ART XIII SEC 4: AGRARIAN AND NATURAL
RESOURCES REFORM
Section 4. The State shall, by law, undertake
an agrarian reform program founded on the
right of farmers and regular farmworkers who
are landless, to own directly or collectively the
lands they till or, in the case of other
farmworkers, to receive a just share of the
fruits thereof. To this end, the State shall
encourage and undertake the just distribution
of all agricultural lands, subject to such
priorities and reasonable retention limits as the
Congress may prescribe, taking into account
ecological, developmental, or equity
considerations, and subject to the payment of
just compensation. In determining retention
limits, the State shall respect the right of small
landowners. The State shall further provide
incentives for voluntary land-sharing.
ART III SEC 9: BILL OF RIGHTS
Private property shall not be taken for public
use without just compensation.
REPUBLIC ACT NO. 6657
AN ACT INSTITUTING A COMPREHENSIVE
AGRARIAN REFORM PROGRAM TO PROMOTE
SOCIAL JUSTICE AND INDUSTRIALIZATION,
PROVIDING THE MECHANISM FOR ITS
IMPLEMENTATION, AND FOR OTHER
PURPOSES
CHAPTER I
Preliminary Chapter
SECTION 1. Title. This Act shall be
known as the Comprehensive Agrarian Reform
Law of 1988.
SECTION 2. Declaration of Principles and
Policies. It is the policy of the State to
pursue a Comprehensive Agrarian Reform
Program (CARP). The welfare of the landless
farmers and farmworkers will receive the
highest consideration to promote social justice
and to move the nation toward sound rural
development and industrialization, and the
establishment of owner cultivatorship of
economic-size farms as the basis of Philippine
agriculture. aisa dc
To this end, a more equitable distribution and
ownership of land, with due regard to the
rights of landowners to just compensation and
to the ecological needs of the nation, shall be
undertaken to provide farmers and
farmworkers with the opportunity to enhance
their dignity and improve the quality of their
lives through greater productivity of
agricultural lands.
The agrarian reform program is founded on the
right of farmers and regular farmworkers, who
are landless, to own directly or collectively the
lands they till or, in the case of other farm
workers, to receive a just share of the fruits
thereof. To this end, the State shall encourage
and undertake the just distribution of all
agricultural lands, subject to the priorities and
retention limits set forth in this Act, having
taken into account ecological, developmental,
and equity considerations, and subject to the
payment of just compensation. The State shall
respect the right of small landowners, and shall
provide incentives for voluntary land-sharing.
The State shall recognize the right of farmers,
farmworkers and landowners, as well as
cooperatives and other independent farmers'
organizations, to participate in the planning,
organization, and management of the
program, and shall provide support to
agriculture through appropriate technology and
research, and adequate financial production,
marketing and other support services.
The State shall apply the principles of agrarian
reform, or stewardship, whenever applicable,
in accordance with law, in the disposition or
utilization of other natural resources, including
lands of the public domain, under lease or
concession, suitable to agriculture, subject to
prior rights, homestead rights of small settlers
and the rights of indigenous communities to
their ancestral lands.
The State may resettle landless farmers and
farmworkers in its own agricultural estates,
which shall be distributed to them in the
manner provided by law.
By means of appropriate incentives, the State
shall encourage the formation and
maintenance of economic-size family farms to
be constituted by individual beneficiaries and
small landowners.
The State shall protect the rights of
subsistence fishermen, especially of local
communities, to the preferential use of
communal marine and fishing resources, both
inland and offshore. It shall provide support to
such fishermen through appropriate technology
and research, adequate financial, production
and marketing assistance and other services.
The State shall also protect, develop and
conserve such resources. The protection shall
extend to offshore fishing grounds of
subsistence fishermen against foreign
intrusion. Fishworkers shall receive a just
share from their labor in the utilization of
marine and fishing resources.
The State shall be guided by the principles that
land has a social function and land ownership
has a social responsibility. Owners of
agricultural lands have the obligation to
cultivate directly or through labor
administration the lands they own and thereby
make the land productive.
The State shall provide incentives to
landowners to invest the proceeds of the
agrarian reform program to promote
industrialization, employment and privatization
of public sector enterprises. Financial
instruments used as payment for lands shall
contain features that shall enhance
negotiability and acceptability in the
marketplace.
The State may lease undeveloped lands of the
public domain to qualified entities for the
development of capital intensive farms, and
traditional and pioneering crops especially
those for exports subject to the prior rights of
the beneficiaries under this Act.
SECTION 3. Definitions. For the purpose
of this Act, unless the context indicates
otherwise:
(a) Agrarian Reform means the
redistribution of lands, regardless of crops or
fruits produced to farmers and regular
farmworkers who are landless, irrespective of
tenurial arrangement, to include the totality of
factors and support services designed to lift
the economic status of the beneficiaries and all
other arrangements alternative to the physical
redistribution of lands, such as production or
profit-sharing, labor administration, and the
distribution of shares of stocks, which will allow
beneficiaries to receive a just share of the
fruits of the lands they work. cdasia
(b) Agriculture, Agricultural Enterprise or
Agricultural Activity means the cultivation of
the soil, planting of crops, growing of fruit
trees, raising of livestock, poultry or fish,
including the harvesting of such farm products,
and other farm activities and practices
performed by a farmer in conjunction with
such farming operations done by persons
whether natural or juridical.
(c) Agricultural Land refers to land
devoted to agricultural activity as defined in
this Act and not classified as mineral, forest,
residential, commercial or industrial land.
(d) Agrarian Dispute refers to any
controversy relating to tenurial arrangements,
whether leasehold, tenancy, stewardship or
otherwise, over lands devoted to agriculture,
including disputes concerning farmworkers'
associations or representation of persons in
negotiating, fixing, maintaining, changing, or
seeking to arrange terms or conditions of such
tenurial arrangements.
It includes any controversy relating to
compensation of lands acquired under this Act
and other terms and conditions of transfer of
ownership from landowners to farmworkers,
tenants and other agrarian reform
beneficiaries, whether the disputants stand in
the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor
and lessee.
(e) Idle or Abandoned Land refers to any
agricultural land not cultivated, tilled or
developed to produce any crop nor devoted to
any specific economic purpose continuously for
a period of three (3) years immediately prior to
the receipt of notice of acquisition by the
government as provided under this Act, but
does not include land that has become
permanently or regularly devoted to non-
agricultural purposes. It does not include land
which has become unproductive by reason of
force majeure or any other fortuitous event,
provided that prior to such event, such land
was previously used for agricultural or other
economic purpose.
(f) Farmer refers to a natural person
whose primary livelihood is cultivation of land
or the production of agricultural crops, either
by himself, or primarily with the assistance of
his immediate farm household, whether the
land is owned by him, or by another person
under a leasehold or share tenancy agreement
or arrangement with the owner thereof.
(g) Farmworker is a natural person who
renders services for value as an employee or
laborer in an agricultural enterprise or farm
regardless of whether his compensation is paid
on a daily, weekly, monthly or "pakyaw" basis.
The term includes an individual whose work
has ceased as a consequence of, or in
connection with, a pending agrarian dispute
and who has not obtained a substantially
equivalent and regular farm employment.
(h) Regular Farmworker is a natural
person who is employed on a permanent basis
by an agricultural enterprise or farm.
(i) Seasonal Farmworker is a natural
person who is employed on a recurrent,
periodic or intermittent basis by an agricultural
enterprise or farm, whether as a permanent or
a non-permanent laborer, such as "dumaan",
"sacada", and the like.
(j) Other Farmworker is a farmworker who
does not fall under paragraphs (g), (h) and (i).
(k) Cooperatives shall refer to
organizations composed primarily of small
agricultural producers, farmers, farmworkers,
or other agrarian reform beneficiaries who
voluntarily organize themselves for the
purpose of pooling land, human, technological,
financial or other economic resources, and
operated on the principle of one member, one
vote. A juridical person may be a member of a
cooperative, with the same rights and duties as
a natural person.
CHAPTER II
Coverage
SECTION 4. Scope. The Comprehensive
Agrarian Reform Law of 1988 shall cover,
regardless of tenurial arrangement and
commodity produced, all public and private
agricultural lands, as provided in Proclamation
No. 131 and Executive Order No. 229,
including other lands of the public domain
suitable for agriculture.
More specifically, the following lands are
covered by the Comprehensive Agrarian
Reform Program:
(a) All alienable and disposable lands of
the public domain devoted to or suitable for
agriculture. No reclassification of forest or
mineral lands to agricultural lands shall be
undertaken after the approval of this Act until
Congress, taking into account ecological,
developmental and equity considerations, shall
have determined by law, the specific limits of
the public domain.
(b) All lands of the public domain in excess
of the specific limits as determined by
Congress in the preceding paragraph; cda
(c) All other lands owned by the
Government devoted to or suitable for
agriculture; and
(d) All private lands devoted to or suitable
for agriculture regardless of the agricultural
products raised or that can be raised thereon.
SECTION 5. Schedule of Implementation.
The distribution of all lands covered by this Act
shall be implemented immediately and
completed within ten (10) years from the
effectivity thereof.
SECTION 6. Retention Limits. Except as
otherwise provided in this Act, no person may
own or retain, directly or indirectly, any public
or private agricultural land, the size of which
shall vary according to factors governing a
viable family-size farm, such as commodity
produced, terrain, infrastructure, and soil
fertility as determined by the Presidential
Agrarian Reform Council (PARC) created
hereunder, but in no case shall retention by
the landowner exceed five (5) hectares. Three
(3) hectares may be awarded to each child of
the landowner, subject to the following
qualifications: (1) that he is at least fifteen
(15) years of age; and (2) that he is actually
tilling the land or directly managing the farm:
Provided, That landowners whose lands have
been covered by Presidential Decree No. 27
shall be allowed to keep the areas originally
retained by them thereunder: Provided,
further, That original homestead grantees or
their direct compulsory heirs who still own the
original homestead at the time of the approval
of this Act shall retain the same areas as long
as they continue to cultivate said homestead.
The right to choose the area to be retained,
which shall be compact or contiguous, shall
pertain to the landowner: Provided, however,
That in case the area selected for retention by
the landowner is tenanted, the tenant shall
have the option to choose whether to remain
therein or be a beneficiary in the same or
another agricultural land with similar or
comparable features. In case the tenant
chooses to remain in the retained area, he
shall be considered a leaseholder and shall lose
his right to be a beneficiary under this Act. In
case the tenant chooses to be a beneficiary in
another agricultural land, he loses his right as
a leaseholder to the land retained by the
landowner. The tenant must exercise this
option within a period of one (1) year from the
time the landowner manifests his choice of the
area for retention.
In all cases, the security of tenure of the
farmers or farmworkers on the land prior to
the approval of this Act shall be respected.
Upon the effectivity of this Act, any sale,
disposition, lease, management, contract or
transfer of possession of private lands
executed by the original landowner in violation
of this Act shall be null and void: Provided,
however, That those executed prior to this Act
shall be valid only when registered with the
Register of Deeds within a period of three (3)
months after the effectivity of this Act.
Thereafter, all Registers of Deeds shall inform
the Department of Agrarian Reform (DAR)
within thirty (30) days of any transaction
involving agricultural lands in excess of five (5)
hectares.
SECTION 7. Priorities. The Department of
Agrarian Reform (DAR) in coordination with the
Presidential Agrarian Reform Council (PARC)
shall plan and program the acquisition and
distribution of all agricultural lands through a
period of ten (10) years from the effectivity of
this Act. Lands shall be acquired and
distributed as follows:
Phase One: Rice and corn lands under
Presidential Decree No. 27; all idle or
abandoned lands; all private lands voluntarily
offered by the owners for agrarian reform; all
lands foreclosed by government financial
institutions; all lands acquired by the
Presidential Commission on Good Government
(PCGG); and all other lands owned by the
government devoted to or suitable for
agriculture, which shall be acquired and
distributed immediately upon the effectivity of
this Act, with the implementation to be
completed within a period of not more than
four (4) years;
Phase Two: All alienable and disposable
public agricultural lands; all arable public
agricultural lands under agro-forest, pasture
and agricultural leases already cultivated and
planted to crops in accordance with Section 6,
Article XIII of the Constitution; all public
agricultural lands which are to be opened for
new development and resettlement; and all
private agricultural lands in excess of fifty (50)
hectares, insofar as the excess hectarage is
concerned, to implement principally the rights
of farmers and regular farmworkers, who are
the landless, to own directly or collectively the
lands they till, which shall be distributed
immediately upon the effectivity of this Act,
with the implementation to be completed
within a period of not more than four (4)
years. cdasia
Phase Three: All other private agricultural
lands commencing with large landholdings and
proceeding to medium and small landholdings
under the following schedule:
(a) Landholdings above twenty-four (24)
hectares up to fifty (50) hectares, to begin on
the fourth (4th) year from the effectivity of this
Act and to be completed within three (3)
years; and
(b) Landholdings from the retention limit
up to twenty-four (24) hectares, to begin on
the sixth (6th) year from the effectivity of this
Act and to be completed within four (4) years;
to implement principally the right of farmers
and regular farmworkers who are landless, to
own directly or collectively the lands they till.
The schedule of acquisition and redistribution
of all agricultural lands covered by this
program shall be made in accordance with the
above order of priority, which shall be provided
in the implementing rules to be prepared by
the Presidential Agrarian Reform Council
(PARC), taking into consideration the following:
the need to distribute land to the tillers at the
earliest practicable time; the need to enhance
agricultural productivity; and the availability of
funds and resources to implement and support
the program.
In any case, the PARC, upon recommendation
by the Provincial Agrarian Reform Coordinating
Committee (PARCCOM), may declare certain
provinces or regions as priority land reform
areas, in which case the acquisition and
distribution of private agricultural lands therein
may be implemented ahead of the above
schedules.
In effecting the transfer within these
guidelines, priority must be given to lands that
are tenanted.
The PARC shall establish guidelines to
implement the above priorities and distribution
scheme, including the determination of who
are qualified beneficiaries: Provided, That an
owner-tiller may be a beneficiary of the land he
does not own but is actually cultivating to the
extent of the difference between the area of
the land he owns and the award ceiling of
three (3) hectares.
SECTION 8. Multinational Corporations.
All lands of the public domain leased, held or
possessed by multinational corporations or
associations, and other lands owned by the
government or by government-owned or
controlled corporations, associations,
institutions, or entities, devoted to existing and
operational agri-business or agro-industrial
enterprises, operated by multinational
corporations and associations, shall be
programmed for acquisition and distribution
immediately upon the effectivity of this Act,
with the implementation to be completed
within three (3) years.
Lands covered by the paragraph immediately
preceding, under lease, management, grower
or service contracts, and the like, shall be
disposed of as follows:
(a) Lease, management, grower or service
contracts covering such lands covering an
aggregate area in excess of 1,000 hectares,
leased or held by foreign individuals in excess
of 500 hectares are deemed amended to
conform with the limits set forth in Section 3 of
Article XII of the Constitution.
(b) Contracts covering areas not in excess
of 1,000 hectares in the case of such
corporations and associations, and 500
hectares, in the case of such individuals, shall
be allowed to continue under their original
terms and conditions but not beyond August
29, 1992, or their valid termination, whichever
comes sooner, after which, such agreements
shall continue only when confirmed by the
appropriate government agency. Such
contracts shall likewise continue even after the
land has been transferred to beneficiaries or
awardees thereof, which transfer shall be
immediately commenced and implemented,
and completed within the period of three (3)
years mentioned in the first paragraph hereof.
(c) In no case will such leases and other
agreements now being implemented extend
beyond August 29, 1992, when all lands
subject hereof shall have been distributed
completely to qualified beneficiaries or
awardees.
Such agreements can continue thereafter only
under a new contract between the government
or qualified beneficiaries or awardees, on the
one hand, and said enterprises, on the other.
Lands leased, held or possessed by
multinational corporations, owned by private
individuals and private non-governmental
corporations, associations, institutions and
entities, citizens of the Philippines, shall be
subject to immediate compulsory acquisition
and distribution upon the expiration of the
applicable lease, management, grower or
service contract in effect as of August 29,
1987, or otherwise, upon its valid termination,
whichever comes sooner, but not later than
after ten (10) years following the effectivity of
this Act. However during the said period of
effectivity, the government shall take steps to
acquire these lands for immediate distribution
thereafter.
In general, lands shall be distributed directly to
the individual worker-beneficiaries. In case it is
not economically feasible and sound to divide
the land, then they shall form a workers'
cooperative or association which will deal with
the corporation or business association or any
other proper party for the purpose of entering
into a lease or growers agreement and for all
other legitimate purposes. Until a new
agreement is entered into by and between the
workers' cooperative or association and the
corporation or business association or any
other proper party, any agreement existing at
the time this Act takes effect between the
former and the previous landowner shall be
respected by both the workers' cooperative or
association and the corporation, business,
association or such other proper party. In no
case shall the implementation or application of
this Act justify or result in the reduction of
status or diminution of any benefits received or
enjoyed by the worker-beneficiaries, or in
which they may have a vested right, at the
time this Act becomes effective.
The provisions of Section 32 of this Act, with
regard to production and income-sharing shall
apply to farms operated by multinational
corporations.
During the transition period, the new owners
shall be assisted in their efforts to learn
modern technology in production. Enterprises
which show a willingness and commitment and
good-faith efforts to impart voluntarily such
advanced technology will be given preferential
treatment where feasible.
In no case shall a foreign corporation,
association, entity or individual enjoy any
rights or privileges better than those enjoyed
by a domestic corporation, association, entity
or individual. cd i
SECTION 9. Ancestral Lands. For
purposes of this Act, ancestral lands of each
indigenous cultural community shall include,
but not be limited to, lands in the actual,
continuous and open possession and
occupation of the community and its members:
Provided, That the Torrens System shall be
respected.
The right of these communities to their
ancestral lands shall be protected to ensure
their economic, social and cultural well-being.
In line with the principles of self-determination
and autonomy, the systems of land ownership,
land use, and the modes of settling land
disputes of all these communities must be
recognized and respected.
Any provision of law to the contrary
notwithstanding, the PARC may suspend the
implementation of this Act with respect to
ancestral lands for the purpose of identifying
and delineating such lands: Provided, That in
the autonomous regions, the respective
legislatures may enact their own laws on
ancestral domain subject to the provisions of
the Constitution and the principles enunciated
in this Act and other national laws.
SECTION 10. Exemptions and Exclusions.
Lands actually, directly and exclusively used
and found to be necessary for parks, wildlife,
forest reserves, reforestation, fish sanctuaries
and breeding grounds, watersheds, and
mangroves, national defense, school sites and
campuses including experimental farm stations
operated by public or private schools for
educational purposes, seeds and seedlings
research and pilot production centers, church
sites and convents appurtenant thereto,
mosque sites and Islamic centers appurtenant
thereto, communal burial grounds and
cemeteries, penal colonies and penal farms
actually worked by the inmates, government
and private research and quarantine centers
and all lands with eighteen percent (18%)
slope and over, except those already
developed shall be exempt from the coverage
of this Act.
SECTION 11. Commercial Farming.
Commercial farms, which are private
agricultural lands devoted to commercial
livestock, poultry and swine raising, and
aquaculture including saltbeds, fishponds and
prawn ponds, fruit farms, orchards, vegetable
and cut-flower farms, and cacao, coffee and
rubber plantations, shall be subject to
immediate compulsory acquisition and
distribution after (10) years from the effectivity
of this Act. In the case of new farms, the ten-
year period shall begin from the first year of
commercial production and operation, as
determined by the DAR. During the ten-year
period, the government shall initiate the steps
necessary to acquire these lands, upon
payment of just compensation for the land and
the improvements thereon, preferably in favor
of organized cooperatives or associations,
which shall thereafter manage the said lands
for the worker-beneficiaries.
If the DAR determines that the purposes for
which this deferment is granted no longer
exist, such areas shall automatically be subject
to redistribution.
The provisions of Section 32 of this Act, with
regard to production- and income-sharing,
shall apply to commercial farms.
CHAPTER III
Improvement of Tenurial and Labor Relations
SECTION 12. Determination of Lease
Rentals. In order to protect and improve the
tenurial and economic status of the farmers in
tenanted lands under the retention limit and
lands not yet acquired under this Act, the DAR
is mandated to determine and fix immediately
the lease rentals thereof in accordance with
Section 34 of Republic Act No. 3844, as
amended: Provided, That the DAR shall
immediately and periodically review and adjust
the rental structure for different crops,
including rice and corn, or different regions in
order to improve progressively the conditions
of the farmer, tenant or lessee.
SECTION 13. Production-Sharing Plan.
Any enterprise adopting the scheme provided
for in Section 32 or operating under a
production venture, lease, management
contract or other similar arrangement and any
farm covered by Sections 8 and 11 hereof is
hereby mandated to execute within ninety (90)
days from the effectivity of this Act, a
production-sharing plan, under guidelines
prescribed by the appropriate government
agency.
Nothing herein shall be construed to sanction
the diminution of any benefits such as salaries,
bonuses, leaves and working conditions
granted to the employee-beneficiaries under
existing laws, agreements, and voluntary
practice by the enterprise, nor shall the
enterprise and its employee-beneficiaries be
prevented from entering into any agreement
with terms more favorable to the latter.
CHAPTER IV
Registration
SECTION 14. Registration of Landowners.
Within one hundred eighty (180) days from the
effectivity of this Act, all persons, natural or
juridical, including government entities, that
own or claim to own agricultural lands,
whether in their names or in the name of
others, except those who have already
registered pursuant to Executive Order No.
229, who shall be entitled to such incentives as
may be provided for the PARC, shall file a
sworn statement in the proper assessor's office
in the form to be prescribed by the DAR,
stating the following information:
(a) the description and area of the
property;
(b) the average gross income from the
property for at least three (3) years;
(c) the names of all tenants and
farmworkers therein; cda
(d) the crops planted in the property and
the area covered by each crop as of June 1,
1987;
(e) the terms of mortgages, leases, and
management contracts subsisting as of June 1,
1987, and
(f) the latest declared market value of the
land as determined by the city or provincial
assessor.
SECTION 15. Registration of Beneficiaries.
The DAR in coordination with the Barangay
Agrarian Reform Committee (BARC) as
organized in this Act, shall register all
agricultural lessees, tenants and farmworkers
who are qualified to be beneficiaries of the
CARP. These potential beneficiaries with the
assistance of the BARC and the DAR shall
provide the following data:
(a) names and members of their
immediate farm household;
(b) owners or administrators of the lands
they work on and the length of tenurial
relationship;
(c) location and area of the land they
work;
(d) crops planted; and
(e) their share in the harvest or amount of
rental paid or wages received.
A copy of the registry or list of all potential
CARP beneficiaries in the barangay shall be
posted in the barangay hall, school or other
public buildings in the barangay where it shall
be open to inspection by the public at all
reasonable hours.
CHAPTER V
Land Acquisition
SECTION 16. Procedure for Acquisition of
Private Lands. For purposes of acquisition of
private lands, the following procedures shall be
followed:
(a) After having identified the land, the
landowners and the beneficiaries, the DAR
shall send its notice to acquire the land to the
owners thereof, by personal delivery or
registered mail, and post the same in a
conspicuous place in the municipal building and
barangay hall of the place where the property
is located. Said notice shall contain the offer of
the DAR to pay a corresponding value in
accordance with the valuation set forth in
Sections 17, 18, and other pertinent provisions
hereof.
(b) Within thirty (30) days from the date
of receipt of written notice by personal delivery
or registered mail, the landowner, his
administrator or representative shall inform the
DAR of his acceptance or rejection of the offer.
(c) If the landowner accepts the offer of
the DAR, the Land Bank of the Philippines
(LBP) shall pay the landowner the purchase
price of the land within thirty (30) days after
he executes and delivers a deed of transfer in
favor of the Government and surrenders the
Certificate of Title and other muniments of
title.
(d) In case of rejection or failure to reply,
the DAR shall conduct summary administrative
proceedings to determine the compensation for
the land by requiring the landowner, the LBP
and other interested parties to submit evidence
as to the just compensation for the land, within
fifteen (15) days from the receipt of the notice.
After the expiration of the above period, the
matter is deemed submitted for decision. The
DAR shall decide the case within thirty (30)
days after it is submitted for decision.
(e) Upon receipt by the landowner of the
corresponding payment or, in case of rejection
or no response from the landowner, upon the
deposit with an accessible bank designated by
the DAR of the compensation in cash or in LBP
bonds in accordance with this Act, the DAR
shall take immediate possession of the land
and shall request the proper Register of Deeds
to issue a Transfer Certificate of Title (TCT) in
the name of the Republic of the Philippines. as the excess hectarage is
The DAR shall thereafter proceed with the be paid in government
redistribution of the land to the qualified
beneficiaries. concerned. financial
instruments
(f) Any party who disagrees with the
decision may bring the matter to the court of negotiable at any time.
proper jurisdiction for final determination of
just compensation.
(b) For lands above Thirty
CHAPTER VI
percent (30%) cash,
Compensation
twenty-four (24) hectares
SECTION 17. Determination of Just the balance to be paid in
Compensation. In determining just
and up to fifty (50) hectares.
compensation, the cost of acquisition of the
government financial
land, the current value of like properties, its
nature, actual use and income, the sworn
instruments negotiable
valuation by the owner, the tax declarations,
and the assessment made by government at any time.
assessors shall be considered. The social and
economic benefits contributed by the farmers
and the farmworkers and by the Government
to the property as well as the non-payment of (c) For lands twenty-four Thirty-
taxes or loans secured from any government five percent (35%)
financing institution on the said land shall be
(24) hectares and below.
considered as additional factors to determine
cash, the balance to be paid
its valuation.
in government financial
SECTION 18. Valuation and Mode of
Compensation. The LBP shall compensate
instruments negotiable
the landowner in such amounts as may be
at
agreed upon by the landowner and the DAR
and the LBP, in accordance with the criteria any time.
provided for in Sections 16 and 17 and other
pertinent provisions hereof, or as may be (2) Shares of stock in government-owned
finally determined by the court, as the just or controlled corporations, LBP preferred
compensation for the land. shares, physical assets or other qualified
investments in accordance with guidelines set
The compensation shall be paid in one of the by the PARC; cdt
following modes, at the option of the
landowner: (3) Tax credits which can be used against
any tax liability;
(1) Cash payment, under the following
terms and conditions; (4) LBP bonds, which shall have the
following features:
(a) For lands above
Twenty-five percent (a) Market interest rates aligned with 91-
day treasury bill rates. Ten percent (10%) of
fifty (50) hectares, insofar the face value of the bonds shall mature every
(25%) cash, the balance to year from the date of issuance until the tenth
(10th) year: Provided, That should the
landowner choose to forego the cash portion,
whether in full or in part, he shall be paid
correspondingly in LBP bonds;
(b) Transferability and negotiability. Such
LBP bonds may be used by the landowner, his
successors in interest or his assigns, up to the
amount of their face value, for any of the
following:
(i) Acquisition of land or other real
properties of the government, including assets
under the Asset Privatization Program and
other assets foreclosed by government
financial institutions in the same province or
region where the lands for which the bonds
were paid are situated;
(ii) Acquisition of shares of stock of
government-owned or controlled corporations
or shares of stocks owned by the government
in private corporations;
(iii) Substitution for surety or bail bonds for
the provisional release of accused persons, or
performance bonds;
(iv) Security for loans with any government
financial institution, provided the proceeds of
the loans shall be invested in an economic
enterprise, preferably in a small- and medium-
scale industry, in the same province or region
as the land for which the bonds are paid;
(v) Payment for various taxes and fees to
government; Provided, That the use of these
bonds for these purposes will be limited to a
certain percentage of the outstanding balance
of the financial instruments: Provided, further,
That the PARC shall determine the percentage
mentioned above;
(vi) Payment for tuition fees of the
immediate family of the original bondholder in
government universities, colleges, trade
schools, and other institutions;
(vii) Payment for fees of the immediate
family of the original bondholder in
government hospitals; and
(viii) Such other uses as the PARC may from
time to time allow.
In case of extraordinary inflation, the PARC
shall take appropriate measures to protect the
economy.
SECTION 19. Incentives for Voluntary Offers
for Sale. Landowners, other than banks and
other financial institutions, who voluntarily
offer their lands for sale shall be entitled to an
additional five percent (5%) cash payment.
SECTION 20. Voluntary Land Transfer.
Landowners of agricultural lands subject to
acquisition under this Act may enter into a
voluntary arrangement for direct transfer of
their lands to qualified beneficiaries subject to
the following guidelines:
(a) All notices for voluntary land transfer
must be submitted to the DAR within the first
year of the implementation of the CARP.
Negotiations between the landowners and
qualified beneficiaries covering any voluntary
land transfer which remain unresolved after
one (1) year shall not be recognized and such
land shall instead be acquired by the
government and transferred pursuant to this
Act.
(b) The terms and conditions of such
transfer shall not be less favorable to the
transferee than those of the government's
standing offer to purchase from the landowner
and to resell to the beneficiaries, if such offers
have been made and are fully known to both
parties.
(c) The voluntary agreement shall include
sanctions for non-compliance by either party
and shall be duly recorded and its
implementation monitored by the DAR.
SECTION 21. Payment of Compensation by
Beneficiaries Under Voluntary Land Transfer.
Direct payments in cash or in kind may be
made by the farmer-beneficiary to the
landowner under terms to be mutually agreed
upon by both parties, which shall be binding
upon them, upon registration with and
approval by the DAR. Said approval shall be
considered given, unless notice of disapproval
is received by the farmer-beneficiary within
thirty (30) days from the date of registration.
In the event they cannot agree on the price of
land, the procedure for compulsory acquisition
as provided in Section 16 shall apply. The LBP
shall extend financing to the beneficiaries for
purposes of acquiring the land.
CHAPTER VII
Land Redistribution
SECTION 22. Qualified Beneficiaries. The
lands covered by the CARP shall be distributed
as much as possible to landless residents of
the same barangay, or in the absence thereof,
landless residents of the same municipality in
the following order of priority: cdtai
(a) agricultural lessees and share tenants;
(b) regular farmworkers;
(c) seasonal farmworkers;
(d) other farmworkers;
(e) actual tillers or occupants of public
lands;
(f) collectives or cooperatives of the above
beneficiaries; and
(g) others directly working on the land.
Provided, however, That the children of
landowners who are qualified under Section 6
of this Act shall be given preference in the
distribution of the land of their parents: and
Provided, further, That actual tenant-tillers in
the landholdings shall not be ejected or
removed therefrom.
Beneficiaries under Presidential Decree No. 27
who have culpably sold, disposed of, or
abandoned their land are disqualified to
become beneficiaries under this Program.
A basic qualification of a beneficiary shall be
his willingness, aptitude, and ability to
cultivate and make the land as productive as
possible. The DAR shall adopt a system of
monitoring the record or performance of each
beneficiary, so that any beneficiary guilty of
negligence or misuse of the land or any
support extended to him shall forfeit his right
to continue as such beneficiary. The DAR shall
submit periodic reports on the performance of
the beneficiaries to the PARC.
If, due to the landowner's retention rights or to
the number of tenants, lessees, or workers on
the land, there is not enough land to
accommodate any or some of them, they may
be granted ownership of other lands available
for distribution under this Act, at the option of
the beneficiaries.
Farmers already in place and those not
accommodated in the distribution of privately-
owned lands will be given preferential rights in
the distribution of lands from the public
domain.
SECTION 23. Distribution Limit. No
qualified beneficiary may own more than three
(3) hectares of agricultural land.
SECTION 24. Award to Beneficiaries. The
rights and responsibilities of the beneficiary
shall commence from the time the DAR makes
an award of the land to him, which award shall
be completed within one hundred eighty (180)
days from the time the DAR takes actual
possession of the land. Ownership of the
beneficiary shall be evidenced by a Certificate
of Land Ownership Award, which shall contain
the restrictions and conditions provided for in
this Act, and shall be recorded in the Register
of Deeds concerned and annotated on the
Certificate of Title.
SECTION 25. Award Ceilings for
Beneficiaries. Beneficiaries shall be awarded
an area not exceeding three (3) hectares which
may cover a contiguous tract of land or several
parcels of land cumulated up to the prescribed
award limits.
For purposes of this Act, a landless beneficiary
is one who owns less than three (3) hectares
of agricultural land.
The beneficiaries may opt for collective
ownership, such as co-ownership or farmers
cooperative or some other form of collective
organization: Provided, That the total area that
may be awarded shall not exceed the total
number of co-owners or member of the
cooperative or collective organization
multiplied by the award limit above prescribed,
except in meritorious cases as determined by
the PARC. Title to the property shall be issued
in the name of the co-owners or the
cooperative or collective organization as the
case may be.
SECTION 26. Payment by Beneficiaries.
Lands awarded pursuant to this Act shall be
paid for by the beneficiaries to the LBP in thirty
(30) annual amortizations at six percent (6%)
interest per annum. The payments for the first
three (3) years after the award may be at
reduced amounts as established by the PARC:
Provided, That the first five (5) annual
payments may not be more than five percent
(5%) of the value of the annual gross
production as established by the DAR. Should
the scheduled annual payments after the fifth
year exceed ten percent (10%) of the annual
gross production and the failure to produce
accordingly is not due to the beneficiary's fault,
the LBP may reduce the interest rate or reduce
the principal obligation to make the repayment
affordable.
The LBP shall have a lien by way of mortgage
on the land awarded to the beneficiary; and
this mortgage may be foreclosed by the LBP
for non-payment of an aggregate of three (3)
annual amortizations. The LBP shall advise the
DAR of such proceedings and the latter shall
subsequently award the forfeited landholdings
to other qualified beneficiaries. A beneficiary
whose land, as provided herein, has been
foreclosed shall thereafter be permanently
disqualified from becoming a beneficiary under
this Act. cd
SECTION 27. Transferability of Awarded
Lands. Lands acquired by beneficiaries
under this Act may not be sold, transferred or
conveyed except through hereditary
succession, or to the government, or to the
LBP, or to other qualified beneficiaries for a
period of ten (10) years: Provided, however,
That the children or the spouse of the
transferor shall have a right to repurchase the
land from the government or LBP within a
period of two (2) years. Due notice of the
availability of the land shall be given by the
LBP to the Barangay Agrarian Reform
Committee (BARC) of the barangay where the
land is situated. The Provincial Agrarian
Reform Coordinating Committee (PARCCOM) as
herein provided, shall, in turn, be given due
notice thereof by the BARC.
If the land has not yet been fully paid by the
beneficiary, the rights to the land may be
transferred or conveyed, with prior approval of
the DAR, to any heir of the beneficiary or to
any other beneficiary who, as a condition for
such transfer or conveyance, shall cultivate the
land himself. Failing compliance herewith, the
land shall be transferred to the LBP which shall
give due notice of the availability of the land in
the manner specified in the immediately
preceding paragraph.
In the event of such transfer to the LBP, the
latter shall compensate the beneficiary in one
lump sum for the amounts the latter has
already paid, together with the value of
improvements he has made on the land.
SECTION 28. Standing Crops at the Time of
Acquisition. The landowner shall retain his
share of any standing crops unharvested at the
time the DAR shall take possession of the land
under Section 16 of this Act, and shall be given
a reasonable time to harvest the same.
CHAPTER VIII
Corporate Farms
SECTION 29. Farms Owned or Operated by
Corporations or Other Business Associations.
In the case of farms owned or operated by
corporations or other business associations,
the following rules shall be observed by the
PARC:
In general, lands shall be distributed directly to
the individual worker-beneficiaries.
In case it is not economically feasible and
sound to divide the land, then it shall be
owned collectively by the worker-beneficiaries
who shall form a workers' cooperative or
association which will deal with the corporation
or business association. Until a new agreement
is entered into by and between the workers'
cooperative or association and the corporation
or business association, any agreement
existing at the time this Act takes effect
between the former and the previous
landowner shall be respected by both the
workers' cooperative or association and the
corporation or business association.
SECTION 30. Homelots and Farmlots for
Members of Cooperatives. The individual
members of the cooperatives or corporations
mentioned in the preceding section shall be
provided with homelots and small farmlots for
their family use, to be taken from the land
owned by the cooperative or corporation.
SECTION 31. Corporate Landowners.
Corporate landowners may voluntarily transfer
ownership over their agricultural landholdings
to the Republic of the Philippines pursuant to
Section 20 hereof or to qualified beneficiaries,
under such terms and conditions, consistent
with this Act, as they may agree upon, subject
to confirmation by the DAR.
Upon certification by the DAR, corporations
owning agricultural lands may give their
qualified beneficiaries the right to purchase
such proportion of the capital stock of the
corporation that the agricultural land, actually
devoted to agricultural activities, bears in
relation to the company's total assets, under
such terms and conditions as may be agreed
upon by them. In no case shall the
compensation received by the workers at the
time the shares of stocks are distributed be
reduced. The same principle shall be applied to
associations, with respect to their equity or
participation.
Corporations or associations which voluntarily
divest a proportion of their capital stock, equity
or participation in favor of their workers or
other qualified beneficiaries under this section
shall be deemed to have complied with the
provisions of this Act: Provided, That the
following conditions are complied with:
a) In order to safeguard the right of
beneficiaries who own shares of stocks to
dividends and other financial benefits, the
books of the corporation or association shall be
subject to periodic audit by certified public
accountants chosen by the beneficiaries;
b) Irrespective of the value of their equity
in the corporation or association, the
beneficiaries shall be assured of at least one
(1) representative in the board of directors, or
in a management or executive committee, if
one exists, of the corporation or association;
and
c) Any shares acquired by such workers
and beneficiaries shall have the same rights
and features as all other shares.
d) Any transfer of shares of stocks by the
original beneficiaries shall be void ab initio
unless said transaction is in favor of a qualified
and registered beneficiary within the same
corporation.
If within two (2) years from the approval of
this Act, the land or stock transfer envisioned
above is not made or realized or the plan for
such stock distribution approved by the PARC
within the same period, the agricultural land of
the corporate owners or corporation shall be
subject to the compulsory coverage of this Act.
acd
SECTION 32. Production-Sharing. Pending
final land transfer, individuals or entities
owning, or operating under lease or
management contract, agricultural lands are
hereby mandated to execute a production-
sharing plan with their farmworkers or
farmworkers' organization, if any, whereby
three percent (3%) of the gross sales from the
production of such lands are distributed within
sixty (60) days of the end of the fiscal year as
compensation to regular and other
farmworkers in such lands over and above the
compensation they currently receive: Provided,
That these individuals or entities realize gross
sales in excess of five million pesos per annum
unless the DAR, upon proper application,
determines a lower ceiling.
In the event that the individual or entity
realizes a profit, an additional ten percent
(10%) of the net profit after tax shall be
distributed to said regular and other
farmworkers within ninety (90) days of the end
of the fiscal year.
To forestall any disruption in the normal
operation of lands to be turned over to the
farmworker-beneficiaries mentioned above, a
transitory period, the length of which shall be
determined by the DAR, shall be established.
During this transitory period, at least one
percent (1%) of the gross sales of the entity
shall be distributed to the managerial,
supervisory and technical group in place at the
time of the effectivity of this Act, as
compensation for such transitory managerial
and technical functions as it will perform,
pursuant to an agreement that the
farmworker-beneficiaries and the managerial,
supervisory and technical group may conclude,
subject to the approval of the DAR.
SECTION 33. Payment of Shares of
Cooperative or Association. Shares of a
cooperative or association acquired by farmer-
beneficiaries or worker-beneficiaries shall be
fully paid for in an amount corresponding to
the valuation as determined in the immediately
succeeding section. The landowner and the LBP
shall assist the farmer-beneficiaries and
worker-beneficiaries in the payment for said
shares by providing credit financing.
SECTION 34. Valuation of Lands. A
valuation scheme for the land shall be
formulated by the PARC, taking into account
the factors enumerated in Section 17, in
addition to the need to stimulate the growth of
cooperatives and the objective of fostering
responsible participation of the worker-
beneficiaries in the creation of wealth.
In the determination of a price that is just not
only to the individual but to society as well, the
PARC shall consult closely with the landowner
and the worker-beneficiaries.
In case of disagreement, the price as
determined by the PARC, if accepted by the
worker-beneficiaries, shall be followed, without
prejudice to the landowner's right to petition
the Special Agrarian Court to resolve the issue
of valuation.
CHAPTER IX
Support Services
SECTION 35. Creation of Support Services
Office. There is hereby created the Office of
Support Services under the DAR to be headed
by an Undersecretary.
The Office shall provide general support and
coordinative services in the implementation of
the program particularly in carrying out the
provisions of the following services to farmer-
beneficiaries and affected landowners:
1) Irrigation facilities, especially second
crop or dry season irrigation facilities;
2) Infrastructure development and public
works projects in areas and settlements that
come under agrarian reform, and for this
purpose, the preparation of the physical
development plan of such settlements
providing suitable barangay sites, potable
water and power resources, irrigation systems
and other facilities for a sound agricultural
development plan;
3) Government subsidies for the use of
irrigation facilities;
4) Price support and guarantee for all
agricultural produce;
5) Extending to small landowners,
farmers and farmers' organizations the
necessary credit, like concessional and
collateral-free loans, for agro-industrialization
based on social collaterals like the guarantees
of farmers' organizations;
6) Promoting, developing and extending
financial assistance to small- and medium-
scale industries in agrarian reform areas;
7) Assigning sufficient numbers of
agricultural extension workers to farmers'
organizations;
8) Undertake research, development and
dissemination of information on agrarian
reform and low-cost and ecologically sound
farm inputs and technologies to minimize
reliance on expensive and imported agricultural
inputs;
9) Development of cooperative
management skills through intensive training;
10) Assistance in the identification of ready
markets for agricultural produce and training in
other various aspects of marketing; and cdtai
11) Administration, operation,
management and funding of support services,
programs and projects including pilot projects
and models related to agrarian reform as
developed by the DAR.
SECTION 36. Funding for Support Services.
In order to cover the expenses and cost of
support services, at least twenty-five percent
(25%) of all appropriations for agrarian reform
shall be immediately set aside and made
available for this purpose. In addition, the DAR
shall be authorized to package proposals and
receive grants, aid and other forms of financial
assistance from any source.
SECTION 37. Support Services to the
Beneficiaries. The PARC shall ensure that
support services to farmer-beneficiaries are
provided, such as:
(a) Land surveys and titling;
(b) Liberalized terms on credit facilities
and production loans;
(c) Extension services by way of planting,
cropping, production and post-harvest
technology transfer, as well as marketing and
management assistance and support to
cooperatives and farmers' organizations;
(d) Infrastructure such as access trails,
mini-dams, public utilities, marketing and
storage facilities; and
(e) Research, production and use of
organic fertilizers and other local substances
necessary in farming and cultivation.
The PARC shall formulate policies to ensure
that support services to farmer-beneficiaries
shall be provided at all stages of land reform.
The Bagong Kilusang Kabuhayan sa Kaunlaran
(BKKK) Secretariat shall be transferred and
attached to the LBP, for its supervision
including all its applicable and existing funds,
personnel, properties, equipment and records.
Misuse or diversion of the financial and support
services herein provided shall result in
sanctions against the beneficiary guilty thereof,
including the forfeiture of the land transferred
to him or lesser sanctions as may be provided
by the PARC, without prejudice to criminal
prosecution.
SECTION 38. Support Services to
Landowners. The PARC with the assistance
of such other government agencies and
instrumentalities as it may direct, shall provide
landowners affected by the CARP and prior
agrarian reform programs with the following
services:
(a) Investment information, financial and
counseling assistance;
(b) Facilities, programs and schemes for
the conversion or exchange of bonds issued for
payment of the lands acquired with stocks and
bonds issued by the National Government, the
Central Bank and other government
institutions and instrumentalities;
(c) Marketing of LBP bonds, as well as
promoting the marketability of said bonds in
traditional and non-traditional financial
markets and stock exchanges; and
(d) Other services designed to utilize
productively the proceeds of the sale of such
lands for rural industrialization.
A landowner who invests in rural-based
industries shall be entitled to the incentives
granted to a registered enterprise engaged in a
pioneer or preferred area of investment as
provided for in the Omnibus Investment Code
of 1987, or to such other incentives as the
PARC, the LBP, or other government financial
institutions may provide.
The LBP shall redeem a landowner's LBP bonds
at face value, provided that the proceeds
thereof shall be invested in a BOI-registered
company or in any agri-business or agro-
industrial enterprise in the region where the
landowner has previously made investments,
to the extent of thirty percent (30%) of the
face value of said LBP bonds, subject to
guidelines that shall be issued by the LBP.
SECTION 39. Land Consolidation. The DAR
shall carry out land consolidation projects to
promote equal distribution of landholdings, to
provide the needed infrastructures in
agriculture, and to conserve soil fertility and
prevent erosion.
CHAPTER X
Special Areas of Concern
SECTION 40. Special Areas of Concern. As
an integral part of the Comprehensive Agrarian
Reform Program, the following principles in
these special areas of concern shall be
observed:
(1) Subsistence Fishing. Small
fisherfolk, including seaweed farmers, shall be
assured of greater access to the utilization of
water resources.
(2) Logging and Mining Concessions.
Subject to the requirement of a balanced
ecology and conservation of water resources,
suitable areas, as determined by the
Department of Environment and Natural
Resources (DENR), in logging, mining and
pasture areas, shall be opened up for agrarian
settlements whose beneficiaries shall be
required to undertake reforestation and
conservation production methods. Subject to
existing laws, rules and regulations, settlers
and members of tribal communities shall be
allowed to enjoy and exploit the products of
the forest other than timber within the logging
concessions.
(3) Sparsely Occupied Public Agricultural
Lands. Sparsely occupied agricultural lands
of the public domain shall be surveyed,
proclaimed and developed as farm settlements
for qualified landless people based on an
organized program to ensure their orderly and
early development. cda
Agricultural land allocations shall be made for
ideal family-size farms as determined by the
PARC. Pioneers and other settlers shall be
treated equally in every respect.
Subject to the prior rights of qualified
beneficiaries, uncultivated lands of the public
domain shall be made available on a lease
basis to interested and qualified parties.
Parties who will engaged in the development of
capital-intensive, traditional or pioneering
crops shall be given priority.
The lease period, which shall not be more than
a total of fifty (50) years, shall be
proportionate to the amount of investment and
production goals of the lessee. A system of
evaluation and audit shall be instituted.
(4) Idle, Abandoned, Foreclosed and
Sequestered Lands. Idle, abandoned,
foreclosed and sequestered lands shall be
planned for distribution as home lots and
family-size farmlots to actual occupants. If
land area permits, other landless families shall
be accommodated in these lands.
(5) Rural Women. All qualified women
members of the agricultural labor force must
be guaranteed and assured equal right to
ownership of the land, equal shares of the
farm's produce, and representation in advisory
or appropriate decision-making bodies.
(6) Veterans and Retirees. In
accordance with Section 7 of Article XVI of the
Constitution, landless war veterans and
veterans of military campaigns, their surviving
spouses and orphans, retirees of the Armed
Forces of the Philippines (AFP) and the
Integrated National Police (INP), returnees,
surrenderees, and similar beneficiaries shall be
given due consideration in the disposition of
agricultural lands of the public domain.
(7) Agriculture Graduates. Graduates of
agricultural schools who are landless shall be
assisted by the government, through the DAR,
in their desire to own and till agricultural lands.
CHAPTER XI
Program Implementation
SECTION 41. The Presidential Agrarian
Reform Council. The Presidential Agrarian
Reform Council (PARC) shall be composed of
the President of the Philippines as Chairman,
the Secretary of Agrarian Reform as Vice-
Chairman and the following as members;
Secretaries of the Departments of Agriculture;
Environment and Natural Resources; Budget
and Management; Local Government; Public
Works and Highways; Trade and Industry;
Finance; Labor and Employment; Director-
General of the National Economic and
Development Authority; President, Land Bank
of the Philippines; Administrator, National
Irrigation Administration; and three (3)
representatives of affected landowners to
represent Luzon, Visayas and Mindanao; six
(6) representatives of agrarian reform
beneficiaries, two (2) each from Luzon, Visayas
and Mindanao, provided that one of them shall
be from the cultural communities.
SECTION 42. Executive Committee. There
shall be an Executive Committee (EXCOM) of
the PARC composed of the Secretary of the
DAR as Chairman, and such other members as
the President may designate, taking into
account Article XIII, Section 5 of the
Constitution. Unless otherwise directed by the
PARC, the EXCOM may meet and decide on
any and all matters in between meetings of the
PARC; Provided, however, That its decisions
must be reported to the PARC immediately and
not later than the next meeting.
SECTION 43. Secretariat. A PARC
Secretariat is hereby established to provide
general support and coordinative services such
as inter-agency linkages; program and project
appraisal and evaluation and general
operations monitoring for the PARC.
The Secretariat shall be headed by the
Secretary of Agrarian Reform who shall be
assisted by an Undersecretary and supported
by a staff whose composition shall be
determined by the PARC Executive Committee
and whose compensation shall be chargeable
against the Agrarian Reform Fund. All officers
and employees of the Secretariat shall be
appointed by the Secretary of Agrarian Reform.
SECTION 44. Provincial Agrarian Reform
Coordinating Committee (PARCCOM). A
Provincial Agrarian Reform Coordinating
Committee (PARCCOM) is hereby created in
each province, composed of a Chairman, who
shall be appointed by the President upon the
recommendation of the EXCOM, the Provincial
Agrarian Reform Officer as Executive Officer,
and one representative each from the
Departments of Agriculture, and of
Environment and Natural Resources and from
the LBP, one representative each from existing
farmers' organizations, agricultural
cooperatives and non-governmental
organizations in the province; two
representatives from landowners, at least one
of whom shall be a producer representing the
principal crop of the province, and two
representatives from farmer and farmworker-
beneficiaries, at least one of whom shall be a
farmer or farmworker representing the
principal crop of the province, as members:
Provided, That in areas where there are
cultural communities, the latter shall likewise
