AGRARIAN LAW l ATTY.

CAPANAS l TANYA IBANEZ

c)
REVOLUTIONARY KIND OF EXPROPRIATION
REVOLUTIONARY KIND OF EXPROPRIATION
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.
Take note: 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 is the purpose?
It is 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.
CONFED v. DAR
Petitioners claim that they own private agricultural lands devoted
to sugarcane. They and their predecessors-in-interest have been
planting sugarcane on their lands allegedly since time
immemorial.
They contend 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.
Under RA 6657, there are two modes of acquisition of private
agricultural lands: compulsory and voluntary. 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.
Two chief limitations in the exercise of eminent domain
1. Taking must be for 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.

RA 3844: AGRICULTURAL LAND REFORM CODE

SECURITY OF TENURE
SECURITY OF TENURE
Section 7. Tenure of Agricultural Leasehold Relation
The agricultural leasehold relation once established shall confer
upon the agricultural lessee the right to continue working on the
landholding until such leasehold relation is extinguished. The
agricultural lessee shall be entitled to security of tenure on his
landholding and cannot be ejected unless authorized by the Court
for cause herein provided.
In other words. The landowner cannot just dispossess, remove or
eject a tenant or lessee from the land without authorized cause.
Liabilities of lessor if he ejects tenant without
authorization
a) Fine or imprisonment
b) Damages suffered
c) Attorneys fees
d) Remuneration for last income

Provided, that in case the death or permanent incapacity of the

agricultural lessee occurs during the agricultural year, such choice
shall be exercised at the end of that agricultural year:

Provided further, that in the event the agricultural lessor fails to

exercise his choice within periods herein provided, the priority
shall be in accordance with the order herein established.
In case of death or permanent incapacity of the agricultural lessor,
the leasehold shall bind his legal heirs.

PERIOD OF REDEMPTION
PERIOD OF REDEMPTION
Section 12. Lessees right of Redemption
In case the landholding is sold to a third person without the
knowledge of the agricultural lessee, the latter shall have the right
to redeem the same at a reasonable price and consideration.
Provided, that the entire landholding sold must be redeemed.
Provided further, that where there are 2 or more agricultural
lessees, each shall be entitled to the said preferential right only to
the extent of the area actually cultivated by him. The right of
redemption may be exercised within two years from the
registration of the sale, and shall have priority over any other right
of legal redemption.
General rule:
The agricultural lessee shall have the right to redeem the
landholding within 2 years from registration of the sale, provided:

The entire landholding sold must be redeemed

Where there are 2 or more agricultural lessees, each shall

be entitle only to the extent of the area actually cultivated
by him.
Po v. Dampal
Ruling: Sec. 12. Lessees right of redemption. In case the
landholding is sold to a third person without the knowledge of the
agricultural lessee, the latter shall have the right to redeem the
same at a reasonable price and consideration: Provided, That
where there are two or more agricultural lessees, each shall be
entitled to said right of redemption only to the extent of the area
actually cultivated by him. The right of redemption under this
Section may be exercised within one hundred eighty days (180
days) from notice in writing which shall be served by the vendee
on all lessees affected and the Department of Agrarian Reform
upon the registration of the sale, and shall have priority over any
other right of legal redemption. The redemption price shall be the
reasonable price of the land at the time of the sale.
The admitted lack of written notice on Dampal and the DAR thus
tolled the running of the prescriptive period. Petitioners
contention that Dampal must be considered to have had
constructive knowledge thereof fails in light of the express
requirement for notice to be in writing.
GROUNDS TO DISPOSSESS
GROUNDS TO DISPOSSESS
1.
2.
3.
4.
5.

a)
b)

Surviving spouse
Eldest direct descendant by consanguinity

1|UNIVERSITY OF SAN CARLOS

Failure to comply with terms and conditions of

agreement
Planting of crops or the use of land for other purpose
than that agreed upon
Failure to adopt proven farm practices to conserve land
Fault or negligence resulting in substantial damage
Non-payment of rental when due
One of the important grounds is this non-payment of the
rental when due. Going back to the relationship, LO
provides the land, and the lessee provides the labor and
when there is production they are supposed to divide the
produce. The produce there to be given by the lessee to
the 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.

