Agrarian Reform Outline

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Agrarian Reform Outline Reviewer - Atty. Capanas - AMaWS Page 1

*From PPT *Shaded portions: From Pointers ni Sir
*From Audio
*From Codal
*Included in Syllabus but not in both audio and powerpoint

AGRARIAN REFORM
I. History and Legal Basis
PRE-SPANISH PERIOD
Before the Spaniards came the Filipinos lived in villages or
barangays ruled by chiefs or datus.
Everyone had access to the fruits of the soil.
DAR did not elaborate on this one. But what I can surmise is
that probably no one was concerned about ownership. Gamay
rag tao at that time. I think the keyword there is access.
Walay limitation ba.
SPANISH PERIOD

When the Spaniards came the concept of encomienda (Royal
Land Grants) was introduced.
- haciendas (wealthy chinese families)

1
st
PHILIPPINE REPUBLIC
First Philippine Republic was established in 1899, Gen. Emilio
Aguinaldo declared in the Malolos Constitution his intention to
confiscate large estate. - but his regime was short lived.

Aguinaldos plan was never implemented.

AMERICAN PERIOD
Philippine Bill of 1902 Set the ceilings: 16 has for private
individuals and 1,024 has for corporations.
Land Registration Act of 1902 (Act No. 496) registration of
land titles under the Torrens system. That means, ownership
continued to be the concern starting way back from the
spanish period.
Public Land Act of 1903 introduced the homestead system.
Tenancy Act of 1933 (Act No. 4054 and 4113) regulated
relationships between landowners and tenants of rice (50-50
sharing) and sugar cane lands. -limited

COMMONWEALTH PERIOD
President Manuel L. Quezon espoused the Social Justice program.
1935 Constitution- The promotion of social justice to ensure
the well-being and economic security of all people should be
the concern of the State
Commonwealth Act No. 178 (An Amendment to Rice Tenancy
ActNo.4045) -Certain controls in the landlord-tenant
relationships
Commonwealth Act. No.461, 1937 Specified reasons for the
dismissal of tenants and only with the approval of the Tenancy
Division of the Department of Justice. You will note again, the
relationship bet. Landlord and tenant has proliferated and the
government was just giving restrictions. Meaning, the landlord
cant just unilaterally eject the tenants, there has to be
justifiable reasons.
Rural Program Administration, created March 2,1939-
purchase and lease of haciendas and their sale and lease to
the tenants.

JAPANESE OCCUPATION
peasants and workers organizations grew strength.
peasants took up arms
Anti- Japanese group, the HUKBALAHAP (Hukbo ng Bayan
Laban sa Hapon)
not much during this time

PHILIPPINE REPUBLIC
After Philippine Independence in 1964 , problems of land
tenure remained .
President Manuel Roxas (1946-1948):
Republic Act No. 34 -- 70-30 sharing arrangements and
regulating share-tenancy contracts. It used to be 50-50, now it
is 70-30.
Republic Act No.55 more effective safeguard against
arbitrary ejectment of tenants.

PHILIPPINE REPUBLIC
President Elpidio Quirino (1948-1953)
Executive Order No. 355 issued on October 23,1950 -- Replaced
the National Land Settlement Administration with Land Settlement
Development Corporation (LASEDECO)

President Ramon Magsaysay(1953-1957)
Republic Act No. 1160 of 1954 -- Abolished the LASEDECO and
established the National Resettlement and Rehabilitation
Administration (NARRA)
Republic Act No. 1199 (Agricultural Tenancy Act of 1954) (note)
-relationship between landowners and tenant farmers by organizing
share-tenancy and leasehold system.
-tenant has option to elect either share tenancy or leasehold
-it also created the Court of Agrarian Relations.

Cont. President Ramon Magsaysay(1953-1957).
Republic Act No. 1400 (Land Reform Act of 1955) Created the
Land Tenure Administration(LTA)

Take note of this under Magsaysay, 1199, just for our consumption
although it has been superseded.
Before Magsaysay, the relationship was concentrated on share tenancy
but during this time there was another system that came out, and whats
that? LEASEHOLD. If before share tenancy was about sharing 50/50,
then 70/30, and now share tenancy is kelangan ikaw land owner imung
ipa eject you should follow the reasons to eject.
No arbitrary ejectment those are the concerns during Magsaysay but
here comes another concern and that is LEASEHOLD and in fact under
the law the tenant has the option, why the option?
Because this was changed in the time of Macapagal under R.A. 3844.
Under Macapagal there is no more option, no more share tenancy,
we will only adopt leasehold
Whats the difference between share tenancy and leasehold? You will
note in share tenancy, the concerns are sharing and ejectment.
What are in share tenancy that is not in leasehold?
If a tenant dies under share tenancy the children of the deceased cannot
succeed but under leasehold the descendants automatically become
tenants as well. Once a tenant, father or mother dies, a land owner
cannot say since I cannot eject you tenant I will just sell this
land. Under leasehold, the transferee or the purchaser of the land is
bound by the relationship. In short, the Land owner has no escape. This
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was the option before during the time of Macapagal. With this law
R.A.3344, share tenancy was abolished and it was only leasehold.
Macapagal was even called the father of Agrarian Reform.
President Carlos P. Garcia (1957-1961)
Continued the program of President Ramon Magsaysay.
President Diosdado Macapagal(1961-1965):
Republic Act No. 3844 of August 8,1963 Abolished shared
tenancy, institutionalized leasehold.
President Ferdinand Marcos(1965-1986):
Republic Act No.6389, (Code of Agrarian Reform) and RA No.
6390 of 1971 Created the Department of Agrarian Reform and
the Agrarian Reform Special Account Fund.
- Provides automatic conversion of share tenancy to leasehold.

Presidential Decree No. 2, September 26,1972 Declared the
country under land reform program.
Presidential Decree No.27,October 21,1972 Restricted land
reform scope to tenanted rice and corn lands and set the retention
limit at 7 hectares.

President Corazon C. Aquino (1986-1992)
Section 21 under Article II The State shall promote
comprehensive rural development and agrarian reform.
signed into law Republic Act No. 6657
became effective on June 15,1988

E.O 405, during the time of Aquino, vested in the LBP to determine land
valuation. In the acquisition, the landowner can voluntarily give up the
land and AGREE on the land valuation to be determined by Land Bank. If
the landowner does not agree with the acquisition, the government will
have to do the compulsory acquisition. And then, after that, you will
have the valuation of the land bank of the Phil. If the land owner does
not agree with the valuation, the land owner will usually go to the Civil
Court.
Who has jurisdiction? Regional trial court acting as Special Agrarian
Court
President Fidel V. Ramos (1992-1998):
His administration committed to the vision Fairer, faster and
more meaningful implementation of the Agrarian Reform
Program.
Republic Act No.7881,1995 Amended certain provisions of
RA 6657 and exempted fishponds and prawns from the
coverage of CARP.
Republic Act 8532,1998 (Agrarian Reform Fund Bill)
additionalPhp50 billion for CARP and extended its
implementation for another 10 years.
- You have the additional fund and extending the
implementation for another 10 years. Why was there an
extension?
- Because R.A.6657 was to be implemented for a period of 10
years.
- Why extended it? Well that would be an admission that the
program has not been fully implemented. After this in 1998 it
was extended for another 10 years so it went to 2008.
- What was the latest amendment under CARP?
It was CARPER R.A.9700 passed on 2009
- So what happened when CARP expired on 2008 and before
CARPER was enacted into law? Do you know what the
congress did?
- Congress merely passed a Resolution, Both houses, they
passed a resolution extending the coverage of CARP.
Question: Is that Valid? daw (valid nalang)
- If the Land of your client between 2008 and 2009 can you
question the acquisition, Saying that there was no law
supporting to that acquisition? (naa ni sa later part, basta
gipa.retroact nila ang law to include the period nga walay law
kay nalangay ug approve.)
President Joseph E. Estrada(1998-2000)ERAP PARA SA MAHIRAP
launched the Magkabalikat Para sa Kaunlarang Agraryo or
MAGKASAKA.

President Gloria Macapagal-Arroyo (2000-present):
Kung manag-iya na sila sa yuta, nganung naa pa may leasehold?
- Because the constitution or the law provides merely a right, a
farmer may not opt to avail of that right. Ingon sila a di mi
motoo ana inyung programa oie, Pabilin lang mi diri arlese unta
padayun lang mig tenant but they will not be governed by share
tenancy, wala na abolished naman to, but they will be
governed by leasehold operations.
- Nganu man ang government is concerned for farmers who are
lessees even though they dont want to own parcels of land?
Because dili sila ganahan nga naa napuy INEQUALITY.

How does the government protect the interest of the farmers? Leasehold
contract. And, if you are the farmer in leasehold, you should have that
leasehold annotated at the back of the title of the land.

Land Tenure Improvement/Provision of Support Services
Why is there a need for improvement? And Why is there a need for
support?
- Remember, equalization of social and economic forces. That means the
Law itself recognizes that the mere giving of this parcels of Land to the
farmers is not enough. They need credit assistance (para sa tanom and
all)

Agri-Agra Law under the law there is a specific provision that rural
banks must have a portfolio for credit assistance to be extended by way
of loan to farmers.
Sa ato pa RESERVE daan. (wa na gi.apil sa syllabus kay motaas na daw)

Infrastructure Project/ KALAHI ARZone
- Agrarian reform Zone, once there is an area composed of
ARBs, Agrarian Reform Beneficiaries, They are a community,
butangan sila og skwelahan, butangan sila multi-purpose hall,
that part of assistance of the state and they are called AR
zone.

Agrarian Justice (2 PHASES)
1. Agrarian Legal Assistance executive (DAR will provide lawyers to
farmers)
2. Adjudication of Cases.
*If you are the lawyer of the Land Owner, inyung papahawa.on ang
nagpuyo sa yuta sa inyung client. Muadto kag DAR for assistance? You
may not be granted. Why? Who will decide, DAR dba? Who will assist?
DAR And besides, if you are the lawyer of the Landowner, you will not be
tempted to get inside the system. Why? The moment you get inside the
system, the element needed so that DAR can adjudicate the case is
RELATIONSHIP BETWEEN THE TENANTS. Now, would you admit that
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there is Landowner and Tenant Relationship? Dili! Kansi kaayo ang
landowner ana. Ngano man? If you admit that, there are certain
RESTRICTIONS! And ofcourse, that is against the interest of your client
land owner.
- Asa man cla mangadto? Sa civil courts na! Mao nang
mufile sila ug forcible entry, unlawful detainer, or accion
publiciana.

CARPER

Importance of Land Reform and its Constitutionality*
Assoc. of Small Landowners vs. Hon. Secretary, 175 SCRA 343
"Land for the Landless" is a slogan that underscores the acute imbalance
in the distribution of this precious resource among our people. But it is
more than a slogan. Through the brooding centuries, it has become a
battle-cry dramatizing the increasingly urgent demand of the
dispossessed among us for a plot of earth as their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of
social justice to "insure the well-being and economic security of all the
people, especially the less privileged. In 1973, the new Constitution
affirmed this goal adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of private
property and equitably diffuse property ownership and profits."
Significantly, there was also the specific injunction to "formulate and
implement an agrarian reform program aimed at emancipating the
tenant from the bondage of the soil."
The Constitution of 1987 was not to be outdone. Besides echoing these
sentiments, it also adopted one whole and separate Article XIII on Social
Justice and Human Rights, containing grandiose but undoubtedly sincere
provisions for the uplift of the common people. These include a call in
the following words for the adoption by the State of an agrarian reform
program:
SEC. 4. The State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular farmworkers,
who are landless, to own directly or collectively the lands they till
or, in the case of other farmworkers, to receive a just share of the
fruits thereof. 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.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land
Reform Code, had already been enacted by the Congress of the
Philippines on August 8, 1963, in line with the above-stated principles.
This was substantially superseded almost a decade later by P.D. No. 27,
which was promulgated on October 21, 1972, along with martial law, to
provide for the compulsory acquisition of private lands for distribution
among tenant-farmers and to specify maximum retention limits for
landowners.
On July 17, 1987, President Corazon C. Aquino issued E.O. No. 228,
declaring full land ownership in favor of the beneficiaries of P.D. No. 27
and providing for the valuation of still unvalued lands covered by the
decree as well as the manner of their payment. This was followed on
July 22, 1987 by Presidential Proclamation No. 131, instituting a
comprehensive agrarian reform program (CARP), and E.O. No. 229,
providing the mechanics for its implementation.
Subsequently, the revived Congress of the Philippines took over
legislative power from the President and started its own deliberations,
including extensive public hearings, on the improvement of the interests
of farmers. The result, after almost a year of spirited debate, was the
enactment of R.A. No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988, which President Aquino signed on June
10, 1988. This law, while considerably changing the earlier mentioned
enactments, nevertheless gives them supplementary effect insofar as
they are not inconsistent with its provisions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of
his powers under martial law has already been sustained in Gonzales v.
Estrella. As for the power of President Aquino to promulgate Proc. No.
131 and E.O. Nos. 228 and 229, the same was authorized under Section
6 of the Transitory Provisions of the 1987 Constitution.
ARTICLE II
DECLARATION OF PRINCIPLES AND STATE POLICIES

Section 9. The State shall promote a just and dynamic social order that
will ensure the prosperity and independence of the nation and free the
people from poverty through policies that provide adequate social
services, promote full employment, a rising standard of living, and an
improved quality of life for all.

Section 10. The State shall promote social justice in all phases of
national development.

Section 21. The State shall promote comprehensive rural development
and agrarian reform.

ARTICLE XII
NATIONAL ECONOMY AND PATRIMONY

Section 1. The goals of the national economy are a more equitable
distribution of opportunities, income, and wealth; a sustained increase in
the amount of goods and services produced by the nation for the benefit
of the people; and an expanding productivity as the key to raising the
quality of life for all, especially the under-privileged.

The State shall promote industrialization and full employment based on
sound agricultural development and agrarian reform, through industries
that make full and efficient use of human and natural resources, and
which are competitive in both domestic and foreign markets. However,
the State shall protect Filipino enterprises against unfair foreign
competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all regions
of the country shall be given optimum opportunity to develop. Private
enterprises, including corporations, cooperatives, and similar collective
organizations, shall be encouraged to broaden the base of their
ownership.

Section 3. Lands of the public domain are classified into agricultural,
forest or timber, mineral lands and national parks. Agricultural lands of
the public domain may be further classified by law according to the uses
to which they may be devoted. Alienable lands of the public domain shall
be limited to agricultural lands. Private corporations or associations may
not hold such alienable lands of the public domain except by lease, for a
period not exceeding twenty-five years, renewable for not more than
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twenty-five years, and not to exceed one thousand hectares in area.
Citizens of the Philippines may lease not more than five hundred
hectares, or acquire not more than twelve hectares thereof, by purchase,
homestead, or grant.

Taking into account the requirements of conservation, ecology, and
development, and subject to the requirements of agrarian reform, the
Congress shall determine, by law, the size of lands of the public domain
which may be acquired, developed, held, or leased and the conditions
therefor.

ARTICLE XIII

SOCIAL JUSTICE AND HUMAN RIGHTS

Section 1. The Congress shall give highest priority to the enactment of
measures that protect and enhance the right of all the people to human
dignity, reduce social, economic, and political inequalities, and remove
cultural inequities by equitably diffusing wealth and political power for
the common good.
To this end, the State shall regulate the acquisition, ownership, use, and
disposition of property and its increments.

Section 2. The promotion of social justice shall include the commitment
to create economic opportunities based on freedom of initiative and self-
reliance.

AGRARIAN AND NATURAL RESOURCES REFORM
Section 4. The State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers who are
landless, to own directly or collectively the lands they till or, in the case
of other farmworkers, to receive a just share of the fruits thereof. To this
end, the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention
limits as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations, and subject to the payment of
just compensation. In determining retention limits, the State shall
respect the right of small landowners. The State shall further provide
incentives for voluntary land-sharing.

Section 5. The State shall recognize the right of farmers, farmworkers,
and landowners, as well as cooperatives, and other independent farmers'
organizations to participate in the planning, organization, and
management of the program, and shall provide support to agriculture
through appropriate technology and research, and adequate financial,
production, marketing, and other support services.

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 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 farmworkers in its own
agricultural estates which shall be distributed to them in the manner
provided by law.

Section 7. The State shall protect the rights of subsistence fishermen,
especially of local communities, to the preferential use of the 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.

Section 8. The State shall provide incentives to landowners to invest the
proceeds of the agrarian reform program to promote industrialization,
employment creation, and privatization of public sector enterprises.
Financial instruments used as payment for their lands shall be honored
as equity in enterprises of their choice.

ARTICLE XVIII
TRANSITORY PROVISIONS
Section 22. At the earliest possible time, the Government shall
expropriate idle or abandoned agricultural lands as may be defined by
law, for distribution to the beneficiaries of the agrarian reform program.

MEANING OF SOCIAL LEGISLATION

Laws that seek to promote the common good, generally by protecting
and assisting the weaker members of society.

Lets talk about Social Justice. Why? Because what will follow are the
provisions of the 1987 Constitution, particularly Article XIII, that talks
about Social Justice.

Just take note of the underlined words SOCIAL JUSTICE IS THE
HUMANIZATION OF THE LAWS. Personification of the laws. Meaning,
the thrust of the law is TO PROTECT PERSONS. And you have
Equalization of Social and Economic Forces. Another important phrase:
Measures calculated to ensure economic stability.
Meaning of social justice
Social Justice is neither communism nor despotism, nor
atomism, nor anarchy, but the humanization of the laws and the
equalization of social and economic forces by the state so that
justice in its National and objectively secular conception may at
least be approximated. Social justice means the promotion of the
welfare of all the people, the adoption by government of measures
calculated to insure economic stability of all the component
elements of society, through the maintenance of proper economic
and social equilibrium in the interrelations of the members of the
community, constitutionally, through the adoption of measures
legally justifiable, and extra-constitutionally, through the exercise of
powers underlying the existence of all government on time-honored
principle of salus populi est suprema lex.

The constitutional provisions on agrarian reform
(5) Specific provision on agrarian and natural resources reform. Article
XIII:
Sec. 4. The State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular farmworkers, who
are landless, to own directly or collectively the lands they till or, in the
case of other farmworkers, to receive a just share of the fruits thereof.
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
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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.

Article XIII, Sec.4- This was already complied. The mandate that a law
should be passed that will undertake an agrarian reform program. How
was it manifested? You have RA 6657. The law was passed in 1988,
during the time of Aquino. The Constitution itself mandates that the
program is founded on the right of FARMERS and REGULAR FARM
WORKERS, and OTHER FARM WORKER.

Rights if you are a Farmer, Regular Farm Worker? Your right is to own
the lands you till. You can either put it in (1)your name, or it can be the
(2)name of the cooperative on which you are a member. Okay?
Was this complied under CARL? Not necessarily. Why? Because under
CARL, you can own an agricultural land EVEN IF YOU ARE NOT A TILLER
of the said land. Nobody questioned this in the SC. Nobody said that
hey SC, why should my land be awarded to somebody who is not a tiller
of my land when the Constitution says To own the lands they till. How
will the SC solve this question if this is raised in the future? Anyway,
thats not the issue now.
How about OTHER FARM WORKERS? Do they have the right to own the
lands they till? NO because the constitution just said that they have the
right to receive a just share of the fruits. Was this complied under
CARL? My opinion is it was not. Why? There are different classes of
farmers. We have Regular Farmworkers, Seasonal Farmworkers, and the
catch-all Other Farmworkers. You are an Other Farmworker if you do
not fall under the 2 preceding categories. Those classes of farmers:
(1)Farmworkers and (2)Other Farmworkers they qualify to own parcels
of land under the law. Is the law consistent with the Constitution? I dont
think so.
Take note of this, what is the meaning of Landless? Does it mean
technically that the person does not own any amount of land? That is
usually our impression. But under CARL, you are landless as long as you
dont own an agricultural land exceeding 3 hectares. Is that the purpose
of an agrarian reform program? I believe the purpose is really for those
who are truly landless because that is the very essence of social
legislation: Equalization of Forces. If you own a parcel of land, why the
need of having another parcel of land?
Another issue is this: RETENTION LIMITS. Ill give you an overview so
that at least you will understand when we talk about agrarian reform.
Agrarian Reform program is basically taking away parcels of land by the
state from those owners of the agricultural lands. If you own 60
hectares, you wont own anymore 60 hectares. You will only be able to
retain a certain number of hectares. Who determines the number?
CONGRESS. Under CARL, landowners can retain up to 5 hectares. So, if
you own 60 hectares, you will retain 5 hectares. That is agrarian reform;
that is equalization of forces. Why? Because you have landowners who
own parcels of land and you have tenants who till the land but dont own
any parcels of land. How will they become equal? The government will
take away parcels of land and give it to the land owners.
But, that does not end there because that TAKING is what you call
Expropriation of Eminent Domain. Thats why in Sec. 4, there is a
provision there subject to the Payment of Just Compensation. This is not
simple because if you own vast hectares of land, you dont have to give
it away and receive a compensation nga ang mu.valuate kay ang
government kay normally gagmay. Pero, base rapud na sa imong sayop.
Ngano man? Under Sec. 17, one of the factors that will affect the
computation of just compensation is the Assessed Value. And ang
landowner nga gusto makasave, dili mudeclare sa sakto na assessed
value. Ang ideclare sa tax declaration, gamay ra kaayo kay aron gamay
rag bayran nga real property tax. Without knowing, ang iyang yuta
kuhaon diay to sa gobyerno unya ang iyang yuta, bayran ra base sa
botbot niya na assessed value.
Sec 4 talks about retention limits. It qualifies retention limits. Reasonable
retention limits. That has not been questioned, so right now the limit is
fixed at 5 hectares. Children of landowners will also retain, subject to
this 2 qualifications:
1. At least 15 yrs. Old
2. (a)Personally Cultivating the land or, (b)Directing managing
the land
Kasagarang anak, dili jud nay mu.uma. So anhi ni nila pasiguon sa
ikaduha. Directly managing the land. Naa bana? Wala! Nagpahayahay
rana. So what is the implication here? It is prone to corruption and
abuse. Ngano man? Pwede raman daw sabotsaboton ang MARO. What
is MARO? Municipal Agrarian Reform Officer. He is the representative of
DAR in the Municipal/City Level. It is the MARO who investigates who are
the children qualified for retention, and submit a report to the PARO. So
that is the framework of this agrarian reform program.

Sec. 5. The State shall recognize the right of farmers, farmworkers, and
landowners, as well as cooperatives, and other independent farmers
organizations to participate in the planning organization, and
management of the program, and shall provide support to agriculture
through appropriate technology and research, and adequate financial,
production, marketing, and other support services.
Sec. 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 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 farmworkers in
its own agricultural estates which shall be distributed to them in the
manner provided by law.

Take note of Sec. 6, still in the constitution. While the framework is:
Acquisition subject to payment of just compensation, the program must
respect (1)prior rights, (2)homestead rights, and (3)the rights of
indigenous communinities. So if you are a holder of homestead patent,
your land is not covered by the agrarian reform program. But, there is a
BUT. Here, in sec. 6, there is no qualification. It just mentioned subject
to prior rights, homestead rights. But you know what happened to the
law? The law qualifies it. Qualifies it in a sense that if you are a grantee
of a homestead patent, gitagaan kag yuta sa DENR para naa kay
ikabalay, but wala ka nagpuyo or actually till sa yuta, the law says that
you are not qualified for the exemption. But, section 6 does not qualify.

Sec. 7. The State shall protect the rights of subsistence fishermen,
especially of local communities; to the preferential use of the
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
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of subsistence fishermen against foreign intrusion. Fishworkers shall
receive a just share from their labor in the utilization of marine and
fishing resources.
Sec. 8. The State shall provide incentives to landowners to invest the
proceeds of the agrarian reform program to promote industrialization,
employment creation, and privatization of public sector enterprises.
Financial instruments used as payment for their lands shall be honored
as equity in enterprises of their choice.

RA 3844
BENEFICIARIES
Tenant Farmers
Agricultural wage-earners or farm workers
Settlers including migrant workers
Owner-cultivators of less than family-size farms
LANDS COVERED BY THE CODE
Tenanted Areas
Landed Estates
Old Settlements
Proposed Settlements
COMPOSITION OF THE CODE
An agricultural leasehold system to replace all existing share
tenancy systems in agriculture.
During the Time of Diosdado Macapagal and it was this law that
ABOLISHED SHARE TENANCY and UPHELD LEASE HOLD. Before
this was RA 1199 where the tenant is given the choice whether the
tenant would love to go to share tenancy or lease hold. If you have read
1199 the meaning or the concept of share tenancy and lease hold are
the same.
With respect to parties: Parties are the land owner and the tenant
although in the case of leasehold the tenant is technically called lessee.
There is a contribution of the land owner and that contribution is in the
form of a land. The contribution of the tenant or lessee is labor. And the
tenant/lessee is supposed to plant, cultivate, harvest and when there is
production, divide the share. The same concept share tenancy and
leasehold.
But why is it that leasehold is preferred over share tenancy?
Why leasehold?
- Protects tenurial and economic status
- ECONOMIC STATUS It is the upliftment of the life of
the tenant. But what about tenurial? It has something to
do with tenure. [Im sure in your favorite subject LABOR
LAW, you remembered security of tenure] Security of
tenure is provided by law not withstanding any
contract. So if you have a contract that says you are only
there for a period of 10 months for example but under the law
you are considered to be regularly employed because you are
performing work directly for the company then you are
considered a regular not withstanding any contract. The same
concept is true with respect to agrarian reform. That means
if you are a tenant or a lessee the LO cannot just
dispossess, remove or eject you from the land w/o
apparent reason there has to be a ground, it should be
based on the ground. And the grounds are provided by
law.
- Guarantees physical possession, enjoyment and management
- Assures continuity of relations
- In case of death of the tenant or the lessee, the
relationship CONTINUES. It continues with the
immediate family. Thats why theres protection of
the tenurial status.
- In case lessor sells or alienates the legal possession,
transferee shall be subrogated to the rights and substituted to
the obligations of lessor. - -
- The transferee/the purchaser is subrogated
but not subrogated in the positive sense of
the word. He has to assume the rights and
obligations of the lessor. The transferee cannot
say that I am innocent, I dont know, I am not
aware that there was this relationship between
tenant and LO because if that is the case that that
can be an excuse then futile ang balaod.
Agricultural leasehold? (read Sec 4-38 for more info :p)
A juridical tie between lessor and lessee
- Abolished shared tenancy. Now leasehold tenancy.
- Why is it that leasehold relationship was preferred?
a. Tenurial Security under Agrarian Land Reform
relationship can exist even if there is death of the lessee
or lessor, sale , transfer or conveyance of agricultural
land.
- The transferee of the agriland, the vendee is bound by the
leasehold relationship
- Should it be annotated? No. Not necessary. The law provides
for that.
- Leasehold relationship will remain. To protect the lessee from
possible ejectment or disposition of property.
- Refers to 2 parties
- It is referred as agricultural lessor and agricultural lessee
- Lease somebody must pay rental
- Can the lessor eject the tenant?
Yes, the lessor has the grounds provided by 3844 to eject the
tenant. Unless the ground for ejectment is not enumerated in
3844, the lessee cannot be ejected.
Po vs Dampal
- talks about redemption, the right of the lessee to redeem a property
that was foreclosed by the bank. But the law even mentions about the
7

right of pre-emption if ibaligya gani sa tag-iya ang yuta dunay
katungod nga e.offer ngadto sa lessee ang yuta.
Sec. 12 on legal redemption Farm lots foreclosed by the bank due
non-payment of a loan. Po is the highest bidder in the auction. The
previous owner, the mortgagor and the tenant filed a Civil Case against
the bank for annulment of mortgage. Meanwhile the tenant filed a
complaint for legal redemption with DAR.
Subject of this case is the case of legal redemption not the annulment of
mortgage. Because Dampal wants to redeem the land from the bank.
But PO said you have no right of redemption because it is already
beyond the period as provided under sec. 12. Sec 12 provides 180
days from notice in writing.
DARAB said no more right to redeem because it has prescribed. But
you have to know under sec. 12, it provides for a reckoning point, and
the reckoning point is a NOTICE IN WRITING. Who shall give the
notice? It is the vendee, supposed to be the bank that shall serve
notice on all the lessees including Private Respondent Dampal
because he is affected by the sale. Not only the lessees but also
including DAR.
-There was no notice served. So SC said, the lack of written notice does
not start the running of the prescriptive period.
- Contention of PO, the highest bidder Dampal, when you filed an
action against the bank for nullity of mortgage you were aware that
there was non-payment of the loan and the bank is to foreclose the
property. It was foreclosed that is why you are seeking the nullity of the
mortgage. Therefore you are considered to have a constructive
knowledge. SC said, this contention fails because of the express
requirement under the law that it has to be in WRITING.
One of the important provisions of the law is w/ respect to grounds to
dispossess. Take note: dispossess here means
removal/ejectment from the land. So you will note among the
grounds that has been listed, dili pwede ma.rakrakan ang
tenant ug pusil. The land owner still has to comply with this. This law
still applies. (on grounds for ejectment)
SIR: Under the current law, CARL, there is no provision on ejectment! So
which one will you consult? This law (RA 3844). There is no provision
under CARL regarding the rights and obligations, you have to consult this
law. Thats why this one is still very applicable with respect to leasehold.
Grounds to dispossess a lessee: TOP-FNS
a. Failure to comply with terms and conditions of
agreement
b. Planting of crops or the use of land for other purpose
than that agreed upon
c. Failure to adopt proven farm practices to conserve
land
d. Fault or negligence resulting in substantial damage
e. Non-payment of rental when due
- One of the Important ground is this non-payment of the
rental when due. Going back to the relationship, LO provides
the land, lessee labor and when there is production they are
supposed to divide the produce. The produce there to be given
by the lessee to the lessor/LO is the rental. The rental is FIXED
by law. The rental shall not exceed 25% of the average
normal harvest. D pwede patas.an. Nganu man? Maalkansi
ang lessee. Kung magsabot sila ug 50-50,unsaon pagka.uplift
sa economic status sa lessee?! Pwede paubsan? Pwede.
f. Employed a sublessee
- Normally the grounds are last two grounds, under 3844, there
is an express provision that the lessee will allow a sublessee.
- If they are agricultural workers under RA 3844, they are under
Bill Of Rights, they are entitled to minimum wage law, among
others.
- Agricultural lessee vs Civil lessee
To distinguish lessee under Civil Code and under Agrarian Law
1. Grounds to eject - AL 3844 while CL Civil Code
2. Where will you file the ejectment case agri lessee
DAR while civil lessee in regular courts
- Lessee has substantial rights, you dont have to allege , you
have to support.
- Allegation only is not sufficient

Extinguishment of relation vs dispossession
a. Extinguishment no court approval, voluntary act
(abandonment of land without knowledge of lessor or
voluntary surrender by lessee) or an act of God
b. Dispossession with court order, premise of lessee
Sta. Anna vs Carpo, the issue is non-payment of the rentals. You will
note there are different rulings of the DAR.
ABBREVIATIONS USED: PARAD is the provincial adjudicator. Provincial
Agrarian Reform Adjudicator PARAD. The DARAB is the central office in
Manila. So any decision of the PARAD goes to DARAB and from the
DARAB being a quasi-judicial agency under the rules of Court, goes to
CA.
Now SC discusses first about BURDEN OF PROOF. NOTE: According to
the SC under sec. 37 the burden of proof to show the existence of
a cause of rejectment is upon petitioner land owner. That means
we are talking about all the grounds to dispossess. It is the LO who has
the burden to prove the ground.
SC qualified that non-payment must be willful and deliberate. That
means di lang failure, it could be failure but if there was negligence on
the part of the lessee to pay that may not be taken against the lessee,
because it has to be WILLFUL and DELIBERATE non-payment.
So according to the court the lessee executed an affidavit that the LO
refused to receive the respective lease rentals and for another year the
lessee wrote two notices to the LO informing him of the availability of
the lease rentals pero wa kuha.a sa LO. That means there was no
willful and deliberate non-payment of the rentals due.
Sec. 37 talks about dispossess. There is a difference between
extinguishment of the relation as against dispossession.
- DISPOSSESSION there has to be a court order. Dili ni order
referring to civil court on the aspect of Civil law relationship, it
is in the context of the Department of agrarian reform.
- There is an ejectment under civil law, there is also an
ejectment under agrarian reform. The jurisdiction for one is
different from the other.
- Im sure youve heard cases about LO filing cases on
ejectment against occupants. Normally from squatters, in a
parcel of land. And its normal for lawyers to file the case
under the civil law concept. Not agrarian law. WHY? Its hard
8

ang agrarian and its difficult to the part of the LO. Why?
If you file ejectment under agrarian law you are bound
by whatever rights of the occupants may have on the
parcel of land. Bound ka especially under RA 3844 that
means you cannot eject unless your ground falls under any of
those grounds and unsa may kasagaran mahitabo sa yuta?
Diba naa sa yuta mo.kalit nalang ug turok ang mga tawo bisag
wa gitanum? Wa mo kabantay ana? Murag mushroom diba?
Tan.aw nimu nag.tulda lng, pagkahuman ni balay na, nya nipa
hut, nya nag.scene na jud. so you dont file it normally at the
agrarian court. Why? Unsa man imu e.ground? and besides if
you file it there, you recognize that there is
relationship of LO and Lessee. Remember TENURIAL
STATUS. Bisag mamatay na na cya di ghapon na nimu
mapahawa kay naa may nag.sunod. So what LO would do
is to file it under the civil concept mao na nga nay rule
70. Forcible entry and unlawful detainer. Of course it
may not fall under forcible entry, WHY? One year mana from
the time of entry, normally wa man ka diha. So imu buhaton
ngadto ka sa unlawful detainer and the allegation normally
was that there was TOLERANCE. You tolerate ang ila
occupation with the understanding nga hoy ug
pahawaon gani moh, hawa na. That is the civil law
concept.
- Jurisdiction is different, civil law concept you file to civil court,
agrarian ejectment you file ari sa agrarian Court /PARAD. So
when we mention here about court order we are referring to
the order coming from the agrarian court and the offense is
premised on the grounds under the law.
- Whereas if it is an extinguishment, normally it is a voluntary
act. Kung e. abandon, mopahawa sila sa yuta. Hinaot wala
pamusila kay aron mahadlok that is an extinguishment or
there is an act of God, basig gbaha.an cguro nya wala
mo.hubas ang baha.

Can relation be terminated by death?
No, continue between lessor and members of lessees
immediate farm household to be chosen by lessor within 1
month from death:
If lessor cannot choose, the law provides this order of
assumption: 1. surviving spouse; 2. eldest direct descendant
by consanguinity; 3. next eldest descendants in the order of
their age.
Liabilities of lessor if he ejects tenant without authorization?
-Fine or imprisonment
-Damages suffered
-Attorneys fees
-Remuneration for last income
That means that there must be a complaint filed before the
PARAD to be able to lawfully eject a tenant. So, it is also provided for
under the law.
Lease rental
Shall not be more than the equivalent of 25% of the average
normal harvest during the 3 agricultural years immediately
preceding the date of leasehold after deducting amount used
for the seeds and costs of harvesting, threshing, loading,
hauling and processing.

- NOTE: EQUIVALENT: because it is not necessary that the
payment of the lease rental is the produce. It can be the
produce, the money or can be both depending upon the
agreement of the parties.
- BUT, the lease rental cannot exceed 25%.
WHAT IS THE MEANING HERE OF AGRICULTURAL YEAR?
- The planting up to the harvest cycle, that constitutes
agricultural year. It is not referring to the calendar year. So
probably in one year, there is a cycle of 2 agricultural years
depending on the crop/crops planted.
Bill of Rights for Agricultural Labor
SECTION 39.Rights for Agricultural Labor. To enable the farm
workers to enjoy the same rights and opportunities in life as industrial
workers, they shall enjoy the following:
- (1)Right to self-organization;
- (2)Right to engage in concerted activities;
- (3)Right to minimum wage;
- (4)Right to work for not more than eight hours;
- (5)Right to claim for damages for death or injuries
sustained while at work;
- (6)Right to compensation for personal injuries,
death or illness; and
- (7)Right against suspension or lay-off.
SECTION 40.Right to Self-Organization. The farm workers shall
have the right to self-organization and to form, join or assist farm
workers' organizations of their own choosing for the purpose of
collective bargaining through representatives of their own
choosing: Provided, That this right shall be exercised in a manner as
will not unduly interfere with the normal farm operations. Individuals
employed as supervisors shall not be eligible for membership in farm
workers' organizations under their supervision but may form separate
organizations of their own.
SECTION 41.Right to Engage in Concerted Activities. The farm
workers shall also have the right to engage in concerted activities for
the purpose of collective bargaining and other mutual aid or
protection.
For the purpose of this and the preceding Section, it shall be the duty
of the farm employer or manager to allow the farm workers, labor
leaders, organizers, advisers and helpers complete freedom to enter
and leave the farm, plantation or compound at the portion of the
same where said farm workers live or stay permanently or
temporarily.
SECTION 42.Right to Minimum Wage. Notwithstanding any
provision of law or contract to the contrary, farm workers in farm
enterprises shall be entitled to at least P3.50 a day for eight hours'
work: Provided, That this wage may, however, be increased by the
Minimum Wage Board as provided for in Republic Act Numbered Six
hundred and two.
SECTION 43.Right to Eight Hours' Work. Notwithstanding the
provision of existing laws to the contrary, farm workers shall not be
required to work for more than eight hours daily. When the work is
not continuous, the time during which the farm worker is not working
and can leave his working place and can rest completely shall not be
counted.
9

Work may be performed beyond eight hours a day in case of actual or
impending emergencies caused by serious accidents, fire, flood,
typhoon, epidemic, or other disaster or calamity, or in case of urgent
work to be performed on farm machines, equipment or installations in
order to avoid a serious loss which the farm employer or manager
would otherwise suffer, or some other just cause of a similar nature,
but in all such cases the farm workers shall be entitled to receive
compensation for the overtime work performed at the same rate as
their regular wages, plus at least twenty-five per centum additional,
based on their daily wages.
No farm employer or manager shall compel a farm worker to work
during Sundays and legal holidays: Provided, however, That should
the farm worker agree to work on said days, he shall be paid an
additional sum of at least twenty-five per centum of his regular
compensation; Provided, further, That the farm employer or manager
shall not be held liable for any claim for overtime work which he had
not previously authorized, except if the work rendered was to avoid
damages to crops, produce, work animals or implements, buildings or
the like.
Any agreement or contract between the farm employer or manager
and the farm worker contrary to the provisions of this Section shall be
null and void.
SECTION 44.Right of Action for Damages. Notwithstanding the
provisions of existing laws to the contrary, Act Numbered Eighteen
hundred and seventy-four, as amended, entitled "An Act to extend
and regulate the responsibility of employers for personal injuries and
death suffered by their employees while at work", shall apply to farm
workers insofar as it may be applicable.
SECTION 45.Right to Compensation for Personal Injuries, Death, or
Illness. Notwithstanding the provisions of existing laws to the
contrary, Act Numbered Thirty-four hundred and twenty-eight, as
amended, entitled "An Act prescribing the compensation to be
received by employees for personal injuries, death or illness
contracted in the performance of their duties", shall apply to farm
workers insofar as it may be applicable.
SECTION 46.Right Against Suspension or Lay-Off. The landowner,
farm employer or farm manager shall not suspend, lay-off or dismiss
any farm worker without just cause from the time a farm workers'
organization or group of farm workers has presented to the landowner
a petition or complaint regarding any matter likely to cause a strike or
lockout and a copy thereof furnished with the Department of Labor, or
while an agricultural dispute is pending before the Court of Agrarian
Relations. If it is proved during the said period that a worker has been
suspended or dismissed without just cause, the Court may direct the
reinstatement and the payment of his wage during the time of his
suspension or dismissal, or of any sum he should have received had
he not been suspended or dismissed, without prejudice to any criminal
liability of the landowner, farm employer or farm manager as
prescribed by Section twenty-four of Commonwealth Act Numbered
One hundred and three, as amended. cdasia
SECTION 47.Other Applicable Provisions. All other existing laws
applicable to non-agricultural workers in private enterprises which are
not inconsistent with this Code shall likewise apply to farm workers,
farm labor organizations and agrarian disputes as defined in this Code,
as well as to relations between farm management and farm labor and
the functions of the Department of Labor and other agencies.
SECTION 48.Exceptions to Preceding Section. The preceding
Sections of this Chapter, except Sections forty, forty-one, forty-two
and forty-three shall not apply to farm enterprises comprising not
more than twelve hectares
SUPPLETORY EFFECT (nothing sa slides or sa records, but apil sa
syllabus, idk asa sa law dapit enlighten meeee) wala pud ang Reyes
vs. Reyes GR 140164 (read case nalang)
- IMO: This law has suppletory effect on CARL based on the
grounds to dispossess/eject since wala man dawn na sa CARL
(believe at your own risk!!)