have one representative.
The PARCCOM shall coordinate and monitor the
implementation of the CARP in the province. It
shall provide information on the provisions of
the CARP, guidelines issued by the PARC and
on the progress of the CARP in the province.
SECTION 45. Province-by-Province
Implementation. The PARC shall provide the
guidelines for a province-by-province
implementation of the CARP. The ten-year
program of distribution of public and private
lands in each province shall be adjusted from
year by the province's PARCCOM in accordance
with the level of operations previously
established by the PARC, in every case
ensuring that support services are available or
have been programmed before actual
distribution is effected.
SECTION 46. Barangay Agrarian Reform
Committee (BARC). Unless otherwise
provided in this Act, the provisions of
Executive Order No. 229 regarding the
organization of the Barangay Agrarian Reform
Committee (BARC) shall be in effect.
SECTION 47. Functions of the BARC. In
addition to those provided in Executive Order
No. 229, the BARC shall have the following
functions:
(a) Mediate and conciliate between parties
involved in an agrarian dispute including
matters related to tenurial and financial
arrangements; acd
(b) Assist in the identification of qualified
beneficiaries and landowners within the
barangay;
(c) Attest to the accuracy of the initial
parcellary mapping of the beneficiary's tillage;
(d) Assist qualified beneficiaries in
obtaining credit from lending institutions;
(e) Assist in the initial determination of the
value of the land;
(f) Assist the DAR representatives in the
preparation of periodic reports on the CARP
implementation for submission to the DAR;
(g) Coordinate the delivery of support
services to beneficiaries; and
(h) Perform such other functions as may
be assigned by the DAR.
(2) The BARC shall endeavor to mediate,
conciliate and settle agrarian disputes lodged
before it within thirty (30) days from its taking
cognizance thereof. If after the lapse of the
thirty day period, it is unable to settle the
dispute, it shall issue a certificate of its
proceedings and shall furnish a copy thereof
upon the parties within seven (7) days after
the expiration of the thirty-day period.
SECTION 48. Legal Assistance. The BARC
or any member thereof may, whenever
necessary in the exercise of any of its functions
hereunder, seek the legal assistance of the
DAR and the provincial, city, or municipal
government.
SECTION 49. Rules and Regulations. The
PARC and the DAR shall have the power to
issue rules and regulations, whether
substantive or procedural, to carry out the
objects and purposes of this Act. Said rules
shall take effect ten (10) days after publication
in two (2) national newspapers of general
circulation.
CHAPTER XII
Administrative Adjudication
SECTION 50. Quasi-Judicial Powers of the
DAR. The DAR is hereby vested with primary
jurisdiction to determine and adjudicate
agrarian reform matters and shall have
exclusive original jurisdiction over all matters
involving the implementation of agrarian
reform except those falling under the exclusive
jurisdiction of the Department of Agriculture
(DA) and the Department of Environment and
Natural Resources (DENR).
It shall not be bound by technical rules of
procedure and evidence but shall proceed to
hear and decide all cases, disputes or
controversies in a most expeditious manner,
employing all reasonable means to ascertain
the facts of every case in accordance with
justice and equity and the merits of the case.
Toward this end, it shall adopt a uniform rule
of procedure to achieve a just, expeditious and
inexpensive determination of every action or
proceeding before it.
It shall have the power to summon witnesses,
administer oaths, take testimony, require
submission of reports, compel the production
of books and documents and answers to
interrogatories and issue subpoena, and
subpoena duces tecum, and enforce its writs
through sheriffs or other duly deputized
officers. It shall likewise have the power to
punish direct and indirect contempts in the
same manner and subject to the same
penalties as provided in the Rules of Court.
Responsible farmer leaders shall be allowed to
represent themselves, their fellow farmers, or
their organizations in any proceedings before
the DAR: Provided, however, That when there
are two or more representatives for any
individual or group, the representatives should
choose only one among themselves to
represent such party or group before any DAR
proceedings.
Notwithstanding an appeal to the Court of
Appeals, the decision of the DAR shall be
immediately executory.
SECTION 51. Finality of Determination.
Any case or controversy before it shall be
decided within thirty (30) days after it is
submitted for resolution. Only one (1) motion
for reconsideration shall be allowed. Any order,
ruling or decision shall be final after the lapse
of fifteen (15) days from receipt of a copy
thereof.
SECTION 52. Frivolous Appeals. To
discourage frivolous or dilatory appeals from
the decisions or orders on the local or
provincial levels, the DAR may impose
reasonable penalties, including but not limited
to fines or censures upon erring parties.
SECTION 53. Certification of the BARC.
The DAR shall not take cognizance of any
agrarian dispute or controversy unless a
certification from the BARC that the dispute
has been submitted to it for mediation and
conciliation without any success of settlement
is presented: Provided, however, That if no
certification is issued by the BARC within thirty
(30) days after a matter or issue is submitted
to it for mediation or conciliation the case or
dispute may be brought before the PARC.
aisa dc
CHAPTER XIII
Judicial Review
SECTION 54. Certiorari. Any decision,
order, award or ruling of the DAR on any
agrarian dispute or on any matter pertaining to
the application, implementation, enforcement,
or interpretation of this Act and other pertinent
laws on agrarian reform may be brought to the
Court of Appeals by certiorari except as
otherwise provided in this Act within fifteen
(15) days from the receipt of a copy thereof.
The findings of fact of the DAR shall be final
and conclusive if based on substantial
evidence.
SECTION 55. No Restraining Order or
Preliminary Injunction. No court in the
Philippines shall have jurisdiction to issue any
restraining order or writ of preliminary
injunction against the PARC or any of its duly
authorized or designated agencies in any case,
dispute or controversy arising from, necessary
to, or in connection with the application,
implementation, enforcement, or interpretation
of this Act and other pertinent laws on agrarian
reform.
SECTION 56. Special Agrarian Court. The
Supreme Court shall designate at least one (1)
branch of the Regional Trial Court (RTC) within
each province to act as a Special Agrarian
Court.
The Supreme Court may designate more
branches to constitute such additional Special
Agrarian Courts as may be necessary to cope
with the number of agrarian cases in each
province. In the designation, the Supreme
Court shall give preference to the Regional
Trial Courts which have been assigned to
handle agrarian cases or whose presiding
judges were former judges of the defunct
Court of Agrarian Relations.
The Regional Trial Court (RTC) judges assigned
to said courts shall exercise said special
jurisdiction in addition to the regular
jurisdiction of their respective courts.
The Special Agrarian Courts shall have the
powers and prerogatives inherent in or
belonging to the Regional Trial Courts.
SECTION 57. Special Jurisdiction. The
Special Agrarian Courts shall have original and
exclusive jurisdiction over all petitions for the
determination of just compensation to
landowners, and the prosecution of all criminal
offenses under this Act. The Rules of Court
shall apply to all proceedings before the
Special Agrarian Courts, unless modified by
this Act.
The Special Agrarian Courts shall decide all
appropriate cases under their special
jurisdiction within thirty (30) days from
submission of the case for decision.
SECTION 58. Appointment of
Commissioners. The Special Agrarian
Courts, upon their own initiative or at the
instance of any of the parties, may appoint one
or more commissioners to examine, investigate
and ascertain facts relevant to the dispute,
including the valuation of properties, and to file
a written report thereof with the court.
SECTION 59. Orders of the Special Agrarian
Courts. No order of the Special Agrarian
Courts on any issue, question, matter or
incident raised before them shall be elevated
to the appellate courts until the hearing shall
have been terminated and the case decided on
the merits.
SECTION 60. Appeals. An appeal may be
taken from the decision of the Special Agrarian
Courts by filing a petition for review with the
Court of Appeals within fifteen (15) days from
receipt of notice of the decision; otherwise, the
decision shall become final.
An appeal from the decision of the Court of
Appeals, or from any order, ruling or decision
of the DAR, as the case may be, shall be by a
petition for review with the Supreme Court
within a non-extendible period of fifteen (15)
days from receipt of a copy of said decision.
SECTION 61. Procedure on Review.
Review by the Court of Appeals or the
Supreme Court, as the case may be, shall be
governed by the Rules of Court. The Court of
Appeals, however, may require the parties to
file simultaneous memoranda within a period
of fifteen (15) days from notice, after which
the case is deemed submitted for decision.
SECTION 62. Preferential Attention in Courts.
All courts in the Philippines, both trial and
appellate, shall give preferential attention to all
cases arising from or in connection with the
implementation of the provisions of this Act.
All cases pending in court arising from or in
connection with the implementation of this Act
shall continue to be heard, tried and decided
into their finality, notwithstanding the
expiration of the ten-year period mentioned in
Section 5 hereof.
CHAPTER XIV
Financing
SECTION 63. Funding Source. The initial
amount needed to implement this Act for the
period of ten (10) years upon approval hereof
shall be funded from the Agrarian Reform Fund
created under Sections 20 and 21 of Executive
Order No. 229.
Additional amounts are hereby authorized to
be appropriated as and when needed to
augment the Agrarian Reform Fund in order to
fully implement the provisions of this Act.
Sources of funding or appropriations shall
include the following:
a) Proceeds of the sales of the Assets
Privatization Trust;
b) All receipts from assets recovered and
from sales of ill-gotten wealth recovered
through the Presidential Commission on Good
Government;
c) Proceeds of the disposition of the
properties of the Government in foreign
countries;
d) Portion of amounts accruing to the
Philippines from all sources of official foreign
aid grants and concessional financing from all
countries, to be used for the specific purposes
of financing production credits, infrastructures,
and other support services required by this
Act; cdt
(e) Other government funds not otherwise
appropriated.
All funds appropriated to implement the
provisions of this Act shall be considered
continuing appropriations during the period of
its implementation.
SECTION 64. Financial Intermediary for the
CARP. The Land Bank of the Philippines shall
be the financial intermediary for the CARP, and
shall insure that the social justice objectives of
the CARP shall enjoy a preference among its
priorities.
CHAPTER XV
General Provisions
SECTION 65. Conversion of Lands. After
the lapse of five (5) years from its award,
when the land ceases to be economically
feasible and sound for agricultural purposes, or
the locality has become urbanized and the land
will have a greater economic value for
residential, commercial or industrial purposes,
the DAR, upon application of the beneficiary or
the landowner, with due notice to the affected
parties, and subject to existing laws, may
authorize the reclassification or conversion of
the land and its disposition: Provided, That the
beneficiary shall have fully paid his obligation.
SECTION 66. Exemptions from Taxes and
Fees of Land Transfers. Transactions under
this Act involving a transfer of ownership,
whether from natural or juridical persons, shall
be exempted from taxes arising from capital
gains. These transactions shall also be
exempted from the payment of registration
fees, and all other taxes and fees for the
conveyance or transfer thereof; Provided, That
all arrearages in real property taxes, without
penalty or interest, shall be deductible from
the compensation to which the owner may be
entitled.
SECTION 67. Free Registration of Patents
and Titles. All Registers of Deeds are hereby
directed to register, free from payment of all
fees and other charges, patents, titles and
documents required for the implementation of
the CARP.
SECTION 68. Immunity of Government
Agencies from Undue Interference. No
injunction, restraining order, prohibition or
mandamus shall be issued by the lower courts
against the Department of Agrarian Reform
(DAR), the Department of Agriculture (DA), the
Department of Environment and Natural
Resources (DENR), and the Department of
Justice (DOJ) in their implementation of the
program.
SECTION 69. Assistance of Other
Government Entities. The PARC, in the
exercise of its functions, is hereby authorized
to call upon the assistance and support of
other government agencies, bureaus and
offices, including government-owned or -
controlled corporations.
SECTION 70. Disposition of Private
Agricultural Lands. The sale or disposition of
agricultural lands retained by a landowner as a
consequence of Section 6 hereof shall be valid
as long as the total landholdings that shall be
owned by the transferee thereof inclusive of
the land to be acquired shall not exceed the
landholding ceiling provided for in this Act.
Any sale or disposition of agricultural lands
after the effectivity of this Act found to be
contrary to the provisions hereof shall be null
and void.
Transferees of agricultural lands shall furnish
the appropriate Register of Deeds and the
BARC an affidavit attesting that his total
landholdings as a result of the said acquisition
do not exceed the landholding ceiling. The
Register of Deeds shall not register the
transfer of any agricultural land without the
submission of this sworn statement together
with proof of service of a copy thereof to the
BARC.
SECTION 71. Bank Mortgages. Banks and
other financial institutions allowed by law to
hold mortgage rights or security interests in
agricultural lands to secure loans and other
obligations of borrowers, may acquire title to
these mortgaged properties, regardless of
area, subject to existing laws on compulsory
transfer of foreclosed assets and acquisition as
prescribed under Section 13 of this Act. acd
SECTION 72. Lease, Management, Grower or
Service Contracts, Mortgages and Other
Claims. Lands covered by this Act under
lease, management, grower or service
contracts, and the like shall be disposed of as
follows:
(a) Lease, management, grower or service
contracts covering private lands may continue
under their original terms and conditions until
the expiration of the same even if such land
has, in the meantime, been transferred to
qualified beneficiaries.
(b) Mortgages and other claims registered
with the Register of Deeds shall be assumed by
the government up to an amount equivalent to
the landowner's compensation value as
provided in this Act.
SECTION 73. Prohibited Acts and Omissions.
The following are prohibited:
(a) The ownership or possession, for the
purpose of circumventing the provisions of this
Act, of agricultural lands in excess of the total
retention limits or award ceilings by any
person, natural or juridical, except those under
collective ownership by farmer-beneficiaries.
(b) The forcible entry or illegal detainer by
persons who are not qualified beneficiaries
under this Act to avail themselves of the rights
and benefits of the Agrarian Reform Program.
(c) The conversion by any landowner of
his agricultural land into any non-agricultural
use with intent to avoid the application of this
Act to his landholdings and to dispossess his
tenant farmers of the land tilled by them.
(d) The willful prevention or obstruction by
any person, association or entity of the
implementation of the CARP.
(e) The sale, transfer, conveyance or
change of the nature of lands outside of urban
centers and city limits either in whole or in part
after the effectivity of this Act. The date of the
registration of the deed of conveyance in the
Register of Deeds with respect to titled lands
and the date of the issuance of the tax
declaration to the transferee of the property
with respect to unregistered lands, as the case
may be, shall be conclusive for the purpose of
this Act.
(f) The sale, transfer or conveyance by a
beneficiary of the right to use or any other
usufructuary right over the land he acquired by
virtue of being a beneficiary, in order to
circumvent the provisions of this Act.
SECTION 74. Penalties. Any person who
knowingly or willfully violates the provisions of
this Act shall be punished by imprisonment of
not less than one (1) month to not more than
three (3) years or a fine of not less than one
thousand pesos (P1,000.00) and not more
than fifteen thousand pesos (P15,000.00), or
both, at the discretion of the court.
If the offender is a corporation or association,
the officer responsible therefor shall be
criminally liable.
SECTION 75. Suppletory Application of
Existing Legislation. The provisions of
Republic Act No. 3844 as amended,
Presidential Decree Nos. 27 and 266 as
amended, Executive Order Nos. 228 and 229,
both Series of 1987; and other laws not
inconsistent with this Act shall have suppletory
effect.
SECTION 76. Repealing Clause. Section 35
of Republic Act No. 3834, Presidential Decree
No. 316, the last two paragraphs of Section 12
of Presidential Decree No. 946, Presidential
Decree No. 1038, and all other laws, decrees,
executive orders, rules and regulations,
issuances or parts thereof inconsistent with
this Act are hereby repealed or amended
accordingly. cdt
SECTION 77. Separability Clause. If, for
any reason, any section or provision of this Act
is declared null and void, no other section,
provision, or part thereof shall be affected and
the same shall remain in full force and effect.
SECTION 78. Effectivity Clause. This Act
shall take effect immediately after publication
in at least two (2) national newspapers of
general circulation.
Approved: June 10, 1988
Published in the Philippine Daily Inquirer on
June 14, 1988. Published in the Official
Gazette, Vol. 84 No. 24, S-4 Supp., on June
13, 1988.
REPUBLIC ACT NO. 9700
AN ACT STRENGTHENING THE
COMPREHENSIVE AGRARIAN REFORM
PROGRAM (CARP), EXTENDING THE
ACQUISITION AND DISTRIBUTION OF ALL
AGRICULTURAL LANDS, INSTITUTING
NECESSARY REFORMS, AMENDING FOR THE
PURPOSE CERTAIN PROVISIONS OF REPUBLIC
ACT NO. 6657, OTHERWISE, KNOWN AS THE
COMPREHENSIVE AGRARIAN REFORM LAW OF
1988, AS AMENDED, AND APPROPRIATING
FUNDS THEREFOR
SECTION 1. Section 2 of Republic Act No.
6657, as amended, otherwise known as the
Comprehensive Agrarian Reform Law of 1988,
is hereby further amended to read as follows:
DSTCIa
"SEC. 2. Declaration of Principles and
Policies. It is the policy of the State to
pursue a Comprehensive Agrarian Reform
Program (CARP). The welfare of the landless
farmers and farmworkers will receive the
highest consideration to promote social justice
and to move the nation toward sound rural
development and industrialization, and the
establishment of owner cultivatorship of
economic-size farms as the basis of Philippine
agriculture.
"The State shall promote industrialization and
full employment based on sound agricultural
development and agrarian reform, through
industries that make full and efficient use of
human and natural resources, and which are
competitive in both domestic and foreign
markets: Provided, That the conversion of
agricultural lands into industrial, commercial or
residential lands shall take into account, tillers'
rights and national food security. Further, the
State shall protect Filipino enterprises against
unfair foreign competition and trade practices.
ACcHIa
"The State recognizes that there is not enough
agricultural land to be divided and distributed
to each farmer and regular farmworker so that
each one can own his/her economic-size family
farm. This being the case, a meaningful
agrarian reform program to uplift the lives and
economic status of the farmer and his/her
children can only be achieved through
simultaneous industrialization aimed at
developing a self-reliant and independent
national economy effectively controlled by
Filipinos.
"To this end, the State may, in the interest of
national welfare or defense, establish and
operate vital industries.
"A more equitable distribution and ownership
of land, with due regard to the rights of
landowners to just compensation, retention
rights under Section 6 of Republic Act No.
6657, as amended, and to the ecological needs
of the nation, shall be undertaken to provide
farmers and farmworkers with the opportunity
to enhance their dignity and improve the
quality of their lives through greater
productivity of agricultural lands. aHATDI
"The agrarian reform program is founded on
the right of farmers and regular farmworkers,
who are landless, to own directly or collectively
the lands they till or, in the case of other
farmworkers, to receive a just share of the
fruits thereof. To this end, the State shall
encourage and undertake the just distribution
of all agricultural lands, subject to the priorities
and retention limits set forth in this Act, taking
into account ecological, developmental, and
equity considerations, and subject to the
payment of just compensation. The State shall
respect the right of small landowners, and shall
provide incentive for voluntary land-sharing.
"As much as practicable, the implementation of
the program shall be community-based to
assure, among others, that the farmers shall
have greater control of farmgate prices, and
easier access to credit. DCIAST
"The State shall recognize the right of farmers,
farmworkers and landowners, as well as
cooperatives and other independent farmers'
organizations, to participate in the planning,
organization, and management of the
program, and shall provide support to
agriculture through appropriate technology and
research, and adequate financial, production,
marketing and other support services.
"The State shall recognize and enforce,
consistent with existing laws, the rights of rural
women to own and control land, taking into
consideration the substantive equality between
men and women as qualified beneficiaries, to
receive a just share of the fruits thereof, and
to be represented in advisory or appropriate
decision-making bodies. These rights shall be
independent of their male relatives and of their
civil status. SHCaEA
"The State shall apply the principles of agrarian
reform, or stewardship, whenever applicable,
in accordance with law, in the disposition or
utilization of other natural resources, including
lands of the public domain, under lease or
concession, suitable to agriculture, subject to
prior rights, homestead rights of small settlers
and the rights of indigenous communities to
their ancestral lands.
"The State may resettle landless farmers and
farmworkers in its own agricultural estates,
which shall be distributed to them in the
manner provided by law. cADEHI
"By means of appropriate incentives, the State
shall encourage the formation and
maintenance of economic-size family farms to
be constituted by individual beneficiaries and
small landowners.
"The State shall protect the rights of
subsistence fishermen, especially of local
communities, to the preferential use of
communal marine and fishing resources, both
inland and offshore. It shall provide support to
such fishermen through appropriate technology
and research, adequate financial, production
and marketing assistance and other services.
The State shall also protect, develop and
conserve such resources. The protection shall
extend to offshore fishing grounds of
subsistence fishermen against foreign
intrusion. Fishworkers shall receive a just
share from their labor in the utilization of
marine and fishing resources. HAEDCT
"The State shall be guided by the principles
that land has a social function and land
ownership has a social responsibility. Owners
of agricultural land have the obligation to
cultivate directly or through labor
administration the lands they own and thereby
make the land productive.
"The State shall provide incentives to
landowners to invest the proceeds of the
agrarian reform program to promote
industrialization, employment and privatization
of public sector enterprises. Financial
instruments used as payment for lands shall
contain features that shall enhance
negotiability and acceptability in the
marketplace. SDcITH
"The State may lease undeveloped lands of the
public domain to qualified entities for the
development of capital-intensive farms, and
traditional and pioneering crops especially
those for exports subject to the prior rights of
the beneficiaries under this Act."
SECTION 2. Section 3 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 3. Definitions. For the purpose
of this Act, unless the context indicates
otherwise:
"xxx xxx xxx
"(f) Farmer refers to a natural person
whose primary livelihood is cultivation of land
or the production of agricultural crops,
livestock and/or fisheries either by
himself/herself, or primarily with the
assistance of his/her immediate farm
household, whether the land is owned by
him/her, or by another person under a
leasehold or share tenancy agreement or
arrangement with the owner thereof. DCIAST
"xxx xxx xxx
"(l) Rural women refer to women who are
engaged directly or indirectly in farming and/or
fishing as their source of livelihood, whether
paid or unpaid, regular or seasonal, or in food
preparation, managing the household, caring
for the children, and other similar activities."
SECTION 3. Section 4 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 4. Scope. The Comprehensive
Agrarian Reform Law of 1988 shall cover,
regardless of tenurial arrangement and
commodity produced, all public and private
agricultural lands as provided in Proclamation
No. 131 and Executive Order No. 229,
including other lands of the public domain
suitable for agriculture: Provided, That
landholdings of landowners with a total area of
five (5) hectares and below shall not be
covered for acquisition and distribution to
qualified beneficiaries. IHAcCS
"More specifically, the following lands are
covered by the CARP:
"(a) All alienable and disposable lands of
the public domain devoted to or suitable for
agriculture. No reclassification of forest or
mineral lands to agricultural lands shall be
undertaken after the approval of this Act until
Congress, taking into account ecological,
developmental and equity considerations, shall
have determined by law, the specific limits of
the public domain;
"(b) All lands of the public domain in excess
of the specific limits as determined by
Congress in the preceding paragraph;
"(c) All other lands owned by the
Government devoted to or suitable for
agriculture; and DCcAIS
"(d) All private lands devoted to or suitable
for agriculture regardless of the agricultural
products raised or that can be raised thereon.
"A comprehensive inventory system in
consonance with the national land use plan
shall be instituted by the Department of
Agrarian Reform (DAR), in accordance with the
Local Government Code, for the purpose of
properly identifying and classifying farmlands
within one (1) year from effectivity of this Act,
without prejudice to the implementation of the
land acquisition and distribution."
SECTION 4. There shall be incorporated
after Section 6 of Republic Act No. 6657, as
amended, new sections to read as follows:
EHTISC
"SEC. 6-A. Exception to Retention Limits.
Provincial, city and municipal government
units acquiring private agricultural lands by
expropriation or other modes of acquisition to
be used for actual, direct and exclusive public
purposes, such as roads and bridges, public
markets, school sites, resettlement sites, local
government facilities, public parks and
barangay plazas or squares, consistent with
the approved local comprehensive land use
plan, shall not be subject to the five (5)-
hectare retention limit under this Section and
Sections 70 and 73(a) of Republic Act No.
6657, as amended: Provided, That lands
subject to CARP shall first undergo the land
acquisition and distribution process of the
program: Provided, further, That when these
lands have been subjected to expropriation,
the agrarian reform beneficiaries therein shall
be paid just compensation."
"SEC. 6-B. Review of Limits of Land Size.
Within six (6) months from the effectivity of
this Act, the DAR shall submit a comprehensive
study on the land size appropriate for each
type of crop to Congress for a possible review
of limits of land sizes provided in this Act."
cAECST
SECTION 5. Section 7 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 7. Priorities. The DAR, in
coordination with the Presidential Agrarian
Reform Council (PARC) shall plan and program
the final acquisition and distribution of all
remaining unacquired and undistributed
agricultural lands from the effectivity of this
Act until June 30, 2014. Lands shall be
acquired and distributed as follows:
"Phase One: During the five (5)-year extension
period hereafter all remaining lands above fifty
(50) hectares shall be covered for purposes of
agrarian reform upon the effectivity of this Act.
All private agricultural lands of landowners with
aggregate landholdings in excess of fifty (50)
hectares which have already been subjected to
a notice of coverage issued on or before
December 10, 2008; rice and corn lands under
Presidential Decree No. 27; all idle or
abandoned lands; all private lands voluntarily
offered by the owners for agrarian reform:
Provided, That with respect to voluntary land
transfer, only those submitted by June 30,
2009 shall be allowed: Provided, further, That
after June 30, 2009, the modes of acquisition
shall be limited to voluntary offer to sell and
compulsory acquisition: Provided, furthermore,
That all previously acquired lands wherein
valuation is subject to challenge by landowners
shall be completed and finally resolved
pursuant to Section 17 of Republic Act No.
6657, as amended: Provided, finally, as
mandated by the Constitution, Republic Act No.
6657, as amended, and Republic Act No. 3844,
as amended, only farmers (tenants or lessees)
and regular farmworkers actually tilling the
lands, as certified under oath by the Barangay
Agrarian Reform Council (BARC) and attested
under oath by the landowners, are the
qualified beneficiaries. The intended
beneficiary shall state under oath before the
judge of the city or municipal court that he/she
is willing to work on the land to make it
productive and to assume the obligation of
paying the amortization for the compensation
of the land and the land taxes thereon; all
lands foreclosed by government financial
institutions; all lands acquired by the
Presidential Commission on Good Government
(PCGG); and all other lands owned by the
government devoted to or suitable for
agriculture, which shall be acquired and
distributed immediately upon the effectivity of
this Act, with the implementation to be
completed by June 30, 2012; IcHTCS
"Phase Two: (a) Lands twenty-four (24)
hectares up to fifty (50) hectares shall likewise
be covered for purposes of agrarian reform
upon the effectivity of this Act. All alienable
and disposable public agricultural lands; all
arable public agricultural lands under agro-
forest, pasture and agricultural leases already
cultivated and planted to crops in accordance
with Section 6, Article XIII of the Constitution;
all public agricultural lands which are to be
opened for new development and
resettlement; and all private agricultural lands
of landowners with aggregate landholdings:
above twenty-four (24) hectares up to fifty
(50) hectares which have already been
subjected to a notice of coverage issued on or
before December 10, 2008, to implement
principally the rights of farmers and regular
farmworkers, who are landless, to own directly
or collectively the lands they till, which shall be
distributed immediately upon the effectivity of
this Act, with the implementation to be
completed by June 30, 2012; and
"(b) All remaining private agricultural lands
of landowners with aggregate landholdings in
excess of twenty-four (24) hectares,
regardless as to whether these have been
subjected to notices of coverage or not, with
the implementation to begin on July 1, 2012
and to be completed by June 30, 2013;
IcSEAH
"Phase Three: All other private agricultural
lands commencing with large landholdings and
proceeding to medium and small landholdings
under the following schedule:
"(a) Lands of landowners with aggregate
landholdings above ten (10) hectares up to
twenty-four (24) hectares, insofar as the
excess hectarage above ten (10) hectares is
concerned, to begin on July 1, 2012 and to be
completed by June 30, 2013; and
"(b) Lands of landowners with aggregate
landholdings from the retention limit up to ten
(10) hectares, to begin on July 1, 2013 and to
be completed by June 30, 2014; to implement
principally the right of farmers and regular
farmworkers who are landless, to own directly
or collectively the lands they till. aESICD
"The schedule of acquisition and redistribution
of all agricultural lands covered by this
program shall be made in accordance with the
above order of priority, which shall be provided
in the implementing rules to be prepared by
the PARC, taking into consideration the
following: the landholdings wherein the
farmers are organized and understand the
meaning and obligations of farmland Republic Act No. 6657, as amended: Provided,
ownership; the distribution of lands to the furthermore, That rural women shall be given
tillers at the earliest practicable time; the the opportunity to participate in the
enhancement of agricultural productivity; and development planning and implementation of
the availability of funds and resources to this Act: Provided, finally, That in no case
implement and support the program: Provided, should the agrarian reform beneficiaries' sex,
That the PARC shall design and conduct economic, religious, social, cultural and
seminars, symposia, information campaigns, political attributes adversely affect the
and other similar programs for farmers who distribution of lands."
are not organized or not covered by any
landholdings. Completion by these farmers of SECTION 6. The title of Section 16 of
the aforementioned seminars, symposia, and Republic Act No. 6657, as amended, is hereby
other similar programs shall be encouraged in further amended to read as follows:
the implementation of this Act particularly the
"SEC. 16. Procedure for Acquisition and
provisions of this Section.
Distribution of Private Lands."
"Land acquisition and distribution shall be
SECTION 7. Section 17 of Republic Act No.
completed by June 30, 2014 on a province-by-
6657, as amended, is hereby further amended
province basis. In any case, the PARC or the
to read as follows: CSTEHI
PARC Executive Committee (PARC EXCOM),
upon recommendation by the Provincial
"SEC. 17. Determination of Just
Agrarian Reform Coordinating Committee
Compensation. In determining just
(PARCCOM), may declare certain provinces as
compensation, the cost of acquisition of the
priority land reform areas, in which case the
land, the value of the standing crop, the
acquisition and distribution of private
current value of like properties, its nature,
agricultural lands therein under advanced
actual use and income, the sworn valuation by
phases may be implemented ahead of the
the owner, the tax declarations, the
above schedules on the condition that prior
assessment made by government assessors,
phases in these provinces have been
and seventy percent (70%) of the zonal
completed: Provided, That notwithstanding the
valuation of the Bureau of Internal Revenue
above schedules, phase three (b) shall not be
(BIR), translated into a basic formula by the
implemented in a particular province until at
DAR shall be considered, subject to the final
least ninety percent (90%) of the provincial
decision of the proper court. The social and
balance of that particular province as of
economic benefits contributed by the farmers
January 1, 2009 under Phase One, Phase Two
and the farmworkers and by the Government
(a), Phase Two (b), and Phase Three (a),
to the property as well as the nonpayment of
excluding lands under the jurisdiction of the
taxes or loans secured from any government
Department of Environment and Natural
financing institution on the said land shall be
Resources (DENR), have been successfully
considered as additional factors to determine
completed. aDcETC
its valuation."
"The PARC shall establish guidelines to
SECTION 8. There shall be incorporated
implement the above priorities and distribution
after Section 22 of Republic Act No. 6657, as
scheme, including the determination of who
amended, a new section to read as follows:
are qualified beneficiaries: Provided, That an
owner-tiller may be a beneficiary of the land "SEC. 22-A. Order of Priority. A
he/she does not own but is actually cultivating landholding of a landowner shall be distributed
to the extent of the difference between the first to qualified beneficiaries under Section 22,
area of the land he/she owns and the award subparagraphs (a) and (b) of that same
ceiling of three (3) hectares: Provided, further, landholding up to a maximum of three (3)
That collective ownership by the farmer hectares each. Only when these beneficiaries
beneficiaries shall be subject to Section 25 of
have all received three (3) hectares each, shall
the remaining portion of the landholding, if
any, be distributed to other beneficiaries under
Section 22, subparagraphs (c), (d), (e), (f),
and (g)." ISCcAT
SECTION 9. Section 24 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 24. Award to Beneficiaries. The
rights and responsibilities of the beneficiaries
shall commence from their receipt of a duly
registered emancipation patent or certificate of
land ownership award and their actual physical
possession of the awarded land. Such award
shall be completed in not more than one
hundred eighty (180) days from the date of
registration of the title in the name of the
Republic of the Philippines: Provided, That the
emancipation patents, the certificates of land
ownership award, and other titles issued under
any agrarian reform program shall be
indefeasible and imprescriptible after one (1)
year from its registration with the Office of the
Registry of Deeds, subject to the conditions,
limitations and qualifications of this Act, the
property registration decree, and other
pertinent laws. The emancipation patents or
the certificates of land ownership award being
titles brought under the operation of the
torrens system, are conferred with the same
indefeasibility and security afforded to all titles
under the said system, as provided for by
Presidential Decree No. 1529, as amended by
Republic Act No. 6732. AaECSH
"It is the ministerial duty of the Registry of
Deeds to register the title of the land in the
name of the Republic of the Philippines, after
the Land Bank of the Philippines (LBP) has
certified that the necessary deposit in the
name of the landowner constituting full
payment in cash or in bond with due notice to
the landowner and the registration of the
certificate of land ownership award issued to
the beneficiaries, and to cancel previous titles
pertaining thereto.
"Identified and qualified agrarian reform
beneficiaries, based on Section 22 of Republic
Act No. 6657, as amended, shall have
usufructuary rights over the awarded land as
soon as the DAR takes possession of such land,
and such right shall not be diminished even
pending the awarding of the emancipation
patent or the certificate of land ownership
award. CTSHDI
"All cases involving the cancellation of
registered emancipation patents, certificates of
land ownership award, and other titles issued
under any agrarian reform program are within
the exclusive and original jurisdiction of the
Secretary of the DAR."
SECTION 10. Section 25 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 25. Award Ceilings for
Beneficiaries. Beneficiaries shall be awarded
an area not exceeding three (3) hectares,
which may cover a contiguous tract of land or
several parcels of land cumulated up to the
prescribed award limits. The determination of
the size of the land for distribution shall
consider crop type, soil type, weather patterns
and other pertinent variables or factors which
are deemed critical for the success of the
beneficiaries. TcCSIa
"For purposes of this Act, a landless beneficiary
is one who owns less than three (3) hectares
of agricultural land.
"Whenever appropriate, the DAR shall
encourage the agrarian reform beneficiaries to
form or join farmers' cooperatives for purposes
of affiliating with existing cooperative banks in
their respective provinces or localities, as well
as forming blocs of agrarian reform
beneficiaries, corporations, and partnerships
and joining other farmers' collective
organizations, including irrigators' associations:
Provided, That the agrarian reform
beneficiaries shall be assured of corresponding
shares in the corporation, seats in the board of
directors, and an equitable share in the profit.
"In general, the land awarded to a farmer-
beneficiary should be in the form of an
individual title, covering one (1) contiguous
tract or several parcels of land cumulated up to
a maximum of three (3) hectares. EHASaD
"The beneficiaries may opt for collective
ownership, such as coorkers or farmers
cooperative or some other form of collective
organization and for the issuance of collective
ownership titles: Provided, That the total area
that may be awarded shall not exceed the total
number of co-owners or members of the
cooperative or collective organization
multiplied by the award limit above prescribed,
except in meritorious cases as determined by
the PARC.
"The conditions for the issuance of collective
titles are as follows:
"(a) The current farm management system
of the land covered by CARP will not be
appropriate for individual farming of farm
parcels; cSCTID
"(b) The farm labor system is specialized,
where the farmworkers are organized by
functions and not by specific parcels such as
spraying, weeding, packing and other similar
functions;
"(c) The potential beneficiaries are
currently not farming individual parcels but
collectively work on large contiguous areas;
and
"(d) The farm consists of multiple crops
being farmed in an integrated manner or
includes non-crop production areas that are
necessary for the viability of farm operations,
such as packing plants, storage areas, dikes,
and other similar facilities that cannot be
subdivided or assigned to individual farmers.
"For idle and abandoned lands or
underdeveloped agricultural lands to be
covered by CARP, collective ownership shall be
allowed only if the beneficiaries opt for it and
there is a clear development plan that would
require collective farming or integrated farm
operations exhibiting the conditions described
above. Otherwise, the land awarded to a
farmer-beneficiary should be in the form of an
individual title, covering one (1) contiguous
tract or several parcels of land cumulated up to
a maximum of three (3) hectares. HISAET
"In case of collective ownership, title to the
property shall be issued in the name of the co-
owners or the cooperative or collective
organization as the case may be. If the
certificates of land ownership award are given
to cooperatives then the names of the
beneficiaries must also be listed in the same
certificate of land ownership award.
"With regard to existing collective certificates
of land ownership award, the DAR should
immediately undertake the parcelization of said
certificates of land ownership award,
particularly those that do not exhibit the
conditions for collective ownership outlined
above. The DAR shall conduct a review and
redocumentation of all the collective
certificates of land ownership award. The DAR
shall prepare a prioritized list of certificates of
land ownership award to be parcelized. The
parcelization shall commence immediately
upon approval of this Act and shall not exceed
a period of three (3) years. Only those existing
certificates of land ownership award that are
collectively farmed or are operated in an
integrated manner shall remain as collective."
IaAScD
SECTION 11. Section 26 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 26. Payment by Beneficiaries.
Lands awarded pursuant to this Act shall be
paid for by the beneficiaries to the LBP in thirty
(30) annual amortizations at six percent (6%)
interest per annum. The annual amortization
shall start one (1) year from the date of the
certificate of land ownership award
registration. However, if the occupancy took
place after the certificate of land ownership
award registration, the amortization shall start
one (1) year from actual occupancy. The
payments for the first three (3) years after the
award shall be at reduced amounts as
established by the PARC: Provided, That the
first five (5) annual payments may not be
more than five percent (5%) of the value of
the annual gross production as established by
the DAR. Should the scheduled annual
payments after the fifth (5th) year exceed ten
percent (10%) of the annual gross production
and the failure to produce accordingly is not
due to the beneficiary's fault, the LBP shall
reduce the interest rate and/or reduce the
principal obligation to make the repayment
affordable. IDcAHT
"The LBP shall have a lien by way of mortgage
on the land awarded to the beneficiary; and
this mortgage may be foreclosed by the LBP
for non-payment of an aggregate of three (3)
annual amortizations. The LBP shall advise the
DAR of such proceedings and the latter shall
subsequently award the forfeited landholding
to other qualified beneficiaries. A beneficiary
whose land, as provided herein, has been
foreclosed shall thereafter be permanently
disqualified from becoming a beneficiary under
this Act."
SECTION 12. Section 27 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 27. Transferability of Awarded
Lands. Lands acquired by beneficiaries
under this Act or other agrarian reform laws
shall not be sold, transferred or conveyed
except through hereditary succession, or to the
government, or to the LBP, or to other
qualified beneficiaries through the DAR for a
period of ten (10) years: Provided, however,
That the children or the spouse of the
transferor shall have a right to repurchase the
land from the government or LBP within a
period of two (2) years. Due notice of the
availability of the land shall be given by the
LBP to the BARC of the barangay where the
land is situated. The PARCCOM, as herein
provided, shall, in turn, be given due notice
thereof by the BARC. HESIcT
"The title of the land awarded under the
agrarian reform must indicate that it is an
emancipation patent or a certificate of land
ownership award and the subsequent transfer
title must also indicate that it is an
emancipation patent or a certificate of land
ownership award.
"If the land has not yet been fully paid by the
beneficiary, the rights to the land may be
transferred or conveyed, with prior approval of
the DAR, to any heir of the beneficiary or to
any other beneficiary who, as a condition for
such transfer or conveyance, shall cultivate the
land himself/herself. Failing compliance
herewith, the land shall be transferred to the
LBP which shall give due notice of the
availability of the land in the manner specified
in the immediately preceding paragraph.
"In the event of such transfer to the LBP, the
latter shall compensate the beneficiary in one
lump sum for the amounts the latter has
already paid, together with the value of
improvements he/she has made on the land."
CIAHaT
SECTION 13. Section 36 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 36. Funding for Support Services.
In order to cover the expenses and cost of
support services, at least forty percent (40%)
of all appropriations for agrarian reform during
the five (5)-year extension period shall be
immediately set aside and made available for
this purpose: Provided, That the DAR shall
pursue integrated land acquisition and
distribution and support services strategy
requiring a plan to be developed parallel to the
land acquisition and distribution process. The
planning and implementation for land
acquisition and distribution shall be hand-in-
hand with support services delivery: Provided,
further, That for the next five (5) years, as far
as practicable, a minimum of two (2) Agrarian
Reform Communities (ARCs) shall be
established by the DAR, in coordination with
the local government units, non-governmental
organizations, community-based cooperatives
and people's organizations in each legislative
district with a predominant agricultural
population: Provided, furthermore, That the
areas in which the ARCs are to be established
shall have been substantially covered under
the provisions of this Act and other agrarian or
land reform laws: Provided, finally, That a
complementary support services delivery
strategy for existing agrarian reform
beneficiaries that are not in barangays within
the ARCs shall be adopted by the DAR.
AIcECS
"For this purpose, an Agrarian Reform
Community is composed and managed by
agrarian reform beneficiaries who shall be
willing to be organized and to undertake the
integrated development of an area and/or their
organizations/cooperatives. In each
community, the DAR, together with the
agencies and organizations abovementioned,
shall identify the farmers' association,
cooperative or their respective federations
approved by the farmers-beneficiaries that
shall take the lead in the agricultural
development of the area. In addition, the DAR,
in close coordination with the congressional
oversight committee created herein, with due
notice to the concerned representative of the
legislative district prior to implementation shall
be authorized to package proposals and
receive grants, aids and other forms of
financial assistance from any source."
SECTION 14. Section 37 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 37. Support Services for the
Agrarian Reform Beneficiaries. The State
shall adopt the integrated policy of support
services delivery to agrarian reform
beneficiaries. To this end, the DAR, the
Department of Finance, and the Bangko
Sentral ng Pilipinas (BSP) shall institute
reforms to liberalize access to credit by
agrarian reform beneficiaries. The PARC shall
ensure that support services for agrarian
reform beneficiaries are provided, such as:
SaIEcA
"(a) Land surveys and titling;
"(b) Socialized terms on agricultural credit
facilities;
"Thirty percent (30%) of all appropriations for
support services referred to in Section 36 of
Republic Act No. 6657, as amended, shall be
immediately set aside and made available for
agricultural credit facilities: Provided, That
one-third (1/3) of this segregated
appropriation shall be specifically allocated for
subsidies to support the initial capitalization for
agricultural production to new agrarian reform
beneficiaries upon the awarding of the
emancipation patent or the certificate of land
ownership award and the remaining two-thirds
(2/3) shall be allocated to provide access to
socialized credit to existing agrarian reform
beneficiaries, including the leaseholders:
Provided, further, the LBP and other concerned
government financial institutions, accredited
savings and credit cooperatives, financial
service cooperatives and accredited
cooperative banks shall provide the delivery
system for disbursement of the above financial
assistance to individual agrarian reform
beneficiaries, holders of collective titles and
cooperatives. HIEAcC
"For this purpose, all financing institutions may
accept as collateral for loans the purchase
orders, marketing agreements or expected
harvests: Provided, That loans obtained shall
be used in the improvement or development of
the farmholding of the agrarian reform
beneficiary or the establishment of facilities
which shall enhance production or marketing of
agricultural products or increase farm income
therefrom: Provided, further, That of the
remaining seventy percent (70%) for the
support services, fifteen percent (15%) shall
be earmarked for farm inputs as requested by
the duly accredited agrarian reform
beneficiaries' organizations, such as, but not
limited to: (1) seeds, seedlings and/or planting
materials; (2) organic fertilizers; (3)
pesticides; (4) herbicides; and (5) farm
animals, implements/machineries; and five
percent (5%) for seminars, trainings and the
like to help empower agrarian reform
beneficiaries.
"(c) Extension services by way of planting,
cropping, production and post-harvest
technology transfer, as well as marketing and
management assistance and support to
cooperatives and farmers' organizations;
ICTcDA
"(d) Infrastructure such as, but not limited
to, access trails, mini-dams, public utilities,
marketing and storage facilities;
"(e) Research, production and use of
organic fertilizers and other local substances
necessary in farming and cultivation; and
"(f) Direct and active DAR assistance in the
education and organization of actual and
potential agrarian reform beneficiaries, at the
barangay, municipal, city, provincial, and
national levels, towards helping them
understand their rights and responsibilities as
owner-cultivators developing farm-related trust
relationships among themselves and their
neighbors, and increasing farm production and
profitability with the ultimate end of
empowering them to chart their own destiny.
The representatives of the agrarian reform
beneficiaries to the PARC shall be chosen from
the nominees of the duly accredited agrarian
reform beneficiaries' organizations, or in its
absence, from organizations of actual and
potential agrarian reform beneficiaries as
forwarded to and processed by the PARC
EXCOM. DAHEaT
"The PARC shall formulate policies to ensure
that support services for agrarian reform
beneficiaries shall be provided at all stages of
the program implementation with the
concurrence of the concerned agrarian reform
beneficiaries.
"The PARC shall likewise adopt, implement,
and monitor policies and programs to ensure
the fundamental equality of women and men in
the agrarian reform program as well as respect
for the human rights, social protection, and
decent working conditions of both paid and
unpaid men and women farmer-beneficiaries.
"The Bagong Kilusang Kabuhayan sa Kaunlaran
(BKKK) Secretariat shall be transferred and
attached to the LBP, for its supervision
including all its applicable and existing funds,
personnel, properties, equipment and records.
STaCcA
"Misuse or diversion of the financial and
support services herein provided shall result in
sanctions against the beneficiary guilty thereof,
including the forfeiture of the land transferred
to him/her or lesser sanctions as may be
provided by the PARC, without prejudice to
criminal prosecution."
SECTION 15. There shall be incorporated
after Section 37 of Republic Act No. 6657, as
amended, a new section to read as follows:
"SEC. 37-A. Equal Support Services for
Rural Women. Support services shall be
extended equally to women and men agrarian
reform beneficiaries. cHESAD
"The PARC shall ensure that these support
services, as provided for in this Act, integrate
the specific needs and well-being of women
farmer-beneficiaries taking into account the
specific requirements of female family
members of farmer-beneficiaries.
"The PARC shall also ensure that rural women
will be able to participate in all community
activities. To this effect, rural women are
entitled to self-organization in order to obtain
equal access to economic opportunities and to
have access to agricultural credit and loans,
marketing facilities and technology, and other
support services, and equal treatment in land
reform and resettlement schemes.
"The DAR shall establish and maintain a
women's desk, which will be primarily
responsible for formulating and implementing
programs and activities related to the
protection and promotion of women's rights, as
well as providing an avenue where women can
register their complaints and grievances
principally related to their rural activities."
AHEDaI
SECTION 16. Section 38 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 38. Support Services for
Landowners. The PARC, with the assistance
of such other government agencies and
instrumentalities as it may direct, shall provide
landowners affected by the CARP and prior
agrarian reform programs with the following
services:
"(a) Investment information, financial and
counseling assistance, particularly investment
information on government-owned and/or -
controlled corporations and disposable assets
of the government in pursuit of national
industrialization and economic independence:
"(b) Facilities, programs and schemes for
the conversion or exchange of bonds issued for
payment of the lands acquired with stocks and
bonds issued by the National Government, the
BSP and other government institutions and
instrumentalities; aSIDCT
"(c) Marketing of agrarian reform bonds, as
well as promoting the marketability of said
bonds in traditional and non-traditional
financial markets and stock exchanges; and/or
"(d) Other services designed to utilize
productively the proceeds of the sale of such
lands for rural industrialization.
"A landowner who invests in rural-based
industries shall be entitled to the incentives
granted to a registered enterprise engaged in a
pioneer or preferred area of investment as
provided for in the Omnibus Investment Code
of 1987, or to such other incentives as the
PARC, the LBP, or other government financial
institutions shall provide. HESIcT
"The LBP shall redeem a landowner's agrarian
reform bonds at face value as an incentive:
Provided, That at least fifty percent (50%) of
the proceeds thereof shall be invested in a
Board of Investments (BOI)-registered
company or in any agri-business or agro-
industrial enterprise in the region where the
CARP-covered landholding is located. An
additional incentive of two percent (2%) in
cash shall be paid to a landowner who
maintains his/her enterprise as a going
concern for five (5) years or keeps his/her
investments in a BOI-registered firm for the
same period: Provided, further, That the rights
of the agrarian reform beneficiaries are not, in
any way, prejudiced or impaired thereby.
"The DAR, the LBP and the Department of
Trade and Industry shall jointly formulate the
program to carry out these provisions under
the supervision of the PARC: Provided, That in
no case shall the landowners' sex, economic,
religious, social, cultural and political attributes
exclude them from accessing these support
services." SEHTAC
SECTION 17. Section 41 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 41. The Presidential Agrarian
Reform Council. The Presidential Agrarian
Reform Council (PARC) shall be composed of
the President of the Philippines as Chairperson,
the Secretary of Agrarian Reform as Vice-
Chairperson and the following as members:
Secretaries of the Departments of Agriculture;
Environment and Natural Resources; Budget
and Management; Interior and Local
Government; Public Works and Highways;
Trade and Industry; Finance; and Labor and
Employment; Director-General of the National
Economic and Development Authority;
President, Land Bank of the Philippines;
Administrator, National Irrigation
Administration; Administrator, Land
Registration Authority; and six (6)
representatives of affected landowners to
represent Luzon, Visayas and Mindanao; six
(6) representatives of agrarian reform
beneficiaries, two (2) each from Luzon, Visayas
and Mindanao: Provided, That at least one (1)
of them shall be from the indigenous peoples:
Provided, further, That at least one (1) of them
shall come from a duly recognized national
organization of rural women or a national
organization of agrarian reform beneficiaries
with a substantial number of women members:
Provided, finally, That at least twenty percent
(20%) of the members of the PARC shall be
women but in no case shall they be less than
two (2)." cdrep
SECTION 18. Section 50 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 50. Quasi-Judicial Powers of the
DAR. The DAR is hereby vested with primary
jurisdiction to determine and adjudicate
agrarian reform matters and shall have
exclusive original jurisdiction over all matters
involving the implementation of agrarian
reform, except those falling under the
exclusive jurisdiction of the Department of
Agriculture (DA) and the DENR.
"It shall not be bound by technical rules of
procedure and evidence but shall proceed to
hear and decide all cases, disputes or
controversies in a most expeditious manner,
employing all reasonable means to ascertain
