundred Ninety Seven Pesos and Sixty-Four
centavos (P7,841,997.64) for its landholdings covered by the two (2)
Transfer Certificates of Title mentioned above. Should there be a
rejection of the payment tendered, to open, if none has yet been
made, a trust account for said amount in the name of Sta. Rosa Realty
Development Corporation;
"3. The Register of Deeds of the Province of Laguna to cancel with
dispatch Transfer certificate of Title Nos. 84891 and 81949 and new one
be issued in the name of the Republic of the Philippines, free from liens
and encumbrances;
"4 The Department of Environment and Natural Resources either through
its Provincial Office in Laguna or the Regional Office, Region IV, to conduct
a final segregation survey on the lands covered by Transfer certificate of
Title Nos. 84891 and 81949 so the same can be transferred by the
Register of Deeds to the name of the Republic of the Philippines;
25
"5. The Regional Office of the Department of Agrarian Reform through its
Municipal and Provincial Agrarian Reform Office to take immediate
possession on the said landholding after Title shall have been transferred
to the name of the Republic of the Philippines, and distribute the same to
the immediate issuance of Emancipation Patents to the farmer-
beneficiaries as determined by the Municipal Agrarian Reform Office of
Cabuyao, Laguna."17
On January 20, 1992, the Regional Trial Court, Laguna, Branch 24, rendered a
decision in Civil Case No. B-233318ruling that respondents were builders in
bad faith.
On February 6, 1992, petitioner filed with the Court of Appeals a petition for
review of the DARAB decision.19 On November 5, 1993, the Court of Appeals
promulgated a decision affirming the decision of DARAB. The decretal portion
of the Court of Appeals decision reads:
"WHEREFORE, premises considered, the DARAB decision dated
September 19, 1991 is AFFIRMED, without prejudice to petitioner Sta.
Rosa Realty Development Corporation ventilating its case with the Special
Agrarian Court on the issue of just compensation."20Hence, this
petition.21
On December 15, 1993, the Court issued a Resolution which reads:
"G. R. Nos. 112526 (Sta. Rosa Realty Development Corporation vs. Court
of Appeals, et. al.) – Considering the compliance, dated December 13,
1993, filed by counsel for petitioner, with the resolution of December 8,
1993 which required petitioner to post a cash bond or surety bond in the
amount of P1,500,000.00 Pesos before issuing a temporary restraining
order prayed for, manifesting that it has posted a CASH BOND in the same
amount with the Cashier of the Court as evidenced by the attached
official receipt no. 315519, the Court resolved to ISSUE the Temporary
Retraining Order prayed for.
"The Court therefore, resolved to restrain: (a) the Department of Agrarian
Reform Adjudication Board from enforcing its decision dated December
19, 1991 in DARAB Case No. JC-R-IV-LAG-0001, which was affirmed by the
Court of Appeals in a Decision dated November 5, 1993, and which
ordered, among others, the Regional Office of the Department of
Agrarian Reform through its Municipal and Provincial Reform Office to
take immediate possession of the landholding in dispute after title shall
have been transferred to the name of the Republic of the Philippines and
to distribute the same through the immediate issuance of Emancipation
Patents to the farmer-beneficiaries as determined by the Municipal
Agrarian Officer of Cabuyao, Laguna, (b) The Department of Agrarian
Reform and/or the Department of Agrarian Reform Adjudication Board,
and all persons acting for and in their behalf and under their authority
from entering the properties involved in this case and from introducing
permanent infrastructures thereon; and (c) the private respondents from
further clearing the said properties of their green cover by the cutting or
burning of trees and other vegetation, efective today until further orders
from this Court."22
The main issue raised is whether the property in question is covered by CARP
despite the fact that the entire property formed part of a watershed area prior to
the enactment of R. A. No. 6657.
Under Republic Act No. 6657, there are two modes of acquisition of private
land: compulsory and voluntary. In the case at bar, the Department of
Agrarian Reform sought the compulsory acquisition of subject property under
R. A. No. 6657, Section 16, to wit:
"Sec. 16. Procedure for Acquisition of Private Lands. – For purposes of
acquisition of private lands, the following procedures shall be followed:
a.) After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the land
to the owners thereof, by personal delivery or registered mail,
and post the same in a conspicuous place in the municipal
building and barangay hall of the place where the property is
located. Said notice shall contain the ofer of the DAR to pay
corresponding value in accordance with the valuation set forth
in Sections 17, 18, and other pertinent provisions hereof.
 b.) Within thirty (30) days from the date of the receipt of
written notice by personal delivery or registered mail, the
landowner, his administrator or representative shall inform the
DAR of his acceptance or rejection of the ofer.
c.) If the landowner accepts the ofer of the DAR, the LBP shall
pay the landowner the purchase price of the land within thirty
(30) days after he executes and delivers a deed of transfer in
favor of the government and other muniments of title.
d.) In case of rejection or failure to reply, the DAR shall
conduct summary administrative proceedings to determine
the compensation for the land requiring the landowner, the
LBP and other interested parties to submit fifteen (15) days
from receipt of the notice. After the expiration of the above
period, the matter is deemed submitted for decision. The DAR
shall decide the case within thirty (30) days after it is
submitted for decision.
e.) Upon receipt by the landowner of the corresponding
payment, or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank
designated by the DAR of the compensation in cash or in LBP
bonds in accordance with this act, the DAR shall make
immediate possession of the land and shall request the proper
Register of Deeds to issue Transfer Certificate of Titles (TCT) in
the name of the Republic of the Philippines. The DAR shall
thereafter proceed with the redistribution of the land to the
qualified beneficiaries.
f.) Any party who disagrees with the decision may bring the
matter to the court23 of proper jurisdiction for final
determination of just compensation.
In compulsory acquisition of private lands, the landholding, the landowners and
farmer beneficiaries must first be identified. After identification, the DAR shall send
a notice of acquisition to the landowner, by personal delivery or registered mail, and
post it in a conspicuous place in the municipal building and barangay hall of the
place where the property is located.
Within thirty (30) days from receipt of the notice of acquisition, the landowner, his
administrator or representative shall inform the DAR of his acceptance or rejection
of the ofer.
If the landowner accepts, he executes and delivers a deed of transfer in favor of the
government and surrenders the certificate of title. Within thirty (30) days from the
execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays the
owner the purchase price. If the landowner accepts, he executes and delivers a deed
of transfer in favor of the government and surrenders the certificate of title. Within
thirty days from the execution of the deed of transfer, the Land Bank of the
Philippines (LBP) pays the owner the purchase price. If the landowner rejects the
DAR's ofer or fails to make a reply, the DAR conducts summary administrative
proceedings to determine just compensation for the land. The landowner, the LBP
representative and other interested parties may submit evidence on just
compensation within fifteen days from notice. Within thirty days from submission,
the DAR shall decide the case and inform the owner of its decision and the amount
of just compensation.
Upon receipt by the owner of the corresponding payment, or, in case of rejection or
lack of response from the latter, the DAR shall deposit the compensation in cash or
in LBP bonds with an accessible bank. The DAR shall immediately take possession of
the land and cause the issuance of a transfer certificate of title in the name of the
Republic of the Philippines. The land shall then be redistributed to the farmer
beneficiaries. Any party may question the decision of the DAR in the special agrarian
courts (provisionally the Supreme Court designated branches of the regional trial
court as special agrarian courts) for final determination of just compensation.
The DAR has made compulsory acquisition the priority mode of land acquisition to
hasten the implementation of the Comprehensive Agrarian Reform Program (CARP).
Under Sec. 16 of the CARL, the first step in compulsory acquisition is the
identification of the land, the landowners and the farmer beneficiaries. However,
the law is silent on how the identification process shall be made. To fill this gap, on
July 26, 1989, the DAR issued Administrative Order No. 12, series of 1989, which set
26
the operating procedure in the identification of such lands. The procedure is as
follows:
A. The Municipal Agrarian Reform Officer (MARO), with the assistance of
the pertinent Barangay Agrarian Reform Committee (BARC), shall:
1. Update the masterlist of all agricultural lands covered under the CARP
in his area of responsibility; the masterlist should include such
information as required under the attached CARP masterlist form which
shall include the name of the landowner, landholding area, TCT/OCT
number, and tax declaration number.
2. Prepare the Compulsory Acquisition Case Folder (CACF) for each title
(OCT/TCT) or landholding covered under Phase I and II of the CARP except
those for which the landowners have already filed applications to avail of
other modes of land acquisition. A case folder shall contain the following
duly accomplished forms:
a) CARP CA Form 1—MARO investigation report
b) CARP CA Form No 2 – Summary investigation report findings
and evaluation
c) CARP CA Form 3—Applicant's Information sheet
d) CARP CA Form 4 – Beneficiaries undertaking
e) CARP CA Form 5 – Transmittal report to the PARO
The MARO/BARC shall certify that all information contained in the above-
mentioned forms have been examined and verified by him and that the
same are true and correct.
3. Send notice of coverage and a letter of invitation to a
conference/meeting to the landowner covered by the Compulsory Case
Acquisition Folder. Invitations to the said conference meeting shall also
be sent to the prospective farmer-beneficiaries, the BARC
representatives, the Land Bank of the Philippines (LBP) representative,
and the other interested parties to discuss the inputs to the valuation of
the property.
He shall discuss the MARO/BARC investigation report and solicit the
views, objection, agreements or suggestions of the participants thereon.
The landowner shall also ask to indicate his retention area. The minutes
of the meeting shall be signed by all participants in the conference and
shall form an integral part of the CACF.
4. Submit all completed case folders to the Provincial Agrarian Reform
Officer (PARO).
B. The PARO shall:
1. Ensure the individual case folders are forwarded to him by his MAROs.
2. Immediately upon receipt of a case folder, compute the valuation of
the land in accordance with A.O. No. 6, series of 1988. The valuation
worksheet and the related CACF valuation forms shall be duly certified
correct by the PARO and all the personnel who participated in the
accomplishment of these forms.
3. In all cases, the PARO may validate the report of the MARO through
ocular inspection and verification of the property. This ocular inspection
and verification shall be mandatory when the computed value exceeds
P500,000 per estate.
4. Upon determination of the valuation, forward the case folder, together
with the duly accomplished valuation forms and his recommendations, to
the Central Office.
The LBP representative and the MARO concerned shall be furnished a
copy each of his report.
C. DAR Central Office, specifically through the Bureau of Land Acquisition
and Distribution (BLAD), shall:
1. Within three days from receipt of the case folder from the PARO,
review, evaluate and determine the final land valuation of the property
covered by the case folder. A summary review and evaluation report shall
 be prepared and duly certified by the BLAD Director and the personnel
directly participating in the review and final valuation.
2. Prepare, for the signature of the Secretary or her duly authorized
representative, a notice of acquisition (CARP Form 8) for the subject
property. Serve the notice to the landowner personally or through
registered mail within three days from its approval. The notice shall
include among others, the area subject of compulsory acquisition, and
the amount of just compensation ofered by DAR.
3. Should the landowner accept the DAR's ofered value, the BLAD shall
prepare and submit to the Secretary for approval the order of acquisition.
However, in case of rejection or non-reply, the DAR Adjudication Board
(DARAB) shall conduct a summary administrative hearing to determine
just compensation, in accordance with the procedures provided under
Administrative Order No. 13, series of 1989. Immediately upon receipt of
the DARAB's decision on just compensation, the BLAD shall prepare and
submit to the Secretary for approval the required order of acquisition.
4. Upon the landowner's receipt of payment, in case of acceptance, or
upon deposit of payment in the designated bank, in case of rejection or
non-response, the Secretary shall immediately direct the pertinent
Register of Deeds to issue the corresponding Transfer Certificate of Title
(TCT) in the name of the Republic of the Philippines. Once the property is
transferred, the DAR, through the PARO, shall take possession of the land
for redistribution to qualified beneficiaries."
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian
Reform Officer (MARO) keep an updated master list of all agricultural lands under
the CARP in his area of responsibility containing all the required information. The
MARO prepares a Compulsory Acquisition Case Folder (CACF) for each title covered
by CARP. The MARO then sends the landowner a "Notice of Coverage" and a "letter
of invitation" to a "conference/ meeting" over the land covered by the CACF. He also
sends invitations to the prospective farmer-beneficiaries, the representatives of the
Barangay Agrarian Reform Committee (BARC), the Land Bank of the Philippines (LBP)
and other interested parties to discuss the inputs to the valuation of the property
and solicit views, suggestions, objections or agreements of the parties. At the
meeting, the landowner is asked to indicate his retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform Officer
(PARO) who shall complete the valuation of the land. Ocular inspection and
verification of the property by the PARO shall be mandatory when the computed
value of the estate exceeds P500,000.00. Upon determination of the valuation, the
PARO shall forward all papers together with his recommendation to the Central
Office of the DAR. The DAR Central Office, specifically, the Bureau of Land
Acquisition and Distribution (BLAD) shall prepare, on the signature of the Secretary
or his duly authorized representative, a notice of acquisition of the subject property.
From this point, the provisions of R. A. No. 6657, Section 16 shall apply.
For a valid implementation of the CARP Program, two notices are required: (1)
the notice of coverage and letter of invitation to a preliminary conference
sent to the landowner, the representative of the BARC, LBP, farmer
beneficiaries and other interested parties pursuant to DAR A. O. No. 12, series
of 1989; and (2) the notice of acquisition sent to the landowner under Section
16 of the CARL.
The importance of the first notice, that is, the notice of coverage and the
letter of invitation to a conference, and its actual conduct cannot be
understated. They are steps designed to comply with the requirements of
administrative due process. The implementation of the CARL is an exercise of the
State's police power and the power of eminent domain. To the extent that the CARL
prescribes retention limits to the landowners, there is an exercise of police power
for the regulation of private property in accordance with the Constitution. But
where, to carry out such regulation, the owners are deprived of lands they own in
excess of the maximum area allowed, there is also a taking under the power of
eminent domain. The taking contemplated is not mere limitation of the use of the
land. What is required is the surrender of the title to and physical possession of the
excess and all beneficial rights accruing to the owner in favor of the farmer
beneficiary.
In the case at bar, DAR has executed the taking of the property in question.
However, payment of just compensation was not in accordance with the
27
procedural requirement. The law required payment in cash or LBP bonds, not
by trust account as was done by DAR.
In Association of Small Landowners in the Philippines v. Secretary of Agrarian
Reform, we held that "The CARP Law, for its part, conditions the transfer of
possession and ownership of the land to the government on receipt of 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."24
Consequently, petitioner questioned before the Court of Appeals DARAB's
decision ordering the compulsory acquisition of petitioner's property.25 Here,
petitioner pressed the question of whether the property was a watershed, not
covered by CARP.
Article 67 of the Water Code of the Philippines (P. D. No. 1067) provides:
"Art. 67. Any watershed or any area of land adjacent to any surface water
or overlying any ground water may be declared by the Department of
Natural resources as a protected area. Rules and Regulations may be
promulgated by such Department to prohibit or control such activities by
the owners or occupants thereof within the protected area which may
damage or cause the deterioration of the surface water or ground water
or interfere with the investigation, use, control, protection, management
or administration of such waters."
Watersheds may be defined as "an area drained by a river and its tributaries
and enclosed by a boundary or divide which separates it from adjacent
watersheds." Watersheds generally are outside the commerce of man, so why
was the Casile property titled in the name of SRRDC? The answer is simple. At
the time of the titling, the Department of Agriculture and Natural Resources
had not declared the property as watershed area. The parcels of land in
Barangay Casile were declared as "PARK" by a Zoning Ordinance adopted by
the municipality of Cabuyao in 1979, as certified by the Housing and Land
Use Regulatory Board. On January 5, 1994, the Sangguniang Bayan of
Cabuyao, Laguna issued a Resolution26 voiding the zoning classification of
the land at Barangay Casile as Park and declaring that the land is now
classified as agricultural land.
The authority of the municipality of Cabuyao, Laguna to issue zoning
classification is an exercise of its police power, not the power of eminent
domain. "A zoning ordinance is defined as a local city or municipal legislation which
logically arranges, prescribes, defines and apportions a given political subdivision
into specific land uses as present and future projection of needs."27
In Natalia Realty, Inc. v. Department of Agrarian Reform28 we held that lands
classified as non-agricultural prior to the effectivity of the CARL may not be
compulsorily acquired for distribution to farmer beneficiaries.
However, more than the classification of the subject land as PARK is the fact
that subsequent studies and survey showed that the parcels of land in
question form a vital part of a watershed area.29
Now, petitioner has ofered to prove that the land in dispute is a "watershed or part
of the protected area for watershed purposes." Ecological balances and
environmental disasters in our day and age seem to be interconnected. Property
developers and tillers of the land must be aware of this deadly combination. In the
case at bar, DAR included the disputed parcels of land for compulsory
acquisition simply because the land was allegedly devoted to agriculture and
was titled to SRRDC, hence, private and alienable land that may be subject to
CARP.
However, the scenario has changed, after an in-depth study, survey and
reassessment. We cannot ignore the fact that the disputed parcels of land
form a vital part of an area that need to be protected for watershed purposes.
In a report of the Ecosystems Research and Development Bureau (ERDB), a research
arm of the DENR, regarding the environmental assessment of the Casile and
Kabanga-an river watersheds, they concluded that:
"The Casile barangay covered by CLOA in question is situated in the
heartland of both watersheds. Considering the barangays proximity to
 the Matangtubig waterworks, the activities of the farmers which are in
conflict with proper soil and water conservation practices jeopardize and
endanger the vital waterworks. Degradation of the land would have
double edge detrimental efects. On the Casile side this would mean
direct siltation of the Mangumit river which drains to the water
impounding reservoir below. On the Kabanga-an side, this would mean
destruction of forest covers which acts as recharged areas of the Matang
Tubig springs. Considering that the people have little if no direct interest
in the protection of the Matang Tubig structures they couldn't care less
even if it would be destroyed.
The Casile and Kabanga-an watersheds can be considered a most vital life
support system to thousands of inhabitants directly and indirectly
afected by it. From these watersheds come the natural God-given
precious resource – water. x x x x x
Clearing and tilling of the lands are totally inconsistent with sound
watershed management. More so, the introduction of earth disturbing
activities like road building and erection of permanent infrastructures.
Unless the pernicious agricultural activities of the Casile farmers are
immediately stopped, it would not be long before these watersheds
would cease to be of value. The impact of watershed degredation
threatens the livelihood of thousands of people dependent upon it.
Toward this, we hope that an acceptable comprehensive watershed
development policy and program be immediately formulated and
implemented before the irreversible damage finally happens.
18% and over, which exempted the land from the coverage of CARL. R. A. No.
6657, Section 10, provides:
"Section 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 appurtenent 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 coverage
of this Act."
Hence, during the hearing at DARAB, there was proof showing that the
disputed parcels of land may be excluded from the compulsory acquisition
coverage of CARP because of its very high slopes.
To resolve the issue as to the true nature of the parcels of land involved in the
case at bar, the Court directs the DARAB to conduct a re-evaluation of the
issue.
IN VIEW WHEREOF, the Court SETS ASIDE the decision of the Court of Appeals in CA-
G. R. SP No. 27234.

Hence, the following are recommended: In lieu thereof, the Court REMANDS the case to the DARAB for re-evaluation and
determination of the nature of the parcels of land involved to resolve the issue of its
7.2 The Casile farmers should be relocated and given financial
coverage by the Comprehensive Land Reform Program.
assistance.
In the meantime, the efects of the CLOAs issued by the DAR to supposed farmer
7.3 Declaration of the two watersheds as critical and in need
beneficiaries shall continue to be stayed by the temporary restraining order issued
of immediate rehabilitation.
on December 15, 1993, which shall remain in efect until final decision on the case.
7.4 A comprehensive and detailed watershed management
No costs.
plan and program be formulated and implemented by the
Canlubang Estate in coordination with pertinent government SO ORDERED.
agencies."30
Davide, Jr., C.J., (Chairman), and Ynares-Santiago, JJ., concur.
The ERDB report was prepared by a composite team headed by Dr. Emilio Rosario, Puno, J., no part due to relationship.
the ERDB Director, who holds a doctorate degree in water resources from U.P. Los Kapunan, J., on official leave.
Banos in 1987; Dr. Medel Limsuan, who obtained his doctorate degree in watershed
management from Colorado University (US) in 1989; and Dr. Antonio M. Dano, who
obtained his doctorate degree in Soil and Water management Conservation from
U.P. Los Banos in 1993.

Also, DENR Secretary Angel Alcala submitted a Memorandum for the President
dated September 7, 1993 (Subject: PFVR HWI Ref.: 933103 Presidential Instructions
on the Protection of Watersheds of the Canlubang Estates at Barrio Casile, Cabuyao,
Laguna) which reads:

"It is the opinion of this office that the area in question must be
maintained for watershed purposes for ecological and environmental
considerations, among others. Although the 88 families who are the
proposed CARP beneficiaries will be afected, it is important that a larger
view of the situation be taken as one should also consider the adverse
efect on thousands of residents downstream if the watershed will not be
protected and maintained for watershed purposes.

"The foregoing considered, it is recommended that if possible, an

alternate area be allocated for the afected farmers, and that the
Canlubang Estates be mandated to protect and maintain the area in
question as a permanent watershed reserved."31

The definition does not exactly depict the complexities of a watershed. The
most important product of a watershed is water which is one of the most
important human necessity. The protection of watersheds ensures an
adequate supply of water for future generations and the control of
flashfloods that not only damage property but cause loss of lives. Protection
of watersheds is an "intergenerational responsibility" that needs to be
answered now.

Another factor that needs to be mentioned is the fact that during the DARAB
hearing, petitioner presented proof that the Casile property has slopes of

