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Agrarian Law Reviewer 3

A. COVERAGE The tenant farmer, whether in land classified as landed estate or not,
shall be deemed owner of a portion constituting a family-size farm of
PRESIDENTIAL DECREE NO. 27 five (5) hectares if not irrigated and three (3) hectares if irrigated;
DECREEING THE EMANCIPATION OF TENANTS FROM THE In all cases, the landowner may retain an area of not more than seven
BONDAGE OF THE SOIL, TRANSFERRING TO THEM THE (7) hectares if such landowner is cultivating such area or will now
OWNERSHIP OF THE LAND THEY TILL AND PROVIDING cultivate it;
THE INSTRUMENTS AND MECHANISM THEREFOR For the purpose of determining the cost of the land to be transferred
Inasmuch as the old concept of land ownership by a few has to the tenant-farmer pursuant to this Decree, the value of the land
spawned valid and legitimate grievances that gave rise to violent shall be equivalent to two and one-half (2 1/2) times the average
conflict and social tension, harvest of three normal crop years immediately preceding the
The redress of such legitimate grievances being one of the promulgation of this Decree;
fundamental objectives of the New Society, The total cost of the land, including interest at the rate of six (6) per
Since Reformation must start with the emancipation of the tiller of centum per annum, shall be paid by the tenant in fifteen (15) years of
the soil from his bondage, fifteen (15) equal annual amortizations;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of In case of default, the amortizations due shall be paid by the farmers'
the Philippines, by virtue of the powers vested in me by the cooperative in which the defaulting tenant-farmer is a member, with
Constitution as Commander-in-Chief of all the Armed Forces of the the cooperative having a right of recourse against him;
Philippines, and pursuant to Proclamation No. 1081, dated The government shall guaranty such amortizations with shares of
September 21, 1972, and General Order No. 1 dated September 22, stock in government-owned and government-controlled corporations;
1972, as amended do hereby decree and order the emancipation of all No title to the land owned by the tenant-farmers under this Decree
tenant farmers as of this day, October 21, 1972; shall be actually issued to a tenant-farmer unless and until the tenant-
This shall apply to tenant farmers of private agricultural lands farmer has become a full-fledged member of a duly recognized
primarily devoted to rice and corn under a system of sharecrop or farmer's cooperative;
lease-tenancy, whether classified as landed estate or not;

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Title to land acquired pursuant to this Decree or the Land Reform WHEREAS, the Department of Agrarian Reform found that in the
Program of the Government shall not be transferable except by course of implementing my directive there are many landowners of
hereditary succession or to the Government in accordance with the tenanted ricecorn lands with areas of seven hectares or less who also
provisions of this Decree, the Code of Agrarian Reforms and other own other agricultural lands containing more than seven hectares or
existing laws and regulations; lands used for residential, commercial, industrial or other urban
The Department of Agrarian Reform through its Secretary is hereby purposes where they derive adequate income to support themselves
empowered to promulgate rules and regulations for the and their families;
implementation of this Decree. WHEREAS, it is therefore necessary to cover said lands under the
All laws, executive orders, decrees and rules and regulations, or parts Land Transfer Program of the government to emancipate the tenant-
thereof, inconsistent with this Decree are hereby repealed and or farmers therein.
modified accordingly. NOW, THEREFORE, I, FERDINAND E. MARCOS, President of
Done in the City of Manila, this 21st day of October, in the year of the Philippines, do hereby order the following:
Our Lord, nineteen hundred and seventy-two. 1. You shall undertake to place under the Land Transfer Program
of the government pursuant to Presidential Decree No. 27, all
LETTER OF INSTRUCTIONS NO. 474 tenanted rice/corn lands with areas of seven hectares or less
TO : The Secretary of Agrarian Reform belonging to landowners who own other agricultural lands of more
WHEREAS, last year I ordered that small landowners of tenanted than seven hectares in aggregate areas or lands used for residential,
rice/corn lands with areas of less that twenty-four hectares but above commercial, industrial or other urban purposes from which they
seven hectares shall retain not more than seven hectares of such derive adequate income to support themselves and their families.
lands except when they own other agricultural lands containing more 2. Landowners who may choose to be paid the cost of their lands
than seven hectares or land used for residential, commercial, by the Land Bank of the Philippines shall be paid in accordance with
industrial or other urban purposes from which they derive adequate the mode of payment provided in Letter of Instructions No. 273
income to support themselves and their families; dated May 7, 1973.

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Zurbano v Estrella commercial, industrial or other urban purposes from which they
By far, one of the most far-reaching governmental reforms, derive adequate income to support themselves and their families. 5
acclaimed both here and abroad, is Presidential Decree No. 27 issued It is the validity of such Letter of Instruction that is assailed in this
on October 21, 1972, decreeing the emancipation of the tenants from prohibition proceeding on the ground that it is class legislation and,
the bondage of the soil and transferring the ownership of the land therefore, violative of the equal protection guarantee; that it is "a
they till. Its validity was assumed in Chavez v. Zobel, 1 and upheld form of tyrannical imposition by a strong and powerful state" and, as
2
inGonzales v. Estrella. It could not have been otherwise. The such, violative of the due process clause; and that it would as applied
Constitution explicitly provides: The State shall formulate and to petitioners, be a taking of private property without just
implement an agrarian reform program aimed at emancipating the compensation. 6
tenant from the bondage of the soil and achieving the goals Petitioners-spouses in this prohibition proceeding alleged that they
3
enunciated in this Constitution. The Constitution is worded in the are the owners of agricultural lands, with six (6) parcels planted to
future tense; the State is to formulate and implement a vitally needed coconuts, 56 hectares in area and two (2) parcels of riceland, 1.86
program. t was signed on November 30, 1972. It is worth recalling hectares in size. 7 It is further alleged that said "coconut lands which
that a month and nine days earlier, to be exact, on October 21, 1972, are scattered in different barrios are very far from the poblacion of
the epochal Presidential Decree No. 27 was issued by President Labo where petitioners reside which they could not even visit due to
Marcos. the unsettled peace and order conditions," resulting in their only
Thereafter. under a Letter of Instruction dated October 21, productive property being the ricelands. 8 On August 10, 1982,
1976, 4 the President directed the then Secretary, now Minister of "petitioners received a communication from respondent Salvador
Agrarian Reform, to "undertake to place under the Land transfer Pejo of Region V of the Ministry of Agrarian Reform informing
Program of the government pursuant to Presidential Decree No. 27, them that the processing of the land transfer had been initiated and
all tenanted rice/corn lands with areas of seven hectares or less requiring them to submit to the Regional Office all the necessary
belonging to landowners who own other agricultural lands of more documents pertinent to their claim" otherwise, the farmer-
than seven hectares ill aggregate areas or lands used for residential beneficiaries would be issued the corresponding emancipation
patents. 9 When they asked why a small piece of property of only

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1.86 hectares of riceland should be under Presidential Decree No. 27, are, moreover, built-in safeguards to preclude any unlawful taking of
they were informed that the text of the letter of Instruction No. 474 private property.
calls for the two parcels of ricelands being included in the Land 1. There is no merit to the contention that Letter of Instruction No.
Transfer Program. 10 474 denies equal protection. To condemn as class legislation an
The Solicitor General, in the Comment 11 he was required to file, executive act intended to promote the welfare of tenants is to ignore
stated that the total area of the landholding of the petitioners is 56.14 not only the letter of the Constitutionincidentally cited in the
hectares in coconut lands and two parcels of riceland of 1.86 petition itselfrequiring the "formulation and implementation of an
hectares. It was further stated that on August 2, 1982, respondent agrarian reform program aimed at emancipating the tenant from the
Director Pejo did take the initial steps for the issuance of the bondage of the soil 13 but also the nation's history. Among the
Emancipation Patent to the farmer beneficiaries based on the existing highlights in the proceedings in the First Constitutional Convention
record of his office and earnestly required the utmost cooperation was the reference by then Delegate Miguel Cuaderno to the sad
from petitioners, but despite the initiation of the proceeding for the plight of the national hero, Jose Rizal, reflective of the evil spawned
land transfer claim, there was failure to extend such cooperation. He by the tenancy system. 14
denied that the Letter of Instruction assailed is unconstitutional, In Ramas v. Court of Agrarian Relations, 15 sustaining the validity of
setting forth its background as an implementing measure of the Agricultural Tenancy Act, 16 there is this relevant excerpt: The
Presidential Decree No. 27, the validity of which is not in history of land tenancy, especially in Central Luzon, is a dark spot in
doubt. 12 He prayed for the dismissal of the petition. His Comment is the social life and history of the people. It was among the tenants of
considered as the Answer. Central Luzon that the late Pedro Abad Santos acting as a saviour of
The plea for dismissal must be granted. There is no legal basis for the tenant class which for generations has been relegated to a life of
declaring Letter of Instruction No. 474 void on its face on equal bondage, without hope of salvation or improvement, enunciated a
protection, due process and taking of private property without just form of socialism as a remedy for the pitiful condition of the tenants
compensation grounds. The Constitution decrees no less than the of Central Luzon. It was in Central Luzon also that the tenants
emancipation of tenants, and there are safeguards therein to assure forming the PKM organization of tenants and, during the war, the
that there be no arbitrariness or injustice in its enforcement. There Hukbalahap, rose in arms against the constituted authority as their

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only salvation from permanent thraldom. According to statistics, showing that in implementing such mandate, there is arbitrariness or
whereas at the beginning of the century we had only 19% of the unfairness. To that aspect of the case, we now turn.
people belonging to the tenant class, after 60 years the prevailing 2. There is no merit to the contention that the Letter of Instruction
percentage has reached 30%. It is the desire to improve the condition No. 474 amounts to deprivation of property without due process of
of the peasant class that must have impelled the Legislature to adopt law. All that it provides is that the Secretary then, now the Minister,
the provisions as a whole of the Agricultural Tenancy Act, and of Agrarian Reform, is to take charge of Land Transfer Program
17
particularly Section 14 of Said Act. Then came the Agricultural pursuant to the Presidential Decree No. 27. Landholders with
Land Reform Code, 18 an enactment that extended even greater tenanted rice/corn lands with areas of seven hectares or less are
benefits to tenants. It was declared valid in Association of Rice and included if they own other agricultural lands of more than seven
Corn Producers of the Philippines v. Land reform Council. 19 Thus hectares in aggregate areas or lands used for residential, commercial,
was manifested anew, the concern shown for their rights, even if industrial or other urban purposes from which they derive adequate
thereby the interest of the property owners would be adversely income to support themselves and their families. 21 It is manifest that
affected. No heed was paid to the claim that there was a denial of there is no departure from constitutional restraints. The attack on due
equal protection. finally, Presidential Decree No. 27, which process ground is unavailing as on the face of the challenged
anticipated what was to be constitutional mandate that tenants in rice measure fairness and justice may easily discerned. Nothing in its
and corn lands be freed from bondage of soil was issued. Again, this language lend support to the contention that consequences so harsh
Court in the cited case ofGonzales v. Estrella, 20 had no difficulty and drastic would attend its implementation. In language, scheme,
dismissing a petition that it be declared unconstitutional. Nor did and framework, this Letter of Instruction reveals the plan and
counsel even insinuate a possible violation of the equal protection purpose to attain the goal envisioned by the Constitution but with
guarantee. In the face of such consistent course of action dictated by due regard to the landowners affected. There is a saving clause. They
the commitment of the fundamental law to the Ideal of putting an are exempt from its operation if it be shown that from the other lands
end tot he evils of tenancy, any argument that thereby landholders owned by them of more than seven hectares in aggregate areas if
would be adversely affected is an exercise in futilityexcept on agricultural, or other areas, whether residential, commercial, or
industrial, or lands devoted to other urban purposes, they are unable

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to derive adequate income to support themselves and their families. Instruction to them would be visited by the failure to meet that
Where then is the arbitrariness? Where is the injustice? standard, they are exempt. They would have then no valid cause for
3. Neither is there any merit tot he contention that there would be the complaint.
taking of property for public use without just compensation. The WHEREFORE, the petition is dismissed for lack of merit. No costs.
Constitution itself imposes the duty on the State to emancipate the
tenants from the bondage of the soil. What is more, even a month Castro v CA
before its adoption by the 1971-1972 Constitutional Convention, This is a petition for review on certiorari of the decision of the Court
Presidential Decree No. 27 was issued. Its validity, to repeat, was of Appeals dated August 16, 1976 in CA-G.R. No. SP-04692
unanimously sustained by this Tribunal. No other conclusion could affirming the decision of the Court of Agrarian Relations, Branch III,
have been reached, conforming as it did to what the fundamental law Tarlac, Tarlac in CAR Case No. 2540-T which dismissed the
ordained. The only remaining question then is the compensation to plaintiffs' (petitioners') complaint and declared them as mere hired
be awarded the landowner. That is provided for in the Decree. Thus: laborers of defendant (private respondent) over their respective
"For the purpose of determining the cost of the land to be transferred landholdings under
to the tenant-farmer pursuant to this Decree, the value of the land administration.chanroblesvirtualawlibrary chanrobles virtual law
shall be equivalent to two and one-half (2) times the average library
harvest of three normal crop years immediately preceding the From the records, it appears that petitioners Benigno Castro,
promulgation of this Decree; The total cost of the land, including Fortunato Lagman, Ruperto Garamonte, Arsenio Torres and
interest at the rate of six (6) per centum per annum, shall be paid by Domingo Manalo started cultivating different parcels of land with
the tenant in fifteen (15) years of (15) equal annual areas ranging from 3.1 hectares to 5.1 hectares, more or less, owned
amortization. 22 Nor is this all. This petition may be premature. There by respondent Candido Baron and which are located at Barrio San
are, as pointed out, built-in safeguards to assure that landowners are Bartolome, Concepcion, Tarlac (p. 16, rec.). Petitioners Garamonte,
not to be deprived of such lots "from which they derive adequate Manalo and Torres started working on said landholdings in 1963
income for the support of themselves and their families." If while petitioners Castro and Lagman were employed sometime in
petitioners could show that the application of the Letter of 1969 and 1970, respectively (p. 641, CAR rec., pp. 27 & 299, TSN,

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Vol. 11; pp. 705 & 741, TSN, Vol. II- the peaceful possession, enjoyment and administration of defendant's
A).chanroblesvirtualawlibrary chanrobles virtual law library landholding and after hearing on the merits, for permanency of said
In December, 1972, petitioner were subpoenaed by the Court of injunction (pp. 37 & 38, CAR rec. and p. 30,
Agrarian Relations in Tarlac, Tarlac to testify with respect to their rec.).chanroblesvirtualawlibrary chanrobles virtual law library
alleged tenancy, relationship with the defendant in CAR Case No. During the course of the proceedings in this case, the trial court
2442-T'72 entitled "Torres vs. Baron" for reinstatement (pp 4 & 129. issued several orders from time to time, some of which should be
rec.).chanroblesvirtualawlibrary chanrobles virtual law library noted at this point.chanroblesvirtualawlibrary chanrobles virtual law
On December 29, 1972, private respondent commenced Civil Case library
No. 1006 entitled "Candido Baron vs. Benigno Castro, et al." in the The Order of October 10, 1973 thus directed:
municipal court of Concepcion, Tarlac to enjoin defendants Wherefore, the Court hereby directs that the conditions
(petitioners herein) to desist from further cultivating or working on prevailing ante litem be maintained and that pendente lite the herein
their respective landholdings without plaintiff's (private respondent) plaintiffs be maintained in the possession and cultivation of the
consent. This case was dismissed by the said court for lack of landholding in question provided that they dedicate properly the
jurisdiction (p. 5, rec.).chanroblesvirtualawlibrary chanrobles virtual landholdings subject of the controversy to the actual crop these
law library landholdings are usually and purposely dedicated to and give notice
Petitioners (then plaintiffs), on April 2, 1973, filed their complaint of any acts the defendant is required under the law to be notified.
against private respondent (then defendant) Candido Baron with the Conversely, defendant or any person or persons acting in his behalf
Court of Agrarian Relations, Branch III in Tarlac, Tarlac (CAR Case or any of his agent or agents is, in the meantime that this case is
No. 2540 T'73) to nullify their contracts for hired services and to being heard, directed not to disturb the situation be (sic) executing
affirm the existence of a tenancy relationship (p. 22, rec. and p. 1, any acts which may be detrimental to the possession cultivation of
CAR rec.).chanroblesvirtualawlibrary chanrobles virtual law library the landholdings under litigation (p. 25, rec. and p. 67, CAR rec.).
On June 21, 1973, defendant (private respondent) filed his answer In the order dated October 11, 1973, the lower court directed that -
with counter-claim praying for the issuance of an interlocutory order Wherefore, upholding the status quo and based provisionally, on the
immediately restraining the plaintiffs (petitioners) from disturbing prevailing agreement between the parties, on the matter of division

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of the produce, as called for in their contracts with the defendant, the 2. Declaring plaintiffs' as more than preponderantly proven to be
harvesting and threshing of the palay harvest over the landholdings mere hired laborers of defendant over their respective farm holdings
in question, in the meantime, is hereby ordered, the same to be under administration; chanrobles virtual law library
threshed by defendant's threshing machine, provided that the fees 3. Upholding the contracts of hired services being sought to be
charged do not exceed the rate of threshing prevailing in the area. annulled for having been voluntarily and intelligently entered into,
'Thereafter, once the amount of seeds used, threshing and reaping the validity, legality and due execution of which from both evidence
fees are deducted, the amounts corresponding to the plaintiffs (as had been shown to the Court's satisfaction; chanrobles virtual law
they were not specified based on their existing agreement, be library
deducted from the net and delivered outright in their favor, while the 4. Denying plaintiffs' claim for leasehold for utter lack of
rest of the harvest is hereby directed to be placed on deposit in a merit; chanrobles virtual law library
bonded warehouse authorized by the government to accept deposits 5. Ordering the arrest of herein plaintiffs having been found to be
of palay in the meantime and the receipts be delivered to the Court guilty of contempt of Court and sentencing them to imprisonment for
under custodia legis. a period of twenty (20) days and imposing a fine of Twenty Five
xxx xxx xxxchanrobles virtual law library (P25.00) Pesos each, with subsidiary imprisonment of another ten
(pp. 37-39, rec. and pp. 160-162, CAR rec.). (10) days in case of insolvency; chanrobles virtual law library
On July 15, 1975, the trial court handed down its decision the 6. Denouncing the actuations and participation of plaintiffs' counsel,
dispositive portion of which thus reads: chanrobles virtual law Atty. Cesar Gotiangco, Trial Attorney of the BALA, Department of
library Agrarian Reform, in this case as unworthy of a public trust and
"Wherefore, based on the foregoing considerations, this Court hereby declaring such acts as only worthy of condemnation and
renders judgment: chanrobles virtual law library censure; chanrobles virtual law library
1. Dismissing plaintiffs' 7. Directing the Rural Bank of Concepcion, Tarlac to release all the
complaint.chanroblesvirtualawlibrary chanrobles virtual law library money deposits, amounting to P14,146.73, including interest under
Savings Account No. 7697 in favor of defendant and/or his lawyer,
or their duly authorized representative, as defendant's legitimate

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share or entitlement for the agricultural years 1973-74 and 1974-75, are cultivating as a consequence of the said decision. and by way of
and requiring the said bank to furnish this Court a copy of a receipt enforcement on the dispositions of the Court pending appeal at the
for the said amount duly executed by the proper party; same time authorizing tile defendant-landholder to take over the
and chanrobles virtual law library possession and cultivation of the same premises effective
8. Ordering plaintiffs to be jointly and severally liable for attorney's immediately. ... (pp. 27-29. CA rec. and pp. 54-57. rec.).
fees which this Court fixes in the amount of P500.00 and to pay the On August 27, 1975, plaintiff-appellants filed a motion for
costs of this suit (pp. 676-678, CAR rec.). reconsideration of the aforesaid order of partial execution dated
From the aforesaid decision, plaintiffs (petitioners) appealed their August 14, 1975 on the grounds that the same has the effect of
case to the Court of Appeals on July 31, 1975 on the grounds that ejecting, completely the plaintiffs from the landholdings which is
such decision is contrary to law and jurisprudence and unsupported violative of thestatus quo memorandum of the President, Presidential
by substantial evidence on record (p. 1, CA rec.). The appealed case Decree Nos. 316, 583 and Department Memorandum-Circular No. 2-
was docketed as CA-G.R. No. SP- A, as amended, and therefore illegal; and that the decision has not
04692.chanroblesvirtualawlibrary chanrobles virtual law library vet become final and cannot be effected (p. 693, C A R rec. and p.
While this case was on appeal, private respondent (defendant) filed a 58, rec.).chanroblesvirtualawlibrary chanrobles virtual law library
motion for immediate execution on August 11, 1975 before the trial Again, plaintiffs-appellants filed on December 5, 1975 an urgent
court (p. 25, CA rec.). Said court correspondingly issued an order motion to declare null and void the aforecited order with prayer that
dated August 14, 1975 directing that: defendant-appellee be ordered not to disturb their peaceful
Wherefore, the Court hereby grants the partial execution of the possession and cultivation of their landholdings pending final
dispositive portion of the decision under paragraphs 2, 3 and 7 as it adjudication of their cases (p. 60, rec. and pp. 2124 CA rec.).
hereby orders the plaintiffs having been found out to be mere hired Defendant-appellee in turn filed on January 13, 1976 his opposition
workers whose tenure were not secured under the law and who could to said motion of December 5, 1975 which motion was denied by the
be removed from the land once their services are terminated Court of Appeals in its resolution of January 21, 1976 (pp. 39-44,
(Marfori, et al.,. vs. Odjiner, CA G.R. No. 44828-R, September 19, rec. and p. 63, CA rec.).chanroblesvirtualawlibrary chanrobles
1973) to immediately vacate the premises of the landholdings they virtual law library

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On February 3, 1976, plaintiffs-appellants filed their motion for Finally, on June 23, 1976, appellants filed a motion for referral with
reconsideration of the resolution of January 21, 1976 praying that prayer that this case be referred to the Secretary (now Minister) of
another order be issued declaring the CAR order of August 14, 1975 Agrarian Reform in accordance with P.D. No. 316 (p. 199, CA rec.).
as null and void (p. 66, CA rec. and p. 71, This motion was resolved when the Court of Appeals rendered its
rec.).chanroblesvirtualawlibrary chanrobles virtual law library decision on August 16, 1976 affirming the trial court's
On May 11, 1976, the appellate court acted on appellee's motion for decision.chanroblesvirtualawlibrary chanrobles virtual law library
injunction dated April 10, 1976 (p. 149, CA rec.) when it granted the Hence, this petition wherein petitioners seek recognition as tenants
same and issued a writ of preliminary injunction on May 11, 1976 of private respondent on the landholdings they have been cultivating
prohibiting appellants (petitioners) from entering the land and for years.chanroblesvirtualawlibrary chanrobles virtual law library
disturbing the condition ordered by processes of the court and Petitioners allege that they are tenants on a 50-50 sharing basis on
creating another situation which would negate the lower court's the net palay produce from their respective palay landholdings
decision (p. 158, CA rec. and pp. 74 & 79, owned by private respondents, an located at Barrio San Bartolome,
rec.).chanroblesvirtualawlibrary chanrobles virtual law library Concepcion, Tarlac; that pursuant to their verbal arrangement, the
On May 19, 1976, appellants filed a motion for reconsideration of landowner merely provides the land and the expenses for seedling,
the aforesaid resolution of May 11, 1976 but upon receipt of the copy while petitioners shoulder without reimbursement the expenses for
of said resolution on May 31, 1976, appellants left their respective reaping and all other items for production; that such verbal
landholdings which some PC members took over (p. 174, CA rec. agreement had been faithfully observed by both parties up to the
and p. 81, rec.).chanroblesvirtualawlibrary chanrobles virtual law agricultural year 1972-73; that sometime in the month of December,
library 1972, petitioners were subpoenaed and testified before the Court of
Upon denial of the aforesaid motion for reconsideration on June 2, Agrarian Relations, Branch III, in Tarlac, Tarlac in CAR Case No.
1976 (p. 186, CA rec.), appellants filed on the same date a motion to 2442-T'72 entitled "Torres vs. Baron" for reinstatement; that prior to
dissolve the writ of preliminary injunction (p. 187 CA rec.), which their appearance before said lower court, petitioners and other
was likewise denied in the resolution of June 14, 1976 (p. 194, CA tenants of respondent were called to a conference in the latter's
rec.).chanroblesvirtualawlibrary chanrobles virtual law library residence at Concepcion where they were instructed to testify against

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their tenancy relationship and declare that they were mere conditioned as to whether the)r are the tenants of the landholdings of
agricultural workers, but in spite of such alleged instruction, they private respondent; chanrobles virtual law library
stuck to the truth of their tenancy relationship on account of their 3. Ordering the Court of Appeals to transfer case to the Ministry of
oath; that because of their refusal to heed the aforesaid instruction, Agrarian Reform per Pres. Decree No. 946; and chanrobles virtual
private respondent commenced to harass them and refused to law library
recognize them as tenants; that on December 29, 1972, private 4. Ordering private respondent to pay moral, actual and exemplary
respondent filed with the municipal court of Concepcion Civil Case damages to petitioners (pp. 18 & 139, rec.).
No. 1006, "Baron vs. Castro, et al." to enjoin petitioners to desist Private respondent, upon the other hand, alleges that the lands
from further cultivating or working on the land, but which case was subject of the action are absolutely untenanted and are farmed by
dismissed for lack of jurisdiction; that through false pretense and administration and mechanization; that petitioners are not tenants,
fraudulent machinations, they were induced to sign the written of, but were mere hired agricultural workers; that plaintiffs have no
hired agricultural workers; that said contracts were never observed cause of action against defendant; that private respondent has long
nor actually executed into practice as they actually continued to been in peaceful possession and cultivation of the lands, the same
observed their verbal tenancy agreement earlier alleged; and that by being part of respondent's land under administration and
reason of the foregoing, petitioners have no peace of mind although mechanization (p. 6, rec.); that the questions raised by petitioners are
in actual possession of their landholdings (pp. 4 & 5, 128- 129, factual questions; that there must first be a showing that they are
rec.).chanroblesvirtualawlibrary chanrobles virtual law library tenanted lands for the action to fall under the referral provisions of
Thus, petitioners pray that the decision of the Court of Appeals be set Pres. Decrees Nos. 316 and 946; that it is clearly provided by Pres.
aside and that judgment be rendered: chanrobles virtual law library Decree No. 27 that there should be a showing that the action involves
1. Ordering for the immediate reinstatement of petitioners to their tenants; that refuting petitioners' allegation, injunctions are not
respective landholdings; chanrobles virtual law library proper where those affected are tenants and this matter again requires
2. Ordering private respondent to maintain petitioners in the peaceful a looking into the question of whether or not petitioners are tenants;
possession and cultivation of their respective landholdings that the instant petition is bereft of merit since the lands involved are
not embraced within Operation Land Transfer under Pres. Decree

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No. 27 which only applies to tenanted lands; that Pres. Decrees Nos. rec.). Also, he declared he was able to work on the lands under labor
316 and 946 apply only to ejectment and harassment cases involving administration of respondent Baron and whenever they worked, they
tenants; that the decrees specify and use only the terms tenant- were being paid on a daily basis (TSN-25, p. 614 CAR rec.); and that
farmer, tenant-tiller and tenant (Emphasis supplied); that Pres. in the separate areas under administration of respondent, they have
Decrees Nos. 27, 316 and 946 should be applied prospectively and no fixed area and that they are paid on a daily basis (TSN, pp. 32-33,
the same are inapplicable to cases in the appellate courts; that p. 614, CAR rec.). Finally, plaintiff Garamonte admitted to having
petitioners are estopped from assailing the jurisdiction of the lower been ejected by respondent through a petition for mechanization, and
and appellate courts considering that petitioners themselves were the in order that he could work on the latter's landholding, the latter let
ones who initiated the action in the Court of Agrarian Relations and him sign a contract of service to work over the same land (TSN, p.
who appealed to the Court of Appeals; that the question of lack of 68, p. 616 CAR rec.).chanroblesvirtualawlibrary chanrobles virtual
certification from the Ministry of Agrarian Reform should have been law library
invoked in the trial court; and finally, that the Court of Appeal's Petitioner Benigno Castro testified that he signed a contract for hire
decision is well-supported by substantial evidence-the testimony of service in 1970, another on April 12, 1971, and another on April 16,
petitioners and the written contracts signed by them indicate that 1972 (TSN, p. 12, p. 622, CAR rec.). When he cultivated the land in
they were agricultural workers, not share tenants (pp. 160-166, April, 1974, he did not notify respondent (defendant) nor the lower
rec.).chanroblesvirtualawlibrary chanrobles virtual law library court. Neither did he notify anyone before he borrowed from the
A review of the facts of the instant case shows that the trial court Masagana 99 project. He denied knowledge of any order maintaining
found the following: chanrobles virtual law library the status quo since they were not informed of such order by their
According to petitioners Ruperto Garamonte, the reason for their lawyer (pp. 623-624, CAR rec.). On cross examination, petitioner
ejectment in 1963 was the fact that they claimed to be under 70-30 admitted that when he borrowed under the Masagana 99 project from
sharing basis. In fact, he was one of those ejected by reason of a the Rural Bank of Capas, with the help of Atty. Cezar Gotiangco of
petition in court for mechanization. But in 1963, he was again the MAR, they did not notify the court even as they secured the loans
instituted as a tenant by private respondent over a landholding twice. And when they borrowed from said bank they represented
different from the one where he was ejected (pp. 612 and 613, CAR themselves as tenants of the defendant before the rural bank (TSN, p.