the facts of every case in accordance with
justice and equity and the merits of the case.
Toward this end, it shall adopt a uniform rule
of procedure to achieve a just, expeditious and
inexpensive determination of every action or
proceeding before it. ETIHCa
"It shall have the power to summon witnesses,
administer oaths, take testimony, require
submission of reports, compel the production
of books and documents and answers to
interrogatories and issue subpoena, and
subpoena duces tecum and to enforce its writs
through sheriffs or other duly deputized
officers. It shall likewise have the power to
punish direct and indirect contempts in the
same manner and subject to the same
penalties as provided in the Rules of Court.
"Responsible farmer leaders shall be allowed to
represent themselves, their fellow farmers, or
their organizations in any proceedings before
the DAR: Provided, however, That when there
are two or more representatives for any
individual or group, the representatives should
choose only one among themselves to
represent such party or group before any DAR
proceedings.
"Notwithstanding an appeal to the Court of
Appeals, the decision of the DAR shall be
immediately executory except a decision or a
portion thereof involving solely the issue of
just compensation." aIcSED
SECTION 19. Section 50 of Republic Act No.
6657, as amended, is hereby further amended
by adding Section 50-A to read as follows:
"SEC. 50-A. Exclusive Jurisdiction on
Agrarian Dispute. No court or prosecutor's
office shall take cognizance of cases pertaining
to the implementation of the CARP except
those provided under Section 57 of Republic
Act No. 6657, as amended. If there is an
allegation from any of the parties that the case
is agrarian in nature and one of the parties is a
farmer, farmworker, or tenant, the case shall
be automatically referred by the judge or the
prosecutor to the DAR which shall determine
and certify within fifteen (15) days from
referral whether an agrarian dispute exists:
Provided, That from the determination of the
DAR, an aggrieved party shall have judicial
recourse. In cases referred by the municipal
trial court and the prosecutor's office, the
appeal shall be with the proper regional trial
court, and in cases referred by the regional
trial court, the appeal shall be to the Court of
Appeals. EHCcIT
"In cases where regular courts or quasi-judicial
bodies have competent jurisdiction, agrarian
reform beneficiaries or identified beneficiaries
and/or their associations shall have legal
standing and interest to intervene concerning
their individual or collective rights and/or
interests under the CARP.
"The fact of non-registration of such
associations with the Securities and Exchange
Commission, or Cooperative Development
Authority, or any concerned government
agency shall not be used against them to deny
the existence of their legal standing and
interest in a case filed before such courts and
quasi-judicial bodies."
SECTION 20. Section 55 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows: ECaAHS
"SEC. 55. No Restraining Order or
Preliminary Injunction. Except for the
Supreme Court, no court in the Philippines
shall have jurisdiction to issue any restraining
order or writ of preliminary injunction against
the PARC, the DAR, or any of its duly
authorized or designated agencies in any case,
dispute or controversy arising from, necessary
to, or in connection with the application,
implementation, enforcement, or interpretation
of this Act and other pertinent laws on agrarian
reform."
SECTION 21. Section 63 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 63. Funding Source. The amount
needed to further implement the CARP as
provided in this Act, until June 30, 2014, upon
expiration of funding under Republic Act No.
8532 and other pertinent laws, shall be funded
from the Agrarian Reform Fund and other
funding sources in the amount of at least One
hundred fifty billion pesos
(P150,000,000,000.00). CASTDI
"Additional amounts are hereby authorized to
be appropriated as and when needed to
augment the Agrarian Reform Fund in order to
fully implement the provisions of this Act
during the five (5)-year extension period.
"Sources of funding or appropriations shall
include the following:
"(a) Proceeds of the sales of the
Privatization and Management Office (PMO);
"(b) All receipts from assets recovered and
from sales of ill-gotten wealth recovered
through the PCGG excluding the amount
appropriated for compensation to victims of
human rights violations under the applicable
law; ITCcAD
"(c) Proceeds of the disposition and
development of the properties of the
Government in foreign countries, for the
specific purposes of financing production
credits, infrastructure and other support
services required by this Act;
"(d) All income and collections of whatever
form and nature arising from the agrarian
reform operations, projects and programs of
the DAR and other CARP implementing
agencies;
"(e) Portion of amounts accruing to the
Philippines from all sources of official foreign
aid grants and concessional financing from all
countries, to be used for the specific purposes
of financing productions, credits,
infrastructures, and other support services
required by this Act; SCcHIE
"(f) Yearly appropriations of no less than
Five billion pesos (P5,000,000,000.00) from
the General Appropriations Act;
"(g) Gratuitous financial assistance from
legitimate sources; and
(h) Other government funds not otherwise
appropriated.
"All funds appropriated to implement the
provisions of this Act shall be considered
continuing appropriations during the period of
its implementation: Provided, That if the need
arises, specific amounts for bond redemptions,
interest payments and other existing
obligations arising from the implementation of
the program shall be included in the annual
General Appropriations Act: Provided, further,
That all just compensation payments to
landowners, including execution of judgments
therefor, shall only be sourced from the
Agrarian Reform Fund: Provided, however,
That just compensation payments that cannot
be covered within the approved annual budget
of the program shall be chargeable against the
debt service program of the national
government, or any unprogrammed item in the
General Appropriations Act: Provided, finally,
That after the completion of the land
acquisition and distribution component of the
CARP, the yearly appropriation shall be
allocated fully to support services, agrarian
justice delivery and operational requirements
of the DAR and the other CARP implementing
agencies." IaAEHD
SECTION 22. Section 65 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 65. Conversion of Lands. After
the lapse of five (5) years from its award,
when the land ceases to be economically
feasible and sound for agricultural purposes, or
the locality has become urbanized and the land
will have a greater economic value for
residential, commercial or industrial purposes,
the DAR, upon application of the beneficiary or
the landowner with respect only to his/her
retained area which is tenanted, with due
notice to the affected parties, and subject to
existing laws, may authorize the person, natural or juridical, except those under
reclassification or conversion of the land and collective ownership by farmer-beneficiaries;
its disposition: Provided, That if the applicant is
a beneficiary under agrarian laws and the land "(b) The forcible entry or illegal detainer by
sought to be converted is the land awarded to persons who are not qualified beneficiaries
him/her or any portion thereof, the applicant, under this Act to avail themselves of the rights
after the conversion is granted, shall invest at and benefits of the Agrarian Reform Program;
least ten percent (10%) of the proceeds
"(c) Any conversion by any landowner of
coming from the conversion in government
his/her agricultural land into any non-
securities: Provided, further, That the applicant
agricultural use with intent to avoid the
upon conversion shall fully pay the price of the
application of this Act to his/her landholdings
land: Provided, furthermore, That irrigated and
and to dispossess his/her bonafide tenant
irrigable lands, shall not be subject to
farmers; DTAIaH
conversion: Provided, finally, That the National
Irrigation Administration shall submit a
"(d) The malicious and willful prevention or
consolidated data on the location nationwide of
obstruction by any person, association or
all irrigable lands within one (1) year from the
entity of the implementation of the CARP;
effectivity of this Act. ATSIED
"(e) The sale, transfer, conveyance or
"Failure to implement the conversion plan
change of the nature of lands outside of urban
within five (5) years from the approval of such
centers and city limits either in whole or in part
conversion plan or any violation of the
after the effectivity of this Act, except after
conditions of the conversion order due to the
final completion of the appropriate conversion
fault of the applicant shall cause the land to
under Section 65 of Republic Act No. 6657, as
automatically be covered by CARP."
amended. The date of the registration of the
deed of conveyance in the Register of Deeds
SECTION 23. Section 68 of Republic Act No.
with respect to titled lands and the date of the
6657, as amended, is hereby further amended
issuance of the tax declaration to the
to read as follows:
transferee of the property with respect to
"SEC. 68. Immunity of Government unregistered lands, as the case may be, shall
Agencies from Undue Interference. In cases be conclusive for the purpose of this Act;
falling within their jurisdiction, no injunction,
"(f) The sale, transfer or conveyance by a
restraining order, prohibition or mandamus
beneficiary of the right to use or any other
shall be issued by the regional trial courts,
usufructuary right over the land he/she
municipal trial courts, municipal circuit trial
acquired by virtue of being a beneficiary, in
courts, and metropolitan trial courts against
order to circumvent the provisions of this Act;
the DAR, the DA, the DENR, and the
acHETI
Department of Justice in their implementation
of the Program."
"(g) The unjustified, willful, and malicious
act by a responsible officer or officers of the
SECTION 24. Section 73 of Republic Act No.
government through the following:
6657, as amended, is hereby further amended
to read as follows: SEIDAC
"(1) The denial of notice and/or reply to
landowners;
"SEC. 73. Prohibited Acts and Omissions.
The following are prohibited:
"(2) The deprivation of retention rights;
"(a) The ownership or possession, for the
"(3) The undue or inordinate delay in the
purpose of circumventing the provisions of this
preparation of claim folders; or
Act, of agricultural lands in excess of the total
retention limits or award ceilings by any
"(4) Any undue delay, refusal or failure in
the payment of just compensation; cCTIaS
"(h) The undue delay or unjustified failure
of the DAR, the LBP, the PARC, the PARCCOM,
and any concerned government agency or any
government official or employee to submit the
required report, data and/or other official
document involving the implementation of the
provisions of this Act, as required by the
parties or the government, including the House
of Representatives and the Senate of the
Philippines as well as their respective
committees, and the congressional oversight
committee created herein;
"(i) The undue delay in the compliance
with the obligation to certify or attest and/or
falsification of the certification or attestation as
required under Section 7 of Republic Act No.
6657, as amended; and
"(j) Any other culpable neglect or willful
violations of the provisions of this Act.
TCaEIc
"In the case of government officials and
employees, a conviction under this Act is
without prejudice to any civil case and/or
appropriate administrative proceedings under
civil service law, rules and regulations.
"Any person convicted under this Act shall not
be entitled to any benefit provided for in any
agrarian reform law or program."
SECTION 25. Section 74 of Republic Act No.
6657, as amended, is hereby further amended
to read as follows:
"SEC. 74. Penalties. Any person who
knowingly or willfully violates the provisions of
this Act shall be punished by imprisonment of
not less than one (1) month to not more than
three (3) years or a fine of not less than One
thousand pesos (P1,000.00) and not more
than Fifteen thousand pesos (P15,000.00), or
both, at the discretion of the court: Provided,
That the following corresponding penalties
shall be imposed for the specific violations
hereunder: cEAIHa
"(a) Imprisonment of three (3) years and
one (1) day to six (6) years or a fine of not
less than Fifty thousand pesos (P50,000.00)
and not more than One hundred fifty thousand
pesos (P150,000.00), or both, at the discretion
of the court upon any person who violates
Section 73, subparagraphs (a), (b), (f), (g),
and (h) of Republic Act No. 6657, as amended;
and
"(b) Imprisonment of six (6) years and one
(1) day to twelve (12) years or a fine of not
less than Two hundred thousand pesos
(P200,000.00) and not more than One million
pesos (P1,000,000.00), or both, at the
discretion of the court upon any person who
violates Section 73, subparagraphs (c), (d),
(e), and (i) of Republic Act No. 6657, as
amended.
"If the offender is a corporation or association,
the officer responsible therefor shall be
criminally liable." IHCSTE
SECTION 26. Congressional Oversight
Committee. A Congressional Oversight
Committee on Agrarian Reform (COCAR) is
hereby created to oversee and monitor the
implementation of this Act. It shall be
composed of the Chairpersons of the
Committee on Agrarian Reform of both Houses
of Congress, three (3) Members of the House
of Representatives, and three (3) Members of
the Senate of the Philippines, to be designated
respectively by the Speaker of the House of
Representatives and the President of the
Senate of the Philippines.
The Chairpersons of the Committees on
Agrarian Reform of the House of
Representatives and of the Senate of the
Philippines shall be the Chairpersons of the
COCAR. The Members shall receive no
compensation; however, traveling and other
necessary expenses shall be allowed.
In order to carry out the objectives of this Act,
the COCAR shall be provided with the
necessary appropriations for its operation. An
initial amount of Twenty-five million pesos
(P25,000,000.00) is hereby appropriated for
the COCAR for the first year of its operation
and the same amount shall be appropriated
every year thereafter. CAaDTH
The term of the COCAR shall end six (6)
months after the expiration of the extended
period of five (5) years.
SECTION 27. Powers and Functions of the
COCAR. The COCAR shall have the following
powers and functions:
(a) Prescribe and adopt guidelines which
shall govern its work;
(b) Hold hearings and consultations,
receive testimonies and reports pertinent to its
specified concerns;
(c) Secure from any department, bureau,
office or instrumentality of the government
such assistance as may be needed, including
technical information, preparation and
production of reports and submission of
recommendations or plans as it may require,
particularly a yearly report of the record or
performance of each agrarian reform
beneficiary as provided under Section 22 of
Republic Act No. 6657, as amended; DaTHAc
(d) Secure from the DAR or the LBP
information on the amount of just
compensation determined to be paid or which
has been paid to any landowner;
(e) Secure from the DAR or the LBP
quarterly reports on the disbursement of funds
for the agrarian reform program;
(f) Oversee and monitor, in such a
manner as it may deem necessary, the actual
implementation of the program and projects by
the DAR;
(g) Summon by subpoena any public or
private citizen to testify before it, or require by
subpoena duces tecum to produce before it
such records, reports, or other documents as
may be necessary in the performance of its
functions; aEIADT
(h) Engage the services of resource
persons from the public and private sectors as
well as civil society including the various
agrarian reform groups or organizations in the
different regions of the country as may be
needed;
(i) Approve the budget for the work of the
Committee and all disbursements therefrom,
including compensation of all personnel;
(j) Organize its staff and hire and appoint
such employees and personnel whether
temporary, contractual or on consultancy,
subject to applicable rules; and
(k) Exercise all the powers necessary and
incidental to attain the purposes for which it is
created. ACcHIa
SECTION 28. Periodic Reports. The COCAR
shall submit to the Speaker of the House of
Representatives and to the President of the
Senate of the Philippines periodic reports on its
findings and recommendations on actions to be
undertaken by both Houses of Congress, the
DAR, and the PARC.
SECTION 29. Access to Information.
Notwithstanding the provisions of Republic Act
No. 1405 and other pertinent laws, information
on the amount of just compensation paid to
any landowner under Republic Act No. 6657, as
amended, and other agrarian reform laws shall
be deemed public information.
SECTION 30. Resolution of Cases. Any
case and/or proceeding involving the
implementation of the provisions of Republic
Act No. 6657, as amended, which may remain
pending on June 30, 2014 shall be allowed to
proceed to its finality and be executed even
beyond such date. TSacCH
SECTION 31. Implementing Rules and
Regulations. The PARC and the DAR shall
provide the necessary implementing rules and
regulations within thirty (30) days upon the
approval of this Act. Such rules and regulations
shall take effect on July 1, 2009 and it shall be
published in at least two (2) newspapers of
general circulation.
SECTION 32. Repealing Clause. Section 53
of Republic Act No. 3844, otherwise known as
the Agricultural Land Reform Code, is hereby
repealed and all other laws, decrees, executive
orders, issuances, rules and regulations, or
parts thereof inconsistent with this Act are
hereby likewise repealed or amended
accordingly.
SECTION 33. Separability Clause. If, for
any reason, any section or provision of this Act
is declared unconstitutional or invalid, the
other sections or provisions not affected
thereby shall remain in full force and effect.
SECTION 34. Effectivity Clause. This Act
shall take effect on July 1, 2009 and it shall be
published in at least two (2) newspapers of
general circulation. SHacCD
Approved: August 7, 2009
EXECUTIVE ORDER NO. 228
CREATING THE PRESIDENTIAL EMERGENCY
EMPLOYMENT OFFICE, DEFINING ITS POWERS
AND FUNCTIONS, AND FOR OTHER PURPOSES
WHEREAS, it is the government's thrust to
create labor intensive projects that will
generate employment and livelihood for
marginalized families, especially out-of-school
youth; SHTEaA
WHEREAS, the country has resources that can
be transformed into viable income and
livelihood opportunities by introducing creative
projects and programs;
WHEREAS, there are strategically-located
vacant or idle government and GOCC's lands
that can be used as vending sites for displaced
street vendors, small entrepreneurs and other
Small and Medium Enterprises (SMEs), or as
venue for information dissemination campaign
of various government agencies, or be utilized
as farming lands for vegetable/crop production
for the landless and/or the employed in the
countryside;
WHEREAS, there is a great and urgent need to
make use of all available resources to alleviate
poverty in the country;
WHEREAS, pursuant to Section 31, Chapter 10,
Title III, Book III of the Administrative Code of
1987, the President has the continuing
authority to reorganize the administrative
structure of the government.
NOW, THEREFORE, I, GLORIA MACAPAGAL-
ARROYO, President of the Philippines, by virtue
of the powers vested in me by law, do hereby
order:
SECTION 1. Creation. The Presidential
Emergency Employment Office (PEEO) is
hereby created under the Office of the
President, to be headed by the Presidential
Adviser for Poverty Alleviation who shall have
the rank and emoluments of a Cabinet
Secretary.
SECTION 2. Powers and Functions. The
PEEO shall have the following powers and
functions.
a. To design, conceptualize, adopt,
implement and monitor a comprehensive
Emergency Employment in consonance with
the job generation program of the government,
in coordination with the Department of Labor
and Employment; cISAHT
b. To serve as a coordinating forum for
various policies, laws, rules, and regulations
that need to be revised, amended or proposed,
in order to attain job creation;
c. To generate and mobilize resources
from domestic and foreign resources for the
implementation of the Job Creation Plan,
subject to existing rules and regulations;
d. To recommend to the President
policies, strategies and programs aimed at
promoting the job creation program of the
government;
e. To submit periodic reports to the
President on the status of programs and
projects undertaken; and
f. To perform such other functions as the
President may direct.
SECTION 3. Inter-Agency Coordination.
All concerned departments and their attached
agencies, LGU's, government-owned and
controlled corporations and other
instrumentalities of the government are hereby
directed to assist, cooperate and give full
support to the PEEO to ensure effective
performance of its powers and functions.
SECTION 4. Funding. Funding for the
initial operations of the PEEO shall be provided
by the Office of the President. Appropriations
for the succeeding years shall be included in
the budget proposal for the Office of the
President.
SECTION 5. Administrative and
Implementing Guidelines. The PEEO shall
issue administrative guidelines as may be
necessary to implement this Executive Order.
SECTION 6. Repealing Clause. All orders,
rules, regulations and issuances, or parts
thereof, which are inconsistent with this
Executive Order, are hereby repealed or
modified accordingly.
SECTION 7. Effectivity. This Executive
Order shall take effect immediately. DASCIc
DONE in the City of Manila, this 14th day of
July, in the year of Our Lord, Two Thousand
and Three.
EN BANC
[G.R. No. 78742. July 14, 1989.]
ASSOCIATION OF SMALL LANDOWNERS IN
THE PHILIPPINES, INC., JUANITO D. GOMEZ,
GERARDO B. ALARCIO, FELIFE A. GUICO, JR.,
BERNARDO M. ALMONTE, CANUTO RAMIR B.
CABRITO, ISIDRO T. GUICO, FELISA I.
LLAMIDO, FAUSTO J. SALVA, REYNALDO G.
ESTRADA, FELISA C. BAUTISTA, ESMENIA J.
CABE, TEODORO B. MADRIAGA, AUREA J.
PRESTOSA, EMERENCIANA J. ISLA,
FELICISIMA C. APRESTO, CONSUELO M.
MORALES, BENJAMIN R. SEGISMUNDO, CIRILA
A. JOSE & NAPOLEON S. FERRER, petitioners,
vs. HONORABLE SECRETARY OF AGRARIAN
REFORM, respondent.
[G.R. No. 79310. July 14, 1989.]
ARSENIO AL. ACUA, NEWTON JISON,
VICTORINO FERRARIS, DENNIS JEREZA,
HERMINIGILDO GUSTILO, PAULINO D.
TOLENTINO and PLANTERS' COMMITTEE, INC.,
Victorias Mill District, Victorias, Negros
Occidental, petitioners, vs. JOKER ARROYO,
PHILIP E. JUICO and PRESIDENTIAL AGRARIAN
REFORM COUNCIL, respondents.
[G.R. No. 79744. July 14, 1989.]
INOCENTES PABICO, petitioner, vs. HON.
PHILIP E. JUICO, SECRETARY OF THE
DEPARTMENT OF AGRARIAN REFORM, HON.
JOKER ARROYO, EXECUTIVE SECRETARY OF
THE OFFICE OF THE PRESIDENT, and Messrs.
SALVADOR TALENTO, JAIME ABOGADO,
CONRADO AVANCEA, and ROBERTO TAAY,
respondents.
[G.R. No. 79777. July 14, 1989.]
NICOLAS S. MANAAY and AGUSTIN HERMANO,
JR., petitioners, vs. HON. PHILIP ELLA JUICO,
as Secretary of Agrarian Reform, and LAND
BANK OF THE PHILIPPINES, respondents.
SYLLABUS
1. CONSTITUTIONAL LAW; SUPREME
COURT; ROLE. Although holding neither
purse nor sword and so regarded as the
weakest of the three departments of the
government, the judiciary is nonetheless
vested with the power to annul the acts of
either the legislative or the executive or of
both when not conformable to the fundamental
law. This is the reason for what some quarters
call the doctrine of judicial supremacy.
2. ID.; SEPARATION OF POWERS;
CONSTRUED. The doctrine of separation of
powers imposes upon the courts a proper
restraint, born of the nature of their functions
and of their respect for the other departments,
in striking down the acts of the legislative and
the executive as unconstitutional. The policy,
indeed, is a blend of courtesy and caution. To
doubt is to sustain. The theory is that before
the act was done or the law was enacted,
earnest studies were made by Congress or the
President, or both, to insure that the
Constitution would not be breached.
3. ID.; SUPREME COURT; POWER TO
DECLARE AN ACT OR LAW
UNCONSTITUTIONAL; CONDITIONS. The
Constitution itself lays down stringent
conditions for a declaration of
unconstitutionality, requiring therefor the
concurrence of a majority of the members of
the Supreme Court who took part in the
deliberations and voted on the issue during
their session en banc.
4. ID.; ID.; ID.; JUDICIAL INQUIRY;
REQUISITES. The Court will assume
jurisdiction over a constitutional question only
if it is shown that the essential requisites of a
judicial inquiry into such a question are first
satisfied. Thus, there must be an actual case
or controversy involving a conflict of legal
rights susceptible of judicial determination, the
constitutional question must have been
opportunely raised by the proper party, and
the resolution of the question is unavoidably
necessary to the decision of the case itself.
5. REMEDIAL LAW; ACTIONS; PROPER
PARTY; CASE AT BAR. With particular regard
to the requirement of proper party as applied
in the cases before us, we hold that the same
is satisfied by the petitioners and intervenors
because each of them has sustained or is in
danger of sustaining an immediate injury as a
result of the acts or measures complained of.
6. CONSTITUTIONAL LAW; SUPREME
COURT; POWER TO DECLARE AN ACT OR LAW
UNCONSTITUTIONAL; TRIBUNAL WITH WIDE
DISCRETION TO WAIVE REQUIREMENT.
Even if, strictly speaking, they are not covered
by the definition, it is still within the wide
discretion of the Court to waive the
requirement and so remove the impediment to
its addressing and resolving the serious
constitutional questions raised.
7. ID.; ID.; JUDICIAL SUPREMACY. . . .
When the judiciary mediates to allocate
constitutional boundaries, it does not assert
any superiority over the other departments; it
does not in reality nullify or invalidate an act of
the Legislature, but only asserts the solemn
and sacred obligation assigned to it by the
Constitution to determine conflicting claims of
authority under the Constitution and to
establish for the parties in an actual
controversy the rights which that instrument
secures and guarantees to them. This is in
truth all that is involved in what is termed
"judicial supremacy" which properly is the
power of judicial review under the Constitution.
8. ID.; 1973 CONSTITUTION;
PRESIDENT; EXERCISE OF LEGISLATIVE
POWER DURING MARTIAL LAW, SUSTAINED.
The promulgation of P.D. No. 27 by
President Marcos in the exercise of his powers
under martial law has already been sustained
in Gonzales v. Estrella and we find no reason
to modify or reverse it on that issue.
9. ID.; 1987 CONSTITUTION;
PRESIDENT; LEGISLATIVE POWER,
AUTHORIZED. As for the power of President
Aquino to promulgate Proc. No. 131 and E.O.
Nos. 228 and 229, the same was authorized
under Section 6 of the Transitory Provisions of
the 1987 Constitution, quoted above. The said
measures were issued by President Aquino
before July 27, 1987, when the Congress of
the Philippines was formally convened and took
over legislative power from her. They are not
"midnight" enactments intended to pre-empt
the legislature because E.O. No. 228 was
issued on July 17, 1987, and the other
measures, i.e., Proc. No. 131 and E.O. No.
229, were both issued on July 22, 1987.
10. ID.; ID.; ID.; MEASURES
PROMULGATED REMAINS VALID EVEN AFTER
LOSS OF LEGISLATIVE POWER; RATIONALE.
Neither is it correct to say that these measures
ceased to be valid when she lost her legislative
power for, like any statute, they continue to be
in force unless modified or repealed by
subsequent law or declared invalid by the
courts. A statute does not ipso facto become
inoperative simply because of the dissolution of
the legislature that enacted it. By the same
token, President Aquino's loss of legislative
power did not have the effect of invalidating all
the measures enacted by her when and as long
as she possessed it.
11. ID.; STATUTES; PROCLAMATION
REMAINS VALID EVEN AFTER LOSS OF
LEGISLATIVE POWER; RATIONALE. Proc.
No. 131 is not an appropriation measure even
if it does provide for the creation of said fund,
for that is not its principal purpose. An
appropriation law is one the primary and
specific purpose of which is to authorize the
release of public funds from the treasury. The
creation of the fund is only incidental to the
main objective of the proclamation, which is
agrarian reform.
12. ID.; ID.; PROCLAMATION NO. 131 AND
EXECUTIVE ORDER NO. 229; ABSENCE OF
RETENTION LIMIT PROVIDED FOR IN
REPUBLIC ACT NO. 6657. The argument of
some of the petitioners that Proc. No. 131 and
E.O. No. 229 should be invalidated because
they do not provide for retention limits as
required by Article XIII, Section 4 of the
Constitution is no longer tenable. R.A. No.
6657 does provide that in no case shall
retention by the landowner exceed five (5)
hectares. three (3) hectares may be awarded
to each child of the landowner, subject to two
(2) qualification which is now in Section 6 of
the law.
13. ID.; ID.; TITLE OF A BILL NEED NOT
BE CATALOGUED. The title of the bill does
not have to be a catalogue of its contents and
will suffice if the matters embodied in the text
are relevant to each other and may be inferred
from the title.
14. CIVIL LAW; EFFECT AND APPLICATION
OF LAWS; ISSUANCES FROM THE PRESIDENT
REQUIRE PUBLICATION FOR EFFECTIVITY.
But for all their peremptoriness, these
issuances from the President Marcos still had
to comply with the requirement for publication
as this Court held in Taada v. Tuvera. Hence,
unless published in the Official Gazette in
accordance with Article 2 of the Civil Code,
they could not have any force and effect if they
were among those enactments successfully
challenged in that case. (LOI 474 was
published, though, in the Official Gazette dated
November 29, 1976.)
15. REMEDIAL LAW; SPECIAL CIVIL
ACTION; MANDAMUS; OFFICE. Mandamus
will lie to compel the discharge of the
discretionary duty itself but not to control the
discretion to be exercised. In other words,
mandamus can issue to require action only but
not specific action.
16. ID.; ID.; ID.; GENERALLY NOT
AVAILABLE WHERE THERE IS A PLAIN, SPEEDY
REMEDY; EXCEPTION. While it is true that
as a rule the writ will not be proper as long as
there is still a plain, speedy and adequate
remedy available from the administrative
authorities, resort to the courts may still be
permitted if the issue raised is a question of
law.
17. POLITICAL LAW; POLICE POWER AND
EMINENT DOMAIN; TRADITIONAL
DISTINCTIONS. There are traditional
distinctions between the police power and the
power of eminent domain that logically
preclude the application of both powers at the
same time on the same subject. The cases
before us present no knotty complication
insofar as the question of compensable taking
is concerned. To the extent that the measures
under challenge merely prescribe retention
limits for landowners, there is an exercise of
the police power for the regulation of private
property in accordance with the Constitution.
But where, to carry out such regulation, it
becomes necessary to deprive such owners of
whatever lands they may own in excess of the
maximum area allowed, there is definitely a
taking under the power of eminent domain for
which payment of just compensation is
imperative. The taking contemplated is not a
mere limitation of the use of the land. What is
required is the surrender of the title to and the
physical possession of the said excess and all
beneficial rights accruing to the owner in favor
of the farmer-beneficiary. This is definitely an
exercise not of the police power but of the
power of eminent domain.
18. BILL OF RIGHTS; EQUAL PROTECTION
CLAUSE; CLASSIFICATION; DEFINED.
Classification has been defined as the grouping
of persons or things similar to each other in
certain particulars and different from each
other in these same particulars.
19. ID.; ID.; ID.; REQUISITES.; EQUAL
PROTECTION CLAUSE; CLASSIFICATION;
DEFINED. To be valid, it must conform to
the following requirements: (1) it must be
based on substantial distinctions; (2) it must
be germane to the purposes of the law; (3) it
must not be limited to existing conditions only;
and (4) it must apply equally to all the
members of the class.
20. ID.; ID.; ID.; MEANING. Equal
protection simply means that all persons or
things similarly situated must be treated alike
both as to the rights conferred and the
liabilities imposed.
21. POLITICAL LAW; EMINENT DOMAIN;
NATURE. Eminent domain is an inherent
power of the State that enables it to forcibly
acquire private lands intended for public use
upon payment of just compensation to the
owner.
22. ID.; ID.; WHEN AVAILED OF.
Obviously, there is no need to expropriate
where the owner is willing to sell under terms
also acceptable to the purchaser, in which case
an ordinary deed of sale may be agreed upon
by the parties. It is only where the owner is
unwilling to sell, or cannot accept the price or
other conditions offered by the vendee, that
the power of eminent domain will come into
play to assert the paramount authority of the
State over the interests of the property owner.
Private rights must then yield to the irresistible
demands of the public interest on the time-
honored justification, as in the case of the
police power, that the welfare of the people is
the supreme law.
23. ID.; ID.; REQUIREMENTS. Basically,
the requirements for a proper exercise of the
power are: (1) public use and (2) just
compensation.
24. ID.; POLITICAL QUESTION; DEFINED.
The term "political question" connotes what
it means in ordinary parlance, namely, a
question of policy. It refers to "those questions
which, under the Constitution, are to be
decided by the people in their sovereign
capacity; or in regard to which full
discretionary authority has been delegated to
the legislative or executive branch of the
government." It is concerned with issues
dependent upon the wisdom, not legality, of a
particular measure. (Taada vs. Cuenco, 100
Phil. 1101)
25. ID.; EMINENT DOMAIN JUST
COMPENSATION; DEFINED. Just
compensation is defined as the full and fair
equivalent of the property taken from its owner
by the expropriator.
26. ID.; ID.; ID.; WORD "JUST",
EXPLAINED. It has been repeatedly stressed
by this Court that the measure is not the
taker's gain but the owner's loss. The word
"just" is used to intensify the meaning of the
word "compensation" to convey the idea that
the equivalent to be rendered for the property
to be taken shall be real, substantial, full,
ample.
27. ID.; ID.; ID.; COMPENSABLE TAKING;
CONDITIONS. There is compensable taking
when the following conditions concur: (1) the
expropriator must enter a private property; (2)
the entry must be for more than a momentary
period; (3) the entry must be under warrant or
color of legal authority; (4) the property must
be devoted to public use or otherwise
informally appropriated or injuriously affected;
and (5) the utilization of the property for public
use must be in such a way as to oust the
owner and deprive him of beneficial enjoyment
of the property.
28. ID.; ID.; ID.; DEPOSIT NOT
NECESSARY WHERE THE EXPROPRIATOR IS
THE ESTATE. Where the State itself is the
expropriator, it is not necessary for it to make
a deposit upon its taking possession of the
condemned property, as "the compensation is
a public charge, the good faith of the public is
pledged for its payment, and all the resources
of taxation may be employed in raising the
amount."
29. ID.; ID.; ID.; DETERMINATION
THEREOF, ADDRESSED TO THE COURTS OF
JUSTICE. The determination of just
compensation is a function addressed to the
courts of justice and may not be usurped by
any other branch or official of the government.
30. ID.; ID.; ID.; EMINENT DOMAIN
UNDER THE COMPREHENSIVE AGRARIAN
REFORM LAW; DETERMINATION MADE BY THE
DEPARTMENT OF AGRARIAN RELATIONS, ONLY
PRELIMINARY. The determination of the just
compensation by the DAR is not by any means
final and conclusive upon the landowner or any
other interested party, for Section 16 (f)
clearly provides: Any party who disagrees with
the decision may bring the matter to the court
of proper jurisdiction for final determination of
just compensation. The determination made by
the DAR is only preliminary unless accepted by
all parties concerned. Otherwise, the courts of
justice will still have the right to review with
finality the said determination in the exercise
of what is admittedly a judicial function.
31. ID.; ID.; ID.; PAYMENT IN MONEY
ONLY NOT APPLICABLE IN REVOLUTIONARY
KIND OF EXPROPRIATION. We do not deal
here with the traditional exercise of the power
of eminent domain. This is not an ordinary
expropriation where only a specific property of
relatively limited area is sought to be taken by
the State from its owner for a specific and
perhaps local purpose. What we deal with here
is a revolutionary kind of expropriation. The
expropriation before us affects all private
agricultural lands whenever found and of
whatever kind as long as they are in excess of
the maximum retention limits allowed their
owners. Such a program will involve not mere
millions of pesos. The cost will be tremendous.
Considering the vast areas of land subject to
expropriation under the laws before us, we
estimate that hundreds of billions of pesos will
be needed, far more indeed than the amount
of P50 billion initially appropriated, which is
already staggering as it is by our present
standards. The Court has not found in the
records of the Constitutional Commission any
categorical agreement among the members
regarding the meaning to be given the concept
of just compensation as applied to the
comprehensive agrarian reform program being
contemplated. On the other hand, there is
nothing in the records either that militates
against the assumptions we are making of the
general sentiments and intention of the
members on the content and manner of the
payment to be made to the landowner in the
light of the magnitude of the expenditure and
the limitations of the expropriator. Therefore,
payment of the just compensation is not
always required to be made fully in money.
32. ID.; ID.; ID.; PRINCIPLE THAT TITLE
SHALL PASS ONLY UPON FULL PAYMENT OF
JUST COMPENSATION, NOT APPLICABLE.
Title to the property expropriated shall pass
from the owner to the expropriator only upon
full payment of the just compensation. The
CARP Law, for its part, conditions the transfer
of possession and ownership of the land to the
government on receipt by the landowner of the
corresponding payment or the deposit by the
DAR of the compensation in cash or LBP bonds
with an accessible bank. Until then, title also
remains with the landowner. No outright
change of ownership is contemplated either.
Hence, that the assailed measures violate due
process by arbitrarily transferring title before
the land is fully paid for must also be rejected.
33. ADMINISTRATIVE LAW; EXHAUSTION
OF ADMINISTRATIVE REMEDIES; CASE AT
BAR. It does not appear in G.R. No. 78742
that the appeal filed by the petitioners with the
Office of the President has already been
resolved. Although we have said that the
doctrine of exhaustion of administrative
remedies need not preclude immediate resort
to judicial action, there are factual issues that
have yet to be examined on the administrative
level, especially the claim that the petitioners
are not covered by LOI 474 because they do
not own other agricultural lands than the
subjects of their petition. Obviously, the Court
cannot resolve these issues.
DECISION
CRUZ, J p:
In ancient mythology, Antaeus was a terrible
giant who blocked and challenged Hercules for
his life on his way to Mycenae after performing
his eleventh labor. The two wrestled mightily
and Hercules flung his adversary to the ground
thinking him dead, but Antaeus rose even
stronger to resume their struggle. This
happened several times to Hercules' increasing
amazement. Finally, as they continued
grappling, it dawned on Hercules that Antaeus
was the son of Gaea and could never die as
long as any part of his body was touching his
Mother Earth. Thus forewarned, Hercules then
held Antaeus up in the air, beyond the reach of
the sustaining soil, and crushed him to death.
Mother Earth. The sustaining soil. The giver of
life, without whose invigorating touch even the
powerful Antaeus weakened and died.
The cases before us are not as fanciful as the
foregoing tale. But they also tell of the
elemental forces of life and death, of men and
women who, like Antaeus, need the sustaining
strength of the precious earth to stay alive.
"Land for the Landless" is a slogan that
underscores the acute imbalance in the
distribution of this precious resource among
our people. But it is more than a slogan.
Through the brooding centuries, it has become
a battlecry dramatizing the increasingly urgent
demand of the dispossessed among us for a
plot of earth as their place in the sun. cdasia
Recognizing this need, the Constitution in 1935
mandated the policy of social justice to "insure
the well-being and economic security of all the
people," 1 especially the less privileged. In
1973, the new Constitution affirmed this goal,
adding specifically that "the State shall
regulate the acquisition, ownership, use,
enjoyment and disposition of private property
and equitably diffuse property ownership and
profits.' 2 Significantly, there was also the
specific injunction to "formulate and implement
an agrarian reform program aimed at
emancipating the tenant from the bondage of
the soil." 3
The Constitution of 1987 was not to be
outdone. Besides echoing these sentiments, it
also adopted one whole and separate Article
XIII on Social Justice and Human Rights,
containing grandiose but undoubtedly sincere
provisions for the uplift of the common people.
These include a call in the following words for
the adoption by the State of an agrarian
reform program:
SEC. 4. The State shall, by law, undertake an
agrarian reform program founded on the right
of farmers and regular farmworkers, who are
landless, to own directly or collectively the
lands they till or, in the case of other
farmworkers, to receive a just share of the
fruits thereof. To this end, the State shall
encourage and undertake the just distribution
of all agricultural lands, subject to such
priorities and reasonable retention limits as the
Congress may prescribe, taking into account
ecological, developmental, or equity
considerations and subject to the payment of
just compensation. In determining retention
limits, the State shall respect the right of small
landowners. The State shall further provide
incentives for voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise
known as the Agricultural Land Reform Code,
had already been enacted by the Congress of
the Philippines on August 8, 1963, in line with
the above-stated principles. This was
substantially superseded almost a decade later
by P.D. No. 27, which was promulgated on
October 21, 1972, along with martial law, to
provide for the compulsory acquisition of
private lands for distribution among tenant-
farmers and to specify maximum retention
limits for landowners.
The people power revolution of 1986 did not
change and indeed even energized the thrust
for agrarian reform. Thus, on July 17, 1987,
President Corazon C. Aquino issued E.O. No.
228, declaring full land ownership in favor of
the beneficiaries of P.D. No. 27 and providing
for the valuation of still unvalued lands covered
by the decree as well as the manner of their
payment. This was followed on July 22, 1987
by Presidential Proclamation No. 131,
instituting a comprehensive agrarian reform
program (CARP), and E.O. No. 229, providing
the mechanics for its implementation.
Subsequently, with its formal organization, the
revived Congress of the Philippines took over
legislative power from the President and
started its own deliberations, including
extensive public hearings, on the improvement
of the interests of farmers. The result, after
almost a year of spirited debate, was the
enactment of R.A. No. 6657, otherwise known
as the Comprehensive Agrarian Reform Law of
1988, which President Aquino signed on June
10, 1988. This law, while considerably
changing the earlier mentioned enactments,
nevertheless gives them suppletory effect
insofar as they are not inconsistent with its
provisions. 4
The above-captioned cases have been
consolidated because they involve common
legal questions, including serious challenges to
the constitutionality of the several measures
mentioned above. They will be the subject of
one common discussion and resolution. The
different antecedents of each case will require
separate treatment, however, and will must be
explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the
constitutionality of P.D. No. 27, E.O. Nos. 228
and 229, and R.A. No. 6657.
The subjects of this petition are a 9-hectare
riceland worked by four tenants and owned by
petitioner Nicolas Manaay and his wife and a 5-
hectare riceland worked by four tenants and
owned by petitioner Augustin Hermano, Jr. The
tenants were declared full owners of these
lands by E.O. No. 228 as qualified farmers
under P.D. No. 27.
The petitioners are questioning P.D. No. 27
and E.O. Nos. 228 and 229 on grounds inter
alia of separation of powers, due process,
equal protection and the constitutional
limitation that no private property shall be
taken for public use without just compensation.
They contend that President Aquino usurped
legislative power when she promulgated E.O.
No. 228. The said measure is invalid also for
violation of Article XIII, Section 4, of the
Constitution, for failure to provide for retention
limits for small landowners. Moreover, it does
not conform to Article VI, Section 25(4) and
the other requisites of a valid appropriation.
In connection with the determination of just
compensation, the petitioners argue that the
same may be made only by a court of justice
and not by the President of the Philippines.
They invoke the recent cases of EPZA v. Dulay
5 and Manotok v. National Food Authority. 6
Moreover, the just compensation contemplated
by the Bill of Rights is payable in money or in
cash and not in the form of bonds or other
things of value.
In considering the rentals as advance payment
on the land, the executive order also deprives
the petitioners of their property rights as
protected by due process. The equal protection
clause is also violated because the order places
the burden of solving the agrarian problems on
the owners only of agricultural lands. No
similar obligation is imposed on the owners of
other properties.
The petitioners also maintain that in declaring
the beneficiaries under P.D. No. 27 to be the
owners of the lands occupied by them, E.O.
No. 228 ignored judicial prerogatives and so
violated due process. Worse, the measure
would not solve the agrarian problem because
even the small farmers are deprived of their
lands and the retention rights guaranteed by
the Constitution.
In his Comment, the Solicitor General stresses
that P.D. No. 27 has already been upheld in
the earlier cases of Chavez v. Zobel, 7
Gonzales v. Estrella, 8 and Association of Rice
and Corn Producers of the Philippines, Inc. v.
the National Land Reform council. 9 The
determination of just compensation by the
executive authorities conformably to the
formula prescribed under the questioned order
is at best initial or preliminary only. It does not
foreclose judicial intervention whenever sought
or warranted. At any rate, the challenge to the
order is premature because no valuation of
their property has as yet been made by the
Department of Agrarian Reform. The
petitioners are also not proper parties because
the lands owned by them do not exceed the
maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper
parties because P.D. No. 27 does not provide
for retention limits on tenanted lands and that
in any event their petition is a class suit
brought in behalf of landowners with
landholdings below 24 hectares. They maintain
that the determination of just compensation by
the administrative authorities is a final
ascertainment. As for the cases invoked by the
public respondent, the constitutionality of P.D.
No. 27 was merely assumed in Chavez, while
what was decided in Gonzales was the validity
of the imposition of martial law.
In the amended petition dated November 22,
1988, it is contended that P.D. No. 27, E.O.
Nos. 228 and 229 (except Sections 20 and 21)
have been impliedly repealed by R.A. No.
6657. Nevertheless, this statute should itself
also be declared unconstitutional because it
suffers from substantially the same infirmities
as the earlier measures.
A petition for intervention was filed with leave
of court on June 1, 1988 by Vicente Cruz,
owner of a 1.83-hectare land, who complained
that the DAR was insisting on the
implementation of P.D. No. 27 and E.O. No.
228 despite a compromise agreement he had
reached with his tenant on the payment of
rentals. In a subsequent motion dated April 10,
1989, he adopted the allegations in the basic
amended petition that the above-mentioned
enactments have been impliedly repealed by
R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and
sugar planters in the Victorias Mill District,
Victorias, Negros Occidental. Co-petitioner
Planters' Committee, Inc. is an organization
composed of 1,400 planter-members. This
petition seeks to prohibit the implementation
of Proc. No. 131 and E.O. No. 229.
The petitioners claim that the power to provide
for a Comprehensive Agrarian Reform Program
as decreed by the Constitution belongs to
Congress and not the President. Although they
agree that the President could exercise
legislative power until the Congress was
convened, she could do so only to enact
emergency measures during the transition
period. At that, even assuming that the interim
legislative power of the President was properly
exercised, Proc. No. 131 and E.O. No. 229
would still have to be annulled for violating the
constitutional provisions on just compensation,
due process, and equal protection.
They also argue that under Section 2 of Proc.
No. 131 which provides:
Agrarian Reform Fund. There is hereby
created a special fund, to be known as the
Agrarian Reform Fund, an initial amount of
FIFTY BILLION PESOS (P50,000,000,000.00)
to cover the estimated cost of the
Comprehensive Agrarian Reform Program from
1987 to 1992 which shall be sourced from the
receipts of the sale of the assets of the Asset
Privatization Trust and Receipts of sale of ill-
gotten wealth received through the Presidential
Commission on Good Government and such
other sources as government may deem
appropriate. The amounts collected and
accruing to this special fund shall be
considered automatically appropriated for the
purpose authorized in this Proclamation.
the amount appropriated is in futuro, not in
esse. The money needed to cover the cost of
the contemplated expropriation has yet to be
raised and cannot be appropriated at this time.
Furthermore, they contend that taking must be
simultaneous with payment of just
compensation as it is traditionally understood,
i.e., with money and in full, but no such
payment is contemplated in Section 5 of the
E.O. No. 229. On the contrary, Section 6,
thereof provides that the Land Bank of the
Philippines "shall compensate the landowner in
an amount to be established by the
government, which shall be based on the
owner's declaration of current fair market
value as provided in Section 4 hereof, but
subject to certain controls to be defined and
promulgated by the Presidential Agrarian
Reform Council." This compensation may not
be paid fully in money but in any of several
modes that may consist of part cash and part
bond, with interest, maturing periodically, or
direct payment in cash or bond as may be
mutually agreed upon by the beneficiary and
the landowner or as may be prescribed or
approved by the PARC.
The petitioners also argue that in the issuance
of the two measures, no effort was made to
make a careful study of the sugar planters'
situation. There is no tenancy problem in the
sugar areas that can justify the application of
the CARP to them. To the extent that the sugar
planters have been lumped in the same
legislation with other farmers, although they
are a separate group with problems exclusively
their own, their right to equal protection has
been violated.
A motion for intervention was filed on August
27, 1987 by the National Federation of
Sugarcane Planters (NASP) which claims a
membership of at least 20,000 individual sugar
planters all over the country. On September
10, 1987, another motion for intervention was
filed, this time by Manuel Barcelona, et al.,
representing coconut and riceland owners.
Both motions were granted by the Court.
NASP alleges that President Aquino had no
authority to fund the Agrarian Reform Program
and that, in any event, the appropriation is
invalid because of uncertainty in the amount
appropriated. Section 2 of Proc. No. 131 and
Sections 20 and 21 of E.O. No. 229 provide for
an initial appropriation of fifty billion pesos and
thus specifies the minimum rather than the
maximum authorized amount. This is not
allowed. Furthermore, the stated initial amount
has not been certified to by the National
Treasurer as actually available.
Two additional arguments are made by
Barcelona, to wit, the failure to establish by
clear and convincing evidence the necessity for
the exercise of the powers of eminent domain,
and the violation of the fundamental right to
own property.
The petitioners also decry the penalty for non-
registration of the lands, which is the
expropriation of the said land for an amount
equal to the government assessor's valuation
of the land for tax purposes. On the other
hand, if the landowner declares his own
valuation, he is unjustly required to
immediately pay the corresponding taxes on
the land, in violation of the uniformity rule.
In his consolidated Comment, the Solicitor
General first invokes the presumption of
constitutionality in favor of Proc. No. 131 and
E.O. No. 229. He also justifies the necessity for
the expropriation as explained in the "whereas"
clauses of the Proclamation and submits that,
contrary to the petitioner's contention, a pilot
project to determine the feasibility of CARP and
a general survey on the people's opinion
thereon are not indispensable prerequisites to
its promulgation.
On the alleged violation of the equal protection
clause, the sugar planters have failed to show
that they belong to a different class and should
be differently treated. The Comment also
suggests the possibility of Congress first
distributing public agricultural lands and
scheduling the expropriation of private
agricultural lands later. From this viewpoint,
the petition for prohibition would be
premature.
The public respondent also points out that the
constitutional prohibition is against the
payment of public money without the
corresponding appropriation. There is no rule
that only money already in existence can be
the subject of an appropriation law. Finally, the
earmarking of fifty billion pesos as Agrarian
Reform Fund, although denominated as an
initial amount, is actually the maximum sum
appropriated. The word "initial" simply means
that additional amounts may be appropriated
later when necessary.
On April 11, 1988, Prudencio Serrano, a
coconut planter, filed a petition on his own
behalf, assailing the constitutionality of E.O.
No. 229. In addition to the arguments already
raised, Serrano contends that the measure is
unconstitutional because:
(1) Only public lands should be included in The petitioner contends that the issuance of
the CARP; E.O Nos. 228 and 229 shortly before Congress
convened is anomalous and arbitrary, besides
(2) E.O. No. 229 embraces more than one violating the doctrine of separation of powers.
subject which is not expressed in the title; The legislative power granted to the President
under the Transitory Provisions refers only to
(3) The power of the President to legislate
emergency measures that may be promulgated
was terminated on July 2, 1987; and
in the proper exercise of the police power.
(4) The appropriation of a P50 billion
The petitioner also invokes his rights not to be
special fund from the National Treasury did not
deprived of his property without due process of
originate from the House of Representatives.
law and to the retention of his small parcels of
riceholding as guaranteed under Article XIII,
G.R. No. 79744
Section 4 of the Constitution. He likewise
The petitioner alleges that the then Secretary argues that, besides denying him just
of Department of Agrarian Reform, in violation compensation for his land, the provisions of
of due process and the requirement for just E.O. No. 228 declaring that:
compensation, placed his landholding under
Lease rentals paid to the landowner by the
the coverage of Operation Land Transfer.
farmer-beneficiary after October 21, 1972 shall
Certificates of Land Transfer were
be considered as advance payment for the
subsequently issued to the private
land.
respondents, who then refused payment of
lease rentals to him.
is an unconstitutional taking of a vested
property right. It is also his contention that the
On September 3, 1986, the petitioner
inclusion of even small landowners in the
protested the erroneous inclusion of his small
program along with other landowners with
landholding under Operation Land Transfer and
lands consisting of seven hectares or more is
asked for the recall and cancellation of the
undemocratic.
Certificates of Land Transfer in the name of the
private respondents. He claims that on
In his Comment, the Solicitor General submits
December 24, 1986, his petition was denied
that the petition is premature because the
without hearing. On February 17, 1987, he
motion for reconsideration filed with the
filed a motion for reconsideration, which had
Minister of Agrarian Reform is still unresolved.
not been acted upon when E.O. Nos. 228 and
As for the validity of the issuance of E.O. Nos.
229 were issued. These orders rendered his
228 and 229, he argues that they were
motion moot and academic because they
enacted pursuant to Section 6, Article XVIII of
directly effected the transfer of his land to the
the Transitory Provisions of the 1987
private respondents.
Constitution which reads:
The petitioner now argues that:
The incumbent president shall continue to
exercise legislative powers until the first
(1) E.O. Nos. 228 and 229 were invalidly
Congress is convened.
issued by the President of the Philippines.
On the issue of just compensation, his position
(2) The said executive orders are violative
is that when P.D. No. 27 was promulgated on
of the constitutional provision that no private
October 21, 1972, the tenant-farmer of
property shall be taken without due process or
agricultural land was deemed the owner of the
just compensation.
land he was tilling. The leasehold rentals paid
(3) The petitioner is denied the right of after that date should therefore be considered
maximum retention provided for under the amortization payments.
1987 Constitution.
In his Reply to the public respondents, the with an accompanying Retention Guide Table),
petitioner maintains that the motion he filed Memorandum Circular No. 11 dated April 21,
was resolved on December 14, 1987. An 1978, (Implementation Guidelines of LOI No.
appeal to the Office of the President would be 474), Memorandum Circular No. 18-81 dated
useless with the promulgation of E.O. Nos. 228 December 29, 1981 (Clarificatory Guidelines on
and 229, which in effect sanctioned the validity Coverage of P.D. No. 27 and Retention by
of the public respondent's acts. Small Landowners), and DAR Administrative
Order No. 1, series of 1985 (Providing for a
G.R. No. 78742 Cut-off Date for Landowners to Apply for
Retention and/or to Protest the Coverage of
The petitioners in this case invoke the right of
their Landholdings under Operation Land
retention granted by P.D. No. 27 to owners of
Transfer pursuant to P.D. No. 27). For failure
rice and corn lands not exceeding seven
to file the corresponding applications for
hectares as long as they are cultivating or
retention under these measures, the
intend to cultivate the same. Their respective
petitioners are now barred from invoking this
lands do not exceed the statutory limit but are
right.
occupied by tenants who are actually
cultivating such lands. The public respondent also stresses that the
petitioners have prematurely initiated this case
According to P.D. No. 316, which was
notwithstanding the pendency of their appeal
promulgated in implementation of P.D. No. 27:
to the President of the Philippines. Moreover,
the issuance of the implementing rules,
No tenant-farmer in agricultural lands primarily
assuming this has not yet been done, involves
devoted to rice and corn shall be ejected or
the exercise of discretion which cannot be
removed from his farmholding until such time