28
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
non-academic 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.
29
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
Agri-Business 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 socio-economic 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
30
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,
31
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 complainants/petitioners are not entitled to the rights they are demanding, it
supplied). is an erroneous interpretation of authority for that quasi-judicial body to
order private property to be awarded to future beneficiaries. The order
Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the
segregation 400 hectares of the CMU land was issued on a finding that the
jurisdiction of the DARAB is limited only to matters involving the
complainants are not entitled as beneficiaries, and on an erroneous
implementation of the CARP. More specifically, it is restricted to agrarian
assumption that the CMU land which is excluded or exempted under the law
cases and controversies involving lands falling within the coverage of the
is subject to the coverage of the CARP. Going beyond what was asked by the
aforementioned program. It does not include those which are actually,
complainants who were not entitled to the relief prayed the complainants
directly and exclusively used and found to be necessary for, among such
who were not entitled to the relief prayed for, constitutes a grave abuse of
purposes, school sites and campuses for setting up experimental farm
discretion because it implies such capricious and whimsical exercise of
stations, research and pilot production centers, etc.
judgment as is equivalent to lack of jurisdiction.
Consequently, the DARAB has no power to try, hear and adjudicate the case
The education of the youth and agrarian reform are admittedly among the
pending before it involving a portion of the CMU's titled school site, as the
highest priorities in the government socio-economic programs. In this case,
portion of the CMU land reservation ordered segregated is actually, directly
neither need give way to the other. Certainly, there must still be vast tracts of
and exclusively used and found by the school to be necessary for its
agricultural land in Mindanao outside the CMU land reservation which can be
purposes. The CMU has constantly raised the issue of the DARAB's lack of
made available to landless peasants, assuming the claimants here, or some of
jurisdiction and has questioned the respondent's authority to hear, try and
them, can qualify as CARP beneficiaries. To our mind, the taking of the CMU
adjudicate the case at bar. Despite the law and the evidence on record
land which had been segregated for educational purposes for distribution to
tending to establish that the fact that the DARAB had no jurisdiction, it made
yet uncertain beneficiaries is a gross misinterpretation of the authority and
the adjudication now subject of review.
jurisdiction granted by law to the DARAB.
Whether the DARAB has the authority to order the segregation of a portion
The decision in this case is of far-reaching significance as far as it concerns
of a private property titled in the name of its lawful owner, even if the
state colleges and universities whose resources and research facilities may be
claimant is not entitled as a beneficiary, is an issue we feel we must resolve.
gradually eroded by misconstruing the exemptions from the CARP. These
The quasi-judicial powers of DARAB are provided in Executive Order No. 129-
state colleges and universities are the main vehicles for our scientific and
A, quoted hereunder in so far as pertinent to the issue at bar:
technological advancement in the field of agriculture, so vital to the existence,
Sec. 13. –– AGRARIAN REFORM ADJUDICATION BOARD growth and development of this country.
— There is hereby created an Agrarian Reform
It is the opinion of this Court, in the light of the foregoing analysis and for the
Adjudication Board under the office of the Secretary. . . .
reasons indicated, that the evidence is sufficient to sustain a finding of grave
The Board shall assume the powers and functions with
abuse of discretion by respondents Court of Appeals and DAR Adjudication
respect to adjudication of agrarian reform cases under
Board. We hereby declare the decision of the DARAB dated September 4,
Executive Order 229 and this Executive Order . . .
1989 and the decision of the Court of Appeals dated August 20, 1990,
Sec. 17. –– QUASI JUDICIAL POWERS OF THE DAR. — The affirming the decision of the quasi-judicial body, as null and void and hereby
DAR is hereby vested with quasi-judicial powers to order that they be set aside, with costs against the private respondents.
determine and adjudicate agrarian reform matters and
SO ORDERED
shall have exclusive original jurisdiction over all matters
including implementation of Agrarian Reform. Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Medialdea,
Regalado, Davide, Jr., Romero, Nocon, and Melo, JJ., concur.
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
32
G.R. No. 127876 December 17, 1999
ROXAS & CO., INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM,
SECRETARY OF AGRARIAN REFORM, DAR REGIONAL DIRECTOR FOR REGION IV,
MUNICIPAL AGRARIAN REFORM OFFICER OF NASUGBU, BATANGAS and
DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, respondents.
PUNO, J.:
This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and
the validity of the acquisition of these haciendas by the government under Republic
Act No. 6657, the Comprehensive Agrarian Reform Law of 1988.
Petitioner Roxas & Co. is a domestic corporation and is the registered owner
of three haciendas, namely, Haciendas Palico, Banilad and Caylaway, all
located in the Municipality of Nasugbu, Batangas. Hacienda Palico is 1,024 hectares
in area and is registered under Transfer Certificate of Title (TCT) No. 985. This land is
covered by Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and 0354. Hacienda
Banilad is 1,050 hectares in area, registered under TCT No. 924 and covered by Tax
Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571 hectares in
area and is registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665.
The events of this case occurred during the incumbency of then President Corazon
C. Aquino. In February 1986, President Aquino issued Proclamation No. 3
promulgating a Provisional Constitution. As head of the provisional government, the
President exercised legislative power "until a legislature is elected and convened
under a new Constitution." 1 In the exercise of this legislative power, the President
signed on July 22, 1987, Proclamation No. 131 instituting a Comprehensive
Agrarian Reform Program and Executive Order No. 229 providing the
mechanisms necessary to initially implement the program.
On July 27, 1987, the Congress of the Philippines formally convened and took
over legislative power from the President. 2 This Congress passed Republic
Act No. 6657, the Comprehensive Agrarian Reform Law (CARL) of 1988. The
Act was signed by the President on June 10, 1988 and took efect on June 15, 1988.
Before the law's effectivity, on May 6, 1988, petitioner filed with respondent
DAR a voluntary offer to sell Hacienda Caylaway pursuant to the provisions of
E.O. No. 229. Haciendas Palico and Banilad were later placed under
compulsory acquisition by respondent DAR in accordance with the CARL.
Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal
Agrarian Reform Officer (MARO) of Nasugbu, Batangas, sent a notice entitled
"Invitation to Parties" to petitioner. The Invitation was addressed to "Jaime
Pimentel, Hda. Administrator, Hda. Palico." 3 Therein, the MARO invited petitioner
to a conference on October 6, 1989 at the DAR office in Nasugbu to discuss the
results of the DAR investigation of Hacienda Palico, which was "scheduled for
compulsory acquisition this year under the Comprehensive Agrarian Reform
Program." 4
On October 25, 1989, the MARO completed three (3) Investigation Reports
after investigation and ocular inspection of the Hacienda. In the first Report,
the MARO found that 270 hectares under Tax Declaration Nos. 465, 466, 468 and
470 were "flat to undulating (0-8% slope)" and actually occupied and cultivated by
34 tillers of sugarcane. 5 In the second Report, the MARO identified as "flat to
undulating" approximately 339 hectares under Tax Declaration No. 0234 which also
had several actual occupants and tillers of sugarcane; 6 while in the third Report, the
MARO found approximately 75 hectare under Tax Declaration No. 0354 as "flat to
undulating" with 33 actual occupants and tillers also of sugarcane. 7
On October 27, 1989, a "Summary Investigation Report" was submitted and
signed jointly by the MARO, representatives of the Barangay Agrarian Reform
Committee (BARC) and Land Bank of the Philippines (LBP), and by the
Provincial Agrarian Reform Officer (PARO). The Report recommended that
333.0800 hectares of Hacienda Palico be subject to compulsory acquisition at
a value of P6,807,622.20. 8 The following day, October 28, 1989, two (2) more
Summary Investigation Reports were submitted by the same officers and
33
representatives. They recommended that 270.0876 hectares and 75.3800
hectares be placed under compulsory acquisition at a compensation of
P8,109,739.00 and P2,188,195.47, respectively. 9
On December 12, 1989, respondent DAR through then Department Secretary
Miriam D. Santiago sent a "Notice of Acquisition" to petitioner. The Notice was
addressed as follows:
Roxas y Cia, Limited
Soriano Bldg., Plaza Cervantes
Manila, Metro Manila. 10
Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were
subject to immediate acquisition and distribution by the government under the
CARL; that based on the DAR's valuation criteria, the government was ofering
compensation of P3.4 million for 333.0800 hectares; that whether this ofer was to
be accepted or rejected, petitioner was to inform the Bureau of Land Acquisition
and Distribution (BLAD) of the DAR; that in case of petitioner's rejection or failure to
reply within thirty days, respondent DAR shall conduct summary administrative
proceedings with notice to petitioner to determine just compensation for the land;
that if petitioner accepts respondent DAR's ofer, or upon deposit of the
compensation with an accessible bank if it rejects the same, the DAR shall take
immediate possession of the land. 11
Almost two years later, on September 26, 1991, the DAR Regional Director
sent to the LBP Land Valuation Manager three (3) separate Memoranda
entitled "Request to Open Trust Account." Each Memoranda requested that a
trust account representing the valuation of three portions of Hacienda Palico
be opened in favor of the petitioner in view of the latter's rejection of its
offered value. 12
Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for
conversion of Haciendas Palico and Banilad from agricultural to non-
agricultural lands under the provisions of the CARL. 13 On July 14, 1993,
petitioner sent a letter to the DAR Regional Director reiterating its request for
conversion of the two haciendas. 14
Despite petitioner's application for conversion, respondent DAR proceeded
with the acquisition of the two Haciendas. The LBP trust accounts as
compensation for Hacienda Palico were replaced by respondent DAR with cash and
LBP bonds. 15 On October 22, 1993, from the mother title of TCT No. 985 of the
Hacienda, respondent DAR registered Certificate of Land Ownership Award (CLOA)
No. 6654. On October 30, 1993, CLOA's were distributed to farmer beneficiaries. 16
Hacienda Banilad
On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu,
Batangas, sent a notice to petitioner addressed as follows:
Mr. Jaime Pimentel
Hacienda Administrator
Hacienda Banilad
Nasugbu, Batangas 17
The MARO informed Pimentel that Hacienda Banilad was subject to
compulsory acquisition under the CARL; that should petitioner wish to
avail of the other schemes such as Voluntary Ofer to Sell or Voluntary
Land Transfer, respondent DAR was willing to provide assistance
thereto. 18
On September 18, 1989, the MARO sent an "Invitation to Parties" again to
Pimentel inviting the latter to attend a conference on September 21, 1989 at the
MARO Office in Nasugbu to discuss the results of the MARO's investigation over
Hacienda Banilad. 19
On September 21, 1989, the same day the conference was held, the MARO
submitted two (2) Reports. In his first Report, he found that approximately 709
hectares of land under Tax Declaration Nos. 0237 and 0236 were "flat to undulating
(0-8% slope)." On this area were discovered 162 actual occupants and tillers of
sugarcane. 20 In the second Report, it was found that approximately 235 hectares
under Tax Declaration No. 0390 were "flat to undulating," on which were 92 actual
occupants and tillers of sugarcane. 21
The results of these Reports were discussed at the conference. Present in the
conference were representatives of the prospective farmer beneficiaries, the BARC,
the LBP, and Jaime Pimentel on behalf of the landowner. 22 After the meeting, on
the same day, September 21, 1989, a Summary Investigation Report was submitted
jointly by the MARO, representatives of the BARC, LBP, and the PARO. They
recommended that after ocular inspection of the property, 234.6498 hectares under
Tax Declaration No. 0390 be subject to compulsory acquisition and distribution by
CLOA. 23 The following day, September 22, 1989, a second Summary Investigation
was submitted by the same officers. They recommended that 737.2590 hectares
under Tax Declaration Nos. 0236 and 0237 be likewise placed under compulsory
acquisition for distribution. 24
On December 12, 1989, respondent DAR, through the Department Secretary,
sent to petitioner two (2) separate "Notices of Acquisition" over Hacienda
Banilad. These Notices were sent on the same day as the Notice of Acquisition over
Hacienda Palico. Unlike the Notice over Hacienda Palico, however, the Notices over
Hacienda Banilad were addressed to:
Roxas y Cia. Limited
7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.
Makati, Metro Manila. 25
Respondent DAR ofered petitioner compensation of P15,108,995.52 for
729.4190 hectares and P4,428,496.00 for 234.6498 hectares. 26
On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation
Manager a "Request to Open Trust Account" in petitioner's name as compensation
for 234.6493 hectares of Hacienda Banilad. 27 A second "Request to Open Trust
Account" was sent on November 18, 1991 over 723.4130 hectares of said
Hacienda. 28
On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and
P21,234,468.78 in cash and LBP bonds had been earmarked as compensation for
petitioner's land in Hacienda Banilad. 29
On May 4, 1993, petitioner applied for conversion of both Haciendas Palico
and Banilad.
Hacienda Caylaway
Hacienda Caylaway was voluntarily offered for sale to the government on
May 6, 1988 before the effectivity of the CARL. The Hacienda has a total area of
867.4571 hectares and is covered by four (4) titles — TCT Nos. T-44662, T-44663, T-
44664 and T-44665. On January 12, 1989, respondent DAR, through the Regional
Director for Region IV, sent to petitioner two (2) separate Resolutions accepting
petitioner's voluntary ofer to sell Hacienda Caylaway, particularly TCT Nos. T-44664
and T-44663. 30 The Resolutions were addressed to:
Roxas & Company, Inc.
7th Flr. Cacho-Gonzales Bldg.
Aguirre, Legaspi Village
Makati, M. M 31
On September 4, 1990, the DAR Regional Director issued two separate Memoranda
to the LBP Regional Manager requesting for the valuation of the land under TCT Nos.
T-44664 and T-44663. 32 On the same day, respondent DAR, through the Regional
Director, sent to petitioner a "Notice of Acquisition" over 241.6777 hectares under
TCT No. T-44664 and 533.8180 hectares under TCT No. T-44663. 33 Like the
Resolutions of Acceptance, the Notice of Acquisition was addressed to petitioner at
its office in Makati, Metro Manila.
Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J.
Roxas, sent a letter to the Secretary of respondent DAR withdrawing its VOS
of Hacienda Caylaway. The Sangguniang Bayan of Nasugbu, Batangas
allegedly authorized the reclassification of Hacienda Caylaway from
agricultural to non-agricultural. As a result, petitioner informed respondent
DAR that it was applying for conversion of Hacienda Caylaway from
34
agricultural to other
uses. 34
In a letter dated September 28, 1992, respondent DAR Secretary informed
petitioner that a reclassification of the land would not exempt it from agrarian
reform. Respondent Secretary also denied petitioner's withdrawal of the VOS
on the ground that withdrawal could only be based on specific grounds such
as unsuitability of the soil for agriculture, or if the slope of the land is over 18
degrees and that the land is undeveloped. 35
Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993,
petitioner filed its application for conversion of both Haciendas Palico and
Banilad. 36 On July 14, 1993, petitioner, through its President, Eduardo Roxas,
reiterated its request to withdraw the VOS over Hacienda Caylaway in light of the
following:
1) Certification issued by Conrado I. Gonzales, Officer-in-
Charge, Department of Agriculture, Region 4, 4th Floor, ATI
(BA) Bldg., Diliman, Quezon City dated March 1, 1993 stating
that the lands subject of referenced titles "are not feasible and
economically sound for further agricultural development.
2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu,
Batangas approving the Zoning Ordinance reclassifying areas
covered by the referenced titles to non-agricultural which was
enacted after extensive consultation with government
agencies, including [the Department of Agrarian Reform], and
the requisite public hearings.
3) Resolution No. 106 of the Sangguniang Panlalawigan of
Batangas dated March 8, 1993 approving the Zoning
Ordinance enacted by the Municipality of Nasugbu.
4) Letter dated December 15, 1992 issued by Reynaldo U.
Garcia of the Municipal Planning & Development, Coordinator
and Deputized Zoning Administrator addressed to Mrs. Alicia P.
Logarta advising that the Municipality of Nasugbu, Batangas
has no objection to the conversion of the lands subject of
referenced titles to non-agricultural. 37
On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with
respondent DAR Adjudication Board (DARAB) praying for the cancellation of
the CLOA's issued by respondent DAR in the name of several persons.
Petitioner alleged that the Municipality of Nasugbu, where the haciendas are
located, had been declared a tourist zone, that the land is not suitable for
agricultural production, and that the Sangguniang Bayan of Nasugbu had
reclassified the land to non-agricultural.
In a Resolution dated October 14, 1993, respondent DARAB held that the case
involved the prejudicial question of whether the property was subject to
agrarian reform, hence, this question should be submitted to the Office of the
Secretary of Agrarian Reform for determination. 38
On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No.
32484. It questioned the expropriation of its properties under the CARL and
the denial of due process in the acquisition of its landholdings.
Meanwhile, the petition for conversion of the three haciendas was denied by
the MARO on November 8, 1993.
Petitioner's petition was dismissed by the Court of Appeals on April 28,
1994. 39 Petitioner moved for reconsideration but the motion was denied on
January 17, 1997 by respondent court. 40
Hence, this recourse. Petitioner assigns the following errors:
A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT PETITIONER'S CAUSE OF ACTION IS
PREMATURE FOR FAILURE TO EXHAUST ADMINISTRATIVE
REMEDIES IN VIEW OF THE PATENT ILLEGALITY OF THE
RESPONDENTS' ACTS, THE IRREPARABLE DAMAGE CAUSED BY
SAID ILLEGAL ACTS, AND THE ABSENCE OF A PLAIN, SPEEDY
 AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW
— ALL OF WHICH ARE EXCEPTIONS TO THE SAID DOCTRINE.
B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT PETITIONER'S LANDHOLDINGS ARE SUBJECT
TO COVERAGE UNDER THE COMPREHENSIVE AGRARIAN
REFORM LAW, IN VIEW OF THE UNDISPUTED FACT THAT
PETITIONER'S LANDHOLDINGS HAVE BEEN CONVERTED TO
NON-AGRICULTURAL USES BY PRESIDENTIAL PROCLAMATION
NO. 1520 WHICH DECLARED THE MUNICIPALITY NASUGBU,
BATANGAS AS A TOURIST ZONE, AND THE ZONING ORDINANCE
OF THE MUNICIPALITY OF NASUGBU RE-CLASSIFYING CERTAIN
PORTIONS OF PETITIONER'S LANDHOLDINGS AS NON-
AGRICULTURAL, BOTH OF WHICH PLACE SAID LANDHOLDINGS
OUTSIDE THE SCOPE OF AGRARIAN REFORM, OR AT THE VERY
LEAST ENTITLE PETITIONER TO APPLY FOR CONVERSION AS
CONCEDED BY RESPONDENT DAR.
C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT
FAILED TO DECLARE THE PROCEEDINGS BEFORE RESPONDENT
DAR VOID FOR FAILURE TO OBSERVE DUE PROCESS,
CONSIDERING THAT RESPONDENTS BLATANTLY DISREGARDED
THE PROCEDURE FOR THE ACQUISITION OF PRIVATE LANDS
UNDER R.A. 6657, MORE PARTICULARLY, IN FAILING TO GIVE
DUE NOTICE TO THE PETITIONER AND TO PROPERLY IDENTIFY
THE SPECIFIC AREAS SOUGHT TO BE ACQUIRED.
D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT
FAILED TO RECOGNIZE THAT PETITIONER WAS BRAZENLY AND
ILLEGALLY DEPRIVED OF ITS PROPERTY WITHOUT JUST
COMPENSATION, CONSIDERING THAT PETITIONER WAS NOT
PAID JUST COMPENSATION BEFORE IT WAS
UNCEREMONIOUSLY STRIPPED OF ITS LANDHOLDINGS
THROUGH THE ISSUANCE OF CLOA'S TO ALLEGED FARMER
BENEFICIARIES, IN VIOLATION OF R.A. 6657. 41
The assigned errors involve three (3) principal issues: (1) whether this Court can
take cognizance of this petition despite petitioner's failure to exhaust administrative
remedies; (2) whether the acquisition proceedings over the three haciendas were
valid and in accordance with law; and (3) assuming the haciendas may be
reclassified from agricultural to non-agricultural, whether this court has the power
to rule on this issue.
I. Exhaustion of Administrative Remedies.
In its first assigned error, petitioner claims that respondent Court of Appeals gravely
erred in finding that petitioner failed to exhaust administrative remedies. As a
general rule, before a party may be allowed to invoke the jurisdiction of the
courts of justice, he is expected to have exhausted all means of administrative
redress. This is not absolute, however. There are instances when judicial
action may be resorted to immediately. Among these exceptions are: (1) when
the question raised is purely legal; (2) when the administrative body is in estoppel;
(3) when the act complained of is patently illegal; (4) when there is urgent need for
judicial intervention; (5) when the respondent acted in disregard of due process; (6)
when the respondent is a department secretary whose acts, as an alter ego of the
President, bear the implied or assumed approval of the latter; (7) when irreparable
damage will be sufered; (8) when there is no other plain, speedy and adequate
remedy; (9) when strong public interest is involved; (10) when the subject of the
controversy is private land; and (11) in quo warranto proceedings. 42
Petitioner rightly sought immediate redress in the courts. There was a
violation of its rights and to require it to exhaust administrative remedies
before the DAR itself was not a plain, speedy and adequate remedy.
Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to
farmer beneficiaries over portions of petitioner's land without just
compensation to petitioner. A Certificate of Land Ownership Award (CLOA) is
evidence of ownership of land by a beneficiary under R.A. 6657, the
Comprehensive Agrarian Reform Law of 1988. 43 Before this may be awarded
to a farmer beneficiary, the land must first be acquired by the State from the
landowner and ownership transferred to the former. The transfer of
possession and ownership of the land to the government are conditioned
35
upon the receipt by the landowner of the corresponding payment or deposit
by the DAR of the compensation with an accessible bank. Until then, title
remains with the landowner. 44 There was no receipt by petitioner of any
compensation for any of the lands acquired by the government.
The kind of compensation to be paid the landowner is also specific. The law
provides that the deposit must be made only in "cash" or "LBP
bonds." 45 Respondent DAR's opening of trust account deposits in petitioner'
s name with the Land Bank of the Philippines does not constitute payment
under the law. Trust account deposits are not cash or LBP bonds. The replacement
of the trust account with cash or LBP bonds did not ipso facto cure the lack of
compensation; for essentially, the determination of this compensation was marred
by lack of due process. In fact, in the entire acquisition proceedings, respondent DAR
disregarded the basic requirements of administrative due process. Under these
circumstances, the issuance of the CLOA's to farmer beneficiaries necessitated
immediate judicial action on the part of the petitioner.
II. The Validity of the Acquisition Proceedings Over the Haciendas.
Petitioner's allegation of lack of due process goes into the validity of the acquisition
proceedings themselves. Before we rule on this matter, however, there is need to lay
down the procedure in the acquisition of private lands under the provisions of the
law.
A. Modes of Acquisition of Land under R. A. 6657
Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988
(CARL), provides for two (2) modes of acquisition of private land: compulsory
and voluntary. The procedure for the compulsory acquisition of private lands
is set forth in Section 16 of R.A. 6657, viz:
Sec. 16. Procedure for Acquisition of Private Lands. — For purposes
of acquisition of private lands, the following procedures shall be
followed:
a). After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the land to the
owners thereof, by personal delivery or registered mail, and post the
same in a conspicuous place in the municipal building and barangay
hall of the place where the property is located. Said notice shall
contain the ofer of the DAR to pay a corresponding value in
accordance with the valuation set forth in Sections 17, 18, and other
pertinent provisions hereof.
b) Within thirty (30) days from the date of receipt of written notice by
personal delivery or registered mail, the landowner, his administrator
or representative shall inform the DAR of his acceptance or rejection
of the ofer.
c) If the landowner accepts the ofer of the DAR, the LBP shall pay the
landowner the purchase price of the land within thirty (30) days after
he executes and delivers a deed of transfer in favor of the Government
and surrenders the Certificate of Title and other muniments of title.
d) In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the compensation
for the land requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for the land,
within fifteen (15) days from receipt of the notice. After the expiration
of the above period, the matter is deemed submitted for decision. The
DAR shall decide the case within thirty (30) days after it is submitted
for decision.
e) Upon receipt by the landowner of the corresponding payment, or, in
case of rejection or no response from the landowner, upon the deposit
with an accessible bank designated by the DAR of the compensation in
cash or in LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the proper
Register of Deeds to issue a Transfer Certificate of Title (TCT) in the
name of the Republic of the Philippines. The DAR shall thereafter
proceed with the redistribution of the land to the qualified
beneficiaries.
 f) Any party who disagrees with the decision may bring the matter to
the court of proper jurisdiction for final determination of just
compensation.
In the compulsory acquisition of private lands, the landholding, the
landowners and the farmer beneficiaries must first be identified. After
identification, the DAR shall send a Notice of Acquisition to the landowner, by
personal delivery or registered mail, and post it in a conspicuous place in the
municipal building and barangay hall of the place where the property is
located. Within thirty days from receipt of the Notice of Acquisition, the
landowner, his administrator or representative shall inform the DAR of his
acceptance or rejection of the offer. If the landowner accepts, he executes
and delivers a deed of transfer in favor of the government and surrenders the
certificate of title. Within thirty days from the execution of the deed of
transfer, the Land Bank of the Philippines (LBP) pays the owner the purchase
price. If the landowner rejects the DAR's offer or fails to make a reply, the
DAR conducts summary administrative proceedings to determine just
compensation for the land. The landowner, the LBP representative and other
interested parties may submit evidence on just compensation within fifteen
days from notice. Within thirty days from submission, the DAR shall decide
the case and inform the owner of its decision and the amount of just
compensation. Upon receipt by the owner of the corresponding payment, or,
in case of rejection or lack of response from the latter, the DAR shall deposit
the compensation in cash or in LBP bonds with an accessible bank. The DAR
shall immediately take possession of the land and cause the issuance of a
transfer certificate of title in the name of the Republic of the Philippines. The
land shall then be redistributed to the farmer beneficiaries. Any party may
question the decision of the DAR in the regular courts for final determination
of just compensation.
The DAR has made compulsory acquisition the priority mode of the land acquisition
to hasten the implementation of the Comprehensive Agrarian Reform Program
(CARP). 46 Under Section 16 of the CARL, the first step in compulsory acquisition is
the identification of the land, the landowners and the beneficiaries. However, the
law is silent on how the identification process must be made. To fill in this
gap, the DAR issued on July 26, 1989 Administrative Order No. 12, Series or
1989, which set the operating procedure in the identification of such lands. The
procedure is as follows:
II. OPERATING PROCEDURE
A. The Municipal Agrarian Reform Officer, with the assistance
of the pertinent Barangay Agrarian Reform Committee
(BARC), shall:
1. Update the masterlist of all agricultural lands covered under
the CARP in his area of responsibility. The masterlist shall
include such information as required under the attached CARP
Masterlist Form which shall include the name of the
landowner, landholding area, TCT/OCT number, and tax
declaration number.
2. Prepare a Compulsory Acquisition Case Folder (CACF) for
each title (OCT/TCT) or landholding covered under Phase I and
II of the CARP except those for which the landowners have
already filed applications to avail of other modes of land
acquisition. A case folder shall contain the following duly
accomplished forms:
a) CARP CA Form 1 — MARO Investigation Report
b) CARP CA Form 2 — Summary Investigation Report of
Findings and Evaluation
c) CARP CA Form 3 — Applicant's Information Sheet
d) CARP CA Form 4 — Beneficiaries Undertaking
e) CARP CA Form 5 — Transmittal Report to the PARO
The MARO/BARC shall certify that all information contained in
the above-mentioned forms have been examined and verified
by him and that the same are true and correct.
36
3. Send a Notice of Coverage and a letter of invitation to a
conference/meeting to the landowner covered by the
Compulsory Case Acquisition Folder. Invitations to the said
conference/meeting shall also be sent to the prospective
farmer-beneficiaries, the BARC representative(s), the Land
Bank of the Philippines (LBP) representative, and other
interested parties to discuss the inputs to the valuation of the
property. He shall discuss the MARO/BARC investigation report
and solicit the views, objection, agreements or suggestions of
the participants thereon. The landowner shall also be asked to
indicate his retention area. The minutes of the meeting shall
be signed by all participants in the conference and shall form
an integral part of the CACF.
4. Submit all completed case folders to the Provincial Agrarian
Reform Officer (PARO).
B. The PARO shall:
1. Ensure that the individual case folders are forwarded to him
by his MAROs.
2. Immediately upon receipt of a case folder, compute the
valuation of the land in accordance with A.O. No. 6, Series of
1988. 47 The valuation worksheet and the related CACF
valuation forms shall be duly certified correct by the PARO and
all the personnel who participated in the accomplishment of
these forms.
3. In all cases, the PARO may validate the report of the MARO
through ocular inspection and verification of the property. This
ocular inspection and verification shall be mandatory when
the computed value exceeds = 500,000 per estate.
4. Upon determination of the valuation, forward the case
folder, together with the duly accomplished valuation forms
and his recommendations, to the Central Office. The LBP
representative and the MARO concerned shall be furnished a
copy each of his report.
C. DAR Central Office, specifically through the Bureau of Land
Acquisition and Distribution (BLAD), shall:
1. Within three days from receipt of the case folder from the
PARO, review, evaluate and determine the final land valuation
of the property covered by the case folder. A summary review
and evaluation report shall be prepared and duly certified by
the BLAD Director and the personnel directly participating in
the review and final valuation.
2. Prepare, for the signature of the Secretary or her duly
authorized representative, a Notice of Acquisition (CARP CA
Form 8) for the subject property. Serve the Notice to the
landowner personally or through registered mail within three
days from its approval. The Notice shall include, among others,
the area subject of compulsory acquisition, and the amount of
just compensation ofered by DAR.
3. Should the landowner accept the DAR's ofered value, the
BLAD shall prepare and submit to the Secretary for approval
the Order of Acquisition. However, in case of rejection or non-
reply, the DAR Adjudication Board (DARAB) shall conduct a
summary administrative hearing to determine just
compensation, in accordance with the procedures provided
under Administrative Order No. 13, Series of 1989.
Immediately upon receipt of the DARAB's decision on just
compensation, the BLAD shall prepare and submit to the
Secretary for approval the required Order of Acquisition.
4. Upon the landowner's receipt of payment, in case of
acceptance, or upon deposit of payment in the designated
bank, in case of rejection or non-response, the Secretary shall
immediately direct the pertinent Register of Deeds to issue the
corresponding Transfer Certificate of Title (TCT) in the name of
the Republic of the Philippines. Once the property is
 transferred, the DAR, through the PARO, shall take possession
of the land for redistribution to qualified beneficiaries.
Administrative Order No. 12, Series of 1989 requires that the Municipal
Agrarian Reform Officer (MARO) keep an updated master list of all
agricultural lands under the CARP in his area of responsibility containing all
the required information. The MARO prepares a Compulsory Acquisition Case
Folder (CACF) for each title covered by CARP. The MARO then sends the
landowner a "Notice of Coverage" and a "letter of invitation" to a
"conference/meeting" over the land covered by the CACF. He also sends
invitations to the prospective farmer-beneficiaries the representatives of the
Barangay Agrarian Reform Committee (BARC), the Land Bank of the
Philippines (LBP) and other interested parties to discuss the inputs to the
valuation of the property and solicit views, suggestions, objections or
agreements of the parties. At the meeting, the landowner is asked to indicate
his retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform
Officer (PARO) who shall complete the valuation of the land. Ocular
inspection and verification of the property by the PARO shall be mandatory
when the computed value of the estate exceeds P500,000.00. Upon
determination of the valuation, the PARO shall forward all papers together
with his recommendation to the Central Office of the DAR. The DAR Central
Office, specifically, the Bureau of Land Acquisition and Distribution (BLAD),
shall review, evaluate and determine the final land valuation of the property.
The BLAD shall prepare, on the signature of the Secretary or his duly
authorized representative, a Notice of Acquisition for the subject
property. 48 From this point, the provisions of Section 16 of R.A. 6657 then
apply. 49
For a valid implementation of the CAR program, two notices are required:
(1) the Notice of Coverage and letter of invitation to a preliminary conference
sent to the landowner, the representatives of the BARC, LBP, farmer
beneficiaries and other interested parties pursuant to DAR A.O. No. 12, Series
of 1989; and (2) the Notice of Acquisition sent to the landowner under Section
16 of the CARL.
The importance of the first notice, i.e., the Notice of Coverage and the letter
of invitation to the conference, and its actual conduct cannot be understated.
They are steps designed to comply with the requirements of administrative
due process. The implementation of the CARL is an exercise of the State's police
power and the power of eminent domain. To the extent that the CARL prescribes
retention limits to the landowners, there is an exercise of police power for the
regulation of private property in accordance with the Constitution. 50 But where, to
carry out such regulation, the owners are deprived of lands they own in excess of
the maximum area allowed, there is also a taking under the power of eminent
domain. The taking contemplated is not a mere limitation of the use of the land.
What is required is the surrender of the title to and physical possession of the said
excess and all beneficial rights accruing to the owner in favor of the farmer
beneficiary. 51 The Bill of Rights provides that "[n]o person shall be deprived of life,
liberty or property without due process of law." 52 The CARL was not intended to
take away property without due process of law. 53 The exercise of the power of
eminent domain requires that due process be observed in the taking of private
property.
DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung,
was amended in 1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No.
1, Series of 1993. The Notice of Coverage and letter of invitation to the conference
meeting were expanded and amplified in said amendments.
DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of
Agricultural Lands Subject of Voluntary Ofer to Sell and Compulsory Acquisition
Pursuant to R.A. 6657," requires that:
B. MARO
1. Receives the duly accomplished CARP Form Nos. 1 & 1.1 including
supporting documents.
2. Gathers basic ownership documents listed under 1.a or 1.b above and prepares
corresponding VOCF/CACF by landowner/landholding.
37
3. Notifies/invites the landowner and representatives of the LBP, DENR, BARC and
prospective beneficiaries of the schedule of ocular inspection of the property at
least one week in advance.
4. MARO/LAND BANK FIELD OFFICE/BARC
a) Identify the land and landowner, and determine the suitability for agriculture and
productivity of the land and jointly prepare Field Investigation Report (CARP Form
No. 2), including the Land Use Map of the property.
b) Interview applicants and assist them in the preparation of the Application For
Potential CARP Beneficiary (CARP Form No. 3).
c) Screen prospective farmer-beneficiaries and for those found qualified, cause the
signing of the respective Application to Purchase and Farmer's Undertaking (CARP
Form No. 4).
d) Complete the Field Investigation Report based on the result of the ocular
inspection/investigation of the property and documents submitted. See to it that
Field Investigation Report is duly accomplished and signed by all concerned.
5. MARO
a) Assists the DENR Survey Party in the conduct of a boundary/ subdivision survey
delineating areas covered by OLT, retention, subject of VOS, CA (by phases, if
possible), infrastructures, etc., whichever is applicable.
b) Sends Notice of Coverage (CARP Form No. 5) to landowner concerned or his duly
authorized representative inviting him for a conference.
c) Sends Invitation Letter (CARP Form No. 6) for a conference/public hearing to
prospective farmer-beneficiaries, landowner, representatives of BARC, LBP, DENR,
DA, NGO's, farmers' organizations and other interested parties to discuss the
following matters:
Result of Field Investigation
Inputs to valuation
Issues raised
Comments/recommendations by all parties concerned.
d) Prepares Summary of Minutes of the conference/public hearing to be guided by
CARP Form No. 7.
e) Forwards the completed VOCF/CACF to the Provincial Agrarian Reform Office
(PARO) using CARP Form No. 8 (Transmittal Memo to PARO).
xxx xxx xxx
DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to
Sell (VOS) and Compulsory Acquisition (CA) transactions involving lands
enumerated under Section 7 of the CARL. 54 In both VOS and CA. transactions,
the MARO prepares the Voluntary Ofer to Sell Case Folder (VOCF) and the
Compulsory Acquisition Case Folder (CACF), as the case may be, over a particular
landholding. The MARO notifies the landowner as well as representatives of the LBP,
BARC and prospective beneficiaries of the date of the ocular inspection of the
property at least one week before the scheduled date and invites them to attend the
same. The MARO, LBP or BARC conducts the ocular inspection and investigation by
identifying the land and landowner, determining the suitability of the land for
agriculture and productivity, interviewing and screening prospective farmer
beneficiaries. Based on its investigation, the MARO, LBP or BARC prepares the Field
Investigation Report which shall be signed by all parties concerned. In addition to
the field investigation, a boundary or subdivision survey of the land may also be
conducted by a Survey Party of the Department of Environment and Natural
Resources (DENR) to be assisted by the MARO. 55 This survey shall delineate the
areas covered by Operation Land Transfer (OLT), areas retained by the landowner,
areas with infrastructure, and the areas subject to VOS and CA. After the survey and
field investigation, the MARO sends a "Notice of Coverage" to the landowner or his
duly authorized representative inviting him to a conference or public hearing with
the farmer beneficiaries, representatives of the BARC, LBP, DENR, Department of
Agriculture (DA), non-government organizations, farmer's organizations and other
interested parties. At the public hearing, the parties shall discuss the results of the
field investigation, issues that may be raised in relation thereto, inputs to the
valuation of the subject landholding, and other comments and recommendations by
all parties concerned. The Minutes of the conference/public hearing shall form part
of the VOCF or CACF which files shall be forwarded by the MARO to the PARO. The
PARO reviews, evaluates and validates the Field Investigation Report and other
documents in the VOCF/CACF. He then forwards the records to the RARO for another
review.
DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of
1993. DAR A.O. No. 1, Series of 1993 provided, among others, that:
IV. OPERATING PROCEDURES:
Steps Responsible Activity Forms/
Agency/Unit Document
(requirements)
A. Identification and
Documentation
xxx xxx xxx
5 DARMO Issue Notice of Coverage CARP to LO by personal
delivery Form No. 2 with proof of service, or registered mail
with return card, informing him that his property is now under
CARP coverage and for LO to select his retention area, if he
desires to avail of his right of retention; and at the same time
invites him to join the field investigation to be conducted on
his property which should be scheduled at least two weeks in
advance of said notice.
A copy of said Notice shall CARP be posted for at least one
Form No. 17 week on the bulletin board of the municipal and
barangay halls where the property is located. LGU office
concerned notifies DAR about compliance with posting
requirements thru return indorsement on CARP Form No. 17.
6 DARMO Send notice to the LBP, CARP BARC, DENR
representatives Form No. 3 and prospective ARBs of the
schedule of the field investigation to be conducted on the
subject property.
7 DARMO With the participation of CARP BARC the LO,
representatives of Form No. 4 LBP the LBP, BARC, DENR Land
Use DENR and prospective ARBs, Map Local Office conducts
the investigation on subject property to identify the
landholding, determines its suitability and productivity; and
jointly prepares the Field Investigation Report (FIR) and Land
Use Map. However, the field investigation shall proceed even if
the LO, the representatives of the DENR and prospective ARBs
are not available provided, they were given due notice of the
time and date of investigation to be conducted.
Similarly, if the LBP representative is not available or could not
come on the scheduled date, the field investigation shall also
be conducted, after which the duly accomplished Part I of
CARP Form No. 4 shall be forwarded to the LBP representative
for validation. If he agrees to the ocular inspection report of
DAR, he signs the FIR (Part I) and accomplishes Part II thereof.
In the event that there is a diference or variance between the
findings of the DAR and the LBP as to the propriety of covering
the land under CARP, whether in whole or in part, on the issue
of suitability to agriculture, degree of development or slope,
and on issues afecting idle lands, the conflict shall be resolved
by a composite team of DAR, LBP, DENR and DA which shall
jointly conduct further investigation thereon. The team shall
submit its report of findings which shall be binding to both
DAR and LBP, pursuant to Joint Memorandum Circular of the
DAR, LBP, DENR and DA dated 27 January 1992.
8 DARMO Screen prospective ARBs BARC and causes the
signing of CARP the Application of Purchase Form No. 5 and
Farmer's Undertaking (APFU).
9 DARMO Furnishes a copy of the CARP duly accomplished FIR
to Form No. 4 the landowner by personal delivery with proof
of service or registered mail will return card and posts a copy
38
thereof for at least one week on the bulletin board of the
municipal and barangay halls where the property is located.
LGU office concerned CARP notifies DAR about Form No. 17
compliance with posting requirement thru return
endorsement on CARP Form No. 17.
B. Land Survey
10 DARMO Conducts perimeter or Perimeter And/or
segregation survey or DENR delineating areas covered
Segregation Local Office by OLT, "uncarpable Survey Plan areas
such as 18% slope and above, unproductive/ unsuitable to
agriculture, retention, infrastructure. In case of segregation or
subdivision survey, the plan shall be approved by DENR-LMS.
C. Review and Completion of Documents
11. DARMO Forward VOCF/CACF CARP to DARPO. Form No. 6
xxx xxx xxx.
DAR A.O. No. 1, Series of 1993, modified the identification process and
increased the number of government agencies involved in the identification
and delineation of the land subject to acquisition. 56 This time, the Notice of
Coverage is sent to the landowner before the conduct of the field investigation and
the sending must comply with specific requirements. Representatives of the DAR
Municipal Office (DARMO) must send the Notice of Coverage to the landowner by
"personal delivery with proof of service, or by registered mail with return card,"
informing him that his property is under CARP coverage and that if he desires to
avail of his right of retention, he may choose which area he shall retain. The Notice
of Coverage shall also invite the landowner to attend the field investigation to be
scheduled at least two weeks from notice. The field investigation is for the purpose
of identifying the landholding and determining its suitability for agriculture and its
productivity. A copy of the Notice of Coverage shall be posted for at least one week
on the bulletin board of the municipal and barangay halls where the property is
located. The date of the field investigation shall also be sent by the DAR Municipal
Office to representatives of the LBP, BARC, DENR and prospective farmer
beneficiaries. The field investigation shall be conducted on the date set with the
participation of the landowner and the various representatives. If the landowner
and other representatives are absent, the field investigation shall proceed, provided
they were duly notified thereof. Should there be a variance between the findings of
the DAR and the LBP as to whether the land be placed under agrarian reform, the
land's suitability to agriculture, the degree or development of the slope, etc., the
conflict shall be resolved by a composite team of the DAR, LBP, DENR and DA which
shall jointly conduct further investigation. The team's findings shall be binding on
both DAR and LBP. After the field investigation, the DAR Municipal Office shall
prepare the Field Investigation Report and Land Use Map, a copy of which shall be
furnished the landowner "by personal delivery with proof of service or registered
mail with return card." Another copy of the Report and Map shall likewise be posted
for at least one week in the municipal or barangay halls where the property is
located.
Clearly then, the notice requirements under the CARL are not confined to the
Notice of Acquisition set forth in Section 16 of the law. They also include the
Notice of Coverage first laid down in DAR A.O. No. 12, Series of 1989 and
subsequently amended in DAR A.O. No. 9, Series of 1990 and DAR A.O. No. 1,
Series of 1993. This Notice of Coverage does not merely notify the landowner
that his property shall be placed under CARP and that he is entitled to
exercise his retention right; it also notifies him, pursuant to DAR A.O. No. 9,
Series of 1990, that a public hearing, shall be conducted where he and
representatives of the concerned sectors of society may attend to discuss the
results of the field investigation, the land valuation and other pertinent
matters. Under DAR A.O. No. 1, Series of 1993, the Notice of Coverage also
informs the landowner that a field investigation of his landholding shall be
conducted where he and the other representatives may be present.
B. The Compulsory Acquisition of Haciendas Palico and Banilad
In the case at bar, respondent DAR claims that it, through MARO Leopoldo C.
Lejano, sent a letter of invitation entitled "Invitation to Parties" dated
September 29, 1989 to petitioner corporation, through Jaime Pimentel, the
administrator of Hacienda Palico. 57 The invitation was received on the same day
it was sent as indicated by a signature and the date received at the bottom left
corner of said invitation. With regard to Hacienda Banilad, respondent DAR
claims that Jaime Pimentel, administrator also of Hacienda Banilad, was
notified and sent an invitation to the conference. Pimentel actually attended the
conference on September 21, 1989 and signed the Minutes of the meeting on behalf
of petitioner corporation. 58 The Minutes was also signed by the representatives of
the BARC, the LBP and farmer beneficiaries. 59 No letter of invitation was sent or
conference meeting held with respect to Hacienda Caylaway because it was
subject to a Voluntary Offer to Sell to respondent DAR. 60
When respondent DAR, through the Municipal Agrarian Reform Officer
(MARO), sent to the various parties the Notice of Coverage and invitation to
the conference, DAR A.O. No. 12, Series of 1989 was already in effect more
than a month earlier. The Operating Procedure in DAR Administrative Order
No. 12 does not specify how notices or letters of invitation shall be sent to
the landowner, the representatives of the BARC, the LBP, the farmer
beneficiaries and other interested parties. The procedure in the sending of
these notices is important to comply with the requisites of due process
especially when the owner, as in this case, is a juridical entity. Petitioner is a
domestic corporation, 61 and therefore, has a personality separate and distinct from
its shareholders, officers and employees.
The Notice of Acquisition in Section 16 of the CARL is required to be sent to
the landowner by "personal delivery or registered mail." Whether the
landowner be a natural or juridical person to whose address the Notice may be
sent by personal delivery or registered mail, the law does not distinguish. The
DAR Administrative Orders also do not distinguish. In the proceedings before the
DAR, the distinction between natural and juridical persons in the sending of notices
may be found in the Revised Rules of Procedure of the DAR Adjudication Board
(DARAB). Service of pleadings before the DARAB is governed by Section 6, Rule V of
the DARAB Revised Rules of Procedure. Notices and pleadings are served on private
domestic corporations or partnerships in the following manner:
Sec. 6. Service upon Private Domestic Corporation or
Partnership. — If the defendant is a corporation organized
under the laws of the Philippines or a partnership duly
registered, service may be made on the president, manager,
secretary, cashier, agent, or any of its directors or partners.
Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14
provides:
Sec. 13. Service upon private domestic corporation or
partnership. — If the defendant is a corporation organized
under the laws of the Philippines or a partnership duly
registered, service may be made on the president, manager,
secretary, cashier, agent, or any of its directors.
Summonses, pleadings and notices in cases against a private domestic
corporation before the DARAB and the regular courts are served on the
president, manager, secretary, cashier, agent or any of its directors. These
persons are those through whom the private domestic corporation or
partnership is capable of action. 62
Jaime Pimentel is not the president, manager, secretary, cashier or director of
petitioner corporation. Is he, as administrator of the two Haciendas, considered an
agent of the corporation?
The purpose of all rules for service of process on a corporation is to make it
reasonably certain that the corporation will receive prompt and proper notice in an
action against it. 63 Service must be made on a representative so integrated with
the corporation as to make it a priori supposable that he will realize his
responsibilities and know what he should do with any legal papers served on
him, 64 and bring home to the corporation notice of the filing of the
action. 65 Petitioner's evidence does not show the official duties of Jaime
Pimentel as administrator of petitioner's haciendas. The evidence does not
indicate whether Pimentel's duties is so integrated with the corporation that
he would immediately realize his responsibilities and know what he should do
with any legal papers served on him. At the time the notices were sent and the
preliminary conference conducted, petitioner's principal place of business was listed
39
in respondent DAR's records as "Soriano Bldg., Plaza Cervantes, Manila," 66 and "7th
Flr. Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro Manila." 67 Pimentel did
not hold office at the principal place of business of petitioner. Neither did he
exercise his functions in Plaza Cervantes, Manila nor in Cacho-Gonzales Bldg.,
Makati, Metro Manila. He performed his official functions and actually resided in the
haciendas in Nasugbu, Batangas, a place over two hundred kilometers away from
Metro Manila.
Curiously, respondent DAR had information of the address of petitioner's
principal place of business. The Notices of Acquisition over Haciendas Palico
and Banilad were addressed to petitioner at its offices in Manila and Makati.
These Notices were sent barely three to four months after Pimentel was
notified of the preliminary conference. 68Why respondent DAR chose to
notify Pimentel instead of the officers of the corporation was not explained
by the said respondent.
Nevertheless, assuming that Pimentel was an agent of petitioner corporation,
and the notices and letters of invitation were validly served on petitioner
through him, there is no showing that Pimentel himself was duly authorized
to attend the conference meeting with the MARO, BARC and LBP
representatives and farmer beneficiaries for purposes of compulsory
acquisition of petitioner's landholdings. Even respondent DAR's evidence does
not indicate this authority. On the contrary, petitioner claims that it had no
knowledge of the letter-invitation, hence, could not have given Pimentel the
authority to bind it to whatever matters were discussed or agreed upon by the
parties at the preliminary conference or public hearing. Notably, one year after
Pimentel was informed of the preliminary conference, DAR A.O. No. 9, Series of
1990 was issued and this required that the Notice of Coverage must be sent "to the
landowner concerned or his duly authorized representative." 69
Assuming further that petitioner was duly notified of the CARP coverage of its
haciendas, the areas found actually subject to CARP were not properly
identified before they were taken over by respondent DAR. Respondents insist
that the lands were identified because they are all registered property and the
technical description in their respective titles specifies their metes and bounds.
Respondents admit at the same time, however, that not all areas in the haciendas
were placed under the comprehensive agrarian reform program invariably by reason
of elevation or character or use of the land. 70
The acquisition of the landholdings did not cover the entire expanse of the two
haciendas, but only portions thereof. Hacienda Palico has an area of 1,024 hectares
and only 688.7576 hectares were targetted for acquisition. Hacienda Banilad has an
area of 1,050 hectares but only 964.0688 hectares were subject to CARP. The
haciendas are not entirely agricultural lands. In fact, the various tax declarations
over the haciendas describe the landholdings as "sugarland," and "forest, sugarland,
pasture land, horticulture and woodland." 71
Under Section 16 of the CARL, the sending of the Notice of Acquisition
specifically requires that the land subject to land reform be first identified.
The two haciendas in the instant case cover vast tracts of land. Before Notices
of Acquisition were sent to petitioner, however, the exact areas of the
landholdings were not properly segregated and delineated. Upon receipt of
this notice, therefore, petitioner corporation had no idea which portions of its
estate were subject to compulsory acquisition, which portions it could rightfully
retain, whether these retained portions were compact or contiguous, and which
portions were excluded from CARP coverage. Even respondent DAR's evidence
does not show that petitioner, through its duly authorized representative, was
notified of any ocular inspection and investigation that was to be conducted by
respondent DAR. Neither is there proof that petitioner was given the opportunity to
at least choose and identify its retention area in those portions to be acquired
compulsorily. The right of retention and how this right is exercised, is guaranteed in
Section 6 of the CARL, viz:
Sec. 6. Retention Limits. — . . . .
The right to choose the area to be retained, which shall be
compact or contiguous, shall pertain to the
landowner; Provided, however, That in case the area selected
for retention by the landowner is tenanted, the tenant shall
have the option to choose whether to remain therein or be a
beneficiary in the same or another agricultural land with
 similar or comparable features. In case the tenant chooses to
remain in the retained area, he shall be considered a
leaseholder and shall lose his right to be a beneficiary under
this Act. In case the tenant chooses to be a beneficiary in
another agricultural land, he loses his right as a leaseholder to
the land retained by the landowner. The tenant must exercise
this option within a period of one (1) year from the time the
landowner manifests his choice of the area for retention.
Under the law, a landowner may retain not more than five hectares out of the total
area of his agricultural land subject to CARP. The right to choose the area to be
retained, which shall be compact or contiguous, pertains to the landowner. If the
area chosen for retention is tenanted, the tenant shall have the option to choose
whether to remain on the portion or be a beneficiary in the same or another
agricultural land with similar or comparable features.
C. The Voluntary Acquisition of Hacienda Caylaway
Petitioner was also left in the dark with respect to Hacienda Caylaway, which
was the subject of a Voluntary Offer to Sell (VOS). The VOS in the instant case
was made on May 6, 1988, 72 before the effectivity of R.A. 6657 on June 15,
1988. VOS transactions were first governed by DAR Administrative Order No.
19, series of 1989, 73 and under this order, all VOS filed before June 15, 1988
shall be heard and processed in accordance with the procedure provided for
in Executive Order No. 229, thus:
III. All VOS transactions which are now pending before the DAR
and for which no payment has been made shall be subject to
the notice and hearing requirements provided in
Administrative Order No. 12, Series of 1989, dated 26 July
1989, Section II, Subsection A, paragraph 3.
All VOS filed before 15 June 1988, the date of efectivity of the
CARL, shall be heard and processed in accordance with the
procedure provided for in Executive Order No. 229.
xxx xxx xxx.
Sec. 9 of E.O. 229 provides:
Sec. 9. Voluntary Offer to Sell. — The government shall
purchase all agricultural lands it deems productive and
suitable to farmer cultivation voluntarily ofered for sale to it
at a valuation determined in accordance with Section 6. Such
transaction shall be exempt from the payment of capital gains
tax and other taxes and fees.
Executive Order 229 does not contain the procedure for the identification of
private land as set forth in DAR A.O. No. 12, Series of 1989. Section 5 of E.O.
229 merely reiterates the procedure of acquisition in Section 16, R.A. 6657. In
other words, the E.O. is silent as to the procedure for the identification of the
land, the notice of coverage and the preliminary conference with the
landowner, representatives of the BARC, the LBP and farmer beneficiaries.
Does this mean that these requirements may be dispensed with regard to VOS filed
before June 15, 1988? The answer is no.
First of all, the same E.O. 229, like Section 16 of the CARL, requires that the
land, landowner and beneficiaries of the land subject to agrarian reform
be identified before the notice of acquisition should be issued. 74 Hacienda
Caylaway was voluntarily ofered for sale in 1989. The Hacienda has a total area of
867.4571 hectares and is covered by four (4) titles. In two separate Resolutions both
dated January 12, 1989, respondent DAR, through the Regional Director, formally
accepted the VOS over the two of these four
titles. 75 The land covered by two titles has an area of 855.5257 hectares, but only
648.8544 hectares thereof fell within the coverage of R.A. 6657. 76 Petitioner claims
it does not know where these portions are located.
Respondent DAR, on the other hand, avers that surveys on the land covered by the
four titles were conducted in 1989, and that petitioner, as landowner, was not
denied participation therein, The results of the survey and the land valuation
summary report, however, do not indicate whether notices to attend the same were
actually sent to and received by petitioner or its duly authorized
representative. 77 To reiterate, Executive Order No. 229 does not lay down the
40
operating procedure, much less the notice requirements, before the VOS is accepted
by respondent DAR. Notice to the landowner, however, cannot be dispensed with. It
is part of administrative due process and is an essential requisite to enable the
landowner himself to exercise, at the very least, his right of retention guaranteed
under the CARL.
III. The Conversion of the three Haciendas.
It is petitioner's claim that the three haciendas are not subject to agrarian
reform because they have been declared for tourism, not agricultural
purposes. 78 In 1975, then President Marcos issued Proclamation No. 1520
declaring the municipality of Nasugbu, Batangas a tourist zone. Lands in
Nasugbu, including the subject haciendas, were allegedly reclassified as non-
agricultural 13 years before the effectivity of R. A. No. 6657. 79 In 1993, the
Regional Director for Region IV of the Department of Agriculture certified that the
haciendas are not feasible and sound for agricultural development. 80 On March 20,
1992, pursuant to Proclamation No. 1520, the Sangguniang Bayan of Nasugbu,
Batangas adopted Resolution No. 19 reclassifying certain areas of Nasugbu as non-
agricultural. 81 This Resolution approved Municipal Ordinance No. 19, Series of
1992, the Revised Zoning Ordinance of Nasugbu 82 which zoning ordinance was
based on a Land Use Plan for Planning Areas for New Development allegedly
prepared by the University of the Philippines. 83 Resolution No. 19 of the
Sangguniang Bayan was approved by the Sangguniang Panlalawigan of Batangas on
March 8, 1993. 84
Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in
1991 when it approved conversion of 1,827 hectares in Nasugbu into a tourist area
known as the Batulao Resort Complex, and 13.52 hectares in Barangay Caylaway as
within the potential tourist belt. 85 Petitioner present evidence before us that these
areas are adjacent to the haciendas subject of this petition, hence, the haciendas
should likewise be converted. Petitioner urges this Court to take cognizance of the
conversion proceedings and rule accordingly. 6
We do not agree. Respondent DAR's failure to observe due process in the
acquisition of petitioner's landholdings does not ipso facto give this Court the
power to adjudicate over petitioner's application for conversion of its haciendas
from agricultural to non-agricultural. The agency charged with the mandate of
approving or disapproving applications for conversion is the DAR.
At the time petitioner filed its application for conversion, the Rules of
Procedure governing the processing and approval of applications for land use
conversion was the DAR A.O. No. 2, Series of 1990. Under this A.O., the
application for conversion is filed with the MARO where the property is
located. The MARO reviews the application and its supporting documents
and conducts field investigation and ocular inspection of the property. The
findings of the MARO are subject to review and evaluation by the Provincial
Agrarian Reform Officer (PARO). The PARO may conduct further field
investigation and submit a supplemental report together with his
recommendation to the Regional Agrarian Reform Officer (RARO) who shall
review the same. For lands less than five hectares, the RARO shall approve or
disapprove applications for conversion. For lands exceeding five hectares, the
RARO shall evaluate the PARO Report and forward the records and his report
to the Undersecretary for Legal Affairs. Applications over areas exceeding fifty
hectares are approved or disapproved by the Secretary of Agrarian Reform.
The DAR's mandate over applications for conversion was first laid down in
Section 4 (j) and Section 5 (l) of Executive Order No. 129-A, Series of 1987
and reiterated in the CARL and Memorandum Circular No. 54, Series of 1993
of the Office of the President. The DAR's jurisdiction over applications for
conversion is provided as follows:
A. The Department of Agrarian Reform (DAR) is mandated to "approve
or disapprove applications for conversion, restructuring or readjustment
of agricultural lands into non-agricultural uses," pursuant to Section 4 (j)
of Executive Order No. 129-A, Series of 1987.
B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive
authority to approve or disapprove applications for conversion of
agricultural lands for residential, commercial, industrial and other land
uses.
 C. Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988, likewise empowers the DAR to authorize
under certain conditions, the conversion of agricultural lands.
D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the Office
of the President, provides that "action on applications for land use
conversion on individual landholdings shall remain as the responsibility
of the DAR, which shall utilize as its primary reference, documents on
the comprehensive land use plans and accompanying ordinances
passed upon and approved by the local government units concerned,
together with the National Land Use Policy, pursuant to R.A. No. 6657
and E.O. No. 129-A. 87
Applications for conversion were initially governed by DAR A.O. No. 1, Series
of 1990 entitled "Revised Rules and Regulations Governing Conversion of
Private Agricultural Lands and Non-Agricultural Uses," and DAR A.O. No. 2,
Series of 1990 entitled "Rules of Procedure Governing the Processing and
Approval of Applications for Land Use Conversion." These A.O.'s and other
implementing guidelines, including Presidential issuances and national policies
related to land use conversion have been consolidated in DAR A.O. No. 07, Series of
1997. Under this recent issuance, the guiding principle in land use conversion is:
Court the power to nullify the CLOA's already issued to the farmer
beneficiaries. To assume the power is to short-circuit the administrative
process, which has yet to run its regular course. Respondent DAR must be
given the chance to correct its procedural lapses in the acquisition
proceedings. In Hacienda Palico alone, CLOA's were issued to 177 farmer
beneficiaries in 1993. 92 Since then until the present, these farmers have been
cultivating their lands. 93 It goes against the basic precepts of justice, fairness
and equity to deprive these people, through no fault of their own, of the land
they till. Anyhow, the farmer beneficiaries hold the property in trust for the
rightful owner of the land.
IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings
over the three haciendas are nullified for respondent DAR's failure to observe due
process therein. In accordance with the guidelines set forth in this decision and the
applicable administrative procedure, the case is hereby remanded to respondent
DAR for proper acquisition proceedings and determination of petitioner's application
for conversion.
SO ORDERED.

to preserve prime agricultural lands for food production while,

at the same time, recognizing the need of the other sectors of
society (housing, industry and commerce) for land, when
coinciding with the objectives of the Comprehensive Agrarian
Reform Law to promote social justice, industrialization and the
optimum use of land as a national resource for public
welfare. 88

"Land Use" refers to the manner of utilization of land, including its allocation,
development and management. "Land Use Conversion" refers to the act or process
of changing the current use of a piece of agricultural land into some other use as
approved by the DAR. 89 The conversion of agricultural land to uses other than
agricultural requires field investigation and conferences with the occupants of the
land. They involve factual findings and highly technical matters within the special
training and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with
specificity how the DAR must go about its task. This time, the field investigation is
not conducted by the MARO but by a special task force, known as the Center for
Land Use Policy Planning and Implementation (CLUPPI-DAR Central Office). The
procedure is that once an application for conversion is filed, the CLUPPI prepares the
Notice of Posting. The MARO only posts the notice and thereafter issues a certificate
to the fact of posting. The CLUPPI conducts the field investigation and dialogues with
the applicants and the farmer beneficiaries to ascertain the information necessary
for the processing of the application. The Chairman of the CLUPPI deliberates on the
merits of the investigation report and recommends the appropriate action. This
recommendation is transmitted to the Regional Director, thru the Undersecretary, or
Secretary of Agrarian Reform. Applications involving more than fifty hectares are
approved or disapproved by the Secretary. The procedure does not end with the
Secretary, however. The Order provides that the decision of the Secretary may be
appealed to the Office of the President or the Court of Appeals, as the case may
be, viz:

Appeal from the decision of the Undersecretary shall be made

to the Secretary, and from the Secretary to the Office of the
President or the Court of Appeals as the case may be. The
mode of appeal/motion for reconsideration, and the appeal
fee, from Undersecretary to the Office of the Secretary shall
be the same as that of the Regional Director to the Office of
the Secretary. 90

Indeed, the doctrine of primary jurisdiction does not warrant a court to

arrogate unto itself authority to resolve a controversy the jurisdiction over
which is initially lodged with an administrative body of special
competence. 91Respondent DAR is in a better position to resolve petitioner's
application for conversion, being primarily the agency possessing the
necessary expertise on the matter. The power to determine whether
Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt
from the coverage of the CARL lies with the DAR, not with this Court.

Finally, we stress that the failure of respondent DAR to comply with the
requisites of due process in the acquisition proceedings does not give this

41
G.R. No. 167809 November 27, 2008
LAND BANK OF THE PHILIPPINES, petitioner,
vs.
JOSEFINA R. DUMLAO, A. FLORENTINO R. DUMLAO, JR., STELLA
DUMLAO-ATIENZA, and NESTOR R. DUMLAO, represented by Attorney-
In-Fact, A. Florentino R. Dumlao, Jr., respondents.
DECISION
REYES, R.T., J.:
IN determining just compensation for lands covered by the government’s
Operation Land Transfer, which law applies – Presidential Decree (PD) No.
271 or Republic Act (RA) No. 66572 known as the Comprehensive Agrarian
Reform (CARP) Law?
This and other related questions are brought to the Court via this petition for
review on certiorari3 of the Decision4 of the Court of Appeals (CA) granting
each of respondents a five-hectare retention area and ordering petitioner to
pay them One Hundred Nine Thousand Pesos (P109,000.00) per hectare for
the excess of the retained area.
The Facts
Respondents Josefina R. Dumlao, A. Florentino R. Dumlao, Jr., Stella Dumlao-
Atienza, and Nestor R. Dumlao, heirs of the deceased Florentino G. Dumlao,
were the co-owners of several parcels of agricultural land with an aggregate
area of 32.2379 hectares situated at Villaverde, Nueva Vizcaya.
The properties are covered by: (1) Transfer Certificate of Title (TCT) No. T-
1180 with an area of 11.33 hectares; 5 (2) TCT No. 41508 consisting of 6.2201
hectares;6 (3) TCT No. 41507 with an area of 4.0001 hectares; 7 (4) TCT No.
41506 consisting of 3.9878 hectares; 8 (5) TCT No. 41504 consisting of 5.0639
hectares; and (6) TCT No. 41505 with an area of 1.6360 hectares.
The properties were placed under Operation Land Transfer by the
Department of Agrarian Reform (DAR). 9 However, the definite time of actual
taking was not stated.10
Pursuant to PD No. 27 and Executive Order (EO) No. 228, 11 a preliminary
valuation was made by the DAR on the landholdings covered by TCT Nos.
41504 and T-1180 with a total area of 16.3939 hectares. Finding the valuation
to be correct, petitioner bank informed respondents of the said
valuation.12 Payments were then deposited in the name of the
landowners.13 Meanwhile, processing of the properties covered by the other
four (4) titles, namely, TCT Nos. 41505, 41506, 41507 and 41508, remains
pending with the DAR.14
On July 9, 1995, respondents filed a Complaint 15 before the Regional Trial
Court (RTC) in Nueva Vizcaya, Branch 28, 16 for determination of just
compensation for their properties. It was claimed, inter alia, that they were
not paid their just compensation for the properties despite issuance of
certificates of land transfer to farmer-beneficiaries by the DAR. 17 They prayed
for the appointment of three (3) competent and disinterested commissioners
who would determine and report to the court the just compensation of their
landholdings based on their current fair market value, without prejudice to
their retention rights. They also asked for payment of actual and moral
damages, attorney’s fees, and costs of suit. 18
In its Answer, the DAR, represented by the Municipal Agrarian Reform Office
(MARO) and Provincial Agrarian Reform Office (PARO), posited that the
complaint lacked a cause of action and that the RTC did not have jurisdiction.
Under Section 50 of RA No. 6657, it is the Department of Agrarian Reform
Adjudication Board (DARAB) which is vested with primary and original
42
jurisdiction over land valuation, while the RTC as a Special Agrarian Court may
review the DARAB’s decision.19
Petitioner, which was impleaded as defendant in the valuation case before the
trial court, likewise filed its Answer, raising a similar line of
defense.20 Petitioner added that while payment for the properties covered by
TCT Nos. T-1180 and T-41504 were already deposited in trust for
respondents, the claimfolders for the remaining four properties is still with
the DAR. Thus, the filing of the complaint against petitioner was premature.
After the termination of pre-trial conference, respondent Atty. A. Florentino
Dumlao, Jr. submitted his affidavit on which he was cross-examined.
Following the submission of their testimonial and documentary evidence,
respondents rested their case.
Upon motion of respondents, the RTC, on April 15, 1998, appointed Atty.
John D. Balasya, Clerk of Court, as commissioner. He was mandated to
"receive, examine, and ascertain valuation of the properties." 21 Believing that
the valuation of the properties is not commensurate to their true value and,
hence, not a "just" compensation, Atty. Balasya stated in his Commissioner’s
Report dated July 21, 1998,22 that:
The evidences submitted by the parties as well as those gathered
by the undersigned show that only two (2) parcels of land were
valued under Presidential Decree No. 27. The parcels of land are
located in Nagbitin, Villaverde, Nueva Vizcaya and per Exhibit "O,"
the unirrigated riceland in Nagbitin are considered first class
agricultural lands. Under Tax Ordinance No. 96-45 adopting and
authorizing the 1996 Schedule of Fair Market Values for the
Different Classes of Real Property in Nueva Vizcaya (Exhibit "G" and
Exhibit "G-1") the market value of first class unirrigated Riceland in
the Municipality of Villaverde is P109,000.00 Per Department Order
No. 56-97 dated May 27, 1997 issued by the Department of
Finance, Re: Implementation of the Revised Zonal Values of Real
Properties in all Municipalities under the jurisdiction of Revenue
District Office No. 14 (Bayombong, Nueva Vizcaya), Revenue Region
No. 3, Tuguegarao, Cagayan for Internal Revenue Tax purposes, the
zonal value of land in other Barangays in Villaverde
is P60.00/square meter.
In summary, the undersigned believes that the valuation of
respondents Land Bank of the Philippines and the Department of
Agrarian Reform is not commensurate to the definition of just
compensation x x x.23
RTC Ruling
On October 14, 1998, the RTC issued a decision, 24 the fallo of which reads:
WHEREFORE, the Court hereby orders the remand of the case with
respect to TCT Nos. 1180 and T-41504 to the proper DAR agency
for further proceedings and orders the dismissal of the case with
respect to TCT Nos. T-41508, T-41507, T-41506, and T-41505 for
having been prematurely filed, there being no preliminary valuation
made yet on the said parcels of land. No pronouncement as to
costs.
SO ORDERED.25
Respondents moved for reconsideration. Consequently, on December 21,
1998, the trial court modified26 its decision in the following manner:
WHEREFORE, premises considered, in the higher interest of justice,
the Court MODIFIES its October 14, 1998 decision by ordering
plaintiffs to adduce additional evidence to support their
contentions under PD 27/EO 228 within 30 days from receipt of this
Order furnishing a copy thereof to the defendants who are given 15
 days from receipt to comment thereon. Thereafter, the matter shall
be deemed submitted for resolution.
SO ORDERED.27
Instead of adducing additional evidence, respondents filed a motion for
reconsideration of the trial court’s December 21, 1998 order. Positing that the
additional evidence required by the court pertains to the formula under PD
No. 27, respondents insisted on P109,000.00 per hectare, the market value of
the properties, as just compensation. 28 Accordingly, the trial court, on March
18, 1999, issued another order, 29 the dispositive portion of which states:
WHEREFORE, premises considered, the Court hereby sets the just
compensation in the amount of P6,912.50 per hectare for lot
covered by TCT No. T-1180 and the amount provided for in the
Land Valuation Summary and Farmers Undertaking for lot covered
by TCT No. T-41504 to be paid to the plaintiffs with interest from
the time of the taking until fully paid.
SO ORDERED.30
CA Disposition
Dissatisfied with the March 18, 1999 RTC Order, respondents appealed to the
CA. On February 16, 2005, the CA rendered a decision 31 modifying the trial
court’s ruling, viz.:
WHEREFORE, in view of the foregoing, the trial court’s decision is
hereby MODIFIED. The plaintiffs-appellants’ right of retention is
recognized. Plaintiffs-appellants Josefina, A. Florentino, Jr. and
Stella, all surnamed Dumlao are each entitled to retain five (5)
hectares pursuant to the provisions of R.A. 6657.
The excess in area after application of the right of retention is
valued at One Hundred Nine Thousand (P109,000.00) Pesos per
hectare with interest at the prevailing rate from the time of taking
until fully paid.
No costs.
SO ORDERED.32
The CA declared that the definite time of the actual taking of the subject
properties is not certain.33 Further, there is no doubt that the transfer of the
subject landholdings is governed by PD No. 27. 34 However, after the passage
of RA No. 6657, the formula relative to valuation under PD No. 27 no longer
applies.35 The appellate court held:
The trial court, therefore, in the determination of just compensation
is not confined within the valuation provisions of P.D. 27. It can
depart from it so long as the valuation assigned on the land
transferred is within the meaning of the phrase "just compensation"
provided for in J.M. Tuazon Co. vs. Land Tenure Administration (31
SCRA 413).36
Relying on the Commissioner’s Report, the CA assigned the lower value
of P109,000.00 per hectare as just compensation for the subject properties. 37
Issues
Petitioner bank has resorted to the present recourse, imputing to the CA the
following errors:
A.
WHEN THE CHALLENGED DECISION ADHERED TO THE
COMMISSIONER’S REPORT AND FIXED THE VALUEOF THE
LANDHOLDINGS AT P109,000.00 PER HECTARE WITH INTEREST AT
THE PREVAILING RATE FROM THE TIME OF TAKING UNTIL FULLY
43
PAID, WORKING A MODIFICATION OF THE LEGALLY PRESCRIBED
BASIC FORMULA FOR DETERMINING THE JUST COMPENSATION
OF LANDS ACQUIRED THROUGH OPERATION LAND TRANSFER
(OLT), CONTRARY TO THE CLEAR MANDATE OF PD 27/EO 228.
B.
WHEN THE CHALLENGED DECISION DECLARED THAT OCTOBER 21,
1972 CANNOT BE DEEMED AS THE DATE OF TAKING OF THE
SUBJECT PROPERTIES.
C.
WHEN THE CHALLENGED DECISION DECLARED THAT
RESPONDENTS’ ENTIRE LANDHOLDINGS ARE COVERED BY PD
27 AND THAT RESPONDENTS JOSEFINA, A. FLORENTINO, JR., AND
STELLA ARE ENTITLED TO RETAIN FIVE (5) HECTARES
EACH.38 (Underscoring supplied)
Our Ruling
The just compensation due to respondents should be determined under
the provisions of RA No. 6657.
Petitioner asserts that since the properties were acquired pursuant to PD No.
27, the formula for computing just compensation provided by said decree
and EO No. 228 should apply. Respondents, on the other hand, insist on the
application of RA No. 6657 with respect to the computation.
Petitioner is mistaken. The 1987 Constitution, specifically Article XIII on Social
Justice and Human Rights, mandates the State’s adoption of an agrarian
reform program for the benefit of the common people.39 The recognition of
the need for genuine land reform, however, started earlier. PD No. 27, issued
on October 21, 1972, more than a decade before the enactment of the 1987
Constitution, provided for the compulsory acquisition of private lands for
distribution among tenant-farmers and specified the maximum retention
limits for landowners.40
The agrarian reform thrust was further energized with the enactment of EO
No. 228 on July 17, 1987, when full land ownership was declared in favor of
the beneficiaries of PD No. 27. The executive issuance also provided for the
valuation of still unvalued covered lands, as well as the manner of their
payment. On July 22, 1987, Presidential Proclamation No. 131, instituting a
comprehensive agrarian reform program, as well as EO No. 229 41 providing
the mechanics for its implementation, were likewise enacted. 42
When the Philippine Congress was formally reorganized, RA No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law of 1988, was
immediately enacted. It was signed by President Corazon Aquino on June 10,
1988. This law, while considerably changing the earlier presidential issuances,
including PD No. 27 and EO No. 228, nevertheless gave them suppletory
effect insofar as they are not inconsistent with its provisions. 43
On one hand, PD No. 27 provides the formula to be used in arriving at the
exact total cost of the acquired lands:44
For the purpose of determining the cost of the land to be
transferred to the tenant-farmer pursuant to this Decree, the value
of the land shall be equivalent to two and one half (2-1/2)
times the average harvest of three normal crop years
immediately preceding the promulgation of this Decree.
The total cost of the land, including interest at the rate of six (6) per
centum per annum, shall be paid by the tenant in fifteen (15) years
of fifteen (15) equal annual amortizations. (Emphasis supplied)
Implementing the formula under PD No. 27, EO No. 228 states:
 SECTION 2. Henceforth, the valuation of rice and corn lands
covered by P.D. No. 27 shall be based on the average gross
production determined by the Barangay Committee on Land
Production in accordance with Department Memorandum Circular
No. 26, series of 1973 and related issuances and regulation of the
Department of Agrarian Reform. The average gross production
per hectare shall be multiplied by two and a half (2.5), the
product of which shall be multiplied by Thirty-Five Pesos
(P35.00), the government support price for one cavan of 50
kilos of palay on October 21, 1972, or Thirty-One Pesos (P31.00),
the government support price for one cavan of 50 kilos of corn on
October 21, 1972, and the amount arrived at shall be the value
of the rice and corn land, as the case may be, for the purpose
of determining its cost to the farmer and compensation to the
landowner. (Emphasis supplied)
Thus, under PD No. 27 and EO No. 228, the formula for computing the Land
Value (LV) or Price Per Hectare (PPH) of rice and corn lands is:
2.5 x AGP45 x GSP46 = LV or PPH
The parameters of PD No. 27 and EO No. 228 are manifestly different from
the guidelines provided by RA No. 6657 for determining just compensation.
Section 17 of RA No. 6657 is explicit:
Sec. 17. Determination of Just Compensation. – In determining
just compensation, the cost of acquisition of the land, the current
value of the 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.
Due to the divergent formulae or guidelines presented by these laws, a
number of cases have already been brought to the Court regarding which law
applies in computing just compensation for landholdings acquired under PD
No. 27. On this score, the Court has repeatedly held that if just
compensation was not settled prior to the passage of RA No. 6657, it
should be computed in accordance with said law, although the property
was acquired under PD No. 27.
In the recent Land Bank of the Philippines v. Heirs of Angel T. Domingo,47 We
rejected the DAR’s valuation of just compensation based on the formula
provided by PD No. 27 and EO No. 228. We held then that Section 17 of RA
No. 6657 is applicable. The latter law, being the latest law in agrarian reform,
should control.
When RA 6657 was enacted into law in 1988, the agrarian reform
process in the present case was still incomplete as the amount of
just compensation to be paid to Domingo had yet to be settled.
Just compensation should therefore be determined and the
expropriation process concluded under RA 6657.
Guided by this precept, just compensation for purposes of
agrarian reform under PD 27 should adhere to Section 17 of RA
6657 x x x.
In Land Bank of the Philippines v. Estanislao,48 the Court ruled that taking into
account the passage of RA No. 6657 in 1988 pending the settlement of just
compensation, it is that law which applies to landholdings seized under PD
No. 27, with said decree and EO No. 288 having only suppletory effect. Prior
to that declaration, the Court already decreed in Land Bank of the Philippines
v. Natividad,49 citing Paris v. Alfeche,50 that:
44
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 (6657) before the completion of the
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. 51
Agrarian reform is a revolutionary kind of expropriation. 52 The recognized
rule in expropriation is that title to the expropriated property shall pass from
the owner to the expropriator only upon full payment of the just
compensation.53 Thus, payment of just compensation to the landowner is
indispensable.
In fact, Section 4, Article XIII of the 1987 Constitution mandates that the
redistribution of agricultural lands shall be subject to the payment of just
compensation. The deliberations of the 1986 Constitutional Commission on
this subject reveal that just compensation should not do violence to the Bill of
Rights but should also not make an insurmountable obstacle to a successful
agrarian reform program. Hence, the landowner’s right to just compensation
should be balanced with agrarian reform. 54
In the case under review, the agrarian reform process was not completed. The
just compensation to be paid respondents was not settled prior to the
enactment of RA No. 6657, the law subsequent to PD No. 27 and EO No. 228.
In fact, the non-payment of just compensation is precisely the reason why
respondents filed a petition for the determination of just compensation
before the RTC on July 13, 1995.
The records do not show when respondents or their father, Florentino
Dumlao, was formally notified of the expropriation. The records, however,
bear out that the bank sent Florentino Dumlao a letter stating that it had
approved the land transfer claim involving that property covered by TCT No.
T-1180 on November 5, 1990. Moreover, the various Land Valuation Summary
and Farmers Undertakings showing the valuation of the land transferred to
the farmers-beneficiaries were approved on May 17, 1989 55 and July 21,
1989.56 It is thus crystal clear that even after the passage of RA No. 6657 in
1988, neither petitioner nor the DAR had settled the matter of just
compensation with respondents as landowners.
Besides, RA No. 6657 applies to rice and corn lands covered by PD No. 27.
In Paris v. Alfeche,57 the Court explained:
Considering the passage of RA 6657 before the completion of the
application of the agrarian reform process to the subject lands, the
same should now be completed under the said law, with PD 27 and
EO 228 having only suppletory effect. This ruling finds support
in Land Bank of the Philippines v. CA, wherein the Court stated:
"We cannot see why Sec. 18 of RA 6657 should not apply to
rice and corn lands under PD 27. Section 75 of RA 6657 clearly
states that the provisions of PD 27 and EO 228 shall only have a
suppletory effect. Section 7 of the Act also provides –
Sec. 7. Priorities. – The DAR, in coordination with the
PARC shall plan and program the acquisition and
distribution of all agricultural lands through a period of
ten (10) years from the effectivity of this Act. Lands shall
be acquired and distributed as follows:
Phase One: Rice and Corn lands under P.D. 27;
all idle or abandoned lands; all private lands
voluntarily offered by the owners for agrarian
reform; x x x and all other lands owned by the
government devoted to or suitable for
agriculture, which shall be acquired and
 distributed immediately upon the effectivity of
this Act, with the implementation to be
completed within a period of not more than
four (4) years.
This eloquently demonstrates 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.
In Association of Small Landowners of the Philippines v.
Secretary of Agrarian Reform, this Court applied the
provisions (of) RA 6657 to rice and corn lands when it
upheld the constitutionality of the payment of just
compensation for PD 27 lands through the different
modes stated in Sec. 18." (Emphasis supplied)
Verily, there is nothing to prevent Section 17 of RA No. 6657 from being
applied to determine the just compensation for lands acquired under PD No.
27.
In Natividad,58 the Court ruled that the DAR’s failure to determine the just
compensation for a considerable length of time made it inequitable to follow
the guidelines provided by PD No. 27 and EO No. 228. Hence, RA No. 6657
should apply. The same rationale was followed in Meneses v. Secretary of
Agrarian Reform.59 There, the Court noted that despite the lapse of more
than thirty (30) years since the expropriation of the property in 1972,
petitioners had yet to benefit from it, while the farmer-beneficiaries were
already harvesting the property’s produce. Thus, RA No. 6657 was applied
instead of PD No. 27 in determining just compensation.
In Meneses, the Court compared the conflicting rulings in Gabatin v. Land
Bank of the Philippines,60 cited by petitioner, and Land Bank of the Philippines
v. Natividad.61 This Court affirmed Natividad, stating that it would be more
equitable to apply the same due to the circumstances obtaining, i.e. the more
than 30-year delay in the payment of just compensation.
The application of RA No. 6657 due to the inequity faced by landowners
continued in Lubrica v. Land Bank of the Philippines.62 The landowners were
also deprived of their properties in 1972 but had yet to receive their just
compensation even after the passage of RA No. 6657. Since the landholdings
were already subdivided and distributed to the farmer-beneficiaries, the
Court, speaking through Justice Consuelo Ynares-Santiago, deemed it
unreasonable to compute just compensation using the values at the time of
taking in 1972 as dictated by PD No. 27, and not at the time of payment
pursuant to RA No. 6657.
We find no cogent reason not to apply the same ratiocination here. In the
case at bar, emancipation patents, and eventually, transfer certificates of title,
were issued to the farmer-beneficiaries 63 at least twenty-eight (28) years ago.
On March 16, 1990, the DAR acknowledged that the property covered by TCT
No. T-1180 had already been distributed to farmer-beneficiaries through
emancipation patents. As early as June 10, 1975, a portion of the same
property was conveyed to a certain Rosalina Abon, although this was not
annotated on the owner’s title.64
Needless to say, respondents have already been deprived of the use and
dominion over their landholdings for a substantial period of time. In the
interim, petitioner bank has abjectly failed to pay, much less to determine, the
just compensation due to respondents. The law clearly recognizes that the
exact value of lands taken under PD No. 27, or the just compensation to be
given to the landowner must be determined with certainty before the land
titles are transferred.65 Petitioner’s gross failure to compensate respondents
for loss of their land, while transferring the same to the farmer-beneficiaries,
45
make it unjust to determine just compensation based on the guidelines
provided by PD No. 27 and EO No. 228.
Accordingly, just compensation should be computed in accordance with RA
No. 6657 in order to give full effect to the principle that the recompense due
to the landowner should be the full and fair equivalent of the property taken
from the owner by the expropriator. The measure is not the taker’s gain but
the owner’s loss. The word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for the
property to be taken shall be real, substantial, full, and ample.66
The determination of just compensation is a function addressed to the courts
of justice and may not be usurped by any other branch or official of the
government.67 However, the determination made by the trial court, which
relied solely on the formula prescribed by PD No. 27 and EO No. 228, is
grossly erroneous. The amount of P6,912.50 per hectare, which is based on
the DAR valuation of the properties "at the time of their taking in the
1970s,"68 does not come close to a full and fair equivalent of the property
taken from respondents.
Meanwhile, the CA’s act of setting just compensation in the amount
of P109,000.00 would have been a valid exercise of this judicial function, had
it followed the mandatory formula prescribed by RA No. 6657. However, the
appellate court merely chose the lower of two (2) values specified by the
commissioner as basis for determining just compensation, namely:
(a) P109,000.00 per hectare as the market value of first class unirrigated rice
land in the Municipality of Villaverde; and (b) P60.00 per square meter as
the zonal value of the land in other barangays in Villaverde. This is likewise
erroneous because it does not adhere to the formula provided by RA No.
6657.
It cannot be overemphasized that the just compensation to be given to the
owner cannot be assumed and must be determined with certainty. 69 Its
determination involves the examination of the following factors specified in
Section 17 of RA No. 6657, as amended, namely: (1) the cost of acquisition 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. 70
Section 17 was converted into a formula by the DAR through Administrative
Order (AO) No. 6, Series of 1992, 71 as amended by AO No. 11, Series of
1994,72 the pertinent portions of which provide:
A. There shall be one basic formula for the valuation of lands
covered by [Voluntary Offer to Sell] or [Compulsory Acquisition]
regardless of the date of offer or coverage of the claim:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three factors are present,
relevant and applicable.
A.1 When the CS factor is not present and CNI and MV are
applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
 A.2 When the CNI factor is not present, and CS and MV are
province or region.
applicable, the formula shall be:

LV = (CS x 0.9) + (MV x 0.1)

CO = Cost of Operations
A.3 When both the CS and CNI are not present and only MV is Whenever the cost of opera
applicable, the formula shall be: an assumed net income rat
Landholdings planted to co
LV = MV x 2
of offer/coverage shall con
In no case shall the value of the land using the formula MV x 2 shall continue to conduct jo
exceed the lowest value of land within the same estate under applicable NIR for each cro
consideration or within the same barangay or municipality (in that
order) approved by LBP within one (1) year from receipt of
.12 = Capitalization Rate
claimfolder.

xxxx xxxx

A.6 The basic formula in the grossing-up of valuation inputs such as C. CS shall refer to any one or the average of all the applicable sub-
LO’s Offer, Sales Transaction (ST), Acquisition Cost (AC), Market factors, namely, ST, AC and MVM:
Value Based on Mortgage (MVM) and Market Value per Tax
Declaration (MV) shall be: Where: ST = Sales Transactions as define

Grossed-up Valuation Valuation Input x Regional Consumer Price Index (RCPI)

= AC = Acquisition Cost as defined
input Adjustment Factor

The RCPI Adjustment Factor shall refer to the ratio of RCPI for the MVM = Market Value Based on Mo
month issued by the National Statistics Office as of the date when
the claimfolder (CF) was received by LBP from DAR for processing xxxx
or, in its absence, the most recent available RCPI for the month
issued prior to the date of receipt of CF from DAR and the RCPI for D. In the computation of Market Value per Tax Declaration (MV),
the month as of the date/effectivity/registration of the valuation the most recent Tax Declaration (TD) and Schedule of Unit Market
input. Expressed in equation form: Value (SMV) issued prior to receipt of claimfolder by LBP shall be
considered. The Unit Market Value (UMV) shall be grossed up from
the dateofof its effectivity up to the date of receipt of claimfolder by
RCPI for the Month as of the Date of Receipt
LBP recent
Claimfolder by LBP from DAR or the Most from DAR
RCPI for processing, in accordance with item II.A.A.6.
RCPI (Emphasis and
for the Month Issued Prior to the Date of RCPI Receiptunderscoring
of supplied)
Adjustment = CF While the determination of just compensation involves the exercise of judicial
Factor ___________ discretion, such discretion must be discharged within the bounds of the
RCPI for the Month Issued as of73 the
law. The DAR, as the government agency principally tasked to implement
Date/Effectivity/Registration of the Valuation Input
the agrarian reform program, has the duty to issue rules and regulations to
carry out the object of the law. The DAR administrative orders precisely filled
B. Capitalized Net Income (CNI) – This shall refer to the difference
in the details of Section 17 of RA No. 6657 by providing a basic formula by
between the gross sales (AGP x SP) and total cost of operations
which the factors mentioned in the provision may be taken into
(CO) capitalized at 12%.
account.74 Special agrarian courts are not at liberty to disregard the formula
Expressed in equation form: devised to implement the said provision because unless an administrative
order is declared invalid, courts have no option but to apply it. 75
CNI = (AGP x SP) – CO
___________ In his Report, the Commissioner merely specified the market value of first
.12 class unirrigated ricelands in the municipality where the properties are
located, as well as the zonal value of lands in other barangays in the same
municipality. For their part, respondents attempted to prove the following:
Where: CNI = Capitalized Net Income
market value of unirrigated ricelands for the Municipality of Villaverde, set
at P109,000.00 per hectare, pursuant to Sangguniang Bayan Tax Ordinance
AGP = Latest available 12-month's gross 76
No. 96-45; production immediately
annual production ofpreceding
unirrigated ricefields in Villaverde, at 80
the date of offer in casecavans
of VOS during
or date of"palagad" cropping,in case
notice of coverage and 101 cavans under regular
of CA.
cropping;77 government support price for palay for the period October 1,
1990 to October 1995 at P6.00 per kilo, and from November 1, 1995 to the
SP = The average of the latest available 12 month’s selling prices prior to
time of the filing of the petition at P8.00 per kilo.78
the date of receipt of the claimfolder by LBP for processing, such
prices to be secured fromHowever, the records
the Department do not (DA)
of Agriculture bear and
out if these factors are the only
ones relevant,
other appropriate regulatory present
bodies or, in and from
their absence, applicable
the in this case, so that just
compensation
Bureau of Agricultural Statistics. can now
If possible, be shall
SP data computed
be by the Court based on the formula
provided
gathered from the barangay by the DARwhere
or municipality administrative orders.
the property is Based on the evidence adduced,
located. In the absenceitthereof,
appearsSPthat
may market value
be secured and the
within comparable net income (CNI) are being

46
proved. However, CNI cannot be computed in the absence of information
regarding cost of operations.79
We are thus compelled to remand the case to the court a quo to determine
the final valuation of respondents’ properties. The trial court is mandated to
consider the factors provided under Section 17 of RA No. 6657, as translated
into the formula prescribed by DAR AO No. 6-92, as amended by DAR AO No.
11-94.
Furthermore, upon its own initiative, or at the instance of any of the parties,
the RTC may again appoint one or more commissioners to examine,
investigate and ascertain facts relevant to the dispute including the valuation
of properties and to file a written report with the RTC. 80
We next address the second issue – date of taking.
The "taking" of the properties for the purpose of computing just
compensation should be reckoned from the date of issuance of
emancipation patents, and not on October 21, 1972, as petitioner insists.
The nature of the land at that time determines the just compensation to be
paid.81
We cannot sustain petitioner’s position that respondents’ properties were
statutorily taken on October 21, 1972, the date of effectivity of PD No. 27;
that on that date, respondents were effectively deprived of possession and
dominion over the land; and that when EO No. 228 fixed the basis in
determining land valuation using the government support price of P35.00 for
one cavan of 50 kilos of palay on October 21, 1972, it was consistent with the
settled rule that just compensation is the value of the property at the time of
the taking.82
In Association of Small Landowners v. Secretary of Agrarian Reform,83 the
Court held that title to the property expropriated shall pass from the owner to
the expropriator only upon full payment of just compensation. The Court
further held that:
It is true that P.D. No. 27 expressly ordered the emancipation of
tenant-farmer as [of] 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 farmer’s cooperative. It was
understood, however, that full payment of just compensation
also had to be made first, conformably to the constitutional
requirement.84 (Emphasis supplied)
In Land Bank of the Philippines v. Estanislao,85 the Court declared that seizure
of landholdings or properties covered by PD No. 27 did not take place on
October 21, 1972, but upon the payment of just compensation.
Land Bank’s 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,
Malacañang, 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.86 (Emphasis in the original)
However, for purposes of computing just compensation, this Court recently
declared in Land Bank of the Philippines v. Heirs of Angel T. Domingo 87 that
the time of taking should be reckoned from the issue dates of emancipation
patents.
The date of taking of the subject land for purposes of
computing just compensation should be reckoned from the
47
issuance dates of the emancipation patents. An emancipation
patent constitutes the conclusive authority for the issuance of a
Transfer Certificate of Title in the name of the grantee. It is from the
issuance of an emancipation patent that the grantee can acquire
the vested right of ownership in the landholding, subject to the
payment of just compensation to the landowner. 88 (Emphasis
supplied)
It is undisputed that emancipation patents were issued to the farmer-
beneficiaries. However, their issuance dates are not shown. As such, the trial
court should determine the date of issuance of these emancipation patents in
order to ascertain the date of taking and proceed to compute the just
compensation due to respondents, in accordance with RA No. 6657.
Now, to the third and final issue.
Respondents are entitled to payment of just compensation even on
those properties which have not been processed by the DAR.
Petitioner admits that of respondents’ landholdings, only those covered by
TCT Nos. T-1180 and T-41504, totaling 16.3939 hectares, were processed and
initially valued by the DAR. Pending initial processing by the DAR of the
remaining landholdings, petitioner posits that it cannot be made to pay the
amount of P109,000.00 per hectare for those covered by TCT Nos. 41508,
41507, 41506, and 41505, with an aggregate area of 17.2379 hectares.
The argument is specious for three reasons.
First, the determination of just compensation is judicial in nature. The DAR’s
land valuation is only preliminary and is not, by any means, final and
conclusive upon the landowner or any other interested party. In the exercise
of its functions, the courts still have the final say on what the amount of just
compensation will be.89
In Natividad, the Court held that:
[T]here is nothing contradictory between the DAR’s 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.
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.
Thus, the trial court did not err in taking cognizance of the case as
the determination of just compensation is a function addressed to
the courts of justice.90 (Emphasis supplied)
In fact, the law does not make the DAR valuation absolutely binding as the
amount payable by petitioner. A reading of Section 18 91 of RA No. 6657
shows that it is the courts, not the DAR, which make the final determination
of just compensation.
Accordingly, RA No. 6657 directs petitioner to pay the DAR’s land valuation
only if the landowner, the DAR and petitioner agree on the amount of just
compensation. Otherwise, the amount determined by the special agrarian
court as just compensation shall be paid by petitioner. Corollarily, there is no
reason for petitioner to wait for the DAR valuation of the properties, if the
court has already determined the just compensation due to respondents.
Second, to wait for the DAR valuation despite its unreasonable neglect and The opinion of the MARO 97 that respondents are not entitled to retain areas
delay in processing the four properties’ claimfolders is to violate the out of their landholdings because they applied for the same after the grace
elementary rule that payment of just compensation must be within a
period set by the government 98 fails to persuade. A landowner whose land
reasonable period from the taking of property. Cosculluela v. Court of
was taken pursuant to PD No. 27 has a right to retain seven hectares of land,
Appeals92 could not have been clearer: provided that the landowner is cultivating the area or will now cultivate
Just compensation means not only the correct determination it.99 Those who did not avail of their rights of retention under PD No. 27 are
of the amount to be paid to the owner of the land but also the
entitled to exercise the same under Section 6 100 of RA No.
payment of the land within a reasonable time from its taking.
Without prompt payment, compensation cannot be considered 6657.101 Landowners may still avail of their retention rights notwithstanding
"just" for the property owner is made to suffer the consequence of the August 27, 1985 deadline imposed by DAR AO No. 1, Series of 1985.
being immediately deprived of his land while being made to wait In Daez v. Court of Appeals,102 the Court, citing Association of Small
for a decade or more before actually receiving the amount Landowners, Inc. v. Secretary of Agrarian Reform,103 disregarded said
necessary to cope with his loss. x x x.93 (Emphasis supplied) deadline and sustained the landowner’s retention rights. Notably, under RA
No. 6657, landowners who do not personally cultivate their lands are no
In the case at bar, the properties have long been expropriated by the
longer required to do so in order to qualify for the retention of an area not
government and their fruits enjoyed by the farmer-beneficiaries. Respondent
exceeding five hectares. Instead, they are now required to maintain the actual
have been made to wait for decades for payment of their recompense. They
tiller of the area retained, should the latter choose to remain in those
were not even allowed to withdraw the amount claimed to have been
deposited with petitioner bank on their behalf. It would certainly be lands.104 Verily, there is no impediment to the exercise by respondents of
iniquitous to wait for the DAR to process the properties covered by the four their retention rights under RA No. 6657.
other titles before the special agrarian court can finally determine the amount In sum, We rule that:
of their just compensation.94
1. The provisions of RA No. 6657 apply in determining the just compensation
Third, while the DAR is vested with primary jurisdiction to determine in due to respondents for the taking of their property. However, the value
a preliminary manner the amount of just compensation, the circumstances of P109,000.00, based on the property’s market value and assigned by the CA
of this case militate against the application of the doctrine of primary as just compensation, is erroneous. The trial court is thus directed to receive
jurisdiction. evidence pertaining to the factors to be considered in determining just
compensation, in accordance with DAR AO No. 6, Series of 1992, as amended
The principle of exhaustion of administrative remedies is a relative one and is
by AO No. 11, Series of 1994.
flexible depending on the peculiarity and uniqueness of the factual and
circumstantial settings of a case. It is disregarded: (1) when there is a violation 2. For purposes of computing just compensation, the date of issuance of
of due process; (2) when the issue involved is purely a legal question; (3) emancipations is deemed the date of taking, not October 21, 1972.
when the administrative action is patently illegal and amounts to lack or
3. Respondents are entitled to payment of just compensation on their entire
excess of jurisdiction; (4) when there is estoppel on the part of the
landholdings covered by Operation Land Transfer, except for the five hectares
administrative agency concerned; (5) when there is irreparable injury; (6)
of retention area each of them are entitled to.
when respondent is a department secretary whose acts, as an alter ego of the
President, bears the implied and assumed approval of the latter; (7) when to WHEREFORE, the petition is DENIED. The case is REMANDED to the court a
require exhaustion of administrative remedies would be unreasonable; quo for final determination of just compensation due to respondents.
(8) when it would amount to a nullification of a claim; (9) when the subject
SO ORDERED.
matter is a private land in land case proceedings; (10) when the rule does not
provide a plain, speedy and adequate remedy; (11) when there are
circumstances indicating the urgency of judicial intervention, and
unreasonable delay would greatly prejudice the complainant; (12) when
no administrative review is provided by law; (13) where the rule of qualified
political agency applies; and (14) when the issue of non-exhaustion of
administrative remedies has been rendered moot.95

Here, to require exhaustion of administrative remedies would be

unreasonable. What is more, judicial intervention is necessary so as not to
unduly prejudice the landowners. Respondents have long been deprived of
their landholdings, yet compensation has been withheld from them.
Accordingly, to make respondents wait for the DAR to process the
claimfolders of the remaining four properties would be unreasonable, unjust
and manifestly prejudicial to them.

Respondents are entitled to the right of retention over their lands.

The right of retention is constitutionally guaranteed, subject to qualification

by the legislature. It serves to mitigate the effects of compulsory land
acquisition by balancing the rights of the landowner and the tenant and by
implementing the doctrine that social justice was not meant to perpetrate an
injustice against the landowner. A retained area, as its name denotes, is land
which is not supposed to anymore leave the landowner’s dominion, thus
sparing the government from the inconvenience of taking land only to return
it to the landowner afterwards, which would be a pointless process. 96

48
 G.R. No. 191615, August 02, 2017 010(M)
VICTORIA P. CABRAL, Petitioner, v. HEIRS OF FLORENCIO ADOLFO AND
Elias Policarpio EP-
HEIRS OF ELIAS POLICARPIO, Respondents. 12 A-117982-H 18019
009(M)
DECISION On January 16, 1990, petitioner filed a petition before the Barangay Agrarian
Reform Council (BARC) for the cancellation of the EPs issued in favor of
TIJAM, J.:
Florencio Adolfo, Gregorio Lazaro, Gregoria Adolfo, and Elias Policarpio. 11 On
Assailed in this Petition for Review on Certiorari1 under Rule 45 is the Court January 19, 1990, petitioner filed another petition for cancellation of the said
of Appeals' (CA) Decision2dated November 23, 2009 in CA-G.R. SP No. EPs and TCTs before the DAR. The said petition was, however, forwarded to
the DAR Regional Director, who dismissed the case. In a case decided by this
108518. The CA's Resolution3 dated March 15, 2010, denying petitioner's
Motion for Reconsideration in the said case is likewise impugned herein. Court in 2001 entitled Victoria P. Cabral v. CA,12 however, this Court held that
the Regional Director had no jurisdiction over the case as it is the PARAD who
The Facts
has jurisdiction over cases involving cancellation of EPs. 13

Petitioner claims that she is the registered owner of several parcels of land
Meanwhile, in 1994, petitioner filed an OLT Letter Protest before the DAR
situated, at Barangay Purok (formerly Iba), Meycauayan, Bulacan, originally
Regional Director, questioning the coverage of her landholdings under P.D.
covered by Original Certificate of Title (OCT) No. 0-1670, subsequently
No. 27, on the ground that the same had already been classified as either
renumbered as OCT No. 0-220 (M), of the Registry of Deeds of Meycauayan,
Bulacan.4 The property subject of the instant case are portions of Lot 4 of residential, commercial, or industrial.14
Plan Psu-164390 covered by the said OCT No. 0-1670.
In its November 16, 1994 Order, the DAR Regional Director denied the said
On October 21, 1972, the Ministry of Agrarian Reform subjected the said land OLT protest, finding that despite the reclassification of the subject parcels of
under the coverage of the Operation Land Transfer (OLT) program of the land, the same will not be a bar in placing the said lands under the OLT

government under Presidential Decree (P.D.) No. 27. 5 program, considering that petitioner's landholdings exceeded 24 hectares. 15

In July 1973, petitioner sought to convert her landholdings, which include not On appeal, the then DAR Secretary Ernesto D. Garilao, in his Order 16 dated
only the subject property but also her lands in Marilao and Meycauayan, to July 12, 1996, affirmed the DAR Regional Director's Order, declaring that the
non-agricultural purposes.6 In his 2nd Indorsement Letter 7 to the DAR subject landholdings are covered by the OLT program under P.D. No. 27 as it
Secretary dated October 1, 1973, DAR District Officer Fernando Ortega, stated was only after the landholdings were placed under the OLT program on
that per the reports of the Agrarian Reform Team, the subject property was October 21, 1972 when it was classified as within the residential zone. The
not included in the OLT program under P.D. No. 27, nor has any portion Order cited Administrative Order (A.O.) No. 06, series of 1994, 17 which
thereof been transferred to a tenant. Thus, District Officer Ortega provides that reclassification of lands to non-agricultural uses shall not
recommended the conversion of the same into residential, commercial, operate to divest tenant-farmers of their rights over lands covered by P.D. No.
industrial, or other purposes.8 27, which were vested prior to June 15, 1988, and also Executive Order (E.O.)
No. 22818 which provides that tenant-farmers are deemed full owners of the
On April 25, 1988, Emancipation Patents (EPs) were issued to Gregoria Adolfo, land they acquired by virtue of P.D. No. 27 as of October 21, 1972. In fine,
Gregorio Lazaro, Florencio Adolfo, and Elias Policarpio pursuant to the OLT Secretary Garilao concluded that the petitioner's landholdings are covered by
program covering the subject property. Corresponding Transfer Certificates of
P.D. No. 27.19
Titles (TCTs) were then issued to herein respondents Florencio Adolfo on
October 24, 1989 and Elias Policarpio on November 8, 1989 upon registration
On August 16, 2003, petitioner filed a Petition for Cancellation of
of their respective EPs with the Register of Deeds of Meycauayan, Bulacan 9 as
Emancipation Patents and Torrens Title 20 before the Office of the Provincial
follows:10
Agrarian Reform Adjudicator (PARAD) of Malolos City, Bulacan against the
said respondents and the Department of Agrarian Reform (DAR), Region III. In
LOT AREA (sq.
NAMES EP NO. TCT NO. the main, petitioner contended that the issuance of the said EPs and TCTs
NO. m.)
were violative of applicable agrarian laws considering that the subject
EP- property was already classified as residential, hence, not covered by P.D. No.
Florencio Adolfo 1 A-117858 29759
003(M) 27. Petitioner invoked a Certification21 dated February 24, 1983 issued by the
EP- Zoning Administrator of the Office of the HSRC Deputized Zoning
Florencio Adolfo 2 A-117859-H 957
004(M) Administration of Meycauayan, Bulacan, and Certification 22dated August 28,
1989 issued by the Zoning Administrator of Meycauayan, Bulacan, both
EP-
Gregoria Adolfo 3 A-117978-H 630 attesting to the classification of the subject property as within the residential
005(M)
zone. Petitioner also averred that the said EPs were issued without due
EP- process and without payment of just compensation. 23
Gregoria Adolfo 4 A-117979 21793
006(M)
On June 18, 2004, the Provincial Reform Adjudicator (PARAD) rendered a
EP-
Gregorio Lazaro 5 A-117980-H 839 Decision24 in favor of the petitioner, thus:chanRoblesvirtualLawlibrary
007(M)

EP- WHEREFORE, premises considered, judgment is hereby

Gregorio Lazaro 10 A-117981 16906 rendered, as follows:
008(M)

Elias Policarpio 11 A-117983 EP- 995 1. Ordering the Register of Deeds of Bulacan to cancel the

49
 Emancipation Patent Titles issued to the private respondents, and Florencio Adolfo who is a party herein but not in G.R. No. 198160).
as follows: FLOPRENCIO [sic] ADOLFO - TCT No. EP-003,
FLORECNCIO [sic] ADOLFO TCT No. RP-004, GREGORIA Essentially, this Court upheld the findings of the PARAD and DARAB,
ADOLFO TCT No. EP-005, GREGORIA ADOLFO - TCT No. EP- recognizing the zoning reclassification made on the subject property as
006, GREGORIO LAZARO - TCT No. EP-008, ELIAS evidenced by the Certifications dated February 24, 1983 and August 28, 1989
POLICARPIO - TCT No. 010, ELIAS POLICARPIO - TCT No. 009. issued by the zoning administrator of Meycauayan, Bulacan above-cited. We
also considered therein the 2nd Indorsement Letter of then DAR District
2. Ordering the private respondents and all persons claiming Officer Ortega, declaring that petitioner's landholdings were not covered by
rights under them to vacate the landholdings under their the OLT program. The Court also found that no CLTs were issued in favor of
respective possessions and surrender the same to petition. the respondents therein, which bolstered the fact that the subject property
was not covered by P.D. No. 27.
3. Ordering the Register of Deeds of Bulacan to revived (sic)
OCT No. 0-220-(M) (formerly OCT No. 0-1670 registered Hence, as it was established that Lot 4 was not covered by the OLT program,
under the name of petitioner Victoria Cabral), insofar as Lot 4 this Court declared that the EPs covering the subject lands therein were
thereof is concerned. erroneously issued to the respondents.31

SO ORDERED.25 With this judicial precedent in mind, We now proceed to resolve the instant
petition.
Aggrieved, Gregoria Adolfo, Gregorio Lazaro, Heirs of Florencio Adolfo, and Issue
Heirs of Elias Policarpio appealed the said decision to the Department of
Agrarian Reform Adjudication Board (DARAB). Did the CA err in reversing the PARAD and DARAB's order of cancelling the
subject EPs/TCTs?
In its July 29, 2008 Decision26, the DARAB affirmed PARAD's Decision,
The Court's Ruling
thus:chanRoblesvirtualLawlibrary

WHEREFORE, premises considered, the Appeal is DENIED for We answer in the affirmative.
lack of merit and the assailed Decision is hereby affirmed.
DAR Administrative Order No. 02-94 32 provides that a registered EP or
SO ORDERED.27 Certificate of Land Ownership Award (CLOA) may be cancelled on the
following grounds, to wit:chanRoblesvirtualLawlibrary
Undaunted, herein respondents elevated the case to the CA for review. Grounds for the cancellation of registered EPs or CLOAs may
include but not limited to the following:
In its assailed Decision, the CA reversed and set aside the DARAB Decision.
The CA found that the subject land was never converted into a residential 1. Misuse or diversion of financial and support services
land and, therefore, not exempt from the coverage of the government's OLT extended to the ARB (Agrarian Reform Beneficiaries); (Section
program under P.D. No. 27, relying heavily upon Secretary Gari1ao's Order 37 of R.A. No. 6657)
above-cited. Hence, the CA concluded that when the predecessors-in-interest
of the herein respondents were identified as farmer-beneficiaries and were 2. Misuse of the land; (Section 22 of R.A. No. 6657)
given EPs/TCTs, they were deemed owners thereof. The CA disposed,
thus:chanRoblesvirtualLawlibrary 3. Material misrepresentation of the ARB's basic qualifications
WHEREFORE, the July 29, 2008 Decision of the [DARAB] is as provided under Section 22 of R.A. No. 6657, P.D. No. 27,
hereby REVERSED and SET ASIDE. The Petition for and other agrarian laws;
Cancellation of Emancipation Patents and Torrens Titles (Case
No. 2-03-02-0242'03) is hereby ordered DISMISSED. 4. Illegal conversion by the ARB; (Cf. Section 73, Paragraphs C
and E of R.A. No. 6657)

SO ORDERED.28
5. Sale, transfer, lease or other forms of conveyance by a
beneficiary of the right to use or any other usufructuary right
Respondents' Motion for Reconsideration was denied in the DARAB's over the land acquired by virtue of being a beneficiary, in
Resolution29 dated March 11, 2009. order to circumvent the provisions of Section 73 of R.A. No.
6657, P.D. No. 27, and other agrarian laws. However, if the
Hence, this petition. land has been acquired under P.D. No. 27/E.O. No. 228,
ownership may be transferred after full payment of
G.R. No. 198160
amortization by the beneficiary; (Sec. 6 of E.O. No. 228)

Before We proceed to discuss the instant petition, it is noteworthy that the

6. Default in the obligation to pay an aggregate of three (3)
issue on the coverage of Lot 4 under the OLT program pursuant to P.D. No.
consecutive amortizations in case of voluntary land
27 had already been settled by this Court in its Decision dated August 31,
transfer/direct payment scheme, except in cases of fortuitous
2016 in the case of Victoria P. Cabral v. Gregoria Adolfo, Gregorio Lazaro, and
events and force majeure;
Heirs of Elias Policarpio.30
7. Failure of the ARBs to pay for at least three (3) annual
The said case involves the same issues, same assailed decisions of the PARAD amortizations to the LBP, except in cases of fortuitous events
and DARAB, same subject property, and same parties (except Gregoria Adolfo and force majeure; (Section 26 of R.A. No. 6657)
and Gregorio Lazaro who were parties in G.R. No. 198160 but not in this case,
50

8. Neglect or abandonment of the awarded land continuously
for a period of two (2) calendar years as determined by the
Secretary or his authorized representative; (Section 22 of R.A.
No. 6657)
9. The land is found to be exempt/excluded from P.D. No.
27/E.O. No. 228 or CARP coverage or to be part of the
landowners' retained area as determined by the Secretary or
his authorized representative; and
10. Other grounds that will circumvent laws related to the
implementation of agrarian reform program. 33 (emphasis
supplied)
In this case, petitioner maintains that the subject property is excluded from
the coverage of P.D. No. 27 as it has already been classified as residential
land, invoking the Certifications dated February 24, 1983 and August 28, 1989
issued by the zoning administrator. Petitioner also avers that as early as
October 1, 1973, the DAR already made a declaration that her landholdings
are not included under the OLT program, and thus made a recommendation
for the conversion of the same to residential, commercial, industrial, or other
purposes.34 In fine, petitioner argues that there was never any showing that
the lands subject of the controversy were primarily devoted to rice and com
as to be covered by P.D. No. 27. Also, petitioner argues that the subject EPs
were issued without compliance with the requirements for its issuance under
P.D. No. 27, such as the prior issuance of corresponding Certificates of Land
Transfer (CLTs). Further, petitioner alleges that her constitutional right to due
process was violated as the issuance of the subject EPs was done without any
notice or consultation with her and without the payment of just
compensation.35
The subject property (Lot 4) is not covered by the OLT program under
P.D. No. 27.
The resolution of the instant controversy is primarily anchored upon the
determination of whether the subject lands are covered by the OLT program
under P.D. No. 27.
As We have determined in G.R. No. 198160, Lot 4 had already been
reclassified to non-agricultural uses and was, therefore, already outside the
coverage of the OLT program under P.D. No. 27.
The CA in this case, however, ruled otherwise, relying heavily upon the July
12, 1996 Order of then DAR Secretary Garilao. In the said Order, Sec. Garilao
cited AO 6-94, which states that "reclassification of lands to non-agricultural
uses shall not operate to divest tenant-farmers of their rights over lands
covered by P.D. No. 27, which have vested prior to June 15, 1988," and EO
228, which provides that "tenant-farmers are deemed full owners of the land
they acquired by virtue of P.D. No. 27 as of October 21, 1972." 36 Notably,
respondents' arguments are also grounded on these provisions. 37
We
As this Court has often stressed, factual findings of administrative bodies
charged with their specific field of expertise, such as the PARAD and the
DARAB, are afforded great weight, nay, finality by the courts, and in the
absence of substantial showing that such findings were made from an
erroneous estimation of the evidence presented, they are conclusive, and in
the interest of stability of the governmental structure, should not be
disturbed.38 Contrary to the CA's conclusion, We find no cogent reason to
disturb the said quasi-judicial agency's findings. Consider:
51
(1) The July 12, 1996 Order of DAR Secretary Garilao involves parcels of land
different from the subject property in the case at bar.
As can be gleaned from the said Order, the certifications of reclassification
considered in the said case are as follows, to wit:chanRoblesvirtualLawlibrary
1. Certification for TCT No. T-149964 (M) with an area of of
[sic] 42,109 square meters that it is classified as RESIDENTIAL
ZONE as per Municipal Ordinance No. 43, Series of 1988
dated December 21, 1988.
2. Certification for TCT No. T-149928 (M) with an area of
20,954 square meters classified as INDUSTRIAL ZONE as per
Municipal Ordinance No. 43, Series 1988 dated December 21,
1988.
3. Certification for TCT No. T-0611 (M) with an area of 30,881
square meters classified as RESIDENTIAL ZONE per Municipal
Ordinance No. 43, Series of 1988 dated December 21, 1988.
4. Certification for TCT No. T-73.736 (M) (Lot 1-A) with an
area of 3,020 square meters classified as RESIDENTIAL ZONE
as per Comprehensive Zoning Code dated October 14, 1987.
5. Certification for TCT No. T-73.737 (M) (Lot 1-A) with an
area of 3,020 square meters classified as RESIDENTIAL ZONE
as per Comprehensive Zoning Code dated October 14, 1987.
6. Certification for OCT No. 0-1670 with an area of 12,299
square meters (Lot 2)classified as RESIDENTIAL ZONE as per
Comprehensive Zoning Code approved on November 7,
1990.39 (emphasis supplied)
Contrariwise, the subject property in the case at bar constitutes parcels of
land covering certain portions of Lot 4 of Plan Psu-164390 of OCT No. 0-
1670. Clearly, thus, the CA erred in relying heavily on the said Order in
reversing the PARAD and DARAB decisions.
(2) The records are bereft of proof that the subject lands are tenanted and
devoted primarily to rice or corn production.
It bears stressing that P.D. No. 27, which implemented the OLT program,
covers only tenanted rice or com lands. The requisites for coverage under the
OLT program are the following: (1) the land must be devoted to rice or com
crops; and (2) there must be a system of share-crop or lease tenancy
obtaining therein.40
Neither of these requisites is present in this case.
(a) The subject property is not covered by the OLT because of its residential
nature.
Again, as found by both the PARAD and the DARAB as early as October 1,
differ. 1973, the DAR, through District Officer Ortega, already declared that the
subject landholding is not included in the OLT program by virtue of the
Agrarian Refonn Team's report that the subject property is suited for
residential, commercial, industrial, or other urban purposes considering its
potential for national development.41District Officer Ortega, thus,
recommended for its conversion into residential, commercial, industrial, or
other urban purposes.42
This Court, in G.R. No. 198160, sustained such findings, as well as the
Certifications43 issued by the zoning administrator, attesting to the
classification of the property as being within the residential zone. Evidentiary
weight is accorded to the said documents as the same were issued by such
officer having jurisdiction over the area where the land in question is situated
and is, therefore, more familiar with the property in issue. 44 These
certifications carried the presumption of regularity in its issuance and
respondents have the burden of overcoming this presumption 45, which they
failed to do.
(b) As to whether a tenancy relationship exists, petitioner insists that
respondents are not her tenants. On the other hand, the respondents,
anchoring their rights upon P.D. No. 27, necessarily claim that there is a
system of share-crop between them and the petitioner.
This Court has, time and again, held that occupancy and cultivation of an
agricultural land will not ipso facto make one a de jure tenant.46 Independent
and concrete evidence is necessary to prove personal cultivation, sharing of
harvest, or consent of the landowner. 47 Tenancy relationship cannot be
presumed; the elements for its existence are explicit in law and cannot be
done away by conjectures.48 Thus, as petitioner denies such tenancy
relationship and it is respondents who assert the same, the latter has the
burden to prove their affirmative allegation of tenancy. 49 Again, the
respondents failed to discharge such burden as there is nothing on record
that will provide this Court factual basis to determine that indeed a crop-
sharing agreement exists between the parties.
(c) Farmer-beneficiaries cannot be deemed full owners when there is no
compliance with the procedure for the issuance of an EP under P.D. No. 27 and
related rules.
Thus, neither do We subscribe to Sec. Garilao's reasoning and respondents'
argument that since the reclassication of the property was made after the
effectivity of P.D. No. 27, tenant-farmers enjoy a vested right and should be
deemed as "full owners" of the property.
Indeed, under P.D. No. 27, tenant-farmers of rice and corn lands were
deemed owners of the land they till as of October 21, 1972 or the effectivity
of the said law.50 This policy was intended to emancipate the tenant-farmers
from the bondage of the soil.51 However, the provision declaring tenant-
farmers as owners as of October 21, 1972 should not be construed as
automatically vesting upon them absolute ownershipover the land they are
tilling.52
Certain requirements must also be complied with before full ownership is
vested upon the tenant-farmers.53 Thus, in G.R. No. 198160, We laid down
the steps to be undertaken before an EP can be issued to effectively transfer
the land to the tenant-farmers, to wit: first, the identification of tenants, and
the land covered by OLT; second, land survey and sketching of the actual
cultivation of the tenant to determine parcel size, boundaries, and possible
land use; third, the issuance of the CLT. To ensure accuracy and safeguard
against falsification, these certificates are processed at the National Computer
Center (NCC) at Camp Aguinaldo; fourth, valuation of the land covered for
amortization computation; fifth, amortization payments of tenant-tillers over
afifteen (15) year period; and sixth, the issuance of the EP.54
Furthermore, there are several supporting documents which a tenantfarmer
must submit before he can receive the EP such as: (a) Application for issuance
of EP; (b) Applicant's (owner's) copy of the CLT; (c) Certification of the
landowner and the Land Bank of the Philippines that the applicant has
tendered full payment of the parcel of land as described in the application
and as actually tilled by him; (d) Certification by the President of the
Samahang Nayon or by the head of a farmers' cooperative duly confirmed by
52
the municipal district officer (MDO) of the Ministry of Local Government and
Community Development (MLGCD) that the applicant is a full-fledged
member of a duly registered farmers' cooperative or a certification to these
effect; (e) Copy of the technical (graphical) description of the land parcel
applied for prepared by the Bureau of Land Sketching Team (BLST) and
approved by the regional director of the Bureau of Lands; (f) Clearance from
the MAR field team (MARFT) or the MAR District Office (MARDO) legal officer
or trial attorney; or in their absence, a clearance by the MARFT leader to the
effect that the land parcel applied for is not subject of adverse claim, duly
confirmed by the legal officer or trial attorney of the MAR Regional Office or,
in their absence, by the regional director; (g) Xerox copy of Official Receipts
or certification by the municipal treasurer showing that the applicant has fully
paid or has effected up-to-date payment of the realty taxes due on the land
parcel applied for; and (h) Certification by the MARFT leader whether
applicant has acquired farm machineries from the MAR and/or from other
government agencies.55
As We have held in the case of Association of Small Landowners in the
Philippines, Inc. v. Sec. of Agrarian Reform:56
It is true that P.D. No. 27 expressly ordered the emancipation
of tenant-farmer as of 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:chanRoblesvirtualLawlibrary
All qualified farmer-beneficiaries are now
deemed full owners as of October 21, 1972 of
the land they acquired by virtue of P.D. No.
27.
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. Hence, it was also perfectly proper for the
Order to also provide in its Section 2 that the lease rentals
paid to the landowner by the farmer-beneficiary after
October 21, 1972 (pending transfer of ownership after full
payment of just compensation), shall be considered as
advance payment for the land.
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
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.
Clearly, thus, prior to the compliance with the prescribed requirements,
tenant-farmers have, at most, an inchoate right over the land they were
tilling.57
In this case, the records are bereft of evidence to show that the procedure
above-enumerated was complied with by the respondents to prove that the
said provisional title was perfected, from the time that the entitlement to such
right started pursuant to P.D. No. 27 or specifically on October 21, 1972 and
before the claimed land was reclassified.
Foremost, there was no CLT issued prior to the issuance of the subject EPs.
In recognition of the said inchoate right, a CLT is issued to a tenantfarmer to
serve as a provisional title of ownership over the landholding while the lot
owner is awaiting full payment of just compensation or for as long as the
tenant-farmer is an amortizing owner. 58 The CLT proves inchoate ownership
of an agricultural land primarily devoted to rice or com production. 59
In Del Castillo v. Orciga,60 We explained that land transfer under P.D. No. 27
is effected in two stages: first, the issuance of a CLT; and second, the issuance
of an EP. The first stage serves as the government's recognition of the tenant-
farmer's inchoate right as "deemed owners" of the land they till. The second
stage perfects the title of the tenant-farmers and vests in them absolute
ownership upon full compliance with the prescribed requirements. 61 As a
preliminary step then, the CLT immediately serves as the tangible evidence of
the government's recognition of the the tenant-farmers' inchoate right and of
the subjection of the land to the OLT program. 62
To bolster the finding that the subject landholding was not covered by the
OLT program, We echo the PARAD and DARAB pronouncement that the fact
that no CLTs were previously issued to the respondents signifies the non-
inclusion of the subject lands under the coverage of the OLT. 63 Indeed, there
is nothing in the records that will show that CLTs were issued in favor of the
respondents before the issuance of the subject EPs considering that, to
reiterate, the issuance of a CLT is a proof that the property was previously
covered by the OLT program and proof of the government's recognition of
the farmer-beneficiary's inchoate right over the same.
In G.R. No. 198160, this Court found that Elias Policarpio's TCTs, along with
therein respondent Gregoria Adolfo's TCTs, were not derived from a CLT. In
this case, the CA cited a Certification 64 from the DAR dated April 27, 2009 to
conclude that CLTs were issued to the respondents. A perusal of the said
Certification, however, shows that only one of the lands being claimed by
Florencio Adolfo was issued a CLT (CLT No. 0-056491). The other person
stated therein who was purportedly issued a CLT was Gregorio Lazaro, who is
not a party in this case. Hence, We are perplexed on why the CA sweepingly
concluded that CLTs were issued to the respondents and applied the same to
this case.
At any rate, assuming that such Certification is valid, it could readily be seen
that CLT No. 0-056491 was only issued on September 11, 1981 or nine years
after the lot had supposedly been brought under the OLT program. The fact
that as of October 1973 a determination had already been made by the DAR
Regional Director that the subject property was not covered by the OLT
program is also telling. Thus, We agree with the findings of the PARAD and
DARAB that no CLTs were issued in this case, in violation of the procedure for
the issuance of an EP above-enumerated.
Likewise, there is no showing that petitioner was notified of the placement of
her landholdings under the OLT program and, more importantly, there was
no proof that petitioner was paid just compensation therefor.
Land acquisition by virtue of P.D. No. 27 and Republic Act (R.A.) No.
665765 partakes of the nature of expropriation. In fact, jurisprudence states
that it is an extraordinary method of expropriating private property. 66 As
such, the law on the matter must be strictly construed. Faithful compliance
with legal provisions, especially those which relate to procedure for
acquisition of expropriated lands should therefore be observed. In
expropriation proceedings, as in judicial proceedings, notice is part of the
53
constitutional right to due process of law. It informs the landowner of the
State's intention to acquire private land upon payment of just compensation
and gives him the opportunity to present evidence that his landholding is not
covered or is otherwise excused from the agrarian law. 67
In this case, the respondents and the DAR failed to adduce evidence to prove
actual notice to the petitioner and payment of just compensation for the
taking of the latter's property.
Indeed as We have settled in G.R. No. 198160, 68 there is nothing on record
that will show that the landholding was brought under the OLT program,
CLTs were issued prior to the issuance of the subject EPs, respondents are
full-fledged members of a duly recognized farmer's cooperative, they finished
payment of amortizations, and that petitioner, as the landowner, was notified
and paid just compensation for the taking of her lands before the issuance of
the subject EPs.
In this issue of compliance with the procedure, it must be remembered that
the burden of proof lies with the party who asserts a right and the quantum
of evidence required by law in civil cases is preponderance of
evidence.69 Preponderance of evidence is the weight, credit, and value of the
aggregate evidence on either side and is usually considered to be
synonymous with the term "greater weight of evidence" or "greater weight of
credible evidence".70 Moreover, parties must rely on the strength of their
own evidence, not upon the weakness of that of their
opponent's.71 Significantly, as We have observed by in G.R. No. 198160, this
Court is in the dark as to what actually transpired prior to the issuance of the
subject EPs, which only raises more questions than answers.
To Our mind, it would have been easy for the respondents to prove their
claims had they presented the documents above-enumerated. Thus, this
Court is baffled by the fact that the respondents did not adduce such
evidence before the PARAD and/or the DARAB, instead, they resorted to
defenses such as an attack to the complaint for suffering from procedural
defect and prescription of the action. Also, respondents merely relied on the
provision in P.D. No. 27 declaring that farmer-beneficiaries are deemed
owners of the land that they are tilling as of October 21, 1972, which, as
amply discussed above, is not sufficient to vest absolute ownership to farmer-
beneficiaries. Notably, respondent presented documents such as certifications
to prove payment of the value of land allotted to Florencio Adolfo, TCTs
reflecting CLT numbers, among others, for the first time on appeal before the
CA and also before this Court as attached to their Comment to the Petition.
However, these documents are merely photocopies and were not presented
before the PARAD and DARAB, hence, cannot be given evidentiary value by
this Court.
The issue on the validity of EPs is not barred by prescription.
Respondents argue that the EPs and subsequent TCTs issued to them,
registered with the Register of Deeds, have already become indefeasible
upon the expiration of one year from the date of the issuance thereof and
can no longer be cancelled. Respondents point out that their EPs were issued
in 1988 and the instant case was filed only in 2003 or 15 years after such
issuance.
This Court has already ruled that the mere issuance of EPs and TCTs does not
put the ownership of the agrarian reform beneficiary beyond attack and
scrutiny.72 EPs issued to agrarian refonn beneficiaries may be corrected and
cancelled for violations of agrarian laws, rules, and regulations. 73
Besides, registration is nothing more than a mere species of notice of an
acquired vested right of ownership of a landholding. Registration of a piece
of land under the Torrens System does not create or vest title, because it is
not a mode of acquiring ownership.74 A certificate of title is merely an
evidence of ownership or title over the particular property described therein.
It cannot protect a usurper from the true owner. Thus, the jurisdiction of the
PARAD/DARAB cannot be deemed to disappear the moment a certificate of
title is issued as such certificates are not modes of transfer of property but
merely evidence of such transfer, and there can be no valid transfer of title
should the EPs, on which such TCTs are grounded, be void. 75

At any rate, contrary to the respondents' contention, records reveal that as

early as January 1990, or less than three and two months after Florencio
Adolfo and Elias Policarpio registered their titles with the Register of Deeds,
respectively, petitioner had already pursued actions to protect her right over
the subject landholding.76

WHEREFORE, premises considered, the instant petitiOn is GRANTED.

Accordingly, the assailed Court of Appeals Decision dated November 23,
2009 and Resolution dated March 15, 2010 in CA-G.R. SP No. 108518 are
hereby REVERSED and SET ASIDE. The Decision dated July 29, 2008 and
Resolution dated March 11, 2009 of the Department of Agrarian Reform
Adjudication Board in DARAB Case No. 13552, ordering the cancellation of
Transfer Certificate of Title Nos. EP-003 and EP-004 in the name of Florencio
Adolfo, and EP-010 and EP-009 in the name of Elias Policarpio,
are REINSTATED.

SO ORDERED.