LEASEHOLD SURVIVES EVEN AFTER DEATH

Leasehold relation not extinguished by death or incapacity
Section 9 In case of death or permanent incapacity of the
agricultural lessee to work his landholding, the leasehold shall
continue between the agricultural lessor and the person who can
cultivate the landholding personally, chosen by the agricultural
lessor within 1 month from such death or permanent incapacity,
from among the following:

The next eldest descendant/s in the order of their age

6.

Employed a sublessee

Take note: Under the current law, CARL, there is no provision on

ejectment. So which one will you consult? This law (RA 3844).

AGRARIAN LAW l ATTY. CAPANAS l TANYA IBANEZ

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.
Sta. Ana v. Carpo
Ruling: Section 37 the burden of proof to show the existence of
a lawful case for the ejectment of an agricultural lessee rest upon
the agricultural lessor. Good faith was clearly demonstrated by
Marciano and petitioner when, because respondents refused to
accept the proffered payment, they even went to the point of
seeking government intervention in order to address their
problems with respondents. Absent such deliberate and willful
refusal to pay lease rentals, petitioner's ejectment from the
subject land is not justified.
Natividad v. Mariano
Ruling: The agricultural lessee's failure to pay the lease rentals,
in order to warrant his dispossession of the landholding, must be
willful and deliberate and must have lasted for at least two (2)
years. Mere failure of an agricultural lessee to pay the agricultural
lessor's share does not necessarily give the latter the right to eject
the former absent a deliberate intent on the part of the
agricultural lessee to pay.
The respondents alleged non-payment did not last for the
required two-year period. The rental payments were not yet due
and the respondents were not in default at the time Ernesto filed
the petition for ejectment as Ernesto failed to prove his alleged
prior verbal demands. Additionally, assuming arguendo that the
respondents failed to pay the lease rentals, we do not consider the
failure to be deliberate or willful. The receipts on record show that
the respondents had paid the lease rentals for the years 19881998.
To be deliberate or willful, the non-payment of lease rentals must
be absolute, i.e., marked by complete absence of any payment.
This cannot be said of the respondents case. Hence, without any
deliberate and willful refusal to pay lease rentals for two years,
the respondents ejectment from the subject property, based on
this ground, is baseless and unjustified.
RECLASS OF LAND AS GROUND TO EXTINGIUISH
LEASEHOLD
RECLASSIFICATION
AS
GROUND
TO
EXTINGUISH
LEASEHOLD
Santos v. CA
Land was reclassified to residential lands. Consequently, the
juridical tie between petitioners and respondent was severed, for
no tenurial relationship can exist on a land that is no longer
agricultural.
Section 36 provides the different grounds and manner by which a
tenant can be lawfully ejected or dispossessed of his landholding.
One of them is the reclassification of the landholding from
agricultural to non-agricultural.
However, a mere reclassification of agricultural land does not
automatically allow a landowner to change its use and thus cause
the ejectment of the tenants. He has to undergo the process of
conversion before he is permitted to use the agricultural land for
other purposes.
Conversion The act of changing the current use of a piece of
agricultural land into some other use as approved by the
Department of Agrarian Reform.
Reclassification The act of specifying how agricultural lands
shall be utilized for non-agricultural uses such as residential,
industrial, commercial, as embodied in the land use plan, subject
to the requirements and procedure for land use conversion.

RA 6657: COMPREHENSIVE AGRARIAN REFORM LAW

AGRICULTURAL ACTIVITY VIS-A-VIS RAISING OF
LIVESTOCK
AGRICULTURAL ACTIVITY
Section 3 (b)
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

2|UNIVERSITY OF SAN CARLOS

performed by a farmer in conjunction with such

operations done by person whether natural or juridical.