controlled through the writ of mandamus. This
as the respective rights of the tenant-farmers
is especially true if this function is entrusted,
and the landowner shall have been determined
as in this case, to a separate department of
in accordance with the rules and regulations
the government.
implementing P.D. No. 27.
In their Reply, the petitioners insist that the
The petitioners claim they cannot eject their
above-cited measures are not applicable to
tenants and so are unable to enjoy their right
them because they do not own more than
of retention because the Department of
seven hectares of agricultural land. Moreover,
Agrarian Reform has so far not issued the
assuming arguendo that the rules were
implementing rules required under the above-
intended to cover them also, the said
quoted decree. They therefore ask the Court
measures are nevertheless not in force
for a writ of mandamus to compel the
because they have not been published as
respondent to issue the said rules.
required by law and the ruling of this Court in
In his Comment, the public respondent argues Taada v. Tuvera. 10 As for LOI 474, the same
that P.D. No. 27 has been amended by LOI is ineffective for the additional reason that a
474 removing any right of retention from mere letter of instruction could not have
persons who own other agricultural lands of repealed the presidential decree.
more than 7 hectares in aggregate area or
I
lands used for residential, commercial,
industrial or other purposes from which they
Although holding neither purse nor sword and
derive adequate income for their family. And
so regarded as the weakest of the three
even assuming that the petitioners do not fall
departments of the government, the judiciary
under its terms, the regulations implementing
is nonetheless vested with the power to annul
P.D. No. 27 have already been issued, to wit,
the acts of either the legislative or the
the Memorandum dated July 10, 1975 (Interim
executive or of both when not conformable to
Guidelines on Retention by Small Landowners,
the fundamental law. This is the reason for
what some quarters call the doctrine of judicial
supremacy. Even so, this power is not lightly
assumed or readily exercised. The doctrine of
separation of powers imposes upon the courts
a proper restraint, born of the nature of their
functions and of their respect for the other
departments, in striking down the acts of the
legislative and the executive as
unconstitutional. The policy, indeed, is a blend
of courtesy and caution. To doubt is to sustain.
The theory is that before the act was done or
the law was enacted, earnest studies were
made by Congress or the President, or both, to
insure that the Constitution would not be
breached.
In addition, the Constitution itself lays down
stringent conditions for a declaration of
unconstitutionality, requiring therefor the
concurrence of a majority of the members of
the Supreme Court who took part in the
deliberations and voted on the issue during
their session en banc. 11 And as established by
judge-made doctrine, the Court will assume
jurisdiction over a constitutional question only
if it is shown that the essential requisites of a
judicial inquiry into such a question are first
satisfied. Thus, there must be an actual case
or controversy involving a conflict of legal
rights susceptible of judicial determination, the
constitutional question must have been
opportunely raised by the proper party, and
the resolution of the question is unavoidably
necessary to the decision of the case itself. 12
With particular regard to the requirement of
proper party as applied in the cases before us,
we hold that the same is satisfied by the
petitioners and intervenors because each of
them has sustained or is in danger of
sustaining an immediate injury as a result of
the acts or measures complained of. 13 And
even if, strictly speaking, they are not covered
by the definition, it is still within the wide
discretion of the Court to waive the
requirement and so remove the impediment to
its addressing and resolving the serious
constitutional questions raised.
In the first Emergency Powers Cases, 14
ordinary citizens and taxpayers were allowed
to question the constitutionality of several
executive orders issued by President Quirino
although they were invoking only an indirect
and general interest shared in common with
the public. The Court dismissed the objection
that they were not proper parties and ruled
that "the transcendental importance to the
public of these cases demands that they be
settled promptly and definitely, brushing aside,
if we must, technicalities of procedure." We
have since then applied this exception in many
other cases. 15
The other above-mentioned requisites have
also been met in the present petitions.
In must be stressed that despite the inhibitions
pressing upon the Court when confronted with
constitutional issues like the ones now before
it, it will not hesitate to declare a law or act
invalid when it is convinced that this must be
done. In arriving at this conclusion, its only
criterion will be the Constitution as God and its
conscience give it the light to probe its
meaning and discover its purpose. Personal
motives and political considerations are
irrelevancies that cannot influence its decision.
Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress
and the Executive, the Court will not hesitate
to "make the hammer fall, and heavily," to use
Justice Laurel's pithy language, where the acts
of these departments, or of any public official,
betray the people's will as expressed in the
Constitution.
It need only be added, to borrow again the
words of Justice Laurel, that
. . . when the judiciary mediates to allocate
constitutional boundaries, it does not assert
any superiority over the other departments; it
does not in reality nullify or invalidate an act of
the Legislature, but only asserts the solemn
and sacred obligation assigned to it by the
Constitution to determine conflicting claims of
authority under the Constitution and to
establish for the parties in an actual
controversy the rights which that instrument
secures and guarantees to them. This is in
truth all that is involved in what is termed
"judicial supremacy" which properly is the
power of judicial review under the Constitution. suppletory to R.A. No. 6657 whenever not
16 inconsistent with its provisions. 17 Indeed,
some portions of the said measures, like the
The cases before us categorically raise creation of the P50 billion fund in Section 2 of
constitutional questions that this Court must Proc. No. 131, and Sections 20 and 21 of E.O.
categorically resolve. And so we shall. No. 229, have been incorporated by reference
in the CARP Law. 18
II
That fund, as earlier noted, is itself being
We proceed first to the examination of the
questioned on the ground that it does not
preliminary issues before resolving the more
conform to the requirements of a valid
serious challenges to the constitutionality of
appropriation as specified in the Constitution.
the several measures involved in these
Clearly, however, Proc. No. 131 is not an
petitions. cdtai
appropriation measure even if it does provide
for the creation of said fund, for that is not its
The promulgation of P.D. No. 27 by President
principal purpose. An appropriation law is one
Marcos in the exercise of his powers under
the primary and specific purpose of which is to
martial law has already been sustained in
authorize the release of public funds from the
Gonzales v. Estrella and we find no reason to
treasury. 19 The creation of the fund is only
modify or reverse it on that issue. As for the
incidental to the main objective of the
power of President Aquino to promulgate Proc.
proclamation, which is agrarian reform.
No. 131 and E.O. Nos. 228 and 229, the same
was authorized under Section 6 of the
It should follow that the specific constitutional
Transitory Provisions of the 1987 Constitution,
provisions invoked, to wit, Section 24 and
quoted above.
Section 25(4) of Article VI, are not applicable.
With particular reference to Section 24, this
The said measures were issued by President
obviously could not have been complied with
Aquino before July 27, 1987, when the
for the simple reason that the House of
Congress of the Philippines was formally
Representatives, which now has the exclusive
convened and took over legislative power from
power to initiate appropriation measures, had
her. They are not "midnight" enactments
not yet been convened when the proclamation
intended to pre-empt the legislature because
was issued. The legislative power was then
E.O. No. 228 was issued on July 17, 1987, and
solely vested in the President of the
the other measures, i.e., Proc. No. 131 and
Philippines, who embodied, as it were, both
E.O. No. 229, were both issued on July 22,
houses of Congress.
1987. Neither is it correct to say that these
measures ceased to be valid when she lost her
The argument of some of the petitioners that
legislative power for, like any statute, they
Proc. No. 131 and E.O. No. 229 should be
continue to be in force unless modified or
invalidated because they do not provide for
repealed by subsequent law or declared invalid
retention limits as required by Article XIII,
by the courts. A statute does not ipso facto
Section 4 of the Constitution is no longer
become inoperative simply because of the
tenable. R.A. No. 6657 does provide for such
dissolution of the legislature that enacted it. By
limits now in Section 6 of the law, which in fact
the same token, President Aquino's loss of
is one of its most controversial provisions. This
legislative power did not have the effect of
section declares:
invalidating all the measures enacted by her
when and as long as she possessed it. Retention Limits. Except as otherwise
provided in this Act, no person may own or
Significantly, the Congress she is alleged to
retain, directly or indirectly, any public or
have undercut has not rejected but in fact
private agricultural land, the size of which shall
substantially affirmed the challenged measures
vary according to factors governing a viable
and has specifically provided that they shall be
family-sized farm, such as commodity
produced, terrain, infrastructure, and soil
fertility as determined by the Presidential
Agrarian Reform Council (PARC) created
hereunder, but in no case shall retention by
the landowner exceed five (5) hectares. Three
(3) hectares may be awarded to each child of
the landowner, subject to the following
qualifications: (1) that he is at least fifteen
(15) years of age; and (2) that he is actually
tilling the land or directly managing the farm;
Provided, That landowners whose lands have
been covered by Presidential Decree No. 27
shall be allowed to keep the area originally
retained by them thereunder, further, That
original homestead grantees or direct
compulsory heirs who still own the original
homestead at the time of the approval of this
Act shall retain the same areas as long as they
continue to cultivate said homestead.
The argument that E.O. No. 229 violates the
constitutional requirement that a bill shall have
only one subject, to be expressed in its title,
deserves only short attention. It is settled that
the title of the bill does not have to be a
catalogue of its contents and will suffice if the
matters embodied in the text are relevant to
each other and may be inferred from the title.
20
The Court wryly observes that during the past
dictatorship, every presidential issuance, by
whatever name it was called, had the force and
effect of law because it came from President
Marcos. Such are the ways of despots. Hence,
it is futile to argue, as the petitioners do in
G.R. No. 79744, that LOI 474 could not have
repealed P.D. No. 27 because the former was
only a letter of instruction. The important thing
is that it was issued by President Marcos,
whose word was law during that time. LexLib
But for all their peremptoriness, these
issuances from the President Marcos still had
to comply with the requirement for publication
as this Court held in Taada v. Tuvera. 21
Hence, unless published in the Official Gazette
in accordance with Article 2 of the Civil Code,
they could not have any force and effect if they
were among those enactments successfully
challenged in that case. (LOI 474 was
published, though, in the Official Gazette dated
November 29, 1976.)
Finally, there is the contention of the public
respondent in G.R. No. 78742 that the writ of
mandamus cannot issue to compel the
performance of a discretionary act, especially
by a specific department of the government.
That is true as a general proposition but is
subject to one important qualification.
Correctly and categorically stated, the rule is
that mandamus will lie to compel the discharge
of the discretionary duty itself but not to
control the discretion to be exercised. In other
words, mandamus can issue to require action
only but not specific action.
Whenever a duty is imposed upon a public
official and an unnecessary and unreasonable
delay in the exercise of such duty occurs, if it
is a clear duty imposed by law, the courts will
intervene by the extraordinary legal remedy of
mandamus to compel action. If the duty is
purely ministerial, the courts will require
specific action. If the duty is purely
discretionary, the courts by mandamus will
require action only. For example, if an inferior
court, public official, or board should, for an
unreasonable length of time, fail to decide a
particular question to the great detriment of all
parties concerned, or a court should refuse to
take jurisdiction of a cause when the law
clearly gave it jurisdiction, mandamus will
issue, in the first case to require a decision,
and in the second to require that jurisdiction
be taken of the cause. 22
And while it is true that as a rule the writ will
not be proper as long as there is still a plain,
speedy and adequate remedy available from
the administrative authorities, resort to the
courts may still be permitted if the issue raised
is a question of law. 23
III
There are traditional distinctions between the
police power and the power of eminent domain
that logically preclude the application of both
powers at the same time on the same subject.
In the case of City of Baguio v. NAWASA, 24
for example, where a law required the transfer
of all municipal waterworks systems to the
NAWASA in exchange for its assets of
equivalent value, the Court held that the power
being exercised was eminent domain because
the property involved was wholesome and
intended for a public use. Property condemned
under the police power is noxious or intended
for a noxious purpose, such as a building on
the verge of collapse, which should be
demolished for the public safety, or obscene
materials, which should be destroyed in the
interest of public morals. The confiscation of
such property is not compensable, unlike the
taking of property under the power of
expropriation, which requires the payment of
just compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon,
25 Justice Holmes laid down the limits of the
police power in a famous aphorism: "The
general rule at least is that while property may
be regulated to a certain extent, if regulation
goes too far it will be recognized as a taking."
The regulation that went "too far" was a law
prohibiting mining which might cause the
subsidence of structures for human habitation
constructed on the land surface. This was
resisted by a coal company which had earlier
granted a deed to the land over its mine but
reserved all mining rights thereunder, with the
grantee assuming all risks and waiving any
damage claim. The Court held the law could
not be sustained without compensating the
grantor. Justice Brandeis filed a lone dissent in
which he argued that there was a valid
exercise of the police power. He said:
Every restriction upon the use of property
imposed in the exercise of the police power
deprives the owner of some right theretofore
enjoyed, and is, in that sense, an abridgment
by the State of rights in property without
making compensation. But restriction imposed
to protect the public health, safety or morals
from dangers threatened is not a taking. The
restriction here in question is merely the
prohibition of a noxious use. The property so
restricted remains in the possession of its
owner. The state does not appropriate it or
make any use of it. The state merely prevents
the owner from making a use which interferes
with paramount rights of the public. Whenever
the use prohibited ceases to be noxious as it
may because of further changes in local or
social conditions the restriction will have to
be removed and the owner will again be free to
enjoy his property as heretofore.
Recent trends, however, would indicate not a
polarization but a mingling of the police power
and the power of eminent domain, with the
latter being used as an implement of the
former like the power of taxation. The
employment of the taxing power to achieve a
police purpose has long been accepted. 26 As
for the power of expropriation, Prof. John J.
Costonis of the University of Illinois College of
Law (referring to the earlier case of Euclid v.
Ambler Realty Co., 272 US 365, which
sustained a zoning law under the police power)
makes the following significant remarks:
Euclid, moreover, was decided in an era when
judges located the police and eminent domain
powers on different planets. Generally
speaking, they viewed eminent domain as
encompassing public acquisition of private
property for improvements that would be
available for "public use," literally construed.
To the police power, on the other hand, they
assigned the less intrusive task of preventing
harmful externalities, a point reflected in the
Euclid opinion's reliance on an analogy to
nuisance law to bolster its support of zoning.
So long as suppression of a privately authored
harm bore a plausible relation to some
legitimate "public purpose," the pertinent
measure need have afforded no compensation
whatever. With the progressive growth of
government's involvement in land use, the
distance between the two powers has
contracted considerably. Today government
often employs eminent domain
interchangeably with or as a useful
complement to the police power a trend
expressly approved in the Supreme Court's
1954 decision in Berman v. Parker, which
broadened the reach of eminent domain's
"public use" test to match that of the police
power's standard of "public purpose." 27
The Berman case sustained a redevelopment
project and the improvement of blighted areas
in the District of Columbia as a proper exercise
of the police power. On the role of eminent
domain in the attainment of this purpose,
Justice Douglas declared:
If those who govern the District of Columbia
decide that the Nation's Capital should be
beautiful as well as sanitary, there is nothing in
the Fifth Amendment that stands in the way.
Once the object is within the authority of
Congress, the right to realize it through the
exercise of eminent domain is clear.
For the power of eminent domain is merely the
means to the end. 28
In Penn Central Transportation Co. v. New York
City, 29 decided by a 6-3 vote in 1978, the
U.S. Supreme Court sustained the
respondent's Landmarks Preservation Law
under which the owners of the Grand Central
Terminal had not been allowed to construct a
multi-story office building over the Terminal,
which had been designated a historic
landmark. Preservation of the landmark was
held to be a valid objective of the police power.
The problem, however, was that the owners of
the Terminal would be deprived of the right to
use the airspace above it although other
landowners in the area could do so over their
respective properties. While insisting that there
was here no taking, the Court nonetheless
recognized certain compensatory rights
accruing to Grand Central Terminal which it
said would "undoubtedly mitigate" the loss
caused by the regulation. This "fair
compensation," as he called it, was explained
by Prof. Costonis in this wise:
In return for retaining the Terminal site in its
pristine landmark status, Penn Central was
authorized to transfer to neighboring
properties the authorized but unused rights
accruing to the site prior to the Terminal's
designation as a landmark the rights which
would have been exhausted by the 59-story
building that the city refused to countenance
atop the Terminal. Prevailing bulk restrictions
on neighboring sites were proportionately
relaxed, theoretically enabling Penn Central to
recoup its losses at the Terminal site by
constructing or selling to others the right to
construct larger, hence more profitable
buildings on the transferee sites. 30
The cases before us present no knotty
complication insofar as the question of
compensable taking is concerned. To the
extent that the measures under challenge
merely prescribe retention limits for
landowners, there is an exercise of the police
power for the regulation of private property in
accordance with the Constitution. But where,
to carry out such regulation, it becomes
necessary to deprive such owners of whatever
lands they may own in excess of the maximum
area allowed, there is definitely a taking under
the power of eminent domain for which
payment of just compensation is imperative.
The taking contemplated is not a mere
limitation of the use of the land. What is
required is the surrender of the title to and the
physical possession of the said excess and all
beneficial rights accruing to the owner in favor
of the farmer-beneficiary. This is definitely an
exercise not of the police power but of the
power of eminent domain.
Whether as an exercise of the police power or
of the power of eminent domain, the several
measures before us are challenged as violative
of the due process and equal protection
clauses.
The challenge to Proc. No. 131 and E.O. Nos.
228 and 299 on the ground that no retention
limits are prescribed has already been
discussed and dismissed. It is noted that
although they excited many bitter exchanges
during the deliberation of the CARP Law in
Congress, the retention limits finally agreed
upon are, curiously enough, not being
questioned in these petitions. We therefore do
not discuss them here. The Court will come to
the other claimed violations of due process in
connection with our examination of the
adequacy of just compensation as required
under the power of expropriation.
The argument of the small farmers that they
have been denied equal protection because of
the absence of retention limits has also
become academic under Section 6 of R.A. No.
6657. Significantly, they too have not
questioned the area of such limits. There is
also the complaint that they should not be
made to share the burden of agrarian reform,
an objection also made by the sugar planters
on the ground that they belong to a particular
class with particular interests of their own.
However, no evidence has been submitted to
the Court that the requisites of a valid
classification have been violated.
Classification has been defined as the grouping
of persons or things similar to each other in
certain particulars and different from each
other in these same particulars. 31 To be valid,
it must conform to the following requirements:
(1) it must be based on substantial
distinctions; (2) it must be germane to the
purposes of the law; (3) it must not be limited
to existing conditions only; and (4) it must
apply equally to all the members of the class.
32 The Court finds that all these requisites
have been met by the measures here
challenged as arbitrary and discriminatory.
Equal protection simply means that all persons
or things similarly situated must be treated
alike both as to the rights conferred and the
liabilities imposed. 33 The petitioners have not
shown that they belong to a different class and
entitled to a different treatment. The argument
that not only landowners but also owners of
other properties must be made to share the
burden of implementing land reform must be
rejected. There is a substantial distinction
between these two classes of owners that is
clearly visible except to those who will not see.
There is no need to elaborate on this matter.
In any event, the Congress is allowed a wide
leeway in providing for a valid classification. Its
decision is accorded recognition and respect by
the courts of justice except only where its
discretion is abused to the detriment of the Bill
of Rights.
It is worth remarking at this juncture that a
statute may be sustained under the police
power only if there is a concurrence of the
lawful subject and the lawful method. Put
otherwise, the interests of the public generally
as distinguished from those of a particular
class require the interference of the State and,
no less important, the means employed are
reasonably necessary for the attainment of the
purpose sought to be achieved and not unduly
oppressive upon individuals. 34 As the subject
and purpose of agrarian reform have been laid
down by the Constitution itself, we may say
that the first requirement has been satisfied.
What remains to be examined is the validity of
the method employed to achieve the
constitutional goal. LLphil
One of the basic principles of the democratic
system is that where the rights of the
individual are concerned, the end does not
justify the means. It is not enough that there
be a valid objective; it is also necessary that
the means employed to pursue it be in keeping
with the Constitution. Mere expediency will not
excuse constitutional shortcuts. There is no
question that not even the strongest moral
conviction or the most urgent public need,
subject only to a few notable exceptions, will
excuse the bypassing of an individual's rights.
It is no exaggeration to say that a person
invoking a right guaranteed under Article III of
the Constitution is a majority of one even as
against the rest of the nation who would deny
him that right.
That right covers the person's life, his liberty
and his property under Section 1 of Article III
of the Constitution. With regard to his
property, the owner enjoys the added
protection of Section 9, which reaffirms the
familiar rule that private property shall not be
taken for public use without just compensation.
This brings us now to the power of eminent
domain.
IV
Eminent domain is an inherent power of the
State that enables it to forcibly acquire private
lands intended for public use upon payment of
just compensation to the owner. Obviously,
there is no need to expropriate where the
owner is willing to sell under terms also
acceptable to the purchaser, in which case an
ordinary deed of sale may be agreed upon by
the parties. 35 It is only where the owner is
unwilling to sell, or cannot accept the price or
other conditions offered by the vendee, that
the power of eminent domain will come into
play to assert the paramount authority of the
State over the interests of the property owner.
Private rights must then yield to the irresistible
demands of the public interest on the time-
honored justification, as in the case of the
police power, that the welfare of the people is
the supreme law.
But for all its primacy and urgency, the power
of expropriation is by no means absolute (as
indeed no power is absolute). The limitation is
found in the constitutional injunction that
"private property shall not be taken for public
use without just compensation" and in the
abundant jurisprudence that has evolved from
the interpretation of this principle. Basically,
the requirements for a proper exercise of the
power are: (1) public use and (2) just
compensation.
Let us dispose first of the argument raised by
the petitioners in G.R. No. 79310 that the
State should first distribute public agricultural
lands in the pursuit of agrarian reform instead
of immediately disturbing property rights by
forcibly acquiring private agricultural lands.
Parenthetically, it is not correct to say that
only public agricultural lands may be covered
by the CARP as the Constitution calls for "the
just distribution of all agricultural lands." In
any event, the decision to redistribute private
agricultural lands in the manner prescribed by
the CARP was made by the legislative and
executive departments in the exercise of their
discretion. We are not justified in reviewing
that discretion in the absence of a clear
showing that it has been abused.
A becoming courtesy admonishes us to respect
the decisions of the political departments when
they decide what is known as the political
question. As explained by Chief Justice
Concepcion in the case of Taada v. Cuenco:
36
The term "political question" connotes what it
means in ordinary parlance, namely, a
question of policy. It refers to "those questions
which, under the Constitution, are to be
decided by the people in their sovereign
capacity; or in regard to which full
discretionary authority has been delegated to
the legislative or executive branch of the
government." It is concerned with issues
dependent upon the wisdom, not legality, of a
particular measure.
It is true that the concept of the political
question has been constricted with the
enlargement of judicial power, which now
includes the authority of the courts "to
determine whether or not there has been a
grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch
or instrumentality of the Government." 37
Even so, this should not be construed as a
license for us to reverse the other departments
simply because their views may not coincide
with ours.
The legislature and the executive have been
seen fit, in their wisdom, to include in the
CARP the redistribution of private landholdings
(even as the distribution of public agricultural
lands is first provided for, while also continuing
space under the Public Land Act and other
cognate laws). The Court sees no justification
to interpose its authority, which we may assert
only if we believe that the political decision is
not unwise, but illegal. We do not find it to be
so.
In U.S. v. Chandler-Dunbar Water Power
Company, 38 it was held:
Congress having determined, as it did by the
Act of March 3, 1909 that the entire St. Mary's
river between the American bank and the
international line, as well as all of the upland
north of the present ship canal, throughout its
entire length, was "necessary for the purpose
of navigation of said waters, and the waters
connected therewith," that determination is
conclusive in condemnation proceedings
instituted by the United States under that Act,
and there is no room for judicial review of the
judgment of Congress . . .
As earlier observed, the requirement for public
use has already been settled for us by the
Constitution itself. No less than the 1987
Charter calls for agrarian reform, which is the
reason why private agricultural lands are to be
taken from their owners, subject to the
prescribed maximum retention limits. The
purposes specified in P.D. No. 27, Proc. No.
131 and R.A. No. 6657 are only an elaboration
of the constitutional injunction that the State
adopt the necessary measures "to encourage
and undertake the just distribution of all
agricultural lands to enable farmers who are
landless to own directly or collectively the
lands they till." That public use, as pronounced
by the fundamental law itself, must be binding
on us.
The second requirement, i.e., the payment of
just compensation, needs a longer and more
thoughtful examination.
Just compensation is defined as the full and
fair equivalent of the property taken from its
owner by the expropriator. 39 It has been
repeatedly stressed by this Court that the
measure is not the taker's gain but the owner's
loss. 40 The word "just" is used to intensify the
meaning of the word "compensation" to convey
the idea that the equivalent to be rendered for
the property to be taken shall be real,
substantial, full, ample. 41
It bears repeating that the measures
challenged in these petitions contemplate more
than a mere regulation of the use of private
lands under the police power. We deal here
with an actual taking of private agricultural
lands that has dispossessed the owners of their
property and deprived them of all its beneficial
use and enjoyment, to entitle them to the just
compensation mandated by the Constitution.
As held in Republic of the Philippines v.
Castellvi, 42 there is compensable taking when
the following conditions concur: (1) the
expropriator must enter a private property; (2)
the entry must be for more than a momentary
period; (3) the entry must be under warrant or
color of legal authority; (4) the property must
be devoted to public use or otherwise
informally appropriated or injuriously affected;
and (5) the utilization of the property for public
use must be in such a way as to oust the
owner and deprive him of beneficial enjoyment
of the property. All these requisites are
envisioned in the measures before us.
Where the State itself is the expropriator, it is
not necessary for it to make a deposit upon its
taking possession of the condemned property,
as "the compensation is a public charge, the
good faith of the public is pledged for its
payment, and all the resources of taxation may
be employed in raising the amount." 43
Nevertheless, Section 16(e) of the CARP Law
provides that:
Upon receipt by the landowner of the
corresponding payment or, in case of rejection
or no response from the landowner, upon the
deposit with an accessible bank designated by
the DAR of the compensation in cash or in LBP
bonds in accordance with this Act, the DAR
shall take immediate possession of the land
and shall request the proper Register of Deeds
to issue a Transfer Certificate of Title (TCT) in
the name of the Republic of the Philippines.
The DAR shall thereafter proceed with the
redistribution of the land to the qualified
beneficiaries. cdphil
Objection is raised, however, to the manner of
fixing the just compensation, which it is
claimed is entrusted to the administrative
authorities in violation of judicial prerogatives.
Specific reference is made to Section 16(d),
which provides that in case of the rejection or
disregard by the owner of the offer of the
government to buy his land
. . . the DAR shall conduct summary
administrative proceedings to determine the
compensation for the land by requiring the
landowner, the LBP and other interested
parties to submit evidence as to the just
compensation for the land, within fifteen (15)
days from the receipt of the notice. After the
expiration of the above period, the matter is
deemed submitted for decision. The DAR shall
decide the case within thirty (30) days after it
is submitted for decision.
To be sure, the determination of just
compensation is a function addressed to the
courts of justice and may not be usurped by
any other branch or official of the government.
EPZA v. Dulay 44 resolved a challenge to
several decrees promulgated by President
Marcos providing that the just compensation
for property under expropriation should be
either the assessment of the property by the
government or the sworn valuation thereof by
the owner, whichever was lower. In declaring
these decrees unconstitutional, the Court held
through Mr. Justice Hugo E. Gutierrez, Jr.:
The method of ascertaining just compensation
under the aforecited decrees constitutes
impermissible encroachment on judicial
prerogatives. It tends to render this Court
inutile in a matter which under this
Constitution is reserved to it for final
determination.
Thus, although in an expropriation proceeding
the court technically would still have the power
to determine the just compensation for the
property, following the applicable decrees, its
task would be relegated to simply stating the
lower value of the property as declared either
by the owner or the assessor. As a necessary
consequence, it would be useless for the court
to appoint commissioners under Rule 67 of the
Rules of Court. Moreover, the need to satisfy
the due process clause in the taking of private
property is seemingly fulfilled since it cannot
be said that a judicial proceeding was not had
before the actual taking. However, the strict
application of the decrees during the
proceedings would be nothing short of a mere
formality or charade as the court has only to
choose between the valuation of the owner and
that of the assessor, and its choice is always
limited to the lower of the two. The court
cannot exercise its discretion or independence
in determining what is just or fair. Even a
grade school pupil could substitute for the
judge insofar as the determination of
constitutional just compensation is concerned.
xxx xxx xxx
In the present petition, we are once again
confronted with the same question of whether
the courts under P.D. No. 1533, which contains
the same provision on just compensation as its
predecessor decrees, still have the power and
authority to determine just compensation,
independent of what is stated by the decree
and to this effect, to appoint commissioners for
such purpose.
This time, we answer in the affirmative.
xxx xxx xxx
It is violative of due process to deny the owner
the opportunity to prove that the valuation in
the tax documents is unfair or wrong. And it is
repulsive to the basic concepts of justice and
fairness to allow the haphazard work of a
minor bureaucrat or clerk to absolutely prevail
over the judgment of a court promulgated only
after expert commissioners have actually
viewed the property, after evidence and
arguments pro and con have been presented,
and after all factors and considerations
essential to a fair and just determination have
been judiciously evaluated.
A reading of the aforecited Section 16(d) will
readily show that it does not suffer from the
arbitrariness that rendered the challenged
decrees constitutionally objectionable.
Although the proceedings are described as
summary, the landowner and other interested
parties are nevertheless allowed an
opportunity to submit evidence on the real
value of the property. But more importantly,
the determination of the just compensation by
the DAR is not by any means final and
conclusive upon the landowner or any other
interested party, for Section 16(f) clearly
provides:
Any party who disagrees with the decision may
bring the matter to the court of proper
jurisdiction for final determination of just
compensation.
The determination made by the DAR is only
preliminary unless accepted by all parties
concerned. Otherwise, the courts of justice will
still have the right to review with finality the
said determination in the exercise of what is
admittedly a judicial function.
The second and more serious objection to the
provisions on just compensation is not as
easily resolved.
This refers to Section 18 of the CARP Law
providing in full as follows:
SEC. 18. Valuation and Mode of
Compensation. The LBP shall compensate
the landowner in such amount as may be
agreed upon by the landowner and the DAR
and the LBP, in accordance with the criteria
provided for in Sections 16 and 17, and other
pertinent provisions hereof, or as may be
finally determined by the court, as the just
compensation for the land.
The compensation shall be paid in one of the
following modes, at the option of the
landowner:
(1) Cash payment, under the following
terms and conditions:
(a) For lands above fifty (50) hectares,
insofar as the excess hectarage is concerned
Twenty-five percent (25%) cash, the balance
to be paid in government financial instruments
negotiable at any time.
(b) For lands above twenty-four (24)
hectares and up to fifty (50) hectares Thirty
percent (30%) cash, the balance to be paid in
government financial instruments negotiable at
any time.
(c) For lands twenty-four (24) hectares
and below Thirty-five percent (35%) cash,
the balance to be paid in government financial
instruments negotiable at any time.
(2) Shares of stock in government-owned
or controlled corporations, LBP preferred
shares, physical assets or other qualified
investments in accordance with guidelines set
by the PARC;
(3) Tax credits which can be used against
any tax liability;
(4) LBP bonds, which shall have the
following features:
(a) Market interest rates aligned with 91-
day treasury bill rates. Ten percent (10%) of
the face value of the bonds shall mature every
year from the date of issuance until the tenth
(10th) year: Provided, That should the
landowner choose to forego the cash portion,
whether in full or in part, he shall be paid
correspondingly in LBP bonds;
(b) Transferability and negotiability. Such
LBP bonds may be used by the landowner, his
successors-in-interest or his assigns, up to the
amount of their face value, for any of the
following:
(i) Acquisition of land or other real
properties of the government, including assets
under the Asset Privatization Program and
other assets foreclosed by government
financial institutions in the same province or
region where the lands for which the bonds
were paid are situated;
(ii) Acquisition of shares of stock of
government owned or controlled corporations
or shares of stock owned by the government in
private corporations;
(iii) Substitution for surety or bail bonds for
the provisional release of accused persons, or
for performance bonds;
(iv) Security for loans with any government
financial institution, provided the proceeds of
the loans shall be invested in an economic
enterprise, preferably in a small and medium-
scale industry, in the same province or region
as the land for which the bonds are paid;
(v) Payment for various taxes and fees to
government: Provided, That the use of these
bonds for these purposes will be limited to a
certain percentage of the outstanding balance
of the financial instruments; Provided, further,
That the PARC shall determine the percentages
mentioned above;
(vi) Payment for tuition fees of the
immediate family of the original bondholder in
government universities, colleges, trade
schools, and other institutions;
(vii) Payment for fees of the immediate
family of the original bondholder in
government hospital; and
(viii) Such other uses as the PARC may from
time to time allow.
The contention of the petitioners in G.R. No.
79777 is that the above provision is
unconstitutional insofar as it requires the
owners of the expropriated properties to
accept just compensation therefor in less than
money, which is the only medium of payment
allowed. In support of this contention, they cite
jurisprudence holding that:
The fundamental rule in expropriation matters
is that the owner of the property expropriated
is entitled to a just compensation, which
should be neither more nor less, whenever it is
possible to make the assessment, than the
money equivalent of said property. Just
compensation has always been understood to
be the just and complete equivalent of the loss
which the owner of the thing expropriated has
to suffer by reason of the expropriation. 45
(Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure
Administration, 46 this Court held:
It is well-settled that just compensation means
the equivalent for the value of the property at
the time of its taking. Anything beyond that is
more, and anything short of that is less, than
just compensation. It means a fair and full
equivalent for the loss sustained, which is the
measure of the indemnity, not whatever gain
would accrue to the expropriating entity. The
market value of the land taken is the just
compensation to which the owner of
condemned property is entitled, the market
value being that sum of money which a person
desirous, but not compelled to buy, and an
owner, willing, but not compelled to sell, would
agree on as a price to be given and received
for such property. (Emphasis supplied.)
In the United States, where much of our
jurisprudence on the subject has been derived,
the weight of authority is also to the effect that
just compensation for property expropriated is
payable only in money and not otherwise. Thus
impoverished farmer to the land-glutted
The medium of payment of compensation is
ready money or cash. The condemnor cannot
compel the owner to accept anything but
money, nor can the owner compel or require
the condemnor to pay him on any other basis
than the value of the property in money at the
time and in the manner prescribed by the
Constitution and the statutes. When the power
of eminent domain is resorted to, there must
be a standard medium of payment, binding
upon both parties, and the law has fixed that
standard as money in cash. 47 (Emphasis
supplied.)
Part cash and deferred payments are not and
cannot, in the nature of things, be regarded as
a reliable and constant standard of
compensation. 48
"Just compensation" for property taken by
condemnation means a fair equivalent in
money, which must be paid at least within a
reasonable time after the taking, and it is not
within the power of the Legislature to
substitute for such payment future obligations,
bonds, or other valuable advantage. 49
It cannot be denied from these cases that the
traditional medium for the payment of just
compensation is money and no other. And so,
conformably, has just compensation been paid
in the past solely in that medium. However, we
do not deal here with the traditional exercise of
the power of eminent domain. This is not an
ordinary expropriation where only a specific
property of relatively limited area is sought to
be taken by the State from its owner for a
specific and perhaps local purpose. What we
deal with here is a revolutionary kind of
expropriation.
The expropriation before us affects all private
agricultural lands whenever found and of
whatever kind as long as they are in excess of
the maximum retention limits allowed their
owners. This kind of expropriation is intended
for the benefit not only of a particular
community or of a small segment of the
population but of the entire Filipino nation,
from all levels of our society, from the
owner. Its purpose does not cover only the
whole territory of this country but goes beyond
in time to the foreseeable future, which it
hopes to secure and edify with the vision and
the sacrifice of the present generation of
Filipinos. Generations yet to come are as
involved in this program as we are today,
although hopefully only as beneficiaries of a
richer and more fulfilling life we will guarantee
to them tomorrow through our thoughtfulness
today. And, finally, let it not be forgotten that
it is no less than the Constitution itself that has
ordained this revolution in the farms, calling
for "a just distribution" among the farmers of
lands that have heretofore been the prison of
their dreams but can now become the key at
least to their deliverance.
Such a program will involve not mere millions
of pesos. The cost will be tremendous.
Considering the vast areas of land subject to
expropriation under the laws before us, we
estimate that hundreds of billions of pesos will
be needed, far more indeed than the amount
of P50 billion initially appropriated, which is
already staggering as it is by our present
standards. Such amount is in fact not even
fully available at this time.
We assume that the framers of the
Constitution were aware of this difficulty when
they called for agrarian reform as a top priority
project of the government. It is a part of this
assumption that when they envisioned the
expropriation that would be needed, they also
intended that the just compensation would
have to be paid not in the orthodox way but a
less conventional if more practical method.
There can be no doubt that they were aware of
the financial limitations of the government and
had no illusions that there would be enough
money to pay in cash and in full for the lands
they wanted to be distributed among the
farmers. We may therefore assume that their
intention was to allow such manner of payment
as is now provided for by the CARP Law,
particularly the payment of the balance (if the
owner cannot be paid fully with money), or
indeed of the entire amount of the just
compensation, with other things of value. We
may also suppose that what they had in mind
was a similar scheme of payment as that
prescribed in P.D. No. 27, which was the law in
force at the time they deliberated on the new
Charter and with which they presumably
agreed in principle.
The Court has not found in the records of the
Constitutional Commission any categorical
agreement among the members regarding the
meaning to be given the concept of just
compensation as applied to the comprehensive
agrarian reform program being contemplated.
There was the suggestion to "fine tune" the
requirement to suit the demands of the project
even as it was also felt that they should "leave
it to Congress" to determine how payment
should be made to the landowner and
reimbursement required from the farmer-
beneficiaries. Such innovations as "progressive
compensation" and "State-subsidized
compensation" were also proposed. In the end,
however, no special definition of the just
compensation for the lands to be expropriated
was reached by the Commission. 50
On the other hand, there is nothing in the
records either that militates against the
assumptions we are making of the general
sentiments and intention of the members on
the content and manner of the payment to be
made to the landowner in the light of the
magnitude of the expenditure and the
limitations of the expropriator.
With these assumptions, the Court hereby
declares that the content and manner of the
just compensation provided for in the afore-
quoted Section 18 of the CARP Law is not
violative of the Constitution. We do not mind
admitting that a certain degree of pragmatism
has influenced our decision on this issue, but
after all this Court is not a cloistered institution
removed from the realities and demands of
society or oblivious to the need for its
enhancement. The Court is as acutely anxious
as the rest of our people to see the goal of
agrarian reform achieved at last after the
frustrations and deprivations of our peasant
masses during all these disappointing decades.
We are aware that invalidation of the said
section will result in the nullification of the
entire program, killing the farmer's hopes even
as they approach realization and resurrecting
the spectre of discontent and dissent in the
restless countryside. That is not in our view the
intention of the Constitution, and that is not
what we shall decree today.
Accepting the theory that payment of the just The last major challenge to CARP is that the
compensation is not always required to be landowner is divested of his property even
made fully in money, we find further that the before actual payment to him in full of just
proportion of cash payment to the other things compensation, in contravention of a well-
of value constituting the total payment, as accepted principle of eminent domain.
determined on the basis of the areas of the
lands expropriated, is not unduly oppressive The recognized rule, indeed, is that title to the
upon the landowner. It is noted that the property expropriated shall pass from the
smaller the land, the bigger the payment in owner to the expropriator only upon full
money, primarily because the small landowner payment of the just compensation.
will be needing it more than the big Jurisprudence on this settled principle is
landowners, who can afford a bigger balance in consistent both here and in other democratic
bonds and other things of value. No less jurisdictions. Thus:
importantly, the government financial
Title to property which is the subject of
instruments making up the balance of the
condemnation proceedings does not vest the
payment are "negotiable at any time." The
condemnor until the judgment fixing just
other modes, which are likewise available to
compensation is entered and paid, but the
the landowner at his option, are also not
condemnor's title relates back to the date on
unreasonable because payment is made in
which the petition under the Eminent Domain
shares of stock, LBP bonds, other properties or
Act, or the commissioner's report under the
assets, tax credits, and other things of value
Local Improvement Act, is filed. 51
equivalent to the amount of just compensation.
. . . although the right to appropriate and use
Admittedly, the compensation contemplated in
land taken for a canal is complete at the time
the law will cause the landowners, big and
of entry, title to the property taken remains in
small, not a little inconvenience. As already
the owner until payment is actually made. 52
remarked, this cannot be avoided.
(Emphasis supplied.)
Nevertheless, it is devoutly hoped that these
countrymen of ours, conscious as we know
In Kennedy v. Indianapolis, 53 the US
they are of the need for their forebearance and
Supreme Court cited several cases holding that
even sacrifice, will not begrudge us their
title to property does not pass to the
indispensable share in the attainment of the
condemnor until just compensation had
ideal of agrarian reform. Otherwise, our pursuit
actually been made. In fact, the decisions
of this elusive goal will be like the quest for the
appear to be uniformly to this effect. As early
Holy Grail.
as 1838, in Rubottom v. McLure, 54 it was held
that "actual payment to the owner of the
The complaint against the effects of non-
condemned property was a condition precedent
registration of the land under E.O. No. 229
to the investment of the title to the property in
does not seem to be viable any more as it
the State" albeit "not to the appropriation of it
appears that Section 4 of the said Order has
to public use." In Rexford v. Knight, 55 the
been superseded by Section 14 of the CARP
Court of Appeals of New York said that the
Law. This repeats the requisites of registration
construction upon the statutes was that the fee
as embodied in the earlier measure but does
did not vest in the State until the payment of
not provide, as the latter did, that in case of
the compensation although the authority to
failure or refusal to register the land, the
enter upon and appropriate the land was
valuation thereof shall be that given by the
complete prior to the payment. Kennedy
provincial or city assessor for tax purposes. On
further said that "both on principle and
the contrary, the CARP Law says that the just
authority the rule is . . . that the right to enter
compensation shall be ascertained on the basis
on and use the property is complete, as soon
of the factors mentioned in its Section 17 and
as the property is actually appropriated under
in the manner provided for in Section 16.
the authority of law for a public use, but that
dctai
the title does not pass from the owner without
his consent, until just compensation has been
made to him."
Our own Supreme Court has held in Visayan
Refining Co. v. Camus and Paredes, 56 that:
If the laws which we have exhibited or cited in
the preceding discussion are attentively
examined it will be apparent that the method
of expropriation adopted in this jurisdiction is
such as to afford absolute reassurance that no
piece of land can be finally and irrevocably
taken from an unwilling owner until
compensation is paid . . . (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered
the emancipation of tenant-farmer as October
21, 1972 and declared that he shall "be
deemed the owner" of a portion of land
consisting of a family-sized farm except that
"no title to the land owned by him was to be
actually issued to him unless and until he had
become a full-fledged member of a duly
recognized farmers' cooperative." It was
understood, however, that full payment of the
just compensation also had to be made first,
conformably to the constitutional requirement.
When E.O. No. 228, categorically stated in its
Section 1 that:
All qualified farmer-beneficiaries are now
deemed full owners as of October 21, 1972 of
the land they acquired by virtue of Presidential
Decree No. 27. (Emphasis supplied.)
it was obviously referring to lands already
validly acquired under the said decree, after
proof of full-fledged membership in the
farmers' cooperatives and full payment of just
compensation. Hence, it was also perfectly
proper for the Order to also provide in its
Section 2 that the "lease rentals paid to the
landowner by the farmer-beneficiary after
October 21, 1972 (pending transfer of
ownership after full payment of just
compensation), shall be considered as advance
payment for the land."
The CARP Law, for its part, conditions the
transfer of possession and ownership of the
land to the government on receipt by the
landowner of the corresponding payment or
the deposit by the DAR of the compensation in
cash or LBP bonds with an accessible bank.
Until then, title also remains with the
landowner. 57 No outright change of ownership
is contemplated either.
Hence, the argument that the assailed
measures violate due process by arbitrarily
transferring title before the land is fully paid
for must also be rejected.
It is worth stressing at this point that all rights
acquired by the tenant-farmer under P.D. No.
27, as recognized under E.O. No. 228, are
retained by him even now under R.A. No.
6657. This should counterbalance the express
provision in Section 6 of the said law that "the
landowners whose lands have been covered by
Presidential Decree No. 27 shall be allowed to
keep the area originally retained by them
thereunder, further, That original homestead
grantees or direct compulsory heirs who still
own the original homestead at the time of the
approval of this Act shall retain the same areas
as long as they continue to cultivate said
homestead."
In connection with these retained rights, it
does not appear in G.R. No. 78742 that the
appeal filed by the petitioners with the Office
of the President has already been resolved.
Although we have said that the doctrine of
exhaustion of administrative remedies need
not preclude immediate resort to judicial
action, there are factual issues that have yet to
be examined on the administrative level,
especially the claim that the petitioners are not
covered by LOI 474 because they do not own
other agricultural lands than the subjects of
their petition.
Obviously, the Court cannot resolve these
issues. In any event, assuming that the
petitioners have not yet exercised their
retention rights, if any, under P.D. No. 27, the
Court holds that they are entitled to the new
retention rights provided for by R.A. No. 6657,
which in fact are on the whole more liberal
than those granted by the decree.
V
The CARP Law and the other enactments also 2. Title to all expropriated properties shall
involved in these cases have been the subject be transferred to the State only upon full
of bitter attack from those who point to the payment of compensation to their respective
shortcomings of these measures and ask that owners.
they be scrapped entirely. To be sure, these
enactments are less than perfect; indeed, they 3. All rights previously acquired by the
should be continuously re-examined and tenant-farmers under P.D. No. 27 are retained
rehoned, that they may be sharper and recognized.
instruments for the better protection of the
4. Landowners who were unable to
farmer's rights. But we have to start
exercise their rights of retention under P.D.
somewhere. In the pursuit of agrarian reform,
No. 27 shall enjoy the retention rights granted
we do not tread on familiar ground but grope
by R.A. No. 6657 under the conditions therein
on terrain fraught with pitfalls and expected
prescribed.
difficulties. This is inevitable. The CARP Law is
not a tried and tested project. On the contrary,
5. Subject to the above-mentioned
to use Justice Holmes' words, "it is an
rulings, all the petitions are DISMISSED,
experiment, as all life is an experiment," and
without pronouncement as to costs.
so we learn as we venture forward, and, if
necessary, by our own mistakes. We cannot SO ORDERED.
expect perfection although we should strive for
it by all means. Meantime, we struggle as best
we can in freeing the farmer from the iron
shackles that have unconscionably, and for so THIRD DIVISION
long, fettered his soul to the soil. LexLib
[G.R. No. 118712. July 5, 1996.]
By the decision we reach today, all major legal
LAND BANK OF THE PHILIPPINES, petitioner,
obstacles to the comprehensive agrarian
vs. COURT OF APPEALS, PEDRO L. YAP, HEIRS
reform program are removed, to clear the way
OF EMILIANO F. SANTIAGO, AGRICULTURAL
for the true freedom of the farmer. We may
MANAGEMENT & DEVELOPMENT
now glimpse the day he will be released not
CORPORATION, respondents.
only from want but also from the exploitation
and disdain of the past and from his own
[G.R. No. 118745. July 5, 1996.]
feelings of inadequacy and helplessness. At
last his servitude will be ended forever. At last DEPARTMENT OF AGRARIAN REFORM,
the farm on which he toils will be his farm. It represented by the Secretary of Agrarian
will be his portion of the Mother Earth that will Reform, petitioner, vs. COURT OF APPEALS,
give him not only the staff of life but also the PEDRO L. YAP, HEIRS OF EMILIANO F.
joy of living. And where once it bred for him SANTIAGO, AGRICULTURAL MANAGEMENT
only deep despair, now can he see in it the AND DEVELOPMENT CORPORATION, ET AL.,
fruition of his hopes for a more fulfilling future. respondents.
Now at last can he banish from his small plot
of earth his insecurities and dark resentments Solicitor General for petitioner.
and "rebuild in it the music and the dream."
Gonzales, Aquino & Associates for Land Bank
WHEREFORE, the Court holds as follows: of the Philippines.