TENANTS EMANCIPATION DECREE
(Pres. Decree no.27.) Marcos decree
BENEFICIARIES
Beneficiaries of the Decree are the bona fide tenant farmers of
private agricultural lands primarily devoted to rice and corn under a
system of share-crop or lease tenancy (not farm labor), whether
classified as landed estate or not
The tenant farmer- whether in land classified as landed estate (i.e.,
with an area of 24 hectares or above) or not, shall be deemed owner
(subject to certain requirements and conditions) of a portion constituting
a family size of five (5) hectares, if not irrigated and three (3)hectares, if
irrigated. Lands transferred to tenant-farmers under the Decree will
revert to the government and not to the landowners in case where the
tenant abandons his tillage or refuses to take advantage of his rights
under the laws.
Note that the Decree does not apply to lands owned by the
government or government-owned corporation.

DIFFERENCE:

Difference between PD 27 (Tenants Emancipation Decree) and
RA 6657 (Comprehensive Agrarian Reform Law)
PD 27 RA 6657
Purpose Abolish leasehold
in tenanted
lands. It made
the tiller of the
land the
amortizing
owner of the
land he tills.
Main purpose is to
provide land for the
landless through
acquiring and
distribution of lands and
providing support
facilities and system for
the benefit of the
farmers.
Land
Covered
Private lands
which are
devoted to rice
and corn ONLY.
Covers all public and
private agricultural lands
including other lands of
public domain suitable
for agriculture
regardless of tenurial
arrangement and
commodity produced.
Effect in
Impleme
nting
Land
Reform
Program
With the passage
of RA 6657, it is
only a suppletory
law. This means,
it will be
applicable only
to those matters
not covered by
RA 6657.
Main governing law of
Agrarian Land Reform
here in the Philippines.
Number
of
hectares
that a
tenant or
farmer
can own
Makes a
distinction:
- If irrigated: 3
- If not
irrigated: 5
Note: not beneficiaries:
this is referring to the
tenants (because naa
sad baya beneficiaries
na children under
CARL)
o The beneficiaries,
meaning the ARBs
(agrarian reform
beneficiaries) can be
awarded not
10

exceeding 3 hectares
Ownershi
p of the
land that
can be
retained
7 hectares if
personally
cultivated by the
landowner OR
will cultivate
the retention is 5
hectares regardless of
whether the
landowner is tilling the
land or not.
o Children of the
landowner not
exceeding 3
hectares each,
subject to 2
conditions:
1. 15 years old and
above
2. Personally cultivating
or directly managing

PD 27 rice & corn land
RA 6657 all other agricultural land (including lands of public domain).

Sigre vs. CA, G.R. No. 109568, August 8, 2002
The Court need not belabor the fact that R.A. 6657 or the CARP Law
operates distinctly from P.D. 27. R.A. 6657 covers all public and
private agricultural land including other lands of the public
domain suitable for agriculture as provided for in Proclamation
No. 131 and Executive Order No. 229; while, P.D. 27 covers rice
and corn lands. On this score, E.O. 229, which provides for the
mechanism of the Comprehensive Agrarian Reform Program, specifically
states: "Presidential Decree No. 27, as amended, shall continue to
operate with respect to rice and corn lands, covered thereunder. x x x" It
cannot be gainsaid, therefore, that R.A. 6657 did not repeal or
supersede, in any way, P.D. 27. And whatever provisions of P.D. 27 that
are not inconsistent with R.A. 6657 shall be suppletory to the latter, and
all rights acquired by the tenant-farmer under P.D. 27 are retained even
with the passage of R.A. 6657.
Sigre v. CA : PD 27 is suppletory and operates separately from RA 6657.

Can lands acquired under PD 27 be transferred by DAR to
another qualified beneficiary?

Estolas vs. Mabalot, G.R. No. 133706, May 7, 2002
Facts:
A Certificate of Land Transfer (hereinafter referred
to as CLT) was issued in favor of respondent over a 5,000
square meter lot (hereinafter referred to as subject land).
Needing money for medical treatment, respondent passed on
the subject land to the petitioner. According to respondent,
there was only a verbal mortgage; while according to
petitioner, a sale had taken place.
Respondent filed a Complaint against the petitioner
before the Barangay Lupon in Pangasinan for the purpose of
redeeming the subject land. When no amicable settlement was
reached, the case was referred to the DAR regional office
. DARs District Office found that respondent merely gave the
subject land to petitioner as guarantee for the payment of a
loan he had incurred from the latter; and recommending that
the CLT remain in the name of respondent and that the money
loan be returned to petitioner.
Petitioner insisted that the subject land had been
sold to him by respondent and requested the DAR to cancel
the CLT in respondents name. Another investigation was
conducted on the matter which led to the issuance of an Order
issued by DAR Regional Director. In the said Order, the DAR
found the act of respondent in surrendering the subject land in
favor of petitioner as constituting abandonment thereof, and
denied respondents prayer for redemption of the subject land.
Respondents request for reinvestigation was denied in a
Resolution.
Thus, respondent appealed the case to the DAR
Central Office which an order was issued reversing the assailed
Order of DAR Regional Director and ordering the petitioner to
return the subject land to respondent. Petitioners Motion for
Reconsideration was denied.

Issues:

A. Whether or not there is a valid abandonment made by Respondent
Mabalot.
B. Whether the act of Respondent Mabalot in conveying to petitioner the
right to possess and cultivate the disputed parcel of land constitutes a
valid abandonment thereby rendering the property available for transfer
to other bonafide farmers.
C. Whether the issuance of an emancipation patent and thereafter a
transfer certificate of title in the name of petitioner has validated and
legitimized possession and ownership over the disputed property."

Held:
Main Issue:
Abandonment
The subject property was awarded to respondent by virtue of PD 27. A
CLT was issued in his favor. PD 27 specifically provides that when private
agricultural land -- whether classified as landed estate or not is
primarily devoted to rice and corn under a system of sharecrop or lease
tenancy, the tenant farmers thereof shall be deemed owners of a portion
constituting a family-size farm of five (5) hectares if not irrigated, and
three (3) hectares if irrigated.
Petitioner avers that respondent neither protested when the former had
the subject land surveyed and planted with 40 mango trees, nor
attempted to return the money he had borrowed from petitioner in 1976.
Because the lot has been abandoned by respondent, the beneficiary, and
because PD 27 does not prohibit the transfer of properties acquired
under it, petitioner theorizes that the Department of Agrarian Reform
(DAR) may award the land to another qualified farmer-grantee.

Non-transferability of Land Awarded Under PD 27
We do not agree. PD 27 specifically provides that title to land acquired
pursuant to its mandate or to that of the Land Reform Program of the
government shall not be transferable except to the grantees heirs by
hereditary succession, or back to the government by other legal means.
The law is clear and leaves no room for interpretation.
Upon the promulgation of PD 27, their emancipation gave them the
rights to possess, cultivate and enjoy the landholding for themselves.
These rights were granted by the government to them as the tillers and
to no other. Thus, to insure their continuous possession and enjoyment
of the property, they could not, under the law, effect any transfer except
back to the government or, by hereditary succession, to their
successors.
11

Furthermore, this Court has always ruled that agrarian laws must be
interpreted liberally in favor of the grantees in order to give full force
and effect to the clear intent of such laws: "to achieve a dignified
existence for the small farmers"; and to make them "more independent,
self-reliant and responsible citizens, and a source of genuine strength in
our democratic society."
12

Neither are we convinced that an award under PD 27 may be transferred
to another in case the grantee abandons it. The law is explicit.
No Abandonment
11

For abandonment to exist, the following requisites must be proven: (a) a
clear and absolute intention to renounce a right or claim or to desert a
right or property and (b) an external act by which that intention is
expressed or carried into effect. There must be an actual, not merely a
projected, relinquishment; otherwise, the right or claim is not vacated or
waived and, thus, susceptible of being appropriated by another. In the
present case, no such "willful failure" has been demonstrated. Quite the
contrary, respondent has continued to claim dominion over the land.
No Valid Reallocation
Furthermore, even if respondent did indeed abandon his right to possess
and cultivate the subject land, any transfer of the property may only be
made in favor of the government. In Corpuz v. Grospe,
19
the Court held
that there was a valid transfer of the land after the farmer-grantee had
signed his concurrence to the Samahang Nayon Resolution surrendering
his possession of the landholding. This voluntary surrender to the
Samahang Nayon constituted a surrender or transfer to the government
itself.
In the present case, there was no valid transfer in favor of the
government. It was petitioner himself who requested the DAR to cancel
respondents CLT and to issue another one in his favor.
21
Unlike in the
above-cited case, respondents land was not turned over to the
government or to any entity authorized by the government to reallocate
the farmholdings of tenant-farmers who refuse to become beneficiaries
of PD 27. Petitioner cannot, by himself, take over a farmer-beneficiarys
landholding, allegedly on the ground that it was abandoned. The proper
procedure for reallocation must be followed to ensure that there was
indeed abandonment, and that the subsequent beneficiary is a qualified
farmer-tenant as provided by law.
WHEREFORE, the Petition is hereby DENIED

Estolas v. Mabalot : Land may only be transferred either by succession or
to government.
DAR cannot transfer directly to a qualified beneficiary.

Land Bank of the Phil. vs. Heirs of Eleuterio Cruz, G.R. No.
175175, September 29, 2008
Facts:
Case is regarding the valuation to the land of the respondents of which
the area was placed by the government under the coverage of the
operation land transfer program under PD 27.
The LBP, petitioners herein, valued the land in accordance with the
guidelines set forth under PD 27 and EO No. 228 and pegged the value
of the land amounting to P106,935.76 per hectare. Respondents rejected
petitioners valuation and insist on claiming that the said land is worth
between P150,00 to P200,000 per hectare.
The Cagayan Provincial Agrarian Reform Adjudicator (PARAD) however
valued the land at P80,000 following the factors set under RA 6557
(CARL) and of which such value, as just compensation to the
respondent, was approve by the lower court (RTC) setting as Special
Agrarian Court (SAC).

Issue:
Whether or not PD 27 or RA 6557 is the applicable law in determining
the value of the land which was taken under PD 27 or before RA 6557
was enacted.
Held:
The Court laid down in Paris v. Alfeche the applicability of P.D. No. 27
and E.O. No. 228 in relation to R.A. No. 6657 in the matter of the
payment of just compensation. There the Court explained that while
under P.D. No. 27 tenant farmers are already deemed owners of the
land they till, they are still required to pay the cost of the land before the
title is transferred to them and that pending the payment of just
compensation, actual title to the tenanted land remains with the
landowner.
In Paris, the application of the process of agrarian reform was still
incomplete thus, the Court held therein that with the passage of R.A.
No. 6657 before its completion, the process should now be
completed under R.A. No. 6657, with P.D. No. 27 and E.O. No.
228 applying only suppletorily.
It would certainly be inequitable to determine just compensation based
on the guideline provided by PD No. 27 and EO 228 considering the
DARs failure to determine the just compensation for a considerable
length of time. That just compensation should be determined in
accordance with RA 6657, and not PD 27 or EO 228, is especially
imperative considering that just compensation should be the full and fair
equivalent of the property taken from its owner by the expropriator, the
equivalent being real, substantial, full and ample.
The land therefore should be valued under RA 6657 following the
guidelines set in DAR AO no. 5, series of 1998 and not under PD 27.

Land Bank v. Heirs of Cruz:
-The determination of just compensation should be based on
RA 6657 for lands covered under PD 27. PD 27 applies only
suppletorily.

Although this was not discussed in any of the case: ngano nindot man
ang under 6657 and not under PD 27? Just by analysis. There are more
factors under 6657. So the factors are more reasonable and just insofar
as the owner and the government is concerned.

One of the factors considered under just compensation is the tax
declaration.
What can you find under the tax declaration?
Assessed value. Upon whose declaration? The
OWNERs declaration. If gamay ra imo ideclare
then gamay ra sad imo just compensation.
Other factor is the zonal value.
*LBP vs. Sps. Rokaya GR 180804: not in records/ppt but according to
the syllabus: SAME PRINCIPLE with LBP vs. HEIRS OF CRUZ

Abandonment:

GUAN vs. QUIRINO
- The awardee here abandoned the land for 11 years.
- The SC said that under this admin order that if the
awardee/beneficiary fails to cultivate, till or develop or to use
the land for any economic purpose continuously for a period of
2 calendar years that is abandonment. NOTE: the law use
CALENDER years, not agricultural. So calendar year is
favorable to the tenant.

PRESENT LAW (CARPER) RA 6657
CHAPTER 1
Is industrialization a component of Agrarian Reform?Yes.
Sec.2 (RA 6657)
sound rural development and
industrialization
to promote industrialization
Industrial inputs necessary to agriculture
(fertilizers, insecticides, hybrid seeds,
irrigation systems, tractors)

Can private corporation acquire ownership of alienable lands of
public domain?
Chavez v. PEA: No, only through lease not exceeding 25 yrs. Renewable
not more than 25yrs. And not to exceed 1,000 hectares

(CONST., Art. XII, Sec.3)

DEFINITIONS: Agriculture, enterprise, agricultural activity.
12

One section that uses the word agriculture is Section 4. COVERAGE. The
law says:
This law covers all public/private agricultural lands including other
lands of the public domain suitable for agriculture.
SEC 3(B) defines agriculture or agricultural activity.
Sec. 3 (b) Agriculture or Agricultural Activity
- Means the cultivation of the soil, planting of crops, growing of fruit
trees, raising of livestock, poultry or fish including the harvesting of such
farm products, and other farm activities and practices performed by a
farmer in conjunction with such farming operations done by person
whether natural or juridical.

Question: Ngano man puwa mana ang raising of livestock, poultry or
fish?
o Originally, that was placed by law. But in the case of Luz Farms
versus Secretary of DAR (1990), the SC struck down that phrase
for being unconstitutional.
Luz Farms v. Sec. Sec.3 (b) unconstitutional
(raising of livestock, poultry and swine per SC)
- use of land is incidental and not the principal
factor
- RA 7881 (effective May 1995)
- amended Sec.3(b) and removed the raising of livestock,
poultry or fish
raising of livestock, swine and poultry is different from crop or
tree farming.
Industrial, not agricultural activity.
Great portion of the investment in this enterprise is in the form
of industrial fixed assets, such as: animal housing structures
and facilities, drainage, waterers and blowers, feedmill with
grinders, mixers, conveyors, exhausts and generators,
extensive warehousing facilities for feeds and other supplies,
anti-pollution equipment like bio-gas and digester plants
augmented by lagoons and concrete ponds, deepwells,
elevated water tanks, pumphouses, sprayers, and other
technological appurtenances

SIR: Mao na akong kasagaran binuang ani wala kay baboy na itanom,
baktin na mahimong baboy hehehe.

- DAR Admin. Order No. 01, S. 2004 (RULES &
REGULATIONS GOVERNING THE EXCLUSION OF
AGRICULTURAL LANDS USED FOR CATTLE RAISING
FROM THE COVERAGE OF CARP)
- Livestock and poultry do not sprout from the land.
5 years pa after nakarealize ang congress, so it was eventually removed
from sec3(B).

Governs the exclusion of agri lands used for cattle raising from coverage
of CARP. If you have an application for exclusion, you file it with DAR to
be excluded from CARP, you should prove that the land is actually,
exclusively and directly (ADE) used for cattle raising. So it was the policy
that if the land is ADE for cattle raising as of June 15, 1988 then it shall
be excluded but of course you have to wait for the ruling of DAR with
respect to application for exclusion.

Any change in use shall be subject to policies on land conversion If
you want to change classification of your land from agricultural to
residential or commercial or industrial it is governed by another policy
not this admin order.
Objective: To prevent circumvention of CARP and to protect
the rights of ARBs due to unauthorized change/conversion or
fraudulent declaration of areas used for cattle purposes.
Why? (Just a possibility daw) It may have happened that DAR
may not be able to inspect all lands that are covered under
CARP in fact if Im not mistaken, up to now, only 63% has
been achieved insofar as implementation of the Law is
concerned.

Coverage: All applications for exclusion from CARP of private
agricultural lands actually, exclusively and directly used for
cattle raising as of 15 June 1988.

DAR actually has a ratio for that admin order no. 9 in the succeeding
case: one animal is entitled to 1 hectare of land, 1 cattle. And then 1.7
something hectares thats good for 21 heads insofar as infrastructure is
concerned.

Those that will exceed or portions which will not be covered by this will
have to be covered under CARP, the purpose should be for the growth of
cattle industry but if the filing of the exclusion is in response to notice of
CARP coverage, DAR shall deny due course if the application is filed 60
days after date of receipt of notice. That means you have to be fast do
not wait for DAR to be able to send you a notice of CARP coverage.
Before DAR should serve that, you have to already apply for a petition
for exclusion. Only exclusion petitions fully supported shall be accepted.

Types of animal: cattle (of bovine family), bull, calf, cow.
Policies:
(1) Those ADE used for cattle raising as of 15 June 1988 shall
be excluded (exclusion to be granted only upon proof and
continuously utilized up to time of application);
(2) Any change in use shall be subject to policies on land
conversion
(3) Only the grazing/pasture area and for infrastructure
necessary for cattle raising shall be excluded; all other areas
shall be covered.
(4) Encourage growth of cattle industry
(5) If filing of exclusion is in response to notice of CARP
coverage, DAR shall deny due course if application is filed 60
days after date of receipt of notice.
(6) Only exclusion applications fully supported by documents
shall be accepted

DAR v. Sutton: (leading case due to nullification of AO no. 9)

Masbate land -cattle-breeding capital of Phil
(VOS - due to Luz Farms - withdraw VOS)
- Constitutionality of AO No. 9, S. 1993 (prescribing a maximum
retention limit for owners of lands devoted to livestock
raising);
- SC nullified AO; RA 7881 changed definition of
agricultural activity by dropping from its coverage
lands that are devoted to commercial livestock, poultry
and swine-raising. Congress clearly sought to align the
provisions of our agrarian laws with the intent of the
1987 Constitutional Commission to exclude livestock
farms from the coverage of agrarian reform.

Now what is the implication of Luz farms case and the amendment made
by congress per RA 7881?
- Supreme court and congress are saying that lands devoted to
live stock are not to be covered under CARP.

What did DAR do after the Luz Farms case?
- DAR issued AO #9 series 1993. Remember the Luz farms case
was in 1990 and AO #9 is in 1993, that is why in this case,
originally the land owner filed a VOS; voluntary offer to sell
meaning he is surrendering to the government the land for
purposes of CARP but here comes Luz Farms. (Im not sure
13

how many months after the filing of the VOS did the supreme
court come out with the ruling in Luz Farms case)
- In Luz Farms supreme court said, lands devoted to live stock
are not covered so they are saying well we have parcels of
land devoted to livestock so we have to withdraw our VOS
and questioned AO #9 saying under the constitution, Luz
Farm, and congress, DAR cannot regulate the raising of
livestock because in this particular AO, DAR stated that only
portions of private agricultural lands used for the raising of
livestock poultry or swine shall be excluded.

*There is a constitutional basis for saying that live stock raising is not
included under CARP because it was found in the deliberations of the
CON-COM particularly commissioner Tadeo, the one representing the
tenant, (and he was asked in Filipino of course) whether the farm
workers include those person who are working in livestock, poultry and
swine. And his answer was that they are NOT included.
- So taking a cue from that deliberation the supreme court, in
the case of Luz Farms deleted that phrase raising of live stock
etc. from the definition of agricultural activity.

SC: DAR you have no power to regulate. What you did, using the AO
was trying to regulate live stock farming but you have no power because
that is not within your jurisdiction, it is not part of CARP coverage. This
has been exempted by the constitution from the coverage of agrarian
reform.

Because DAR lost in the Sutton case when supreme court nullified AO
#9, DAR issued an admin order #7. This time DAR learned its lesson, we
will not regulate livestock because that is outside of our authority but
what we will do is we will classify lands those devoted to livestock and
those not devoted to livestock to their guidelines.

Admin. Order No. 07, S. 2008

Policy guidelines:
Lands ADE used for livestock purposes as of 15 June 1988 and
continuously used shall be excluded; conversely, those not
ADE are subject to CARP if one or more of the following
conditions apply: (1) there is agricultural activity in the area
(i.e., cultivation of soil, planting of crops, growing of trees
including harvesting); (2) land is suitable for agriculture and
occupied and tilled by farmers.
In line with principle of regularity in the performance of official
functions, all processes by DAR per AO No. 9 are valid.
- But this one surprises me, despite the fact that AO
#9 was nullified, DAR said in line with the principle
of regularity of the performance of official
functions all processes of DAR for AO number 9 are
valid. Anyway nobody questioned it!
Sec. 3 (c) Agricultural land land devoted to agricultural
activity & not classified as mineral, forest, residential,
commercial or industrial land.

Republic vs Salvador Lopez Agri-business

Facts
Subject of this petition are four (4) parcels of land with an aggregate
area of 160.1161 hectares registered in the name of Salvador N. Lopez
Agri-Business Corporation.
On August 2, 1991, Municipal Agrarian Reform Officer (MARO) Socorro
C. Salga issued a Notice of Coverage to petitioner with regards (sic) to
the aforementioned landholdings which were subsequently placed under
Compulsory Acquisition pursuant to R.A. 6657 (Comprehensive Agrarian
Reform Law).

On December 10, 1992, petitioner filed with the Provincial Agrarian
Reform Office (PARO), Davao Oriental, an Application for Exemption of
the lots covered by TCT No. T-12637 and T-12639 from CARP coverage.
It alleged that pursuant to the case of Luz Farms v. DAR Secretary said
parcels of land are exempted from coverage as the said parcels of land
with a total area of 110.5455 hectares are used for grazing and habitat
of petitioner's 105 heads of cattle, 5 carabaos, 11 horses, 9 heads of
goats and 18 heads of swine, prior to the effectivity of the
Comprehensive Agrarian Reform Law (CARL).

On December 13, 1992 and March 1, 1993, the MARO conducted an
onsite investigation on the two parcels of land confirming the presence
of the livestock as enumerated.

On June 24, 1993, TCT No. T-12635 covering Lots 1454-A & 1296 was
cancelled and a new one issued in the name of the Republic of the
Philippines under RP T-16356. On February 7, 1994, petitioner through
its President, Salvador N. Lopez, Jr., executed a letter-affidavit addressed
to the respondent-Secretary requesting for the exclusion from CARP
coverage of Lots 1454-A and 1296 on the ground that they needed the
additional area for its livestock business. On March 28, 1995, petitioner
filed before the DAR Regional Director of Davao City an application for
the exemption from CARP coverage of Lots 1454-A and 1296 stating that
it has been operating grazing lands even prior to June 15, 1988 and that
the said two (2) lots form an integral part of its grazing land.

The DAR Regional Director, after inspecting the properties, issued an
Order dated March 5, 1997 denying the application for exemption of Lots
1454-A and 1296 on the ground that it was not clearly shown that the
same were actually, directly and exclusively used for livestock raising
since in its application, petitioner itself admitted that it needs the lots for
additional grazing area. The application for exemption, however of the
other two (2) parcels of land was approved.

Issue:
Whether or not the lands are covered under CARL

Held:
In contrast, the Limot lands were found to be agricultural lands devoted
to coconut trees and rubber and are thus not subject to exemption from
CARP coverage.

In the Report dated 06 April 1994, the team that conducted the
inspection found that the entire Limot lands were devoted to coconuts
(41.5706 hectares) and rubber (8.000 hectares) and recommended the
denial of the application for exemption. 30 Verily, the Limot lands were
actually, directly and exclusively used for agricultural activities, a fact
that necessarily makes them subject to the CARP. These findings of the
inspection team were given credence by the DAR Regional Director who
denied the application, and were even subsequently affirmed by the DAR
Secretary and the Court of Appeals.

In the 07 February 1994 Letter-Affidavit addressed to the DAR Secretary,
SNLABC requested the exemption of the Limot lands on the ground that
the corporation needed the additional area for its livestock business. As
pointed out by the DAR Regional Director, this Letter-Affidavit is a clear
indication that the Limot lands were not directly, actually and exclusively
used for livestock raising. SNLABC casually dismisses the clear import of
their Letter-Affidavit as a "poor choice of words." Unfortunately, the
semantics of the declarations of SNLABC in its application for exemption
are corroborated by the other attendant factual circumstances and
indicate its treatment of the subject properties as non-livestock.

Verily, the MARO itself, in the Investigation Report cited by no less than
SNLABC, found that the livestock were only moved to the Limot lands
sporadically and were not permanently designated there. The DAR
Secretary even described SNLABC's use of the area as a "seasonal
extension of the applicant's 'grazing lands' during the summer."
Therefore, the Limot lands cannot be claimed to have been actually,
directly and exclusively used for SNLABC's livestock business, especially
since these were only intermittently and secondarily used as grazing
areas. The said lands are more suitable and are in fact actually,
directly and exclusively being used for agricultural purposes.

14

Tax declaration classified as agricultural land (one way to
prove)- it is not conclusive.

There are 2 basic functions of DAR in relation to CARP,
1. Agrarian Law Implementation (ALI): who are involved in
implementation? From the bottom you have the MARO going
up you have the PARO(provincial), RARO (regional), Secretary
of Agrarian Reform and from that office of the president, CA
then SC, thats the 1
st
basic function in so far as
implementation.
2. Decision making(quasi-judicial): the MARO has no function but
in quasi judicial from the bottom you have PARAB(provincial
adjudicator), RARAB(regional), DARAB based in manila the
central office from DARAB to CA to SC.

But you have to note in the implementation aspect it is possible nga
from the MARO etc., there is a delineation along the way but only on two
aspects meaning (especially on the coverage on the land) it is possible
that the trial court will intervene somewhere, what aspects?
1. Just compensation
2. criminal offenses
It is only on two aspects that the civil court has jurisdiction. Im referring
to RTC.

CASE: There are 2 lands here. You have the Lopez land and the 2
nd
one
is the Limoc Lands. You have here the finding of MARO of several heads
of cattle, some covered by several certificates. There were structures
used for livestock business, the existence of the cattle prior to the
enactment of CARL positively affirmed, farm workers and overseers
interviewed by the MARO.
SC: Lopez lands you are devoted to livestock raising therefore not
included under CARL.
DAR argued: SC the tax declaration characterized the lopez land as
agricultural.
SIR: In a tax dec, you will find there the classification of the land, and
pinakapermero ana nga table agricultural sa ubos either residential
commercial or industrial ug agri imu classification barato imu bayaran
nga real property tax but the moment nga mahimo nag siyag
commercial(?) or industrial, it goes higher.
So DAR is saying: therefore the fact that it is agri, this detracted from
the claim that they were used for livestock purposes
but SC said: there is no law or jurisprudence that holds that land
classification in a tax dec is conclusive in filing. That means you may not
rely solely on the tax dec., you can base it on another evidence, and
what is that evidence? Here in the Lopez case you have the findings of
the MARO, which findings stated the lands were used for livestock
raising.
SIR: But Im not saying you cannot use tax dec as a basis but you
cannot rely on it solely. You can also rely on other evidence specially on
MAROs findings which according to our jurisprudence is entitled to
respect by the SC.
What about Limot Lands, what is the finding? The report says the entire
limot lands were devoted to coconut and rubber so the question was:
where the limot lands ADE devoted? NO! why? Because the entire limot
lands were planted with coconuts and rubber. So verily the limot lands
were ADE used for agricultural plantations which makes them subjects to
CARL. The corporation SNL-ABC argued that there is a misapprehension
of facts and requested an exemption on the ground that the corporation
needed the additional area for the livestock business. So what is the
logic there? Needed the additional area that will happen in the future
which is proof that the land is not yet being actually used for livestock
business.

Milestone Farms, Inc. vs. Office of the President

Facts:
Petitioner Milestone Farms, Inc. (petitioner) was incorporated with the
Securities and Exchange Commission on January 8, 1960. 4 Among its
pertinent secondary purposes are: (1) to engage in the raising of cattle,
pigs, and other livestock; to acquire lands by purchase or lease, which
may be needed for this purpose; and to sell and otherwise dispose of
said cattle, pigs, and other livestock and their produce when advisable
and beneficial to the corporation; (2) to breed, raise, and sell poultry; to
purchase or acquire and sell, or otherwise dispose of the supplies,
stocks, equipment, accessories, appurtenances, products, and by-
products of said business; and (3) to import cattle, pigs, and other
livestock, and animal food necessary for the raising of said cattle, pigs,
and other livestock as may be authorized by law. 5

On June 10, 1988, a new agrarian reform law, Republic Act (R.A.) No.
6657, otherwise known as the Comprehensive Agrarian Reform Law
(CARL), took effect, which included the raising of livestock, poultry, and
swine in its coverage. However, on December 4, 1990, this Court, sitting
en banc, ruled in Luz Farms v. Secretary of the Department of Agrarian
Reform 6 that agricultural lands devoted to livestock, poultry, and/or
swine raising are excluded from the Comprehensive Agrarian Reform
Program (CARP).

Thus, in May 1993, petitioner applied for the exemption/exclusion of its
316.0422-hectare property, covered by Transfer Certificate of Title Nos.
(T-410434) M-15750, (T-486101) M-7307, (T-486102) M-7308, (T-
274129) M-15751, (T-486103) M-7309, (T-486104) M-7310, (T-332694)
M-15755, (T-486105) M-7311, (T-486106) M-7312, M-8791, (T-486107)
M-7313, (T-486108) M-7314, M-8796, (T-486109) M-7315, (T-486110)
M-9508, and M-6013, and located in Pinugay, Baras, Rizal, from the
coverage of the CARL, pursuant to the aforementioned ruling of this
Court in Luz Farms.

Meanwhile, on December 27, 1993, the Department of Agrarian Reform
(DAR) issued Administrative Order No. 9, Series of 1993 (DAR A.O. No.
9), setting forth rules and regulations to govern the exclusion of
agricultural lands used for livestock, poultry, and swine raising from
CARP coverage. Thus, on January 10, 1994, petitioner re-documented its
application pursuant to DAR A.O. No. 9. 7

Acting on the said application, the DAR's Land Use Conversion and
Exemption Committee (LUCEC) of Region IV conducted an ocular
inspection on petitioner's property and arrived at the following findings:

[T]he actual land utilization for livestock, swine and poultry is 258.8422
hectares; the area which served as infrastructure is 42.0000 hectares;
ten (10) hectares are planted to corn and the remaining five (5) hectares
are devoted to fish culture; that the livestock population are 371 heads
of cow, 20 heads of horses, 5,678 heads of swine and 788 heads of
cocks; that the area being applied for exclusion is far below the required
or ideal area which is 563 hectares for the total livestock population; that
the approximate area not directly used for livestock purposes with an
area of 15 hectares, more or less, is likewise far below the allowable
10% variance; and, though not directly used for livestock purposes, the
ten (10) hectares planted to sweet corn and the five (5) hectares
devoted to fishpond could be considered supportive to livestock
production.

On January 21, 1997, then DAR Secretary Ernesto D. Garilao (Secretary
Garilao) issued an Order exempting from CARP only 240.9776 hectares
of the 316.0422 hectares previously exempted by Director Dalugdug,
and declaring 75.0646 hectares of the property to be covered by CARP.
14

15

Secretary Garilao opined that, for private agricultural lands to be
excluded from CARP, they must already be devoted to livestock, poultry,
and swine raising as of June 15, 1988, when the CARL took effect. He
found that the Certificates of Ownership of Large Cattle submitted by
petitioner showed that only 86 heads of cattle were registered in the
name of petitioner's president, Misael Vera, Jr., prior to June 15, 1988;
133 were subsequently bought in 1990, while 204 were registered from
1992 to 1995. Secretary Garilao gave more weight to the certificates
rather than to the headcount because "the same explicitly provide for
the number of cattle owned by petitioner as of June 15, 1988.

Issue:
Whether or not the lands are covered under CARL

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

In the case at bar, we find that the impugned A.O. is invalid as it
contravenes the Constitution. The A.O. sought to regulate livestock
farms by including them in the coverage of agrarian reform and
prescribing a maximum retention limit for their ownership. However, the
deliberations of the 1987 Constitutional Commission show a clear intent
to exclude, inter alia, all lands exclusively devoted to livestock, swine and
poultry-raising. The Court clarified in the Luz Farms case that livestock,
swine and poultry-raising are industrial activities and do not fall within
the definition of "agriculture" or "agricultural activity." The raising of
livestock, swine and poultry is different from crop or tree farming. It is
an industrial, not an agricultural, activity. A great portion of the
investment in this enterprise is in the form of industrial fixed assets, such
as: animal housing structures and facilities, drainage, waterers and
blowers, feedmill with grinders, mixers, conveyors, exhausts and
generators, extensive warehousing facilities for feeds and other supplies,
anti-pollution equipment like bio-gas and digester plants augmented by
lagoons and concrete ponds, deepwells, elevated water tanks,
pumphouses, sprayers, and other technological appurtenances. TaDSHC

Clearly, petitioner DAR has no power to regulate livestock farms which
have been exempted by the Constitution from the coverage of agrarian
reform. It has exceeded its power in issuing the assailed A.O.

Petitioner's admission that, since 2001, it leased another ranch for its
own livestock is fatal to its cause. 64 While petitioner advances a
defense that it leased this ranch because the occupants of the subject
property harmed its cattle, like the CA, we find it surprising that not even
a single police and/or barangay report was filed by petitioner to amplify
its indignation over these alleged illegal acts. Moreover, we accord
respect to the CA's keen observation that the assailed MARO reports and
the Investigating Team's Report do not actually contradict one another,
finding that the 43 cows, while owned by petitioner, were actually
pastured outside the subject property.

Adjacent property is not covered.

SIR: Upon the report of the MARO there was no livestock farming but in
the adjacent property there were 43 heads of cattle, in the area
adjacent. The area is not owned by the land owner of the subject
property because the land owner leased the area from another person.
The contention of the land owner: he did not use the subject property
for this 43 head of cattle because according to him there were occupants
of the said property who harmed the 43 head of cattle. Thats why he
allegedly transferred the cattle to the area adjacent and leased the
adjacent area from another person. That means in the subject property,
there is no livestock found. The subject property was not devoted to
livestock raising.

SC: The fact that you are leasing another ranch for raising of your own
livestock, that is fatal to your cause. Even if you have alleged that the
occupants of the subject property harmed its cattle, you did not submit a
police or a barangay report to amplify your argument and the supreme
court accorded respect to the inspection of MARO that the 43 cows while
owned by petitioner were actually pastured outside of the subject
property. So what is the implication if there was no devotion to the
subject property to live stock raising? The property is not excluded from
CARP coverage.

Agricultural Land (Section 3 c)

Sec. 3 (c) Agricultural land land devoted to agricultural
activity & not classified as mineral, forest, residential,
commercial or industrial land.
2 elements:
- Devoted to agricultural activity
- Not classified as mineral, forest, residential, commercial or
industrial

Who classifies the land as mineral forest? DENR
The other one, residential, commercial, industrial? Local government
units to be approved by HLURB. So in our context we have a zoning
ordinance, the zoning ordinance is a classification.

The zoning ordinance delineates which part of the city is under
residential classification, which part is under commercial, which part is
industrial. And the LGU will submit the zoning ordinance to HLURB for
approval.

Take note: there is a cut-off date (June 15, 1988) in passing a zoning
ordinance (changing the classification from agricultural). Sec 4 of CARP
covers all private and public lands so you need to present proof that
there was classification

Natalia Realty v. DAR 1979 (Leading case)

Presidential Proclamation No. 1637 set aside 20,312 hectares of land
located in the Municipalities of Antipolo, San Mateo and Montalban as
townsite areas to absorb the population overspill in the metropolis which
were designated as the Lungsod Silangan Townsite. The NATALIA
properties are situated within the areas proclaimed as townsite
reservation. NATALIA properties later became the Antipolo Hills
Subdivision. Notice of Coverage on the undeveloped portions of the
Antipolo Hills Subdivision which consisted of roughly 90.3307 hectares.
NATALIA immediately registered its objection to the Notice of Coverage

SC:
They ceased to be agricultural lands upon approval of the reservation.
Lands previously converted by government agencies, other than DAR, to
non-agricultural uses prior to the effectivity of the CARL were outside the
coverage of that law. Ruling not confined solely to agricultural lands
located within townsite reservations, but applied also to real estate
converted to non-agricultural uses prior to the effectivity of the CARL.

NOTE:
DOJ Opinion No. 44, Series of 1990 and the case of Natalia
Realty, Inc opine that with respect to the conversion of agricultural land
covered by R.A. No. 6657 to non-agricultural uses, the authority of the
DAR to approve such conversion may be exercised from the date of its
effectivity, on June 15, 1988. Thus, all lands that are already classified as
commercial, industrial or residential before June 15, 1988 no longer need
any conversion clearance.
However, the reclassification of lands to non-agricultural uses
shall not operate to divest tenant-farmers of their rights over lands
covered by PD 27, which have been vested prior to June 15, 1988.
In order to implement the intent and purpose of the
provisions of the aforecited laws, the DAR has issued guidelines through
AO No. 4, Series of 2003.
(Please refer to the attached files together with this reviewer The
important provisions there are only the DISTURBANCE COMPENSATION,
APPROVING AUTHORITIES, EFFECT ON PRE-EXISTING CARP COVERAGE
and PROTESTS).

16

There was already a presidential proclamation reserving lands (for
squatters) in antipolo, san mateo and montalban as townsite areas, the
areas proclaimed as townsite reservation. (Relate this case with
Alangilan case below)

DAR AO No. 4 (Rules on exemption) - all lands already classified as
commercial, industrial or residential before June 15,1988 no longer need
conversion clearance
Requirements: Sworn application, copy of title, certification
from HLURB (zoning or classification, citing zoning ordinance),
among others. Public notice. Disturbance compensation.

Conversion clearance is a requirement before you can change the
classification of your land from agricultural to residential, commercial, or
industrial. (And probably this is also where corruption).
Public notice, sa land mismo mag notify ka na there is an application
for exemption and disturbance compensation.
Disturbance compensation is money to be paid to occupants of the
property, normally, Tenants of the property.
Roxas & Co., Inc. vs. CA, G.R. No. 127876, December 17, 1999
Facts:
This case involves three (3) haciendas in Nasugbu, Batangas owned by
petitioner Roxas & Co., Inc and the validity of the acquisition of these
haciendas by the government under RA No. 6657.
Petitioner is a domestic corporation and is the registered owner with
TCTs and Tax Declarations of three haciendas, namely, Haciendas Palico,
Banilad and Caylaway, all located in Nasugbu, Batangas.
Issue:
Whether or not the petitioners landholdings are subject to coverage
under the CARL, in view of the undisputed fact that petitioners
landholdings have been converted to non-agricultural uses by
Presidential Proclamation No. 1520 which declared the Municipality of
Nasugbu as a tourist zone, and the zoning ordinance of the said
Municipality re-classifying certain portions of the petitioners landholdings
as non-agricultural or at the very least entitle the petitioner to apply for
conversion as conceded by respondent DAR.

Held:
Respondent DARs failure to observe due process in the acquisition of
petitioners landholdings does not ipso facto give this Court the power to
adjudicate over petitioners application for conversion of its haciendas
from agricultural to non-agricultural. The agency charged for conversion
is the DAR.
The petition is granted in part and the acquisition proceedings over the
three haciendas are nullified for respondent DARs failure to observe due
process therein. In and the applicable administrative procedure, the case
is hereby remanded to the respondent DAR for proper acquisition
proceedings and determination of petitioners application for conversion.