farming

Luz Farms v. DAR

Ruling: Sec 3 (b) was declared unconstitutional (raising of
livestock, poultry and swine) use of land is incidental and not the
principal factor. Raising of livestock, swine and poultry is different
from crop or tree farming. Hence, lands devoted to livestock are
not to be covered under CARP.
It is an 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, waters and blowers, feed mill
with grinders, mixers, conveyors, exhausts and generators,
extensive warehousing facilities for feeds and other supplies, antipollution equipment like bio-gas and digester plants augmented
by lagoons and concrete ponds, deep wells, elevated water tanks,
pump houses, sprayers, and other technological appurtenances.
Take note: Livestock and poultry do not sprout from the land.
Republic v. Lopez
Facts: Petitioner, pursuant to the Luz Farms case, filed with the
Provincial Agrarian Reform Office (PARO) an application for
exemption of his lots from coverage of the CARL because the said
parcels of land 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).
Ruling: Limot lands were not directly, actually and exclusively
used for livestock raising. 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.
DEFINITION OF AGRICULTURAL LAND
AGRICULTURAL LAND
Section 3 (c)
Refers to land devoted to agricultural activity as defined in this Act
and not classified as mineral, forest, residential, commercial or
industrial land.
Alangilan v. Office of the President
Petitioner insists on exemption of the Alangilan landholding from
CARP coverage. It argues that the subject landholding had already
been converted into non-agricultural use long before the advent of
the CARP. The passage of the 1982 Ordinance, classifying the
property as reserved for residential, it asserts, effectively
transformed the land into non-agricultural use, and thus, outside
the ambit of the CARL.
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 residential1. 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.
AGRARIAN DISPUTE
AGRARIAN DISPUTE
1. Any controversy relating to tenurial arrangements
(leasehold, tenancy, stewardship) over lands devoted to
agriculture
2. Any controversy relating to compensation of lands acquired
under CARL and other terms and conditions of transfer of
ownership.
Essential requisites of leasehold relationship: 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

AGRARIAN LAW l ATTY. CAPANAS l TANYA IBANEZ

6)

Sharing of harvest between parties

Take note:
All requisites must concur, absence of one does not make one a
tenant. Hence, no agrarian dispute.
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 agricultural
land.
Isidro v. CA
Facts: Private respondent 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 because land is
agricultural and so agrarian.
Ruling: Jurisdiction over subject matter is determined from the
allegations in the 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 agricultural land does not automatically make such
case agrarian. Six requisites were not present. There was no
contract to cultivate & petitioner failed to substantiate claim that
he was paying rent for use of land.
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.
Ruling: 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.
Almuete v. Andres
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.
Issue: Whether there is agrarian dispute
Ruling: NO. This is controversy relating to ownership of farmland
so it is 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.
Nicorp Devt v. De Leon
Facts: Respondent filed a complaint before the Office of the
Provincial Agrarian Reform Adjudicator (PARAD) praying that
petitioners be ordered to respect her tenancy rights over a parcel
of land in the name of the De Leon sisters.
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 and that 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 no longer physically capable
of tilling the land; that the MARO issued a certification that the
land had no registered tenant; that respondent could not be
regarded as a landless tiller under the CARP because she owns

3|UNIVERSITY OF SAN CARLOS

and resides in the property adjacent to the subject land which she
acquired through inheritance; that an Affidavit of Non-Tenancy was
executed by the De Leon sisters when they sold the property to
him.
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 there is agrarian dispute.
Held: No. There is no substantial evidence to support 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 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 merely stated that the De Leon sisters 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.
Heirs of Quilo v. DBP
Ruling: Notice of conference and the affidavits only showed that
Quinto filed a complaint against the spouses Oliveros regarding
the land he was cultivating. The affidavits confirmed merely that
Quinto had been planting on
the land. Documents no way confirmed that his presence on the
land was based on a tenancy relationship that the spouses
Oliveros had agreed to.
Mere occupation or cultivation of an agricultural land does not
automatically establish a leasehold relation or make one a tenant.
The affidavit only stated that Quilo had given his share of the
harvest to the spouses (the details fell short)
Petitioners should have presented receipts or any other evidence
to show that there were sharing of harvest and that there was an
agreed system of sharing between them. Deposit cannot prove
the existence of a sharing agreement. It must be showed that the
deposit is made in relation to tenancy.
Reyes v. Heirs of Floro
Ruling: Certification from Bautista has little evidentiary value,
without any corroborative evidence. The certification was not even
presented as a witness. Similarly, Reyes was not included as a
legitimate and properly registered agricultural tenant in the
supposed Deed of Absolute sale with Agricultural Tenants
Conformity which Bautista executed in favor of Zenaida. Zenaida
was convicted of falsification of public document.
What is the value of a notarized document?
Before a document is received by the court, they will look into the
question of admissibility. If notarized, there is no need to present a
witness, since there is a presumption. If not notarized, you need a
witness to testify on the document.
Davao New Town v. Spouses Saliga
Issue: At the core of the controversy is the questioned
reclassification of the property to non-agricultural uses. This issue
is intertwined with and on which depends the resolution of the
issue concerning the claimed agricultural leasehold relationship.
Ruling: No tenancy relationship exists between DNTDC and the
respondents for the tenancy relationship between the ceased
when the property was reclassified.
Court outlined the essential requisites of a tenancy relationship,
all of which must concur for the relationship to exist.
1. The parties are the landowner and the tenant
2. The subject is agricultural land
3. There is consent