54
March 22, 2017
G.R. No. 175726
LAND BANK OF THE PHILIPPINES, Petitioner
vs
HEIRS of ANTONIO MARCOS, SR., namely: ANITA M. RUBIO, LOLITA M. PELINO,
ANTONIO MARCOS, JR. and RAMIRO D. MARCOS, Respondents
DECISION
PERALTA, J.:
For this Court's resolution is a petition for review on certiorari, dated January 24,
2007, of petitioner Land Bank of the Philippines (LBP), seeking to reverse and set
aside the Decision1 dated May 26, 2006 and Resolution2 dated December 6, 2006
of the Court of Appeals (CA), affirming the Decision3 and Order,4 dated January 23,
2004 and March 30, 2004, respectively, of the Regional Trial Court (RTC), Sorsogon
City, Branch 52.
The antecedents are as follows:
The deceased Antonio Marcos, Sr. (Antonio) was the owner of two parcels of
agricultural land or landholdings located at Malbog, Pilar, Sorsogon,
consisting of 14.9274 hectares covered by Transfer Certificate of Title (TCT) No.
2552 and 9.4653 hectares covered by TCT No. 2562.5
On April 3, 1995, pursuant to Republic Act No. 6657,6 Ramiro
Marcos (Ramiro), authorized representative of the heirs of Antonio, namely:
Anita Rubio, Lolita M. Pelino, Antonio Marcos, Jr. and Ramiro, offered to sell the
landholdings to the Republic of the Philippines through its implementing
arm, the Department of Agrarian Reform (DAR).7
On July 10, 1996, petitioner LBP valued the lands covered by TCT Nos. 2552
and 2562 at ₱195,603.70 and ₱79,096.26, respectively.8
On August 11, 1997, Ramiro filed with the DAR two (2) Landowner's Reply to
Notice of Land Valuation and Acquisition forms pertaining to the landholdings. In the
said forms, Ramiro indicated that the respondents were accepting LBP's
valuation of the landholdings. On the same date, the DAR Regional Director
sent a memorandum to the LBP requesting the preparation of a deed of
transfer over the landholdings and payment of the purchase price to
respondents based on petitioner's valuation.9
While the payment of the purchase price is pending, the DAR brought the
matter of valuation to the Department of Agrarian Reform Adjudication Board
(DARAB), Office of the Provincial Adjudicator, Sorsogon, Sorsogon, on June
15, 2000 requesting that summary administrative proceedings be conducted
to determine the just compensation for the landholdings.10
After proper proceedings, the Provincial Adjudicator rendered Decisions LV
Cases Nos. 084'0011 and 085'00,12 both dated November 29, 2000, the dispositive
portions of which read:
LV Case No. 084'00.-
Wherefore, in view of the foregoing, the prior valuation of the
LBP is hereby set aside and a new valuation is fixed at FOUR
HUNDRED FORTY-SIX THOUSAND SEVEN HUNDRED EIGHTY-
SIX PESOS and .03 Centavos (₱446,786.03) for the acquired
area of 14.9274 hectares at Twenty-Nine Thousand, Nine
Hundred Thirty Pesos and .60 Centavos (₱29,930.60) per
hectare is adopted. The Land Bank of the Philippines is hereby
ordered to pay the same to the landowners in the manner
provided for by law.
SO ORDERED.
LV Case No. 085'00.-
55
Wherefore, in view of the foregoing, the prior valuation of the
LBP is hereby set aside and a new valuation is fixed at TWO
HUNDRED EIGHTY-THREE THOUSAND THREE HUNDRED
TWO PESOS and .10 Centavos (₱283,302.10) for the acquired
area of 9.4653 hectares at Twenty-Nine Thousand, Nine
Hundred Thirty Pesos and .60 Centavos (₱29,930.60) per
hectare is adopted. The Land Bank of the Philippines is hereby
ordered to pay the same to the landowners in the manner
provided for by law.
SO ORDERED.
Disagreeing with the decision of the Provincial Adjudicator, the LBP filed a
petition for judicial determination of just compensation for the landholdings
with the RTC sitting as a Special Agrarian Court (SAC).13
After the joinder of issues, trial on the merits ensued.
LBP presented witnesses Mr. Jessie L. Basco and Mrs. Evelyn Vega and documentary
exhibits such as the Field Investigation Reports for the landholdings of the
respondents, the Field Investigation Report for Hacienda de Ares, Landowner's Reply
to Notice of Land Valuation and Acquisition over the Property, Memo to the vice-
president of the petitioner from the DAR Regional Director with a request to prepare
Deed of Transfer and pay the landowner dated August 11, 1997 over the property
covered, Payment Release Form, Disbursements Orders and Appearance with
Motion for Reconsideration in DARAB cases.14
On January 23, 2004, the RTC rendered a Decision in favor of the respondents,
the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered:
1. Fixing the amount of FOUR HUNDRED FORTY-SIX
THOUSAND SEVEN HUNDRED EIGHTY-SIX PESOS and .03
Centavos (₱446,786.03) for the acquired area of 14.9274
hectares at ₱30,507.68 per hectare and the amount of TWO
HUNDRED EIGHTYTHREE THOUSAND THREE HUNDRED TWO
PESOS and .10 Centavos (₱283,302.10) for the acquired area
of 9.4653 hectares at ₱29,930.60 per hectare for the just
compensation of that two (2) parcels of land situated at
Malbog, Pilar, Sorsogon covered by TCT No. T-2552 and TCT No. T-
2562 owned by the Heirs of Antonio Marcos, Sr. which property
was taken by the government pursuant to R.A. No. 6657.
2. Ordering the Petitioner Land Bank of the Philippines to pay the
Private Respondents the amount of Four Hundred Forty-Six
Thousand, Seven Hundred Eighty-Six & .03 centavos (₱446,786.03)
Pesos and, Two Hundred Eighty-Three Thousand Three Hundred
Two and .10 centavos (₱283,302.10), or the total amount of Seven
Hundred Thirty Thousand Eighty-Eight and .13 centavos
(₱730,088.13) Pesos, in the manner provided by R.A. No. 6657 by
way of full payment of the just compensation after deducting
whatever amount previously received by the private respondents
from the Petitioner Land Bank as part of just compensation.
3. Without pronouncement as to costs.
SO ORDERED.15
LBP filed a motion for reconsideration of the decision, but was denied per
Order16 dated March 30, 2004.
LBP appealed to the CA. It argued that the RTC failed to consider the documentary
evidence showing that a contract of sale over the landholdings was perfected 17 and
that the RTC erred in adopting the valuation of the Hacienda de Ares properties for
the purpose of fixing the value of the landholdings.18
The CA ruled in favor of the respondents. The dispositive portion of the decision
reads:
WHEREFORE, for lack of merit, the instant petition is DISMISSED, with the result that
the appealed decision of the Regional Trial Court of Sorsogon City (Branch 52)
is AFFIRMED in toto. No pronouncement as to costs.
SO ORDERED.19
The CA denied the motion for reconsideration of the petitioner in a Resolution
dated December 6, 2006.
Undaunted, petitioner elevated the matters before this Court and raised the
following questions of law:
1. CAN THE COURT OF APPEALS OR THE SAC DISREGARD THE VALUATION FACTORS
UNDER SECTION 17 OF R.A. 6657 WHICH ARE TRANSLATED INTO A BASIC FORMULA
IN DAR ADMINISTRATIVE ORDER AND AFFIRMED BY THE SUPREME COURT IN THE
CASES OF SPS. BANAL AND CELADA, IN FIXING THE JUST COMPENSATION FOR
SUBJECT PROPERTIES?
2. CAN THE PROVINCIAL AGRARIAN REFORM ADJUDICATOR
(PARAD) ABROGATE, VARY OR ALTER A CONSUMMATED CONTRACT
BETWEEN THE GOVERNMENT AND RESPONDENTS IN REGARD TO
SUBJECT PROPERTIES?20
This Court finds this petition partly meritorious.
The LBP averred that the subject property was acquired by the government
pursuant to Republic Act No. (R.A. No.) 6657, thus, in determining the just
compensation, Section 1 7 of the said law is applicable.21
In Land Bank of the Philippines v. Honeycomb Farms Corporation,22 this Court
essentially pointed out that the "just compensation" guaranteed to a landowner
under Section 4, Article XIII of the Constitution is precisely the same as the "just
compensation" embodied in Section 9, Article III of the Constitution. The just
compensation due to an owner should be the "fair and full price of the taken
property," whether for land taken pursuant to the State's agrarian reform
program or for property taken for purposes other than agrarian reform.23
It was further stressed in Honeycomb that just compensation paid for lands taken
pursuant to the State's agrarian reform program refers to the "full and fair
equivalent of the property taken from its owner by the expropriator x x x [the
measure of which] is not the taker's gain but the owner's loss. The word 'just' is used
to intensify the meaning of the word 'compensation' to convey the idea that the
equivalent to be rendered for the property to be taken shall be real, substantial, full
and ample."24
The determination of just compensation is fundamentally a function of the
courts. Section 57 of R.A. No. 6657 explicitly vests in the RTC-SAC the original
and exclusive jurisdiction to determine just compensation for lands taken
pursuant to the State's agrarian reform program.25 However, this Court,
in Land Bank of the Philippines v. Yatco Agricultural Enterprise,26 underscored
that, in the exercise of the essentially judicial function of determining just
compensation, the RTC-SAC is not granted unlimited discretion. The factors
under Section 1727 of R.A. No. 6657 were already translated into a basic
formula by the DAR pursuant to its rule-making power under Section 49 of
R.A. No. 6657.28 The said factors and the DAR formula provide the uniform
framework or structure by which just compensation for property subject to
agrarian reform should be determined.29 Hence, aside from considering the
factors provided by law, the courts should apply the formula outlined in DAR
AO No. 5, series of 1998, in the computation of just compensation. Thus:
A. There shall be one basic formula for the valuation of lands covered by VOS
or CA: LV = (CNI x 0.6) +(CS x 0.3) + (MV x 0.1)
Where: L V = Land Value
CNI = Capitalized Net Income
56
CS = Comparable Sales
MV =Market Value per Tax Declaration
The above formula shall be used if all three factors are
present, relevant and applicable.
A 1. When the CS factor is not present and CNI and MV are
applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
A2. When the CNI factor is not present, and CS and MV are
applicable, the formula shall be:
LV =(CS x 0.9) + (MV x 0.1)
A3. When both the CS and CNI are not present and only MV
is applicable, the formula shall be:
LV=MVx2
In the recent case of Alfonso v. Land Bank of the Philippines,30 this Court
reiterated:
For the guidance of the bench, the bar, and the public, we reiterate the rule: Out of
regard for the DAR's expertise as the concerned implementing agency, courts should
henceforth consider the factors stated in Section 17 of RA 6657, as amended, as
translated into the applicable DAR formulas in their determination of just
compensation for the properties covered by the said law. If, in the exercise of their
judicial discretion, courts find that a strict application of said formulas is not
warranted under the specific circumstances of the case before them, they may
deviate or depart therefrom, provided that this departure or deviation is
supported by a reasoned explanation grounded on the evidence on record. In
other words, courts of law possess the power to make a final determination of just
compensation.
The fixing of just compensation that is based on the landowner's prayer falls within
the exercise of the RTC-SAC's discretion and, therefore, should be upheld as a valid
exercise of its jurisdiction.31 Similarly, the fixing of just compensation based on the
decision of the Provincial Adjudicator in this case is within the context of this judicial
prerogative. However, a reading of the decisions of the PARAD would reveal
that he did not apply or consider the formula in DAR AO No. 5, series of 1998.
He based his decision with the rule on admissibility of evidence of bona
fide sales transaction of nearby places in determining the market value of like
properties and applied the valuation of LBP with the property of Norma
Marcos Clemente and Hacienda de Ares after ruling that the properties of
respondents are comparable with the said properties.32 His decisions did not
mention the consideration of the formula laid down by the DAR in the
valuation of the properties of respondents.
Likewise, the RTC-SAC ruled that the sales transaction concluded by LBP and
Norma Marcos Clemente and Hacienda de Ares can be used and be
admissible in evidence in determining the market value of the properties of
the respondents since the productivity of the coconut in the land of the
respondents is comparable to that of the properties of Norma Marcos
Clemente and Hacienda de Ares.33 It did not conduct an independent
assessment and computation using the considerations required by the law
and the rules and merely relied upon the Provincial Adjudicator's decision.
Although it took into consideration and mentioned some of the factors, it did
not point to any particular consideration that impelled it to set the just
compensation at ₱283,302.10and ₱446,786.03.
To reiterate, when acting within the parameters set by the law itself, the RTC-SACs
are not strictly bound to apply the DAR formula to its minute detail, particularly
when faced with situations that do not warrant the formula's strict application; they
may, in the exercise of their discretion, relax the formula's application to fit the
factual situations before them. They must, however, clearly explain the reason for
any deviation from the factors and formula that the law and the rules have
provided.34
In the case at bar, the RTC-SAC did not clearly explain why the formula was not
applied although the factors enumerated were considered in determining just
compensation. There was no reasoned explanation grounded on evidence on record
why the court did not comply with the established rules. Thus, this Court finds that
the case does not warrant for deviation from the factors and formula set forth by
the law and rules applicable.
under Section 17 of R.A. No. 6657 and of the formula prescribed under the
pertinent DAR administrative orders.
WHEREFORE, premises considered, the petition is hereby GRANTED. The assailed
Decision and Resolution, dated May 26, 2006 and December 6, 2006, respectively, of
the Court of Appeals in CA-G.R. SP No. 83711, are REVERSED. The Civil Case
is REMANDED to the RTC, Sorsogon City, Branch 52, for trial on the merits with
dispatch. The trial judge is DIRECTED to OBSERVE strictly the procedures in
determining the proper valuation of the subject property.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice

The LBP averred that the P ARAD cannot abrogate, vary or alter a consummated
contract between the government and the respondents in regard to subject
properties.1âwphi1 It further alleged that the P ARAD committed grave abuse of
discretion when he conducted summary administrative proceedings despite the
acceptance by the landowner of the preliminary valuation computed by the LBP and
ofered by the DAR.35

The implementation of R.A. No. 6657 is an exercise of the State's police power
and power of eminent domain.36 It was also settled that the taking of private
property by the Government in the exercise of its power of eminent domain
does not give rise to a contractual obligation.37 Thus, acquisition of lands
under the CARP is not governed by ordinary rules on obligations and
contracts but by R.A. No. 6657 and its implementing rules.

Unlike in the ordinary sale of real property where the buyer and the seller are
free to determine, by offer and acceptance, the consideration for the subject
matter of the transaction, acquisition of lands under the CARP is governed by
administrative rules intended to ensure that the rights of the 1andowners to
just compensation are respected.38

The LBP's valuation of lands covered by the CARP Law is considered only as an initial
determination, which is not conclusive, as it is the RTC-SAC that could make the final
determination of just compensation, taking into consideration the factors provided
in R.A. No. 6657 and the applicable DAR regulations. The LBP's valuation has to be
substantiated during an appropriate hearing before it could be considered sufficient
in accordance with Section 17 of R.A. No. 6657 and the DAR regulations.39

Since it is the RTC-SAC that could make the final determination of just
compensation, the supposed acceptance of the LBP's valuation cannot be
considered as consummated contract.

R.A. No. 6657 provided that the landowner, his administrator or

representative shall inform the DAR of his acceptance or rejection of the offer
within thirty (30) days from the date of receipt of written notice by personal
delivery or registered mail.40 It also further provided that the DAR shall
conduct summary administrative proceedings to determine the compensation
for the land in case of rejection or failure to reply.41

It is noted that on August 11, 1997, or more than a year since the valuation of
the LBP, the respondents, through Ramiro, filed their acceptance of valuation
of their landholdings. The lapse of more than a year before informing the
DAR of their acceptance can be considered as failure to reply as
contemplated by the law. Furthermore, it is noted that it is the DAR that
brought the matter of valuation to the DARAB and requested that summary
administrative proceedings be conducted to determine the just compensation
for the landholdings.

This Court deems it premature to determine with finality the matter in controversy,
considering the lack of sufficient data to guide this Court in the proper
determination of just compensation following the guidelines that was discussed at
length. This Court is not a trier of facts and cannot receive any new evidence from
the parties to aid the prompt resolution of this case.

Therefore, we are compelled to remand the case to the court of origin for the
reception of evidence and the determination of just compensation with the
cautionary reminder for the proper observance of the factors enumerated

57
[G.R. No. 171101 : April 24, 2012]
HACIENDA LUISITA, INCORPORATED, PETITIONER, LUISITA INDUSTRIAL
PARK CORPORATION AND RIZAL COMMERCIAL BANKING
CORPORATION, PETITIONERS-IN-INTERVENTION, VS. PRESIDENTIAL
AGRARIAN REFORM COUNCIL; SECRETARY NASSER PANGANDAMAN OF
THE DEPARTMENT OF AGRARIAN REFORM; ALYANSA NG MGA
MANGGAGAWANG BUKID NG HACIENDA LUISITA, RENE GALANG,
NOEL MALLARI, AND JULIO SUNIGA[1] AND HIS SUPERVISORY GROUP
OF THE HACIENDA LUISITA, INC. AND WINDSOR ANDAYA,
RESPONDENTS.
RESOLUTION
VELASCO JR., J.:
Before the Court are the Motion to Clarify and Reconsider Resolution of
November 22, 2011 dated December 16, 2011 filed by petitioner Hacienda
Luisita, Inc. (HLI) and the Motion for Reconsideration/Clarification dated
December 9, 2011 filed by private respondents Noel Mallari, Julio Suniga,
Supervisory Group of Hacienda Luisita, Inc. and Windsor Andaya (collectively
referred to as “Mallari, et al.”).
In Our July 5, 2011 Decision[2] in the above-captioned case, this Court denied
the petition for review filed by HLI and affirmed the assailed Presidential
Agrarian Reform Council (PARC) Resolution No. 2005-32-01 dated December
22, 2005 and PARC Resolution No. 2006-34-01 dated May 3, 2006 with the
modification that the original 6,296 qualified farmworker-beneficiaries of
Hacienda Luisita (FWBs) shall have the option to remain as stockholders of
HLI.
Upon separate motions of the parties for reconsideration, the Court, by
Resolution[3] of November 22, 2011, recalled and set aside the option thus
granted to the original FWBs to remain as stockholders of HLI, while
maintaining that all the benefits and homelots received by all the FWBs shall
be respected with no obligation to refund or return them.
HLI invokes the following grounds in support of its instant Motion to Clarify
and Reconsider Resolution of November 22, 2011 dated December 16, 2011:
A FOUND BY THE HONORABLE COURT.
WITH DUE RESPECT, THE HONORABLE COURT ERRED IN
RULING THAT IN DETERMINING THE JUST COMPENSATION,
THE DATE OF “TAKING” IS NOVEMBER 21, 1989, WHEN PARC
APPROVED HLI’s SDP [STOCK DISPTRIBUTION PLAN] “IN
VIEW OF THE FACT THAT THIS IS THE TIME THAT THE FWBs
WERE CONSIDERED TO OWN AND POSSESS THE
AGRICULTURAL LANDS IN HACIENDA LUISITA” BECAUSE:
(1) THE SDP IS PRECISELY A MODALITY WHICH THE
AGRARIAN LAW GIVES THE LANDOWNER AS ALTERNATIVE
TO COMPULSORY COVERAGE IN WHICH CASE, THEREFORE,
THE FWBs CANNOT BE CONSIDERED AS OWNERS AND
POSSESSORS OF THE AGRICULTURAL LANDS AT THE TIME
THE SDP WAS APPROVED BY PARC;
(2) THE APPROVAL OF THE SDP CANNOT BE AKIN TO A
NOTICE OF COVERAGE IN COMPULSORY COVERAGE OR
ACQUISITION BECAUSE SDP AND COMPULSORY COVERAGE
ARE TWO DIFFERENT MODALITIES WITH INDEPENDENT AND
SEPARATE RULES AND MECHANISMS;
(3) THE NOTICE OF COVERAGE OF JANUARY 02, 2006 MAY,
AT THE VERY LEAST, BE CONSIDERED AS THE TIME WHEN
THE FWBs CAN BE CONSIDERED TO OWN AND POSSESS THE
58
AGRICULTURAL LANDS OF HACIENDA LUISITA BECAUSE
THAT IS THE ONLY TIME WHEN HACIENDA LUISITA WAS
PLACED UNDER COMPULSORY ACQUISITION IN VIEW OF
FAILURE OF HLI TO PERFORM CERTAIN OBLIGATIONS OF
THE SDP, OR SDOA [STOCK DISTRIBUTION OPTION
AGREEMENT];
(4) INDEED, THE IMMUTABLE RULE AND THE UNBENDING
JURISPRUDENCE IS THAT “TAKING” TAKES PLACE WHEN THE
OWNER IS ACTUALLY DEPRIVED OR DISPOSSESSED OF HIS
PROPERTY;
(5) TO INSIST THAT THE “TAKING” IS WHEN THE SDP WAS
APPROVED BY PARC ON NOVEMBER 21, 1989 AND THAT
THE SAME BE CONSIDERED AS THE RECKONING PERIOD TO
DETERMINE THE JUST COMPENSATION IS DEPRIVATION OF
LANDOWNER’S PROPERTY WITHOUT DUE PROCESS OF LAW;
(6) HLI SHOULD BE ENTITLED TO PAYMENT OF INTEREST ON
THE JUST COMPENSATION.
B
WITH DUE RESPECT, THE HONORABLE COURT ERRED WHEN
IT REVERSED ITS DECISION GIVING THE FWBs THE OPTION
TO REMAIN AS HLI STOCKHOLDERS OR NOT, BECAUSE:
(1) IT IS AN EXERCISE OF A RIGHT OF THE FWB WHICH THE
HONORABLE COURT HAS DECLARED IN ITS DECISION AND
EVEN IN ITS RESOLUTION AND THAT HAS TO BE RESPECTED
AND IMPLEMENTED;
(2) NEITHER THE CONSTITUTION NOR THE CARL
[COMPREHENSIVE AGRARIAN REFORM LAW] REQUIRES
THAT THE FWBs SHOULD HAVE CONTROL OVER THE
AGRICULTURAL LANDS;
(3) THE OPTION HAS NOT BEEN SHOWN TO BE
DETRIMENTAL BUT INSTEAD BENEFICIAL TO THE FWBs AS
C
WITH DUE RESPECT, THE HONORABLE COURT ERRED IN
RULING THAT THE PROCEEDS FROM THE SALES OF THE 500-
HECTARE CONVERTED LOT AND THE 80.51-HECTARE SCTEX
CANNOT BE RETAINED BY HLI BUT RETURNED TO THE FWBs
AS BY SUCH MANNER; HLI IS USING THE CORPORATION
CODE TO AVOID ITS LIABILITY TO THE FWBs FOR THE PRICE
IT RECEIVED FROM THE SALES, BECAUSE:
(1) THE PROCEEDS OF THE SALES BELONG TO THE
CORPORATION AND NOT TO EITHER HLI/TADECO OR THE
FWBs, BOTH OF WHICH ARE STOCKHOLDERS ENTITLED TO
THE EARNINGS OF THE CORPORATION AND TO THE NET
ASSETS UPON LIQUIDATION;
(2) TO ALLOW THE RETURN OF THE PROCEEDS OF THE
SALES TO FWBs IS TO IMPOSE ALL LIABILITIES OF THE
CORPORATION ON HLI/TADECO WHICH IS UNFAIR AND
VIOLATIVE OF THE CORPORATION CODE.
Mallari, et al. similarly put forth the following issues in its Motion for
Reconsideration/Clarification dated December 9, 2011:
I

REPUBLIC ACT NO. 6657 [RA 6657] OR THE COMPREHENSIVE
AGRARIAN REFORM LAW [CARL] DOES NOT PROVIDE THAT
THE FWBs WHO OPT FOR STOCK DISTRIBUTION OPTION
SHOULD RETAIN MAJORITY SHAREHOLDING OF THE
COMPANY TO WHICH THE AGRICULTURAL LAND WAS
GIVEN.
II
IF THE NOVEMBER 22, 2011 DECISION OF THIS HONORABLE
COURT ORDERING LAND DISTRIBUTION WOULD BE
FOLLOWED, THIS WOULD CAUSE MORE HARM THAN GOOD
TO THE LIVES OF THOSE PEOPLE LIVING IN THE HACIENDA,
AND MORE PARTICULARLY TO THE WELFARE OF THE FWBs.
III
ON THE CONCLUSION BY THIS HONORABLE COURT THAT
THE OPERATIVE FACT DOCTRINE IS APPLICABLE TO THE
CASE AT BAR, THEN FWBs WHO MERELY RELIED ON THE
PARC APPROVAL SHOULD NOT BE PREJUDICED BY ITS
SUBSEQUENT NULLIFICATION.
IV
THOSE WHO CHOOSE LAND SHOULD RETURN WHATEVER
THEY GOT FROM THE SDOA [STOCK DISTRIBUTION OPTION
AGREEMENT] AND TURN OVER THE SAME TO HLI FOR USE
IN THE OPERATIONS OF THE COMPANY, WHICH IN TURN
WILL REDOUND TO THE BENEFIT OF THOSE WHO WILL OPT
TO STAY WITH THE SDO.
V value declared in 1989 by Tadeco to ensure that the FWBs will not
FOR THOSE WHO CHOOSE LAND, THE TIME OF TAKING FOR
PURPOSES OF JUST COMPENSATION SHOULD BE AT THE
TIME HLI WAS DISPOSSESSED OF CONTROL OVER THE
PROPERTY, AND THAT PAYMENT BY [THE GOVERNMENT] OF
THE LAND SHOULD BE TURNED OVER TO HLI FOR THE
BENEFIT AND USE OF THE COMPANY’S OPERATIONS THAT
WILL, IN TURN, REDOUND TO THE BENEFIT OF FWBs WHO
WILL OPT TO STAY WITH THE COMPANY.
Basically, the issues raised by HLI and Mallari, et al. boil down to the
following: (1) determination of the date of “taking”; (2) propriety of
the revocation of the option on the part of the original FWBs to
remain as stockholders of HLI; (3) propriety of distributing to the
qualified FWBs the proceeds from the sale of the converted land and
of the 80.51-hectare Subic-Clark-Tarlac Expressway (SCTEX ) land; and
(4) just compensation for the homelots given to the FWBs.
Payment of just compensation
HLI contends that since the SDP is a modality which the agrarian
reform law gives the landowner as alternative to compulsory
coverage, then the FWBs cannot be considered as owners and
possessors of the agricultural lands of Hacienda Luisita at the time
the SDP was approved by PARC.[4] It further claims that the approval
of the SDP is not akin to a Notice of Coverage in compulsory
coverage situations because stock distribution option and
compulsory acquisition are two (2) different modalities with
independent and separate rules and mechanisms. Concomitantly, HLI
59
maintains that the Notice of Coverage issued on January 2, 2006 may,
at the very least, be considered as the date of “taking” as this was the
only time that the agricultural lands of Hacienda Luisita were placed
under compulsory acquisition in view of its failure to perform certain
obligations under the SDP.[5]
Mallari, et al. are of a similar view. They contend that Tarlac
Development Corporation (Tadeco), having as it were majority control
over HLI, was never deprived of the use and benefit of the agricultural
lands of Hacienda Luisita. Upon this premise, Mallari, et al. claim the
“date of taking” could not be at the time of the approval of the SDP.
[6]
A view has also been advanced that the date of the “taking” should
be left to the determination of the Department of Agrarian Reform
(DAR) in conjunction with its authority to preliminarily determine the
just compensation for the land made subject of CARP.
Alyansa ng mga Manggagawang Bukid sa Hacienda Luisita
(AMBALA), in its Comment/Opposition (to the Motion to Clarify and
Reconsider Resolution of November 22, 2011) dated January 30, 2012,
on the other hand, alleges that HLI should not be paid just
compensation altogether.[7] It argues that when the Court of Appeals
(CA) dismissed the case[8] the government of then President
Ferdinand E. Marcos initially instituted and won against Tadeco, the
CA allegedly imposed as a condition for its dismissal of the action
that should the stock distribution program fail, the lands should be
distributed to the FWBs, with Tadeco receiving by way of
compensation only the amount of PhP 3,988,000.[9]
AMBALA further contends that if HLI or Tadeco is, at all, entitled to
just compensation, the “taking” should be reckoned as of November
21, 1989, the date when the SDP was approved, and the amount of
compensation should be PhP 40,000 per hectare as this was the same
control the majority stockholdings in HLI.[10]
At the outset, it should be noted that Section 2, Rule 52 of the Rules
of Court states, “No second motion for reconsideration of a judgment
or final resolution by the same party shall be entertained.” A second
motion for reconsideration, as a rule, is prohibited for being a mere
reiteration of the issues assigned and the arguments raised by the
parties.[11]
In the instant case, the issue on just compensation and the grounds
HLI and Mallari, et al. rely upon in support of their respective stance
on the matter had been previously raised by them in their first
motion for reconsideration and fully passed upon by the Court in its
November 22, 2011 Resolution. The similarities in the issues then and
now presented and the grounds invoked are at once easily
discernible from a perusal of the November 22, 2011 Resolution, the
pertinent portions of which read:
In Our July 5, 2011 Decision, We stated that “HLI shall be paid
just compensation for the remaining agricultural land that will
be transferred to DAR for land distribution to the FWBs.” We
also ruled that the date of the “taking” is November 21, 1989,
when PARC approved HLI’s SDP per PARC Resolution No. 89-
12-2.
In its Motion for Clarification and Partial Reconsideration, HLI
disagrees with the foregoing ruling and contends that the
“taking” should be reckoned from finality of the Decision of
this Court, or at the very least, the reckoning period may be
 tacked to January 2, 2006, the date when the Notice of
Coverage was issued by the DAR pursuant to PARC
Resolution No. 2006-34-01 recalling/revoking the approval of
the SDP.
For their part, Mallari, et al. argue that the valuation of the
land cannot be based on November 21, 1989, the date of
approval of the SDP. Instead, they aver that the date of
“taking” for valuation purposes is a factual issue best left to
the determination of the trial courts.
At the other end of the spectrum, AMBALA alleges that HLI
should no longer be paid just compensation for the
agricultural land that will be distributed to the FWBs, since
the Manila Regional Trial Court (RTC) already rendered a
decision ordering the Cojuangcos to transfer the control of
Hacienda Luisita to the Ministry of Agrarian Reform, which
will distribute the land to small farmers after compensating
the landowners P3.988 million. In the event, however, that
this Court will rule that HLI is indeed entitled to
compensation, AMBALA contends that it should be pegged
at forty thousand pesos (PhP 40,000) per hectare, since this
was the same value that Tadeco declared in 1989 to make
sure that the farmers will not own the majority of its stocks.
Despite the above propositions, We maintain that the date of
“taking” is November 21, 1989, the date when PARC
approved HLI’s SDP per PARC Resolution No. 89-12-2, in view
of the fact that this is the time that the FWBs were considered
to own and possess the agricultural lands in Hacienda Luisita.
To be precise, these lands became subject of the agrarian
reform coverage through the stock distribution scheme only
upon the approval of the SDP, that is, November 21, 1989.
Thus, such approval is akin to a notice of coverage ordinarily
issued under compulsory acquisition. Further, any doubt
should be resolved in favor of the FWBs. As this Court held
in Perez-Rosario v. CA:
It is an established social and economic fact
that the escalation of poverty is the driving
force behind the political disturbances that
have in the past compromised the peace and
security of the people as well as the
continuity of the national order. To subdue
these acute disturbances, the legislature over
the course of the history of the nation passed
a series of laws calculated to accelerate
agrarian reform, ultimately to raise the
material standards of living and eliminate
discontent. Agrarian reform is a perceived
solution to social instability. The edicts of
social justice found in the Constitution and
the public policies that underwrite them, the
extraordinary national experience, and the
prevailing national consciousness, all
command the great departments of
government to tilt the balance in favor of the
poor and underprivileged whenever
reasonable doubt arises in the interpretation
of the law. But annexed to the great and
sacred charge of protecting the weak is the
diametric function to put every effort to
arrive at an equitable solution for all parties
concerned: the jural postulates of social
60
justice cannot shield illegal acts, nor do they
sanction false sympathy towards a certain
class, nor yet should they deny justice to the
landowner whenever truth and justice
happen to be on her side. In the occupation
of the legal questions in all agrarian disputes
whose outcomes can significantly affect
societal harmony, the considerations of social
advantage must be weighed, an inquiry into
the prevailing social interests is necessary in
the adjustment of conflicting demands and
expectations of the people, and the social
interdependence of these interests,
recognized. (Emphasis and citations omitted.)
Considering that the issue on just compensation has already been passed
upon and denied by the Court in its November 22, 2011 Resolution, a
subsequent motion touching on the same issue undeniably partakes of a
second motion for reconsideration, hence, a prohibited pleading, and as such,
the motion or plea must be denied. Sec. 3 of Rule 15 of the Internal Rules of
the Supreme Court is clear:
SEC. 3. Second motion for reconsideration. – The Court
shall not entertain a second motion for reconsideration, and
any exception to this rule can only be granted in the higher
interest of justice by the Court en banc upon a vote of at least
two-thirds of its actual membership. There is reconsideration
“in the higher interest of justice” when the assailed decision is
not only legally erroneous, but is likewise patently unjust and
potentially capable of causing unwarranted and irremediable
injury or damage to the parties. A second motion for
reconsideration can only be entertained before the ruling
sought to be reconsidered becomes final by operation of law
or by the Court’s declaration.
In the Division, a vote of three Members shall be required to
elevate a second motion for reconsideration to the Court En
Banc.
Nonetheless, even if we entertain said motion and examine the
arguments raised by HLI and Mallari, et al. one last time, the result
will be the same.
Sec. 4, Article XIII of the 1987 Constitution expressly provides that the
taking of land for use in the agrarian reform program of the
government is conditioned on the payment of just compensation. As
stated:
Section 4. The State shall, by law, undertake an agrarian
reform program founded on the right of farmers and regular
farm workers, who are landless, to own directly or collectively
the lands they till or, in the case of other farm workers, to
receive a just share of the fruits thereof. To this end, the State
shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable
retention limits as the Congress may prescribe, taking into
account ecological, developmental, or equity considerations,
and subject to the payment of just compensation.
(Emphasis supplied.)
Just compensation has been defined as “the full and fair equivalent of
the property taken from its owner by the expropriator.”[12] The
measure is not the taker’s gain, but the owner’s loss.[13] In
determining just compensation, the price or value of the property at
the time it was taken from the owner and appropriated by the
government shall be the basis. If the government takes possession of
the land before the institution of expropriation proceedings, the value
should be fixed as of the time of the taking of said possession, not of
the filing of the complaint.[14]
In Land Bank of the Philippines v. Livioco, the Court held that “the
‘time of taking’ is the time when the landowner was deprived of the
use and benefit of his property, such as when title is transferred to
the Republic.”[15] It should be noted, however, that “taking” does not
only take place upon the issuance of title either in the name of the
Republic or the beneficiaries of the Comprehensive Agrarian Reform
Program (CARP). “Taking” also occurs when agricultural lands are
voluntarily offered by a landowner and approved by PARC for CARP
coverage through the stock distribution scheme, as in the instant
case. Thus, HLI’s submitting its SDP for approval is an
acknowledgment on its part that the agricultural lands of Hacienda
Luisita are covered by CARP. However, it was the PARC approval
which should be considered as the effective date of “taking” as it
was only during this time that the government officially
confirmed the CARP coverage of these lands.
Indeed, stock distribution option and compulsory land acquisition are
two (2) different modalities under the agrarian reform program.
Nonetheless, both share the same end goal, that is, to have “a more
equitable distribution and ownership of land, with due regard to the
rights of landowners to just compensation.”[16]
The fact that Sec. 31 of Republic Act No. 6657 (RA 6657) gives
corporate landowners the option to give qualified beneficiaries the
right to avail of a stock distribution or, in the phraseology of the law,
“the right to purchase such proportion of the capital stock of the
corporation that the agricultural land, actually devoted to agricultural
activities, bears in relation to the company’s total assets,” does not
detract from the avowed policy of the agrarian reform law of
equitably distributing ownership of land. The difference lies in the fact
that instead of actually distributing the agricultural lands to the
farmer-beneficiaries, these lands are held by the corporation as part
of the capital contribution of the farmer-beneficiaries, not of the
landowners, under the stock distribution scheme. The end goal of
equitably distributing ownership of land is, therefore, undeniable.
And since it is only upon the approval of the SDP that the agricultural
lands actually came under CARP coverage, such approval operates
and takes the place of a notice of coverage ordinarily issued under
compulsory acquisition.
Moreover, precisely because due regard is given to the rights of
landowners to just compensation, the law on stock distribution
option acknowledges that landowners can require payment for the
shares of stock corresponding to the value of the agricultural lands in
relation to the outstanding capital stock of the corporation.
Although Tadeco did not require compensation for the shares of
stock corresponding to the value of the agricultural lands in relation
to the outstanding capital stock of HLI, its inability to receive
compensation cannot be attributed to the government. The second
paragraph of Sec. 31 of RA 6657 explicitly states that “[u]pon
certification by DAR, corporations owning agricultural lands may give
their qualified beneficiaries the right to purchase such proportion of
the capital stock of the corporation that the agricultural land, actually
devoted to agricultural activities, bears in relation to the company’s
total assets, under such terms and conditions as may be agreed upon
by them. x x x”[17] On the basis of this statutory provision, Tadeco
could have exacted payment for such shares of stock corresponding
to the value of the agricultural lands of Hacienda Luisita in relation to
61
the outstanding capital stock of HLI, but it did not do so.
What is notable, however, is that the divestment by Tadeco of the
agricultural lands of Hacienda Luisita and the giving of the shares of
stock for free is nothing but an enticement or incentive for the FWBs
to agree with the stock distribution option scheme and not further
push for land distribution. And the stubborn fact is that the “man
days” scheme of HLI impelled the FWBs to work in the hacienda in
exchange for such shares of stock.
Notwithstanding the foregoing considerations, the suggestion that
there is “taking” only when the landowner is deprived of the use and
benefit of his property is not incompatible with Our conclusion that
“taking” took place on November 21, 1989. As mentioned in Our July
5, 2011 Decision, even from the start, the stock distribution scheme
appeared to be Tadeco’s preferred option in complying with the
CARP when it organized HLI as its spin-off corporation in order to
facilitate stock acquisition by the FWBs. For this purpose, Tadeco
assigned and conveyed to HLI the agricultural lands of Hacienda
Luisita, set at 4,915.75 hectares, among others. These agricultural
lands constituted as the capital contribution of the FWBs in HLI. In
effect, Tadeco deprived itself of the ownership over these lands when
it transferred the same to HLI.
While it is true that Tadeco has majority control over HLI, the Court
cannot subscribe to the view Mallari, et al. espouse that, on the basis
of such majority stockholding, Tadeco was never deprived of the use
and benefit of the agricultural lands of Hacienda Luisita it divested
itself in favor of HLI.
It bears stressing that “[o]wnership is defined as a relation in law by
virtue of which a thing pertaining to one person is completely
subjected to his will in everything not prohibited by law or the
concurrence with the rights of another.”[18] The attributes of
ownership are: jus utendi or the right to possess and enjoy, jus
fruendi or the right to the fruits, jus abutendi or the right to abuse or
consume, jus disponendi or the right to dispose or alienate, and jus
vindicandi or the right to recover or vindicate.[19]
When the agricultural lands of Hacienda Luisita were transferred by
Tadeco to HLI in order to comply with CARP through the stock
distribution option scheme, sealed with the imprimatur of PARC
under PARC Resolution No. 89-12-2 dated November 21, 1989,
Tadeco was consequently dispossessed of the afore-mentioned
attributes of ownership. Notably, Tadeco and HLI are two different
entities with separate and distinct legal personalities. Ownership by
one cannot be considered as ownership by the other.
Corollarily, it is the official act by the government, that is, the
PARC’s approval of the SDP, which should be considered as the
reckoning point for the “taking” of the agricultural lands of
Hacienda Luisita. Although the transfer of ownership over the
agricultural lands was made prior to the SDP’s approval, it is this
Court’s consistent view that these lands officially became subject of
the agrarian reform coverage through the stock distribution scheme
only upon the approval of the SDP. And as We have mentioned in
Our November 22, 2011 Resolution, such approval is akin to a notice
of coverage ordinarily issued under compulsory acquisition.
Further, if We adhere to HLI’s view that the Notice of Coverage issued
on January 2, 2006 should, at the very least, be considered as the
date of “taking” as this was the only time that the agricultural portion
of the hacienda was placed under compulsory acquisition in view of
HLI’s failure to perform certain obligations under the SDP, this Court
would, in effect, be penalizing the qualified FWBs twice for acceding
to the adoption of the stock distribution scheme: first, by depriving
the qualified FWBs of the agricultural lands that they should have
gotten early on were it not for the adoption of the stock distribution
scheme of which they only became minority stockholders; and
second, by making them pay higher amortizations for the agricultural
lands that should have been given to them decades ago at a much
lower cost were it not for the landowner’s initiative of adopting the
stock distribution scheme “for free.”
Reiterating what We already mentioned in Our November 22, 2011
Resolution, “[e]ven if it is the government which will pay the just
compensation to HLI, this will also affect the FWBs as they will be
paying higher amortizations to the government if the ‘taking’ will be
considered to have taken place only on January 2, 2006.” As aptly
observed by Justice Leonardo-De Castro in her Concurring Opinion,
“this will put the land beyond the capacity of the [FWBs] to pay,”
which this Court should not countenance.
Considering the above findings, it cannot be gainsaid that effective
“taking” took place in the case at bar upon the approval of the SDP,
that is, on November 21, 1989.
HLI postulates that just compensation is a question of fact that
should be left to the determination by the DAR, Land Bank of the
Philippines (LBP) or even the special agrarian court (SAC).[20] As a
matter of fact, the Court, in its November 22, 2011 Resolution,
dispositively ordered the DAR and the LBP to determine the
compensation due to HLI. And as indicated in the body of said
Resolution:
The foregoing notwithstanding, it bears stressing that the
DAR’s land valuation is only preliminary and is not, by any
means, final and conclusive upon the landowner. The
landowner can file an original action with the RTC acting as a
special agrarian court to determine just compensation. The
court has the right to review with finality the determination in
the exercise of what is admittedly a judicial function.
As regards the issue on when “taking” occurred with respect to the
agricultural lands in question, We, however, maintain that this Court can rule,
as it has in fact already ruled on its reckoning date, that is, November 21,
1989, the date of issuance of PARC Resolution No. 89-12-2, based on the
above-mentioned disquisitions. The investment on SACs of original and
exclusive jurisdiction over all petitions for the determination of just
compensation to landowners[21] will not preclude the Court from ruling upon
a matter that may already be resolved based on the records before Us. By
analogy, Our ruling in Heirs of Dr. Jose Deleste v. LBP is applicable:
Indeed, it is the Office of the DAR Secretary which is vested
with the primary and exclusive jurisdiction over all matters
involving the implementation of the agrarian reform
program. However, this will not prevent the Court from
assuming jurisdiction over the petition considering that
the issues raised in it may already be resolved on the
basis of the records before Us. Besides, to allow the
matter to remain with the Office of the DAR Secretary
would only cause unnecessary delay and undue hardship
on the parties. Applicable, by analogy, is Our ruling in the
recent Bagong Pagkakaisa ng Manggagawa ng Triumph
International v. Department of Labor and Employment
Secretary, where We held:
But as the CA did, we similarly recognize that undue hardship,
to the point of injustice, would result if a remand would be
ordered under a situation where we are in the position to
62
resolve the case based on the records before us. As we said in
Roman Catholic Archbishop of Manila v. Court of Appeals:
[w]e have laid down the rule that the remand of the case to
the lower court for further reception of evidence is not
necessary where the Court is in a position to resolve the
dispute based on the records before it. On many occasions,
the Court, in the public interest and for the expeditious
administration of justice, has resolved actions on the merits
instead of remanding them to the trial court for further
proceedings, such as where the ends of justice, would not be
subserved by the remand of the case.[22] (Emphasis supplied;
citations omitted.)
Even though the compensation due to HLI will still be preliminarily
determined by DAR and LBP, subject to review by the RTC acting as a SAC,
the fact that the reckoning point of “taking” is already fixed at a certain date
should already hasten the proceedings and not further cause undue hardship
on the parties, especially the qualified FWBs.
By a vote of 8-6, the Court affirmed its ruling that the date of “taking”
in determining just compensation is November 21, 1989 when PARC
approved HLI’s stock option plan.
As regards the issue of interest on just compensation, We also leave this
matter to the DAR and the LBP, subject to review by the RTC acting as a SAC.
Option will not ensure
control over agricultural lands
In Our November 22, 2011 Resolution, this Court held:
After having discussed and considered the different
contentions raised by the parties in their respective motions,
We are now left to contend with one crucial issue in the case
at bar, that is, control over the agricultural lands by the
qualified FWBs.
Upon a review of the facts and circumstances, We realize that
the FWBs will never have control over these agricultural lands
for as long as they remain as stockholders of HLI. In Our July
5, 2011 Decision, this Court made the following observations:
There is, thus, nothing unconstitutional in the
formula prescribed by RA 6657. The policy
on agrarian reform is that control over the
agricultural land must always be in the
hands of the farmers. Then it falls on the
shoulders of DAR and PARC to see to it the
farmers should always own majority of the
common shares entitled to elect the
members of the board of directors to ensure
that the farmers will have a clear majority in
the board. Before the SDP is approved, strict
scrutiny of the proposed SDP must always be
undertaken by the DAR and PARC, such that
the value of the agricultural land contributed
to the corporation must always be more than
50% of the total assets of the corporation to
ensure that the majority of the members of
the board of directors are composed of the
farmers. The PARC composed of the
President of the Philippines and cabinet
secretaries must see to it that control over
the board of directors rests with the farmers
 by rejecting the inclusion of non-agricultural
assets which will yield the majority in the
board of directors to non-farmers. Any
deviation, however, by PARC or DAR from the
correct application of the formula prescribed
by the second paragraph of Sec. 31 of RA
6675 does not make said provision
constitutionally infirm. Rather, it is the
application of said provision that can be
challenged. Ergo, Sec. 31 of RA 6657 does
not trench on the constitutional policy of
ensuring control by the farmers.
In line with Our finding that control over agricultural lands
must always be in the hands of the farmers, We reconsider
our ruling that the qualified FWBs should be given an option
to remain as stockholders of HLI, inasmuch as these qualified
FWBs will never gain control given the present proportion of
shareholdings in HLI.
A revisit of HLI’s Proposal for Stock Distribution under CARP
and the Stock Distribution Option Agreement (SDOA) upon
which the proposal was based reveals that the total assets of
HLI is PhP 590,554,220, while the value of the 4,915.7466
hectares is PhP 196,630,000. Consequently, the share of the
farmer-beneficiaries in the HLI capital stock is 33.296%
(196,630,000 divided by 590,554.220); 118,391,976.85 HLI
shares represent 33.296%. Thus, even if all the holders of the
118,391,976.85 HLI shares unanimously vote to remain as HLI
stockholders, which is unlikely, control will never be placed in
the hands of the farmer-beneficiaries. Control, of course,
means the majority of 50% plus at least one share of the
common shares and other voting shares. Applying the
formula to the HLI stockholdings, the number of shares that
will constitute the majority is 295,112,101 shares (590,554,220
divided by 2 plus one [1] HLI share). The 118,391,976.85
shares subject to the SDP approved by PARC substantially fall
short of the 295,112,101 shares needed by the FWBs to
acquire control over HLI. Hence, control can NEVER be
attained by the FWBs. There is even no assurance that 100%
of the 118,391,976.85 shares issued to the FWBs will all be
voted in favor of staying in HLI, taking into account the
previous referendum among the farmers where said shares
were not voted unanimously in favor of retaining the SDP. In
light of the foregoing consideration, the option to remain in
HLI granted to the individual FWBs will have to be recalled
and revoked.
Moreover, bearing in mind that with the revocation of the
approval of the SDP, HLI will no longer be operating under
SDP and will only be treated as an ordinary private
corporation; the FWBs who remain as stockholders of HLI will
be treated as ordinary stockholders and will no longer be
under the protective mantle of RA 6657. (Emphasis in the
original.)
HLI, however, takes exception to the above-mentioned ruling and contends
that “[t]here is nothing in the Constitution nor in the agrarian laws which
require that control over the agricultural lands must always be in the hands of
the farmers.”[23] Moreover, both HLI and Mallari, et al. claim that the option
given to the qualified FWBs to remain as stockholders of HLI is neither
iniquitous nor prejudicial to the FWBs.[24]
The Court agrees that the option given to the qualified FWBs whether to
63
remain as stockholders of HLI or opt for land distribution is neither iniquitous
nor prejudicial to the FWBs. Nonetheless, the Court is not unmindful of the
policy on agrarian reform that control over the agricultural land must always
be in the hands of the farmers. Contrary to the stance of HLI, both the
Constitution and RA 6657 intended the farmers, individually or collectively, to
have control over the agricultural lands of HLI; otherwise, all these rhetoric
about agrarian reform will be rendered for naught. Sec. 4, Art. XIII of the 1987
Constitution provides:
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 right of small landowners. The State shall further
provide incentives for voluntary land-sharing. (Emphasis
supplied.)
Pursuant to and as a mechanism to carry out the above-mentioned
constitutional directive, RA 6657 was enacted. In consonance with the
constitutional policy on agrarian reform, Sec. 2 of RA 6657 also states:
SECTION 2. Declaration of Principles and Policies. - It is the
policy of the State to pursue a Comprehensive Agrarian
Reform Program (CARP). The welfare of the landless farmers
and farm workers will receive the highest consideration to
promote social justice and to move the nation towards sound
rural development and industrialization, and the
establishment of owner cultivatorship of economic-sized
farms as the basis of Philippine agriculture.
To this end, a more equitable distribution and ownership of
land, with due regard to the rights of landowners to just
compensation and to the ecological needs of the nation, shall
be undertaken to provide farmers and farm workers with the
opportunity to enhance their dignity and improve the quality
of their lives through greater productivity of agricultural
lands.
The agrarian reform program is founded on the right of
farmers and regular farm workers, who are landless, to
own directly or collectively the lands they till or, in the
case of other farm workers, to receive a share of the fruits
thereof. To this end, the State shall encourage the just
distribution of all agricultural lands, subject to the priorities
and retention limits set forth in this Act, having taken into
account ecological, developmental, and equity
considerations, and subject to the payment of just
compensation. The State shall respect the right of small
landowners and shall provide incentives for voluntary land-
sharing.
The State shall recognize the right of farmers, farm workers
and landowners, as well as cooperatives and other
independent farmers’ organization, to participate in the
planning, organization, and management of the program,
and shall provide support to agriculture through appropriate
technology and research, and adequate financial, production,
marketing and other support services.