Notice of coverage was wrongfully sent
SC: . DAR's failure to observe due process in the acquisition of
petitioners' landholdings does not ipso facto give the Supreme
Court the power to adjudicate over petitioner's application for
conversion of its haciendas from agricultural to non-
agricultural. The power to determine whether Hacienda Palico,
Banilad and Caylaway are non-agricultural which exempts from
the coverage of the CARL lies with the DAR, not with the
Supreme Court. Case was remanded to DAR for proper
acquisition proceedings and determination of petitioner's
application for conversion

Roxas and Company: sir is disappointed in this case why?
- in Natalia diba the SC decided whether Natalia Landholdings is
excluded or included. Alangilan the SC decided. Alarde the SC
decided. But in this case the SC did not. According to the SC
that power belongs to DAR not with the SC. So iyang gi uli to
DAR to determine whether the application for conversion
should be granted.
- Dissenting opinion by Ynares Santiago: there are already
pieces of evidence submitted in this case. (1) certification from
DENR. Na ang yuta dili na feasible, economically sound for
farm and agricultural development (2) you have a resolution of
the sangguniang bayan panlalawigan letter of MPDC man
ciguro ni siya, advising that the municipality had no objection
to the conversion of the lands to non agricultural purposes. So
it was raised by Justice Santiago, why refer it back when it can
be decided on the basis of these pieces of evidence.

One of the issues here is about notice of coverage. It was wrongfully
sent. Roxas and Company is a corporation and just like remedial law,
civil procedure, a corporation may authorize persons to receive notices
i.e. President, general manager, corporate secretary, in-house counsel.
In this case ang gi tagaan administrator of the land, so it was wrongfully
sent. SC also remanded it to DAR for proper acquisition proceedings.

NHA vs. Allarde, G.R. No. 106593, November 16, 1999
Facts:
Lots 836 and 839, registered in the of the Republic of the Philippines,
and covered by the TCT No. 34624 and No. 34627, respectively, were
acquired by the Republic on April 2, 1938 from Philippine Trust
Company. They 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 six-hectare portion of said lots, after the death of his father
who had cultivated a 13 hectare portion of the same lots.
In 1989, Mateo filed with the DAR the petition for the award to them of
subject disputed lots under CARP.
On March 18, 1992, the respondent spouses Mateo, relying on their
claim that the subject lots are agricultural land within the coverage of
the CARP, brought before the respondent RTC a complaint for damages
with a prayer for a writ of preliminary injunction, to enjoin the NHA from
bulldozing further and making constructions on the lots under
controversy.
RTC Judge Allarde issued the injunction against NHA.
Held:
As early as April 26, 1971, the Tala Estate (included the disputed lots)
was resrved, inter alia, under Presidential Proclamation No. 843, for the
housing program of the NHA, the same has been categorized as not
being devoted to the agricultural activity

SC: As early as April 26, 1971, the Tala Estate (including the
disputed lots) was reserved under Presidential Proclamation
No. 843, for the housing program of the National Housing
Authority, the same has been categorized as not being
devoted to the agricultural activity contemplated by Section 3
(c) of R.A. No. 6657, and is, therefore, outside the coverage of
the CARL. Verily, the assailed Orders of the respondent Court
declaring the lots under controversy as "agricultural land" and
restraining the petitioner from involving the same in its
housing project thereon, are evidently bereft of any
sustainable basis

Presidential proclamation reserving the disputed lands for housing
programs by the state. Although nakalahi lang puro presidential
proclamation. Ang usa, local government unit.

Advincula-Velasquez vs. CA,et al., G.R. No. 111387, June
8,2004
The petitioners were the agricultural lessees of a Riceland located in
Paraaque Metro Manila.
17

In 1978, Sps. Nery and the Lorenzo sold the property to the Delta
Motors Corporation (DMC). Petitioner Velasquez, in his capacity as
leaseholder agricultural tenant, filed an action for the redemption of the
said property before the Court of Agrarian Relation. The CAR dismiss
the petition for lack on the part of the petitioner to redeem the property
in its acquisition price in the amount of 2,319,210 pesos but directing the
defendant to maintain the petitioner as agricultural lessee to the land in
question.
Petitioner Velasquez and the defendants appealed the decision of the
CAR to the Intermediate Appellate Court who affirmed the decision of
the CAR. Petitioner Velasquez filed a petition for review to the Supreme
Court who issued a temporary restraining order enjoining the CARs
decision pending the out come of the petition.
In 1981, the land in question was reclassified as residential zone under
the ordinance issued by the city of Manila. Later, the land in question
was mortgage by the DMC to the PNB as a security for its obligation who
later foreclose it because of the failure of the DMC to pay its account.
The PNB in 1986 executed a deed of sale of the said land in favor of the
Remman Enterprise Inc. who decided to develop it in to a residential
subdivision.
Meanwhile, the Supreme Court issue a decision on the petition for review
filed by the petitioner Velasquez affirming the decision of the IAC stating
that the case had become moot and academic with regards the claim of
the petitioner against the DMC considering that the property had been
foreclose by the PNB declaring however that the petitioner may redeem
the property from the PNB and its transferee. The record was
remanded to the PARAD or the Provincial Agrarian Adjudication for the
petitioner to exercise there right of redemption but since the case had
become moot and academic, the PARAD denied the action of the
petitioner to recover the property against the DMC since the land in
question is now a residential land. The right of the petitioner as an
agricultural lessee was terminated and the property was now in the
possession of the Remman Enterprise, Inc. The petitioner filed a
motion before the DARAB or the Department of Agrarian Adjudication
Board who reverses the decision of the PARAD stating that the land in
question is an agricultural land and uphold the right of the petitioner as
an agricultural lessee to recover the said land .The Remman Enterprise
filed an appeal before the CA who reverses the decision of the DARAB
because the land in question was already reclassified as residential land
as early as 1981 converting it from agricultural land in to non-agricultural
land. The petitioner filed a motion to the Supreme Court.
Issue:
Whether or not the land was an agricultural land or a
residential land.
Held:
According to the Supreme Court, agricultural land was defined under RA.
6657 as those land devoted to agricultural activities and not classified as
forest, minerals, residential and industrial land.
The records show that as early as 1981, the landholding was reclassified
as a low density zone under Metro Manila Zoning Ordinance No. 81-01,
Series of 1981 before Rep. Act No. 6657 took effect on June 15, 1998. It
has been considered as early as that time for residential purposes thus
not within the ambit of CAR.

SC: Since the property was already reclassified as residential
by the Metro Manila Commission and the HSRC before the
effectivity of Rep. Act No. 6657, there was no need for the
private respondent to secure any post facto approval thereof
from the DAR

Jose Junio, et., al vs Garilao
Facts:
"In a Complaint dated February 12, 1994, filed with the [Department of
Agrarian Reform Adjudication Board (DARAB)] by complainants (some of
whom are herein petitioners), identified as 'Potential CARP Beneficiaries'
per Certification of OIC [Municipal Agrarian Reform Officer (MARO)]
dated November 21, 1991 . . ., it is prayed that a writ of preliminary
injunction be issued against the registered owners of a certain parcel of
agricultural land consisting of 71 hectares, more or less, known as Lot
No. 835-B of Bacolod Cadastre, Brgy. Pahanocoy, Bacolod City, covered
by Transfer Certificate of Title No. T-79622. Petitioners claim that . . .
Sta. Lucia Realty Corporation and the Estate of Guillermo Villasor,
represented by Irving Villasor, are bulldozing and leveling the subject
property for the purpose of converting it into a residential subdivision;
that as prospective CARP beneficiaries of the land in question, 'being
former laborers, actual occupants and permanent residents of Barangay
Pahanocoy,' their rights will be prejudiced by the illegal conversion of the
land into a residential subdivision . . . .

"On April 13, 1994, the DARAB OIC Executive Director forwarded the
complaint to [Provincial Agrarian Reform Adjudicator (PARAD)], DAR,
Region VI, Bacolod City for appropriate action . . . . Before any hearing
could be conducted thereon, the Secretary of the Department of
Agrarian Reform issued an Order dated September 13, 1994 in 'RE:
PETITION FOR EXEMPTION FROM CARP COVERAGE PURSUANT TO DOJ
OPINION NO. 44, SERIES OF 1990, IRVING P. VILLASOR, et al., Rep. by
Atty. Angel Lobaton, Jr., Petitioners,' portions of which read as follows:

'After a careful study of the facts of the case and the evidences
presented by the parties, this Office finds the petition for exemption to
be well founded. Under DOJ Opinion No. 44, Series of 1990, it provides
that lands which has already been classified as mineral, forest,
residential, commercial and industrial areas, prior to June 15, 1988 shall
be excluded from CARP coverage. To this, it is an [i]nescapable
conclusion that the subject property is exempted from CARP coverage
considering the fact that the same was classified as residential as
evidenced by the Resolution No. 5153-A, Series of 1976 of the City
Council of Bacolod and as approved by the Human Settlements
Regulatory Commission (now HLURB) in its Resolution dated September
24, 1980 as per Certification dated June 22, 1994 issued by the said
Commission. The Certification of the National Irrigation Administration
(NIA) dated June 9, 1994 stated that the subject land is not irrigable or
is outside the service area of the irrigation system in the locality. In
effect the said application had conformed to the requirements of the law
on exemption. In accord thereto, the stand of Mr. Espanola that the
portion, which he planted to trees and developed into mini-forest should
be covered by CARP[,] is beyond recognition as the program does not
apply to those which are already classified as residential lands prior to
the effectivity of CARL on June 15, 1988. Instead, it is confined only to
agricultural lands, which under R.A. 6657, Sec. 3(c), it defines
agricultural lands as lands devoted to agricultural activity as defined in
this Act and not classified as mineral, forest, residential or industrial land.
With the above stated definition, it is beyond reason that the placing of
the said portion under CARP coverage (1.5 hectare) is devoid of legal
and factual basis.'"

Issue:
Whether the respondent DAR secretary had the inherent authority or
power to exclude or exempt at will from the coverage of the
Comprehensive Agrarian Reform Program (CARP) the subject agricultural
land which was already automatically covered by the CARL (RA 6657)
upon its effectivity on June 15, 1988 without affording due process to
herein petitioners and without the necessity of Congress having first to
amend Section 4 of the said law authorizing such exemption or exclusion
from CARP coverage.

Held:
Section 3(c) of the CARL defines agricultural land as that which is
"devoted to agricultural activity . . . and not classified as mineral, forest,
residential, commercial or industrial land."

The meaning of agricultural lands covered by the CARL was explained
further by the DAR in its Administrative Order No. 1, Series of 1990, 12
entitled "Revised Rules and Regulations Governing Conversion of Private
Agricultural Land to Non-Agricultural Uses," issued pursuant to Section
49 of CARL, which we quote:

". . . . Agricultural land refers to those devoted to agricultural activity as
defined in R.A. 6657 and not classified as mineral or forest by the
Department of Environment and Natural Resources (DENR) and its
predecessor agencies, and not classified in town plans and zoning
18

ordinances as approved by the Housing and Land Use Regulatory Board
(HLURB) and its preceding competent authorities prior to 15 June 1988
for residential, commercial or industrial use."

Prior to this Order, Department of Justice Opinion No. 44 dated March
16, 1990, which was addressed to then DAR Secretary Florencio Abad,
recognized the fact that before the date of the law's effectivity on June
15, 1988, the reclassification or conversion of lands was not exclusively
done by the DAR. 13 Rather, it was a "coordinated effort" of all
concerned agencies; namely, the Department of Local Governments and
Community Development, the Human Settlements Commission and the
DAR.

It is thus settled that with respect to areas classified and identified as
zonal areas not for agricultural uses, like those approved by the HSRC
before the effectivity of RA 6657 on June 15, 1988, the DAR's clearance
is no longer necessary for conversion.

DAR vs. Berenguer
Facts:
The respondents were the registered owners of several residential and
industrial lands with a total area of 58.0649 hectares located in Barangay
Bibincahan, Sorsogon.

In April 1998, the respondents received from the DAR notices of
coverage of their said landholdings by the Government's Comprehensive
Agrarian Reform Program (CARP) pursuant to Republic Act No. 6657
(Comprehensive Agrarian Reform Law, or CARL). They protested the
notices of coverage, filing on October 5, 1998, in the office of DAR
Regional Director Percival Dalugdug (Regional Director Dalugdug) in
Legaspi City, their application for exclusion of their landholdings from
CARP coverage, and praying for the lifting of the notices of coverage.
In October and November 1998, the DAR Secretary, without acting on
the respondents' application for exclusion, cancelled their titles and
issued certificates of land ownership awards (CLOAs), covering their
landholdings, to the members of the Baribag Agrarian Reform
Beneficiaries Development Cooperative (Baribag), not to the
respondents' workers on the landholdings, although Baribag was not
impleaded in the respondents' application for exclusion.

In support of their claim that their landholdings were already classified
as residential and industrial, the respondents submitted the following
documents, namely: 8

a.The certification dated May 18, 1999 issued by HLURB, stating, among
others, that the Town Plan/Zoning Ordinance of Sorsogon, Sorsogon
(classifying Barangay Bibincalan, * where the respondents' properties
were located, as a residential and commercial area), was approved by
HLURB (then Human Settlements Commission/Human Settlements
Regulatory Commission);

b.An excerpt from the Comprehensive Development Plan of the
Municipality of Sorsogon, Sorsogon, showing that Barangay Bibincalan *
was part of the Central Business District; hence, the respondents'
landholdings in Bibincalan * were classified as residential and industrial;

c.Resolution No. 5 of the Sangguniang Bayan of Sorsogon, series of
1981, expanding the area of the poblacion to include Barangay
Bibincalan, * among others;

d.The certification dated August 27, 1997 issued by the Office of the
Zoning Administrator, Office of the Mayor, Sorsogon, Sorsogon, signed
by Deputized Zoning Administrator Raul Jalmanzar, declaring that the
respondents' landholdings were situated in Barangay Bibincalan * within
the Poblacion area of the Municipality of Sorsogon; and

e.Department of Justice Opinion No. 44, series of 1990, stating that a
parcel of land was considered non-agricultural, and, therefore, beyond
the coverage of the CARP, if it had been classified as residential,
commercial, or industrial in the City or Municipality Land Use Plan or
Zoning Ordinance approved by HLURB before the effectivity of R.A. No.
6657 on June 15, 1988.

Issue:
Whether or not the land is covered under RA 6657

Held:

In ruling that the respondents' landholdings were not devoted to cattle
raising, the DAR relied on DAR Administrative Order (DAO) No. 9, series
of 1993, which required that properties should be considered excluded
from the coverage of the CARL only if it was established that as of June
15, 1988, the date of effectivity of the law, there existed the minimum
ratio of one head of cattle to one hectare of land, and one head of cattle
to 1.7815 hectares of infrastructure.

According to the DAR, only 15 heads of cattle were found within the 58
hectares sought to be excluded based on the semestral survey
conducted in Sorsogon by the Bureau of Agricultural Statistics in the
period from 1988 to 1992, which was in contravention of DAO No. 9,
series of 1993.

The CA found, however, that heads of cattle were really being raised in
the landholdings of the respondents. This finding was not disputed by
the DAR. In view of the finding of the CA, we cannot now hold
differently, for we are bound by the finding of fact of the CA. Verily, the
insufficiency of the number of heads of cattle found during the semestral
survey did not automatically mean that the landholdings were not
devoted to the raising of livestock. We concur with the CA that there
could be several reasons to explain why the number of cattle was below
the ratio prescribed under DAO No. 9 at the time of the survey, including
pestilence, cattle rustling, or sale of the cattle.

Resolution No. 5, passed on March 12, 1981 by the Sangguniang Bayan
of Sorsogon, Sorsogon, showed that the limits of the poblacion area of
the municipality included Barangay Bibincahan, where the respondents'
landholdings were situated.

There is no dispute that as early as 1981, the respondents' landholdings
have been part of the poblacion of Sorsogon, Sorsogon. Consistent with
Hilario and Natalia, holding that the respondents' landholdings were non-
agricultural, and, consequently, outside the coverage of the CARL, was
fully warranted. In fact, the excerpt from the Comprehensive
Development Plan of Sorsogon, Sorsogon showed that Barangay
Bibincahan was within the Central Business District of the municipality.

Actually involving same fact and ruling in so far as classification is
concerned but this one gives us a principle that DAR has to establish that
the land holdings were agricultural. It is incumbent upon DAR to
establish.
Alangilan v. Office of President
SC: 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. 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.

19

Petitioner Alangilan filed an application for exclusion from CARP. DAR
denied it saying the term reserved denotes it is not yet classified. So
what is the proof of petitioner for asking exclusion and exemption?
- 1982: you have an ordinance from the sangguniang bayan of
batangas that the subject landholding is reserved for
residential under zoning which was approved by HSRC, the
predecessor of HLURB.
- 1994: provincial ordinance of the city zoning map and
comprehensive zoning reclassifying the landholding as
residential land.

Remember even prior to 1988, in this case, 1982 pa, naanay zoning
approved by HLURB. But what is contested by DAR is the use of the
word reserved.

SC said the Alangilan landholding was classified as agricultural reserved
by DAR contrary to petitioners assertion that the term reserved for
residential does not change the nature of the land from agri to non agri.
The term reserve simply reflects the intended the land used. It does not
denote the property has already been reclassified.

SIR: I dont agree with the court.
1. The reasoning there that the term reserve does not change
the nature of the land from agri to none agri, SC was talking
about nature of the land, agricultural to non agricultural. But
the question is: isnt it a fact that there are (2) elements for
agri land: devoted to agri activity and not classified as mineral,
forest, etc. This issue answers the first element not the second
element.
2. Second the law uses the word classified. If we are to abide
by the ruling of the court, is the court saying that before a
zoning ordinance is passed there is already actual use of the
land by the people residing in the city or conducting business?
Not necessarily, because a city or an LGU can have a
projection. It can project. (It can say na oi kini na yuta bare
pa. wala pa gigamit we want to use this land as industrial para
mo daghan ang mga factory we will project.) So we will pass
an ordinance classifying this as industrial even in the absence
of actual use. It can be classified already. But the SC was
referring to the nature of the land from agri to non agri. For
me you can still make a classification even if the intended land
used is not yet to be.
Did that case (Alangilan) overturn the other (Natalia)? No. There was no
issue. What Alangilan should have done is to raise that issue in Natalia
and other cases (because it is not only in Natalia) that the word reserved
was used.
Heirs of Deleste vs Leviste
Facts:
The spouses Gregorio Nanaman (Gregorio) and Hilaria Tabuclin (Hilaria)
were the owners of a parcel of agricultural land located in Tambo, Iligan
City, consisting of 34.7 hectares (subject property). Said spouses were
childless, but Gregorio had a son named Virgilio Nanaman (Virgilio) by
another woman. Virgilio had been raised by the couple since he was two
years old. Gregorio also had two daughters, Esperanza and Caridad, by
still another woman. 3
When Gregorio died in 1945, Hilaria and Virgilio administered the subject
property. 4 On February 16, 1954, Hilaria and Virgilio sold the subject
property to Dr. Jose Deleste (Deleste) for PhP16,000. 5 The deed of sale
was notarized on February 17, 1954 and registered on March 2, 1954.
Also, the tax declaration in the name of Virgilio was canceled and a new
tax declaration was issued in the name of Deleste. The arrears in the
payment of taxes from 1952 had been updated by Deleste and from then
on, he paid the taxes on the property. 6
On May 15, 1954, Hilaria died. 7 Gregorio's brother, Juan Nanaman, was
appointed as special administrator of the estate of the deceased
spouses. Subsequently, Edilberto Noel (Noel) was appointed as the
regular administrator of the joint estate.
On April 30, 1963, Noel, as the administrator of the intestate estate of
the deceased spouses, filed before the Court of First Instance, Branch II,
Lanao del Norte an action against Deleste for the reversion of title over
the subject property, docketed as Civil Case No. 698. 9 Said case went
up to this Court in Noel v. CA, where We rendered a Decision 10 on
January 11, 1995, affirming the ruling of the CA that the subject
property was the conjugal property of the late spouses Gregorio and
Hilaria and that the latter could only sell her one-half (1/2) share of the
subject property to Deleste. As a result, Deleste, who died in 1992, and
the intestate estate of Gregorio were held to be the co-owners of the
subject property, each with a one-half (1/2) interest in it. 11
Notably, while Civil Case No. 698 was still pending before the CFI,
particularly on October 21, 1972, Presidential Decree No. (PD) 27 was
issued. This law mandates that tenanted rice and corn lands be brought
under the Operation Land Transfer (OLT) Program and awarded to
farmer-beneficiaries. Thus, the subject property was placed under the
said program. 12 However, only the heirs of Gregorio were identified by
the Department of Agrarian Reform (DAR) as the landowners.
Concomitantly, the notices and processes relative to the coverage were
sent to these heirs. 13
In 1975, the City of Iligan passed City Ordinance No. 1313, known as the
"Zoning Regulation of Iligan City," reclassifying the subject property as
commercial/residential. 14
Eventually, on February 12, 1984, DAR issued Certificates of Land
Transfer (CLTs) in favor of private respondents who were tenants and
actual cultivators of the subject property. 15 The CLTs were registered
on July 15, 1986.
In 1991, the subject property was surveyed. 17 The survey of a portion
of the land consisting of 20.2611 hectares, designated as Lot No. 1407,
was approved on January 8, 1999. 18 The claim folder for Lot No. 1407
was submitted to the LBP which issued a Memorandum of Valuation and
a Certificate of Cash Deposit on May 21, 2001 and September 12, 2001,
respectively. Thereafter, Emancipation Patents (EPs) and Original
Certificates of Title (OCTs) were issued on August 1, 2001 and October
1, 2001, respectively, in favor of private respondents over their
respective portions of Lot No. 1407.
On February 28, 2002, the heirs of Deleste, petitioners herein, filed with
the Department of Agrarian Reform Adjudication Board (DARAB) a
petition seeking to nullify private respondents' EPs. 21 This was docketed
as Reg. Case No. X-471-LN-2002.
On July 21, 2003, the Provincial Agrarian Reform Adjudicator (PARAD)
rendered a Decision 22 declaring that the EPs were null and void in view
of the pending issues of ownership, the subsequent reclassification of
the subject property into a residential/commercial land, and the violation
of petitioners' constitutional right to due process of law.
20

Subsequently, the DARAB, in DARAB Case No. 12486, reversed the ruling
of the PARAD in its Decision 25 dated March 15, 2004. It held, among
others, that the EPs were valid as it was the heirs of Deleste who should
have informed the DAR of the pendency of Civil Case No. 698 at the time
the subject property was placed under the coverage of the OLT Program
considering that DAR was not a party to the said case. Further, it stated
that the record is bereft of any evidence that the city ordinance has been
approved by the Housing and Land Use Regulatory Board (HLURB), as
mandated by DAR Administrative Order No. 01, Series of 1990, and held
that whether the subject property is indeed exempt from the OLT
Program is an administrative determination, the jurisdiction of which lies
exclusively with the DAR Secretary or the latter's authorized
representative. Petitioners' motion for reconsideration was likewise
denied by the DARAB in its Resolution 26 dated July 8, 2004.
Issue:
Whether the land is covered under agrarian reform
Held:
We agree with petitioners that the subject property, particularly Lot No.
1407, is outside the coverage of the agrarian reform program in view of
the enactment by the City of Iligan of its local zoning ordinance, City
Ordinance No. 1313.
It is undeniable that the local government has the power to reclassify
agricultural into non-agricultural lands. In Pasong Bayabas Farmers
Association, Inc. v. CA, 45 this Court held that pursuant to Sec. 3 of
Republic Act No. (RA) 2264, amending the Local Government Code,
municipal and/or city councils are empowered to "adopt zoning and
subdivision ordinances or regulations in consultation with the National
Planning Commission." It was also emphasized therein that "[t]he power
of the local government to convert or reclassify lands [from agricultural
to non-agricultural lands prior to the passage of RA 6657] is not subject
to the approval of the [DAR]."
Likewise, it is not controverted that City Ordinance No. 1313, which was
enacted by the City of Iligan in 1975, reclassified the subject property
into a commercial/residential area.
However, the reclassification of lands to non-agricultural uses shall not
operate to divest tenant[-]farmers of their rights over lands covered by
Presidential Decree (PD) No. 27, which have been vested prior to 15
June 1988.
1975: You have a zoning ordinance approved by the HLURB so the land
is outside of CARP.
Rom vs Roxas & co.
Facts:
On September 30, 1997, respondent sought the exemption of 27 parcels
of land located in Barangay Aga, Nasugbu, Batangas, having an
aggregate area of 21.1236 hectares and constituting portions of the land
covered by Transfer Certificate of Title .
Respondent asserted that Comprehensive Agrarian Reform Law (CARL)
covers only agricultural land 5 which is defined under Section 3 (c)
thereof as "land devoted to agricultural activity . . . and not classified as
mineral, forest, residential, commercial or industrial land." Respondent
claimed that prior to the effectivity of the CARL on June 15, 1988, the
lands subject of its application were already re-classified as part of the
Residential Cluster Area specified in Zone A VII of the Nasugbu Municipal
Zoning Ordinance No. 4, Series of 1982, which zoning ordinance was
approved by the Human Settlement Regulatory Commission (HSRC [now
the Housing and Land Use Regulatory Board (HLURB)]) under HSRC
Resolution No. 123, Series of 1983. Respondent cited DOJ Opinion No.
44 (1990) which provides that lands already classified by a valid zoning
ordinance for commercial, industrial or residential use, which ordinance
was approved prior to the effectivity of the CARL, no longer need
conversion clearance from the DAR.
In its Order 11 of November 6, 2002, the DAR granted the application in
this wise:
WHEREFORE, premises considered, the Application for Exemption
Clearance from CARP coverage filed by Roxas & Company, Inc., involving
twenty-seven (27) parcels of land, specifically described in pages 1 and 2
of this Order,[12] being portions of TCT No. T-44664, with an aggregate
area of 21.1236 hectares located [in] Barangay Aga, Nasugbu, Batangas
is hereby GRANTED, subject to the following conditions:
1.The farmer-occupants within subject parcels of land shall be
maintained in their peaceful possession and cultivation of their respective
areas of tillage until a final determination has been made on the amount
of disturbance compensation due and entitlement of such farmer-
occupants thereto by the PARAD of Batangas.
2.No development shall be undertaken within the subject parcels of land
until the appropriate disturbance compensation has been paid to the
farmer-occupants who are determined by the PARAD to be entitled
thereto. Proof of payment of disturbance compensation shall be
submitted to this Office within ten (10) days from such payment; and
3.The cancellation of the CLOA issued to the farmer beneficiaries shall be
subject of a separate proceeding before the PARAD of Batangas.
ISSUE:
Whether the land is covered under CARL.
Held:
Having established through said documents that the 27 parcels of land
are within the coverage of the said (Nasugbu) Municipal Zoning
Ordinance No. 4, the DAR declared as well that respondent substantially
complied with the requirements of DAR AO No. 6, series of 1994 in DAR
ADM Case No. A-9999-014-98. The DAR thus granted the application in
an Order of the same date and of exactly the same tenor.
The Court recognized the power of a local government unit to classify
and convert land from agricultural to non-agricultural prior to the
effectivity of the CARL and thus upheld the validity of said zoning
ordinance.
You have the zoning ordinance (1982) and you have an approval HLURB
on 1983.
LBP vs Estate of Araneta
Facts:
On June 21, 1974, then President Marcos issued Proclamation 1283,
carving out a wide expanse from the Watershed Reservation in Antipolo,
21

Rizal and reserving the segregated area for townsite purposes, "subject
to private rights, if any there be."
Then came the amendatory issuance, Proclamation 1637 dated April 18,
1977, thereby increasing the size of the reservation, designated as
"Lungsod Silangan Townsite" (LS Townsite), by 20.312 hectares and
revising its technical description so as to include, within its coverage,
other lands in the municipalities of San Mateo and Montalban, Rizal to
absorb "the population overspill in Greater Manila Area," but again
"subject to private rights, if any there be,"
Earlier, or on March 15, 1983, J. Amado Araneta, now deceased,
acquired ownership of the subject Doronilla property by virtue of court
litigation. A little over a week later, he had OCT No. 7924 canceled and
secured the issuance of Transfer Certificate of Title (TCT) No. N-70860 in
his name.
On July 22, 1987, then President Corazon C. Aquino issued Proclamation
No. 131 instituting the Comprehensive Agrarian Reform Program (CARP).
Thereafter, then DAR Undersecretary Jose C. Medina, in a memorandum
of March 10, 1988, ordered the Regional Director of DAR Region IV to
proceed with the OLT coverage and final survey of the Doronilla
property. 12 Republic Act No. (RA) 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL) 13 of 1988, was then
enacted, and took effect on June 15, 1988
On December 12, 1989, DAR issued a "Notice of Acquisition" addressed
to Doronilla, covering 7.53 hectares of the land now covered by TCT No.
216746 and offering compensation at a valuation stated in the notice. 15
Alarmed by the turn of events whereby DAR was having its property, or
a portion of it, surveyed, incidental to effecting compulsory land
acquisition, the Araneta Estate addressed a letter 16 to DAR dated June
27, 1990, formally protesting the series of land surveys being conducted
by the Bureau of Lands on what is now its property. It claimed that the
CARL does not cover the said property, being part of the LS Townsite
reservation, apart from being mountainous, with a slope of more than 70
degrees and containing commercial quantities of marble deposit. The
Araneta Estate followed its protest letter with two (2) more letters dated
June 20, 1990 and May 28, 1991, in which it reiterated its request for
conversion, citing, for the purpose, Department of Justice (DOJ) Opinion
No. 181, Series of 1990.
Issue:
Whether or not CA erred in gave retroactive effect or application to
Proclamation Nos. 1283 & 1637 resulting in the negation of "full land
ownership to qualified farmer-beneficiaries covered by P.D. No. 27
Held:
Several basic premises should be made clear at the outset. Immediately
prior to the promulgation of PD 27 in October 1972, the 1,645-hectare
Doronilla property, or a large portion of it, was indisputably agricultural,
some parts devoted to rice and/or corn production tilled by Doronilla's
tenants. Doronilla, in fact, provided concerned government agencies with
a list of seventy-nine (79) 30 names he considered bona fide "planters"
of his land. These planters, who may reasonably be considered tenant-
farmers, had purposely, so it seems, organized themselves into
Samahang Nayon(s) so that the DAR could start processing their
applications under the PD 27 OLT program. CLTs were eventually
generated covering 73 hectares, with about 75 CLTs actually distributed
to the tenant-beneficiaries. However, upon the issuance of Proclamation
1637, "all activities related to the OLT were stopped."
To restate a basic postulate, the provisions of RA 6657 apply only to
agricultural lands under which category the Doronilla property, during
the period material, no longer falls, having been effectively classified as
residential by force of Proclamation 1637. It ceased, following Natalia
Realty, Inc., to be agricultural land upon approval of its inclusion in the
LS Townsite Reservation pursuant to the said reclassifying presidential
issuance. In this regard, the Court cites with approval the following
excerpts from the appealed CA decision:
The above [Natalia Realty, Inc.] ruling was reiterated in National Housing
Authority vs. Allarde where the Supreme Court held that lands reserved
for, converted to, non-agricultural uses by government agencies other
than the [DAR], prior to the effectivity of [RA] 6657 . . . are not
considered and treated as agricultural lands and therefore, outside the
ambit of said law. The High Court declared that since the Tala Estate as
early as April 26, 1971 was reserved, inter alia, under Presidential
Proclamation No. 843, for the housing program of the [NHA], the same
has been categorized as not being devoted to agricultural activity
contemplated by Section 3(c) of R.A. No. 6657, and therefore outside
the coverage of CARL.
GONZALO PUYAT & SONS, INC.vs RUBEN ALCAIDE
Facts:
Petitioner Gonzalo Puyat and Sons, Inc. is the registered owner of 14
parcels of land.
n April 14, 1998, the Municipal Agrarian Reform Officer (MARO) issued a
Notice of Coverage over the subject landholding informing petitioner that
the subject properties were being considered for distribution under the
government's agrarian reform program. 4 Thereafter, on November 15,
1998, the corresponding Notice of Valuation and Acquisition 5 was issued
informing petitioner that a 37.7353-hectare portion of its property is
subject to immediate acquisition and distribution to qualified agrarian
reform beneficiaries and that the government is offering P7,071,988.80
as compensation for the said property.
Petitioner then filed a Petition 6 before the Department of Agrarian
Reform (DAR), wherein it argued that the properties were bought from
their previous owners in good faith; that the same remains uncultivated,
unoccupied, and untenanted up to the present; and, that the subject
landholdings were classified as industrial, thus, exempt from the
coverage of the Comprehensive Agrarian Reform Program (CARP).
Petitioner prayed, among other things, that the Notice of Coverage and
Notice of Acquisition be lifted and that the properties be declared exempt
from the coverage of CARP.
Respondents 8 on their part countered, among other things, that the
classification of the land as industrial did not exempt it from the
coverage of the CARP considering that it was made only in 1997; the
HLURB 9 certification that the Municipality of Bian, Laguna does not
have any approved plan/zoning ordinance to date; that they are not
among those farmer-beneficiaries who executed the waivers or voluntary
surrender; and, that the subject landholdings were planted with palay.
On June 8, 2001, then DAR Secretary Hernani A. Braganza, issued an
Order 11 in favor of the respondent declaring that the subject properties
are agricultural land.
Issue:
Whether or not the land is exempted.
22

Held:
As aptly found by the Office of the President, the importance of
conducting an ocular inspection cannot be understated, since it is one of
the steps designed to comply with the requirements of administrative
due process. The Office of the President stressed this in its Decision, to
wit:
In other words, before the MARO sends a Notice of Coverage to the
landowner concerned, he must first conduct a preliminary ocular
inspection to determine whether or not the property may be covered
under CARP. The foregoing undertaking is reiterated in the latest DAR
AO No. 01, s. of 2003, entitled "2003 Rules Governing Issuance of Notice
of Coverage and Acquisition of Agricultural Lands Under RA 6657."
Section 1 [1.1] thereof provides that:
"1.1Commencement by the Municipal Agrarian Reform Officer (MARO)
After determining that a landholding is coverable under the CARP, and
upon accomplishment of the Pre-Ocular Inspection Report, the MARO
shall prepare the NOC (CARP Form No. 5-1)." (NOC stands for Notice of
Coverage)
Found on the records of this case is a ready-made form Preliminary
Ocular Inspection Report (undated) signed by the concerned MARO.
Interestingly, however, the check box allotted for the all-important items
"Land Condition/Suitability to Agriculture" and "Land Use" was not filled
up. There is no separate report on the record detailing the result of the
ocular inspection conducted. These circumstances cast serious doubts on
whether the MARO actually conducted an on-site ocular inspection of the
subject land. Without an ocular inspection, there is no factual basis for
the MARO to declare that the subject land is devoted to or suitable for
agricultural purposes, more so, issue Notice of Coverage and Notice of
Acquisition.
The importance of conducting an ocular inspection cannot be
understated. In the event that a piece of land sought to be placed from
CARP coverage is later found unsuitable for agricultural purposes, the
landowner concerned is entitled to, and the DAR is duty bound to issue,
a certificate of exemption pursuant to DAR Memorandum Circular No. 34,
s. of 1997, entitled "Issuance of Certificate of Exemption for Lands
Subject of Voluntary Offer to Sell (VOS) and Compulsory Acquisition (CA)
Found Unsuitable for Agricultural Purposes."
More importantly, the need to conduct ocular inspection to determine
initially whether or not the property may be covered under the CARP is
one of the steps designed to comply with the requirements of
administrative due process. The CARP was not intended to take away
property without due process of law (Development Bank of the
Philippines vs. Court of Appeals, 262 SCRA 245. [1996]). The exercise of
the power of eminent domain requires that due process be observed in
the taking of private property. In Roxas & Co., Inc. v. Court of Appeals,
321 SCRA 106 [1999], the Supreme Court nullified the CARP acquisition
proceedings because of the DAR's failure to comply with administrative
due process of sending Notice of Coverage and Notice of Acquisition of
the landowner concerned.
Considering the claim of appellant that the subject land is not agricultural
because it is unoccupied and uncultivated, and no agricultural activity is
being undertaken thereon, there is a need for the DAR to ascertain
whether or not the same may be placed under CARP coverage. 47**
AcICHD
Thus, the question of whether or not petitioner's properties could be
covered by the CARP has not yet been resolved. Until such
determination, it follows that petitioner's landholdings cannot be the
proper subject of acquisition and eventual distribution to qualified
farmer-beneficiaries. However, these involve factual controversies, which
are clearly beyond the ambit of this Court. Verily, the review of factual
matters is not the province of this Court. The Supreme Court is not a
trier of facts, and is not the proper forum for the ventilation and
substantiation of factual issues.
Puyat and sons vs. Alcaide is about ocular inspection. Its about the first
element, whether it is devoted to agricultural purposes.
You have a preliminary ocular inspection report form signed by the
MARO but the checkbox for this one land condition suitability to
agriculture, land use was not filled. So according to the SC it is not clear
whether there was an ocular inspection, so it was remanded to DAR for
the conduct of ocular inspection. Why important? Because you cannot
find if the land is suitable or unsuitable for agricultural purposes in the
absence of an ocular inspection.
AGRARIAN DISPUTE [Section 3(d)]
O any controversy relating to tenurial arrangements (leasehold,
tenancy, stewardship) over lands devoted to agriculture
O any controversy relating to compensation of lands acquired
under CARL and other terms and conditions of transfer of
ownership.
O tenancy relationship

Different sections where the words agrarian dispute is used: Sec 47,
53, 54

BARC Barangay agrarian reform committee

If you are familiar with katarungang pambarangay, before you can file a
case generally you need to secure certificate to file action. Generally
under DAR you need to secure a certification from BARC before you can
file a case before DAR. Of course there are exceptions

ESSENTIAL REQUISITIES: PSC-PPS

1) Parties (landowner & tenants)
2) Subject matter is agricultural land
3) Consent of parties
4) Purpose is agricultural production
5) Personal cultivation by tenant
6) Sharing of harvest between parties

+ All requisites must concur, absence of one does not make one
a tenant.

SIR: When you read the cases involving agrarian dispute take note that
parties are related to consent because I think they are inseparable.
Another issue is this subject matter is agri land.

Isidro v. CA
- Private resp is owner of land. Sister of private respondent
allowed Isidro to occupy swampy portion subject to condition
to vacate upon demand. Failure to vacate, unlawful detainer
was filed against Isidro. RTC dismissed bec land is agricultural
and so agrarian.
SC:
Jurisdiction over subject matter determined from allegations of
complaint. Court does not lose jurisdiction by defense of
tenancy relationship and only after hearing that, if tenancy is
shown, the court should dismiss for lack of jurisdiction. Case
involving agri land does not automatically make such case
agrarian. Six requisites were not present. There was no
23

contract to cultivate & petitioner failed to substantiate claim
that he was paying rent for use of land.

In this case, it was an action for unlawful detainer, but the court
dismissed it because the land is agricultural and concluded that it is
agrarian. This is an error on the reasoning of the court, because the
dismissal was based only on one element and not on the 6 requisites.

So the SC mentioned that when it comes to jurisdiction over the subject
matter, it is determined from the allegations of the complaint and the
court does not lose jurisdiction by a defence of tenancy relationship.
That a case involving agri land, does not automatically make the case
agrarian reform.

In actual practice, most landowners whose agri land is occupied by
persons whom they want to be ejected from the land, the normal
remedy is to file for an action for recovery of possession, you have a
summary action normally an unlawful detainer case. Or another action
which is accion publiciana. You have this principle that jurisdiction is to
be determined from allegations of the complaint. This is a new
innovation, section 19 was introduced by RA 9700.

Taking a cue from Isidro and other cases, what will determine
jurisdiction would be the allegations of the complaint. If there is an
answer filed and there is an allegation of tenancy relationship, that
allegation will not take away the jurisdiction of the court. But read
section 50-A, which states that if there is any allegation from any of the
parties, that the case is agrarian in nature and one of the parties is a
farmer, farm worker, or tenant, the case shall automatically be referred
by the judge or the prosecutor to DAR which shall determine and certify
within 15 days from referral whether an agrarian dispute exists.

Where can you find an allegation? In an answer, not in the complaint. So
if there is an action for unlawful detainer filed by a landowner against a
tenant, the tenant will make a defense in his answer that there is a
tenancy relationship. What will the judge do? Pursuant to section 50, the
judge will automatically refer to DAR.

If DAR will certify that the action is agrarian in nature, what will the
judge do? Section 50 does not provide what the judge will do, but if you
were the judge, you would have to rely on the certification by DAR
because DAR is supposed to have exclusive jurisdiction.