AGRARIAN LAW l ATTY. CAPANAS l TANYA IBANEZ

4. The purpose is agricultural production
5. There is personal cultivation
6. There is sharing of harvests
The absence of any of these requisites does not make an occupant
a cultivator, or a planter, a de jure tenant. Consequently, a person
who is not a de jure tenant is not entitled to security of tenure nor
covered by the land reform program of the government under any
existing tenancy laws.
In this case, we hold that no tenancy relationship exists between
DNTDC, as the owner of the property, and the respondents, as the
purported tenants; the second essential requisite as outlined
above the subject is agricultural land is lacking. To recall, the
property had already been reclassified as non-agricultural land.
Accordingly, the respondents are not de jure tenants and are,
therefore, not entitled to the benefits granted to agricultural
lessees under the provisions of P.D. No. 27, in relation to R.A. No.
6657.
HOMESTEAD PATENT
HOMESTEAD PATENT
A mode of acquiring alienable and disposable lands of public
domain for agricultural purposes conditioned upon actual
cultivation and residence.
Where do you file the application?
Before the CENRO where the land being applied is located.

AWARD TO CHILD OF LANDOWNER

Three 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
(2) That he is actually tilling the land or directly managing
the farm
Take note: 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. 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.
EXEMPTION FROM COVERAGE
EXEMPTION FROM COVERAGE
Section 10. Exemptions and Exclusion from coverage of
CARL
1. Lands ADE (actually, directly and exclusively) used for
parks, wildlife, forest reserves, reforestation, fish
sanctuaries and breeding grounds, watershed and
mangroves.

Who are qualified?

Citizens of Philippines over 18 years old and not an owner of more
than 12 hectares of land (Art XII, Sec. 3, 1987 Constitution)

2.

Private lands ADE used for prawn farms and fishponds

3.

Lands ADE used and found 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.

WHO CAN CLAIM EXEMPTION

Section 6. Retention Limits. In no case shall retention by the
landowner exceed 5 hectares. 3 hectares may be awarded to each
child of the landowner, subject to the following qualifications: (1)
that he is at least 15 years of age and (2) that he is actually tilling
the land or directly managing the farm. Provided, 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.

Qualifications under Sec 6 in order to retain the

homestead:
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)
RETENTION LIMIT OF LANDOWNER
WHAT IS NOT COVERED?
Section 6. Retention Limits Except as otherwise provided in this
Act, no person may own or retain 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), but in no case shall retention
by the landowner exceed 5 hectares. 3 hectares may be
awarded to each child of the landowner, subject to the
following qualifications: (1) that he is at least 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.
HOW MANY HECTARES ARE NOT COVERED?
Section 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.
AWARD TO CHILD OF LANDOWNER

4|UNIVERSITY OF SAN CARLOS

Take note: Lands with 18% slope or over is exempt

because of possible soil erosion
Central Mindanao v. DARAB
Ruling: 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.
Take note:

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
Supreme Court 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.
LAND DISTRIBUTION TO QUALIFIED BENEFICIARIES

WAYS
IN
DISTRIBUTING
BENEFICIARIES
1.
2.
3.

LANDS

TO

QUALIFIED

Compulsory acquisition (sec 16)

Voluntary offer to sell or voluntary land transfer (sec 20)
Non-land transfer schemes
a. Stock distribution option (SDO)
b. Production and profit sharing (PPS)

AGRARIAN LAW l ATTY. CAPANAS l TANYA IBANEZ

c.