The State shall apply the principles of agrarian reform or
stewardship, whenever applicable, in accordance with law, in
the disposition or utilization of other natural resources,
including lands of the public domain, under lease or
concession, suitable to agriculture, subject to prior rights,
homestead rights of small settlers and the rights of
indigenous communities to their ancestral lands.
The State may resettle landless farmers and farm workers in
its own agricultural estates, which shall be distributed to
them in the manner provided by law.
By means of appropriate incentives, the State shall encourage
the formation and maintenance of economic-sized family
farms to be constituted by individual beneficiaries and small
landowners.
The State shall protect the rights of subsistence fishermen,
especially of local communities, to the preferential use of
communal marine and fishing resources, both inland and
offshore. It shall provide support to such fishermen through
appropriate technology and research, adequate financial,
production and marketing assistance and other services, The
State shall also protect, develop and conserve such resources.
The protection shall extend to offshore fishing grounds of
subsistence fishermen against foreign intrusion. Fishworkers
shall receive a just share from their labor in the utilization of
marine and fishing resources.
The State shall be guided by the principles that land has a
social function and land ownership has a social responsibility.
Owners of agricultural land have the obligation to cultivate
directly or through labor administration the lands they own
and thereby make the land productive.
The State shall provide incentives to landowners to invest the
proceeds of the agrarian reform program to promote
industrialization, employment and privatization of public
sector enterprises. Financial instruments used as payment for
lands shall contain features that shall enhance negotiability
and acceptability in the marketplace.
The State may lease undeveloped lands of the public domain
to qualified entities for the development of capital-intensive
farms, traditional and pioneering crops especially those for
exports subject to the prior rights of the beneficiaries under
this Act. (Emphasis supplied.)
Based on the above-quoted provisions, the notion of farmers and regular
farmworkers having the right to own directly or collectively the lands they till
is abundantly clear. We have extensively discussed this ideal in Our July 5,
2011 Decision:
The wording of the provision is unequivocal –– the farmers
and regular farmworkers have a right TO OWN DIRECTLY OR
COLLECTIVELY THE LANDS THEY TILL. The basic law allows
two (2) modes of land distribution—direct and indirect
ownership. Direct transfer to individual farmers is the most
commonly used method by DAR and widely accepted.
Indirect transfer through collective ownership of the
agricultural land is the alternative to direct ownership of
agricultural land by individual farmers. The aforequoted Sec.
4 EXPRESSLY authorizes collective ownership by farmers. No
language can be found in the 1987 Constitution that
64
disqualifies or prohibits corporations or cooperatives of
farmers from being the legal entity through which collective
ownership can be exercised. The word ‘collective’ is defined
as ‘indicating a number of persons or things considered as
constituting one group or aggregate,’ while ‘collectively’ is
defined as ‘in a collective sense or manner; in a mass or
body.’ By using the word ‘collectively,’ the Constitution
allows for indirect ownership of land and not just outright
agricultural land transfer. This is in recognition of the fact
that land reform may become successful even if it is done
through the medium of juridical entities composed of
farmers.
Collective ownership is permitted in two (2) provisions of RA
6657. Its Sec. 29 allows workers’ cooperatives or associations
to collectively own the land, while the second paragraph of
Sec. 31 allows corporations or associations to own
agricultural land with the farmers becoming stockholders or
members. Said provisions read:
SEC. 29. Farms owned or operated by
corporations or other business associations.—
In the case of farms owned or operated by
corporations or other business associations,
the following rules shall be observed by the
PARC.
In general, lands shall be distributed directly
to the individual worker-beneficiaries.
In case it is not economically feasible and
sound to divide the land, then it shall be
owned collectively by the worker
beneficiaries who shall form a workers’
cooperative or association which will deal
with the corporation or business association.
x x x
SEC. 31. Corporate Landowners.— x x x
x x x x
Upon certification by the
DAR, corporations owning agricultural lands
may give their qualified beneficiaries the
right to purchase such proportion of the
capital stock of the corporation that the
agricultural land, actually devoted to
agricultural activities, bears in relation to the
company’s total assets, under such terms and
conditions as may be agreed upon by them.
In no case shall the compensation received
by the workers at the time the shares of
stocks are distributed be reduced. The same
principle shall be applied to associations,
with respect to their equity or participation. x
xx
Clearly, workers’ cooperatives or associations under Sec. 29 of
RA 6657 and corporations or associations under the
succeeding Sec. 31, as differentiated from individual farmers,
are authorized vehicles for the collective ownership of
agricultural land. Cooperatives can be registered with the
Cooperative Development Authority and acquire legal
 personality of their own, while corporations are juridical
persons under the Corporation Code. Thus, Sec. 31 is
constitutional as it simply implements Sec. 4 of Art. XIII of the
Constitution that land can be owned COLLECTIVELY by
farmers. Even the framers of the l987 Constitution are in
unison with respect to the two (2) modes of ownership of
agricultural lands tilled by farmers––DIRECT and COLLECTIVE,
thus:
MR. NOLLEDO. And when we talk of the
phrase ‘to own directly,’ we mean the
principle of direct ownership by the tiller?
MR. MONSOD. Yes.
MR. NOLLEDO. And when we talk of
‘collectively,’ we mean communal
ownership, stewardship or State ownership?
MS. NIEVA. In this section, we conceive of
cooperatives; that is farmers’ cooperatives
owning the land, not the State.
MR. NOLLEDO. And when we talk of
‘collectively,’ referring to farmers’
cooperatives, do the farmers own specific
areas of land where they only unite in their
efforts?
MS. NIEVA. That is one way.
MR. NOLLEDO. Because I understand that
there are two basic systems involved: the
‘moshave’ type of agriculture and the
‘kibbutz.’ So are both contemplated in the
report?
MR. TADEO. Ang dalawa kasing
pamamaraan ng pagpapatupad ng tunay
na reporma sa lupa ay ang pagmamay-ari
ng lupa na hahatiin sa individual na
pagmamay-ari – directly – at ang
tinatawag na sama-samang gagawin ng
mga magbubukid. Tulad sa Negros, ang
gusto ng mga magbubukid ay gawin nila
itong ‘cooperative or collective farm.’ Ang
ibig sabihin ay sama-sama nilang sasakahin.
x x x x
MR. TINGSON. x x x When we speak here of
‘to own directly or collectively the lands they
till,’ is this land for the tillers rather than land
for the landless? Before, we used to hear
‘land for the landless,’ but now the slogan is
‘land for the tillers.’ Is that right?
MR. TADEO. Ang prinsipyong umiiral dito ay
iyong land for the tillers. Ang ibig sabihin ng
‘directly’ ay tulad sa implementasyon sa
rice and corn lands kung saan inaari na ng
mga magsasaka ang lupang binubungkal
nila. Ang ibig sabihin naman ng
‘collectively’ ay sama-samang paggawa sa
isang lupain o isang bukid, katulad ng
sitwasyon sa Negros.
As Commissioner Tadeo explained, the farmers will work on
the agricultural land ‘sama-sama’ or collectively. Thus, the
main requisite for collective ownership of land is collective or
65
group work by farmers of the agricultural land. Irrespective
of whether the landowner is a cooperative, association or
corporation composed of farmers, as long as concerted
group work by the farmers on the land is present, then it falls
within the ambit of collective ownership scheme. (Emphasis in
the original; underscoring supplied.)
As aforequoted, there is collective ownership as long as there is a concerted
group work by the farmers on the land, regardless of whether the landowner
is a cooperative, association or corporation composed of farmers. However,
this definition of collective ownership should be read in light of the clear
policy of the law on agrarian reform, which is to emancipate the tiller from
the bondage of the soil and empower the common people. Worth noting too
is its noble goal of rectifying “the acute imbalance in the distribution of this
precious resource among our people.”[25] Accordingly, HLI’s insistent view
that control need not be in the hands of the farmers translates to allowing it
to run roughshod against the very reason for the enactment of agrarian
reform laws and leave the farmers in their shackles with sheer lip service to
look forward to.
Notably, it has been this Court’s consistent stand that control over the
agricultural land must always be in the hands of the farmers. As We wrote in
Our July 5, 2011 Decision:
There is, thus, nothing unconstitutional in the formula
prescribed by RA 6657. The policy on agrarian reform is
that control over the agricultural land must always be in
the hands of the farmers. Then it falls on the shoulders of
DAR and PARC to see to it the farmers should always own
majority of the common shares entitled to elect the members
of the board of directors to ensure that the farmers will have
a clear majority in the board. Before the SDP is approved,
strict scrutiny of the proposed SDP must always be
undertaken by the DAR and PARC, such that the value of the
agricultural land contributed to the corporation must always
be more than 50% of the total assets of the corporation to
ensure that the majority of the members of the board of
directors are composed of the farmers. The PARC
composed of the President of the Philippines and cabinet
secretaries must see to it that control over the board of
directors rests with the farmers by rejecting the inclusion
of non-agricultural assets which will yield the majority in
the board of directors to non-farmers. Any deviation,
however, by PARC or DAR from the correct application of
the formula prescribed by the second paragraph of Sec.
31 of RA 6675 does not make said provision
constitutionally infirm. Rather, it is the application of said
provision that can be challenged. Ergo, Sec. 31 of RA 6657
does not trench on the constitutional policy of ensuring
control by the farmers. (Emphasis supplied.)
There is an aphorism that “what has been done can no longer be undone.”
That may be true, but not in this case. The SDP was approved by PARC even if
the qualified FWBs did not and will not have majority stockholdings in HLI,
contrary to the obvious policy by the government on agrarian reform. Such
an adverse situation for the FWBs will not and should not be permitted to
stand. For this reason, We maintain Our ruling that the qualified FWBs will no
longer have the option to remain as stockholders of HLI.
FWBs Entitled
to Proceeds of Sale
HLI reiterates its claim over the proceeds of the sales of the 500 hectares and
80.51 hectares of the land as corporate owner and argues that the return of
said proceeds to the FWBs is unfair and violative of the Corporation Code.
This claim is bereft of merit. to refund or to return them.

It cannot be denied that the adverted 500-hectare converted land and the
SCTEX lot once formed part of what would have been agrarian-distributable
lands, in fine subject to compulsory CARP coverage. And, as stated in our July
5, 2011 Decision, were it not for the approval of the SDP by PARC, these large
parcels of land would have been distributed and ownership transferred to the
FWBs, subject to payment of just compensation, given that, as of 1989, the
subject 4,915 hectares of Hacienda Luisita were already covered by CARP.
Accordingly, the proceeds realized from the sale and/or disposition thereof
should accrue for the benefit of the FWBs, less deductions of the 3% of the
proceeds of said transfers that were paid to the FWBs, the taxes and expenses
relating to the transfer of titles to the transferees, and the expenditures
incurred by HLI and Centennary Holdings, Inc. for legitimate corporate
purposes, as prescribed in our November 22, 2011 Resolution.
Homelots
In the present recourse, HLI also harps on the fact that since the homelots
given to the FWBs do not form part of the 4,915.75 hectares covered by the
SDP, then the value of these homelots should, with the revocation of the SDP,
be paid to Tadeco as the landowner.[26]
We disagree. As We have explained in Our July 5, 2011 Decision, the
distribution of homelots is required under RA 6657 only for corporations or
business associations owning or operating farms which opted for land
distribution. This is provided under Sec. 30 of RA 6657. Particularly:
SEC. 30. Homelots and Farmlots for Members of Cooperatives.
— The individual members of the cooperatives or
corporations mentioned in the preceding section shall be
provided with homelots and small farmlots for their family
use, to be taken from the land owned by the cooperative or
corporation. (Italics supplied.)
The “preceding section” referred to in the above-quoted provision is Sec. 29
of RA 6657, which states:
SEC. 29. Farms Owned or Operated by Corporations or Other
Business Associations.&mdashIn the case of farms owned or
operated by corporations or other business associations, the
following rules shall be observed by the PARC.
In general, lands shall be distributed directly to the individual
worker-beneficiaries.
In case it is not economically feasible and sound to divide the
land, then it shall be owned collectively by the worker-
beneficiaries who shall form a workers’ cooperative or
association which will deal with the corporation or business
association. Until a new agreement is entered into by and
between the workers’ cooperative or association and the
corporation or business association, any agreement existing
at the time this Act takes effect between the former and the
previous landowner shall be respected by both the workers’
cooperative or association and the corporation or business
association.
The Court, by a unanimous vote, resolved to maintain its ruling that the FWBs
shall retain ownership of the homelots given to them with no obligation to
pay for the value of said lots. However, since the SDP was already revoked
with finality, the Court directs the government through the DAR to pay HLI
the just compensation for said homelots in consonance with Sec. 4, Article XIII
of the 1987 Constitution that the taking of land for use in the agrarian reform
program is “subject to the payment of just compensation.” Just compensation
should be paid to HLI instead of Tadeco in view of the Deed of Assignment
and Conveyance dated March 22, 1989 executed between Tadeco and HLI,
where Tadeco transferred and conveyed to HLI the titles over the lots in
question. DAR is ordered to compute the just compensation of the homelots
in accordance with existing laws, rules and regulations.
To recapitulate, the Court voted on the following issues in this manner:
1. In determining the date of “taking,” the Court voted 8-6 to maintain
the ruling fixing November 21, 1989 as the date of “taking,” the
value of the affected lands to be determined by the LBP and the
DAR;
2. On the propriety of the revocation of the option of the FWBs to
remain as HLI stockholders, the Court, by unanimous vote, agreed
to reiterate its ruling in its November 22, 2011 Resolution that the
option granted to the FWBs stays revoked;
3. On the propriety of returning to the FWBs the proceeds of the sale
of the 500-hectare converted land and of the 80.51-hectare SCTEX
land, the Court unanimously voted to maintain its ruling to order
the payment of the proceeds of the sale of the said land to the
FWBs less the 3% share, taxes and expenses specified in the fallo of
the November 22, 2011 Resolution;
4. On the payment of just compensation for the homelots to HLI, the
Court, by unanimous vote, resolved to amend its July 5, 2011
Decision and November 22, 2011 Resolution by ordering the
government, through the DAR, to pay to HLI the just compensation
for the homelots thus distributed to the FWBS.
WHEREFORE, the Motion to Clarify and Reconsider Resolution of November
22, 2011 dated December 16, 2011 filed by petitioner Hacienda Luisita, Inc.
and the Motion for Reconsideration/Clarification dated December 9, 2011 filed
by private respondents Noel Mallari, Julio Suniga, Supervisory Group of
Hacienda Luisita, Inc. and Windsor Andaya are hereby DENIED with this
qualification: the July 5, 2011 Decision, as modified by the November 22,
2011 Resolution, is FURTHER MODIFIED in that the government, through
DAR, is ordered to pay Hacienda Luisita, Inc. the just compensation for the
240-square meter homelots distributed to the FWBs.
The July 5, 2011 Decision, as modified by the November 22, 2011 Resolution
and further modified by this Resolution is declared FINAL and EXECUTORY.
The entry of judgment of said decision shall be made upon the time of the
promulgation of this Resolution.
No further pleadings shall be entertained in this case.
SO ORDERED.

Since none of the above-quoted provisions made reference to corporations

which opted for stock distribution under Sec. 31 of RA 6657, then it is
apparent that said corporations are not obliged to provide for homelots.
Nonetheless, HLI undertook to “subdivide and allocate for free and without
charge among the qualified family-beneficiaries x x x residential or homelots
of not more than 240 sq. m. each, with each family beneficiary being assured
of receiving and owning a homelot in the barrio or barangay where it actually
resides.” In fact, HLI was able to distribute homelots to some if not all of the
FWBs. Thus, in our November 22, 2011 Resolution, We declared that the
homelots already received by the FWBs shall be respected with no obligation

66
G.R. No. 190520 May 30, 2016
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
SPOUSES ANTONIO AND CARMEN AVANCEÑA, Respondents.
DECISION
PERALTA, J.:
Before us in a petition for review on certiorari filed by petitioner Land Bank of the
Philippines seeking to annul and set aside the Decision1 dated August 11, 2008 of
the Court of Appeals (CA) isued in CA-G.R. CV No. 00067 directiong thit to pay
twelve percent 912%) interest per anum for delay in the payment of just
compensation. Also assailed is the CA Resolution2 dated December 1, 2009 denying
reconsideration thereof.
Respondents-Spouses Antonio and Carmen Avanceña were the registered
owners of a parcel of agricultural land situated at Sanghan, Cabadbaran,
Agusan del Norte covered by Transfer Certificate of Title No. RT-2937 containing an
area of 205.0074 hectares. In 1988, respondents spouses voluntarily offered to
sell their land to the government under the Comprehensive Agrarian Reform
Program (CARP), which consisted of 160.2532 hectares of the land. In 1991,
petitioner Land Bank of the Philippines initially valued the subject lot at
Pl,877,516.09 based on the guidelines prescribed in DAR Administrative Order
No. 17, Series of 1989. Upon recomputation in 1994 and based on DAR AO
No. 6, Series of 1992, as amended, by DAR AO No. 11, Series of 1994, the land
was revalued at P3,337,672.78 but respondents rejected the valuation.
Petitioner deposited the difference in the cash portion between the revalued
amount and the initial valuation of P 1,877,516.09 in trust for the respondents
on July 24, 1996. The parties brought the matter of valuation to the
Department of Agrarian Reform Adjudication Board (DARAB), Caraga
Regional Office, which affirmed petitioner's second valuation.
Respondents-spouses filed with the Regional Trial Court, acting as a Special
Agrarian Court (SAC), a complaint for determination of just compensation,
docketed as Civil Case No. 4507. They prayed for a valuation of no less than
P200,000.00 per hectare for the subject lot or in the alternative, to appoint
Commissioners to determine the just compensation; and that they be allowed to
withdraw the valuation amount that petitioner had deposited for them including the
earned interest, pending the court's final valuation. Petitioner filed its Answer
alleging that the valuation was computed based on the factors enumerated in
Section 17 of Republic Act No. (R.A.) 6657, the Comprehensive Agrarian Reform Law.
While the complaint was pending, petitioner made a reevaluation of the
property using the valuation prescribed by DAR AO 5, series of 1998 which
yielded the amount of P9,057,180.32.
On March 29, 2000, the SAC issued its Decision,3 the dispositive portion of
which reads:
WHEREFORE, premises considered, judgment is hereby rendered directing the
defendants Land Bank of the Philippines (LBP) and the Department of
Agrarian Reform (DAR) to pay plaintiffs the following:
1. The sum of Twenty Million Four Hundred Seventy-
Five Thousand, Seven Hundred Seventy-Five
(P20,475,775) Pesos for the 160.253 hectares [of] land
with its improvements with six (6%) percent legal
interest thereon, less the provisional deposits from April
1991 until actually paid;
2. The sum of One Hundred Thousand (Pl00,000) Pesos,
as Attorneys' fees;
3. The sum of One Hundred Thousand (Pl 00,000) Pesos,
litigation expenses; 4. All other claims and
counterclaims are dismissed for lack of merit.
SO ORDERED.4
67
Petitioner's motion for reconsideration was denied, hence it appealed the
decision with the CA. In the meantime, respondents spouses moved for the
execution of the RTC decision pending appeal5 which was granted in a Resolution6
dated October 2, 2000; thus, the writ of execution was issued and
implemented.1âwphi1
On August 11, 2008, the CA issued the assailed decision, the decretal portion of
which reads:
WHEREFORE, in view of all the foregoing, the instant appeal is hereby GRANTED
and the assailed March 29, 2006 decision of the Regional Trial Court (RTC),
10111 Judicial Region, Branch 5, Butuan City, in Civil Case No. 4507, is hereby SET
ASIDE. Consequently, this case is remanded to the court a quo for the
recomputation of just compensation. In determining the valuation of the subject
property, the factors provided under Section 17 of R.A. 6657 shall be considered in
accord with the formula prescribed in DAR Administrative Order No. 5, Series of
1998. Moreover, the just compensation due the [S]pouses Avancena should bear
12% interest per annum from the time title to the property was transferred in the
name of the government up to the time that LBP deposited the amount of its
valuation for the subject land under the account of the appellees. The basis of the
12% interest would be the just compensation that would be determined by the
court a quo after remand of the instant case.
SO ORDERED.7
Petitioner filed a motion for partial reconsideration arguing that the CA erred in
awarding interest at the rate of 12% p.a. reckoned from the time title to property
was transferred in the name of the government to the time petitioner deposited the
valuation in July 1996. It argued that upon receipt of the DAR order of deposit, it
immediately deposited the cash portion of the initial valuation of P 1,877 ,516.09 on
October 17, 1991, thus it never incurred delay as the title to the subject lot was
transferred in the name of the government only in December 1991.
On December 1, 2009, the CA issued its resolution denying the motion for
reconsideration. It found that nowhere in the records showed that petitioner made
a deposit of Pl,877,516.09 on October 17,1991.
Dissatisfied, petitioner is now before us alleging that:
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF LAW IN
AWARDING INTEREST AT THE RATE OF 12% PER ANNUM FROM THE TIME TITLE TO
THE PROPERTY WAS TRANSFERRED IN THE NAME OF THE GOVERNMENT IN 1991 UP
TO THE TIME LBP ALLEGEDLY DEPOSITED THE VALUATION IN 1996.8
Petitioner claims that it deposited cash and bonds for the initial valuation of Pl,877,
516.09 on October 17, 1991. It attached in this petition a Certification9 dated
October 22, 1991 which stated that the cash and bonds due the respondents-
spouses have been earmarked by petitioner for respondents spouses on October 17,
1991. It argues that such deposit was the basis for the DAR to take possession of the
prope1iy and caused the issuance of the title in the name of the government in
December 1991, pursuant to Section 16 ( e) of RA 6657, thus, it did not incur any
delay in depositing the amounts due the respondents-spouses which can validly
justify the payment of interest.
Petitioner cites the case of Apo Fruits Corporation et al. v. CA10 saying that we have
categorically declared therein that payment of interest for delay cannot be applied
where there is prompt and valid payment of just compensation as initially
determined, as subsequently determined after revaluation, and even if the amount
was later on increased pursuant to the court's judgment.
Petitioner further contends that despite the pendency of the case with the CA, the
RTC issued a Writ of Execution dated March 9, 2000 directing petitioner to pay the
RTC's valuation of P20,475,775.00 plus legal interest thereon at the rate of 6% per
annum from April 1991 until fully paid; that since such valuation was, however, set
aside by the CA in its assailed decision, there is now a huge possibility that the
recomputed value will be much lower than P20,475,775.00; that the advance
payment it made amounting to P23,416,772.55 may have exceeded the value of the
subject land so that there is a need for respondents spouses to return the diference
between its valuation of P9,057,182.30 and the advance payment.
We are not persuaded.
The CA found that the title to respondents spouses' land was canceled and a
new title was issued in the name of the Republic of the Philippines in
December 1991, but there was no showing that petitioner had made
payments prior to the taking of the land.
Thus, there was delay in the payment of just compensation which entitles the
respondents spouses to the payment of interest from the time the property
was transferred in the name of the government in December 1991 up to the
time petitioner deposited the valuation in the account of the respondents-
spouses in July 1996. We agree with the CA that petitioner should pay
interest for the delay in the payment of just compensation. However, such
payment of interest should be computed up to the full payment of just
compensation.
Petitioner argues that it had made a deposit on October 17, 1991, i.e., prior to
the cancellation of the title of the respondents-spouses, and submitted with
us a Certification dated October 22, 1991 issued by the petitioner's Bonds
Servicing Department stating that it had earmarked the sum of Pl,877,516.09
in cash and in LBP bonds as compensation for the parcel of lands covered by
RT-2937 in the name of respondents spouses on October 17, 1991 pursuant
to RA 6657 through voluntary offer. However, such certification was not
among those that the petitioner offered as evidence during the trial. 11 More
importantly, We had rejected the practice of earmarking funds and
opening trust accounts for purposes of effecting payment, hence, the
law12 requires payment of just compesation in cash or Land Bank of the
Philippines (LBP) bonds, not by trust account.13
The certificate of title to respondents-spouses' land was canceled and a new
certificate was issued in the government's name in December 1991 without giving
the former just compensation for such taking. We have allowed the grant of interest
in expropriation cases where there is delay in the payment of just
compensation.14 We recognize that the owner's loss is not only his property but
also its income-generating potential.15 Thus, when property is taken, full
compensation of its value must immediately be paid to achieve a fair exchange for
the property and the potential income lost.16 The rationale for imposing the
interest is to compensate the landowners for the income they would have
made had they been properly compensated for their properties at the time of
the taking.17
In Republic v. CA,18 we held:
The constitutional limitation of "just compensation" is considered to be the sum
equivalent to the market value of the property, broadly described to be the price
fixed by the seller in open market in the usual and ordinary course of legal action
and competition or the fair value of the property as between one who receives, and
one who desires to sell it, fixed at the time of the actual taking by the government.
Thus, if property is taken for public use before compensation is deposited with the
court having jurisdiction over the case, the final compensation must include
interests on its just value to be computed from the time the property is taken to the
time when compensation is actually paid or deposited with the court. In fine,
between the taking of the property and the actual payment, legal interests accrue in
order to place the owner in a position as good as (but not better than) the position
he was in before the taking occurred.
The Bulacan trial court, in its 1979 decision, was correct in imposing interests
on the zonal value of the property to be computed from the time petitioner
instituted condemnation proceedings and "took" the property in September
1969. This allowance of interest on the amount found to be the value of the
property as of the time of the taking computed, being an effective
forbearance, at 12% per annum should help eliminate the issue of the
constant fluctuation and inflation of the value of the currency over time.
Article 1250 of the Civil Code, providing that, in case of extraordinary inflation or
deflation, the value of the currency at the time of the establishment of the
obligation shall be the basis for the payment when no agreement to the contrary is
stipulated, has strict application only to contractual obligations. In other words, a
contractual agreement is needed for the efects of extraordinary inflation to be
taken into account to alter the value of the currency.19
Thus, the CA did not err in imposing interest on the just compensation which
will be detennined after the remand of the case to the SAC. The interest
68
should be computed from December 1991 up to the full payment of just
compensation and not only up to the time petitioner deposited the valuation
in 1996 as the CA ruled. The concept of just compensation embraces not only the
correct determination of the amount to be paid to the owners of the land, but also
payment within a reasonable time from its taking.20 Without prompt payment,
compensation cannot be considered "just" inasmuch as the property owner is made
to sufer the consequences 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 loss.21
The award of interest is imposed in the nature of damages for delay in payment
which, in efect, makes the obligation on the part of the government one of
forbearance to ensure prompt payment of the value of the land and limit the
opportunity loss of the owner.22 The just compensation due respondents-
spouses shall earn legal interest at the rate of 12% per annum computed
from the time of taking in December 1991 until June 30, 2013.23 And
from July 1, 2013 until full payment, the interest will be at the new legal
rate of 6% per annum, in accordance with the revisions governing the
rate of interest established by Bangko Sentral ng Pilipinas Monetary
Board Circular No. 799,24 Series of 2013.25 The amount which petitioner had
already paid respondents-spouses by virtue of the RTC's Order granting the issuance
of the Writ of Execution dated October 2, 2000 shall be deducted from the amount
of the just compensation which will be awarded after the remand of this case.
Petitioner's reliance on our Third Division's December 19, 2007 Resolution in the
case of Apo Fruits Corporation v. CA26 wherein we declared that the payment of
interest for the delay of payment cannot be applied where there is prompt and valid
payment of just compensation as initially determined, even if the amount of just
compensation was later on increased pursuant to the Court's judgment, is
misplaced. We found then that as Land Bank had deposited pertinent amounts in
favor of the landowners within fourteen months after the latter filed their complaint
for determination of just compensation with the SAC, there was no unreasonable
delay in the payment of just compensation which entitled the landowners to the
payment of 12% interest per annum on the unpaid just compensation.
However, such resolution was subsequenlty reversed and set aside in our En Banc
Resolution dated October 12, 2010 where we granted the landowners' motion for
reconsideration. We ordered the Land Bank to pay the landowners an interest at the
rate of 12% per annum on the unpaid balance of the just compensation, computed
from the date the Government took the properties on December 9, 1996, until the
respondent Land Bank fully paid the balance of the principal amount on May 9,
2008. We ruled that notwithstanding that the Land Bank had immediately paid the
remaining unpaid balance of the just compensation as finally determined by the
court, however, 12 long years had passed before the landowners were fully paid.
Thus, the landowners were entitled to legal interest from the time of the taking of
the property until the actual payment in order to place the owner in a position as
good as, but not better than, the position he was in before the taking
occurred.27 The imposition of such interest was to compensate the landowners for
the income they would have made had they been properly compensated for their
prope1iies at the time of the taking.28 Thus, we held:
Let it be remembered that shorn of its eminent domain and social justice aspects,
what the agrarian land reform program involves is the purchase by the government,
through the LBP, of agricultural lands for sale and distribution to farmers. As a
purchase, it involves an exchange of values the landholdings in exchange for the
LBPs payment. In determining the just compensation for this exchange, however, the
measure to be borne in mind is not the taker's gain but the owner's loss_since what
is involved is the takeover of private property under the States coercive power. As
mentioned above, in the value-for-value exchange in an eminent domain situation,
the State must ensure that the individual whose property is taken is not
shortchanged and must hence carry the burden of showing that the just
compensation requirement of the Bill of Rights is satisfied.
The owner's loss, of course, is not only his property but also its income-generating
potential. Thus, when property is taken, full compensation of its value must
immediately be paid to achieve a fair exchange for the property and the potential
income lost. The just compensation is made available to the property owner so that
he may derive income from this compensation, in the same manner that he would
have derived income from his expropriated property. If full compensation is not paid
for property taken, then the State must make up for the shortfall in the earning
potential immediately lost due to the taking, and the absence of replacement
prope1iy from which income can be derived; interest on the unpaid compensation
becomes due as compliance with the constitutional mandate on eminent domain
and as a basic measure of fairness.29
As in the Apo case, respondents-spouses voluntarily ofered to sell their land
pursuant to the government's land reform program, however, the valuation made by
the LBP on the land was rejected by the former for being undervalued.
Respondents-spouses had to resmi to the filing of the case with the RTC, sitting as
SAC, for the determination of just compensation of their land. It has already been 25
years but respondents-spouses have not received the full amount of the just
compensation due them, and fu1iher delay can be expected with the remand of the
case to the SAC for the recomputation of the just compensation. Thus, the long
delay entitles them to the payment of interest to compensate for the loss of income
due to the taking.30
Petitioner's claim for reimbursement of the amount it had already paid to
respondents-spouses by virtue of the writ of execution pending appeal then issued
by the SAC is not meritorious. The recomputed amount of just compensation due
the respondents-spouses shall only be determined after the remand of the case to
the SAC. It would only be that time which would establish whether the payment
made to them was more than the just compensation that they are entitled to.
There is also no basis for petitioner to claim that respondents-spouses are merely
entitled to provisionally receive its valuation of ~9,057,182.30 pending the final
determination of the just compensation. Notably, the CA's decision rejected
petitioner's valuation as well, thus:
It has been stated in a number of cases that in computing the just compensation for
expropriation proceedings, it is the value of the land at the time of the taking which
should be taken into consideration. This being so, then in determining the value of
the land for the payment of just compensation, the time of taking should be the
basis.
Therefore, until the SAC had finally detennined the just compensation due the
respondents-spouses upon remand of the case, it could not be said that the
payment made by virtue of the writ of execution pending appeal had exceeded the
value of the subject property.
Moreover, assuming arguendo that the amount paid by virtue of the execution
pending appeal would be more than the recomputed amount of the just
compensation, any excess amount should be returned to petitioner as provided
under Section 5, Rule 39 of the Rules of Court, to wit:
Section 5. Efect of reversal of executed judgment. - Where the executed judgment is
reversed totally or partially, or annulled, on appeal or otherwise, the trial court may,
on motion, issue such orders of restitution or reparation of damages as equity and
justice may warrant under the circumstances.
WHEREFORE, the dispositive portion of the Decision dated August 11, 2008 of the
Court of Appeals in CA-G.R. CV No. 00067 is hereby modified and shall now read as
follows:
WHEREFORE, in view of all the foregoing, the instant appeal is hereby GRANTED and
the assailed March 29, 2006 decision of the Regional Trial Court (RTC), 10th Judicial
Region, Branch 5, Butuan City, in Civil Case No. 4507, is hereby SET ASIDE.
Consequently, this case is remanded to the court a quo for the recomputation of just
compensation. The interest on the recomputed just compensation should be
computed from December 1991 up to the payment of the full amount of just
compensation less whatever amounts received by the respondents-spouses.
SO ORDERED.

In the case at bar, the court a quo failed to consider the value and the
character of the land at the time it was taken by the government in 1991.
Instead, the former assessed the market value of the idle portion of the
subject lot as a riceland. Yet, per LBP's Field Investigation Report (FIR)
prepared in 1990, the subject lot was not yet devoted to rice or corn at that
time, although its idle portion was classified as suitable for said crops. Also, in
computing the value of the land, the court a quo considered the land's
appreciation value from the time of taking in 1991 up to the filing of the case
in 1997 and of appellee 's potential profit from the land's suitability to rice
and corn, which We find to be contrary to the settled criterion in determining
just compensation. Hence erroneous.

The foregoing pronouncements do not, however, mean that We favor LBP's

valuation of P9,057,10.32 for the subject lot.1âwphi1 The same is found to be non-
reflective of just compensation because the Tax Declaration used by LBP in fixing the
market value of the land in its initial valuation for the year 1986, as indicated in the
FIR. Additionally, no evidence was adduced to show that LBP used the correct tax
declaration (TD), which should be the 1991 TD, in fixing the market value in its latest
computation of the land's valuation.

Notably, LBP's initial valuation of the land in 1991 was Pl,877,516.09 and
became P3,337,672.78 after recomputation in 1994, pursuant to DAR AO No.
11, Series of 1994. During the pendency of the case in court, DAR AO No. 5
series of 1998 was issued; hence, LBP accordingly recomputed its valuation
and came up with the amount of P9,057,180.32 (the amount of P.8,955,269.16
constitutes the value of the land while P101,913.14 was the value of the legal
easement).

Albeit LBP claims to have faithfully observed and applied the prescribed
formula in DAR AO No. 5, series of 1998, in its recomputation of the land's
valuation, it adduced no evidence, like the official computation sheets, to
show that the latest valuation of the land was indeed arrived at using the
prescribed formula and that the correct documents indicating the factors
enumerated in Section 17 of RA 6657 were actually considered. Hence We
cannot accpet LBP’s latest valuation as well.

Consequently, We deem it proper to remand this case to the court a quo for a
recomputation of the just compensation. x x x31

69
G.R. No. 153456 March 2, 2007
ROBERTO PADUA, Petitioner,
vs.
THE HON. COURT OF APPEALS, ATTY. DELFIN B. SAMSON, DEPARTMENT OF
AGRARIAN REFORM, and MR. TEOFILO INOCENCIO,* Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Herein Petition for Review on Certiorari under Rule 45 of the Rules of Court assails
the December 18, 2001 Decision and May 7, 2002 Resolution1 of the Court of
Appeals (CA) which dismissed the Petition for Annulment of a Final and Executory
Order of the Secretary of Agrarian Reform, docketed as CA- G.R. SP No. 59366.2
The CA summarized the facts as follows:
Private respondents Pepito Dela Cruz, et al. (Dela Cruz, et al.) were tenants of
Lot Nos. 68 and 90 of the Dolores Ongsiako Estate in Anao, Tarlac. In 1966,
upon the request of Anao Mayor Catalino Cruz (Mayor Cruz), Dela Cruz, et
al. agreed to donate said properties to the municipality on the condition that
these be used as school sites. The project did not materialize and, in 1977,
Dela Cruz, et al. asked that the properties be returned to them. However, they
found out that Mayor Cruz had distributed Lot No. 68 to Flor Labagnoy
(Labagnoy) and Lot No. 90 to Edwin Cruz (Cruz) who were each issued a
Certificate of Land Transfer (CLT).3
Upon Petition for Cancellation of CLT filed by Dela Cruz, et al., Department of
Agrarian Reform (DAR) Secretary Condrado Estrella issued an Order dated
April 19, 1982 (Estrella Order), cancelling the CLT issued to Labagnoy and
Cruz. The latter filed a Petition for Relief from Judgment for lack of due
process but the same was denied by Secretary Estrella in his Order dated
September 19, 1984. Labagnoy and Cruz appealed to the Office of the
President (OP) which dismissed the same in an Order dated May 9, 1990. Said
May 9, 1990 OP Order became final and the same was partially executed with
the restoration of Lot No. 68 in the possession of Dela Cruz, et al..4
However, during the pendency of the appeal before the OP, Cruz executed an
Affidavit of Waiver over his interest in Lot No. 90 on the basis of which DAR
Regional Office III issued an Order dated December 7, 1987 cancelling the
CLT of Cruz and declaring Lot No. 90 open for disposition.5 On November 7,
1989, then DAR Secretary Miriam Defensor Santiago issued an Order awarding
Lot No. 90 to herein petitioner Roberto Padua (Padua) who had been
occupying said property and paying the amortization thereon to the Land
Bank of the Philippines (LBP).
Aggrieved, Dela Cruz, et al., acting thru Anao Mayor Clemente Apuan, filed
with the DAR Secretary a Letter-Petition for Cancellation (Letter-Petition) of
the December 7, 1987 DAR Regional Office III Order and the November 7,
1989 DAR Order. 6
DAR Secretary Garilao granted the Letter-Petition in an Order dated July 2, 1995
(Garilao Order), to wit:
WHEREFORE, premises considered, Order is hereby issued granting the petition,
thereby cancelling the Order of Award dated November 7, 1989 issued in favor of
Roberto Padua involving Lot No. 90, Psd-185539, Ongsiako Estate and directing the
Regional Director to cause the restoration of possession of said lot in favor of the
petitioners. All payments made by Roberto Padua on account of said lot as rentals
for the use thereof are forfeited in favor of the government.
SO ORDERED.7
Accordingly, DAR Regional Director Nestor Acosta (Director Acosta) issued a
Memorandum8 dated May 9, 2000, directing herein public respondent
Provincial Agrarian Reform Officer Teofilo Inocencio (PARO Inocencio) to
implement the Garilao Order. In turn, PARO Inocencio instructed Municipal
Agrarian Reform Officer Lino Mabborang (MARO Mabborang) to issue the necessary
documents to award Lot No. 90 to Dela Cruz, et al..9
Upon being informed by MARO Mabborang of the implementation of the Garilao
Order, Padua filed with the CA a Petition for Annulment of a Final and
70
Executory Order of the Secretary of Agrarian Reform with Prayer for
Temporary Restraining Order and/or Preliminary Injunction.10 In justifying his
recourse to a Petition for Annulment, Padua claims that the DAR under Sec. 50 of
Comprehensive Agrarian Reform Law (CARL) cannot take cognizance of the petition
for cancellation because the matter involved is a civil law issue relating to the
validity of a contract of sale executed by LBP and petitioner, not an agrarian reform
matter; that cancellation can only be ordered by a court of justice, not by an
administrative agency exercising only quasi-judicial powers, more so if it is
considered that plaintif was a purchaser for value and was not a party to the
controversy between farmers/tenants and the grantees of the certificate of land
transfer; that Sec. 50 of CARL falls under the heading of Administrative Adjudication
under Chapter XII, hence, this administrative adjudication cannot be the mechanism
for resolutions of a contract; and, that this was in fact the stand of PARO Inocencio in
his 2nd Indorsement dated February 15, 1994.11
Padua also claimed lack of due process in that he was allegedly never impleaded as
a party to the Petition for Cancellation of CLT nor furnished a copy of the Letter-
Petition but that he became aware of the Garilao Order only when it was about to
be implemented.12
On December 18, 2001, the CA issued the herein assailed Decision, dismissing
the Petition for Annulment for being the wrong mode of questioning the
Garilao Order. It held that Rule 47 applies only to final judgments and orders of
Regional Trial Courts (RTCs) in civil cases and not to orders issued by the DAR
Secretary.13 The CA also affirmed the Garilao Order, holding that then DAR
Secretary Garilao had authority to resolve the Letter-Petition as it involved an
agrarian dispute.14 The CA also rejected the contention of Padua that he was not
accorded due process in view of evidence on record that he was notified of the
proceedings on the Letter-Petition but he chose not to participate therein.15
Padua filed a Motion for Reconsideration16 which the CA denied in its
May 7, 2002 Resolution.17
Hence, the present Petition on the following grounds:
The Court of Appeals committed a grave and reversible error when it held that Rule
47 of the Rules of Civil Procedure may not be availed of for assailing an Order of the
Secretary of Agrarian Reform.18
The Court of Appeals committed reversible error in not holding that the Department
of Agrarian Reform acted without jurisdiction.19
We find that the CA correctly dismissed the Petition for Annulment and
affirmed the Garilao Order.
We reiterate that a petition for annulment of judment under Rule 47 of the Rules of
Court may be availed of against final judgments and orders rendered by either RTCs
in civil actions20 or Municipal Trial Courts21 (MTCs).22 Final judgments or orders of
quasi-judicial tribunals such as the National Labor Relations Commission,23 the
Ombudsman,24 the Civil Service Commission,25 and the OP26 are beyond the
reach of a petition for annulment under Rule 47. An order of the DAR Secretary
issued in the exercise of his quasi-judicial powers is also outside its scope. Justice
Jose C. Vitug, in Macalalag v. Ombudsman,27 explained the rationale behind the
limited application of Rule 47, to wit:
The right to appeal is a mere statutory privilege and may be exercised only in the
manner prescribed by, and in accordance with, the provisions of law. There must
then be a law expressly granting such right. This legal axiom is also applicable and
even more true in actions for annulment of judgments which is an exception to the
rule on finality of judgments. 28
In the present case, neither Republic Act (R.A.) No. 665729 nor R.A. No.
790230 allows a petition for annulment of a final DAR decision or order. Section
6131 of R.A. No. 6657 provides that a DAR decision or order be reviewable by the
CA in accordance with the Rules of Court. In turn, the Rules of Court, consistent with
Supreme Court Administrative Circular No. 1-95 and R.A. No. 7902, prescribes under
Rule 4332 that the mode of appeal from decisions or orders of DAR as a quasi-
judicial agency is by petition for review to the CA.33 Padua’s recourse to a Petition
for Annulment of the Garilao Order, rather than a petition for review, was therefore
fatally infirm.
Even if Padua’s Petition for Annulment had been treated by the CA as a A Motion for Reconsideration was filed but it was denied on August 12, 1996. [The]
petition for review, it would still have failed. appeal taken to the Office of the President was dismissed May 25, 1998, and the
motion for reconsideration thereof was denied on January 22, 1999.
Section 50 of R.A. No. 6657 vests in DAR the following quasi-judicial power:
Considering per available records, that no further action was taken, hence, it has
Section 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with the already become final and executory and may be [sic] now be implemented.
primary jurisdiction to determine and adjudicate agrarian reform matters and shall
have exclusive original jurisdiction over all matters involving the implementation of x x x x41 (Emphasis added)
agrarian reform except those falling under the exclusive jurisdiction of the
Thus, any defect in due process was cured by the fact that Padua had filed a Motion
Department of Agriculture (DA) and the Department of Environment and Natural
for Reconsideration and an Appeal to the OP from the Garilao Order.42
Resources (DENR).
WHEREFORE, the petition is DENIED for lack of merit. The Decision dated December
It shall not be bound by technical rules of procedure and evidence but shall proceed
18, 2001 and Resolution dated May 7, 2002 of the Court of Appeals are AFFIRMED
to hear and decide all cases, disputes, or controversies in a most expeditious
manner, employing all reasonable means to ascertain the facts of every case in No costs.
accordance with justice and equity and the merits of the case. Towards this end, it
shall adopt a uniform rule of procedure to achieve a just, expeditious and SO ORDERED.
inexpensive determination for every action or proceeding before it.

On August 30, 2000, DAR adopted Administrative Order No. 06-0034 or the
Rules of Procedure for Agrarian Law Implementation Cases. Section 2 thereof
states:

Section 2. Cases Covered. – These Rules shall govern cases falling within the
exclusive jurisdiction of the DAR Secretary which shall include the following:

(a) Classification and identification of landholdings for coverage under the

Comprehensive Agrarian Reform Program (CARP), including protests or opposition
thereto and petitions for lifting of coverage;

(b) Identification, qualification or disqualification of potential farmer-beneficiaries;

(c) Subdivision surveys of lands under CARP;

(d) Issuance, recall or cancellation of Certificates of Land Transfer (CLTs) and CARP
Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decreee
No. 816, including the issuance, recall or cancellation of Emancipation Patents
(EPs) or Certificates of Land Ownership Awards (CLOAs) not yet registered with the
Register of Deeds;

x x x x (Emphasis ours)

In the disputed July 2, 1995 Order, then DAR Secretary Garilao cancelled the
award to Padua of Lot No. 90, thereby declaring the latter not qualified to
acquire the property as an agrarian reform beneficiary.35 Said Order was
therefore issued by Sec. Garilao in the exercise of his power under Section 50
of R.A. No. 6657 and Section 2 (b) of Administrative Order No. 06-00.

Padua insists, however, that his status in relation to Lot No. 90 was no longer
that of a mere potential agrarian reform farmer-beneficiary but a civil law
vendor dealing directly with the LBP in the payment of amortizations on the
property.36 That view is incorrect. The statutory mechanism for the
acquisition of land through agrarian reform requires full payment of
amortization before a farmer-beneficiary may be issued a CLOA or EP, which,
in turn, can become the basis for issuance in his name of an original or a
transfer certificate of title.37 As Padua himself admitted that he is still paying
amortization on Lot No. 90 to LBP, his status in relation to said property
remains that of a mere potential farmer-beneficiary whose eligibilities DAR
may either confirm or reject. In fact, under Section 2 (d) of Administrative
Order No. 06-00, DAR has authority to issue, recall, or cancel a CLT, CBC, EP,
or CLOA issued to potential farmer-beneficiaries but not yet registered with
the Register of Deeds.38

As to the claim of Padua that he was not accorded due process in the cancellation of
the Santiago Order which awarded Lot No. 90 in his favor, this is belied by his own
Annex "A" in support of his Urgent Reiteration of Application for Restraining Order
or for Observance of Judicial Courtesy as Mandated by Eternal Gardens versus Court
of Appeals.39 Annex "A"40 is the letter of MARO Mabborang informing Padua of the
implementation of the Garilao Order. Attached to Annex "A" is the May 9, 2000
Memorandum of Director Acosta, which reads:

We are transmitting herewith the Order dated July 2, 1995 issued by the Office of
the DAR Secretary, in the above entitled case.

71
ESTATE OF THE LATE ENCARNACION VDA. DE G.R. No. 148777 On April 19, 1961, Panlilio entered into a contract of lease over the said
PANLILIO, represented by GEORGE LIZARES, landholdings with Paulina Mercado, wife of Panlilios nephew. The contract of
lease was subsequently renewed on October 13, 1964[14] and September 18,
Petitioner,
1974,[15] covering agricultural years from 1961 to 1979.
- versus -

GONZALO DIZON, RICARDO GUINTU, ROGELIO
MUNOZ, ELISEO GUINTU, ROBERTO DIZON,
EDILBERTO CATU, HERMINIGILDO FLORES, CIPRIANO
DIZON, JUANARIO MANIAGO, GORGONIO CANLAS,
ANTONIO LISING, CARLOS PINEDA, RENATO GOZUN,
ALFREDO MERCADO, BIENVENIDO MACHADA, and
the REGIONAL DIRECTOR of the DEPARTMENT OF
AGRARIAN REFORM, REGION III,
Respondents.
x-------------------------------------------x
REYNALDO VILLANUEVA, CENON GUINTO,
CELESTINO DIZON, CARMELITA VDA. DE DAVID,
FORTUNATO TIMBANG, OSCAR SANTIAGO,
CELESTINO ESGUERRA, ANTONIO DIZON, and
TEODULO DIZON,
Petitioners,
- versus -
COURT OF APPEALS and GEORGE LIZARES,
Respondents.
Present: Sometime in 1973, pursuant to the OLT under PD 27, the Department of
Agrarian Reform (DAR) issued thirty eight (38) Certificates of Land Transfer
(CLTs) toCARPIO,
Panlilios tenants. The tenant-awardees were made defendants in the
QUISUMBING, J., Chairperson,
instant consolidated complaints filed by petitioner Lizares.
CARPIO MORALES,
TINGA, and
On November 26, 1973, lessee Paulina Mercado filed a letter-complaint with
VELASCO, JR., JJ.
the DAR questioning the issuance of CLTs to Panlilios tenants, alleging,
among others, that the DAR should not have issued the CLTs since the land
involved was principally being planted with sugar and was outside the
coverage of PD 27. She claimed that respondents surreptitiously
planted palay (rice plant) instead of sugar in order to bring the land within
the purview of the law. After proper investigation, the DAR concluded that
the CLTs were properly and regularly issued.
Paulina Mercado likewise filed a similar complaint with the Court of Agrarian
Relations (CAR) at San Fernando, Pampanga, docketed as CAR Case No.
1649-P74.
On December 4, 1976, the tenants of the portion of the land planted with
G.R. No. 157598
sugar cane petitioned the DAR to cause the reversion of their sugarland to
Promulgated riceland so that it may be covered by the Agrarian Reform Law. The petition
October 18, 2007 was with the conformity of Panlilio.

-------------------------------------------------------------------------------------
Thus, on January 12, 1977, Panlilio executed an Affidavit, partly quoted as
----x
follows:
DECISION

1. That I am the owner of an agricultural landholding

VELASCO, JR., J.:
Did the owner of two (2) lots by a subsequent affidavit validly and legally
revoke the first affidavit voluntarily surrendering said lots for land acquisition
under the Comprehensive Agrarian Reform Law? The answer will determine
the rights of the parties in the instant petitions the heirs of the lot owner vis--
vis the tenants declared to be beneficiaries of the Operation Land Transfer
(OLT) under Presidential Decree No. (PD) 27.[1]
The Case
Before us are two petitions. The first is a Petition for Review on
Certiorari[2] under Rule 45 docketed as G.R. No. 148777, which seeks to set
aside the November 29, 2000 Amended Decision[3] of the Court of Appeals
(CA) in CA-G.R. SP No. 47502, which affirmed the August 7, 1997
Decision[4] of the Department of Agrarian Reform Adjudication Board
(DARAB) in DARAB Case Nos. 4558-4561; and the June 26, 2001
Resolution[5] disregarding the Motion for Reconsideration[6] of said
Amended Decision. The other is a Petition for Certiorari and
Mandamus[7] under Rule 65 docketed as G.R. No. 157598, which seeks to set
aside the November 14, 2002 CA Resolution[8] which denied petitioners
Motion for Entry of Judgment,[9] and the January 24, 2003 CA
Resolution[10] likewise denying petitioners Motion for Reconsideration.[11]
Through our August 27, 2003 Resolution,[12] these cases were consolidated
as they arose out of the same factual milieu.
The Facts
Encarnacion Vda. De Panlilio is the owner of the disputed landholdings over a
vast tract of land, with an aggregate area of 115.41 hectares called Hacienda
Masamat located in Masamat, Mexico, Pampanga covered by Transfer
Certificates of Title (TCT) Nos. 3510, 3513, 3514, 3515, 3522, 3523, 3524, 3525,
3526, 3528, 3530, 3531, 3532, 3533, RT-499 (9191), and RT-500 (11670),
[13] all of the Pampanga Registry of Deeds.
situated [in] Mexico, Pampanga, with an area of 115.4
hectares, more or less, dedicated at present to the
production of palay and sugarcane crops;
2. That I have been informed that 50.22 hectares
comprising the portion dedicated to palay crop have
been placed under the provisions and coverage of P.D.
No. 27 and that Certificates of Land Transfer have been
issued to the tenant-farmers thereon;
3. That as owner of the abovementioned property, I
interpose no objection to the action taken by the
Department of Agrarian Reform in placing the aforesaid
portion dedicated to palay crop within the coverage of
P.D. No. 27;
4. That lately, all the tenants of my said property
including those in the sugarcane portions, have filed a
petition dated December 4, 1976 with the Honorable
Secretary Conrado F. Estrella, Secretary of Agrarian
Reform, requesting for the reversion of the sugarcane
portion of my property adverted to [the] palay land
which is the original classification of my entire subject
property;
5. That the aforesaid petition dated December 4, 1976 of
the tenants of my property which was filed with the DAR
carries my written conformity;
6. That it is my desire that my entire subject property
which is referred to as Hacienda Masamat be placed

72
 under the coverage of P.D. 27 without exception and
that thereafter the same be sold to tenant-
petitioners.[16] (Emphasis supplied.)
On January 20, 1977, by virtue of the said Affidavit, the DAR Secretary,
through Director Gaudencio Besa, ordered Director Severino Santiago,
Regional Director of Region III, San Fernando, Pampanga, to distribute all
land transfer certificates, in view of the desire of Encarnacion Vda. de Panlilio
to place her property under the Land Transfer Program of the government.
On the basis of the action of the DAR Secretary, the CAR, on March 17, 1978,
issued an Order dismissing the complaint of Paulina Mercado (lessee) in CAR
Case No. 1649-P74, thus:
With this development, the resolution of the principal
issue in the instant case has become moot and academic,
it being already settled in the DAR proceedings the
placement of the land in question under the land transfer
program of the government. Therefore, the instant case
should be dismissed. Necessarily, all pending incidents
should be deemed disposed of. [17]
On December 29, 1986, Panlilio died.
Thereafter, sometime in 1993, the DAR issued Emancipation Patents (EPs) to
the following tenants of Panlilio:
EP Nos.
Hermenegildo Flores 690774
On February 28, 1994, petitioner Lizares filed his first complaint with the
Provincial Agrarian Reform Adjudicator (PARAD), Region III, San Fernando,
Pampanga, docketed as DARAB Case No. 638 P94,[20] for annulment of
coverage of landholdings under PD 27 and ejectment against Reynaldo
Villanueva, et al. who filed their Answer with Counterclaim[21] on April 12,
1994.
On April 10, 1995, petitioner filed with the PARAD three more complaints for
cancellation of EPs, docketed as DARAB Case Nos. 933-P95,[22] 934-P95,
[23] and 935-P95,[24] against the rest of respondents who filed their motions
to dismiss[25] on grounds of lack of cause of action and lack of jurisdiction.
On July 13, 1995, the PARAD denied the motions.[26] Respondents then filed
their Answer with Counterclaim.[27]
Upon petitioners motion, all the cases were consolidated. The PARAD then
directed the parties to submit their respective position papers,[28] and,
thereafter, considered the cases submitted for decision.
The three (3) complaints filed in 1995 for cancellation of EPs have the
following defendants: (1) in DARAB Case No. 933-P95, Herminigildo Flores
and the Regional Director, DAR, Region III; (2) in DARAB Case No. 934-P95,
Celestino Dizon, Gonzalo Dizon, Roberto Dizon, and the Regional Director,
DAR, Region III; and (3) in DARAB Case No. 935-P95, Cipriano Dizon, Antonio
Dizon, Teodulo Dizon, Juanario Maniago, Celestino Esguerra, Florentino
Lapuz, Gorgonio Canlas, Antonio Lising, Carlos Pineda, Renato Gozun, Alfredo
Mercado, Romeo Pangilinan, Jose Serrano, Wenceslao Pangilinan, Guillermo
del Rosario, Candido Timbang, Bienvenido Mechada, and Arsenio Legaspi,
and the Regional Director, DAR, Region III.