But we have here a scenario that if the judge will rely on the
determination of DAR, that judge is now saying i have no jurisdiction
based on an allegation from an answer and based on the confirmation by
DAR. 1
st
issue, what happens now to the principle that jurisdiction is
determined on the allegations of a complaint. second, you have a case
where a court loses jurisdiction, based on mere allegation, there is no
hearing, because if you are the lawyer for the tenant, you allege in your
answer that as one of your defenses that there is tenancy relationship,
under rule 16 of rules of procedure you will have to ask for a hearing of
your affirmative defenses. In the hearing you present evidence about
tenancy relationship. That is the process prior to this, but under section
50, allegation and certification from DAR, the court may now lose
jurisdiction. The court will have to dismiss the case and the aggrieved
party will have to appeal. If the court will not dismiss, and the tenant is
aggrieved, the tenant will file a petition for certiorari, or grave abuse of
discretion using section 50. 2
nd
point, section 50 A, does not only apply
to court, it also applies to the prosecutors office.

SUPLICO v. CA
+ Suplico is a lessee of rice land. Private respondent was
allowed by Suplico to till the land while Suplico will provide
the farm implements and thereafter Suplico was to receive
cavans from the palay by way of rental. Years later, Suplico
threatened to eject priv. resp. from the property, so private
respondent filed an action for damages against Suplico in CAR.
Resp. Owner intervened in case and alleged the absence of
contractual relationship. Trial court declared private
respondent as agricultural lessee and confirmed by CA.
SC:
- SC found no reasons to disturb findings
1. Private respondent was in actual possession of land with
family in a farmhouse just like what a farm tenant normally
would.
2. Private resp. and wife were personally plowing, planting,
weeding and harvesting.
3. Management was left entirely to private respondent
4. Private respondent shared the harvest with Suplico.

Let me just tell you in advance that agrarian disputes are a question of
evidence. In the case of suplico, suplico is a lessee and the private
respondent was allowed by suplico to till the land; suplico receiving the
sharing. When suplico threatened the respondent to eject, the
respondent filed an action for damages. Based on the facts, there is no
consent from the owner, that is why the owner intervened in the case
and alleged absence of relationship. The trial court declared the
respondent as agri lessee confirmed by the CA. Check on the ruling of
the court. Actual possession, cultivation, harvest, but the SC did not
discuss the other requirements specially on the consent requirement.
Probably petitioner in this case did not raise as issue the other
requirements and the SC relied on the findings of the lower court.

MONSANTO v. ZERNA: tenancy relationship may be established
verbally or writing
+ Sps. Zerna were charged with qualified theft for the taking of
coconuts owned by petitioner. They were acquitted but
required Zerna to return P1,100 to Monsanto on the ground
that Monsanto did not consent to harvest of coconut. Who is
entitled to P1,100 proceeds of copra sale. This falls under
DARAB
There is Agrarian dispute:
1. Subject of dispute was taking of coconuts
2. Private respondents were overseers at the time of taking by
virtue of Agreement .

+ tenancy relationship may be established verbally or writing,
expressly or impliedly
- here there was agreement which contradicts petitioners
contention that private respondents are mere overseers. Being
overseers does not foreclose their being tenants. Petitioner
allowed respondent to plant coconut, etc. Harvests: receipts of
remittance by respondent. Petitioner is claiming the amount of
P1,100 as balance from proceeds of copra sale. Private
respondents contend that this P1,100 is their compensation
pursuant to tenurial arrangements. Since this amount is
intertwined with the resolution of agra dispute, CA correctly
ruled that DARAB has jurisdiction. RTC has only jurisdiction
over criminal and it acted beyond when it ruled that agri
tenancy between parties. This belongs to DARAB.

To harass the tenants, gikiha ang tenants sa landowners ug qualified
theft. Qualified theft kay allegedly they were taking coconuts.

In the fiscals office, the respondent is supposed to file a counter
affidavit when a subpoena is issued. In the counter affidavit, the tenancy
relationship must be alleged by the lawyer of the tenant so that under
section 50-A the fiscals office will refer it to DAR. DAR will issue a
24

certification and will inform the fiscal and the fiscal may be constrained
to dismiss the case.

The question is, isnt it that in the fiscals office, the function is to find
probable cause? And when there is an allegation in the counter affidavit
made by the respondent which may be evidentiary in nature, the fiscal
normally will say that if there is evidence, it is to be proven in court. But
this time, because of a mere allegation, the fiscal will say that he has no
jurisdiction and the parties should go to DAR. If the case is dismissed,
the remedy there is you go to a higher fiscal DOJ, Office of the
President, etc.

If you apply the context of Isidro vs. CA case about allegations in a
complaint which will establish jurisdiction of a court, walay remedy ang
landowner. The landowner cannot say that the case should not be
referred because the tenant must first establish that he is a tenant. It
may create a clash between law and court procedure. Remember, court
procedure are promulgated by the supreme court. We have a provision
of the law where there is an automatic referral, all those silent on what
the court will do, if there is certification from DAR.

BEJASA v. CA
FACTS:
Candelaria owned two parcels of land, which she leased to Malabanan.
Malabanan hired the Bejasas to plant on the land and clear it, with all
the expenses shouldered by Malabanan. Bejasas continued to stay on
the land and did not give any consideration for its use, be it in the form
of rent or a shared harvest
ISSUE: Whether or not there is a tenancy relationship in favor of
the Bejasas
SC:
Court found that there was no tenancy relationship between the parties.
There was no proof that Malabanan and the Bejasas shared the
harvests. Candelaria never gave her consent to the Bejasas stay on the
land . There was no proof that the Dinglasans gave authority to the
Bejasas to be the tenant of the land in question. Not all the elements of
tenancy were met in this case. There was no proof of sharing in harvest.
While Bejasa testified, SC said only Bejasas word was presented to
prove this. Besides testimony was suspicious because of inconsistency
Bejasa testified that he agreed to deliver 1/5 of harvest as owners
share, yet at one time, he also mentioned that 25% was for Malabanan
and 50% for owner. Moreover, landowners never gave consent, citing
Chico vs. CA , 284 534 self serving statement are inadequate, proof
must be adhered. Even assuming that landowner agreed to lease it for
P20,000per year, such agreement did not prove tenancy . Consideration
should be harvest sharing.

Candelaria is the owner, malabanan is the lessee. It was malabanan who
hired Bejasa. Very obvious, no consent from the owner. There was no
proof that malabanan and Bejasa shared the harvest. Candelaria never
gave consent to Bejasa. There was no consent, and so there was no
tenancy relationship. The point is, if there are occupants in the property
claiming to be tenants, the land is agricultural, they are cultivating, they
allege sharing of the harvest, but the owner proves there was no
consent, then the occupants cannot claim tenancy relationship. The
tenants can be ejected. How do you prove sharing? There has to be a
receipt, or any other similar evidence. Is it possible? No because the
receipt can be used against the owner. Normally, in the absence of
receipt, the evidence of the tenant can be an affidavit because the
proceedings before is submission of position paper. You attach affidavits.
Can you submit your own affidavit if you are a tenant? Yes, but the court
will normally say that it is self-serving. You have to prove through
independent evidence affidavits of neighbours or other tenants.

VALENCIA v. CA
FACTS:
- Valencia is the owner of land, she leased the property for
five (5)years to Fr. Andres Flores under a civil law lease
concept; lease with prohibition against subleasing or
encumbering the land without Valencias written consent.
During the period of his lease, private respondents were
instituted to cultivate without consent of Valencia. After lease,
Valencia demanded vacate but refused; Private respondents
were later awarded with CLTs after they filed application with
DAR; CLTs were upheld by Exec Sec and CA.

Valencia is the owner, Flores is the lessee, it was flores who allowed the
private respondents. No tenancy, again no consent. Tenancy relationship
cannot be presumed. The lessee did not have the authority to sublease
because there was a prohibition to sublease.

ALMUETE v. ANDRES (Issue on Ownership)
Facts:
Almuete was in exclusive possession of subject land. Unknown
to Almuete, Andres was awarded homestead patent due to
investigation report that Almuete was unknown and waived his
rights; Andres also represented that Almuete sold the property
to Masiglat for radiophone set and that Masiglat sold to him for
a carabao and P600. Almuete filed an action for recovery of
possession and reconveyance before trial court. Issue is who
between 2 awardees of lot has better right to property.
SC:
This is controversy relating to ownership of farmland so, beyond the
ambit of agrarian dispute. No juridical tie of landowner and tenant
was alleged between petitioners and respondent. RTC was
competent to try the case.

The issue is whether there is an agrarian dispute. No. The issue was
about ownership so it is beyond the ambit of agrarian dispute. There was
no juridical tie.

PASONG BAYABAS v. CA : no evidence
Development of land: converted from agricultural to residential
as approved by DAR. Petitioners, claimed they are actual tillers
of land, they filed a complaint for damages alleging
surreptitious conversion; priv resp denied cultivation & waiver
of rights was executed by some.

SC : no tenancy
O no allegation in complaint that petitioners members are
tenants; waiver of rights constitutes abandonment. No
substantial evidence that private respondent is landlord.
Possession/entry is w/o knowledge of owner. Cultivation /
possession not proven. As to the remaining twenty and more
other complainants, it is unfortunate that they have not shown
that their cultivation, possession and enjoyment of the lands
they claim to till have been by authority of a valid contract of
agricultural tenancy. On the contrary, as admitted in their
complaint a number of them have simply occupied the
premises in suit without any specific area of tillage being
primarily mere farm helpers of their relatives

There was no difficulty on the part of the supreme court here, why? In
the complaint there was no allegation of tenancy. So how can the court
acquire jurisdiction over the complaint? There was no substantial
evidence, private respondent was landlord, there was no possession or
entry without knowledge of the owner that was alleged in the complaint.
Again, just to reiterate, tenancy relationship is a question of evidence,
same here in Escariz vs Revilleza.

ESCARIZ v. REVILLEZA : tenancy is not presumed
Involving fruit on land owned by private respondent. Petitioner
is claiming tenancy. DARAB considered petitioner a tenant; CA
reversed
25

SC: Tenancy is not presumed. There was no evidence to prove consent
of parties and sharing of harvest. SC agreed with CA that there is no
evidence on record to prove the existence of the following elements: (a)
the consent of the parties and (b) the sharing of harvests.

HEIRS OF JUGALBOT V. CA
FACTS:
Jugalbot was issued EP; EP was challenged by Heirs of priv
resp before DARAB and seek cancellation of title and recovery
possession; on appeal, DARAB upheld but CA reversed.

SC: Absence of tenancy relationship. The taking of property
violated due process (CA was correct in pointing out that Virginia A. Roa
was denied due process because the DAR failed to send notice of the
impending land reform coverage to the proper party); no ocular
inspection or any on-site fact-finding investigation and report to verify
the truth of the allegations of Nicolas Jugalbot that he was a tenant of
the property. By analogy, Roxas & Co., Inc. v. Court of Appeals applies
to the case at bar since there was likewise a violation of due process. No
concrete evidence of cultivation; No proof was presented except for their
self-serving statements. Independent evidence, aside from self-serving
statements, is needed. Plus CA findings- Jugalbot was soldier of US
Army and migrated to US and returned only in 1998, wife and daughter
were residents of California. Land involved is residential and not
agricultural because of zoning ordinance. Coverage Section 4: All
alienable and disposable public lands. All private lands devoted to or
suitable to agriculture Schedule of implementation Sec. 5 The
distribution xxx shall be implemented immediately and completed
within ten years from effectivity hereof. Sec. 63: The initial amount
needed to implement this Act for the period of ten years upon approval
hereof shall be funded from the Agrarian Reform Fund created under
Sections 20 and 21 of Executive Order No. 299. xxx.. RA 8542:
amended Sec. 63 as follows: The amount needed to implement this Act
until 2008 shall be funded from the Agrarian Reform Fund. RA 9700,
Sec. 21:
The amount needed to further implement the CARP as
provided in this Act, until June 30, 2014, upon expiration of funding
under Republic Act No. 8532 and other pertinent laws, shall be funded
from the Agrarian Reform Fund and other funding sources in the amount
of at least One hundred fifty billion pesos (P150,000,000,000.00)

Normally it is the tenant who will file a case because when the
landowner sends a demand letter to the occupant to vacate, the
occupant or the tenant would normally file an action before DAR.

This one is different, Jugalbot was granted a title emancipation patent.
He was granted a title because of his claim that he is a tenant. The title
was challenged by the heirs of the landowner, so the heirs filed and
sought the cancellation of the title of jugalbot and wanting recovery of
possession. The issue: is jugalbot really a tenant and therefore entitled
to the emancipation patent? There was no proof of cultivation and per
findings of CA, jugalbot was a soldier of the US army, he migrated to the
US and returned only in 1998. Kanus-a gi-issue ang title? It was in 1997,
so he was not here in pinas. His wife and daughter were residents of
California plus the land was residential. Meaning there was no tenancy
relationship between jugalbot and the landowner, so the title was
cancelled.

NICORP case (found it in the later part go go)

SPOUSES JESUS FAJARDO and EMER FAJARDO, vs. ANITA R.
FLORES

Facts:
Leopoldo delos Reyes owned a parcel of land located in Barangay
Sumandig in Hacienda Buenavista, San Ildefonso, Bulacan. In 1963, he
allowed petitioner Jesus Fajardo to cultivate said land. The net harvests
were divided equally between the two until 1975 when the relationship
was converted to leasehold tenancy. Per Order 2 from the Department of
Agrarian Reform (DAR), Regional Office, Region III, San Fernando,
Pampanga, rent was provisionally fixed at 27.42 cavans per year, which
Jesus Fajardo religiously complied with. From the time petitioner
cultivated the land, he was allowed by Leopoldo delos Reyes to erect a
house for his family on the stony part of the land, which is the subject of
controversy.

On January 26, 1988, Leopoldo delos Reyes died. His daughter and sole
heir, herein respondent Anita Flores, inherited the property. On June 28,
1991, Anita Flores and Jesus Fajardo executed an agreement,
denominated as "KASUNDUAN NG PAGHAHATI NG LUPA AT
PAGTATALAGA NG DAAN UKOL SA MAGKABILANG PANIG." 3 This was
followed by another agreement, "KASUNDUAN SA HATIAN SA LUPA,"
executed on July 10, 1991, wherein the parties agreed to deduct from
Lot No. 2351 an area of 10,923 sq m, allotting the same to petitioner.
Apparently, there was a conflict of claims in the interpretation of the
Kasunduan between Anita Flores and Jesus Fajardo, which was referred
to the DAR, Provincial Agrarian Reform Office, Baliuag, Bulacan. 4 In the
Report and Recommendation dated May 3, 2000, the Legal Officer
advised the parties to ventilate their claims and counterclaims with the
Department of Agrarian Reform Adjudication Board (DARAB), Malolos,
Bulacan.

On December 22, 2000, a complaint for ejectment was filed by herein
respondent Anita Flores, assisted by her husband Bienvenido Flores,
against petitioners with the Municipal Trial Court (MTC), San Ildefonso,
Bulacan. In the complaint, she alleged that, as the sole heir of the late
Leopoldo delos Reyes, she inherited a parcel of land consisting of stony
land, not devoted to agriculture, and land suitable and devoted to
agriculture located in Barangay Sumandig, San Ildefonso, Bulacan; that,
sometime in the 1960s, during the lifetime of Leopoldo delos Reyes,
Jesus Fajardo requested the former to allow him to work and cultivate
that portion of land devoted to agriculture; that Jesus Fajardo was then
allowed to erect a house on the stony part of the land, and that the use
and occupation of the stony part of the land was by mere tolerance only;
and that the land, which was divided equally between the two parties,
excluded the stony portion. In February 1999, respondent approached
petitioners and verbally informed them of her intention to repossess the
stony portion, but petitioners refused to heed the request.

Issue:
Whether or not MTC or the DARAB which has jurisdiction over the case.

Held:
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 or conditions
of such tenurial arrangements. It includes any controversy relating to
compensation of lands acquired under this Act and other terms and
conditions of transfer of ownership from landowner 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 and lessee. It relates to any controversy
relating to, inter alia, tenancy over lands devoted to agriculture.

Undeniably, the instant case involves a controversy regarding tenurial
arrangements. The contention that the Kasunduans, which allegedly
terminated the tenancy relationship between the parties and, therefore,
removed the case from the ambit of R.A. No. 6657, is untenable. There
still exists an agrarian dispute because the controversy involves the
home lot of petitioners, an incident arising from the landlord-tenant
relationship.

"Indeed, section 21 of the Republic Act No. 1199, provides that 'all cases
involving the dispossession of a tenant by the landlord or by a third party
and/or the settlement and disposition of disputes arising from the
relationship of landlord and tenant . . . shall be under the original and
26

exclusive jurisdiction of the Court of Agrarian Relations.' This jurisdiction
does not require the continuance of the relationship of landlord and
tenant at the time of the dispute. The same may have arisen, and
often times arises, precisely from the previous termination of such
relationship. If the same existed immediately, or shortly, before the
controversy and the subject-matter thereof is whether or not said
relationship has been lawfully terminated, or if the dispute springs or
originates from the relationship of landlord and tenant, the litigation is
(then) cognizable by the Court of Agrarian Relations . . ."

In the case at bar, petitioners' claim that the tenancy relationship has
been terminated by the Kasulatan is of no moment. As long as the
subject matter of the dispute is the legality of the termination of the
relationship, or if the dispute originates from such relationship, the case
is cognizable by the DAR, through the DARAB. The severance of the
tenurial arrangement will not render the action beyond the ambit of an
agrarian dispute.

This one will disturb landowners. If you are a landowner and you dont
want the court to pass upon your relationship assuming you recognize
that person occupying as a tenant, landowners may want to pay money
to their tenants and let them work, or possible, what happened is this,
the tenant was given a portion of the land. There was an agreement
here, the tenant was given a portion of the land. Nasayop ang abogado,
y man? It was not clear which portion of the land was given that is why
there was a conflict of claims in the interpretation. The landowner is
saying that the tenants house is erected on the owners lot while the
tenant is saying it is on the land that was given to him. The court said
there is agrarian dispute. As long as the subject matter is the legality of
the termination, if the dispute originates from such relationship that is
tenancy relationship. Example, you have a waiver executed by a tenant
saying that out of financial grant of the landowner or from person A, he
no longer has a right over the land and he has waived it etc. If the
tenant will question it and say that he was not fully apprised of his right
with respect to that and probably was not able to read. It has
something to do with that relationship, then the landowner will have a
problem. If the dispute originates from such relationship, it is a tenancy
relationship.

VICENTE ADRIANO vs. ALICE TANCO

Facts:
On December 18, 1975, respondent Alice Tanco (Alice) purchased a
parcel of land consisting of 28.4692 hectares located in Norzagaray,
Bulacan. The land was devoted to mango plantation. Later on, it was
partitioned among the respondents.

Controversy arose when Alice sent to Vicente a letter 6 dated January
16, 1995 informing him that subject landholding is not covered by the
Comprehensive Agrarian Reform Program (CARP). She asked him to
vacate the property as soon as possible.

Seeing the letter of Alice as a threat to his peaceful possession of subject
farmland which might impair his security of tenure as a tenant, Vicente
filed before the regional office of DARAB in Region III a Complaint for
Maintenance of Peaceful Possession with Prayer for Temporary
Restraining Order and/or Writ of Preliminary Injunction. He averred that
in 1970, Arsenio Tanco (Arsenio), the husband of Alice, instituted him as
tenant-caretaker of the entire mango plantation. Since then, he has been
performing all phases of farm works, such as clearing, pruning,
smudging, and spraying of the mango trees. The fruits were then divided
equally between them. He also alleged that he was allowed to improve
and establish his home at the old building left by Ang Tibay Shoes
located at the middle of the plantation. Presently, he is in actual
possession of and continues to cultivate the land.

In their Answer, respondents denied having instituted any tenant on
their property. They stressed that Vicente never worked and has no
employer-employee relationship with Geraldine, Ronald, and Patrick.
Insofar as Alice is concerned, respondents asserted that Vicente is not a
tenant but a mere regular farm worker.

Issue:
WHETHER or not VICENTE IS A BONA FIDE tenant.

Held:
Tenancy relationship is a juridical tie which arises between a landowner
and a tenant once they agree, expressly or impliedly, to undertake jointly
the cultivation of a land belonging to the landowner, as a result of which
relationship the tenant acquires the right to continue working on and
cultivating the land. 23

The existence of a tenancy relationship cannot be presumed and
allegations that one is a tenant do not automatically give rise to security
of tenure. 24 For tenancy relationship to exist, the following essential
requisites must be present: (1) the parties are the landowner and the
tenant; (2) the subject matter is agricultural land; (3) there is consent
between the parties; (4) the purpose is agricultural production; (5) there
is personal cultivation by the tenant; and, (6) there is sharing of the
harvests between the parties. 25 All the requisites must concur in order
to establish the existence of tenancy relationship, and the absence of
one or more requisites is fatal.

After a thorough evaluation of the records of this case, we affirm the
findings of the CA that the essential requisites of consent and sharing
are lacking.

The essential element of consent is sorely missing because there is no
proof that the landowners recognized Vicente, or that they hired him, as
their legitimate tenant. And, although Vicente claims that he is a tenant
of respondents' agricultural lot in Norzagaray, Bulacan, and that he has
continuously cultivated and openly occupied it, no evidence was
presented to establish the presence of consent other than his self-
serving statements. These cannot suffice because independent and
concrete evidence is needed to prove consent of the landowner.

Likewise, the essential requisite of sharing of harvests is lacking.
Independent evidence, such as receipts, must be presented to show that
there was sharing of the harvest between the landowner and the tenant.
28 Self-serving statements are not sufficient.

Here, there was no evidence presented to show sharing of harvest in the
context of a tenancy relationship between Vicente and the respondents.
The only evidence submitted to establish the purported sharing of
harvests were the allegations of Vicente which, as discussed above, were
self-serving and have no evidentiary value. Moreover, petitioner's
allegations of continued possession and cultivation do not support his
cause. It is settled that mere occupation or cultivation of an agricultural
land does not automatically convert a tiller or farm worker into an
agricultural tenant recognized under agrarian laws. 30 It is essential that,
together with the other requisites of tenancy relationship, the agricultural
tenant must prove that he transmitted the landowner's share of the
harvest.

Neither can we agree with the DARAB's theory of implied tenancy
because the landowner never acquiesced to Vicente's cultivating the
land. Besides, for implied tenancy to arise it is necessary that all the
essential requisites of tenancy must be present.

Again a question of evidence. The court reiterating that independent
evidence include RECEIPTS that must be presented.

Labor law: in illegal dismissal cases, it is the employer who has the
burden.
Agrarian: it is the person claiming to be the tenant who has the burden
to prove his allegation of tenancy. He who alleges has the burden to
prove. Not only that, Respondent-landowner has no obligation to prove
exception or defects.

27

ESTATE OF PASTOR M. SAMSON vs. MERCEDES R. SUSANO

Facts:
Pastor M. Samson (Pastor) owned a 1.0138-hectare parcel of land known
as Lot 1108 of the Tala Estate Subdivision located in Bagumbong,
Caloocan City.

Pastor was approached by his friend Macario Susano (Macario) who
asked for permission to occupy a portion of Lot 1108 to build a house for
his family. Since Pastor was godfather to one of Macario's children,
Pastor acceded to Macario's request. Macario and his family occupied
620 square meters of Lot 1108 and devoted the rest of the land to palay
cultivation. Herein respondents, Macario's wife Mercedes R. Susano and
their son Norberto R. Susano, insist that while no agricultural leasehold
contract was executed by Pastor and Macario, Macario religiously paid 15
cavans of palay per agricultural year to Pastor, which rent was reduced
by Pastor in 1986 to 8 cavans of palay per agricultural year.

Pastor subdivided Lot 1108 into three portions of which he sold portions
of it without Macario's knowledge.
Pastor sold 2,552 square meters of Lot 1108-A to spouses Felix Pacheco
and Juanita Clamor, allegedly also without Macario's knowledge and
consent.

According to respondents, no written notice was sent by Pastor to
Macario prior to the sale to Chan of Lot 1108-C comprising an area of
6,696 square meters. They aver that Macario came to know of the
transaction only after Chan visited the property sometime in October
1990 accompanied by an employee from the city government.

Issue:

Whether or not there was a tenancy relation between Pastor Samson
and Macario Susano and in binding herein petitioner.

Held:
We find in favor of petitioners. Applying our pronouncement in Levardo
v. Yatco, 51 we rule that the subject land cannot be subject to the OLT
program of P.D. No. 27 for two reasons: first, the subject land is less
than seven hectares; and second, respondents failed to show that Pastor
owned other agricultural lands in excess of seven hectares or urban land
from which he derived adequate income, as required by Letter of
Instruction (LOI) No. 474. 52

Moreover, the DAR Memorandum on the "Interim Guidelines on
Retention by Small Landowners" dated July 10, 1975 is explicit:

5.Tenanted rice and/or corn lands seven (7) hectares or less shall not be
covered by Operation Land Transfer. The relation of the land owner and
tenant-farmers in these areas shall be leasehold . . . 53

However, while the disputed landholding which had an original
aggregate area of only 1.0138 hectares is not covered by the OLT
program, the same may still be covered by P.D. No. 27, albeit under its
Operation Land Leasehold (OLL) program. The OLL program placed
landowners and tenants of agricultural land devoted to rice and corn into
a leasehold relationship as of October 21, 1972. 54 But the fact that
Macario, respondents' predecessor-in-interest, was a de jure tenant must
be established.

In the case at bar, while the RARAD, DARAB and the CA are unanimous
in their conclusion that an implied tenancy relationship existed between
Pastor Samson and Macario Susano, no specific evidence was cited to
support such conclusion other than their observation that Pastor failed to
protest Macario's possession and cultivation over the subject land for
more than 30 years. Contrary to what is required by law, however, no
independent and concrete evidence were adduced by respondents to
prove that there was indeed consent and sharing of harvests between
Pastor and Macario.

It has been repeatedly held that occupancy and cultivation of an
agricultural land will not ipso facto make one a de jure tenant.
Independent and concrete evidence is necessary to prove personal
cultivation, sharing of harvest, or consent of the landowner. Substantial
evidence necessary to establish the fact of sharing cannot be satisfied by
a mere scintilla of evidence; there must be concrete evidence on record
adequate to prove the element of sharing. To prove sharing of harvests,
a receipt or any other credible evidence must be presented, because
self-serving statements are inadequate. Tenancy relationship cannot be
presumed; the elements for its existence are explicit in law and cannot
be done away with by conjectures. Leasehold relationship is not
brought about by the mere congruence of facts but, being a legal
relationship, the mutual will of the parties to that relationship should be
primordial. For implied tenancy to arise it is necessary that all the
essential requisites of tenancy must be present.

The affidavits executed by three of respondents' neighbors are
insufficient to establish a finding of tenancy relationship between Pastor
and Macario.

Principle: affidavits of the tenant or persons claiming to be a tenant are
self-serving.

This case deals with affidavits executed by the neighbors of the
occupants. SC considered the affidavits as insufficient because of lack of
details.

Lesson: you can use affidavits of neighbors for as long as it has the
specific details which are:
- how the agreement was implemented
- how much was given
- when and where the payments were made
- whether they have a witness when the landowner is receiving
the share.

JUAN GALOPE vs. CRESENCIA BUGARIN

Facts:

Respondent owns a parcel of land. Petitioner farms the land.
In Barangay Case No. 99-6, respondent complained that she lent the
land to petitioner in 1992 without an agreement, that what she receives
in return from petitioner is insignificant, and that she wants to recover
the land to farm it on her own. Petitioner countered that respondent
cannot recover the land yet for he had been farming it for a long time
and that he pays rent ranging from P4,000 to P6,000 or 15 cavans of
palay per harvest. The case was not settled. 5

Represented by Celso Rabang, respondent filed a petition for recovery of
possession, ejectment and payment of rentals before the Department of
Agrarian Reform Adjudication Board (DARAB), docketed as DARAB Case
No. 9378. Rabang claimed that respondent lent the land to petitioner in
1991 and that the latter gave nothing in return as a sign of gratitude or
monetary consideration for the use of the land. Rabang also claimed that
petitioner mortgaged the land to Jose Allingag who allegedly possesses
the land.

Provincial Adjudicator dismissed the petition and ruled that petitioner is a
tenant entitled to security of tenure. The Adjudicator said substantial
evidence prove the tenancy relationship between petitioner and
respondent. The Adjudicator noted the certification of the Department of
Agrarian Reform (DAR) that petitioner is the registered farmer of the
land; that Barangay Tanods said that petitioner is the tenant of the land;
that Jose Allingag affirmed petitioner's possession and cultivation of the
land; that Allingag also stated that petitioner hired him only as farm
helper; and that respondent's own witness, Cesar Andres, said that
petitioner is a farmer of the land.

The DARAB found no tenancy relationship between the parties and
stressed that the elements of consent and sharing are not present. The
DARAB noted petitioner's failure to prove his payment of rentals by
28

appropriate receipts, and said that the affidavits of Allingag, Rolando
Alejo and Angelito dela Cruz are self-serving and are not concrete proof
to rebut the allegation of nonpayment of rentals. The DARAB added that
respondent's intention to lend her land to petitioner cannot be taken as
implied tenancy for such lending was without consideration.

Issue:
Whether or not there is a tenancy relationship

Held:
The matter of rental receipts is not an issue given respondent's
admission that she receives rentals from petitioner. To recall,
respondent's complaint in Barangay Case No. 99-6 was that the rental or
the amount she receives from petitioner is not much. 14 This fact is
evident on the record 15 of said case which is signed by respondent and
was even attached as Annex "D" of her DARAB petition. Consequently,
we are thus unable to agree with DARAB's ruling that the affidavits 16 of
witnesses that petitioner pays 15 cavans of palay or the equivalent
thereof in pesos as rent are not concrete proof to rebut the allegation of
nonpayment of rentals. Indeed, respondent's admission confirms their
statement that rentals are in fact being paid. Such admission belies the
claim of respondent's representative, Celso Rabang, that petitioner paid
nothing for the use of the land.

Respondent's act of allowing the petitioner to cultivate her land and
receiving rentals therefor indubitably show her consent to an unwritten
tenancy agreement. An agricultural leasehold relation is not determined
by the explicit provisions of a written contract alone. Section 5 18 of
Republic Act (R.A.) No. 3844, otherwise known as the Agricultural Land
Reform Code, recognizes that an agricultural leasehold relation may exist
upon an oral agreement.

Thus, all the elements of an agricultural tenancy relationship are present.
Respondent is the landowner; petitioner is her tenant. The subject
matter of their relationship is agricultural land, a farm land. 19 They
mutually agreed to the cultivation of the land by petitioner and share in
the harvest. The purpose of their relationship is clearly to bring about
agricultural production. After the harvest, petitioner pays rental
consisting of palay or its equivalent in cash. Respondent's motion 20 to
supervise harvesting and threshing, processes in palay farming, further
confirms the purpose of their agreement. Lastly, petitioner's personal
cultivation of the land 21 is conceded by respondent who likewise never
denied the fact that they share in the harvest.

One of a kind case!!! (LO was very honest)

Landowner filed a complaint at the barangay because she would want
the occupant to vacate the property. Reason: gigamyan sa renta the
rent was insignificant, she wants to recover the land to farm it on her
own so that she can gain more profits.

SC used her own admission that she received rentals from the petitioner.
This is a confirmation that indeed rentals were paid and that this is an
agrarian dispute.

SUTTON VS. LIM

FACTS: On December 7, 1993, private respondents applied for the
issuance of a CLOA over a parcel of land before the Department of
Agrarian Reform (DAR) Secretary. Upon the recommendation of the
Municipal Agrarian Reform Officer (MARO), the application was granted
and they were issued CLOA. Subsequently, on January 31, 1994, the
Register of Deeds of Masbate issued the corresponding OCT.
On November 23, 1994, petitioner filed a petition for the cancellation of
the said CLOA and title before the Office of the Provincial Agrarian
Reform Adjudicator (PARAD), assailing the validity of the said issuances
on the ground that the subject parcel of land is a private land devoted to
cattle raising which she inherited from her deceased father, Samuel
Sutton, who, in turn, previously bought the subject parcel of land from
Romanito P. Lim and his wife. Petitioner also claimed to have been
denied due process for not receiving any notice of private respondents'
application proceedings for CLOA. The petition was amended to include
the MARO, PARO and the Register of Deeds of Masbate as additional
respondents.
Private respondents averred that, being the actual occupants and
qualified beneficiaries of the subject lot which formed part of the
alienable and disposable portion of the public domain, the DAR Secretary
correctly issued the CLOA in their favor. While admitting having sold a lot
in favor of Samuel Sutton from whom petitioner purportedly inherited
the subject parcel of land, they asserted that the lot sold was different
from Lot No. 1493. Moreover, they interposed the defense of
prescription since the petition for cancellation was filed after the subject
title became indefeasible.
On the other hand, the MARO and PARO, in their Answer with Motion to
Dismiss, invoked the presumption of regularity in the performance of
their official functions in issuing the CLOA. They also clarified that the
subject parcel of land has been classified as Government Owned Land
(GOL) or Kilusang Kabuhayan at Kaunlaran (KKK) areas pursuant to
Presidential Proclamation No. 2282, hence, subject to the Comprehensive
Agrarian Reform Program's immediate coverage (CARP coverage).
Moreover, petitioner was not able to prove that she is the registered
owner of the subject parcel of land and that it is exempt from the CARP
coverage.
The CA Ruling: CA denied the petition on jurisdictional grounds and
dismissed the case without prejudice to its re-filing. It held that the
DARAB does not have jurisdiction over the instant controversy due to the
absence of a landlord-tenant relationship or any agrarian relations
between the parties. It also ruled that since the issuance of the subject
CLOA was made in the exercise of the DAR Secretary's administrative
powers and function to implement agrarian reform laws, the jurisdiction
over the petition for its cancellation lies with the Office of the DAR
Secretary.
Issue: WON there is tenancy relationship?
HELD: The petition is without merit. While the DARAB may entertain
petitions for cancellation of CLOAs, as in this case, its jurisdiction is,
however, confined only to agrarian disputes. For the DARAB to acquire
jurisdiction, the controversy must relate to an agrarian dispute between
the landowners and tenants in whose favor CLOAs have been issued by
the DAR Secretary. The cases involving the issuance, correction
and cancellation of the CLOAs by the DAR in the administrative
implementation of agrarian reform laws, rules and regulations
to parties who are not agricultural tenants or lessees are within
the jurisdiction of the DAR and not the DARAB.
Thus, it is not sufficient that the controversy involves the cancellation of
a CLOA already registered with the Land Registration Authority. What is
of primordial consideration is the existence of an agrarian dispute
between the parties.
As defined in Section 3 (d) of R.A. No. 6657, an agrarian dispute relates
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 or conditions of such tenurial arrangements.
It includes any controversy relating to compensation of lands acquired
under the said Act and other terms and conditions of transfer of
29

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 and lessee."
Verily, an agrarian dispute must be a controversy relating to a tenurial
arrangement over lands devoted to agriculture. 18 Tenurial
arrangements pertain to agreements which set out the rights between a
landowner and a tenant, lessee, farm worker or other agrarian reform
beneficiary involving agricultural land. Traditionally, tenurial
arrangements are in the form of tenancy 19 or leasehold
arrangements. 20 However, other forms such as a joint production
agreement to effect the implementation of CARP have been recognized
as a valid tenurial arrangement. 21
To be sure, the tenurial, leasehold, or agrarian relations referred to may
be established with the concurrence of the following: 1) the parties are
the landowner and the tenant or agricultural lessee; 2) the subject
matter of the relationship is an agricultural land; 3) there is consent
between the parties to the relationship; 4) the purpose of the
agricultural relationship is to bring about agricultural production; 5) there
is personal cultivation on the part of the tenant or agricultural lessee;
and 6) the harvest is shared between the landowner and the tenant or
agricultural lessee.
In this case, a punctilious examination reveals that petitioner's
allegations are solely hinged on the erroneous grant by the DAR
Secretary of CLOA No. 00122354 to private respondents on the grounds
that she is the lawful owner and possessor of the subject lot and that it
is exempt from the CARP coverage. In this regard, petitioner has not
alleged any tenurial arrangement between the parties, negating the
existence of any agrarian dispute and consequently, the jurisdiction of
the DARAB. Indisputably, the controversy between the parties is not
agrarian in nature and merely involves the administrative implementation
of the agrarian reform program which is cognizable by the DAR
Secretary. Section 1, Rule II of the 1994 DARAB Rules of Procedure
clearly provides that "matters involving strictly the administrative
implementation of R.A. No. 6657, and other agrarian reform laws and
pertinent rules, shall be the exclusive prerogative of and cognizable by
the DAR Secretary."
Furthermore, it bears to emphasize that under the new law, R.A. No.
9700, 24 which took effect on July 1, 2009, all cases involving the
cancellation of CLOAs and other titles issued under any agrarian reform
program are now within the exclusive and original jurisdiction of the DAR
Secretary. (Section 9)
Consequently, the DARAB is bereft of jurisdiction to entertain the herein
controversy, rendering its decision null and void. Jurisdiction lies with the
Office of the DAR Secretary to resolve the issues of classification of
landholdings for coverage (whether the subject property is a private or
government owned land), and identification of qualified beneficiaries.
LADANO VS. NERI

FACTS: Complaint by petitioner Luciano Ladano (Ladano) before the
DARAB Provincial Adjudicator against respondents Felino Neri (Neri),
Edwin Soto, Adan Espanola and Ernesto Blanco. Ladano alleged that
on May 7, 2003, the respondents forcibly entered the two-hectare
land, located in Manalite I,Barangay Sta. Cruz, Antipolo City, which he
and his family have been peaceably occupying and cultivating since
1970. The said respondents informed him that the property belongs to
Neri and that he should vacate the same immediately. Not too long
afterwards, the respondents fenced the property and destroyed some
of the trees and kawayan planted thereon. Ladano prayed that he be
declared the rightful "occupant/tiller" of the property, with the right to
security of tenure thereon. In the alternative that the judgment is in
the respondents' favor, he prayed that the respondents compensate
him for the improvements that he introduced in the property.
Respondents countered that Ladano's Complaint should be dismissed
for lack of merit. 11 He is not entitled to the reliefs he sought because
he does not have, as he did not even allege having, a leasehold
arrangement with Neri, the supposed owner of the land he is
occupying. 12
Instead of arguing that he has a right to remain on the property as
its bona fide tenant, Ladano maintained that he has been its
possessor in good faith for more than 30 years. He believed then that
the property was part of the "public land and [was] open to
anybody." 13 As a possessor and builder in good faith, he cannot be
removed from the subject property without being compensated for the
improvements that he had introduced. 14 He prayed for an award of
P100,000.00 as disturbance compensation. 15
On June 23, 2004, the Provincial Adjudicator dismissed Ladano's
Complaint. 16 She determined that the two-hectare property, while
agricultural, is not covered by RA No. 6657, as amended, 17 which
only covers agricultural properties beyond five hectares. Presidential
Decree No. 27, as amended, 19 does not apply either because the
property was not planted with rice and corn. Neither is it covered by
other agrarian tenancy laws because Ladano had not presented any
evidence of his tenancy relationship with the landowner.
The DARAB determined that the only issue to be resolved is whether
Ladano is a tenant on the subject landholding. 25 If he is a tenant, he
is entitled to security of tenure and cannot be removed from the
property. The DARAB held that Ladano's 30-year occupation and
cultivation of the land could not have possibly escaped the
landowner's notice. Since the landowner must have known about, and
acquiesced to, Ladano's actions, an implied tenancy is deemed to exist
between them. 27 The landowner, who denied the existence of a
tenancy relationship, has the burden of proving that the occupant of
the land is a mere intruder thereon. 28 In the instant case,
respondents failed to discharge such burden.
Respondents filed a Motion for Reconsideration. They assailed the
DARAB's finding of a tenancy relationship as having no factual basis.
Ladano himself never claimed sharing his harvests with, or paying
rentals to, the landowner. Without such an arrangement, no tenancy
relationship can exist between them 32 and Ladano cannot claim
rights under the agrarian laws.
Contrary to the DARAB's ruling, the CA held that the burden lies on
the person who is asserting the existence of a tenancy relationship to
prove that all the elements necessary for its existence are present (6
requisites).
The CA concluded that there is no evidence supporting the DARAB's
conclusion that a tenancy relationship exists between Ladano and
Neri. 38 In fact, Ladano himself admitted that he entered and tilled
the subject property without the knowledge and consent of the
landowner. Such admission negates the requisites of consent and of
an agreement to share harvests. 39
30

In seeking a reconsideration 41 of the CA Decision Ladano alleged, for
the first time, that he indeed shared a portion of his harvest with the
landowner's caretaker.
Issues Whether petitioner is an agricultural tenant on the subject
property.
Our Ruling: Petitioner is not a tenant on the land and is not entitled
to security of tenure nor to disturbance compensation. His Complaint
was properly dismissed for lack of merit.
The Department of Agrarian Reform and its adjudication boards have
no jurisdiction over Ladano's Complaint. "For the DARAB to acquire
jurisdiction over the case, there must exist a tenancy [relationship]
between the parties." 70 But a careful reading of Ladano's Complaint
shows that Ladano did not claim to be a leasehold tenant on the land.
Petitioner never alleged that he had any agreement with the
landowner of the subject property. Indeed Ladano's Complaint did not
assert any right that arises from agrarian laws. He asserted his rights
based on his prior physical possession of the two-hectare property and
on his cultivation of the same in good faith. The issues that he wanted
resolved are who between himself and the respondents have a better
right to possess the property, and whether he has a right to be
compensated for the improvements he introduced on the property.
Clearly, the nature of the case he filed is one for forcible entry 72 and
for indemnification, 73neither of which is cognizable by the DARAB,
but by the regular courts. While neither of the parties challenged the
jurisdiction of the DARAB, the Court can consider the issue of
jurisdiction motu proprio.
Still a question about evidence.
In Isidro, the pronouncement of the SC that even if the land was agri,
that does not automatically become an agrarian dispute.
In the same manner, even if the person is occupying and cultivating,
that does not ipso facto make that person a tenant. 6 requisites must
be satisfied. Even if there is harvest or cultivation, but there is no
consent, there is no agrarian dispute.