Leasehold operation (sec 12)

What are the two aspects of land transfer schemes?

1.

Voluntary The landowner will volunteer to convey the

land to the government, agree on the price and then
execute the deed of conveyance

2.

Compulsory If the landowner refuses the notice of

acquisition and notice of coverage. Gov. will have to
expropriate. This time is a different expropriation.
IDENTIFICATION AND SELECTION OF BENEFICIARIES

Who has jurisdiction in the identification/selection of

beneficiaries?
It is DAR who is mandated to select CARP beneficiaries.
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.

Who executes a leasehold contract?

The agricultural lessor and lessee.
Who has jurisdiction to cancel a leasehold contract?
DARAB. (Department of Agrarian Adjudication Board). It exercises
quasi-judicial powers. With respect to quasi-judicial powers,
leasehold contract involves rights, obligations and others terms of
the contract
Take note: 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.

Certificate of Land Ownership Award

CLOA is a document evidencing ownership of the land granted or
awarded to the beneficiary by DAR
Who has jurisdiction to issue, correct or cancel CLOAs?
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.

COMPULSORY ACQUISITION
COMPULSORY ACQUISITION
What is compulsory acquisition?
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.
What is the rationale?
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 DAR 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.
Section 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

5|UNIVERSITY OF SAN CARLOS

the owners thereof, by personal delivery or registered mail, and

post the same in a conspicuous place in the municipal building
and barangay hall of the place where the property is located. Said
notice shall contain the offer of the DAR to pay a corresponding
value in accordance with the valuation set forth in Sections 17, 18,
and other pertinent provisions hereof.
(b) Within 30 days from the date of receipt of written notice by
personal delivery or registered mail, the landowner, his
administrator or representative shall inform the DAR of his
acceptance or rejection of the offer.
(c) If the landowner accepts the offer of the DAR, the LBP shall pay
the landowner the purchase price of the land within thirty (30)
days after he executes and delivers a deed of transfer in favor of
the Government and surrenders the Certificate of Title and other
muniments of title.
(d) In case of rejection or failure to reply, the DAR shall
conduct summary administrative proceedings to determine the
compensation of the land by requiring the landowner, the LBP and
other interested parties 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
LEASEHOLD
CONTRACT
matter is deemed submitted
for decision.
The DAR shall decide
the case within thirty (30) days after it is submitted for decision.
(e) Upon receipt by the landowner of the corresponding payment
or in case of rejection or no response from the landowner, upon
the deposit with an accessible bank designated by the DAR of the
compensation in cash or LBP bonds in accordance with this Act,
the DAR shall take immediate possession of the land and shall
request the proper Register of Deeds to issue a Transfer Certificate
of Title (TCT) in the name of the Republic of the Philippines. The
DAR shall thereafter proceed with the redistribution of the land to
the qualified beneficiaries.
(f) Any party who disagrees with the decision may bring the
matter to the court of proper jurisdiction for final determination of
just compensation.
Who shall be notified?
The landowner is sent a notice of acquisition which shall contain
the offer/valuation by the DAR. Notice is done either through
JURISDICTION TO ISSUE/CANCEL CLOA
personal delivery or registered mail, and posting in a conspicuous
place in the municipal building or barangay hall.
NOTICE OF COVERAGE AND ACQUISITION
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.

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.
LBP v. Heirs of Trinidad
Facts: Private respondent is the registered owner of a parcel of
agricultural land which was covered by RA No. 6657 through the
Voluntary Offer to Sell (VOS) scheme of the CARP. He offered to
the DAR the price of P2M per hectare for said portion of the land
covered by CARP. Petitioner Land Bank of the Philippines (LBP)
valued and offered as just compensation the amount of
P1,145,806.06 or P76,387.57 per hectare. The offer was rejected
by private respondent. 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 to fix the just
compensation, where they rendered a decision fixing the