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43, Jan. 8,1975, p. 269, CAR to the decision in the mechanization case. During the time of their
rec.).chanroblesvirtualawlibrary chanrobles virtual law library employment, they signed contracts of hire of services (p. 635, CAR
In the hearing of October 4, 1974, then plaintiffs manifested that they rec.).chanroblesvirtualawlibrary chanrobles virtual law library
had sought outside assistance in the person of Benjamin Sanguyo, In collaboration, witness Serafin San Miguel, respondent's
alias "Commander Pusa" to influence the court in its decision and bookkeeper, who is related to petitioners and had been working for
they had written the President claiming that their rightful shares were respondent for 32 years, testified that he knew all the petitioners
not given them because all the harvests were ordered deposited (p. (Garamonte is his son-in-law). He Identified his signatures in the
264, CAR rec.).chanroblesvirtualawlibrary chanrobles virtual law contracts and those of petitioners Castro, Garamonte and Torres and
library more particularly that of Castro because the latter is his godson. He
On his part, private respondent declared that he knows the plaintiffs further said that petitioners were not tenants but hired laborers only
in the CAR case and Identified his signature on Exhibits "8-E" to (pp. 635-636, CAR rec.).chanroblesvirtualawlibrary chanrobles
"10-E", "14-C" to "14-E", "16-C" to "16-E" which were the contracts virtual law library
signed by herein petitioners. He knew all the signatures of petitioners Witness Eugenio Torres also testified to the genuineness of the
as well as those of witnesses Jose Pascual and Pablito David and signatures on the exhibits which had been previously Identified. He
Serafin San Miguel and Eugenio Torres on the other contracts since admitted that he signed the investigation report of the Department of
all the aforenamed parties signed the contracts in his house and in his Agrarian Reform (now Ministry) wherein they claimed they were
presence. Also, he Identified the signatures of petitioner Castro on tenants even if he did not have any land to work on. He confirmed
Exhibits "9", "9-C" and "9-E" (pp. 633- 634, CAR rec.). On cross that the contracts were translated to petitioners in Pampango by Sgt.
examination, private respondent (then defendant), clarified that Rodrigo Aguilar (p. 637, CAR rec.). As respondent's overseer from
plaintiffs Garamonte, Torres and Manalo were his tenants before his 1969 to 1973, he said he knew personally that petitioners were being
mechanization case (CAR Case No. 1033-T) was decided favorably. paid fixed quantities in palay and sometimes he actually delivered to
After the said case, they were ejected and ceased to be his tenants. them these payments and that they even secured loans from
Following the mechanization, the three were employed as hired respondent whenever they were in need (p. 638, CAR
workers only, for they were given priority of employment pursuant rec.).chanroblesvirtualawlibrary chanrobles virtual law library

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Witness Jose Pascual revealed that when Land Reform people (from they already knew the contents and because these were not the first
the DAR or Department of Agrarian Reform, now MAR or Ministry contracts. After this, the hired laborers signed and then the
of Agrarian Reform) came to their place, they told them that if they witnesses.chanroblesvirtualawlibrary chanrobles virtual law library
would not sign the interview sheets, they would not appear as Witness also added that the occasions for the translation of the
tenants, in which case there would come a time when the contracts were made in groups and all the terms of the contract were
government would expropriate their lands and they would not get the same. There was no occasion he remembered when any laborers
any land (pp. 638-639, CAR rec., emphasis objected to the terms of the contract (pp. 640-641, CAR rec.).
supplied).chanroblesvirtualawlibrary chanrobles virtual law library In resolving the issue of whether or not petitioners (plaintiffs) were
Per testimony of Sgt. Rodrigo Aguilar, police investigator of the really tenants of the subject landholding, the lower court arrived at
Concepcion Police Force, he had dealings with respondent Baron in the following significant findings and conclusion which the Court of
1972 or 1973 when he was requested to translate the contract of Appeals upheld: chanrobles virtual law library
hired labor for the said respondent which was done in the latter's Plaintiffs testified that they used to sign the contracts they executed
house. In 1972, he remembered having helped in the execution of the 'together' at the place of defendant and this fact is supported by the
contracts containing his signatures duly Identified by him. Thus, he contracts they executed all dated May 15, 1972, which they admitted
explained the following procedure observed in the execution of the to have signed. This proves that the contracts were being executed
contracts: chanrobles virtual law library with their full knowledge and awareness knowing they represented
He explained that forms of these contracts were given to him their agreement.chanroblesvirtualawlibrary chanrobles virtual law
sometime eight at a time, each contract named to a different hired library
laborer. To find out the said laborers, he called out their names, There was no evidence adduced by any or all of the herein plaintiffs
together with the names of their wives, after which gathered in a long that they objected to the terms and conditions of the contracts they
table, he began explaining these contracts to them in the Pampango signed, nor of the fact that they were signing from year to year
dialect. After reading and explaining, he asked them if they had any contracts in name only, and which allegedly were never enforced
complaints against the contracts. In fact they answered that it would because the 50-50 sharing arrangement was followed. it is
not be necessary that the contract he (sic) interpreted to them because unthinkable to this Court that a landowner whose land is under

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administration and mechanization would ever agree to subvert his Rules of Court, because if it were really true that they were tenants,
own contracts to his prejudice and actual they should not have signed written contracts proving that they were
loss.chanroblesvirtualawlibrary chanrobles virtual law library hired laborers, which they knew and understood to be so and ask the
Evidently, defendant, who had ejected some of the plaintiffs could Court to declare that a relation of 'tenancy be made to exist between
not have intended them to become tenants again after they agreed in them, an admission that raises the presumption that they are not
writing to be mere hired laborers. (p. 652, CAR tenants ipso facto. 'The presumption is that an instrument is what it
rec.).chanroblesvirtualawlibrary chanrobles virtual law library purports to be, and to show that it does not express the true intents of
xxx xxx xxxchanrobles virtual law library the agreement of the parties, the proof should be clear and
The assertions that their written agreements were simulated, pro convincing' (Cuyugan vs., Santos, 34 Phil. 100; Gatmaitan vs.
forma, and ineffective, are left alone, serious charges which were Nepomuceno, 42 Phil. 295; Tolentino vs. Gonzales, 50 Phil. 588;
aired to discredit the contracts sought to be revoked, for the tenants Moran, Rules of Court, Vol. 5, p.
having been benefitted by their contracts to remain in the 115).chanroblesvirtualawlibrarychanrobles virtual law library
landholding as hired laborers are estopped from impugning their Moreover, this Court could not give credit to the pretensions that
validity (Po Sick vs. Vivo, L-24792, February 14, 1975). The plaintiffs are share tenants for the simple reason that they have
execution of the same contracts as usual were admitted to have taken admitted that 'their written agreements govern their actual
place and entered into voluntarily, therefore, 'one who signs an relationship'. In the face of this inconsistency still plaintiffs wanted
agreement willingly and voluntarily is bound by the terms thereby' to be declared as tenants by the Court. Their admissions of having
(Rodriguez vs. Hon. Alikpala, G.R. L-38314, June 24, 1974) and signed contracts of services thus made offered a semblance of truth,
these contracts having been enforced for a certain number of years becoming more plausible and probable when supported and
between them, they cannot now impugn its (sic) validity (Po Sick vs. strengthened by defendant's testimonies and those of his witnesses
Vivo, G.R. No. L-24792, February 14, 1975). Plaintiffs, by their acts when they established that these plaintiffs are no more than mere
are now estopped from claiming otherwise or be permitted to disown hired workers as truly reflected by their individual contracts, so
and challenge as false or assail their contracts which shows that they much so that this Court is more than convinced of their legality to
are hired laborers under Section 3 par. (2) of Rule 131, Revised bend the issue properly in defendant's favor. Plaintiff's argument to

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the contrary do (es) not carry the weight of sincerity and veracity as case, the agreement between plaintiff and defendant was reduced to
they appear to be only legalistic vehicles availed of in their selfish writing clearly stipulating that farmer is a hired farm-helper of the
desire to become tenants of defendant. Their complaint is, even at latter' (Torres vs. Baron, CA GR No. SP-02019, Oct. 11,
first blush, creative of doubt when it admitted the existence of their 1974).chanroblesvirtualawlibrary chanrobles virtual law library
written contracts and 'asked that tenancy relationship be declared In this case, the two-pronged evidence of plaintiffs all but confirmed
between plaintiffs and defendant', thereby admitting the non- their relationship with the defendant, when they motu
existence of such a propio admitted that their actual relationship was governed not only
relationship.chanroblesvirtualawlibrary chanrobles virtual law library by the written contracts of hired of services, but also by their actual
The mendacious attitude of the plaintiffs is reflective and practice of 50-50 share tenancy, which had been abolished years
characteristic of persons bent on taking advantage of the liberality before. The excuses for their share tenancy relationship side-by-side
and unpunishability of our agrarian laws. Let it be stated anew, with the presumption of legality of the contracts for services became
therefore, 'that when the parties have reduced their agreements to lame, and inadmissible and are hereby considered as vain efforts to
writing, they are presumed to have intended the writing as the only show a non-existent relationship which plaintiffs have tried hard to
evidence of their agreement, and therefore, they are supposed to have inject into their testimony which the court cannot accept nor consider
embodied therein all the terms of their agreement. Consequently, all for being wanting in substance, truth and logic. At this point, the
prior or contemporaneous collateral stipulations which the parties Court, sad to state, noticed that plaintiffs soaring ambitions
might have had and which do not appear in the writing are presumed outstretched their ability to produce in court the necessary evidence
to have been waived or abandoned by them, and therefore not material to their cause.chanroblesvirtualawlibrary chanrobles virtual
provable' (Chin Chong & Co. Inc. vs. NCB of New York, 52 O.G. law library
5806; Moran Rules of Court, Vol. 5, p. 91). And in a similar case, This Court for this matter voluntarily cannot declare invalid or annul
the Court of Appeals had ruled that 'while as a rule, the tenants' the contracts they entered into or executed, in order to create a
testimony on their relationship with the owner of the landholding is relationship of tenancy between the parties by the mere fact that the
entitled' to credit and shall be accepted as prima facie evidence of the plaintiffs now seek to disown the said contract depending instead in
terms of their agreement, the rule has no application when as in this the blind belief that their claim to actual tenancy, based on mere

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allegations devoid of actual positive proof, could tip the balance in and defendant for want of evidence or reason that may justify it to
their favor. Defendant's evidence to prove their actual tenure were take upon itself a decision on this matter. Plaintiffs have continued to
not rebutted nor refuted, as the overseer, the bookkeeper and other work on their respective landholdings under the authority of the
hired laborers working with and known to the plaintiffs testified to interlocutory orders of August 10 and October 11, 1973 allowing
the truth that they as well as the plaintiffs, were hired laborers. them to possess and cultivate the holdings in question pending the
Regretfully, plaintiffs by themselves, have failed to substantiate their determination of this case, finally to be found out merely as hired
claim by any concrete evidence except their oral assertions in Court. laborers after all (pp. 653-659. CAR rec.).
So, as between the two opposing claims, the oral testimonies alone of This Court finds no reason to disturb the aforequoted findings of the
the plaintiffs among themselves and against the defendant's, whose Court of Agrarian Relations since the same are based on sufficient
evidence composed of the duly executed written contracts, and the and solid evidence. This Court has, in fact, previously ruled in the
affirmations by the co- workers of plaintiffs who themselves following cases that- chanrobles virtual law library
declared to be hired laborers also, this Court will give more value Where the controversy involves a relationship which affects the
and significance to the latter being more provable of the issue raised. rights of two litigants over the cultivation and use of an agricultural
Mere verbal assertion of the truth of one thing in Court is not land, one of the parties agreeing to furnish the labor, such
decisive in itself, because 'evidence does not depend on the belief of controversy comes within the jurisdiction of the Court of Agrarian
the party presenting it to the Court. It is for the latter to determine Relations, as provided for in Section 7 of Rep. Act No. 1267, as
whether or not an evidence is true (Mallari, et al. vs. Tolentino, et al., amended (Almodiel vs. Blanco, et al., L-17508, July 30, 1962, 5
CA GR No. 42058-R, 12/12/74) and the Court had stated its reasons SCRA 647).
when it accepted the truth as warranted by the The aforecited section is now found in Section 12 of Presidential
evidence.chanroblesvirtualawlibrary chanrobles virtual law library Decree No. 946.chanroblesvirtualawlibrarychanrobles virtual law
Having thus failed to present clear and confounding evidence to library
warrant the rescission of the contracts that were proven to govern Nonetheless. insofar as they stress the basic findings of fact of the
their agrarian relationship, the Court is not empowered to establish Court of Agrarian Iterations, supported by substantial evidence, is
nor create a system of tenancy relationship to exist between plaintiffs well-nigh conclusive on an appellate tribunal, it is undeniable that

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such a submission is supported and buttressed by a host of our Time and again, this Court has consistently issued pronouncements
decisions dating back to 1957 (De Chavez vs. Zobel, et al., L-28609, upholding the validity and effectivity of contracts. Thus, in the case
January 17, 1974, 55 SCRA of Phoenix Assurance Co., Ltd. vs. United States Lines, L-24033,
26).chanroblesvirtualawlibrary chanrobles virtual law library February 22, 1968, 22 SCRA 675, this Court held that a contract is
In the light of the above (historical narrative), it is evident that the the law between the contracting parties, and where there is nothing in
submission of petitioners that by virtue of Section 154 of the Land it which is contrary to law, morals, good customs, public policy or
Reform Code, taken in connection with Section 166, with its public order the validity of the contract must be sustained. And in the
definition of a farm worker as including any agricultural wage, salary more recent case of Phil. American General Insurance Co., Inc. vs.
or piece worker, only the Court of Agrarian Relations possesses Mutuc, L-19632, November 13, 1974, 61 SCRA 22, this Court ruled
jurisdiction, is impressed with force and cogency. It would be an that contracts which are the private laws of the contracting parties
unjustified departure from what has been so clearly and should be fulfilled according to the literal sense of their stipulations,
authoritatively decided by this Court to rule that respondent Judge is if their terms are clear and leave no room for doubt as to the
vested with the authority he exercised (Ferrer, et al.,. vs. Villamor, et intention of the contracting parties, for contracts, are obligatory, no
al., L-33293, September 30, 1974, 60 SCRA 106). matter what form they may be whenever the essential requisites for
It must be observed that the questioned contracts were executed their validity are present.chanroblesvirtualawlibrary chanrobles
between petitioners and private respondent annually, before the start virtual law library
of each agricultural season. In the case of petitioner Castro, it should This Court finds merit in private respondent's contention that for the
be noted that it took him three contracts in a span of three successive lands subject of the action to come under Operation Land Transfer
years (1970, 1971 and 1972) before he started questioning said under Pres. Decree No. 27, there must first be a showing that they
contracts. Inevitably, the question that comes to mind is: What took are tenanted lands and for the action to come within the referral
him and the others so long'? Certainly, a person can forget the first provisions of Pres. Decrees Nos. 316 and 946, it must first be
incident or experience, perhaps tolerate the second, but will not go established that the action involves tenants. The aforecited decrees
through a third time when he is well aware of the specifically speak of "tenant-farmer", "sharecrop or lease tenancy",
odds.chanroblesvirtualawlibrary chanrobles virtual law library

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"tenant", and "tenant-tiller ".chanroblesvirtualawlibrary chanrobles Moreover, petitioners have made the fatal error of invoking the
virtual law library provisions of Presidential Decrees Nos. 27, 316 and 946; for, this
On petitioners' flimsy claim that the Court of Appeals had no Court has already ruled that said decrees cannot be applied
jurisdiction to entertain their own appeal and that this case should retroactively and that they can only apply to bona fide tenants. Thus,
have been referred to the Ministry of Agrarian Reform, private in the case of Jacinto vs. Court of Appeals (L-33567, December 14,
respondent aptly refuted the same by insisting that Presidential 1978, 87 SCRA 263), this Court said: chanrobles virtual law library
Decrees Nos. 316 and 946 apply only to ejectment and harassment Neither can We find merit in petitioner's claims that with the advent
cases involving tenants. It must be borne in mind that herein of Pres. Decree No. 27, he has become the owner of the land. Firstly,
petitioners are found to be mere hired farm laborers and this case said decree applies only in favor of bona fide tenants. It cannot be
was instituted to seek the nullity of subject contracts and declare denied, however, that at the time of the promulgation of Pres. Decree
petitioners as tenants and hence, This is neither an action for No. 27 (October 21, 1972), the Appellate Court has already its
ejectment nor harassment of tenants. The purpose for referral to the judgment finding that the tenancy relationship between petitioners
Ministry of Agrarian Reform under the aforesaid decrees is to enable and private respondent had been extinguished. Secondly, the decree
said ministry to determine if the case is intended to harass tenant- cannot operate retroactively in favor of petitioner who had
farmers. Oddly enough, the case in the lower court and in the surrendered one-half of the land in July, 1976 and, by virtue of a
appellate court were initiated by petitioners themselves and hence, Writ of Preliminary Mandatory Injunction issued by the Court of
there is no case of harassment nor ejectment involved. On the Agrarian Relations, was dispossessed of the other half in February,
contrary, it may even be stated that they have intended to harass 1967.
private respondent when they brought "Commander Pusa" to the It must be stressed that this action was initially filed on April 2, 1973
lower court and when they wrote a deceptive letter to the President and Presidential Decrees Nos. 316 and 946 became effective only on
during the lower court October 22, 1973 and June 17, 1976,
proceedings.chanroblesvirtualawlibrary chanrobles virtual law respectively.chanroblesvirtualawlibrary chanrobles virtual law
library library

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And finally, this Court in the recent case of Padasas vs. Court of WHEREAS, by virtue of Proclamation No. 131 dated July 22, 1987
Appeals (L-35927, March 31, 1978, 82 SCRA 250), thus the Comprehensive Agrarian Reform Program has been instituted;
ruled: chanrobles virtual law library WHEREAS, there is a need to provide for the mechanisms to start
The Agricultural Land Reform Code (Rep. Act No. 3844) was the implementation of the program;
enacted and took effect on August 8, 1963. This law must be WHEREAS, public hearings and consultations were held to
enforced prospectively and not retroactively and, therefore, whatever determine appropriate mechanisms capable of being established.
rights created, granted or recognized therein such as the light of NOW, THEREFORE, I, CORAZON C. AQUINO, President of the
redemption accrued upon the enactment of the legislation and may Philippines, by virtue of the powers vested in me by the Constitution,
be exercised thereafter in appropriate do hereby order:
cases.chanroblesvirtualawlibrary chanrobles virtual law library CHAPTER I. COVERAGE
It must be noted that the aforenamed Code abolished the then Sec. 1. Scope. The Comprehensive Agrarian Reform Program
existing share tenancy system in agriculture and in its stead the (CARP) shall cover, regardless of tenurial arrangement and
agricultural leasehold system was established (Sec. 3, R. A. No. commodity produced, all public and private agricultural lands as
3844). provided in Proclamation No. 131 dated July 22, 1987, including
WHEREFORE, THE PETITION IS HEREBY DISMISSED AND whenever applicable in accordance with law, other lands of the
THE DECISION APPEALED FROM IS AFFIRMED. NO COSTS. public domain suitable to agriculture.
Sec. 2. Implementation. Land acquisition and distribution shall be
CARL implemented as provided in this Order as to all kinds of lands under
the coverage of the program, subject to such priorities and reasonable
EO 229 retention limits as the Congress may under the Constitution
PROVIDING THE MECHANISMS FOR THE prescribe, taking into account ecological, developmental, or equity
IMPLEMENTATION OF THE COMPREHENSIVE considerations, and subject to the payment of just compensation.
AGRARIAN REFORM PROGRAM Sec. 3. Exemptions. Lands actually used and found to be necessary
for national defense, school sites and campuses, religious purposes,

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penal colonies and government research and quarantine centers, are CHAPTER II. PRIVATE AND ACQUISITION
exempted from the coverage of the program. Sec. 5. Procedure of Acquisition. After the land, landowners, and
Sec. 4. Compulsory Registration. Within one hundred eighty (180) beneficiaries shall have been identified, the DAR shall publish its
days from the effectivity of this Order all natural and juridical decision to acquire the land and notify the landowners thereof,
persons, including government entities, owning, leasing or managing together with the offer of the DAR to pay for the land as provided in
agricultural lands shall file a sworn statement in the proper Section 6 hereunder.
Assessor's Office in the form to be prescribed by the Department of Within fifteen (15) days from publication and notice, the landowner
Agrarian Reform (DAR). This statement shall include among others, shall signify to the DAR his acceptance or rejection of the offer.
(a) the description and area of the property; (b) the estimated average If the landowner accepts the offer of the DAR, the Land Bank of the
gross income from the property; (c) the names of all tenants and Philippines (LBP) shall pay the landowner the purchase price of the
regular farmworkers therein; (d) the crop(s) planted in the property land within fifteen (15) days after he surrenders the Certificate of
and the area covered by each crop as of June 1, 1978; (e) the terms of Title and other relevant documents required by the DAR and the
mortgages, leases, and management contracts subsisting as of June 1, LBP.
1987; (f) the latest declared market value of the land as determined In case of rejection or if no reply is received, the DAR shall conduct
by the City/Provincial Assessor, and (g) a sworn declaration of the administrative summary proceedings to determine the compensation
current fair market value, which the owner wishes to receive if the for the land, requiring the landowner, the LBP, and other interested
property should be acquired by the government for agrarian reform parties to submit within fifteen (15) days from the receipt of notice,
purposes. evidence as to the compensation for the land. After the expiration of
If the landowner fails to register within the prescribed period, the the above period, the matter is deemed submitted for decision.
government shall base the valuation of his property for landowner Within fifteen (15) days from the decision, the LBP shall establish a
compensation purposes on the City/Provincial Assessors's value. trust fund for the landowner concerned in the amount decided and
Beginning with the quarter immediately following this registration, notify the landowner and the DAR of its establishment.
the real property tax payable shall be based on the abovementioned Any party who disagrees with the decision may bring the matter to
owner's declaration of current fair market value. the proper court for determination of just compensation.