143627
Celestino Dizon 690960 Thus, aside from public respondent DAR Regional Director, Region III, DARAB
Case No. 638-P94 had 15 defendants, DARAB Case No. 933-P95 had a sole
683355
defendant, DARAB Case No. 934-P95 had three defendants, and DARAB Case
45390 No. 935-P95 had 18 defendants. All the four (4) consolidated cases were
Gonzalo Dizon 680524 against 37 defendants.
Roberto Dizon 690758
Cipriano Dizon 45260 The Ruling of the PARAD in DARAB Case
45256 Nos. 638-P94, 933-P95, 934-P95 and 935-P95
Antonio Dizon 681072 On November 14, 1995, the PARAD rendered a Joint Decision[29] dismissing
petitioner Lizares complaint on the ground that the subject landholdings have
Teodulo Dizon 45326
been properly placed under the coverage of PD 27 through the January 12,
Juanario Maniago 143207 1977 Affidavit[30] of Panlilio, unequivocally placing her entire property within
Celestino Esguerra 45265 the coverage of the OLT. In addition, the PARAD relied on the report of the
45219 DAR and the Bureau of Lands personnel that the subject landholding is
devoted to palay. And, finally, the PARAD applied the equitable remedy of
Florentino Lapuz 690759
laches, in that Panlilio failed during her lifetime to bring to the attention of
45259 the DAR and CAR her February 3, 1977 Affidavit[31] ostensibly revoking her
Gorgonio Canlas 143508 previous January 12, 1977 Affidavit.
Carlos Pineda 197097
45254 The Ruling of the DARAB in DARAB Case Nos. 4558-4561
Renato Gozun 143208 (DARAB Case Nos. 638-P94, 933-P95, 934-P95 and 935-P95)
Romeo Pangilinan 475341 Aggrieved, petitioner Lizares appealed the PARAD decision before the
Jose Serrano 475340 DARAB, which, on August 7, 1997, rendered a Decision[32] affirming the
PARAD decision.
Wenceslao Pangilinan 476572
Guillermo del Rosario 475339
The DARAB likewise disregarded petitioner Lizares Motion for
Candido Timbang 143931
Reconsideration[33] of the August 7, 1997 Decision.
45262
45257
Prior to the issuance of the August 7, 1997 DARAB Decision, petitioner Lizares
Arsenio Legaspi 45266[18] and defendant-appellees Wenceslao Pangilinan, Romeo Pangilinan, Jose
Serrano, and Guillermo del Rosario filed their February 10, 1997 Joint Partial
Subsequently, in June 1994, the Bacolod City Regional Trial Court (RTC), Motion to Dismiss[34] with the DARAB, seeking dismissal of their respective
Branch 49 appointed petitioner George Lizares as executor of the estate of claims in DARAB Case No. 4561 (DARAB Case No. 935-P95) based on an
Panlilio.[19] Records show that petitioner Lizares is the son of the late Jesus Affidavit of Cancellation of Lis Pendens Annotation of TCT Nos. 14321, 14322,
Lizares, Panlilios administrator of Hacienda Masamat during her lifetime. 14323, and 14324, all of the Pampanga Register of Deeds,[35] which was
executed by petitioner Lizares. Apparently, petitioner Lizares received from a
73
certain Ms. Petronila Catap the amount of PhP 1,356,619 for the settlement of
DARAB Case No. 4561 (DARAB Case No. 935-P95) against the
abovementioned defendant-appellees.[36]
Earlier on, petitioner Lizares filed his April 19, 1996 Motion to Withdraw
Appeal in favor of defendant-appellees Reynaldo Villanueva, Cenon Guinto,
Carmelita Vda. de David, Oscar Santiago, Celestino Dizon, Fortunato Timbang,
and Florentino Lapuz in DARAB Case No. 4558 (DARAB Case No. 638-P94);
defendant-appellee Celestino Dizon in DARAB Case No. 4559 (DARAB Case
No. 933-P95); and defendant-appellees Antonio Dizon, Teodulo Dizon,
Celestino Esguerra, Florentino Lapuz, and Candido Timbang in DARAB Case
No. 4561 (DARAB Case No. 935-P95), as said defendant-appellees agreed to
settle and compromise with petitioner Lizares. The motion was however
resisted by other defendant-appellees through a May 27, 1996 Counter-
Motion to the Plaintiff-Appellant Motion to Withdraw Appeal,[37] on the
ground that a piece-meal withdrawal is not proper as the matter in
controversy is common and the same to all.
Unfortunately, the Motion to Withdraw Appeal was not resolved as petitioner
Lizares did not attend the DARAB scheduled hearings. Thus, the August 7,
1997 Decision was subsequently promulgated in favor of all defendant-
appellees.
Petitioner Lizares elevated the DARAB consolidated cases to the CA for review
in CA-G.R. SP No. 47502 under Rule 43 of the Rules of Court.
The Ruling of the Court of Appeals
The April 11, 2000 CA Decision
At the outset, the CA saw it differently.
On April 11, 2000, the CA rendered a Decision sustaining petitioners position
and granted relief, thus:
WHEREFORE, the petition is GRANTED. The decision of
the Department of Agrarian Reform Adjudication Board
affirming the decision of the Provincial Agrarian Reform
Adjudication Board, Region III, San Fernando, Pampanga
is REVERSED and SET ASIDE. The Certificates of Land
Transfer issued to private respondents insofar as they
pertain to sugarlands are hereby
declared NULL and VOID.[38]
The CA primarily anchored its ruling on Panlilios February 3, 1977 Affidavit
ostensibly revoking her January 12, 1977 Affidavit and ascribed error to both
the PARAD and DARAB in ignoring Panlilios second affidavit. Moreover, it
relied on the November 26, 1973 letter-complaint of Paulina Mercado to the
DAR Secretary and the CAR Resolution in CAR Case No. 1649-P74, that the
subject landholding in question is principally devoted to the production of
sugar cane as buttressed by the report and findings of Atty. Gregorio D.
Sapera, Legal Officer III of the DAR Central Office.
The November 29, 2000 CA Amended Decision
Unconvinced, Reynaldo Villanueva, et al. interposed a Motion for
Reconsideration or in the alternative, Motion to Remand for New Trial [39] of
said Decision, where they contended that:
1. Petitioners complaints should have been
dismissed for his failure to implead therein
indispensable parties, namely the Land Bank of
the Philippines which paid Panlilio the amortizations
74
on the land and the third persons who purchased
the landholdings from the tenants;
2. [The CA] disturbed and reversed the findings
of fact by the PARAD and the DARAB supported by
substantial evidence. x x x
3. It is not the job of the appellate court to sieve
through the evidence considered by the
administrative agency in adjudicating the case
before it, following the doctrine of primary
jurisdiction.x x x
4. [The CA] violated the principle of res
judicata in reversing the CAR resolution dismissing
the complaint in Case No. 1649-P74 rendered
twenty-two years ago. Likewise, estoppel and laches
bar the instant actions. x x x
5. Lastly, the petition should be dismissed in
favor of Romeo Pangilinan, Wenceslao Pangilinan,
Jose Serrano and Guillermo del Rosario in view of
the compromise agreement in DARAB Case No.
4561 between them and petitioner herein. They
submitted, as proof, their joint motion to dismiss
the complaint executed on February 10, 1997 and
petitioner Lizares receipt from them of
P1,356,619.00 as consideration for the dismissal of
his complaints against them.[40]
After considering the above contentions together with petitioner Lizares
Comment on the Motion for Reconsideration dated May 2, 2000 with Motion
for Correction of the Dispositive Portion of the Decision,[41] respondents
Reply[42] to said comment, and petitioners Rejoinder,[43] the appellate court
rendered on November 29, 2000 the assailed Amended Decision on a vote of
3-2, the dispositive portion of which reads:
WHEREFORE, respondents motion for reconsideration of
Our Decision is hereby GRANTED. The petition is ordered
DISMISSED and the challenged DARAB decision is
AFFIRMED. Costs against petitioner.[44]
In reversing its earlier April 11, 2000 Decision, the CA concluded that the
February 3, 1977 Affidavit was not executed by Panlilio, ratiocinating that if
she indeed made the second affidavit which purportedly repudiated her
earlier January 12, 1977 Affidavit, the natural course of action to take was for
her to submit the second affidavit to the DAR to exclude the majority of her
landholdings planted with sugar cane from the coverage of the OLT under PD
27. Her failure to effectuate the removal of her land from the Comprehensive
Agrarian Reform Program (CARP) coverage for nine (9) years until her death
on December 29, 1986 led the court a quo to believe that the second affidavit
was not genuine. Moreover, Jesus Lizares, Panlilios administrator and father
of petitioner Lizares, likewise did not take any action, in accordance with the
second affidavit showing that he was not aware of such affidavit of
revocation. The CA even doubted petitioner Lizares contention that the
second affidavit was submitted to the DAR and CAR but was not acted upon
for such averment was not substantiated.
The appellate court also found Panlilio and her successors-in-interest guilty of
laches, pointing out that aside from the alleged second affidavit of
revocation, there was no indication of Panlilios intention to recover the
disputed landholdings.
On the issue of fraud and collusion on the part of the DAR personnel, the CA under P.D. No. 27 in the light of the affidavit dated
found that no preponderance of evidence was evinced to prove the January 12, 1977;
accusation.

3. Whether or not in its 29 November 2000 Amended

In fine, the CA recognized and applied the principle of res judicata to the Decision, the Court of Appeals erred gravely in finding
March 17, 1978 CAR Order rendered more than 20 years ago, holding that Encarnacion L. Vda. de Panlilio and petitioner guilty of
the resolution of said court placing the entire landholdings in question under laches or estoppel;
the coverage of PD 27 had long become final and executory.

4. Whether or not res judicata applies in the instant case;

Petitioner Lizares plea for recall of the assailed Amended Decision was
rejected through the assailed June 26, 2001 CA Resolution.[45]
Petition for review on certiorari under G.R. No.
148777
5. Whether or not in its 29 November 2000 Amended
Decision, the Court of Appeals erred gravely in failing to
rule that there was fraud and collusion on the part of the
respondents in the coverage of the subject parcels of
land;

Thus, we have this Petition for Review on Certiorari against only 15 private
respondents from the original defendants below, namely: Gonzalo Dizon, 6. Whether or not the Court of Appeals acted with grave
Ricardo Guintu, Rogelio Munoz, Eliseo Guintu, Roberto Dizon, Edilberto Catu, abuse of discretion in declaring the transfer made by the
Herminigildo Flores, Cipriano Dizon, Juanario Maniago, Gorgonio Canlas, private respondents to third persons valid;
Antonio Lising, Carlos Pineda, Renato Gozun, Alfredo Mercado, and
Bienvenido Machada.
7. Whether or not forum-shopping or a false certification
of non-forum shopping [is present] here; and
Petition for certiorari under G.R. No. 157598

8. Whether or not the instant petition complies with the

Consequent to the filing of the Petition for Review on Certiorari by petitioner nature and requisites of an appeal by certiorari under
Lizares, on January 28, 2002, the other original defendants in the consolidated Rule 45.[51]
cases before the PARAD and DARAB, who were not made respondents in G.R.
No. 148777, namely: Reynaldo Villanueva, Cenon Guinto, Celestino Dizon,
In G.R. No. 157598, petitioners raise the sole issue of whether the
Carmelita Vda. de David, Florentino Lapuz, Fortunato Timbang, Oscar
petitioners are entitled to an entry of judgment.[52]
Santiago, Candido Timbang, Celestino Esguerra, Antonio Dizon, and Teodulo
Dizon, filed before the CA a Motion for Entry of Judgment[46] of the
November 29, 2000 Amended Decision in CA-G.R. SP No. 47502 based on the The Courts Ruling
out-of-court settlement during the pendency of the case. On July 4, 2002, a
second Motion for Entry of Judgment[47] with the same averments was filed
G.R. No. 148777
reiterating their plea for execution.

Before we go to the substantial issues, we tackle first the procedural issues

The November 14, 2002 CA Resolution[48] denied their motions for entry of
raised in the last two issues in G.R. No. 148777 on whether the instant
judgment. A Motion for Reconsideration[49] having been turned down
petition complies with the requirements of Rule 45 and whether forum
through the January 24, 2003 CA Resolution,[50] petitioners now register the
shopping is present.
instant Petition for Certiorari and Mandamus in G.R. No. 157598, assailing the
aforesaid Resolutions for grave abuse of discretion.
Petition complied with requisites for review on certiorari
The Issues
Private respondents contend that the grounds relied upon by petitioner are
factual in nature and thus outside the purview of a review on certiorari by this
In G.R. No. 148777, petitioner Lizares presents the following issues for our
Court. Petitioner disagrees and posits that the petition raises issues of both
consideration:
fact and law which are so intimately intertwined and that issues of law
permeate the controversy between the parties.
1. Whether or not in its 29 November 2000 Amended
Decision, the Court of Appeals erred gravely in reversing
We find for petitioner. The rule is clear. Questions of facts are proscribed by
its ruling in the 11 April 2000 Decision on the import and
Rule 45. A question of law exists when the doubt or controversy concerns the
significance of the second affidavit executed by
correct application of law or jurisprudence to a certain set of facts; or when
Encarnacion L. Vda. de Panlilio revoking or repudiating
the issue does not call for an examination of the probative value of the
her first affidavit (by which she purportedly agreed to
evidence presented, the truth or falsehood of facts being admitted. A
have her land at Hacienda Masamat, which was
question of fact exists when the doubt or difference arises as to the truth or
dedicated to sugarcane, placed under the coverage of
falsehood of facts or when the query invites calibration of the whole evidence
P.D. No. 27);
considering mainly the credibility of the witnesses, the existence and
relevancy of specific surrounding circumstances, as well as their relation to
2. Whether or not in its 29 November 2000 Amended
each other and to the whole, and the probability of the situation. [53]
Decision, the Court of Appeals erred gravely in setting
aside the 11 April 2000 Decisions ruling that the land in
question being planted with sugarcane is not covered by The rule is subject to exceptions. One such exception exists in this case. Mixed
P.D. No. 27, by instead declaring that the fact that land is questions of law and facts are raised pertaining to the applicability of PD 27
sugarland has become inconsequential to the coverage on a large portion of subject landholdings that were planted with sugar cane,

75
which would have been otherwise exempt, but were voluntary waived
through an affidavit by the lot owner to be placed under the OLT pursuant to
said law; the import and significance of the purported affidavit of revocation;
and, the interpretation of Executive Order No. (EO) 228[54] in relation to
subsequent land transfer made by the farmer-beneficiaries.
At the very least, the instant petition complies with the requisites of Rule 45,
particularly Section 6, as we have given the instant petition due course.[55]
No forum shopping
Private respondents argue that petitioner Lizares is guilty of forum shopping
for having pursued other civil cases allegedly involving the same subject
matter and on the same grounds raised in this petition. Petitioner Lizares
counters that there is no forum shopping, first, as the instant petition is a
mere continuation of a pending action, that is, the consolidated cases filed
with the PARAD; second, the causes of action and issues raised in the other
civil cases lodged with the RTC were different.
Respondents postulation cannot be entertained.
Private respondents failed to furnish us copies of portions of the relevant
records of the other civil cases instituted by petitioner Lizares needed to
determine the existence of forum shopping. Absent such necessary pleadings,
we are constrained to take petitioners assertion at face value that the other
cases, particularly Civil Case Nos. 11342, 11344, 11345, 11346 and 11347, filed
before the RTC differ from the instant case as to the issues raised, the reliefs
prayed for, and the parties impleaded.
Time and again, the court has reminded prospective petitioners and lawyers
alike that it is necessary that they attach to the petition under Rule 45 all the
material portions of the case records of the lower courts or quasi-judicial
bodies which at one time or another had adjudicated the case or
complaint. These documents are required to support the grounds presented
in the petition under Rule 45.[56] Any decision, order, pleading, or document
forming parts of the records that is relevant or important to the petition
should be appended to it so that the court, in reviewing the petition, will have
easy access to these papers. More importantly, the submission will obviate
delay as the court can readily decide the petition without need of the
elevation of the records of the court or quasi-judicial body a quo.
Now we move on to the substantive issues.
Main Issue: Genuineness and authenticity
of the February 3, 1977 Affidavit
The pith of the dispute is whether or not the February 3, 1977 affidavit of the
lot owner, the late Encarnacion Vda. de Panlilio, is genuine or authentic.
We rule in the negative.
In a slew of cases, the principle is firmly entrenched in this jurisdiction that
this Court is not a trier of facts, and is not tasked to calibrate and assess the
probative weight of evidence adduced by the parties during trial all over
again.[57] However, in rare occasions, exceptions are allowed. One exception
is when there are competing factual findings by the different triers of fact,
such as those made by the quasi-agencies on the one hand and the CA on
the other, this Court is compelled to go over the records of the case, as well
as the submissions of the parties, and resolve the factual issues.[58] In this
case, however, there is coalescence in the findings of the appellate court with
that of the two quasi-judicial agencies below the PARAD and DARAB on the
issue of the authenticity of the second Panlilio Affidavit.
76
It being a question of fact, we find no reason to disturb the findings and
conclusions of the court a quo in its questioned November 29, 2000
Amended Decision holding that the challenged February 3, 1977 Panlilio
Affidavit is not an authentic document. We quote with approval the factual
findings of the CA which completely gave full accord and affirmed the
findings of the PARAD and DARAB, viz:
After assessing the grounds raised by respondents in
their motion for reconsideration and a meticulous review
of the records, We are now in serious doubts as to the
correctness of Our Decision. Our reasons are:
First, according to petitioner Lizares, Panlilios second
affidavit (revoking her first affidavit) upon which this
Court anchors its assailed Decision, was executed as early
as February 2, 1977. If it were true, Panlilios natural
reaction was to submit her second affidavit or affidavit of
revocation to the DAR in order to exclude her
landholdings from the coverage of the Operation Land
Transfer under P.D. 27. Significantly, Panlilio died
on December 29, 1986. She had therefore, nine (9) years
from the date of execution of her second affidavit, within
which to have her land excluded by the DAR from such
coverage considering that it was principally planted
[with] sugar and that she was misled by DAR lawyer, Atty.
Pepito Sanchez, into signing her first affidavit. But she
did not. Petitioners father, Jesus Lizares, was her
administrator. Yet he did not also take any action for
apparently he was not aware of such affidavit of
revocation.
Moreover, in her second affidavit, Panlilio specifically
stated:
That another reason for my desire not to place
my entire property referred to as Hacienda
Masamat in Mexico, Pampanga, under P.D. 27
is the fact that the said Hacienda Masamat is
leased to my nephews wife, Mrs. Paulina Y.
Mercado, and the lease contract I executed in
her favor covering my said Hacienda Masamat
is still subsisting and in force and will expire
only after the agricultural crop year 1978-1979;
If Panlilio indeed signed her affidavit of revocation, why
did she not inform her niece Paulina about it in order to
protect her right as a lessee? It must be remembered that
at that time, the latters complaints (for cancellation of
CLTs) against the tenants of Panlilio were still pending in
the DAR and the CAR. Had Panlilio given Paulina a copy
of such second affidavit, she could have brought it to the
attention of the CAR and the DAR. Certainly, the subject
landholdings could not have been placed entirely under
Operation Land Transfer. We need not emphasize here
that being a lessee, Paulina would not want to part with
her Aunts landholdings.
Out of the blue, the second affidavit surfaced only in
1994 and 1995 when petitioner Lizares brought the
instant actions against Panlilios tenants or after eighteen
(18) years from the date of its alleged execution. At this
juncture, We can only conclude without hesitation that
Panlilio did not execute the second affidavit.
 Petitioner alleged in his position paper that the same
affidavit of revocation was submitted to the DAR and the
CAR, but they were not acted upon because of the
dismissal of the cases for cancellation of CLTs filed by
Paulina Mercado. Petitioners claim is a mere allegation. It
has not been substantiated. Again, if it were true, why did
Panlilio and Paulina fail to pursue any further action?[59]
We respect and accord finality to the aforequoted findings of facts of the CA,
being the tribunal tasked to undertake a final review of the facts of the case
subject of course to certain tolerated exceptional situations. Once again we
reiterate the prevailing rule that the findings of fact of the trial court,
particularly when affirmed by the Court of Appeals are binding upon this
Court.[60]
Second Issue: There is valid waiver through
the January 12, 1977 Affidavit
The CA likewise did not err in reversing its April 11, 2000 Decision that the
subject land was properly covered by PD 27 since Panlilio surrendered said lot
to the DAR for coverage under PD 27 pursuant to her January 12, 1977
Affidavit. The non-existence of the February 3, 1977 Affidavit supports the
inclusion of the entire lot in the CARP of the Government.
On the other hand, petitioner Lizares argues that there was no valid waiver
under PD 27.
We are not convinced.
Considering the non-revocation of the January 12, 1977 Panlilio Affidavit,, the
CA considered the land of Panlilio planted with sugar cane as falling under
the coverage of PD 27, thus:
[W]hile the proceedings in the CAR tend to establish the
land as principally sugarland, hence outside the coverage
of P.D. 27, still, Panlilios consent to have the entire land
covered by the said law as alleged in her first affidavit,
cannot be construed as a violation of its provisions. In
fact, in executing the said affidavit, she did not defeat,
nor contravene the express intent of the law to
emancipate her tenants from the bondage of the soil. In
doing so, she even supported its implementation.
In Our challenged Decision We found that the subject
land was principally planted [with] sugar and therefore
outside the pale of P.D. 27. But We overlooked the fact
that Panlilio in her first affidavit, which was not validly
revoked, expressed her desire to have her entire
landholdings placed within the coverage of Operation
Land Transfer. To be sure, the fact that Panlilios land is
sugarland has become inconsequential in the light of her
first affidavit.[61]
We agree with the CA.
While PD 27 clearly applies to private agricultural lands primarily devoted to
rice and corn under a system of sharecrop or lease-tenancy, whether
classified as landed estate or not, it does not preclude nor prohibit the
disposition of landholdings planted with other crops to the tenants by
express will of the landowner under PD 27.
In the instant case, a large portion of Hacienda Masamat with an aggregate
area of 115.41 hectares was planted with sugar cane. It is undisputed, as was
duly shown in the January 12, 1977 Panlilio Affidavit, that only 50.22 hectares
were planted with palay. Thus, approximately 65.19 hectares of the subject
77
landholdings were planted with sugar cane aside from the portions used for
the residences of the tenants and planted with crops for their daily
sustenance. Needless to say, with the January 12, 1977 Panlilio Affidavit, she
expressed her intent to include the 65.19 hectares to be placed under the OLT
pursuant to PD 27 in favor of her tenants which otherwise would have been
exempt. Indeed, waiver or an intentional and voluntary surrender of a right
can give rise to a valid title or ownership of a property in favor of another
under Article 6 of the Civil Code. Thus, such disposition through the OLT
pursuant to PD 27 is indeed legal and proper and no irregularity can be
attributed to the DAR which merely relied on the January 12, 1977 Panlilio
Affidavit.
Third Issue: Equitable remedy of laches
The court a quo correctly ruled that Panlilio and her successors-in-interest are
bound by the coverage of the lot under PD 27 by reason of laches.
Even granting arguendo that the February 3, 1977 Affidavit of revocation is
genuine and was furnished both the DAR and the CAR, still, no relief can be
accorded petitioner Lizares on account of laches.
Laches and its elements
Delay for a prolonged period of time can result in loss of rights and
actions. The equitable defense of laches does not even concern itself with the
character of the defendants title, but only with plaintiffs long inaction or
inexcusable neglect to bar the latters action as it would be inequitable and
unjust to the defendant.
According to settled jurisprudence, laches means the failure or neglect, for an
unreasonable and unexplained length of time, to do that whichby the exercise
of due diligence could or should have been done earlier.[62] Verily, laches
serves to deprive a party guilty of it of any judicial remedies. Its elements are:
(1) conduct on the part of the defendant, or of one under whom the
defendant claims, giving rise to the situation which the complaint seeks a
remedy; (2) delay in asserting the complainants rights, the complainant
having had knowledge or notice of the defendants conduct as having been
afforded an opportunity to institute a suit; (3) lack of knowledge or notice on
the part of the defendant that the complainant would assert the right in
which the defendant bases the suit; and (4) injury or prejudice to the
defendant in the event relief is accorded to the complainant, or the suit is not
held barred.[63]
In Santiago v. Court of Appeals, we explained that there is no absolute rule as
to what constitutes laches or staleness of demand; each case is to be
determined according to its particular circumstances.[64]
Laches has set in
The records demonstrate clear signs of laches. The first element is
undisputed. Panlilios erstwhile tenants were issued CLTs sometime in 1973
and subsequently EPs in 1993. CAR Case No. 1649-P74 filed by Panlilios
lessee, Paulina Mercado, was dismissed with finality on March 17, 1978 as no
appeal was pursued. Since then, Panlilio and her administrator for the subject
landholdings in Hacienda Masamat, Jesus Lizares, did not take any action to
revoke the CLTs. With the dismissal of the land case in 1978, with finality, the
possession of the tenants of Panlilio was fully recognized by her and her
successors-in-interest.
It cannot be disputed that Panlilios tenants, the private respondents,
occupied portions of the subject landholdings in an open, continuous, and
adverse manner in the concept of owners from 1978 until 1994 and 1995
when the subject cases were instituted by petitioner Lizares or for more than
sixteen (16) years. Private respondents possession of said portions for a
lengthy period of time gave cause to petitioner to complain and take legal
steps to protect Panlilios rights of ownership and title over the disputed
lot. No such action was taken.
Likewise, the second element of laches is amply shown. Panlilio and her
successors-in-interest did not take any administrative or judicial action to
protect her rights for more than 16 years.
As it is, if Panlilio indeed executed the affidavit of revocation in February 3,
1977, why did she not pursue any action to implement her affidavit
disregarding her January 12, 1977 Affidavit? Indeed, Panlilio, during her
lifetime, did not lift a finger to regain her land. After she died on December
29, 1986, Jesus Lizares, her administrator for Hacienda Masamat, likewise did
not initiate any legal action to effectuate her alleged wish. Unfortunately for
petitioner Lizares, the cases initiated by him in 1994 and 1995 were belatedly
filed and much delay had transpired which proved to be prejudicial to his
interests.
Anent the third element, private respondents did not know nor anticipate that
their possession, occupancy, and ownership of the subject landholdings after
16 years would still be questioned. In fact, private respondents did not only
continue tilling the land, but later on had conveyed their lots to innocent
third parties for value. Moreover, we take judicial notice that numerous
commercial buildings, residential houses, and a large mall stand on major
portions of former Hacienda Masamat. In fact, the subject landholdings are
now much different from what they were more than two decades ago. Thus,
after more than sixteen (16) years of unquestioned, peaceful, and
uninterrupted possession, private respondents did not expect that petitioner
Lizares would still assert any right over the landholdings after the lapse of
such a long period of occupation.
Finally, grave prejudice and serious damage would befall private respondents,
in general, who relied on their CLTs and EPs, and subsequent purchasers for
value of the lots forming parts of the former hacienda who relied on private
respondents titles if the complaints of petitioner were not barred. As a matter
of fact, some buyers not impleaded in the instant case opted to settle out-of-
court with petitioner Lizares rather than be disturbed in their possession and
their right of ownership.
Considering the foregoing discussion, we uphold the finding of laches. Verily,
it would be a grave injustice if private respondents and the subsequent
purchasers for value would now be made to suffer after petitioner Lizares and
his predecessors-in-interest had slept on their rights for more than 16 years.
Fourth Issue: Principle of res judicata inapplicable
Private respondents contend that the dismissal in CAR Case No. 1649-P74
constitutes res judicata over the instant case. CAR Case No. 1649-P74
involved Panlilios lessee against private respondents with the issue of the
crops being planted on subject landholdings, while the instant case involves
Panlilios successor-in-interest petitioner Lizares against private respondents
involving the issue of the alleged affidavit of revocation.
The reliance on res judicata is misplaced.
Res judicata, either in the concept of bar by former judgment or
conclusiveness of judgment, cannot be applied to the present case.
In Vda. de Cruzo v. Carriaga, Jr., we discussed the doctrine of res judicata, as
follows:
The doctrine of res judicata thus lays down two main
rules which may be stated as follows: 1) The judgment or
decree of a court of competent jurisdiction on the merits
concludes the parties and their privies to the litigation
78
and constitutes a bar to a new action or suit involving the
same cause of action either before the same or any other
tribunal; and 2) Any right, fact, or matter in issue directly
adjudicated or necessarily involved in the determination
of an action before a competent court in which a
judgment or decree is rendered on the merits is
conclusively settled by the judgment therein and cannot
again be litigated between the parties and their privies
whether or not the claim or demand, purpose or subject
matter of the two suits is the same.These two main rules
mark the distinction between the principles governing
the two typical cases in which a judgment may operate
as evidence. In speaking of these cases, the first general
rule above stated, and which corresponds to the
aforequoted paragraph (b) of Section 49, is referred to as
bar by former judgment while the second general rule,
which is embodied in paragraph (c) of the same section,
is known as conclusiveness of judgment.
Stated otherwise, when we speak of res judicata in its
concept as a bar by former judgment, the judgment
rendered in the first case is an absolute bar to the
subsequent action since said judgment is conclusive not
only as to the matters offered and received to sustain
that judgment but also as to any other matter which
might have been offered for that purpose and which
could have been adjudged therein. This is the concept in
which the term res judicata is more commonly and
generally used and in which it is understood as the bar
by prior judgment constituting a ground for a motion to
dismiss in civil cases.
On the other hand, the less familiar concept or less
terminological usage of res judicata as a rule on
conclusiveness of judgment refers to the situation where
the judgment in the prior action operates as an estoppel
only as to the matters actually determined therein or
which were necessarily included therein. Consequently,
since other admissible and relevant matters which the
parties in the second action could properly offer are not
concluded by the said judgment, the same is not a bar to
or a ground for dismissal of the second action.
At bottom, the other elements being virtually the same,
the fundamental difference between the rule of res
judicata as a bar by former judgment and as merely a
rule on the conclusiveness of judgment is that, in the
first, there is an identity in the cause of action in both
cases involved whereas, in the second, the cause of
action in the first case is different from that in the second
case.[65]
Premised on the foregoing disquisition, the principle of res judicata requires
the concurrence of the following requisites:
a) The former judgment or order must be final;
b) It must be a judgment or order on the merits, that is, it
was rendered after a consideration of the evidence or
stipulations submitted by the parties at the trial of the
case;
c) It must have been rendered by a court having
jurisdiction over the subject matter and the parties; and
d) There must be, between the first and second actions,
identity of parties, of subject matter and of cause of
action. This requisite is satisfied if the two actions are
substantially between the same parties.[66]
For want of the fourth requisite that there must be, between the first and
second actions, identity of parties, subject matter, and cause of action, the
instant case is thus removed from the operation of the principle of res
judicata. Stated differently, there is no identity of parties and issues in CAR
Case No. 1649-P74 and the instant case.
Nevertheless, while res judicata is not applicable in the instant case, still, it will
not accord legal relief to petitioner with respect to his claim of ownership
over the lots in dispute.
Fifth Issue: Fraud and collusion not proven
Petitioner Lizares accuses the DAR personnel and private respondents of
fraud and collusion. Absent any proof, such allegation falls flat.
In the recent case of Heirs of Cipriano Reyes v. Calumpang, we elucidated on
this same issue of the required evidential proof, thus:
Basic is the rule of actori incumbit onus probandi, or the
burden of proof lies with the plaintiff. Differently stated,
upon the plaintiff in a civil case, the burden of proof
never parts. In the case at bar, petitioners must therefore
establish their case by a preponderance of evidence, that
is, evidence that has greater weight, or is more
convincing than that which is offered in opposition to it
which petitioners utterly failed to do so. Besides, it is an
age-old rule in civil cases that one who alleges a fact has
the burden of proving it and a mere allegation is not
evidence. Fraud is never presumed, but must be
established by clear and convincing evidence. Thus, by
admitting that Victorino, Luis, and Jovito, all surnamed
Reyes, indeed executed the Deed of Quitclaim coupled
with the absence of evidence substantiating fraud and
mistake in its execution, we are constrained to uphold
the appellate courts conclusion that the execution of the
Deed of Quitclaim was valid.[67]
Hence, we uphold the CAs pronouncement that there was no collusion and
fraud especially considering that no clear and convincing evidence was
presented to overwhelm and rebut the presumption that official duty has
been regularly performed[68] by the DAR personnel.
Sixth Issue: Subsequent transfers valid only
to qualified farmer-beneficiaries
Petitioner Lizares asseverates that ownership of lands granted to tenant-
farmers under PD 27 may not be transferred or conveyed to third parties
except by hereditary succession or to the Government. He contends that the
CA committed grave abuse of discretion in declaring the sale of the land by
private respondents Gonzalo Dizon, et al. to third persons valid. The CA
ratiocinated that EO 228 was enacted after PD 27 and since EO 228 is a later
law, it will prevail over PD 27. Thus, the ownership of the lot may now be
transferred to persons other than the heirs of the beneficiary or the
Government.
Petitioner is correct.
EO 228 not inconsistent with PD 27 on prohibition of transfers
The prohibition in PD 27, the Tenants Emancipation Decree, which took effect
on October 21, 1972, states that [t]itle to land acquired pursuant to this
Decree or the Land Reform Program of the Government shall not be
transferable except by hereditary succession or to the Government in
accordance with the provisions of this Decree, the Code of Agrarian Reforms
and other existing laws and regulations (emphasis supplied).
79
Hereditary succession means succession by intestate succession or by will to
the compulsory heirs under the Civil Code, but does not pertain to
testamentary succession to other persons. Government means the DAR
through the Land Bank of the Philippines which has superior lien by virtue of
mortgages in its favor.
Thus, PD 27 is clear that after full payment and title to the land is acquired,
the land shall not be transferred except to the heirs of the beneficiary or the
Government. If the amortizations for the land have not yet been paid, then
there can be no transfer to anybody since the lot is still owned by the
Government. The prohibition against transfers to persons other than the heirs
of other qualified beneficiaries stems from the policy of the Government to
develop generations of farmers to attain its avowed goal to have an adequate
and sustained agricultural production. With certitude, such objective will not
see the light of day if lands covered by agrarian reform can easily be
converted for non-agricultural purposes.
On the other hand, Sec. 6 of EO 228 provides, thus:
Sec. 6 The total cost of the land including interest at the
rate of six percent (6%) per annum with a two percent
(2%) interest rebate for amortizations paid on times, shall
be paid by the farmer-beneficiary or his heirs to the Land
Bank over a period of up to twenty (20) years in twenty
(20) equal annual amortizations. Lands already valued
and financed by Land Bank are likewise extended a 20-
year period of payment of twenty (20) equal annual
amortizations. However, the farmer-beneficiary if he so
elects, may pay in full before the twentieth year or may
request the Land Bank to structure a repayment period
of less than twenty (20) years if the amount to amount to
be financed and the corresponding annual obligations
are well within the farmers capacity to meet. Ownership
of lands acquired by farmer-beneficiary may be
transferred after full payment of amortizations.
(Emphasis supplied.)
The CA highlighted and made much of the last sentence of Sec. 6 which
authorizes the transfer of the ownership of the lands acquired by the farmer-
beneficiary after full payment of amortizations. It construed said provision to
mean that the farmer-beneficiary can sell the land even to a non-qualified
person.
This is incorrect.
First of all, the provision in question is silent as to who can be the transferees
of the land acquired through the CARP. The rule in statutory construction is
that statutes in pari materia should be construed together and harmonized.
[69] Since there appears to be no irreconcilable conflict between PD 27 and
Sec. 6 of EO 228, then the two (2) provisions can be made compatible by
maintaining the rule in PD 27 that lands acquired under said decree can
only be transferred to the heirs of the original beneficiary or to the
Government. Second, PD 27 is the specific law on agrarian reform while EO
228 was issued principally to implement PD 27. This can easily be inferred
from EO 228 which provided for the mode of valuation of lands subject of PD
27 and the manner of payment by the farmer-beneficiary and mode of
compensation to the land owner. Third, implied repeals are not favored. A
perusal of the aforequoted Sec. 6 of EO 228 readily reveals that it confers
upon the beneficiary the privilege of paying the value of the land on a twenty
(20)-year annual amortization plan at six percent (6%) interest per annum. He
may elect to pay in full the installments or have the payment plan
restructured. Said provision concludes by saying that after full payment,
ownership of the land may already be transferred. Thus, it is plain to see that
Sec. 6 principally deals with payment of amortization and not on who qualify
as legal transferees of lands acquired under PD 27. Since there is no
incompatibility between PD 27 and EO 228 on the qualified transferees of
land acquired under PD 27, ergo, the lands acquired under said law can only
be transferred to the heirs of the beneficiary or to the Government for
eventual transfer to qualified beneficiaries by the DAR pursuant to the explicit
proscription in PD 27.
Thus, the alleged transfers made by private respondents in G.R. No.
148777 of lands acquired under PD 27 to non-qualified persons are
illegal and null and void.[70]
The ruling in Victorino Torres v. Leon Ventura sheds light on the policy behind
the prohibition, thus:
The law is clear and leaves no room for doubt. Upon the
promulgation of Presidential Decree No. 27 on October
21, 1972, petitioner was DEEMED OWNER of the land in
question. As of that date, he was declared emancipated
from the bondage of the soil. As such, he gained the
rights to possess, cultivate, and enjoy the landholding for
himself. Those rights over that particular property were
granted by the government to him and to no other. To
insure his continued possession and enjoyment of the
property, he could not, under the law, make any valid
form of transfer except to the government or by
hereditary succession, to his successors.[71]
In addition, the prohibition was expanded not only to cover the title issued to
the tenant-farmer but also the rights and interests of the farmer in the land
while he is still paying the amortizations on it. A contrary ruling would make
the farmer an easy prey to those who would like to tempt [him/her] with cash
in exchange for inchoate title over the same, and PD 27 could be easily
circumvented and the title shall eventually be acquired by non-tillers of the
soil.[72]
Anent the contravention of the prohibition under PD 27, we ruled in Siacor v.
Gigantana[73] and more recently in Caliwag-Carmona v. Court of Appeals,
[74] that sales or transfers of lands made in violation of PD 27 and EO 228 in
favor of persons other than the Government by other legal means or to the
farmers successor by hereditary succession are null and void. The prohibition
even extends to the surrender of the land to the former landowner. The sales
or transfers are void ab initio, being contrary to law and public policy under
Art. 5 of the Civil Code that acts executed against the provisions of
mandatory or prohibiting laws shall be void x x x. In this regard, the DAR is
duty-bound to take appropriate measures to annul the illegal transfers and
recover the land unlawfully conveyed to non-qualified persons for disposition
to qualified beneficiaries. In the case at bar, the alleged transfers made by
some if not all of respondents Gonzalo Dizon, et al. (G.R. No. 148777) of lands
covered by PD 27 to non-qualified persons are illegal and null and void.
G.R. No. 157598
Finally, we resolve the sole issue raised in G.R. No. 157598 on whether
petitioners Reynaldo Villanueva, et al. are entitled to a partial entry of
judgment of the Amended Decision in CA-G.R. SP No. 47502.
Petitioners in G.R. No. 157598 are not entitled to a partial
entry of judgment in CA-G.R. SP No. 47502
Petitioners contend that they are entitled to a partial entry of judgment in
CA-G.R. SP No. 47502 as respondent George Lizares in G.R. No. 148777
deliberately excluded them on account of the amicable settlement concluded
between them. Thus, they contend that any judgment rendered by the Court
in G.R. No. 148777 will not affect them. In gist, petitioners strongly assert that
80
the Amended Decision in CA-G.R. SP No. 47502 is already final and executory
with respect to them.
Respondent Lizares, on the other hand, has continually affirmed that he
deliberately excluded petitioners in his petition for review under G.R. No.
148777 as they had amicably settled with him; and that he has released,
discharged, and waived any and all claims against petitioners on account of
the petition. Thus, respondent Lizares interposes no objection for the
issuance of a partial entry of judgment in CA-G.R. SP No. 47502 insofar as
petitioners are concerned, as the issues and reliefs he is seeking in G.R. No.
148777 do not concern nor prejudice petitioners.
We disagree.
It is clear that petitioners, though they settled with respondent Lizares out-of-
court, were not able to get a favorable ruling from the DARAB approving the
motion to withdraw appeal filed by respondent Lizares in DARAB Case Nos.
4558, 4559, and 4561. This motion for the recall of the appeal remained
unacted upon until the August 7, 1997 DARAB Decision was rendered in favor
of all the defendants and appellees.
Subsequently, the DARAB cases were elevated for review to the CA and
docketed as CA-G.R. SP No. 47502.
In its November 29, 2000 Amended Decision, the CA upheld the DARAB
Decision.
On January 28, 2002, petitioners Reynaldo Villanueva, et al. filed a Motion for
Entry of Judgment based on their out-of-court settlement with petitioner
Lizares while the DARAB case was pending. On July 4, 2002, a second motion
for entry of judgment was filed which was denied together with the first
motion by the CA on November 14, 2002.
The reason for the denial by the CA of the aforementioned prayers for entry
of judgment is as follows:
Our Amended Decision in this case had long been
elevated to the Supreme Court by a petition for review
on certiorari under Rule 45. As held by the Supreme
Court in Heirs of the Late Justice Jose B. L. Reyes vs. Court
of Appeals, by the mere fact of the filing of the petition,
the finality of the Court of Appeals decision was stayed,
and there could be no entry of judgment therein, and
hence, no premature execution could be had. In that
case, the High Court emphatically declared that when
this Court adopted a resolution granting execution
pending appeal after the petition for review was already
filed in the Supreme Court, the Court of Appeals
encroached on the hallowed grounds of the Supreme
Court. Thus, We find no legal basis or justification to
allow [the] motions for partial entry of judgment even on
the ground that private [respondent]-movants were not
impleaded in G.R. No. 148777 and in the absence of
opposition from herein petitioner who had allegedly
concluded an out-of-court settlement with private
[respondent]-movants.[75]
We fully agree with the CA that there should be no partial entry of judgment
for petitioners Reynaldo Villanueva, et al. since their motion to withdraw was
not acted upon by the DARAB nor by the CA. Thus, there is nothing to record
in the Book of Entry of Judgments.
More importantly, it appears that the transfers made by some or all of
petitioners Reynaldo Villanueva, et al. (G.R. No. 157598) to non-qualified
persons are proscribed under PD 27. Such finding necessarily preludes the
entry of judgment in favor of said petitioners. Consequently, the alleged
transfers made by petitioners Villanueva, et al., being in contravention of a
prohibitory provision of PD 27, are null and void, and the titles issued to non-
qualified individuals have to be cancelled and new ones issued to the
Government.

WHEREFORE, the petition in G.R. No. 148777 is PARTLY GRANTED. The

November 29, 2000 Amended Decision of the CA in CA-G.R. SP No. 47502
is AFFIRMED with the modification that the transfers made by private
respondents to non-qualified persons, if any, under PD 27 are illegal and
declared NULL and VOID, and the titles issued based on the transfers are
likewise NULL and VOID. The DAR is ORDERED to investigate the transfers
covering the subject landholdings and, based on the findings of illegal
transfers for violations of PD 27 and EO 228, to coordinate with the Register
of Deeds of Pampanga for the cancellation of the titles registered in the
names of the transferees or to their subsequent transferees and to issue new
titles to the Government for disposition to qualified beneficiaries. The
November 14, 1995 PARAD Joint Decision in DARAB Cases Nos. 638-P94,
933-P95, 934-P95, and 935-P95, as affirmed by the August 7, 1997 DARAB
Decision in DARAB Case Nos. 4558, 4559, 4560, and 4561, is
accordingly MODIFIED.

The petition in G.R. No. 157598 is DISMISSED for lack of merit. The transfers
made by petitioners Reynaldo, et al. to non-qualified persons, if any, under
PD 27 are likewise declared NULL and VOID. Similarly, the DAR
is ORDERED to investigate the transfers covering the subject landholdings
and, based on the findings of illegal transfers for violations of PD 27 and EO
228, to coordinate with the Register of Deeds of Pampanga for the
cancellation of the titles concerned registered in the names of the transferees
or to their subsequent transferees and to issue new titles to the Government
for disposition to qualified beneficiaries.

SO ORDERED.