1. R.A. No. 6657, P.D. No. 27, Proc. No.
131, and E.O. Nos. 228 and 229 are
SUSTAINED against all the constitutional
objections raised in the herein petitions.
Delfin B. Samson for DAR Secretary.
Fernando A. Santiago for private respondents.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION;
AGRARIAN REFORM; REPUBLIC ACT 6657;
"CASH" OR IN "LBP BONDS" ARE THE TYPES
OF DEPOSIT TO BE MADE AS COMPENSATION
FOR THE REJECTING LANDOWNERS. Section
16(e) of Republic Act 6657 was very specific in
limiting the type of deposit to be made as
compensation for the rejecting landowners,
that is in "cash" or in "LBP bonds", to wit:
"Sec. 16. Procedure for Acquisition of Private
Lands . . . (e) Upon receipt by the
landowner of the corresponding payment or, in
case of rejection or no response from the
landowner, upon the deposit with an accessible
bank designated by the DAR of the
compensation in cash or in LBP bonds in
accordance with this Act, the DAR shall take
immediate possession of the land and shall
request the proper Register of Deeds of issue a
Transfer Certificate of Title (TCT) in the name
of the Republic of the Philippines. . . ." The
provision is very clear and unambiguous,
foreclosing any doubt as to allow an expanded
construction that would include the opening of
"trust accounts" within the coverage of term
"deposit". Accordingly, we must adhere to the
well-settled rule that when the law speaks in
clear and categorical language, there is no
reason for interpretation or construction, but
only for application.
2. ID.; THE CONCEPT OF FAIR AND JUST
COMPENSATION IN THE EXPROPRIATION OF
PRIVATE PROPERTY UNDER THE CARP; WHAT
IT EMBRACES. Clearly therefore, by
rejecting and disputing the valuation of the
DAR, the landowner is merely exercising his
right to seek just compensation. If we are to
affirm the withholding of the release of the
offered compensation despite depriving the
landowner of the possession and use of his
property, we are in effect penalizing the latter
for simply exercising a right afforded to him by
law. Obviously, this would render the right to
seek a fair and just compensation illusory as it
would discourage owners of private lands from
contesting the offered valuation of the DAR
even if they find it unacceptable, for fear of the
hardships that could result from long delays in
the resolution of their cases. This is contrary to
the rules of fair play because the concept of
just compensation embraces not only the
correct determination of the amount to be paid
to the owners of the land, but also the
payment of the land within a reasonable time
from its taking. Without prompt payment,
compensation cannot be considered "just" for
the property owner is made to suffer the
consequence of being immediately deprived of
his land while being made to wait for a decade
or more before actually receiving the amount
necessary to cope with his loss. To allow the
taking of the landowners' properties, and in the
meantime leave them empty handed by
withholding payment of compensation while
the government speculates on whether or not
it will pursue expropriation, or worse for
government to subsequently decide to
abandon the property and return it to the
landowner when it has already been rendered
useless by force majeure, is undoubtedly an
oppressive exercise of eminent domain that
must never be sanctioned. Legislations in
pursuit of the agrarian reform program are not
mere overnight creations but were the result of
long exhaustive studies and even heated
debates. In implementation of the program,
much is therefore expected from the
government. Unduly burdening the property
owners from the resulting flaws in the
implementation of the CARP which was
supposed to have been a carefully crafted
legislation is plainly unfair and unacceptable.
3. POLITICAL LAW; ADMINISTRATIVE
LAW; THE SCOPE OF ADMINISTRATIVE
REGULATION; RECOURSE TO ANY RULE
WHICH ALLOWS THE OPENING OF TRUST
ACCOUNTS AS A MODE OF DEPOSIT UNDER
SECTION 16(e) OF R.A. 6657 GOES BEYOND
THE SCOPE OF THE SAID PROVISION.
Petitioner DAR maintains that "the deposit
contemplated by Section 16(e) of Republic Act
6657, absent any specific indication, may
either be general or special, regular or
irregular, voluntary or involuntary (necessary)
or other forms known in law, and any thereof
should be, as it is the general rule, deemed
complying." Recourse to any rule which allows
the opening of trust accounts as a mode of
deposit under Section 16(e) of RA 6657 goes
beyond the scope of the said provision and is
therefore impermissible. As we have previously
declared, the rule-making power must be
confined to details for regulating the mode or
proceedings to carry into effect the law as it
has been enacted, and it cannot be extended
to amend or expand the statutory
requirements or to embrace matters not
covered by the statute. Administrative
regulations must always be in harmony with
the provisions of the law because any resulting
discrepancy between the two will always be
resolved in favor of the basic law.
RESOLUTION
FRANCISCO, R., J p:
Consequent to the denial of their petitions for
review on certiorari by this Court on October 6,
19951 , petitioners Department of Agrarian
Reform (DAR) and Land Bank of the Philippines
(LBP), filed their respective motions for
reconsideration contending mainly that,
contrary to the Court's conclusion, the opening
of trust accounts in favor of the rejecting
landowners is sufficient compliance with the
mandate of Republic Act 6657. Moreover, it is
argued that there is no legal basis for allowing
the withdrawal of the money deposited in trust
for the rejecting landowners pending the
determination of the final valuation of their
properties.
Petitioner DAR, maintains that "the deposit
contemplated by Section 16(e) of Republic Act
6657, absent any specific indication, may
either be general or special, regular or
irregular, voluntary or involuntary (necessary)
or other forms known in law, and any thereof
should be, as it is the general rule, deemed
complying." 2
We reject this contention. Section 16(e) of
Republic Act 6657 was very specific in limiting
the type of deposit to be made as
compensation for the rejecting landowners,
that is in "cash" or in "LBP bonds", to wit:
"Sec. 16. Procedure for Acquisition of
Private Lands
xxx xxx xxx
(e) Upon receipt by the landowner of the
corresponding payment or, in case of rejection
or no response from the landowner, upon the
deposit with an accessible bank designated by
the DAR of the compensation in cash or in LBP
bonds in accordance with this Act, the DAR
shall take immediate possession of the land
and shall request the proper Register of Deeds
of issue a Transfer Certificate of Title (TCT) in
the name of the Republic of the Philippines. . .
." (Emphasis)
The provision is very clear and unambiguous,
foreclosing any doubt as to allow an expanded
construction that would include the opening of
"trust accounts" within the coverage of term
"deposit". Accordingly, we must adhere to the
well-settled rule that when the law speaks in
clear and categorical language, there is no
reason for interpretation or construction, but
only for application. 3 Thus, recourse to any
rule which allows the opening of trust accounts
as a mode of deposit under Section 16(e) of
RA 6657 goes beyond the scope of the said
provision and is therefore impermissible. As we
have previously declared, the rule-making
power must be confined to details for
regulating the mode or proceedings to carry
into effect the law as it has been enacted, and
it cannot be extended to amend or expand the
statutory requirements or to embrace matters
not covered by the statute. 4 Administrative
regulations must always be in harmony with
the provisions of the law because any resulting
discrepancy between the two will always be
resolved in favor of the basic law. 5
The validity of constituting trust accounts for
the benefit of the rejecting landowners and
withholding immediate payment to them is
further premised on the latter's refusal to
accept the offered compensation thereby
making it necessary that the amount remains
in the custody of the LBP for safekeeping and
in trust for eventual payment to the
landowners. 6 Additionally, it is argued that
the release of the amount deposited in trust
prior to the final determination of the just
compensation would be premature and expose
the government to unnecessary risks and
disadvantages, citing the possibility that the
government may subsequently decide to
abandon or withdraw from the coverage of the
CARP certain portions of the properties that it
has already acquired, through supervening
administrative determination that the subject
land falls under the exempt category, or by
subsequent legislation allowing additional
exemptions from the coverage, or even the
total scrapping of the program itself. Force
majeure is also contemplated in view of the
devastation suffered by Central Luzon de to
lahar. Petitioner DAR maintains that under
these conditions, the government will be forced
to institute numerous actions for the recovery
of the amounts that it has already paid in
advance to the rejecting landowners. 7
We are not persuaded. As an exercise of police
power, the expropriation of private property
under the CARP puts the landowner, and not
the government, in a situation where the odds
are already stacked against his favor. He has
no recourse but to allow it. His only consolation
is that he can negotiate for the amount of
compensation to be paid for the expropriated
property. As expected, the landowner will
exercise this right to the hilt, but subject
however to the limitation that he can only be
entitled to a "just compensation." Clearly
therefore, by rejecting and disputing the
valuation of the DAR, the landowner is merely
exercising his right to seek just compensation.
If we are to affirm the withholding of the
release of the offered compensation despite
depriving the landowner of the possession and
use of his property, we are in effect penalizing
the latter for simply exercising a right afforded
to him by law.
Obviously, this would render the right to seek
a fair and just compensation illusory as it
would discourage owners of private lands from
contesting the offered valuation of the DAR
even if they find it unacceptable, for fear of the
hardships that could result from long delays in
the resolution of their cases. This is contrary to
the rules of fair play because the concept of
just compensation embraces not only the
correct determination of the amount to be paid
to the owners of the land, but also the
payment of the land within a reasonable time
from its taking. Without prompt payment,
compensation cannot be considered "just" for
the property owner is made to suffer the
consequence of being immediately deprived of
his land while being made to wait for a decade
or more before actually receiving the amount
necessary to cope with his loss. 8
It is significant to note that despite petitioner's
objections to the immediate release of the
rejected compensation, petitioner LBP, taking
into account the plight of the rejecting
landowners, has nevertheless allowed partial
withdrawal through LBP Executive Order No.
003, 9 limited to fifty (50) per cent of the net
cash proceeds. This is a clear confirmation that
petitioners themselves realize the overriding
need of the landowners' immediate access to
the offered compensation despite rejecting its
valuation. But the effort, though laudable, still
falls short because the release of the amount
was unexplainably limited to only fifty per cent
instead of the total amount of the rejected
offer, notwithstanding that the rejecting
landowner's property is taken in its entirety.
The apprehension against the total release of
the rejected compensation is discounted since
the government's interest is amply protected
under the aforementioned payment scheme
because among the conditions already imposed
is that the landowner must execute a Deed of
Conditional Transfer for the subject property.
10
Anent the aforecited risks and disadvantages
to which the government allegedly will be
unnecessarily exposed if immediate withdrawal
of the rejected compensation is allowed, suffice
it to say that in the absence of any substantial
evidence to support the same, the
contemplated scenarios are at the moment
nothing but speculations. To allow the taking of
the landowners' properties, and in the
meantime leave them empty handed by
withholding payment of compensation while
the government speculates on whether or not
it will pursue expropriation, or worse for
government to subsequently decide to
abandon the property and return it to the
landowner when it has already been rendered
useless by force majeure, is undoubtedly an
oppressive exercise of eminent domain that
must never be sanctioned. Legislations in
pursuit of the agrarian reform program are not
mere overnight creations but were the result of
long exhaustive studies and even heated
debates. In implementation of the program,
much is therefore expected from the
government. Unduly burdening the property
owners from the resulting flaws in the
implementation of the CARP which was
supposed to have been a carefully crafted
legislation is plainly unfair and unacceptable.
WHEREFORE, in view of the foregoing,
petitioners' motions for reconsideration are
hereby DENIED for lack of merit.
SO ORDERED.
EN BANC
[G.R. No. 164195. April 5, 2011.]
APO FRUITS CORPORATION and HIJO
PLANTATION, INC., petitioners, vs. LAND BANK
OF THE PHILIPPINES, respondent.
RESOLUTION
BRION, J p:
We resolve Land Bank of the Philippines'
(LBP's) 2nd Motion for Reconsideration of
December 14, 2010 that addresses our
Resolutions of October 12, 2010 and November
23, 2010. This motion prays as well for the
holding of oral arguments. We likewise resolve
the Office of the Solicitor General's (OSG)
Motion for Leave to Intervene and to Admit
Motion for Reconsideration-in-Intervention
dated February 15, 2011 in behalf of the
Republic of the Philippines (Republic).
aEAIDH
The Motion for Reconsideration
The LBP submits the following arguments in
support of its 2nd motion for reconsideration:
a) the test of "transcendental importance"
does not apply to the present case;
b) the standard of "transcendental
importance" cannot justify the negation of the
doctrine of immutability of a final judgment
and the abrogation of a vested right in favor of
the Government that respondent LBP
represents;
c) the Honorable Court ignored the
deliberations of the 1986 Constitutional
Commission showing that just compensation
for expropriated agricultural property must be
viewed in the context of social justice; and
d) granting arguendo that the interest
payment has factual and legal bases, only six
(6%) percent interest per annum may be
validly imposed.
We have more than amply addressed
argument (d) above in our October 12, 2010
Resolution, and we see no point in further
discussing it. Without in any way detracting
from the overriding effect of our main and
primary ruling that the present 2nd motion for
reconsideration is a prohibited motion that the
Court can no longer entertain, and if only to
emphatically signal an unequivocal finis to this
case, we examine for the last and final time
the LBP's other arguments. ETHSAI
In the course of the Court's deliberations, Mr.
Justice Roberto A. Abad questioned the
application of Section 3, Rule 15 of the Internal
Rules of the Supreme Court to the present 2nd
motion for reconsideration. He posited that
instead of voting immediately on the present
2nd motion for reconsideration, the Court
should instead first consider the validity of our
October 12, 2010 Resolution; he claimed that
this Resolution is null and void because the
Court violated the above-cited provision of the
Internal Rules when it did not first vote on
whether the Resolution's underlying motion
(itself a 3rd motion for reconsideration) should
be entertained before voting on the motion's
merits. We shall lay to rest Mr. Justice Abad's
observation before dwelling on the merits of
the present 2nd motion for reconsideration.
Our Ruling
We find no merit in the LBP's second motion
for reconsideration, and reject as well the Mr.
Justice Abad's observation on how to approach
the consideration of the present motion.
Mr. Justice Abad's Observations/Objections;
The Rules on 2nd Motions for Reconsideration.
Mr. Justice Abad's observation apparently
stemmed from the peculiar history of the
present case. TCDHIc
a. A recap of the history of the case.
This case was originally handled by the Third
Division of this Court. In its original Decision of
February 6, 2007, the Division affirmed the
RTC's decision setting the just compensation to
be paid and fixing the interest due on the
balance of the compensation due at 12% per
annum. In its Resolution of December 19,
2007, the Third Division resolved the parties'
motions for reconsideration by deleting the
12% interest due on the balance of the
awarded just compensation. The parties'
subsequent motions to reconsider this
Resolution were denied on April 30, 2008; on
May 16, 2008, entry of judgment followed.
Despite the entry of judgment, the present
petitioners filed a second motion for
reconsideration that prayed as well that the
case be referred to the Court en banc. Finding
merit in these motions, the Third Division
referred the case to the En Banc for its
disposition. On December 4, 2009, the Court
en banc denied the petitioners' second motion
for reconsideration. Maintaining their belief in
their demand to be granted 12% interest, the
petitioners persisted in filing another motion
for reconsideration. In the interim, the Court
promulgated its Internal Rules that regulated,
among others, 2nd motions for
reconsideration. On October 12, 2010, the
Court en banc granted by a vote of 8 for and
4 against the petitioner's motion and
awarded the 12% interests the petitioners'
prayed for, thus affirming the interests the RTC
originally awarded. The Court subsequently
denied the respondent's motion for
reconsideration, giving rise to the present 2nd
motion for reconsideration. It was at this point
that the OSG moved for leave to intervene.
cSaADC
b. The governing rules on
2nd motions for reconsideration
The basic rule governing 2nd motions for
reconsideration is Section 2, Rule 52 (which
applies to original actions in the Supreme
Court pursuant to Section 2, Rule 56) of the
Rules of Court. This Rule expressly provides:
Sec. 2. Second Motion for Reconsideration.
No second motion for reconsideration of a
judgment or final resolution by the same party
shall be entertained.
The absolute terms of this Rule is tempered by
Section 3, Rule 15 of the Internal Rules of the
Supreme Court that provides:
Sec. 3. Second Motion for Reconsideration.
The Court shall not entertain a second motion
for reconsideration and any exception to this
rule can only be granted in the higher interest
of justice by the Court en banc upon a vote of
at least two-thirds of its actual membership.
There is reconsideration "in the higher interest
of justice" when the assailed decision is not
only legally erroneous, but is likewise patently
unjust and potentially capable of causing
unwarranted and irremediable injury or
damage to the parties. A second motion for
reconsideration can only be entertained before
the ruling sought to be reconsidered becomes
final by operation of law or by the Court's
declaration. [Emphases supplied.] ESTaHC
Separately from these rules is Article VIII,
Section 4 (2) of the 1987 Constitution which
governs the decision-making by the Court en
banc of any matter before it, including a
motion for the reconsideration of a previous
decision. This provision states:
Section 4.
xxx xxx xxx
(2) All cases involving the constitutionality
of a treaty, international or executive
agreement, or law, which shall be heard by the
Supreme Court en banc, and all other cases
which under the Rules of Court are required to
be heard en banc, including those involving the
constitutionality, application, or operation of
presidential decrees, proclamations, orders,
instructions, ordinances, and other regulations,
shall be decided with the concurrence of a
majority of the Members who actually took
part in the deliberations on the issues in the
case and voted thereon.
Thus, while the Constitution grants the
Supreme Court the power to promulgate rules
concerning the practice and procedure in all
courts 1 (and allows the Court to regulate the
consideration of 2nd motions for
reconsideration, including the vote that the
Court shall require), these procedural rules
must be consistent with the standards set by
the Constitution itself. Among these
constitutional standards is the above quoted
Section 4 which applies to "all other cases
which under the Rules of Court are required to
be heard en banc," and does not make any
distinction as to the type of cases or rulings it
applies to, i.e., whether these cases are
originally filed with the Supreme Court, or
cases on appeal, or rulings on the merits of
motions before the Court. Thus, rulings on the
merits by the Court en banc on 2nd motions
for reconsideration, if allowed by the Court to
be entertained under its Internal Rules, must
be decided with the concurrence of a majority
of the Members who actually took part in the
deliberations. AIcECS
When the Court ruled on October 12, 2010 on
the petitioners' motion for reconsideration by a
vote of 12 Members (8 for the grant of the
motion and 4 against), the Court ruled on the
merits of the petitioners' motion. This ruling
complied in all respects with the Constitution
requirement for the votes that should support
a ruling of the Court.
Admittedly, the Court did not make any
express prior ruling accepting or disallowing
the petitioners' motion as required by Section
3, Rule 15 of the Internal Rules. The Court,
however, did not thereby contravene its own
rule on 2nd motions for reconsideration; since
12 Members of the Court opted to entertain
the motion by voting for and against it, the
Court simply did not register an express vote,
but instead demonstrated its compliance with
the rule through the participation by no less
than 12 of its 15 Members. Viewed in this light,
the Court cannot even be claimed to have
suspended the effectiveness of its rule on 2nd
motions for reconsideration; it simply complied
with this rule in a form other than by express
and separate voting.
Based on these considerations, arrived at after
a lengthy deliberation, the Court thus rejected
Mr. Justice Abad's observations, and proceeded
to vote on the question of whether to entertain
the respondents' present 2nd motion for
reconsideration. The vote was 9 to 2, with 9
Members voting not to entertain the LBP's 2nd
motion for reconsideration. By this vote, the
ruling sought to be reconsidered for the second
time was unequivocally upheld; its finality
already declared by the Court in its Resolution
of November 23, 2010 was reiterated. To
quote the dispositive portion of the reiterated
November 23, 2010 Resolution: cHCIEA
On these considerations, we hereby DENY the
Motion for Reconsideration with FINALITY. No
further pleadings shall be entertained. Let
entry of judgment be made in due course.
Thus, this Court mandated a clear,
unequivocal, final and emphatic finis to the
present case.
Landowner's right to just compensation:
a matter of public interest
In assailing our October 12, 2010 resolution,
the LBP emphasizes the need to respect the
doctrine of immutability of final judgments.
The LBP maintains that we should not have
granted the petitioners' motion for
reconsideration in our October 12, 2010
Resolution because the ruling deleting the 12%
interest had already attained finality when an
Entry of Judgment was issued. The LBP argues,
too, that the present case does not involve a
matter of transcendental importance, as it
does not involve life or liberty. The LBP further
contends that the Court mistakenly used the
concept of transcendental importance to recall
a final ruling; this standard should only apply
to questions on the legal standing of parties.
In his dissenting opinion, Mr. Justice Roberto
Abad agrees with the LBP's assertion, positing
that this case does not fall under any of the
exceptions to the immutability doctrine since it
only involves money and does not involve a
matter of overriding public interest. aTEACS
We reject the basic premise of the LBP's and
Mr. Justice Abad's arguments for being flawed.
The present case goes beyond the private
interests involved; it involves a matter of
public interest the proper application of a
basic constitutionally-guaranteed right,
namely, the right of a landowner to receive
just compensation when the government
exercises the power of eminent domain in its
agrarian reform program.
Section 9, Article III of the 1987 Constitution
expresses the constitutional rule on eminent
domain "Private property shall not be taken
for public use without just compensation."
While confirming the State's inherent power
and right to take private property for public
use, this provision at the same time lays down
the limitation in the exercise of this power.
When it takes property pursuant to its inherent
right and power, the State has the
corresponding obligation to pay the owner just
compensation for the property taken. For
compensation to be considered "just," it must
not only be the full and fair equivalent of the
property taken; 2 it must also be paid to the
landowner without delay. 3
To fully and properly appreciate the
significance of this case, we have to consider it
in its proper context. Contrary to the LBP's and
Mr. Justice Abad's assertions, the outcome of
this case is not confined to the fate of the two
petitioners alone. This case involves the
government's agrarian reform program whose
success largely depends on the willingness of
the participants, both the farmers-beneficiaries
and the landowners, to cooperate with the
government. Inevitably, if the government
falters or is seen to be faltering through lack of
good faith in implementing the needed
reforms, including any hesitation in paying the
landowners just compensation, this reform
program and its objectives would suffer major
setbacks. That the government's agrarian
reform program and its success are matters of
public interest, to our mind, cannot be
disputed as the program seeks to remedy long
existing and widespread social justice and
economic problems. TACEDI
In a last ditch attempt to muddle the issues,
the LBP focuses on our use of the phrase
"transcendental importance," and asserts that
we erred in applying this doctrine, applicable
only to legal standing questions, to negate the
doctrine of immutability of judgment. This is a
very myopic reading of our ruling as the
context clearly shows that the phrase
"transcendental importance" was used only to
emphasize the overriding public interest
involved in this case. Thus, we said:
That the issues posed by this case are of
transcendental importance is not hard to
discern from these discussions. A constitutional
limitation, guaranteed under no less than the
all-important Bill of Rights, is at stake in this
case: how can compensation in an eminent
domain case be "just" when the payment for
the compensation for property already taken
has been unreasonably delayed? To claim, as
the assailed Resolution does, that only private
interest is involved in this case is to forget that
an expropriation involves the government as a
necessary actor. It forgets, too, that under
eminent domain, the constitutional limits or
standards apply to government who carries the
burden of showing that these standards have
been met. Thus, to simply dismiss the case as
a private interest matter is an extremely
shortsighted view that this Court should not
leave uncorrected. cHESAD
xxx xxx xxx
More than the stability of our jurisprudence,
the matter before us is of transcendental
importance to the nation because of the
subject matter involved agrarian reform, a
societal objective of that the government has
unceasingly sought to achieve in the past half
century. 4
From this perspective, our Resolution of
October 12, 2010 only had to demonstrate, as
it did, that the higher interests of justice are
duly served. All these, amply discussed in the
Resolution of October 12, 2010, are briefly
summarized and reiterated below.
LBP at fault for twelve-
year delay in payment
In his dissenting opinion, Mr. Justice Abad
insists that the LBP's initial valuation of the
petitioners' properties was fully in accord with
Section 17 of the CARL. He posits that when
the RTC gave a significantly higher value to
these lands, the LBP acted well within its rights
when it appealed the valuation. Thus, to him, it
was wrong for this Court to characterize the
LBP's appeal as malicious or in bad faith.
ADCIca
A simple look at the attendant facts disproves
the accuracy of this claim.
First, Mr. Justice Abad's allegation that the LBP
correctly valued the petitioners' properties is
not at all accurate. Significantly, Mr. Justice
Abad does not cite any evidence on record to
support his claim that "the Land Bank valued
the lands using the compensation formula that
Section 17 of Republic Act 6657 and the DAR's
implementing rules provide." 5
More to the point, this Court has already
determined, in a final and executed judgment,
that the RTC's valuation of the petitioners'
properties is the correct one. To recall, the LBP
initially fixed the value of Apo Fruits
Corporation's (AFC) properties at P165,484.47
per hectare or P16.00 per square meter (sqm),
while it valued Hijo Plantation Inc.'s (HPI)
properties at P201,929.97 per hectare, or
approximately P20.00/sqm. In contrast, the
Regional Trial Court fixed the valuation of the
petitioners' properties at P103.33/sqm., or
more than five times the initial valuation fixed
by the LBP.
After reviewing the records, this Court affirmed
the RTC's valuation in its February 6, 2007
decision, noting that it was based on the
following evidence: (a) the Commissioners'
reports, (b) the Cuervo appraisers' report, (c)
the schedule of market values of the City of
Tagum per its 1993 and 1994 Revision of
Assessment and Property Classification, (d) the
value of the permanent improvements found
on the expropriated properties, and (e) the
comparative sales of adjacent lands from early
1995 to early 1997. The Court observed that
the RTC valuation also took into consideration
the land's nature as irrigated land, its location
along the highway, market value, assessor's
value, and the volume and value of its
produce. This valuation is fully in accordance
with Section 17 of RA 6657, which states:
SACHcD
Section 17. Determination of Just
Compensation. In determining just
compensation, the cost of acquisition of the
land, the current value of like properties, its
nature, actual use and income, the sworn
valuation by the owner, the tax declarations,
and the assessment made by government
assessors, shall be considered. The social and
economic benefits contributed by the farmers
and the farm workers and by government to
the property as well as the non-payment of
taxes or loans secured from any government
financing institution on the said land shall be
considered as additional factors to determine
its valuation.
On its face, the staggering difference between
the LBP's initial valuation of the petitioners'
properties (totaling P251,379,104.02) and the
RTC's valuation (totaling P1,383,179,000.00)
a difference of P1,131,799,895.98
amounting to 81% of the total price betrays
the lack of good faith on the part of the
government in dealing with the landowners.
The sheer enormity of the difference between
the two amounts cannot but lead us to
conclude that the LBP's error was grievous and
amounted to nothing less than gross
negligence in the exercise of its duty in this
case, to properly ascertain the just
compensation due to the petitioners.
Mr. Justice Abad further argues that interest on
just compensation is due only where there is
delay in payment. In the present case, the
petitioners allegedly did not suffer any delay in
payment since the LBP made partial payments
prior to the taking of their lands. AcISTE
This argument completely overlooks the
definition of just compensation already
established in jurisprudence. Apart from the
requirement that compensation for
expropriated land must be fair and reasonable,
compensation, to be "just," must also be made
without delay. 6 In simpler terms, for the
government's payment to be considered just
compensation, the landowner must receive it in
full without delay.
In the present case, it is undisputed that the
government took the petitioners' lands on
December 9, 1996; the petitioners only
received full payment of the just compensation
due on May 9, 2008. This circumstance, by
itself, already confirms the unconscionable
delay in the payment of just compensation.
Admittedly, a grain of truth exists in Justice
Abad's observation that the petitioners
received partial payments from the LBP before
the titles to their landholdings were transferred
to the government. The full and exact truth,
however, is that the partial payments at the
time of the taking only amounted to a trifling
five percent (5%) of the actual value of the
expropriated properties, as determined with
finality by this Court. Even taking into
consideration the subsequent partial payments
made totaling P411,769,168.32 (inclusive of
the amounts deposited prior to the taking),
these payments only constituted a mere one-
third (1/3) of the actual value of the
petitioners' properties. DHECac
It should be considered as highlighted in our
October 12, 2010 Resolution that the
properties the government took were fully
operating and earning plantations at the time
of the taking. Thus, the landowners lost not
only their properties, but the fruits of these
properties. These were all lost in 1996, leaving
the landowners without any replacement
income from their properties, except for the
possible interest for the trifling payment made
at the time of the taking that, together with
the subsequent payment, only amounted to a
third of the total amount due. Thus, for twelve
long years, the amount of P971,409,831.68
was withheld from the landowners.
An added dimension to this delayed payment is
the impact of the delay. One impact as
pointed out above is the loss of income the
landowners suffered. Another impact that the
LBP now glosses over is the income that the
LBP earned from the sizeable sum it withheld
for twelve long years. From this perspective,
the unaccounted-for LBP income is unjust
enrichment in its favor and an inequitable loss
to the landowners. This situation was what the
Court essentially addressed when it awarded
the petitioners 12% interest.
Mr. Justice Abad goes on to argue that the
delay should not be attributed to the LBP as it
could not have foreseen that it would take
twelve years for the case to be resolved.
Justice Abad's stance could have been correct
were it not for the fact that the delay in this
case is ultimately attributable to the
government. Two significant factors justify the
attribution of the delay to the government.
AaHDSI
The first is the DAR's gross undervaluation of
the petitioners' properties the government
move that started the cycle of court actions.
The second factor to consider is government
inaction. Records show that after the
petitioners received the LBP's initial valuation
of their lands, they filed petitions with the
DARAB, the responsible agency of the DAR, for
the proper determination of just compensation.
Instead of dismissing these petitions outright
for lack of jurisdiction, the DARAB sat on these
cases for three years. It was only after the
petitioners resorted to judicial intervention,
filing their petitions for the determination of
just compensation with the RTC, that the
petitioners' case advanced.
The RTC interpreted the DARAB's inaction as
reluctance of the government to pay the
petitioners just compensation, a view this
Court affirmed in its October 12, 2010
Resolution.
Expropriation for agrarian reform
requires the payment of just compensation
The LBP claims that the just compensation in
this case should be determined within the
context of the article on social justice found in
the 1987 Constitution. In the LBP's opinion,
when we awarded the petitioners 12% interest
by way of potential income, we removed from
the taking of agricultural properties for
agrarian reform its main public purpose of
righting the wrong inflicted on landless
farmers. aSADIC
By this argument, the LBP effectively attempts
to make a distinction between the just
compensation given to landowners whose
properties are taken for the government's
agrarian reform program and properties taken
for other public purposes. This perceived
distinction, however, is misplaced and is more
apparent than real.
The constitutional basis for our agrarian reform
program is Section 4, Article XIII of the 1987
Constitution, which mandates:
Section 4. The State shall, by law,
undertake an agrarian reform program founded
on the right of farmers and regular farm
workers, who are landless, to own directly or
collectively the lands they till or, in the case of
other farm workers, to receive a just share of
the fruits thereof. To this end, the State shall
encourage and undertake the just distribution
of all agricultural lands, subject to such
priorities and reasonable retention limits as the
Congress may prescribe, taking into account
ecological, developmental, or equity
considerations, and subject to the payment of
just compensation.
This provision expressly provides that the
taking of land for use in the government's
agrarian reform program is conditioned on the
payment of just compensation. Nothing in the
wording of this provision even remotely
suggests that the just compensation required
from the taking of land for the agrarian reform
program should be treated any differently from
the just compensation required in any other
case of expropriation. As explained by
Commissioner Roberto R. Concepcion during
the deliberations of the 1986 Constitutional
Commission: IEaHSD
[T]he term "just compensation" is used in
several parts of the Constitution, and,
therefore, it must have a uniform meaning. It
cannot have in one part a meaning different
from that which appears in the other portion.
If, after all, the party whose property is taken
will receive the real value of the property on
just compensation, that is good enough. 7
In fact, while a proposal was made during the
deliberations of the 1986 Constitutional
Commission to give a lower market price per
square meter for larger tracts of land, the
Commission never intended to give agricultural
landowners less than just compensation in the
expropriation of property for agrarian reform
purposes. 8
To our mind, nothing is inherently
contradictory in the public purpose of land
reform and the right of landowners to receive
just compensation for the expropriation by the
State of their properties. That the petitioners
are corporations that used to own large tracts
of land should not be taken against them. As
Mr. Justice Isagani Cruz eloquently put it:
[S]ocial justice or any justice for that matter
is for the deserving, whether he be a
millionaire in his mansion or a pauper in his
hovel. It is true that, in case of reasonable
doubt, we are called upon to tilt the balance in
favor of the poor, to whom the Constitution
fittingly extends its sympathy and compassion.
But never is it justified to prefer the poor
simply because they are poor, or to reject the
rich simply because they are rich, for justice
must always be served, for poor and rich alike,
according to the mandate of the law. 9 EaDATc
Interest payments borne by government,
not by farmers-beneficiaries
Nor do we find any merit in the LBP's assertion
that the large amount of just compensation
that we awarded the petitioners, together with
the amount of interest due, would necessarily
result in making the farmers-beneficiaries
endure another form of bondage the
payment of an exorbitant amount for the rest
of their lives.
As the petitioners correctly pointed out, the
government's liability for the payment of
interest to the landowner for any delay
attributable to it in paying just compensation
for the expropriated property is entirely
separate and distinct from the farmers-
beneficiaries' obligations to pay regular
amortizations for the properties transferred to
them.
Republic Act No. 6657 (The Comprehensive
Agrarian Reform Law, or CARL) provides for
the specific source of funding to be used by the
government in implementing the agrarian
reform program; this funding does not come
directly from the payments made by the
farmers-beneficiaries. 10
More to the point, under the CARL, the amount
the farmers-beneficiaries must pay the LBP for
their land is, for the most part, subsidized by
the State and is not equivalent to the actual
cost of the land that the Department of
Agrarian Reform paid to the original
landowners. Section 26, Chapter VII of the
CARL provides: DcITaC
SEC. 26. Payment by Beneficiaries.
Lands awarded pursuant to this Act shall be
paid for by the beneficiaries to the LBP in thirty
(30) annual amortizations at six percent (6%)
interest per annum. The payments for the first
three (3) years after the award may be at
reduced amounts as established by the PARC:
Provided, That the first five (5) annual
payments may not be more than five percent
(5%) of the value of the annual gross
productions paid as established by the DAR.
Should the scheduled annual payments after
the fifth year exceed ten percent (10) of the
annual gross production and the failure to
produce accordingly is not due to the
beneficiary's fault, the LBP may reduce the
interest rate or reduce the principal obligation
to make the payment affordable.
Interpreting this provision of the law, DAR
Administrative Order No. 6, Series of 1993
provides:
A. As a general rule, land awarded
pursuant to E.O. 229 and R.A. 6657 shall be
repaid by the Agrarian Reform Beneficiary
(ARB) to LANDBANK in thirty (30) annual
amortizations at six (6%) percent interest per
annum. The annual amortization shall start one
year from date of Certificate of Landownership
Award (CLOA) registration.
B. The payments by the ARBs for the first
three (3) years shall be two and a half percent
(2.5%) of AGP [Annual Gross Production] and
five percent (5.0%) of AGP for the fourth and
fifth years. To further make the payments
affordable, the ARBs shall pay ten percent
(10%) of AGP or the regular amortization,
whichever is lower, from the sixth (6th) to the
thirtieth (30th) year. DEHaAS
Clearly, the payments made by the farmers-
beneficiaries to the LBP are primarily based on
a fixed percentage of their annual gross
production, or the value of the annual
yield/produce of the land awarded to them. 11
The cost of the land will only be considered as
the basis for the payments made by the
farmers-beneficiaries when this amount is
lower than the amount based on the annual
gross production. Thus, there is no basis for
the LBP to claim that our ruling has violated
the letter and spirit of the social justice
provision of the 1987 Constitution. On the
contrary, our ruling is made in accordance with
the intent of the 1987 Constitution.
Motion for Oral Arguments
We deny as well the LBP's motion to set the
case for oral arguments. The submissions of
the parties, as well as the records of the case,
have already provided this Court with enough
arguments and particulars to rule on the issues
involved. Oral arguments at this point would
be superfluous and would serve no useful
purpose.
The OSG's Intervention
The interest of the Republic, for whom the OSG
speaks, has been amply protected through the
direct action of petitioner LBP the
government instrumentality created by law to
provide timely and adequate financial support
in all phases involved in the execution of
needed agrarian reform. The OSG had every
opportunity to intervene through the long
years that this case had been pending but it
chose to show its hand only at this very late
stage when its presence can only serve to
delay the final disposition of this case. The
arguments the OSG presents, furthermore, are
issues that this Court has considered in the
course of resolving this case. Thus, every
reason exists to deny the intervention prayed
for. HICcSA
WHEREFORE, premises considered, the
respondent's second motion for reconsideration
and the motion to set the case for oral
arguments are hereby DENIED WITH
ABSOLUTE FINALITY. The motion for
intervention filed by the Office of the Solicitor
General is, likewise, denied. We reiterate,
under pain of contempt if our directive is
disregarded or disobeyed, that no further
pleadings shall be entertained. Let judgment
be entered in due course.
SO ORDERED.
Carpio Morales, Peralta, Bersamin, Del Castillo,
Villarama, Jr., Perez and Mendoza, JJ., concur.
Corona, C.J. and Velasco, Jr., J., join the
dissent of Justice Abad.
Carpio, J., took no part, prior inhibition.
Nachura, J., is on leave.
Leonardo-de Castro, J., I maintain my vote for
reduced interest rate.
Abad, J., Please see my dissenting opinion.
Sereno, J., See concurring opinion.
Separate Opinions
ABAD, J., dissenting:
I am unable to agree with the ponencia of Mr.
Justice Arturo D. Brion that the respondent
Land Bank of the Philippines (Land Bank) is
guilty of delay and must, therefore, pay
petitioners Apo Fruits Corp. (AFC) and Huo
Plantation, Inc. (HPI) 12% interest on the
compensation awarded to them for their lands.
EISCaD
Brief Factual Background
On October 12, 1995 AFC-HPI voluntarily
offered to sell their lands 1 to the government
under Republic Act 6657, otherwise known as
the Comprehensive Agrarian Reform Law
(CARL). Land Bank valued the properties at
P165,484.47 per hectare, but AFC-HPI rejected
the offer of that amount. Consequently, on
instruction of the Department of Agrarian
Reform (DAR), Land Bank deposited partial
payments in AFC-HPI's bank accounts. Land
Bank deposited for AFC and HPI
P26,409,549.86 and P45,481,706.76,
respectively, or a total of P71,891,256.62.
Upon revaluation of the expropriated
properties, Land Bank eventually made
additional deposits, placing the total amount
paid at P411,769,168.32 (P71,891,256.62 +
P339,877,911.70), an increase of nearly five
times. Both AFC-HPI withdrew the amounts.
Still, they filed separate complaints for just
compensation with the DAR Adjudication Board
(DARAB). But due to DARAB's inaction, they
later filed complaints for determination of just
compensation with the Regional Trial Court
(RTC) of Tagum City.
On September 25, 2001 the RTC ruled in favor
of AFC-HPI, fixing the just compensation for
1,338.6027 hectares of land at
P1,383,179,000.00 (P411,769,168.32 +
P971,409,831.68), more than double the
previous estimated value, and ordering the
payment of 12% interest per annum from the
time of taking until the finality of the decision
plus attorney's fees. SDaHEc
The Third Division of this Court affirmed the
RTC decision in its February 6, 2007 Decision.
But, on motion for reconsideration, the Third
Division deleted the award of interest and
attorney's fees in its December 19, 2007
resolution. Upon finality of this resolution,
entry of judgment was issued on May 16,
2008.
Undaunted, AFC-HPI filed a second motion for
reconsideration with respect to the denial of
the award of legal interest and attorney's fees
and a motion to refer the second motion for
reconsideration to the Court En Banc. The
Third Division subsequently referred the case
to the En Banc. The Court En Banc accepted
the referral but on December 4, 2009 it denied
with finality AFC-HPI's second motion for
reconsideration. An entry of its finality was
duly recorded.
Still AFC-HPI filed a third motion for
reconsideration on the issue of legal interest.
On October 12, 2010 the En Banc granted AFC-
HPI's motion for reconsideration and restored
the additional award of 12% legal interest in
their favor equivalent to P1.331 billion. The
Court held that although Land Bank's deposits
might have been sufficient for the purpose of
immediate taking of the properties, the
deposits were insufficient to excuse Land Bank
from the payment of interest on the unpaid
balance. It found Land Bank to have grossly
undervalued AFC-HPI's properties, thus
resulting in a prolonged suit. On the issue of
immutability of judgment, the Court said that
the matter was of transcendental importance
since it involved agrarian reform. DCaEAS
The Court voted 8-3-1 to issue the above
resolution. Associate Justice Arturo D. Brion
wrote it; Associate Justices Conchita Carpio
Morales, Presbitero J. Velasco, Jr., Mariano C.
Del Castillo, Martin S. Villarama, Jr., Jose
Portugal Perez, Jose Catral Mendoza, and Maria
Lourdes P. A. Sereno concurred. Associate
Justice Lucas P. Bersamin dissented along with
Chief Justice Renato C. Corona and Associate
Justice Antonio Eduardo B. Nachura. Associate
Justice Teresita J. Leonardo-de Castro
maintained her previous vote for a reduced
interest of P400 million. Associate Justice
Antonio T. Carpio took no part. Associate
Justices Roberto A. Abad and Diosdado M.
Peralta who earlier voted to deny the motion
for reconsideration were on leave when the
voting took place.
Land Bank moved for reconsideration of this
turn-around resolution but the En Banc
resolved to deny the same on November 23,
2010 under the same vote. Consequently,
Land Bank filed another motion asking for the
deletion of the award of legal interest.
The Issues Presented
Two issues emerged during the deliberation in
this case:
1. Whether or not respondent Land Bank
has been guilty of delay and, therefore, should
be made to pay AFC-HPI P1.331 billion in
interest; ICTaEH
2. Whether or not it was error for the En
Banc to have issued the October 12, 2010
resolution ordering payment of such interest,
given that AFC-HPI's third motion for
reconsideration was absolutely prohibited and,
even if it were to be treated as a second
motion for reconsideration, the En Banc
violated its Internal Rules which require a vote
of two-thirds of its actual membership (10
votes) to entertain such a motion.
Discussion
First. The ponencia blames Land Bank for the
twelve-year delay in the payment of
compensation to AFC-HPI, claiming that had
the government not grossly undervalued the
expropriated properties and thus betrayed lack
of good faith, it could have prevented the
lengthy legal proceedings in the case.
But the fact that Land Bank did not readily
agree with AFC-HPI regarding the value of the
lands should not mean that Land Bank acted in
bad faith or deliberately delayed payment of
compensation. The records show that Land
Bank valued the lands, using the compensation
formula that Section 17 of Republic Act 6657
and the DAR's implementing rules provide. Can
that be malicious or in bad faith? ICTaEH
Granted that Land Bank appealed the RTC
decision, which awarded a compensation of
P1,383,179,000.00 to AFC-HPI (more than
double what the CARL formula provided) plus
12% interest per annum until the finality of its
decision, such appeal can hardly be regarded
as dilatory and baseless. Indeed, although the
Court affirmed the principal amount that the
RTC fixed, it ordered deleted the grossly
excessive interest of 12% counted from the
date of taking or a period of about 12 years.
Even if the Court changed its mind on a third
motion for reconsideration and after the finality
of its judgment, it cannot be said, therefore,
that Land Bank's appeal was malicious or in
bad faith.
The Court's ruling in Land Bank of the
Philippines vs. Wycoco 2 is clear. Interest on
just compensation is due only in case of delay
in payment, a fact which must be adequately
proved. If, for instance, property is taken for
public use before compensation is given or
deposited in favor of the landowner, then there
is delay and the final compensation must
include an award of interest.
Here, there is no evidence to prove that Land
Bank was in delay. On the contrary, pertinent
amounts were deposited, specifically
P26,409,549.86 for AFC and P45,481,706.76
for HPI, within fourteen months after AFC-HPI
filed the complaint for just compensation
before the RTC. Notably, Land Bank made the
deposits prior to AFC-HPI's titles being
cancelled. The bank afterwards made
additional payments based on upgraded
values, swelling its total payments to
P411,769,168.32 even before the RTC case
was filed. IcaHCS
The ponencia points out that Land Bank paid
only a trifling of the actual value of properties
as later determined by the Court. But I do not
think that P411,769,168.32, a third of the RTC
award and paid even before the suit was filed,
can be regarded as trifling. AFC-HPI did not
linger long to withdraw the deposits, negating
any notion that it suffered long with nothing to
assuage its feelings about the compensation.
Likewise, Land Bank could not have foreseen
that it would take twelve years for the case to
be resolved. AFC-HPI themselves erroneously
filed their complaints with the DARAB instead
of directly seeking recourse with the courts.
The ponencia is requiring Land Bank to pay for
that error and the delays rooted in it.
To iterate, Land Bank had every right to
defend an initial position dictated by law and
not risk sending bank officers to jail for giving
undue benefit to others in violation of the Anti-
graft and Corrupt Practices Act. Land Bank
should not be penalized for taking such
cautious position with respect to money
belonging to the government. The Court should
not, by its present ruling, encourage
government agencies to pay more than what
the law or the rules prescribe unless directed
differently by superior orders. Notably, when
the Third Division of this Court handed down
its December 19, 2007 resolution, Land Bank
immediately settled its unpaid balance of
P971,409,831.68 even before entry of
judgment was issued in the case. cCSTHA
The ponencia states that a second motion for
reconsideration is prohibited. But, it must be
remembered that the October 12, 2010
resolution which Land Bank assails itself
resulted from the grant of a third motion for
reconsideration filed by AFC-HPI. By then, the
February 6, 2007 Decision and December 19,
2007 Resolution of this Court had already
become final and executory, and Land Bank
had already complied with the same by paying
the judgment amounts. By the rule that the
ponencia invokes, the Court should not have
reopened the case in the first place.
The immutability doctrine admits exceptions
such as: a) the correction of clerical errors; b)
the nunc pro tunc entries that cause no
prejudice to any party; c) void judgments; and
d) whenever circumstances transpire after the
finality of the decision rendering its execution
unjust and inequitable. This case does not fall
under any of the exceptions, nor does it
involve life or liberty only money.
Second. The Court must recall its October 12,
2010 resolution granting AFC-HPI's motion for
reconsideration for having been voted on by
the Justices present without an inkling or
awareness that it was actually a third motion
for reconsideration. It was not only a
prohibited motion like second motions for
reconsideration but, evidently a motion in the
category of the not-filed, beyond judicial
cognizance, or non-existent. The Court
unwittingly made a mistake in acting on a
"nothing" motion. Consequently, it must rectify
this mistake by immediately recalling such
resolution. SaHcAC
And, even if AFC-HPI's motion can be treated
as another second motion for reconsideration,
which it is not, the Court En Banc violated
Section 3, Rule 15, of its Internal Rules which
provides that it cannot entertain a second
motion for reconsideration except upon a vote
of two-thirds of its actual membership in the
highest interest of justice. Thus:
SEC. 3. Second motion for reconsideration.
The Court shall not entertain a second motion
for reconsideration, and any exception to this
rule can only be granted in the higher interest
of justice by the Court en banc upon a vote of
at least two-thirds of its actual membership. . .
.
Justice Brion of course points out that since
twelve Justices took part in acting on AFC-
HPI's motion for reconsideration, it may be
assumed that such number agreed to entertain
the same. But this assumption will not do since
the rules require the taking of "a vote" on
whether to entertain such a motion or not. An
assumption of concurrence is not the
equivalent of the taking of a vote. Moreover, in
truth, those who voted to approve the October
12, 2010 resolution simply forgot to vote
before hand on whether or not to entertain
AFC-HPI's motion for reconsideration.
CaTSEA
Notably, it is inevitable that the procedure for
entertaining second motions for
reconsideration should follow the two-step
procedure observed when a Division wants to
refer a case to the En Banc for its
consideration. This requires the En Banc to first
accept the referral before acting to decide the
referred case. This was not done in the present
case. The Minutes do not show that the En
Banc voted by at least two-thirds of its actual
membership to entertain the motion for
reconsideration before approving the draft
resolution for release.
The omission is fatal to the resolution because
the requirement of a two-thirds vote of the En
Banc's actual membership is a specially difficult
bar that the Justices precisely adopted
unanimously to solve the problem of endless
motions for reconsideration that undermine the
stability of the judgments of courts. If the En
Banc ignores this rule to accommodate an
award of P1.331 billion in interest to AFC-HPI,
the public who will pay for it would probably
not be able to understand the En Banc's reason
for making such an exception.
For the above reasons, I vote to RECALL the
Court's Resolution dated October 12, 2010 and
REINSTATE the Resolution dated December 4,
2009. This would render moot and academic
the question of whether or not to give due
course to respondent Land Bank's motion for
reconsideration. ADTEaI
SERENO, J., concurring:
I write separately to express my concern over
what I perceive as an unhealthy invocation of
the Internal Rules of the Supreme Court,
specifically Section 3, Rule 15, on the matter of
entertaining second motions for
reconsideration to set aside a final judgment of
this Court. Admittedly, having been appointed
to the Court after the effectivity of the said
rule on 22 May 2010, I do not have the
advantage of knowing firsthand the history of
the said rule, but I have heard enough, during
the deliberations on this case, of the problem
that will continue to be engendered by Section
3, Rule 15.
I understand that at the time the above rule
was formulated, the Court did not expect that
a conscious two-step process would be so
rigidly demanded by any of its Members to the
point that the rule would be used as basis to
move to recall a final judgment of this Court.
Neither was it fully anticipated that the refusal
to do so would lead to concerns on the possible
removal of Members of the Court for violation
of its own rules. Thus, I agree with the wise
formulation of Justice Arturo D. Brion that the
requirement of the 1987 Constitution,
specifically Article VIII, Section 4 (2) have
been met by the fact that a majority of the
Court took part in the deliberation on 12
October 2010; and therefore, that the voting
that took place thereon was valid, and more
important, that the satisfaction of this
constitutional requirement overrides any
concern about the lack of a conscious, express
super-majority vote by the Court to entertain a
second motion for reconsideration. aICcHA
What is unhealthy from what I see is that the
objection rising from a lack of a super-majority
vote is raised in one case, but not raised in
others by the same objecting member
Justice Roberto A. Abad. If Section 3, Rule 15
of the Internal Rules was such an important
bar that must be met in any motion for
reconsideration, then it should have been
raised by him as well in the still unpromulgated
ruling in the Dinagat case. 1 The Court has
realized the difficulty that the said rule
introduces. It should not be further invoked by
any of its Members in a way that introduces
further instability and fuels the public
perception of a flip-flopping Court. With more
reason, the rule should not have been invoked
only in this case, but not in the two other
highly controversial flip-flopping cases, by any
of the Court's Members who strongly moved
for the reconsideration of the original decision
in League of Cities 2 and for the recall of the
entry of final judgment in Dinagat. Technically,
Section 3, Rule 15 of the Internal Rules of
Court, does not apply to the reconsideration of
the original Decision in League of Cities. Had
there been a consistent intent to protect the
immutability of Supreme Court decisions,
however, a similar rule in the 1997 Rules of
Civil Procedure could have been invoked,
namely, Section 2, Rule 56, in relation to
Section 2, Rule 52, prohibiting the filing of
second motions for reconsideration.
While the classic lines in Banogon v. Zerna 3
are writ in large part to litigants to make them
accept that the orderly administration of
justice means that their causes must end at
some time, it is most earnestly and humbly
believed that those lines must be re-learned by
this Court as well. This re-learning seems
urgent, especially with the reversal of the
original Decision in League of Cities, followed
by the reversal of the fully executory Dinagat
Decision. ICTaEH
To recall those lines:
Litigation must end and terminate sometime
and somewhere and it is essential to an
effective and efficient administration of justice
that, once a judgment has become final, the
winning party be not, through a mere
subterfuge, deprived of the fruits of the
verdict. Courts must therefore guard against
any scheme calculated to bring about that
result. Constituted as they are to put an end to
controversies, courts should frown upon any
attempt to prolong them.
There should be a greater awareness on the
part of litigants that the time of the judiciary,
much more so of this Court, is too valuable to
be wasted or frittered away by efforts, far from
commendable, to evade the operation of a
decision final and executory, especially so,
where, as shown in this case, the clear and
manifest absence of any right calling for
vindication, is quite obvious and indisputable.
That this concern about the endlessness of
litigation should morph from one regarding
the behavior of litigants to one regarding the
stability of the decision-making instincts of the
Members of this Court is shared by Justices
Antonio T. Carpio and Arturo D. Brion as well in
their Opinions in League of Cities and Dinagat.
To re-cast the lines of Banogon v. Zerna, I
would venture to say this: ADSTCa
There should be a greater awareness of the
members of judiciary, that its time, especially
that of the Supreme Court, is too valuable to
be wasted or frittered away by efforts, far from
commendable, that come from any quarter
including its own, to evade the operation of a
decision final and executory, especially so,
where, as shown in this case, the clear and
manifest absence of any right calling for
vindication, is quite obvious and indisputable.
What has been at stake in the flip-flopping
cases and now in the puzzling invocation of the
Internal Rules of the Court in this case is no
less than the risk that the moral force of
Supreme Court judgments will be undermined.
The Supreme Court's word is final because all
the coercive forces of the state apparatus will
ensure its execution, by operation of the
Constitution. The Members of the Court must
never lose sight of the fact that it owes the
authority of its decisions only to the
Constitution and, hence, to the people
themselves. When the moral force of the
decisions of the Supreme Court is lost because
the people do not see in them the application
of procedural rules in an even manner, then it
is conceivable that even the automatic legal
force given to its decisions may likewise be
lost. That would be a most sad period in its
history. SDHAcI
While Justice Brion, in his Dissent in the latest
Dinagat Decision, invokes the non-adherence
to Sec. 3, Rule 15 of the Internal Rules of the
Court as an additional reason to object to the
reversal of the Dinagat original Decision, his
sentiments must be taken in the context of the
recent puzzling reversals of this Court. Thus,
while I am not convinced about the necessity
of the above rule, I understand and fully
support the spirit in which it was made to
restore belief and actual adherence to the
doctrine of immutability of judgments and its
necessary by-product, the stability of judicial
decisions. There need actually be no hard and
fast rule on the matter if the members of this
Court were to remember that there are behind
every good decision, whose dispositive effect
must be immutable, lie fundamental rules of
sound legal reasoning. When these are absent,
as in the reversals of the original decision in
League of Cities and Dinagat, for reasons that
are hollow and even appear unjust, then the
convenient invocation or non-invocation of the
technical rules of procedure acquires a more
egregious, distasteful taste. Such situation
must be avoided by any court with a long-term
perspective of its role, and that understands
the need to guard its legacy. cEaSHC
On the substantial ruling in this case, while I
have full sympathy for the financial condition
of the public respondent and the National
Government, Justice Brion's assessment of the
respective legal rights and obligations of the
parties is correct. In an interim voting that
took place in this case, I had wanted, and
indeed voted for, the imposition of a mere 6%
interest and not a 12% interest on the
principal amount due petitioners. Thus, I do
not fully agree with the rate of interest
imposed by the Decision. It is also correct,
however, that a strong signal must be sent
that the Government cannot willfully refuse to
promptly pay a just obligation. The problem
that remains unaddressed, though, is who
should bear responsibility for the unjust delay
in payment that happened here. The ponencia
has already named the various government
actors whose prompt resolution of petitioners'
claim was required, and who failed to
discharge such duty. Unless these actors are
made operationally liable for the unjust delay,
it will be the taxpayer who will ultimately bear
the adverse financial consequences of our
findings and directive in this case, as usually
happen in most public accountability cases.
Our public officers responsible for guarding the
coffers of our government from irresponsible
acts of its officers must do more than just
accept the immediate effects of the fallo of the
Decision in this case. aHTCIc
SECOND DIVISION
[G.R. No. 175644. October 2, 2009.]
LAND BANK OF THE PHILIPPINES, petitioner,
vs. JOSE MARIE M. RUFINO, NILO M.
RESURRECCION, ARNEL M. ATANACIO and
SUZETTE G. MATEO, respondents.
[G.R. No. 175702. October 2, 2009.]
DEPARTMENT OF AGRARIAN REFORM,
represented by OIC-SECRETARY NASSER C.
PANGANDAMAN, petitioner, vs. JOSE MARIE M.
RUFINO, NILO M. RESURRECCION, ARNEL M.
ATANACIO and SUZETTE G. MATEO,
respondents.
DECISION
CARPIO MORALES, ** J p:
Challenged in these consolidated Petitions for
Review is the December 15, 2005 Decision of
the Court of Appeals 1 in CA-G.R. CV No.
69640 affirming with modification that of
Branch 52 of the Regional Trial Court (RTC) of
Sorsogon in Civil Case No. 98-6438 setting the
valuation of respondents' 138.4018-hectare
land taken under the Comprehensive Agrarian
Reform Program (CARP) at P29,926,000,
exclusive of the value of secondary crops
thereon. HaTDAE
Respondents Jose Marie M. Rufino (Rufino),
Nilo M. Resurreccion (Resureccion), * Arnel M.
Atanacio (Atanacio), and Suzette G. Mateo
(Suzette) are the registered owners in equal
share of a parcel of agricultural land situated in
Barangay San Benon, Irosin, Sorsogon, with an
area of 239.7113 hectares covered by Transfer
Certificate of Title (TCT) No. T-22934. 2
By respondents' claim, in 1989, they
voluntarily offered the aforesaid property to
the government for CARP coverage at
P120,000 per hectare. Acting thereon,
petitioner Department of Agrarian Reform
(DAR) issued a Notice of Land Valuation and
Acquisition dated October 21, 1996 declaring
that out of the total area indicated in the title,
138.4018 hectares was subject to immediate
acquisition at a valuation of P8,736,270.40
based on the assessment of petitioner Land
Bank of the Philippines (LBP).
Respondents having found the valuation
unacceptable, the matter was referred by the
provincial agrarian reform officer of Sorsogon
to the DAR Adjudication Board (DARAB) for the
conduct of summary administrative
proceedings to determine just compensation. 3
HCTEDa
By Decision of November 21, 1997, 4 the
DARAB sustained LBP's valuation upon
respondents' failure to present any evidence to
warrant an increase thereof.
Meanwhile, upon the DAR's application,
accompanied with LBP's certification of deposit
of payment, the Register of Deeds of Sorsogon