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After the establishment of the trust fund or receipt by the DAR of the tax. One-tenth of the face value of the bonds shall mature every year
landowner's acceptance of the offer, the DAR shall take immediate from the date of issuance until the tenth year;
possession of the land. Upon formal notification by the DAR, the The LBP bonds issued hereunder shall be eligible at face value for
Register of Deeds shall issue a Transfer Certificate of Title (TCT) in the purchase of government assets to be privatized;
the name of the Republic of the Philippines as Trustee for and in (b) Direct payment in cash or kind by the farmer-beneficiaries with
behalf of qualified beneficiaries. Thereupon, the DAR shall proceed the terms to be mutually agreed upon by the beneficiaries and
with the redistribution of the land to the qualified beneficiaries. landowners and subject to the approval of the DAR; and
The rights and responsibilities of ownership by the beneficiaries (c) Other modes of payment as may be prescribed or approved by the
commence at the time of their designation as awardees-owners by PARC.
the DAR, as evidenced by a Certificate of Landownership Award in Sec. 7. Assistance to Landowners. Landowners affected by this
their favor. Order shall be assisted and provided by the LBP with the following
Sec. 6. Compensation to Landowners. The LBP shall compensate the services:
landowner an amount to be established by the government, which (a) Investment information and counselling assistance;
shall be based on the owner's declaration of current fair market value (b) Conversion and/or exchange of LBP bonds to/from government
as provided in Section 4 hereof, but subject to certain controls to be stocks and/or with government assets; and
defined and promulgated by the Presidential Agrarian Reform (c) Marketing of LBP bonds.
Council (PARC) as provided in Section 18 hereof. The compensation CHAPTER III. LAND TRANSFER, UTILIZATION, AND
shall be paid in any of the following modes, at the option of the SHARING
landowner: Sec. 8. Voluntary Land Transfer. Landowners whose lands are
(a) Bond payment over ten (10) years, with ten (10) percent of the subject to redistribution under this Order have the option of entering
value of the land payable immediately in cash and the balance in the into a voluntary agreement for direct transfer of their lands to
form of LBP bonds bearing market rates of interest that are aligned appropriate beneficiaries, under terms and conditions acceptable to
with 91-day treasury bills rates, net of applicable final withholding both parties and subject to the approval of the DAR. The general
guidelines for voluntary land transfer are:

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(a) The beneficiaries are determined by the DAR to be the same initial implementation, shall be deemed compliance with the land
individuals who would be eligible to purchase the land in case the distribution requirements of the CARP.
government under this Order acquired the land for resale; Sec. 11. Leases, Management Contracts, Mortgages, and Claims.
(b) The area of land to be transferred is no less than the area which Leases and management contracts on land covered by the land
the government, under this Order, would otherwise acquire for distribution and registered with the Register of Deeds prior to the
resale; approval of this Order may continue under their original terms and
(c) The terms and conditions of the government's standing offer to conditions, but not beyond five (5) from the effectivity of this Order;
purchase from the landowner and standing offer to resell to the provided that upon expiration, leases, and management contracts
beneficiaries are fully known and the understood by both parties; may only be renewed subject to the agreement of the qualified
(d) The voluntary transfer agreement shall include sanctions for non- beneficiaries; and provided further that upon the distribution or
compliance by either party and shall be binding and irrevocable for award of the land, where the existing lease rentals are not acceptable
both parties, and shall be duly recorded at and monitored by the to the qualified beneficiaries, such rentals shall be renegotiated with
DAR. the assistance of the Barangay Agrarian Reform Council (BARC). If
Sec. 9. Voluntary Offer to Sell. The government shall purchase all the parties fail to agree, the DAR shall determine the rental.
agricultural lands it deems productive and suitable to farmer Mortgages and other claims registered with the Register of Deeds
cultivation voluntarily offered for sale to it at a valuation determined will be assumed by the government up to the landowner's
in accordance with Section 6. Such transactions shall be exempt from compensation value as provided for in Section 6 hereof.
the payment of capital gains tax and other taxes and fees. Sec. 12. Payment of Beneficiaries. Land acquired and redistributed
Sec. 10. Corporate Landowners. Corporate landowners may give by the government shall be paid for by the beneficiaries in thirty (30)
their workers and other qualified beneficiaries the right to purchase equal annual payments at six (6) percent per annum interest with the
such proportion of the capital stock of the corporation that the land first payment due one year after resale, and a two (2) percent interest
assets bear in relation to the corporation's total assets, and grant rebate for amortizations paid on time, provided, that in no case shall
additional compensation which may be used for this purposes. The the annual amortizations exceed ten (10) percent of the land's annual
approval by the PARC of a plan for such stock distribution, and its value of gross production. Should the amortization exceed ten (10)

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percent, the LBP shall reduce the interest rate and/or reduce the Environment and Natural Resources (DENR) to qualified
principal obligation to make the repayments affordable. Incentives beneficiaries as certified to jointly by the DAR and the DENR.
shall be given for prepayments. Sec. 16. Production Sharing. Individual's or entities owning and/or
The LBP shall have a lien by way of mortgage on the land acquired operating under lease agricultural lands with gross sales in excess of
by the beneficiary and this mortgage may be foreclosed by the LBP Five Million Pesos (P5 million) per annum are hereby mandated to
when the outstanding principal balance unpaid and past due reaches execute a production sharing plan whereby at least two and one-half
the equivalent of three (3) annual amortizations. (2.5) percent of the gross sales from the production/cultivation of
Sec. 13. Credit Support. Upon land transfer, each beneficiary who such lands are distributed as compensation to the farmworkers over
actually farms his land shall be eligible for a production loan to and above the compensation they currently receive, provided that
finance one crop cycle under terms and conditions to be determined such individuals or entities are not obligated to pay more than 100
by the LBP on a case to case basis, renewable upon repayment. percent of the regular and annual compensation of the farmworkers.
Sec. 14. Collective or Individual Ownership. For lands with multiple CHAPTER IV. IMPLEMENTING AND COORDINATING
beneficiaries, ownership of whole parcels or estates may be MECHANISMS
transferred to the farmer-beneficiaries collective or individually, at Sec. 17. Quasi-Judicial Powers of the DAR. The DAR is hereby
the option of the beneficiaries, provided, that in collective vested with quasi-judicial powers to determine and adjudicate
ownership, each beneficiary shall have an undivided share of the agrarian reform matters, and shall have exclusive original
land held in common equivalent to not more than the applicable jurisdiction over all matters involving implementation of agrarian
retention limit. The beneficiaries may collectively decide on the reform, except those falling under the exclusive original jurisdiction
continued operation of the parcel/estate as a whole or to subdivide of the DENR and the Department of Agriculture (DA).
the same into individual lots and determine the manner in which such The DAR shall have powers to punish for contempt and to issue
subdivision is to be implemented. subpoena, subpoena duces tecum and writs to enforce its orders or
Sec. 15. Distribution and Utilization of Public Lands. All alienable decisions.
and disposable lands of the public domain for agriculture and outside
proclaimed settlements shall be distributed by the Department of

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The decisions of the DAR may, in proper cases, be appealed to the Department of Trade and Industry Member
Regional Trial Courts but shall be immediately executory
notwithstanding such appeal. Department of Transportation and Communications Member

Sec. 18. The Presidential Agrarian Reform Council (PARC). To


National Economic and Development Authority Member
coordinate the implementation of the CARP and to ensure the timely
and effective delivery of the necessary support services, there is Land Bank of the Philippines Member
hereby created the Presidential Agrarian Reform Council composed
Presidential Commission on Good Government Member
of the President as Chairman, and the Secretaries or Heads of the
following agencies, as follows: The President shall appoint representatives of agrarian reform
beneficiaries and affected landowners as members of PARC.
Department of Agrarian Reform Vice Chairman
The DAR shall provide the Secretariat for the PARC and the
Department of Agriculture Secretary
Vice of Agrarian Reform shall be the Director-General thereof.
Chairman
The PARC shall formulate and/or implement the policies, rules and
Department of Environment and Natural Resources Vice Chairman
regulations necessary to implement each component of the CARP,

Executive Secretary and may authorize any of its members to formulate rules and
Member
regulations concerning aspects of agrarian reform falling within their
Department of Budget and Management Member
area of responsibility. These policies, rules and regulations shall

Department of Finance include the following:


Member
a. Recommended small farm economy areas, which shall be specific
Department of Justice Member
by crop and based on thorough technical study and evaluation;
b. The schedule of acquisition and redistribution of specific agrarian
Department of Labor and Employment Member
reform areas, provided that such acquisition shall not be
Department of Local Government Member
implemented until all the requirements are completed, including the
first payment to the landowners concerned.
Department of Public Works and Highways Member

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c. Control mechanisms for evaluating the owner's declaration of a. The CARP is founded on the right of farmers and regular
current fair market value as provided in Section 4 hereof in order to farmworkers, who are landless, to own directly or collectively, the
establish the government's compensation offer as provided in Section lands they till or, in the case of other farmworkers, to receive a just
6 hereof, taking into account current land transactions in the locality, share of the fruits thereof;
the landowner's annual income from his land, and other factors. b. The right of small landowners shall be respected;
PARC shall have an Executive Committee composed of the c. Voluntary land-sharing shall be encouraged;
Secretary of Agrarian as Chairman, and Secretaries or Heads of the d. Farmers, farmworkers, landowners, cooperatives and/or
following agencies as members: independent farmers' organizations have the right to participate in the
Executive Secretary planning, organization, and management of the CARP;
Department of Agriculture e. In lands of the public domain, the CARP shall respect prior rights,
Department of Environment and Natural Resources homestead rights of small settlers, and the rights of indigenous
Department of Finance communities to their ancestral lands;
Department of Public Works and Highways f. Support to agriculture through appropriate technology and
Land Bank of the Philippines research, and adequate financial, production, marketing, and other
Within ninety (90) days from the effectivity of this Order, the support services must be provided;
Executive Committee of PARC shall complete a Program of g. Landowners shall be encouraged to invest the proceeds of the
implementation incorporating the physical targets, implementation agrarian reform program to promote industrialization, employment
schedule and support requirements of agrarian reform, and shall creation, and privatization of public sector enterprises; and
submit the same to the PARC, for approval. Such program of h. At the earliest possible time, idle or abandoned agricultural lands
implementation shall take into account, and be consistent with, as may be defined by law shall be expropriated for distribution to the
priorities and retention limits that Congress may in the meantime beneficiaries of the agrarian reform program.
prescribe, and the following basic policies and guidelines set forth in Sec. 19. Barangay Agrarian Reform Council (BARC). On matters
the Constitution: related to agrarian reform, the DAR shall convene at the barangay

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level, a Barangay Agrarian Reform Council. The BARC shall be Agrarian Reform Fund, an initial amount of FIFTY BILLION
operated on a self-help basis and will be composed of the following: PESOS (P50 billion) to cover the estimated cost of the CARP from
a. Representative/s of farmers and farmworkers beneficiaries; 1987 to 1992 which shall be sourced from the receipts of the sale of
b. Representative/s of farmer and farmworkers non-beneficiaries; the assets of the Asset Privatization Trust (APT) and receipts of sale
c. Representative/s of agricultural cooperatives; of ill-gotten wealth recovered through the Presidential Commission
d. Representative/s of other farmer organizations; on Good Government and such other sources as government may
e. Representative/s of the Barangay Council; deem appropriate. The amount collected and accruing to this special
f. Representative/s of non-government organizations (NGOs); fund shall be considered automatically appropriated for the purpose
g. Representative/s of landowners; authorized in this Order.
h. DA official assigned to the barangay; Sec. 21. Supplemental Appropriations. The amount of TWO
i. DENR official assigned to the area; BILLION SEVEN HUNDRED MILLION PESOS (P2.7 billion) is
j. DAR Agrarian Reform Technologist assigned to the area who shall hereby appropriated to cover the supplemental requirements of the
act as the Secretary; and CARP for 1987, to be sourced from the receipts of the sale of ill-
k. Land Bank of the Philippines representative. gotten wealth recovered through the Presidential Commission on
The functions of the BARC shall be: Good Government and the proceeds from the sale of assets by the
a. To participate and give support to the implementation of programs APT. The amount collected from these sources shall accrue to The
on agrarian reform; Agrarian Reform Fund and shall likewise be considered
b. To mediate, conciliate or arbitrate agrarian conflicts and issues automatically appropriated for the purpose authorized in this Order.
that are brought to it for resolution; and CHAPTER VI. SANCTIONS
c. To perform such other functions that the PARC, its Executive Sec. 22. Permanent Disqualification. Persons, associations, or
Committee, or the DAR Secretary may delegate from time to time. entities who prematurely enter the land to avail themselves of the
CHAPTER V. FINANCING rights and benefits hereunder, shall be permanently disqualified from
Sec. 20. Agrarian Reform Fund. As provided in Proclamation No. receiving benefits and shall forfeit their rights hereunder.
131 dated July 22, 1987, a special fund is created, known as The

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Sec. 23. Contempt. Persons, associations, or entities who willfully patents, titles, and documents required in the implementation of the
prevent or obstruct the implementation of the CARP shall be liable CARP.
for contempt. Sec. 20. Separability Clause. If, for any reason, any section or
CHAPTER VII. GENERAL PROVISIONS provisions of this Order shall be held unconstitutional or invalid, no
Sec. 24. Ancestral Lands. Within the framework of national unity other section or provision hereof shall be affected thereby.
and development, the rights of indigenous cultural communities to Sec. 30. Repealing Clause. All laws, issuances, decrees or any part or
their ancestral lands are hereby protected to ensure their economic, parts thereof inconsistent with the provisions of this Order are hereby
social, and cultural well-being. repealed or amended accordingly.
Sec. 25. Immunity of Government Agencies from Undue Sec. 31. Effectivity Clause. This Executive Order shall take effect
Interference. No injunction, restraining order, prohibition or fifteen (15) days publication in the Official Gazette or in a
mandamus shall be issued by the lower courts against the DAR, the newspaper of general circulation in the Philippines.
DA, the DENR and the Department of Justice in their APPROVED, in the City of Manila, Philippines, this 22nd day of
implementation of the CARP. July, 1987.
Sec. 26. Assistance of other Government Entities. The PARC in the
exercise of its functions is hereby authorized to call upon the RA 6657
assistance and support of other government agencies, bureaus, and CHAPTER II
offices, including government-owned or controlled corporations. Coverage
Sec. 27. Applications of Existing Legislation. Presidential Decree Section 4. Scope. The Comprehensive Agrarian Reform Law of
No. 27, as amended, shall continue to operate with respect to rice and 1989 shall cover, regardless of tenurial arrangement and commodity
corn lands, covered thereunder. The provisions of Republic Act No. produced, all public and private agricultural lands, as provided in
3844 and other agrarian laws not inconsistent with this Order shall Proclamation No. 131 and Executive Order No. 229, including other
have suppletory effect. lands of the public domain suitable for agriculture.
Sec. 28. Free Registration of Patents and Titles. All Registers of More specifically the following lands are covered by the
Deeds are hereby directed to register free from payment of all fees, Comprehensive Agrarian Reform Program:

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(a) All alienable and disposable lands of the public domain devoted at least fifteen (15) years of age; and (2) that he is actually tilling the
to or suitable for agriculture. No reclassification of forest or mineral land or directly managing the farm: provided, that landowners whose
lands to agricultural lands shall be undertaken after the approval of lands have been covered by Presidential Decree No. 27 shall be
this Act until Congress, taking into account ecological, allowed to keep the areas originally retained by them thereunder:
developmental and equity considerations, shall have determined by provided, further, that original homestead grantees or their direct
law, the specific limits of the public domain. compulsory heirs who still own the original homestead at the time of
(b) All lands of the public domain in excess of the specific limits as the approval of this Act shall retain the same areas as long as they
determined by Congress in the preceding paragraph; continue to cultivate said homestead.
(c) All other lands owned by the Government devoted to or suitable The right to choose the area to be retained, which shall be compact
for agriculture; and or contiguous, shall pertain to the landowner: provided, however,
(d) All private lands devoted to or suitable for agriculture regardless that in case the area selected for retention by the landowner is
of the agricultural products raised or that can be raised thereon. tenanted, the tenant shall have the option to choose whether to
Section 5. Schedule of Implementation. The distribution of all remain therein or be a beneficiary in the same or another agricultural
lands covered by this Act shall be implemented immediately and land with similar or comparable features.n case the tenant chooses to
completed within ten (10) years from the effectivity thereof. remain in the retained area, he shall be considered a leaseholder and
Section 6. Retention Limits. Except as otherwise provided in this shall lose his right to be a beneficiary under this Act.n case the tenant
Act, no person may own or retain, directly or indirectly, any public chooses to be a beneficiary in another agricultural land, he loses his
or private agricultural land, the size of which shall vary according to right as a leaseholder to the land retained by the landowner. The
factors governing a viable family-size farm, such as commodity tenant must exercise this option within a period of one (1) year from
produced, terrain, infrastructure, and soil fertility as determined by the time the landowner manifests his choice of the area for retention.
the Presidential Agrarian Reform Council (PARC) created In all cases, the security of tenure of the farmers or farmworkers on
hereunder, but in no case shall retention by the landowner exceed the land prior to the approval of this Act shall be respected.
five (5) hectares. Three (3) hectares may be awarded to each child of Upon the effectivity of this Act, any sale, disposition, lease,
the landowner, subject to the following qualifications: (1) that he is management, contract or transfer of possession of private lands

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executed by the original landowner in violation of the Act shall be agricultural leases already cultivated and planted to crops in
null and void: provided, however, that those executed prior to this accordance with Section 6, Article XIII of the Constitution; all public
Act shall be valid only when registered with the Register of Deeds agricultural lands which are to be opened for new development and
within a period of three (3) months after the effectivity of this Act. resettlement; and all private agricultural lands in excess of fifty (50)
Thereafter, all Registers of Deeds shall inform the Department of hectares, insofar as the excess hectarage is concerned, to implement
Agrarian Reform (DAR) within thirty (30) days of any transaction principally the rights of farmers and regular farmworkers, who are
involving agricultural lands in excess of five (5) hectares. the landless, to own directly or collectively the lands they till, which
Section 7. Priorities. The Department of Agrarian Reform (DAR) shall be distributed immediately upon the effectivity of this Act, with
in coordination with the Presidential Agrarian Reform Council the implementation to be completed within a period of not more than
(PARC) shall plan and program the acquisition and distribution of all four (4) years.
agricultural lands through a period of ten (10) years from the Phase Three: All other private agricultural lands commencing with
effectivity of this Act. Lands shall be acquired and distributed as large landholdings and proceeding to medium and small
follows: landholdings under the following schedule:
Phase One: Rice and corn lands under Presidential Decree No. 27; all (a) Landholdings above twenty-four (24) hectares up to fifty (50)
idle or abandoned lands; all private lands voluntarily offered by the hectares, to begin on the fourth (4th) year from the effectivity of this
owners for agrarian reform; all lands foreclosed by the government Act and to be completed within three (3) years; and
financial institutions; all lands acquired by the Presidential (b) Landholdings from the retention limit up to twenty-four (24)
Commission on Good Government (PCGG); and all other lands hectares, to begin on the sixth (6th) year from the effectivity of this
owned by the government devoted to or suitable for agriculture, Act and to be completed within four (4) years; to implement
which shall be acquired and distributed immediately upon the principally the right of farmers and regular farmworkers who are
effectivity of this Act, with the implementation to be completed landless, to own directly or collectively the lands they till.
within a period of not more than four (4) years; The schedule of acquisition and redistribution of all agricultural
Phase Two: All alienable and disposable public agricultural lands; all lands covered by this program shall be made in accordance with the
arable public agricultural lands under agro-forest, pasture and above order of priority, which shall be provided in the implementing

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rules to be prepared by the Presidential Agrarian Reform Council corporations and associations, shall be programmed for acquisition
(PARC), taking into consideration the following; the need to and distribution immediately upon the effectivity of this Act, with
distribute land to the tillers at the earliest practicable time; the need the implementation to be completed within three (3) years.
to enhance agricultural productivity; and the availability of funds and Lands covered by the paragraph immediately preceding, under lease,
resources to implement and support the program. management, grower or service contracts, and the like, shall be
In any case, the PARC, upon recommendation by the Provincial disposed of as follows:
Agrarian Reform Coordinating Committee (PARCCOM), may (a) Lease, management, grower or service contracts covering such
declare certain provinces or region as priority land reform areas, in lands covering an aggregate area in excess of 1,000 hectares, leased
which the acquisition and distribution of private agricultural lands or held by foreign individuals in excess of 500 hectares are deemed
therein may be implemented ahead of the above schedules. amended to conform with the limits set forth in Section 3 of Article
In effecting the transfer within these guidelines, priority must be XII of the Constitution.
given to lands that are tenanted. (b) Contracts covering areas not in excess of 1,000 hectares in the
The PARC shall establish guidelines to implement the above case of such corporations and associations, and 500 hectares, in the
priorities and distribution scheme, including the determination of case of such individuals, shall be allowed to continue under their
who are qualified beneficiaries: provided, that an owner-tiller may be original terms and conditions but not beyond August 29, 1992, or
a beneficiary of the land he does not own but is actually cultivating their valid termination, whichever comes sooner, after which, such
to the extent of the difference between the area of the land he owns agreements shall continue only when confirmed by the appropriate
and the award ceiling of three (3) hectares. government agency. Such contracts shall likewise continue even
Section 8. Multinational Corporations. All lands of the public after the lands has been transferred to beneficiaries or awardees
domain leased, held or possessed by multinational corporations or thereof, which transfer shall be immediately commenced and
associations, and other lands owned by the government or by implemented and completed within the period of three (3) years
government-owned or controlled corporations, associations, mentioned in the first paragraph hereof.
institutions, or entities, devoted to existing and operational agri- (c) In no case will such leases and other agreements now being
business or agro-industrial enterprises, operated by multinational implemented extend beyond August 29, 1992, when all lands subject

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hereof shall have been distributed completely to qualified association or any other proper party, any agreement existing at the
beneficiaries or awardees. time this Act takes effect between the former and the previous
Such agreements can continue thereafter only under a new contract landowner shall be respected by both the workers' cooperative or
between the government or qualified beneficiaries or awardees, on association and the corporation, business, association or such other
the one hand, and said enterprises, on the other. proper party.n no case shall the implementation or application of this
Lands leased, held or possessed by multinational corporations, Act justify or result in the reduction of status or diminution of any
owned by private individuals and private non-governmental benefits received or enjoyed by the worker-beneficiaries, or in which
corporations, associations, institutions and entities, citizens of the they may have a vested right, at the time this Act becomes effective.
Philippines, shall be subject to immediate compulsory acquisition The provisions of Section 32 of this Act, with regard to production
and distribution upon the expiration of the applicable lease, and income-sharing shall apply to farms operated by multinational
management, grower or service contract in effect as of August 29, corporations.
1987, or otherwise, upon its valid termination, whichever comes During the transition period, the new owners shall be assisted in their
sooner, but not later than after ten (10) years following the effectivity efforts to learn modern technology in production. Enterprises which
of the Act. However during the said period of effectivity, the show a willingness and commitment and good-faith efforts to impart
government shall take steps to acquire these lands for immediate voluntarily such advanced technology will be given preferential
distribution thereafter. treatment where feasible.
In general, lands shall be distributed directly to the individual In no case shall a foreign corporation, association, entity or
worker-beneficiaries.n case it is not economically feasible and sound individual enjoy any rights or privileges better than those enjoyed by
to divide the land, then they shall form a workers' cooperative or a domestic corporation, association, entity or individual.
association which will deal with the corporation or business Section 9. Ancestral Lands. For purposes of this Act, ancestral
association or any other proper party for the purpose of entering into lands of each indigenous cultural community shall include, but not
a lease or growers agreement and for all other legitimate purposes. be limited to, lands in the actual, continuous and open possession and
Until a new agreement is entered into by and between the workers' occupation of the community and its members: provided, that the
cooperative or association and the corporation or business Torrens Systems shall be respected.

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The right of these communities to their ancestral lands shall be (18%) slope and over, except those already developed shall be
protected to ensure their economic, social and cultural well-being.n exempt from the coverage of the Act.
line with the principles of self-determination and autonomy, the Section 11. Commercial Farming. Commercial farms, which are
systems of land ownership, land use, and the modes of settling land private agricultural lands devoted to commercial livestock, poultry
disputes of all these communities must be recognized and respected. and swine raising, and aquaculture including saltbeds, fishponds and
Any provision of law to the contrary notwithstanding, the PARC prawn ponds, fruit farms, orchards, vegetable and cut-flower farms,
may suspend the implementation of this Act with respect to ancestral and cacao, coffee and rubber plantations, shall be subject to
lands for the purpose of identifying and delineating such lands: immediate compulsory acquisition and distribution after (10) years
provided, that in the autonomous regions, the respective legislatures from the effectivity of the Act.n the case of new farms, the ten-year
may enact their own laws on ancestral domain subject to the period shall begin from the first year of commercial production and
provisions of the Constitution and the principles enunciated in this operation, as determined by the DAR. During the ten-year period, the
Act and other national laws. government shall initiate the steps necessary to acquire these lands,
Section 10. Exemptions and Exclusions. Lands actually, directly upon payment of just compensation for the land and the
and exclusively used and found to be necessary for parks, wildlife, improvements thereon, preferably in favor of organized cooperatives
forest reserves, reforestation, fish sanctuaries and breeding grounds, or associations, which shall hereafter manage the said lands for the
watersheds, and mangroves, national defense, school sites and worker-beneficiaries.
campuses including experimental farm stations operated by public or If the DAR determines that the purposes for which this deferment is
private schools for educational purposes, seeds and seedlings granted no longer exist, such areas shall automatically be subject to
research and pilot production centers, church sites and convents redistribution.
appurtenant thereto, mosque sites and Islamic centers appurtenant The provisions of Section 32 of the Act, with regard to production-
thereto, communal burial grounds and cemeteries, penal colonies and and income-sharing, shall apply to commercial farms.
penal farms actually worked by the inmates, government and private
research and quarantine centers and all lands with eighteen percent CHAPTER V
Land Acquisition

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Section 16. Procedure for Acquisition of Private Lands. For within fifteen (15) days from the receipt of the notice. After the
purposes of acquisition of private lands, the following procedures expiration of the above period, the matter is deemed submitted for
shall be followed: decision. The DAR shall decide the case within thirty (30) days after
(a) After having identified the land, the landowners and the it is submitted for decision.
beneficiaries, the DAR shall send its notice to acquire the land to the (e) Upon receipt by the landowner of the corresponding payment or,
owners thereof, by personal delivery or registered mail, and post the in case of rejection or no response from the landowner, upon the
same in a conspicuous place in the municipal building and barangay deposit with an accessible bank designated by the DAR of the
hall of the place where the property is located. Said notice shall compensation in cash or in LBP bonds in accordance with this Act,
contain the offer of the DAR to pay a corresponding value in the DAR shall take immediate possession of the land and shall
accordance with the valuation set forth in Sections 17, 18, and other request the proper Register of Deeds to issue a Transfer Certificate of
pertinent provisions hereof. Title (TCT) in the name of the Republic of the Philippines. The DAR
(b) Within thirty (30) days from the date of receipt of written notice shall thereafter proceed with the redistribution of the land to the
by personal delivery or registered mail, the landowner, his qualified beneficiaries.
administrator or representative shall inform the DAR of his (f) Any party who disagrees with the decision may bring the matter
acceptance or rejection of the offer. to the court of proper jurisdiction for final determination of just
(c) If the landowner accepts the offer of the DAR, the Land Bank of compensation.
the Philippines (LBP) shall pay the landowner the purchase price of
the land within thirty (30) days after he executes and delivers a deed RA 7881
of transfer in favor of the government and surrenders the Certificate SEC. 2. Section 10 of Republic Act No. 6657 is hereby amended to
of Title and other muniments of title. read as follows:
(d) In case of rejection or failure to reply, the DAR shall conduct SECTION 10. Exemptions and Exclusions.
summary administrative proceedings to determine the compensation a) Lands actually, directly and exclusively used for parks, wildlife,
for the land requiring the landowner, the LBP and other interested forest reserves, reforestation, fish sanctuaries and breeding grounds,
parties to submit evidence as to the just compensation for the land,

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watersheds and mangroves shall be exempt from the coverage of this educational purposes, seeds and seedlings research and pilot
Act. production center, church sites and convents appurtenant thereto,
b) Private lands actually, directly and exclusively used for prawn mosque sites and Islamic centers appurtenant thereto, communal
farms and fishponds shall be exempt from the coverage of this burial grounds and cemeteries, penal colonies and penal farms
Act: Provided, That said prawn farms and fishponds have not been actually worked by the inmates, government and private research and
distributed and Certificate of Land Ownership Award (CLOA) quarantine centers and all lands with eighteen percent (18%) slope
issued to agrarian reform beneficiaries under the Comprehensive and over, except those already developed, shall be exempt from the
Agrarian Reform Program. coverage of this Act.
In cases where the fishponds or prawn farms have been subjected to SEC. 3. Section 11, Paragraph 1 is hereby amended to read as
the Comprehensive Agrarian Reform Law by voluntary offer to sell, follows:
or commercial farms deferment or notices of compulsory acquisition, SECTION 11. Commercial Farming. Commercial farms, which
a simple and absolute majority of the actual regular workers or are private agricultural lands devoted to saltbeds, fruit farms,
tenants must consent to the exemption within one (1) year from the orchards, vegetable and cut-flower farms, and cacao, coffee and
effectivity of this Act When the workers or tenants do not agree to rubber plantations, shall be subject to immediate compulsory
this exemption the fishponds or prawn farms shall be distributed acquisition and distribution after ten (10) years from the effectivity
collectively to the worker-beneficiaries or tenants who shall form a of this Act.In the case of new farms, the ten-year period shall begin
cooperative or association to manage the same. from the first year of commercial production and operation, as
In cases where the fishponds or prawn farms have not been determined by the DAR.During the ten-year period, the Government
subjected to the Comprehensive Agrarian Reform Law the consent of shall initiate steps necessary to acquire these lands, upon payment of
the farm workers shall no longer be necessary however, the just compensation for the land and the improvements thereon,
provision of Section 32-A hereof on incentives shall apply. preferably in favor of organized cooperatives or associations which
c) Lands actually, directly and exclusively used and found to be shall thereafter manage the said lands for the workers-beneficiaries.
necessary for national defense, school sites and campuses, including
experimental farm stations operated by public or private schools for