Chapter II (Coverage)

Recap on difference between PD 27 and CARL:
PD 27: rice and corn
CARL: everything is covered subject to certain exceptions (prawn
farming, fishpond, livestock, etc., under sec. 10) but generally all land,
public and private lands.
Common denominator: devoted to or suitable to agriculture
- Why is there such an element?
- These lands are supposed to be acquired by the government
to be given to farmer beneficiaries. Purpose: they will
improve, (to cultivate the land and for the land to be
developed)

Actual cases: LO will allege that lands are suitable for ECOTOURISM so
that it will not be suitable for agriculture.
- Proof needed to show ecotourism suitability: certification from
department of agriculture.

(there was an issue on Roxas application for exemption) but SC said
that this issue has to be determined by DAR, not us.
Dissenting opinion of Ynares Santiago in Roxas and Company: There was
a certification from DA certifying that the land is not suitable for
agriculture. So why should we refer this to DAR when there is already a
certificate?

HOMESTEAD GRANTEES (Sec.6) Very important

FIRST ASPECT of section 6 is about homestead. (Underlined provision)

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. 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 lands have been covered by
Presidential Decree No. 27 shall be allowed to keep the areas originally
retained by them thereunder: 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.
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.
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 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 effectivity 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.
Purpose of Homestead: Given to the citizens of the Philippines for
cultivation and for residence

Maximum number of hectares that can be given to citizens is 12
hectares

Homestead is also a title which you will learn in Land Titles and Deeds
*More or less similar with Free Patent but they differ in the requisites
*Title given by DENR and normally there is a prohibition of conveyance
within a period of 5 years

SIR: Mao na ang uban mu.ingon nga we might as well suffer the 5 yr
prohibition under free patent or homestead than go through with the
judicial process of titling which may take several years
Qualifications under Sec. 6 (Take note):
1. original homestead grantees or their direct compulsory heirs
2. who still own the homestead
3. as long as they continue to cultivate (most important)

HOMESTEAD PATENT A mode of acquiring alienable and disposable
lands of public domain for agricultural purposes conditioned upon actual
cultivation and residence.
filed at CENRO where land being applied is located.
31

who are qualified - citizens of Philippines over 18
years old & not an owner of more than 12 hectares
of land (Art XII, Sec. 3, 1987 Constitution)
designed to distribute disposable agricultural lots of the State
to land-destitute citizens for their home and cultivation.
Pursuant to such benevolent intention the State prohibits the
sale or encumbrance of the homestead (CA 141, Section 116)
within five years after the grant of the patent. After that five-
year period the law impliedly permits alienation of the
homestead, but in line with the primordial purpose to favor
with the homesteader and his family the statute provides that
such alienation or conveyance (Section 117) shall be subject to
the right of repurchase by the homesteader, his widow or
heirs.

CARL recognizes rights of homesteaders(Sec.6,)
expressly recognized in Sec. 6, Art XIII, Constitution

SECOND ASPECT
Retention right of the landowner: xxx but in no case shall retention by the
landowner exceed five (5) hectares.
- What is the meaning of that? A landowner, for ex., who has
20 hectares, at the effectivity of the law will now be able to
retain only 5 hectares. 15 hectares will be acquired by the
government subject to payment of just compensation.
- Why retention? That is a right of the landowner to hold on to
5 hectares without any condition or qualification.
Meaning: WON the landowner is personally cultivating,
that is not required by law. That is an absolute right of
the landowner
Although later on, we will later on discover that there is
an admin order issued by DAR setting limitations
landowner has to apply with DAR to be able to exercise
retention, there is a period within which to exercise and
if there is a failure to exercise within the period given
then there is a possible waiver of that right.
But the landowner, if aggrieved by the MARO (for ex.
because it is the MARO who normally handles the
application at the lower level) can go the Sec. of DAR
on appeal.

THIRD ASPECT
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

Take note that the word used by law with respect to the children or child
of the landowner is NOT retention but AWARD.
- Meaning: for a child to be awarded by the government with 3
hectares, he HAS to COMPLY with these qualifications
- Who normally examines the qualifications? MARO
SIR: and with due respect with MAROs, it is also
possible that it is in the appreciation of these
qualifications that corruption can come in, with or
without consideration

FOURTH ASPECT: Retained area of the landowner (second par. of Sec.
6)
- Who has the right to choose? LANDOWNER
- What if in the chosen area, there are tenants? What would
happen to the tenants? Law gives them (tenant) two options:
1. You can be a qualified beneficiaries of other portions of
the land of the landowner or on agricultural lands
owned by other persons
2. You can remain on the retained area. If he chooses to
remain on the retained area:
4 The tenant loses his right to become a qualified
beneficiary
4 There is now a leasehold relation between the
landowner-lessor and the tenant on the retained
area. Tenant will not acquire any parcel of land
but he continues to be a tenant on the retained
area and to be governed by Chapter 3 of the law.

2 CASES UNDER HOMESTEAD:

Alita vs. CA, 170 SCRA 706
Facts:
Two parcels of land in Tungawan, Zamboanga del Norte were
acquired by private respondents predecessors-in-interest through
homestead patent under the provisions C.A. No. 141.
Private respondents/owners Enrique Reyes, et al. herein are
desirous of personally cultivating these lands, but petitioners/tenants
Gabino Alita refuse to vacate, relying n the provisions of PD 27 and PD
316 and appurtenant regulations issued by the Ministry of Agrarian
Reform.

Held:
We agree with the petitioners in saying that PD 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 CA No. 141. Thus,
The Homestead Act has been enacted for the welfare and
protection of the poor. The law gives a needy citizen a piece of land
where he may build a modest house for himself and family and plant
what is necessary for subsistence and for the satisfaction of lifes other
needs.xxx
Both the Philippine constitution and the CARL respect the
superiority of the homesteaders right over the right of the tenants
guaranteed by the Agrarian Reform Statute.

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:

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. xxxx... 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.

ALITA v. CA: (1989)
private respondents predecessors-in-interest have
acquired 2 parcels of land in Zamboanga del Sur
thru homestead patent
petitioners/ tenants refuse to vacate relying on PD27
SC:
PD decreed the emancipation of tenants from bondage of soil
and transferring to them ownership of land they till.
However, PD27 cannot be involved to defeat the very purpose
of CA 141 (Public Land Act)
Phil. Constitution respects the superiority of homesteaders
rights and CARL also.
Sec. 6:
Provided, further, That original homestead grantees or their direct
compulsory heirs who still own the original homestead at the time of the
32

approval of this Act shall retain the same areas as long as they continue
to cultivate said homestead.

Paris vs. Alfeche, 364 SCRA 110
Facts:
Petitioner Florencia Paris is the owner of 10.6146 hectare of
land in Paitan,Bukidnon. The said parcels are fully tenanted by private
respondents Dionisio Alfeche, et al. who are recipients of Emancipation
Patents in their names pursuant to Operation Land Transfer (OLT) under
PD 27 notwitstanding the fact that neither the tenants nor the Land Bank
[has] paid a single centavo for the said land.
Petitioner contends that since she is entitled to a retention of
7 hectares under PD 27 and/or 5 hectares and 3 hectares each for her
children under CARL., the tenants are not supposed to acquire the
subject land and the Emancipation Patents precipitately issued to them
are null and void for being contrary to law. Petitioner further alleged that
she owns the subject property as original homestead grantee who still
owned the same when RA 6657 was approved, thus she is entitled to
retain the area to the exclusion of her tenants.
As regards to the land, petitioner has applied for retention of
7 hectares contending that the lands subject of the instant petition are
covered by Homestead Patents, and as decided by the Supreme Court in
Patricio vs. Bayug and Alita vs. CA, the homesteaders and their heirs
have the right to cultivate their homesteads personally, which is a
superior right over that of tenant-farmers.

Held:
Petitioners contention is without legal basis. PD 27, under
which the EP sought to be canceled here were issued to respondents,
applies to all tenanted private agricultural lands primarily devoted to rice
and corn under a system of share-crop or lease-tenancy, whether
classified as landed estate or not. The law makes no exceptions
whatsoever in its coverage. Nowhere therein does it appear that the lots
obtained by homestead patents are exempt from it operation.
Petitioners claimed entitlement to retain 7 hectares is also
untenable. PD 27, which provides the retention limit, states:
In all cases, the landowner may retain an area of not more than 7
hectares if such landowner is cultivating such area or will now cultivate
it.
Clearly, the right to retain an area of 7 hectares is not
absolute. It is premised on the condition that the landowner is cultivating
the area sought to be retained or will actually cultivate it upon effectivity
of the law.
In the case at bar, neither of the conditions for retention is
present. As admitted by petitioner herself, the subject parcels are fully
tenanted; thus, she is clearly not cultivating them, nor will she personally
cultivate any part thereof. Undoubtedly, therefore, she has no right to
retain any portion of her landholdings.
Even under the current primary law on agrarian reform,
Republic Act (RA) No. 6657, to which the application of PD 27 is
suppletory, petitioner's lands are subject to land reform. The said Act
lays down the rights of homestead grantees under Sec. 6 thereof.

Indisputably, homestead grantees or their direct compulsory heirs can
own and retain the original homesteads, only for "as long as they
continue to cultivate" them. That parcels of land are covered by
homestead patents will not automatically exempt them from the
operation of land reform. It is the fact of continued cultivation by the
original grantees or their direct compulsory heirs that shall exempt their
lands from land reform coverage.
Neither petitioner nor her heirs are personally cultivating the
subject homesteads. The DAR and the CA found that respondents were
the ones who had been cultivating their respective portions of the
disputed properties.
However, petitioner can retain five (5) hectares in accordance
with Section 6 of RA 6657, which requires no qualifying condition for the
landowner to be entitled to retain such area.
Petitioner's heirs, however, are not entitled to awards of
three (3) hectares each, since they are not actually tilling the parcels or
directly managing the farm.

PARIS v. ALFECHE (2001)
Paris is owner of 10 hectares in Bukidnon and another
property of 13 hectares. She admitted that land is fully
tenanted by private respondents Alfeche,et al.
Paris claimed that she is entitled to retention and that as
original homestead grantee, she is entitled to retain the lands
to the exclusion of tenants.

SC :
O Petitioners contention is w/o legal basis. PD applies to all
tenanted private agriculture lands primarily devoted to rice and
corn. Nowhere does it appear that lots obtained by homestead
patents are exempted from its operation. Under RA 6657,
rights of homestead grantee are provided but with condition:
only for as long as they continue to cultivate them. That
parcels of land are covered by homestead will not
automatically exempt them from operation of land reform. It is
the fact of continued cultivation by original grantees or direct
compulsory heirs that shall exempt their lands. Petitioner can
retain however 5 hectares which require no qualifying
condition (Sec.6)

DIFFERENCE between Alita and Paris:
- Alita: had the desire to personally cultivate granted
- Paris: no desire to cultivate denied

RETENTION RIGHTS
NCC: conjugal total is 5; capital/paraphernal not more than 5 each
but not exceed 10
FC (Aug.3,1988) per DAR Adm. Order No. 2, s. 2003:
capital/paraphernal - not to exceed 5 provided with judicial
separation
absolute (presumed) not to exceed 5

*Even if you have two spouses, the two is considered to be one!
Therefore, they shall only have 5 hectares depending of course on the
relation.

SIR: This is what is actually happening but do not do this. (with respect
to retention limit
*illegal: A has 5 hectares of agri land, and wants to buy the 5 hectares
of B. If A will buy the land and will change the document of B with As
name, As land holding will exceed 5 hectares (that is not allowed under
the law because the buyer is supposed to execute an affidavit of the
transferee saying that the acquisition will not exceed the landholding
provided by law). Limitation applies throughout the Philippines.
What would A do? A will pay B with the consideration but A
will not cause the transfer of Bs name on the land. Ipabilin ang name sa
yuta in the name of B to avoid perjury. But there will be complications
*legal:
- Before buying the land, change the classification in tax declaration from
agricultural to residential or commercial or industrial.
- Disadvantage: Real property taxes
- Be careful: Republic vs. CA (under Sec. 10 on exemptions): There is no
law or jurisprudence that says that the classification under tax
declaration is the absolute standard.
- tax dec vs. MARO's findings (land is agri) ,SC upheld MAROs findings

LANDOWNERs RETENTION RIGHTS
Is this right defeated by the issuance of CLTs/EPs or CLOAs?

How CLOA is issued to farmer beneficiaries:
- Under Sec. 16 on acquisition by the government, there are
different schemes under the reform:
Land transfer schemes: 2 aspects voluntary and
compulsory
33

4 Voluntary the landowner will volunteer to
convey the land to the government, agree on the
price and then execute the deed of conveyance
4 Compulsory if the landowner refuses the notice
of acquisition and notice of coverage. Gov. will
have to expropriate. This time is a different
expropriation. WHY?
Even without the title (2 copies: owners title
and the RDs title), if the government has
already deposited the amount with LBP,
registry of deeds can already cancel the title
of the owner and issue a new title in favor of
the government. The government can now
issue different titles to farmer beneficiaries.
It is now called CLOA Certificate of Land
Ownership Award.

Even if the farmer beneficiary is given the CLOA, he still has to pay the
government 30 annual amortizations with interest. (that is how long the
farmer pays the government for the just compensation)

DAEZ v. CA
Issuance of EPs/CLOAs to beneficiaries does not absolutely
bar landowner from retaining the area. In fact, EP or CLOA may be
cancelled if land covered in later found to be part of landowners
retained area. In this case, CLTs of private respondent were leased w/o
according Daez her right of choice. So DAR was ordered to fully accord
Daez her rights under Sec.6 of RA 6657.
Retention by landowner: 5 hectares
Retention by each child of landowner: 3 hectares provided:
1. at least 15 years of age; and
2. actually tilling the land or directly managing the farm

DAR Adm. Order # 2, S.2003
Who may apply for retention
Period to exercise right of retention
Where to file
Instance where owner is considered to have waived his right
of retention
Operating produces : MARO PARO REG. DIRECTOR- Sec.
(Appeal)

RA 9700, Sec 3 amended Sec 4.
That landholdings of landowners with a total area of five (5) hectares
and below shall not be covered for acquisition and distribution to
qualified beneficiaries. (RA 9700, Sec. 3)

Kini kataw.anan kay (hmm), Sec 5 is about schedule of
implementation. The law says, the distribution shall be implemented
within 10 yrs from effectivity. So when CARL took effect, June 15, 1988,
it was effected for 10 years. Why is it that we are still implementing
CARL till now? Because the law was amended.

How was the law amended? Sec. 5 was not the one amended but SEC
63 which is about funding. So legislators should have amended Sec 5!!!
RA 8542 amended Sec 63 extending implementation for another 10
years. How was it worded?
the amount needed xxx until 2008 (Dec 31)

Worse, when CARL expired on 2008, it was amended extending it further
to June 30, 2009. How? Joint Resolution which was easier.

RA 9700 approved Aug 7 2009 but given retroactive effect. Why? Na.late
pag approve sa Congress.

6657: 10 years upto 1998
8542: upto 2008 interpreted up to Dec. 31
Joint Resolution: From Dec. 31, 2008 to June 30, 2009
9700: approved Aug but they reckoned July 1, 2009 ang effectivity up to
June 15, 2014 (5 yr period)

Next time, you amend correctly!!! May have question on legality!!!
What is the good point of these amendments? Congress was consistent
of its error!

SEC. 6-A. Exception to Retention Limits. - Provincial, city and
municipal government, units acquiring private agricultural lands by
expropriation or other modes of acquisition to be used for actual, direct
and exclusive public purposes, such as roads and bridges, public
markets, school sites, resettlement sites, local government facilities,
public parks and barangay plazas or squares, consistent with the
approved local comprehensive land use plan, shall not be subject to the
five (5)-hectare retention limit under this Section xxx. (RA 9700, Sec. 4)

SIR: That means if you have an agricultural land, the landowner will
choose an area which the LGU will use for public purposes, the
landowner cannot use his right of retention to prevent the LGU from
exercising its right to expropriate.
- REASON: Public purposes such as road, bridges, public
market, school sites, resettlement sites, local government
facilities, public parks and barangay plazas or squares
- So what the landowner can do is choose another area. That is
if it is consistent with the comprehensive land use of the LGU.

Sec. 10. Exemptions and Exclusions from coverage of CARL
(a) Lands ADE used for parks, wildlife, forest reserves,
reforestation, fish sanctuaries and breeding grounds,
watersheds and mangroves (exempt);
- You will note, jurisdiction here lies with DENR
- Example: agricultural lands all the way to balamban
(watershed area), exempted from CARP because it is for a
different purpose
(b) private lands ADE used for prawn farms and fishponds
(exempt)
- You have RA 7881, that exempts it from the coverage during
the time of Ramos
(c) lands ADE used and found to be necessary for national
defense, school sites and campuses including
experimental farm stations, seeds and seedlings
research, church sites and convents, mosque sites,
communal burial grounds and cemeteries, penal
colonies and farms and all lands with 18% slope and
over (exempt)
- Very interesting (daw), Why? (a) and (b), you have the
qualifying words ADE, which is used under letter (b) and
which is also used under letter (c) BUT, there is an additional
phrase: found to be necessary. And this was tested in the
case of Central Mindanao. WHY? (go to Central Mindanao
Case)
- experimental farm stations, seeds and seedlings research
why exempted? For agricultural production
- church sites and convents, mosque sites freedom of
religion
SIR: reminded me of Estrada vs. Escritor
There is an allowable accommodation for religion under
CERTAIN circumstances this is part of the
accommodation
- Last part is: lands with 18 degrees slope and over bakilid
au (exempted) WHY? Because of possible soil erosion

DAR ADMINISTRATIVE ORDER NO. 06-06

SECTION 3. Qualifications of Children-Awardees. The child of a
landowner whose landholding is subject of acquisition and distribution
under the CARP may be awarded and given preference in the distribution
of said lands if he/she meets all of the following criteria: DaCTcA

3.1 Filipino citizen;

3.2 At least fifteen (15) years of age; and

34

3.3 Actual tillers or one directly managing the farm as of June 15,
1988 up to the time of the conduct of field investigation of the
landholding under CARP. Direct management shall refer to the
cultivation of the land through personal supervision under the system of
labor administration. It shall be interpreted along the lines of farm
management (this one is more difficult) as an actual major activity
being performed by the landowner's child from which he/she derives
his/her primary source of income.

SECTION 4. Rights and Obligations. The children-awardees shall
have the following rights and obligations:

4.1 All children-awardees shall exercise diligence in the use,
cultivation and maintenance of the land including the improvements
thereon. Unauthorized sale of the land, or negligence or misuse of the
land and support extended to children-awardees, and other violations
under existing guidelines shall be grounds for the forfeiture of their right
as such;

4.2 Lands awarded to qualified children of landowners may not be
sold, transferred or conveyed except through hereditary succession or to
the government, or to the LBP, or to other qualified beneficiaries for a
period of ten (10) years; Provided, however, that the children or the
spouse of the transferor shall have a right to repurchase the land from
the government or the LBP within a period of two (2) years from the
date of transfer; and
4.3 The children-awardees may avail of any support services
being provided by the government in agrarian reform areas.

Exemptions from coverage (Section 10)

Sec. 10. Exemptions and Exclusions from coverage of CARL
(a) Lands ADE used for parks, wildlife, forest reserves, reforestation, fish
sanctuaries and breeding grounds, watersheds and mangroves (exempt);
(b) private lands ADE used for prawn farms and fishponds (exempt)
(c) lands ADE used and found to be necessary for national defense,
school sites and campuses including experimental farm stations, seeds
and seedlings research, church sites and convents, mosque sites,
communal burial grounds and cemeteries, penal colonies and farms and
all lands with 18% slope and over (exempt)

CENTRAL MINDANAO v. DARAB
The subject lands are exempted because they are actually,
directly & exclusively used and found necessary for school site
and campus, including experimental farm stations for
educational purposes and for establishing seed and seeding
research
The construction of DARAB in Section 10 restricting the land
area of CMU to its present needs overlooked the significant
factor it growth of a university in years to come. By the nature
of CMU, which is a school established to promote agriculture &
industry, the need for vast tract of agriculture land for future
programs of expansion is obvious.
While portion of CMU land was leased by Phil. Packing
Corp.(now Del Monte), the agreement was prior to CARL &
was directly connected to the purpose & objectives of CMU as
educational institution
As to determination of when and what lands are found to be
necessary for use of CMU, school is in best position to resolve
& answer the question. DARAB & CA have no right to
substitute unless it is manifest that CMU has no real need for
land.

- one part used for school and campus site
- another part not used, part is leased to Del Monte Phil.
Packing Co.
- Central Mindanao is an agricultural school
- SC: did not use the phrase found to be necessary, but
impliedly it was referring to it. Because even if that portion of
land was not used, if it was found to be necessary for future
expansion, it is to be exempted from coverage.
- QUESTION: who will determine/decide when and what lands
are found to be necessary? SC: it is the school and the only
exception is if it is manifest that CMU has no real need for the
land. (but who will admit that??)

Atlas Fertilizer Corp. vs. Secretary of DAR, 274 SCRA 30
Facts:
Petitioners are engaged in the aquaculture industry utilizing
fishponds and prawn farms. They question Sections 3[b], 11, 13, 6[d],
17 and 32 of RA 6657 as unconstitutional because they extend the
agrarian reform to aquaculture lands even as Sec. 4, Art. 13 of the
Constitution limits agrarian reform only to agricultural lands.
Held:
The Court ruled that provisions of RA 7881 expressly states that fishpond
and prawn farms are excluded from the coverage of CARL. Thus, petition
to question the constitutionality of some portion of the Comprehensive
Agrarian Reform Law is moot and academic with the passage of RA
7881.

Atlas Fertilizer v. Sec.
Atlas engaged in the aquaculture industry utilizing fishponds
and prawn farms; challenged RA 6657 which coverage lands
devoted to the aquaculture industry, particularly fishponds and
prawn farms.
SC:
R.A. No. 7881 expressly state that fishponds and prawn farms
are excluded from the coverage of CARL. In view of the foregoing, the
question concerning the constitutionality of the assailed provisions has
become moot and academic with the passage of R.A. No. 7881

Sanchez v. Marin
Issue:
Whether the subject fishpond is exempted/excluded from the
coverage of the Comprehensive Agrarian Reform Program of the
government by virtue of the amendments introduced by R.A. No. 7881 to
R.A. No. 6657

SC:
Section 2 of Republic Act No. 7881 amended Section 10 of
Republic Act No. 6657 by expressly exempting/excluding private lands
actually, directly and exclusively used for prawn farms and fishponds
from the coverage of the CARL.

Republic vs. CA, 342 SCRA 189
Facts:
Parcels of land in Jala-Jala, Rizal was covered and has a tax
declaration classifying the said land as agricultural. The DAR then issued
a Notice of Coverage of the subject parcels of land under compulsory
acquisition pursuant to Section 7, Chapter II of RA 6657.
Private respondent corporation filed with the DAR office an application
for exemption of the land from agrarian reform but the same was
denied.
The CA reversed the DAR orders declaring those portions of the land of
the petitioner which are mountainous and residential to be exempt from
the CARP.
DAR then appealed to SC contending and claiming that the subject
properties have already been classified as agricultural based on the tax
declaration and therefore is covered by CARL.

Held:
RA 6657 (CARL) covers all private and agricultural land. Agricultural
lands are land devoted for agricultural activity and not classified as
minerals, forest, residential commercial or industrial
No law or jurisprudence holds that the land classification embodied in
the tax declarations is conclusive and final nor would proscribe any
further inquiry. The DAR administrative order no.6 lists the other
35

documents, aside from tax declaration, that must be submitted when
applying for exception from CARP. The classification made by the Land
Regulatory Board outweighed the classification stated in the tax
declaration.

REPUBLIC v. CA
Tax declaration classified subject land as agricultural. DAR issued notice
of coverage & owner applied for exemption. Application was denied and
on appeal the Court of Appeals created a commission to conduct ocular
inspection and survey the land. Later, based on the report submitted by
the commission, the Court of Appeals reversed the Order of the DAR and
exempted the lands from CARL. Republic contends that tax declaration
classified it as agriculture & which cannot be altered by mere ocular
inspection.
SC: There is no law/jurisprudence that land classification in tax
declaration is conclusive; tax declaration is clearly not sole basis of
classification of land. SC gave credence to commissions report. Based on
their report, it was found that the land use map submitted by private
respondent was an appropriate document consistent with the existing
land use. It was confirmed that the lands are not wholly agricultural as
they consist of mountainous area with an average of 28% slope. The
CARL has further provided that all lands with 18% slope and over except
those already developed shall be exempt from the coverage of CARL.

Sta. Rosa Realty Devt Corp. vs. CA, 367 SCRA 175
Facts:
Petitioner Sta. Rosa Realty Development Corporation was the
registered owner of two parcels of land at Cabuyao, Laguna. According
to the petitioner, the parcels of land are watersheds, which provide clean
potable water to the Canlubang community, and thet 90% light
industries are now located in the area. Thus, praying for the exemption
of the said parcels of land for the compulsory acquisition under CARP.
Held:
The disputed land is classified as PARK and subsequent
studies and survey showed that the parcel of land in question forms a
vital part of a watershed. Article 10 of RA 6657 expressly states that
Lands actually, directly and exclusively used for parks, wildlife, forest
reserves, reforestation, fish sanctuaries and breeding grounds,
watersheds and mangroves shall be exempt from the coverage of this
Act.
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 18% and over, which exempted the land from the
coverage of CARL. R. A. No. 6657, Section 10, provides:
"Section 10. Exemptions and Exclusions. xxx..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.

NICORP MANAGEMENT AND DEVELOPMENT CORPORATION vs.
LEONIDA DE LEON
Facts:
On August 26, 2004, respondent filed a complaint before the Office of
the Provincial Agrarian Reform Adjudicator (PARAD) of Region IV-
Province of Cavite, praying that petitioners Salvador R. Lim and/or
NICORP Management and Development Corporation (NICORP) be
ordered to respect her tenancy rights over a parcel of land located in
Barangay Mambog III, Bacoor, Cavite, registered under TCT No. T-
72669 in the name of Leoncia De Leon and Susana De Leon Loppacher
(De Leon sisters), who were likewise impleaded as parties-defendants in
the suit.

Respondent alleged that she was the actual tiller and cultivator of the
land since time immemorial with full knowledge and consent of the
owners, who were her sisters-in-law; that sometime in 2004, petitioners
circulated rumors that they have purchased the property from the De
Leon sisters; that petitioners ignored respondent's requests to show
proof of their alleged ownership; that on August 12, 2004, petitioners
entered the land and uprooted and destroyed the rice planted on the
land and graded portions of the land with the use of heavy equipment;
that the incident was reported to the Municipal Agrarian Reform Office
(MARO) which issued a Cease and Desist Order 5 but to no avail.

Respondent thus prayed that petitioners be ordered to respect her
tenancy rights over the land; restore the land to its original condition and
not to convert the same to non-agricultural use; that any act of
disposition of the land to any other person be declared null and void
because as a tenant, she allegedly had a right of pre-emption or
redemption over the land.

Petitioner Lim denied that respondent was a tenant of the subject
property under the Comprehensive Agrarian Reform Program (CARP). He
alleged that respondent is a septuagenarian who is no longer physically
capable of tilling the land; that the MARO issued a certification 7 that the
land had no registered tenant; that respondent could not be regarded as
a landless tiller under the CARP because she owns and resides in the
property adjacent to the subject land which she acquired through
inheritance; that an Affidavit of Non-Tenancy 8 was executed by the De
Leon sisters when they sold the property to him. DTIaCS

Moreover, Lim claimed that respondent and her family surreptitiously
entered the subject land and planted a few crops to pass themselves off
as cultivators thereof; that respondent tried to negotiate with petitioner
Lim for the sale of the land to her, as the latter was interested in
entering into a joint venture with another residential developer, which
shows that respondent has sufficient resources and cannot be a
beneficiary under the CARP; that the land is no longer classified as
agricultural and could not thus be covered by the CARP. Per certification
issued by the Office of the Municipal Planning and Development
Coordinator of Bacoor, Cavite, the land is classified as residential
pursuant to a Comprehensive Land Use Plan approved by the
Sangguniang Panlalawigan.

Issue:
Whether or not the land is exempted.

Held:
In the instant case, there is no substantial evidence to support the
appellate court's conclusion that respondent is a bona fide tenant on the
subject property. Respondent failed to prove the third and sixth elements
cited above. It was not shown that the De Leon sisters consented to a
tenancy relationship with respondent who was their sister-in-law; or that
the De Leon sisters received any share in the harvests of the land from
respondent or that the latter delivered a proportionate share of the
harvest to the landowners pursuant to a tenancy relationship.

The affidavits did not mention at all that the De Leon sisters received a
portion of the harvests or that respondent delivered the same to her
sisters-in-law. The affidavits failed to disclose the circumstances or
details of the alleged harvest sharing; it merely stated that the affiants
have known respondent to be the cultivator of the land since time
immemorial. It cannot therefore be deemed as evidence of harvest
sharing.

That respondent was allowed to cultivate the property without
opposition, does not mean that the De Leon sisters impliedly recognized
the existence of a leasehold relation with respondent. Occupancy and
continued possession of the land will not ipso facto make one a de jure
tenant.

Finally, the sale of the subject land to petitioners did not violate Sections
65 33 and 73 34 (c) of R.A. No. 6657. There was no illegal conversion of
the land because Sec. 65 applies only to lands which were covered by
the CARP, i.e., those lands beyond the five-hectare retention limit
allowed to landowners under the law, which were distributed to farmers-
beneficiaries. In the instant case, it was not shown that the subject land
was covered by the CARP. Neither was it shown that the sale was made
to circumvent the application of R.A. 6657 or aimed at dispossessing
tenants of the land that they till
36

The evidence that was mentioned by the SC was a letter. In this letter, it
was found that there was no tenancy relationship, because of the use of
the word kasama. The word kasama would be taken in varying context,
not necessarily in relation to agricultural leasehold agreement. It was not
also clear the word kasama referred to the tenant.

(Sec. 11) : COMMERCIAL FARMS
Commercial farms private agricultural lands devoted to saltbeds, fruit
farms, orchards, vegetable and cut-flower farms and cacao, coffee and
rubber plantations. They are subject to compulsory acquisition and
distribution after 10 years from effectivity.

SIR: I think Del Monte falls under this classification. Im not sure.

LUZ FARMS
+ Sec. II which includes private agricultural land devoted to
commercial livestock, poultry & swine raising in definition of
commercial farms is invalid.

Adm. Order #01 (2004): rules & regulations governing exclusion of
agricultural land used for cattle raising from CARP. Citing Luz Farms case
private agricultural land or portions thereof actually, exclusively &directly
used for cattle raising as of 15 June 1988 shall be excluded. Exclusion
shall be granted only upon proof of AED prior to 15 June 1988 &
continuously utilized for such purpose up to application. Any act to
change or convert ; w/ intent to avoid CARP,shall be invalid. Only the
grazing area & portions of property required for infrastructure necessary
for cattle raising shall be considered for exclusion

Why is there special treatment to commercial farms? Because of possible
effect to company and distribution of lands to farmer beneficiaries, basin
ug mawagtang and kanindot sa yuta na dili unta i-subdivide or i-
distribute. Agricultural production can be better if they are not
distributed or are intact as a whole.

For commercial farms, there is a suspension of 10 years sa pag-
implement. And there are alternative methods available to commercial
farms other than distribution of lands.

DAR A.O #9, S of 1998 allows commercial farms certain options,
subject to approval of DAR & workers: (aside from voluntary &
compulsory coverage)

CLOAs are issued - joint venture
in name of cooperative - growership agreement
of workers - lease back
- direct payment

Please note: in any of these methods, ang yuta ma.adto gihapon sa
farmer beneficiaries, dili lang i-distribute. Intact ang yuta, but the former
landowner can participate in this method.
- For instance, joint venture: kinsa ang mag.joint venture? Ang
farmer beneficiary and former landowner
Beneficiaries will contribute the use of the land, the
investor furnishing the capital and technology.
Note: there has to be approval from DAR
- Lease-back: an owner of the land will now rent his own land
from the farmer beneficiary
Lease may not exceed 10 years. There is a least rental
Needs approval of DAR
- Growership arrangements: magsabot sila daan na ug
mag.harvest na gani, ako ang mu.palit sa inyohang products
To be approved by DAR
- Direct payment scheme: if they can agree na ang property will
have to be transferred to the farmer beneficiary and the
farmer beneficiaries will be paying the landowner for the land.
To be approved by DAR
According to DAR, it requires that CLOA be issued
collectively or under co-ownership under the direct
payment scheme

*NOTE: Former landowner shall be given priority with respect to these
methods.
Contracts are reviewed by DAR Support Services to be submitted to the
Provincial Agrarian Reform Coordinating Committee (PARCCOM) and to
be endorsed to PARC. PARC is the Presidential Agrarian Reform Council
headed by the President of the Philippines.

Please note: these are not the only methods under CARP. Another is the:
- Stock distribution option: referring to hacienda Luisita
- For how many years, the SDO was perfectly managed, it was
a good method until when the Presidential Agrarian Reform
Council headed by GMA revoked the SDO on the ground that
among others, it failed to alleviate the conditions of the
farmer beneficiaries. And which revocation was upheld by the
SC.
- Right now, the lands are being distributed to farmer
beneficiaries consistent with the ruling of the Court.

DAR vs. Sutton, et al., G.R. No. 162070, October 19, 2005
DAR issued A.O. No. 9 to limit the area of livestock farm that may be
retained by a landowner pursuant to its mandate to place all public and
private agricultural lands under the coverage of agrarian reform.

Issue:
The constitutionality of DAR A.O. No. 9, series of 1993.

Held:
Petitioner DAR has no power to regulate livestock farms which have
been exempted by the Constitution from the coverage of agrarian
reform. It has exceeded its power in issuing the assailed A.O.
The fundamental rule in administrative law is that, to be valid,
administrative rules and regulations must be issued by authority of a law
and must not contravene the provisions of the Constitution. The rule-
making power of an administrative agency may not be used to abridge
the authority given to it by Congress or by the Constitution. Nor can it
be used to enlarge the power of the administrative agency beyond the
scope intended. Constitutional and statutory provisions control with
respect to what rules and regulations may be promulgated by
administrative agencies and the scope of their regulations In the case at
bar, we find that the impugned A.O. is invalid as it contravenes the
Constitution. The A.O. sought to regulate livestock farms by including
them in the coverage of agrarian reform and prescribing a maximum
retention limit for their ownership. However the deliberations of the
1987 Constitutional Commission show a clear intent to exclude, inter alia,
all lands exclusively devoted to livestock, swine and poultry- raising.
The Court clarified in the Luz Farms case that livestock, swine and
poultry-raising are industrial activities and do not fall within the definition
of agriculture or agricultural activity. The raising of livestock, swine
and poultry is different from crop or tree farming. It is an industrial, not
an agricultural, activity.

DAR v. SUTTON :
Land devoted to cow & calf breeding. Lands under VOS
before CARP. After CARP & Luz Farms case, Sutton filed withdrawal of
VOS. DAR issued A.O #9 (1993) which provide that only portions of land
used for raising of livestock, poultry & swine shall be excluded. DAR
partially exempted portion but ordered acquisition the rest.
SC: AO is invalid as it contravene Constitution since livestock ,
swine/poultry raising do not fall under agriculture & agricultural
activity

DAR Adm. Order No. 7-2008
Policy Guidelines:
1. Private agricultural lands or portions therof actually, directly or
exclusively used for livestock purposes other than agricultural like cattle
raising as of june 15, 1988 and continuously and exclusively utilized or
37

devoted for such purpose up until the time of inventory shall be excluded
from CARP coverage.
2. Conversely, landholdings or any portions thereof not actually, directly
and exclusively used for livestock raising are subject to CARP coverage if
one or more of the following conditions apply:
2.1 if there is agricultural activity in the area, i.e cultivation of the soil,
planting of crops, growing of fruit trees, including the harvesting of such
products, and other farm activities and practices, whether done by a
natural or juridical person and regardless of the final use or destination
of such agricultural products
2.2 the land is suitable for agriculture and it is presently occupied and
tilled by farmer/s.
5. in case of any of the conditions under items 2.1 and 2.2 are evident,
the PARO shall immediately proceed with the issuance of NOTICE of
COVERAGE on the subject landholding or portions thereof
8. any act of the landowner to change or convert his agricultural land for
livestock raising shall not affect the coverage of his landholdings under
CARP. Any diversification or change in the agricultural use of the
landholdings, or shift from crop production to livestock raising shall be
subject to the existing guidelines on land use conversion.

Adm. Order #7 (2008)
(Guidelines per Sutton Case (livestock raising)
Lands ADE used for livestock like cattle raising as of 15 June
1988 & continuously devoted shall be excluded.
Those not ADE are subject to CARP provided that the
agricultural activity in land is suitable for agriculture presently
tilled by farmers

Chapter III (IMPROVEMENT OF TENURIAL & LABOR RELATION)

WHAT ARE THE WAYS IN DISTRIBUTING LANDS TO QUALIFIED
FARMERS?
1. Compulsory acquisition (Sec.16)
2. Voluntary offer to sell/voluntary land transfer
(Sec.20)
3. Non-land transfer schemes stock distribution
option(SDO); production & profit sharing (PPS)- Sec.
13/32; leasehold operation(Sec.12)

In the case of Hacienda Luisita, CJ Corona was the only one who gave a
dissenting opinion because remember, in the decision of Hacienda
Luisita, while the SC revoked the Stock Distribution Program, the SC
used the Operative Fact Doctrine. Even if the program is null and void,
using that doctrine, we have the consult the farmers whether they would
want to remain as stockholders or they would want the land distributed.
- CJ Corona dissented saying Sec 31 is void because with
respect to agrarian reform, it is only distribution, there are no
other ways.

Leasehold Operation: (We can understand because) Under sec. 6, if the
area chosen by the landowner is tenanted, and the tenant chooses to
remain on the land. That is a choice personal to the tenant

SDO: different scheme. Thats why some authors are saying, the land
reform of the Philippines is very different:
1. Other asian countries only have 3 hectare retention limit, in
the Phil, why 5?
2. Why do have an SDO as an option?
There is no evidence to prove that this is an
accommodation in favor of Hacienda Luisita during the
time of Aquino. At the same time, there is no proof that
the revocation by the PARC of the program of Hacienda
Luisita headed by GMA was also as a defense? (dili
maklaro seri) against Aquino

Take note: VOS, there is a cut-off date under RA 9700. (Right now you
cannot avail of this)
- Without any notice from DAR, the landowner proposes to the
government.