partially cancelled TCT No. T-22934
corresponding to the 138.4018-hectare
covered area (hereafter the property) and
issued TCT No. T-47571 in the name of the
Republic of the Philippines (the Republic). The
Republic thereupon subdivided the property
into 85 lots for distribution to qualified farmer-
beneficiaries under Republic Act No. 6657 (RA
6657) or the Comprehensive Agrarian Reform
Law of 1988. 5
On February 23, 1998, respondents lodged
with Branch 52 of the Sorsogon RTC (acting as
a Special Agrarian Court) a complaint for
determination of just compensation against
Ernesto Garilao, in his capacity as then DAR
Secretary, and LBP. Respondents contended
that LBP's valuation was not the full and fair
equivalent of the property at the time of its
taking, the same having been offered in 1989
at P120,000 per hectare. 6 CaDATc
LBP countered that the property was acquired
by the DAR for CARP coverage in 1993 by
compulsory acquisition and not by
respondents' voluntary offer to sell; and that it
determined the valuation thereof in accordance
with RA 6657 and pertinent DAR regulations. 7
The DAR Secretary argued that LBP's valuation
was properly based on DAR issuances. 8
The trial court appointed the parties' respective
nominated commissioners to appraise the
property.
Commissioner Jesus S. Empleo, LBP's
nominee, appraised the property based on,
among other things, the applicable DAR
issuances, average gross production, and
prevailing selling prices of the crops planted
thereon which included coconut, abaca, coffee,
and rice. He arrived at a valuation of
P13,449,579.08. 9 DHITcS
Commissioner Amando Chua of Cuervo
Appraisers, Inc., respondents' nominee, used
the market data approach which relies
primarily on sales and listings of comparable
lots in the neighborhood. Excluding the
secondary crops planted thereon, he valued
the property at P29,925,725. 10
At the witness stand, Eugenio Mateo, Sr.
(Mateo), attorney-in-fact of respondents
Rufino, Resurreccion, and Atanacio, declared
that Commissioner Chua erroneously
considered the secondary crops as merely
enhancing the demand for the property without
them significantly increasing its value; and that
the coffee intercropping on the property which
yielded an estimated profit of P3,000,000,
spread over a 12-year period, should be
considered in the determination of just
compensation. 11
By Decision of July 4, 2000, 12 the trial court
found the market data approach to be more
realistic and consistent with law and
jurisprudence on the full and fair equivalent of
the property. Applying the average rate of
P216,226 per hectare, it arrived at a valuation
of the 138.4018-hectare property at
P29,926,000, to which it added P8,000,000
representing 50% of the value of trees, plants,
and other improvements thereon, bringing the
total to P37,926,000. It disposed thus:
DcHSEa
WHEREFORE, premises considered, judgment
is hereby rendered to wit:
a) Fixing the Just Compensation of the
entire 138.4018 hectares for acquisition
covered by TCT No. T-22934 in the total
amount of THIRTY SEVEN MILLION NINE
HUNDRED TWENTY-SIX THOUSAND
(Php37,926,000.00) Pesos Philippine Currency,
less the amount previously deposited in trust
with the Land Bank which was already received
by the plaintiffs.
b) The Land Bank of the Philippines is
hereby ordered to pay the landowners-
plaintiffs the afore-cited amount less the
amount previously paid to them in the manner
provided by law.
c) Without pronouncement as to costs.
LBP filed a Motion for Reconsideration, while
the DAR filed a Notice of Appeal. By Order
dated August 21, 2000, the trial court denied
the motion of LBP, 13 prompting it to also file
a Notice of Appeal. 14 IHCESD
By consolidated Decision of December 15,
2005, 15 the Court of Appeals sustained the
trial court's valuation of P29,926,000 as just
compensation.
The appellate court found that, among other
things, it would be specious to rely on the
DAR's computation in ostensible compliance
with its own issuances; that Commissioner
Empleo failed to consider available sales data
of comparable properties in the locality; and
that the value of secondary crops should be
excluded as the same is inconclusive in view of
conflicting evidence.
Petitioners and respondents filed their
respective Motions for Reconsideration which
were denied by the appellate court by
Resolution of November 28, 2006. 16 Hence,
petitioners LBP and DAR separately sought
recourse to this Court through the present
Petitions for Review, which were consolidated
in the interest of uniformity of rulings on
related cases. cACHSE
In G.R. No. 175644, LBP maintains that its
valuation of the property at P13,449,579.08
was based on the factors mentioned in RA
6657 and formula prescribed by the DAR; that
its determination should be given weight as it
has the expertise to do the same; and that the
taking of private property for agrarian reform
is not a traditional exercise of the power of
eminent domain as it also involves the exercise
of police power, hence, part of the loss is not
compensable. 17
In G.R. No. 175702, the DAR avers that the
valuation sustained by the appellate court was
determined in contravention of the criteria set
by RA 6657 and relevant jurisprudence. 18
Respondents, for their part, posit in their
consolidated Comment 19 that factual findings
of the trial court, when affirmed by the
appellate court, are conclusive; and that the
just compensation due them should be
equivalent to the market value of the property.
In determining the just compensation due
owners of lands taken for CARP coverage, the
RTC, acting as a Special Agrarian Court, should
take into account the factors enumerated in
Section 17 of RA 6657, as amended, to wit:
DTAcIa
Sec. 17. Determination of Just
Compensation. In determining just
compensation, the cost of acquisition of the
land, the current value of like properties, its
nature, actual use and income, the sworn
valuation by the owner, the tax declarations,
and the assessment made by government
assessors shall be considered. The social and
economic benefits contributed by the farmers
and the farmworkers and by the Government
to the property as well as the non-payment of
taxes or loans secured from any government
financing institution on the said land shall be
considered as additional factors to determine
its valuation. (Emphasis supplied)
The DAR, being the government agency
primarily charged with the implementation of
the CARP, issued Administrative Order No. 6,
Series of 1992 (DAR AO 6-92), as amended by
DAR Administrative Order No. 11, Series of
1994 (DAR AO 11-94), translating the factors
mentioned in Section 17 of RA 6657 into a
basic formula, presented as follows: HDcaAI
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three
factors are present, relevant, and applicable.
A.1. When the CS factor is not present and
CNI and MV are applicable, the formula shall
be:
LV = (CNI x 0.9) + (MV x 0.1)
A.2. When the CNI factor is not present,
and CS and MV are applicable, the formula
shall be: IDaCcS
LV = (CS x 0.9) + (MV x 0.1)
A.3. When both the CS and CNI are not
present and only MV is applicable, the formula
shall be:
LV = MV x 2
The threshold issue then is whether the
appellate court correctly upheld the valuation
by the trial court of the property on the basis
of the market data approach, in disregard of
the formula prescribed by DAR AO 6-92, as
amended.
The petitions are partly meritorious.
While the determination of just compensation
is essentially a judicial function which is vested
in the RTC acting as a Special Agrarian Court,
the Court, in LBP v. Banal, 20 LBP v. Celada,
21 and LBP v. Lim, 22 nonetheless disregarded
the RTC's determination thereof when, as in
the present case, the judge did not fully
consider the factors specifically identified by
law and implementing rules. EcSCHD
In LBP v. Banal, 23 the Court ruled that the
factors laid down in Section 17 of RA 6657 and
the formula stated in DAR AO 6-92, as
amended, must be adhered to by the RTC in
fixing the valuation of lands subjected to
agrarian reform:
In determining just compensation, the RTC is
required to consider several factors
enumerated in Section 17 of R.A. 6657, as
amended, thus:
xxx xxx xxx
These factors have been translated into a basic
formula in [DAO 6-92], as amended by [DAO
11-94], issued pursuant to the DAR's rule-
making power to carry out the object and
purposes of R.A. 6657, as amended.
xxx xxx xxx
While the determination of just compensation
involves the exercise of judicial discretion,
however, such discretion must be discharged
within the bounds of the law. Here, the RTC
wantonly disregarded R.A. 6657, as amended,
and its implementing rules and regulations.
([DAO 6-92], as amended by [DAO 11-94]).
STaIHc
xxx xxx xxx
WHEREFORE, . . . The trial judge is directed to
observe strictly the procedures specified above
in determining the proper valuation of the
subject property. (Underscoring supplied)
And in LBP v. Celada, 24 the Court was
emphatic that the RTC is not at liberty to
disregard the DAR valuation formula which
filled in the details of Section 17 of RA 6657, it
being elementary that rules and regulations
issued by administrative bodies to interpret the
law they are entrusted to enforce have the
force of law.
In fixing the just compensation in the present
case, the trial court, adopting the market data
approach on which Commissioner Chua relied,
25 merely put premium on the location of the
property and the crops planted thereon which
are not among the factors enumerated in
Section 17 of RA 6657. And the trial court did
not apply the formula provided in DAR AO 6-
92, as amended. This is a clear departure from
the settled doctrine regarding the mandatory
nature of Section 17 of RA 6657 and the DAR
issuances implementing it. DaScHC
Not only did Commissioner Chua not consider
Section 17 of RA 6657 and DAR AO 6-92, as
amended, in his appraisal of the property. His
conclusion that the market data approach
conformed with statutory and regulatory
requirements is bereft of basis.
Resolving in the negative the issue of whether
the RTC can resort to any other means of
determining just compensation, aside from
Section 17 of RA 6657 and DAR AO 6-92, as
amended, this Court, in LBP v. Lim, 26 held
that Section 17 of RA 6657 and DAR AO 6-92,
as amended, are mandatory and not mere
guides that the RTC may disregard.
Petitioners maintain that the correct valuation
of the property is P13,449,579.08 as computed
by Commissioner Empleo.
The pertinent provisions of Item II of DAR AO
6-92, as amended by DAR AO 11-94, read:
A. There shall be one basic formula for
the valuation of lands covered by [Voluntary
Offer to Sell] or [Compulsory Acquisition]
regardless of the date of offer or coverage of
the claim: HDTSIE
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three
factors are present, relevant and applicable.
A.1. When the CS factor is not present and
CNI and MV are applicable, the formula shall
be: EHCDSI
LV = (CNI x 0.9) + (MV x 0.1)
xxx xxx xxx
A.5. For purposes of this Administrative
Order, the date of receipt of claimfolder by LBP
from DAR shall mean the date when the
claimfolder is determined by the LBP to be
complete with all the required documents and
valuation inputs duly verified and validated,
and is ready for final computation/processing.
A.6. The basic formula in the grossing-up of
valuation inputs such as . . . Market Value per
Tax Declaration (MV) shall be:
Grossed-up = Valuation input x
Valuation Input Regional Consumer
Price
Index (RCPI) Adjustment
Factor
The RCPI Adjustment Factor shall refer to the
ratio of RCPI for the month issued by the
National Statistics Office as of the date when
the claimfolder (CF) was received by LBP from
DAR for processing or, in its absence, the most
recent available RCPI for the month issued
prior to the date of receipt of CF from DAR and
the RCPI for the month as of the
date/effectivity/registration of the valuation
input. Expressed in equation form: cDCaTS
RCPI for the Month as of the
Date of Receipt of Claimfolder
by LBP from DAR or the Most
recent RCPI for the Month
Issued Prior to the Date of
RCPI Receipt of CF
Adjustment = joint industry studies to establish the
applicable NIR for each crop covered under
Factor RCPI for the Month Issued as
of
the
Date/Effectivity/Registration
of the Valuation Input
B. Capitalized Net Income (CNI) This
shall refer to the difference between the gross
sales (AGP x SP) and total cost of operations
(CO) capitalized at 12%.
Expressed in equation form:
(AGP x SP) - CO
CNI =
.12
Where: CNI = Capitalized Net Income
TEAaDC
AGP = Latest available 12-
month's gross production immediately
preceding the date of offer in case of VOS or
date of notice of coverage in case of CA.
SP = The average of the
latest available 12-month's selling prices prior
to the date of receipt of the claimfolder by LBP
for processing, such prices to be secured from
the Department of Agriculture (DA) and other
appropriate regulatory bodies or, in their
absence, from the Bureau of Agricultural
Statistics. If possible, SP data shall be
gathered from the barangay or municipality
where the property is located. In the absence
thereof, SP may be secured within the province
or region.
CO = Cost of Operations
Whenever the cost of
operations could not be obtained or verified, an
assumed net income rate (NIR) of 20% shall
be used. Landholdings planted to coconut
which are productive at the time of
offer/coverage shall continue to use the 70%
NIR. DAR and LBP shall continue to conduct
CARP. aACHDS
.12 = Capitalization Rate
xxx xxx xxx
D. In the computation of Market Value per
Tax Declaration (MV), the most recent Tax
Declaration (TD) and Schedule of Unit Market
Value (SMV) issued prior to receipt of
claimfolder by LBP shall be considered. The
Unit Market Value (UMV) shall be grossed up
from the date of its effectivity up to the date of
receipt of claimfolder by LBP from DAR for
processing, in accordance with item II.A.A.6.
(Emphasis and italics supplied)
In thus computing Capitalized Net Income
(CNI), the Average Gross Production (AGP) of
the latest available 12 months immediately
preceding the date of offer in case of voluntary
offer to sell or date of notice of coverage in
case of compulsory acquisition, and the
average Selling Price (SP) of the latest
available 12 months prior to the date of receipt
of the claimfolder by LBP for processing,
should be used. ScHAIT
While these dates-bases of computation are
not clearly indicated in the records (as the
mode of acquisition is in fact disputed), the
date of offer (assuming the acquisition was by
voluntary offer to sell) would have to be
sometime in 1989, the alleged time of
voluntary offer to sell; whereas the date of
notice of coverage (assuming the acquisition
was compulsory) would be sometime prior to
October 21, 1996, which is the date of the
Notice of Land Valuation and Acquisition,
because under DAR Administrative Order No.
9, series of 1990, 27 as amended by DAR
Administrative Order No. 1, series of 1993, the
notice of coverage precedes the Notice of Land
Valuation and Acquisition.
And the claimfolder would have been received
by LBP in or before 1997, the year the
property was distributed to agrarian reform
beneficiaries, 28 because land distribution is
the last step in the procedure prescribed by
the above-said DAR administrative orders.
Hence, the data for the AGP should pertain to a
period in 1989 (in case of voluntary offer to
sell) or prior to October, 1996 (in case of
compulsory acquisition), while the data for the
SP should pertain to 1997 or earlier. HCTAEc
Commissioner Empleo, however, instead used
available data within the 12-month period prior
to his ocular inspection in October 1998 for the
AGP, 29 and the average selling price for the
period January 1998 to December 1998 for the
SP, 30 contrary to DAR AO 6-92, as amended.
Furthermore, the Regional Consumer Price
Index (RCPI) Adjustment Factor, which is used
in computing the market value of the property,
is the ratio of the RCPI for the month when the
claimfolder was received by LBP, to the RCPI
for the month of the registration of the most
recent Tax Declaration and Schedule of Unit
Market Value 31 issued prior to receipt of
claimfolder by LBP. Consistent with the
previous discussion, the applicable RCPIs
should therefore be dated 1997 or earlier.
Again, Commissioner Empleo instead used
RCPI data for January 1999 in computing the
RCPI Adjustment Factor, 32 contrary to DAR
AO 6-92, as amended. aEcADH
Parenthetically, Commissioner Empleo testified
33 that his computations were based on DAR
Administrative Order No. 5, series of 1998. 34
This Administrative Order took effect only on
May 11, 1998, however, hence, the applicable
valuation rules in this case remain to be those
prescribed by DAR AO 6-92, as amended by
DAR AO 11-94.
But even if the 1998 valuation rules were
applied, the data for the AGP would still pertain
to a period prior to October 1996, the revised
reference date being the date of the field
investigation which precedes the Notice of
Land Valuation and Acquisition; while the data
for the SP and the RCPIs would still pertain to
1997 or earlier, there being no substantial
revisions in their reference dates.
Finally, as reflected earlier, Commissioner
Empleo did not consider in his computation the
secondary crops planted on the property
(coffee, pili, cashew, etc.), contrary to DAR AO
6-92, as amended, which provides that the
"[t]otal income shall be computed from the
combination of crops actually produced on the
covered land whether seasonal or permanent".
35 DcaECT
IN FINE, the valuation asserted by petitioners
does not lie.
While the Court is minded to write finis to this
protracted litigation by itself computing the
just compensation due respondents, the
evidence on record is not sufficient for the
purpose. The Court is thus constrained to
remand the case for determination of the
valuation of the property by the trial court,
which is mandated to consider the factors
provided under Section 17 of RA 6657, as
amended, and as translated into the formula
prescribed in DAR AO 6-92, as amended by
DAR AO 11-94.
The trial court may, motu proprio or at the
instance of any of the parties, again appoint
one or more commissioners to ascertain facts
relevant to the dispute and file a written report
thereof. The amount determined by the trial
court would then be the basis of interest
income on the cash and bond deposits due
respondents from the time of the taking of the
property up to the time of actual payment of
just compensation. 36 aASEcH
WHEREFORE, the challenged Decision of the
Court of Appeals is REVERSED and SET ASIDE.
Civil Case No. 98-6438 is REMANDED to
Branch 52 of the Sorsogon RTC which is
directed to determine with dispatch the just
compensation due respondents strictly in
accordance with the procedures specified
above.
SO ORDERED.
[G.R. No. 143276. July 20, 2004.]
LANDBANK OF THE PHILIPPINES, petitioner,
vs. SPOUSES VICENTE BANAL and LEONIDAS
ARENAS-BANAL, respondents.
Miguel M. Gonzales Rosemarie M. Osoteo and
Ricarte P. A. Rey and Norberto L. Martinez and
Dominador S. Reyes for petitioner.
Manuel Ferrer for respondents.
SYNOPSIS
Respondents-spouses Vicente Banal and
Leonidas Banal are the registered owners of
19.3422 hectares of agricultural land situated
in San Felipe, Basud, Camarines Norte covered
by Transfer Certificate of Title No. T-6296. A
portion of the land consisting of 6.2330
hectares was compulsorily acquired by the
Department of Agrarian Reform (DAR)
pursuant to Republic Act (R.A.) No. 6657, as
amended, otherwise known as the
Comprehensive Agrarian Reform Law of 1988.
Respondents rejected the valuation made by
the Land Bank of the Philippines. Pursuant to
Section 16(d) of R.A. 6657, as amended, a
summary administrative proceeding was
conducted before the Provincial Agrarian
Reform Adjudicator (PARAD) to determine the
valuation of the land. Eventually, the PARAD
rendered its Decision affirming the Landbank's
valuation. Dissatisfied with the Decision of the
PARAD, respondents filed with the Regional
Trial Court (RTC), Branch 40, Daet, Camarines
Norte, designated as a Special Agrarian Court,
a petition for determination of just
compensation. The trial court computed the
just compensation for the 5.4730 hectares of
coconut land at P657,137.00 and for the
riceland at P16,000.00, or a total of
P703,137.00, which is beyond respondents'
valuation of P623,000.00. The court further
awarded compounded interest at P79,732.00
in cash. Forthwith, petitioner Landbank filed
with the Court of Appeals a petition for review.
The Appellate Court rendered a Decision
affirming in toto the judgment of the trial
court. The Landbank's motion for
reconsideration was likewise denied. Hence,
the petition for review on certiorari. CaDEAT
The Supreme Court granted the petition and
reversed the assailed Decision of the Court of
Appeals. The trial court failed to observe the
basic rules of procedure and the fundamental
requirements in determining just compensation
for the property. The trial court dispensed with
the hearing and merely ordered the parties to
submit their respective memoranda. Such
action is grossly erroneous since the
determination of just compensation involves
the examination of the factors specified in
Section 17 of R.A. 6657. The said factors
involve factual matters which can be
established only during a hearing wherein the
contending parties present their respective
evidence. The Court further ruled that trial
court erred in applying the formula prescribed
under Executive Order (EO) No. 228 and R.A.
No. 3844, as amended, in determining the
valuation of the property; and in granting
compounded interest pursuant to DAR
Administrative Order No. 13, Series of 1994.
The Court stressed that EO No. 228 covers
private agricultural lands primarily devoted to
rice and corn, while R.A. 3844 governs
agricultural leasehold relation between "the
person who furnishes the landholding, either as
owner, civil law lessee, usufructuary, or legal
possessor, and the person who personally
cultivates the same." The subject land is
planted with coconut and rice and does not
involve agricultural leasehold relation. The trial
court should have applied the formula in DAR
Administrative Order No. 6, as amended by
DAR Administrative Order No. 11. The Court
remanded the case to the trial court for trial on
the merits with dispatch. The trial judge was
also directed to observe strictly the procedures
in determining the proper valuation of the case pending before it and applied the same to
subject property. cHSIDa this case without conducting a hearing and
worse, without the knowledge or consent of
SYLLABUS the parties. Well-settled is the rule that courts
are not authorized to take judicial notice of the
1. LABOR AND SOCIAL LEGISLATION;
contents of the records of other cases even
COMPREHENSIVE AGRARIAN REFORM LAW;
when said cases have been tried or are
DETERMINATION OF JUST COMPENSATION;
pending in the same court or before the same
TRIAL COURT FAILED TO OBSERVE THE BASIC
judge. They may only do so "in the absence of
RULES OF PROCEDURE IN DETERMINING JUST
objection" and "with the knowledge of the
COMPENSATION FOR THE PROPERTY; CASE AT
opposing party," which are not obtaining here.
BAR. The RTC failed to observe the basic
Furthermore, as earlier stated, the Rules of
rules of procedure and the fundamental
Court shall apply to all proceedings before the
requirements in determining just compensation
Special Agrarian Courts. In this regard, Section
for the property. Firstly, it dispensed with the
3, Rule 129 of the Revised Rules on Evidence is
hearing and merely ordered the parties to
explicit on the necessity of a hearing before a
submit their respective memoranda. Such
court takes judicial notice of a certain matter,
action is grossly erroneous since the
thus: "SEC. 3. Judicial notice, when hearing
determination of just compensation involves
necessary. During the trial, the court, on its
the examination of the following factors
own initiative, or on request of a party, may
specified in Section 17 of R.A. 6657, as
announce its intention to take judicial notice of
amended: 1. the cost of the acquisition of the
any matter and allow the parties to be heard
land; 2. the current value of like properties; 3.
thereon. "After the trial, and before judgment
its nature, actual use and income; 4. the sworn
or on appeal, the proper court, on its own
valuation by the owner; the tax declarations;
initiative or on request of a party, may take
5. the assessment made by government
judicial notice of any matter and allow the
assessors; 6. the social and economic benefits
parties to be heard thereon if such matter is
contributed by the farmers and the
decisive of a material issue in the case." The
farmworkers and by the government to the
RTC failed to observe the above provisions.
property; and 7. the non-payment of taxes or
loans secured from any government financing 3. LABOR AND SOCIAL LEGISLATION;
institution on the said land, if any. Obviously, COMPREHENSIVE AGRARIAN REFORM LAW;
these factors involve factual matters which can DETERMINATION OF JUST COMPENSATION;
be established only during a hearing wherein TRIAL COURT ERRED IN APPLYING THE
the contending parties present their respective FORMULA PRESCRIBED UNDER EXECUTIVE
evidence. In fact, to underscore the intricate ORDER NO. 3844, AS AMENDED, IN
nature of determining the valuation of the DETERMINING THE VALUATION OF THE
land, Section 58 of the same law even PROPERTY AND IN GRANTING COMPOUNDED
authorizes the Special Agrarian Courts to INTEREST PURSUANT TO DAR
appoint commissioners for such purpose. ADMINISTRATIVE ORDER NO. 13, SERIES OF
CaDEAT 1994. The RTC erred in applying the formula
prescribed under Executive Order (EO) No. 228
2. REMEDIAL LAW; EVIDENCE; JUDICIAL
and R.A. No. 3844, as amended, in
NOTICE; COURTS ARE NOT AUTHORIZED TO
determining the valuation of the property; and
TAKE JUDICIAL NOTICE OF THE CONTENTS OF
in granting compounded interest pursuant to
RECORDS OF OTHER CASES EVEN WHEN SAID
DAR Administrative Order No. 13, Series of
CASES HAVE BEEN TRIED OR ARE PENDING IN
1994. It must be stressed that EO No. 228
THE SAME COURT OR BEFORE THE SAME
covers private agricultural lands primarily
JUDGE. The RTC, in concluding that the
devoted to rice and corn, while R.A. 3844
valuation of respondents' property is
governs agricultural leasehold relation between
P703,137.00, merely took judicial notice of the
"the person who furnishes the landholding,
average production figures in the Rodriguez
either as owner, civil law lessee, usufructuary, the valuation of the land. Furthermore, upon
or legal possessor, and the person who its own initiative, or at the instance of any of
personally cultivates the same." Here, the land the parties, the trial court may appoint one or
is planted to coconut and rice and does not more commissioners to examine, investigate
involve agricultural leasehold relation. What and ascertain facts relevant to the dispute.
the trial court should have applied is the aCIHcD
formula in DAR Administrative Order No. 6, as
amended by DAR Administrative Order No. 11 DECISION
discussed earlier. cCSDTI
SANDOVAL-GUTIERREZ, J p:
4. ID.; ID.; ID.; AWARD OF
Spouses Vicente and Leonidas Banal,
COMPOUNDED INTEREST APPLICABLE ONLY
respondents, are the registered owners of
TO THOSE LANDS TAKEN UNDER
19.3422 hectares of agricultural land situated
PRESIDENTIAL DECREE NO. 27. As regards
in San Felipe, Basud, Camarines Norte covered
the award of compounded interest, suffice it to
by Transfer Certificate of Title No. T-6296. A
state that DAR Administrative Order No. 13,
portion of the land consisting of 6.2330
Series of 1994 does not apply to the subject
hectares (5.4730 of which is planted to
land but to those lands taken under
coconut and 0.7600 planted to palay) was
Presidential Decree No. 27 and Executive Order
compulsorily acquired by the Department of
No. 228 whose owners have not been
Agrarian Reform (DAR) pursuant to Republic
compensated. In this case, the property is
Act (R.A.) No. 6657, 1 as amended, otherwise
covered by R.A. 6657, as amended, and
known as the Comprehensive Agrarian Reform
respondents have been paid the provisional
Law of 1988. cDCaHA
compensation thereof, as stipulated during the
pre-trial.
In accordance with the formula prescribed in
DAR Administrative Order No. 6, Series of
5. ID.; ID.; ID.; WHILE DETERMINATION
1992, 2 as amended by DAR Administrative
OF JUST COMPENSATION INVOLVES THE
Order No. 11, Series of 1994, 3 the Land Bank
EXERCISE OF JUDICIAL DISCRETION, SUCH
of the Philippines 4 (Landbank), petitioner,
DISCRETION MUST BE DISCHARGED WITHIN
made the following valuation of the property:
THE BOUNDS OF THE LAW. While the
determination of just compensation involves
Acquired property Area in hectares
the exercise of judicial discretion, however,
Value
such discretion must be discharged within the
bounds of the law. Here, the RTC wantonly
disregarded R.A. 6657, as amended, and its
implementing rules and regulations. (DAR Coconut land 5.4730 P148,675.19
Administrative Order No. 6, as amended by
DAR Administrative Order No. 11). In sum, we Riceland 0.7600 25,243.36
find that the Court of Appeals and the RTC
==========
erred in determining the valuation of the
subject land. Thus, we deem it proper to
P173,918.55
remand this case to the RTC for trial on the
merits wherein the parties may present their Respondents rejected the above valuation.
respective evidence. In determining the Thus, pursuant to Section 16(d) of R.A. 6657,
valuation of the subject property, the trial as amended, a summary administrative
court shall consider the factors provided under proceeding was conducted before the Provincial
Section 17 of R.A. 6657, as amended, Agrarian Reform Adjudicator (PARAD) to
mentioned earlier. The formula prescribed by determine the valuation of the land.
the DAR in Administrative Order No. 6, Series Eventually, the PARAD rendered its Decision
of 1992, as amended by DAR Administrative affirming the Landbank's valuation.
Order No. 11, Series of 1994, shall be used in
Dissatisfied with the Decision of the PARAD,
respondents filed with the Regional Trial Court
(RTC), Branch 40, Daet, Camarines Norte,
designated as a Special Agrarian Court, a
petition for determination of just
compensation, docketed as Civil Case No.
6806. Impleaded as respondents were the DAR
and the Landbank. Petitioners therein prayed
for a compensation of P100,000.00 per hectare
for both coconut land and riceland, or an
aggregate amount of P623,000.00.
During the pre-trial on September 23, 1998,
the parties submitted to the RTC the following
admissions of facts: (1) the subject property is
governed by the provisions of R.A. 6657, as
amended; (2) it was distributed to the
farmers-beneficiaries; and (3) the Landbank
deposited the provisional compensation based
on the valuation made by the DAR. 5
On the same day after the pre-trial, the court
issued an Order dispensing with the hearing
and directing the parties to submit their
respective memoranda. 6
In its Decision dated February 5, 1999, the
trial court computed the just compensation for
the coconut land at P657,137.00 and for the
riceland at P46,000.00, or a total of
P703,137.00, which is beyond respondents'
valuation of P623,000.00. The court further
awarded compounded interest at P79,732.00
in cash. The dispositive portion of the Decision
reads:
"WHEREFORE, judgment is hereby rendered as
follows:
1. Ordering respondent Landbank to pay
the petitioners, the spouses Dr. Vicente Banal
and Leonidas Arenas-Banal, for the 5.4730
hectares of coconut land the sum of SIX
HUNDRED FIFTY-SEVEN THOUSAND ONE
HUNDRED THIRTY-SEVEN PESOS
(P657,137.00) in cash and in bonds in the
proportion provided by law;
2. Ordering respondent Landbank to pay
the petitioners for the .7600 hectares of
riceland the sum of FORTY-SIX THOUSAND
PESOS (P46,000.00) in cash and in bonds in
the proportion provided by law; and
3. Ordering respondent Landbank to pay
the petitioners the sum of SEVENTY-NINE
THOUSAND SEVEN HUNDRED THIRTY-TWO
PESOS (P79,732.00) as the compounded
interest in cash.
IT IS SO ORDERED." 7
In determining the valuation of the land, the
trial court based the same on the facts
established in another case pending before it
(Civil Case No. 6679, "Luz Rodriguez vs. DAR,
et al."), using the following formula:
For the coconut land
1. Average Gross Production (AGP) x .70
x 9.70 (price per kilo of coconut) = Net Income
(NI)
2. NI/6% = Price Per Hectare (PPH)
(applying the capitalization formula under
Republic Act No. 3844 8 )
For the riceland
1. 2.5 x AGP x Government Support Price
(GSP) = Land Value (LV) or PPH (using the
formula under Executive Order No. 228 9 )
2. AGP x 6% compounded annually for 26
years x GSP = Interest (pursuant to DAR AO
No. 13, Series of 1994)
Forthwith, the Landbank filed with the Court of
Appeals a petition for review, docketed as CA-
G.R. SP No. 52163.
On March 20, 2000, the Appellate Court
rendered a Decision 10 affirming in toto the
judgment of the trial court. The Landbank's
motion for reconsideration was likewise denied.
11
Hence, this petition for review on certiorari.
The fundamental issue for our resolution is
whether the Court of Appeals erred in
sustaining the trial court's valuation of the
land. As earlier mentioned, there was no trial
on the merits.
To begin with, under Section 1 of Executive
Order No. 405 (1990), the Landbank is
charged "primarily" with "the determination of
the land valuation and compensation for all
private lands suitable for agriculture under the
Voluntary Offer to Sell or Compulsory
Acquisition arrangement . . ." For its part, the
DAR relies on the determination of the land
valuation and compensation by the Landbank.
12
Based on the Landbank's valuation of the land,
the DAR makes an offer to the landowner. 13
If the landowner accepts the offer, the
Landbank shall pay him the purchase price of
the land after he executes and delivers a deed
of transfer and surrenders the certificate of
title in favor of the government. 14 In case the
landowner rejects the offer or fails to reply
thereto, the DAR adjudicator 15 conducts
summary administrative proceedings to
determine the compensation for the land by
requiring the landowner, the Landbank and
other interested parties to submit evidence as
to the just compensation for the land. 16
These functions by the DAR are in accordance
with its quasi-judicial powers under Section 50
of R.A. 6657, as amended, which provides:
"SEC. 50. Quasi-Judicial Powers of the
DAR. The DAR is hereby vested with primary
jurisdiction to determine and adjudicate
agrarian reform matters and shall have
exclusive original jurisdiction over all matters
involving the implementation of agrarian
reform, except those falling under the
exclusive jurisdiction of the Department of
Agriculture (DA) and the Department of
Environment and Natural Resources (DENR).
xxx xxx xxx."
A party who disagrees with the decision of the
DAR adjudicator may bring the matter to the
RTC designated as a Special Agrarian Court 17
"for final determination of just compensation."
18
In the proceedings before the RTC, it is
mandated to apply the Rules of Court 19 and,
on its own initiative or at the instance of any of
the parties, "appoint one or more
commissioners to examine, investigate and
ascertain facts relevant to the dispute,
including the valuation of properties, and to file
a written report thereof . . ." 20 In determining
just compensation, the RTC is required to
consider several factors enumerated in Section
17 of R.A. 6657, as amended, thus:
"Sec. 17. Determination of Just
Compensation. In determining just
compensation, the cost of acquisition of the
land, the current value of like properties, its
nature, actual use and income, the sworn
valuation by the owner, the tax declarations,
and the assessment made by government
assessors shall be considered. The social and
economic benefits contributed by the farmers
and the farmworkers and by the Government
to the property, as well as the non-payment of
taxes or loans secured from any government
financing institution on the said land, shall be
considered as additional factors to determine
its valuation."
These factors have been translated into a basic
formula in DAR Administrative Order No. 6,
Series of 1992, as amended by DAR
Administrative Order No. 11, Series of 1994,
issued pursuant to the DAR's rule-making
power to carry out the object and purposes of
R.A. 6657, as amended. 21
The formula stated in DAR Administrative
Order No. 6, as amended, is as follows:
"LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three
factors are present, relevant and applicable.
A.1 When the CS factor is not present and
CNI and MV are applicable, the formula shall
be:
LV = (CNI x 0.9) + (MV x 0.1)
A.2 When the CNI factor is not present,
and CS and MV are applicable, the formula
shall be:
LV = (CS x 0.9) + (MV x 0.1)
A.3 When both the CS and CNI are not
present and only MV is applicable, the formula
shall be:
LV = MV x 2"
Here, the RTC failed to observe the basic rules
of procedure and the fundamental
requirements in determining just compensation
for the property. Firstly, it dispensed with the
hearing and merely ordered the parties to
submit their respective memoranda. Such
action is grossly erroneous since the
determination of just compensation involves
the examination of the following factors
specified in Section 17 of R.A. 6657, as
amended: CIaDTE
1. the cost of the acquisition of the land;
2. the current value of like properties;
3. its nature, actual use and income;
4. the sworn valuation by the owner; the
tax declarations;
5. the assessment made by government
assessors;
6. the social and economic benefits
contributed by the farmers and the
farmworkers and by the government to the
property; and
7. the non-payment of taxes or loans
secured from any government financing
institution on the said land, if any.
Obviously, these factors involve factual
matters which can be established only during a
hearing wherein the contending parties present
their respective evidence. In fact, to
underscore the intricate nature of determining
the valuation of the land, Section 58 of the
same law even authorizes the Special Agrarian
Courts to appoint commissioners for such
purpose.
Secondly, the RTC, in concluding that the
valuation of respondents' property is
P703,137.00, merely took judicial notice of the
average production figures in the Rodriguez
case pending before it and applied the same to
this case without conducting a hearing and
worse, without the knowledge or consent of
the parties, thus:
". . . In the case . . . of the coconut portion of
the land 5.4730 hectares, defendants
determined the average gross production per
year at 506.95 kilos only, but in the very
recent case of Luz Rodriguez vs. DAR, et al.,
filed and decided by this court in Civil Case No.
6679 also for just compensation for coconut
lands and Riceland situated at Basud,
Camarines Norte wherein also the lands in the
above-entitled case are situated, the value
fixed therein was 1,061.52 kilos per annum per
hectare for coconut land and the price per kilo
is P8.82, but in the instant case the price per
kilo is P9.70. In the present case, we consider
506.95 kilos average gross production per year
per hectare to be very low considering that
farm practice for coconut lands is harvest
every forty-five days. We cannot also
comprehended why in the Rodriguez case and
in this case there is a great variance in average
production per year when in the two cases the
lands are both coconut lands and in the same
place of Basud, Camarines Norte. We believe
that it is more fair to adapt the 1,061.52 kilos
per hectare per year as average gross
production. In the Rodriguez case, the
defendants fixed the average gross production
of palay at 3,000 kilos or 60 cavans per year.
The court is also constrained to apply this
yearly palay production in the Rodriguez case
to the case at bar.
xxx xxx xxx
"As shown in the Memorandum of Landbank in
this case, the area of the coconut land taken
under CARP is 5.4730 hectares. But as already
noted, the average gross production a year of
506.96 kilos per hectare fixed by Landbank is
too low as compared to the Rodriguez case
which was 1,061 kilos when the coconut land
in both cases are in the same town of Basud,
Camarines Norte, compelling this court then to
adapt 1,061 kilos as the average gross
production a year of the coconut land in this
case. We have to apply also the price of P9.70
per kilo as this is the value that Landbank fixed
for this case.
"The net income of the coconut land is equal to
70% of the gross income. So, the net income
of the coconut land is 1,061 x .70 x 9.70
equals P7,204.19 per hectare. Applying the
capitalization formula of R.A. 3844 to the net
income of P7,204.19 divided by 6%, the legal
rate of interest, equals P120,069.00 per
hectare. Therefore, the just compensation for
the 5.4730 hectares is P657,137.00.
"The Riceland taken under Presidential Decree
No. 27 as of October 21, 1972 has an area of
.7600 hectare. If in the Rodriguez case the
Landbank fixed the average gross production
of 3000 kilos or 60 cavans of palay per year,
then the .7600 hectare in this case would be
46 cavans. The value of the riceland therefore
in this case is 46 cavans x 2.5 x P400.00
equals P46,000.00. 22
"PARC Resolution 94-24-1 of 25 October 1994,
implemented by DAR AO 13, granted interest
on the compensation at 6% compounded
annually. The compounded interest on the 46
cavans for 26 years is 199.33 cavans. At
P400.00 per cavan, the value of the
compounded interest is P79,732.00." 23
(emphasis added)
Well-settled is the rule that courts are not
authorized to take judicial notice of the
contents of the records of other cases even
when said cases have been tried or are
pending in the same court or before the same
judge. 24 They may only do so "in the absence
of objection" and "with the knowledge of the
opposing party," 25 which are not obtaining
here.
Furthermore, as earlier stated, the Rules of
Court shall apply to all proceedings before the
Special Agrarian Courts. In this regard, Section
3, Rule 129 of the Revised Rules on Evidence is
explicit on the necessity of a hearing before a
court takes judicial notice of a certain matter,
thus:
"SEC. 3. Judicial notice, when hearing
necessary. During the trial, the court, on its
own initiative, or on request of a party, may
announce its intention to take judicial notice of
any matter and allow the parties to be heard
thereon.
"After the trial, and before judgment or on
appeal, the proper court, on its own initiative
or on request of a party, may take judicial
notice of any matter and allow the parties to
be heard thereon if such matter is decisive of a
material issue in the case." (emphasis added)
The RTC failed to observe the above
provisions.
Lastly, the RTC erred in applying the formula
prescribed under Executive Order (EO) No. 228
26 and R.A. No. 3844, 27 as amended, in
determining the valuation of the property; and
in granting compounded interest pursuant to
DAR Administrative Order No. 13, Series of
1994. 28 It must be stressed that EO No. 228
covers private agricultural lands primarily
devoted to rice and corn, while R.A. 3844
governs agricultural leasehold relation between
"the person who furnishes the landholding,
either as owner, civil law lessee, usufructuary,
or legal possessor, and the person who
personally cultivates the same." 29 Here, the
land is planted to coconut and rice and does
not involve agricultural leasehold relation.
What the trial court should have applied is the
formula in DAR Administrative Order No. 6, as
amended by DAR Administrative Order No. 11
discussed earlier.
As regards the award of compounded interest,
suffice it to state that DAR Administrative
Order No. 13, Series of 1994 does not apply to
the subject land but to those lands taken under
Presidential Decree No. 27 30 and Executive
Order No. 228 whose owners have not been
compensated. In this case, the property is
covered by R.A. 6657, as amended, and
respondents have been paid the provisional
compensation thereof, as stipulated during the
pre-trial.
While the determination of just compensation
involves the exercise of judicial discretion,
however, such discretion must be discharged
within the bounds of the law. Here, the RTC
wantonly disregarded R.A. 6657, as amended,
and its implementing rules and regulations.
(DAR Administrative Order No. 6, as amended
by DAR Administrative Order No. 11).
In sum, we find that the Court of Appeals and
the RTC erred in determining the valuation of
the subject land. Thus, we deem it proper to
remand this case to the RTC for trial on the
merits wherein the parties may present their
respective evidence. In determining the
valuation of the subject property, the trial
court shall consider the factors provided under
Section 17 of R.A. 6657, as amended,
mentioned earlier. The formula prescribed by
the DAR in Administrative Order No. 6, Series
of 1992, as amended by DAR Administrative
Order No. 11, Series of 1994, shall be used in
the valuation of the land. Furthermore, upon
its own initiative, or at the instance of any of
the parties, the trial court may appoint one or
more commissioners to examine, investigate
and ascertain facts relevant to the dispute.
WHEREFORE, the petition is GRANTED. The
assailed Decision of the Court of Appeals dated
March 20, 2000 in CA-G.R. SP No. 52163 is
REVERSED. Civil Case No. 6806 is REMANDED
to the RTC, Branch 40, Daet, Camarines Norte,
for trial on the merits with dispatch. The trial
judge is directed to observe strictly the
procedures specified above in determining the
proper valuation of the subject property.
SO ORDERED. TaDSHC
FIRST DIVISION
[G.R. No. 164876. January 23, 2006.]
LAND BANK OF THE PHILIPPINES, petitioner,
vs. LEONILA P. CELADA, respondent.
Picson Beramo & Associates for petitioner.
Pablito T. Geulen, Jr. for respondent.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE;
APPEALS; THE RULES MAY, IN APPROPRIATE
CASES, BE CONSTRUED LIBERALLY IN ORDER
TO MEET AND ADVANCE THE CAUSE OF
SUBSTANTIAL JUSTICE; PLEADINGS FILED
WITH THE COURT OF APPEALS REVEAL
SUBSTANTIAL COMPLIANCE WITH
PROCEDURAL REQUIREMENTS. The Court of
Appeals dismissed petitioner's appeal on three
technical grounds, namely: (a) lack of affidavit
of service; (b) failure of counsel to indicate his
Roll of Attorneys' number; and (c) failure to
attach material portions of the records.
However, the lack of affidavit of service is not
deemed fatal where the petition filed below is
accompanied by the original registry receipts
showing that the petition and its annexes were
served upon the parties. On the other hand,
the failure of counsel to indicate his Roll of
Attorneys' number would not affect
respondent's substantive rights, such that
petitioner's counsel could have been directed
to comply with the latter requirement rather
than dismiss the petition on purely technical
grounds. As for petitioner's failure to attach
material portions of the records, we held in
Donato v. Court of Appeals that: [T]he failure
of the petitioner to . . . append to his petition
copies of the pleadings and other material
portions of the records as would support the
petition, does not justify the outright dismissal
of the petition. It must be emphasized that the
RIRCA (Revised Internal Rules of the Court of
Appeals) gives the appellate court a certain
leeway to require parties to submit additional
documents as may be necessary in the interest
of substantial justice. Under Section 3,
paragraph d of Rule 3 of the RIRCA, the CA
may require the parties to complete the
annexes as the court deems necessary, and if
the petition is given due course, the CA may
require the elevation of a complete record of
the case as provided for under Section 3 (d)
(5) of Rule 6 of the RIRCA. . . . An examination
of the records and pleadings filed before the
Court of Appeals reveals that there was
substantial compliance with procedural
requirements. Moreover, we have held time
and again that cases should, as much as
possible, be determined on the merits after the
parties have been given full opportunity to
ventilate their causes and defenses, rather
than on technicality or some procedural
imperfection. After all, technical rules of
procedure are not ends in themselves but are
primarily devised to help in the proper and
expedient dispensation of justice. In
appropriate cases, therefore, the rules may be
construed liberally in order to meet and
advance the cause of substantial justice.
ESHAcI
2. LABOR AND SOCIAL LEGISLATION;
AGRARIAN REFORM; THE SPECIAL AGRARIAN
COURT (SAC) PROPERLY TOOK COGNIZANCE
OF RESPONDENT'S PETITION FOR
DETERMINATION OF JUST COMPENSATION.
We do not agree with petitioner's submission
that the SAC erred in assuming jurisdiction
over respondent's petition for determination of
just compensation despite the pendency of the
administrative proceedings before the DARAB.
In Land Bank of the Philippines v. Court of
Appeals, the landowner filed an action for
determination of just compensation without
waiting for the completion of the DARAB's re-
evaluation of the land. The Court nonetheless
held therein that the SAC acquired jurisdiction
over the action for the following reason: It is
clear from Sec. 57 that the RTC, sitting as a
Special Agrarian Court, has 'original and
exclusive jurisdiction over all petitions for the
determination of just compensation to
landowners.' This 'original and exclusive'
jurisdiction of the RTC would be undermined if
the DAR would vest in administrative officials
original jurisdiction in compensation cases and
make the RTC an appellate court for the review
of administrative decision. Thus, although the
new rules speak of directly appealing the
decision of adjudicators to the RTCs sitting as
Special Agrarian Courts, it is clear from Sec. 57
that the original and exclusive jurisdiction to
determine such cases is in the RTCs. Any effort
to transfer such jurisdiction to the adjudicators
and to convert the original jurisdiction of the
RTCs into appellate jurisdiction would be
contrary to Sec. 57 and therefore would be
void. Thus, direct resort to the SAC by private
respondent is valid. It would be well to
emphasize that the taking of property under
RA No. 6657 is an exercise of the power of
eminent domain by the State. The valuation of
property or determination of just compensation
in eminent domain proceedings is essentially a
judicial function which is vested with the courts
and not with administrative agencies.
Consequently, the SAC properly took
cognizance of respondent's petition for
determination of just compensation. SHaATC
3. ID.; ID.; ID.; DOCTRINE OF
EXHAUSTION OF ADMINISTRATIVE REMEDIES
IS INAPPLICABLE WHEN THE ISSUE IS
RENDERED MOOT AND ACADEMIC; CASE AT
BAR. In the same vein, there is no merit to
petitioner's contention that respondent failed
to exhaust administrative remedies when she
directly filed the petition for determination of
just compensation with the SAC even before
the DARAB case could be resolved. The issue is
now moot considering that the valuation made
by petitioner had long been affirmed by the
DARAB in its order dated April 12, 2000. As
held in Land Bank of the Philippines v. Wycoco,
the doctrine of exhaustion of administrative
remedies is inapplicable when the issue is
rendered moot and academic, as in the instant
case.
4. ID.; ID.; ID.; THE SPECIAL AGRARIAN
COURT ERRED IN SETTING ASIDE
PETITIONER'S VALUATION OF RESPONDENT'S
LAND ON THE SOLE BASIS OF THE HIGHER
VALUATION GIVEN FOR NEIGHBORING
PROPERTIES; THE SPECIAL AGRARIAN COURT
CANNOT DISREGARD THE FORMULA LAID
DOWN IN DAR AO NO. 5, S. 1998, THE
FORMULA WHICH WAS DEVISED TO
IMPLEMENT SECTION 17 OF RA NO. 6657.
While SAC is required to consider the
acquisition cost of the land, the current value
of like properties, its nature, actual use and
income, the sworn valuation by the owner, the
tax declaration and the assessments made by
the government assessors to determine just
compensation, it is equally true that these
factors have been translated into a basic
formula by the DAR pursuant to its rule-
making power under Section 49 of RA No.
6657. As the government agency principally
tasked to implement the agrarian reform
program, it is the DAR's duty to issue rules and
regulations to carry out the object of the law.
DAR AO No. 5, s. of 1998 precisely "filled in
the details" of Section 17, RA No. 6657 by
providing a basic formula by which the factors
mentioned therein may be taken into account.
The SAC was at no liberty to disregard the
formula which was devised to implement the
said provision. It is elementary that rules and
regulations issued by administrative bodies to
interpret the law which they are entrusted to
enforce, have the force of law, and are entitled
to great respect. Administrative issuances
partake of the nature of a statute and have in
their favor a presumption of legality. As such,
courts cannot ignore administrative issuances
especially when, as in this case, its validity was
not put in issue. Unless an administrative order
is declared invalid, courts have no option but
to apply the same.
5. ID.; ID.; ID.; NO BASIS FOR AWARD
OF 12% INTEREST PER ANNUM IN FAVOR OF
RESPONDENT LANDOWNER; NEITHER IS
THERE FACTUAL OR LEGAL JUSTIFICATION
FOR THE AWARD OF ATTORNEY'S FEES AND
COST OF LITIGATION. There is no basis for
the SAC's award of 12% interest per annum in
favor of respondent. Although in some
expropriation cases, the Court allowed the
imposition of said interest, the same was in the
nature of damages for delay in payment which
in effect makes the obligation on the part of
the government one of forbearance. In this
case, there is no delay that would justify the
payment of interest since the just
compensation due to respondent has been
promptly and validly deposited in her name in
cash and LBP bonds. Neither is there factual or
legal justification for the award of attorney's
fees and costs of litigation in favor of
respondent. ATcaHS
DECISION
YNARES-SANTIAGO, J p:
Respondent Leonila P. Celada owns 22.3167
hectares of agricultural land situated in
Calatrava, Carmen, Bohol registered under TCT
No. 16436, 1 of which 14.1939 hectares was
identified in 1998 by the Department of
Agrarian Reform (DAR) as suitable for
compulsory acquisition under the
Comprehensive Agrarian Reform Program
(CARP). The matter was then indorsed to
petitioner Land Bank of the Philippines (LBP)
for field investigation and land valuation.
aTcIAS
In due course, LBP valued respondent's land at
P2.1105517 per square meter for an aggregate
value of P299,569.61. 2 The DAR offered the
same amount to respondent as just
compensation, but it was rejected.
Nonetheless, on August 27, 1999, LBP
deposited the said sum in cash and bonds in
the name of respondent. 3
Pursuant to Section 16(d) of Republic Act (RA)
No. 6657 or the Comprehensive Agrarian
Reform Law of 1988, the matter was referred
to the DAR Adjudication Board (DARAB),
Region VII-Cebu City, for summary
administrative hearing on determination of just
compensation. The case was docketed as
DARAB Case No. VII-4767-B-990.
While the DARAB case was pending,
respondent filed, on February 10, 2000, a
petition 4 for judicial determination of just
compensation against LBP, the DAR and the
Municipal Agrarian Reform Officer (MARO) of
Carmen, Bohol, before the Regional Trial Court
of Tagbilaran City. The same was docketed as
Civil Case No. 6462 and raffled to Branch 3,
the designated Special Agrarian Court (SAC).
Respondent alleged that the current market
value of her land is at least P150,000.00 per
hectare based on the following factors:
14.1. The land in question has been mortgaged
to the defunct Rural Bank of San Miguel
(Bohol), Inc., for P1,220,000.00 on July 23,
1998 since it was appraised at P15.00 per
square meter;
14.2. Agricultural lands in said barangay are
priced ranging from P140,000.00 to
P150,000.00 per hectare and current land
transactions reveal said price range;
14.3. The land in question is titled or
registered property, cultivated and fully
developed with rice 5 and corn occupying the
greater portion thereof;
14.4. The topography of the land, its soil
condition, climate and productivity of
surrounding lots justify the just compensation
requested or asked for;
14.5. Even the class and base unit market
value for agricultural lands in Bohol is about
thirty (30) times higher than the price offered
per hectare by DAR/LBP. 6
On April 27, 2000, LBP filed its Answer 7
raising non-exhaustion of administrative
remedies as well as forum-shopping as
affirmative defense. According to petitioner,
respondent must first await the outcome of the
DARAB case before taking any judicial
recourse; that its valuation was arrived at by
applying the formula prescribed by law
whereas respondent's was based only on the
"current value of like properties".
The DAR and the MARO likewise filed an
Answer 8 averring that the determination of
just compensation rests exclusively with the
LBP. Thus, they are not liable to respondent
and are merely nominal parties in the case.
Meanwhile, the DARAB Provincial Adjudicator
(PARAD) issued an Order 9 dated April 12,
2000 affirming the valuation made by LBP.
Respondent failed to appear in the DARAB case
despite due notice.
On June 4, 2001, the SAC issued an order
resolving petitioner's affirmative defense in this
wise:
WHEREFORE, the Affirmative Defense of . . .
Land Bank is hereby denied. Besides, in the
mind of the court, the recourse to the DARAB
is . . . of no moment since it is only conciliatory
to the parties.
Upon agreement of the parties, the pre-trial is
reset to June 11, 2001 at 9:00 in the morning.
EHDCAI
SO ORDERED. 10
Thereafter, a pre-trial conference was
conducted 11 and trial on the merits ensued.
On March 1, 2003, the SAC rendered judgment
as follows:
WHEREFORE, in view of all the foregoing, the
Court hereby fixes the compensation of the
land of petitioner at P2.50 per square meter or
a total of P354,847.50 for the portion of
14.1939 hectares subject of compulsory
acquisition under the CARP which it believes
just, fair and equitable under the present
circumstances and which shall earn legal
interest of twelve percent (12%) per annum
from the time of its taking by the DAR.
Furthermore, respondent Land Bank is hereby
ordered to indemnify petitioner the amount of
P10,000.00 for attorney's fee and incidental
expenses of P5,000.00 and costs.
SO ORDERED. 12
LBP elevated the matter to the Court of
Appeals which, however, dismissed the appeal
outright on the following grounds:
1. The petition is not accompanied with
an affidavit of service, although there is an
explanation that respondent, respondent's
counsel and Judge Venancio J. Amila were
furnished with copies of the petition by
registered mail . . . .
2. Petitioner's counsel indicated his IBP
and PTR but not his Roll of Attorney's Number .
...
3. Copies of (a) PARAD Decision . . .
adverted to in the petition which fixed the land
valuation for just compensation at
P299,569.11 and (b) petitioner's Petition for
Judicial Determination of Just Compensation
filed with the Regional Trial Court of Tagbilaran
City, Branch 3, were not attached as annexes,
. . . . 13
Upon denial of its motion for reconsideration,
14 LBP filed the instant petition under Rule 45
of the Rules of Court, alleging that:
A
THE COURT OF APPEALS ERRED IN . . .
RIGIDLY OR STRICTLY APPLYING PROCEDURAL
LAW AT THE EXPENSE OF SUBSTANTIAL
JUSTICE AND THE RIGHT TO APPEAL.
B
THE SAC A QUO ERRED IN ASSUMING
JURISDICTION OVER THE PETITION FOR
DETERMINATION OF JUST COMPENSATION
WHILE ADMINISTRATIVE PROCEEDINGS IS
ON-GOING BEFORE THE DARAB, REGION VII,
CEBU CITY.
C of the RIRCA, the CA may require the parties
THE SAC A QUO ERRED IN FIXING THE JUST
COMPENSATION OF THE LAND BASED NOT ON
ITS ACTUAL LAND USE BUT ON THE
VALUATION OF NEIGHBORING LANDS.
D
THE SAC A QUO ERRED IN AWARDING
ATTORNEY'S FEES AND INCIDENTAL
EXPENSES . . . . 15
On the first assigned error, petitioner asserts
that the Court of Appeals should have liberally
construed the rules of procedure and not
dismissed its appeal on technical grounds.
CAIHTE
We agree with petitioner.
The Court of Appeals dismissed petitioner's
appeal on three technical grounds, namely: (a)
lack of affidavit of service; (b) failure of
counsel to indicate his Roll of Attorneys'
number; and (c) failure to attach material
portions of the records. However, the lack of
affidavit of service is not deemed fatal where
the petition filed below is accompanied by the
original registry receipts showing that the
petition and its annexes were served upon the
parties. 16 On the other hand, the failure of
counsel to indicate his Roll of Attorneys'
number would not affect respondent's
substantive rights, such that petitioner's
counsel could have been directed to comply
with the latter requirement rather than dismiss
the petition on purely technical grounds. As for
petitioner's failure to attach material portions
of the records, we held in Donato v. Court of
Appeals 17 that:
[T]he failure of the petitioner to . . . append to
his petition copies of the pleadings and other
material portions of the records as would
support the petition, does not justify the
outright dismissal of the petition. It must be
emphasized that the RIRCA (Revised Internal
Rules of the Court of Appeals) gives the
appellate court a certain leeway to require
parties to submit additional documents as may
be necessary in the interest of substantial
justice. Under Section 3, paragraph d of Rule 3
to complete the annexes as the court deems
necessary, and if the petition is given due
course, the CA may require the elevation of a
complete record of the case as provided for
under Section 3(d)(5) of Rule 6 of the RIRCA .
. . . 18
An examination of the records and pleadings
filed before the Court of Appeals reveals that
there was substantial compliance with
procedural requirements. Moreover, we have
held time and again that cases should, as
much as possible, be determined on the merits
after the parties have been given full
opportunity to ventilate their causes and
defenses, rather than on technicality or some
procedural imperfection. 19 After all, technical
rules of procedure are not ends in themselves
but are primarily devised to help in the proper
and expedient dispensation of justice. In
appropriate cases, therefore, the rules may be
construed liberally in order to meet and
advance the cause of substantial justice. 20
While a remand of the case to the appellate
court would seem to be in order, we deem it
proper to resolve the case on the merits if only
to write finis to the present controversy.
We do not agree with petitioner's submission
that the SAC erred in assuming jurisdiction
over respondents petition for determination of
just compensation despite the pendency of the
administrative proceedings before the DARAB.
In Land Bank of the Philippines v. Court of
Appeals, 21 the landowner filed an action for
determination of just compensation without
waiting for the completion of the DARAB's re-
evaluation of the land. The Court nonetheless
held therein that the SAC acquired jurisdiction
over the action for the following reason:
It is clear from Sec. 57 that the RTC, sitting as
a Special Agrarian Court, has 'original and
exclusive jurisdiction over all petitions for the
determination of just compensation to
landowners.' This 'original and exclusive'
jurisdiction of the RTC would be undermined if
the DAR would vest in administrative officials
original jurisdiction in compensation cases and
make the RTC an appellate court for the review
of administrative decision. Thus, although the
new rules speak of directly appealing the
decision of adjudicators to the RTCs sitting as
Special Agrarian Courts, it is clear from Sec. 57
that the original and exclusive jurisdiction to
determine such cases is in the RTCs. Any effort
to transfer such jurisdiction to the adjudicators
and to convert the original jurisdiction of the
RTCs into appellate jurisdiction would be
contrary to Sec. 57 and therefore would be
void. Thus, direct resort to the SAC by private
respondent is valid. 22
It would be well to emphasize that the taking
of property under R.A. No. 6657 is an exercise
of the power of eminent domain by the State.
23 The valuation of property or determination
of just compensation in eminent domain
proceedings is essentially a judicial function
which is vested with the courts and not with
administrative agencies. 24 Consequently, the
SAC properly took cognizance of respondent's
petition for determination of just
compensation.
In the same vein, there is no merit to
petitioner's contention that respondent failed
to exhaust administrative remedies when she
directly filed the petition for determination of
just compensation with the SAC even before
the DARAB case could be resolved. The issue is
now moot considering that the valuation made
by petitioner had long been affirmed by the
DARAB in its order dated April 12, 2000. As
held in Land Bank of the Philippines v. Wycoco,
25 the doctrine of exhaustion of administrative
remedies is inapplicable when the issue is
rendered moot and academic, as in the instant
case. HEcTAI
With regard to the third assigned error,
however, we agree with petitioner that the SAC
erred in setting aside petitioner's valuation of
respondent's land on the sole basis of the
higher valuation given for neighboring
properties. In this regard, the SAC held:
It appears from the evidence of petitioner that
the neighboring lands of similar classification
were paid higher than what was quoted to her
land by respondent Land Bank as the value per
square meter to her land was only quoted at
P2.1105517 while the others which were of the
same classification were paid by respondent
Bank at P2.42 more or less, per square meter
referring to the land of Consuelito Borja (Exh.
D) and Cesar Borja (Exh. F). Furthermore, the
land of petitioner was allegedly mortgaged for
a loan of P1,200,000.00 before the Rural Bank
of San Miguel, Bohol and that it was purchased
by her from a certain Felipe Dungog for
P450,000.00 although no documents therefor
were shown to support her claim.
Nevertheless, the Court finds a patent disparity
in the price quotations by respondent Land
Bank for the land of petitioner and that of the
other landowners brought under CARP which
could be caused by deficient or erroneous
references due to the petitioner's indifference
and stubborn attitude in not cooperating with
respondent bank in submitting the data needed
for the evaluation of the property. . . . At any
rate, the price quotation by respondent Land
Bank on the land of the petitioner is low more
so that it was done some four years ago,
particularly, on June 22, 1998 (Exh. 1) and the
same has become irrelevant in the course of
time due to the devaluation of the peso
brought about by our staggering economy. 26
As can be gleaned from above ruling, the SAC
based its valuation solely on the observation
that there was a "patent disparity" between
the price given to respondent and the other
landowners. We note that it did not apply the
DAR valuation formula since according to the
SAC, it is Section 17 of R.A. No. 6657 that
"should be the principal basis of computation
as it is the law governing the matter". 27 The
SAC further held that said Section 17 "cannot
be superseded by any administrative order of a
government agency", 28 thereby implying that
the valuation formula under DAR
Administrative Order No. 5, Series of 1998
(DAR A.O. No. 5, s. of 1998), 29 is invalid and
of no effect.
While SAC is required to consider the As stated earlier, the above provision is
acquisition cost of the land, the current value implemented through DAR A.O. No. 5, s. of
of like properties, its nature, actual use and 1998, which provides that:
income, the sworn valuation by the owner, the
tax declaration and the assessments made by A. There shall be one basic formula for
the government assessors 30 to determine just the valuation of lands covered by VOS or CA:
compensation, it is equally true that these
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
factors have been translated into a basic
formula by the DAR pursuant to its rule-
Where: LV = Land Value
making power under Section 49 of R.A. No.
6657. 31 As the government agency principally CNI = Capitalized Net Income
tasked to implement the agrarian reform
program, it is the DAR's duty to issue rules and CS = Comparable Sales
regulations to carry out the object of the law.
DAR A.O. No. 5, s. of 1998 precisely "filled in MV = Market Value per Tax Declaration
the details" of Section 17, R.A. No. 6657 by
The above formula shall be used if all three
providing a basic formula by which the factors
factors are present, relevant, and applicable.
mentioned therein may be taken into account.
The SAC was at no liberty to disregard the
A1. When the CS factor is not present and
formula which was devised to implement the CNI and MV are applicable, the formula shall
said provision.
be:

It is elementary that rules and regulations

issued by administrative bodies to interpret the
law which they are entrusted to enforce, have
the force of law, and are entitled to great
respect. 32 Administrative issuances partake of
the nature of a statute 33 and have in their
favor a presumption of legality. 34 As such,
courts cannot ignore administrative issuances
especially when, as in this case, its validity was
not put in issue. Unless an administrative order
is declared invalid, courts have no option but
to apply the same.
Thus, Section 17 of R.A. No. 6657 states:
SEC. 17. Determination of Just
Compensation. In determining just
compensation, the cost of acquisition of the
land, the current value of like properties, its
nature, actual use and income, the sworn
valuation by the owner, the tax declarations,
and the assessment made by government
assessors, shall be considered. The social and
economic benefits contributed by the farmers
and the farmworkers and by the Government
to the property as well as the nonpayment of
taxes or loans secured from any government
financing institution on the said land shall be
considered as additional factors to determine
its valuation. TcSCEa
LV = (CNI x 0.9) + (MV x 0.1)
A2. When the CNI factor is not present,
and CS and MV are applicable, the formula
shall be:
LV = (CS x 0.9) + (MV x 0.1)
A3. When both the CS and CNI are not
present and only MV is applicable, the formula
shall be:
LV = MV x 2
In no case shall the value of idle land using the
formula MV x 2 exceed the lowest value of land
within the same estate under consideration or
within the same barangay or municipality (in
that order) approved by LBP within one (1)
year from receipt of claimfolder.
Accordingly, petitioner applied the formula
under A1 above since the comparable sales
factor ("CS factor") was not present. As
observed by the SAC itself, respondent refused
to cooperate with the local valuation office of
petitioner and did not provide the necessary
data to arrive at a proper "CS factor". DAR
A.O. No. 5, s. of 1998 defines "CS factor" as
follows:
C. CS shall refer to any one or the
average of all the applicable sub-factors,
namely ST, AC and MVM:
Where: ST = Peso Value of Sales Transactions
as defined under Item C.2
AC = Acquisition Cost as defined under
Item C.3
MVM = Market Value Based on
Mortgage as defined under Item C.4
xxx xxx xxx
C.2. The criteria in the selection of the
comparable sales transaction (ST) shall be as
follows:
a. When the required number of STs is
not available at the barangay level, additional
STs may be secured from the municipality
where the land being offered/covered is
situated to complete the required three
comparable STs. In case there are more STs
available than what is required at the
municipal level, the most recent transactions
shall be considered. The same rule shall apply
at the provincial level when no STs are
available at the municipal level. In all cases,
the combination of STs sourced from the
barangay, municipality and province shall not
exceed three transactions. cASIED
b. The land subject of acquisition as well
as those subject of comparable sales
transactions should be similar in topography,
land use, i.e., planted to the same crop.
Furthermore, in case of permanent crops, the
subject properties should be more or less
comparable in terms of their stages of
productivity and plant density.
c. The comparable sales transactions
should have been executed within the period
January 1, 1985 to June 15, 1988, and
registered within the period January 1, 1985,
to September 13, 1988.
xxx xxx xxx
C.3. Acquisition Cost (AC) AC shall be
deemed relevant when the property subject of
acquisition was acquired through purchase or
exchange with another property within the
period January 1, 1985 to June 15, 1988 and
registered within the period January 1, 1985 to
September 13, 1988, and the condition of said
property is still substantially similar from the
date of purchase or exchange to the date of FI.
xxx xxx xxx
C.4. Market Value Based on Mortgage
(MVM) For MVM to be relevant or applicable,
the property subject of acquisition should have
been mortgaged as of June 15, 1988 and the
condition of the property is still substantially
similar up to the date of FI. MVM shall refer to
the latest available appraised value of the
property.
In the case at bar, while respondent attempted
to prove during the hearings before the SAC,
comparable sales transactions, the acquisition
cost of the property as well as its mortgage
value, she failed to submit adequate
documentary evidence to support the same.
Consequently, there was nothing from which
the "CS factor" could be determined.
In contrast, petitioner arrived at its valuation
by using available factors culled from the
Department of Agriculture and Philippine
Coconut Authority, 35 and by computing the
same in accordance with the formula provided,
thus
COMPUTATION (Applicable Formula) : LV =
0.90 CNI + 0.10 MV
Comparable Land Transactions (P x x x x ____
) = P x-x-x
Capitalized Net Income: Cassava
16,666.67 x 0.90 = 15,000.00
Corn/Coco 26,571.70 =
23,914.53
Market Value Cassava 8,963.78 x
0.10 = 896.38
per Tax Declaration: Corn/Coco
10,053.93 = 1,005.39
Computed Value per Hectare: Cassava only 10,000 kilos per hectare; corn, 2,000
15,896.38; Corn/Coco 24,919.92 kilos; and coconuts, 15.38 kilos per hectare.
The data stated that in the first cropping of
xxx xxx xxx 1986, the price of cassava was P1.00 per kilo;
corn was sold at P7.75 per kilo; and the
Value per hectare used: Cassava
Philippine Coconut Authority stated that during
15,896.38 x 6.0000 has. =
that time, the selling price of coconuts was
95,378.28
P8.23 per kilo. HAICTD
Corn/Coco 24,919.92 x
q. After these Production data and selling
8.1939 has. = 204,191.33
price, there is here a "cost of operation", what
is this?
Payment due to LO : P299,569.61
a. It is the expenses of the land owner or
The above computation was explained by
farmer. From day one of the cultivation until
Antero M. Gablines, Chief of the Claims,
production. Without the land owner's
Processing, Valuation and Payment Division of
submission of the sworn statement of the
the Agrarian Operations Center of the Land
income, production and the cost, . . .
Bank, to wit:
Administrative Order No. 5 states that . . . we
ATTY. CABANGBANG: (On direct): will use 20% as the net income, meaning 80%
of the production in peso. This is the cost of
xxx xxx xxx valuation.