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RA 8532 "b) All receipts from assets recovered and from sales of ill-gotten
wealth recovered through the Presidential Commission on Good
AN ACT STRENGTHENING FURTHER THE Government;
COMPREHENSIVE AGRARIAN REFORM PROGRAM "c) Proceeds of the disposition of the properties of the Government
(CARP), BY PROVIDING AUGMENTATION FUND in foreign countries, for the specific purposes of financing
THEREFOR, AMENDING FOR THE PURPOSE SECTION 63 production credits, infrastructure and other support services required
OF REPUBLIC ACT NO. 6657, OTHERWISE KNOWN AS by this Act;
"THE CARP LAW OF 1988" "d) All income and collections arising from the agrarian reform
Be it enacted by the Senate and House of Representatives of the operations, projects and programs of CARP implementing agencies;
Philippines in Congress assembled:: "e) Portion of amounts accruing to the Philippines from all sources
Section 1. Sec. 63 of Republic Act No. 6657, otherwise known as of official foreign aid grants and concessional financing from all
the Comprehensive Agrarian Reform Law of 1988 is hereby countries, to be used for the specific purposes of financing
amended to read as follows: production, credits, infrastructures, and other support services
"Sec. 63. Funding source. The amount needed to implement this required by this Act;
Act until the year 2008 shall be funded from the Agrarian Reform "f) Yearly appropriations of no less than Three billion pesos
Fund. (P3,000,000,000.00) from the General Appropriations Act;
"Additional amounts necessary for this purpose are hereby "g) Other government funds not otherwise appropriated."
authorized to be appropriated in excess of the initial funds, Section 2. This Act shall take effect within fifteen (15) days
amounting to Fifty billion pesos (P50,000,000,000.00) provided following the completion of its publication in at least two (2)
under Sections 20 and 21 of Executive Order No. 229. newspapers of general circulation.
"The additional amount hereby authorized to be appropriated shall in Approved: February 23, 1998
no case exceed Fifty billion pesos (P50,000,000,000.00).
"Sources of funding or appropriations shall include the following:
"a) Proceeds of the sales of the Assets Privatization Trust;

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RA 9700 Reform (DAR), in accordance with the Local Government Code, for
SECTION 3. Section 4 of Republic Act No. 6657, as amended, is the purpose of properly identifying and classifying farmlands within
hereby further amended to read as follows: "SEC. 4. Scope. The one (1) year from effectivity of this Act, without prejudice to the
Comprehensive Agrarian Reform Law of 1988 shall cover, implementation of the land acquisition and distribution."
regardless of tenurial arrangement and commodity produced, all SECTION 4. There shall be incorporated after Section 6 of Republic
public and private agricultural lands as provided in Proclamation No. Act No. 6657, as amended, new sections to read as follows: EHTISC
131 and Executive Order No. 229, including other lands of the public "SEC. 6-A. Exception to Retention Limits. Provincial, city and
domain suitable for agriculture: Provided, That landholdings of municipal government units acquiring private agricultural lands by
landowners with a total area of five (5) hectares and below shall not expropriation or other modes of acquisition to be used for actual,
be covered for acquisition and distribution to qualified beneficiaries. direct and exclusive public purposes, such as roads and bridges,
IHAcCS "More specifically, the following lands are covered by the public markets, school sites, resettlement sites, local government
CARP: "(a) All alienable and disposable lands of the public domain facilities, public parks and barangay plazas or squares, consistent
devoted to or suitable for agriculture. No reclassification of forest or with the approved local comprehensive land use plan, shall not be
mineral lands to agricultural lands shall be undertaken after the subject to the five (5)-hectare retention limit under this Section and
approval of this Act until Congress, taking into account ecological, Sections 70 and 73(a) of Republic Act No. 6657, as amended:
developmental and equity considerations, shall have determined by Provided, That lands subject to CARP shall first undergo the land
law, the specific limits of the public domain; "(b) All lands of the acquisition and distribution process of the program: Provided,
public domain in excess of the specific limits as determined by further, That when these lands have been subjected to expropriation,
Congress in the preceding paragraph; "(c) All other lands owned by the agrarian reform beneficiaries therein shall be paid just
the Government devoted to or suitable for agriculture; and "(d) All compensation." "SEC. 6-B. Review of Limits of Land Size.
private lands devoted to or suitable for agriculture regardless of the Within six (6) months from the effectivity of this Act, the DAR shall
agricultural products raised or that can be raised thereon. "A submit a comprehensive study on the land size appropriate for each
comprehensive inventory system in consonance with the national type of crop to Congress for a possible review of limits of land sizes
land use plan shall be instituted by the Department of Agrarian provided in this Act."

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SECTION 5. Section 7 of Republic Act No. 6657, as amended, is amended, only farmers (tenants or lessees) and regular farmworkers
hereby further amended to read as follows: "SEC. 7. Priorities. actually tilling the lands, as certified under oath by the Barangay
The DAR, in coordination with the Presidential Agrarian Reform Agrarian Reform Council (BARC) and attested under oath by the
Council (PARC) shall plan and program the final acquisition and landowners, are the qualified beneficiaries. The intended beneficiary
distribution of all remaining unacquired and undistributed shall state under oath before the judge of the city or municipal court
agricultural lands from the effectivity of this Act until June 30, 2014. that he/she is willing to work on the land to make it productive and
Lands shall be acquired and distributed as follows: to assume the obligation of paying the amortization for the
"Phase One: During the five (5)-year extension period hereafter all compensation of the land and the land taxes thereon; all lands
remaining lands above fifty (50) hectares shall be covered for foreclosed by government financial institutions; all lands acquired by
purposes of agrarian reform upon the effectivity of this Act. All the Presidential Commission on Good Government (PCGG); and all
private agricultural lands of landowners with aggregate landholdings other lands owned by the government devoted to or suitable for
in excess of fifty (50) hectares which have already been subjected to agriculture, which shall be acquired and distributed immediately
a notice of coverage issued on or before December 10, 2008; rice and upon the effectivity of this Act, with the implementation to be
corn lands under Presidential Decree No. 27; all idle or abandoned completed by June 30, 2012;
lands; all private lands voluntarily offered by the owners for agrarian "Phase Two: (a) Lands twenty-four (24) hectares up to fifty (50)
reform: Provided, That with respect to voluntary land transfer, only hectares shall likewise be covered for purposes of agrarian reform
those submitted by June 30, 2009 shall be allowed: Provided, further, upon the effectivity of this Act. All alienable and disposable public
That after June 30, 2009, the modes of acquisition shall be limited to agricultural lands; all arable public agricultural lands under agro-
voluntary offer to sell and compulsory acquisition: Provided, forest, pasture and agricultural leases already cultivated and planted
furthermore, That all previously acquired lands wherein valuation is to crops in accordance with Section 6, Article XIII of the
subject to challenge by landowners shall be completed and finally Constitution; all public agricultural lands which are to be opened for
resolved pursuant to Section 17 of Republic Act No. 6657, as new development and resettlement; and all private agricultural lands
amended: Provided, finally, as mandated by the Constitution, of landowners with aggregate landholdings: above twenty-four (24)
Republic Act No. 6657, as amended, and Republic Act No. 3844, as hectares up to fifty (50) hectares which have already been subjected

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to a notice of coverage issued on or before December 10, 2008, to rules to be prepared by the PARC, taking into consideration the
implement principally the rights of farmers and regular farmworkers, following: the landholdings wherein the farmers are organized and
who are landless, to own directly or collectively the lands they till, understand the meaning and obligations of farmland ownership; the
which shall be distributed immediately upon the effectivity of this distribution of lands to the tillers at the earliest practicable time; the
Act, with the implementation to be completed by June 30, 2012; and enhancement of agricultural productivity; and the availability of
"(b) All remaining private agricultural lands of landowners with funds and resources to implement and support the program:
aggregate landholdings in excess of twenty-four (24) hectares, Provided, That the PARC shall design and conduct seminars,
regardless as to whether these have been subjected to notices of symposia, information campaigns, and other similar programs for
coverage or not, with the implementation to begin on July 1, 2012 farmers who are not organized or not covered by any landholdings.
and to be completed by June 30, 2013; Completion by these farmers of the aforementioned seminars,
"Phase Three: All other private agricultural lands commencing with symposia, and other similar programs shall be encouraged in the
large landholdings and proceeding to medium and small implementation of this Act particularly the provisions of this Section.
landholdings under the following schedule: "(a) Lands of landowners "Land acquisition and distribution shall be completed by June 30,
with aggregate landholdings above ten (10) hectares up to twenty- 2014 on a province-by-province basis.
four (24) hectares, insofar as the excess hectarage above ten (10) In any case, the PARC or the PARC Executive Committee (PARC
hectares is concerned, to begin on July 1, 2012 and to be completed EXCOM), upon recommendation by the Provincial Agrarian Reform
by June 30, 2013; and "(b) Lands of landowners with aggregate Coordinating Committee (PARCCOM), may declare certain
landholdings from the retention limit up to ten (10) hectares, to begin provinces as priority land reform areas, in which case the acquisition
on July 1, 2013 and to be completed by June 30, 2014; to implement and distribution of private agricultural lands therein under advanced
principally the right of farmers and regular farmworkers who are phases may be implemented ahead of the above schedules on the
landless, to own directly or collectively the lands they till. condition that prior phases in these provinces have been completed:
"The schedule of acquisition and redistribution of all agricultural Provided, That notwithstanding the above schedules, phase three (b)
lands covered by this program shall be made in accordance with the shall not be implemented in a particular province until at least ninety
above order of priority, which shall be provided in the implementing percent (90%) of the provincial balance of that particular province as

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of January 1, 2009 under Phase One, Phase Two (a), Phase Two (b), provided in this Act, until June 30, 2014, upon expiration of funding
and Phase Three (a), excluding lands under the jurisdiction of the under Republic Act No. 8532 and other pertinent laws, shall be
Department of Environment and Natural Resources (DENR), have funded from the Agrarian Reform Fund and other funding sources in
been successfully completed. the amount of at least One hundred fifty billion pesos
"The PARC shall establish guidelines to implement the above (P150,000,000,000.00). "Additional amounts are hereby authorized
priorities and distribution scheme, including the determination of to be appropriated as and when needed to augment the Agrarian
who are qualified beneficiaries: Provided, That an owner-tiller may Reform Fund in order to fully implement the provisions of this Act
be a beneficiary of the land he/she does not own but is actually during the five (5)-year extension period. "Sources of funding or
cultivating to the extent of the difference between the area of the appropriations shall include the following: "(a) Proceeds of the sales
land he/she owns and the award ceiling of three (3) hectares: of the Privatization and Management Office (PMO); "(b) All receipts
Provided, further, That collective ownership by the farmer from assets recovered and from sales of ill-gotten wealth recovered
beneficiaries shall be subject to Section 25 of Republic Act No. through the PCGG excluding the amount appropriated for
6657, as amended: Provided, furthermore, That rural women shall be compensation to victims of human rights violations under the
given the opportunity to participate in the development planning and applicable law; ITCcAD "(c) Proceeds of the disposition and
implementation of this Act: Provided, finally, That in no case should development of the properties of the Government in foreign
the agrarian reform beneficiaries' sex, economic, religious, social, countries, for the specific purposes of financing production credits,
cultural and political attributes adversely affect the distribution of infrastructure and other support services required by this Act; "(d)
lands." All income and collections of whatever form and nature arising from
SECTION 6. The title of Section 16 of Republic Act No. 6657, as the agrarian reform operations, projects and programs of the DAR
amended, is hereby further amended to read as follows: "SEC. 16. and other CARP implementing agencies; "(e) Portion of amounts
Procedure for Acquisition and Distribution of Private Lands." accruing to the Philippines from all sources of official foreign aid
SECTION 21. Section 63 of Republic Act No. 6657, as amended, is grants and concessional financing from all countries, to be used for
hereby further amended to read as follows: "SEC. 63. Funding the specific purposes of financing productions, credits,
Source. The amount needed to further implement the CARP as infrastructures, and other support services required by this Act; "(f)

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Yearly appropriations of no less than Five billion pesos Association of Small Land Owners v Secretary
(P5,000,000,000.00) from the General Appropriations Act; "(g) These are four consolidated cases questioning the constitutionality of
Gratuitous financial assistance from legitimate sources; and (h) the Comprehensive Agrarian Reform Act (R.A. No. 6657 and related
Other government funds not otherwise appropriated. "All funds laws i.e., Agrarian Land Reform Code or R.A. No. 3844).
appropriated to implement the provisions of this Act shall be Brief background: Article XIII of the Constitution on Social Justice
considered continuing appropriations during the period of its and Human Rights includes a call for the adoption by the State of an
implementation: Provided, That if the need arises, specific amounts agrarian reform program. The State shall, by law, undertake an
for bond redemptions, interest payments and other existing agrarian reform program founded on the right of farmers and regular
obligations arising from the implementation of the program shall be farmworkers, who are landless, to own directly or collectively the
included in the annual General Appropriations Act: Provided, lands they till or, in the case of other farmworkers, to receive a just
further, That all just compensation payments to landowners, share of the fruits thereof. RA 3844 was enacted in 1963. P.D. No.
including execution of judgments therefor, shall only be sourced 27 was promulgated in 1972 to provide for the compulsory
from the Agrarian Reform Fund: Provided, however, That just acquisition of private lands for distribution among tenant-farmers
compensation payments that cannot be covered within the approved and to specify maximum retention limits for landowners. In 1987,
annual budget of the program shall be chargeable against the debt President Corazon Aquino issued E.O. No. 228, declaring full land
service program of the national government, or any unprogrammed ownership in favor of the beneficiaries of PD 27 and providing for
item in the General Appropriations Act: Provided, finally, That after the valuation of still unvalued lands covered by the decree as well as
the completion of the land acquisition and distribution component of the manner of their payment. In 1987, P.P. No. 131, instituting a
the CARP, the yearly appropriation shall be allocated fully to support comprehensive agrarian reform program (CARP) was enacted; later,
services, agrarian justice delivery and operational requirements of E.O. No. 229, providing the mechanics for its (PP131s)
the DAR and the other CARP implementing agencies." implementation, was also enacted. Afterwhich is the enactment of
R.A. No. 6657, Comprehensive Agrarian Reform Law in 1988. This
law, while considerably changing the earlier mentioned enactments,

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nevertheless gives them suppletory effect insofar as they are not Manaay also questioned the provision which states that landowners
inconsistent with its provisions. may be paid for their land in bonds and not necessarily in cash.
[Two of the consolidated cases are discussed below] Manaay averred that just compensation has always been in the form
G.R. No. 78742: (Association of Small Landowners vs Secretary) of money and not in bonds.
The Association of Small Landowners in the Philippines, Inc. sought ISSUE:
exception from the land distribution scheme provided for in R.A. 1. Whether or not there was a violation of the equal protection
6657. The Association is comprised of landowners of ricelands and clause.
cornlands whose landholdings do not exceed 7 hectares. They invoke 2. Whether or not there is a violation of due process.
that since their landholdings are less than 7 hectares, they should not 3. Whether or not just compensation, under the agrarian reform
be forced to distribute their land to their tenants under R.A. 6657 for program, must be in terms of cash.
they themselves have shown willingness to till their own land. In HELD:
short, they want to be exempted from agrarian reform program 1. No. The Association had not shown any proof that they belong to
because they claim to belong to a different class. a different class exempt from the agrarian reform program. Under the
G.R. No. 79777: (Manaay vs Juico) law, classification has been defined as the grouping of persons or
Nicolas Manaay questioned the validity of the agrarian reform laws things similar to each other in certain particulars and different from
(PD 27, EO 228, and 229) on the ground that these laws already each other in these same particulars. To be valid, it must conform to
valuated their lands for the agrarian reform program and that the the following requirements:
specific amount must be determined by the Department of Agrarian (1) it must be based on substantial distinctions;
Reform (DAR). Manaay averred that this violated the principle in (2) it must be germane to the purposes of the law;
eminent domain which provides that only courts can determine just (3) it must not be limited to existing conditions only; and
compensation. This, for Manaay, also violated due process for under (4) it must apply equally to all the members of the class.
the constitution, no property shall be taken for public use without Equal protection simply means that all persons or things similarly
just compensation. situated must be treated alike both as to the rights conferred and the
liabilities imposed. The Association have not shown that they belong

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to a different class and entitled to a different treatment. The body, then it can go to court and the determination of the latter shall
argument that not only landowners but also owners of other be the final determination. This is even so provided by RA 6657:
properties must be made to share the burden of implementing land Section 16 (f): Any party who disagrees with the decision may bring
reform must be rejected. There is a substantial distinction between the matter to the court of proper jurisdiction for final determination
these two classes of owners that is clearly visible except to those of just compensation.
who will not see. There is no need to elaborate on this matter. In any 3. No. Money as [sole] payment for just compensation is merely a
event, the Congress is allowed a wide leeway in providing for a valid concept in traditional exercise of eminent domain. The agrarian
classification. Its decision is accorded recognition and respect by the reform program is a revolutionary exercise of eminent domain. The
courts of justice except only where its discretion is abused to the program will require billions of pesos in funds if all compensation
detriment of the Bill of Rights. In the contrary, it appears that have to be made in cash if everything is in cash, then the
Congress is right in classifying small landowners as part of the government will not have sufficient money hence, bonds, and other
agrarian reform program. securities, i.e., shares of stocks, may be used for just compensation.
2. No. It is true that the determination of just compensation is a
power lodged in the courts. However, there is no law which prohibits CMU v DARAB
administrative bodies like the DAR from determining just Facts:
compensation. In fact, just compensation can be that amount agreed On 16 January 1958, President Carlos Garcia issued Proclamation
upon by the landowner and the government even without judicial No. 467 reserving for the Mindanao Agricultural College, now the
intervention so long as both parties agree. The DAR can determine CMU, a piece of land to be used as its future campus. In 1984, CMU
just compensation through appraisers and if the landowner agrees, embarked on a project titled "Kilusang Sariling Sikap" wherein
then judicial intervention is not needed. What is contemplated by law parcels of land were leased to its faculty members and employees.
however is that, the just compensation determined by an Under the terms of the program, CMU will assist faculty members
administrative body is merely preliminary. If the landowner does not and employee groups through the extension of technical know-how,
agree with the finding of just compensation by an administrative training and other kinds of assistance. In turn, they paid the CMU a
service fee for use of the land. The agreement explicitly provided

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that there will be no tenancy relationship between the lessees and the utilized by the university in carrying out its present educational
CMU. program with its present student population and academic faculty"
When the program was terminated, a case was filed by the overlooked the very significant factor of growth of the university in
participants of the "Kilusang Sariling Sikap" for declaration of status the years to come.
as tenants under the CARP. In its resolution, DARAB, ordered,
among others, the segregation of 400 hectares of the land for B. Modes of Acquisition
distribution under CARP. The land was subjected to coverage on the
basis of DAR's determination that the lands do not meet the 1. Operation land transfermechanism established for the
condition for exemption, that is, it is not "actually, directly, and implementation of PD27
exclusively used" for educational purposes. 2. Voluntary offer to sellscheme whereby the landowners
voluntarily offer their agricultural lands for coverage regardless of
Issue: phasing
Is the CMU land covered by CARP? Who determines whether lands 3. Voluntary land transfer/direct payment schemelandowner and
reserved for public use by presidential proclamation is no longer the beneficiary enter into a voluntary agreement for the direct
actually, directly and exclusively used and necessary for the purpose transfer of lands to the latter
for which they are reserved? 4. Compulsory acquisitionwhereby the land is expropriated by the
State (Section 16 of RA 6657)
Held: 5. Voluntary stock distribution in the case of corporate farms
The land is exempted from CARP. CMU is in the best position to alternative arrangement for the physical distribution of lands wherein
resolve and answer the question of when and what lands are found corporate owners voluntarily divest a portion of their capital stock,
necessary for its use. The Court also chided the DARAB for equity or participation in favor of their workers or other qualified
resolving this issue of exemption on the basis of "CMU's present beneficiaries
needs." The Court stated that the DARAB decision stating that for
the land to be exempt it must be "presently, actively exploited and

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C. Procedure for Acquisition certification as to whether or not it was proper for trial in accordance
1. Notice of Coverage with Presidential Decree No. 316, (Ibid., pp. 10-11), but said office
failed to act upon the request for certification, for a period of more
Vinzons-Magana v Estrella than three (3) years. Instead on July 10, 1980, the riceland was
Petitioner challenges in this petition for prohibition with prayer for placed under the Land Transfer Program by virtue of Memorandum
restraining order the validity and constitutionality of Letter of Circular No. 11, Series of 1978, which implemented Letter of
Instructions No. 474 and Memorandum Circular No. 11, Series of Instructions No. 474, which placed all tenanted ricelands with areas
1978 enforced by the then Minister and the Regional Director of the of seven hectares or less belonging to landowners who own
Ministry of Agrarian Reform and likewise seeks the cancellation of agricultural lands of more than seven hectares in aggregate areas
Certificate of Land Transfer No. 0046145 issued to Domingo Paitan under the Land Transfer Program of the government. The prescribed
by the deposed President Ferdinand Marcos pursuant to Presidential procedures therein were subsequently undertaken and thereafter, on
Decree No. 27. Cdpr July 10, 1980, a certificate of Land Transfer was finally awarded in
The records show that petitioner Magana is the owner of a favor of Domingo Paitan. As a consequence thereof, the rentals were
parcel of riceland situated in the barrio of Talisay, Camarines Norte. no longer paid to Magana but were deposited instead with the Land
The said riceland was tenanted by the late Domingo Paitan, husband Bank and credited as amortization payments for the riceland.
of private respondent herein, Juana Vda. de Paitan, under an Apparently aggrieved by this turn of events, Magana took the present
agricultural leasehold agreement. On October 20, 1977, Magana filed recourse.
a petition for the termination of the leasehold agreement allegedly As earlier mentioned, the Court is now asked to resolve the
due to (1) non-payment of rentals; (2) inability and failure of constitutionality of Memorandum Circular No. 11, Series of 1978,
Domingo Paitan to do the tilling and cultivation of the riceland due and Letter of Instructions No. 474.
to his long illness; and (3) subleasing of the land holding to third The petition is devoid of merit.
parties (Rollo, p. 2). On June 2, 1978, the former Presiding Judge of The constitutionality of P.D. No. 27 from which Letter of
the Court of Agrarian Relations, Judge Juan Llaguno, referred the Instructions No. 474 and Memorandum Circular No. 11, Series of
case to the Secretary of the Department of Agrarian Reform for 1978 are derived, is now well settled (Chavez v. Zobel, 55 SCRA 26

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[1974], Gonzales v. Estrella, 91 SCRA 292 [1979]; Zurbano v. 474 whose constitutionality has already been established, clarifying
Estrella, 137 SCRA 334, 335 [1985]; Ass. of Small Landowners in for DAR personnel the guidelines set for under said LOI 474 (Rollo,
the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA p. 111). Moreover, it is an elementary rule in administrative law that
366 [1989]). administrative regulations and policies enacted by administrative
More specifically, this Court also upheld the validity and bodies to interpret the law which they are entrusted to enforce, have
constitutionality of Letter of Instructions No. 474 which directed the force of law and are entitled to great respect (Rizal Empire Ins.
then Secretary of Agrarian Reform Conrado Estrella to "undertake to Group and or Corpus, Sergio v. NLRC, et al., G.R. No. 73140, May
place under the Land Transfer Program of the government pursuant 29, 1987).
to Presidential Decree No. 27, all tenanted rice/corn lands with areas The main thrust of this petition is that the issuance of Certificate
of seven hectares or less belonging to landowners who own other of Land Transfer to Domingo Paitan without first expropriating said
agricultural lands of more than seven hectares in aggregate areas or property to pay petitioner landowner the full market value thereof
lands used for residential, commercial, industrial or other urban before ceding and transferring the land to Paitan and or heirs, is
purposes from which they derive adequate income to support invalid and unconstitutional as it is confiscatory and violates the due
themselves and their families". It was held that LOI 474 is neither a process clause of the Constitution (Rollo, p. 4).
class legislation nor does it deprive a person of property without due The issue of the constitutionality of the taking of private property
process of law or just compensation (Zurbano v. Estrella, 137 SCRA under the CARP Law has already been settled by this Court holding
333 [1985]). Moreover, LOI 474 was duly published in the Official that where the measures under challenge merely prescribe the
Gazette dated November 29, 1976 and has therefore complied with retention limits for landowners, there is an exercise of police power
the publication requirement as held by this Court in Taada v. by the government, but where to carry out such regulation, it
Tuvera (146 SCRA 446 [1986]); Assn. of Small Landowners in the becomes necessary to deprive such owners of whatever lands they
Philippines, Inc. v. Secretary of Agrarian Reform (175 SCRA 369 may own in excess of the maximum area allowed, then there is
[1989]). definitely a taking under the power of eminent domain for which
As to the constitutionality of DAR Memo Circular No. 11, it is payment of just compensation is imperative. To be sure, the
evident that DAR Memo Circular No. 11 merely implements LOI determination of just compensation is a function addressed to the

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courts of justice and may not be usurped by any branch or official of merely possesses a contingent or expectant right of ownership over
the government (Association of Small Landowners in the the land holding (Ibid.).
Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 373 Under the foregoing principles, a reading of Section 16 (d) of
[1989]). the CARP law will readily show that it does not suffer from
It must be stressed, however, that the mere issuance of the arbitrariness which makes it constitutionally objectionable. Although
certificate of land transfer does not vest in the farmer/grantee the proceedings are described as summary, the landowner and other
ownership of the land described therein. At most, the certificate interested parties are nevertheless allowed an opportunity to submit
merely evidences the government's recognition of the grantee as the evidence on the real value of the property. But more importantly,
party qualified to avail of the statutory mechanisms for the such determination of just compensation by the DAR, as earlier
acquisition of ownership of the land titled by him as provided under stated is by no means final and conclusive upon the landowner or
Presidential Decree No. 27. Neither is this recognition permanent nor any other interested party for Section 16 (f) clearly provides: "Any
irrevocable. Thus, failure on the part of the farmer/grantee to comply party who disagrees with the decision may bring the matter to the
with his obligation to pay his lease rentals or amortization payments court of proper jurisdiction for final determination of just
when they fall due for a period of two (2) years to the landowner or compensation." For obvious reasons, the determination made by the
agricultural lessor is a ground for forfeiture of his certificate of land DAR is only preliminary unless accepted by all parties concerned.
transfer (Section 2, P.D. No. 816; Pagtalunan v. Tamayo, G.R. No. Otherwise, the courts of justice will still have the right to renew with
54281, March 9, 1990). finality the said determination in the exercise of what is admittedly a
This Court has therefore clarified, that it is only compliance judicial function (Association of Small Landowners in the
with the prescribed conditions which entitles the farmer/grantee to an Philippines, Inc. v. Secretary of Agrarian Reform, supra, pp. 380-
emancipation patent by which he acquires the vested right of 382).
absolute ownership in the landholding a right which has become Indeed, the delay in the preparation of the proper certification
fixed and established and is no longer open to doubt and controversy. by the MAR field office to the Court of Agrarian Relations as to
At best the farmer/grantee prior to compliance with these conditions, whether or not the case was proper for trial, is unfortunate and the
officer concerned is under investigation (Rollo, pp. 41-42). It will,