81
G.R. No. 101974* July 12, 2001
VICTORIA P. CABRAL, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, HON. ELIGIO P. PACIS, REGIONAL DIRECTOR,
REGION III, DEPARTMENT OF AGRARIAN REFORM, FLORENCIO ADOLFO, GREGORIO
LAZARO, GREGORIA ADOLFO and ELIAS POLICARPIO, respondents.
KAPUNAN, J.:
On January 16, 1990, petitioner Victoria Cabral filed a petition before the
Barangay Agrarian Reform Council (BARC) for the cancellation of the
Emancipation Patents and Torrens Titles issued in favor of private
respondents. The patents and titles covered portions of the property owned
and registered in the name of petitioner.
Petitioner alleged therein that she was the registered owner of several parcels of
land covered by Original Certificate of Title (OCT) No. 0-1670 of the Registry of
Deeds of Bulacan,1 among which is a parcel of land described therein as Lot 4 of
Plan Psu-164390. The petition further averred that as early as July 1973,
petitioner applied with the Department of Agrarian Reform (DAR) for the
reclassification or conversion of the land for residential, commercial or
industrial purposes. The application for conversion, however, was not acted
upon. Instead, on April 25, 1988, Emancipation Patents, and, thereafter,
Transfer Certificates of Title, were issued in favor of private respondents.
Petitioner sought the cancellation of the TCTs on the grounds that: petitioner
had a pending application for conversion and reclassification; the lots covered
by the emancipation patents included areas not actually tilled by private
respondents; private respondents had illegally transferred their rights over
the parcels of land covered by the emancipation patents; private respondents
are deemed to have abandoned their rights over the properties; and the
subject property was taken without just compensation.
On January 19, 1990, petitioner filed with the DAR itself another petition for the
cancellation of the same Emancipation Patents and Torrens Titles.
On January 29, 1990, petitioner received a letter from the Municipal Agrarian
Reform Office (MARO) of Sta. Maria, Bulacan, stating, among other things,
that in order "that your petition be given due process by this Office, your
petition will be forwarded to the legal section of this office for legal action."
On February 11, 1990, Regional Director Eligio Pacis issued an order dismissing
the petition2 for cancellation of Emancipation Patents, thus:
WHEREFORE, premises considered, this Office hereby orders the
DISMISSAL of the petition of Victoria P. Cabral for lack of legal and factual
basis' likewise, this office request[s] that the annotation of the notice of
lis pendens on the original copies of Emancipation Patents issued to
petitioners covering the subject landholdings be CANCELLED by the Office
of the Register of Deeds concerned.
SO ORDERED.3
The Regional Director likewise denied petitioner's motion for reconsideration
dated July 11, 1990. Consequently, petitioner filed a petition for certiorari in
the Court of Appeals questioning the jurisdiction of the Regional Director and
claiming denial of due process. On January 8, 1991, the appellate court
dismissed the petition for lack of merit. Petitioner's motion for
reconsideration was likewise denied, prompting petitioner to turn to this
Court for relief, alleging that:
(a) THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
DAR REGIONAL DIRECTOR OF REGION III ACTED WITH JURISDICTION
WHEN IT TOOK COGNIZANCE OF AND RESOLVED THE CONVERSION
APPLICATION AND/OR CANCELLATION OF CLT/EP PETITION OF
PETITIONER-APPELLANT;
(b) THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT
OUTSIDE OF THE BARANGAY AGRARIAN REFORM COMMITTEE (BARC), IT
IS THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD
(DARAB) THAT HAS JURISDICTION OVER AGRARIAN REFORM CASES,
DISPUTES OR CONTROVERSIES;
82
(c) THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT
PETITIONER WAS NOT DENIED DUE PROCESS AS ALLEGEDLY SHE LOST
HER OPPORTUNITY TO BE HEARD AFTER THE JUNE 27, 1990 HEARING.4 -
On April 21, 1993, petitioner filed with this Court an urgent motion for the issuance
of a temporary restraining order. Petitioner alleged that private respondent Gregoria
Adolfo had conveyed the land awarded to her to the Aqualand Development
Corporation and the Sta. Rita Steel Resources Corporation. These corporations, in
turn,
x x x converted the parcel of land from agricultural to commercial and
industrial and have constructed high adobe stone walls[,] commenced
the construction of a steel finishing plant and other structures for the
manufacture of steel products[,] and are putting in place more
installations to complete all facilities necessary for their business. As a
matter of fact, they have just applied for a building permit for the
construction of a two (2) storey office condominium/business office
building. xxx5
In a Resolution dated May 17, 1993, the Court issued the temporary restraining
order prayed for. The Court enjoined Sta. Rita Steel Resources and Aqualand
Development Corporation, its officers, agents, representatives and/or persons acting
in their place or stead from continuing the construction of building and the like on
the landholding of petitioner, pending final resolution of the petition.6
Petitioner contended before the Court of Appeals that jurisdiction over the case
pertained to the Department of Agrarian Reform Agrarian Board (DARAB), not the
Regional Director. Addressing this argument, the Court of Appeals held in its
Decision:
Relevant to the issue raised is Ministry Administrative Order No. 2-85,
Series of 1985, efective July 24, 1985 (Annex 2, Comment) which
empowers all DAR Regional Directors to hear and decide cases which
include the issuance of Decisions/Resolutions, the recall and cancellation
of Certificates of Land Transfers (CLTs) if such is the necessary
consequence of the facts and circumstances of the case.
A later directive, DAR Memo Cir. No. 5, Series of 1987 (Annex 3,
Comment), clothed the Regional Directors as titular regional heads, with
powers to hear and resolve cases involving lands in their respective
jurisdiction in order to achieve the expanded and comprehensive agrarian
reform program of the present administration, and to tackle the issue of
huge number and increasing backlog or unresolved cases in the DAR
Central Office.
Additionally, a memorandum dated September 14, 1987 (Annex 4,
Comment) addressed to the Director, Bureau of Land Acquisition
Development, by the then Director, Bureau of Agrarian Legal Assistance,
contains a decisive opinion regarding the question on order of
cancellation issued by the Regional Director, DAR Region III, to wit:
"The Regional Director is now authorized to hear/investigate
and hereby resolve cases arising from the implementation of
CLT pursuant to PD 27 and amendatory and related decrees
and letter of instructions, rules and regulations as well as
conflict of claim in landed estates and resettlement areas and
such other lands as have been placed under the administration
and disposition of this Department."7
In its Resolution dated September 17, 1991, the Court of Appeals also made
reference to Section 13 of Executive Order No. 129-A, which authorized the
delegation of the adjudication of agrarian reform cases to regional offices. It further
cited certain provisions of the DARAB Revised Rules of Procedure providing for,
among others, delegated jurisdiction, and concluded that:
x x x the Regional Director cannot be faulted with assuming jurisdiction
over the case, considering that the powers and functions of the DARAB
may be delegated to the regional office x x x.
While it is true that the jurisdiction is vested with the DARAB, the
Regional Director took cognizance of the instant case invoking the
delegated powers and functions upon him.8
Evidently, the DARAB, in the Court of Appeals' view, had concurrent jurisdiction with
the Regional Director over the case. Petitioner, on the other hand, maintains that
the jurisdiction of the DARAB is exclusive of the DAR Regional Director.
Petitioner is correct. Whatever jurisdiction the Regional Director may have
had over the cancellation of emancipation patents, it lost with the passage of
subsequent laws.
Section 17 of Executive Order No. 229 (Providing for the Mechanism for the
Implementation of the Comprehensive Agrarian Reform Program)9 granted
DAR quasi-judicial powers to adjudicate agrarian reform matters, thus:
Section 50. 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 involving implementation of agrarian reform, except those falling
under the exclusive jurisdiction of the Department of Agriculture (DA)
and the Department of Environment and Natural Resources (DENR).
xxx
Executive Order No. 129-A (Modifying Executive Order No. 129 Reorganizing
and Strengthening Department of Agrarian Reform and for other purposes)
subsequently provided for the creation of the Agrarian Reform Adjudicatory
Board, granting it the powers and functions with respect to the adjudication
of agrarian reform cases:
SECTION 13. Agrarian Reform Adjudication Board. There is hereby created
an Agrarian Reform Adjudication Board under the Office of the Secretary.
The Board shall be composed of the Secretary as Chairman, two (2)
Undersecretaries as may be designated by the Secretary, the Assistant
Secretary for Legal Afairs, and three (3) others to be appointed by the
President upon recommendation of the Secretary as members. A
Secretariat shall be constituted to support the Board. The Board shall
assume the powers and functions with respect to the adjudication of
agrarian reform cases under Executive Order No. 229 and this Executive
Order. These powers and functions may be delegated to the regional
office of the Department in accordance with the rules and regulations
promulgated by the Board.
Congress substantially reiterated Section 17 of E.O. No. 229 in Republic Act
No. 6657, otherwise known as the Comprehensive Agrarian Law of 1988
(CARL).11 Section 50 thereof states:
Section 50. Quasi-Judicial Powers of the DAR. — The DAR is hereby vested
with primary jurisdiction to determine and adjudicate agrarian reform
matters and shall have exclusive original jurisdiction over all matters
involving the implementation of agrarian reform, except those falling
under the exclusive jurisdiction of the Department of Agriculture (DA)
and the Department of Environment and Natural Resources (DENR).
xxx
CARL took efect on June 15, 1988, after it was published in two newspapers of
general circulation.
In order "to achieve a just, expeditious and inexpensive determination of every
action or proceeding before it," the DAR is mandated "to adopt a uniform rule of
procedure" (Second par., Section 50, R.A. No. 6657), which is, at present, the DARAB
Revised Rules.12 The Rules were promulgated on December 26, 1988.
The provisions of Rule II (Jurisdiction of the Adjudication Board) of the
Revised Rules read:
SECTION 1. Primary, Original and Appellate Jurisdiction. – The Agrarian
Reform Adjudication Board shall have primary jurisdiction, both original
and appellate, to determine and adjudicate all agrarian disputes, cases,
controversies, and matters or incidents involving the implementation of
the Comprehensive Agrarian Reform Program under Republic Act No.
6657, Executive Order Nos. 229, 228 and 129-A, Republic Act No. 3844 as
amended by Republic Act No. 6389, Presidential Decree No. 27 and other
agrarian laws and their implementing rules and regulations.
Specifically, such jurisdiction shall extend over but not be limited to the
following:
a) Cases involving the rights and obligations of persons
engaged in the cultivation and use of agricultural land covered
83
by the Comprehensive Agrarian Reform Program (CARP) and
other agrarian laws;
b) Cases involving the valuation of land, and determination
and payment of just compensation, fixing and collection of
lease rentals, disturbance compensation, amortization
payments, and similar disputes concerning the function of the
Land Bank;
c) Cases involving the annulment or cancellation of orders or
decisions of DAR officials other than the Secretary, lease
contracts or deeds of sale or their amendments under the
administration and disposition of the DAR and LBP;
d) Cases arising from, or connected with membership or
representation in compact farms, farmers' cooperatives and
other registered farmers' associations or organizations, related
to land covered by the CARP and other agrarian laws;
e) Cases involving the sale, alienation, mortgage, foreclosure,
pre-emption and redemption of agricultural lands under the
coverage of the CARP or other agrarian laws;
f) Cases involving the issuance of Certificate of Land Transfer
(CLT), Certificate of Land Ownership Award (CLOA) and
Emancipation Patent (EP) and the administrative correction
thereof;
g) And such other agrarian cases, disputes, matters or
concerns referred to it by the Secretary of the DAR.
Provided, however, that matters involving strictly the administrative
implementation of the CARP and other agrarian laws and regulations,
shall be the exclusive prerogative of and cognizable by the Secretary of
the DAR.
SECTION 2. Delegated Jurisdiction. – The Regional Agrarian Reform
Adjudicators (RARAD) and the Provincial Agrarian Reform Adjudicators
(PARAD) are empowered and authorized to receive, hear, determine and
adjudicate all agrarian cases and disputes, and incidents in connection
therewith, arising within their respective territorial jurisdiction.
SECTION 3. Functional Relationships. – The Board shall exercise functional
supervision over the RARADs; and the PARADs. For administrative
purposes, however, the RARADs and the PARADs are deemed to form
part of the DAR Regional Office where they are stationed, and as such,
shall be given administrative support by their respective Regional and
Provincial offices, in terms of office space, personal services, equipment
and supply, and other facilities.
SECTION 4. Role of the RARAD. – The RARAD shall be the Executive
Adjudicator in his region directly responsible to the Board. As such, he
shall coordinate and monitor the work of the PARADs in his region and
see to it that their dockets do not remain clogged. He shall receive, hear,
and adjudicate the following cases:
a) Cases that cannot be handled by the PARAD on account of
inhibition or disqualification;
b) Cases brought directly before him which for some cogent
reason, cannot be properly handled by the PARAD concerned;
c) Cases of such complexity and sensitivity that the decision
thereof would constitute an important precedent afecting
regional or national interest; and
d) Such other cases which the Board may assign to him.
SECTION 5. Appellate Jurisdiction. – The Board shall have exclusive
appellate jurisdiction to review, reverse, modify, alter or affirm
resolutions, orders, decisions, and other dispositions of its RARAD and
PARAD.
SECTION 6. Enforcement Powers. – The members of the Board and its
RARADs and PARADs are empowered to summon witnesses, administer
oaths, take testimony, require submission of reports, compel production
of books and documents and answers to interrogatories, and to
 issue subpoena, subpoena duces tecum, writs of possession, writs of
execution and other writs to enforce its orders and decisions thru sherifs
or duly deputized officers.
For such purpose, whenever necessary, it may call upon the police and
military authorities for assistance in the enforcement and execution of its
decisions, orders, writs and other processes.
In Department of Agrarian Reform Adjudication Board vs. Court of
Appeals,13 this Court observed that:
x x x the DAR's exclusive original jurisdiction [as set forth in Section
50 of the CARL] is exercised through hierarchically arranged
agencies, namely, the DARAB, RARAD and PARAD. The latter two
exercise "delegated authority," while the first exercises appellate
jurisdiction over resolutions, orders, decisions and other
dispositions of the RARAD and the PARAD.
On the other hand, Executive Order 129-A, in Section 24 thereof, defines the
functions of the Regional Offices as follows:
SECTION 24. Regional Offices. The Department shall have twelve (12)
Regional Offices. Each Regional Office shall be headed by a Regional
Director who shall be assisted by an Assistant Regional Director for
Operations and an Assistant Regional Director for Administration.
The Regional Offices shall be responsible for the implementation of laws,
policies, plans, programs, projects, rules and regulations of the
Department in its administrative region. For such purposes, it shall have
the following functions.
a) Prepare and submit plans and programs for the regions on:
1) Land acquisition and distribution;
2) Information and education;
3) Land use management and land development;
4) Agrarian reform beneficiaries development;
b) Provide technical assistance to Provincial Offices and
Municipal Agrarian Reform Offices in the implementation of
approved plans and programs;
c) Conduct operations research and evaluation of agrarian
reform implementation within the region;
d) Coordinate with other government and private agencies
and farmers and farm workers' organizations at the regional
level, to carry out programs/projects for the general welfare of
agrarian reform beneficiaries;
e) Maintain an information system in coordination with the
established monitoring system;
f) Review and evaluate reports and other documents
submitted by the Provincial Offices and Municipal Agrarian
Reform Offices and agrarian reform clientele;
g) Submit periodic feedback as may be necessary in the service
of the Department's clientele.
In addition, the Revised Administrative Code of 1987, in Chapter 5 (Field
Offices), Book IV (The Executive Branch) thereof, provides:
SEC. 26. Functions of a Regional Office. – (1) A regional office shall:
(a) Implement laws, policies, plans, programs, rules and
regulations of the department or agency in the regional area;
(b) Provide economical, efficient and efective service to the
people in the area;
(c) Coordinate with regional offices of other departments,
bureaus and agencies in the area;
(d) Coordinate with local government units in the area; and
(e) Perform such other functions as may be provided by law.
84
(2) x x x
SEC. 27. Duties of a Regional Director. – The Regional Director shall:
(1) Implement laws, policies, rules and regulations within the
responsibility of the agency;
(2) Implement agency programs in the region;
(3) Exercise the management functions of planning,
organizing, directing and controlling;
(4) Appoint personnel to positions in the first level and casual
and seasonal employees; and exercise disciplinary actions over
them in accordance with the Civil Service Law;
(5) Approve sick, vacation and maternity leaves of absence
with or without pay, for a period not beyond one year;
(6) Prepare and submit budget proposals for the region to the
central office, administer the budget of the regional office,
authorize disbursement of funds pursuant to approved
financial and work programs, and administer the budget
control machinery in the region;
(7) Approve requisition for supplies, materials and equipment,
as well as books and periodicals, and other items for the
region, in accordance with the approved supply procurement
program;
(8) Negotiate and enter into contracts for services or
furnishing supplies, materials and equipment to the regional
office involving an amount not exceeding fifty thousand pesos
(P50,000.00) within a given quarter, provided that authority in
excess of fifty thousand pesos (P50,000.00) may be further
authorized by the proper department or agency head;
(9) Approve claims for benefits under existing laws;
(10) Approve requests for overtime services;
(11) Promote coordination among regional offices, and
between his regional office and local government units in the
region;
(12) Provide housekeeping services for the regional office;
(13) Approve application of personnel for permission to teach,
exercise a profession, or engage in business outside of office
hours, in accordance with standards and guidelines of the Civil
Service Commission;
(14) Issue travel vouchers authorizing employees to travel on
official days within the region for a period not exceeding thirty
days;
(15) Approve attendance of personnel in conferences,
seminars, and non-degree training programs within the region;
(16) Authorize the allocation of funds to provincial/district
offices; and
(17) Perform such other duties and functions as may be
provided by law or further delegated by the head of agency or
other proper authorities concerned.
Title XI of Book IV of the same Code, dealing specifically with the Department
of Agrarian Reform, provides:
SEC. 18. Regional Office. – The Regional Office shall be responsible for
supporting the field units and supervising program implementation of the
Department within the region. It shall:
(1) Implement laws, policies, plans, rules and regulations of
the Department in the regional area;
(2) Develop and implement a regional personnel management
program;
 (3) Prepare, submit, execute and control the budget of the
region;
(4) Prepare and properly maintain books of accounts;
(5) Pay salaries and wages and other approved vouchers;
granted or provisions adopted when the purported delegation was made to the
Regional Director or since. The DARAB Rules grant broader powers to the Board and
the Adjudicators and contain more detailed rules on procedure than those provided
by the orders, circulars, memoranda and opinions cited by the Court of Appeals
delegating jurisdiction to the Regional Director.

(6) Provide administrative services to the regional and
provincial offices;
(7) Prepare and submit plans and programs for the region on:
a. land tenure development
b. information and education
c. land use management and land development
d. legal services
e. agrarian reform beneficiaries development
(8) Provide technical assistance to the provincial offices and
agrarian reform teams in the implementation of approved
plans and programs;
(9) Extend efective legal assistance, advice or service to
agrarian reform beneficiaries;
(10) Conduct operations research and evaluation of agrarian
reform program implementation within the region;
(11) Coordinate with other government and private agencies
and farmer organizations at the Regional level through the
Agrarian Reform Coordinating Council, to carry out
programs/projects for the general welfare of the agrarian
reform beneficiaries;
(12) Coordinate para-legal services;
(13) Maintain a data-based information system in coordination
with the established monitoring system;
(14) Review documents submitted by the Provincial and Team
Offices or by the clientele;
The Court of Appeals has underscored the fact that Section 13 of E.O. No. 129-A
authorizes the DARAB to delegate its powers and functions to the regional office in
accordance with the rules and regulations promulgated by the Board. The authority
purportedly provides additional justification for the Regional Office's jurisdiction
over the case. Precisely, however, the DARAB, through its Revised Rules, has
delegated such powers and functions to the RARADs and the PARADs, which, under
Section 3 of the Rules, "are deemed to form part of the DAR Regional Office where
they are stationed."
It is evident from the foregoing that the DAR, like most administrative agencies, is
granted with a fusion of governmental powers, in this case, a commingling of the
quasi-judicial and the executive. The growing complexity of modern life, the
multiplication of the subjects of governmental regulation and the increased difficulty
of administering the laws have impelled this constantly growing tendency toward
such delegation.29
In delegating these powers, it would hardly seem practical to allow a duplication of
functions between agencies. Duplication results in confusion between the various
agencies upon whom these powers are reposed, and in the public that the agencies
are supposed to serve. It divides the agencies' resources and prevents them from
devoting their energy to similarly important tasks. The intention to avoid this very
situation is evident in the various laws' distinct delineation of the functions of the
DARAB/RARAD/PARAD and the DAR Regional Office. Accordingly, the Court must
reject the theory of concurrent jurisdiction between the former and the latter. We
hold that the DAR Regional Office has no jurisdiction over the subject case.
In view of this conclusion, we need not resolve the issue of deprivation of due
process allegedly sufered by petitioner in the proceedings before the Regional
Director.
WHEREFORE, the petition is given DUE COURSE and GRANTED. The Decision and
Resolution of the Court of Appeals is REVERSED and SET ASIDE. The restraining
order issued per this Court's Resolution dated May 17, 1993 is hereby made
permanent.1âwphi1.nêt

(15) Submit periodic feedback and recommend policy changes SO ORDERED.

and/or modification of procedures on program
implementation; and

(16) Perform such other functions as may be necessary in the

service of the clientele.

The foregoing provisions were already in effect when petitioner filed her
petition in the BARC in 1990. And it is amply clear from these provisions that
the function of the Regional Office concerns the implementation of agrarian
reform laws while that of the DARAB/RARAD/PARAD is the adjudication of
agrarian reform cases.

The first is essentially executive. It pertains to the enforcement and

administration of the laws, carrying them into practical operation and
enforcing their due observance.14 Thus, the Regional Director is primarily
tasked with "[i]mplement[ing] laws, policies, rules and regulations within the
responsibility of the agency," as well as the "agency program in the
region."15

The second is judicial in nature, involving as it does the determination of

rights and obligations of the parties. To aid the DARAB in the exercise of this
function, the Rules grant the Board and Adjudicators the powers to issue
subpoenas16 and injunctions,17 to cite and punish for contempt,18 and to
order the execution of its orders and decision,19 among other powers. The
Rules also contain very specific provisions to ensure the orderly procedure before
the DARAB, RARADs and PARADs. These provisions govern the commencement of
actions, venue and cause of action,20 the service of pleadings,21 the presentation of
evidence,22 motions,23 appeals24 and judicial review.25 Notable are provisions
intended to prevent multiplicity of suits such as the rules on one suit for one cause
of action,26 the joinder of causes of action,27 and the assignment of all incidents of
a case to the Adjudicator to whom the case is assigned.28 No such powers were

85
 FIRST DIVISION
[UDK No. 9864 : December 3, 1990.]
RUFINA VDA. DE TANGUB, Petitioner, vs. COURT OF APPEALS,
PRESIDING JUDGE of the [CAR] RTC, Branch 4, Iligan City, and SPOUSES
DOMINGO and EUGENIA MARTIL, Respondents.
DECISION
NARVASA, J.:
The jurisdiction of the Regional Trial Court, acting as a special agrarian court,
in the light of Executive Orders Numbered 129-A and 229 and Republic Act
No. 6657, is what is at issue in the proceeding at bar.
Rufina Tangub and her husband, Andres, now deceased, filed with the
Regional Trial Court of Lanao del Norte in March, 1988, "an agrarian case for
damages by reason of the(ir) unlawful dispossession . . .was tenants from the
landholding" owned by the Spouses Domingo and Eugenia Martil. 1 Several
persons were also impleaded as defendants, including the Philippine National
Bank, it being alleged by the plaintiff spouses that said bank, holder of a
mortgage on the land involved, had caused foreclosure thereof, resulting in
the acquisition of the property by the bank as the highest bidder at the
foreclosure sale, and in the sale by the latter, some time later, of portions of
the land to the other persons named as its co-defendants (all employees of
the National Steel Corporation), and it being prayed that mortgage and the
transactions thereafter made in relation thereto be annulled and voided. 2
In an Order rendered on August 24, 1988, respondent Judge Felipe G. Javier,
Jr. dismissed the complaint. 3 He opined that by virtue of Executive Order No.
229 "providing the mechanisms for the implementation of the
Comprehensive Agrarian Reform Program approved on July 24, 1987" —
Executive No. 129-A approved on July 26, 1987, as well as the Rules of the
Adjudication Board of the Department of Agrarian Reform, jurisdiction of the
Regional Trial Court over agrarian cases had been transferred to the
Department of Agrarian Reform.:-cralaw
The Tangub Spouses filed a petition for Certiorari with this Court, docketed as
UDK-8867, assigned to the Second Division. Discerning however no special
and important reason for taking cognizance of the action, this Court referred
the same to the Court of Appeals, that tribunal having concurrent jurisdiction
to act thereon.:
The Court of Appeals, by Decision promulgated on October 23, 1989, 4
dismissed the petition, finding that the jurisdictional question had been
correctly resolved by the Trial Court. The Court of Appeals, adverted to a case
earlier decided by it, on August 30, 1989, Estanislao Casinillo v. Hon. Felipe G.
Javier, Jr., et al., in which it was "emphatically ruled that agrarian cases no
longer fall under the jurisdiction of Regional Trial Courts but rather under the
jurisdiction of the DAR Adjudication Board." 5 The ruling was grounded on
the provisions of Executive Orders Numbered 229, approved on July 22, 1987,
and 129-A, issued on July 26, 1987, in relation to Republic Act No. 6657,
effective on June 15, 1988. Said executive orders, it was pointed out, were
issued by President Corazon C. Aquino undoubtedly in the exercise of her
revolutionary powers in accordance with Section 6, Article XVIII [Transitory
Provisions] of the 1986 Constitution providing that the "incumbent President
shall continue to exercise legislative powers until the first Congress is
convened."
The petitioner Rufina Vda. de Tangub, now widowed, is once again before this
Court, contending that the Trial Court's "order of dismissal of August 26,
1988, and the decision of the Honorable Court of Appeals affirming it, are
patently illegal and unconstitutional" because they deprive "a poor tenant
access to courts and directly violate R.A. 6657, PD 946, and Batas Bilang 129."
The petition is without merit.
86
Section 1 of Executive Order No. 229 sets out the scope of the
Comprehensive Agrarian Reform Program (CARP). It states that the program
—
". . . shall cover, regardless of tenurial arrangement and commodity produce,
all public and private agricultural land as provided in Proclamation No. 131
dated July 22, 1987, including whenever applicable in accordance with law,
other lands of the public domain suitable to agriculture."
Section 17 thereof.
1) vested the Department of Agrarian Reform with "quasi-judicial powers to
determine and adjudicate agrarian reform matters," and
2) granted it "jurisdiction over all matters involving implementation of
agrarian reform, except those falling under the exclusive original jurisdiction
of the DENR and the Department of Agriculture [DA], as well as "powers to
punish for contempt and to issue subpoena, subpoena duces tecum and writs
to enforce its orders or decisions."
Section 4 of Executive Order No. 129-A made the Department of Agrarian
Reform "responsible for implementing the Comprehensive Agrarian Reform
Program, and, for such purpose," authorized it, among others, to —
"(g) Provide free legal services to agrarian reform beneficiaries and resolve
agrarian conflicts and land tenure problems; . . (and)
x x x
(j) Approve or disapprove the conversion, restructuring or readjustment of
agricultural lands into non-agricultural uses: . ."
And Section 5 of the same Executive Order No. 129-A specified the powers
and functions of the Department of Agrarian Reform, including the
following::- nad
"(b) Implement all agrarian laws, and for this purpose, punish for contempt
and issue subpoena, subpoena duces tecum, writ of execution of its decision,
and other legal processes to ensure successful and expeditious program
implementation; the decisions of the Department may in proper cases, be
appealed to the Regional Trial Courts but shall be immediately executory
notwithstanding such appeal;
x x x
(h) Provide free legal service to agrarian reform beneficiaries and resolve
agrarian conflicts and land tenure related problems as may be provided for
by laws;
(i) Have exclusive authority to approve or disapprove conversion of
agricultural lands for residential, commercial, industrial, and other land uses
as may be provided . . ."
The jurisdiction thus conferred on the Department of Agrarian Reform, i.e.:
(a) adjudication of all matters involving implementation of agrarian reform;
(b) resolution of agrarian conflicts and land tenure related problems; and
(c) approval or disapproval of the conversion, restructuring or readjustment
of agricultural lands into residential, commercial, industrial, and other non-
agricultural uses,
is evidently quite as extensive as that theretofore vested in the Regional Trial
Court by Presidential Decree No. 946, which extended to the rights and
obligations of persons in the cultivation and use of agricultural land, and
other matters affecting tenant-farmers, agricultural lessees, settlers, owner-
cultivators, farms' cooperatives or organizations under laws, Presidential
Decrees, Orders, instructions, Rules and Regulations in relation to the agrarian
reform program. 6 Clearly, the latter must be deemed to have been
eliminated by its being subsumed in the broad jurisdiction conferred on the
Department of Agrarian Reform. The intention evidently was to transfer
original jurisdiction to the Department of Agrarian Reform, a proposition
stressed by the rules formulated and promulgated by the Department for the In these cases, "(t)he Rules of Court shall apply . . unless modified by . . . (the)
implementation of the executive orders just quoted. 7 The rules included the Act."
creation of the Agrarian Reform Adjudication Board designed to exercise the
It is relevant to mention in this connection that —
adjudicatory functions of the Department, and the allocation to it of —
(1) appeals from decisions of the Special Agrarian Courts "may be taken by
". . . original and exclusive jurisdiction over the subject matter vested upon it
filing a petition for review with the Court of Appeals within fifteen (15) days
by law, and all cases, disputes, controversies and matters or incidents
from receipt or notice of the decision, . ." 10 and
involving the implementation of the Comprehensive Agrarian Reform
Program under Executive Order No. 229, Executive Order No. 129-A, Republic (2) appeals from any "decision, order, award or ruling of the DAR on any
Act No. 3844, as amended by Republic Act No. 6289, Presidential Decree No. agrarian dispute or on any matter pertaining to the application,
27 and other agrarian laws and their implementing rules and regulations." implementation, enforcement, or interpretation of this Act and other
pertinent laws on agrarian reform may be brought to the Court of Appeals
The implementing rules also declare that "(s)pecifically, such jurisdiction shall
by Certiorari11 except as otherwise provided . . . within fifteen (15) days from
extend over but not be limited to . . (that theretofore vested in the Regional
receipt of a copy thereof," the "findings of fact of the DAR [being] final and
Trial Courts, i.e.) (c)ases involving the rights and obligations of persons
conclusive if based on substantial evidence." 12
engaged in the cultivation and use of agricultural land covered by the
Comprehensive Agrarian Reform Program (CARP) and other agrarian laws . . ." The Regional Trial Court of Iligan City was therefore correct in dismissing
Agrarian Case No. 1094. It being a case concerning the rights of the plaintiffs
The matter has since been further and definitively clarified by Republic Act
as tenants on agricultural land, not involving the "special jurisdiction" of said
No. 6657, which was signed into law by President Aquino on June 10, 1988
Trial Court acting as a Special Agrarian Court, it clearly came within the
and became effective immediately after its "publication in two (2) national
exclusive original jurisdiction of the Department of Agrarian Reform, or more
newspapers of general circulation" on June 15, 1988. The Act makes
particularly, the Agrarian Reform Adjudication Board, established precisely to
references to and explicitly recognizes the effectivity and applicability of
wield the adjudicatory powers of the Department, supra.
Presidential Decree No. 229. 8 More particularly, the Act echoes the
provisions of Section 17 of Presidential Decree No. 229, supra, investing the The petitioner had not bothered to substantiate her contention that she has
Department of Agrarian Reform with original jurisdiction, generally, over all been denied access to the courts, which is just as well. The contention is on its
cases involving agrarian laws, although, as shall shortly be pointed out, it face utterly without merit. It may profit her and her counsel to realize that
restores to the Regional Trial Court, limited jurisdiction over two groups of apart from granting all concerned parties access to a quasi-judicial forum (the
cases. Section 50 reads as follows: Adjudication Board of the Department of Agrarian Reform), the law strives to
make resolution of controversies therein more expeditious and inexpensive,
"SEC. 50. Quasi-Judicial Powers of the DAR. — The DAR is hereby vested with
by providing not only that the Board "shall not be bound by technical rules of
primary jurisdiction to determine and adjudicate agrarian reform matters and
procedure and evidence," supra, but also that, as explicitly stated by the
shall have exclusive original jurisdiction over all matters involving the
penultimate paragraph of Section 50 of the Act::-cralaw
implementation of agrarian reform, except those falling under the exclusive
jurisdiction of the Department of Agriculture [DA] and the Department of "Responsible farmer leaders shall be allowed to represent themselves, their
Environment and Natural Resources [DENR]. fellow farmers, or their organizations in any proceedings before the DAR:
Provided, however, That when there are two or more representatives for any
It shall not be bound by technical rules of procedure and evidence but shall
individual or group, the representatives should choose only one among
proceed to hear and decide all cases, disputes or controversies in a most
themselves to represent such party or group before any DAR proceedings."
expeditious manner, employing all reasonable means to ascertain the facts of
every case in accordance with justice and equity and the merits of the case. WHEREFORE, for lack of merit, the petition is DISMISSED, and the Decision of
Toward this end, it shall adopt a uniform rule of procedure to achieve a just, the Court of Appeals in CA-G.R. SP. No. 16725 dated October 23, 1989,
expeditious and inexpensive determination of every action or proceeding AFFIRMED, without pronouncement as to costs.
before it.
SO ORDERED.
It shall have the power to summon witnesses, administer oaths, take
testimony, require submission of reports, compel the production of books
and documents and answers to interrogatories and issue subpoena and
subpoena duces tecum and to enforce its writs through sheriffs or other duly
deputized officers. It shall likewise have the power to punish direct and
indirect contempts in the same manner and subject to the same penalties as
provided in the Rules of Court.

x x x

Notwithstanding an appeal to the court of appeals, the decision of the DAR

shall be immediately executory." 9

The Regional Trial Courts have not, however, been completely divested of
jurisdiction over agrarian reform matters. Section 56 of RA 6657, on the other
hand, confers "special jurisdiction" on "Special Agrarian Courts," which are
Regional Trial Courts designated by the Supreme Court — at least one (1)
branch within each province — to act as such. These Regional Trial Courts
qua Special Agrarian Courts have, according to Section 57 of the same law,
original and exclusive jurisdiction over:

1) "all petitions for the determination of just compensation to land-owners,"

and

2) "the prosecution of all criminal offenses under . . [the] Act."

87
G.R. No. 180471 March 26, 2010
ALANGILAN REALTY & DEVELOPMENT CORPORATION, Petitioner,
vs.
OFFICE OF THE PRESIDENT, represented by ALBERTO ROMULO, as Executive
Secretary, and ARTHUR P. AUTEA, as Deputy Secretary; and DEPARTMENT OF
AGRARIAN REFORM, Respondents.
DECISION
NACHURA, J.:
At bar is a petition for review on certiorari under Rule 45 of the Rules of Court filed
by Alangilan Realty & Development Corporation (petitioner), challenging the August
28, 2007 Decision1 and the November 12, 2007 Resolution2 of the Court of Appeals
(CA) in CA-G.R. SP No. 76525.
Petitioner is the owner/developer of a 17.4892-hectare land in Barangays
Alangilan and Patay in Batangas City (Alangilan landholding). On August 7,
1996, petitioner filed an Application and/or Petition for Exclusion/Exemption
from Comprehensive Agrarian Reform Program (CARP) Coverage3 of the
Alangilan landholding with the Municipal Agrarian Reform Office (MARO) of
the Department of Agrarian Reform (DAR). It averred that, in 1982, the
Sangguniang Bayan of Batangas City classified the subject landholding as
reserved for residential under a zoning ordinance (1982 Ordinance), which
was approved by the Human Settlement Regulatory Commission. It further
alleged that, on May 17, 1994, the Sangguniang Panglungsod of Batangas City
approved the City Zoning Map and Batangas Comprehensive Zoning and Land Use
Ordinance (1994 Ordinance), reclassifying the landholding as residential-1.
Petitioner thus claimed exemption of its landholding from the coverage of the CARP.
In support of its application, petitioner submitted a certification4 dated October 31,
1995 of Zoning Administrator Delia O. Malaluan.
On May 6, 1997, then DAR Secretary Ernesto Garilao issued an Order5 denying
petitioner’s application for exemption. The DAR Secretary noted that, as of
February 15, 1993, the Alangilan landholding remained agricultural, reserved for
residential. It was classified as residential-1 only on December 12, 1994 under
Sangguniang Panlalawigan Resolution No. 709, series of 1994. Clearly, the subject
landholding was still agricultural at the time of the efectivity of Republic Act No.
6657, or the Comprehensive Agrarian Reform Law (CARL), on June 15, 1988. The
qualifying phrase reserved for residential means that the property is still classified as
agricultural, and is covered by the CARP.
The DAR Secretary disposed thus:
WHEREFORE, premises considered, the herein application for exemption
involving seventeen (17) parcels of land with an aggregate area of 23.9258
hectares located [in] Calicanto, Alangilan and Patay, Batangas City is hereby
GRANTED insofar as the 4.9123 hectares [of] Calicanto landholdings are
concerned and DENIED with respect to the 17.4892 Alangilan properties,
subject to the payment of disturbance compensation to qualified tenants, if
any there be.
SO ORDERED.6
Petitioner moved for reconsideration of the Order, arguing that the Alangilan
landholding was already reserved for residential use as early as October 6,
1982. Invoking this Court’s ruling in Natalia Realty, Inc. v. Department of Agrarian
Reform,7 petitioner insisted that the subject landholding was outside the coverage
of the CARP. Petitioner also submitted a Supplemental to Motion for
Reconsideration,8 arguing that the landholding had already been reclassified
as reserved for residential and had been earmarked for residential use even
before the effectivity of the CARL. Accordingly, its non-development into a
subdivision did not remove the landholding’s zoning classification as reserved for
residential.
On July 8, 1997, petitioner submitted an Addendum to Supplemental to Motion for
Reconsideration,9 attaching another certification stating that the Alangilan
landholding was zoned as reserved for residential in 1982, and became residential-1
in 1994. In a 2nd Addendum to Supplemental to Motion for
Reconsideration,10 petitioner submitted another certification whereby the zoning
administrator withdrew her first certification and clarified that the phrase
88
agricultural, reserved for residential spoke of two classifications, namely, agricultural
(coded brown in the map) and reserved for residential (coded brown with diagonal
lines), stating further that the Alangilan landholding was reserved for residential.
However, the DAR Secretary was not at all persuaded, and denied petitioner’s
motion for reconsideration on December 21, 1998, viz.:
After a careful review and evaluation of the case, this Office finds no cogent reason
to reverse its Order, dated 6 May 1997.
Administrative Order No. 6, series of 1994 provides that "lands that are classified as
commercial, industrial or residential before 15 June 1988 no longer need any
conversion clearance"; as such, they are exempt from the coverage of R.A. [No.]
6657.
The phrase "Reserved for Residential" is not a zoning classification contemplated in
the aforestated A.O. as to exempt a particular land from the coverage of R.A. 6657.
Moreso in this case, because the phrase was attached to the word "Agricultural"; in
fact, we can say that it merely qualified the term "Agricultural." We believe that the
correct interpretation of the zoning should be that the land is agricultural, but it may
be classified and used for residential purposes in some future time, precisely,
because it has been reserved for residential use. This interpretation is supported by
the fact that the zoning of the land became Residential only in 1994, per Ordinance
No. 3, series of 1994, which established a Comprehensive Zoning Regulation and
Land Use for Batangas City. To reiterate, the Sanggunian Members of Batangas City
would have expressly, unequivocably, and unqualifiedly zoned the area as
"residential" if they had intended it to be zoned as such in 1982. They never did until
the issuance of Ordinance No. 3 in 1994.
It is also important to note, that the legend used in the Zoning Map of Batangas City
approved by HSRC (now HLURB) per Resolution No. 92, dated 6 October 1982,
indicated a certain kind of arrangement which put in sequential order those that
were similarly zoned, but with diferent qualifications and/or characteristics. Thus,
"residential-1," "residential-2," and "residential-3" were placed on top of the list one
after the other, while "Agricultural, reserved for residential" and mining agricultural
were put at the bottom, but also enumerated one after the other. If the subject
properties were classified more of residential than agricultural, it should have been
placed in the legend right after "residential-3", and the color that should have been
used was not brown but a shade of white with diagonal lines to reflect its dominant
residential character.
Even the Applicant was aware that the classification of the area was agricultural. In
his letter to the MARO of Batangas City, dated 24 October 1995, the Applicant
categorically admitted that the Alangilan Landholding was classified as agricultural.
The said letter stated as follows:
At present, the subject properties are classified as agricultural. However, Barangay
Alangilan where these properties are located have been declared by an ordinance of
the Municipal Council of Batangas City as commercial, industrial and/or residential.
As to what ordinance the Applicant was referring to was not specified. However, it
seems obvious that he was referring to the 1994 Comprehensive Zoning Regulations
and Land Use for Batangas City (Ordinance No. 3, series of 1994). The previous
zoning ordinance, i.e. the Batangas City Zoning Ordinance approved under HSRC
Resolution No. R-92, series of 1982, dated 6 October 1982, classified the said
landholding as "Agricultural, Reserved for Residential." It was Ordinance No. 3,
series of 1994 that explicitly classified the area as "Residential-1."
This Office, therefore, is convinced that the zoning classification of the Alangilan
Landholding prior to 15 June 1988 was Agricultural, although with the qualification
that it had been reserved for residential use. The ocular inspection conducted in
1996 by the representatives of the MARO, PARO and RARO confirmed that the
Alangilan Landholding was still used for agricultural purposes. The area was planted
with mangoes and coconuts.
We could not give credence to the 3rd Certification, dated 9 December 1997, of
Zoning Administrator Delia Malaluan-Licarte, because it does not conform to the
Batangas City Zoning Ordinance and Map approved under HSRC Resolution No. R-92,
series of 1982, dated 6 October 1982. In the first place, what is asked from Zoning
Administrators is merely to state the kind of classification/zoning where a certain
area falls as provided in the approved Zoning Ordinance. In the case at bar, the
Zoning Administrator went beyond her authority. In efect, she reclassified the area
from "Agricultural, Reserved for Residential" to "Reserved for Residential" by
claiming that there were actually two zones provided by the Sanggunian Members.
It was actually a modification of the zoning ordinance which, to us, is clearly
unwarranted.
Moreover, even assuming the Zoning Administrator is correct, the classification
"Reserved for Residential" is not within the contemplation of A.O. No. 6, series of
1994. The said A.O. talks about lands that were classified as residential before 15
June 1988. Alangilan Landholding was merely reserved for Residential. It connotes
something in the future, which is, that the land may be classified as residential in
some future time. It was identified as an expansion area, nothing else. The fact
remains that in 1982, the landholding was still Agricultural, and this fact is not
changed by the re-interpretation made by Zoning Administrator Delia Malaluan-
Licarte.11
On appeal, the Office of the President (OP) affirmed the decision of the DAR
Secretary:
WHEREFORE, premises considered, the instant appeal is hereby DISMISSED and
the appealed Order dated 21 December 1998 of the Department of Agrarian Reform
[is] AFFIRMED in toto.
Parties are required to INFORM this Office, within five (5) days from notice, of the
dates of their receipt of this Decision.
SO ORDERED.12
A motion for reconsideration was filed, but the motion also suffered the same
fate, as the OP denied it on March 20, 2003.13
Petitioner went up to the CA via a petition for review on certiorari, assailing
the OP decision. On August 28, 2007, the CA dismissed the petition. The CA
noted the report of MARO, Provincial Agrarian Reform Office (PARO), and Regional
Agrarian Reform Office (RARO) that the Alangilan landholding was devoted to
agricultural activities prior to the efectivity of the CARP on June 15, 1988 and even
thereafter. Likewise, there was no showing that it was classified as commercial,
industrial, or residential in town plans and zoning ordinances of the Housing and
Land Use Regulatory Board. Accordingly, the Alangilan property did not cease to be
agricultural. The 1994 Ordinance classifying the property as residential-1 did not
convert or reclassify the Alangilan landholding as residential because there was no
proof that a conversion clearance from the DAR was obtained. Thus, despite its
reclassification in 1994 by the City Government of Batangas, the Alangilan
landholding remained under CARP coverage. Petitioner filed a motion for
reconsideration, but the CA denied it on November 12, 2007.
Hence, this appeal by petitioner, arguing that:
THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT PETITIONER’S
ALANGILAN LANDHOLDING IS SUBJECT TO THE COVERAGE OF THE COMPREHENSIVE
AGRARIAN REFORM LAW, NOTWITHSTANDING THAT THE PROPERTY HAS BEEN
CONVERTED TO NON-AGRICULTURAL USES BY THE ZONING ORDINANCE OF THE CITY
OF BATANGAS PRIOR TO THE LAW.14
Petitioner insists on exemption of the Alangilan landholding from CARP coverage. It
argues that the subject landholding had already been converted into non-
agricultural use long before the advent of the CARP. The passage of the 1982
Ordinance, classifying the property as reserved for residential, it asserts, efectively
transformed the land into non-agricultural use, and thus, outside the ambit of the
CARL. It cites Natalia, wherein it was ruled that lands intended for residential use are
outside the coverage of the CARL.
Indeed, lands devoted to non-agricultural activity are outside the coverage of
CARL. These include lands previously converted into non-agricultural uses
prior to the effectivity of the CARL on June 15, 1988. Unfortunately, petitioner
failed to convince us that the Alangilan landholding ceased to be agricultural
at the time of the effectivity of the CARL.
It is beyond cavil that the Alangilan landholding was classified as agricultural,
reserved for residential in 1982, and was reclassified as residential-1 in 1994.
However, contrary to petitioner’s assertion, the term reserved for residential
does not change the nature of the land from agricultural to non-agricultural.
As aptly explained by the DAR Secretary, the term reserved for residential
simply reflects the intended land use. It does not denote that the property
has already been reclassified as residential, because the phrase reserved for
residential is not a land classification category.
89
Indubitably, at the time of the effectivity of the CARL in 1988, the subject
landholding was still agricultural. This was bolstered by the fact that the
Sangguniang Panlalawigan had to pass an Ordinance in 1994, reclassifying the
landholding as residential-1. If, indeed, the landholding had already been earmarked
for residential use in 1982, as petitioner claims, then there would have been no
necessity for the passage of the 1994 Ordinance.
Petitioner cannot take refuge in our ruling in Natalia. The case is not on all fours with
the instant case. In Natalia, the entire property was converted into residential use in
1979 and was developed into a low-cost housing subdivision in 1982. Thus, the
property was no longer devoted to agricultural use at the time of the efectivity of
the CARL.
In this case, however, petitioner failed to establish that the subject
landholding had already been converted into residential use prior to June 15,
1988. We also note that the subject landholding was still being utilized for
agricultural activities at the time of the filing of the application for exemption.
The ocular inspection, jointly conducted by the MARO, PARO and RARO, disclosed
that the landholding was planted with mangoes and coconuts.15
In Department of Agrarian Reform v. Oroville Development Corporation,16 we held:
[i]n order to be exempt from CARP coverage, the subject property must have been
classified as industrial/residential before June 15, 1988. In this case, the DAR's
examination of the zoning ordinances and certifications pertaining to the subject
property, as well as its field investigation, disclosed that the same remains to be
agricultural. The Zoning Certifications to the efect that the land is within the city's
potential growth area for urban expansion are inconsequential as they do not reflect
the present classification of the land but merely its intended land use.
Not having been converted into, or classified as, residential before June 15,
1988, the Alangilan landholding is, therefore, covered by the CARP. The
subsequent reclassification of the landholding as residential-1 in 1994 cannot place
the property outside the ambit of the CARP, because there is no showing that the
DAR Secretary approved the reclassification.
In a last-ditch effort to secure a favorable decision, petitioner assails the
authority of the DAR Secretary to determine the classification of lands. It
asserts that the power to classify lands is essentially a legislative function that
exclusively lies with the legislative authorities, and thus, when the
Sangguniang Bayan of Batangas City declared the Alangilan landholding as
residential in its 1994 Ordinance, its determination was conclusive and cannot
be overruled by the DAR Secretary.
The argument is specious.
The exclusive jurisdiction to classify and identify landholdings for coverage
under the CARP is reposed in the DAR Secretary. The matter of CARP
coverage, like the instant case for application for exemption, is strictly part of
the administrative implementation of the CARP, a matter well within the
competence of the DAR Secretary.17 As we explained in Leonardo Tarona, et
al. v. Court of Appeals (Ninth Division), et al.:181avvphi1
The power to determine whether a property is subject to CARP coverage lies
with the DAR Secretary pursuant to Section 50 of R.A. No. 6657. Verily, it is
explicitly provided under Section 1, Rule II of the DARAB Revised Rules that
matters involving strictly the administrative implementation of the CARP and
other agrarian laws and regulations, shall be the exclusive prerogative of and
cognizable by the Secretary of the DAR.
Finally, it is well settled that factual findings of administrative agencies are generally
accorded respect and even finality by this Court, if such findings are supported by
substantial evidence. The factual findings of the DAR Secretary, who, by reason of his
official position, has acquired expertise in specific matters within his jurisdiction,
deserve full respect and, without justifiable reason, ought not to be altered,
modified, or reversed.19 In this case, petitioner utterly failed to show justifiable
reason to warrant the reversal of the decision of the DAR Secretary, as affirmed by
the OP and the CA.
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the
Court of Appeals in CA-G.R. SP No. 76525 are AFFIRMED.
Costs against petitioner.
SO ORDERED.