q. What are the items needed for the q. 80% for what crops?
Land Bank to compute?
a. All crops except for coconuts where the
a. In accordance with Administrative cost of expenses is only 20%.
Order No. 5, series of 1998, the value of the
land should be computed using the capitalized q. Summing all these data, what is the
net income plus the market value. We need value per hectare of the cassava?
the gross production of the land and its output
a. The cassava is P15,896.38.
and the net income of the property.
q. How about the corn . . . intercropped
q. You said "gross production". How
with coconuts?
would you fix the gross production of the
property?
a. P24,919.92. 36
a. In that Administrative Order No. 5, if
Under the circumstances, we find the
the owner of the land is cooperative, he is
explanation and computation of petitioner to
required to submit the net income. Without
be sufficient and in accordance with applicable
submitting all his sworn statements, we will
laws. Petitioner's valuation must thus be
get the data from the DA (Agriculture) or from
upheld.
the coconut authorities.
Finally, there is no basis for the SAC's award of
xxx xxx xxx
12% interest per annum in favor of
respondent. Although in some expropriation
q. In this recommended amount which
cases, the Court allowed the imposition of said
you approved, how did you arrive at this
interest, the same was in the nature of
figure?
damages for delay in payment which in effect
a. We used the data from the Philippine makes the obligation on the part of the
(Coconut) Authority and the Agriculture and government one of forbearance. 37 In this
the data stated that Cassava production was case, there is no delay that would justify the
payment of interest since the just
compensation due to respondent has been
promptly and validly deposited in her name in
cash and LBP bonds. Neither is there factual or
legal justification for the award of attorney's
fees and costs of litigation in favor of
respondent.
WHEREFORE, the instant petition is GRANTED.
The Decision of the Regional Trial Court,
Tagbilaran City, Branch 3 in Civil Case No.
6462 dated March 1, 2003 is REVERSED and
SET ASIDE. A new judgment is entered fixing
the just compensation for respondent's land at
P2.1105517 per square meter or a total of
P299,569.61.
SO ORDERED.
SECOND DIVISION
[G.R. Nos. 180772 and 180776. May 6, 2010.]
LAND BANK OF THE PHILIPPINES [LBP],
petitioner, vs. DOMINGO AND MAMERTO
SORIANO, respondents.
DECISION
PEREZ, J p:
For consideration is a Petition for Review on
Certiorari under Rule 45 of the Rules of Court
filed by the Land Bank of the Philippines (LBP)
seeking the annulment of the Decision 1 dated
9 October 2007 and the Resolution 2 dated 12
December 2007 issued by the Court of Appeals
in CA-G.R. SP Nos. 89005 and 89288.
cTECHI
The controversy is hinged on the determination
of just compensation for land covered by the
Comprehensive Agrarian Reform Program
(CARP).
First, the antecedents.
Domingo and Mamerto Soriano (respondents)
are the registered owners of several parcels of
rice land situated in Oas, Albay. Out of the
18.9163 hectares of land 3 owned by the
respondents, 18.2820 hectares were placed
under the Operations Land Transfer and the
CARP pursuant to Presidential Decree No. 27 4
and Republic Act No. 6657, otherwise known
as the Comprehensive Agrarian Reform Law. 5
The LBP 6 pegged the value of 18.0491
hectares of land at P482,363.95 7
(P133,751.65 as land value plus P348,612.30
incremental interest), while the remaining
0.2329 hectare was computed at P8,238.94. 8
Not satisfied with the valuation, respondents,
on 23 November 2000, instituted a Complaint
9 for judicial determination of just
compensation with the Regional Trial Court of
Legazpi City, 10 sitting as a Special Agrarian
Court (SAC). Respondents alleged that they
are entitled to an amount of not less than
P4,500,000.00 as just compensation. 11
EHScCA
On 21 February 2005, the SAC rendered a
judgment, ordering LBP to pay the respondents
P894,584.94. The dispositive portion reads:
ACCORDINGLY, the just compensation of the
18.0491 hectares of irrigated riceland is
P133,751.79, plus increment of 6% per annum
computed annually beginning October 21,
1972, until the value is fully paid, and of the
0.2329 hectare of rain fed riceland is
P8,238.94 plus 12% interest per annum,
beginning August 17, 1998, until the value is
fully paid or a total of P894,584.94 as of this
date. Land Bank is ordered to pay the
landowners Domingo Soriano and Mamerto
Soriano said amount/land value in accordance
with law. 12
The SAC applied the formula prescribed under
Executive Order No. 228 in determining the
valuation of the property, i.e., Land value =
Average Gross Production x 2.5 x Government
Support Price. It likewise granted compounded
interest pursuant to Department of Agrarian
Reform (DAR) Administrative Order No. 13,
series of 1994, as amended by DAR
Administrative Order No. 2, series of 2004.
Both parties disagreed with the trial court's
valuation, prompting them to file their
respective appeals with the Court of Appeals.
The appellate court, however, affirmed the
judgment of the trial court. It also upheld the
award of compounded interest, thus: DaTICE
In the case at bar, the subject lands were
taken under PD 27 and were covered by
Operation Land Transfer, making the aforecited
Administrative Order applicable. Hence, the
Petitioners SORIANOs are entitled to the 6%
compounded interest per annum from the date
of taking on 21 October 1972 until full
payment of the just compensation. 13
LBP moved for reconsideration but it was
denied by the Court of Appeals on 12
December 2007.
LBP filed the instant petition seeking to nullify
the appellate court's decision and resolution,
particularly the amount awarded to
respondents as just compensation.
Basic is the tenet that since respondents were
deprived of their land, they are entitled to just
compensation. Under Executive Order No. 228,
the formula used to compute the land value is:
Land value = Average Gross
Production (AGP) x 2.5
x Government Support Price
(GSP)
With the passage of Republic Act (R.A.) No.
6657 or the CARL in 1988, new guidelines were
set for the determination of just compensation.
In particular, Section 17 provides, thus:
SEHTIc
Determination of Just Compensation. In
determining just compensation, the cost of
acquisition of the land, the current value of like
properties, its nature, actual use and income,
the sworn valuation by the owner, the tax
declarations, and the assessment made by
government assessors shall be considered. The
social and economic benefits contributed by
the farmers and the farmworkers and by the
Government to the property as well as the
non-payment of taxes or loans secured from
any government financing institution on the
said land shall be considered as additional
factors to determine its valuation.
Consequently, two divergent formulae arose
which prompted the Court to come up with a
categorical pronouncement that, if just
compensation is not settled prior to the
passage of Republic Act No. 6657, it should be
computed in accordance with the said law,
although the property was acquired under
Presidential Decree No. 27. The fixing of just
compensation should therefore be based on
the parameters set out in Republic Act No.
6657, with Presidential Decree No. 27 and
Executive Order No. 228 having only
suppletory effect. 14
In the instant case, while the subject lands
were acquired under Presidential Decree No.
27, the complaint for just compensation was
only lodged before the court on 23 November
2000 or long after the passage of Republic Act
No. 6657 in 1988. Therefore, Section 17 of
Republic Act No. 6657 should be the principal
basis of the computation for just
compensation. As a matter of fact, the factors
enumerated therein had already been
translated into a basic formula by the DAR
pursuant to its rule-making power under
Section 49 of Republic Act No. 6657. The
formula outlined in DAR Administrative Order
No. 5, series of 1998 should be applied in
computing just compensation, thus: aDHScI
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
15
As much as this Court would like to determine
the proper valuation based on the formula
cited above, the records of this case are bereft
of adequate data. To write finis to this case, we
uphold the amount derived from the old
formula. However, since the application of the
new formula is a matter of law and thus,
should be made applicable, the parties are not
precluded from asking for any additional
amount as may be warranted by the new
formula.
On to the more pertinent issue. LBP assails the
imposition of 6% interest rate on the 18.0491
hectares of lot valued at P133,751.65. It avers
that the incremental interest due to the
respondents should be computed from the date
of taking on 21 October 1972, not up to full
payment of just compensation but up to the
time LBP approved the payment of their just
compensation claim and a corresponding
deposit of the compensation proceeds was
made by the bank. LBP relies on the provisions
of DAR Administrative Order No. 13, series of
1994, as amended, which substantially
provides that "the grant of 6% yearly interest
compounded annually shall be reckoned from
21 October 1972 up to the time of actual
payment but not later than December 2006."
LBP stresses that under said Administrative
Order, time of actual payment is defined as the
date when LBP approves the payment of the
land transfer claim and deposits the
compensation proceeds in the name of the
landowner in cash and in bonds. In sum, LBP
posits that the appellate court departed from
the express provision of DAR Administrative
Order No. 13, as amended, by imposing an
interest to be reckoned from the time of taking
up to the actual payment of just compensation.
16 TaCSAD
Respondents counter that the award of interest
until full payment of just compensation was
correctly adhered to by the lower courts in line
with the Court's ruling in Land Bank of the
Philippines v. Imperial, 17 which found it
inequitable to determine just compensation
based solely on the formula provided by DAR
Administrative Order No. 13, as amended.
According to respondents, the award of
interest until full payment of just compensation
is to ensure prompt payment. Moreover,
respondents claim that the date LBP approves
the payment of the land transfer claim and
deposits the proceeds in the name of the
landowner is not tantamount to actual
payment because on said date, the release of
the amount is conditioned on certain
requirements. 18
This issue has already been raised before the
Court of Appeals by LBP, first, in its petition for
review and, second, in its motion for
reconsideration. The Court of Appeals,
however, neglected to give a definitive ruling
on the issue of computation of interest and
merely echoed the trial court's ruling that
respondents are entitled to the 6%
compounded interest per annum from the date
of taking on 21 October 1972 until full
payment of just compensation. AaIDCS
At any rate, we cannot subscribe to the
arguments of LBP.
Section 4, Article XIII of the 1987 Constitution,
mandates that the redistribution of agricultural
lands shall be subject to the payment of just
compensation. The deliberations of the 1986
Constitutional Commission on this subject
reveal that just compensation should not do
violence to the Bill of Rights, but should also
not make an insurmountable obstacle to a
successful agrarian reform program. Hence,
the landowner's right to just compensation
should be balanced with agrarian reform. 19
Administrative Order No. 13, as amended, was
issued to compensate those who were
effectively deprived of their lands by
expropriation. LBP relies on said Administrative
Order to justify its own computation of
interest. A literal reading of this Administrative
Order seems to favor LBP's interpretation with
respect to the period covered by the interest
rate. We quote the relevant portion of the
Administrative Order:
The grant of six percent (6%) yearly interest
compounded annually shall be reckoned as
follows: ADcSHC
3.1 Tenanted as of 21 October 1972 and
covered under OLT From 21 October 1972
up to the time of actual payment but not later
than December 2006
3.2 Tenanted after 21 October 1972 and
covered under OLT From the date when the
land was actually tenanted (by virtue of
Regional Order of Placement issued prior to
August 18, 1987) up to the time of actual
payment but not later than December 2006
Time of actual payment is the date when the
Land Bank of the Philippines (LBP) approves
payment of the land transfer claim and
deposits the compensation proceeds in the
name of the landowner (LO) in cash and in
bonds. The release of payment can be claimed
by the landowner upon compliance with the
documentary requirements for release of
payment. 20
However, as embodied in its Prefatory
Statement, the intent of the Administrative
Order was precisely to address a situation
"where a number of landholdings remain
unpaid in view of the non-acceptance by the
landowners of the compensation due to low
valuation. Had the landowner been paid from
the time of taking his land and the money
deposited in a bank, the money would have
earned the same interest rate compounded
annually as authorized under banking laws,
rules and regulations." 21 The concept of just
compensation embraces not only the correct
determination of the amount to be paid to the
owners of the land, but also payment within a
reasonable time from its taking. Without
prompt payment, compensation cannot be
considered "just" inasmuch as the property
owner is made to suffer the consequences of
being immediately deprived of his land while
being made to wait for a decade or more
before actually receiving the amount necessary
to cope with his loss. 22 To condition the
payment upon LBP's approval and its release
upon compliance with some documentary
requirements would render nugatory the very
essence of "prompt payment." Therefore, to
expedite the payment of just compensation, it
is logical to conclude that the 6% interest rate
be imposed from the time of taking up to the
time of full payment of just compensation.
EIaDHS
Certainly, the trend of recent rulings bolsters
this interpretation. In Forform Development
Corporation v. Philippine National Railways, 23
the Philippine National Railways was directed
to file the appropriate expropriation action over
the land in question, so that just compensation
due to its owner may be determined in
accordance with the Rules of Court, with
interest at the legal rate of 6% per annum
from the time of taking until full payment is
made. The Court in Manila International Airport
Authority v. Rodriguez 24 ordered just
compensation for the portion of respondent's
lot actually occupied by the runway, with
interest thereon at the legal rate of 6% per
annum from the time of taking until full
payment is made.
LBP also proffers that just compensation
pertaining to the 0.2329 hectare valued at
P8,238.94 with no pronouncement as to
interest per the Department of Agrarian
Reform Adjudication Board (DARAB) decision
has already attained finality, hence, it cannot
be modified. 25
Anent the DARAB decision relating to the
0.2329 hectare, suffice it to say that the
determination of just compensation is a judicial
function. 26 The DAR's land valuation is only
preliminary and is not, by any means, final and
conclusive upon the landowner or any other
interested party. In the exercise of their
functions, the courts still have the final say on
what the amount of just compensation will be.
27 Hence, we sustain the computation reached
by the trial court. cHECAS
WHEREFORE, the petition is DENIED. The
Decision dated 9 October 2007 and the
Resolution dated 12 December 2007 of the
Court of Appeals in CA-G.R. SP Nos. 89005 and
89288 are hereby AFFIRMED without prejudice
to the right of the parties for additional claims
that may arise in the application of DAR
Administrative Order No. 5, series of 1998 in
relation to R.A. No. 6657.
SO ORDERED.
FIRST DIVISION
[G.R. No. 140160. January 13, 2004.]
LAND BANK OF THE PHILIPPINES, petitioner,
vs. FELICIANO F. WYCOCO, respondent.
[G.R. No. 146733. January 13, 2004.]
FELICIANO F. WYCOCO, petitioner, vs. THE
HONORABLE RODRIGO S. CASPILLO, Pairing
Judge of the Regional Trial Court, Third Judicial
Region, Branch 23, Cabanatuan City and the
DEPARTMENT OF AGRARIAN REFORM,
respondents.
Gonzales Maranion and Associates for LBP.
Feliciano F. Wycoco and Ongsiako Dolendo and
Dela Cruz for F. Wycoco.
Delfin B. Samson for DAR Litigation, LAO, and
Bala.
SYNOPSIS
Feliciano Wycoco offered to sell his land to the
Department of Agrarian Reform (DAR) in line
with the Comprehensive Agrarian Reform
Program (CARP) of the government. His offer
was for P14.9 million but the DAR's
counteroffer was only for the amount of
P2,280,159.82. Wycoco rejected the offer,
prompting the DAR to indorse the case to the
Department of Agrarian Reform Adjudication
Board (DARAB) for the purpose of fixing the
just compensation in a summary
administrative proceeding. Thereafter, the
DARAB requested Land Bank of the Philippines
(LBP) to open a trust account in the name of
Wycoco and deposited the compensation
offered by DAR. Instead of filing the required
pleadings with the DARAB, Wycoco decided to
file a case for the determination of just
compensation with the Regional Trial Court.
DARAB then issued an order dismissing the
case before it to give way to the determination
of just compensation by the Special Agrarian
Court. The trial court rendered a decision in
favor of Wycoco. It took judicial notice of the
prevailing market value of the agricultural land
sold in the area and fixed the just
compensation at P13,428,982.00 and awarded
actual damages for unrealized profits plus
damages. The Court of Appeals dismissed the
several appeals brought to it by the parties,
thus, the case reached the Supreme Court to
resolve the following issues; (1) whether the
special agrarian court validly acquired
jurisdiction over the case, (2) whether the
compensation was supported by evidence, (3)
whether Wycoco could compel DAR to purchase
the entire land, and (4) whether the awards of
interest and damages for unrealized profits
were valid. DAaEIc
The Supreme Court partially granted the
petition for review and remanded the agrarian
case to the Special Agrarian Court. The
Supreme Court ruled that the trial court
properly acquired jurisdiction over the Wycoco
case as it had previously ruled in another case
that direct resort to the Special Agrarian Court
by private respondent is valid. However, the
Court did not agree with the trial court taking
judicial notice of the alleged prevailing market
value of the agricultural lands in the area. The
trial court should have allowed the parties to
present evidence thereon. The market value
may be one of the bases of determining just
compensation; the same cannot be arbitrarily
arrived at without considering the factors to be
appreciated in arriving at the fair market value
of the property. The Court also ruled that DAR
cannot be compelled to purchase the entire
property voluntarily offered by Wycoco as the
power to determine whether a parcel of land
may come within the coverage of the CARP is
essentially lodged with the DAR. The Court
further ruled that the just compensation due
Wycoco should bear 12% interest per annum
from the time LBP opened a trust account in
his name up to the time said account was
actually converted into cash and LBP bonds
deposit accounts. The award of actual damages
for unrealized profits was deleted by the Court,
since, the amount of loss must not only be
capable of proof, but must be proven with a
reasonable degree of certainty, and none was
presented in this case. aCATSI
SYLLABUS
1. REMEDIAL LAW; SPECIAL AGRARIAN
COURTS; JURISDICTION; PROCEDURE FOR
THE DETERMINATION OF JUST
COMPENSATION, EXPLAINED. In Republic v.
Court of Appeals, it was held that Special
Agrarian Courts are given original and
exclusive jurisdiction over two categories of
cases, to wit: (1) all petitioners for the
determination of just compensation; and (2)
the prosecution of all criminal offenses under
R.A. No. 6657. Section 50 must be construed
in harmony with Section 57 by considering
cases involving the determination of just
compensation and criminal cases for violations
of R.A. No. 6657 as excepted from the
plenitude of power conferred to the DAR.
Indeed, there is a reason for this distinction.
The DAR, as an administrative agency, cannot
be granted jurisdiction over cases of eminent
domain and over criminal cases. The valuation
of property in eminent domain is essentially a
judicial function which is vested with the
Special Agrarian Courts and cannot be lodged
with administrative agencies. In fact, Rule XIII,
Section 11 of the New Rules of Procedure of
the DARAB acknowledges this power of the
court, thus Section 11. Land Valuation and
Preliminary Determination and Payment of Just
Compensation. The decision of the Adjudicator
on land valuation and preliminary
determination and payment of just
compensation shall not be appealable to the
Board but shall be brought directly to the
Regional Trial Courts designated as Special
Agrarian Courts within fifteen (15) days from
receipt of the notice thereof. Any party shall be
entitled to only one motion for reconsideration.
(Emphasis supplied) Under Section 1 of
Executive Order No. 405, Series of 1990, the
Land Bank of the Philippines is charged with
the initial responsibility of determining the
value of lands placed under land reform and
the just compensation to be paid for their
taking. Through a notice of voluntary offer to
sell (VOS) submitted by the landowner,
accompanied by the required documents, the
DAR evaluates the application and determines
the land's suitability for agriculture. The LBP
likewise reviews the application and the
supporting documents and determines the
valuation of the land. Thereafter, the DAR
issues the Notice of Land Valuation to the
landowner. In both voluntary and compulsory
acquisition, where the landowner rejects the
offer, the DAR opens an account in the name
of the landowner and conducts a summary
administrative proceedings. If the landowner
disagrees with the valuation, the matter may
be brought to the Regional Trial Court acting
as a special agrarian court. aHTEIA
2. ID.; ID.; EXCLUSIVE AND ORIGINAL
JURISDICTION THEREOF OVER
DETERMINATION OF JUST COMPENSATION,
SUSTAINED; APPLICATION IN CASE AT BAR.
In Land Bank of the Philippines v. Court of
Appeals, the landowner filed an action for
determination of just compensation without
waiting for the completion of DARAB's re-
evaluation of the land. This, notwithstanding,
the Court held that the trial court properly
acquired jurisdiction because of its exclusive
and original jurisdiction over determination of
just compensation, thus . . . It is clear from
Sec. 57 that the RTC, sitting as a Special
Agrarian Court, has "original and exclusive
jurisdiction over all petitions for the
determination of just compensation to
landowners." This "original and exclusive"
jurisdiction of the RTC would be undermined if
the DAR would vest in administrative officials
original jurisdiction in compensation cases and
make the RTC an appellate court for the review
of administrative decisions. Thus, although the
new rules speak of directly appealing the
decision of adjudicators to the RTCs sitting as
Special Agrarian Courts, it is clear from Sec. 57
that the original and exclusive jurisdiction to
determine such cases is in the RTCs. Any effort
to transfer such jurisdiction to the adjudicators
and to convert the original jurisdiction of the
RTCs into an appellate jurisdiction would be
contrary to Sec. 57 and therefore, would be
void. Thus, direct resort to the SAC [Special
Agrarian Court] by private respondent is void.
In the case at bar, therefore the trial court
properly acquired jurisdiction over Wycoco's
complaint for determination of just
compensation. It must be stressed that
although no summary administrative
proceeding was held before the DARAB, LBP
was able to perform its legal mandate of
initially determining the value of Wycoco's land
pursuant to Executive Order No. 405, Series of
1990. What is more, DAR and LBP's conformity
to the pre-trial order which limited the issue
only to the determination of just compensation
estopped them from questioning the
jurisdiction of the special agrarian court. The
pre-trial order limited the issues to those not
disposed of by admission or agreements; and
the entry thereof controlled the subsequent
course of action. SDHTEC
3. ID.; EVIDENCE; JUDICIAL NOTICE;
POWER OF THE COURT WHICH SHOULD BE
EXERCISED WITH CAUTION; RATIONALE.
The power to take judicial notice is to be
exercised by courts with caution especially
where the case involves a vast tract of land.
Care must be taken that the requisite notoriety
exists; and every reasonable doubt on the
subject should be promptly resolved in the
negative. To say that a court will take judicial
notice of a fact is merely another way of saying
that the usual form of evidence will be
dispensed with if knowledge of the fact can be
otherwise acquired. This is because the court
assumes that the matter is so notorious that it
will not be disputed. But judicial notice is not
judicial knowledge. The mere personal
knowledge of the judge is not judicial
knowledge of the court, and he is not
authorized to make his individual knowledge of
a fact, not generally or professionally known,
the basis of his action. CTIDcA
DECISION
YNARES-SANTIAGO, J p:
Before the Court are consolidated petitions, the
first seeking the review of the February 9,
1999 Decision 1 and the September 22, 1999
Resolution 2 of the Court of Appeals in CA-G.R.
No. SP No. 39913, which modified the Decision
3 of Regional Trial Court of Cabanatuan City,
Branch 23, acting as a Special Agrarian Court
in Agrarian Case No. 91 (AF); and the second
for mandamus to compel the said trial court to
issue a writ of execution and to direct Judge
Rodrigo S. Caspillo to inhibit himself from
Agrarian Case No. 91 (AF). cdtai
The undisputed antecedents show that
Feliciano F. Wycoco is the registered owner of
a 94.1690 hectare unirrigated and untenanted
rice land, covered by Transfer Certificate of
Title No. NT-206422 and situated in the Sitios
of Ablang, Saguingan and Pinamunghilan,
Barrio of San Juan, Licab, Nueva Ecija. 4
In line with the Comprehensive Agrarian
Reform Program (CARP) of the government,
Wycoco voluntarily offered to sell the land to
the Department of Agrarian Reform (DAR) for
P14.9 million. 5 In November 1991, after the
DAR's evaluation of the application and the
determination of the just compensation by the
Land Bank of the Philippines (LBP), a notice of
intention to acquire 84.5690 hectares of the
property for P1,342,667.46 6 was sent to
Wycoco. The amount offered was later raised
to P2,594,045.39 and, upon review, was
modified to P2,280,159.82. 7 The area which
the DAR offered to acquire excluded idle lands,
river and road located therein. Wycoco
rejected the offer, prompting the DAR to
indorse the case to the Department of Agrarian
Reform Adjudication Board (DARAB) for the
purpose of fixing the just compensation in a
summary administrative proceeding. 8 The
case was docketed as DARAB VOS Case No.
232 NE 93. Thereafter, the DARAB requested
LBP to open a trust account in the name of
Wycoco and deposited the compensation
offered by DAR. 9 In the meantime, the
property was distributed to farmer-
beneficiaries.
On March 29, 1993, DARAB required the
parties to submit their respective memoranda
or position papers in support of their claim. 10
Wycoco, however, decided to forego with the
filing of the required pleadings, and instead
filed on April 13, 1993, the instant case for
determination of just compensation with the
Regional Trial Court of Cabanatuan City,
Branch 23, docketed as Agrarian Case No. 91
(AF). 11 Impleaded as party-defendants
therein were DAR and LBP.
On April 30, 1993, Wycoco filed a
manifestation in VOS Case No. 232 NE 93,
informing the DARAB of the pendency of
Agrarian Case No. 91 (AF) with the
Cabanatuan court, acting as a special agrarian
court. 12 On March 9, 1994, the DARAB issued
an order dismissing the case to give way to the
determination of just compensation by the
Cabanatuan court. Pertinent portion thereof
states:
Admittedly, this Forum is vested with the
jurisdiction to conduct administrative
proceeding to determine compensation.
[H]owever, a thorough perusal of petitioner's
complaint showed that he did not only raise
the issue of valuation but such other matters The evidence presented by Wycoco in support
which are beyond the competence of the of his claim were the following: (1) Transfer
Board. Besides, the petitioner has the option to Certificate of Title No. NT-206422; (2) Notice
avail the administrative remedies or bring the of Land Valuation dated June 18, 1992; and
matter on just compensation to the Special (3) letter dated July 10, 1992 rejecting the
Agrarian Court for final determination. counter-offer of LBP and DAR. 16 On the other
hand, DAR and LBP presented the Land
WHEREFORE, premises considered, this case is Valuation Worksheets. 17
hereby dismissed.
On November 14, 1995, the trial court
SO ORDERED. 13 rendered a decision in favor of Wycoco. It ruled
that there is no need to present evidence in
Meanwhile, DAR and LBP filed their respective
support of the land valuation inasmuch as it is
answers before the special agrarian court in
of public knowledge that the prevailing market
Agrarian Case No. 91 (AF), contending that the
value of agricultural lands sold in Licab, Nueva
valuation of Wycoco's property was in
Ecija is from P135,000.00 to 150,000.00 per
accordance with law and that the latter failed
hectare. The court thus took judicial notice
to exhaust administrative remedies by not
thereof and fixed the compensation for the
participating in the summary administrative
entire 94.1690 hectare land at P142,500.00
proceedings before the DARAB which has
per hectare or a total of P13,428,082.00. It
primary jurisdiction over determination of land
also awarded Wycoco actual damages for
valuation. 14
unrealized profits plus legal interest. The
dispositive portion thereof states:
After conducting a pre-trial on October 3,
1994, the trial court issued a pre-trial order as
WHEREFORE, premises considered, judgment
follows:
is hereby rendered:
The parties manifested that there is no
1. Ordering the defendants to pay the
possibility of amicable settlement, neither are
amount of P13,419,082.00 to plaintiff as just
they willing to admit or stipulate on facts,
compensation for the property acquired;
except those contained in the pleadings.
2. Ordering the defendants to pay plaintiff
The only issue left is for the determination of
the amount of P29,663,235.00 representing
just compensation or correct valuation of the
the unrealized profits from the time of
land owned by the plaintiff subject of this case.
acquisition of the subject property and the sum
of P8,475,210.00 for every calendar year, until
The parties then prayed to terminate the pre-
the amount of compensation is fully paid
trial conference.
including legal interest which had accrued
AS PRAYED FOR, the pre-trial conference is thereon.
considered terminated, and instead of trial, the
No pronouncement as to costs.
parties are allowed to submit their respective
memoranda.
SO ORDERED. 18
WHEREFORE, the parties are given twenty (20)
The DAR and the LBP filed separate petitions
days from today within which to file their
before the Court of Appeals. The petition
simultaneous memoranda, and another ten
brought by DAR on jurisdictional and
(10) days from receipt thereof to file their
procedural issues, docketed as CA-G.R. No. SP
Reply/Rejoinder, if any, and thereafter, this
No. 39234, was dismissed on May 29, 1997.
case shall be deemed submitted for decision.
19 The dismissal became final and executory
on June 26, 1997. 20 This prompted Wycoco to
SO ORDERED. 15
file a petition for mandamus before this Court,
docketed as G.R. No. 146733, praying that the
decision of the Regional Trial Court of
Cabanatuan City, Branch 23, in Agrarian Case
No. 91 (AF) be executed, and that Judge
Rodrigo S. Caspillo, the now presiding Judge of
said court, be compelled to inhibit himself from
hearing the case.
The petition brought by LBP on both
substantive and procedural grounds, docketed
as CA-G.R. No. SP No. 39913, was likewise
dismissed by the Court of Appeals on February
9, 1999. 21 On September 22, 1999, however,
the Court of Appeals modified its decision by
deducting from the compensation due Wycoco
the amount corresponding to the 3.3672
hectare portion of the 94.1690 hectare land
which was found to have been previously sold
by Wycoco to the Republic, thus
WHEREFORE, and conformably with the above,
Our decision of February 9, 1999 is hereby
MODIFIED in the sense that the value
corresponding to the aforesaid 3.3672 hectares
and all the awards appertaining thereto in the
decision a quo are ordered deducted from the
totality of the awards granted to the private
respondent. In all other respects, the decision
sought to be reconsidered is hereby RE-
AFFIRMED and REITERATED.
SO ORDERED. 22
In its petition, LBP contended that the Court of
Appeals erred in ruling:
I V
THAT THE TRIAL COURT ACTING AS A SPECIAL
AGRARIAN COURT MAY ASSUME
JURISDICTION OVER AGRARIAN CASE NO. 91
(AF) AND RENDER JUDGMENT THEREON
WITHOUT AN INITIAL ADMINISTRATIVE
DETERMINATION OF JUST COMPENSATION BY
THE DARAB PURSUANT TO SECTION 16 OF RA
6657, OVER THE TIMELY OBJECTION OF THE
PETITIONER, AND IN VIOLATION OF THE RULE
ON EXHAUSTION OF ADMINISTRATIVE
REMEDIES AND ON FORUM SHOPPING;
TAIEcS
II
THAT THE JUST COMPENSATION DETERMINED
BY THE TRIAL COURT WAS SUPPORTED BY
SUBSTANTIAL EVIDENCE, WHEN IT WAS
BASED ONLY ON JUDICIAL NOTICE OF THE
PREVAILING MARKET VALUE OF LAND BASED
ON THE ALLEGED PRICE OF TRANSFER OF
TENURIAL RIGHTS, TAKEN WITHOUT NOTICE
AND HEARING IN VIOLATION OF RULE 129 OF
THE RULES OF COURT;
III
THAT THE TRIAL COURT CAN REQUIRE THE
PETITIONER TO COMPENSATE THE PORTIONS
OF RESPONDENT'S PROPERTY WHICH WERE
NOT DECLARED BY THE DAR FOR
ACQUISITION, NOR SUITABLE FOR
AGRICULTURE NOR CAPABLE OF
DISTRIBUTION TO FARMER BENEFICIARIES
UNDER THE CARP;
IV
THAT THE TRIAL COURT CAN AWARD AS PART
OF JUST COMPENSATION LEGAL INTEREST ON
THE PRINCIPAL AND ALLEGED UNREALIZED
PROFITS OF P29,663,235.00 FROM THE TIME
OF ACQUISITION OF THE SUBJECT PROPERTY
AND P8,475,210.00 FOR EVERY CALENDAR
YEAR THEREAFTER, CONSIDERING THAT THE
SAME HAS NO LEGAL BASIS AND THAT THE
RESPONDENT RETAINED THE TITLE TO HIS
PROPERTY DESPITE THE DAR'S NOTICE OF
ACQUISITION;
THAT THE TRIAL COURT HAD VALIDLY
GRANTED EXECUTION PENDING APPEAL ON
THE ALLEGEDLY GOOD REASON OF THE
PETITIONER'S ADVANCED AGE AND WEAK
HEALTH, CONTRARY TO THE APPLICABLE
JURISPRUDENCE AND CONSIDERING THAT
THE RESPONDENT IS NOT DESTITUTE. 23
The issues for resolution are as follows: (1) Did
the Regional Trial Court, acting as Special
Agrarian Court, validly acquire jurisdiction over
the instant case for determination of just
compensation? (2) Assuming that it acquired
jurisdiction, was the compensation arrived at
supported by evidence? (3) Can Wycoco
compel the DAR to purchase the entire land
subject of the voluntary offer to sell? (4) Were
the awards of interest and damages for
unrealized profits valid?
Anent the issue of jurisdiction, the laws in
point are Sections 50 and 57 of Republic Act
No. 6657 (Comprehensive Agrarian Reform
Law of 1988) which, in pertinent part, provide:
Section 50. Quasi judicial Powers of the
DAR. The DAR is hereby vested with primary
jurisdiction to determine and adjudicate
agrarian reform matters and shall have
exclusive original jurisdiction over all matters
involving the implementation of agrarian
reform, except those falling under the
exclusive jurisdiction of the Department of
Agriculture (DA) and the Department of
Environment and Natural Resources (DENR). . .
. Series of 1990, the Land Bank of the
Section 57. Special Jurisdiction. The
Special Agrarian Court shall have original and
exclusive jurisdiction over all petitions for the
determination of just compensation to
landowners, and the prosecution of all criminal
offenses under this Act.
The Special Agrarian Courts shall decide all
appropriate cases under their special
jurisdiction within thirty (30) days from
submission of the case for decision.
In Republic v. Court of Appeals, 24 it was held
that Special Agrarian Courts are given original
and exclusive jurisdiction over two categories
of cases, to wit: (1) all petitions for the
determination of just compensation; and (2)
the prosecution of all criminal offenses under
R.A. No. 6657. Section 50 must be construed
in harmony with Section 57 by considering
cases involving the determination of just
compensation and criminal cases for violations
of R.A. No. 6657 as excepted from the
plenitude of power conferred to the DAR.
Indeed, there is a reason for this distinction.
The DAR, as an administrative agency, cannot
be granted jurisdiction over cases of eminent
domain and over criminal cases. The valuation
of property in eminent domain is essentially a
judicial function which is vested with the
Special Agrarian Courts and cannot be lodged
with administrative agencies. 25 In fact, Rule
XIII, Section 11 of the New Rules of Procedure
of the DARAB acknowledges this power of the
court, thus
Section 11. Land Valuation and Preliminary
Determination and Payment of Just
Compensation. The decision of the
Adjudicator on land valuation and preliminary
determination and payment of just
compensation shall not be appealable to the
Board but shall be brought directly to the
Regional Trial Courts designated as Special
Agrarian Courts within fifteen (15) days from
receipt of the notice thereof. Any party shall be
entitled to only one motion for reconsideration.
(Emphasis supplied)
Under Section 1 of Executive Order No. 405,
Philippines is charged with the initial
responsibility of determining the value of lands
placed under land reform and the just
compensation to be paid for their taking. 26
Through a notice of voluntary offer to sell
(VOS) submitted by the landowner,
accompanied by the required documents, the
DAR evaluates the application and determines
the land's suitability for agriculture. The LBP
likewise reviews the application and the
supporting documents and determines the
valuation of the land. Thereafter, the DAR
issues the Notice of Land Valuation to the
landowner. In both voluntary and compulsory
acquisition, where the landowner rejects the
offer, the DAR opens an account in the name
of the landowner and conducts a summary
administrative proceeding. If the landowner
disagrees with the valuation, the matter may
be brought to the Regional Trial Court acting
as a special agrarian court. This in essence is
the procedure for the determination of just
compensation. 27
In Land Bank of the Philippines v. Court of
Appeals, 28 the landowner filed an action for
determination of just compensation without
waiting for the completion of DARAB's re-
evaluation of the land. This, notwithstanding,
the Court held that the trial court properly
acquired jurisdiction because of its exclusive
and original jurisdiction over determination of
just compensation, thus
. . . It is clear from Sec. 57 that the RTC,
sitting as a Special Agrarian Court, has
"original and exclusive jurisdiction over all
petitions for the determination of just
compensation to landowners." This "original
and exclusive" jurisdiction of the RTC would be
undermined if the DAR would vest in
administrative officials original jurisdiction in
compensation cases and make the RTC an
appellate court for the review of administrative
decisions. Thus, although the new rules speak
of directly appealing the decision of
adjudicators to the RTCs sitting as Special
Agrarian Courts, it is clear from Sec. 57 that
the original and exclusive jurisdiction to
determine such cases is in the RTCs. Any effort
to transfer such jurisdiction to the adjudicators
and to convert the original jurisdiction of the
RTCs into an appellate jurisdiction would be
contrary to Sec. 57 and therefore would be
void. Thus, direct resort to the SAC [Special
Agrarian Court] by private respondent is valid.
(Emphasis supplied) 29
In the case at bar, therefore, the trial court
properly acquired jurisdiction over Wycoco's
complaint for determination of just
compensation. It must be stressed that
although no summary administrative
proceeding was held before the DARAB, LBP
was able to perform its legal mandate of
initially determining the value of Wycoco's land
pursuant to Executive Order No. 405, Series of
1990. What is more, DAR and LBP's conformity
to the pre-trial order which limited the issue
only to the determination of just compensation
estopped them from questioning the
jurisdiction of the special agrarian court. The
pre-trial order limited the issues to those not
disposed of by admission or agreements; and
the entry thereof controlled the subsequent
course of action. 30
Besides, the issue of whether Wycoco violated
the rule on exhaustion of administrative
remedies was rendered moot and academic in
view of the DARAB's dismissal 31 of the
administrative case to give way to and in
recognition of the court's power to determine
just compensation. 32
In arriving at the valuation of Wycoco's land,
the trial court took judicial notice of the alleged
prevailing market value of agricultural lands in
Licab, Nueva Ecija without apprising the
parties of its intention to take judicial notice
thereof. Section 3, Rule 129 of the Rules on
Evidence provides: aEAcHI
Sec. 3. Judicial Notice, When Hearing
Necessary. During the trial, the court, on its
own initiative, or on request of a party, may
announce its intention to take judicial notice of
any matter and allow the parties to be heard
thereon.
After trial and before judgment or on appeal,
the proper court, on its own initiative, or on
request of a party, may take judicial notice of
any matter and allow the parties to be heard
thereon if such matter is decisive of a material
issue in the case.
Inasmuch as the valuation of the property of
Wycoco is the very issue in the case at bar, the
trial court should have allowed the parties to
present evidence thereon instead of practically
assuming a valuation without basis. While
market value may be one of the bases of
determining just compensation, the same
cannot be arbitrarily arrived at without
considering the factors to be appreciated in
arriving at the fair market value of the
property e.g., the cost of acquisition, the
current value of like properties, its size, shape,
location, as well as the tax declarations
thereon. 33 Since these factors were not
considered, a remand of the case for
determination of just compensation is
necessary. The power to take judicial notice is
to be exercised by courts with caution
especially where the case involves a vast tract
of land. Care must be taken that the requisite
notoriety exists; and every reasonable doubt
on the subject should be promptly resolved in
the negative. To say that a court will take
judicial notice of a fact is merely another way
of saying that the usual form of evidence will
be dispensed with if knowledge of the fact can
be otherwise acquired. This is because the
court assumes that the matter is so notorious
that it will not be disputed. But judicial notice
is not judicial knowledge. The mere personal
knowledge of the judge is not the judicial
knowledge of the court, and he is not
authorized to make his individual knowledge of
a fact, not generally or professionally known,
the basis of his action. 34
Anent the third issue, the DAR cannot be
compelled to purchase the entire property
voluntarily offered by Wycoco. The power to
determine whether a parcel of land may come
within the coverage of the Comprehensive
Agrarian Reform Program is essentially lodged
with the DAR. That Wycoco will suffer damages
by the DAR's non-acquisition of the
approximately 10 hectare portion of the entire
land which was found to be not suitable for
agriculture is no justification to compel DAR to
acquire the whole area.
We find Wycoco's claim for payment of interest
partly meritorious. In Land Bank of the
Philippines v. Court of Appeals, 35 this Court
struck down as void DAR Administrative
Circular No. 9, Series of 1990, which provides
for the opening of trust accounts in lieu of the
deposit in cash or in bonds contemplated in
Section 16 (e) of RA 6657.
"It is very explicit . . . from [Section 16 (e)]
that the deposit must be made only in 'cash' or
in 'LBP bonds.' Nowhere does it appear nor can
it be inferred that the deposit can be made in
any other form. If it were the intention to
include a 'trust account' among the valid
modes of deposit, that should have been made
express, or at least, qualifying words ought to
have appeared from which it can be fairly
deduced that a 'trust account' is allowed. In
sum, there is no ambiguity in Section 16(e) of
RA 6657 to warrant an expanded construction
of the term 'deposit.'
xxx xxx xxx
"In the present suit, the DAR clearly
overstepped the limits of its powers to enact
rules and regulations when it issued
Administrative Circular No. 9. There is no basis
in allowing the opening of a trust account in
behalf of the landowner as compensation for
his property because, as heretofore discussed,
Section 16(e) of RA 6657 is very specific that
the deposit must be made only in 'cash' or in
'LBP bonds.' In the same vein, petitioners
cannot invoke LRA Circular Nos. 29, 29-A and
54 because these implementing regulations
can not outweigh the clear provision of the
law. Respondent court therefore did not
commit any error in striking down
Administrative Circular No. 9 for being null and
void. 36
Pursuant to the foregoing decision, DAR issued
Administrative Order No. 2, Series of 1996,
converting trust accounts in the name of
landowners into deposit accounts. The
transitory provision thereof states
VI. TRANSITORY PROVISIONS
All trust accounts issued pursuant to
Administrative Order No. 1, S. 1993 covering
landholdings not yet transferred in the name of
the Republic of the Philippines as of July 5,
1996 shall immediately be converted to deposit
accounts in the name of the landowners
concerned.
All Provincial Agrarian Reform Officers and
Regional Directors are directed to immediately
inventory the claim folders referred to in the
preceding paragraph, wherever they may be
found and request the LBP to establish the
requisite deposit under this Administrative
Order and to issue a new certification to that
effect. The Original Certificate of Trust Deposit
previously issued should be attached to the
request of the DAR in order that the same may
be replaced with a new one.
All previously established Trust Deposits which
served as the basis for the transfer of the
landowner's title to the Republic of the
Philippines shall likewise be converted to
deposits in cash and in bonds. The Bureau of
Land Acquisition and Distribution shall
coordinate with the LBP for this purpose.
In light of the foregoing, the trust account
opened by LBP in the name of Wycoco as the
mode of payment of just compensation should
be converted to a deposit account. Such
conversion should be retroactive in application
in order to rectify the error committed by the
DAR in opening a trust account and to grant
the landowners the benefits concomitant to
payment in cash or LBP bonds prior to the
ruling of the Court in Land Bank of the
Philippines v. Court of Appeals. Otherwise,
petitioner's right to payment of just and valid
compensation for the expropriation of his
property would be violated. 37 The interest
earnings accruing on the deposit account of
landowners would suffice to compensate them
pending payment of just compensation.
In some expropriation cases, the Court
imposed an interest of 12% per annum on the
just compensation due the landowner. It must
be stressed, however, that in these cases, the
imposition of interest was in the nature of
damages for delay in payment which in effect
makes the obligation on the part of the
government one of forbearance. 38 It follows
that the interest in the form of damages
cannot be applied where there was prompt and
valid payment of just compensation.
Conversely, where there was delay in
tendering a valid payment of just
compensation, imposition of interest is in
order. This is because the replacement of the
trust account with cash or LBP bonds did not
ipso facto cure the lack of compensation; for
essentially, the determination of this
compensation was marred by lack of due
process. 39
Accordingly, the just compensation due
Wycoco should bear 12% interest per annum
from the time LBP opened a trust account in
his name up to the time said account was
actually converted into cash and LBP bonds
deposit accounts. The basis of the 12%
interest would be the just compensation that
would be determined by the Special Agrarian
Court upon remand of the instant case. In the
same vein, the amount determined by the
Special Agrarian Court would also be the basis
of the interest income on the cash and bond
deposits due Wycoco from the time of the
taking of the property up to the time of actual
payment of just compensation.
The award of actual damages for unrealized
profits should be deleted. The amount of loss
must not only be capable of proof, but must be
proven with a reasonable degree of certainty.
The claim must be premised upon competent
proof or upon the best evidence obtainable,
such as receipts or other documentary proof.
40 None having been presented in the instant
case, the claim for unrealized profits cannot be
granted.
From the foregoing discussion, it is clear that
Wycoco's petition for mandamus in G.R. No.
146733 should be dismissed. The decision of
the Regional Trial Court of Cabanatuan City,
Branch 23, acting as Special Agrarian Court in
Agrarian Case No. 91 (AF), cannot be enforced
because there is a need to remand the case to
the trial court for determination of just
compensation. Likewise, the prayer for the
inhibition of Judge Rodrigo S. Caspillo in
Agrarian Case No. 91 (AF) is denied for lack of
basis.
WHEREFORE, in view of all the foregoing, the
petition in G.R. No. 140160 is PARTIALLY
GRANTED. Agrarian Case No. 91 (AF) is
REMANDED to the Regional Trial Court of
Cabanatuan City, Branch 23, for the
determination of just compensation. The
petition for mandamus in G.R. No. 146733 is
DISMISSED. IScaAE
SO ORDERED.
SPECIAL FIRST DIVISION
[G.R. No. 182431. February 27, 2013.]
LAND BANK OF THE PHILIPPINES, petitioner,
vs. ESTHER ANSON RIVERA, ANTONIO G.
ANSON AND CESAR G. ANSON, respondents.
RESOLUTION
PEREZ, J p:
The Case
Before the Court is a Motion for
Reconsideration 1 filed by the Land Bank of the
Philippines (LBP) alleging error on the part of
this Court in affirming the award of 12%
interest on just compensation due to the
landowner. HCEISc
The Facts
We reiterate the facts from the assailed 17
November 2010 Decision:
The respondents are the co-owners of a parcel
of agricultural land embraced by Original
Certificate of Title No. P-082, and later
transferred in their names under Transfer
Certificate of Title No. T-95690 that was placed
under the Operation Land Transfer pursuant to
Presidential Decree No. 27 in 1972. Only
18.8704 hectares of the total area of 20.5254
hectares were subject of the coverage.
After the Department of Agrarian Reform
(DAR) directed payment, LBP approved the
payment of P265,494.20, exclusive of the
advance payments made in the form of lease
rental amounting to P75,415.88 but inclusive
of 6% increment of P191,876.99 pursuant to
DAR Administrative Order No. 13, series of
1994. IaDSEA
On 1 December 1994, the respondents
instituted Civil Case No. 94-03 for
determination and payment of just
compensation before the Regional Trial Court
(RTC), Branch 3 of Legaspi City, claiming that
the landholding involved was irrigated with two
cropping seasons a year with an average gross
production per season of 100 cavans of 50
kilos/hectare, equivalent of 200
cavans/year/hectare; and that the fair market
value of the property was not less than
P130,000.00/hectare, or P2,668,302.00 for the
entire landholding of 20.5254 hectares.
LBP filed its Answer, stating that rice and corn
lands placed under the coverage of Presidential
Decree No. 27 [PD 27] 2 were governed and
valued in accordance with the provisions of
Executive Order No. 228 [EO 228] 3 as
implemented by DAR Administrative Order No.
2, Series of 1987 and other statutes and
administrative issuances; that the
administrative valuation of lands covered by
[PD 27] and [EO 228] rested solely in DAR and
LBP was the only financing arm; that the funds
that LBP would use to pay compensation were
public funds to be disbursed only in accordance
with existing laws and regulations; that the
supporting documents were not yet received
by LBP; and that the constitutionality of [PD
27] and [EO 228] was already settled. 4
CcHDaA
The Trial Court's Ruling
On 6 October 2004, the trial court rendered its
decision which reads:
ACCORDINGLY, the just compensation of the
land partly covered by TCT No. T-95690 is
fixed at Php1,297,710.63. Land Bank of the
Philippines is hereby ordered to pay Esther
Anson, Cesar Anson and Antonio Anson the
aforesaid value of the land, plus interest of
12% per annum or Php194.36 per day
effective October 7, 2004, until the value is
fully paid, in cash or in bond or in any other
mode of payment at the option of the
landowners in accordance with Sec. 18, R.A.
6657. 5
Discontented, LBP filed an appeal before the
Court of Appeals (CA). It argued that the trial
court erred in disregarding the lease rentals
already paid by the farmer beneficiaries as part
of the just compensation as well as the
imposition of 12% interest despite the
increment of 6% interest allowed under the EO
228 and DAR Administrative Order (A.O.) No.
13 Series of 1994 (A.O. 13-94). AEcTaS
The Court of Appeals' Ruling
The appellate court partly granted the petition
of the LBP, the fallo of the decision reading:
WHEREFORE, the DECISION DATED OCTOBER
6, 2004 is MODIFIED, ordering petitioner LAND
BANK OF THE PHILIPPINES to pay to the
respondents just compensation (inclusive of
interests as of October 6, 2004) in the amount
of P823,957.23, plus interest of 12% per
annum in the amount of P515,777.57 or
P61,893.30 per annum, beginning October 7,
2004 until just compensation is fully paid in
accordance with this decision.
Costs of suit to be paid by the petitioner. 6
aDCIHE
In its petition 7 before this Court, LBP alleged
error in the imposition of 12% interest per
annum beginning from 7 October 2004 until
full payment of just compensation for subject
property and the liability of the bank for costs
of suit.
17 November 2010 Decision
In its argument, LBP cited the applicability of
the DAR A.O. No. 2, Series of 2004 (A.O. 02-
04) which provides for the 6% interest
imposition to the just compensation until
actual payment. Further, it added that the
12% interest finds application in cases of
undue delay, which is not present in the case.
As to the payment of costs, the bank argued
that it was performing a governmental function
when it disbursed the Agrarian Reform Fund
(ARF) as the financial intermediary of the
agrarian program of the government.
In our 17 November 2010 Decision, this Court
partly granted the prayers of LBP and deleted
the costs adjudged. We agreed that the bank
was indeed performing a governmental
function in agrarian reform proceeding
pursuant to Section 1, Rule 142 8 of the Rules
of Court. 9 However, we upheld the imposition
of 12% interest on the just compensation
beginning 7 October 2004 until full payment.
We anchored our decision following the ruling
in Republic of the Philippines v. Court of
Appeals. 10 SIacTE
As a conclusion, the Court rendered the
assailed decision which reads:
WHEREFORE, premises considered, the petition
is GRANTED. The decision of the Court of
Appeals in C.A. G.R. SP No. 87463 dated 9
October 2007 is AFFIRMED with the
MODIFICATION that LBP is hereby held
exempted from the payment of costs of suit. In
all other respects, the Decision of the Court of
Appeals is AFFIRMED. No costs. 11
Aggrieved, LBP filed this present Motion for
Reconsideration and argued once again the
erroneous imposition of 12% interest. The
bank reiterated its previous argument that the
imposition is justifiable only in case of undue
delay in the payment of just compensation. 12
It argued 13 against the application of the A.O.
No. 6, Series of 2008 (A.O. 06-08) 14 to the
instant case because it claims that the 6%
interest does not apply to agricultural lands
valued under R.A. 6657, such as the subject
properties, following the Court's ruling in Land
Bank of the Philippines v. Chico. 15 acEHCD
We deny the prayers of LBP.
In many cases 16 decided by this Court, it has
been repeated time and again that the award
of 12% interest is imposed in the nature of
damages for delay in payment which in effect
makes the obligation on the part of the
government one of forbearance. This is to
ensure prompt payment of the value of the
land and limit the opportunity loss of the
owner that can drag from days to decades.
In this case, LBP is adamant in contending that
the landowners were promptly paid of their
just compensation. It argues that, "there is no
factual finding whatsoever indicating undue
delay on the part of LBP." 17
We disagree. aCcADT
It is true that LBP approved the amount of
P265,494.20 in favor of the landowners on 23
August 2004. 18 However, that amount is way
below the amount that should have been
received by the landowners based on the
valuations adjudged by the agrarian court, CA
and this Court. To be considered as just
compensation, it must be fair and equitable
and the landowners must have received it
without any delay. 19
The contention that there can be no delay
when there is a deposit of the amount of the
government valuation in favor of the
landowners was also the same argument
raised in the second Motion for Reconsideration
addressing the 12 October 2010 and 23
November 2010 Resolutions in Apo Fruits 20
case. LBP contended then that landowners APO
Fruits and Hijo Plantation did not suffer from
any delay in payment since the LBP made
partial payments prior to the taking of the
parcels of land. The Court there ruled that
twelve years passed after the Government
took the properties, before full payment was
settled. The Court took into account that the
partial payment made by LBP only amounted
to 5% of the actual value of property. 21
aEHTSc
Similar to Apo Fruits, the delay in this case is
traceable to the undervaluation of the property
of the government. Had the landholdings been
properly valued, the landowners would have
accepted the payment and there would have
been no need for a judicial determination of
just compensation. 22 The landowners could
not possibly accept P265,494.20 as full
payment for their entire 18 hectare-property.
It must be noted that the landowners, since
the deprivation of their property, have been
waiting for four decades to get the just
compensation due to them.
As in several other just compensation cases,
respondents faced the difficult problem
whether to accept a low valuation or file a case
for determination of just compensation before
the court. Before the choice is made, and for a
longer period if the judicial course is taken, the
landowners already are deprived of the income
that could have been yielded by their lands.
The Imperial case 23 is an applicable
precedent. SIAEHC
Juan H. Imperial (Imperial) was the owner of
five parcels of land with a total land area of
151.7168 hectares. Upon the effectivity of P.D.
No. 27 and EO 228, the parcels of land were
placed under the Land Reform Program and
distributed to the farmer-beneficiaries on 21
October 1972. On 20 July 1994, Imperial filed
a complaint for determination and payment of
just compensation before the Agrarian Court of
Legazpi City, Albay. As the amount fixed by
the agrarian court was found to be
inacceptable by the parties, the case went up
all the way to the Supreme Court. Before this
Court, LBP claimed that a 6% annual interest
in the concept of damages should not be
imposed because (1) the delay in the payment
of the just compensation was not its fault, and
(2) DAR A.O. No. 13 already provides for the
payment of a 6% annual interest, compounded
annually, provided that the just compensation
is computed in accordance with its prescribed
formula. 24 The Court partly granted the claim
of LBP and directed the trial court to re-
compute the just compensation by using the
formula prescribed by DAR A.O. No. 13, as
amended, which imposed a 6% interest
compounded annually from the date of the
compensable taking on 21 October 1972 until
31 December 2006; and thereafter, at the rate
of 12% per annum, until full payment is made.
25 This is to mean that from 1 January 2007
onwards, there shall be an imposition of 12%
interest per annum until full payment in the
nature of damages for the delay. The reason
given was that it would be inequitable to
determine the just compensation based solely
on the formula provided by DAR A.O. No. 13,
as amended. Just compensation does not only
pertain to the amount to be paid to the owners
of the land, but also its payment within a
reasonable time from the taking of the land;
hence the imposition of interest in the nature
of damages for the delay. 26 aDcHIC
In this case, LBP pointed out the error made by
this Court in Imperial in determining the extent
of the period of applicability of the 6%
compounded interest. 27 It asserts that:
"Based on the foregoing, this Court deemed
the day after the expiration of DAR A.O. No.
13, meaning 1 January 2007, as the date of
finality, constraining it to impose the 12%
interest per annum.
However, beyond the knowledge of the
Supreme Court, a subsequent DAR A.O.
extended the applicability of the imposition of
6% interest compounded annually from 1
January 2007 until [31] December 2009.
Following the new DAR A.O., only 6% interest
compounded annually would have been the
correct interest to be imposed. This was not
imposed, however, simply because the day
after 31 December 2006 or 01 January 2007
was deemed by the Supreme Court as the date
of finality, leading to the imposition of 12%
interest." 28 AECDHS
Contrary to the position of LBP, this Court did
not commit a mistake in not applying the
extension thru A.O. 06-08 of the 6% interest
until 31 December 2009. It must be
understood that at the time of the
promulgation of the Imperial Decision on 12
February 2007, A.O. 06-08 was not yet
effective, as it was signed only on 30 July
2008.
Likewise, it is erroneous for LBP to anchor its
motion on the contention that the 6% interest
compounded annually does not apply to
agricultural lands valued under R.A. 6657 such
as the subject properties. 29 The fact is that
the valuation in the instant case was under
P.D. 27 and E.O. 228, as adjudged by the trial
court, because even if at the time of valuation
R.A. 6657 was already effective, the
respondents failed to present any evidence on
the valuation factors under Section 17 of R.A.
6657.
The Computation
The purpose of A.O. No. 13 is to compensate
the landowners for unearned interests. Had
they been paid in 1972 when the Government
Support Price (GSP) for rice and corn was
valued at P35.00 and P31.00, respectively, and
such amounts were deposited in a bank, they
would have earned a compounded interest of
6% per annum. Thus, if the [Provincial
Agrarian Reform Adjudicator] [(]PARAD[)]
used the 1972 GSP, then the product of (2.5 x
Average Gross Production (AGP) x P35.00 or
P31.00) could be multiplied by (1.06) to
determine the value of the land plus the
additional 6% compounded interest it would
have earned from 1972. 30 cIHDaE
Following A.O. 13-94, the 6% yearly interest
compounded annually shall be reckoned from
21 October 1972 up to the effectivity date of
this Order which was on 21 October 1994.
However, A.O. 02-04 31 extended the period
of application of 6% interest from 21 October
1972 up to the time of actual payment but not
later than December 2006. Then, under A.O.
06-08, 32 the application of 6% interest was
further until 31 December 2009. It must be
noted that the term "actual payment" in the
administrative orders is to be interpreted as
"full payment" pursuant to the ruling in Land
Bank of the Philippines v. Obias 33 and Land
Bank of the Philippines v. Soriano. 34
The amount of land value of P164,059.26 was
already settled before the lower courts. 35
There is no need for a new computation.
DCTSEA
Applying the rules under A.O. 13-94, A.O. 02-
04 and A.O. 06-08 the formula to determine
the increment of 6% interest per annum
compounded annually beginning 21 October
1972 up to 31 December 2009 is:
CI = P (1 + R) n
(CI as compounded interest; P as the Principal;
R is the Rate of 6% and n = number of years
from date of tenancy starting from.)
Where:
P = P164,059.26
R = 6%
n = 37 years
COMPUTATION: TADaES
CI = P (1 + R) n
= P164,059.26 (1 + 6%) 37
years
= P164,059.26 (1.06) 37 years
= P1,252,770.80
Then we add the compounded interest to the
land value P164,059.26:
Compounded Amount = Land Value +
Compounded Interest
= P164,059.26 + P1,252,770.80
= P1,416,830.06
To compute the compounded amount to be
paid, we subtract the amount of lease rental of
P75,415.88 as adjudged by the appellate court
to the compounded amount: 36 HAcaCS
Compounded Amount = P1,416,830.06
less P75,415.88
365 days
= P1,341,414.18
= P160,969.69 x 50 days
We add a simple interest of 12% to the
compounded amount from 31 December 2009
until the promulgation of this decision due to
365
the delay incurred by LBP in not paying the full
just compensation to the Spouses: aSTECI
= P441.01 x 50 days
I=PxRxT
= P22,050.50
(I = Interest, R = Rate, T = Time)
=========
Where:
Final Just Compensation =
Compounded Amount + Interest
P = Compounded Amount
= P1,341,414.18 +
R = 12%
P482,909.1048+ P22,050.50
T = 31 December 2009 to 31 December 2012
= P1,846,373.70
1. COMPUTATION: 31 December 2009 to
WHEREFORE, premises considered, we
31 December 2012 THIAaD
PARTIALLY GRANT the petitioner's Motion for
I=PxRxT Reconsideration. The Decision dated 17
November 2010 of the Court's First Division is
I = (Compounded Amount) (.12) (3 years) hereby MODIFIED. aSTECA

I = P1,341,414.18 (.12) (3 years) The petitioner Land Bank of the Philippines is

hereby ORDERED to pay Esther Anson Rivera,
I = P482,909.1048 Antonio G. Anson and Cesar G. Anson
P1,846,373.70 as final just compensation plus
2. COMPUTATION: 31 December 2012 to
interest at the rate of 12% per annum from
20 February 2013
the finality of this decision until full payment.
I=PxRxT
SO ORDERED.
= (Compounded Amount) (12%
interest) x No. of Days
SECOND DIVISION

[G.R. Nos. 180772 and 180776. May 6, 2010.]

365 days LAND BANK OF THE PHILIPPINES [LBP],

petitioner, vs. DOMINGO AND MAMERTO
= (Compounded Amount) (.12)
SORIANO, respondents.
x 50 days
DECISION

PEREZ, J p:
365 days
For consideration is a Petition for Review on
= (P1,341,414.18) (.12) x 50
Certiorari under Rule 45 of the Rules of Court
days
filed by the Land Bank of the Philippines (LBP)
seeking the annulment of the Decision 1 dated
9 October 2007 and the Resolution 2 dated 12
December 2007 issued by the Court of Appeals
in CA-G.R. SP Nos. 89005 and 89288.
cTECHI
The controversy is hinged on the determination
of just compensation for land covered by the
Comprehensive Agrarian Reform Program
(CARP).
First, the antecedents.
Domingo and Mamerto Soriano (respondents)
are the registered owners of several parcels of
rice land situated in Oas, Albay. Out of the
18.9163 hectares of land 3 owned by the
respondents, 18.2820 hectares were placed
under the Operations Land Transfer and the
CARP pursuant to Presidential Decree No. 27 4
and Republic Act No. 6657, otherwise known
as the Comprehensive Agrarian Reform Law. 5
The LBP 6 pegged the value of 18.0491
hectares of land at P482,363.95 7
(P133,751.65 as land value plus P348,612.30
incremental interest), while the remaining
0.2329 hectare was computed at P8,238.94. 8
Not satisfied with the valuation, respondents,
on 23 November 2000, instituted a Complaint
9 for judicial determination of just
compensation with the Regional Trial Court of
Legazpi City, 10 sitting as a Special Agrarian
Court (SAC). Respondents alleged that they
are entitled to an amount of not less than
P4,500,000.00 as just compensation. 11
EHScCA
On 21 February 2005, the SAC rendered a
judgment, ordering LBP to pay the respondents
P894,584.94. The dispositive portion reads:
ACCORDINGLY, the just compensation of the
18.0491 hectares of irrigated riceland is
P133,751.79, plus increment of 6% per annum
computed annually beginning October 21,
1972, until the value is fully paid, and of the
0.2329 hectare of rain fed riceland is
P8,238.94 plus 12% interest per annum,
beginning August 17, 1998, until the value is
fully paid or a total of P894,584.94 as of this
date. Land Bank is ordered to pay the
landowners Domingo Soriano and Mamerto
Soriano said amount/land value in accordance
with law. 12
The SAC applied the formula prescribed under
Executive Order No. 228 in determining the
valuation of the property, i.e., Land value =
Average Gross Production x 2.5 x Government
Support Price. It likewise granted compounded
interest pursuant to Department of Agrarian
Reform (DAR) Administrative Order No. 13,
series of 1994, as amended by DAR
Administrative Order No. 2, series of 2004.
Both parties disagreed with the trial court's
valuation, prompting them to file their
respective appeals with the Court of Appeals.
The appellate court, however, affirmed the
judgment of the trial court. It also upheld the
award of compounded interest, thus: DaTICE
In the case at bar, the subject lands were
taken under PD 27 and were covered by
Operation Land Transfer, making the aforecited
Administrative Order applicable. Hence, the
Petitioners SORIANOs are entitled to the 6%
compounded interest per annum from the date
of taking on 21 October 1972 until full
payment of the just compensation. 13
LBP moved for reconsideration but it was
denied by the Court of Appeals on 12
December 2007.
LBP filed the instant petition seeking to nullify
the appellate court's decision and resolution,
particularly the amount awarded to
respondents as just compensation.
Basic is the tenet that since respondents were
deprived of their land, they are entitled to just
compensation. Under Executive Order No. 228,
the formula used to compute the land value is:
Land value = Average Gross
Production (AGP) x 2.5
x Government Support Price
(GSP)
With the passage of Republic Act (R.A.) No.
6657 or the CARL in 1988, new guidelines were
set for the determination of just compensation. Where: LV = Land Value
In particular, Section 17 provides, thus:
SEHTIc CNI = Capitalized Net Income

Determination of Just Compensation. In CS = Comparable Sales

determining just compensation, the cost of
MV = Market Value per Tax Declaration
acquisition of the land, the current value of like
15
properties, its nature, actual use and income,
the sworn valuation by the owner, the tax
As much as this Court would like to determine
declarations, and the assessment made by
the proper valuation based on the formula
government assessors shall be considered. The
cited above, the records of this case are bereft
social and economic benefits contributed by
of adequate data. To write finis to this case, we
the farmers and the farmworkers and by the
uphold the amount derived from the old
Government to the property as well as the
formula. However, since the application of the
non-payment of taxes or loans secured from
new formula is a matter of law and thus,
any government financing institution on the
should be made applicable, the parties are not
said land shall be considered as additional
precluded from asking for any additional
factors to determine its valuation.
amount as may be warranted by the new
formula.
Consequently, two divergent formulae arose
which prompted the Court to come up with a
On to the more pertinent issue. LBP assails the
categorical pronouncement that, if just
imposition of 6% interest rate on the 18.0491
compensation is not settled prior to the
hectares of lot valued at P133,751.65. It avers
passage of Republic Act No. 6657, it should be
that the incremental interest due to the
computed in accordance with the said law,
respondents should be computed from the date
although the property was acquired under
of taking on 21 October 1972, not up to full
Presidential Decree No. 27. The fixing of just
payment of just compensation but up to the
compensation should therefore be based on
time LBP approved the payment of their just
the parameters set out in Republic Act No.
compensation claim and a corresponding
6657, with Presidential Decree No. 27 and
deposit of the compensation proceeds was
Executive Order No. 228 having only
made by the bank. LBP relies on the provisions
suppletory effect. 14
of DAR Administrative Order No. 13, series of
1994, as amended, which substantially
In the instant case, while the subject lands
provides that "the grant of 6% yearly interest
were acquired under Presidential Decree No.
compounded annually shall be reckoned from
27, the complaint for just compensation was
21 October 1972 up to the time of actual
only lodged before the court on 23 November
payment but not later than December 2006."
2000 or long after the passage of Republic Act
LBP stresses that under said Administrative
No. 6657 in 1988. Therefore, Section 17 of
Order, time of actual payment is defined as the
Republic Act No. 6657 should be the principal
date when LBP approves the payment of the
basis of the computation for just
land transfer claim and deposits the
compensation. As a matter of fact, the factors
compensation proceeds in the name of the
enumerated therein had already been
landowner in cash and in bonds. In sum, LBP
translated into a basic formula by the DAR
posits that the appellate court departed from
pursuant to its rule-making power under
the express provision of DAR Administrative
Section 49 of Republic Act No. 6657. The
Order No. 13, as amended, by imposing an
formula outlined in DAR Administrative Order
interest to be reckoned from the time of taking
No. 5, series of 1998 should be applied in
up to the actual payment of just compensation.
computing just compensation, thus: aDHScI
16 TaCSAD
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Respondents counter that the award of interest Order seems to favor LBP's interpretation with
until full payment of just compensation was respect to the period covered by the interest
correctly adhered to by the lower courts in line rate. We quote the relevant portion of the
with the Court's ruling in Land Bank of the Administrative Order:
Philippines v. Imperial, 17 which found it
inequitable to determine just compensation The grant of six percent (6%) yearly interest
based solely on the formula provided by DAR compounded annually shall be reckoned as
Administrative Order No. 13, as amended. follows: ADcSHC
According to respondents, the award of
3.1 Tenanted as of 21 October 1972 and
interest until full payment of just compensation
covered under OLT From 21 October 1972
is to ensure prompt payment. Moreover,
up to the time of actual payment but not later
respondents claim that the date LBP approves
than December 2006
the payment of the land transfer claim and
deposits the proceeds in the name of the
3.2 Tenanted after 21 October 1972 and
landowner is not tantamount to actual
covered under OLT From the date when the
payment because on said date, the release of
land was actually tenanted (by virtue of
the amount is conditioned on certain
Regional Order of Placement issued prior to
requirements. 18
August 18, 1987) up to the time of actual
payment but not later than December 2006
This issue has already been raised before the
Court of Appeals by LBP, first, in its petition for
Time of actual payment is the date when the
review and, second, in its motion for
Land Bank of the Philippines (LBP) approves
reconsideration. The Court of Appeals,
payment of the land transfer claim and
however, neglected to give a definitive ruling
deposits the compensation proceeds in the
on the issue of computation of interest and
name of the landowner (LO) in cash and in
merely echoed the trial court's ruling that
bonds. The release of payment can be claimed
respondents are entitled to the 6%
by the landowner upon compliance with the
compounded interest per annum from the date
documentary requirements for release of
of taking on 21 October 1972 until full
payment. 20
payment of just compensation. AaIDCS
However, as embodied in its Prefatory
At any rate, we cannot subscribe to the
Statement, the intent of the Administrative
arguments of LBP.
Order was precisely to address a situation
"where a number of landholdings remain
Section 4, Article XIII of the 1987 Constitution,
unpaid in view of the non-acceptance by the
mandates that the redistribution of agricultural
landowners of the compensation due to low
lands shall be subject to the payment of just
valuation. Had the landowner been paid from
compensation. The deliberations of the 1986
the time of taking his land and the money
Constitutional Commission on this subject
deposited in a bank, the money would have
reveal that just compensation should not do
earned the same interest rate compounded
violence to the Bill of Rights, but should also
annually as authorized under banking laws,
not make an insurmountable obstacle to a
rules and regulations." 21 The concept of just
successful agrarian reform program. Hence,
compensation embraces not only the correct
the landowner's right to just compensation
determination of the amount to be paid to the
should be balanced with agrarian reform. 19
owners of the land, but also payment within a
Administrative Order No. 13, as amended, was reasonable time from its taking. Without
issued to compensate those who were prompt payment, compensation cannot be
effectively deprived of their lands by considered "just" inasmuch as the property
expropriation. LBP relies on said Administrative owner is made to suffer the consequences of
Order to justify its own computation of being immediately deprived of his land while
interest. A literal reading of this Administrative being made to wait for a decade or more
before actually receiving the amount necessary
to cope with his loss. 22 To condition the
payment upon LBP's approval and its release
upon compliance with some documentary
requirements would render nugatory the very
essence of "prompt payment." Therefore, to
expedite the payment of just compensation, it
is logical to conclude that the 6% interest rate
be imposed from the time of taking up to the
time of full payment of just compensation.
EIaDHS
Resolution dated 12 December 2007 of the
Court of Appeals in CA-G.R. SP Nos. 89005 and
89288 are hereby AFFIRMED without prejudice
to the right of the parties for additional claims
that may arise in the application of DAR
Administrative Order No. 5, series of 1998 in
relation to R.A. No. 6657.
SO ORDERED.

Certainly, the trend of recent rulings bolsters

this interpretation. In Forform Development
Corporation v. Philippine National Railways, 23
the Philippine National Railways was directed
to file the appropriate expropriation action over
the land in question, so that just compensation
due to its owner may be determined in
accordance with the Rules of Court, with
interest at the legal rate of 6% per annum
from the time of taking until full payment is
made. The Court in Manila International Airport
Authority v. Rodriguez 24 ordered just
compensation for the portion of respondent's
lot actually occupied by the runway, with
interest thereon at the legal rate of 6% per
annum from the time of taking until full
payment is made.

LBP also proffers that just compensation

pertaining to the 0.2329 hectare valued at
P8,238.94 with no pronouncement as to
interest per the Department of Agrarian
Reform Adjudication Board (DARAB) decision
has already attained finality, hence, it cannot
be modified. 25

Anent the DARAB decision relating to the

0.2329 hectare, suffice it to say that the
determination of just compensation is a judicial
function. 26 The DAR's land valuation is only
preliminary and is not, by any means, final and
conclusive upon the landowner or any other
interested party. In the exercise of their
functions, the courts still have the final say on
what the amount of just compensation will be.
27 Hence, we sustain the computation reached
by the trial court. cHECAS

WHEREFORE, the petition is DENIED. The

Decision dated 9 October 2007 and the