AGRARIAN LAW l ATTY. CAPANAS l TANYA IBANEZ

compensation of the property at P10,294,721.00 or P686,319.36
per hectare.
Petitioner LBP filed a petition against private respondent for
judicial determination of just compensation before the Special
Agrarian Court.
Private respondent, on the other hand, filed a similar petition
against DAR before the same Special Agrarian Court and 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.
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 P1,145,806M and not P10,294,721.00 as determined by
the DARAB.
Consequently, a decision was issued ordering petitioner LBP to
deposit for release to the private respondent the DARAB
determined just compensation of P10,294,721M Petitioner LBP
filed a motion for reconsideration of the said order to deposit.
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 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.
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?
Held: Supreme Court held that par (e) should be related to pars
(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, SC is saying that it is the offer of the LBP that will
determine what the correct amount to be deposited is and not the
amount after the determination of just compensation in a
summary administrative proceeding.
Reason: If the DAR will wait for the summary administrative
proceedings, this will hamper land redistribution process.

JUST COMPENSATION
What is meant by just compensation?
The 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 and ample.
What are the factors to consider in determining just
compensation?
a. The cost of acquisition of the land
b. The value of the standing crop
c.
The current value of like properties, its nature, actual use
and income
d. The sworn valuation by the owner
e. Tax declarations
f.
Assessment made by government assessors
g. 70% of the zonal valuation of the Bureau of Internal
Revenue (BIR), translated into a basic formula by the
DAR
Take note: 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.
Preliminary determination
The determination of just compensation by the DAR during the
compulsory acquisition proceedings of Section 16 of RA 6657 is
preliminary only. Hence, the court can review. Any party who
disagrees with the decision may bring the matter to the court of
proper jurisdiction for final determination of just compensation.

6|UNIVERSITY OF SAN CARLOS

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.
Association of Small Landowners v. Sec of DAR
Ruling: 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.
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.
Therefore, payment of the just compensation is not always
required to be made fully in money.
LBP v. Dumlao
Facts: Respondents are owners of agricultural lands covered
under PD 27. Determination of just compensation remained
pending with DAR, so they filed complaint with RTC for
determination.
Ruling: 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 date of taking of the subject land for purposes of computing
just compensation should be reckoned from the issuance dates of
JUSTbecause
COMPENSATION
the emancipation patents
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.
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;
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 agricultural 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, there is only one
factor in determining just compensation (average crop harvest),
while in RA6657, there are a lot.
DAR v. Heirs of Domingo

AGRARIAN LAW l ATTY. CAPANAS l TANYA IBANEZ

Facts: The late Angel T. Domingo is the registered owner of a rice
land. PD 27 was subsequently issued and 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.

Even reclassification and plans for expropriation by LGUs will not

ipso facto convert an agricultural property to residential, industrial
or commercial. Thus,

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.

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.

Domingo opposed the said valuation and claimed that the just
compensation for the subject land should be computed using the
parameters set forth under RA 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.

Respondent's evidence of the value of his land as residential

property 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.

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.

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."

Ruling: 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.
It would certainly be inequitable to determine just compensation
based 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 v. Livioco
Facts: Respondent Livioco was the owner of 3 sugar land. He
offered his sugar land to the DAR for acquisition under the CARP
at P30.00 per square meter. The voluntary-offer-to-sell (VOS) form
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. LBP set
the price at P3.21 per square meter for 26 hectares. Livioco was
then promptly informed of the valuation. However,Livioco did not
act upon the notice given to him by both government agencies.
Subsequently, 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 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. The
request was denied by the Regional Director 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
determined?

the

compensation

for

respondent's

properly

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. There are three important concepts in
this definition the character of the property, its price, and the
time of actual taking.
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 so as to
prevent fraudulent evasions from agrarian reform coverage.

7|UNIVERSITY OF SAN CARLOS

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). 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.
Sirs discussion: Landowner 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 agricultural 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 v. Nable
Ruling: The Congress has thereby required that any
determination of just compensation should consider the following
factors, namely: (a) the cost of the acquisition of the land; (b) the
current value of like properties; (c) the nature, actual use and
income of the land; (d) the sworn valuation by the owner; (e) the
tax declarations; (f) the assessment made by government
assessors; (g) the social and economic benefits contributed to the
property by the farmers and farmworkers and by the Government;
and (h) the fact of the non-payment of any taxes or loans secured
from any government financing institution on the land.
Although Section 17 of Republic Act No. 6657 has not explicitly
mentioned the farming experience and the thumb method of
conversion as methods in the determination of just compensation,
LBP cannot deny that such methods were directly relevant to the
factors listed in Section 17, particularly those on the nature, actual
use and income of the landholding.
LBP v. DAR
Facts: 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 them of the amount representing the difference
between the initial value.