VLT is not anymore an option under the present law (RA 9700)
- VLT is an option by the landowner that after receiving the
notice of acquisition from DAR, the landowner offers.

Under RA 9700, what will remain is COMPULSORY ACQUISITION.

Note: That is consistent with the thrust of the government, that by 2014,
everything should have been offered compulsorily, without waiting
whether the landowner will offer or not.

Under Sec 12, DAR is mandated to determine and fix the lease rentals.
And this is shown in Admin Order No. 02-06.

DAR Adm. Order No. 2-06

RA 6389 automatically converted share tenancy throughout the country
into agricultural leasehold relationship
1. abolition of share tenancy now covers all agricultural landholdings
without exceptions
2. the conversion of share tenancy into leasehold is mandated by law.
3. All share-crop tenants were automatically converted into agricultural
lessees as of june 15, 1988 whether or not a leasehold agreement has
been executed
4. Leaseholders security of tenure shall be respected and guaranteed.

IV. GOVERNING POLICIES AND PRINCIPLES
Pursuant to Section 12 of R.A. No. 6657, and in order to fully implement
the provisions of R.A. No. 3844, as amended, on agricultural leasehold,
the following policies and principles are hereby issued:
1. Agricultural leasehold shall be based on a tenancy
relationship. The following are essential elements of agricultural
tenancy:
1.1. The parties are the landholder and the tenant;
1.2. The object of the relationship is an agricultural
land;
1.3. There is consent freely given either orally or in
writing, express or implied;
1.4. The purpose of the relationship is agricultural
production;
1.5. There is personal cultivation;
1.6. There is consideration given to the lessor either in
a form of share of the harvest or payment of fixed
amount in money or produce to or both.
2. Agricultural leasehold relation shall not be extinguished
by mere expiration of the term of period in a leasehold contract
nor by the sale, alienation or transfer of the legal possession of
the land. In case the agricultural lessor sells, alienates or
transfers the legal possession of the landholding, purchaser or
transferee thereof shall be subrogated to the rights and
substituted to the obligations of the agricultural lessor as
provided for under Sec. 10, R.A. 3844, as amended.
xxx
4. The consideration for the lease shall not be more than
the equivalent of 25% of the average normal harvest (ANH)
during the three (3) agricultural years immediately preceding the
date the lease was established. If the land has been cultivated
for less than 3 years, the initial consideration shall be based on
the average normal harvest of the preceding year/s when the
land was actually cultivated.

If we talk about leasehold, and there is a determination by DAR on the
lease rentals, the perfect scenario is: there has to be a document
showing the agreement on leasehold between the landowner and the
lessee-tenant.

If you have a document, the tenant can have it annotated, registered
with the registry of deeds and the law itself provides this should be free
from payment of all fees and services.
38

- point of registration: protect the right of the lessee-tenant, so
that any prospective buyer may be cautioned by simply
looking at the title itself that there is a leasehold relationship
involving that parcel of land.

But even without the document, under AO 02-06, leasehold relation shall
not be extinguished by expiration of term, by sale, in case of alienation,
purchaser-transferee shall be subrogated to rights obligations of
tenancy.

RA 6657 mandates Dar to determine the fix rentals within retained areas
and areas not yet acquired for agrarian reform
- Farmer has a right to elect whether to become a farmer beneficiary or
a leaseholder in the retention are of the landholder.

Sec.12 of 6657 mandates DAR to determine & fix the lease rentals within
the retained areas and areas not yet acquired.

Sec. 6 of 6657 recognizes the right of farmer to elect whether farmer-
beneficiary OR leaseholds in retained area.

Sec.67 of 6657 directs RD to register patents, title & documents required
for implementation of CARP
O Pursuant to DARs mandate to protect the rights & improve
tenurial & economic status of farmers in tenanted lands, DAR
issued AO 02-06(REVISED RULES & PROCEDURES
GOVERNING LEASEHOLD IMPLEMENTATION IN
TENANTED AGRICULTURAL LANDS):
-Leasehold is based on tenancy relationship (repeat 6
requisites)
-Leasehold relation shall not be extinguished by expiration at
term nor by sale. In case of alienation, purchaser/transferee
shall be subjugated to rights/obligation of lessor.
- specific provision on the consideration to be given to the
lessor which can either be in a form of share of harvest or
payment of money
-DARAB has jurisdiction to cancel leasehold contract. Why
DARAB?
- DARAB exercises quasi-judicial powers. With
respect to quasi-judicial powers, Leasehold contract
involves rights, obligations and others terms of the
contract
-The consideration of lease shall not be more than 25% of
average normal harvest during 3 agri years
-AO 02-06 states, among others, the rights & obligations of
lessor/lessee.

CHAPTER IV REGISTRATION
O Sec. 14 & 15 require the registration of landowners &
beneficiaries w/ DAR. Purpose is to establish databank &
identify actual famer-beneficiaries.

Insofar as beneficiaries are concerned, registration will determine if you
have a standing to intervene in a case. Enunciated in the case of Fortich
vs. Corona:

Fortich, et al. vs. Corona, et al., G.R. 131457, August 19, 1999
This case involves a 144-hectare land located at San Vicente,
Sumilao, Bukidnon, owned by the Norberto Quisumbing, Sr. Management
and Development Corporation (NQSRMDC), one of the petitioners. The
property is covered by a Transfer Certificate of Title No. 14371
3
of the
Registry of Deeds of the Province of Bukidnon.
In 1984, the land was leased as a pineapple plantation to the
Philippine Packing Corporation, now Del Monte Philippines, Inc. (DMPI),
a multinational corporation, for a period of ten (10) years under the Crop
Producer and Grower's Agreement duly annotated in the certificate of
title. The lease expired in April, 1994.
In October, 1991, during the existence of the lease, the
Department of Agrarian Reform (DAR) placed the entire 144-hectare
property under compulsory acquisition and assessed the land value at
P2.38 million.
4

NQSRMDC resisted the DAR's action. In February, 1992, it
sought and was granted by the DAR Adjudication Board (DARAB),
through its Provincial Agrarian Reform Adjudicator (PARAD) in DARAB
Case No. X-576, a writ of prohibition with preliminary injunction which
ordered the DAR Region X Director, the Provincial Agrarian Reform
Officer (PARO) of Bukidnon, the Municipal Agrarian Reform Office
(MARO) of Sumilao, Bukidnon, the Land Bank of the Philippines (Land
Bank), and their authorized representatives "to desist from pursuing any
activity or activities" concerning the subject land "until further orders."
5

On November 7, 1997, the Office of the President resolved the
strikers' protest by issuing the so-called "Win/Win" Resolution penned by
then Deputy Executive Secretary Renato C. Corona
In seeking the nullification of the "Win-Win" Resolution, the
petitioners claim that the Office of the President was prompted to issue
the said resolution "after a very well-managed hunger strike led by fake
farmer-beneficiary Linda Ligmon succeeded in pressuring and/or
politically blackmailing the Office of the President to come up with this
purely political decision to appease the 'farmers,' by reviving and
modifying the Decision of 29 March 1996 which has been declared final
and executory in an Order of 23 June 1997.
Now to the main issue of whether the final and executory
Decision dated March 29, 1996 can still be substantially modified by the
"Win-Win" Resolution.

We rule in the negative.

The rules and regulations governing appeals to the Office of
the President of the Philippines are embodied in Administrative Order No.
18. Section 7 thereof provides:
Sec. 7. Decisions/resolutions/orders of the Office of
the President shall, except as otherwise provided for
by special laws, become final after the lapse of
fifteen (15) days from receipt of a copy thereof by
the parties, unless a motion for reconsideration
thereof is filed within such period.
Only one motion for reconsideration by any one
party shall be allowed and entertained, save in
exceptionally meritorious cases. (Emphasis ours).
It is further provided for in Section 9 that "The Rules of Court
shall apply in a suppletory character whenever practicable.

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

39

Fortich vs. Corona : intervenors claimed that they are farmworkers &
so intervened in case.
SC: There is no ruling yet from DAR whether intervenors are
beneficiaries, so they have no standing yet to intervene in the case.
O DAR safeguards the list of ARB & provide IDs as proof of being
bonafide beneficiaries
O DARAB has jurisdiction to disqualify an ARB.

Concha vs. Rubio: Not a dispute between LO and tenant. Fight among
tenants
- question: who among them should be considered qualified to become
beneficiaries over a portion of land?
- who determines who is qualified? DAR specifically MARO
- although SC said in this case that it is the Sec. of DAR through the
authorized offices
- What was the finding of MARO?
- when he was talking about respondents, he was talking
about the parties who were not considered qualified. Why were they not
qualified? According to the MARO they:
-refused to sign the form
-already given disturbance compensation
-Respondents: we returned the money to the
landowners
-But MARO found that they used the money in
building their houses in the lot given to them
-executed the document sinumpaang salaysay that they
already abandoned the landholding in question
-As a matter of principle, the finding of the MARO is to be accorded
respect unless there is a showing of abuse of authority.

CHAPTER V LAND ACQUISITION

Landlessness is acknowledged as the core problem in the rural
areas and the root cause of peasant unrest.
In order to hasten the implementation of the program, the
Department of Agrarian Reform has made compulsory
acquisition the priority mode of land acquisition. To the same
end, the law provides for the steps in acquiring private lands
through administrative instead of judicial proceedings. This
procedure is allowed provided the requirements of due process
as to notice and hearing are complied with.
Compulsory acquisition may be defined as the mandatory
acquisition of agricultural lands including facilities and
improvements necessary for agricultural production, as may be
appropriate, for distribution to qualified beneficiaries upon
payment of just compensation.
The Notice of Coverage (NOC) commences the compulsory
acquisition of private agricultural lands coverable under the
Comprehensive Agrarian Reform Program (CARP). Along the
various phases of the CARP proceedings, the process stalls
because of Land Owner (LO) resistance, most of whom invoke
the ground of lack of notice or non-observance of due process
in attacking the proceedings.

Just to show us the amendment by RA 9700, the words added under
section 16. AND DISTRIBUTION

SECTION 6.The title of Section 16 of Republic Act No. 6657, as
amended, is hereby further amended to read as follows:
"SEC. 16.Procedure for Acquisition and Distribution of
Private Lands."
Why was this added? Because Sec. 16 doesnt only talk about
acquisition, it also involves distribution of lands.

LAND ACQUISITION

SEC. 16. Procedure for Acquisition of Private Lands.- For purposes of
acquisition of private lands, the following procedures shall be followed:

(a) After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the land to the
owners thereof, by personal delivery or registered mail, and post the
same in a conspicuous place in the municipal building and barangay hall
of the place where the property is located. Said notice shall contain the
offer of the DAR to pay a corresponding value in accordance with the
valuation set forth in Sections 17, 18, and other pertinent provisions
hereof.

But it was not clear in the law about how identification is determined
this was filled up by DAR through an Admin Order.
- talks about notice to acquire: In the case of CONFED vs. DAR, SC
talks about two notices
1. Notice of coverage: More or less Preliminary: WHY?
- because while it notifies that the property shall be placed
under CARP, the landowner is entitled to retention.
- notifies the landowner about the public hearing about the
results of field investigation, land evaluation and other
pertinent matters
- the landowner will be informed that the field investigation of
his landholding shall be conducted. After that comes the
notice of acquisition.
2. Notice of acquisition:
- the area subject of compulsory acquisition has to be stated.
WHY? It is based already on the field investigation
- plus the amount of just compensation offered by DAR

How is the notice to be done? Personal delivery, registered mail and
posting

Note in the case of CONFED: Notice shall contain the offer of DAR
- OFFER: offer of the government to the landowner as to how much the
government will pay the landowner corresponding to the land to be
acquired.
- Discuss this in relation to par. (e): It is the deposit that is the key to
the immediate possession and issuance of a title

(b) Within thirty (30) days from the date of receipt of written notice by
personal delivery or registered mail, the landowner, his administrator or
representative shall inform the DAR of his acceptance or rejection of the
offer.

(c) If the landowner accepts the offer of the DAR, the LBP shall pay the
landowner the purchase price of the land within thirty (30) days after he
executes and delivers a deed of transfer in favor of the Government and
surrenders the Certificate of Title and other muniments of title.

If landowner accepts no problem
If landowner rejects or fails to reply summary admin proceedings

Take NOTE: the purpose of this is compensation. With respect to just
compensation, RTC has jurisdiction.
Reiterate: there are only 2 instances where RTC has jurisdiction insofar
as CARP is concerned:
1. just compensation
2. criminal offenses
then why is it that the law in par. (d) talks about determination of just
compensation? It was determined by the SC in CONFED, that this
determination is only PRELIMINARY. Meaning that the landowner (as
also shown in par. (f)) can still resort to court IF he disagrees with the
decision referred in par. (d).
- So they bring the matter to court of proper jurisdiction for
the FINAL determination of just compensation.

(d) In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the compensation of
the land by requiring the landowner, the LBP and other interested parties
40

to summit evidence as to the just compensation for the land, within
fifteen (15) days from the 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.

Notice in par. (e), par (d) would give you 30 days to respond. You have
to inform DAR whether you accept or reject it.

(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 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.

How do we know the amount to be deposited? Should it be based on
par. (d) after summary admin proceedings or par. (a) that is contained in
the notice to acquire? CONFED CASE

In real scenario: transfer of title may happen before immediate
possession. Why? It is possible that there is resistance here on the part
of the landowner.
ex. Even if the title is already in the name of the Republic of the
Philippines but DAR cannot take possession because gibutangan ug
guard ang agri land, landowner still actually possesses the land while he
is fighting for the acquisition in court.

Take note here: in normal dealings (voluntary dealings), if you have a
sale of land, the seller will execute the Deed of Sale and give the original
copy (owners duplicate copy) to the buyer, so that the buyer can go to
RD, and be issued a new title in favor of the purchaser. But here it is
different.

1. Under par. (e), Registry of Deeds can cancel the title of the LO
on the basis of the deposit, certification from land bank which
will be annotated to the title and RD will issue a new title in
favor of the Republic of the Philippines.
2. The title is cancelled even without the surrender of the
owners copy
3. RDs copy of the LOs title is cancelled even if the owners copy
is subsisting
Probable in case LO rejects offer or does not reply, he is
still in possession of the title
Advise: do not simply rely on the owners copy, you get
a certified true copy from the RD.
4. RD can cancel and issue under CARL even if there is no
payment of taxes and transfer fees (provided in Sec 66 and 67
below)

(f) Any party who disagrees with the decision may bring the matter to
the court of proper jurisdiction for final determination of just
compensation.

Sec. 16 outlines the procedure for acquisition of private land
O Take note of Sec.16(d) & (e):
(1) practice of having no deed of transfer or conveyance
(2) titles are cancelled w/o owners copy surrendered (in
Torren's System, if there is refusal in involuntary dealings
remedy is file petition in court
(3) RD titles are cancelled while owners copy is subsisting

Sec. 66 (Exemptions from taxes &fees of land transfer)

Sec. 67 (Free Registration of patents, titles & documents required for
implementation of CARP)
Sec. (e) : Once DAR request and LBP makes deposit of initial valuation,
DAR can request RD to cancel title & transfer it to Republic of Phil. So
even if landowners protests valuation, distribution of land will proceed.
CLOAs are issued upon land acquisition: so cancellation of title of
landowner can simultaneously go w/ issuance of CLOA.

In Association of small land owners, SC did not say
automatically. SC said that title and ownership remain w/ LO until full
payment of past conversation.

CONFED vs. DAR
Facts:
Petitioners CONFED, NFSP, UNIFED and PANAYFED claim that their
members own or administer private agricultural lands devoted to
sugarcane. They and their predecessors-in-interest have been planting
sugarcane on their lands allegedly since time immemorial. While their
petition is denominated as one for prohibition and mandamus, the
petitioners likewise seek to nullify paragraphs (d), (e) and (f) of Section
16 5 of Republic Act No. (RA) 6657, otherwise known as the
Comprehensive Agrarian Reform Law. In other words, their arguments,
which will be discussed shortly, are anchored on the proposition that
these provisions are unconstitutional.

They allege the following grounds in support of their petition:

It is the principal contention of the petitioners that, in the exercise by
the State of the power of eminent domain, which in the case of RA 6657
is the acquisition of private lands for distribution to farmer-beneficiaries,
expropriation proceedings, as prescribed in Rule 67 of the Rules of
Court, must be strictly complied with. The petitioners rely on the case of
Visayas Refining Company v. Camus and Paredes 7 decided by the Court
in 1919. In the said case, the Government of the Philippine Islands,
through the Governor-General, instructed the Attorney-General to initiate
condemnation proceedings for the purpose of expropriating a tract of
land containing an area of 1,100,463 square meters to be used for
military and aviation purposes. In compliance therewith, the Attorney-
General filed a complaint with the Court of First Instance (CFI) and
among the defendants impleaded was Visayan Refining Co. which owned
a portion of the property intended to be expropriated. The CFI
provisionally fixed the total value of the subject property at P600,000
and upon payment thereof as deposit, the CFI authorized that the
Government be placed in possession thereof.

Paragraph (e) is assailed by the petitioners as it authorizes the DAR, by
allegedly merely causing the deposit with the Land Bank of the
compensation, to immediately take possession of the property and to
direct the Register of Deeds to cancel the certificate of title of the
landowner without notice to and consent of the latter. The petitioners
contend that, in contrast, under the Civil Code, if the creditor or obligee
refuses to accept the tender of payment, it is the duty of the debtor or
obligor to make consignation of the thing or amount due. Under the Civil
Code, there is no effective payment without valid tender of payment and
consignation in court. 15 The petitioners theorize that, in the same
manner, the DAR cannot be allowed to take possession of the property
of a landowner, by mere deposit of the compensation that it has
summarily fixed under paragraph (e), without having to go to court.

Paragraph (f) is characterized by the petitioners as meaningless and
useless to the landowner. It allegedly compels him to file a case, and in
the process incur costs therefor, for the final determination of just
compensation when, in the meantime, he has already been deprived of
possession of his property and his certificate of title cancelled.

The Respondents' Counter-Arguments

The Land Bank urges the Court to dismiss the petition since the
constitutionality of RA 6657 had already been categorically upheld by the
Court in Association of Small Landowners. Further, some of the grounds
relied upon by the petitioners allege matters that require factual
determination. For example, the allegation that the DAR is subjecting the
sugar lands to the coverage of RA 6657 without first ascertaining
whether there are regular farmworkers therein and whether they are
interested to own, directly or collectively, the land they till, allegedly
requires factual determination. Considering that the Court is not a trier of
41

facts, the Land Bank argues that these matters are better threshed out
in a trial court.

HELD:
DAR's compulsory acquisition procedure is based on Section 16 of RA
6657. It does not, in any way, preclude judicial determination of just
compensation

Contrary to the petitioners' submission that the compulsory acquisition
procedure adopted by the DAR is without legal basis, it is actually based
on Section 16 of RA 6657. Under the said law, there are two modes of
acquisition of private agricultural lands: compulsory and voluntary. The
procedure for compulsory acquisition is that prescribed under Section 16
of RA 6657. TCDcSE

In Roxas & Co., Inc. v. Court of Appeals, 41 the Court painstakingly
outlined the procedure for compulsory acquisition, including the
administrative orders issued by the DAR in relation thereto, in this
manner:

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 land
acquisition to hasten the implementation of the Comprehensive Agrarian
Reform Program (CARP). 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 of 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: EDATSI

1.Update the master list of all agricultural lands covered under the CARP
in his area of responsibility. The master list shall include such information
as required under the attached CARP Master List 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. IEHTaA

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. 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. TCASIH

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: ECTHIA

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
42

include, among others, the area subject of compulsory acquisition, and
the amount of just compensation offered by DAR.

3.Should the landowner accept the DAR's offered value, the BLAD shall
prepare and submit to the Secretary for approval the Order of
Acquisition. However, in case of rejection or non-reply, the DAR
Adjudication Board (DARAB) shall conduct a summary administrative
hearing to determine just compensation, in accordance with the
procedures provided under Administrative Order No. 13, Series of 1989.
Immediately upon receipt of the DARAB's decision on just compensation,
the BLAD shall prepare and submit to the Secretary for approval the
required Order of Acquisition.

4.Upon the landowner's receipt of payment, in case of acceptance, or
upon deposit of payment in the designated bank, in case of rejection or
non-response, the Secretary shall immediately direct the pertinent
Register of Deeds to issue the corresponding Transfer Certificate of Title
(TCT) in the name of the Republic of the Philippines. Once the property
is transferred, the DAR, through the PARO, shall take possession of the
land for redistribution to qualified beneficiaries." AEDCHc

CONFED vs. DAR
O Compulsory Acquisition
O Notice of Acquisition
O First step: identification of the land, the landowners and the
beneficiaries.
O Law is silent
O Administrative Order No. 12, Series of 1989
O Valid implementation , two notices
O DAR A.O. No.12, Series of 1989, amended in 1990 by DAR
A.O. No.9, Series of 1990 and in 1993 by DAR A.O No.1, Series
of 1993

Expropriation in Consti Law: two limitations:
1. Public use 2. Payment of just compensation
SC: In this case, there is no more need to prove public use because this
has been settled in the Constitution when it called for Agrarian Reform.
So there is only one limitation remaining: just compensation.

JUST COMPENSATION
1. What are the factors which the court must rely upon to be able
to determine just compensation? (Sec. 17)
2. When shall we reckon the payment of the determination of
just compensation? Time of ACTUAL taking
But it is different in this case, while the SC has
mentioned about date of taking, but it has been
interpreted at the time of the issuance of the title which
may different.
Actual scenario: actual taking may precede issuance or
vice versa
3. Is the landowner entitled to claim interest?

Last issue is the application of Rule 67:
- sec. 58 and rule 67 talks about appointment of commissioners. When
the case is filed in the RTC: in the law itself, it says MAY appoint, under
rule 67, court SHALL appoint Commissioners for the determination of just
compensation.
- who normally opposes commissioners? BIR, city assessor, provincial
assessor (they are more or less knowledgeable on the aspect of just
compensation)

LBP vs Trinidad
Facts:
Private respondent is the registered owner of a parcel of agricultural land
situated in Sampao, Kapalong, Davao del Norte with an approximate
area of 37.1010 hectares covered by Transfer Certificate of Title No. T-
49200, 14.999 hectares of which was covered by RA No. 6657 through
the Voluntary Offer to Sell (VOS) scheme of the Comprehensive Agrarian
Reform Program (CARP).

Private respondent offered to the Department of Agrarian Reform (DAR)
the price of P2,000,000.00 per hectare for said portion of the land
covered by CARP.

Petitioner Land Bank of the Philippines (LBP) valued and offered as just
compensation for said 14.999 hectares the amount of P1,145,806.06 or
P76,387.57 per hectare. The offer was rejected by private respondent.

In accordance with Section 16 of RA No. 6657, petitioner LBP deposited
for the account of private respondent P1,145,806.06 in cash and in
bonds as provisional compensation for the acquisition of the property.

Thereafter, the DAR Adjudication Board (DARAB), through the Regional
Adjudicator (RARAD) for Region XI conducted summary administrative
proceedings under DARAB Case No. LV-XI-0330-DN-2002 to fix the just
compensation.

On June 26, 2002, the DARAB rendered a decision fixing the
compensation of the property at P10,294,721.00 or P686,319.36 per
hectare.

Petitioner LBP filed a motion for reconsideration of the above decision
but the same was denied on September 4, 2002.

Petitioner LBP filed a petition against private respondent for judicial
determination of just compensation before the Special Agrarian Court,
Regional Trial Court, Branch 2, Tagum City, docketed as DAR Case No.
78-2002, which is the subject of this petition.

Private respondent, on the other hand, filed a similar petition against
DAR before the same Special Agrarian Court docketed as DAR Case No.
79-2002, to which petitioner LBP filed its answer and moved for the
dismissal of the petition for being filed out of time.

Private respondent filed a Motion for Delivery of the Initial Valuation
praying that petitioner LBP be ordered to deposit the DARAB determined
amount of P10,294,721.00 in accordance with the Supreme Court ruling
in "Land Bank of the Philippines vs. Court of Appeals, Pedro L. Yap, Et
Al., G.R. No. 118712, October 6, 1995". EAIcCS

Petitioner LBP filed a Manifestation praying that the amount of the
deposit should only be the initial valuation of the DAR/LBP in the amount
of P1,145,806.06 and not P10,294,721.00 as determined by the DARAB.

On December 12, 2002, public respondent rendered the assailed
resolution ordering petitioner LBP to deposit for release to the private
respondent the DARAB determined just compensation of
P10,294,721.00.

On December 13, 2002, petitioner LBP filed a motion for reconsideration
of the said order to deposit.

On December 17, 2002, private respondent filed a motion to cite Romeo
Fernando Y. Cabanal and Atty. Isagani Cembrano, manager of petitioner
LBP's Agrarian Operations Office in Region XI and its handling lawyer,
respectively, for contempt for failure to comply with the order to deposit.

After the filing of private respondent's comment to the motion for
reconsideration and petitioner LBP's explanation and memorandum to
the motion for reconsideration, public respondent rendered the assailed
resolution dated February 17, 2003, denying petitioner LBP's motion for
reconsideration.

Petitioner LBP filed a motion to admit a second motion for
reconsideration which still remains unacted upon by public respondent.

ISSUE:
The lone issue in this controversy is the correct amount of provisional
compensation which the LBP is required to deposit in the name of the
landowner if the latter rejects the DAR/LBP's offer. Petitioner maintains it
43

should be its initial valuation of the land subject of Voluntary Offer to Sell
(VOS) while respondent claims it pertains to the sum awarded by the
PARAD/RARAD/DARAB in a summary administrative proceeding pending
final determination by the courts.

HELD:
Section 16 of R.A. No. 6657 reads:

(d)In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the compensation for
the land by 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 the 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
cash or in LBP bonds in accordance with this Act, the DAR shall take
Republic of the Philippines. The DAR shall thereafter proceed with the
redistribution of the land to the qualified beneficiaries.

We find the foregoing as a strained interpretation of a simple and clear
enough provision on the procedure governing acquisition of lands under
CARP, whether under the compulsory acquisition or VOS scheme.
Indeed, it would make no sense to mention anything about the
provisional deposit in sub-paragraphs (a) and (b) the landowner is
sent a notice of valuation to which he should reply within a specified
time, and in sub-paragraph (c) when the landowner accepts the offer
of the DAR/LBP as compensation for his land. Sub-paragraph (d)
provides for the consequence of the landowner's rejection of the initial
valuation of his land, that is, the conduct of a summary administrative
proceeding for a preliminary determination by the DARAB through the
PARAD or RARAD, during which the LBP, landowner and other interested
parties are required to submit evidence to aid the DARAB/RARAD/PARAD
in the valuation of the subject land. Sub-paragraph (e), on the other
hand, states the precondition for the State's taking of possession of the
landowner's property and the cancellation of the landowner's title, thus
paving the way for the eventual redistribution of the land to qualified
beneficiaries: payment of the compensation (if the landowner already
accepts the offer of the DAR/LBP) or deposit of the provisional
compensation (if the landowner rejects or fails to respond to the offer of
the DAR/LBP). Indeed, the CARP Law conditions the transfer of
possession and ownership of the land to the government on receipt by
the landowner of the corresponding payment or the deposit of the
compensation in cash or LBP bonds with an accessible bank.

Question was on the correct amount of provisional compensation which
LBP was required to deposit.
-is it the amount stated in par. (a) which is supposed to be contained in
the notice of acquisition?
- or is it the amount based on par. (d) after the conduct of summary
proceedings?
- there is a difference there in actual practice

LBP: says that it is our offer under par. (a) which is P1M only.
Respondent: it is the amount after the summary admin proceeding to be
undertaken by PARAD, RARAD and DARAB which is P10M.
SC: subpar. (e) should be related to subpar (a), (b), and (c) considering
that the taking of possession by the state is the next step after DAR, and
LBP supplied with the notice requirements.

In effect the SC is saying: it is the offer of the LBP that will determine
that that is the correct amount to be deposited not the amount after the
determination of just compensation in a summary administrative
proceeding
- reasoning: if the DAR will wait for the summary admin
proceedings this will hamper land redistribution process
Note that: par (a) precedes over par. (d) on the determination of the
correct amount to be deposited.

Reiterated in the case of Pagayatan.

LBP vs Pagayatan
Facts:

On October 21, 1972, the 3,682.0286-hectare Suntay Estate, consisting
of irrigated/unirrigated rice and corn lands covered by Transfer
Certificate of Title No. T-31(1326) located in the Barangays of Gen.
Emilio Aguinaldo, Sta. Lucia, and San Nicolas in Sablayan, Occidental
Mindoro, was subjected to the operation of Presidential Decree No. 27,
under its Operation Land Transfer (OLT), with the farmer-beneficiaries
declared as owners of the property. However, a 300-hectare portion of
the land was subjected to the Comprehensive Agrarian Reform Program
(CARP) instead of the OLT. Thus, Certificates of Landownership Award
were issued to the farmer-beneficiaries in possession of the land. 5 Such
application of the CARP to the 300-hectare land was later the subject of
a case before the Department of Agrarian Reform Adjudicatory Board
(DARAB), which ruled that the subject land should have been the subject
of OLT instead of CARP. The landowner admitted before the PARAD that
said case was pending with this Court and docketed as G.R. No. 108920,
entitled Federico Suntay v. Court of Appeals.

Meanwhile, the owner of the land remained unpaid for the property.
Thus, Josefina S. Lubrica, in her capacity as assignee of the owner of the
property, Federico Suntay, filed a Petition for Summary Determination of
Just Compensation with the PARAD, docketed as Case No. DCN-0405-
0022-2002. Thereafter, the PARAD issued its Decision dated March 21,
2003, the dispositive portion of which reads: ECSHID

WHEREFORE, judgment is hereby rendered:

1.Fixing the preliminary just compensation for 431.1407 hectare property
at P166,150.00 per hectare or a total of P71,634,027.30.

2.Directing the Land Bank of the Philippines to immediately pay the
aforestated amount to the Petitioner.

3.Directing the DAR to immediately comply with all applicable
requirements so that the subject property may be formally distributed
and turned over to the farmer beneficiaries thereof, in accordance with
the Decision of the DARAB Central in DARAB Case No. 2846.

The LBP then filed a Petition dated March 4, 2004 with the RTC docketed
as Agrarian Case No. 1390, appealing the PARAD Decision. In the
Petition, the LBP argued that because G.R. No. 108920 was pending with
this Court in relation to the 300-hectare land subject of the instant case,
the Petition for Summary Determination of Just Compensation filed
before the PARAD was premature. The LBP argued further that the
PARAD could only make an award of up to PhP5 million only. The
PARAD, therefore, could not award an amount of PhP71,634,027.30. The
LBP also contended that it could not satisfy the demand for payment of
Lubrica, considering that the documents necessary for it to undertake a
preliminary valuation of the property were still with the Department of
Agrarian Reform (DAR).

ISSUE:
What is the proper amount to be deposited under Section 16 of Republic
Act No. 6657? Is it the PARAD/DARAB determined valuation or the
preliminary valuation as determined by the DAR/LBP?

HELD:
The LBP posits that under Sec. 16 (e) of RA 6657, and as espoused in
Land Bank of the Philippines v. Court of Appeals, 18 it is the purchase
price offered by the DAR in its notice of acquisition of the land that must
be deposited in an accessible bank in the name of the landowner before
taking possession of the land, not the valuation of the PARAD.
44

The Court agrees with the LBP.

Conspicuously, there is no mention of the PARAD in the foregoing Sec.
16 (e) when it speaks of "the deposit with an accessible bank designated
by the DAR of the compensation in cash or LBP bonds in accordance
with this Act." Moreover, it is only after the DAR has made its final
determination of the initial valuation of the land that the landowner may
resort to the judicial determination of the just compensation for the land.
Clearly, therefore, it is the initial valuation made by the DAR and LBP
that is contained in the letter-offer to the landowner under Sec. 16 (a),
said valuation of which must be deposited and released to the landowner
prior to taking possession of the property.

It is clear from Sec. 16 of RA 6657 that it is the initial valuation made by
the DAR and the LBP that must be released to the landowner in order for
DAR to take possession of the property. Otherwise stated, Sec. 16 of RA
6657 does not authorize the release of the PARAD's determination of just
compensation for the land which has not yet become final and
executory.

Compensation in cash or in LBP bonds (Section 16)

Payment of cash and bonds otherwise the government will go
bankrupt if all in cash.
Bonds to give the government time to appropriate in the future when
the bonds will mature

VOS (Voluntary offer to sell): under the law, if you make VOS, landowner
is entitled to 5% payment in cash, additional than that provided by law.

Land Bank v. CA
Private respondent challenged the admin order issued by DAR
permitting the opening of trust account by LBP, in lieu of
depositing in cash or in LBP bonds.
SC:
Sec. 16 (e) is explicit that deposit be in cash or in LBP
bonds;
Nowhere does it appear nor can it be inferred that the deposit
can be made in any other form like a trust account;
There was no basis for issuance of order.

WHY? Because the trust account is under the control of the trustee. The
beneficiary-landowner cannot properly use or control the funds when the
funds is supposed to be given due for land owner. not sanctioned by
law

SIR: ila baya ng yuta, gikuha ra sa gobyerno, di pa jud nimo bayaran
ang just compensation niya?

The same with the case of Honeycomb.

Land Bank v. CA
Facts
Private respondents are landowners whose landholdings were acquired
by the DAR and subjected to transfer schemes to qualified beneficiaries
under the Comprehensive Agrarian Reform Law (CARL, Republic Act No.
6657). Aggrieved by the alleged lapses of the DAR and the Landbank
with respect to the valuation and payment of compensation for their land
pursuant to the provisions of RA 6657, private respondents filed with this
Court a Petition for Certiorari and Mandamus with prayer for preliminary
mandatory injunction. Private respondents questioned the validity of DAR
Administrative Order No. 6, Series of 1992 6 and DAR Administrative
Order No. 9, Series of 1990, 7 and sought to compel the DAR to expedite
the pending summary administrative proceedings to finally determine the
just compensation of their properties, and the Landbank to deposit in
cash and bonds the amounts respectively "earmarked," "reserved" and
"deposited in trust accounts" for private respondents, and to allow them
to withdraw the same.

Private respondents argued that Administrative Order No. 9, Series of
1990 was issued without jurisdiction and with grave abuse of discretion
because it permits the opening of trust accounts by the Landbank, in lieu
of depositing in cash or bonds in an accessible bank designated by the
DAR, the compensation for the land before it is taken and the titles are
cancelled as provided under Section 16(e) of RA 6657. 9 Private
respondents also assail the fact that the DAR and the Landbank merely
"earmarked," "deposited in trust" or "reserved" the compensation in their
names as landowners despite the clear mandate that before taking
possession of the property, the compensation must be deposited in cash
or in bonds. 10

Petitioner DAR, however, maintained that Administrative Order No. 9 is a
valid exercise of its rule-making power pursuant to Section 49 of RA
6657. 11 Moreover, the DAR maintained that the issuance of the
"Certificate of Deposit" by the Landbank was a substantial compliance
with Section 16(e) of RA 6657.

ISSUE:
Whether the opening of trust accounts for payment of just compensation
is valid.

HELD:
The contention is untenable. Section 16(e) of RA 6657 provides as
follows:

"SECTION 16.Procedure for Acquisition of Private Lands. . . .

(e)Upon receipt by the landowner of the corresponding payment or, in
cash or in LBP bonds in accordance with this Act, the DAR shall take
Republic of the Philippines. . . ." (Emphasis supplied.)

It is very explicit therefrom that the deposit must be made only in "cash"
or in "LBP bonds." Nowhere does it appear nor can it be inferred that the
deposit can be made in any other form. If it were the intention to include
a "trust account" among the valid modes of deposit, that should have
been made express, or at least, qualifying words ought to have appeared
from which it can be fairly deduced that a "trust account" is allowed. In
sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an
expanded construction of the term "deposit."

LBP vs Honeycomb
Facts:
Honeycomb Farms Corporation (Honeycomb Farms) was the registered
owner of two parcels of agricultural land in Cataingan, Masbate.
The Land Bank of the Philippines (LBP), as the agency vested with the
responsibility of determining the land valuation and compensation for
parcels of land acquired pursuant to the CARL, 6 and using the
guidelines set forth in DAR Administrative Order (AO) No. 17, series of
1989, as amended by DAR AO No. 3, series of 1991, fixed the value of
these parcels of land.

When Honeycomb Farms rejected this valuation for being too low, the
Voluntary Offer to Sell was referred to the DAR Adjudication Board,
Region V, Legaspi City, for a summary determination of the market value
of the properties.

HELD:
As a final point, we have not failed to notice that the LBP in this case
made use of trust accounts to pay Honeycomb Farms. In Land Bank of
the Phil. v. CA, 29 this Court struck down as void DAR Administrative
Circular No. 9, Series of 1990, providing for the opening of trust
accounts in lieu of the deposit in cash or in bonds contemplated in
Section 16 (e) of RA 6657. We said: CSDcTH

It is very explicit . . . [from Section 16(e)] that the deposit must be made
only in "cash" or in "LBP bonds." Nowhere does it appear nor can it be
45

inferred that the deposit can be made in any other form. If it were the
intention to include a "trust account" among the valid modes of deposit,
that should have been made express, or at least, qualifying words ought
to have appeared from which it can be fairly deduced that a "trust
account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA
6657 to warrant an expanded construction of the term "deposit."

xxx xxx xxx

In the present suit, the DAR clearly overstepped the limits of its power to
enact rules and regulations when it issued Administrative Circular No. 9.
There is no basis in allowing the opening of a trust account in behalf of
the landowner as compensation for his property because, as heretofore
discussed, Section 16(e) of RA 6657 is very specific that the deposit
must be made only in "cash" or in "LBP bonds." In the same vein,
petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because
these implementing regulations cannot outweigh the clear provision of
the law. Respondent court therefore did not commit any error in striking
down Administrative Circular No. 9 for being null and void.

Compulsory acquisition and notice requirements (Section 16)

DLR ADMINISTRATIVE ORDER NO. 04-05

PROCEDURES

1. Commencement

1.1. Commencement by the Provincial Agrarian Reform Officer
(PARO) After determination by the Municipal Agrarian Reform Officer
(MARO) of the agricultural landholdings coverable under CARP in his
area of jurisdiction, he shall submit the list of these agricultural
landholdings to the PARO who shall prepare and send, through the
MARO, the NOC (CARP-LA Form No. 7) to the concerned LO.

1.2. Commencement by a party Any person may commence the
proceedings herein by filing a petition for coverage before the
Department of Land Reform (DLR) Central Office (DLRCO), DLR Regional
Office (DLRRO), DLR Provincial Office (DLRPO) or DLR Municipal Office
(DLRMO) of the region/province or municipality where the subject
landholding is located. The DLR office which received the petition for
coverage shall transmit or forward the same to the PARO of the province
where the subject landholding is located. The DLRPO, through the
MARO, shall validate the petition and shall issue the NOC, if warranted.
In the event that the result of the validation/evaluation by the
DLRMO/DLRPO is such that an NOC is not warranted, the DLRPO shall
forward its findings or that of the DLRMO to the DLRRO for evaluation
and issuance of an Order, treating the petition as an Agrarian Law
Implementation (ALI) case.

2. Posting of the NOC

The MARO shall post copies of the NOC for at least seven
(7) days in the bulletin boards or any conspicuous places in the
municipality/city and the barangay where the property is located and
thereafter issue the corresponding Certification of Posting Compliance
(CARP-LA Form No. 5).

3. By Whom the NOC is served

3.1. Upon receipt of a copy of the NOC and upon instruction by the
PARO (CARP-LA Form No. 8), the MARO where the subject landholding is
located or any DLR personnel officially authorized by the PARO shall
cause the service of the NOC to the LO in accordance with these rules.

3.2. If the LO's residence is outside the Philippines or unknown,
the MARO of the place where the subject landholding is located shall
submit a report of such fact or failure to notify the LO through the
regular mode of service to the PARO, and shall request the latter to
cause the publication of the NOC in a newspaper of general circulation.

4. Service of the NOC

4.1. General rule The NOC shall be addressed to and received
by the LO.

4.2. Service upon co-owners In case of co-ownership, the NOC
shall be served upon each and every co-owner, unless one is specifically
authorized to receive for the other co-owners. AHEDaI

4.3. Service upon minors or incompetents When the LO is a
minor, insane or otherwise incompetent, service shall be made upon him
personally and to his legal guardian if he has one, or if none, upon his
guardian ad litem whose appointment shall be applied for by the DLR. In
the case of a minor, service may also be made on his father and/or
mother.