90
G.R. No. 162446 March 29, 2010
ROMANITA CONCHA, BENITA COSICO, DOMINGO GARCIA, ROMEO DE CASTRO,
PEDRO CONCHA, CONSTANTINO CONCHA, ROLANDO NAVARRO, ROSALINDA DE
TORRES, CANDIDA DE TORRES, RODELO COSICO, TEODOLFO CAPUNO, ANTONIO DE
TORRES, MAXIMA CONCHA, GABRIEL CONCHA, IRINEO CONCHA, AND BRAULIO DE
TORRES, Petitioners,
vs.
PAULINO RUBIO, SOFIA RUBIO, AMBROCIA BARLETA, SEGUNDO CRISOSTOMO,
MILAGROS GAYAPA, LASARO CONCHA, AND LORENSO NAVARRO, Respondents.
DECISION
PERALTA, J.:
Before this Court is a Petition for Review on certiorari,1 under Rule 45 of the Rules
of Court, seeking to set aside the Amended Decision2 of the Court of Appeals (CA),
in CA-G.R. SP No. 73303.
The controversy involves the determination of who between petitioners Romanita
Concha, Benita Cosico, Domingo Garcia, Romeo de Castro, Pedro Concha,
Constantino Concha, Rolando Navarro, Rosalinda de Torres, Candida de Torres,
Rodelo Cosico, Teodolfo Capuno, Antonio de Torres, Maxima Concha, Gabriel
Concha, Irineo Concha, and Braulio de Torres and respondents Paulino Rubio, Sofia
Rubio, Ambrocia Barleta, Segundo Crisostomo, Milagros Gayapa, Lasaro Concha, and
Lorenso Navarro, are qualified to become beneficiaries over a portion of land
covered by Transfer Certificate of Title Nos. T-140494, T-140492 and T-140491,
registered in the name of Lilia E. Gala, Luisita E. Gala and Teresita E. Gala,
respectively, with an aggregate area of 33.5006 hectares, more or less.
The facts of the case, as succinctly put by the CA, are as follows:
The subject landholding was placed under the Compulsory Acquisition
Scheme of the Comprehensive Agrarian Reform Program (CARP) of the
government. On June 16, 1993, a Notice of Coverage was sent to the
landowners.
In her Affidavit dated August 17, 1993, the Municipal Agrarian Reform Officer
(MARO) of Tiaong, Quezon, named as beneficiaries, viz: IRENEO CONCHA,
BRAULIO DE TORRES, LAZARO CONCHA, SEGUNDINA CRISTOMO, AMBROSO
BARLETA, RAYMUNDO GAYAPA, SOFIA RUBIO, SOSIMO LOPEZ, SEGUNDA LOPEZ,
LORENZO NAVARRO, INANG RUBIO, GABRIEL CONCHA, ROMANITA CONCHA, BENITA
COSICO, DOMINGO GARCIA, ROMEO DE CASTRO, PEDRO CONCHA, CONSTANTINO
ZITA, ROLANDO NAVARRO, ROSALINDA DE TORRES, CANDIDA DE TORRES, RODELO
COSICO, TEODOLFO CAPUNO, ANTONIO DE TORRES, and, MAXIMA CONCHA (Annex
"A" of the Complaint, Rollo, pp. 52-53).
On March 24, 1995, respondents filed a complaint for declaration of their
tenancy and their identification as beneficiaries and for disqualification of the
petitioners to become beneficiaries over the subject landholding docketed as
DARAB CASE NO. IV-Qu-1-014-95 (Annex "D", Rollo, pp. 45-51). They alleged that
they are the tenants thereof and have not relinquished their rights over the
same, as they returned the monetary awards given by the landowners (Ibid., p.
4, Rollo, p. 48).
Meanwhile, the registered owners of the subject land entered into a joint
project with 1st A.M. Realty Development Corporation, represented by Atty.
Alejandro Macasaet for its development.
On April 26, 1995, the Department of Agrarian Reform (DAR) approved the
landowners’ application for conversion, subject to the following conditions:
1. The farmer-beneficiary, if any, shall be paid disturbance compensation
pursuant to R.A. 3844 as amended by R.A. 6389;
2. The remaining 18.5006 hectares shall be covered by CARP under
compulsory acquisition and the same be distributed to qualified farmer-
beneficiaries.
xxxx
In relation to paragraph 2 thereof, the MARO pursued the coverage of the
remaining 18.5006 has. The petitioners herein were identified as qualified
farmer-beneficiaries where three (3) Certificates of Land Ownership Awards
(CLOA) were issued in their favor (Annexes "C", "C-1. & "C-2").
91
Respondents, on the other hand, were paid of their disturbance
compensation. They now, however, question the validity and legality of the
institution of the petitioners as beneficiaries over the subject landholding.
Sometime on January 1996, respondents together with the landowners filed
another case for annulment of CLOAs and prayer for Preliminary Injunction
and Restraining Order docketed as DARAB CASE NO. IV-Qu-I-006-96. This case was
consolidated with the earlier DARAB CASE NO. IV-Qu-I-014-95 and the hearing(s)
were jointly held.3
On August 9, 1999, the Office of the Provincial Adjudicator (PARAD) rendered a
Decision4 dismissing the case, the dispositive portion of which reads:
WHEREFORE, it is judged that, this case be, and hereby is, DISMISSED for lack of
merit.
SO ORDERED.5
The PARAD ruled that respondents had waived their rights as tenants and as farmer-
beneficiaries of the Department of Agrarian Reform (DAR) program, as evidenced by
their Salaysay (for respondent Paulino Rubio) and their Magkasamang Sinumpaang
Salaysay (for the rest of the respondents).6 In addition, the PARAD ruled that it had
no authority to rule on the selection of farmer-beneficiaries, as the same was a
purely administrative matter under the jurisdiction of the DAR.7
Respondents filed a Notice of Appeal8 of the PARAD Decision.
On November 17, 2000, the Department of Agrarian Reform Adjudication
Board (DARAB) rendered a Decision9setting aside the PARAD Decision, the
dispositive portion of which reads:
WHEREFORE, premises considered, the appealed decision dated 09 August 1999 is
hereby SET ASIDE. Order is given to the Register of Deeds for the Province of Quezon
to cancel the Certificates of Land Ownership Award issued to Private Defendants-
Appellees, and the MARO of Tiaong, Quezon and PARO for the Province of Quezon
to generate and issue new Certificates of Land Ownership Award in favor of
Plaintifs-Appellants.1avvphi1
SO ORDERED.10
The DARAB ruled that in order for a voluntary surrender by an agricultural tenant of
his landholding to be valid, the same must be done due to circumstances more
advantageous to him and his family − a consideration, which, the DARAB found, was
bereft of any evidence as shown by the records of the case.11
Aggrieved, petitioners filed a Motion for Reconsideration12 of the DARAB
Decision. On September 6, 2002, the DARAB issued a Resolution13 denying
their motion.
Petitioners then appealed to the CA.
On September 9, 2003, the CA issued a Decision14 ruling in favor of petitioners,
the dispositive portion of which reads:
WHEREFORE, premises considered, the petition is hereby GRANTED. The 17
November 2000 Decision of the DARAB is REVERSED and SET ASIDE. The titles over
the subject land issued in favor of herein petitioners are upheld.
SO ORDERED.15
Respondents then filed a Motion for Reconsideration of the CA Decision.
On February 27, 2004, the CA issued an Amended Decision16 granting
respondents’ motion for reconsideration, the dispositive portion of which reads:
WHEREFORE, premises considered, the Motion for Reconsideration is hereby
GRANTED and the DARAB Decision dated November 17, 2000 is REINSTATED.
SO ORDERED.17
The salient portions of the Amended Decision are hereunder reproduced to
wit:
A more than cursory reading of the arguments in support of their Motion for
Reconsideration prompted Us to reconsider Our Decision for the following reasons:
 1. Why would respondents choose to remain tenants on the 15-hectare
retained area when they can be beneficiaries of the 18-hectare remaining
portion of the subject agricultural land? In other words, why would they
choose to be leaseholders when they can be landowners?
2. If indeed they chose to remain in the 15-hectare retained area, the
same was eventually developed into a residential subdivision under the
Conversion Order issued by the DAR. Obviously, there can be no
agricultural tenant over a residential land. And
3. It is indubitable that respondents are recognized tenants on the
subject land and they had returned the disturbance compensation for the
15-hectare retained area and instead, opted to be beneficiaries over the
CARP covered 18-hectare portion. Respondents should therefore be given
the priority in the selection of qualified farmer-beneficiaries under
Section 22 of RA 6657.18
Hence, herein petition, with petitioners raising a sole assignment of error, to
wit:
WHETHER OR NOT THE HONORABLE DEPARTMENT OF AGRARIAN REFORM
ADJUDICATION BOARD (DARAB) IS CLOTHED WITH JURISDICTION TO RESOLVE THE
ISSUE INVOLVING THE IDENTIFICATION AND SELECTION OF QUALIFIED FARMER-
BENEFICIARIES OF A LAND COVERED BY THE COMPREHENSIVE AGRARIAN REFORM
PROGRAM (CARP).19
The petition is meritorious.
Petitioners argue that the DARAB is not clothed with the power or authority
to resolve the issue involving the identification and selection of qualified
farmer-beneficiaries since the same is an Agrarian Law Implementation case,
thus, an administrative function falling within the jurisdiction of the DAR
Secretary.20
Petitioners’ argument is well taken.
In Lercana v. Jalandoni,21 this Court was categorical in ruling that the identification
and selection of CARP beneficiaries are matters involving strictly the
administrative implementation of the CARP, a matter exclusively cognizable
by the Secretary of the Department of Agrarian Reform, and beyond the
jurisdiction of the DARAB.22
In addition, in Sta. Rosa Realty Development Corporation v. Amante,23 this
Court had an occasion to discuss the jurisdiction of the DAR Secretary in the
selection of farmer-beneficiaries, to wit:
x x x Suffice it to say that under Section 15 of R.A. No. 6657, the identification
of beneficiaries is a matter involving strictly the administrative
implementation of the CARP, a matter which is exclusively vested in the
Secretary of Agrarian Reform, through its authorized offices. Section 15 reads:
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 farm workers 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.
Meanwhile, Administrative Order No. 10 (Rules and Procedures Governing the
Registration of Beneficiaries), Series of 1989, provides:
SUBJECT: I. PREFATORY STATEMENT
92
Pursuant to Section 15, Chapter IV, of the Comprehensive Agrarian Reform Law of
1988, the DAR, in coordination with the Barangay Agrarian Reform Committee
(BARC), as organized pursuant to RA 6657, shall register all agricultural lessees,
tenants and farm workers who are qualified beneficiaries of the CARP. This
Administrative Order provides the Implementing Rules and Procedures for the said
registration.
xxxx
B. Specific
1. Identify the actual and potential farmer-beneficiaries of the CARP.24
Even a perusal of the DARAB Revised Rules shows that matters strictly
involving the administrative implementation of the CARP and other agrarian
laws and regulations, are the exclusive prerogative of, and cognizable by, the
Secretary of the DAR. Rule II of the said Rules read:
SECTION 1. Primary, Original and Appellate Jurisdiction. – The Agrarian Reform
Adjudication Board shall have primary jurisdiction, both original and appellate, to
determine and adjudicate all agrarian disputes, cases, controversies, and matters or
incidents involving the implementation of the Comprehensive Agrarian Reform
Program under Republic Act No. 6657, Executive Order Nos. 229, 228 and 129-A,
Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree
No. 27 and other agrarian laws and their implementing rules and regulations.
Specifically, such jurisdiction shall extend over but not be limited to the
following:
a) Cases involving the rights and obligations of persons engaged in the
cultivation and use of agricultural land covered by the Comprehensive
Agrarian Reform Program (CARP) and other agrarian laws;
b) Cases involving the valuation of land, and determination and payment
of just compensation, fixing and collection of lease rentals, disturbance
compensation, amortization payments, and similar disputes concerning
the functions of the Land Bank;
c) Cases involving the annulment or cancellation of orders or decisions of
DAR officials other than the Secretary, lease contracts or deeds of sale or
their amendments under the administration and disposition of the DAR
and LBP;
d) Cases arising from, or connected with membership or representation
in compact farms, farmers’ cooperatives and other registered farmers’
associations or organizations, related to land covered by the CARP and
other agrarian laws;
e) Cases involving the sale, alienation, mortgage, foreclosure, pre-
emption and redemption of agricultural lands under the coverage of the
CARP or other agrarian laws;
f) Cases involving the issuance of Certificate of Land Transfer (CLT),
Certificate of Land Ownership Award (CLOA) and Emancipation Patent
(EP) and the administrative correction thereof;
g) And such other agrarian cases, disputes, matters or concerns referred
to it by the Secretary of the DAR.
Provided, however, that matters involving strictly the administrative
implementation of the CARP and other agrarian laws and regulations, shall be
the exclusive prerogative of and cognizable by the Secretary of the DAR.25
The administrative function of the DAR is manifest in Administrative Order
No. 06-00,26 which provides for the Rules of Procedure for Agrarian Law
Implementation Cases. Under said Rules of Procedure, the DAR Secretary
has exclusive jurisdiction over identification, qualification or
disqualification of potential farmer-beneficiaries. Section 2 of the said Rules
specifically provides, inter alia, that:
SECTION 2. Cases Covered. - These Rules shall govern cases falling within
the exclusive jurisdiction of the DAR Secretary which shall include the following:
(a) Classification and identification of landholdings for coverage under the
Comprehensive Agrarian Reform Program (CARP), including protests or
oppositions thereto and petitions for lifting of coverage;
 (b) Identification, qualification or disqualification of potential farmer-
beneficiaries;
(c) Subdivision surveys of lands under CARP;
(d) Issuance, recall or cancellation of Certificates of Land Transfer (CLTs)
and CARP Beneficiary Certificates (CBCs) in cases outside the purview of
Presidential Decree (PD) No. 816, including the issuance, recall or
cancellation of Emancipation Patents (EPs) or Certificates of Land
Ownership Awards (CLOAs) not yet registered with the Register of Deeds;
(e) Exercise of the right of retention by landowner; x x x27
Based on the foregoing, the conclusion is certain that the DARAB had no
jurisdiction to identify who between the parties should be recognized as the
beneficiaries of the land in dispute, as it was a purely administrative function
of the DAR. The PARAD was, thus, correct when it declared that it had no
jurisdiction to resolve the dispute, to wit:
As earlier stated no other agency of government is empowered or authorized by law
in the selection and designation of farmer beneficiaries except the DAR being purely
an administrative function. The Adjudication Board is not clothed with power and
authority to rule on the selection of farmer beneficiaries. To do so would be an ultra
vires act of said Board, being administrative in character.28
It behooves this Court to ask why the DARAB granted affirmative relief to
respondents, when clearly the PARAD decision subject of appeal was categorical
about its lack of jurisdiction. A reading of the DARAB Decision, however, shows that
no discussion of the Board’s jurisdiction was made. The failure of the DARAB to look
into the jurisdictional issue may, however, be attributed to the fact that petitioners
did not raise said issue before the DARAB. Nevertheless, this Court is of the
opinion that the same should not be an excuse for, nor should it warrant, the
DARAB’s action, especially since a plain reading of the PARAD Decision, as
earlier stated, shows that it categorically discussed the body’s lack of
jurisdiction. The same holds true for the CA Decision, which did not tackle the
jurisdictional impediment hounding the petition notwithstanding that petitioners
raised said issue in their petition.
While this Court in Torres v. Ventura29 ruled that it was hard to believe that a
tenant, who had been tilling the land in question for a long time, would suddenly
lose interest in it and decide to leave it for good and at a time when he knew that
full ownership over the same was soon going to be in his hands,30 this Court
believes that the same consideration should not apply to the case at bar.
In Department of Agrarian Reform v. Department of Education, Culture and
Sports,31 this Court held that the administrative prerogative of DAR to identify and
select agrarian reform beneficiaries holds sway upon the courts:
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, 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. x x x 32
Thus, the Municipal Agrarian Reform Officer’s (MARO) decision not to include
respondents as farmer-beneficiaries must be accorded respect in the absence of
abuse of discretion. It bears stressing that it is the MARO or the Provincial Agrarian
Reform Officer (PARO) who, together with the Barangay Agrarian Reform
Committee, screens and selects the possible agrarian beneficiaries.33 If there are
farmers who claim they have priority over those who have been identified by the
MARO as beneficiaries of the land, said farmers can file a protest with the MARO or
the PARO who is currently processing the Land Distribution Folder.34 Afterwards,
the proper recourse of any individual who seeks to contest the selection of
beneficiaries is to avail himself of the administrative remedies under the DAR and
not under the DARAB, which is bereft of jurisdiction over this matter.
In any case, it appears to this Court that the decision of the MARO was
arrived at after due consideration of the circumstances of the case. On this
93
note, this Court takes notice of the Affidavit35 of the MARO explaining her
reason for excluding respondents as farmer-beneficiaries. The pertinent
portions of the Affidavit are hereunder reproduced, thus:
xxxx
That, in said Affidavit, I certified that the Plaintif-Appellants (Paulino Rubio et al.)
were included in the list of beneficiaries of the subject landholding, but they refused
to sign in the prescribed CA forms of the DAR to facilitate the documentation,
instead executed two (2) "Sinumpaang Salaysay" dated Oct. 5, 1993 x x x;
That, I have done my best to convince the said Plaintif-Appellants to cooperate in
the documentation under Compulsory Acquisition of the subject landholdings, but
with violent reaction, they said, they already received disturbance compensation
from the landowners in CASH and lots x x x;
That, the said lots with a total area of 1.5 hectares should be part of 18.5 hectares to
be covered by CARP, as mentioned in the ORDER issued by DAR Undersecretary JOSE
C. MEDINA, JR., dated April 26, 1995, but Mr. Paulino Rubio (Plaintif-Appellant)
requested 1.5 hectares were already given to them (Plaintif-Appellants) by the
landowners, Teresita Gala as part of their disturbance compensation and should be
processed through VLT which the undersigned MARO agreed; x x x.
That, it is not true, they (Plaintif-Appellants) returned the money given by the
landowners, in fact, they used it in building their houses in the lot given to them;
That, the said lot was already transferred to Sps. Paulino Rubio and Isabel B. Rubio
through private transaction without DAR Clearance as evidence by the herein-
attached Xerox copies of TCT No. T- 360494 and Tax Declaration No. 39-013-0778;
xxxx
That, after the said Plaintif-Appellants build their houses in 1993 in the above-
mentioned lots, and after the above-mentioned "SINUMPAANG SALAYSAY" were
executed, they already abandoned the landholding in question, reason why the
MARO, BARC and partner NGO KAMMPIL- Mr. Pastor Castillo to screen additional
beneficiaries from the regular farm workers of the subject landholdings- such as
magtatabas, mag-iipon, magkakariton who lived in adjacent barangays; x x x.36
The foregoing declaration of the MARO strengthens the earlier Decision of
the PARAD which ruled that the waivers executed by respondents were valid
and binding, thus:
The text and substance of the affidavit of Paulino Rubio, quoted as follows:
1) Na sinasabi nina IRENEO CONCHA AT BRAULIO DE TORRES sa kanilang
sinumpaang salaysay may petsa Agosto 17, 1993 na ako raw ay CARP
beneficiary sa lupang sakop ng Titulo No. T-140491, T-140492 at T-
140494 na ako ang kanilang tinutukoy na Inang Rubio pagkat ang palayaw
sa akin ay Inong;
2) Na ang naulit na salaysay ay kasinungalingan at maaaring sila ay
managot sa Batas dahil sa salaysay na iyan at ako naman ay walang
ginawang application bilang beneficiary sa mga lupang naulit;
3) Na itong si Braulio de Torres ay tumanggap na rin ng disturbance
compensation buhat sa may-ari ng lupa noong Hunio 7, 1993 at ito
namang si Ireneo Concha kailan man ay walang naging karapatan ano
man sa lupa sapagkat ang nagtrabajo sa lupa ay ang kaniyang kapatid na
si Gabriel Concha na tumanggap din ng disturbance compensation;
4) Na hindi rin naman mga beneficiaries itong sina Maxima Concha na
kapatid ni Gabriel at ang kanyang asawa na si Teodulfo Capuno at si
Romanita Concha na asawa ni Ireneo; hindi rin beneficiaries itong asawa
ni Braulio na si Candida de Torres and at ang kanilang anak na si Antonio
de Torres at manugang na si Rosalinda de Torres;
5) Yaong mga binayaran ng disturbance compensation ay kusang-loob
nilang inalis ang kanilang mga bahay sa loob ng niogan at ang lahat nang
binanggit ko sa itaas ay pawang wala ng mga bahay sa niogan maliban kay
Braulio de Torres na ayaw umalis;
6) Na hindi rin beneficiaries itong mga dayuhan na sina Nenita at Rodelo
Cosico at si Constantino Zita;
7) Kung ako man ay gagawing beneficiary sa lupa pagdating ng panahong
ito ay aking tatalikuran pagka’t wala namang pakikinabangin sa niogan na
 matatanda na ang puno ng niog na dapat ng putulin sapagka’t maliliit ang
bunga.37
Noted that affiant Paulino Rubio, admitted that he never applied as farmer
beneficiary (Paragraph 2- Affidavit). That in case he (Paulino) will be listed as
farmer beneficiary, he will reject it for the land is no longer productive as the
coconut existing thereon are already old and it is ready to be cut and are no
longer bearing fruits (Paragraph 7- Affidavit).
Abundantly shown that the rest of the co-plaintifs in their Joint "Magkasamang
Sinumpaang Salaysay" (Annex "2") stated, textually quoted:
1) Na sinasabi nina IRENEO CONCHA at BRAULIO DE TORRES sa kanilang
sinumpaang salaysay may petsa Agosto 17, 1993 na kami raw ay mga
CARP beneficiaries sa lupang sakop ng Titulo No. T-140491, T-140492 at T-
140494;
2) Na ang naulit nilang salaysay ay hindi totoo sapagka’t wala naman
kaming ginawang pagaaply bilang beneficiary sa naulit na mga lupa at
kung inilista man kami ang pagkakalista ay hindi namin alam;
3) Na kami ay binigyan ng disturbance compensation at binigyan ng mga
lote na may-ari ng lupa bago iyon ipinagbili upang gawing social housing
project at kami naman ay lubos na nasiyahan sa ginawa sa amin ng may-
ari ng lupa;
4) Na ayaw na naming magtrabaho sa lupa na ito ay niogan na ang mga
puno ay laos na may mga 100 taon na ang edad at ang mga bunga ay labis
ang liliit at hindi naman kami napayag na gawain kaming mga
beneficiaries sa lupa, kaya nga lumagda na rin kami noong Hunio 7, 1993
sa pagsasauli sa lupa sa may-ari;
5) At kung nagkaroon man kami ng karapatan bilang mga CARP
beneficiaries sa naulit na lupa ay ito ay aming tinatalikuran na ngayon sa
aming pagkakalagda sa kasulatang ito.38
Joint affiants-co-plaintiffs clearly stated that they never applied as farmer
beneficiaries in the subject land, and if ever their names were listed in the
"DAR List" of farmer beneficiaries, it was not with their consent and
knowledge (Paragraph 2- Affidavit). Further, affiants stated that they were
paid "disturbance compensation" by the landowner and additionally given
"homelots" by said landowner (Paragraph 3- Affidavit). That they are no
longer interested to be listed and designated farmer beneficiaries for they can
no longer make use, nor benefit from the land, as the existing coconuts are
already 100 years old, and that by virtue of this joint "Salaysay", they
surrendered voluntarily their respective landholdings to the landowner
(Paragraph 4-Affidavit). That in case they will be listed and designated as
CARP beneficiaries, they will reject such offer or renounce or waive the
same.39
In addition, the PARAD observed that respondents were motivated by greed when
they chose to repudiate their sworn statements, thus:
After an assiduous study and re-examination of the evidence on hand, the
Adjudicator found DAR to have legal and valid reasons in the exclusion of
plaintiffs as farmer-beneficiaries based on their sworn statement which
waived and renounced their rights as tenants and farmer- beneficiaries of the
program. This was based on the fact that plaintiffs were awarded individual
"homelots" and paid disturbance compensation by the landowner. It is
observed clearly by the Adjudicator that plaintifs took a bold stance to deny or
repudiate their sworn statement simply to enable them to be allocated farm land
together with the defendants herein. The Board found that plaintifs were motivated
by greed which will cause undue prejudice to the rights of the defendants herein.
Plaintifs wanted a lion’s share of the land by claiming for more areas covered by the
program, apart from what they received from the landowner, a homelot and
disturbance compensation. This postulate cannot be countenanced by this Board,
otherwise plaintifs will enrich themselves at the expense of the defendants.40
which is later declared to be under the coverage of CARP, is not automatically
chosen; nor does he have absolute entitlement to be identified as the farmer-
beneficiary thereof as can be gleaned from Section 18 of Republic Act No.
6657, which provides for an order of priority of qualified farmer beneficiaries,
thus:
Sec. 22. Qualified Beneficiaries. — The lands covered by CARP shall be distributed
as much as possible to landless residents of the same barangay, or in the absence
thereof, landless residents of the same municipality in the following order of
priority;
(a) agriculture lessees and share tenants.
(b) regular farm workers;
(c) seasonal farm workers;
(d) other farm workers;
(e) actual tillers or occupants of public lands;
(f) collectives or cooperatives of the above beneficiaries; and
(g) others directly working on the land.
The finding of the MARO declaring petitioners as beneficiaries of the land in
dispute must, therefore, be accorded respect. It should also be equally
binding on the DARAB for the simple reason that the latter has no appellate
jurisdiction over the former: The DARAB cannot review, much less reverse, the
administrative findings of DAR.42Instead, the DARAB would do well to defer
to DAR’s expertise when it comes to the identification and selection of
beneficiaries, as it did in Lercana where this Court noted with approval that, in
the dispositive portion of its decision, left to the concerned DAR Offices the
determination of who were or should be agrarian reform beneficiaries. In fact,
this course of action available to the DARAB is now embodied in Rule II of its 2003
Rules of Procedure, thus:
Section 5. Referral to Office of the Secretary (OSEC). − In the event that a case filed
before the Adjudicator shall necessitate the determination of a prejudicial issue
involving an agrarian law implementation case, the Adjudicator shall suspend the
case and, for purposes of expediency, refer the same to the Office of the Secretary
or his authorized representative in the locality x x x.
While it bears emphasizing that findings of administrative agencies − such as the
DARAB − which have acquired expertise because their jurisdiction is confined to
specific matters, are accorded not only respect but even finality by the courts. Care
should be taken so that administrative actions are not done without due regard to
the jurisdictional boundaries set by the enabling law for each agency.43 In the case
at bar, the DARAB has overstepped its legal boundaries in taking cognizance
of the controversy between petitioners and respondents in deciding who
should be declared the farmer-beneficiaries over the land in dispute. The CA
thus erred in affirming the decision of the DARAB, which was rendered in
excess of jurisdiction.
WHEREFORE, premises considered, the petition is GRANTED. The February 27, 2004
Amended Decision of the Court of Appeals in CA-G.R. SP No. 73303 is hereby
REVERSED and SET ASIDE. The September 9, 2003 Decision of the Court of Appeals is
REINSTATED.
SO ORDERED.

While respondents allege that they are the true tenants of the landholdings in
dispute, petitioners beg to difer, claiming that they, together with respondents, are
the tenants of the land and that the latter have relinquished their rights.41 This
Court cannot address such allegation, as the same is within the exclusive jurisdiction
of the DAR. In any case, it must be stressed that a tenant of a parcel of land,
94
G.R. No. 103953 March 25, 1999
SAMAHANG MAGBUBUKID NG KAPDULA, INC., petitioner-appellant,
vs.
THE HONORABLE COURT OF APPEALS, PONCIANO DUCUSIN, AQUILINO DUCUSIN,
EUFEMIO CABINGAN, LEONARDO DIAZ, REYNALDO PEREZ, SERAPIO FIRME,
RICARDO BRAZA, ANTONIO BAUTISTA, ROMULO BUCLATIN, EULOGIO
PARANAQUE, JR., AGAPITO DUCUSIN, DELFIN DUCUSIN, REYNALDO GARCIA,
MARTIN SALAZAR, MELECIO LAYON, CIRIACO ABEJERO, BASILIO BUCLATIN, FERLITA
BUCLATIN, RUFINA BUCLATIN, BONIFACIO BUCLATIN, LUNINING BUCLATIN,
LEONARDO BEJESON, REGENTOR CONTANER, DANILO GONZALES, EMILIO
DUCUSIN, GERMAN DUCUSIN, MARCIANO BACAY, IRENEO DUCUSIN, LEONARDO
DUCUSIN, ALEJANDRO DUCUSIN, WILLIE CADESALE, MARTIN DE LA CUESTA,
DOMINGO ORENSE, CRESENCIA LOPEZ, PONCIANO BELTRAN, JUN DOYOLA,
DONATO CRUZ, MIGUEL BUGAGAO, LUCIO ILAO, ALFREDO COSTACIO, HILARION
CARAIG, LARRY DE LA VEGA, RAYMUNDO SOBEJANO, AVELINO DUCUSIN,
ROSENDO DUCUSIN, VICENTE RIVERA, BONGBONG BACAY, DONATO CASCANO,
EDGARDO DUCUSIN, OLIVER DUCUSIN, ARMANDO BEJESON, ROMEO OBIAS,
JOMARIE LALAGON, ROGELIO SEVILLA, MICHAEL DUCUSIN, MAURA BUCLATIN,
ERNESTO MOGAR, FILEMON ANARNA, RUPERTO ILAO, RUPERTO MENDOZA,
CARLOS MENDOZA, ALFREDO DRIZ, MARIO CABINGAN, JUAN SOMBILLO, EUGENIO
MERCADO, CECILLIO BENIG, JR., ROMIE LUYAS, ALFONSO BULAHAN, ADAM
CARBADILLA, PEPITO CADESALE, LIWAYWAY CAPARAS, EVARISTO CREUS, RAUL
GONZAGA, ANTONIO GONZAGA, SANO ADION, REYNALDO ZORINO, WILFREDO
ALILING, and BERNARDO ASUNCION, respondent-appellees.
PURISIMA, J.:
At bar is a petition for review on certiorari under Rule 45 of the Revised Rules of
Court assailing the Decision 1 of the Court of Appeals in CA-G.R. SP No. 26173.
The facts that matter are as follows:
Macario Aro was the former owner of two (2) parcels of agricultural land with
an aggregate area of 168.7 hectares, more or less in Barangay Malinta.
Dasmariñas Cavite. The members of petitioner Samahang Magbubukid Ng
Kapdula, Inc. were the tenants on the two (2) parcels of land.
Sometimes in 1979 or 1980, Mr. Aro sold the said parcels of land to Arrow
Head Golf Club, Inc., which was founded by Ricardo Silverio who envisioned to
establish a car assembly plant within the area. In the process, the member of
petitioner were evicted. But the establishment of a car assembly plant in the place
never materialized.
The parcels of land in question were later leased to the spouse, Ruben
Rodriguez and Gloria Bugagao, for a term of seven (7) years from July 8, 1983
to July 8, 1990 2, and where then developed into a sugarcane plantation, with
the herein private respondents as the regular farmworkers.
On July 13, 1984, the same property was acquired by the Philippine National
Bank (PNB) at a Sheriff auction sale.3
In 1986, the members of petitioner sought the assistance of the former
Ministry of Agrarian Reform (MART), now Department of Agrarian Reform
("DAR"), thought then Minister Heherson Alvarez, for their reinstatement as
farmworkers thereon, but nothing came out of such efforts.
The ownership of subject parcels of land was later transferred to the Asset
Privatization Trust ("APT") which conveyed the same on March 19, 1991 to the
Republic of the Philippines, represented by the DAR. 4
On March 26, 1991, in furtherance of its objective of instituting agrarian
reform in the country, the DAR issued Certificate of Land Ownership ("CLOA")
Nos. 1116 5 and 11176 for the said parcels of the land in favor of the
petitioner.
On September 27, 1991, the private respondents filed a Petition
for Certiorari with Court of Appeals, assailing the issuance of said CLOAs to
the petitioner.
On January 30, 1992, the Court of Appeals granted the petition, disposing thus:
95
WHEREFORE, the petition is hereby GRANTED in that the respondent.
Department of Agrarian Reform be directed to conduct a hearing
and/or investigation, with due notice to the herein petitioners, to
determine the rightful beneficiaries of the subject parcels of land in
accordance with the R.A. No. 6657 or the CARP; and to cause the
cancellation of the Transfer Certificates of Title Nos. CLOA-1116 and
1117 in the name of private respondent be found not intitled to the subject
parcels of land. 7
Dissatisfied therewith, the petitioner has come to this Court to assail the
Decision of the Court of Appeals, contending that:
I
THE RESPONDENT COURT ERRED IN NOT DISMISSING THE
PETITION FOR CERTIORARI FOR NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES.
I-A
THE RESPONDENT COURT ERRED IN ITS FINDING THAT HEREIN
PRIVATE RESPONDENTS WERE NOT GIVEN OPPORTUNITY TO BE
HEARD IN THE ADMINISTRATIVE PROCEEDINGS CONDUCTED
PRECEDING THE ISSUANCE OF THE AWARDS.
I-B
THE RESPONDENT COURT ERRED IN ITS FINDING THAT
DETERMINATION OF QUALIFIED BENEFICIARIES IS A DECISION
OF THE SECRETARY AND THAT RESORTING TO THE DAR
ADJUDICATION BOARD OF QUESTION SUCH DECISION IS
UNAVAILING.
II
THE RESPONDENT COURT ERRED IN ITS FINDING THAT THERE
WAS FAILURE TO OBSERVE DUE PROCESS IN THE ISSUANCE OF
THE TCT NOS. CLOA-1116 AND CLOA-1117 IN THE NAME OF
HEREIN PETITIONER.
II-A
THE RESPONDENT COURT ERRED IN NOT UPHOLDING THE
PRESUMPTION THAT OFFICIAL DUTY HAS BEEN REGULARLY
PERFORMED ABSENT EVIDENCE TO THE CONTRARY.
III
THE RESPONDENT COURT ERRED IN DIRECTING THE DAR TO
CONDUCT A HEARING AND/OR INVESTIGATION, WITH DUE
NOTICE TO HEREIN PRIVATE RESPONDENTS, TO DETERMINE
THE RIGHTFUL BENEFICIARIES OF THE SUBJECT PARCELS OF
LAND IN ACCORDANCE WITH R.A. NO. 6657, AND TO CAUSE
THE CANCELLATION OF TCT NOS. CLOA-1116 AND CLOA-1117
IN THE NAME OF HEREIN PETITIONER SHOULD IT BE FOUND
NOT ENTITLED THERETO.
III-A
THE RESPONDENT COURT ERRED IN NOT GIVING RESPECT AND
REGARDING WITH FINALITY THE FINDINGS OF FACT OF DAR.
IV
THE RESPONDENT COURT ACTED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN ITS
FINDING OF FACTS WHICH IS NOT SUPPORTED BY EVIDENCE.
Petitioner-appellant's submission boil down to two pivotal issues:
1. Whether or not there was observance of due process by the Department of
Agrarian Reform prior to the issuance of CLOA Nos. 1116 and 1117 in favor of
petitioner; and
2. Whether there was a need for the private respondents to exhaust administrative
remedies before filing their petition for certiorari with the Court of Appeals.
Petitioner contends that before taking recourse to the Court of Appeals, the Rodriguez, who no longer possessed the said properties as his lease thereover
private respondents should have first exhausted all administrative remedies ended on July 8, 1990.
available to them. On the ground of non-exhaustion of administrative
There is thus a need for further hearings to determine the beneficiaries of
remedies, the respondent court should have dismissed the petition of private
subject parcels of land. In such hearings, the private respondents, who were
respondents. To buttress its stance, petitioner cited Section 50 8 of Republic Act
deprived of an opportunity to be heard before the DAR, should participate.
No. 6657 (RA 6657) and Section 1 Rule II of the Revised Rules of the DAR
This is in pursuance of the provisions of Section 40(4) 17, in relation to Section
Adjudication Board 9 vesting the DAR and DAR Adjudication Board (DARAB) with
2218 of RA 6657, providing for the order of priority of the qualified beneficiaries of
jurisdiction to resolve agrarian reform disputes, including the issuance of CLOAs.
CARP.
The Court Appeals, on the other hand, opined that determination by secretary
WHEREFORE, the petition is hereby DENIED and the Decision of the Court of Appeals
of the Department of Agrarian Reform as the rightful beneficiaries has the in CA-G.R. SP No. 26173 AFFIRMED. No pronouncement as to costs.
effect of a final ruling or award by the DAR itself and therefore, resort to
DARAB to question the ruling of the Secretary would be improper. There is SO ORDERED.
thus no need to exhaust administrative remedies, under the premises.

From the DARAB Revised Rules of Procedure, it can be gleaned that decisions
of the DAR Secretary cannot be questioned before DARAB. Pertinent rules,
provide:

Sec. 1. Primary, Original and Appellate Jurisdiction. The

Agrarian Reform Adjudication Board shall have primary
jurisdiction, both original and appellate, to determine and
adjudicate all agrarian disputes, cases, controversies, and
matters or incidents involving the implementation of the
Comprehensive Agrarian Reform Program under Republic Act.
6657, Executive Order Nos. 229, 228 and 129-A, Republic Act
No. 3844 as amended by Republic Act. No. 6389, Presidential
Decree No. 27 and other agrarian laws and their implementing
rules and regulations.

Specifically, such jurisdiction shall extend over but not be

limited to the following:

xxx xxx xxx

(c) Cases involving the annulment or cancellation of orders or

decisions or DAR officials other than the secretary, lease
contracts or deeds of sale or their amendments under the
administration and disposition of the DAR and LBP," (Rule II
DARAB Revised Rules of Procedure) (emphasis ours).

From the foregoing, it is decisively clear that DARAB may only entertain
appeals from decisions or orders of DAR officials other than the Secretary. It
is also irrefutable that the issuance of subject CLOAs constituted a decision of
the Secretary, who issued and signed the same. 10

Consequently, the propriety of the recourse by private respondents to the

respondent court on petition for certiorari, to assail the issuance by the DAR
of the CLOAs in question, is beyond cavil. Under Section 54 of RA 6657,
decisions and awards of the DAR may be brought to the Court of Appeals
by certiorari. 11

Time and again, this court has ruled that in cases of denial of due process,
exhaustion of available administrative remedies is unnecessary. 12 The
aggrieved party may seek judicial relief outright.

But was there a denial of due process under the attendant facts and circumstances?
Respondent court found that the herein private respondents were denied the
opportunity to ventilate their stance before the DAR. But according to the petitioner,
during the investigation and conferences conducted on the question of inclusion of
subject properties in the Comprehensive Agrarian Reform Program of the
government, Mr. Ruben Rodriguez was notified of the same, as evidenced by
Annexes "E" 13, "F" 14, "F-1" 15, and "F-2". 16

Records show, however, that the letter (Annex "E"), which was supposed to be the
notice to the private respondents regarding the inclusion of subject properties in the
CARP, was inefective. First of all, the letter of Provincial Agrarian Reform Officer
Serapio T. Magpayo to Mr. Ruben Rodriguez indicates no receipt of the same by Mr.
Rodriguez nor was it signed by Mr. Magpayo. Secondly, if it was ever sent, it was sent
too late, the same being dated June 5, 1991, when the said parcels of land had
already been awarded to the members petitioner. (The CLOAs under controversy
were issued on March 26, 1991.) Thirdly, the letter was addressed to Mr. Ruben

96
G.R. No. 180384 March 26, 2010
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
CORAZON M. VILLEGAS, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 180891
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
HEIRS OF CATALINO V. NOEL and PROCULA P. SY, Respondents.
DECISION
ABAD, J.:
These consolidated cases1 are about the jurisdiction of a Regional Trial Court (RTC),
acting as a Special Agrarian Court, over just compensation cases involving
agricultural lands located outside its regular territorial jurisdiction but within the
province where it is designated as agrarian court under the Comprehensive Agrarian
Reform Law of 1988.
The Facts and the Case
Petitioner Land Bank of the Philippines (Land Bank) filed cases for
determination of just compensation against respondent Corazon M. Villegas
in Civil Case 2007-14174 and respondent heirs of Catalino V. Noel and Procula
P. Sy in Civil Case 2007-14193 before the RTC of Dumaguete City, Branch 32,
sitting as a Special Agrarian Court for the province of Negros Oriental.
Respondent Villegas’ property was in Hibaiyo, Guihulngan City, Negros
Oriental, while respondent heirs’ land was in Nangca, Bayawan City, Negros
Oriental. These lands happened to be outside the regular territorial
jurisdiction of RTC Branch 32 of Dumaguete City.
On September 13, 2007 RTC, Branch 32 dismissed Civil Case 2007-14174 for
lack of jurisdiction.2 It ruled that, although it had been designated Special Agrarian
Court for Negros Oriental, the designation did not expand its territorial jurisdiction
to hear agrarian cases under the territorial jurisdiction of the RTC, Branch 64 of
Guihulngan City where respondent Villegas’ property can be found.
On November 16, 2007 RTC, Branch 32 also dismissed Civil Case 2007-14193 for
lack of jurisdiction. It pointed out that RTC, Branch 63 of Bayawan City had
jurisdiction over the case since respondent heirs’ property was within the latter
court’s territorial jurisdiction.
Petitioner Land Bank moved for the reconsideration of the dismissal of the
two cases but RTC, Branch 32 denied both motions.3 Aggrieved, Land Bank
directly filed this petitions for certiorari4 before this Court, raising a purely
question of law.
Sole Question Presented
The sole question presented in these cases is whether or not an RTC, acting as
Special Agrarian Court, has jurisdiction over just compensation cases involving
agricultural lands located outside its regular jurisdiction but within the province
where it is designated as an agrarian court under the Comprehensive Agrarian
Reform Law of 1998.
The Court’s Ruling
The RTC, Branch 32 based its order on Deputy Court Administrator (DCA) Zenaida
Elepaño’s opinion that single sala courts have jurisdiction over agrarian cases
involving lands located within its territorial jurisdiction. An RTC branch acting as a
special agrarian court, she claimed, did not have expanded territorial jurisdiction.
DCA Elepaño said:
x x x [B]eing a single sala court, the Regional Trial Court, Branch 64, Guihulngan,
Negros Oriental, has jurisdiction over all cases, including agrarian cases, cognizable
by the Regional Trial Court emanating from the geographical areas within its
territorial jurisdiction.
Further, the jurisdiction of the Special Agrarian Courts over agrarian cases is co-
extensive with its territorial jurisdiction. Administrative Order No. 80 dated July 18,
1989, as amended by Administrative Order No. 80A-90 dated February 23, 1990, did
97
not expand the territorial jurisdiction of the courts designated as Special Agrarian
Courts.5
Respondent Villegas6 adopts DCA Elepaño’s view. Villegas points out that the
designation of RTC, Branch 32 as a Special Agrarian Court did not expand its
territorial jurisdiction. Although it has been designated Special Agrarian Court for
the Province of Negros Oriental, its jurisdiction as an RTC did not cover the whole
province.
Respondent Villegas adds that, in hearing just compensation cases, RTC, Branch 64
in Guihulngan City should be no diferent from the situation of other single sala
courts that concurrently hear drugs and family-related cases even as the Supreme
Court has designated family and drugs courts in Dumaguete City within the same
province. Further, Guihulngan City is more than 100 kilometers from Dumaguete City
where RTC, Branch 32 sits. For practical considerations, RTC, Branch 64 of
Guihulngan City should hear and decide the case.
For their part, on June 19, 2009 respondent heirs of Noel informed7 the Court that
petitioner Land Bank had already paid them for their land. Consequently, they have
no further interest in the outcome of the case. It is not clear, however, if the trial
court had already approved a settlement.1avvphi1
"Jurisdiction" is the court’s authority to hear and determine a case. The court’s
jurisdiction over the nature and subject matter of an action is conferred by
law.8 In this case, the law that confers jurisdiction on Special Agrarian Courts
designated by the Supreme Court in every province is Republic Act (R.A.)
6657 or the Comprehensive Agrarian Reform Law of 1988. Sections 56 and 57
are the relevant provisions:
SEC. 56. Special Agrarian Court. - The Supreme Court shall designate at least one
(1) branch of the Regional Trial Court (RTC) within each province to act as a Special
Agrarian Court.
The Supreme Court may designate more branches to constitute such additional
Special Agrarian Courts as may be necessary to cope with the number of agrarian
cases in each province. In the designation, the Supreme Court shall give preference
to the Regional Trial Courts which have been assigned to handle agrarian cases or
whose presiding judges were former judges of the defunct Court of Agrarian
Relations.
The Regional Trial Court (RTC) judges assigned to said courts shall exercise
said special jurisdiction in addition to the regular jurisdiction of their
respective courts.
SEC. 57. Special Jurisdiction. - The Special Agrarian Courts shall have original and
exclusive jurisdiction over all petitions for the determination of just compensation to
landowners, and the prosecution of all criminal ofenses under this Act. The Rules of
Court shall apply to all proceedings before the Special Agrarian Courts unless
modified by this Act.
The Special Agrarian Courts shall decide all appropriate cases under their special
jurisdiction within thirty (30) days from submission of the case for decision.
The law is clear. A branch of an RTC designated as a Special Agrarian
Court for a province has the original and exclusive jurisdiction over all
petitions for the determination of just compensation in that province. In
Republic v. Court of Appeals,9 the Supreme Court ruled that Special Agrarian
Courts have original and exclusive jurisdiction over two categories of cases:
(1) all petitions for the determination of just compensation to landowners,
and (2) the prosecution of all criminal offenses under R.A. 6657.
By "special" jurisdiction, Special Agrarian Courts exercise power in addition to
or over and above the ordinary jurisdiction of the RTC, such as taking
cognizance of suits involving agricultural lands located outside their regular
territorial jurisdiction, so long as they are within the province where they sit
as Special Agrarian Courts.
R.A. 6657 requires the designation by the Supreme Court before an RTC
Branch can function as a Special Agrarian Court. The Supreme Court has not
designated the single sala courts of RTC, Branch 64 of Guihulngan City and
RTC, Branch 63 of Bayawan City as Special Agrarian Courts. Consequently,
they cannot hear just compensation cases just because the lands subject of
such cases happen to be within their territorial jurisdiction.
Since RTC, Branch 32 of Dumaguete City is the designated Special Agrarian
Court for the province of Negros Oriental, it has jurisdiction over all cases for
determination of just compensation involving agricultural lands within that
province, regardless of whether or not those properties are outside its regular
territorial jurisdiction.

WHEREFORE, the Court GRANTS the petitions, SETS ASIDE the orders of the Regional
Trial Court, Branch 32 of Dumaguete City dated September 13, 2007 and October 30,
2007 in Civil Case 2007-14174, entitled Land Bank of the Philippines v. Corazon
Villegas, and its orders dated November 16, 2007 and December 14, 2007 in Civil
Case 2007-14193, entitled Land Bank of the Philippines v. Heirs of Catalino V. Noel
and Procula P. Sy, which orders dismissed the cases before it for lack of jurisdiction.
Further, the Court DIRECTS the Regional Trial Court, Branch 32 of Dumaguete City to
immediately hear and decide the two cases unless a compromise agreement has in
the meantime been approved in the latter case.

SO ORDERED.

98
G.R. No. 143275 March 20, 2003
LAND BANK OF THE PHILIPPINES, petitioner,
vs.
ARLENE DE LEON and BERNARDO DE LEON, respondents.
RESOLUTION
CORONA, J.:
Before us are the motion for reconsideration dated October 16, 2002 and
supplement to the motion for reconsideration dated November 11, 2002 filed by
movant-petitioner Land Bank of the Philippines (LBP, for brevity) seeking a reversal
of this Court’s Decision1 dated September 10, 2002 which denied LBP’s petition for
review.
Herein respondent spouses Arlene and Bernardo de Leon filed a petition to fix
the just compensation of a parcel of land2 before the Regional Trial Court of
Tarlac, Branch 63, acting as a Special Agrarian Court. On December 19, 1997, the
agrarian court rendered summary judgment fixing the compensation of the
subject property as follows: (1) P1,260,000 for the 16.69 hectares of riceland
and (2) P2,957,250 for the 30.4160 hectares of sugarland.
The Department of Agrarian Reform (DAR, for brevity) and LBP both filed
separate appeals using different modes. DAR filed a petition for review while
LBP interposed an ordinary appeal by filing a notice of appeal. DAR’s petition
for review3 was assigned to the Special Third Division of the Court of Appeals while
LBP’s ordinary appeal4 was assigned to the Fourth Division of the same court.
On November 6, 1998, the appellate court’s Special Third Division rendered a
decision in the petition for review filed by DAR, the dispositive portion of which
reads:
WHEREFORE, premises considered, the petition for review is GIVEN DUE
COURSE. The decision dated February 9, 1998 is partially reconsidered.
The trial court is ordered to recompute the compensation based on
the selling price of palay at 213.00 per cavan. Petitioner is ordered to
pay legal interest at 6% of the compensation so fixed from 1990 until full
payment is made by the government.5
Meanwhile, on February 15, 2000, the appellate court’s Fourth Division
dismissed LBP’s ordinary appeal primarily holding that LBP availed of the
wrong mode of appeal.6 LBP filed a motion for reconsideration but the same was
denied.
On July 14, 2000, LBP filed before this Court a petition for review of the
decision of the Court of Appeals. On September 10, 2002, this Court rendered a
Decision, the dispositive portion of which reads:
WHEREFORE, the appealed RESOLUTIONS, dated February 15, 2000 and
May 22, 2000, respectively, of the Court of Appeals are
hereby AFFIRMED. No costs.
SO ORDERED.7
In affirming the dismissal by the appellate court of LBP’s ordinary appeal, this
Court held that Section 608 of RA 6657 (The Comprehensive Agrarian Reform
Law) is clear in providing petition for review as the appropriate mode of
appeal from decisions of Special Agrarian Courts. Section 619 (the provision
on which LBP bases its argument that ordinary appeal is the correct mode of
appeal from decisions of Special Agrarian Courts) merely makes a general
reference to the Rules of Court and does not categorically prescribe ordinary
appeal as the correct way of questioning decisions of Special Agrarian Courts.
Thus, we interpreted Section 61 to mean that the specific rules for petitions
for review in the Rules of Court and other relevant procedures of appeals
shall be followed in appealed decisions of Special Agrarian Courts.
We likewise held that Section 60 of RA 6657 is constitutional and does not
violate this Court’s power to "promulgate rules concerning the protection and
enforcement of constitutional rights, pleadings, practice and procedure in all
courts, the admission to the practice of law, the Integrated Bar and legal
assistance to the underprivileged."10 We ruled that the Rules of Court does
not categorically prescribe ordinary appeal as the exclusive mode of appeal
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from decisions of Special Agrarian Courts. The reference by Section 61 to the
Rules of Court in fact even supports the mode of a petition for review as the
appropriate way to appeal decisions of the Special Agrarian Courts.
Furthermore, the same Section 5(5), Article VIII of the 1987 Philippine
Constitution quoted by LBP states that "rules of procedure of special courts
and quasi-judicial bodies shall remain effective unless disapproved by the
Supreme Court." Since Section 60 is a special procedure and this Court has
not yet provided for a particular process for appeals from decisions of
agrarian courts, the said section does not encroach on our rule-making
power.
Hence, LBP filed the instant motion for reconsideration and supplement to
the motion for reconsideration reiterating its claim in the petition for review
that Section 60 of RA 6657 is unconstitutional. LBP still maintains that a
legislative act like Section 60 infringes on the exclusive rule-making power of
this Court in violation of the 1987 Philippine Constitution.
In the event that said argument is again rejected, LBP pleads that the subject
Decision should at least be given prospective application considering that
more than 60 similar agrarian cases filed by LBP via ordinary appeal before
the Court of Appeals are in danger of being dismissed outright on technical
grounds on account of our ruling herein. This, according to LBP, will wreak
financial havoc not only on LBP as the financial intermediary of the Comprehensive
Agrarian Reform Program but also on the national treasury and the already
depressed economic condition of our country.11 Thus, in the interest of fair play,
equity and justice, LBP stresses the need for the rules to be relaxed so as to give
substantial consideration to the appealed cases.
On the first ground, we find it needless to re-discuss the reasons already
propounded in our September 10, 2002 Decision explaining why Section 60
of RA 6657 does not encroach on our constitutional rule-making power.
Be that as it may, we deem it necessary to clarify our Decision’s application to and
efect on LBP’s pending cases filed as ordinary appeals before the Court of Appeals.
It must first be stressed that the instant case poses a novel issue; our Decision
herein will be a landmark ruling on the proper way to appeal decisions of Special
Agrarian Courts. Before this case reached us, LBP had no authoritative
guideline on how to appeal decisions of Special Agrarian Courts considering
the seemingly conflicting provisions of Section 60 and 61 of RA 6657.
More importantly, the Court of Appeals has rendered conflicting decisions on
this precise issue. On the strength of Land Bank of the Philippines vs. Hon.
Feliciano Buenaventura, penned by Associate Justice Salvador Valdez, Jr. of
the Court of Appeals, certain decisions12 of the appellate court held that an
ordinary appeal is the proper mode. On the other hand, a decision 13 of the
same court, penned by Associate Justice Romeo Brawner and subject of the
instant review, held that the proper mode of appeal is a petition for review. In
another case,14 the Court of Appeals also entertained an appeal by the DAR
filed as a petition for review.
On account of the absence of jurisprudence interpreting Sections 60 and 61
of RA 6657 regarding the proper way to appeal decisions of Special Agrarian
Courts as well as the conflicting decisions of the Court of Appeals thereon,
LBP cannot be blamed for availing of the wrong mode. Based on its own
interpretation and reliance on the Buenaventura ruling, LBP acted on the
mistaken belief that an ordinary appeal is the appropriate manner to question
decisions of Special Agrarian Courts.
Hence, in the light of the aforementioned circumstances, we find it proper to
emphasize the prospective application of our Decision dated September 10,
2002. A prospective application of our Decision is not only grounded on
equity and fair play but also based on the constitutional tenet that rules of
procedure shall not impair substantive rights.
In accordance with our constitutional power to review rules of procedure of special
courts,15 our Decision in the instant case actually lays down a rule of procedure,
specifically, a rule on the proper mode of appeal from decisions of Special Agrarian
Courts. Under Section 5 (5), Article VIII of the 1987 Philippine Constitution, rules of
procedure shall not diminish, increase or modify substantive rights. In determining
whether a rule of procedure afects substantive rights, the test is laid down WHEREFORE, the motion for reconsideration dated October 16, 2002 and the
in Fabian vs. Desierto,16 which provides that: supplement to the motion for reconsideration dated November 11, 2002
are PARTIALLY GRANTED. While we clarify that the Decision of this Court dated
[I]n determining whether a rule prescribed by the Supreme Court, for the
September 10, 2002 stands, our ruling therein that a petition for review is the
practice and procedure of the lower courts, abridges, enlarges, or
correct mode of appeal from decisions of Special Agrarian Courts shall apply only to
modifies any substantive right, the test is whether the rule really
cases appealed after the finality of this Resolution.
regulates procedure, that is, the judicial process for enforcing rights and
duties recognized by substantive law and for justly administering remedy SO ORDERED.
and redress for a disregard or infraction of them. If the rule takes away a
vested right, it is not procedural. If the rule creates a right such as the
right to appeal, it may be classified as a substantive matter; but if it
operates as a means of implementing an existing right then the rule deals
merely with procedure. (italics supplied)

We hold that our Decision, declaring a petition for review as the proper mode
of appeal from judgments of Special Agrarian Courts, is a rule of procedure
which affects substantive rights. If our ruling is given retroactive application, it will
prejudice LBP’s right to appeal because pending appeals in the Court of Appeals will
be dismissed outright on mere technicality thereby sacrificing the substantial merits
thereof. It would be unjust to apply a new doctrine to a pending case involving a
party who already invoked a contrary view and who acted in good faith thereon
prior to the issuance of said doctrine.

In the 1992 case of Spouses Benzonan vs. Court of Appeals,17 respondent Pe, whose
land was foreclosed by Development Bank of the Philippines in 1977 and
subsequently sold to petitioners Benzonan in 1979, tried to invoke a 1988 Supreme
Court ruling counting the five-year period to repurchase from the expiration (in
1978) of the one-year period to redeem the foreclosed property. Said 1988 ruling
reversed the 1957 and 1984 doctrines which counted the five-year period to
repurchase from the date of conveyance of foreclosure sale (in 1977). Using the
1988 ruling, respondent Pe claimed that his action to repurchase in 1983 had not yet
prescribed.

However, this Court refused to apply the 1988 ruling and instead held that the 1957
and 1984 doctrines (the prevailing ruling when Pe filed the case in 1983) should
govern. The 1988 ruling should not retroact to and benefit Pe’s 1983 case to
repurchase. Thus, the action had indeed prescribed. This Court justified the
prospective application of the 1988 ruling as follows:

We sustain the petitioners' position. It is undisputed that the subject lot

was mortgaged to DBP on February 24, 1970. It was acquired by DBP as
the highest bidder at a foreclosure sale on June 18, 1977, and then sold
to the petitioners on September 29, 1979.

At that time, the prevailing jurisprudence interpreting section 119 of R.A.

141 as amended was that enunciated in Monge and Tupas cited above.
The petitioners Benzonan and respondent Pe and the DBP are bound by
these decisions for pursuant to Article 8 of the Civil Code "judicial
decisions applying or interpreting the laws or the Constitution shall form
a part of the legal system of the Philippines." But while our decisions
form part of the law of the land, they are also subject to Article 4 of the
Civil Code which provides that "laws shall have no retroactive efect
unless the contrary is provided." This is expressed in the familiar legal
maxim lex prospicit, non respicit, the law looks forward not backward.
The rationale against retroactivity is easy to perceive. The retroactive
application of a law usually divests rights that have already become
vested or impairs the obligations of contract and hence, is
unconstitutional (Francisco v. Certeza, 3 SCRA 565 [1961]).

The same consideration underlies our rulings giving only prospective

effect to decisions enunciating new doctrines.

xxx xxx xxx

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

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