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however, be observed that from the outset under P.D. No. 27, the Roxas v CA
tenant-farmer as of October 21, 1972 has already been deemed in a Facts: This case involves three haciendas in Nasugbu Batangas
certain sense, to be the owner of a portion of land, subject of course, owned by petitioner and the validity of the acquisition of these by the
to certain conditions (Association of Small Landowners in the government under RA 6657 or the Comprehensive Agrarian Reform
Philippines, Inc. v. Secretary of Agrarian Reform, supra p. 390). In Law of 9188. Petitioner Roxas and Co. is a domestic corporation and
fact, it appears that petitioner Magana was not unaware that the land is the registered owner of three haciendas, namely Hacienda Palico,
in question previous to the filing of the CAR case on October 20, Banilad and Caylaway. The events of this case occurred during the
1977, had already been identified as subject of land transfer. It also incumbency of then President Aquino, in the exercise of legislative
appears that on September 20, 1976 Paitan had already been power, the President signed on July 22, 1987, Proclamation No. 131
identified to be cultivating the land to rice as tenant of petitioner and instituting a Comprehensive Agrarian Reform Program and
that his land holding was the subject of land tenure survey and was Executive Order No. 229 providing the mechanisms necessary to
found to be proper for OLT coverage under Presidential Decree No. initially implement the program. Congress passed Republic Act No.
27 (Rollo, pp. 41-42). 6657; the Act was signed by the President on June 10, 1988 and took
In any event, as already discussed, the proceedings herein are effect on June 15, 1988. Before the laws effectivity, petitioner filed
merely preliminary and petitioner Magana is not without protection. with respondent DAR a voluntary offer to sell Hacienda Caylaway
Should she fail to agree on the price of her land as fixed by the DAR, pursuant to the provisions of EO No. 229. Haciendas Palico and
she can bring the matter to the court of proper jurisdiction. Likewise, Banilad were later placed under compulsory acquisition by
failure on the part of the farmer/grantee to pay his lease rentals or respondent DAR in accordance with the CARL.
amortization payments for a period of two (2) years is a ground for
forfeiture of his certificate of land transfer. Petitioner was informed that 1,023.999 hectares of its land in
PREMISES CONSIDERED, the petition is DISMISSED Hacienda Palico were subject to immediate acquisition and
without prejudice to petitioner's filing of the proper action for the distribution by the government under the CARL. Meanwhile in a
determination of just compensation in the proper forum. letter dated May 4, 1993, petitioner applied with the DAR for
SO ORDERED. conversion of Haciendas Palico and Banilad from agricultural to

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non-agricultural lands under the provisions of the CARL. Despite On August 24, 1993, petitioner instituted a case with respondent
petitioners application for conversion, respondent DAR proceeded DAR Adjudication Board praying for the cancellation of the CLOAs
with the acquisition of the two Haciendas. The Land Bank of the issued by respondent DAR in the name of the farmers. Petitioner
Philippines trust accounts as compensation for Hacienda Palico were alleged that the Municipality of Nasugbu, where the haciendas are
replaced by respondent DAR with cash and LBP bonds. On October located, had been declared a tourist zone, that the land is not suitable
22, 1993, from the title of the Hacienda, respondent DAR registered for agricultural production, and that the Sangguniang Bayan of
Certificate of Land Ownership Award No. 6654. On October 30, Nasugbu had reclassified the land to non-agricultural. Respondent
1993, CLOAs were distributed to farmer beneficiaries. On DARAB held that the case involved the prejudicial question of
December 18, 1991, the LBP certified certain amounts in cash and whether the property was subject to agrarian reform; hence, this
LBP bonds had been earmarked as compensation for petitioners question should be submitted to the Office of the Secretary of
land in Hacienda Banilad. On May 4, 1993, petitioner applied for Agrarian Reform for determination.
conversion of both Haciendas Palico and Banilad. Hacienda Petitioner filed a petition with the CA. It questioned the
Caylaway was voluntarily offered for sale to the government on May expropriation of its properties under the CARL and the denial of due
6, 1988 before the effectivity of the CARL. Nevertheless, on August process in the acquisition of its landholdings. Meanwhile, the
6, 1992, petitioner, through its President, Eduardo Roxas, sent a petition for conversion of the three haciendas was denied.
letter to the Secretary of respondent DAR withdrawing its VOS of Petitioners petition was dismissed by the CA. Hence, this recourse.
Hacienda Caylaway. The Sangguniang Bayan of Nasugbu, Batangas Issue: Whether or not the acquisition proceedings over the haciendas
allegedly authorized the reclassification of Hacienda Caylaway from were valid and in accordance with the law.
agricultural to non-agricultural. As a result, petitioner informed Held: No, for a valid implementation of the CAR Program, two
respondent DAR that it was applying for conversion of Hacienda notices are required first the Notice of Coverage and letter of
Caylaway from agricultural to other uses. Respondent DAR invitation to a preliminary conference sent to the landowner, the
Secretary informed petitioner that a reclassification of the land would representatives of the BARC, LBP, farmer beneficiaries and other
not exempt it from agrarian reform. interested parties and second, the Notice of Acquisition sent to the
landowner under Section 16 of the CARL. The importance of the

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first notice, the Notice of Coverage and the letter of invitation to the through no fault of their own, of the land they till. The petition is
conference, and its actual conduct cannot be understated. They are granted in part and the acquisition proceedings over the three
steps designed to comply with the requirements of administrative due haciendas are nullified for respondent DAR's failure to observe due
process. The implementation of the CARL is an exercise of the process.
States police power and the power of eminent domain. To the
extent that the CARL prescribes retention limits to the landowners, DAR v Sarangani Agricultural Co
there is an exercise of police power for the regulation of private Facts: The Sangguniang Bayan of Alabel, Sarangani passed
property in accordance with the Constitution. But where, to carry out Resolution No. 97-08 adopting a 10 year comprehensive
such regulation, the owners are deprived of lands they own in excess development plan of the municipality and its land use. On January
of the maximum area allowed, there is also a taking under the power 30, 1998, pursuant to Municipal Zoning Ordinance No. 08, Series of
of eminent domain. In this case, respondent DAR claims that it sent a 1997, and to accelerate the development and urbanization of Alabel,
letter of invitation to petitioner corporation, through Jaime Pimentel, the Sangguniang Bayan of Alabel passed Resolution No. 98-03
the administrator of Hacienda Palico but he was not authorized as reclassifying lots that were located within the built-up areas, based
such by the corporation. The SC stressed that the failure of on the 1995-2005 Land Use Plan of the municipality, from
respondent DAR to comply with the requisites of due process in the agricultural to non-agricultural uses.
acquisition proceedings does not give the SC the power to nullify the Later, the Sangguniang Panlalawigan of Sarangani approved
CLOAs already issued to the farmer beneficiaries. The Court said, Resolution No. 98-018 or the Resolution Adopting the Ten-Year
to assume the power is to short-circuit the administrative process, Municipal Comprehensive Development Plan (MCDP 1995-2205)
which has yet to run its regular course. Respondent DAR must be and the Land Use Development Plan and Zoning Ordinance of the
given the chance to correct its procedural lapses in the acquisition Municipality of Alabel, Sarangani Per Resolution No. 97-08 and
proceedings. In Hacienda Palico alone, CLOA's were issued to 177 Municipal Ordinance No. 97-08, S. of 1997 of the Sangguniang
farmer beneficiaries in 1993. Since then until the present, these Bayan of Alabel. A portion of the area involving 376.5424 hectares,
farmers have been cultivating their lands. It goes against the basic however, was covered by the CARP commercial farms deferment
precepts of justice, fairness and equity to deprive these people, scheme.

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The Zoning Certification issued by the office of the with the Court of Appeals a petition for review raising substantially
Municipal Planning and Development Council (MPDC) showed that the same issues.
respondents properties located at Barangay Maribulan, Alabel were The CA granted the petition and ordred DAR to issue a
among those reclassified from agricultural and pasture land to conversion order. As to the deferred portion, DAR was directed to
residential, commercial institutional, light industrial and open space expedite the processing and evaluation of petitioners application.
in the 1995-2005 land use plan of Alabel.
The respondent then field an application for land use Issue: WON a notice of coverage is an indispensable requirement
conversion of certain parcels of land. Meanwhile, members of for the acquisition of land
the Sarangani Agrarian Reform Beneficiaries Association, Inc.
(SARBAI) sent a letter-petition to the DAR Secretary oppposing the Held: No, Under the circumstances, a notice of coverage is not an
application for land use conversion filed by SACI. SARBAI alleged indispensable requirement before DAR can acquire the subject lots
that its members were merely forced to sign the waiver of rights, or commercial farms, which are covered by a deferment period under
considering that the commercial farm deferment period ended on the Comprehensive Agrarian Reform Law (CARL) or R.A. No 6657
June 15, 1998. Later, the PLUTC agreed to recommend the upon its effectivity on June 15, 1998
disapproval of a portion of a property which was still viable for
agriculture. The conversion was deferred subject to the submission Issue: WON the DAR should use the comprehensive land use plans
of certain requirements. and ordinance of the local sanggunian as primary reference
Later, the DAR Secretary denied SACIs application for land
use conversion. Held: Yes, Section 20 of Republic Act No. 7160, otherwise known
On November 9, 2000, DAR Secretary Horacio R. Morales, Jr. as the Local Government Code of 1991, empowers the local
denied SACIs application for land use conversion. SACI appealed government units to reclassify agricultural lands. Memorandum
to the Office of the President. The Office of the President dismissed Circular No. 54 Prescribing the Guidelines Governing Section 20 of
the appeal and affirmed in toto the challenged DAR Orders. R.A. No. 7160 Otherwise Known as the Local Government Code of
Respondents motion for reconsideration was denied, so they filed 1991 Authorizing Cities and Municipalities to Reclassify

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Agricultural Lands Into Non-Agricultural Uses issued by President highly restricted for conversion under the NIPAS law. Definitely, the
Ramos on June 8, 1993 specified the scope and limitations on the DARs power in such cases may not be exercised in such a manner
power of the cities and municipalities to reclassify agricultural lands as to defeat the very purpose of the LGU concerned in reclassifying
into other uses. It provided that all ordinances authorizing certain areas to achieve social and economic benefits in pursuit of its
reclassification of agricultural lands shall be subject to the review mandate towards the general welfare. Precisely, therefore, the DAR
and approval of the province in the case of component cities or is required to use the comprehensive land use plans and
municipalities, or by the HLURB for highly urbanized or accompanying ordinances of the local Sanggunian as primary
independent component cities in accordance with Executive Order references in evaluating applications for land use conversion filed by
No. 72, Series of 1993. individual landowners. In this case, petitioners have already
Hence, with regard to agricultural lands that have been reclassified complied with the standard requirements laid down under the
for non-agricultural uses by the local government unit concerned, the applicable rules and regulations of the DAR....
CA is correct in declaring that DAR should refer to the The conversion of agricultural lands into non-agricultural
comprehensive land use plans and the ordinances of the Sanggunian uses shall be strictly regulated and may be allowed only when the
in assessing land use conversion applications, thus: conditions prescribed under R.A. No. 6657 are present. In this
Construing Sec. 20 of the Local Government Code and the regard, the Court agrees with the ratiocination of the CA that DARs
subsequent administrative issuances implementing the same, we are scope of authority in assessing land use conversion applications is
of the opinion that while the DAR retains the responsibility for limited to examining whether the requirements prescribed by law and
approving or disapproving applications for land use conversion filed existing rules and regulations have been complied with. This holds
by individual landowners on their landholdings, the exercise of such true in the present case where, because of the creation of the
authority should be confined to compliance with the requirements Province of Sarangani and in view of its thrust to urbanize,
and limitations under existing laws and regulations, such as the particularly its provincial capital which is the Municipality of Alabel,
allowable percentage of agricultural [area] to be reclassified, the local government has reclassified certain portions of its land area
ensuring sufficient food production, areas non-negotiable for from agricultural to non-agricultural. Thus, to reiterate, in
conversion and those falling under environmentally critical areas or accordance with E.O. No. 72, Series of 1993, and subject to the

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limitations prescribed by law, DAR should utilize the comprehensive Moreover, Section 20 of the LGC of 1991 on the
land use plans in evaluating the land use conversion application of reclassification of lands explicitly states that [n]othing in this
respondents whose lands have already been reclassified by the local section shall be construed as repealing, amending or modifying in
government for non-agricultural uses. any manner the provisions of R.A. No. 6657. Thus, where the law
This is not to say, however, that every property of speaks in clear and categorical language, there is no room for
respondents which is included in the comprehensive land use plan of interpretation. There is only room for application.
the Municipality of Alabel shall be automatically granted non-
coverage. As mentioned earlier, said application is subject to the 2. Protest on Coverage
limitations and conditions prescribed by law. One such limitation 2.1 Retention/ Preferred Beneficiaries
that is present here is that a portion of respondents property of
376.5424 hectares, a portion totaling 154.622 [or 154.1622] hectares Alita v CA
which are planted to bananas and coconuts, are covered by CARLs Facts: petition seeking the reversal Court of Appeals decision:
ten-year deferment scheme, which has expired on June 15, 1998. By 1)Declaring Presidential Decree No. 27 napplicable to lands
law, these lands are subject to redistribution to CARP beneficiaries obtained thru the homestead law; 2) Declaring that the 4 registered
upon the lapse of the ten-year period, counted from the date of the co-owners will cultivate and operate the farmholding themselves as
effectivity of the CARL or R.A. No. 6657 on June 15, 1988, which owners; & 3) Ejecting tenants, namely; Gabino Alita, Jesus Julian,
was way before the creation of the Province of Sarangani and the Sr., Jesus Julian, Jr., Pedro Ricalde, Vicente Ricalde and Rolando
eventual reclassification of the agricultural lands into non- Salamar, as the owners would want to cultivate the farmholding
agricultural in the Municipality of Alabel where respondents themselves.
properties are located. -2 parcels of land at Guilinan, Tungawan, Zamboanga del Sur
In short, the creation of the new Province of Sarangani, and acquired by respondents Reyes through homestead patent under
the reclassification that was effected by the Municipality of Alabel Commonwealth Act No. 141
did not operate to supersede the applicable provisions of R.A. No.
6657.

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- Reyes wants to personally cultivate these lands, but Alita refuse to Issue: whether or not lands obtained through homestead patent are
vacate, relying on the provisions of P.D. 27 and P.D. 316 and covered by the Agrarian Reform under P.D. 27.--NO
regulations of MAR/DAR
-June 18, 1981: Respondents Reyes (Plaintiff) instituted a complaint Held: We agree with the petitioners Alita et.al in saying that P.D. 27
against Minister of Agrarian Reform Estrella, Regional Director of decreeing the emancipation of tenants from the bondage of the soil
MAR Region IX P.D. Macarambon, and Alita et.al for the and transferring to them ownership of the land they till is a sweeping
declaration of P.D. 27 and all other Decrees, Letters of Instructions social legislation, a remedial measure promulgated pursuant to the
and General Orders inapplicable to homestead lands. social justice precepts of the Constitution.
Defendants Alita filed their answer with special and affirmative However, such contention cannot be invoked to defeat the purpose of
defenses. the enactment of the Public Land Act or Commonwealth Act No.
-July 19, 1982: Reyes filed urgent motion to enjoin the defendants 141 to protect ones right to life itself by give a needy citizen a land
from declaring the lands in litigation under Operation Land Transfer wherein they could build a house and plant for necessary subsistence.
and from being issued land transfer certificates Art XIII, Sec 6 of the Constitution likewise respects the superiority
-November 5, 1982: Court of Agrarian Relations 16th Regional of the homesteaders' rights over the rights of the tenants guaranteed
District, Branch IV, Pagadian City (Regional Trial Court, 9th by the Agrarian Reform statute.
Judicial Region, Branch XVIII) rendered its decision dismissing Section 6. The State shall apply the principles of agrarian reform or
complaint and the motion to enjoin stewardshipin the disposition or utilization of other natural
-On January 4, 1983, plaintiffs moved to reconsider the Order of resources, including lands of public domain under lease or
dismissal, to which defendants filed their opposition on January 10, concession suitable to agriculture, subject to prior rights, homestead
1983. rights of small settlers, and the rights of indigenous communities to
RTC: issued decision prompting defendants Alita et al to move for their ancestral lands.
reconsideration but was denied Comprehensive Agrarian Reform Law of 1988 or Republic Act No.
CA: the same was sustained 6657 likewise supports the inapplicability of P.D. 27 to lands
covered by homestead patents like those of the property in question,

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Section 6. Retention Limits. ... denied the application for exemption relying on LOI 474 and that the
... Provided further, That original homestead grantees or their direct respondents were bona fide tenants. This was affirmed by Secretary
compulsory heirs who still own the original homestead at the time of Leong who disregarded the 1981 affidavit for having been executed
the approval of this Act shall retain the same areas as long as they under duress because he found that DAEZs son, Adriano, who was
continue to cultivate said homestead.' then the incumbent Vice-Mayor of Meycauayan, pressured private
WHEREFORE, premises considered, the decision of the respondent respondents into signing the same. In 1992, the CA sustained the
Court of Appeals sustaining the decision of the Regional Trial Court decision of the Sec. Leong. Meanwhile, the DAR issued EPs to the
is hereby AFFIRMED. respondents and thereafter, the RD issued the corresponding TCTs.
Having been denied exemption under PD27, DAEZ then applied for
Daez v. CA retention under RA 6657. In 1994, DAR Regional OIC-Director
FACTS: Eudosia Daez (DAEZ), now deceased, owned a 4-ha Eugenio Bernardo allowed DAEZ to retain the subject Riceland but
riceland in Meycauayan, Bulacan which was being cultivated by he denied the application of her eight (8) children to retain three (3)
respondents, Macario Sorient, et. al. under a share-tenancy system. hectares each for their failure to prove actual tillage of the land or
Said land wasplaced under the the OLT of PD27. In 1980, CLTs direct management thereof as required by law. On Appeal, DAR
were issued to the tenant farmers. In 1981, DAEZ applied for Secretary, set aside the Order of Bernardo stating that the 1992 Order
exemption of the said Riceland presenting an affidavit signed by the denying exemption under PD 27, which was affirmed by CA should
respondents where the latter stated that they were not share tenants be implemented. DAEZ appealed to the Office of the President
but hired laborers, and should be exempted from PD 27 due to which ruled in her favor. Said decision was still reversed by the CA
nontenancy. The respondents claim that the affidavit was procured upon appeal by the tenant farmers.
under duress. DAEZ also presented an affidavit in 1983 declaring
ownership over various other properties: (1) 42 hectares of ISSUE: / RULING:
agricultural land, (2) 14 hectares of riceland, (3) 16 hectares of (1) WON the CA properly declared that EXEMPTION from
forestland, (4) 10 hectares of "batuhan," and (5) 1.8 hectares of Agrarian Reform and RETENTION is substantially the same and a
residential lands. In July 1987, DAR Undersecretary Jose C. Medina

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denial of the application of exemption under PD27 will foreclose an application filed by Eudosia Daez for RETENTION despite her
application for retention rights under the CARL. appeal for EXEMPTION of the same land was denied in a decision
NO. EXEMPTION and RETENTION in agrarian reform are two (2) that became final and executory.
distinct concepts. Under PD27, which implemented the Operation
Land Transfer (OLT) Program of tenanted rice or corn lands. If (1) (2) WON the Heirs of DAEZ may exercise their right of retention
the land is not devoted to rice or corn crops; or (2) there is no system over the subject 4-ha Riceland.
of share-crop or lease-tenancy, a landowner may apply for YES. The right of retention is a constitutionally guaranteed right,
exemption as the land is not covered under OLT. PD27 also allows a which is subject to qualification by the legislature. A retained area,
landowner to retain 7 hectares of his land if his aggregate as its name denotes, is land which is not supposed to anymore leave
landholdings do not exceed 24 hectares. Also, LOI No. 474 clarified the landowners dominion, thus sparing the government from the
the effective coverage of OLT to include tenanted rice or corn lands inconvenience of taking land only to return it to the landowner
of seven (7) hectares or less, Thus, on one hand, EXEMPTION from afterwards, which would be a pointless process. In the landmark case
coverage of OLT lies if: (1) the land is not devoted to rice or corn of Association of Small Landowners in the Phil., Inc. v. Secretary of
crops even if it is tenanted; or (2) the land is untenanted even though Agrarian Reform, we held that landowners who have not yet
it is devoted to rice or corn crops. On the other hand, EXERCISE OF exercised their retention rights under P.D. No. 27 are entitled to the
RETENTION RIGHTS requires the following: (1) the land must be new retention rights under R.A. No. 6657. However, if a landowner
devoted to rice or corn crops; (2) there must be a system of share- filed his application for retention after August 27, 1985 but he had
crop or lease-tenancy obtaining therein; and (3) the size of the previously filed the sworn statements required by LOI Nos. 41, 45
landholding must not exceed twenty-four (24) hectares, or it could be and 52, he is still entitled to the retention limit of seven (7) hectares
more than twenty-four (24) hectares provided that at least seven (7) under P.D. No.27. Otherwise, he is only entitled to retain five (5)
hectares thereof are covered lands and more than seven (7) hectares hectares under R.A. No. 6657. Sec. 6 of R.A. No. 6657, defines the
of it consist of "other agricultural lands". Being distinct remedies, nature and incidents of a landowners right of retention. For as long
finality of judgment in one does not preclude the subsequent as the area to be retained is compact or contiguous and it does not
institution of the other. There was no procedural impediment to the exceed the retention ceiling of five (5) hectares, a landowners

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choice of the area to be retained, must prevail. Moreover, case, the CLTs of private respondents over the subject 4.1685-
Administrative Order No. 4, series of 1991, which supplies the hectare riceland were issued without Eudosia Daez having been
details for the exercise of a landowners retention rights, likewise accorded her right of choice as to what to retain among her
recognizes no limit to the prerogative of the landowner, although he landholdings. The transfer certificates of title thus issued on the basis
is persuaded to retain other lands instead to avoid dislocation of of those CLTs cannot operate to defeat the right of the heirs of
farmers. This right of retention may be exercised over tenanted land deceased Eudosia Daez to retain the said 4.1685 hectares of riceland.
despite even the issuance of Certificate of Land Transfer (CLT) to
farmer-beneficiaries. What must be protected, however, is the right Santiago v Ortiz-Luis
of the tenants to opt to either stay on the land chosen to be retained FACTS: Spouses Juan and Amada Ortiz Luis (SPOUSES) owned
by the landowner or be a beneficiary in another agricultural land with 7.1 hectares of tenanted rice lands in Nueva Ecija. Despite inclusion
similar or comparable features. Finally. Land awards made pursuant of the property under the OLT, the SPOUSES transferred the
to the governments agrarian reform program are subject to the property via a Deed of Absolute Sale to their children Rosario,
exercise by a landowner, who is so qualified, of his right of retention. Teresita, Simplicio and Antonio. The children were able to secure a
Under P.D. No. 27, beneficiaries are issued CLTs to entitle them to TCT issued under their names. The children later filed an
possess lands. Thereafter, they are issued Emancipation Patents Application for Retention under P.D. No. 27 before the Department
(EPs) after compliance with all necessary conditions. Such EPs, upon of Agrarian Reform Regional Office (DARRO) but were denied on
their presentation to the Register of Deeds, result in the issuance of the ground that the transfer was made after October 21, 1972 which
the corresponding transfer certificates of title (TCT) in favor of the is a clear violation of agrarian laws, rules and regulations.
beneficiaries mentioned therein[30]. Under R.A. No. 6657, the Separately, Amada applied for retention. Provincial Agrarian Reform
procedure has been simplified[31]. Only Certificates of Land Officer (PARO) Rogelio M. Chavez recommended the denial of
Ownership Award (CLOAs) are issued, in lieu of EPs, after Amadas application upon the ground that an owner of tenanted rice
compliance with all prerequisites. Thereafter, upon presentation of and corn lands may not retain those lands if he, as of October 21,
the CLOAs to the Register of Deeds, TCTs are issued to the 1972, owned more than 24 hectares of tenanted rice or corn lands. It
designated beneficiaries. CLTs are no longer issued. In the instant appears that Spouses Ortiz Luis owned 178.8 hectares, only 88.5 of

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which were placed under OLT. In 2000, Amadas application for right to choose the area to be retained, which shall be compact or
retention was granted. The PARO held that her failure to exercise her contiguous, shall pertain to the landowner. Provided, however, That
retention rights under PD 27 entitled her to the benefit of retention in case the area selected for retention by the landowner is tenanted,
under RA 6657. This was contested by the farmer-beneficiaries who the tenant shall have the option to choose whether to remain therein
received emancipation patents over portions of the property, namely or be a beneficiary in the same or another agricultural land with
Santiago and Gutierrez. Upon appeal with the DAR, Secretary similar or comparable features.xxx Section 6 implies that the sole
Pagdanganan upheld the decision of PARO holding that Amada was requirement in the exercise of retention rights is that the area chosen
entitled to retention. His successor, Sec. Pangadaman however by the landowner must be compact or contiguous. In the recent case
reversed relying on LOI 474 stating that having established that the of Heirs of Aurelio Reyes v. Garilao, however, the Court held that a
landowners own other agricultural lands 7 hectares, they are not landowners retention rights under R.A. 6657 are restricted by the
entitled to retention under PD 27. On appeal to the Office of the conditions set forth in Letter of Instruction (LOI) No. which
President (OP), the Order of PAGDANGANAN was upheld granting provided the following restrictions to the Secretary of Agrarian
Amada retention rights. This decision was upheld by the CA, with Reform: "1. You shall undertake to place under the Land Transfer
the clarification that the farmer-beneficiaries should still be accorded Program of the government pursuant to Presidential Decree No. 27,
their rights under RA 6657 Section 6 and DAR Admin Order No. 05- all tenanted rice/corn lands with areas of seven hectares or less
00. belonging to landowners who own other agricultural lands of more
ISSUE: WON Amada is entitled to retention rights than seven hectares in aggregate areas or lands used for residential,
commercial, industrial or other urban purposes from which they
HELD: NO. SEC. PANGADAMANS ORDER IS REINSTATED. derive adequate income to support themselves and their families.
RATIO The legislative standards are set forth in Section 6 of R.A. (underscoring supplied) DAR Memorandum Circular No. 11, Series
6657, thus: Section 6. Retention Limits. Except as otherwise of 1978[18] provided for the implementing guidelines of LOI No.
provided in this Act, no person may own, or retain, directly or 474: Tenanted rice/corn lands with areas of seven hectares or less
indirectly, any public or private agricultural land, xxx but in no case shall be covered by Operation Land Transfer if those lands belong to
shall retention by the landowner exceed five (5) hectares.xxx The the following landowners: a.) Landowners who own other