AGRARIAN LAW l ATTY. CAPANAS l TANYA IBANEZ

Ruling: There is a 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 an oppressive exercise of eminent domain if you do not allow
withdrawal. Also, 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 Deleste v. LBP
Facts: 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.
Ruling: SC agreed 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
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." 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.

RA 6657 Comprehensive Agrarian Reform Law

Main governing law of Agrarian Land Reform here in the
Philippines.

PAYMENT OF INTEREST
Apo Fruits v. CA
Facts: RT rendered judgment ordering DAR/LBP to pay interest at
the rate of 12% per annum on the above-fixed amount of fair,
reasonable and just compensation computed from the time the
complaint was filed until the finality of this decision. After this
decision becomes final and executory, the rate of 12% shall be
additionally imposed on the total obligation until payment thereof
is satisfied.

8|UNIVERSITY OF SAN CARLOS

Issue: Whether or not the interest was validly imposed.

Held: NO. 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.
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. 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.
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.
LBP v. Rivera
Facts: The respondents are the co-owners of a parcel of
agricultural land that was placed under the coverage of PD 27.
After DAR directed payment, LBP approved the payment of
P265,494 inclusive of 6% increment.
Consequently, the respondents instituted a civil case 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 were governed and
valued in accordance with the provisions of Executive Order No.
228 and 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.
Ruling: 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 GOVERNING
the amount found
LAW 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.
LBP v. Gallego
Facts: Respondents are
co-owners
parcels of agricultural land.
PAYMENT
OF of
INTEREST
DAR placed a portion of the property under the coverage of PD27.
However, teh parties failed to agree on the amount of just
compensation which prompted respondents to file a petition
before the RTC for the determination of just compensation.
The trial court adopted the formula prescribed in PD27 in arriving
at the amount of just compensation. Also, trial court also imposed
"interest in kind" payable from 1972 to 2002 by multiplying by 1.8
the Average Gross Production of palay of 121.6 cavans per hectare
multiplied by 2.5.

AGRARIAN LAW l ATTY. CAPANAS l TANYA IBANEZ

Ruling: In the determination of the interest, if it is payable in
kind, its value shall be appraised at the current price of the
products or goods at the time and place of payment.
BENEFICIARIES
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
(g) Others directly working on the land
Take note: 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.
Take note: Presupposing that the beneficiary has registered
with the department.

6.

7.

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.
Farmers already in place and those not accommodated in
the distribution of privately-owned lands will be given
preferential rights in the distribution of lands from the
public domain.

9|UNIVERSITY OF SAN CARLOS

8.

No qualified beneficiary may own more than three (3)

hectares of agricultural land. (Sec. 23)

DAR v. Polo Coconut Plantation Co.

Facts: Beneficiaries to be awarded with the land of Polo Coconut
were questioned by Polo Coconut. According to them, the
beneficiaries are not tenants of their land, thus not qualified.
Ruling: Section 22 of the CARL does not limit qualified
beneficiaries to tenants of the landowners. It is DAR who is
mandated to select CARP beneficiaries. Thus, the DAR cannot be
deemed to have committed grave abuse of discretion simply
because its chosen beneficiaries were not tenants of Polo Coconut.
PROHIBITION ON TRANSFER BY BENEFICIARY
PROHIBITION ON TRANSFER BY BENEFICIARY
Section 27. Transferability of Awarded Lands
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.
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.
General Rule:
Lands acquired by beneficiaries may not be sold, transferred or
conveyed for a period of 10 years. Hence, any sale during the 10
year prohibitory period is void.
Exceptions:
1. Hereditary succession
2. To the government
3. To the Land Bank of the Philippines
4. Other qualified beneficiaries
Take note: Waiver of rights and interests over the landholdings is
void.
RIGHT TO REPURCHASE
In case the land is sold, the children of the spouse of the
transferor shall have a right to repurchase the land from the
government or the LBP within 2 years.