4.4. Service upon entity without juridical personality When the
LOs who are persons associated in an entity without juridical personality
are sued under the name by which they are generally or commonly
known, service may be effected upon all the LOs by serving upon any
one of them, or upon the person in charge of the Office or place of
business maintained in such name. Such service shall not bind
individually any person whose connection with the entity has, upon due
notice, been severed before the proceeding was brought.

4.5. Service upon domestic private juridical entity When the LO
is a corporation, partnership or association organized under the laws of
the Philippines with a juridical personality, service may be made on the
president, managing partner, general manager, corporate secretary,
treasurer, in-house counsel or administrator.

4.6. Service upon LO whose identity or whereabouts is unknown
In any proceeding where the LO is designated as an unknown owner, or
the like, or whenever his whereabouts are unknown and cannot be
ascertained by diligent inquiry, service may be effected upon him by
publication in a newspaper of general circulation in such places and for
such time as the DLR may order.

4.7. Extraterritorial service When the LO does not reside and is
not found in the Philippines, or when the LO ordinarily resides within the
Philippines but is temporarily out of the country, service may be made by
publication in a newspaper of general circulation in such places and for
such time as the DLR may order.

5. Modes of Service:

5.1. Personal Service This is made by handing a copy of the
NOC to the LO in person, or if the LO refuses to receive and sign the
NOC for whatever reason, by tendering the same to him/her.

5.2. Substituted Service If personal service of the NOC cannot
be served directly to the LO within a reasonable time, service may be
made by leaving copies of the NOC at the LO's:

5.2.1. residence with some person of suitable age and discretion
residing therein; or
5.2.2. office or regular place of business with some competent person
in charge thereof.
5.3. Service by Registered Mail if personal or substituted service
is not practicable, service by registered mail will be made to the last
known address of the LO. The registered mail envelope shall be marked
"DELIVER TO ADDRESSEE ONLY" and "RETURN TO SENDER" if
addressee has: MOVED OUT, UNKNOWN ADDRESS, REFUSED TO
ACCEPT OR INSUFFICIENT ADDRESS.
5.4. Service by publication If any of the preceding three (3)
modes of service fails, the NOC will be published once in a newspaper of
general circulation. A "RETURN TO SENDER" stamped on the mailing
envelope will serve as proof that the NOC was not received by the LO.
The publication need not state the entire contents of the NOC but only
the following essential particulars:
46

5.4.1. Complete name/s of the LO/all LOs and last known address, if
available;
5.4.2. Address or location of the subject landholding (barangay,
municipality/city, province);
5.4.3. The number of the Original or Transfer Certificate of Title (OCT
or TCT) or latest Tax Declaration (TD) covering the subject landholding;
5.4.4. A declaration that the Republic of the Philippines shall cover the
subject landholding under CARP;
5.4.5. A reasonable period of thirty (30) days from publication date
within which the LO must file a response to the NOC, with a warning that
failure to do so within the period shall mean waiver of the right/privilege
to: apply for exemption/exclusion or choose the retention area;
nominate child/ren as preferred beneficiaries or submit evidence for
determining just compensation.
6. Proof of Service

6.1 Personal or substituted service The proof of service of the
NOC shall consist of:

6.1.1. Written admission of the LO served, or;
6.1.2. Official Return of the MARO or affidavit of the DLR personnel
serving, stating the following: the date, place and manner of service, the
papers, if any, which have been served with the process and name of
the person who received the same.
6.2 Proof of service by registered mail If service is made by
registered mail, proof may be made by the affidavit of the DLR personnel
effecting the mail and the registry receipt issued by the mailing office.
The registry return card shall be filed immediately upon its receipt by the
sender or in lieu thereof the unclaimed letter marked "RETURN TO
SENDER" stamped by then post office concerned or together with the
certified or sworn copy of the notice given by the postmaster to the
addressee.

6.3 Proof of service by publication If the service has been
made by publication, service may be proved by the following: 1) the
unclaimed or returned/unopened envelope referred to in paragraph 5.4
hereof; and 2) an affidavit of publication by the publisher or authorized
official together with a copy of the newspaper where the NOC appeared.

7. Voluntary appearance The LO's voluntary appearance in
the proceedings shall be equivalent to service of NOC.

8. Notice of Field Investigation

Upon proof of service of the issuance of NOC, the MARO
sends to the LO an invitation letter for the conduct of field investigation
(CARP-LA Form No. 10).

Assoc. of Small Landowners:
Upheld validity of Sec. 16 RA 6657 (manner of acquisition of
private agricultural lands and ascertainment of just compensation).
Section 16(e) of the CARP Law provides that: 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
Sec. 16, RA 6657
The title of the section states: Procedure for Acquisition of
Private Lands.
Section 6, RA 9700
The title was amended: "SEC. 16. Procedure for Acquisition
and Distribution of Private Lands."
Confed v. DAR
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.
Identification process in Sec. 16 is silent so DAR
filled gap (AO #12, s. 989)

Situation: Violation on the procedure of compulsory acquisition
proceedings

Roxas case : CLOA was not properly issued, DAR should be given
chance to validate (correct) proceedings.
-the violation does not give the court the power to nullify CLOA already
issued

Fortich case: CLOA was illegal & should be cancelled for being in
violation of law.

SIRs opinion: ROXAS should be controlling because the issue and the
ruling are in point. Fortich, in my opinion, is an obiter dictum because
there was already a judgment that became final and executor and this
was challenged before the SC. They have already reached a win-win
resolution and because of that, there was just one or two sentences that
talked about cancelling the illegal CLOA. But this conclusion was
pursuant to that final judgment.

Notice of Coverage:
Notifies landowner that his property shall be placed under
CARP and that he is entitled to exercise his retention right;
Notifies him 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.
Also informs the landowner that a field investigation of his
landholding shall be conducted where he and the other
representatives may be present.

Notice of Acquisition:
The Notice shall include, among others, the area subject of
compulsory acquisition, and the amount of just compensation
offered by DAR.
Should the landowner accept the DAR's offered value, the
Bureau of Land Acquisition and Distribution (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.

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.
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.
RA 6657: Revolutionary kind of expropriation
affects all private agricultural lands whenever found and of
whatever kind as long in excess of max retention limits;
intended for the benefit not only of a particular community or
of a small segment of the population but of the entire Filipino
nation, from all levels of our society, from the impoverished
farmer to the land-glutted owner;
does not cover only the whole territory of this country but
goes beyond in time to the foreseeable future;
Constitution has ordained this revolution in the farms, calling
for "a just distribution" among the farmers of lands that have
heretofore been the prison of their dreams and deliverance
Despite the revolutionary or non-traditional character of RA
6657, however, the chief limitations on the exercise of the
47

power of eminent domain, namely: (1) public use; and (2)
payment of just compensation, are embodied therein as well
as in the Constitution.
With respect to "public use, in Association of Small
Landowners declared that the requirement of public use had
already been settled by the Constitution itself as it "calls for
agrarian reform, which is the reason why private agricultural
lands are to be taken from their owners, subject to the
prescribed maximum retention limits.
On just compensation, judicial determination is expressly
prescribed in Section 57 of RA 6657 as it vests on the Special
Agrarian Courts original and exclusive jurisdiction over all
petitions for the determination of just compensation to
landowners. It bears stressing that the determination of just
compensation during the compulsory acquisition proceedings
of Section 16 of RA 6657 is preliminary only, court can review.

Section 16 (f) clearly provides:
(f)Any party who disagrees with the decision may bring the
matter to the court of proper jurisdiction for final determination of just
compensation

Application of Rule 67 of the Rules of Court?
Rules of Court, including Rule 67 thereof, is not completely
disregarded in the implementation of RA 6657 since the
Special Agrarian Courts, in resolving petitions for the
determination of just compensation, are enjoined to apply the
pertinent provisions of the Rules of Court.
Section 58 of RA 6657, like Rule 67 of the Rules of Court,
provides for the appointment of commissioners by the Special
Agrarian Courts.
Sec. 58: may; motu proprio or instance of party
Rule 67: shall

Santos v. LBP :
Facts:
RTC required payment of compensation for petitioner's land
taken under the Comprehensive Agrarian Reform Program, to be made
in cash and bonds. According to petitioner, said order illegally amended
the judgment rendered which directs payment of compensation to be
made "in the manner provided in RA 6657.

SC:
Trial court decision directing payment of just compensation
in the manner provided by RA 6657 is not illegally amended but is
merely clarified by an order issued during execution proc that such
amount shall be paid in cash and bonds.

It is a matter of terminology because payment in cash and in bond are
the SAME in the manner provided by law.

Heirs of Deleste vs LBP
HELD:

On the violation of petitioners' right to due process of law

Petitioners contend that DAR failed to notify them that it is subjecting
the subject property under the coverage of the agrarian reform program;
hence, their right to due process of law was violated.

We agree with petitioners. The importance of an actual notice in
subjecting a property under the agrarian reform program cannot be
underrated, as non-compliance with it trods roughshod with the essential
requirements of administrative due process of law.

It was incumbent upon the DAR to notify Deleste, being the landowner
of the subject property. It should be noted that the deed of sale
executed by Hilaria in favor of Deleste was registered on March 2, 1954,
and such registration serves as a constructive notice to the whole world
that the subject property was already owned by Deleste by virtue of the
said deed of sale. In Naval v. CA, this Court held:

Applying the law, we held in Bautista v. Fule that the registration of an
instrument involving unregistered land in the Registry of Deeds creates
constructive notice and binds third person who may subsequently deal
with the same property.

It bears stressing that the principal purpose of registration is "to notify
other persons not parties to a contract that a transaction involving the
property has been entered into." 64 There was, therefore, no reason for
DAR to feign ignorance of the transfer of ownership over the subject
property.

Moreover, that DAR should have sent the notice to Deleste, and not to
the Nanamans, is bolstered by the fact that the tax declaration in the
name of Virgilio was already canceled and a new one issued in the name
of Deleste. Although tax declarations or realty tax payments of property
are not conclusive evidence of ownership, they are nonetheless "good
indicia of possession in the concept of an owner, for no one in his right
mind would be paying taxes for a property that is not in his actual or, at
least, constructive possession."

Petitioners' right to due process of law was, indeed, violated when the
DAR failed to notify them that it is subjecting the subject property under
the coverage of the agrarian reform program.

Failure to notify owners violating section 16.
-Spouses Gregorio and Hilaria, childless. But the husband had a son
name Virgilio by another woman but was raised by the couple. Gregorio
also had two daughters, Esperanza and Caridad by still another woman.
Gregorio died. Hilaria and Virgilio sold the land to Jose Deleste. Sale was
notarized, registered, declaration was cancelled and tax declaration was
issued in the name of Deleste.
-DAR notified the heirs of Gregorio meaning that Deleste was not
notified.

SC: it was incumbent upon DAR to notify Deleste, he was the landowner,
sale was registered and tax declaration was already in the name of
Deleste.
- petitioners right to due process was indeed violated, DAR failed to
notify them.
- There can be no valid transfer of title should the CLTs are void,
cancellation of TCTs and OCTs are clearly warranted.

There was also another case where SC sanctioned the cancellation of the
title for violating Sec. 16.
1
CHAPTER VI COMPENSATION
Just Compensation:
full & fair equivalent of property taken from owner by
expropriation (Assoc. of Small Landowners). 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, ample.

Sec. 7, RA 9700:
"SEC. 17. Determination of Just Compensation. In
determining just compensation, the cost of acquisition of the land, the
value of the standing crop, the current value of like properties, its
nature, actual use and income, the sworn valuation by the owner, the
tax declarations, the assessment made by government assessors, and
seventy percent (70%) of the zonal valuation of the Bureau of
Internal Revenue (BIR), translated into a basic formula by the
DAR shall be considered, subject to the final decision of the proper
court. The social and economic benefits contributed by the farmers and
the farmworkers and by the Government to the property as well as the
nonpayment of taxes or loans secured from any government financing
institution on the said land shall be considered as additional factors to
determine its valuation."

48

Assoc. of small landowners vs Hon. Secretary

JUST COMPENSATION; DEFINED. Just compensation is defined as the
full and fair equivalent of the property taken from its owner by the
expropriator.

LBP v. Dumlao
Facts:
Respondents are owners of agri lands covered under PD 27;
Determination of just compensation remained pending with
DAR, so they filed complaint with RTC for determination.
SC:
if just compensation was not settled prior to the passage of RA
No. 6657, it should be computed in accordance with said law,
although property was acquired under PD No. 27;
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", does not come close to a full
and fair equivalent of the property taken from respondents;
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.
Section 17 was converted into a formula by the DAR through
AO No. 6, Series of 1992, as amended by AO No. 11, Series of
1994:
Basic formula (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.
Note:
1. PD 27: uses average crop harvest as a consideration;
RA 6657: factors for consideration in determining just compensation.
2. RA 6657 for lands covered by PD 27 and just compensation has not
been determined at the time of passage of RA 6657 applies because PD
27 and EO 228 have only suppletory effect.

Take into account the nature of land (i.e., irrigated), market value,
assessed value at the time of the taking, location (i.e., along
highway) and the volume and value of its produce, like:
(a) prevailing market value of in the area and
adjacent areas;
(b) presence and availability of an irrigation system to
augment and increase agricultural production;
(c) available comparable sales in the area;
(d) average harvests per hectare.

The date of taking of the subject land for purposes of
computing just compensation should be reckoned from the
issuance dates of the emancipation patents.
Why? EP 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.
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.
Petitioners argument that respondents should not be paid yet
pending determination by DAR is specious.
To wait for the DAR valuation despite its unreasonable neglect
and delay in processing is to violate the elementary rule that
payment of just compensation must be within a reasonable
period from the taking of property;
Citing Cosculluela v. CA, just compensation means not only the
correct determination of the amount to be paid to the owner
of the land but also the payment of the land within a
reasonable time from its taking. Without prompt payment,
compensation cannot be considered "just" for the property
owner is made to suffer the consequence of being immediately
deprived of his land while being made to wait for a decade or
more before actually receiving the amount necessary to cope
with his loss

PRINCIPLE: If an agri land is acquired under PD 27 but just
compensation has not been paid until RA 6657 took effect, just
compensation will be computed on the basis of the present law, NOT
under PD 27.

REASON: It is inequitable that just compensation should be determined
under PD 27 because just compensation is defined as the full and ample
value of the land to be given to the LO.

Under PD 27: only ONE factor in determining just compensation: average
crop harvest

Under the Present law: FACTORS (Section 17)
1. cost of acquisition
- Under Tax Law: basis either selling price or zonal evaluation
whichever is higher
2. current value of like properties
- case of Dumlao: factors were reduced into a formula by DAR.
Formula upheld by SC as valid
- value described in comparable sales
3. actual use & income & nature;
4. sworn valuation by owner;
5. tax declaration;
- assessed value, market value, and classification of land
6. assessment made by Government assessors.

Additional factors under Sec. 17 because of the amendment:
1. Value of the standing crop
2. Additional 70% of the zonal valuation of the BIR

Other additional factors under the Nable Case:
1. Farming experience
2. Thumb method

EFFECT if just compensation is not based on the factors: NOT VALID
- Even if the findings are based on the factors but not based on
any evidence in relation to the factors: evaluation is without
basis

You have decision from PARAD, do you need to go to RARAD or DARAB
before you can file a case with RTC? NO
- 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 offenses under
this Act. The Rules of Court shall apply to all proceedings
49

before the Special Agrarian Courts, unless modified by this
Act.
- SAC refers to RTC
- Determination of DAR is only preliminary
- Sec 16 (f): the final determination of just compensation is
vested on the Special Agrarian Courts

Sps. Lee, vs. Land Bank of the Philippines,

Facts:
Petitioner were notified that their land holdings is covered by
Gov't Action Scheme pursuant to CARP. They received a notice of Land
valuation from DAR which offers P315, 307 for 3.195 hec. DAR
Adjudication Board affirmed the compensation and valuation and
declared that LBP fully complied with the criteria set forth by CARP.
Petitioners sought reconsideration but was denied. Petitioner filed a
petition for determination of Just Compensation before RTC. RTC acting
as Special Agrarian Court (SAC), citing appraisal report decided
P7,978,750.00 as just compensation and ordered LBP to pay.

Petition for review by LBP to CA and found that the SAC
made a wholesale adoption of the valuation of the appraisal company
and did not consider the other factors set forth in R.A. No. 6657 even
though the appraisal company admitted that it did not consider as
applicable the CARP valuation of the property. Hence, this petition.
Held:

The Court took note:
These factors have already been incorporated in a basic formula by the
DAR pursuant to its rule-making power under Section 49 of R.A. No.
6657. AO No. 5 precisely filled in the details of Section 17, R. A. No.
6657 by providing a basic formula by which the factors mentioned
therein may be taken into account. This formula has to be considered
by the SAC in tandem with all the factors referred to in Section 17 of the
law. The administrative order provides:
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:
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration

The above formula shall be used if all three factors are present, relevant,
and applicable.

A1. 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 = MV x 2

In no case shall the value of idle land using the formula MV x 2 exceed
the lowest value of land within the same estate under consideration or
within the same barangay or municipality (in that order) approved by
LBP within one (1) year from receipt of claimfolder.

---

Where:
CNI=
(AGPxSP) - CO
.12

AGP= Average Gross Production corresponding to the latest available 12
months gross production immediately preceding the date of FI (field
investigation)

SP= Selling Price (the average of the latest available 12 months selling
prices prior to the date of receipt of the CF (claim folder) by LBP for
processing, such prices to be secured from the Department of
Agriculture (DA) and other appropriate regulatory bodies or, in their
absence, from the Bureau of Agricultural Statistics. If possible, SP data
shall be gathered for the barangay or municipality where the property is
located. In the absence thereof, SP may be secured within the province
or region.

CO = Cost of Operations

Whenever the cost of operations could not be obtained or verified, an
assumed net income rate (NIR) of 20% shall be used. Landholdings
planted to coconut which are productive at the time of FI shall continue
to use the assumed NIR of 70 %. DAR and LBP shall continue to conduct
joint industry studies to establish the applicable NIR for each crop
covered under CARP.

0.12 = Capitalization rate

The Court finds that the factors required by the law and
enforced by the DAR Administrative Order were not observed by the SAC
when it adopted wholeheartedly the valuation arrived at in the appraisal
report. The Court repremands the case to the RTC acting as a Special
Agrarian Court for the determination of just compensation in accordance
with Section 17 of Republic Act No. 6657.

Sps. Lee v. LBP
If valuation is based not on the factors, it is not valid .
(Note that in this case, there was admission that valuation
was not based on factors under CARL: a representative of the company
admitted that it did not consider the CARP valuation to be applicable).
Case remanded.

Land Bank of the Phils. vs. Heirs of Eleuterio Cruz,
Facts:
Landholding of the respondents was placed under the
coverage of the land transfer program of P.D. 27. Petitioner pegged the
value of the acquired landholding at P106,935.76 based on the
guidelines set forth under P.D. No. 27 and E.O. 228. Respondents
petitioned for valuation and determination of just compensation before
the Provincial Agrarian Reform Adjudicator which fixed it to P80,000.00
per hectare. Motion for Reconsideration was denied so the Petitioner
petition for the determination of just compensation before the RTC
acting as SAC held that the value of P80,000.00 per hectare fixed by the
PARAD should be accorded weight and probative value and that the SAC
is guided by the various factors enumerated in Section 17of R.A. No.
6657 in determining just compensation. It disregarded respondents'
claim that the valuation should be based on the current market value of
the landholding since no evidence was adduced in support of the claim
and also did not accept petitioner's valuation as it was based on P.D. No.
27, in which just compensation was determined at the time of the taking
of the property. CA rendered the assailed decision partly granting
petitioner's appeal but affirmed the SAC decision fixing just
compensation at P80,000.00 per hec. Reconsideration was denied.
Hence, the instant petition, arguing that the formula set forth in P.D. No.
27/E.O. No. 228 should be applied in fixing just compensation since
respondents' landholding was acquired under P.D. No. 27 in cognizance
to a settled rule that just compensation is the value of the property at
the time of the taking, on 21 October 1972.

Held:
The Court citing Land Bank of the Philippines v. Natividad,
50

on the guideline provided by PD No. 27 and EO 228 considering the
DAR's failure to determine the just compensation for a considerable
length of time. That just compensation should be determined in
accordancewithRA6657,and not PD 27 or EO 228, is especially imperative
considering that just compensation should be the full and fair equivalent
of the property taken from its owner by the expropriator, the equivalent
being real, substantial, full and ample.
The Court remanded the determination of just compensation
to RTC acting as SAC.

LBP v. Heirs of Cruz

If valuation is not based on any evidence, it is w/o basis, so
determination be remanded.
In this case, decision of PARAD and SAC points to no evidence,
so case was remanded.
Is prior recourse to DARAB necessary before case for determination of JC
may be filed?
No:
(a) because DAR may continue to alienate the lots during
the pendency of protest;
(b) Sec. 57 of RA 6657 states that SAC has orig and exclusive
jurisdiction.
Content and Manner (Section 18)
Sec. 18 speaks of cash or shares of stock, tax credits or LBP
bonds.
Is this not violation of usual way of payment in cash?
No, because revolutionary kind.
Parties involved (Section 18)

LBP vs. Jocson and sons
Facts:
The property was placed under the coverage of the government's
Operation Land Transfer 2 (OLT) pursuant to Presidential Decree (P.D.)
No. 27 3 and awarded to the tenant-beneficiaries by the Department of
Agrarian Reform (DAR), which valued the compensation therefor in the
total amount of P250,563.80 following the formula prescribed in P.D. No.
27 and Executive Order (E.O.) No. 228. 4

The valuation was later increased to P903,637.03 after computing the
6% annual interest increment 5 due on the property per DAR
Administrative Order No. 13, series of 1994, which amount respondent
withdrew in 1997, without prejudice to the outcome of the case it had
filed hereunder to fix just compensation.

Finding the DAR's offer of compensation for the property to be grossly
inadequate, respondent filed a complaint 6 on July 18, 1997 before the
Regional Trial Court of Bacolod City, Br. 46, sitting as a Special Agrarian
Court (SAC), against the Land Bank (petitioner), 7 the DAR, and the
tenant-beneficiaries, for "Determination and Fixing of Just Compensation
for the Acquisition of Land and Payment of Rentals".

In their respective Answers, petitioner and the DAR claimed that the
property was acquired by the government under its OLT program and
their valuation thereof constituted just compensation, having been made
pursuant to the guidelines set by E.O. No. 228 and P.D. No. 27.

In arriving at the just compensation, the SAC adopted a higher valuation
(P93,657.00/hectare) which the DAR had applied to a similar landholding
belonging to one Pablo Estacion adjacent to respondent's.

Issue:
Whether the SAC erred in the valuation the land

HELD:
In the recent case of Land Bank of the Philippines v. Chico, 27 the Court
declared in no uncertain terms that R.A. No. 6657 is the relevant law for
determining just compensation after noting several decided cases where
the Court found it more equitable to determine just compensation based
on the value of the property at the time of payment. This was a clear
departure from the Court's earlier stance in Gabatin v. Land Bank of the
Philippines where it declared that the reckoning period for the
determination of just compensation is the time when the land was taken
applying P.D. No. 27 and E.O. No. 228.

P.D. No. 27/E.O. No. 228 vis a vis R.A. No. 6657 was applied to cases
involving lands placed under the coverage of P.D. No. 27/E.O. No. 228
where payment of just compensation had not been completed. When in
the interim R.A. No. 6657 was passed before the full payment of just
compensation, as in the case at bar, the provisions of R.A. No. 6657 on
just compensation control.

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

LBP vs Livioco
Facts:
Respondent Enrique Livioco (Livioco) was the owner of 30.6329 hectares
of sugarland 6 located in Dapdap, Mabalacat, Pampanga. Sometime
between 1987 and 1988, 7 Livioco offered his sugarland to the
Department of Agrarian Reform (DAR) for acquisition under the CARP at
P30.00 per square meter, for a total of P9,189,870.00. The voluntary-
offer-to-sell (VOS) form 8 he submitted to the DAR indicated that his
property is adjacent to residential subdivisions and to an international
paper mill.

The DAR referred Livioco's offer to the LBP for valuation. Following
Section 17 of Republic Act (RA) No. 6657 and DAR Administrative Order
No. 17, series of 1989, 11 as amended by Administrative Order No. 3,
series of 1991, 12 the LBP set the price at P3.21 per square meter or a
total of P827,943.48 for 26 hectares. Livioco was then promptly informed
of the valuation 14 and that the cash portion of the claim proceeds have
been "kept in trust pending [his] submission of the [ownership
documentary] requirements." 15 It appears however that Livioco did not
act upon the notice given to him by both government agencies. On
September 20, 1991, LBP issued a certification to the Register of Deeds
of Pampanga that it has earmarked the amount of P827,943.48 as
compensation for Livioco's 26 hectares.

It was only two years later 17 that Livioco requested for a reevaluation
of the compensation on the ground that its value had already
appreciated from the time it was first offered for sale. 18 The request
was denied by Regional Director Antonio Nuesa on the ground that there
was already a perfected sale.

Unable to recover his property but unwilling to accept what he believes
was an outrageously low valuation of his property, Livioco finally filed a
petition for judicial determination of just compensation against DAR,
LBP, and the CLOA holders.

In this Petition before us, LBP assails the CA's assent to the valuation of
Livioco's property as a residential land. It maintains that it is not the
State's policy to purchase residential land. Since the property was
acquired under the CARP, it had to be valued as an agricultural land.

Issue

Was the compensation for respondent's property determined in
accordance with law?

HELD:
For purposes of just compensation, the fair market value of an
expropriated property is determined by its character and its price at the
time of taking. 68 There are three important concepts in this definition
the character of the property, its price, and the time of actual taking.

51

The lower courts erred in ruling that the character or use of the property
has changed from agricultural to residential, because there is no
allegation or proof that the property was approved for conversion to
other uses by DAR. It is the DAR that is mandated by law to evaluate
and to approve land use conversions 73 so as to prevent fraudulent
evasions from agrarian reform coverage. Even reclassification 74 and
plans for expropriation 75 by local government units (LGUs) will not ipso
facto convert an agricultural property to residential, industrial or
commercial. Thus, in the absence of any DAR approval for the
conversion of respondent's property or an actual expropriation by an
LGU, it cannot be said that the character or use of said property changed
from agricultural to residential. Respondent's property remains
agricultural and should be valued as such. Hence, the CA and the trial
court had no legal basis for considering the subject property's value as
residential.

Respondent's evidence of the value of his land as residential property
(which the lower courts found to be preponderant) could, at most, refer
to the potential use of the property. While the potential use of an
expropriated property is sometimes considered in cases where there is a
great improvement in the general vicinity of the expropriated property, it
should never control the determination of just compensation (which
appears to be what the lower courts have erroneously done). The
potential use of a property should not be the principal criterion for
determining just compensation for this will be contrary to the well-settled
doctrine that the fair market value of an expropriated property is
determined by its character and its price at the time of taking, not its
potential uses. If at all, the potential use of the property or its
"adaptability for conversion in the future is a factor, not the ultimate in
determining just compensation." 77

The proper approach should have been to value respondent's property
as an agricultural land, which value may be adjusted in light of the
improvements in the Municipality of Mabalacat. Valuing the property as a
residential land (as the lower courts have done) is not the correct
approach, for reasons explained above. It would also be contrary to the
social policy of agrarian reform, which is to free the tillers of the land
from the bondage of the soil without delivering them to the new
oppression of exorbitant land valuations. Note that in lands acquired
under RA 6657, it is the farmer-beneficiaries who will ultimately pay the
valuations paid to the former land owners (LBP merely advances the
payment). 78 If the farmer-beneficiaries are made to pay for lands
valued as residential lands (the valuation for which is substantially higher
than the valuation for agricultural lands), it is not unlikely that such
farmers, unable to keep up with payment amortizations, will be forced to
give up their landholdings in favor of the State or be driven to sell the
property to other parties. This may just bring the State right back to the
starting line where the landless remain landless and the rich acquire
more landholdings from desperate farmers.

LO tried to prove that lot was residential not agricultural for higher just
compensation. There were several evidences presented by owner;
certification from the municipal planning office, zoning, HLURB, etc.

SC: No clearance from DAR. No allegation or proof that there was a
conversion clearance from agri to residential. That means that the land
has to be valued as agricultural land, NOT residential.

DISCUSSION: Do you need conversion clearance? SIR: IMO, no more.
- You need conversion clearance for purposes of real property
tax in LGU
- Or assurance from DAR that your land is not covered under
DAR because the use is not anymore for agricultural activity
- Under sec. 17, no factor of conversion but actual use of the
land

LBP vs Honeycomb
HELD: We reiterated the mandatory application of the formula in the
applicable DAR administrative regulations in Land Bank of the Philippines
v. Lim, 24 Land Bank of the Philippines v. Heirs of Eleuterio Cruz, 25 and
Land Bank of the Philippines v. Barrido. 26 In Barrido, we were explicit in
stating that:

While the determination of just compensation is essentially a judicial
function vested in the RTC acting as a Special Agrarian Court, the judge
cannot abuse his discretion by not taking into full consideration the
factors specifically identified by law and implementing rules. Special
Agrarian Courts are not at liberty to disregard the formula laid down in
DAR A.O. No. 5, series of 1998, because unless an administrative order
is declared invalid, courts have no option but to apply it. The courts
cannot ignore, without violating the agrarian law, the formula provided
by the DAR for the determination of just compensation.

Valuation and Payment (Section 18)
FORMS OF PAYMENT

SEC. 18. Valuation and Mode of Compensation. - The LBP shall
compensate the landowner in such amount as may be agreed upon by
the landowner and the DAR and LBP or as may be finally determined by
the court as just compensation for the land.

The compensation shall be paid in one of the following modes at the
option of the landowner:

(1) Cash payment, under the following terms and conditions:
(a) For lands above fifty (50) hectares, insofar as the excess hectarage is
concerned - Twenty-five percent (25%) cash, the balance to be paid in
government financial instruments negotiable at any time.

(b) For lands above twenty-four hectares and up to fifty (50) hectares -
Thirty percent (30%) cash, the balance to be paid in government
financial instruments negotiable at any time.

(c) For lands twenty-four (24) hectares and below - Thirty-five percent
(35%) cash, the balance to be paid in government financial instruments
negotiable at any time.

(2) Shares of stock in government-owned or controlled corporations,
LBP preferred shares, physical assets or other qualified investments in
accordance with guidelines set by the PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds, which shall have the following features:

(a) Market interest rates aligned with 91-day treasury bill rates. Ten
percent (10%) of the face value of the bonds shall mature every year
from the date of issuance until the tenth (10th) year: Provided, That
should the landowner choose to forego the cash portion, whether in full
or in part, he shall be paid correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the
landowner, his successors-in-interest or his assigns, up to the amount of
their face value for any of the following:

(i) Acquisition of land or other real properties of the government,
including assets under the Assets Privatization Program and other assets
foreclosed by government financial institution in the same province or
region where the lands for which the bonds were paid are situated;

(ii) Acquisition of shares of stock of government-owned or controlled
corporations or shares or stock owned by the government in private
corporations;

(iii) Substitution for surety or bail bonds for the provisional release of
accused persons, or for performance bonds;

(iv) Security for loans with any government financial institution, provided
the proceeds of the loans shall be invested in an economic enterprise,
preferably in a small and medium-scale industry, in the same province or
region as the land for which the bonds are paid;

52

(v) Payment for various taxes and fees to the government: Provided,
That the use of these bonds for these purposes will be limited to a
certain percentage of the outstanding balance of the financial
instrument: Provided, further, That the PARC shall determine the
percentages mentioned above;

(vi) Payment for tuition fees of the immediate family of the original
bondholder in government universities, colleges, trade schools and other
institutions;

(vii) Payment for fees of the immediate family of the original bondholder
in government hospitals; and

(viii) Such other uses as the PARC may from time to time allow.
In case of extraordinary inflation, the PARC shall take
appropriate measures to protect the economy.

LO can withdraw

LBP vs Darab
- the valuation made by PARAB was rejected by the
landowners, After re-computation upon order of PARAD, a revaluated
amount was made but Los still found it low. Los appealed to DARAB,.
Pending resolution of their appeal Los interposed a Motion to Withdraw
Amended Valuation seeking the release to tem of the amount
representing the difference between the initial value.

SC- the need to allow the landowners to withdraw immediately the
amount deposited in their behalf, pending final determination of what is
just compensation for their land
- it is a an oppressive exercise of eminent domain if you do not
allow withdraw
- it is unnecessary to distinguish between provisional
compensation under Section 16 (e) and final compensation under
Section 18 for the purposes of exercising the landowners right to
appropriate the same. The immediate effect in other situations in the
same, the landowner is deprived of the use and possession of his
property for which he should be fairly and immediately compensated.

SC invalidated LBPs practice of opening trust accounts in favor of the
landowner.

In case the amount has already been deposited, even if the landowner
questions the accuracy or the validity of the amount deposited and will
thereafter file with the RTC for determination of just compensation, the
LO can withdraw the amount deposited. Part of his right to just
compensation

It should be deposited in the name of the landowner, not trust accounts
(trust accounts not expressly stated in Sec. 18)

Heirs of Lorenzo vs. LBP
- Petitioner are owners of land; first valuation was rejected but
upon re-computation and order of RRAD, the revaluation was accepted
by owners LBP filed MR but denied, LBP filed an opposition for
determination of JC with the RTC
- Petitioner submit that LBP has no legal personality
- SEC 18, clearly states there should be a consensus among
- LBP is an indispensable party in expropriation proceedings
under RA 6657 and thus has the legal personality to question the
determination.

There are cases where LBP is the plaintiff of an RTC Case.

FACTS: LBP did not agree with the computation of RARAD. Landbank
filed the case in RTC. Challenged by the petitioners that LBP has no legal
personality to institute the agrarian case.

Is it possible that LBP and DAR cannot agree with the evaluation? YES
- WHY? Implementation of the program is with DAR in the
EXECUTIVE aspect. There is another aspect of DAR which is
quasi-judicial.
- Probably, LBP coordinates with DAR in the implementation
aspect but LBP cannot dictate the quasi-judicial aspect

SC: these are the parties involving just compensation under Sec. 18.:
Landowner, DAR, and LBP. LBP is not merely a nominal party but is
indispensable, independent of DAR.

DAR vs Heirs of Domingo
Facts:
The late Angel T. Domingo (Domingo) is the registered owner of a
70.3420-hectare rice land situated at Macapabellag, Guimba, Nueva
Ecija, covered by Transfer Certificate of Title No. NT-97157.

On October 21, 1972, Presidential Decree No. 27 2 (P.D. No. 27) was
issued, pursuant to which actual tenant farmers of private agricultural
lands devoted to rice and corn were deemed as full owners of the land
they till. The land transfer program under P.D. No. 27 was subsequently
implemented by Executive Order No. 228.

On April 26, 2000, Domingo filed with the Regional Trial Court (RTC) of
Guimba, Nueva Ecija a complaint for determination and payment of just
compensation against the Land Bank of the Philippines (LBP) and DAR.

Domingo opposed the said valuation and claimed that the just
compensation for the subject land should be computed using the
parameters set forth under Republic Act No. 6657 4 (R.A. No. 6657).

The LBP and DAR disputed Domingo's valuation and claimed that the
determination of just compensation should be governed by the
provisions of P.D. No. 27 in relation to E.O. No. 228.

ISSUE:
Whether the method set forth under R.A. No. 6657 in the computation of
just compensation may be applied to private agricultural lands taken by
the government under the auspices of P.D. No. 27 in relation to E.O. No.
228.

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

xxx xxx xxx

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

Same Principle with Dumlao Case: Based on RA 6657 not PD 27: Basis:
Equity

Content and manner of compensation

Sec. 18 speaks of cash or shares of stock, tax credits, or LBP bonds

Is this not violation of usual way of payment in cash?
53

- No, because revolutionary kind and also practicality (Gov.
will go bankrupt if we rely on the ordinary expropriation which
is all in cash)
- Cash usually only 25-30%
- LBP bonds usually spreads/matures in 10 years. (gives the
Gov time)

Assoc. of small landowners vs Hon. Sec.

We do not deal here with the traditional exercise of the power of
eminent domain. This is not an ordinary expropriation where only a
specific property of relatively limited area is sought to be taken by the
State from its owner for a specific and perhaps local purpose. What we
deal with here is a revolutionary kind of expropriation. The expropriation
before us affects all private agricultural lands whenever found and of
whatever kind as long as they are in excess of the maximum retention
limits allowed their owners. Such a program will involve not mere
millions of pesos. The cost will be tremendous.

The other modes, which are likewise available to the landowner at his
option, are also not unreasonable because payment is made in shares of
stock, LBP bonds, other properties or assets, tax credits, and other
things of value equivalent to the amount of just compensation.

Therefore, payment of the just compensation is not always required to
be made fully in money.

Parties Involved (Section 18)

Land Bank v. CA:
The parties are DAR, landowner and LBP. The law does not
mention the participation of farmer-beneficiary.
So consent of farmer-beneficiary is not required in
establishing proper compensation.
Voluntary offer (Section 19)
Section 19 provides for additional 5% cash payment if LO
voluntarily offers land for sale.
Voluntary land transfer (Secs. 20 and 21)

How is VLT made?
Sec. 20 LO may enter into voluntary arrangement for direct transfer to
qualified beneficiaries but subject to guidelines (i.e., all notices for VLT
be submitted to DAR within 1
st
year of implementation of CARP, terms
and conditions shall not be less favorable to transferee).

Sec. 21 direct payment may be made in cash or kind by ARB under
terms mutually agreed and which shall be binding upon registration and
approval by DAR.
Sec. 44 (2) provides that PARCOM shall recommend to PARC
the adoption of direct payment scheme. So, AO #2, s. 1995
was issued:
Beneficiaries are determined by DAR;
Area to be transferred to ARB should not be less than the area
which the govt would otherwise acquire;
CLOAs should bear proper annotations.

END OF MIDTERM (But take note of SEC. 27 on page 37 apil sa
exam)

Room 405
- Except no. 3 LBP vs. Nable
- Not including payment of interest (3 cases)
- Nable not included
- Sec. 27 (Carper) transferability, how many years is the prohibited
period? 4 exceptions?
- agricultural activity, agrarian dispute, agricultural land (read all
the cases) concentrate here
- ra 3844: focus on in case of death of lessee, who will assume
cultivation; grounds to dispossess lessee; 2 cases (Po and Sta. Ana
cases)
- sec. 10 (c) exceptions and exemptions; esp. Central Mindanao Case
- association of small landowners: revolutionary kind of expro:
justification of the SC
- sec. 16: procedure on compulsory acquisition (heirs of Trinidad: correct
payment of deposit)
- Livioco: Landowner tried to prove that land is residential. There were
several evidences, etc SC: no clearance from DAR. Land is valued as
Agricultural land.
- sec. 6 homestead (note the important qualifications) (cases: Alita and
Paris vs. Alfeche)
- Dumlao case: just compensation PD RA 6657: computed on the
basis of the present law
- landbank of the phil: whether it has legal personality to file a case
before RTC involving just compensation?
- Ways of distribution of lands to qualified beneficiaries (Chapter 3):
voluntary offer (sec.20), compulsory (Sec. 16), non-land transfer
schemes (SDO, Leasehold operation- sec.12)
- type: 60 (mcq) -40

Additional from Francis

- Confed vs. DAR (2 chief limitations)
- 6 requisites of agrarian dispute (know different principles of the case)
- definition of agricultural land (Alangilan case)
- Sec. 16: (heirs of deleste): correct amount to be deposited by landbank
- preliminary determination of just compensation by DAR vs. RTC as
special agrarian court
- sec. 16: notice of acquisition (who is to be notified): heirs of Trinidad
case

Payment in interest in just compensation

Apo Fruits corp. vs CA

Facts:
On October 12, 1995, AFC and HPI voluntarily offered to sell the lands
subject of this case pursuant to Republic Act No. 6657 (Comprehensive
Agrarian Reform Law, or CARL). The Department of Agrarian Reform
(DAR) referred their voluntary-offer-to-sell (VOS) applications to Land
Bank for initial valuation. Land Bank fixed the just compensation at
P165,484.47/hectare, that is, P86,900,925.88, for AFC, and
P164,478,178.14, for HPI. The valuation was rejected, however,
prompting Land Bank, upon the advice of DAR, to open deposit accounts
in the names of the petitioners, and to credit in said accounts the sums
of P26,409,549.86 (AFC) and P45,481,706.76 (HPI). Both petitioners
withdrew the amounts in cash from the accounts, but afterwards, on
February 14, 1997, they filed separate complaints for determination of
just compensation with the DAR Adjudication Board (DARAB).