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agricultural lands of more than seven hectares in aggregate areas, 2.2 Exemption/ Exclusion
whether tenanted or not, cultivated or not, and regardless of the
income derived therefrom; b.) Landowners who own lands used for DOJ OPINION NO. 044, s. 1990
residential, commercial, industrial or other urban purposes from March 16, 1990
which they derive an annual gross income of at least five thousand
(P5,000.00) pesos. (underscoring supplied) In Association of Small Secretary Florencio Abad
Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, Department of Agrarian Reform
the Court held that landowners who have not yet exercised their Diliman, Quezon City
retention rights under P.D. No. 27 are entitled to new retention
rights provided for by R.A. No. 6657 . . . In Heirs of Aurelio Reyes Sir:
v. Garilao, however, the Court held that the limitations under LOI This refers to your letter of the 13th instant stating your
No. 474 still apply to a landowner who filed an application under "position that prior to the passage of R.A. 6657, the Department of
R.A. 6657. Letter of Instruction (LOI) No. 474 amended P.D. No. 27 Agrarian Reform had the authority to classify and declare which
by removing any right of retention from persons who own other agricultural lands are suitable for non-agricultural purposes, and to
agricultural lands of more than 7 hectares, or lands used for approve or disapprove applications for conversion from agricultural
residential, commercial, industrial or other purpose from which they to non-agricultural uses."
derive adequate income to support themselves and their families. In support of the foregoing view, you contend that under R.A.
Section 9 (d) of DAR Administrative Order No. 05, on which the No. 3844, as amended, the Department of Agrarian Reform (DAR) is
Court of Appeals in part anchored its ruling, is inconsistent with P.D. empowered to "determine and declare an agricultural land to be
No. 27, as amended by LOI No. 474, insofar as it removed the suited for residential, commercial, industrial or some other urban
limitations to a landowners retention rights. purpose" and to "convert agricultural land from agricultural to non-
agricultural purposes"; that P.D. No. 583, as amended by P.D. No.
815 "affirms that the conversion of agricultural lands shall be
allowed only upon previous authorization of the [DAR]; with respect

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to tenanted rice and corn lands"; that a Memorandum of Agreement authority of DAR to authorize such conversion existed even prior to
dated May 13, 1977 between the DAR, the Department of Local June 15, 1988 or as early as 1963 under the Agricultural Land
Government and Community Development and the then Human Reform Code (R.A. No. 3844; as amended).
Settlements Commission "further affirms the authority of the [DAR] It should be made clear at the outset that the aforementioned
to allow or disallow conversion of agricultural lands"; that E.O. No. study of this Department was based on facts and issues arising from
129-A expressly invests the DAR with exclusive authority to the implementation of the Comprehensive Agrarian Reform Program
approve or disapprove conversion of agricultural lands for (CARP). While there is no specific and express authority given to
residential, commercial, industrial and other land uses'; and that DAR in the CARP law to approve or disapprove conversion of
while in the final version of House Bill 400, Section 9 thereof agricultural lands to non- agricultural uses, because Section 65 only
provided that lands devoted to "residential, housing, commercial and refers to conversions effected after five years from date of the award,
industrial sites classified as such by the municipal and city we opined that the authority of the DAR to approve or disapprove
development councils as already approved by the Housing and Land conversions of agricultural lands to non-agricultural uses applies
Use Regulatory Board, in their respective zoning development plans" only to conversions made on or after June 15, 1988, the date of
be exempted from the coverage of the Agrarian Reform program, effectivity of R.A. No. 6657, solely on the basis of our interpretation
this clause was deleted from Section 10 of the final version of the of DAR's mandate and the comprehensive coverage of the land
consolidated bill stating the exemptions from the coverage of the reform program. Thus, we said:
Comprehensive Agrarian Reform Program. "Being vested with exclusive original jurisdiction over all matters
We take it that your query has been prompted by the study involving the implementation of agrarian reform, it is believed to be
previously made by this Department for Executive Secretary the agrarian reform law's intention that any conversion of a private
Catalino Macaraig Jr. and Secretary Vicente Jayme (Memorandum agricultural land to non- agricultural uses should be cleared
dated February 14, 1990) which upheld the authority of the DAR to beforehand by the DAR. True, the DAR's express power over land
authorize conversions of agricultural lands to non-agricultural uses use conversion is limited to cases in which agricultural lands already
as of June 15, 1988, the date of effectivity of the Comprehensive awarded have, after five years, ceased to be economically feasible
Agrarian Reform Law (R.A. No. 6657). it is your position that the and sound for agricultural purposes, or the locality has become

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urbanized and the land will have a greater economic value for specifically those planted to rice and/or corn, to other agricultural or
residential, commercial or industrial purposes. But to suggest that to non-agricultural uses, "subject to studies on zoning of the Human
these are the only instances when the DAR can require conversion Settlements Commissions" (HSC). This non-exclusive authority of
clearances would open a loophole in the R.A. No. 6657, which every the DAR under the aforesaid laws was, as you have correctly pointed
landowner may use to evade compliance with the agrarian reform out, recognized and reaffirmed by other concerned agencies, such as
program. Hence, it should logically follow from the said the Department of Local Government and Community Development
department's express duty and function to execute and enforce the (DLGCD) and the then Human Settlements Commission (HSC) in a
said statute that any reclassification of a private land as a residential, Memorandum of Agreement executed by the DAR and these two
commercial or industrial property should first be cleared by the agencies on May 13, 1977, which is an admission that with respect to
DAR." land use planning and conversions, the authority is not exclusive to
It is conceded that under the laws in force prior to the enactment any particular agency but is a coordinated effort of all concerned
and effective date of R.A. No. 6657, the DAR had likewise the agencies.
authority, to authorize conversions of agricultural lands to other uses, It is significant to mention that in 1978, the then Ministry of
but always in coordination with other concerned agencies. Under Human Settlements was granted authority to review and ratify land
R.A. No. 3344, as amended by R.A. No. 6389, an agricultural lessee use plans and zoning ordinance of local governments and to approve
may, by order of the court, be dispossessed of his landholding if after development proposals which include land use conversions (see LOI
due hearing, it is shown that the "landholding is declared by the No. 729 [1978]). This was followed by P.D. No. 648 (1981) which
[DAR] upon the recommendation of the National Planning conferred upon the Human Settlements Regulatory Commission (the
Commission to be suited for residential, commercial, industrial or predecessors of the Housing and Land Use Regulatory Board
some other urban purposes." [HLURB] the authority to promulgate zoning and other land use
Likewise, under various Presidential Decrees (P.D. Nos. 583, control standards and guidelines which shall govern land use plans
815 and 946) which were issued to give teeth to the implementation and zoning ordinances of local governments, subdivision or estate
of the agrarian reform program decreed in P.D. No. 27, the DAR was development projects of both the public and private sector and urban
empowered to authorize conversions of tenanted agricultural lands, renewal plans, programs and projects; as well as to review, evaluate

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and approve or disapprove comprehensive land use development Anent the observation regarding the alleged deletion of
plans and zoning components of civil works and infrastructure residential, housing, commercial and industrial sites classified by the
projects, of national, regional and local governments, subdivisions, HLURB in the final version of the CARP bill, we fail to see how this
condominiums or estate development projects including industrial circumstances could substantiate your position that DAR's authority
estates. to reclassify or approve conversions of agricultural lands to non-
P.D. No. 583, as amended by P.D. No. 815, and the 1977 agricultural uses already existed prior to June 15, 1988. Surely, it is
Memorandum of Agreement, abovementioned, cannot therefore, be clear that the alleged deletion was necessary to avoid a redundancy
construed as sources of authority of the DAR; these issuances merely in the CARP law whose coverage is expressly limited to "all public
affirmed whatever power DAR had at the time of their adoption. and private agricultural lands" and "other lands of the public domain
With respect to your observation that E.O. No. 129-A also suitable for agriculture" (Sec. 4, R.A. No. 6657). Section 3(c) of
empowered the DAR to approve or disapprove conversions of R.A. No. 6657 defines "agricultural land" as that "devoted to
agricultural lands into non-agricultural uses as of July 22, 1987, it is agricultural activity as defined in the Act and not classified as
our view that E.O. No. 129-A likewise did not provide a new source mineral forest, residential, commercial or industrial land."
of power of DAR with respect to conversion but it merely recognized Based on the foregoing premises, we reiterate the view that with
and reaffirmed the existence of such power as granted under existing respect to conversions of agricultural lands covered by R.A. No.
laws. This is clearly inferrable from the following provision of E.O. 6657 to non-agricultural uses, the authority of DAR to approve such
No. 129-A to wit: conversions may be exercised from the date of the law's effectivity
"Sec. 5. Powers and Functions. Pursuant to the mandate of the on June 15, 1988. This conclusion is based on a liberal interpretation
Department, and in order to ensure the successful implementation of of R.A. No. 6657 in the light of DAR's mandate and the extensive
the Comprehensive Agrarian Reform Program, the Department is coverage of the agrarian reform program.
hereby authorized to:
1) Have exclusive authority to approve or disapprove conversion Very truly yours,
of agricultural lands for residential, commercial, industrial and other FRANKLIN M. DRILON
land uses as may be provided by law" (Emphasis supplied.) Secretary

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Natalia v DAR and EDIC before the DAR Regional Adjudicator to restrain
FACTS: petitioners from developing areas under cultivation by
Petitioner Natalia is the owner of three contiguous parcels of SAMBA members.
land located in Banaba, Antipolo, Rizal. DAR Regional ruled by temporarily restraining petitioners
On 18 April 1979, Presidential Proclamation No. 1637 set from further developing the subdivision.
aside 20,312 hectares of land located in the Municipalities of Petitioners elevated their cause to DARAB but the latter
Antipolo, San Mateo and Montalban as townsite areas to merely remanded the case to the Regional Adjudicator for
absorb the population overspill in the metropolis which were further proceedings
designated as the Lungsod Silangan Townsite. The Natalia Natalia wrote respondent Secretary of Agrarian Reform
properties are situated within the areas proclaimed as reiterating its request to set aside the Notice of Coverage.
townsite reservation. Neither respondent Secretary nor respondent Director took
EDIC, developer of Natalia, applied for and was granted action on the protest-letters.
preliminary approval and locational clearances by the Hence, this petition.
Human Settlements Regulatory Commission. Petitioners Natalias contention: Subject properties already ceased to be
were likewise issued development permits after complying agricultural lands when they were included in the areas
with the requirements. Thus the Natalia properties later reserved by presidential fiat for townsite reservation.
became the Antipolo Hills Subdivision. OSGs contention: The permits granted petitioners were not
On 15 June 1988, CARL was enacted. valid and binding because they did not comply with the
DAR, through MARO, issued a Notice of Coverage on the implementing Standards, Rules and Regulations of P.D. 957,
undeveloped portions of the Antipolo Hills Subdivision otherwise known as "The Subdivision and Condominium
which consisted of roughly 90.3307 hectares. Buyers' Protective Decree," in that no application for
Natalia and EDIC protested to this. conversion of the NATALIA lands from agricultural to
Members of the Samahan ng Magsasaka sa Bundok residential was ever filed with the DAR. In other words,
Antipolo, Inc. (SAMBA), filed a complaint against Natalia there was no valid conversion.

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DAR vs Delia Sutton


FACTS:
ISSUE: Whether or not the subject properties shall be included in The case at bar involves a land in Aroroy, Masbate, inherited
the coverage of CARP by respondents which has been devoted exclusively to cow
and calf breeding. On October 26, 1987, pursuant to the
HELD: then existing agrarian reform program of the government,
NO. respondents made a voluntary offer to sell (VOS) their
Section 4 of R.A. 6657 provides that the CARL shall "cover, landholdings to petitioner DAR to avail of certain incentives
regardless of tenurial arrangement and commodity produced, under the law.
all public and private agricultural lands." As to what On June 10, 1988, CARL took effect.
constitutes "agricultural land," it is referred to as "land In view of the Luz Farms ruling, respondents filed with
devoted to agricultural activity as defined in this Act and not petitioner DAR a formal request to withdraw their VOS as
classified as mineral, forest, residential, commercial or their landholding was devoted exclusively to cattle-raising
industrial land. The deliberations of the Constitutional and thus exempted from the coverage of the CARL.
Commission confirm this limitation. "Agricultural lands" are MARO inspected respondents land and found that it was
only those lands which are "arable and suitable agricultural devoted solely to cattle-raising and breeding. He
lands" and "do not include commercial, industrial and recommended to the DAR Secretary that it be exempted
residential lands." from the coverage of the CARL.
Based on the foregoing, it is clear that the undeveloped DAR ignored their request
portions of the Antipolo Hills Subdivision cannot in any DAR issued A.O. No. 9, series of 1993, which provided that
language be considered as "agricultural lands." These lots only portions of private agricultural lands used for the
were intended for residential use. They ceased to be raising of livestock, poultry and swine as of June 15, 1988
agricultural lands upon approval of their inclusion in the shall be excluded from the coverage of the CARL. In
Lungsod Silangan Reservation.

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determining the area of land to be excluded, the A.O. fixed of agrarian reform and prescribing a maximum retention
the following retention limits, viz: 1:1 animal-land ratio. limit for their ownership. However, the deliberations of the
DAR Secretary Garilao issued an Order partially granting 1987 Constitutional Commission show a clear intent to
the application of respondents for exemption from the exclude, inter alia, all lands exclusively devoted to livestock,
coverage of CARL. Respondents moved for swine and poultry- raising.
reconsideration. They contend that their entire landholding
should be exempted as it is devoted exclusively to cattle- Milestone Farms vs Office of the President
raising. Their motion was denied. FACTS:
Office of the President affirmed the order of DAR Among the pertinent secondary purposes of Milestone Farms
On appeal, the Court of Appeals ruled in favor of the are 1) to engage in the raising of cattle, pigs, and other
respondents. It declared DAR A.O. No. 9, s. 1993, void for livestock; 2) to breed, raise, and sell poultry; and 3) to
being contrary to the intent of the 1987 Constitutional import cattle, pigs, and other livestock, and animal food
Commission to exclude livestock farms from the land reform necessary for the raising of said cattle, pigs, and other
program of the government. livestock
On June 10, 1988, CARL took effect
ISSUE: Whether or not DAR A.O. No. 9, series of 1993, which In May 1993, petitioner applied for the exemption/exclusion
prescribes a maximum retention limit for owners of lands devoted to of its 316.0422-hectare property pursuant to the
livestock raising is constitutional. aforementioned ruling of this Court in Luz Farms.
Meanwhile, on December 27, 1993, DAR issued AO No. 9,
HELD: Series of 1993, setting forth rules and regulations to govern
Assailed AO is unconstitutional. the exclusion of agricultural lands used for livestock,
In the case at bar, we find that the impugned A.O. is invalid poultry, and swine raising from CARP coverage.
as it contravenes the Constitution. The A.O. sought to Milestone re-documented its application pursuant to said
regulate livestock farms by including them in the coverage AO.

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DARs Land Use Conversion and Exemption Committee CA primarily ruled in favor of Milestone in exempting the
(LUCEC) conducted an ocular inspection on petitioners entire property from the coverage of CARP. However, six
property and recommended the exemption of petitioners months earlier, without the knowledge of the CA as the
316.0422-hectare property from the coverage of CARP. parties did not inform the appellate court then DAR
DAR Regional Director Dalugdug adopted LUCECs Secretary Villa issued DAR conversion order granting
recommendation petitioners application to convert portions of the 316.0422-
The Pinugay Farmers, represented by Balajadia, moved for hectare property from agricultural to residential and golf
the reconsideration of the said Order, but the same was courses use. The portions converted was with a total area of
denied by Director Dalugdug. Hence, they filed an appeal 153.3049 hectares. With this Conversion Order, the area of
with DAR Secretary the property subject of the controversy was effectively
Subsequently, Milestone filed a complaint for Forcible Entry reduced to 162.7373 hectares.
against Balajadia and company before the MCTC. With the CA now made aware of these developments,
MCTC ruled in favor of Milestone particularly Secretary Villas Conversion Order, CA had to
RTC reversed the decision of MCTC acknowledge that the property subject of the controversy
CA ruled in favor of Milestone would now be limited to the remaining 162.7373 hectares.
DAR Secretary Garilao issued an Order exempting from CA, in its amended decision, states that the subject
CARP only 240.9776 hectares of the 316.0422 hectares landholding from the coverage of CARP is hereby lifted, and
previously exempted by Director Dalugdug, and declaring the 162.7373 hectare-agricultural portion thereof is hereby
75.0646 hectares of the property to be covered by CARP. declared covered by the CARP.
Office of the President primarily reinstated the decision of
Director Dalugdug but when the farmers filed a motion for ISSUE: Whether or not Milestones property should be exempted
reconsideration, Office of the President reinstated the from the coverage of CARP
decision of Director Garilao.

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HELD: respondent DECS, stating that the subject lands are now covered by
No. CARP DAR Regional Director approved MAROs recommendation
When CA made its decision, DAR AO No. 9 was not yet DECS appealed the case to the Secretary of Agrarian Reform which
declared unconstitutional by the Supreme Court. Thus, it affirmed the Order of the Regional Director.
could not be said that the CA erred or gravely abused its DECS contention: Respondent DECS sought exemption from
discretion in respecting the mandate of DAR A.O. No. 9, CARP coverage on the ground that all the income derived from its
which was then subsisting and in full force and effect. contract of lease with Anglo Agricultural Corporation were actually,
As correctly held by respondent OP, the CA correctly held directly and exclusively used for educational purposes, such as for
that the subject property is not exempt from the coverage of the repairs and renovations of schools in the nearby locality.
the CARP, as substantial pieces of evidence show that the DARs contention: Petitioner DAR, on the other hand, argued that
said property is not exclusively devoted to livestock, swine, the lands subject hereof are not exempt from the CARP coverage
and/or poultry raising. because the same are not actually, directly and exclusively used as
school sites or campuses, as they are in fact leased to Anglo
DAR vs DECS Agricultural Corporation. Further, to be exempt from the coverage, it
Facts: In controversy are 2 lots consisting of an aggregate area of is the land per se, not the income derived therefrom, that must be
189.2462 hectares located at Hacienda Fe, Escalante, Negros actually, directly and exclusively used for educational purposes.
Occidental and Brgy. Gen. Luna, Sagay, Negros Occidental.
These lands were donated by the late Esteban Jalandoni to Issue: Whether or not the subject properties are exempt from the
respondent DECS. Consequently, titles thereto were transferred in coverage of CARP
the name of respondent DECS DECS leased the lands to Anglo
Agricultural Corporation Eugenio Alpar and several others, claiming Held: No. The general policy under CARL is to cover as much lands
to be permanent and regular farm workers of the subject lands, filed suitable for agriculture as possible. Section 4 of R.A. No. 6657 sets
a petition for Compulsory Agrarian Reform Program (CARP) out the coverage of CARP. It states that the program shall cover,
coverage with MARO MARO sent a Notice of Coverage to regardless of tenurial arrangement and commodity produced, all

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public and private agricultural lands xxx including other lands of the ambiguity, it must be given its literal meaning and applied without
public domain suitable for agriculture. The records of the case show attempted interpretation.
that the subject properties were formerly private agricultural lands
owned by the late Esteban Jalandoni, and were donated to respondent Republic Rep. by the DAR vs. CA and Green City
DECS. From that time until they were leased to Anglo Agricultural Facts:
Corporation, the lands continued to be agricultural primarily planted The five (5) parcels of land in issue with a combined area of
to sugarcane, albeit part of the public domain being owned by an 112.0577 hectares situated at Barangay Punta, Municipality of Jala-
agency of the government.[12] Moreover, there is no legislative or Jala, Province of Rizal were acquired by private respondent through
presidential act, before and after the enactment of R.A. No. 6657, purchase on May 26, 1994 from Marcela Borja vda. de Torres. The
classifying the said lands as mineral, forest, residential, commercial tax declarations classified the properties as agricultural. On June 16,
or industrial land. Indubitably, the subject lands fall under the 1994, petitioner DAR issued a Notice of Coverage of the subject
classification of lands of the public domain devoted to or suitable for parcels of land under compulsory acquisition pursuant to Section 7,
agriculture. Clearly, a reading of par c, Sec 10 of CARL shows that, Chapter II of R.A. No. 6657 or the Comprehensive Land Reform
in order to be exempt from the coverage: 1) the land must be Law of 1988 (CARL). Private respondent filed with the DAR
actually, directly, and exclusively used and found to be necessary; Regional Office an application for exemption of the land from
and 2) the purpose is for school sites and campuses, including agrarian reform pursuant to DAR Administrative Order No. 6, series
experimental farm stations operated by public or private schools for of 1994 and DOJ Opinion No. 44, series of 1990. The DAR Regional
educational purposes. The importance of the phrase actually, Director recommended a denial of the said petition on the ground
directly, and exclusively used and found to be necessary cannot be that private respondent "ailed to substantiate their (sic) allegation that
understated, as what respondent DECS would want us to do by not the properties are indeed in the Municipality's residential and forest
taking the words in their literal and technical definitions. The words conservation zone and that portions of the properties are not irrigated
of the law are clear and unambiguous. Thus, the plain meaning nor irrigable".
rule or verba legis in statutory construction is applicable in this Private respondent filed an Amended Petition for
case. Where the words of a statute are clear, plain and free from Exemption/Exclusion from CARP coverage, this time alleging that

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the property is within the residential and forest conservation zones agricultural. In essence, the report of the commission showed that the
and offering a portion of about 15 hectares of land (irrigated land of private respondent consists of a mountainous area with an
riceland) to sell to farmer beneficiaries or to DAR. On October 19, average 28 degree slope containing 66.5 hectares; a level, unirrigated
1995, the DAR Secretary issued an Order denying the application for area of 34 hectares of which 5 to 6 hectares are planted to palay; and
exemption. Private respondent moved for reconsideration but the a residential area of 8 hectares. The finding that 66.5 hectares of the
same was likewise denied. Appeal was made to the Court of 112.0577 hectares of land of private respondent have an average
Appeals. The latter in turn created a commission to conduct ocular slope of 28 degrees provides another cogent reason to exempt these
inspection and survey. DAR likewise constituted its own team to portions of the properties from the CARL. Section 10 of the CARL is
conduct an inspection and thereafter objected to the report filed by clear on this point when it provides that "all lands with eighteen
the commission. percent (18%) slope and over, except those already developed shall
On December 9, 1998, the Court of Appeals issued its be exempt from the coverage of this Act."
Decision reversing the Assailed DAR Orders and declaring the The crux of the controversy is whether the subject parcels of
mountainous and residential portions of the petitioner's land to be land in issue are exempt from the coverage of the CARL. Petitioner
exempt from the Comprehensive Agrarian Reform Program (CARP). DAR did not object to the creation of a team of commissioners when
Hence, this petition for review. it very well knew that the survey and ocular inspection would
eventually involve the determination of the slope of the subject
Issue: Whether or not the landholdings subject of this controversy parcels of land. It is the protestation of petitioner that comes at a
are exempt from CARL coverage. belated hour. In the absence of any irregularity in the survey and
Law: Comprehensive Agrarian Reform Law of 1988 [Republic Act inspection of the subject properties, and none is alleged, the report of
No. 6657] the commissioners deserves full faith and credit and we find no
reversible error in the reliance by the appellate court upon said
Held: report.
The commissioner's report on the actual condition of the Opinion: The determination of the classification and physical
properties confirms the fact that the properties are not wholly condition of the lands was significantly material in the disposition of

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this case. This was mainly the reason why the Court of Appeals CA: set aside order of RTC (without however disposing of the issues
constituted the commission to inspect and survey said properties. raised. The SC said that the CA assumed that the resolution is valid
Agreeing on the words of the SC, the report of the commissioners and the expropriation is for a public use).
indeed deserves full faith and credit as they were the ones tasked to
do such and in property law, there must always be a presumption of Issues:
good faith. 1) WON the resolution is null and void. Corollary to this issue is
WON the expropriation is for a public use.
Province of Camarines Sur vs CA 2) WON the exercise of the power of eminent domain in this case is
FACTS: Sangguniang Panlalawigan (SP) of Cam Sur passed Res. restricted by the CAR Law?
129 authorizing the Prov. Gov. To purchase/expropriate property to 3) WON the complaint for expropriation may be dismissed on the
establish a pilot farm for non-food and non-agricultural crops and ground of inadequacy of the compensation offered?
housing project for the government employees. By virtue of the
resolution, Cam Sur filed 2 cases for expropriation against private Held/ratio:
respondents (San Joaquins). 1) The expropriation is for a public purpose, hence the
RTC: denied motion to dismiss on the ground of inadequacy of price resolution is authorized and valid.
of San Joaquins. SC explained that there had been a shift from the old to the new
CA: San Joaquins raised issue of a) declaring the resolution null and concept of public purpose:. Old concept is that the property must
void, b) complaint for expropriation de dismissed. CA asked Sol Gen actually be used by the general public. The new concept, on the other
to give comment. hand, means public advantage, convenience or benefit, which tends
SolGen: under the LGC, no need for approval by the OP of the to contribute to the general welfare and the prosperity of the whole
exercise of the SP of the right to eminent domin. However, approval community.
of DAR must first be secured (since this involves appropriation of In this case, the proposed pilot development center would inure to
agricultural lands). the direct benefit and advantage of the CamSur peeps. (How?)

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invaluable info and tech on agriculture, fishery, and cottage industry, It is unconstitutional to fix just compensation in expropriation cases
enhance livelihood of farmers and fishermen, etc. based on the value given either by the owners or the assessor. Rules
for determining just compensation are those laid down in Rule 67
2) No, (citing Ardana vs Reyes, SC here said that the ROC, evidence must be submitted to justify what they consider is the
implication of the Ardana case is that) the power of just compensation.
expropriation is superior to the power to distribute lands
under the land reform program. Pag-asa v Jimenez

Old LGC does not intimate in the least that LGUs must first secure The Facts
approval of the Dept of Land Reform for conversion of agri to non-
agri use. Likewise, no provision in the CAR Law subjecting Petitioner PAG-ASA Fishpond Corporation is the owner of a
expropriation by LGUs to the control of DAR. 95.6123-hectare fishpond and saltbed situated at
Moreover, Sec 65 of CAR Law is not in point because it is the Municipality of Masinloc, Province of Zambales. It is covered by
applicable only to lands previously placed under the agrarian reform Transfer Certificate of Title (TCT) No. T-1747 issued by the
program. This is limited only to applications for reclassification Register of Deeds of Zambales. On May 1, 1989, petitioner leased
submitted by land owners or tenant beneficiaries. the subject fishpond to David Jimenez and Noel Hilario. The lease
Statutes conferring power of eminent domain to political agreement, in full, provides:
subdivisions cannot be broadened or constricted by implication.
CONTRACT OF LEASE
3) Fears of private respondents that they will be paid on the
basis of the valuation decalred in the tax declarations of their KNOW ALL MEN BY THESE PRESENT:
property, are unfounded.
This Contract of Lease made and entered into this 27th day of April,
1989 by and between:

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WHEREAS, the Lessor is the registered and absolute owner of a


PAG-ASA FISHPOND CORPORATION, a corporation duly Real Property, more particularly described as follows, to wit:
organized and existing in accordance with the laws of the
Philippines, with principal office and business address at 465 A. CERTIFICATE TITLE NO. T-1747
Flores St., Ermita, Manila, herein represented by its President, Mr. REGISTER OF DEEDS
SEGUNDO SEANGIO, of legal age, married, Filipino and with PROVINCE OF ZAMBALES
postal address at 465 A. Flores St.,Ermita, Manila, herein known as
the LESSOR; A PARCEL OF LAND CONTAINING AN AREA OF NINETY-
FIVE HECTARES, SIXTY-ONE ACRES AND TWENTY-THREE
-AND- CENTARES SITUATED IN THE BARRIO OF STO. ROSARIO,
MASINLOC, ZAMBALES.
DAVID JIMENEZ, of legal age, married to Pascuala Ramos
Jimenez, Filipino and residing at 1173 Paco, Obando, Bulacan and WHEREAS, the Lessor has granted and the Lessees have accepted a
Noel Hilario, of legal age, married to TeresitaSantiago Hilario, lease of the above-described property under the terms and conditions
Filipino and residence of Lawa, Obando, Bulacan, herein known as hereinafter provided;
the LESSEES.
NOW, THEREFORE, for and in consideration of the above premises
and in consideration of the terms and conditions hereinafter specified
the parties herein do hereby agree and stipulate as follows:

1. The terms of this lease shall be five (5) years effective May 1,
WITNESSETH 1989 and shall terminate on May 1, 1994 and is not renewable after
said term unless renewed in writing by both parties;

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2. The Lessees have agreed to lease five (5) lots of fishponds, one
nursery pond, all the 331 saltbeds and the Paalatan located within 6. The Lessees shall pay to the Lessor the yearly advance rental in
the described property under Certificate Titles No. T-1747; Philippine Currency at the office of the Lessor which shall be due
and payable on or before the 1st of March of every year for five (5)
3. The lease does not include the bodega located within the leased years without the necessity of express demand, therefore it being
premises which is to be used exclusively by the Lessor unless with understood that in case of default of said Lessees in the payment of
written approval of the Lessor, the Lessee may share in the use of the the said rental if and when the same becomes due and payable, the
bodega; amount of rental owing shall bear interest at the rate of twenty-four
percent (24%) per annum, to be computed daily from the date of
4. The Leessees shall make a deposit of ONE HUNDRED such default until fully paid, payment of such interest to be
THOUSAND PESOS (P100,000.00) Philippine Currency upon considered as a penalty by reason of such default, without prejudice
signing of this Contract of Lease. Said deposit is without interest and to the right of the owner to terminate this Contract and eject the
shall answer for any unpaid rental of the Lessees at the termination Lessees, as hereinafter set forth;
of this lease, penalties or any liabilities which may incur during the
effectivity of this Contract. The Lessees cannot apply the aforesaid That the Schedule of Payment of the annual lease cash payment of
deposit as rental payment before the cancellation, termination or rentals are as follows:
expiration of this agreement;
a) May 1, 1989 or upon signing of this Contract of Lease:
5. The Lessees shall pay to the Lessor immediately upon signing of P350,000.00 rental for May 1, 1989 to May 1, 1990
this Contract the amount of THREE HUNDRED FIFTY
THOUSAND PESOS (P350,000.00), Philippine Currency as rental b) March 1, 1990 P400,000.00 rental for May 1, 1990 to May 1,
for the year May 1, 1989 to May 1, 1990. This payment is not 1991;
refundable and will be forfeited in the event the Lessees cancel this
Contract of Lease prior to May 1, 1990; c) March 1, 1991 P440,000.00 rental of May 1, 1991 to May 1, 1992;

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whole or in part, nor shall the Lessees assign in whole or in part any
d) March 1, 1992 P484,000.00 rental of May 1, 1992 to May 1, of their right under this Contract and no right or interest thereto or
1993; therein shall be conferred on or vested in anyone by the Lessees,
either by operation of law or otherwise;
e) March 1, 1993 P532,400.00 rental of May 1, 1994;
8. Failure on the part of the Lessees to pay within its stipulated due
The Lessees shall in addition to the cash rental referred to the above, period or failure to observe any of the conditions of this Agreement,
pay to the Lessor Seven Thousand (7,000) cavans of salt measured at shall entitle the Lessor to terminate this Agreement immediately and
four (4) tin cans, size of four gallons of 16 liters per can, to forefeit the deposit of One Hundred Thousand Pesos
per cavan yearly, starting the year 1990 up to and including the year (P100,000.00) and demand that the Lessees vacate the leased
1994. The Lessees shall deliver the aforesaid salt to the Lessor from property;
the time the Lessees commences to harvest salt, provided that the
7,000 cavans should already be delivered to the Lessor by the end of 9. In the event that the Lessees shall elect to terminate this
the harvest season in May of a particular year. In the event that the Agreement before its expiration, the One Hundred Thousand Pesos
Lessees cannot or fail to deliver the 7,000 cavans of salt in full or in (P100,000.00) deposit will be forfeited in favor of the Lessorr;
part, the Lessees are obliged to pay whatever difference in cash at the
prevailing market value at the end of harvest in May of a particular 10. The Lessees shall at their own expense, improve and develop the
year; aforesaid fishponds and to keep up and maintain in good repair and
condition all fences, dikes, saltbeds and other improvements existing
7. That the personal character and integrity of the Lessees and the thereon by (a) raising and keeping the elevation of the pilapil inside
nature of the occupancy of the leased property as above restricted are the fishpond to 1 1/2 meters high and 2 meters height to
special considerations and inducements for granting this lease by the pilapilconstituting the boundary of the fishponds and those
the Lessor; consequently, the Lessees shall not sub-let the property, fronting the river and a width of 2 meters for all the pilapil; (b) to
nor allow any person, firm or corporation to occupy the same in repair all the 331 saltbeds with tisa and wooden division saltbeds; (c)

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to clean and clear the whole area of the leased premises by removing except as fishpond or saltbeds and from subleasing the property
all the bushes, weeds and cogons, provided, moreover, that the herein lease, or any other portion thereof, or from assigning their
Lessees are obliged to maintain throughout the effectivity of this rights under this Contract of Lease, or mortgaging or otherwise
Lease, the said elevation and cleanliness of the leased premises. The encumbering the same, without the express written consent of
Lessees shall make improvements not less than 25% every year and the Lessor;
thereafter for the duration of this contract. That all the improvements
and development made by the Lessees shall after the expiration of 12. That the Contract of Lease between the Lessor and the Lessees is
this Lease belong to theLessor. entirely a civil lease of a fishpond and not in any manner to be
construed or misunderstood to be agrarian in nature and
In the event that the Lessees shall fail and/or refuse to make the extent. Labor disputes and wages regarding hired workers or laborers
aforesaid improvements and/or clean the leased premises as herein of the Lessees in the operation and maintenance of the Lease, shall
provided, the Lessor shall have the right to cancel and terminate this not be the responsibility of the Lessor, including any claim
Agreement without prejudice to the right of the Lessor or itself make pertaining to labor problems but the Lessees will be held solely liable
the required improvements, and cleaning and utilizing for said for the settlement and/or payment of the wages and claims;
purpose, the deposit of P100,000.00 in which event, the Lessor is
obliged to notify the Lessees of said use, and the amount so used 13. The Lessor shall be solely liable for the payment of only the
within realty taxes on the leased premises while the Lessees shall answer
fifteen (15) days from said notice, the Lessees shall be obliged to and be liable for the payment of the fees for business licenses and
replenish the said amount of deposit of P100,000.00. Failure of the permits and other business taxes be due to the government from the
Lessees to replenish the said amount shall entitle the Lessor to cancel operation of fishponds and saltbeds;
or terminate this Agreement;
14. The Lessor, through its authorized representative, is entitled to
11. Except as heretofore stipulated on, the Lessees are prohibited make an inspection of the leased premises at any time during the day
from using the property or portion thereof for any other purpose time;

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the Lessor for securing said writ or/and for enforcing the same as
15. In the event, the Lessees cancel or terminate this Contract of well as liquidated damages shall be borne solely by the Lessees;
Lease on their own volition prior to May 1, 1994, they are not
entitled to any refund of any rentals already paid by them to 18. That in the event the Lessees fail to vacate or leave the leased
the Lessor, as well as to the deposit; premises voluntarily after the termination of the leased contract,
notwithstanding demands made on them by theLessor, and insist and
16. Upon the termination, expiration or cancellation of this Contract ignore the demands, the Lessees shall pay the Lessor jointly and
of Lease, the Lessor shall automatically take possession of the leased severally unrealized income and profit in point of unpaid rentals for
premises and the Lessees shall, without need of any demand and overstaying in the leased premises without any legal right or interest
without any need of court action, vacate the premises and surrender whatsoever, in the amount of the reasonable use and benefit of the
possession thereof to the Lessor, including the improvements shall leased premises to be computed by the Lessor, based on double the
appertaining complete ownership to the Lessor, upon the rentals of the last year of Contract of Lease plus legal interest, until
introduction of the said improvements; the Lessees vacate the leased premises;

17. In the event that the Lessees violated and/or fail to refuse to 19. That if the said property is not surrendered to the Lessor in the
abide by and comply with the terms and conditions of this manner provided for in this Contract, the Lessees shall be
Agreement or failure to pay within responsible to the Lessor for all damages which theLessor may suffer
its stipulated due period, the deposit of the Lessees in the amount by reason thereof and shall indemnify the Lessor against any and all
of P100,000.00 shall be forfeited in favor of the Lessor and the latter claims made by the succeeding tenants against the Lessor, resulting
shall have the right to cancel and terminate this Contract from delay by theLessor in delivering possession of the property;
immediately and to secure from the Court a writ of execution or
other order for the enforcement of the terms hereof against the 20. In case of the default of the Lessees in their obligations under
Lessees, all expenses including sheriffs fees, incurred by this Contract of Lease, the Lessees agrees to pay the sum equivalent
of 25% of the amount due from them as liquidated damages as

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attorneys fee aside from court costs, should the Lessor be constrained 24. This Contract of Lease cancelled and superseded, the Contract of
to resort to court from the enforcement of its rights under the Lease signed by the Lessor and Mr. David Jimenez on May 20,
Contract; 1985 and notarized by Francisco Agustin for and in behalf of the
City of Manila and appearing in the notarial register as Document
21. In case the Philippine Pesos is officially devalued, all payments No. 431, Page No. 45, Book No. XII, Series of 1985;
to be made by the Lessees to the Lessor after such devaluation shall
be made in amounts properly readjusted and proportionately 25. The parties herein hereby attest and confirm that the terms and
increased in accordance with or on the basis of the official value of conditions of the Contract of Lease and the effect thereof have been
the peso at the time of the execution of this lease contract; explained to them to their satisfaction and that they fully understand
the same.
22. The Lessees hereby agree that any question which may arise
between the Lessor and the Lessees by reason of this document and IN WITNESS WHEREOF, the parties have hereunto affixed their
which has to be submitted for decision to the court of justice, may at signatures this 28th day of April, 1989 at the City of Manila,
the option of the Lessor be brought before the court of competent Philippines.
jurisdiction in the City of Manila, waiving for this purpose other
proper venue; PAG-ASA FISHPOND CORPORATION Sgd.
Lessor NOEL HILARIO Lessee

By:
23. The Lessees shall jointly and severally be liable for any liability Sgd. Sgd.
or liabilities pertaining to the Lessor concerning the relationship and MR. SEGUNDO SEANGIO-President DAVID JIMENEZ-Lessee
its stipulations entered into in this Contract of Lease;
WITNESSESS

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Sgd. Sgd. Lease that Real Property situated at Sto.


Rosario,Masinloc, Zambales.
ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES) S.S.


CITY OF MANILA )
WITNESS MY HAND AND SEAL THIS 9TH DAY OF MAY,
BEFORE ME, a Notary Public for and in the City of Manila, 1989.
Philippines, personally appeared the following persons with their
respective Residence Certificates, to wit: ROBERTO M. MENDOZA
Notary Public
SEGUNDO SEANGIO A-4328120 Manila, January 3, 1989 Until December 31, 1989
DAVID JIMENEZ A-03704324 Bulacan, Obando PTR No. 52454710
February 17, 1989 TAN 4784-113-M
NOEL HILARIO A-11107684 Lawa, Obando, Bulacan Doc. No. 422
May 5, 1989 Page No. 86
Book No. XIX
known to me and to me known to be the same persons who executed Series of 1989.[3]
the aforegoing instrument and have acknowledged before me that the
same is their free and voluntary act and deed. It is an important sense of the agreement that the fishpond will be
managed by the two lessees jointly. Jimenez was charged with the
This document consists of eight (8) pages, signed by the parties and management of a 40-hectare portion of the fishpond, situated
their instrumental witnesses on every page refers to a Contract of at Sitio Simelyahan, Barangay Sto. Rosario, and
in Sitios Mapait and Elman, Barangay Bamban, all in

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the Municipality of Masinloc, Zambales. The remaining portions of defer the inclusion of petitioners fishpond in the compulsory
petitioners landholding were to be managed by Hilario. acquisition program.

In the meantime, the Philippine Congress enacted Republic Act Sometime in 1990, Jimenez hired respondents, namely: Bernardo
(R.A.) No. 6657, the Comprehensive Agrarian Reform Law Jimenez, Robert Belenbough, Leonard Mijares, Eduardo Jimenez,
(CARL).[4] The social legislation was founded on the right of farmers Jose Cruz, Elizalde Edquibal, Dominador Elgincolin and Geronimo
and regular farmworkers, who are landless, to own directly or Darilag, to work as farmworkers in the fishpond.[8] As farmworkers,
collectively the lands they till or, in the case of other farm workers, respondents each received a monthly allowance of P1,500.00 from
to receive a just share of the fruits thereof. It aimed to undertake the David Jimenez, as well as 50% of the fishponds net proceeds from
just distribution of all agricultural lands, having taken into account the total fish harvests, which they divided equally among
ecological, developmental, and equity considerations, and subject to themselves.[9]
the payment of just compensation.[5]
In April 1994, they were required by David Jimenez to vacate the
On September 26, 1989, petitioner, through its president fishpond on or before May 1, 1994. The demand to vacate was made
Segundo Seangio, applied for exemption from the coverage of the due to the impending expiration of Jimenezs civil law lease over the
agrarian reform program.[6] The request was reiterated via a letter property with petitioner.[10]
dated October 17, 1989, addressed to Justice Milagros A. German,
Senior Special Consultant and Adviser in Legal Affairs, Department Respondents were not agreeable to the demand to
[7]
of Agrarian Reform (DAR). vacate. Accordingly, on April 25, 1994, they filed a complaint
directly against petitioner for maintenance of possession before the
On November 10, 1989, the DAR, speaking through Justice German, Provincial Agrarian Reform Adjudication Board (PARAD) in Iba,
acted favorably on petitioners application for Zambales.[11] In their complaint, they contended, inter alia, that they
exemption. Consequently, the DAR advised the Municipal Agrarian are entitled to security of tenure; and that the fishpond is covered by
Reform Officer (MARO) of Masinloc to observe the status quo and

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the Comprehensive Agrarian Reform Program (CARP) under R.A. landholding of the defendant under CARP coverage which is purely
No. 6657. administrative and only cognizable by the Department of Agrarian
Reform, as there are no concrete evidence. Thus, a judgment is
They prayed that the entire fishpond of petitioner be placed under the hereby rendered DISMISSING plaintiffs complaint for lack of merit.
coverage of the CARP; that they be considered as farmer
beneficiaries who are entitled to be awarded the fishpond; and that SO DECIDED.[15]
they be allowed to remain in possession of the fishpond.[12]
The PARAD ruled that respondents are not agricultural leasehold
In its Answer, petitioner averred that its lessees over the fishpond tenants who may be entitled to security of tenure. According to the
were only David Jimenez and one Noel Hilario and that its lease PARAD, petitioner, as landowner, did not consent to the hiring of
agreement with said lessees was not agrarian but civil in nature. It respondents, as farmworkers, by its civil law lessee, David
also posited that the fishpond, being a commercial one, is not yet Jimenez. The PARAD declared:
subject to compulsory acquisition under the CARP pursuant to
Section 11 of R.A. No. 6657.[13] Petitioner alleged that respondents
entry into and occupation of the fishpond, as well as their enjoyment The original lessees in the Contract of Lease (Annex A) with the
of the fish produced, was without its knowledge and consent.[14] lessor-defendant are David Jimenez and Noel Hilario, who are both
residents of Obando, Bulacan. The said contract expired onMay 01,
On July 18, 1994, the PARAD ruled in favor of petitioner 1994. Paragraph 7 of the contract of lease provides that,
(defendant) and against respondents (plaintiffs), dismissing the consequently, the lessees shall not sublet the property, nor allow any
complaint for lack of merit. The fallo of the PARADs decision reads: person, firm or corporation to occupy the same in whole or in part
nor shall the lessees assign in whole or in part any of their right
WHEREFORE, this Forum is constrained to rule out plaintiffs under this Contract and no right or interest thereto or therein shall be
allegation as a regular farmworker pursuant to R.A. 6657 and/or conferred or vested in anyone by the lessees either by operation of
tenants of herein defendant and to deny prayer for placing the law or otherwise. The provision was totally violated by the lessee

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David Jimenez when the plaintiff(s) were admittedly hired as


farmworkers. The plaintiffs consist of David Jimenez sons Bernardo SO ORDERED.[17]
and Eduardo Jimenez, his son-in-law Leonard Mijares and Robert
Belenbough, Jose Cruz, Elizalde Edquibal, Dominador Elgincolin The DARAB ruled that respondents are agricultural leasehold
and Geronimo Darilag.Noticeable from the evidence submitted that tenants of the subject property who deserve the protective mantle of
all the plaintiffs are not residents of Zambales where the subject the law despite the fact that only the civil law lessee installed them as
landholding are situated. such. It ratiocinated:

Consequently, because of the violation of the contract, the plaintiffs x x x plaintiffs-appellants are, by operation of law, tenant-farmers of
are not even recognized by the defendant. Plaintiffs allegation to be the subject landholding, notwithstanding that it was a civil law
(sic) tenant necessarily failed and has no leg to stand. (sic). Plainly, lessee, who installed them therein. When all the elements the (sic)
consent of a landowner which is an essential element of tenancy is tenancy relation are present, then the protective mantle of the
not attendant.[16] security of tenure as guaranteed by the 1987 Charter shall be
available to them. x x x
On appeal to the DARAB, the PARADs decision was reversed and
set aside. The dispositive part of the DARAB decision reads: xxxx

WHEREFORE, premises considered and finding reversible errors, Verily, Sections 6 and 7 of Republic Act (RA) No. 3844 explicit
(sic) committed by the Adjudicator a quo, the assailed decision is (sic) provides, thus:
hereby REVERSED and a new judgment is rendered directing
the PAG-ASA Fishpond Corporation, Incorporated (sic) through its Section 6. Parties to Agricultural Leasehold Relation. The
President and Officers, to respect the peaceful possession, cultivation agricultural leasehold relation shall be limited to the person who
and enjoyment of the subject landholding by the petitioners- furnished the landholding, either as owner, civil law lessee,
appellants who are the tenants thereof.

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usufructuary, or legal possessor and the person who personally In a Decision dated March 30, 2004, the CA affirmed the DARAB
cultivates the same. decision, disposing as follows:

and Once a tenancy relationship is established, therefore, the tenant is


entitled to security of tenure and cannot be ejected unless upon
Section 7. Tenure of Agricultural Leasehold Relation. The judicial authority for causes provided by law. The reliance of the
Agricultural leasehold relation once established shall confer upon the petitioner on Sanchez v. Court of Appeals, supra, is, consequently
agricultural lessee the right to continue working on the landholding misplaced, since that doctrine was applicable only to the hired
until such leasehold relation is extinguished, the agricultural lessee laborers of a civil law lessee, not to bona fide share or leasehold
shall be entitled to security of tenure on his landholding and cannot tenants like the respondents.
be ejected therefrom unless authorized by the Court for causes herein
provided.[18] WHEREFORE, the appealed decision is AFFIRMED.

When petitioners motion for reconsideration was denied[19] by the SO ORDERED.[20]


DARAB on January 17, 2001, they appealed to the CA via petition
for review under Rule 43 of the 1997 Rules of Civil Procedure. The CA opined that although petitioner was not privy to a tenancy
relationship with respondents, its civil law lessee, David Jimenez,
Petitioner insisted that respondents were not tenants on the property. made respondents the agricultural leasehold tenants in the
It argued anew that it was not a party to any tenancy relationship property. The CA concluded that David Jimenez, being the legal
with anyone vis--vis the subject property; and that it had not received possessor of the fishpond as defined under Section 42 of R.A. No.
any share in the fishponds harvests from respondents. 1199, has the authority to hire agricultural leasehold tenants and to
bring about agricultural leasehold relations. This relation, according
CA Disposition to the appellate court, is binding upon the landowner, petitioner,

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which effectively became obliged to respect the rights of the Aggrieved, petitioners moved for reconsideration. The motion was,
tenants. Among said rights is the right to security of tenure. however, denied by the appellate court via
[21]
Resolution dated August 5, 2004. Hence, the present recourse
The CA pointed out: under Rule 45.

Finally, although the petitioner is correct in positing that the lease


was one under the civil law, rather than an agricultural lease, the Issues
expiration of the lease did not negate the right of the respondents to
security of tenure as the bona fide tenants. Petitioner now contends that:

According to Sec. 8, Republic Act No. 3844, otherwise known as I


The Agricultural Land Reform Code, a leasehold relation, once THE COURT OF APPEALS GRAVELY ERRED IN NOT
established, can be terminated on the following grounds, to wit: APPLYING THE HONORABLE COURTS RULING IN THE
RECENT CASE OF VALENCIA VS. COURT OF APPEALS, ET AL.,
1. Abandonment of the landholding without the knowledge of the 401 SCRA 666, WHICH APPLIES SQUARELY TO THE FACTS
agricultural lessor; IN THE INSTANT CASE, THAT SECTION 6 OF REPUBLIC
ACT NO. 3844, AS AMENDED, DOES NOT AUTOMATICALLY
2. Voluntary surrender of the landholding by the agricultural lessee, AUTHORIZE A CIVIL LAW LESSEE TO EMPLOY A TENANT
written notice of which shall be served 3 months in advance; or WITHOUT THE CONSENT OF THE
LANDOWNER. ACCORDINGLY, AFTER THE EXPIRATION
3. Absence of an heir to succeed the lessee in the event of his/her OF THE CIVIL LAW LEASE, PETITIONER WAS NOT BOUND
death of permanent incapacity. BY THE ALLEGED TENANCY RELATIONSHIP BETWEEN
RESPONDENTS AND THE CIVIL LAW LESSEE WHICH WAS
ENTERED INTO WITHOUT ITS CONSENT.