When DARAB did not act on their complaints for determination of just
compensation after more than three years, the petitioners filed
complaints for determination of just compensation with the Regional
Trial Court (RTC) in Tagum City, Branch 2, acting as a special agrarian
court (SAC), docketed as Agrarian Cases No. 54-2000 and No. 55-2000.
Summonses were served on May 23, 2000 to Land Bank and DAR, which
respectively filed their answers on July 26, 2000 and August 18, 2000.
The RTC conducted a pre-trial, and appointed persons it considered
competent, qualified and disinterested as commissioners to determine
the proper valuation of the properties.

The RTC rendered its decision:

DEPARTMENT OF AGRARIAN REFORM and/or LAND BANK OF THE
PHILIPPINES, thru its Land Valuation Office, to pay jointly and severally
the Commissioners' fees herein taxed as part of the costs pursuant to
Section 12, Rule 67 of the 1997 Rules of Civil Procedure, equivalent to,
and computed at Two and One-Half (2 1/2) percent of the determined
54

and fixed amount as the fair, reasonable and just compensation of
plaintiffs' land and standing crops plus interest equivalent to the interest
of the 91-Day Treasury Bills from date of taking until full payment;

ISSUE:
Whether or not the interest was validly imposed.

HELD:
It is true that Land Bank sought to appeal the RTC's decision to the CA,
by filing a notice of appeal; and that Land Bank filed in March 2003 its
petition for certiorari in the CA only because the RTC did not give due
course to its appeal. Any intervening delay thereby entailed could not be
attributed to Land Bank, however, considering that assailing an
erroneous order before a higher court is a remedy afforded by law to
every losing party, who cannot thus be considered to act in bad faith or
in an unreasonable manner as to make such party guilty of unjustified
delay. As stated in Land Bank of the Philippines v. Kumassie Plantation:
18 HAcaCS

The mere fact that LBP appealed the decisions of the RTC and the Court
of Appeals does not mean that it deliberately delayed the payment of
just compensation to KPCI. . . . It may disagree with DAR and the
landowner as to the amount of just compensation to be paid to the latter
and may also disagree with them and bring the matter to court for
judicial determination. This makes LBP an indispensable party in cases
involving just compensation for lands taken under the Agrarian Reform
Program, with a right to appeal decisions in such cases that are
unfavorable to it. Having only exercised its right to appeal in this case,
LBP cannot be penalized by making it pay for interest.

It is explicit from LBP v. Wycoco that interest on the just compensation is
imposed only in case of delay in the payment thereof which must be
sufficiently established. Given the foregoing, we find that the imposition
of interest on the award of just compensation is not justified and should
therefore be deleted.

It must be emphasized that "pertinent amounts were deposited in favor
of AFC and HPI within fourteen months after the filing by the latter of
the Complaint for determination of just compensation before the RTC". It
is likewise true that AFC and HPI already collected P149.6 and P262
million, respectively, representing just compensation for the subject
properties. Clearly, there is no unreasonable delay in the payment of just
compensation which should warrant the award of 12% interest per
annum in AFC and HPI's favor.

APO: GR: When it comes to just compensation, there is no interest to be
imposed.
EX: in case of delay on the basis of Art. 2209
- How do you appreciate delay? Depending on the FACTS

Apo: Rate of interest is 12%. in relation to damages (2209) as in
forbearance of money
- Already amended from 12%- 6% per annum (July 2013)
- But per jurisprudence, 12% per annum

Soriano: rate of interest is 6%
- Based on admin order issued by DAR: that the rates of
interest to be imposed on lands acquired under PD 27 is 6%
- Not the issue in the case but is the reckoning point (from
where 6% should be imposed)
- LBP: reckoned from the date of taking (advantageous to
government)
- SC: NO! should be reckoned from the payment of just
compensation.

LBP vs Soriano

Facts:
Domingo and Mamerto Soriano (respondents) are the registered owners
of several parcels of rice land situated in Oas, Albay. Out of the 18.9163
hectares of land 3 owned by the respondents, 18.2820 hectares were
placed under the Operations Land Transfer and the CARP pursuant to
Presidential Decree No. 27 4 and Republic Act No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law. 5

The LBP 6 pegged the value of 18.0491 hectares of land at P482,363.95
7 (P133,751.65 as land value plus P348,612.30 incremental interest),
while the remaining 0.2329 hectare was computed at P8,238.94. 8 Not
satisfied with the valuation, respondents, on 23 November 2000,
instituted a Complaint 9 for judicial determination of just compensation
with the Regional Trial Court of Legazpi City, 10 sitting as a Special
Agrarian Court (SAC). Respondents alleged that they are entitled to an
amount of not less than P4,500,000.00 as just compensation. 11

On 21 February 2005, the SAC rendered a judgment, ordering LBP to
pay the respondents P894,584.94. The dispositive portion reads:

ACCORDINGLY, the just compensation of the 18.0491 hectares of
irrigated riceland is P133,751.79, plus increment of 6% per annum
computed annually beginning October 21, 1972, until the value is fully
paid, and of the 0.2329 hectare of rain fed riceland is P8,238.94 plus
12% interest per annum, beginning August 17, 1998, until the value is
fully paid or a total of P894,584.94 as of this date. Land Bank is ordered
to pay the landowners Domingo Soriano and Mamerto Soriano said
amount/land value in accordance with law.

Both parties disagreed with the trial court's valuation, prompting them to
file their respective appeals with the Court of Appeals. The appellate
court, however, affirmed the judgment of the trial court. It also upheld
the award of compounded interest, thus:

In the case at bar, the subject lands were taken under PD 27 and were
covered by Operation Land Transfer, making the aforecited
Administrative Order applicable.

HELD:

In the instant case, while the subject lands were acquired under
Presidential Decree No. 27, the complaint for just compensation was only
lodged before the court on 23 November 2000 or long after the passage
of Republic Act No. 6657 in 1988. Therefore, Section 17 of Republic Act
No. 6657 should be the principal basis of the computation for just
compensation. As a matter of fact, the factors enumerated therein had
already been translated into a basic formula by the DAR pursuant to its
rule-making power under Section 49 of Republic Act No. 6657.

The award of interest until full payment of just compensation is to
ensure prompt payment. Moreover, respondents claim that the date LBP
approves the payment of the land transfer claim and deposits the
proceeds in the name of the landowner is not tantamount to actual
payment because on said date, the release of the amount is conditioned
on certain requirements.

Note: RA 6657 12%
PD 27 6%

LBP vs Rivera

Facts:
The respondents are the co-owners of a parcel of agricultural land
embraced by Original Certificate of Title No. P-082, and later transferred
in their names under Transfer Certificate of Title No. T-95690 that was
placed under the coverage of Operation Land Transfer pursuant to
Presidential Decree No. 27 in 1972. Only 18.8704 hectares of the total
area of 20.5254 hectares were subject of the coverage.

After the Department of Agrarian Reform (DAR) directed payment, LBP
approved the payment of P265,494.20, exclusive of the advance
payments made in the form of lease rental amounting to P75,415.88 but
inclusive of 6% increment of P191,876.99 pursuant to DAR
Administrative Order No. 13, series of 1994.
55

On 1 December 1994, the respondents instituted Civil Case No. 94-03 for
determination and payment of just compensation before the Regional
Trial Court.

LBP filed its answer, stating that rice and corn lands placed under the
coverage of Presidential Decree No. 27 7 were governed and valued in
accordance with the provisions of Executive Order No. 228 8 as
implemented by DAR Administrative Order No. 2, Series of 1987 and
other statutes and administrative issuances; that the administrative
valuation of lands covered by Presidential Decree No. 27 and Executive
Order No. 228 rested solely in DAR and LBP was the only financing arm;
that the funds that LBP would use to pay compensation were public
funds to be disbursed only in accordance with existing laws and
regulations; that the supporting documents were not yet received by
LBP; and that the constitutionality of Presidential Decree No. 27 and
Executive Order No. 228 was already settled.

In Republic v. Court of Appeals, 19 we affirmed the award of 12%
interest on just compensation due to the landowner. The court decreed:

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,
if 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 interest 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
interest 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.

Voluntary Offer for Sale (Section 19)

SEC. 19. Incentives for Voluntary Offers for Sale. - Landowners other
than banks and other financial institutions who voluntarily offer their
lands for sale shall be entitled to an additional five percent (5%) cash
payment.

NOTE: Under CARPER, there is no more voluntary offer. Only compulsory
acquisition

Voluntary Transfer (Section 20 and 21)

SEC. 20. Voluntary Land Transfer. - Landowners of agricultural lands
subject to acquisition under this Act may enter into a voluntary
arrangement for direct transfer of their lands to qualified beneficiaries
subject to the following guidelines:
(a) All notices for voluntary land transfer must be submitted to the DAR
within the first year of the implementation of the CARP. Negotiations
between the landowners and qualified beneficiaries covering any
voluntary land transfer which remain unresolved after one (1) year shall
not be recognized and such land shall instead be acquired by the
government and transferred pursuant to this Act.
(b) The terms and conditions of such transfer shall not be less favorable
to the transferee than those of the government's standing offer to
purchase from the landowner and to resell to the beneficiaries, if such
offers have been made and are fully known to both parties.
(c) The voluntary agreement shall include sanctions for non-compliance
by either party and shall be duly recorded and its implementation
monitored by the DAR.

SEC. 21. Payment of Compensation by Beneficiaries Under Voluntary
Land Transfer.- Direct payment in cash or in kind may be made by the
farmer-beneficiary to the landowner under terms to be mutually agreed
upon by both parties, which shall be binding upon them, upon
registration with and approval by the DAR. Said approval shall be
considered given, unless notice of disapproval is received by the farmer-
beneficiary within 30 days from the date of registration. In the event
they cannot agree on the price of the land, the procedure for compulsory
acquisition as provided in Section 16 shall apply. The LBP shall extend
financing to the beneficiaries for purposes of acquiring the land.

Chapter VII

Distribution of lands to landless residents (will not be included in the
Midterms)
- Defined under Sec. 2: Landless resident does not necessarily
mean that a person does not own a land. One can be
considered landless for purposes of CARP if that person does
not own more than 3 hectares of land.

QUALIFIED BENEFICIARIES
(1) The lands covered by the 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) agricultural lessees and share tenants;
(b) regular farmworkers;
(c) seasonal farmworkers;
(d) other farmworkers;
(e) actual tillers or occupants of public lands;
(f) collectives or cooperatives of the above beneficiaries; and
(g) others directly working on the land;

Previous law: there is no provision that (a) and (b) should be prioritized
Amendment: they are prioritized of that same landholding up to a
maximum of 3 hectares each.

(2) The children of landowners who are qualified shall be given
preference in the distribution of the land of their parents.

(3) Actual tenant-tillers in the landholding shall not be ejected or
removed therefrom.

(4) Beneficiaries under Presidential Decree No.27 who have culpably
sold, disposed of, or abandoned their lands are disqualified to become
beneficiaries under the Program.

(5) A basic qualification of a beneficiary shall be his willingness, aptitude,
and ability to cultivate and make the land as productive as possible.

Presupposing that the beneficiary has registered with the department.

(6) If, due to the landowners retention rights or to the number of
tenants, lessees, or workers on the land, there is not enough land to
accommodate any or some of them, they may be granted ownership of
other lands available for distribution under the Act, at the option of the
beneficiaries.

(8) No qualified beneficiary may own more than three (3) hectares of
agricultural land. (Sec. 23)

Beneficiaries to be awarded with the land of Polo Coconut were
questioned by Polo Coconut.
Polo: these beneficiaries are not tenants of our land thus not qualified.

56

SC: it is DAR who is mandated to select CARP beneficiaries.

Section 22 of the CARL does not limit qualified beneficiaries to tenants of
the landowners. Thus, the DAR cannot be deemed to have committed
grave abuse of discretion simply because its chosen beneficiaries were
not tenants of PCPCI (DAR vs. Polo Coconut Plantation Co., In., et
al., G.R. 168787, September 3, 2008).

Award Ceiling Limit (Section 23)

SEC. 23. Distribution Limit. - No qualified beneficiary may own more than
three (3) hectares of agricultural land.

AWARD TO BENEFICIARIES
O Ownership of the beneficiary shall be evidenced by a
Certificate of Land Ownership Award, which shall contain the
restrictions and conditions provided for in the Act, and shall be
recorded in the Register of Deeds concerned and annotated on
the Certificate of Title. (Sec. 24)

Same principle of indefeasibility and imprescriptibility after one year from
registration due to the amendment (RA 9700)

If there is certification of deposit, it is the ministerial duty of the RD.

Issuance of CARP Beneficiary Certificate
O When certificate issued. Section 24 of R.A. No. 6657
provides that the rights and responsibilities of the beneficiary
shall commence from the time the DAR makes an award of the
land to him, which award shall be completed within 180 days
from the time the DAR takes actual possession of the land.
Ownership of the lands by the beneficiary shall be evidenced
by an Emancipation Patent (EP) or a Certificate of Land
Ownership Award (CLOA), which shall contain the restrictions,
and conditions provided by law and which shall be recorded in
the Register of Deeds concerned and annotated on the
Certificate of Title.

If there is no CLOA yet (for any reason), beneficiary will be issued CARP
Beneficiary Certificate.

Beneficiaries are required to pay LBP in 30 annual amortizations with 6%
interest per annum.

In several instances, however, the EP or CLOA cannot be immediately
issued pending the fulfillment of certain legal and administrative
requirements. Examples of these are:
(a) The Supreme Court ruling in the case of Association of Small
Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform
(G.R. No. 76742, 14,July 1989.) that title to all expropriated properties
shall be transferred to the State only upon full payment of compensation
to their respective landowners;

(b) The conduct of subdivision surveys to define the specific parcel of
land being awarded through the EP or CLOA.
Cont. of Issuance of CARP Beneficiary Certificate (1)
O Thus, pending the fulfillment of the said requirements, the
identified beneficiaries may already be in possession of the
land but still have no EP or CLOA therefor. For this reason,
the DAR shall first issue a CARP Beneficiary Certificate (CBC) to
provide the would-be beneficiaries, an intermediate document
to evidence that they have been identified and have qualified
as agrarian reform beneficiaries under the CARP. Moreover,
aside from attesting to the inchoate right of the identified
beneficiary to be awarded the land or portion thereof, the CBC
issued shall entitle the recipient to receive support services
under the CARP.

PAYMENT BY BENEFICIARIES
(1)Lands awarded pursuant to the Act shall be paid for by the
beneficiaries to the LBP in thirty (30) annual amortization at 6% interest
per annum subject to the following rules:
(a) The payments for the first three (3) years after the award
may be at reduced amounts as established by the PARC.
(b) The first five (5) annual payments may not be more than
5% of the value of the annual gross production as established by the
DAR.
(c) Should the scheduled annual payments after the fifth year
exceed 10% of the annual gross production and the failure to produce
accordingly is not due to the beneficiarys fault, the LBP may reduce the
interest rate or reduce the principal obligation to make the repayment
affordable.

(2) The LBP shall have a lien (i.e., prior right) by way of mortgage on
the land awarded to the beneficiary; and this mortgage may be
foreclosed by the LBP for non-payment of an aggregate of three(3)
annual amortization. The LBP shall advice the DAR of such proceedings
and the latter shall subsequently award the forfeited landholding to other
qualified beneficiaries. A beneficiary whose land has been foreclosed
shall thereafter be permanently disqualified from becoming a beneficiary
under the Act. (Sec. 26.)

TRANSFERABILITY OF AWARDED LANDS (Sec. 27)
(1) Lands acquired by beneficiaries under the Act may not be
sold, transferred or conveyed except through hereditary succession, or to
the government, or to the LBP or to other qualified beneficiaries for a
period of ten (10) years. However, the children of the spouse of the
transferor shall have a right to repurchase the land from the government
or LBP within a period of two (2) years. Due notice of the availability of
the land shall be given by the LBP to the Barangay Agrarian Reform
Committee (BARC) of the barangay where the land is situated. The
Provincial Agrarian Reform Coordinating Committee (PARCCOM) shall,
in turn, be given the due notice thereof by the BARC.

Land titles: one year repurchase from registration; here, it is two years

(2) If the land has not yet been fully paid by the beneficiary, the rights
to the land may be transferred or conveyed, with prior approval of the
DAR, to any heir of the beneficiary or to any other beneficiary who, as a
condition for such transfer or conveyance, shall cultivate the land
himself.

Lebrudo vs Loyola

Facts:
Respondent Remedios Loyola (Loyola) owns a parcel of land located in
Barangay Milagrosa, Carmona, Cavite, awarded by the Department of
Agrarian Reform (DAR) under Republic Act No. 6657 4 (RA 6657) or the
Comprehensive Agrarian Reform Law of 1988. This lot is covered by
Certificate of Land Ownership 5 (CLOA) No. 20210 issued in favor of
Loyola on 27 December 1990 and duly registered on 14 March 1991
under Transfer of Certificate of Title (TCT)/CLOA No. 998.

On 27 June 1995, petitioner Julian S. Lebrudo (Lebrudo), now deceased
and represented by his son, petitioner Reynaldo L. Lebrudo, filed with
the Office of the Provincial Agrarian Reform Adjudicator (PARAD) of
Trece Martires City, Cavite, an action 6 for the cancellation of the
TCT/CLOA in the name of Loyola and the issuance of another for the
one-half portion of the lot in Lebrudo's favor.

In a Decision 7 dated 18 December 1995, the PARAD dismissed the case
without prejudice on the ground that the case was filed prematurely. On
11 March 1996, Lebrudo re-filed the same action. 8

Lebrudo alleged that he was approached by Loyola sometime in 1989 to
redeem the lot, which was mortgaged by Loyola's mother, Cristina Hugo,
to Trinidad Barreto. After Lebrudo redeemed the lot for P250.00 and a
cavan of palay, Loyola again sought Lebrudo's help in obtaining title to
the lot in her name by shouldering all the expenses for the transfer of
57

the title of the lot from her mother, Cristina Hugo. In exchange, Loyola
promised to give Lebrudo the one-half portion of the lot. Thereafter,
TCT/CLOA No. 998 was issued in favor of Loyola. Loyola then allegedly
executed a Sinumpaang Salaysay 9 dated 28 December 1989, waiving
and transferring her rights over the one-half portion of the lot in favor of
Lebrudo. To reiterate her commitment, Loyola allegedly executed two
more Sinumpaang Salaysay 10 dated 1 December 1992 and 3 December
1992, committing herself to remove her house constructed on the
corresponding one-half portion to be allotted to Lebrudo.

Thereafter, Lebrudo asked Loyola to comply with her promise. However,
Loyola refused. Lebrudo sought the assistance of the Sangguniang
Barangay of Milagrosa, Carmona, Cavite; the Philippine National Police
(PNP) of Carmona, Cavite; and the Department of Agrarian Reform to
mediate. However, despite steps taken to amicably settle the issue, as
evidenced by certifications from the PNP and the barangay, there was no
amicable settlement. Thus, Lebrudo filed an action against Loyola.

In her Answer, Loyola maintained that Lebrudo was the one who
approached her and offered to redeem the lot and the release of the
CLOA. Loyola denied promising one-half portion of the lot as payment for
the transfer, titling and registration of the lot. Loyola explained that the
lot was her only property and it was already being occupied by her
children and their families.

ISSUE:
The main issue is whether Lebrudo is entitled to the one-half portion of
the lot covered by RA 6657 on the basis of the waiver and transfer of
rights embodied in the two Sinumpaang Salaysay.

HELD:

A Certificate of Land Ownership or CLOA is a document evidencing
ownership of the land granted or awarded to the beneficiary by DAR,
and contains the restrictions and conditions provided for in RA 6657 and
other applicable laws. Section 27 of RA 6657, as amended by RA 9700,
20 which provides for the transferability of awarded lands, states:

SEC. 27.Transferability of Awarded Lands. Lands acquired by
beneficiaries under this ACT may not be sold, transferred or conveyed
except through hereditary succession, or to the government, or to the
LBP, or to other qualified beneficiaries for a period of ten (10) years.

It is clear from the provision that lands awarded to beneficiaries under
the Comprehensive Agrarian Reform Program (CARP) may not be sold,
transferred or conveyed for a period of 10 years. The law enumerate
four exceptions: (1) through hereditary succession; (2) to the
government; 3) to the Land Bank of the Philippines (LBP); or (4) to other
qualified beneficiaries. In short, during the prohibitory 10-year period,
any sale, transfer or conveyance of land reform rights is void, except as
allowed by law, in order to prevent a circumvention of agrarian reform
laws.

In the present case, Lebrudo insists that he is entitled to one-half portion
of the lot awarded to Loyola under the CARP as payment for shouldering
all the expenses for the transfer of the title of the lot from Loyola's
mother, Cristina Hugo, to Loyola's name. Lebrudo used the two
Sinumpaang Salaysay executed by Loyola alloting to him the one-half
portion of the lot as basis for his claim.

Lebrudo's assertion must fail. The law expressly prohibits any sale,
transfer or conveyance by farmer-beneficiaries of their land reform rights
within 10 years from the grant by the DAR. The law provides for four
exceptions and Lebrudo does not fall under any of the exceptions. In
Maylem v. Ellano, 21 we held that the waiver of rights and interests over
landholdings awarded by the government is invalid for being violative of
agrarian reform laws. Clearly, the waiver and transfer of rights to the lot
as embodied in the Sinumpaang Salaysay executed by Loyola is void for
falling under the 10-year prohibitory period specified in RA 6657.

NON-LAND TRANSFER SCHEMES
(1) Leasehold Operations (LO)- lands within the land owners
retained areas or lands not yet due for distribution are placed
under leasehold to ensure farmers security over the land they
till and pre-empt their displacement while waiting for the
eventual distribution of the land;
(2) Production Profit Sharing (PPS)- This scheme is an interim
measure while the lands owned or operated by agricultural
entities await coverage under the CARP. There entities are
companies mostly involved in the commercial production of
rubber, banana, and pineapple;
(3) Stock Distribution Option (SDO). - Under this arrangement, the
farmers are entitled to dividends and other financial benefits
and are also assured of at least a representatives at the Board
of Directors, management or executive committee to protect
the rights and interest of shareholders; and
(4) Commercial Farm Deferment (SFD). This scheme provides
corporate landowners of newly-established commercial
plantations enough time to recover their investment before
such agricultural lands are covered by CARP. The deferment
period was up to 1998. Pending final land transfer, however,
these corporations shall implement a production and profit-
sharing scheme in their farms.
The monitoring of non-land transfer activities by the field offices of the
DAR has not been given much priority, as there has been greater
pressure for them to deliver their land acquisition and distribution (LAD)
targets.

LEBRUDO: There was a violation of the prohibited period (sold within
the prohibitory period). There was a waiver, signed by the owner.
Subject is the validity of the waiver

SC: Waiver is void. It violated the law.

Chapter VIII (Corporate Farms)

SEC. 31. Corporate Landowners. - Corporate landowners may
voluntarily transfer ownership over their agricultural landholdings to the
Republic of the Philippines pursuant to Section 20 hereof or to qualified
beneficiaries, under such terms and conditions consistent with this Act,
as they may agree upon, subject to confirmation by the DAR.
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.

Corporations or associations which voluntarily divest a proportion of their
capital stock, equity or participation in favor of their workers or other
qualified beneficiaries under this section shall be deemed to have
complied with the provisions of this Act: Provided, That the following
condition are complied with:

(a) In order to safeguard the right of beneficiaries who own shares of
stocks to dividends and other financial benefits, the books of the
corporation or association shall be subject to periodic audit by certified
public accountants chosen by the beneficiaries;
(b) Irrespective of the value of their equity in the corporation or
association, the beneficiaries shall be assured of at least one (1)
representative in the board of directors, or in a management or
executive committee, if one exists, of the corporation or association;
(c) Any shares acquired by such workers and beneficiaries shall have the
same rights and features as all other shares; and
(d) Any transfer of shares of stocks by the original beneficiaries shall be
void ab initio UNLESS said transaction is in favor of a qualified and
registered beneficiary within the same corporation.
58

If within two (2) years from the approval of this Act, the land or stock
transfer envisioned above is not made or realized or the plan for such
stock distribution approved by the PARC within the same period, the
agricultural land of the corporate owners or corporation shall be subject
to the compulsory coverage of this Act.

HLI vs PRAC

BASIC Facts:
THE HACIENDA COMPRISED 6,443 HAS. IN 1957 TABACALERA SOLD
THE LAND TO TADECO OWNED BY THE COJUANCOS. GSIS FINANCED
THE PURCHASE ON CONDITION THAT THE LAND WILL ULTIMATELY BE
SUBDIVIDED AND SOLD TO THE TENANTS.

IN 1980 GOVT FILED AT RTC MANILA CASE AGAINST TADECO FOR IT
TO SURRENDER THE HACIENDA TO MAR (NOW DAR) SO THE LAND
WILL BE DISTRIBUTED TO FARMERS. MANILA RTC RULED AGAINST
TADECO. TADECO APPEALED TO CA. IN 1988 CA DISMISSED THE
APPEAL SUBJECT TO REVIVAL IF TADECO FAILS TO GET APPROVAL OF
FARMERS OF STOCK DISTRIBUTION OPTION (SDO) AND IF OPTED BY
FARMERS TADECO FAILS TO IMPLEMENT SDO.

IN 1988 TADECO CREATED HACIENDA LUISITA INC (HLI) AND TADECO
BOUGHT SHARES OF HLI IN EXCHANGE OF THE HACIENDA LAND. THE
TOTAL SHARES WERE 400,000,000 WITH PAR VALUE OF
P400,000,000.00. 150,000,000 SHARES WERE FOR FARMERS AND
250,000,000 SHARES FOR OTHER STOCKHOLDERS. FARMERS AND HLI
ENTERED INTO STOCK DISTRIBUTION OPTION AGREEMENT (SDOA)
WHICH PROVIDES THAT FARMERS AGREE BECAUSE SUCH SDO WILL
IMPROVE THEIR LIVES AND THEY WILL GET GREATER BENEFITS. DAR
APPROVED SDOA.

IN 1995 HLI APPLIED TO CONVERT 500 HAS TO INDUSTRIAL USE.
CONVERSION WS APPROVED. THEN IT TRANSFERRED THE 500 HAS TO
CENTENNARY HOLDINGS INC WHICH TRANSFERRED IT TO LUISTA
INDUSTRIAL PARK CORP OR LIPCO. LIPCO CONVEYED SOME LANDS TO
RCBC AS PAYMENT FOR LOANS. IN ADDITION TO THE 500 HAS SOLD
TO LIPCO, 80.51 HAS WAS EXPROPRIATED FOR USE OF SCTEX.

IN 2003 FARMER GROUPS FILED CASE AT DAR FOR EITHER
RENEGOTIATION OF SDOA OR ITS REVOCATION ON GROUND THAT
THEIR LIVES DID NOT IMPROVE AND THEY DID NOT GET FAIR SHARES
IN THE SALE OF LANDS TO LIPCO AND FOR SCTEX USE. DAR CREATED
TASK FORCE WHICH RECOMMENDED TO PARC (PRESIDENTIAL
AGRARIAN REFORM COUCIL) THAT THE PREVIOUS ORDER APPROVING
THE SDO BE REVOKED.

IN 2005 PARC REVOKED THE SDO AND ORDERED THE COMPULSORY
ACQUISITION OF THE HACIENDA FOR DISTRIBUTION TO FARMERS.
HLI WENT TO THE SC AND ASKED FOR TRO TO STOP
IMPLEMENTATION OF PARK ORDER. IN 2006 SC ISSUED TRO. HENCE
THE CASE.
XXXXXXXXXXXXXXXXXX

ISSUE:
HLI ARGUES THAT PARC IS WITHOUT AUTHORITY TO REVOKE THE
STOCK DISTRIBUTION PLAN (SDP). THE LAW GIVES PARC THE POWER
TO APPROVDE SDP. BUT THE LAW DOES NOT PROVIDE THAT IT CAN
DISAPPROVE THE SDP. IS HLIS ARGUMENT CORRECT?

NO. IF PARC WAS GIVEN POWER TO APPROVE SDP, IT HAS THE
POWER TO REVOKE IT BY THE DOCTRINE OF NECESSARY
IMPLICATION. OTHERWISE PARC WOULD BE A TOOTHLESS AGENCY.

On the postulate that the subject jurisdiction is conferred by law, HLI
maintains that PARC is without authority to revoke an SDP, for neither
RA 6657 nor EO 229 expressly vests PARC with such authority. While, as
HLI argued, EO 229 empowers PARC to approve the plan for stock
distribution in appropriate cases, the empowerment only includes the
power to disapprove, but not to recall its previous approval of the SDP
after it has been implemented by the parties.[13][93] To HLI, it is the
court which has jurisdiction and authority to order the revocation or
rescission of the PARC-approved SDP.

HELD
We disagree.
Under Sec. 31 of RA 6657, as implemented by DAO 10, the authority to
approve the plan for stock distribution of the corporate landowner
belongs to PARC. However, contrary to petitioner HLIs posture, PARC
also has the power to revoke the SDP which it previously approved. It
may be, as urged, that RA 6657 or other executive issuances on agrarian
reform do not explicitly vest the PARC with the power to revoke/recall an
approved SDP. Such power or authority, however, is deemed possessed
by PARC under the principle of necessary implication, a basic postulate
that what is implied in a statute is as much a part of it as that which is
expressed.[14][94]
We have explained that every statute is understood, by implication, to
contain all such provisions as may be necessary to effectuate its object
and purpose, or to make effective rights, powers, privileges or
jurisdiction which it grants, including all such collateral and subsidiary
consequences as may be fairly and logically inferred from its
terms.[15][95] Further, every statutory grant of power, right or
privilege is deemed to include all incidental power, right or
privilege.[16][96]

Gordon v. Veridiano II is instructive:
The power to approve a license includes by implication, even if not
expressly granted, the power to revoke it. By extension, the power to
revoke is limited by the authority to grant the license, from which it is
derived in the first place. Thus, if the FDA grants a license upon its
finding that the applicant drug store has complied with the requirements
of the general laws and the implementing administrative rules and
regulations, it is only for their violation that the FDA may revoke the said
license. By the same token, having granted the permit upon his
ascertainment that the conditions thereof as applied x x x have been
complied with, it is only for the violation of such conditions that the
mayor may revoke the said permit.[17][97] (Emphasis supplied.)

Following the doctrine of necessary implication, it may be stated that the
conferment of express power to approve a plan for stock distribution of
the agricultural land of corporate owners necessarily includes the power
to revoke or recall the approval of the plan.

As public respondents aptly observe, to deny PARC such revocatory
power would reduce it into a toothless agency of CARP, because the very
same agency tasked to ensure compliance by the corporate landowner
with the approved SDP would be without authority to impose sanctions
for non-compliance with it.[18][98] With the view We take of the case,
only PARC can effect such revocation. The DAR Secretary, by his own
authority as such, cannot plausibly do so, as the acceptance and/or
approval of the SDP sought to be taken back or undone is the act of
PARC whose official composition includes, no less, the President as chair,
the DAR Secretary as vice-chair, and at least eleven (11) other
department heads.[19][99]

Hacienda Luisita CASE: (binalik na discussion from Chapter 3)

Hacienda Luisita Inc (HLI) was not the original corporation owning the
Hacienda Luisita Estate. But under SDO, one of the requirements is that
there has to be a corporation they will have to make a new
corporation consisting of the old corporation plus the farmer tenants as
stockholders.

There was a program approved by PARC headed by the President of the
Philippines. For a period of time it was valid especially from Aquino,
Ramos and Estrada. Time of Arroyo, there was a complaint that the
standard of living has not improved and there were violations of the
program. Investigated and allegations found to be true, the
program/agreement was cancelled by PARC headed by Arroyo. No
59

improvement of lives and a violation on the giving of homelots (yuta
para sa balay). HLI did not present any proof that they complied.

SC: annulment or revocation of the program is valid

Confronted with the issue: Previously it was legal but now it was
revoked. What shall we do now? Used Operative fact doctrine: let
tenants choose.
- Plebescite: to remain as stockholders of HLI or distribute
lands
- Chose for distribution of lands
- Right now, DAR is implementing distribution of lands to 6000
farmer beneficiaries

Dissenting of CORONA: Provision on SDO is Unconstitutional. When we
speak of agrarian reform, it is always distribution of lands.

Xxxxxxxxxxxxxxxxxxxxxxxxx

WHAT IS THIS DOCTRINE OF NECESSARY IMPLICATION?

WHAT IS IMPLIED IN A STATUTE IS AS MUCH A PART OF IT AS THAT
WHICH IS EXPRESSED.[20][94] EVERY STATUTE IS UNDERSTOOD, BY
IMPLICATION, TO CONTAIN ALL SUCH PROVISIONS AS MAY BE
NECESSARY TO EFFECTUATE ITS OBJECT AND PURPOSE, OR TO MAKE
EFFECTIVE RIGHTS, POWERS, PRIVILEGES OR JURISDICTION WHICH
IT GRANTS, INCLUDING ALL SUCH COLLATERAL AND SUBSIDIARY
CONSEQUENCES AS MAY BE FAIRLY AND LOGICALLY INFERRED FROM
ITS TERMS.[21][95]FURTHER, EVERY STATUTORY GRANT OF POWER,
RIGHT OR PRIVILEGE IS DEEMED TO INCLUDE ALL INCIDENTAL
POWER, RIGHT OR PRIVILEGE

ISSUE

RESPONDENT FARM ARGUES THAT SEC 31 OF RA 6657 WHICH ALLOWS
STOCK DISTRIBUTION INSTEAD OF LAND DISTRIBUTION IS
UNCONSTITUTIONAL AS IT CONTRAVENES SECTION 4, ART. X111 OF
THE CONSTITUTION. IS THIS ARGUMENT CORRECT?

NO. THE REQUIREMENTS FOR QUESTIONING THE
CONSTITUTIONALITY OF A LAW ARE NOT ALL COMPLIED WITH. THESE
REQUIREMENTS ARE: (1) THERE IS AN ACTUAL CASE OR
CONTROVERSY; (2) THAT THE CONSTITUTIONAL QUESTION IS RAISED
AT THE EARLIEST POSSIBLE OPPORTUNITY BY A PROPER PARTY OR
ONE WITH LOCUS STANDI; AND (3) THE ISSUE OF
CONSTITUTIONALITY MUST BE THE VERY LIS MOTA OF THE
CASE.[32][108]

THE FARMERS QUESTIONED THE CONSITUTIONALITY OF R.A. 6657
ONLY AFTER 14 YEARS SINCE THE SDP WAS DRAWN AND
IMPLEMENTED. IT IS TOO LATE. ALSO, THE CONSTITUTIONALITY
ISSUE REGARDING THE SDP WAS NOT THE LIST MOTA. IT WAS THE
IMPLEMENTATION OF THE SDP.

FARM asks for the invalidation of Sec. 31 of RA 6657, insofar as it affords
the corporation, as a mode of CARP compliance, to resort to stock
distribution, an arrangement which, to FARM, impairs the fundamental
right of farmers and farmworkers under Sec. 4, Art. XIII of the
Constitution.[33][106]
To a more specific, but direct point, FARM argues that Sec. 31 of RA
6657 permits stock transfer in lieu of outright agricultural land transfer;
in fine, there is stock certificate ownership of the farmers or farmworkers
instead of them owning the land, as envisaged in the Constitution. For
FARM, this modality of distribution is an anomaly to be annulled for
being inconsistent with the basic concept of agrarian reform ingrained in
Sec. 4, Art. XIII of the Constitution.[34][107]
Reacting, HLI insists that agrarian reform is not only about transfer of
land ownership to farmers and other qualified beneficiaries. It draws
attention in this regard to Sec. 3(a) of RA 6657 on the concept and
scope of the term agrarian reform. The constitutionality of a law, HLI
added, cannot, as here, be attacked collaterally.
The instant challenge on the constitutionality of Sec. 31 of RA 6657 and
necessarily its counterpart provision in EO 229 must fail as explained
below.
When the Court is called upon to exercise its power of judicial review
over, and pass upon the constitutionality of, acts of the executive or
legislative departments, it does so only when the following essential
requirements are first met, to wit:
(1) there is an actual case or controversy;

(2) that the constitutional question is raised at the earliest
possible opportunity by a proper party or one with locus standi; and

(3) the issue of constitutionality must be the very lis mota of the
case.[35][108]

Not all the foregoing requirements are satisfied in the case at bar.
While there is indeed an actual case or controversy, intervenor FARM,
composed of a small minority of 27 farmers, has yet to explain its failure
to challenge the constitutionality of Sec. 3l of RA 6657, since as early as
November 21, l989 when PARC approved the SDP of Hacienda Luisita or
at least within a reasonable time thereafter and why its members
received benefits from the SDP without so much of a protest. It was only
on December 4, 2003 or 14 years after approval of the SDP via PARC
Resolution No. 89-12-2 dated November 21, 1989 that said plan and
approving resolution were sought to be revoked, but not, to stress, by
FARM or any of its members, but by petitioner AMBALA. Furthermore,
the AMBALA petition did NOT question the constitutionality of Sec. 31 of
RA 6657, but concentrated on the purported flaws and gaps in the
subsequent implementation of the SDP. Even the public respondents, as
represented by the Solicitor General, did not question the
constitutionality of the provision. On the other hand, FARM, whose 27
members formerly belonged to AMBALA, raised the constitutionality of
Sec. 31 only on May 3, 2007 when it filed its Supplemental Comment
with the Court. Thus, it took FARM some eighteen (18) years from
November 21, 1989 before it challenged the constitutionality of Sec. 31
of RA 6657 which is quite too late in the day. The FARM members slept
on their rights and even accepted benefits from the SDP with nary a
complaint on the alleged unconstitutionality of Sec. 31 upon which the
benefits were derived. The Court cannot now be goaded into resolving
a constitutional issue that FARM failed to assail after the lapse of a long
period of time and the occurrence of numerous events and activities
which resulted from the application of an alleged unconstitutional legal
provision.
It has been emphasized in a number of cases that the question of
constitutionality will not be passed upon by the Court unless it is properly
raised and presented in an appropriate case at the first
opportunity.[36][109] FARM is, therefore, remiss in belatedly
questioning the constitutionality of Sec. 31 of RA 6657. The second
requirement that the constitutional question should be raised at the
earliest possible opportunity is clearly wanting.
The last but the most important requisite that the constitutional issue
must be the very lis mota of the case does not likewise obtain. The lis
mota aspect is not present, the constitutional issue tendered not being
critical to the resolution of the case. The unyielding rule has been to
avoid, whenever plausible, an issue assailing the constitutionality of a
statute or governmental act.[37][110] If some other grounds exist by
which judgment can be made without touching the constitutionality of a
law, such recourse is favored.[38][111] Garcia v. Executive Secretary
explains why:
Lis Mota the fourth requirement to satisfy before this Court will
undertake judicial review means that the Court will not pass upon a
question of unconstitutionality, although properly presented, if the case
can be disposed of on some other ground, such as the application of the
statute or the general law. The petitioner must be able to show that the
case cannot be legally resolved unless the constitutional question raised
is determined. This requirement is based on the rule that every law has
in its favor the presumption of constitutionality; to justify its nullification,
there must be a clear and unequivocal breach of the Constitution, and
60

not one that is doubtful, speculative, or argumentative.[39][112] (Italics
in the original.)
The lis mota in this case, proceeding from the basic positions originally
taken by AMBALA (to which the FARM members previously belonged)
and the Supervisory Group, is the alleged non-compliance by HLI with
the conditions of the SDP to support a plea for its revocation. And before
the Court, the lis mota is whether or not PARC acted in grave abuse of
discretion when it ordered the recall of the SDP for such non-compliance
and the fact that the SDP, as couched and implemented, offends certain
constitutional and statutory provisions. To be sure, any of these key
issues may be resolved without plunging into the constitutionality of Sec.
31 of RA 6657. Moreover, looking deeply into the underlying petitions of
AMBALA, et al., it is not the said section per se that is invalid, but rather
it is the alleged application of the said provision in the SDP that is
flawed.

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