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whether leasehold, tenancy, stewardship or otherwise, over lands


II devoted to agriculture, including disputes concerning farm workers
THE COURT OF APPEALS GRAVELY ERRED IN associations or representation of persons in negotiating, fixing,
CONCLUDING THAT RESPONDENTS ARE SHARE TENANTS maintaining, changing or seeking to arrange terms or conditions of
WHO ARE ENTITLED TO SECURITY OF TENURE. such tenurial arrangements.[25]

III As early as February 20, 1995, private lands actually, directly and
THE COURT OF APPEALS GRAVELY ERRED IN NOT exclusively used for prawn farms and fishponds were exempted from
APPLYING THE RULING OF THE HONORABLE COURT IN the coverage of the CARL by virtue of R.A. No. 7881.[26] Section 2
THE CASE OF SANCHEZ VS. COURT OF APPEALS, 129 SCRA of the said law expressly provides:
[22]
717 TO THE INSTANT CASE.
Sec. 2. Section 10 of Republic Act No. 6657 is hereby amended to
Our Ruling read as follows:

Before We begin to consider the issues hoisted by petitioner, the Sec. 10. Exemptions and Exclusions.
Court takes cognizance of a pivotal question of jurisdiction. We
resolve this issue motu proprio, even if it was not raised by the a) Lands actually, directly and exclusively used for parks, wildlife,
parties nor threshed out in their pleadings.[23] forest reserves, reforestation, fish sanctuaries and breeding grounds,
watersheds and mangroves shall be exempt from the coverage of this
The jurisdiction of the PARAD, DARAB and the CA on appeal, is Act.
limited to agrarian disputes or controversies and other matters or
incidents involving the implementation of the CARP under R.A. No. b) Private lands actually, directly and exclusively used for prawn
[24]
6657, R.A. No. 3844 and other agrarian laws. An agrarian dispute farms and fishponds shall be exempt from the coverage of this Act:
is defined as any controversy relating to tenurial arrangements, Provided, That said prawn farms and fishponds have not been

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distributed and Certificate of Land Ownership Award (CLOA) burial grounds and cemeteries, penal colonies and penal farms
issued to agrarian reform beneficiaries under the Comprehensive actually worked by the inmates, government and private research and
Agrarian Reform Program. quarantine centers and all lands with eighteen percent (18%) slope
and over, except those already developed, shall be exempt from the
In cases where the fishponds or prawn farms have been subjected to coverage of this Act.
the Comprehensive Agrarian Reform Law, by voluntary offer to sell,
or commercial farms deferment or notices of compulsory acquisition, Admittedly, there is no express repeal of R.A. No. 3844 as a
a simple and absolute majority of the actual regular workers or whole. Its provisions that are not inconsistent with R.A. No. 6657
tenants must consent to the exemption within one (1) year from the may still be given suppletory effect. Nonetheless, there is now
effectivity of this Act. When the workers or tenants do not agree to irreconcilable inconsistency or repugnancy between the two laws as
this exemption, the fishponds or prawn farms shall be distributed regards the treatment of fishponds and prawn farms. Such
collectively to the worker-beneficiaries or tenants who shall form a repugnancy leads to the conclusion that the provisions of R.A. No.
cooperative or association to manage the same. 6657 supersede the provisions of R.A. No. 3844 insofar as fishponds
and prawn farms are concerned. In any event, Section 76 of R.A. No.
In cases where the fishponds or prawn farms have not been subjected 6657, as amended, provides that all other laws, decrees, issuances, or
to the Comprehensive Agrarian Reform Law, the consent of the farm parts thereof inconsistent thereto are repealed or amended
workers shall no longer be necessary, however, the provision of accordingly.[27]
Section 32-A hereof on incentives shall apply.
c) Lands actually, directly and exclusively used and found to be Verily, the DARAB finding of agricultural leasehold tenancy
necessary for national defense, school sites and campuses, including relations between petitioners civil law lessee David Jimenez and
experimental farm stations operated by public or private schools for respondents have no basis in law. The rule is well-entrenched in this
educational purposes, seeds and seedling research and pilot jurisdiction that for tenancy relations to exist, the following
production center, church sites and convents appurtenant thereto, requisites must concur: (a) the parties are the landholder and the
mosque sites and Islamic centers appurtenant thereto, communal

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tenant; (b) the subject is agricultural land; (c) there is consent; (d) the peaceful possession over a fishpond filed by a tenant-lessee. The
purpose is agricultural production; and (e) there is consideration.[28] Court held then:

On the jurisdictional issue, we find that it was reversible error for the
The absence of one element makes an occupant of a parcel of land, PARAB to have taken cognizance of petitioners complaint. The
or a cultivator thereof, or a planter thereon outside the scope of the jurisdiction of the PARAB in this case is limited to agrarian disputes
CARL. Nor can such occupant, cultivator or planter be classified as or controversies and other matters or incidents involving the
a de jure agricultural tenant for purposes of agrarian reform law. And implementation of the Comprehensive Agrarian Reform Program
unless a person has established his status as a de jure tenant, he is not (CARP) under Rep. Act No. 6657, Rep. Act No. 3844 and other
entitled to security of tenure nor is he covered by the Land Reform agrarian laws. An agrarian dispute is defined as any controversy
[29]
Program of the Government under existing agrarian reform laws. relating to tenurial arrangements, whether leasehold, tenancy,
stewardship or otherwise, over lands devoted to agriculture,
In the case under review, the subject fishpond is not an agricultural including disputes concerning farm workers associations or
land subject to compulsory CARP coverage. Neither was there a representation of persons in negotiating, fixing, maintaining,
sharing of the harvests between petitioner and respondents. That changing or seeking to arrange terms or conditions of such tenurial
respondents shared the harvests of the fishpond only with the civil arrangements.
law lessee David Jimenez is uncontroverted. Evidently, there is no
agrarian tenancy relationship between petitioner and respondents. Although Section 166(1) of Rep. Act No. 3844 had included
fishponds in its definition of agricultural land within its coverage,
This is not a case of first impression. The Court has had occasion to this definition must be considered modified in the light of Sec. 2 of
affirm the exemption of fishponds from the coverage of the CARP Rep. Act No. 7881, which amended Section 10 of Rep. Act No.
in Atlas Fertilizer Corp. v. Secretary, Department of Agrarian 6657; otherwise known as the Comprehensive Agrarian Reform Law
[30] [31]
Reform and in Romero v. Tan. In Romero, the Court scored the (CARL). Expressly, the amendment has excluded private lands
PARAD for taking cognizance of a complaint for maintenance of actually, directly and exclusively used for prawn farms and

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fishponds from the coverage of the CARL. In fact, under Section were issued individual certificates to evidence the award of the
3(c) of R.A. No. 6657, as amended, defines an agricultural land as property in their favor.
that which is devoted to agricultural activity and not otherwise
classified as mineral, forest, residential, commercial or industrial Even assuming, ex gratia argumenti, that the PARAD, DARAB and
land. In turn, Section 3(b) thereof defines agricultural activity as the the CA had jurisdiction, the complaint for maintenance of peaceful
cultivation of the soil, planting of crops, growing of fruit trees, possession lodged by respondents still fails for triple reasons.
including the harvesting of such farm products, and other farm
activities, and practices performed by a farmer in conjunction with
such farming operations done by persons whether natural or First. Intent is material in tenancy relations.
juridical. Clearly, by virtue of the amendments to the CARL, the
operation of a fishpond is no longer considered an agricultural The DARAB and the CA anchored its finding of tenancy relations on
activity, and a parcel of land devoted to fishpond operation is not the legal possession of David Jimenez, the civil law lessee, over the
agricultural land as therein defined.[32] subject property. According to them, as the legal possessor, Jimenezs
installation of respondents as tenants binds petitioner.
It may well be argued that respondents have acquired a vested right
to security of tenure arising from the alleged existing tenancy The rule is well-entrenched in this jurisdiction that tenancy is not a
relations. The complaint before the PARAD was filed on April 14, purely factual relationship, it is also a legal relationship.[34] The
1994, way before the passage and effectivity of R.A. No. 7881 intent of the parties, the understanding when the tenant is installed,
on February 20, 1995. However, a claim to any vested right has no their written agreements, provided they are not contrary to law, are
leg to stand on. Section 2(b) of R.A. No. 7881[33] now contains a crucial.
proviso, precisely to protect vested rights of those who have already
been issued a Certificate of Land Ownership Award In Valencia v. Court of Appeals,[35] the Court voided the CA finding
(CLOA). Without such CLOA, no vested right can accrue to persons of tenancy relations between the landowner and the tenants of the
claiming it. Here, the record is bereft of any proof that respondents civil law lessee for lack of intent.The Court held in Valencia:

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most unfair to the hapless and unsuspecting landowner who entered


The substantive issue to be resolved may be expressed in this into a civil law lease agreement in good faith only to realize later on
manner: Can a contract of civil law lease prohibit a civil law lessee that he can no longer regain possession of his property due to the
from employing a tenant on the land subject matter of the lease installation of a tenant by the civil law lessee.
agreement? Otherwise stated, can petitioners civil law lessee, Fr.
Flores, install tenants on the subject premises without express On the other hand, under the express provision of Art. 1649 of the
authority to do so under Art. 1649 of the Civil Code, more so when Civil Code, the lessee cannot assign the lease without the consent of
the lessee is expressly prohibited from doing so, as in the instant the lessor, unless there is a stipulation to the contrary. In the case
case? before us, not only is there no stipulation to the contrary; the lessee is
expressly prohibited from subleasing or encumbering the land, which
Contrary to the impression of private respondents, Sec. 6 of R.A. No. includes installing a leasehold tenant thereon since the right to do so
3844, as amended, does not automatically authorize a civil law lessee is an attribute of ownership. Plainly stated therefore, a contract of
to employ a tenant without the consent of the landowner. The lessee civil law lease can prohibit a civil law lessee from employing a
must be so specifically authorized. For the right to hire a tenant is tenant on the land subject matter of the lease agreement. x x x[36]
basically a personal right of a landowner, except as may be provided
by law. But certainly nowhere in Sec. 6 does it say that a civil law Here, petitioner never intended to install respondents as tenants. As
lessee of a landholding is automatically authorized to install a tenant in Valencia, the contract of lease petitioner executed with David
thereon. A different interpretation would create a perverse and Jimenez expressly prohibits the lessees to sublet the property, nor
absurd situation where a person who wants to be a tenant, and taking allow any person, firm or corporation to occupy the same in whole or
advantage of this perceived ambiguity in the law, asks a third person in part, nor shall the lessee assign in whole or in part any of their
to become a civil law lessee of the landowner. Incredibly, this tenant right under this contract.[37] It is elementary that possession can be
would technically have a better right over the property than the limited by express agreement of the parties.[38] In the case before Us,
landowner himself. This tenant would then gain security of tenure, the lessees were expressly prohibited from subleasing or
and eventually become owner of the land by operation of law. This is

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encumbering the land in any manner. Of course, this includes the The DARAB and the CA ruled that Section 6 of R.A. No. 3844
installation of tenants on the subject property. authorizes a legal possessor, such as David Jimenez, to employ a
tenant even without the consent of the landowner.
The Court notes that in Joya v. Pareja[39] and again in Ponce
v. Guevarra,[40] agricultural leasehold tenancy relations were Again, they are mistaken. The Court, in Valencia, traced the origin
affirmed despite a similar prohibition in the lease and outlined the rationale of the polemical provision. Said the Court:
agreement. However, in the said cases, the landowners were deemed
to have consented to, and ratified the, installation of the tenants. The When Sec. 6 provides that the agricultural leasehold relations shall
landowners there extended the terms of the lease and negotiated for be limited to the person who furnishes the landholding, either as
better terms with the tenants themselves. They were thus held owner, civil law lessee, usufructuary, or legal possessor, and the
in estoppel and the tenants considered de jure occupants. person who personally cultivates the same, it assumes that there is
already an existing agricultural leasehold relation, i.e., a tenant or
In the case under review, the record is bereft of any indication that agricultural lessee already works the land. The epigraph of Sec. 6
petitioner dealt with respondents in the same manner. As adverted to merely states who are Parties to Agricultural Leasehold Relations,
earlier, petitioners were consistent that they contracted only with which assumes that there is already a leasehold tenant on the land;
their civil law lessees. They were not privy to the transactions not until then. This is precisely what we are still asked to determine
entered into by its lessee with respondents. in the instant proceedings.

Second. A stream cannot rise higher than its source. The civil law To better understand Sec.6, let us refer to its precursor, Sec. 8 of
lessee, David Jimenez, was not authorized to enter into a tenancy R.A. No. 1199, as amended. Again, Sec. 8 of R.A. No. 1199 assumes
relationship with respondents. the existence of a tenancy relation. As its epigraph suggests, it is
a Limitation of Relation, and the purpose is merely to limit the
tenancy to the person who furnishes the land, either as owner,
lessee, usufructuary, or legal possessor, and to the person who

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actually works the land himself with the aid of labor available from himself with the aid of labor available from within his immediate
within his immediate farm household. Once the tenancy relation is farm household, it eliminated the nominal tenant or middleman from
established, the parties to that relation are limited to the persons the picture.
therein stated. Obviously, inherent in the right of landholders to
install a tenant is their authority to do so; otherwise, without such Another noted authority on land return,
authority, civil law lessees as landholders cannot install a tenant on Dean Jeremias U. Montemayor, explains the rationale for Sec. 8 of
the landholding. Neither Sec. 6 of R.A. No. 3844 nor Sec. 8 of R.A. R.A. No. 1199, the precursor of Sec. 6 of R.A. No. 3844:
No. 1199 automatically authorizes the persons named therein to
employ a tenant on the landholding. Since the law establishes a special relationship in tenancy with
important consequences, it properly pinpoints the persons
According to Mr. Justice Guillermo S. Santos and CAR Executive to whom said relationship shall apply. The spirit of the law is to
Judge Artemio C. Macalino, respected authorities on agrarian prevent both landholder absenteeism and tenant absenteeism. Thus, it
reform, the reason for Sec. 6 of R.A. No. 3844 and Sec. 8 of R.A No. would seem that the discretionary powers and important duties of the
1199 in limiting the relationship to the lessee and the lessor is to landholder, like the choice of crop or seed, cannot be left to the will
discourage absenteeism on the part of the lessor and the custom of or capacity of an agent or overseer, just as the cultivation of the land
co-tenancy under which the tenant (lessee) employs another to do the cannot be entrusted by the tenant to some other people. Tenancy
farm work for him, although it is he with whom the landholder relationship has been held to be of a personal character.
(lessor) deals directly. Thus, under this practice, the one who actually
works the land gets the short end of the bargain, for the nominal or Section 6 as already stated simply enumerates who are the parties to
capitalist lessee hugs for himself a major portion of the harvest. This an existing contract of agricultural tenancy, which presupposes that a
breeds exploitation, discontent and confusion tenancy already exists. It does not state that those who furnish the
x x x. The kasugpong, kasapi, or katulong also works at the pleasure landholding, i.e., either as owner, civil law lessee, usufructuary, or
of the nominal tenant. When the new law, therefore, limited tenancy legal possessor, are automatically authorized to employ a tenant on
relation to the landholder and the person who actually works the land the landholding. The reason is obvious. The civil lease agreement

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may be restrictive. Even the owner himself may not be free to install respondents can acquire no better right than their predecessor-in-
a tenant, as when his ownership or possession is encumbered or is interest, David Jimenez.
subject to a lien or condition that he should not employ a tenant
thereon. This contemplates a situation where the property may be Third. The compulsory acquisition of petitioners landholding
intended for some other specific purpose allowed by law, such as, its pursuant to the agrarian reform program was held in abeyance
conversion into an industrial estate or a residential subdivision. pending evaluation by its application for exemption.

xxxx The records unveil that on September 26, 1989, petitioner applied for
exemption from the coverage of the agrarian reform
From the foregoing discussion, it is reasonable to conclude that a program.[42] On November 10, 1989, the DAR, speaking through
civil law lessee cannot automatically institute tenants on the property Justice Milagros A. German, Senior Special Consultant and Adviser
under Sec. 6 of R.A. No. 3844. The correct view that must in Legal Affairs,[43] acted favorably on petitioners application for
necessarily be adopted is that the civil law lessee, although a legal exemption. Along this line, the MARO of Masinloc, Zambales, was
possessor, may not install tenants on the property unless expressly advised to observe the status quo and defer the inclusion of
authorized by the lessor. And if a prohibition exists or is stipulated in petitioners fishpond in the compulsory acquisition program.
the contract of lease the occupants of the property are merely civil
law sublessees whose rights terminate upon the expiration of the In sum, respondents claim of security of tenure founded on their
civil law lease agreement.[41] installation as tenants of petitioners civil law lessee is without basis
in law. Procedurally, fishponds and prawn farms were expressly
Evidently, securing the consent of the landowner is a condition sine exempted from the coverage of the agrarian reform
qua non for the installation of tenants. Here, petitioners consent was program. Substantially, the civil law lessee was not authorized to
not obtained prior to the engagement of respondents by the civil law enter into leasehold-tenancy relations.
lessee, David Jimenez. Worse, the lease agreement expressly
prohibited the assignment of the lease to third persons. Verily,

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WHEREFORE, the appealed Decision is REVERSED AND SET agricultural to non-agricultural As a result, petitioner informed
ASIDE. A new one is entered DISMISSING the complaint for respondent DAR that it was applying for conversion of Hacienda
maintenance of peaceful possession and inclusion for compulsory Caylaway from agricultural to other uses. The petitions nub on the
CARP coverage of petitioners landholding for lack of jurisdiction interpretation of Presidential Proclamation (PP) 1520 reads:
and lack of merit. DECLARING THE MUNICIPALITIES OF MARAGONDON AND
TERNATE IN CAVITE PROVINCE AND THE MUNICIPALITY
Roxas and Company, Inc. vs. DAMBA-NSFW and DAR OF NASUGBU IN BATANGAS AS A TOURISTZONE, AND
FOR OTHER PURPOSES Essentially, Roxas & Co. filed its
FACTS: application for conversion of its three haciendas from agricultural
Roxas & Co. is a domestic corporation and is the registered owner of to non-agricultural on the assumption that the issuance of PP
three haciendas. On July 27, 1987, the Congress of the Philippines 1520 which declared Nasugbu, Batangas as a tourism zone,
formally convened and took over legislative power from the reclassified them to non-agricultural uses. Its pending application
President. This Congress passed Republic Act No. 6657, the notwithstanding, the Department of Agrarian Reform (DAR) issued
Comprehensive Agrarian Reform Law (CARL) of 1988. The Act Certificates of Land Ownership Award (CLOAs) to the farmer-
was signed by the President on June 10, 1988 and took effect on June beneficiaries in the three haciendas including CLOA No. 6654 which
15, 1988. Before the laws effectivity, on May 6, 1988, [Roxas was issued on October 15, 1993 covering 513.983 hectares, the
& Co.] filed with respondent DAR a voluntary offer to sell [VOS] subject of G.R. No. 167505. Roxas & Co. filed with the DAR
Hacienda Caylaway pursuant to the provisions of E.O. No. 229. an application for exemption from the coverage of the
Haciendas Palico and Banilad were later placed under compulsory Comprehensive Agrarian Reform Program (CARP) of 1988 on the
acquisition by DAR in accordance with the CARL. On August 6, basis of PP 1520 and of DAR Administrative Order (AO) No. 6,
1992 [Roxas & Co.], through its President, sent a letter to Series of 1994
theSecretary of DAR withdrawing its VOS of Hacienda 3 which states that all lands already classified as commercial,
Caylaway.The Sangguniang Bayan of Nasugbu, Batangas allegedly industrial, or residential before the effectivity of CARP no
authorized the reclassification of Hacienda Caylaway from longer need conversion clearance from the DAR.

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ISSUES: agricultural, hence, exempt from the coverage of the


Whether PP 1520 reclassified in 1975 all lands in the Maragondon- [Comprehensive Agrarian Reform Law] lies withthe [Department of
Ternate-Nasugbu tourism zone to non-agricultural useto exempt Agrarian Reform], not with this Court." The DAR, an administrative
Roxas & Co.s three haciendas in Nasugbu from CARP coverage; body of special competence, denied, byOrder, the application for
CARP exemption of Roxas & Co., it finding that PP 1520 did not
RULING: automatically reclassify all the lands in theaffected municipalities
PP 1520 DID NOT AUTOMATICALLY CONVERT THE from their original uses. It appears that the PTA had not yet, at that
AGRICULTURAL LANDS IN THE THREE MUNICIPALITIES time, identified the "specific geographic areas" for tourism
INCLUDINGNASUGBU TO NON-AGRICULTURAL LANDS. development and had no pending tourism development projects in
Roxas & Co. contends that PP 1520 declared the three municipalities the areas. Further, report from the Center for Land Use Policy
as each constituting a tourism zone, reclassified all landstherein to Planning and Implementation (CLUPPI) indicated that the
tourism and, therefore, converted their use to non-agricultural areas were planted with sugar cane and other crops.11Relatedly, the
purposes.The perambulatory clauses of PP 1520 identified only DAR, by Memorandum Circular No. 7, Series of 2004,12came up
"certain areas in the sector comprising the [three Municipalities that] with clarificatory guidelines and therein decreed thatB.
havepotential tourism value" and mandated the conduct Proclamations declaring general areas such as whole provinces,
of "necessary studies" and the segregation of "specific geographic municipalities, barangays, islands or peninsulas astourist zones that
areas" toachieve its purpose. Which is why the PP directed the merely:(1) recognize certain still unidentified areas within the
Philippine Tourism Authority (PTA) to identify what those potential covered provinces, municipalities, barangays, islands, or
tourismareas are. If all the lands in those tourism zones were to be peninsulasto be with potential tourism value and charge the
wholly converted to non-agricultural use, there would have been Philippine Tourism Authority with the task to identify/delineate
noneed for the PP to direct the PTA to identify what those "specific specificgeographic areas within the zone with potential tourism value
geographic areas" are.In the above-cited case of Roxas & Co. v. CA, and to coordinate said areas development; or (2) recognize the
9 the Court made it clear that the "power to determine potential value of identified spots located within the general area
whether Haciendas Palico,Banilad and Caylaway are non- declared as tourist zone (i.e. x x x x)and direct the

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Philippine Tourism Authority to coordinate said areas entirety of the lands embraced therein from CARP coverageD. The
development;could not be regarded as effecting an automatic DARs reading into these general proclamations of tourism zones
reclassification of the entirety of the land area declared as tourist deserves utmost consideration, more especially in thepresent
zone. This is sobecause "reclassification of lands" denotes their petitions which involve vast tracts of agricultural land. To reiterate,
allocation into some specific use and "providing for the manner of PP 1520 merely recognized the "potential tourism value" of certain
their utilizationand disposition (Sec. 20, Local Government Code) or areas within the general area declared as tourism zones
the "act of specifying how agricultural lands shall be utilized for non-
agricultural uses such as residential, industrial, or commercial, as . It did not reclassify the areas to non-agricultural use.A mere
embodied in the land use plan." A proclamation that reclassification of an agricultural land does not automatically allow a
merelyrecognizes the potential tourism value of certain areas within landowner to change its use since there is still that process of
the general area declared as tourist zone clearly does conversion before one is permitted to use it for other purposes.
not allocate,reserve, or intend the entirety of the land area of the zone
for non-agricultural purposes. Neither does said proclamation direct DOJ OPINION NO. 043, s. 2011
thatotherwise CARPable lands within the zone shall already be used September 1, 2011
for purposes other than agricultural.Moreover, to view these kinds of
proclamation as a reclassification for non-agricultural purposes of Secretary Virgilio R. Delos Reyes Department of Agrarian Reform
entire provinces, municipalities,barangays, islands, or peninsulas Elliptical Road, Diliman Quezon City
would be unreasonable as it amounts to an automatic and sweeping
exemption from CARP in thename of tourism development. The Dear Secretary Delos Reyes :
same would also undermine the land use reclassification powers
vested in local governmentunits in conjunction with pertinent This refers to your request for our opinion on whether the
agencies of government.C. There being no reclassification, it is clear Department of Agrarian Reform (DAR) can grant applications for
that said proclamations/issuances, assuming [these] took effect exemption involving irrigated and irrigable lands, i.e., those
before June 15, 1988,could not supply a basis for exemption of the classified as not subject to and non-negotiable for conversion,

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reclassified into non-agricultural uses prior to June 15, 1988, the date Section 22 of Republic Act No. 9700, or the "CARPER
Republic Act No. 6657, or the Comprehensive Agrarian Reform Law (Comprehensive Agrarian Reform Program with Extension and
(CARL), took effect. Reforms) Law. TSacAE
You state that pursuant to this Department's Opinion (No. 44, s. It is, however, your position that the aforesaid DOJ Opinion No. 181,
1990) to the effect that the authority of DAR to act upon applications s. 1990 and Supreme Court decision should apply only to the
for conversion of agricultural lands to non-agricultural uses may be Lungsod Silangan Townsite Reservation and to highly urbanized
exercised on or after June 15, 1988, previous DAR Administrations areas, but not to other areas in the country, especially to irrigated and
had adopted the position that all agricultural lands already classified irrigable prime agricultural lands. You further assert that the
as commercial, industrial, or residential before said date no longer reclassification of these irrigated or irrigable prime agricultural lands
need a conversion clearance but only an exemption clearance from into non-agricultural uses prior to June 15, 1988 partakes the nature
DAR. of conversion. Therefore, DAR's approval of any request for
You also say that in another Opinion (No. 181, s. 1990) of this exemption involving such lands would not only be unconstitutional
Department and in the Supreme Court ruling in Natalia Realty vs. but would also be contrary to the two (2) presidential issuances
DAR, 225 SCRA 278, it was pointed out that "agricultural lands aforementioned as well as Section 22 of R.A. No. 9700. In view
coverable under the CARP do not include in its contemplation thereof, you now elevated the matter to us for our opinion.
agricultural lands classified as commercial, industrial, or residential We agree.
prior to 15 June 1988 for they ceased to be agricultural upon In your cited case of Natalia Realty vs. DAR, the Supreme Court
approval of their classification/reclassification as could be inferred explained the extent of the coverage of CARL, thus:
from the definition of Agricultural Land in Section 3 (c) of R.A. No. ". . . Section 4 of R.A. 6657 provides that the CARL shall cover,
6657." regardless of tenurial arrangement and commodity produced, all
Further, you aver that the non-negotiability for conversion of public and private agricultural lands. As to what constitutes
irrigated and irrigable lands was stressed in Administrative Order 'agricultural land,' it is referred to as 'land devoted to agricultural
No. 20, s. 1992, reiterated in Administrative Order No. 363, s. 1997, activity' as defined in this Act and not classified as mineral, forest,
both of the Office of the President (OP), and underscored anew in residential, commercial or industrial land. The deliberations of the

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Constitutional Commission confirm limitation. 'Agricultural lands' 'Section 65. Conversion of Lands. After the lapse of five (5)
are only those lands which are arable are suitable agricultural lands" years from its award, when the land ceases to be economically
and do not include commercial, industrial, and residential lands. feasible and sound for agricultural purposes, or the locality has
xxx xxx xxx become urbanized and the land will have a greater economic value
"Indeed, lands not devoted to agricultural activity are outside the for residential, commercial or industrial purposes, the DAR, upon
coverage of CARL. These include lands previously converted to application of the beneficiary or the landowner with respect only to
non-agricultural uses prior to the effectivity of CARL by other his/her retained area which is tenanted, with due notice to the
government agencies other than respondent DAR." 1 affected parties, and subject to existing laws, may authorize the
Moreover, Section 65 of R.A. No. 6657, as amended, provides: reclassification or conversion of the land: Provided, That if the
"Section 65. Conversion of Lands. After the lapse of five (5) applicant is a beneficiary under the agrarian laws and the land sought
years from its award, when the land ceases to be economically to be converted is the land awarded to his/her or any portion thereof,
feasible and sound for agricultural purposes, or the locality has the applicant, after the conversion is granted, shall invest at least ten
become urbanized and the land will have a greater economic value percent (10%) of the proceeds coming from the conversion in
for residential, commercial or industrial purposes, the DAR upon government securities: Provided, further, That the applicant upon
application of the beneficiary or the landowner with respect only to conversion shall fully pay the price of the land: Provided,
his/her retained area which is tenanted, with due notice to the furthermore, That irrigated and irrigable lands shall not be subject to
affected parties, and subject to existing laws, may authorize the conversion: Provided, finally, That the National Irrigation
reclassification or conversion of the land: Provided, That the Administration shall submit a consolidated data on the location
beneficiary shall have fully paid his obligation." nationwide of all irrigable lands within one (1) year from the
Section 22 of R.A. No. 9700, amending the above-quoted legal effectivity of this Act." 2 DTEHIA
provision, pertinently reads: Evidently, and as stated by the Supreme Court in the aforecited case,
"Section 22. Section 65 of Republic Act No. 6657, as amended, is reiterating an Opinion of this Department, lands previously
hereby further amended to read as follows: reclassified or converted from agricultural lands to non-agricultural
uses prior to the enactment of the CARL fall beyond the coverage

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thereof. For the same reason, and in view of Section 22 of R.A. No. The provisions of Section 65, as amended, are clear and categorical
9700 amending Section 65 of the CARL, the only logical conclusion enough that interpretation has no room. 4 Thus, irrespective of
is that applications for exemption involving irrigated and irrigable whether the reclassification of irrigated and irrigable prime
lands, i.e., those classified as not subject to and non-negotiable for agricultural lands was done before or after the effectivity of the
conversion, but subsequently reclassified into non-agricultural uses CARL, the terms of the present Section 65 leave no room for doubt
prior to June 15, 1988, can no longer be granted. that the legislative intent is to ban any conversion of such
This conclusion finds support in the records of the congressional agricultural lands. Since exemption, for all intent and purposes,
deliberations on House Bill No. 40777, which gave birth to R.A. No. under these circumstances has essentially the same legal effect as
9700, in which not only was the limitation on what agricultural lands conversion, that is, removing the lands from their potential
can be covered by the CARL acknowledged, but the policy agricultural use, the DAR may deny any application for exemption
prohibiting conversion of all irrigated and irrigable farmlands was involving irrigated or irrigable lands.
also expressly made absolute and permanent. 3 Please be guided accordingly.
To expand the wisdom of DOJ Opinion No. 181, Series of 1990 and Very truly yours,
the Court ruling in Natalia Realty vs. DAR to the effect that
agricultural lands coverable under CARP do not include in its (SGD.) LEILA M. DE LIMA
contemplation agricultural lands classified as commercial, industrial, Secretary
or residential prior to 15 June 1988 for they ceased to be agricultural
upon the approval of their classification/reclassification as could be
inferred from the definition of Agricultural Land in Section 3 (c) of
R.A. No. 6657, as amended, would be an over-generalization and
negates the state policy against conversion of irrigated and irrigable
lands. Thus, DOJ Opinion No. 181, Series of 1990 and the Supreme
Court Ruling in Natalia Realty vs. DAR should not be made to
generally apply to irrigated and irrigable prime agricultural lands.

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